Diocesan Common Trust

The Diocesan Common Trust (DCT) was established in 1956 as a pooled investment fund. Its goal is to provide regular income while maintaining investment value versus inflation. The DCT is designed to be especially useful for those without investment expertise. Any diocesan congregation or affiliated entity may participate. Individual investment is not allowed, but individuals are encouraged to contribute to a fund that is held by a congregation or entity.

Performance

2021 Q1 performance: 2.43% net of fees
2020 performance: 10.24% net of fees
2009-2021 Q1 performance: 6.00% net of fees

Common Trust
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Oversight

The Trustees of the Episcopal Diocese of Fond du Lac oversee the investment strategy working with professional Investment Managers. They serve in a fiduciary capacity.

What THE DCT Does

Pooling assets allows for more effective and efficient investing. Benefits from economies of scale, discounted administrative fees and increased ‘purchasing power’ from access to the institutional share class level resulting in reduced expense and improved performance versus solo entity investing.

INVESTMENT STRATEGY

Assets under management are pooled for investment but accounted for on a segregated fund basis (similar to a mutual fund). Investment strategy is reviewed regularly and adjusted for an optimal mix of equities, bonds and alternative assets to meet the long-term goal of the DCT: providing income and maintaining investment value versus inflation. A long-term horizon accommodates fluctuating market conditions.

SRI/ESG Investing

In 2019, the Trustees of the Diocese incorporated a Socially Responsible Investing (“SRI”) and Environmental, Social, and Governance (“ESG”) criteria for up to 10% of assets. This decision was made recognizing the responsibilities to generate positive returns on assets and, as a church investor, use them to positively impact actions and values consistent with our Christian mission. The SRI/ESG market has grown and stabilized so the Trustees are convinced that intentionally placing funds into vehicles which meet SRI/EQG criteria is consistent with the mission of the Church and will generate returns to sustain our investment policy goal.

SRI/ESG EXPERIENCE

Our vehicle for SRI/ESG investing is the TIAA-CREF Core Impact Bond Fund. This fund is an actively managed, fixed income portfolio that directs capital to finance direct and measurable environmental and social outcomes. A recent detail of the measured outcomes of the fund may be found here.

At its April 2021 meeting, the Trustees received a report from our investment advisors that the performance of the TIAA-CREF Impact Bond Fund since our inception was comparable to returns in traditional broad-market benchmark funds. So the impact on performance of the Diocesan Common Trust is negligible with a benefit of direct and measurable positive environmental and social outcomes. The Trustees continue to be committed to this targeted approach of SRI/ESG investing as part of the total portfolio.

Quarterly Distributions

Participants may determine to take distributions on a quarterly basis. The amount of the distribution is determined on an annual basis by the participant during the 4th quarter, but limited to no more than five percent of market value. If the participant elects to have no distribution, assets remain in the account and continue to grow. The distribution is made in the first month of each quarter.

Contributions & Withdrawals

Participants may contribute to or withdraw from their account(s) at any time. Contributions must be made by submitting information found on the contribution document. Withdrawals must be requested by submitting the withdrawal form with required documentation. Processing takes 3-5 business days.

PeRformance

Over six decades, DCT performance (net of fees) has been able to exceed the rate of inflation while providing regular income to its participants. Past performance does not guarantee future results and assets in the fund are subject to risk and may lose value. Participants may request a performance report by contacting the Diocesan Office.

Administration & Fees

The Trustees and Diocesan Office receive no fees for oversight or administration. Professional investment management fees of Graystone Consulting, a unit of Morgan Stanley Wealth Management, are currently 0.47% per year.

Fixed Distribution Election

Request Distribution
Directive Form

Determining Distribution: Participants may determine an annual fixed amount of distribution from each of their DCT accounts for the upcoming year. This may be any amount from no distribution up to 5% of the market value of a DCT account at the end of the 3rd quarter of the current year. The annual fixed amount is to be communicated to the Diocesan Office by the end of December. If no communication is received, the Diocesan Office will not generate distributions.

Making Distributions: The Diocesan Office will administer distributions with the Investment Advisor. A distribution of ¼ of the annual fixed amount will be made into the designated bank accounts of participants by the 15th of the first month of each quarter (so January, April, July, October). The Diocesan Office will notify participants when distributions have been made.