UC Savings Fund

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					                                                                UC Savings Fund
Investment Objective: The Fund seeks to maximize interest income returns, while
protecting principal, in order to provide a stable, low-risk investment, with attractive returns.
Quick Stats                      1 Year Return (12/31/2010)       2.23%
                                                                                                   Average Annual Total Returns
                                 NAV (12/31/2010)                  $1.00
                                 Investment Category      Fixed Income                                      as of 12/31/2010
                                 Net Assets ($M)                 $3,754
                                                                                     Returns %                           1 Year   5 Years 10 Years
                                 Inception                  July 1, 1967             Savings Fund                         2.23     3.63     4.12
The Savings Fund is part of the UC Retirement Savings                                Two-Year U.S. Treasury Note
Program’s Core Funds, which include a full range of asset                              Income Return                      0.80      2.66     2.75
classes designed to help meet participant needs. Participants                        Inflation (Consumer Price Index)     1.50      2.18     2.34
in the Program should consider their unique needs and                              Returns are based on interest income. Over the years, the fund
goals, along with any savings held outside of the Program,                         has consistently out-performed its benchmark consisting of
when building an appropriately diversified asset allocation                        two-year U.S. Treasury Notes.
of funds.                                                                                                  How We Invest
                                                                                   The Treasurer’s Office manages the Savings Fund according
    Ten-Year Performance of a $100 Monthly Investment                              to policies established by The Regents of the University of
       in the Savings Fund and the Policy Benchmark*                               California.
         Total Deposits: $12,000              Years Ended December 31              The Fund invests in fixed-income securities issued by the U.S.
         2010 Ending Values                                                        Treasury and U.S. government agencies, most of which are
  $ 20,000
                            Two-Year Treasury Note (Income Only)    $13,708        backed by the full faith and credit of the U.S. government.
                            Savings Fund $14,582                                   The Fund also invests in fixed income securities issued by
    15,000
                                                                                   U.S. government-sponsored enterprises (GSEs) such as
                                                                                   Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
                                                                                   The principal and interest payments of GSE obligations
    10,000                                                                         are guaranteed solely by the issuer. The maturity of all
                                                                                   investments must be five years or less.
                                                                                   The Fund strives to exceed the income returns of two-year
     5,000
                                                                                   U.S. Treasury Notes and to outpace inflation. The portfolio
                                                                                   is optimized by adjusting the average maturity to respond
          0                                                                        to expected changes in interest rates. The Fund seeks to be
              00    01     02     03     04    05     06     07     08   09   10
                                                                                   fully invested at all times, although a modest cash level may
                                                                                   exist until invested.
* Policy Benchmark is Two-Year U.S. Treasury Notes Income Return.
                                                                                   The Fund is managed by Senior Portfolio Manager Alice Yee,
                                                                                   who also manages the University’s Short-Term Investment
                                  Risks to You                                     Pool (STIP). Alice has over 34 years of experience, 30 with
                                                                                   the University, in managing short-term investment funds.
The Savings Fund is designed to maintain a constant per-unit
value of $1.00, although it is not guaranteed. Risks, while                                              Fees and Expenses
relatively low overall, include credit risk, interest rate risk,
and concentration risk.                                                            Investor expenses are targeted to be 0.15% (or $1.50 per
                                                                                   $1,000 invested) of the Fund’s average market value per
The Savings Fund may be appropriate for investors seeking                          year, assessed on a daily basis (1/365th per day invested).
a stable investment with greater interest income than that                         These expenses are not billed to participants, but are netted
normally offered by a money market fund. The Savings                               against the investment experience of the fund. These expenses
Fund may be appropriate for investors with shorter-term                            are comprised of approximately 0.03% for investment
investment horizons and those near to or in retirement. The                        management, 0.02% for investor education and 0.10% for
Savings Fund may be appropriate for investors with longer                          administration (including accounting, audit, legal, custodial
time horizons as one component of a portfolio containing                           and recordkeeping services). The total administrative expenses
other assets with potential for principal growth. The Savings                      are estimated and could actually be higher or lower in some
Fund may not be appropriate as the sole investment for                             periods. Since actual administrative expenses are netted against
investors with longer time horizons.                                               investment experience, if actual administrative expenses
                                                                                   are higher than estimated, the effective expense ratio for
For more information on risk, see the “Investment Risk Factor                      participants will increase; if actual expenses are lower than
Guide,” available at http://www.ucfocusonyourfuture.com/                           estimated, the effective expense ratio will decrease. There are no
plan-investments/core-funds.php.                                                   front-end or deferred-sales loads or other marketing expenses.
                                               UC Savings Fund continued

                          Maturities                                                    Month-End Interest Factors
                        as of 12/31/2010                                          most recent 12 months ending 12/31/2010
The maturity of bonds in the Fund can be an important de-                         January 2010                    0.0021244
terminant of its performance in different interest rate cycles.                   February 2010                   0.0019750
Although the average maturity of the Fund is currently similar                    March 2010                      0.0020072
to its benchmark, the Fund managers diversify maturities in                       April 2010                      0.0019444
order to mitigate risk and capture attractive spreads along                       May 2010                        0.0019617
the yield curve.
                                                                                  June 2010                       0.0021854
       4-5 years
                                            Less than                             July 2010                       0.0017093
                                            one year                              August 2010                     0.0017780
         31%
                                              15%
                                                                                  September 2010                  0.0017235
                                                                                  October 2010                    0.0016876
                                                   1-2 years                      November 2010                   0.0015329
                                                     24%
                                                                                  December 2010                   0.0015678


                                           2-3 years
        3-4 years                             8%
          22%                                                                           Year-by-Year Performance
                                                                                            by Calendar Year
                    Asset Class Overview                                                 Percentage (%) change in value
                                                                     10.0
                        as of 12/31/2010

Fixed-income investments within the Savings Fund include                    5.8
                                                                                  5.2
U.S. Treasuries and federal agencies with maturities less than        5.0                4.3                       4.7    4.4
five years.                                                                                     3.9   3.9   4.0
                                                                                                                                2.8
                                                                                                                                      2.2
While the Fund is limited in the types of securities it can
hold, the percentage invested in U.S. Treasuries vs. other
U.S. governmental agencies and GSEs will vary depending               0.0
on their relative yield advantage. As of December 31, 2010,                 01    02     03     04    05    06     07     08    09    10
the Fund was composed of 46% U.S. Treasuries, 54% GSEs,
and 0% U.S. government agencies.




Keep in mind that investing involves risk. The value of your investment may fluctuate over time and you may gain or lose money.

The information contained herein regarding the UC Funds has been provided by the University of California Office of the Treasurer
and is solely the responsibility of the University of California Office of the Treasurer.

				
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posted:9/17/2011
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