The Board of Managers has developed a very specific asset allocation decision tree.

Based upon input from our outside advisor, our own investment advisory board and the judgement of the Board, we gradually substantially moved our equity allocation above our benchmark weight of 65% to a maximum of 73%.  This decision was based on our perception of expected returns and normal investment risk. That strategy has allowed us to generate total returns of more than 23% over the last 12 months and annual returns of almost 13% over the last three years. Within our peer group of comparably managed funds, our performance places us in the top 20% over the last three and five years.

As the market has risen throughout this year, our return expectations have declined slightly, and our risk assessment risen slightly.  We still believe that we will have a strong economy, but perhaps with more inflation and government regulation.  With this outlook, we have decided to maintain our maximum equity exposure at no more than 73%, and as stocks have continued to rise, we have been selling stocks to keep our ratio below 73%. Since the beginning of this year we have sold almost $1 million in equity, and still our equity exposure has risen from the 70.5% that it was at the beginning of the year. 

In light of our strong current performance and very healthy long-term results (our annual return since the Fund’s inception in 2010 is 9.13%), the Board of Managers has reaffirmed our recommendation to the Diocese and our parishes that the Constant Rate of Return (CRR) should remain at 5.25%, but prudence should be used in budgeting the expenditure of monies.  

Thanks,

Chris Maxwell, Vice Chair