From the Investment Team: What we see in the markets

During a quarterly meeting on Tuesday, Feb. 13, the Foundation’s Investment Team reflected on our performance in 2023 and planned for the year ahead.

Below, Team Leader Steve Wilson and Chief Financial Officer Brad Crossley offer a brief commentary on the state of the financial markets. On behalf of the team, they would like to express gratitude for the faithfulness of our partners.

Looking back

With the Federal Reserve on an aggressive path of interest rate increases to quell inflation heading into 2023, economic pessimism was the dominant theme early in the year.  Once it became clear that the Fed had pivoted to a holding pattern, markets surged in the last few months to post robust gains for the year. The S&P 500 closed the year just shy of a record. Bond markets also sharply reversed course in the fourth quarter.

As is often the case, the markets looked forward — beyond the dim economic forecasts — to stamp their own narrative on the state of the economy.

Looking forward

While the outlook has improved, uncertainty over the impact of sharply higher rates casts a shadow on the economic picture. Conflicts overseas weigh heavily on investors’ minds. Here’s what we know: the economy is cyclical, and the long-term trend shows steady economic growth over time. Financial markets tend to mirror that path — albeit with sometimes long and often variable leads and lags.

This is why we emphasize the importance of maintaining a long-term focus, especially in those periods when the near-term forecast and recent market actions appear most dire.

What the Foundation offers

The Foundation offers four managed fund options with equities exposure, each with a different allocation of investments for varying goals and risk tolerance. The Income Only Fund is a fifth option, invested in cash alternatives and re-valued monthly. It is intended for funds clients may need in the short term.

All manner of client funds are under the Foundation’s management – including those related to reserves, buildings, pastoral housing, mission, cemeteries and endowments. The Investment Team, working with its investment consulting firm, Callan LLC, continues to diligently carry out the Foundation’s investment strategy.

We partner with the strongest investment managers we can find, and we are patient with them. We carefully investigate potential modifications to our strategy without making sudden moves. Many of our peers have shifted resources into alternative investments such as real estate and private equity. We avoided doing so because of the illiquidity.

Our strategy has produced solid results. The long-term performance of the Diversified Fund continues to be strong with a trailing 10-year return of 7.44% (net of manager fees) as of Dec. 31, 2023. This return outperformed the fund’s benchmark, and the performance ranked in the top quartile among peers of similar Endowments and Foundations.

With God’s grace and the trust of partners like you, the Foundation makes a positive difference in the lives of those we serve. We remain committed to the highest level of excellence in all the services we provide to support your ministry.

Steve Wilson                                                        Brad Crossley
Investment Team Leader                                 Chief Financial Officer

Stories you may be interested in

Foundation welcomes new staff members to the team

Candace Williams, Caroline Wood and Jan Umbarger have joined the Foundation staff.


Church economics are changing fast. Here’s how to adapt.

Learn how generational giving patterns are changing -- and why conversations around money and property should change, too.


Welcome, SEJ Association of United Methodist Foundations

The Foundation will host the 2024 Meeting of the Southeastern Jurisdiction of United Methodist Foundations April 21-23, 2024.