Combined Investment Fund and Investment Committee - Community Foundation National Capital Region

STEWARDSHIP

When your clients invest in The Community Foundation, you can be sure that their philanthropic dollars will be managed by experts in the field.

What's more, your clients receive the added value of access to our staff's in-depth knowledge of community issues and area nonprofit organizations.

For clients who care about "giving back," The Community Foundation is their best choice.

Combined Investment Fund and Investment Committee

Our Goal

The Investment Committee feels that grants to be made in the future are as
important as grants made today. This is consistent with the philosophy that
this Foundation is to exist in perpetuity, and therefore, should provide for grant
making in perpetuity. To attain this goal, the overriding objective of this Found-
ation is to maintain purchasing power. That is, net of fees, the objective is to
grow the aggregate porfolio value at the rate of inflation +5%.

The Combined Investment Fund has assets of over $65 million and is a pooled
fund of the assets of many of the four community foundations’ component funds.
At December 31, 2008, the allocation of the Combined Investment fund was as
follows:

Fixed Income Equities    37.78%

Southeastern Asset Management 9.93% (large cap value)

Russell 1000 growth Index 11.64% (large cap growth)

Mid Cap Value Index 5.66% (mid cap value)

Thompson Siegel 6.91% (small cap value)

Delaware Capital Management 8.62% (International equities)

NWQ 9.60% (International equities)

UBP Asset Management
9.86% (Fund of Funds
          alternative investment)

The combined investment fund was down 27.35% for the year. 2008 saw the largest single year decline in the US stock market since 1931. (S&P 500 down 37.0%, Dow Jones down 31.9%, Russell 2000 down 33.8%). Simultaneous recessions hit in Europe and Japan. (MSCI EAFE down 45.1%) The Investment Committee has increased the Fixed Income position of the portfolio at this time by choosing not to rebalance at year end. The main reason behind this decision is the undervaluation of many of the corporate bonds in the hold to maturity portfolio and their unwillingness to hold a fire sale on these bonds at this time. Additionally, because of recent underperformance the Investment Committee has decided to remove assets from Southeastern Asset Management over the next 10 quarters and replace them with the Russell 1000 Value index.

Combined Investment Fund Returns --- September 30, 2008 - December 31, 2008

Fund Manager

Return

Index Comparison

Index Return

Russell 1000 Growth Index

UBP Asset Mgt

-23.68%

-19.81%

R1000G

HFRI Fund of Funds

-22.84%

-9.29%

Southeast. Asset Mgt

Thompson Siegel

Mid Cap Value Index

-34.70%

-24.04%

-26.54%

R1000V

R2000V

Russell Mid Cap Idx

-22.19%

-24.88%

-26.33%

NWQ

Delaware Capital Mgt

- 8.65%

-15.34%

EAFE

-20.30%

Fixed Income

Combined Fund Total

0.30%

-15.19%

LBGC

S&P 500

Policy Index

4.60%

-21.95%

-12.13%

Combined Investment Fund Returns --- July 1, 2008 – September 30, 2008

Fund Manager

Return

Index Comparison

Index Return

Russell 1000 Growth Index

UBP Asset Mgt

-11.44%

-2.68%

R1000G

HFRI Fund of Funds

-12.33%

-6.78%

Southeast. Asset Mgt

Thompson Siegel

Mid Cap Value Index

-17.50%

-5.52%

-13.57%

R1000V

R2000V

Russell Mid Cap Idx

-6.11%

4.96%

-17.75%

NWQ

Delaware Capital Mgt

-18.19%

-15.00%

EAFE

-20.50%

Fixed Income

Combined Fund Total

-6.29%

-10.57%

LBGC

Policy Index

-1.64%

-5.70%

Combined Investment Fund Returns --- April 1, 2008 – June 30, 2008

Fund Manager

Return

Index Comparison

Index Return

Russell 1000 Growth Index

UBP Asset Mgt

2.39%

-0.54%

R1000G

HFRI Fund of Funds

1.25%

-0.96%

Southeast. Asset Mgt

Thompson Siegel

2.39%

5.40%

R1000V

R2000V

-5.31%

-3.55%

NWQ

Delaware Capital Mgt

1.41%

-1.68%

EAFE

-1.93%

Fixed Income

Combined Fund Total

0.58%

1.36%

LBGC

Policy Index

-1.51%

-2.24%

Combined Investment Fund Returns --- January 1, 2008 – March 31, 2008

Fund Manager

Return

Index Comparison

Index Return

Russell 1000 Growth Index

UBP Asset Mgt

-10.28%

-2.95%

R1000G

HFRI Fund of Funds

-10.20%

-4.76%

Southeast. Asset Mgt

Thompson Siegel

-8.40%

-9.03%

R1000V

R2000V

-8.70%

-9.90%

NWQ

Delaware Capital Mgt

-3.97%

-9.27%

EAFE

-8.90%

Fixed Income

Combined Fund Total

-0.52%

-5.50%

LBGC

Policy Index

-0.20%

-5.72%

Year	CFNCR Total	60% S&P 500/40% Lehman Gov/Corp
2007	5.34%	6.18%
2006	12.67%	11.03%
2005	3.97%	4.96%
2004	6.68%	7.23%
2003	17.59%	17.70%
2002	-6.10%	-9.61%
2001	6.37%	-3.53%
2000	11.58%	-0.72%
1999	2.20%	10.84%