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 [PDF]

September Market Review [PDF]

POOL  Q2 2018
  Primary Managed Pool 1.3  1.4  9.5  7.6  8.4  7.2  6.6  $131M
Managed Pool Benchmark* 0.0  0.8  8.6  6.3  7.4  6.5  5.5 N/A
  Traditional 65% Equities /
  35% Bond Index
-0.5 -0.7 7.4 6.3 6.7 5.7 4.9 N/A
  Socially Responsible Pool 2.1  1.1  7.9  6.8  8.5  9.5  N/A  $8.5M
  Income Pool -0.3  -1.1  0.4  2.3  2.1  2.5  4.3  $0.54M
  Minimum Risk Pool 0.4  0.4  1.0  0.4  0.2  0.2  0.2  $3.2M

Primary Managed Pool Performance as of June 30, 2018

Based on reported performance to date, Berkshire Taconic Community Foundation’s managed pool portfolio posted a 1.3% return for the second quarter in 2018, bringing it to 1.4% year-to-date, and comparing favorably to the policy benchmark (0.0% and 0.8%, respectively) over the same periods. For the trailing 12 months, the foundation advanced 9.5%, also ahead of the policy benchmark (8.6%).

Long‐term risk‐adjusted results remain favorable with the portfolio leading the benchmarks over the three‐, five‐, seven‐ and 10‐year periods. Since inception (August 1999), the portfolio’s 6.8% annualized return has outperformed the global blended benchmark (65% MSCI AC World Index/35% Barclays Global Aggregate Index), which returned 4.9% 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 9.4% versus 11.8% for the global blended benchmark.

Over the latest quarter, U.S. equities recovered from a weak first quarter helped by notable domestic growth and relative full employment. In comparison, weakness in international developed equity markets persisted as the segment struggled amid escalating trade tariffs, rising energy prices, increased Fed rate hike expectations and concerns over slowing in global growth.

Against the backdrop of geopolitical tensions and a stronger dollar, emerging markets came under notable pressure and posted negative returns, with the MSCI EM Index declining 7.96% in the second quarter.

In the fixed income market, U.S. Treasury yields were higher over the past three months. Two- and five-year Treasury yields rose approximately 20-25 basis points, led by increasing expectations of Fed rate hikes. The Fed’s course for monetary policy shifted toward a slightly faster pace as reflected in their June economic projections, which showed a fourth rate hike to be expected in 2018. The yield curve continued its flattening trend as the longer end of the Treasury curve remained relatively anchored by the market’s growth-related concerns, while shorter maturities were pulled higher with Fed rate hikes. While inflation picked up slightly, core inflation remained close to the Fed’s long-run 2% target. The 10-year Treasury yield ended the quarter at 2.85% from 2.74% at the end of March, and the 30-year Treasury yield held steady, just below 3%.

Despite ongoing uncertainties in the global outlook, the foundation’s portfolio fared well over the latest quarter, helped by the allocation to U.S. equities (approximately 35% of assets), which gained 3.7%. In comparison, the portfolio’s exposure to international developed market equities (approximately 21% of assets) declined 1.8% in the second quarter. The allocation to long/short and absolute return managers in its flexible capital managers (almost 25% of assets) contributed positively to quarterly returns, gaining 1.5%. The return from fixed income (approximately 8% of assets), however, posted a modest loss of -0.3% for the last three-month period, as rising interest rates continued 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. Nonetheless, a methodical review of managers by asset class is ongoing.

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 June 30 were just above $131.3 million, with a distribution of 58.9% global public equity, 8.1% global private equity, 24.4% flexible capital, 8.2% global fixed income and 0.5% 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 by phone 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