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
--------------------------------------------
New Covenant Funds
- -------------------------------------------------------------------------------
(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
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 614-470-8000
---------------------------
Date of fiscal year end: June 30, 2005
-------------------------
Date of reporting period: June 30, 2005
------------------------
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.
Include a copy of the report transmitted to stockholders pursuant to
Rule 30e-1 under the Act (17 CFR 270.30e-1).
NEW COVENANT FUNDS
ANNUAL REPORT
New Covenant Growth Fund
New Covenant Income Fund
New Covenant Balanced Growth Fund
New Covenant Balanced Income Fund
[NEW COVENANT FUNDS LOGO]
JUNE 30, 2005
YOU CAN GET FREE COPIES OF REPORTS AND THE SAI, OR REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING A BROKER THAT SELLS THE
FUNDS, OR BY CONTACTING THE FUNDS AT:
NEW COVENANT FUNDS
3435 STELZER ROAD
COLUMBUS, OH 43219
TELEPHONE: 1-800-858-6127
INTERNET: http://www.newcovenantfunds.com
YOU CAN REVIEW AND GET COPIES OF THE FUNDS' REPORTS AND SAI AT THE PUBLIC
REFERENCE ROOM OF THE SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT-ONLY
COPIES:
- - FOR A DUPLICATING FEE, BY WRITING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, DC 20549-6009 OR CALLING 1-202-942-8090, OR BY
ELECTRONIC REQUEST, BY E-MAILING THE SEC AT THE FOLLOWING ADDRESS:
publicinfo@sec.gov
- - FREE FROM THE COMMISSION'S WEBSITE AT http://www.sec.gov.
TABLE OF CONTENTS
Shareholder Letter ........................................................ 2
Portfolios of Investments ................................................. 6
Statements of Assets and Liabilities ...................................... 18
Statements of Operations .................................................. 19
Statements of Changes in Net Assets ....................................... 20
Financial Highlights ...................................................... 22
Notes to Financial Statements ............................................. 26
Report of Independent Registered Public Accounting Firm ................... 33
Supplemental Data ......................................................... 34
Trustees and Officers ..................................................... 36
TO OUR SHAREHOLDERS
NEW COVENANT FUNDS
JUNE 30, 2005
Dear Shareholders:
The U.S. economy strengthened during the 12-month period ended June 30, 2005.
The stock market was very volatile, however, as investors reacted to differing
reports about the direction of the economy, interest rates, energy prices and
political factors. Long-term bonds performed relatively well in that
environment, while prices on short-term bonds fell substantially.
The economy benefited both from strong consumer spending and from gradually
rising business spending. Those trends helped counter the effects of higher
energy prices, which typically drag on the economy by reducing money available
for investment and other types of consumption. Meanwhile, low mortgage rates
contributed to a strong housing market. That trend enhanced Americans' sense of
financial comfort, offsetting the effects of slow wage growth and higher
gasoline prices.
Corporations earlier in the decade had streamlined operations and reduced debt.
Those efficiencies helped translate strengthening demand into strong earnings
and cash flow, and contributed to historically high corporate cash holdings.
Corporations began to deploy that cash during this period in mergers and
acquisitions and other shareholder-friendly initiatives.
The Federal Reserve Board (the "Fed") was concerned throughout the period about
the prospect for higher inflation, and sought to prevent an inflation up-tick
by removing excess monetary stimulus from the economy. Beginning with a rate
hike on June 30, 2004, the Fed raised its target federal funds rate nine times
during the period, for a total increase of two and one-quarter percentage
points.
These financial cross-currents contributed to a choppy stock market. Stocks
slumped in the summer of 2004 as investors worried about a number of factors,
including political uncertainty due to the close electoral campaign, conditions
in Iraq, rising energy prices and slow employment gains. The market then rallied
strongly during the fourth quarter of 2004 as many of those factors improved:
Employment appeared to gain strength, the resolution of the election provided
political clarity and oil prices declined.
Stocks fell again during the first calendar quarter of 2005. Investors were
concerned about the possibility that resurgent energy prices would translate
into higher inflation and reduce consumers' spending power. Their fears
appeared to be confirmed in March 2005, when the economy slowed and inflation
picked up. Stocks rebounded later in the spring, however, as stronger economic
data, healthy profit reports and solid demand--all of it accompanied by
relatively tame inflation--convinced investors that weakness in March had
represented only a temporary soft patch in the economy.
Small caps outperformed larger stocks for the period as a whole, due to
small-company shares' dramatically stronger returns during the first half of
the year. Large-cap shares assumed market leadership during the first half of
2005, however, and generated superior returns for the final six months of the
period. Value and growth stocks experienced a similar dynamic: Value stocks led
growth shares for the period as a whole, but growth outperformed late in the
period.
Yields on short-term bonds rose in line with the Fed's interest-rate increases,
causing prices on those bonds to fall. Long-term bond yields declined slightly
for the 12-month period, however. That decline might have resulted from a number
of factors, including a benign long-term inflation outlook and strong overseas
demand for long-term Treasury bonds. Mortgage-backed and corporate bonds
generally outperformed government securities. High-yield bonds were very
volatile. They led the fixed-income markets during much of the period, but fell
quickly in March after major automakers announced weak earnings.
THE NEW COVENANT GROWTH FUND
The New Covenant Growth Fund gained 7.38% during the 12-month period ended June
30, 2005, compared to a 6.32% return for the Fund's benchmark, the Standard &
Poor's 500 Index.(1)
During this fiscal year two new managers were added to handle this Fund's
growth allocation. Mazama Capital Management specializes in small- and mid-cap
growth stocks, while Santa Barbara Asset Management focuses on large-cap growth
shares. We felt that managers with specific expertise in those sections of the
market could best serve shareholders.
The Fund's core allocation, managed by Wellington Management Company,
outperformed the stock market(1) and boosted performance against the benchmark.
The Fund's relative performance also benefited from our decision to over-weight
value stocks during the first half of the period. We added to the Fund's growth
stake during 2005, bringing it even with the Fund's value allocation. That
change also helped relative returns, as growth stocks assumed market leadership
late in the period.(2)
We added an emerging-markets allocation to the Fund's portfolio, in order to
provide opportunity for greater growth. That shift boosted performance against
the S&P, as emerging markets generally performed well. The Fund's international
exposure as a whole boosted returns during the first half of the period, as the
dollar lost ground to foreign currencies, but dragged on relative returns during
the second half of the period as the dollar strengthened.(2)
THE NEW COVENANT INCOME FUND
The New Covenant Income Fund returned 6.02% during the 12 months ended June 30,
2005, compared to a 6.80% gain for the Lehman Brothers Aggregate Bond Index.(3)
We reduced the Fund's average duration just prior to this fiscal year to a
position shorter than that of the benchmark, in order to protect against rising
interest rates. Rates on the longer-term issues in which this Fund primarily
invests generally declined or were flat, however, so the shorter average
duration dragged on relative performance.(2)
2
TO OUR SHAREHOLDERS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
The Fund held a higher allocation than the benchmark in mortgage-backed
securities, which boosted relative gains. The Fund's underweight position in
Treasury bonds also helped relative performance, as Treasury issues lagged other
fixed-income securities. We maintained the Fund's bias toward very high-quality
issues in other sectors. That emphasis on quality hurt performance early in the
period, when low-quality bonds led the market, but benefited relative
performance late in the fiscal year as higher-quality bonds assumed
leadership.(2)
THE NEW COVENANT BALANCED GROWTH FUND
The New Covenant Balanced Growth Fund gained 6.68% during the 12 months ended
June 30, 2005, compared to a 6.62% return for a benchmark composed of a 60%
weighting in the S&P 500(1) and a 40% weighting in the Lehman Brothers Aggregate
Bond Index(3).
This Fund is comprised of a combination of the New Covenant Growth Fund and the
New Covenant Income Fund, with a neutral allocation of 60% of assets in stocks
and 40% in bonds. We allowed the Fund's Growth Fund allocation to grow during
the period, from 62% of assets at the beginning of the period to roughly 65% at
the end. That overweight stock position helped this Fund outperform its
benchmark, as stocks' returns slightly exceeded those of bonds during this
period.(2)
THE NEW COVENANT BALANCED INCOME FUND
The New Covenant Balanced Income Fund gained 6.32% for the year ended June 30,
2005. That return compared to a 6.74% gain for the Fund's benchmark, a composite
index with a 65% weighting in the Lehman Brothers Aggregate Bond Index(3) and a
35% weighting in the S&P 500(1).
The New Covenant Balanced Income Fund's neutral allocation calls for investing
65% of assets in the Income Fund and 35% of assets in the Growth Fund. The Fund
during this period held a slightly overweight stock allocation, with roughly 38%
of the portfolio allocated to the stock market. That overweight position in
stocks boosted relative returns, as stocks generally outperformed bonds. The
Fund's bond allocation lagged the fixed-income benchmark, however, due to its
shorter average duration. That trait hurt relative returns for the Balanced
Income Fund.(2)
/s/ Dennis J. Murphy
Dennis J. Murphy
Executive Vice President
and Chief Investment Officer
NCF 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 PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END,
PLEASE CALL 877-835-4531 OR VISIT OUR WEBSITE AT www.NewCovenantFunds.com.
(1) The Standard & Poor's 500 Composite Index of stocks is an unmanaged,
capitalization weighted index that measures the performance of 500
large-capitalization stocks representing all major industries. It is
not possible to invest directly in any index.
(2) 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.
PORTFOLIO ALLOCATION (UNAUDITED) (SUBJECT TO CHANGE)
- --------------------------------------------------------------------------------
GROWTH FUND:
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
- --------------------------------------------------------------------------------
Financials 19.9%
Information Technology 17.7%
Health Care 17.3%
Consumer Discretionary 13.7%
Industrials 10.7%
Energy 7.5%
Consumer Staples 6.3%
Telecommunications 2.3%
Materials 2.3%
Utilities 2.3%
- --------------------------------------------------------------------------------
Total 100.0%
BALANCED GROWTH FUND:
INCOME FUND:
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
- --------------------------------------------------------------------------------
Government Agency/MBS 33.0%
Asset Backed 27.0%
Corporates 17.0%
Treasuries 14.0%
Cash 9.0%
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Total 100.0%
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
- --------------------------------------------------------------------------------
Investment Companies 98.5%
Cash Equivalents 1.5%
- --------------------------------------------------------------------------------
Total 100.0%
BALANCED INCOME FUND:
PERCENTAGE OF
SECURITY ALLOCATION MARKET VALUE
- --------------------------------------------------------------------------------
Investment Companies 98.6%
Cash Equivalents 1.4%
- --------------------------------------------------------------------------------
Total 100.0%
3
TO OUR SHAREHOLDERS
- --------------------------------------------------------------------------------
JUNE 30, 2005
HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN
NEW COVENANT GROWTH FUND*
VS.
THE S&P 500 INDEX+
[GRAPH]
Growth Fund S&P 500 Index
6/95 10000 10000
10784 10795
11208 11438
11935 12060
6/96 12271 12605
12640 12990
13399 14078
13388 14446
6/97 15453 16973
16293 18250
15955 18774
17820 21394
6/98 17740 22100
15083 19902
17754 24140
17898 25343
6/99 19689 27130
18513 25436
21046 29220
21461 29891
6/00 20945 29096
20790 28815
19436 26560
17378 23411
6/01 18363 24781
15439 21144
17256 23403
17319 23468
6/02 15180 20324
12491 16813
13465 18230
12857 17656
6/03 14851 20375
15459 20914
17349 23461
17791 23859
6/04 17794 24268
17274 23813
19037 26012
18655 25452
6/05 19107 25801
+ The Standard & Poor's 500 Index is an unmanaged, capitalization weighted
index that measures the performance of 500 large-capitalization stocks
representing all major industries. Investors cannot invest directly in an
index, although they may invest in the underlying securities.
1 YEAR 3 YEAR 5 YEAR 10 YEAR
RETURN** RETURN** RETURN** RETURN**
Growth Fund 7.38% 7.97% -1.82% 6.69%
S&P 500 Index 6.32% 8.28% -2.37% 9.94%
JUNE 30, 2005
HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN
NEW COVENANT INCOME FUND*
VS.
THE LEHMAN BROTHERS AGGREGATE BOND INDEX++
[GRAPH]
Lehman Brothers
Income Fund Aggregate Bond Index
6/95 10000 10000
10217 10196
10698 10631
10508 10442
6/96 10567 10502
10770 10696
11137 11017
11087 10955
6/97 11441 11358
11844 11735
12150 12080
12291 12268
6/98 12560 12555
12816 13086
12955 13130
12840 13065
6/99 12707 12950
12770 13038
12797 13022
13007 13309
6/00 13158 13541
13530 13949
14050 14536
14475 14977
6/01 14515 15061
15116 15756
15130 15763
15109 15778
6/02 15670 16361
16357 17110
16582 17380
16796 17622
6/03 17180 18062
17167 18036
17183 18093
17616 18574
6/04 17179 18120
17700 18699
17827 18878
17741 18787
6/05 18213 19353
++ The Lehman Brothers Aggregate Bond Index is representative of intermediate
and long-term government and investment grade corporate debt securities.
Investors cannot invest directly in an index, although they may invest in
the underlying securities.
1 YEAR 3 YEAR 5 YEAR 10 YEAR
RETURN** RETURN** RETURN** RETURN**
Income Fund 6.02% 5.14% 6.72% 6.18%
Lehman Brothers
Aggregate Bond Index 6.80% 5.76% 7.40% 6.83%
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL
RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT
AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST. TO OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END,
PLEASE CALL 877-835-4531 OR VISIT OUR WEBSITE AT www.NewCovenantFunds.com.
(*) The performance information for all of the New Covenant Funds reflects
performance prior to the July 1, 1999 inception date of the Funds. It
represents performance records of the private pools previously managed by
the Presbyterian Church (U.S.A.) Foundation, the predecessor entity to the
Advisor. These private pools had investment objectives and policies in all
material respects equivalent to those of the Funds. They were not subject
to the requirements of the Investment Company Act of 1940 or the Internal
Revenue Code of 1986, which may adversely affect performance results. The
performance has been restated to reflect the total expenses of the Funds.
(**) Returns shown are average annual returns, assuming reinvestment of all
dividends and distributions.
4
TO OUR SHAREHOLDERS
- --------------------------------------------------------------------------------
JUNE 30, 2005
HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN
NEW COVENANT BALANCED GROWTH FUND*
VS.
THE BLENDED S&P 500/AGGREGATE BOND INDEX+
[GRAPH]
Balanced
Growth Fund Blended S&P 500/Aggregate Index
6/95 10000 10000
10552 10554
10957 11113
11356 11391
6/96 11581 11726
11878 12033
12479 12783
12481 12961
6/97 13774 14494
14461 15350
14403 15804
15500 17212
6/98 15590 17717
14369 16980
15876 19120
15896 19652
6/99 16805 20411
16209 19695
17540 21414
17856 21923
6/00 17669 21723
17779 21872
17344 21201
16751 19930
6/01 17138 20685
15781 19185
16802 20412
16839 20465
6/02 15803 19079
14386 17390
15142 18408
14782 18162
6/03 16292 20004
16688 20318
17961 21811
18416 22266
6/04 18238 22275
18106 22309
19273 23620
18992 23275
6/05 19457 23750
The Blended S&P 500/Aggregate Bond Index is a composite index composed of 60%
S&P 500 Index and 40% Lehman Brothers Aggregate Bond Index. Investors cannot
invest directly an index, although they may invest in the underlying securities.
1 YEAR 3 YEAR 5 YEAR 10 YEAR
RETURN** RETURN** RETURN** RETURN**
Balanced Growth Fund 6.68% 7.18% 1.95% 6.88%
Blended S&P 500/
Aggregate Bond Index 6.62% 7.57% 1.80% 9.03%
JUNE 30, 2005
HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN
NEW COVENANT BALANCED INCOME FUND*
VS.
BLENDED S&P 500/AGGREGATE BOND INDEX++
[GRAPH]
Balanced
Income Fund Blended S&P 500/Aggregate Index
6/95 10000 10000
10413 10405
10852 10911
11003 10988
6/96 11164 11202
11421 11461
11918 12022
11893 12093
6/97 12737 13107
13298 13744
13412 14152
14070 14974
6/98 14240 15378
13698 15282
14575 16410
14532 16641
6/99 14957 16954
14670 16654
15382 17483
15647 17895
6/00 15615 17928
15842 18229
15840 18219
15705 17805
6/01 15940 18244
15470 17804
16024 18469
16038 18507
6/02 15692 18047
15142 17439
15705 18159
15556 18122
6/03 16633 19376
16862 19545
17641 20403
18098 20878
6/04 17810 20670
17938 20963
18681 21762
18471 21535
6/05 18936 22062
++ The Blended S&P 500/Aggregate Bond Index is a composite index composed of
35% S&P 500 Index and 65% Lehman Brothers Aggregate Bond Index. Investors
cannot invest directly in an index, although they may invest in the
underlying securities.
1 YEAR 3 YEAR 5 YEAR 10 YEAR
RETURN** RETURN** RETURN** RETURN**
Balanced Income Fund 6.32% 6.46% 3.93% 6.59%
Blended S&P 500/
Aggregate Bond Index 6.74% 6.92% 4.24% 8.23%
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL
RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT
AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST. TO OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END,
PLEASE CALL 877-835-4531 OR VISIT OUR WEBSITE AT www.NewCovenantFunds.com.
* The performance information for all of the New Covenant Funds reflects
performance prior to the July 1, 1999 inception date of the Funds. It
represents performance records of the private pools previously managed by
the Presbyterian Church (U.S.A.) Foundation, the predecessor entity to the
Advisor. These private pools had investment objectives and policies in all
material respects equivalent to those of the Funds. They were not subject
to the requirements of the Investment Company Act of 1940 or the Internal
Revenue Code of 1986, which may adversely affect performance results. The
performance has been restated to reflect the total expenses of the Funds.
** Returns shown are average annual returns, assuming reinvestment of all
dividends and distributions.
5
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
JUNE 30, 2005
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCKS (98.2%):
ADVERTISING (1.1%):
284,000 Interpublic Group of Cos., Inc.(b)(L) ........... $3,459,120
35,900 Lamar Advertising Co.(b)(L) ..................... 1,535,443
17,300 Monster Worldwide, Inc.(b) ...................... 496,164
52,800 Omnicom Group, Inc.(L) .......................... 4,216,608
5,100 Ventiv Health, Inc.(b)(L) ....................... 98,328
-----------
9,805,663
-----------
AEROSPACE (0.3%):
56,000 United Technologies Corp. ....................... 2,875,600
-----------
AUTOMOTIVE (1.0%):
6,600 American Axle & Manufacturing Hldgs, Inc.(L) .... 166,782
5,500 Bayerische Motoren Werke AG ..................... 251,997
15,000 Bridgestone Corp. ............................... 289,060
12,500 DaimlerChrysler AG .............................. 508,413
82,000 Dana Corp. ...................................... 1,230,820
28,200 Genuine Parts Co.(L) ............................ 1,158,738
91,500 Honda Motor Co. Ltd. ............................ 2,251,815
10,600 Hyundai Motor Co., Ltd. - GDR ................... 294,872
97,000 Nissan Motors ................................... 961,332
12,900 Noble International, Ltd. ....................... 303,795
2,800 Renault SA ...................................... 247,089
5,320 Reynolds & Reynolds Co. ......................... 143,800
37,000 Suzuki Motor Corp. .............................. 582,101
14,580 Tenneco Automotive, Inc.(b) ..................... 242,611
8,200 Titan International, Inc.(L) .................... 114,636
4,300 Volkswagen AG ................................... 196,496
-----------
8,944,357
-----------
BANKING (6.3%):
60,679 ABN AMRO Holdings NV ............................ 1,494,756
21,020 Australia and New Zealand Banking
Group Ltd. ...................................... 348,374
1,190 BancFirst(L) .................................... 103,518
84,000 Banco Bilbao Vizcaya ............................ 1,297,470
62,600 Banco Santander Central Hispano SA .............. 726,709
350,500 Bank Central Asia PT(b) ......................... 129,415
256,580 Bank of America Corp. ........................... 11,702,615
34,000 Bank of Yokohama, Ltd. .......................... 196,715
23,900 Banque Nationale de Paris ....................... 1,640,395
16,500 Barclays Plc .................................... 164,270
16,000 Bayerische Vereins Ag(b) ........................ 416,414
15,800 City Holding Co.(L) ............................. 577,016
46,000 Comerica, Inc. .................................. 2,658,800
13,714 Credit Suisse Group ............................. 541,300
26,900 Credito Italiano ................................ 142,217
4,300 Deutsche Bank AG ................................ 336,671
8,200 East West Bancorp, Inc. ......................... 275,438
2,700 Farmers Capital Bank Corp.(L) ................... 93,528
3,920 First Citizens Bancshares, Inc., Class A(L) ..... 566,636
4,900 Fortis .......................................... 136,009
9,100 Fremont General Corp.(L) ........................ 221,403
12,600 HDFC Bank, Ltd. - ADR ........................... 586,026
18,370 Holderbank Financiere Glarus .................... 1,118,810
34,100 HSBC Holdings Plc ............................... 543,918
2,680 Hudson United Bancorp(L) ........................ 96,748
66,756 JPMorgan Chase & Co. ............................ 2,357,822
77,400 KeyCorp(L) ...................................... 2,565,810
44,130 Kookmin Bank - ADR .............................. 2,011,445
48,700 Lloyds TSB Group Plc ............................ 412,838
12,540 MBT Financial Corp.(L) .......................... 241,395
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
71 Mitsubishi Tokyo Financial Group, Inc. .......... $603,042
4,500 National Bank of Canada ......................... 199,955
114,000 National City Corp. ............................. 3,889,680
785,500 PT Bank Mandiri ................................. 120,846
255,000 Public Bank Berhad .............................. 449,605
21,400 R & G Financial Corp ............................ 378,566
43,600 Royal Bank of Scotland Group Plc(R) ............. 1,317,447
8,000 Santander BanCorp ............................... 200,480
3,600 Societe Generale ................................ 366,711
25,000 Standard Bank ................................... 242,367
31,200 Standard Chartered Plc .......................... 570,353
247 Sumitomo Mitsui Financial Group ................. 1,672,082
27,400 SunTrust Banks, Inc. ............................ 1,979,376
13,100 SVB Financial Group(b)(L) ....................... 627,490
4,000 Taylor Capital Group Inc.(L) .................... 157,000
15,330 TriCo Bancshares(L) ............................. 342,472
30,000 Turkiye Garanti Bankasi AG(b) ................... 129,407
115,000 U.S. Bancorp .................................... 3,358,000
254 UFJ Holdings, Inc.(b) ........................... 1,325,138
17,000 Unibanco - GDR .................................. 656,540
39,400 Wells Fargo & Co. ............................... 2,426,252
4,800 Wintrust Financial Corp.(L) ..................... 251,280
3,544 Yapi Ve Kredi Bankasi AS(b) ..................... 13,559
-----------
54,982,129
-----------
BROADCASTING AND MEDIA (3.5%):
14,800 Citadel Broadcasting Co.(b)(L) .................. 169,460
6,000 CKX, Inc.(b)(L) ................................. 77,190
83,272 Comcast Corp. New Class A(b) .................... 2,556,450
7,600 Comcast Corp. Special Class A(b) ................ 227,620
17,040 Cumulus Media, Inc.(b) .......................... 200,731
247,500 DIRECTV Group, Inc.(b)(L) ....................... 3,836,250
13,600 Dreamworks Animation SKG, Inc.(b) ............... 356,320
28,300 Gannett Co., Inc.(L) ............................ 2,012,979
8,800 Grupo Televisa .................................. 546,392
27,178 Liberty Global Inc.(b)(L) ....................... 1,268,397
379,000 Liberty Media Corp.(b) .......................... 3,862,010
8,300 Radio One, Inc.(b) .............................. 105,659
650,650 Time Warner, Inc.(b) ............................ 10,872,362
148,000 Viacom, Inc., Class B ........................... 4,738,960
-----------
30,830,780
-----------
CHEMICALS (0.6%):
10,100 Cad Potash Corporation of Saskatchewan .......... 964,635
12,500 Dow Chemical Co. ................................ 556,625
20,900 E.I. du Pont de Nemours and Co. ................. 898,909
55,000 Lyondell Chemical Co.(L) ........................ 1,453,100
5,900 Nitto Denko Corp. ............................... 338,695
2,700 Norsk Hydro ASA ................................. 247,885
50,000 Sumitomo Chemical Co. ........................... 230,165
1,662 Syngenta AG ..................................... 171,170
10,500 Takeda Chemical Industries ...................... 521,256
-----------
5,382,440
-----------
COMMERCIAL SERVICES (1.7%):
15,569 Aaron Rents, Inc.(L) ............................ 387,512
139,200 Accenture Ltd.(b)(L) ............................ 3,155,665
14,000 Apollo Group, Inc., Class A(b) .................. 1,095,080
16,400 Avocent Corp.(b) ................................ 428,696
10,390 CSG Systems International, Inc.(b) .............. 197,202
7,420 Cyberoptics Corp.(b) ............................ 96,460
10,700 Education Management Corp.(b) ................... 360,911
11,080 Gevity HR, Inc.(L) .............................. 221,932
See accompanying notes to financial statements.
6
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
JUNE 30, 2005
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
4,100 Global Payments, Inc.(L) ........................... $277,980
6,900 Heidrick & Struggles Int'l., Inc.(b)(L) ............ 179,952
45,980 IKON Office Solutions, Inc. ........................ 437,270
6,600 ITT Educational Services, Inc.(b)(L) ............... 352,572
17,390 John H. Harland Co.(L) ............................. 660,820
5,900 McGrath Rentcorp(L) ................................ 139,830
59,000 Pitney Bowes, Inc. ................................. 2,569,450
6,600 Pre-Paid Legal Services, Inc.(L) ................... 294,690
14,500 Rent-Way, Inc.(b)(L) ............................... 142,680
5,600 Robert Half International, Inc.(L) ................. 139,832
2,300 The Corporate Executive Board Co. .................. 180,159
21,300 W.W. Grainger, Inc. ................................ 1,167,027
64,900 Xerox Corp.(b) ..................................... 894,971
39,700 XM Satellite Radio Hldgs, Inc., Class A (b)(L)...... 1,336,302
-----------
14,716,993
-----------
COMPUTER SERVICES AND SOFTWARE (7.0%):
55,940 Adobe Systems, Inc.(L) ............................. 1,601,003
32,900 Affiliated Computer Svcs, Inc., Class A(b)(L) ...... 1,681,190
4,620 ANSYS, Inc.(b)(L) .................................. 164,056
39,900 Automatic Data Processing, Inc. .................... 1,674,603
1,400 Avid Technology, Inc.(b) ........................... 74,592
392,600 Cisco Systems, Inc.(b) ............................. 7,502,586
2,700 Dassault Systemes SA ............................... 130,898
187,600 Dell, Inc.(b) ...................................... 7,412,076
22,300 DST Systems, Inc.(b)(L) ............................ 1,043,640
12,100 Earthlink, Inc.(b)(L) .............................. 104,786
7,870 Epicor Software Corp.(b) ........................... 103,884
1,300 F5 Networks, Inc.(a)(b) ............................ 61,406
11,000 GSI Commerce Inc.(b)(L) ............................ 184,250
103,000 Hewlett Packard Co. ................................ 2,421,530
3,600 Imation Corp.(L) ................................... 139,644
4,200 Infosys Technologies Ltd.(L) ....................... 325,374
8,700 Infousa, Inc. ...................................... 101,790
101,600 International Business Machines Corp. .............. 7,538,720
10,240 Intervideo, Inc.(b)(L) ............................. 147,251
10,900 Intervoice, Inc.(b)(L) ............................. 94,067
8,390 Komag, Inc.(b)(L) .................................. 238,024
22,900 Lexmark International, Inc.(b) ..................... 1,484,607
12,100 Manhattan Associates, Inc.(b) ...................... 232,441
99,500 Maxtor Corp.(b)(L) ................................. 517,400
26,200 Mentor Graphics Corp.(b) ........................... 268,550
489,400 Microsoft Corp. .................................... 12,156,696
4,670 Microstrategy, Inc.(b)(L) .......................... 247,697
373,800 Oracle Corp.(b) .................................... 4,934,160
37,700 Parametric Technology Corp.(b) ..................... 240,526
30,000 Perot Systems Corp., Class A(b)(L) ................. 426,600
5,120 Progress Software Corp.(b)(L) ...................... 154,368
51,000 Red Hats, Inc.(b)(L) ............................... 668,100
4,700 SAP AG ............................................. 820,978
2,400 SAP AG - ADR(L) .................................... 103,920
8,300 SERENA Software, Inc.(b)(L) ........................ 160,190
4,965 SS&C Technologies, Inc.(L) ......................... 157,291
56,100 SunGard Data Systems(b) ............................ 1,973,037
7,370 Sybase, Inc.(b)(L) ................................. 135,240
8,700 Syntel, Inc.(L) .................................... 139,461
6,300 Take-Two Interactive Software, Inc.(b)(L) .......... 160,335
8,680 Transaction Systems Architects, Inc.(b) ............ 213,788
3,500 Trend Micro, Inc. .................................. 124,786
11,300 Trident Microsystems(b)(L) ......................... 256,397
23,000 Trizetto Group, Inc.(b)(L) ......................... 322,230
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
35,730 United Online, Inc.(L) ............................. $388,028
62,100 Veritas Software Corp.(b) .......................... 1,515,240
16,400 Wipro, Ltd. - ADR(L) ............................... 342,104
40,400 Xilinx, Inc.(L) .................................... 1,030,200
-----------
61,919,740
-----------
CONSTRUCTION AND BUILDING MATERIALS (2.3%):
32,500 Bouygues SA ........................................ 1,347,839
3,100 Brookfield Homes Corp.(L) .......................... 141,360
18,581 CRH Plc ............................................ 489,435
105,400 D. R. Horton, Inc. ................................. 3,964,094
4,310 Eagle Materials(L) ................................. 399,063
6,900 Granite Construction, Inc.(L) ...................... 193,890
55,100 Hovnanian Enterprises - A(b)(L) .................... 3,592,520
33,000 Jacobs Engineering Group, Inc.(b) .................. 1,856,580
37,100 Lafarge North America, Inc. ........................ 2,316,524
2,400 Lafarge SA ......................................... 218,908
24,800 Lennar Corp., Class A(L) ........................... 1,573,560
3,500 Quanex Corp. ....................................... 185,535
6,740 Ryland Group, Inc. ................................. 511,364
41,000 Sekisui House Ltd. ................................. 414,848
18,330 Standard-Pacific Corp.(L) .......................... 1,612,124
18,000 The Stanley Works .................................. 819,720
6,200 WCI Communities, Inc.(b)(L) ........................ 198,586
-----------
19,835,950
-----------
CONSUMER PRODUCTS (3.8%):
60,309 Amcor Ltd. ......................................... 307,901
27,000 Cintas Corp.(L) .................................... 1,042,200
39,200 General Mills, Inc. ................................ 1,834,168
123,800 Gillette Co. ....................................... 6,267,994
19,800 Herman Miller, Inc. ................................ 610,632
11,200 HNI Corp. .......................................... 572,880
14,100 Industria de Diseno Textil, SA ..................... 363,210
8,490 K-Swiss, Inc.(L) ................................... 274,567
75,200 Kimberly-Clark Corp. ............................... 4,706,768
5,700 L'OREAL SA ......................................... 409,509
258,000 Li & Fung Ltd. ..................................... 536,048
3,400 Michelin ........................................... 207,227
18,100 Nike, Inc., Class B ................................ 1,567,460
19,000 Nikon Corp ......................................... 215,399
7,570 Nu Skin Enterprises, Inc.(L) ....................... 176,381
8,200 Polo Ralph Lauren Corp. ............................ 353,502
175,100 Procter & Gamble Co.(L) ............................ 9,236,524
34,680 Sherwin-Williams Co. ............................... 1,633,081
4,820 Stanley Furniture Co., Inc. ........................ 118,379
27,000 Timberland Co., Class A(b)(L) ...................... 1,045,440
21,520 Toro Co.(L) ........................................ 830,887
5,100 Tupperware Corp.(L) ................................ 119,187
3,700 UniFirst Corp. ..................................... 149,998
3,500 Unilever Plc ....................................... 227,303
10,700 Wolseley Plc ....................................... 225,134
23,000 Yakult Honsha Co., Ltd. ............................ 415,200
-----------
33,446,979
-----------
DIVERSIFIED OPERATIONS (4.2%):
59,800 3M Co. ............................................. 4,323,540
7,600 Acuity Brands, Inc.(L) ............................. 195,244
44,480 Brambles Industries Ltd. ........................... 276,911
122,400 Cendant Corp. ...................................... 2,738,088
165,928 First Data Corp. ................................... 6,660,350
339,600 General Electric Co. ............................... 11,767,140
4,940 Harsco Corp. ....................................... 269,477
See accompanying notes to financial statements.
7
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
JUNE 30, 2005
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
4,400 Lincoln Educational Services(b)(L) ................. $89,100
45,100 Mitsubishi Corp. ................................... 613,871
23,000 Mitsui & Co. ....................................... 217,980
3,300 Shin-Etsu Chemical Co., Ltd. ....................... 125,399
99,000 Sumitomo Corp. ..................................... 794,395
22,900 Teleflex, Inc.(L) .................................. 1,359,573
131,000 Thermo Electron Corp.(b) ........................... 3,519,970
127,500 Tyco International Ltd. ............................ 3,723,000
6,803 Wesfarmers Ltd. .................................... 207,407
-----------
36,881,445
-----------
ELECTRONICS (4.0%):
4,100 Ade Corp.(b)(L) .................................... 115,005
9,700 Advantest Corp. .................................... 717,059
21,199 Agere Systems Inc.(b)(L) ........................... 254,388
42,600 Altera Corp.(b) .................................... 844,332
28,200 Ameren Corp. ....................................... 1,559,460
21,400 Amis Holdings, Inc.(b)(L) .......................... 285,476
24,300 Amkor Technologies, Inc.(b)(L) ..................... 109,350
92,100 Amphenol Corp., Class A ............................ 3,699,657
12,600 ASML Holding N.V.(b) ............................... 198,586
3,610 Bel Fuse, Inc., Class B(L) ......................... 110,322
5,000 Cabot Microelectronics Corp.(b)(L) ................. 144,950
66,000 Conexant Systems, Inc.(b) .......................... 106,260
22,680 Cree Research, Inc.(b)(L) .......................... 577,660
13,440 Diodes, Inc.(b) .................................... 419,328
68,900 Emerson Electric Co. ............................... 4,315,206
30,500 Fairchild Semiconductor Int'l., Inc.(b)(L) ......... 449,875
7,800 Fanuc Co Ltd. ...................................... 496,344
185,500 Flextronics International Ltd.(b) .................. 2,450,455
3,600 FLIR Systems, Inc.(b)(L) ........................... 107,424
112,500 Freescale Semicondutor Inc., Class A(b)(L) ......... 2,363,625
3,000 Hirose Electric Co. Ltd. ........................... 330,626
64,549 Hon Hai Precision Industry Co. Ltd. ................ 671,716
10,000 Hubbell, Inc., Class B ............................. 441,000
23,700 Infineon Technologies AG(b) ........................ 222,340
27,600 Intersil Corp., Class A ............................ 518,052
800 Keyence Corp. ...................................... 179,511
104,800 Lam Research Corp.(b) .............................. 3,032,912
29,100 Lattice Semiconductor Corp.(b) ..................... 129,204
27,690 MEMC Electronic Materials, Inc.(b)(L) .............. 436,671
10,100 Methode Electronics, Inc. .......................... 119,887
20,600 Micrel, Inc.(b) .................................... 237,312
6,470 MTS Systems Corp. .................................. 217,263
7,200 Multi-Fineline Electronix Inc.(b)(L) ............... 132,480
3,700 Murata Manufacturing Co. Ltd. ...................... 188,690
35,000 NEC Corp. .......................................... 189,548
11,000 Nippon Electric Glass Co., Ltd. .................... 166,405
107 Nippon Telegraph & Telephone Corp. ................. 458,751
18,500 Novellus Systems, Inc.(b) .......................... 457,135
13,600 Omnivision Technologies, Inc.(b)(L) ................ 184,824
7,300 Omron Corp. ........................................ 161,102
101,200 On Semiconductor Corp.(b) .......................... 465,520
6,300 Photronics, Inc.(b) ................................ 147,042
11,200 Pixelworks, Inc.(b)(L) ............................. 96,096
13,100 Power-One, Inc.(b)(L) .............................. 82,661
5,200 Rohm Co. Ltd. ...................................... 502,211
9,604 Samsung Electronics - GDR .......................... 2,295,356
8,900 Sigmatel, Inc.(b) .................................. 152,724
8,200 Sony Corp. ......................................... 282,733
13,100 STMicroelectronics NV .............................. 210,272
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
5,500 Synopsis, Inc.(b) .................................. $91,685
138,820 Taiwan Semiconductor ADR ........................... 1,266,034
3,600 TDK Corp. .......................................... 245,654
47,700 Teradyne, Inc.(b)(L) ............................... 570,969
11,700 Tokyo Electron Ltd. ................................ 619,903
2,400 Veeco Instruments, Inc.(b)(L) ...................... 39,072
-----------
34,868,123
-----------
ENERGY (3.3%):
85,600 American Electric Power Co., Inc. .................. 3,156,072
10,800 Chubu Electric Power Co., Inc. ..................... 259,301
197,500 El Paso Corp.(L) ................................... 2,275,200
6,400 Empire District Electric Co.(L) .................... 153,344
14,160 Energy Partners Ltd.(b)(L) ......................... 371,134
108,774 Exelon Corp. ....................................... 5,583,368
32,000 Great Plains Energy, Inc. .......................... 1,020,480
6,400 Headwaters, Inc.(b)(L) ............................. 220,032
11,900 Iberdrola SA ....................................... 314,318
17,100 Kansai Electric Power, Inc. ........................ 344,192
102,070 Korea Electric Power Corp. ......................... 1,599,437
17,900 Oklahoma Gas & Electric Co.(L) ..................... 518,026
24,400 Pepco Holdings, Inc. ............................... 584,136
11,000 Scottish & Southern Energy Plc ..................... 199,706
89,140 Sierra Pacific Resources(b)(L) ..................... 1,109,793
2,500 Tohoku Electric Power Co., Inc. .................... 53,367
65,000 Tokyo Gas Ltd. ..................................... 243,479
3,100 UIL Holdings Corp.(L) .............................. 166,811
60,800 Valero Energy(L) ................................... 4,809,888
10,100 Veba AG ............................................ 900,821
13,330 Westar Energy, Inc. ................................ 320,320
140,500 Williams Co., Inc. ................................. 2,669,500
107,200 Xcel Energy, Inc.(L) ............................... 2,092,544
-----------
28,965,269
-----------
ENTERTAINMENT AND LEISURE (0.1%):
23,800 Regal Entertainment Group(L) ....................... 449,344
27,000 The Walt Disney Co. ................................ 679,860
-----------
1,129,204
-----------
FINANCIAL SERVICES (7.6%):
3,200 Accredited Home Lenders(b)(L) ...................... 140,800
10,900 Advance America Cash Advance(L) .................... 174,400
12,010 Advanta, Class B(L) ................................ 338,202
2,100 Affiliated Managers Group, Inc.(b) ................. 143,493
2,760 AIFUL Corp. ........................................ 206,022
47,500 Ambac Financial Group, Inc. ........................ 3,313,600
7,460 American Capital Strategies(L) ..................... 269,381
6,450 American Home Mrtg. Investment Corp.(L) ............ 225,492
13,000 Ares Capital Corp. ................................. 231,790
18,220 Bay View Capital Corp. ............................. 281,863
35,200 BISYS Group, Inc.(b)(c) ............................ 525,888
6,300 Calamos Asset Management ........................... 171,612
57,700 Capital One Financial Corp. ........................ 4,616,577
19,300 CapitalSource Inc.(b)(L) ........................... 378,859
6,200 Certegy, Inc. ...................................... 236,964
24,540 Charter Municipal Mortgage Acceptance(L) ........... 538,898
14,600 Checkfree Corp.(b) ................................. 497,276
20,700 CIT Group, Inc. .................................... 889,479
304,676 Citigroup, Inc. .................................... 14,085,170
95,000 Commerce Assets Holdings ........................... 126,250
9,320 CompuCredit Corp.(b)(L) ............................ 319,490
124,298 Countrywide Credit Industries, Inc. ................ 4,799,146
4,353 Deutsche Boerse AG ................................. 340,399
See accompanying notes to financial statements.
8
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
JUNE 30, 2005
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
83,300 E*TRADE Financial Corp.(b) ......................... $1,165,367
37,300 Equifax, Inc. ...................................... 1,331,983
7,900 Euronext NV ........................................ 267,669
60,000 Federal Home Loan Mortgage Corp. ................... 3,913,800
23,036 Fidelity National Financial, Inc. .................. 822,155
19,000 Friedman, Billings, Ramsey Group, Inc.(L) .......... 271,700
45,000 Fubon Financial Holding Co., Ltd.(R) ............... 438,395
49,800 Goldman Sachs Group, Inc. .......................... 5,080,596
61,100 HBOS Plc ........................................... 942,283
4,300 Huron Consulting Group, Inc.(b) .................... 101,265
28,279 ING Groep NV ....................................... 800,000
25,000 Lazard Ltd., Class A(b)(L) ......................... 581,250
41,100 Lehman Brothers Holdings, Inc. ..................... 4,080,408
61,600 MBIA, Inc.(L) ...................................... 3,653,496
293,900 MBNA Corp. ......................................... 7,688,423
5,390 Novastar Financial, Inc.(L) ........................ 211,019
6,900 ORIX Corp. ......................................... 1,036,339
52,700 Paychex, Inc. ...................................... 1,714,858
7,400 SEI Investments Co. ................................ 276,390
8,100 SWS Group, Inc. .................................... 139,158
8,305 UBS AG ............................................. 648,473
-----------
68,016,078
-----------
FOOD AND BEVERAGES (2.8%):
31,900 Aramark Corp. ...................................... 842,160
163,100 Archer-Daniels-Midland Co. ......................... 3,487,078
3,800 Carrefour SA ....................................... 184,457
30,800 Coca-Cola Co. ...................................... 1,285,900
8,600 Groupe Danone ...................................... 756,833
24,200 Hormel Foods Corp. ................................. 709,786
9,700 Koninklijke Numico NV(b) ........................... 388,423
88,900 Kraft Foods, Inc., Class A(L) ...................... 2,827,909
5,760 Nash Finch Co.(L) .................................. 211,622
4,842 Nestle SA .......................................... 1,240,084
14,300 PepsiAmericas, Inc. ................................ 366,938
129,100 PepsiCo, Inc. ...................................... 6,962,364
10,920 Ruddick Corp.(L) ................................... 278,788
54,700 SUPERVALU, Inc. .................................... 1,783,767
52,300 Sysco Corp. ........................................ 1,892,737
117,700 Unilever Plc ....................................... 1,135,929
45,132 Woolworths Ltd. .................................... 567,787
-----------
24,922,562
-----------
FOREST AND PAPER PRODUCTS(0.9%):
27,800 Abitibi-Consolidated, Inc. ......................... 123,959
93,500 Georgia Pacific Corp. .............................. 2,973,300
13,730 Glatfelter(L) ...................................... 170,252
14,500 Meadwestvaco Corp.(L) .............................. 406,580
4,900 Svenska Cellusoa AB, B Shares ...................... 156,916
11,100 Upm-Kymmene Oyj .................................... 213,239
60,100 Weyerhaeuser Co. ................................... 3,825,366
-----------
7,869,612
-----------
HEALTH SERVICES (3.7%):
39,500 Aetna, Inc. ........................................ 3,271,390
43,500 AFLAC, Inc. ........................................ 1,882,680
8,480 Allscripts Healthcare Solution, Inc.(b)(L) ......... 140,853
4,000 American Healthways, Inc.(b)(L) .................... 169,080
1,500 AMERIGROUP Corp.(b) ................................ 60,300
22,100 Coventry Health Care, Inc.(b) ...................... 1,563,575
50,600 Express Scripts, Inc., Class A(b) .................. 2,528,988
4,160 Genesis Healthcare(b) .............................. 192,525
49,300 HCA, Inc. .......................................... 2,793,831
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
68,700 Health Management Assoc., Inc., Class A(L) ......... $1,798,566
77,400 Humana, Inc.(b) .................................... 3,075,876
14,100 IDX Systems Corp.(b) ............................... 424,974
2,500 Lifepoint Hospitals, Inc.(b) ....................... 126,300
6,300 Manor Care, Inc. ................................... 250,299
61,900 McKesson Corp. ..................................... 2,772,501
3,320 Molina Heathcare, Inc.(b)(L) ....................... 146,943
49,800 PacifiCare Health Systems, Inc.(b) ................. 3,558,210
4,350 PolyMedica Corp. ................................... 155,121
40,800 Quest Diagnostics, Inc. ............................ 2,173,416
6,980 Rehabcare Group, Inc.(b) ........................... 186,575
2,800 Sierra Health Services, Inc.(b)(L) ................. 200,088
39,200 Stryker Corp. ...................................... 1,864,352
9,500 Triad Hospitals, Inc.(b)(L) ........................ 519,080
2,900 Universal Health Services, Inc., Class B ........... 180,322
55,600 Varian Medical Systems, Inc.(b)(L) ................. 2,075,548
-----------
32,111,393
-----------
HOTELS AND OTHER LODGING PLACES (0.1%):
8,400 Accor SA ........................................... 394,223
156,000 Shangri-La Asia Ltd. ............................... 240,834
-----------
635,057
-----------
INSURANCE (7.1%):
27,200 Ace Ltd. ........................................... 1,219,920
47,809 Aegon NV ........................................... 619,821
5,100 Allianz AG ......................................... 587,725
60,900 Allstate Corp. ..................................... 3,638,775
15,200 American Equity Invstmnt Life Hldng Co.(L) ......... 180,576
76,679 American International Group, Inc. ................. 4,455,050
120,000 Aon Corp.(L) ....................................... 3,004,800
5,590 Arch Capital Group Ltd.(b) ......................... 251,830
9,500 Aspen Insurance Holdings Ltd. ...................... 261,820
9,200 Axa ................................................ 230,195
48 Berkshire Hathaway, Inc., Class A(b) ............... 4,008,000
14,885 Cathay Financial Holding Co., Ltd. ................. 299,635
7,900 China Life Insurance Co. - ADR(b) .................. 215,670
41,000 Chubb Corp. ........................................ 3,510,010
80,300 CIGNA Corp. ........................................ 8,594,508
5,000 Everest Re Group, Ltd. ............................. 465,000
119,000 Genworth Financial, Inc., Class A .................. 3,597,370
58,500 Hartford Financial Services Group, Inc. ............ 4,374,630
54,200 Insurance Australia Group Ltd. ..................... 248,215
43 Millea Holdings, Inc. .............................. 578,301
44,000 Mitsui Marine and Fire ............................. 396,751
32,300 Montpelier RE Holdings Ltd.(L) ..................... 1,116,934
34,800 Old Republic International Corp. ................... 880,092
12,400 Phoenix Companies Inc.(L) .......................... 147,560
12,300 Platinum Underwriter Holdings Ltd. ................. 391,386
61,700 Promina Group Ltd. ................................. 221,442
19,904 QBE Insurance Group Ltd. ........................... 243,124
36,200 Reinsurance Group of America, Inc. ................. 1,683,662
3,660 Selective Insurance Group, Inc.(L) ................. 181,353
95,939 St. Paul Cos., Inc. ................................ 3,792,469
9,439 Swiss Re ........................................... 580,771
5,090 United Fire & Casualty Co.(L) ...................... 226,098
293,900 UnumProvident Corp.(L) ............................. 5,384,248
89,800 Wellpoint, Inc.(b) ................................. 6,253,672
29,300 Yasuda F & M Insurance ............................. 296,200
-----------
62,137,613
-----------
INTERNET SERVICES (0.3%):
17,700 Asiainfo Holdings, Inc.(b)(L) ...................... 97,527
See accompanying notes to financial statements.
9
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
JUNE 30, 2005
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
13,000 CNET Networks, Inc.(b)(L) .......................... $152,620
8,100 InfoSpace, Inc.(b)(L) .............................. 266,733
15,400 Ipass, Inc.(b)(L) .................................. 93,324
4,050 j2 Global Communications, Inc.(b)(L) ............... 139,482
4,500 Netease.com Inc.- ADR(b)(L) ........................ 256,995
20,200 Openwave Systems, Inc.(b)(L) ....................... 331,280
9,200 Softbank Corp. ..................................... 361,224
10,390 WebEx Communications, Inc.(b)(L) ................... 274,400
112 Yahoo Japan Corp. .................................. 235,545
-----------
2,209,130
-----------
MACHINERY AND EQUIPMENT (1.2%):
3,160 Albany International Corp., Class A(L) ............. 101,468
17,100 Atlas Copca AB, A Shares ........................... 271,613
37,500 Caterpillar, Inc. .................................. 3,574,125
12,000 Eaton Corp. ........................................ 718,800
29,200 Fastenal Co.(L) .................................... 1,788,792
10,150 Graco, Inc.(L) ..................................... 345,811
17,300 Lennox International, Inc.(L) ...................... 366,241
2,600 NIDEC Corp. ........................................ 275,512
11,200 Schneider SA ....................................... 845,321
3,400 SMC Corp. .......................................... 371,333
8,500 Stewart & Stevenson Services, Inc. ................. 192,610
31,600 Zebra Technologies Corp., Class A(b) ............... 1,383,764
-----------
10,235,390
-----------
MANUFACTURING (1.2%):
13,100 Assa Abloy AB Class B .............................. 168,644
6,100 Cummins, Inc.(L) ................................... 455,121
27,300 FEI Co.(b)(L) ...................................... 622,713
2,300 Greif Brothers Co., Class A ........................ 140,530
4,700 Griffon Corp.(b)(L) ................................ 104,340
3,200 Hexcel Corp.(b)(L) ................................. 54,144
16,700 Illinois Tool Works, Inc. .......................... 1,330,656
36,000 Ingersoll-Rand Co. ................................. 2,568,600
10,000 INI Steel Co.(b) ................................... 136,913
10,000 Kao Corp. .......................................... 236,032
6,900 Moog, Inc.(b)(L) ................................... 217,281
1,800 NACCO Industries, Inc. ............................. 192,996
47,400 Parker Hannifin Corp. .............................. 2,939,273
13,500 Siemens AG ......................................... 987,048
5,100 Standex International Corp.(L) ..................... 144,891
-----------
10,299,182
-----------
MEDICAL PRODUCTS (4.6%):
96,000 Amgen, Inc.(b) ..................................... 5,804,160
9,050 Applera Corp.-Celera Genomics Grp.(b)(L) ........... 99,279
79,000 Baxter International, Inc. ......................... 2,930,900
29,400 Beckman Coulter, Inc.(L) ........................... 1,868,958
36,500 Biomet, Inc. ....................................... 1,264,360
2,700 Biosite Diagnostics, Inc.(b) ....................... 148,473
19,100 Cerner Corp.(b)(L) ................................. 1,298,227
5,200 Cooper Cos., Inc. .................................. 316,472
40,500 Depomed, Inc.(b) ................................... 176,985
29,100 Diagnostic Products Corp.(L) ....................... 1,377,303
24,300 Edwards Lifesciences Corp.(b)(L) ................... 1,045,386
15,210 Exelixis, Inc.(b)(L) ............................... 113,010
46,800 Forest Laboratories, Inc., Class A(b) .............. 1,818,180
10,100 Genentech, Inc.(b)(L) .............................. 810,828
64,864 Genzyme Corp.(b) ................................... 3,897,678
8,010 Haemonetics Corp.(b) ............................... 325,526
2,600 Henry Schein, Inc.(b)(L) ........................... 107,952
2,200 Hoya Corp. ......................................... 254,175
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
1,100 INAMED Corp.(b) .................................... $73,667
97,200 Johnson & Johnson, Inc. ............................ 6,317,999
58,500 Laboratory Corp. of America Holdings(b) ............ 2,919,150
4,240 Landauer, Inc.(L) .................................. 220,098
6,870 Medical Action Industries(b) ....................... 122,630
23,400 Medtronic, Inc. .................................... 1,211,886
3,000 Millipore Corp.(b) ................................. 170,190
27,000 Patterson Co., Inc.(b)(L) .......................... 1,217,160
17,660 Per-Se Technologies, Inc.(b)(L) .................... 371,213
34,300 Sanofi -Synthelabo SA .............................. 2,819,235
3,300 Syneron Medical, Ltd.(b)(L) ........................ 120,747
20,380 Zeneca Group Plc ................................... 844,099
-----------
40,065,926
-----------
METALS AND MINING (0.9%):
11,900 Alcan, Inc. ........................................ 357,437
6,600 Anglo American Plc ................................. 154,836
14,023 Broken Hill Proprietary Co. Ltd. ................... 193,942
17,600 Cameco Corp. ....................................... 785,496
4,890 Carpenter Technology Corp. ......................... 253,302
10,800 Century Aluminum Co.(b)(L) ......................... 220,320
10,440 Commercial Metals Co. .............................. 248,681
18,000 Companhia Vale do Rio Doce - ADR(L) ................ 492,120
13,300 Inco Ltd.(L) ....................................... 502,075
3,120 Kennametal, Inc. ................................... 143,052
4,500 Lawson Products, Inc. .............................. 174,690
3,900 Mining and Metallurgical Company
Norilsk Nickel ..................................... 236,340
4,800 Mueller Industries, Inc. ........................... 130,080
14,563 Noranda, Inc. ...................................... 249,991
7,010 NS Group, Inc.(b)(L) ............................... 227,895
37,500 Repsol Ypf S.A ..................................... 960,537
3,000 Schnitzer Steel Industries, Inc.(L) ................ 71,100
25,400 Southern Peru Copper Corp. ......................... 1,088,137
25,300 Steel Dynamics, Inc.(L) ............................ 664,125
17,600 Xstrata Plc ........................................ 339,717
-----------
7,493,873
-----------
OIL AND GAS (6.0%):
26,146 Billiton Plc ....................................... 333,637
17,800 Chesapeake Energy Corp.(L) ......................... 405,840
131,822 ChevronTexaco Corp. ................................ 7,371,486
135,738 ConocoPhillips ..................................... 7,803,578
77,180 Devon Energy Corp. ................................. 3,911,482
9,650 Eni SpA ............................................ 248,931
216,300 Exxon Mobil Corp. .................................. 12,430,760
4,600 Frontier Oil Corp.(L) .............................. 135,010
2,900 Kaneb Services, LLC ................................ 125,512
15,461 Kerr-McGee Corp.(L) ................................ 1,179,829
3,277 L'Air Liquide ...................................... 558,927
32,000 Meridian Resource Corp.(b) ......................... 152,960
62,900 Occidental Petroleum Corp. ......................... 4,838,897
2,500 Patterson-UTI Energy, Inc. ......................... 69,575
13,400 Petroleo Brasileiro SA - ADR ....................... 662,002
45,800 Royal Dutch Petroleum .............................. 2,993,826
56,000 Royal Dutch Petroleum - New York Shares - ADR ...... 3,634,400
44,500 Sasol Ltd. ......................................... 1,206,490
18,200 Shell Transportation & Trading Co. Plc ............. 177,036
7,160 Stone Energy Corp.(b) .............................. 350,124
5,900 Suncor Energy, Inc. ................................ 279,076
4,000 Swift Energy Co.(b)(L) ............................. 143,280
6,420 Tesoro Petroleum Corp. ............................. 298,658
See accompanying notes to financial statements.
10
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
JUNE 30, 2005
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
1,000 Total SA, Class B .................................. $235,202
9,400 Ultra Petroleum Corp.(b)(L) ........................ 285,384
23,900 Unocal Corp. ....................................... 1,554,695
19,870 Vintage Petroleum, Inc. ............................ 605,439
23,000 Xto Energy, Inc. ................................... 781,770
5,400 YUKOS - ADR(b)(L) .................................. 12,312
-----------
52,786,118
-----------
PHARMACEUTICALS (6.0%):
148,300 Abbott Laboratories ................................ 7,268,183
63,710 Abgenix, Inc.(b)(L) ................................ 546,632
28,800 Amylin Pharmaceuticals(b)(L) ....................... 602,784
16,200 Array Biopharma, Inc.(b)(L) ........................ 102,060
19,670 Astrazeneca Plc .................................... 817,620
11,500 Barr Pharmaceuticals, Inc.(b) ...................... 560,510
5,000 Bayer AG ........................................... 167,171
48,540 Cephalon, Inc.(b)(L) ............................... 1,932,377
96,500 Chiron Corp.(b)(L) ................................. 3,366,885
42,800 Cubist Pharmaceuticals, Inc.(b)(L) ................. 563,676
22,650 CV Therapeutics, Inc.(b)(L) ........................ 507,813
46,500 Dendreon Corp.(b)(L) ............................... 243,195
5,000 Eli Lilly & Co. .................................... 278,550
13,360 Encysive Pharmaceuticals, Inc.(b) .................. 144,422
23,000 Endo Pharmaceuticals Holdings, Inc.(b) ............. 604,440
92,100 Gilead Sciences, Inc.(b) ........................... 4,051,479
77,500 Hospira, Inc.(b) ................................... 3,022,500
62,900 Human Genome Sciences, Inc.(b)(L) .................. 728,382
26,500 ICOS Corp.(b)(L) ................................... 561,005
48,800 Incyte Pharmaceutical, Inc.(b)(L) .................. 348,920
120,500 King Pharmaceuticals, Inc.(b) ...................... 1,255,610
54,700 Ligand Pharmaceutical, Class B(b) .................. 380,165
40,308 Medco Health Solutions, Inc.(b) .................... 2,150,835
120,400 Millennium Pharmaceuticals, Inc.(b) ................ 1,116,108
6,600 Neurocrine Biosciences, Inc.(b)(L) ................. 277,596
13,300 Neurogen Corp.(b)(L) ............................... 90,706
45,761 Novartis AG ........................................ 2,181,392
4,100 Novo Nordisk A/S, Class B .......................... 208,851
19,080 NPS Pharmaceuticals, Inc.(b)(L) .................... 216,558
328,315 Pfizer, Inc. ....................................... 9,054,928
6,000 PRA International(b) ............................... 160,680
19,660 Regeneron Pharmaceuticals, Inc.(b) ................. 164,947
7,200 Rigel Pharmaceuticals, Inc.(b)(L) .................. 143,424
4,067 Roche Holding AG ................................... 515,083
29,900 Sankyo Co. ......................................... 574,844
667 Sanofi -Aventis .................................... 54,904
8,000 Teva Pharmaceutical SP - ADR ....................... 249,120
31,200 Trimeris, Inc.(b)(L) ............................... 311,376
6,100 UCB SA ............................................. 296,767
109,500 Watson Pharmaceutical, Inc.(b) ..................... 3,236,820
66,100 Wyeth .............................................. 2,941,450
17,380 Zymogenetics, Inc.(b)(L) ........................... 305,888
-----------
52,306,656
-----------
PRINTING AND PUBLISHING (0.7%):
5,570 Advo, Inc.(L) ...................................... 177,405
28,000 Dex Media, Inc. .................................... 683,480
65,000 McGraw-Hill Companies, Inc. ........................ 2,876,250
74,100 Pearson Plc ........................................ 873,179
9,700 Reed Elsevier NV ................................... 135,267
69,800 Reed International Plc ............................. 668,640
7,500 Schibsted ASA ...................................... 206,570
3,100 Thomson Corp. ...................................... 103,848
-----------
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
9,600 Thomson Corp. ...................................... $322,656
14,289 VNU NV ............................................. 399,040
-----------
6,446,335
-----------
REAL ESTATE (1.5%):
16,100 Aames Investment Corp. ............................. 156,492
171,000 Amoy Properties Ltd. ............................... 251,891
20,460 Anthracite Capital, Inc.(L) ........................ 242,451
12,190 Arbor Realty Trust, Inc. ........................... 349,853
51,500 Archston-Smith Trust ............................... 1,988,930
32,800 Ashford Hospitality Trust(L) ....................... 354,240
23,600 Boston Properties, Inc. ............................ 1,652,000
9,700 Diamondrock Hospitality Co. ........................ 109,610
12,200 Equity One, Inc. ................................... 276,940
8,100 GMH Communities Trust .............................. 112,185
4,500 Highwoods Properties, Inc.(L) ...................... 133,920
22,100 Homebanc Corp.(L) .................................. 200,889
33,690 IndyMac Mortgage Holdings, Inc. .................... 1,372,194
41,000 iStar Financial, Inc. .............................. 1,705,190
86,000 Mitsubishi Estate Co. .............................. 947,793
26,000 Mitsui Fudosan ..................................... 292,174
10,900 Omega Healthcare Investors, Inc. ................... 140,174
23,300 Pulte Homes, Inc. .................................. 1,963,025
4,710 Redwood Trust, Inc. ................................ 243,036
9,700 Saxon Reit Inc. .................................... 165,579
16,000 Sun Hung Kai Properties ............................ 157,983
18,875 Technical Olympic USA(L) ........................... 458,285
-----------
13,274,834
-----------
RESTAURANTS (1.0%):
11,205 CEC Entertainment, Inc.(b)(L) ...................... 471,618
48,300 Cheesecake Factory, Inc.(b) ........................ 1,677,459
10,400 CKE Restaurants, Inc.(L) ........................... 144,768
230,200 McDonald's Corp. ................................... 6,388,050
1,300 P.F. Chang's China Bistro, Inc.(b)(L) .............. 76,674
5,600 Panera Bread Co., Class A(b)(L) .................... 347,676
-----------
9,106,245
-----------
RETAIL (3.4%):
43,700 Abercrombie & Fitch Co., Class A(L) ................ 3,002,190
2,800 AnnTaylor Stores Corp.(b) .......................... 67,984
16,700 Autozone, Inc.(b) .................................. 1,544,082
48,300 Bed Bath & Beyond, Inc.(b) ......................... 2,017,974
89,300 Blockbuster, Inc.(L) ............................... 814,416
4,600 Burlington Coat Factory Warehouse(L) ............... 196,144
14,605 Cato Corp. ......................................... 301,593
4,900 Cawachi, Ltd. ...................................... 207,428
46,600 Claire's Stores, Inc. .............................. 1,120,730
1,400 Columbia Sportswear Co.(b)(L) ...................... 69,146
92,000 Dollar General Corp. ............................... 1,873,120
13,000 Dollar Tree Stores, Inc.(b)(L) ..................... 312,000
9,000 DSW Inc.(b) ........................................ 224,550
30,200 Esprit Asia Holdings Ltd.(R) ....................... 218,545
2,300 Fast Retailing Co., Ltd. ........................... 119,578
7,300 Finish Line, Class A(L) ............................ 138,116
15,580 Gamestop Corp.(b)(L) ............................... 509,622
12,300 Genesco, Inc.(b)(L) ................................ 456,207
11,200 Home Depot, Inc. ................................... 435,680
53,100 Jusco Ltd. ......................................... 810,471
3,300 Longs Drug Stores Corp.(L) ......................... 142,065
33,800 Lowe's Cos., Inc.(L) ............................... 1,967,836
11,700 Massmart Holdings Ltd. ............................. 78,549
42,300 Michaels Stores, Inc.(L) ........................... 1,749,951
See accompanying notes to financial statements.
11
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
JUNE 30, 2005
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
8,120 Movie Gallery, Inc.(L) ............................. $214,612
6,300 New York & Co.(b) .................................. 132,678
3,900 Pantry, Inc.(b) .................................... 151,047
11,600 Sears Holding Corp.(b) ............................. 1,738,492
2,000 Shimamura Co. Ltd. ................................. 168,968
3,800 Shopko Stores, Inc.(b) ............................. 92,378
10,900 Stride Rite Corp. .................................. 150,311
29,400 TJX Co., Inc. ...................................... 715,890
6,700 Urban Outfitters, Inc.(b)(L) ....................... 379,823
58,500 Wal-Mart Stores, Inc. .............................. 2,819,700
43,000 Walgreen Co. ....................................... 1,977,570
156,406 Walmart De Mexico SA ............................... 634,749
18,400 Whole Foods Market, Inc.(L) ........................ 2,176,720
7,900 Williams-Sonoma, Inc.(b)(L) ........................ 312,603
-----------
30,043,518
-----------
TECHNOLOGY (3.2%):
119,500 Agilent Technologies, Inc.(b) ...................... 2,750,890
32,500 Aquantive, Inc.(b)(L) .............................. 575,900
23,000 ATI Technologies, Inc.(b)(L) ....................... 272,550
24,800 Axcelis Technologies, Inc.(b) ...................... 170,128
40,300 Brooks Automation, Inc.(b) ......................... 598,455
6,900 Canon, Inc. ........................................ 363,715
13,100 Dolby Laboratories, Inc., Class A(b) ............... 288,986
16,600 Emulex Corp.(b)(L) ................................. 303,116
13,100 eResearch Technology, Inc.(b)(L) ................... 175,409
35,900 Genesis Microchip, Inc.(b)(L) ...................... 662,714
16,400 Hitachi High Technology Corp. ...................... 250,611
10,500 Hutchinson Technology, Inc.(b)(L) .................. 404,355
410,500 Intel Corp. ........................................ 10,697,630
41,200 Linear Technology Corp. ............................ 1,511,628
15,300 Mykrolis Corp.(b)(L) ............................... 217,413
12,700 Plantronics, Inc.(L) ............................... 461,772
95,900 RF Micro Devices, Inc.(b)(L) ....................... 520,737
252,100 Texas Instruments, Inc.(L) ......................... 7,076,447
73,950 Western Digital Corp.(b) ........................... 992,409
-----------
28,294,865
-----------
TELECOMMUNICATIONS (4.3%):
24,300 America Movil ...................................... 1,448,523
23,750 Aspect Communications Corp.(b) ..................... 266,713
102,100 Avaya, Inc.(b) ..................................... 849,472
130,600 CenturyTel, Inc.(L) ................................ 4,522,679
8,300 Ditech Communications Corp.(b)(L) .................. 53,867
6,800 Ericsson - ADR(L) .................................. 217,260
198,000 Hutchison Telecommunications
International, Ltd.(b) ............................. 196,140
9,900 Inphonic, Inc.(b)(L) ............................... 152,262
130,300 Koninklijke(Royal) KPN NV .......................... 1,094,640
35,500 Korea Telecom Corp. ................................ 763,250
62,800 Magyar Telekom ..................................... 268,573
215,900 Motorola, Inc. ..................................... 3,942,335
81,800 Nextel Communications, Inc, Class A(b) ............. 2,642,958
52,100 Nextel Partners, Inc., Class A(b) .................. 1,311,357
13,300 Nokia Oyj - Class A ................................ 222,981
70,500 Polycom, Inc.(b) ................................... 1,051,155
16,600 Portugal Telecom, SGPS, SA ......................... 157,540
46,730 Premiere Global Services, Inc.(b)(L) ............... 527,582
1,309,500 PT Telekomunikasi Indonesia ........................ 671,538
40,900 Qualcomm, Inc. ..................................... 1,350,109
36,760 Rural Cellular Corp.(b) ............................ 192,990
28,700 SBC Communications, Inc. ........................... 681,625
33,700 Scientific-Atlanta, Inc. ........................... 1,121,199
398,500 Singapore Telecommunications Ltd.(b)(R) ............ 654,324
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
17,700 Societe Europeenne Satellite ....................... $259,254
151,200 Sprint Corp.(L) .................................... 3,793,608
2,077 Swisscom AG ........................................ 677,900
6,200 Tele Danmark AS, Class B ........................... 265,956
182,000 Telefonaktiebolaget LM Ericsson .................... 585,164
85,103 Telefonica De Espana ............................... 1,394,864
9,400 Telefonos de Mexico - ADR .......................... 177,566
34,886 Telekom Austria AG ................................. 678,632
110,400 Telesp Celular Participa - ADR(b)(L) ............... 471,408
11,500 Telus Corp. ........................................ 392,474
8,200 Telus Corp. ........................................ 288,356
31,600 Ubiquitel, Inc.(b)(L) .............................. 257,856
19,300 US Unwired, Inc.(b) ................................ 112,326
23,252 Verizon Communications, Inc.(L) .................... 803,357
5,300 Vivendi Universal .................................. 167,193
1,267,568 Vodafone Group Plc ................................. 3,089,579
-----------
37,776,565
-----------
TRANSPORTATION (1.6%):
6,040 Alexander & Baldwin(L) ............................. 279,954
14,190 Arkansas Best Corp.(L) ............................. 451,384
67,000 CSX Corp. .......................................... 2,858,220
32,000 Expeditors Int'l. of Washington, Inc.(L) ........... 1,593,920
81,000 Japan Airlines System Corp. ........................ 218,603
4,500 Knight Transportation, Inc.(L) ..................... 109,485
3,100 Landstar System, Inc.(b) ........................... 93,372
197,939 Qantas Airways, Ltd. ............................... 508,294
19,250 Ryder System, Inc. ................................. 704,550
210,500 Southwest Airlines Co. ............................. 2,932,265
104,300 Werner Enterprises, Inc.(L) ........................ 2,048,452
35,000 Yamato Transport ................................... 486,506
35,100 Yellow Roadway Corp.(b)(L) ......................... 1,783,080
-----------
14,068,085
-----------
WASTE MANAGEMENT (0.9%):
264,600 Waste Management, Inc. ............................. 7,498,764
TOTAL COMMON STOCKS ................................ 862,182,473
CASH EQUIVALENTS (1.6%):
14,391,787 JPMorgan Cash Trade Execution ...................... 14,391,787
TOTAL CASH EQUIVALENTS ............................. 14,391,787
INVESTMENTS HELD AS COLLATERAL FOR
LOANED SECURITIES (12.9%):
106,000,000 Investment Grade Repurchase Agreement
(Merrill Lynch, 3.5175%, 7/1/05) ................... 106,000,000
7,240,073 U.S. Agency Mortgages (Morgan Stanley,
3.42%, 7/1/05) ..................................... 7,240,073
-----------
TOTAL INVESTMENTS HELD AS COLLATERAL
FOR LOANED SECURITIES .............................. 113,240,073
TOTAL (COST $883,523,858)(a) .................................... $989,814,333
============ ============
Percentages indicated are based on net assets of $878,582,670.
(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 $9,772,779 and by PFIC
mark to market of $502,114. Cost for federal income tax differs from value by
net unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation $123,903,151
Unrealized depreciation (27,887,569)
------------
Net unrealized appreciation $96,015,582
============
(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 to qualified buyers.
ADR American Depository Receipt
GDR Global Depository Receipt
See accompanying notes to financial statements.
12
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
JUNE 30, 2005
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
ASSET BACKED SECURITIES (29.5%):
$1,005,000 Ameriquest Mortgage Securities Inc.,
4.37%, 10/25/33* ................................... $1,005,020
4,410,000 Assets Backed Funding Securities, 4.25%,
6/25/35 ............................................ 4,409,646
5,225,000 Banc of America Mortgage Securities,
4.805%, 5/25/35 * .................................. 5,247,501
5,180,000 Banc of America Mortgage Securities,
4.63%, 6/25/35 * ................................... 5,160,239
4,545,000 Bank of America Commercial Mortgage
Inc., 5.48%, 6/10/39 * ............................. 4,844,468
1,105,000 Bank of America Commercial Mortgage
Inc., 4.50%, 7/10/42 ............................... 1,110,258
3,894,817 Bear Stearns Commercial Mortgage
Securities, 6.08%, 2/15/35 ......................... 4,023,645
4,615,000 Bear Stearns Commercial Mortgage
Securities, 5.47%, 6/11/41 ......................... 4,919,905
1,100,000 Chase Funding Loan Acquisition Trust,
3.42%, 5/25/34 * ................................... 1,105,951
1,195,000 Commercial Mortgage Pass-Through
Certificate, 5.44%, 7/10/37 * ...................... 1,268,174
4,864,848 Countrywide Home Loan, 3.39%, 2/25/35 * ............ 4,865,732
3,280,000 First Franklin Mortgage Loan, 3.42%,
12/25/32 * ......................................... 3,293,850
1,370,000 GE Capital Commercial Mortgage Corp.,
4.60%, 11/10/38 .................................... 1,376,987
3,510,000 General Electric Capital Corp., 6.125%,
2/22/11 ............................................ 3,818,073
1,012,663 GMAC Commercial Mortgage Corp.,
2.96%, 3/10/39 ..................................... 987,997
5,230,000 GMAC Commercial Mortgage Securities
Inc., 5.30%, 8/10/38 ............................... 5,497,240
930,756 GSAMP Trust, 3.29%, 12/25/34 * ..................... 933,295
1,005,021 Harborview Mortgage Loan Trust, 3.25%,
3/19/35 * .......................................... 1,002,506
5,225,000 Home Equity Mortgage Trust, 3.62%,
6/25/30(d) ......................................... 5,225,000
3,263,431 Indymac Index Mortgage Loan Trust,
3.45%, 9/25/34 * ................................... 3,256,484
3,419,433 Indymac Index Mortgage Loan Trust,
3.42%, 11/25/34 * .................................. 3,421,569
925,513 Indymac Index Mortgage Loan Trust,
3.38%, 1/25/35 * ................................... 924,328
2,370,913 Ixis Real Estate Capital Trust, 3.21%,
2/25/35 * .......................................... 2,372,758
4,660,974 JPMorgan Chase Commercial Mortgage
Securities Co., 4.28%, 5/15/41 ..................... 4,670,306
4,170,000 JPMorgan Chase Commercial Mortgage
Securities Co., 5.38%, 5/15/41 * ................... 4,381,433
4,065,000 JPMorgan Chase Commercial Mortgage
Securities Corp., 4.77%, 3/12/39 ................... 4,134,283
4,560,704 LB Commercial Conduit Mortgage Trust,
6.41%, 6/15/31 ..................................... 4,645,813
3,135,000 LB-UBS Commercial Mortgage Trust,
4.79%, 10/15/29 .................................... 3,178,379
1,807,828 Lehman Brothers, 7.18%, 9/15/19, Series
2000-C4 ............................................ 1,879,784
3,970,000 Master Adjustable Rate Mortgages Trust,
3.79%, 11/21/34 * .................................. 3,888,011
709,330 Master Adjustable Rate Mortgages Trust,
3.79%, 11/21/34 * .................................. 708,237
4,605,363 Merrill Lynch Mortgage Investors, Inc.,
4.51%, 2/25/35 * ................................... 4,591,236
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
$1,029,046 Morgan Stanley Mortgage Loan Trust,
5.43%, 10/25/34* .................................. $1,047,987
4,238,265 Morgan Stanley Mortgage Loan Trust,
5.14%, 11/25/34* .................................. 4,272,368
835,000 Residential Asset Mortgage Products Inc.,
4.00%, 1/25/30 ..................................... 833,270
5,760,899 Residential Asset Mortgage Products Inc.,
5.57%, 6/25/32, Series 2002-RS3, Class A15 ......... 5,806,119
984,814 Saxon Asset Securities Trust, 3.25%,
5/25/35* .......................................... 985,867
6,155,000 Structured Adjustable Rate Mortgage Loan
Trust, 4.72%, 7/25/34* ............................ 6,078,080
5,220,000 UBS Commercial Mortgage Trust, 5.59%,
6/15/31 ............................................ 5,571,199
815,000 Washington Mutual, 3.81%, 6/25/34* ................ 802,452
1,975,105 Washington Mutual, 4.66%, 3/25/35* ................ 1,977,456
4,130,000 Washington Mutual, 4.69%, 5/25/35* ................ 4,126,460
1,095,000 Washington Mutual, 4.69%, 5/25/35* ................ 1,096,294
4,605,000 Wells Fargo Mortgage Backed Securities
Trust, 3.54%, 9/25/34* ............................ 4,488,224
4,115,000 Wells Fargo Mortgage Backed Securities
Trust, 4.54%, 1/25/35* ............................ 4,105,454
3,931,264 Wells Fargo Mortgage Backed Securities
Trust, 4.56%, 2/25/35*(d) ......................... 3,921,829
4,782,642 Wells Fargo Mortgage Backed Securities
Trust, 4.54%, 4/25/35* ............................ 4,763,443
3,680,000 Wells Fargo Mortgage Backed Securities
Trust, 3.50%, 6/25/35*(d) ......................... 3,594,624
-----------
TOTAL ASSET BACKED SECURITIES ...................... 155,619,234
------------
CORPORATE BONDS (17.4%):
2,165,000 Alcan, Inc., 6.125%, 12/15/33(L) ................... 2,327,301
1,900,000 Alliance Capital Management, 5.625%,
8/15/06 ............................................ 1,921,789
1,000,000 American General Finance, 5.875%,
7/14/06(L) ......................................... 1,017,545
780,000 American General Finance, 4.50%,
11/15/07 ........................................... 782,083
675,000 AOL Time Warner, Inc., 6.875%, 5/1/12(L) ........... 762,736
2,400,000 AOL Time Warner, Inc., 7.625%, 4/15/31 ............. 3,006,833
1,000,000 Bank of America Corp., 4.375%, 12/1/10(L) .......... 1,005,223
3,675,000 Bottling Group Llc, 5.00%, 11/15/13 ................ 3,808,105
1,125,000 BRE Properties, Inc., 7.125%, 2/15/13 .............. 1,290,385
3,800,000 Burlington North Santa Fe, 6.75%, 7/15/11 .......... 4,251,672
2,500,000 Carolina Power & Light, 6.50%, 7/15/12(L) .......... 2,763,568
750,000 Carramerica Realty Corp., 5.125%, 9/1/11 ........... 758,466
1,500,000 Caterpillar Financial Services Corp., 3.70%,
8/15/08 ............................................ 1,478,849
10,000,000 Coca-Cola Enterprises, 0.00%, 6/20/20 .............. 4,637,179
2,115,000 Duke Realty Corp., 7.05%, 3/1/06 ................... 2,142,721
1,600,000 EOP Operating LP, 6.80%, 1/15/09 ................... 1,716,176
3,615,000 Equity One Abs, Inc., 3.80%, 7/25/34 ............... 3,588,699
1,989,802 FedEx Corp., 6.72%, 1/15/22, Series 98-1A .......... 2,272,244
1,950,000 Firstar Bank, 7.125%, 12/1/09 ...................... 2,181,126
2,025,000 Ford Motor Corp., 6.375%, 2/1/29(L) ................ 1,565,451
610,000 Ford Motor Credit Co., 7.375%,
10/28/09(L) ........................................ 596,624
3,350,000 General Mills, Inc., 6.00%, 2/15/12 ................ 3,647,008
1,400,000 Household Finance Corp., 6.40%, 6/17/08 ............ 1,483,779
600,000 Household Finance Corp., 4.75%, 5/15/09(L) ......... 609,152
1,500,000 Household Finance Corp., 4.125%,
11/16/09 ........................................... 1,485,252
1,070,000 International Paper Co., 6.50%, 11/15/07 ........... 1,120,535
13
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
JUNE 30, 2005
- --------------------------------------------------------------------------------
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
$475,000 International Paper Co., 5.85%, 10/30/12 (L) ....... $497,319
1,750,000 Kinder Morgan Energy Partners, 7.40%,
3/15/31 ............................................ 2,138,992
675,000 May Department Stores Co., 7.45%,
9/15/11 ............................................ 768,826
4,000,000 Merrill Lynch & Co., 4.125%, 9/10/09 (L) ........... 3,986,808
3,525,000 Morgan Stanley, 3.625%, 4/1/08 (L) ................. 3,472,587
750,000 National City Corp., 4.50%, 3/15/10 ................ 757,848
1,185,000 National City Corp., 6.875%, 5/15/19 ............... 1,406,960
1,445,000 Pacific Gas & Electric, 6.05%, 3/1/34 .............. 1,598,199
3,785,000 PNC Funding Corp., 6.125%, 2/15/09 ................. 4,022,985
2,975,000 SBC Communications, Inc., 4.125%,
9/15/09 ............................................ 2,953,158
900,000 Sprint Capital Corp., 7.625%, 1/30/11 (L) .......... 1,029,054
2,930,000 Sprint Capital Corp., 6.875%, 11/15/28 ............. 3,373,690
2,800,000 SunTrust Banks, Inc., 4.25%, 10/15/09 .............. 2,790,776
4,110,000 Wachovia Bank Commercial Mortgage
Trust, 4.85%, 10/15/41 ............................. 4,194,139
1,085,000 Washington Mutual, 3.95%, 7/25/34 * ................ 1,072,854
3,000,000 Washington Mutual Capital Inc, 4.20%,
1/15/10 (L) ........................................ 2,979,060
2,500,000 Wells Fargo Corp., 4.20%, 1/15/10 (L) .............. 2,501,233
------------
TOTAL CORPORATE BONDS .............................. 91,764,989
------------
MORTGAGE-BACKED SECURITIES (35.0%):
FANNIE MAE
1,061,387 4.92%, 4/1/11 ...................................... 1,074,574
1,060,910 6.50%, 9/1/19 ...................................... 1,104,647
2,479,999 4.50%, 1/1/20 ...................................... 2,470,935
865,000 4.50%, 7/1/20(b) ................................... 861,216
3,620,000 5.00%, 7/1/20(b) ................................... 3,660,725
3,015,000 5.00%, 7/1/20(b) ................................... 3,048,919
1,095,000 5.50%, 11/15/28 .................................... 1,124,013
3,685,000 5.50%, 5/15/29 ..................................... 3,787,282
5,673,871 4.50%, 2/25/31 ..................................... 5,656,942
5,235,000 5.13%, 6/1/35(d) ................................... 5,302,532
1,510,000 5.50%, 7/1/35(b) ................................... 1,530,763
8,300,000 5.50%, 7/1/35(b) ................................... 8,414,125
3,230,000 5.50%, 7/1/35(b) ................................... 3,274,413
720,000 5.50%, 7/1/35(b) ................................... 729,900
6,340,000 5.50%, 7/1/35(b) ................................... 6,427,174
5,615,497 7.07%, 11/1/06 ..................................... 5,748,093
2,968,679 7.185%, 5/1/07 ..................................... 3,068,584
2,250,619 7.74%, 6/1/07 ...................................... 2,353,530
471,603 6.61%, 9/1/07 ...................................... 488,903
2,140,104 6.23%, 1/1/08 ...................................... 2,215,980
3,589,959 6.36%, 8/1/08 ...................................... 3,767,440
925,735 6.13%, 10/1/08 ..................................... 968,185
1,423,822 7.01%, 11/1/08 ..................................... 1,526,848
4,091,622 6.14%, 4/1/09 ...................................... 4,311,404
4,711,031 7.29%, 12/1/10 ..................................... 5,313,075
3,209,436 6.20%, 1/1/11 ...................................... 3,468,935
2,631,623 6.48%, 1/1/11 ...................................... 2,874,474
952,087 6.09%, 5/1/11 ...................................... 1,027,591
1,327,258 6.305%, 5/1/11 ..................................... 1,445,143
5,997,622 3.95%, 7/1/13 ...................................... 5,822,945
4,828,217 6.00%, 12/25/16, Series 01-71, Class QE ............ 5,016,452
418,813 6.50%, 6/1/17 ...................................... 436,302
1,994,532 6.50%, 8/1/17 ...................................... 2,077,893
1,590,000 4.50%, 9/25/25 ..................................... 1,605,921
203,291 7.50%, 5/1/27 ...................................... 217,686
199,199 7.50%, 4/1/29, Pool # 323645 ....................... 213,471
Principal Value
Amount (Note 2)
$233,431 7.50%, 4/1/29 ...................................... $250,155
15,308 7.50%, 8/1/29, Pool # 252712 ....................... 16,380
209,913 7.50%, 7/1/30 ...................................... 224,952
783,973 7.50%, 12/1/30 ..................................... 838,652
2,176,624 6.09%, 10/25/31 .................................... 2,207,065
1,101,219 7.00%, 6/1/32 ...................................... 1,161,960
3,383,199 6.50%, 7/1/32 ...................................... 3,508,222
960,000 4.50%, 7/25/33 ..................................... 956,008
756,764 3.16%, 4/25/35* .................................... 757,616
3,839,888 5.50%, 7/25/42 ..................................... 3,856,856
4,270,008 6.50%, 9/25/42 ..................................... 4,461,365
7,645,000 5.50%, 11/25/43 .................................... 7,777,632
6,272,968 5.95%, 2/25/44 ..................................... 6,424,369
4,625,718 6.00%, 7/25/44 ..................................... 4,784,575
932,939 6.50%, 8/25/44 ..................................... 976,032
1,576,902 7.00%, 1/25/48 ..................................... 1,666,095
FREDDIE MAC
90 8.00%, 5/1/06, Pool #E30879 ........................ 92
5,590,779 6.98%, 10/1/10, Pool #W20024(d) .................... 6,211,913
1,285,000 6.90%, 12/1/10(d) .................................. 1,429,691
3,304,652 4.00%, 8/15/13 ..................................... 3,299,566
1,490,000 4.50%, 8/15/13 ..................................... 1,498,742
4,000,000 4.50%, 5/15/15 ..................................... 4,009,086
3,105,000 4.50%, 7/15/16 ..................................... 3,120,129
4,578,264 6.00%, 5/15/17 ..................................... 4,756,139
5,095,000 5.50%, 12/15/27 .................................... 5,218,922
4,169,000 5.50%, 1/15/28 ..................................... 4,272,857
5,240,000 5.00%, 2/15/28 ..................................... 5,311,385
1,240,000 5.50%, 4/15/30 ..................................... 1,270,628
1,384,792 7.00%, 10/15/30 .................................... 1,424,386
------------
TOTAL MORTGAGE-BACKED SECURITIES ................... 184,128,485
------------
U.S. TREASURY OBLIGATIONS (14.3%):
2,835,000 U.S. Treasury Bonds, 7.50%, 11/15/16 (L) ........... 3,716,620
24,860,000 U.S. Treasury Bonds, 6.00%, 2/15/26 (L) ............ 30,638,011
4,930,000 U.S. Treasury Notes, 2.25%, 2/15/07 (L) ............ 4,825,819
25,025,000 U.S. Treasury Notes, 3.375%, 11/15/08 (L) . ........ 24,779,654
4,560,000 U.S. Treasury Notes, 4.75%, 5/15/14 (L) ............ 4,840,016
6,545,187 U.S. Treasury Inflation Protection Bond,
3.375%, 1/15/07 (L) ................................ 6,756,583
------------
TOTAL U.S. TREASURY OBLIGATIONS .................... 75,556,703
------------
Shares
- ------
CLOSED END INVESTMENT COMPANIES (0.5%):
40,100 BlackRock Income Opportunity Trust ................. 454,333
358,900 MFS Government Markets Income Trust ................ 2,397,452
------------
TOTAL CLOSED END INVESTMENT
COMPANIES .......................................... 2,851,785
------------
Principal
Amount
- ---------
CASH EQUIVALENTS (8.8%):
$46,233,787 JPMorgan Cash Trade Execution (c) .................. 46,233,787
------------
TOTAL CASH EQUIVALENTS ............................. 46,233,787
------------
Shares
- ------
INVESTMENTS HELD AS COLLATERAL FOR
LOANED SECURITIES (6.3%):
31,000,000 Investment Grade Repurchase Agreement
(Merrill Lynch, 3.5175%, 7/1/05) ................... 31,000,000
2,030,352 U.S. Agency Mortgages (Morgan Stanley,
3.42%, 7/1/05) ..................................... 2,030,352
------------
TOTAL INVESTMENTS HELD AS COLLATERAL
FOR LOANED SECURITIES .............................. 33,030,352
------------
TOTAL (COST $579,533,177) (a) ...................... $589,185,335
------------
See accompanying notes to financial statements.
14
PORTFOLIO OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
JUNE 30, 2005
Percentages indicated are based on net assets of $527,208,072.
(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
$781,305. Cost for federal income tax differs from value by net unrealized
appreciation (depreciation) of securities as follows:
Unrealized appreciation $11,092,514
Unrealized depreciation (2,221,661)
-----------
Net unrealized appreciation $ 8,870,853
===========
* Variable rate security. The interest rate shown reflects the rate in
effect as of June 30, 2005.
(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.
(d) Fair valued with market value determined pursuant to procedures adopted by
the Board of Trustees.
(L) A portion or all of the security is on loan.
See accompanying notes to financial statements.
15
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT BALANCED GROWTH FUND
JUNE 30, 2005
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
INVESTMENT COMPANIES (98.6%):
6,439,163 New Covenant Growth Fund(b) .......................... $192,659,762
4,240,039 New Covenant Income Fund(b) .......................... 108,375,408
------------
TOTAL INVESTMENT COMPANIES ...................................... 301,035,170
------------
Principal
Amount
- ---------
CASH EQUIVALENTS (1.4%):
$4,154,009 JP Morgan Cash Trade Execution ....................... 4,154,009
------------
TOTAL CASH EQUIVALENTS .......................................... 4,154,009
------------
TOTAL INVESTMENTS
(COST $287,605,896)(a) .......................................... $305,189,179
============
Percentages indicated are based on net assets of $305,523,725.
(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
$14,412,731. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation $6,165,531
Unrealized depreciation (2,994,979)
----------
Net unrealized appreciation $3,170,552
==========
(b) Investment in an affiliate in accordance with Section 12(d)(1)(G) of the
Investment Company Act of 1940, as amended.
NEW COVENANT BALANCED INCOME FUND
JUNE 30, 2005
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
INVESTMENT COMPANIES (98.8%):
1,637,290 New Covenant Growth Fund(b) ......................... $48,987,702
2,896,078 New Covenant Income Fund(b) ......................... 74,023,743
------------
TOTAL INVESTMENT COMPANIES ...................................... 123,011,445
------------
Principal
Amount
- ---------
CASH EQUIVALENTS (1.2%):
$1,507,519 JP Morgan Cash Trade Execution ...................... 1,507,519
------------
TOTAL CASH EQUIVALENTS .......................................... 1,507,519
------------
TOTAL INVESTMENTS
(COST $116,971,400)(a) .......................................... $124,518,964
============
Percentages indicated are based on net assets of $124,809,394.
(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
$2,161,597. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation $ 6,069,799
Unrealized depreciation (683,832)
-----------
Net unrealized appreciation $ 5,385,967
===========
(b) Investment in an affiliate in accordance with Section 12(d)(1)(G) of the
Investment Company Act of 1940, as amended.
See accompanying notes to financial statements.
16
This Page Intentionally Left Blank.
17
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
BALANCED BALANCED
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (Cost $770,283,785,
$546,502,825, $4,154,009 and $1,507,519,
respectively) ................................... $876,574,260 $556,154,983 $4,154,009 $1,507,519
Investments in affiliates (Cost $0, $0, $283,451,887
and $115,463,881, respectively) ................. - - 301,035,170 123,011,445
Investments held as collateral for loaned securities
(Cost $113,240,073, $33,030,352, $0, $0
respectively) ................................... 113,240,073 33,030,352 - -
------------- ----------- ----------- -----------
Total Investments .................................. 989,814,333 589,185,335 305,189,179 124,518,964
Cash ............................................... - - 395,190 316,374
Foreign currency, at value (Cost $388,542, $0, $0
and $0, respectively) ........................... 389,165 - - -
Interest and dividends receivable .................. 819,462 3,597,469 9,495 4,079
Receivable for investments sold .................... 10,332,454 8,413,838 - -
Receivable from affiliate .......................... - - 63,111 25,505
Reclaims receivable ................................ 77,641 - - -
Prepaid expenses and other assets .................. 46,012 33,626 23,212 15,190
------------- ----------- ----------- -----------
Total Assets: ...................................... 1,001,479,067 601,230,268 305,680,187 124,880,112
------------- ----------- ----------- -----------
LIABILITIES:
Payable for investments purchased .................. 8,690,131 40,207,924 - -
Payable for foreign currency contracts ............. 1,445 - - -
Payable for return of collateral received on
securities loaned ............................... 113,240,073 33,030,352 - -
Cash overdraft ..................................... 8,672 - - -
Accrued expenses and other payables:
Investment advisory fees ........................ 589,282 257,131 - -
Administration fees ............................. 5,978 3,619 2,111 849
Shareholder service fees ........................ 129,907 69,906 63,111 25,505
Other ........................................... 230,909 453,264 91,240 44,364
------------- ----------- ----------- -----------
Total Liabilities: ................................. 122,896,397 74,022,196 156,462 70,718
------------- ----------- ----------- -----------
NET ASSETS: ........................................... $878,582,670 $527,208,072 $305,523,725 $124,809,394
============= =========== =========== ===========
NET ASSETS CONSIST OF:
Paid - in Capital .................................. 909,303,769 518,067,982 312,723,302 123,099,026
Undistributed (distributions in excess of) net
investment income ............................... (139,239) 33,110 17,228 7,971
Accumulated net realized gains/(losses) on
investments and foreign currency transactions ... (136,868,561) (545,178) (24,800,088) (5,845,167)
Net unrealized appreciation on investment
transactions and translation of assets and
liabilities denominated in foreign currencies ... 106,286,701 9,652,158 17,583,283 7,547,564
------------- ----------- ----------- -----------
Total Net Assets ...................................... $878,582,670 $527,208,072 $305,523,725 $124,809,394
============= =========== =========== ===========
Shares outstanding .................................... 29,368,021 20,627,751 3,906,923 6,602,991
Net asset value, offering and redemption price
per share .......................................... $29.92 $25.56 $78.20 $18.90
See accompanying notes to financial statements.
18
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
FOR THE YEAR ENDED JUNE 30, 2005
BALANCED BALANCED
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest .......................................... $306,504 $23,652,599 $82,307 $32,690
Dividend .......................................... 15,536,287 372,875 - -
Dividend income from affiliates ................... - - 5,916,266 3,358,770
Foreign tax withholding ........................... (254,724) - - -
Income from securities lending .................... 124,434 49,179 - -
----------- ----------- ----------- ----------
Total Income: ..................................... 15,712,501 24,074,653 5,998,573 3,391,460
----------- ----------- ----------- ----------
EXPENSES:
Investment advisory fees .......................... 8,334,533 3,974,345 - -
Administration fees ............................... 168,360 105,974 60,991 24,622
Shareholder service fees .......................... 1,897,421 1,167,293 256,524 102,038
Accounting fees ................................... 258,179 150,766 78,789 33,367
Audit fees ........................................ 38,219 23,840 13,558 4,536
Custodian fees .................................... 367,767 59,937 2,750 2,750
Insurance fees .................................... 32,345 20,680 11,512 4,833
Legal fees ........................................ 80,228 48,433 28,777 11,444
Registration and filing fees ...................... 21,035 21,835 20,841 19,259
Printing fees ..................................... 39,482 25,087 14,252 5,779
Chief Compliance Officer fees ..................... 47,859 28,336 17,132 6,673
Transfer agent fees ............................... 74,188 67,220 149,165 84,151
Other fees ........................................ 111,989 58,676 29,561 12,195
----------- ----------- ----------- ----------
Total expenses before contractual fee reductions .. 11,471,605 5,752,422 683,852 311,647
Expenses contractually reduced .................... (1,922,875) (1,182,831) (265,567) (105,669)
Expenses paid indirectly .......................... (164,060) - - -
----------- ----------- ----------- ----------
Total Expenses .................................... 9,384,670 4,569,591 418,285 205,978
----------- ----------- ----------- ----------
NET INVESTMENT INCOME .............................. 6,327,831 19,505,062 5,580,288 3,185,482
----------- ----------- ----------- ----------
REALIZED AND UNREALIZED
GAINS/(LOSSES) FROM INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gains/(losses) on investment and
foreign currency transactions .................. 28,371,237 4,612,365 (6,816,575) (1,712,699)
Realized gain distribution from underlying funds .. - - 274,261(+) 181,705(+)
Net change in unrealized appreciation/
(depreciation) on investments and translation of
assets and liabilities denominated in foreign
currency ....................................... 26,222,561 6,746,552 20,674,190 5,905,857
----------- ----------- ----------- ----------
Net realized/unrealized gains/(losses) on
investments and foreign currency ............... 54,593,798 11,358,917 14,131,876 4,374,863
----------- ----------- ----------- ----------
Change in net assets resulting from operations .... $60,921,629 $30,863,979 $19,712,164 $7,560,345
=========== =========== =========== ==========
(+) Represents realized gains from investment transactions with affiliates.
See accompanying notes to financial statements.
19
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
--------------------------- ----------------------------
GROWTH FUND INCOME FUND
--------------------------- ----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004 JUNE 30, 2005 JUNE 30, 2004
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income .............................................. $6,327,831 $2,505,244 $19,505,062 $19,421,219
Net realized gains/(losses) on investment and foreign currency
transactions .................................................... 28,371,237 49,605,122 4,612,365 (1,027,902)
Net change in unrealized appreciation/(depreciation) on
investments and translation of assets and liabilities denominated
in foreign currency ............................................. 26,222,561 87,618,337 6,746,552 (18,444,921)
------------ ------------ ------------ ------------
Change in net assets resulting from operations ..................... 60,921,629 139,728,703 30,863,979 (51,604)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ......................................... (6,321,345) (2,835,338) (21,501,226) (18,264,083)
From net realized gains/(losses) on investment ..................... -- -- (1,303,165) (8,717,403)
Tax return of capital .............................................. -- -- -- (2,311,618)
------------ ------------ ------------ ------------
Change in net assets from shareholder distributions ................ (6,321,345) (2,835,338) (22,804,391) (29,293,104)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Change in net assets from share transactions (Note 5) .............. (10,593,031) (11,202,779) (4,876,397) 27,635,785
------------ ------------ ------------ ------------
Change in net assets ............................................... 44,007,253 125,690,586 3,183,191 (1,708,923)
------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period ................................................ 834,575,417 708,884,831 524,024,881 525,733,804
------------ ------------ ------------ ------------
End of period ...................................................... $878,582,670 $834,575,417 $527,208,072 $524,024,881
============ ============ ============ ============
Undistributed (distributions in excess of) net investment income ... $(139,239) $(170,489) $33,110 $ -
------------ ------------ ------------- ------------
See accompanying notes to financial statements.
20
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
------------------------------- ----------------------------
BALANCED GROWTH FUND BALANCED INCOME FUND
------------------------------- ----------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004 JUNE 30, 2005 JUNE 30, 2004
------------- ------------- ------------- -------------
OPERATIONS:
Net investment income ............................................. $5,580,288 $5,313,634 $3,185,482 $3,614,507
Net realized gains/(losses) on investment and foreign currency
transactions ................................................... (6,816,575) (5,757,753) (1,712,699) (1,749,924)
Realized gain distributions from underlying funds ................. 274,261(+) 743,947(+) 181,705(+) 552,083(+)
Net change in unrealized appreciation/(depreciation) on investments
and translation of assets and liabilities denominated in foreign
currency ....................................................... 20,674,190 31,737,323 5,905,857 6,133,930
------------ ------------ ------------ ------------
Change in net assets resulting from operations .................... 19,712,164 32,037,151 7,560,345 8,550,596
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ........................................ (5,571,223) (4,860,882) (3,181,809) (3,278,062)
Tax return of capital ............................................. - (299,330) - (233,142)
------------ ------------ ------------ ------------
Change in net assets from shareholder distributions ............... (5,571,223) (5,160,212) (3,181,809) (3,511,204)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Change in net assets from share transactions (Note 5) ............. (11,063,444) 3,102,552 (4,484,502) (2,700,088)
------------ ------------ ------------ ------------
Change in net assets .............................................. 3,077,497 29,979,491 (105,966) 2,339,304
------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period ............................................... 302,446,228 272,466,737 124,915,360 122,576,056
------------ ------------ ------------ ------------
End of period ..................................................... $305,523,725 $302,446,228 $124,809,394 $124,915,360
============ ============ ============ ============
Undistributed (distributions in excess of) net investment income .. $17,228 $(497,494) $7,971 $(337,348)
------------ ------------ ------------ ------------
(+) Represents realized gains from investment transactions with affiliates.
See accompanying notes to financial statements.
21
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
- -----------------------------------------------------------------------------------------------------------------------------------
GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001
--------------------------- --------------------------- -------------
Net Asset Value, Beginning of Period .................. $28.07 $23.51 $24.13 $29.26 $42.07
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income .............................. 0.21 0.07 0.10 0.04 0.10
Net realized and unrealized gains/(losses) from
investments and foreign currency transactions ... 1.85 4.58 (0.63) (5.11) (4.86)
-------- -------- -------- -------- --------
Total from Investment Activities ................... 2.06 4.65 (0.53) (5.07) (4.76)
-------- -------- -------- -------- --------
DIVIDENDS
Net investment income .............................. (0.21) (0.09) (0.09) (0.01) -
Net realized gains ................................. - - - - (7.80)
Tax return of capital .............................. - - - (0.05) (0.25)
-------- -------- -------- -------- --------
Total Dividends .................................... (0.21) (0.09) (0.09) (0.06) (8.05)
-------- -------- -------- -------- --------
Change in net asset value per share ................ 1.85 4.56 (0.62) (5.13) (12.81)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ..................... $29.92 $28.07 $23.51 $24.13 $29.26
======== ======== ======== ======== ========
Total Return ....................................... 7.38% 19.81% (2.17%) (17.34%) (12.33%)
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's) ............. $878,583 $834,575 $708,885 $695,622 $816,901
Ratio of expenses to average net assets ............ 1.11% 1.13% 1.13% 1.11% 1.07%
Ratio of net investment income to average net assets 0.75% 0.32% 0.47% 0.15% 0.20%
Ratio of expenses to average net assets(*) ......... 1.36% 1.39% 1.13% 1.11% 1.07%
Portfolio turnover rate ............................ 76% 94% 63% 79% 142%
- --------------------------------------------------------------------------------
(*) Ratios excluding waivers and expenses paid indirectly.
See accompanying notes to financial statements.
22
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001
------------- ------------- -------------- ------------- -------------
Net Asset Value, Beginning of Period ............. $25.17 $26.62 $25.54 $24.83 $23.89
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES:
Net investment income ......................... 0.94 0.96 1.00 1.21 1.50
Net realized and unrealized gains/(losses) from
investments ................................ 0.55 (0.96) 1.42 0.73 0.92
----------- ----------- ----------- ----------- -----------
Total from Investment Activities .............. 1.49 - 2.42 1.94 2.42
----------- ----------- ----------- ----------- -----------
DIVIDENDS
Net investment income ......................... (1.04) (0.90) (1.06) (1.23) (1.48)
Net realized gains ............................ (0.06) (0.44) (0.28) - -
Tax return of capital ......................... - (0.11) - - -
----------- ----------- ----------- ----------- -----------
Total Dividends ............................... (1.10) (1.45) (1.34) (1.23) (1.48)
----------- ----------- ----------- ----------- -----------
Change in net asset value per share ........... 0.39 (1.45) 1.08 0.71 0.94
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD ................ $25.56 $25.17 $26.62 $25.54 $24.83
=========== =========== =========== =========== ===========
Total Return .................................. 6.02% 0.00% 9.63% 7.97% 10.31%
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's) ........ $527,208 $524,025 $525,734 $545,356 $559,286
Ratio of expenses to average net assets ....... 0.86% 0.86% 0.85% 0.84% 0.82%
Ratio of net investment income to average net
assets ..................................... 3.68% 3.70% 3.79% 4.72% 5.99%
Ratio of expenses to average net assets(*) .... 1.08% 1.11% 0.85% 0.84% 0.82%
Portfolio turnover rate ....................... 206% 242% 226% 290% 191%
- --------------------------------------------------------------------------------
(*) Ratios excluding waivers.
See accompanying notes to financial statements.
23
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCED GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001
------------- ------------- ------------- ------------- -------------
Net Asset Value, Beginning of Period ........... $74.65 $67.88 $67.25 $81.92 $91.84
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income ....................... 1.41(#) 1.34(#) 1.27(#) 1.52(#) 2.33(#)
Net realized and unrealized gains/(losses)
from investments ......................... 3.54(#) 6.73(#) 0.71(#) (7.44)(#) (5.07)(#)
-------- -------- -------- -------- --------
Total from Investment Activities ............ 4.95 8.07 1.98 (5.92) (2.74)
-------- -------- -------- -------- --------
DIVIDENDS
Net investment income ....................... (1.40) (1.23) (1.27) (1.34) (5.68)
Net realized gains .......................... - - (0.08) (7.00) (1.50)
Tax return of capital ....................... - (0.07) - (0.41) -
-------- -------- -------- -------- --------
Total Dividends ............................. (1.40) (1.30) (1.35) (8.75) (7.18)
-------- -------- -------- -------- --------
Change in net asset value per share ......... 3.55 6.77 0.63 (14.67) (9.92)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD .............. $78.20 $74.65 $67.88 $67.25 $81.92
======== ======== ======== ======== ========
Total Return ................................ 6.68% 11.95% 3.10% (7.79%) (3.01%)
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's) ...... $305,524 $302,446 $272,467 $286,314 $314,873
Ratio of expenses to average net assets ..... 0.14% 0.15% 0.14% 0.11% 0.09%
Ratio of net investment income to average net
assets ................................... 1.83% 1.52% 1.96% 2.02% 2.61%
Ratio of expenses to average net assets(*) .. 0.22% 0.15% 0.14% 0.11% 0.09%
Portfolio turnover rate ..................... 5% 12% 15% 18% 18%
- --------------------------------------------------------------------------------
(*) Ratios excluding waivers
(#) Represents income or gains/(losses) from affiliates.
See accompanying notes to financial statements.
24
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCED INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001
------------- ------------- ------------- ------------- -------------
Net Asset Value, Beginning of Period ........ $18.24 $17.52 $17.10 $18.88 $20.01
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income .................... 0.48(#) 0.53(#) 0.52(#) 0.57(#) 0.78(#)
Net realized and unrealized gains/(losses)
from investments ..................... 0.66(#) 0.70(#) 0.47(#) (0.84)(#) (0.38)(#)
-------- -------- -------- -------- --------
Total from Investment Activities ......... 1.14 1.23 0.99 (0.27) 0.40
-------- -------- -------- -------- --------
DIVIDENDS
Net investment income .................... (0.48) (0.48) (0.52) (0.54) (1.22)
Net realized gains ....................... - - (0.05) (0.94) (0.31)
Tax return of capital .................... - (0.03) - (0.03) -
-------- -------- -------- -------- --------
Total Dividends .......................... (0.48) (0.51) (0.57) (1.51) (1.53)
-------- -------- -------- -------- --------
Change in net asset value per share ...... 0.66 0.72 0.42 (1.78) (1.13)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ........... $18.90 $18.24 $17.52 $17.10 $18.88
======== ======== ======== ======== ========
Total Return ............................. 6.32% 7.07% 6.00% (1.55%) 2.08%
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's) ... $124,809 $124,915 $122,576 $114,013 $116,519
Ratio of expenses to average net assets .. 0.17% 0.18% 0.16% 0.14% 0.12%
Ratio of net investment income to average
net assets ........................... 2.58% 2.34% 3.08% 3.13% 3.88%
Ratio of expenses to average net assets(*) 0.25% 0.18% 0.16% 0.14% 0.12%
Portfolio turnover rate .................. 6% 12% 18% 11% 20%
- --------------------------------------------------------------------------------
(*) Ratios excluding waivers
(#) Represents income or gains/(losses) from affiliates.
See accompanying notes to financial statements.
25
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
1. ORGANIZATION
New Covenant Funds (the "Trust"), an open-end, diversified management
investment company, was organized as a Delaware business trust on September 30,
1998. It currently consists of four investment funds: New Covenant Growth Fund
("Growth Fund"), New Covenant Income Fund ("Income Fund"), New Covenant Balanced
Growth Fund ("Balanced Growth"), and New Covenant Balanced Income Fund
("Balanced Income"), (individually, a "Fund," and collectively, the "Funds").
The Funds commenced operations on July 1, 1999. The Trust's authorized capital
consists of an unlimited number of shares of beneficial interest of $0.001 par
value. The Funds' investment advisor is the NCF Investment Department of New
Covenant Trust Company, N.A., a wholly owned subsidiary of the Presbyterian
Church (U.S.A.) Foundation (the "Advisor").
The objectives of the Funds are as follows:
Growth Fund Long-term capital appreciation. Dividend income, if
any, will be incidental.
Income Fund High level of current income with preservation of
capital.
Balanced Growth Fund Capital appreciation with less risk than would be
present in a portfolio of only common stocks.
Balanced Income Fund Current income and long-term growth of capital.
Under the Trust's organizational documents, its officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Trust
enters into contracts with its vendors and others that provide general
indemnification. Each Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against a Fund.
However, based on experience, the Funds expect the risk of loss to be remote.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with GAAP.
PORTFOLIO VALUATION: Fund investments are recorded at market value. Portfolio
securities listed on a domestic or foreign exchange are valued at the last sale
price on the day of valuation or, if there was no sale that day, at the last
reported bid price as of the close of trading. Equity securities traded on
NASDAQ use the official closing price. Equity securities which are traded in
the over-the-counter market only, but which are not included on NASDAQ, are
valued at the mean between the last preceding bid and ask prices. Debt
securities with a remaining maturity of sixty days or more are valued using a
pricing service when such prices are believed to reflect fair market value.
Debt securities with a remaining maturity of less than sixty days are valued at
amortized cost, which approximates market value. Investment companies are valued
at net asset value. All other securities and securities with no readily
determinable market values are valued using procedures adopted by the Board of
Trustees. Factors used in determining fair value include but are not limited to:
type of security or asset, fundamental analytical data relating to the
investment in the security, evaluation of the forces that influence the market
in which the security is purchased and sold, and information as to any
transactions or offers with respect to the security.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the New York Stock Exchange ("NYSE"). Occasionally, events affecting the value
of such securities may occur between such times and the close of the NYSE that
will not be reflected in the security's market value. If events materially
affecting the value of such securities occur during such period, these
securities will be valued at their fair value according to procedures adopted by
the Board of Trustees. All securities and other assets of a Fund initially
expressed in foreign currencies will be converted to U.S. dollar values at the
foreign exchange rate every business day, generally at 4:00PM EST.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities 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 of premium or accretion of discount
for both financial reporting and tax purposes. Dividend income is recorded on
the ex-dividend date. Gains or losses realized on sales of securities are
determined by comparing the identified cost of the security lot sold with the
net sales proceeds.
26
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
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 the Fund writes a call or put option, an amount equal to the
premium received is reflected as a liability. The liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The premium paid by the Fund for the purchase of a call or put option is
recorded as an investment and subsequently "marked-to-market" to reflect the
current market value of the option purchased. The Fund is subject to the risk of
an imperfect correlation between movement in the price of the option and the
price of the underlying security. Risks may also arise due to illiquid secondary
markets for the options. There were no options outstanding at June 30, 2005.
FOREIGN CURRENCY TRANSLATION: The books and records of the Funds are maintained
in U.S. dollars. Investment valuation and other assets and liabilities initially
expressed in foreign currencies are converted each business day into U.S.
dollars based upon current exchange rates. Purchases and sales of foreign
investments and income and expenses are converted into U.S. dollars based upon
exchange rates prevailing on the respective dates of such transactions. That
portion of unrealized gains or losses on investments due to fluctuations in
foreign currency exchange rates is not separately disclosed.
The Funds do not isolate the portion of gains and losses on investments in
securities that is due to changes in the foreign exchange rates from that which
is due to changes in the market prices of such securities. The Funds report
gains and losses on foreign currency related transactions as realized and
unrealized gains and losses for financial reporting purposes, whereas such
gains and losses are treated as ordinary income or loss for U.S. federal income
tax purposes.
FORWARD FOREIGN CURRENCY CONTRACTS: Certain Funds enter into forward foreign
currency contracts as hedges against either specific transactions or portfolio
positions. All commitments are "marked-to-market" daily at the applicable
foreign exchange rate and any resulting unrealized gains or losses are recorded
currently. The Fund realizes gains and losses at the time foreign forward
contracts are extinguished. There were no contracts outstanding at June 30,
2005.
LOANS OF PORTFOLIO SECURITIES: The Growth Fund and Income Fund may lend their
securities pursuant to a securities lending agreement ("Lending Agreement") with
JPMorgan Chase Bank, N.A. ("JPMorgan"). 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 JPMorgan pursuant to the terms of the Lending Agreement.
All such investments are made at the risk of the Funds and, as such, the Funds
are liable for investment losses. To the extent a loan is secured by non-cash
collateral, the borrower is required to pay a loan premium. Non-cash collateral
received cannot be sold or repledged. Net income earned on the investment of
cash collateral and loan premiums received on non-cash collateral are allocated
between JPMorgan and the Funds in accordance with the Lending Agreement. Income
allocated to the Funds is included in interest income in the respective
Statements of Operations.
At June 30, 2005, the cash collateral received by the Growth Fund and the Income
Fund was invested in repurchase agreements with interest rates ranging from
3.42% to 3.52% and a maturity date of July 1, 2005. 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 Trustees and when, in the judgment of the Advisor, the consideration
which can be earned currently from such securities loans justifies the
attendant risks. Loans are subject to termination by the Funds or the borrower
at any time, and are, therefore, not considered to be illiquid investments.
In the event of bankruptcy of the borrower, realization/retention of the
collateral may be subject to legal proceedings.
The value of the loaned securities and related collateral at June 30, 2005, was
as follows:
- --------------------------------------------------------------------------------
VALUE OF
VALUE OF VALUE OF NON-CASH
FUND SECURITIES LOANED CASH COLLATERAL COLLATERAL
- --------------------------------------------------------------------------------
Growth Fund $ 111,274,178 $ 113,240,073 $ 1,009,425
Income Fund 47,161,112 33,030,352 15,014,981
27
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
REPURCHASE AGREEMENTS: The Funds may enter into repurchase agreements, which are
secured by obligations of the U.S. government, with a bank, broker-dealer or
other financial institution. Each repurchase agreement is at least 102%
collateralized and marked-to-market. However, in the event of default or
bankruptcy by the counterparty to the agreement, realization of the collateral
may be 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 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 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 June 30, 2005, the Funds had outstanding when-issued or delayed-delivery
purchase commitments with corresponding assets segregated, as follows:
- --------------------------------------------------------------------------------
FUND AMOUNT
- --------------------------------------------------------------------------------
Income Fund ....................................................... $27,947,235
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income of all Funds are declared and paid at least annually. For all Funds, all
net realized long-term or short-term capital gains, if any, will be declared and
distributed at least annually. Interest and dividend payments will normally be
distributed as income dividends on a quarterly basis for each of the Funds.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations, which may differ from GAAP. These differences are
primarily due to differing treatments of income, gains and losses on various
investment securities held by a Fund, timing differences in the recognition of
income, gains and losses and differing characterizations of distributions made
by the Fund.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassifications. To
the extent that distributions exceed net investment income and net realized
gains for tax purposes, they are reported as returns of capital.
FEDERAL INCOME TAXES: It is each Fund's intention to continue to qualify
annually as a regulated investment company by complying with the appropriate
provisions of the Internal Revenue Code of 1986, as amended. Accordingly, no
provision for federal income tax has been made.
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 $164,060, or 0.02% as a percentage of the average
daily net assets of the Fund on an annualized basis for the year ended June 30,
2005.
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
28
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
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 Fund's average daily net
assets and the Income Fund pays the Advisor a monthly fee at the annual rate of
0.75% of the Income Fund's average daily net assets. The Advisor does not
receive advisory fees for the Balanced Growth and the Balanced Income Funds. The
Advisor has entered into Sub-Advisory Agreements with six Sub-Advisors to assist
in the selection and management of the Growth Fund's and Income Fund's
investment securities. It is the responsibility of the Sub-Advisors, under the
direction of the Advisor, to make day-to-day investment decisions for these
Funds. The Advisor pays each Sub-Advisor a quarterly fee for their services.
The Advisor pays the Sub-Advisor's fee directly from its own advisory fees. The
sub-advisory fees are based on the assets of a Fund for which the Sub-Advisor is
responsible for making investment decisions.
As of March 31, 2005, the following are the Sub-Advisors for the Growth Fund:
Capital Guardian Trust Company, Mazama Capital Management Inc., Santa Barbara
Asset Management Inc., Sound Shore Management Inc., and Wellington Management
Company, LLP.
Tattersall Advisory Group is the Sub-Advisor for the Income Fund.
The Trust employs a Chief Compliance Officer ("CCO") who receives a portion of
his compensation as approved by the Board of Trustees, as well as reimbursement
of out-of-pocket expenses. The CCO is also an employee of the Advisor.
The Trust is a party to 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 monthly an Authorized Service Provider (which may
include affiliates of the Funds) a shareholder services fee at the rate of 0.25%
on an annual basis of the average daily net assets of the shares of the Fund
attributable to or held in the name of the Authorized Service Provider for
providing certain administrative services to Fund shareholders with whom the
Authorized Service Provider has a servicing relationship. In connection with the
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
terms of the Transfer Agency Agreement, BISYS Ohio is entitled to account based
fees and annual fund level fees, as well as reimbursement of out-of-pocket
expenses incurred in providing transfer agency services. Under the fund
accounting agreement, 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 Trust's average daily net assets. Effective April 22, 2005,
the administration agreement was amended. As a result of this amendment, BISYS
Ohio will annually waive $280,000.
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 JPMorgan.
No officer, trustee or employee of the Trust, BISYS, or any affiliate thereof,
except the CCO, receives any compensation from the Funds for serving as a
Trustee or officer of the Trust. The Funds reimburse expenses incurred by the
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 year ended
June 30, 2005, were as follows:
- -------------------------------------------------------------------------------
FUND PURCHASES SALES
- -------------------------------------------------------------------------------
Growth Fund ................................. $ 631,623,460 $ 643,958,022
Income Fund ................................. 1,051,731,188 1,042,050,464
Balanced Growth Fund ........................ 14,972,789 26,260,817
Balanced Income Fund ......................... 7,107,412 11,746,987
- -------------------------------------------------------------------------------
29
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
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 Trust
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.
YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004
- --------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
GROWTH FUND:
Issued 1,761,611 $50,628,532 2,170,262 $57,829,249
Reinvested 13,925 403,177 3,060 180,445
Redeemed (2,144,207) (61,624,740) (2,593,638) (69,212,473)
- --------------------------------------------------------------------------------------------------------------------
Net decrease (368,671) $(10,593,031) (420,316) $(11,202,779)
- --------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004
- --------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
INCOME FUND:
Issued 1,545,813 $39,398,853 2,606,939 $67,488,886
Reinvested 95,941 2,523,604 276,892 7,160,195
Redeemed (1,830,986) (46,798,854) (1,814,304) (47,013,296)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (189,232) $(4,876,397) 1,069,527 $27,635,785
- --------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004
- --------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
BALANCED GROWTH FUND:
Issued 329,356 $25,120,358 471,865 $34,471,118
Reinvested 53,802 4,122,054 51,451 3,764,861
Redeemed (527,726) (40,305,856) (485,890) (35,133,427)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (144,568) $(11,063,444) 37,426 $3,102,552
- --------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2005 JUNE 30, 2004
- --------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------------
BALANCED INCOME FUND:
Issued 494,461 $9,215,771 627,611 $11,370,210
Reinvested 103,269 1,924,091 113,907 2,066,329
Redeemed (842,433) (15,624,364) (891,041) (16,136,627)
- --------------------------------------------------------------------------------------------------------------------
Net decrease (244,703) $(4,484,502) (149,523) $(2,700,088)
- --------------------------------------------------------------------------------------------------------------------
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 in
securities that are illiquid because of restrictions on transferability or other
reasons. Repurchase agreements with deemed maturities in excess of seven days
and securities that are not registered under the Securities Act of 1933, as
amended, but that may be purchased by institutional buyers pursuant to Rule 144A
are subject to this 15% limit (unless such securities are variable-amount
master-demand notes with maturities of nine months or less or unless the Board
determines that a liquid trading market exists). The Funds may purchase
securities which are not registered under the Securities Act but which can be
sold to "qualified institutional buyers" in accordance with Rule 144A
30
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
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 unrated but deemed equivalent to those rated below
investment grade by the portfolio managers. The lower the ratings of such debt
securities, the greater their risks. These debt instruments generally offer a
higher current yield than that available from higher-grade issues, and typically
involve greater risks. The yields on lower-rated securities will fluctuate over
time. In general, prices of all bonds rise when interest rates fall and fall
when interest rates rise. Lower-rated securities are subject to adverse changes
in general economic conditions and to changes in the financial condition of
their issuers. During periods of economic downturn or rising interest rates,
issuers of these instruments may experience financial stress that could
adversely affect their ability to make payments of principal and interest, and
increase the possibility of default.
The Balanced Funds invest their assets primarily in the Growth Fund and the
Income Fund. By investing primarily in shares of these Funds, shareholders of
the Balanced Funds indirectly pay a portion of the operating expenses,
management expenses and brokerage costs of the underlying Funds as well as their
own operating expenses. Thus, shareholders of the Balanced Funds may indirectly
pay slightly higher total operating expenses and other costs than they would pay
by directly owning shares of the Growth Fund and Income Fund. Total fees and
expenses to be borne by investors in either Balanced Fund will depend on the
portion of the Funds' assets invested in the Growth Fund and in the Income Fund.
A change in the asset allocation of either Balanced Fund could increase or
reduce the fees and expenses actually borne by investors in that Fund. The
Balanced Funds are also subject to rebalancing risk. Rebalancing activities,
while undertaken to maintain a Fund's investment risk-to-reward ratio, may cause
the Fund to underperform other funds with similar investment objectives. For the
Balanced Growth Fund, it is possible after rebalancing from equities into a
greater percentage of fixed-income securities, that equities will outperform
fixed-income investments. For the Balanced Income Fund, it is possible that
after rebalancing from fixed-income securities into a greater percentage of
equity securities, that fixed-income securities will outperform equity
investments. The performance of the Balanced Growth Fund and the Balanced
Income Fund depends on the performance of the underlying Funds in which they
invest.
7. DISTRIBUTION INFORMATION
Income and long-term capital gain distributions are determined in accordance
with Federal income tax regulations, which may differ from generally accepted
accounting principles accepted in the United States. The tax character of
distributions paid during the fiscal years ended June 30, 2004 and June 30,
2005, were as follows:
DISTRIBUTIONS PAID FROM
--------------------------------------------
ORDINARY NET LONG TERM TOTAL TAXABLE RETURN OF TOTAL DISTRIBUTIONS
INCOME CAPITAL GAINS DISTRIBUTIONS CAPITAL PAID*
---------------------------------------------------------------------------------------------------------------------
2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
---------------------------------------------------------------------------------------------------------------------
Growth Fund $6,321,345 $2,835,338 $-- $-- $6,321,345 $2,835,338 $-- $-- $6,321,345 $2,835,338
Income Fund 21,851,973 23,126,931 952,418 3,854,555 22,804,391 26,981,486 -- 2,311,618 22,804,391 29,293,104
Balanced
Growth Fund 5,571,223 4,816,139 -- 44,742 5,571,223 4,860,881 -- 299,330 5,571,223 5,160,211
Balanced
Income Fund 3,181,809 3,277,160 -- 903 3,181,809 3,278,063 -- 233,142 3,181,809 3,511,205
- -----------------------------------------------------------------------------------------------------------------------------------
* Total distributions paid may differ from the Statements of Changes in Net
Assets because distributions are recognized when actually paid for tax
purposes.
8. FEDERAL INCOME TAXES
As of June 30, 2005, the funds had available for Federal tax purposes unused
capital loss carryforwards expiring as follows:
2010 2011 2012 2013 TOTAL
----------- ----------- ----------- ---------- ------------
Growth Fund $16,200,076 $96,688,185 $14,207,521 -- $127,095,782
Income Fund -- -- -- -- --
Balanced Growth Fund -- -- $1,737,647 $6,966,125 $8,703,772
Balanced Income Fund -- -- $2,891,415 $792,155 $3,683,570
- ------------------------------------------------------------------------------------------------------
31
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
Under certain tax law, certain capital losses realized after October 31, and
within the taxable year may be deferred and treated as occurring on the first
business day of the following year. For the period ended June 30, 2005, the
Funds deferred to July 1, 2005, post-October capital losses of:
POST-OCTOBER LOSSES
-------------------
Balanced Growth Fund $1,683,585
As of June 30, 2005, the components of accumulated earnings/(deficit) on a tax
basis were as follows:
TOTAL
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED UNREALIZED ACCUMULATED
ORDINARY LONG-TERM ACCUMULATED DIVIDENDS CAPITAL AND APPRECIATION/ EARNINGS
INCOME CAPITAL GAINS EARNINGS PAYABLE OTHER LOSSES (DEPRECIATION)* (DEFICIT)
- --------------------------------------------------------------------------------------------------------------------------------
Growth Fund $362,021 -- $362,021 -- $(127,095,782) $96,012,662 $(30,721,099)
Income Fund 269,237 -- 269,237 -- -- 8,870,853 9,140,090
Balanced
Growth Fund 17,228 -- 17,228 -- (10,387,357) 3,170,552 (7,199,577)
Balanced
Income Fund 7,971 -- 7,971 -- (3,683,570) 5,385,967 1,710,368
- --------------------------------------------------------------------------------------------------------------------------------
* The differences between the book-basis and tax-basis unrealized appreciation
(depreciation) is attributable primarily to: tax deferral of losses on wash
sales, the difference between book and tax amortization methods for premium
and market discount, and the return of capital adjustments from real estate
investment trusts.
9. OTHER FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For the year ended June 30, 2005, dividends paid by the Funds may be subject to
a maximum tax rate of 15% as provided for by the Jobs and Growth Tax Relief Act
of 2003. The Funds intend to designate the maximum amount allowable as taxed at
a maximum rate of 15%. Complete information will be reported in conjunction
with the 2005 Form 1099-DIV.
For the year ended June 30, 2005, the following Funds paid qualified dividend
income of:
QUALIFIED DIVIDEND INCOME
-------------------------
Growth Fund........................................... $14,684,320
Balanced Growth Fund.................................. 1,403,795
Balanced Income Fund.................................. 349,088
The Fund designates the following percentage of distributions eligible for the
dividends received deduction for corporations:
AMOUNT
------
Growth Fund.................................................... 100%
Balanced Growth Fund........................................... 25
Balanced Income Fund.......................................... 11
32
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
New Covenant Funds:
We have audited the accompanying statements of assets and liabilities, of the
New Covenant Funds (comprised of New Covenant Growth Fund, New Covenant Income
Fund, New Covenant Balanced Growth Fund, and New Covenant Balanced Income Fund)
(collectively "the Funds") including the portfolios of investments, as of June
30, 2005, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2005, by correspondence with the custodian
and brokers. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the New Covenant Funds as of June 30, 2005, the results of their operations
for the year then ended, the changes in their net assets for each of the two
years in the period then ended, and financial highlights for each of the five
years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Columbus, Ohio
August 17, 2005
SUPPLEMENTAL DATA (UNAUDITED)
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
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.
QUARTERLY HOLDINGS
Portfolio holdings statements for the Funds for the quarters ended March 31 and
September 30, are available, without charge, on the Securities and Exchange
Commission's website at http://www.sec.gov.
ADDITIONAL FUND INFORMATION - HYPOTHETICAL COST OF INVESTING
As a shareholder of the New Covenant Funds, you incur ongoing costs, including
management fees and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the New Covenant
Funds and to compare these costs with the ongoing costs of investing in other
mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from January 1, 2005 through June 30,
2005.
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**
1/1/05 6/30/05 1/1/05 - 6/30/05 1/1/05 - 6/30/05
- ----------------------------------------------------------------------------------------------------------------------
Growth Fund $1,000.00 $1,003.70 $5.56 1.12%
Income Fund 1,000.00 1,021.70 4.31 0.86%
Balanced Growth Fund 1,000.00 1,009.50 0.65 0.13%
Balanced Income Fund 1,000.00 1,013.60 0.80 0.16%
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. Therefore, the table is useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds.
BEGINNING ENDING EXPENSE PAID EXPENSE RATIO
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD* DURING PERIOD**
1/1/05 6/30/05 1/1/05 - 6/30/05 1/1/05 - 6/30/05
- -----------------------------------------------------------------------------------------------------------------------
Growth Fund $1,000.00 $1,019.24 $5.61 1.12%
Income Fund 1,000.00 1,020.53 4.31 0.86%
Balanced Growth Fund 1,000.00 1,024.15 0.65 0.13%
Balanced Income Fund 1,000.00 1,024.00 0.80 0.16%
* 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.
34
SUPPLEMENTAL DATA (UNAUDITED)
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
APPROVAL OF THE CONTINUATION OF THE INVESTMENT ADVISORY AND
SUB-ADVISORY AGREEMENTS
The Advisory Agreement and Sub-Advisory Agreements (collectively, the
"Agreements") were most recently reapproved by the Board of Trustees on May 16,
2005. Relevant provisions of the Investment Company Act of 1940 specifically
provide that it is the duty of the Board to request and evaluate such
information as the Board determines is necessary to allow the Board to properly
consider the continuation of the Agreements, and it is the duty of the Advisor
and the Sub-Advisors to furnish the Trustees with such information as is
responsive to their request. Accordingly, in determining whether to renew the
Agreements, the Board of Trustees requested, and the Advisor and the
Sub-Advisors provided, information and data relevant to the Board's
consideration. This included materials regarding the investment performance of
the Funds and information regarding the fees and expenses of the Funds, as
compared to other similar mutual funds. As part of its deliberations, the Board
also considered and relied upon the information about the Funds, the Advisor and
the Sub-Advisors that had been provided to them throughout the past year in
connection with their regular Board meetings at which they engage in the ongoing
oversight of the Funds and their operations.
Among the factors the Board considered was the overall performance of each Fund
and each Sub-Advisor relative to the performance of similar mutual funds in each
Fund's peer group and relative to applicable benchmark indexes on a long-term
basis and, particularly for the two new Sub-Advisors, over shorter time periods.
The Board took note of the fact that the performance results achieved for the
Funds were favorable on both a short-term and on a long-term basis and that the
Advisor produced these results in a manner consistent with the stated investment
objectives and policies of each of the Funds. The Board looked at the
contribution made by each Sub-Advisor to the short-term and, if relevant,
long-term performance. The Board also took note of the long-term relationship
between the Advisor and the Funds and the efforts that had been undertaken by
the Advisor to foster the growth and development of the Funds since their
inception. In addition, the Board compared the expenses of each of the Funds to
the expenses of their peers, based on data compiled by an independent source.
The Board noted the range of investment advisory and administrative services
provided by the Advisor to the Funds and the nature, extent and quality of these
services. The Board also reviewed financial information concerning the Advisor
relating to its operation of the Funds, noting the overall profitability of the
relationship with the Funds to the Advisor and the financial soundness of the
Advisor as demonstrated by the financial information provided. In addition, the
Board discussed with the Advisor economies of scale that could be realized by
the Funds and the impact of potential economies of scale on the fees assessed on
the Funds. The Trustees considered information regarding additions to the
Advisor's staff (particularly the Vice President of Finance, one of whose
primary responsibilities is the oversight and coordination of Fund-related
matters), the Advisor's retention of a consultant to assist in the selection of
new Sub-Advisors, the Advisor's services in connection with negotiating a
relationship with a new custodian that is projected to save the Funds money in
custodial expenses, and other additional services provided by the Advisor to the
Funds, and concluded that the shareholders benefit from these additional
services under the Agreement.
In reaching their conclusion with respect to the continuation of the Agreements,
the Trustees did not identify any one single factor as being controlling;
rather, the Trustees took note of a combination of factors that influenced their
decision-making process. The Board did, however, identify the performance of the
Funds, the commitment of the Advisor to the successful operation of the Funds,
and the level of expenses of the Funds as being important elements of their
consideration. The Board also took particular note of the unique duties that the
Advisor undertakes in order to assure that the Funds are invested in a manner
that is consistent with the social-witness principles of the Presbyterian Church
(U.S.A.). The Board further considered the fact that the Advisor had undertaken
during the year to waive its investment advisory fees to the extent of the
amount of shareholder services fees paid by the Funds during the year in order
to limit the overall operating expenses of the Funds.
Based upon their review and consideration of these factors and other matters
deemed relevant by the Board in reaching an informed business judgment, the
Board of Trustees, including a majority of the Independent Trustees, concluded
that the terms of the Advisory Agreement and the Sub-Advisory Agreements are
fair and reasonable in light of the services provided and the Board therefore
voted to renew the Agreements for an additional one-year period. During this
process the Independent Trustees were counseled by their own independent legal
counsel (as such term is defined in the rules under the 1940 Act).
35
TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
JUNE 30, 2005
TRUSTEES AND OFFICERS OF THE NEW COVENANT FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN OTHER
POSITION(S) LENGTH TERM OF OFFICE AND PRINCIPAL FUND COMPLEX TRUSTEESHIPS/
HELD WITH OF TIME OCCUPATION(S) DURING PAST OVERSEEN BY DIRECTORSHIPS
NAME AND AGE TRUST SERVED 5 YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
F. Kenneth Bateman Trustee Since Attorney, Gerber & Bateman, P.A. 4 None
200 E.Twelfth St., Suite C inception (1999 to present);Attorney, Potter,
Jeffersonville, IN 47130 Mills & Bateman, P.A. (1997 to 1999);
Age: 65 Trustee, Presbyterian Church (U.S.A.)
Foundation (1995 to 2001)
Gail C. Duree Trustee Since Investment Consultant, Montvie 4 None
200 E.Twelfth St., Suite C inception Boulevard Presbyterian Church (1994
Jeffersonville, IN 47130 to present);Women's Foundation of
Age: 58 Colorado (1995 to present); Logan
School (1996 to present)
Cynthia S. Gooch Trustee Since Retired;Trustee, Presbyterian Church 4 None
200 E.Twelfth St., Suite C inception (U.S.A.) Foundation (1997 to present)
Jeffersonville, IN 47130
Age: 72
Rev. Donald B. Register Trustee Since Pastor, Sixth-Grace Presbyterian 4 None
200 E.Twelfth St., Suite C inception Church, Chicago, IL (1988 to present)
Jeffersonville, IN 47130
Age: 68
John D. Stuart Trustee February Independent Financial Consultant 4 None
200 E.Twelfth St., Suite C 2002
Jeffersonville, IN 47130
Age: 74
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Leech President May 2005 President and Chief Executive Officer 4 None
200 E.Twelfth St., Suite C and Trustee of the Presbyterian Church (U.S.A.)
Jeffersonville, IN 47130 Foundation (2000 to present)
Age: 60
- ------------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------------
Dennis J. Murphy Vice Since Executive Vice President and Chief N/A N/A
200 E.Twelfth St., Suite C President Inception Investment Officer, Presbyterian
Jeffersonville, IN 47130 Church (U.S.A.) Foundation and New
Age: 63 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 Vice President and Investment Officer, N/A N/A
200 E.Twelfth St., Suite C President 2003 New Covenant Trust Company (2000
Jeffersonville, IN 47130 - present).
Age: 51
Harry Harper Chief August Chief Compliance Officer, New N/A N/A
200 E.Twelfth St., Suite C Compliance 2004 Covenant Trust Company (2002-
Jeffersonville, IN 47130 Officer present); Chief Compliance Officer,
Age: 60 Allegheny Financial Group (2000-
2002); Chief Compliance Officer,
Keystone Financial (1997-2000).
Steve Pierce Treasurer May 2005 Vice President of Financial Services, N/A N/A
3435 Stelzer Rd. Suite 1000 BISYS Fund Services (1999 - present)
Columbus, OH 43219
Age: 39
Charles J. Daly Secretary February Counsel, BISYS Fund Services N/A N/A
3435 Stelzer Rd., Suite 1000 2004 (November 2003-present); Associate,
Columbus, OH 43219 Goodwin Proctor LLP (2001 -2003)
Age: 34
Alaina V. Metz Assistant February Vice President, Blue Sky Compliance, N/A N/A
3435 Stelzer Rd., Suite 1000 Secretary 2004 BISYS Fund Services (1995 - present)
Columbus, OH 43219
Age: 37
[GRAPHICS] This report is authorized for distribution only if
preceded or accompanied by a current prospectus.
Shares of New Covenant Funds are distributed by
New Covenant Funds Distributor, Inc.
200 E. Twelfth Street
Jeffersonville, IN 47130.
New Covenant Funds
200 E. Twelfth Street
Jeffersonville, IN 47130
FDN 12-05-08
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. THE REGISTRANT HAS 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. THIS CODE OF ETHICS IS INCLUDED AS AN
EXHIBIT.
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 12(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.
3(a)(1) THE REGISTRANT'S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT
HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT
COMMITTEE.
3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERT IS JACK STUART, WHO IS
"INDEPENDENT" FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR.
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.
2004 $ 62,500
2005 $ 66,000
(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.
2004 $ 0.00
2005 $ 0.00
(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.
2004 $ 15,000
2005 $ 16,500
(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.
2004 $ 0.00
2005 $ 0.00
(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.
In accordance with the Funds' Audit Committee Charter, all
audit engagements on behalf of the funds are pre-approved by the Funds'
Audit Committee.
The Audit Committee of the Trust must pre-approve all audit services and
non-audit services that the Auditor provides to the Trust.
The Audit Committee of the Trust must pre-approve any engagement of the Auditor
to provide non-audit services to the Trust's investment adviser and to
affiliates of the Trust's investment adviser ("Service Affiliates") during the
period of the Auditor's engagement to provide audit services to the Trust, if
the non-audit services to the Service Affiliate directly impact the Trust's
operations and financial reporting.
Any non-audit services, whether to the Trust or to any Service Affiliate, that
have not been pre-approved by the Audit Committee and that are estimated not to
exceed $25,000, may be approved by a single designated member of the Audit
Committee.
(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.
2004 100%
2005 100%
(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.
Not applicable.
(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.
2004 $ 63,046
2005 $ 38,525
(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.
THE REGISTRANT'S AUDIT COMMITTEE HAS EVALUATED THE NON-AUDIT SERVICES THAT THE
PRINCIPAL ACCOUNTANT PROVIDED TO THE REGISTRANT'S INVESTMENT ADVISOR (AND THE
ADVISOR'S RELEVANT AFFILIATES), WHICH SERVICES THE COMMITTEE DID NOT
PRE-APPROVE, AND HAS CONCLUDED THAT THE PROVISIONS OF THOSE SERVICES WAS
COMPATIBLE WITH MAINTAINGING THE ACCOUNTANT'S INDEPENDENCE.
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 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.
THE CODE OF ETHICS THAT IS THE SUBJECT OF THE DISCLOSURE REQUIRED BY ITEM 2 IS
ATTACHED HERETO.
(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
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By (Signature and Title)* /s/ Steve Pierce
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Steve Pierce, Treasurer
Date September 08, 2005
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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/ Steve Pierce
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Steve Pierce, Treasurer
Date September 08, 2005
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By (Signature and Title)* /s/ Robert Leech
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Robert Leech, President
Date September 08, 2005
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