MANAGED RISK INVESTING

We define risk as any factor likely to cause capital losses. Consequently, in portfolio management and in security selection, we consistently work to reduce these risks and to build a margin of safety.

QV's Investment Committee monitors the character of the portfolios on a monthly basis. This approach de-emphasizes short-term price fluctuations or changes relative to a benchmark, but emphasizes the quantifiable, fundamental measures of valuation and credit.

We govern equity portfolio risk based on the quantification of value, income, growth, creditworthiness, liquidity and industry diversification. We strive for lower valuations compared to the market, while retaining superior balanced sheets and profitability measures.

We govern fixed income risk by restricting exposure to lower quality credits, limiting issuer concentration, and by ensuring the average term to maturity and credit quality meets our interest rate outlook and investment policy parameters.