Our investment beliefs, which complement and underpin our endowments, are set out below. Our beliefs are a key driver of our investment decisions.

Investment Decisions

Investment Beliefs

Investment Facts

Governance and investment objectivesClear governance and decision-making structures that promote decisiveness, efficiency and accountability are effective and add value to the Fund.It is important to be clear about investment objectives for the Fund, risk tolerance, and the timeframe over which results are measured.
Asset allocation

Asset allocation is the key investment decision.

Investors with a long-term horizon can outperform more short-term focused investors over the long-run.

Risk and return are strongly related.

There are varied investment risks that carry premiums / compensations. Illiquidity risk is one such premium.

Investment diversification improves the risk to return (Sharpe) ratio of the Fund.

Asset class strategy and portfolio structureAsset class expected returns are partly predictable and returns can revert toward a mean over time.

Investment markets are competitive and dynamic, with active returns very difficult to find and constantly changing source.

Market volatility tends to cluster over short horizons but mean-reverts over longer horizons.

Investment risks can be unbundled to make the Fund more efficient. This includes the separation of market (beta) and investment-specific investment manager skills (alpha).

Manager and investment selection

True skill in generating active returns versus a manager's benchmark (i.e. pure alpha) is very rare. This makes it hard to identify and capture consistently.

Some markets or strategies have characteristics that are conducive to a manager's ability to generate active return.

These characteristics tend to evolve slowly over time, although the shorter-term opportunity set that may be available in any market/strategy can vary through the cycle.

We believe most active return is driven by a combination of the research signals the manager is using, the conduciveness of their market to generating active returns, beta factors and luck.

Responsible investors must have concern for environmental, social and governance factors because they are material to long-term returns.

The more efficient a market is, the more difficult it is for a manager to generate active return.

Research signals and methods used by managers tend to commoditise over time through market forces.

In some cases synthetic exposure to a market or factor can provide a guaranteed active return to the Fund, and this represents an additional hurdle that an active manager must surpass.


Managing fees and costs and ensuring efficient implementation can prevent unnecessary cost.