The Episcopal Church Foundation in West Texas Investment Program

QUARTERLY REPORT
June 30, 2013 Market Report In a dramatic reversal of investor sentiment, prices of both common stocks and bonds declined sharply during the latter part of the second quarter. Apparently, this change was sparked by comments made in Congressional testimony by the Federal Reserve Chairman indicating the Fed may begin to scale back its monthly purchases of bonds. Nevertheless, common stocks, as measured by the Russell 3000 index, achieved a gain of 2.7% during the quarter. International equity markets lost -1.5%. Fixed income markets sustained significant losses across the maturity spectrum, with the Barclays Aggregate Bond index losing -2.3% for the quarter. As shown below, all capitalization sectors and all investment styles achieved gains for the quarter, although the gains were more modest than recent quarters. Small cap stocks outperformed large by about 40 basis points. In the large cap category, the value style beat the growth style, whereas in the small cap category the growth style outperformed the value style by 127 basis points.

Market Returns for Quarter

3.7% 2.5%

3.2% 2.1%

-0.1% -1.6% -2.3%

Large Cap Growth

Large Cap Value

Small Cap Growth

Small Cap Value

International Stocks

Short Term Bonds

Intermediate Bonds

Model Portfolio Review Three of the Foundations four model portfolios sustained losses this quarter, ranging from a loss of -1.0% for Capital Maintenance to a gain of 0.4% for the Growth Model. The greater the allocation to fixed income in a model, the greater the loss for the quarter. Relative performance for the quarter was unfavorable with all of the four models underperforming their peer groups and composite indices. Relative performance beyond one year remains favorable. Details of the performance of the four models are shown below.

Asset Class Investment Results The Foundations performance this quarter for the three assets classes in which it invests, along with comparative benchmark returns, are shown in the following table.

Asset Class Common Stocks Fixed Income Cash Equivalents

Return 2.1% -3.6% 0.0%

Benchmark 2.7% -2.3% 0.0%

Account Status Total Foundation assets at quarter-end were $54.9 million, a decrease of $100 thousand during the quarter. Investment gains totaled $151 thousand or 0.3%. Four new church accounts were opened during the quarter, with initial balances of $338 thousand. At June 30th the Foundation had a total of 189 accounts as follows:

Ownership Churches/Schools Diocese

Number of Accounts 130 59

Amount 27.4 million 27.5 million

Portfolio Performance as of June 30, 2013*

Growth 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite 0.42 (0.37) (0.37) 1 Yr 11.18 (2.39) (2.56) 3 Yr 11.30 0.22 (0.57) 5 Yr 5.80 0.85 0.06

Growth & Income 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite (0.20) (0.48) (0.61) 1 Yr 8.34 (1.76) (1.77) 3 Yr 9.56 0.20 (0.38) 5 Yr 5.82 1.05 0.38

Income 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite (0.73) (0.49) (0.63) 1 Yr 6.24 (1.14) (0.87) 3 Yr 7.53 0.24 (0.02) 5 Yr 5.43 1.26 0.56

Capital Maintenance 3 Mo Portfolio Total Return +/- Peer Group Composite +/- Index Composite (1.00) (0.39) (0.56) 1 Yr 0.55 0.07 0.43 3 Yr 1.42 0.27 0.46 5 Yr 2.29 0.73 0.69

* Returns for one year and greater than one year are annualized. Past performance does not guarantee future results.