Continuing the “Journey through uncharted waters” series, in last month’s article we elaborated on the trade-off between risk and return being a fundamental consideration when setting the Strategic Asset Allocation (SAA), and how this is embodied with the goal to “Preserve and maximise superannuation benefits for our members” to at least achieve the investment goal of CPI + 2%, over the medium term through prudent investment management.”
The next part of the process is selecting which investments to buy, sell or hold on to. This is done together with the Fund’s Licensed Investment Manager (LIM). The LIM is an external party that, by law, is required to provide advice to the Fund on investment decisions. This reflects the prudent management of the Funds investments.
Selection of investments involves conducting a joint top down and bottom up analysis. That is, analysing macro information such as global economic data, different industries, including analysis on specific investments in particular market sectors to identify attractive investments. This analysis covers assessing cash flows of each security which allows the analyst to assign value and identify the preferred investments.
When an investment becomes part of the investment portfolio, there is a need for regular monitoring of the asset. The monitoring process is essential to ensure that it complies with investment targets and regulation. It allows deviations from objectives to be detected early, so the Fund can take corrective measures.
The monitoring process also results in meaningful feedback that contributes to overall process improvements in managing investment. Monitoring results in the Investment Portfolio to be well aligned to the Fund’s Investment objectives.
Nambawan Super understands that investing is a journey and takes time, having an Investment Strategy that has certain features, covers certain assets and when allocated appropriately, allows the Fund to continue to grow member’s funds for a journey after retirement.
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