Capital One 2014 Annual Report Download - page 245

Plan Assets
The qualified defined benefit pension plan asset allocations as of the annual measurement dates are as follows:
Table 16.7: Plan Assets
December 31,
2014 2013
Common collective trusts(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59% 63%
Corporate bonds (S&P rating of A or higher) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Corporate bonds (S&P rating of lower than A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 10
Government securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 14
Mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100%
(1) Common collective trusts include domestic and international equity securities.
Plan assets are invested using a total return investment approach whereby a mix of equity securities and debt
securities are used to preserve asset values, diversify risk and enhance our ability to achieve our long-term investment
return benchmark.
Investment strategies and asset allocations are based on careful consideration of plan liabilities, the plan’s funded
status and our financial condition. Investment performance and asset allocation are measured and monitored on a
quarterly basis.
Plan assets are managed in a balanced portfolio comprised of three major components: a domestic equity portion,
an international equity portion and a domestic fixed income portion. The expected role of plan equity investments
is to maximize the long-term real growth of fund assets, while the role of fixed income investments is to generate
current income, provide for more stable periodic returns and provide some protection against a prolonged decline
in the market value of fund equity investments.
The investment guidelines provide the following asset allocation targets and ranges: domestic equity target of 39%
and allowable range of 34% to 44%, international equity target of 16% and allowable range of 11% to 21%, fixed
income securities target of 45% and allowable range of 35% to 55%.
Fair Value Measurement
For information on fair value measurements, including descriptions of Level 1, 2 and 3 of the fair value hierarchy
and the valuation methods we utilize, see “Note 1—Summary of Significant Accounting Policies” and “Note 18—
Fair Value Measurement.”
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CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)