Update!
Over the past ten years, the Foundation's investment performance for our donor funds has produced superior results compared to other endowments, foundations, and community foundations. You can see the details here.
Investment Committee
MCF's Investment Committee, made up of volunteer professionals in the investment industry, guides the investment strategies of the Foundation.
Committee members are:
- Richard Hogan, Senior Vice President, Investments, Merrill Lynch Trust Company
- William J. Patterson (chair), Managing Partner, SPO Partners & Co.
- Christopher J. Podoll, President, ClearLake Advisors LLC
- Daniel L. Skaff, Managing Partner, Sienna Ventures
- Julia W. Sze, CFA, Senior Investment Consultant, Family Wealth Group, Wells Fargo Bank
- Debra L. Wetherby, CEO and Portfolio Manager, Wetherby Asset Management
- Michael Miller, Managing Director, Colonial Consulting, Consultant to the Investment Committee
Investment Strategy
To meet the philanthropic objectives of donor funds, investments can be made in one or more of six professionally managed investment pools:
The objective of the fixed income portfolio is to seek yields that are more durable and usually higher than those available from the money market portfolio. It is suited for funds that can accept the market-value volatility (unrealized gains or losses) associated with fluctuation in interest rates in order to earn a higher level of income over time than is generally available in money market securities.
The investment management fee for this pool is 0.50%.
The money market portfolio contains U.S. Government securities with an average portfolio maturity of less than 90 days, and FDIC insured short-term certificates of deposit. The money market portfolio is designed to make liquid assets available in order to meet annual cash requirements. It also provides a vehicle for donors who would like their contributions to earn income at current money market rates while ensuring the preservation of principal. The rate of income varies depending on short-term interest rates.
This pool is designed to improve on the returns provided by a typical money market vehicle. Its goal is to maximize current income while preserving capital and providing daily liquidity. For greater diversification than typical money market investments, the pool invests in money market as well as short maturity fixed-income securities. It differs from traditional money market funds by investing in longer maturities and lower-rated credits to attempt to generate excess relative returns. Unlike a money market account, the Enhanced Cash Pool's market value will fluctuate.
The investment management fee for this pool is 0.45%.
The objective of the Socially Screened Equity Pool is to produce long-term growth by investing its assets largely in equity securities that have been screened for a variety of social and environmental criteria. The Pool is divided equally between an index strategy, which seeks to track the FTSE4Good US Select Index, and an active manager who is focused on US companies but may also purchase equities of companies domiciled outside of the United States.
The investment fee for the management of this pool is 0.44%.
Within each pool, MCF hires managers who specialize in particular asset classes to ensure that there is superior performance and adequate diversification. The goal is to benefit from a range of expertise from managers in a way that would be impractical and cost-prohibitive for individual investors.
To meet their philanthropic objectives, donors establishing funds can suggest that assets be invested in any proportion in the six investment pools. For example, for no risk to principal, funds are generally invested solely in the money market pool. Endowed funds, whose objective is to preserve the ability of grants to sustain their financial impact over time, typically split their investments by allocating 75% to either of the equity pools and 25% into the fixed income pool. Funds seeking maximum growth over the long term often find it appropriate to allocate up to 100% in the equity pools.
Performance
Performance of investment pools through January 31, 2010 (net of investment fees, with benchmarks provided for comparisons):
| 1 Month | Quarter | 1 Year | 3 Years | 5 Years | 7 Years | 10 Years | |
|---|---|---|---|---|---|---|---|
| Equity Pool | -2.9% | 2.3% | 30.3% | -3.6% | 3.3% | 8.0% | 3.1% |
| Socially Screened Equity Pool |
-2.3% | 4.4% | 29.3% | -9.9% | -1.8% | N/A | N/A |
| S&P 500 | -3.6% | 4.2% | 33.1% | -7.2% | 0.2% | 5.4% | -0.8% |
| Fixed Income Pool | 1.6% | 1.8% | 16.2% | 6.5% | 5.2% | 5.6% | 6.6% |
| Barclays Capital Aggregate | 1.5% | 1.2% | 8.5% | 6.6% | 5.2% | 5.0% | 6.5% |
| Enhanced Cash Pool | 0.5% | 0.7% | 7.6% | 4.2% | N/A | N/A | N/A |
| Money Market Pool | 0.0% | 0.1% | 0.5% | 2.5% | 3.1% | 2.5% | 2.8% |
| 3-mo. Treasury Bill Index | 0.0% | 0.1% | 0.3% | 2.4% | 3.1% | 2.5% | 2.9% |
