11 Apr 2019
When the buzzer went off Monday, Virginia head coach Tony Bennett lowered his head and prayed, "Thank you. I'm humbled, Lord."

Talk about a turnaround. Last year, the Virginia men’s basketball team made history with an ignominious upset loss in the NCAA tournament. Read More

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4 Apr 2019
Pro-life activists march in Washington DC.

RICHMOND – On a perfect, cloudless spring day, thousands of pro-life protestors marched around Virginia’s state capitol building on Wednesday in protest of a bill that would allow abortion up to the moment of birth, and remarks by Gov. Ralph Northam in support of legal infanticide.

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31 Mar 2019

Brandes Investment Partners Emerging Markets Equity Strategy Notes First Quarter 2019 (January 1 – March 31, 2019)

The Timothy Plan Mutual Fund Emerging Markets Fund returned 8.3% (gross of fees) in the first quarter, underperforming its benchmark, the MSCI Emerging Markets Index, which increased 9.9%.

Positive Contributors

Holdings in real estate and communication services drove performance.

Mexico-based Fideicomiso PLA Administradora Industrial (known as Terrafina), Fibra Uno and Fibra Macquarie Mexico lifted returns as these income-oriented securities benefited from the U.S. Federal Reserve’s hints that there may be no further interest rate hikes in 2019.

Among our communication services holdings, notable contributors included Indonesian XL Axiata and Chilean Empresa Nacional de Telecomunicaciones (Entel). Investors welcomed XL’s encouraging earnings growth and favorable outlook. Similarly, Entel’s shares rose on strong 2018 results driven by improved profitability and margins in Chile and Peru.

Select financial holdings also aided performance, namely Panama-based Banco Latinoamericano, Russian Sberbank, Colombia’s Grupo Aval and information technology services provider Chinasoft International.

Performance Detractors

Positive sentiment shift regarding trade negotiations between China and the United States boosted Chinese stocks in general. Consequently, while the majority of our China-based holdings appreciated in the quarter, our underweight allocation to companies in the country hurt relative returns.

Meanwhile, tightening financial conditions combined with heightened uncertainty surrounding local elections weighed on our holdings in Turkey. Our allocation there remains measured to three companies: banks Akbank and Garanti Bankasi, as well as real estate firm Emlak Konut.

Other detractors included India-based electric utility Reliance Infrastructure, Slovenian bank Nova Ljubljanska Banka, which gave back some of its strong returns from the fourth quarter of 2018, Mexican cement producer Cemex, and Brazil-based regional jet manufacturer Embraer.

Embraer has received sign-off for its deal with Boeing from most of the required stakeholders, including the Brazilian government and shareholders. The deal is expected to close by the end of this year, assuming anti-trust regulators approve it. In the quarter, Embraer’s shares declined as the company missed revenue and net income forecasts. Nevertheless, our valuation thesis remains positive. As we have shared in the past, we view the deal favorably as it crystalizes the value of Embraer’s commercial segment ahead of any need for regional jet volume recovery, partially mitigating the risks related to the capital expenditure cycle of airlines (Embraer’s customers). The deal also offsets the competitive threat from Airbus/Bombardier and provides a closer relationship with Boeing, which we believe creates an upside potential for both Embraer’s defense and business jet segments.

Select Activity in the First Quarter

The Emerging Markets Investment Committee initiated new positions in companies that we know very well as we have owned them in the past, namely Latin American airline Copa Holdings and Austria-domiciled Erste Group Bank, which operates mainly in emerging European countries.

The investment committee exited the strategy’s positions in Russian Lukoil and India-based Reliance Infrastructure.

A number of recent developments led to a reconsideration of our investment thesis for Reliance Infrastructure and our eventual divestment. Most notably, during the second half of 2018, Reliance sold its Mumbai utility to Adani Transmission. The utility had been Reliance’s main earnings contributor and was sold to pay down debt. Prior to the sale, our investment case for Reliance Infrastructure was supported by the valuation of its electricity assets, including its stake in publicly listed Reliance Power. We also anticipated some upside potential from its significant balance of financial assets. However, the disposal of the Mumbai utility meaningfully reduced Reliance’s earnings power and led to a deterioration in the quality of its net asset value (NAV), which now consists primarily of financial holdings and contingent assets.

Furthermore, the company went into a technical default on a small portion of its debt for a few weeks until it received the proceeds from the utility sale, raising immediate concerns about the liquidity and recoverability of its remaining financial assets. Our loss of confidence in the company, combined with its poor transparency, triggered our decision to exit the position.

Current Positioning

Continuing the trend from the second half of 2018, we trimmed a number of our positions in Brazil given their strong performance. For the first time in over five years, Brazilian companies did not represent the strategy’s largest country weighting at quarter end, with South Korea taking over the position. The strategy maintained major underweights in China, Taiwan and India.

Changes to the Global Industry Classification Standards (GICS) undertaken by MSCI in the fourth quarter of 2018 affected our relative weightings from a sector/industry basis. As has been the case for a number of years, we remained underweight the information technology sector as of March 31, although our underweight was not as significant as before, due to the reclassification of large technology companies (e.g., Alibaba, Tencent, Baidu) into the communication services sector. Our allocations to the consumer discretionary and real estate sectors continued to represent notable overweights.

At quarter end, the strategy’s largest sector weighting was in financials, although we were underweight the benchmark because of our lower exposure to banks in China, Brazil and India.

As a firm, we continue to see significant value potential in emerging markets equities, as we believe valuations remain appealing from both an absolute and a relative standpoint. Our enthusiasm for the asset class is highlighted by our allocation to emerging markets businesses in our Brandes global strategies, which—as of March 31—was at or near the peak levels achieved over the past decade.

Thank you for your continued trust.

Net Asset Value: A company’s total assets minus its liabilities, divided by the number of outstanding shares.

The MSCI Emerging Markets Index with net dividends captures large and mid cap representation of emerging market countries. Data prior to 2001 is gross dividend and linked to the net dividend returns.

MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

The foregoing Quarterly Commentary reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice. The information provided in the commentary should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any security transactions, holdings or sectors discussed were or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance discussed herein. International and emerging markets investing is subject to certain risks such as currency fluctuation and social and political changes; such risks may result in greater share price volatility. There is no assurance that any securities discussed herein will remain in an account’s portfolio at the time you receive this report or that the securities sold have not been repurchased. The actual characteristics with respect to any particular account will vary based on a number of factors including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. Unlike bonds issued or guaranteed by the U.S. government or its agencies, stocks and other bonds are not backed by the full faith and credit of the United States. Stock and bond prices will experience market fluctuations. Please note that the value of government securities and bonds in general have an inverse relationship to interest rates. Bonds carry the risk of default, or the risk that an issuer will be unable to make income or principal payment. There is no assurance that private guarantors or insurers will meet their obligations. The credit quality of the investments in the portfolio is not a guarantee of the safety or stability of the portfolio. Investments in Asset Backed and Mortgage Backed Securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Securities of small companies generally experience more volatility than mid and large sized companies. Although the statements of fact and data in this report have been obtained from, and are based upon, sources that are believed to be reliable, we cannot guarantee their accuracy, and any such information may be incomplete or condensed. Strategies discussed are subject to change at any time by the investment manager in its discretion due to market conditions or opportunities. The Brandes investment approach tends to result in portfolios that are materially different than their benchmarks with regard to characteristics such as risk, volatility, diversification, and concentration. Please note that all indices are unmanaged and are not available for direct investment. Past performance is not a guarantee of future results. No investment strategy can assure a profit or protect against loss. Market conditions may impact performance. The performance results presented were achieved in particular market conditions which may not be repeated. Moreover, the current market volatility and uncertain regulatory environment may have a negative impact on future performance. The margin of safety for any security is defined as the discount of its market price to what the firm believes is the intrinsic value of that security. The declaration and payment of shareholder dividends are solely at the discretion of the issuer and are subject to change at any time.

United States: Issued by Brandes Investment Partners, L.P., 11988 El Camino Real, Suite 600, San Diego, CA 92130.

Singapore/Asia: FOR INSTITUTIONAL/ACCREDITED INVESTOR USE ONLY. Issued by Brandes Investment Partners (Asia) Pte Ltd., Asia Square Tower, 12 Marina View #23-10, Singapore 018961. Company Registration Number 201212812M. ABRN:164 952 710. This document is for “institutional investors” or “accredited investors” as defined under the Securities and Futures Act, Chapter 289 of Singapore and may not be distributed to any other person. This document is being provided for information purposes only. Incorporated in Singapore in 2012, Brandes Investment Partners (Asia) Pte Ltd (Brandes Asia) provides portfolio management services to clients in Asia (as permitted under local law). Brandes Investment Partners, L.P., a U.S. registered investment adviser and a sister entity to Brandes Asia, provides research, portfolio construction and other support to Brandes Asia.

Ireland/Europe: FOR PROFESSIONAL INVESTOR USE ONLY. Issued by Brandes Investment Partners (Europe) Limited (Brandes Europe), 36 Lower Baggot Street, Dublin 2, Ireland. Registered in Ireland Number 510203. Authorised and regulated by the Central Bank of Ireland. This report is being provided for information purposes only, no representation or warranty is made, whether express or implied as to the accuracy or completeness of the information provided. To the fullest extent permitted by law Brandes Europe shall not be liable for any loss or damage suffered by any person as a result of the receipt of this report. Recipients of this report should obtain their own professional advice. The distribution of this report may be restricted by law. No action has been or will be taken by Brandes Europe to permit the possession or distribution of this report in any jurisdiction where action for that purpose may be required. Accordingly, this report may not be used in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons to whom this report is communicated should inform themselves about and observe any such restrictions. This information is being issued only to, and/or is directed only at (i) persons who have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or to whom it may otherwise lawfully be communicated (all such persons together being referred to as “Relevant Persons”). This communication must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This report is a confidential communication to, and solely for the use of, the persons to whom it is distributed to by Brandes Europe.

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31 Mar 2019

First Quarter 2019

 

Market Commentary:

Looking back, the S&P 500 reversed course from the end of the year and rallied for one of the best first quarters to start the year in two decades. The major worries of the market that pressured shares turned into tailwinds. Fears over growth were placated for the majority of companies when they reported earnings. While some areas remain challenged, most companies continue to ascribe to the view that the U.S. economic backdrop is supportive for another year of positive growth. This optimism drove small cap stocks to outpace large caps and growth stocks to rally over value stocks. The next headwind-turned-tailwind was the major pivot by the Federal Reserve, as their dot plot forecast removed any further interest rate hikes in 2019. Investors shifted their expectations to now believe the likely next action is a rate cut, with an increasing probability of that occurring into 2020, rather than a rate hike. Optimism also rose for a potential trade deal with China, as some progress appears to have been made which helped bolster both domestic and global markets during the quarter.

Looking forward to 2019, corporate earnings growth remains the most likely outcome for the full-year, though the next quarterly set of reports could be more challenged on difficult comparisons from 2018. While some companies may report slight declines in year-over-year earnings as a result, the majority of companies are expected to remain positive. Consumer strength remains a driver for continued economic growth as labor markets remain tight even amidst these macroeconomic uncertainties. Corporate investments continue to face headwinds from the global uncertainty, and investors remain keenly focused on the behavior of companies regarding their uses of cashflow, whether for long-term capital expenditures, returning it to shareholders, or reducing their leverage. These issues we believe will further separate those businesses with pricing power and higher- quality models as those decisions are key to creating long-term shareholder value. We remain vigilant in assessing absolute risk in the securities we invest in and striving to protect client capital during these times for potential volatility from the uncertainty.

Timothy Plan Small Cap Value Fund Q1 2019 Commentary

Index Drivers:

During the first quarter, the Russell 2000 Index saw all sectors post positive returns, with Information Technology and Energy gaining the most and Consumer Staples and Financials the least.

Performance Drivers:

The portfolio’s relative performance benefitted from favorable stock selection in Materials and Utilities. ProPetro posted a strong quarter as their relationships in the shale basins, particularly the Permian, helped offset broader industry pressures. Installed Building Products gained after allaying fears regarding pricing power in the insulation installation business with tailwinds from improving housing sentiment. Innospec beat earnings handily driven by better sales and margins in their fuel specialties and oil field segments. Novanta rallied on solid organic growth and better margins as their focus on higher-growth end markets that began several years ago continues to pay dividends. Omnicell beat expectations as issues with a product transition appear to be fully resolved and execution remains good.

The portfolio’s relative performance was negatively impacted by unfavorable stock selection in Financials and an underweight to Information Technology. Penn Virginia declined after their plan to merge with another energy producer was abandoned. Columbia Banking System moved lower after missing expectations as slowing loan growth combined with higher expenses pressured their earnings. Gentherm suffered from weaker automobile volumes, leading to lower near-term guidance but management maintained their long-term guidance. Lattice Semiconductor, a recent purchase, moved modestly lower in sympathy with the market. Continental Building Products posted solid results but saw investor concerns over potential weakening in wallboard prices send shares lower as the quarter came to a close.

Past performance is not indicative of future results. Portfolio returns reflect the reinvestment of dividend and interest income. All information provided is for informational purposes only and is not intended to be, and should not be interpreted as, an offer, solicitation, or recommendation to buy or sell or otherwise invest in any of the securities/sectors/countries that may be mentioned. A description of the methodology used to calculate the attribution analysis or a complete list of each holding’s contribution to overall performance during the measurement period may be obtained by contacting info@westwoodgroup.com. Benchmark Data Source:  © 2019 FactSet Research Systems Inc. All Rights Reserved. Russell Investment Group is the owner of the trademarks, service marks, and copyrights related to its indexes, which have been licensed for use by Westwood.

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31 Mar 2019

Q1019

First Quarter 2019

 

Market Commentary:

Looking back, the S&P 500 reversed course from the end of the year and rallied for one of the best first quarters to start the year in two decades. The major worries of the market that pressured shares turned into tailwinds. Fears over growth were placated for the majority of companies when they reported earnings. While some areas remain challenged, most companies continue to ascribe to the view that the U.S. economic backdrop is supportive for another year of positive growth. This optimism drove small cap stocks to outpace large caps and growth stocks to rally over value stocks. The next headwind-turned-tailwind was the major pivot by the Federal Reserve, as their dot plot forecast removed any further interest rate hikes in 2019. Investors shifted their expectations to now believe the likely next action is a rate cut, with an increasing probability of that occurring into 2020, rather than a rate hike. Optimism also rose for a potential trade deal with China, as some progress appears to have been made which helped bolster both domestic and global markets during the quarter.

Looking forward to 2019, corporate earnings growth remains the most likely outcome for the full-year, though the next quarterly set of reports could be more challenged on difficult comparisions from 2018. While some companies may report slight declines in year-over-year earnings as a result, the majority of companies are expected to remain positive. Consumer strength remains a driver for continued economic growth as labor markets remain tight even amidst these macroeconomic uncertainties. Corporate investments continue to face headwinds from the global uncertainty, and investors remain keenly focused on the behavior of companies regarding their uses of cashflow, whether for long-term capital expenditures, returning it to shareholders, or reducing their leverage. These issues we believe will further separate those businesses with pricing power and higher- quality models as those decisions are key to creating long-term shareholder value. We remain vigilant in assessing absolute risk in the securities we invest in and striving to protect client capital during these times for potential volatility from the uncertainty.

Timothy Plan Large/Mid Cap Value Fund Q1 2019 Commentary

Index Drivers:

Within the S&P 500 Index, every sector posted positive returns during the first quarter, with Information Technology and Real Estate rallying the most while Health Care and Financials rose the least.

Performance Drivers:

The portfolio’s relative performance was aided by strong stock selection in Health Care and Materials. KLA-Tencor rallied on strong results as management indicated results should trough in the next quarter for their semiconductor business. Union Pacific saw their first quarter with precision scheduled railroading help drive productivity improvements with pricing also strong. J.M. Smucker saw positive organic growth as they continue to look for their investment spend and new products to boost topline growth in the coming years. Eagle Materials moved higher after reporting earnings as optimism for the spring construction season increased and an activist investor became involved in shares. PerkinElmer posted strong results ahead of expectations led by their diagnostics segment where topline growth exceeded 10 percent.

Unfavorable stock selection in Information Technology and Financials weighed on relative performance. Given the sharp rally in the markets, only two securities detracted from performance for the quarter. Amdocs declined despite an inline quarter on a negative research report that pressured shares. Everest Re also detracted modestly from performance due to missing estimates from elevated catastrophic losses and the ongoing remixing of their business.

Past performance is not indicative of future results. Portfolio returns reflect the reinvestment of dividend and interest income. All information provided is for informational purposes only and is not intended to be, and should not be interpreted as, an offer, solicitation, or recommendation to buy or sell or otherwise invest in any of the securities/sectors/countries that may be mentioned. A description of the methodology used to calculate the attribution analysis or a complete list of each holding’s contribution to overall performance during the measurement period may be obtained by contacting info@westwoodgroup.com. Benchmark Data Source:  © 2019 FactSet Research Systems Inc. All Rights Reserved. Russell Investment Group is the owner of the trademarks, service marks, and copyrights related to its indexes, which have been licensed for use by Westwood.

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25 Feb 2019
Biblically Responsible Investing is a tangible way to honor your values in the choices you make, including investing.

The growth of evangelical Christianity in America in the latter half of the 20th Century prompted the rise of many Christian-oriented institutions, including those in the financial sector. From Larry Burkett’s founding of a Christian financial ministry in 1976 to Art Ally’s launching of the Timothy Plan in 1994, the Faith-Based Investing / Biblically Responsible Investing (BRI) world grew fast – and is still expanding. Read more

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5 Feb 2019
In the wake of Billy Graham’s evangelical crusades from the 1940s to the first decade of the 21st Century, the portion of the United States population identifying as “evangelical Christian” steadily grew.

The growth of evangelical Christianity in America in the latter half of the 20th Century prompted the rise of many Christian-oriented institutions, including those in the financial sector. From Larry Burkett’s founding of a Christian financial ministry in 1976 to Art Ally’s launching of the Timothy Plan in 1994, the Faith-Based Investing / Biblically Responsible Investing (BRI) world grew fast – and is still expanding. Read more

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31 Jan 2019
Infanticide - Governor Ralph Northam seeks to end life upon birth.
30 Jan 2019

Since the beginning, God has given humanity the gift of dominance over all living things, but also a responsibility to be good stewards of His creation. Therefore, we owe it to our Maker to use our money wisely. We should do nothing to hinder His Kingdom and instead advance it. We should not hurt people by investing in ventures that promote or traffic in sin. Read more

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18 Jan 2019
March for Life 2019