Statement of Investment Policy & Objectives
The broad investment objectives for DWC’s Investment Fund are to achieve a level of Income which is needed to meet the distribution requirements of DWC in any one-year and to provide for a reasonable element of capital growth. This is required to preserve the real value of the Trust Fund thereby enabling increased distribution levels over time.
More specifically, the Fund’s investment policy aims to earn a rate of return, after investment-related expenses and any taxes, that exceeds CPI increases by at least 3% pa over rolling 3 year periods. The Investment Fund’s maximum asset allocation for the reported and ensuing financial year is as follows:
|NZ Fixed Interest||90%|
|Total Cash & Fixed Interest||100%|
DWC is pleased with its rate of return from its investments for the year ended 31 March 2019. While the financial markets have been volatile, they have produced strong results for DWC’s investment portfolio.
DWC’s growth (or equity) investments returned 10.5% for the year with the Australasian equities providing the bulk of the gains.
As long-held bonds have matured, the average yield on DWC’s bond portfolio has fallen slightly to 5.9%, with the overall cash and bond return at 4.6%. This still compares favourably with the current OCR, which has remained at or below 1.75% since November 2016.
Overall, DWC earned returns of 7.0% on its Investment Fund. At the start of the financial year DWC had 50.7% of its investment funds in equity (growth) assets. At 31 March 2019, the percentage of the Investment Fund exposed to growth assets remained at 50.7%, although the value of equities held increased when compared to last year due to the overall growth of the fund.
Available for Sale investments (consisting of Fixed Interest and Alternative Assets) increased in value during the year. These movements in value are reported in “Other Comprehensive Revenue and Expense”.
DWC continues to liaise with its Investment Advisors, JBWere (NZ) Ltd and Bancorp Treasury Services Limited, and closely monitor its funds.