Getting It Right – Ontario Teachers' Asset Mix
The kind of assets we own and the emphasis we place on each asset group are the biggest drivers of Ontario Teachers' long-term investment performance. Ensuring diversity among our investments is an essential part of risk management and underlines the importance of our asset-mix policy.
With board oversight, the plan's management manages both the policy and asset mix together under our expanded OneTeachers' total-fund strategy. Management determines exposure to each asset class within ranges approved by the board.
Our Asset-Mix Strategy
Our asset mix includes equities, fixed income, inflation sensitive assets and real assets (real estate and infrastructure), and we make sure that we maintain broad diversification among our assets. Bond repurchase agreements and derivatives have played a large part in our investment program since the early 1990s.
We also use absolute return strategies, which enable us to earn positive returns that are uncorrelated to other asset groups. We employ these strategies internally to capitalize on market inefficiencies. Additionally, we complement our efforts by using external hedge fund managers, which gives us access to unique approaches that both add performance and diversify risk.
Our exposure to the economies of different countries around the world, like our investments in a diversified range of asset groups, reduces overall volatility and offers the potential for better returns. Because we invest globally and report in Canadian dollars, we actively manage our currency exposures.
Geographic Exposure 1
As at December 31, 2017
As at December 31, 2017 (Canadian $ billions)
Click image to enlarge
6Includes foreign currency exposure from investments, net receivable from brokers, and investment-related cash.