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Notice to Fund holders of UCSD Foundation Expendable Funds

Dear Current Fund Administrator:

This is to inform you of an alternative investment within the UC San Diego Foundation that may be of interest to you. In 1992, the Foundation Board of Trustees established a separate investment pool specifically for current funds that are not expected to be expended in the near future (at least five years). This pool was named Intermediate Total Return Fund (ITRF). The objective of this fund was to allow applicable funds to have the potential of earning market appreciation that is not found with normal current fund investments. However, there is also a much greater market risk; loss of a portion of the original investment is possible in adverse market environments.

The Foundation Board has authorized two ITRF pools. ITRF Pool 1 was created to have a more blended return by having a greater weight towards fixed income than to equities (approximately 50% in fixed income, 40% in stocks and 10% in short term cash). ITRF Pool 2, in comparison to ITRF Pool 1, is more aggressively weighted towards stocks (60%-80% in equities). Because of its heavier emphasis in stocks, ITRF Pool 2 has a much higher reward potential, but at the same time, it has also has an even greater risk exposure than Pool 1. Both ITRF pools are invested with funds managed by The Regents' Treasurer's Office.

Please note the ITRF is not a suitable option for all current funds. Investment of an existing current fund in either ITRF pools is subject to the approval of the Foundation Board of Trustees and is only available to UC San Diego Foundation current fund holders with minimum cash balance of $25,000. The fund's purpose cannot be intended for capital purposes (building funds) and it is an "all or nothing" decision - partial balances of funds may not be invested in the ITRF. Donor restrictions, fund purpose, and future expenditure needs are additional criteria to consider. Also, upon entering the pools, the funds are subject to specific operating policies and guidelines. For a complete copy of the ITRF policy and operating guidelines, charts showing the asset mix and returns for the two pools at March 31, 1998, and brochures on the Treasurer's funds used for the investment, please access the Foundation Web site at http://www.ucop.edu/treasurer/brochures/welcome.html.

Separate from the Foundation's two ITRF pools is the normal current fund portfolio. If a donor designated his gift as totally expendable, the funds are placed in a Foundation current gift fund. These funds are invested to offer fund holders a safe, stable fund balance and a conservative income stream. To meet this goal, the normal current fund portfolio is invested in liquid, yield generating investments. This investment strategy ensures the current fund balance does not fluctuate much with market movements. The cash balance on deposit is available to the fund holders at any time.

Please call the Foundation at extension 41038 if you have any questions regarding any of the above or wish to transfer a balance in a current fund.


Marlene D. Shaver
Chief Financial Officer