Market values of the Portfolio, after withdrawals, for the years ended December 31, 2010 and 2009, are displayed in the following chart:

 

(dollars in thousands)

 

2010

2009

Cash and Fixed-Income Securities

$ 45,156

$ 47,697

Equity Securities

338,773

296,683

Total

$ 383,929

$ 344,380

The Portfolio has consistently outperformed the market benchmarks over a long period. For the five years ending December 31, 2010, the Portfolio return is 5.6% compared to the market composite benchmark of 5.1% and, for the ten years ending December 31, 2010, the Portfolio return is 5.9% compared with the market composite benchmark of 5.1%.


At the end of 2010, the Finance Committee proposed, and the Council approved, changes in the guidelines for portfolio asset allocation. The Finance Committee moved the guidelines closer to what it has been allocating to our actual new investments in recent years. In general, the new guidelines decreased allocations to U.S. equities, increased allocations to non-U.S. equities and increased the allocation to hedge funds. The old guidelines that were in place through 2010 and were used for the benchmark calculations in this report are listed below. The new guidelines are also noted below and will be used for benchmark calculations starting in 2011.

Overview of Current Investment Structure

 

 

Guideline 2010

Portfolio Allocation

Fixed-Income:

U.S. Fixed/Cash

12.0%

6.1%

 

Non-U.S. Fixed

3.0%

5.7%

Equities:

U.S. Large Cap Funds

25.0%

18.4%

 

U.S. Small-Mid Cap Funds

12.0%

11.3%

 

Non-U.S. Stocks — Developed

20.0%

21.5%

 

Non-U.S. Stocks — Emerging

8.0%

14.5%

 

Real Estate Investments

5.0%

3.0%

Hedge Funds

12.0%

14.4%

Other Alternative Investments

3.0%

5.1%

Total

100.0%

100.0%

Overview of Future Investment Structure

 

 

Guideline 2011

Fixed-Income:

U.S. Fixed/Cash

9.0%

 

Non-U.S. Fixed

5.0%

Equities:

U.S. Large Cap Funds

19.0%

 

U.S. Small-Mid Cap Funds

9.0%

 

Non-U.S. Stocks — Developed

20.0%

 

Non-U.S. Stocks — Emerging

15.0%

 

Real Estate Investments

3.0%

Hedge Funds

17.0%

Other Alternative Investments

3.0%

Total

100.0%

  • See Schedule 2-A on page 21 for details of investments by asset class.

  • Included in the $383.9 million total market value of the Portfolio as of December 31, 2010, are $7.1 million for the Woods Hole Endowment Funds, $66.4 million for the Institute of Medicine (IOM), and $9.9 million for The National Academies’ Corporation (TNAC). TNAC, which is equally owned by the NAS and the National Academy of Engineering Fund (NAEF), owns and operates the Beckman Center (see note 1 to the financial statements on page 45).

  • Withdrawals of $15.3 million were made to fund the President’s Committee, NAS General Fund’s activity, and prizes and awards for the current period. Additional withdrawals of $1.8 million were made to fund Woods Hole, IOM, and TNAC activity.

NAS General Fund

The NAS General Funds, which provides unrestricted resources to support the activities of the Academy, receives its funding from the unrestricted portion of the NAS Endowment. As noted above, for 2009, 2010, and 2011, the Council has limited spending from the endowment, including the unrestricted portion, to 4%.


For fiscal year 2010, the General Fund revenue totaled $6.4 million and expenditures totaled $5.6 million, resulting in a $756,000 surplus. Comparable figures for fiscal year 2009 were $7.7 million in revenues, $5.8 million in expenditures, resulting in a surplus of $1.9 million.



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