About Our Funds
United Church Funds (UCF) offers a unique ministry that puts the power of the financial markets to work for local churches and organizations of the United Church of Christ. Established in 1909 to administer the Pilgrim Memorial Fund for the benefit of retired pastors, UCF has developed into a comprehensive investment service, managing over $750 million dollars of United Church of Christ assets. Alongside some of the historic endowments of the UCC, the assets entrusted to UCF include the savings, gifts and endowments of local churches, associations, conferences and denominational ministries.
An appealing alternative to commercial brokerage firms, UCF offers a family of nine traditional investment funds, plus two alternatives options — a selection that provides the flexibility and diversity UCC churches and ministries require both for spending and long-term investment growth. Investors may choose the simplicity of one of our funds of funds, or create their own allocations from the blend of asset classes that best suits their risk tolerance, timeline and return goals.
Managed Funds
CASH & EQUIVALENT
Invested primarily in high quality, US Dollar-denominated money market instruments with remaining maturities of 13 months or less, this fund provides investors with the least amount of market risk and consequently the lowest total rate of return over time of UCF’s nine funds.
Pension Boards UCC
The Pension Boards (PB) Fixed Income team manages the Core Fixed Income portfolio, a diversified portfolio comprised of US government and corporate bonds. The PB Fixed Income team comprises long-term investors who seek to capitalize on opportunities that arise when valuations move toward extremes. The PB Fixed Income team believes that over longer periods the majority of returns in the bond market will be derived from yield and not capital appreciation. Since the 2008 financial crisis, tactical adjustments have been driven more often by macro factors such as changes in the economic, political, and regulatory environment. Headquartered at the UCF and Pension Boards offices, the Pension Boards fixed income team manages over $1 billion and has invested on behalf of the UCF since 1987.
FIXED INCOME
Carrying a relatively low degree of market risk and total return over time, the Fixed Income Fund is invested primarily in intermediate and long-term US Dollar-denominated government and investment grade corporate fixed-income obligations.Three organizations manage portions of the Fixed Income Fund on behalf of UCF —
Pension Boards UCC
The Pension Boards (PB) Fixed Income team manages the Core Fixed Income portfolio, a diversified portfolio comprised of US government and corporate bonds. The PB Fixed Income team comprises long-term investors who seek to capitalize on opportunities that arise when valuations move toward extremes. The PB Fixed Income team believes that over longer periods the majority of returns in the bond market will be derived from yield and not capital appreciation. Since the 2008 financial crisis, tactical adjustments have been driven more often by macro factors such as changes in the economic, political, and regulatory environment. Headquartered at the UCF and Pension Boards offices, the Pension Boards fixed income team manages over $1 billion and has invested on behalf of the UCF since 1987.
STANDISH MELLON ASSET MANAGEMENT
Focus: Emerging market debt
Standish manages a diversified emerging markets debt, local-currency portfolio for UCF. Emerging market sovereign debt has historically held higher investment and credit risk than that of developed markets. Standish seeks to earn returns primarily through interest payments and improvement in country credit worthiness. Local-currency means the debt is denominated in the country’s currency and not in US dollars. Standish focuses on rigorous analysis of country credit worthiness and a fundamental perspective on foreign exchange risks along with a strict risk management discipline. Founded in 1933, Standish is based in Boston and manages over $92 billion in various fixed-income strategies.
Western Asset
Western Asset manages the Bank Loan portfolio with a bottom-up credit research focus that stresses capital preservation and income generation as primary objectives. The Bank Loan portfolio is comprised of floating-rate loans made to non-investment grade borrowers. Bank Loans are senior in the capital structure, providing protection in the case of default, and are floating-rate, mitigating the risk of interest rate increases. Founded in 1971, Western Asset is headquartered in Pasadena, CA and manages $459 billion across many strategies.
DOMESTIC CORE EQUITY
A broadly diversified portfolio invested primarily in large capitalization common stock of US-headquartered corporations, this fund may also hold up to 10% of its portfolio in international stocks. Three organizations manage portions of the Domestic Core Equity Fund on behalf of UCF —
Fiduciary Management, Inc.
Fiduciary Management, Inc. (FMI) manages a US large cap portfolio for UCF, employing equity investing strategies, with a focused value approach firmly rooted in fundamental research. Founded in 1980, FMI manages over $15 billion in assets for domestic and international institutions, individual investors and Registered Investment Advisors. FMI also manages a US small cap portfolio for the UCF, utilizing the same disciplined, fundamentally-based approach.
Quantitative Management Associates
The broadly diversified portfolio managed by
Quantitative Management Associates (QMA) on behalf of UCF is invested primarily in large capitalization common stocks of US-headquartered corporations, and may hold up to 10% of its portfolio in international stocks. QMA manages over $83 billion in assets for pension plans, endowments and foundations, and since 1975 has pioneered the use of advanced analytics to enhance the investment decision-making process.
State Street Global Advisors
State Street Global Advisors (SSgA) manages a passive, screened S&P 500 Index for the UCF. The portfolio is managed to replicate the S&P 500 Index but excludes those companies which do not pass the UCF’s Socially Responsible Investing screens. Founded in 1978 and headquartered in Boston, State Street manages over $2 trillion on behalf of corporations, endowments and foundations, pension funds, sovereign wealth funds and other institutions and individuals.
SMALL CAP EQUITY
Carrying the highest degree of risk of any of UCF’s domestic funds, the Small Cap Equity Fund invests primarily in a diversified portfolio of US small capitalization stocks — typically with an average market capitalization under $1.5 billion. Three organizations manage portions of the Small Cap Equity Fund on behalf of UCF —
Dimensional Fund Advisors
The US small cap value portfolio managed by
Dimensional seeks to purchase a broad and diverse group of the common stock of US small cap companies perceived to be value stocks at the time of purchase — companies with market capitalizations within the smallest 10% of the market universe, or smaller than the 1,000th largest US company. After identifying the aggregate market capitalization break, DFA applies a value screen to the universe — securities are considered value stocks primarily because a company’s shares have a high book value in relation to their market value. Launched in 1981, DFA currently manages over $235 billion in various strategies based on the seminal research by noted professors Eugene Fama and Kenneth French.
Fiduciary Management, Inc.
Fiduciary Managment, Inc. (FMI) manages a US large cap portfolio for UCF, employing equity investing strategies, with a focused value approach firmly rooted in fundamental research. Founded in 1980, FMI manages over $15 billion in assets for domestic and international institutions, individual investors and Registered Investment Advisors. FMI also manages a US small cap portfolio for the UCF, utilizing the same disciplined, fundamentally-based approach.
Westfield Capital Management
Westfield manages a US small cap growth portfolio, utilizing a team approach to stock analysis based on in-depth, fundamental investing. With a focus on domestic growth equities, Westfield seeks high earnings growth companies trading at reasonable price-earnings ratios and valuations. Founded in 1989, Westfield is located in Boston and manages over $14 billion.
INTERNATIONAL EQUITY
Invested largely in common stock of companies headquartered in developed countries, the International Equity Fund offers the opportunity to gain from even broader diversification with 15-25% invested in emerging markets. Four organizations manage portfolios of the International Equity Fund on behalf of UCF —
Aberdeen Asset Management
Aberdeen oversees an emerging markets portfolio — a segment of the market that encompasses the fastest growing economies in the world including China, India, Brazil and Russia. As developing nations and/or economies, emerging markets have historically held higher investment risks. Aberdeen employs an international cadre of analysts who utilize a fundamental process emphasizing company visits and on-the-ground due diligence. The firm’s style is characterized by very long holding periods and low turnover, minimizing transaction costs and displaying the conviction that comes with extensive research. Based in Scotland, Aberdeen was founded in 1983 and manages over $286 billion.
Baillie Gifford
Baillie Gifford manages an International Growth portfolio, utilizing a team approach to portfolio construction based on deep research-oriented, bottom-up, fundamental investing. Baillie seeks to identify companies capable of sustaining above-average growth rates while trading at a reasonable valuation. Founded in 1908, Baillie is located in Edinburgh, Scotland and manages over $175 billion.
LSV Asset Management
LSV manages a non-US large cap value portfolio that excludes US and emerging market stocks, focusing instead on the international developed markets including Japan, Europe and the UK. LSV uses a quantitative investment approach to choose out-of-favor (undervalued) stocks, believing these securities will produce superior future returns if their future growth exceeds the market’s low expectations. Located in Chicago, LSV was founded in 1994 and manages approximately $59 billion.
Oaktree Capital Management
Oaktree manages an emerging markets portfolio for UCF, utilizing a fundamental research process of investing complemented by robust valuation models. Oaktree’s proprietary valuation models filter market opportunities down to potential companies that are trading at a significant discount compared to their intrinsic value. Oaktree, through numerous and extensive management visits, then applies a thorough fundamental analysis, investing only in companies with very strong management teams, quality business models, strong market position and industry growth potential. Oaktree was founded in 1995, is headquartered in Los Angeles and currently manages approximately $80 billion in assets across all their strategies.
ALTERNATIVES
The Alternatives Fund invests in a combination of hedge funds, real estate funds, real asset funds and other investments, seeking to increase diversification across additional asset classes and achieve returns that are not correlated with the indices of UCF’s current investment options. Four organizations manage portfolios of the International Equity Fund on behalf of UCF —
Abbey Capital
Abbey Capital manages a diversified portfolio of Global Macro managers for UCF in a fund of hedge funds structure. Alternative investments, such as hedge funds, when included with equity and fixed income portfolios have historically enhanced diversification, reduced volatility, and preserved wealth over the long term. Global Macro strategies, also known as managed futures, are investments in currency, commodities and derivatives structured by complex trading rules and models. Abbey overlays a strict risk management discipline to determine allocations to its selection of managers. Founded in 2000, Abbey Capital is based in Dublin, Ireland, and manages $3.6 billion.
Evanston Capital Management
Evanston Capital Management (ECM) manages a fund of hedge funds. Their Weatherlow Fund employs a global, multi-strategy approach focused around long-short equity funds. Evanston employs a fundamental and highly selective process in choosing underlying funds where a sustainable edge appears present. Additionally, the team uses their experience to tilt the portfolio toward strategies that may outperform depending on the anticipated environments. Evanston manages $4.4 billion, is headquartered in Evanston, Ill. and was founded in 2002.
Heitman
The diversified North American Real Estate portfolio managed by
Heitman focuses on high quality investments in major metropolitan areas. Heitman’s portfolio is diversified by geography with investments across the US in office space, apartments, retail, industrial use, and self-storage sites. Heitman seeks to generate returns from both the income of its assets as well as price appreciation of the properties. Founded in 1966, Heitman is based in Chicago and manages over $26 billion across a variety of global real estate funds.
Magnitude Capital
Magnitude Capital manages a fund of hedge funds in a global, multi-strategy portfolio. Magnitude orients its portfolio mainly to relative-value funds that provide active returns and offer diversification to the primary returns streams of equity and fixed income markets. Magnitude employs a highly analytical approach to evaluating managers and constructing this portfolio. Headquartered in New York, Magnitude was founded in 2002 and manages $3 billion.
Funds of Funds
TOTAL EQUITY FUND
Comprising units of the Domestic Core, Small Cap and International Equity Funds, the Total Equity Fund invests primarily in a broadly diversified portfolio of domestic and international common stocks of both small and large capitalization, and carries a higher degree of risk than UCF’s Balanced Funds.
CONSERVATIVE BALANCED FUND
Comprising units of the Fixed Income Fund and Total Equity Fund, with a higher allocation of fixed-income to equities, the Conservative Balanced Fund offers the lowest return potential of UCF’s three Balanced Funds over time, but also the lowest market risk. Target allocation: 65% Fixed Income, 35% Total Equity
MODERATE BALANCED FUND
Comprising units of the Fixed Income and Total Equity Funds, the Moderate Balanced Fund pursues a middle-of -the-road approach that emphasizes stock for higher capital appreciation potential, while maintaining a significant fixed-income component to temper market volatility. Target allocation: 40% Fixed Income, 60% Total Equity
AGGRESSIVE BALANCED FUND
Comprising units of the Fixed Income and Total Equity Funds, with the highest allocation to equities and correspondingly higher degree of market risk, the Aggressive Balanced Fund offers the highest return potential of the UCF’s three balanced funds. Target allocation: 25% Fixed Income, 75% Total Equity
