Endowments utilize a mix of multiple investment categories in order to diversify the portfolio, mitigate risk and enhance returns. In order to reduce a volatility of the endowment investment, there will be an allocation of the endowment dedicated to fixed income products. A portion of the fixed income allocation may include traditional conservative investments such as government instruments of varying maturities. In addition to these investments, there are fixed income alternatives which can be considered. Diversification within the fixed income allocation can mitigate risk and enhance returns if structured properly.
Endowment investment policies have become more specialized and sophisticated by including allocations outside of equity and fixed income such as commodities, real estate, hedge funds, etc. However, fixed income allocation is also prudent and necessary. While it may contain investments in treasuries, corporates or high yield, alternative investments within fixed income are recommended. It is this approach to diversification within fixed income that we recommend an endowment investment officer consider.
BeamaLife can address the fixed income alternative for endowments investment to consider which will provide enhanced returns and further diversification. Contact BeamaLife at (800) 554-7822 to discuss this opportunity for your hospital, corporate or university endowment plan.