CHAPTER I

Rotary Code of Policies 448
January 2013
For performance evaluation purposes, all rates of return will be examined on a net-of-fee
basis.
Total portfolio risk exposure and risk-adjusted returns will be regularly evaluated and
compared with other comparable total funds. The risk exposure for the overall Fund should
generally rank in the midrange (25th to 75th percentile) of comparable total funds. Riskadjusted
returns are expected to consistently rank favorably relative to comparable funds.
Normally, results are evaluated over a three-to-five year time horizon. However, shorter-term
results will be regularly reviewed and earlier action taken as required. (January 2012 Mtg.,
Bd. Dec. 158)
Source: June 2010 Mtg., Bd. Dec. 260; Amended by January 2012 Mtg., Bd. Dec. 158
69.010.4. General Investment Guidelines
Overall Fund structure targets and permissible ranges for eligible asset classes are
detailed in Rotary Code of Policies section 69.010.15.. Performance objectives for
investment managers are included in Rotary Code of Policies section 69.010.16. The
investment managers should determine that the securities to be purchased are consistent
with the guidelines expressed in this IPS and suitable for this Fund.
Full discretion, within the parameters of this IPS, is granted to the investment managers
regarding the asset allocation, the selection of securities, and the timing of transactions. All
investments will be made in accordance with a pre-approved investment management
agreement that outlines the limitation of the investable securities. The investment manager is
responsible for making an independent analysis of each security and its appropriateness as an
investment for this Fund. (June 2010 Mtg., Bd. Dec. 260)
Source: June 2010 Mtg., Bd. Dec. 260
69.010.5. Traditional or “Liquid” Investment Structure Guidelines
U.S. Equity Investment Mandates
U.S. equity holdings consist of equity securities of companies that are listed on U.S.
registered exchanges or actively traded in the over-the counter market. The market
capitalization of securities should be largely consistent with securities held in appropriate
indices. American Depository Receipts (ADRs), which are U.S. dollar denominated
foreign securities traded on the U.S. stock exchanges (e.g., Reuters, Nestle, Sony) may be
held by each U.S. equity manager in proportions which each investment manager shall
deem appropriate.
Non- U.S. Equity Investment Mandates
Non-U.S. equity securities can be accessed through local markets or American
Depository Receipts (ADRs). The investment manager may hedge currency exposure
through the use of derivative instruments. Emerging markets equity is permitted and
should be largely consistent with a pre-approved benchmark.