The Board of Trustees of the FSM Trust Fund pose with Maggie Ralbovsky. Photo courtesy of FSMIS
The Federated States of Micronesia's Trust Fund had a total balance of $284.2 million as of Jan. 31, 2020, compared to $266.9 million reported at the end of fiscal 2019, according to Maggie Ralbovsky, FSM's investment advisor and chartered financial analyst from Wilshire Associates. This represents a fiscal-year-to-date return of 5 percent. Since 2011, the FSM Trust Fund’s investment gains has reached approximately $82 million. The rapid increase in the value of the FSM Trust Fund reflects the strong commitments from the executive and legislative branches to ensure the long-term financial prosperity of the FSM, according to a press release from FSM Information Service. "While we are pleased with the investment results, we are mindful of the challenges and risks we are facing from multiple fronts, including the ongoing disruption caused by the Covid-19 virus, and long-term disruptions from climate change induced events,” said Iso Ihlen Joseph, chairman of the board of trustees.
Established under the Compact of Free Association, the Trust Fund was designed to "contribute to the economic advancement and long-term budgetary self-reliance of" FSM by providing an annual source of revenue.
The Trust Fund's board met in Pohnpei with Ralbovsky last Thursday.
“It is important for us fiduciaries of this FSM sovereign wealth fund to keep a long-term perspective without being distracted by near-term market volatilities. Long-term sustainable investment principles require us to continuously evaluate sound diversification alternatives and promote responsible investment strategies to ensure the long-term sustainability of our trust fund," Finance and Administration Secretary Eugene Amor said. The vice chairman of the board of trustees, Fabian Nimea, said “the FSM Trust Fund can [be a] leader among the Pacific Islands in impacting future investment initiatives of the companies we invest in. We can engage with all companies that we provide capital to in the collective effort to ensure continued progress in curbing climate change and promoting sustainable ocean economy.” With these remarks, the board set its future initiatives in studying and promoting more sustainable investment strategies while managing near term market risks. The FSM Trust Fund is a sovereign wealth fund that was created by the FSM Congress through the FSM Code Title 55, Chapter 12 (as amended by subsequent Public Laws). The investment advisor, Wilshire Associates, is based in California and is one of the world’s major investment advisory and management firms for large institutions.