As far as the performance of the Ghana Petroleum Funds is concerned, in the first half of 2020, the difference between the U.S. 10-year Treasury note yield and the 2-year note yield widened by 29.88% from 18.76 % in January 2020 to 48.64% at the end of June 2020, the petroleum holding fund & Ghana petroleum funds semi annual report, has said.
This follows a 9.62% increment from 24.82 % in June 2019 to 34.44% in December 2019. The U.S Treasury launched a 20-year treasury bond for the first time since 1986 to help fund borrowing during the period under review.
The 3-month Treasury bill fell by 141 bps from 1.54% to end Q2, 2020 at 0.13%.
The U.S 10-year Treasury note yield fell by 85 bps from 1.51% in January 2020 to 0.66% in June 2020, while the yield of the 2-year note tumbled by 116 bps from 1.31% in January 2020 to 0.15% at half year-end leading to a steepening of the yield curve.
Among the reasons accounting for this steepening of the yield curve were the net improvement in risk sentiment over reopening of the U.S economy, potential success in coronavirus vaccine development, upside surprise of the U.S May employment situation report offset by renewed geopolitical and social unrest, U.S-China trade tensions and health warnings of a premature reopening.
The general fall in yields across all tenors during H1 led to an increase in the capital appreciation of bonds as prices increased, improving the marked- to-market performance of the Ghana Petroleum Funds.
Total return on investment of the Ghana Heritage Fund (GHF) year to date (YTD), (1st half of 2020) was 5.28% as compared to 4.71% (1st half of 2019). The two-year annualised return (2Y (A)) of GHF was 6.58% whilst the three-year annualised return (3Y (A)) was 4.26%.