The Episcopal Church Foundation in West Texas

Investment Program

Q UARTERLY R EPORT
December 31, 2023

MARKET REPORT

The final quarter of 2023 enjoyed a Christmas rally that reversed the narrative of the third
quarter. Both stock and bond markets achieved strong gains, with the US stock market gaining
over 12%. For the year, the market was up 26%. The domestic bond market achieved gains of
6.8% for the quarter and 5.5% for the year.

As shown below, small cap stocks outperformed large and the growth style outperformed
the value style in large cap whereas small cap value outperformed growth. International stocks
performed well, with a gain of 10.5%, although foreign stocks continued to lag domestic stocks.

“Higher for longer” was the mantra for interest rates last quarter, but this quarter interest
rates declined and bond returns were positive. Bond returns move in the opposite direction of
interest rates. The bond market is now expecting a series of Fed rate cuts in 2024.

MARKET RETURNS FOR QUARTER

15.3%
14.2%
12.8%

10.5%
9.5%

6.8%

2.6%

Large Cap Large Cap Small Cap Small Cap International Short Term Intermediate
Growth Value Growth Value Stocks Bonds Bonds
MODEL PORTFOLIO REVIEW

The Foundation’s model portfolios achieved gains ranging from 2.9% for Capital
Maintenance to 10% for Growth. Relative performance for the quarter and for the year was
positive compared to peer groups and benchmarks.

Details of the performance of the four models are shown below.

ASSET CLASS INVESTMENT RESULTS

The Foundation’s performance for the quarter for the three asset classes in which it
invests, along with comparative peer group and benchmark returns, are shown in the following
table. Weighted consolidated performance of all asset classes is also shown.

Peer
Asset Class Return Benchmark
Group
Common Stocks 12.2% 11.5% 11.8%
Fixed Income 5.5% 4.8% 4.6%
Cash Equivalents 1.3 1.3 1.3%
Consolidated 9.4% 8.7% 8.8%

ACCOUNT STATUS

Foundation assets at quarter-end totaled $125 million, an increase of $9.4 million during
the quarter. Investment gains totaled $10.8 million or 9.4%.

At December 31st, the Foundation’s accounts were owned as follows:

Ownership Amount
Churches/Schools $ 82.8 million
Diocese/Foundation $ 42.2 million
 Model Portfolio Performance as of December 31, 2023*

Growth
3 Mo 1 Year 3 Years 5 Years

Portfolio Total Return 10.10 17.30 3.74 9.96

+/- Peer Group Composite 0.66 1.79 (0.86) 0.78
+/- Index Composite 0.34 0.51 (0.58) 0.17

Growth & Income

3 Mo 1 Year 3 Years 5 Years

Portfolio Total Return 8.40 14.50 3.06 8.22

+/- Peer Group Composite 0.67 1.51 (0.56) 0.72
+/- Index Composite 0.55 0.68 (0.88) (0.02)

Income
3 Mo 1 Year 3 Years 5 Years

Portfolio Total Return 7.00 11.80 2.55 6.60

+/- Peer Group Composite 0.63 1.20 (0.22) 0.70
+/- Index Composite 0.65 0.82 (0.40) 0.21

Capital Maintenance
3 Mo 1 Year 3 Years 5 Years

Portfolio Total Return 2.86 5.50 0.83 1.78

+/- Peer Group Composite 0.30 0.83 0.27 0.32
+/- Index Composite 0.37 0.50 0.02 0.14

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