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]

Based on preliminary performance, Berkshire Taconic Community Foundation’s portfolio appreciated 5.1% in the first quarter of 2017, outperforming the policy benchmark* by 70 bps.  Comparisons to the benchmark* are favorable over all standard trailing time periods ended March 31, 2017, indicating both favorable asset allocation and solid manager performance. Over the latest 1-year period, the portfolio returned 12.6%, soundly outperforming the custom benchmark*, which returned 10.2%. Since inception in August 1999, the portfolio has generated an annualized return of 6.6%, outperforming a global blend of assets (65% MSCI AC World Index/35% Barclays Global Aggregate Index) by approximately 200 bps per year with substantially less volatility. In addition, for the calendar year 2016, the portfolio’s performance remained in the top quartile among its peer community foundations.

With global growth broadly improving, U.S. and international equity markets had a strong start to 2017. In the U.S., the Fed is positioning for additional rate hikes if the economy continues its progress toward full employment and 2% inflation. However, the U.S. dollar’s appreciation paused in the first quarter as fiscal policy progress fell short of expectations. Internationally, political risks persisted with the upcoming French election and ongoing Brexit negotiations. Despite uncertainty, markets were broadly prepared for a gradual pace of Fed rate hikes while other major central banks maintained accommodative monetary policies. Against this backdrop, global developed bond yields have been broadly well-anchored and market implied volatility remains low.    

Over the past quarter, the Foundation’s portfolio benefited from its global equity exposure, approximately 65% of total assets. Non-U.S. developed equities led the performance, representing almost 21% of the portfolio and posting strong quarterly returns (8.3%), outperforming the MSCI EAFE Index (7.2%). Domestic equities, approximately 37% of portfolio assets, advanced by 6.2% versus the Russell 3000 Index return of 5.7%. In emerging market equities, broad market returns were also strong, boosted by improving macroeconomic fundamentals. The portfolio’s more defensive exposure in emerging markets gained 7.9% but fell short of its MSCI EM Index return of 11.4%. Private equity returns were a more modest 3.1%. 

In aggregate, the portfolio’s hedge fund managers gained 3.3% in the quarter, exceeding the HFRI Fund of Funds Composite Index by approximately 100 bps. Long-term results generated in this segment reflect favorable excess returns over most periods, including 3-, 5-, 7- and 10-years, with the annualized return since inception 8.8%, well ahead of the Composite Index (3.3%). Hedge funds reported a wide range of results, with equity hedge funds generating positive performance relative to macro funds. The latter were generally weak as volatility trended lower, while many long/short equity funds benefited from exposures in growth-oriented sectors, including technology and health care. Absolute return strategies also broadly reported positive returns, but the gains were moderate compared to the second half of 2016. 

U.S. Treasury yields moved in a narrow range over the first quarter as bond investors were generally anticipating the 25 bps rate hike by the Fed in March. However, despite new concerns over the Fed’s eventual balance sheet reduction, market implied volatility remained low and the 10-year Treasury yield declined 4 bps to 2.39% at quarter end. Weaker oil prices helped to calm inflationary fears and inflation expectations were little changed with the 10-year breakeven ending the quarter at 1.96%. The portfolio’s position in the Vanguard Inflation-Protected Securities Fund returned 1.4% for the quarter, which was largely in line with nominal Treasuries (Bloomberg Barclays Long-term Treasury Index, +1.4%). Within fixed income, the portfolio’s sole credit manager, Dodge & Cox, performed well, benefiting from corporate bonds outperforming Treasuries amid strong demand from investors. Dodge & Cox led the Barclays Aggregate Index with a quarterly return of 1.2% versus 0.8%, respectively.
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 managed pool assets exceeded $123.0 million at March 31, 2017, with a distribution of 59.1% global public equity, 6.6% global private equity, 25.3% flexible capital, 1.1% inflation hedging, 7.0% global fixed income and 0.9% 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 assert 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