Investment Strategy & Performance
As stewards of the charitable funds entrusted to us, Berkshire Taconic Community Foundation is committed to seeking the best possible returns while minimizing risk so that donors can grant more to the communities and causes they care about—now and for years to come.
Investment Performance as of December 31, 2023
| Pool | 1 mo. | 1 Year | 3 Years | 5 Years | 7 Years | 10 Years | Assets |
|---|---|---|---|---|---|---|---|
Managed Pool | 3.0 | 14.5 | 7.7 | 11.2 | 9.8 | 8.2 | $197.5M |
| Managed Pool Benchmark | 3.1 | 13.3 | 6.1 | 10.1 | 8.7 | 7.1 | N/A |
| Traditional 65% Equities / 35% Bond Index | 4.6 | 16.3 | 1.8 | 7.6 | 6.9 | 5.4 | N/A |
| Socially Responsible Pool | 4.5 | 18.7 | 3.7 | 8.8 | 7.4 | 7.0 | $16.7M |
| Income Pool | 1.7 | 6.1 | -0.6 | 2.4 | 2.3 | 2.2 | $2.8M |
| Minimum Risk Pool | 0.4 | 4.8 | 2.1 | 1.7 | 1.5 | 1.1 | $3.9M |
Investment Commentary & Return Detail
The Foundation’s Managed Pool is an endowment model portfolio that is diversified among public equities and fixed income investments and alternatives flexible capital (hedge fund) and private equity investments. The goal of the portfolio is to achieve strong long-term returns with lower volatility than similar marketable portfolios while maintaining the purchasing power of our endowment funds over time. Investment, consultant and custodial fees total 1.06%, and returns are reported net of managed fees.
Investment Commentary: Q4 2023
The Managed Pool portfolio rose 6.7% during the fourth quarter of 2023, bringing the 2023 calendar year return to 14.5%, exceeding the Policy Index return of 6.6% for the quarter and 13.3% for the calendar year. As of December 31st, the Total Fund (including Gift Account) stood at $197.7 million and all asset segments were allocated within their respective target ranges. 2023 began after a challenging year marked by inflationary pressures and geopolitical tensions. With inflation subsiding and investors pricing in rate cuts, the S&P 500 gained 26.3% in 2023. Led by the “Magnificent Seven” mega cap tech stocks, the index exited the bear market and achieved a new all time high. In the portfolio, Domestic Equity was the best performing segment with a return of 27.6%, 1.3% higher than the S&P 500. Developed non-U.S. equities and Emerging markets also rose during 2023, gaining 18.2% and 9.8% respectively. Throughout the year, interest rate volatility remained high as investors continued to adjust expectations around future fed actions and the likelihood of recession.
| Asset Class (% of Allocation) | Lower Boundary | Upper Boundary |
|---|---|---|
| Global Equity (Public and Private) | 50% | 80% |
| • Global Public Equity | 35% | 65% |
| • Domestic Equity | 25% | 50% |
| • Non-U.S. Developed Equity | 7% | 20% |
| • Emerging Markets Equity | 0% | 10% |
| • Private Equity | 15% | 28% |
| Flexible Capital | 15% | 30% |
| Global Fixed Income | 0% | 20% |
| Real Assets | 0% | 10% |
| Cash | 0% | 10% |
Investment Commentary: Q4 2023
The Socially Responsible Investment Pool portfolio gained 9.9% in the fourth quarter of 2023, bringing the 2023 calendar year to date return to 18.7%, exceeding the Policy returns of 9.0% for the fourth quarter and 17.1% for the year. Global Public Equity contributed the most to total returns and Total Flexible Capital contributed the most to active returns. At year end, the portfolio had $16.8M in assets. The portfolio is liquid with 81.0% of its investments offering daily liquidity. BTCF has redeemed its positions in Flexible Capital in favor of a more liquid allocation, given the portfolio’s small size.
| Asset Class | Ranges |
|---|---|
| Global Equity | 55-80% |
| Private Equity | 0-5% |
| Flexible Capital | 0-20% |
| Real Assets | 0-20% |
| Fixed Income | 0-20% |
| Liquidity | 0% |
Appropriate for fundholders who seek to minimize risk and reduce volatility. This pool is invested in bond funds. The average annual investment fees are 0.46% and the allocation is 100% fixed income and cash equivalents.
Investment Commentary: Q4 2023
The Income Pool earned 6.1% during 2023, exceeding its policy index of 5.5%.
Accommodates funds that are generally short term in nature and are focused on investment of capital with minimal risk. The Money Market Pool earned 4.8% in 2023, trailing the FTSE 2 Month T-Bill returns of 5.3%.
Financial Information
Founded in 1987 with an anonymous donation of $100,000, we now manage charitable assets of $200 million. Through sophisticated investing, careful management of operating expenses and generous contributions from individuals, families and organizations, we continue to grow and serve as an enduring source of support for current and future needs.
