The Cash Portfolio plays a very important role within the Fund. It provides not only stability for the portfolio but also liquidity and risk balance through diversification benefits relative to other riskier asset classes. The Cash Portfolio is primarily managed internally and the Fund’s exposure to cash is determined by APFC’s liquidity needs, time horizon, and risk tolerance given the market environment.

The Risk Parity portfolio is managed externally by three managers and is intended to deliver long term returns of CPI+5% or better while investing in various liquid asset classes that contribute equal amounts of risk.  


$3.2 B Cash

as of June 30, 2020

2% Cash/ 1% RP

FY22 Target Asset Allocation

$625 M Risk Parity

AS OF JUNE 30, 2020



Cash investments play an important role within a well-diversified investment portfolio and serve several purposes including protection against potential future increases in inflation, stability for the portfolio, liquidity, and diversification benefits relative to other assets.

Cash, the most liquid security, generally represents money market investments or fixed income securities with weighed average maturities of no greater than 24 months adding stability and diversification relative to other asset classes.

The amount of cash held is determined by APFC’s investment goal, time horizon, risk tolerance, and liquidity needs. Cash is benchmarked to the 3-Month T-Bills.

Risk Parity

The Risk Parity program is intended to deliver long-term returns of CPI+5% or better by generating returns that are less correlated to global public markets through balanced allocation of risk rather than allocation of capital. These strategies are designed to control and balance risk. The goal of risk parity is to build diversified portfolios in which various asset classes contribute equal amounts of risk.  By doing so, Risk Parity portfolios are not as dominated by stock market volatility as traditional portfolios are. 

The Risk Parity portfolio is a multi-manager portfolio utilizing investment managers that provide risk-balanced exposure to multiple sources of excess expected return. 


Cash is benchmarked to the 3-Month T-Bills. Operating cash which serves as the account for daily transactions returned 0.61% for the calendar year 2020. The internally managed cash account which holds the bulk of APFC's excess cash, returned to 0.78% for the calendar year ending December 31, 2020 outperforming its benchmark by 13bps.

The Multi-Asset Class manager’s objective is to outperform CPI+5% overtime and to target a 0.5 sharpe. Short-term benchmark for this strategy is the HFR Risk Parity 12% Vol Index.

For the calendar year ending December 31, 2020, the HFR Risk Parity Index returned 10.1%. Both managers in this industry, PanAgora and Bridgwater, outperformed this benchmark returning 14.3% and 11.2% respectively for the calendar.

Performance reports for the portfolio can be found in the monthly performance reports and in the board meeting packets.