NIC employs the Reference Portfolio method in the formation and management of the portfolio of alternative instruments.
The Reference portfolio is a simple, low-cost and passive portfolio, which consists only of traditional asset classes - growth assets and fixed income assets.
During the construction of the Reference portfolio, the investor's key decision is the identification of the ratio of Growth assets to Income assets, which is defined by the investor's risk appetite in accordance with its mandate. This relationship can vary depending on the investor's risk appetite. For example, the lower the investor's risk tolerance (conservative approach), the higher the share of Income assets in the portfolio, and vice versa. The target parameters of the Reference portfolio approved by the National Bank of Kazakhstan are defined as follows:
- 80 (eighty) percent - global stock index;
- 20 (twenty) percent - global bond index.
The MSCI АCWI Investable Market Net Total Return Index (M1WDIM) is used as the global stock index.
The Barclays Global Aggregate Bond Index (LEGATRUH) is used as the global bond index.