MEETING OUR GOALS for Our Shareholders
October 31, 2021
To Our Shareholders
The Easton Episcopal Balanced Fund was designed to sustain our investors through all kinds of markets while continuing to provide a return greater than our recommended Constant Rate of Return, (the recommended annual draw rate), currently 5.25%. It was also designed to do better than the vast majority of moderate allocation mutual funds, a Morningstar-tracked universe of more than 900 comparable funds, which normally have an equity exposure between 50% and 70%. Additionally, we have set an aspiration of being in the top 33% of this Morningstar-tracked universe of funds and classes over all rolling three-year time periods.
When looking at a fund like Easton Episcopal Balanced Fund, which is designed to produce a return over the very long term, performance cannot be judged by looking at any one relatively short time span, whether it is one month, one year or one three-year time period. A better measure of on-going performance comes when you look at multiple time periods.
Since the fund started on March 31, 2010 there have been 104 rolling three-year time periods with the first being March 31, 2010 to March 31, 2013 and the most recent being September 30, 2018 to September 2021. The Constant Rate of Return recommendation by the Board of Managers is based on the expected returns of bonds and stocks over the next three-to-five years, taking into account our asset mix between stocks and bonds.
Over the last three years (through October 14, 2021), the fund returned 13.73%, assuming the reinvestment of dividends. The Constant Rate of Return varied over that period between 4.75% and 5.25%. Our goal is to generate greater return than our Constant Rate of Return over rolling three-year time periods, which will also enable the fund to grow. In 100 of the 104 three-year periods we succeeded. Our average 3-year return since inception is 8.25%.
In the early days of the fund, our ranking was pulled down by the underperformance of our outside investment advisors. But as we gradually internalized our portfolio management, our rankings dramatically improved. Our more recent performance, relative to other funds with the same goals, puts us in the 17th percentile, while understanding that absolute returns are very important to all of our shareholders.
We are very pleased to report to our shareholders that we have delivered on our primary objective of earning more than our Constant Rate of Return and achieved our secondary objective of being in the top rankings of the relevant universe.
Investing is a journey, not a destination, and our intent is to make that journey as profitable as possible without taking on too much risk. We thank you for your support and confidence.
Chris Maxwell, Vice Chair
EASTON EPISCOPAL FUNDS
314 North Street
Easton, MD 21601-3684