24 The NIBTT’s investment portfolio as at June 30, 2017 had a market value of $25.25Bn, reflecting a 3.77% or $918Mn increase over the Fund size, as at June 30, 2016, which stood at $24.33Bn. Overall, the portfolio generated a yield of 6.26% over the financial year. This uptick experienced in the Fund’s market value was attributable to realised income from the fixed income and equity portfolio, in excess of $768Mn, in addition to unrealised gains from foreign equities which amounted to $443Mn and foreign exchange gains on US-Dollar-Denominated investments of approximately $90Mn. This increase however, was partially offset by $440Mn in withdrawals from the Investments Cash Account, for payment of benefits. There continues to be a shortfall in contribution income to meet Insurance Operation’s liquidity requirements, which has a negative impact on the Fund’s ability to grow. As at June 30, 2017 the equity portfolio stood at $12.89Bn and fixed income at $8.37Bn. The Equity portfolio accounts for 51.07% of the total portfolio, while Fixed Income accounts for 33.14%. Both sub-portfolios experienced year on year growth of 12.83% ($1.47Bn) and 0.64% ($53.45Mn), respectively. The equity portfolio was negatively affected by the local stock market, with holdings in RBL and Massy experiencing significant market value declines over the year. However, the portfolio received a boost from new investments in the foreign equities portfolio, as well as an overall market value increase on foreign equity ($443Mn). During the year, the NIBTT participated and was successful in the First Citizens Additional Public Offering (APO). Returns on the equity portfolio was 8.57% as at June 30, 2017, compared to the previous year’s return of negative 0.28%. Foreign equities accounted for the bulk of the increase in returns experienced by the Equity portfolio. For the 2016/2017 financial year, the locally listed equities portfolio underperformed the All T&T Index by 225bps. This was mainly due to the allocation factor, where NIBTT is overweight in some stocks which performed poorly over the year, such as RBL and Massy. Additionally, during this period, the NIBTT invested in one new Foreign Fund Manager, CIBC, bringing the total Foreign Fund Managers to three. The total return on the Foreign Fund Manager portfolios was 17.67% for the financial year ended June 30, 2017. Revaluation of NIBTT’s subsidiaries resulted in an upward market value adjustment of approximately $149Mn over the financial period. The NIBTT’s Mutual Fund portfolio declined year on year by 10.18% or $105Mn on account of both a decline in the overall market value of the local funds as well as redemption of approximately $150Mn from Roytrin Mutual Income and Growth Fund, which was invested in higher yielding instruments. The overall decline was partially offset by an increase in the foreign mutual Fund portfolio of approximately $8Mn. The Fixed income portfolio increased marginally by 0.64% or $53.45Mn to $8.37Bn and had a purchase yield to maturity of 5.08%. During the financial year $1.88Bn in new fixed income instruments were added to the portfolio, while $1.39Mn of the portfolio matured during the year. Of the $1.88Bn of new fixed income investments, approximately 60% was invested in the Government of Trinidad and Tobago (GOTT) or GOTT-related instruments and 40% in Corporates. Approximately 50% of new fixed income instruments were invested in TT Dollar investments and 50% in US-Dollar-denominated investments. US Dollar investments consist of local corporate US Dollar issued and internationally issued bonds. Internationally issued bonds account for a small portion (2.62%) of the total fixed income portfolio. In April 2017, both Moody’s and Standard & Poor’s downgraded the Trinidad and Tobago economy, with Moody’s moving the country to non-investment grade status at Ba1 and S&P lowering the credit rating one notch down to BBB+. As a result, the local fixed income portfolio which accounts for over 97% of the fixed income portfolio, was affected by an increasing TT Dollar yield curve, mainly over the longer end of the curve, which resulted in negative movements for several bonds held in the portfolio with 10-20-year maturity profiles. The overall yield on the fixed income asset class portfolio as at June 30, 2017, was 5.08%, compared to 5.05% for the previous financial year. In addition to the maturing of some high coupon fixed income securities, held in the portfolio and the overall low interest rate environment, there also continues to be a dearth of suitable local investment opportunities from both the government and private sector.