6.6.3.050 Statement of Investment Policy Objectives and Guidelines – Asset Appreciation (Long-Term) Investment Portfolio.

SCOPE OF THIS INVESTMENT POLICY

This statement of investment policy ("Investment Policy" or "Statement"), reflects the investment policy, objectives, and constraints of the Pueblo de San Ildefonso ("Pueblo") Investment Account(s).

PURPOSE OF THIS INVESTMENT POLICY STATEMENT

The statement of investment policy is set forth by the Council of the Pueblo de San Ildefonso in order to:

1. Define and assign the responsibilities of all involved parties.

2. Support the goal of preservation of principal of the Pueblo's invested assets.

3. Establish a clear understanding for all involved parties of the investment goals and objectives of the Investment Account(s) assets.

4. Offer guidance and limitations to all Investment Managers regarding the investment of the Investment Account(s) assets.

5. Establish a basis for evaluating investment results.

6. Manage the Investment Account(s) assets according to prudent standards as established in common trust law.

7. Establish the relevant investment time horizon for which the Investment Account(s) assets will be managed.

In general, the purpose of this statement is to outline a philosophy and attitude which will guide the investment management of the assets toward the desired results. It is intended to be sufficiently specific to be meaningful, yet flexible enough to be practical.

DELEGATION OF AUTHORITY

The Governor and Council are fiduciaries, and are responsible for directing and monitoring the investment management of Investment Account(s) assets. The Governor is authorized with certain responsibilities to engage and direct professional experts in various fields. These include, but are not limited to:

1. Investment Manager. The investment manager has discretion to purchase, sell or hold the specific securities that will be used to meet the Investment Account(s)'s investment objectives.

2. Investment Committee. There shall be an Investment Committee with the specific purpose and responsibility of establishing, maintaining and administering the Investment Policy and other tasks as deemed necessary.

3. Custodian. The custodian will, or through agreement with a sub-custodian, hold securities in street name owned by the Investment Account(s), collect dividend and interest payments, redeem maturing securities and effect receipt and delivery following purchase and sales. The custodian will also perform regular accounting of all assets owned, purchased, or sold, as well as movement of assets into and out of the Investment Account(s).

4. Additional specialists such as attorneys, auditors, actuaries, and others may be authorized by the Council to assist in meeting its responsibilities and obligations to administer the Investment Account(s) assets prudently.

The Council will not reserve any control over investment decisions, with the exception of specific limitations described in these statements. Managers will be responsible and accountable to achieve the objectives herein stated. While it is not believed that the limitations will hamper investment managers, each manager should request modifications which they deem appropriate.

If such experts employed are also deemed to be fiduciaries, they must acknowledge such in writing. All expenses for such experts must be customary and reasonable, and will be borne by the Investment Account(s) as deemed appropriate and necessary.

DEFINITIONS

1. "Investment Account(s)" shall mean the Pueblo de San Ildefonso Investment Account(s).

2. "Council" shall refer to the Council of the Pueblo de San Ildefonso that governs the Investment Account(s) as specified by the Pueblo.

3. "Investment Committee" shall refer to the committee established by this Investment Policy and comprised of three (3) members. These members include Governor, Controller, and Tribal Administrator or their designee.

4. "Fiduciary" shall mean any individual or group of individuals that exercise discretionary authority or control over fund management or any authority or control over management, disposition or administration of the Investment Account(s) assets.

5. "Agreement" shall mean the Pueblo de San Ildefonso Governing Agreement.

6. "Investment Manager" shall mean any individual, or group of individuals, employed to manage the investments of all or part of the Investment Account(s) assets.

7. "Securities" shall refer to the marketable investment securities which are defined as acceptable in this Statement.

8. "Investment Horizon" shall be the time period over which the investment objectives, as set forth in this Statement are expected to be met. The investment horizon for the Investment Account(s) is 10 years.

ASSIGNMENT OF RESPONSIBILITY

Responsibility of the Investment Committee

The Investment Committee's role is a working committee for the purpose of making recommendations to the Council. The Investment Committee is charged with the following responsibilities.

1. Review and recommend changes to the investment policy, if necessary.

2. Meet quarterly, or as needed, to deliberate such topics as economic outlook, portfolio diversification, potential risks and target a rate of return for the investment account(s).

3. Provide quarterly reports to the Council summarizing the activity of the Investment Account(s) and compare the performance of the Investment Account(s) to indices and to other investment managers with a similar investment style.

4. Review the investment history of the Investment Account(s) and make recommendations to the Council.

5. Make recommendations to the Council on the selection and retention of the investment manager and other professional experts subject to authorization by the Council.

Responsibility of the Investment Manager

The Investment Manager must acknowledge in writing its acceptance of responsibility as a fiduciary. The Investment Manager will have full discretion to make all investment decisions for the assets placed under its jurisdiction, while observing and operating within all policies, guidelines, constraints and philosophies as outlined in this Statement. Specific responsibilities of the Investment Managers include:

1. Discretionary investment management including decisions to buy, sell or hold individual securities and to alter asset allocation within the guidelines established in this Policy.

2. Reporting, on a timely basis, quarterly investment performance results to the Governor and Council through the Lt. Governor.

3. Communicating to the Governor and Council, through the Lt. Governor, any major changes to economic outlook, investment strategy, or any other factors which affect implementation of investment process, or the investment objective progress of the Investment Account(s)'s investment management.

4. Informing the Governor and Council, through the Lt. Governor, regarding any qualitative change to the investment management organization. Examples include changes in portfolio management personnel, ownership structure, investment philosophy, etc.

GENERAL INVESTMENT PRINCIPLES

1. Investments shall be made solely in the interest of the Pueblo de San Ildefonso.

2. The Account(s) shall be invested with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would use in the investment of a fund of like character and with like aims.

3. Investment of the Account(s) shall be diversified as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.

4. The Council may employ one or more investment managers of varying styles and philosophies to attain the Account(s)'s objectives.

5. Cash is to be employed productively at all times, by investment in short term cash equivalents to provide safety, liquidity and return.

INVESTMENT MANAGEMENT POLICY

1. Preservation of Capital – Consistent with their respective investment styles and philosophies, investment managers should make reasonable efforts to preserve capital, understanding that losses may occur.

2. Risk Aversion – Understanding that risk is present in all types of securities and investment styles, the Council recognizes that some risk is necessary to produce long-term investment results that are sufficient to meet the Investment Account(s)'s objectives. However, the investment managers are to make reasonable efforts to control risk, and will be evaluated regularly to ensure that the risk assumed is commensurate with the given investment style and objectives.

3. Adherence to Investment Discipline – Investment managers will be expected to adhere to the investment management styles for which they were hired. Managers will be evaluated regularly for adherence to investment discipline.

INVESTMENT OBJECTIVES

In order to meet its needs, the investment strategy of the Pueblo is to emphasize total return; that is, the aggregate return from capital appreciation and dividend and interest income.

SPECIFIC INVESTMENT GOALS

Over the investment horizon established in this Statement, it is the goal of the aggregate Investment Account(s) assets to exceed an absolute annualized, return of 10% over a market cycle of 10 years unless the Tribe hires an additional investment manager(s) with a different investment style of investments.

The investment goal above is the objective of the aggregate Investment Account(s), and is not meant to be imposed on each investment account (if more than one account is used). The goal of the investment manager, over the investment horizon, shall be to:

1. Meet or exceed the market index, or blended market index, selected and agreed upon by the Investment Committee that most closely corresponds to the style of the investment manager.

2. Display an overall level of risk in the portfolio which is consistent with the risk associated with the benchmark specified above. Risk will be measured by the standard deviation of quarterly returns.

Specific investment goals and constraints for each investment manager, if any, shall be incorporated as part of this Statement of Investment Policy. The manager shall receive a written statement outlining his/her specific goals as they differ from those objectives of the entire Investment Account.

DEFINITION OF RISK

The Council realizes that there are many ways to define risk. The Council believes that any person or organization involved in the process of managing the Pueblo's assets understands how the Pueblo defines risk so that the assets are managed in a manner consistent with the Investment Account(s)'s objectives and investment strategy as defined in this statement of investment policy. The Council defines risk as:

The probability of not meeting the Investment Account(s)'s objectives.

LIQUIDITY

To minimize the possibility of a loss caused by the need to liquidate securities, the Governor will periodically provide investment managers with an estimate of expected net cash flow. The Governor will notify the investment manager in a timely manner, to allow sufficient time for the money manager to build up necessary liquid reserves. The Governor will inform the Council, through the Lt. Governor, of the cash flow need estimate provided to the Investment Manager(s).

To maintain the ability to deal with unplanned cash requirements that might arise, the Council prefers that a minimum of 1% of Investment Account(s) assets shall be maintained in cash of cash equivalents, including money market funds or short-term U.S. Treasury bills.

MARKETABILITY OF ASSETS

The Council requires that all Investment Account(s) assets be invested in liquid securities, defined as securities that can be transacted quickly and efficiently for the Investment Account(s), with minimal impact on market price.

INVESTMENT GUIDELINES

Allowable Assets

1. Cash Equivalents

• Treasury Bills
• Money Market Funds
• STIF (Short-Term Interest Funds)
• Certificates of Deposit

2. Equities

• Common Stocks
• Convertible Notes and Bonds
• Convertible Preferred Stocks
• Exchange Traded Funds (ETFs)
• American Depository Receipts (ADRs)

Derivative Investments

Derivative securities are defined as synthetic securities whose price and cash flow characteristics are based on the cash flows and price movements of other underlying securities. Most derivative securities are derived from equity of fixed income securities and are packaged in the form of options, futures, CMOS (PAC bonds, IO's, PO's, residual bonds, etc.), and interest rate swaps, among others.

The Council feels that many derivative securities are relatively new and therefore have not been observed over multiple economic cycles. Due to this uncertainty, investment in derivative securities shall not be permitted.

Stock Exchanges

To ensure marketability and liquidity, investment advisors will execute equity transactions through the following exchanges: New York Stock Exchange; American Stock Exchange; NASDAQ over-the-counter market; and the major Canadian Exchanges.

Prohibited Assets

Prohibited Investments include, but are not limited to the following:

1. Commodities and Futures Contracts

2. Private Placements

3. Options

4. Unlisted Limited Partnerships

5. Venture-Capital Investments

6. Interest-Only (10), Principal-Only (PO), and Residual Tranche CMOS of CDOS

7. Foreign Debt Instruments

Prohibited Transactions

Prohibited Transactions include, but are not limited to the following:

1. Short Selling

2. Margin Trading

Asset Allocation Guidelines

Investment Management of the assets of the Pueblo Investment Account(s) shall be in accordance with the following asset allocation guidelines:

1. Aggregate Investment Account(s) Asset Allocation Guidelines (at market value)

2. The Council may employ investment managers whose investment disciplines require investment outside the established asset allocation guidelines. However, taken as a component of the aggregate Investment Account(s), such disciplines must fit within the overall asset allocation guidelines established in this Policy. Such investment managers will receive written direction from the Investment Committee regarding specific objectives and guidelines.

3. In the event that the above aggregate asset allocation guidelines are violated, for reasons

including but not limited to market price fluctuations, the Investment Committee will instruct the Investment Manager(s) to bring the portfolio(s) into compliance with these guidelines as promptly and prudently as possible. In addition, in the event that any individual Investment Manager's portfolio is in violation with its specific guidelines, for reasons including but not limited to market price fluctuations, the Council expects that the Investment Manager will bring the portfolio into compliance with these guidelines as promptly and prudently as possible without instruction from the Governor or Council.

Diversification for Investment Managers

It is not necessary or desirable that securities held in the Investment Account(s) represent a cross section of the economy. However, in order to achieve a prudent level of portfolio diversification for the Investment Account(s), the following allocation limitations will be imposed:

Equity: Sector of Industry Group allocations is limited to a current market value of 35% of the Account(s). The current market value of any one equity security is limited to 15% of any single segregated manager's portfolio. These allocation limitations pertain to each separately managed portfolio.

Guidelines for Cash Equivalents

Money Market Funds selected shall contain securities whose credit rating at the absolute minimum would be rated investment grade by Standard and Poor's, and/or Moody's.

SELECTION OF INVESTMENT MANAGERS

The recommendation of Investment Manager(s) by the Governor and approval by the Council must be based on prudent due diligence procedures. A qualifying investment manager must be a registered investment advisor under the Investment Advisors Act of 1940, or a bank or insurance company. The Council requires that each investment manager provide, in writing, acknowledgement of fiduciary responsibility to the Pueblo.

INVESTMENT MANAGER PERFORMANCE REVIEW AND EVALUATION

Performance reports generated by the Manager(s) shall be compiled at least quarterly and communicated to the Governor, and Council through the Lt. Governor, for review. The investment performance of the total Account(s), as well as each individual manager, will be measured against commonly accepted performance benchmarks. Consideration shall be given to the extent to which the investment results are consistent with the investment objectives, goals and guidelines as set forth in this Statement. The Governor and Council intend to evaluate the portfolio(s) over a 3 year period, but reserve the right to terminate a manager for any reason including the following:

1. Investment performance which is significantly less than anticipated given the discipline employed and the risk parameters established, or unacceptable justification of poor results.

2. Failure to adhere to any aspect of this Statement of Investment Policy, including communication and reporting requirements.

3. Significant qualitative changes to the investment management organization.

Investment managers shall be reviewed regularly regarding performance, personnel, strategy, research capabilities, organizational and business matters, and other qualitative factors that may impact their ability to achieve the desired investment results.

AMENDMENT

The Council may amend this Statement of Investment Policy at any time upon majority vote of the Council, and in accordance with the requirements of the Agreement.

PUEBLO DE SAN ILDEFONSO ASSET APPRECIATION (LONG-TERM) INVESTMENT PORTFOLIO

SPENDING POLICY

In order to allow for growth of the portfolio as well as preservation of principal, none of the portfolio's assets shall be used for operations or other expenses.

Variances to this limitation may be made only with the Council's approval. It is the Council's intent that such variances be granted only in case of emergency.