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Risk management within investment activities

The aim of the risk management plan of the Church Pension Fund is to steer the risk management of its investment activities. Good risk management practices always require the determination of risks and risk management methods as well as the allocation, diversification and monitoring of risks. The purpose of the risk management plan is to clarify the risks involved in the investment activities for the decision-makers, the supervisors of the investment activities and other stakeholders. The risk management plan is a supplementary part of the annually drafted investment plan.

The risk management process is generally multifaceted and the investment risks are often overlapping. In terms of investment risk management, it is essential to utilise professional risk management guidelines and to ensure that the investment activities are being carried out by competent personnel. Furthermore, internal supervision must be established with the proper controls and limits. The objective of the risk management plan is also to clarify the operational methods and procedures should any risks be realised.

Most significant risks

The most significant risks are related to the investment activities. Risk management within investment activities primarily refers to the management of different market and counterparty risks. The Church Pension Fund endeavours to manage the total risk level and insecurity factors in investment activities by diversifying its investment assets with as broad a geographical distribution as possible and in different asset categories. Time diversification and a sufficient diversification between asset managers are also important.