Are Equities Overvalued?

(a) Equities small capitalization.

Bonds Others Equities 301 231a

As to the allocation of assets, it was noted that equities outperformed bonds over the long term and that, since the Fund was an indexed defined benefit plan, it was important to focus on long term growth needs, for which equities were the best source.

The primary objective of an asset and liability study is to identify the optimal mix of strategic assets (i.e., equities vs. fixed income) for a pension fund.

Economic fundamentals favoured equities for the long term.

Equities Statement XXVII Add. Net investment income (schedule 19)

Strategically placed private institutions have done their part to shore up confidence. Goldman Sachs, for example, has made a point of publicly buying endangered assets in its Global Equities Opportunity Fund.

Since the Fund invests in small capitalization equities in the United States, Europe and Japan, in house management would require a significant number of portfolio managers and analysts dedicated to research.

(d) Retain the in house management of emerging market equities and create a team specialized in emerging markets and alternative investments to seek improvement in the risk return profile of the Fund

List of known Equities, and the date they were last updated on.

The Fund apos s exposure to United States equities contributed more to the total return than did any other asset class held by the Fund, having provided total returns of 18.9 per cent and 45.5 per cent, respectively, for the years ending 31 March 1997 and 31 March 1998.

4. Notes that the Board endorsed the intention of the representative of the Secretary General for the investments of the fund to manage the North American equities portfolio in the passive mode using the current benchmark indices

(2) expenses on purchasing commercial insurances, securities, stock equities or collections and so on

As a result of these factors, eurozone growth has resumed, and eurozone equities have recently outperformed US equities. The weakening of the euro and the ECB s aggressive measures may even stop the deflationary pressure later this year.

Whereas equities have dividends, bonds have coupons, and homes provide rents, gold is solely a play on capital appreciation. Now that the global economy is recovering, other assets equities or even revived real estate thus provide higher returns.

Summary of the equities contained in this account, showing your holdings and their most recent price.

The higher allocation to equities has been beneficial to the Fund as the equity portfolio had total returns of 11.6 per cent and 27.3 per cent, respectively, for the years ending 31 March 1997 and 31 March 1998 and contributed the most to the Fund apos s positive return during the two year period under review.

Equities had outperformed bonds during the past 38 years and the pace has accelerated from 1982 to the present.

The proceeds from those sales were invested in equities and bonds in various developing countries as opportunities became available.

So investors are wondering will future decades be like the past decade? If so, shouldn't investments in equities be shunned?

(b) Retain the in house management of emerging market equities and create a team specialized in emerging markets and alternative investments.

It was also mentioned that on a 25 year basis the rate of return on bonds and equities had been almost equal.

The long term strategy to increase the Fund apos s equity exposure has reflected the changed global investment environment, in which more pension assets are being invested in equities, owing to less government debt being issued as fiscal deficits are shrinking and the increasing use of equity financing by corporations.

What is most important is we do it either in form of loans, equities, lease whatever is appropriate for, you know, supporting anybody.

Suppose you had placed a long term bet on financial equities in 1900, along with a short bet on general equities in effect a gamble on whether the UK financial sector would outperform the market. For the first 85 years, this would have been a very uninteresting gamble, generating an average return of only around 2 a year.

Supplementary Fund and Special Fund

14. On the issue of insurance coverage for the Fund s investments in equities,8 the Pension Board noted that the Board of Auditors had considered that the assets of the Fund had not been adequately protected and had recommended that the contracts with the Fund s custodians should be reviewed, with a view to providing adequate insurance coverage.

General Fund and Supplementary Fund activities

DRI Fund Rural Investment Cofinancing Fund

Considering the relatively small portion of the Fund's assets invested in such equities, one can easily understand that outsourcing this type of investment is a reasonable option

Considering the relatively small portion of the Fund's asset invested in such equities, one can easily understand that outsourcing this type of investment is a reasonable option.

Over the past 20 years, the first component of the benchmark, the Morgan Stanley Capital International World Index, had achieved a total annualized return of 14.6 per cent compared to 14.1 per cent achieved by the Fund apos s total equities. The second component, the Salomon Brothers World Government Bond Index, had achieved a total annualized return of 9.9 per cent compared to a total annualized return of 10.9 per cent achieved by the Fund apos s bond portfolio.

On the issue of insurance coverage for the Fund apos s investments in equities (annex III, paras. 23 26), the Board noted that the Board of Auditors had found that the level of coverage was inadequate because its scope ranged only from 0.2 to 8.2 per cent of the market value of the assets held by the Fund apos s custodians and therefore recommended that the matter be reviewed, with a view to providing adequate insurance coverage.

The answer seemed a no brainer. So central banks are transferring their excess reserves to existing or newly created SWF s, which in turn invest in high return equities.

Within Europe and elsewhere, greater emphasis was being placed on increasing investments in equities in respect of pension funds, by removing or reducing current restrictions on such investments.

Supplementary Fund and Special Fund 10 13 4

Note 2. General Fund and Working Capital Fund

Sub trust fund activities (f) Special Voluntary Fund

Article 58The equity instruments refers to the contracts which can prove that a certain enterprise holds the surplus equities of the assets after the deduction of all the debts.

Normal transactions directly between funds other than the General Fund are reported as indebtedness from the General Fund to the fund owed and indebtedness to the General Fund from the fund owing.

FUND

General Fund and Supplementary Fund activities 5 53 4

(General Fund, Supplementary Fund, associate experts and programme support)

The Fund Secretariat monitors Fund activities at different levels.