The Episcopal Church Foundation in West Texas Investment Program

September 30, 2013 Market Report The domestic stock market soared to new heights during the third quarter, adding to gains achieved earlier in the year. As measured by the Vanguard Total Stock Market Index, common stocks have gained over 21% year-to-date. For the third quarter, common stocks gained 6.4% using the Russell 3000 index as a proxy for the market. As shown below, all capitalization sectors and all investment styles achieved gains for the quarter. Small cap stocks outperformed large by over 400 basis points. The growth style outperformed the value style in both small and large cap categories by significant amounts. International stocks turned around from last quarter and gained over 11%. Performance of the US bond market was up and down during the quarter, with most of the volatility being traced to mixed signals from the Federal Reserve. The looming expected change in Fed Chairman was also worrisome for fixed income investors. Nevertheless, bonds managed to be in positive territory for the quarter. Market Returns for Quarter
12.8%

11.6%

8.1%

7.6%

3.9%

0.4%

0.1%

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. The three models with an allocation to common stocks had impressive gains, ranging from 4.0% to 7.2%. Relative performance for the quarter was favorable with all of the four models outperforming their peer groups and composite indices. Relative performance for one-year and longer time periods was generally favorable. 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 10.2% 1.2% 0.0% Benchmark 6.4% 0.1% 0.0%

Account Status Total Foundation assets at quarter-end were $57.9 million, an increase of $3 million during the quarter. Investment gains totaled $3.6 million or 6.6%. Five new church accounts were opened during the quarter, with initial balances of $1 million. At September 30th, the Foundation had a total of 190 accounts as follows: Ownership Churches/Schools Diocese Number of Accounts 132 58 Amount 30.1 million 27.8 million

Portfolio Performance as of September 30, 2013*

Growth 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite 7.18 1.73 1.94 1 Yr 15.07 0.58 0.63 3 Yr 10.74 0.71 (0.10) 5 Yr 8.74 0.76 0.41

Growth & Income 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite 5.90 1.76 2.00 1 Yr 11.31 0.80 0.89 3 Yr 9.00 0.70 0.11 5 Yr 8.12 0.98 0.80

Income 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite 4.04 1.16 1.34 1 Yr 7.65 0.45 0.66 3 Yr 6.89 0.53 0.21 5 Yr 7.01 1.01 0.86

Capital Maintenance 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite 0.40 0.16 0.20 1 Yr (0.09) (0.06) (0.06) 3 Yr 1.20 0.27 0.43 5 Yr 2.58 0.79 1.06

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