Your Dollars at Work

Foundry Educational Foundation
January 2021

The investment objective of the Foundation is to generate a reasonable return of net income consistent with the Foundation's needs with due regard to the safety of principal but also to the desirability of some long-term appreciation of principal. In doing so, the Foundation recognizes the needs to: (1) produce income; (2) to protect principal: (3) provide equity; and (4) provide a mechanism to keep the Foundation's funds fully invested, in conformity with Foundry Educational Foundation (FEF) Bylaws and with reasonable prudence by registered qualified independent investment managers who are registered under the United States Investment Advisor's Act of 1940, and assume full fiduciary responsibility for all assets under management.

Income Levels: Generally, the highest return on investment results from higher-risk, longer-term securities. In light of this, it is not always prudent to judge a portfolio solely by yield. Yield objectives ( i.e. income levels ) should be determined periodically in conjunction with cost of funds, liquidity needs, asset/liability matches, and current yield curves. Note: Investment performance is to be evaluated net of investment management fees.

Liquidity Requirements: Realizing the Foundation incurs periodic operating expenditures some funds need to be readily available to meet those needs. It is an objective of the Foundation to maintain sufficient funds in a liquidated account ( i.e. checking-type account ), preferably an account that is interest bearing.

Risk Constraints: The Foundation is given the responsibilities for the prudent investing of the funds of the Foundation. Realizing this, the Foundation will not invest the funds entrusted to them in a speculative manner and funds should have diversification by type and maturity.

 1. Investment Policy. The Foundation through the Investment Committee and Executive Committee shall be responsible for providing oversight and direction to the financial affairs of the Foundation. This will include, but will not limit, the following:

  1. Establishment of an investment strategy consistent with the objectives stated in this Policy.
  2. Supervision for investments of the Endowment Fund
  3. Selection of investment managers, consultants, and custodians.
  4. Review performance of investment managers.
  5. Review performance of specific funds of the Foundation.
  6. Ensure that the Foundation and its Board of Directors are meeting fiduciary responsibilities and minimizing potential liability issues which could arise against the Foundation or individual Board members.

2. Appropriate Types of Investments. The following guidelines will apply in making investments for the Foundation.

  1. Investments may be in securities (i.e. bonds and stocks) of the U.S. Government or of corporations in the United States and Canada.
  2. Investments may be in Mutual Funds and/or Exchange Traded Funds (ETFs).
  3. Investments may be in Bank time, savings deposits, and money market instruments.
  4. All investments must be payable in U.S. Dollars.
  5. All securities must be marketable.
  6. All individual fixed income securities should be rated BBB or better by rating services.

3. Establishment of Types of Investment

Fixed Investments.

 GOAL: The investment goals of the Fixed Investments are to preserve principal from loss.

    1. Fixed investments provide as a minimum current-income yield at least equal to current available rates. Performance of Fixed Income Investments shall be measured against the Barclays Capital US Aggregate Bond Index.

INVESTMENT GUIDELINES: Investments are to be at the full discretion of the Investment Manager within the following guidelines:

    1. Individual, investment grade corporate, convertible, U.S. Treasury and Agency bonds.
    2. Individual securities should utilize a ladder approach to provide continued funds for re-investment and minimize rate swings.
    3. Individual security call dates and security premiums at purchase should be considered in making investments.
    4. Fixed Income Mutual Funds and ETFs employing strategies consistent with the parameters listed above can be utilized. Additionally, the Investment Manager is permitted to invest up to 15% of the fund's total assets in non-investment grade and/or foreign bond mutual funds

Growth/Appreciation Investments.

GOAL: Growth/Appreciation Investments should gain a total return equal to, and/or exceed a blended benchmark composed of 70% S&P 500, 15% Russell 2000, 15% MSCI EAFE which shall be used as a benchmark for judging performances.

INVESTMENT GUIDELINES: Investments are to be at the full discretion of the Investment Manager within the following guidelines:

    1. Individual equity common stocks.
    2. Equity mutual funds and/or ETFs.
    3. Alternative investment mutual funds and/or ETFs that include real estate, commodities and hedge funds are permitted.
    4. Investment transactions are to be governed by execution on a Abest realized price@ (best net price) basis. The lower commission rate need not mean the best realized price.
    5. The following securities or transactions are PROHIBITED. Short sales, margin purchase, limited partnerships, purchases for the purpose of exercising control of management, stock loans, common stock of foreign companies not listed on one of the major security exchanges.

4. Asset Allocations

The asset allocation policy is to provide the framework under which the investments will be made. Total Portfolio Performance will be measured against a blended benchmark composed of 30% Barclays Capital US Aggregate Bond Index, 48% S&P 500, 12% Russell 2000 Index, 10% MSCI EAFE Index.

The following ranges will apply to all investments held by the Foundation:

Total Equities 70% 0 - 75%
   Large Cap U.S. Equity 48% 0 - 70%
   Small/Mid Cap 12% 0 - 25%
   International 10% 0 - 15%
   REITs 0% 0 - 10%
Total Fixed Income 30% 25 - 100%
   Investment Grade 30% 25 - 100%
   High Yield 0% 0 - 20%
   International/Global 0% 0 - 15%
Alternatives 0% 0 - 10%

The Investment Committee may make an initial decision of a target asset allocation, which would be reviewed annually

    1. Due to market fluctuations, it is expected that allocations to individual asset holdings will frequently deviate from the target allocation, which may cause the Investment Committee to act to align the assets within its target from time to time.

5. Reporting Mechanisms.

  1. On a quarterly basis, the Investment Manager will supply by Investment Category, the Foundation with a report detailing: (1) all purchases and sales in the last quarter; (2) a breakdown of securities by type; (3) a narrative detailing the strategies utilized in the past quarter as well as anticipated strategies to be followed in the ensuring quarter; (4) a summary of performance versus stated benchmarks. A summary of this information shall be presented to the Foundation Board on a quarterly basis.
  2. On a no less than a quarterly basis, the Foundation will meet the Investment Manager to discuss the portfolio and performance.
  3. Monthly, the Foundation Executive Director and the Treasurer shall receive a statement of investments for financial reporting purposes to insure all investment activity is accounted for properly and timely.

6. Selection of an Investment Manager. It is the responsibility of Foundation to determine the most financially prudent avenues for managing the investment activities of the Foundations funds. In that regard, the Foundation may decide to obtain an Investment Manager to perform the investment activities of the funds.

The Investment Manager shall receive the Investment Policy of the Committee and abide by it in his fiduciary duties. An Investment Manager shall be placed on or removed from the approved list upon recommendation of the Foundation. In selecting an Investment Manager, the following shall be taken into account:

  • the financial condition of the firm
  • the skill and accessibility of its agents
  • the firm's access to markets
  • the track record of the firm with respect to performance
  • back office support and accuracy of transactions
  • ability of the firm to assist in investment planning

7. Annual Policy Review. On an annual basis, or at any time deemed necessary, this policy shall be reviewed to determine whether any modifications should be made. Any modifications of this policy shall be approved by the full Board of Directors of the Foundation.