April 2010 Investment Report


  • U.S. equity markets, represented by the Russell 3000 Index, advanced 2.2% in April, marking the third straight month of positive performance. The advance in the market was driven by positive first-quarter corporate earnings reports and served as further evidence that the global economic recovery remains on track with minimal inflationary pressures.
  • Small-company U.S. stocks again performed well, gaining 5.7% and outperforming large-company U.S. stocks, which gained 1.9%. Similar to last month, stocks classified as “value” stocks outperformed stocks with strong earnings growth.
  • International developed markets, as represented by the MSCI EAFE Index, retreated 1.8%, as credit concerns in the euro-zone countries negatively affected returns. On the strength of the global economic recovery, stocks of developing countries posted their second consecutive monthly gain (1.4%), as measured by the MSCI Emerging Markets Index.
  • U.S. credit markets advanced during April. High-quality “investment-grade” bonds, as measured by the Barclays U.S. Credit Index, returned 1.7% as both interest rates and credit spreads moved lower during the month.
  • The yield on the 10-year U.S. Treasury note ended the month at 3.7%, decreasing modestly from 3.8% at the start of the month. The uncertainty surrounding the Greek debt crisis prompted investors to seek safety in U.S. Treasury securities. In addition, the Federal Reserve Bank (Fed) reiterated its commitment to keep interest rates low for an extended period.

Economics Highlights

  • Gross Domestic Product (GDP), the principal measure of national economic activity, expanded at a 3.2% annualized rate in the first quarter, driven principally by a rebound in personal consumption expenditures. This marked the third straight quarter of positive GDP growth since economic output bottomed in 2009.
  • Employers added 290,000 jobs in April, the most in four years. The unemployment rate rose from 9.7% to 9.9% in the month. However, in combination with other data, this implied that more people began job searches to take advantage of recent improving trends in the economy.
  • The housing market continued to struggle, even though new home sales for April grew 27%, an increase likely the result of an expiring homebuyer tax credit program. While home prices continue to improve, they remain about 30% below peak levels reached in 2006. In addition, nearly one-third of homeowners with mortgages owe more on their homes than their homes are worth, suggesting that the pipeline for foreclosure activity may grow.

Geopolitical Headlines

  • Concerns about the ability of certain euro-zone countries to repay their national debt increased throughout the month. Events culminated with the downgrade of Greek sovereign debt and the announcement of a $147 billion loan rescue program from the more fiscally sound euro-zone countries and the International Monetary Fund (IMF). Due to the turmoil in Europe, the U.S. dollar strengthened to a high of $1.32 per euro. With health care reform passed, the Obama administration collaborated with congressional leaders to create legislation to augment regulation of the financial services industry. The stated goal is to eliminate the possibility of a future collapse of the financial system.
  • Regulators filed civil suits against Wall Street investment bank Goldman Sachs for questionable practices related to the sale of high-risk mortgage securities. In addition, the Justice Department announced a criminal investigation. The U.S. Senate conducted broadly publicized hearings of senior Goldman Sachs executives.
  • The eruption of an volcano in Iceland disrupted air travel in Europe for a full week, stranding thousands of travelers and causing a significant loss in economic activity.
  • A Gulf Coast drilling rig explosion and the inability to shut off the flow of oil threatens the Gulf of Mexico coastline with the worst environmental disaster in decades. This has placed on hold the Obama administration’s recent advocacy of offshore drilling. The accident may also lead to additional regulation for the petroleum exploration industry.

Investment Fund Review

Inflation Protection Fund

Fund April Year-to-Date
Inflation Protection Fund +2.1% +3.1%
Barclays Capital U.S. Government Inflation-Linked Bond Index +2.4% +3.0%
Difference -0.3% +0.1%
  • The Inflation Protection Fund returned 2.1% for the month of April. Although all strategies produced gains for the month, the fund underperformed its benchmark by a margin of 0.3%. The fund’s investment in commodities performed best, with an absolute return of 3.7%. However, the strengthening dollar adversely affected the performance of the fund’s global bond portfolio’s holdings of non-dollar-denominated international bonds, resulting in below-benchmark performance for the month.
  • For the year, the fund has slightly outperformed its benchmark, principally due to its allocation to developing-market inflation-linked bonds and commodities. All strategies contributed positively to the fund’s return.

Domestic Bond Fund

Fund April Year-to-Date
Domestic Bond Fund +1.6% +4.4%
Barclays Capital U.S. Universal (ex MBS) Index +1.3% +3.6%
Difference +0.3% +0.8%
  • The Domestic Bond Fund returned 1.6% for the month of April and outperformed its benchmark by a margin of 0.3%. The positive social purpose lending and credit opportunity strategies generated the highest absolute returns. All fund strategies contributed positively to the monthly return.
  • For the year, the fund has returned 4.4%, outperforming its benchmark by a margin of 0.8%. The credit opportunities, developing-market and positive social purpose lending strategies generated the highest absolute returns. The fund’s global bond strategy has produced a negative return and detracted from performance due to the strength of the dollar.

Domestic Stock Fund

Fund April Year-to-Date
Domestic Stock Fund +1.9% +7.4%
Russell 3000 +2.2% +8.2%
Difference -0.3% -0.8%
  • The Domestic Stock Fund returned 1.9% for the month of April. Although the fund benefited from its higher-than-benchmark allocation to stocks from small and mid-sized companies, the fund’s managers underperformed their respective benchmarks. In addition, the fund’s exposure to private real estate investments also detracted from performance. As a result, the fund underperformed its benchmark for the month. Fundamentals in private real estate remain very difficult, resulting in underperformance of the asset class relative to the broader public equity markets and to public real estate securities. However, recent anecdotal evidence is signaling improving conditions for commercial real estate.
  • For the year, the fund also lagged its benchmark due to negative contributions from the fund’s private real estate, private equity and active large-cap growth portfolios. The public real estate securities portfolio remains the best-performing portfolio overall for the year and has recovered a significant amount of value lost during the 2008 market downturn.

International Stock Fund

Fund April Year-to-Date
International Stock Fund +0.6% +3.6%
MSCI ACWI x US -0.5% +1.5%
Difference +1.1% +2.1%
  • The International Stock Fund returned 0.6% for the month of April. Outperformance in the month by a margin of 1.1% was attributable to the better-than-benchmark performance by a majority of the actively managed portfolios in the fund. Developing-country markets and international small-cap stocks were the best-performing portfolios overall in the month.
  • For the year, the fund outperformed its benchmark by a margin of 2.1% because of strong performance from certain active managers of developed- and developing-country stock portfolios. The fund’s investment in developed-country small-company stocks has been the best-performing portfolio overall year-to-date.

Multiple Asset Fund

Fund April Year-to-Date
Multiple Asset Fund +1.6% +5.5%
Composite Benchmark +1.4% +5.3%
Difference +0.2% +0.2%
  • For the month, the Multiple Asset Fund outperformed its composite benchmark slightly because of the relative outperformance of the International Stock Fund and Domestic Bond Fund. However, the fund’s performance was offset by the lower-than-benchmark performance of the Domestic Stock Fund and Inflation Protection Fund.
  • For the year, the fund outperformed its benchmark, principally due to the better-than-benchmark performance of the International Stock Fund, Inflation Protection Fund and Domestic Bond Fund. However, the fund’s performance was partially offset by the lower-than-benchmark performance of the Domestic Stock Fund.

Balanced Social Values Plus Fund

Fund April Year-to-Date
Balanced Social Values Plus Fund +1.1% +5.1%
Composite Benchmark +1.1% +4.7%
Difference +0.0% +0.4%


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