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Investment performance


The Hartford Foundation’s assets are managed by its corporate affiliate, HFPG, Inc. (the “Corporate Portfolio”) and by the Trustee Banks (the “Trust Portfolio”).

The investment returns, net of investment management fees, for the Foundation’s broadly-diversified endowment portfolios for periods ended December 31, 2017 follows. Average annual returns are shown for periods longer than one year.* The market values of the portfolios shown below represent unaudited figures.

Portfolio-graph-2017-cropped.jpg

Corporate Portfolio (HFPG, Inc.):   $425MM
Trust Portfolio (Trustee Bank):   $595MM

How have the Hartford Foundation's investments performed?

In spite of investor concerns that the new administration in Washington, Brexit negotiations between the UK and the European Union, and military concerns related to North Korea could lead to volatility in global equity and fixed income markets, 2017 proved to be a year marked by strong equity returns and lower, but positive returns for fixed income. Corporate profits were very strong, as companies have been the beneficiaries of historically low interest rates, stable labor costs and, in the case of the US, a falling dollar. In general, growth-oriented equities, both here and abroad outperformed their value counterparts. This represented a reversal of the patterns witnessed during 2016.

In 2017, the S&P 500 index rose 21.8%. The FTSE Russell 1000 Value index rose 13.7% while the FTSE Russell 1000 Growth index rose 30.2%, aided by performance of the largest technology stocks. The Russell Mid Cap index rose 18.5%, while the FTSE Russell 2000 (smaller capitalization) index advanced 14.65%. Overseas, the MSCI EAFE Index rose 25% while the MSCI Emerging Market index rose 37.3%. In the currency markets, the US dollar weakened against many currencies, a reversal from the direction of the prior three years. In particular, a number of currencies in Europe were relatively strong, including the Euro which strengthened 13.8% against the US dollar. The Bloomberg Barclays US Aggregate Bond Index, a broad measure of the US bond market, gained 3.5% for the year. The Citigroup World Government Bond index, a proxy for the global bond market, rose 7.5%, as foreign currency exposure aided returns relative to those in the US fixed income indices. Yields on money market funds, while still very low, rose significantly. Volatility was remarkably muted.

Against this backdrop, the Foundation's broadly-diversified Corporate portfolio posted an investment return of 17.2%, while the Trust portfolio returned 17.9%. The portfolios' inflation-adjusted spending policy benchmark, CPI + 5%, measured 7.4% in 2017, a level which was slightly lower than the average over the past 20 years. Since its inception in September of 1996, the Corporate portfolio has returned an average 7.8% per year, net of investment management fees. Over the same time period, the average net return for the Trust portfolio was 7.4% per year. The future direction of equity markets continues to be the significant determinant of progress toward this goal.

*When reviewing these returns, please note that past performance is not a guarantee of future results.

 

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