VESTAVIA HILLS CITY SCHOOLS FOUNDATION INVESTMENT POLICY
The primary investment objective for these endowed funds shall be the production of income and conservation of principal.
All donations received by the Foundation shall be invested on a timely basis to ensure maximum financial returns. The Board of Directors, through the Finance Committee, shall direct such investments be made in approved financial instruments which will provide market returns and minimum risk of capital loss.
The following categories of investments shall constitute approved financial assets which may be purchased by the Foundation.
- Fixed Income Investments
Fixed income investments shall be limited to domestic debt instruments including certificates of deposit insured by the FDIC which do not exceed the FDIC insurance limit of the institution. Should the dollar amount of the certificate of deposit exceed FDIC insurance coverage, the financial institution shall be required to collateralize this excess with approved securities or additional insurance.
Additionally, debt securities issued or backed by the U. S. government or its agencies, debt securities issued by domestic corporations and mutual funds with like investments shall be approved.
All fixed income securities must be classified as investment grade by a nationally recognized rating agency (Moody’s or Standard and Poor’s). The average quality of the portfolio shall be rated no less than “A”. No single fixed income holding in any one issuer or issue shall exceed 15 percent (15%) of the value of the overall portfolio, with the exception of FDIC insured CD’s, issues of the U. S. Government or its agencies. Any fixed income security that falls below investment grade shall be reviewed immediately and sold unless the finance committee votes unanimously to retain the asset.
- Short Term Cash Equivalent Investments
Cash equivalent investments shall be those investments which will have a stated maturity date of one year or less. Approved investments shall include the following types:
- Commercial Bank, Money Market Funds
- Money Market Mutual Funds
- Commercial Paper with an agency rating not less than P-1/A-1
- U.S. Government Bills, Bonds or Agencies
- Banker’s Acceptances
- Repurchase Agreements
- Commercial Bank, Certificates of Deposit
Equity investments (common or preferred) shall not exceed 10% of total Foundation assets and any single position shall not exceed 5% of assets unless approved by the Board of Directors. The Foundation shall not own any equity position which yields a dividend of less than two percent (2%) annually.
The Board of Directors of the Foundation may, at a future date, vote to approve the increase of equity securities or mutual funds as a percentage of total assets.
The Board of Directors of the Foundation shall direct the Finance Committee to maintain an allocation of assets which will provide adequate funding of needs consistent with market conditions.
At any given time market conditions and the overall shape of the yield curve may dictate various dollar allocations between Cash, Fixed Income Investments and equities.
INVESTMENT REVIEW AND REPORTING
Portfolio performance, asset allocation, purchases and pending disbursements shall be reported by the Finance Committee to the Board of Directors no less than quarterly or as requested by the Board.
The Finance Committee shall make recommendations, as deemed appropriate to the Board. It shall be the responsibility of the Board of Directors to review and adopt changes to this Investment Policy, each year, within 90 days of its fiscal year-end.
Adopted By the Board of Directors this 11th Day of August 2003.
Finance Committee Chairman
Finance Committee Members
Mary Wynne Estes