Investments

The Socially Responsible Pool is designed to provide sustainable long-term financial returns by investing primarily in equity and fixed income securities of public companies that effectively and prudently govern with respect to their impact on the environment, business practices, contribution to local communities and promotion of diversity and equality in the workplace. Investments in the pool are designed to encourage long-term and meaningful change by influencing corporate behavior as well as promote positive socioeconomic impact, including, but not limited to, mitigating climate change, reducing waste, using clean energy, and employing sound corporate governance and labor practices.

The pool will focus on a Socially Responsible Investment (SRI) approach that incorporates Environmental, Social, Corporate Governance (ESG) criteria into its investment analysis and portfolio construction across a range of asset classes. ESG can be incorporated into the investment process in a variety of ways, including active inclusion of companies with strong corporate social responsibility policies and practices, exclusion or avoidance of companies with poor sustainable track records, and integration of ESG factors into the investment process as part of a wider evaluation of risk and return.

The desired investment objective is a long-term real rate of return on assets that is greater than the assumed rate of inflation as measured by the U.S. Consumer Price Index plus investment-related fees. The target rate of return for the pool has been based upon an analysis of historical returns supplemented with an economic and structural review for each asset class. The DCF Investment Committee realizes that market performance varies and that a real rate of return may not be meaningful during some periods.

The Broad-Based Pool seeks medium- to long-term growth. It is a broadly diversified portfolio offering domestic and international market exposure, investing in large-cap and small-cap securities in developed countries and select emerging markets. The pool will focus on having a strategic overweight to U.S. investments. In addition, the pool will invest in passive (i.e., index) equity strategies to keep costs lower than a traditional all actively managed portfolio.

The desired investment objective is a long-term real rate of return on assets that is greater than the assumed rate of inflation as measured by the U.S. Consumer Price Index plus investment related fees. The target rate of return for the pool has been based upon an analysis of historical returns supplemented with an economic and structural review for each asset class. The DCF Investment Committee realizes that market performance varies and that a real rate of return may not be meaningful during some periods.

The Capital Preservation Pool is composed mostly of laddered Certificates of Deposit (and some cash for even greater liquidity). Certificates of Deposit typically have the highest interest rates among government-insured savings products. Although interest rates are low compared with historical returns, CDs have a place in investment strategies (e.g., for funds established by organizations to support capital projects or other immediate needs).

Laddering involves setting up multiple CDs so that they mature at staggered intervals. The longer the CD’s term – and sometimes the larger the deposit – the higher the rate. So, a CD ladder provides the benefit of a blended interest rate and accessibility.

To serve our funds with short-term investment horizons, DCF has designated an appropriate portion of its total assets to purchase laddered CDs from Janney Montgomery Scott, LLC*. Each CD is FDIC insured.