Investment Portfolio Policy and Procedures
Visalia Wesley Foundation, Inc.
Policy And Procedures
The Investment Policy of the Visalia Wesley Foundation, Inc. (The Foundation) is to establish investment accounts, investment options and risk parameters, manage for best acceptable return, determine review schedules, protect against theft, fraud or collusion, insure proper accounting and establish authority and accountability.
The purpose of this document is to set forth the basis upon which the Foundation, through its Investment Sub Committee (The Committee) shall discharge its responsibilities with respect to the preservation, maintenance and enhancement of Foundation assets.
The Committee shall consist of not less than four (4) members of the Foundation Board of Directors (The Board). The President of the Board shall appoint the members of the Committee for a one year term with no restrictions on successive terms except as Board directorship may be limited by Foundation By-Laws.
The Committee is to follow such investment policies and procedures as the Board prescribes from time to time. Foundation personnel, should such be available, may serve the needs of the Committee as agreed to by the President of the Board.
The Board, through the Committee, shall seek to achieve the following objectives in the following order of priority:
A. The preservation of assets.
B. The increase in capital value of assets.
Investment Philosophy (Guidelines):
Investment objectives call for a management philosophy that accommodates the occurrence of all those events which might be considered reasonable and probable and which avoids extreme positions or opportunistic styles. Prudent investment shall apply regarding all investment decisions.
Investment accounts will be established and maintained with reputable brokerage investment companies and banks. At least quarterly or more often if needed, the Committee will review the investment portfolio to analyze performance and determine if changes should be recommended to the Board.
In addition, at least semi-annually and more often if needed, the Committee will meet with brokerage investment representatives/agents to review and determine if changes should be made in the portfolio. Changes in brokerage investment companies or banks or in the investment program itself shall be with prior approval of the Board.
To the extent possible, all deposits shall be kept with brokerage investment companies and banks having full service operations within the State of California. Persons authorized to establish investment accounts or bank depository relationships shall posses appropriate signature authority as delegated by the Board.
Funds received or on hand and not needed for current operations or which are intended for longer term projects will be accounted for and deposited in appropriate investment account(s) within ten (10) calendar days.
The investment portfolio shall be diversified both as to fixed income and equity holdings. The purpose of diversification is to provide reasonable assurance that no single investment or class of investments will have a disproportionate or significant impact on the total portfolio.
The purpose of fixed income investments is to provide a more predictable and dependable source of income, to reduce the variability of the total portfolio market value and generally be held to their stated maturity date.
The purpose of equity investments shall be to provide capital appreciation of principal with recognition that this requires the assumption of greater market variability and risk of loss than in fixed income investments.
An integral part of the investment philosophy shall be to maintain flexibility and to invest relatively more heavily in cash equivalents during periods when their risk/return characteristics appear more attractive than other investments.
The following investment constraints are stated for general guidance. Exceptions thereto for individual investments may be approved by the Board upon recommendation of the Committee. Such constraints shall be reviewed at least annually by the Committee to determine the desirability of their continuance with any recommendation for change presented to the Board for its approval or rejection:
A. Investment accounts approved for use are to be conservative in nature. The acceptable level of risk tolerance is to be in the “low” range. When available for certain investments, i.e., Certificates of Deposits, etc., government backed guarantees should be in place. Stocks within the investment portfolio are to be rated as “high” quality overall and investments bonds are to be rated not less than “A3” by Moody’s or “A” by Standard & Poor’s.
B. The Foundation shall not purchase commodities, private placements, letter stock nor shall it provide venture capital. In addition, the Foundation shall not engage in short sales or make purchases on margin. Purchases of real estate may be made upon approval of a majority of the Foundation Directors. Notwithstanding that the foregoing investments may not be purchased, in the event that any such investment is acquired by gift or devise, then the Foundation may hold such investments in accordance with the terms of the gift or devise and until such time as the investment may be disposed of in a prudent manner. Realestate gifts may be accepted or rejected by the Board as provided for in the Foundation’s Gift Acceptance Policy. Purchases of real estate may be made upon approval of a majority of the Foundation Directors.
C. Equity investments, including stocks and mutual funds, shall not at anytime exceed fifty percent (50%) of the Foundation’s total investments, measured at current market value. Common stock investments may be in issues which pay dividends, but are not restricted to same. No company’s stock shall comprise more than ten percent (10%) of the total assets of the Foundation based on current market value, if that stock is purchased through the Foundation. For purposes of applying the aforementioned guidelines, investments acquired by gift or demise may be excluded at the discretion of the Board and held in accordance with the terms of the gift or demise until such time as it may be disposed of in a prudent manner.
D. Bonds purchased will have staggered maturity dates. No investment shall exceed a ten (10) year maturity from the date of purchase.
E. The Board shall review and give prior approval of any recommendation or action by any authorized agent of the Foundation or the Committee regarding changes in the equity portfolio.
Approved by the Board of Directors: January 12, 2009