General Investment Principles

University of Waterloo, Finance & Investment Committee General Investment Principles
November 2009
Revised 4 April 2022

Investment Principles

Invest for the long-term (20-25 years)
Asset mix decisions will be made within ranges established in the approved investment policy statements for each fund (i.e., pension, endowment, etc.), and ranges will be reviewed annually or biennially
Risk management considerations will be factored into all investment decisions. Risk will be measured and monitored for each fund; investment return assumptions should be conservative and achievable; leverage will not be permitted
Reputational impact of investment decisions needs to be considered
Capital preservation is critical to achieving the long-term goals of the investments
Investment strategies are based on a thorough understanding of each fund’s specific liabilities (i.e., pension, endowment, trust, treasury/operating funds)
Selection/termination of the investment managers is an important element in achieving overall returns; monitoring of the investment managers needs to be rigorous
The adoption of a sound responsible investment policy / ESG practices is intended to reduce financial risk over all time periods and offer enhanced long-term value to the Fund

Global economic growth is gaining traction and supporting higher corporate revenues
Relative equity valuations vary significantly by country with some markets experiencing high relative valuations to historic norms
Elevated government debt levels will continue
Corporate balance sheets are relatively strong; future equity valuations will be driven by earnings growth
Long-term interest rates are likely to rise gradually in the developed markets although on-going accommodation is continuing in some major markets
Fiscal policy initiatives will begin to replace monetary policy levers resulting in tighter labour markets (lower unemployment)
Inflation is expected to remain modest (~2.0%)