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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09025
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New Covenant Funds
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(Exact name of registrant as specified in charter)
200 East Twelfth Street, Jeffersonville, IN 47130
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(Address of principal executive offices) (Zip code)
BISYS Fund Services, 3435 Stelzer Road, Columbus, OH 43219
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(Name and address of agent for service)
Registrant's telephone number, including area code: 614-470-8000
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Date of fiscal year end: June 30, 2005
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Date of reporting period: December 31, 2004
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Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL REPORT
New Covenant Growth Fund
New Covenant Income Fund
New Covenant Balanced Growth Fund
New Covenant Balanced Income Fund
December 31, 2004
[NEW COVENANT FUNDS, SEMI-ANNUAL REPORT IMAGE]
TABLE OF CONTENTS
Shareholder Letter ....................... 2
Portfolios of Investments ................ 4
Statements of Assets and Liabilities...... 16
Statements of Operations ................. 17
Statements of Changes in Net Assets....... 18
Financial Highlights ..................... 20
Notes to Financial Statements ............ 24
Trustees and Officers .................... 31
TO OUR SHAREHOLDERS
NEW COVENANT FUNDS
DECEMBER 31, 2004
Dear Shareholders:
The six months through December 31, 2004 saw the economy shake off early
uncertainty, resulting in a late stock-market surge. Bonds posted
better-than expected returns during the period.
The economy seemed shaky early in the period. Some observers feared that
rising energy prices and halting employment growth would undermine
consumer spending. Meanwhile, high federal budget and trade deficits led
to a weaker dollar. That trend benefited export-oriented sectors of the
economy, which saw their products become more competitive overseas, but
also caused some economists to worry about the potential for a sizable and
potentially destabilizing drop in the dollar.
The Federal Reserve increased short-term interest rates four times during
the six-month period, for a total increase of one percentage point. The
Fed sought to curb inflation, which began to rise during 2004. The economy
appeared to gain strength late in the period, as the rate of job growth
climbed more than expected and energy prices receded.
Stocks stagnated early on as investors tried to gauge the effects of
various conflicting factors, including rising short-term rates, higher
energy prices, strong corporate profits, increasing inflation, political
uncertainty and conflict in the Middle East. Several positive factors
occurred late in the period. The resolution of the presidential election
removed political uncertainty, while the economy appeared to gain strength
and energy prices declined. The market staged a powerful rally, and
produced most of its 2004 gain during the fourth calendar quarter.
Value stocks dramatically outperformed growth stocks for the period as a
whole, across all market capitalizations. Small- and mid-cap stocks beat
out larger shares, continuing a five-year trend of superior performance by
smaller stocks. Stocks in the energy, industrials and basic materials
sectors performed well. Technology stocks generally lagged the market,
despite outstanding performance by certain technology shares. The weakness
of the dollar helped international stocks outperform the domestic stock
market.
Yields on short-term bonds increased somewhat during this period, in line
with the Fed's rate increases. Longer-term Treasuries outperformed most
observers' expectations, as the yield on the 10-year Treasury bond
declined slightly. Corporate bonds and mortgage-backed securities
outperformed government issues, which offered relatively low yields.
The New Covenant Funds hired new managers to run the Portfolios' growth
allocations effective January 1, 2005. Santa Barbara Asset Management will
assume management of the Funds' large-cap growth segment. Santa Barbara
employs extensive fundamental and quantitative analysis to identify shares
of firms that offer sustainable, above-average earnings growth over a long
period of time. Mazama Capital Management, which will assume management of
the Funds' small- and mid-cap growth allocation, uses bottom-up
fundamentals-based stock analysis combined with many company visits to
uncover stocks with the potential for significant long-term appreciation.
THE NEW COVENANT GROWTH FUND
The New Covenant Growth Fund gained 6.99% during the six-month period
ended December 31, 2004. That compared to a 7.18% return for the Fund's
benchmark, the Standard & Poor's 500 Index.(1)
The Fund built a 65% position in its core style-neutral portfolio during
the six-month period ending December 31, 2004, and then returned to a
neutral 61% position at the end of the period. The remaining assets also
were allocated neutrally as of the end of the period, with 13% allocated
to each satellite style: growth, value and international.(2)
The Fund's allocations to international and value stocks boosted
performance relative to the benchmark.The core portfolio, which is managed
by Wellington Capital Management, also helped returns against the
benchmark. The Fund's growth allocation weighed on relative returns,
however, as growth stocks lagged the market.(2)
THE NEW COVENANT INCOME FUND
The New Covenant Income Fund gained 3.77% during the six-month period
through December 31, 2004, slightly lagging the 4.34% return of its
benchmark, the Lehman Brothers Aggregate Bond Index.(3)
The Income Fund emphasized mortgage-backed issues and high-quality
corporate bonds. That strategy helped returns against the benchmark.
Gradually rising interest-rate levels boosted mortgage-backed issues while
corporate bonds benefited from a strengthening economy, strong corporate
profits and balance sheets, and a sizable yield advantage over Treasuries.
The Fund maintained a high average credit rating of between AA+ and
AAA.(2)
The Fund's duration during the period was shorter than the benchmark to
protect from a potential rise in interest rates. Rates flattened during
the second half of the period, so the move to a shorter duration proved to
be somewhat premature, and weighed slightly on relative returns.
2
TO OUR SHAREHOLDERS
NEW COVENANT FUNDS
DECEMBER 31, 2004
THE NEW COVENANT BALANCED GROWTH FUND
The New Covenant Balanced Growth Fund gained 5.67% during the six-month
period ended December 31, 2004. That compared to a 6.04% return for its
benchmark, a composite that is comprised of a 60% weighting in the S&P 500
Index and a 40% weighting in the Lehman Brothers Aggregate Bond Index.
This Fund does not stray far from its neutral position of 60% of assets in
stocks and 40% in bonds, because we believe diversification historically
has been the best way to obtain solid investment returns while limiting
volatility.The Fund began the period with approximately 61% of its assets
in stocks, due to our belief that the outlook for stocks was more
favorable than it was for bonds.That stake grew to 63% as stocks
appreciated more rapidly than fixed-income securities. The Fund's emphasis
on the stock market boosted relative returns. The Fund's allocation to
growth stocks lagged the broad market, however, dragging on returns
against the benchmark.(2)
THE NEW COVENANT BALANCED INCOME FUND
The New Covenant Balanced Income Fund gained 4.89% during the six-month
period ended December 31, 2004. That compared to a 5.28% 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 Aggregate Bond Index.
Like the Balanced Growth Fund, this Fund does not stray far from its
neutral asset allocation. The Balanced Income Fund began the period with
roughly 36% of its assets in stocks, slightly higher than the
benchmark. The overweight stock position grew throughout the period as
stocks outperformed bonds, and ended the period at 39% of the portfolio.
The Fund's overweight position in the stock market boosted returns against
the benchmark. Its stake in growth stocks dragged on relative returns, as
such shares lagged the overall market.(2)
/s/ Dennis J. Murphy
---------------------
Dennis J. Murphy
Executive Vice President
and Chief Investment Officer
The New Covenant Funds Investment Department of
New Covenant Trust Company, N.A.(4)
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 MORE CURRENT PERFORMANCE
INFORMATION, PLEASE CALL 877-835-4531 OR VISIT OUR WEBSITE AT
WWW.NEWCOVENANTFUNDS.COM.
(1) The Standard & Poor's Composite Index of 500 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) Portfolio composition is subject to change.
(3) The Lehman Brothers Aggregate Bond 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.
(4) A subsidiary of the Presbyterian Foundation.
3
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS (97.7%):
Advertising (0.8%):
267,500 Interpublic Group of Cos., Inc. (b) ................ $ 3,584,500
39,500 Omnicom Group, Inc.................................. 3,330,640
-----------
6,915,140
-----------
AEROSPACE (0.2%):
45,700 Rockwell Collins, Inc............................... 1,802,408
-----------
AUTOMOTIVE (1.4%):
5,500 Bayerische Motoren Werke AG ........................ 247,825
2,000 Bridgestone Corp. (L) .............................. 39,817
19,000 DaimlerChrysler AG ................................. 910,357
111,500 Dana Corp........................................... 1,932,295
148,000 Delphi Automotive Systems (L) ...................... 1,334,960
30,800 Genuine Parts Co.................................... 1,357,048
85,500 Honda Motor Co. Ltd................................. 2,228,130
111,000 Mitsubishi Motors Corp. (b) (L) .................... 126,740
86,600 Nissan Motors (L) .................................. 941,470
4,500 Renault SA (L) ..................................... 376,478
5,700 Reynolds & Reynolds Co.............................. 151,107
5,200 Scania AB - B Shares ............................... 205,796
37,000 Suzuki Motor Corp. (L) ............................. 675,944
20,400 Tenneco Automotive, Inc. (b) ....................... 351,696
16,100 Toyota Motor Co..................................... 655,187
18,000 TRW Automotive Holdings Corp. (b) .................. 372,600
4,300 Volkswagen AG ...................................... 194,923
-----------
12,102,373
-----------
BANKING (7.3%):
59,083 ABN AMRO Holdings NV ............................... 1,565,214
21,020 Australia and New Zeland Banking Group Ltd.......... 339,273
1,300 BancFirst .......................................... 102,674
84,000 Banco Bilbao Vizcaya (L) ........................... 1,490,010
21,700 Banco Santander Central Hispano SA (L) ............. 269,296
268,180 Bank of America Corp................................ 12,601,777
23,900 Banque Nationale de Paris (L) ...................... 1,731,507
16,500 Barclays Plc........................................ 185,635
17,300 Bayerische Vereins Ag (b) .......................... 393,406
28,720 Cathay Bancorp, Inc................................. 1,077,000
7,800 Central Pacific Financial Corp. (L) ................ 282,126
99,700 Comerica, Inc....................................... 6,083,693
500 Community Bancorp (b) .............................. 15,300
19,248 Credit Suisse Group ................................ 809,124
65,200 Credito Italiano ................................... 374,876
4,300 Deutsche Bank AG (L) ............................... 381,664
33,000 DNB NOR ASA (L) .................................... 325,551
3,300 First Citizens Bancshares, Inc., Class A ........... 489,225
7,600 Flagstar Bancorp, Inc. (L) ......................... 171,760
200 ForeningsSparbanken AB ............................. 4,981
48,200 Golden West Financial Corp ......................... 2,960,444
13,700 Hang Seng Bank ..................................... 190,359
40,300 Hibernia Corp....................................... 1,189,253
18,370 Holderbank Financiere Glarus ....................... 1,106,627
57,700 HSBC Holdings Plc .................................. 973,742
3,800 Hudson United Bancorp .............................. 149,644
58,800 Huntington Bancshares, Inc.......................... 1,457,064
3,900 Irwin Financial Corp. (L) .......................... 110,721
110,506 J.R Morgan Chase & Co .............................. 4,310,838
75,800 KeyCorp............................................. 2,569,620
20,100 Lloyds TSB Group Plc ................................ 182,531
26,700 MBT Financial Corp.(L) ............................. 621,309
71 Mitsubishi Tokyo Financial Group, Inc............... 720,601
32 Mizuho Financial Group, Inc......................... 161,140
6,424 National Australia Bank Ltd......................... 145,131
4,500 National Bank of Canada (L) ........................ 186,137
109,700 National City Corp.................................. 4,119,235
11,200 R & G Financial Corp................................ 435,456
43,600 Royal Bank of Scotland Group Plc (R) ............... 1,466,559
3,600 Societe Generale (L) ............................... 364,306
31,200 Standard Chartered Plc ............................. 580,141
18,000 State Street Corp................................... 884,160
142 Sumitomo Mitsui Financial Group (L) ................ 1,032,400
27,400 SunTrust Banks, Inc................................. 2,024,312
43,610 Texas Capital Bane (b) ............................. 942,848
16,200 TriCo Bancshares ................................... 379,080
120,000 U.S. Bancorp ....................................... 3,758,400
254 UFJ Holdings, Inc................................... 1,539,319
12,700 Wells Fargo & Co.................................... 789,305
3,231 Wesbanco, Inc....................................... 103,295
2,980 Westamerica Bancorp ................................ 173,764
1,800 WFS Financial (b) .................................. 91,404
-----------
64,413,237
-----------
BROADCASTING AND MEDIA (3.5%):
23,500 Clear Channel Communications, Inc................... 787,015
90,972 Comcast Corp. New CLA (b) .......................... 3,027,548
8,300 Comcast Corp. Spl A (b) ............................ 272,572
17,300 Cumulus Media, Inc. (b) (L) ........................ 260,884
172,000 DirecTV Group, Inc. (b) ............................ 2,879,280
38,200 Fox Entertainment Group, Inc. (b) .................. 1,194,132
47,300 Gannett Co., Inc.................................... 3,864,410
22,300 Insight Communications Company, Inc. (b) ........... 206,721
5,100 Journal Communications, Inc......................... 92,157
23,400 Knology, Inc. (b) (L) .............................. 91,494
13,900 L-3 Communications Holdings, Inc.................... 1,018,036
377,000 Liberty Media Corp. (b) ............................ 4,139,460
574,150 Time Warner, Inc. (b) .............................. 11,161,476
57,970 Viacom, Inc. - Cl. B ............................... 2,109,528
6,450 World Wrestling Entertainment, Inc.................. 78,239
-----------
31,182,952
-----------
CHEMICALS (0.9%):
25,500 Air Products & Chemical, Inc........................ 1,478,235
3,700 Albemarle Corp...................................... 143,227
12,500 Cabot Corp.......................................... 483,500
4,900 Cad Potash Corporation Of Saskatchewan ............. 407,941
45,940 Dow Chemical Co..................................... 2,274,490
22,800 Du Pont (E.I.) De Nemours .......................... 1,118,340
9,000 Ferro Corp.......................................... 208,710
4,800 Nitto Denko Corp.................................... 263,258
2,700 Norsk Hydro ASA .................................... 212,642
7,800 Schulman, Inc. (L) ................................. 166,998
60,000 Sumitomo Chemical Co................................ 293,940
2,506 Syngenta AG ........................................ 266,225
6,500 Takeda Chemical Industries ......................... 327,315
-----------
7,644,821
-----------
COMMERCIAL SERVICES (2.1%):
11,649 Aaron Rents, Inc.................................... 291,225
128,600 Accenture Ltd. (b) ................................. 3,472,199
35,570 Alliance Data Systems Corp. (b) .................... 1,688,864
21,680 Avocent Corp. (b) .................................. 878,474
10,600 Checkpoint Systems, Inc. (b) ....................... 191,330
See accompanying notes to financial statements.
4
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
13,100 Convergys Corp. (b) ................................ $ 196,369
22,000 Corillian Corp. (b) ................................ 108,240
11,990 CSG Systems International, Inc. (b) ................ 244,970
8,100 Cyberoptics Corp. (b) (L) .......................... 120,447
4,600 Geo Group, Inc. (b) ................................ 122,268
12,100 Gevity HR, Inc. (L) ................................ 248,776
5,500 Global Imaging Systems, Inc. (b) (L) ............... 217,250
23,250 Global Payments, Inc. .............................. 1,361,055
48,700 Ikon Office Solutions, Inc. ........................ 562,972
16,700 John H. Harland Co. (L) ............................ 602,870
46,010 Korn/Ferry International (b) ....................... 954,708
9,700 PDI, Inc. (b) ...................................... 216,116
64,500 Pitney Bowes, Inc. ................................. 2,985,060
37,800 TNS, Inc. (b) ...................................... 825,930
23,300 W.W. Grainger, Inc. ................................ 1,552,246
5,600 Watson Wyatt & Co. ................................. 150,920
70,900 Xerox Corp. (b) .................................... 1,206,009
-----------
18,198,298
-----------
COMPUTER SERVICES AND SOFTWARE (7.9%):
48,915 Activision, Inc. (b) ............................... 987,105
34,420 Adobe Systems, Inc. ................................ 2,159,511
4,500 ANSYS, Inc. (b) .................................... 144,270
23,270 Automatic Data Processing, Inc. .................... 1,032,025
16,180 Avid Technology, Inc. (b) .......................... 999,115
537,380 Cisco Systems, Inc. (b) ............................ 10,371,434
2,700 Dassault Systemes SA (L) ........................... 136,156
240,950 Dell, Inc. (b) ..................................... 10,153,633
24,400 DST Systems, Inc. (b) .............................. 1,271,728
16,300 Electronic Arts, Inc. (b) .......................... 1,005,384
8,600 Epicor Software Corp. (b) (L) ...................... 121,174
87,600 Gartner Group, Inc. (b) (L) ........................ 1,091,496
118,050 Gateway, Inc. (b) .................................. 709,481
143,500 Hewlett Packard Co. ................................ 3,009,195
10,000 Hyperion Solutions Corp. (b) ....................... 466,200
600 Infosys Technologies Ltd. (L) ...................... 41,586
122,040 International Business Machines Corp. .............. 12,030,703
10,200 Intervideo, Inc. (b) ............................... 134,946
8,000 Intervoice, Inc. (b) (L) ........................... 106,800
8,400 Komag, Inc. (b) .................................... 157,752
523,800 Microsoft Corp ..................................... 13,990,697
5,100 Microstrategy, Inc. (b) ............................ 307,275
30,640 Niku Corp. (b) ..................................... 617,702
416,700 Oracle Corp. (b) ................................... 5,717,124
8,000 Progress Software Corp. (b) ........................ 186,800
3,800 Renanissance Learning, Inc. (L) .................... 70,528
48,450 RSA Security, Inc. (b) ............................. 971,907
1,700 SAP AG(L) .......................................... 303,167
4,875 SS&C Technologies, Inc. (L) ........................ 100,669
7,400 Sybase, Inc. (b) ................................... 147,630
6,200 Transaction Systems Architects, Inc. (b) ........... 123,070
38,700 United Online, Inc. (b) (L) ........................ 446,211
67,690 Wind River Systems, Inc. (b) ....................... 917,200
-----------
70,029,674
-----------
CONSTRUCTION AND BUILDING MATERIALS (2.0%):
32,500 Bouygues SA (L) .................................... 1,501,971
7,100 Brookfield Homes Corp. ............................. 240,690
34,100 Centex Corp. ....................................... 2,031,678
18,581 CRH Plc ............................................ 497,162
80,250 D. R. Horton, Inc. ................................. 3,234,877
37,920 Dycom (b) .......................................... 1,157,318
4,600 Eagle Materials (L) ................................ 397,210
17,200 Hovnanian Enterprises - A (b) (L) .................. 851,744
35,380 Hughes Supply, Inc. ................................ 1,144,543
49,500 Lennar Corp. Class A ............................... 2,805,660
2,400 Quanex Corp. ....................................... 164,568
50,734 Rinker Group Ltd. .................................. 423,555
5,400 Ryland Group, Inc. ................................. 310,716
41,000 Sekisui House Ltd. (L) ............................. 477,740
25,700 Standard-Pacific Corp. (L) ......................... 1,648,398
19,700 The Stanley Works .................................. 965,103
3,500 USG Corp. (b) (L) .................................. 140,945
-----------
17,993,878
-----------
CONSUMER PRODUCTS (4.4%):
37,100 Amcor Ltd. ......................................... 213,758
3,900 Bandag, Inc. (L) ................................... 194,259
15,000 Bps Associated British Foods Plc ................... 224,772
23,540 Estee Lauder Co., Inc. (The) - Class A ............. 1,077,426
34,860 Fossil, Inc. (b) ................................... 893,810
2,050 Genlyte Group (b) .................................. 175,644
159,380 Gillette Co. ....................................... 7,137,036
12,200 HNI Corp. .......................................... 525,210
22,600 Industria de Diseno Textil, SA (L) ................. 666,603
4,800 K-Swiss, Inc. (L) .................................. 139,776
6,400 Kenneth Cole Productions, Inc. (L) ................. 197,504
82,100 Kimberly-Clark Corp. ............................... 5,403,001
5,700 L'OREAL SA (L) ..................................... 432,710
258,000 Li & Fung Ltd. ..................................... 434,830
2,900 Michelin(L) ........................................ 186,015
6,200 Multimedia Games, Inc. (b) (L) ..................... 97,712
33,880 Nike, Inc. Class B ................................. 3,072,577
19,000 Nikon Corp. (L) .................................... 234,742
2,700 Nintendo Co. ....................................... 339,114
7,500 Nu Skin Enterprises, Inc. .......................... 190,350
24,400 Polaris Industries, Inc. (L) ....................... 1,659,688
21,300 Polo Ralph Lauren Corp ............................. 907,380
86,600 Procter & Gamble Co. ............................... 10,277,928
6,000 Reckitt & Colman ................................... 181,316
37,880 Sherwin-Williams Co. ............................... 1,690,584
2,300 Stanley Furniture Co., Inc. ........................ 103,385
16,400 Stewart Enterprises, Inc., Class A (b) ............. 114,636
14,600 Timberland Co., Class A (b) ........................ 914,982
11,600 Toro Co. ........................................... 943,660
5,200 Uni-Charm .......................................... 249,166
3,500 Unilever Plc (L) ................................... 234,681
10,700 Wolseley Plc ....................................... 199,986
-----------
39,314,241
-----------
DIVERSIFIED OPERATIONS (4.9%):
77,880 3M Co. ............................................. 6,391,612
6,500 Acuity Brands, Inc. ................................ 206,700
44,480 Brambles Industries Ltd. (L) ....................... 242,332
133,700 Cendant Corp. ...................................... 3,125,906
16,100 Crane Co. .......................................... 464,324
130,828 First Data Corp. ................................... 5,565,423
362,000 General Electric Co. ............................... 13,213,000
15,610 Harsco Corp. ....................................... 870,101
68,050 Jacuzzi Brands, Inc. (b) ........................... 592,035
37,900 Mitsubishi Corp. (L) ............................... 489,700
23,000 Mitsui & Co. (L) ................................... 206,275
27,800 Rentokil Initial Plc ............................... 78,859
28,600 Smiths Industries Plc .............................. 451,354
See accompanying notes to financial statements.
5
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
79,000 SPX Corp. (L) ...................................... $ 3,164,740
20,900 Swire Pacific Ltd. ................................. 174,778
101,500 Thermo Electron Corp. (b) .......................... 3,064,285
139,790 Tyco International Ltd. ............................ 4,996,095
4,900 Wesfarmers Ltd. .................................... 152,876
-----------
43,450,395
-----------
ELECTRONICS (3.2%):
3,100 Advantest Corp. (L) ................................ 265,922
22,900 Ameren Corp. ....................................... 1,148,206
90,900 Amphenol Corp.- Class A (b) ........................ 3,339,666
44,000 Applied Materials, Inc. (b) ........................ 752,400
70,500 Aquila, Inc. (b) (L) ............................... 260,145
12,600 ASML Holding N.V. (b) .............................. 202,265
3,800 Bei Technologies, Inc. ............................. 117,344
3,400 Bel Fuse, Inc., Class B (L) ........................ 114,886
26,700 Benchmark Electronics, Inc. (b) .................... 910,470
11,000 Brightpoint, Inc. (b) (L) .......................... 214,940
7,100 Cabot Microelectronics Corp. (b) (L) ............... 284,355
12,100 Cree Research, Inc. (b) (L) ........................ 484,968
26,330 Cymer, Inc. (b) .................................... 777,788
14,350 Diodes, Inc. (b) (L) ............................... 324,741
75,300 Emerson Electric Co. ............................... 5,278,529
26,300 Fairchild Semiconductor International, Inc. (b) .... 427,638
7,800 Fanuc Co. Ltd. ..................................... 510,003
51,000 Furukawa Electric Co. Ltd. (b) (L) ................. 282,697
3,000 Hirose Electric Co. Ltd. ........................... 350,737
19,549 Hon Hai Precision Industry Co. Ltd. ................ 181,364
10,900 Hubbell, Inc., Class B ............................. 570,070
1 7,800 Infineon Technologies AG (b) ....................... 191,380
800 Keyence Corp. ...................................... 179,252
36,000 Konica Corp. (L) ................................... 477,798
6,100 Koninklijke Philips Electronics NV ................. 161,766
1,000 Kyocera Corp. ...................................... 76,998
33,300 MEMC Electronic Materials, Inc. (b) ................ 441,225
5,100 MTS Systems Corp. (L) .............................. 172,431
3,700 Murata Manufacturing Co. Ltd. ...................... 206,900
35,000 NEC Corp. .......................................... 217,576
300 NEC Electronics Corp.(L)(R) ........................ 14,638
2,000 Nippon Electric Glass Co., Ltd. .................... 51,137
96 Nippon Telegraph & Telephone Corp. ................. 430,955
7,300 Omron Corp. ........................................ 174,183
101,200 On Semiconductor Corp. (b) (L) ..................... 459,448
2,600 Rohm Co. Ltd. ...................................... 268,957
6,674 Samsung Electornics - GDR .......................... 1,461,606
37,660 Semtech Corp. (b) .................................. 823,624
5,400 Siliconix, Inc. (b) ................................ 197,046
8,200 Sony Corp. (L) ..................................... 316,893
16,800 STMicroelectronics NV (L) .......................... 327,688
67,790 Taiwan Semiconductor ADR ........................... 575,537
3,600 Tdk Corp. .......................................... 266,654
54,000 Tektronix, Inc. .................................... 1,631,340
1 1,700 Tokyo Electron Ltd. ................................ 720,474
28,525 Trimble Navigation Ltd. (b) ........................ 942,466
16,000 Venture Corp. Ltd. ................................. 155,844
6,600 Yamada Denki Co., Ltd. (L) ......................... 282,756
-----------
28,025,706
-----------
ENERGY (2.7%):
68,900 American Electric Power Co., Inc. .................. 2,366,026
1 7,200 Atmos Energy Corp. ................................. 470,420
63,600 Centerpoint Energy, Inc. ........................... 718,680
53,910 Centrica Plc ....................................... 244,523
2,800 Chubu Electric Power Co., Inc. (L) ................. 67,220
14,900 Cleco Corp. (L) .................................... 301,874
26,400 Edison International ............................... 845,592
335,000 El Paso Corp. ...................................... 3,484,000
6,400 Energy Partners Ltd. (b) (L) ....................... 129,728
121,374 Exelon Corp. ....................................... 5,348,953
34,900 Great Plains Energy, Inc. .......................... 1,056,772
11,900 Iberdrola SA (L) ................................... 302,474
17,100 Kansai Electric Power, Inc. ........................ 347,106
19,500 Oklahoma Gas & Electric Co ......................... 516,945
26,700 Pepco Holdings, Inc. ............................... 569,244
80,300 Sierra Pacific Resources (b) (L) ................... 843,150
78,000 Tokyo Gas Ltd. (L) ................................. 319,703
19,300 UGI Corp. .......................................... 789,563
53,900 Valero Energy ...................................... 2,447,060
6,700 Veba AG ............................................ 611,806
13,900 Westar Energy, Inc. ................................ 317,893
117,100 Xcel Energy, Inc. (L) .............................. 2,131,220
-----------
24,229,952
-----------
ENTERTAINMENT AND LEISURE (0.3%):
25,000 Carnival Corp. ..................................... 1,440,750
26,000 Regal Entertainment Group (L) ...................... 539,500
29,500 Walt Disney Co. .................................... 820,100
-----------
2,800,350
-----------
FINANCIAL SERVICES (8.0%):
9,300 Advanta, Class B ................................... 225,711
1,840 AlFUL Corp. ........................................ 202,369
40,000 Ambac Financial Group, Inc. ........................ 3,285,200
8,700 American Capital Strategies (L) .................... 290,145
7,050 American Home Mortgage Investment Corp. ............ 241,463
11,710 Bay View Capital Corp. ............................. 179,280
35,200 BISYS Group, Inc. (b) (c) .......................... 579,040
56,000 Capital One Financial Corp. ........................ 4,715,760
26,700 Charter Municipal Mortgage Acceptance .............. 652,548
22,600 CIT Group, Inc. .................................... 1,035,532
313,376 Citigroup, Inc. .................................... 15,098,457
17,800 Cohen & Steers, Inc. ............................... 289,250
8,100 CompuCredit Corp. (b) .............................. 221,454
135,798 Countrywide Credit Industries, Inc. ................ 5,025,884
5,373 Deutsche Boerse AG (L) ............................. 323,169
40,700 Equifax, Inc. ...................................... 1,143,670
151,900 Federal Home Loan Mortgage Corp. ................... 11,195,030
65,000 Federal National Mortgage Association .............. 4,628,650
25,136 Fidelity National Financial, Inc. .................. 1,147,961
27,100 Friedman, Billings, Ramsey Group, Inc. ............. 525,469
29,200 Goldman Sachs Group, Inc. .......................... 3,037,968
6,300 Greenhill & Co., Inc. (L) .......................... 180,810
61,100 H BOS Plc .......................................... 994,755
28,279 ING Groep NV ....................................... 855,635
30,100 Lehman Brothers Holdings, Inc. ..................... 2,633,148
4,305 Mainsource Financial Group, Inc. ................... 102,803
61,600 MBIA, Inc. ......................................... 3,898,048
77,400 MBNA Corp. ......................................... 2,181,906
16,000 Merrill Lynch & Co ................................. 956,320
47,700 Morgan Stanley Dean Witter & Co. ................... 2,648,304
3,342 Muenchener Rueckver (R) ............................ 410,152
2,900 National Financial Partners Corp. .................. 112,520
See accompanying notes to financial statements.
6
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- ----------------------------------------------------------------------------
40,000 Nikko Securities Co., Ltd. ................... $ 211,964
5,450 Novastar Financial, Inc. (L) ................. 269,775
6,500 ORIX Corp. ................................... 882,990
8,600 State Financial Services Corp. ............... 258,860
8,305 UBS AG. ...................................... 696,405
7,200 World Acceptance Corp. (b) (L) ............... 198,072
-------------
71,536,477
-------------
FOOD AND BEVERAGES (2.9%):
34,800 Aramark Corp. ................................ 922,548
3,800 Carrefour SA (L) ............................. 180,987
172,000 Coca-Cola Co. ................................ 7,160,360
51,700 Compass Group Pic ............................ 244,425
8,600 Groupe Danone (L) ............................ 794,305
26,400 Hormel Foods Corp. ........................... 827,640
9,700 Koninklijke Numico NV ........................ 349,791
5,850 Nash Finch Co. (L) ........................... 220,896
6,142 Nestle SA .................................... 1,606934
69,800 Pepsi Bottling Group, Inc. ................... 1,887,392
15,600 PepsiAmericas, Inc. .......................... 331,344
148,200 PepsiCo, Inc. ................................ 7,736,039
11,600 Ruddick Corp. ................................ 251,604
59,700 SUPERVALU, Inc. .............................. 2,060,844
100,400 Unilever Pic. ................................ 985,958
18,300 Woolworths Ltd. .............................. 215,324
-------------
25,776,391
-------------
FOREST AND PAPER PRODUCTS (1.3%):
27,800 Abitibi-Consolidated, Inc. (L)................ 191,652
115,450 Georgia Pacific Corp. ........................ 4,327066
13,900 Glatfelter ................................... 212,392
8,200 Longview Fiber Co. ........................... 148,748
10,300 Pope & Talbot,Inc. ........................... 176,233
1,900 Potlatch Corp. ............................... 96,102
27,000 Sumitomo Forestry ............................ 271,133
29,900 Temple-Inland, Inc. .......................... 2,045,160
6,100 Upm-Kymmene Oyj............................... 135,648
19,900 Wausau-Mosinee Paper Corp. ................... 355,414
57,800 Weyerhaeuser Co. ............................. 3,885,316
-------------
11,844,864
-------------
HEALTH SERVICES (2.1%):
36,100 Aetna, Inc. .................................. 4,503,474
8,500 Allscripts Healthcare Solution,
Inc.(b) (L). ............................... 90,695
3,800 Amedisys Inc. (b) (L) ........................ 123,082
4,000 Genesis Healthcare (b) ....................... 140,120
3,760 HCA Inc. ..................................... 150,250
84,500 Humana Inc. (b) .............................. 2,508,805
25,290 Lifepoint Hospitals, Inc. (b) ................ 880,598
2,100 Molina Heathcare, Inc. (b) ................... 97,398
54,400 PacifiCare Health Systems Inc. (b) ........... 3,074,688
4,100 PolyMedica Corp. ............................. 152,889
17,460 Psychiatric Solutions, Inc. (b) .............. 638,338
6,200 Rehabcare Group, Inc. (b) .................... 173,538
1,600 RES-CARE, Inc. (b) ........................... 24,352
173,000 Schering-Plough Corporation .................. 3,612,240
27,200 Stryker Corp. ................................. 1,312,400
12,800 Symbion, Inc. (b) ............................ 282,624
10,350 UnitedHealth Group, Inc. ..................... 911,111
-------------
18,676,602
-------------
HOTELS AND OTHER LODGING PLACES (0.2%):
6,800 Accor SA (L) ................................. 297,714
6,400 Lasalle Hotel Properties ..................... 203,712
20,160 Marriott International, Inc. Class A ......... 1,269,677
13,200 Strategic Hotel Capital, Inc. ................ 217,800
-------------
1,988,903
-------------
INSURANCE (5.1%):
65,470 Aegon NV ..................................... 892,570
5,100 Allianz Ag (L) ............................... 673,461
68,579 American International Group, Inc. ........... 4,503,583
6,650 Arch Capital Group Ltd. (b) .................. 257,355
52 Berkshire Hathaway, Inc. Class A (b) ......... 4,570,799
43,000 Chubb Corp. .................................. 3,306,700
71,200 CIGNA Corp. .................................. 5,807,783
9,300 Great West Lifeco, Inc. (L) .................. 207,245
63,900 Hartford Financial Services Group,Inc ........ 4,428,909
54,200 Insurance Australia Group Ltd ................ 273,194
59 Millea Holdings, Inc. (L) .................... 875,183
61,000 Mitsui Marine And Fire (L) ................... 529,814
35,300 Montpelier RE Holdings Ltd. (L) .............. 1,357,285
38,000 Old Republic International Corp. ............. 961,400
13,000 Platinum Underwriter Holdings Ltd. ........... 404,300
61,700 Promina Group Ltd. ........................... 261,180
19,884 QBE Insurance Group Ltd. (L) ................. 239,261
28,000 Reinsurance Group of America, Inc. ........... 1,356,600
14,300 Renaissancere Holdings Ltd. - ADR ............ 744,744
4,000 Selective Insurance Group, Inc. (L) .......... 176,960
119,339 St. Paul Cos., Inc ........................... 4,423,897
2,050 Stewart Information Services Corp. ........... 85,383
15,061 Swiss Re ..................................... 1,074,177
20,600 Torchmark Corp. .............................. 1,177,084
4,800 United Fire & Casualty Co. (L) ............... 161,808
115,600 Unumorivident Corp.(L) ....................... 2,073 864
34,400 Wellpoint Inc. (b)............................ 3,956,000
29,300 Yasuda F & M Insurance........................ 298,519
-------------
45,079,058
-------------
INTERNET SERVICES (0.5%);
119,250 CNET Networks, Inc. (b)....................... 1,339,177
4,100 J2 Global Communications, Inc. (b) (L) ....... 141,450
6,500 Softbank Corp. (L) ........................... 316,532
35,570 VeriSign, Inc. (b)............................ 1,192,306
12,550 WebEx Communications, Inc. (b) (L) ........... 298,439
24 Yahoo Japan Corp. (b) (L) .................... 115,234
35,300 Yahoo, Inc. (b) .............................. 1,330,104
-------------
4,733,242
-------------
MACHINERY AND EQUIPMENT (1.6%):
3,450 Albany International Corp. Class A ........... 121,302
11,400 Briggs & Stratton Corp. ...................... 474,012
41,000 Caterpillar, Inc. ............................ 3,997,910
39,200 Deere & Co. .................................. 2,916,480
13,100 Eaton Corp. .................................. 947,916
116,650 Graco, Inc. .................................. 4,356,878
10,600 Lincoln Electric Holdings, Inc. (L) .......... 366,124
2,600 Nidec Corp. (L) .............................. 316,912
7,900 Schneider SA (L) ............................. 549,789
3,400 SMC Corp. (L) ................................ 389,207
-------------
14,436,530
-------------
MANUFACTURING (0.2%):
3,600 Applied Industrial Tech, Inc. ................ 98,640
13,100 Assa Abloy AB Class B (L) .................... 223,741
6,700 Cummins, Inc. ................................ 561,393
8,100 Siemens AG (L) ............................... 686,579
-------------
1,570,353
-------------
See accompanying notes to financial statements.
7
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- ----------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS (5.2%):
25,300 Advanced Medical Optics, Inc. (b)............................................... $ 1,040,842
107,780 Amgen, Inc. (b) ................................................................ 6,914,088
21,750 Applera Corp.-Celera Genomics Group (b) ........................................ 299,063
33,420 Arthrocare Corp. (b) ........................................................... 1,071,445
99,000 Baxter International, Inc. ..................................................... 3,419,460
22,900 Cerner Corp. (b) (L) ........................................................... 1,217,593
12,100 Cooper Cos., Inc. .............................................................. 854,139
11,100 Diagnostic Products Corp. ...................................................... 611,055
14,700 Edwards Lifesciences Corp. (b) ................................................. 606,522
4,000 Essilor International SA (L) ................................................... 313,443
16,500 Exelixis, Inc. (b) (L) ......................................................... 156,750
51,100 Forest Laboratories, Inc., Class A (b) ......................................... 2,292,346
22,680 Gen-Probe, Inc. (b) ............................................................ 1,025,363
70,864 Genzyme Corp. (b) .............................................................. 4,115,072
7,000 Haemonetics Corp. (b) .......................................................... 253,470
2,200 Hoya Corp. (L) ................................................................. 248,404
8,500 Immucor, Inc. (b) .............................................................. 199,835
89,600 Johnson & Johnson, Inc.......................................................... 5,682,432
8,600 Kensey Nash Corp.(b) (L) ....................................................... 296,958
67,500 Laboratory Corp. of America Holdings (b) ....................................... 3,362,850
4,300 Landauer, Inc................................................................... 196,510
7,500 Medical Action Industries (b) (L) .............................................. 147,750
101,000 Medtronic, Inc.................................................................. 5,016,670
4,300 Mine Safety Appliances ......................................................... 218,010
15,900 Per-Se Technologies, Inc. (b) (L) .............................................. 251,697
11,600 Respironics, Inc. (b) .......................................................... 630,576
40,100 Sanofi-Synthelabo SA (L) ....................................................... 3,204,948
14,200 Seattle Genetics, Inc. (b) (L) ................................................. 92,726
31,120 Serologicals Corp. (b) ......................................................... 688,374
6,800 Sola International, Inc. (b) ................................................... 187,272
2,060 Synthes-Stratec, Inc. (b) ...................................................... 230,982
14,690 Ventana Medical Systems (b) .................................................... 940,013
20,380 Zeneca Group Plc................................................................ 739,120
-----------
46,525,778
-----------
METALS AND MINING (1.3%):
11,900 Alcan, Inc. (L) ................................................................ 584,000
8,100 Anglo American Plc. ............................................................ 191,591
14,023 Broken Hill Proprietary Co. Ltd. ............................................... 168,627
16,700 Cameco Corp. (L) ............................................................... 584,706
10,800 Carpenter Technology Corp....................................................... 631,368
5,700 Commercial Metals Co............................................................ 288,192
9,000 Companhia Vale do Rio Doce ADR ................................................. 219,420
9,000 Companhia Vale do Rio Doce ADR ................................................. 261,090
5,400 Compass Minerals International, Inc............................................. 130,842
1,900 Freeport-McMoran-Cooper Corp. (b) .............................................. 91,770
13,300 Inco Ltd. (b) .................................................................. 489,174
23,510 Joy Global, Inc................................................................. 1,021,039
19,910 Kaydon Corp..................................................................... 657,428
8,100 Kennametal, Inc................................................................. 403,137
7,000 NS Group, Inc. (b) ............................................................. 194,600
39,800 Phelps Dodge Corp .............................................................. 3,937,016
8,400 Repsol Ypf SA (L) .............................................................. 218,763
10,000 Rio Tinto Pic .................................................................. 294,321
27,900 Timken Co....................................................................... 725,958
4,800 Veritas DGC, Inc. (b) .......................................................... 107,568
55,000 WMC Resources Ltd .............................................................. 311,287
23,600 Xstrata Plc. ................................................................... 422,286
-----------
11,934,183
-----------
OIL AND GAS (6.2%):
29,340 Airgas, Inc..................................................................... 777,803
90,200 BG Plc. ........................................................................ 613,040
26,146 Billiton Plc ................................................................... 306,457
19,400 Chesapeake Energy Corp.......................................................... 320,100
140,522 Chevron Texaco Corp............................................................. 7,378,810
78,319 ConocoPhillips ................................................................. 6,800,439
121,980 Devon Energy Corp............................................................... 4,747,462
26,150 Eni SpA (L) .................................................................... 654,727
230,600 Exxon Mobil Corp................................................................ 11,820,556
36,220 Grand Prideco, Inc. (b) ........................................................ 726,211
68,500 Halliburton Co.................................................................. 2,687,940
6,100 Houston Exploration Co. (b) .................................................... 343,491
25,400 Kerr-McGee Corp. ............................................................... 1,467,866
4,177 L'Air Liquide (L) .............................................................. 772,152
71,900 Marathon Oil Corp............................................................... 2,704,159
52,100 Occidental Petroleum Corp....................................................... 3,040,556
53,000 Royal Dutch Petroleum (L) ...................................................... 3,050,904
45,500 Royal Dutch Petroleum-ADR ...................................................... 2,610,790
2,500 Sasol LTD....................................................................... 53,694
18,200 Shell Transportation & Trading Co. Plc ......................................... 155,143
21,500 Statoil ASA (L) ................................................................ 337,233
11,100 Stone Energy Corp. (b) ......................................................... 500,499
5,900 Suncor Energy, Inc. (L) ........................................................ 208,789
8,000 Tesoro Petroleum Corp. (b) ..................................................... 254,880
37,100 Unocal Corp..................................................................... 1,604,204
31,100 Vintage Petroleum, Inc. (L) .................................................... 705,659
5,400 YUKOS ADR (L) .................................................................. 14,040
-----------
54,657,604
-----------
PHARMACEUTICALS (5.2%):
158,100 Abbott Laboratories ............................................................ 7,375,365
17,600 Abgenix, Inc. (b) (L) .......................................................... 181,984
31,500 Amylin Pharmaceuticals (b) (L) ................................................. 735,840
35,570 Astrazeneca Plc. ............................................................... 1,292,647
38,650 BioMarin Pharmaceutical, Inc. (b) (L) .......................................... 246,974
15,940 Cephalon, Inc. (b) (L) ......................................................... 811,027
18,300 CV Therapeutics, Inc. (b) (L) .................................................. 420,900
7,700 Elan Corp. Plc (b) (L) ......................................................... 209,825
23,100 Eli Lilly & Co.................................................................. 1,310,925
13,500 Encysive Pharmaceuticals, Inc. (b) (L) ......................................... 134,055
100,600 Gilead Sciences, Inc. (b) ...................................................... 3,519,994
6,100 Glaxosmithkline Plc. ........................................................... 143,113
34,800 Human Genome Sciences, Inc. (b) ................................................ 418,296
26,900 ICOS Corp.(b) (L) .............................................................. 760,732
52,100 Incyte Pharmaceutical, Inc. (b) ................................................ 520,479
131,600 King Pharmaceuticals, Inc. (b) ................................................. 1,631,840
84,108 Medcohealth Solutions, Inc. (b) ................................................ 3,498,893
77,400 Millennium Pharmaceuticals, Inc. (b) ........................................... 938,088
12,700 Neurogen Corp. (b) (L) ......................................................... 118,872
34,944 Novartis AG .................................................................... 1,760,875
4,100 Novo-Nordisk AS (b) ............................................................ 224,009
25,550 NPS Pharmaceuticals, Inc. (b) (L) .............................................. 467,054
47,800 Perrigo Co...................................................................... 825,506
339,515 Pfizer, Inc..................................................................... 9,129,558
46,100 Regeneron Pharmaceuticals, Inc. (b) (L) ........................................ 424,581
2,784 Roche Holding AG ............................................................... 320,487
38,339 Salix Pharmaceuticals, Inc. (b) ................................................ 674,383
29,900 Sankyo Co....................................................................... 675,500
667 Sanofi-Aventis ................................................................. 53,400
307 Serono SA-B (L) ................................................................ 202,219
See accompanying notes to financial statements.
8
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
December 31, 2004 (Unaudited)
Value
Shares (Note 2)
- ----------------------------------------------------------------------------------------------------------
31,000 Shionogi & Co. (L) ........................................................... $ 428,682
6,100 UCB SA (L) ................................................................... 310,099
103,000 Watson Pharmaceutical, Inc. (b) .............................................. 3,379,430
48,500 Wyeth ........................................................................ 2,065,615
5,000 Yamanouchi Pharmaceutical Co. Ltd. (L) ....................................... 194,691
18,550 Zymogenetics, Inc. (b) (L) ................................................... 426,650
-----------
45,832,588
-----------
PRINTING AND PUBLISHING (0.5%):
8,600 Advo, Inc. ................................................................... 306,590
8,700 McGraw-Hill Companies, Inc. .................................................. 796,398
74,100 Pearson Plc. ................................................................. 894,133
9,700 Reed Elsevier NV ............................................................. 132,243
69,800 Reed International Plc. ...................................................... 643,914
11,500 Thomson Corp. (L) ............................................................ 405,713
14,900 Thomson Corp. ................................................................ 525,821
14,015 VNU NV ....................................................................... 413,954
-----------
4,118,766
-----------
REAL ESTATE (1.6%):
171,000 Amoy Properties Ltd. (L) ..................................................... 264,001
20,600 Anthracite Capital, Inc. ..................................................... 254,616
7,200 Arbor Realty Trust, Inc. ..................................................... 176,688
18,000 Bedford Property Investors, Inc. (L) ......................................... 511,380
25,800 Boston Properties, Inc. ...................................................... 1,668,486
48,700 CB Richard Ellis Group, Inc. (b) ............................................. 1,633,885
1,400 Daito Trust Construction Co. Ltd (L) ......................................... 66,537
56,620 General Growth Properties, Inc. .............................................. 2,047,379
5,600 Glenborough Realty Trust, Inc. ............................................... 119,168
10,000 IMPAC Mortgage Holdings (L) .................................................. 226,700
38,890 IndyMac Mortgage Holdings, Inc. .............................................. 1,339,761
25,600 iStar Financial, Inc. ........................................................ 1,158,656
86,000 Mitsubishi Estate Co. (L) .................................................... 1,007,124
26,000 Mitsui Fudosan (L) ........................................................... 315,897
15,100 Omega Healthcare Investors, Inc. ............................................. 178,180
27,100 Prologis Trust ............................................................... 1,174,243
25,500 Pulte Homes, Inc. ............................................................ 1,626,900
4,600 Redwood Trust, Inc. .......................................................... 285,614
5,900 Sovran Self Storage, Inc. .................................................... 248,626
3,900 Thornburg Mortgage Asset Corp. (L) ........................................... 112,944
-----------
14,416,785
-----------
RESTAURANTS (1.0%):
12,025 CEC Entertainment, Inc. (b) .................................................. 480,639
6,100 Dave & Buster's, Inc. (b) (L) ................................................ 123,220
8,500 Landry's Seafood Restaurants, Inc. (L) ....................................... 247,010
250,400 McDonald's Corp. ............................................................. 8,027,824
-----------
8,878,693
-----------
RETAIL (3.6%):
41,700 Abercrombie & Fitch Co., Class A ............................................. 1,957,815
32,500 Best Buy Co. ................................................................. 1,931,150
33,700 BJ's Wholesale Club, Inc. (b) ................................................ 981,681
46,485 Cache, Inc. (b) .............................................................. 837,660
43,140 Caremark Rx, Inc. (b) ........................................................ 1,701,010
7,400 Cato Corp. ................................................................... 213,268
50,900 Claire's Stores, Inc. ........................................................ 1,081,625
22,670 Costco Wholesale Corp. ....................................................... 1,097,455
30,200 Esprit Asia Holdings Ltd. (R) ................................................ 182,614
18,000 Gamestop Corp. (b) (L) ....................................................... 402,480
117,500 Gap, Inc. .................................................................... 2,481,600
5,300 Genesco, Inc. (b) (L) ........................................................ 165,042
26,000 Hollywood Entertainment Corp. (b) (L) ........................................ 340,340
12,200 Home Depot, Inc. ............................................................. 521,428
30,240 J.C. Penney Co. .............................................................. 1,251,936
35,400 Jos. A. Bank Clothiers, Inc. (b) ............................................. 1,001,820
43,100 Jusco Ltd.(L) ................................................................ 719,245
73,970 Limited Brands ............................................................... 1,702,789
3,800 Metro AG (L) ................................................................. 208,982
46,200 Michaels Stores, Inc. ........................................................ 1,384,614
8,100 Movie Gallery, Inc ........................................................... 154,467
28,770 New York & Co. (b) ........................................................... 475,280
14,100 Pacific Sunwear of California, Inc. (b) ...................................... 313,866
34,600 PetsMart, Inc. ............................................................... 1,229,338
2,000 Shimamura Co. Ltd. (L) ....................................................... 145,994
7,500 Stage Stores, Inc. (b) ....................................................... 311,400
66,010 Staples, Inc. ................................................................ 2,225,197
21,250 Target Corp. ................................................................. 1,103,513
41,510 The Warnaco Group, Inc. (b) .................................................. 896,616
7,800 Trans World Entertainment (b) (L) ............................................ 97,266
25,210 Tuesday Morning Corp. (b) .................................................... 772,182
79,500 Wal-Mart Stores, Inc. ........................................................ 4,199,189
-----------
32,088,862
-----------
TECHNOLOGY (3.0%):
111,000 Agilent Technologies, Inc. (b) ............................................... 2,675,100
4,900 Black Box Corp. (L) .......................................................... 235,298
6,900 Canon, Inc. (L) .............................................................. 372,372
36,400 Citrix Systems, Inc. (b) ..................................................... 892,892
38,860 Commscope, Inc. (b) .......................................................... 734,454
84,100 Emc Corp. (b) ................................................................ 1,250,567
30,938 Freescale Semiconductor, Inc., Class B (b) ................................... 568,016
10,100 Hutchinson Technology, Inc. (b) (L) .......................................... 349,157
482,100 Intel Corp. .................................................................. 11,276,319
16,092 Lucent Tech Warrant .......................................................... 25,425
23,830 Macrovision Corp. (b) ........................................................ 612,908
7,700 Plantronics, Inc. ............................................................ 319,319
15,400 Qlogic Corp. (b) ............................................................. 565,642
8,000 RICOH Co. Ltd. ............................................................... 154,348
27,400 Storage Technology Corp. (b) ................................................. 866,114
119,600 Texas Instruments, Inc. ...................................................... 2,944,552
29,200 United Defense Inds, Inc. (b) ................................................ 1,379,700
79,770 Viisage Technology, Inc. (b) ................................................. 718,728
25,500 Western Digital Corp. (b) .................................................... 276,420
-----------
26,217,331
-----------
TELECOMMUNICATIONS (4.8%):
24,300 Adtran, Inc. ................................................................. 465,102
9,300 America Movil ................................................................ 486,855
23,650 Aspect Communications Corp. (b) .............................................. 263,461
12,700 C-COR Electronics, Inc. (b) (L) .............................................. 118,110
157,200 CenturyTel, Inc. ............................................................. 5,575,885
50,000 China Telecom ................................................................ 169,504
78,800 Citizens Communications Co. .................................................. 1,086,652
3,300 Commonwealth Telephone Enterprise, Inc. (b) (L) .............................. 163,878
46,300 EchoStar Communications Corp., Class A. ...................................... 1,539,012
49,790 Ericsson ADR (b) ............................................................. 1,567,887
16,740 Jamdat Mobile, Inc. (b) ...................................................... 345,681
130,300 Koninklijke (Royal) KPN NV ................................................... 1,238,001
281,600 Motorola, Inc. ............................................................... 4,843,520
48,600 National Grid Group .......................................................... 462,804
89,400 Nextel Communications, Inc, Class A (b)... ................................... 2,682,000
56,900 Nextel Partners, Inc., Class A (b) ........................................... 1,111,826
28,500 Nokia Oyj - Class A .......................................................... 450,143
16,600 Portugal Telecom, Sgps, SA ................................................... 205,328
See accompanying notes to financial statements.
9
PORTFOLIO OF INVESTMENTS
NEW CONVENANT GROWTH FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- --------------------------------------------------------------------
115,420 PTEK Holdings, Inc. (b) ............... $ 1,236,148
24,900 Qualcomm, Inc. ........................ 1,055,760
46,050 Rural Cellular Corp. (b) (L) .......... 286,845
31,400 SBC Communications, Inc. .............. 809,178
36,800 Scientific-Atlanta, Inc. .............. 1,214,768
750,500 Singapore Telecommunications Ltd (R) .. 1,094,211
17,700 Societe Europeenne Satellite .......... 228,558
96,500 Sprint Corp. .......................... 2,398,025
3,036 Swisscom AG ........................... 1,196,138
67,520 Symmetricom, Inc. (b) ................. 655,619
5,600 Tele Danmark AS Class B ............... 237,147
147,000 Telefonaktiebolaget LM Ericsson (b) ... 468,956
72,830 Telefonica De Espana .................. 1,372,059
4,700 Telefonos de Mexico ADR ............... 180,104
3,610 Telekom Austria AG .................... 68,451
19,700 Telus Corp. ........................... 581,324
137,720 UnitedGlobalCom (b) (L) ............... 1,330,375
25,352 Verizon Communications, Inc. .......... 1,027,010
12,700 Vivendi Universal (b) (L) ............. 405,495
1,491,568 Vodafone Group Pic .................... 4,044,925
--------------
42,666,745
--------------
TRANSPORTATION (1.1%):
3,100 Alexander & Baldwin ................... 131,502
14,950 Arkansas Best Corp. ................... 671,106
61,400 Burlington Northern Santa Fe Corp. .... 2,904,833
46,000 CSX Corp. ............................. 1,843,680
12,590 Fedex Corp. ........................... 1,239,989
3,500 Overnite Corp. ........................ 130,340
18,500 Ryder System, Inc. .................... 883,745
13,400 TNT Post Group NV ..................... 363,915
2,600 USF Corp. ............................. 98,670
12,240 UTIWorldwide, Inc. .................... 832,565
35,000 Yamato Transport ...................... 519,176
--------------
9,619,521
WASTE MANAGEMENT (0.7%): --------------
8,200 Duratek, Inc. (b) ..................... 204,262
205,100 Waste Management, Inc. ................ 6,140,694
6,344,956
--------------
TOTAL COMMON STOCKS ................... 867,047,657
--------------
Principal
Amount
- ----------
CONVERTIBLE BONDS (0.1%):
FINANCIAL SERVICES (0 1%):
33,000,000 SMFG Finance (Cayman) LTD.,2.25%,
7/11/05 (R) ........................... 767,440
--------------
TOTAL CONVERTIBLE BONDS ............... 767,440
--------------
Shares
- ----------
EXCHANGE GE TRADED FUNDS (0.1%):
8,000 S&P Depositary Receipt (b) (L) .......... $ 967,200
--------------
TOTAL EXCHANGE TRADED FUNDS ............. 967,200
--------------
Principal
Amount
- ----------
REPURCHASE AGREEMENT (2.1%):
18,582,000 Repurchase Agreement with State Street
Bank, 1.40%, 1/3/05 (Proceeds at maturity
of $ 18,584, 168, collateralized by
$3,708,375 Federal Home Loan Bank 6.50% due
11/13/09; $2,733,294 Fannie Mae 6.25%
due 5/15/29; $7,265,703 Federal Home
Loan Bank 1.625% due 6/17/05; $4,492,445
Freddie Mac 1.80% due 8/4/05; $766,875
Freddie Mac 0.00% due 1/30/14) .......... 18,582,000
--------------
TOTAL REPURCHASE AGREEMENT .............. 18,582,000
--------------
Value
Shares (Note 2)
- ----------------------------------------------------------------------
INVESTMENTS HELD AS COLLATERAL FOR LOANED SECURITIES (6.6%):
58,358,094 State Street Navigator Securities Lending
Prime Portfolio, 2.19%, 1/3/05 .......... 58,358,094
--------------
TOTAL INVESTMENTS HELD AS COLLATERAL
FOR LOANED SECURITIES ................... 58,358,094
--------------
TOTAL (COST $817,616,930) (a) ........................ $ 945,722,391
==============
Percentages indicated are based on net assets of $887,142,418.
a) Represents cost for financial reporting purposes and differs
from cost basis for federal income tax purposes by the amount
of losses recognized for federal reporting in excess of federal
income tax reporting of $ 10,282,744 and by PFIC mark to market
of $327,098. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation ................. $ 138,908,947
Unrealized depreciation ................. (21,413,328)
--------------
Net unrealized appreciation ............. $ 117,495,619
==============
(b) Non-income producing securities.
(c) Investment in affiliate.
(L) A portion or all of the Security is on loan.
(R) Security exempt from registration under Rule 144A of the Securities
Act of 1933. 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 liquid.
ADR - American Depository Receipt
GDR - Global Depository Receipt
As of December 31, 2004, country diversification for the Growth
Fund was as follows:
(Unaudited)
COUNTRY % OF MARKET VALUE VALUE
- ----------------------------------------------------------------------
United States 88.31 835,113,788
Japan 2.76 26,088,382
United Kingdom 1.82 17,198,050
Netherlands 1.28 12,071,727
France 1.19 11,301,376
Switzerland 1.01 9,597,880
Germany 0.59 5,536,872
Spain 0.46 4,319,205
Canada 0.41 3,883,328
Australia 0.32 2,985,797
Bermuda 0.27 2,506,329
Sweden 0.26 2,471,362
Korea 0.15 1,461,606
Hong Kong 0.15 1,416,085
Singapore 0.13 1,250,055
Italy 0.11 1,029,603
Norway 0.09 875,426
Virgin Islands 0.09 832,565
Cayman Islands 0.08 767,440
Taiwan 0.08 756,901
Ireland 0.07 706,987
Mexico 0.07 666,959
Finland 0.06 585,790
Brazil 0.05 480,510
Denmark 0.05 461,156
Puerto Rico 0.05 435,456
Belgium 0 03 310,099
Luxembourg 0.02 228,558
Portugal 0.02 205,328
Austria 0.01 68,451
South Africa 0.01 53,694
India 0.00 41,586
Russian Federation 0.00 14,040
----------- -----------
Total Investments 100.00 945,722,391
=========== ===========
See accompanying notes to financial statements.
10
PORTFOLIO OF INVESTMENTS
NEW COVENANT INCOME FUND
DECEMBER 31, 2004 (UNAUDITED)
Principal Value
Amount (Note 2)
- ----------------------------------------------------------------------
ASSET BACKED SECURITIES (20.7%):
4,234,181 Bear Stearns Commercial Mortgage
Securities, 6.08%, 2/15/35............... $ 4,442,635
4,615,000 Bear Stearns Commercial Mortgage
Securities, 5.47%, 6/11/41................. 4,840,695
1,100,000 Chase Funding Loan Acquistion Trust,
2.82%, 5/25/34............................. 1,100,308
4,170,000 Citigroup Commercial Mortgage Trust,
5.29%, 4/15/40............................. 4,357,597
1,195,000 Commercial Mortgage Pass-Through
Certificate, 5.28%, 7/10/37................ 1,247,789
3,280,000 First Franklin Mortgage Loan, 2.82%,
12/25/32................................... 3,282,107
3,510,000 General Electric Capital Corp., 6.125%,
2/22/11.................................... 3,849,761
1,076,440 GMAC Commercial Mortgage Corp.,
2.96%, 3/10/39............................. 1,055,131
4,000,000 GMAC Commercial Mortgage Securities,
Inc., 5.30%, 8/10/38....................... 4,143,783
3,543,506 Indymac Indx Mortgage Loan Trust, 2.85%,
9/25/34.................................... 3,555,070
3,716,667 Indymac Indx Mortgage Loan Trust, 2.82%,
11/25/34................................... 3,719,338
985,000 Indymac Indx Mortgage Loan Trust, 2.65%,
1/25/35.................................... 983,129
4,213,531 Ixis Real Estate Capital Trust, 2.61%,
2/25/35.................................... 4,216,242
5,294,517 JP Morgan Chase Commercial Mortgage
Securities Co., 4.28%, 5/15/41............. 5,345,499
5,225,816 LB Commercial Conduit Mortgage Trust,
6.41%, 6/15/31............................. 5,408,997
3,350,479 Lehman Brothers, 7.18%, 9/15/19, Series
2000-C4.................................... 3,603,699
3,933,178 Master Adjustable Rate Mortgages Trust,
3.79%, 11/21/34............................ 3,892,117
1,762,055 Master Adjustable Rate Mortgages Trust,
3.82%, 12/21/34........................... 1,759,513
4,020,052 Master Alternative Loans Trust, 4.50%,
7/25/19.................................... 4,013,086
812,099 Master Alternative Loans Trust, 4.75%,
7/25/19.................................... 819,324
4,651,386 Morgan Stanley Mortgage Loan Trust,
5.46%, 10/25/34............................ 4,720,953
4,590,351 Morgan Stanley Mortgage Loan Trust,
5.15%, 11/25/34............................ 4,675,522
3,047,175 Residential Asset Mortgage Product, 6.50%,
10/25/16................................... 3,131,928
5,865,000 Residential Asset Mortgage Products,
5.57%, 6/25/32, Series 2002-RS3, Class Al5 5,968,892
6,155,000 Structured Adjustable Rate Mortgage Loan
Trust, 4.73%, 7/25/34...................... 6,137,507
5,220,000 UBS Commercial Mortgage Trust, 5.59%,
6/15/31.................................... 5,568,633
560,000 Washington Mutual, 4.28%, 1/25/35.......... 558,264
815,000 Washington Mutual, 3.81 %, 6/25/34......... 802,746
4,165,633 Washington Mutual, 2.36%, 7/25/44.......... 4,173,068
4,605,000 Wells Fargo Mortgage Backed Securities
Trust, 3.54%, 9/25/34...................... 4,507,174
3,699,391 Wells Fargo Mortgage Backed Securities
Trust, 4.605%, 12/25/34.................... 3,716,038
-----------
TOTAL ASSET BACKED SECURITIES.............. 109,596,545
-----------
CORPORATE BONDS (20.0%):
2,750,000 Alcan, Inc., 6.125%, 12/15/33.............. 2,920,698
1,520,000 Alco Capital, 6.50%, 6/15/18(L)............ 1,741,956
1 ,900,000 Alliance Capital Management, 5.625%,
8/15/06.................................... 1,964,366
3,120,000 American General Finance, 6.10%, 5/22/06... 3,237,776
1,000,000 American General Finance, 5.875%,
7/14/06(L)................................. 1,037,204
780,000 American General Finance, 4.50%,
11/15/07................................... 795,223
675,000 AOL Time Warner, Inc., 6.875%, 5/1/12...... 769,852
2,400,000 AOL Time Warner, Inc., 7.625%, 4/15/31..... 2,912,551
1,000,000 Bank of America Corp., 4.375%, 12/1/10..... 1,004,272
5,000,000 Bank of New York,4.14%, 8/2/07............. 5,042,121
1,500,000 Berkshire Hathaway, Inc., 3.375%, 10/15/08 1,484,139
3,780,000 Bottling Group Lie,5.00%, 11/15/13(L)...... 3,904,060
1,125,000 BRE Properties, Inc., 7.125%, 2/15/13...... 1,268,382
3,800,000 Burlington North Santa Fe, 6.75%, 7/15/11 4,301,699
2,500,000 Carolina Power & Light, 6.50%, 7/15/12..... 2,777,150
750,000 Carramerica Realty Corp., 5.125%, 9/1/11.... 756,531
1,500,000 Caterpillar Financial Services Corp.,3.70%,
8/15/08.................................... 1,494,366
10,000,000 Coca-Cola Enterprises, 0.00%, 6/20/20...... 4,351,760
1,265,000 Duke Realty Corp., 7.05%, 3/1/06........... 1,304,157
1,600,000 EOP Operating LP, 6.80%, 1/15/09........... 1,755,334
2,037,874 FedEx Corp., 6.72%, 1/15/22, Series 98-1A 2,292,801
1,950,000 Firstar Bank, 7.125%, 12/1/09(L)........... 2,215,968
2,000,000 Ford Motor Corp., 6.375%, 2/1/29........... 1,805,100
500,000 Ford Motor Credit Co., 7.375%, 10/28/09 539,881
3,350,000 General Mills, Inc., 6.00%, 2/15/12........ 3,640,505
2,695,000 General Motors Acceptance Corp.,
6.875%, 9/15/11............................ 2,765,496
975,000 General Motors Corp., 7.20%, 1/15/11(L).... 1,001,213
615,000 General Motors Corp., 8.80%, 3/1/21........ 666,971
1,400,000 Georgia Power Co., 6.20%, 2/1/06(L)........ 1,445,203
1,750,000 Household Finance Corp., 6.40%, 6/17/08.... 1,889,503
600,000 Household Finance Corp., 4.75%, 5/15/09.... 615,858
1,500,000 Household Finance Corp., 4.125%
11/16/09................................... 1,493,562
1,070,000 International Paper Co., 6.50%,11/15/07.... 1,141,214
475,000 International Paper Co., 5.85%,10/30/12.... 506,919
675,000 May Department Stores Co., 7.45%,
9/15/11.................................... 770,593
4,000,000 Merrill Lynch & Co., 4.125%, 9/10/09(L).... 4,001,484
3,525,000 Morgan Stanley, 3.625%, 4/1/08............. 3,508,366
3,250,000 National City Corp., 6.875%, 5/15/19(L).... 3,722,797
2,500,000 Nationwide Life, 5.35%, 2/15/07(R)......... 2,589,778
1,445,000 Pacific Gas & Electric, 6.05%, 3/1/34...... 1,506,030
3,785,000 PNC Funding Corp., 6.125%, 21/15/09........ 4,053,436
2,975,000 SBC Communications, Inc., 4.125%
9/15/09.................................... 2,972,712
900,000 Sprint Capital Corp., 7.625%, 1/30/11...... 1,046,229
2,570,000 Sprint Capital Corp., 6.875%, 11/15/28..... 2,822,192
2,800,000 SunTrust Banks, Inc., 4.25%, 10/15/09(L)... 2,812,978
2,500,000 USAA Capital Corp., 5.59%, 12/20/06(R) 2,606,698
1,085,000 Washington Mutual, 3.96%, 7/25/34.......... 1,072,831
3,000,000 Washington Mutual Capital Inc, 4.20%,
1/15/10.................................... 2,991,528
2,500,000 Wells Fargo Corp., 4.20%, 1/15/10.......... 2,512,983
-----------
TOTAL CORPORATE BONDS...................... 105,834,426
-----------
11
PORTFOLIO OF INVESTMENTS
NEW COVENANT INCOME FUND
DECEMBER 31, 2004 (UNAUDITED)
Principal Value
Amount (Note 2)
- -----------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES (41.7%):
FANNIE MAE
5,649,214 7.07%, 11/1/06 .................................... $ 5,900,079
3,061,835 7.185%, 5/1/07 .................................... 3,230,778
2,261,132 7.74%, 6/1/07 .................................... 2,413,738
475,643 6.61%, 9/1/07 .................................... 502,774
2,154,442 6.23%, 1/1/08 .................................... 2,274,071
933,885 6.13%, 10/1/08 .................................... 992,916
1,431,868 7.01%, 11/1/08 .................................... 1,563,884
4,123,488 6.14%, 4/1/09 .................................... 4,409,905
5,294,159 7.32%, 12/1/10 .................................... 6,028,057
3,847,335 6.48%, 1/1/11 .................................... 4,229,387
958,692 6.09%, 5/1/11 .................................... 1,038,707
1,335,434 6.305%, 5/1/11 .................................... 1,460,854
6,046,184 3.95%, 7/1/13 .................................... 5,798,810
5,070,000 6.00%, 12/25/16, Series 01-71, Class QE ........... 5,299,159
5,305,000 4.50%, 3/25/17 .................................... 5,341,895
6,290,000 6.00%, 3/25/17 .................................... 6,575,734
503,526 6.50%, 6/1/17, FN 254343 .......................... 534,205
2,368,395 6.50%, 8/1/17 ..................................... 2,512,663
2,960,000 4.50%, 1/1/20 (b) ................................. 2,950,750
865,000 4.50%, 1/1/20 (b) ................................. 862,297
3,155,000 4.50%, 1/1/20 (b) ................................. 3,145,141
2,260,000 4.50%, 1/1/20 (b) ................................. 2,252,938
1,590,000 4.50%, 9/25/25 .................................... 1,618,063
263,958 7.50%, 5/1/27 ..................................... 283,342
47,247 6.50%, 6/25/27 .................................... 47,380
2,090,000 4.50%, 10/25/28 ................................... 1,960,630
254,480 7.50%, 4/1/29, Pool # 323645 ...................... 273,312
294,250 7.50%, 4/1/29 .................................... 316,025
18,855 7.50%, 8/1/29, Pool # 252712 ...................... 20,228
257,783 7.50%, 7/1/30 .................................... 276,859
953,924 7.50%, 12/1/30 .................................... 1,023,237
2,445,488 6.09%, 10/25/31 ................................... 2,499,565
1,411,412 7.00%, 6/1/32 ..................................... 1,496,642
4,135,910 6.50%, 7/1/32 ..................................... 4,342,426
960,000 4.50%, 7/25/33 .................................... 964,257
4,660,212 7.00%, 12/25/33 ................................... 4,930,388
9,180,000 5.00%, 1/1/35 (b) ................................. 9,108,286
1,660,000 5.00%, 1/1/35 (b) ................................. 1,647,032
1,195,000 5.00%, 1/1/35 (b) ................................. 1,185,665
2,465,000 5.00%, 1/1/35 (b) ................................. 2,445,743
875,000 2.49%, 4/25/35 .................................... 875,263
4,147,394 7.00%, 10/25/41 ................................... 4,397,523
5,230,000 5.50%, 7/25/42 .................................... 5,305,477
9,812,023 6.50%, 7/25/42 .................................... 10,265,828
2,946,127 7.00%, 7/25/42 .................................... 3,123,808
875,339 6.50%, 9/25/42 .................................... 915,823
7,645,000 5.50%, 11/25/43 ................................... 7,846,346
6,272,968 5.95%, 2/25/44 .................................... 6,522,589
638,105 7.00%, 2/25/44, Series 04-W2, Class 2A2 ........... 675,833
5,288,514 6.00%, 7/25/44 .................................... 5,514,616
4,200,000 6.00%, 8/25/44 .................................... 4,344,480
1,105,000 6.50%, 8/25/44 .................................... 1,158,151
1,858,523 7.00%, 1/25/48 .................................... 1,970,611
FREDDIE MAC
141 8.00%, 5/1/06, Pool #E30879 ....................... 145
5,617,324 6.98%, 10/l/10, Pool #W20024 ...................... 6,294,773
1,285,000 6.90%, 12/1/10 .................................... 1,447,424
1,490,000 4.50%, 8/15/13 .................................... 1,513,830
4,000,000 4.50%, 5/15/15 .................................... 4,056,231
4,775,000 6.00%, 5/15/17 .................................... 4,985,309
5,168,000 5.00%, 10/15/17 ................................... 5,275,144
5,305,000 4.00%, 8/15/19 .................................... 4,914,966
5,095,000 5.50%, 12/15/27 ................................... 5,219,576
1,425,000 5.50%, 1/15/28 .................................... 1,459,895
4,169,000 5.50%, 1/15/28 .................................... 4,268,924
5,240,000 5.00%, 2/15/28 .................................... 5,319,382
1,787,104 7.00%, 10/15/30 ................................... 1,837,223
4,225,000 4.50%, 1/1/35 (b) ................................. 4,081,088
11,540,000 5.00%, 1/1/35 (b) ................................. 11,460,664
2,820,268 7.00%, 2/25/43, Series T-54 Class 3A .............. 2,993,891
------------
TOTAL MORTGAGE-BACKED SECURITIES ..................... 221,802,635
------------
U.S. TREASURY OBLIGATIONS (12.9%):
3,675,000 U.S. Treasury Bonds, 7.50%, 11/15/16 (L) .......... 4,697,543
28,965,000 U.S. Treasury Bonds, 6.00%, 2/15/26 (L) ........... 33,188,706
14,110,000 U.S. Treasury Notes, 2.75%, 7/31/06 (L) ........... 14,068,671
4,260,000 U.S. Treasury Notes, 3.375%, 11/15/08 (L).......... 4,249,853
11,315,000 U.S. Treasury Notes, 5.00%, 8/15/11 (L) ........... 12,049,151
------------
TOTAL U.S. TREASURY OBLIGATIONS ............................... 68,253,924
------------
Shares
- -------
CLOSED END INVESTMENT COMPANIES (1.2%)
372,400 Blackrock Income Opportunity Trust................. 4,040,540
358,900 MFS Government Markets Income Trust (L)............ 2,383,096
------------
TOTAL CLOSED END INVESTMENT
COMPANIES ......................................... 6,423,636
------------
Principal
Amount
- ----------
REPURCHASE AGREEMENT (9.7%):
51,383,000 Repurchase Agreement with
State Street Bank, 1.40%, 1/3/05 (Proceeds at
maturity of $51,388,995, collateralized by
$52,316,181 Federal Home Loan Bank 6.50%
due 11/13/09; $100,969 Fannie Mae 000% due
2/1/11)(c) ........................................ 51,383,000
TOTAL REPURCHASE AGREEMENT ........................ 51,383,000
INVESTMENTS HELD AS COLLATERAL FOR LOANED SECURITIES (16.7%):
88,510,603 State Street Navigator Securities Lending
Prime Portfolio, 2.19%, 1/3/05 ................... 88,510,603
------------
TOTAL INVESTMENTS HELD AS COLLATERAL
FOR LOANED SECURITIES ............................. 88,510,603
------------
TOTAL (COST $642.509.155)(a) .................................. $651,804,769
============
- ----------
Percentages indicated are based on net assets of $530,383,565.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for federal reporting in excess of federal income tax reporting of $ 1
,079,234. Cost for federal income tax differs from value by net unrealized
appreciation (depreciation) of securities as follows:
Unrealized appreciation ...................................... $ 9,933,785
Unrealized depreciation ...................................... (1,717,405)
------------
Net unrealized appreciation .................................. $ 8,216,380
============
* Variable rate security.The interest rate shown reflects the rate in effect as
of December 31, 2004.
See accompanying notes to financial statements.
12
PORTFOLIO OF INVESTMENTS
NEW COVENANT INCOME FUND
DECEMBER 31, 2004 (UNAUDITED)
(b) Security purchased on a when-issued or delayed delivery basis.
(c) All or a portion of this security has been segregated as collateral
for securities purchased on a when-issued or delayed delivery basis.
(L) A portion or all of the security is on loan.
(R) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. The Advisor using procedures approved by the
Board of Trustees has deemed these securities to be liquid.
See accompanying notes to financial statements.
13
PORTFOLIO OF INVESTMENTS
NEW COVENANT BALANCED GROWTH FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- -------------------------------------------- ------------
INVESTMENT COMPANIES (98.4%):
6,609,950 New Covenant Growth Fund....... $197,637,515
4,372,736 New Covenant Income Fund....... 111,635,952
------------
TOTAL INVESTMENT COMPANIES..... 309,273,467
------------
Principal
Amount
- -----------
REPURCHASE AGREEMENT (l.6%):
4,901,000 Repurchase Agreement with State
Street Bank, 1.40%, 1/3/05
(Proceeds at maturity of
$4,901,572, collateralized by
$5,001,688 Federal Home Loan
Bank 5.00% due 2/15/18)......... 4,901,000
------------
TOTAL REPURCHASE AGREEMENT...... 4,901,000
------------
TOTAL INVESTMENTS
(COST $300,618,769) (a)..................... $314,174,467
============
Percentages indicated are based on net assets of $314,082,484.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for federal reporting in excess of federal income tax reporting of $
15,765,991 and by REIT cost adjustment of $937,717 and return of capital
of $489,331. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation...................... $ 5,932,975
Unrealized depreciation...................... (6,716,220)
-----------
Net unrealized depreciation.................. $ (783,245)
===========
NEW COVENANT BALANCED INCOME FUND
DECEMBER 31, 2004 (UNAUDITED)
Value
Shares (Note 2)
- ---------------------------------------------- ------------
INVESTMENT COMPANIES (98.5%):
1,642,248 New Covenant Growth Fund........... $ 49,103,215
2,906,756 New Covenant Income Fund........... 74,209,493
-----------
TOTAL INVESTMENT COMPANIES......... 123,312,708
-----------
Principal
Amount
- -----------
REPURCHASE AGREEMENT (1.5%):
1,866,000 Repurchase Agreement with State
Street Bank, 1.40%, 1/3/05
(Proceeds at maturity of
$ 1,866,217, collateralized by
$ 1,907,309 Federal Home Loan
Bank 1.625% due 6117/05)........... 1.866.000
------------
TOTAL REPURCHASE AGREEMENT...... 1,866,000
------------
TOTAL INVESTMENTS
(COST $118,085,593) (a)...................... $125,178,708
============
Percentages indicated are based on net assets of $ 125,139,387.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for federal reporting in excess of federal income tax reporting of
$3,120,811 and by REIT cost adjustment of 224,079 and return of capital
of $333,050. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation...................... $ 5,539,658
Unrealized depreciation...................... (1,010,225)
-----------
Net unrealized appreciation.................. $ 4,529,433
===========
See accompanying notes to financial statements.
14
This Page Intentionally Left Blank.
15
STATEMENTS OF ASSETS AND LIABILITIES
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
BALANCED BALANCED
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND
-------------- --------------- -------------- --------------
ASSETS:
Investments, at value (Cost $759,258,836,
$553,998,552, $4,901,000 and
$1,866,000, respectively)................. $ 887,364,297 $ 563,294,166 $ 4,901,000 $ 1,866,000
Investment in affiliates (Cost $0,$0,
$295,717,769 and $116,219,593,
respectively)............................. -- -- 309,273,467 123,312,708
Collateral for securities on loan (Cost
$58,358,094, $88,5 1 0,603, $0 and $0,
respectively)............................. 58,358,094 88,510,603 -- --
------------- -------------- ------------- -------------
Total Investments .......................... 945,722,391 651,804,769 314,174,467 125,178,708
Cash ....................................... 2,054 182 914 581
Foreign currency, at value (Cost $72, 108,
$0, $0 and $0, respectively) ............. 73,466 -- -- --
Interest and dividends receivable .......... 1,004,505 3,708,384 191 73
Receivable for investments sold ............ 732,985 11,451,988 -- --
Reclaims receivable ........................ 40,502 -- -- --
Prepaid expenses and other assets .......... 22,948 19,365 13,223 9,997
------------- -------------- ------------- -------------
Total Assets: .............................. 947,598,851 666,984,688 314,188,795 125,189,359
------------- -------------- ------------- -------------
LIABILITIES:
Payable for investments purchased .......... 1,120,993 47,637,728 -- --
Payable for return of collateral received
on securities loaned ...................... 58,358,094 88,510,603 -- --
Accrued expenses and other payables:
Investment advisory fees ................. 546,500 225,315 -- --
Administration fees ...................... 18,042 11,045 6,436 2,582
Other .................................... 412,804 216,432 99,875 47,390
------------- -------------- ------------- -------------
Total Liabilities: ......................... 60,456,433 136,601,123 106,311 49,972
------------- -------------- ------------- -------------
NET ASSETS: .................................. $ 887,142,418 $ 530,383,565 $ 314,082,484 $ 125,139,387
============= ============== ============= =============
NET ASSETS CONSIST OF:
Paid-in Capital ............................ 918,294,049 521,892,043 320,147,944 123,014,512
Undistributed (distributions in excess of)
net investment income .................... (175,128) (1,113,290) 497,304 337,237
Undistributed net realized gains/(losses)
on investment and foreign currency
transactions ............................. (159,088,023) 309,198 (20,118,462) (5,305,477)
Unrealized appreciation on investment
transactions and translation of assets
and liabilities denominated in foreign
currencies ............................... 128,111,520 9,295,614 13,555,698 7,093,115
------------- -------------- ------------- -------------
Total Net Assets ............................. $ 887,142,418 $ 530,383,565 $ 314,082,484 $ 125,139,387
============= ============== ============= =============
Shares outstanding ........................... 29,671,050 20,776,464 4,020,193 6,627,548
Net asset value, offering and redemption
price per share ............................ $ 29.90 $ 25.53 $ 78.13 $ 18.88
See accompanying notes to financial statements.
16
STATEMENTS OF OPERATIONS
NEW COVENANT FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 (UNAUDITED)
BALANCED BALANCED
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND
------------- ------------- ------------- -------------
INVESTMENT INCOME:
Interest .......................................... $ 117,158 $ 11,798,422 $ 30,098 $ 12,142
Dividend .......................................... 8,178,456 245,195 -- --
Dividend income from affiliates ................... -- -- 3,122,421 1,732,276
Foreign tax withholding ........................... (67,895) -- -- --
Income from securities lending .................... 61,674 19,663 -- --
------------- ------------- ------------- -------------
Total Income: ..................................... 8,289,393 12,063,280 3,152,519 1,744,418
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees .......................... 4,074,992 2,008,407 -- --
Administration fees ............................... 82,316 53,553 30,151 12,359
Shareholder service fees .......................... 1,029,038 669,469 -- --
Accounting fees ................................... 124,747 77,207 38,357 16,741
Audit fees ........................................ 18,002 12,420 7,231 3,285
Custodian fees .................................... 156,219 36,441 1,420 1,420
Insurance fees .................................... 16,167 10,384 5,768 2,426
Legal fees ........................................ 28,458 18,192 10,430 4,254
Registration and filing fees ...................... 9,884 10,097 9,683 8,862
Printing fees ..................................... 20,423 13,200 7,446 3,071
Chief compliance officer fees ..................... 33,369 21,936 12,281 5,063
Transfer agent fees ............................... 42,992 36,886 87,542 46,740
Other fees ........................................ 17,560 10,794 5,568 2,225
------------- ------------- ------------- -------------
Total expenses before contractual fee reductions .. 5,654,167 2,978,986 215,877 106,446
Expenses contractually reduced .................... (1,029,038) (669,469) -- --
Expenses paid indirectly .......................... (66,513) -- -- --
------------- ------------- ------------- -------------
Total Expenses .................................... 4,558,616 2,309,517 215,877 106,446
------------- ------------- ------------- -------------
NET INVESTMENT INCOME ............................. 3,730,777 9,753,763 2,936,642 1,637,972
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAINS
AND LOSSES FROM INVESTMENTS
AND FOREIGN CURRENCY:
Realized gains/(losses) on investment and foreign
currency transactions............................ 6,120,934 3,437,473 (2,798,405) (1,215,383)
Unrealized appreciation on investments and
translation of assets and liabilities
denominated in foreign currency.................. 48,047,380 6,390,008 16,646,605 5,451,408
------------- ------------- ------------- -------------
Net realized/unrealized gains on investments and
foreign currency................................. 54,168,314 9,827,481 13,848,200 4,236,025
------------- ------------- ------------- -------------
Change in net assets resulting from operations .... $ 57,899,091 $ 19,581,244 $ 16,784,842 $ 5,873,997
============= ============= ============= =============
See accompanying notes to financial statements.
17
STATEMENTS OF CHANGES IN NET ASSETS
NEW COVENANT FUNDS
GROWTH FUND INCOME FUND
------------------------------- -------------------------------
FOR THE FOR THE
SIX MONTHS SIX MONTHS
ENDED DECEMBER FOR THE ENDED DECEMBER FOR THE
31, 2004 YEAR ENDED 31, 2004 YEAR ENDED
(UNAUDITED) JUNE 30, 2004 (UNAUDITED) JUNE 30, 2004
-------------- ------------- -------------- -------------
OPERATIONS:
Net investment income ................................... $ 3,730,777 $ 2,505,244 $ 9,753,763 $ 19,421,219
Realized gains/(losses) on investment and foreign
currency transactions.................................. 6,120,934 49,605,122 3,437,473 (1,027,902)
Unrealized appreciation/(depreciation) on investments and
translation of assets and liabilities denominated in
foreign currency....................................... 48,047,380 87,618,337 6,390,008 (18,444,921)
------------- ------------- ------------- -------------
Change in net assets resulting from operations .......... 57,899,09 1 1 39,728,703 19,581,244 (51 ,604)
------------- ------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income .............................. (3,735,416) (2,835,338) (10,867,053) (18,264,083)
From net realized gain on investment .................... -- -- (1,303,165) (8,717,403)
Tax Return of Capital ................................... -- -- -- (2,311,618)
------------- ------------- ------------- -------------
Change in net assets from shareholder distributions ..... (3,735,416) (2,835,338) (12,170,218) (29,293,104)
------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS:
Change in net assets from fund share transactions ....... (1,596,674) (11,202,779) (1,052,342) 27,635,785
------------- ------------- ------------- -------------
Change in net assets .................................... 52,567,001 125,690,586 6,358,684 (1,708,923)
------------- ------------- ------------- -------------
NET ASSETS:
Beginning of period ..................................... 834,575,417 708,884,831 524,024,881 525,733,804
------------- ------------- ------------- -------------
End of period ........................................... $ 887,142,418 $ 834,575,417 $ 530,383,565 $ 524,024,881
============= ============= ============= =============
Undistributed net investment income ..................... $ (175,128) $ (170,489) $ (1,113,290) $ --
------------- ------------- ------------- -------------
See accompanying notes to financial statements.
18
STATEMENTS OF CHANGES IN NET ASSETS
NEW COVENANT FUNDS
BALANCED GROWTH FUND BALANCED INCOME FUND
------------------------------- -------------------------------
FOR THE FOR THE
SIX MONTHS SIX MONTHS
ENDED DECEMBER FOR THE ENDED DECEMBER FOR THE
31, 2004 YEAR ENDED 31, 2004 YEAR ENDED
(UNAUDITED) JUNE 30, 2004 (UNAUDITED) JUNE 30, 2004
-------------- ------------- -------------- -------------
OPERATIONS:
Net investment income ............................... $ 2,936,642 $ 5,313,634 $ 1,637,972 $ 3,614,507
Realized losses on investment ....................... (2,798,405) (5,013,806) (1,215,383) (1,197,841)
Unrealized appreciation on investments .............. 16,646,605 31,737,323 5,451,408 6,133,930
------------- ------------- ------------- -------------
Change in net assets resulting from operations ...... 16,784,842 32,037,151 5,873,997 8,550,596
------------- ------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income .......................... (2,936,832) (4,860,882) (1,638,083) (3,278,062)
Tax Return of Capital ............................... -- (299,330) -- (233,142)
------------- ------------- ------------- -------------
Change in net assets from shareholder distributions.. (2,936,832) (5,160,212) (1,638,083) (3,511,204)
------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS:
Change in net assets from fund share transactions.... (2,211,754) 3,102,552 (4,011,887) (2,700,088)
------------- ------------- ------------- -------------
Change in net assets ................................ 11,636,256 29,979,491 224,027 2,339,304
------------- ------------- ------------- -------------
NET ASSETS:
Beginning of period ................................. 302,446,228 272,466,737 124,915,360 122,576,056
------------- ------------- ------------- -------------
End of period ....................................... $ 314,082,484 $ 302,446,228 $ 125,139,387 $ 124,915,360
============= ============= ============= =============
Undistributed net investment income ................. $ 497,304 $ (497,494) $ 337,237 $ (337,348)
------------- ------------- ------------- -------------
See accompanying notes to financial statements.
19
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
GROWTH FUND
-----------------------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE
DECEMBER FOR THE FOR THE FOR THE FOR THE YEAR ENDED
31, 2004 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 30,
(UNAUDITED) JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001 2000 (a)
----------- ------------- ------------- ------------- ------------- -----------
Net Asset Value, Beginning
of Period ........................ $ 28.07 $ 23.51 $ 24.13 $ 29.26 $ 42.07 $ 40.81(b)
INVESTMENT ACTIVITIES:
Net investment income ........... 0.13 0.07 0.10 0.04 0.10 0.15
Net realized and unrealized
gain/(loss) from investments... 1.83 4.58 (0.63) (5.11) (4.86) 2.49
----------- ----------- ----------- ----------- ----------- -----------
Total from Investment
Activities .................... 1.96 4.65 (0.53) (5.07) (4.76) 2.64
----------- ----------- ----------- ----------- ----------- -----------
DIVIDENDS:
Net investment income ........... (0.13) (0.09) (0.09) (0.01) - (0.30)
Net realized gains .............. -- -- -- -- (7.80) (1.08)
Return of capital ............... -- -- -- (0.05) (0.25) --
----------- ----------- ----------- ----------- ----------- -----------
Total Dividends ................. (0.13) (0.09) (0.09) (0.06) (8.05) (1.38)
----------- ----------- ----------- ----------- ----------- -----------
Change in net asset value
per share ..................... 1.83 4.56 (0.62) (5.13) (12.81) 1.26
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD .. $ 29.90 $ 28.07 $23.51 $ 24.13 $ 29.26 $ 42.07
=========== =========== =========== =========== =========== ===========
Total Return .................... 6.99%(c) 19.81% (2.17%) (17.34%) (12.33%) 6.38%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period
(000) .......................... $ 887,142 $ 834,575 $ 708,885 $ 695,622 $ 816,901 $ 905,086
Ratio of expenses to average net
assets ........................ 1.11%(d) 1.13% 1.13% 1.11% 1.07% 1.07%
Ratio of net investment income
to average net assets .......... 0.90%(d) 0.32% 0.47% 0.15% 0.20% 0.37%
Ratio of expenses to average
net assets* .................... l.37%(d) 1.39% 1.13% 1.11% 1.07% 1.07%
Portfolio turnover .............. 38% 94% 63% 79% 142% 152%
- ----------
* Ratios excluding waivers and expenses paid indirectly.
(a) The Fund commenced investment operations on July 1, 1999.
(b) Represents net asset value of predecessor Common Trust Fund.
(c) Not Annualized.
(d) Annualized.
See accompanying notes to financial statements.
20
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
INCOME FUND
-------------------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE
DECEMBER FOR THE FOR THE FOR THE FOR THE YEAR ENDED
31, 2004 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 30,
(UNAUDITED) JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001 2000 (a)
----------- ------------- ------------- ------------- ------------ -----------
Net Asset Value, Beginning of Period .... $ 25.17 $ 26.62 $ 25.54 $ 24.83 $ 23.89 $ 24.52(b)
INVESTMENT ACTIVITIES:
Net investment income ................. 0.48 0.96 1.00 1.21 1.50 1.47
Net realized and unrealized gain/(loss)
from investments ................... 0.47 (0.96) 1.42 0.73 0.92 (0.63)
----------- ----------- ----------- ----------- ----------- -----------
Total from Investment Activities ...... 0.95 -- 2.42 1.94 2.42 0.84
----------- ----------- ----------- ----------- ----------- -----------
DIVIDENDS:
Net investment income ................ (0.53) (0.90) (1.06) (1.23) (1.48) (1.47)
Net realized gains ................... (0.06) (0.44) (0.28) -- -- --
Return of capital .................... -- (0.11) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total Dividends ...................... (0.59) (1.45) (1.34) (1.23) (1.48) (1.47)
----------- ----------- ----------- ----------- ----------- -----------
Change in net asset value per share .. 0.36 (1.45) 1.08 0.71 0.94 (0.63)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD ....... $ 25.53 $ 25.17 $ 26.62 $ 25.54 $ 24.83 $ 23.89
=========== =========== =========== =========== =========== ===========
Total Return ......................... 3.77%(c) 0.00% 9.63% 7.97% 10.31% 3.55%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) .... $ 530,384 $ 524,025 $ 525,734 $ 545,356 $ 559,286 $ 571,669
Ratio of expenses to average net
assets ............................... 0.86%(d) 0.86% 0.85% 0.84% 0.82% 0.83%
Ratio of net investment income to
average net assets ................. 3.63%(d) 3.70% 3.79% 4.72% 5.99% 6.12%
Ratio of expenses to average net
assets* ............................ 1.11%(d) 1.11% 0.85% 0.84% 0.82% 0.83%
Portfolio turnover ................... 1 12% 242% 226% 290% 191% 182%
- ----------
* Ratios excluding waivers.
(a) The Fund commenced investment operations on July 1, 1999.
(b) Represents net asset value of predecessor Common Trust Fund.
(c) Not Annualized.
(d) Annualized.
See accompanying notes to financial statements.
21
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
BALANCED GROWTH FUND
------------------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE
DECEMBER FOR THE FOR THE FOR THE FOR THE YEAR ENDED
31, 2004 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 30,
(UNAUDITED) JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001 2000 (a)
----------- ------------- ------------- ------------- ------------- ------------
Net Asset Value, Beginning of Period ..... $ 74.65 $ 67.88 $ 67.25 $ 81.92 $ 91.84 $ 90.96(b)
INVESTMENT ACTIVITIES:
Net investment income ................. 0.73 1.34 1.27 1.52 2.33 3.18
Net realized and unrealized gain/(loss)
from investments..................... 3.48 6.73 0.71 (7.44) (5.07) 1.48
----------- ----------- ----------- ----------- ----------- ------------
Total from Investment Activities ...... 4.21 8.07 1.98 (5.92) (2.74) 4.66
----------- ----------- ----------- ----------- ----------- ------------
DIVIDENDS:
Net investment income ................. (0.73) (1.23) (1.27) (1.34) (5.68) (3.19)
Net realized gains .................... -- -- (0.08) (7.00) (1.50) (0.59)
Return of capital ..................... -- (0.07) -- (0.41) -- --
----------- ----------- ----------- ----------- ----------- ------------
Total Dividends ....................... (0.73) (1.30) (1.35) (8.75) (7.18) (3.78)
----------- ----------- ----------- ----------- ----------- ------------
Change in net asset value per share ... 3.48 6.77 0.63 (14.67) (9.92) 0.88
----------- ----------- ----------- ----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD ........ $ 78.13 $ 74.65 $ 67.88 $ 67.25 $ 81.92 $ 91.84
=========== =========== =========== =========== =========== ============
Total Return .......................... 5.67%(c) 11.95% 3.10% (7.79%) (3.01%) 5.13%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ..... $ 314,082 $ 302,446 $ 272,467 $ 286,314 $ 314,873 $ 343,231
Ratio of expenses to average net
assets ............................. 0.14%(d) 0.15% 0.14% 0.11% 0.09% 0.10%
Ratio of net investment income to
average net assets ................. l.94%(d) 1.52% 1.96% 2.02% 2.61% 3.50%
Portfolio turnover .................... 2% 12% 15% 18% 18% 8%
- ----------
(a) The Fund commenced investment operations on July 1, 1999.
(b) Represents net asset value of predecessor Common Trust Fund.
(c) Not Annualized.
(d) Annualized.
See accompanying notes to financial statements.
22
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
BALANCED INCOME FUND
------------------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE
DECEMBER FOR THE FOR THE FOR THE FOR THE YEAR ENDED
31, 2004 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 30,
(UNAUDITED) JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001 2000 (a)
----------- ------------- ------------- ------------- ------------- ----------
Net Asset Value, Beginning of Period ..... $ 18.24 $ 17.52 $ 17.10 $ 18.88 $ 20.01 $ 20.l6(b)
INVESTMENT ACTIVITIES:
Net investment income ................. 0.25 0.53 0.52 0.57 0.78 0.89
Net realized and unrealized gain/(loss)
from investments ................... 0.64 0.70 0.47 (0.84) (0.38) (0.02)
-------- --------- ---------- --------- -------- -------
Total from Investment Activities ...... 0.89 1.23 0.99 (0.27) 0.40 0.87
-------- --------- ---------- --------- -------- -------
DIVIDENDS:
Net investment income ................. (0.25) (0.48) (0.52) (0.54) (1.22) (0.89)
Net realized gains .................... -- -- (0.05) (0.94) (0.31) (0.13)
Return of capital ..................... -- (0.03) -- (0.03) -- --
-------- --------- ---------- --------- -------- -------
Total Dividends ....................... (0.25) (0.51) (0.57) (1.51) (1.53) (1.02)
-------- --------- ---------- --------- -------- -------
Change in net asset value per share ... 0.64 0.72 0.42 (1.78) (1.13) (0.15)
-------- --------- ---------- --------- -------- -------
NET ASSET VALUE, END OF PERIOD ........ $ 18.88 $ 18.24 $ 17.52 $ 17.10 $ 18.88 $ 20.01
======== ========= ========== ========= ======== =======
Total Return .......................... 4.89%(c) 7.07% 6.00% (1.55%) 2.08% 4.40%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000) ..... $125,139 $ 124,915 $ 122,576 $ 114,013 $116,519 $ 124,809
Ratio of expenses to average net
assets .............................. 0.17%(d) 0.18% 0.16% 0.14% 0.12% 0.14%
Ratio of net investment income to
average net assets .................. 2.64%(d) 2.34% 3.08% 3.13% 3.88% 4.46%
Portfolio turnover .................... 2% 12% 18% 11% 20% 12%
- ----------
(a) The Fund commenced investment operations on July 1, 1999.
(b) Represents net asset value of predecessor Common Trust Fund.
(c) Not Annualized.
(d) Annualized.
See accompanying notes to financial statements.
23
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (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 Funds 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 Funds
enter 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 principals
generally accepted in the United States ("GAAP") requires management to make
estimates and assumptions that effect 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 its 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 securities and securities with no readily determinable market values
are valued using procedures determined in good faith 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 computation of a Fund's net asset 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
decided upon in good faith by the Fund's 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 4:00PM EST.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for no later than the first calculation on the first business day
following the trade date. Interest income is recognized on the accrual basis and
includes, where applicable, the amortization or 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.
OPTIONS: The Income Fund 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
24
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
liability. The liability is subsequently "marked-to-market" to reflect the
current market value of the option written. The premium paid by a 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 instrument and the price of the underlying security or
transaction. Risks may also arise due to illiquid secondary markets for the
instruments. There were no options outstanding at December 31, 2004.
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.
Certain countries may also impose substantial restrictions on investments on
their capital markets by foreign entities, including restriction on investment
in issuers or industries deemed sensitive to the relevant nation's interests.
These factors may limit the investment opportunities available or result in lack
of liquidity and high price volatility with respect to securities of issuers
from developing countries.
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: Certain Funds enter into forward 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. The
Fund realizes gains and losses at the time forward contracts are extinguished.
There were no contracts outstanding at December 31, 2004.
LOANS OF PORTFOLIO SECURITIES: The Growth Fund and Income Fund may lend their
securities pursuant to a securities lending agreement ("Lending Agreement") with
State Street Bank ("SSB"). Security loans made pursuant to the Lending Agreement
are required at all times to be secured by collateral valued at least 102% of
the market value of the securities loaned. Cash collateral received is invested
by SSB 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 can not be sold or
repledged. Net income earned on the investment of cash collateral and loan
premiums received on non-cash collateral are allocated between SSB and the Funds
in accordance with the Lending Agreement. Income allocated to the Funds is
included in interest income in the respective statements of operations.
The cash collateral received by the Growth Fund and the Income Fund is pooled
and at December 31, 2004 was invested in a bank note (with interest rate of
2.23% and maturity date of February 7, 2005), certificates of deposit (with
interest rates ranging from 1.80% to 2.45% and maturity dates ranging from
January 10, 2005 to February 17, 2005), commercial paper (with interest rates
ranging from 1.74% to 2.44% and maturity dates ranging from January 6, 2005 to
April 12, 2005), euro certificates of deposit (with interest rates ranging from
1.28% to 2.44% and maturity dates ranging from January 18, 2005 to March
30, 2005), U.S. Government Agencies (with interest rates ranging from 1.72% to
1.98% and maturity dates ranging from January 1, 2005 to February 15, 2005),
medium term notes (with interest rates ranging from 1.38% to 1.88% and maturity
dates ranging from January 15, 2005 to March 29, 2005), repurchase agreements
(with interest rates ranging from 2.15% to 2.47% and maturity dates ranging from
January 3, 2005 to March 30, 2005), and variable rate notes (with interest rates
ranging from 2.19% to 2.69% and maturity dates ranging from January 4, 2005 to
January 16, 2006). Information on the investment of cash collateral is shown in
the Portfolio 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, a portion of which is retained by the
Advisor. 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 Directors and when, in
the judgement 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.
In the event of bankruptcy of the borrower, realization/retention of the
collateral may be subject to legal proceedings.
25
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
The value of the loaned securities and related collateral at December 31, 2004,
was as follows:
VALUE OF VALUE OF VALUE OF
FUND SECURITIES LOANED CASH COLLATERAL NON-CASH COLLATERAL
---- ----------------- --------------- -------------------
Growth Fund $ 56,345,620 $ 58,358,094 $ 286,900
Income Fund 87,394,468 88,510,603 646,523
Cash collateral received for securities on loan was invested in the following:
GROWTH FUND INCOME FUND
------------ ------------
State Street Navigator Securities Lending Prime Portfolio,
2.19% due 1/3/05 $ 58,358,094 $ 88,510,603
REPURCHASE AGREEMENTS: The Funds may enter into repurchase agreements with a
bank, broker-dealer or other financial institution, which are secured by
obligations of the U.S. government. 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 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. The Funds will establish or will instruct their
custodian to establish a segregated account in which it will maintain cash and
U.S. Government securities or other liquid portfolio securities at least equal
in value to commitments for when-issued securities. 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 or will instruct their
custodian to maintain in a segregated account 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, 2004 the Funds had outstanding when-issued or delayed
delivery purchase commitments with corresponding assets segregated, as follows:
FUND AMOUNT
---- -------------
Income Fund.......................................... $ 51,383,000
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
reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassifications. To
the extent they exceed net investment income and net realized gains for tax
purposes, they are reported as distribution of capital.
26
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
FEDERAL INCOME TAXES: It is the Funds' intention 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.
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 pay a portion of their expenses. Under this arrangement, the Growth
Fund had expenses reduced by $66,513, or 0.02% as a percentage of the average
daily net assets of the Fund on an annualized basis for the six months ended
December 31, 2004.
FUND AMOUNT RATIO
---- --------- -----
Growth Fund.......................................... $ 66,513 0.02%
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
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.
(the "Advisor"). 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 Funds' average daily net assets and the
Income Fund pays the Advisor a monthly fee at the annual rate of 0.75% of the
value of the Income Fund's average daily net assets. The Advisor does not
receive advisory fees for the Balanced Growth and the Balanced Income Funds. The
Advisor has entered into Sub-Advisory Agreements with five 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 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 to which the Sub-Advisor is
responsible for making investment decisions.
The following are the Sub-Advisors for the Growth Fund: Capital Guardian Trust
Company, Seneca Capital Management, Sound Shore Management Inc., and Wellington
Management Company, LLP.
Tattersall Advisory Group is the Sub-Advisor for the Income Fund.
The Funds employ a Chief Compliance Officer ("CCO") who receives compensation
and reimbursement of out-of-pocket expenses as approved by the Board of
Trustees.
The Funds are each a party to a Shareholder Services Agreement 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 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
implementation and operation of 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 BISYS Fund Services Ohio,
Inc. ("BISYS Ohio"), an indirect, wholly owned subsidiary of The BISYS Group,
Inc. ("BISYS"). Under the Servicing Agreements, BISYS Ohio provides transfer
agency, administrative and fund accounting services to the Funds. Under the fund
accounting agreement BISYS Ohio is entitled to a fee computed at an annual rate
of 0.03% of the 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 BISYS is entitled to a fee computed at an annual
rate of 0.02% of the Trusts average daily net assets subject to a minimum fee
per annum of $45,000 per fund.
The Trust has a Distribution Agreement with New Covenant Funds Distributor, Inc.
(the "Distributor"), an indirect, wholly owned subsidiary of BISYS, to serve 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 State Street Bank.
27
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
No officer, director or employee of New Covenant Funds, BISYS, or any affiliate
thereof, receives any compensation from the Company for serving as Director or
officer of the Company. The Company also reimburses expenses incurred by the
unaffiliated Trustees in attending Board and Committee meetings.
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, 2004, were as follows:
FUND PURCHASES SALES
---- ------------- -------------
Growth Fund ....................................... $ 309,857,956 $ 316,405,381
Income Fund ....................................... 574,011,582 563,811,743
Balanced Growth Fund .............................. 6,566,386 9,332,442
Balanced Income Fund .............................. 2,844,913 7,044,388
5. SHARES OF BENEFICIAL INTEREST
The Trust authorizes the issuance of an unlimited number of shares for each of
the Funds, and each share has a par value of $0.001 per share. The Fund
currently offers a single class of shares. Each issued and outstanding share of
each Fund is entitled to participate equally in dividends and distributions
declared by such Fund and in the net assets of such Fund upon liquidation or
dissolution remaining after satisfaction of outstanding liabilities.
FOR THE SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
GROWTH FUND:
Issued 786,990 $ 21,903,835 2,170,262 $ 57,829,249
Reinvested 8,176 235,002 3,060 180,445
Redeemed (860,808) (23,735,511) (2,593,638) (69,212,473)
------------ ------------- ------------ -------------
Net decrease (65,642) $ (1,596,674) (420,316) $ (l1,202,779)
============ ============= ============ =============
FOR THE SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
INCOME FUND:
Issued 743,410 $ 19,038,284 2,606,939 $ 67,488,886
Reinvested 63,068 1,622,706 276,892 7,160,195
Redeemed (846,997) (21,713,332) (1,814,304) (47,013,296)
------------ ------------- ------------ -------------
Net increase (decrease) (40,519) $ (1,052,342) 1,069,527 $ 27,635,785
============ ============= ============ =============
FOR THE SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
BALANCED GROWTH FUND:
Issued 143,894 $ 10,792,234 471,865 $ 34,471,118
Reinvested 28,492 2,163,003 51,451 3,764,861
Redeemed (203,684) (15,166,991) (485,890) (35,133,427)
------------ ------------- ------------ -------------
Net increase (decrease) (31,298) $ (2,211,754) 37,426 $ 3,102,552
============ ============= ============ =============
FOR THE SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2004 JUNE 30, 2004
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ -------------
BALANCED INCOME FUND:
Issued 197,966 $ 3,659,589 627,611 $ 11,370,210
Reinvested 53,005 983,397 113,907 2,066,329
Redeemed (471,117) (8,654,873) (891,041) (16,136,627)
------------ ------------- ------------ -------------
Net decrease (220,146) $ (4,011,887) (149,523) $ (2,700,088)
============ ============= ============ =============
28
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
6. 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 on 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 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.
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 rated 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 high-yield/high-risk bonds 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 principle 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 to investors in that Fund. The
Balanced Funds are also subject to rebalancing risk. Rebalancing activities,
while undertaken to maintain the 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.
7. PROXY VOTING POLICY
A description of the policies and procedures that the Trust uses to determine
how to vote proxies related to portfolio securities is available (i) without
charge, upon request, by calling 800-858-6127 and (ii) on the Securities and
Exchange Commission's website at http://www.sec.gov.
8. QUARTERLY HOLDINGS
A portfolio holdings statement for the Funds for the quarter ended March 31,
2005, will be available, without charge, on the Securities and Exchange
Commission's website at http://www.sec.gov by May 30, 2005.
9. SUBSEQUENT EVENT
The Board of Trustees has approved the appointment of Mazama Capital Management,
Inc. and Santa Barbara Asset Management Inc. to replace Seneca Capital
Management as a sub-Advisor of the Growth Fund effective January 1, 2005.
Capital Guardian Trust Company, Sound Shore Management, Inc. and Wellington
Management Company, LLP remain as the other Sub-Advisors for the Fund.
29
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
10. ADDITIONAL FUND INFORMATION
GROWTH FUND:
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
------------------- -------------
Financials................ 17.9%
Information Technology.... 15.5%
Health Care............... 12.2%
Consumer Discretionary.... 11.7%
Foreign Stocks............ 11.4%
Industrials............... 9.4%
Energy.................... 5.9%
Consumer Staples.......... 5.8%
Telecommunications........ 3.1%
Materials................. 2.8%
Utilities................. 2.2%
Cash Equivalents.......... 2.1%
-----
Total..................... 100.0%
BALANCED GROWTH FUND:
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
------------------- -------------
Investment Companies...... 98.4%
Cash Equivalents.......... 1.6%
-----
Total..................... 100.0%
INCOME FUND:
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
------------------- -------------
Government Agency/MBS..... 39.4%
Asset Backed.............. 19.5%
Corporates................ 18.8%
Treasuries................ 12.1%
Cash...................... 9.1%
Closed End................ 1.1%
-----
Total..................... 100.0%
BALANCED INCOME FUND:
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
------------------- -------------
Investment Companies...... 98.5%
Cash Equivalents.......... 1.5%
-----
Total..................... 100.0%
As a shareholder of the New Covenant Funds, you incur ongoing costs, including
management fees; distribution 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 1,2004 through December
31, 2004.
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**
7/1/04 12/31/04 7/1/04 - 12/31/04 7/1/04 - 12/31/04
------------- ------------- ----------------- -----------------
Growth Fund............. $ 1,000.00 $ 1,069.90 $ 5.79 1.11%
Income Fund............. 1,000.00 1,037.70 4.42 0.86%
Balanced Growth Fund.... 1,000.00 1,056.70 0.73 0.14%
Balanced Income Fund.... 1,000.00 1,048.90 0.88 0.17%
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 Fund's 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 only and do not reflect any transactional costs, such as sales
charges (loads), or exchange fees. Therefore, the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
BEGINNING ENDING EXPENSE PAID EXPENSE RATIO
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD* DURING PERIOD**
7/1/04 12/31/04 7/1/04 - 12/31/04 7/1/04 - 12/31/04
------------- ------------- ----------------- -----------------
Growth Fund............. $ 1,000.00 $ 1,019.61 $ 5.65 1.11%
Income Fund............. 1,000.00 1,020.87 4.38 0.86%
Balanced Growth Fund.... 1,000.00 1,024.50 0.71 0.14%
Balanced Income Fund.... 1,000.00 1,024.35 0.87 0.17%
- --------------
* 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.
30
TRUSTEES AND OFFICERS
NEW COVENANT FUNDS
DECEMBER 31, 2004 (UNAUDITED)
TRUSTEES AND OFFICERS OF THE NEW COVENANT FUNDS
NUMBER OF
PORTFOLIOS IN OTHER
POSITION(S) TERM OF OFFICE AND PRINCIPAL FUND COMPLEX TRUSTEESHIPS/
HELD WITH LENGTH OF TIME OCCUPATION(S) DURING PAST 5 OVERSEEN BY DIRECTORSHIPS HELD
NAME AND AGE TRUST SERVED YEARS TRUSTEE BY TRUSTEE
- ---------------------- ----------- --------------- ------------------------------- ------------- ------------------
INDEPENDENT TRUSTEES
Gail C. Duree Trustee Since inception Investment Consultant, 4 None
Age: 58 Montview Boulevard Presbyterian
Church (1994 to
present); Women's
Foundation of Colorado
(1995 to present); Logan
School (1996 to present)
Rev. Donald B. Trustee Since inception Pastor, Sixth-Grace 4 None
Register Presbyterian Church, Chicago,
Age: 67 IL (1988 to present)
John D. Stuart Trustee February 2002 Independent 4 None
Age: 73 Financial Consultant
INTERESTED TRUSTEES
F. Kenneth Bateman President & Since inception Attorney, Gerber & Bateman, 4 None
Age:64 Trustee P.A. (1999 to present);
Attorney, Potter, Mills &
Bateman, P.A. (1997 to
1999); Trustee, Presbyterian
Church (U.S.A.) Foundation
(1995 to 2001)
Cynthia S. Gooch Trustee Since inception Retired; Trustee, 4 None
Age: 72 Presbyterian Church (U.S.A.)
Foundation (1997 to 2003)
EXECUTIVE OFFICERS
Dennis J. Murphy Vice November Executive Vice President and N/A N/A
Age: 62 President 2001 Chief Investment Officer,
Presbyterian Church (U.S.A.)
Foundation and New Covenant
Trust Company (2002-present);
Senior Vice President and Chief
Financial Officer,
Presbyterian Church (U.S.A.)
Foundation and New Covenant
Trust Company (1982 to 2000).
Anita J. Clemons Vice August 2003 Vice President and N/A N/A
200 E. Twelfth St. President Investment Officer, New
Suite C Jeffersonville, Covenant Trust Company (2000
IN 47130 - present).
Age: 50
Harry Harper Chief August 2004 Chief Compliance Officer, New N/A N/A
200 E. Twelfth St. Compliance Covenant Trust Company
Suite C Jeffersonville, Officer (2002-present); Chief
IN 47130 Compliance Officer Allegheny
Age: 60 Financial Group (2000- 2002);
Chief Compliance Officer
Keystone Financial
(1997-2000).
Bryan Haft Treasurer November Vice President of Financial N/A N/A
3435 Stelzer Rd. 2004 Services, BISYS Fund
Suite 1000 Services (1992 - present)
Columbus, OH 43219
Age: 39
Charles J. Daly Secretary February 2004 Counsel, BISYS Fund Services N/A N/A
3435 Stelzer Rd. (November 2003-present);
Suite 1000 Associate, Goodwin Proctor LLP
Columbus, OH 43219 (2001 -2003)
Age: 33
AlainaV. Metz Assistant February 2004 Vice President, Blue Sky N/A N/A
3435 Stelzer Rd., Secretary Compliance, BISYS Fund Services
Suite 1000 (1995 - present)
Columbus, OH 43219
Age: 36
31
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32
[NEW COVENANT FUNDS LOGO] SEMI-ANNUAL REPORT
DECEMBER 31, 2004
NEW COVENANT FUNDS
200 East Twelfth Street, Suite C
Jeffersonville, IN 47130
ITEM 2. CODE OF ETHICS.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
The registrant must briefly describe the nature of any amendment, during
the period covered by the report, to a provision of its code of ethics that
applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of
this Item. The registrant must file a copy of any such amendment as an
exhibit pursuant to Item 11(a)(1), unless the registrant has elected to
satisfy paragraph (f) of this Item by posting its code of ethics on its
website pursuant to paragraph (f)(2) of this Item, or by undertaking to
provide its code of ethics to any person without charge, upon request,
pursuant to paragraph (f)(3) of this Item.
If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of
ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that relates
to one or more items set forth in paragraph (b) of this Item, the
registrant must briefly describe the nature of the waiver, the name of the
person to whom the waiver was granted, and the date of the waiver.
During the period covered by the report, with respect to the registrant's
code of ethics that applies to its principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions; there have been no amendments to, nor any
waivers granted from, a provision that relates to any element of the code
of ethics definition enumerated in paragraph (b) of this Item 2.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of directors has
determined that the registrant either:
(i) Has at least one audit committee financial expert serving
on its audit committee; or
(ii) Does not have an audit committee financial expert serving
on its audit committee.
(2) If the registrant provides the disclosure required by
paragraph (a)(1)(i) of this Item, it must disclose the name of the
audit committee financial expert and whether that person is
"independent." In order to be considered "independent" for
purposes of this Item, a member of an audit committee may not,
other than in his or her capacity as a member of the audit
committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or
other compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as
defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-
2(a)(19)).
(3) If the registrant provides the disclosure required by
paragraph (a)(1)(ii) of this Item, it must explain why it does not
have an audit committee financial expert.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption Audit Fees, the aggregate fees billed
for each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
(d) Disclose, under the caption All Other Fees, the aggregate fees
billed in each of the last two fiscal years for products and services provided
by the principal accountant, other than the services reported in paragraphs (a)
through (c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) If greater than 50 percent, disclose the percentage of hours
expended on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were attributed to
work performed by persons other than the principal accountant's full-time,
permanent employees.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17CFR 240.10A-3), state whether or not
the registrant has a separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A)
of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the
registrant has such a committee, however designated, identify
each committee member. If the entire board of directors is
acting as the registrant's audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C.
78c(a)(58)(B)), so state.
(b) If applicable, provide the disclosure required by Rule
10A-3(d) under the Exchange Act (17CFR 240.10A-3(d)) regarding
an exemption from the listing standards for all audit
committees.
NOT APPLICABLE.
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule I - Investments in securities of unaffiliated issuers as of the
close of the reporting period as set forth in Section 210.12-12 of Regulation
S-X, unless the schedule is included as part of the report to shareholders filed
under Item 1 of this Form.
NOT APPLICABLE.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual
report on this Form N-CSR must, unless it invests exclusively in non-voting
securities, describe the policies and procedures that it uses to determine how
to vote proxies relating to portfolio securities, including the procedures that
the company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
NOT APPLICABLE.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
If the registrant is a closed-end management investment company that is filing
an annual report on this Form N-CSR, provide the information specified in
paragraphs (a) and (b) of this Item with respect to portfolio managers.
NOT APPLICABLE.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
If the registrant is a closed-end management investment company, provide the
information specified in paragraph (b) of this Item with respect to any purchase
made by or on behalf of the registrant or any "affiliated purchaser," as defined
in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares
or other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act (15
U.S.C. 781).
NOT APPLICABLE.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
NOT APPLICABLE.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive
and principal financial officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as
of a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph, based on the evaluation of these controls
and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
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 (I) ACCUMULATED AND COMMUNICATED TO
THE INVESTMENT COMPANY'S MANAGEMENT, INCLUDING ITS CERTIFYING OFFICERS, TO ALLOW
TIMELY DECISIONS REGARDING REQUIRED DISCLOSURE; AND (II) RECORDED, PROCESSED,
SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND
EXCHANGE COMMISSION'S RULES AND FORMS.
(b) Disclose any change 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 has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL
REPORTING 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) File the exhibits listed below as part of this Form. Letter or
number the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of
the disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit. NOT APPLICABLE -
ONLY EFFECTIVE FOR ANNUAL REPORTS.
(a)(2) A separate certification for each principal executive officer
and principal financial officer of the registrant as required by Rule 30a-2(a)
under the Act (17 CFR 270.30a-2). CERTIFICATIONS PURSUANT TO RULE 30a-2(a) ARE
ATTACHED HERETO.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. NOT APPLICABLE.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange
Act, provide the certifications required by rule 30a-2(b) under the Act as an
exhibit. A certification furnished pursuant to this paragraph will not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act, except to the extent that the registrant incorporates it by
reference. 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/ Bryan Haft
--------------------------------------
Bryan Haft, Treasurer
Date March 7, 2005
----------------------------
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/ Bryan Haft
--------------------------------
Bryan Haft, Treasurer
Date March 7, 2005
----------------------------
By (Signature and Title)* /s/ Robert E. Leech
-------------------------------------
Robert E. Leech, President
Date March 7, 2005
----------------------------
* Print the name and title of each signing officer under his or her signature.