Emerging markets lift DPF to P12bn

Pauline Dikuelo | Monday October 5, 2026 10:26

 

The fund’s AUM increased from P11.85 billion in March 2026, whilst its overall investment portfolio delivered a quarterly return of seven percent. The DPF is the country’s second largest pension fund in terms of assets.

In an update to members, the DPF said emerging market equities were the strongest-performing asset class during the second quarter, recording a 27.03% return in pula terms. China equities followed with a 19.77% return, while global equities gained 11.43%.

During the reporting period, global property also performed strongly, returning 8.28 percent. Local equities gained 1.98 percent, whilst local bonds returned 1.48 percent. Global bonds recorded a marginal 0.43 percent gain.

The fund said emerging market equities benefited from continued momentum in technology stocks, particularly as investor interest in artificial intelligence remained strong. Asian markets were key contributors to the asset class’s outperformance.

Local equities also continued to support the fund’s performance, extending their positive growth streak. The fund attributed the performance partly to exposure to fast-moving consumer goods stocks, particularly Sechaba, which reported stronger-than-expected earnings.

“As one of the fund’s largest allocations, local equities remain the largest source of relative return,” the fund said.

African listed equities also recorded commendable performance, with gains largely driven by exposure to telecommunications and financial services companies on Egyptian and West African stock exchanges.

The strong asset-class performance translated into positive returns across the fund’s investment channels. The market channel increased 7.46 percent during the quarter, followed by the pensioner channel at 6.52 percent and the conservative channel at 6.32 percent.

Over the 12 months to the end of the quarter, the Fund generated a positive return of 14.62%. The market channel recorded the highest return at 15.85%, followed by the conservative channel at 13.61%, and the pensioner channel at 13.21%.

The fund said the performance remained consistent with its life stage models investment strategy, with the more aggressive market channel outperforming the less aggressive pensioner channel over the 12-month period.

Looking ahead, the fund is maintaining a cautiously optimistic outlook for the second half of 2026 amidst a challenging global environment.

The DPF said renewed conflict in the Middle East and the continued imposition of tariffs present upside risks to inflation. Expectations of higher interest rates could also tighten financial conditions and push bond yields higher.

Global equity valuations remain elevated, although the fund noted that this is accompanied by earnings momentum. It cautioned, however, that concentration risk remains a concern.

Domestically, the fund said Botswana’s economy appears to be turning the corner, following growth in the first quarter and expectations of more than two percent GDP growth for the year.

Reduced pressure on the fiscus and improved liquidity conditions are also expected to support the economy. However, sensitivity to external demand remains a risk to growth, whilst economic diversification has yet to gain sufficient traction.