Christian Brothers Investment Services, Inc. n [email protected] PAGE 1
4Q 2014
Investment Portfolio Review
LEAdinG CAthoLiC institutionAL
invEstmEnt mAnAGEr
} $5.9 billion in assets under management
} Exclusively serve Catholic institutions
} Founded and owned by the De La Salle Christian Brothers
PionEErEd CAthoLiC rEsPonsibLE
invEstinG
} Thoughtful and disciplined Catholic investment screens
} Encourage companies to improve policies and practices through active ownership
divErsifiEd invEstmEnt ProGrAms
} Manager of managers } Institutional pooled funds
and separate accounts
unify fAith And finAnCE
} Align mission with investments
GLobAL CLiEnt bAsE
} Religious Institutes } Dioceses } Education } Healthcare
divErsE rAnGE of nEEds
} Full-service advisory services for range of institutions
} Single- and multi-product relationships with institutions and their consultants
CBIS helps Catholic organizations achieve their financial goals through the socially responsible management of their investments.
12%
83%
5%
1%
10%
9%
6%
7%5%
27%
21%
6%6%
BY PRODUCT TYPE ($MILLION)
BY CUIT TYPE ($MILLION)
Separate Accounts $700UCITS Funds $282CUIT Funds $4,930
Money MarketOpportunistic BondBalancedCore IndexValue
Short bondInt. Diversified BondSmall capGrowthInternational
Cbis Asset review
$5.9 biLLion in totAL AssEts
undEr mAnAGEmEnt (12/31/14)
investment Portfolio review 4Q 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 2
invEstmEnt ProGrAm offErinGsCBIS Offers Pooled Funds through its CUIT and Global Funds plc (UCITS) Fund families
CUIT FUND BENCHMARK MANAGER(s)
CUIT Money Market Fund 91-day treasury bill Wellington
CUIT Short Bond merrill Lynch 1-3 year treasury index Longfellow
CUIT Intermediate Diversified Bond barclays Capital Aggregate index dodge & Cox, Jennison, reams
CUIT Opportunistic Bond barclays 1-5 year us Gov’t Credit index Longfellow and reams
CUIT Balanced 60% s&P 500 / 40% bCAgg dodge & Cox, Jennison, reams, rhumbLine
CUIT Core Equity Index s&P 500 rhumbLine
CUIT Value Equity russell 1000 value index AJo, dodge & Cox
CUIT Growth Equity russell 1000 Growth index LA Capital, Wellington
CUIT Small-Cap Equity Index russell 2000 index rhumbLine
CUIT International Equity msCi EAfE-Gross index Causeway, Principal Global
UCITs FUND BENCHMARK MANAGER(s)
European Short-Term Government Bond barclays Euro Gov’t bond index 1-3 year ArCA
World Bond barclays Capital Global Aggregate index schroder investment management
European Equity msCi Europe index degroof fund management Company
Global Equity msCi World index schroder investment management
Note: UCITS Funds are not available in the U.S., but can be purchased currently in select countries around the world.
Investment Management ProcessCBIS hires institutional investment management firms to manage our institutional funds and separately managed portfolios. We typically combine two or more managers in actively managed funds in order to achieve our investment objective.
MANAGERIDENTIFICATIONAND SELECTION
PORTFOLIOCONSTRUCTION
ON-GOINGDUE DILIGENCE
Proven investment Process
defined Core Competency
value add over a full market cycle
Preference for majority-owned firms
Access Cri impact
diversification of manager core competencies
improved risk-adjusted returns
managed Active share
systematic evaluation process
Quantitative and qualitative assessment
Analyze any disconnect between expectations and reality
investment Portfolio review 4Q 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 3
INVEsTMENT OPTION/BENCHMARK 1 MONTH
3 MONTHs YTD 1
YEAR3
YEARs5
YEARs10
YEARssINCE
INCEPTIONINCEPTION
DATE
CUIT Money Market Fund 0.00 0.00 0.05 0.05 0.02 0.02 1.36 3.54 Jan 1985
Merrill Lynch 91-Day TBill Index 0.00 0.00 0.04 0.04 0.07 0.09 1.54 4.01
CUIT Short Bond Fund (0.29) 0.31 1.37 1.37 1.73 2.16 3.23 5.57 Jan 1985
Merrill Lynch 1-3yr Treasury Index ** (0.24) 0.17 0.62 0.62 0.47 1.06 2.53 5.45
CUIT Opportunistic Bond Fund Class A (0.07) 0.26 1.23 1.23 * * * 0.58 may 2013
CUIT Opportunistic Bond Fund Class B (0.16) 0.20 1.27 1.27 * * * 0.67 may 2013
Barclays 1-5 Year US Government/Credit Index (0.35) 0.41 1.42 1.42 * * * 0.69
CUIT Inter. Diversified Bond Fund Class A (0.06) 1.52 5.65 5.65 3.26 4.82 5.31 6.29 Jan 1995
CUIT Inter. Diversified Bond Fund Class B 0.03 1.63 5.81 5.81 3.44 4.98 5.48 5.24 Jan 2003
Barclays Capital Aggregate Bond Index 0.09 1.79 5.97 5.97 2.66 4.45 4.71 6.20
CUIT Balanced Fund 0.15 3.07 8.80 8.80 14.78 11.28 6.74 9.12 dec 1983
60% S&P 500/ 40% BC Agg*** (0.11) 3.67 10.62 10.62 13.12 11.18 6.77 8.90
CUIT Value Equity Fund Class A 0.18 3.38 9.57 9.57 21.78 15.17 6.98 10.06 Jan 1995
CUIT Value Equity Fund Class B 2.23 3.49 9.97 9.97 22.20 15.57 7.36 10.36 Jan 2003
Russell 1000 Value Index 0.61 4.98 13.45 13.45 20.89 15.42 7.30 10.51
CUIT Core Equity Index Fund Class A (0.15) 5.46 13.99 13.99 20.31 15.07 7.23 9.64 Jan 1995
CUIT Core Equity Index Fund Class B (0.14) 5.49 14.19 14.19 20.55 15.30 7.41 4.84 mar 2000
Standard & Poor’s 500 Index ++ (0.25) 4.93 13.69 13.69 20.42 15.46 7.67 9.86
CUIT Growth Fund Class A (0.84) 5.34 11.65 11.65 19.20 14.47 6.45 8.36 Jan 1991
CUIT Growth Fund Class B (0.83) 5.43 12.06 12.06 19.58 14.83 6.78 8.46 Jan 2003
Russell 1000 Growth Index **** (1.04) 4.78 13.05 13.05 20.26 15.81 8.49 9.42
CUIT Small Cap Equity Index Fund Class A 2.82 9.69 4.46 4.46 18.51 14.88 * 6.39 Jan 2007
CUIT Small Cap Equity Index Fund Class B 2.82 9.74 4.81 4.81 18.87 15.26 * 6.68 Jan 2007
Russell 2000 Index 2.85 9.73 4.90 4.90 19.21 15.55 * 6.91
CUIT International Equity Fund Class A (2.44) (2.59) (5.11) (5.11) 11.33 6.17 3.35 5.91 Jan 1995
CUIT International Equity Fund Class B (2.39) (2.47) (4.72) (4.72) 11.78 6.60 3.77 1.45 mar 2000
MSCI EAFE-Gross Index (3.44) (3.53) (4.49) (4.49) 11.56 5.81 4.91 5.42
Please review the Important Disclosures page in the Appendix for further information.
CBIS Funds Performance (December 31, 2014)
investment Portfolio review AuGust 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 4
Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Money Market Fund
Objective Preserve capital, provide current income and maintain liquidity
InvestmentsHigh quality, short-term, fixed-income obligations
StrategyLiquidity and credit quality are maintained by investing only in securities rated A-1/P-1 or higher; average portfolio maturity is 90 days or less, while credit and default risk are further minimized by diversifying among issuers. The Fund attempts to maintain a stable net asset value of $1.00 per unit
BenchmarkML 91 Day Treasury Bill
Asset ManagersWellington Management Company (Since 8/1/01)
Total Expense Ratio / Minimum 0.32% / No Minimum
MATURITY DISTRIBUTION %
FUND
0-7 Days 11.4
8-29 Days 30.4
30-59 Days 16.2
60-89 Days 17.2
90-179 Days 10.5
180 and Over 14.4
PORTFOLIO ANALYSIS
STATISTICS FUND ML T-BILL
Effective Duration 0.22 (Yrs) 0.16 (Yrs)
Average Quality AA+ Treasury
Yield-to-Maturity 0.36% 0.02%
Fund Size $61.5MM
CREDIT QUALITY %
FUND ML T-BILL
A-1+ 78.8 –
A-1 16.7 –
<A-1 4.5 –
Not Rated 0.0 –
5%4%3%2%1%0%
CUIT Money Market A ML 91-Day T-Bill Index
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Money Market A 0.00 0.05 0.02 0.02 1.36
ML 91-Day T-Bill Index 0.00 0.04 0.07 0.09 1.54
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Money Market A 0.05 0.01 0.00 0.00 0.02
ML 91-Day T-Bill Index 0.04 0.7 0.11 0.10 0.13
Please see Important Information on Page 2
3 MO 1 YR 3 YR 5 YR 10 YR
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Important InformationBenchmark Index: ML 1–3 Yr. Treasury Index eff. 7/1/01; ML 1–5 Yr. G/C Index eff. 7/1/97; 50% Lehman Intermediate Govt Index/50% Lehman 1–3 Yr. Govt Index eff. 5/1/96. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Money Market Fund
¡ The Federal Reserve continued to hold money market rates near zero during Q4 and full-year 2014 — producing a sixth-straight year of near-zero cash market yields
¡ The Federal Reserve ended its bond purchase program (quantitative easing) in October 2014 and appears focused on a growing U.S. economy rather than on financial markets or weak overseas economies
¡ The Fund’s sub-adviser believes the Fed is on track to begin raising rates by mid-2015 if core inflation holds steady and labor market conditions continue to improve
Q4 2014 PERFORMANCE REVIEW
The CUIT Money Market Fund produced a 0.00% return for the third quarter of 2014, and the Merrill Lynch 91-Day Treasury Bill Index also returned 0.00%
ALLOCATIONS %
US Government & Agencies
Certificates of Deposit Supranational Munis
Repurchase Agreements
Corp. - Incl. Floating Rate
ABS - Incl. Floating Rate
Mortgage - Incl. CMOs
CommercialPaper
Fund 33.2 9.1 0.0 0.0 7.7 33.7 13.9 0.0 2.4
ML T-BILL 100 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
investment Portfolio review AuGust 2014
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Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Short Bond Fund
Objective Preserve capital while providing current income in excess of cash market yields with moderate emphasis on capital appreciation
InvestmentsU.S. government, agency, corporate, asset-backed and mortgage-backed securities with an average maturity of less than five years; up to 10% of the portfolio may be invested in securities rated below investment-grade (including U.S. dollar-denominated domestic, supranational or foreign issues)
StrategyFocuses on sector allocation and security selection, coupled with a top-down macroeconomic risk management process; aimed at minimizing downside risk while maximizing income potential
BenchmarkMerrill Lynch 1–3 Year Treasury Index
Asset ManagersLongfellow Investment Management Co. (Since 7/1/08)
Total Expense Ratio / Minimum 0.33% / No Minimum
PORTFOLIO ANALYSIS
STATISTICS FUND ML 1-3 YR
Average Maturity 2.1 (Yrs) 1.9 (Yrs)
Effective Duration 1.7 (Yrs) 1.8 (Yrs)
Average Quality A+ AAA
Yield-to-Maturity 1.8% 0.7%
Current Yield 3.3% 1.7%
10 Largest Holdings 17.8% 12.7%
# of Securities 206 96
Fund Size $315.5MM
EFFECTIVE DURATION %
FUND ML 1-3 YR
0-1 Years 32.7 5.9
1-3 Years 52.6 94.1
3-4 Years 11.0 0.0
4+ 3.7 0.0
CREDIT QUALITY %
FUND ML 1-3 YR
U.S. Treasury 13.0 100
Federal Agency 10.7 –
AAA 23.5 –
AA 11.2 –
A 15.3 –
BBB 17.2 –
Below BBB 8.2 –
Cash 1.0 –
3%
2%
1%
0%
CUIT Short Bond A ML 1-3 Year Treasury Index
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Short Bond A 0.31 1.37 1.73 2.16 3.23
ML 1-3 Year Treasury Index 0.17 0.62 0.47 1.06 2.53
CALENDAR YEAR RETURN 2013 2012 2011 2010 2009
CUIT Short Bond A 1.37 0.84 2.98 2.31 3.34
ML 1-3 Year Treasury Index 0.62 0.36 0.43 1.55 2.35
Please see Important Information on Page 2
3 MO 1 YR 3 YR 5 YR 10 YR
RISK METRICS
CHARACTERISTICS FUND / 5 YR ML 1-3 YR / 5 YR
Sharpe Ratio 2.81 1.48
Information Ratio 2.51 –
Standard Deviation 0.87 0.66
Tracking Error 0.58 –
Downside Capture 22.50 100
Upside Capture 175.21 100
investment Portfolio review AuGust 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 7
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Christian Brothers Investment Services, Inc. n [email protected] PAGE 2 | CB -FFS-009-1015
Important InformationBenchmark Index: ML 1–3 Yr. Treasury Index eff. 7/1/01; ML 1–5 Yr. G/C Index eff. 7/1/97; 50% Lehman Intermediate Govt Index/50% Lehman 1–3 Yr. Govt Index eff. 5/1/96. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Short Bond Fund
Q4 2014 PERFORMANCE REVIEW
The CUIT Short Bond Fund returned 0.31% for the third quarter of 2014, ahead of the Merrill Lynch 1-3 Year Treasury Index benchmark’s 0.17% return
ALLOCATIONS %
Treasuries Agency Industrials Finance Utilities Non-Corp. MBS CMO CMBS ABS Municipals Cash
Fund 13.0 10.7 10.6 15.0 3.4 0.0 3.7 3.4 20.3 15.9 3.1 1.0
ML 1-3 YR 100 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
¡ Lower-quality corporate spreads widened in Q4 on rising equity market volatility and sharply falling oil prices
¡ Securitized sectors continued to outperform given their generally high credit quality and improved business conditions in the commercial and real estate markets underlying the collateral
¡ Full-year excess return was driven primarily by the Fund’s allocation to the mortgage and securitized sectors and secondarily to the corporate market; these areas benefited from the global search for yield during 2014
¡ The Fed appears focused on a growing US economy rather than on financial markets or weak overseas economies
¡ The Fund is positioned for rising short-term yields in 2015
¡ The oil price collapse has generated select opportunities among high quality corporate securities as spreads have widened, particularly in the refining sector; as a result, the Fund’s allocation to corporate securities may increase in the months ahead
investment Portfolio review AuGust 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 8
Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Opportunistic Bond Fund
Objective Current income and long-term capital appreciation
InvestmentsU.S. government, agency, corporate and mortgage-backed securities; primarily investment grade with no more than 20% of the portfolio rated below BBB; up to a 10% allocation to merger/arbitrage sector
StrategyUses top down macroeconomic analysis, along with fundamental industry and company research, to capture inefficiencies in the valuation of sectors and individual securities; this is combined with duration management (+/– 2.5 years of the benchmark) in pursuit of above-benchmark returns over a full market cycle
BenchmarkBarclays Capital 1-5 Year Government/Credit
Asset ManagersLongfellow Investment Management (Since 5/1/13); Reams AssetManagement Co. (Since 5/1/13)
Total Expense Ratio/MinimumClass A: 0.57% / No MinimumClass B: 0.42% / $10M*
* Effective 10/2014, the Class B minimum is waived for consultant directed assets
PORTFOLIO ANALYSIS
STATISTICS FUND BC 1-5G/C
Average Maturity 2.4 (Yrs) 2.8 (Yrs)
Effective Duration 2.0 (Yrs) 2.6 (Yrs)
Average Quality A AA
Yield-to-Maturity 1.9% 1.2%
Current Yield 3.1% 2.2%
# of Securities 370 2,886
Fund Size $355.3MM
EFFECTIVE DURATION %
FUND BC 1-5G/C
0-1 Years 28.9 0.6
1-3 Years 48.3 64.2
3-4 Years 12.3 20.3
4-6 Years 9.6 14.9
6-8 Years 0.9 –
Over 8 Years 0.1 –
CREDIT QUALITY %
FUND BC 1-5G/C
U.S. Treasury 8.1 60.2
Federal Agency 5.3 10.2
AAA 34.2 0.2
AA 6.8 6.4
A 19.9 13.3
BBB 15.2 9.7
Below BBB 8.1 –
Cash 2.4 –
4%
3%
2%
1%
0%
CUIT Opport. Bond B Barclays 1-5 Yr Gov't/Credit
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Opport. Bond A 0.26 1.23 – – –
CUIT Opport. Bond B 0.20 1.27 – – –
Barclays 1-5 Yr Gov't/Credit 0.41 1.42 – – –
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Opport. Bond A 1.23 – – – –
CUIT Opport. Bond B 1.27 – – – –
Barclays 1-5 Yr Gov't/Credit 1.42 – – – –
Please see Important Information on Page 2
3 MO
1 YR 3 YR 5 YR 10 YR
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Christian Brothers Investment Services, Inc. n [email protected] PAGE 9
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Christian Brothers Investment Services, Inc. n [email protected] PAGE 2 | CB -FFS-008-1015
Important InformationBenchmark Index: Barclays 1–5 Year U.S. Govt/Credit Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Opportunistic Bond Fund
Q4 2014 PERFORMANCE REVIEW
The CUIT Opportunistic Bond Fund returned 0.26% (Class B, 0.20%), lagging the Barclays 1-5 Year Government/Credit Index benchmark’s 0.41% for the quarter
ALLOCATIONS %
Treasuries Agency Industrials Finance Utilities Non-Corp. MBS CMO CMBS ABS MunicipalsMerger/
Arbitrage Cash
Fund 7.8 4.3 12.2 21.6 3.7 0.0 13.9 4.7 12.8 12.4 0.7 3.8 2.4
BC 1-5G/C 60.2 15.3 12.4 10.9 1.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
All attribution is based on gross portfolio performance.
Active Weights
-52.4%
Treasuries
-11.0%
Agency
13.9%
MBS
4.7%
CMO
0.7%Municipals
3.8%
M&A
2.4%
Cash-0.2%
Industrials
10.7%
Finance
2.5%
Utilies Non-Corp.0%
12.8%
CMBS
12.4%
ABS
¡ Relative performance for Q4 and full-year 2014 was driven primarily by the portfolio’s below-benchmark duration
¡ Given the low level of real yields, the sub-advisers have maintained a conservative position with respect to interest rate risk
¡ Offsetting the impact of its shorter duration, the Fund benefitted from security selection in the mortgage and high quality corporate sectors
¡ As 2015 begins, the Fund maintains duration at a level shorter than the benchmark’s in light of low real yields and the sub-advisers’ expectation of higher short-term rates in 2015
¡ Both sub-advisers are conservatively positioned in high quality corporate names, but believe selective opportunities will appear as a result of the oil price decline and widening credit spreads
investment Portfolio review AuGust 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 10
Heading Goes HereFUND FACTS
PROFILE Q3 2014
Christian Brothers Investment Services, Inc. (800) 999-9999 n [email protected]
FUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800)-592-8890 n [email protected]
CUIT Int. Diversified Bond Fund
Objective Current income and long-term capital appreciation
InvestmentsU.S. government, agency, corporate and mortgage-backed securities. Holdings are primarily investment grade (BBB to AAA, based on the three primary rating agencies)
StrategyUses top down macroeconomic analysis, along with fundamental research, to capture inefficiencies in the valuation of sectors and individual securities; combined with duration management (+/– 20% of the benchmark) in pursuit of above-benchmark returns over a full market cycle
BenchmarkBarclays Capital Aggregate Bond Index
Asset ManagersDodge & Cox, Inc. (Since 1/1/95); Jennison Associates (Since 9/2/02); Reams Asset Management Co. (Since 7/1/08)
Total Expense Ratio/MinimumClass A: 0.53% / No MinimumClass B: 0.38% / $10M*
* Effective 10/2014, the Class B minimum is waived for consultant directed assets
PORTFOLIO ANALYSIS
STATISTICS FUND BCAGG
Average Maturity 7.5 (Yrs) 7.6 (Yrs)
Effective Duration 4.9 (Yrs) 5.5 (Yrs)
Average Quality AA AA
Yield-to-Maturity 2.0% 2.3%
Current Yield 2.8% 3.1%
# of Securities 686 9,054
Fund Size $1,016.8MM
EFFECTIVE DURATION %
FUND BCAGG
0-1 Years 9.1 0.4
1-3 Years 31.1 28.7
3-4 Years 12.3 15.8
4-6 Years 17.7 28.0
6-8 Years 6.5 11.4
Over 8 Years 23.3 15.8
CREDIT QUALITY %
FUND BCAGG
U.S. Treasury 43.0 35.8
Federal Agency 16.2 32.2
AAA 7.6 4.7
AA 1.8 3.7
A 13.4 11.8
BBB 13.6 11.9
Below BBB 1.7 –
Cash 2.6 –
15%
10%
5%
0%
CUIT Int. Divers. Bond B Barclays Aggregate Bond Index
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Int. Divers. Bond A 1.52 5.65 3.26 4.82 5.31
CUIT Int. Divers. Bond B 1.63 5.81 3.44 4.98 5.48
Barclays Aggregate Bond Index 1.79 5.97 2.66 4.45 4.71
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Int. Divers. Bond A 5.65 (1.73) 6.05 7.22 7.20
CUIT Int. Divers. Bond B 5.81 (1.51) 6.21 7.39 7.27
Barclays Aggregate Bond Index 5.97 2.02 4.22 7.84 6.54
Please see Important Information on Page 2
3 MO 1 YR 3 YR 5 YR 10 YR
RISK METRICS
CHARACTERISTICS FUND / 5 YR BCAGG / 5 YR
Sharpe Ratio 2.10 1.62
Information Ratio 1.14 –
Standard Deviation 2.51 2.69
Tracking Error 0.81 –
Downside Capture 71.08 100
Upside Capture 105.42 100
investment Portfolio review AuGust 2014
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Important InformationBenchmark Index: Barclays Capital Aggregate Bond Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Int. Diversified Bond Fund
¡ Relative performance for Q4 and full-year 2014 was driven primarily by the portfolio’s below-benchmark duration
¡ Given the low level of real yields, the sub-advisers have maintained a conservative position with respect to interest rate risk
¡ Offsetting the shorter duration, the Fund benefitted from security selection in the mortgage and high quality corporate sectors
¡ The fund also benefitted from a barbelled positioning; it has been overweight both the short and long sectors of the curve while underweight the intermediate sector and this has benefitted performance as the yield curve flattened
¡ The Fund continues to be defensively positioned with duration shorter than that of the benchmark and an overweight in the Treasury and Agency sectors
¡ The sub-advisers anticipate rising bond market volatility as the Fed begins to raise short-term rates this year
¡ CBIS expects the Fund’s defensive positioning will persist until market volatility presents opportunities to assume additional credit risk at higher prospective returns
All attribution is based on gross portfolio performance.
Active Weights
7.2%
Treasuries -0.7%
0.7%Agency
-13.2%
MBS1.8%
CMO -0.3%-0.3%
Municipals2.6%
CashIndustrials
4.3%
Finance -0.6%
Utilies
-4.8%
Non-Corp. CMBS
3.4%
ABS
ALLOCATIONS %
Treasuries Agency Industrials Finance Utilities Non-Corp. MBS CMO CMBS ABS Municipals Cash
Fund 43.0 2.6 14.6 11.8 1.2 0.1 15.6 1.8 1.8 3.9 1.0 2.6
BCAGG 35.8 3.3 13.9 7.5 1.8 4.9 28.8 0.0 2.1 0.5 1.3 0.0
Q4 2014 PERFORMANCE REVIEW
The CUIT Intermediate Diversified Bond Fund returned 1.52% (Class B, 1.63%), slightly lagging the Barclays Aggregate Bond Index’s 1.79% return for the quarter
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Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Balanced Fund
Objective Long-term capital appreciation and current income
InvestmentsThe equity allocation is comprised primarily of large-cap U.S. companies diversified across industry sectors. Fixed-income instruments include corporate, U.S. government and agency bonds, and asset-backed and mortgage-backed securities
StrategyThe equity portion blends undervalued companies with a modest exposure to growth through a core equity index allocation. The fixed-income portion leverages economic and fundamental research in an attempt to identify and capture inefficiencies across the yield curve.
Benchmark60% S&P 500 / 40% Barclays Capital Aggregate Bond
Asset ManagersFixed Income: Dodge & Cox, Inc. (Since 4/1/91); Jennison Associates(Since 9/2/02); Reams Asset Management Co. (Since 7/1/08)
Equities: Dodge & Cox, Inc. –(Since 4/1/91); RhumbLine Advisers – (Since 4/1/02)
Total Expense Ratio / Minimum 0.88% / No Minimum
PORTFOLIO ANALYSIS: EQUITY
STATISTICS FUND S&P 500
Median Market Cap $17.7B $18.9B
Weighted Avg. Mkt Cap $110.5B $132.3B
Average Price/Book 2.2X 2.7X
Average Price/Earnings 17.8X 18.5X
Average Yield 1.6% 1.9%
Beta 1.0 1.0
5 Year Earnings Growth 11.8% 12.6%
10 Largest Holdings 26.5% 7.8%
# of Equity Securities 483 502
Turnover Rate 12.7% N/A
Fund Size $244.1MM
TOP TEN HOLDINGS
STATISTICS %
Wells Fargo 3.5
Microsoft 3.4
Hewlett Packard 3.3
Time Warner 2.6
Capital One 2.6
Comcast 2.3
Walmart 2.3
Bank America 2.2
FedEx 2.1
Twenty-First Century Fox 2.1
PORTFOLIO ANALYSIS: FIXED INCOME
STATISTICS FUND BC AGG
Average Maturity 6.5 (Yrs) 7.6 (Yrs)
Effective Duration 5.0 (Yrs) 5.5 (Yrs)
Average Quality AA AAA
Yield-to-Maturity 2.1% 2.3%
# of Equity Securities 460 9,054
EFFECTIVE DURATION FUND BC AGG
0–1 Years 8.4 0.4
1–3 Years 28.9 28.7
3–4 Years 11.7 15.8
4–6 Years 20.3 28.0
6–8 Years 6.7 11.4
Over 8 Years 24.1 15.8
25%
20%
10%
0%
CUIT Balanced 60% S&P 40% BC AGG
FUND PERFORMANCE
% AVERAGE ANNUAL RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Balanced 3.07 8.80 14.78 11.28 6.74
60% S&P 40% BC AGG 3.67 10.62 13.12 11.18 6.77
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Balanced 8.80 21.29 14.59 0.71 12.03
60% S&P 40% BC AGG 10.62 17.56 11.31 4.69 12.13
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Important InformationBenchmark Index: 60% S&P 500/40% BC Aggregate eff. 1/2/03; 60% S&P 500/30% LB Aggregate/10% T Bill eff. 4/1/91; 60% LB Aggregate/40% S&P 500 in prior periods. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS. “S&P 500” is a registered trademark of McGraw-Hill Companies, Inc. The CUIT Balanced Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Fund. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Balanced Fund
¡ The Fund slightly trailed its blended benchmark in Q4 and materially trailed for the full year; this was due to the negative impact of market volatility on the value equity portfolio, particularly key energy and IT holdings
¡ The portfolio has experienced significantly above-benchmark gains in recent years and a correction is to be expected
¡ The value portfolio is slow-changing with low turnover; it is currently overweight financials (diversified across banks, capital markets and consumer finance), information technology (software and storage) and consumer discretionary (concentrated in media names) as a result of bottom-up stock selection
¡ The fixed-income segment slightly lagged its benchmark during Q4 and full-year 2014 due to a below-benchmark duration and an underweight to the long end of the curve and government-related debt in one of the three sub-advised bond portfolios
¡ The fixed-income segment remains defensively positioned with below-benchmark duration and an overweight in the Treasury and Agency sectors
¡ CBIS expects this positioning will persist until market volatility creates opportunities to assume credit risk at higher prospective returns
All attribution is based on gross portfolio performance.
Active Weights
4.9%
-4.0%
0.7%
6.4%
-5.5%
-2.6%
4.8%
-1.3% -1.2%-1.9%
0.0%Consumer
DiscretionaryInformation Technology
MaterialsCash
Consumer Staples
Energy Financials
Healthcare IndustrialsTelecomm
Service Utilities
MARKET SECTOR ANALYSIS %
Consumer Discretionary
Consumer Staples Energy Financials Healthcare Industrials
Information Technology Materials
Telecomm Service Utilities Cash
Fund 16.9 5.8 9.1 23.0 8.6 7.8 24.4 1.9 1.1 1.3 0.0
S&P 500 12.0 9.8 8.4 16.6 14.1 10.4 19.6 3.2 2.3 3.2 0.0
Q4 2014 PERFORMANCE REVIEW
The CUIT Balanced Fund returned 3.07%, lagging the blended benchmark’s 3.67% return for the quarter
1.5%
Cash
MARKET SECTOR ANALYSIS % – FIXED INCOME
Treasuries Agency Industrials Finance Utilities Non-Corp. MBS CMO CMBS ABS Municipals Cash
Fund 40.1 2.2 15.8 12.4 1.2 0.1 16.8 2.2 1.9 4.4 1.3 1.5
BC AGG 35.8 3.3 13.9 7.5 1.8 4.9 28.8 0.0 2.1 0.5 1.3 0.0
All attribution is based on gross portfolio performance.
Active Weights
4.2%
Treasuries
-12.0%
MBS2.2%
CMO -0.2%CMBS
0.0%Municipals
-1.2%
Agency1.9%
Industrials
4.9%
Finance -0.5%
Utilities
-4.8%
Non-Corp.
3.9%
ABS
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Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Core Equity Fund
Objective Long-term capital appreciation
InvestmentsCommon stocks of companies that make up the S&P 500, except those excluded as a result of CBIS’ screens (about 6% of the S&P 500's constituent companies – all unscreened companies are held at their index weight or higher)
StrategyTrack the S&P 500 and counter the impact of screens by overweighting select holdings so that the Fund's broadquantitative characteristics match those of the S&P 500 as closely as possible
BenchmarkS&P 500
Asset ManagersRhumbLine Advisers (Since 1/1/95)
Total Expense Ratio / Minimum Class A: 0.38% / No MinimumClass B: 0.18% / $3M
PORTFOLIO ANALYSIS
STATISTICS FUND S&P 500
Median Market Cap $18.1B $18.9B
Weighted Avg. Mkt Cap $127.5B $132.3B
Average Price/Book 2.7X 2.7X
Average Price/Earnings 18.6X 18.5X
Average Yield 1.8% 1.9%
Beta 1.0 1.0
5 Year Earnings Growth 13.6% 12.6%
10 Largest Holdings 18.1% 15.8%
# of Equity Securities 468 502
Turnover Rate 15.3% N/A
Fund Size $1,349.3MM
TOP TEN HOLDINGS
STATISTICS %
Apple 3.5
Exxon Mobil 2.1
Microsoft 2.1
Wells Fargo 1.8
Berkshire Hathaway Inc 1.6
Procter & Gamble 1.6
Coca-Cola 1.4
JPMorgan Chase & Co 1.4
Pepsico Inc 1.3
Google Inc. 1.2
30%
20%
10%
0%
CUIT Core Equity B S&P 500
RISK METRICSCHARACTERISTICS FUND / 5 YR S&P 500 / 5 YR
Sharpe Ratio 1.18 1.18
Information Ratio 0.04 –
Standard Deviation 13.02 13.00
Tracking Error 0.56 –
Downside Capture 100.55 100
Upside Capture 100.45 100
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Core Equity A 5.46 13.99 20.31 15.07 7.23
CUIT Core Equity B 5.49 14.19 20.55 15.30 7.41
S&P 500 4.93 13.69 20.42 15.46 7.67
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Core Equity A 13.99 32.03 15.72 0.92 14.78
CUIT Core Equity B 14.19 32.31 15.95 1.13 15.01
S&P 500 13.69 32.39 16.00 2.11 15.07
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Important InformationBenchmark Index: S&P 500. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS. “S&P 500” is a registered trademark of McGraw-Hill Companies, Inc. The CUIT Core Equity Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Fund. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Core Equity Fund
¡ CRI screens had a modest positive impact on tracking in Q4; the Fund’s healthcare sector exposure was slightly additive due to weak performance by several screened pharmaceutical companies and better returns by reweighted holdings both in the industry and elsewhere in the sector
¡ The Fund also gained ground on the Index in Q4 in the industrials sector due to underperformance by a large industrial conglomerate screened under CBIS’ Life Ethics criteria and superior returns by reweighted peers in the same industry
¡ The Fund picked up its excess return in 2014 primarily in the healthcare and industrials sectors; pharmaceuticals underweight detracted, as the industry in the benchmark returned a strong 21.68%
¡ However, several screened names markedly underperformed unrestricted peers and the relatively stronger performance by unrestricted holdings in the industry more than offset the impact of the underweight in pharmaceuticals
¡ Reweighting into the biotech industry, which gained 33.23% in the benchmark, was also a significant source of excess return in the healthcare sector
All attribution is based on gross portfolio performance.
Active Weights0.8%
0%
1.2%
-2.1%
-1.0%
0.2% 0% 0.1%0.1% 0.4% 0.3%
Consumer Discretionary
InformationTechnology
Materials CashConsumerStaples
Energy Financials
Healthcare Industrials
TelecommService
Utilities
MARKET SECTOR ANALYSIS %
Consumer Discretionary
Consumer Staples Energy Financials Healthcare Industrials
Information Technology Materials
TelecommService Utilities Cash
Fund 12.2 10.6 8.4 17.9 12.1 9.4 19.9 3.2 2.4 3.6 0.3
S&P 500 12.1 9.8 8.4 16.7 14.2 10.4 19.7 3.2 2.3 3.2 0.0
Q4 2014 PERFORMANCE REVIEW
The CUIT Core Equity Index Fund returned 5.46% (Class B, 5.49%) for the fourth quarter, well ahead of the S&P 500 Index, which returned 4.93%
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Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Value Equity Fund
Objective Long-term capital appreciation
InvestmentsPrimarily the common stocks of U.S. companies, and the dollar denominated stocks of foreign companies, with market capitalizations greater than $1 billion
StrategyCombines complementary value strategies – one seeks undervalued securities using fundamental research, emphasizing industry-leaders with a medium to long-term investment horizon; the other seeks undervalued securities using a quantitative model to analyze asset values, earnings, and other factors
BenchmarkRussell 1000 Value Index
Asset ManagersDodge & Cox (effective 2/1/00) AJO (effective 4/1/02)
Total Expense Ratio / Minimum Class A: 1.04% / No MinimumClass B: 0.69% / $10M
PORTFOLIO ANALYSIS
STATISTICS FUND R1000V
Median Market Cap $20.0B $7.3B
Weighted Avg. Mkt Cap $81.8B $112.6B
Average Price/Book 1.9X 1.8X
Average Price/Earnings 15.5X 16.2X
Average Yield 1.5% 2.2%
Beta 1.1 1.0
5 Year Earnings Growth 12.3% 8.5%
10 Largest Holdings 22.3% 10.6%
# of Equity Securities 153 704
Turnover Rate 40.4% N/A
Fund Size $428.0MM
TOP TEN HOLDINGS
STATISTICS %
Capital One 2.9
JPMorgan Chase & Co 2.7
FedEx 2.4
Hewlett Packard 2.3
Wells Fargo 2.3
Walmart 2.2
Mircrosoft 2.1
Time Warner 2.0
Goldman Sachs Group 1.7
Charles Schwab 1.7
30%
20%
10%
0%
CUIT Value Equity B Russell 1000 Value Index
RISK METRICSCHARACTERISTICS FUND / 5 YR R1000V / 5 YR
Sharpe Ratio 1.11 1.14
Information Ratio 0.34 –
Standard Deviation 14.67 13.44
Tracking Error 2.68 –
Downside Capture 104.58 100
Upside Capture 106.82 100
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Value Equity A 3.38 9.57 21.78 15.17 6.98
CUIT Value Equity B 3.49 9.57 22.20 15.57 7.36
Russell 1000 Value Index 4.98 13.45 20.89 15.42 7.30
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Value Equity A 9.57 38.32 19.15 (2.82) 15.44
CUIT Value Equity B 9.57 38.80 19.54 (2.44) 15.83
Russell 1000 Value Index 13.45 32.53 17.51 0.39 15.51
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Important InformationBenchmark Index: Russell 1000 Value Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Value Equity Fund
¡ In the final quarter of a difficult year for active management, the Fund lost relative return from out-of-favor holdings in the energy and financials sectors and to a lesser extent in IT and materials; negative volatility from the sharp decline in the price of oil, which fell more than 40% during the quarter, took a toll on the Fund’s energy positioning
¡ Lack of exposure to REITs detracted in financials in Q4 as yield-hungry investors continued to drive up REIT share prices to levels our sub-advisers see as unattractive, while insurers held in the portfolio lagged peers
¡ Similarly, in 2014 the Fund’s holdings were decidedly out-of-favor; positioning in the financials and IT industries detracted, while stock selection in energy, consumer staples and telecom services also lagged, but to a smaller degree
¡ Enduring of periods of volatility in relative return is generally a requirement for achieving long-term excess return; despite a tough 2014, the Fund continues to be above benchmark for the trailing three-year period and ranks in the top quartile of peer value managers over the trailing three- and five-year periods at year end – CBIS is confident in the sub-advisers, each of which is a veteran firm with long-term success over multiple market cycles
All attribution is based on gross portfolio performance.
Active Weights
5.6%
-2.4%
-1.3%
-2.8%-3.7%
-1.7%
8.0%
-0.8%
-0.8%
-3.3%
3.1%
Consumer Discretionary
InformationTechnology
Materials
Cash
ConsumerStaples Energy Financials Healthcare Industrials
TelecommService Utilities
MARKET SECTOR ANALYSIS %
Consumer Discretionary
Consumer Staples Energy Financials Healthcare Industrials
Information Technology Materials
TelecommService Utilities Cash
Fund 12.2 5.0 10.0 27.1 10.0 8.4 17.5 2.2 1.3 3.1 3.1
R1000V 6.6 7.4 11.3 29.9 13.7 10.1 9.5 3.0 2.1 6.4 0.0
Q4 2014 PERFORMANCE REVIEWThe CUIT Value Equity Fund returned 3.38% (Class B, 3.49%) lagging of the benchmark Russell 1000 Value Index return of 4.98%
-0.8%
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Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Growth Fund
Objective Long-term capital appreciation
InvestmentsCommon stocks of U.S. companies and the dollar-denominated stocks of foreign companies with market capitalizations above $500 million
StrategyFocus on mid- and large-cap stocks that exhibit sustainable, above- average earnings growth; blends a quantitative manager that seeks to identify key investment risks and capture alpha through dynamic modeling with a bottom-up fundamental manager to deliver a portfolio with balanced growth, valuation and quality attributes
BenchmarkRussell 1000 Growth Index
Asset ManagersWellington Management (Since 12/31/04)Los Angeles Capital Management (Since 4/1/09)
Total Expense Ratio / Minimum Class A: 1.16% / No MinimumClass B: 0.86% / $10M
PORTFOLIO ANALYSIS
STATISTICS FUND R1000G
Median Market Cap $16.3B $8.9B
Weighted Avg. Mkt Cap $135.2B $121.3B
Average Price/Book 4.3X 5.1X
Average Price/Earnings 20.8X 21.7X
Average Yield 1.5% 1.4%
Beta 1.0 1.0
5 Year Earnings Growth 18.8% 16.7%
10 Largest Holdings 27.6% 19.4%
# of Equity Securities 278 682
Turnover Rate 54.1% N/A
Fund Size $319.2MM
TOP TEN HOLDINGS
STATISTICS %
Apple 7.2
Microsoft 4.0
Oracle 3.1
Verizon Communications 2.4
Gilead Sciences 2.1
Home Depot 2.0
Google 1.8
Qualcomm 1.7
Amgen 1.7
Comcast 1.6
30%
20%
10%
0%
CUIT Growth B Russell 1000 Growth Index
RISK METRICSCHARACTERISTICS FUND / 5 YR R1000G / 5 YR
Sharpe Ratio 1.09 1.17
Information Ratio 0.0 –
Standard Deviation 14.44 13.49
Tracking Error 1.89 –
Downside Capture 108.85 100
Upside Capture 106.04 100
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Growth A 5.34 11.65 19.20 14.47 6.45
CUIT Growth B 5.43 12.06 19.58 14.83 6.78
Russell 1000 Growth Index 4.78 13.05 20.26 15.81 8.49
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Growth A 11.65 32.92 14.13 (1.92) 18.29
CUIT Growth B 12.06 33.31 14.48 (1.62) 18.66
Russell 1000 Growth Index 13.05 33.49 15.26 2.64 16.71
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Important InformationBenchmark Index: Russell 1000 Growth Index eff. June 1, 2000; prior to this date, historical returns reflect Russell Mid-Cap Growth Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Growth Fund
¡ The quarter’s outperformance resulted mostly from stock selection, which produced modest excess return across seven of the ten market sectors
¡ Slightly above-benchmark performance in IT and comparatively stronger results in materials, driven by strength among chemical holdings, were major contributors
¡ The largest individual positive at the sector level for the quarter was the Fund’s energy underweight, as energy was by far the benchmark’s weakest sector, falling 18.5%
¡ The largest detractors were stock selection in energy (where portfolio holdings marginally trailed benchmark peers) and in financials (where the Fund’s exposures to banks, capital markets and diversified financial services lagged the benchmark’s)
¡ Sources of strength included stock selection in consumer staples, particularly among food and staples retailers
¡ Despite lagging the Index, the Fund ranks in the top half of growth peers at December 31 over the trailing one-, three- and five-year periods
All attribution is based on gross portfolio performance.
Active Weights
-3.0%
-1.3%
-3.1%
1.8% 1.9%
-4.5%
9.2%
-1.7%
0.7%
-0.1%
0.3%Consumer
Discretionary
InformationTechnology
MaterialsCash
ConsumerStaples Energy
Financials Healthcare
Industrials
TelecommService
Utilities
MARKET SECTOR ANALYSIS %
Consumer Discretionary
Consumer Staples Energy Financials Healthcare Industrials
Information Technology Materials
TelecommService Utilities Cash
Fund 15.7 9.2 1.4 7.2 16.1 7.7 37.5 2.3 2.8 0.0 0.3
R1000G 18.7 10.5 4.5 5.4 14.2 12.2 28.3 4.0 2.1 0.1 0.0
Q4 2014 PERFORMANCE REVIEW
The CUIT Growth Fund returned 5.34% (Class B, 5.43%), well ahead of the Russell 1000 Growth Index’s 4.78% return for the quarter
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Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT Small Cap Fund
Objective Long-term capital appreciation by attempting to replicate the performance of the Russell 2000 Index, a commonly used index of domestic small-capitalization stocks
InvestmentsCommon stocks of companies that generally comprise the Russell 2000 Index
StrategyClosely track the benchmark Index, while seeking replacements for screened stocks among companies with similar market capitalizations in the same or a related industry
BenchmarkRussell 2000 Index
Asset ManagersRhumbLine Advisers (Since 12/31/06)
Total Expense Ratio / Minimum Class A: 0.55% / No MinimumClass B: 0.25% / $3M
Fund FeaturesCommingled Fund exclusively for tax-exempt Catholic institutions.All assets are invested in accordance with CBIS’ Socially Responsible Investing Guidelines
PORTFOLIO ANALYSIS
STATISTICS FUND R2000
Median Market Cap $0.7B $0.7B
Weighted Avg. Mkt Cap $1.9B $1.9B
Average Price/Book 2.2 2.2
Average Price/Earnings 17.0X 16.6X
Average Yield 1.3% 1.3%
Beta 1.0 1.0
5 Year Earnings Growth 13.8% 14.0%
10 Largest Holdings 2.7% 2.6%
# of Equity Securities 1,975 2,011
Turnover Rate 19.5% N/A
Fund Size $ 335.0 MM
TOP TEN HOLDINGS
STATISTICS %
Isis Pharmaceuticals 0.4
Brunswick 0.3
TriQuint Semiconductor 0.3
RF Micro Devices 0.3
Office Depot 0.3
LaSalle Hotel Properties 0.3
RLJ Lodging Trust 0.3
Graphic Packaging Holding Co 0.3
Puma Biotechnology 0.3
Core-Mark Holding Company 0.2
30%
20%
10%
0%
CUIT Small Cap B Russell 2000 Index
RISK METRICSCHARACTERISTICS FUND / 5 YR R2000 / 5 YR
Sharpe Ratio 0.86 0.86
Information Ratio -0.12 –
Standard Deviation 17.91 17.98
Tracking Error 0.16 –
Downside Capture 99.56 100
Upside Capture 99.52 100
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT Small Cap Equity Index A 9.69 4.46 18.51 14.88 –
CUIT Small Cap Equity Index B 9.74 4.81 18.87 15.26 –
Russell 2000 Index 9.73 4.90 19.21 15.55 –
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT Small Cap Equity Index A 4.46 38.05 15.42 (4.83) 26.34
CUIT Small Cap Equity Index B 4.81 38.38 15.82 (4.58) 26.91
Russell 2000 Index 4.90 38.82 16.35 (4.18) 26.86
Please see Important Information on Page 2
3 MO 1 YR 3 YR 5 YR 10 YR
investment Portfolio review AuGust 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 21
Heading Goes Here
Christian Brothers Investment Services, Inc. n [email protected] PAGE 2 | CB -FFS-010-1015
Important InformationBenchmark Index: Russell 2000 Index. Performance for periods of one year and longer are annualized. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS. The Russell 2000 Index is a trademark/servicemark, and Russell is a trademark, of the Frank Russell Company. The Small Cap Index Fund is not sponsored, endorsed, sold or promoted by the Frank Russell Company, and the Frank Russell Company makes no representation regarding the advisability of investing in the Small Cap Index Fund. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT Small Cap Fund
Q4 2014 PERFORMANCE REVIEW
The CUIT Small-Capitalization Equity Index Fund returned 9.69% (Class B, 9.74%) for the fourth quarter of 2014, keeping pace with the Russell 2000 Index benchmark’s 9.73% return
All attribution is based on gross portfolio performance.
Active Weights0.2%
-0.1% -0.1% -0.1% -0.1%0%0% 0% 0% 0%
0.3%
Consumer Discretionary
InformationTechnology
Materials Cash
ConsumerStaples
Energy FinancialsHealthcare Industrials
TelecommService
Utilities
MARKET SECTOR ANALYSIS %
Consumer Discretionary
Consumer Staples Energy Financials Healthcare Industrials
Information Technology Materials
TelecommService Utilities Cash
Fund 13.9 3.2 3.5 24.2 14.7 13.7 17.9 4.5 0.8 3.5 0.3
R2000 13.7 3.3 3.5 24.2 14.8 13.8 17.9 4.5 0.8 3.6 0.0
¡ There was very little difference between Fund and benchmark results across the ten major market sectors for the quarter
¡ The most significant impact on relative return at the portfolio level came from the Fund’s small cash balance, at about 0.4% of assets, which permits daily liquidity; this produced a minor negative impact on tracking given the Index’s strong gain
¡ For the full year, the Fund’s consumer discretionary sector exposure was slightly additive as two screened handgun makers were weak performers while a re-weighted distribution company appreciated sharply
¡ The Fund gave up slight ground in healthcare, where a few biotech names screened under Life Ethics criteria outperformed (one more than tripled) causing a performance headwind that reweighted peer holdings could not fully recover
¡ Note that screened names as a group account for only about 1% of the benchmark’s market capitalization, therefore the influences described above had — both individually and collectively — only very small impacts on tracking
investment Portfolio review AuGust 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 22
Heading Goes HereFUND FACTS
PROFILE Q4 2014
Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]
CUIT International Equity Fund
Objective Long-term capital appreciation
InvestmentsEquity securities of companies with market capitalizations greater than $1 billion, located primarily in developed-market nations; up to 15% exposure to emerging markets
Strategy Combines a fundamental, bottom-up value-style manager and a growth-style manager; emphasizes stock selection to add value over time
BenchmarkMSCI Europe, Australasia, Far East (EAFE) Index
Asset ManagersCauseway Capital (Since 2/1/05) Principal Global (Effective 5/18/07)
Total Expense Ratio / Minimum Class A: 1.50% / No minimumClass B: 1.10% / $5M
PORTFOLIO ANALYSIS
STATISTICS FUND EAFE
Median Market Cap $11.8B $8.7B
Weighted Avg. Mkt Cap $46.6B $60.7B
Average Price/Book 1.8X 1.6X
Average Price/Earnings 15.1X 16.3X
Average Yield 2.6% 3.0%
Beta 1.0 1.0
5 Year Earnings Growth 11.9% 9.0%
10 Largest Holdings 16.5% 6.4%
# of Equity Securities 263 910
Turnover Rate 52.1% N/A
Fund Size $505.6MM
TOP TEN HOLDINGS
STATISTICS %
Toyota Motor 2.4
KDDI Corporation 2.4
Reed Elsevier 2.0
Akzo Nobel 1.9
Total SA 1.5
Barclays 1.4
Nestle 1.3
UBS Group 1.3
Linde AG 1.2
Sumitomo Mitsui Financial 1.2
20%
15%
10%
5%
0%
CUIT International Equity B MSCI EAFE-Gross Index
FUND PERFORMANCE
QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR
CUIT International Equity A (2.59) (5.11) 11.33 6.17 3.35
CUIT International Equity B (2.47) (4.72) 11.78 6.60 3.77
MSCI EAFE-Gross Index (3.53) (4.49) 11.56 5.81 4.91
CALENDAR YEAR RETURN 2014 2013 2012 2011 2010
CUIT International Equity A (5.11) 22.03 19.16 (13.93) 13.60
CUIT International Equity B (4.72) 22.49 19.67 (13.58) 14.05
MSCI EAFE-Gross Index (4.49) 23.30 17.90 (11.73) 8.21
Please see Important Information on Page 2
3 MO
1 YR 3 YR 5 YR 10 YR
RISK METRICSCHARACTERISTICS FUND / 5 YR MSCI EAFE / 5 YR
Sharpe Ratio 0.46 0.34
Information Ratio 0.82 –
Standard Deviation 17.25 16.69
Tracking Error 2.72 –
Downside Capture 95.58 100
Upside Capture 105.08 100
GEOGRAPHIC DISTRIBUTIONINT'L INDEX
Europe 59.6 65.7
Pacific Basin 24.7 33.5
EM 8.2 0.0
Other 7.5 0.7
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Christian Brothers Investment Services, Inc. n [email protected] PAGE 2 | CB -FFS-006-1015
Important InformationBenchmark Index: MSCI EAFE-Gross Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS. CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.
CUIT International Equity Fund
Q4 2014 PERFORMANCE REVIEW
The CUIT International Equity Fund returned -2.59%, (Class B, -2.47%), well ahead of the MSCI EAFE benchmark’s -3.53% return
MARKET SECTOR ANALYSIS %
Consumer Discretionary
Consumer Staples Energy Financials Healthcare Industrials
Information Technology Materials
TelecommService Utilities Cash
Fund 14.0 8.7 6.8 20.6 6.6 16.2 6.7 11.2 5.1 3.0 1.1
EAFE 12.4 11.1 5.7 25.9 11.0 12.6 4.8 7.6 5.0 3.9 0.0
All attribution is based on gross portfolio performance.
Active Weights
1.6%
-2.4%
1.1%
-5.3%-4.4%
3.6%
1.9%
3.6%
-0.9%
0.1%1.1%
Consumer Discretionary
InformationTechnology
Materials Cash
ConsumerStaples
Energy
Financials Healthcare
Industrials TelecommService
Utilities
¡ Stock selection for the quarter was modestly additive across eight of the ten market sectors; the strongest relative returns came in financials, industrials and materials; energy was the quarter’s primary weak spot as a slight overweight to the sector detracted, as did the impact of negative volatility on the Fund’s oil and gas industry holdings
¡ Dollar strength was again a factor for U.S. dollar portfolios for full-year 2014; EAFE returned 6% in terms of local currencies
¡ Fund-level stock selection was additive in seven of the ten market sectors, with the strongest contributions coming in consumer discretionary, healthcare and materials
¡ A slight overweight detracted as energy was the benchmark’s weakest sector (-18% for the year); two other weak spots for the full year were stock selection in industrials, primarily due to weakness in a large construction and engineering holding, and utilities, where a slight underweight detracted and Fund holdings there marginally lagged benchmark peers
¡ Despite slightly lagging the benchmark in 2014, the Fund ranks in the top half of peers over the past year and top-third for the trailing three- and five-year periods
investment Portfolio review 4Q 2014
Christian Brothers Investment Services, Inc. n [email protected] PAGE 24
CBIS’ offers a disciplined and comprehensive approach to Catholic Responsible Investing
} CBIS pioneered Catholic responsible investing and has more than 30 years of experience applying Catholic social teaching to the investing process.
} While socially responsible investing is often equated with stock screens, a truly effective CRI program requires that we act as responsible owners of companies to bring about a more just society. Our approach to Catholic Socially Responsible Investing emphasizes direct engagement with companies to help them be better corporate citizens; while also incorporating screens.
} CBIS’ program of Catholic Responsible Investing enables Catholic institutions to align their investments with their beliefs and effect real change in corporate activities with respect to human rights, the environment, and corporate governance.
} As an institutional investment firm, we believe that by encouraging strong corporate environmental, social and governance, we are supporting the growth performance of shareholder value.
to LEArn morE About Cbis
TEL: 800-592-8890 EMAIL: [email protected]
Cbis ACCount sErviCEs
Po box 9683 Providence, ri 020940-9683
U.S. TEL: 800-321-7194 U.S. FAX: 844-261-6489
NON-U.S. TEL: 508-871-9942 NON-U.S. FAX: 508-599-4183
Cbis GLobAL romE sErviCE CEntrE
via Aurelia, 476 CP 9099 00165 romA-itALiA
TEL: (39) 06 66 01 72 18 FAX: (39) 06 663 88 21
ChiCAGo, iL 20 north Wacker drive, suite 2000 Chicago, iL 60606-3002
TEL: 877-550-2247 312-803-6440 FAX: 312-803-6441
nEW yorK, ny 777 third Avenue, 29th floor, new york ny 10017-1401
TEL: 800-592-8890 212-490-0800 FAX: 212-490-6092
sAn frAnCisCo, CA one Embarcadero Center, suite 500 san francisco, CA 94111
TEL: 800-754-8177 415-623-2080 FAX: 415-623-2070
Cbis rEGionAL offiCEs
Important Disclosures*Data not available.
+ The CUIT Money Market Fund changed its investment approach from overnight repurchase agreements, to actively managed effective 8/1/01.
**Benchmark Index: ML 1-3 Yr Treasury Index effective 7/1/01; ML 1-5 Yr G/C Index effective 4/1/98; 50% LB Intermediate Government /50% LB 1-3 Yr Government effective 5/1/96; LB 1-3 Yr Government in prior periods.
++ “S&P 500” is a registered trademark of McGraw-Hill Companies, Inc. (“McGraw-Hill”). The CUIT Core Equity Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.
*** Benchmark Index: 60% S&P 500/40% BC Aggregate effective 1/2/03; 60% S&P 500/30% LB Aggregate/10% T Bill effective 4/1/91; 60% LB Aggregate/40% S&P 500 in prior periods.
**** Benchmark Index: Russell 1000 Growth Index effective June 1, 2000; prior to this date, historical returns reflect Russell Mid-Cap Growth Index.
Active share is defined as the sum of the absolute value of the differences between the weights of the securities in a portfolio and the weights of securities in the fund’s benchmark, divided by two.
The CUIT Money Market Fund is not guaranteed by the U.S. Government and there can be no assurance that a stable net asset value of $1.00 can be maintained. Past performance is not indicative of future performance.
The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Funds’ total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by certain third parties; information regarding composition of indexes may be obtained from provider or CBIS.
The CUIT Funds are exempt from registration with the Securities and Exchange Commission and therefore are exempt from certain regulatory requirements applicable to registered mutual funds. Performance for periods of one year and longer are annualized. All Fund performance, except where otherwise noted, is reported net of any fees and expenses, but inclusive of dividends and interest. The return and principal value of the Funds will fluctuate and, upon redemption, shares in the Funds may be worth less than their original cost. CBIS offers pooled funds on behalf of a not-for-profit investment trust, Catholic United Investment Trust (CUIT). Offering Memoranda / Disclosure Statements, which contain further information regarding each of the Funds, including certain restrictions regarding redemptions, are available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Funds. Shares in the CUIT Funds are offered exclusively through CBIS Financial Services, Inc., a broker-dealer subsidiary of CBIS.