Policy Asset Mix
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ATRF strategically builds its portfolio to manage risk while also striving to ensure the returns are able to properly fund our plans.
The ATRF Board sets the strategic asset mix (or policy asset mix), investment policies, and goals for ATRF’s portfolio, which are the most important drivers of pension plan funding and investment success. ATRF’s governing legislation requires AIMCo to function as the investment manager, so AIMCo performs day-to-day management of investments, while ATRF monitors their performance and ensures adherence to the investment strategy.
The ATRF Board adopted the current long-term policy asset mix in 2014, following an asset-liability modelling study, which the board revisited but did not change in 2018. ATRF typically conducts this study every four to five years with the goal of determining the most appropriate asset mix for the plan. A study did occur throughout the 2023 calendar year, and the ATRF Board approved a new mix that ATRF staff began implementing in 2025. The policy asset mix includes traditional public market assets, such as equities and bonds, as well as private market assets, such as real estate and infrastructure.
| Policy Asset | At Aug. 31/2024 |
|---|---|
| Growth (Gr) | 45% |
| Gr - Developed Market Global Public Equity | 15% |
| Gr - Private Credit | 10% |
| Gr - Private Equity | 10% |
| Gr - Canadian Public Equity | 5% |
| Gr - Emerging Market Public Equity | 5% |
| Inflation Sensitive (IS) | 30% |
| IS - Infrastructure | 15% |
| IS - Real Estate | 10% |
| IS - Timberland / Farmland | 5% |
| Interest Rate Sensitive (IRS) | 15% |
| IRS - Long-Term Government Bonds | 15% |
| Market Neutral (MN) | 10% |
| MR - Absolute Return | 10% |
Growth Assets
Growth assets are generally expected to provide the highest return over the long term but reflect a higher risk profile than other assets in the plan. Growth assets are the largest investment category in the fund and include our public and private equity portfolios as well as our investments in private credit.
We diversify our public market equity portfolios by investment style, company size, and geography in order to mitigate risk. Our private equity assets consist of a diversified combination of limited partnerships and direct investments. Our private credit investments are diversified by strategy or type of credit as well as by geographies and sectors.
Interest Rate Sensitive Assets
Interest rate sensitive assets are typically among the lowest risk assets in the fund and are expected to provide lower but more stable returns than other asset categories over the long term. These are fixed income assets that are also a powerful diversifier that tend to perform well when growth assets falter. ATRF’s fixed income assets are primarily long-term government bonds that attempt to match the long-term nature of the liabilities of the fund.
Inflation Sensitive Assets
Inflation sensitive assets are included in the fund to provide returns that are at least partially correlated to inflation over the very long term. This characteristic provides a degree of long-term funding protection as pension benefits under the plans are 70% indexed to inflation. This asset category includes our real estate, infrastructure, and timberland & farmland investments.
Market Neutral Assets
Our market neutral assets primarily consist of absolute return investments that play an important role in diversifying risk by generating investment returns that are relatively stable and largely uncorrelated with more traditional assets such as equities. These assets are highly diversified, reflect a wide range of risk-return profiles, and include managed futures, hedge funds, and other multi-asset strategies.