Investment objective & Investment Policy Statement

Since one of the main objectives of the GPF is to provide security for members’ retirement, the investment shall focus on the long-term returns with appropriate risk framework. It is our belief that the return should be higher than inflation rate to enhance the quality of life after retirement. Therefore, the ultimate long-term target return is set to be higher than long-term inflation. Our investment philosophy is to obtain a good balance between Preservation of Capital and Growth of Return under the pre-determined risk level. Our investment principles are clearly stated in the Investment Policy Statement.

The investment Policy Statement provides details of GPF's Strategic Asset Allocation (SAA), principle of risk diversification, benchmark and valuation, outsourcing policy and member investment choice.

GPF's SAA delineates investment allocations of asset classes, managed by the GPF fund in accordance with the classified framework of its objectives. The allocation is based on rational investment proportions which take into account all relevant factors such as risk, returns, instrument nature, investment objectives as well as the relevant rules & regulations. For example, the Ministerial Regulation stipulated that GPF shall invest its asset of not less than 60 percent in high secure asset and the SAA is designed accordingly. Asset allocation is an essential part in fund management, particularly the sizeable fund like the GPF. Good assets allocation requires not only a good balance of targeted yields and acceptable levels of risk, but also the fund objectives, members' overall profile as well as the economic environment. GPF reviews its strategic asset allocation once every two years so as to respond to changing investment atmosphere.

GPF strongly believes in the benefits of risk diversification and adopts this principle in its investment process. The SAA comprises of various types of securities to diversify away the risk of massive losses. The fund always looks for investment opportunities in new securities or new markets to enhance overall return as well as to diversify away overall risk. In addition, the fund has a policy to outsource 20-30 % of investment money to external managers in order to diversify risk incurred from missed investment views as well as to gain technology & expertise transfer from the outsiders.

GPF believes in transparency and efficiency. The fund has created transparent guidelines for pricing of listed investments and the valuation of unlisted investments. GPF also has clear benchmarks for all securities which reflect their relevant characteristic of risk & return profile and support the philosophy of active portfolio management & performance evaluation. GPF believes that fund managers have major roles in attaining a good, long-term and sustainable alpha for the beneficiaries.

The investment policy statement also provides information of member investment choices (MIC) and member additional contribution plan. The MIC offers four additional investment plans which members may choose to suit their investment lifestyle. The additional contribution plan provides a choice of 1-12% salary-based additional contribution from members in order to enhance their saving for retirement and improve quality of life in long term.