The Easton Episcopal Balanced Fund was created for the benefit of the Diocese and parishes and other entities of the Diocese of Easton. It is currently a moderate allocation (50-70% equity) mix of U.S. Equities, Foreign Equity, and Fixed Income. The investment positions for each of these classes are actively or passively managed index funds with low expenses. The performance of the Fund is measured against a benchmark of 52% total US stock market as represented by the Russell 3000 index, 13% foreign equity as represented by MSCI ACWI ex USA and a 35% fixed income allocation represented by Barclays Intermediate Credit Fund. The Board of Managers adjusts tactical targets for each of these classes based on market conditions. The fund is re-balanced quarterly. The Board also chooses the specific mutual funds or exchange traded funds to invest in these categories; these choices may also change over time.

The Board of Managers is guided in making these decisions by a Statement of Investment Policy adopted in 2023. As Vice Chair Chris Maxwell described in his Report to the Convention for 2020, the current approach has evolved over time. Initially, the fund was managed by outside advisors. However, after it became evident that advisors were unable to meet their own projected performance, the Board elected to pursue the current indexing approach, making only the basic tactical decisions as outlined above. As a result, performance improved; for the past five years, the fund has consistently ranked in the top third or better of Morningstar’s universe of 900 moderately allocated funds. Additionally, costs dropped dramatically. No Board of Managers member or Investment Advisory Board member receives any recompense for their service. The fund does employ an advisor, Osprey Capital Management, for day to day operations and periodic reporting, and a investment services firm, Mutual Shareholder Services, to manage the individual accounts. The custodian for the fund is Fidelity Investments.

Performance has been excellent and we have seen regular growth in assets under management to more than $34M. There are over 200 accounts for parishes, the Diocese, and related entities participating in the fund.

For recent information on allocations and returns, please visit Fund Performance Updates page.

From the Report to Convention

We believe that performance should be measured using a rolling three-year calculation, which offers a more accurate measure over time than one short-term uptick or downturn. Using this calculation, our rankings were quite low in our beginning years when our assets were managed by outside advisors. March 2013 was the end of the first three-year period for the Easton Episcopal Funds. Unfortunately, each of our outside managers failed to meet either the Board’s clearly expressed expectations or their own performance projections. Since none were able to meet their targets, we ended contracts with outside managers in 2013, 2015, and 2016.

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Ranking by Morningstar

The Easton Episcopal Fund ranks in the top third among peers. The ranking is based on its 3- and 5-year annualized returns when compared with Morningstar “Moderate Allocation” Funds, a universe of approximately 900 funds with a 50%-70% equity allocation is… (Click title to read more)

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Historical Quarterly Performance vs Benchmark

The chart below compares the fund return against our benchmark for each quarter since inception. The column on the far right shows the calendar year (or YTD) return. After the change to internal management in 2016, the Fund performance has exceeded the benchmark 60% of the periods. (Click title to read more)

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BOM Investment Policy

The Easton Episcopal Balanced Fund shall be invested with the objective of maintaining the real value of the principal of the fund over time, while supporting the needs of the diocese and parishes. The performance of this fund, after all fees, is targeted to meet or exceed the benchmarks described later in this document overtime periods of at least three years. All investments will conform to the prudency standards of Maryland law.

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