States Investment Strategies.

STATES OF JERSEY

STATES INVESTMENT STRATEGIES

Presented to the States on 22nd June 2010 by the Minister for Treasury and Resources

STATES GREFFE

2010   Price code: E  R.84

INVESTMENT STRATEGIES - INTRODUCTION

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) (the Finance Law) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations  2005  (Regulation  4),  which  requires  that the  Minister  for  Treasury  and  Resources presents his investment strategies for States funds.
2. The States agreed the Establishment of a States of Jersey - Common Investment Fund in P35/2010, approved by the States on 11thMay 2010. Under this arrangement the majority of States Funds will be pooled for investment purposes.
3. Each States Fund will maintain its own Investment Strategy which it may achieve by investing in the States of Jersey – Common Investment Fund Investment Pools.
4. This report outlines the Investment Strategies for each of The States of Jersey – Common Investment Fund's Investment Pools. It also outlines the individual Investment Strategies for each Specific States Fund.
5. The strategies reflect the Minister's long term investment aims for each fund. The current position of each fund reflects current market conditions. The Minister's intention is that each fund will move towards its strategic aim as investment opportunities and market conditions allow.

2. OVERARCHING STRATEGIES

1. The Minister for Treasury and Resources has adopted an ethical investment Strategy that will be applied to all States' Investments; this is included in Appendix 1.
2. Governance arrangements are being reviewed during 2010 however the current arrangements are detailed in Appendix 2.
   3. STATES MAJOR FUNDS

3.1.  The States Major Funds' Investment Strategies are summarised in the table below. Full details of each Investment Strategy are available in Appendices 3 to 8.

(1)

monies required for working balances will be held outside of the States of Jersey – Common Investment Fund

4. PENSION FUNDS

1. The two major Pension Funds, Public Employees Contributory Retirement Scheme (PECRS) and Teachers' Superannuation Fund (JTSF) Investment Strategies are summarised in the table below. Full details of each Investment Strategy are available in Appendix 9.
2. The Minister for Treasury and Resources approves these strategy based on recommendations from the  Management  Board  (JTSF)  or  Committee  of  Management  (PECRS).  The Management Board/Committee  of  Management  are  responsible  for  these  Funds  and  they take independent professional investment advice and guidance from appropriately qualified and experienced persons on the Investment Strategies for the Funds to follow. When approving the Investment Strategies, the Minister takes appropriate investment advice from the States Investment Adviser.

(1)

this Figure includes capital value of future payments for certain liabilities.

(2) asset allocation is based on assets in the current Fund and excludes the value of future contributions to be made in respect of liabilities for increases to pensions in payment.

5. SPECIAL FUNDS

5.1.  The Special Funds' Investment Strategies are summarised in the table below. Full details of each Investment Strategy are available in Appendices 10 to 12.

(1)

monies required for working balances will be held outside of the States of Jersey – Common Investment Fund (2)

the loan book will be held outside of the States of Jersey – Common Investment Fund

6. TRUST AND BEQUEST FUNDS

6.1.  The Trust and Bequest Funds' Investment Strategies are summarised in the table below. Full details of each Investment Strategy are available in Appendices 13 to 19.

(1)

all Jersey Properties will be held outside of the States of Jersey – Common Investment Fund

 (2)

theholding in Jersey Water will be held outside ofthe States of Jersey – Common Investment Fund

7. OTHER FUNDS

7.1.  The Other Funds' Investment Strategies are summarised in the table below. Full details of each Investment Strategy are available in Appendix 20.

8. STATES OF JERSEY – COMMON INVESTMENT FUND

1. The States of Jersey – Common Investment Fund will operate ten Investment Pools (see Appendix 21 for full details of each Investment Strategy for each pool). States Funds can participate inany of the pools  in  accordance  with  their  Investment  Strategies.  The Investment  Pools  available  upon commencement of the Fund are as follows:-
   1. UK Equities Pool
   2. Overseas Equities Pool
   3. UK Commercial Property Pool
   4. Short Term Corporate Bonds Pool
   5. Long Term Corporate Bonds Pool
   6. Short Term Government Bonds Pool
   7. Long Term Government Bonds Pool
   8. UK Index Linked Gilts Pool
   9. Short Term Cash and Cash Equivalents Pool
   10. Long Term Cash and Cash Equivalents Pool
2. Over  the  forthcoming  year,  once  the  States  of  Jersey -  Common Investment  Fund  has  been implemented, further Special and Trust and Bequest Funds will join and partake in the Fund. As a result all Investment Strategies will continue to be reviewed and revised to reflect investment in the Fund. Once this process is complete the Minister will present revised investment Strategies for all Funds

APPENDICIES CONTENTS PAGE

OVERARCHING INVESTMENT POLICIES..................................................................................................6 AP1: ETHICAL INVESTMENT STRATEGY..................................................................................................6 AP2: GOVERNANCE ARRANGEMENTS (relates to all except Pension Funds)..........................................6

STATES OF JERSEY MAJOR FUNDS............................................................................................................8 AP3: STRATEGIC RESERVE FUND INVESTMENT STRATEGY.............................................................8 AP4: STABILISATION FUND INVESTMENT STRATEGY.......................................................................10 AP5: SOCIAL SECURITY (RESERVE) FUND INVESTMENT STRATEGY...........................................11 AP6: HEALTH INSURANCE FUND INVESTMENT STRATEGY............................................................13 AP7: CONSOLIDATED FUND INVESTMENT STRATEGY......................................................................14 AP8: CURRENCY NOTES AND COINS FUNDS INVESTMENT STRATEGIES....................................15 AP9: PENSION FUNDS AND THEIR INVESTMENT STRATEGIES.......................................................16

SPECIAL FUNDS...............................................................................................................................................18 AP10: TOURISM DEVELOPMENT FUND (TDF) INVESTMENT STRATEGY.....................................18 AP11: CHANNEL ISLANDS LOTTERY(JERSEY) FUND INVESTMENT STRATEGY........................21 AP12: DWELLING-HOUSES LOAN FUND INVESTMENT STRATEGY................................................24

TRUST & BEQUEST FUNDS ..........................................................................................................................27 AP13: ESTATE OF A A RAYNER FUND INVESTMENT STRATEGY....................................................28 AP14: THE RIVINGTON TRAVELLING SCHOLARSHIP INVESTMENT STRATEGY......................31 AP15: ESTATE OF H E LE SEELLEUR INVESTMENT STRATEGY......................................................34 AP16: ESTATE OF E J BAILHACHE INVESTMENT STRATEGY..........................................................37 AP17: LE DON DE FAYE TRUST FUND INVESTMENT STRATEGY....................................................40 AP18: GREVILLE BATHE FUND INVESTMENT STRATEGY................................................................43 AP19: ESTATE OF A H FERGUSON BEQUEST INVESTMENT STRATEGY.......................................46

AP20: OTHER FUNDS AND THEIR INVESTMENT STRATEGIES ........................................................49 AP21: STATES OF JERSEY – COMMON INVESTMENT FUND STRATEGIES...................................50

OVERARCHING INVESTMENT POLICIES

AP1: ETHICAL INVESTMENT STRATEGY

1. The Minister for Treasury and Resources is mindful of ethical issues and recognises the importance of acting in an ethically responsible manner when managing investments on behalf of the States of Jersey.

1. Fund Managers' Investment Decisions
2. When making investment decisions fund managers, for which the Minister is responsible, are required to give consideration to ethical risks in their assessment of a company's value, having regard to the information that is readily available at the time of the decision. The Minister intends for this to encourage investment in companies with good governance and responsible management.
3. Corporate Governance
4. All Fund managers are required to follow the Institutional Shareholders' Committee's Statement of Principles (ISCSP) in respect of the corporate governance of companies in which shares are owned. In particular, fund managers are required to:-
   1. discharge the States voting rights and
   2. when appropriate, engage with company management whilst having reasonable regard, where relevant to the ethically positive and negative contributions as set out below.
5. In seeking to identify companies that make a positive ethical contribution, the Minister pays particular attention to their record in the following areas:-

Conservation of energy or natural resources;

Environmental improvements and pollution control;

Providing high quality products and services that are of long term use;

Strong community involvement;

Good employee practices and equal opportunities record;

Training and education;

Good relations with customers and suppliers; and

Openness about company activities.

6. In seeking to identify companies that may have an ethically negative impact the Minister pays particular attention to activities that are counter to the States laws and policies such as:-

Environmental damage and pollution;  

• Unnecessary exploitation of animals;  
• Trade with or operations in oppressive regimes;  

Exploitation of third world countries;  

• Sale and distribution of weapons to terrorists or oppressive regimes; and  

Offensive or misleading advertising.

AP2: GOVERNANCE ARRANGEMENTS (relates to all except Pension Funds)

2. The Minister and the Treasurer may invest money and do so through the Investments Sub- Committee. The Minister determines the Investments Sub-Committee membership, which includes the Assistant Treasury and Resources Minister. The Sub-Committee makes recommendations to the Minister.

1. Terms of reference for the Investments Sub-Committee are as follows:-

• Investment Strategy development and review of movements within the acceptable bands;
• Appointment and removal of managers advisers;
• Establish benchmarks;
• Monitor performance against benchmarks;
• Regularly meets with investment managers for performance updates and

2. The Minister and the Investments Sub-Committee are able to appoint appropriately experienced and qualified advisers and managers to assist in developing and administering the approved strategies.
3. All major decisions are made on advice from the States independent Investment Adviser and are documented in minutes. The Treasurer is responsible for the implementation of these decisions.
4. Investment Advice
5. In setting and reviewing his investment strategies the Minister continues to take independent professional investment advice and guidance from appropriately qualified and experienced persons.
6. Appointment of Fund managers
7. Where appropriate independent Investment Managers are appointed to manage the various assets of the Funds. These Managers are appointed by the Minister on the recommendation of the Investments Sub-Committee following a rigorous selection process and after receiving and fully considering independent advice. Their terms and conditions of appointment are set by the Treasurer and endorsed by the Minister for Treasury and Resources.
8. Performance monitoring
9. The appointment of advisers and managers and their performance is regularly assessed by the Investment Sub-Committee.
10. The States Investment Adviser provides appropriate advice to the Minister, Investments Sub- Committee and Treasurer through written reports and attendance at meetings as well as through the provision of ad hoc reports when circumstances dictate.
11. The 2008 States Financial Report and Accounts have been presented by the Minister to the States which includes details of the various States Funds.
12. Performance management
13. As a part of the operational management of these Funds; individual performance targets are set for investment managers in line with the Funds specific strategies. The performance targets are set using key indices like FTSE.
14. Actual performance is regularly monitored against target by the Investments Sub-Committee. Investment managers are subject to challenge by the Investments Sub-Committee; who require explanations of any shortfalls against target together with Investment managers' plans to return to target.
15. Where the Investment Sub-Committee believes a manager is performing consistently below expectation, it recommends to the Minister that a replacement manager is sought.
16. Reporting
17. The Minister will report on the performance of the States main Funds in the Annual Accounts and once during the year as at the six months to June.
18. Independent Custodians
19. In order to safeguard States interests and assets and to mitigate risks independent custodians are appointed to provide safe keeping for all assets, except direct property and policies of assurance, directly invested by the investment managers.

STATES OF JERSEY MAJOR FUNDS

AP3: STRATEGIC RESERVE FUND INVESTMENT STRATEGY 1  Purpose of the Fund

1. On 5 December 2006, the States approved P133/2006 and thereby confirmed the policy for the Strategic Reserve as:
2. "the Strategic Reserve is a permanent reserve, where the capital value is to be used in exceptional circumstances to insulate the Island's economy from severe structural decline such as the sudden collapse of a major Island industry or from major natural disaster."
3. The States approved P84/2009 which proposed that this policy is varied to enable the Strategic Reserve to be used, if necessary, for the purposes of providing funding up to £100 million for a Bank Depositors Compensation Scheme.
4. The clarification of the purpose of the Fund by the States enables greater emphasis to be given to increasing the longer term value of the Fund rather than the need to generate annual income. This has enabled an increase in the proportion of the Fund being allocated to return seeking assets from previous levels, but considerable emphasis still needs to be given to capital preservation and liquidity.

2  Strategy

1. In order to meet the purpose of this fund the Minister has set a strategic aim of investing 60% in return seeking assets (equities and property) and 40% in risk reducing assets as detailed below:-

2. The ranges indicate tolerable variations according to investment conditions at any time.
3. As the financial environment changes the composition of the Fund's investments will change to reflect a move towards the strategic aim of the fund.

3  Investment Structure

1. Once the States of Jersey - Common Investment Fund is in operation, it is planned that the Strategic Reserve  Fund  will  invest  in  the  Common Investment  Fund  and  acquire  units  in the  following investment pools:-
   1. UK Equities
   2. Overseas Equities
   3. UK Commercial Property
   4. Short Term Corporate Bonds (<5 year)
   5. Long Term Corporate Bonds (>5 year)
   6. Short Term Government Bonds (<5 year)
   7. Long Term Government Bonds (>5 year)
   8. UK Index Linked Gilts
   9. Short Term Cash and Cash Equivalents (< 3 months)
   10. Long Term Cash and Cash Equivalents (> 3 months)
2. Until the UK Commercial Property investment pool is operational monies will be invested in the Cash and Cash equivalent investment pools.

4  Investment in Jersey

4.1  Investment is not generally made in Jersey, or in Jersey quoted companies. This is to ensure that as far as possible, the assets are diversified away from the effects of the Jersey economy.

5 Controlling Interest

5.1  The States of Jersey will not acquire share holdings greater than 3% of the issued share capital in UK companies.

AP4: STABILISATION FUND INVESTMENT STRATEGY 1  Purpose of the Fund

1. The purpose of this Fund is to provide a reserve which can beused to make Jersey's fiscal policy more countercyclical in order to create a more stable economic environment. The Fund receives cash allocations  in more buoyant  economic  conditions  and  makes payments  at  times  of  anticipated economic downturn.
2. At least until the Stabilisation Fund has been built up to a much higher level it needs to be:

• highly liquid;
• held in assets which will not lose value if a quick sale is required and  
• available at times of an economic downturn.

2  Strategy

1. In order to meet the purpose of this Fund, the long term aim of the Fund is to invest within the parameters indicated below:-

2. The current economic climate and the predicted and current demands placed on the Fund mean that at this time it will continue to be held in highly liquid assets such as short term cash deposits and certificates of deposit and not in bonds.
3. The cash holdings in this Fund are subject to the same restrictions placed on the cash in the Consolidated Fund (please see section 3).
4. Given that the purpose of this Fund is to provide support in an economic downturn; it should not invest in equities as these maysuffer at times of economic downturn, when payments may be needed to be made from the Fund.

3  Investment Structure– States of Jersey - Common Investment Fund

3.1  Once the Common Investment Fund is in operation, it is planned that the Stabilisation Fund will invest in the Common Investment Fund and in the current climate, only acquire units in each of the following investment pools:-

• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

AP5: SOCIAL SECURITY (RESERVE) FUND INVESTMENT STRATEGY 1  Purpose of the fund

1. The Social  Security  (Reserve)  Fund  (the  "Reserve  Fund")  is  both  the  mechanism  by which contribution rates and ceiling changes which fund pension and benefit costs of the Social Security Fund are smoothed over time and effectively act as a buffer to contribute towards the rising burden of pension costs as the Island faces up to the pressures arising from an ageing population. The Minister for Treasury and Resources is responsible for the investment of the Fund's assets. The Minister for Social Security has responsibility for the development of a strategy to deal with meeting future pension provisions for eligible islanders.
2. The number of persons in receipt of a State pension as a percentage of the working population is expected to increase over time. The purpose of this Fund is to build up a reserve for the future provision of pension benefits for those currently in employment, so as to reduce the impact of pensions on future generations, as well as to smooth contributions for social security benefits over time.
3. Long term growth is one of the mainaims for the Social Security (Reserve) Fund and therefore any income generated is reinvested back into the Fund. It is expected that there will be no requirement to draw on the assets of the Fund in the near term and during this period there will continue to be net cash inflows to the Fund.

2  Strategy

1. In order to ensure that the Fund can work towards its objective of longer term growth its strategy is to place a high proportion of its assets in return seeking investments.
2. The longer term strategic aim for the fund is to invest within the parameters indicated below:- Strategic Aim  Range

Asset Class  %  %

Equities  80  65 – 90 Property  10  0 – 15 Bonds/Cash  10  5 – 35

3. Investment conditions are not suitable tomovetothis strategy at the current time, however, as the financial climate changes the composition of the Fund's investments will change to reflect a move towards the strategic aim.
4. As the Reserve Fund is subject to three yearly actuarial reviews the outcomes may result in a need to redefine the Fund's investment strategy. All strategy revisions will be brought to the attention of the States.

3  Investment Structure

1. As a pension fund, the Social Security (Reserve) Fund can enter the insurance products restricted to the pension funds market which are designed to follow general market movements. This enables the Fund to participate inlarge pools of indexed assets available in the UK, at verylow management costs and provides the flexibility to easily change asset allocation by increases or decreases to the indexed holdings in each market.
2. These indexed funds are provided by an insurance company using a policy of assurance, but operate in a broadly similar wayto a series of unit trusts.
3. Once the Common Investment Fund is operational, it will provide an opportunity for the Social Security (Reserve) Fund to, later this year, invest around half of its equity assets in the States of Jersey -Common Investment  Fund  equity pools;  therefore  carrying  out  investment  under  active management.

4.1  Investments are not made in Jersey except where a Jersey company is part of an established index. This is to ensure that as far as possible, the assets are diversified away from the effects of Jersey's economy.

AP6: HEALTH INSURANCE FUND INVESTMENT STRATEGY 1  Purpose of the fund

1. The Health Insurance Fund is established under the Health Insurance (Jersey) Law 1967. The Fund receives allocations from Social Security Contributions, as specified under Article 30 of the Social Security (Jersey) Law 1974 for the use of paying allclaims for money benefit (GP subsidy) and pharmaceutical  benefit.  The Minister  for  Social  Security  has  responsibility  for  the  control  and management of the Fund.
2. The Minister for Treasury and Resources is responsible for the investment of the Fund's assets. The Minister for Treasury and Resources may, after consultation with the Minister for Social Security appoint one or more investment managers for the Fund.

2  Strategy

1. In order tomeet the fund's purpose the strategy set is a mix between capital growth and income distribution. The Minister has set a strategic aim of investing 40% in return seeking assets (equities) to produce long term returns, with the remainder, 60% in risk reducing assets to provide some stability and in the case of corporate bonds, income returns.
2. The longer term strategic aim for the fund is to invest within the parameters indicated below:-

3. The ranges indicate tolerable variations according to investment conditions at any time.

3  Investment Structure

1. The Fund is invested with a single investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operation, it is planned that the Health Insurance Fund will be able to implement its investment strategy and will acquire units in each of the following investment pools:-

• UK Equities
• Overseas Equities
• Short Term Corporate Bonds (<5 year)
• Long Term Corporate Bonds (>5 year)
• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

AP7: CONSOLIDATED FUND INVESTMENT STRATEGY 1  Purpose of the Fund

1. The Consolidated Fund is established under the Public Finances (Jersey) Law 2005 and effectively represents the States current account were it a household. Income from taxation, duties, chargeable services, fees and fines are paid in and expenditure approved by the States Assembly, on employees' salaries, equipment, supplies, services and capital projects etc are paid out from the consolidated fund.
2. Any balance on the fund is invested on a short term basis, until it is required to meet on-going approved expenditure.

2  Strategy

1. In order tomeet the Fund's purpose the strategy set is risk adverse with capital preservation, liquidity and flexibility being the over-riding factors governing its requirements.
2. Investment  should  be  made in  cash  deposits,  certificates  of  deposits  and  limited  amounts  of commercial paper and floating rate notes.

3  Investment Structure

1. Once the Common Investment Fund is operational, it is planned that the Consolidated Fund will invest most of its assets in the Common Investment Fund and acquire units in each of the following investment pools:-
   1. Short Term Cash and Cash Equivalents (< 3 months)
   2. Long Term Cash and Cash Equivalents (> 3 months)
2. The remainder of the Fund's assets, required for daily cash-flow transactions, will be held with a single  investment  manager  who  specialises  in  investing  in  cash  and  near cash  equivalent investments. The investment manager should operate within the following allocation limits:-

3. No more than 25% of the portfolio can exceed one year to maturity.
4. In order to mitigate risks further the investment manager responsible for the Consolidated Fund portfolio is limited to holding no more than 10% of the States portfolio with anyone financial institution. Deposits can onlybemade with institutions which fall into the following categories:-

Deposit term  Rating

Short-term deposit (up to 3  Standard & Poors A1 and months)  Moody's P1 Longer-term deposit (over 3  Standard & Poors AA and months)  Moody's Aa3

5. No derivatives, overseas currency and off balance sheet vehicles are permitted.

AP8: CURRENCY NOTES AND COINS FUNDS INVESTMENT STRATEGIES 1  Purpose of the Fund

1.2  The States Currency and Coinage Funds are provided for under the Public Finances (Jersey) Law 2005 and the Currency Notes (Jersey) Law 1959. The principal purpose of these Funds is to hold assets that match the value of Jersey currency in circulation, such that the holder of Jersey currency could on request be repaid.

2  Strategy

1. In order to meet the purpose of the Funds the strategy is based mainly on the requirement to invest in low risk cash based assets to protect and maintain the capital value of the investments and to ensure that currency and coinage in circulation is matched and that investments could be liquidated fairly quickly should a need arise.
2. In order to maximise the potential return to the Funds a relatively small element of the Fund should be held in Equities and Short Term Government Bonds.
3. This is able to happen as although the level of currency in circulation fluctuates, there is a core level always in circulation, which enables a limited equity investment and bond holding to beheld currently through a £20 million unitised holding in the Strategic Reserve portfolio.
4. The long term strategic aims of the Funds are to invest in the parameters indicated below:-

3  Investment Structure– States of Jersey - Common Investment Fund

3.1  Once the Common Investment Fund is in operation, it is planned that the Currency Notes and Coinage Fund will no longer need to invest in the Strategic Reserve Fund; instead it will directly invest in the Common Investment Fund acquiring units in the following investment pools:-

• UK Equities
• Overseas Equities
• Short Term Government Bonds (<5 year)
• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

AP9: PENSION FUNDS AND THEIR INVESTMENT STRATEGIES  1  Background

1.1  The Minister for Treasury and Resources approves strategy based on recommendations from the relevant  Board  or  Committee  of  Management  responsible  for  the  individual  pension  fund. In approving the relevant investment strategy the Minister takes appropriate investment advice from the States Investment Adviser.

2  Governance arrangements

1. Investment Advice

1. The Management Committee/Board responsible for these Funds takes independent professional investment advice and guidance from appropriately qualified and experienced persons on the strategy to be followed.
   2. Appointment of Fund managers

2.2.1  Independent Investment Managers are appointed to manage the various assets of the pension funds. These Managers are appointed by the Committee/Board following a selection process and after receiving independent advice and guidance. The appointment of managers needs ratification from the Minister for Treasury and Resources.

3. Performance monitoring

2.3.1  As with those funds which fall under the Minister's direct responsibility, the appointment of advisers and managers and their performance for pension funds is regularly assessed by individual Investment Sub-Committees, set up by the Pension funds Management Committee/Board.

4. Independent Custodians

2.4.1  In order to safeguard the pension funds interests and assets and to mitigate risks independent custodians are appointed to provide safe keeping for all those assets which are directly invested by the investment managers.

3  Public Employees Contributory Retirement Scheme (PECRS)

1. Purpose of the Fund

1. The Public Employees Contributory Retirement Scheme (PECRS) is the States pension scheme set up to meet retirement benefits of all contributing public sector employees (excluding teachers) over 20 years of age.
2. Investment issues are considered by the Scheme's Investment Sub-Committee under advice from an Independent Investment Adviser and recommendations made to the Committee of Management for endorsement and/or referral to the Minister for Treasury and Resources as appropriate.

2. Strategy

1. The aim of the investment strategy is to invest the assets of the Scheme prudently to ensure that the benefits promised to members are provided.
2. The current strategy followed is:-

Strategic Aim  Range

Asset Class   %   %

Growth Investments

Equities  45  35 - 55 Alternatives  10  5 - 15

Bond Like Investments  0 - 10 Property  250 10 - 30

Bonds

Cash and Cash Equivalents  -  0 - 10 Debt   20  15 - 25

3. Any requirement for rebalancing between the asset classes is reviewed on a quarterly basis with advice from the Scheme's Investment Adviser.
4. The States has recognised responsibility for the pre 1987 Debt for PECRS which it has agreed to repay over an82 year period. This represents approximately 20% of PECRS total assets (referred to as "Debt" in the table above) and these payments can be regarded like a salary related index linked gilt issued by the States.

3  Jersey Teachers' Superannuation Fund (JTSF)

1. Purpose of the Fund

1. Membership of the Jersey Teachers' Superannuation Fund (JTSF) is compulsory for all teachers in full time employment and optional for those who work part-time.
2. The fund receives pension contributions from working teaching staff and also from the Education, Sport and Culture Department.

2. Strategy

1. The strategy for the Fund is based on the Board's aim to invest the assets of the Scheme prudently to ensure that the benefits promised to members are provided.
2. The long term strategy is to hold one fifth of the assets in risk reducing categories (e.g. bonds and property) and four fifths in return seeking assets (e.g. equities). Tactical moves diverging away from this strategic distribution may occur according to prevailing market conditions and prospective returns from each asset class.
3. The table below illustrates the long term asset allocation strategy:-

Strategic Aim  Range

% %

Equities  80  76-84 Property  10  0-10 Bonds/Cash  10  6-14

4. The above strategy is applied to the assets which are currently invested in the JTSF and does not take account of the future contributions which will be received to cover increases to pensions in payments which havebeen recently added to the scheme liabilities. The current Investment Strategy therefore contains a higher level of return seeking assets than may otherwise be the case.
5. Any rebalancing between the asset classes is carried out on a quarterly basis on advice from the Scheme's Investment Adviser.

3. Investment Structure

3.3.1  The Management Board appoints individual investment managers, and has currently appointed one specialist equity manager and one passive manager.

SPECIAL FUNDS

Purpose of the Funds

The States has a number of Special funds set up for specific purposes. Funds falling into this category include the Tourism Development Fund, Channel Islands Lottery (Jersey) Fund and the Dwelling-Houses Loan Fund.

AP10: TOURISM DEVELOPMENT FUND (TDF) INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) (the Finance Law) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. Under and Public Finances (Transitional Provisions) (no.1) Jersey Regulations 2005 (Regulation 9) the Tourism Development Fund (TDF) is given Special Fund status.
3. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
4. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
5. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

6. The strategy reflects the Minister's long term investment aim for this Fund with the intention to move towards the Fund's strategic aim as investment opportunities and market conditions allow. Initially until the Common Investment Fund is established it is anticipated that assets will continue to be invested in the Consolidated Fund in the form of cash balances and short term instruments, such as Certificates of Deposits.
7. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. TOURISM DEVELOPMENT FUND

1. Purpose of the Fund
2. The Tourism Development Fund (TDF) was established by proposition P170/2001, lodged by the former Tourism Committee (now the Minister for Economic Development) entitled - Investing in Tourism's future au Greffe. This was approved by the States of Jersey on 18th December 2001.
3. The purpose of the proposition was for the Tourism Development Fund to replace the old Tourism Investment Fund (TIF) and for the States to agree a principal £10m to be deposited into the Fund over a 5 year period. In 2003 £1.2m was transferred into the Fund and in 2006 a further £1m, however since then no further monies have been deposited into the Fund. The aim and objectives of the Fund are as follows:-
4. Aim - "to stimulate investment in tourism infrastructure in order to improve Jersey's competitiveness and sustain a flourishing tourism industry as a second pillar of the economy."

5. Funds  objectives:  "1)  improve  quality  of  visitor  experience  2)  enhance  distinctiveness  and environmental  quality  3)  improve  cost  efficiency  and  focused  use  of  resources  and  4)  secure implementation of the tourism strategy. "
6. The Economic  Development  Department  is  responsible  for  the  administration  of  the  Fund.  The Department is also responsible for the assessment of all initial project proposals before they are submitted to the Tourism Development Fund Panel (Advisory Panel).
7. The Advisory Panel comprises of six members from the private sector and senior officers from the Economic Development Department. The Advisory Panel usually meets four times a year.
8. Grants are awarded by the Tourism Development Fund Panel; where an application exceeds £0.5m, this is referred to the Minister for Treasury and Resources for prior approval.
9. Investment Strategy  
10. In order to meet the Fund's purpose the investment strategy set is to maintain the monetary value of the Fund, excluding investment income, to provide a high level of security and a good level of liquidity to finance projects as required.
11. It is recommended that the annual cash requirement for Tourism projects is forecast and that any surplus cash balances not required in the current year be invested into short-dated gilts to maximise the investment returns for the Fund.
12. The longer term strategy for the Fund is tohold assets in cash and cash equivalents. Therefore the Minister has set a strategic aim of investing all monies in risk reducing assets as detailed below:-

Strategic Aim  Range

% %

Government Bonds  -   0 – 70 Cash  100   0 – 100

13. The intention is that this Fund; apart from any monies required as a working balance; will be able to participate in the Common Investment Fund, as explained in Section 3 of this appendix. Initially assets will be held in the Consolidated Fund in the form of cash balances and short term instruments, such as Certificates of Deposits.
14. The cash holdings invested in the Consolidated Fund are subject to the following restrictions:-
15. Investment Manager Allocation Limits
16. Investment is made in cash deposits, certificates of deposits and limited amounts of commercial paper and floating rate notes. The investment manager operates within the following allocation limits:-

Maximum Asset Class  Maturity

Call & Overnight  One Day Deposits

Certificates of Deposit  2 Years

Fixed Deposits  3 Months Commercial Paper  3 Months Floating Rate Notes  5 Years

Maximum Allocation %

100 100

25 25 25

18. Deposits, held by Investment Cash Managers, can onlybemade with institutions which fall into the following categories:-

Deposit term

Short-term deposit (up to 3 months)

Longer-term deposit (over 3 months)

Minimum Industry Rating

Standard & Poor's A1 and Moody's P1

Standard & Poor's AA and Moody's Aa3

19. Where deposits  are  held  directly  with  Banks a minimum  AA  rating  Standard  &  Poor's  (or  Aa3 Moody's) is required.
20. No off-balance sheet vehicles are permitted.

3. INVESTMENT STRUCTURE

1. The Fund's assets are invested with a single investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operational, it is planned the Tourism Development Fund; apart from monies required for working balances; will invest in the Common Investment Fund and acquire units in each of the following investment pools:-

• Short Term Government Bonds (<5 year)
• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

AP11: CHANNEL ISLANDS LOTTERY(JERSEY) FUND INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
3. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
4. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

5. The strategy reflects the Minister's long term investment aim for this Fund with the intention to move towards the Fund's strategic aim as investment opportunities and market conditions allow. Initially until the Common Investment Fund is established it is anticipated that assets will continue to be invested in the Consolidated Fund in the form of cash balances and short term instruments, such as Certificates of Deposits.
6. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. CHANNEL ISLANDS LOTTERY (JERSEY) FUND

1. Purpose of the Fund
2. The Channel Islands Lottery is one of the longest running small lotteries in the world. It began in Jersey in the mid 1960s and raised millions of pounds for the development of Fort Regent. In 1975, Jersey and GuernseyChannel Islands joined together to form the Channel Islands Lottery and have been successful in raising money for sport leisure and recreation in the Islands and supporting the Association of Jersey Charities; which is made up of approximately 245 charities (February 2010).
3. Under the Gambling (Jersey) Law 1964 (article 3), the Gambling (Channel Islands Lottery) (Jersey) Regulations 1975 were made, setting out the Funds constitution, operations and administration provisions.
4. The promotion of the lottery is carried out by the Minister for Economic Development jointly with the Guernsey Committee ("States of Guernsey Gambling Control Committee").
5. In Jersey the Public Lotteries Board has been set up for the purpose of advising and assisting the Minister for Economic Development in all matters concerning the promotion and conduct in Jersey of the Channel Islands Lottery. The Board holds office for five years and consist of a chairman and not less than six other persons who have integrity and are ordinary residents in Jersey.  
6. The Fund is administered by the Treasurer of the States of Jersey.
7. The Minister for Economic Development has powers to set aside reserves to exercise his or her functions under the regulations. In 2009, proposition P.155/2009 was approved by the States to retain 10% of the 2009/10 profits in order to boost the Fund's reserves as a contingency measure, prior to distributing the Lottery's profit.
8. Currently there is some debate around the future of the Lottery if Islanders start playing the UKLottery in Jersey. This situation remains under review pending resolution of legal difficulties.

9. Investment Strategy  
10. During the year monthly trading cash receipts from sales of tickets after deduction of prize monies continue  to  grow.  Historically,  by December  the  Fund  holds  substantial  cash  balances  due  to compounding monthly ticket net inflows and large ticket sales from the Christmas Charity Draw.
11. Each year in March/April a substantial payment is made to the Association of Jersey Charities, which coincides with the presentation of the previous years' annual accounts to the States.
12. In order to meet the Fund's purpose the investment strategy's emphasis is on security, maintenance of capital value, flexibility and a veryhigh level of liquidity rather than on investment growth.
13. The long term investment strategy is to hold all assets in cash and short term instruments, such as Certificates of Deposits. As many of the significant cash flows occur annually, some of the cash may be invested on a longer term basis (i.e. greater than 3 months).
14. The intention is that this Fund; apart from any cash balances required as working balances; will be able to participate in the Common Investment Fund, as explained in Section 3 of this appendix. Initially assets will be held in the Consolidated Fund in the form of cash balances and short term instruments, such as Certificates of Deposits.
15. The cash holdings invested in the Consolidated Fund are subject to the following restrictions:-
16. Investment Manager Allocation Limits
17. Investment is made in cash deposits, certificates of deposits and limited amounts of commercial paper and floating rate notes. The investment manager operates within the following allocation limits:-

Asset Class

Call & Overnight Deposits

Certificates of Deposit Fixed Deposits Commercial Paper Floating Rate Notes

Maximum  Maximum Allocation Maturity  %

One Day   100

2 Years   100 3 Months   25 3 Months   25 5 Years   25

18. No more than 25% of the portfolio can exceed one year to maturity.
19. Deposits, held by Investment Cash Managers can only be made with institutions which fall into the following categories:-

Deposit term

Short-term deposit (up to 3 months)

Longer-term deposit (over 3 months)

Minimum Industry Rating

Standard & Poor's A1 and Moody's P1

Standard & Poor's AA and Moody's Aa3

20. Where deposits are held directly with Banks a minimum AA rating Standard & Poor's (or Aa3 Moody's) is required.
21. No off-balance sheet vehicles are permitted.

3. INVESTMENT STRUCTURE

1. The Fund is invested with a single investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operational, it is planned that the Channel Island Lottery (Jersey) Fund; apart from any cash balances required as working balances; will invest in the Common Investment Fund and acquire units in each of the following investment pools:-

• 10% in Short Term Cash and Cash Equivalents (< 3 months)
• 90% in Long Term Cash and Cash Equivalents (> 3 months)

3. Each year in March/April monies will need to be available tomeet the annual large payment made to the Association of Jersey Charities.

AP12: DWELLING-HOUSES LOAN FUND INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
3. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
4. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

5. The strategy reflects the Minister's long term investment aim for this Fund with the intention to move towards the Fund's strategic aim as investment opportunities and market conditions allow. Initially until the Common Investment Fund is established it is anticipated that cash will continue to be invested in the Consolidated Fund in the form of cash balances and short term instruments, such as Certificates of Deposits.
6. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. DWELLING-HOUSES LOAN FUND

1. Purpose of the Fund
2. The Building Loans (Jersey) Law1950 ("the Law"), article 2 established the "Dwelling-Houses Loan Fund" for the following purpose:-  
3. "to establish a building loans scheme to enable residentially qualified first-time buyers, who have never owned residential freehold property in Jersey, to purchase their first home. They must be able to demonstrate they have a deposit and can meet the loan repayments."  
4. The Fund was created at a time when Building Societies did not exist in the Island and Banks had not yet become extensively involved in lending monies for house purchases.
5. Under the Law and Building Loans (Miscellaneous Provisions) (Jersey) Regulations 1961, loans are granted by the Minister for Housing (former Housing Committee). The current maximum loan available is £120,000 and the maximum life of a loan cannot exceed 40 years from the date of the contract.
6. Loans issued are currently charged an interest rate of 7.5% under the Building Loans (Prescribed Rate of Interest) (Jersey) Order 2003. The Fund's interest rate is determined by the Minister for Housing after consultation with the Minister for Treasury and Resources.
7. In recent years, the Funds cash balance has increased as fewer loans are being issued and current loan balances are being repaid, as part of normal business or repaid early as borrowers transfer their loans to commercial lenders.
8. Under Article 2 of the Law, the States have powers to pay into and take monies out of the Fund. In 2006 the States agreed to transfer £32 million out of the Fund to the Stabilisation Fund (P.40/2006) and during 2009 a further £18m was transferred out of the Fund to the Stabilisation Fund (P.55/2009).  

11. The strategy is designed to maintain the asset value of the Fund in monetary, rather than real terms and anyincome received will help to offset the effects of inflation on monetary values.
12. The long term investment strategy for the Fund is to hold assets (excluding the loan book) in cash and cash equivalents and short dated government bonds.
13. The short term cash holding at any one time should be sufficient to cover potential loans to be issued in the forthcoming year. Therefore the Minister has set a strategic aim of investing all monies in risk reducing assets as detailed below:-

Strategic Aim  Range

% %

Government Bonds  75   0 – 90 Cash  25   0 – 100

14. The intention is that this Fund; apart from loan book; will beableto participate in the Common Investment Fund, as explained in Section 3 of this appendix. Initially assets will be held in the Consolidated Fund in the form of cash balances and short term instruments, such as Certificates of Deposits.
15. The cash holdings invested in the Consolidated Fund are subject to the following restrictions:-
16. Investment Manager Allocation Limits
17. Investment is made in cash deposits, certificates of deposits and limited amounts of commercial paper and floating rate notes. The investment manager operates within the following allocation limits:-

Maximum Asset Class  Maturity

Call & Overnight  One Day Deposits

Certificates of Deposit  2 Years Fixed Deposits  3 Months Commercial Paper  3 Months Floating Rate Notes  5 Years

Maximum Allocation %

100

100 25 25 25

18. No more than 25% of the portfolio can exceed one year to maturity.
19. Deposits, held by Investment Cash Managers, can onlybemade with institutions which fall into the following categories:-

3 months)

Standard & Poor's AA and Moody's Aa3

20. Where deposits  are  held  directly  with  Banks a minimum  AA  rating  Standard  &  Poor's  (or  Aa3 Moody's) is required.
21. No off-balance sheet vehicles are permitted.

3  INVESTMENT STRUCTURE  

1. The Fund's assets are invested with a single investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operational, it is planned that the Dwelling-Houses Loan Fund; apart from the loan book; will invest in the Common Investment Fund and acquire units in each of the following investment pools:-

• Short Term Government Bonds (<5 year)
• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

TRUST & BEQUEST FUNDS

1. Purpose of the Funds

1. These are Funds which have been left to the States as a legacy or bequest to be used for the purpose specified by the benefactor.
   2. Strategy  

1. Many of these Funds have been left with the intention that they will be spent and therefore unallocated funds need to be held in liquid assets. This means that the strategy for these types of Funds is to hold these assets in cash balances.
2. There are some larger Funds which are more significant in value and therefore benefit from a tailored investment strategy. Currently many of these funds are largely held in cash with a small element in government bonds and property. The intention is that many of these larger funds will be able to participate in the Common Investment Fund once it is implemented.
3. Below are published investment strategies for the first group of larger funds. It is the intention of the Minister for Treasury and Resources to continue to develop and implement individual strategies for many of larger funds over the forthcoming year.

AP13: ESTATE OF A A RAYNER FUND INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) (the Finance Law) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
3. For Trust and Bequest Funds, the Minister recognises the responsibility to protect the interests of both present and future beneficiaries of the Fund when deciding on the investment strategy for the Fund, focusing on investments which are expected to give optimal performance in terms of their overall return, rather than on investments which will give the "right" balance between capital and income returns.
4. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
5. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

6. The strategy reflects the Minister's long term investment aim for this Fund with the intention to move towards the Fund's strategic aim as investment opportunities and market conditions allow.
7. The strategy for this Fund has been developed with reference to the UK Charity Commissions "statement of recommended practice" (SORP 2005) and other UKCharity Commission publications.
8. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. THE A A RAYNER FUND

1. Purpose of the Fund
2. The late Mrs Ann Alice Blason (nee Colclough) (wife of Charles Henry Blason and the widow of John Edward Rayner the late Lord Mayor of Liverpool) bequeathed assets, to the States of Jersey for specific purposes, as detailed within her will dated 30th October 1945.
3. The acceptance of the bequest by the States and resolution onhow the Fund was to be administered was expressed in R&O 2536 which was adopted by the States on16th November 1949.
4. In 2001 the States approved amendments to the objects of the Fund (P38/2001 dated 27th March 2001 raised by Finance and Economics Committee (now the Minister for Treasury and Resources)), as the view was that the initial objectives of the Fund had been over taken with time and events. The revised objectives are as follows:-  
5. "1) the provision of pecuniary relief to needy persons residing in Jersey and 2) such other objectives or purposes of a charitable or philanthropic nature as the States may hereafter in their absolute discretion determine."
6. P38/2001 also made amendments to the administration of the Fund, thus rescinding R&O 2536 and a later act dated 11th September 1979. Under P38/2001, the Fund's income is now administered by a

Delegation which consists of 4 Jurat's of the Royal Court of Jersey. 2.7.  The Minister for Treasury and Resources (formerly the Finance and Economics Committee) is

responsible for any changes to the investment of the Fund after consultation with the Delegation.

8. Day to  day administration  and  accounting  is  the  responsibility  of  the  Treasury and  Resources Department.
9. The will bequeaths the income of the Fund to be used for its objectives and further gives the States discretion to distribute capital to an amount not exceeding one half of the total capital of the Fund. In practice all bequeaths historically haveonly been made out the income of the Fund. 
10. Investment Strategy  
11. P38/2001 gives the  Minister for Treasury and Resources (formerly the Finance and  Economics Committee) responsibility for any changes to the investments of the Fund after consultation with the Delegation. It further provides the opportunity toinvest in immovable property situated in or outside the Island which will be heldby the States of Jersey for and on behalf of the Fund.
12. In order to meet the Fund's purpose the strategy set is to work towards its objective of maintaining, with a target to exceeding the real value of the Fund over a rolling five year period coupled with generating sufficient levels of income for distribution.
13. The strategy assumes that the distributions will bepaid from investment income and that long term there will beno requirement to have a separate strategic aim for the holding of cash.
14. Therefore the Minister has set a strategic aim of investing 75% in return seeking assets (equities and property) and 25% in risk reducing assets as detailed below:-

Strategic Aim  Range %   %

Equities  65  45 – 85 Property  10   0 – 15 Bonds  25   5 – 65 Cash  -   0 – 15

15. The intention is that this  Fund  will be able to participate  in  the  Common Investment Fund,  as explained in Section 3 of this appendix. Initially assets will continue to be held in their current holding percentages of equities, bond and cash balances and short term instruments, such as Certificates of Deposits.
16. The ranges indicate tolerable variations according to investment conditions at any time.
17. As the financial environment changes the composition of the Fund's investments will change to reflect a move towards the strategic aim of the Fund.
18. The cash holdings in this Fund are subject to the following restrictions:-
19. Investment Manager Allocation Limits
20. Investment is made in cash deposits, certificates of deposits and limited amounts of commercial paper and floating rate notes. The investment manager operates within the following allocation limits:-

Call & Overnight Deposits

Certificates of Deposit

Fixed Deposits Commercial Paper

Maturity  %

One Day   100 2 Years   100

3 Months   25 3 Months   25

Floating Rate Notes  5 Years   25

21. No more than 25% of the portfolio can exceed one year to maturity.
22. Deposits, held by Investment Cash Managers can only be made with institutions which fall into the following categories:-

Deposit term

Short-term deposit (up to 3 months)

Longer-term deposit (over 3 months)

Minimum Industry Rating

Standard & Poor's A1 and Moody's P1

Standard & Poor's AA and Moody's Aa3

23. Where deposits  are  held  directly  with  Banks a minimum  AA  rating  Standard  &  Poor's  (or  Aa3 Moody's) is required.
24. No off-balance sheet vehicles are permitted.

3. INVESTMENT STRUCTURE

1. The Fund is mostly invested with a single investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operational the A A Rayner Fund will be able to implement its' Investment Strategy by acquiring units in each of the following investment pools:-

• UK Equities
• Overseas Equities
• UK Commercial Property
• Short Term Corporate Bonds (<5 year)
• Long Term Corporate Bonds (>5 year)
• Short Term Government Bonds (<5 year)
• Long Term Government Bonds (>5 year)
• UK Index Linked Gilts
• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

3. Until the UK Commercial Property investment pool is operational monies will be invested in the Cash and Cash Equivalent investment pools.

AP14: THE RIVINGTON TRAVELLING SCHOLARSHIP INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
3. For Trust and Bequest Funds, the Minister recognises the responsibility to protect the interests of both present and future beneficiaries of the Fund when deciding on the investment strategy for the Fund, focusing on investments which are expected to give optimal performance in terms of their overall return, rather than on investments which will give the "right" balance between capital and income returns.  
4. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
5. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

6. The strategy reflect the Minister's long term investment aim for this Fund with the intention to move towards the Fund's strategic aim as investment opportunities and market conditions allow. Initially until the Common Investment Fund is established it is anticipated that assets will be held in cash balances.
7. The strategy for this Fund has been developed with reference to the UK Charity Commissions "statement of recommended practice" (SORP 2005) and other UKCharity Commission publications.
8. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. THE RIVINGTON TRAVELLING SCHOLARSHIP FUND

1. Purpose of the Fund  
2. The late Mr William Charles Richmond-Pickering ("testator") bequeathed the remainder of his estate, to establish "The Rivington Travelling Scholarship" for the following purposes, as detailed within his will dated 17th April 1980:-  
3. "to enable a person, male or female, of any age, to visit such museums or art galleries out of the Island as would further his or her appreciation of arts, crafts and/or history. The only other criteria of the award to be the sincerity of the applicants intention and lack of funds."  
4. The will provided that in the event that the States did not accept the legacy on the terms set out by the testator that the residue of his estate would be given to Société Jersiaise.
5. The acceptance of the bequest by the States was expressed in proposition P.117/2004 madeby the Education, Sport and Culture Committee (now the Minister for Education, Sport and Culture), which

was adopted on 20th July 2004.

6. The administration of the Fund is carried out by a delegation of three persons; one person nominated by the Minister for Education Sports and Culture; one person representing the Jersey Arts Trust and one person representing Jersey Heritage Trust. executive and secretarial support is provided by officers of the Department for Education, Sport and Culture.

7. The will makes no differentiation as to whether distributions should bemade out of the capital or income of the Fund. However, the delegation, at their inaugural meeting decided to only allow grants to be made out of the annual income of the Fund in order to preserve the capital of the Fund.
8. Investment Strategy  
9. The will provides no guidance as to how the investments of the Fund should be carried out therefore the Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 requires the Minister for Treasury and Resources to be responsible for the development of the Fund's investment strategy in consultation with the States Investment Advisor (Regulation 3) as he sees fit.
10. In order tomeet the Fund's purpose the investment strategy set is for half of the Fund's assets to work towards an objective of maintaining, with a target to exceeding the real value of the Fund over a rolling five year period and for the remainder of the Fund's assets to provide sufficient high levels of income for distribution.
11. It is assumed that providing the required distribution income is generated that the Trustees will accept some price volatility in their assets in the pursuit of longer term investment returns.
12. The strategy assumes that the distributions will bepaid from investment income and that long term there will beno requirement to have a separate strategic aim for the holding of cash.
13. Therefore the Minister has set a strategic aim of investing 70% in return seeking assets (equities and property) and 30% in risk reducing assets as detailed below:-

Strategic Aim  Range

% %

Equities  50  30 – 70

Property  20  0 – 25 Bonds/cash  30  20 – 95

14. The intention is that this  Fund  will be able to participate  in  the  Common Investment Fund,  as explained in section 3 of this appendix. Initially assets will be held in the form of cash balances and short term instruments, such as Certificates of Deposits.
15. The ranges indicate tolerable variations according to investment conditions at any time.
16. As the financial environment changes the composition of the Fund's investments will change to reflect a move towards the strategic aim of the Fund.
17. The cash holdings in this Fund are subject to the following restrictions:-
18. Investment Manager Allocation Limits
19. Investment is made in cash deposits, certificates of deposits and limited amounts of commercial paper and floating rate notes. The investment manager operates within the following allocation limits:-

Call & Overnight Deposits

Certificates of Deposit

Fixed Deposits Commercial Paper

Maturity  %

One Day   100 2 Years   100

3 Months   25 3 Months   25

Floating Rate Notes  5 Years   25

20. No more than 25% of the portfolio can exceed one year to maturity.
21. Deposits, held by Investment Cash Managers can only be made with institutions which fall into the following categories:-

Deposit term

Short-term deposit (up to 3 months)

Longer-term deposit (over 3 months)

Minimum Industry Rating

Standard & Poor's A1 and Moody's P1

Standard & Poor's AA and Moody's Aa3

22. Where deposits  are  held  directly  with  Banks a minimum  AA  rating  Standard  &  Poor's  (or  Aa3 Moody's) is required.
23. No off-balance sheet vehicles are permitted.

3. INVESTMENT STRUCTURE

1. The Fund is invested with a single investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operational the Rivington Travelling Scholarship Fund will be able to implement its' Investment Strategy by acquiring units in each of the following investment pools:-

• UK Equities
• Overseas Equities
• UK Commercial Property
• Short Term Corporate Bonds (<5 year)
• Long Term Corporate Bonds (>5 year)
• Short Term Government Bonds (<5 year)
• Long Term Government Bonds (>5 year)
• UK Index Linked Gilts
• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

3.4.  Until the UK Commercial Property investment pool is operational monies will be invested in the Cash

AP15: ESTATE OF H E LE SEELLEUR INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
3. For Trust and Bequest Funds, the Minister recognises the responsibility to protect the interests of both present and future beneficiaries of the Fund when deciding on the investment strategy for the Fund, focusing on investments which are expected to give optimal performance in terms of their overall return, rather than on investments which will give the "right" balance between capital and income returns.
4. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
5. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

6. The strategy reflects the Minister's long term investment aim for this Fund with the intention to move towards the Fund's strategic aim as investment opportunities and market conditions allow.
7. The strategy for this Fund has been developed with reference to the UK Charity Commissions "statement of recommended practice" (SORP 2005) and other UKCharity Commission publications.
8. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. ESTATE OF H E LE SEELLEUR

1. Purpose of the Fund  
2. Harold Ernest Le Seelleur died on 22 October 1996, bequeathing assets to the States of Jersey for itself and its successors in perpetuity, for the following purpose as detailed under his will dated 28 December 1988 (The will was registered in Royal Court on 27 November 96):-

"for the benefit of aged, infirm and needy residents of the Island."

3. The acceptance of the bequest by the States was expressed in the terms of proposition P.71/97 of the Health & Social Services Committee, adopted by the States on 2 June 1997. Under the proposition it was decided that the administration of the Fund should be carried out by the Minister for Health and Social Services (formerly known as The Health and Social Services Committee).
4. The assets originally settled into the Fund comprised of Jersey based property. Life long enjoyment was provided for two properties; number 1 and 4 The Denes, Greve D'Azette, St Clements.
5. The Testator, expressly wished that the Executor, Mrs Pugsley, be consulted with a particular view towards the use of the properties for the benefit of aged, infirm and needy residents of the Island.
6. The will makes no differentiation between whether bequests should be made out of capital or income of the fund. Therefore this gives the administrators of the Fund the power to distribute all available assets to needy causes as they arise. (excluding properties held for life interest).  

8. The will provides no guidance as to how the investments of the Fund should be carried out therefore the Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 requires the Minister for Treasury and Resources to be responsible for the development of the Fund's investment strategy in consultation with the States Investment Advisor (Regulation 3).
9. For the non property assets, in order to meet the Fund's purpose, the investment strategy set is to work towards an objective of maintaining, with a target to exceeding the real value of the Fund, over a rolling five year period coupled with providing reasonable levels of income for distribution.
10. The Fund has been left with the intent that life-interest properties are to be held within the Fund until the life interests cease. It has been assumed that for all other property assets that they will be maintained at least in the short-term. These assets are professionally valued every three years and as part of this process advice should be sought on current market rental returns in order to take a view as to whether to retain the Jersey properties (except life interest properties) in the longer-term investment strategy for the Fund.
11. Therefore the Minister has set a strategic aim, excluding Jersey Property, of investing 65% in return seeking assets (equities) designed to produce long term returns and 35% in risk reducing assets designed to provide stability and income, as detailed below:-

12. The intention is that this  Fund  will be able to participate  in  the  Common Investment Fund,  as explained in section 3 of this appendix. All Jersey Property will remain outside of the Common Investment Fund. Initially all other assets will be held in the form of cash balances and short term instruments, such as Certificates of Deposits.
13. The ranges indicate tolerable variations according to investment conditions at any time.
14. As the financial environment changes the composition of the Fund's investments will change to reflect a move towards the strategic aim of the Fund.
15. The cash holdings in this Fund are subject to the following restrictions:-
16. Investment Manager Allocation Limits
17. Investment is made in cash deposits, certificates of deposits and limited amounts of commercial paper and floating rate notes. The investment manager operates within the following allocation limits:-

Asset Class

Call & Overnight Deposits

Certificates of Deposit

Fixed Deposits Commercial Paper Floating Rate Notes

Maximum Maturity

One Day 2 Years

3 Months 3 Months 5 Years

Maximum Allocation

%

100 100

25 25 25

19. Deposits, held by Investment Cash Managers can only be made with institutions which fall into the following categories:-

Deposit term

Short-term deposit (up to 3 months)

Longer-term deposit (over 3 months)

Minimum Industry Rating

Standard & Poor's A1 and Moody's P1

Standard & Poor's AA and Moody's Aa3

20. Where deposits  are  held  directly  with  Banks a minimum  AA  rating  Standard  &  Poor's  (or  Aa3 Moody's) is required.
21. No off-balance sheet vehicles are permitted.

3. INVESTMENT STRUCTURE  

1. The Fund's assets excluding Jersey Properties are invested with a single investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operational, it is planned that the Estate of H E Le Seelleur Fund will invest in the Common Investment Fund and acquire units in each of the following investment pools. All of the Jersey Properties will remain outside of the Common Investment Fund.

• UK Equities
• Overseas Equities
• Short Term Corporate Bonds (<5 year)
• Long Term Corporate Bonds (>5 year)
• Short Term Government Bonds (<5 year)
• Long Term Government Bonds (>5 year)
• UK Index Linked Gilts
• Short term Cash and Cash equivalents (< 3 months)
• Long term Cash and Cash equivalents (> 3 months)

AP16: ESTATE OF E J BAILHACHE INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
3. For Trust and Bequest Funds, the Minister recognises the responsibility to protect the interests of both present and future beneficiaries of the Fund when deciding on the investment strategy for the Fund, focusing on investments which are expected to give optimal performance in terms of their overall return, rather than on investments which will give the "right" balance between capital and income returns.
4. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
5. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

6. The strategy reflects the Minister's long term investment aim for this Fund with the intention to move towards the Fund's strategic aim as investment opportunities and market conditions allow.
7. The strategy for this Fund has been developed with reference to the UK Charity Commissions "statement of recommended practice" (SORP 2005) and other UKCharity Commission publications.
8. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. ESTATE OF E J BAILHACHE FUND

1. Purpose of the Fund
2. The late Mrs Eunice Jane Bailhache (née Hubert), who died on 15th June 1979, bequeathed assets for the following purposes, as detailed in her will dated 20th September 1974:-  
3. "Public of the Island of Jersey for the benefit of the Public Health Committee (now the Minister for Health and Social Services) of the States of Jersey for the general welfare of persons elderly, and/or blind or sick at the General Hospital."  
4. The States Law Officers' department in their letter dated 24th October 1994 provided a definition of welfare as "health, happiness and general wellbeing."
5. The acceptance of the bequest by the States was delayed for quite a few years as the will was contested. Eventually in March 1984, a settlement was agreed on the basis that 60% of the estate

should be retained by the public of the Island. This was passed in Court on 25th January 1985.

6. The States accepted the bequest, made up mostly of properties, under proposition (P.13/85) madeby the Public Health Committee on12thMarch 1985. The proposition resolved that the administration of

the Fund should be carried out by the Minister for Health and Social Services (formerly known as The Public Health Committee). 2.7  Since the States' acceptance of the Fund, the Fund still continues to hold mainly properties, which are all based in Jersey and are rented out. Over recent years some of the original bequeathed properties have been sold as there was no further use for them and the sale proceeds were reinvested into new

properties.

8. The will makes no differentiation between whether distributions should be made out of capital or income of the Fund. Therefore this gives administrators of the Fund powers to distribute all available assets to projects as they arise.  
9. Investment Strategy  
10. The will provides no guidance as to how the investments of the Fund should be carried out, therefore the Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 requires the Minister for Treasury and Resources to be responsible for the development of the Fund's investment strategy in consultation with the States Investment Advisor (Regulation 3) as he sees fit.
11. For the non property assets, in order to meet the Fund's purpose, the investment strategy set is to work towards an objective of maintaining, with a target to exceeding the real value of the Fund, over a rolling five year period coupled with providing reasonable levels of income for distribution.
12. For the property assets held, it has been assumed that these will be maintained at least in the short- term. These assets are professionally valued every three years and as part of this process advice should be sought on current market rental returns in order to take a view as to whether to retain the Jersey properties in the longer-term investment strategy for the Fund.
13. Therefore the Minister has set a strategic aim, excluding Jersey Property, of investing 65% in return seeking assets (equities) designed to produce long term returns and 35% in risk reducing assets designed to provide stability and income, as detailed below:-

Strategic Aim  Range

% %

Equities  65  45 – 85 Bonds/cash  35   5 – 75

14. The intention is that this  Fund  will be able to participate  in  the  Common Investment Fund,  as explained  in  section  3  of  this  appendix.  Jersey Property  will  remain  outside  of  the  Common Investment Fund. Initially assets available for investment in the Common Investment Fund will be held in the form of cash balances.
15. The ranges indicate tolerable variations according to investment conditions at any time.
16. As the financial environment changes the composition of the Fund's investments will change to reflect a move towards the strategic aim of the Fund.
17. The cash holdings in this Fund are subject to the following restrictions:-
18. Investment Manager Allocation Limits
19. Investment is made in cash deposits, certificates of deposits and limited amounts of commercial paper and floating rate notes. The investment manager operates within the following allocation limits:-

Asset Class

Call & Overnight Deposits

Certificates of Deposit

Fixed Deposits Commercial Paper Floating Rate Notes

Maximum  Maximum Allocation Maturity  %

One Day   100 2 Years   100

3 Months   25 3 Months   25 5 Years   25

20. No more than 25% of the portfolio can exceed one year to maturity.
21. Deposits, held by Investment Cash Managers can only be made with institutions which fall into the following categories:-

Deposit term

Short-term deposit (up to 3 months)

Longer-term deposit (over 3 months)

Minimum Industry Rating

Standard & Poor's A1 and Moody's P1

Standard & Poor's AA and Moody's Aa3

22. Where deposits  are  held  directly  with  Banks a minimum  AA  rating  Standard  &  Poor's  (or  Aa3 Moody's) is required.
23. No off-balance sheet vehicles are permitted.

3  INVESTMENT STRUCTURE

1. The Fund's  assets  excluding  Jersey Properties  are  currently  invested  with  a  single  investment manager who specialises in investing in cash and near cash equivalent investments as a temporary measure until the States of Jersey–Common Investment Fund is operational.
2. Once the Common Investment Fund is in operational, it is planned that the Estate of E J Bailhache Fund will invest in the Common Investment Fund and acquire units in each of the following investment pools. All of the Jersey Properties which will remain outside of the Common Investment Fund.

• UK Equities
• Overseas Equities
• Short Term Corporate Bonds (<5 year)
• Long Term Corporate Bonds (>5 year)
• Short Term Government Bonds (<5 year)
• Long Term Government Bonds (>5 year)
• UK Index Linked Gilts
• Short Term Cash and Cash Equivalents (< 3 months)
• Long Term Cash and Cash Equivalents (> 3 months)

AP17: LE DON DE FAYE TRUST FUND INVESTMENT STRATEGY

1. INTRODUCTION

1. This strategy document is presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which requires that the Minister for Treasury and Resources presents his investment strategies for States Funds.
2. The strategy set by the Minister pays particular regard to the need for diversification in both the management of the money available and the level of funds to be invested.
3. For Trust and Bequest Funds, the Minister recognises the responsibility to protect the interests of both present and future beneficiaries of the Fund when deciding on the investment strategy for the Fund, focusing on investments which are expected to give optimal performance in terms of their overall return, rather than on investments which will give the "right" balance between capital and income returns.
4. The Treasurer of the States is responsible for ensuring that States investments are properly managed, controlled and accounted for in accordance with the relevant investment strategies.
5. This document provides details on:

• Investment strategy for the Fund
• States of Jersey - Common Investment Fund

6. The strategy reflects the Minister's long term investment aim for this Fund with the intention to moves towards the Fund's strategic aim as investment opportunities and market conditions allow. Initially until the Common Investment Fund is established it is anticipated that assets will be held in cash balances and unquoted investments.
7. The strategy for this Fund has been developed with reference to the UK Charity Commissions "statement of recommended practice" (SORP 2005) and other UKCharity Commission publications.
8. The report includes information on matters solely relating to this Fund's strategy. This information is for this specific purpose only and should not be used for any other purpose.

2. LE DON DE FAYE TRUST FUND

1. Purpose of the Fund  
2. Jurat Percy Chambers Cabot died on 24th April 1959 and bequeathed his assets to the Treasurer of the States of Jersey ("Trustee"), to setup a Trust Fund called "LeDon de Faye" after the death of the annuitant, his unmarried sister, Alice Jane Chambers ('Lilian') Cabot. TheTrust Fund was created inmemory of his late wife Vera Maryde Faye and of her late father Thomas Louis de Faye, Major, Royal Militia of Island of Jersey.
3. The will dated 7th June 1958, states that the assets are to be held in trust, for the following purpose (the will was probated on 29th April 1959):-
4. "to distribute the annual income of the Fund (not necessarily in equal sums) for the sole discretion of the Rectors and their Churchwardens of the twelve parishes, for them to have sole discretion to distribute to needy parishioners of all social standing in each parish."
5. Under the terms of the will, the income of the Fund is to be apportioned and distributed in the name of the bequest "Le Don de Faye", 2/13th to the Rector and Churchwardens of St Clements in the first

week of December and 1/13th to each of the Rectors and Churchwardens of the other 11 parishes in the third week of December. 2.6.  The Treasurer as trustee for the fund is required to carry out the following duties:-

• To hold the capital of the Trust Fund together with the accumulated income as shall have accrued, together with any other liquid assets of the personal estate in the Trust.
• To invest the residue and proceeds of the Trust Fund as directed by the Committee of the States responsible for the controlling and supervising the finances of the States of Jersey (formerly known as the Finance and Economics Committee now the Minister for Treasury and Resources)

7. The will clearly states that the bequests should only be made out of the income of the Fund and therefore the capital of the Trust Fund should be preserved and not distributed.
8. Investment Strategy  
9. The will provides no guidance as to how the investments of the Fund should be carried out therefore the Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 requires the Minister for Treasury and Resources to be responsible for the development of the Fund's investment strategy in consultation with the States Investment Advisor (Regulation 3) as he sees fit.
10. In order tomeet the Fund's purpose the investment strategy set is for half of the Fund's assets to work towards an objective of maintaining, with a target to exceeding, the real value of the Fund over a rolling five year period and for the remainder of the Fund's assets to provide sufficient high levels of income for distribution.
11. It is assumed that providing the required distribution income is generated, the Trustees will accept some price volatility in their assets in the pursuit of longer term investment returns.
12. The strategy assumes that the distributions will bepaid from investment income and that long term there will beno requirement to have a separate strategic aim for the holding of cash.
13. Therefore the Minister has set a strategic aim of investing 70% in return seeking assets (equities and property) and 30% in risk reducing assets as detailed below:-