Balancing Risk And Return
Absolute Return
The Absolute Return portfolio is designed to deliver consistent, uncorrelated returns that contribute to the Fund’s overall target performance. By investing across a diversified mix of strategies, securities, and geographies, the portfolio provides broad exposure while maintaining greater liquidity than many alternative investments. This approach helps balance risk and return within the Fund, supporting long-term performance and enhancing the resilience of the overall investment portfolio.
At a Glance
Key Portfolio Figures
$6.2B
As of June 30, 2025
18
Managers
7%
FY26 Target Allocation
Absolute Return's
Performance
The performance of the Absolute Return portfolio is measured against the following objectives:
- Achieve a minimum of 5.0% annualized excess return over CPI over a market cycle, net of all fees;
- Achieve this return with a long-term correlation of monthly returns compared to the Fund’s overall returns of less than 50.0%;
- Achieve this return with an ex-ante standard deviation of monthly returns of less than 12.0% per annum.
Strategy & Focus Area
Absolute Return Mandate
The Absolute Return strategy invests in hedge fund managers uncorrelated to overall markets. APFC targets an absolute return of CPI + 5%, regardless of the broader market environment, and invests with downside protection in mind. The portfolio’s strategy of minimal correlation results in willingly forgoing upside potential during periods of market exuberance to insulate from downside potential in the event of market corrections.
APFC is strategy-agnostic regarding hedge fund managers as long as they demonstrate minimal correlation to overall markets and a track record of returns in excess of CPI + 5%. Strategies we have recently added to the portfolio include global macro, CTA, fundamental equity market-neutral, fixed income relative value, and event-driven.