Endowment Fund – UIT Spending Policy (effective April 1, 2016)
On January 26, 2016, the Board of Governors approved the new spending policy for the endowment fund, as recommended by the Trust Investment Committee. The new policy is as follows:
The University Investment Trust (UIT) will make available for spending an amount of 4.25% of the average of the four (4) preceding year’s market value, calculated on the basis of a rolling 48-month period. In addition, the Trust Investment Committee can recommend a change to the amount in any one year, with a floor set at 3.50% of the preceding 4-year period, and a ceiling of 5.00% of the preceding 4-year period. This change would only arise in circumstances where the net real rate of return of the fund had deteriorated or improved to the extent an adjustment to the rate of spending is warranted. This would depend on the net real return of the UIT over the past 5, 10 and 15 year periods; current investment market conditions; the outlook of future investment markets; and assessing the effect of such an adjustment on current and future beneficiaries of the fund. Any one-year adjustment to the spending rate would have to be recommended by the Trust Investment Committee, and approved by the University’s Board of Governors.