The Episcopal Church Foundation in West Texas

Investment Program

March 31, 2015

Market Report
Investment gains in the US stock market were modest for the first quarter. The S&P 500
indexa frequently quoted indexgained less than 1% in the quarter. Volatility was
pronounced, with significant swings up and down occurring frequently. The domestic stock
market was heavily influenced by the latest news: central bank actions, Greek elections, the price
of oil, strength of the dollar, merger activity, and concern about slowing corporate earnings.
As shown below, small capitalization stocks out-performed large cap and the growth
style outperformed the value style. International stocks achieved nice gains after sustaining
losses in the prior quarter. The significant gains in international stocks were surprising
considering the head wind caused by the strengthening dollar.
Even though the Fed dropped its pledge to be patient about increasing interest rates,
investors seemed to think any such action was not imminent, and bond prices rose during the
quarter, with corresponding declines in bond yields.
Market Returns for Quarter

6.6%

3.8%

3.8%

2.0%

1.6%
0.6%

-0.7%

Large Cap
Growth

Large Cap
Value

Small Cap
Growth

Small Cap
Value

International
Stocks

Short Term
Bonds

Intermediate
Bonds

Model Portfolio Review

All four of the Foundations model portfolios achieved gains for the quarter, ranging
from 0.6% for Capital Maintenance to 2.0% for Growth. Relative performance for the quarter
was mixed with two models underperforming their peer groups and two models outperforming
their peer groups. Performance compared to passive indices was generally favorable.
Two PIMCO funds that had been used as the fixed income component of the models
since the inception of the current investment program in late 1999 were both replaced at the
beginning of the quarter. Two Vanguard bond index funds were used for fixed income during
the quarter. These changes are reflected in the model portfolio description pages found on the
Foundations website.
Details of the performance of the four models are shown below.
Asset Class Investment Results
The Foundations 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
Common Stocks
Fixed Income
Cash Equivalents

Return
1.8%
2.6%
0.0%

Benchmark
1.8%
1.6%
0.0%

Account Status
Foundation assets at quarter-end totaled $64.5 million, an increase of $3.3 million during
the quarter. Investment gains were $1.1 million or 1.8%. Two new church accounts were
opened during the quarter, with combined initial deposits of $664 thousand.
At March 31st, the Foundation had a total of 201 accounts as follows:
Ownership
Churches/Schools
Diocese

Number of Accounts
146
55

Amount
35.6 million
28.9 million

Portfolio Performance as of March 31, 2015*

Growth

Portfolio Total Return

+/- Peer Group Composite
+/- Index Composite

3 Mo

1 Yr

3 Yr

5 Yr

2.04
(0.18)
(0.01)

5.72
(0.66)
(1.99)

9.90
(0.04)
(0.96)

9.46
0.42
(0.43)

3 Mo

1 Yr

3 Yr

5 Yr

1.81
(0.08)
0.02

5.66
(0.30)
(1.53)

8.33
0.19
(0.48)

8.22
0.44
(0.22)

3 Mo

1 Yr

3 Yr

5 Yr

1.70
0.18
0.28

5.08
0.15
(0.84)

6.61
0.27
(0.12)

6.64
0.41
0.00

3 Mo

1 Yr

3 Yr

5 Yr

0.63
0.20
0.24

1.49
0.47
0.36

0.95
0.04
0.21

1.44
0.25
0.40

Growth & Income

Portfolio Total Return

+/- Peer Group Composite
+/- Index Composite

Income

Portfolio Total Return

+/- Peer Group Composite
+/- Index Composite

Capital Maintenance

Portfolio Total Return

+/- Peer Group Composite
+/- Index Composite

* Returns for greater than one year are annualized. Past performance does not guarantee future
results.