About United Church Funds

Transcription

1

2 About United Church Funds Established in 1909, United Church Funds (UCF) offers a family of professionally managed, well-diversified and socially responsible investment funds to the churches and ministries of the United Church of Christ. At present, UCF manages over half a billion dollars in assets from small church reserve accounts to some of the denomination s historic endowments. With United Church Funds, investors enjoy the best practices of modern portfolio management while remaining faithful to the values of the United Church of Christ. We seek solid investment performance with a purpose: to make more money available for your ministry. 1

3 Assets under management Market Value as of June 30, 2013: $719.3 million Domestic Core Equity $191.9 M Fixed Income $248.0 M Small Cap Equity $44.7 M International Equity $182.5 M Alternatives $43.0 M Cash & Equivalent $9.2 M 2

4 Investment Management Structure Experienced board leadership Professional Chief Investment Officer monitoring diversified investment managers Outside investment manager evaluation in consultation with Summit Strategies Group Highly skilled investment managers selected and monitored for specialty & performance 3

5 Responsibilities & Decision Process Board of Directors Summit Strategies President Investment Committee Investment Managers Chief Investment Officer Director, Investor Development BNY/Mellon Custodian Director, Finance & Admin Director, Marketing & Strategic Init. SRI Committee ICCR & Partners Director, SR 4

6 Investment Manager Selection Strong long-term track record Stable investment management team Consistent investment process Ability & willingness to honor social screens Clear client focus 5

7 Investment Strategy Maximize return with an acceptable level of risk Diversify holdings & asset classes to reduce risk and enhance returns Monitor portfolios & managers to ensure continued long-term performance Advocate for social & corporate responsibility in the management of companies we own Maintain a long-term investment horizon that reflects the goals of our investors Preserve low management costs with no additional account management fees 6

8 Cash & Equivalent Benchmark: Lipper Index Short-term/overnight funds through BNY/Mellon Operates like a traditional money market fund and offered primarily for short-term cash management Net Asset Value target: $1 per unit 0.2% 0.0% 0.01% 0.01% 0.01% 0.01% 0.01% YTD 6/30/ % 1 Year 3 Years Cash & Equivalent Fund Lipper Index Past performance is no guarantee of future results. UCF performance is reported net of fees. 7

9 Fixed Income Benchmark: 95% Barclays Capital US Government/Credit Index, 5% JPMorgan Government Bond Index Emerging Markets Global Diversified Relatively low degree of market risk and total return over time Invested primarily in intermediate & long-term US Dollar government and investment-grade corporate fixed-income obligations Includes an emerging markets debt allocation (up to 10%) 6% 4% 3.69% 3.86% 5.44% 5.27% 4.41% 4.42% 2% 0% -2% -4% -0.12% -0.68% -2.78% -2.89% YTD 6/30/13 1 Year 3 Years 5 Years 10 Years Fixed Income Custom Index Past performance is no guarantee of future results. UCF performance is reported net of fees. 8

10 Domestic Core Equity Benchmark: S&P 500 Index Managed by Quantitative Management Associates (QMA) using a proprietary algorithm to guide stock selection (a quant manager) Focus: companies with high quality earnings and/or with newsworthy events affecting enterprise growth 25% 20% 21.91% 20.60% 18.50% 18.45% 15% 14.03% 13.82% 10% 5% 6.25% 7.01% 0% YTD 6/30/13 1 Year 3 Years 5 Years Domestic Core Equity S&P 500 Past performance is no guarantee of future results. UCF performance is reported net of fees. 9

11 Small Cap Equity Benchmark: Russell 2000 Index Highest degree of risk of any of UCF s domestic funds Core manager: Fiduciary Management, Inc. Growth manager: Westfield Capital Management Value manager: Dimensional Fund Advisors (mutual fund) 30% 25% 20% 15% 10% 5% 0% 27.11% 24.21% 16.08% 18.67% 15.86% 15.22% 8.77% 2.42% YTD 6/30/13 1 Year 3 Years 5 Years Small Cap Equity Russell 2000 Past performance is no guarantee of future results. UCF performance is reported net of fees. 10

12 International Equity Benchmark: UCF Custom Index 70% EAFE net, 30% MSCI EM net Carries risk of currency exchange fluctuations, reduced liquidity, less developed economies and governmental instability 15% 10% 12.10% 13.74% 8.31% 8.23% 5% 0% -5% 0.29% -0.15% -0.78% -1.58% YTD 6/30/13 1 Year 3 Years 5 Years International Equity Custom Index Past performance is no guarantee of future results. UCF performance is reported net of fees. 11

13 Total Equity A fund of funds blending all equity portfolios Current Policy Index: 40% S&P 500 Index 10% Russell 2000 Index 35% EAFE Index 15% MSCI Emerging Markets Net Index 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 6.46% 6.89% 17.74% 17.60% 13.92% 13.48% 3.06% 4.39% 6.69% 5.81% YTD 6/30/13 1 Year 3 Years 5 Years 10 Years Total Equity Custom Index Past performance is no guarantee of future results. UCF performance is reported net of fees. 12

14 Total Equity Asset Allocation Each target allocation lies within a band that permits the Chief Investment Officer to adjust allocations depending on a range of factors. 100% 80% 60% 40% 13% 32% 11% 15% 35% 10% International Emerging Markets International Developed Markets Small Cap 20% 45% 40% Domestic Core 0% Actual 6/30/13 Target 13

15 Balanced Funds Three funds blend Total Equity & Fixed Income to offer a range of risk profiles 100% 90% 80% 70% 65% 40% 25% 60% 50% 40% 30% 20% 10% 35% 60% 75% 0% Conservative Moderate Total Equity Aggressive Fixed Income 14

16 Performance MANAGED FUNDS FUNDS OF FUNDS TOTAL RATES OF RETURN AS OF 6/30/13 ANNUALIZED Returns on UCF funds are presented net of fees Quarter Year To One Three Five Ten Current Market Unit Value Date Year Years Years Years Yield Value Fixed-Income Fund -2.88% -2.78% -0.12% 3.69% 5.44% 4.41% 4.01% $ $248.0M Custom Index 95% Barclays Capital Gov't Bond, 5% JPM GBI-EM Global Diversified -2.74% -2.89% -0.68% 3.86% 5.27% 4.42% Barclays Capital Gov't Credit Bond Index (BCGC) -2.51% -2.67% -0.62% 3.88% 5.29% 4.43% Domestic Core Equity Fund Inception 10/1/ % 14.03% 21.91% 18.50% 6.25% N/A 2.13% $ $191.9M S&P 500 Index 2.91% 13.82% 20.60% 18.45% 7.01% Small Cap Equity Fund Inception 10/1/ % 16.08% 27.11% 15.22% 2.42% N/A 1.04% $ $44.7M Russell 2000 Index 3.08% 15.86% 24.21% 18.67% 8.77% International Equity Fund Inception 10/1/ % -1.58% 12.10% 8.31% 0.29% N/A 3.08% $ $182.5M Custom Index 70% EAFE net, 30% MSCI EM net -3.14% -0.15% 13.74% 8.23% -0.78% Cash & Equivalent Fund 0.01% 0.01% 0.01% 0.01% 0.20% N/A 0.01% $ $ 9.2M Lipper Money Market Funds Index (annualized) 0.00% 0.01% 0.01% 0.02% 0.25% Alternatives Fund Inception 07/1/ % 4.65% 9.30% 6.01% N/A N/A 0.00% $ $ 43.0M Custom Index 70% HFRI Funds of Funds Composite, 30% NCREIF Fund Index Total Equity Fund 44.5% Domestic Core Equity, 11.1% Small Cap Equity and 44.4% International Equity Current Policy Index 40% S&P 500, 10% Russell 2000, 35% EAFE,15% MSCI Emerging Markets Net -0.02% 3.11% 7.44% 5.52% -0.09% 6.89% 17.60% 13.92% 4.39% 6.69% Conservative Balanced Fund Inception 01/01/ % Equity, 64.7% Fixed-Income Current Policy Index 35% Equity Policy, 65% BCGC -1.94% -1.66% 0.55% 0.62% 6.03% 5.49% 7.38% 7.64% 5.19% 5.48% N/A 3.45% $ $ 11.1M Moderate Balanced Fund 60.2% Equity, 39.8% Fixed-Income Current Policy Index 60% Equity Policy, 40% BCGC -1.35% -1.05% 2.84% 3.01% 10.31% 10.03% 9.73% 10.17% 4.62% 5.28% 5.65% 6.13% 3.06% $ $357.5M Aggressive Balanced Fund Inception 01/01/ % Equity, 24.8% Fixed-Income Current Policy Index 75% Equity Policy, 25% BCGC -1.01% -0.69% 4.21% 4.45% 13.13% 12.82% 11.10% 11.62% 4.10% 5.03% N/A 2.82% $ $ 19.7M Alternatives Balanced Fund Inception 07/1/ % 3.49% 10.79% 8.99% N/A N/A 0.00% $ $223.1M Current Policy Index 50% Equity Policy, 30% Fixed Income Policy and 20% Alternatives Policy -0.56% 6.46% 17.74% 13.48% -0.79% 3.39% 10.35% 9.54% 3.06% 5.81% 2.43% Past performance is no guarantee of future results. UCF performance is reported net of fees. $ $399.4M 15

17 Management Fees Inclusive of all administrative, investment management & custody costs no 12b-1 or transaction fees Set annually based on expenses & estimated net assets 2013 Cash & Equivalent.00% Fixed Income.45% Domestic Core Equity.55% Small Cap Equity 1.00% International Equity 1.10% Total Equity.90% Conservative Balanced.60% Moderate Balanced.70% Aggressive Balanced.75% Alternative Balanced.80% 16

18 Reporting & Transactions Quarterly statements & online account access with custom reports available on request Customer service from real human beings with a toll-free number and easy access Uncomplicated fund access with turnaround within two business days Free electronic funds transfers for all distributions and deposits if desired Multiple account options for organizations wishing to maintain separate funds Option to reinvest or receive income and ability to establish regular payout schedules 17

19 The United Church Funds Advantage A family of professionally managed, well diversified and actively managed funds A not-for-profit structure and low management fees A socially responsible portfolio with active shareholding reflective of UCC values Over 100 years of service to the churches & organizations of the United Church of Christ 18

20 Governance Board of Directors Mr. Nesa Joseph, Chair Rev. Dr. Charles Buck Rev. Kathy Dwyer Mr. William Epke Ms. Barbara Everett Ms. Sylvia G. Ferrell-Jones Ms. Edith Guffey Mr. Steven J. Guy The Honorable Brian F. Holeman Rev. Dr. Sandra Hulse Rev. Penny L. Lowes Rev. Gwendolyn V. Kirkland Ms. Stella A. Schoen Rev. Harold S. Schultz Mr. Wade Zick Investment Committee Mr. Steven J. Guy,* Chair Mr. Dennis Bushe Ms. Sylvia G. Ferrell-Jones* Mr. Donald G. Hart Mr. Douglas Hatfield Ms. Susan S. Huang Rev. Dr. Sandra S. Hulse* Rev. Gwendolyn V. Kirkland* Mr. Mark Parthemer Rev. Dr. Harold C. Smith, Emeritus * Members of the Board of Directors Ex-officio Rev. Geoffrey A. Black UCC General Minister & President Rev. Bernard Wilson Chair, United Church of Christ Board Members Emeritus Mr. Richard A. Hopkins Rev. Dr. Harold C. Smith 19

21 Our people UCF Staff Donald G. Hart President Michelle Andreé Director, Finance & Administration Rev. Cheri L. Lovell Director, Marketing & Strategic Initiatives Kathryn O. McCloskey Director, Social Responsibility Rev. Nelson R. Murphy Director, Investor Development Matthew W. Wagner Investor Development Associate Milagros Hernandez Investor Services Team Leader Crysta Seelal Investor Services Representative Carla Bergmeier Communications Specialist/Writer Karen Sherman-Chang Controller Michele Hamilton Staff Accountant Gaylord Tang Administrative Assistant Shared Staff with The Pension Boards United Church of Christ David A. Klassen Chief Investment Officer Michael J. de Guzman Research Analyst/Generalist ucfunds.org 20