Investment Strategies

This is debt issued by governments typically in developed markets and are nominal or inflation- linked. Government Bonds tend to be higher-quality (often long-term) debt investments which can be useful for hedging the DB section’s interest-rate and inflation risks. USSIM predominantly invests in UK, US, or European government bonds.

This is debt issued by corporations, typically in developed markets, with reasonably high (investment-grade) credit quality. Public Credit provides a return premium over Government Bonds and it is a good diversifier to the other investments we hold, while still having a relatively low exposure to the risk of corporate insolvencies. It also offers some attractive liability hedging properties.

This is debt issued by corporations, typically in developed markets that is sub-investment grade credit quality. High Yield bonds provide a return premium over investment grade bonds, but they also tend to be more volatile and are more exposed to the risk of corporate insolvencies.

This is debt issued by governments and corporations in emerging markets and can be investment-grade or below investment grade quality. It can be issued in either local currencies (e.g. the South African rand) or “hard” currencies such as the US dollar. Emerging Market Debt can provide superior investment returns than developed market bonds, while also being a good diversifier. Local currency bonds expose investors to the risk of currency fluctuations but can benefit from long-term appreciation of emerging markets currencies.

These are investments made in the equity issued by mid to large public companies in developed markets. They can generate income for USS as companies pay dividends on the profits they make, and the prices of these equity investments rise (or fall) as expectations about the future performance of companies and the economy as a whole rise (or fall). Developed Markets Equities are the largest and most liquid growth asset that USSIM could invest in.

These are investments made in the equity issued by mid to large public companies in emerging markets. Emerging Markets Equities tend to be higher risk than Developed Markets Equities, but they also tend to provide greater return potential over the long run.

These are investments made in the equity or debt of private companies and include property investments. Private Markets assets tend to be less correlated to Public Markets assets, making them a good diversifier. They can also offer superior investment returns but are less liquid and more complex than their Public Market equivalents. Read more about our Private Markets Team.