Investment Philosophy

At SVCF, we believe that strong, consistent investment returns are best produced by maintaining a disciplined investment philosophy and process over time. At our inception, we adopted core principles that emphasize asset allocation, portfolio diversification, manager selection, diversity and a long-term view:

First, we establish a strategic asset allocation expected to achieve return objectives given a prudent level of risk throughout complete market cycles. Our allocations are reviewed every 18 to 24 months to ensure they align with changing economic circumstances and current 10-year capital market projections.

Second, we believe in the benefits of diversification. We diversify portfolios across and within asset classes, strategies and managers to increase the likelihood of achieving targeted return objectives given each portfolio’s time horizon and liquidity requirements.

Third, we seek returns primarily through investment fund managers who are expected to outperform passive approaches over three- to five-year periods. We conduct rigorous initial and ongoing due diligence, selecting managers who consider the downside risk of every investment, provide a high level of transparency into their practices and avoid use of excessive leverage.

Fourth, we hold diversity and inclusion as core values. We partner with our investment consultant to identify high-performing minority and women investment managers to ensure a diverse set of strategies, views and backgrounds is represented in the portfolios. Research supports the fact that smaller, skilled investment managers with a differentiated view tend to outperform their peers.

Finally, we are long-term investors. We avoid making changes to our strategy in response to short-term market behavior or outlook, and diligently rebalance portfolios back to policy targets. The rigor of such practice allows us to capitalize on inefficiencies, acquire undervalued assets and limit excessive risk-taking.

Each of these principles is applied to a range of investment options for individuals, corporations and nonprofits establishing funds at SVCF. Each option provides a distinct return and risk objective. Together, they provide flexibility for allocating assets in alignment with each fund’s charitable goals and risk tolerance.

Performance Review

The graph below compares SVCF performance of the Endowment, Long-Term Growth and Social Impact pools to a peer group of 141 community foundations, for the period ending December, 31, 2018. SVCF performance exceeds or meets the median return of this peer group over all time periods.

SVCF Returns

Source: Colonial Consulting-FAOG (Fiscal & Administrative Officers Group) Community Foundation Survey, December 31, 2018

We remain committed to our investment philosophy and fiduciary duties in support of the charitable goals of our donors, corporate and nonprofit clients.