The policy portfolio serves as an indicator of how the endowment would fare under passive management, while UVIMCO’s returns relative to the policy portfolio demonstrate the added value of active management by its internal team and external investment managers. UVIMCO carefully hand selects managers from around the globe who bring a diversity of thought, outstanding expertise, and innovation to their investment decisions—ultimately increasing the long-term value of the University’s assets.
By generating inflation-adjusted net returns in excess of the University’s spending rate, UVIMCO is providing a steady source of income tosupport the University’s mission for future generations of students, faculty, staff, and patients. Each year, a portion of the endowment value is paid out to support the University’s purpose, and earnings in excess of this distribution build the Long Term Pool’s market value over time. This distribution supports an increasing number of scholarships, professorships, and research funds, and helps expand program offerings and facilities—with the ultimate effect of attracting some of the best students in the nation and world-class faculty to Grounds.
UVIMCO also manages a Short Term Pool for the University and associated organizations to serve important near-term liquidity needs. This Pool offers a way to preserve principal and provide a low-cost, stable, highly liquid, and secure investment vehicle to investors. The Short Term Pool is primarily invested in U.S. Treasury notes, bonds, and bills with maturities of not more than one year, except for U.S. Treasury floating rate notes, which may have a maturity of up to two years. By varying allocations of investment funds between the Long Term Pool and Short Term Pool, investors can tailor an individualized portfolio to their desired risk and liquidity level.