Big Bend Community College Foundation

Investment Policy Statement

I. Philosophy and Long-Term Goals

The primary objective is to preserve and grow the assets to provide a stable capital foundation for the organization.

Preservation of assets takes precedence over increasing risk to enhance return. Thegoal is to provide consistent returns with low volatility.

The day-to-day management of the assets will be delegated to one or more registered investment advisors, or bank trust departments, who will accept and acknowledge their fiduciary obligations.

II. Funding Statement

Funds should be invested for long-term growth, with consideration for short-term cash flow needs. Therefore, short-term cash and equivalents should be kept to a level commensurate with the liquidity needs of the fund.

III. Asset Allocation

The current asset allocation target is 2% cash, 32% fixed income assets and 66% equities. Any changes to these targets must be approved by the Board.

V. Investment Guidelines

The use of derivatives by investment managers shall only be allowed when used as an alternative to physical securities for efficiency or cost reduction purposes, and shall not be used for purposes of speculation or leverage if such purposes are not otherwise allowed under these investment guidelines.

No more than 5% of the plan assets shall be invested in the equity of any single issuer.

Exposure to an individual sector within the S&P 500 should not exceed the Index weighting by more than ten percentage points.

The following guidelines will apply to each investment segment:

  1. Cash - All commercial paper will be rated “P-1” or “A-1” by either Moody’s or Standard & Poor’s or in an approved money market fund.
  1. Fixed Income - A minimum rating of “A” by Moody’s or Standard & Poor’s must apply to all corporate issues.
  1. Equities - Investments will only be made in companies, or Exchange Traded Funds, that are liquid and publically traded within the United States unless approved by the Board.

VI. Review Procedures

The portfolio managers will provide a written report to the Board quarterly, with oral presentations made upon request.

Performance will be calculated quarterly with appropriate benchmarks.

Any major changes in the investment manager’s organization or investment philosophy will require full disclosure to the Board.

This Investment Policy Statement will be reviewed annually and any changes will be communicated promptly to the investment managers.

APPROVED BY:

Chair

Date