Investments are critical to the sustainability of Rotary International and The Rotary Foundation.
The Office of Investment is responsible for managing Rotary’s investments according to policies set by The Rotary Foundation’s Trustees and Rotary International’s Board of Directors. Through a commitment to stewardship and excellence, we seek to establish a legacy that distinguishes Rotary as a prudent investor, supports Rotary's objectives, and promotes sustainability.
The Annual Fund is the primary source of funds that support The Rotary Foundation’s programs and areas of focus.
Contributions to the Annual Fund are invested for three years to generate earnings to meet the Foundation’s operating expenses.
To achieve the objective of the Annual Fund, the portfolio is invested conservatively with an emphasis on liquidity and income over capital appreciation.
Fiscal 2017 was a strong year. The Annual Fund earned 11.6 percent in fiscal 2017, a year when stocks globally produced strong returns for investors.
Over the past five years, the Annual Fund generated an average rate of return of 6.5 percent and grew from $369 million to $464 million. The rate of return is the total realized and unrealized capital gains, and interest and dividend income.
The objective of the Endowment is to provide a permanent and sustainable source of funding.
Contributions to the Endowment are invested in perpetuity and investment earnings are used to provide a permanent source of income to support Foundation programs.
The long-term nature of the Endowment dictates a bias toward equity investments because of the higher return potential in comparison to fixed income investments.
Hence, 85 percent of the Endowment portfolio is targeted for investments in assets expected to produce equity-like returns.
The Endowment should generate a higher rate of return over time compared to the Annual Fund, but with more variability in the annual results.
Fiscal 2017 was a strong year. The Endowment earned 13.5 percent in fiscal 2017, a year when stocks globally produced strong returns for investors, and most other long-term investment portfolios produced returns between 10 percent and 15 percent.
Over the past five years, the Endowment grew from $253 million to $404 million and generated an average annual return of 7.7 percent. The rate of return is the total realized and unrealized capital gains, and interest and dividend income.
The PolioPlus Fund has always been invested only in fixed-income securities (i.e., bonds) because of the need to protect and preserve the funds contributed toward the effort to end polio.
In the past, when the time horizon for both investment and grant-making was longer, the investment portfolio held longer-term bonds that generated higher yields.
The PolioPlus Fund portfolio benefited from the long cycle of declining interest rates.
Today, the investments are limited to short-term fixed-income securities because the Foundation is raising and disbursing funds within a short time frame as we get closer to reaching our goal.
The returns over the past few years reflect the low interest rate environment and the lower-risk, short-term nature of the investments.
Rotary International holds a portfolio to ensure that Rotary is financially stable and can cover its obligations in unforeseen circumstances.
These funds are invested in a conservative strategy that emphasizes liquidity and income over capital appreciation.
Fiscal 2017 was a strong year. The Rotary International portfolio earned 11.4 percent in fiscal 2017, a year when stocks globally produced strong returns for investors.
Over the past five years, the Rotary International portfolio generated an average rate of return of 6.3 percent. The rate of return is the total realized and unrealized capital gains, and interest and dividend income.