Striking the right balance between risk and return is challenging. SHEPP maintains a diversified asset mix to help decrease the likelihood of unfavourable investment performance in the future. With that in mind, SHEPP’s Board may choose to reallocate investments to ensure appropriate diversification based on the investment climate.

Fixed Income

The fixed income portfolio provides stable investment income, supplies liquidity and is designed to hedge against equity risk. There is also a return-seeking element with the portfolio, through mandates that provide exposure to global fixed income and a range of both public and private credit markets.

Equities

Equities anchor the growth-oriented portion of the portfolio and are expected to deliver dividend income and long-term growth in excess of inflation. The SHEPP publicly listed equity portfolio is diversified globally and across style factors (growth, value, and size). A private equity allocation is also progressing through the funding phase.

Liquid Alternatives

Liquid alternatives employ strategies that seek to provide attractive risk-adjusted returns across various market environments by being less reliant on positive market direction to generate returns. Designed to have relatively low correlation with traditional equity and fixed income markets, and a risk profile lower than equities, these absolute return strategies are intended to provide diversification at the total Fund level.

Real Assets

Real assets include real estate, infrastructure, and commodity investments. Their role in the portfolio is to provide additional diversification and potential for inflation-sensitive income and longer -term growth opportunities.