Investments Objectives The objectives of the Foundation’s investment portfolio are to produce a long-term rate of return that provides sufficient funds to meet the Foundation’s required grantmaking target, cover all reasonable and necessary expenses and compensate for inflation. The assets are invested in a well-diversified global investment portfolio that accepts reasonable risk consistent with desired return. Benchmark The Foundation has adopted a globally diversified benchmark, the Multiple Market Index (MMI), comprised of stocks, bonds, real estate and private markets. The actual portfolio’s risk and return is measured against this benchmark over full market cycles. The Foundation’s benchmark composition and ranges are shown below:
Source: UBS Global Asset Management
Expected long term rate of return and risk The expected long-term rate of return for the benchmark is between 7.0% and 7.5% per annum with expected annual inflation of 2.5%. The estimated long-term risk level for the benchmark is 10.4% (annualized standard deviation). This is considered a moderate risk level and appropriate for the expected return. The Foundation’s actual rate of return and risk will vary from the benchmark depending on market conditions and active investment management strategies. Investment market conditions Each year in its Annual Report, the Foundation provides observations regarding the past year’s market conditions, the Foundation’s investment strategy and the portfolio’s performance results. Copies of the Foundation’s Annual Reports can be found under Library & Resources. |
