On Mon­day, Min­is­ter of Fi­nance, Colm Im­bert, is­sued what he de­scribed as the Her­itage and Sta­bil­i­sa­tion Fund (HSF) fact sheet, in which he re­spond­ed to an ar­ti­cle in the Sun­day Ex­press that cit­ed the Fund’s 2022 an­nu­al re­port.

The an­nu­al re­port for the fi­nan­cial year end­ed Sep­tem­ber 30, 2022, was laid in Par­lia­ment by Mr Im­bert on Feb­ru­ary 3. The an­nu­al re­port was post­ed on the web­site of the Min­istry of Fi­nance on June 7, 2023. Al­so post­ed on June 7, was the HSF’s first quar­ter re­port for the pe­ri­od Oc­to­ber 1 to De­cem­ber 31, 2023.

In his HSF fact sheet and at a news con­fer­ence on Mon­day, at which he ac­com­pa­nied Prime Min­is­ter Dr Kei­th Row­ley, the Min­is­ter of Fi­nance was able to re­fer to the sta­tus of the HSF, as of June 9, 2023. That in­for­ma­tion is not avail­able to the pub­lic.

1. ↓The net as­set val­ue of the Her­itage and Sta­bil­i­sa­tion Fund was US$5.466 Bil­lion (TT$37.17 Bil­lion) on Fri­day June 9, 2023.

2. ↓This is an in­crease of US$754 Mil­lion (TT$5.127 Bil­lion) in the ac­tu­al val­ue of the fund over the last nine months since Sep­tem­ber 2022. Ex­clud­ing a de­posit made in De­cem­ber 2022, the Fund has gen­er­at­ed com­pre­hen­sive in­come of al­most US$600 mil­lion since then.

3. ↓The fig­ures, da­ta and con­clu­sions pub­lished in the Sun­day Ex­press ar­ti­cle of June 11, 2023, on the HSF are over eight months old, out of date, mis­lead­ing and whol­ly ir­rel­e­vant be­cause the val­ue of the Fund fluc­tu­ates over time, as do all sov­er­eign wealth funds, since these funds re­act to the per­for­mance of glob­al stock mar­kets and fi­nan­cial in­stru­ments.

4. ↓This is il­lus­trat­ed by the fact that the Net As­set Val­ue of the HSF in­creased by US$327 mil­lion (TT$2.224 bil­lion) in the last six months, be­tween Jan­u­ary 1, 2023, and June 9, 2023, with­out any de­posits in­to the Fund from the Gov­ern­ment dur­ing that pe­ri­od.

5. ↓A fur­ther il­lus­tra­tion of the volatil­i­ty of glob­al mar­kets is the fact that dur­ing the two-month pe­ri­od May 15, 2020, to June 19, 2020, in the height of the Covid-19 pan­dem­ic, the HSF in­creased in val­ue by US$297 mil­lion (TT$2.019 bil­lion).

More strik­ing­ly, again dur­ing the Covid-19 pan­dem­ic, dur­ing the two-week pe­ri­od April 3, 2020, to April 17, 2020, the val­ue of the Fund in­creased by US$286 mil­lion (TT$1.945 bil­lion) in just 14 days. If the in­vert­ed log­ic of the Ex­press ar­ti­cle is to be fol­lowed, the Fund man­agers should have re­ceived a na­tion­al award for earn­ing al­most TT$2 bil­lion in two weeks in 2020.

6. ↓The An­nu­al Re­port of the Her­itage and Sta­bil­i­sa­tion Fund for the 12-month pe­ri­od end­ing on Sep­tem­ber 30, 2022, which ap­pears to be the ba­sis for the mis­lead­ing Sun­day Ex­press ar­ti­cle, was laid in Par­lia­ment by the Min­is­ter of Fi­nance, Hon. Colm Im­bert, MP, on Feb­ru­ary 3, 2023, over five months ago, and has there­fore been a pub­lic doc­u­ment for 129 days. It is cu­ri­ous that the Ex­press wait­ed five months to com­ment on that out­dat­ed re­port.

7. ↓It is pub­lic knowl­edge that 2022 was an ex­treme­ly chal­leng­ing year for mar­ket play­ers and sov­er­eign wealth funds, giv­en volatile geopol­i­tics, high in­fla­tion, ris­ing in­ter­est rates, and sig­nif­i­cant­ly neg­a­tive re­turns in both stocks and bonds. It is the first year in his­to­ry the size of the in­dus­try has shrunk. Heavy falls in stock and bond mar­kets in 2022 cut the com­bined val­ue of the world’s sov­er­eign wealth and pub­lic pen­sion funds for the first time ever. This would be well known to all me­dia.

8. ↓In fact, a re­port on state-owned in­vest­ment ve­hi­cles by the high­ly re­gard­ed in­dus­try spe­cial­ist Glob­al SWF found that the val­ue of as­sets man­aged by sov­er­eign wealth funds around the world fell in 2022 by US$900 bil­lion.

9. ↓For ex­am­ple, Nor­way’s wealth fund, one of the world’s largest in­vestors, post­ed a record loss of 1.64 tril­lion crowns (US$164.4 bil­lion) in 2022, los­ing 15 per cent in its val­ue in that year, and end­ing a three-year run of soar­ing prof­its as stocks and bonds were hit by the Ukraine war and in­fla­tion.

10. ↓In Sau­di Ara­bia, the mar­ket val­ue of the gen­er­al in­dex (TASI) de­creased by 528 bil­lion Riyals (-24 per cent) (-US$142 bil­lion) in 2022 from its val­ue at the end of 2021.

11. ↓The Chi­nese Sov­er­eign Wealth Fund, man­aged by the Chi­na In­vest­ment Cor­po­ra­tion, lost 24% of its val­ue in 2022, or over US$300 bil­lion, af­ter grow­ing by 35 per cent in 2019.

12. ↓There is noth­ing unique about the per­for­mance of T&T’s HSF in 2022, there­fore, and fur­ther, like oth­er sov­er­eign wealth funds, our fund has re­cov­ered strong­ly to the tune of over US$700 Mil­lion since the close of its last fis­cal year in Sep­tem­ber 2022. How­ev­er, the Sun­day Ex­press ar­ti­cle, con­tained no re­search, analy­sis, or in­for­ma­tion on the per­for­mance of glob­al eq­ui­ty mar­kets or sov­er­eign wealth funds be­tween 2022 and 2023, to prop­er­ly ed­u­cate and in­form the pub­lic.

13. ↓In fact, the graph­ics in the Sun­day Ex­press ar­ti­cle are in­ter­est­ing, with its front page ma­jor head­line an­nounc­ing a US$913 Mil­lion loss in the val­ue of the Fund in 2022, cou­pled with a very small hard-to-read box in the up­per right hand cor­ner of the as­so­ci­at­ed ar­ti­cle, where it re­luc­tant­ly ac­knowl­edged in that lit­tle box com­ment that the Fund ex­pe­ri­enced a “turn­around” be­tween Sep­tem­ber 2022 and De­cem­ber 2022, with­out re­veal­ing in that lit­tle box that in the last three months of 2022, the val­ue of the fund in­creased by over US$400 mil­lion.

14. ↓This mis­lead­ing Sun­day Ex­press ar­ti­cle was fol­lowed by an equal­ly un­in­formed ed­i­to­r­i­al in the Dai­ly Ex­press of June 12, 2023, to­day, which be­moaned what it re­ferred to as a 16 per cent loss in the val­ue of the HSF in 2022, and which ac­cord­ing to that mis­guid­ed news­pa­per will sure­ly be­come “po­lit­i­cal fod­der” for the up­com­ing Lo­cal Gov­ern­ment Elec­tion, with­out un­der­stand­ing the ir­rel­e­vance of its bar­ren and ir­re­spon­si­ble com­men­tary, since by June 2023, the Fund had in­creased in val­ue by 16 per cent from its val­ue in Sep­tem­ber 2022.

15. ↓It is note­wor­thy that de­spite with­drawals from the HSF over the last sev­en years and nine months of al­most US$1.9 Bil­lion, to fund the na­tion­al bud­get in dif­fi­cult pe­ri­ods, and the ad­verse tem­po­rary ef­fects of that very chal­leng­ing year for glob­al stock mar­kets in 2022, the Net As­set Val­ue of the Fund on June 9, 2023 at ap­prox­i­mate­ly US$5.5 Bil­lion is vir­tu­al­ly the same as it was in Sep­tem­ber 2015, which means that the fund has earned TT$12 Bil­lion in com­pre­hen­sive in­come since 2015.

16. ↓Fi­nal­ly, mis­guid­ed and un­in­formed com­men­tary by some of the usu­al crit­ics, par­tic­u­lar­ly from the Uni­ver­si­ty, who re­lied on that er­ro­neous ar­ti­cle as their ref­er­ence point, wrong­ly as­sum­ing it to be prop­er­ly re­searched and rel­e­vant, is both un­help­ful and un­pro­duc­tive.