Skip to content | Change text size

Common Fund Portfolio Management (Aust.)

Parent Policy

Treasury Management

To manage part of the long term surplus funds of Monash University and such other approved funds so as to provide an ongoing income stream above that which may normally be expected, while maintaining the capital value of the portfolio through minimising the risk associated with the types of investment undertaken and the strategies adopted.

Definition of terms

Portfolio: All investments held under the title of Monash University Common Fund
Agreement: Investment Management Agreement between Monash University and the appointed Fund Manager

Duties of the Manager

  • to invest and manage the portfolio for and on behalf of Monash University in accordance with the Agreement
  • to keep the portfolio under review and to confer with Monash University
  • to keep proper books of account in relation to the portfolio and to assist Monash University or the Custodian in the preparation of reports required under the relevant Law as instructed by the Client.

Responsibility

Treasurer

Limitations of the Manager

Unless with the prior written consent of an authorised officer/officers of Monash University, the Manager shall not:

  • hold derivative contracts (including without limiting the generality of that expression, swap agreements, futures contracts, options and any form of agreement creating a contingent liability) unless there are at all times sufficient assets in the Portfolio to support the underlying liability of every contract in the form of, in the case of each contract: assets of a kind required to be delivered under the contract, or other contracts or assets which substantially offset the underlying liability under the contract, or cash or immediately realisable assets of sufficient value either to discharge the maximum contingent liability or effect on offset as described above.
  • delegate any of its discretionary powers.
  • charge or encumber in any way (other than as arises by lien in the ordinary course of business or by statutory charge) any asset in the portfolio.
  • perform any broking function, but the Manager may on behalf of Monash University, appoint any broker to act on behalf of Monash University in conjunction with the Manager.
  • Engage in securities lending in relation to the portfolio

Responsibility

Treasurer

Investment Objective

The objectives to apply to the portfolio shall be to achieve a return of CPI plus 4% over rolling 5 year periods, and to outperform a benchmark portfolio based on the strategic asset allocation and market indices for each Trust over rolling one and three year periods.

Responsibility

Treasurer

Strategic Asset Allocation and Tactical Ranges

The Manager may invest the portfolio within the benchmark asset allocations and tactical ranges approved by Monash University and stated in the Investment Management Agreement. These allocations are currently:

 

Benchmark

Range

Australian Equities

38.0%

20%-60%

Interrnational Equities (Hedged)

5.0%

0%-20%

International Equities (Unhedged)

20.0%

10%-50%

Listed Property Trusts

5.0%

0%-10%

Total Growth Assets

68.0%

60%-80%

Australian Fixed Interest

13.5%

5%-30%

Inflation Linked Bonds

0.0%

0%-10%

International Fixed Interest

13.5%

5%-30%

Liquidity

5.0%

0%-20%

Total Debt Instruments

32.0%

20%-30%

Responsibility

Treasurer

Sector Benchmarks

Unless otherwise agreed the Manager will use the benchmark indices stated in the Investment Management Agreement for measuring performance.

Responsibility

Treasurer

Unauthorised Investments

In addition to the Limitations stated above, the Manager is not permitted to:

  • Permit the acquisition of any shares of a company that would result (at such time) in the total market value of all shares in that company held in the Portfolio exceeding 15% of the total market value of the Portfolio or any other limit imposed under applicable law
  • Invest in any guaranteed securities or bank bills where more than 50% of those securities or bank bills are guaranteed by any one guarantor
  • Invest in Building Societies
  • Invest in Real Property

Responsibility

Treasurer

Content Enquiries: Finance Policy

University Policy Use Only:

Version Number: 1.0Effective Date: Contact: adm-PolicyBank@monash.edu