Performance with Prudent Stewardship and Stability.
The overriding tenet of our philosophy is to preserve capital and enhance its purchasing power. Our non-profit clients come to us with significant assets, usually the result of the generosity of philanthropists and the ongoing, prudent stewardship by Trustees and staff. They turn to us for stability in their investments and, where relevant, a better understanding of the interrelationship between the organization’s operating performance, debt structure, capital pools and the supporting endowment or foundation. We honor that trust by crafting investment programs that seek to protect capital while meeting long-term investment objectives.
The seemingly unshakable, quiescent stock market finally turned jittery during the first quarter of 2018. After reaching a peak in late January, global markets became volatile and lost ground over the next two months. The sudden downturn was precipitated by technical factors, including sizeable de-leveraging by risk-parity traders. Post-January, markets fell on prospects of higher inflation, rising interest rates, heightened political uncertainty, potential tariff and trade policy missteps, and possible regulatory actions on technology companies. These issues make up a “wall of worry” that, heretofore, has been routinely scaled by investors. While many worrisome issues have been present for some time, the decline in the S&P 500 this quarter marks only its second down quarter in five years. US Treasuries provided no safe haven as yields rose and their performance was negative. Globally, credit spreads widened, leading corporate bonds to underperform sovereigns. TIPs modestly outperformed their nominal counterparts. The US dollar fell particularly against the Euro, British sterling and the Japanese yen. In the face of rising bond yields, real assets such as REITs and MLPs declined sharply.Click here to read the entire commentary