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Investment Strategy and Performance

GivingInvestment Strategy and Performance

Achieve a return on your financial and charitable goals. MCF's investment strategy is designed to achieve superior returns while moderating risk, with the goal of enabling our donors to maximize their philanthropic giving.

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:

  • Ann P. Barber, Managing Director, Hall Capital LLC
  • Richard Hogan, Managing Director, Investments, Merrill Lynch
  • Kurt Mobley, Partner, SPO Partners & Co. 
  • Thomas Reinhart, Retired Partner of TPG Capital
  • Brian S. Schneider, Managing Director, Medley Partners Management, LLC
  • Patricia Shepard, Chief Operating Officer, Elan Management LLC
  • Daniel L. Skaff (chair), President, One PacificCoast Bank
  • Julia W. Sze, CFA, Managing Director, Sonen Capital, LLC
  • 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:

 
Equity Pool
 
Socially Screened Equity Pool

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%.

 
Fixed Income Pool

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, changes in credit quality, and currency fluctuations 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%.

Marin Community Foundation Fixed Income Investment Managers:

  • Colchester Global Investors
  • Dodge & Cox Funds
  • Franklin Templeton Investments
  • iShares
  • Loomis, Sayles & Company, L.P.
  • Mondrian Investment Partners Limited
  • Oaktree Capital Management, L.P.
  • Payden Short Bond Fund
  • PIMCO
  • Seix Investment Advisors LLC
  • The Vanguard Group, Inc. 

 
Enhanced Cash Pool
PIMCO Short-Term Fund

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%.

 
Money Market Pool

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.

 
Marin Community Foundation Loan Fund Investment Pool

Donors at MCF can invest a portion of the assets in their funds into the MCF Loan Fund, a revolving fund that provides short- and long-term financing for a wide range of important nonprofit endeavors in Marin, including affordable housing, environmental protection, and arts education, among many others. This option enables donors to use their charitable assets twice — as loans to community groups, and again as grants from their funds at the end of the investment period. Rates of return vary according to the length of the investment period. Donors who choose this option will assume risk in proportion to their percentage of the overall Loan Fund. This investment option is available except upon the infrequent occasions when the Loan Fund has reached its capacity.

For more information on investing in the MCF Loan Fund, click here.

There is no investment fee associated with this investment option.

 

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 March 31, 2014 (net of investment fees, with benchmarks provided for comparisons):

  1 Month Quarter 1 Year 3 Years 5 Years 7 Years 10 Years
Equity Pool -0.1% 1.5% 14.1% 8.2% 15.2% 4.6% 6.6%
70% MSCI ACWI/30% HFRI Fund of Funds* 0.0% 0.8% 13.2% 6.8% 13.9% 3.0% 6.0%
Socially Screened
Equity Pool
0.8% 2.6% 23.4% 13.1% 17.0% 3.5% 4.6%
S&P 500 0.8% 1.8% 21.9% 14.7% 21.2% 6.3% 7.4%
Fixed Income Pool 0.0% 1.7% -0.5% 4.4% 7.3% 5.5% 5.0%
Barclays Capital Aggregate -0.2% 1.8% -0.1% 3.8% 4.8% 5.0% 4.5%
Enhanced Cash Pool 0.2% 0.5% 1.0% 1.5% 2.7% 2.6% N/A
Money Market Pool 0.0% 0.0% 0.1% 0.1% 0.2% 1.0% 1.7%
U.S. T-Bills 0.0% 0.0% 0.1% 0.1% 0.2% 1.0% 1.7%
MCF Loan Fund Investment Pool
1 year term 0.13% 0.38% 1.5% 1.5% N/A N/A N/A
2 year term 0.15% 0.44% 1.75% 1.75% N/A N/A N/A
3 year term 0.17% 0.5% 2.0% 2.0% N/A N/A N/A
4 year term 0.21% 0.63% 2.5% 2.5% N/A N/A N/A

*MSCI ACWI - Morgan Stanley Capital International All Country World Index (a weighted index designed to provide a broad measure of equity-  market performance throughout the world, comprised of stocks from both developed and emerging markets)

HFRI Fund of Funds – Hedge Fund Research, Inc. Fund of Funds Composite Index (an index that tracks the performance of hedge fund of fund managers)

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Your Contact for MCF's Investment Strategy

Chief Financial and Operating Officer

Sid Hartman

Chief Financial and Operating Officer

415.464.2513

"We like everything about the Marin Community Foundation. Among many aspects are the easy recordkeeping of our giving, helpful suggestions about community philanthropic needs, and meaningful symposia. We've met many interesting community people, both donors and recipients."

Deb and Art Ablin
Donors at MCF since 2005