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Market Report
After
four quarters of investment gains—some quite substantial—the world’s
stock markets turned negative in the quarter just ended. At various
times during the quarter, the US stock market experienced a 10%
correction, highlighted by the “flash crash” on May 6th.
Economic data was mixed, and the news was generally bad—the BP oil
spill in the Gulf, the European debt crisis, stubborn unemployment,
and declining consumer confidence. While bad for stocks, this angst
was positive for bonds, especially US Treasuries.
The
Russell 3000 index, a proxy for the US stock market, lost 11.3% for
the quarter. Small capitalization stocks outperformed large cap
stocks by 150 basis points. As shown below, the value style
outperformed the growth style in the large capitalization category,
while small growth outperformed small value. International stocks
performed worse than domestic stocks, with a loss in excess of
13.5%.
As
shown below, bonds enjoyed a very good quarter. US Treasuries had
an exceptionally strong quarter, with long term Treasuries gaining
over 12%.
Market Returns for Quarter
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Model Portfolio Review
Three of the four of the Foundation’s model portfolios
sustained losses this quarter. Performance for the model
portfolios ranged from a gain of 0.6% for the Capital
Maintenance model to a loss of 6.2% for the Growth
model.
Performance
of the models compared to their respective peer groups was generally
favorable for the quarter, while the performance compared to passive
indices was generally unfavorable. Longer term comparisons remain
favorable compared to peer groups and indices.
Details of the performance of the four models are shown below.
Asset Class Investment Results
The Foundation’s performance this quarter for the three
assets classes in which it invests, along with comparative
benchmark returns, are shown in the following table.
|
Asset
Class |
Return |
Benchmark |
|
Common
Stocks |
-11.4 % |
-11.3% |
|
Fixed
Income |
2.6 % |
3.5% |
|
Cash
Equivalents |
0.01
% |
0.01 % |
Account Status
Total
Foundation assets at quarter-end were $38.4 million, a
decrease of $3.2 million during the quarter. Investment
losses totaled $2.2 million or -5.3%. Three new accounts
were adding during the quarter, with initial deposits of
$358 thousand.
At quarter-end the Foundation had a total of 146 accounts as
follows:
|
Ownership |
Number of Accounts |
Amount |
|
Churches/Schools |
89 |
$ 16.0 million |
|
Diocese |
57 |
22.4 million |
|
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* Returns for one year and greater than one
year are annualized. Past performance does not guarantee future
results.
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report,
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