Funds managed by the JCFC are invested based on the requirements for safety (preservation of capital), liquidity, and yield – in that order. The portfolio seeks to earn total returns in excess of the rate of inflation over the long term. The assets of all the endowments are pooled for investment purposes.
Our portfolio is diversified by asset class and sector. Other than State of Israel Bonds, the JCFC has no direct holdings of securities. Quarterly statements are provided by the investment managers and distributed to members of the Investment Committee, which in turn presents a full report at meetings of the Board.
The very long term horizon of the fund dictates the adoption of an asset mix policy favoring a high investment in equities to offset the effects inflation will have on future obligations. along the following parameters:
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The complete investment policy can be found at:https://www.jcfc.ca/wp-content/uploads/2017/10/JCFC-Investment-Policy-September-2016-FINAL-1.pdf
A review of the asset mix occurs at regular intervals to ensure that it remains appropriate to the Foundation’s requirements. It is the Foundation’s policy to rebalance to its target asset allocation on a regular basis so as not to deviate significantly from the return and risk profile of the investment portfolio and in response to perceived market opportunities or risks. The primary mandate of the investment policy is the preservation of the funds entrusted to us, protecting capital when markets are down and seeking positive rates of return above the rate of inflation when markets are up, with a target of 5% average rate of return, net of fees, over time.
Quality considerations include:
- Short term money market securities shall be rated “R1” or equivalent.
- At least 50% of the fixed asset income shall be invested in federal and provincial government and government guaranteed bonds with a credit rating of at least “BBB” or equivalent.
- A minimum of 85% of the Corporate Bond portfolio shall have an “A” rating or better and a maximum of 15% may be invested in bonds rated “BBB”. No single corporate entity will represent more than 10% of the bond portfolio at market value or 5% of the total fund.
- No single equity investment shall represent more than 10% of equity holdings nor shall the total equity issued by a single issuer and its affiliates represent more than 10% of the equity holdings.
- Debt ratings will be from a recognized credit agency. In the case of split ratings or unrated securities, the manager will determine the rating.
If at any time an investment or group of investments within the pooled fund does not conform to the Asset Mix guidelines as outlined above the Investment Committee shall exercise its best judgment as to the action required to correct the situation. If it appears that the situation will be corrected within a reasonably short period, the Investment Committee may elect not to rectify the temporary non-conforming investments.
Performance And Manager Evaluation
Annualized returns, asset allocation and fees are updated regularly by the Investment Committee and presented to the Board.
We regularly benchmark the performance of the endowment portfolio against indices and peers.
A focus on real rate of return: The purchasing powers of today’s dollars erode over time due to inflation. We therefore measure the performance of The Foundation’s portfolio in terms of inflation-adjusted rates of return. Reporting of returns is net of fees.
Investment expenses: The committee must examine the reasonableness of investment expenses on an annual basis. Major categories of cost include:
- Investment managers: 0.5 to 2.0% of assets, depending upon the particulars of the funds we manage, with fees tied to performance.
- The fund manger will provide monthly statements to the Investment Committee and the Board.
- The Investment Committee will report to the Board of the JCFC at each Board meeting and at the Annual General Meeting.
- The JCFC will provide annual reports to fund holders, typically 7 to 8 weeks after the year end. Reports included details of each fund’s beginning and ending values, and contributions and disbursements during the year.
- Annual account balances are reported net of all fees and expenses.
To receive a copy of the JCFC Investment Policy Statement, contact email@example.com or telephone our office at 403.640.2273