Local Education Foundation Outreach

Sample Investment Policy

MEMORANDUM
November 17, 1993

TO: Edmond Educational Endowment Board of Trustees
FROM: Finance Committee
SUBJECT: Investment Policy

In an effort to better manage the Endowment, we have developed an Investment Philosophy or Objective that is consistent with the by-laws of Edmond Educational Endowment, Inc. The purpose of this memorandum is to formalize the Finance Committee's recommendations for EEE's, (1) investment objective, (2) investment policy and (3) investment implementation, for resolution by the Board of Trustees.

INVESTMENT OBJECTIVE
Protection of income and capital against erosion by inflation. The long term nature of the Edmond Educational Endowment necessitates an investment objective which seeks to avoid the erosion of capital from inflation. Capital Preservation. In order to guard against capital loss, the portfolio will be comprised of a mix of diversified high quality securities with relatively low risk of principal loss. The portfolio will be comprised of marketable financial securities with high risk investments being avoided.

INVESTMENT POLICIES
Investment Mix Parameters - To be consistent with the Investment Objective, it is necessary to set guidelines of limits to be observed by managers of the Endowment portfolio. Obviously, the following parameters may need to be redefined form time to time as economic and market conditions change. As a general rule, the following investment limits are to be observed:

  • Common Stock 60%
  • Fixed Income Securities 60%
  • Cash Equivalents 30%

Consistent with the long term nature of the Endowment, investment performance will be assessed over a three to five year time horizon.

INVESTMENT IMPLEMENTATION
To meet our investment objectives, it is prudent to select a professional portfolio manager for active management of the Endowment's assets. Investment managers will be solicited by the Fiancee Committee on a competitive bid basis, and presented to the Board of Trustees for approval. The Finance Committee shall meet at least annually with the investment manager to review the investments, their performance and the manager's outlook on current and prospective investments. The Finance Committee will inform the Board of Trustees of the condition of the investments and performance of the investment manager at least annually.