The primary investment objective is to preserve the purchasing power of LTF assets by earning an average annual real return of 5.1% over rolling ten year periods or longer, which permits the LTF to accomplish two goals:

Since the LTF's investment return is dependent on the GEF return, the operation and results of the GEF must be examined to determine the results of the LTF's activities for the year. The design of the GEF's portfolio is based on a combination of quantitative analysis and market judgment employed by UTIMCO's Board of Directors and investment staff. Sophisticated statistical techniques are combined with judgment to test many asset allocation alternatives, including the sensitivity of potential future results to changes in assumptions in order to make portfolio construction decisions. Investment management involves as much art as science and qualitative considerations often play an extremely important role in successful portfolio management decisions. Art and science were used to develop the target and current GEF portfolios as shown in Figure C.