The team constituted for the purpose is called Khyber Pakhtunkhwa Fund Management (KPFM). These funds are separate pools of monies, sponsored by the government of Khyber Pakhtunkhwa (GoKP), legally owned by the trust (the three legal bodies) and controlled by their respective boards for the welfare of its member beneficiaries. The department wants to implement a vibrant institutional framework to consolidate and manage potentially all of GoKP Funds yielding greater returns towards the fulfillment of stipulated objectives of each fund.
Under a strategy, currently, KPFM is investing in fixed income space; primarily in government of Pakistan Treasury-Bills (T-Bills), Pakistan Investment Bonds (PIBs), bank deposits and National Saving Schemes (NSS) and with the passage of time and more capacity and skill, KPFM would move towards greater diversification among asset classes.
Within fixed income, due to rising interest rate environment, monies were invested at shorter tenor, mostly three months in either T-Bills or bank deposits. This was resulted in significantly more profits, to the tone of roughly Rs 2 billion during FY 2019-20 compared to our historical approach of investing in 1-year tenor. Roughly, Rs 125 billion were progressively invested at higher rates (7 percent, 8 percent 10 percent and 13 percent) compared to 7 percent that would have been earned on these, had monies locked in 1-year tenor in June 2018.