Investment Performance
Investment return, net of investment manager fees, for the Foundation’s Balanced Endowment Fund and comparable indices for the periods ending 3/31/2012 are as follows:
| Q1 | 1 year | 3 year | 5 year | |
| CCF Balanced Fund | 8.81% | 3.11% | 18.29% | 3.44% |
| Benchmark | 8.82% | 3.64% | 18.32% | 3.04% |
Equities, both domestic and international, surged in the first quarater, propelling the account to a strong gain. Specifically, the account was up 8.8%, right in line with its benchmark. In dollar terms, the account gained $5.76 million, in what was definitely an excellent start to the year.
The long-term objective of the investment program is to preserve the fund's purchasing power by producing a total return that at least equals the Foundation's spending policy plus the rate of inflation.
Spending Policy
The Foundation invests its endowment assets to maximize total return (interest, dividends, capital appreciation/depreciation). Each individual fund at the Foundation receives its pro rata share of the total return.
Annually, the Board of Trustees establishes a spending policy or payout rate which is applied to the fair market value of each fund. That percentage is set aside for grant making purposes and administrative costs. Investment return in excess of the spending policy is retained in the fund to provide growth of principal. The goal of the spending policy is to create a steady flow of support to the community in uncertain markets while preserving the endowment’s value over time.
The Board of Trustees has historically approved a prudent rate of spending taking into consideration historic rates of return and inflation. Studies of endowment funds consistently show that payouts greater than 5% have the potential to erode the value of the endowment after inflation. The CCF grants and administration spending policy for 2012 is 4.85%.
For more information on investment returns, grant payouts and administrative fees on individual fund types, contact us at info@conncf.org, or 203-753-1315.
