Opotiki Community Foundation

Investment policy

1. Investment Policy

1.1 Asset Allocation

The initial sum available will be a very small percentage of the expected figure in 5-10 years, and the Foundation may well receive existing investments in the form of shares, property or an income stream from another trust or corporate body. Clearly these could significantly skew the investment allocation. Therefore the allocation policy should only relate to the sum freely available to the Foundation for discretionary investment, and that it is reviewed quarterly.
The Foundation will not directly invest in shares which raise ethical/moral issues e.g. gambling organisation such as Sky City, or tobacco. Should these be part of any indirect holding we will not, however, debar that holding from consideration.

1.2 Investment Objectives

The Foundation will adopt a policy of investing the capital of the Foundation in a broad range of domestic and international investments designed to achieve the following objectives:
Maximise the total amount of income that can be provided by the investments of the Foundation over the long term subject to prudent and appropriate level of risk
Protect inter-generational equity with regards to the capital of the Foundation and amounts available for distribution on an annual basis.
 

1.3 Investment Policies

 Trust investment responsibilities under common law and statute must be met.
An appropriate level of portfolio risk will be determined and agreed by the Investment Advisory Committee in consultation with professional advisors.
An appropriate level of diversification across securities, sectors, asset classes and countries must be maintained.
The portfolio will accept risks in a prudent manner and investment risk must be minimised for the expected level of return.
Consistent with the stated objectives, the Foundation will demonstrate a preference for more conservative investment choices and a more stable flow of investment income.
 The capital of the Foundation may not be used for donations (other than “pass-through” Funds so designated at the time of donation).
Liquidity must be considered and maintained at an appropriate level.
Flexibility must be accommodated to allow for changes in the Foundation ’s requirements and the investment environment.
The portfolio and investment managers will be monitored on an ongoing basis.
 All aspects of the investment process and implementation must be reviewed regularly.

1.4 Strategic Asset Allocation

Consistent with the investment objectives and policies highlighted above, the Foundation will need to adopt an asset allocation that is well diversified across a number of asset classes.
Given the objectives and nature of the Foundation the assets will be invested based on a long-term benchmark allocation and generally maintained within the ranges indicated. The benchmark and ranges will be reviewed as circumstances change and will be reassessed as appropriate. The following is proposed and recommended as an initial basis for the Investment Advisory Committee’s consideration and adoption.