Message from CEO Kate Galvin:
On behalf of the Victorian Funds Management Corporation (VFMC), I am pleased to present our 2021-2022 Annual Report. This report provides an overview of VFMC’s investment performance for the past financial year, as well as progress against our Evolve24 strategy.
I am proud to advise that VFMC successfully delivered against its corporate and investment objectives for 2021-2022, despite challenging market and global conditions. Our team continued to demonstrate resilience and responsiveness in the face of significant shifts in the business environment, as well as the lingering effects of the COVID-19 pandemic.
Strategic highlights include a revised and revalidated investment management philosophy, new Investment Risk Management Plan implementation for our Foundation CIM clients, a simplified fee structure, and updated Investment Objectives and Strategic Asset Allocations for our Pooled Fund (formerly Multi Strategy) clients.
VFMC remained focussed on strong and sustainable long-term performance throughout the year, skilfully managing volatile market conditions and delivering important initiatives to improve portfolio resilience and diversification. Market volatility was reflected in performance, with VFMC producing its first negative one-year return (-2.1% net of fees) in almost 15 years. Our active portfolio management approach delivered strong protection, however, and ensured we remained above benchmark for the year. Performance over the three, five, seven and ten year periods also remained ahead of benchmarks.
VFMC’s risk-based approach means we are well placed to navigate these ongoing headwinds in the current financial year, while they continue to exert pressure on short-term investment returns. We are also regularly testing our investment assumptions and strategic direction against the changing environment, to ensure we can continue to deliver against our purpose to improve the future prosperity of Victoria.
Other report highlights include:
- an overview of VFMC’s renewed investment philosophy (page 20)
- a summary of how VFMC is managing the portfolio’s environmental, social and governance (ESG) responsibly, including the investment risks and opportunities posed by climate change (pages 27-31)
- insights into how VFMC supports and engages clients (pages 40-41)
- a look at how VFMC is continuing to retain, attract and support leading talent (from page 42).