Message from the Vice Chair, Jan. ’21

Despite Difficult Year, Fund Returns 15.58% in 2020

Chris Maxwell, Vice Chair, Board of Managers – January 21, 2021

Last year was difficult. The first six weeks of 2020 was business as usual, but by mid-February,
Covid-19 had begun to affect our lives, the economy and the stock market. Initially, we didn’t
know how severe the downturn would be or how long it would last. For 31 calendar days until
March 23, the stock market went down. The S&P 500 was down more than 33%, although your
fund was down 25%, a success of sorts.

Normally, the Board of Managers meets quarterly. With the collapse of markets, your Board
moved into overdrive, holding weekly meetings. By mid-March we had lost more than $7 million in
market value. Our equity had dropped to 57% from our target of 65%. Our portfolio returns
dropped from a respectable year-to-date (YTD) return of 3.14% in February 2020 to a negative
15.14% by March 27. As disappointing as these returns were, we still were ranked in the top half
of comparable funds.

We continually evaluated data and concluded that historic equity targets were still appropriate for
our fund. Accordingly, we committed additional money to the stock market. By early May we were
back to 65% in equity. Our research continued to support the primacy of stocks in our asset mix,
and throughout the spring quarter our equity exposure continued to grow with the rising market.
In June we raised our equity target to 68%, and in December we raised our equity target to 70%,
where it is today.

 One year annualized return 2020Three year annualized returns 2017-2020Five year annualized returns 2015-2020
Rank(2)Top 22%Top 22%Top 16%

These moves turned out to be well timed. Our YTD return improved from minus 15% in March to
plus 15.58% by December 31, 2020. This 36% increase from the March lows resulted in our
ranking in the top 22% among balanced funds.