DuPont 2015 Annual Report Download - page 104

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E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-45
Plan Assets
All pension plan assets in the U.S. are invested through a single master trust fund. The strategic asset allocation for this trust fund
is approved by management. The general principles guiding U.S. pension asset investment policies are those embodied in the
Employee Retirement Income Security Act of 1974 (ERISA). These principles include discharging the company's investment
responsibilities for the exclusive benefit of plan participants and in accordance with the "prudent expert" standard and other ERISA
rules and regulations. The company establishes strategic asset allocation percentage targets and appropriate benchmarks for
significant asset classes with the aim of achieving a prudent balance between return and risk. Strategic asset allocations in other
countries are selected in accordance with the laws and practices of those countries. Where appropriate, asset liability studies are
utilized in this process. U.S. plan assets and a portion of non-U.S. plan assets are managed by investment professionals employed
by the company. The remaining assets are managed by professional investment firms unrelated to the company. The company's
pension investment professionals have discretion to manage the assets within established asset allocation ranges approved by
management of the company. Additionally, pension trust funds are permitted to enter into certain contractual arrangements generally
described as "derivatives". Derivatives are primarily used to reduce specific market risks, hedge currency and adjust portfolio
duration and asset allocation in a cost-effective manner.
The weighted-average target allocation for plan assets of the company's U.S. and non-U.S. pension plans is summarized as follows:
Target allocation for plan assets at December 31, 2015 2014
U.S. equity securities 29% 28%
Non-U.S. equity securities 22 21
Fixed income securities 32 32
Hedge funds 2 2
Private market securities 9 9
Real estate 3 5
Cash and cash equivalents 3 3
Total 100% 100%
Global equity securities include varying market capitalization levels. U.S. equity investments are primarily large-cap companies.
Global fixed income investments include corporate-issued, government-issued and asset-backed securities. Corporate debt
investments include a range of credit risk and industry diversification. U.S. fixed income investments are weighted heavier than
non-U.S fixed income securities. Other investments include cash and cash equivalents, hedge funds, real estate and private market
securities such as interests in private equity and venture capital partnerships.
Fair value calculations may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the
company believes its valuation methods are appropriate and consistent with other market participants, the use of different
methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value
measurement at the reporting date.