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.
Risk assets sold off sharply during the 4th Quarter, leading the domestic stock market down for its worst annual performance since 2008. Investors spurned healthy US economic data, as unemployment remained below 4%, inflation (as measured by CPI) held above 2% and corporate earnings continued to post impressive double-digit growth. Non-US stocks were weighted down by US-China trade war rhetoric, uncertainty surrounding the pathway and effects of Brexit and the unsustainably high level of non-performing loans on the books of Italian banks. In addition, the unrelenting strength of the US dollar resulted in big declines for emerging market equity markets. Bonds proved more resilient but still the Barclays Global Aggregate Bond Index lost -1.2% in 2018. Towards the end of the year, credit spreads began to widen, signaling concern for lower liquidity and the overall quality of corporate bonds. As a result, high yield bonds fell -4.5% in Q4.Click here to read the entire commentary