6.1.7 Investment Policy
CAMPION COLLEGE BOARD OF REGENTS
POLICY: Investment Policy
CODE: 6.1.7 Standing Committee
Date Initially Approved: May 11, 2005
Date(s) Revised: May 13, 2009; February 8, 2012, November 28, 2012
The Campion Board of Regents (Board) is responsible to ensure the College’s surplus, endowments and donation funds are invested prudently. The primary purposes of this policy are to document the investment approach and outline the responsibilities of the Board, its Finance/Audit Committee and College management to ensure that the funds are managed in a manner and within levels of risk acceptable to the Board.
The Campion College Funds, to which this investment policy applies, are accumulated through a combination of annual operating surpluses, endowments and donations. These surplus funds are normally transferred to the Corporation of Owners (Jesuits) and thence to the Jesuit Fathers of Upper Canada (Jesuit Fathers), who invests them in accordance with its own investment policy. Other investment vehicles must be in compliance with this investment policy.
The Campion College Funds are used at the discretion of the College to support such things as the Nash Lecture series, Campus Ministry, scholarships and the capital retention fund.
3. Investment Statement Policy
There are two main aspects of the Campion College Investment Statement Policy that will be
captured in this section: long-term endowed funds (3.1) and short-term operational
3.1 Jesuit Fathers of Upper Canada Endowment Fund
Because of the modest size of the Campion Funds, the Investment Statement Policy of the Jesuit Fathers also serves as the investment policy for endowed Campion Funds. The policy is attached as Appendix A and is incorporated in its entirety. Future changes to the Jesuit Fathers’ policy are automatically reflected in the Campion Funds policy.
At the time of writing, the Jesuit Fathers’ investments are managed by a combination of Letko Brosseau (40%) and Mackenzie Financial (60%). In aggregate, assets are invested in equities (50%) and treasury and fixed income instruments (50%). The College’s assets represent approximately 5% of the total invested by the Jesuit Fathers. The weighted asset mix of the two funds is as follows:
Cash/treasury bills 6%
Fixed income instruments 48%
Canadian equities 30%
US and foreign equities 16%
Income/losses realized by the investment funds are smoothed, with an overall objective of paying an annual dividend of 5% to unit holders.
The foregoing percentages are subject to change based on market conditions, investment strategy, changes to the investment policy and other decisions made by the Jesuit Fathers.
3.2 Non-Endowed Funds
Non-endowed funds, such as surplus funds from prior fiscal years, may be invested in order to obtain a higher rate of return for future planning and operational needs. These investments should be more conservative in nature to preserve initial capital investment and to offer steady growth for the future needs of the College. As well, any investment should be made to leverage the associations through the Jesuit Fathers in order to alleviate any additional fees given the lower investment threshold. The following asset mix guidelines are to be followed:
Bonds and fixed income 50-65% Equities 25-35% Cash 8-12%
3.3 Short Term Investments
Management is responsible to manage the College’s operational funds and to ensure prudent investment, if any, of surplus and unallocated funds to generate the highest rate of return through guaranteed investment vehicles. Management will ensure that such short-term investments are fully cashable and limited to 90 day terms.
4. Responsibilities of the Board of Regents
The key responsibilities of the Board of Regents are as follows:
- To ensure surplus funds are invested per the approved policy.
- To ensure management adheres to the investment policy.
5. Responsibilities of the Finance/Audit Committee
The key responsibilities of the Finance/Audit Committee are as follows:
Annually review the investment policy and recommend to the Board of Regents the appropriateness of the existing asset mix of the investments.
- Semi-annually review management’s report on compliance of the investment manager with respect to the investment policy.
- Annually assess the performance of the investment managers. The assessment will be based on the rates of return achieved by the investment managers relative to the rates of return achieved by comparable managers.
6. Responsibilities of Management
The key responsibilities of the College’s management are as follows:
- Transfer surplus funds to the investment managers in a timely manner.
- Quarterly receive and review the investment managers' reports and obtain evidence to ensure they are in compliance with the College’s approved asset allocation mix.
- Semi-annually report to the Finance/Audit Committee on the investment manager's compliance with the investment policy.
- Monthly update the College’s accounts to reflect the current market value of investments.
- Annually report to the Finance/Audit Committee on the performance of the investment managers.
JESUITS IN ENGLISH CANADA TREASURY OFFICE
43 Queens Park Cres East Toronto ON M5s 2B3 Canada Website: www.jesuits.ca
Revised: 19 January 2005 (content)
10 May 2007 (change in Province name)
23 June 2008 (clarifications in response to request by Mackenzie)
2 March 2009 (change in asset mix)
23 September 2011 (lowering of maximum position in any one issuer to 5%)
INVESTMENT STATEMENT POLICY
The purpose of this investment policy is to establish a clear understanding of the investment objectives of the Jesuits in English Canada (legal title - The Jesuit Fathers of Upper Canada).
The primary objective of the investment policy will be to provide for the preservation of capital with a reasonable amount of long term growth without undue exposure to risk. This shall be accomplished using balanced accounts, which will utilise a mixture of fixed income and equity holdings. The investment managers greatest concern should be the total return in a risk adverse manner. Investments should be structured in such a manner, as to reflect the operating finances of the Province. Where possible dividend and income yield coupled with the normal operating incomes of the province should at least cover the fixed expenses of the Province.
Holdings should be predominantly (at least 80%) invested in companies with a market capitalization of over $500,000,000.
- Investments should provide diversification in a combination of Canadian, US and other foreign stocks.
- Currently, the proportion of the account invested in equities shall be 40 – 50%.
Fixed Income Funds
The fixed income investments in corporate and government bonds will have a rating of triple B up to 5% and the rest at least an A rating.
The duration of the investments shall be in a range as determined by the finance committee. The current duration range being 3-7 years.
Currently, the proportion of the account invested in bonds shall be 40 – 50%.
Cash or Cash Equivalents
1. Currently, the proportion of the account invested in cash or cash equivalents shall be 8 – 12%.
Performance of Portfolio
Evaluation of the investment manager’s performance shall be reviewed quarterly.
a) Fixed Income to Scotia McLeod Universe Index
b) Canadian equities to TSX 300
c) US equities to S&P Index
d) Other foreign investment to Morgan Stanley Corporate Index-EAFE (cad)
e) Province total portfolio to comparable manager’s portfolio
Investments Manager's Guidelines
Investments will meet the broad restrictions as outlined below.
- The investment manager shall ordinarily have the full investment discretion with regard to market timing and security selection. The Treasury may on occasion direct the sale or purchase of stocks for the purposes of the Provinces’ involvement with shareholder activism.
- For diversification purposes any discrete equity section shall have at least 20 positions.
- The Jesuits in English Canada will be responsible for voting of proxies and tendering of shares in a manner consistent with the investment objectives and moral and social doctrines of the Jesuits in English Canada.
Investments Managers Restrictions
The Investment Manager must meet the broad restrictions as outlined below.
1. The Investment Manager shall not utilise derivative securities to increase the actual or potential risk posture of the Portfolio. Subject to other provisions in this Investment Policy Statement, the use of primary derivatives, including but not limited to Structured Notes, lower classes of Collateralized Mortgage Obligations, Principal Only, Interest Only Strips, Inverse Floating Securities, Futures Contracts, Options, Short Sales, Margin Trading , and other such specialised investment activity is prohibited.
Moreover, The Investment Manager is precluded from using derivatives to effect a leveraged portfolio structure.
2. There shall be no investments in non-marketable investments.
3. No position of any one issuer shall exceed 5% of the total market value of the portfolio, with the exception of securities issued by the Government of Canada and its agencies.
4. There shall be no position taken that will exceed 5% of the issue outstanding.
5. Not more than 5% of the portfolio shall be invested in commercial paper of any one issuer.
6. The Investment Manager shall avoid whenever possible shares in companies that deal with tobacco products, weapons manufacturing and contraceptive production.
Investment Manager Review
This statement of investment policy will be reviewed annually by the Finance Committee of the Jesuits in English Canada.
An investment performance will be presented quarterly (or by an agreed schedule) by the investment manager to the Finance Committee.
The finance committee in co-operation with the NJCIR (National Jesuit Corporate Investment Responsibility committee) will review our investments at least once a year in the matter of social policy.