The National Foundation for Infectious Diseases (NFID) currently consults with 2 investment consultants in managing NFID investments, selecting investment managers, asset allocation, asset custody, rebalancing procedures, and performance reporting.

Delegation of Authority and Responsibility

The ultimate responsibility for managing the cash and investments of NFID is with the Board of Directors, which may delegate responsibility to the Finance Committee. In carrying out its responsibilities, the Finance Committee will be guided by, and will act in accordance with, these objectives and guidelines and all applicable laws and regulations. The Board of Directors reserves the exclusive right to revise and update the Investment Policy Statement. The purpose of the Investment Policy Statement is to provide a framework for NFID and its investment consultants to achieve investment objectives at a level of risk acceptable to the Board of Directors.

Investment Performance Objectives

The overall NFID investment performance objective is to preserve and grow capital and achieve a competitive rate of total return on assets over multi-year periods. The objective is to grow the aggregate portfolio value at or above the rate of inflation. Total return is defined as income plus realized and unrealized gains, less realized and unrealized losses and expenses. The primary emphasis is on moderate capital growth with some focus on income. The annual budgetary process establishes cash flow needs. This information is shared with the investment consultants so that they can determine how best to meet cash flow requirements.

Risk Tolerance

The Finance Committee desires long-term investment performance sufficient to meet NFID objectives and understands that to achieve such performance, the portfolio may experience periods of decline. The Finance Committee further understands that in a severe market, the potential recovery period could be extensive. Although the preference is to limit the volatility of the portfolio, NFID is comfortable with fluctuations in the portfolio, and the possibility of large declines in value, in order to grow the portfolio over time.

Tax Policy

Tax minimization is not a concern for this investment portfolio.

Cash Management

NFID will maintain a minimum of 12 months of cash on hand for operating purposes, independent of the investment portfolio. Cash management is the responsibility of the NFID Executive Director and CEO and may be delegated to one or both of the investment consultants as appropriate.

Board-Designated Net Assets

NFID designates a fixed amount equal to the initial endowment amount on 9/30/11 of $9,080,432, excluding any additional earnings, as Board-designated net assets. Based on financial needs, strategic priorities, and long-term sustainability of NFID, the Finance Committee, in collaboration with the NFID Executive Director and CEO, shall review the designated amount on an annual basis, and may make recommendations to the Board of Directors.

The Board of Directors shall have the authority to adjust the designated amount of net assets during special circumstances, such as responding to emergencies, capitalizing on unexpected opportunities, or addressing significant changes in the NFID operating environment.

The NFID Executive Director and CEO shall ensure proper documentation of any adjustments made to the Board-designated net assets.

Spending Policy

As needed, the Finance Committee will review portfolio balances and determine cash needed for programs to address NFID strategic priorities. Finance Committee spending recommendations will be approved by the NFID Board of Directors.

Asset Mix

The current approved asset allocation indicates both an initial target allocation and a range for each investment category. From time to time, based on changing economic circumstances and the various relative investment opportunities, it may be desirable to make changes in target allocations. The Finance Committee, with input from NFID investment consultants may determine such changes. The Finance Committee will recommend subsequent target allocation changes and the Investment Policy Statement will be updated accordingly, upon approval by the Board of Directors.

The current approved asset allocation for each investment consultant is as follows:

Asset Category                  Minimum       Target                 Maximum

Cash   0% 5% 10%
Fixed Income   25% 35% 45%
Equity*   35% 50% 65%
Alternative Investments   0% 10% 15%


*US and non-US investments are permissible

The underlying approach to managing NFID investments shall be to optimize the risk-return relationship appropriate to NFID goals. The portfolio will be diversified globally employing a variety of asset classes. Mutual funds or managed portfolios will be employed to implement the portfolio and the chosen asset classes will be periodically rebalanced to maintain a more consistent risk/reward profile.

Rebalancing Procedures

From time to time, market conditions may cause investments in various asset classes to vary from the established allocation. To remain consistent with the asset allocation guidelines contained herein, each asset class in which investments are made shall be reviewed at least on an annual basis by the Finance Committee. Rebalancing will occur when the portfolio exceeds the minimum or maximum constraints.

Asset Type and Quality

Investment of NFID funds shall be limited to investment grade equity and fixed income securities.

Asset Diversification and Portfolio Limitations/Restrictions:

The investment managers and consultants will maintain reasonable sector allocations and diversification, with no more than 20% of the entire portfolio being invested in the securities of any one sector. These limitations may not be exceeded without prior approval of the Finance Committee.

Maximum average bond maturities: 15 years

Maximum individual bond maturities: 20 years

Investment Manager Limitations

Managers or consultants may not make direct investments in real estate or permit the lending or mortgage of any assets.

Alternative Investments

NFID considers all investments other than traditional stocks and bonds to be alternative investments. NFID believes that alternative investments can, over time, improve the expected total return of the portfolio. The diversification impact on the portfolio from adding these alternative asset classes should improve risk-adjusted returns. These asset classes include commodities, real estate, currencies, convertible securities, long-short equities, opportunistic fixed-income, and managed futures. The Finance Committee will consider liquidity issues, expenses, manager experience, and other relevant due diligence issues when considering potential exposure to this asset class. Illiquid investments may only be purchased with advance approval by NFID Treasurer and Executive Director and CEO.

Investment Management Selection/Retention Criteria

Investment managers (including mutual funds, separate account managers, and limited partnership sponsors) shall be selected by the investment consultants.

Consultants shall keep NFID apprised of any material changes in the investment managers, forecasts, recommended investment policy, and tactics.

Duties and Responsibilities

Finance Committee

The duties of the Finance Committee, in consultation with its consultants regarding NFID investments, include:

  • Oversight of the portfolio
  • Establishment and regular review of the investment objectives and guidelines
  • Review of the asset allocation within the investment funds and implementation of any necessary changes
  • The hiring and removal of investment managers charged with managing the investment funds
  • Selecting and monitoring investment consultants
  • Actively participating in setting performance goals and acceptable risk for the investments in conjunction with the advice and recommendations of the investment consultants
  • Monitoring the investment performance, within prudent investor standards
  • Review of all expenses incurred by the investment funds including custodial fees, investment manager fees, and consultant fees, if any
  • Reporting investment results and recommendations to the NFID Board of Directors

 Investment Consultants and Managers

Consultants are Registered Investment Advisors and shall act as the investment consultants to NFID unless NFID decides otherwise. Consultants shall be responsible for:

  • Assisting in the review of the NFID Investment Policy Statement and recommending any changes
  • Managing the investment assets of NFID within these policy objectives and guidelines
  • Designing and implementing an appropriate asset allocation plan consistent with the investment objectives, time horizon, risk profile, guidelines, and constraints outlined in this statement
  • Advising the Finance Committee about the selection of and the allocation of asset categories
  • Identifying specific assets and investment managers within each asset category
  • Providing due diligence, or research, on the investment manager(s)
  • Notifying NFID of any changes in the ownership of the manager(s), changes in style of the manager(s) in writing or any intended deviations from investment philosophy, and any changes in the manager(s) ADV (SEC registration statement)
  • Notifying NFID of any legal action taken against the manager(s) or consultants or judgments against the manager(s) or consultants
  • Monitoring the performance of all selected assets
  • Being available to meet with the Finance Committee at each meeting/teleconference and at such other times within reason at the request of NFID
  • Preparing and presenting appropriate performance reports that are within industry standards and as noted below in the reporting requirements
  • Consultant will not have any discretionary control, nor authority to withdraw funds from NFID accounts, except to cover payment of previously agreed to fees or at the specific direction of NFID
  • Consultant may not change the NFID investment policy, including the targeted asset allocation, without Finance Committee prior approval.

Investment Monitoring and Reporting Requirements

  1. Monthly: The investment consultants will provide NFID with a monthly written report showing values of each asset and all pertinent transaction details for each investment fund including:
    • All additions and withdrawals including the name and quantity of each security purchased or sold, with the price and transaction date; and
    • Any significant information or updates for prior or future month planned activity.
  1. Quarterly: The consultants will provide NFID with a quarterly assessment of the asset allocation, investment manager performance, future investment strategies, and other pertinent matters of interest to NFID.
  2. Annually: The consultants will provide annual three (3) year, five (5) year, etc. rolling performance measures by manager including expenses and a summary of all transactions in each fiscal year and relative market indexes for comparative purposes. In addition, a risk vs. return assessment will be included as part of the annual performance reporting to NFID. An annual schedule of fees and expenses incurred will be provided to the NFID Executive Director and CEO for investment management and custodial purposes.
  3. Periodic:  The consultants will provide NFID with the following management reports on a periodic basis or as requested:
    • Portfolio performance results over varying time periods
    • Performance results of comparative benchmarks over varying time periods
    • Review of current asset allocation versus policy guidelines and any recommendations for changes in asset allocation

Investment Policy Revisions

The policy will be reviewed by the Finance Committee annually or more frequently, as determined by market conditions, cash flow needs, and/or investment manager or consultant turnover.


Updated March 2024