Our Investments


Berkshire Taconic Community Foundation preserves and protects your investments and charitable intentions forever. When you establish an endowment through BTCF, your gift continues to grow and benefit your community now and in the future. The pooled resources of BTCF’s many donors gives you access to a highly diversified portfolio with world-class money managers who would not otherwise be available to you.

As stewards of the charitable resources entrusted to us, BTCF works to manage your investments guided by our nationally recognized Investment Committee – A group of board and community members with deep institutional investment experience. The Committee employs the top Investment Managers in each class.

Investment Strategy

BTCF’s investment strategy [PDF, 153KB] is to maximize return while preserving capital and liquidity, producing consistent and stable growth with low to moderate risk. Our goal is to grow your endowment so that you can grant more to the causes you care about.

Investment Pools & Performance

Current Market Review [PDF, 845KB]

POOL 
 
YTD
2017 
 
1-YR 
RETURN  
3-YR
RETURN  
5-YR
RETURN 
7-YR
RETURN  
10-YR
RETURN  
 SINCE 
INCEPTION
  Primary Managed Pool  8.5  14.5  5.6  8.7  8.7  5.3  6.7
  Managed Pool Benchmark*  7.4  12.2  4.2  7.9  8.2  4.0  5.3
  Socially Responsible Pool  5.5  11.1  6.2  10.6  10.6  N/A  12.2
  Income Pool  2.6  2.6  2.0  2.2  3.2  4.3  4.4
  Minimum Risk Pool  0.2  0.2  0.1  0.1  0.0  0.5  1.0
 
Based on preliminary performance, Berkshire Taconic Community Foundation’s primary managed portfolio appreciated 3.2% in the second quarter of 2017, bringing year-to-date performance to 8.5% and outperforming the policy benchmark* by 110 basis points. Long-term, risk-adjusted results remain favorable, leading the benchmark over all standard trailing time periods ended June 30, 2017, which indicates complimentary asset allocation and solid manager performance. Over the latest 1-year period, the portfolio returned 14.5%, soundly outperforming the custom benchmark, which returned 12.2%. Since inception in August 1999, the portfolio has generated an annualized return of 6.7%, outperforming a global blend of assets (65% MSCI AC World Index/35% Barclays Global Aggregate Index) by approximately 190 bps per year with substantially less volatility. In addition, the portfolio’s performance remained in the top quartile among its peer community foundations.

 
Equity markets broadly performed well, posting moderate gains, particularly compared to the strong appreciation seen in the first quarter. Non-U.S. equities led the domestic market over the latest quarter as international stocks benefited from a weaker dollar, as well as a pick-up in growth. In the U.S., despite subdued inflation data, the Federal Reserve stayed on course and raised rates by 25 bps at its June meeting, a move widely anticipated by the market. Policymakers also announced a plan to reduce balance sheet assets, which, so far, has been met with relatively muted reaction given a very gradual pace in the reduction of purchases. Dollar weakness picked up in the second quarter as U.S. political gridlock has hampered the prospect of health care and tax reform, as well as progress on infrastructure spending and regulatory rollback. In comparison, international politics have played out more favorably, with diminishing political risks in Europe, particularly following the French election of Macron, a more positive, pro-Euro outcome. Despite ongoing Brexit uncertainty, and concerns with Italian banks, European growth improved and has provided the European Central Bank with some flexibility to prepare markets for eventual moderation in asset purchases. Against this mixed global backdrop, bond yields in the major developed markets remained relatively range-bound and low volatility persists.

Over the second quarter, the foundation’s portfolio benefited from its global equity exposure, just over 65% of total assets. Non-U.S. developed equities led the performance, representing almost 21% of the portfolio and posting strong quarterly returns. Domestic equities, almost 37% of portfolio assets, advanced by 3.1% versus the Russell 3000 Index return of 3.0%. In emerging market equities, broad market returns were also strong, boosted by improving macroeconomic fundamentals. The portfolio’s exposure in emerging markets, approximately 2% of assets, gained 4.7% but fell short of its benchmark return of 6.3%. Private equity returns picked up in the second quarter, posting a solid 5.3% return.

In aggregate, the portfolio’s hedge fund managers gained 1.8% in the latest quarter, exceeding the 0.6% return for the HFRI Fund of Funds Composite Index. Long-term results generated in this segment reflect favorable excess returns over most periods, including 3-, 5-, 7- and 10- years, with the annualized since inception return of 8.8%, well ahead of the Composite Index at 3.3%. Amid a persistent low volatility environment, equity long/short hedge funds broadly led positive performance with absolute return managers also faring well.

Finally, real asset returns were weaker, driven by the large decline in energy prices resulting from rising supply concerns. With the coincident decline in inflation data, inflation expectations have fallen. The 10-year breakeven spread (difference in real and nominal yields) has fallen to 1.7% from close to 2.0% at the beginning of the quarter. With little exposure here, the portfolio’s position in the Vanguard Inflation-Protected Securities (TIPS) Fund fell 0.5% for the quarter. Within fixed income, the portfolio’s sole credit manager, Dodge & Cox, performed well, benefiting from narrowing corporate bond spreads versus Treasuries.

The foundation’s portfolio remains highly diversified and has been built for a variety of market conditions in an effort to generate long-term growth in excess of inflation and spending needs. While mindful of the market environment, the investment committee remains committed to the long-term, strategic management of portfolio assets, making modest adjustments to the asset allocation and underlying managers when necessary. The portfolio is highly liquid and well-positioned to take advantage of new opportunities as they are identified. Total assets exceeded $126.6 million at June 30, 2017, with a distribution of 59.6% global public equity, 6.2% global private equity, 25.1% flexible capital, 1.1% inflation hedging, 6.9% global fixed income and 1.2% liquid capital. 

For more information on the foundation’s investment performance and managers, please contact Vice President for Finance and Administration A. J. Pietrantone by email or at 413-229-0370.

*The Managed Pool benchmark is calculated as a weighted average of standard financial industry indices in each asset class and appropriate to individual managers based on objectives.

 

Managed Pool Current Performance [PDF, 138KB]

5.3% 10-year average annual return* / 8.0% 5-year annual return*

Created for the bulk of our funds’ assets and structured on the premise that a bias toward quality equity investments will ensure the best total return over time, although it may be more volatile over the short-term. Average annual investment manager fees total 1%.

*Net of investment manager fees

View a description of the asset mix.


Income Pool Current Performance[PDF, 90.3KB]

4.8% 10-year average annual return* / 7.5% 5-year annual return
*

Appropriate for funds where minimizing risk and not being subject to short-term equity volatility is important. This pool does not take advantage of potential long-term equity growth. The average annual investment management fee is 0.46% and the allocation is 100% fixed income and cash equivalents.

*Net of investment manager fee

Minimum Risk Pool Current Performance [PDF, 96.5KB]

0.8% 10-year average annual return* / 0.0% 5-year annual return* 

Accommodates funds that are generally short term in nature and are focused on investment of capital with minimal risk. The return fluctuates with daily money market rates. The investment management fee is 0.0% for this Pool.

*Net of investment manager fee

SRI Pool Current Performance [PDF, 97KB]

7.6% 7-year average annual return* / 7.5% 5-year annual return*

Created in March 2009 for those individuals or organizations that want fund assets invested with an environmental, social and governance screen, and are willing to forgo annual return potential in certain market segments of the broader economy, that may or may not affect total return. The average annual investment management fee is 0.37% and the allocation is 60% equities and 40% fixed income and cash equivalents.

*Net of investment manager fee

About This Photo
About This Photo
Columbia County, NY. Photo by David Lee

Investment Policies & Forms