✨ Financial Statements
Otago Community Trust
Notes to the financial statements
For the year ended 31 March 2014
in New Zealand Dollars ($000's)
17 Financial Instruments (continued)
Sensitivity Analysis for the Trust’s Portfolio 31 March 2014
Based on the actual asset allocation and the output of portfolio simulation modelling of the Trust’s Portfolio as at 31 March 2014, the long term expected return for the portfolio (ignoring fees and value add from active management) is currently 6.2% per annum and that two thirds of annual returns will lie in the range of -0.4% to 12.9%.
As at 31 March 2014 the Trust’s portfolio was valued at NZ$237.6m. Assuming the short-term return distribution approximates the long-term return distribution, then for the year 1 April 2014 to 31 March 2015 there is a two-thirds probability that the Trust’s revenue from investment activities will lie in the range of -$1.0m to $30.7m, with an expected value of $14.7m.
Sensitivity Analysis for the Trust’s Portfolio 31 March 2013
Based on the actual asset allocation of the Trust’s Portfolio as at 31 March 2013, the long term expected return for the portfolio (ignoring fees and value add from active management) is currently 5.7% per annum. There is approximately a 68% probability that the return in any one year will be within the range of -0.8% to 12.2%.
As at 31 March 2013 the Trust’s portfolio was valued at NZ$225.3m. Assuming the short-term return distribution approximates the long-term return distribution, then for the year 1 April 2013 to 31 March 2014 there is approximately a 68% probability that the Trust’s revenue from investment activities will lie in the range of -$1.8m to $27.5m, with an expected value of $12.8m.
These sensitivity analyses are based on the volatility of each asset class and the Fund as a whole, as measured by plus or minus one standard deviation. The overall affect of the Trust’s diversified portfolio is to reduce volatility and stabilise investment returns over time.
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NZ Gazette 2014, No 85
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Otago Community Trust Financial Statements
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💰 Finance & RevenueFinancial Statements, Community Trusts, Financial Instruments, Sensitivity Analysis, Investment Returns, Portfolio Valuation