The UVA Fund offers a wide array of financial services, including investment options, in order to serve the needs of the University of Virginia community. The goal of each UVA Fund investment option is to maximize current income while preserving the principal. As a client of the UVA Fund, your group may participate in any combination of Short Term, Mid-Term, and Long Term investment options. An overview of each investment option is listed below. Please review our investment options and feel free to contact me via email mem9t@virginia.edu to review your investment opportunities.
Short Term Fund
Clients typically use the Short Term Fund to earn interest on funds that will be used within approximately two years. These funds are liquid and are typically allocated for special projects or operating accounts. The transfer from the Short Term Fund to cash funds is simple and can take place any time during the month.
Effective July 1, 2012, the current “Money Market” option will be phased out.
Medium Term Fund
We will offer a Medium Term Fund “MTF”, clients typically use the funds placed in the MTF investment option within five years. The funds placed in the MTF option are utilized for longer term projects and are frequently used to set up future endowed accounts. The MTF will carry risk tolerance. The funds are transferable from the MTF to cash funds on the last business day of the month.
Long Term Fund
The Long Term Fund, or endowed account, is typically used to fund scholarships, building funds, and other long term projects. Long Term Funds carry market risk tolerance. The funds are transferable from the MTF to cash funds on the last business day of the month. The Long Term Fund, or endowed fund, is held with the University of Virginia Investment Management Company (UVIMCO). More information about UVIMCO can be found at the following website: www.uvimco.org. [i]
The table on the second page better outlines the strategy differentiation between the Medium Term Fund (MTF) and the Short Term Fund (STF), it includes high level data points from the STF and MTF Investment Policy Statements. Please take time to review the information about the Short Term, Medium Term, and Long Term investment options held at the UVa Fund. As always, please feel free to contact me with any questions.
Table 1: UVA Fund Short Term Fund and Long Term Fund Options:
| Short Term Fund- STF | Medium Term Fund- MTF | |
| Investment Horizon | Less than 2 Years | Less than 5 Years |
| Maximum Maturity | 2 Years | 5 Years |
| Weighted Average Maturity | 1 Year | 3 Years |
| Asset Allocation | Cash Equivalents and Short Term Investments | Short and Longer Term Investments |
| Credit Quality: Short Term | Highest Quality (A1/P1) | 90% Highest Quality (A1/P1)10% High Quality (A2/P2) |
| Credit Quality: Long Term | Minimum Single A | 90% Minimum Single A10% Minimum BBB |
| Corporate Obligations | 35% portfolio limit | 50% portfolio limit |
| Liquidity | Monthly | Quarterly |
| Benchmark | Returns in excel of a comparable grouping of Money Market Funds | Returns in excess of a comparable U.S. Treasury |
* In past STF portfolio reviews, we have reviewed yield to a comparable Treasury benchmark. As a viewpoint on portfolio yield, consider the Weighted Average Maturity limit (STF = 1yr; MTF = 3yrs) and current Treasury yields:
- 1 yr Treasury – .19%
· 3 yr Treasury – .35%
{as of 7/10/12; source Bloomberg}
[i] UVIMCO. (2012, July 13). University of Virginia Management Company. Retrieved July 13, 2012, from University of Virginia Management Company: http://uvimco.venturedev.net/