Limited Maturity Income Fund
(Third Quarter 2008)
Objective:
The Colorado Episcopal Foundation Limited Maturity Income Fund is a pooled investment fund seeking to provide current income and lower risk. 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 equals or exceeds the total return of the Lehman Brothers 1–3 Year Government Bond Index on a risk–adjusted basis and a minimum total return that exceeds the rate of inflation by one percentage point.
Management:
The Colorado Episcopal Foundation Investment Committee has been established to assist the Foundation's Board of Trustees with overseeing the operation of the Limited Maturity Income 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 Limited Maturity Income Fund in two no–load mutual funds and the Vanguard Admiral Treasury Money Market Fund. The mutual funds are the T. Rowe Price Short–Term Bond Fund and the Vanguard Short–Term Investment–Grade Fund.
Investment Review:
The "flight to quality" brought on by the turmoil in the credit markets resulted in short term US Government obligations dramatically outperforming almost all other issues. As can be seen below, the Limited Maturity Income Fund underperformed its benchmark for the third quarter. This was primarily due to the poor performance of corporate issues relative to Treasuries. The Investment Committee continues to closely monitor the Fund to help ensure that it is well positioned to meet its objectives over time. Please remember that a primary objective of the Colorado Episcopal Foundation Limited Maturity Income Fund is to produce current income. The Fund produced an income yield of 4.1% for the twelve months ended September 30, 2008.
Performance:
| 2008 Third Quarter |
Last Twelve Months |
Last 3 Years Annual |
|
| Limited Maturity Income Fund | –1.6% | 1.4% | 3.5% |
| Lehman Bros. 1–3 Year Gov't Bond Index | 1.4% | 5.9% | 5.1% |
| Consumer Price Index | 1.9% | 5.5% | 3.8% |
Schedule of Net Assets:
| Sept. 30, 2008 Market Value |
Percent of Net Assets |
||
| Cash and Money Markets Funds | |||
| Cash | $9,020.98 | 0.3% | |
| CSBT Money Market | $9,504.85 | 0.3% | |
| Vanguard Admiral Treasury MM | $587,460.00 | 20.3% | |
| Total Cash and Money Markets Funds | $605,985.83 | 20.9% | |
| Mutual Funds: | |||
| T Rowe Price Short–Term Bond Fund | $1,141,324.48 | 39.4% | |
| Vanguard Short–Term Inv–Grade Fund | $1,141,082.08 | 39.4% | |
| Total Mutual Funds | $2,282,406.56 | 78.8% | |
| Accrued Income | $9,395.79 | 0.3% | |
| Total Net Assets | $2,897,788.18 | 100% | |