Edition Date: January 27, 2021
Section I – Purpose
The purpose of this statement of Investment Policy to serve as a guide to the Board of
Directors in their pursuit of the goals of MDSC and to serve as a document that
expresses the investment objectives, to define the responsibilities of the Board of
Directors and any other parties involved in managing the Organization’s investments,
and to provide target assist allocations, permissible investments and diversification
This statement represents the current policies and practices as determined by the
MDSC Board of Directors. It is a dynamic document subject to review, and may be
redrawn periodically in response to changes in policy, operating objectives, or
Section II – Investment Objectives
The Maryland Deaf Senior Citizens, Inc. seeks to meet its overall investment objectives
through investment in a broadly diversified portfolio of cash equivalents, fixed income
securities (government and corporate), common stocks, preferred stocks, convertible
securities, mutual funds, and other alternative non-publicly-traded investments.
The primary objective for these investment categories shall be to provide for consistent
long-term growth of principal and income without undue exposure to risk. The
objective for these fund categories listed above is to achieve a total return including
appreciation which will satisfy current financial needs, protect and increase long term
inflation adjusted value, and minimize short-run volatility. MDSC seeks to supplement
these objectives by attaining prudent returns on overall assets with tolerable risk based
The optimal risk level shall be sought through considering such factors as the time
horizon of investments, liquidity needs, and the need for sufficient real returns for long
term growth and protection of assets. Risk factors shall also include general market and economic conditions, trends, yields, interest rates and changes in fiscal and monetary
Investments and overall investment strategy shall be in harmony with anticipated
patterns in income growth and distributed cash flow, support trends in the growth of the
Maryland Deaf Senior Citizens, Inc., and its program development and related funding
Section III – Decision Making Strategies
Investment decisions and monitoring shall be made by the Investment Management
Committee in accordance with this Investment Policy. Monitoring shall involve
processes that combine market liquidity, portfolio management, and research on
particular securities. Fundamental considerations are based on all available market
analysis, with emphasis on potentials for high total return, which includes current
income and capital appreciation in value, acceptable risk factors, diversification,
timeliness, available company news, industry-related events, and investor perceptions.
Any and all investment decisions, which would materially change the overall portfolio of
MDSC, must be in accordance with allocation specifications and limits (Section V) as
well as performance measurement standards (Section VI).
Section IV – Operating Objectives
In pursuing the goals of MDSC, the Board of Directors, and its investment
subcommittee seeks to operate at the highest level of prudence and effectiveness. In
performance of its duty, the Committee shall act solely in the interests of MDSC and its
mission. The Committee shall operate in accordance with written policy and shall
scrupulously avoid conflicts of interest.
The Investment Management Committee shall act with skill, care, prudence, and ensure
diversification of assets and optimal return to counterbalance the risk of large losses.
The Chairperson of the Investment Management Committee shall perform as the
authorized agent for the portfolio of MDSC and shall make investment decisions,
working in concert with goals established by the Board of Directors. The members of the
Investment Management Committee shall be empowered to act in place of the
Investment Management Committee chairperson’s absence on behalf of MDSC.
Any investment that is not expressly permitted under this Policy must be formally
reviewed and approved by the Board of Directors.
The Maryland Deaf Senior Citizens, Inc. may use the services of professional
investment managers, on recommendation of the Investment Management Committee.
In the utilization of such managers, their selection, retention, and monitoring shall be
done in a prudent manner. Quarterly performance review shall monitor manager due
diligence, reporting quality, market research and analysis capabilities, investment
consistency and return relative to investment objectives as outlined in this Policy, and 3
investment risk as measured by asset concentration, exposure to extreme economic.
conditions, and market volatility. Change in managers may occur at any time, with or
without cause, in the event of questionable progress toward attainment of MDSC
investment objectives. Oversight shall include meetings with or formal review
presentations by said managers at least once yearly. Management fees shall be
charged only for assets under management, and shall not charge commissions on
The Board of Directors will endeavor to operate the Organization’s investment program
in compliance with all applicable state, federal and local laws and regulations
concerning management of investment assets. MDSC shall maintain an investment no
less than $310,000 with the investment company.
The Board of Directors and the Investment Management Committee shall strive to keep
abreast of information relevant to the pursuit of their duties, with the assistance of
investment advisors/managers. The Investment Management Committee and the Board
of Directors shall review the performance of all investments on a quarterly basis.
Further, the chair of the Investment Management Committee shall meet with all
advisors/managers at least once yearly to review and stay on top of all MDSC’s
investment holdings, including review of performance goals (past, current, and future)
for all investments.
Sufficient information shall be sought to ensure that investment and allocation decisions
shall be made with an understanding of the broad investment context, including capital
market cycles, the business cycle, and likely the performance of various asset classes
Decision-making shall be objective, systematic, and documented. Care shall be taken to
maintain an adequate record keeping and monitoring system to facilitate monitoring, not only of investment performance, but also of any relevant factors in the operations of
Section V – Diversification
MDSC will maintain a reasonable diversification of investment assets between asset
classes and investment categories at all times. Investments in the equity securities of
any one company shall not exceed [5%] of the portfolio nor shall the total securities
position (debt and Equity) in any one company exceed [10%] of the portfolio.
Reasonable sector allocations and diversification shall be maintained. No more than
[25%] of the entire portfolio may be invested in the securities of any one sector.
Investment within the investment portfolio should be readily marketable. The investment
portfolio should not be a blind pool; each investment must be available for review.
Section VI – Asset Allocation
Investment decisions as to which asset classes are used shall play an important role in
determining optimal portfolio performance over time. Allocation decisions shall be made in accordance with the above general objectives, using financial modeling as well as historical consideration in terms of liquidity, return, growth, time horizon, and
Permitted Securities – Permitted investments shall focus on three asset classes:
equity securities, debt (fixed income) securities, and cash and equivalents.
- Equity Securities
- Common stocks
- Corporate stocks
- Exchange Traded Funds (ETF)
- Preferred stocks
- Convertible securities
- Mutual funds
- International Equities (added 1/13/2015)
- Debt (Fixed Income) Securities
- Investment-grade corporate bonds
- U.S. treasury securities
- U.S. government agency securities
- Fixed income mutual funds
- Fixed income Exchanged Traded Funds (ETF)
- Closed-End Mutual Funds (CEF)
- Open-End Mutual Funds
- Structured Investments (added 1/13/2015)
- Cash and Equivalents
- Money market funds
- Treasury bills
- Certificates of deposit (CDs)
- Short term debt securities
- Deposit (savings) accounts
|Asset Allocation Range||Target||Upper Limit|
|Equity Securities||25%||20 – 40%|
|Fixed Income||30%||20 – 50%|
|Cash and Equivalents||5%||0 – 15%|
Rebalancing shall be done on a semi-annual basis or more frequently
if deemed necessary.
Section VI – Performance Measurement Standards
The benchmarks which shall be used in evaluating the performance of the two
investment categories shall include the following:
S&P 500 Index (equities) – Exceed the average annual return of the index over a full market cycle of three to five years.
Lehman Brothers Government/Corporate Index (fixed income) – Exceed the average annual return of the index over a full market cycle of three to five years.
Additional benchmarks, such as the Russell 2000 Index, Dow Jones Industrial Index,
NASDAQ 100 Index, and others may be used as appropriate.
Section VII – Amendments and Modifications
This Investment Policy shall be interpreted and applied judiciously to achieve the
purpose and overall investment objectives of the Maryland Deaf Senior Citizens, Inc.
The Investment Management Committee may amend, modify, or clarify this Investment
Policy at any time and from time to time, subject to approval of MDSC Board of
Directors, to be consistent with the purposes of MDSC and in the interest of pursuit of
the objectives of the MDSC.