Financially speaking

by John Hartley

2020 was a reminder why perpetuity, a long-term perspective, diversification, and patience are the bedrock of the philosophies and strategies guiding NCCF. The ongoing pandemic took more than 400,000 lives in the U.S. and shined a harsh light on economic inequality by highlighting a familiar disparity - as those with wealth and higher level jobs enjoyed a rebound in the equity and job markets, lower wage workers struggled to obtain basic services and maintain employment.  In a year when the need was great, NCCF rose to the challenge – issuing over $1M in scholarships most going to students attending NC colleges and universities, many of them first generation attendees, as well as setting a new high annual watermark for total grants disbursed when not for profits needed it the most. 

After an initial collapse in the first quarter of 2020, equity markets recovered and thrived on the back of central bank monetary accommodation (interest rate cuts and liquidity infusions) and massive fiscal stimulus, world equities ended the year up 15.5%. U.S. equities advanced almost 21%. Broadly, U.S. fixed income rose 7-1/2% for the year, without the gut-wrenching volatility of stock markets. Likewise, the NCCF portfolio benefited. Preliminary returns for 2020 average about +14%, ranging +12% to +15%, depending on the manager. Though inconsequential for short-term periods, the portfolio did exceed the NCCF investment objective of CPI (inflation) + 6%. Comparisons to other benchmarks, relative and peer, are forthcoming.

The big question for 2021 is when will we get back to normal? Or for this discussion, how long will global economic normalization take? Indications are widespread that global economies are returning to an expansion phase. Though uneven country to country, or continent to continent, as more people receive the vaccine, business activity will reopen or return to normal. That generally boosts confidence, both consumer and business, and stronger GDP growth follows. Equity markets like higher GDP, as it usually leads to stronger corporate profits. That said, a lot of the good news, vaccinations and a return to normalcy, appear to already be priced into stocks. We are in a period of transition – administration, legislative, diplomatic, societal – all provide uncertainty that equity markets abhor. But the positives hopefully outweigh the negatives, and we will see an upbeat year for stocks, just maybe not as robust as the end of 2020.

We are forever grateful for your commitment to our North Carolina. NCCF is committed to providing donors with a financially sustainable home for charitable funds with an expanding menu of investment choices designed to meet a range of donor preferences and charitable goals, and always focused on a guiding philosophy to promote prudent stewardship of charitable assets for the benefit of the communities across our great state. These principles have served the foundation well since our founding. We are proud of our legacy and invite you to explore all that NCCF has to offer.

{"tinyMCE_dummy":"","title":"Financially speaking","url":"\/blog\/financially-speaking","meta":{"title":"","description":"","excludeFromSitemap":"No"},"ordinal":999,"content":"<p>2020 was a reminder why perpetuity, a long-term perspective, diversification, and patience are the bedrock of the philosophies and strategies guiding NCCF. The ongoing pandemic took more than 400,000 lives in the U.S.&nbsp;and shined a harsh light on economic inequality by highlighting a familiar disparity&nbsp;-&nbsp;as those with wealth and higher level jobs enjoyed a rebound in the equity and job markets, lower wage workers struggled to obtain basic services and maintain employment. &nbsp;In a year when the need was great, NCCF rose to the challenge &ndash; issuing over $1M in scholarships most going&nbsp;to students attending NC colleges and universities, many of them first generation attendees, as well as setting a new high annual watermark for total grants disbursed when not for profits needed it the most.&nbsp;<br \/><br \/>After an initial collapse in the first quarter of 2020, equity markets recovered and thrived on the back of central bank monetary accommodation (interest rate cuts and liquidity infusions) and massive fiscal stimulus, world equities ended the year up 15.5%. U.S. equities advanced almost 21%. Broadly, U.S. fixed income rose 7-1\/2% for the year, without the gut-wrenching volatility of stock markets. Likewise, the NCCF portfolio benefited. Preliminary returns for 2020 average about +14%, ranging +12% to +15%, depending on the manager. Though inconsequential for short-term periods, the portfolio did exceed the NCCF investment objective of CPI (inflation) + 6%. Comparisons to other benchmarks, relative and peer, are forthcoming.<br \/><br \/>The big question for 2021 is when will we get back to normal? Or for this discussion, how long will global economic normalization take? Indications are widespread that global economies are returning to an expansion phase. Though uneven country to country, or continent to continent, as more people receive the vaccine, business activity will reopen or return to normal. That generally boosts confidence, both consumer and business, and stronger GDP growth follows. Equity markets like higher GDP, as it usually leads to stronger corporate profits. That said, a lot of the good news, vaccinations and a return to normalcy, appear to already be priced into stocks. We are in a period of transition &ndash; administration, legislative, diplomatic, societal &ndash; all provide uncertainty that equity markets abhor. But the positives hopefully outweigh the negatives, and we will see an upbeat year for stocks, just maybe not as robust as the end of 2020.<br \/><br \/>We are forever grateful for your commitment to our North Carolina. NCCF is committed to providing donors with a financially sustainable home for charitable funds with an expanding menu of investment choices designed to meet a range of donor preferences and charitable goals, and always focused on a guiding philosophy to promote prudent stewardship of charitable assets for the benefit of the communities across our great state.&nbsp;These principles have served the foundation well since our founding. We are proud of our legacy and invite you to explore all that NCCF has to offer.<\/p>","excerpt":"","media":0,"custom":{"social_sharing":{"share_image":""},"blog_author":{"use_alternate_image":"No"},"masthead":{"title":"","counties":"","affiliate_logo":"","sub_text":"","background_image":"","caption":""},"post_image":{"image":""},"latest_blog":{"post":""}},"inMenu":false,"visibleTo":"Everyone","publishedAt":1612191476,"orderChildrenBy":"ordinal","enableComments":false,"permission":"read","id":"516a1b6e512143a1930e3a14299e879d","parent":"e76aa785e2f140b6a8bdcb322b91b397","node":74094,"created":1612191476,"modified":1612192960,"fresh":1,"type":"post","children":{},"relations":{"author":[{"title":"John Hartley","content":"","excerpt":"","url":"\/authors\/john-hartley","publishedAt":1395950791,"media":[{"type":"image","url":"https:\/\/nmcdn.io\/e186d21f8c7946a19faed23c3da2f0da\/7868d48393ef4e3bb7bca8cdf7bc2f20\/files\/John-Hartley.jpg","title":"John Hartley","caption":"","size":"12259421"}],"source":null,"inMenu":false,"meta":{"title":"","description":"","excludeFromSitemap":"No"},"ordinal":0,"orderChildrenBy":"","permission":"write","tinyMCE_dummy":"","visibleTo":"Everyone","id":"41ca15a89f894bacb13c691a2492caa5","parent":"289475e074af44b1acb7a469b62466d2","node":20418,"created":1535036011,"modified":1536095948,"fresh":1,"type":"a4794d6408d04576a7acdd10c3fd249d","children":{}}]}}