Accordingly, the University has been deliberate in the formulation of its long-term strategic asset mix. It has relied on (1) optimization modeling using the expected returns, standard deviations and correlations among various asset classes, (2) the experience and judgment of the Investment Committee, Investment Office and its consultants and (3) a review of the asset allocation strategies of a number of successful peer institutions. The underlying premise for this process is that equities would continue as the dominant asset class, but that further diversification could not only reduce the portfolio's volatility (riskiness), but would also improve its long-term returns.

Annually, the Investment Committee reviews the Asset Allocation Study and reconfirms its Asset Allocation targets.