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
(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: 800-858-6127
Date of fiscal year end: June 30, 2006
Date of reporting period: December 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
New Covenant Growth Fund
SEMI-ANNUAL REPORT
December 31, 2005
(NEW COVENANT FUNDS LOGO)
New Covenant Growth Fund
New Covenant Income Fund
New Covenant Balanced Growth Fund
New Covenant Balanced Income Fund
YOU CAN GET FREE COPIES OF REPORTS AND THE SAI, OR REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING A BROKER THAT SELLS THE
FUNDS, OR BY CONTACTING THE FUNDS AT:
NEW COVENANT FUNDS
3435 STELZER ROAD
COLUMBUS, OH 43219
TELEPHONE: 800-858-6127
INTERNET: HTTP://WWW.NEWCOVENANTFUNDS.COM
YOU CAN REVIEW AND GET COPIES OF THE FUNDS' REPORTS AND SAI AT THE PUBLIC
REFERENCE ROOM OF THE SECURITIES AND EXCHANGE COMMISSION.YOU CAN GET TEXT-ONLY
COPIES:
- - FOR A DUPLICATING FEE: BY WRITING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, DC 20549- 6009, BY CALLING 202-942-8090, OR BY
ELECTRONIC REQUEST BY E-MAILING THE SEC AT THE FOLLOWING ADDRESS:
PUBLICINFO@SEC.GOV
- - FREE FROM THE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV.
TABLE OF CONTENTS
Shareholder Letter........................................................ 2
Portfolios of Investments................................................. 4
Statements of Assets and Liabilities...................................... 16
Statements of Operations.................................................. 17
Statements of Changes in Net Assets....................................... 18
Financial Highlights...................................................... 20
Notes to Financial Statements............................................. 24
Supplemental Data......................................................... 30
Trustees and Officers..................................................... 33
TO OUR SHAREHOLDERS
NEW COVENANT FUNDS
DECEMBER 31, 2005
Dear Shareholders:
The six-month period between July 1, 2005 and December 31, 2005 was marked by
slowing economic growth and healthy stock-market gains. Bonds posted generally
flat returns.
The economy grew solidly at the beginning of the period, but then saw its growth
rate decrease during the fourth calendar quarter. That slowdown in part
reflected weaker consumer spending. Sustained high energy prices cut into the
discretionary income of American consumers, whose spending power also was
crimped by high debt levels. Corporate spending remained strong, however,
supported by historically strong balance sheets and cash flow.
Inflation steadily picked up during the second half of 2005, pushed higher in
part by high oil and gas prices. Several factors contributed to higher energy
prices, including strong demand from emerging economies such as China and India,
supply disruptions caused by Gulf Coast hurricanes in August and September, and
instability in the Middle East. The trend toward higher inflation led the
Federal Reserve Board to raise its target short-term interest rate four times,
for a total increase of 1.00%--a strategy designed to reduce inflationary
pressures by increasing borrowing costs and slowing growth.
Stocks produced solid gains in that environment, despite the headwinds of rising
interest rates, rising energy prices and concerns about the pending retirement
of Federal Reserve Chairman Alan Greenspan. Growth stocks modestly outperformed
value stocks during both calendar quarters, possibly marking a change in market
leadership after a half-decade of superior returns from value shares. Growth
stocks appeared to be coming into favor due to their ability to generate
earnings growth in a moderating economic environment.
Mid-cap stocks outperformed small- and large-cap shares. Small caps had led the
market for several years coming into this six-month period, while large caps had
lagged. Large stocks and small stocks generated nearly even returns during the
second half of 2005, however, possibly indicating that investors are in the
process of shifting their attention toward larger stocks.
International stocks outperformed their domestic counterparts. Stocks in
emerging markets began the period with relatively low valuations, which
increased as many of those shares benefited from global economic growth and high
commodity prices. Japan's market also performed well. The Japanese economy
appears to have achieved a sustainable recovery after an extremely long period
of weakness.
The fixed-income markets saw a flattening yield curve during this period, as
yields on short-term bonds rose more than yields on longer-term issues. The
Federal Reserve's interest-rate increases pushed up yields on the short end of
the curve, while strong demand and low supply for longer-term securities kept
their yields from rising as rapidly. Mortgage-backed securities led the market,
as investors favored the higher yields available on those bonds.
Intermediate-term Treasury bonds performed relatively poorly, as did corporate
bonds, which suffered from credit downgrades at major U.S. automakers.
Dennis Murphy, Executive Vice President and Chief Investment Officer of the New
Covenant Trust Company, the Advisor to the New Covenant Funds, retired as of
December 31, 2005. Senior Vice President George W. Rue III, who had served as
acting Chief Investment Officer since July 1, 2005, assumed the CIO position.
THE NEW COVENANT GROWTH FUND**
The New Covenant Growth Fund gained 7.87% during the six-month period ended
December 31, 2005. That compared to a 5.76% return for the Fund's benchmark, the
Standard & Poor's 500 Stock Index(1).
This Fund takes a core-satellite approach to diversification, by investing the
majority of the Fund's assets in a core portfolio and adding satellite
portfolios of value, growth and international stocks. The Fund also spreads its
assets among small-, mid- and large-cap shares to gain exposure to the broad
equity market.
AVERAGE ANNUAL NEW COVENANT
TOTAL RETURNS GROWTH FUND
- --------------- ------------
Latest Quarter* 2.21%
Year to Date* 8.27%
1 Year 8.27%
3 Years 15.25%
5 Years 1.18%
10 Years 6.28%
That diversification boosted returns relative to the benchmark during the
six-month period. The Fund's small- and mid-cap growth allocation, which is
managed by Mazama Capital Management, performed especially well and boosted
performance against the large-cap S&P 500. The Fund also held approximately 15%
of its assets in international stocks, and that allocation lifted relative
returns as well. The international sub-advisor, Capital Guardian, held an
overweight stake in emerging markets stocks, so their strong performance buoyed
relative gains.
THE NEW COVENANT INCOME FUND**
The New Covenant Income Fund returned -0.20% during the six-month period ended
December 31, 2005. That compared to a -0.08% return for its benchmark, the
Lehman Brothers Aggregate Bond Index(2).
The Fund held a shorter average duration than that of its benchmark throughout
the period. That strategy boosted relative performance as interest rates rose.
An overweight position in mortgage-backed securities also helped relative
returns, as those securities led the fixed-income markets. Finally, the Fund
employed a "barbell" structure: It focused on bonds with either very short-term
maturities or somewhat long-term maturities, and avoided intermediate-term
issues. That structure lifted performance against the benchmark as well, as
intermediate-term securities trailed the market.
AVERAGE ANNUAL NEW COVENANT
TOTAL RETURNS INCOME FUND
- --------------- ------------
Latest Quarter* 0.52%
Year to Date* 1.96%
1 Year 1.96%
3 Years 3.11%
5 Years 5.29%
10 Years 5.44%
2
TO OUR SHAREHOLDERS
NEW COVENANT FUNDS
DECEMBER 31, 2005
THE NEW COVENANT BALANCED GROWTH FUND**
The New Covenant Balanced Growth Fund gained 4.77% during the six-month period
ended December 31, 2005. That compared to a 4.01% return for its benchmark, a
composite index that is comprised of a 60% weighting in the S&P 500 and a 40%
weighting in the Lehman Brothers Aggregate Bond Index.
We held a slightly overweight position in stocks throughout the period. That
positioning helped the Fund outperform its benchmark for two reasons: Stocks in
general outperformed bonds, and this Fund's equity allocation out-gained the S&P
500 Stock Index. As of December 31, 2005, the Fund held 63.9% of the Fund's
portfolio (excluding cash equivalents) in the Growth Fund and 36.1% in the
Income Fund.(3)
NEW COVENANT
AVERAGE ANNUAL BALANCED
TOTAL RETURNS GROWTH FUND
- --------------- ------------
Latest Quarter* 1.55%
Year to Date* 5.76%
1 Year 5.76%
3 Years 10.42%
5 Years 3.28%
10 Years 6.40%
THE NEW COVENANT BALANCED INCOME FUND**
The New Covenant Balanced Income Fund gained 2.82% during the six-month period
ended December 31, 2005. That compared to a 3.38% return for its benchmark, a
composite index with a 35% allocation to the S&P 500 index and a 65% allocation
to the Lehman Brothers Aggregate Bond Index.
The Balanced Income Fund, like the Balanced Growth Fund, held a slightly
overweight allocation to stocks during the period under review. As of the end of
the period, the Fund held 38.9% of the Fund's portfolio (excluding cash
equivalents) in the Growth Fund, with 61.1% in the Income Fund. That overweight
equity stake helped the Fund modestly outperform its benchmark for the period,
as did the strong relative performance of the New Covenant Growth Fund.(3)
NEW COVENANT
AVERAGE ANNUAL BALANCED
TOTAL RETURNS INCOME FUND
- --------------- ------------
Latest Quarter* 1.10%
Year to Date* 4.22%
1 Year 4.22%
3 Years 7.43%
5 Years 4.21%
10 Years 6.02%
/s/ George W. Rue III
----------------------------------------
George W. Rue III
Senior 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.
* Aggregate total return.
** 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.
(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) 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.
(3) Portfolio composition is subject to change.
(4) A subsidiary of the Presbyterian Foundation.
PORTFOLIO ALLOCATION (UNAUDITED) (SUBJECT TO CHANGE)
GROWTH FUND:***
SECURITY ALLOCATION PERCENTAGE OF MARKET VALUE
- ------------------- --------------------------
Financials 21%
Information Technology 18%
Health Care 17%
Consumer Discretionary 14%
Industrials 12%
Energy 7%
Consumer Staples 6%
Telecommunications 2%
Materials 2%
Utilities 1%
---
Total 100%
BALANCED GROWTH FUND:
SECURITY ALLOCATION PERCENTAGE OF MARKET VALUE
- ------------------- --------------------------
Investment Companies 99%
Cash Equivalents 1%
---
Total 100%
*** Amounts do not include investments held as collateral for loaned
securities.
INCOME FUND:***
SECURITY ALLOCATION PERCENTAGE OF MARKET VALUE
- ------------------- --------------------------
Government Agency/MBS 44%
Non-Government Agency/MBS 20%
Corporates 17%
Treasuries 12%
Asset Backed 4%
Cash 3%
---
Total 100%
BALANCED INCOME FUND:
SECURITY ALLOCATION PERCENTAGE OF MARKET VALUE
- ------------------- --------------------------
Investment Companies 99%
Cash Equivalents 1%
---
Total 100%
3
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ -----------
COMMON STOCKS (97.9%):
ADVERTISING (1.1%):
292,000 Interpublic Group of Cos., Inc. (b) (L) ................ $ 2,817,800
35,900 Lamar Advertising Co. (b) .............................. 1,656,426
7,600 Monster Worldwide, Inc. (b) ............................ 310,232
60,600 Omnicom Group, Inc. .................................... 5,158,878
-----------
9,943,336
-----------
AEROSPACE (0.2%):
39,800 United Technologies Corp. .............................. 2,225,218
-----------
AUTOMOTIVE (1.1%):
6,200 American Axle & Manufacturing
Holdings, Inc. (L) .................................. 113,646
5,500 Bayerische Motoren Werke AG ............................ 240,008
6,100 DaimlerChrysler AG ..................................... 309,932
122,000 Honda Motor Co. Ltd. (L) ............................... 3,534,339
12,400 Hyundai Motor Co., Ltd. - GDR .......................... 596,785
26,000 NGK Spark Plug Co (L) .................................. 561,817
90,500 Nissan Motors .......................................... 916,427
12,900 Noble International, Ltd. .............................. 268,836
1,400 Renault SA ............................................. 113,765
5,020 Reynolds & Reynolds Co. ................................ 140,911
37,000 Suzuki Motor Corp. ..................................... 685,069
13,480 Tenneco Automotive, Inc. (b) ........................... 264,343
15,400 Titan International, Inc. .............................. 265,650
53,600 TRW Automotive Holdings Corp. (b) (L) .................. 1,412,360
4,300 Volkswagen AG (L) ...................................... 226,641
-----------
9,650,529
-----------
BANKING (5.8%):
28,134 ABN AMRO Holdings NV ................................... 732,973
2,900 ABSA Group, Ltd. ....................................... 46,217
72,000 Akbank Turk Anonim Sirketi ............................. 587,102
6,300 Anchor BanCorp Wisconsin, Inc.(L) ...................... 191,142
1,890 BancFirst(L) ........................................... 149,310
84,000 Banco Bil bao Vizcaya .................................. 1,493,967
74,000 Banco Santander Central Hispano SA ..................... 973,122
253,380 Bank of America Corp. .................................. 11,693,488
34,000 Bank of Yokohama, Ltd. ................................. 278,027
21,700 Banque Nationale de Paris .............................. 1,749,278
16,500 Barclays Plc ........................................... 173,049
1,115,000 China Construction Bank (b) (R) ........................ 388,286
15,200 City Holding Co. (L) ................................... 546,440
45,400 Comerica, Inc. ......................................... 2,576,904
9,314 Credit Suisse Group .................................... 473,617
26,900 Credito Italiano ....................................... 184,644
4,300 Deutsche Bank AG ....................................... 415,754
7,300 East West Bancorp, Inc. (L) ............................ 266,377
2,700 Farmers Capital Bank Corp. (L) ......................... 82,998
3,820 First Citizens Bancshares, Inc., Class A (L) ........... 666,284
1,900 First Community Bancorp ................................ 103,303
4,900 Fortis ................................................. 155,399
2,300 Gold Banc Corp., Inc. .................................. 41,906
18,370 Holderbank Financiere Glarus ........................... 1,247,810
12,000 HSBC Holdings Plc ...................................... 192,180
11,300 Irwin Financial Corp. (L) .............................. 242,046
46,356 JPMorgan Chase & Co. ................................... 1,839,870
23,852 Kookmin Bank -ADR ...................................... 1,781,983
48,700 Lloyds TSB Group Plc ................................... 408,355
228 Mitsubishi Tokyo Financial Group, Inc. ................. 3,091,263
53,100 Northern Trust Corp. ................................... 2,751,642
1,394,500 PT Bank Mandiri ........................................ 232,653
101,700 Public Bank Berhad ..................................... 172,236
14,600 R & G Financial Corp. (L) .............................. 192,720
48,600 Royal Bank of Scotland Group Plc (R) ................... 1,464,056
3,600 Societe Generale ....................................... 441,142
25,000 Standard Bank .......................................... 299,053
31,200 Standard Chartered Plc ................................. 693,536
226 Sumitomo Mitsui Financial Group ........................ 2,393,865
18,900 SVB Financial Group (b) (L) ............................ 885,276
3,700 Taylor Capital Group Inc.(L) ........................... 149,480
11,230 TriCo Bancshares (L) ................................... 262,670
222,400 U.S. Bancorp ........................................... 6,647,536
12,000 Unibanco - GDR (L) ..................................... 762,840
35,400 Wells Fargo & Co. ...................................... 2,224,182
3,500 Wintrust Financial Corp. (L) ........................... 192,150
-----------
52,538,131
-----------
BROADCASTING AND MEDIA (3.3%):
6,000 CKX, Inc. (b) .......................................... 78,000
82,272 Comcast Corp. New Class A (b) .......................... 2,135,781
7,600 Comcast Corp. Special Class A (b) ...................... 195,244
16,140 Cumulus Media, Inc. (b) (L) ............................ 200,297
227,000 DIRECTV Group, Inc. (b) (L) ............................ 3,205,240
17,900 Entravision Communications Corp. (b) (L) ............... 127,448
28,300 Gannett Co., Inc. ...................................... 1,714,131
8,800 Grupo Televisa ......................................... 708,400
36,978 Liberty Global Inc. (b) (L) ............................ 832,005
36,978 Liberty Global, Inc., Class C (b) (L) .................. 783,934
409,000 Liberty Media Corp. (b) ................................ 3,218,830
8,300 Radio One, Inc. (b) .................................... 85,241
632,350 Time Warner, Inc. ...................................... 11,028,184
146,200 Viacom, Inc. - Class B ................................. 4,766,120
13,900 Warner Music Group Corp. ............................... 267,853
-----------
29,346,708
-----------
CHEMICALS (0.8%):
9,100 Potash Corporation of Saskatchewan ..................... 725,413
12,500 Dow Chemical Co. ....................................... 547,750
128,500 Lyondell Chemical Co. .................................. 3,060,870
74,500 Mosaic Co., Inc. (b) (L) ............................... 1,089,935
15,100 Nitto Denko Corp. ...................................... 1,175,909
2,700 Norsk Hydro ASA ........................................ 276,434
10,500 Takeda Chemical Industries ............................. 567,664
-----------
7,443,975
-----------
COMMERCIAL SERVICES (2.0%):
15,569 Aaron Rents, Inc. (L) .................................. 328,195
162,500 Accenture Ltd. ......................................... 4,691,374
17,000 Apollo Group, Inc., Class A (b) (L) .................... 1,027,820
15,400 Avocent Corp. (b) ...................................... 418,726
16,890 CSG Systems International, Inc. (b) (L) ................ 376,985
9,200 Education Management Corp. (b) ......................... 308,292
8,980 Gevity HR, Inc.(L) ..................................... 230,966
4,600 Global Payments, Inc. .................................. 214,406
1,300 Heidrick & Struggles International, Inc. (b) ........... 41,665
8,080 IKON Office Solutions, Inc. ............................ 84,113
1,600 ITT Educational Services, Inc. (b) ..................... 94,576
20,590 John H.Harland Co. ..................................... 774,184
7,300 McGrath Rentcorp (L) ................................... 202,940
58,300 Pitney Bowes, Inc. ..................................... 2,463,175
6,100 Pre-Paid Legal Services, Inc. (L) ...................... 233,081
14,500 Rent-Way, Inc. (b) (L) ................................. 92,655
4,700 Robert Half International, Inc. ........................ 178,083
See accompanying notes to financial statements.
4
PORTFOLIO OF INVESTMENTS
NEW COVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ----------
500 The Corporate Executive Board Co. ......................... 44,850
14,200 Weight Watchers International, Inc. (b) ................... 701,906
296,300 Xerox Corp. (b) ........................................... 4,340,795
39,700 XM Satellite Radio Holdings, Inc., Class A (b) (L) ........ 1,083,016
----------
17,931,803
----------
COMPUTER SERVICES AND SOFTWARE (6.1%):
32,900 Affiliated Computer Svcs Inc., Class A (b) (L) ............ 1,947,022
4,320 ANSYS,lnc.(b) (L) ......................................... 184,421
39,900 Automatic Data Processing, Inc. ........................... 1,831,011
6,700 Avid Technology, Inc. (b) ................................. 366,892
432,200 Cisco Systems, Inc. (b) ................................... 7,399,264
9,200 Covansys Corp. (b) ........................................ 125,212
2,700 Dassault Systemes SA ...................................... 151,863
191,600 Dell, Inc. (b) ............................................ 5,746,084
52,000 Diebold, Inc. (L) ......................................... 1,976,000
21,200 Earthlink, Inc. (b) (L) ................................... 235,532
7,870 Epicor Software Corp. (b) ................................. 111,203
18,400 GSI Commerce Inc. (b) (L) ................................. 277,656
82,000 Hewlett Packard Co. ....................................... 2,347,660
3,400 Imation Corp. ............................................. 156,638
5,700 Infosys Technologies Ltd. ................................. 460,902
8,700 Infousa, Inc. (L) ......................................... 95,091
1,800 Intergraph Corp.(b) (L) ................................... 89,658
100,300 International Business Machines Corp. ..................... 8,244,660
7,900 Jack Henry & Associates, Inc. ............................. 150,732
7,790 Komag, Inc. (b) (L) ....................................... 270,001
22,900 Lexmark International, Inc. (b) ........................... 1,026,607
6,700 Manhattan Associates, Inc. (b) ............................ 137,216
195,600 Maxtor Corp. (b) (L) ...................................... 1,357,464
495,300 Microsoft Corp. ........................................... 12,952,095
3,970 Microstrategy, Inc. (b) (L) ............................... 328,478
44,500 Parametric Technology Corp.(b) ............................ 271,450
19,100 Pixar (b) (L) ............................................. 1,006,952
2,920 Progress Software Corp. (b) (L) ........................... 82,870
11,800 Red Hats, Inc. (b) (L) .................................... 321,432
4,900 Renaissance Learning, Inc. (L) ............................ 92,659
4,700 SAP AG .................................................... 849,103
2,400 SAPAG -ADR ................................................ 108,168
58,100 Seagate Technology (L) .................................... 1,161,419
8,000 SERENA Software, Inc. (b) (L) ............................. 187,520
21,000 Sonic Solutions (b) ....................................... 317,310
7,070 Sybase, Inc. (b) (L) ...................................... 154,550
8,200 Syntel, Inc. (L) .......................................... 170,806
20,000 THQ,lnc.(b) (L) ........................................... 477,000
8,080 Transaction Systems Architects, Inc. (b) (L) .............. 232,623
11,000 Trend Micro, Inc. (L) ..................................... 415,727
24,000 Trizetto Group, Inc. (b) (L) .............................. 407,760
34,330 United Online, Inc. (L) ................................... 488,173
9,200 Wipro, Ltd.-ADR (L) ....................................... 109,940
----------
54,824,824
----------
CONSTRUCTION AND BUILDING MATERIALS (1.7%):
36,200 Bouygues SA (L) ........................................... 1,763,271
2,634 Brookfield Homes Corp. (L) ................................ 130,989
18,581 CRH Pic ................................................... 544,354
86,100 D. R. Horton, Inc. ........................................ 3,076,352
4,110 Eagle Materials (L) ....................................... 502,900
8,000 Granite Construction, Inc. (L) ............................ 287,280
29,000 Hovnanian Enterprises-A (b) (L) ........................... 1,439,560
28,000 Jacobs Engineering Group, Inc. (b) (L) .................... 1,900,359
34,400 Lafarge North America, Inc. ............................... 1,892,688
3,400 Lafarge SA ................................................ 304,757
1,800 Perini Corp.(b) ........................................... 43,470
3,400 Quanex Corp.(L) ........................................... 169,898
4,040 Ryland Group, Inc. (L) .................................... 291,405
22,000 Sekisui House Ltd. (L) .................................... 276,655
48,160 Standard-Pacific Corp. (L) ................................ 1,772,288
18,000 The Stanley Works ......................................... 864,720
6,700 Titan Cement Co. .......................................... 272,618
4,400 WCI Communities, Inc. (b) (L) ............................. 118,140
----------
15,651,704
----------
CONSUMER PRODUCTS (2.8%):
60,309 Amcor Ltd.(L) ............................................. 330,357
31,000 Cintas Corp. .............................................. 1,276,580
4,700 CNS, Inc. (L) ............................................. 102,977
83,700 General Mills, Inc. ....................................... 4,128,084
20,200 Herman Miller, Inc. ....................................... 569,438
7,890 K-Swiss, Inc. (L) ......................................... 255,952
74,300 Kimberly-Clark Corp. ...................................... 4,431,995
5,700 L'OREAL SA ................................................ 422,177
158,000 Li & Fung Ltd. ............................................ 304,657
18,000 Nikon Corp.(L) ............................................ 283,857
3,900 Nintendo Co. .............................................. 470,935
10,900 Nu Skin Enterprises, Inc. ................................. 191,622
8,400 Polo Ralph Lauren Corp. ................................... 471,576
144,842 Procter & Gamble Co. ...................................... 8,383,454
34,680 Sherwin-Williams Co.(L) ................................... 1,575,166
4,820 Stanley Furniture Co., Inc. ............................... 111,728
17,620 Toro Co. (L) .............................................. 771,227
37,000 Toto Ltd.(L) .............................................. 312,592
4,700 Tupperware Corp. .......................................... 105,280
3,500 UniFirst Corp. (L) ........................................ 108,850
3,500 Unilever Plc .............................................. 238,799
10,700 Wolseley Plc .............................................. 224,991
13,300 Yakult Honsha Co., Ltd. (L) ............................... 276,121
8,400 Yankee Candle Co. (L) ..................................... 215,040
----------
25,563,455
----------
DIVERSIFIED OPERATIONS (4.1%):
59,100 3 M Co. ................................................... 4,580,250
7,200 Acuity Brands, Inc. (L) ................................... 228,960
15,500 Barlow Ltd. ............................................... 270,330
25,401 Brambles Industries Ltd. .................................. 188,500
21,400 Brambles Industries Plc ................................... 153,177
120,900 Cendant Corp. ............................................. 2,085,525
164,428 First Data Corp. .......................................... 7,072,048
332,400 General Electric Co. ...................................... 11,650,621
9,340 Harsco Corp. .............................................. 630,543
71,500 IOI Corp. Berhad .......................................... 234,612
22,200 Mitsubishi Corp. .......................................... 490,992
7,000 Shin-Etsu Chemical Co., Ltd. .............................. 371,918
99,000 Sumitomo Corp. ............................................ 1,279,341
22,900 Teleflex, Inc. (L) ........................................ 1,488,042
95,500 Thermo Electron Corp.(b) .................................. 2,877,415
116,000 Tyco International Ltd. ................................... 3,347,760
6,803 Wesfarmers Ltd. (L) ....................................... 184,430
----------
37,134,464
----------
ELECTRONICS (4.6%):
7,800 Ade Corp.(b) (L) .......................................... 187,668
4,000 Advantest Corp. (L) ....................................... 403,017
8,899 Agere Systems Inc. (b) .................................... 114,797
See accompanying notes to financial statements.
5
PORTFOLIO OF INVESTMENTS (CONTINUED)
NEW COVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ----------
67,600 Altera Corp. (b) (L) ...................................... 1,252,628
40,800 Amis Holdings, Inc. (b) ................................... 434,520
79,800 Amphenol Corp. - Class A .................................. 3,531,948
62,400 Arm Holdings plc .......................................... 129,603
12,600 ASML Holding N.V.(b) ...................................... 251,141
21,300 AU Optronics Corp. - ADR (L) .............................. 319,713
3,310 Bel Fuse, Inc., Class B (L) ............................... 105,258
4,700 Cabot Microelectronics Corp. (b) (L) ...................... 137,851
34,900 Cree Research, Inc. (b) (L) ............................... 880,876
19,410 Diodes, Inc. (b) (L) ...................................... 602,681
68,100 Emerson Electric Co. ...................................... 5,087,070
7,800 Fanuc Co Ltd. ............................................. 661,622
228,500 Flextronics International Ltd. (b) (L) .................... 2,385,540
6,500 FLIR Systems, Inc. (b) .................................... 145,145
59,900 Freescale Semiconductor, Inc., Class B (b) ................ 1,507,683
151,500 Freescale Semiconductor, Inc., Class A (b) ................ 3,816,285
5,300 Hirose Electric Co. Ltd. .................................. 706,457
83,185 Hon Hai Precision Industry Co. Ltd. ....................... 911,807
18,100 Intersil Corp.,Class A .................................... 450,328
800 Keyence Corp. ............................................. 227,438
103,500 Lam Research Corp.(b) ..................................... 3,692,880
57,200 Lattice Semiconductor Corp. (b) ........................... 247,104
8,200 Lojack Corp. (b) (L) ...................................... 197,866
16,790 MEMC Electronic Materials, Inc. (b) (L) ................... 372,234
10,100 Methode Electronics, Inc. (L) ............................. 100,697
50,400 Microchip Technology, Inc. ................................ 1,620,360
9,470 MTS Systems Corp. (L) ..................................... 328,041
6,800 Multi-Fineline Electronix Inc. (b) (L) .................... 327,556
3,700 Murata Manufacturing Co. Ltd. ............................. 237,031
22,000 Nippon Electric Glass Co., Ltd. ........................... 480,044
61 Nippon Telegraph & Telephone Corp. ........................ 277,061
15,600 Novellus Systems, Inc. (b) (L) ............................ 376,272
88,700 On Semiconductor Corp. (b) (L) ............................ 490,511
5,900 Photronics, Inc. (b) ...................................... 88,854
27,900 Pixelworks, Inc. (b) ...................................... 141,732
13,500 PortalPlayer, Inc. (b) .................................... 382,320
5,900 Rohm Co. Ltd. ............................................. 641,446
6,664 Samsung Electornics - GDR ................................. 2,195,788
13,900 Sigmatel, Inc. (b) (L) .................................... 182,090
8,200 Sony Corp. ................................................ 334,921
33,300 Synopsis, Inc. (b) ........................................ 667,998
135,619 Taiwan Semiconductor ADR .................................. 1,343,984
300 TDK Corp. ................................................. 20,668
56,600 Teradyne, Inc. (b) ........................................ 824,662
14,100 Tokyo Electron Ltd. (L) ................................... 885,357
12,500 Ushio Inc.(L) ............................................. 291,818
2,000 Yamada Denki Co., Ltd. .................................... 250,148
----------
41,250,519
----------
ENERGY (2.9%):
171,000 AES Corp.(b) .............................................. 2,706,930
159,500 El Paso Corp. ............................................. 1,939,520
6,100 Empire District Electric Co. (L) .......................... 124,013
13,660 Energy Partners Ltd. (b) (L) .............................. 297,651
75,174 Exelon Corp. .............................................. 3,994,746
11,900 Iberdrola SA (L) .......................................... 324,064
17,100 Kansai Electric Power, Inc. ............................... 367,329
10,950 Korea Electric Power Corp. ................................ 213,416
17,900 Oklahoma Gas & Electric Co. ............................... 479,541
24,400 Pepco Holdings, Inc. (L) .................................. 545,828
63,600 PG&E Corp. (L) ............................................ 2,360,832
3,800 Reliance Energy, Ltd. - GDR ............................... 163,590
11,000 Scottish & Southern Energy Plc ............................ 191,459
79,440 Sierra Pacific Resources (b) (L) .......................... 1,035,898
14,400 Tokyo Electric Power Co. .................................. 349,597
22,000 Tokyo Gas Ltd. (L) ........................................ 97,687
75,800 Valero Energy ............................................. 3,911,280
3,700 Veba AG ................................................... 381,656
13,330 Westar Energy, Inc. (L) ................................... 286,595
149,000 Williams Co., Inc. ........................................ 3,452,330
156,400 Xcel Energy, Inc. (L) ..................................... 2,887,144
----------
26,111,106
----------
ENTERTAINMENT AND LEISURE (0.2%):
6,200 Carnival plc .............................................. 351,196
23,800 Regal Entertainment Group (L) ............................. 452,676
27,000 The Walt Disney Co. ....................................... 647,190
----------
1,451,062
----------
FINANCIAL SERVICES (8.5%):
8,500 Accredited Home Lenders (b) (L) ........................... 421,430
15,900 Advance America Cash Advance .............................. 197,160
11,510 Advanta, Class B (L) ...................................... 373,384
2,700 Affiliated Managers Group, Inc. (b) (L) ................... 216,675
57,660 American Capital Strategies ............................... 2,087,869
5,950 American Home Mortgage Investment Corp. (L) ............... 193,792
9,300 Asset Acceptance Capital Corp. (b) ........................ 208,878
18,220 Bay View Capital Corp. (b) ................................ 324,316
35,200 BISYS Group, Inc. (b)(c) .................................. 493,152
10,000 Calamos Asset Management (L) .............................. 314,500
57,000 Capital One Financial Corp. ............................... 4,924,800
16,900 Capital Source Inc. (L) ................................... 378,560
5,700 CBOT Holdings, Inc., Class A (b) (L) ...................... 534,432
20,040 Charter Municipal Mortgage Acceptance (L) ................. 424,447
298,276 Citigroup, Inc. ........................................... 14,475,333
95,000 Commerce Assets Holdings .................................. 143,292
8,920 CompuCredit Corp. (b) (L) ................................. 343,242
122,798 Countrywide Credit Industries, Inc. (L) ................... 4,198,464
1,927 Deutsche Boerse AG ........................................ 196,407
67,900 E*TRADE Financial Corp. (b) ............................... 1,416,394
7,800 eFunds Corp. (b) (L) ...................................... 182,832
59,300 Federal Home Loan Mortgage Corp. .......................... 3,875,255
23,036 Fidelity National Financial, Inc. ......................... 847,494
19,900 Friedman, Billings, Ramsey Group, Inc. (L) ................ 197,010
45,000 Fubon Financial Holding Co., Ltd. (R) ..................... 386,384
23,700 Goldman Sachs Group, Inc. ................................. 3,026,727
61,100 HBOS Pic .................................................. 1,041,442
4,300 Huron Consulting Group, Inc. (b) .......................... 103,157
28,279 ING Groep NV .............................................. 977,220
25,000 Lazard Ltd.- Class A (L) .................................. 797,500
11,600 Legg Mason, Inc. .......................................... 1,388,404
41,100 Lehman Brothers Holdings, Inc. ............................ 5,267,787
60,800 MBIA, Inc. (L) ............................................ 3,657,728
291,100 MBNA Corp. ................................................ 7,906,275
43,000 Morgan Stanley Dean Witter & Co. .......................... 2,439,820
4,990 Novastar Financial, Inc. (L) .............................. 140,269
2,800 Nuveen Investments, Class A (L) ........................... 119,336
6,900 ORIX Corp. ................................................ 1,757,012
52,700 Paychex, Inc. ............................................. 2,008,924
24,700 PNC Financial Services Group .............................. 1,527,201
7,400 SEI Investments Co. ....................................... 273,800
6,700 The First Marblehead Corp. (L) ............................ 220,162
See accompanying notes to financial statements.
6
PORTFOLIO OF INVESTMENTS (CONTINUED)
NEW COVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ----------
8,305 UBS AG .................................................... 788,521
123,800 Washington Mutual, Inc. ................................... 5,385,300
----------
76,182,087
----------
FOOD AND BEVERAGES (3.5%):
31,900 Aramark Corp. (L) ......................................... 886,182
76,600 Archer-Daniels-Midland Co. ................................ 1,888,956
20,000 Cadbury Schweppes Plc ..................................... 188,644
5,200 Carrefour SA .............................................. 242,739
9,900 Chiquita Brands International, Inc. (L) ................... 198,099
8,000 Coca-Cola Co. ............................................. 322,480
4,900 Gold Kist, Inc. (b) ....................................... 73,255
4,700 Groupe Danone ............................................. 489,185
24,200 Hormel Foods Corp. ........................................ 790,856
9,700 Koninklijke Numico NV (b) ................................. 400,177
87,800 Kraft Foods, Inc. Class A (L) ............................. 2,470,692
100 Lindt & Spruengli AG-PC ................................... 169,778
5,360 Nash Finch Co. (L) ........................................ 136,573
3,303 Nestle SA ................................................. 985,184
100,000 Pepsi Bottling Group, Inc. ................................ 2,861,000
35,200 PepsiAmericas, Inc. (L) ................................... 818,752
127,500 PepsiCo, Inc. ............................................. 7,532,700
54,600 Pilgrim's Pride Corp. (L) ................................. 1,810,536
10,920 Ruddick Corp. (L) ......................................... 232,378
54,000 SUPERVALU, Inc. ........................................... 1,753,920
52,300 Sysco Corp. ............................................... 1,623,915
50,500 Unilever NV-ADR ........................................... 3,466,825
117,700 Unilever Plc .............................................. 1,164,716
45,904 Woolworths Ltd. ........................................... 567,194
----------
31,074,736
----------
FOREST AND PAPER PRODUCTS (0.7%):
27,800 Abitibi-Consolidated, Inc. ................................ 110,924
66,000 Meadwestvaco Corp. ........................................ 1,849,980
14,284 Norske Skogsindustrier Asa ................................ 226,330
11,100 Upm-Kymmene Oyj ........................................... 216,792
63,400 Weyerhaeuser Co. (L) ...................................... 4,205,956
----------
6,609,982
----------
HEALTH SERVICES (3.0%):
3,600 American Healthways, Inc. (b) (L) ......................... 162,900
9,100 American Retirement Corp. (b) (L) ......................... 228,683
21,100 AMERIGROUP Corp. (b) ...................................... 410,606
20,000 Cerner Corp. (b) .......................................... 1,818,200
33,150 Coventry Health Care, Inc. (b) ............................ 1,888,224
38,600 Express Scripts, Inc., Class A (b) ........................ 3,234,680
68,700 Health Management Assoc., Inc., Class A (L) ............... 1,508,652
2,900 LCA-Vision, Inc. (L) ...................................... 137,779
82,700 McKesson Corp. ............................................ 4,266,493
5,500 Odyssey HealthCare, Inc. (b) (L) .......................... 102,520
40,800 Quest Diagnostics, Inc. ................................... 2,100,384
2,800 Sierra Health Services, Inc. (b) (L) ...................... 223,888
44,200 Stryker Corp. ............................................. 1,963,806
3,300 Triad Hospitals, Inc. (b) ................................. 129,459
77,820 UnitedHealth Group, Inc. .................................. 4,835,735
11,500 Universal Health Services, Inc, Class B (L) ............... 537,510
50,600 Varian Medical Systems, Inc. (b) .......................... 2,547,204
10,000 WebMD Health Corp., Class A (b)(L) ........................ 290,500
5,100 WellCare Health Plans, Inc. (b) (L) ....................... 208,335
----------
26,595,558
----------
HOTELS AND OTHER LODGING PLACES (0.1%):
8,400 Accor SA .................................................. 460,277
4,600 Four Seasons Hotels, Inc. ................................. 228,850
156,000 Shangri-La Asia Ltd. ...................................... 260,560
2,200 Strategic Hotel Capital, Inc. ............................. 45,276
----------
994,963
----------
INSURANCE (7.7%):
27,200 Ace Ltd. .................................................. 1,453,568
31,509 Aegon NV .................................................. 510,973
25,500 Aetna, Inc. ............................................... 2,404,905
43,500 AFLAC, Inc. ............................................... 2,019,270
4,700 Allianz Ag ................................................ 709,249
60,100 Allstate Corp. ............................................ 3,249,607
14,100 American Equity Investment Life Holding Co. ............... 184,005
69,679 American International Group, Inc. ........................ 4,754,198
109,000 Aon Corp. ................................................. 3,918,550
5,090 Arch Capital Group Ltd. (b) ............................... 278,678
9,500 Aspen Insurance Holdings Ltd (L) .......................... 224,865
25,400 Assurant, Inc. ............................................ 1,104,646
9,200 Axa ....................................................... 295,784
37 Berkshire Hathaway, Inc. Class A (b) ...................... 3,278,940
9,700 Bristol West Holdings, Inc. ............................... 184,591
12,520 Cathay Financial Holding Co., Ltd. (R) .................... 226,819
7,900 China Life Insurance Co. - ADR (b) ........................ 278,712
31,500 Chubb Corp. ............................................... 3,075,975
80,200 CIGNA Corp. ............................................... 8,958,339
15,000 Everest Re Group, Ltd. .................................... 1,505,250
4,031 Fidelity National Title Group, Inc., Class A (L) .......... 98,155
99,000 Genworth Financial, Inc., Class A ......................... 3,423,420
57,800 Hartford Financial Services Group, Inc. ................... 4,964,442
54,200 Insurance Australia Group Ltd. (L) ........................ 215,417
1,600 James River Group, Inc., (b) .............................. 31,760
99,000 Marsh & McLennan Cos., Inc. ............................... 3,144,240
43 Millea Holdings, Inc. ..................................... 739,683
31,000 Mitsui Marine And Fire .................................... 379,061
6,100 Platinum Underwriter Holdings Ltd. ........................ 189,527
61,700 Promina Group Ltd. (L) .................................... 218,984
20,302 QBE Insurance Group Ltd. (L) .............................. 291,794
20,200 Reinsurance Group of America, Inc. (L) .................... 964,752
3,360 Selective Insurance Group, Inc. (L) ....................... 178,416
94,739 St. Paul Cos., Inc. ....................................... 4,231,991
9,439 Swiss Re .................................................. 689,156
177,000 UnumProvident Corp. (L) ................................... 4,026,750
73,800 Wellpoint, Inc. (b) ....................................... 5,888,501
39,300 Yasuda F & M Insurance .................................... 531,171
----------
68,824,144
----------
INTERNET SERVICES (1.1%):
8,200 Checkfree Corp. (b) (L) ................................... 376,380
24,600 CNET Networks, Inc. (b) (L) ............................... 361,374
4,300 Digital River, Inc. (b) (L) ............................... 127,882
18,200 InfoSpace, Inc. (b) (L) ................................... 469,924
15,400 Ipass,lnc.(b) (L) ......................................... 101,024
3,850 j2 Global Communications, Inc. (b) ........................ 164,549
4,500 Netease.com Inc.-ADR (b)(L) ............................... 252,720
13,500 Openwave Systems, Inc. (b) (L) ............................ 235,845
67,800 Softbank Corp. (L) ........................................ 2,861,147
260,312 Symantec Corp. (b) ........................................ 4,555,460
4,590 WebEx Communications, Inc. (b) (L) ........................ 99,282
354 Yahoo Japan Corp. (L) ..................................... 536,955
----------
10,142,542
----------
MACHINERY AND EQUIPMENT (1.6%):
20,400 Atlas Copca AB,.A Shares .................................. 453,829
3,400 Cascade Corp.(L) .......................................... 159,494
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7
PORTFOLIO OF INVESTMENTS (CONTINUED)
NEW CONVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ----------
92,600 Caterpillar, Inc........................................... 5,349,502
53,400 Fastenal Co.(L)............................................ 2,092,746
3,400 Gardner Denver Machinery, Inc. (b)......................... 167,620
10,150 Graco, Inc. (L)............................................ 370,272
7,600 Lennox International, Inc. (L)............................. 214,320
4,000 NIDEC Corp.(L)............................................. 339,971
11,200 Schneider SA............................................... 995,318
4,900 SMC Corp................................................... 699,644
9,800 Stewart & Stevenson Services, Inc. (L)..................... 207,074
20,200 Whirlpool Corp.(L)......................................... 1,691,952
35,100 Zebra Technologies Corp., Class A (b) (L).................. 1,504,035
----------
14,245,777
----------
MANUFACTURING (1.4%):
6,900 Applied Industrial Tech, Inc............................... 232,461
13,100 Assa Abloy AB Class B...................................... 205,812
6,100 Cummins, Inc. (L).......................................... 547,353
20,100 FEI Co.(b)................................................. 385,317
3,000 Grief Brothers Co., Class A (L)............................ 198,840
70,600 Gujarat Ambuja Cements, Ltd. - GDR (R)..................... 124,856
3,800 Hexcel Corp.(b) (L)........................................ 68,590
16,700 Illinois Tool Works, Inc................................... 1,469,433
90,100 Ingersoll-Rand Co.......................................... 3,637,337
10,000 Kao Corp................................................... 267,774
7,000 LSI Industries, Inc........................................ 109,620
72,000 Mitsubishi Heavy Industries, Ltd........................... 317,261
1,700 NACCO Industries, Inc. (L)................................. 199,155
6,100 Nordson Corp. (L).......................................... 247,111
46,800 Parker Hannifin Corp....................................... 3,086,928
10,800 Siemens AG................................................. 921,813
4,800 Standex International Corp. (L)............................ 133,248
5,200 Sun Hydraulics Corp. (L)................................... 100,516
----------
12,253,425
----------
MEDICAL PRODUCTS (4.3%):
4,700 Affymetrix, Inc. (b)....................................... 224,425
92,000 Amgen,lnc.(b).............................................. 7,255,1 19
15,650 Applera Corp.-Celera Genomics Group (b).................... 171,524
63,500 Baxter International, Inc.................................. 2,390,775
35,100 Beckman Coulter, Inc. (L).................................. 1,997,190
36,500 Biomet, Inc. (L)........................................... 1,334,805
87,500 Boston Scientific Corp. (b)................................ 2,142,875
4,100 Cantel Medical Corp. (b) (L)............................... 73,554
2,900 Cooper Cos., Inc. (L)...................................... 148,770
38,000 Depomed,lnc.(b) (L)........................................ 228,000
3,900 Diagnostic Products Corp. (L).............................. 189,345
26,310 Exelixis, Inc.(b) (L)...................................... 247,840
59,264 Genzyme Corp.(b)........................................... 4,194,706
6,310 Haemonetics Corp. (b)...................................... 308,307
41,700 Health Net, Inc. (b)....................................... 2,149,635
8,800 Hoya Corp. ................................................ 316,177
88,900 Johnson & Johnson, Inc..................................... 5,342,889
62,500 Laboratory Corp. of America Hldngs (b) (L)................. 3,365,625
3,940 Landauer, Inc. (L)......................................... 181,595
32,400 Medtronic, Inc............................................. 1,865,268
1,800 Millipore Corp. (b)........................................ 118,872
27,000 Patterson Co., Inc. (b) (L)................................ 901,800
20,400 Sanofi-Synthelabo SA (L)................................... 1,780,420
9,500 Steris Corp. .............................................. 237,690
6,200 Surmodics, Inc. (b) (L).................................... 229,338
20,380 Zeneca Group Plc........................................... 989,650
----------
38,386,194
----------
METALS AND MINING (1.2%):
21,200 Alcan, Inc................................................. 866,951
8,100 Barrick Gold Corp.......................................... 225,747
14,023 Broken Hill Proprietary Co. Ltd. (L)....................... 233,939
17,600 Cameco Corp. (L)........................................... 1,111,999
4,890 Carpenter Technology Corp. (L)............................. 344,598
15,600 Century Aluminum Co. (b) (L)............................... 408,876
6,400 Cleveland-Cliffs, Inc. (L)................................. 566,848
9,540 Commercial Metals Co. (L).................................. 358,132
6,000 Companhia Vale do Rio Doce - ADR (L)....................... 217,500
9,000 Companhia Vale do Rio Doce - ADR (L)....................... 370,260
13,300 Inco Ltd.(L)............................................... 579,481
3,900 Mining and Metallurgical Company Norilsk
Nickel (L).............................................. 234,000
4,500 Mueller Industries, Inc. (L)............................... 123,390
75,000 Nippon Steel Corp.......................................... 266,927
14,063 Noranda, Inc. (L).......................................... 415,424
6,510 NS Group, Inc. (b)......................................... 272,183
50,900 Repsol Ypf S.A. (L)........................................ 1,480,974
10,400 Rio Tinto Plc.............................................. 473,961
4,500 Ryerson, Inc. (L).......................................... 109,440
25,400 Southern Copper Corp. (L).................................. 1,701,292
9,900 Xstrata Plc................................................ 231,110
----------
10,593,032
----------
OIL AND GAS (6.1%):
9,100 Canadian Natural Resources................................. 449,039
66,200 Chesapeake Energy Corp. (L)................................ 2,100,526
144,792 Chevron Texaco Corp........................................ 8,219,842
333,000 CNOOC, Ltd................................................. 225,485
103,938 ConocoPhillips (L)......................................... 6,047,113
62,380 Devon Energy Corp.......................................... 3,901,245
9,650 Eni SpA.................................................... 266,661
254,400 Exxon Mobil Corp........................................... 14,289,649
6,600 Frontier Oil Corp.......................................... 247,698
3,300 Giant Industries, Inc. (b) (L)............................. 171,468
21,400 Global Industries Ltd.(b).................................. 242,890
15,800 Halliburton Co............................................. 978,968
3,277 L'Air Liquide.............................................. 628,044
2,900 Lone Star Technologies, Inc. (b)........................... 149,814
29,400 Meridian Resource Corp. (b)................................ 123,480
138,200 NiSource, Inc.............................................. 2,882,852
4,700 Patterson-UTI Energy, Inc.................................. 154,865
108,000 PetroChina Co. Ltd......................................... 88,453
3,000 Petroleo Brasileiro SA - ADR (L)........................... 193,110
2,200 Petroleo Brasileiro SA - ADR............................... 156,794
12,364 Reliance Industries Ltd. GDR (b)........................... 488,764
3,400 Remington Oil & Gas Corp. (b).............................. 124,100
53,000 Royal Dutch Shell - ADR (L)................................ 3,258,970
86,482 Royal Dutch Shell A Shares................................. 2,629,475
5,229 Royal Dutch Shell B Shares................................. 166,766
61,100 Sasol Ltd.................................................. 2,183,692
5,100 St. Mary Land & Exploration Co. (L)........................ 187,731
6,860 Stone Energy Corp. (b)..................................... 312,336
5,900 Suncor Energy, Inc......................................... 370,398
21,700 Sunoco, Inc. (L)........................................... 1,700,846
3,900 Swift Energy Co. (b) (L)................................... 175,773
1,000 Total SA, Class B.......................................... 250,268
4,200 Ultra Petroleum Corp. (b).................................. 234,360
3,100 Whiting Petroleum Corp (b)................................. 124,000
33,000 XTO Energy, Inc............................................ 1,450,020
----------
55,175,495
----------
See accompanying notes to financial statements.
8
PORTFOLIO OF INVESTMENTS (CONTINUED)
NEW COVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ----------
PHARMACEUTICALS (5.8%):
146,500 Abbott Laboratories........................................ 5,776,495
51,410 Abgenix, Inc. (b) (L)...................................... 1,105,829
4,500 Altana AG.................................................. 244,985
28,800 Amylin Pharmaceuticals (b)................................. 1,149,696
15,000 Array Biopharma, Inc. (b) (L).............................. 105,150
19,670 Astrazeneca Plc............................................ 960,471
8,100 Barr Pharmaceuticals, Inc. (b)............................. 504,549
11,700 Bayer AG................................................... 486,137
28,500 Cardinal Health, Inc....................................... 1,959,375
42,340 Cephalon, Inc. (b) (L)..................................... 2,741,092
28,900 Cubist Pharmaceuticals, Inc. (b) (L)....................... 614,125
16,450 CV Therapeutics, Inc. (b) (L).............................. 406,809
29,900 Daiichi Sankyo CO LTD. (b)................................. 576,413
64,000 Dendreon Corp.(b) (L)...................................... 346,880
12,460 Encysive Pharmaceuticals, Inc. (b)......................... 98,309
15,200 Endo Pharmaceuticals Holdings, Inc. (b).................... 459,952
46,200 Forest Laboratories, Inc. (b).............................. 1,879,416
53,700 Gilead Sciences, Inc. (b).................................. 2,826,231
51,400 Hospira, Inc. (b).......................................... 2,198,892
16,200 Human Genome Sciences, Inc. (b) (L)........................ 138,672
26,000 ICOS Corp.(b) (L).......................................... 718,380
98,600 IMS Health, Inc............................................ 2,457,112
48,800 Incyte Pharmaceutical, Inc. (b) (L)........................ 260,592
119,000 King Pharmaceuticals, Inc. (b)............................. 2,013,480
50,100 Medarex, Inc.(b) (L)....................................... 693,885
118,900 Millennium Pharmaceuticals, Inc. (b)....................... 1,153,330
13,300 Neurogen Corp. (b) (L)..................................... 87,647
45,761 Novartis AG................................................ 2,398,146
4,100 Novo Nordisk A/S, Class B.................................. 229,885
19,080 NPS Pharmaceuticals, Inc. (b) (L).......................... 225,907
334,615 Pfizer, Inc................................................ 7,803,221
27,060 Regeneron Pharmaceuticals, Inc. (b) (L).................... 431,607
7,200 Rigel Pharmaceuticals, Inc. (b) (L)........................ 60,192
7,767 Roche Holding AG........................................... 1,163,046
667 Sanofi-Aventis............................................. 58,323
19,600 Teva Pharmaceutical Industries LTD. (L).................... 842,996
16,100 Trimeris, Inc. (b) (L)..................................... 184,989
6,100 UCB SA..................................................... 285,471
110,500 Watson Pharmaceutical, Inc. (b)............................ 3,592,355
65,300 Wyeth...................................................... 3,008,371
17,380 Zymogenetics, Inc. (b) (L)................................. 295,634
----------
52,544,047
----------
PRINTING AND PUBLISHING (0.7%):
5,570 Advo, Inc. (L)............................................. 156,963
47,400 Dex Media, Inc............................................. 1,284,066
13,300 Journal Register Co. (L)................................... 198,835
65,000 McGraw-Hill Companies, Inc................................. 3,355,949
37,600 Pearson Plc................................................ 443,716
9,700 Reed Elsevier NV........................................... 134,994
69,800 Reed International Plc..................................... 654,173
5,689 VNU NV..................................................... 187,936
----------
6,416,632
----------
REAL ESTATE (1.3%):
171,000 Amoy Properties Ltd........................................ 266,867
19,060 Anthracite Capital, Inc. (L)............................... 200,702
11,690 Arbor Realty Trust, Inc. (L)............................... 303,005
50,900 Archston-Smith Trust....................................... 2,132,200
30,500 Ashford Hospitality Trust (L).............................. 319,945
9,000 Diamondrock Hospitality Co................................. 107,640
11,300 Equity One, Inc............................................ 261,256
32,200 GMH Communities Trust...................................... 499,422
51,000 Hang Lung Group, Ltd....................................... 108,206
7,900 HouseValues, Inc. (b) (L).................................. 102,937
34,190 IndyMac Mortgage Holdings, Inc. (L)........................ 1,334,094
5,500 Jer Investors Trust........................................ 93,225
27,600 Meritage Homes Corp. (b) (L)............................... 1,736,592
86,000 Mitsubishi Estate Co.(L)................................... 1,785,442
9,700 Post Properties, Inc....................................... 387,515
46,000 Pulte Homes, Inc. (L)...................................... 1,810,559
26,000 Sun Hung Kai Properties.................................... 253,183
14,775 Technical Olympic USA (L).................................. 311,605
----------
12,014,395
----------
RESTAURANTS (1.2%):
48,300 Cheesecake Factory, Inc. (b)............................... 1,805,937
17,300 CKE Restaurants, Inc. (L).................................. 233,723
39,600 Darden Restaurants, Inc.................................... 1,539,648
6,300 Jack in the Box, Inc. (b) (L).............................. 220,059
160,900 McDonald's Corp............................................ 5,425,548
3,800 Panera Bread Co., Class A (b) (L).......................... 249,584
27,600 YUM! Brands, Inc........................................... 1,293,888
----------
10,768,387
----------
RETAIL (3.6%):
26,100 Abercrombie & Fitch Co., Class A........................... 1,701,198
18,200 Ann Taylor Stores Corp. (b) (L)............................ 628,264
28,900 Barnes & Noble, Inc........................................ 1,233,163
48,300 Bed Bath & Beyond, Inc. (b)................................ 1,746,045
3,000 Blair Corp................................................. 116,820
4,500 Burlington Coat Factory Warehouse (L)...................... 180,945
300 Canadian Tire Corp., Ltd................................... 17,863
14,605 Cato Corp. (L)............................................. 313,277
4,900 Cawachi, Ltd. (L).......................................... 208,025
7,200 Circuit City Stores, Inc................................... 162,648
20,900 Claire's Stores, Inc....................................... 610,698
1,400 Columbia Sportswear Co. (b) (L)............................ 66,822
92,000 Dollar General Corp........................................ 1,754,440
13,500 DSW Inc.(b) (L)............................................ 353,970
45,400 Federated Department Stores, Inc........................... 3,011,381
8,480 Gamestop Corp., Class A (b) (L)............................ 269,834
11,800 Genescojnc. (b) (L)........................................ 457,722
37,800 Jusco Ltd.................................................. 960,936
55,300 Kesa Electricals Plc....................................... 246,799
61,200 Kingfisher Plc............................................. 249,231
33,800 Lowe's Cos., Inc........................................... 2,253,108
20,500 Massmart Holdings Ltd...................................... 167,073
80,800 Michaels Stores, Inc....................................... 2,857,896
7,520 Movie Gallery, Inc. (L).................................... 42,187
3,200 MSC Industrial Direct Co., Inc., Class A (L)............... 128,704
38,200 Office Depot, Inc. (b)..................................... 1,199,480
3,700 Pantry, Inc. (b)........................................... 173,863
55,700 Quiksilver, Inc. (b)....................................... 770,888
5,000 Shimamura Co. Ltd.......................................... 691,467
10,300 Stride Rite Corp........................................... 139,668
61,700 Talbots, Inc. (L).......................................... 1,716,494
4,100 Urban Outfitters, Inc. (b)................................. 103,771
28,900 Wal-Mart Stores, Inc....................................... 1,352,520
43,000 Walgreen Co................................................ 1,903,180
156,406 Walmart De Mexico SA....................................... 867,672
2,900 Weis Markets, Inc. (L)..................................... 124,816
36,800 Whole Foods Market, Inc. (L)............................... 2,847,952
10,100 Williams-Sonoma, Inc. (b) (L).............................. 435,815
----------
32,066,635
----------
See accompanying notes to financial statements.
9
PORTFOLIO OF INVESTMENTS (CONTINUED)
NEW CONVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ----------
TECHNOLOGY (2.1%)
64,451 Agilent Technologies, Inc. (b) .......................... 2,145,574
23,600 Aquantive, Inc. (b) (L) ................................. 595,664
55,800 Brooks Automation, Inc. (b) ............................. 699,174
4,800 Canon, Inc .............................................. 280,654
12,000 Eresearch Technology, Inc. (b) (L) ...................... 181,200
34,100 Genesis Microchip, Inc. (b) (L) ......................... 616,869
25,200 Hitachi High Technology Corp. (L) ....................... 629,947
10,500 Hutchinson Technology, Inc. (b)(L) ...................... 298,725
405,400 Intel Corp .............................................. 10,118,784
41,200 Linear Technology Corp .................................. 1,486,084
16,700 Plantronics, Inc ........................................ 472,610
120,600 RF Micro Devices, Inc. (b) (L) .......................... 652,446
16,100 Western Digital Corp. (b) ............................... 299,621
----------
18,477,352
----------
TELECOMMUNICATIONS (4.1%):
6,100 Adtran, Inc ............................................. 181,414
58,900 ALLTEL Corp. ............................................ 3,716,590
56,500 America Movil ........................................... 1,653,190
18,200 AT&T, Inc ............................................... 445,718
111,200 Avaya, Inc. (b) ......................................... 1,186,504
9,500 Centennial Communications Corp. (b) (L) ................. 147,440
59,900 Century Tel. Inc ........................................ 1,986,284
26,200 Consolidated Communications Hldngs, Inc. ................ 340,338
216,400 Corning, Inc. (b) ....................................... 4,254,424
51,000 Dobson Communications Corp. (b) (L) ..................... 382,500
141,600 Koninklijke (Royal) KPN NV .............................. 1,414,514
24,100 Korea Telecom Corp ...................................... 519,355
13,300 Nokia Oyj - Class A ..................................... 242,349
95,700 Polycom, Inc. (b) ....................................... 1,464,210
16,600 Portugal Telecom, SGPS, SA .............................. 167,392
44,930 Premiere Global Services, Inc. (b) (L) .................. 365,281
1,705,500 PT Telekomunikasi Indonesia ............................. 1,023,647
124,400 Qualcomm, Inc ........................................... 5,359,151
4,860 Rural Cellular Corp. (b) ................................ 71,005
398,500 Singapore Telecommunications Ltd. (R) ................... 625,615
17,700 Societe Europeenne Satellite ............................ 302,693
193,881 Sprint Corp ............................................. 4,529,059
2,077 Swisscom AG ............................................. 653,792
250,000 Telefonaktiebolaget LM Ericsson ......................... 857,811
39,103 Telefonica De Espana .................................... 586,160
23,329 Telekom Austria AG ...................................... 522,769
36,100 Telesp Celular Participa-ADR (L) ........................ 136,458
11,500 Telus Corp .............................................. 459,547
8,200 Telus Corp .............................................. 336,032
1,278,768 Vodafone Group Pic ...................................... 2,754,736
----------
36,685,978
----------
TRANSPORTATION (2.3%):
5,640 Alexander & Baldwin ..................................... 305,914
13,690 Arkansas Best Corp. (L) ................................. 597,979
62,000 CNF, Inc ................................................ 3,465,180
62,000 CSX Corp ................................................ 3,147,740
15,800 Deutsche Post AG ........................................ 382,380
27,000 Expediters Int'l. of Washington, Inc. (L) ............... 1,822,770
12,500 Fedex Corp. ............................................. 1,292,375
22,000 Hankyu Holdings, Inc. (L) ............................... 142,988
6,450 Knight Transportation, Inc. (L) ......................... 133,709
Shares or
Principal Value
Amount (Note 2)
- --------- -----------
204,246 Qantas Airways Ltd ................................... 605,085
19,150 Ryder System, Inc .................................... 785,533
270,000 Southwest Airlines Co ................................ 4,436,099
6,300 TNT Post Group NV .................................... 196,158
59,000 Tokyu Corp. (L) ...................................... 416,965
5,300 Veolia Environnement ................................. 165,396
6,800 Veolia Environnement ................................. 306,681
102,300 Werner Enterprises, Inc. (L) ......................... 2,015,310
11,500 World Air Holdings, Inc. (b) (L) ..................... 110,630
35,000 Yamato Transport ..................................... 580,120
-----------
20,909,012
-----------
WASTE MANAGEMENT (0.9%):
253,900 Waste Management, Inc ................................ 7,705,865
-----------
TOTAL COMMON STOCKS .................................. 879,733,072
-----------
EXCHANGE TRADED FUNDS (0.4%):
57,100 i Shares Russell 1000 ................................ 3,867,954
-----------
TOTAL EXCHANGE TRADED FUNDS .......................... 3,867,954
-----------
CASH EQUIVALENTS (2.0%):
18,310,889 JP Morgan Cash Trade Execution ....................... 18,310,889
-----------
TOTAL CASH EQUIVALENTS ............................... 18,310,889
-----------
INVESTMENTS HELD AS COLLATERAL FOR
LOANED SECURITIES (13.9%):
$10,000,000 ABN AMRO Bank Repurchase Agreement,
4.30%, 1/3/06 (Purchased on 12/30/05,
proceeds at maturity $10,005,972,
collateralized by various corporate bonds,
fair value $10,200,000) .............................. 10,000,000
1,000,000 Citigroup Global Markets Repurchase
Agreement, 4.30%, 1/3/06 (Purchased on
12/30/05, proceeds at maturity $1,000,597,
collateralized by various corporate bonds,
fair value $1,050,000) ............................... 1,000,000
94,000,000 Citigroup Global Markets Repurchase
Agreement, 4.30%, 1/3/06 (Purchased
on 12/30/05, proceeds at maturity
$94,056,139, collateralized by various
corporate bonds, fair value $98,700,000) ............. 94,000,000
500,000 Dresdner Bank Repurchase Agreement,
4.30%, 1/3/06 (Purchased on 12/30/05,
proceeds at maturity $500,299,
collateralized by various corporate bonds,
fair value $525,000) ................................. 500,000
7,000,000 Lehman Brothers Repurchase Agreement,
4.40%, 1/3/06 (Purchased on 12/30/05,
proceeds at maturity $7,004,278,
collateralized by various corporate bonds,
fair value $7,350,000) ............................... 7,000,000
2,000,000 Morgan Stanley Repurchase Agreement,
4.375%, 1/3/06 (Purchased on 12/30/05,
proceeds at maturity $2,001,215,
collateralized by various corporate bonds,
fair value $2,100,000) ............................... 2,000,000
10,000,000 Societe Generale Time Deposit,
4.31 %, 2/1/06 ....................................... 10,000,000
See accompanying notes to financial statements.
10
PORTFOLIO OF INVESTMENTS (CONTINUED)
NEW COVENANT GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Shares or
Principal Value
Amount (Note 2)
- ----------- -------------
1, 126,024 UBS Securities Repurchase Agreement, 4.25%,
1/3/06 (Purchased on 12/30/05,
proceeds at maturity $1,126,689,
collateralized by various U.S.
government agency obligations,
fair value $1,148,544) ............................. 1,126,024
-------------
TOTAL INVESTMENTS HELD AS COLLATERAL
FOR LOANED SECURITIES .............................. 125,626,024
-------------
TOTAL (COST $893,276,058) (A)................................... 1,027,537,939
=============
- ----------
Percentages indicated are based on net assets of $898,823,631.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$10,867,703. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation......................................... $160,102,918
Unrealized depreciation......................................... (36,708,740)
------------
Net unrealized appreciation..................................... $123,394,178
============
(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 institutional buyers. The Advisor,
using procedures approved by the Board of Trustees, has deemed these
securities to be liquid.
ADR - American Depository Receipt
GDR - Global Depository Receipt
See accompanying notes to financial statements.
11
PORTFOLIO OF INVESTMENTS
NEW COVENANT INCOME FUND
DECEMBER 31, 2005
(UNAUDITED)
Principal Value
Amount (Note 2)
- ---------- -----------
ASSET BACKED SECURITIES (3.2%):
2,797,477 Asset Backed Funding Certificates,
4.25%, 6/25/35 ........................................ $ 2,786,788
4,860,000 Master Asset Backed Securities Trust,
5.23%, 10/25/32 ....................................... 4,834,163
805,536 Residential Asset Mortgage Products, Inc.,
4.00%,1/25/30 ......................................... 801,157
2,895,000 Residential Asset Mortgage Products, Inc.,
5.46%, 5/25/32 ........................................ 2,901,788
5,760,899 Residential Asset Mortgage Products, Inc.,
5.57%, 6/25/32, Series 2002-RS3, Class A15 ............ 5,759,832
-----------
TOTAL ASSET BACKED SECURITIES ......................... 17,083,728
-----------
CORPORATE BONDS (15.8%):
2,165,000 Alcan, Inc., 6.125%, 12/15/33 ......................... 2,223,691
780,000 American General Finance, 4.50%, 11/15/07 ............. 775,255
2,500,000 American International Group, 4.70%, 10/1/10 (R) ...... 2,466,428
775,000 AOL TimeWarner, lnc., 6.875%,5/l/l2 (L) ............... 826,031
2,400,000 AOL TimeWarner, Inc., 7.625%,4/15/31 .................. 2,680,680
1,000,000 Bank of America Corp., 4.375%, 12/1/10 ................ 976,674
3,675,000 Bottling Group LLC, 5.00%, 111/15/13 .................. 3,681,567
1,125,000 BRE Properties, Inc., 7.125%, 2/15/13 ................. 1,230,562
3,800,000 Burlington Northern Santa Fe, 6.75%, 7/15/11 .......... 4,104,414
2,500,000 Carolina Power & Light, 6.50%, 7/15/12 ................ 2,682,047
750,000 CarrAmerica Realty Corp., 5.125%, 9/1/11 .............. 736,007
1,500,000 Caterpillar Financial Services Corp., 3.70%, 8/15/08 .. 1,460,793
10,000,000 Coca-Cola Enterprises, 0.00%, 6/20/20 ................. 4,465,190
2,115,000 Duke Realty Corp., 7.05%, 3/1/06 ...................... 2,122,185
1,600,000 EOP Operating LP, 6.80%, 1/15/09 ...................... 1,674,096
1,961,592 FedEx Corp., 6.72%,1/15/22, Series 98-1A .............. 2,143,697
1,950,000 Firstar Bank, 7.125%, 12/1/09 ...... .................. 2,105,627
610,000 Ford Motor Credit Co., 7.375%, 10/28/09 ............... 541,432
4,510,000 General Electric Capital Corp., 6.125%, 2/22/11 ....... 4,749,964
3,350,000 General Mills, Inc., 6.00%, 2/15/12 ................... 3,510,408
1,400,000 Household Finance Corp., 6.40%, 6/17/08 ............... 1,445,111
600,000 Household Finance Corp., 4.75%, 5/15/09 ............... 593,909
1,500,000 Household Finance Corp., 4.125%, 11/16/09 ............. 1,449,507
1,070,000 International Paper Co.,6.50%, 11/15/07 ............... 1,093,477
475,000 International Paper Co., 5.85%, 10/30/12 .............. 482,641
1,750,000 Kinder Morgan Energy Partners, 7.40%, 3/15/31 ......... 2,021,926
2,235,000 May Department Stores Co., 7.45%, 9/15/11 ............. 2,462,778
4,000,000 Merrill Lynch & Co., 4.125%, 9/10/09 .................. 3,884,436
4,250,000 Metlife, Inc., 5.00%, 6/15/15 (L) ..................... 4,176,185
3,525,000 Morgan Stanley, 3.625%, 4/1/08 ........................ 3,435,920
1,250,000 National City Corp., 4.50%, 3/15/10 ................... 1,231,388
1,185,000 National City Corp., 6.875%, 5/15/19 .................. 1,347,190
1,445,000 Pacific Gas & Electric, 6.05%, 3/1/34 ................. 1,500,647
3,785,000 PNC Funding Corp., 6.125%, 2/15/09 .................... 3,909,114
5,015,000 SBC Communications, Inc., 4.125%, 9/15/09 ............. 4,846,687
900,000 Sprint Capital Corp., 7.625%,1/30/11 .................. 993,507
2,930,000 Sprint Capital Corp., 6.875%, 11 /15/28 ............... 3,211,160
2,000,000 Sun Trust Banks, Inc., 4.25%, 10/15/09 ................ 1,952,558
-----------
TOTAL CORPORATE BONDS ................................. 85,194,889
-----------
MORTGAGE-BACKED SECURITIES (65.4%):
CORPORATE BONDS
3,825,000 Banc of America Commercial Mortgage, Inc., 4.88%,
7/10/42 ............................................... 3,742,886
8,535,000 Banc of America Commercial Mortgage, Inc., 5.1 15%,
10/10/45 .............................................. 8,501,649
4,885,000 Bank of America Commercial Mortgage, Inc., 4.76%,
11/10/39 .............................................. 4,747,424
1,105,000 Bank of America Commercial Mortgage, Inc., 4.50%,
7/10/42 ............................................... 1,072,891
5,225,000 Banc of America Mortgage Securities, 4.80%,
5/25/35 * ............................................. 5,130,897
5,180,000 Banc of America Mortgage Securities, 4.62%,
6/25/35 * ............................................. 5,047,477
3,466,635 Bear Stearns Commercial Mortgage Securities, 6.08%,
2/15/35 ............................................... 3,514,962
4,615,000 Bear Stearns Commercial Mortgage Securities, 5.47%,
6/11/41 ............................................... 4,697,863
930,659 Commercial Mortgage Pass-Through Certificate, 2.96%,
3/10/39 ............................................... 896,738
1,115,000 Commercial Mortgage Pass-Through Certificate, 5.12%,
6/10/44 ............................................... 1,112,163
1,705,772 Countrywide Home Loans, 5.35%, 11/25/35 * ............. 1,702,877
1,370,000 General Electric Capital Commercial Mortgage Corp.,
4.60%, 11/10/38 ....................................... 1,319,594
5,230,000 GMAC Commercial Mortgage Securities, Inc., 5.30%,
8/10/38 ............................................... 5,273,378
3,781,087 Goldman Sachs Mortgage Securities Corp., 2.90%,
1/10/40 ............................................... 3,675,646
969,869 GSR Mortgage Loan Trust, 4.56%, 9/25/35 ............... 952,461
3,287,283 Indymac Index Mortgage Loan Trust, 5.30%, 6/25/35 * ... 3,259,341
4,065,000 JP Morgan Chase Commercial Mortgage Securities Corp.,
4.77%, 3/12/39 ........................................ 3,972,408
4,170,000 JP Morgan Chase Commercial Mortgage Securities Corp.,
5.21%, 5/15/41 * ...................................... 4,202,021
1,589,982 LB-UBS Commercial Mortgage Trust, 7.18%, 9/15/19,
Series 2000-C4 ........................................ 1,621,081
8,410,000 LB-UBS Commercial Mortgage Trust, 4.79%, 10/15/29*,
Series 2004-C7 ........................................ 8,191,911
5,220,000 LB-UBS Commercial Mortgage Trust, 5.59%, 6/15/31,
Series 2002 - C2 ...................................... 5,363,674
3,885,000 LB-UBS Commercial Mortgage Trust, 4.93%, 9/15/35,
Series 2003-C7 ........................................ 3,841,799
983,319 Merrill Lynch Mortgage Investors, Inc., 5.37%,
7/25/36 ............................................... 982,977
4,237,187 Merrill Lynch Mortgage Investors, Inc., 4.50%,
2/25/35 * ............................................. 4,158,855
3,440,000 Washington Mutual,Inc., 4.68%, 4/25/35* .............. 3,359,848
3,000,000 Washington Mutual, Inc., 4.20%, 1/15/10 (L) .......... 2,907,393
815,000 Washington Mutual, Inc., 3.805%, 6/25/34 * ............ 783,582
1,085,000 Washington Mutual, Inc., 3.945%, 7/25/34 * ............ 1,050,281
1,095,000 Washington Mutual, Inc., 4.68%, 5/25/35 * ............. 1,071,703
4,130,000 Washington Mutual, Inc., 4.69%, 5/25/35 ............... 4,021,196
See accompanying notes to financial statements.
12
PORTFOLIO OF INVESTMENTS
NEW COVENANT INCOME FUND
DECEMBER 31, 2005
(UNAUDITED)
Principal Value
Amount (Note 2)
- ---------- -----------
1,088,429 Washington Mutual, Inc., 4.84%, 10/25/35 * ............ 1,074,209
3,500,000 Wells Fargo Corp., 4.20%, 1/15/10 ..................... 3,410,474
4,605,000 Wells Fargo Mortgage Backed Securities Trust, 3.54%,
9/25/34 * ............................................. 4,423,804
4,115,000 Wells Fargo Mortgage Backed Securities Trust, 4.52%,
1/25/35 * ............................................. 4,025,282
3,556,227 Wells Fargo Mortgage Backed Securities Trust, 4.55%,
2/25/35 * ............................................. 3,491,922
FANNIE MAE
5,581,669 7.07%, 11/1/06 ........................................ 5,610,257
1,496,084 7.21%, 5/1/07 ......................................... 1,514,722
467,410 6.61%, 9/1/07 ......................................... 474,667
2,125,678 6.23%, 1/1/08 ......................................... 2,155,455
3,558,858 6.36%, 8/1/08 ......................................... 3,642,975
917,310 6.13%, 10/1/08 ........................................ 936,062
1,558,775 7.01%, 11/1/08 ........................................ 1,623,174
4,058,593 6.14%, 4/1/09 ......................................... 4,163,199
4,586,617 7.29%, 12/1/10 ........................................ 4,982,803
3,751,233 6.20%, 1/1/11 ......................................... 3,917,222
2,615,591 6.48%, 1/1/11 ......................................... 2,758,477
1,055,780 4.92%, 4/1/11 ......................................... 1,048,639
4,729,221 6.10%, 4/1/11 ......................................... 4,933,324
945,254 6.09%, 5/1/11 ......................................... 985,648
1,319,051 6.305%, 5/1/11 ........................................ 1,386,190
5,948,681 3.95%, 7/1/13 ......................................... 5,575,947
4,079,232 6.00%, 12/25/16, Series 01-71, Class QE ............... 4,178,940
1,623,893 6.50%, 8/1/17 ......................................... 1,668,946
2,211,282 4.50%, 1/1/20, Pool # 789677 .......................... 2,152,504
1,685,000 4.50%, 1/1/21 (b) ..................................... 1,639,716
3,445,000 4.50%, 1/1/21 (b) ..................................... 3,353,528
865,000 4.50%, 1/1/21 (b) ..................................... 842,033
1,785,000 4.50%, 1/1/21 (b) ..................................... 1,737,028
7,120,000 5.00%, 1/1/21 (b) ..................................... 7,044,350
5,385,000 5.00%, 1/1/21 (b) ..................................... 5,327,784
3,780,000 5.00%, 1/1/21 (b) ..................................... 3,739,838
2,005,000 5.00%, 1/1/21 (b) ..................................... 1,983,697
1,535,392 4.50%, 9/25/25 ........................................ 1,518,263
181,947 7.50%, 5/1/27 ......................................... 191,058
165,706 7.50%, 4/1/29, Pool # 323645 .......................... 174,085
198,281 7.50%, 4/1/29 ......................................... 208,307
11,964 7.50%, 8/1/29, Pool # 252712 .......................... 12,559
169,569 7.50%, 7/1/30 ......................................... 178,143
659,727 7.50%, 12/1/30 ........................................ 692,501
5,166,290 4.50%, 2/25/31 ........................................ 5,022,989
1,125,000 5.50%, 3/25/31 ........................................ 1,120,958
1,931,708 6.09%, 10/25/31 ....................................... 1,926,839
829,999 7.00%, 6/1/32 ......................................... 866,415
2,210,000 4.50%, 12/1/32 ........................................ 2,144,248
4,208,087 5.50%, 1/25/33 ........................................ 4,194,728
960,000 4.50%, 7/25/33 ........................................ 930,957
1,360,593 5.50%, 1/1/34, ARM 725042 ............................. 1,347,935
5,586,879 5.50%, 2/l/35, Pool # 735224 .......................... 5,547,653
4,540,797 4.99%, 7/1/35, ARM 826014 ............................. 4,503,184
2,757,072 5.50%, 8/1/35, ARM 835749 ............................. 2,731,511
4,834,395 5.375%, 9/1/35, ARM 836133 ............................ 4,830,846
699,315 5.50%, 10/1/35, ARM 836178 ............................ 692,832
1,270,000 5.46%, 1/1/36, ARM 863729 ............................. 1,309,641
1,830,000 5.50%, 1/1/36 (b) ..................................... 1,812,271
4,700,000 5.50%, 1/1/36 (b) ..................................... 4,654,466
Shares or
Principal Value
Amount (Note 2)
- ---------- -----------
4,300,000 5.50%, 1/1/36 (b) ..................................... 4,258,342
6,110,000 5.50%, 1/1/36 (b) ..................................... 6,050,806
5,915,000 5.50%, 1/1/36 (b) ..................................... 5,857,695
4,275,000 5.50%, 1/1/36 (b) ..................................... 4,233,584
1,885,000 5.50%, 1/1/36 (b) ..................................... 1,864,972
5,340,000 5.50%, 1/1/36 (b) ..................................... 5,288,266
1,755,000 5.50%, 1/1/36 (b) ..................................... 1,737,998
7,645,000 5.50%, 11/25/43 ....................................... 7,642,933
6,272,968 5.95%, 2/25/44 ........................................ 6,292,335
FEDERAL HOME LOAN BANK
1,015,000 5.27%, 12/28/12 ....................................... 1,016,726
FREDDIE MAC
37 8.00%, 5/1/06, Pool #E30879 ........................... 37
5,563,061 6.98%, 10/1/10, Pool #W20024 .......................... 5,965,271
1,285,000 6.90%, 12/1/10, Pool #W10004 .......................... 1,379,448
2,842,107 4.00%, 8/15/13 ........................................ 2,805,799
1,490,000 4.50%, 8/15/13 ........................................ 1,476,588
3,105,000 4.50%, 7/15/16 ........................................ 3,054,628
4,050,146 3.00%, 3/15/17 ........................................ 3,817,943
3,967,685 6.00%, 5/15/17 ........................................ 4,068,219
2,469,264 4.50%, 7/15/19 ........................................ 2,420,070
882,191 6.50%, 9/1/19 ......................................... 906,565
4,169,000 5.50%, 1/15/28 ........................................ 4,186,409
5,240,000 5.00%, 2/15/28 ........................................ 5,175,062
1,240,000 5.50%, 4/15/30 ........................................ 1,238,432
4,175,000 5.50%, 9/15/31 ........................................ 4,161,048
5,420,000 4.50%, 6/15/32 ........................................ 5,257,236
2,545,000 5.50%, 10/15/34 ....................................... 2,520,083
2,729,728 5.00%, 12/1/35, Pool #A40536 .......................... 2,643,571
3,610,000 5.00%, 12/1/35, Pool # G08099 ......................... 3,496,059
4,375,000 5.00%, 1/1/36 (b) ..................................... 4,235,547
7,330,000 5.00%, 1/1/36 (b) ..................................... 7,096,356
-----------
TOTAL MORTGAGE-BACKED SECURITIES ...................... 352,740,209
-----------
U.S.TREASURY OBLIGATIONS (12.2%):
9,250,000 US.Treasury Bonds, 7.50%, 11 /15/16 (L) ............... 11,621,765
26,195,000 US.Treasury Bonds, 7.25%, 8/15/22 (L) ................. 34,121,057
3,319,246 U.S.Treasury Inflation Protection Bond,
3.375%, 1/15/07 (L) ................................... 3,344,661
6,490,000 US.Treasury Notes, 2.75%, 8/15/07 (L) ................. 6,324,206
7,740,000 US.Treasury Notes, 3.375%, 11/15/08 (L) ............... 7,534,712
3,020,000 US.Treasury Notes, 4.875%, 2/15/12 (L) ................ 3,101,519
-----------
TOTAL U.S.TREASURY OBLIGATIONS ........................ 66,047,920
-----------
CLOSED END INVESTMENT COMPANIES (0.9%):
358,900 MFS Government Markets Income Trust ................... 2,332,850
141,000 MFS Intermediate Income Trust ......................... 878,430
139,900 Putnam Premier Income Trust ........................... 849,193
69,500 Salomon Brothers Global High Income Fund Inc. ......... 886,125
9,400 Western Asset/Claymore US Treasury Inflation
Protected Securities Fund ............................. 112,894
-----------
TOTAL CLOSED END INVESTMENT COMPANIES ................. 5,059,492
-----------
CASH EQUIVALENTS (16.0%):
86,104,594 JP Morgan Cash Trade Execution (c) .................... 86,104,594
-----------
TOTAL CASH EQUIVALENTS ................................ 86,104,594
-----------
See accompanying notes to financial statements.
13
PORTFOLIO OF INVESTMENTS (CONTINUED)
NEW COVENANT INCOME FUND
DECEMBER 31, 2005
(UNAUDITED)
Principal Value
Amount (Note 2)
- ---------- ------------
INVESTMENTS HELD AS COLLATERAL FOR LOANED
SECURITIES (3.3%):
11,000,000 Citigroup Global Markets Repurchase Agreement, 4.30%,
1/3/06 (Purchased on 12/30/05, proceeds at maturity
$11,006,569, collateralized by various corporate
bonds, fair value $11,550,000) ....................... 11,000,000
2,000,000 Dresdner Bank Repurchase Agreement, 4.30%, 1/3/06
(Purchased on 12/30/05, proceeds at maturity
$2,001,194, collateralized by various corporate bonds,
fair value $2,100,000) ............................... 2,000,000
3,000,000 HBOS Treasury Services Plc Medium Term
Note, 4.509%, 3/27/06* ............................... 3,000,000
1,000,000 Lehman Brothers Repurchase Agreement, 4.40%, 1/3/06
(Purchased on 12/30/05, proceeds at maturity
$ 1,000,611, collateralized by various corporate
bonds, fair value $1,050,000) ........................ 1,000,000
500,000 Morgan Stanley Repurchase Agreement, 4.375%, 1/3/06
(Purchased on 12/30/05, proceeds at maturity $500,304,
collateralized by various corporate bonds, fair value
$525,000) ............................................ 500,000
250,009 Royal Bank Of Canada Yankee CD, 4.30%, 1/3/06* ....... 250,009
113,559 UBS Securities Repurchase Agreement, 4.25%, 1/3/06
(Purchased on 12/30/05, proceeds at maturity
$1,126,689, collateralized by various U.S. government
agency obligations,fair value $115,830) .............. 113,559
------------
TOTAL INVESTMENTS HELD AS COLLATERAL
FOR LOANED SECURITIES ................................ 17,863,568
------------
TOTAL (COST $630,844,111) (A) ................................... $630,094,400
------------
- ----------
Percentages indicated are based on net assets of $539,537,610.
* Variable or floating rate security. The interest rate shown reflects the
rate in effect as of December 31, 2005.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of $
1,015,318. Cost for federal income tax differs from value by net unrealized
appreciation (depreciation) of securities as follows:
Unrealized appreciation........ $ 4,963,290
Unrealized depreciation........ (6,728,319)
------------
Net unrealized (depreciation).. ($1,765,029)
============
(b) Security purchased on a when-issued or delayed delivery basis.
(c) All or a portion of this security has been segregated as collateral for
securities purchased on a when-issued or delayed delivery basis.
(L) A portion or all of the security is on loan.
(R) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. The Advisor,
using procedures approved by the Board of Trustees, has deemed these
securities to be liquid.
See accompanying notes to financial statements.
14
PORTFOLIO OF INVESTMENTS
NEW COVENANT BALANCED GROWTH FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ------------
INVESTMENT COMPANIES (98.4%):
5,986,090 New Covenant Growth Fund (b)........................... $192,692,238
4,360,972 New Covenant Income Fund (b)........................... 108,980,689
------------
TOTAL INVESTMENT COMPANIES............................. 301,672,927
------------
Principal
Amount
- -----------
CASH EQUIVALENTS (1.1%):
$3,239,307 JP Morgan Cash Trade Execution........................ 3,239,307
------------
TOTAL CASH EQUIVALENTS................................ 3,239,307
------------
TOTAL INVESTMENTS
(COST $275,002,145) (A).......................................... $304,912,234
============
- ----------
Percentages indicated are based on net assets of $306,314,324.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$14,344,181. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.......................................... $ 31,033,446
Unrealized depreciation.......................................... (15,467,538)
------------
Net unrealized appreciation...................................... $ 15,565,908
============
(b) Investment in an affiliate in accordance with Section l2(d)(1)(G) of the
Investment Company Act of 1940, as amended.
NEW COVENANT BALANCED INCOME FUND
DECEMBER 31, 2005
(UNAUDITED)
Value
Shares (Note 2)
- ------ ------------
INVESTMENT COMPANIES (98.4%):
1,494,150 New Covenant Growth Fund (b)........................... $ 48,096,682
3,022,194 New Covenant Income Fund (b)........................... 75,524,621
------------
TOTAL INVESTMENT COMPANIES............................. 123,621,303
------------
Principal
Amount
- ------------
CASH EQUIVALENTS (0.9%):
$1,120,170 JP Morgan Cash Trade Execution........................ 1,120,170
------------
TOTAL CASH EQUIVALENTS................................ 1,120,170
------------
TOTAL INVESTMENTS
(COST $115,060,626) (A).......................................... $124,741,473
============
- ----------
Percentages indicated are based on net assets of $125,597,906.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$2,259,636. Cost for federal income tax differs from value by net
unrealized appreciation (depreciation) of securities as follows:
Unrealized appreciation.......................................... $10,552,143
Unrealized depreciation.......................................... (3,130,932)
-----------
Net unrealized appreciation...................................... $ 7,421,211
===========
(b) Investment in an affiliate in accordance with Section l2(d)(1)(G) of the
Investment Company Act of 1940, as amended.
See accompanying notes to financial statements.
15
STATEMENTS OF ASSETS AND LIABILITIES
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
BALANCED BALANCED
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND
-------------- ------------ ------------ ------------
ASSETS:
Investments, at value (Cost $767,132,355,
$612,980,543, $3,239,307 and $1,120,170,
respectively) ............................ $ 901,418,763 $612,230,832 $ 3,239,307 $ 1,120,170
Investment in affiliates (Cost $517,679, $0,
$271,762,838 and $113,940,456,
respectively) ............................ 493,152 -- 301,672,927 123,621,303
Investments held as collateral for securities
loaned (Cost $125,629,024, $17,863,568,
$0 and $0, respectively) ................. 125,629,024 17,863,568 -- --
-------------- ------------ ------------ ------------
Total Investments ........................... 1,027,540,939 630,094,400 304,912,234 124,741,473
Cash ........................................ -- 264,326 1,453,322 880,075
Interest and dividends receivable ........... 1,001,837 4,343,721 12,987 4,717
Receivable for investment sold .............. 1,550,152 18,003,809 -- --
Receivable for foreign currency contracts ... 1,146 -- -- --
Receivable from affiliate ................... -- -- 70,456 27,106
Reclaims receivable ......................... 46,466 -- -- --
Prepaid expenses and other assets ........... 21,973 17,173 11,574 7,903
-------------- ------------ ------------ ------------
Total Assets: ............................... 1,030,162,513 652,723,429 306,460,573 125,661,274
-------------- ------------ ------------ ------------
LIABILITIES:
Payable for investment purchased ............ 4,283,730 94,880,739 -- --
Payable for foreign overdraft ............... 1,191 -- -- --
Payable for return of collateral received on
securities loanded ....................... 125,629,024 17,863,568 -- --
Cash overdraft .............................. 423,542
Accrued expenses and other payables:
Investment advisory fees ................. 632,163 270,355 -- --
Administration fees ...................... 3,783 2,232 1,298 529
Sharholder service fees .................. 131,635 73,383 70,456 27,106
Transfer fees ............................ 17,906 15,142 35,503 19,172
Accounting fees .......................... 22,283 11,450 6,497 2,524
Chief Compliance fees .................... 30,947 16,001 10,784 3,914
Other .................................... 162,678 52,949 21,711 10,123
-------------- ------------ ------------ ------------
Total Liabilities: .......................... 131,338,882 113,185,819 146,249 63,368
-------------- ------------ ------------ ------------
NET ASSETS: ................................. $ 898,823,631 $539,537,610 $306,314,324 $125,597,906
============== ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital .......................... 864,434,528 542,665,307 301,858,721 122,065,182
Undistributed (distributions in excess of)
net investment income ................. (429,571) (377,612) (2,873) (1,484)
Accumulated net realized gains/(losses) on
investment and foreign currency
transactions .......................... (99,440,295) (2,000,374) (25,451,613) (6,146,639)
Net unrealized appreciation/(depreciation)
on investments and translation of
assets and liabilities denominated in
foreign currencies .................... 134,258,969 (749,711) 29,910,089 9,680,847
-------------- ------------ ------------ ------------
Total Net Assets ............................ $ 898,823,631 $539,537,610 $306,314,324 $125,597,906
============== ============ ============ ============
Share outstanding ........................... 27,924,407 21,591,577 3,771,724 6,548,139
Net asset value, offering and redemption
price per share .......................... $ 32.19 $ 24.99 $ 81.21 $ 19.18
See accompanying notes to financial statements.
16
STATEMENTS OF OPERATIONS
NEW COVENANT FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2005
(UNAUDITED)
BALANCED BALANCED
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND
----------- ------------ ----------- -----------
INVESTMENT INCOME:
Interest ................................ $ 246,919 $ 12,724,803 $ 71,517 $ 28,434
Dividend ................................ 6,563,352 49,243 -- --
Dividend income from affiliates ......... -- -- 2,791,969 1,701,097
Foreign tax withholding ................. (60,314) -- -- --
Income from securities lending .......... 160,925 45,009 -- --
----------- ------------ ----------- ----------
Total Income: ........................... 6,910,882 12,819,055 2,863,486 1,729,531
----------- ------------ ----------- ----------
EXPENSES:
Investment advisory fees ................ 4,443,973 2,039,290 -- --
Administration fees ..................... 89,770 54,377 30,965 12,674
Shareholder service fees ................ 802,161 437,495 383,375 156,536
Accounting fees ......................... 142,722 79,212 40,501 16,805
Audit fees .............................. 20,631 13,005 7,629 3,455
Custodian fees .......................... 59,758 4,104 415 422
Insurance fees .......................... 17,121 10,592 6,128 2,469
Legal fees .............................. 43,355 26,468 15,163 6,166
Registration and filing fees ............ 9,435 9,508 9,086 8,335
Printing fees ........................... 21,283 13,405 7,548 3,231
Chief Compliance officer fees ........... 11,905 6,242 4,105 1,548
Transfer agent fees ..................... 38,426 36,252 75,309 40,895
Other fees .............................. 38,739 28,634 16,629 6,857
----------- ------------ ----------- ----------
Total expenses before contractual fee
reductions ........................... 5,739,279 2,758,584 596,853 259,393
Expenses contractually reduced .......... (869,815) (478,469) (406,711) (166,087)
Expenses paid indirectly ................ (48,466) (1,901) -- --
----------- ------------ ----------- ----------
Total Expenses .......................... 4,820,998 2,278,214 190,142 93,306
----------- ------------ ----------- ----------
NET INVESTMENT INCOME ................... 2,089,884 10,540,841 2,673,344 1,636,225
----------- ------------ ----------- ----------
REALIZED AND UNREALIZED GAINS/ (LOSSES)
FROM INVESTMENTS AND FOREIGN CURRENCY:
Realized gains/(losses) on investment
and foreign currency transactions .... 37,428,266 (1,219,070) (699,535) (334,557)
Realized gain distributions from
underlying funds ..................... -- -- 48,010+ 33,085+
Net change in unrealized appreciation/
(depreciation) on investments and
translation of assets and liabilities
denominated in foreign currency ...... 27,972,268 (10,401,869) 12,326,806 2,133,283
----------- ------------ ----------- ----------
Net realized/unrealized gains/(losses) on
investments and foreign currency ..... 65,400,534 (11,620,939) 11,675,281 1,831,811
----------- ------------ ----------- ----------
Change in net assets resulting from
operations ........................... $67,490,418 $ (1,080,098) $14,348,625 $3,468,036
=========== ============ =========== ==========
+ Represents realized gain distributions from investments in affiliates.
See accompanying notes to financial statements.
17
STATEMENTS OF CHANGES IN NET ASSETS
NEW COVENANT FUNDS
GROWTH FUND INCOME FUND
---------------------------- ----------------------------
FOR THE FOR THE
SIX MONTHS FOR THE SIX MONTHS FOR THE
ENDED DECEMBER YEAR ENDED DECEMBER YEAR
31, 2005 ENDED 31, 2005 ENDED
(UNAUDITED) JUNE 30,2005 (UNAUDITED) JUNE 30,2005
-------------- ------------ -------------- ------------
OPERATIONS:
Net investment income ............................................. $ 2,089,884 $ 6,327,831 $ 10,540,841 $ 19,505,062
Net realized gains/(losses) on investment and foreign currency
transactions ................................................... 37,428,266 28,371,237 (1,219,070) 4,612,365
Net change in unrealized appreciation/(depreciation) on
investments and translation of assets and liabilities
denominated in foreign currency ................................ 27,972,268 26,222,561 (10,401,869) 6,746,552
------------ ------------ ------------ ------------
Change in net assets resulting from operations .................... 67,490,418 60,921,629 (1,080,098) 30,863,979
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ........................................ (2,380,216) (6,321,345) (10,951,563) (21,501,226)
From net realized gains on investments ............................ -- -- (236,126) (1,303,165)
------------ ------------ ------------ ------------
Change in net assets from shareholder distributions ............... (2,380,216) (6,321,345) (11,187,689) (22,804,391)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Change in net assets from share transactions (Note 5) ............. (44,869,241) (10,593,031) 24,597,325 (4,876,397)
------------ ------------ ------------ ------------
Change in net assets .............................................. 20,240,961 44,007,253 12,329,538 3,183,191
------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period ............................................... 878,582,670 834,575,417 527,208,072 524,024,881
------------ ------------ ------------ ------------
End of period ..................................................... $898,823,631 $878,582,670 $539,537,610 $527,208,072
============ ============ ============ ============
Undistributed (distributions in excess of) net investment income .. $ (429,571) $ (139,239) $ (377,612) $ 33,110
------------ ------------ ------------ ------------
See accompanying notes to financial statements.
18
STATEMENTS OF CHANGES IN NET ASSETS
NEW COVENANT FUNDS
BALANCED GROWTH FUND BALANCED INCOME FUND
---------------------------- ----------------------------
FOR THE FOR THE
SIX MONTHS FOR THE SIX MONTHS FOR THE
ENDED DECEMBER YEAR ENDED DECEMBER YEAR
31, 2005 ENDED 31, 2005 ENDED
(UNAUDITED) JUNE 30,2005 (UNAUDITED) JUNE 30,2005
-------------- ------------ -------------- ------------
OPERATIONS:
Net investment income ............................................. $ 2,673,344 $ 5,580,288 $ 1,636,225 $ 3,185,482
Net realized gains/(losses) on investment and foreign currency
transactions ................................................... (699,535) (6,816,575) (334,557) (1,712,699)
Realized gain distributions from underlying funds ................. 48,010+ 274,261+ 33,085+ 181,705+
Net change in unrealized appreciation/(depreciation) on
investments .................................................... 12,326,806 20,674,190 2,133,283 5,905,857
------------ ------------ ------------ ------------
Change in net assets resulting from operations .................... 14,348,625 19,712,164 3,468,036 7,560,345
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ........................................ (2,693,445) (5,571,223) (1,645,680) (3,181,809)
------------ ------------ ------------ ------------
Change in net assets from shareholder distributions ............... (2,693,445) (5,571,223) (1,645,680) (3,181,809)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Change in net assets from share transactions (Note 5) ............. (10,864,581) (11,063,444) (1,033,844) (4,484,502)
------------ ------------ ------------ ------------
Change in net assets .............................................. 790,599 3,077,497 788,512 (105,966)
------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period ............................................... 305,523,725 302,446,228 124,809,394 124,915,360
------------ ------------ ------------ ------------
End of period ..................................................... $306,314,324 $305,523,725 $125,597,906 $124,809,394
============ ============ ============ ============
Undistributed (distributions in excess of) net investment income .. $ (2,873) $ 17,228 $ (1,484) $ 7,971
------------ ------------ ------------ ------------
+ Represents realized gain distributions from investments in affiliates.
19
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
GROWTH FUND
------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE FOR THE FOR THE FOR THE FOR THE
DECEMBER 31, YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
2005 JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
(UNAUDITED) 2005 2004 2003 2002 2001
------------ ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period......... $ 29.92 $ 28.07 $ 23.51 $ 24.13 $ 29.26 $ 42.07
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net Investment income..................... 0.07 0.21 0.07 0.10 0.04 0.10
Net realized and unrealized gains/(losses)
from investments and foreign currency
transactions........................... 2.28 1.85 4.58 (0.63) (5.11) (4.86)
-------- -------- -------- -------- -------- --------
Total from Investment Activities.......... 2.35 2.06 4.65 (0.53) (5.07) (4.76)
-------- -------- -------- -------- -------- --------
DIVIDENDS
Net investment income..................... (0.08) (0.21) (0.09) (0.09) (0.01) --
Net realized gains........................ -- -- -- -- -- (7.80)
Tax return of capital..................... -- -- -- -- (0.05) (0.25)
-------- -------- -------- -------- -------- --------
Total Dividends........................... (0.08) (0.21) (0.09) (0.09) (0.06) (8.05)
-------- -------- -------- -------- -------- --------
Change in net asset value per share....... 2.27 1.85 4.56 (0.62) (5.13) (12.81)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD............ $ 32.19 $ 29.92 $ 28.07 $ 23.51 $ 24.13 $ 29.26
======== ======== ======== ======== ======== ========
Total Return.............................. 7.87%(a) 7.38% 19.81% (2.17%) (17.34%) (12.33%)
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's).... $898,824 $878,583 $834,575 $708,885 $695,622 $816,901
Ratio of expenses to average net assets... 1.07%(b) 1.11% 1.13% 1.13% 1.11% 1.07%
Ratio of net investment income to
average net assets..................... 0.47%(b) 0.75% 0.32% 0.47% 0.15% 0.20%
Ratio of expenses to average net assets*.. 1.28%(b) 1.36% 1.39% 1.13% 1.11% 1.07%
Portfolio turnover rate................... 24% 76% 94% 63% 79% 142%
- ----------
* Ratios excluding waivers and expenses paid indirectly.
(a) Not Annualized
(b) Annualized
See accompanying notes to financial statements.
20
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
INCOME FUND
------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE FOR THE FOR THE FOR THE FOR THE
DECEMBER 31, YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
2005 JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
(UNAUDITED) 2005 2004 2003 2002 2001
------------ ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period ........ $ 25.56 $ 25.17 $ 26.62 $ 25.54 $ 24.83 $ 23.89
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income .................... 0.49 0.94 0.96 1.00 1.21 1.50
Net realized and unrealized gains/(losses)
from investments ...................... (0.54) 0.55 (0.96) 1.42 0.73 0.92
-------- -------- -------- -------- -------- --------
Total from Investment Activities ......... (0.05) 1.49 -- 2.42 1.94 2.42
-------- -------- -------- -------- -------- --------
DIVIDENDS
Net investment income .................... (0.51) (1.04) (0.90) (1.06) (1.23) (1.48)
Net realized gains ....................... (0.01) (0.06) (0.44) (0.28) -- --
Tax return of capital .................... -- -- (0.11) -- -- --
-------- -------- -------- -------- -------- --------
Total Dividends .......................... (0.52) (1.10) (1.45) (1.34) (1.23) (1.48)
-------- -------- -------- -------- -------- --------
Change in net asset value per share ...... (0.57) 0.39 (1.45) 1.08 0.71 0.94
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ........... $ 24.99 $ 25.56 $ 25.17 $ 26.62 $ 25.54 $ 24.83
======== ======== ======== ======== ======== ========
Total Return ............................. (0.20)%(a) 6.02% 0.00% 9.63% 7.97% 10.31%
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's) ...... $539,538 $527,208 $524,025 $525,734 $545,356 $559,286
Ratio of expenses to average net assets ..... 0.84%(b) 0.86% 0.86% 0.85% 0.84% 0.82%
Ratio of net investment income to
average net assets ....................... 3.88%(b) 3.68% 3.70% 3.79% 4.72% 5.99%
Ratio of expenses to average net assets* .... 1.01%(b) 1.08% 1.11% 0.85% 0.84% 0.82%
Portfolio turnover rate ..................... 124% 206% 242% 226% 290% 191%
- ----------
* Ratios excluding waivers and expenses paid indirectly.
(a) Not Annualized
(b) Annualized
See accompanying notes to financial statements.
21
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
BALANCED GROWTH FUND
------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE FOR THE FOR THE FOR THE FOR THE
DECEMBER 31, YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
2005 JUNE JUNE JUNE JUNE JUNE
(UNAUDITED) 30, 2005 30, 2004 30, 2003 30, 2002 30, 2001
------------ ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period ......... $ 78.20 $ 74.65 $ 67.88 $ 67.25 $ 81.92 $ 91.84
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income ..................... 0.71# 1.41# 1.34# 1.27# 1.52# 2.33#
Net realized and unrealized gains/(losses)
from investments ....................... 3.01# 3.54# 6.73# 0.71# (7.44)# (5.07)#
-------- -------- -------- -------- -------- --------
Total from Investment Activities .......... 3.72 4.95 8.07 1.98 (5.92) (2.74)
-------- -------- -------- -------- -------- --------
DIVIDENDS
Net investment income ..................... (0.71) (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 ........................... (0.71) (1.40) (1.30) (1.35) (8.75) (7.18)
-------- -------- -------- -------- -------- --------
Change in net asset value per share ....... 3.01 3.55 6.77 0.63 (14.67) (9.92)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ............ $ 81.21 $ 78.20 $ 74.65 $ 67.88 $ 67.25 $ 81.92
======== ======== ======== ======== ======== ========
Total Returns ............................. 4.77%(a) 6.68% 11.95% 3.10% (7.79%) (3.01%)
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's) .... $306,314 $305,524 $302,446 $272,467 $286,314 $314,873
Ratio of expenses to average net assets ... 0.12%(b) 0.14% 0.15% 0.14% 0.11% 0.09%
Ratio of net investment income to
average net assets ..................... 1.73%(b) 1.83% 1.52% 1.96% 2.02% 2.61%
Ratio of expenses to average net assets* .. 0.39%(b) 0.22% 0.15% 0.14% 0.11% 0.09%
Portfolio turnover rate ................... 5% 5% 12% 15% 18% 18%
- ----------
* Ratios excluding waivers
# Includes income or gains/(losses) from affiliates,
(a) Not Annualized
(b) Annualized
See accompanying notes to financial statements.
22
FINANCIAL HIGHLIGHTS
NEW COVENANT FUNDS
For a Share outstanding throughout each period.
BALANCED INCOME FUND
------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE FOR THE FOR THE FOR THE FOR THE
DECEMBER 31, YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
2005 JUNE JUNE JUNE JUNE JUNE
(UNAUDITED) 30, 2005 30, 2004 30, 2003 30, 2002 30, 2001
------------ ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period ......... $ 18.90 $ 18.24 $ 17.52 $ 17.10 $ 18.88 $ 20.01
-------- -------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income ..................... 0.25# 0.48# 0.53# 0.52# 0.57# 0.78#
Net realized and unrealized gains/(losses)
from investments ....................... 0.28# 0.66# 0.70# 0.47# (0.84)# (0.38)#
-------- -------- -------- -------- -------- --------
Total from Investment Activities .......... 0.53 1.14 1.23 0.99 (0.27) 0.40
-------- -------- -------- -------- -------- --------
DIVIDENDS
Net investment income ..................... (0.25) (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 ........................... (0.25) (0.48) (0.51) (0.57) (1.51) (1.53)
-------- -------- -------- -------- -------- --------
Change in net asset value per share ....... 0.28 0.66 0.72 0.42 (1.78) (1.13)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ............ $ 19.18 $ 18.90 $ 18.24 $ 17.52 $ 17.10 $ 18.88
======== ======== ======== ======== ======== ========
Total Return .............................. 2.82%(a) 6.32% 7.07% 6.00% (1.55%) 2.08%
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (in 000's) .... $125,598 $124,809 $124,915 $122,576 $114,013 $116,519
Ratio of expenses to average net assets ... 0.15%(b) 0.17% 0.18% 0.16% 0.14% 0.12%
Ratio of net investment income to
average net assets ..................... 2.58%(b) 2.58% 2.34% 3.08% 3.13% 3.88%
Ratio of expenses to average net assets* .. 0.41%(b) 0.25% 0.18% 0.16% 0.14% 0.12%
Portfolio turnover rate ................... 7% 6% 12% 18% 11% 20%
- ----------
* Ratios excluding waivers
# Includes income or gains/(losses) from affiliates.
(a) Not Annualized
(b) Annualized
See accompanying notes to financial statements.
23
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
1. ORGANIZATION
New Covenant Funds (the "Trust"), an open-end, diversified management investment
company, was organized as a Delaware business trust on September 30, 1998. It
currently consists of four investment funds: New Covenant Growth Fund ("Growth
Fund"), New Covenant Income Fund ("Income Fund"), New Covenant Balanced Growth
Fund ("Balanced Growth"), and New Covenant Balanced Income Fund ("Balanced
Income"), (individually, a "Fund," and collectively, the "Funds"). The Funds
commenced operations on July 1, 1999. The Trust's authorized capital consists of
an unlimited number of shares of beneficial interest of $0.001 par value. The
Funds' investment advisor is the NCF Investment Department of New Covenant Trust
Company, N.A., a wholly owned subsidiary of the Presbyterian Church (U.S.A.)
Foundation (the "Advisor").
The objectives of the Funds are as follows:
Growth Fund Long-term capital appreciation. Dividend income, if any,
will be incidental.
Income Fund High level of current income with preservation of
capital.
Balanced Growth Fund Capital appreciation with less risk than would be present
in a portfolio of only common stocks.
Balanced Income Fund Current income and long-term growth of capital.
Under the Trust's organizational documents, its officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Trust
enters into contracts with its vendors and others that provide general
indemnification. Each Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against a Fund.
However, based on experience, the Funds expect the risk of loss to be remote.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with GAAP.
PORTFOLIO VALUATION: Fund investments are recorded at market value. Portfolio
securities listed on a domestic or foreign exchange are valued at the last sale
price on the day of valuation or, if there was no sale that day, at the last
reported bid price as of the close of trading. Equity securities traded on
NASDAQ use the official closing price. Equity securities which are traded in the
over-the-counter market only, but which are not included on NASDAQ, are valued
at the mean between the last preceding bid and ask prices. Debt securities with
a remaining maturity of sixty days or more are valued using a pricing service
when such prices are believed to reflect fair market value. Debt securities with
a remaining maturity of less than sixty days are valued at amortized cost, which
approximates market value. Investment companies are valued at net asset value.
All other securities and securities with no readily determinable market values
are valued using procedures adopted by the Board of Trustees. Factors used in
determining fair value include but are not limited to: type of security or
asset, fundamental analytical data relating to the investment in the security,
evaluation of the forces that influence the market in which the security is
purchased and sold, and information as to any transactions or offers with
respect to the security.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the New York Stock Exchange ("NYSE"). Occasionally, events affecting the value
of such securities may occur between such times and the close of the NYSE that
will not be reflected in the security's market value. If events materially
affecting the value of such securities occur during such period, these
securities will be valued at their fair value according to procedures adopted by
the Board of Trustees. All securities and other assets of a Fund initially
expressed in foreign currencies will be converted to U.S. dollar values at the
foreign exchange rate every business day, generally at 4:00 PM EST.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: 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.
24
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
OPTIONS: The Funds may purchase or write options which are traded
over-the-counter to hedge fluctuation risks in the prices of certain securities.
When 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 December 31, 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 December 31,
2005.
LOANS OF PORTFOLIO SECURITIES: The Growth Fund and the Income Fund may lend
their securities pursuant to a securities lending agreement ("Lending
Agreement") with JPMorgan Chase Bank, N.A. ("JPMorgan"). 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 investment
income in the respective Statements of Operations.
At December 31, 2005, the cash collateral received by the Growth Fund and the
Income Fund was invested in repurchase agreements with interest rates ranging
from 4.25% to 4.40% and a maturity date of January 3, 2006 and other short-term
securities. 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 December 31,2005,
was as follows:
VALUE OF VALUE OF VALUE OF
FUND SECURITIES LOANED CASH COLLATERAL NON-CASH COLLATERAL
- ----------- ----------------- --------------- -------------------
Growth Fund $121,383,858 $125,629,024 $ --
Income Fund 65,634,099 17,863,568 49,072,541
25
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
REPURCHASE AGREEMENTS: The Funds may enter into repurchase agreements which are
secured by obligations of the U.S. government with a bank, broker-dealer or
other financial institution. Each repurchase agreement is at least 102%
collateralized and marked-to-market. However, in the event of default or
bankruptcy by the counterparty to the agreement, realization of the collateral
may by subject to certain costs, losses or delays.
FORWARD COMMITMENTS, WHEN-ISSUED SECURITIES AND DELAYED-DELIVERY TRANSACTIONS:
The Growth Fund and the Income Fund may purchase or sell securities on a
when-issued or delayed-delivery basis and make contracts to purchase or sell
securities for a fixed price at a future date beyond customary settlement time.
Debt securities are often issued on that basis. No income will accrue on
securities purchased on a when-issued or delayed-delivery basis until the
securities are delivered. The Funds will 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. These
procedures are designed to ensure that the Funds will maintain sufficient assets
at all times to cover their obligations under when-issued purchases,
forward-commitments and delayed-delivery transactions.
As of December 31, 2005, the Funds had outstanding when-issued or
delayed-delivery purchase commitments with corresponding assets segregated, as
follows:
FUND AMOUNT
- ---- -----------
Income Fund........... $72,758,277
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 and Income Funds direct certain
portfolio trades to brokers who rebate a portion of their commissions in cash to
the Funds. The recaptured commissions are used to pay expenses of the Funds,
including, but not limited to, administration fees, custody fees, audit fees and
printing fees, as directed by the Trust. Under this arrangement, the Growth Fund
and Income Fund had expenses reduced by $48,466 and $1,901, respectively, or
0.01 % and 0.00%, respectively, as a percentage of the average daily net assets
of the Fund on an annualized basis for the period ended December 31, 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 New Covenant Trust Company, N.A.
(the "Advisor"). Under the Agreement, the Advisor is responsible for managing
the Funds' investments
26
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
as well as furnishing the Funds with certain administrative services. The Growth
Fund pays the Advisor a monthly fee at the annual rate of 0.99% of the Growth
Fund's average daily net assets and the Income Fund pays the Advisor a monthly
fee at the annual rate of 0.75% of the Income Fund's average daily net assets.
The Advisor does not receive advisory fees for the Balanced Growth and Balanced
Income Funds (the "Balanced Funds"). The Advisor has entered into Sub-Advisory
Agreements with six Sub-Advisors to assist in the selection and management of
the Growth Fund's and Income Fund's investment securities. It is the
responsibility of the Sub-Advisors, under the direction of the Advisor, to make
day-to-day investment decisions for these Funds. The Advisor pays each
Sub-Advisor a quarterly fee for their services. The Advisor pays the
Sub-Advisor's fee directly from its own advisory fees. The sub-advisory fees are
based on the assets of a Fund for which the Sub-Advisor is responsible for
making investment decisions.
The following are the Sub-Advisors for the Growth Fund: Capital Guardian Trust
Company, Mazama Capital Management Inc., Santa Barbara Asset Management Inc.,
Sound Shore Management Inc., and Wellington Management Company, LLP.
Tattersall Advisory Group is the Sub-Advisor for the Income Fund.
The Trust employs a Chief Compliance Officer ("CCO") who receives a portion of
his compensation as approved by the Board of Trustees, as well as reimbursement
of out-of-pocket expenses. The CCO is also an employee of the Advisor.
The Trust is a party to 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.
However, as a result of an April 22, 2005 amendment to the Administration
Agreement, BISYS Ohio annually waives $280,000.
During the period ended December 31, 2005, the Trust issued shares of the Fund
pursuant to a Distribution Agreement with New Covenant Funds Distributor, Inc.
(the "Distributor"), an indirect, wholly owned subsidiary of BISYS, under which
the Distributor served as the principal distributor of the Funds' shares. The
Funds do not pay the Distributor in its capacity as principal distributor. On or
about February 23, 2006, the Distributor became a wholly-owned subsidiary of New
Covenant Trust Company, N.A., a subsidiary of the Presbyterian Foundation.
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
Trustees and Officers in attending Board and Committee meetings.
4. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term U.S. government and other short-term investments, for the six months
ended December 31, 2005, were as follows:
FUND PURCHASES SALES
- ---- ------------ ------------
Growth Fund........... $208,138,414 $246,873,634
Income Fund........... 674,072,481 644,014,329
Balanced Growth Fund.. 13,950,297 24,987,821
Balanced Income Fund.. 8,323,120 9,545,074
27
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
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.
FOR THE SIX MONTHS
ENDED DECEMBER 31, 2005 YEAR ENDED JUNE 30, 2005
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
GROWTH FUND:
Issued 559,455 $ 17,367,111 1,761,611 $ 50,628,532
Reinvested 5,118 162,256 13,925 403,177
Redeemed (2,008,187) (62,398,608) (2,144,207) (61,624,740)
---------- ------------ ---------- ------------
Net decrease (1,443,614) $(44,869,241) (368,671) $(10,593,031)
========== ============ ========== ============
FOR THE SIX MONTHS
ENDED DECEMBER 31, 2005 YEAR ENDED JUNE 30, 2005
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
INCOME FUND:
Issued 1,710,458 $ 43,407,205 1,545,813 $ 39,398,853
Reinvested 39,751 994,441 95,941 2,523,604
Redeemed (786,383) (19,804,291) (1,830,986) (46,798,854)
--------- ------------ ---------- ------------
Net increase (decrease) 963,826 $ 24,597,325 (189,232) $ (4,876,397)
========= ============ ========== ============
FOR THE SIX MONTHS
ENDED DECEMBER 31, 2005 YEAR ENDED JUNE 30, 2005
----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ -------- -------------
BALANCED GROWTH FUND:
Issued 133,928 $ 10,646,871 329,356 $ 25,120,358
Reinvested 25,112 2,022,482 53,802 4,122,054
Redeemed (294,239) (23,533,934) (527,726) (40,305,856)
-------- ------------ -------- ------------
Net decrease (135,199) $(10,864,581) (144,568) $(11,063,444)
======== ============ ======== ============
FOR THE SIX MONTHS
ENDED DECEMBER 31, 2005 YEAR ENDED JUNE 30, 2005
----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ -------- -------------
BALANCED INCOME FUND: 242,178 $ 4,626,585 494,461 $ 9,215,771
Issued Reinvested 52,122 995,354 103,269 1,924,091
Redeemed (349,152) (6,655,783) (842,433) (15,624,364)
-------- ----------- -------- ------------
Net decrease (54,852) $(1,033,844) (244,703) $ (4,484,502)
======== =========== ======== ============
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 I44A
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
28
NOTES TO FINANCIAL STATEMENTS
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
not registered under the Securities Act but which can be sold to "qualified
institutional buyers" in accordance with Rule 144A under the Securities Act. In
some cases, such securities are classified as "illiquid securities"; however,
any such security will not be considered illiquid so long as it is determined by
the Advisor, under guidelines approved by the Board of Trustees, that an
adequate trading market exists for that security. This investment practice could
have the effect of increasing the level of illiquidity in a Fund during any
period that qualified institutional buyers become uninterested in purchasing
these restricted securities.
The Income Fund may invest a limited amount of assets in debt securities which
are rated below investment grade (hereinafter referred to as "lower-rated
securities") or which are 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.
29
SUPPLEMENTAL DATA (UNAUDITED)
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
PROXY VOTING POLICY AND PROXY VOTING RECORD
A description of the policies and procedures that the Trust uses to determine
how to vote proxies related to portfolio securities and information regarding
how the Funds voted proxies related to portfolio securities held during the most
recent 12-month period ended June 30,2005, are 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 and the Funds' website at
www.NewCovenantFunds.com.
QUARTERLY HOLDINGS
Portfolio holdings statements for the Funds for the quarters ended March 31 and
September 30, are available, without charge, on the Securities and Exchange
Commission's website at http://www.sec.gov.
ADDITIONAL FUND INFORMATION - HYPOTHETICAL COST OF INVESTING
As a shareholder of the New Covenant Funds, you incur ongoing costs, including
management fees and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the New Covenant
Funds and to compare these costs with the ongoing costs of investing in other
mutual funds.
The Example is based on an investment of $ 1,000 invested at the beginning of
the period and held for the entire period from July 1,2005 through December
31,2005.
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
ACCOUNT ACCOUNT EXPENSE PAID EXPENSE RATIO
VALUE VALUE DURING PERIOD* DURING PERIOD**
7/1/05 12/31/05 7/1/05 - 12/31/05 7/1/05 - 12/31/05
--------- --------- ----------------- -----------------
Growth Fund $1,000.00 $1,078.70 $5.61 1.07%
Income Fund 1,000.00 998.00 4.23 0.84%
Balanced Growth Fund 1,000.00 1,047.70 0.62 0.12%
Balanced Income Fund 1,000.00 1,028.20 0.77 0.15%
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below provides information about hypothetical account values and
hypothetical expenses based on each of the New Covenant Funds' actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the 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
ACCOUNT ACCOUNT EXPENSE PAID EXPENSE RATIO
VALUE VALUE DURING PERIOD* DURING PERIOD**
7/1/05 12/31/05 7/1/05 - 12/31/05 7/1/05 - 12/31/05
--------- --------- ----------------- -----------------
Growth Fund $1,000.00 $1,019.81 $5.45 1.07%
Income Fund 1,000.00 1,020.97 4.28 0.84%
Balanced Growth Fund 1,000.00 1,024.60 0.61 0.12%
Balanced Income Fund 1,000.00 1,024.45 0.77 0.15%
* Expenses are equal to the average account value times the Fund's annualized
expense ratio multiplied by the number of days in the most recent fiscal
half-year divided by the number of days in the fiscal year.
** Annualized.
30
SUPPLEMENTAL DATA (UNAUDITED)
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
SHAREHOLDER MEETING
On August 15, 2005, a special meeting of the shareholders of the Trust was held
pursuant to a proxy statement, dated and mailed to the Shareholders of the Trust
on or about July 15, 2005 to consider the following proposal.
PROPOSAL ONE: TO ELECT EIGHT TRUSTEES TO THE TRUST'S BOARD.
The actual vote tabulation for the proposal was as follows:
Trustee Affirmative Witheld Total
- ------- ----------- ------- ----------
Gail C. Duree 47,126,057 99,636 47,225,693
Rev. Donald B. Register 47,120,528 105,165 47,225,693
John D. Stuart 47,120,528 105,165 47,225,693
F. Kenneth Bateman 47,126,057 99,636 47,225,693
Cynthia S. Gooch 47,124,040 101,653 47,225,693
Robert E. Leech 47,125,048 100,645 47,225,693
William C. Lauderbach 47,126,590 99,103 47,225,693
Samuel W. McNairy 47,127,148 98,545 47,225,693
The Shareholders of the Trust voted to elect each of the Trustees nominees named
in Proposal One.
31
SUPPLEMENTAL DATA (UNAUDITED)
NEW COVENANT FUNDS
DECEMBER 31, 2005
(UNAUDITED)
APPROVAL OF THE SUB-ADVISORY AGREEMENT WITH SANTA BARBARA ASSET MANAGEMENT INC.
("SANTA BARBARA")
A Sub-Advisory Agreement (the "Agreement") between the Advisor and Santa Barbara
with respect to the New Covenant Growth Fund was approved by the Board of
Trustees on August 29, 2005 due to a change in control of Santa Barbara and the
automatic termination of the existing sub-advisory agreement with Santa Barbara
in accordance with the applicable provisions of Investment Company Act of 1940,
as amended (the "1940 Act"). Santa Barbara was acquired by Nuveen Investments,
Inc. ("Nuveen"), a publicly traded investment advisory company and management
firm. The Board took action with respect to the approval of the Agreement as a
result of having been informed of the anticipated acquisition of Santa Barbara
by Nuveen and the resulting termination of the existing sub-advisory agreement
between the Advisor and Santa Barbara. Relevant provisions of the 1940 Act
specifically provide that it is the duty of the Board to request and evaluate
such information as the Board determines is necessary to allow the Board to
properly consider the approval of the Agreement, and it is the duty of Santa
Barbara to furnish the Trustees with such information as is responsive to their
request. Accordingly, in determining whether to approve the Agreement, the Board
of Trustees relied on materials Santa Barbara provided to the Board. This
included materials regarding the investment performance of the portion of the
Fund managed by Santa Barbara and information regarding the fees and expenses of
the Fund, as compared to other similar mutual funds. As part of its
deliberations, the Board also considered and relied upon the information about
the Fund and Santa Barbara 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 Fund and their operations.
Among the factors considered by the Board was the similarity of the Agreement to
the agreement approved by the Board for Santa Barbara that would be terminating
by operation of the 1940 Act, specifically that the only material difference to
the Agreement reflected Santa Barbara's new status as a subsidiary of Nuveen.
The Board also considered the information regarding Santa Barbara that had been
reviewed by the Board at the meeting of the held on May 16, 2005, and reviewed
the conclusions reached with respect to the continuation of the sub-advisory
agreement with Santa Barbara. Furthermore, the Board considered the
representation regarding the continuity of the portfolio management team at
Santa Barbara following the merger with Nuveen.
In reaching their conclusion with respect to the approval of the Agreement, the
Trustees did not identify any one single factor as being controlling; rather,
the Trustees took note of a combination of factors that influenced their
decision-making process. The Board did, however, identify the performance of
Santa Barbara as a portfolio manager for the New Covenant Growth Fund. The Board
further considered the additional resources and depth that would be brought to
bear as a result of the transaction with Nuveen.
Based upon their review and consideration of these factors and other matters
deemed relevant by the Board in reaching an informed business judgment, the
Board of Trustees, including a majority of the Independent Trustees, concluded
that the terms of the Agreement are fair and reasonable in light of the services
to be provided and the Board therefore voted to approve the Agreement for a
one-year period. During this process the Independent Trustees were counseled by
their own independent legal counsel (as such term is defined in the rules under
the 1940 Act).
32
TRUSTEES AND OFFICERS
NEW COVENANT FUNDS
DECEMBER 31, 2005
TRUSTEES AND OFFICERS OF THE NEW COVENANT FUNDS
NUMBER OF
PORTFOLIOS IN OTHER
POSITION(S) LENGTH FUND COMPLEX TRUSTEESHIPS/
HELD OF TIME TERM OF OFFICE AND PRINCIPAL OVERSEEN BY DIRECTORSHIPS
NAME AND AGE WITH TRUST SERVED OCCUPATION(S) DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
- ------------ ----------- --------- -------------------------------------- ------------- ---------------
INDEPENDENT TRUSTEES
F. Kenneth Bateman Trustee Since Attorney, Gerber & Bateman, PA. (1999 4 None
200 E. Twelfth St., inception to present);Attorney, Potter, Mills &
Jeffersonville, IN 47l30 Bateman, PA. (1997 to 1999);Trustee,
Age: 65 Presbyterian Church (U.S.A.)
Foundation (1995 to 2001)
Gail C. Duree Trustee Since Independent Financial Consultant, 4 None
200 E. Twelfth St. inception Montview Boulevard Presbyterian Church
Jeffersonville, IN 47l30 Treasurer (1994 to present);Women's
Age: 58 Foundation of Colorado (1995 to
present); Logan School (1996 to
present);Alpha Gamma Delta Foundation
Board (2005)
Cynthia S. Gooch Trustee Since Retired;Trustee, Presbyterian Church 4 None
200 E. Twelfth St. inception (U.S.A.) Foundation (1997 to 2003)
Jeffersonville, IN 47l30
Age: 72
Rev. Donald B. Register Trustee Since Retired. From 1988 to May 2005, 4 None
200 E. Twelfth St. inception Pastor, Sixth-Grace Presbyterian
Jeffersonville, IN 47l30 Church, Chicago, IL
Age: 68
John D. Stuart Trustee February Independent Financial Consultant 4 None
200 E. Twelfth St. 2002
Jeffersonville, IN 47130
Age: 74
William C. Lauderbach Trustee August Executive Vice President and Senior 4 None
200 E. Twelfth St. 2005 Investment Officer, Chemical Bank and
Jeffersonville, IN 47130 Trust Company, Midland, Michigan (1985
Age: 67 to present).
INTERESTED TRUSTEES
Robert E. Leech President May 2005 President and Chief Executive Officer 4 None
200 E. Twelfth St. and of the Presbyterian Church (U.S.A.)
Jeffersonville, IN 47130 Trustee Foundation (2000 to present)
Age: 60
Samuel W.McNairy Trustee August Retired. From 1964 to 2001, Deloitte & 4 None
200 E. Twelfth St. 2005 Touche LLP (retired as Partner,
Jeffersonville, IN 47130 2001). Trustee, Presbyterian Church
Age: 63 (U.S.A.) Foundation (January 2005 to
present).
EXECUTIVE OFFICERS
Dennis J. Murphy Vice Since Retired. Formerly Executive Vice N/A N/A
200 E. Twelfth St. President inception President and Chief Investment
Jeffersonville, IN 47130 Officer, Presbyterian Church (U.S.A.)
Age: 63 Foundation and New Covenant Trust
Company (2002-2005); Senior Vice
President and Chief Financial Officer,
Presbyterian Church (U.S.A.)
Foundation and New Covenant Trust
Company (1982 to 2000).
George W. Rue III Vice August Senior Vice President and Vice N/A N/A
200 E. Twelfth St. President 2005 President, Presbyterian Church
Jeffersonville, IN 47130 (U.S.A.) Foundation and New Covenant
Age: 41 Trust Company, N.A. (2004 to present);
Relationship Manager/Product Manager,
INVESCO-National Asset Management
(2001-2004); Relationship Manager,
National Asset Management (2000-2001);
Vice President, Portfolio Manager,
National City Bank of Kentucky
(1995-2000).
Anita J. Clemons Vice August Vice President and Investment Officer, N/A N/A
200 E. Twelfth St. President 2003 New Covenant Trust Company (2000 -
Jeffersonville, IN 47130 present).
Age: 51
Harry Harper Chief August Chief Compliance Officer, New Covenant N/A N/A
200 E. Twelfth St. Compliance 2004 Trust Company (2002- present); Chief
Jeffersonville, IN 47130 Officer Compliance Officer, Allegheny
Age: 60 Financial Group (2000- 2002); Chief
Compliance Officer, Keystone Financial
(1997-2000).
Martin R. Dean Treasurer November Vice President, Fund Administration, N/A N/A
3435 Stelzer Rd., Suite 1000 2005 BISYS Fund Services (1994 - present)
Columbus, OH 43219
Age: 42
Charles J. Daly Secretary February Counsel, BISYS Fund Services (November N/A N/A
3435 Stelzer Rd., Suite 1000 2004 2003-present);Associate, Goodwin
Columbus, OH 43219 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
33
(GRAPHIC)
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
ITEM 2. CODE OF ETHICS.
Not applicable - only for annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable - only for annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable - only for annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded, based on their evaluation of the registrant's disclosure
controls and procedures as conducted within 90 days of the filing date of this
report, that these disclosure controls and procedures are adequately designed
and are operating effectively to ensure that information required to be
disclosed by the registrant on Form N-CSR is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that
occurred during the second fiscal quarter of the period covered by this report
that have materially affected or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1)
NOT APPLICABLE.
(a)(2) CERTIFICATIONS PURSUANT TO RULE 30A-2(A) ARE ATTACHED HERETO.
(a)(3)
NOT APPLICABLE.
(b) CERTIFICATIONS PURSUANT TO RULE 30A-2(B) ARE FURNISHED HEREWITH.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) New Covenant Funds
By (Signature and Title)* /s/ Martin R. Dean
-------------------------------------
Martin R. Dean, Treasurer
Date March 8, 2006
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/ Martin R. Dean
-------------------------------------
Martin R. Dean, Treasurer
Date March 8, 2006
By (Signature and Title)* /s/ Robert E. Leech
-------------------------------------
Robert E. Leech, President
Date March 8, 2006