Asset Allocation

Asset Allocation Principles

• The long-term financial objectives for the ASU Foundation endowment fund are to produce a relatively predictable and stable payout stream that increases over time as fast as the general rate of inflation, and to achieve growth of the investment at a rate that keeps pace with general inflation.
• The long-term investment objective of the ASU Foundation endowment fund is to earn an average annual real (i.e. after adjusting for inflation) total return of at least five and a half percent (5.5%), net of investment manager fees, over long time periods (rolling ten- or fifteen-year periods).
• An average annual real total return of 5.5% or more over the long-term implies a high average allocation to equity securities.
• The target asset allocation for the ASU Foundation endowment fund is highly diversified both by asset class and within asset classes.The purpose of diversification is to enhance future returns, to lower the volatility of returns of the ASU Foundation endowment fund, and to provide reasonable assurance that no single security or class of securities will have a disproportionate impact on the total fund.