In considering the investment of cash in securities, protection of the principal amount must be a consideration. It is therefore paramount that the direct purchase and ownership of individual issues of bonds and common and/or preferred stocks, be prohibited except as permitted by the Board of Control Sale of Stock policy, and subject to Sections 18 and 19 of Article IX of the Constitution of the State of Michigan. Investment decisions cannot be made on a unilateral basis. It is required that University funds be invested in a diversity of instruments, with multiple independent money managers using a range of investment styles. An independent investment consultant must be retained to assist in the selection and performance evaluation of the investment managers. A campus investment group, that includes representation from the University Senate, will advise the Treasurer on investment decisions and review the performance of the investment consultant and the investment managers.
Investments are authorized in all instruments included in the General University Investment Policy. In addition, commingled equity and bond funds such as mutual funds, trust funds and bond funds are authorized.
The target allocation deemed appropriate for the Employee Retirement Health Care Plan, based on the underlying needs and circumstances is 80% equities and 20% fixed income. A range of plus or minus 5% is an acceptable degree of variation in the equity non-equity asset allocation.
| History | ||
| Adopted: | 09/24/1993 |