The main risk parameter for NIC is the volatility of the Reference portfolio in the long term. In the short and medium term deviation from the risk of the Reference portfolio is acceptable.

NIC's risk management system consists of the following steps:
1. Identification;
2. Analysis
3. Action;
4. Monitoring of compliance with actions taken.


NIC adheres to the following main principles in its risk management process:

  • Generating returns in capital markets is possible only with the assumption of risk.
  • Capital may involve various levels (low, medium, high) and types of risk (equity risk, interest rate risk, inflation risk, credit risk, liquidity risk, volatility, etc.).
  • Accomplishing high long-term returns requires the assumption of high levels of risk, which, in turn, depends on the risk tolerance.
  • The first line of defense against inadvertent and excessive risk is diversification.
  • Portfolio diversification is necessary. Even though diversification can be used in a variety of ways, such as among asset classes, strategies, time horizons, geographies, sectors, currencies, for a long-term investor diversification is most effective when it is implemented based on fundamental risk factors.
  • Risk assumption implies the understanding that there will be periods with low returns and losses, which is a natural part of the investment process.
  • We are able to accept high levels of risk in the short term and medium term if it is expected that we will receive high returns in the long term. It is necessary to avoid, hedge or diversify away risks that we do not expect to earn sufficient returns.