Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Friday, July 29, 2005

Fecundity & Trust Investment

An interesting approach to trust investments is detailed by James P. Garland, the president of The Jeffrey Company in Columbus, Ohio, in his article Long-Duration Trusts and Endowments, J. Portfolio Management (Spring 2005).

Here is an informative excerpt from Mr. Garland's article:

The primary objective of most endowment funds, and of many long-duration trusts, is to provide spendable cash for their owners and beneficiaries for a very long time.  Given this objective, the most important point to consider in evaluating the health of endowments and trusts is their fecundity.  Fecund means "fruitful or fertile," and cash withdrawals from a portfolio are effectively its fruit.  Fecundity is a measure of the spendable cash that a fund can provide today without unduly threatening its ability to provide similar amounts--adjusted for inflation--in the future.


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