Part 4 Subpart 4-8 Investment Policy

Sec. 4-804. Investment Objectives and Asset Allocation for Long-Term Investment Pool Accounts.

Funds not needed for expenditures within five years shall be considered long-term. The primary investment objective for the long-term investment pool accounts shall be to provide for the long-term growth of principal and income without undue exposure to risk. The University’s general policy toward the long-term investment pool shall be to diversify investments within both equity and fixed income securities so as to provide a balance that will enhance total return, while avoiding undue risk concentrations in any single asset class. Asset allocation guidelines shall be made on a long-term basis, with consideration to current and projected investment environments. Asset allocation, as a percent of the total market value of the total long-term portfolio, will be set with the following target percentage and within the following ranges:

Type of Securities Target Range
Equity 48% 30-60%
  U.S. 30% 20-55%
    Domestic Large Cap 16% 10-30%
    Domestic Mid Cap  7% 5-15%
    Domestic Small Cap  7% 5-15%
  International 18% 10-30%
    Core 11% 10-20%
    Emerging Markets  7% 5-15%
Real Estate Investment Trusts  7% 5-15%
Fixed Income 45% 30-70%
    Core Bonds 28% 20-40%
    Bank Loans 3% 0-5%
    Global Bonds 14% 10-20%
Cash -0% 0-5%

University representatives will monitor the asset allocation structure of the long-term investment pool. If the portfolio becomes overweighed in an asset class, University representatives will develop a plan of action to rebalance the portfolio.