These investments offer higher potential returns and low correlations with traditional assets. Another source of return is the premium available for taking on insurance risk. This might be through insurance-linked securities – investments issued by insurance companies to transfer insurance risks that they have previously taken into the market – or, more subtly, through commodity futures. Commodity futures are used by many counterparties as ways of hedging a risk that they face, such as the price received for growing a crop or mining a commodity. This means any investor willing to take the other side of a commodity future may earn an insurance-type premium for taking on this risk. This is in addition to any return seen from the movement in the underlying price of commodities. A single asset class can often give exposure to several differentiated sources of return at once. But the broad principle is to aim for as great a degree of diversification as possible for the return target required. four: immediate focus? The key message in the face of current events is not to make any rash investment decisions. Superannuation funds have long-term investment goals and should not change their allocations in response to every twist and turn the market takes. No matter how dramatic. What investment committees can do instead is ensure that they are well prepared for periods of market stress. This means making sure that the portfolio is truly diversified.