By Jerry Love, Louisiana Baptist Foundation
ALEXANDRIA – After posting positive returns for the year 2010, the Louisiana Baptist Foundation continued with positive earnings in the first quarter of 2011. This news greeted the Foundation’s Board of Trustees in their quarterly meeting held on April 26 at the Baptist Building.
The investment committee met during the early part of the morning and discussed the various LBF portfolios. Lee Morris with Graystone Consulting presented the Foundation’s performance returns and gave an economic outlook for the coming months.
As of the quarter ending March 31, 2011, the LBF equity fund gained 5.27 percent, with the Fixed Income Fund posting a slight 0.92 percent increase. The Group Investment Fund, which is a blend of the Equity Fund and Fixed Income Fund along with smaller amounts invested in other market segments, returned 3.09 percent for the quarter. The Group Investment Fund is the main vehicle for investing long term endowment money.
In his report on general economic conditions, Morris relayed that his firm’s analysts feel that the longer-term prospects for multi-year global business expansion are good. Also they feel that the U.S. dollar will show modest strength in the coming months. This outlook is based at least partially on the fact that global Gross Domestic Product has moved from recovery to business cycle expansion.
Even with the positive outlook, Morris cautioned there are two significant risks still affecting the U.S. economy. The first risk is related to energy prices continuing to move higher. Energy affects the price of most goods and services in the United States and could lead to overall inflationary conditions. The second is housing prices. Although housing prices have stabilized in recent months a down turn in housing would lead to loss of equity and more mortgage defaults, which could lead to a “double dip” recession and stifle US recovery for years.
Three motions were discussed and approved by the Investment Committee, all affecting the management of the LBF portfolio. The first was to invest up to 5 percent of the LBF Group Investment Fund into a Global Real Estate Fund managed by ING. The second motion was to place $25,000 into the JP Morgan Commodity Fund. This fund will be closed to new investors in May, and this move will reserve an account with the fund for future investments. Both of these investment changes will add diversity to the LBF portfolio with the goal of enhancing investment returns and reducing volatility for the long-term.
In its third motion, the Investment Committee agreed to recognize and allow the individual bond managers to operate outside the normal investment parameters set by the board due to the current economic climate. The Board will monitor this process and adjust its policies and parameters for the managers as needed in the near future.
The operating committee of the LBF Board also met during the morning and reviewed the operating budget and approved a capital budget of $3,000 for the purchase of two new laptop computers.
During the afternoon session of the full Board of Trustees, all motions presented in the morning committee meetings were reviewed and approved.
The Board also ratified an e-mail poll of the Trustees that was taken earlier in the quarter to approve the hiring of Herman “Butch” Savoie, Jr., as the new attorney for the Board of Trustees. Mr. Savoie is a local attorney in Alexandria and a member of Calvary Baptist Church. His father was a pastor in West Monroe for many years. Savoie was hired to replace the previous board attorney, Bob Nida, who retired this past year.
The next scheduled meeting for the Louisiana Baptist Foundation Board of Trustees is July 26, 2011.
To learn more about the work and ministry of the Louisiana Baptist Foundation and to see a list of current Trustees, go to www.LBFinfo.org.