The Episcopal Church Foundation in West Texas

Investment Program

December 30, 2016

Market Report
The US stock market continued to provide nice gains to investors during the fourth
quarter. The Dow Jones Industrial Index, as well as other broader indices, posted several new
highs during the quarter. The Vanguard Total Stock Market index gained 4.1% for the quarter
and 12.7% for the year.
As the chart below shows, for Q4 small cap stocks performed substantially better than
large cap stocks and the value style outperformed the growth style in both large and small cap
categories. International stocks sustained a small loss for the quarter.
The performance of bonds was generally negative for the quarter, as interest rates rose
and prices declined across the maturity spectrum. For the year, both intermediate and shorter
term bonds achieved gains ranging from 1.3% to 2.7% based upon popular indices.
Market Returns for Quarter

14.1%

6.7%
3.6%
1.0%

-0.4%

-0.4%
-3.0%

Large Cap
Growth

Large Cap
Value

Small Cap
Growth

Small Cap
Value

International
Stocks

Short Term
Bonds

Intermediate
Bonds

Model Portfolio Review

Three of four of the Foundations investment strategies (represented by model portfolios)
achieved modest gains for the quarter. Performance relative to peer groups was generally
unfavorable, with only the Capital Maintenance model reflecting favorable performance
compared to peer groups and indices.
Over longer-term periods, all of the four models have achieved reasonable gains,
although performance compared to peer groups and indices continues to struggle.
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
1.3%
-1.3%
0.0%

Benchmark
4.1%
-3.0%
0.0%

Account Status
Foundation assets at quarter-end totaled $63.3 million, an increase of $300 thousand
during the quarter. Investment gains were $252 thousand or 0.4%. Two new accounts were
opened during the quarter, with initial deposits of $433 thousand.
For the year, investment gains totaled $2.5 million or 4%. Ten new accounts were
opened with initial deposits of $1.3 million.
At December 30th, the Foundation had a total of 209 accounts as follows:
Ownership
Churches/Schools
Diocese

Number of Accounts
153
56

Amount
34.7 million
28.6 million

Portfolio Performance as of December 30, 2016*

Growth

Portfolio Total Return

+/- Peer Group Composite
+/- Index Composite

3 Mo

1 Yr

3 Yr

5 Yr

0.52
(1.10)
(1.72)

4.22
(2.65)
(5.11)

2.72
(1.18)
(2.43)

7.85
(0.70)
(1.53)

3 Mo

1 Yr

3 Yr

5 Yr

0.17
(0.73)
(1.09)

4.43
(1.83)
(3.60)

3.03
(0.62)
(1.95)

6.80
(0.20)
(0.97)

3 Mo

1 Yr

3 Yr

5 Yr

0.15
(0.26)
(0.42)

5.02
(0.71)
(1.88)

3.14
(0.12)
(1.12)

5.62
0.11
(0.36)

3 Mo

1 Yr

3 Yr

5 Yr

(0.45)
0.03
0.06

1.27
0.21
0.43

0.85
0.15
0.12

0.88
0.09
0.26

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.