Fiscal Year Investment Portfolio Update

Financial markets, especially within most equity area, continue to perform nicely. November results evidenced a continuing rebound to the economy with housing and manufacturing activity indicating important new found strength and unemployment and domestic output continuing to show gains. Hopes for Congress finally demonstrating some leadership on the budget front and reduced anxiety over the economic impact of the Federal Reserve’s possible backing off its “easy” monetary policy have helped to reassure markets.
Domestic stocks, especially small and midcap securities posted strong gains last month, the small cap index, the Russell 2000, was up another 4%, while the major broader domestic indices climbed just over 3%. Non US markets were fractionally higher.

For the third month in a row, global equities far outdistanced bonds and commodities such as precious metals, agriculture and real estate. Interest rates spiked higher in November anticipating an improving economic picture with the 10-Year Treasury bond brushing 2.75%. Higher yields translate into low bond prices with bond markets lower. An exception were high-yield (non-investment grade)debt securities that bumped up 0.5%.

For the fiscal year, the portfolio is ahead by over 10%, with seven months remaining. Obviously anything can happen, but this is well ahead of last year at this point. Assets stand at approximately $990 million and have improved by approximately $60 million since June 30. One of the portfolio’s consistently strong performers, small cap value manager, Dimensional Advisors was up 5% in November and calendar year to date has added nearly 40%.