COAERS' investment beliefs are foundational to its long-term management of the Fund. They are the guiding principles by which the COAERS Board, the Staff and the investment consultant serve the long-term interests of the members, and consistently and sustainably achieve best-in-class results.
- The Fund is a permanent entity with long-lived liabilities and, as such, it should strive to be a thoughtful, analytical, and patient investor that is focused on achieving successful outcomes.
- Clear governance and decision-making structures that promote decisiveness, simplicity, efficiency, and accountability are effective and add value to the Fund.
- To the extent possible, investment decision-making should be driven by data and analysis, including the findings of relevant research on financial markets and investment management.
- Strategic asset allocation is the most critical aspect of the investment process, with the level of risk assumed by the Fund driven primarily by its allocation to equity investments.
- The Fund should seek to be well compensated for the investment risks it chooses to bear, risks that should be articulated at the time of investment and revisited regularly.
- Diversification across asset classes and risk factors is central to the System’s investment strategy, and investments that may improve the Fund’s risk/return profile will be considered.
- Equities are the most prudent investment vehicle for long-term growth of real values, and the associated draw-down risk should be carefully managed in light of the Fund’s liabilities.
- Costs can significantly reduce net returns and therefore must be carefully measured and managed when making decisions regarding investment strategy and implementation.
- Implementation should occur passively and in public markets unless a high likelihood of success on a risk-adjusted, net-of-fees basis can be expected from other approaches.