STATEMENT OF INVESTMENT POLICY AND OBJECTIVES SCOPE OF THIS INVESTMENT POLICY This statement of investment policy reflects the investment policy, objectives, and constraints of the Holy Trinity Episcopal Foundation, Inc. adopted by the Board of Trustees. PURPOSE OF THIS INVESTMENT POLICY STATEMENT This statement of investment policy is set forth in order to:. j" 1. Defme and assign the responsibilities of all involved parties. 2. Establish a clear understanding for all involved parties of the investment goals and objectives of the Foundation. 3. Provide guidance and limitations to all Investment Professionals regarding the investment of the Foundation. 4. Establish a basis for evaluating investment results. 5. Manage the assets of the Foundation according to prudent standards as established m common law applicable to trusts and the Florida Uniform Prudent Investor Act. In general, the purpose of this statement is to outline a philosophy and attitude that will guide the investment management ofthe assets of the Foundation toward the desired results. It is intended to be sufficiently specific to be meaningful, yet flexible enough to be practical. DELEGATION OF AUTHORlTY The Board of Trustees of the Foundation is a fiduciary and is responsible for directing and monitoring the investment management of the assets of the Foundation. This may be accomplished through use of a major brokerage firm (hereafter sometimes referred to as the "Investment Advisor") which will assist the Board of Trustees in: establishing investment policy, objectives, and guidelines, purchase, sell, or hold the specific securities that will be used to meet the Foundation's investment objectives in accordance with the policies, guidelines, constraints
and philosophies as outlined in this statement, maintain possession of securities owned by the Foundation, collect dividend and interest payments, redeem maturing securities, and effect receipt and delivery following purchases and sales. Additional specialists such as attorneys, auditors, and others may be employed by the Board of Trustees to assist in meeting its responsibilities and obligations to prudently administer the assets of the Foundation. The Board of Trustees will reserve control over investment decisions, with the exception of specific guidelines described in this statement. The Investment Advisor will be held responsible and accountable to achieve the objectives herein stated. DEFINITIONS As used in this Statement of Investment Policy and Objectives and the addendum - Statement of Investment Guidelines, the following definitions shall apply: 1. "Assets of the Foundation" is defined as all of the assets of the Foundation. 2. "Endowment Funds" or "Endowments" shall refer to those funds deposited with the Foundation with a donor stipulation they be used as the donor places on such funds. 3. "Investment Advisor" shall mean any individual or organization employed to provide advisory services, including advice on investment objectives and/or asset allocation, manager search, and performance monitoring. 4. "Securities" shall refer to the marketable securities. ASSIGNMENT OF RESPONSIBILITY The Board of Trustees of the Foundation is charged with the responsibility for the management of the assets of the Foundation. The Board shall discharge its duties solely in the interest of the Foundation, with the care, skill, prudence and diligence under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims. The specific responsibilities of the Board relating to the investment management of the assets of the Foundation include: 1. Projecting the Foundation's financial needs, and communicating such needs to the Investment Advisor on a timely basis. 2. Determining the Foundation's risk tolerance and investment horizon, and communicating these to the appropriate parties. 3. Establishing reasonable and consistent investment objectives, policies and guidelines, which will direct the investment of the assets of the Foundation. 2
4. Prudently and diligently selecting a qualified Investment Advisor. 5. Regularly evaluating the performance of the Investment Advisor to assure adherence to policy guidelines and monitor investment objective progress. 6. Developing and enacting proper control procedures. Responsibility of the Investment Advisor. The Investment Advisor's role is that of an advisor to the Board. Investment advice concerning the investment management will be offered by the Investment Advisor, and will be consistent with the investment objectives, policies, guidelines and constraints as established in this statement. Specific responsibilities of the Investment advisor include: 1. Assisting in the development and periodic review of investment policy. 2. Providing "due diligence". 3. Communicating matters of policy, manager research, and manager performance to the Board. 4. Reporting investment performance results at the next regularly scheduled Board meeting following each quarter end. GENERAL INVESTMENT PRINCIPLES 1.The assets of the Foundation shall be invested with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the investment of a fund of like character and with like aims. 2. Investment of the assets of the Foundation shall be so diversified as to minimize risk consistent with the policies, guidelines, constraints and philosophies as outlined in this statement. INVESTMENT OBJECTIVES The primary investment objective of the Foundation is to preserve capital while generating sufficient income to meet spending needs. The secondary investment objective is total return that IS the aggregate result of capital appreciation, dividend and interest income. 3
SPECIFIC INVESTMENT GOALS It is the goal of the Foundation to realize an absolute annual rate of return of 6.0%. may change from time to time at the discretion of the Board of Trustees. This Goal The investment goals above are the objectives of the Foundation, and are not meant to be imposed on each investment account. The goal of the Investment Advisor, over the investment horizon, shall be to: 1. Meet or exceed the market index, or blended market index, selected and agreed upon by the Board that most closely corresponds to the style of investment management. 2. Display an overall level of risk in the portfolio that is consistent with the risk associated with the benchmark specified above. Risk will be measured by the standard deviation of quarterly returns. Specific investment goals and constraints for the Investment Advisor, if any, shall be incorporated as part of this statement of investment policy. It is understood that negative market returns associated with a specific style of investing may negatively impact on annual rates of return. ASSET ALLOCATION GUIDELINES Investment Allocation Guidelines of the Foundation shall be determined by the Board of Trustees. SELECTION OF INVESTMENT ADVISOR The Board's selection of Investment Advisor must be based on prudent due diligence procedures. INVESTMENT ADVISOR PERFORMANCE REVIEW AND EVALUATION Performance reports, generated by the Investment Advisor, shall be compiled on a timely basis and communicated to the Board for review. The investment performance of total portfolios, as well as asset class components, will be measured against commonly accepted performance benchmarks. Consideration shall be given to the extent to which the investment results are consistent with the investment objectives, goals, and guidelines as set forth in this statement. The Board intends to evaluate the portfolio(s) over a two-year period, but reserves the right to terminate an Investment Advisor for any reason including, by way of illustration and not limitation, the following: 1. Investment performance, which is significantly less than anticipated given the discipline employed and the risk parameters established, with an unacceptable justification of poor results. 4
2. Failure to adhere to any aspect of this statement of investment policy, including communication and reporting requirements. 3. Significant qualitative changes to the investment management organization. The Investment Advisor shall be reviewed regularly regarding performance, personnel, strategy, research capabilities, organizational and business matters, and other qualitative factors that may impact ability to achieve the desired investment results. CONFLICT OF INTEREST STATEMENT Each member of the Board of Trustees of the Foundation shall submit, to the Foundation, an annual statement of conflict of interest on a form provided by the Foundation. INVESTMENT POLICY REVIEW To ensure continued relevance of the guidelines, objectives, financial status and Capital markets expectations as established in this statement of investment policy, the Board plans to review the investment policy at least annually and make any changes deemed appropriate. 5