EGSC Foundation Investment Policy
Adopted June 25, 2018
Updated March 7, 2022
Endowment and other long-term funds should be invested in accordance with prudent investor fiduciary standards and the Uniform Prudent Management of Institutional Funds Act (UPMIFA). The main objectives of the East Georgia State College Foundation’s long-term investment fund are to preserve the principal so that future needs can be met, while at the same time providing resources for scholarships and other programs.
II. General Investment Guidelines
- The investment objective will be to emphasize long-term capital appreciation and growth of income and specifically to increase the principal value at a rate equal to or greater than the rate of inflation as measured by the consumer price index.
- The overall character of the portfolio should be one of above average quality, possessing at most an average degree of investment risk.
III. Asset Allocation
- The portfolio’s equity allocation will typically range between 60% - 80%, with a target
of 70%, and have the following characteristics:
- The portfolio will be broadly diversified among large-cap, mid-cap, and small-cap domestic equity strategies, developed international and emerging market equity strategies, and publicly traded real estate investment trusts (REITs).
- The portfolio will have exposure to both growth and value equity styles. REITs will be permitted on a tactical basis, up to a 5% limit.
- Non-U.S. equity exposure will not exceed 25% of the total portfolio, or one-third of the total equity allocation.
- The portfolio’s fixed income allocation will typically range between 20%-40%, with
a target of 30%, and have the following characteristics:
- Permitted investments will include publicly traded investment grade fixed income, dollar-denominated global bonds, and non-dollar denominated global bonds.
- The portfolio will be well diversified as to issuer and maturity.
- Average maturities will generally be intermediate term, but may emphasize shorter or longer maturities, depending on yield differentials and market conditions.
- The maximum maturity of any individual issue will not exceed thirty (30) years at the time of purchase.
- The average duration of the total fixed income portfolio will not exceed the duration of the Bloomberg Barclays Aggregate Bond Index by more than 20%.
- The total fixed income portfolio will have an average credit quality rating of at least A.
- Cash reserves for scheduled distributions and other contingencies are expected to
comprise the balance of the Fund:
- Cash reserves will be invested at all times in SEC registered money market funds that meet the highest NAV rating classification or other principal stable overnight investment vehicles such as U.S. Treasury collateralized repurchase agreements.
- All cash reserve investments will have daily liquidity.
- The portfolio’s equity allocation will typically range between 60% - 80%, with a target of 70%, and have the following characteristics:
IV. Spending Policy
Each year approximately 5% of the average market value from the three previous fiscal year-ends may be distributed for funding of scholarships. The percentage is a discretionary amount that will be periodically reviewed by the Foundation, recognizing the objectives of the long-term fund. The amount distributed by the Foundation for scholarships can be increased/decreased year to year based on performance of the market and overall market conditions, as well as donor requests. Any exception to the 5% and three year standards will require approval of a majority of the Foundation Trustees. At no time will the Foundation spending encroach upon the corpus of endowed funds.
V. Management, Reporting and Monitoring
The portfolio managers will have full discretion to make investment decisions for the assets placed under its jurisdiction while observing and operating within the objectives and guidelines described above. It is understood that with portfolio managers, we will concede to their judgment in managing a fund. The managers are responsible for:
- Reporting quarterly investment performance results on a timely basis,
- Communicating any major changes to economic outlook, investment strategy or other factors which affect implementation of investment process,
- Informing the investment committee of any qualitative changes to the investment manager's organization
VI. The Investment Committee
The investment committee shall be charged with reviewing the portfolio performance, and asset allocation. Furthermore, the committee shall review the investment policy annually and advise the Foundation accordingly. This will include evaluation and analysis of scholarship funding levels.
The investment committee shall be comprised of no less than five members of the Foundation Trustee Board, including the chairman of the Foundation. The EGSC President, Vice President for Business Affairs, and Vice President for Institutional Advancement will serve as ex-officio members. Any members of the Foundation Trustees will always be welcome at investment committee meetings.
The investment committee will meet a minimum of two times annually, once in the last quarter of the calendar year and once in the second quarter of the calendar year and provide an annual report to the Foundation Trustees. Meeting minutes will be kept and distributed by the Vice President for Institutional Advancement or designee. Financial information will be disseminated by the Vice President for Business Affairs. An investment committee chairman shall be elected by the committee. Additional meetings may be requested by any member as market conditions dictate.