Asset Allocation Summit February 4, 5 & 6, 2009 Toronto

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Conference Agenda

Session 2:

1:30-2:15 - Incorporating Alternative Investments Into The Mix
? Pierre Caron, Senior Consultant, bfinance Canada Inc. ? Anthony Lennie, Director, Finance, Victoria University (in the University of Toronto)

Alternative investments are essential to maximizing returns while maintaining proper asset allocation in plan portfolios. However, some investors have found that incorporating alternative investments, such as hedge funds, private equity, real estate, managed futures and structured credit, into traditional strategic asset allocation has been difficult to do in a systematic way. This session will explore strategies for overcoming some of the hurdles institutional investors face.

? Innovative new strategies, instruments and techniques: what are alternative investments and how do they fit in a portfolio?
? Why institutional investors are increasingly choosing alternative asset classes
? Victoria University's experience incorporating alternative investments
? The unique return complications of alternatives
? Accounting for the downside risk
? Major barriers to entry into alternatives



2:15-3:00 - Currency Hedging Policy Formulation For Canadian Investors
Bruce Curwood, Director, Institutional Solutions, Russell Investments Canada Limited

Canadian pension plans have been progressively increasing their allocation to global markets over the last 10 years. Notwithstanding the empirical work that supports the performance and diversification benefits of investing abroad, plan sponsors are finding that they are becoming more exposed to volatile foreign currencies. Adverse currency movements can have a significant impact on the returns of Canadian pension plans' foreign investments. This presentation will examine:

? Why you should consider currency hedging
? How currencies have impacted the returns of your foreign portfolio
? What implementation issues should you consider?



3:00-3:15 NETWORKING BREAK

3:15-4:00 - Using Strategic Overlays To Optimize Risk Control And Add Value
Louis Basque, Vice-President, Product Engineering, State Street Global Advisors Limited

Given the increasing need by institutional investors to find new sources of alpha by broadening their investment scope, it has become important to understand how the strategic overlay is increasingly used as a tool to control asset allocation and monitor risk budgets for traditional pension plans. There is however a need for overlays to handle an increasing set of esoteric asset classes, well beyond the coverage of plain vanilla futures markets. This presentation will discuss how the strategic overlay may be used as a risk monitoring tool in today's environment.

? The strategic overlay and idea of risk budget
? What happens when plans add non-traditional asset classes into the lineup?
? What are the effects on the risk budget?
? How can an overlay strategy be financed?
? Measuring the performance of the overlay manager



4:00-4:45 - Assessing Asset Allocation In A Dynamic Risk Based Framework
Dino Bourdos, Vice-Presiden and Directort, Portfolio Management, TD Asset Management Inc.

This presentation will explore ways that leverage can be used to more sensibly and effectively manage the asset allocation, particularly in an asset/liability context. Levered assets typically raise risk while increasing return expectations. So although leveraged assets tend to lower risk-adjusted returns, including leveraged assets in optimal portfolios will raise what is termed the “efficient frontier,” justifying a role for leverage in optimal portfolio construction.

? Maximizing returns at a given risk level
? Including appropriate leveraged assets in portfolios
? Raising the efficiency frontier
? Limiting restraints on borrowing