Strategic Asset Allocation / Focus Sectors.
Asset Class Allocation
|Cash & Other
With effect from 2018, the Future Generations Fund (FGF) began to receive 30% of the core capital contributions to the Authority. The Board’s decision for the restructuring was based on the need to increase infrastructure investment in the country, which would also benefit future generations. The NIF, therefore, started to receive an additional 10% of subsequent fund allocations to the Authority.
The FGF is a long-term investor and has an investment horizon of above 20 years, so it is expected to weather multiple economic and market cycles. Diversification is used as a key risk management tool in achieving the investment objectives and mitigating the effects of volatility and uncertainty on the Fund’s investment.
The Fund has a multi-asset strategy and investments range from traditional assets, such as equities, to alternative assets including hedge funds and private equity. The Board Investment Committee approved a strategy that provides guidelines for the Fund’s investments, in line with its risk and return objectives.
The asset allocation is based on long-term risk and return objectives, with due consideration to volatility, and is diversified across various asset classes. This ensures that risk is mitigated. Due to the Fund’s long-term horizon, the asset allocation is skewed to growth assets which account for 85% of the allocation. The rest is apportioned to inflation hedges (10%) and deflation hedges (5%). External managers are used to gain exposure to these asset classes at this point in the Authority’s life cycle.