“[O]ver the past five years the portfolio has met or exceeded market benchmarks despite the shift away from fossil fuel holdings,” said Deborah Cronin, vice president of Finance & Administration. “The College’s endowment is managed for the long-term benefit of the College, and it is anticipated that investment earnings will meet long-term market performance benchmarks.”
In early 2008, the Investment Committee of the Board of Trustees asked Spinnaker Trust of Portland, Maine, Unity’s endowment manager, to decrease exposure to large energy companies and to move toward clean energy. When it announced it was divesting in November 2012, Unity was at 3% exposure. The timeline allowed Unity’s investment manager to prudently shift investments, including fixed income bonds, over a five-year horizon.
Back when Unity began the process in 2008, its exposure to big energy was at approximately 10% of total endowment, said Cronin. “The strategy has been to shift investments in developed international countries to non-energy sectors,” Cronin explained. “Investments in emerging international countries cannot be moved specifically out of fossil fuels, as there are no sector specific exchange-traded funds at this time. Thus, the endowment target is less than 1% in, not 0%, as the emerging international sector needs some fossil fuel tolerance.”
Unity’s endowment is diversified both by asset class (equities, bonds, and cash equivalents) and within asset class (within equities by economic sectors, industry, and size). The portfolio is invested in U.S. equities (37%), international equities (20%), fixed income (35%), other (3%), and cash equivalents (5%). Exchange-traded funds (ETFs) are the investment vehicle most commonly used.