Church Commissioners’ results confirm long-term growth
The Church Commissioners have today announced a 15.2 per cent return on their investments during 2010. Their fund has now outperformed its comparator group over the past 10 and 15 years.*
Despite challenging economic times for both the Church and wider society, the Commissioners – who contributed more than £200 million in 2010 towards the cost of maintaining the mission of the Church of England – grew their fund to £5.3 billion (from £4.8 billion at December 31, 2009).
Although most of the costs of the Church’s mission are met by the generous giving of today’s parishioners, the Commissioners contribute around 17p in the pound towards the total. The Commissioners’ contribution is biased towards supporting poorer dioceses.
Today’s results show that the Commissioners are able to distribute £26 million more each year to the Church than if their investments had performed only at the industry average over the last ten years, while pursuing their policy of maintaining the real value of the fund.
Andreas Whittam Smith, First Church Estates Commissioner, said: “These results are good news for the Church and its vital role in the life of the nation. Our mission is to support the Church’s ministry, particularly in areas of need and opportunity – we meet that by ensuring our investments achieve sustainable long-term growth.”
Returns from the fund, held in a broad range of assets, pay for: clergy pensions for service up to the end of 1997; supporting poorer dioceses with the costs of ministry; funding some mission activities; paying for bishops’ ministries and some cathedral costs; and funding the legal framework for parish reorganisation.
The Commissioners manage their investments within ethical guidelines, with advice from the Church of England’s Ethical Investment Advisory Group.
Andrew Brown, Secretary to the Church Commissioners, said: “Investment performance was strong across the board in 2010 underlying the importance of our diversified portfolio. We plan to continue to diversify the fund into other attractive and appropriate asset classes to reduce further the fund’s overall volatility.
“In addition, our Assets Committee has adopted a deliberate policy of being more active in terms of the fund’s overall asset allocation, adjusting the level of risk depending on the market opportunity.”
The main factors behind the fund’s strong performance in 2010 were:
- The Commissioners’ higher weighting in shares, particularly those held in companies with overseas interests.
- The bias to higher performing smaller companies within UK shareholdings.
- The low weighting in UK government bonds, index-linked bonds and UK investment grade bonds and higher investment in property compared with the average pension fund.
- The Commissioners’ property portfolio achieved a 15.4 per cent return, exceeding its comparator group, the Investment Property Databank.
- The contribution from the Commissioners’ multi-asset fund managers.
The Commissioners’ overall 15.2 per cent return was achieved against a comparator performance of 12.7 per cent for 2010. Over the past 10 years, total returns averaged 6.3 per cent per year, against the comparator group’s 4.5 per cent. Over the past 15 years, the Commissioners outperformed the comparator group with an average annual return of 9.3 per cent against 7.0 per cent…