Why charities should be interested in exchange-traded funds.
Peter Lai is the Chairman of HML Consulting Group and Executive Director of Riverside Asia Partners. He has more than 35 years of experience in both public and private financial sectors, including central banking, investment banking, private banking, private equity and real estate investment trust. He has lectured as an adjunct teaching faculty at the National University of Singapore, Nanyang Technological University, Singapore Management University and Sun Yet San University in Guangzhou, China.
Mr Lai has also sat on the board of several non-profit organisations, including the Singapore Chinese Orchestra and Char Yong Foundation, principally to help direct the management of the substantial endowment funds of these organisations. Mr Lai has a Bachelor of Arts (Honours) and a Masters of Arts from the University of Cambridge in England, majoring in Economics. He is also a Chartered Financial Analyst with the CFA Institute in the United States.
For non-profits, a large cash position could signal prudence or betray a lack of investing sophistication.
In select cases, alternative assets can help to diversify a charity’s portfolio and ease the volatility of returns.
Trustees and investment committee members need to acquire a basic understanding of financial instruments.
Charities investing in hedge funds isn’t necessarily a cause for concern.
Avoid, reduce, transfer and accept are bywords for a disciplined and cautious approach.
Macroeconomic changes and fraudulent behaviour pose investment challenges.
An investment policy statement should guide the work of investment committees.