Investment Performance
Q2 2025 Report
Thank you for choosing Seattle Foundation as your partner in philanthropy. We know that you share our commitment to creating a region of shared prosperity, belonging, and justice. We appreciate your confidence in us to manage your assets in service of a greater goal: fostering a community where everyone can thrive. We are pleased to share these results from Q2 and we welcome any questions or feedback
Market Conditions
The S&P 500 and NASDAQ reached record highs despite challenges including the U.S. credit downgrade, Middle East conflict, and trade uncertainties. The S&P 500 jumped nearly 19% from its April low, while some developed markets outperformed the U.S. thanks to a weaker dollar. Both developed and emerging markets posted strong returns, with emerging markets rebounding over the past year due to increased capital flows and a softer U.S. dollar.
Investment-Grade Corporate Bonds experienced relative stability during the second quarter, despite market fluctuations influenced by geopolitical events and changes in U.S. trade policies. There was increased demand for higher-quality bonds, which performed better due to a slight decrease in Treasury yields and risk-averse investor behavior.
During the second quarter of 2025, the U.S. economy exhibited resilience in the face of increased geopolitical tensions and evolving trade policies. Inflationary pressures moderated somewhat, and unemployment held steady, underscoring continued strength in fundamental economic indicators.
Achieving returns that advance a mission requires navigating persistent uncertainty and complexity. Effective strategies include maintaining diversification, adhering to valuation discipline, and applying independent analysis—especially during pivotal periods when prevailing consensus may not accurately reflect objective reality.
Portfolios
The Balanced Pool is the Seattle Foundation’s primary investment pool and is actively managed to deliver returns at 5% plus CPI over a long-term horizon. It maintains a diversified portfolio that includes exposure to global equity markets, alternative investments, and more conservative asset classes such as U.S. Fixed Income. Over the last 10 years, the Balanced Pool has gained 7.3% per annum. The Pool returned 8.0% in the second quarter and registered a 13.1% gain in the last 12 months. The portfolio’s forward returns tend to be highly correlated to complexity of an investment climate—greater challenges translate to higher returns.
In addition to our Balanced Pool, we offer other investment options to meet our fundholders’ needs. Our Socially Responsible Pool, designed to meet ESG (Environmental, Social, and Governance) requirements while also providing competitive economic returns, returned 4.8% for the quarter. Our Intermediate-Term Pool, designed to meet the expectations of donors with a grantmaking horizon in the 2-7-year range, returned 3.9% for the quarter. The Foundation also manages a Short-Term Pool for donors with very short grantmaking horizons. This pool, intended to preserve capital as best as possible, returned 1.2% for the quarter. Lastly, the Foundation offers an Index Pool, which is all passive, and a Growth Pool. These pools returned 8.4% and 6.7% in the quarter, respectively.
We are thankful for the opportunity to support you in creating powerful, rewarding philanthropy to make King County a stronger, more vibrant community for all. We welcome your questions and comments about Seattle Foundation.
Sincerely,
Joseph Boateng
Chair of Investment Committee