Market commentary and investment performance

by John Hartley

Financial markets have never been accused of being logical and 2018 supported this assertion. Employment, wages and corporate earnings were all up. But investors, in Q4 especially, focused on anticipated rising interest rates and recession fears. Other worries included trade, Brexit and falling oil prices. For 2018, long-recognized performance trends flipped – cash outperformed bonds, bonds outperformed stocks. For 2019, equities do have room to advance. The Q4 sell-off has made stock prices more attractive, the Fed appears to be tapping the brakes on rate increases and the economy and corporate earnings should continue to grow (perhaps just not at the 2018 rate).

  Last 10 years Last 5 years Last 3 years Last year Q4 2018
NCCF total 8.1% 3.7% 4.6% -7.1% -9.6%
Investment Fund 7.6% 3.2% 3.9% -7.6% -9.2%
Other managers 8.6% 4.2% 5.3% -6.6% -10%
Broad Index 7.9% 3.9% 5.4% -6.5% -8.5%
Peer Benchmark 8% 3.5% 5.5% - 6.7% -9.6%

Notes: Multi-year percentages are annualized. Returns are net of investment fees. The Broad (Policy) Index equals 70% of the MSCI All Country World Index and 30% of the Bloomberg Barclays Aggregate Bond Index. The Peer Benchmark is a summary of comparable community foundations.