DIT INVESTMENT OPTION NOW AVAILABLE - DIOCESAN FOSSIL FUEL FREE FUND

     Q3-2022 DIT NEWSLETTER - Q3-2022 PARTICIPANT NEWSLETTER

     Q2-2022 DETAILED PERFORMANCE INFORMATION - Q2-2022 DIT PERFORMANCE

 
  

Home About Us Performance Trustees Professional Associations Bylaws

Investment Policy Social Responsibility Mechanics of Investing in the DIT

DIT Account  Statements Contact Information

CELEBRATING 200 YEARS OF PRUDENT INVESTING

 

DIT PERFORMANCE (As of September 30, 2022) DIT performance as of September 30, 2022, a third quarter 2022 commentary, and a 2021 Annual Report by the TOD's President appear below.

                 
 

Average Annual Returns

  3rd Qtr  

    YTD

    1-yr

   3-yr

  5-yr

 7-yr

 10-yr

  DIT Total Fund (Combined)  -5.7% -20.4% -17.4% 2.5% 3.5% 5.3%    6.0%
  DIT Total Fund (Trusts)  -5.8% -20.7% -17.6% 2.9% 3.8% 5.6%    6.4%
  42% Russell 3000/23% MSCI EAFE(net)/35% Blbg U.S. Agg  -5.6%  -21.7%  -18.1% 2.2% 3.4% 5.6%    6.1%
  65% MSCI ACWI/35% Blbg U.S. Agg  -6.1%  -21.8%  -18.4% 1.6% 3.1% 5.2%    5.2%
                 
  Average Annual Returns   3rd Qtr  

    YTD

    1-yr

   3-yr

  5-yr

 7-yr   10-yr
 

DIT Stock Fund

-7.1% -24.2% -19.9%  4.0%

  4.4%

7.2%    8.4%
 

65% Russell 3000/35% MSCI EAFE (Net)

-6.2% -25.5% -20.3%  4.3%

  5.3%

8.1%     8.7%
 

MSCI AC World Index (Net)

-6.8% -25.6% -20.7%  3.7%

4.4%

 7.4%     7.3%
                 

 

Average Annual Returns   3rd Qtr  

    YTD

    1-yr

   3-yr

  5-yr

 7-yr   10-yr
 

DIT Income Fund

 -3.7%  -14.0%   -14.0%   -1.4%  1.0%  1.4%    1.6%
  Blbg U.S. Aggregate  -4.8% -14.6%   -14.6%   -3.3% -0.3%  0.5%    0.9%
                 
  Average Annual Returns   3rd Qtr  

    YTD

    1-yr

   3-yr

  5-yr

   
 

Diocesan Fossil Fuel Free Fund

  -5.8%  -25.7%  -19.5% 5.9% 7.2%    
 

85% Russell 3000 / 15% MSCI EAFE

  -5.2%  -25.0% -18.8% 6.3% 7.2%    
           

                 

Management Fees per Annum

       
 

Income Fund

 

  0.35%

           
 

Stock Fund

 

  0.72%

         
 

Diocesan Fossil Fuel Free Fund

 

  0.47%

         
 

Performance information is provided separately on a quarterly basis by Prime, Buchholz & Associates and Wilmington Trust based on security valuations furnished by M&T Bank. The average annual returns reflect changes in unit values and assume the automatic reinvestment of dividends. The returns are before management fees.

              

2021 Annual Report

Third Quarter 2022 Commentary

Dear DIT Participant:              

      After a promising start to the quarter with the Russell 3000 Index gaining 9.4% in July, domestic equity markets resumed their decline in August and September, and the index lost 4.5% over the three months. Federal Reserve Chairman Jerome Powell's comment in August that continued rate hikes were necessary to combat persistent inflation and would bring "some pain to households and businesses" caused a sharp selloff in equity markets that lasted throughout the remainder of the quarter.

     In a reversal from the first two quarters of the year, growth stocks outperformed value stocks, with the Russell 3000 Growth Index losing 3.4% and the Russell 3000 Value Index falling 5.6%. This was due to growth stock outperformance in July when expectations were that the Fed may begin to cut interest rates in 2023. After those hopes were quashed in August, value stocks outperformed growth stocks during the final two months of the quarter. Performance improved with each step down the capitalization spectrum; the Russell 1000 Index declined 4.6%, the Russell Mid Cap Index decreased 3.4%, and the Russell 2000 Index lost 2.2%. Only two of the 11 GICS sectors finished the quarter in positive territory, consumer discretionary (+4.4%) and energy (+2.2%). Amid the rising interest rate environment, real estate (-11.0%) was one of the worst performing sectors. Communications (-12.7%) was also down double digits.

     Outside of the U.S., developed equity markets fared worse than their domestic counterparts with the MSCI EAFE Index contracting 9.4% in USD terms. The combination of supply chain concerns due to China's zero-COVID policy and the significant rate hikes by a number of central banks caused a decline in future growth expectations. Continued concerns over Russia's war with Ukraine also weighed on investors' minds. Consistent with U.S. equities, growth stocks outperformed value stocks due to strong returns early in the quarter. The MSCI EAFE Growth Index dropped 8.5%, while the MSCI EAFE Value Index fell 10.2%. Regionally, the U.K. experienced the steepest decline, with the MSCI U.K. Index down 10.8%, partly in reaction to the economic policies unveiled by the newly installed government. The MSCI Euro ex-U.K. (-9.9%) also finished the quarter behind the broad benchmark. 

      The Federal Open Market Committee (FOMC) raised rates by another 150 bps during the quarter with 75 bps hikes in July and September. However, year-over-year CPI remains high despite the tightening efforts. Expectations are that the FOMC will continue to raise rates and the Fed Funds Rate will reach 4% by year-end. The U.S. Treasury Yield Curve inverted during the quarter with the 2-year note at 4.2% and the 10-year note at 3.8% as of September 30th. In this rising rate environment, the Bloomberg U.S. Aggregate Index declined 4.8% and the Bloomberg U.S. Corporate High Yield Index slipped 0.6%.

     The DIT Total Fund (Trusts) lagged the blended index* by 20 bps with a 5.8% decline in the third quarter.

        The DIT Stock Fund ended the quarter down 7.1%, 90 bps behind the blended 65% Russell 3000/35% MSCI EAFE Index. Sub-par returns from five of the six active managers caused the underperformance. Westfield's Large Cap Growth limited losses with a strong relative return (-3.2%). The DIT Income Fund bested the Bloomberg U.S. Aggregate by 110 bps despite losing 3.7%. All managers contributed to the outperformance. The high yield managers had the strongest absolute returns with Vanguard High-Yield Corporate Fund slipping 0.9% and BrandywineGLOBAL High Yield Fund gaining 0.3%. The DIT Fossil Fuel Free Stock Fund decreased 5.8%, 60 bps below the blended 85% Russell 3000/15% MSCI EAFE Index. Aperio's lack of fossil fuel exposure detracted from relative results, as energy was one of two sectors to post gains in the quarter.

    As equity markets continue to slide due to dogged inflation, the Trustees decided to reduce exposure to high yield bonds, given their strong correlation to equity performance. In August, $4 million each was redeemed from the Vanguard High-Yield Corporate Fund and the BrandywineGLOBAL High Yield Fund. The $8 million proceeds were invested in the IR&M Intermediate Fund, which holds higher quality securities.

    The fee for combined management, consulting, custody, and accounting services for DIT Stock Fund investments is 72 basis points annually, the fee for DIT Income Fund Investments is 35 basis points annually, and the fee for DIT Fossil Fuel Free Stock Fund Investments is 47 basis points annually. There are no additional or underlying fees on your DIT Investments.

     The Trustees currently recommend a 65% Stock Fund / 35% Income Fund allocation for investments in the DIT. We respectfully remind DIT participants that they can delegate to us responsibility for maintaining the allocation of their agency funds or, if preferred, specify an allocation where their agency funds will be automatically restored on a quarterly basis. We would also encourage DIT participants who have not already done so to review their current agency fund allocations.


      
As always, we welcome invitations from EDOM parishes and affiliated organizations to discuss existing or prospective investments in the DIT. A meeting with TOD representatives can be arranged by calling the DIT's Investment Coordinator, Mr. Charles Jordan, at (617) 482-4826 ext. 557 or by emailing him at cjordan@diomass.org.
     

*    42% Russell 3000/23% MSCI EAFE/35% Blbg. U.S. Agg