UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09025
New Covenant Funds
(Exact name of registrant as specified in charter)
200 East Twelfth Street, Jeffersonville, IN 47130
(Address of principal executive offices) (Zip code)
Citi Fund Services, 3435 Stelzer Road, Columbus, OH 43219
(Name and address of agent for service)
Registrant’s telephone number, including area code: 614-470-8000
Date of fiscal year end: June 30
Date of reporting period: December 31, 2007
Item 1. | Reports to Stockholders. |
You can get free copies of reports and the SAI, or request other information and discuss your questions about the Funds by contacting a broker that sells the Funds, or by contacting the Funds at:
New Covenant Funds
3435 Stelzer Road
Columbus, OH 43219
Telephone: 800-858-6127
Internet: http://www.NewCovenantFunds.com
3435 Stelzer Road
Columbus, OH 43219
Telephone: 800-858-6127
Internet: http://www.NewCovenantFunds.com
You can review and get copies of the Funds’ reports and SAI at the Public Reference Room of the Securities and Exchange Commission. You can get text-only copies:
• | For a duplicating fee: by writing the Public Reference Section of the Commission, Washington, DC 20549-6009, by calling 202-942-8090, or by electronic request by e-mailing the SEC at the following address: publicinfo@sec.gov | |
• | Free from the Commission’s website at http://www.sec.gov. |
table of contents
Shareholder Letter | 2 | |||
Portfolios of Investments | 5 | |||
Statements of Assets and Liabilities | 18 | |||
Statements of Operations | 19 | |||
Statements of Changes in Net Assets | 20 | |||
Financial Highlights | 22 | |||
Notes to Financial Statements | 26 | |||
Supplemental Data | 32 |
to our shareholders
NEW COVENANT FUNDS
December 31, 2007
December 31, 2007
Dear Shareholders:
We are pleased to present this semi-annual report covering the six-month period between July 1, 2007 and December 31, 2007. The pace of economic growth slowed during the period, contributing to weak stock market returns. Bond market performance was mixed: Treasury securities posted strong gains, but other types of bonds generally lost value.
Rising defaults on subprime mortgages contributed to a credit crunch during this period, threatening to slow economic growth. Many borrowers with weak credit took out adjustable-rate mortgages during the housing boom. As interest rates on the loans reset, borrowers defaulted in increasingly large numbers, causing lenders to tighten credit standards. The defaults negatively affected securities backed by subprime mortgages, as well as a variety of other financial instruments. The financial system faced reduced liquidity as a result.
Commodity prices rose during the period—particularly the price of oil, which approached $100 a barrel. Inflation nevertheless remained relatively stable. While inflation rose on a year-over-year basis, its increase was relatively mild.
The Federal Reserve (the “Fed”) in August responded to the credit and liquidity crises by cutting the discount rate, which governs the rate charged to banks for short-term loans, by half a percentage point. The policy-setting board then lowered the federal funds rate three times during the fall, bringing this target short-term rate to 4.25%. Those moves reflected the Fed’s growing concern about the pace of economic growth, which it believed to be a greater threat than inflation.
The stock market was volatile during this six-month period. Stocks advanced between July and September despite periodic drops related to the liquidity crunch, largely on the strength of the Fed’s actions to increase liquidity. Stocks experienced sustained weakness in the second half of the period, however, due to uncertainty about future economic growth. While consumer spending remained healthy, the housing market continued to struggle and year-end statistics showed a weakening employment picture. The Standard & Poor’s 500 Index1 (the “S&P 500”) fell 1.37% for the six-month period as a whole.
Financials stocks were among the market’s worst performers, as they suffered due to the fallout from the subprime mortgage crisis. Consumer stocks also suffered, as investors worried that the housing slump and high energy prices would restrict consumer spending. Energy and materials stocks performed well on the strength of rising commodity prices, while consumer staples and technology stocks benefited from strong global demand.
Growth stocks generally outperformed value stocks, as strength in technology stocks supported growth indices and weakness in financial stocks weighed down value indices. The Russell 3000® Value Index, a broad gauge of value-priced stocks, lost 6.62% for the period, compared to a 2.93% return for the Russell 3000® Growth Index.
Meanwhile, large stocks continued their recent trend of outperforming shares in small companies. Large, multinational companies benefited from a weaker U.S. dollar, which made their products and services more competitive in foreign markets while increasing the value of profits earned outside of the U.S. The Russell Top 200® Index, which tracks the performance of the market’s largest stocks, returned -0.20%, while the Russell 2000® Index of small caps lost 7.53%.
In the bond market, Treasury securities benefited from investors’ search for quality. Spreads between yields on Treasuries and other fixed-income securities widened throughout the period, due to lack of liquidity and lack of demand on non-Treasury issues. Corporate borrowers experienced tighter credit standards, but default rates on corporate bonds remained stable. The Lehman Brothers U.S. Aggregate Index2 returned 5.93% for the six-month period.
Total Returns* as of December 31, 2007 | Aggregate | Average Annual | ||||||||||||||||||||||
Latest Qtr | Six Months | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||
New Covenant Growth Fund | -3.24 | % | -2.48 | % | 5.09 | % | 8.87 | % | 12.78 | % | 4.41 | % | ||||||||||||
New Covenant Income Fund | 2.05 | % | 4.59 | % | 5.65 | % | 3.83 | % | 3.77 | % | 5.09 | % | ||||||||||||
New Covenant Balanced Growth Fund | -1.16 | % | 0.40 | % | 5.58 | % | 7.00 | % | 9.29 | % | 5.07 | % | ||||||||||||
New Covenant Balanced Income Fund | 0.16 | % | 2.02 | % | 5.59 | % | 5.72 | % | 7.05 | % | 5.11 | % |
Expense Ratios†
Gross Expense Ratio | Net Expense Ratio | |||||||
New Covenant Growth Fund | 1.34 | % | 1.08 | % | ||||
New Covenant Income Fund | 1.10 | % | 0.85 | % | ||||
New Covenant Balanced Growth Fund | 1.35 | % | 1.10 | % | ||||
New Covenant Balanced Income Fund | 1.33 | % | 1.08 | % |
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 877-835-4531 or visit our website at www.NewCovenantFunds.com.
* | The performance information for all of the New Covenant Funds reflects performance prior to the July 1, 1999 inception date of the Funds. It represents performance records of the private pools previously managed by the Presbyterian Church (U.S.A.) Foundation, the predecessor entity to the Advisor. These private pools had investment objectives and policies in all material respects equivalent to those of the Funds. They were not subject to the requirements of the Investment Company Act of 1940 or the Internal Revenue Code of 1986, which may adversely affect performance results. The performance has been restated to reflect the total expenses of the Funds. | |
† | The Gross Expense Ratio is based on the most recent prospectus. The Fund’s advisor has contractually agreed to limit the fees for the period from July 1, 2007 through June 30, 2008. The Net Expense Ratio is based upon the Gross Expenses less the fees waived by the Advisor. Had this waiver not been in effect, the performance would have been lower. For the New Covenant Income, Balanced Growth and Balanced Income Funds the ratios also include those expenses incurred indirectly by the Fund as a result of investments in shares of one or more investment companies. Excluding these acquired fund fees and expenses, the Expense Ratios would be as follows: Income Fund: Gross, 1.09% and Net, 0.84%; Balanced Growth Fund: Gross, 0.37% and Net, 0.12%; and Balanced Income Fund: Gross, 0.40% and Net, 0.15%. |
2
to our shareholders (continued)
NEW COVENANT FUNDS
December 31, 2007
December 31, 2007
The New Covenant Growth Fund
The New Covenant Growth Fund returned -2.48% during the six-month period through December 31, 2007. That compared to a -1.37% return for the Fund’s benchmark, the S&P 500 Index.
This Fund takes a core-satellite approach to diversification4: It invests the majority of its assets in a core portfolio and adds satellite portfolios of value, growth and international stocks. The Fund also spreads its assets among small-, mid- and large-cap shares in order to gain exposure to the broad equity market.3
The Fund’s diversification weighed on returns relative to the benchmark during the first half of the period, although its relative performance rebounded during the second half of the period. The Fund’s allocation to value shares detracted from absolute performance. Growth stocks in both large and small companies boosted relative returns, while international shares contributed positively to both absolute and relative performance.3
The New Covenant Income Fund
The New Covenant Income Fund returned 4.59% during the six-month period ended December 31, 2007. That compared to a 5.93% return for its benchmark, the Lehman Brothers U.S. Aggregate Index.
The Fund’s underweight position in Treasury securities detracted from performance relative to the benchmark. As bond spreads widened, the Fund’s manager further reduced its Treasury holdings in order to take advantage of attractive pricing on other types of bonds. This strategy reduced relative returns during the six-month period.3
The New Covenant Balanced Growth Fund
The New Covenant Balanced Growth Fund gained 0.40% during the six-month period ended December 31, 2007. That compared to a 1.57% return for its benchmark, a composite index comprised of a 60% weighting in the S&P 500 Index and a 40% weighting in the Lehman Brothers U.S. Aggregate Index.
The Balanced Growth Fund trailed its composite benchmark due to underperformance from the Growth Fund and the Income Fund. As of December 31, 2007, the Fund held a neutral asset allocation of 60.0% of assets in the Growth Fund and 40.0% in the Income Fund.3
New Covenant Balanced Income Fund
The New Covenant Balanced Income Fund gained 2.02% during the six-month period ended December 31, 2007. That compared to a 3.39% return for its benchmark, a composite index with a 35% allocation to the S&P 500 Index and a 65% allocation to the Lehman Brothers U.S. Aggregate Index.
The underperformance of both the Growth Fund and the Income Fund relative to their benchmarks detracted from the Balanced Income Fund’s performance relative to its composite index. The Fund held a neutral asset allocation as of the end of the period, with 35% of its assets in the Growth Fund and 65% of assets in the Income Fund.
Thank you for choosing the New Covenant Funds. We look forward to helping you achieve your most important financial objectives. If you have questions or would like to receive a prospectus, please call us at 877-835-4531.
George W. Rue III
Senior Vice President and Chief Investment Officer
NCF Investment Department of New Covenant Trust Company, N.A.5
Investment Concerns:
Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of the Fund will fluctuate as the value of the securities in the portfolio changes. Common stocks, and funds investing in common stocks, generally provide greater return potential when compared with other types of investments. International investing involves increased risk and volatility.
Bond Funds will tend to experience smaller fluctuations in value than stock funds; therefore, fluctuations in price, especially for longer-term issues and in environments of rising interest rates, should be anticipated. Asset-backed and mortgage-backed securities are generally subject to higher prepayment risks than other types of debt securities, which can limit the potential for gain in a declining interest rate environment and increase the potential for loss in a rising interest rate environment. Mortgage-backed securities may also be structured so that they are particularly sensitive to interest rates. A high rate of defaults on the mortgages held by a mortgage pool may limit the pool’s ability to make payments to the fund if the fund holds securities that are subordinate to other interest in the same mortgage pool; the risk of such defaults is generally higher in mortgage pools that include subprime mortgages. Other principal risks associated with securities in the Income Fund are the following: Interest Rate Risk, Call Risk, Credit Risk, Put and Call Option Risk, Foreign Securities Risk, Options and Futures Risk, Government Securities Risk and Rebalancing Risk. For a more complete description of these risks, please consult the Prospectus.
Past performance does not guarantee future results.
1 | The Standard & Poor’s 500 Index (“S&P 500”) of stocks is an unmanaged, capitalization weighted index that measures the performance of 500 large-capitalization stocks representing all major industries. It is not possible to invest directly in any index. | |
2 | The Lehman Brothers U.S. Aggregate Index is an unmanaged index of U.S. bonds, which includes reinvestment of any earnings. It is widely used to measure the overall performance of the U.S. bond market. It is not possible to invest directly in any index. | |
3 | Portfolio composition is subject to change. | |
4 | Diversification does not guarantee a profit nor protect against a loss. | |
5 | A subsidiary of the Presbyterian Foundation. |
3
to our shareholders (continued)
NEW COVENANT FUNDS
December 31, 2007
December 31, 2007
Portfolio Allocation (unaudited) (subject to change)
GROWTH FUND:***
Percentage of | ||||
Security Allocation | Market Value | |||
Information Technology | 18.3 | % | ||
Health Care | 17.5 | % | ||
Financials | 16.9 | % | ||
Industrials | 13.1 | % | ||
Consumer Discretionary | 11.4 | % | ||
Energy | 10.4 | % | ||
Consumer Staples | 6.4 | % | ||
Materials | 2.3 | % | ||
Telecommunications | 1.9 | % | ||
Utilities | 1.8 | % | ||
Total | 100 | % |
BALANCED GROWTH FUND:
Percentage of | ||||
Security Allocation | Market Value | |||
New Covenant Growth Fund | 62.4 | % | ||
New Covenant Income Fund | 36.5 | % | ||
Cash Equivalents | 1.1 | % | ||
Total | 100 | % |
INCOME FUND:***
Percentage of | ||||
Security Allocation | Market Value | |||
Non-Government Agency/MBS | 43.0 | % | ||
Government Agency/MBS | 25.8 | % | ||
Corporates | 24.0 | % | ||
Cash | 5.4 | % | ||
Asset Backed | 1.5 | % | ||
Treasuries | 0.3 | % | ||
Total | 100 | % |
BALANCED INCOME FUND:
Security Allocation | Percentage of Market Value | |||
New Covenant Income Fund | 60.7 | % | ||
New Covenant Growth Fund | 37.8 | % | ||
Cash Equivalents | 1.5 | % | ||
Total | 100 | % |
*** | Amounts do not include investments held as collateral for loaned securities. |
4
portfolio of investments
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (97.3%) | ||||||||
Advertising (0.6%) | ||||||||
385,400 | Interpublic Group of Cos., Inc.(a) (L) | $ | 3,125,594 | |||||
3,840 | Live Nation, Inc.(a) (L) | 55,757 | ||||||
45,400 | Omnicom Group, Inc. | 2,157,862 | ||||||
7,663 | PagesJaunes SA | 153,587 | ||||||
5,492,800 | ||||||||
Aerospace/Defense (0.1%) | ||||||||
8,600 | BE Aerospace, Inc.(a) | 454,940 | ||||||
29,700 | Empresa Brasileira de Aeronautica SA(b) | 336,400 | ||||||
1,100 | TransDigm Group, Inc.(a) | 49,687 | ||||||
841,027 | ||||||||
Automotive (0.9%) | ||||||||
28,200 | BorgWarner, Inc. | 1,365,162 | ||||||
12,700 | DaimlerChrysler AG | 1,229,266 | ||||||
108,600 | Ford Motor Co.(a) (L) | 730,878 | ||||||
59,600 | Goodyear Tire & Rubber Co.(a) | 1,681,912 | ||||||
42,100 | Nissan Motor Co., Ltd. | 463,590 | ||||||
3,700 | Peugeot SA | 280,459 | ||||||
132 | Porsche AG | 266,512 | ||||||
20,200 | Suzuki Motor Corp. | 609,436 | ||||||
8,220 | Tenneco Automotive, Inc.(a) (L) | 214,295 | ||||||
84,200 | TRW Automotive Holdings Corp.(a) | 1,759,780 | ||||||
8,601,290 | ||||||||
Banks (4.8%) | ||||||||
44,089 | Akbank TAS | 327,282 | ||||||
12,500 | Allied Irish Banks PLC | 286,369 | ||||||
40,600 | Banco Bilbao Vizcaya Argentaria SA | 994,761 | ||||||
16,900 | Banco Santander SA | 365,404 | ||||||
127,900 | Bank Hapoalim Ltd. | 639,167 | ||||||
32,700 | Bank Muscat SA — GDR(a) | 652,303 | ||||||
359,191 | Bank of America Corp. | 14,820,221 | ||||||
81,800 | Bank of East Asia Ltd. | 559,714 | ||||||
4,700 | Banque Nationale de Paris | 509,961 | ||||||
16,500 | Barclays PLC | 165,522 | ||||||
253,000 | China Construction Bank Corp. | 214,487 | ||||||
4,990 | City Holding Co.(L) | 168,862 | ||||||
47,000 | Comerica, Inc. | 2,045,910 | ||||||
29,000 | Commerce Bancorp, Inc. | 1,106,060 | ||||||
3,600 | Commercial International Bank | 60,013 | ||||||
6,350 | Credit Suisse Group | 382,043 | ||||||
4,800 | Deutsche Bank AG | 627,893 | ||||||
6,300 | East West Bancorp, Inc.(L) | 152,649 | ||||||
1,660 | First Citizens Bancshares, Inc., Class A (L) | 242,111 | ||||||
3,500 | First Community Bancorp (L) | 144,340 | ||||||
4,600 | Frontier Financial Corp. (L) | 85,422 | ||||||
35,108 | HSBC Holdings PLC | 588,383 | ||||||
6,280 | International Bancshares Corp. (L) | 131,503 | ||||||
49,756 | JPMorgan Chase & Co. | 2,171,849 | ||||||
3,232 | Kookmin Bank — ADR(a) | 236,970 | ||||||
66,000 | Mitsubishi Tokyo Financial Group, Inc. | 618,639 | ||||||
129 | Mizuho Financial Group, Inc. | 616,705 | ||||||
1,120,000 | PT Bank Mandiri | 417,465 | ||||||
2,058 | Raiffeisen International Bank Holding AG | 311,691 | ||||||
50,000 | Royal Bank of Scotland Group PLC | 441,870 | ||||||
2,090 | SCBT Financial Corp. (L) | 66,190 | ||||||
1,580 | Societe Generale | 228,509 | ||||||
29,400 | Standard Bank Ltd. | 430,906 | ||||||
6,500 | Standard Chartered PLC | 238,570 | ||||||
30,100 | State Street Corp. | 2,444,120 | ||||||
178 | Sumitomo Mitsui Financial Group, Inc. | 1,333,805 | ||||||
151,400 | U.S. Bancorp | 4,805,436 |
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Banks (cont.) | ||||||||
3,700 | UCBH Holdings, Inc.(L) | $ | 52,392 | |||||
8,580 | UMB Financial Corp.(L) | 329,129 | ||||||
101,400 | Wachovia Corp. | 3,856,242 | ||||||
70,900 | Wells Fargo & Co. | 2,140,471 | ||||||
87,000 | Yapi ve Kredi Bankasi AS(a) | 305,836 | ||||||
46,317,175 | ||||||||
Chemicals (1.2%) | ||||||||
3,600 | Akzo Nobel NV | 288,351 | ||||||
4,260 | CF Industries Holdings, Inc. | 468,856 | ||||||
2,670 | Chemed Corporation(L) | 149,200 | ||||||
30,900 | Cytec Industries, Inc.(L) | 1,902,822 | ||||||
20,600 | Metabolix, Inc.(a) (L) | 490,280 | ||||||
3,400 | Methanex Corp. | 94,967 | ||||||
42,500 | Mosaic Co., Inc.(a) | 4,009,450 | ||||||
1,040 | OM Group, Inc.(a) (L) | 59,842 | ||||||
17,400 | Potash Corp. of Saskatchewan, Inc. | 2,530,380 | ||||||
5,900 | Rhodia SA(a) | 227,706 | ||||||
392,000 | Sinochem Hong Kong Holdings Ltd.(L) | 366,012 | ||||||
57,000 | Sumitomo Chemical Co., Ltd. | 508,764 | ||||||
3,280 | Terra Industries, Inc.(a) (L) | 156,653 | ||||||
21,500 | U.S. BioEnergy Corp.(a) (L) | 251,765 | ||||||
8,034 | Uralkali — GDR(a) (L) | 299,266 | ||||||
3,800 | W.R. Grace & Co.(a) (L) | 99,484 | ||||||
11,903,798 | ||||||||
Commercial Services (2.5%) | ||||||||
9,479 | Aaron Rents, Inc.(L) | 182,376 | ||||||
180,100 | Accenture Ltd., Class A | 6,489,003 | ||||||
6,419 | Adecco SA | 347,349 | ||||||
39,001 | Brambles Ltd. | 394,731 | ||||||
73,600 | CIT Group, Inc. | 1,768,608 | ||||||
10,270 | CSG Systems International, Inc.(a) (L) | 151,175 | ||||||
5,470 | Dollar Financial Corp.(a) (L) | 167,874 | ||||||
6,800 | Genpact Ltd.(a) | 103,564 | ||||||
64,200 | IAC/InterActiveCorp(a) | 1,728,264 | ||||||
4,900 | ICF International, Inc.(a) (L) | 123,774 | ||||||
52,100 | Manpower, Inc. | 2,964,490 | ||||||
1,580 | Pre-Paid Legal Services, Inc.(a) | 87,453 | ||||||
87,700 | Rentokil Initial PLC | 211,041 | ||||||
24,800 | Robert Half International, Inc. | 670,592 | ||||||
1,540 | Steiner Leisure Ltd.(a) (L) | 68,006 | ||||||
300 | Strayer Education, Inc. | 51,174 | ||||||
4,010 | Watson Wyatt Worldwide, Inc.(L) | 186,104 | ||||||
91,400 | Western Union Co. | 2,219,192 | ||||||
408,900 | Xerox Corp.(a) | 6,620,091 | ||||||
24,534,861 | ||||||||
Computer Services and Software (8.1%) | ||||||||
21,200 | Activision, Inc.(a) | 629,640 | ||||||
22,210 | Actuate Corp.(a) (L) | 172,572 | ||||||
32,900 | Affiliated Computer Services Inc., Class A(a) | 1,483,790 | ||||||
4,380 | ANSYS, Inc.(a) (L) | 181,595 | ||||||
31,800 | Apple Computer, Inc.(a) | 6,298,944 | ||||||
83,700 | Autodesk, Inc.(a) | 4,164,912 | ||||||
47,900 | Automatic Data Processing, Inc. | 2,132,987 | ||||||
29,830 | Avocent Corp.(a) (L) | 695,337 | ||||||
3,590 | Belden CDT, Inc.(L) | 159,755 | ||||||
18,840 | Brocade Communications Systems, Inc.(a) | 138,286 | ||||||
4,220 | Chordiant Software, Inc.(a) | 36,081 | ||||||
75,500 | Cisco Systems, Inc.(a) | 2,043,785 | ||||||
15,900 | Commvault Systems, Inc.(a) | 336,762 | ||||||
3,990 | Comsys IT Partners, Inc.(a) (L) | 62,962 |
See accompanying notes to financial statements.
5
portfolio of investments (continued)
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Computer Services and Software (cont.) | ||||||||
5,400 | Dassault Systemes SA | $ | 319,639 | |||||
3,670 | Earthlink, Inc.(a) (L) | 25,947 | ||||||
4,700 | FactSet Research Systems, Inc. | 261,790 | ||||||
251,800 | Hewlett Packard Co. | 12,710,864 | ||||||
4,810 | High Tech Computer Corp. — GDR | 355,324 | ||||||
8,700 | Immersion Corp.(a) (L) | 112,665 | ||||||
5,700 | Infosys Technologies Ltd. | 258,552 | ||||||
75,100 | International Business Machines Corp. | 8,118,310 | ||||||
86,700 | Intuit, Inc.(a) | 2,740,587 | ||||||
10,080 | Jack Henry & Associates, Inc.(L) | 245,347 | ||||||
4,769 | L-1 Identity Solutions, Inc.(a) (L) | 85,604 | ||||||
8,500 | Longtop Financial Technologies Ltd. — ADR(a) | 201,280 | ||||||
6,030 | Magma Design Automation, Inc.(a) (L) | 73,626 | ||||||
8,100 | MedAssets, Inc.(a) (L) | 193,914 | ||||||
418,600 | Microsoft Corp. | 14,902,160 | ||||||
87,700 | Network Appliance, Inc.(a) | 2,188,992 | ||||||
404,800 | Oracle Corp.(a) | 9,140,384 | ||||||
4,300 | Oracle Corp. Japan | 189,785 | ||||||
7,220 | Photronics, Inc.(a) (L) | 90,033 | ||||||
3,630 | Progress Software Corp.(a) (L) | 122,258 | ||||||
9,950 | Radyne Corp.(a) (L) | 91,540 | ||||||
95,100 | Red Hats, Inc.(a) (L) | 1,981,884 | ||||||
19,300 | Riverbed Technology, Inc.(a) | 516,082 | ||||||
2,750 | SPSS, Inc.(a) (L) | 98,753 | ||||||
131,375 | Sun Microsystems, Inc.(a) | 2,381,829 | ||||||
5,220 | Sybase, Inc.(a) (L) | 136,190 | ||||||
3,320 | Syntel, Inc.(L) | 127,886 | ||||||
32,500 | THQ, Inc.(a) (L) | 916,175 | ||||||
8,000 | Trend Micro, Inc. | 286,482 | ||||||
12,400 | United Online, Inc.(L) | 146,568 | ||||||
1,750 | Vasco Data Security International, Inc.(a) (L) | 48,860 | ||||||
97,500 | Wind River Systems, Inc.(a) (L) | 870,675 | ||||||
78,477,393 | ||||||||
Construction and Building Materials (1.7%) | ||||||||
16,600 | AGCO Corp.(a) | 1,128,468 | ||||||
4,780 | Apogee Enterprises, Inc.(L) | 81,786 | ||||||
42,800 | Aveng Ltd.(L) | 381,410 | ||||||
25,430 | Bouygues SA | 2,119,043 | ||||||
18,576 | Cemex S.A.B. de CV — ADR | 480,190 | ||||||
2,750 | Ceradyne, Inc.(a) (L) | 129,057 | ||||||
112,000 | China Communications Construction Co., Ltd. | 293,758 | ||||||
13,481 | CRH PLC | 467,472 | ||||||
1,920 | Drew Industries, Inc.(a) (L) | 52,608 | ||||||
13,240 | Emcor Group, Inc.(a) (L) | 312,861 | ||||||
16,200 | Foster Wheeler Ltd.(a) | 2,511,324 | ||||||
20,100 | Gujarat Ambuja Cement Ltd. — ADR | 75,174 | ||||||
70,600 | Gujarat Ambuja Cement Ltd. — GDR (b) | 263,394 | ||||||
10,841 | Holcim Ltd. | 1,161,775 | ||||||
34,000 | Jacobs Engineering Group, Inc.(a) | 3,250,740 | ||||||
1,800 | Lafarge SA | 327,612 | ||||||
5,762 | Orascom Construction Industries — GDR | 1,195,383 | ||||||
1,000 | Orascom Construction Industries — GDR (b) | 207,460 | ||||||
1,980 | Perini Corp.(a) | 82,012 | ||||||
14,800 | Persimmon PLC | 235,664 | ||||||
43,200 | Stanley Works | 2,094,336 | ||||||
16,851,527 | ||||||||
Consumer Products (3.4%) | ||||||||
53,800 | Abercrombie & Fitch Co., Class A | 4,302,386 | ||||||
60,309 | Amcor Ltd. | 365,811 | ||||||
4,320 | Blyth, Inc. | 94,781 | ||||||
46,000 | Cintas Corp. | 1,546,520 |
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Consumer Products (cont.) | ||||||||
2,320 | Conn’s, Inc.(a) (L) | $ | 39,695 | |||||
41,300 | Crocs, Inc.(a) (L) | 1,520,253 | ||||||
1,690 | Deckers Outdoor Corp.(a) (L) | 262,051 | ||||||
5,820 | Eddie Bauer Holdings, Inc.(a) | 36,957 | ||||||
3,320 | Elizabeth Arden, Inc.(a) (L) | 67,562 | ||||||
5,500 | Guess?, Inc.(L) | 208,395 | ||||||
2,700 | Herman Miller, Inc. | 87,453 | ||||||
10,580 | Hot Topic, Inc.(a) (L) | 61,576 | ||||||
3,190 | Jakks Pacific, Inc.(a) (L) | 75,316 | ||||||
103,000 | Kimberly-Clark Corp. | 7,142,020 | ||||||
8,100 | L’OREAL SA(L) | 1,160,222 | ||||||
5,070 | Mannatech, Inc.(L) | 32,042 | ||||||
67,100 | Newell Rubbermaid, Inc. | 1,736,548 | ||||||
83,360 | NIKE, Inc., Class B | 5,355,046 | ||||||
2,300 | Nintendo Co., Ltd. | 1,377,529 | ||||||
9,900 | Phillips-Van Heusen Corp. | 364,914 | ||||||
63,022 | Procter & Gamble Co. | 4,627,075 | ||||||
6,570 | Skechers U.S.A., Inc., Class A(a) | 128,181 | ||||||
89,900 | Tempur-Pedic International, Inc.(L) | 2,334,703 | ||||||
1,500 | Tupperware Corp.(L) | 49,545 | ||||||
5,300 | Uni-Charm Corp.(L) | 335,461 | ||||||
2,520 | Warnaco Group, Inc.(a) (L) | 87,696 | ||||||
33,399,738 | ||||||||
Diversified Operations (2.0%) | ||||||||
1,290 | Actuant Corp.(L) | 43,873 | ||||||
4,400 | Acuity Brands, Inc.(L) | 198,000 | ||||||
155,000 | BAE Systems | 1,536,394 | ||||||
39,000 | Capitaland Ltd. | 169,930 | ||||||
414,900 | General Electric Co. | 15,380,343 | ||||||
32,700 | Martha Stewart Living Omnimedia, Inc., Class A(a) (L) | 303,129 | ||||||
2,600 | McCormick & Co., Inc. | 98,566 | ||||||
21,000 | Mitsubishi Corp. | 575,291 | ||||||
1,000 | PS Business Parks, Inc. | 52,550 | ||||||
5,180 | Rofin-Sinar Technologies, Inc.(a) (L) | 249,210 | ||||||
51,000 | Sumitomo Corp. | 724,593 | ||||||
30,000 | Swire Pacific Ltd., Class A | 413,626 | ||||||
19,745,505 | ||||||||
Electronics (4.7%) | ||||||||
6,260 | Amis Holdings, Inc.(a) (L) | 62,725 | ||||||
81,000 | Applied Materials, Inc. | 1,438,560 | ||||||
8,400 | Atmi, Inc.(a) (L) | 270,900 | ||||||
20,900 | Avnet, Inc.(a) | 730,873 | ||||||
1,400 | Axsys Technologies, Inc.(a) (L) | 51,310 | ||||||
16,000 | China Digital TV Holdings Co., Ltd. — ADR(a) (L) | 431,680 | ||||||
1,630 | Cubic Corp.(L) | 63,896 | ||||||
278,800 | Duke Energy Corp. | 5,623,396 | ||||||
37,000 | Edison International | 1,974,690 | ||||||
11,500 | Elpida Memory, Inc.(a) | 399,463 | ||||||
13,400 | Emulex Corp.(a) | 218,688 | ||||||
6,370 | Entegris Inc.(a) | 54,973 | ||||||
5,900 | Fanuc Ltd. | 574,682 | ||||||
480,000 | Flextronics International Ltd.(a) | 5,788,800 | ||||||
38,100 | FPL Group, Inc. | 2,578,227 | ||||||
5,000 | Fuji Photo Film Co., Ltd. | 211,728 | ||||||
14,100 | Garmin Ltd. | 1,367,700 | ||||||
5,500 | Hirose Electric Co., Ltd.(L) | 636,168 | ||||||
103,586 | Hon Hai Precision Industry Co., Ltd. — GDR | 1,284,466 | ||||||
7,820 | Hutchinson Technology, Inc.(a) (L) | 205,822 | ||||||
8,780 | Hynix Semiconductor, Inc.(a) | 243,498 |
See accompanying notes to financial statements.
6
portfolio of investments (continued)
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Electronics (cont.) | ||||||||
15,400 | Infineon Technologies AG(a) | $ | 182,808 | |||||
14,900 | Intersil Corp., Class A | 364,752 | ||||||
900 | Itron, Inc.(a) (L) | 86,373 | ||||||
1,000 | Keyence Corp. | 246,822 | ||||||
45,600 | Kla-Tencor Corp. | 2,196,096 | ||||||
90,300 | Lam Research Corp.(a) | 3,903,669 | ||||||
3,880 | Lo-Jack Corporation(a) (L) | 65,223 | ||||||
8,740 | Mentor Graphics Corp.(a) (L) | 94,217 | ||||||
5,650 | Methode Electronics, Inc.(L) | 92,886 | ||||||
2,820 | MKS Instruments, Inc.(a) (L) | 53,975 | ||||||
3,500 | Murata Manufacturing Co., Ltd. | 203,044 | ||||||
15,500 | Nippon Electric Glass Co., Ltd. | 253,384 | ||||||
6,200 | Novellus Systems, Inc.(a) | 170,934 | ||||||
40,000 | Nvidia Corp.(a) | 1,360,800 | ||||||
7,180 | OmniVision Technologies, Inc.(a) (L) | 112,367 | ||||||
120,500 | ON Semiconductor Corp.(a) (L) | 1,070,040 | ||||||
2,380 | Plexus Corp.(a) (L) | 62,499 | ||||||
6,640 | Portland General Electric Co.(L) | 184,459 | ||||||
1,051 | Samsung Electronics Co., Ltd. | 624,512 | ||||||
2,634 | Samsung Electronics Co., Ltd. — GDR (b) | 771,104 | ||||||
3,000 | Semtech Corp.(a) (L) | 46,560 | ||||||
18,800 | Sony Corp. | 1,043,509 | ||||||
12,400 | Spansion, Inc.(a) (L) | 48,732 | ||||||
1,710 | Standard Microsystems Corp.(a) (L) | 66,810 | ||||||
1,800 | Synopsis, Inc.(a) | 46,674 | ||||||
146,720 | Taiwan Semiconductor — ADR | 1,461,331 | ||||||
4,470 | Technitrol, Inc.(L) | 127,753 | ||||||
105,100 | Texas Instruments, Inc. | 3,510,340 | ||||||
85,000 | Toshiba Corp. | 636,929 | ||||||
89,300 | Triquint Semiconductor, Inc.(a) | 592,059 | ||||||
12,560 | TTM Technologies, Inc.(a) (L) | 146,450 | ||||||
14,090 | Varian Semiconductor Equipment Associates, Inc.(a) | 521,330 | ||||||
5,990 | Yamada Denki Co., Ltd. | 684,801 | ||||||
45,245,487 | ||||||||
Energy (3.7%) | ||||||||
198,000 | AES Corp.(a) | 4,235,220 | ||||||
26,200 | American Electric Power Co., Inc. | 1,219,872 | ||||||
27,700 | Banpu Public Co., Ltd. | 338,949 | ||||||
1,800 | Black Hills Corp.(L) | 79,380 | ||||||
1,710 | Central Vermont Public Service Corp.(L) | 52,736 | ||||||
135,500 | China Shenhua Energy Co., Ltd. | 809,847 | ||||||
18,900 | Companhia Energetica de Sao Paulo(a) | 461,398 | ||||||
2,340 | CVR Energy, Inc.(a) (L) | 58,360 | ||||||
248,600 | El Paso Corp. | 4,285,864 | ||||||
1,900 | Electricite De France | 226,320 | ||||||
34,900 | Entergy Corp. | 4,171,248 | ||||||
63,674 | Exelon Corp. | 5,198,345 | ||||||
7,400 | FirstEnergy Corp. | 535,316 | ||||||
51,600 | McDermott International, Inc.(a) | 3,045,948 | ||||||
13,300 | National Grid PLC | 220,780 | ||||||
4,300 | Ormat Technologies Inc.(L) | 236,543 | ||||||
27,600 | PG&E Corp.(L) | 1,189,284 | ||||||
6,800 | Public Service Enterprise Group, Inc. | 668,032 | ||||||
2,305 | RAO Unified Energy System OGK-5 GDR(a) (d) | 20,088 | ||||||
950 | RAO Unified Energy System TGK-5 GDR(a) (d) | 3,458 | ||||||
2,800 | RAO Unified Energy System GDR | 358,120 | ||||||
17,800 | Scottish & Southern Energy PLC | 580,331 | ||||||
126,200 | Spectra Energy Corp. | 3,258,484 | ||||||
2,600 | Suncor Energy, Inc. | 284,348 | ||||||
70,000 | Tokyo Gas Ltd. | 327,753 |
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Energy (cont.) | ||||||||
161,800 | Xcel Energy, Inc.(L) | $ | 3,651,826 | |||||
35,517,850 | ||||||||
Entertainment (1.0%) | ||||||||
4,090 | Lin TV Corp., Class A(a) (L) | 49,776 | ||||||
6,510 | Netflix Inc.(a) (L) | 173,296 | ||||||
294,300 | Walt Disney Co. | 9,500,004 | ||||||
9,723,076 | ||||||||
Financial Services (5.6%) | ||||||||
9,625 | Advanta Corp., Class B(L) | 77,674 | ||||||
4,600 | Affiliated Managers Group, Inc.(a) (L) | 540,316 | ||||||
6,300 | Anworth Mortgage Asset Corp. | 52,038 | ||||||
6,140 | Asta Funding, Inc.(L) | 162,342 | ||||||
18,600 | BlackRock, Inc., Class A(L) | 4,032,480 | ||||||
38,300 | Blackstone Group LP | 847,579 | ||||||
37,200 | Capital One Financial Corp. | 1,758,072 | ||||||
3,900 | Capstead Mortgage Corp. | 51,441 | ||||||
4,110 | Centerline Holding Co.(L) | 31,318 | ||||||
181,476 | Citigroup, Inc. | 5,342,653 | ||||||
184,600 | Commerce Assets Holdings | 614,402 | ||||||
53,800 | Credit Suisse Group — ADR | 3,233,380 | ||||||
2,880 | Deluxe Corp.(L) | 94,723 | ||||||
2,300 | Douglas Emmett, Inc.(L) | 52,003 | ||||||
11,200 | Federated Investors, Inc. | 460,992 | ||||||
2,860 | FirstFed Financial Corp.(a) (L) | 102,445 | ||||||
11,000 | Fortis | 290,743 | ||||||
4,400 | Fortis — Strip(a) | 64 | ||||||
26,100 | Fortress Investment Group LLC(L) | 406,638 | ||||||
20,200 | Franklin Resources, Inc. | 2,311,486 | ||||||
45,000 | Fubon Financial Holding Co., Ltd. — GDR (b) | 399,573 | ||||||
1,230 | Gamco Investors, Inc.(L) | 85,178 | ||||||
1,600 | GFI Group, Inc.(a) (L) | 153,152 | ||||||
1,400 | Global Payments, Inc. | 65,128 | ||||||
36,860 | Goldman Sachs Group, Inc. | 7,926,743 | ||||||
6,700 | Greenhill & Co., Inc.(L) | 445,416 | ||||||
9,000 | Groupe Danone(L) | 807,848 | ||||||
200,600 | Grupo Financiero Inbursa SA | 551,503 | ||||||
17,200 | HBOS PLC | 251,627 | ||||||
11,900 | Hercules Technology Growth Capital, Inc.(L) | 147,798 | ||||||
19,179 | ING Groep NV | 750,012 | ||||||
143,300 | Invesco Ltd.(L) | 4,496,754 | ||||||
10,500 | Irish Life & Permanent PLC | 181,283 | ||||||
27,900 | Jefferies Group, Inc. | 643,095 | ||||||
21,900 | Legg Mason, Inc. | 1,601,985 | ||||||
47,400 | Lehman Brothers Holdings, Inc. | 3,101,856 | ||||||
4,432 | Macquarie Group Ltd.(L) | 296,450 | ||||||
28,200 | MBIA, Inc.(L) | 525,366 | ||||||
5,800 | MFA Mortgage Investments, Inc. | 53,650 | ||||||
2,000 | Morningstar, Inc.(a) (L) | 155,500 | ||||||
6,700 | Nasdaq Stock Market, Inc.(a) | 331,583 | ||||||
4,180 | National Financial Partners Corp.(L) | 190,650 | ||||||
17,000 | Nomura Holdings, Inc. | 288,407 | ||||||
20,400 | Och-Ziff Capital Management Group LLC(a) (L) | 536,112 | ||||||
6,000 | ORIX Corp. | 1,025,425 | ||||||
52,700 | Paychex, Inc. | 1,908,794 | ||||||
19,300 | PNC Financial Services Group, Inc. | 1,267,045 | ||||||
3,380 | PRG-Schultz International(a) | 28,967 | ||||||
53,200 | Prudential Financial, Inc. | 4,949,728 | ||||||
8,700 | Thomas Weisel Partners Group, Inc.(a) (L) | 119,451 | ||||||
9,311 | UBS AG | 431,042 |
See accompanying notes to financial statements.
7
portfolio of investments (continued)
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Financial Services (cont.) | ||||||||
4,700 | Waddell & Reed Financial, Inc., Class A(L) | $ | 169,623 | |||||
54,349,533 | ||||||||
Food and Beverages (3.4%) | ||||||||
24,400 | Bunge Ltd.(L) | 2,840,404 | ||||||
27,600 | Coca-Cola Co. | 1,693,812 | ||||||
16,000 | Companhia de Bebidas Das Americas — ADR | 1,136,480 | ||||||
1,300 | Fresh Del Monte Produce, Inc.(a) | 43,654 | ||||||
110,100 | Kroger Co. | 2,940,771 | ||||||
230 | Lindt & Spruengli AG | 796,537 | ||||||
2,250 | Nash Finch Co.(L) | 79,380 | ||||||
3,800 | Nestle SA | 1,745,737 | ||||||
80,200 | Pepsi Bottling Group, Inc. | 3,164,692 | ||||||
131,900 | PepsiCo, Inc. | 10,011,210 | ||||||
2,610 | Pico Holdings, Inc.(a) (L) | 87,748 | ||||||
49,000 | Premier Foods PLC | 199,692 | ||||||
70,900 | Supervalu, Inc. | 2,660,168 | ||||||
52,300 | Sysco Corp. | 1,632,283 | ||||||
16,700 | Unilever NV | 614,007 | ||||||
68,100 | Unilever NV — ADR | 2,482,926 | ||||||
7,950 | Unilever PLC | 299,069 | ||||||
17,579 | Woolworths Ltd. | 524,495 | ||||||
32,953,065 | ||||||||
Healthcare-Services (4.1%) | ||||||||
5,030 | Amerigroup Corp.(a) | 183,344 | ||||||
166,200 | Bristol-Myers Squibb Co.(L) | 4,407,624 | ||||||
3,140 | Corvel Corp.(a) (L) | 72,283 | ||||||
50,450 | Coventry Health Care, Inc.(a) | 2,989,162 | ||||||
53,800 | Express Scripts, Inc., Class A(a) | 3,927,400 | ||||||
5,700 | HealthSpring, Inc.(a) | 108,585 | ||||||
9,060 | LifePoint Hospitals, Inc.(a) (L) | 269,444 | ||||||
5,500 | Lincare Holdings, Inc.(a) (L) | 193,380 | ||||||
2,340 | Magellan Healthcare-Services, Inc.(a) | 109,114 | ||||||
75,500 | McKesson Corp. | 4,946,005 | ||||||
48,700 | Quest Diagnostics, Inc. | 2,576,230 | ||||||
3,230 | RehabCare Group, Inc.(a) (L) | 72,869 | ||||||
31,400 | Stryker Corp. | 2,346,208 | ||||||
132,720 | UnitedHealth Group, Inc. | 7,724,304 | ||||||
46,000 | Varian Medical Systems, Inc.(a) | 2,399,360 | ||||||
77,600 | Wellpoint, Inc.(a) | 6,807,848 | ||||||
39,133,160 | ||||||||
Insurance (5.6%) | ||||||||
72,600 | Ace Ltd. | 4,485,228 | ||||||
18,974 | Aegon NV | 335,354 | ||||||
47,500 | AFLAC, Inc. | 2,974,925 | ||||||
4,500 | Allianz AG | 974,154 | ||||||
1,210 | Allied World Assurance Co. Holdings Ltd.(L) | 60,706 | ||||||
63,579 | American International Group, Inc. | 3,706,656 | ||||||
9,370 | Amerisafe, Inc.(a) (L) | 145,329 | ||||||
77,200 | Aon Corp. | 3,681,668 | ||||||
27,190 | Arch Capital Group Ltd.(a) | 1,912,816 | ||||||
1 | Argo Group International Holdings Ltd.(a) | 42 | ||||||
64,600 | Assurant, Inc.(L) | 4,321,740 | ||||||
13,684 | AXA | 547,928 | ||||||
78,500 | Axis Capital Holdings Ltd. | 3,059,145 | ||||||
81,000 | CIGNA Corp. | 4,352,130 | ||||||
2,710 | Commerce Group, Inc.(L) | 97,506 | ||||||
600 | Fairfax Financial Holdings Ltd. | 174,521 | ||||||
52,400 | Hartford Financial Services Group, Inc. | 4,568,756 | ||||||
85,400 | Marsh & McLennan Cos., Inc. | 2,260,538 | ||||||
9,680 | Max Re Capital Ltd.(L) | 270,943 |
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Insurance (cont.) | ||||||||
5,030 | Navigators Group, Inc.(a) (L) | $ | 326,950 | |||||
4,840 | ProAssurance Corp.(a) (L) | 265,813 | ||||||
8,300 | QBE Insurance Group Ltd. | 242,907 | ||||||
72,700 | Reinsurance Group of America, Inc.(L) | 3,815,296 | ||||||
61 | Sony Financial Holdings Inc.(a) (b) | 233,187 | ||||||
5,800 | Sun Life Financial Services, Inc. | 327,473 | ||||||
10,355 | Swiss Re | 735,984 | ||||||
89,739 | The Travelers Cos., Inc. | 4,827,958 | ||||||
240,500 | UnumProvident Corp. | 5,721,495 | ||||||
54,427,148 | ||||||||
Internet (1.2%) | ||||||||
5,000 | Alibaba.com Ltd.(a) (b) | 17,732 | ||||||
2,420 | Blue Coat Systems, Inc.(a) (L) | 79,545 | ||||||
4,400 | Blue Nile, Inc.(a) (L) | 299,464 | ||||||
1,250 | Capella Education Co.(a) (L) | 81,825 | ||||||
4,500 | Dice Holdings Inc.(a) | 35,955 | ||||||
20,700 | Giant Interactive Group, Inc. — ADR(a) (L) | 268,686 | ||||||
2,600 | Google, Inc., Class A(a) | 1,797,848 | ||||||
6,450 | J2 Global Communications, Inc.(a) (L) | 136,547 | ||||||
700 | NHN Corp.(a) | 169,146 | ||||||
14,400 | Nutri/System, Inc.(a) (L) | 388,512 | ||||||
9,850 | Orbitz Worldwide, Inc.(a) | 83,725 | ||||||
94,900 | Softbank Corp.(L) | 1,962,569 | ||||||
351,912 | Symantec Corp.(a) | 5,679,860 | ||||||
920 | Yahoo Japan Corp.(L) | 411,817 | ||||||
11,413,231 | ||||||||
Lodging (0.2%) | ||||||||
59,600 | Host Hotels & Resorts, Inc. | 1,015,584 | ||||||
1,500 | Lasalle Hotel Properties(L) | 47,850 | ||||||
156,000 | Shangri-La Asia Ltd. | 490,195 | ||||||
10,960 | Sunstone Hotel Investors, Inc.(L) | 200,458 | ||||||
1,754,087 | ||||||||
Machinery and Equipment (0.8%) | ||||||||
16,990 | American Axle & Manufacturing Holdings, Inc.(L) | 316,354 | ||||||
26,600 | Deere & Co. | 2,476,992 | ||||||
2,980 | Graco, Inc. | 111,035 | ||||||
2,800 | Intevac, Inc.(a) (L) | 40,712 | ||||||
38,600 | Lennox International, Inc. | 1,598,812 | ||||||
42,800 | Manitowoc Co., Inc.(L) | 2,089,924 | ||||||
6,927 | Schneider SA | 938,533 | ||||||
2,000 | SMC Corp. | 238,496 | ||||||
7,810,858 | ||||||||
Manufacturing (5.4%) | ||||||||
1,820 | A.O. Smith Corp.(L) | 63,791 | ||||||
6,350 | Applied Industrial Tech, Inc.(L) | 184,277 | ||||||
13,100 | Assa Abloy AB, Class B(L) | 263,058 | ||||||
89,300 | Church & Dwight Co., Inc.(L) | 4,828,451 | ||||||
4,400 | Continental AG | 570,809 | ||||||
11,800 | Cummins, Inc. | 1,502,966 | ||||||
66,600 | Danaher Corp. | 5,843,484 | ||||||
29,700 | Eaton Corp. | 2,879,415 | ||||||
5,130 | Enpro Industries, Inc.(a) (L) | 157,234 | ||||||
1,920 | Freightcar America, Inc.(L) | 67,200 | ||||||
15,550 | Graftech International Ltd.(a) (L) | 276,012 | ||||||
3,710 | Greif, Inc., Class A(L) | 242,523 | ||||||
12,130 | Hankook Tire Co., Ltd.(a) | 232,048 | ||||||
111,000 | Honeywell International, Inc. | 6,834,270 | ||||||
41,400 | Illinois Tool Works, Inc. | 2,216,556 |
See accompanying notes to financial statements.
8
portfolio of investments (continued)
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Manufacturing (cont.) | ||||||||
27,500 | ITT Industries, Inc. | $ | 1,816,100 | |||||
4,800 | Kaydon Corp.(L) | 261,792 | ||||||
4,400 | Maidenform Brands, Inc.(a)(L) | 59,532 | ||||||
1,040 | NACCO Industries, Inc.(L) | 103,678 | ||||||
6,893 | OAO TMK — GDR | 310,185 | ||||||
3,200 | Oshkosh Truck Corp. | 151,232 | ||||||
55,900 | Owens-Illinois, Inc.(a) | 2,767,050 | ||||||
112,050 | Parker Hannifin Corp. | 8,438,485 | ||||||
41,000 | Precision Castparts Corp. | 5,686,700 | ||||||
790 | Robbins & Myers, Inc.(L) | 59,748 | ||||||
7,500 | Siemens AG | 1,188,746 | ||||||
102,770 | Skyworks Solutions, Inc.(a)(L) | 873,545 | ||||||
4,520 | Sun Hydraulics Corp.(L) | 114,040 | ||||||
4,530 | Trimas Corporation(a) | 47,973 | ||||||
31,600 | United States Steel Corp. | 3,820,756 | ||||||
51,861,656 | ||||||||
Media (2.2%) | ||||||||
225,700 | Comcast Corp., Class A(a) | 4,121,282 | ||||||
45,100 | DIRECTV Group, Inc.(a) | 1,042,712 | ||||||
7,900 | Grupo Televisa SA — ADR | 187,783 | ||||||
30,000 | McGraw-Hill Companies., Inc. | 1,314,300 | ||||||
10,400 | Naspers Ltd. | 246,738 | ||||||
442,500 | Time Warner, Inc. | 7,305,675 | ||||||
54,300 | Viacom, Inc., Class B(a) | 2,384,856 | ||||||
7,100 | Vivendi SA(L) | 325,709 | ||||||
4,931 | Washington Post Co. (The), Class B(L) | 3,902,542 | ||||||
38,800 | Yell Group PLC | 309,683 | ||||||
21,141,280 | ||||||||
Medical (4.3%) | ||||||||
34,200 | Affymetrix, Inc.(a)(L) | 791,388 | ||||||
1,940 | Air Methods Corp.(a)(L) | 96,360 | ||||||
15,000 | Alcon, Inc. | 2,145,600 | ||||||
210,600 | Alkermes, Inc.(a)(L) | 3,283,254 | ||||||
33,600 | Allergan, Inc. | 2,158,464 | ||||||
15,600 | American Oriental Bioengineering, Inc.(a)(L) | 172,848 | ||||||
7,100 | AmSurg Corp.(a)(L) | 192,126 | ||||||
9,030 | Applera Corp. — Celera Genomics Group(a)(L) | 143,306 | ||||||
900 | Arthrocare Corp.(a)(L) | 43,245 | ||||||
61,100 | Baxter International, Inc. | 3,546,855 | ||||||
1,200 | Beckman Coulter, Inc. | 87,360 | ||||||
269,300 | Boston Scientific Corp.(a) | 3,131,959 | ||||||
25,700 | C. R. Bard, Inc. | 2,436,360 | ||||||
57,400 | Cell Genesys, Inc.(a)(L) | 132,020 | ||||||
2,380 | Conmed Corp.(a)(L) | 55,002 | ||||||
5,430 | Cynosure Inc.(a)(L) | 143,678 | ||||||
15,800 | Geron Corp.(a)(L) | 89,744 | ||||||
28,700 | Hoya Corp. | 914,700 | ||||||
10,000 | Illumina, Inc.(a)(L) | 592,600 | ||||||
9,890 | Invacare Corp.(L) | 249,228 | ||||||
46,200 | Johnson & Johnson, Inc. | 3,081,540 | ||||||
52,500 | Kinetic Concepts, Inc.(a) | 2,811,900 | ||||||
2,320 | Medcath Corp.(a)(L) | 56,979 | ||||||
55,000 | Medtronic, Inc. | 2,764,850 | ||||||
1,100 | Millipore Corp.(a) | 80,498 | ||||||
1,392 | Nobel Biocare Holding AG | 372,627 | ||||||
4,300 | Obagi Medical Products, Inc.(a)(L) | 78,647 | ||||||
51,800 | Patterson Co., Inc.(a) | 1,758,610 | ||||||
25,200 | PSS World Medical, Inc.(a) | 493,164 | ||||||
12,900 | Sanofi-Synthelabo SA(L) | 1,187,711 | ||||||
217,700 | Schering-Plough Corp. | 5,799,528 |
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Medical (cont.) | ||||||||
1,570 | Surmodics, Inc.(a)(L) | $ | 85,204 | |||||
2,700 | Synthes, Inc. | 335,383 | ||||||
82,600 | Vertex Pharmaceuticals, Inc.(a)(L) | 1,918,798 | ||||||
6,180 | Zeneca Group PLC | 266,187 | ||||||
41,497,723 | ||||||||
Metals and Mining (2.4%) | ||||||||
46,600 | Alcoa, Inc. | 1,703,230 | ||||||
120,300 | Barrick Gold Corp. | 5,058,615 | ||||||
19,100 | BHP Billiton PLC | 587,739 | ||||||
26,600 | Cameco Corp. | 1,066,750 | ||||||
1,210 | Century Aluminum Co.(a)(L) | 65,267 | ||||||
166,000 | China Molybdenum Co., Ltd.(a)(b) | 303,603 | ||||||
14,400 | Cleveland-Cliffs, Inc.(L) | 1,451,520 | ||||||
9,850 | Commercial Metals Co.(L) | 289,098 | ||||||
18,300 | Eurasian Natural Resource Corp.(a) | 233,116 | ||||||
2,000 | Evraz Group SA — GDR | 155,000 | ||||||
42,400 | Freeport-McMoRan Copper & Gold, Inc., Class B | 4,343,456 | ||||||
800 | GMK Norilsk Nickel | 212,000 | ||||||
38,203 | Harmony Gold Mining Co., Ltd.(a)(L) | 394,210 | ||||||
1,980 | Mueller Industries, Inc.(L) | 57,400 | ||||||
38,900 | Newmont Mining Corp. | 1,899,487 | ||||||
28,900 | Nucor Corp. | 1,711,458 | ||||||
5,500 | Rautaruukki Oyj | 238,400 | ||||||
21,300 | Repsol YPF SA | 759,157 | ||||||
17,900 | Rio Tinto PLC | 1,894,355 | ||||||
12,690 | USEC, Inc.(a)(L) | 114,210 | ||||||
12,000 | Usinas Siderurgicas de Minas Gerais SA | 549,747 | ||||||
23,087,818 | ||||||||
Oil & Gas (9.3%) | ||||||||
4,842 | Air Liquide SA(L) | 720,524 | ||||||
2,820 | Alon USA Energy, Inc.(L) | 76,648 | ||||||
55,300 | BP PLC | 676,927 | ||||||
2,900 | Cairn Energy PLC(a) | 177,437 | ||||||
11,200 | Canadian Natural Resources Ltd. | 823,853 | ||||||
86,292 | ChevronTexaco Corp. | 8,053,632 | ||||||
126,038 | ConocoPhillips | 11,129,155 | ||||||
1,600 | Continental Resources, Inc.(a) | 41,808 | ||||||
710 | Dawson Geophysical Co.(a)(L) | 50,737 | ||||||
10,310 | Delek US Holdings, Inc. | 208,571 | ||||||
4,900 | EnCana Corp. | 335,208 | ||||||
5,350 | ENI SpA | 195,921 | ||||||
201,200 | Exxon Mobil Corp. | 18,850,428 | ||||||
6,400 | FMC Technologies, Inc.(a) | 362,880 | ||||||
5,070 | Global Industries Ltd.(a) | 108,599 | ||||||
13,100 | Grant Prideco, Inc.(a) | 727,181 | ||||||
1,710 | Gulf Island Fabrication, Inc.(L) | 54,224 | ||||||
215,700 | Halliburton Co. | 8,177,187 | ||||||
16,400 | Hess Corp. | 1,654,104 | ||||||
4,000 | Idemitsu Kosan Co., Ltd. | 424,351 | ||||||
2,900 | Inmet Mining Corp. | 236,744 | ||||||
29 | Inpex Holdings, Inc. | 314,145 | ||||||
264,075 | IOI Corporation Berhad | 619,238 | ||||||
14,000 | JGC Corp. | 241,773 | ||||||
5,500 | Kazmunaigas Exploration Production | 170,500 | ||||||
114,000 | Marathon Oil Corp. | 6,938,040 | ||||||
28,400 | Noble Corp. | 1,604,884 | ||||||
18,000 | OAO Rosneft Oil — ADR | 174,600 | ||||||
25,600 | OAO Gazprom — ADR | 1,451,520 | ||||||
91,700 | Occidental Petroleum Corp. | 7,059,983 | ||||||
2,960 | Oil States International, Inc.(a)(L) | 100,995 |
See accompanying notes to financial statements.
9
portfolio of investments (continued)
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Oil & Gas (cont.) | ||||||||
8,370 | Parker Drilling Co.(a)(L) | $ | 63,194 | |||||
4,800 | Petroleo Brasileiro SA — ADR | 553,152 | ||||||
15,170 | Petroquest Energy, Inc.(a)(L) | 216,931 | ||||||
9,370 | Pioneer Drilling Co.(a)(L) | 111,316 | ||||||
61,700 | Pioneer Natural Resources Co. | 3,013,428 | ||||||
14,700 | Polski Koncern Naftowy Orlen SA — GDR(a) | 620,433 | ||||||
25,800 | Royal Dutch Shell — ADR | 2,172,360 | ||||||
33,163 | Royal Dutch Shell, Class A | 1,393,831 | ||||||
5,800 | Sasol Ltd. | 287,949 | ||||||
5,700 | Schlumberger Ltd. | 560,709 | ||||||
1,370 | SK Energy Co., Ltd.(a) | 265,010 | ||||||
1,300 | St. Mary Land & Exploration Co. | 50,193 | ||||||
3,130 | Stone Energy Corp.(a) | 146,828 | ||||||
5,430 | Swift Energy Co.(a)(L) | 239,517 | ||||||
3,900 | Total SA | 324,012 | ||||||
4,570 | Trico Marine Services, Inc.(a)(L) | 169,181 | ||||||
29,730 | UGI Corp. | 810,142 | ||||||
3,920 | Union Drilling Inc.(a)(L) | 61,818 | ||||||
14,300 | Vaalco Energy, Inc.(a)(L) | 66,495 | ||||||
66,300 | Valero Energy Corp. | 4,642,989 | ||||||
45,000 | XTO Energy, Inc. | 2,311,200 | ||||||
89,842,485 | ||||||||
Pharmaceuticals (4.6%) | ||||||||
1,300 | Amag Pharmaceuticals, Inc.(a)(L) | 78,169 | ||||||
44,400 | Amylin Pharmaceuticals, Inc.(a)(L) | 1,642,800 | ||||||
14,440 | Arena Pharmaceuticals, Inc.(a)(L) | 113,065 | ||||||
7,170 | Astrazeneca PLC | 307,378 | ||||||
7,500 | Bare Escentuals, Inc.(a)(L) | 181,875 | ||||||
74,700 | Barr Pharmaceuticals, Inc.(a) | 3,966,570 | ||||||
3,900 | Bayer AG | 355,598 | ||||||
36,040 | Cephalon, Inc.(a)(L) | 2,586,230 | ||||||
47,700 | Cubist Pharmaceuticals, Inc.(a) | 978,327 | ||||||
65,980 | CV Therapeutics, Inc.(a)(L) | 597,119 | ||||||
109,900 | Eli Lilly & Co. | 5,867,561 | ||||||
52,150 | Encysive Pharmaceuticals, Inc.(a)(L) | 44,328 | ||||||
68,200 | Forest Laboratories, Inc.(a) | 2,485,890 | ||||||
104,000 | Gilead Sciences, Inc.(a) | 4,785,040 | ||||||
9,180 | Human Genome Sciences, Inc.(a)(L) | 95,839 | ||||||
28,090 | Incyte Pharmaceutical, Inc.(a)(L) | 282,304 | ||||||
98,400 | Medarex, Inc.(a)(L) | 1,025,328 | ||||||
15,000 | Medicis Pharmaceutical Corp., Class A(L) | 389,550 | ||||||
39,600 | Merck & Co., Inc. | 2,301,156 | ||||||
51,300 | Millennium Pharmaceuticals, Inc.(a) | 768,474 | ||||||
22,727 | Novartis AG | 1,246,883 | ||||||
6,200 | Novo Nordisk A/S, Class B | 407,319 | ||||||
23,830 | NPS Pharmaceuticals, Inc.(a)(L) | 91,269 | ||||||
10,790 | Perrigo Co.(L) | 377,758 | ||||||
282,115 | Pfizer, Inc. | 6,412,474 | ||||||
16,300 | Regeneron Pharmaceuticals, Inc.(a)(L) | 393,645 | ||||||
15,790 | Rigel Pharmaceuticals, Inc.(a)(L) | 400,908 | ||||||
8,668 | Roche Holding AG | 1,497,889 | ||||||
5,800 | Takeda Pharmaceutical Co., Ltd. | 341,146 | ||||||
10,100 | Teva Pharmaceutical Industries Ltd. | 469,448 | ||||||
6,314 | UCB SA | 286,329 | ||||||
85,300 | Wyeth | 3,769,407 | ||||||
2,880 | Xenoport, Inc.(a)(L) | 160,934 | ||||||
10,460 | Zymogenetics, Inc.(a)(L) | 122,068 | ||||||
44,830,078 | ||||||||
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Real Estate (0.2%) | ||||||||
16,450 | Alesco Financial, Inc.(L) | $ | 53,956 | |||||
5,880 | American Campus Communities, Inc.(L) | 157,878 | ||||||
22,000 | Amoy Properties Ltd. | 99,604 | ||||||
1,000 | Digital Realty Trust, Inc.(L) | 38,370 | ||||||
8,529 | Hypo Real Estate Holdings | 452,484 | ||||||
30,500 | Kerry Properties Ltd. | 245,075 | ||||||
4,400 | LSR Group, Inc.(a) | 63,800 | ||||||
63,800 | Meruelo Maddux Properties, Inc.(a)(L) | 255,200 | ||||||
8,510 | Resource Capital Corp.(L) | 79,228 | ||||||
80,000 | Sino Land Co., Ltd. | 284,216 | ||||||
9,000 | Sun Hung Kai Properties Ltd. (b) | 191,153 | ||||||
2,650 | Taubman Centers, Inc.(L) | 130,354 | ||||||
2,051,318 | ||||||||
Restaurants (0.5%) | ||||||||
2,800 | California Pizza Kitchen, Inc.(a)(L) | 43,596 | ||||||
2,270 | CBRL Group, Inc.(L) | 73,525 | ||||||
3,500 | Cheesecake Factory, Inc.(a)(L) | 82,985 | ||||||
500 | Chipotle Mexican Grill Inc., Class A(a)(L) | 73,535 | ||||||
39,600 | Darden Restaurants, Inc. | 1,097,316 | ||||||
55,900 | McDonald’s Corp. | 3,293,069 | ||||||
4,664,026 | ||||||||
Retail (3.7%) | ||||||||
5,880 | Aeropostale, Inc.(a)(L) | 155,820 | ||||||
2,110 | Big Lots, Inc.(a)(L) | 33,739 | ||||||
100,800 | BJ’s Wholesale Club, Inc.(a)(L) | 3,410,064 | ||||||
3,550 | Bon-Ton Stores, Inc.(L) | 33,689 | ||||||
4,090 | Books-A-Million, Inc.(L) | 48,753 | ||||||
5,060 | Brown Shoe Co., Inc.(L) | 76,760 | ||||||
4,900 | Cawachi Ltd.(L) | 126,338 | ||||||
24,000 | Citizen Watch(L) | 233,984 | ||||||
1,300 | Columbia Sportswear Co.(L) | 57,317 | ||||||
21,692 | Compagnie Financiere Richemont AG | 1,489,061 | ||||||
42,100 | Costco Wholesale Corp. | 2,936,896 | ||||||
78,480 | Dollar Tree Stores, Inc.(a)(L) | 2,034,202 | ||||||
70,500 | Gap, Inc. | 1,500,240 | ||||||
372,000 | GOME Electrical Appliances Holdings, Ltd. | 944,683 | ||||||
15,390 | J Crew Group, Inc.(a)(L) | 741,952 | ||||||
81,600 | Jusco Ltd. | 1,196,605 | ||||||
72,100 | Kohl’s Corp.(a) | 3,302,180 | ||||||
208,700 | Lowe’s Cos., Inc. | 4,720,794 | ||||||
6,300 | Lululemon Athletica, Inc.(a)(L) | 298,431 | ||||||
23,400 | Marks & Spencer PLC | 260,823 | ||||||
1,190 | Men’s Wearhouse, Inc.(L) | 32,106 | ||||||
98,500 | PT Astra International Tbk | 286,374 | ||||||
127,100 | Quiksilver, Inc.(a)(L) | 1,090,518 | ||||||
4,700 | Select Comfort Corp.(a)(L) | 32,947 | ||||||
2,800 | Shimamura Co., Ltd. | 238,890 | ||||||
5,800 | Shoppers Drug Mart Corp. | 313,072 | ||||||
2,770 | Sotheby’s Holdings, Inc.(L) | 105,537 | ||||||
34,000 | Staples, Inc. | 784,380 | ||||||
48,600 | Tesco PLC | 461,662 | ||||||
4,900 | Ulta Salon, Cosmetics & Fragrance, Inc.(a)(L) | 84,035 | ||||||
14,200 | Urban Outfitters, Inc(a)(L) | 387,092 | ||||||
18,600 | W.W. Grainger, Inc. | 1,627,872 | ||||||
125,100 | Wal-Mart Stores, Inc. | 5,946,003 | ||||||
1,840 | Weis Markets, Inc.(L) | 73,490 | ||||||
6,900 | Whole Foods Market, Inc.(L) | 281,520 | ||||||
12,600 | Williams-Sonoma, Inc.(L) | 326,340 |
See accompanying notes to financial statements.
10
portfolio of investments (continued)
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Retail (cont.) | ||||||||
8,400 | Zumiez, Inc.(a)(L) | $ | 204,624 | |||||
35,878,793 | ||||||||
Schools (0.6%) | ||||||||
35,900 | Apollo Group, Inc., Class A(a) | 2,518,385 | ||||||
1,460 | DeVry, Inc. | 75,862 | ||||||
33,020 | ITT Educational Services, Inc.(a)(L) | 2,815,615 | ||||||
5,409,862 | ||||||||
Technology (2.1%) | ||||||||
33,220 | CommScope, Inc.(a) | 1,634,756 | ||||||
8,000 | Cymer, Inc.(a) | 311,440 | ||||||
14,700 | Eresearch Technology, Inc.(a)(L) | 173,754 | ||||||
59,600 | Ingram Micro, Inc.(a) | 1,075,184 | ||||||
256,290 | Intel Corp. | 6,832,691 | ||||||
2,610 | JDA Software Group, Inc.(a) | 53,401 | ||||||
122,700 | Juniper Networks, Inc.(a) | 4,073,640 | ||||||
158,800 | RF Micro Devices, Inc.(a)(L) | 906,748 | ||||||
34,500 | United Technologies Corp. | 2,640,630 | ||||||
19,700 | Universal Display Corp.(a)(L) | 407,199 | ||||||
86,700 | Western Digital Corp.(a) | 2,619,207 | ||||||
20,728,650 | ||||||||
Telecommunications (4.4%) | ||||||||
30,000 | America Movil, Series L — ADR | 1,841,700 | ||||||
1,100 | Anixter International, Inc.(a)(L) | 68,497 | ||||||
16,970 | Arris Group, Inc.(a)(L) | 169,361 | ||||||
5,400 | Aruba Networks, Inc.(a) | 80,514 | ||||||
353,647 | AT&T, Inc. | 14,697,569 | ||||||
62,000 | Century Tel, Inc. | 2,570,520 | ||||||
35,700 | Clearwire Corp., Class A(a)(L) | 489,447 | ||||||
10,600 | Cognet Communications Group, Inc.(a)(L) | 251,326 | ||||||
1,210 | Comtech Telecommunications Corp.(a)(L) | 65,352 | ||||||
11,290 | Consolidated Communications Holdings, Inc. | 224,671 | ||||||
11,000 | Egyptian Co. | 409,368 | ||||||
19,600 | Embarq Corp. | 970,788 | ||||||
4,590 | Encore Wire Corp.(L) | 73,073 | ||||||
30,000 | Harmonic, Inc.(a)(L) | 314,400 | ||||||
42,500 | Koninklijke Philips Electronics NV | 772,908 | ||||||
2,400 | Mobile TeleSystems — ADR | 244,296 | ||||||
67,400 | Motorola, Inc. | 1,081,096 | ||||||
16,300 | MTN Group Ltd. | 305,695 | ||||||
4,400 | Network Equipment Technologies, Inc.(a)(L) | 37,048 | ||||||
1,770 | Novatel Wireless, Inc.(a)(L) | 28,674 | ||||||
277 | NTT DoCoMo, Inc. | 461,253 | ||||||
9,500 | Orascom Telecom Holding SAE — GDR | 788,500 | ||||||
72,200 | Polycom, Inc.(a)(L) | 2,005,716 | ||||||
4,000 | Prusmian SPA(a) | 98,766 | ||||||
125,800 | Qualcomm, Inc. | 4,950,230 | ||||||
306,400 | Qwest Communications International, Inc.(a)(L) | 2,147,864 | ||||||
17,000 | SES Global | 447,342 | ||||||
6,000 | SES Global — FDR | 157,885 | ||||||
140,575 | Singapore Telecommunications Ltd. (b) | 390,757 | ||||||
1,773 | Swisscom AG | 692,346 | ||||||
2,100 | Tele Norte Leste Participacoes SA | 40,312 | ||||||
17,303 | Telefonica De Espana | 562,062 | ||||||
11,400 | Telekom Austria AG | 317,148 | ||||||
910,000 | Telekomunikasi Indonesia Tbk | 983,653 | ||||||
25,300 | Telenor ASA | 604,778 | ||||||
22,500 | TeliaSonera AB | 210,674 | ||||||
75,000 | Telstra Corp., Ltd. | 308,767 | ||||||
128,700 | Tim Participacoes SA | 439,852 | ||||||
29,828 | Turkcell Iletisim Hizmetleri AS | 325,766 |
Shares or | Value | |||||||
Principal Amount | (Note 2) | |||||||
COMMON STOCKS (cont.) | ||||||||
Telecommunications (cont.) | ||||||||
14,700 | Verizon Communications, Inc. | $ | 642,243 | |||||
4,500 | Vimpel-Communications — ADR | 187,200 | ||||||
249,084 | Vodafone Group PLC | 931,072 | ||||||
42,390,489 | ||||||||
Transportation (1.4%) | ||||||||
4,220 | Alaska Air Group, Inc.(a)(L) | 105,542 | ||||||
18,223 | Asciano Group(L) | 111,973 | ||||||
4,100 | Canadian National Railway Co. | 193,843 | ||||||
40,900 | Continental Airlines, Inc., Class B(a)(L) | 910,025 | ||||||
35 | East Japan Railway Co. | 288,899 | ||||||
37,800 | Expeditors International of Washington, Inc. | 1,688,904 | ||||||
22,400 | FedEx Corp. | 1,997,408 | ||||||
1,520 | Gulfmark Offshore, Inc.(a)(L) | 71,121 | ||||||
42,000 | Hankyu Holdings, Inc.(L) | 181,611 | ||||||
4,210 | Hub Group, Inc., Class A(a)(L) | 111,902 | ||||||
4,930 | Landstar System, Inc. | 207,800 | ||||||
21,750 | Ryder System, Inc. | 1,022,467 | ||||||
6,820 | Skywest, Inc.(L) | 183,117 | ||||||
241,500 | Southwest Airlines Co. | 2,946,300 | ||||||
12,465 | Veolia Environnement(L) | 1,138,003 | ||||||
124,900 | Werner Enterprises, Inc.(L) | 2,127,047 | ||||||
34,000 | Yamato Holdings Co., Ltd. | 490,367 | ||||||
13,776,329 | ||||||||
Waste Management (0.6%) | ||||||||
8,200 | Darling International, Inc.(a)(L) | 94,792 | ||||||
5,800 | EnergySolutions, Inc.(a) | 156,542 | ||||||
172,300 | Waste Management, Inc. | 5,629,041 | ||||||
5,880,375 | ||||||||
Total Common Stocks | 941,533,491 | |||||||
EXCHANGE TRADED FUNDS (1.3%) | ||||||||
151,600 | iShares Russell 1000 Index Fund(L) | 12,100,712 | ||||||
9,180 | iShares Russell 2000 Index Fund | 698,139 | ||||||
Total Exchange Traded Funds | 12,798,851 | |||||||
CASH EQUIVALENTS (1.4%) | ||||||||
12,913,230 | JP Morgan Cash Trade Execution | 12,913,230 | ||||||
Total Cash Equivalents | 12,913,230 | |||||||
INVESTMENTS HELD AS COLLATERAL FOR LOAN ED SECURITIES (12.1%) | ||||||||
5,999,514 | CC USA, Inc. MTN, 4.38%, 1/2/08(c) | 5,999,514 | ||||||
6,000,000 | Citigroup Global Markets, Inc. Master Note, 4.65%, 1/2/08(c) | 6,000,000 | ||||||
15,000,000 | Citigroup Global Markets, Inc. Repurchase Agreement, 4.65%, 01/02/08 (Purchased on 12/31/07, proceeds at maturity $15,005,816, collateralized by various corporate bonds, fair value $15,711,059) | 15,000,000 | ||||||
6,000,000 | Citigroup, Inc. MTN, 4.41%, 1/2/08(c) | 6,000,000 | ||||||
5,000,000 | Dorada Finance, Inc. MTN, 4.37%, 1/2/08(c) | 5,000,000 | ||||||
6,000,000 | Goldman Sachs Group, Inc. MTN, 4.62%, 1/2/08(c) | 6,000,000 | ||||||
2,778,023 | GSAA 2006-11 ABS, 4.96%, 1/25/08(c) | 2,778,023 | ||||||
4,999,374 | K2 (USA) LLC MTN, 4.38%, 1/2/08(c) | 4,999,374 | ||||||
703,759 | LBMLT 06 8 2A1 ABS, 4.91%, 1/25/08(c) | 703,759 | ||||||
12,500,000 | Lehman Brothers Holdings, Inc. MTN, 4.62%, 1/2/08(c) | 12,500,000 | ||||||
7,000,000 | Monumental Global Funding II MTN, 4.66%, 1/2/08(c) | 7,000,000 |
See accompanying notes to financial statements.
11
portfolio of investments (continued)
NEW COVENANT GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Principal Amount | (Note 2) | |||||||
INVESTMENTS HELD AS COLLATERAL FOR LOANED SECURITIES (cont.) | ||||||||
2,456,121 | Morgan Stanley Repurchase Agreement, 4.35%, 01/02/08 (Purchased on 12/31/07, proceeds at maturity $2,457,012, collateralized by various U.S. Agencies, fair value $2,480,469) | $ | 2,456,121 | |||||
2,000,000 | Morgan Stanley Repurchase Agreement, 4.60%, 01/02/08 (Purchased on 12/31/07, proceeds at maturity $2,000,767, collateralized by various corporate bonds, fair value $2,099,809) | 2,000,000 | ||||||
20,000,000 | Morgan Stanley Repurchase Agreement, 4.60%, 01/02/08 (Purchased on 12/31/07, proceeds at maturity $20,007,667, collateralized by various corporate bonds, fair value $20,998,087) | 20,000,000 | ||||||
3,787,492 | Morgan Stanley Repurchase Agreement, 4.70%, 01/02/08 (Purchased on 12/31/07, proceeds at maturity $3,788,976, collateralized by various U.S. Agency Mortgages, fair value $3,846,773) | 3,787,492 | ||||||
3,000,000 | Santander US Debt SA UNI MTN, 5.20%, 3/5/08(c) | 3,000,000 | ||||||
1,572,308 | The Bear Stearns Cos. 06-HE5 A1 ABS, 4.92%, 1/25/08(c) | 1,572,308 | ||||||
5,000,000 | United of Omaha Life Insurance Co. Funding Agreement, 5.31%, 1/2/08(c) | 5,000,000 | ||||||
4,999,759 | Wachovia Bank N.A. Bank Note, 4.37%, 1/2/08(c) | 4,999,759 | ||||||
2,500,000 | Wachovia Bank N.A. Bank Note, 4.64%, 1/2/08(c) | 2,500,000 | ||||||
Total Investments Held as Collateral for Loaned Securities | 117,296,350 | |||||||
TOTAL INVESTMENTS — (112.1%) | ||||||||
(Cost $943,908,146) (e) | $ | 1,084,541,922 | ||||||
Liabilities in Excess of Other Assets — (12.1)% | (116,991,438 | ) | ||||||
NET ASSETS — 100.0% | $ | 967,550,484 | ||||||
(a) | Non-income producing security. | |
(b) | Security exempt from registration under Rule 144A of the Securities Act of 1933 or otherwise restricted as to resale. These securities may be resold in transactions exempt from registration, normally for qualified buyers. The Advisor has deemed these securities to be liquid. | |
(c) | Variable or Floating Rate Security. Rate disclosed is as of December 31, 2007. | |
(d) | Fair valued security. These securities represent less than 0.01% of net assets as of December 31, 2007. | |
(e) | See notes to financial statements for tax basis unrealized appreciation (depreciation) of securities. | |
(L) | A portion or all of the security is on loan. | |
ABS | Asset Backed Security | |
ADR | American Depositary Receipt | |
FDR | Fiduciary Depositary Receipt | |
GDR | Global Depositary Receipt | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
MTN | Medium Term Note | |
PLC | Public Limited Company |
At December 31, 2007, the Fund’s foreign currency exchange contracts were as follows:
Contract Amount (Local Currency) | Currency | Trade Date | Settlement Date | Value on Trade Date | Value on 12/31/07 | Unrealized Gain/Loss | ||||||||||||||
Currencies Purchased | ||||||||||||||||||||
990,208 | Hong Kong Dollar | 12/27/07 | 1/2/08 | $ | 126,958 | $ | 127,000 | $ | 42 | |||||||||||
1,181,950 | Hong Kong Dollar | 12/28/07 | 1/3/08 | 151,511 | 151,612 | 101 | ||||||||||||||
Total Currencies Purchased | $ | 278,469 | $ | 278,612 | $ | 143 | ||||||||||||||
Currencies Sold | ||||||||||||||||||||
25,730 | Singapore Dollar | 12/27/07 | 1/2/08 | $ | 17,744 | $ | 17,881 | ($137 | ) | |||||||||||
Total Currencies Sold | $ | 17,744 | $ | 17,881 | ($137 | ) | ||||||||||||||
Net unrealized Gain/(Loss) | $ | 6 | ||||||||||||||||||
See accompanying notes to financial statements.
12
portfolio of investments (continued)
NEW COVENANT INCOME FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Principal Amount | (Note 2) | |||||||
ASSET BACKED SECURITIES (1.6%) | ||||||||
$ | 575,000 | Lehman XS Trust 2005-1 3A3A, 5.11%, 7/25/35 | $ | 475,575 | ||||
565,000 | Lehman XS Trust 2005-6 3A3A, 5.76%, 11/25/35 | 534,484 | ||||||
2,420,000 | Lehman XS Trust 2006-5 2A4A, 5.89%, 4/25/36 | 2,454,678 | ||||||
4,860,000 | Master Asset Backed Securities Trust, 5.23%, 11/25/35 | 4,850,645 | ||||||
Total Asset Backed Securities | 8,315,382 | |||||||
CORPORATE BONDS (24.0%) | ||||||||
1,650,000 | Abbott Laboratories, 5.88%, 5/15/16 | 1,726,352 | ||||||
2,095,000 | Alcan, Inc., 6.13%, 12/15/33 | 2,039,227 | ||||||
3,600,000 | American International Group, Inc., 4.70%, 10/1/10 | 3,611,668 | ||||||
500,000 | American Water Capital Corp., 6.09%, 10/15/17(b) | 499,225 | ||||||
1,650,000 | American Water Capital Corp., 6.59%, 10/15/37(b)(L) | 1,619,868 | ||||||
1,200,000 | Amgen, Inc., 5.85%, 6/1/17(b) | 1,220,322 | ||||||
2,300,000 | Amgen, Inc., 6.38%, 6/1/37(b) | 2,339,864 | ||||||
700,000 | Astrazeneca PLC, 5.40%, 9/15/12 | 724,440 | ||||||
1,225,000 | Astrazeneca PLC, 6.45%, 9/15/37 | 1,346,859 | ||||||
3,600,000 | AT&T Wireless Services, Inc., 8.13%, 5/1/12 | 4,006,588 | ||||||
2,800,000 | Bank of America N.A., 5.30%, 3/15/17 | 2,727,533 | ||||||
2,800,000 | BRE Properties, Inc., 5.50%, 3/15/17 | 2,730,916 | ||||||
3,800,000 | Burlington Northern Santa Fe, Inc., 6.75%, 7/15/11 | 4,017,193 | ||||||
2,800,000 | Carolina Power & Light, 6.50%, 7/15/12 | 2,983,033 | ||||||
850,000 | Citigroup, Inc., 5.50%, 8/27/12 | 867,750 | ||||||
2,285,000 | Citigroup, Inc., 6.13%, 11/21/17 | 2,351,473 | ||||||
850,000 | Comcast Corp., 6.75%, 1/30/11 | 889,277 | ||||||
800,000 | Covidien Ltd., 6.55%, 10/15/37 (b) | 833,602 | ||||||
550,000 | Du Pont (E.I.) De Nemours, 5.25%, 12/15/16 | 542,083 | ||||||
1,125,000 | Eaton Vance Corp., 6.50%, 10/2/17 | 1,182,405 | ||||||
2,275,000 | EnCana Corp., 6.63%, 8/15/37 | 2,377,543 | ||||||
1,500,000 | EnCana Corp., 6.50%, 2/1/38 | 1,555,266 | ||||||
2,775,000 | ERP Operating LP, 5.75%, 6/15/17(L) | 2,647,225 | ||||||
1,000,000 | Federated Retail Holdings, 5.90%, 12/1/16 | 943,389 | ||||||
1,809,030 | FedEx Corp., 6.72%, 1/15/22 | 1,895,863 | ||||||
1,950,000 | Firstar Bank, 7.13%, 12/1/09 | 2,050,091 | ||||||
4,910,000 | General Electric Capital Corp., 6.13%, 2/22/11 | 5,136,243 | ||||||
3,350,000 | General Mills, Inc., 6.00%, 2/15/12 | 3,438,544 | ||||||
3,100,000 | Goldman Sachs Group, Inc., 5.30%, 2/14/12 | 3,138,176 | ||||||
2,525,000 | Goldman Sachs Group, Inc., 6.75%, 10/1/37 | 2,481,757 | ||||||
2,300,000 | Home Depot, Inc., 5.88%, 12/16/36 | 1,947,093 | ||||||
1,500,000 | Household Finance Corp., 4.13%, 11/16/09 | 1,483,482 | ||||||
1,750,000 | Kinder Morgan Energy Partners LP., 7.40%, 3/15/31 | 1,889,688 | ||||||
1,050,000 | Kohl’s Corp., 6.88%, 12/15/37 | 1,022,214 | ||||||
2,950,000 | Lehman Brothers Holdings, Inc., 6.00%, 7/19/12 | 3,006,752 | ||||||
950,000 | Lehman Brothers Holdings, Inc., 7.00%, 9/27/27 | 966,786 | ||||||
1,500,000 | Lowe’s Cos., Inc., 6.65%, 9/15/37 | 1,526,247 | ||||||
2,100,000 | May Department Stores Co., 7.45%, 9/15/11 | 2,208,391 | ||||||
800,000 | McDonald’s Corp., 6.30%, 10/15/37 | 832,468 | ||||||
3,000,000 | Merrill Lynch & Co., Inc., 4.13%, 9/10/09 | 2,953,071 |
Value | ||||||||
Principal Amount | (Note 2) | |||||||
CORPORATE BONDS (cont.) | ||||||||
$ | 3,450,000 | Merrill Lynch & Co., Inc., 6.05%, 8/15/12 | $ | 3,519,735 | ||||
3,250,000 | MetLife, Inc., 5.00%, 6/15/15 | 3,149,991 | ||||||
3,400,000 | Morgan Stanley, 5.63%, 1/9/12 | 3,461,720 | ||||||
2,900,000 | Morgan Stanley, 5.95%, 12/28/17 | 2,903,335 | ||||||
1,250,000 | National City Corp., 4.50%, 3/15/10 | 1,256,971 | ||||||
2,375,000 | National City Corp., 6.88%, 5/15/19 | 2,437,669 | ||||||
600,000 | Nationwide Financial Services, Inc., 5.90%, 7/1/12 | 626,872 | ||||||
2,425,000 | News America, Inc., 6.65%, 11/15/37 (b) | 2,509,569 | ||||||
650,000 | Pacific Gas & Electric Co., 5.63%, 11/30/17 | 653,196 | ||||||
2,785,000 | PNC Funding Corp., 6.13%, 2/15/09 | 2,804,200 | ||||||
725,000 | PNC Funding Corp., 5.50%, 9/28/12 | 736,010 | ||||||
2,100,000 | Prudential Financial Inc., 6.10%, 6/15/17 | 2,116,033 | ||||||
3,725,000 | Sprint Capital Corp., 6.88%, 11/15/28 | 3,542,147 | ||||||
1,300,000 | Sprint Nextel Corp., 6.00%, 12/1/16(L) | 1,247,237 | ||||||
2,000,000 | SunTrust Banks, Inc., 4.25%, 10/15/09 | 1,983,902 | ||||||
600,000 | SunTrust Banks, Inc., 5.25%, 11/5/12 | 605,203 | ||||||
900,000 | Target Corp., 6.50%, 10/15/37 | 907,570 | ||||||
775,000 | Time Warner, Inc., 6.88%, 5/1/12(L) | 816,843 | ||||||
2,400,000 | Time Warner, Inc., 7.63%, 4/15/31 | 2,663,482 | ||||||
1,732,000 | Verizon Communications, Inc., 5.88%, 1/17/12 | 1,785,202 | ||||||
2,725,000 | Vodafone Group PLC, 5.63%, 2/27/17 | 2,718,231 | ||||||
1,300,000 | Wal-Mart Stores, Inc., 6.50%, 8/15/37 | 1,373,538 | ||||||
3,250,000 | Washington Mutual, Inc., 4.20%, 1/15/10 | 2,904,782 | ||||||
200,000 | WellPoint, Inc., 5.88%, 6/15/17 | 201,723 | ||||||
Total Corporate Bonds | 128,685,128 | |||||||
MORTGAGE BACKED SECURITIES (43.3%) | ||||||||
3,490,000 | American Home Mortgage Investment Trust 2005-2 5A4C, 5.41%, 9/25/35 | 3,380,364 | ||||||
4,310,000 | Banc of America Commercial Mortgage, Inc. 2004-3 A5, 5.49%, 6/10/39 | 4,439,647 | ||||||
3,825,000 | Banc of America Commercial Mortgage, Inc. 2004-4 A6, 4.88%, 7/10/42 | 3,804,886 | ||||||
3,230,000 | Banc of America Commercial Mortgage, Inc. 2005-6 AM, 5.35%, 9/10/47 | 3,146,852 | ||||||
4,215,000 | Banc of America Commercial Mortgage, Inc. 2006-3 AM, 6.01%, 7/10/44 | 4,297,923 | ||||||
5,235,000 | Banc of America Commercial Mortgage, Inc. 2006-4 AM, 5.68%, 7/10/46 | 5,243,339 | ||||||
4,069,239 | Banc of America Commercial Mortgage, Inc. 2007-8 2A1, 7.00%, 9/25/37 | 4,108,662 | ||||||
959,742 | Banc of America Funding Corp. 2006-F 1A1, 5.17%, 7/20/36 | 961,934 | ||||||
2,075,000 | Citigroup Commercial Mortgage Trust 2007-C6 C, 5.89%, 12/10/49 | 1,884,385 | ||||||
951,731 | Citigroup Mortgage Loan Trust, Inc. 2005-7, 5.20%, 9/25/35 | 936,162 | ||||||
221,368 | Commercial Mortgage Pass-Through Certificates 2004-LB2A A1, 2.96%, 3/10/39 | 219,030 | ||||||
2,415,000 | Commercial Mortgage Pass-Through Certificates 2007-C9 A4, 2.96%, 12/10/49 | 2,507,591 | ||||||
4,588,086 | Countrywide Alternative Loan Trust 2005-50CB 1A1, 5.50%, 11/25/35 | 4,443,400 | ||||||
1,847,892 | Countrywide Alternative Loan Trust 2007-24 A11, 7.00%, 10/25/37 | 1,861,175 | ||||||
5,298,044 | Countrywide Alternative Loan Trust 2007-OA2 1A1, 5.70%, 3/25/47(c) | 5,018,837 | ||||||
1,102,081 | Countrywide Home Loans 2005-HYB6 4A1B, 5.37%, 10/20/35 | 1,088,677 | ||||||
4,001,784 | Countrywide Home Loans 2007-HY5 1A1, 5.96%, 9/25/37 | 4,000,193 |
See accompanying notes to financial statements.
13
portfolio of investments (continued)
NEW COVENANT INCOME FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Principal Amount | (Note 2) | |||||||
MORTGAGE BACKED SECURITIES (cont.) | ||||||||
$ | 1,205,000 | Credit Suisse First Boston Mortgage Capital Certificates 2006-C1 AM, 5.73%, 2/15/39 | $ | 1,204,344 | ||||
4,795,000 | Credit Suisse First Boston Mortgage Capital Certificates 2006-C4 A3, 5.47%, 9/15/39 | 4,841,311 | ||||||
720,000 | Credit Suisse First Boston Mortgage Capital Certificates 2007-3 1A3A, 5.75%, 3/25/37 | 722,868 | ||||||
1,825,000 | Credit Suisse First Boston Mortgage Capital Certificates 2007-4R 1A1, 5.69%, 10/26/36 | 1,816,605 | ||||||
4,783,741 | Credit Suisse First Boston Mortgage Securities Corp. 2003-C3, 2.85%, 5/15/38 | 4,746,836 | ||||||
1,365,000 | Credit Suisse First Boston Mortgage Securities Corp. 2003-C3 A5, 3.94%, 5/15/38 | 1,304,374 | ||||||
1,540,000 | Credit Suisse First Boston Mortgage Securities Corp. 2005-C1 A4, 5.01%, 2/15/38 | 1,505,623 | ||||||
4,585,000 | Deutsche ALT-A Securities, Inc. Mortgage Loan Trust 005-3 4A5, 5.25%, 6/25/35 | 4,537,508 | ||||||
1,370,000 | General Electric Capital Commercial Mortgage Corp. 2004-C1 A3, 4.66%, 11/10/38 | 1,347,372 | ||||||
1,230,000 | GMAC Commercial Mortgage Securities, Inc. 2004-C2 A4, 5.37%, 8/10/38 | 1,253,791 | ||||||
908,963 | Goldman Sachs Mortgage Securities Corp. 2007-10 A2A, 6.50%, 11/25/37 | 902,418 | ||||||
3,220,000 | Goldman Sachs Mortgage Securities Corp. 2007-GG10 A2, 5.78%, 8/10/45 | 3,285,296 | ||||||
1,085,000 | Goldman Sachs Mortgage Securities Corp. 2007-GG10 A4 L, 5.99%, 8/10/45 | 1,124,352 | ||||||
1,475,276 | GSAA Home Equity Trust 2007-10 A1A, 6.00%, 11/25/37 | 1,446,656 | ||||||
3,956,206 | HSI Home Loan Obligation 2007-AR2 2A1, 6.00%, 9/25/37 | 3,958,134 | ||||||
4,092,302 | Indymac Index Mortgage Loan Trust 2006AR11 3A1, 5.83%, 6/25/36 | 4,062,671 | ||||||
1,155,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2004-CB8 A4, 4.47%, 1/12/39 | 1,121,497 | ||||||
5,445,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2004-CB9 A4, 5.55%, 6/12/41 | 5,617,036 | ||||||
579,447 | JP Morgan Chase Commercial Mortgage Securities Corp. 2004- PNC1 A1, 2.80%, 6/12/41 | 572,162 | ||||||
1,120,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2006- CB17 A4, 5.43%, 12/12/43 | 1,128,331 | ||||||
1,200,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2006- LDP7 A4, 6.07%, 4/15/45 | 1,250,755 | ||||||
2,075,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2006- LDP8 B, 5.52%, 5/15/45 | 1,891,225 | ||||||
4,270,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2006- LDP9 A3, 5.41%, 5/15/47 | 4,262,175 | ||||||
1,305,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2007- CB18 A4, 5.44%, 6/12/47 | 1,312,671 | ||||||
2,680,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2007- CB20 A4, 5.79%, 2/12/51 | 2,761,001 | ||||||
1,565,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2007- LD11 A4, 6.01%, 6/15/49 | 1,622,482 |
Value | ||||||||
Principal Amount | (Note 2) | |||||||
MORTGAGE BACKED SECURITIES (cont.) | ||||||||
$ | 3,880,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2007- LD12 A2, 5.83%, 2/15/51 | $ | 3,962,774 | ||||
4,165,000 | JP Morgan Chase Commercial Mortgage Securities Corp. 2007- LD12 A4, 5.88%, 2/15/51 | 4,316,706 | ||||||
4,364,000 | LB-UBS Commercial Mortgage Trust 2004-C7 A6, 4.79%, 10/15/29 | 4,321,849 | ||||||
3,770,000 | LB-UBS Commercial Mortgage Trust 2006-C6 AM, 5.41%, 9/15/39 | 3,696,761 | ||||||
1,565,620 | Master Reperforming Loan Trust 2006- 2 1A1, 5.90%, 5/25/36 | 1,543,702 | ||||||
1,185,000 | Merrill Lynch/Countrywide Commercial Mortgage Trust 2006-4 A3, 5.17%, 12/12/49 | 1,172,325 | ||||||
1,675,000 | Morgan Stanley Capital I 2004-IQ7 A4, 5.54%, 6/15/38 | 1,720,130 | ||||||
5,945,000 | Morgan Stanley Capital I 2007-IQ15 A4, 5.88%, 6/11/49 | 6,204,434 | ||||||
3,050,000 | Morgan Stanley Mortgage Loan Trust 2006-7 5A2, 5.96%, 6/25/36 | 2,585,705 | ||||||
560,000 | Nomura Asset Acceptance Corp. 2006- AF1 1A3, 6.41%, 5/25/36 | 528,330 | ||||||
2,625,000 | Nomura Asset Acceptance Corp. 2006- AF2 1A4, 6.43%, 8/25/36 | 2,433,894 | ||||||
2,222,214 | PHH Alternative Mortgage Trust 2007-1 21A, 6.00%, 2/25/37 | 2,209,335 | ||||||
3,020,595 | Residential Accredit Loans, Inc. 2007- QS10 A1, 6.50%, 9/25/37 | 3,036,167 | ||||||
886,241 | Residential Funding Mortgage Securities I 2006-SA2 2A1, 5.86%, 8/25/36 | 896,811 | ||||||
3,739,593 | Structured Adjustable Rate Mortgage Loan 2007-3 3A1, 5.73%, 4/25/37 | 3,727,179 | ||||||
2,737,050 | TBW Mortgage Backed Pass Through Certificates 2006-2 7A1, 7.00%, 7/25/36 | 2,832,700 | ||||||
3,306,496 | The Bear Stearns Cos., Inc. ARM 2007- 5 1A1, 5.83%, 8/25/47 | 3,296,577 | ||||||
4,995,000 | Wachovia Bank Commercial Mortgage Trust 2004-C11 A5, 5.22%, 1/15/41 | 5,064,435 | ||||||
4,885,000 | Wachovia Bank Commercial Mortgage Trust 2004-C12 A4, 5.23%, 7/15/41 | 4,983,978 | ||||||
4,098,175 | Wachovia Mortgage Loan Trust, LLC 2006-A 3A1, 5.24%, 5/20/36 | 4,075,314 | ||||||
1,125,000 | Washington Mutual Mortgage Pass-Through Certificates 2003-AR11 A6, 3.99%, 10/25/33 | 1,115,217 | ||||||
4,489,056 | Washington Mutual Mortgage Pass-Through Certificates 2005-AR3 A1, 4.64%, 3/25/35 | 4,458,959 | ||||||
4,130,000 | Washington Mutual Mortgage Pass-Through Certificates 2005-AR5 A5, 4.68%, 5/25/35 | 4,095,934 | ||||||
3,997,104 | Washington Mutual Mortgage Pass-Through Certificates 2006-AR12 2A3, 5.76%, 10/25/36 | 3,973,123 | ||||||
967,210 | Washington Mutual Mortgage Pass-Through Certificates 2006-AR2 A1A, 5.80%, 4/25/46(c) | 933,841 | ||||||
1,231,443 | Washington Mutual Mortgage Pass-Through Certificates 2006-AR3 A1A, 5.83%, 5/25/46(c) | 1,190,436 | ||||||
5,472,738 | Washington Mutual Mortgage Pass-Through Certificates 2007-HY3 4A1, 5.36%, 3/25/37 | 5,451,175 | ||||||
3,261,914 | Washington Mutual Mortgage Pass-Through Certificates 2007-HY5 2A2, 5.34%, 5/25/37 | 3,219,693 | ||||||
3,593,542 | Washington Mutual Mortgage Pass-Through Certificates 2007-HY6 1A1, 5.70%, 5/1/10 | 3,586,477 | ||||||
9,996,815 | Washington Mutual Mortgage Pass-Through Certificates 2007-HY6 2A1, 5.70%, 6/25/37 | 9,871,448 |
See accompanying notes to financial statements.
14
portfolio of investments (continued)
NEW COVENANT INCOME FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Principal Amount | (Note 2) | |||||||
MORTGAGE BACKED SECURITIES (cont.) | ||||||||
$ | 1,164,431 | Washington Mutual Mortgage Pass-Through Certificates 2007-HY7 3A2, 5.92%, 7/25/37 | $ | 1,159,307 | ||||
884,918 | Washington Mutual Mortgage Pass-Through Certificates 2007-OA3 4AB, 5.63%, 4/25/47(c) | 820,585 | ||||||
4,695,738 | Washington Mutual Mortgage Pass-Through Certificates 2007-OA5 1A, 5.78%, 4/25/33 | 4,500,395 | ||||||
944,817 | Washington Mutual Mortgage Pass-Through Certificates 2007-OA5 1A1B, 5.61%, 6/25/47(c) | 873,672 | ||||||
1,240,136 | Washington Mutual Mortgage Pass-Through Certificates 2007-OA6 1A, 5.84%, 7/25/47 | 1,191,151 | ||||||
6,171,202 | Wells Fargo Mortgage Backed Securities Trust 2006-AR10 5A1, 5.60%, 7/25/36 | 6,221,115 | ||||||
5,320,000 | Wells Fargo Mortgage Backed Securities Trust 2006-AR7 2A5, 5.61%, 5/25/36 | 5,362,593 | ||||||
Total Mortgage Backed Securities | 231,576,778 | |||||||
U.S. GOVERNMENT AGENCIES (25.9%) | ||||||||
Fannie Mae | ||||||||
880,667 | 6.13%, 10/1/08 | 882,496 | ||||||
1,934,081 | 4.96%, 11/1/08 | 1,933,138 | ||||||
1,378,440 | 6.12%, 4/1/09 | 1,395,498 | ||||||
3,688,436 | 7.41%, 4/1/10 | 3,879,950 | ||||||
2,577,494 | 7.26%, 12/1/10(L) | 2,721,369 | ||||||
7,691,115 | 6.20%, 1/1/11 | 8,022,446 | ||||||
1,906,578 | 6.48%, 1/1/11 | 1,999,016 | ||||||
4,584,654 | 6.10%, 4/1/11 | 4,778,606 | ||||||
915,478 | 6.09%, 5/1/11 | 954,851 | ||||||
1,282,607 | 6.31%, 5/1/11 | 1,345,117 | ||||||
2,745,000 | 6.28%, 8/1/11 | 2,885,164 | ||||||
2,759,021 | 6.14%, 10/1/11 | 2,892,304 | ||||||
2,076,376 | 6.01%, 11/1/11 | 2,166,388 | ||||||
5,568,627 | 6.11%, 2/1/12 | 5,862,977 | ||||||
1,542,157 | 5.78%, 7/1/12 | 1,608,555 | ||||||
899,930 | 4.88%, 1/1/13 | 910,314 | ||||||
1,204,586 | 5.77%, 6/1/13 | 1,263,728 | ||||||
2,000,000 | 5.52%, 5/1/17 | 2,065,000 | ||||||
980,905 | 6.50%, 8/1/17 | 1,015,020 | ||||||
3,114,517 | 5.00%, 1/1/21 | 3,122,791 | ||||||
426,211 | 7.50%, 8/1/29 | 456,002 | ||||||
5,738,000 | 5.00%, 10/25/30 | 5,710,596 | ||||||
18,877 | 7.50%, 12/1/30 | 20,199 | ||||||
2,070,000 | 5.50%, 2/25/32 | 2,103,129 | ||||||
855,000 | 5.00%, 3/25/32 | 845,325 | ||||||
830,356 | 5.00%, 5/25/32 | 825,596 | ||||||
516,976 | 7.00%, 6/1/32 | 544,432 | ||||||
960,000 | 4.50%, 7/25/33 | 950,319 | ||||||
4,935,000 | 5.00%, 4/25/34 | 4,822,057 | ||||||
4,086,975 | 5.50%, 12/25/34 | 4,152,759 | ||||||
1,062,242 | 5.46%, 1/1/36 | 1,084,784 | ||||||
853,022 | 5.50%, 3/1/36 | 854,038 | ||||||
1,245,000 | 6.00%, 6/25/36 | 1,268,848 | ||||||
6,627,579 | 5.94%, 11/1/36 | 6,724,256 | ||||||
455,000 | 5.00%, 1/1/38(a) | 443,980 | ||||||
3,258,302 | 5.90%, 7/25/42 | 3,366,709 | ||||||
Freddie Mac | ||||||||
5,437,052 | 6.98%, 10/1/10 | 5,771,431 | ||||||
1,285,000 | 6.90%, 12/1/10 | 1,362,100 | ||||||
2,685,814 | 4.50%, 7/15/16 | 2,692,787 | ||||||
479,996 | 6.50%, 9/1/19 | 494,570 |
Shares or | Value | |||||||
Principal Amount | (Note 2) | |||||||
U.S. GOVERNMENT AGENCIES (cont.) | ||||||||
Freddie Mac (cont.) | ||||||||
$ | 4,150,000 | 5.00%, 2/15/20 | $ | 4,192,769 | ||||
3,598,939 | 5.00%, 12/1/20 | 3,603,033 | ||||||
1,925,000 | 5.00%, 1/1/23(a) | 1,926,810 | ||||||
5,135,000 | 4.50%, 3/15/27 | 4,965,392 | ||||||
810,000 | 5.00%, 3/15/31 | 807,493 | ||||||
5,270,000 | 5.00%, 8/15/31 | 5,216,243 | ||||||
1,230,000 | 5.00%, 3/15/32 | 1,216,543 | ||||||
4,150,000 | 5.00%, 6/15/33 | 4,043,260 | ||||||
1,040,000 | 5.00%, 10/15/33 | 1,009,927 | ||||||
3,395,000 | 5.00%, 3/15/34 | 3,305,302 | ||||||
1,045,000 | 5.00%, 8/15/34 | 1,038,672 | ||||||
950,000 | 5.00%, 9/15/34 | 921,350 | ||||||
565,000 | 5.50%, 8/1/37 | 563,921 | ||||||
269,999 | 5.50%, 9/1/37 | 269,485 | ||||||
2,280,000 | 5.50%, 12/1/37 | 2,275,554 | ||||||
7,565,000 | 5.00%, 1/1/38(a) | 7,381,784 | ||||||
Total U.S. Government Agencies | 138,936,183 | |||||||
U.S.TREASURY OBLIGATIONS (0.3%) | ||||||||
425,000 | U.S. Treasury Bonds, 6.00%, 2/15/26(d) | 503,094 | ||||||
890,000 | U.S. Treasury Note, 4.25%, 11/15/17 | 905,784 | ||||||
Total U.S. Treasury Obligations | 1,408,878 | |||||||
CLOSED-END INVESTMENT COMPANIES (1.4%) | ||||||||
156,000 | BlackRock Income Trust | 861,120 | ||||||
25,300 | First Trust/FIDAC Mortgage Income Fund(L) | 433,895 | ||||||
49,589 | MFS Government Markets Income Trust | 334,726 | ||||||
297,100 | MFS Intermediate Income Trust | 1,806,368 | ||||||
116,765 | Putnam Master Intermediate Income Trust | 737,955 | ||||||
221,136 | Putnam Premier Income Trust | 1,371,043 | ||||||
73,600 | Western Asset/Claymore U.S. Treasury | 865,536 | ||||||
72,500 | Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 | 850,425 | ||||||
Total Closed-End Investment Companies | 7,261,068 | |||||||
CASH EQUIVALENT (4.1%) | ||||||||
22,208,792 | JP Morgan Cash Trade Execution(d) | 22,208,792 | ||||||
Total Cash Equivalent | 22,208,792 | |||||||
INVESTMENTS HELD AS COLLATERAL FOR LOANED SECURITIES (1.5%) | ||||||||
4,999,595 | CC USA, Inc. MTN, 4.38%, 1/2/08(c) | 4,999,595 | ||||||
536,343 | CWL 2006-14 2A1 ABS, 4.92%, 1/25/08(c) | 536,343 | ||||||
651,526 | Morgan Stanley Repurchase Agreement, 4.70%, 01/02/08 (Purchased on 12/31/07, proceeds at maturity $651,782, collateralized by various U.S. Agency Mortgages, fair value $661,724) | 651,526 | ||||||
2,000,000 | Santander U.S. Debt SA UNI MTN, 5.20%, 3/5/08(c) | 2,000,000 | ||||||
Total Investments Held as Collateral for Loaned Securities | 8,187,464 | |||||||
TOTAL INVESTMENTS — (102.1%) | ||||||||
(Cost $541,390,544)(e) | $ | 546,579,673 | ||||||
Liabilities in Excess of Other Assets — (2.1)% | (11,363,264 | ) | ||||||
NET ASSETS — 100.0% | $ | 535,216,409 | ||||||
See accompanying notes to financial statements.
15
portfolio of investments (continued)
NEW COVENANT INCOME FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
(a) | Security purchased on a when-issued or delayed delivery basis. | |
(b) | Security exempt from registration under Rule 144A of the Securities Act of 1933 or otherwise restricted as to resale. These securities may be resold in transactions exempt from registration, normally for qualified buyers. The Advisor, using procedures approved by the Board of Trustees, has deemed these securities to be liquid. | |
(c) | Variable or Floating Rate Security. Rate disclosed is as of December 31, 2007. | |
(d) | All or a portion of this security has been segregated as collateral for securities purchased on a when-issued or delayed basis. | |
(e) | See notes to financial statement for tax basis unrealized appreciation (depreciation) of securities. | |
(L) | A portion or all of the security is on loan. | |
ABS | Asset Backed Security | |
ARM | Adjustable Rate Mortgage | |
LLC | Limited Liability Company | |
LP | Limited Partnership | |
MTN | Medium Term Note | |
PLC | Public Limited Company |
16
portfolio of investments (continued)
NEW COVENANT BALANCED GROWTH FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
INVESTMENT COMPANIES (98.5%): | ||||||||
5,897,842 | New Covenant Growth Fund (b) | $ | 211,319,689 | |||||
4,937,593 | New Covenant Income Fund (b) | 123,785,456 | ||||||
Total Investment Companies | 335,105,145 | |||||||
Principal Amount | ||||||||
CASH EQUIVALENTS (1.0%): | ||||||||
$ | 3,578,461 | JP Morgan Cash Trade Execution | 3,578,461 | |||||
Total Cash Equivalents | 3,578,461 | |||||||
TOTAL INVESTMENTS — (99.5%) | ||||||||
(Cost $288,060,752)(a) | $ | 338,683,606 | ||||||
Assets in excess of other liabilities — (0.5%) | 1,626,397 | |||||||
NET ASSETS — 100.0% | $ | 340,310,003 | ||||||
(a) | See notes to financial statements for tax basis unrealized appreciation (depreciation) of securities. | |
(b) | Investment in affiliate. |
NEW COVENANT BALANCED INCOME FUND
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
INVESTMENT COMPANIES (98.5%): | ||||||||
1,207,050 | New Covenant Growth Fund (b) | $ | 43,248,591 | |||||
2,776,277 | New Covenant Income Fund (b) | 69,601,263 | ||||||
Total Investment Companies | 112,849,854 | |||||||
Principal Amount | ||||||||
CASH EQUIVALENTS (1.5%): | ||||||||
$ | 1,691,735 | JP Morgan Cash Trade Execution | 1,691,735 | |||||
Total Cash Equivalents | 1,691,735 | |||||||
TOTAL INVESTMENTS — (100.0%) | ||||||||
(Cost $100,888,171)(a) | $ | 114,541,589 | ||||||
Liabilities in excess of other assets — (0.0%) | (25,009 | ) | ||||||
NET ASSETS — 100.0% | $ | 114,516,580 | ||||||
(a) | See notes to financial statements for tax basis unrealized appreciation (depreciation) of securities. | |
(b) | Investment in affiliate. |
See accompanying notes to financial statements.
17
statements of assets and liabilities
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Balanced | Balanced | |||||||||||||||
Growth Fund | Income Fund | Growth Fund | Income Fund | |||||||||||||
ASSETS: | ||||||||||||||||
Investments, at value (Cost $943,908,146, $541,390,544, $3,578,461 and $1,691,735, respectively)(a) | $ | 1,084,541,922 | $ | 546,579,673 | $ | 3,578,461 | $ | 1,691,735 | ||||||||
Investments in affiliates, at value (Cost $0, $0, $284,482,291 and $99,196,436, respectively) | — | — | 335,105,145 | 112,849,854 | ||||||||||||
Cash | 39,263 | 1,944,347 | — | — | ||||||||||||
Foreign currency, at value (Cost $93,586, $0, $0 and $0, respectively) | 94,512 | — | — | — | ||||||||||||
Interest and dividends receivable | 1,152,381 | 3,247,142 | 18,660 | 6,714 | ||||||||||||
Receivable for capital shares issued | 5,259 | 475 | 205,652 | 1,400 | ||||||||||||
Receivable for investments sold | 3,789,549 | 10,876,359 | 1,558,201 | — | ||||||||||||
Receivable for forward foreign currency contracts | 143 | — | — | — | ||||||||||||
Receivable from Advisor | — | — | 71,037 | 23,898 | ||||||||||||
Reclaims receivable | 41,449 | — | — | — | ||||||||||||
Prepaid expenses | 34,501 | 24,020 | 20,528 | 10,532 | ||||||||||||
Total Assets | 1,089,698,979 | 562,672,016 | 340,557,684 | 114,584,133 | ||||||||||||
LIABILITIES: | ||||||||||||||||
Payable for investments purchased | 2,865,157 | 18,229,089 | — | — | ||||||||||||
Payable for capital shares redeemed | 938,871 | 623,850 | 90,467 | 11,750 | ||||||||||||
Payable for forward foreign currency contracts | 137 | — | — | — | ||||||||||||
Payable for return of collateral received on securities loaned | 117,296,350 | 8,187,464 | — | — | ||||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Investment advisory | 706,120 | 221,137 | — | — | ||||||||||||
Administration | 6,254 | 3,958 | 2,419 | 820 | ||||||||||||
Shareholder service | 140,642 | 92,998 | 73,909 | 23,338 | ||||||||||||
Transfer agent | 11,478 | 11,792 | 23,932 | 12,962 | ||||||||||||
Accounting | 25,088 | 12,876 | 8,016 | 2,642 | ||||||||||||
Chief Compliance Officer | 12,273 | 5,754 | 4,222 | 1,215 | ||||||||||||
Other | 146,125 | 66,689 | 44,716 | 14,826 | ||||||||||||
Total Liabilities | 122,148,495 | 27,455,607 | 247,681 | 67,553 | ||||||||||||
NET ASSETS | $ | 967,550,484 | $ | 535,216,409 | $ | 340,310,003 | $ | 114,516,580 | ||||||||
NET ASSETS consist of: | ||||||||||||||||
Capital | 828,556,037 | 536,266,745 | 300,723,499 | 102,682,719 | ||||||||||||
Undistributed (distributions in excess of) net investment income | (827,887 | ) | 126,441 | 16,006 | 14,335 | |||||||||||
Accumulated net realized losses from investment and foreign currency transactions | (815,371 | ) | (6,365,906 | ) | (11,052,356 | ) | (1,833,892 | ) | ||||||||
Net unrealized appreciation on investment transactions and translation of assets and liabilities denominated in foreign currency | 140,637,705 | 5,189,129 | 50,622,854 | 13,653,418 | ||||||||||||
Net Assets | $ | 967,550,484 | $ | 535,216,409 | $ | 340,310,003 | $ | 114,516,580 | ||||||||
Shares Outstanding | 27,006,775 | 21,346,197 | 3,767,459 | 5,582,685 | ||||||||||||
Net asset value, offering price and redemption price per share | $ | 35.83 | $ | 25.07 | $ | 90.33 | $ | 20.51 |
(a) | Includes value of securities on loan of $113,158,491, $8,060,407, $0 and $0, respectively. |
See accompanying notes to financial statements.
18
statements of operations
NEW COVENANT FUNDS
For the six months ended December 31, 2007
(Unaudited)
For the six months ended December 31, 2007
(Unaudited)
Balanced | Balanced | |||||||||||||||
Growth Fund | Income Fund | Growth Fund | Income Fund | |||||||||||||
INVESTMENT INCOME: | ||||||||||||||||
Interest | $ | 498,032 | $ | 14,643,399 | $ | 122,195 | $ | 40,378 | ||||||||
Dividend | 7,474,913 | 223,931 | — | — | ||||||||||||
Dividend income from affiliates | — | — | 3,508,325 | 1,759,328 | ||||||||||||
Foreign tax withholding | (62,227 | ) | — | — | — | |||||||||||
Income from securities lending | 225,414 | 28,491 | — | — | ||||||||||||
Total Investment Income | 8,136,132 | 14,895,821 | 3,630,520 | 1,799,706 | ||||||||||||
EXPENSES: | ||||||||||||||||
Investment advisory | 4,946,159 | 2,064,192 | — | — | ||||||||||||
Administration | 50,027 | 27,525 | 17,615 | 5,925 | ||||||||||||
Shareholder servicing | 909,686 | 436,096 | 426,684 | 145,093 | ||||||||||||
Accounting | 152,339 | 87,172 | 45,878 | 16,068 | ||||||||||||
Transfer agent | 31,483 | 28,193 | 68,124 | 35,526 | ||||||||||||
Custodian | 75,959 | 8,095 | 170 | 168 | ||||||||||||
Chief Compliance Officer | 14,824 | 7,909 | 5,118 | 1,709 | ||||||||||||
Other | 169,123 | 100,618 | 66,904 | 30,041 | ||||||||||||
Total expenses before contractual fee reductions | 6,349,600 | 2,759,800 | 630,493 | 234,530 | ||||||||||||
Expenses contractually reduced by Advisor | (901,397 | ) | (443,942 | ) | (425,720 | ) | (145,262 | ) | ||||||||
Expenses paid indirectly | (52,754 | ) | — | — | — | |||||||||||
Total Expenses | 5,395,449 | 2,315,858 | 204,773 | 89,268 | ||||||||||||
NET INVESTMENT INCOME | 2,740,683 | 12,579,963 | 3,425,747 | 1,710,438 | ||||||||||||
REALIZED AND UNREALIZED GAINS/(LOSSES) FROM INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: | ||||||||||||||||
Net realized gains from investment transactions | 30,474,381 | 1,917,362 | 13,330,287 | † | 3,445,325 | † | ||||||||||
Net realized gains from foreign currency transactions | 28,532 | — | — | — | ||||||||||||
Net change in unrealized appreciation/depreciation on investments and foreign currency transactions | (57,673,072 | ) | 10,274,391 | (15,386,469 | ) | (2,775,380 | ) | |||||||||
Net realized/unrealized gains (losses) from investments and foreign currency transactions | (27,170,159 | ) | 12,191,753 | (2,056,182 | ) | 669,945 | ||||||||||
Change in net assets resulting from operations | $ | (24,429,476 | ) | $ | 24,771,716 | $ | 1,369,565 | $ | 2,380,383 | |||||||
† | Represents realized gains from investment transactions with affiliates. |
See accompanying notes to financial statements.
19
statements of changes in net assets
NEW COVENANT FUNDS
Growth Fund | Income Fund | |||||||||||||||
For the six | For the year | For the six | For the year | |||||||||||||
months ended | ended | months ended | ended | |||||||||||||
December 31, | June 30, | December 31, | June 30, | |||||||||||||
2007 | 2007 | 2007 | 2007 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 2,740,683 | $ | 7,031,244 | $ | 12,579,963 | $ | 24,148,842 | ||||||||
Net realized gains (losses) from investments and foreign currency transactions | 30,502,913 | 76,717,411 | 1,917,362 | (1,186,020 | ) | |||||||||||
Net change in unrealized appreciation/(depreciation) on investments and translation of assets and liabilities in foreign currency | (57,673,072 | ) | 89,808,372 | 10,274,391 | 6,308,382 | |||||||||||
Change in net assets resulting from operations | (24,429,476 | ) | 173,557,027 | 24,771,716 | 29,271,204 | |||||||||||
DISTRIBUTION TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (2,529,045 | ) | (7,673,788 | ) | (12,453,522 | ) | (24,215,086 | ) | ||||||||
From net realized gains on investments | (50,589,593 | ) | — | — | — | |||||||||||
Tax return of capital | — | — | — | (94,148 | ) | |||||||||||
Change in net assets from distributions to shareholders | (53,118,638 | ) | (7,673,788 | ) | (12,453,522 | ) | (24,309,234 | ) | ||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||
Proceeds from shares issued | 64,852,268 | 54,842,359 | 45,055,222 | 59,306,070 | ||||||||||||
Dividends reinvested | 37,240,818 | 388,217 | 3,892,586 | 1,720,299 | ||||||||||||
Cost of shares redeemed | (90,530,294 | ) | (93,587,641 | ) | (63,394,516 | ) | (55,001,994 | ) | ||||||||
Change in net assets from capital transactions | 11,562,792 | (38,357,065 | ) | (14,446,708 | ) | 6,024,375 | ||||||||||
Change in net assets | (65,985,322 | ) | 127,526,174 | (2,128,514 | ) | 10,986,345 | ||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of period | 1,033,535,806 | 906,009,632 | 537,344,923 | 526,358,578 | ||||||||||||
End of period | $ | 967,550,484 | $ | 1,033,535,806 | $ | 535,216,409 | $ | 537,344,923 | ||||||||
SHARE TRANSACTIONS: | ||||||||||||||||
Issued | 1,740,595 | 1,510,806 | 1,814,174 | 2,380,735 | ||||||||||||
Reinvested | 1,052,318 | 16,552 | 160,890 | 68,972 | ||||||||||||
Redeemed | (2,355,481 | ) | (2,617,340 | ) | (2,544,945 | ) | (2,209,197 | ) | ||||||||
Net increase (decrease) | 437,432 | (1,089,982 | ) | (569,881 | ) | 240,510 | ||||||||||
Accumulated net investment income (loss) | $ | (827,887 | ) | $ | (1,039,525 | ) | $ | 126,441 | $ | — | ||||||
See accompanying notes to financial statements.
20
statements of changes in net assets (continued)
NEW COVENANT FUNDS
Balanced Growth Fund | Balanced Income Fund | |||||||||||||||
For the six | For the year | For the six | For the year | |||||||||||||
months ended | ended | months ended | ended | |||||||||||||
December 31, | June 30, | December 31, | June 30, | |||||||||||||
2007 | 2007 | 2007 | 2007 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
OPERATIONS: | ||||||||||||||||
Net investment income | $ | 3,425,747 | $ | 7,056,369 | $ | 1,710,438 | $ | 3,612,926 | ||||||||
Net realized gains on investments | 13,330,287 | † | 743,569 | † | 3,445,325 | † | 705,478 | † | ||||||||
Net change in unrealized appreciation/(depreciation) on investments | (15,386,469 | ) | 36,095,796 | (2,775,380 | ) | 8,136,242 | ||||||||||
Change in net assets resulting from operations | 1,369,565 | 43,895,734 | 2,380,383 | 12,454,646 | ||||||||||||
DISTRIBUTION TO SHAREHOLDERS: | ||||||||||||||||
From net investment income | (3,413,359 | ) | (7,052,751 | ) | (1,696,103 | ) | (3,613,264 | ) | ||||||||
Tax return of capital | — | — | — | (3,119 | ) | |||||||||||
Change in net assets from distributions to shareholders | (3,413,359 | ) | (7,052,751 | ) | (1,696,103 | ) | (3,616,383 | ) | ||||||||
CAPITAL TRANSACTIONS: | ||||||||||||||||
Proceeds from shares issued | 16,597,924 | 28,542,412 | 2,684,214 | 5,503,331 | ||||||||||||
Dividends reinvested | 2,663,486 | 5,379,927 | 1,048,352 | 2,225,098 | ||||||||||||
Cost of shares redeemed | (30,251,545 | ) | (29,498,444 | ) | (11,755,478 | ) | (17,223,826 | ) | ||||||||
Change in net assets from capital transactions | (10,990,135 | ) | 4,423,895 | (8,022,912 | ) | (9,495,397 | ) | |||||||||
Change in net assets | (13,033,929 | ) | 41,266,878 | (7,338,632 | ) | (657,134 | ) | |||||||||
NET ASSETS: | ||||||||||||||||
Beginning of period | 353,343,932 | 312,077,054 | 121,855,212 | 122,512,346 | ||||||||||||
End of period | $ | 340,310,003 | $ | 353,343,932 | $ | 114,516,580 | $ | 121,855,212 | ||||||||
SHARE TRANSACTIONS: | ||||||||||||||||
Issued | 183,192 | 327,193 | 130,938 | 274,677 | ||||||||||||
Reinvested | 29,466 | 61,468 | 51,303 | 111,204 | ||||||||||||
Redeemed | (333,978 | ) | (338,514 | ) | (572,679 | ) | (865,752 | ) | ||||||||
Net increase (decrease) | (121,320 | ) | 50,147 | (390,438 | ) | (479,871 | ) | |||||||||
Accumulated net investment income | $ | 16,006 | $ | 3,618 | $ | 14,335 | $ | — | ||||||||
† | Represents realized gains (losses) from investment transactions with affiliates. |
See accompanying notes to financial statements.
21
financial highlights
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
Growth Fund | ||||||||||||||||||||||||
For the six | For the year | For the year | For the year | For the year | For the year | |||||||||||||||||||
months ended | ended | ended | ended | ended | ended | |||||||||||||||||||
December 31, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||
2007 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 38.90 | $ | 32.76 | $ | 29.92 | $ | 28.07 | $ | 23.51 | $ | 24.13 | ||||||||||||
INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||
Net investment income | 0.11 | 0.26 | 0.18 | 0.21 | 0.07 | 0.10 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments and foreign currency transactions | (1.11 | ) | 6.17 | 2.86 | 1.85 | 4.58 | (0.63 | ) | ||||||||||||||||
Total from Investment Activities | (1.00 | ) | 6.43 | 3.04 | 2.06 | 4.65 | (0.53 | ) | ||||||||||||||||
DIVIDENDS: | ||||||||||||||||||||||||
Net investment income | (0.10 | ) | (0.29 | ) | (0.20 | ) | (0.21 | ) | (0.09 | ) | (0.09 | ) | ||||||||||||
Net realized gains | (1.97 | ) | — | — | — | — | — | |||||||||||||||||
Total Dividends | (2.07 | ) | (0.29 | ) | (0.20 | ) | (0.21 | ) | (0.09 | ) | (0.09 | ) | ||||||||||||
Change in net asset value per share | (3.07 | ) | 6.14 | 2.84 | 1.85 | 4.56 | (0.62 | ) | ||||||||||||||||
Net Asset Value, End of Period | $ | 35.83 | $ | 38.90 | $ | 32.76 | $ | 29.92 | $ | 28.07 | $ | 23.51 | ||||||||||||
Total Return | (2.48) | %(b) | 19.68 | % | 10.17 | % | 7.38 | % | 19.81 | % | (2.17 | )% | ||||||||||||
RATIOS/SUPPLEMENTARY DATA: | ||||||||||||||||||||||||
Net assets at end of period (in 000’s) | $ | 967,550 | $ | 1,033,536 | $ | 906,010 | $ | 878,583 | $ | 834,575 | $ | 708,885 | ||||||||||||
Ratio of expenses to average net assets | 1.08 | %(c) | 1.08 | % | 1.07 | % | 1.11 | % | 1.13 | % | 1.13 | % | ||||||||||||
Ratio of net investment income to average net assets | 0.55 | %(c) | 0.73 | % | 0.58 | % | 0.75 | % | 0.32 | % | 0.47 | % | ||||||||||||
Ratio of expenses to average net assets (a) | 1.27 | %(c) | 1.28 | % | 1.28 | % | 1.36 | % | 1.39 | % | 1.13 | % | ||||||||||||
Portfolio turnover rate | 35 | % | 65 | % | 51 | % | 76 | % | 94 | % | 63 | % |
(a) | Ratios excluding waivers and expenses paid indirectly. | |
(b) | Not annualized. | |
(c) | Annualized. |
See accompanying notes to financial statements.
22
financial highlights (continued)
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
Income Fund | ||||||||||||||||||||||||
For the six | For the year | For the year | For the year | For the year | For the year | |||||||||||||||||||
months ended | ended | ended | ended | ended | ended | |||||||||||||||||||
December 31, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||
2007 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 24.52 | $ | 24.28 | $ | 25.56 | $ | 25.17 | $ | 26.62 | $ | 25.54 | ||||||||||||
INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||
Net investment income | 0.59 | 1.12 | 1.00 | 0.94 | 0.96 | 1.00 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 0.54 | 0.25 | (1.23 | ) | 0.55 | (0.96 | ) | 1.42 | ||||||||||||||||
Total from Investment Activities | 1.13 | 1.37 | (0.23 | ) | 1.49 | — | 2.42 | |||||||||||||||||
DIVIDENDS: | ||||||||||||||||||||||||
Net investment income | (0.58 | ) | (1.13 | ) | (1.04 | ) | (1.04 | ) | (0.90 | ) | (1.06 | ) | ||||||||||||
Net realized gains | — | — | (0.01 | ) | (0.06 | ) | (0.44 | ) | (0.28 | ) | ||||||||||||||
Tax return of capital | — | — | * | — | * | — | (0.11 | ) | — | |||||||||||||||
Total Dividends | (0.58 | ) | (1.13 | ) | (1.05 | ) | (1.10 | ) | (1.45 | ) | (1.34 | ) | ||||||||||||
Change in net asset value per share | 0.55 | 0.24 | (1.28 | ) | 0.39 | (1.45 | ) | 1.08 | ||||||||||||||||
Net Asset Value, End of Period | $ | 25.07 | $ | 24.52 | $ | 24.28 | $ | 25.56 | $ | 25.17 | $ | 26.62 | ||||||||||||
Total Return | 4.59 | %(b) | 5.65 | % | (0.90 | )% | 6.02 | % | 0.00 | % | 9.63 | % | ||||||||||||
RATIOS/SUPPLEMENTARY DATA: | ||||||||||||||||||||||||
Net assets at end of period (in 000’s) | $ | 535,216 | $ | 537,345 | $ | 526,359 | $ | 527,208 | $ | 524,025 | $ | 525,734 | ||||||||||||
Ratio of expenses to average net assets | 0.84 | %(c) | 0.84 | % | 0.84 | % | 0.86 | % | 0.86 | % | 0.85 | % | ||||||||||||
Ratio of net investment income to average net assets | 4.58 | %(c) | 4.49 | % | 4.04 | % | 3.68 | % | 3.70 | % | 3.79 | % | ||||||||||||
Ratio of expenses to average net assets (a) | 1.01 | %(c) | 1.01 | % | 1.01 | % | 1.08 | % | 1.11 | % | 0.85 | % | ||||||||||||
Portfolio turnover rate | 108 | % | 258 | % | 263 | % | 206 | % | 242 | % | 226 | % |
* | Less than $0.005. | |
(a) | Ratios excluding waivers and expenses paid indirectly. | |
(b) | Not annualized. | |
(c) | Annualized. |
See accompanying notes to financial statements.
23
financial highlights (continued)
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
Balanced Growth Fund | ||||||||||||||||||||||||
For the six | For the year | For the year | For the year | For the year | For the year | |||||||||||||||||||
months ended | ended | ended | ended | ended | ended | |||||||||||||||||||
December 31, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||
2007 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 90.86 | $ | 81.30 | $ | 78.20 | $ | 74.65 | $ | 67.88 | $ | 67.25 | ||||||||||||
INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||
Net investment income (a) | 0.89 | 1.83 | 1.52 | 1.41 | 1.34 | 1.27 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments (a) | (0.53 | ) | 9.56 | 3.10 | 3.54 | 6.73 | 0.71 | |||||||||||||||||
Total from Investment Activities | 0.36 | 11.39 | 4.62 | 4.95 | 8.07 | 1.98 | ||||||||||||||||||
DIVIDENDS: | ||||||||||||||||||||||||
Net investment income | (0.89 | ) | (1.83 | ) | (1.52 | ) | (1.40 | ) | (1.23 | ) | (1.27 | ) | ||||||||||||
Net realized gains | — | — | — | — | — | (0.08 | ) | |||||||||||||||||
Tax return of capital | — | — | — | * | — | (0.07 | ) | — | ||||||||||||||||
Total Dividends | (0.89 | ) | (1.83 | ) | (1.52 | ) | (1.40 | ) | (1.30 | ) | (1.35 | ) | ||||||||||||
Change in net asset value per share | (0.53 | ) | 9.56 | 3.10 | 3.55 | 6.77 | 0.63 | |||||||||||||||||
Net Asset Value, End of Period | $ | 90.33 | $ | 90.86 | $ | 81.30 | $ | 78.20 | $ | 74.65 | $ | 67.88 | ||||||||||||
Total Return | 0.40 | %(c) | 14.11 | % | 5.93 | % | 6.68 | % | 11.95 | % | 3.10 | % | ||||||||||||
RATIOS/SUPPLEMENTARY DATA: | ||||||||||||||||||||||||
Net assets at end of period (in 000’s) | $ | 340,310 | $ | 353,344 | $ | 312,077 | $ | 305,524 | $ | 302,446 | $ | 272,467 | ||||||||||||
Ratio of expenses to average net assets | 0.12 | %(d) | 0.12 | % | 0.12 | % | 0.14 | % | 0.15 | % | 0.14 | % | ||||||||||||
Ratio of net investment income to average net assets | 1.95 | %(d) | 2.11 | % | 1.85 | % | 1.83 | % | 1.52 | % | 1.96 | % | ||||||||||||
Ratio of expenses to average net assets (b) | 0.36 | %(d) | 0.37 | % | 0.38 | % | 0.22 | % | 0.15 | % | 0.14 | % | ||||||||||||
Portfolio turnover rate | 15 | % | 7 | % | 10 | % | 5 | % | 12 | % | 15 | % |
* | Less than $0.005. | |
(a) | Includes income or gains (losses) from affiliates. | |
(b) | Ratios excluding waivers and expenses paid indirectly. | |
(c) | Not annualized. | |
(d) | Annualized. |
See accompanying notes to financial statements.
24
financial highlights (continued)
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
Balanced Income Fund | ||||||||||||||||||||||||
For the six | For the year | For the year | For the year | For the year | For the year | |||||||||||||||||||
months ended | ended | ended | ended | ended | ended | |||||||||||||||||||
December 31, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||||||||||||||
2007 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 20.40 | $ | 18.99 | $ | 18.90 | $ | 18.24 | $ | 17.52 | $ | 17.10 | ||||||||||||
INVESTMENT ACTIVITIES: | ||||||||||||||||||||||||
Net investment income (a) | 0.30 | 0.59 | 0.52 | 0.48 | 0.53 | 0.52 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments (a) | 0.11 | 1.41 | 0.09 | 0.66 | 0.70 | 0.47 | ||||||||||||||||||
Total from Investment Activities | 0.41 | 2.00 | 0.61 | 1.14 | 1.23 | 0.99 | ||||||||||||||||||
DIVIDENDS: | ||||||||||||||||||||||||
Net investment income | (0.30 | ) | (0.59 | ) | (0.52 | ) | (0.48 | ) | (0.48 | ) | (0.52 | ) | ||||||||||||
Net realized gains | — | — | — | — | — | (0.05 | ) | |||||||||||||||||
Tax return of capital | — | — | * | — | — | (0.03 | ) | — | ||||||||||||||||
Total Dividends | (0.30 | ) | (0.59 | ) | (0.52 | ) | (0.48 | ) | (0.51 | ) | (0.57 | ) | ||||||||||||
Change in net asset value per share | 0.11 | 1.41 | 0.09 | 0.66 | 0.72 | 0.42 | ||||||||||||||||||
Net Asset Value, End of Period | $ | 20.51 | $ | 20.40 | $ | 18.99 | $ | 18.90 | $ | 18.24 | $ | 17.52 | ||||||||||||
Total Return | 2.02 | %(c) | 10.65 | % | 3.26 | % | 6.32 | % | 7.07 | % | 6.00 | % | ||||||||||||
RATIOS/SUPPLEMENTARY DATA: | ||||||||||||||||||||||||
Net assets at end of period (in 000’s) | $ | 114,517 | $ | 121,855 | $ | 122,512 | $ | 124,809 | $ | 124,915 | $ | 122,576 | ||||||||||||
Ratio of expenses to average net assets | 0.15 | %(d) | 0.15 | % | 0.15 | % | 0.17 | % | 0.18 | % | 0.16 | % | ||||||||||||
Ratio of net investment income to average net assets | 2.90 | %(d) | 2.95 | % | 2.71 | % | 2.58 | % | 2.34 | % | 3.08 | % | ||||||||||||
Ratio of expenses to average net assets (b) | 0.40 | %(d) | 0.40 | % | 0.41 | % | 0.25 | % | 0.18 | % | 0.16 | % | ||||||||||||
Portfolio turnover rate | 8 | % | 7 | % | 13 | % | 6 | % | 12 | % | 18 | % |
* | Less than $0.005. | |
(a) | Includes income or gains (losses) from affiliates. | |
(b) | Ratios excluding waivers and expenses paid indirectly. | |
(c) | Not annualized. | |
(d) | Annualized. |
See accompanying notes to financial statements.
25
notes to financial statements
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
1. Organization
New Covenant Funds (the “Trust”), an open-end, diversified management investment company, was organized as a Delaware business trust on September 30, 1998. It currently consists of four investment funds: New Covenant Growth Fund (“Growth Fund”), New Covenant Income Fund (“Income Fund”), New Covenant Balanced Growth Fund (“Balanced Growth”), and New Covenant Balanced Income Fund (“Balanced Income”), (individually, a “Fund,” and collectively, the “Funds”). The Funds commenced operations on July 1, 1999. The Trust’s authorized capital consists of an unlimited number of shares of beneficial interest of $0.001 par value. The Funds’ investment advisor is the NCF Investment Department of New Covenant Trust Company, N.A., a wholly owned subsidiary of the Presbyterian Church (U.S.A.) Foundation (the “Advisor”).
The objectives of the Funds are as follows:
Growth Fund | Long-term capital appreciation. Dividend income, if any, will be incidental. | |
Income Fund | High level of current income with preservation of capital. | |
Balanced Growth Fund | Capital appreciation with less risk than would be present in a portfolio of only common stocks. | |
Balanced Income Fund | Current income and long-term growth of capital. |
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide general indemnification. Each Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against a Fund. However, based on experience, the Funds expect the risk of loss to be remote.
2. Significant Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with GAAP.
Portfolio Valuation: Fund investments are recorded at market value. Portfolio securities listed on a domestic or foreign exchange are valued at the last sale price on the day of valuation or, if there was no sale that day, at the last reported bid price as of the close of trading. Equity securities traded on NASDAQ use the official closing price. Equity securities which are traded in the over-the-counter market only, but which are not included on NASDAQ, are valued at the mean between the last preceding bid and ask prices. Debt securities with a remaining maturity of sixty days or more are valued using a pricing service when such prices are believed to reflect fair market value. Debt securities with a remaining maturity of less than sixty days are valued at amortized cost, which approximates market value. Investment companies are valued at net asset value. All other assets and securities and securities with no readily determinable market values are valued using procedures adopted by the Board of Trustees. Factors used in determining fair value include but are not limited to: type of security or asset, fundamental analytical data relating to the investment in the security, evaluation of the forces that influence the market in which the security is purchased and sold, and information as to any transactions or offers with respect to the security.
Foreign securities traded outside the United States are generally valued as of the time their trading is complete, which is usually different from the close of the New York Stock Exchange (“NYSE”). Occasionally, events affecting the value of such securities may occur between such times and the close of the NYSE that will not be reflected in the security’s market value. If events materially affecting the value of such securities occur during such period, these securities will be valued at their fair value according to procedures adopted by the Board of Trustees. All securities and other assets of a Fund initially expressed in foreign currencies will be converted to U.S. dollar values at the foreign exchange rate every business day, generally at 4:00 PM EST.
Securities Transactions and Investment Income: During the period, security transactions are accounted for no later than one business day following the trade date. For financial reporting purposes, however, security transactions are accounted for on trade date on the last business day of the reporting period. Securities sold are determined on a specific identification basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization of premium or accretion of discount for both financial reporting and tax purposes. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
26
notes to financial statements (continued)
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Options: The Funds may purchase or write options which are traded over-the-counter to hedge fluctuation risks in the prices of certain securities. When a Fund writes a call or put option, an amount equal to the premium received is reflected as a liability. The liability is subsequently “marked-to-market” to reflect the current market value of the option written. The premium paid by the Fund for the purchase of a call or put option is recorded as an investment and subsequently “marked-to-market” to reflect the current market value of the option purchased. The Fund is subject to the risk of an imperfect correlation between movement in the price of the option and the price of the underlying security. Risks may also arise due to illiquid secondary markets for the options. There were no options outstanding at December 31, 2007.
Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Investment valuation and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investments and income and expenses are converted into U.S. dollars based upon exchange rates prevailing on the respective dates of such transactions. That portion of unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates is not separately disclosed.
The Funds do not isolate the portion of gains and losses on investments in securities that is due to changes in the foreign exchange rates from that which is due to changes in the market prices of such securities. The Funds report gains and losses on foreign currency related transactions as realized and unrealized gains and losses for financial reporting purposes, whereas such gains and losses are treated as ordinary income or loss for U.S. federal income tax purposes.
Forward Foreign Currency Contracts: The Funds may enter into forward foreign currency contracts as hedges against either specific transactions or portfolio positions. All commitments are “marked-to-market” daily at the applicable foreign exchange rate and any resulting unrealized gains or losses are recorded currently. A Fund realizes gains and losses at the time foreign forward contracts are extinguished.
Loans of Portfolio Securities: The Growth Fund and the Income Fund may lend their securities pursuant to a securities lending agreement (“Lending Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”). The initial value of the collateral for the security loans made pursuant to the Lending Agreement is required to be at least 102% of the market value of the securities loaned and maintained in an amount equal to at least 102% thereafter. However, due to market fluctuations during the day, the value of securities loaned on a particular day may, during the course of the day, exceed the value of collateral. On each business day, the amount of collateral is adjusted based on the prior day’s market fluctuations and the current day’s lending activity. Cash collateral received is invested by JPMorgan pursuant to the terms of the Lending Agreement. All such investments are made at the risk of the Funds and, as such, the Funds are liable for investment losses. To the extent a loan is secured by non-cash collateral, the borrower is required to pay a loan premium. Non-cash collateral received cannot be sold or repledged. Net income earned on the investment of cash collateral and loan premiums received on non-cash collateral are allocated between JPMorgan and the Funds in accordance with the Lending Agreement. Income allocated to the Funds is included in investment income in the respective Statements of Operations.
At December 31, 2007, the cash collateral received by the Growth Fund and the Income Fund was invested in repurchase agreements and other short-term securities. Information on the investment of cash collateral is shown in the Portfolios of Investments. The Growth Fund and the Income Fund receive payments from borrowers equivalent to the dividends and interest that would have been earned on the securities lent while simultaneously seeking to earn income on the investment cash collateral. One of the risks in lending portfolio securities, as with other extensions of credit, is the possible delay in the recovery of the securities or possible loss of rights in the collateral should the borrower fail financially. There is also the risk that, when lending portfolio securities, the securities may not be available to a Fund on a timely basis and a Fund may, therefore, lose the opportunity to sell the securities at a desirable price. In addition, in the event that a borrower of securities would file for bankruptcy or become insolvent, disposition of the securities may be delayed pending court action. However, loans will be made only to borrowers deemed by the Advisor to be creditworthy under guidelines established by the Board of Trustees and when, in the judgment of the Advisor, the consideration which can be earned currently from such securities loans justifies the attendant risks. Loans are subject to termination by the Funds or the borrower at any time, and are, therefore, not considered to be illiquid investments.
The value of the loaned securities and related collateral at December 31, 2007, was as follows:
Value of | Value of | Value of | ||||||||||
Fund | Securities Loaned | Cash Collateral | Non-Cash Collateral | |||||||||
Growth Fund | $ | 113,158,491 | $ | 117,326,035 | $ | — | ||||||
Income Fund | 8,060,407 | 8,187,464 | — | |||||||||
27
notes to financial statements (continued)
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Repurchase Agreements: The Funds may enter into repurchase agreements which are secured by obligations of the U.S. government with a bank, broker-dealer or other financial institution. Each repurchase agreement is at least 102% collateralized and marked-to-market. However, in the event of default or bankruptcy by the counterparty to the repurchase agreement, realization of the collateral may by subject to certain costs, losses or delays.
Forward Commitments, When-Issued Securities and Delayed-Delivery Transactions: The Growth Fund and the Income Fund may purchase or sell securities on a when-issued or delayed-delivery basis and make contracts to purchase or sell securities for a fixed price at a future date beyond customary settlement time. Debt securities are often issued on that basis. No income will accrue on securities purchased on a when-issued or delayed-delivery basis until the securities are delivered. Securities purchased or sold on a when-issued, delayed-delivery of forward-commitment basis involve a risk of loss if the value of the security to be purchased declines prior to settlement date. Although the Funds would generally purchase securities on a when-issued, delayed-delivery or a forward-commitment basis with the intention of acquiring the securities, the Funds may dispose of such securities prior to settlement if the portfolio manager deems it appropriate to do so.
The Funds may dispose of or renegotiate a when-issued or forward commitment. The Funds will normally realize a capital gain or loss in connection with these transactions. For purposes of determining the Income Fund’s average dollar-weighted maturity, the maturity of when-issued or forward-commitment securities will be calculated from the commitment date.
When the Funds purchase securities on a when-issued, delayed-delivery or forward-commitment basis, the Funds will maintain cash, U.S. government securities or other liquid portfolio securities having a value (determined daily) at least equal to the amount of the Funds’ purchase commitments. In the case of a forward commitment to sell portfolio securities, the custodian will hold the portfolio securities in a segregated account while the commitment is outstanding. These procedures are designed to ensure that the Funds will maintain sufficient assets at all times to cover their obligations under when-issued purchases, forward-commitments and delayed-delivery transactions.
As of December 31, 2007, the Funds had outstanding when-issued or delayed-delivery purchase commitments with corresponding assets segregated, as follows:
Fund | Amount | |||
Income Fund | $ | 9,752,574 | ||
Dividends and Distributions to Shareholders: Dividends from net investment income of all Funds are declared and paid at least annually. For all Funds, all net realized long-term or short-term capital gains, if any, will be declared and distributed at least annually. Interest and dividend payments will normally be distributed as income dividends on a quarterly basis for each of the Funds.
Income dividends and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of income, gains and losses on various investment securities held by a Fund, timing differences in the recognition of income, gains and losses and differing characterizations of distributions made by the Fund.
These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassifications. To the extent that distributions exceed net investment income and net realized gains for tax purposes, they are reported as returns of capital.
Federal Income Taxes: It is each Fund’s intention to continue to qualify annually as a regulated investment company by complying with the appropriate provisions of the Internal Revenue Code of 1986, as amended. Accordingly, no provision for federal income tax has been made.
In addition, effective December 31, 2007, the Funds adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the affirmative evaluation of tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether it is more-likely-than-not (i.e., greater than 50-percent) that each tax position will be sustained upon examination by taxing authority based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for taxes payable (or a reduction of a tax refund receivable), including the recognition of any related interest and penalties as an operating expense. Implementation of FIN 48 included a review of tax positions taken in tax years that remain subject to examination by tax authorities (i.e., the last 4 tax year ends and the interim tax period since then). The adoption of FIN 48 did not impact the Funds’ assets or results of operations.
28
notes to financial statements (continued)
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Recently Issued Accounting Pronouncements: In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement on Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements.” This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current GAAP from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of December 31, 2007, the Funds do not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period.
Allocation of Expenses: Expenses directly attributable to a Fund are charged directly to that Fund, while expenses which are attributable to more than one Fund of the Trust are allocated among the respective Funds based upon relative net assets or some other reasonable method.
Expenses Paid Indirectly: The Growth Fund directs certain portfolio trades to brokers who rebate a portion of their commissions in cash to the Fund. The recaptured commissions are used to pay expenses of the Fund, including, but not limited to, administration fees, custody fees, audit fees and printing fees, as directed by the Trust. Under this arrangement, the Growth Fund had expenses reduced by $52,754, or 0.01%, as a percentage of the average daily net assets of the Fund on an annualized basis for the period ended December 31, 2007.
3. Investment Advisory and Other Agreements and Related Party Transactions
The Trust, on behalf of each Fund, has entered into an Investment Advisory Agreement with the NCF Investment Department of New Covenant Trust Company, N.A. Under the Agreement, the Advisor is responsible for managing the Funds’ investments as well as furnishing the Funds with certain administrative services. The Growth Fund pays the Advisor a monthly fee at the annual rate of 0.99% of the Growth Fund’s average daily net assets and the Income Fund pays the Advisor a monthly fee at the annual rate of 0.75% of the Income Fund’s average daily net assets. The Advisor does not receive advisory fees for the Balanced Growth and Balanced Income Funds (the “Balanced Funds”). The Advisor has entered into Sub-Advisory Agreements with six Sub-Advisors to assist in the selection and management of the Growth Fund’s and Income Fund’s investment securities. It is the responsibility of the Sub-Advisors, under the direction of the Advisor, to make day-to-day investment decisions for these Funds. The Advisor, not the Funds, pays each Sub-Advisor a quarterly fee for their services. The Advisor pays the Sub-Advisor’s fee directly from its own advisory fees. The sub-advisory fees are based on the assets of a Fund for which the Sub-Advisor is responsible for making investment decisions.
The following are the Sub-Advisors for the Growth Fund: Capital Guardian Trust Company, Mazama Capital Management Inc., Santa Barbara Asset Management Inc., Sound Shore Management Inc., and Wellington Management Company, LLP.
Tattersall Advisory Group is the Sub-Advisor for the Income Fund.
The Trust employs a Chief Compliance Officer (“CCO”) who receives a portion of his compensation as approved by the Board of Trustees, as well as reimbursement of out-of-pocket expenses. The CCO is also an employee of the Advisor.
The Trust is a party to Shareholder Services Agreements pursuant to which each Fund is authorized to make payments to certain entities which may include investment advisors, banks, trust companies and other types of organizations (“Authorized Service Providers”) for providing administrative services with respect to shares of the Funds attributable to or held in the name of the Authorized Service Provider for its clients or other parties with whom they have a servicing relationship. Under the terms of the Shareholder Services Agreement, each Fund is authorized to pay monthly an Authorized Service Provider (which may include affiliates of the Funds) a shareholder services fee at the rate of 0.25% on an annual basis of the average daily net assets of the shares of the Fund attributable to or held in the name of the Authorized Service Provider for providing certain administrative services to Fund shareholders with whom the Authorized Service Provider has a servicing relationship. In connection with the Shareholder Services Agreement, the Advisor has agreed to waive the amount of the investment advisory fees payable to it by any Fund to the extent of the amount paid in fees by a Fund to any affiliated Authorized Service Provider under the Shareholder Services Agreement.
The Trust has entered into servicing agreements with Citi Fund Services Ohio, Inc. (“Citi Ohio”), an indirect, wholly owned subsidiary of Citigroup, Inc. Under the servicing agreements, Citi Ohio provides transfer agency, administrative and fund accounting services to the Funds. Under the terms of the Transfer Agency Agreement, Citi Ohio is entitled to account based fees and annual fund level fees, as well as reimbursement of out-of-pocket expenses incurred in providing transfer agency services. Under the Fund Accounting Agreement, Citi Ohio is entitled to a fee computed at an annual rate of 0.03% of the
29
notes to financial statements (continued)
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Trust’s average daily net assets for the first $500,000,000, 0.0225% for $500,000,001 to $5,000,000,000, and 0.01% over $5,000,000,000. Under the Administration Agreement, Citi Ohio is entitled to a fee computed at an annual rate of 0.01% of the Trust’s average daily net assets.
The Trust issues shares of the Funds pursuant to a Distribution Agreement with New Covenant Funds Distributor, Inc. (the “Distributor”), a wholly-owned subsidiary of New Covenant Trust Company, N.A., a subsidiary of the Presbyterian Church (U.S.A.) Foundation, under which the Distributor serves as the principal distributor of the Funds’ shares. The Funds do not pay the Distributor in its capacity as principal distributor.
The Trust has a Custodian Agreement with JPMorgan.
No officer, trustee or employee of the Trust, Citi, or any affiliate thereof, except the CCO, receives any compensation from the Funds for serving as a Trustee or officer of the Trust. The Funds reimburse expenses incurred by the Trustees and Officers in attending Board and Committee meetings.
A summary of each Balanced Fund’s investment in the Growth Fund and Income Fund for the six months ended December 31, 2007, is as follows:
Share Activity | ||||||||||||||||||||||||||||
Balance | Value | |||||||||||||||||||||||||||
Balance | December 31, | Realized | December 31, | |||||||||||||||||||||||||
June 30, 2007 | Purchases | Sales | 2007 | Gain/(Loss) | Income | 2007 | ||||||||||||||||||||||
New Covenant Balanced Growth Fund | ||||||||||||||||||||||||||||
New Covenant Growth Fund | 5,721,291 | 876,660 | 700,109 | 5,897,842 | $ | 13,963,015 | $ | 546,883 | $ | 211,319,689 | ||||||||||||||||||
New Covenant Income Fund | 5,107,767 | 798,082 | 968,256 | 4,937,593 | ($632,728 | ) | $ | 2,961,442 | $ | 123,785,456 | ||||||||||||||||||
New Covenant Balanced Income Fund | ||||||||||||||||||||||||||||
New Covenant Growth Fund | 1,212,992 | 152,986 | 158,928 | 1,207,050 | $ | 3,641,120 | $ | 110,161 | $ | 43,248,591 | ||||||||||||||||||
New Covenant Income Fund | 2,965,666 | 171,066 | 360,455 | 2,776,277 | ($195,795 | ) | $ | 1,649,167 | $ | 69,601,263 |
4. Purchases and Sales of Securities
The cost of purchases and proceeds from sales of securities, excluding short-term U.S. government and other short-term investments, for the six months ended December 31, 2007, were as follows:
Purchases | Sales | |||||||||||||||
(excluding U.S. | (excluding U.S. | Purchases of U.S. | Sales of U.S. | |||||||||||||
Fund | Government) | Government) | Government | Government | ||||||||||||
Growth Fund | $ | 339,031,324 | $ | 371,736,877 | $ | — | $ | — | ||||||||
Income Fund | 200,592,672 | 84,003,387 | 361,435,054 | 539,178,255 | ||||||||||||
Balanced Growth Fund | 51,784,708 | 51,370,772 | — | — | ||||||||||||
Balanced Income Fund | 9,737,108 | 15,234,411 | — | — |
5. Risk Factors
The performance of a Fund’s investments in non-U.S. companies and in companies operating internationally or in foreign countries will depend principally on economic conditions in their product markets, the securities markets where their securities are traded, and currency exchange rates. These risks are present because of uncertainty in future exchange rates back into U.S. dollars and possible political instability, which could affect foreign financial markets and local economies. There are also risks related to social and economic developments abroad, as well as risks resulting from the differences between the regulations to which U.S. and foreign issuers and markets are subject.
The Funds will not invest more than 15% of the value of their net assets in securities that are illiquid because of restrictions on transferability or other reasons. Repurchase agreements with deemed maturities in excess of seven days and securities that are not registered under the Securities Act of 1933, as amended, but that may be purchased by institutional buyers pursuant to Rule 144A are subject to this 15% limit (unless such securities are variable-amount master-demand notes with maturities of nine months or less or unless the Board determines that a liquid trading market exists). The Funds may purchase securities which are not registered under the Securities Act but which can be sold to “qualified institutional buyers” in accordance with Rule 144A under the Securities Act. In some cases, such securities are classified as “illiquid securities”; however, any such security will not be considered illiquid so long as it is determined by the Advisor, under guidelines approved by the Board of Trustees, that an adequate trading market exists for that security. This investment practice could have the effect of increasing the level of illiquidity in a Fund during any period that qualified institutional buyers become uninterested in purchasing these restricted securities.
30
notes to financial statements (continued)
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
The Income Fund may invest a limited amount of assets in debt securities which are rated below investment grade (hereinafter referred to as “lower-rated securities”) or which are unrated but deemed equivalent to those rated below investment grade by the portfolio managers. The lower the ratings of such debt securities, the greater their risks. These debt instruments generally offer a higher current yield than that available from higher-grade issues, and typically involve greater risks. The yields on lower-rated securities will fluctuate over time. In general, prices of all bonds rise when interest rates fall and fall when interest rates rise. Lower-rated securities are subject to adverse changes in general economic conditions and to changes in the financial condition of their issuers. During periods of economic downturn or rising interest rates, issuers of these instruments may experience financial stress that could adversely affect their ability to make payments of principal and interest, and increase the possibility of default.
The Balanced Funds invest their assets primarily in the Growth Fund and the Income Fund. By investing primarily in shares of these Funds, shareholders of the Balanced Funds indirectly pay a portion of the operating expenses, management expenses and brokerage costs of the underlying Funds as well as their own operating expenses. Thus, shareholders of the Balanced Funds may indirectly pay slightly higher total operating expenses and other costs than they would pay by directly owning shares of the Growth Fund and Income Fund. Total fees and expenses to be borne by investors in either Balanced Fund will depend on the portion of the Funds’ assets invested in the Growth Fund and in the Income Fund. A change in the asset allocation of either Balanced Fund could increase or reduce the fees and expenses actually borne by investors in that Fund. The Balanced Funds are also subject to rebalancing risk. Rebalancing activities, while undertaken to maintain a Fund’s investment risk-to-reward ratio, may cause the Fund to underperform other funds with similar investment objectives. For the Balanced Growth Fund, it is possible after rebalancing from equities into a greater percentage of fixed-income securities, that equities will outperform fixed-income investments. For the Balanced Income Fund, it is possible that after rebalancing from fixed-income securities into a greater percentage of equity securities, that fixed-income securities will outperform equity investments. The performance of the Balanced Growth Fund and the Balanced Income Fund depends on the performance of the underlying Funds in which they invest.
6. Federal Income Taxes
As of June 30, 2007, the Funds had available for federal tax purposes unused capital loss carryforwards expiring as follows:
2012 | 2013 | 2014 | 2015 | Total | ||||||||||||||||
Income Fund | $ | — | $ | — | $ | 1,591,357 | $ | 5,673,243 | $ | 7,264,600 | ||||||||||
Balanced Growth Fund | 768,453 | 6,966,124 | 2,286,304 | — | 10,020,881 | |||||||||||||||
Balanced Income Fund | 2,289,626 | 792,155 | — | — | 3,081,781 |
Under tax law, certain capital and foreign currency losses realized after October 31, and within the taxable year may be deferred and treated as occurring on the first business day of the following fiscal year. For the tax year ended June 30, 2007, the Funds deferred to July 1, 2007, post-October capital losses of:
Post-October Losses | ||||
Growth Fund | $ | 12,957 | ||
Income Fund | 68,865 |
At December 31, 2007, the cost, gross unrealized appreciation and gross unrealized depreciation on securities, for federal income tax purposes, were as follows:
Net Unrealized | ||||||||||||||||
Tax Unrealized | Tax Unrealized | Appreciation | ||||||||||||||
Tax Cost | Appreciation | (Depreciation) | (Depreciation) | |||||||||||||
Growth Fund | $ | 952,109,510 | $ | 173,838,553 | ($41,406,140 | ) | $ | 132,432,413 | ||||||||
Income Fund | 543,107,106 | 6,794,848 | (3,322,281 | ) | 3,472,567 | |||||||||||
Balanced Growth Fund | 302,549,435 | 36,134,171 | — | 36,134,171 | ||||||||||||
Balanced Income Fund | 100,934,895 | 13,606,694 | — | 13,606,694 |
31
supplemental data (unaudited)
NEW COVENANT FUNDS
December 31, 2007
(Unaudited)
December 31, 2007
(Unaudited)
Proxy Voting Policy and Proxy Voting Record
A description of the policies and procedures that the Trust uses to determine how to vote proxies related to portfolio securities and information regarding how the Funds voted proxies related to portfolio securities held during the most recent 12-month period ended June 30, are available (i) without charge, upon request, by calling 800-858-6127; (ii) on the Funds’ website at www. NewCovenantFunds.com; and (iii) on the Securities and Exchange Commission’s website at http://www.sec.gov.
Quarterly Holdings
Portfolio holdings statements for the Funds for the quarters ended March 31 and September 30, are available, without charge, on the Securities and Exchange Commission’s website at http://www.sec.gov.
Additional Fund Information — Hypothetical Cost of Investing
As a shareholder of the New Covenant Funds, you incur ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the New Covenant Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2007 through December 31, 2007.
Actual Expenses
The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Beginning | Ending | Expense Paid | Expense Ratio | |||||||||||||
Account Value | Account Value | During Period* | During Period** | |||||||||||||
7/1/07 | 12/31/07 | 7/1/07 — 12/31/07 | 7/1/07 — 12/31/07 | |||||||||||||
Growth Fund | $ | 1,000.00 | $ | 975.20 | $ | 5.36 | 1.08 | % | ||||||||
Income Fund | 1,000.00 | 1,045.90 | 4.32 | 0.84 | % | |||||||||||
Balanced Growth Fund | 1,000.00 | 1,004.00 | 0.60 | 0.12 | % | |||||||||||
Balanced Income Fund | 1,000.00 | 1,020.20 | 0.76 | 0.15 | % |
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and hypothetical expenses based on each of the New Covenant Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expense Paid | Expense Ratio | |||||||||||||
Account Value | Account Value | During Period* | During Period** | |||||||||||||
7/1/07 | 12/31/07 | 7/1/07 — 12/31/07 | 7/1/07 — 12/31/07 | |||||||||||||
Growth Fund | $ | 1,000.00 | $ | 1,019.71 | $ | 5.48 | 1.08 | % | ||||||||
Income Fund | 1,000.00 | 1,020.91 | 4.27 | 0.84 | % | |||||||||||
Balanced Growth Fund | 1,000.00 | 1,024.53 | 0.61 | 0.12 | % | |||||||||||
Balanced Income Fund | 1,000.00 | 1,024.38 | 0.76 | 0.15 | % |
* | Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. | |
** | Annualized. |
32
supplemental data (unaudited)
NEW COVENANT FUNDS
December 31, 2007
December 31, 2007
Approval of the Sub-Advisory Agreement with Santa Barbara Asset Management Inc. (“Santa Barbara”)
A new Sub-Advisory Agreement (the “Agreement”) between the Advisor and Santa Barbara with respect to the New Covenant Growth Fund (the “Fund”) was approved by the Board of Trustees on November 19, 2007 due to a change in control of Santa Barbara and the automatic termination of the existing sub-advisory agreement with Santa Barbara in accordance with the applicable provisions of Investment Company Act of 1940, as amended (the “1940 Act”). Nuveen Investments, Inc. (“Nuveen”), which acquired Santa Barbara in 2005, was itself acquired in November 2007 by a group of investors led by a private equity firm. The Board took action with respect to the approval of the Agreement as a result of having been informed of the acquisition of Nuveen and the resulting termination of the existing sub-advisory agreement between the Advisor and Santa Barbara. Relevant provisions of the 1940 Act specifically provide that it is the duty of the Board to request and evaluate such information as the Board determines is necessary to allow the Board to properly consider the approval of the Agreement, and it is the duty of Santa Barbara to furnish the Trustees with such information as is responsive to their request. Accordingly, counsel for the Fund requested information from Santa Barbara concerning the proposed transaction, and Santa Barbara provided information responsive to that request. In determining whether to approve the Agreement, the Board of Trustees relied on materials Santa Barbara provided to the Board. This included materials regarding the investor group that acquired Nuveen, representations that there would be no changes to the Santa Barbara personnel responsible for managing a portion of the Fund, data on any anticipated effects on Santa Barbara’s ability to provide sub-advisory services to the Fund, efforts to retain key personnel and benefits of the transaction to the Fund. The Board reviewed the investment performance of the portion of the Fund managed by Santa Barbara and noted that the fee to be paid under the Agreement was at the same rate as under the former sub-advisory agreement. As part of its deliberations, the Board also considered and relied upon the information about the Fund and Santa Barbara that had been provided in connection with their regular Board meetings at which they engage in the ongoing oversight of the Fund and its operations.
Among the factors considered by the Board was the similarity of the Agreement to the agreement approved by the Board for Santa Barbara that terminated by operation of the 1940 Act. The Board also considered the information regarding Santa Barbara that had been reviewed by the Board at the meeting held on May 21, 2007, and reviewed the conclusions reached with respect to the continuation of the sub-advisory agreement with Santa Barbara. Furthermore, the Board considered the representation regarding the continuity of the portfolio management team at Santa Barbara following the change in control of Nuveen.
In reaching their conclusion with respect to the approval of the Agreement, the Trustees did not identify any one single factor as being controlling; rather, the Trustees took note of a combination of factors that influenced their decision-making process. The Board did, however, identify the performance of Santa Barbara as a portfolio manager for the New Covenant Growth Fund. The Board further considered the additional resources that would be brought to bear as a result of the transaction.
Based upon their review and consideration of these factors and other matters deemed relevant by the Board in reaching an informed business judgment, the Board of Trustees, including a majority of the Independent Trustees, concluded that the terms of the Agreement are fair and reasonable in light of the services to be provided and the Board therefore voted to approve the Agreement for a one-year period. During this process the Independent Trustees were counseled by their own independent legal counsel (as such term is defined in the rules under the 1940 Act).
33
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This report is authorized for distribution only if preceded or accompanied by a current prospectus. Shares of New Covenant Funds are distributed by New Covenant Funds Distributor, Inc., 200 East Twelfth Street, Jeffersonville, IN 47130 |
200 E. Twelfth Street Jeffersonville, IN 47130 | FIRST STD U.S. POSTAGE PAID ADDISION, IL PERMIT NO. 2000 |
Item 2. | Code of Ethics. |
Not applicable.
Item 3. | Audit Committee Financial Expert. |
Not applicable.
Item 4. | Principal Accountant Fees and Services. |
Not applicable.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
Item 6. | Schedule of Investments. |
Not applicable.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders. |
Not applicable.
Item 11. | Controls and Procedures. |
(a)The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b)There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. | Exhibits. |
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) New Covenant Funds | ||
By (Signature and Title)* | /s/ Martin R. Dean | |
Martin R. Dean, Treasurer | ||
Date March 10, 2008 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Robert E. Leech | |
Robert E. Leech, President | ||
Date March 10, 2008 | ||
By (Signature and Title)* | /s/ Martin R. Dean | |
Martin R. Dean, Treasurer | ||
Date March 10, 2008 |
* Print the name and title of each signing officer under his or her signature.