Actual Portfolio

The real-life composition of the Fund at any one time is called the Actual Portfolio. It is the sum of all the investments we have made which reflect the Reference Portfolio, plus any value-adding investments. Investment opportunities come and go. So the Actual Portfolio can – and usually does – deviate from the Reference Portfolio, based on what additional activities are both possible and, in our view, will add value.

The composition of the Actual Portfolio is disclosed in our Annual Reports.

Adding value to the Reference Portfolio

Around two-thirds of the Fund is invested passively, in line with global market indices. We only undertake active investment when we have a high level of confidence that it will, over the long term, be better than investing passively – by either improving the Fund’s returns, reducing risk (e.g. through diversification) or both.

For each investment, we ask the basic questions:

  1. what’s the opportunity?
  2. what’s driving it?
  3. what risks are we taking on?
  4. are we properly compensated for these risks?
  5. how different is it to the Reference Portfolio?
  6. what’s the best, most cost effective way to access it?
  7. is there a liquid, public market alternative?
  8. how hard will it be to manage on an on-going basis?; and
  9. how confident are we in our answers to all these questions?


For any new investment, we must be confident that it is better than the simple, low-cost, passive alternative – that it will ‘add value’.