DelawareCollege Investment Plan
Delaware Higher Education Commission Conference Room
Board of Trustees Meeting
April 5, 2006
Trustees Attending: / Others Present:Jack Markell, Chair / Joe Ciccariello, Fidelity Investments, Boston
Richard Cordrey / Christopher Sharpe, Fidelity Investments, Boston
Jonathan Shelon, Fidelity Investments, Boston
Robert Watkins, Fidelity Investments, Wilmington
Ann Visalli, Deputy Treasurer
Tom Cook , Deputy Secretary of Finance
John S. (Chip) McDaniel, Deputy Attorney General
Maureen Laffey, DHEC
Michelle Harris, DHEC
Chairman Jack Markell called the meeting to order at 9:05 a.m.
Minutes from the January 20, 2005 meetingand September 28, 2005 meeting were distributed and reviewed. Because there was not a quorum, the minutes could not be voted upon. The next meeting’s agenda will include voting onthe January 2005, September 2005, and April 2006 minutes.
Jonathan Shelon distributed the Investment Review as of February 28, 2006 and the Business Update as of April 5, 2006. He then gave an overview of the Investment Review and discussed Fidelity’s performance. He noted that the performance over the last year has improved and done well.
Christopher Sharpe referred everyone to page 10 of the Investment Review to discussthe competitive analysisfor year-ended February 28, 2006. He explained Fidelity’s performance in comparison to theVanguard and Alliance, and noted that Fidelity has out performed.
Chairman Markell requested reports on other competitors. Joe Ciccariello said he will have that information ready at the next board meeting.
Chairman Markell inquired about Fidelity’s fees compared to the competition, and requested a comparison of the fees between Fidelity’s programs and other college investment programs. Joe Ciccariello commented that Fidelity is very competitive, and he will bring that information to the next board meeting.
Jonathan Shelon referred everyone to pages 13-16 of the Investment Review to discuss potential changes to asset allocation. He discussed increases in college expenses versus consumer price inflation, and noted that college inflation is closely linked to consumer price inflation. Therefore, Fidelity wants to control inflation so there is more money for college, even though tuition continues to increase. He noted four possible ways to tackle inflation – treasury inflation protection securities, commodity notes (commodity index), floating rate loans (indicated bank loans), and real estate related investments. Chairman Markell inquired if Fidelity plans on adding these to portfolios. Jonathan said not at the moment, but potentially, and Fidelity will formally introduce those options at that time. Ann Visalli noted that the agreement with Fidelity allows them to make certain provisions. Chairman Markell requested to see a chart at the next meeting showing the active return for our participants.
Joe Ciccariello discussed the Business Update as of April 5, 2006. Joe noted that the Delaware College Investment Plan continues to grow and Fidelity continues to be committed to marketing and ongoing product/service enhancement. Joe referred everyone to pg. 3 and noted that DCIP ended February at almost $300 million in assets. Actual net sales since inception were $243 million.
Tom Cook requested to see quarterly reports based on the information provided on pages 3 and 4 of the Business Date.
The next board meeting has been scheduled for Wednesday, October 18, 2006.
There being no further business, the meeting was adjourned at 10:30 a.m.
Respectfully submitted,
Michelle Harris
Administrative Secretary