Indexed Mutual Funds

A mutual fund pools the investments of many investors and uses those assets to purchase a portfolio of individual securities. Mutual funds allow for the diversification of assets among various asset classes. 

Indexed mutual funds try to mirror the returns of a specific index, such as the Standard & Poor’s 500 or the Russell 2000, by trying to own each of the securities within that index. This is referred to as a passive approach to investing. The expenses for indexed mutual funds are generally lower than those of a regular mutual fund when this investment management technique is used. Indexed mutual funds provide a balanced approach to investing.

The Cleveland Foundation utilizes the mutual funds of the Vanguard Group in its indexed mutual fund portfolio. The Cleveland Foundation’s Investment Committee has set a standard asset allocation of 50 percent S&P 500 index funds, 25 percent total bond market index funds, 10 percent small-cap index funds, 8 percent international growth index funds, and 7 percent total international stock index funds. Custom asset allocations may also be implemented.

The Investment Committee regularly monitors the performance of its indexed mutual funds. The allocations are rebalanced on a quarterly basis and rebalanced when appropriate.

Cleveland Foundation Mutual Fund Asset Allocation