Docusign Envelope ID: 7C07248F-983B-4F8B-904D-FCB9B680B5CE
THE UTC COMMON INVESTMENT FUND
NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023
Pooled investment vehicles analysed by type of arrangement are as follows;
2023 Value
2022 Value
Legal nature of pooled investment vehicle
UK unit-linked insurance contract
214,920
200,471
Jersey domiciled unit trust
96,632
72,671
Guernsey domiciled unit trust
7,096
36,895
UK domiciled UCITS OEIC
39,015
76,806
Irish domiciled UCITS OEIC
42,285
36,276
Luxembourg domiciled UCITS SICAV
-
29,802
Luxembourg domiciled AIFMD
64,725
29,949
464,673
482,870
In the table above the following acronyms apply;
UCITS: Undertakings for the Collective Investment in Transferable Securities OEIC: Open ended investment company
SICAV: Société d’Investissement à Capital Variable AIFMD: Alternative Investment Fund Manager Directive
Indirect credit risk arises in relation to underlying investments held in the bond and pooled investment vehicles. This risk is mitigated by only investing in pooled funds which invest predominantly in investment grade credit rated securities or using active management to mitigate default risk. The Administrator monitors the performance of e ach of the CIF’s investment managers on a regular basis in addition to having meetings with each manager from time to time as necessary. The Administrator has a written agreement with each investment manager, which contains a number of restrictions on how each investment manager may operate.
Market risk: interest rates
The CIF is subject to interest rate risk because some of the CIF’s portfolio comprises bonds, interest rate swaps and bond and interest rate futures, either as segregated investments or through pooled vehicles, and cash and repurchase agreements. Under this strategy, if interest rates fall, the value of protection assets will rise to help match the increase in actuarial liabilities arising from a fall in the discount rate. Similarly, if interest rates rise, the protection assets will fall in value, as will the actuarial liabilities because of an increase in the discount rate.
Market risk: currency
The CIF is exposed to currency risk because some of its investments are held in overseas markets, either as segregated investments or via pooled investment vehicles. The investment managers manage overseas currency exposure through a currency hedging policy.
Market risk: other price
Other price risk arises principally in relation to the CIF’s return seeking portfolio which includes equities, property, secure income assets and diversified growth funds, all held in pooled vehicles.
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