Investment Objectives and Policies
DCRB seeks long-term investment returns in excess of the actuarial investment assumption, which is currently set at 6.5%, net of investment management fees and administrative expenses. In addition to exceeding the 6.5% nominal return over the long term, a secondary return objective is to exceed the annualized total return of DCRB's strategic asset allocation benchmark (the “Total Fund Benchmark”). Furthermore, DCRB’s investment policy includes the following risk management objectives:
- To maintain a level of risk commensurate with the expected levels of return and consistent with prudent investment practices.
- Liquidity Risk: to maintain an appropriate level of liquidity to ensure payments of benefits, other Fund obligations and expenses.
- Diversification Risk: to utilize diversification to manage exposure to asset class, manager, industry, geographic and company-specific risks (i.e., diversifiable risks) in the aggregate investment portfolio, while acknowledging the risks associated with investing in the capital markets (i.e., market risks).
The following table represents the Funds' current asset allocation approved by the Board of Trustees as of July 18, 2013. The labels denote the asset classes and the current targets, as percentages: