Investment Performance

Meeting the Challenge

The COVID-19 pandemic had financial implications along with a terrible human toll. Despite the painful and trying times, however, The Church Pension Fund (CPF) held up well during the 2020 fiscal year and it remains financially strong.

Stock markets around the world were lower for the 12 months ending on March 31, 2020, with the declines taking place in the first quarter of 2020 as the global shutdown took hold on businesses, markets, and economies. Some industries such as travel, tourism, oil, and financials have been hit hard, while others have been more resilient, such as technology and consumer staples. Bond markets have generally been positive with increases in value for the fiscal year ending on March 31, 2020, and in the first quarter of 2020.  

CPF’s portfolio is broadly diversified, composed of stocks, bonds, and other assets designed to generate the long-term returns needed to sustain its financial health and ensure that it is sustainable to meet future obligations over time. This diversification has served us well, buffering some of the volatility and market declines. Our investment performance for the three-, five-, and ten-year periods compares the portfolio’s annualized returns with those of two key measures: CPF’s annualized investment goal of 4.5% over inflation and a benchmark based on 67% global stocks (Morgan Stanley Capital International All Country World Index) and 33% US bonds (Bloomberg Barclays Aggregate Bond Index).

Taking into account the results over the past year, CPF has generated an annualized return of 7.7% over 10 years, greater than the investment goal of 6.2% and the market benchmark of 5.5%. Over three and five years, the results are more mixed. CPF has outperformed the market benchmark but is slightly behind the investment goal, due primarily to the recent broader market fluctuations and decline.  

As of March 31, 2020, the value of CPF’s portfolio was $13 billion, lower than a year before, but still sufficient to cover promised future obligations. As of the writing of this report, the portfolio has partially recovered, as equity markets rallied in the spring of 2020 in response to significant federal economic stimuli and bargain hunters moving in to capitalize on lower-priced assets.

The economic headwinds we face may be with us for months or even years to come. While we certainly do not welcome these challenges, we continually plan for them. We have anticipated market corrections, measured the possible impact on the portfolio, and developed scenarios for responding, in the context of a long-term investment approach that remains consistent. We will work through the short-term challenges, remaining focused on our long-term goal of providing financial security for those we serve.

June 2020

Asset Allocation

Investment Portfolio Assets (Billions)

Investment Performance

Annualized total returns (preliminary) for the period ending March 31, 2020
Investment goal* is a return of 4.5% over inflation.
Benchmark Performance** consists of 67% global stocks (Morgan Stanley Capital International All Country World Index) and 33% U.S. bonds (Bloomberg Barclays Aggregate Bond Index).
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