Investment Report

Q2 2019 Investment Report

As of June 30, 2019

Kirstin-Sandaas 250 Kirstin Sandaas, Chief Financial and Operating Officer

The overall performance of the financial markets was optimistic in the second quarter of 2019, led by U.S. companies’ strong results and steady consumer and business confidence. We are pleased to share the quarter’s investment performance results, which show positive returns in each of Seattle Foundation’s investment offerings and support the continued generosity and community impact of our philanthropic partners.

The equity markets had impressive results, with the S&P 500 gaining 4.3% while Non-U.S. Equities (MSCI EAFE) gained 3.7%. Emerging equities (MSCI EM) were relatively flat during the quarter (+0.6%). While market data in both the United States and abroad have been solid, investors are growing concerned about future corporate earnings growth, manufacturing and consumer spending. Fear of extended trade wars with China and other global trade partners has triggered anxiety across the investment landscape.

Monetary authorities reacted to this uneasiness in the second quarter, including the U.S. Federal Reserve. Chairman Jerome Powell indicated the Fed would not raise rates again in 2019; in July, the Fed executed a rate cut. This change of course from just a few months ago, combined with recent increased tarrifs, has caused increased market volatility.

International markets saw positive growth. The European Union posted +0.4% growth in gross domestic product (GDP) while Japan's first quarter GDP gained 2.4%. But political turmoil and pressures from trade have kept these equity markets muted compared to the United States. Unrest continues in the United Kingdom while its Parliament attempts to leave the European Union as smoothly as possible. 

Looking to Seattle Foundation's investment returns, the Balanced Pool gained 11.2% year-to-date and 2.6% over the last 12 months (net of investment management fees). The Balanced Pool exceeds its target benchmark over the 3-, 5-, 7- and 10-year periods. Much of this success is attributable to active management in the equity space, as well as strong performance in alternative areas. Performance data about all our investment pools are shown in the accompanying charts.

Our community impact during the quarter can be measured by several major policy and budget achievements for our community partners during the Washington State Legislature’s 2019 session. Bringing change to systems that limit opportunity for marginalized people is a primary objective of many of our grantees. These include Civil Survival, which won passage of The New Hope Act, a bill to support formerly incarcerated individuals as they re-enter society. Statewide Poverty Action Network passed a slate of debt reform bills that provide consumers more equitable protections. Washington Census Alliance secured a $15 million budget commitment from the State Legislature to fund an accurate count of Washington residents in the upcoming census. And, Tenants Union of Washington helped ensure passage of eviction reform. Read about these changes and others on the Seattle Foundation blog.

We continue our focus on delivering meaningful educational and engagement opportunities for our partners. Recent events include a panel discussion on race and homelessness, a book-signing with Maya Sotoreo Ng (educator, author and sister of President Barack Obama) and a conversation with Governor Gary Locke about Census 2020.  These opportunities provide philanthropists insights to shape their giving and focus on issue areas Seattle Foundation prioritizes in our civic leadership and grantmaking.

Through our solid investment performance and our growing community impact, Seattle Foundation is igniting powerful, rewarding philanthropy to make Greater Seattle a stronger, more vibrant community for all. Thank you for your partnership in this mission. I welcome your questions and comments at any time and can be reached at 206.515.2105 or k.sandaas@seattlefoundation.org.

Sincerely,

 Kirstin Sandaas signature

 

Kirstin Sandaas, Chief Financial Operating Officer