INVESTMENT COMMITTEE

BILL BOEHM

Director of Educational Foundation Board

Every year, generous AGRs contribute time and money to help ensure that we are fulfilling the Fraternity’s promise. Last year, even as global events combined to make it an almost historically poor year for the investment markets, was no exception. AGR Brothers, once again, LEVELED UP! Elsewhere in this report you will read about the financial investments made by generous AGRs. You will learn how those dollars are being used to support the educational and leadership development programs of Alpha Gamma Rho. My job is to report on the work of The Foundation Investment Committee; the volunteers who both safeguard and grow the dollars generously given to help Make Better Men

The Foundation investment pool totaled about $12.3 million on Dec. 31, 2022. After adjusting for deposits and withdrawals, the 2022 investment return was a negative 15.3%. A portfolio with 70% Equities and 30% Fixed Income would have resulted in a negative return of about 16.5%. So, while 2022 was an extremely difficult year for investing, the Foundation investment portfolio modestly outperformed the “market.” Since 2006, investment earnings have increased the value of donor contributions by more than $4.3 million. Donor contributions over that same timeframe exceeded payments by $6.2 million. The moving 10-year annual return of 6% has enabled the Board to authorize a 4% pay-out for endowed funds for the past several years, even as annual fluctuations in returns were experienced.

Approximately 60% of the money in the investment pool is restricted for use by specific chapters. These approximately 100 funds support chapter-specific leadership, scholarships and housing projects. The remaining 40% is the result of National Fraternity fundraising for the Loyalty Fund, the Sayre Fund, the Gene Lemon Fund, AGRconnect and National Scholarships. Largely because of the ongoing Capital Campaign for Local Chapter Excellence, additions to the investment pool in 2022 exceeded withdrawals by nearly $1 million.

The investment portfolio remains diversified. Approximately 50% of the portfolio is invested in U.S. based equities, 15% is invested with firms in non-U.S. developed nations and another 8% is invested in Emerging Market equities. Approximately 16% is invested in traditional fixed income instruments with the remaining 10% invested in alternatives. Investment risks associated with the War in Ukraine, rising interest rates and inflation have led to some adjustment in the specific funds being used in the portfolio. Equity investments, for example, are now tilted more toward high quality, dividend paying companies and less toward the Large Cap Growth sector. Reallocation decisions like this are made regularly by the Investment Committee based on the advice of our Investment Advisor.

I will close with a request — that all AGR Brothers pledge to more aggressively use the resources of The Educational Foundation. As a Foundation donor, I am comfortable with the management of the investment pool. But the real value in these generous contributions will only be found if we actually use those dollars to help Make Better Men!