The investment portfolio of Hall Memorial Library was established to provide supplemental
income to meet present and future budget goals.
Statement of Responsibilities
The Trustees of Hall
Memorial Library will determine appropriateness of investment policy
presently and in the future.Changes to
asset allocation, investment philosophy, investment risk and the general
purpose of the investment portfolio will be determined by the Trustees. They will determine the
effectiveness of the investment manager based on criteria stated in this
The investment manager will be responsible for the execution
of the investment policy.In addition,
the investment manager will be responsible for day to day management of
portfolio assets including deciding on specific investment selection, and
timing of purchases and sales.The
investment manager will provide the finance committee with market and economic
data and well as forecasts for review on a agreed upon schedule.
Investment Goals and Objectives
The investment goals of the Hall Memorial Library investment portfolio are as follows:
protect and preserve the principle amount, minimizing risk by:
oHolding value in down markets.
oAvoiding speculative issues.
oEmphasizing stability of returns.
provide increasing income from the investment portfolio, without invading
manage for long term results. Neither high turnover nor emphasis on the short
term are encouraged.
meet or exceed the rate of return of a balanced market index comprised of the
S&P 500 stock index, Lehman Government/Corporate bond index, and the U.S.
Treasury Bills in similar proportion to the asset allocation policy of the
meet or exceed the risk-free rate of return (as represented by the U.S.
generate a current income which allows the Library to withdraw interest and
meet or exceed the inflation rate (as measured by the Consumer Price Index) by
300 basis points per year on average.
●Prudent Man Rule:Investments are to be made consistent with
the safeguards and diversity to which a prudent investor would adhere,
exercising judgment and care, under the circumstances prevailing, which men of
ordinary prudence would employ in the management of their own affairs not in
regard to speculation, but to he permanent disposition of their funds, considering
both income and safety of capital.
●Liquidity:The investment portfolio’s cash flow will be
monitored on a regular basis by the investment manager, and sufficient
liquidity should be maintained to fund payment outflows. When withdrawals
become necessary, the Finance Committee will notify the investment manager as
far in advance as possible to allow sufficient time to build up necessary
liquid reserves.The investment manager
will be expected to review the cash flow requirements with the Finance Committee
as stated in the investment policy.
●Volatility:Consistent with the desire for adequate
diversification, investment policy for the investment portfolio is based on the
assumption that the volatility of the portfolio will be similar to that of the
market.Consequently, it is expected
that the volatility of the total portfolio, in aggregate, will be reasonably
close to the volatility of a balanced market index weighted to match the actual
asset mix of the investment portfolio.
Asset Allocation Guidelines
It shall be the policy of the investment portfolio to invest
the assets in accordance with the maximum and minimum range for each asset
category as stated below:
●Types of Equity Securities:Equity securities shall mean mutual funds and
ETF’s selected from the expanded approved mutual fund list or individual stocks
from the S&P 500.
●Diversification:The equity portfolio should be well
diversified to avoid undue exposure to any single economic sector, industry
group, mutual fund or individual security.
●Capitalization:Mutual funds or individual securities will
comprise of market capitalizations consistent with small, mid and large cap
●Security Concentration:It is expected that the equity component of
the portfolio will be diversified across economic sectors, with no sector
comprising more than 25% of the portfolio.
Inv. Grade Corp.
●Types of Securities:Funds not invested in cash equivalents
(securities maturing in one year or less) shall be invested entirely in
marketable debt securities issued by either the United States Government, or
agencies of the United States Government, domestic corporations, including
industrials and utilities, and domestic banks and other United States financial
●Quality:The quality of fixed income securities shall
range from high yield or low rated fixed income investments to fixed income
securities guaranteed by the United States Government.
●Maturity:The maturity of fixed income securities will
be proactively managed based on current and future analysis of interest rate
environment.Accordingly maturities will
range from short term of 1 year or less to longer term not exceeding 15 years.
Categories of investments which are not eligible for
investment without prior approval of the (Entity).
securities listed outside the United States
or restricted stock
Investment Performance Review and Evaluation
results will be measured on a quarterly, semi-annual, and / or annual basis.
fund performance will be measured against a balanced index composed of commonly
accepted benchmarks weighted to match the long-term asset allocation policy of
the investment portfolio.
investment performance of the total portfolio and equity and fixed income
segments (both in terms of return and risk) will be measured against commonly
fund performance will be compared to a representative universe of
professionally managed funds with the percentage of equity, fixed income, and
cash equivalents to be indicative of the long-term asset allocation policy of
the investment portfolio.
investment manager has full discretion within the above guidelines.
investment manager shall report to the Trustees
on all pertinent details including:
oName and quantity of each security purchased or
sold, with the purchase price and transaction date;
oan analysis of each security, of its
descriptions, percentage of total portfolio, purchase date, quantity, average
cost basis, current market value. unrealized gain or loss, and indicates annual
income and yield (%) at market;
oan analysis for the entire portfolio of the
current asset allocation by investment category (equities, fixed –income
securities and cash reserves).
at least (quarterly, semi-annually, annually) with the (Entity)or as requested.
past performance, evaluate the current investment outlook, and discuss
information regarding major changes in investment policy that may result in
major investment strategy changes.
any significant changes in management, research, personnel or ownership within
investment management firm.
communications that the investment manager feels are necessary to facilitate
achievement of the investment portfolio’s objectives and goals.
Investment manager will be available for telephone
consultation on a reasonable basis.