How we invest

Investment Risk Appetite Statements

Balancing act

NLF has a:

  1. High appetite to take a level of investment risk that maximises the probability of the fund’s sufficiency but within the bounds of prudence
  2. High appetite for investments to deliver positive Environmental, Social and Governance outcomes as well as to have a high degree of alignment to the United Nations’ Sustainable Development Goals
  3. Low appetite for the failure of the Mixed Asset Portfolio to meet its return target in the next three years
  4. Low appetite for concentration of risk positions in the Mixed Asset Portfolio, while making meaningful allocations to each type of asset
  5. High appetite for illiquidity in the Mixed Assets Portfolio whilst there is a material allocation of assets to the liquid National Loans Fund
  6. Low appetite for embarrassment and reputation risk, reflecting the desired standard of a public body
  7. Medium appetite to focus NLF investments in the UK, supporting the UK Government
  8. High appetite for transparency and understanding, and a low appetite for operational complexity (including taxation treatment)