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INVESTMENT POLICY/GUIDELINES
for
CONSTRUCTION MANAGEMENT ASSOCIATION OF AMERICA
I.
Purpose of the CMAA Investment Policy:
The CMAA Investment Policy is designed to provide guidance for the investment of
CMAA funds and to ensure appropriate CMAA Investment Committee, Executive
Committee and Board of Directors oversight and compliance. The goals of the CMAA
Investment Policy are to (1) provide liquidity; (2) protect assets; (3) preserve principal;
and (4) maximize returns. Given that these funds are primarily of an operational nature,
conservative investment will be practiced at all times (see section VII).
II.
Allocation of Funds:
Overall, CMAA funds will be divided into three categories in order to meet anticipated
annual cash flow needs for CMAA operations and to provide long-term investment of
remaining funds:
A)
Current Operating Funds:
Defined as funds needed to meet anticipated program and general operating
expenditures for the next 1 to 2 months. The objectives of these funds are daily
liquidity, preservation of principal and money market or high-yield checking
account returns.
B)
Intermediate Operating Funds:
Defined as funds in excess of current operating needs as defined above. The
function of these funds is to be available to replenish current operating funds as
needed and to be available to meet anticipated cash flow needs defined as 2 to 6
months of most current year budgeted operating expenditures. The objectives of
these funds are preservation of principal, protection of assets, monthly liquidity,
and market rate returns.
C)
Long-term Investment Funds:
Defined as funds in excess of current and intermediate operating fund needs as
defined above. The function of these funds is long-term investment of excess
operating funds and to be available to replenish intermediate operating funds as
needed. The objectives of these long-term funds in total are to provide the
opportunity for growth, protection of principal against inflationary risks, and
provide a reasonable level of income.
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III.
Investment Strategies:
Using the investment vehicles outlined below, the following investment guidelines will
be adhered to for each category of Funds.
A)
Current Operating Funds:
100%
Checking, Savings & Money Market
Accounts
These are defined as accounts meeting federally insured requirements or backed
by United States government securities and/or obligations.
B)
Intermediate Operating Funds:
0%
30%
0%
to
to
to
50%
90%
20%
Cash & Equivalents
Certificates of Deposit
Fixed Income
Cash and equivalents are defined as saving and money market accounts meeting
federally insured requirements or backed by United States government securities
and/or obligations. Fixed income investments are restricted to United States
securities and/or obligations.
C)
Long-term Investment Funds:
0% to
20% to
20% to
10%
80%
70%
Cash & Equivalents
Equity
Fixed Income
The above funds are limited to investment in eligible investment vehicles listed
below.
IV.
Eligible Investment Vehicles:
Current Operating Funds:
A.
B.
C.
Checking accounts.*
Market rate saving accounts.*
Money market accounts (FDIC or U.S. government securities/obligations).
Intermediate Operating Funds:
A.
B.
Market rate saving accounts.*
Money market accounts (FDIC or U.S. government securities/obligations).
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C.
D.
E.
F.
Certificates of Deposit (maturity of 12 months or less).*
U.S. Treasury and Federal Agency obligations.
Repurchase agreements using U.S. government agencies.
Bond mutual funds using U.S. government agencies.
Long-term Investment Funds:
A.
B.
C.
D.
E.
F.
G.
H.
Money market accounts (FDIC or U.S. government securities/obligations).
Certificates of Deposit.*
U.S. Treasury and Federal Agency obligations.
Repurchase agreements using U.S. government agencies.
Bond mutual funds using U.S. government agencies.
Bond mutual funds using commercial paper not rated lower than AA.
U.S. equity mutual funds.
Foreign equity mutual funds.
*Only FDIC insured institutions are eligible.
V.
Oversight
The CMAA Investment Committee will provide oversight of this investment policy.
CMAA management will provide a quarterly report to the CMAA Investment Committee
on the investments, presenting such information as the inventory of investments, net
income earned, percentage share of each category of investment, and other information
that may be requested by the CMAA Investment Committee.
In the management of Current Operating Funds, personnel having authority to commit
funds are the Board Chair, President, Chief Operations Officer, and Investment
Committee Chair.
All Intermediate and Long-Term transactions of $95,000 or more will require the written
approval of the Chair of the Investment Committee and the Board Chair. The President
can authorize investment transactions below these limits with appropriate and timely
notification made to the Chair of the Investment Committee.
No less than annually, the CMAA Investment Committee will review the performance of
the portfolio and this investment policy and report their findings to the Board of Directors
along with any recommended changes they deem necessary.
VI.
Procurement
Designated CMAA personnel will use competitive purchasing procedures and advice of
professional investment advisors, as may be appropriate, to ensure compliance with this
investment.
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VII.
General Guidelines and Restrictions
Given that these funds are of an operational nature and the damage from a large
permanent loss would outweigh any potential benefit of a large gain, conservative
investment strategies will be practiced. These policies include the concept of
diversification. Therefore, the CMAA Investment Committee may not invest more than
15% of its bond or equity assets in any one issuer or industry (other than obligations of
the U.S. Government, its agencies or instrumentalities).
Additionally, the organization may not:





Purchase securities on margin.
Purchase individual equities
Make short sales of securities.
Invest in real estate, commodities, or commodities contracts.
Directly invest in options, futures, or other derivative securities.
VIII.
Investment Files
CMAA management will maintain files containing current information on each
investment vehicle.
Adopted by CMAA Board of Directors on 10/6/2007, Chicago, IL
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