The assets of the Fund are to be invested in accordance with the objectives summarized below:
· Optimize return within reasonable and prudent levels of risk; The ‘A’ Fund’s aggregate risk parameters, as measured by portfolio volatility and beta, should be similar to or lower than those of a passive portfolio allocated 60%, plus or minus 10% to the S&P 500 stock index and 40%, plus or minus 10%, to the Barclay’s Aggregate bond index or some other methodology for assessing the risk inherent in the portfolio as may be determined by the Trustees from time to time.
· The fund serves different constituencies in the Diocese that have different investment goals, risk tolerance, and cash flow needs. Some may desire long-term growth of investments with an investment horizon of 10 or more years and may tolerate an acceptable level of risk and volatility. These investors may or may not have cash flow needs. Others may have cash flow (payout) needs and desire a shorter-term horizon of five years or less with little tolerance for volatility (risk). Others may have short term spending needs and will desire full liquidity and minimal risk. The Trustees will attempt to meet all of the needs in the Diocese through the establishment of three separate funds each designed to meet particular goals. Investors may use a combination of these funds at their discretion to meet their individual investment goals.
· The Fund has a unique role in setting aside a portion of the fund for the purpose of providing loans for capital acquisition or improvements by churches in the diocese as well as loans to individual members of the Diocese as approved by the Directors and Standing Committee. This is discussed in more detail below.
· Overall the Fund seeks long-term future growth of investments while incurring an acceptable level of risk. This growth should be sufficient to offset payouts plus normal inflation in order to preserve the purchasing power of the fund in the very long-term. The fund will also seek an allocation strategy to protect it to the extent practical from the potentially severe adverse effects of an extended deflationary environment.
· The Trustees believe that the investment objectives of the Fund can be realized by relying on some external investment experts to manage fund assets within the overall framework of the portfolio as prescribed by the Trustees. Any external investment managers are expected to promptly advise the Trustees of any material change in their investment philosophy, leadership, decision-making structure, or investment personnel.
· The Trustees may invest the assets of the Fund among a diversified selection of equities, equity funds including domestic, international, and emerging markets, real estate funds, bonds, bond funds, balanced funds, money market funds, fixed income, and diocesan real estate loans and cash.