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
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
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
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
Less than July 2010 0.0017093
one year August 2010 0.0017780
September 2010 0.0017235
October 2010 0.0016876
1-2 years November 2010 0.0015329
December 2010 0.0015678
3-4 years 8%
22% Year-by-Year Performance
by Calendar Year
Asset Class Overview Percentage (%) change in value
as of 12/31/2010
Fixed-income investments within the Savings Fund include 5.8
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
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.