GRAND LODGE OF WISCONSIN Financial Reporting & Investment Management Oversight Presented by Jeff Bryden - Grand Treasurer

FINANCIAL RESPONSIBILITIES Maintain accurate current financial records Deposit receipts and pay bills on time File annual financial reports with Grand Lodge Establish an annual independent audit 52.02 Annual Reports. Each lodge shall file its Annual Report with the Grand Secretary by February 15th in each year. In case of its failure so to do it shall be charged two dollars for each day’s delay commencing on February 16th, unless such default is excused by the Grand Lodge. The Grand Secretary shall have this regulation printed on the report blanks furnished to the lodge Secretaries.   52.03 Affiliated Foundations Each lodge shall attach and file with its Annual Report complete information relating to all affiliated foundations organized in connection with said lodge or by its members. Said information shall include detailed operating statements, balance sheet and copies of income tax returns. Excel: Software developed and manufactured by Microsoft Corporation that allows users to organize, format, and calculate data with formulas using a spreadsheet system broken up by rows and columns. Available for PC or MAC.

FINANCIAL RESPONSIBILITIES

FINANCIAL RESPONSIBILITIES

FINANCIAL RESPONSIBILITIES

THE INVESTMENT MANAGEMENT PROCESS Evaluate Investment Goals and Objectives Execute a Written Investment Policy Statement Open an Investment Account Determine Investment Process and Approach Establish an Appropriate Asset Allocation

CAPITAL (INVESTMENT) FUNDS LODGE FINANCIAL GOALS AND RESPONSIBILITIES OPERATING FUNDS CAPITAL (INVESTMENT) FUNDS Lodge Financial Goals Match Operating Income & Expenses Establish Dues Discipline Price Activities Appropriately Lodge Capital Goals Restrict Capital Expenditures to Building Needs, Charitable Endeavors and Service and Assistance Match Investment Needs with the Proper Portfolio Allocation ULTIMATE GOAL: Eliminate Using Capital Funds to Balance Operating Needs

Components of Investment Return [Brinson, Hood & Beebower (1986)] ASSET ALLOCATION Components of Investment Return [Brinson, Hood & Beebower (1986)] Security Selection – 4% Market Timing– 2% Asset Allocation – 94% Diversification is the centerpiece of JBIM’s balanced portfolio investment approach. Volatility is inherent in investing. Balancing risks and market volatility with expected returns requires a broadly diversified portfolio and a long-term investment horizon. Maintaining a disciplined methodology to asset rebalancing is crucial to success.

Liquidity Requirements Asset Diversification ASSET ALLOCATION Liquidity Requirements Temporary Safe Haven Risk Management CASH Income Generation Volatility Control Asset Diversification BONDS Principal Growth Inflation Protection Asset Diversification STOCKS Asset Diversification Inflation Protection Non-Correlation ALTERNATIVES

Diversification Ease of Transaction Low Cost INVESTMENT PROCESS Diversification Ease of Transaction Low Cost Mutual Funds Exchange Traded Funds A professionally managed investment fund that pools money from many investors to purchase securities. A professionally managed investment fund that pools money from many investors to purchase securities. Advantages: Increased Diversification – Decreases Risk Daily Liquidity Professional Management No Administration Wide Choice of Sectors and Style Advantages: Increased Diversification – Decreases Risk Trade like Stocks Professional Management No Administration Wide Choice of Sectors and Style Low Cost Common to Both: Broad Market, Index-Based Allocations Customized Risk Exposures Liquidity Transparency

EQUITY INDEX-BASED ALLOCATIONS INVESTMENT OPTIONS EQUITY INDEX-BASED ALLOCATIONS U.S INDICES Dow Jones Industrial Average S&P 500 Index Russell 3000 Index Russell 1000 Index Russell 2000 Index FORIEGN INDICES EAFE Index MSCI World Index ex. U.S. Emerging Markets Index Euro 50 Index

BOND & ALTERNATIVE INDEX-BASED ALLOCATIONS INVESTMENT OPTIONS BOND & ALTERNATIVE INDEX-BASED ALLOCATIONS BOND INDICES Barclays 1-3 Year Govt/Credit Barclays 1-5 Year Govt/Credit Barclays 1-10 Year Govt/Credit Barclays Aggregate Index Domestic High Yield ALTERNATIVE INDICES REIT Index MLP Index Commodity Index Gold/Silver

SAMPLE INVESTMENT POLICY STATEMENT - 1

SAMPLE INVESTMENT POLICY STATEMENT - 2

SAMPLE INVESTMENT POLICY STATEMENT - 3

PORTFOLIO STRUCTURE: EXCHANGE TRADED FUNDS The sample portfolio structures are not endorsed by the Grand Lodge of Wisconsin and for discussion purposes only. Each investor must evaluate their own investment objectives, guidelines, risk tolerance and suitability before investing in any security or portfolio of securities.

PORTFOLIO STRUCTURE: EXCHANGE TRADED FUNDS The sample portfolio structures are not endorsed by the Grand Lodge of Wisconsin and for discussion purposes only. Each investor must evaluate their own investment objectives, guidelines, risk tolerance and suitability before investing in any security or portfolio of securities.

Lodge Responsibilities OPEN AN ACCOUNT, STRUCTURE YOUR PORFOLIO and MONITOR YOUR RESULTS Consider a Local Discount Brokerage or Charles Schwab, Fidelity Investments or TD Ameritrade to provide custody of the assets together with the necessary reporting and trading platform to manage your portfolio. Lodge Responsibilities 1. Monitor the Results 2. Report the Results to the Membership 3. Maintain Alignment to the Asset Allocation 4. Review Investment Policy Annually – Re-sign the Policy