| April 2005 | Volume 3, Issue 1 |
|
FUND UPDATEFoundation assets surpass $50 millionStrong fourth quarter caps productive 2004Boosted by a strong fourth quarter
market rally, the UNT
Foundation’s assets surpassed an
unprecedented $50 million in 2004.
This increase enables distributions to
429 scholarships, professorships, chairs
and other funds in 2005. |
The market surged ahead late in the
year after a disappointing third quarter,
thanks in part to a temporary leveling
of oil prices and slight improvement
in employment and wage figures,
the latter providing a strong base for
consumer spending.
The Foundation’s Growth Pool
return edged past its benchmark at
10.54 percent in the fourth quarter,
resulting in an 11.63 percent return
for 2004. Likewise, the Foundation’s
Growth and Income Pool surged to
7.5 percent, slightly outperforming the
benchmark. For the year, the Growth
and Income Pool showed a 9.51
percent return. Both pools exceeded
benchmarks for the year.
Market analysts were quick to
identify anomalies in market factors at
year’s end – stock values and interest
rates climbing simultaneously, for
example – and for the most part, agreed
that 2005 looked promising.
Investment Performance |
||
| Growth pool performance | Growth benchmarks | |
|---|---|---|
3/31/2004 |
3.43% |
3.5% |
6/30/2004 |
1.48% |
0.86% |
9/30/2004 |
-3.79% |
-1.59% |
12/31/2004 |
10.54% |
10.23% |
Over last year |
11.63% |
9.49% |
Last three years |
5.33% |
4.91% |
Last five years |
0.64% |
2.46% |
Investment Performance |
||
| Growth and Income pool performance | Growth and Income benchmarks | |
|---|---|---|
3/31/2004 |
2.72% |
2.15% |
6/30/2004 |
0.85% |
-0.35% |
9/30/2004 |
-1.66% |
-0.8% |
12/31/2004 |
7.5% |
7.13% |
Over last year |
9.51% |
14.6% |
Since inception (July 2003) |
14.6% |
13.78% |
“I don’t think that either higher
inflation or an increase in interest rates
will do a lot to dampen the economy,” Alfred Kugel, chief investment
strategist for Stein Roe Investment
Counsel, told the Wall Street Journal for its January 1 edition.
Indeed, financial forecasts were
mostly positive for the upcoming year,
based on the last quarter of 2004.
At year’s end, the Foundation’s net
assets were valued at $52.46 million,
including distributions and additional
contributions, and the market value
of its true endowments reached $33.4
million – both all-time highs.
The Journal reported in early
January that a Commonfund survey of
universities and foundations revealed
a four-year high in endowment returns
for the fiscal year ending midway
through 2004.
The survey showed an average gain
of 14.7 percent. Harvard University
showed a 17.5 percent return on its
endowments and the University of
Texas was at 18.7 percent. The UNT
Foundation’s Growth Pool posted a
22.7 percent return and the Growth and
Income Pool showed a 15.8 percent
return for the same period.
Change in U.S. market indexes (12-month periods ending Dec.31) |
|||||
| 12 months ending Dec 31 | 2000 | 2001 | 2002 | 2003 | 2004 |
| Dow Jones Industrial Average | 10,788.00 | 10,021.60 | 8,341.63 | 10,453.90 | 10,783.00 |
| S&P 500 | 1,320.28 | 1,148.08 | 879.82 | 1111.92 | 1,211.92 |
| Wilshire 5000 | 12,175.90 | 10,707.70 | 8,343.19 | 10,799.60 | 11,988.00 |
| NASDAQ | 2,470.52 | 1,950.40 | 1,335.51 | 2,003.37 | 2,175.00 |
Despite the bright outlook for
investments in 2005, analysts pointed
to several key economic factors that
could slow growth. Some of those
factors, like oil prices, are familiar to
those who watched the downturn in the
third quarter of 2004.
Chet Helck, president and chief operating officer for New York-based Raymond James Financial Inc., warned against unrealistic expectations among investors. In the company’s “Investment Briefings,” he pointed to an annual Securities Industry Association survey. In SIA’s 2001 survey, investors expected a return of 19 percent that year. The S&P 500 finished down more than 10 percent.
Dr. Scott Brown, chief economist for Raymond James, outlined factors that could sway market performance one way or the other. Among them and listed first: job growth and energy prices, which were both blamed in part for the downturn in 2004.
Though his long-term forecast was less cautious, he warned that growth could be slowed in the first half of 2005.
Website updated: April 25, 2005. Website comments or corrections: rsimmans@unt.edu