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, 2016 follows. Average annual returns are shown for periods longer than one year.* The market values of the portfolios shown below represent unaudited figures:
Corporate Portfolio (HFPG, Inc.)
Trust Portfolio (Trustee Bank)
How have the Hartford Foundation's investments performed?
2016 was dominated by political shocks which resulted in short-term volatility in the global financial markets followed, often quickly, by a return to stability. From January through June, falling government bond yields and concerns about low growth and inflation impacted securities prices. During the second half of the year, bond yields rose amid rising oil prices, looser fiscal policy in many countries, and the outcome of the US election. The U.S. equity market averages finished strongly in spite of the volatility. In general, value equities outperformed their growth counterparts and smaller-capitalization stocks outperformed larger ones. This represented a reversal of the patterns witnessed during 2015. In 2016, the S&P 500 index rose 11.96%. Overseas, the MSCI EAFE Index rose 1% while the MSCI Emerging Market index rose 11.2%. The Barclays Capital Aggregate Bond Index, a broad measure of the US bond market, gained 2.6% for the year. Against this backdrop, the Foundation’s broadly-diversified Corporate portfolio posted an investment return of 7.3%, while the Trust portfolio returned 6.3%.
The Hartford Foundation aims to achieve investment returns that preserve the long-term purchasing power of the endowment after grants and administrative expenses have been paid. We measure portfolio progress toward this goal by comparing it to the Consumer Price Index plus 5% (CPI+5%). Since September 1996, when systematic measurement of the Foundation’s investment returns commenced, through December 2016, the Corporate Portfolio has returned 7.4% per year, net of investment management fees. The Trust Portfolio produced a net return of 6.9% annualized over that period. Over the same timeframe, the CPI+5% measured 7.6% per year, while the S&P 500 index and the Barclays Capital Aggregate Bond Index produced average annual returns of 8.0% and 5.4%, respectively.
*When reviewing these returns, please note that past performance is not a guarantee of future results.