Despite the past month being somewhat topsy-turvy on Wall Street, the K21 Foundation's equity accounts - those invested in stocks - are in sound shape.

That assessment was confirmed by Heartland Financial Services, one of the three money management firms that handle the foundation's assets.

In a conference call with finance committee members, Tom Maurath, of Heartland, said as of June 30, the foundation's $10-million portfolio managed by his firm had posted a $92,260 gain. However, the volatility in the stock market in July resulted in a loss, leaving a balance of $9.975 million going into August.

"All of our stocks are showing good earnings," Maurath said. "Despite some short-term losses, we like all of our portfolio. All the companies we are invested in have earning characteristics we like."

Willis Alt, K21's executive director, said the small decline in the book value of Heartland's portfolio was also reflected in the holdings of the other two money management firms handing the foundation's equity accounts - Merrill Lynch and Morgan Stanley. A $10-million portfolio was established with each firm.

The balances for Merrill Lynch and Morgan Stanley were $9.829 million and $9.854 million, respectively.

"Keep in mind that only 50 percent of our assets are in the equity market (stocks)," Alt said. "The other 50 percent is in bonds and bank deposits."

The $21 million in bonds are currently yielding 5.9 percent, he added. The $10 million in deposits are all with Kosciusko County banks.

Maurath told the committee he expects the stock market's long-term outlook to be good because the Federal Reserve has been quick to hold off inflation and the federal government has addressed its budget deficit.

"A growth in Gross Domestic Product of 5 percent is twice as fast as (Alan) Greenspan would like, so the last interest rate increase was their attempt to slow things down," Maurath said. "But inflation has been very well behaved and we believe that it will continue to do so." [[In-content Ad]]