Policy 6.5: Investment
Original Date of Issue: 2/13/13
Revised: 9/16/15, 4/19/17
大发六合彩 Statement of Policies and Procedures, Objectives and Guidelines for Investing Operating Funds
Introduction
This statement outlines the investment policies and procedures, objectives, and guidelines for the operating funds for 大发六合彩 (DCCC). Part I has two purposes: (1) to define and assign responsibilities of the parties involved; and (2) to establish a clear understanding of the investment goals and objectives for operating funds and a basis for evaluating investment results.
Part II provides guidelines and limitations to all investment managers, including College managers, regarding the investment of the College鈥檚 operating funds.
Operating funds for the purpose of these Investment Procedures and Guidelines are defined as dollars, which are available to the College as part of the normal course of College operations. Primary sources of operating dollars are Sponsoring School Districts and State appropriations, students鈥� tuition and fee payments, and investment income. Not included in this definition of operating funds are dollars received for restricted purposes.
PART I - OVERSIGHT POLICIES AND PROCEDURES AND INVESTMENT OBJECTIVES
Responsibilities of the Board of Trustees and College Management
The Board of Trustees is responsible for adopting and maintaining investment policies that are consistent with the Board鈥檚 role as stewards of public dollars, the collective philosophy of the Board with respect to investment asset risk and liquidity, and to provide investment earnings so as to maintain the Board鈥檚 vision of affordable educational opportunities in a technologically rich and supportive learning environment. The 大发六合彩management team is responsible for the investment of operating funds under the policies established by the Board of Trustees. No person may engage in an investment transaction except as provided under the terms of this policy. Specific responsibilities include:
- The Board will establish and maintain reasonable and consistent investment objectives, policies, and guidelines, which will direct the investment of the operating funds.
听 - College management will prudently and diligently identify and recommend to the Board qualified investment professionals, including investment management consultant(s), custodian(s), and trustee(s).
听 - College management will regularly evaluate the performance of the investment managers to assure adherence to policy guidelines and monitor investment objective progress.
听 - The Board will monitor the investment strategies and rates of return to ensure compliance with Board-established guidelines.
听 - The Board will establish and maintain an Investment Committee that will be comprised of no fewer than three (3) and no more than five (5) members of the Board including a Chairperson appointed by the Chairperson of the Board who shall serve in an ex-officio capacity. Along with the Board members, other committee members will include the College President and the Vice President for Administration and Treasurer.
Requirements and Responsibilities of the Investment Manager
Investment managers must be a registered investment advisor under the Investment Advisors Act of 1940, as amended, or a licensed commercial bank. Each investment manager must acknowledge in writing its acceptance of responsibility as a fiduciary. Specific responsibilities of the investment managers include:
- Discretionary investment management including decisions to buy, sell, or hold securities as defined herein while observing and operating within all policies, guidelines, constraints, and philosophies as outlined in this statement. Any deviation from these policies and/or guidelines requires written approval from DCCC.
听 - Monthly reporting on a timely basis of account valuations and investment performance results.
听 - Communicating any major changes to economic outlook, investment strategy, or changes within the investment management organization, or any other factors which affect implementation of investment process or their progress toward investment objectives.
听 - Complying with any legislative or regulatory statutes and regulations.
大发六合彩 General Investment Objectives
The general investment objective is to generate annual income and capital appreciation while maintaining sufficient liquidity and avoiding excess risk. 大发六合彩believes that the achievement of investment returns should be viewed in a long-term context. Furthermore, 大发六合彩recognizes that rates of return are volatile on a year-to-year basis and that investment returns will not progress uniformly over time. Thus, volatility will be tolerated in as much as it is consistent with the volatility of a comparable market index. Specific objectives include the following:
- Maintaining sufficient liquidity to meet anticipated cash needs.
听 - Achieving a high, stable rate of return within DCCC鈥檚 risk tolerance.
听 - Generate capital appreciation on its assets while keeping preservation of principal as a guiding principle. 大发六合彩recognizes that it may be necessary to forego opportunities for potential large gains to achieve a reasonable risk posture.
听 - Understanding that risk is present in all types of securities and investment styles, 大发六合彩recognizes that some risk is necessary to produce long-term investment results that are sufficient to meet DCCC's objectives. However, unnecessary levels of risk taking are to be avoided.
听 - Diversification, in so far as it reduces portfolio risk, is required.
听 - All funds shall be invested with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the investment of a fund of like character and with like aims.
听 - Conforming with applicable federal, state, city, and other legal requirements.
Specific Investment Goal
Each manager is expected to meet or exceed the market index/benchmark selected and agreed upon while displaying an overall level of risk consistent with the risk associated with their benchmark.
PART II - INVESTMENT GUIDELINES
- Investment Approach
The College's operating fund balances will be divided into two categories for investment purposes:
A.听Short-Term Funds 鈥� Funds will be liquid within 20 business days or less. Should be invested in primarily short-term, fixed-rate investments, mutual funds, and other investments holding such short-term investments.
B. Long-Term Funds 鈥� Funds not needed to be liquid in the near future. May be invested in longer-term fixed rate securities, equities, and other investments specified herein and mutual funds and other investments holding such short-term investments.
听 - Policy Benchmarks
The overall portfolio has an average annual return objective of the 3-month Treasury bill yield plus 150 basis points. The portfolio will also attempt to maintain or exceed a Strategic Policy benchmark that matches the liquidity classification of the underlying assets to the following benchmarks:
-听Short-Term Funds: 3-month Treasury bill yield
-听Long-Term Funds (excluding equity): 50% Barclays Capital U.S. Aggregate Index / 50% Merrill Lynch 1-3 year Treasury Index
-听Long-Term Funds (equity): S & P 500 Index
-听Overall Long Term Funds (equity/non-equity combined) 3-month Treasury bill yield + 200 basis points
-听Performance will be measured based on the Policy Portfolio Asset level and percentage of assets designated to each asset classification.
听 - Allowable Assets
Allowable Assets are limited to the following:
A. Short-Term Funds
听- Treasury Bills
听-听Money Market Funds (AAA rated)
听- Commercial Paper
听-听Banker鈥檚 Acceptances
听-听Repurchase Agreements rated A1/P1 (or equivalent) or better
听-听FDIC-Insured Certificates of Deposit
听-听Demand Deposit Account from A1-Rated Commercial Banks
B. Long-Term Funds 鈥� any investment allowed under Short-Term Funds plus:
听-听U.S. Government and Agency Securities
听-听Intermediate and Long-Term Corporate Notes and Bonds
听-听Mortgage Backed Bonds
听-听Asset Backed Bonds
听-听Floating Rate Securities
听-听Yankee Notes and Bonds
听-听Equities (e.g., common stock, preferred stock, convertible stock, etc.)
听-听Derivatives for Non-Speculative Purposes
听 - Requirements for Cash Equivalents and Fixed Income Securities Investments
听-听The maximum investment in equities in the Long-Term Fund shall not exceed 25% of that Fund.
听-听No more than 5% of the total investments of a manager鈥檚 portfolio may be invested in the securities of a single issuer with the exception of the United States Government and Government Agency obligations.
听-听Individual security holdings of eligible government agencies may not exceed 30% of the portfolio.
听-听Repurchase agreements must be backed by U.S. Treasury or Government Agency securities having at all times determined on a daily basis a market value of at least equal to 102% of the amount invested.
听-听Banker鈥檚 acceptances and certificates of deposit must be issued by a bank which has, or whose parent holding company has, combined capital and surplus of no less than $500 million and a rating on unsecured senior debt of A or higher from Moody鈥檚 or Standard & Poor鈥檚.
听 - Prohibited Investments
Prohibited investments are any investments that are not specifically authorized within this statement. These include but are not limited to the following:
听-听Commodities and Futures Contracts for Speculative Purposes
听-听Private Placements (Except as detailed in item 10 below)
听-听Options for Speculative Purposes
听-听Venture Capital
听-听Tangible Personal Property
听-听Direct Real Estate
听-听Art/Precious Metals
听-听Margin Transactions
听-听Oil and Gas Payments/Drilling Partnerships
听-听Instruments issued in any country where such investments are prohibited by city, state, or federal policies.
听 - Safekeeping and Custody
Investment securities purchased for 大发六合彩will be delivered by either book entry or physical delivery and held in third-party safekeeping by a Federal Reserve member financial institution or its affiliated trust company designated as DCCC鈥檚 depository and custodian. 大发六合彩shall execute a Safekeeping/Custody Agreement with each bank or trust company prior to using the depository's services.
听 - Contractual Arrangement with Investment Managers
Contractual arrangements with organizations providing investment services will be short-term with the College reserving the right to terminate the relationship without financial cost other than that paid for services to date.
听 - Board Review of Guidelines and Performance
The Board will, from time to time, review the Investment Guidelines and performance to determine any appropriate revisions.
听 - Change in Status of Investment
The guidelines, outlined above, apply at the time of purchase. 大发六合彩recognizes that subsequent market valuation changes may cause an investment which was allowable at the time of purchase to subsequently fall outside of these stated guidelines. In those instances, it is expected that the investment manager will either reduce the investment so that it is allowable under the guidelines or obtain written approval from 大发六合彩management to continue the investment.
听 - Withdrawals
Any withdrawals of Long Term Funds that reside with an investment advisor must be requested by the President and Vice President for Administration and Treasurer and endorsed by the Investment Committee for further approval by the Board of Trustees.
听 - Reserve Funds
Any of those funds associated with the Reserve Practice Funds will be considered as short-term funds.
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