Section I - Purpose
The purpose of this policy is to detail the authority, discretion and responsibility for the effective management, safekeeping, and preservation of the Zane State College Foundation Investment Fund.
Section II - Investment Management
The Zane State College Foundation Board of Directors is responsible for establishing and maintaining a sound, prudent fiduciary policy and recommending the reinvestment strategy for assets in the Investment Fund. To meet this responsibility, the Foundation Board of Directors shall:
- Recommend a sound investment policy, including risk profile and funding (spending) needs.
- Recommend the selection of an investment manager.
- With the assistance of the investment manager, establish asset allocation recommendations as they relate to the combination of equity, fixed income, and cash equivalent positions after considering income needs, long-range growth, and the impact of volatility on investments of the investment fund.
- Monitor and evaluate results to ensure investment policies and guidelines are being followed and that investment objectives are being met.
- Review the investment portfolio with the investment manager at least annually.
Section III - Management Objective
The Zane State College Foundation Board of Directors selected the following allocation mix to achieve balanced needs for growth and income: Growth and Income Portfolio seeks to provide current income with the opportunity for capital appreciation.
Section IV - Investment of Assets
Fiduciary Responsibility
The investment objective is to generate optimal returns consistent with the risk constraints and policy guidelines expressed herein. The investment manager is expected to invest all assets with care, skill, prudence, and diligence.
Asset Allocation
The target asset allocation for the fund is:
- 15-35% Fixed Income
- 60-80% Equities
- 5% Cash Equivalents
It is the intent of the Zane State College Foundation that as a general practice, the investment manager will rebalance the investment portfolio the sooner of quarterly or once the asset allocation range of + or - 5% of the target allocation is reached or exceeded.
Equity Investments
The benchmark for the domestic equity portion of the portfolio will be the S&P 500 Equity Index.
Diversification: The equity portion will be diversified in terms of sector, industry, and company. No single equity position shall represent more than 10% of the equity investment fund.
Fixed Income Investments
The benchmark for the fixed income portion of the portfolio will be the index mutually agreed upon by the Zane State College Foundation Board of Directors and the investment fund manager.
Diversification: The fixed income portion should be properly diversified in terms of issuer, maturities/duration, and yield curve exposure. The fixed income portfolio may be invested in U.S. Government and agency obligations, marketable corporate bonds, mortgage-backed or asset- backed securities. The fixed income portfolio should have an average credit quality of “A”. The fixed income portfolio may include non-investment grade securities, with total exposure not to exceed 10% of the portfolio.
Cash Equivalents
Cash equivalents should be minimal over meaningful investment time periods. If not guaranteed by the U.S. Government, they should be the equivalent of A-2 by Standard and Poors or P-2 by Moody’s.
Prohibited Investments
The following is a list of currently prohibited investments:
Options Futures Private Placements
Short Selling Commodities Limited Partnerships
Section V - Evaluation and Review
The Investment manager will provide scheduled communication of investment goals, financial markets, portfolio strategy and performance review. The Foundation Board of Directors will determine adherence to investment guidelines, appropriateness of current investment asset allocation targets, and suitability of investment performance over various investment time periods.
