UCF Fixed-Income Fund Investment Policy Guidelines

1. Permissible investments include U.S. dollar denominated marketable bonds, and notes mortgages and other asset-backed securities, preferred stock and cash equivalent securities. Forward, futures, and options contracts with prior written authorization may be used in certain situations. (See Prohibited Transactions.)
2. Up to 25% of the market value of the portfolio for which each manager is responsible may be invested in U.S. dollar denominated bonds of issuers located outside the United States.
3. At least 90% of each manager's portfolio, measured at current market value, should have an investment grade rating from at least two of the NRSRO's.
4. No single issuer's securities, other than those of the U.S. Treasury or Agencies, should exceed 5% of each manager's portfolio at current market value. There is no limit to the percentage of the manager's portfolio that may be invested in U.S. Treasury securities. No more than 25% of the total portfolio, measured at current market value, may be invested in U.S. Agency securities.
5. Each manager's portfolio should be appropriately diversified. This diversification should be demonstrated in the manager's quarterly reports to the Investment Committee. The duration of each manager's portfolio together with the manager's stated duration policy should also be included.
6. For the cash and equivalent portion of their portfolios, managers are expected to utilize a high quality broadly diversified commingled fund or other high quality investment vehicle made available by the Foundation's custodian bank. Permission to use comparable funds or other cash equivalent vehicles may be requested from the Investment Committee. The request must be accompanied by evidence indicating that the alternative funds or vehicles meet the same or higher standards of quality and diversification that would be achieved by using the custodian bank's vehicles. Written Investment Committee approval is required before a manager may use cash equivalent vehicles other than those made available by the Foundation's custodian bank.