✨ Financial Statements Notes
ASB COMMUNITY TRUST
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
Diversified:
The Diversified bucket provides growth and volatility reduction and consists of long/short hedge funds and absolute return funds.
Inflation Proofing:
The Inflation Proofing bucket provides an inflation hedge, diversification and growth through a combination of real assets, both listed and unlisted such as commodities, property, natural resources and inflation-linked bonds.
Deflation Proofing:
The Deflation Proofing bucket provides a reduction in volatility and protection against any prolonged contraction. The bucket consists of fixed income and cash investments.
Credit Risk
Credit Risk represents the risk that a counterparty to a financial asset fails to discharge an obligation which will cause the Group to incur a financial loss.
The Group’s credit risk arises from any default by a counterparty. The current exposure at balance date is the fair value of these assets as disclosed in the Statements of Financial Position.
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.
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NZ Gazette 2012, No 114
✨ LLM interpretation of page content
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Notes to the Financial Statements of ASB Community Trust
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💰 Finance & RevenueFinancial Statements, Investments, Fund Managers, Risk Management, Credit Risk, Diversification, Inflation Proofing, Deflation Proofing