The economy and fears of another recession are on everyone’s minds. However, United Church Funds Chief Investment Officer David Klassen wants CHHSM’s financial leaders to know they shouldn’t panic.
United Church Funds (UCF), established in 1909, offers nine professionally managed, well-diversified and socially responsible investment funds to more than 1,000 churches, conferences, associations and other ministries of the United Church of Christ. At present, UCF manages more than half a billion dollars in assets, from small church reserve accounts to some of the denomination’s historic endowments.
According to Klassen, U.S. economic data suggest that growth is “good enough” to avoid a recession, for now. He’ll speak to that point and provide additional perspective at UCF’s upcoming Investor Conference, Jan. 13-14, 2012, in New Orleans.
“Right now, growth is not at a level which will cause the unemployment rate to fall,” Klassen says. “However, for financial market participants, it also means that interest rates remain low. And at the same time, recent third-quarter earnings for U.S. companies have come in again at a high rate.”
According to the U.S. Bureau of Economic Analysis, real gross domestic product (GDP) in the third quarter grew by two percent, less than estimated.
Klassen points to a lack of U.S. political leadership, fear over potential elimination of tax cuts and some programs in 2013, and Europe’s debt crisis as reasons for the continued market concern.
“Problems in Greece have now spread to Italy, Spain and even France," Klassen says. "There is a tug-of-war going on between the reasonably favorable economic developments in the U.S. and the more difficult outlook in Europe.”
Klassen’s advice for CHHSM members? Hang tight. He says UCF will continue to weight its portfolio toward geographical areas and capitalizations that are likely to outperform in the next 10 years.
“This means staying nimble, buying low and selling high—and buying when others are fleeing,” Klassen says.
CHHSM Vice President Mike Readinger encourages members who are eager to learn more to attend the 2012 Investor Conference.
“This is a great opportunity to better understand our fiduciary responsibilities,” Readinger says. “I recommend this conference in particular because it is designed for both leaders with financial experience and those new to endowment or investment management.”
Other conference speakers will include Karen Finerman, chief executive officer of New York-based Metropolitan Capital Advisors; Dorothy Collins Weaver, chief investment officer of Collins Capital Investments of Coral Gables, Fla.; and Dan West, a former fundraising executive and college president.
The conference will include four keynote addresses, a panel discussion and several workshops. Among the topics will be a review of best practices for endowment-related policies and discussions of current economic conditions and market outlook.
Learn more and register for the 2012 Investor Conference here.
In order to learn how CHHSM can better serve its members’ financial needs, Readinger recently issued a survey to all members regarding their current investment activities. Please return completed surveys to Readinger at readingM@chhsm.org.