The Community Foundation of Westmoreland County is committed to careful investment management strategies and fiscal policies, which it believes will lead to the long-term growth of endowment fund principal and will also provide a consistent level of annual grants to charity.
Additionally, CFWC, as a component of The Pittsburgh Foundation, has adopted TPF’s Investment Committee, which is appointed by The Pittsburgh Foundation’s Board of Directors. This Investment Committee is in charge of designing, administering, and monitoring the results of these investment strategies and fiscal policies. At regular intervals, the Investment Committee evaluates the performance of the portfolio and the component investment managers relative to stipulated benchmarks and against national peer institutions.
Our investment goal is to maximize total return in any combination of its income or capital appreciation components. We believe this approach provides the fewest constraints on our investment managers and therefore, puts us in a better position to demand superior investment performance results.
Professional expertise and diligent oversight are central to the efficient and effective management of CFWC’s investments. CFWC, through our partnership with The Pittsburgh Foundation, employs professional investment and portfolio managers for the ultimate benefit of Westmoreland County.
It is an essential principle in the management of our investments that markets are, generally speaking, efficient and that portfolio managers should seek to allocate across asset classes with the beliefs that investors are compensated for taking risk, that equity investments are expected to out-perform fixed income investments, that illiquid/private equities are expected to out-perform liquid/public equities, and that in markets or asset classes where active management cannot reasonably be expected to generate superior net-of-fees performance, passive management is most effective.
CFWC does not attempt to engage in market timing, due to the unreliable nature of this practice. Instead, we believe that sound risk management is an essential component of any effective investment program with each decision and investment containing an element of risk, including the temptation to take no risk at all. Further, CFWC seeks to align the investment of its assets with the charitable intent of the donor and the donor’s fund, employing varying degrees of liquidity and risk as appropriate.
CFWC also seeks to identify and utilize the best practices which have stood the test of time in the best-managed endowments and foundations, including the prudent management of fees and the avoidance of conflicts of interest. To that end CFWC employs open architecture principles and aspires to work with best-in-class advisors and managers throughout the investment process.
In its perpetual portfolios CFWC, in alignment with TPF’s investment strategy, seeks to achieve a return equal to the target spending policy (currently 5%) plus an incremental return in excess of inflation – measured as the Consumer Price Index for Urban Consumers.
Additionally, CFWC seeks to avoid the pitfall of home country bias and looks to take advantage of the opportunities available to long time horizon investors. Moreover, the Foundation employs the well documented effects of diversification throughout its investment strategy.
Consequently, CFWC is invested in domestic, international and emerging market equities (both public and private). Equities are deemed to provide the best inflation adjusted growth component for CFWC. In an effort to reduce volatility of returns and provide a core inflation component, CFWC invests significantly in domestic fixed income assets including high yield and inflation protected bonds.
Finally, to capture the potential returns of uncorrelated assets which can also provide protection against inflation, CFWC, through the affiliation with The Pittsburgh Foundation, invests in real assets – both real estate and commodities – and hedge fund investments.
CFWC does not directly engage in the use of leverage or derivatives at the portfolio level, but will allow their use by managers who have a demonstrated skill in managing their implementation.
For more information on CFWC’s investment plan please click on the links below which link to The Pittsburgh Foundation’s Website.