Basis point
A unit of measurement used to quantify investment returns or interest rates. A basis point is equal to one one-hundredth of a percentage point (0.01 per cent).

Benchmark
An “investment benchmark” is the index or mix of indices representative of the asset class against which a portfolio manager’s investment performance is evaluated. For example, the investment benchmark for HOOPP’s Canadian equity portfolio is the S&P/TSX60 Total Return Index.

Bonds
A security representing a loan to a government or company. Bonds have a maturity date, which is the agreed-upon date the loan is to be repaid in full.

Derivatives
A derivative is a financial contract (between two or more parties) whose terms and conditions are based on one or more underlying assets (stocks, bonds, commodities, currencies, etc.). An example is an option, which gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date.

DEX Universe Bond Index
The DEX Universe Bond Index is designed to be a broad measure of the Canadian investment-grade fixed income market. It includes approximately 995 securities. Returns are calculated daily, and are weighted by market capitalization, so that the return on a bond influences the return on the index in proportion to the bond's market value.

DEX Long Term Bond Index
The DEX Long Term Bond Index is designed to measure total return for the Canadian investment-grade long-bond market, covering approximately 250 bonds with a term to maturity of more than 10 years.

Economic exposure
Reflects HOOPP’s total investment in a certain type of asset, including:

• direct investment through actual assets held
• indirect exposure through derivative strategies

Emerging markets
The financial markets of developing countries.

Equity
A security representing partial ownership in a company. Stocks are equities. Large-cap equities are the stocks issued by larger companies. Mid-cap equities are the stocks issued by mid-sized companies.

Equity Oriented
Investments in private equity and real estate.

Hedging
Reducing or offsetting a pre-existing risk exposure by making a financial transaction (often using derivatives).

Investment Property Databank
This index is designed to measure the performance of institutionally owned and managed properties in Canada.

Liability-driven investing
An approach to portfolio construction and management which explicitly integrates the exposures and cash flows of pension liabilities in formulating investment policies.

Long bonds
Bonds with a term to maturity of more than 10 years.

Morgan Stanley Capital International All Country World Index Blend Total Return Index
This is a composite index of equities listed on exchanges in developed and emerging markets throughout the world, including the U.S. and Canada.

Publicly Accountable Enterprises
According to the International Accounting Standards Board, an entity has public accountability if:

• it has issued (or is in the process of issuing) debt or equity instruments in a public market, or
• it holds assets in fiduciary capacity for a broad group of outsiders, such as a bank, insurance company, securities broker/dealer, pension fund, mutual fund, or investment bank

Real return bonds
These are bonds that provide a rate of return that is adjusted for inflation. This feature helps protect the ‘buying power’ of the initial investment, regardless of the inflation rate. Real return bonds tend to be issued by the federal government.

Risk mitigation
Risk mitigation is the application of systems to reduce the amount of loss from the potential future occurrence of an event.

Russell Mid-cap Total Return Index
This is a composite index that measures the performance of 800 U.S. corporations with market capitalization between approximately U.S. $1 billion and U.S. $18 billion. The average market capitalization is approximately U.S. $7.5 billion.

S&P/TSX60 Total Return Index
Standard & Poor’s index of 60 Canadian stocks. Most Canadian index derivatives use this index as a reference price.

S&P 500 Total Return Index
This Standard & Poor’s composite index is made up of 500 U.S. stocks and is used as a benchmark for the U.S. large-cap equity portfolios.

Total Plan Funding Target
This is the average annual rate of return the Fund needs to earn over the longer term to ensure Plan assets are sufficient to pay all benefits and expenses (assuming the Plan’s actuarial assumptions reflect emerging economic, market and demographic experience).

Universe bonds
These are bonds listed on the DEX Universe Bond Index.