By Lauren Kotkin, ASF

Two recent ASF programs surfaced some great takeaways. Check out our Educational Programs calendar for upcoming in-person programs, conference calls, and webinars that interest you.

The year 2013 was a spectacular year in the investment word, said U.S. Trust Bank of America’s Stephen Campisi in his January 21 Quarterly Market Update conference call, producing the strongest return in the 5 years of market recovery following the 2008 downturn. If we look back over the past 6 years, starting with the year of the tumble and then back again, we see that investors were helped by an integrated strategy and the discipline to maintain this strategy through 2013. 

For example, a portfolio that maintained over this period its “70/30 strategy” (70% stocks and bonds, 30% cash and equivalents) would have fully recovered its value prior to the downturn of 2008 while continuing to support its mission through its spending program. Read the Q4 2013 Market Update

On the January 28 webinar, A Close Look at ASF’s 2013 Foundation Operations and Management Report, Glenmede Director of Endowment and Foundation Investments Adam Conish weighed in on integrated strategies and ASF members’ asset allocation data. Over the past 10 years, ASF members have not significantly rebalanced their portfolios or changed their asset allocations despite significant changes in the market, especially in the past 5 years.

Since many foundations operate with very long—if not perpetual—time frames, and must generate a return greater than their spending rate plus inflation to maintain the corpus, Adam advised foundations to consider diversifying their asset allocations further into areas such as hedge funds and private equity, which over time should help the overall portfolio to generate a higher return with less risk compared to a less diversified allocation. This increased diversification can help to protect the corpus in volatile times and quicken recovery efforts.

No matter how you slice it, strategic investment planning, including creating an investment policy statement and regularly rebalancing the portfolio, is wise practice and can help your foundation meet its goals of making a difference in the communities you fund for the long term.

Related resources

ASF’s resources on foundation investing

ASF’s Investments Collection, a series of primers for anyone who manages foundation investments

Debunking 4 Myths About Hedge Funds

A Checklist for Foundation Investors

ASF Senior Program Director Lauren Kotkin plans a range of educational programs for the ASF community, including conferences, webinars, and conference calls. She also dedicates a portion of her time to managing ASF’s resources on investments. Previously, she worked at the Council on Foundations in the Family Foundation Services department. Lauren holds an undergraduate degree from Duke University and an M.Ed. from Lesley University, with a focus on using arts in education.