Our investment philosophy is to deliver stable returns which are in line with the product, therefore to provide long-term values and meet guaranteed benefits committed to our Policyowners, as well as the Company's business strategy and financial objectives.
Our investment policy aims to achieve long-term target investment returns while minimize the corresponding volatility in investment returns over time. It also aims to control and diversify risk exposures, maintain adequate liquidity and manage the assets with respect to the liabilities.
Our current long-term target strategy is to allocate assets attributed to the liability of our products into fixed income instruments or equity-like assets. The range of target asset mix may be different among products as stated in product brochures. The asset portfolio also targets to provide diversification across different geographic regions and industries to the extent the size of portfolio can support. In particular:
- The fixed income instruments predominantly include bonds and debts securities issued by governments, supranational, financial institutions and corporates. They are mainly invested in the geographic region of Hong Kong, China, North America, Europe and Asia-Pacific.
- Equity-like assets may include common stocks, preferred shares, exchange traded funds, and other alternative investments such as real estate investments. These equity-like assets are mainly invested in Hong Kong, China, North America, Europe and Asia Pacific.
In addition, we may complement our investment strategies with the use of derivatives and other financial agreements to achieve an efficient and effective risk management.
We mitigate currency risk by primarily matching the currency of asset investments to the underlying liabilities denomination at best effort. Derivatives such as currency swap might be used to mitigate currency risk, subject to market availability.
The asset portfolio is actively managed by investment professionals to closely monitor the investment performance. The investment strategy may be subject to change depending on the market conditions and economic outlook. Should there be any material changes in the investment strategy, we will inform Policyowners of the changes, with underlying reasons and potential impacts to the policies.