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 June 30, 2018 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.):||$412MM|
|Trust Portfolio (Trustee Bank):||$580MM|
How have the Hartford Foundation's investments performed?
While the broad equity indices in the US moved higher during the first half of 2018, the challenges of rate increases by the Federal Reserve, full employment, trade tensions and tariff threats have introduced volatility into equity market prices. Global growth, which had been well synchronized last year, is showing signs of de-coupling. Europe appears to be slowing. Emerging markets have been challenged by rising US interest rates and a strong US dollar. Concerns about the level of debt in China persist. In general, growth-oriented equities, both here and abroad outperformed their value counterparts.
Over the past twelve months through the end of June, the S&P 500 index rose 14.4%. The FTSE Russell 1000 Value index rose 6.8% while the FTSE Russell 1000 Growth index rose 22.5%, 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 17.57%. Overseas, the MSCI EAFE Index rose 6.8% while the MSCI Emerging Market index rose 8.2%. In the currency markets, the US dollar strengthened against many currencies. The Bloomberg Barclays US Aggregate Bond Index, a broad measure of the US bond market, declined .4%. The Citigroup World Government Bond index, a proxy for the global bond market, declined .9%. Yields on money market funds, while still low, rose significantly.
Against this backdrop, the Foundation's broadly-diversified Corporate portfolio posted a one-year investment return of 6.1%, while the Trust portfolio returned 7.1%. Since its inception in September of 1996, the Corporate portfolio has returned an average 7.6% per year, net of investment management fees. Over the same time period, the average net return for the Trust portfolio was 7.2% per year. The portfolios' inflation-adjusted spending policy benchmark, CPI + 5%, measured an average annual increase of 7.5% over the same time period. 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.