By Jerry Love, Director of Planned Giving
ALEXANDRIA (LBM) – News of well-performing portfolios, updates on investments, progress on its new accounting software and the approval of its annual audit highlighted the second quarterly meeting of the Louisiana Baptist Foundation Board of Trustees meeting July 25.
E.L. Paulk, trustee from Deville, chaired the morning meeting of the Investment Committee.
In a conference call to trustees, Lee Morris, Investment Consultant with Graystone, reviewed the investment holdings and performance for the first half of 2017 in context of the U.S. Domestic Equities markets, which are positive for the year.
Morris said fixed income portfolios remain relatively sluggish, as anticipated, explaining that the Federal Reserve is expected to raise rates once more by year end. He said active management was gaining traction versus passive management through the first half of 2017, with more managers “picking stocks” rather than essentially “indexing funds” to the markets.
He also discussed alternative allocations, such as convertible securities and preferred stock, are performing well and adding value to the portfolio at both the performance and diversification level. Pointing to Morgan Stanley’s Global Investment Committee’s expectation of positive performance from developed equity markets, both domestic and worldwide, he said the emerging market equity exposure should also be productive as well in the near future.
In view of the economy and the performance of the equity markets, Morris recommended increasing the allocation to Small/Mid Cap companies in the domestic equity portfolio and to increase the allocation to emerging markets. These recommendations were within the policy guidelines and required no board action.
Highlighting that the LBF portfolios have performed well through the first half of the year, Morris noted all components of the portfolio are in compliance with the Board’s investment policies.
Investment returns for the major components of the LBF portfolio year-to-date 2017 as of June 30 were:
— Short Term Fund: 0.78 percent annualized yield
— Group Investment Fund, comprised of various market sectors: 5.96 percent total return.
— Diversified Income Fund, conservative income-oriented fund: 1.97 percent total return.
Chuck Murray, CPA and Controller for the Foundation, reported a decrease in assets under management due to several larger Baptist entities and churches making withdrawals from Short Term Fund accounts to meet increased financial demands for the summer or for ongoing construction projects. He shared that assets under management as of June 30, 2017, totaled $164,337,108.
Later in the morning, West Monroe’s Waymond Warren conducted the Operating Committee meeting and called on Murray to present the operating budget for the first half of 2017.
Although income from the Cooperative Program was down by approximately 4 percent, income from the Foundation’s own investments combined with cost recovery income helped to offset the decline, Murray said. Also, he said there were considerable savings due to reduced expenses for accounting software than budgeted which allowed for a year-to-date net operating surplus.
Executive Director Wayne Taylor and Jerry Love, planned giving director, reported about efforts to engage individuals in estate stewardship, noting they had attended eight events with several more on the schedule.
Love also said several gifts were in progress that will benefit a variety of Baptist ministries, churches and agencies.
Taylor also updated the committee on the accounting software transition progress.
He said the first phase has been completed and the Foundation’s old accounting system has moved to a new platform where it can be properly supported and maintained.
The next phase is for the software developer to use the conversion to build a new, marketable product that can serve, not only the needs of the LBF, but other religious non-profits as well.
The final item on the agenda was a report on the Foundation’s annual audit.
Rebecca Nation, an auditor for Payne, Moore and Herrington, LLP, told trustees her firm had completed a “clean” audit with no exceptions noted in the accounting practices of the Louisiana Baptist Foundation. The Audit Committee, which had met via phone conference with her prior to the meeting, recommended approval of the audit report.
Following lunch, the full board heard committee reports, reviewed the performance of the portfolios and the recommendations of the investment consultant. There were no actionable items submitted by either committee. The annual audit was approved by the Board as recommended by the Audit Committee.
The next meeting for Foundation Trustees is scheduled for October 24, 2017.
To learn more about the work and ministry of the Foundation go to www.LBFinfo.org.