In 2020, the NDSF (the National Development and Social Fund “NDSF” and “Fund”) received 27.8 million euros from the Community Malta Agency, so that the total amount of revenue received since its inception to this day amounted to 599.8 million euros. In 2019, NDSF received 105.9 million euros.
The difference is the result of the fact that in 2020 the fund allocation ratio has been changed to reflect the demands of the global health pandemic. While under normal circumstances 70% of Komunità Malta’s product was normally received by the NSDF, this percentage was increased to 20%.
This political decision gave the government more money when it needed it most, to help save jobs and lives. Despite the fact that the performance of the investments was mainly conditioned by the increased volatility of the markets due to the pandemic, the NDSF recorded a net profit of € 59,049 for the fiscal year ended December 31, 2020.
This is comparable to a gain of 3.25 million euros the previous year. Among the most remarkable investments allocated by the NDSF are: 66 million euros in social housing, for the construction of a large number of housing units; € 5 million for Puttinu Cares for the purchase of a property in central London; 10 million euros for local health centers; 1.5 million euros for Caritas; 1.5 million euros of investment in artistic heritage, 3.5 million euros in urban greening projects and 950,000 euros of investment in the cardiology department of the Mater Dei hospital to modernize its two catheterization rooms. In 2020, the total assets of the Fund increased by 4.82%, from 570.58 million euros in 2019 to 598.10 million euros in 2020. Total assets include 364.96 million euros. euros held in foreign and domestic financial investments, 1.48 million euros in property assets and 227.19 million in cash and cash equivalents.
The Fund’s assets are held in three portfolios, namely a discretionary portfolio, a directed portfolio and an unallocated portfolio. The total return net of fees amounts to € 64,157 representing a consolidated weighted average return of 0.02%. The net asset value of the discretionary portfolio was € 108.70 million as of December 31, 2020 (2019: € 103.10 million) with an additional investment of € 6 million year-on-year. The discretionary portfolio consists primarily of a balanced portfolio of foreign bonds and quality foreign equities with an average rating of A +. The overall objective of the discretionary portfolio is the preservation of capital and the reinvestment of investment returns over the long term.
The total return of the discretionary portfolio in 2020 amounted to a loss of (€ 353,477) against a gain of € 5.56 million in 2019. The discretionary portfolio consists of two separate portfolios. A portfolio with an initial investment of 100 million euros is placed with the National Development and Social Fund Orange Grove, Birbal Street, Balzan E. [email protected] W. www.ndsf.com.mt T. +356 2295 7381 Central Bank of Malta, which in turn has outsourced portfolio investment management to a leading global investment manager. The second global equity portfolio of € 6 million is placed with BOV Asset Management Limited. The net asset value of the Managed Portfolio, as of December 31, 2020, amounted to € 260 million (2019: € 95.21 million).
The managed portfolio consists only of domestic assets and at the end of the year consisted of 33.47% local equities, which include the Fund’s holdings in Bank of Valletta plc and Lombard Bank Malta plc., 2, 96% in local corporate bonds and 63.57% in Maltese government securities. and local treasury bills. The managed portfolio is managed internally. In 2020, the Fund continued to invest substantially in local securities listed on the Malta Stock Exchange and, in addition to its two main holdings mentioned above, established an income portfolio consisting of 18 locally listed holdings and 15 locally listed corporate bonds. The total return of the managed portfolio amounts to a slight gain of 0.41 million euros compared to a loss of (2.30 million euros in 2019.
The moderate performance of the managed portfolio is mainly due to negative changes in the fair value of local equity holdings and lower income generated by dividends and interest. The Directed Portfolio is used to fund social and economic initiatives, which may or may not have a direct financial return to the Fund. In cases where the social and economic initiatives undertaken by the Fund do not have a direct financial return for the Fund, the investment will be considered a grant with a “social or economic return”.
All investment proposals for which there is no direct financial return for the Fund are evaluated by the Board of Governors to ensure that these investments generate a positive social or economic impact. The Unallocated Portfolio holds the cash balance held with the Central Bank of Malta in a separate account in the name of NDSF as of December 31, 2020 and amounted to EUR 227.19 million. From its inception until December 31, 2020, the NDSF has targeted around € 109.04 million for the well-being of society, ranging from health, social housing to sport.
The major part of this allocation will be devoted to the provision of a significant number of social housing units over a period of three years. The second largest allocation of funds went to the primary health care sector. Finally, the Board of Governors would like to express its gratitude and appreciation to the management and staff of NDSF for their commitment and contribution to another successful year and to the members of the Advisory Board for their continued support.
The NDSF 2020 Annual Report and Audited Financial Statements are available on the NDSF web portal www.ndsf.com.mt