Berkshire Taconic Community Foundation's Managed Pool portfolio declined 5.1% in the third quarter of 2015, bringing the year to date performance down 2.4%. Notwithstanding, since inception in August 1999 the portfolio has generated an annualized return of 6.2%, outperforming a traditional global blend of assets (65% MSCI AC World Index/35% Barclays Global Aggregate Index) by 2% with substantially less volatility. Its ten-year average annualized return has outperformed the policy benchmark by a full 1%.
Strong relative performance from the foundation's investment managers helped to offset a general decline in global equities for the most recent quarter, and as a result, the portfolio outperformed its benchmark Index by .40%. However, the weight to domestic equities in a period that experienced a general market correction prevented higher gains from the non-U.S. (developed and emerging equity) and private equity segments of the portfolio. The foundation's flexible capital portfolio experienced minimal losses and remains positive (0.7%) for the year, with all managers outpacing their respective HRFI benchmarks. The fixed income segment of the portfolio contracted 1.4% and somewhat below the Barclays Capital U.S. Aggregate Bond Index, which increased 1.2% during the quarter.
The foundation's portfolio has been built for a variety of market conditions in an effort to generate long-term performance in excess of inflation and grantmaking needs, with a high degree of diversification. While mindful of the market environment, the investment committee remains committed to the long-term, strategic management performance goals, making only modest adjustments to the asset allocation and replacing non-performing managers when necessary.
*Portfolio assets were $106.6 million at September 30, 2015, and the portfolio distribution was 58.2% global public equity, 6.8% global private equity, 24.7% flexible capital, 1.2% inflation hedging, 7.7% global fixed income, and 1.4% liquid capital. During the quarter, the foundation increased its investments in the Causeway Global Value Fund, Highclere International Smaller Companies Fund, and the Dodge & Cox International Stock Fund, and made a new commitment to the Warburg Pincus Private Equity Fund XII.
For more information on the foundation's investment performance and managers, please
visit our website or contact Vice President for Finance and Administration A. J. Pietrantone at
by email or 413.229.0370.
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