| This Policy is No Longer Active. | |||
| Policy number | Policy name | Policy date | Sunset date |
| AP 3-D | Investment Policy | 12/1/1999 | 7/27/2005 |
| Section No section assigned |
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TABLE OF CONTENTS
1. Executive Summary 2. Purpose 3. Statement of Objectives 4. Spending Policy 5. Duties and Responsibilities Board of Directors, Investment Committee Investment Advisor 6. Investment Policy and Guidelines Portfolio Description Time Horizon Diversification Asset Allocation Rebalancing Procedures Risk Tolerance Performance Expectations 7. Guidelines for Portfolio Holdings Domestic Equities Non-US Equities Domestic Fixed Income Securities Non-US Fixed Income Securities Cash Equivalents 8. Control Procedures Review of Liabilities Review of Investment Objectives Review of Investment Advisor Review of Investment Performance Proxy Statements 9. Adoption Statement EXECUTIVE SUMMARY American Association of Physicists in Medicine Fund Name: Investment fund Fund Type: Exempt Operating Foundation Date Established: November 10, 1989 Federal Tax ID#: 23-7057224 Total Fund Assets: $3,500,000.00 (As of Date) March 31, 1999 Investment Time Horizon 7 to 10 years Risk Tolerance: Moderate Volatility Consistent with Portfolio Benchmark Portfolio: Asset Allocation Strategy Asset Classes Normal Weightings Equity - U. S. International 48% 12% Fixed Income 39% Cash 1% KEY CONTACT NAMES Fund Sponsor: American Association of Physicists in Medicine Trustee: Board of Directors Custodian: SEI Trust Company Investment Advisor: CFG Wealth Management Services, Inc. Fund Administrator: SEI Investments Distribution Co. Accounting Firm: Keller Bruner & Company, L.L.C. PURPOSE This document establishes the Investment Policy Statement for American Association of Physicists in Medicine and is designed to assist in effectively supervising, monitoring and evaluating the portfolio known as The Investment Fund. A thorough investment program is defined throughout this document to achieve the following: ‧ Document the American Association of Physicists in Medicine's investment objectives, performance expectations and investment guidelines for Fund assets. ‧ Establish an appropriate investment strategy for managing all Fund assets, including an investment time horizon, risk tolerance ranges and asset allocation. The goal of this strategy is to provide sufficient diversification and overall return over the long-term time horizon of the Fund. ‧ Establish investment guidelines to control overall risk and liquidity, within the agreed upon investment strategy. ‧ Establish periodic performance reporting requirements that will effectively monitor investment results and ensure that the investment policy is being followed. ‧ Comply with fiduciary, prudence, due diligence and legal requirements for Fund assets. The Board of Directors of the American Association of Physicists in Medicine has arrived at this Investment Policy through careful study of the returns and risks associated with alternative investment strategies in relation to the current and projected spending policies and fund raising requirements of the Fund. This policy has been chosen as the most appropriate policy for achieving the objectives of the Fund, which are described in the Objectives section of this document. STATEMENT OF INVESTMENT OBJECTIVES The Investment Fund is established to manage assets held in reserve to assure that the commitments of AAPM will be honored. Those commitments include: - Honor all publishing commitments for one year; - Cover all expenses AAPM is committed to for its Annual Meeting and the RSNA meeting in a year when circumstances other than a natural disaster cause cancellation of the Annual Meeting; - Cover obligated expenses of the Summer School and other Symposia in the event that they are canceled for reasons other than a natural disaster; - Replace existing equipment owned by AAPM should it become necessary; - Cover commitments for new programs approved the previous year. The investment objective of the Investment Fund shall be defined as: . To preserve and enhance the purchasing and earning value of the funds held in the American Association of Physicists in Medicine portfolio. . To seek an average annual real rate of return of 5% or total return of CPI plus 5%. This objective shall be measured over a 7-10 year time frame, with the intent of this objective to preserve, over time; the principal value of the assets as measured in real, inflation adjusted terms. . To seek competitive investment performance versus appropriate or relative benchmarks. This objective shall be measured primarily by comparing investment results, over a 7-10 year time period. SPENDING POLICY The Board of Directors will approve, at their discretion, expenditure of assets from the Investment Fund. It shall be the Board's responsibility to periodically review the spending policy to make adjustments necessary to preserve the purchasing power of the Investment Fund. Further, it shall be the responsibility of the Investment Committee to promptly communicate any changes in the spending policy to the Investment Advisor. DUTIES AND RESPONSIBILITIES The Board of Directors of the American Association of Physicists in Medicine is responsible for managing the investment process in a prudent manner with regard to preserving principal while providing reasonable returns. In carrying out these duties the Board has delegated various duties to AAPM committees. These duties include: - The Finance Committee is responsible for annually recommending the amount of money to be transferred to the Investment Fund. - The Development Committee shall award scholarships and grants to individuals or institutions in furtherance of the AAPM's tax-exempt purposes. - The Executive Committee is authorized to open and/or close accounts in the name of the society as deemed necessary by the Executive Committee. - The Board has retained an Investment Adviser, CFG Wealth Management Services, Inc., to assist in managing the assets of the Fund. The Investment Adviser's role is to provide guidance to the Board on matters pertaining to the investment of Fund assets including investment policy, investments selection, monitoring Fund performance and compliance with the Investment Policy. - Recommendations pertaining to changes in the investment policy and guidelines for the policy's implementation or the hiring or replacement of a qualified Investment Advisor shall be made by the Investment Advisory Committee and approved by the Board of Directors. Individual duties and responsibilities are further detailed below. Investment Advisory Committee . Retain a qualified Investment Adviser to assist in the development and implementation of the investment policy, (e.g., goals, objectives, and guidelines). . Establish the investment policy of the Fund. This includes, but is not limited to, allocation between equity and fixed income assets, selection of acceptable asset classes and the establishment of a performance benchmark for the portfolio. . Regularly review investment performance of the Fund including the performance of the investment Adviser to assure the policy is being followed and progress is being made toward achieving objectives. . Report investment results to the Board of Directors on a semi-annual basis. . Every five years, submit a written review to the Board of Directors whereby the committee has performed a systematic and comprehensive review of the fund's objectives, management experience and investment policies. Investment Advisor . Assist the American Association of Physicists in Medicine in establishing the investment policy and guidelines contained in this Investment Policy Statement. . Recommend an investment strategy and coordinate the implementation of the asset allocation strategy through the mutual funds or separate account managers recommended to the Investment Advisory Committee. This strategy shall be within investment policy guidelines set forth in this statement and as otherwise provided by the American Association of Physicists in Medicine. . Monitor the asset allocation among all asset classes and verify on a monthly basis that allocations are within targets defined by this investment policy statement and approved by the American Association of Physicists in Medicine. . Monitor the investment performance of the Fund relative to its performance benchmark and provide quarterly performance reports to the American Association of Physicists in Medicine. . Report in a timely manner substantive developments that may affect the management of Fund assets. . Submit a monthly 'Statement of Value and Activity" to the AAPM Executive Director. INVESTMENT POLICY AND GUIDELINES The Portfolio Fund assets will be held in an investment portfolio with an active strategic asset allocation strategy. It is anticipated that the fund will be invested in mutual funds. As a result, assets held in the portfolio will be well diversified and highly liquid. The investment manager for each mutual fund is responsible for managing the assets of each fund in accordance with the stated objectives and policies of that fund as set forth in each prospectus. Time Horizon Fund objectives are based on a 7-10 year, investment horizon, so that interim fluctuations should be viewed with the appropriate perspective. The American Association of Physicists in Medicine has adopted this investment horizon such that the chances and duration of investment losses are carefully weighed against the potential for appreciation of assets. Diversification Investments shall be diversified with the intent to minimize the risk of large losses to the Fund. Consequently, the total portfolio will be constructed and maintained to provide prudent diversification with regard to the concentration of holdings in individual issues, corporations, or industries. Diversification occurs at several levels including the use of broad and sub-asset classes and multiple specialist investment managers. The American Association of Physicists in Medicine realizes a significant portion of the mutual funds comprising the Portfolio is allocated to U.S. equity securities, including allocations to both large and small cap equities. An allocation to developed international equities provides greater diversification, which over the longer term is expected to generate higher returns with lower volatility. Mutual funds comprising the fixed income portion of the Portfolio are allocated to bonds, including high quality U.S. and non-U.S. issues. The portfolio investments will be managed in accordance with the diversification and industry concentration restrictions set forth in the Investment Company Act of 1940, as amended (the "1940 Act"). Pursuant to the provisions of the 1940 Act, diversified mutual funds may not, with respect to 75% of their assets, (i) purchase securities of any issuer (except securities issued or guaranteed by the United States government or its agencies) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer; or (ii) acquire more than 10% of the outstanding voting securities of any one issuer. Certain mutual funds in which the Fund may be invested are considered non-diversified for 1940 Act purposes. These non-diversified funds are not required to follow this procedure. In addition, no mutual fund or fund manager may purchase any securities, which would cause more than 25% of its total assets to be invested in the securities of one or more issuers conducting their principal business activities in the same industry. However, this limitation does not apply to investments in securities issued or guaranteed by the United States Government or its agencies. Asset Allocation Academic research indicates that the decision to allocate total account assets among various asset classes will far outweigh security selection and other decisions that impact portfolio performance. The American Association of Physicists in Medicine believes that to achieve the greatest likelihood of meeting fund objectives and the best balance between risk and return for optimal diversification, the Fund should allocate assets in accordance with the targets of each asset class as stated below: Asset Classes Normal Weightings Equity - U. S. International 48% 12% Fixed Income - U.S. Developed International 33% 6% Cash 1% Within the U.S. Equity allocation, further diversification will be achieved by establishing targeted portfolio weightings in the following investment style categories: Large Cap Value, Large Cap Growth, Small Cap Value and Small Cap Growth through the use of style specialist separate account managers or mutual funds. No more than thirty percent (30%) of the market value of the total investment portfolio may be invested in foreign equity securities including investments in Emerging Market equity securities. No more than twenty percent (20%) of the market value of the total investment portfolio can be investment in foreign securities. Rebalancing Procedures From time-to-time, market conditions may cause the Portfolio's investment in various mutual funds to vary from the established allocation. To remain consistent with the asset allocation guidelines established by this Statement, each mutual fund in which the Portfolio invests will be reviewed on a monthly basis and rebalanced back to the normal weighting if the actual weighting varies by 2% or more from the recommended weighting. In addition, the allocation of assets in the Portfolio may deviate from the normal allocation as the dynamics of capital markets change. The permitted range is not expected to exceed 5% on either side of what is established as the normal broad or sub-asset class weighting. Such deviations are designed primarily to reflect valuation movements within each security market and to reduce overall investment risk within the portfolio. Risk Tolerances The Board and Investment Advisory Committee recognizes that the objectives of the Portfolio cannot be achieved without incurring a certain amount of principal volatility. It is expected that the level of volatility for the entire portfolio will remain somewhat consistent with a comparable portfolio comprised of style-specific performance benchmarks which maintain a high correlation to each broad or sub-asset class represented within the portfolio. The range of volatility variance should not exceed or trail the weighted benchmark by more than ten percent (10%). Performance Expectations Over the long-term, the investment objectives for this portfolio shall be to achieve an average total annual rate of return which consists of the consumer Price Index (CPI) plus 5% for the aggregate investments under this Investment Policy Statement. The Investment Fund performance benchmark is the weighted sum of the respective benchmarks used for each broad and sub-asset class. The benchmarks to be used are as follows: - Large Cap Growth Russell 1000 Growth Index - Large Cap Value Russell 1000 Value Index - Small Cap Growth Russell 2000 Growth Index - Small Cap Value Russell 2000 Value Index - Developed Int'l Equity MSCI EAFE Index - Core Fixed Income Lehman Aggregate Bond Index - Developed Int'l Fixed Income Salomon WGB Index, Non-U.S. Unhedged Returns may vary significantly from this target from one reporting period to another. The criteria used for investment manager or mutual fund retention includes, among other factors, performance consistency relative to the manager's or mutual fund's specific benchmark over 1,3 and 5 year periods and performance relative to the manager's or mutual fund's investment peer group. Managers and mutual funds are expected to remain above median relative to their peer group and meet or exceed their respective style benchmarks upon review. GUIDELINES FOR PORTFOLIO HOLDINGS As described in the Investment Advisory Agreement, the Investment Adviser implements this Investment Policy through investments in mutual funds and other pooled assets portfolios. Such investments are acceptable investments provided they conform to the diversification restrictions set forth below. Domestic Equity The Domestic Equity asset class may be comprised of mutual funds and other pooled asset portfolios that are invested principally in equity securities of U.S. companies. These securities may be listed on registered exchanges, or actively traded in the over-the counter market, or considered to be restricted securities (provided that the percentage of the fund's assets invested in such securities conform to the Fund's prospectus). Non-U.S. Equity Non-U.S. Equity asset class may be comprised of mutual funds and other pooled asset portfolios that are invested principally in equity securities (common stocks, securities that are convertible into common stocks, preferred stocks, warrants and rights to subscribe to common stocks) of non-US issuers purchased in foreign markets, U.S. or foreign registered exchanges, or the over-the counter markets. Domestic Fixed Income The Domestic Fixed Income asset class may be comprised of mutual funds and other pooled asset portfolios that are invested principally in fixed income securities that are rated investment grade or better, i.e., rated in one of the four highest rating categories by an NRSRO at the time of purchase, or if not rated, are determined to be comparable quality by the Investment Advisor or a mutual fund sub-Advisor. Non U.S. Fixed Income The non-U.S. fixed income asset class may be comprised of mutual funds and other pooled asset portfolios that are invested principally in investment grade fixed income securities (or securities deemed of comparable quality by the Fund's Advisor) of issuers located in other than the United States. Cash Equivalent Reserves Cash equivalent reserves shall consist of money market mutual funds that comply with Rule 2a-7 under the 1940 Act. CONTROL PROCEDURES Review of Liabilities The Investment Advisory Committee will review all policies, objectives and guidelines annually. This review will focus on an analysis of major differences between the Fund's assumptions and actual experience. Review of Investment Objectives Investment performance will be reviewed annually be the Investment Advisor to determine the continued feasibility of achieving the investment objectives and the appropriateness of the investment policy for achieving these objectives. In addition, the validity of the stated objective will be reviewed annually. It is not expected that the investment policy will change frequently. In particular, short-term changes in the financial markets should not require an adjustment in the investment policy. Review by Investment Adviser The Investment Adviser will report on a quarterly basis the total Fund investment performance. In addition, the Investment Adviser will be responsible for keeping the Investment Advisory Committee informed of any material changes associated with the underlying investment management firms or mutual funds. Review of Investment Performance Regular performance reviews will provide the following information: . Comparison of investment results to appropriate benchmarks, as well as market index returns in both equity and debt markets. Examples of benchmarks and indexes that may be used include: the CPI; appropriate Lipper averages; U.S. Equity - Wilshire 5000; Non-U.S. Developed Equity stocks - MSCI Europe, Australia, and Far East (EAFE) Index; Emerging Markets Equity - IFC Investable Composite; U.S. Fixed Income - Lehman Aggregate Bond Index; Non-U.S. Bonds - Salomon WGB Index, Non-U.S. Unhedged; Emerging Markets Debt - J.P. Morgan EMBI+; High Yield - CS First Boston High Yield Index; Cash - 91 T-Bill. . Verify adherence to Investment Policy and guidelines Proxy Statements Proxy statements will be voted in accordance with the terms of the Investment Advisory Agreement. ADOPTION OF INVESTMENT POLICY STATEMENT The American Association of Physicists in Medicine Board of Directors in conjunction with the Investment Committee has reviewed, approved and adopted this Investment Policy Statement, dated August 31, 1999. American Association of Physicists in Medicine Date Michael D. Puckett, CFP CFG Wealth Management Services, Inc. |
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| Policy version history | ||||
| Policy number | Policy name | Policy date | Sunset date | Active? |
|---|---|---|---|---|
| AP 3-C | Investment Policy | 8/1/1993 | 11/30/1999 | Inactive |
| AP 3-D | Investment Policy | 12/1/1999 | 7/27/2005 | Inactive |
| AP 3-E | Investment Policy - Operating Reserves Investment Fund | 7/28/2005 | 10/6/2010 | Inactive |
| AP 3-F | Investment Policy - Operating Reserves Investment Fund | 10/7/2010 | 7/13/2011 | Inactive |
| AP 3-G | Investment Policy - Operating Reserves Investment Fund | 7/14/2011 | 10/7/2014 | Inactive |
| AP 3-H | Investment Policy - Operating Reserves Investment Fund | 10/8/2014 | 12/31/2024 | Inactive |
| AP 3-I | Investment Policy - Operating Reserves Investment Fund | 9/28/2022 | 12/31/2024 | Active |