Investment Report

As of June 30, 2017

Tony MestresI am pleased to share the continuing positive results from Seattle Foundation’s philanthropic investment funds during the second quarter of 2017. Our judicious stewardship of assets is central to our value as a philanthropic partner. We recognize the importance of providing investment choices that support the lifetime and legacy philanthropy goals of our partners and the performance of these funds to date in 2017 has been favorable.  

Here in the US, we have benefited from the continuing combination of strong employment growth (with unemployment reaching 4.3%, its lowest level since 2001) and a strong housing market, with the commodities market representing the major economic weakness. Europe saw continued economic growth in manufacturing, consumer confidence and spending, leading to a year-over-year growth rate which exceeds the United States’. Japan’s economy also improved, as domestic demand and exports continued to strengthen.

These factors positively impacted our investment returns. The Balanced Pool maintains a diversified portfolio that includes exposure to multiple equity markets, as well as more conservative asset classes such as US Fixed Income, leading to a gain of 3.3 percent on the quarter and 14.4 percent for the past 12 months. As noted in past reports, we continue to highlight execution of the strategy as the Balanced Pool outperforms its target benchmark 70-110 bps (net of fees), over the latest three, five and seven years. Much of this success is attributable to active management in the equity space, as well as strong performance in alternative asset classes. (In the bar graphs below, blue represents Seattle Foundation performance against green custom benchmarks.)

Balanced pool performance graphs

Our Socially Responsible Pool, designed to meet environmental, social, and governance objectives while also providing competitive economic returns, lost 1.5% for the quarter. While this was in large part a pull back after a strong 2016, the one-year return for the SR pool is 23.5%, well above target benchmark.

Socially responsible pool graphs

Our Intermediate Pool, designed for donors with a three to seven year grantmaking horizon, gained 1.6 percent this quarter and 3.5 percent year-to-date. The Short-Term Pool gained an additional 0.2 percent on the quarter, bringing year-to-date return to 0.4 percent.  Intermediate Pool performance graph

Short term pool performance graph

Lastly, we report on two pools that were added in 2016: an Index Pool, which is all passive, gained 4.0 percent this quarter and is up 10.3 percent over the past year while our Growth Pool, which holds more than 80 percent of the portfolio in equities, gained 3.6 percent this quarter.

Index pool performance graphs Growth pool performance graphs

This fall, Seattle Foundation is launching a campaign to raise support for our work to create greater equity and opportunity in our community. Central to this campaign is Seattle Foundation’s Community Investment Portfolio, which offers three major areas to which donors can make philanthropic investments to support community impact: Civic Leadership Fund, Center for Community Partnerships and Healthy Community Funds. From providing operating funds to leveraging grant dollars, your philanthropic support can drive positive change in all areas of community life and we look forward to sharing this campaign with you at events this fall, or you can contact your Philanthropic Advisor to learn more.

We are thankful for the opportunity to support you in creating powerful, rewarding philanthropy to make Greater Seattle a stronger, more vibrant community for all. I welcome your questions and comments about Seattle Foundation’s investment performance and judicious stewardship of assets, a cornerstone of our partnership with you and our more than 70-year commitment to this community.

Sincerely,

Tony Mestres' signature




Tony Mestres
, President & CEO

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