For a non-profit enterprise seeking to design effective investment portfolios for its asset pools, understanding the role of each of those asset pools is a crucial first step.
The organization's goals and exposures can impact all parts of its portfolio construction process, from initial broad decisions on risk tolerance to more targeted decisions on asset-class exposures and investment vehicle preferences.
Given that each non-profit hospital and health system has its own unique situation, this Russell Viewpoint offers a framework for evaluating asset-allocation decisions. We highlight the need to consider and discuss the following:
- Multiple roles of each asset pool within the enterprise
- Market environments in which the stability of the individual pools would become most important
- Any income statement implications of portfolio decisions