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Ocean Shores Library
FOUNDATION

Investment Policy Library Foundation

Policy Adopted December 15, 2021:

Objective

This investment policy is intended to assist the Foundation Board (or investment committee) with effectively selecting, monitoring and evaluating the investment menu for the Ocean Shores Library Foundation. Foundation investments are intended to preserve principle based on annual CPI changes while investing in a manner that a prudent individual would construe to be appropriate for long-term growth through managed allocation and diversification. Fund performance will be evaluated based on annual returns net of costs, in concert with long-term revenue objectives.

Permitted Investment Vehicles

The portfolio may purchase and hold:

  • Individual equity securities traded on U.S. exchanges.
  • U.S. dollar denominated fixed income securities.
  • Real Estate Investment Trust (REITs) traded on U.S. equity exchanges.
  • Diversified mutual funds that invest in the equity and fixed income securities.
  • Diversified exchange trades funds (ETFs) that invest in the equity and fixed income securities.

Excluded Investment Vehicles:

  • Derivatives
  • Futures
  • Options
  • Commodities
  • Any strategy which employs leverage.

 

Portfolio Guidelines

Cash Equivalents

Money market funds investing in government and agency debt, repurchase agreements and commercial paper rated A1/P1.

Fixed Income

Minimize losses in volatile interest rate climate.

Diversification

Diversification should be maintained to guard against default, credit and sector risks.

Permitted Investments:

  • Direct U.S. Government debt issues.
  • Direct U.S. Agency or Instrumentality debt issues.
  • Direct Corporate debt issues with either a credit rating of A or better by Moody’s or Standard & Poors at the time of purchase.
  • At least 30% of the fixed income allocation will be invested in direct U.S. Government or Agency obligations (or funds holding only such securities) and FDIC fully insured CDs.
  • Up to 30% of the fixed income allocation may be held in high yield bond or bank loan mutual or exchange traded funds provided the underlying investment vehicle is liquid and broadly diversified.

Equity

Diversification

Diversification should be maintained. Excessive business sector concentration should be avoided and no more than 5% of portfolio market value at time of purchase shall be held in the stock of one company. Permitted Investments Securities traded on major U.S. exchanges

  • Up to 30% of the equity allocation may be held in international stocks through mutual or exchange traded funds provided the underlying investment vehicle is liquid and broadly diversified.

Asset Allocation

Target Permitted Range Current Allocation
Equities 40 – 60% 50%
Fixed Income 40 – 60% 50%
Cash Equivalents 0 – 3% 1.8%

Performance Benchmarks

  • Equities: S&P 500 Index
  • Fixed Income: Merrill Lynch 1-10 year Government/Corporate Index
  • Total Portfolio: 50% S&P 500; 50% Merrill Lynch 1-10 year Government/Corporate Index

Investment Performance Reviews

Annual reviews of returns net of costs with respect to CPI.

Investment Performance

The Foundation Board (or investment committee) will review the Ocean Shore Library Foundation investment policy at least annually and discuss any changes that seem desirable because of changes in the foundation’s goals or changes in market conditions. The investment policy can only be changed with the affirmative vote of a majority of the foundation board.

Investment Reporting

Performance information is to be provided to the foundation board as part of the monthly financial report.

 

Ocean Shores Library Foundation: Donations | Strategic Plan | Investment Policy


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