March 2013 Investment Report


  • U.S. equities represented by the Russell 3000 Index increased 3.9% during March. The Dow Jones Industrial Average and the S&P 500 finished the month at all-time highs, eclipsing previous records set in October 2007. The new highs are the latest sign that the U.S. economy is recovering from the global financial crisis. Economists give much of the credit for the recovery to the U.S. Federal Reserve, which worked quickly to provide monetary stimulus to strengthen the financial system during the crisis.
  • Investors favored small company stocks, which gained 4.6% during the month as measured by the Russell 2000 Index. Large company “value” stocks gained 4.0%, while large company “growth” stocks gained 3.8%.
  • Developed country international equities as measured by the MSCI EAFE Index increased 0.8% in March. Investors had less confidence in developing markets, which declined 1.5% as measured by the MSCI Emerging Markets IMI Index.
  • The U.S. Treasury yield curve changed fractionally in March. The 2-year U.S. Treasury Note yield increased by 0.01% to 0.24%, and the 10-year U.S. Treasury Note yield decreased by 0.03% to 1.85%. The long bond (30-year U.S. Treasury) increased 0.02% in yield to 3.10%.
  • U.S. Treasury securities as measured by the Barclays U.S. Treasury Index increased 0.1% in March. Investment-grade debt as represented by the Barclays U.S. Credit Index increased fractionally for the month. Below-investment-grade debt as measured by the Barclays U.S. Corporate High-Yield Index increased 1.0%.
  • The U.S. dollar as measured by the U.S. Dollar Index increased 1.3% during March. The euro and yen both decreased by 1.8% relative to the dollar. The Cyprus banking crisis rattled confidence in Europe, and Japanese monetary policy affected the yen. The Mexican peso increased 3.6% after the Mexican central bank supported economic growth by reducing overnight lending rates 0.5%.
  • Commodities as represented by the Dow Jones UBS Commodity Index increased 0.7% in March. Energy was the strongest sector and increased 6.3%. Industrial metals were the weakest sector, declining 4.5%.

Economics Highlights

  • The Commerce Department raised its reported fourth quarter GDP growth to 0.4% from 0.1%. Consensus among economists is that first quarter 2013 growth will be 2.0%. Recent strength has come from non-residential construction, exports and housing activity. Home prices rose 8.1% in January, the largest such gain in 6-1/2 years.
  • Household wealth increased at the fastest pace in more than 40 years, as both home and equity prices have risen substantially and debt relative to income continues to fall.
  • Cyprus became the latest “flash point” in the euro zone crisis, as the European Union and International Monetary Fund demanded restructuring of local Cypriot banks and unprecedented taxes on depositors to cover the costs of a 10 billion euro bailout. Equity markets were highly volatile during the week in March when bailout negotiations dominated world headlines. Despite this temporary setback, equity prices reached new highs by month-end.
  • The Securities and Exchange Commission (SEC) levied the largest insider-trading penalty ever ($646 million) against the hedge fund firm SAC Capital Advisers. The investigation is ongoing as FBI authorities arrested a high-ranking SAC official at month-end.

Geopolitical Headlines

  • Following the resignation of Pope Benedict XVI last month, the Catholic Church’s College of Cardinals elected a new pope, Cardinal Bergoglio of Argentina, who took the name Francis I. Pope Francis represents the first Jesuit to head the church and the first pope from Latin America, home to 33% of the world’s Catholics.
  • Venezuelan leader Hugo Chavez died in early March. His interim successor, Nicolas Maduro, is expected to continue Chavez’s socialist government policies, pending the outcome of an election in mid-April.
  • Tensions escalated between North and South Korea following U.N. sanctions imposed in response to North Korea’s recent nuclear tests. The U.S. increased its presence in the region, conducting joint military exercises with South Korea.

Sources: Bloomberg News, the Economist, the Wall Street Journal, CNBC, CNN, Associated Press, Reuters and Bridgewater Associates

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

M/M=Month-over-month (% change since last month)
Q/Q = Quarter-over-quarter (% change since last quarter)
Y/Y = Year-over-year (% change since the same month, last year)
SA = Seasonally adjusted
SAAR = Seasonally adjusted annual rate

Source:–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 March Year-to-Date
Inflation Protection Fund +0.56% +0.38%
Barclays Capital U.S. Government Inflation-Linked Bond Index +0.25% -0.49%
Difference +0.31% +0.87%
  • The Inflation Protection Fund advanced 0.56% in March and outperformed the fund benchmark by 0.31%. All of the fund’s four diversifying strategies positively contributed to the fund’s benchmark-relative performance for the month. The fund’s allocation to developed country inflation-linked debt gained 1.1% and contributed the most to the fund’s better-than-benchmark performance.
  • For the quarter and the year to date, the Inflation Protection Fund gained 0.38% and it has outperformed its benchmark by 0.87%. Three of the fund’s four diversifying strategies produced positive results for the quarter compared with the 0.49% loss for the fund benchmark. The best-performing strategies were the fund’s allocation to global inflation-linked bonds and floating rate senior secured loans, which both gained 1.5%. The increase in global bonds is primarily attributable to an 8.4% increase in United Kingdom government inflation-linked bonds. In January, government officials rejected a proposal that would have changed the way the U.K. determined retail price inflation. U.K. inflation-linked bonds declined in 2012 in anticipation that the proposal would be adopted; the U.K. inflation-linked bonds later recouped losses when government officials rejected the proposal.

Fixed Income Fund

Fund March Year-to-Date
Fixed Income Fund +0.25% +0.35%
Barclays Capital U.S. Universal (ex MBS) Index +0.12% +0.12%
Difference +0.13% +0.23%
  • The Fixed Income Fund gained 0.25% in March and outperformed the fund benchmark return by 0.13%. The best-performing strategies for the month were the fund’s two allocations to below-investment-grade debt, which both gained 1.1%. The fund’s allocations to developed international bonds declined as the dollar strengthened during the month compared with most foreign currencies, primarily because of concerns arising from the banking crisis in Cyprus.
  • For the quarter and the year to date, the Fixed Income Fund gained 0.35% and it has outperformed the fund benchmark by 0.23%. The fund’s two allocations to below-investment-grade debt gained about 2.9% and positively contributed to benchmark-relative performance. In addition, the fund’s largest manager, PIMCO, has outperformed its benchmark by 0.6%. The fund’s allocation to global bonds declined 1.8% and detracted from performance, due to strength of the dollar compared with most foreign currencies.

U.S. Equity Fund

Fund March Year-to-Date
U.S. Equity Fund +3.62% +10.66%
Russell 3000 +3.92% +11.07%
Difference -0.30% -0.41%
  • The U.S. Equity Fund gained 3.62% in March and underperformed the fund’s Russell 3000 Index benchmark. The fund’s 10% allocation to the alternative investment strategies of private equity and private real estate gained approximately 0.9% and was responsible for the fund’s underperformance compared with its benchmark.
  • For the quarter and the year to date, the U.S. Equity Fund gained 10.66% and trailed its benchmark return by 0.41%. The fund’s 10% allocation to alternative investments has gained 2.0%, detracting the most from performance. In addition, the fund’s REIT allocation has gained 5.9% and also adversely impacted performance. The fund’s greater-than-benchmark allocation to small and mid-sized companies contributed positively to its performance.

International Equity Fund

Fund March Year-to-Date
International Equity Fund +0.54% +3.90%
MSCI ACWI ex US +0.37% +3.57%
Difference +0.17% +0.33%
  • The International Equity Fund gained 0.54% in March and outperformed its benchmark return by 0.17%. The fund benefited from its lower-than-benchmark allocation to stocks from developing countries, which declined 1.7%. In addition, the fund’s allocation to small international companies gained 1.7% and contributed to its positive benchmark-relative performance. The fund’s allocation to international real estate investment trusts (REITs), however, detracted from performance—declining about 0.7% for the month.
  • For the quarter and the year to date, the International Equity Fund gained 3.90% and it has outperformed its benchmark by 0.33%. The fund’s allocation to small international companies gained 7.2% and it has contributed positively to the fund’s benchmark-relative performance. The fund has also benefited from its below-benchmark allocation to the stocks of developing countries, as the MSCI Emerging Markets Index declined 1.2% for the quarter. The fund’s allocation to international REITs gained 1.6% for the quarter and detracted from its performance.

Multiple Asset Fund

Fund March Year-to-Date
Multiple Asset Fund +1.87% +5.59%
Composite Benchmark +1.89% +5.62%
Difference -0.02% -0.03%
  • For March, the Multiple Asset Fund (MAF) gained 1.87% but slightly underperformed its fund benchmark. Although three of the fund’s four strategies outperformed their respective benchmarks, the U.S. Equity Fund’s negative benchmark-relative performance more than offset the positive contributions of the other three funds that comprise MAF.
  • For the quarter and the year-to-date, the Multiple Asset Fund gained 5.59% and slightly underperformed the performance of its benchmark. Similar to the results for the month, three of the fund’s four strategies contributed positively to benchmark-relative performance, but the U.S. Equity Fund detracted from benchmark-relative performance and more than offset the positive contribution from the other three funds.

Balanced Social Values Plus Fund

Fund March Year-to-Date
Balanced Social Values Plus Fund +2.86% +8.01%
Composite Benchmark +2.82% +7.73%
Difference +0.04% +0.28%


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