SPAULDING HIGH SCHOOL UNION DISTRICT #61 CODE: DFA
POLICY MANUAL
1ST Reading: 9/7/00
2ND Reading: 10/2/00
3rd Reading/Adoption: 11/6/00
______________________________________________________________________________
Scholarship Fund
Investment Policy
1.0 STATEMENT OF PURPOSE
The purpose of this policy is to establish
investment guidelines that will allow the investment of the Spaulding High
School Scholarship Fund in such a fashion as to maintain a balance between
capital appreciation and current income for the purpose of providing a self
sustaining scholarship program that will keep pace with the inflationary
pressure placed on post secondary education costs.
2.0 INVESTMENT COMMITTEE
2.1 The Investment Committee will consist of the Spaulding High
School Union District Finance Committee
and Treasurer, and the Barre Supervisory Union Superintendent and Business
Manager.
2.2 The Investment Committee has general charge and direction of
the investment of all money, gifts, mortgages, securities, and the income and
dividends therefrom.
2.3 The Investment Committee is
responsible for recommending to the Spaulding High School Union District Board
of School Directors ( Board) the retention of competent professional investment
manager(s).
2.4 The Investment Committee is
responsible for monitoring professional investment manager(s) performance in
accordance with approved investment objectives.
2.5 The Investment Committee is
responsible for review of the investment policy and submitting recommendations
for change to the Board. Policy review will take place at least annually.
Approved changes will be communicated to professional investment manager(s).
2.6 The Investment Committee will review
for approval any investment vehicle recommended by professional investment
manager(s) that is outside the normally defined parameters of this policy.
2.7 The Investment Committee will receive
monthly Scholarship Fund portfolio performance reports from the professional
investment manager(s). Material change
in performance and actions taken, if any, will be noticed to the Board Chair.
Page 1 of 4
SPAULDING HIGH SCHOOL UNION DISTRICT #61 CODE: DFA
POLICY MANUAL
_____________________________________________________________________________________
2.8 The Investment Committee will review portfolio performance
at least semi-annually with the full Board.
2.9 The Investment Committee will review this policy on an annual basis and make recommendations to the full
board for changes as needed.
2.10 The Investment Committee shall, at all times, have an
investment manager. The Board will appoint the investment manager and select
the institution to act as custodian.
3.0 INVESTMENT MANAGER
3.1 The Investment Manager appointed by the Board shall operate on
a fully discretionary basis; the purchases and sales of securities may be
executed without prior approval subject to the provisions of this Investment
Policy Statement.
3.2 The Investment Manager will invest the assets in accordance
with the investment policy, objectives, and guidelines as stated herein.
3.3 It is intended that
these objectives and guidelines provide meaningful guidance in the management
of the SHS Scholarship Fund and not be overly restrictive given changing
economic, business and investment market conditions.
4.0 INVESTMENT
OBJECTIVES
4.1 The assets of the Spaulding High School
Scholarship Fund should be invested in a manner so as to grow the overall fund
to keep pace with the increasing expenses for college education and at the same
time, allow for reasonable distributions for annual scholarship awards. Specifically, the longer-term objective
would be to distribute, in the spring of each year, a percent of the value of
the fund on December 31 of the preceding year ( That percentage would be
computed by subtracting the annual average percentage increase in the full
tuition expenses for the preceding year, based on an inflation index generally
accepted in the field of post secondary education, from the annual percentage
increase in the fund value at the end of each proceeding year.) The resulting amount would serve as a
quideline amount rather than arbitrary amount for scholarships for that
year. Should such amount be
insufficient for scholarship funding for any particular year due either to
excessive increases in tuition fees or lower than anticipated investment
performance, the investment committee could, at its discretion, increase the
amount of the distribution providing that the cumulative increase of the fund
since inception was in line with the cumulative increase in tuition expenses.
Page
2 of 4
SPAULDING HIGH SCHOOL UNION DISTRICT #61 CODE: DFA
POLICY MANUAL
_____________________________________________________________________________________
4.2
Since
annual returns cannot be predicted with any degree of certainty and time is
required to grow the fund assets, distributions in the short term will be
limited to $100,000 in 2000, 2001 and 2002.
Early in 2003 the investment
committee will review investment performance through December 31, 2002, consult
with the investment manager and decide if moving to an annual distribution
computed in accordance with 4.1 above would be prudent in light of the information
available at that time.
5.0 INVESTMENT GUIDELINES
5.1
The
investment manager shall be a Registered Investment Advisor under the laws of
the State of Vermont and shall be compensated based upon the net value of the
fund after any distributions at the end of each calendar quarter.
5.2
The
investment manager shall seek to minimize volatility in the total value of the
fund by investing in assets using strategic asset allocation in a
well-diversified portfolio consistent with the investment objective in Section
4 above. The investment manager will
recognize that market timing is inappropriate for long term investing.
5.3
The
investment manager may use a combination of mutual funds and individual
securities including fixed income investments but shall refrain from investing
more than 5% of the fund’s assets in any individual security or more than 5% in
the outstanding investment in any corporation.
The investment manager shall also be prohibited from using options, short
sales, derivatives or any other investment vehicle or strategy, which would
expose the assets of the fund to unnecessary risk
6.0 COMMUNICATIONS
6.1 Investment
Manager Communications with the Committee:
6.1.1 Provide
monthly portfolio valuations.
6.1.2 Meet
quarterly with the Investment Committee.
a.
Review
past investment performance, evaluate the current investment outlook, and
discuss investment strategy.
b.
Provide
information regarding major changes in investment policy that may result in
major investment strategy changes.
c.
Review
any significant changes in management, research, personnel or ownership within
the investment management firm.
Page 3 of 4
SPAULDING HIGH SCHOOL UNION DISTRICT #61 CODE: DFA
POLICY MANUAL
_____________________________________________________________________________________
6.1.3 Other communications that the Investment Manager feels
are necessary to facilitate achievement of the SHS Scholarship’s objectives and
goals.
6.2 Committee
Communications with Investment Manager
6.2.1 On a timely basis, provide the Investment Manager with
revisions of the master Investment Policy.
6.2.2 Meet
quarterly with the Investment Manager:
a.
Review
and discuss any modifications and changes to the Plan’s investment objectives,
goals, and guidelines.
7.0 SUMMARY
7.1 All investments are to be made for the benefit of the SHS
Scholarship Fund in a manner deemed prudent and acceptable for such a Fund.
7.2 It is expected that the Investment Manager will manage the
assets so that the results will meet the objectives and goals as set forth in
this Statement.
7.3 This Statement is intended to be used as a guideline rather
than a rigid statement of policy from which there can be no deviation. However, it is anticipated that any
important deviation and the reasons therefore will be brought to the attention
of the Committee by the Investment Manager on a timely basis.
Disk H
Page 4 of 4