Investment Policy of CFO

As stewards of charitable assets, it is our responsibility to meet not only current needs, but also the long-term needs of the communities we serve.

CFO’s capacity to serve its communities is directly tied to its ability to preserve and enhance its financial assets. To ensure that the Foundation’s goals are met, we have investment policies and guidelines that provide for prudent asset management.

The responsibility for managing the Foundation’s investment portfolio is vested in the Foundation’s Board of Directors through its Investment Advisory Board (IAB). The IAB, comprised of people knowledgeable in the investment field, oversees the investment activities of the Foundation. The IAB is assisted by the national consulting firm of Prime Buchholz.

The Foundation’s primary investment goal is to maximize long-term total return within levels of risk set by the IAB.

Diversification of investments is one of the IAB’s primary strategies for fulfilling the Foundation’s responsibilities. Because the selection and weighting of asset classes is one of the primary determinants of both investment return and volatility, our asset allocation is considered and monitored by the IAB. The portfolio is rebalanced to the target percentages quarterly.

Please know that the Board of Directors, the Investment Advisory Board and the staff at Community Foundation of the Ozarks are wholly committed to the stewardship of our charitable funds.

Click here to read the CFO’s full Investment Policy document

Investment Policies

The Investment Advisory Board of the Foundation, through regular meetings, sets goals and objectives, appoints professional managers and monitors performance, under the authority of the Board of Directors.

In October 1994 the Community Foundation of the Ozarks adopted a total return/distribution policy for funds of the Foundation.

The objective of the total return/distribution policy is to prevent erosion of the endowment by investing for a total return sufficient to cover desired grants, the cost of investment and the rate of inflation. The performance goal is to outperform the blended index over each market cycle.

Performance Measures:
To exceed returns of the following indices over a three- to five-year period:

Large cap domestic equities S&P 500 Index
Midcap domestic growth equities S&P Midcap Index
Midcap domestic value equities Russell Midcap Value
International equities MSCI EAFE Net Index
Emerging market equities MSCI Emerging Markets Net Index
REIT NAREIT US Equity Index
Hedge funds HFRI Fund-of-Funds Strategic Index & HRFI Fund-of-Funds Diversified Index
Intermediate domestic bonds BC Aggregate Index
World bonds JPM Global Govt Bond Index

CFO Fund Managers and Asset Allocation

DOMESTIC EQUITY – 25%

Vanguard 500 Institutional Index Fund
Fund type: large cap domestic equities
Allocation percentage: 6.3%

Vanguard Value Index Fund
Fund type: large cap domestic equities
Allocation percentage: 3.1%

Thornburg Large Cap Core Fund
Fund type: large cap domestic equities
Allocation percentage: 3.1%

Artisan Mid Cap Value Fund
Fund type: midcap domestic value equities
Allocation percentage: 6.25%

Wellington Management Company
Fund type: midcap domestic growth equities
Allocation percentage: 6.25%

INTERNATIONAL EQUITY – 21%

Artisan Partners
Fund type: international equities
Allocation percentage: 7%

Dodge & Cox
Fund type: international equities
Allocation percentage: 3.5%

Polaris
Fund type: international equities
Allocation percentage: 3.5%

Parametric Emerging Markets
Fund type: emerging markets equities
Allocation percentage: 7%

FLEXIBLE CAPITAL – 20%

Archstone Equity Strategies Fund
Fund type: hedge, fund-of-funds
Allocation percentage: 10%

Blackstone Partners Investment Fund
Fund type: hedge, absolute return
Allocation percentage: 10%

FIXED INCOME – 20%

PIMCO Total Return
Fund type: domestic bonds
Allocation percentage:  7.5%

Vanguard Total Bond Market Fund
Fund type:  domestic bonds
Allocation percentage:  7.5%

Colchester Global Bond Fund
Fund type: world bonds
Allocation percentage: 2.5%

Mondrian Global Fixed Income Fund
Fund type: world bonds
Allocation percentage: 2.5%

INFLATION HEDGING – 12%

 

ING Clarion Global Real Estate Securities
Fund type: REIT
Allocation percentage: 3%

Vanguard Energy Fund
Fund type: Natural resources – energy
Allocation percentage: 3%

The TAP Fund
Fund type: Commodities
Allocation percentage: 3%

Vanguard Inflation Protected Securities
Fund type: Inflation protected securities
Allocation percentage: 3%

ALTERNATIVE – 2%

Mission-related Investments: 2%

Revised October 2010

 

Portfolio Rebalancing: The portfolio shall be balanced to the percentages in the asset allocation model no more than four times per year.

To the extent possible, monthly cash additions will be used to rebalance the portfolio to the percentages in the asset allocation model.

Adopted: May 2009