April 2012 Investment Report


  • U.S. equities represented by the Russell 3000 Index decreased 0.7% during April. After four consecutive months of gains, equity markets declined sharply during the first half of April before rebounding to nearly breakeven for the month. Investors received mixed news during April, including continued low interest rate expectations from the U.S. Federal Reserve Bank (the Fed), better than expected retail sales, and slower than expected growth in U.S. gross domestic product (GDP).
  • Developed international equities as measured by the bellwether MSCI EAFE Index decreased 2.0% in U.S. dollar terms. European sovereign debt concerns persisted as Spain’s credit rating was downgraded, euro-area unemployment reached new highs, and austerity measures continued to affect the economy. Equities of developing countries also fell as the MSCI Emerging Markets IMI Index declined 1.3% during the month.
  • The interest rate yield curve flattened in April. Short-term rates (less than three years) changed fractionally. The yield on the 10-year U.S. Treasury note declined by 0.30% (30 basis points) to end the month at 1.91%. The long bond (30-year U.S. Treasury) declined 22 basis points in yield to 3.11%. Short-term rates remain anchored at low levels by the Federal Reserve’s policy of maintaining low interest rates to help sustain the economic recovery. Longer-term rates declined as concerns about the health of the global economy sent investors to the safety of U.S. Treasury securities.
  • Declining yields across most of the yield curve had a positive impact on fixed income returns. Investment-grade debt as represented by the Barclays U.S. Credit Index increased 1.3%. Below-investment-grade debt as measured by the Barclays U.S. High Yield Index increased 1.1% in April, underperforming the investment-grade index by 0.2%.
  • The U.S. dollar declined modestly in April. The Dollar Index, which compares the U.S. dollar to six other major currencies, was down 0.3%. Within that index, the euro recorded a decline of 0.8% versus the dollar, and the Japanese yen climbed 3.8% for the month. In emerging market currencies, the Brazilian real declined 4.3% against the U.S. dollar as Brazil’s central bank continued its foreign exchange intervention.
  • Commodities as represented by the Dow Jones UBS Commodity Index declined 0.4% for the month. Soft commodities (coffee, cotton and sugar) were down 7.1%. Grain was the strongest contributor to the index again, rising 2.4% for the month.

Economics Highlights

  • The Fed announced economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” The statement created some confusion after the Fed revealed that many of the individual governing members believe rates should increase in varying degrees by the end of 2014.
  • European sovereign debt concerns continued after Spain lost its A credit rating from Standard & Poor’s. Citing a worsening budget deficit, worries over the banking system and poor economic conditions, Standard & Poor’s downgraded Spain by two notches from A to BBB+. Standard & Poor’s also cut credit ratings for 11 Spanish banks, citing potentially negative implications from the downgrade.
  • Euro-zone unemployment reached a 15-year high of 10.9%, contributing to continued economic challenges. The unemployment rate exceeds 20% in Greece and Spain.
  • China’s manufacturing continued to expand in April as the official purchasing managers’ index rose to 53.3, its highest level in 13 months.

Geopolitical Headlines

  • Incumbent French president Nicolas Sarkozy and socialist party candidate François Hollande emerged as second round participants in the French presidential election. Neither candidate received a majority in April’s first round; therefore a second round run-off election has been scheduled for May.
  • Mitt Romney became the presumptive Republican U.S. Presidential nominee after his closest competitor, Rick Santorum, suspended his campaign in April.

Sources: Bloomberg News, the Economist, the Wall Street Journal, CNBC, CNN and Bridgewater

Key Monthly Economic Statistics

This table contains a list of key monthly economic statistics. Each statistic is listed with a link to a Web page that provides a thorough description of the economic indicator.

  Positive Statistics
  Neutral Statistics
  Negative Statistics

Source: briefing.com–economic statistics; Econoday–description of the economic indicators

Investment Fund Review (Net of Fees Performance)

For returns of one year, three years, five years, 10 years and Since Inception periods, please visit our Historical Funds Performance page.

Inflation Protection Fund

Fund April Year-to-Date
Inflation Protection Fund +1.2% +3.0%
Barclays Capital U.S. Government Inflation-Linked Bond Index +2.1% +2.9%
Difference -0.9% +0.1%
  • The Inflation Protection Fund gained 1.2% but underperformed the fund benchmark’s return. All three of the fund’s diversifying strategies detracted from relative performance, with the fund’s 10% allocations to commodities declining 0.8% for the month.
  • For the year to date, the fund has gained 3.0% and is very modestly outperforming its benchmark. The fund’s 10% allocation to inflation-linked bonds from developing countries gained 9% and contributed positively to performance, whereas the fund’s allocation to inflation-linked bonds from developed countries gained only 1.8% and detracted from benchmark-relative performance.

Fixed Income Fund

Fund April Year-to-Date
Fixed Income Fund +1.4% +3.8%
Barclays Capital U.S. Universal (ex MBS) Index +1.2% +2.2%
Difference +0.2% +1.6%
  • The Fixed Income Fund advanced 1.4% in April and outperformed its performance benchmark. The fund’s 15% allocation to positive social purpose loans primarily contributed to the fund’s excess performance during the month. Generally, these loans have a longer maturity term, and they benefitted from a decline in long-term interest rates.
  • For the year to date, the fund has gained 3.8% and its performance substantially exceeds the return of the fund benchmark. The fund’s allocation to bonds from developing countries has gained nearly 7.2%, its credit-sensitive strategies have gained over 5%, and its global bond allocation has gained 4% because of U.S. dollar weakness. In addition, the fund’s largest manager, PIMCO, continues to produce excellent benchmark-relative performance and exceeds its benchmark by 1.9%.

U.S. Equity Fund

Fund April Year-to-Date
U.S. Equity Fund -0.7% +11.2%
Russell 3000 -0.7% +12.1%
Difference +0.0% -0.9%
  • The U.S. Equity Fund declined 0.7% in April and matched the return of its performance benchmark. Returns benefitted from the fund’s allocation to publicly traded real estate investment trusts (REITs), which gained 3.2%. This was offset by the fund’s greater-than-benchmark allocation to stocks of small and mid-sized companies, as the Russell 2000 Index declined 1.5% compared with the -0.6% return of the large-company S&P 500 Index.
  • For the year to date, the U.S. Equity Fund has gained 11.2% though it has underperformed the fund benchmark by 0.9%. Though the fund’s investment managers have collectively outperformed their respective benchmarks, the primary contributor to the fund’s underperformance is the fund’s 10% allocation to the alternative investments of private equity and private real estate. These strategies have recorded fractional gains so far in 2012, compared with the 12% return of the fund benchmark.

International Equity Fund

Fund April Year-to-Date
International Equity Fund -0.3% +12.5%
MSCI ACWI ex US -1.5% +9.9%
Difference +1.2% +2.6%
  • The International Equity Fund declined 0.3% in April, but meaningfully outperformed its benchmark by 1.2%. April’s excess performance is primarily attributable to the fund’s largest investment manager significantly outperforming its benchmark because of its less-than-benchmark exposure to the European Monetary Union (EMU) countries. An index of stocks from the EMU countries declined 5.4% in April. In addition, most of the fund’s other managers produced better-than-benchmark performance.
  • For the year to date, the fund has returned 12.5% and substantially exceeds the return of the fund’s performance benchmark. The fund’s diversifying strategies of small company international stocks, public international real estate investment trusts (REITs), and its allocations to stocks from developing markets have all positively contributed to positive benchmark-relative performance. In addition, six of the fund’s eight investment managers have outperformed their respective performance benchmarks.

Multiple Asset Fund

Fund April Year-to-Date
Multiple Asset Fund +0.0% +8.8%
Composite Benchmark -0.1% +8.3%
Difference +0.1% +0.5%
  • For April, the Multiple Asset Fund was flat and modestly outperformed its benchmark return by 0.1%. The Fixed Income Fund and the International Equity Fund contributed positively to benchmark-relative performance, whereas the Inflation Protection Fund contributed negatively to performance.
  • For the year to date, the fund has gained 8.8% and outperformed the 8.3% return by the fund’s benchmark. Through April, the Fixed Income Fund and the International Equity Fund have contributed positively to benchmark-relative performance, whereas the U.S. Equity Fund’s below-benchmark performance has detracted from the Multiple Asset Fund’s performance this year.

Balanced Social Values Plus Fund

Fund April Year-to-Date
Balanced Social Values Plus Fund +0.0% +7.0%
Composite Benchmark -0.2% +6.8%
Difference +0.2% +0.2%


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