Investment Performance Summary As of 3/31/2015 Individual Investment Options YTD 1 Month 3 Month 1 Blended Equity Benchmark S&P 500 TR USD MSCI ACWI Ex USA NR USD Intermediate-Term Fixed Income TR Intermediate-Term Fixed Income Benchmark Short-Term Fixed Income TR Short-Term Fixed Income Benchmark Money TR USTREAS T-Bill Auction Ave 3 Mon 2.31 0.95 3.49 2.07 1.00 0.99 Individual investment options allow donors to recommend a custom allocation strategy, which can include one or more Investment s. -1.18-1.15-1.58-1.62 Please refer to the quarterly Investment Performance Supplemental Report for benchmark definitions 0.51 0.50 0.36 0.34 Investment Mix Options YTD 1 Month 3 Months 1 Aggressive Mix TR Aggressive Mix Benchmark Moderately Aggressive Mix TR Moderately Aggressive Mix Benchmark Moderate Mix TR Moderate Mix Benchmark Conservative Mix TR Conservative Mix Benchmark Risk Averse Mix TR 2.27 2.19 2.00 1.94 1.66 1.62 1.30 1.28-0.86-0.84-0.56-0.55-0.28-0.28-0.01 USTREAS T-Bill Auction Ave 3 Mon 0.02 0.06 0.07 1.44 Investment Mix options offer a simple, one-stop approach to an investment strategy that best reflects your charitable goals. Donors recommend one option, which Greater Horizons rebalances. 2.31 0.95 3.49 2.07 1.00 0.99 2.27 2.19 2.00 1.94 1.66 1.62 1.30 1.28 The Long Term I Mix TR has been renamed the Moderately Aggressive Mix TR The Aggressive Mix TR inception date is 6/30/14; performance prior to that date is pro-forma. Returns for periods greater than 1 year are compound annual returns. TR = Total Return 9.42 9.42 12.73-1.01 5.85 5.97 2.38 2.45 0.02 0.02 8.40 8.42 7.02 7.05 5.51 5.55 3.98 4.03 0.02 13.91 14.40 16.11 6.40 3.67 1.73 0.01 0.06 11.89 12.01 9.60 9.42 7.16 6.77 4.73 4.13 0.01 11.94 12.59 14.47 4.82 5.50 2.55 0.05 0.07 10.63 11.01 9.02 9.17 7.10 7.05 5.14 4.88 0.05 7.22 7.73 8.01 5.46 1.58 1.44 7.10 7.34 6.45 6.50 5.75 5.60 4.95 4.60 1.58 Current Investment Mix Allocations Aggressive Moderately Aggressive Moderate Conservative Risk Averse Equity 8 6 4 2 Interm- Term Fixed Income 1 14% 18% 22% Short- Term Fixed Income 1 21% 27% 33% Estimated Investment Management Fees for the Investment Mix Options Aggressive Moderately Aggressive Moderate Conservative Risk Averse 0.07% 0.08% 0.1 0.11% 0.14% Money 1 2 10 Performance is presented gross of Greater Horizons administrative fees but net of all investment management fees, brokerage, consulting and other transaction costs. Customer Service If you have any questions about your fund or wish to request a change in your investment mix, please contact Donor Services at support@greaterhorizons.org or 866.627.3440. Contact David Anderson at anderson@growyourgiving.org or 816.627.3407 for more information on the pools, including their component funds and blended benchmarks, the Board of Directors Investment Committee, or the Investment Policy Statement. 1055 Broadway Blvd., Suite 130, Kansas City, MO 64105 866.719.7886 www.greaterhorizons.org
Equity As of 3/31/2015 Equity & Blended Benchmark YTD 1 Equity Benchmark TR 2.31 2.31 9.42 14.40 12.59 7.73 Equity Holdings & Benchmarks YTD 1 Vanguard Instl Ttl Stk Mkt Idx InstlPls CRSP US Total TR USD Vanguard Developed s Idx Instl FTSE Developed ex North America NR USD Vanguard Emerging Mkts Stock Idx I FTSE Emerging NR USD Equity - Equity Sectors (Morningstar) 9.42 13.91 11.94 7.22 1.79 1.81 5.55 5.03 1.88 1.79 1.81 5.55 5.03 1.88 12.37 12.33-0.87-0.75 3.08 3.24 16.48 16.41 8.95 8.72 0.60 0.84 14.83 14.74 6.22 6.15 1.87 1.94 8.64 8.64 5.16 5.26 8.22 9.06 Basic Materials 4.6 Consumer Cyclical 11.7 Financial Services 16.2 Real Estate 3.7 Consumer Defensive 9.0 Healthcare 13.7 Utilities 3.1 Communication Services 4.0 Energy 6.9 Industrials 11.6 Technology 15.4 Total 100.0 % The purpose of the Equity is to facilitate the funding of current and future charitable needs of participating charitable funds and organizations. The long term investment objective of the Equity is to obtain broad equity market exposure utilizing a passive, cost effective approach that is diversified across market capitalizations and regions. A secondary objective is to provide cash flows to fund distributions and to preserve the purchasing power of the funds to meet charitable needs now and in the future. Equity - Top Holdings Total Value: $386,938,184 Vanguard Instl Ttl Stk Mkt Idx InstlPls Vanguard Developed s Idx Instl Vanguard Emerging Mkts Stock Idx I Top Stock Holdings 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Apple Inc. Exxon Mobil Corp. Microsoft Corp. Johnson & Johnson Wells Fargo & Co. Berkshire Hathaway Inc. Cl B General Electric Co Proctor & Gamble Co. JPMorgan Chase & Co. Pfizer Inc. Value (mil) Portfolio Weighting % 292 75 76 20 19 5 Equity Benchmark Current CRSP US Total Stock 7 FTSE Developed ex North Amer. 2 FTSE Emerging s Equity Benchmark 01/14-03/15 CRSP US Total Stock 7 FTSE Developed ex North Amer. 1 FTSE Emerging s 1 Equity Benchmark 2011-2013 Wilshire 5000 78. MSCI EAFE 16. MSCI Emerging s 5. Equity Benchmark 2003-2011 Wilshire 5000 8 MSCI EAFE 2 Performance is presented gross of administrative fees but net of all investment management fees, brokerage, consulting and other transaction costs. Estimated Investment Management Fee:.06%
Equity Investment Growth Time Period: 1/1/2000 to 3/31/2015 200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 2001 2003 2005 2007 2009 2011 2013 2015 Equity Benchmark TR Calendar Returns Return 37.5 30.0 22.5 15.0 7.5 0.0-7.5-15.0-22.5-30.0-37.5-45.0 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Equity Benchmark TR - ly Returns 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1.59 5.04-1.13 2.89 8.56 9.26 1.43 7.25 8.64 29.12 12.55-4.32 5.76 1.77 15.90 5.36-0.29-16.92 9.50-4.43 4.97-11.22 12.30 10.87 16.03-10.40 19.30 16.60 4.70 30.49-9.92-0.77-13.02-22.99-40.13 2.50 6.29 1.88-2.06 8.71 7.19-2.21 3.35 8.35 17.37-1.52 4.97 1.92 7.54
Intermediate-Term Fixed Income As of 3/31/2015 Int-Term Fixed Income & Blended Benchmark Intermediate-Term Fixed Income TR Intermediate-Term Fixed Income Benchmark to Date 1 5.85 2.07 2.07 5.97 3.67 5.50 The purpose of the Intermediate-Term Fixed Income is to provide capital preservation and current income to help meet spending requirements of donor portfolios. The will utilize a passive, cost effective approach with a secondary objective to provide broad exposure to U.S. income markets. The is diversified across U.S. Treasuries notes and bonds, corporate bonds, bank loans, mortgaged-backed securities and U.S. Treasury Inflation-Protected Securities. The average effective duration and interest rate risk of the will be commensurate with broad fixed income benchmarks such as the Barclays U.S. Aggregate Bond Index. Intermediate-Term Fixed Income Holdings Int-Term Fix. Income Holdings & Benchmarks Vanguard Interm-Term Bond Index I to Date 2.46 2.46 1 6.94 4.04 6.11 Total Value: $84,300,798 Value (mil) Portfolio Weight % Barclays US 5-10Y GovCredit FlAdj TR USD 2.45 2.45 7.03 4.06 6.12 Vanguard Interm-Term Bond Index I 59 70 5.28 17 20 Barclays US MBS TR USD 1.06 1.06 5.53 2.54 3.63 4.87 Vanguard Shrt-Term Infl-Prot Sec Idx Ins 4 5 Vanguard Shrt-Term Infl-Prot Sec Idx Adm -1.02-0.93-0.44 1.38 3.04 SPDR Barclays High Yield Bond ETF Fidelity Instl MM Fds Prime MMkt I 4 5 0 0 SPDR Barclays High Yield Bond ETF 0.58 6.14 7.62 Barclays VLI High Yield TR USD 2.59 2.59 1.64 6.98 8.57 8.28 Int.-Term Fixed Income Benchmark Weights Percent Inception Date: January 1, 2014 Fixed Income Statistics Barclays US 5-10Y Gov/Credit FlAdj TR USD Barclays US MBS Float Adjusted TR USD Barclays VLI High Yield TR USD 7 2 Performance is presented gross of administrative fees but net of all investment management fees, brokerage, consulting and other transactions costs. Estimated Investment Management Fee:.11% Average Yield to Maturity 2.63% Average Effective Duration 5.70 years SEC Yield 2.19%
Short-Term Fixed Income As of 3/31/2015 Short-Term Fix. Inc. & Blended Benchmark Short-Term Fixed Income TR Short-Term Fixed Income Benchmark To Date 1 1.00 1.00 2.38 0.99 0.99 2.45 1.73 2.55 The purpose of the Short-Term Fixed Income is to provide capital preservation and current income to help meet spending requirements of donor portfolios. The will utilize a passive, cost effective approach with a secondary objective to provide broad exposure to U.S. income markets. The is diversified across U.S. Treasury notes and bonds, corporate bonds, bank loans, mortgaged-backed securities and U.S. Treasury Inflation-Protected Securities. The will have a lower average effective duration than broad fixed income market benchmarks such as the Barclays U.S. Aggregate Bond Index, hence limiting overall interest rate risk. Short-Term Fixed Income Holdings Short-Term Fix. Inc. Holdings & Benchmarks Vanguard Short-Term Bond Idx I to Date 1.02 1.02 1 1.89 1.37 Total Value: $124,375,940 Value (mil) Portfolio Weight % Barclays US 1-5Y GovCredit FlAdj TR USD 0.97 0.97 1.99 1.46 2.18 Vanguard Short-Term Bond Idx I 87 70 5.28 25 20 Barclays US MBS Float Adjusted TR USD 1.01 1.01 5.09 2.50 3.54 Vanguard Shrt-Term Infl-Prot Sec Idx Ins 6 5 Vanguard Shrt-Term Infl-Prot Sec Idx Adm -1.02-0.93-0.44 1.38 3.04 PowerShares Senior Loan ETF Fidelity Instl MM Fds Prime MMkt Instl 6 5 0 0 PowerShares Senior Loan ETF 1.39 1.39 1.15 4.02 S&P/LSTA U.S. Leveraged Loan 100 TR USD 1.85 1.85 1.83 4.58 4.79 4.92 Short-Term Fixed Income Benchmark Weights Percent Inception Date: January 1, 2014 Fixed Income Statistics Barclays US 1-5Y GovCredit FlAdj TR USD Barclays US MBS Float Adjusted TR US S&P/LSTA U.S. Leveraged Loan 100 TR USD 7 2 Performance is presented gross of administrative fees but net of all investment management fees, brokerage, consulting and other transactions costs. Estimated Investment Management Fee:.12% Average Yield to Maturity 1.16% Average Effective Duration 2.91 years SEC Yield 1.22%
Money As of 3/31/2015 The purpose of the Money is to provide liquidity for participating charitable funds and organizations in funding grant making and payment of fees and administrative costs while providing desired principal stability. The long term investment objective of the Money is to seek a competitive market return to preserve and grow the portfolio, provide cash flows to meet charitable needs now and those in the future. The performance objective of the Money is to meet or exceed the performance of the 90-Day Treasury Bill, a truly liquid money market benchmark. As such, the Money is highly liquid, which enables donors to access funds for grants in a timely manner. The Money invests primarily in bank deposits and high-quality institutional money market funds. The money market fund's holdings include U.S. dollar denominated money market securities of domestic and foreign issuers rated in the highest category by at least two nationally recognized rating services, U.S. Government securities, and repurchase agreements. Money Time Period Money 90 Day Treasury Bills 3 Months % % 1 0.02% 0.02% 0.01% 0.06% 0.0 0.07% 1.58% 1.44% Performance periods greater than 12 months are annualized. Performance is net of investment management fees but not the Foundation's administrative fees. Estimated Current Yield: 0.02%
Investment Commentary March 31, 2015 On March 31, 2015 the Investment Committee adjusted the weightings within the Equity. The Committee, in consultation with its advisor continues to designate 2 as an appropriate weighting for international equities in the Equity. Within that weighting for international stocks, the allocation to developed markets was increased to 2 from 1 of the Equity while the allocation to emerging markets was reduced from 1 to of the Equity. This change is designed to bring the weightings of the developed and emerging markets into line with their weightings relative to one another in the MSCI All Country World Index. The surprise factors of 2014 continued their run into the first quarter of 2015 as U.S. Treasury yields and the price of oil declined during the quarter while the trade weighted value of the dollar increased against other major currencies as depicted in the chart below. The one trend that did reverse was the bond market s expectations for inflation over the next five years. The bond market s estimate of inflation (as measured by the Consumer Price Index) over the next five years accelerated from 1.27% in December 31 st to 1.51% on March 31 st even as the price of oil continued to fall and economic data pointed to weakness in the first quarter. This change in inflation expectations, should it continue, could be the catalyst that enables the Federal Reserve to increase short term interest rates sometime this year and begin the process of normalizing monetary policy in the United States. In the first quarter the Equity had a total return of %. Unlike last year, the Equity was led by the overseas developed markets as the FTSE Developed s ex North America stock index rebounded 5.03%. Small company stocks also outperformed their larger brethren as the CRSP Small Cap Index gained 4.79% compared with a return of.9 for the S&P 500. The Intermediate-Term Fixed Income gained % during the quarter as bond yields continued their decline. Investors view the ten year U.S. Treasury note as a benchmark for the overall bond market. The ten year Treasury note s yield-to-maturity declined from 2.17% at the end of the year to 1.94% at the end of the first quarter. It should be noted that the yield of 1.94% on March 31 st was a rebound from 1.68% at the end of January. The advent of quantitative easing (sovereign bond purchases) by the European Central Bank has been an intervening variable in the U.S. bond market as it has driven yields on European sovereign bonds to very low levels. Yields on ten year bonds are below 0.1 in Germany while Italy and Spain are below 1.5. Switzerland has even issued ten year bonds with negative yields. The Short-Term Fixed Income gained 1.0 during the quarter. The bonds held by the funds in this benefited from the lower yields referenced above, but on a much smaller scale due to the shorter average maturity of the. The primary issue facing the capital markets is the timing of the Federal Reserve s plans to increase short-term interest rates. The corollary issue is the impact that decision will have on the economy as well as the capital markets around the world. Stated another way, can the Federal Reserve begin normalizing U.S. monetary policy while other central banks are still fully engaged in quantitative easing? As investors sail into uncharted waters the Community Foundation s Investment s remain broadly diversified to deliver market-based investment performance in a low-cost and thoughtful manner.