The Episcopal Church Foundation in West Texas

Investment Program

September 30, 2017

Market Report

Good times continued to roll in the third quarter for most stock markets around the world.
The quarter ended on a four-day winning streak, with both the S&P 500 (large cap) and the
Russell 2000 (small cap) at record highs. International stocks also achieved impressive gains.
Year-to-date, domestic stocks have gained 14% and International 19%.

For the quarter, small cap stocks outperformed large cap stocks by 119 basis points and
the growth style outperformed the value style in both capitalization categories by significant
amounts.

Fixed income market performance was less robust than equities, but still positive.
Generally, bond prices increased modestly. US Treasuries sold off slightly at the end of the
quarter as the Fed announced it planned to begin selling some of its huge government bond
holdings.

Market Returns for Quarter

6.2%
5.9%
5.6%
5.1%

3.1%

0.9%
0.3%

Large Cap Large Cap Small Cap Small Cap International Short Term Intermediate
Growth Value Growth Value Stocks Bonds Bonds
Model Portfolio Review

All four of the Foundations investment strategies (represented by model portfolios)

achieved gains for the quarter. Performance relative to peer groups and to passive indices was
favorable for the quarter and generally favorable for the one-year period. Longer-term relative
performance is mixed.

Details of the performance of the four models are shown below.

Asset Class Investment Results

The Foundations performance this quarter for the three assets classes in which it invests,
along with comparative benchmark returns, are shown in the following table.

Asset Class Return Benchmark

Common Stocks 5.5% 4.6%
Fixed Income 1.1% 0.9%
Cash Equivalents 0.2% 0.2%

Account Status

Foundation assets at quarter-end totaled $65.9 million, an increase of $1.9 million during
the quarter. Investment gains were $2.4 million or 3.8%. Two new accounts were opened
during the quarter, with initial deposits of $850 thousand.

At September 30th, the Foundation had a total of 212 accounts as follows:

Ownership Number of Accounts Amount

Churches/Schools 156 $ 36.2 million
Diocese/Foundation 56 29.7 million
 Portfolio Performance as of September 30, 2017*

Growth
3 Mo 1 Yr 3 Yr 5 Yr

Portfolio Total Return 4.16 13.63 5.93 8.35

+/- Peer Group Composite 0.52 0.93 (0.64) (0.24)
+/- Index Composite 0.42 (0.11) (1.70) (1.08)

Growth & Income

3 Mo 1 Yr 3 Yr 5 Yr

Portfolio Total Return 3.21 10.50 5.36 7.03

+/- Peer Group Composite 0.46 0.82 (0.16) 0.07
+/- Index Composite 0.42 0.51 (1.23) (0.71)

Income
3 Mo 1 Yr 3 Yr 5 Yr

Portfolio Total Return 2.50 7.95 4.74 5.62

+/- Peer Group Composite 0.45 1.00 0.29 0.25
+/- Index Composite 0.47 1.03 (0.49) (0.26)

Capital Maintenance
3 Mo 1 Yr 3 Yr 5 Yr

Portfolio Total Return 0.37 0.68 0.93 0.80

+/- Peer Group Composite 0.02 0.05 0.15 0.13
+/- Index Composite 0.01 0.14 0.11 0.16

* Returns for greater than one year are annualized. Past performance does not guarantee future
results.