Policy Benchmark

The Fund’s nominal performance is compared to the Fund’s policy benchmark. The policy benchmark is a weighted average of the target weighting and benchmark for each asset class. The policy benchmark represents the return that the Fund would achieve if it were fully indexed and rebalanced daily. In periods when the Fund’s nominal performance exceeds the policy benchmark, active management is contributing favourably to the performance of the Fund and vice versa.

For the one-year period ended 31 December 2016, the Fund underperformed its policy benchmark. The Fund had a nominal return of 5.2 per cent, and the policy benchmark had a return of 6.9 per cent return. This is due to the fact that 2016 was a year which favoured indexation over active management. The Fund is actively managed, and most of the Fund’s portfolios performed in line with similar funds in the eVestment universe during 2016.

The Fund outperformed its policy benchmark in 12 of the past 22 calendar year; and on average, the Fund generated performance which exceeded the policy benchmark over the past 22 calendar years.