In 2015, the Connecticut Conference launched the Eden Fund for congregations that are concerned about environmental impact. The Eden Fund excludes Fossil Fuel Reserves from all equity holdings.
The Eden Fund’s strategy for equities goes beyond Socially Responsible Investing exclusions (alcohol, tobacco, gambling, defense weapons) to exclude Fossil Fuel Reserves. Working with Parametric Portfolio Associates, LLC, we exclude companies with evidence of owning fossil fuel reserves regardless of their industries, including companies that own greater than 50% of a reserves field, regardless of revenue derived. Fossil Fuel Reserves are defined as proved and probable reserves for coal and proved reserves for oil and natural gas. Evidence of owning reserves includes companies providing the exact volume of reserves, and companies making a statement about their ownership of reserves. Data is provided by MSCI. This is a more rigorous screening than the 100 largest coal companies and 100 largest oil and gas companies that are often used to create Fossil Free portfolios. The Eden Fund employs a similar strategy for fixed income securities as well.
Eden Fund participants are divesting from virtually all of the companies holding fossil fuel reserves.
In addition, the Eden Fund will be providing support for environmental justice initiatives of the Southern New England Conference of the United Church of Christ.
We will continue to evaluate additional screens or stock selection criteria to increase the positive environmental impact of investing in this fund.
Diversification is the cornerstone of prudent investing. Any exclusion strategy reduces diversification, which increases risk. However, our partner uses proprietary strategies to limit tracking error compared to broad market indices. This is a "passive" investment approach, seeking to match the performance of broad market indices.
The overall goal of each Consolidated Trust Fund is to maintain the inflation-adjusted market value of assets, while providing a relatively predictable, growing stream of revenue.
The objective, therefore, is to earn a total return (net of all fees and expenses) equal to or exceeding the CTUCC’s targeted spending rate, currently 4.5%, plus the inflation rate - as measured by the CPI.
Investments are diversified across asset classes, industry sectors, individual companies, and duration of fixed income securities.
In order to meet the investment objective, asset allocation is biased towards equities and other asset classes with equity-like returns. Fixed income securities and other asset classes are used to reduce volatility and hedge investment risks.
The Investment Committee is made up of skilled, experienced volunteers who are members of Connecticut Conference churches.
The Investment Committee meets quarterly to review performance, asset allocation, and other matters.
The CTUCC Investment Committee has assembled a highly qualified team of companies to work with us to meet our objectives. Our investment consultant is Fiduciary Investment Advisors. One administrator is Atlantic Fund Services. Our custodian is MUFG Union Bank.
There are no fees associated with purchases or redemptions in the fund.
Total expenses of the fund, including management, transaction, custodial fees, and fund accounting fees should be between 70 and 80 basis points (0.70% to 0.80% of invested assets)on an annual basis.
There are always risks associated with investing.
There is no guarantee that the Eden Fund will perform as well as, or better than, the Total Return Fund.
The Committee does not endorse the adoption of fossil fuel reserve free strategies, as it is a fiduciary principle to avoid unnecessary risk, even if the risk is modest. The Eden Fund is offered as a option for those congregations that believe that moral considerations should also factor into investment decisions.
Congregations can choose whether and how much to invest in the Eden Fund, but continue to have the option of investing in the Total Return Fund.
The Missionary Society of Connecticut has allocated $8 million of its unrestricted funds functioning as endowment to the Eden Fund, which represents about a quarter of its invested assets.