The WMF has an investment policy to invest in assets which are globally seen as low risk. Over the fiscal year investment in US Treasury securities dropped from 73M$ to 15M$. Most likely the WMF has sold US Treasury securities with a big loss. Interest rates have gone up in the past, which results in lower market value for bonds, including US Treasury securities. 

On Wed, Nov 9, 2022 at 8:36 PM Steven Walling <steven.walling@gmail.com> wrote:


On Wed, Nov 9, 2022 at 10:37 AM Andreas Kolbe <jayen466@gmail.com> wrote:
Dear WMF Finance staff,

I inquired over a week ago on Meta-Wiki why the WMF is reporting a negative investment income (–$12 million). There has been no answer to date.[1]

I am a layperson, but how can an investment income be negative? Would you mind sharing what this is about?

You probably didn't get a prompt answer because "how can investment income be negative" is something you could have Googled before asking the finance team. 

Investments can lose value.* The US stock market has lost a tremendous amount of value over the last year, so it would not be surprising that most investments would have a negative return recently.
 
* https://www.investopedia.com/terms/n/negative-return.asp https://www.finra.org/investors/investing/investing-basics/risk

I was also surprised to find that the reported increase in net assets for the 2021–2022 financial year was "only" $8.2 million. The third-quarter F&A tuning session published in May (based on data as of March 31) forecast a far higher surplus, with an increase in net assets of $25.9 million.[2] 

Would you mind sharing what happened in the fourth quarter to reduce the surplus by so much?

Best wishes,
Andreas


On Tue, Nov 1, 2022 at 3:45 PM Andreas Kolbe <jayen466@gmail.com> wrote:
Dear all,

The WMF's audited financial statements are now available here:


Some key figures from the page numbered 4 (page 6 in the pdf):

– Net invest income was negative: –$12M (down $16M)
– Total support and revenue was $155M (down $8M due to that negative investment income)
– Total expenses were $146M (up $34M)
– Salaries and wages were $88M (up $20M)
– Net assets at end of year increased by $8M

For reference, the end-of-year increase in net assets forecast in the third-quarter Finance & Administration tuning session deck published in May 2022 was $25.9M:


Best,
Andreas

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