Positioned for Long-Term Success
As we moved into the second year of coping with the impact of the coronavirus pandemic, the arrival of vaccines and increasing optimism about a return to normal life led to strong market returns in the US and around the globe.
The ability of The Church Pension Fund (CPF) to weather market fluctuations, historically and since early 2020, confirms that our investment portfolio is well positioned for long-term success. As of March 31, 2021, the value of CPF’s portfolio was $17.3 billion, significantly higher than the $13 billion of the previous year.
Including results over the past year, CPF has generated an annualized return of 9.5% over 10 years, exceeding our investment goal of 6.2% and the market benchmark of 7.5%. Over three and five years, the results surpassed our investment goals by an annualized 5.4% and 4.8%, respectively, and have also exceeded market benchmarks.
These strong returns during such volatile times stem from our disciplined, long-term strategy and a broadly diversified portfolio that is managed by external investment firms. These managers invest in a range of asset classes, including public and private equity, fixed income, and real estate. The portfolio is designed to ensure that it is able to generate sufficient returns to allow us to meet our future obligations.
This diversification has served us well, buffering some of the market instability and declines. Rebalancing the portfolio on an ongoing basis when the markets are fluctuating also allows CPF to be well positioned to capture value during these periods.
While we are cautious about expected returns for the next 10 years, our portfolio is very strong and we will continue to manage it prudently going forward.