Investment Summary as of July 31, 2016

On June 23rd, British voters approved a referendum to leave the European Union. This was surprising to the markets and resulted in increased volatility for both stocks and bonds as investors weighed the political and economic impact of the exit decision.  While interest rates and some currencies have struggled since, equities and bond values have rebounded significantly. U.S. stocks in the S&P 500 Index gained 3.7% in July for a year-to-date total return of 7.7%. International developed market stocks in the MSCI EAFE Index were up 5.0% in July but are still down (1.6%) year-to-date. Bonds in Barclays Capital U.S. Aggregate Index gained 0.6% for the month and are up 6.0% year-to-date.

The Diversified Fund and Endowment Investment Fund gained 3.0% for the month, just off the benchmark return of 3.1%. The Funds are up 5.9% year-to-date versus a benchmark gain of 6.9%. Detractors from benchmark relative performance have been:

  • An overweight to small-cap stocks in the U.S. equity portfolio while large stocks have been more in favor. Exposure to financials, consumer discretionary, and select energy companies has also detracted from performance.
  • Diversifying inflation protection strategies while we remain in a period of low inflation.
  Month Ended
July 31, 2016
  Year-to-Date
July 31, 2016
Diversified Fund 3.0%   5.9%
Benchmark* 3.1%   6.9%
Over (Under) Performance (0.1%)   (1.0%)
       
Endowment Investment Fund 3.0%   5.9%
Benchmark* 3.1%   6.9%
Over (Under) Performance (0.1%)   (1.0%)
       
Fixed Income Fund 1.1%   7.8%
BC U.S. Aggregate 0.6%   6.0%
Over (Under) Performance 0.5%   1.8%
       
* – Blend of 1) Wespath benchmark of 40% Russell 3000 Index, 25% MSCI ACWI Index (excluding US), 25% Barclays Capital U.S. Universal Index (excluding mbs), 10% Barclays Capital U.S. Government Inflation-Linked Bond Index and 2) HFRI Fund of Funds Composite Index for actual percentage of alternatives

 

Notes: Historical returns are time-weighted and net of all fees.   Returns greater than one year are annualized. Past performance is no guarantee of future returns.