Q1 2021 Investment Performance Webinar
We build investment strategies that increase the impact of your charitable gift and create sustainable growth. Assets are invested based on specific fund type to maximize return and strengthen your grantmaking power.
The Endowment Portfolio maintains value and generates revenue over time to serve the community in perpetuity. Funds are invested in a diverse, carefully-defined set of asset classes to mitigate risk and provide long term total return. Endowment funds create a lasting legacy for donors that want to have an impact in San Diego today, and for future generations.
*Includes Principal Only.
**The Foundation’s Policy Index is a composite of indexes reflecting our diversified portfolio, specifically: 40% MSCI ACWI IMI NR, 15% BBgBarc US Universal TR, 15% HFRI Fund of Fund Composite Index, 15% Custom Private Equity Index, 6% Custom Real Asset Index, 9% NCREIF ODCE Net.
The San Diego Foundation Sustainable Endowment and Non-Endowment portfolio are invested in global stocks and bonds, structured for capital appreciation and long-term total return. Portfolio investment managers conduct positive and negative screening on companies to ensure strong scores on Environmental, Social and Governance (ESG) criteria.* The strategy avoids companies directly involved in extracting, processing or transporting coal, oil or natural gas.
The Foundation’s Endowment distribution allocation policy is to disburse 5% annually, based upon endowment principal market value over the last 36 months. These calculations are made on a monthly basis. If the market value of the endowment principal of any fund, at the end of each month, is less than the initial value of all the contributions made to endowment principal, then distributions will be limited to interest and dividends received.
*ESG (Environmental, Social and Governance) criteria reflect a company’s impact (positive or negative) on the Earth and on people and society, as well as corporate and board oversight.
Sustainable Endowment Portfolio
*Includes Principal Only.
**The Policy Index is a custom benchmark designed to measure the performance of the portfolio. The current Policy Index is 70% Russell 3000 and 30% Bloomberg Barclays Aggregate Index. On 1/1/20 the Policy Index changed to reflect a global mandate in equities. Past performance is shown for illustrative purposes and is not indicative of future results.
The combined investment manager fees for the Sustainable Endowment and Non-Endowment Portfolios will be 0.59%. The custodial and reporting fee for Sustainable Endowment will be 0.45%. The custodial and reporting fee for Sustainable Non-Endowment will be 0.40%.
Sustainable Endowment Portfolio Investment Managers
Funding available for each asset classification is invested by professional money managers hired by The Foundation through a competitive process. The investment performance of each money manager is monitored by an independent investment consultant retained by The Foundation.
RBC Fossil Fuel Free Global Equity: The strategy employs a bottom-up approach, looking for companies it believes have winning business models, growing and expanding businesses, and importantly strong management and ESG principles. It uses exclusionary screens for fossil fuels, while looking for active management of environmental concerns as well.
Domini Impact Bond Fund: The strategy, sub-advised by Wellington Management Company, constructs an intermediate fixed-income portfolio while incorporating social and environmental standards. The strategy also uses exclusionary screening to eliminate companies with exposure to fossil fuels.
Sustainable Non-Endowment Portfolio
Portfolio Investment returns are presented net of money management fees, but do not include TSDF fees. Custodial & reporting fees are netted against earnings reported via the fund statement. Investment performance of individual funds may vary from the total portfolio return due to the timing of contributions and grants. The combined investment manager fees for the Sustainable Endowment and Non-Endowment Portfolios will be 0.59%. The custodial and reporting fee for Sustainable Endowment will be 0.45%. The custodial and reporting fee for Sustainable Non-Endowment will be 0.40%.
Long-Term Non-Endowment Portfolio
The Long-Term Non-Endowment Portfolio maximizes capital appreciation and income to grow grantmaking beyond the initial investment. Leveraging higher levels of investment risks to get market-like returns, this is best for donors that intend to grant funds over a long period of time.
*The goal of this portfolio is long-term total growth.
**The Foundation’s Policy Index for Long Term Pool is 50% MSCI ACWI IMI (net), 20% BBgBarc US Universal Bond Index, 20% HFRI FOF Index, 10%
Custom Real Assets Index. Fixed Income Index: 100% BBgBarc US Universal Bond Index.
Medium-Term Non-Endowment Portfolio
The Medium-Term Non-Endowment Portfolio incorporates opportunities for capital appreciation to enhance your investment’s rate of return and allow for more grantmaking. It tolerates moderate levels of risk. This portfolio is recommended for donors with a granting time horizon of two to five years.
*The Foundation’s Policy Index for Medium Term Portfolio is 30% MSCI ACWI IMI (net), 45% BBgBarc US Universal Bond Index, 20% BofA ML 1-3 Yr
Treasury, 5% 91-Day T-Bills.
Intermediate-Term Non-Endowment Portfolio
Given the unprecedented events of 2020 and historically low interest rates, The San Diego Foundation introduced the Intermediate-Term Non-Endowment Portfolio on January 1, 2021. This portfolio adapts to current market trends and strengthens the giving potential for donors traditionally invested in the Short-Term Non-Endowment Portfolio, which is currently yielding zero.
This Intermediate-Term Portfolio goal is to give donors more opportunities to grant to their favorite nonprofits by generating a yield that can partially or fully offset The San Diego Foundation fund fees by investing 100% in fixed income funds. It carries risk, primarily in the form of interest rate risk and credit risk. Principal volatility should be expected, though the range of potential outcomes is narrower than the Medium- or Long-Term Portfolios managed by The San Diego Foundation.
This portfolio is recommended for donors with a granting time horizon of two years or greater.
*The asset allocation shown on the left pie chart demonstrates the March 31, 2021 portfolio allocation. This may change over time based on short-term U.S. interest rates and market conditions.
Short-Term Non-Endowment Portfolio
The Short-Term Non-Endowment Portfolio emphasizes capital preservation to return a moderate yield. This low-risk option does not significantly grow your investment and is best if you plan to grant funds immediately. This portfolio is recommended for donors with a granting time horizon of less than two years.
*The goal of this portfolio is to provide liquidity with minimum risk to market value.
With over 150 years of combined global and domestic expertise, The San Diego Foundation Board of Governors Investment Committee drives asset management and investment growth to meet fund objectives.
The Investment Committee is committed to:
- Protecting the corpus of the Foundation
- Preserving the spending power of the income from the fund
- Maintaining a diversified portfolio of assets in order to meet investment return objectives while keeping the level of risk commensurate with that of the median fund in a representative foundation and endowment universe
- Complying with applicable law
Investment Committee Members
Kevin Hamilton, CFA, Chair
Business Consultant & Advisor, Investment Management
Amanda Montgomery, Vice Chair
Senior Relationship Manager, Allianz Global Investors
President and CIO, Metis Global Partners
Marty Cassell, CFA
Principal, Chief Executive & Investment Officer, Chandler Asset Management
Chief Investment Officer, San Diego City Employee’s Retirement System
Steve Klosterman, AIF
Regional Director, Halbert Hargrove
CEO & Founder, AlphaCore
Mark A. Stuart, CFRE
President & CEO, The San Diego Foundation