Investment Strategy

The Board of Directors of the Governmental Bank stipulates the parameters of the investment strategy applied by the Governmental Bank.

The investment strategy and the investment authority are developed consistent with the goal of generating as good a return on investment (ROI) as possible with a risk that is reasonable and governed by negotiated agreement.

In order to devise a strategy with the prerequisites that the Governmental Bank achieve a good return under acceptable risk, the Governmental Bank studies the investment sector and its various asset classes, such as corporate shares, government bonds, mortgage-backed bonds, corporate bonds, high-yield bonds, emerging-market bonds, and alternative investments.

Initially, the Governmental Bank investigates anticipated ROI and related risks for each individual asset class.

At the same time, the Governmental Bank reviews and studies the correlation among these various asset classes. This is done in order to establish a comparison among the investments such that all the assets do not gain or lose value at the same time. Efforts are undertaken to select assets wherein some will grow in value while others might decline in value, thereby reducing the overall risk to the maximum extent possible.

At the same time, the National Treasury remains focused on the actual debt held by the Treasury such that the actual liquidity of the Treasury placed in government and mortgage-backed bonds does not deviate too greatly from the actual debt of the Treasury. In this way, the total risks inherent in the liquidity and debt managed by the National Treasury are minimized. 

The investment authority is found here.