An Investigation Into The Differences Of Asset Allocation Strategies Of The Government Institutions Pension Fund And Capricorn Asset Management Company

Abstract

The study investigates the differences of asset allocation strategies between the Government Institutions Pension Fund (GIPF) and Capricorn Asset Management Company, focusing on the strategies used when allocating investors’ funds among various asset classes. The study also compares the similarities and differences between the two investment firms regarding their allocation of investors’ funds, along with looking at their performance, considering the fact that the GIPF is a public company that deals with a defined benefit plan for government employees while Capricorn Asset Management Company is a private company that deal with private investors. The researcher used qualitative and quantitative approaches to determine asset allocation strategies investment management firms use in allocating funds to different asset classes, and to measure the risk and return correlation of the securities. The researcher found that the portfolio managers from the two investment firms use different asset allocation strategies as default investment options for their investors and members. The research established that the Government Institutions Pension Fund and Capricorn Asset Management Company have differences and similarities in how their portfolio managers handle their portfolios and how they allocate funds among different asset classes. The GIPF and Capricorn Asset Management Company spread investors’ funds across various asset classes such as equity, bonds, cash and property. Although both firms had different percentage allocations to various asset classes, both firms’ portfolio managers had a similarity in the amount they allocate to each asset class. The Government Institutions Pension Fund is a public organisation that offers retirement or saving plans for government employees while Capricorn Asset Management Company is a private investment fund that offers saving plans and investments for private investors.