Investment Committee Report - Year End 2023

2023 was less volatile for the COLEG portfolio than the last couple of years.

The total assets (including contributions, earnings, withdrawals to cover scholarships and gains/losses in portfolio valuations) ultimately increased in value by 7.87%. At the close on December 31, 2023, account assets consisting of $1,051,236.60 in portfolio holdings plus $49,856.14 in cash totaled $1,101,092.74 which when compared to the end of 2022 total of $1,020,756.65 represents a total increase of $80,336.09.

2023 distributions paid to COLEG from various fund holdings totaled $33,601.54, which is lower in percentage than previous years, but because most of our holdings are closed end funds and fund managers in general were less active in churning holdings, most of the increases in portfolio value was not recognized in the form of distributions.  

We continue to look for high yielding closed-end funds selling at a significant discount which, preferably, has been widening over the previous six to 12 months, to invest cash earnings and donations in. We sell any funds that trade at a premium or convert to a par valued mutual fund, or are offered to be purchased by the fund manager at a pro rata net asset value. During the year we purchased $49,510.05 of securities and sold $10,430.00 worth.

Now that interest rates in excess of 5% are generally available we have begun purchasing short term FDIC insured certificates of deposit with cash being held in anticipation of paying scholarship claims. At year end, we were holding a $30,000.00 C/D bearing 5.35% with a January 8, 2024 maturity date - maturing in time for the cash to be available to cover first semester claims.

The equity markets were relatively low in volatility, except for a dip in the fall, drifting mostly towards the up side, throughout 2023. It should be noted that our portfolio holdings, which are generally modestly leveraged income producers, like utilities, mature divident paying corporations, and real estate trusts, go down less sharply than the over-all market. The flip side of this is that they also go up more slowly than the major markets. We have avoided bond funds in the past but may start acquiring some as they fall out of favor due to rising interest rates, resulting in increasing discounts followed by increasing income potential in the event of falling interest rates.

Further information, including purchases, sales and current holdings, regarding our brokerage account is available from the Investment Committee or the COLEG Treasurer.

April 2, 2024
Investment Committee
Bruce Nielsen (Chairman)
Bob Laude
Shelly Westerberg 

Investment Committee Report - Year End 2022

2022 was another volatile year for the COLEG portfolio with monthly changes ranging between up 8.52% and down 11.25%.

The total assets (including contributions, earnings, withdrawals to cover scholarships and gains/losses in portfolio valuations) ultimately decreased in value by 16%. At the close on December 31, 2022, account assets consisting of $962,318.82 in portfolio holdings plus $58,437.83 in cash totaled $1,020,756.65 which when compared to the end of 2021 total of $1,219,012.12 represents a total decrease of $198,255.47.

2022 distributions paid to COLEG from the various fund holdings totaled $59,527.09, which is less than scholarships awarded in 2022, but in excess of 2022 scholarship payments.

We continue to look for high yielding closed-end funds selling at a significant discount which, preferable, has been widening over the previous six to twelve months, to invest cash earnings and donations in. We sell any funds that trade at a premuim, or convert to a par valued mutual fund, or are offered to be purchased by the fund manager at a pro rata net asset value. During the year, we purchased $66,119.86 of securities and sold $8,883.00 worth. A full list of sales and purchases we made during 2022 and a list of our holdings at year end are attached to this report.

The equity markets underwent signifiant volatility, mostly towards the down side, throughout 2022. It should be noted that our portfolio holdings, which are generally modestly leveraged income producers, like utilities, mature dividend paying corporations, and real estate trusts, go down less sharply than the over-all market. The flip side of this is that they also go up more slowly than the major markets. We have avoided bond funds in the past but may start acquiring some as they fall out of favor due to rising interest rates, resulting in increasing discounts and increased income potential.

Further information regarding our brokerage account is available from the Investment Committee or the COLEG Treasurer.

August 19,2022
Investment Committee
Bruce Nielsen (Chairman)
Bob Laude
Shelly Westerberg 

Investment Committee Report - Year End 2021

2021 was another volatile year for the COLEG portfolio.

The total assets (including contributions, earnings, withdrawals to cover scholarships and gains/losses in portfolio valuations) ultimately increased in value by 31%. At the close on December 31, 2021, account assets consisting of $1,165,108.53 in portfolio holdings plus $53,903.58 in cash totaled $1,219,012.12 which when compared to the end of 2020 total of $962,913.09 represents a total increase of $256,099.03.

2021 distributions paid to COLEG from the various fund holdings totaled $79,046.40, which is in excess of scholarships awarded in 2021.

We continue to look for high yielding closed-end funds selling at a significant discount which, preferably, has been widening over the previous 6 to 12 months, to invest cash earnings and donations in. We sell any funds that trade at a premium, or convert to par valued mutual fund, or are offered to be purchased by the fund manager at a pro rata net asset value. During the year we purchased $260,786.44 of securities and sold $237,302.05 worth. A full list of sales and purchases we made during 2021 and a list of our holdings at year end are listed below.

The equity markets underwent significant violatility, mostly towards the upside, throughout 2021. It should be noted that our portfolio holdings, which are generally modestly leveraged income producers, like utilities, mature dividend paying corporations and real estate trusts, go down less sharply than the over-all market. The flip side of this is that they also go up more slowly than the major markets. We have avoided bond funds in the past but may start acquiring some as they fall out of favor due to rising interest rates, resulting in increasing discounts and increased income potential.

Further information regarding our brokerage account is available from the Investment Committee or the COLEG Treasurer.

April 18, 2022
Investment Committee: Bruce Nielsen (Chairman), Bob Laude, Shelly Westerberg

*Items marked "S" were sold during 2021 and marked "P" were purchased during 2021.

The total assets (including contributions, earnings, withdrawals to cover scholarships and gains/losses in portfolio valuations, ultimately decreased in value by 9%. At the close on December 31, 2020, account assets consisting of $926,652.76 in portfolio holdings plus $36,260.33 in cash totaled $962,913.09 which when compared to the end of 2019 total of $1,000,517.39 represents a total decrease of $37,604.30. (*At one point last April, all assets in the investment account were down more than $260,000.00 from the end of 2019.)

2020 distribution paid to COLEG from the various fund holdings totaled $67,661.19, which is in excess of scholarships awarded in 2020.

We continue to look for high yielding closed-end funds selling at a significant discount which, preferably, has been widening over the previous 6 to 12 months to invest cash earnings and donations in. As noted in our report last year, we were forced to redeem our position in UBS AG London 2X CEF Fund when it dropped below a preset stop loss point in the fund plan. We also sold at a loss our position in Templeton Dragon Fund, a fund investing in Chinese companies, in February - less than a month after purchasing it, because of concerns about the effects of the COVID virus on the Chinese economy at the time. A full list of sales and purchases we made during 2020 and a list of our holdings at year end are listed below.

The equity markets underwent significant volatility throughout 2020. It should be noted that our portfolio holdings, which are generally modestly leveraged income producers, like utilities and real estate trusts, go down less sharply than the over-all market. The flip side of this is that they also go up more slowly than the major markets. We are nonetheless, at the time of this writing after covering our January scholarship obligations, up more than $100,000.00 since the beginning of this year.

As usual, it is our plan to sell any funds that trade at a premium. or convert to a par valued mutual fund, or are offered to be purchased by the fund manager at a pro rata net asset value

April 24, 2021
Bruce Nielson, Chairman, Bob Laude, Shelly Westerberg

bInvestment Committee Report - Year End 2019

2019 was a deceptively* good year for the COLEG portfolio.

The total assets (including contributions, earning, withdrawals to cover scholarships and gains/losses in portfolio valuations) increased in value by 33%. At the close on December 31, 2019, account assets consisting of $842,767.74 in portfolio holdings plus $157,749.65 in cash totaled $1,000.517.39 which when compared to the end of 2018 total of $751,931.91 represents a total increase of $248,585.48. (*At the time of this writing on April 19, 2020, all assets in the investment account totaled $736,519.71 - a loss of more than $260,000.00 since the end of 2019.)

2019 distributions paid to COLEG from the various fund holdings totaled $68,008.75, which is greater than 2018 earnings and is well in excess of scholarships awarded in 2019.

We continue to look for high yielding closed end funds selling at a significant discount which, preferably, has been widening over the previous six to 12 months to invest cash earnings and donations in. Making purchases during the last half of 2019 was a difficult process because closed-end fund discounts in general all decreased as the year progressed - hence, the larger than normal cash holdings at the end o the year. Two funds (Virtus Total Return and Reaves Utility) moved to a premium valuation and we sold them, adding to our cash holdings. We did, nonetheless, purchase 2000 shares o Macquarie Global Utility and Infrastructure and 2400 shares of UBS AG London 2X CEF Fund.

The equity markets underwent significant growth during the last few months of 2019, peaking at the end of January, 2019. It should be noted that our portfolio holdings, which are generally modestly leveraged income producers, like utilities and real estate trusts, go down less sharply than the over-all market. The flip side of that is they only rebound about half as fast as the general market indexes. The exception to this was our purchase of UBS fund which is a double leveraged fund of other closed-end funds producing an approximately 20% yield at the time we purchase it. Double leveraged funds go up and down twice as fast as a non-leverged basket of the same holdings. This fund did not do well during the recent market correction and you will see next year that we were forced to liquidate this holding at a loss in 2020. Hopefully, the worst of the market damge caused by the COVID-19 virus is already baked in and we can rely on our current Etrade-projected earnings of $60,000.00+ for the rest of the year.

As usual, it is our plan to sell any funds that trade at a premium, or convert to a par valued mutual funds, or are offered to be purchased by the fund manager at a pro rata net asset value.

Investment Committee
Bob Laude (Chair), Bruce Nielsen, Shelly Westerberg

Investment Committee Report - Year End 2018

2018 was a deceptively* poor year for the COLEG portfolio.

The total assets (including contributions, earnings, withdrawals to cover scholarships and gains/losses in portfolio valuations) decreased in value by 13.72%. At the close on December 31, 2018, (7 days after the equity markets bottomed out on December 24, 2018) account assets consisting of $717,683.56 in portfolio holdings plus $34,248.35 in cash totaled $751,931.91 which, when compared to the end of 2017 total of $871,539.21, represents a total decrease of $119,607.30. (*At the time of this writing on April 17, 2019, all assets in the investment account totaled $885,923.42 - a recovery of more than $130,000.00 since the end of 2018.)

2018 distributions paid to COLEG from the various fund holdings totaled $63,965.57, which is greater than 2017 earnings and is well in ecess of scholarships awarded in 2018.

We continue to look for high yielding closed end funds selling at a significant discount which, preferably, has been widening over the previous 6 to 12 months to invest cash earnings and donations in. During the year we purchased 500 additional shares in Reaves Utility Fund, and 1000 additional shares in Tekla Healthcare, and initiated positions in Ares Dynamic Credit Allocation Fund, Franklin Limited Duration Income Trust, PGIM Global Short Duration Fund, and Tekla Healthcare Opportunities.

The equity markets underwent a significant correction during the last two months of 2018, bottoming on December 24. It should be noted that our portfolio holdings, which are income producers, like utilities and real estate trusts, go down less sharply than the over-all market. The flip side of that is they only rebound about half as fast as the general market indexes.

As usual, it is our plan to sell any funds that trade at a premium, convert to par valued mutual funds, or are offered to be purchased by the fund manager at a pro rata net asset value.

Investment Committee
Bob Laude (Chairman), Bruce Nielsen, Shelly Westerberg

 

Investment Committee Report - Year End 2017

2017 was a good year for the COLEG portfolio.

The total assets (including contributions, earning, withdrawals to cover scholarships and gains/losses in portfolio valuations) increased in value by 46.56%. At the close on December 31, 2017, account assets consisting of $771,596.70 in portfolio holdings plus $99,942.51 in cash totaled $871,539.21 which when compared to the end of 2016 total of $594,662.62 represents a total increase of $276,876.59.

2017 distributions paid to COLEG from the various fund holdings totaled $45,456.12, which is greater than 2016 earnings and is well in excess of scholarships awarded in 2017.

In addition to receiving more than $150,000.00 in donations last year, we sold John Hancock Bank & Thrift when it went from discount to premium, and LM Clearbridge Real Estate when it went from a closed end fund to a mutual fund. This meant we had well over $200,000.00 to find homes for in 2017. We continued to look for high yielding closed end funds selling at a significant discount which, preferably, had been widening over the previous six to twelve months. These proved hard to find in 2017 until later in the year when several closed end funds decided to raise cash by issuing additional shares During the year we purchased Reaves Utility Fund, Principal Real Estate, KKR Income, New Ireland Fund, and Alpine Global Fund, and added to some of our other positions. Zweig Fund merged with Virtus Total Return which we continue to hold.

The equity markets have undergone a significant correction and somewhat less significant rebound during the first three months of 2018. It should be noted that our portfolio holdings, which are income produces like utilities and real estate trusts, only went down about half as much as the over-all market. The flip side of that is they only rebound about half as fast as the general market indexes.

As usual, it is our plan to sell any funds that trade at a premium, convert to par valued mutual funds, or are offered to be purchased by the fund manager at a pro rata net asset value.

 

Investment Committee
Bob Laude (chairman), Bruce Nielsen, Shelly Westerberg

2017 End of Year Portfolio

Investment Committee Report - Year End 2016

2016 was a good year for the COLEG portfolio with us recouping our 2014 losses plus another almost $30,000.00.

The total account assets (including contributions, earnings, withdrawals to cover scholarships and gains/losses in portfolio valuations) increased in value of 12.96%. At the close of business on December 31, 2016, account assets consisting of $520,326.32 in portfolio holdings (see below) plus 474,336.30 in cash totaled $594.662.62, which when compared to the end of 2014 total of $526,441.79 represents a total increase of $68,220.83.

2016 distributions paid to COLEG from the various fund holdings totaled $37,879.59 which is greater than 2015 earnings and is well in escess of scholarships awarded in 2016.

Since January 1, 2017, we have received more than $150,000.00 in additional contributions to the COLEG, most of which has been invested in discounted closed-end funds. We have sold our JH Bank and Thrift holding when it moved from discount to premium. We anticipate investing most of the available remaining cash in discounted income-producing closed-end funds including adding some more inflation-protected funds. Any future sales would likely be funds which switch from discount to premium and those for which the fund manager is making an offer to repurchase for a minimally discounted value.

End of Year Portfolio:

Investment Committee Report - Year End 2015

2015 was not a great year for the COLEG portfolio with us giving back our 2014 gains in 2015. Fortunately, we only had two holdings (Adams Natural Resources and BlackRock Energy) with significant exposure to energy related stocks, or the results could have been worse.

The total account assets (including contributions, earnings, withdrawals to cover scholarships and losses in portfolio valuations) decreased in value by 6.9%. At the close of business on December 31, 2015, account assets consisting of $474,809.42 in portfolio holdings (see below) plus $51,632.37 in cash totaled $526,441.79, which when compared to the end of 2014 total $565,490.66, represents a total decrease of $39,048.87.

2015 distributions paid to COLEG from the various fund holdings totaled $30,617.43 which is similar to that for 2014, and is in excess of scholarships awarded in 2015.

The Investment Committee currently foresees a continuing slow-growth economy in the U.S. It also appears that the equity markets entered a secular bull market in 2014; the shortest previous secular bull market lasted 10 years (1955 - 1965). As such, barring any major shake-up in future economic circumstances, we don't foresee any major change in our practice of primarily investing in discount valued closed-end funds generating substantial income-supported and sustainable distributions.

Current Portfolio makeup (all closed end funds):

Bob Laude (Chairman), Bruce Nielsen, Shelly Westerberg

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Investment Committee Report - Year End 2013

2013 was another positive year for the COLEG portfolio. Because the investment committee had concerns about over-valued equity markets at the end of the year, we remained somewhat defensive with the portfolio 18.7% in cash.

This year COLEG account assets increased in value by a little over 22.3%. At the close of business on December 31, account assets totaled $525,205.44. A year earlier, the assets in these accounts were valued at $429,280.73. This represents an absolute increase in value of $95,924.71.

The level of distributions received from fund holdings during the year remained similar to the prior year with most of the increase in our portfolio coming from increased valutions in the various holdings. If we continue to base scholarship awards on distributions only, total scholarship awards should be similar to last year.

The Investment Committee continuously evaluates alternatives and monitors the financial markets and our portfolio holdings. As before, this committee remains committed to their long term goals of growth, income and diversification of the portfolio.

The following is the make-up of brokerage account assets as of December 31, 2013:

Bob Laude (Chairman), Bruce Nielsen, Shelly Westerberg

 

 Investment Committee Report ~ Year End 2012

Community Of Lancaster  Education Group

Bob Laude (Chairman),  Bruce Nielsen, Shelly Westerberg

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