Investment Approach & Beliefs
We are focused on delivering a sustainable plan over the long term, at a cost and risk level acceptable to our plan sponsors. Our beliefs reflect this role in securing pension income on behalf of plan members.
Our Investment Beliefs
- We are pension managers
- The nature of our pension promise is a key determinant of our investment strategy.
- We are risk managers
- We must take risk to earn the returns needed to meet our pension obligations while keeping the plan affordable for our members. This means we will experience investment losses from time to time. We control our risk to keep such losses within acceptable limits.
- Risk is a scarce resource. It must be taken deliberately to deliver the best return per unit of risk.
- Effective diversification is essential to building a portfolio robust to various market outcomes.
- We are long-term investors
- Investors with a long-term horizon have access to a richer opportunity set than do those with a short-term focus. This will allow for better performance over time.
- We are active investors
- A focus on portfolio construction will enable us to deliver the best risk-return trade-off relative to our pension obligations
- Market inefficiencies can create opportunities to enhance returns and reduce risk. The degree of opportunity can vary by asset class, region, market, and period.
- We are cost conscious
- Costs matter, but not to the detriment of net investment returns.
- We are responsive to change
- A return premium is available to early innovators. Return premiums fall as investment opportunities become crowded
- We embrace innovation while ensuring we have the appropriate processes and controls in place to manage our risks
- We are responsible investors
- Environmental, social, and governance factors have an impact on long-term returns. Incorporating these factors into the investment process and being an active shareholder adds value.
- We are trusted and respected partners
- Our reputation matters. We safeguard the trust given to us by our members. We develop strong relationships with like-minded partners of choice to support our success.