✨ Financial Statements Continuation
19 AUGUST 2009 NEW ZEALAND GAZETTE, No. 122 2827
Notes to the financial statements (continued)
in New Zealand Dollars ($000’s)
13 Financial instruments (continued)
Capital management
The Trust’s capital includes Trust Capital, Income Fluctuation Reserve and Inflation & Population Growth Reserve.
The Trust’s policy is to maintain a strong capital base so as to maintain investor confidence and to sustain future development of the Trust.
The Trust is not subject to any externally imposed capital requirements.
The Trust’s policies in respect of capital management and allocation are reviewed regularly by the Board of Trustees, and during the year a decision was taken not to rebalance the investment portfolio while its value is below "Real Capital".
Sensitivity analysis
Table 1 shows the asset allocation for the Trust’s portfolio as at 31 March 2009 as well as the long term expected return for each asset class. The return one standard deviation above and below the expected return is also shown.
Table 1: Sensitivity Analysis for the Trusts Portfolio 31 March 2009
| Asset Class | Asset Allocation (31 March 2009) | Long Term Expected Return p.a. | -1 Std Deviation Return p.a. | +1 Std Deviation Return p.a. |
|---|---|---|---|---|
| NZ Equities | 5.0% | 9.2% | -7.8% | 26.2% |
| Global Equities | 24.6% | 8.6% | -6.6% | 23.8% |
| Global Bonds | 53.5% | 6.3% | 3.0% | 9.6% |
| NZ Cash | 12.0% | 5.7% | 4.2% | 7.2% |
| Global Property | 2.5% | 8.1% | -3.9% | 20.1% |
| Hedge Funds | 2.4% | 8.3% | 0.3% | 16.3% |
| Total | 100.00% | 7.0% | 2.0% | 12.1% |
From table 1 the long term expected return for the Trust’s portfolio is 7.0% per annum and there is approximately a 68% probability that the return in any one year will be within the range of 2% and 12.1%.
As at 31 March 2009 the Trust’s Portfolio had NZ$109.3m under management. Assuming the short term return distribution approximates the long term return distribution there is approximately a 68% probability that the Trust’s revenue profit from investment activities will lie in the range of $2.2m to $13.2m, with an expected revenue of $7.7m for the year ended 31 March 2009 to 31 March 2010.
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NZ Gazette 2009, No 122
✨ LLM interpretation of page content
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BayTrust Annual Report for 2008-2009 (continued)
(continued from previous page)
💰 Finance & RevenueFinancial Instruments, Capital Management, Sensitivity Analysis, Asset Allocation, Investment Returns