Colorado Academy Board of Trustees: Endowment Advisory Committee Update for November 2, 2016

updated November 2, 2016

Endowment Advisory Committee: Chris Bittman, John Ege*, John Fenley*, Paul McPheeters*, Bryan Ritz and Minyoung Sohn with Mike Davis and Heather Miller as Ex Officio members. Our Investment Consultant is Paul Schreder of Ellwood Associates.

Executive Summary of the current Investment Policy Statement. The Target Rate of Return is CPI +5%.

ESPN MNF: September 24, 2012

Green Bay Packers (1-2) @ Seattle Seahawks (2-1)

On the final play of the tightly-contested game, rookie Seattle quarterback Russell Wilson threw a Hail Mary pass into the end zone intended for wide receiver Golden Tate. Both Tate and Packers defender M. D. Jennings got their hands on the ball while both players were still in the air and attempting to gain possession. The two officials near the play initially gave separate signals of touchdown and touchback, before ruling the players had simultaneous possession, resulting in a Seahawks game-winning touchdown. Prior to the catch, Tate shoved Packers cornerback Sam Shields with both hands, which the NFL later acknowledged should have drawn an offensive pass interference penalty that would have negated the touchdown and resulted in a Packers victory. The lack of a pass interference penalty and the ruling of a touchdown via simultaneous catch were widely questioned in the aftermath of the game, drawing comments from the game's announcers, NFL players, and the media. The NFL subsequently released a statement defending the touchdown ruling. source: Wikipedia

ARE WE WITNESSING ANOTHER FAIL MARY (2016 FEDERAL RESERVE EDITION)?

In the seven years since the Financial Crisis, the Federal Reserve has Expanded its Balance Sheet by over $4 Trillion in a Series of Quantitative Easing Programs

Endowment Performance in Fiscal Year 2016 ending June 30, 2016

CA is beating its Policy Index across every time period, including short-term horizons ending June 30, 2016, which included #Brexit as well as two China-inspired market corrections.

S&P 500 Chart from June 30, 2016 to October 31, 2016

The three yellow circles represent June 30, 2015; June 30, 2016 and September 30, 2016 respectively. The small green circle is the high-water mark for the Endowment ($26.7 million on August 30th). Each of the red circles markets moments of market stress.

"As for market performance, if the unhappy statistics below weren't so tragic, they'd be funny . . ." - Carter Worth, Technical Analyst, Cornerstone Macro Research

Upside / Downside Ratio of Approximately 4.1x

CA is beating the the Policy Index and our Peer Group (165 Portfolios) with significantly less risk

However, when adjusted for Risk, nobody did better than us with respect to Risk-Adjusted Returns as our Portfolio would sit on this Efficiency Line (in green)

Endowment Value = $25,377,292

updated through September 30, 2016

Asset Allocation

Committee moved to a defensive posture with a focus on U.S. Stocks, Cash and Floating Rate Securities. Regarding Alternatives, the Committee has exited Hedge Fund investments* and focused on specific investment exposures including MLPs, Energy and Gold.

Earlier this year, the Committee voted to redeem our investment in the BlackRock Hedge Fund of Funds strategy. Notice was given in May and redemption funds were received November 1, 2016.

Asset Allocation with a Purpose

Offense, Defense & Special Teams (Alternatives)

NOTE: The Endowment Cash Position is currently holding approximately ~15% cash position. (The "9.9% Cash" is the from Redemption of our investment in BlackRock's Fund of Funds - we received the cash on November 1 - as well as the 5% cash held in money market funds).

Equity

As of September 30, 2016

Fixed Income

As of September 30, 2016

Special Teams

CA's "Alternative" Investments

Source: Investopedia via Google search results
As of September 30, 2016

Performance Summary Review

Endowment Committee: Next scheduled meeting is on November 8, 2016

Next considerations include possibly adding more gold (currently 4%) and studying Inflation Protection Strategies, such as TIPs, as we continue to strive to stay ahead of the market

..........

End

Made with Adobe Slate

Make your words and images move.

Get Slate

Report Abuse

If you feel that this video content violates the Adobe Terms of Use, you may report this content by filling out this quick form.

To report a Copyright Violation, please follow Section 17 in the Terms of Use.