Intergenerational trust fund

The Nauru Intergenerational Trust Fund was established in 2015 to contribute to the long-term budgetary self-reliance of the Republic of Nauru.  The Minister for Finance is the Chairman of the management committee.

The Fund continues to grow through investment earnings and contributions from the Government of Nauru, Australia, Taiwan, New Zealand and initially the Asian Development Bank.   As of 30 June 2020, the value of the fund was $140 million, an increase of $28 million over the year.

The 2020 financial year will be remembered as one of the more extreme with regard to market volatility.  Nevertheless, the Fund achieved a positive return of 1.7 per cent over the past 12 months and remained ahead of its return objective since inception.  Since inception, the Fund’s performance as of 30 June 2020 was 7.2 per cent, against a target of 5.8 per cent (CPI + 4.5 per cent).

The Fund has a long term investment horizon that allows for a high exposure to growth assets to generate strong real investment returns.  This is reflected in its investment strategy that aims for a 85 per cent allocation to growth assets, and 15 per cent defensive.

The Fund continues to meet its objectives to:

  • Achieve a return of inflation + 4.5% over rolling 10-year periods.
  • Have a risk of negative returns of no more than 4 years in every 20 years.