Core Portfolios

Global Growth Portfolio

Core’s most opportunistic portfolio seeks long-term capital appreciation available from the global equity and fixed-income markets. The portfolio holds a mix of foreign and domestic equities and bonds, and may include investments in commodities and other assets. For tactical purposes and in response to changes in economic, business, and credit cycles, the Global Growth Portfolio holds cash reserves from time to time. The goal is to invest fully in undervalued sectors of the world’s equity markets that show opportunity for substantial gains. In recent years, this portfolio has held significant investments in foreign markets to take advantage of the positive investment returns from globalization. See the "Principles and Processes" memorandum for a full discussion of conditions that inform this and Core’s other portfolios.

Conservative Growth and Income Portfolio

This portfolio employs the tactical approaches as the Global Growth Portfolio, and expresses the same views of investment opportunities. It differs by holding fixed-income investments in almost all market conditions and generally takes smaller positions in equities than in Global Growth Portfolios. As a result, the level of investment risk in these portfolios is lower than in Global Growth Portfolio. Core’s fixed-income investments are global and may include inflation-linked bonds. Since 2002, these portfolios have held short- and long-term bonds denominated in foreign currencies, to take advantage of the depreciation of the U.S. dollar. This portfolio generally offers less quarter-to quarter volatility and current income. It appeals to more conservative investors.

Risk Averse Portfolio

This portfolio is intended for investors with an aversion to risk and volatility. It is made up primarily of fixed-income investments; equities and other assets are held in relatively small proportions. As with Global Growth and Conservative Growth and Income Portfolios, the bonds in this portfolio usually include bonds or cash reserves denominated in foreign currencies. These foreign currency bonds pay interest and gain in value as the dollar continues to weaken. The small proportion of equities and other assets in this portfolio is invested in a manner consistent with the themes and investment ideas in the Global Growth Portfolio. This portfolio provides current income and stability and has limited exposure to stock market swings.

Capital Preservation Portfolio

This portfolio is designed for portfolios that seek consistent levels of current income and preservation of principal. The portfolio holds bonds of short and intermediate duration, usually in a mix of government bonds and investment grade corporate issues. This strategy reduces exposure to cyclical movements in bond prices. Except at times in which their valuations are compelling. Risk Averse Portfolios do not include long-term bonds or high-yield bonds, because of higher risk of capital losses. This Portfolio may take modest positions in bonds or money market instruments denominated in foreign currencies.

For a fuller discussion of Core’s portfolio management practices, kindly see the memorandum entitled "Principles and Processes in Core’s Portfolio Management Practices".