Dear Friends,
This is your First Quarter 2025 update with important news and information about Friends Fiduciary and your account with us. As we noted in our recent letter, markets have undergone a rapid shift in sentiment, leading to significant volatility. While the latest tariff announcements and other drivers of market volatility may be alarming, the volatility itself is not unprecedented. In investment terms, we are confident that our core principles, including high quality and diversification, position us to navigate these disruptions and stay focused on long-term success. At the same time, our work to bring Quaker values to the corporate world, while not without new challenges, continues with fresh energy and urgency.
2025 First Quarter Summary
Capital market volatility has spiked in response to an unprecedented attempt by the Trump administration to realign global economic trade between the U.S. and the rest of the world. The imposition of tariffs on trading partners and subsequent retaliatory tariffs threatens to undermine economic activity in the near term, by increasing costs to firms that import goods and to consumers who buy them. Despite Federal Reserve Chair Jerome Powell’s emphasis, in March, on steady economic progress and labor market resilience, the latest projections point towards slower growth, higher inflation, and an increased probability of the U.S. entering a recession in 2025. This comes at a time when the dominance of the U.S. tech industry has also come into question, following an announcement by Chinese company Deepseek that they have developed artificial intelligence (AI) technology that promises increased scalability and improved energy efficiency. The announcement prompted investors to reduce their holdings in several of the ‘Magnificent 7’ tech giants, making the tech sector the weakest contributor to S&P 500 returns this year, and pushing those giants into bear market territory with stock price declines of 20% or more.
In further response to the uncertainty surrounding tariffs and the likely negative impact on economic growth and inflation, investors shifted their preferences to lower-risk assets. In the first quarter, the top-performing S&P Factor-Based Equity Indices were Low Volatility (+7.3%), Enhanced Value (+5.8%), and Low Volatility High Dividend (+5.0%). Investors also sought opportunities globally, as seen with the S&P Developed Market Ex-U.S. Index, which outperformed the S&P 500 Index by 12.1%, its largest quarterly outperformance in over a decade. Bond markets also benefited from the risk-averse sentiment, as the Bloomberg U.S. Aggregate and Bloomberg Global Aggregate Indices posted returns of +2.8% and +2.6%, respectively. Notably, as domestic equities posted negative quarterly returns across the board, diversified funds like the Quaker Growth & Income Fund benefitted from their allocations to international equities and fixed income securities.
Unit value changes for FFC’s five primary funds in the first quarter 2025 are presented below:
2025 Standard Distribution Rate – Quaker Growth & Income Fund
The 2025 standard distribution rate for the Quaker Growth & Income Fund is 4.0%, the same as 2024. June 2025 per-unit distributions will be $1.22/unit. Constituents may take more or less than the announced standard distribution rate. To request a distribution rate other than the standard rate, please contact Tim McElroy at tmcelroy@friendsfiduciary.org or 215-241-7272 x 101.
*REMINDER* Please Tell Us When Your Officers Change
Please tell us when you have a new treasurer or other authorized individual who will have authority over your account(s) at Friends Fiduciary. To notify us of a change, please complete an Account Authorization Form found on our website and email to info@friendsfiduciary.org or via US Mail to our office.
Charitable Gift Annuity Rates Remain High
In March, the American Council on Gift Annuities, the national non-profit that determines Charitable Gift Annuity (CGA) lifetime payment rates, once again affirmed the rate of return assumption that has been in effect since January 1, 2024. Maximum payout rates for charitable gift annuity contracts, which are currently at their highest level since 2007, will remain unchanged. The Council annually reviews rates, typically in the spring and fall, to determine if an adjustment is warranted. A compelling reason to consider establishing a CGA now!
Staff Updates
We are pleased to announce that Nicole Leapheart has joined Friends Fiduciary as our new Senior Communications Manager. Nicole is an accomplished communications executive recognized for her expertise in developing and executing strategic communication plans that drive organizational success. She holds an MBA in strategic management from Temple University’s Fox School of Business. In her new role, Nicole will be focused on developing clear communications and supporting materials for our constituents and prospective constituents, and on growing and championing our work of engaging with companies we invest in to promote Quaker values.
Thank you for choosing Friends Fiduciary for your investment needs. We are committed to providing rigorous Quaker values-based investing, strong performance, and excellent customer service, at cost. If you have any questions or concerns, please contact me at 215-241-7272.
Sincerely,
Ethan Birchard,
Executive Director