RT Journal Article
SR Electronic
T1 A New Endowment Distribution Plan
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 24
OP 28
DO 10.3905/jwm.2004.391054
VO 6
IS 4
A1 Bala G Arshanapalli
A1 Edmond L D'Ouville
A1 William B Nelson
YR 2004
UL https://pm-research.com/content/6/4/24.abstract
AB The management of an endowment fund poses unique investment challenges. Obviously there is the choice concerning the allocation of the endowment corpus between riskier investments with higher returns and virtually risk free investments. There is also a need to provide stability in the amounts distributed for spending to further the purposes of the endowment. The authors show one way to achieve these objectives is to split the fund principal between essentially risk-free commercial annuities for a selected fixed term and a diversified stock portfolio. This will allow the fund to guarantee fixed expenditures for current needs and provide an excellent opportunity to grow the fund.