About UVIMCO
Investment Philosophy
Attractive long-term investment returns are best produced by maintaining a consistent investment philosophy, team, and process over time. Several core principles guide us as we invest the Long Term Pool at UVIMCO.
- We are long-term investors. Our relatively long time horizon allows us to capitalize on market inefficiencies and risk premia that arise from other investors’ focus on short-term news and market events.
- We seek attractive long-term returns through our external investment manager selection process, asset allocation decisions and portfolio tilts that take advantage of economic themes. The Board and staff work together to develop and maintain a consistent asset allocation framework for the Long Term Pool, adjusting actual portfolio tilts from time to time to capitalize on temporal economic conditions. We diversify across asset classes, themes, and investment managers.
- Our security selection is performed by a stable of extraordinary external managers who demonstrate an edge in both security selection and asset allocation. We value humility in our investment managers, appreciating those who are not overconfident, employ investment processes we can understand, and can see the downside risk in any investment.
- We believe in long-term reversion to fundamental values. Superior long-term returns depend on investing in securities, themes and asset classes with current prices below their fundamental values. Mis-pricings at the security level create opportunities for our external investment managers, while thematic and asset class inefficiencies may be exploited by both external managers and UVIMCO’s investment team.
- Finally, we believe our success is largely dictated by the quality of the people on the UVIMCO team and the external investment managers with whom we develop long term relationships. We ask all staff members to demonstrate intelligence, strong work ethic, passion for investing, effective teamwork skills and the desire to put our shareholders’ interests above personal interests. We seek similar qualities in our external managers.
Policy Portfolio
The Long Term Pool is allocated to three broad asset classes: equity, real assets and fixed income/absolute return investments. We seek a policy or strategic asset allocation that generates attractive long-term returns while reducing the two biggest market risks facing our portfolio: inflation and deflation risk. Our policy allocation to the three broad asset classes is 60% equity, 10% real assets and 30% fixed income and absolute return. Within each of the three broad asset classes are a number of investment strategies with varying levels of liquidity and manager/complexity risk. More information about the current and historical asset allocation of the Long Term Pool is available in UVIMCO’s annual reports.