Friday, September 30, 2011

Investment Fund Summary

Here is a summary of the Foundation’s funds and how they have been affected by the markets this month; a full report with comparisons to benchmarks will be available October 10th on the Foundation’s website:

“Our long-term view is an important aspect of our investing strategy. We avoid making hasty investment decisions in response to short-term market volatility. No one—not even the most skilled financial experts—can accurately predict the short-term direction of the U.S. and world stock markets. And past performance is no guarantee of future performance. History has proven—from 2000 to 2003 and again from 2008- 2009—that adhering to a disciplined strategy is the best policy—it works.”
– David Zellner, Chief Investment Officer of Wespath* and the General Board of Pensions and Health Benefits of the United Methodist Church.

Fixed Income Fund: This fund, as its name suggests, continues to be a reliable source of income for churches, in spite of the fact that overall share price declined this past month. The fund is primarily comprised of a broad range of fixed-income instruments, such as U.S. Treasury and agency securities, foreign government bonds, corporate bonds, mortgage-backed securities and asset backed securities. The fund does not hold municipal bonds as part of its portfolio.

Equity Income Fund: Comprised of 70% US stocks and 30% international stocks, this fund
experienced a decline in share price. On the positive side, investors in the Equity Fund are
positioned for growth. Shares are “on sale” for new investments. Existing investors will gain the
long term benefit of asset class rebalancing that is taking place behind the scenes.

Balanced Fund: 65% stocks and 35% bonds; overall this fund is invested in more than 30 different investment manager firms. These managers provide the fund with broad diversification of holdings in a variety of U.S. and non-U.S. securities. These include stocks, traditional bonds, inflation-linked bonds, real estate investment trusts, securities, commodities, and interests in private equity and private real estate partnerships. Due to the fortunate timing of some recent investment purchases, this fund’s returns remain positive for 2011.

Short Term Fund: This is our money market fund. It is not invested in the markets or banks. Instead it is invested in capital loans to churches from Texas to Montana. It has been and will continue to be a reliable investment that preserves principal and earns competitive interest. This month, the rate of return exceeded 1.5%, proving that this continues to be a solid and profitable place for cash.

Methodists Helping Methodists Fund: These certificates of participation earn interest by investing in loans to churches in only the Rocky Mountain and Yellowstone Annual Conferences. This money is not invested in the markets or banks and continues to be a reliable investment opportunity. There have been NO losses in this fund’s 51 year history.

*The Foundation’s investment manager is Wespath, a Division of the General Board of Pensions and Health Benefits of the United Methodist Church