Asset Allocation

Asset Allocation

The Committee and Board believe that the Foundation’s ability to meet its performance expectations is, in large part, a function of its strategic asset allocation.  The Foundation has reviewed long-term performance characteristics of various asset classes through committee research and experience, and in conjunction with its investment managers.

Based on the Foundation’s time horizon, risk tolerance, performance expectations, and in compliance with UPMIFA, the strategic asset allocation for all Foundation assets are within the following ranges:

 

Asset Class Range % of Funds
Equities 40% to 70%
Fixed Income 20% to 50%
Alternatives (no Hedge Funds) 0% to 20%
Cash 2% to 20%
   

Limitations and Restrictions

The following categories of investments are not permitted for investment without the Board’s prior written approval:

  • Unregistered or restricted stock
  • Commodities and Futures Contracts
  • Private placement debt – except as may be positioned in a commingled fund which does not specifically emphasize private placements
  • Tax exempt securities – either state or federal
  • Conditional sales contracts and mortgages
  • Uncovered options
  • Hedge fund or venture capital partnerships
  • Trust Deeds
  • Short sales or margin purchases or purchases with debt either directly or within a commingled fund
  • Transferable certificates of participation in business trusts and limited partnerships
  • Securities in firms associated with Committee or Board members, outside investment managers or their respective parents, subsidiaries or affiliates
  • Securities in violation of California law
  • Collectables- including art, coins and stamps
  • Any investment which would give rise to Unrelated Business Income Tax “UBIT” as defined by the Internal Revenue Code

Investments in companies doing business not in accordance with the policy statements of the Investment Committee may be permitted if they are consistent with an existing trust instrument, upon approval of the Board of Directors.

Rebalancing

The investment managers are responsible for asset allocation rebalancing with the board-adopted acceptable ranges, as needed.  Periodically, the committee will review its target allocations to confirm or recommend adjustments.