Multiple Asset Fund (MAF)
Type of Fund: Diversified multiple-asset-class fund of funds.
Objective: To attain current income and capital appreciation by investing in a broad mix of different types of investments.
Who Should Invest: Investors with a relatively long time horizon who seek long-term investment growth and income from exposure to a broadly diversified portfolio comprised of stocks, bonds, real estate, and various other types of investments. Investors should be willing to experience some fluctuations in the value of the fund, though not as much as from holding a fund comprised exclusively of common stocks.
Investments: Pre-specified mix of units of other General Board funds: 10% Inflation Protection Fund, 25% Domestic Bond Fund, 45% Domestic Stock Fund, and 20% International Stock Fund.
Management: Through its investment in other General Board funds, the Multiple Asset Fund participates in the management styles of more than 30 different investment management firms selected by The General Board. Additionally, through the underlying funds, the Multiple Asset participates in investments managed by the General Board; these currently comprise less than 5% of Multiple Asset Fund assets. Prior to 1/1/06, the Multiple Asset Fund was comprised of multiple asset classes that invested directly in these same assets. While having changed structurally, the underlying investments, investment managers and styles have remained essentially unchanged.
Strategy: The pre-specified allocation of the underlying funds closely adheres to the long-term strategic asset allocation established by the board of directors. Market fluctuations may cause the actual MAF asset allocation to not conform to the pre-specified mix. The General Board will rebalance the Multiple Asset Fund back to the pre-specified mix when the actual holdings fall outside of a pre-specified range. Inflation Protection Fund holdings will be rebalanced when they fall outside of a range of 8-12% of MAF; Domestic Bond Fund holdings will be rebalanced when they fall outside of a range of 22-28% of MAF; Domestic Stock Fund holdings will be rebalanced when they fall outside of a range of 42-48% of MAF; and International Stock Fund holdings will be rebalanced when they fall outside of a range of 17-23% of MAF.
The underlying funds employ a blended use of active and passive (index) strategies. Generally, MAF will have significant index exposure for large-cap U.S. equity and will use active management for less efficient types of investments.
Performance Benchmark: The fund uses a blended benchmark to measure the success of its performance. This blended benchmark consists of the individual benchmarks of MAF's underlying funds with wieghtings equal to the proportionate weightings of the underlying funds in MAF. Specifically, the benchmark includes the following:
| 10% |
Barclays Capital U.S. Global Inflation Linked Bond Index (an index of an unmanaged group of U.S. Treasury Inflation Protected Securities with a similar maturity to that of the Inflation Protection Fund). |
| 25% |
Lehman U.S. Universal Index, ex Mortgage-Backed Securities (a very broad fixed income index that includes U.S. government debt, U.S. agency debt, corporate bonds, asset backed securities, and dollar denominated debt issued by foreign entities; the index also includes debt issued by companies and entities with speculative credit ratings). |
| 45% |
Russell 3000 Index (comprised of the 3,000 largest U.S. domiciled companies representing over 95% of the value of the U.S. stock market). |
| 20% |
Morgan Stanley All Country World Index, ex-USA (comprised of major stocks of approximately 48 countries, representing both developed and emerging markets). |
Performance Objective: As stated in the General Board's Investment Policy, the performance objective for the Multiple Asset Fund is to produce a return that, on average, exceeds that of the performance benchmark by 0.8% on average per year, net of all fees, over an extended investment cycle (10 to 20 years).
For more detailed information regarding the Multiple Asset Fund, please see the Investment Funds Description.
Fund Performance1:
Fund Market Value (as of 9/30/08): $7,162,933,825.
The following performance information is for that of the Multiple Asset Fund and includes its historic performance as both a balanced fund of funds and a fund with balanced asset classes. MAF's comparative benchmark data includes its current and former benchmark performance data. As of 1/1/2006, benchmark performance consists of MAF's current benchmark, and prior to 1/1/06, MAF's benchmark was a blend of the following indices: 35% Lehman U.S. Universal Index, 47% Russell 3000 Index, 15% MSCI Europe, Australasia, Far East Index, and 3% MSCI Emerging Markets Free Index.
Annual Performance, Net of Fees
| |
Multiple Asset Fund |
Fund Benchmark |
| 2007 |
8.4% |
8.5% |
| 2006 |
13.8% |
13.4% |
| 2005 |
8.6% |
6.9% |
| 2004 |
11.6% |
11.1% |
| 2003 |
24.8% |
23.6% |
| 2002 |
-9.4% |
-9.7% |
| 2001 |
-4.7% |
-6.0% |
| 2000 |
-3.2% |
-3.1% |
| 1999 |
19.5% |
13.1% |
| 1998 |
17.5% |
17.7% |
| 1997 |
21.1% |
20.0% |
| 1996 |
14.7% |
13.2% |
| 1995 |
26.0% |
25.9% |
| 1994 |
0.6% |
0.9% |
| 1993 |
11.4% |
11.9% |
Compounded Annual Performance, Net of Fees (periods ending 9/30/08):
| |
Multiple Asset Fund |
Fund Benchmark |
| YTD |
-13.2% |
-15.4% |
| 1 Year |
-14.3% |
-15.8% |
| 2 Yrs. |
-0.2% |
-1.5% |
| 3 Yrs. |
3.2% |
2.0% |
| 5 Yrs. |
7.2% |
6.2% |
| 7 Yrs. |
6.9% |
5.8% |
| 10 Yrs. |
6.3% |
4.8% |
1 Performance Notes:
- Performance is net of all fees and expenses which include all investment management fees, operating expenses and bank custodial fees.
- The fund benchmark has changed several times over the past ten years. The data shown for the fund benchmark represents the returns for the benchmark in place for the year specified.
Fund Holdings:
| Asset Class1 |
Target
Allocation |
Current Allocation2 |
| Domestic Stocks |
45% |
45.2% |
| International Stocks |
20% |
17.5% |
| Domestic Bonds |
25% |
26.1% |
| Inflation Protection Securities |
10% |
11.2% |
1See Glossary for definitions of the various asset classes.
2As of September 30, 2008
Notes: The U.S. Stocks allocation includes approximately $193 Million in Real Estate Partnerships. Bonds include approximately $460 Million of loans for affordable housing and community development projects and approximately $230 Million of international bonds denominated in foreign currencies.
Fund Holdings (As of 9/30/08): Download/view fund holdings in PDF format.
Expense Ratio: The General Board does not charge participants any direct fees for MAF. Through the underlying funds, MAF participants pay annual expenses of approximately 0.62% of the total fund assets. This cost includes investment management fees, operating expenses, and bank custodial fees.
Lending of Portfolio Securities: The fund seeks to earn additional income by making loans of its portfolio securities to brokers, dealers and other financial institutions. The loans will be secured at all times by cash and liquid high grade debt obligations. As with any extension of credit, there are risks of delay in recovery and in some cases even loss of rights in the collateral should the borrower fail financially. Additionally, losses could result from the reinvestment of the cash collateral received on loaned securities.
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