b'INVESTMENT COMMITTEE REPORT MARCH 31, 2022New Strategies for a Volatile MarketThis being my third annual report, I now firmly believe there is no such thing as normal. A year ago, I commented on the surplus of capital in the market that, combined with low interest rates, was creating a perfect storm.Too much money was driving the investment markets and real estate valuations too high. In the last few years, we witnessed the speed with which vaccines were developed and distributed in North America and Europe.The vaccine was accompanied by massive government financial stimuli.This accelerated consumer spending in the developed world and drove product demand.However, in the developing parts of the world, the primary source of manufacturing, the vaccines and stimuli did not come as quickly, resulting in shortages of supply.In 2021, product shortages and high levels of consumer activity resulted in transitory inflation.It was anticipated that once manufacturing and transportation caught up with the demand, inflation would return to normal levels.Then came labour shortages, followed by the war in Ukraine. These events exasperated inflation by increasing labour costs and creating even more shortages in important commodities needed in the manufacturing process.We will also see an impact on world food supply and prices. As a result, today we have inflation rates that we have not seen in 40 years and, if history gives us any indication, inflation and slower economic activity may be with us for a while.This is not good news for the markets.Governments have responded by increasing their lending rates and starting to contract the money supply. This is reversing the policies that contributed to this problem originally. For the year ended March 31, 2022, the rate of return on the total portfolio was 5.6% compared to 21.9% for 2021.As of the time of writing this report the major indices in the US and globally are in bear markets, down more than 20%. From March 31 to the end of June our portfolio has fallen 8.8%. Much of this drag on our performance is the result of our international equity market allocation.We continue to monitor the investment managers performance in this area. In anticipation of more market volatility, over a year ago we began looking to add alternative investment strategies to the portfolio. After several strategy sessions and interviews with alternative investment managers, we have now identified and approved new investments in real estate and infrastructure as additions to the Foundations asset mix.We anticipate that these investments will help us navigate some of the issues we see in the market. We thank the Foundation Board for its ongoing support. The Investment Committee is committed to stewarding the investments of the Shevchenko Foundation diligently and professionally.Finally, I thank the members of the Shevchenko Foundation Investment Committee for their hard work during this past year.I am very lucky to work with this team and the Foundation is fortunate to have such a talented Investment Committee. -DAVID CHUCKO, Chair Investment CommitteeINVESTMENT PORTFOLIO SUMMARY 5YR20222021202020192018Investments, $M*50.2047.636.939.537.7Grants Paid, $M7.42.11.41.211.7 Annualized ROR8.6%**6.8%23.4%-2.0%8.0%7.0% *MARKET VALUE OF INVESTMENTS, NET OF GRANTS PAID** 5 YEAR ANNUALIZED RATE OF RETURN 48SHEVCHENKO FOUNDATION ANNUAL REPORT / SHEVCHENKO FOUNDATION ANNUAL REPORT /49'