NOTE: Please see the market performance page for the Select Series and the Build-Your-Own series funds for a longer-term view of these market indexes (performance benchmarks), as well as current ELCA fund performance.
Posted April 8, 2013 for March
Russell 3000 Stock Index
Dow Jones U.S. Completion Total Stock Market Index
U.S. equity markets were up again in March, continuing to build on their strong performance in 2012. While the Gross Domestic Product (GDP) for the fourth quarter was only slightly positive, economic activity and employment data suggest a return to moderate economic growth in recent months, but the unemployment rate remains elevated. For the month, U.S. stocks were up 3.9%, while non-U.S. stocks were up 0.4%. U.S. small- and mid-cap stocks rose 4.7%, and U.S. large-cap stocks were up 3.8% during the month. Technology stocks were up, rising 3.5%. Investment grade bonds and high yield bonds posted returns up 0.1 % and up 1.1 % respectively.
Other relevant data released in March:
GDP GrowthThe final release of real GDP growth for the fourth quarter showed a 0.4% growth rate compared to real GDP growth of 3.1% last quarter. Year-over-year, real GDP was 1.7%, compared to 2.6% the previous quarter. Real consumer spending rose 1.8% during the quarter compared to 1.6% a quarter ago. Real domestic final sales for the quarter were up 1.5% compared to 1.9% a quarter ago. While 0.4% real GDP may be a disconcerting number, it masked better underlying performance of the economy.
Federal Funds RateOn December 16, 2008, the Federal Open Market Committee (FOMC) lowered the Fed Funds rate target from 1.0%, to a target range of 0.0% to 0.25%, and at all meetings through March of 2013, this target has been maintained. The FOMC anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2% longer-run goal, and longer-term inflation expectations continue to be well anchored.
Commentary at the March meeting included the following: “Information received since the Federal Open Market Committee met in January suggests a return to moderate economic growth following a pause late last year. Labor market conditions have shown signs of improvement in recent months, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy has become somewhat more restrictive. Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2% objective. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”
Core Consumer Price IndexCore Consumer Price Index (CPI) prices were up 0.2% in February, compared to 0.3% the month before. The year-over-year core CPI inflation rate was 2.0% in February, compared to 1.9% the month before. Overall CPI prices were up 0.7% in February, compared to flat (0.0%) the month before. Energy prices were up 5.4%, and food prices were up 0.1%. The year-over-year overall inflation rate was 2.0%, compared to 1.6% the month before.
Unemployment DataInitial jobless claims increased to 357,000 in the week ending March 23rd. The four-week average of claims rose 2,000 to 343,000. The unemployment rate of 7.7% in February was down from 7.9% the month before. Since January 2008, the unemployment rate has risen from 5.0% to 7.7% currently, and was as high as 10.0% in October 2009.
Housing ActivityThe absolute level of housing activity remains somewhat subdued, but the housing sector has shown further signs of improvement thanks in part to affordable prices and very low mortgage rates. New home sales fell 4.6% in February, after increasing 13.1% the month before, but sales remain weak by historical standards. Housing starts increased 0.8% in February after decreasing 7.3% the month before, but single-family starts remain at low levels. Total existing home sales were up slightly in February, rising 0.8%, after increasing 0.8% the month before. The median resale price of all homes was up 11.6% from a year ago, compared to up 10.3% the month before, and is the twelfth consecutive monthly increase.
Consumer Confidence IndexThe Conference Board’s measure of consumer confidence dropped to 59.7 in March from 68.0 the month before. Although the index is still fairly low in absolute terms, it’s well above the all-time low of 25.3 in February of 2009.
Retail SalesOverall retail sales were up 1.1% in February, compared to up 0.2% the month before. Sales excluding autos were up 1.0% compared to up 0.4% the month before. Given the headwind from higher taxes the sales increase may be seen as a modestly encouraging sign of resilience early in 2013.
About our plans
Portico Benefit Services maintains the following plans: ELCA Retirement Plan, ELCA Disability Benefits Plan, ELCA Survivor Benefits Plan, ELCA Health Benefits Plan (which includes the ELCA post-retirement medical benefits obligation) and ELCA Flexible Benefits Plan. We also maintain three group retirement plans for ELCA-affiliated social ministry organizations — the ELCA Master Institutional Retirement Plan, the ELCA Retirement Plan for The Evangelical Lutheran Good Samaritan Society and the ELCA 457(b) Deferred Compensation Plan. The assets of each plan are held in various trusts and therefore do not allow one plan to fund a shortfall of another plan. Portico Benefit Services’ plans are not subject to the Employee Retirement Income Security Act (ERISA). The health, disability and survivor plans are self-insured and are not protected through any type of insurance program. Our ability to pay claims is dependent on continued contributions and market performance. We reserve the right to change any of the terms of the plans at any time through the amendment or termination process described in each plan’s summary plan description.
About our funds
You should carefully consider the target asset allocations, investment objectives, risks, charges and expenses of any fund before investing in it. All funds are subject to risk. Past performance cannot be used to predict future performance. Portico Benefit Services’ funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fund assets are invested in multiple sectors of the market. Some sectors, as well as the funds, may perform below expectations and lose money over short or extended periods. See "Your guide to investing for retirement & Investment fund descriptions" for more information about our funds.
Neither Portico Benefit Services nor its funds are subject to registration, regulation or reporting under the Investment Company Act of 1940, the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 or state securities laws. Participants, therefore, will not be afforded the protections of those provisions of those laws and related regulations.