The Plan’s investment policy outlines the Plan’s investment objectives and the framework used in defining the Plan’s strategic asset allocation (SAA). Asset volatility risk together with downside risk measures are considered the key indicators of the Plan’s overall investment risk and define the Plan’s overall risk appetite to pursue investment returns.
The Plan’s assets are diversified across a variety of asset classes. Investments within each asset class are further diversified across funds, managers, strategies, geographies, and sectors to limit adverse impact from individual investments.
The Plan’s ESG policy aims to meaningfully integrate ESG factors into the investment decision-making process, to the extent these can materially affect the risk-return profile of the Plan’s investments. The Plan's oversight committee reviews periodically the Plan's approach to ESG.
The following set of investment beliefs underpin the Plan’s investment policy:
- Plan liabilities should be explicitly considered.
- Investment strategies should be developed based on forward-looking insights.
- Diversification across less correlated risk factors improves portfolio risk-return profile.
- Illiquidity risk is rewarded over the long term.
- The SAA drives investment performance over the long run.
- Consideration of ESG factors can enhance the investment process through a better understanding of risks and opportunities.