Our Investment Committee identified three areas of need for our investors that we can uniquely serve. Here are the three strategies:
Near Term
For projects and initiatives that have a time horizon of approximately 2-5 years, it may be prudent to invest much of the allocated capital with an emphasis on stability and limited risk. We created the Near-Term strategy for exactly this purpose. The goal of this strategy is to provide an incremental return over simple depository or checking accounts.
We seek to accomplish this by allocating approximately 80% the invested capital into short and intermediate maturity, investment grade fixed income securities such as US Treasuries and investment grade corporate debt. The remaining 20% allocation is to US and non-US equities and other diversifying assets.
As an important reminder, the Near-Term strategy is not a replacement for cash. We encourage investors who will be using specific funds within 6 to 12+ months to consider holding those dollars as actual cash deposits or equivalent.
Growth
This strategy represents the existing foundation portfolio with a few subtle adjustments that we will cover in detail later. Ideally, investors in the Growth strategy will have an investment horizon of approximately 5 years or more. The portfolio is designed to meet the needs of investors seeking a “moderate” allocation to risk and return.
The portfolio consists of 65% US and non-US equities, 30% fixed income securities and 5% in diversifying risk assets. We believe this allocation mix meets the baseline needs for many constituents seeking a moderate amount of market participation without being excessively conservative or overly risky.
Growth+
We developed the Growth+ portfolio for those members who are comfortable taking a higher risk, higher return stance relative to our other strategies. The intended investment horizon is no less than 7 years and ideally 10+ years. This additional time frame is in direct recognition of the potential for greater short-term volatility.
The strategy holds 80% of its allocation in US and non-US equities, 15% in fixed income securities and 5% in diversifying risk assets. Our intention with this portfolio is to better meet the needs of investors who believe their investment goals are better suited to an “aggressive” asset allocation.
We believe a well-formulated asset allocation can have a greater ability withstand challenges in the implementation. Conversely, even the best implemented portfolio may have little chance of success if the asset allocation is inconsistent with the needs of the capital.
