Document ID: chunk:federal_register_of_legislation:F2023C00248:reg:6
Version: federal_register_of_legislation:F2023C00248
Segment Type: reg
Provision Reference: reg 6
Character Range: 3745–4658

6  Benchmark return and acceptable level of risk
       (1)    The Board is to adopt an average return over the long term of at least the Consumer Price Index + 2.0 per cent to + 3.0 per cent per annum, net of costs, as the benchmark return on the Fund.
       (2)    During the initial transition period, as the Board develops a long-term strategic asset allocation, the Government anticipates a return lower than the benchmark return.
  Acceptable level of risk

       (1)    In constructing a portfolio, the Board:
 (a)  must determine an acceptable but not excessive level of risk for the Fund; and
 (b)  must have regard to its obligations under section 17 of the Act.

       (2)    The Government acknowledges that targeting the long-term benchmark return implies accepting the risk of capital losses, in adverse markets, that may be 15 per cent to 20 per cent of the portfolio over a three-year period.