Funds do better than most but still lose value

Diocesan trust funds have held up in value much better than most, Diocesan Treasurer Jim Stewart told Diocesan Council last month. Still, they have lost money and parishes and the diocese will see somewhat reduced income next year.

 

Stewart said that as of the end of August, the diocese's Consolidated Trust Fund (CTF) had held up and was almost even with its value at the first of the year. However at the end of September, it had dropped 7.14 per cent from its value on January 1, Stewart reported.

 

"I think we have to put the CTF in perspective," said Stewart. "We have to look at its performance relative to other markets and investments," he said. During the same period, the Toronto Stock exchange had dropped 13.3 per cent; an international index had gone down 24.3 per cent.

 

In dollar terms, the CTF's value was down by about $1.8 million in September, estimated Diocesan Comptroller Mark Beley. About three-fifths of the money in the CTF is held for parishes, and two-fifths are diocesan funds. Income from investments makes up slightly over 30 per cent of the diocese's budgeted income. The percentage varies for parishes.

 

One of the difficulties is that we do not know what the rest of the year is going to hold, since the volatility has been in the extreme," said Stewart.

 

The approximately $23.5 million dollars of the CTF is invested about half in bonds, and half in stocks. In July, the Diocese-working with its investment advisor, Phillips Hager & North-set up a "Money Market Fund" with very stable investments such as government bonds. A number of parishes have transferred about $800,000 into it.

 

Since inception the Money Market Fund had held level as of September 30. However, the return from the Money Market Fund over time should be considerably less than from the CTF, when the economy recovers.