Docusign Envelope ID: 7C07248F-983B-4F8B-904D-FCB9B680B5CE
THE UTC COMMON INVESTMENT FUND
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023
Analysis for the prior year end is as follows:
2022 Total
Level
(1)
(2)
(3)
Bonds
-
1,145,443
-
1,145,443
Pooled investment vehicles
-
366,316
116,554
482,870
Derivatives - net
2,187
9,259
(13,121)
(1,675)
2,951
730
-
3,681
Cash deposits
7,657
-
-
7,657
Other net investment balances
-
(311,399)
-
(311,399)
Repurchase agreements
Total
12,795
1,210,349
103,433
1,326,577
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Investment risks
FRS 102 requires the disclosure of information in relation to certain investment risks as follows:
Credit risk : – one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation .
Market risk : – comprises the following three types of risk:
Interest rate risk: The risk that the fair value or future cashflows of a financial asset will fluctuate because of changes in market interest rates Currency risk: The risk that the fair value or future cashflows of a financial asset will fluctuate because of changes in foreign exchange rates Other price risk: The risk that the fair value or future cashflows of a financial asset will fluctuate because of changes in market prices (other than those due to interest rates and currency). The Administrator determines which assets to hold within the CIF after taking advice from a professional investment adviser. The Participating Scheme indicates to the Administrator what the allocation of assets between the different investments should be (having taken professional advice) and the Administrator implements the selected strategy on their behalf. The CIF has exposure to the above risks because of the investments it makes in following the investment strategy set out below. The Administrator manages investment risks, including credit risk and market risk, within agreed risk limits which are set taking into account the CIF’s strategic investment objectives. These investment objectives and risk limits are implemented through the investment management agreements in place with the CIF’s investment managers and monitored by the Administrator by regular reviews of the investment portfolio.
Further information on the Administrator’s approach to risk management, credit and market risk is set out below.
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