Portfolio Risk Management

• Our risk management process and strategy is focused on keeping volatility low and mitigating losses.  Since we are free of any relative return requirements and we do not focus on “risky” benchmarks such as the S&P/TSX Composite Total Return Index, our portfolios are generally well diversified by sector and industry.  As well, due to the unique position we take on bonds being allowed to be held in the Equity Portfolio, this gives us the opportunity to be negatively correlated to the stock market which reduces volatility overall.
  
  
• We do not use derivatives or leverage and we do not short stock or buy/sell exchange traded funds.  We do not plan to use these instruments in the future.