2024 first quarter | Market commentary and investment performance (January – March)

What we saw: Stocks continued a strong positive trajectory in the first quarter fueled by (perhaps unrealistic) optimism for future interest rate cuts from the Fed and other central banks. Global markets and indexes are hitting record highs, led by the strong performance of US equities. Ten of the 11 sectors of the S&P 500 posted gains. Portions of the fixed income market experienced mild negative performance during the first quarter as short-term rates remained elevated and moderate-length yields rose, a sign that segments of the market are beginning to price in fewer Fed rate cuts. Most leading economic indicators released during the first quarter were positive and point to a stable economy, but also a longer period of elevated inflation than most prognosticators expected. Strong labor market data, including a positive jobs report and low unemployment rate, suggests a robust economy that continues to defy expectations of an imminent recession. This increases the likelihood that rate cuts may be fewer than anticipated in 2024. 

Looking forward: Most analysts expect a positive year for equities but with continued bouts of above average volatility. The chance the Fed will aggressively cut interest rates decreased due to strong economic projections. Yet the case for optimism persists as company profit margins and earnings remain healthy in the face of rising costs. Futures contracts have shifted from expecting six rate cuts down to three rate cuts in 2024. Diversification remains critical. While it is impossible to predict future returns, spreading investments across different markets and sectors is an effective risk mitigation strategy. 

NCCF investment performance: Investment results continued the positive momentum from the previous quarter. Most NCCF managers posted 5-7% gains for the quarter and 14-22% on a rolling one-year basis range. The NCCF Investment Fund trailed the Broad 70/30 benchmark for the rolling one-year measure, returning 14.8% and 16.5% respectively. On the quarter, the NCCF Investment Fund returned 5.3%. 

NCCF’s investment objective and approach: Prudent investment stewardship is essential to our mission of building long-term charitable assets for the benefit of our communities. Our primary investment objective is to preserve and protect historical endowment contributions over an indefinite time frame, while providing an average return that covers a 5% annual distribution, average 1% NCCF support fee and inflation.  

More market commentary is available from NCCF’s investment advisor, Graystone Morgan Stanley. For investment information specific to your fund, please contact your Donor Engagement Officer or email support@nccommunityfoundation.org

 1 year3 years5 years10 years
All Managers (Net Weighted)16.5%3.8%7.7%6.7%
NCCF Investment Fund14.8%3.4%7.3%6.1%
Other NCCF Managers (Average)17.0%5.0%8.5%6.9%
Benchmark – Broad 70/3016.5%4.2%7.9%6.7%
Benchmark – NCCF Blended Index16.8%4.7%8.6%7.6%
Notes: Multi-year percentages are annualized. Returns are net of investment fees. 

Benchmark – Broad: This benchmark is a general approach to investment. 70% of the MSCI All Country World Equity Index and 30% of the Bloomberg Barclays Aggregate Bond Index.  

Benchmark – Blended: This benchmark takes a more diversified approach to investment. 35% R1000, 15% Russell Midcap, 5% R2000, 10% MSCI EAFE Net, 30% Barclays Govt/Credit Bond, 5% FTSE Treasury Bill 3 Month.