1. GRAND LODGE OF WISCONSIN
Financial Reporting & Investment Management Oversight
Presented by
Jeff Bryden - Grand Treasurer

2. FINANCIAL RESPONSIBILITIES
Maintain accurate current financial records
Deposit receipts and pay bills on time
File annual financial reports with Grand Lodge
Establish an annual independent audit
52.02 Annual Reports. Each lodge shall file its Annual Report with the Grand Secretary by February 15th in each year. In case of its failure so to do it shall be charged two dollars for each day’s delay commencing on February 16th, unless such default is excused by the Grand Lodge. The Grand Secretary shall have this regulation printed on the report blanks furnished to the lodge Secretaries.
52.03 Affiliated Foundations Each lodge shall attach and file with its Annual Report complete information relating to all affiliated foundations organized in connection with said lodge or by its members. Said information shall include detailed operating statements, balance sheet and copies of income tax returns.
Excel: Software developed and manufactured by Microsoft Corporation that allows users to organize, format, and calculate data with formulas using a spreadsheet system broken up by rows and columns. Available for PC or MAC.

3. FINANCIAL RESPONSIBILITIES

4. FINANCIAL RESPONSIBILITIES

5. FINANCIAL RESPONSIBILITIES

6. THE INVESTMENT MANAGEMENT PROCESS
Evaluate Investment
Goals and Objectives
Execute a Written
Investment Policy
Statement
Open an Investment Account
Determine Investment Process
and Approach
Establish an Appropriate Asset
Allocation

7. CAPITAL (INVESTMENT) FUNDS
LODGE FINANCIAL GOALS AND RESPONSIBILITIES
OPERATING FUNDS
CAPITAL (INVESTMENT) FUNDS
Lodge Financial Goals
Match Operating Income & Expenses
Establish Dues Discipline
Price Activities Appropriately
Lodge Capital Goals
Restrict Capital Expenditures to Building Needs, Charitable Endeavors and Service and Assistance
Match Investment Needs with the Proper Portfolio Allocation
ULTIMATE GOAL: Eliminate Using Capital Funds to Balance Operating Needs

8. Components of Investment Return [Brinson, Hood & Beebower (1986)]
ASSET ALLOCATION
Components of Investment Return [Brinson, Hood & Beebower (1986)]
Security Selection – 4%
Market Timing– 2%
Asset Allocation – 94%
Diversification is the centerpiece of JBIM’s balanced portfolio investment approach. Volatility is inherent in investing. Balancing risks and market volatility with expected returns requires a broadly diversified portfolio and a long-term investment horizon. Maintaining a disciplined methodology to asset rebalancing is crucial to success.

9. Liquidity Requirements Asset Diversification
ASSET ALLOCATION
Liquidity Requirements
Temporary Safe Haven
Risk Management
CASH
Income Generation
Volatility Control
Asset Diversification
BONDS
Principal Growth
Inflation Protection
Asset Diversification
STOCKS
Asset Diversification
Inflation Protection
Non-Correlation
ALTERNATIVES

10. Diversification Ease of Transaction Low Cost
INVESTMENT PROCESS
Diversification Ease of Transaction Low Cost
Mutual Funds
Exchange Traded Funds
A professionally managed investment fund that pools money from many investors to purchase securities.
A professionally managed investment fund that pools money from many investors to purchase securities.
Advantages:
Increased Diversification – Decreases Risk
Daily Liquidity
Professional Management
No Administration
Wide Choice of Sectors and Style
Advantages:
Increased Diversification – Decreases Risk
Trade like Stocks
Professional Management
No Administration
Wide Choice of Sectors and Style
Low Cost
Common to Both:
Broad Market, Index-Based Allocations
Customized Risk Exposures
Liquidity
Transparency

11. EQUITY INDEX-BASED ALLOCATIONS
INVESTMENT OPTIONS
EQUITY INDEX-BASED ALLOCATIONS
U.S INDICES
Dow Jones Industrial Average
S&P 500 Index
Russell 3000 Index
Russell 1000 Index
Russell 2000 Index
FORIEGN INDICES
EAFE Index
MSCI World Index ex. U.S.
Emerging Markets Index
Euro 50 Index

12. BOND & ALTERNATIVE INDEX-BASED ALLOCATIONS
INVESTMENT OPTIONS
BOND & ALTERNATIVE INDEX-BASED ALLOCATIONS
BOND INDICES
Barclays 1-3 Year Govt/Credit
Barclays 1-5 Year Govt/Credit
Barclays 1-10 Year Govt/Credit
Barclays Aggregate Index
Domestic High Yield
ALTERNATIVE INDICES
REIT Index
MLP Index
Commodity Index
Gold/Silver

13. SAMPLE INVESTMENT POLICY STATEMENT - 1

14. SAMPLE INVESTMENT POLICY STATEMENT - 2

15. SAMPLE INVESTMENT POLICY STATEMENT - 3

16. PORTFOLIO STRUCTURE: EXCHANGE TRADED FUNDS
The sample portfolio structures are not endorsed by the Grand Lodge of Wisconsin and for discussion purposes only. Each investor must evaluate their own investment objectives, guidelines, risk tolerance and suitability before investing in any security or portfolio of securities.

17. PORTFOLIO STRUCTURE: EXCHANGE TRADED FUNDS
The sample portfolio structures are not endorsed by the Grand Lodge of Wisconsin and for discussion purposes only. Each investor must evaluate their own investment objectives, guidelines, risk tolerance and suitability before investing in any security or portfolio of securities.

18. Lodge Responsibilities
OPEN AN ACCOUNT, STRUCTURE YOUR PORFOLIO and MONITOR YOUR RESULTS
Consider a Local Discount Brokerage or Charles Schwab, Fidelity Investments
or TD Ameritrade to provide custody of the assets together with the necessary reporting and trading platform to manage your portfolio.
Lodge Responsibilities
1. Monitor the Results
2. Report the Results to the Membership
3. Maintain Alignment to the Asset Allocation
4. Review Investment Policy Annually – Re-sign the Policy