Policies/Objectives

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Statement of Policies and Objectives For the CBA-ACI Student Investment

INVESTMENT OBJECTIVES

A. Rate of Return Requirements

This fund will be invested to maximize total return consistent with prudent risk
limits and adhering to the general investment philosophies and policies of the
university. The long- term annualized ROR objective for the total fund is inflation
plus 6 percent.

The total return strategy ensures that investment objectives will be met with the
intent of maximizing the long-term return of the entire portfolio, both from
market value increases (realized and unrealized capital appreciation) and from
current yield (dividends and interest).

B. Risk Tolerance

The funds will be actively managed in a manner that will limit downside risk. The
asset allocation, investment structure, and guidelines are established to ensure
adequate diversification to reduce volatility.

 
INVESTMENT POLICIES

A. Investment Constraints 

1.Time Horizon: The investment horizon for this fund, in being consistent
with the University's endowment, will be in perpetuity. 
2.Laws and Regulations: The fund will be managed in accordance with the
Prudent Man Rule which is a flexible legal investment standard that allows
the fund fiduciary to purchase securities that a prudent man of discretion
and intelligence would choose to earn a reasonable income and preserve the
principal. 

B. Asset Allocations 

Equity

1.Our long-term strategic target is 85% with an allowable short-term range of
65-90% 
2.U.S. equities have a long-term target of 75% with an allowable range of
65-95% 
3.International equities will have a long-term target of 5% with an allowable
range of 0-10% 

Fixed Income

1.Our long-term strategic target is 10% with an allowable short-term range of
0-30% 
2.U.S. Fixed income have a long-term target of 20% with an allowable range
of 0-30% 
3.Global Fixed income have a long-term of 10% with an allowable range of
0-10% 

C. Cash

Our long-term strategic target is 0% with an allowable short-term range of 0-10%.

D. Investment Restrictions

Due to the nature of the risk involved we prohibit the following:

1.Purchasing and selling commodities 
2.Selling securities short 
3.Purchasing securities on margin 

There shall be no more than 35% of the equity portion invested in a single
industry.

Investments in a single corporation should not comprise more than 20% of the
portfolio.

We will show an adverse inclination toward investing in low grade fixed income.

The CBA-ACI fund will adhere to the standards and restrictions called for under
the
University of Notre Dame's Social Responsibility Policy.

E. Benchmarks

The fund will compare its performance to that of the market using such
benchmarks as the S & P 500 or Dow-Jones Industrial Average for the equity
portion and an appropriate index the income portion of the portfolio in order to
relate the funds return performance to the market's performance.
 

 

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Last modified: February 21, 2001