Balanced Social Values Plus Fund (BSVPF)
Type of Fund: Diversified multiple-asset-class fund with an added emphasis on socially responsible investment issues.
Objective: To attain current income and capital appreciation by investing in a broad mix of different types of investments with added emphasis on the socially responsible investing objectives of The United Methodist Church.
Who Should Invest:
- Investors with a relatively long time horizon who seek long-term investment growth and income from exposure to a diversified portfolio comprised of equities, bonds and cash instruments.
- Investors who are willing to experience fluctuations in the value of the fund, though not as much as from holding a fund composed exclusively of common stocks.
- Investors who want to invest only in companies considered to have high ratings with regard to their environmental, social and governance business practices and who would like to more actively support socially responsible investing through the investment in affordable housing mortgages.
Investments: The investment portfolio consists of U.S. stocks, U.S. agency bonds, mortgage-backed securities, cash equivalents and loans used to fund affordable housing mortgages.
Management: Northern Trust Global Investments (NTGI) manages the equity portion of the fund in an index fund based on the MSCI KLD 400 Social Index. The MSCI KLD 400 is composed of 400 U.S. corporations that pass multiple, broad-based social screens, including both exclusionary screens and positive screens. The exclusionary screens align with the social screens of The United Methodist Church. The positive screens seek to identify companies with positive records in environment, diversity, employee relations, human rights, product quality and safety. The General Board manages the fixed-income portion of the portfolio through its affordable housing loans. BNY Mellon Cash Investment Strategies manages the cash-equivalent portion of the fund.
Strategy: BSVPF is a balanced fund whose investment objective is to maximize long-term investment returns while reducing short-term risk through the use of diversification. The fund, which has an actively managed fixed-income component and an indexed equity component, is designed to modestly outperform a mix of indices that represent the performance of the U.S. equity and bond markets. The fund's target allocation is 60% equities, 30% fixed income and 10% cash-equivalents.
The fund originates loans to affordable housing developments which seek to attain a market rate of return commensurate with risk while helping to provide shelter to low- and moderate-income individuals and families.
BSVPF provides additional screening and prohibits investment in the top 100 military weapons contractors and seeks to minimize investment in direct obligations of the U.S. government. The fund's 10% allocation to cash-equivalents is not managed with the same screening guidelines that are applied to BSVPF.
Performance Benchmark, Effective 10/1/2007:
60% MSCI KLD 400 Social Index
30% Barclays Capital Mortgaged Backed Securities Index
10% BofA Merrill Lynch 3-Month Treasury Bill Index
Performance Benchmark Through 9/30/07:
60% Russell 3000 Index
30% Barclays Capital Mortgaged Backed Securities Index
10% Merrill Lynch 90-day Treasury Bill Index
Performance Objective: To produce a return that exceeds that of the performance benchmark by 10 basis points on average per year over a market cycle (three to five years and net of management and fund administration expenses).
Please see the Investment Funds Description for more detailed information regarding BSVPF.
Fund Market Value (as of 03/31/13): $55,168,470.
Annual Performance at Year-End, Net of Fees
Compounded Annual Performance, Net of Fees (Periods Ending 03/31/13):
|Balanced Social Values Plus Fund
|Lipper Balanced Funds Universe **
|Number of Funds
* Prior to October 1, 2007, the benchmark for the Balanced Social Values Plus Fund was 60% Russell 3000 Index, 30% Lehman Aggregate Bond Index and 10% Merrill Lynch 3-month Treasury Bills Index. As of October 1, 2007, the benchmark composition became 60% Domini 400 Social Index, 30% Lehman Mortgaged Backed Securities Index and 10% Merrill Lynch 90-day Treasury Bill Index. In 2008, the Lehman Aggregate Bond Index was renamed the Barclays Capital Aggregate Bond Index and the Merrill Lynch 90-day Treasury Bill Index was renamed the Bank of America Merrill Lynch 3-month Treasury Bill Index. In July 2009, the Domini 400 Social Index was renamed the FTSE KLD 400 Social Index. In 2010, the FTSE KLD 400 Social Index was renamed the MSCI KLD 400 Social Index.
** The comparison universe includes all Wilshire Compass mutual funds included in the predefined universe of Lipper “Objectives” for “Balanced” mutual funds.
All returns for BSVPF are net of all fees and expenses, which include all investment management fees, operating expenses and bank custodial fees. The fund inception was December 31, 1997.
Fund Characteristics (03/31/13)
||MSCI KLD 400
|Wgt Mkt Cap ($MM)
|# of Stocks
Top 10 Stock Holdings (03/31/13)
|Johnson & Johnson
|Proctor & Gamble
|Merck & Co.
|Cisco Systems Inc.
Fund Holdings (as of 3/31/13): Download/view fund holdings in PDF format.
Expense Ratio: All expenses of the fund are deducted from the fund’s net asset value. The expenses include investment management fees, operating expenses, bank custodial fees and miscellaneous fund administration expenses. These expenses are paid directly by BSVPF, and are reflected in the unit price calculated for the fund. The unit price is multiplied by the number of units held in each participant’s account to determine the total value of the participant’s holdings in the fund. BSVPF’s expenses in 2011 were equal to approximately 0.44% of the fund’s total assets.
Lending of Portfolio Securities: The fund seeks to earn additional income by making loans of its portfolio securities to brokers, dealers and other financial institutions. The loans will be secured at all times by cash and liquid high-grade debt obligations. As with any extension of credit, there are risks of delay in recovery and in some cases even loss of rights in the collateral should the borrower fail financially. Additionally, losses could result from the reinvestment of the cash collateral received on loaned securities.