Vice Chair’s Report to 154th Convention

To our 29 participating Parishes and the Diocese of Easton


314 North Street    

Easton, MD 21601-3684

March 5. 2022

2021 ended 64 days ago, but it seems like an eternity. Last year’s investment results were great. Your Fund was up 15.5%, and for the last 3 years it was up more than 17% per year. Of the 500 Balanced Funds tracked by Morningstar, we were in the top 20%, a far cry from where we were a decade ago when our three-year return put us in the bottom 15%.

We achieved this success by making the fundamental decision to eliminate active managers and index our portfolios to our benchmarks. Carefully over a number of years, we eliminated all outside managers and simplified our process to make only high-level asset allocation decisions. The last outside manager left in 2017.

The Board now makes all asset allocation decisions with the outside input of Osprey Capital but be assured that the decisions are made by the Board.

We have set broad strategic bands for each asset class, and within those bands we have set tactical targets. Strategic bands are based on our long-term outlook for the financial markets. Tactical targets are more short-term-oriented, looking to the next one to three years.

We have selected well-known indices as independent performance indicators for each major asset class. The indices we use are shown on our website (in the monthly ‘Snapshot’ which is available through the featured slideshow on the Home page).


We have three primary goals. The first goal is to earn more than the Constant Rate of Return, (currently recommended at 5.25%), over most rolling 3-year periods.  We have succeeded in doing that in 103 out of the last 107 observation periods.

The second goal is to be in the top 33% of our competitive universe of more than 500 Balanced Mutual Funds. We have achieved that goal consistently over the last 61 measurement periods.

And the third goal is to generate returns close to or greater than our benchmarks.  At the end of last year, we had achieved that goal for the prior 1, 3, and 5 years, and were just about there for the last 10 years.


We were able to achieve these goals by substantially reducing our expenses. Our annual expense rate is 0.30% of assets, which is lower than 88% of Balanced Funds tracked by Morningstar.

Our total expenses were $87,000 last year. When we started in 2010, they were $150,000 while we had only $7 million in assets. This means that now, with $35 million in assets, expenses are only about half of what they were a decade ago. 


As you know all is not good in the capital markets today. In 2020, with the start of Covid, the stock market collapsed, falling 25% in 34 days. Fortunately, we recovered and went on to set new highs in assets and shareholder value. On December 29 last year the DJIA hit a high. Then for the next 65 days we saw more volatility than many of us have ever experienced. As of March 3, our fund was down more than 7% though the major stock market averages were down even more: 9%-11% through last night (March 4). The results are not pleasant, but not as devasting as during the Covid collapse.

Global developments, particularly the invasion of the Ukraine, are the most difficult variable to analyze. We believe that European economies, reflecting in part the sanctions imposed by Europe and the US, will result in slower European economic activity. Obviously, the world is on edge lest either the Russians or the Western Allies make a miscalculation. While deemed unlikely, the consequences of any miscalculation could be dramatic.

The current correction will end, but the timing is unknown. In a Federal Reserve effort to stem inflation interest rates will most likely increase, slowing economic activity. But corporate earnings growth should continue, although at a slower rate than in recent years. Significant sale of stocks is not warranted with the information we have now. When the upturn comes it may be substantial and without warning. Since it is hard to project turning points, maintaining a strong equity position in our portfolios is prudent.

We strongly encourage all shareholders and others interested in keeping up-to-date with developments at the Easton Episcopal Fund to visit our website, and Subscribe to receive emailed notice when updates are made to the website.

The success achieved by the Easton Episcopal Fund has not been an accident.  It was achieved with the collegial effort of dozens of engaged, extraordinary, enthusiastic, experienced professionals who have served over the last decade.  Today, we welcome our newest member, Diane Robinson from Christ Church, Cambridge. Diane is a Senior Vice President of Federated-Hermes, a $1.5 Trillion investment advisor headquartered in Pittsburgh PA. 

Diane joins Bill Shettle from St. Mary’s, Pocomoke City, Ray Munsch (Holy Trinity, Oxford) and myself (St. Paul’s Kent) as voting BOM members who have served directly in the investment management industry. This direct industry experience, along with the strong intellectual contribution and diocesan experience, brought by voting members Deb Dragone (St. Clements, Massey) and Ron Geesey (All Hallows, Snow Hill) make for a very strong and competent elected BOM.

Fred Welsh (Finance Chair; St. Paul’s, Kent), Charlie Bohn (Treasurer, Trinity Cathedral, Easton), and Nancy Robson (Board Secretary, Christ Church I.U. Worton) are vital and experienced contributors to our deliberative process and serve as appointed members of the Board.

Our Investment Advisory Board, chaired by Richard Wright from Old Trinity, Church Creek, Scott Sturgill (St. Andrews, Sudlersville), Myron Richardson, (St. Paul’s, Centerville), and Tom Mendenhall (Christ Church, St. Michaels) add to the institutional memory of the BOM. Richard, Myron, and Tom have all served on the BOM. Scott has recently joined and is the new President and CEO of Peoples Bank in Chestertown.

And Al Smith, our esteemed Vice Chair Emeritus from Holy Trinity, Oxford, helps guide this organization through the tribulations of an ever-changing environment and helps to keep us on track. 

Investment Management is a complex and highly specialized activity. We all wish to express our gratitude to Bishop San for his guidance and support of all that is needed to make for a successful investment organization.



W. Christopher Maxwell

Vice Chair, Board of Managers