Investments - Learn About BTCF - Berkshire Taconic Community Foundation

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

End of Year Market Review 2017 [PDF]

November 2018 Market Review [PDF]

POOL  Q3 2018
 
YTD
2018
 
1-YR 
RETURN  
3-YR
RETURN  
5-YR
RETURN 
7-YR
RETURN  
10-YR
RETURN  
 ASSETS UNDER MGMT
  Primary Managed Pool 3.4  4.9  9.1  10.7  8.0  9.4  8.1  $137M
Managed Pool Benchmark* 2.4  3.1  7.1  9.0  6.8  8.5  6.8 N/A
  Traditional 65% Equities /
  35% Bond Index
2.4 1.7  5.8 9.4 5.9 7.9 6.6 N/A
  Socially Responsible Pool 3.3  4.4  8.5  9.6  8.4  7.7  N/A  $8.6M
  Income Pool 0.6  -0.5  -0.1  2.8  2.0  2.7  4.5  $0.52M
  Minimum Risk Pool 0.6  1.0  1.2  0.5  0.3  0.2  0.2  $1.2M
 

Primary Managed Pool Performance as of September 30, 2018

Based on preliminary performance, Berkshire Taconic Community Foundation’s managed pool portfolio advanced 3.4% for the third quarter in 2018, comparing favorably to the 2.4% benchmark. For the trailing 12 months, the foundation returned 9.1%, ahead of the policy index by 200 basis points.

Long‐term risk‐adjusted results also remain favorable with the portfolio leading the benchmarks over the three‐, five‐, seven‐ and 10‐year periods. Since inception (August 1999), the portfolio’s 6.9% annualized return has outperformed the global blended benchmark (65% MSCI AC World Index/35% Barclays Global Aggregate Index), which returned 5% over the same period. The foundation’s portfolio has also experienced lower volatility (as measured by standard deviation) relative to the global blended benchmark. Over the past 10 years, the portfolio’s standard deviation was 9% versus 11.3% for the global blended benchmark.

In the U.S., the economic picture through the third quarter remained solid as U.S. growth accelerated to 4.2% in the second quarter and the Fed hiked interest rates at the September meeting. Domestic stocks were buoyed by strong economic fundamentals as reflected by a solid 7.7% gain in the S&P 500 Index. In comparison, international equities ended the quarter with a more modest gain of 0.7% (MSCI ACWI ex-US) in USD terms.

Brexit uncertainty, trade tensions and rising interest rates were a drag on non-U.S. markets, particularly in EM equities, which declined 1.1% for the quarter (MSCI EM USD). In the fixed income market, U.S. Treasury yields were higher over the past three months with two- to 10-year Treasury yields rising 20 to 30 basis points. On the inflation front, the Fed’s outlook is projecting core inflation to remain close to the long-run 2% target despite tightening labor markets. Against this backdrop, the 10-year U.S. Treasury yield ended the quarter slightly above 3%.

The foundation’s portfolio fared well over the latest quarter, helped by the higher weight in U.S. equities, approximately 37%, which rose 7.4% for the three-month period. In comparison, the portfolio’s exposure to international developed market equities, approximately 19% of assets, gained 1.5% while emerging market exposure, almost 2% of assets, declined 5.7% in the third quarter. The allocation to long/short and absolute return managers, about 24% of assets, contributed positively to quarterly returns, gaining 1.4%. Returns from fixed income remain modest, with the portfolio’s fixed income allocation posting a 0.6% increase for the quarter as rising interest rates continue to pose a challenge for segment returns.

The foundation’s portfolio diversity is designed to succeed in varying market conditions in an effort to generate long‐term growth in excess of inflation and ongoing spending needs. While mindful of the market environment, the investment committee remains committed to the long‐ term, strategic management of portfolio assets, making only modest adjustments to the asset allocation and underlying managers when necessary. Despite early losses in the current fourth quarter, we believe our asset allocation will fare well in in the long-term with almost a third of the portfolio in alternative investments designed to mitigate the effect of volatility and a larger down market.

The portfolio remains highly liquid and well-positioned to take advantage of new opportunities as they are identified. Total assets in the managed pool at Sept. 30 were just above $137.3 million, with a distribution of 58.2% global public equity, 8.3% global private equity, 23.7% flexible capital, 7.9% global fixed income and 1.9% liquid capital.

For more information on the foundation’s investment performance and managers, please contact Interim Chief Financial Officer John Gillespie 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]

6.0% 10-year average annual return* / 8.9% 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.

SRI Pool Current Performance [PDF]

7.7% 7-year average annual return* / 10.0% 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

Income Pool Current Performance [PDF]

4.5% 10-year average annual return* / 1.7% 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]

0.3% 10-year average annual return* / 0.1% 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

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

Investment Policies & Forms