Endowments: Investment Policy
Cal Poly follows a prudent investment philosophy so that endowment funds maintain their value over time. The investment policy for the Cal Poly Endowment is to preserve the purchasing power while providing a predictable stream of income for the University.
The long-term asset allocation plan targets 70 percent equities (stocks) and 30 percent fixed income (bonds). Equities are allocated at 73 percent for small/large cap, 16 percent international and 11 percent real estate. Fixed income assets are allocated for 71 percent domestic bonds, 16 percent international bonds, and 13 percent high-yield bonds. The expected return of the above asset allocation is 8.9 percent per year, with an expected volatility (standard deviation) of 11.2 percent. If these returns are achieved, the Endowment's investment objective of preserving purchasing power will be achieved over time.
The Cal Poly Foundation employs the investment manager Kaspick & Company. To cover management and investment expenses, an annual fee of 1.3 percent of the Endowment Fund's fair market value is assessed. Endowments with market values above $1 million have a reduced management investment expense.