1. Annual Meeting with SWE
Board of Trustees
Annual Meeting with SWE
August 18, 2012

2. Marge Inden, Chair, Baltimore-Washington
FY13 Board of Trustees
Marge Inden, Chair, Baltimore-Washington
Term ends FY14
Angela Nickels, Treasurer, Southwest Texas
Term ends FY15
Kathryn Cunningham, Secretary, MAL-D
Term ends FY13
Florence Hudson, New York
Carolyn Phillips, Houston Area
Sandra Postel, South Puget Sound

3. A G E N D A
FY12 Accomplishments
FY13 Focus Items
Review: SWE-Endowment Fund, Inc. (SWE-EFI)
Overview of EFI
Performance
Scholarship stipends
Review: Contingency Reserve Fund
Overview

4. FY12 Accomplishments
Continued relationships with investment managers:
SWE-EFI – Commonfund
Excellent risk-return profile
Gives us prudent access to additional asset classes
Nonprofit organization with prestigious client list
Modest cost
RF investments (fixed income & equity) - Vanguard
Proven and experienced with large client base
Expert guidance on portfolio risk, asset allocation, investment selection
Low cost

5. FY12 Accomplishments
Refined relationships with investment managers
Regular meeting schedules and reporting requirements
Level of detail in asset allocation ranges
Leveraged AISES relationship to partner on new scholarship for Native American students

6. FY13 Focus Items
Investment policy statements
Complete full rewrite as outlined in FY12
Continued assessment of
Spending policy
Methods of investment manager evaluation
Role and function of the BOT
No change in structure since the 1950’s
Many changes in function!

7. SWE Endowment Fund, Inc SWE-EFI Headquarters Fund Scholarship Fund
Awards Fund

8. Endowment Basics
Endowment: Long-term assets held to generate a permanent stream of income
May include restricted and unrestricted funds
Investment Policy Statement: Guides long-term operation of the endowment
Balance between risk and return
Balance between current income and growth
Defines payout

9. SWE-EFI Investment & Spending Policy
Funds currently pay 4% of the opening balance as subsidy
Expenses are not included in the 4%
Over the long term, we anticipate growing income
Income can drop if markets perform poorly
Total return: (Payout %) + (Expense %) + (Inflation %)

10. SWE-EFI Funds and Purpose
HQ Fund: general support of HQ operation
Awards Fund: Chipp, Resnik, Motorola, Boeing, and other (at SWE’s discretion)
New award: Northrup Grumman – Suzanne Jenniches Upward Mobility Award
Scholarship Fund:
National and local selection
Some donor restricted funds

11. Permanently Endowed Awards
Motorola Multicultural Award
Total spending of $1500
Programs or awards
Awards must be a minimum of $300
Boeing Multicultural Award
Total awards of $1000
Suzanne Jenniches Upward Mobility Award
Total cost of $4500 including ATMOS Clock
Other Awards as determined by SWE
Chipp and Resnik Awards, if given
To total the full amount of the awards subsidy

12. SWE-EFI Fund Balances FY04* FY05* FY06 FY07 FY08 FY09 FY10 FY11 FY12**
AWARDS
 374
397
407
449
439
369
402
464
488
HEADQUARTERS
 1,421
1,636
1,637
1,864
1,630
1,388
1,511
1,635
1,730
SCHOLARSHIP
 2,515
3,098
3,538
3,832
3,731
3,385
3,887
4,626
4,767
TOTAL
 4,310
5,131
5,282
6,145
5,800
5,142
5,801
6,725
6,895
Year end, in $K
*Pre-SWE-EFI
**unaudited

13. Scholarship Stipends New Scholarships established during FY12:
Baltimore-Washington – second scholarship
Roberta Banaszak Gleiter – Engineering Endeavor
Abernethy Endowment for Native Americans in Engineering
Willamette Valley
Year end, in $K
*Pre-SWE-EFI

14. SWE – EFI Investment Performance
5/6/04 – 6/30/09
FY10
FY11
FY12
MSSB
2.1%
20.1%
3.6% --
Stock Index
(1.8%)
14.4%
Bond Index
4.8%
9.7%
1.5%
Commonfund
0.9%
28.4%
0.6%
30.7%
5.5%
Russell 3000
3.8%
MSCI World Ex US
(14.1%)
Emerging Mkt Equity
(15.8%)
Hedged Equity
(6.9%)

15. Reserve Fund

16. Reserve Fund
BOT manages assets at the pleasure of the Senate
Currently less equity exposure than SWE-EFI accounts
More conservative, defensive portfolio

17. The Reserve Fund FUND BALANCE ($K) 2,524 2,777 3,301 3,323 3,067
3,458*
3,818*
4,066*
VALUE OF INVESTMENTS ($K)
2,833
3,193
3,441
OPERATING EXPENSE ($K)
2,739
3,514
3,663
4,282
4,328
4,229
3,519
TBD
RATIO
83%
79%
90%
77%
82%**
91%**
TBD**
*includes $625K due from SWE
**excludes $625K from fund balance

18. RF Investment Performance
5/6/04 – 6/30/09
FY10
FY11
FY12
MSSB
2.4%
13.2%
Vanguard
9.2%
5.3%
Stock Index
(1.8%)
14.4%
30.7%
5.5%
Bond Index
4.8%
9.7%
1.5%
7.5%

19. Questions?