Risk management

The Trust is very focused on both the qualitative and quantitative risks it takes in its investments.

The Investments team focuses on qualitative risk by continually meeting managers and undertaking ongoing due diligence on them.

Additionally, the internal Risk and Performance team analyses the overall portfolio risk as well as the quantitative risk attributable to each asset class and underlying investment.

Investment risk is monitored and managed through a policy of holistic measurement using the following parameters:

• value-at-risk (one-year horizon)
• currency risk (both £ and US$ exposure)
• equity market beta (expectation of movement in the portfolio given a certain percentage change in global equity markets)
• liquidity and forecast cash holdings.

Volatility (standard deviation) of returns (%)