Nature of Fund’s Investment Vehicles Combined with Record Contributions
Minimize Effect of Financial Crisis on Fund

We are posting the following in response to the numerous phone calls and emails I have received inquiring about the impact of the current economic situation on the Fund.

We are fortunate that, due to the nature of its investments, the Fund is largely insulated from the extreme volatility of the financial markets and the plunges in the equity markets in recent weeks.  Because the Fund distributes virtually all of it’s assets to musicians on an annual basis, it is invested primarily in low-risk, short-term vehicles (e.g. Gov’t Bonds, High Grade Commercial Paper, etc.), which in general provide lower returns but less potential for loss than equity investments.  The Fund has not realized any losses on its investments so far this year.

The main consequence of the financial crisis on the Fund’s assets is that the investment earnings are less than in previous years and therefore will not be able to fully cover administrative costs.  However, I’m happy to report that employer contributions into the Fund for the first six months of the current fiscal year are at an all-time high: increases in contributions should just about compensate for the declines in interest income.

As always, we will continue to carefully monitor the Fund’s investments, with the assistance of our financial advisors. Our primary financial advisor is City National Investments which is a division of City National Bank. CNB is one of the most financially stable banking institutions in the industry. Please click the picture below to review the City National Bank statement about the current market conditions and it's financial strength and standing in the industry.

If you have any further questions or concerns about The Fund's financial health I may be contacted at the following email address ddreith@fmsmf.org or you may call me directly at 818-755-777 ext 810.

Thank you and I hope this helps address your concerns about the Fund's financial stability in these challenging times.

Sincerely,