Investments

INVESTMENTS OF THE FUND

The primary objectives of the Fund is to earn a net investment return (after investment management fees) which exceed inflation as measured by the Consumer Price Index (CPI) by at least 4.5% per annum over any rolling 5-year period (this is equivalent to a gross investment return of some 5.0% to 5.5% per annum above inflation).

Another primary objective is to earn the return in such a way that the member’s benefits are not adversely affected by the market conditions ruling at the time of his/her exit. This implies that investment returns should not exhibit undue volatility from one year to the next.With the above objectives in mind, the Board has formulated an investment strategy whereby approximately 50% of the Fund’s assets are invested in a core portfolio with a focus on capital protection.

The balance of the Fund’s assets is invested more aggressively in a market-linked portfolio, where specialist investment managers are used for each asset class.

The investment strategy of the Fund complies with regulation 28 of the Pension Funds Act. The most important source of portfolio return is that attributable to policy asset allocation. Market timing and security selection have marginal, and generally negative, contributions to portfolio returns.

David Swensen
Chief Investment Officer of Yale Investment Office.

THE TOTAL FUND MARKET VALUE

Market Value 30 June 2015 31 March 2015
In Million R 27,076.8 27,253.1


FUND PERFORMANCE
As depicted in the graph below, the Fund continues to outperform its benchmark.


ASSET CLASS ALLOCATION
The assets in which the Fund invests have long term performance and risc chacacteristics, which enables the Fund to deliver investments returns consistent with its investments objectives.

THE TOTAL FUND MARKET VALUE

Market Value 31 December 2014 31 March 2015
In Billion R 26.8 27.2