The Foundation’s investments

The Foundation’s investments are managed systematically to achieve the long-term financial objectives. The Foundation has an investment plan, which is approved by the Board annually, and which describes the Foundation’s investment strategy and the principles of responsible investing.

The Foundation’s Board approves the investment plan and the asset management agreements, and ensures that the investments are monitored and risk management principles are followed. The Investment Committee of the Foundation’s Board prepares investment-related decisions for the Board and monitors the implementation of asset management.

The objective of the Foundation is to distribute a significant portion of the financial net return, after costs, as grants and awards. The annual grants are planned in a way that allows the Foundation to implement its grant strategy in the long term, as well as increase its capital and support for medical research. Thus, the annual fluctuation in returns does not hinder the implementation of a long-term grant policy.

Asset management objectives and responsible investing

The Foundation’s assets are managed prudently. The long-term objective of the investment operations is to achieve a real return of 3-4% after inflation, enabling the sustainable implementation of the grant policy and increasing the real value of investments. The target return is particularly challenging in the low-growth and high inflation environment, and the Foundation prepares for the possibility of lower returns.

When making investments, the objective is to achieve the best possible return-to-risk ratio and ensure the clarity of asset allocation. In the management of assets, attention is given to cost-effectiveness and portfolio turnover. Asset management is implemented through globally diversified fund portfolios. The target weights for the asset classes in the investment portfolio are 65% equities, 15% fixed income investments, and 20% illiquid investments.

The risks associated with the investments are managed by diversifying the investments adequately across different asset classes, geographical regions, investment strategies, and time horizons, as well as by distributing asset management to more than one investment manager.

The Finnish Medical Foundation is committed to responsible investing. Responsible investing ensures good returns for the investments and manages investment risks effectively. Responsible investing means that the Foundation takes into account not only financial considerations but also environmental, social, and good governance (ESG) aspects when making investment decisions.

The Foundation was established by the Finnish Medical Society Duodecim and adheres to medical ethics in its operations. The Foundation’s purpose of supporting medicine is also closely related to the United Nations’ Sustainable Development Goals (SDG #3: Good health and well-being).

The intended impact of the Foundation is, in line with the Hippocratic Oath, to maintain and promote health, prevent diseases, and improve the well-being of the sick as well as alleviate their suffering. The Foundation’s investment operations avoid investments in companies whose operations are in conflict with the maintenance of good health.

Investments are avoided in companies primarily engaged in adult entertainment, gambling, cannabis, alcohol, weapons, or tobacco.

The Foundation aims to improve the responsibility of its portfolio. The Foundation commits to an investment portfolio that is in line with the goals of the Paris Agreement. Investment managers must consider the impacts of climate change when choosing investments.

The Foundation implements the principles of responsible investing primarily through its asset managers. The Foundation requires that the selected managers have defined the principles of responsible investing and report on the results of their responsibility efforts. Responsibility must be an integral part of their investment operations.

The Foundation together with its partners improves the monitoring and reporting of responsible investing in the Foundation’s investment portfolios. The impact of responsibility on portfolio returns and risk is measured using sufficiently long time series.