National Staff Organization

United to Lead, to Promote, to Secure, and to Defend

United to Lead, to Promote, to Secure, and to Defend

NSO AFFILIATE PRESIDENT HANDBOOK

NSO Investment Policy

Statement of Investment Policy, Objectives, and Guidelines of the National Staff Organization

SCOPE OF THIS INVESTMENT POLICY #

This policy reflects the purpose, objectives, and constraints with respect to all investment accounts held in the name of the National Staff Organization (NSO).

PURPOSE OF THIS INVESTMENT POLICY STATEMENT #

This investment policy statement is set forth by the Executive Committee of NSO to:

  1. Define and assign the responsibilities of all involved parties.
  2. Establish a clear understanding, for all involved parties, of the goals and objectives regarding the investment of organizational assets.
  3. Establish a basis for evaluating investment results.
  4. Manage invested assets according to prudent standards as established in common trust law.
  5. Establish the relevant investment horizon for which the Organization’s assets will be managed.

This statement reflects the philosophy and attitude which will guide the investment of the organization’s

assets. It is intended to be sufficiently specific to be meaningful, yet flexible enough to be practical.

RESPONSIBILITIES OF THE INVESTMENT CONSULTANT(S) #

The Investment Consultant’s role is that of a discretionary advisor to the NSO Investment Committee. Investment advice concerning the management of invested assets will be offered by the Investment Consultant, and will be consistent with the investment objectives, policies, guidelines, and constraints as established in this statement. Specific responsibilities of the Investment Consultant include:

  1. Assisting in the development and periodic review of this investment policy.
  2. Providing “due diligence” and research on the organization’s investments.
  3. Monitoring the performance of the investments.
  4. Providing the Investment Committee with sufficient information and reporting to allow it to evaluate the progress toward the investment objectives and compliance with this policy statement.
  5. Communicating matters of policy and performance to the Investment Committee.
  6. Reviewing investment history, historical capital markets performance and the contents of this investment policy statement to any newly appointed members of the Investment Committee.

GENERAL INVESTEMENT PRINCIPLES #

  1. Investments shall be made to provide long-term, financial stability of the National Staff Organization.
  2. The organization’s assets shall be invested with the care, skill, prudence, and diligence under the circumstances then prevailing, that a prudent person acting in like capacity and familiar with such matters would use, in the investment of assets of like character and with like aims.
  3. Investment of the assets shall be so diversified as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.

INVESTMENT MANAGEMENT POLICY #

  1. Preservation of Capital – Consistent with their respective investment styles and philosophies, investment managers should make reasonable efforts to preserve capital, understanding that losses may occur in individual securities.
  2. Risk Aversion – Understanding that risk is present in all types of securities and investment styles, the Investment Committee recognizes that some risk is necessary to produce long-term investment results that are sufficient to meet the Organization’s objectives.
  3. Liquidity — Sufficient cash and cash alternatives to meet the emergent needs of the organization with minimal impact on the assets of the organization because of market prices.

INVESTMENT OBJECTIVES #

The primary objective for invested assets shall be the long-term growth of capital, with an emphasis on aggregate return from capital appreciation and dividend and interest income, while avoiding excessive risk. Short-term market volatility will be tolerated in as much as it is consistent with the volatility of a comparable market index.

ASSET ALLOCATION #

To meet the investment objectives of the National Staff Organization, the following allocations shall be maintained by the Investment Consultant(s):

  1. Not more than 70% of the assets of the organization shall be held in any single asset class (e.g. equities, bonds, cash and cash equivalents).
  2. Not less than 20% of all individually owned stocks, based upon total dollars of assets, shall have an Environment, Social, and Governance (ESG) rating of A or better on the MSCI rating scale.

Investment accounts shall be rebalanced/reallocated, on a quarterly basis, to meet these requirements.

ALLOWED ASSETS #

  1. Cash Equivalents
    • Treasury Bills
    • Money Market Funds
    • Commercial Paper
    • Certificates of Deposit
  2. Fixed Income Securities
    • U.S. Government and Agency Securities
    • Corporate Notes and Bonds
    • Mortgage Backed Bonds
    • Preferred Stock
    • Fixed Income Securities of Foreign Governments and Corporations
    • Collateralized Mortgage Obligations (PAC CMOs) or other CMOs
  3. Equity Securities
    • Common Stocks
    • Initial Public Offering Stocks/Syndicate Equity
    • Secondary Offering Stocks/Syndicate Equity
    • Convertible Notes, Bonds and Preferred Stock
    • American Depository Receipts (ADRs) of Non-U.S. Companies
    • Stocks of Non-U.S. Companies (Ordinary Shares)
  4. Mutual Funds/Exchange Traded Funds
    • Mutual Funds/Exchange Traded Funds which invest in securities otherwise allowed in this statement
  5. Alternative investments
    • Managed FuturesTraded Hedge Funds

PROHIBITED ASSETS #

  1. Commodities and Futures Contracts
  2. Private Placements
  3. Options
  4. Venture-Capital Investments

PROHIBITED TRANSACTIONS #

  1. Short Selling
  2. Margin Transactions

PERFORMANCE REVIEW AND EVALUATION #

Performance reports, generated by the Investment Consultant(s), shall be compiled at least annually, and communicated to the Investment Committee for review. The investment performance of all accounts, as well as asset components, will be measured against commonly accepted performance benchmarks.

Adopted by the National Staff Organization Executive Committee the 7TH day of June, 2021.

Treasurer
Ohio Professional Staff Union

Updated on February 5, 2024