Investments

Charitable funds entrusted to the DCF can be invested in one or two of four pools: Flagship Long-Term Pool, Broad-Based Index Pool, Socially Responsible Pool and Capital Preservation Pool. 

Performance by Pool (June 30, 2021)

About Investment Pools

The Flagship Long-Term Pool targets 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 emerging markets with an allocation to alternative investments.

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 and the sustained spend rate determined by the DCF Board of Directors. 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 Investment Committee realizes that market performance varies and that a real rate of return may not be meaningful during some periods.

Asset Class Range Target Benchmark/Index
U.S. Equity 25-45% 35% Russell 3000
Non-U.S. Equity 15-35% 25% MSCI All Country World ex-U.S.
Alternatives 10-25% 15% HFRI Funds-of-Funds Composite
Fixed Income 10-30% 20% Bloomberg Barclays U.S. Aggregate
Real Estate 0-10% 5% NCREIF Property

 

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.

Asset Class Range Target Benchmark/Index
U.S. Equity 30-50% 40% Russell 3000
Global Equity/Non-U.S. Equity 15-35% 25% MSC World /MSCI ACWI ex-U.S./MSCI EAFE
Emerging Markets 0-10% 5% MSCI Emerging Markets
Fixed Income 20-40% 30% Bloomberg Barclays U.S. Aggregate

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.

Asset Class Range Target Benchmark/Index
U.S. Equity 45-55% 50% Russell 3000
Non-U.S. Equity 5-15% 10% MSCI EAFE
Emerging Markets 0-5% 0% MSCI Emerging Markets
Fixed Income 35-45% 40% Bloomberg Barclays U.S. Aggregate

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.

Asset Class Range Target Benchmark/Index
Cash and Equivalents 0-100% 0% BofA ML 3-Month T-Bill
Short Term U.S. Government Debt 0-100% 100% BofA ML 3-Month T-Bill

Policies and Forms

DCF Investments are subject to terms and conditions.

If you have any questions,

please feel free to reach out to us.