Investing the Endowment

Proposition 102 in 1998 made two significant changes in how the Endowment can be invested.

It allowed up to 60% of the endowment to be invested in equities.

It changed the distribution formula to protect the principal from inflation.

Contained a 4 year transition from the old formula to the new.

The United States Congress amended the Enabling Act (the Act that admitted Arizona into the Union) to allow Prop 102 changes to go into effect.
Any change in distribution, management, or investment of the State Trust Land Endowment requires BOTH an Arizona Constitutional change and a Federal Enabling Act change.

Current Constitutional Guidelines

Arizona Constitution, Article 10, Section 7 outlines the requirements for the investment and distribution of Endowment Funds.

“Prudent Person” investment standard

Up to 60% may be invested in equity securities

Up to 100% may be invested in fixed income securities

Standards established for calculating ‘total return’ and ‘distributions’

Distributions equal to 5-year average total return – LESS – inflation (‘net return’),

Multiplied by the average (prior) 5 year market value of each Fund.

Upcoming Meetings

Board of Investment
MAY 21 10:30am
Quarterly Meeting & Conference Calls
JUL 24th
Download archived presentation

Please note: All meetings are open to the public.

Contact:
(602)-604-7800
Toll Free:
1-877-365-8310
Fax:
(602) 542-7176
Email:
info@aztreasury.gov