Smith College’s investments are overseen by the college’s investment committee and managed by Investure LLC. The portfolio is allocated across a variety of investment vehicles to optimize performance and manage risk.
The Smith College Endowment
The Smith College endowment, which comprises approximately 2,000 individual funds, finances a portion of the operating and capital needs of the institution. In addition, it includes a number of restricted endowments that fund specific areas, including professorships, scholarships and departmental support.
Individual endowment funds may be established by the board of trustees or through a restricted gift, and the funds are invested and maintained in perpetuity.
The board of trustees sets Smith’s annual level of endowment spending from the budget development process.
In 2016–17, approximately 37 percent of the college’s operating budget was funded from endowment distribution. This support enables the college to provide a premier educational experience, financial aid for students with need and high-quality facilities.
The college’s endowment spending rate sets a responsible annual contribution to operations while providing a measure of protection against periods of declining returns. The spending policy provides that the income distributed per share from the endowment will typically increase by 4 percent annually as long as the resulting amount is more than 4 percent and less than 6 percent of endowment market value. For 2016–17, the college’s spending rate, as a percentage of beginning market value, was 5.4 percent. The spending rate has averaged 4.9 percent over the past decade.
The college’s bylaws delegate investment responsibility to the Investment Committee of the Board of Trustees. “The Investment Committee shall have full power and authority to make decisions related to investments of the College. The committee may select and authorize the engagement of such agents, advisers, brokers, and attorneys, as it deems necessary to aid it in the proper discharge of its duties.” (Trustees By-laws, 4.7: Investment Committee.)
The responsibilities of the Investment Committee are to:
- review and recommend to the board the investment policy and asset allocation of the endowment;
- determine risk and return objectives;
- approve new asset classes and benchmarks;
- monitor the attainment of the investment and financial objectives;
- engage in strategic thinking and long-term planning in regard to the endowment.
Currently, the membership of the Investment Committee includes:
- Deborah DeCotis, vice chair
- Deborah Duncan
- Deborah Farrington, chair
- Lisa Heffernan
- Kathleen McCartney
- Ivy Fredericks
- MaDoe Htun
- Anne Martin
- Stephanie Neely
- Cynthia Fryer Steer
- Mike Howard, non-voting member & staff liaison
|As of 6/30/2018||As of 12/31/2017|
|1 yr||3 yr||5 yr||10 yr||1 yr||3 yr||5 yr||10 yr|
|Smith Custom Passive Benchmark1||8.6%||6.1%||6.6%||5.5%||14.8%||6.4%||7.4%||5.0%|
|Smith Passive 75/251||7.6%||6.5%||7.7%||5.7%||18.3%||7.5%||8.5%||5.0%|
|Smith Passive 60/401||5.7%||5.5%||6.6%||5.6%||15.0%||6.4%||7.2%||5.1%|
|Smith Spending + Inflation2||9.1%||8.1%||7.6%||7.7%||8.5%||7.9%||7.5%||7.9%|
|MSCI All Country World Net||10.7%||8.2%||9.4%||5.8%||24.0%||9.3%||10.8%||4.6%|
|Barclays US Treasury 7–10 Year||(1.8%)||1.1%||2.0%||4.1%||2.6%||1.7%||1.5%||4.6%|
- Please see Page 3 in the PDF above for a description of the benchmarks and indices..
Spending plus inflation represents endowment outflows as a percentage of beginning market value plus CPI plus 1% per annum and may include estimates. Prior to July 2013, endowment outflows were provided to Investure by Smith College.