Investment Strategy
The VU Foundation aims for long-term value growth by diversifying investments in global markets. Its investment philosophy focuses on risk diversification and a long-term strategy, with an emphasis on effective asset management and ensuring returns according to market conditions. We invite you to explore the Investment Board and quarterly reports for more details.
Key principles of the investment strategy and risk management:
- Over the medium term, the Foundation’s returns must exceed Eurozone inflation.
- The Foundation invests globally, not limited to Lithuania.
- Focus is on developed markets with strong economies and high governance standards.
- The primary currency is the euro; investments in other currencies may not exceed 50% of the Foundation’s value.
- Derivatives may be used exclusively for risk management or efficient investing.
- The Foundation cannot borrow or use financial leverage; transactions must be secured by collateral.
- Investment, storage, and management costs are optimized to ensure quality goal achievement.
- Investments align with Vilnius University’s goals, values, and ethical standards.
- Management is based on the principle that returns are directly proportional to the risk taken.
- No more than 20% of the Foundation’s funds may be allocated to a single investment, except for certain deposits and government securities.
Diversified Allocation of the Investments of the Endowment Capital
|
Asset Class |
Long-term |
Min. Breakdown Limit |
Max. Breakdown Limit |
Benchmark |
|---|---|---|---|---|
|
Developed World Stocks |
30 % | 20 % | 50 % | MSCI World, EUR |
|
Emerging Market Stocks |
5 % | 0 % | 10 % | MSCI Emerging Markets, EUR |
|
Investment-grade Government Bonds |
15 % | 10 % | 40 % | Bloomberg Barclays Euro Treasury Bond Index |
|
Investment-grade Corporate Bonds |
10 % | 5 % | 30 % | Bloomberg Barclays Euro Corporate Bond Index |
|
High Yield Bonds |
5 % | 0 % | 15 % | Markit iBoxx Euro Liquid High Yield Index |
|
Alternative Investments |
35 % | 10 % | 50 % | MSCI World, EUR |
|
Money Market Instruments |
0% | 0% | 20 % | EURIBOR 1M |
Responsible Investment Guidelines. The VU Foundation aims to integrate responsible investment principles into decision-making, promoting Environmental, Social, and Governance (ESG) policies. When investing in private funds, corporate stocks, or bonds, the ESG policies of the respective entities are evaluated.