By Jerry Love, Director of Planned Giving
ALEXANDRIA (LBM) — Louisiana Baptist Foundation trustees met Feb. 5 to discuss investment performances and welcome three new board members.
Fran Barbato, member of FBC Lafayette, Errol Wilken, member of Metairie Baptist Church, and Chad Hardbarger, pastor of Emmanuel Baptist Church, Shreveport, were introduced at the meeting and then joined the other 11 board members in receiving reports and approving policies regarding the work of the Foundation.
Lee Morris with Graystone Consulting addressed the recent difficulties experienced by equity markets.
Morris said the fourth quarter in 2018 reversed many of the gains made during the year through the third quarter, and shared that the last three months of last year represented the worst performance for a fourth quarter since 1931. He added that the equity market downturn in early October was led by large growth (tech) stocks.
According to Morris, the Global Investment Committee of Smith Barney had warned of this decline since early summer 2018. Moreover, he said, GIC has concluded that the “rolling bear” market ended when the S&P 500 index bottomed at 2400 in the fourth quarter.
He said the equity markets are now in a “rolling bull” market with an anticipated S&P 500 trading range between 2400-3000.
Fixed income portfolios are performing in line with expectations, Morris said, adding that the GIC has forecast that rates will remain at coupon value or less because the Federal Reserve Board likely will keep rates flat for a period of time.
The Foundation can expect alternative investment allocations (preferred stocks, MLP’s, covered calls) to add value at both the performance and diversification/risk control level, he said, adding that equity securities are positioned for growth relative to fixed income, especially in Japan, Europe, emerging markets and the United States, in that order.
Finally, Morris said the economic news cannot get much better in the U.S., and that slowing growth in earnings is likely the biggest challenge going forward with regard to U.S. equity markets.
Chuck Murray, LBF controller, reviewed the LBF portfolio performance, reporting the following end-of-year returns:
— Short Term Fund: 1.38 percent actual annualized yield;
— Group Investment Fund (comprising various market sectors): -5.90 percent total return; and,
— Diversified Income Fund (conservative income-oriented fund): -0.39 percent total return.
The funds generated returns that were in line with their respective benchmarks and adhered to the investment policies established by the LBF Board, Morris said, with the net assets under management standing at $149,926,843 as of December 31.
Murray reported the Foundation was blessed with a net operating budget surplus for last year. He said gifts from the Cooperative Program were fewer than projected, but that increased income from interest and cost recovery fees made up the shortfall and more.
Jerry Love, planned giving director for the Foundation, reported the receipt of approximately $1.15 million in new gifts in 2018, largely composed of stock donations that benefited Baptist churches and LBC agencies.
Executive Director Wayne Taylor reported that the LBF had entered into a contract with U.S. Computers in Lafayette to update and rewrite the Foundation’s existing accounting system.
Taylor noted that quite a bit of work already had been completed and offered that the updated software will provide additional long term data security and expand the range of services the Foundation can offer clients in the future.
Trustees also approved a spending policy of 2.85 percent in terms of the rate paid from permanent endowment and trust funds to beneficiaries. The spending policy ensures a steady flow of money to the recipients while aiding in the growth of the funds under the Foundation’s management.
The next LBF trustee meeting is scheduled for April 30, 2019.
The Louisiana Baptist Foundation assists individuals with gifts that benefit Louisiana Baptist churches and ministries, and to assist Baptist churches and entities with financial management. To learn more about the work and ministry of the Foundation, to review investment returns for its managed funds, or to see a list of current trustees, go to www.LBFinfo.org.