Investment Committee Report - Year End 2007
Once again the COLEG’s portfolio ended the year in positive territory, albeit by a relatively small percentage. It did however closely mirror the benchmark index used by the Investment Committee to gauge performance, that of the S&P 500 index which was up 3.53%. The COLEG portfolio on the other hand gained just under 3%.
A couple of factors contributed to this seemingly mediocre performance. First is the fact that $9,414 of tuition reimbursement moneys were distributed to students during the year. Something that we anticipate will continue to happen and increase in dollar terms with each passing year. In addition, a large year end capital gain distribution was “earned” but was not paid until the second week in January. This amounted to another $9,119. Factoring in this last item would have seen the performance of the portfolio at approximately 5.5%. This more appropriate number has the portfolio exceeding the benchmark handily yet again.
At the close of business on December 31, brokerage account assets totaled $376,249.32. Last year at this time, the assets in this account were valued at $365,446.96. This represents an absolute increase in value of $10,802.36. This year we received a very significant amount of cash from dividends, interest and capital gains. However, the underlying securities generally depreciated, which resulted in the relatively small gain in the overall portfolio.
During the year, 2 positions were monetized. The first, Van Kampen Income was called by fund management. The second was a liquidation of the Boulder Income Fund which when we sold was trading at a very large premium to net assets. Both provided the portfolio with nice gains. Those proceeds, along with moneys that flow into the fund from numerous other sources and those which are thrown off by existing securities held, were used to increase several existing positions. In addition, 2 other securities were added (John Hancock Tax Advantaged & LMP Capital and Income) in our ongoing effort to continually diversify the portfolio.
The expected liquidation of our AIM Select Real Estate position did not occur due to a fee imposed by fund management that will sunset in March 2008. The Investment Committee will make a determination about a potential sale after that date.
While returns this year were less than stellar, the portfolio continues to throw off sufficient cash to meet all of our tuition reimbursement obligations and provide some addition growth. As such, The Investment Committee continues to remain optimistic about future performance. The Committee is committed to their goals of long term growth, income and diversification of the portfolio.
The following is the makeup of brokerage account assets as of December 31, 2007, along with their percentage of the overall allocation:
The Committee welcomes questions, comments and concerns about the management of the COLEG portfolio.
Bob Laude (Chairman), Bruce Nielsen, & Fred Wilebski