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EUROQOL | Investment Policy

Investment policy for the EuroQol Foundation

In recent years, the EuroQol Research Foundation was not only scientifically, but also financially successful. This allowed significant investments in research, whilst maintaining sufficient reserves to guarantee the continuity of the Foundation. In times where significant interest was paid on deposits, it made sense to keep these reserves in relatively profitable savings accounts.

Meanwhile interest rates near zero have been reflected in the balance sheet figures of recent years, in which the interest income continued to decline in spite of higher reserves. Last year, the Board approved an investment policy that was ratified by the EQ membership. In line with the investment policy the Board acquired a sizeable position in bonds. However, it has become clear that the scope for investments should be broadened and that professional investment expertise is needed, whilst keeping the conservative, risk-averse investment profile agreed with the EQ membership. This memo formulates the revised investment policy for the EuroQol Group and its members.

The revised investment policy is intended to follow the following principles:

1. The safety of the assets has high priority.

This is the most fundamental requirement and follows the recent strategy of the EuroQol Group, in which it is intended to develop new measurement methods for health-related quality of life. The EuroQol Group and the EuroQol Research Foundation will therefore continue to generate revenue primarily through license rights. This means that generating interest income is not the focus of our deliberations, as asset security takes priority.

2. The choice of investments should protect the reserves from dramatic losses.

Investments are preferably carried out in Euro bonds, but comparable liquid currencies such as British Pounds and US Dollars are possible to strengthen overall diversification. The investment portfolio might include state bonds and companies bonds of good investment quality (BBB and better) as well as the purchase of real estate for owner occupation by the EuroQol Office. Shares and derivatives are allowed to a limited extent, but should never exceed 40% of the total investment portfolio.

3. Investment decisions are taken by the Board

Investment decisions are not part of the daily routine, and therefore are not the responsibility of the Executive Director. Instead, this is a responsibility of the Board. In line with our Articles, the Executive Director has an advisory role. Investment decisions should be regularly on the agenda of the Board in the future. Professional investment expertise may be hired by the Board to manage part of the investment portfolio. The treasurer will make proposals for investment decisions, in cooperation with the Executive Director and with external experts on the basis of the principles described above. The decisions will be made by majority votes of the Board.

4. For investment decisions, there is a strong preference not to consider companies known to be linked with any or all of the following:

  • Armaments and nuclear weapons
  • Human Rights Abuse/ Oppressive regimes
  • Environmentally damaging practices
  • Poor employment practices
  • Alcohol
  • Tobacco
  • Gambling
  • Pornography
  • Animal testing on non-pharmaceutical products

5. The cash reserve should, at a minimum, equal the last annual turnover.

In order to cover any expected and unforeseen costs, it is wise to keep significant cash reserves.

(Version 30JAN2018)

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