What are the Foundation's qualifications for managing funds of United Methodist Churches and related organizations?
The Foundation has served Michigan congregations since its inception in 1926. Our professional fund managers hold advance credentials as well as CFP, CFA, and CRPC. Recently, Plansponsor magazine recognized our fund managers, the Howell-Sharp Group, as among the top five investment adviser teams in the United States.
What is your underlying philosophy and mission statement as an investment advisory consultant?
The Foundation offers professional investment management as part of our comprehensive stewardship ministry. We pool funds entrusted to us by congregations and United Methodist related agencies and retain professional fund managers at a fee structure that only the very largest churches could obtain individually. We believe that it is critical for United Methodist Congregations to make a witness through their investments. We recognize our stewardship responsibility to ensure that Foundation funds are invested consistent with the Social Principles of The United Methodist Church. Accordingly, we require all our fund managers to screen investments using a rigorous process that considers products, environmental impact, community relationship, and corporate citizenship.
Extensive diversification is achieved through the use of six separate equity managers, each with a dedicated style of investing. This strategy assures that all our investment "eggs" are never in a single "basket."
How is the Foundation different from other investment companies?
The Foundation is a not-for-profit United Methodist agency. As such, we do not serve stockholders, but Michigan Area United Methodist Churches. We do not need to maintain branch offices nor do we employ a sales force. We keep our costs low and pass through the savings to our client churches. We offer a wide variety of services to churches, including stewardship and planned giving programs and estate and financial planning consultation for committees and individuals. All these services are provided without charge to our constituent churches. We see ourselves as partners with churches in the task of funding ministry.
How can the Foundation assist in lowering our investment costs?
The Foundation pools church funds in the UMF Collective Investment Funds of Michigan LLC to create a critical mass to be invested. We have negotiated an all-inclusive fee structure of 1% (100 basis points) charged annually for clients with investment accounts totaling less than $1M. For clients with investment accounts in excess of $1M, but less than $3M, we offer a 0.2% (20 basis points) rebate. For clients with accounts totaling $3M or more we increase the rebate to 0.3% (30 basis points). These fees include all costs for management, custody, transactions as well as monthly statements. An additional fee of $50 is assessed per account annually.
What suggestions would you give our Investment Committee for asset allocation?
The majority of our investment accounts are endowment funds that share the stated goal of long-term growth as well as current income. Accordingly, we recommend a significant portion of fund assets to be invested in common stocks along with a portion in fixed income assets. The UMF Collective Investment Fund of Michigan LLC offers complete asset allocation discretion to each investor through which they may select a mix of from 0-100% in the Stock Fund or Bond Fund. We are frequently asked to keep the church's account "balanced," in which case we maintain the assets in the Balanced Fund, currently a blend of 60% Stock Fund and 40% Bond Fund. The Foundation has several resources that can assist a committee to form its judgment regarding asset allocation matters. Check our publications and stewardship resources for more information. In addition, we offer individual consultations as desired. Please contact us for more information.
How is access to funds handled?
Foundation accounts are demand accounts and valued daily. Requests for funds are processed weekly (account closing may take a few extra days.) We maintain liquid reserves to provide for flexible access to your funds that may not be available with all the individual assets within the pooled funds.
You may change the asset allocation of your account at any time with a written request.
What is the relationship between the Foundation, Merrill Lynch and BlackRock?
We have retained BlackRock to provide the actual security selection and to execute the necessary trades to accomplish our stated goals through the diversified stylistic investment methods; large cap growth and value, mid-cap growth and value, global equity and international investing. Both BlackRock and Merrill Lynch monitor the practices of the several funds mangers to ascertain their compliance with their disciplines. The Howell-Sharp Group of Merrill Lynch provides linkage between BlackRock, the Merrill Lynch Bank of America Trust Bank and the Foundation.
Does the Foundation offer online services?
Foundation clients may check their account activity and balances 24/7. We provide an extensive website for viewing investment performance.
How often are statements issued?
Statements are mailed monthly, in addition to the online access provided.
Is there a Money Market Account?
The Foundation offers a money market fund through Merrill Lynch that provides an institutional rate of return, often superior to similar money market funds. The Money Market Fund is not marked up. We pass through the costs incurred and recover nothing for our administration.