Long-term Investment (Endowed) Fund

By investing gifts using a long-term strategy, the Foundation preserves the purchasing power of endowments while providing steady earnings for Texas A&M University. Our board of trustees determines investment policy, and the Foundation’s staff implements this policy with the help of external investment managers and consultants.

The long-term investment fund, which held $971.2 million on December 31, 2007, is composed primarily of endowed gifts. The Foundation invests these gifts using a total return investment strategy and annually makes available five percent of the endowments’ three year moving market average value in support of Texas A&M.

To sustain this payout rate and protect endowments against inflation, the Foundation invests more heavily in equities. Our target mix is 75 percent equities (stocks and alternative investments), and 25 percent fixed income (bonds). The fund had one-year, three-year, five-year and seven-year annualized average returns of 9.1 percent, 12.1 percent, 15.1 percent and 10.1 percent, respectively, as of December 31, 2007.

 Non-Endowed Fund

We place all non-endowed, or “pass through”, gifts in the non-endowed investment fund. A donor who makes a non-endowed gift intends that the university will utilize all of the gift, not just its earnings. Thus, the corpus and earnings of each non-endowed gift are available for use by the university. The fund’s investment objective, therefore, is to achieve maximum yield with minimum risk. To meet this objective, we invest non-endowed gifts in various fixed short/intermediate securities.