HOOPP has a multi-asset class investment strategy in capital markets including stock and bond markets. Capital markets are financial markets that bring buyers and sellers together to trade stocks, bonds, currencies, and other financial assets. This enables savings and investment to be channeled to firms that can use the capital to create social and economic value.

Bonds provide value to the Fund because they offset the sensitivity of the Plan’s liabilities (i.e., pensions owed to members) to changes in interest rates and inflation. When interest rates go up, liabilities go down along with our bond values and vice versa. Most bonds pay a fixed interest rate that becomes more attractive if interest rates fall, driving up demand and the price of the bond. Conversely, if interest rates rise, investors will no longer prefer the lower fixed interest rate paid by a bond, resulting in a decline in its price.

Within the Capital Markets portfolio, HOOPP also has active strategies within credit, derivatives and public equity markets where results are not significantly correlated to overall equity or bond markets. This helps achieve higher returns.