For the year end 2021, the balance in AHCC’s investment portfolio was $21.7M.
In 2021, the economy continued to recover. And given accommodative fiscal and monetary policies, initially put in place to help blunt the shock of the pandemic, equity markets posted strong returns. For the year ended 2021, the S&P 500 returned 28.7%. Yet with investors’ desire to own riskier assets, returns for traditional “safe havens” lagged. The Barclays U.S. Aggregate posted returns of -1.5% for the year.
AHCC’s portfolio returned 15.2% for the calendar year end 2021, ahead of the benchmark by 160 basis points (bps). AHCC’s endowment was able to best its benchmark due to allocations to small cap stocks, U.S. corporate bonds and real estate.
When assessing future returns, the Investment Subcommittee expressed concerns about inflation and potential actions by the Federal Reserve. With the expectation that the Fed would take steps to raise rates, the Investment Subcommittee lowered, not eliminated, the allocation to fixed income. We also established two new positions in real assets, an asset class which tends to offer more consistent performance in inflationary environments.
Finally, recall that each year a sustainable draw is taken from the endowment to support the operating budget of the church. In 2021, this was 5% of the average balance over the previous 20 quarters. For an introduction and overview, members can access a replay of November’s presentation on AHCC’s endowment on the Member Portal.
Chair, Investment Subcommittee