Caption: Board of Trustees Minutes - 1990
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1991] UNIVERSITY OF ILLINOIS 287 as well as clearly defining the responsibilities of the board and investment managers. Also, to improve annual return performance, it was recommended that the maturity structure of the portfolio be extended to an average of one and one-half to two years while maintaining adequate working cash for operational needs. T h e transition to the new maturity schedule will be phased in over the course of the coming fiscal year. T h e comptroller recommends the rescision of the policy for current funds adopted by the board on January 20, 1983, and adoption of the following policy for investment of short-term funds. I concur. Statement of Investment Policy for the University of Illinois Short-Term Funds T h e purpose of this statement is to establish the investment policy for the University of Illinois short-term funds. Distinction of Responsibilities T h e Board of Trustees is responsible for establishing the investment policy (described below) that is to guide the investment of University short-term funds. T h e investment policy describes the overall level of risk that the trustees deem appropriate. Investment managers appointed by the board to invest the short-term funds shall do so in accordance with the policy, but apply their own judgments concerning relative investment values. Investment managers are accorded full discretion, within policy limits and established guidelines, to select individual investments and diversify their portfolios. Delegation of Authority T h e comptroller is authorized to invest University short-term funds at his/her discretion in investments consistent with this policy a n d / o r with investment managers appointed by the board. Allocation of Assets It is University policy to invest its short-term funds in the following approximate proportions: Percent of Short-Term Funds 15 35 50 Maturity 90 days 90 days Two to Range or less to two years five years Permissible Investments T h e University short-term funds shall be invested in fixed-income securities with maturities no greater than ten years and short-term (money market) instruments. Fixed-income securities shall be rated "A" or better by Moody's or Standard & Poor's or equivalent. Unrated securities are permissible only when the manager believes that the credit risk involved is consistent with that of an "A" rated debt. Money market instruments selected shall be of investment grade quality. T h e comptroller and investment managers shall not invest in any security which in their opinion entails a material probability of default. Diversification T h e total short-term funds portfolio will be broadly diversified across securities in order to reduce the impact of losses in individual investments in a manner that is consistent with fiduciary standards of diversification.
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