YMCA SOUTH AUSTRALIA Investments Policy

Transcription

1 Policy Title: YMCA SOUTH AUSTRALIA 1 P a g e

2 Policy Title: Introduction The Board may invest any funds of the Association in such a manner and for such periods as it thinks fit and may realise any investments or part thereof or change any investments as it thinks fit. And in carrying out this objective the Association may invest any monies of the Association not immediately required for any of its objects in such a manner as may from time to time be determined. The Finance Committee manages the Association s investment portfolio within the parameters set by the Board (i.e. Asset Management Strategy). 3. Policy 3.1 Application This operational policy applies to all delegated staff of, Board and Sub- Committees of the Board. The General Manager is authorised to manage all cash and fixed interest investments as outlined in this Policy. All other investments are at the discretion of the Board. 3.2 Investment Strategy The strategy for investment of funds is both short and long term: In the short term the intention is to accumulate funds in order to build up a capital base that will be capable of producing a significant income stream to enable the Association to make meaningful contributions in accordance with its objects. In the longer term the Association will manage its assets with a view to maximizing capital appreciation and investment income so as to enable the income to be disbursed in accordance with its objects. 3.3 Aims and Objectives of Investment Strategy The Principal aims and objectives of Investment Strategy are: Maximise the yield, preserve the Association s capital and provide targeted income levels within agreed risk parameters. 2 P a g e

3 Policy Title: Need to be extremely conscious of investment risk. Therefore, there is a need to manage the portfolio in a conservative fashion that does not take on levels of risk that endanger the capital base. Demonstrate financial prudence to donors, regulators, and other stakeholders. Provide a road map for the Board to follow in order to provide continuity and consistency to the Association s investment affairs. 3.4 Principles of Investment Strategy The following principles underpin the Association s Investment Strategy: To maximise return within reasonable and prudent levels of risk. To maintain an appropriate asset allocation based on a total return policy that is compatible with a flexible spending policy, while still having the potential to produce positive real returns. The long-term (>5 years) investments have the dual aim of capital protection and income generation. 3.5 Risk Profile The Association recognises and acknowledges that some risk must be assumed in order to achieve the long-term investment objectives of its investment strategies, and that there are uncertainties and complexities associated with contemporary investment markets. Where appropriate the Board will seek professional investment advice with a view to mitigating risks and having regard to the investment objectives outlined in this document. Taking into account the low levels of member s equity, and the need to take a conservative, low risk approach to managing investments, the following risk profile is to be adopted: Investment Timeframe Short term < 12 months, Long Term > 5 years Risk Profile Conservative Tolerance for Volatility Medium Need for Capital Growth Medium Need for Income Medium Need for Liquidity - High 3 P a g e

4 Policy Title: 3.6 Investment Procedure The following procedures will apply to investments of the Association s funds: Invest Cash and Fixed Interest with Financial Institutions with a Standard & Poor s or similar credit rating of A or better. Diversification should be sought by investing with a variety of financial institutions and by having no more than approximately 50% of Cash / Term Deposits invested with any one institution. Identifying Investible Funds The Association must ascertain what portion of total funds is short term cash flow and which portion is longer term capital. To determine that portion of cash balances that may be available for longer term investment; daily cash balance levels must be observed over an annual cycle and the minimum balance are identified as potential longer term funds available for investment. Determining Long Term Inflation Rate and Cost of Services - The Association must have regard for the effect that inflation has on the purchasing power of funds. Short-Term Assets (<12 Months) - In managing the short-term assets consideration must be given to credit rating of Institution, Rate of Return and cash flow demands. 4. Definitions Short term - are those funds required to meet obligations within the next 12 months. Medium term - are all assets that will be consumed within 4 years. Long term - are all other assets that are expected to be perpetual in nature or are expected to be an asset for longer than 5 years. Investible funds - funds that are not required to meet expenditure within the next 12 months can be considered investible funds. Investible funds are to be segregated into medium term and long term assets. Rate of Return - the minimum rate of return is the average at call interest rate on term deposits with any of the four major banks operating in Australia (i.e. NAB, Commonwealth Bank, ANZ and Westpac). 4 P a g e

5 Policy Title: 5. Roles and Responsibilities Department / Area Role / Responsibility Chief Executive Officer Oversee the implementation of the, ensuring the policy development framework is implemented. SMT Review policies for endorsement and refer to Chief Executive Officer Chief Executive Officer Review endorsed policies and considers approval or referral to the Board for approval. Approves any exemptions to policy adherence. Board Review and Approve appropriate policies. Finance and Audit Committee Manage the investment portfolio within the parameters set by the Board (i.e. Asset Management Strategy). 6. Monitoring and Evaluation The Board will monitor and review its annually in conjunction with the preparation and submission of annual budgets to the Board, or more frequently if there is any major change in organisational status. Version History Version Date Description of changes Effective Date 1.0 June 2011 Creation of June May 2014 Update 29 May P a g e