Document ID: chunk:federal_register_of_legislation:F2023L01466:body:0:p2
Version: federal_register_of_legislation:F2023L01466
Segment Type: other
Provision Reference: 
Character Range: 2643–4516

return lower than the benchmark return.
Acceptable level of risk

       (3)    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 15 of the Act.

       (4)    The Government acknowledges:
           (a)      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; and
           (b)      the risk that the Fund's value may fall below the value (in nominal terms) of the credit(s) to the Fund under section 11 of the Act, as a consequence of investment losses or disbursements that exceed investment returns, net of costs and that the Board does not have any additional obligation to preserve the value (in nominal or real terms) of the total amounts that are credited to the Fund under section 11 of the Act.
7.  Board must consider impacts from its investment strategy
       (1)    In undertaking its investment activities, the Board must act in a way that:
 (a)  minimises the potential to effect any abnormal change in the volatility or efficient operation of Australian financial markets; and
 (b)  is unlikely to cause any diminution of the Australian Government's reputation in Australian and international financial markets.

8. Corporate governance
       (1)    The Board must have regard to international best practice for institutional investment in determining its approach to corporate governance principles, including in relation to its voting policy.

9.  Reporting
       The Board must publish quarterly portfolio updates on its website showing:
           (a)      actual returns against benchmark return; and
           (b)      asset allocations by category.