Our different investment managers are given different instructions - mandates - on how to invest their portion of the Fund.
These mandates make sure they invest in line with our overall investment strategy. Controlling how and where investments are made means there is little risk of investing too much in one single asset.
Types of mandate
Mandates can specify things like the sort of company a manager can invest in, or the amount of risk to take with investments. They also fall into broad categories:
- Multi-asset passive investors can invest in global equity markets and bonds, and need only match the returns of indices like the FTSE 100.
- Global equity investors can invest in equities from anywhere in the world. They should give better returns than standard indices like the FTSE All World Index. They may be mandated only to invest in large companies or big markets.
- Specialist mandate investors can invest only in narrow areas - for example only in emerging markets, or only in a particular sector.
- Currency investors invest in foreign currency for the fund.
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