The Episcopal Church Foundation in West Texas

Investment Program

September 30, 2015

Market Report
Following a difficult second quarter, common stock performance in the third quarter
turned decidedly ugly, with losses being sustained across the board. Volatility in stock markets
around the world added to investor angst. Losses in the US stock market now officially meet the
definition of a correctiona peak to trough decline of 10%.
Apparent causes of the worldwide turmoil are numerous, although the reported slow
down in China and the devaluation of the yuan in early August were the spark that ignited the
instability. Conflicting statements by the Fed regarding a possible increase in interest rates
added fuel to the fire.
As shown in the graph below, while large capitalization stocks significantly outperformed
small cap stocks, both sectors lost money. International stocks performed even worse than
domestic.
Bond market results were positive for the quarter, although by modest amounts.
Market Returns for Quarter

0.3%

1.2%

-5.3%

-8.4%
-10.7%
-11.6%
-13.1%

Large Cap
Growth

Large Cap
Value

Small Cap
Growth

Small Cap
Value

International
Stocks

Short Term
Bonds

Intermediate
Bonds

Model Portfolio Review

Three of the Foundations four model portfolios sustained losses for the quarter, ranging
from -3.1% for Income to -6.1% for Growth. The Capital Maintenance model achieved a slight
gain of 0.04%. Relative performance for the quarter was generally unfavorable, with most of the
individual managers underperforming their peer groups and relevant indices.
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
-8.9%
-0.7%
0.0%

Benchmark
-7.3%
1.2%
0.0%

Account Status
Foundation assets at quarter-end totaled $59.4 million, a decrease of $4.1 million during
the quarter. Investment losses were $3.4 million or -5.4%. No new accounts were opened
during the quarter.
At September 30th, the Foundation had a total of 203 accounts as follows:
Ownership
Churches/Schools
Diocese

Number of Accounts
148
55

Amount
32.5 million
26.9 million

Portfolio Performance as of September 30, 2015*

Growth

Portfolio Total Return

+/- Peer Group Composite
+/- Index Composite

3 Mo

1 Yr

3 Yr

5 Yr

(6.09)
(0.26)
(0.64)

(3.04)
(1.68)
(2.57)

6.80
(0.36)
(1.01)

7.53
0.08
(0.78)

3 Mo

1 Yr

3 Yr

5 Yr

(4.42)
(0.18)
(0.67)

(1.62)
(1.13)
(2.19)

5.72
(0.13)
(0.71)

6.57
0.18
(0.54)

3 Mo

1 Yr

3 Yr

5 Yr

(3.11)
(0.17)
(0.65)

(0.71)
(0.52)
(1.51)

4.34
(0.05)
(0.46)

5.21
0.20
(0.28)

3 Mo

1 Yr

3 Yr

5 Yr

0.04
0.02
(0.22)

0.52
0.16
(0.22)

0.59
0.13
0.09

0.93
0.09
0.17

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.