3. Explain to the funds directors what the VaR of the SPY means, what it measures, and how the investment committee might use it to measure the risk of the S&P 500. The investment committee needs to determine the risk posed by the current fund holdings. This is known as the portfolio VaR. The committee is concerned about both short-term and mid-term risk. Generally, management of short-term risk is believed to manage long-term risk.