Episcopal Church reports 8.2% annual return on trust funds

Episcopal Church reports annual return of 8.2 % for previous decade
From the Episcopal Church Office of Public Affairs

Episcopal Church reports annual return of 8.2 % for previous decade

[December 3, 2012] According to N. Kurt Barnes, Episcopal Church Treasurer, the Episcopal Church trust funds have experienced annual net returns after fees and expenses of 8.2% annually for the past 10 years ending September 30, 2012.

Barnes made the announcement at the recent meeting of the Executive Council’s Investment Committee in St. Louis, MO.

“This performance compares favorably with that of many larger endowment funds in the country,” noted T. Dennis Sullivan, chair of the Investment Committee and past president of the Church Pension Group. “It reflects the dedication and wise deliberation of volunteers, staff, professional investment managers and consultants.”

The performance of the trust funds is an important source of funding for the General Convention Budget. In recent years, dividends from the trusts have represented nearly one-third of the revenue available for the churchwide mission, Barnes noted.

“It has also provided income for more than 100 other Episcopal entities, including my former Diocese of Lexington,” said Bishop Stacy Sauls, Chief Operating Officer of the Domestic and Foreign Missionary Society (DFMS). “The Diocese of Lexington has over $1.7 million co-invested with the Society. It is worth noting that this opportunity was made available to my Diocese because, as a member of the Executive Council at the time, I happened to know about it. I think we need to be more proactive in helping congregations, dioceses, and institutions know about it now.”

Barnes continued that the DFMS portfolio is diversified among investments assets that include domestic, international and emerging market equities; equity-related unleveraged hedge funds; real estate securities; convertible bonds; and fixed income securities. The assets are divided among 15 professional investment managers registered with the Securities and Exchange Commission (SEC). The asset allocation and managers are reviewed regularly with the assistance of the global investment advisor, Mercer.

Barnes explained that any Episcopal parish, diocese or other Episcopal-affiliated organization is welcome to place funds in custody in the DFMS Endowment Portfolio. All funds so invested participate on a pro-rata basis in all returns. “There are no additional charges for portfolio administration,” Barnes emphasized, “which can often mean a savings of up to 1% for an investor.”

Barnes provided examples of the manner in which the investments are governed, including:

• An Investment Committee appointed by the Executive Council, comprised of Episcopalians who are investment professionals, attorneys and financial executives

• A regularly reviewed Investment Policy Statement available here or http://www.episcopalchurch.org/sites/default/files/investment_policy_statement_052511.pdf

• Transparency and regular reports available here or
http://www.episcopalchurch.org/sites/default/files/2q12_portfolio_performance_with_graphs.pdf

• An annual report that details all the participating trusts available here or http://www.episcopalchurch.org/sites/default/files/2011_trust_funds_book_w_cover.pdf

• Flexibility to add or withdraw funds monthly


Barnes and the Finance office staff maintain the records, make dividend distributions and provide information for more than 1,050 trust funds for long-term investments available here or http://www.episcopalchurch.org/sites/default/files/2q2012_distribution_report_0.pdf

The staff also provides a short-term investment portfolio that has been especially welcomed by dioceses outside of the US mainland.

More information about investing along with the churchwide endowment can be found at here or http://www.episcopalchurch.org/finance or by contacting Margareth Crosnier de Bellaistre, Director of Investment Management and Banking, margarethcdeb@dfms.org or 212.922.5293.

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