April 2013 Investment Report


  • U.S. equities represented by the Russell 3000 Index increased 1.6% during April. It was the sixth consecutive monthly gain, and the index closed the month at a new all-time high. The U.S. Federal Reserve Bank continued its $85 billion of monthly bond purchases, and explained it stands ready to increase or reduce purchases as economic conditions warrant.
  • Large cap stocks as represented by the S&P 500 Index gained 1.9%, and small cap stocks as measured by the Russell 2000 Index declined 0.4%. Among large cap stocks, those with strong earnings growth outperformed those classified as “value.”
  • Developed country international equities as measured by the MSCI EAFE Index increased 5.2% in April and were led by an 8.8% gain in the Japanese stock market. Developing markets gained only 0.9% as measured by the MSCI Emerging Markets IMI Index. International Real Estate Investment Trusts (international REITs) gained 7.7% as measured by the FTSE EPRA/NAREIT ex-US.
  • The U.S. Treasury yield curve flattened in April. The 2-year U.S. Treasury Note yield decreased by 0.03% to 0.21%, and the 10-year U.S. Treasury Note yield decreased by 0.18% to 1.67%. The long bond (30-year U.S. Treasury) decreased 0.23% in yield to 2.88%.
  • U.S. Treasury securities as measured by the Barclays U.S. Treasury Index increased 0.9% in April, while credit segments of the fixed income market provided additional return over Treasuries. Investment-grade debt as represented by the Barclays U.S. Credit Index increased 1.8% for the month. Below-investment-grade debt as measured by the Barclays U.S. Corporate High-Yield Index also increased 1.8%, matching the return of investment-grade bonds.
  • The U.S. dollar as measured by the U.S. Dollar Index decreased 1.5% in April. During the month, the euro increased 2.7% relative to the dollar and the Mexican peso increased 1.6%. The Japanese yen extended its recent decline by decreasing 3.3% in April. Year-to-date, monetary policy implemented by Japan’s central bank has decreased the value of the yen relative to the U.S. dollar by 11.0%. The Mexican peso has increased 5.9% this year through April on improving prospects for economic growth in Mexico.
  • Commodities as represented by the Dow Jones UBS Commodity Index decreased 2.8% in April. Precious metals were the weakest commodity sector and declined 9.6%. Within precious metals, gold’s decline of 7.8% was attributed to disappointing economic growth in China and concern that European central banks, especially the Central Bank of Cyprus, would sell a portion of their gold reserves as a means to deal with the country’s fiscal problems.

Economics Highlights

  • Japan’s central bank, the Bank of Japan, continued its aggressive monetary policy by unveiling plans to double holdings of government bonds and the amount of yen in circulation. The MSCI Japan Index gained 8.8% in April and 19.7% year-to-date in U.S. dollar terms.
  • Spanish Prime Minister Mariano Rajoy announced plans to curb austerity and promote growth. After taking office 16 months ago, Rajoy initially focused on cutting spending and raising taxes. However, with the current unemployment rate over 27%, Rajoy will shift focus to growth by increasing the amount of credit to smaller companies and extending the timeline for reducing the nation’s budget deficit.
  • An erroneous tweet from a hacked Associated Press Twitter account caused the S&P 500 to decline 0.9% in a matter of seconds, erasing $130 billion in market capitalization. The tweet, which incorrectly reported an explosion at the White House, was immediately recognized and processed by high-speed computer trading algorithms, causing the stock market to decline. Once the information was discredited, the market recovered quickly. However, the event raises concerns regarding the risks of high-frequency computer trading.
  • The United Kingdom’s economy showed signs of improvement as quarterly gross domestic product increased more than expected. The MSCI United Kingdom Index gained 2.6% in April and 4.2% year-to-date in U.S. dollar terms.

Geopolitical Headlines

  • Italian Prime Minister Enrico Letta won the final vote required to implement a government, more than two months after inconclusive elections. The news resulted in Italian bond yields falling to their lowest level in more than two years. The MSCI Italy Index gained 11.5% during the month in U.S. dollar terms.
  • Two bombs exploded during the Boston Marathon, killing three people and injuring nearly 300. Two brothers of Chechen origin who resided in the Boston area were identified as suspects. Police killed one suspect in a shootout and captured the second suspect, who was subsequently charged with capital offenses including using a weapon of mass destruction.
  • A Bangladesh garment factory tragically collapsed during April, killing more than 800 people. The collapse raises serious questions about working conditions in Third World countries, and puts a spotlight on U.S. and European retailers that rely on the developing world to produce cost-efficient clothing.

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: 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 +0.81% +1.20%
Barclays Capital U.S. Government Inflation-Linked Bond Index +0.96% +0.46%
Difference -0.15% +0.74%
  • The Inflation Protection Fund advanced 0.81% in April but underperformed the fund benchmark by 0.15%. The fund’s diversifying investments in inflation-linked bonds from developing countries gained 2.9% for the month and positively contributed to the fund’s benchmark-relative performance; however, two of the fund’s other diversifying strategies partially offset the positive contribution from this strategy. The Inflation Protection Fund’s allocation to commodities declined 3.1% and detracted the most from performance compared to the benchmark.
  • For the year-to-date, the Inflation Protection Fund has gained 1.20% and outperformed its benchmark by 0.74%. Three of the fund’s diversifying strategies contributed positively to benchmark-relative performance. The best-performing strategy was the fund’s allocation to inflation-linked bonds of developing countries, which has gained 4.1%. The portfolio’s allocation to bonds from developed countries has increased 3.0% and also provided meaningful gains compared to the fund benchmark. The only diversifying strategy that has detracted from performance is the fund’s 10% allocation to commodities, which has declined 3.7% year-to-date.

Fixed Income Fund

Fund April Year-to-Date
Fixed Income Fund +1.93% +2.28%
Barclays Capital U.S. Universal (ex MBS) Index +1.28% +1.40%
Difference +0.65% +0.88%
  • The Fixed Income Fund gained 1.93% in April and outperformed the fund benchmark return by 0.65%. The best-performing strategies for the month were the fund’s allocations to debt from developing countries, which gained 4.0% during April primarily due to strength in the currencies of these countries, notably the Mexican peso, the South African rand and the Polish zloty. The fund’s allocations to developed international bonds also advanced as the U.S. dollar weakened during the month compared to most foreign currencies, as concerns diminished about political instability in Italy and the U.K. economy improved.
  • For the year-to-date, the Fixed Income Fund has gained 2.28% and outperformed the fund benchmark by 0.88%. The fund’s two allocations to below-investment-grade debt and bonds from developing countries have both gained more than 4% and positively contributed to benchmark-relative performance. In addition, the fund’s largest manager, Pimco, has outperformed its benchmark by 0.7% year-to-date. The fund’s only diversifying strategy detracting from performance is its allocation to global bonds, which have gained 1.2% as the U.S. dollar has slightly strengthened for the year compared to developed country currencies.

U.S. Equity Fund

Fund April Year-to-Date
U.S. Equity Fund +1.32% +12.12%
Russell 3000 +1.64% +12.89%
Difference -0.32% -0.77%
  • The U.S. Equity Fund gained 1.32% in April and underperformed the fund’s Russell 3000 Index benchmark by 0.32%. The fund’s allocation to real estate investment trusts (REITs) gained 6.5% for the month and positively contributed to the fund’s benchmark-relative performance. However, the fund’s greater than benchmark allocation to small and mid-sized companies as well as the fund’s 10% allocation to the alternative investment strategies of private equity and private real estate detracted from benchmark-relative performance as the Russell 2000 Index of small company stocks declined 0.4% for April and the fund’s two alternative strategies gained 0.7% for the month.
  • For the year-to-date, the fund gained 12.12% and trails its benchmark return by 0.77%. The fund’s 10% allocation to alternative investments has gained about 2.7% and accounts for all of the benchmark-relative performance shortfall. The performance of alternative investments typically lags the public equity securities during periods of strong investment returns.

International Equity Fund

Fund April Year-to-Date
International Equity Fund +3.07% +7.09%
MSCI ACWI ex US +3.56% +7.26%
Difference -0.49% -0.17%
  • The International Equity Fund gained 3.07% in April and was the best-performing fund, although it trailed its benchmark return by 0.49%. While international REITs advanced 8.4% and positively contributed to benchmark-relative performance, the fund’s two largest investment managers meaningfully underperformed their respective benchmarks largely due to their exposure to stocks from developing countries, which do not comprise these managers’ benchmarks.
  • For the year-to-date, the International Equity Fund has gained 7.09% and underperformed its benchmark return by 0.17%. The fund’s allocation to small international companies has gained 10.6% and has positively contributed to the fund’s benchmark-relative performance. The International Equity Fund has also benefited from its below-benchmark allocation to stocks of developing countries, as the MSCI Emerging Markets Index has declined 0.1% so far this year. The fund’s two largest managers have underperformed their benchmarks by 2.3% and 3.6% because of their decision to allocate a portion of their portfolio to stocks from developing countries; this allocation also has detracted from year-to-date performance.

Multiple Asset Fund

Fund April Year-to-Date
Multiple Asset Fund +1.75% +7.43%
Composite Benchmark +1.86% +7.58%
Difference -0.11% -0.15%
  • For April, the Multiple Asset Fund (MAF) gained 1.75% but underperformed its fund benchmark by 0.11%. Despite very strong benchmark-relative performance by the Fixed Income Fund (FIF), MAF’s other three strategies underperformed their respective benchmarks and more than offset FIF’s positive contribution.
  • For the year-to-date, the Multiple Asset Fund has gained 7.43%, and underperformed its benchmark return by 0.15%. The Inflation Protection Fund and FIF have positively contributed to MAF’s benchmark-relative performance, whereas the two equity funds (U.S. and International) have detracted from relative performance.

Balanced Social Values Plus Fund

Fund April Year-to-Date
Balanced Social Values Plus Fund +1.53% +9.67%
Composite Benchmark +1.40% +9.24%
Difference +0.13% +0.43%


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