Bond Fund – Performance (Third Quarter 2008)
Objective:
The Colorado Episcopal Foundation Bond Fund is a pooled investment fund seeking to provide current income. Capital appreciation is a secondary consideration. The Fund invests primarily in publicly traded fixed income securities and mutual funds that focus on fixed income investments. It is the goal of the Fund to produce, over the long–term, a total return that exceeds the total return of the Lehman Brothers Aggregate Bond Index on a risk–adjusted basis and a minimum total return that exceeds the rate of inflation by two percentage points.
Management:
The Colorado Episcopal Foundation Investment Committee has been established to assist the Foundation's Board of Trustees with overseeing the operation of the Bond Fund. The Investment Committee has six members and reports directly to the Board of Trustees. The Investment Committee, with the approval of the Board of Trustees, has invested the majority of the assets of the Bond Fund in three different fixed income mutual funds. They are the Dodge – Cox Income Fund, the PIMCO Total Return Fund, and the Western Asset Core Bond Fund.
Investment Review:
Turmoil in the credit markets continued to drive a "flight to quality". Short term US Treasury obligations were in high demand. Those issues that had any risk, either interest rate risk or credit risk, performed poorly. Three of the last four quarters have been the worst quarters in the last two decades for fixed income issues that carry risk relative to US Treasuries. As the markets stabilize and investors become more willing to accept some risk returns should improve for these issues. The Investment Committee continues to closely monitor the Fund to help ensure it is well positioned to meet its objectives over the long term. Please remember that a primary objective of the Colorado Episcopal Foundation Bond Fund is to produce current income. The Bond Fund produced a current income yield of 5.1% for the twelve months ended September 30, 2008.
Performance:
| 2008 Third Quarter |
Average Annual Returns For Periods Ended 09-30-08 |
||||
| 1 Year | 3 Years | 5 Years | |||
| Bond Fund | -3.7% | -2.3% | 1.8% | 2.1% | |
| Lehman Bros. Aggr. Bond Index | -0.5% | 3.6% | 4.1% | 3.8% | |
| Consumer Price Index | 1.9% | 5.5% | 3.8% | 3.5% | |
Schedule of Net Assets:
| September 30, 2008 Market Value |
Percent of Net Assets |
|||
| Cash and Money Market Funds | $123,765.30 | 1.9% | ||
| Mutual Funds | ||||
| Dodge & Cox Income Fund | $2,162,249.77 | 32.9% | ||
| PIMCO Total Return Fund | $2,204,850.93 | 33.6% | ||
| Western Asset Core Bond Fund | $2,123,460.32 | 32.4% | ||
| Total Mutual Funds | $6,490,561.02 | 98.9% | ||
| Accrued Income | $18,740.04 | 0.3% | ||
| Total Assets | $6,633,066.36 | 101.1% | ||
| Less Income Dividend Payable | (69,528.28) | (1.1) | ||
| Total Net Assets | $6,563,538.08 | 100.0% | ||