Reference Portfolio

The University’s long-term target rate of return for the Endowment portfolio is 4% real (i.e., 4% after inflation). The Reference Portfolio is intended to meet this target return over the long term with an acceptable level of risk.

The Reference Portfolio is developed jointly by UTAM management and the University’s Investment Committee. It is then recommended to the University administration, which must approve it for the Endowment portfolio. The Reference Portfolio is reviewed every one to two years, but significant changes are expected to be less frequent.

The Reference Portfolio must have the following characteristics:

  1. Risk and return attributes consistent with the long-term objectives of the Endowment portfolio
  2. Simple asset mix – public market asset classes only
  3. Passive investing approach – no active strategies
  4. Easy to implement – no need for a large investment team
  5. Low cost – can be deployed without significant expense

The current Reference Portfolio consists of 60% equity exposure and 40% fixed income exposure. The Reference Portfolio weights to each category along with benchmarks are shown below.

Reference Portfolio Asset ClassBenchmarkReference Portfolio Weight
Global EquityMSCI ACWI Net Total Return Index*60%
Fixed Income40%
Canadian Corporate BondsFTSE Canada All Corporate Bond Total Return Index20%
Canadian Government BondsFTSE Canada All Government Bond Total Return Index20%
* The currency exposure in the Global Equity benchmark is 50% hedged for the developed markets component and unhedged for the emerging markets component.