How did the Hartford Foundation’s investments perform in 2017?

In spite of investor concerns that the new administration in Washington, Brexit negotiations between the UK and the European Union, and military concerns related to North Korea could lead to volatility in global equity and fixed income markets, 2017 proved to be a year marked by strong equity returns and lower, but positive returns for fixed income. Corporate profits were very strong, as companies have been the beneficiaries of historically low interest rates, stable labor costs and, in the case of the US, a falling dollar. In general, growth-oriented equities, both here and abroad outperformed their value counterparts. This represented a reversal of the patterns witnessed during 2016. Against this backdrop, the Foundation’s broadly-diversified Corporate portfolio posted an investment return of 17.2%, while the Trust portfolio returned 17.9%.

How does the investment performance help to provide grants to the community?

The Foundation’s spending policy and investment strategy are designed to work together to preserve the inflation-adjusted value of the portfolio over a long time horizon. The Hartford Foundation aims to achieve investment returns that preserve the long-term purchasing power of the endowment after grants and administrative expenses have been paid. We measure portfolio progress toward this goal by comparing it to the Consumer Price Index, a broad measure of inflation, plus 5%, the spending rate stipulated in our spending policy.

From September 1996, when systematic measurement of the Foundation’s investment returns commenced, through December 2017, the Corporate Portfolio has returned 7.8% per year, net of investment management fees. The Trust Portfolio produced a net annualized return of 7.4 % over that period. These returns compare with the aforementioned annual purchasing power goal of 7.5% over the same time frame.