Evanston Community Foundation

2010 Investment Results

The Foundation portfolio earned 13% in 2010, well ahead of our spending policy target and outperforming our blended benchmark index. Much of the year's gain was achieved in the third and fourth quarters as the financial markets continued to churn in 2010, reflecting the continuing impact of the economic downturn. Our better relative investment results were the product of both better selection and allocation decisions. The portfolio remains broadly diversified, consistent with our overall investment guidelines and reflective of the cautionary stance the committee is taking.

Our historical investment returns for the periods ending December 31, 2010 are as follows:

3 years -- 2.8%
5 years -- 5.8%
10 years -- 6.9%
20 years -- 9.4%

2009 Performance

The Foundation's investment portfolio rebounded from the decline of 2008 (which was only our third decline in 22 years), earning a return of 20.2%.

This portfolio performance exceeded our blended benchmark return of 19.2%. As in the past, the Foundation's investment returns over longer time horizons, which are more relevant to a portfolio like ours, compare favorably with both our benchmark indices and our peers. For the five and ten years (listed above), the Foundation returns were better than the median returns of other community foundations as reported by the Council on Foundations for the same periods and of our blended benchmark index (3.6% for both time frames). More importantly, it matched (virtually) or exceeded our rate of spending from our funds.

At this juncture, we view the global economy, and the markets by extension, with a wary eye. Accordingly, the investment committee has spread our asset allocation over a broad base. The committee believes the number of risks against which we have to protect is larger than usual. With our longer term perspective, we feel confident that growth opportunities will present themselves in due course and that our primary task in the interim is to protect capital to be able to take advantage of those opportunities when they finally appear.