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Endowment Overview

Financial Objective

The principle financial objective is that:

The real purchasing power of the Endowment principal should be preserved, and if possible enhanced, to help ensure the University's financial future. The productivity of the Endowment must strike a balance between the preservation of principal in real terms for perpetuity and support of a spending policy that sustains the educational mission of the University.

Investment Objectives

While recognizing the ongoing requirement for reliable income flow from the Endowment to support University operations, the long-term horizon characteristic of endowment investment is also acknowledged. The review of the Endowment's performance reflects a long-term focus.

To monitor the effectiveness of the investment strategy of the Endowment, the performance of the portfolio is reviewed periodically against two investment objectives (listed in order of priority):

  1. The total rate of return, net of investment management fees, is compared to an expected real return of 5% per annum (net of inflation), with a goal of exceeding the expected real return over longer periods of time.
  2. The total rate of return, net of investment management fees, is compared with the return from the investment policy asset allocation benchmark index ("Policy Portfolio"), with a goal of exceeding the benchmark return over rolling three to five year periods.

Note: The returns of other endowment funds, as measured in the annual endowment study conducted by NACUBO (National Association of College and University Business Officers), should be considered as a factor in the review of asset allocation policy, but not as an investment objective.

Spending Objective

The Endowment will transfer to the University's Operating Fund annually 5% of the twelve quarters moving average market value of the Endowment. On a per unit basis, the transfer will result in a minimum increase of 0% and a maximum increase of 10% over the prior year's payout.

Target Asset Allocation

Equity

Asset Class Policy Target
Developed Mkt Equity 13 %
Hedged Equity 7 %
Emerging Mkt Equity 8 %
Hedged Emg Mkt Equity 4 %

Absolute Return

Asset Class Policy Target
Absolute Return 18 %

Natural Resources

Asset Class Policy Target
Natural Resource Equity 4 %
Commodities 5 %

Fixed Income

Asset Class Policy Target
US Treasuries 10 %
Developed Mkt Credit 4 %
Emg Mkt Credit - Local 3 %
Emg Mkt Credit - External 2 %

Private Assets

Asset Class Policy Target
Private Equity 14 %
Real Estate 4 %
Oil & Gas 2 %

CASH

Asset Class Policy Target
Cash 2 %