How We Invest: Risk Management


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The effective management of risk is a central component of TIAA-CREF’s investment philosophy and an important reason why we have maintained our financial strength and stability over time. Regardless of market conditions, we take a sober and disciplined approach to managing risk, with an emphasis on investing for the long term.

Each portfolio management team operates within clearly defined risk metrics, which are set by TIAA-CREF’s independent risk management organization. These strict controls limit the size of individual holdings and sector positions, as well as a portfolio’s permissible tracking error (a measure of how closely the portfolio tries to follow its index).

Operating independently of the investment group, our risk management organization sets clear limits on TIAA-CREF’s investment portfolios in every asset class. The limits function as a second set of controls, ensuring that investment portfolios stay true to their investment goals and benchmarks while seeking to outperform the market over time. It is this risk management process that has limited TIAA-CREF’s exposure to subprime mortgage investments during the credit crunch that began in 2007.

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TIAA is an insurance company. Statements regarding its financial strength do not apply to variable annuities, mutual funds or any other product or service offered by TIAA-CREF and not fully backed by the claims-paying ability of TIAA.

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