Easton Episcopal Funds
Update from Osprey Capital Management
July 28, 2021
Following a good first quarter, our Fund returned another 6.31% through the end of June, bringing the year-to-date return up to 9.71%. The quarterly performance was almost 1% above the benchmark. Much of this out-performance was a result of having allowed the equity allocation to rise to about 73% of the portfolio, acknowledging the recent weak performance of bonds. Our equity portfolios performed very close to their individual benchmarks, and our fixed income portfolio of mostly corporate bonds returned 2.7%, much better than its benchmark at 0.98%, but still well below equity returns.
While the results are encouraging, the ride was not smooth during the past three months. Right after the end of April, the technology sector, the largest in the S&P, began to under-perform the market as a whole. This downtrend continued until mid-April, and finally again matched the S&P 500 in June. The chart shows the drama, comparing the performance of the technology SPDR, XLK to that of SPY, the S&P 500 ETF.
We continue to evaluate options to deal with the declining bond interest rates and the likely long-term under-performance of bonds. To mitigate this, we have allocated a small part of the fixed income portfolio to a ladder of bond funds with specific maturity dates, and another portion to high yield bonds, a position we will monitor over the next several quarters.
Read more portfolio updates on the Fund Performance Page.