✨ Financial Statements Notes
4886
NEW ZEALAND GAZETTE, No. 172
9 NOVEMBER 2011
ASB COMMUNITY TRUST
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011
Concentrations of risk arise when a number of financial instruments or contracts are entered into with the same counterparty or where a number of counterparties are engaged in similar business activities, geographic regions, or similar economic features that would influence their ability to meet their contractual obligations by reason of changes in economic, political or other conditions.
The Group manages credit concentration risks through:
- a diversified and non-correlated basket of investments across traditional and alternative classes
- through the use of a multi-fund manager approach to investments in its portfolio
- and by ensuring compliance with the individual mandate requirements of each investment.
The Trust’s Custodian reviews the portfolio for compliance against each investment mandate on a regular basis and reports findings to the Group’s Management and Board of Trustees. Fund of Fund Managers ensure that underlying product fund managers comply with Fund mandates.
The credit quality of the Group’s Bond portfolio is managed by the Group using Standard & Poor’s rating categories.
Credit Risk Ratings of Investments
Group and Trust
This Year
| AAA to AA | A+ to A- | BBB+ to B | CCC, NR Other | 2011 $000 | |
|---|---|---|---|---|---|
| New Zealand Bonds | 87.3% | 12.7% | 0.0% | 0.0% | 96,793 |
| Global Bonds | 56.0% | 12.9% | 25.8% | 5.3% | 221,124 |
| Cash | 85.3% | 14.7% | 0.0% | 0.0% | 44,064 |
Group and Trust
Last Year
| AAA to AA | A+ to A- | BBB+ to B | CCC, NR Other | 2010 $000 | |
|---|---|---|---|---|---|
| New Zealand Bonds | 90.4% | 3.6% | 6.0% | 0.0% | 102,675 |
| Global Bonds | 61.8% | 9.5% | 21.4% | 7.3% | 313,077 |
| Cash | 85.7% | 8.3% | 6.0% | 0.0% | 45,615 |
Forward Exchange Contracts:
Hedging is undertaken by J P Morgan Chase Bank NA. At 31 March 2011 J P Morgan had an S & P credit rating of AA- (2010: AA-).
| Group and Trust Outstanding Contracts | 2011 | 2010 |
|---|---|---|
| Market value $000 | 8,054 | 5,977 |
Refer to Currency Risk note for forward exchange contract gross exposure, included in hedged currency exposure.
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NZ Gazette 2011, No 172
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