Market commentary and investment performance | First quarter (January – March 2023)

What we saw in the last quarter: The first quarter of 2023 brought positive returns for many fixed income and equity indices despite additional rate hikes from the Federal Reserve which remained committed to taming inflation through rate hikes and tightening financial conditions.

Inflation remained high even as it cooled to 6.0% year-over-year in February, a decline from the June 2022 peak of 9.1%. Since this was well above the Fed’s 2.0% inflation target, they continued to raise interest rates. Combined with tighter lending standards from banks, this caused an overall constriction of financial conditions, which threatens to slow economic activity. 

Looking forward: Markets will digest a host of mixed signals for the foreseeable future – the likely end of fiscal tightening by the Fed, the prospect of an economic or profits recession, delayed effects of lending and credit tightening, and earnings pressures from higher input and borrowing costs.  

Most widely used leading economic indicators are pointing to an economic slowdown in 2023, despite a resilient labor market. History indicates markets tend to struggle after a Fed interest rate pause induced by a recession, and the environment favors companies and industries with the ability to generate strong cash flow.  

NCCF investment performance: Positive returns were a welcome relief from the bear market conditions of 2022. NCCF managers achieved positive returns for the quarter in the range of 4.0% to 6.0%. On a rolling one-year basis, the NCCF Investment Fund outperformed the Broad 70/30 benchmark returning -6.2% to -6.4%, respectively.  

On the quarter, the NCCF Investment Fund returned 4.4%, trailing the Broad Benchmark return of 6.0%. Almost all asset classes surprised with a strong recovery and the Broad Benchmark performed particularly well due to a higher allocation of international developed equities.  

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.  

Looking at returns from all NCCF investment managers over the last decade, returns are up 6.3%.

Additional market commentaryis available from NCCF’s investment advisor, Graystone Morgan Stanley. For investment information specific to your fund, please contact your NCCF Donor Engagement Officeror send an email to 

1 year3 years5 years10 years
All Managers (Net Weighted)-6.4%11.2%5.1%6.3%
NCCF Investment Fund-6.2%11.1%4.8%5.7%
Other NCCF Managers (Average)-6.2%10.8%5.7%6.2%
Benchmark – Broad 70/30-6.4%9.8%5.4%6.2%
Benchmark – NCCF Blended Index-5.9%10.8%6.4%7.3%
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.