The UNT Foundation Investment Portfolio is structured to provide a consistent level of inflation-adjusted returns within acceptable long-term risk levels. It consists of an allocation of assets among well-diversified equity, fixed income, and alternative investments with a ratio of 60% Growth Assets, 30% Risk Reduction Assets, and 10% Inflation Protection Assets. Managers in each of these classes are benchmarked against the appropriate style median for each.
The Foundation utilizes a select group of money managers that have a consistent performance track record versus their benchmark, a sound investment process, and experienced investment consultation.
Jensen Large Quality Growth Fund (JENIX) is a concentrated, actively managed strategy that attempts to buy high quality stocks at a discount to their intrinsic values. Jensen Investment Management manages in excess of $5 billion in one product, quality growth equity, with the bulk of the assets included in the Jensen Portfolio mutual fund. Jensen constructs the portfolio from a universe of large-cap companies that have produced a long-term track record of persistently high returns on shareholder equity (at least 15% over each of the last 10 years). The fund is concentrated in 25 to 30 stocks, which means that a relatively percentage of its assets may be invested in a limited number of issuers of securities. The quality purchase criteria typically keeps Jensen out of energy and other commodity or cyclical industries. Tobacco stocks are also excluded. Jensen believes that strong, enduring business performance combined with sustainable competitive advantages yields long-term growth and capital appreciation while minimizing investment risk. Additional information about Jensen Investment Management and the Jensen Quality Growth Fund can be found on their website at www.jenseninvestment.com.
Sands Capital Management Select Growth manages a concentrated stock portfolio of large, well-established primarily U.S.-based companies it believes have the potential for further growth. Sands Capital applies a growth-oriented philosophy rooted in the belief that, over time, stock prices reflect the earnings growth of the underlying business; and that there are few relatively true outstanding businesses that can sustain earnings growth while maintaining a leadership position over the long term. The investment team employs a bottom-up fundamental process that focuses on six key investment criteria encompassing, earnings growth, leadership, competitive advantage, focus, financial strength and valuation. Additional information about Sands Capital Management and the Sands Capital Select Growth Strategy and can found on their website at www.sandscapital.com.
Vanguard Dividend Appreciation Index Fund (VDAIX) tracks the performance of the NASDAQ US Dividend Achievers Select index, a subset of the NASDAQ US Broad Dividend Achievers Index, administered exclusively for Vanguard by NASDAQ. The index includes only those stocks with a history of at least 10 consecutive years of dividend increases and at least $500,000 in average daily trading volume. The index also filters the universe to eliminate certain segments such as publicly traded limited partnerships and REITs. The fund focuses on high-quality companies that have both the ability and the commitment to grow their dividends over time. One of the fund’s risks is the possibility that returns from dividend-paying stocks will trail returns from the overall stock market during any given period. Another risk is the volatility that comes with the fund’s full exposure to the stock market. Launched in 1975, The Vanguard Group, Malvern, Pennsylvania, is among the world’s largest and cost effective equity and fixed income managers. Additional information about the Vanguard Group and the Vanguard Dividend Appreciation Index Fund can be found on Vanguard’s website at www.vanguard.com.
Vanguard Total Stock Market Index (VITSX) is a passively managed mutual fund that seeks to track the investment performance of the CRSP U.S. Total Market Index, which represents approximately 100% of the investable U.S. stock market and includes large-, mid-, small-, and micro-cap stocks regularly traded on the New York Stock Exchange and NASDAQ. The fund invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full index in terms of key characteristics, such as industry weightings, market capitalization, and dividend yield. The experience and stability of Vanguard’s Equity Investment Group (the “group”) have permitted continuous refinement of techniques for reducing tracking error. The group uses proprietary software to implement trading decisions that accommodate cash flow and maintain close correlation with index characteristics. Vanguard’s refined indexing process, combined with low management fees and efficient trading, has provided tight tracking net of expenses. Launched in 1975, The Vanguard Group, Malvern, Pennsylvania, is among the world’s largest and cost effective equity and fixed income managers. Additional information about the Vanguard Group and the Vanguard Total Stock Market Index Fund can be found on Vanguard’s website at www.vanguard.com.
Vanguard Value Index Fund (VIVIX) invests in stocks of large U.S. companies in market sectors that tend to grow at a slower pace than the broad market; these stocks may be temporarily undervalued by investors. This low-cost index fund follows a buy-and-hold approach, and invests in substantially all of the stocks contained within its broad benchmark. In addition to general stock market volatility, the fund’s primary risk comes from the fact that at times its focus on large-capitalization value stocks may underperform the broader stock market. Vanguard Value Index Fund seeks to track the investment performance of the CRSP U.S. Large Cap Value Index, an unmanaged benchmark representing U.S. large-capitalization value stocks. The fund attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The group uses proprietary software to implement trading decisions that accommodate cash flow and maintain close correlation with index characteristics. Vanguard’s refined indexing process, combined with low management fees and efficient trading, has provided tight tracking net of expenses. Launched in 1975, The Vanguard Group, Malvern, Pennsylvania, is among the world’s largest and cost effective equity and fixed income managers. Additional information about the Vanguard Group and the Vanguard Dividend Appreciation Index Fund can be found on Vanguard’s website at www.vanguard.com.
MFS International Value Equity Fund (MINIX) is actively managed and designed to identify opportunities where the long term value of a company is not adequately reflected in its stock price. The MFS International Value Equity strategy has an all-capitalization, high quality value investment style. The strategy has historically performed well in severe down markets, preserving capital relative to the market. MFS may invest a large percentage of the fund’s assets in issuers in a single country, a small number of countries, or a particular geographic region. MFS focuses on investing the fund's assets in the stocks of companies it believes are undervalued compared to their intrinsic value (value companies). These companies may have stock prices that are higher relative to their earnings, dividends, assets, or other financial measures than companies generally considered value companies. The research process is a bottom-up stock selection. Sector, industry, country, and regional weightings are the residual of the bottom-up stock selection process. The International Value Equity portfolio typically holds 80 to 120 holdings. Potential risks in the strategy include stock market/company risk, foreign and emerging market risk, currency risk and other risks inherent with investing in international companies. Additional information about MFS (Massachusetts Financial Services Company) and the MFS International Value Fund can be found on their website at www.mfs.com.
Morgan Stanley International Equity (MSIQX) is an actively managed institutional mutual fund in the international large-cap asset class. The strategy relies on a disciplined, quality-bias investment approach to help capitalize on opportunities in the international equity markets. Portfolios are actively managed by consistently applying strict investment criteria to help identify attractive business franchises at a discount to their long-term fair value. In-depth fundamental company research is paramount to the team’s bottom-up stock selection process with emphasis on companies with the ability to generate high returns on capital employed, recurring cash flows and capable management. This style discipline is maintained by strict adherence to the team’s rigorous and longstanding investment process and cash flow-based valuation criteria. Additional information about Morgan Stanley Investment Management and the Morgan Stanley International Equity Fund can be found on their website at www.morganstanley.com/im.
Sands Emerging Markets Growth seeks long-term capital appreciation by investing primarily in companies located in emerging market countries and opportunistically, in frontier market countries. The strategy seeks to identify leading growth businesses that meet their following criteria: (1) sustainable, above-average earnings growth, (2) leadership position in a promising business space, (3) significant competitive advantages/distinctive business franchise, (4) clear mission and value-added focus, (5) financial strength, and (6) rational valuation relative to the market and business prospects. The investment team follows a similar process and philosophy as its Select Growth strategy. Additional information about Sands Capital Management and the Sands Capital Select Growth Strategy can found on their website at www.sandscapital.com.
TS&W International Small Cap Equity Fund is an actively managed equity portfolio focused on identifying and investing in undervalued international small and mid-cap sized companies, primarily in the developed international markets. TS&W believes that value wins over time, in-depth fundamental research can add value due to market inefficiencies, and risk management is critical to long-term success. The firm’s process is based on a four-factor model to build portfolios of undervalued stocks from the bottom-up. Additional information about Thompson, Siegel &I Walmsley LLC and the TS&W International Small Cap Fund can found on their website at www.tswinvest.com.
Vanguard Developed Markets Index Fund (VTMNX) is a passively managed mutual fund in the international large-cap equity asset class that seeks to replicate the performance of the FTSE Developed ex-North America Index, an unmanaged benchmark representing developed markets in Europe and the Pacific region. The fund attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The fund invests in companies located in Europe, Asia, and Australia, which make up about 75% of the non-U.S. equity market. Since its focus is on non-U.S. stocks, the fund can be more volatile than a domestic fund. In addition to stock market risk, the fund is also subject to currency risk and country/regional risk. The Fund utilizes a full replication approach by investing all, or substantially all, of its assets in the stocks that make up the Index, holding each stock in approximately the same proportion as its weighting in the Index. Additional information about the Vanguard Group and the Vanguard Developed Markets Index Fund can be found on Vanguard’s website at www.vanguard.com.
Vanguard Emerging Markets Stock Index Fund (VTMIX) is a passively managed, institutional class mutual fund that seeks to track the performance of the FTSE Emerging Index. The fund invests substantially all (normally about 95%) of its assets in the common stocks of the index, while employing a form of sampling to reduce risk. The FTSE Emerging Index is a market-capitalization weighted index representing the performance of large- and mid-cap companies in emerging markets such as Brazil, Russia, India, Taiwan, and China. Stocks of companies in emerging markets tend to be more volatile than those in developed countries, which could imply the potential for greater long-term returns. Along with this potential, however, come risks such as currency and political risks. The experience and stability of Vanguard’s Equity Investment Group have permitted continuous refinement of techniques for reducing tracking error. The group uses proprietary software to implement trading decisions that accommodate cash flow and maintain close correlation with index characteristics. Vanguard’s refined indexing process, combined with low management fees and efficient trading, has provided tight tracking, net of expenses. Additional information about the Vanguard Group and the Vanguard Emerging Markets Index Fund can be found on Vanguard’s website at www.vanguard.com.
Renaissance Institutional Equities Fund "RIEF" manages a diversified long/short equities portfolio, maintaining a net 100% long exposure to the equity markets. The fund’s objective is to provide returns in excess of the S&P 500 over a market cycle at half the volatility. RIEF employs a systematic scientific quantitative approach that is disciplined, scalable and efficient. RIEF has over 90 PhDs on staff that continually hone and monitor their investment model.
Parametric Defensive Equity Fund manages a balanced portfolio of S&P 500 exchanged traded funds and U.S. Treasury Bills. An option selling overlay strategy is employed by the manager with a fund objective of providing comparable total returns to the S&P 500 index at substantially less volatility. Given Parametric’s balanced strategy, the fund allocation is split 50/50 between growth assets and risk reduction assets in the allocation profile. Additional information about Parametric Risk Advisors LLC can be found on their website at www.parametricportfolio.com.
J.P. Morgan Core Bond Fund (WOBDX) is an actively managed, intermediate-term, investment-grade bond fund which seeks to provide regular income and consistent returns while potentially cushioning against volatility. Management attempts to take advantage of inefficiencies in the fixed income market to maximize total return in a diversified portfolio of primarily intermediate and long-term, investment grade debt securities. The team uses a bottom-up, value-oriented approach to identify high quality securities that are inefficiently priced and rotate between sectors based on expected total return and valuation analysis. Additional information about J.P. Morgan Investment Management and the JPMorgan Core Bond Fund can be found on their website at www.jpmorganfunds.com.
Loomis Sayles Core Plus Fund (NERYX) is a value oriented, actively managed mutual fund that provides exposure to the U.S. fixed income asset class. The fund invests primarily in quality corporate and U.S. government bonds, generally maintaining an average effective maturity of ten years or less. Tactical investments in non-benchmark sectors are a key source of potential return for this strategy. Guidelines provide flexibility to invest up to 20% of the portfolio in assets rated below BBB-. Limited investments are also authorized in non-dollar and emerging markets debt investments. Portfolio construction is driven by a combination of bottom-up security selection and top-down macroeconomic analysis. Portfolio risks include interest rate risk, credit risk, and foreign currency exchange risk to the extent investments are made in non-U.S. dollar denominated securities. Additional information about Loomis Sayles & Company and the Loomis Sayles Core Plus Core Bond Fund can be found on their website at www.loomissayles.com.
Forester Diversified, Ltd. is a multi-strategy hedge fund of funds that targets a return in excess of the broad public markets with less annualized volatility over a full market cycle. Forester is typically diversified across approximately 30 to 40 managers, and will typically allocate over 50% of the fund to long/short equity strategies. Forester takes a proactive collaborative approach to manager sourcing, using a bottom-up fundamental research process. Forester focuses on managers with a fundamental investment approach, typically avoiding quantitative strategies.
Pinehurst Institutional Limited is a multi-strategy hedge fund of funds that targets a return of T-Bills plus 7% with annualized volatility of 6% over a full market cycle. Pinehurst is typically diversified across approximately 25 to 30 core funds. The primary strategy is long/short equity which historically represents approximately 35-55% of the allocation. The manager, Corbin Capital Partners, prefers fundamentally-oriented managers that are highly opportunistic, implementing strategies that are not reliant on excessive leverage. Portfolio level hedges may be held in an effort to reduce systematic risk.
Vanguard Total Bond Market Fund (VBTIX) is a passively-managed mutual fund designed to provide broad exposure to U.S. investment grade bonds. Reflecting this goal, the fund invests about 30% in corporate bonds and 70% in U.S. government bonds of all maturities (short-, intermediate-, and long-term issues). Because the fund invests in all segments and maturities of the fixed income market, the fund can be used to provide core bond exposure. The fund seeks to track the investment performance of the Barclays U.S. Aggregate Float Adjusted Index, an unmanaged benchmark representing the broad U.S. bond market. The fund’s passive investment style uses a sampling technique to closely match key benchmark characteristics: sector weight, coupon, maturity, effective duration, convexity, and credit quality. Optimized sampling is designed to avoid the expense and impracticality of fully replicating the index. Additional information about the Vanguard Group and the Vanguard Total Bond Market Index Fund can be found on Vanguard’s website at www.vanguard.com.
Principal Global Real Estate Fund (POSIX) is an actively managed mutual fund seeks to generate a total return. The fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of U.S. and non-U.S. companies principally engaged in the real estate industry at the time of each purchase and is non-diversified. It invests in equity securities of small, medium, and large market capitalization companies. The fund typically invests in foreign securities of at least three different countries and at least 30% of its assets in foreign securities. The investment team believes that equity markets can overreact to news which provides opportunities to add value over and above the market over an investment horizon. The team employs a four step process in managing the portfolio including (1) fundamental stock research, (2) security selection, (3) portfolio construction and (4) performance review. Additional information about Principal Funds, Inc. and the Principal Global Real Estate Securities Fund can be found on their website at www.principalfunds.com.
Van Eck Global Hard Assets Fund (GHAIX) is an actively managed mutual fund that seeks long-term capital appreciation through investment in stocks of companies involved in various hard asset sectors—energy (including alternatives), base and precious metals, agriculture, paper and forest products and industrial equipment . The firm utilizes an index agnostic, fundamental, value-oriented approach to managing the fund and thinks that its ability to diversify among different commodity sectors is a key source of its ability to add value. Van Eck believes that its fundamental, bottom-up stock selection process will enable them to identify undervalued companies with catalysts for growth. Additional information about Van Eck Securities Corporation and the Van Eck Global Hard Assets Fund can be found on their website at www.vaneck.com.