Our investment strategy clearly outlines the objectives and approach we adopt in managing our investments. The strategy also identifies the associated risks we face while conducting investment operations, and any prohibited investments that do not align with our ethical, values-based approach.
The key objectives of Mercy’s investment management program are to:
- maximise returns on surplus funds within established investment guidelines
- ensure that Mercy has access to necessary cash resources to meet its obligations
- minimise interest and borrowing costs.
We consider a range of matters in developing our investment policies, including:
- the interests, risk profile and expectations of the funding stakeholders
- legislative requirements (in particular, the need for prudent management of investments)
- relevant regulations issued under the Health Services Act and Aged Care Act
- the financial profile and liquidity requirements of our operations
- the resources and investment expertise available to Mercy Health
- the materiality of investment earnings to the achievement of our goals and objectives.
The Board Finance, Audit and Risk Committee oversees the ‘Approved Instrument Category’ for the Mercy Health Foundation Portfolio.
All investment decisions are required to follow the Trustee Act ‘Prudent Person Principle’, which requires a trustee to exercise the care, diligence and skill that a prudent person would exercise in managing the affairs of other persons.
Mercy Health Foundation is not permitted to invest in corporate entities whose direct business undertakings or products contradict or are in conflict with the values and teachings of the Catholic Church, or the health industry.
Such conflict may be defined as:
- products, such as (but not limited to) tobacco, liquor and illicit drugs, which are suspected of causing, or are directly linked to causing illness
- businesses that directly support or fund products listed in the categories above
- other prohibited investments including speculative position-taking; borrowing for investment purposes (‘leveraging’); investing in derivatives; and investing in shares or options in companies which have an interest in the outcome of clinical trials conducted in any facilities of Mercy Health.