SEMI-ANNUAL REPORT
DECEMBER 31, 1999
[GRAPHIC OMITTED]
NEW COVENANT FUNDS
NEW COVENANT GROWTH FUND
NEW COVENANT INCOME FUND
NEW COVENANT BALANCED GROWTH FUND
NEW COVENANT BALANCED INCOME FUND
<PAGE>
TABLE OF CONTENTS
SHAREHOLDER LETTER .................................................. 1
PORTFOLIO OF INVESTMENTS ............................................ 3
STATEMENT OF ASSETS AND LIABILITIES ................................. 29
STATEMENT OF OPERATIONS ............................................. 30
STATEMENT OF CHANGES IN NET ASSETS .................................. 31
FINANCIAL HIGHLIGHTS ................................................ 32
NOTES TO FINANCIAL STATEMENTS ....................................... 33
<PAGE>
TO OUR SHAREHOLDERS
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Dear Shareholders,
We are very pleased to present you with our first semi-annual report of activity
and results for our New Covenant Funds. The New Covenant Funds have been
organized with the full participation of the Presbyterian Church (U.S.A.)
Foundation to facilitate responsible financial management of the investment and
endowment assets of the Presbyterian Church (U.S.A.) and of the charitable
organizations that are part of or associated with the Presbyterian Church
(U.S.A.). The Foundation is a charitable religious organization that supports
the mission of the Presbyterian Church (U.S.A.).
While no conversion process is perfect, we believe we have responded to comments
and suggestions that have resulted in enhanced client service via paper report,
telephone client service inquiry, automated telephone information/action lines
(800.858.6127 or 877.835.4531) and our new web site at
www.newconvenantfunds.com.
The New Covenant Family of Mutual funds completed a successful first six months
on December 31, 1999. Performance of the Growth Fund and the Income Fund were in
line with popular market indexes for the six months, which was a good showing
given the strong performance and narrow focus of particularly the domestic stock
markets. Domestic equity markets declined sharply during the third quarter of
1999 and then roared back strongly during the fourth quarter. Fixed-income
markets basically marked time during the six months with interest earned
slightly more than offsetting the price declines in bonds caused by steadily
increasing interest rates.
The Growth Fund had a total return of 6.8% for the six months ended December 31,
1999. Our U.S. domestic managers collectively trailed the market averages, but
their under-performance was offset by outstanding performance by the Fund's two
managers of international stocks, who more than doubled both the foreign stock
index against which they are compared and the domestic stock indexes. Our style
of being highly diversified across styles of value and growth, large and small
stocks, and international as well as domestic stocks has proven valuable in this
difficult market.
The last two years have been very difficult for funds invested in a broad
selection of common stocks. Technology and internet companies have received
unusual attention from investors, to the exclusion of many good companies that
have been seen by these investors as less exciting or downright boring. Despite
the increase in domestic stock-market averages during the past six months, more
than half of the stocks on United States markets actually declined. Even among
those stocks that advanced during the six months, the markets' focus on a
relatively few stocks made competitive performance by domestic managers
difficult to achieve.
During 1999, the strong performance of a few of the largest stocks far
overshadowed the poor performance of most of the issues in the S & P 500 Index.
According to an article published by Solomon Smith Barney Research January 14,
2000, "In the aggregate, 25 stocks accounted for the entire gain (21%) in the S
& P 500, with gains and losses for the remaining 475 merely offsetting one
another. The ten biggest contributors accounted for greater than 65% of the
total gain. A large capitalized portfolio selected from
1
<PAGE>
TO OUR SHAREHOLDERS
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among the S & P 500 constituents that did not contain this small handful of
companies would most likely have underperformed the benchmark by a substantial
margin." Most of our money managers considered these stocks expensive; so much
so that they were under-represented in our portfolios. Nevertheless, our
diversified portfolio of common stocks produced competitive results for the
Growth Fund's first six months of operation.
The Income Fund faced constant pressure during the six months from steadily
rising interest rates and produced a total return of only 0.7%. The Federal
Reserve twice raised interest rates during the last half of 1999, which together
with investor anticipation of additional increases caused bond prices to fall.
Also, the sharp stock-market recovery in 1999's fourth quarter caused money to
be transferred from bonds into stocks, placing further downward pressure on bond
prices.
The Balanced Growth Fund, a blend of 60% New Covenant Growth Fund and 40% New
Covenant Income Fund, had a total return of 4.3% over the six months ending
December 31, 1999. This fund is the most popular of our four funds, because it
provides appreciation, opportunity and reasonable dividend and interest income
without incurring the risk inherent in a portfolio consisting of only common
stocks. As discussed above, common stocks held by the Growth Fund helped
performance, while bonds held in the Income Fund neither helped nor hurt
performance significantly.
The Balanced Income Fund, a blend of 35% New Covenant Growth Fund and 65% New
Covenant Income Fund, also produced a positive return for the six months.
However, the greater weighting of lackluster-performing bonds in the Income Fund
meant that the total return was a modest 2.9%.
We believe the New Covenant Funds to be well positioned for the coming year as
full employment, the possibility of higher interest rates, and an economy unable
to sustain the previous positive patterns puts pressure on a broad range of
securities.
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New Covenant Growth Fund
TEN LARGEST STOCK HOLDINGS
at December 31, 1999
<TABLE>
<S> <C> <C> <C>
Security $$ % of Portfolio Sector
-------- -- - -- --------- ------
Intel Corporation $11,317,969 1.3% Technology
Lowes Companies, Inc. $11,221,648 1.3% Retail
Sony Corporation $11,180,484 1.3% Electronics
Motorola, Inc. $10,899,445 1.2% Telecommunications
Citigroup, Inc. $10,839,521 1.2% Financial Services
Molex, Inc., Class A $ 9,557,343 1.1% Electronics
Merck & Company, Inc. $ 9,074,227 1.0% Pharmceuticals
Acxiom Corporation $ 8,424,000 0.9% Commercial Services
Bell Atlantic Corporation $ 8,383,581 0.9% Telecommunications
Morgan Stanley Dean Witter and Co. $ 8,196,705 0.9% Financial Services
</TABLE>
2
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PORTFOLIO OF INVESTMENTS
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NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
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<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK -- 98.4 %
<S> <C> <C>
ADVERTISING -- 0.3%
2,600 R.H. Donnelley Corporation+ ........................................ $ 49,075
31,900 Young & Rubicam, Inc. .............................................. 2,256,925
-------------
2,306,000
-------------
AEROSPACE -- 0.4%
3,100 AAR Corporation .................................................... 55,606
257,632 British Aerospace .................................................. 1,693,743
34,600 Honeywell International, Inc. ...................................... 1,995,987
6 Raytheon Company ................................................... 149
-------------
3,745,485
-------------
AUTOMOTIVE -- 1.8%
35,000 Cycle & Carriage Ltd.+ ............................................. 108,226
18,374 DaimlerChrysler Holding Corporation+ ............................... 1,428,898
69 Delphi Automotive Systems Corporation .............................. 1,087
72,100 Ford Motor Company ................................................. 3,852,844
35,700 General Motors Corporation ......................................... 2,594,944
47,900 Harley-Davidson, Inc. .............................................. 3,068,594
7,500 Honda Motor Company ................................................ 278,947
30,322 Hyundai Motor Company Ltd.+ ........................................ 316,865
16,000 Michelin (CGDE) .................................................... 628,586
89,000 Mitsubishi Motors Corporation ...................................... 304,013
389,000 Nissan Motor Company Ltd. .......................................... 1,530,567
3,700 Peugeot S.A. ....................................................... 840,109
23,000 Suzuki Motor Corporation ........................................... 335,646
2,200 Tower Automotive, Inc.+ ............................................ 33,963
19,000 Volvo AB ........................................................... 491,245
-------------
15,814,534
-------------
BANKING -- 5.5%
26,172 ABN AMRO Holdings NV ............................................... 653,836
47,000 ABSA Group Ltd. .................................................... 210,755
1,200 Astoria Financial Corporation ...................................... 36,525
56,717 Australia & New Zealand Banking Group Ltd. ......................... 412,598
14,400 Bank Handlowy W. Warszawie ......................................... 216,000
78,000 Bank Hapoalim Ltd. ................................................. 242,940
15,500 Bank Hapoalim Ltd., GDR ............................................ 240,250
86,308 Bank of America Corporation ........................................ 4,331,583
5,200 Bank of Scotland ................................................... 60,393
25,680 Banque Nationale de Paris (BNP) .................................... 2,369,576
15,000 Bayerische HypoVereinsbank ......................................... 457,840
66,000 Chase Manhattan Corporation ........................................ 5,127,375
6,300 Comerica, Inc. ..................................................... 294,131
10,800 Credicorp Ltd. ..................................................... 129,600
550 Credit Suisse Group ................................................ 109,323
5,000 Deutsche Bank A.G. ................................................. 422,331
110,000 First Union Corporation ............................................ 3,609,375
27,000 ForeningsSparbanken AB ............................................. 396,639
134,000 Fuji Bank Ltd. ..................................................... 1,302,359
20,900 Hanvit Bank , GDR+ ................................................. 129,580
2,400 Hudson United Bancorp .............................................. 61,350
135,000 Independent Bank of Japan .......................................... 1,301,507
4,700 Independence Community Bank Corporation ............................ 58,750
217,000 Keppel TatLee Bank Ltd. ............................................ 479,472
</TABLE>
See accompanying notes to financial statements.
3
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PORTFOLIO OF INVESTMENTS
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NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
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<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
BANKING (CONTINUED)
16,800 Kookmin Bank, Sponsored GDR ........................................ $ 263,983
53,100 Lloyds TSB Group Plc ............................................... 659,590
202,300 MBNA Corporation ................................................... 5,512,675
80,200 Merita Plc ......................................................... 472,618
29,200 National Bank of Canada ............................................ 374,229
53,300 National Westminster Bank Plc ...................................... 1,145,070
76,700 Nordbanken Holding AB .............................................. 450,699
55,600 Northern Trust Corporation ......................................... 2,946,800
160,650 Overseas Chinese Bank .............................................. 1,475,800
79,800 San Paolo IMI S.p.A. ............................................... 1,084,414
3,400 Southwest Bancorporation of Texas, Inc.+ ........................... 67,362
26,300 State Bank of India, GDR ........................................... 271,658
56,300 State Street Corporation ........................................... 4,113,419
3,000 Staten Island Bancorp, Inc. ........................................ 54,000
240,000 Sumitomo Trust International Plc ................................... 1,620,828
80,900 Summit Bancorp. .................................................... 2,477,562
78,200 Svenska Handelsbanken, Series A .................................... 983,359
13,000 Unibanco-Uniao De Bancos Brasileirs ................................ 391,625
177,408 United Overseas Bank Ltd. .......................................... 1,565,835
71,593 Westpac Banking Corporation Ltd. ................................... 493,838
-------------
49,079,452
-------------
BROADCASTING AND MEDIA -- 3.3%
5,600 Ackerley Group, Inc. ............................................... 101,500
66,800 A.H. Belo Corporation .............................................. 1,273,375
83,010 AMFM, Inc.+ ........................................................ 6,495,533
118,600 Cable & Wireless HKT Ltd. .......................................... 342,519
18,400 Cablevision Systems Corporation+ ................................... 1,389,200
143,760 Charter Communications, Inc.+ ...................................... 3,144,750
81,900 Cinar Corporation+ ................................................. 2,006,550
192,400 Granada Group Plc .................................................. 1,942,398
8,500 Grupo Television S.A. .............................................. 580,125
125,505 Infinity Broadcasting Corporation, Class A+ ........................ 4,541,712
47,400 McGraw-Hill Companies, Inc. ........................................ 2,921,025
145 News Corporation (The) Ord. ........................................ 1,242
5,007 News Corporation (The) Ord. ........................................ 48,616
3,200 News Corporation Ltd., Sponsored ADR ............................... 122,400
259 Reuters Group Plc, Sponsored ADR ................................... 20,930
70,400 Reuters Group Plc .................................................. 977,967
2,000 Television Franchise 1 (T.F.1) ..................................... 1,047,644
24,900 Time Warner, Inc. .................................................. 1,803,694
-------------
28,761,180
-------------
CHEMICALS -- 1.8%
2,400 ACNielsen Corporation+ ............................................. 59,100
44,900 Air Products and Chemicals, Inc. ................................... 1,506,956
38,500 BOC Group Plc ...................................................... 830,224
3,390 Celanese AG+ ....................................................... 61,810
11,000 Degussa AG ......................................................... 462,071
46,260 Dow Chemical Company ............................................... 6,181,492
14,600 DSM NV ............................................................. 585,351
42,217 du Pont (E.I.) de Nemours & Company ................................ 2,781,045
800 H.B. Fuller Company ................................................ 44,750
148,400 Imperial Chemical Industries Plc ................................... 1,567,707
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
PORTFOLIO OF INVESTMENTS
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NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
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<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
CHEMICALS (CONTINUED)
10,200 Laporte Plc ........................................................ $ 89,300
24,000 MacDermid, Inc. .................................................... 985,500
11,900 Norsk Hydro ASA .................................................... 499,332
8,000 Takeda Chemical Industries Ltd. .................................... 395,419
-------------
16,050,057
-------------
COMMERCIAL SERVICES -- 4.4%
351,000 Acxiom Corporation+ ................................................ 8,424,000
245 Adecco S.A., Sponsored ADR ......................................... 190,793
127,700 American Management Systems, Inc.+ ................................. 4,006,588
1,600 CDI Corporation+ ................................................... 38,600
250,000 Concord EFS, Inc.+ ................................................. 6,437,500
71,200 Deluxe Corporation ................................................. 1,953,550
87,400 Dun & Bradstreet Corporation ....................................... 2,578,300
93,500 Fiserv, Inc.+ ...................................................... 3,582,219
3,100 Interim Services, Inc.+ ............................................ 76,725
75,100 Iron Mountain, Inc.+ ............................................... 2,952,369
75,000 NOVA Corporation+ .................................................. 2,367,187
110,000 Paychex, Inc. ...................................................... 4,400,000
50,000 Sterling Commerce, Inc.+ ........................................... 1,703,125
-------------
38,710,956
-------------
COMPUTER SERVICES AND SOFTWARE -- 4.4%
5,000 ASM Lithography Holding N.V. ....................................... 568,750
12,400 ASM Lithography Holding N.V.+ ...................................... 1,377,772
2,000 Bell & Howell Company+ ............................................. 63,625
50,000 BMC Software, Inc.+ ................................................ 3,996,875
164,500 Deltek Systems, Inc.+ .............................................. 2,220,750
27,800 Electronic Arts, Inc.+ ............................................. 2,335,200
39,200 Electronic Data Systems Corporation ................................ 2,623,950
25,600 EMC Corporation .................................................... 2,796,800
40,100 Hewlett-Packard Company ............................................ 4,568,894
53,860 Microsoft Corporation+ ............................................. 6,288,155
2,400 Nidec Corporation .................................................. 692,963
10,900 Oracle Corporation+ ................................................ 1,221,481
2,200 Storage Technology Corporation+ .................................... 40,562
55,320 Sun Microsystems, Inc.+ ............................................ 4,283,842
150,000 Transaction Systems Architects, Inc.+ .............................. 4,200,000
30,000 Visio Corporation+ ................................................. 1,425,000
-------------
38,704,619
-------------
CONSTRUCTION AND BUILDING MATERIALS -- 0.6%
1,426,000 Benpres Holdings Corporation+ ...................................... 215,846
1,300 Bouygues S.A. ...................................................... 826,329
15,458 Cemex, S.A.+ ....................................................... 430,892
20,159 CRH Plc ............................................................ 434,573
1,300 Gartner Group, Inc., Class A+ ...................................... 19,825
800 Granite Construction, Inc. ......................................... 14,750
315 Holderbank Financiere Glarus AG, Class B ........................... 431,263
60,400 Masco Corporation .................................................. 1,532,650
1,800 Nichiei Company Ltd. ............................................... 39,111
50,000 Sekisui House Ltd. ................................................. 442,889
34,000 Thyssen Krupp AG ................................................... 1,036,059
1,700 Toll Brothers, Inc.+ ............................................... 31,663
-------------
5,455,850
-------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
PORTFOLIO OF INVESTMENTS
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NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
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<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
CONSUMER PRODUCTS -- 2.8%
41,100 Black & Decker Corporation ......................................... $ 2,147,475
1,700 Basset Furniture Industries, Inc. .................................. 27,200
78,400 Cintas Corporation+ ................................................ 4,165,000
61,430 Clorox Company ..................................................... 3,094,536
1,400 Ethan Allen Interiors, Inc. ........................................ 44,888
2,000 Furniture Brands International, Inc.+ .............................. 44,000
83,000 Gillette Company ................................................... 3,418,563
25,000 Kingfisher Plc ..................................................... 277,428
40,700 Legget & Platt, Inc. ............................................... 872,506
160,900 Pall Corporation ................................................... 3,469,406
6,100 Pennzoil - Quaker State Company .................................... 62,144
48,300 Procter & Gamble Company ........................................... 5,291,869
20,038 Reckitt & Coleman Ltd. ............................................. 189,673
91,500 Steiner Leisure Ltd. ............................................... 1,526,906
35,000 Unilever N.V. ...................................................... 257,237
110,000 Yue Yuen Industrial Holdings ....................................... 261,787
-------------
25,150,618
-------------
CONTAINERS -- 0.1%
4,400 American National Can Group, Inc. .................................. 57,200
34,700 Sonoco Products Company ............................................ 789,425
-------------
846,625
-------------
COSMETICS -- 0.6%
170,400 Avon Products, Inc. ................................................ 5,623,200
-------------
DIVERSIFIED OPERATIONS -- 3.5%
18,972 ABB AG ............................................................. 2,297,395
10 Berkshire Hathaway, Inc., Class B+ ................................. 18,300
45,600 Corning, Inc. ...................................................... 5,879,550
64,100 Electrolux Company AB .............................................. 1,612,105
31,200 First Data Corporation ............................................. 1,538,550
200 General Electric Company ........................................... 30,950
36,000 GKN, Plc ........................................................... 589,649
45,000 Hutchison Whampoa Ltd .............................................. 654,145
410,800 Invensys Plc ....................................................... 2,171,916
11,600 Larsen & Toubro Ltd., Sponsored GDR+++ ............................. 296,360
20,095 Mannesmann AG ...................................................... 4,848,076
44,800 Minnesota Mining and Manufacturing Company ......................... 4,384,800
57,200 PPG Industries, Inc. ............................................... 3,578,575
48,500 Swire Pacific Ltd. ................................................. 286,377
10,700 Textron, Inc. ...................................................... 820,556
20,809 Vivendi ............................................................ 1,879,238
-------------
30,886,542
-------------
EDUCATION -- 0.3%
123,700 DeVry, Inc.+ ....................................................... 2,303,913
-------------
ELECTRONICS -- 7.8%
40 Advanced Micro Devices, Inc.+ ...................................... 1,158
8,400 Advantest Corporation .............................................. 2,219,830
3,000 Anixter International, Inc.+ ....................................... 61,875
105,317 Asustek Computer, Inc. ............................................. 1,437,577
60,000 Dallas Semiconductor Corporation ................................... 3,866,250
54,000 Emerson Electric Company ........................................... 3,098,250
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
PORTFOLIO OF INVESTMENTS
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NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
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<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
ELECTRONICS (CONTINUED)
3,100 Epcos AG+ .......................................................... $ 232,647
46,920 General Motors Corporation, Class H ................................ 4,504,320
5,100 Hirose Electric Company Ltd. ....................................... 1,143,594
43,000 Johnson Electric Holdings, Ltd. .................................... 276,028
50,000 Littelfuse, Inc.+ .................................................. 1,213,281
6,200 Mentor Graphics Corporation+ ....................................... 81,763
6,000 Molex, Inc. ........................................................ 340,125
211,212 Molex, Inc., Class A ............................................... 9,557,343
12,000 Murata Manufacturing Company Ltd. .................................. 2,818,831
10,100 Nintendo Company Ltd. .............................................. 1,678,555
14,836 Phillips Electronics Shares ........................................ 2,017,580
8,700 Quantum Corporation-Hard Disk Drive+ ............................... 60,356
19,800 Quinenco S.A., Sponsored ADR ....................................... 220,275
4,200 Rohm Company Ltd. .................................................. 1,726,534
17,526 Samsung Electronics ................................................ 2,125,028
3,100 Sensormatic Electronics Corporation+ ............................... 54,056
37,700 Sony Corporation ................................................... 11,180,484
9,000 Sony Corporation Music Entertainment (Japan), Inc. ................. 2,228,683
700 Sony Corporation, Sponsored ADR .................................... 199,325
41,370 STMicroelectronics N.V. ............................................ 6,264,969
5,200 STMicroelectronics+ ................................................ 800,400
21,008 Taiwan Semiconductor Manufacturing Company Ltd., Sponsored ADR+ .... 945,360
2,000 Taiyo Yuden Company, Ltd. .......................................... 118,626
21,000 TDK Corporation .................................................... 2,900,166
2,000 Tektronix, Inc. .................................................... 77,750
76,700 Thomas & Betts Corporation ......................................... 2,444,813
20,700 Tokyo Electron Ltd. ................................................ 2,836,449
14,000 Xilinx, Inc.+ ...................................................... 636,563
-------------
69,368,844
-------------
ENERGY -- 2.6%
3,000 Avista Corporation ................................................. 46,313
174,187 British Energy Plc ................................................. 1,000,953
140,980 Conoco, Inc. ....................................................... 3,506,877
1,400 Devon Energy Corporation ........................................... 46,025
130,200 El Paso Energy Corporation ......................................... 5,053,388
321,900 Ente Nazionale Idrocarburi ......................................... 1,770,492
34,100 Entergy Corporation ................................................ 878,075
24,600 Equitable Resources, Inc. .......................................... 821,025
92,200 Halliburton Company ................................................ 3,711,050
100 Niagara Mohawk Holdings, Inc. ...................................... 1,394
10,000 Suncor Energy, Inc. ................................................ 418,427
24,107 Total Fina `B' Bearer Shares ....................................... 3,217,654
80,000 Williams Companies, Inc. ........................................... 2,445,000
-------------
22,916,673
-------------
ENTERTAINMENT AND LEISURE -- 0.7%
2,800 Carmike Cinemas, Inc., Class A+ .................................... 21,875
20,800 Carnival Corporation ............................................... 994,500
300 Disney (Walt) Company .............................................. 8,775
2,500 Felcor Lodging Trust, Inc. ......................................... 43,750
3,700 Prime Hospitality Corporation+ ..................................... 32,606
90,000 Rank Group Plc ..................................................... 290,754
85,000 Royal Caribbean Cruises Ltd. ....................................... 4,191,563
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
PORTFOLIO OF INVESTMENTS
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NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
ENTERTAINMENT AND LEISURE (CONTINUED)
30,200 Speedway Motorsports, Inc.+ ........................................ $ 839,938
1,100 Vail Resorts, Inc.+ ................................................ 19,731
-------------
6,443,492
-------------
FINANCIAL SERVICES -- 6.4%
1,600 AIFUL Corporation+ ................................................. 195,752
22,400 American Express Company ........................................... 3,724,000
52 Associates First Capital Corportation .............................. 1,427
64,200 Block (H & R), Inc. ................................................ 2,808,750
195,087 Citigroup, Inc. .................................................... 10,839,521
87,800 Fannie Mae ......................................................... 5,482,012
46,400 Fleet Boston Corporation ........................................... 1,615,300
50,900 Franklin Resources, Inc. ........................................... 1,631,981
109,000 Grupo Financiero Banorte S.A. ...................................... 164,507
140,500 Halifax Group Plc .................................................. 1,534,180
80,000 Heller Financial, Inc. ............................................. 1,605,000
133,015 HSBC Holdings Plc Shares ........................................... 1,865,136
35,800 ING Groep NV, CVA Shares ........................................... 2,161,623
140,050 Mellon Financial Corporation+ ...................................... 4,770,453
57,420 Morgan Stanley Dean Witter & Company ............................... 8,196,705
76,900 Old Mutual ......................................................... 209,926
17,000 Orix Corporation ................................................... 3,830,283
19,300 Promise Company Ltd. ............................................... 982,284
14,400 Provida S.A.-Administradora de Fondos de Pensiones ................. 309,600
17,300 Republic New York Corporation ...................................... 1,245,600
1,140 Shohkoh Fund & Company ............................................. 451,336
1,300 Takefuji Corporation ............................................... 162,739
52,000 UniCredito Italiano SpA ............................................ 255,625
35,600 Washington Mutual, Inc. ............................................ 925,600
36,400 Wells Fargo Company ................................................ 1,471,925
-------------
56,441,265
-------------
FOOD AND BEVERAGES -- 3.3%
1,900 American Italian Pasta Company, Class A+ ........................... 58,425
3,600 Aurora Foods, Inc.+ ................................................ 33,525
230,706 Cadbury Schweppes Plc .............................................. 1,390,020
56,882 Coca Cola Amatil ................................................... 155,347
14,000 Coca-Cola Beverages Plc+ ........................................... 26,685
55,019 Coca-Cola Beverages Plc ............................................ 104,748
2,300 Danone ............................................................. 542,156
107,700 Flowers Industries, Inc. ........................................... 1,716,469
111,500 General Mills, Inc. ................................................ 3,986,125
73,600 Heinz (H.J.) Company ............................................... 2,930,200
47,900 Hershey Foods Corporation .......................................... 2,275,250
68,800 McCormick & Company, Inc. .......................................... 2,046,800
224 Nestle S.A., Registered Shares ..................................... 410,355
9,500 Panamerican Beverages, Inc. ........................................ 195,344
14,600 Pao de Acucar ADS .................................................. 471,763
64,700 PepsiCo, Inc. ...................................................... 2,280,675
39,000 Quaker Oats Company ................................................ 2,559,375
2,900 Ralcorp Holdings, Inc.+ ............................................ 57,819
23,800 Ralston Purina Group ............................................... 663,425
141,800 Sara Lee Corporation ............................................... 3,128,463
97,800 SYSCO Corporation .................................................. 3,869,213
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
FOOD AND BEVERAGES (CONTINUED)
20,000 Tate & Lyle Plc .................................................... $ 128,093
170,400 Tesco Plc .......................................................... 517,465
4,500 Whitman Corporation ................................................ 60,469
-------------
29,608,209
-------------
FORESTRY AND PAPER PRODUCTS -- 1.7 %
18,000 Asia Pulp & Paper Company Ltd. ..................................... 141,750
1,900 Chesapeake Corporation ............................................. 57,950
23,000 International Paper Company ........................................ 1,298,062
77,800 Kimberly-Clark Corporation ......................................... 5,076,450
8,500 Kimberly-Clark de Mexico S.A. de CV, Sponsored ADR ................. 165,875
15,000 Sumitomo Forestry .................................................. 115,983
47,600 Temple-Inland, Inc. ................................................ 3,138,625
52,800 UPM-Kymmene Oyj .................................................... 2,127,522
100 Westvaco Corporation ............................................... 3,262
46,300 Weyerhaeuser Company ............................................... 3,324,919
-------------
15,450,398
-------------
HEALTH SERVICES -- 2.2%
4,300 AmeriSource Health Corporation+ .................................... 65,306
13,800 Amgen, Inc.+ ....................................................... 828,863
35,000 Cardinal Health, Inc. .............................................. 1,675,625
100,000 IMS Health, Inc. ................................................... 2,718,750
64,000 Kao Corporation .................................................... 1,825,976
465 Novartis AG, Registered Shares ..................................... 682,767
100,000 Omnicare, Inc. ..................................................... 1,200,000
57,000 Sankyo Company Ltd. ................................................ 1,171,577
100,000 Shared Medical Systems Corporation ................................. 5,093,750
19,300 Sola International, Inc.+ .......................................... 267,787
73,900 United Healthcare Corporation ...................................... 3,925,937
-------------
19,456,338
-------------
INSURANCE -- 3.0%
14,182 Aegon N.V. ......................................................... 1,370,050
19,300 Aetna, Inc. ........................................................ 1,077,181
4,802 Allianz AG+ ........................................................ 1,613,237
67,100 Allied Zurich Plc .................................................. 791,222
130,800 Allstate Corporation ............................................... 3,139,200
32,031 American International Group, Inc. ................................. 3,463,352
18,000 Assicurazioni Generali S.p.A. ...................................... 594,739
12,400 Axa ................................................................ 1,728,773
16,000 Clarica Life Insurance Company ..................................... 288,188
600 E. W. Blanch Holding, Inc. ......................................... 36,750
3,500 Enhance Financial Services Group, Inc. ............................. 56,875
3,000 Everest Reinsurance Holdings, Inc. ................................. 66,937
1,100 Gallagher (Arthur J.) & Company .................................... 71,225
80,000 Hartford Financial Services Group, Inc. ............................ 3,790,000
40,000 Lend Lease Corporation Ord ......................................... 560,388
13,000 Liberty Life Association of Africa Ltd. ............................ 149,959
10,800 Manulife Financial Corporation+ .................................... 134,673
45,000 Mitsui Marine and Fire Insurance Company, Ltd. ..................... 266,908
72,100 Prudential Plc ..................................................... 1,406,875
900 Radian Group, Inc. ................................................. 42,975
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
INSURANCE (CONTINUED)
1,100 RenaissanceRe Holdings Ltd. ........................................ $ 44,962
244,254 Royal & Sun Alliance Insurance Group Plc ........................... 1,830,682
183,000 Sanlam Ltd.+ ....................................................... 255,695
181 Swiss Re ........................................................... 371,821
65,400 UnumProvident Corporation .......................................... 2,096,887
2,110 Zurich Allied AG ................................................... 1,203,215
------------
26,452,769
------------
MACHINERY AND EQUIPMENT -- 2.5%
116,100 Applied Power, Inc. ................................................ 4,266,675
52,100 Caterpillar, Inc. .................................................. 2,451,956
43,200 Deere & Company .................................................... 1,873,800
76,800 Dover Corporation .................................................. 3,484,800
7,000 Fanuc Ltd. ......................................................... 891,358
74,600 Grainger (W.W.), Inc. .............................................. 3,566,812
1,000 Harman International Industries, Inc. .............................. 56,125
33,800 Ingersoll-Rand Company ............................................. 1,861,112
4,400 JLG Industries, Inc. ............................................... 70,125
2,300 Regal-Beloit Corporation ........................................... 47,437
140,500 Snap-On, Inc. ...................................................... 3,732,031
------------
22,302,231
------------
MANUFACTURING -- 0.9%
38,000 Nikon Corporation .................................................. 1,115,787
10,000 Pechiney International ............................................. 714,715
9,500 Saint Gobain Shares ................................................ 1,786,686
35,600 Siemens AG NPV Registerd Shares .................................... 4,529,326
51,000 Toray Industries, Inc. ............................................. 197,671
------------
8,344,185
------------
MEDICAL PRODUCTS -- 2.8%
52,890 Agilent Technologies, Inc.+ ........................................ 4,089,058
25,431 Aventis S.A.+ ...................................................... 1,475,612
57,000 Baxter International, Inc. ......................................... 3,580,312
76,600 Becton, Dickinson and Company ...................................... 2,049,050
82,800 Boston Scientific Corporation+ ..................................... 1,811,250
3,000 Dentsply International, Inc. ....................................... 70,875
2,600 Invacare Corporation ............................................... 52,162
72,660 Johnson & Johnson .................................................. 6,766,463
50,000 Medtronic, Inc. .................................................... 1,821,875
28,100 Patterson Dental Company+ .......................................... 1,197,762
33,200 Precision Castparts Corporation .................................... 871,500
20,000 ResMed, Inc.+ ...................................................... 835,000
1,800 Varian Medical Systems, Inc. ....................................... 53,662
------------
24,674,581
------------
METALS AND MINING -- 1.2%
55,970 Alcoa, Inc. ........................................................ 4,645,510
20,000 Broken Hill Proprietary Company Ltd., Sponsored ADR ................ 531,250
213,084 Broken Hill Proprietary Company Ltd. ............................... 2,797,933
12,000 China Steel Corporation, GDR+ ...................................... 175,200
10,100 De Beers ........................................................... 292,269
19,500 Hindalco Industries Ltd., Sponsored GDR ............................ 453,375
7,400 Impala Platinum Holdings Ltd. ...................................... 299,366
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
METALS AND MINING (CONTINUED)
12,000 Inco Ltd. .......................................................... $ 282,000
8,200 Pohang Iron & Steel Company Ltd. ................................... 287,000
33,600 Steel Dynamics, Inc.+ .............................................. 535,500
18,000 Tubos de Acero de Mexico S.A., Sponsored ADR ....................... 244,125
-------------
10,543,528
-------------
MISCELLANEOUS - NON CATEGORIZED -- 0.1%
150,000 GPO FIN BANAMEX AC ................................................. 601,583
237 SGS Holding ........................................................ 302,148
4,000 Shin Etsuchem Company .............................................. 172,262
6,408 Transocean Sedco Forex, Inc. ....................................... 215,875
-------------
1,291,868
-------------
OFFICE AUTOMATION AND EQUIPMENT -- 0.6%
64,000 Canon, Inc. ........................................................ 2,543,212
2,200 Standard Register Company .......................................... 42,625
137,300 Xerox Corporation .................................................. 3,114,994
-------------
5,700,831
-------------
OIL -- 2.9%
66,600 Baker Hughes, Inc. ................................................. 1,402,762
1,900 Barrett Resources Corporation+ ..................................... 55,931
176,600 BP Amoco Plc ....................................................... 1,782,659
18,600 Chevron Corporation ................................................ 1,611,225
50,000 Core Laboratories NV+ .............................................. 1,003,125
42,500 Enterprise Oil Plc ................................................. 288,331
12,937 Exxon Mobil Corporation ............................................ 1,042,275
14,200 Gulf Indonesia Resources Ltd. ...................................... 115,375
2,300 Helmerich & Payne, Inc. ............................................ 50,169
9,000 MOL Magyar Olaj-es Gazipari Rt. .................................... 186,009
35,400 Sasol Ltd. ......................................................... 298,499
33,100 Schlumberger Ltd. .................................................. 1,861,875
102,600 Sunoco, Inc. ....................................................... 2,411,100
10,000 Talisman Energy, Inc.+ ............................................. 257,500
137,950 Texaco, Inc. ....................................................... 7,492,409
30 Tosco Corporation .................................................. 816
95,100 Unocal Corporation ................................................. 3,191,794
90,100 USX-Marathon Group ................................................. 2,224,344
-------------
25,276,198
-------------
PHARMACEUTICALS -- 4.3%
33,000 Abbott Laboratories ................................................ 1,198,312
112,700 American Home Products Corporation ................................. 4,444,606
34,070 AstraZeneca Group Plc .............................................. 1,441,438
63,635 AstraZeneca Group Plc+ ............................................. 2,643,749
2,000 AstraZeneca Group Plc, Sponsored ADR ............................... 83,500
91,870 Bristol-Myers Squibb Company ....................................... 5,896,906
47,700 Glaxo Wellcome Plc ................................................. 2,665,237
135,310 Merck & Company, Inc. .............................................. 9,074,227
88,100 Pharmacia & Upjohn, Inc. ........................................... 3,964,500
28,827 Rhone-Poulenc Ltd. ................................................. 1,675,543
165 Roche Holdings AG .................................................. 1,958,488
97,600 SmithKline Beecham Plc ............................................. 1,237,578
30,500 Teva Pharmaceutical Industries, Inc. ............................... 2,186,469
-------------
38,470,553
-------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
PHOTO EQUIPMENT AND SUPPLIES -- 0.5%
66,000 Eastman Kodak Company .............................................. $ 4,372,500
2,000 Polaroid Corporation ............................................... 37,625
-------------
4,410,125
-------------
PRINTING AND PUBLISHING -- 0.5%
1,900 Banta Corporation .................................................. 42,869
3,600 Bowne & Company, Inc. .............................................. 48,600
1,600 Houghton Mifflin Company ........................................... 67,500
30,600 New York Times Company ............................................. 1,503,225
1,600 Pulitzer, Inc. ..................................................... 64,500
168,500 Reed International Plc ............................................. 1,265,628
29,968 Singapore Press Holdings Ltd. ...................................... 649,562
38,500 Thomson Corporation ................................................ 1,013,509
-------------
4,655,393
-------------
REAL ESTATE -- 0.1%
35,000 Cheung Kong Holdings Ltd. .......................................... 443,494
40,000 Mitsui Fudosan Company Ltd. ........................................ 270,921
-------------
714,415
-------------
RESTAURANTS -- 0.5%
118,000 McDonald's Corporation ............................................. 4,756,875
-------------
RETAIL -- 6.1%
23,530 Albertson's, Inc. .................................................. 758,843
85,100 AutoZone, Inc.+ .................................................... 2,749,794
50,000 Barnes & Noble, Inc.+ .............................................. 1,031,250
110,000 Bed Bath & Beyond, Inc.+ ........................................... 3,822,500
5,000 Borders Group, Inc.+ ............................................... 80,313
5,400 Carrefour S.A.+ .................................................... 996,007
50,000 CDW Computer Centers+ .............................................. 3,931,250
32,400 Circuit City Stores, Inc.-CarMax Group+ ............................ 74,925
63,437 Coles Myer Ltd. .................................................... 327,674
4,000 CompUSA, Inc.+ ..................................................... 20,500
45,000 CVS Corporation .................................................... 1,797,188
12,400 Dayton Hudson Corporation .......................................... 910,625
79,327 Dollar General Corporation ......................................... 1,804,689
50,000 Fastenal Company ................................................... 2,246,875
27,900 Federated Department Stores, Inc.+ ................................. 1,410,694
2,200 Great Atlantic & Pacific Tea Company, Inc. ......................... 61,325
141,800 Great Universal Stores Plc ......................................... 824,578
42,150 Home Depot, Inc. ................................................... 2,889,909
13,000 JUSCO Company Ltd. ................................................. 226,613
25,000 Kohl's Corporation+ ................................................ 1,804,688
187,810 Lowe's Companies, Inc. ............................................. 11,221,648
82,200 May Department Stores Company ...................................... 2,650,950
1,400 Men's Wearhouse, Inc.+ ............................................. 41,125
25,390 Metro AG ........................................................... 1,365,791
459,200 Office Depot, Inc.+ ................................................ 5,022,500
5,400 Pier 1 Imports, Inc. ............................................... 34,425
40,000 Starbucks Corporation+ ............................................. 970,000
20,700 TJX Companies, Inc. ................................................ 423,056
2,800 United Stationers, Inc. ............................................ 79,975
5,300 Venator Group, Inc. ................................................ 37,100
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
RETAIL (CONTINUED)
51,040 Wal-Mart Stores, Inc. .............................................. $ 3,528,140
2,500 Wet Seal, Inc. Class A+ ............................................ 30,625
30,000 Williams-Sonoma, Inc.+ ............................................. 1,380,000
------------
54,555,575
------------
TECHNOLOGY -- 4.1%
62,900 3Com Corporation+ .................................................. 2,956,300
42,030 Cisco Systems, Inc.+ ............................................... 4,502,464
29,500 Compaq Computer Corporation ........................................ 798,344
137,500 Intel Corporation .................................................. 11,317,969
54,200 International Business Machines Corporation ........................ 5,853,600
20,000 Linear Technology Corporation ...................................... 1,431,250
8,000 Meitec Corporation+ ................................................ 254,478
50,000 Microchip Technology, Inc.+ ........................................ 3,421,875
47,690 Morgan Crucible Company Plc. ....................................... 222,627
10,000 Newbridge Networks Corporation+ .................................... 225,494
33,400 Texas Instruments, Inc. ............................................ 3,235,625
28,600 United Technologies Corporation .................................... 1,859,000
------------
36,079,026
------------
TELECOMMUNICATIONS -- 10.9%
55,000 ADC Telecommunications, Inc.+ ...................................... 3,990,938
13,000 Alcatel ............................................................ 2,985,784
117,250 AT & T Corporation ................................................. 5,950,437
136,180 Bell Atlantic Corporation .......................................... 8,383,581
23,500 Carso Global Telecom, Sponsored ADR ................................ 441,243
3,300 China Telecom (Hong Kong) Ltd., Sponsored ADR ...................... 424,256
3,900 CIA Anonima Nacional Telefonas de Venezuela, ADR ................... 96,038
29,530 Deutsche Telekom AG+ ............................................... 2,103,115
9,100 ECI Telecom Ltd. ................................................... 287,788
7,500 Eircom Plc ......................................................... 30,598
300 Ericsson (LM) Telefonaktiebolaget, Sponsored ADR ................... 19,706
10,500 Ericsson (LM) Telefonaktiebolaget, Class B, Sponsored ADR .......... 674,991
31,100 GTE Corporation .................................................... 2,194,494
23,500 Hellenic Telecommunications Organization S.A., Sponsored ADR ....... 280,531
4,100 Korea Telecom Corporation, Sponsored ADR ........................... 306,475
31,800 Mahanager Telephone Nigam Ltd., GDR+++ ............................. 282,066
7,200 Matav Rt.-Magyar Tavkoxlesi Rt., Sponsored ADR ..................... 259,200
98,715 MCI WorldCom, Inc.+ ................................................ 5,238,065
74,020 Motorola, Inc. ..................................................... 10,899,445
46,830 Nextel Communications, Inc.+ ....................................... 4,829,344
155 Nippon Telegraph & Telephone Corporation ........................... 2,654,889
17,200 Nokia AB OY ....................................................... 3,118,754
33,710 Nokia Oyj, Sponsored ADR ........................................... 6,404,900
58,430 Nortel Networks Corporation ........................................ 5,901,430
178 NTT Mobile Communications Network, Inc.+ ........................... 6,846,824
18,000 Nuevo Grupo Iusacell S.A de CV., Sponsored ADR+ .................... 268,875
9,700 Partner Communications Company Ltd., ADR+ .......................... 250,988
13,900 Philippine Long Distance Telephone Company, Sponsored ADR .......... 359,663
112,200 Portugal Telecom S.A. .............................................. 1,230,838
58,228 SBC Communications, Inc. ........................................... 2,838,615
24,411 SK Telecom Company Ltd. ............................................ 936,772
2,477 Swisscom AG ........................................................ 1,001,814
25,400 Tele Danmark AS, Series B .......................................... 1,887,236
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
TELECOMMUNICATIONS (CONTINUED)
40,000 Telecel-Comunicacoes Pessoais S.A. ................................. $ 697,489
11,000 Telecom Argentina, S.A. ............................................ 376,750
229,300 Telecom Italia S.p.A. .............................................. 1,496,445
9,500 Telefonica de Argentina, S.A. ...................................... 293,313
12,100 Telefonica del Peru, Sponsored ADR ................................. 161,838
225,144 Telefonica S.A. .................................................... 5,624,608
14,600 Telefonos de Mexico, S.A. .......................................... 1,642,500
15,300 Teleglobe, Inc. .................................................... 348,715
35,000 Tellabs, Inc+ ...................................................... 2,246,563
51,000 Vodafone AirTouch Plc .............................................. 254,217
------------
96,522,131
------------
TRANSPORTATION -- 1.6%
69,326 BG Group Plc ....................................................... 447,652
42,400 British Airways .................................................... 276,694
1,700 CNF Transportation, Inc. ........................................... 58,650
60,200 Deutsche Lufthansa AG .............................................. 1,400,841
38,200 FDX Corporation+ ................................................... 1,563,812
110,300 Norfolk Southern Corporation ....................................... 2,261,150
55,000 Shell Transport & Trading Company .................................. 457,090
140,000 USFreightways Corporation .......................................... 6,702,500
45,200 Wisconsin Central Transportation Corporation+ ...................... 607,375
8,100 United Parcel Service, Inc., Class B ............................... 558,900
------------
14,334,664
------------
UTILITIES -- 1.3%
58,748 AES Corporation+ ................................................... 4,391,413
14,400 Consolidated Edison, Inc. .......................................... 496,800
85,000 ENDESA S.A. ........................................................ 1,687,663
16,700 FPL Group, Inc. 714,969
42,586 Hong Kong Electric Holdings Ltd. ................................... 133,124
23,400 Korea Electric Power Corporation, Sponsored ADR .................... 391,950
51,000 Manila Electric Company ............................................ 145,533
1,400 Sierra Pacific Resources ........................................... 24,237
7,300 Suez Lyonnaise des Eaux S.A. ....................................... 1,169,966
42,300 The Southern Company ............................................... 994,050
29,100 VEBA AG ............................................................ 1,414,394
------------
11,564,099
------------
Total Common Stock
(Cost $653,959,065) .............................................. 873,773,297
------------
PREFERRED STOCK -- 0.2 %
10,500 Cemig-CIA Energetica Minas Gerais, Sponsored ADR ................... 237,105
30,000 CIA Paranaense de Energia-Copel, Sponsored ADR ..................... 279,375
10,800 Embratel Participacoes S.A., ADR ................................... 294,300
15,900 Tele Norte Leste Participacoes S.A. - Telmar, ADR 405,450
8,300 Tele Sudeste Celular Participacoes S.A., Sponsored ADR ............. 322,144
6,500 Telecomunicacoes de Sao Paulo ...................................... 158,844
------------
1,697,218
------------
Total Preferred Stock
(Cost $1,240,481) ................................................ 1,697,218
------------
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE FIXED INCOME SECURITIES -- 0.0%#
FINANCIAL SERVICES -- 0.0 %
$35,000,000 TTB Finance Cayman Ltd.
0.750% due 09/29/2049 ........................................... $ 357,982
------------
TRANSPORTATION -- 0.0 %
9,000 BG Transco Holdings
7.000% due 12/16/2024 ........................................... 14,140
9,000 BG Transco Holdings
7.000% due 12/14/2022 ........................................... 14,650
9,000 BG Transco Holdings
4.731% due 12/14/2009 ........................................... 14,658
------------
43,448
------------
Total Corporate Fixed Income Securities
(Cost $392,652) ................................................. 401,430
------------
U.S. TREASURY OBLIGATIONS -- 0.8%
U.S. TREASURY BILLS -- 0.8%
500,000 4.870% due 02/24/2000 ........................................... 496,345
4,500,000 4.840% due 03/09/2000 ........................................... 4,455,112
2,000,000 4.810% due 03/23/2000 ........................................... 1,975,705
500,000 5.345% due 05/11/2000 ........................................... 489,737
------------
7,416,899
------------
Total U.S. Treasury Obligations
(Cost $7,415,253) ............................................... 7,416,899
------------
REPURCHASE AGREEMENT -- 0.6% (Cost $4,864,000)
4,864,000 Agreement with State Street Bank, 3.00% to be repurchased at
$4,865,216 on 01/03/2000, collateralized by $1,735,000 and
$505,000 Federal Home Loan Bank 5.875% and 6.315% due 08/15/2001
and 08/24/2001, market value $1,763,194 and $514,469,
respectively; collateralized by $2,650,000 Federal National
Mortgage Association 6.230% due 08/20/2001,
market value $2,699,688. ....................................... 4,864,000
------------
TOTAL INVESTMENTS
(Cost $667,871,451*) ........................................................ 100.0% 888,152,844
OTHER ASSETS AND LIABILITIES (NET) ............................................. 0.0% 219,317
------ ------------
NET ASSETS 100.0% $888,372,161
====== ============
- ------------------
<FN>
* Aggregate cost for federal tax purposes.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At December 31, 1999, the value of
these securities amounted to $578,426 or 0.07% of net assets. # Amount less
than 0.1%
ABBREVIATIONS:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
Ord.-- Ordinary
</FN>
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE FIXED INCOME SECURITIES -- 38.8%
Adelphia Communications Corporation
$ 175,000 9.250% due 10/01/2002 ........................................... $ 176,094
100,000 8.125% due 07/15/2003 ........................................... 95,500
325,000 8.375% due 02/01/2008 ........................................... 302,250
250,000 Alestra SA
12.125% due 05/15/2006++ ........................................ 251,875
Allied Waste North America
125,000 7.375% due 01/01/2004 ........................................... 115,000
200,000 7.625% due 01/01/2006 ........................................... 181,500
1,900,000 Aluminum Company of America
6.500% due 06/15/2018 ........................................... 1,674,907
2,350,000 American Financial Group, Inc.
7.125% due 04/15/2009 ........................................... 2,104,942
2,575,000 American General Finance Corporation
6.860% due 11/22/2002 ........................................... 2,561,301
750,000 American Standard, Inc.
7.125% due 02/15/2003 ........................................... 753,750
1,000,000 Amresco, Inc
9.875% due 03/15/2005 ........................................... 640,000
2,375,000 AmvescapPlc
6.600% due 05/15/2005 ........................................... 2,133,586
500,000 APP International Finance Ltd.
0.000% due 07/07/2000*** ........................................ 455,000
Argentina Republic
34,818 2.828% due 04/01/2007 ........................................... 24,163
965,000 11.375% due 01/30/2017 .......................................... 957,762
300,000 0.000% due 10/15/2002*** ........................................ 225,150
2,810,000 AT&T Corporation,
6.500% due 03/15/2029 ........................................... 2,407,299
1,200,000 Avalonbay Communities
6.625% due 01/15/2005 ........................................... 1,134,372
3,360,000 Bank of New York Company, Inc.
6.625% due 06/15/2003 ........................................... 3,304,795
3,750,000 BankAmerica Corporation
5.875% due 02/15/2009 ........................................... 3,339,150
1,650,000 BB&T Corporation
6.375% due 06/30/2005 ........................................... 1,537,222
1,180,000 Bellsouth Telecommunications, Inc.
6.375% due 06/01/2028 ........................................... 993,737
Brazil Federal Republic
1,419,278 8.000% due 04/15/2014 ........................................... 1,066,304
825,000 5.000% due 04/15/2009 ........................................... 618,750
1,125,000 BRE Properties, Inc
7.125% due 02/15/2013 ........................................... 961,313
Bulgaria National Republic
220,000 11.000% due 07/28/2011 .......................................... 173,250
250,000 2.750% due 07/28/2012(a) ........................................ 167,025
2,245,000 Burlington Northern Santa Fe,
6.750% due 03/15/2029 ........................................... 1,941,925
1,175,000 Cabot Industrial Properties
7.125% due 05/01/2004 ........................................... 1,131,866
400,000 Cable Systems Corporation, Class A
8.125% due 08/15/2009 ........................................... 392,992
2,500,000 Caterpillar Financial Services Corporation
5.990% due 03/11/2002 ........................................... 2,454,092
625,000 Charter Communications Holdings, LLC
8.250% due 04/01/2007 ........................................... 581,250
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE FIXED INCOME SECURITIES (CONTINUED)
$1,000,000 Chattem, Inc.
8.875% due 04/01/2008 ........................................... $ 932,500
2,000,000 City National Bank
6.375% due 01/15/2008 ........................................... 1,789,420
2,350,000 Coastal Corporation
6.200% due 05/15/2004 ........................................... 2,229,939
3,175,000 Coca-Cola Enterprises, Inc.
6.750% due 01/15/2038 ........................................... 2,741,612
Colt Telecom Group Plc
525,000 12.000% due 12/15/2006 .......................................... 462,000
600,000 7.625% due 07/31/2008 ........................................... 309,000
225,000 Conmed Corporation
9.000% due 03/15/2008 ........................................... 211,500
500,000 Conseco Finance Trust III
8.796% due 04/01/2027 ........................................... 452,790
1,975,000 Conseco, Inc.
6.800% due 06/15/2005 ........................................... 1,843,840
Cox Communications, Inc.
2,150,000 7.500% due 08/15/2004 ........................................... 2,160,083
400,000 7.750% due 08/15/2006 ........................................... 403,888
CSX Corporation
2,000,000 7.250% due 05/01/2004 ........................................... 1,986,160
200,000 6.250% due 10/15/2008 ........................................... 180,978
2,350,000 CVS Corporation
5.500% due 02/15/2004 ........................................... 2,192,804
2,725,000 Daimler Chrysler North American Holdings
6.900% due 09/01/2004 ........................................... 2,696,442
1,905,000 Dana Corporation
7.000% due 03/15/2028 ........................................... 1,671,790
1,515,000 Dayton-Hudson Corporation
5.875% due 11/01/2008 ........................................... 1,369,998
1,800,000 Delphi Auto Systems Corporation
6.125% due 05/01/2004 ........................................... 1,702,728
375,000 Delta Air Lines, Inc.
7.900% due 12/15/2009 ........................................... 365,141
375,000 Diageo Capital Plc
6.625% due 06/24/2004 ........................................... 367,080
1,265,000 Duke Realty LP
7.050% due 03/01/2016 ........................................... 1,195,855
1,200,000 EdperBrascan Corporation
7.125% due 12/16/2003 ........................................... 1,150,608
850,000 Electronic Data Systems Corporation
7.450% due 10/15/2029 ........................................... 823,803
Enron Corporation
1,900,000 7.375% due 05/15/2019 ........................................... 1,775,246
375,000 6.625% due 11/15/2005 ........................................... 357,750
EOP Operating LP
3,150,000 6.500% due 06/15/2004 ........................................... 2,999,020
1,600,000 6.800% due 01/15/2009 ........................................... 1,464,816
1,415,000 6.550% due 11/15/2001 ........................................... 1,392,332
225,000 Exodus Communications, Inc.
10.750% due 12/15/2009 .......................................... 227,475
125,000 Esat Telecom Group Plc, ADR
11.875% due 11/01/2009 .......................................... 146,066
400,000 Exide Holdings SA
9.125% due 04/15/2004 ........................................... 199,840
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE FIXED INCOME SECURITIES (CONTINUED)
$1,000,000 Extendicare Health Services
9.350% due 12/15/2007 ........................................... $ 587,500
2,239,393 FDX Corporation
6.720% due 01/15/2022 ........................................... 2,023,695
3,450,000 Firstar Bank
7.125% due 12/01/2009 ........................................... 3,339,462
1,775,000 First Union Corp
7.500% due 07/15/2006 ........................................... 1,769,835
1,175,000 Florida Windstorm
7.125% due 02/25/2019 ........................................... 1,078,348
3,880,000 Ford Motor Company
8.900% due 01/15/2032 ........................................... 4,366,707
Ford Motor Credit Company
1,985,000 7.750% due 11/15/2002 ........................................... 2,018,050
3,725,000 6.700% due 07/16/2004 ........................................... 3,645,844
1,135,000 5.800% due 01/12/2009 ........................................... 1,005,905
400,000 Fort James Corporation
6.875% due 09/15/2007 ........................................... 379,736
FoxSports Networks LLC
375,000 8.875% due 08/15/2007 ........................................... 381,563
350,000 9.750% due 08/15/2007 ........................................... 280,000
150,000 Franchise Finance Corporation
8.250% due 10/30/2003 ........................................... 147,252
General Motors Acceptance Corporation
3,500,000 6.750% due 02/07/2002 ........................................... 3,481,520
3,145,000 5.850% due 01/14/2009 ........................................... 2,778,482
615,000 General Motors Corporation
8.800% due 03/01/2021 ........................................... 676,352
1,000,000 Global Crossing Holding Ltd
9.625% due 05/15/2008 ........................................... 997,500
Golden State Holdings, Inc.
700,000 7.000% due 08/01/2003 ........................................... 653,513
500,000 7.125% due 08/01/2005 ........................................... 449,380
2,300,000 Great Lakes Chemical Corporation
7.000% due 07/15/2009 ........................................... 2,194,246
500,000 Grove Worldwide LLC
9.250% due 05/01/2008 ........................................... 145,000
425,000 Grupo Televisa SA
13.250% due 05/15/2008** ........................................ 387,813
725,000 Guangdong Enterprises Holdings
8.875% due 05/22/2007 ........................................... 223,895
Host Marriott Hotels Corporation
400,000 8.375% due 02/15/2006 ........................................... 376,000
225,000 7.875% due 08/01/2008 ........................................... 200,250
250,000 Huntsman ICI Chemicals LLC
10.125% due 07/01/2009 .......................................... 257,500
2,490,000 Household Finance Corporation
5.875% due 09/25/2004 ........................................... 2,349,639
200,000 IBJ Preferred Capital Company LLC
8.700% due 12/29/2049 ........................................... 189,000
2,275,000 Ingersoll-Rand Company
6.443% due 11/15/2027 ........................................... 2,122,461
1,000,000 Integrated Health Services, Inc.
9.250% due 01/15/2008 ........................................... 82,500
2,250,000 International Business Machines Corporation
6.500% due 01/15/2028 ........................................... 1,987,830
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
CORPORATE FIXED INCOME SECURITIES (CONTINUED)
<S> <C> <C>
$ 230,000 IPC Magazines Group, Inc.
10.750% due 03/15/2008** ........................................ $ 118,886
675,000 Jack in the Box, Inc
8.375% due 04/15/2008 ........................................... 630,281
825,000 Lear Corporation
7.960% due 05/15/2005 ........................................... 794,267
400,000 Level 3 Communications, Inc.
9.125% due 05/01/2008 ........................................... 378,000
1,200,000 Liberty Mutual Insurance Company
7.697% due 10/15/2097 ........................................... 1,004,028
225,000 Lilly Industries, Inc.
7.750% due 12/01/2007 ........................................... 210,328
1,050,000 Lite-On Technology Corporation
0.000% due 12/01/2002++*** ...................................... 1,089,375
1,025,000 Marsh & McLennan Companies, Inc.
6.625% due 06/15/2004 ........................................... 993,696
May Department Stores Company, Debentures,
675,000 7.450% due 09/15/2011 ........................................... 672,752
1,400,000 6.700% due 09/15/2028 ........................................... 1,224,510
McLeodUSA, Inc.
350,000 10.500% due 03/01/2007** ........................................ 283,500
675,000 9.500% due 11/01/2008 ........................................... 676,688
875,000 Meditrust Companies
7.820% due 09/10/2026 ........................................... 656,442
1,550,000 Mellon Financial Company
5.750% due 11/15/2003 ........................................... 1,469,307
1,950,000 Merita Bank Ltd.
7.150% due 12/29/2049 ........................................... 1,884,402
1,650,000 Merck & Company, Inc
5.760% due 05/03/2037 ........................................... 1,646,700
2,000,000 Merrill Lynch & Company, Inc.
5.730% due 02/26/2002 ........................................... 1,950,380
3,975,000 Merry Land & Investment Company, Inc.
6.875% due 11/01/2004 ........................................... 3,832,099
400,000 Metromedia Fiber Network
10.000% due 12/15/2009 .......................................... 418,050
1,900,000 MMI Capital Trust I
7.625% due 12/15/2027 ........................................... 1,623,867
2,475,000 Morgan Stanley Dean Witter & Company
7.125% due 01/15/2003 ........................................... 2,473,045
600,000 Natexis Ambs Company LLC
8.440% due 12/29/2049 ........................................... 565,479
National City Corporation
2,440,000 7.200% due 05/15/2005 ........................................... 2,408,792
1,310,000 6.875% due 05/15/2019 ........................................... 1,174,875
775,000 National Westminster Bank Plc
7.750% due 04/29/2049 ........................................... 744,705
2,075,000 Nations Bank Corporation
8.125% due 06/15/2002 ........................................... 2,121,957
325,000 News America Holdings, Inc.
8.250% due 08/10/2018 ........................................... 325,140
News America, Inc
325,000 7.300% due 04/30/2028 ........................................... 289,894
1,000,000 Nextlink Communications, Inc.
9.450% due 04/15/2008** ......................................... 635,000
750,000 Niagara Mohawk Power
8.500% due 07/01/2010 ........................................... 559,095
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
CORPORATE FIXED INCOME SECURITIES (CONTINUED)
<S> <C> <C>
$ 600,000 Nordbanken AB
8.950% due 11/29/2049++ ......................................... $ 592,740
1,400,000 Norfolk Southern Corporation
6.950% due 05/01/2002 ........................................... 1,393,952
2,565,000 Northern Trust Company Bank
7.100% due 08/01/2009 ........................................... 2,488,973
2,050,000 Northfork Capital Trust III
8.000% due 12/15/2027 ........................................... 1,783,687
2,150,000 Norwest Financial, Inc
5.375% due 09/30/2003 ........................................... 2,025,687
1,000,000 NVR Inc.
8.000% due 06/01/2005 ........................................... 950,000
Owens-Illinois, Inc.
200,000 7.150% due 05/15/2005 ........................................... 184,918
200,000 7.500% due 05/15/2010 ........................................... 175,844
PACCAR Financial Corporation
2,000,000 5.560% due 04/15/2002 ........................................... 1,938,060
2,475,000 6.920% due 08/15/2003 ........................................... 2,452,378
1,120,000 Pacific Bell
6.625% due 11/01/2009 ........................................... 1,052,386
Panama Republic
179,391 7.063% due 07/17/2016(b) ........................................ 142,499
280,000 8.875% due 09/30/2027 ........................................... 237,300
650,000 PanAmSat Corporation
6.125% due 01/15/2005 ........................................... 576,004
1,000,000 Pepsi Bottling Group, Inc.
7.000% due 03/01/2029 ........................................... 904,720
445,000 Peru Republic
3.750% due 03/07/2017 ........................................... 275,366
1,100,000 Phillips Petroleum Company
7.000% due 03/30/2029 ........................................... 991,639
PNC Funding Corporation
3,050,000 6.125% due 09/01/2003 ........................................... 2,920,588
3,480,000 6.125% due 02/15/2009 ........................................... 3,119,333
425,000 Premier Parks, Inc.
9.250% due 04/01/2006 ........................................... 418,625
Prologis Trust
1,025,000 7.000% due 10/01/2003 ........................................... 998,166
1,200,000 6.700% due 04/15/2004 ........................................... 1,144,051
250,000 PSINet, Inc.
11.000% due 08/01/2009++ ........................................ 256,245
275,000 PTC International Finance II
11.250% due 12/01/2009 .......................................... 272,943
625,000 PX Escrow Corporation
9.625% due 02/01/2006 ........................................... 306,250
500,000 PXRE Capital Trust I
8.850% due 02/01/2027 ........................................... 348,370
Quebec Province
1,000,000 8.800% due 04/15/2003 ........................................... 1,051,090
1,425,000 7.500% due 09/15/2029 ........................................... 1,381,352
Qwest Communications International, Inc
200,000 7.500% due 11/01/2008 ........................................... 194,436
200,000 RAV International Ltd.
0.000% due 03/15/2000*** ........................................ 200,000
100,000 Remy Cointreau S.A
10.000% due 07/30/2005 .......................................... 105,241
120,000 Republic of Korea
8.875% due 04/15/2008 ........................................... 125,858
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
CORPORATE FIXED INCOME SECURITIES (CONTINUED)
<S> <C> <C>
Revlon Consumer Products Corporation, Inc.
$ 125,000 0.000% due 03/15/2001*** ........................................ $ 24,375
725,000 8.625% due 02/01/2008 ........................................... 355,250
2,075,000 Royal Caribbean Cruises Ltd.
7.500% due 10/15/2027 ........................................... 1,859,470
RSL Communications Plc
1,000,000 10.125% due 03/01/2008** ........................................ 620,000
375,000 12.000% due 11/01/2008 .......................................... 379,688
3,975,000 Safeway, Inc.
7.250% due 09/15/2004 ........................................... 3,936,721
900,000 Salem Communications, Inc.
9.500% due 10/01/2007 ........................................... 900,000
119,000 Salomon, Inc.
0.000% due 08/24/2000*** ........................................ 118,843
1,975,000 Sears Roebuck Acceptance Corporation
5.710% due 02/06/2001 ........................................... 1,947,567
Simon Property Group, Inc.
1,400,000 6.750% due 02/09/2004 ........................................... 1,328,446
1,000,000 7.125% due 06/24/2005 ........................................... 942,020
440,000 Smithfield Food, Inc.
7.625% due 02/15/2008 ........................................... 396,000
450,000 Societe Generale
7.850% due 04/29/2049 ........................................... 434,901
1,400,000 Stagecoach Holdings Plc
8.625% due 11/15/2009 ........................................... 1,389,276
1,100,000 St. George Bank Ltd.
7.150% due 10/15/2005++ ......................................... 1,055,010
845,000 SunTrust Banks, Inc.
6.125% due 02/15/2004 ........................................... 798,964
2,250,000 TCI Communications, Inc.
6.375% due 05/01/2003 ........................................... 2,201,783
1,200,000 Tenet Healthcare Corporation
6.000% due 12/01/2005 ........................................... 969,000
400,000 Texon International Plc
10.000% due 02/01/2008 .......................................... 180,370
1,100,000 Time Warner, Inc.
6.625% due 05/15/2029 ........................................... 937,948
725,000 Times Mirror Company
7.450% due 10/15/2009 ........................................... 720,483
500,000 Tricon Global Restaurants, Inc.
7.450% due 05/15/2005 ........................................... 475,680
TRW, Inc.
2,675,000 6.625% due 06/01/2004 ........................................... 2,576,162
375,000 7.125% due 06/01/2009 ........................................... 357,904
4,075,000 Tyco International Group
6.875% due 09/05/2002++ ......................................... 4,018,398
2,000,000 U.S. Bancorp
6.000% due 05/15/2004 ........................................... 1,912,908
1,070,000 Union Camp Corporation
6.500% due 11/15/2007 ........................................... 992,040
290,000 United Mexican States
11.375% due 09/15/2016 .......................................... 327,700
1,090,000 United Parcel Service
8.375% due 04/01/2030 ........................................... 1,164,120
200,000 Versatel Telecom BV
11.875% due 07/15/2009 .......................................... 201,911
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
CORPORATE FIXED INCOME SECURITIES (CONTINUED)
<S> <C> <C>
$ 375,000 Viacom, Inc.
7.750% due 06/01/2005 ........................................... $ 377,449
Wachovia Corporation
2,450,000 5.625% due 12/15/2008 ........................................... 2,147,474
1,510,000 6.150% due 03/15/2009 ........................................... 1,372,469
1,825,000 Washington Mutual, Inc.
7.500% due 08/15/2006 ........................................... 1,805,381
Waste Management, Inc.
1,255,000 6.500% due 12/15/2002 ........................................... 1,162,281
750,000 6.875% due 05/15/2009 ........................................... 635,099
3,400,000 Wells Fargo Company
6.625% due 07/15/2004 ........................................... 3,319,998
325,000 William Hill Finance
10.625% due 04/30/2008 .......................................... 556,471
Williams Communications Group, Inc.
325,000 10.700% due 10/01/2007 .......................................... 341,250
200,000 10.875% due 10/01/2009 .......................................... 209,250
1,165,000 Williams Companies, Inc
7.625% due 07/15/2019 ........................................... 1,119,495
125,000 Winstar Communications, Inc.
0.000% due10/15/2005*** ......................................... 121,250
WMX Technologies, Inc.
300,000 6.375% due 12/01/2003 ........................................... 270,267
705,000 7.100% due 08/01/2026 ........................................... 653,288
-------------
Total Corporate Fixed Income Securities
(Cost $237,949,207) ............................................ 224,716,005
-------------
MORTGAGE BACKED SECURITIES -- 26.9%
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) -- 4.1%
555 8.000% due 05/01/2006 ........................................... 562
2,708,070 0.990% due 11/01/2006 ........................................... 2,692,905
3,250,000 6.250% due 05/15/2007 ........................................... 3,221,563
11,700,000 5.750% due 03/15/2009 ........................................... 10,687,248
1,700,000 6.250% due 04/15/2012 ........................................... 1,605,370
3,545,000 6.000% due 09/15/2027 ........................................... 3,190,376
2,387,829 6.500% due 01/01/2029 ........................................... 2,251,269
-------------
23,649,293
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) -- 10.0%
2,257,842 7.245% due 09/01/2003 ........................................... 2,255,366
3,301,665 7.280% due 10/01/2003 ........................................... 3,303,956
3,931,568 6.880% due 02/01/2004 ........................................... 3,884,981
2,501,941 7.085% due 05/01/2004 ........................................... 2,487,917
3,175,000 5.625% due 05/14/2004 ........................................... 3,034,094
2,286 8.000% due 08/01/2004 ........................................... 2,300
650,000 6.500% due 08/15/2004 ........................................... 641,875
2,000,000 6.500% due 11/25/2007 ........................................... 1,972,500
3,680,000 6.500% due 01/25/2008 ........................................... 3,628,222
4,386,525 6.140% due 04/01/2009 ........................................... 4,055,104
3,186,482 7.500% due 08/01/2011 ........................................... 3,206,397
2,440,000 7.000% due 07/18/2012 ........................................... 2,341,619
2,382,673 7.000% due 10/01/2014 ........................................... 2,355,105
2,374,912 7.000% due 11/01/2014 ........................................... 2,347,435
2,385,000 6.424% due 12/25/2023 ........................................... 2,267,479
1,710,508 9.000% due 08/01/2025 ........................................... 1,779,988
</TABLE>
See accompanying notes to financial statements.
22
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
MORTGAGE BACKED SECURITIES (CONTINUED)
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) (CONTINUED)
$2,381,039 6.500% due 04/01/2029 ........................................... $ 2,248,606
4,314,043 6.500% due 07/01/2029 ........................................... 4,068,660
1,750,000 7.500% due 12/01/2029 ........................................... 1,730,313
1,590,000 8.000% due 12/01/2029 ........................................... 1,572,113
8,750,000 7.500% due 12/01/2099 ........................................... 8,651,563
-------------
57,835,593
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) -- 12.8%
2,117,510 7.500% due 03/15/2014 ........................................... 2,134,048
2,769,610 9.000% due 12/15/2017 ........................................... 2,921,911
1,544,058 6.375% due 04/20/2024 ........................................... 1,562,402
554,953 8.000% due 06/15/2025 ........................................... 560,502
442,392 8.000% due 07/15/2025 ........................................... 446,816
245,451 8.000% due 10/15/2025 ........................................... 247,905
88,403 8.000% due 11/15/2025 ........................................... 89,397
151,471 7.000% due 12/15/2025 ........................................... 146,832
491,400 8.000% due 03/15/2026 ........................................... 496,314
969,643 7.500% due 04/15/2027 ........................................... 958,734
1,098,472 7.000% due 01/15/2028 ........................................... 1,060,707
2,505,104 7.000% due 02/15/2028 ........................................... 2,418,979
1,397,651 7.000% due 03/15/2028 ........................................... 1,349,600
1,128,812 7.000% due 04/15/2028 ........................................... 1,090,003
897,657 7.000% due 05/15/2028 ........................................... 866,795
73,076 7.000% due 06/15/2028 ........................................... 70,564
8,782,236 7.000% due 07/15/2028 ........................................... 8,480,302
1,010,840 7.000% due 08/15/2028 ........................................... 976,087
2,473,215 7.000% due 09/15/2028 ........................................... 2,388,186
2,723,027 7.000% due 01/15/2029 ........................................... 2,631,697
1,833,686 7.000% due 02/15/2029 ........................................... 1,770,644
3,998,840 7.000% due 07/15/2029 ........................................... 3,861,359
7,366,244 8.000% due 07/15/2029 ........................................... 7,439,907
2,234,312 7.500% due 08/15/2029 ........................................... 2,209,176
415,358 7.500% due 09/15/2029 ........................................... 410,685
4,730,072 7.500% due 10/15/2029 ........................................... 4,676,857
2,343,701 8.000% due 10/15/2029 ........................................... 2,367,138
10,422 8.000% due 10/20/2029 ........................................... 10,249
318,580 8.000% due 11/15/2029 ........................................... 321,766
65,000 7.500% due 12/15/2029 ........................................... 64,269
2,375,000 7.500% due 12/15/2029 ........................................... 2,348,281
6,681,652 8.000% due 12/15/2029 ........................................... 6,748,469
10,725,000 8.000% due 12/15/2099 ........................................... 10,879,513
-------------
74,006,094
-------------
Total Mortgage-Backed Securities
(Cost $159,548,617) ............................................. 155,490,980
-------------
U.S. TREASURY OBLIGATIONS -- 15.7%
U.S. TREASURY BONDS -- 8.3%
29,510,000 8.875% due 08/15/2017 ........................................... 35,665,491
10,825,000 8.125% due 05/15/2021 ........................................... 12,408,156
-------------
48,073,647
-------------
U.S. TREASURY STRIPPED BONDS -- 0.0%#
1,000,000 9.586% due 02/15/2019 ........................................... 274,920
-------------
274,920
-------------
</TABLE>
See accompanying notes to financial statements.
23
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES -- 5.3%
$3,550,000 4.625% due 11/30/2000(c) ........................................ $ 3,503,389
375,000 5.250% due 05/31/2001(d) ........................................ 370,196
10,740,000 5.750% due 08/15/2003 ........................................... 10,520,152
1,350,000 7.875% due 11/15/2004 ........................................... 1,427,409
13,350,000 7.000% due 07/15/2006 ........................................... 13,673,337
1,300,000 6.000% due 08/15/2009 ........................................... 1,259,375
-------------
30,753,858
-------------
U.S. TREASURY INFLATION INDEX NOTES -- 2.1%
2,367,024 3.625% due 07/15/2002 ........................................... 2,343,354
5,458,531 3.375% due 01/15/2007 ........................................... 5,142,973
4,800,000 3.875% due 01/15/2009 ........................................... 4,638,000
-------------
12,124,327
-------------
Total U.S. Treasury Obligations
(Cost $93,544,352) .............................................. 91,226,752
-------------
ASSET-BACKED SECURITIES -- 10.3 %
2,100,000 Advanta Mortgage Loan Trust
7.040% due 01/25/2029 ........................................... 2,070,820
2,375,000 ARG Funding Corporation
6.020% due 05/20/2005 ........................................... 2,248,638
2,237,917 Bear Stearns Mortgage Securities, Inc.
6.750% due 04/30/2030 ........................................... 2,102,535
2,000,000 Chase Commercial Mortgage Securities Corporation
6.600% due 12/19/2007 ........................................... 1,795,000
2,400,000 Chase CreditCard Master Trust
6.950% due 01/15/2007 ........................................... 2,355,000
2,500,000 Citibank Credit Card Master Trust I
6.650% due 11/15/2006 ........................................... 2,448,425
CIT Reversible Trust
374,078 6.500% due 04/15/2011 ........................................... 374,057
519,716 5.400% due 12/15/2011 ........................................... 514,724
500,000 FMAC Loan Receivables Trust
8.140% due 04/15/2019 ........................................... 435,000
3,200,000 GMAC Commercial Mortgage Securities, Inc.
6.175% due 05/15/2033 ........................................... 2,913,232
Green Tree Financial Corporation
2,100,000 7.140% due 02/01/2021 ........................................... 1,858,500
3,300,000 7.750% due 10/15/2029 ........................................... 2,480,148
2,050,000 Golden State Mortgage Securities Corporation II
6.620% due 10/18/2030 ........................................... 1,942,621
2,120,000 IMC Home Equity Loan Trust
6.650% due 02/20/2029 ........................................... 2,004,714
2,042,625 LB Commercial Conduit Mortgage Trust
6.410% due 08/15/2007 ........................................... 1,969,305
1,500,000 MBNA Master Credit Card Trust
6.600% due 12/15/2006 ........................................... 1,460,625
Merrill Lynch Mortgage Investors, Inc.
2,538,432 6.690% due 11/21/2028 ........................................... 2,509,354
2,100,000 6.960% due 11/21/2028 ........................................... 1,916,071
2,245,651 Mid-State Trust
7.340% due 07/01/2035 ........................................... 2,182,481
Mortgage Capital Funding, Inc.
2,200,000 7.117% due 11/20/2007 ........................................... 2,028,697
2,175,000 6.423% due 05/18/2008 ........................................... 2,044,670
4,730,899 Nomura Asset Securities Corporation
7.070% due 04/13/2036 ........................................... 4,717,014
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES (CONTINUED)
<S> <C> <C>
Oakwood Mortgage Investors, Inc.
$1,086,785 6.450% due 01/15/2021 ........................................... $ 1,080,846
3,570,000 7.500% due 01/15/2021 ........................................... 3,458,955
6,581,768 SLM Student Loan Trust
5.464% due 04/25/2006 ........................................... 6,535,136
2,300,000 Team Fleet Financing Corporation
6.900% due 07/25/2003 ........................................... 2,300,000
Vanderbilt Mortgage Finance Corporation, Inc.
950,000 7.550% due 12/07/2027 ........................................... 772,170
1,000,000 6.750% due 10/07/2028 ........................................... 883,685
-------------
Total Asset-Backed Securities
(Cost $62,027,350) .............................................. 59,402,423
-------------
FEDERAL AGENCY SECURITIES -- 3.5%
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLB)
5,700,000 5.170% due 01/21/2000 ........................................... 5,683,628
10,865,000 5.480%-5.600% due 01/25/2000 .................................... 10,824,437
-------------
16,508,065
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA)
3,750,000 5.590% due 01/19/2000 ........................................... 3,739,481
-------------
Total Federal Agency Securities
(Cost $20,247,546) .............................................. 20,247,546
-------------
Shares
--------
COMMON STOCK
CLOSED-END BOND FUNDS -- 4.1 %
389,700 Blackrock 2001 Term Trust, Inc. ................................... 3,458,587
350,400 Blackrock North American Government Income Trust, Inc ............. 3,197,400
409,400 Blackrock Strategic Term Trust, Inc. .............................. 3,607,838
53,400 Dresdner Global Strategies Fund ................................... 310,388
39,400 Dreyfus Strategic Governments Income Fund, Inc. ................... 307,813
55,700 First Commonwealth Fund ........................................... 511,744
1,000 Fresenius Medical Capital Trust II ................................ 925,000
602,700 Hyperion 2002 Term Trust, Inc ..................................... 4,896,937
133,500 Hyperion Total Return Fund, Inc. .................................. 992,906
37,600 Mentor Income Fund, Inc. .......................................... 267,900
415,500 MFS Government Markets Income Trust ............................... 2,363,156
297,700 MFS Intermediate Income Trust ..................................... 1,804,806
19,200 Oppenheimer Multi-Sector Income Trust, Inc ........................ 146,400
196,900 Templeton Global Income Fund ...................................... 1,156,788
-------------
Total Closed-End Bond Funds
(Cost $23,786,087) 23,947,663
-------------
PREFERRED STOCK -- 0.5%
54,000 Equity Office Properties Trust .................................... 2,106,000
30,000 Golden State Bancorp .............................................. 676,875
-------------
Total Preferred Stock
(Cost $3,462,850) ............................................... 2,782,875
-------------
Principal
Amount
---------
REPURCHASE AGREEMENT -- 1.1% (Cost $6,230,000)
$6,230,000 Agreement with State Street Bank, 3.00% to be repurchased at
$6,231,558 on 01/03/2000, collateralized by $6,635,000 Federal
Home Loan Corporation 5.00% due 01/15/2004
market value $6,361,306. ........................................... 6,230,000
-------------
</TABLE>
See accompanying notes to financial statements.
25
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Expiration Strike Value
Contracts Date Price (Note 2)
- --------------------------------------------------------------------------------
CALL OPTIONS PURCHASED -- 0.0%
<S> <C> <C> <C> <C>
CALL OPTIONS PURCHASED -- 0.0%
3,223,000 10 Year U.S. Treasury Note Calls(e) .......... 02/15/2000 99 $ 8,058
3,513,000 10 Year U.S. Treasury Note Calls(e) .......... 02/15/2000 98 10,539
4,700,000 10 Year U.S. Treasury Bond Calls ............. 05/05/2000 100 21,103
-------------
Total Call Options Purchased
(Cost $186,043) ......................................................... 39,700
-------------
PUT OPTIONS PURCHASED -- 0.4%
PUT OPTIONS PURCHASED -- 0.4%
924,000 SSB Emerging Market Index Puts (Cost $30,400) 03/24/2000 85 3,039,960
-------------
TOTAL INVESTMENTS
(Cost $607,012,452*) ................................................ 101.3% 587,123,904
----- -------------
COVERED OPTIONS-NONLEVERAGED -- (0.1)%
CALL OPTIONS WRITTEN:
(47) 30 Year Government National Mortgage
Association Calls(e) ................... 02/15/2000 97 (13,029)
(50) 30 Year Government National Mortgage
Association Calls(e) ................... 02/15/2000 97 (15,559)
(4,700,000) 10 Year U.S. Treasury Bond Calls(c) ......... 05/05/2000 104 (2,914)
-------------
(31,502)
-------------
PUT OPTIONS WRITTEN:
(4,300,000) 10 Year U.S. Treasury Bond Puts(d) .......... 02/11/2000 93 (227,384)
(4,300,000) 10 Year U.S. Treasury Bond Puts(d) .......... 02/11/2000 93 (243,208)
(4,700,000) 10 Year U.S. Treasury Bond Puts(c) .......... 05/05/2000 97 (83,895)
-------------
(554,487)
-------------
Total Covered Options - Nonleveraged
(Premiums $278,656) ............................................ (0.1)% (585,989)
----- -------------
OTHER ASSETS AND LIABILITIES (NET) ............................................ (1.2)% (7,048,654)
----- -------------
NET ASSETS .................................................................... 100.0% $579,489,261
===== =============
- --------------------
<FN>
* Aggregate cost for federal tax purposes.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1999, the value of these securities amounted to $6,208,633 or 1.07% of
net assets.
** Zero coupon security as of December 31, 1999. The coupon shown is the
step-up rate.
***Zero Coupon Bond
# Amount represents less than 0.1%.
(a)Variable Rate Security. The interest rate shown reflects the rate in effect
at December 31, 1999.
(b)Floating note.
(c)A portion of the $3,550,000 U.S. Treasury Note was internally pledged against
short Treasury put options (covered options nonleveraged).
(d)$100,000 of the $375,000 U.S. Treasury Note was internally pledged against
short Treasury call options (covered options-nonleveraged).
(e)The call options purchased offset and collateralize the call options written.
ABBREVIATIONS:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
</FN>
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT BALANCED GROWTH FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
INVESTMENT COMPANIES -- 97.7%
<S> <C> <C> <C> <C>
5,099,007 New Covenant Growth Fund ................................................... $204,128,630
4,829,161 New Covenant Income Fund ................................................... 122,121,213
-------------
Total Investment Companies
(Cost $283,631,924) ....................................................... 326,249,843
Principal
Amount
---------
REPURCHASE AGREEMENT -- 2.9% (Cost $9,583,000)
$9,583,000 Agreement with State Street Bank, 3.00% to be repurchased at
$9,585,396 on 01/03/2000, collateralized by $1,465,000 Federal
Home Loan Bank 5.875% due 08/15/2001, market value $1,488,806 and
$8,375,000 Federal National Mortgage
Association 5.600% due 04/12/2002, market value $8,291,250. ............... 9,583,000
TOTAL INVESTMENTS
(Cost $293,214,924*) ......................................................... 100.6% 335,832,843
OTHER ASSETS AND LIABILITIES (NET) ............................................. (0.6)% (2,057,527)
------ ------------
NET ASSETS ..................................................................... 100.0% $333,775,316
====== ============
- ---------------------------
<FN>
* Aggregate cost for federal tax purposes.
</FN>
</TABLE>
See accompanying notes to financial statements.
27
<PAGE>
PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
NEW COVENANT BALANCED INCOME FUND
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT COMPANIES -- 98.0%
1,113,888 New Covenant Growth Fund ........................................................ $ 47,084,037
3,260,775 New Covenant Income Fund ........................................................ 78,095,568
-------------
Total Investment Companies
(Cost $117,793,986) ............................................................ 125,179,605
Principal
Amount
---------
REPURCHASE AGREEMENT -- 5.3% (Cost $6,792,000)
$6,792,000 Agreement with State Street Bank, 3.00% to be repurchased at
$3,396,849 on 01/03/2000, collateralized by $3,615,000
Federal Home Loan Mortgage Corporation 5.00% due 01/15/2004,
market value $3,465,881 .......................................... 6,792,000
-------------
TOTAL INVESTMENTS
(Cost $124,585,986*) ........................................................ 103.3% 131,971,605
OTHER ASSETS AND LIABILITIES (NET) ............................................. (3.3)% (4,267,178)
----- -------------
NET ASSETS ..................................................................... 100.0% $127,704,427
===== =============
- -----------------------------
<FN>
* Aggregate cost for federal tax purposes.
</FN>
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW COVENANT NEW COVENANT
NEW COVENANT NEW COVENANT BALANCED BALANCED
GROWTH FUND INCOME FUND GROWTH FUND INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS:
<S> <C> <C> <C> <C>
Investments, at value (Note 2) ..... $888,152,844 $587,123,904 $335,832,843 $131,971,605
Foreign currency, at value
(Cost $1,880,665, $202,979,
$0, and $0 respectively) ....... 1,723,506 332,682 -- --
Cash .............................. 6,669 28,603 502 1,003
Receivable for investments sold ... 954,338 4,974,488 -- --
Receivable for fund shares sold ... 106,824 88,536 30,447 95,230
Dividends and interest receivable . 704,733 7,731,364 799 566
Prepaid expenses and other assets . 55,409 28,294 24,546 12,921
------------ ------------ ------------ ------------
Total Assets ...................... 891,704,323 600,307,871 335,889,137 132,081,325
------------ ------------ ------------ ------------
LIABILITIES:
Payable for securities purchased .. 2,534,690 19,792,704 114,395 3,444,932
Payable for fund shares redeemed .. -- -- 157,004 13,716
Options written
(Premiums received $278,656) ... -- 585,989 -- --
Distributions payable ............. -- -- 1,803,429 894,335
Advisory fee payable .............. 735,136 371,804 -- --
Other accrued expenses ............ 62,336 68,113 38,993 23,915
------------ ------------ ------------ ------------
Total Liabilities ................. 3,332,162 20,818,610 2,113,821 4,376,898
------------ ------------ ------------ ------------
NET ASSETS ............................ $888,372,161 $579,489,261 $333,775,316 $127,704,427
============ ============ ============ ============
Investments, at Identified Cost ....... $667,871,451 $607,012,452 $293,214,924 $124,585,986
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in capital ................... 663,750,446 610,201,230 287,955,264 119,657,494
Undistributed / (distributions
in excess of) net
investment income .............. (3,911,217) (491,518) 2,712,263 625,268
Accumulated net realized gain / (loss)
on investments and foreign
currency transactions .......... 8,408,700 (10,154,273) 489,870 36,046
Net unrealized appreciation /
(depreciation) on investments
and foreign currency transactions 220,124,232 (20,066,178) 42,617,919 7,385,619
------------ ------------ ------------ ------------
Total Net Assets .................. $888,372,161 $579,489,261 $333,775,316 $127,704,427
============ ============ ============ ============
NET ASSET VALUE, offering price
and redemption price per share of
beneficial interest outstanding ... $ 42.27 $ 23.95 $ 92.22 $ 20.08
============ ============ ============ =============
Number of Portfolio shares outstanding 21,015,042 24,192,058 3,619,428 6,360,362
============ ============ ============ =============
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW COVENANT NEW COVENANT
NEW COVENANT NEW COVENANT BALANCED BALANCED
GROWTH FUND(A) INCOME FUND(A) GROWTH FUND(A) INCOME FUND(A)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends ......................... $ 4,998,540 $ 1,254,274 $ 10,167,414 $ 3,886,071
Interest .......................... 889,818 18,440,515 18,138 9,511
------------ ----------- ----------- ------------
Total Investment Income ........... 5,888,358 19,694,789 10,185,552 3,895,582
------------ ----------- ----------- -------------
EXPENSES:
Investment advisory fees (Note 3) . 4,170,492 2,123,238 -- --
Administration fees ............... 80,090 38,536 21,694 11,418
Custodian fees .................... 161,378 110,408 34,405 18,231
Legal and audit fees .............. 20,069 13,077 6,509 3,426
Transfer agent fees ............... 14,725 14,745 37,323 19,676
Directors' expenses ............... 5,726 3,853 2,170 1,141
Registration fees ................. 1,725 1,161 653 344
Shareholder report expenses ....... 6,544 4,624 2,603 1,371
Organizational expenses ........... 50,699 34,134 19,208 10,109
Insurance expense ................. 6,752 4,473 2,519 1,324
Miscellaneous expenses ............ 19,631 10,536 4,566 3,654
----------- ---------- ------------ -------------
Total Expenses .................... 4,537,831 2,358,785 131,650 70,694
----------- ---------- ------------ -------------
NET INVESTMENT INCOME ............. 1,350,527 17,336,004 10,053,902 3,824,888
----------- ---------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN / (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain / (loss) on
investments and foreign currency
transactions ...................... 30,916,709 (10,154,273) 2,596,901 849,582
Net change in unrealized appreciation/
(depreciation) on investments and
foreign currency transactions ..... 220,124,232 (20,066,178) 42,617,919 7,385,619
----------- ----------- ----------- ------------
Net realized and unrealized gain /
(loss) on investments and foreign
currency .......................... 251,040,941 (30,220,451) 45,214,820 8,235,201
----------- ----------- ----------- ------------
NET INCREASE / (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS ................... $252,391,468 $(12,884,447) $55,268,722 $ 12,060,089
============ ============ =========== ============
- ------------------------------
<FN>
(a) The Fund commenced investment operations on July 1, 1999.
</FN>
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NEW COVENANT NEW COVENANT
NEW COVENANT NEW COVENANT BALANCED BALANCED
GROWTH FUND(A) INCOME FUND(A) GROWTH FUND(A) INCOME FUND (A)
- -----------------------------------------------------------------------------------------------------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income $ 1,350,527 $ 17,336,004 $ 10,053,902 $ 3,824,888
Net realized gain / (loss) on
investments .................... 30,916,709 (10,154,273) 2,596,901 849,582
Net change in unrealized appreciation/
(depreciation) on investments and
foreign currency transactions .. 220,124,232 (20,066,178) 42,617,919 7,385,619
------------- ---------- ------------- -------------
Net increase / (decrease) in net assets
resulting from operations ...... 252,391,468 (12,884,447) 55,268,722 12,060,089
------------- ---------- ------------- -------------
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS:
From net investment income ....... (1,350,527) (17,336,004) (7,341,639) (3,199,620)
In excess of net investment income (3,911,217) (491,518) -- --
From net realized gains on investments (22,508,009) -- (2,107,031) (813,536)
------------- ------------ ------------- -------------
(27,769,753) (17,827,522) (9,448,670) (4,013,156)
------------- ------------ ------------- -------------
SHARE TRANSACTIONS:
Net increase / (decrease) in net assets
from shares of beneficial interest
transactions ................... (11,814,513) 23,180,974 287,955,264 119,657,494
------------- ------------ ------------- -------------
Net increase in net assets ...... 212,807,202 (7,530,995) 333,775,316 127,704,427
------------- ------------ ------------- -------------
NET ASSETS:
Beginning of period ............. 675,564,959 587,020,256 -- --
------------- ------------ ------------- -------------
End of period ................... $888,372,161 $579,489,261 $333,775,316 $127,704,427
============= ============ ============ ============
- ---------------------------
<FN>
(a) The Fund commenced investment operations on July 1, 1999.
</FN>
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
For a Share outstanding throughout each period.
- --------------------------------------------------------------------------------
<TABLE>
NEW COVENANT NEW COVENANT
NEW COVENANT NEW COVENANT BALANCED BALANCED
GROWTH FUND(A) INCOME FUND(A) gROWTH FUND(A) INCOME FUND(A)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING PERFORMANCE:
<CAPTION>
Net asset value,
beginning of period ............. $ 40.81 $ 24.52 $ 90.96 $ 20.16
---------- --------- --------- ---------
Net investment income ............ 0.07 0.72 2.82 0.61
Net realized and unrealized
gain / (loss) on investments .... 2.72 (0.55) 1.10 (0.05)
---------- --------- --------- ---------
Total from investment operations . 2.79 0.17 3.92 0.56
---------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income (0.07) (0.72) (2.07) (0.51)
Distributions in excess of net
investment income ............. (0.18) (0.02) -- --
Distributions from net realized gains (1.08) -- (0.59) (0.13)
---------- --------- --------- --------
Total distributions .............. (1.33) (0.74) (2.66) (0.64)
---------- --------- --------- --------
NET ASSET VALUE, END OF PERIOD ... $ 42.27 $ 23.95 $ 92.22 $ 20.08
========== ========= ========= ========
Total return++ ................... 6.89% 0.71% 4.37% 2.84%
========== ========= ========= ========
RATIOS TO AVERAGE NET ASSETS
AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 888,372 $ 579,489 $ 127,704 $ 333,775
Ratio of net investment income to
average net assets .............. 0.32%+ 5.94%+ 6.26%+ 6.15%+
Ratio of operating expenses to
average net assets .............. 1.07%+ 0.81%+ 0.08%+ 0.11%+
Portfolio turnover rate .......... 30%* 78%* 5%* 5%*
- ---------------------------------
<FN>
(A)The Fund commenced operations on July 1, 1999.
+ Annualized.
++ Total return represents aggregate total return for the period indicated.
* Unannualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
1. ORGANIZATION
New Covenant Funds (the "Trust"), an open-end, diversified management investment
company, was organized as a Delaware business trust on September 30, 1998. It
currently consists of four investment funds: New Covenant Growth Fund ("Growth
Fund"), New Covenant Income Fund ("Income Fund"), New Covenant Balanced Growth
Fund ("Balanced Growth Fund") and New Covenant Balanced Income Fund ("Balanced
Income Fund"), (individually, a "Fund", and collectively, the "Funds"). The
Funds commenced investment operations on July 1, 1999. The Trust's authorized
capital consists of an unlimited number of shares of beneficial interest of
$0.001 par value. The Funds' investment adviser is New Covenant Trust Company,
N.A. (the "Adviser").
The objectives of the Funds are as follows:
GROWTH FUND Long-term capital appreciation. Dividend income, if any,
will be incidental.
INCOME FUND High level of current income with preservation of capital.
BALANCED GROWTH FUND Produce capital appreciation with less risk than would be
present in a portfolio of only common stocks.
BALANCED INCOME FUND Produce current income and long-term growth of capital.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies consistently followed by the Funds in the
preparation of its financial statements. These policies are in conformity with
generally accepted accounting principles.
PORTFOLIO VALUATION: Generally, a Fund's investments are valued at market value
or, in the absence of market value with respect to any portfolio securities, at
fair value as determined by, or under the direction of, the Board of Trustees.
Equity securities which are traded in the over-the-counter market only, but
which are not included in the NASDAQ National Market System, will be valued at
the mean between the last preceding bid and asked prices. Valuations may also be
obtained from pricing services when such prices are believed to reflect fair
market value. Securities with a remaining maturity of sixty days or less are
valued at amortized cost, which approximates market value. Short-term notes are
valued at cost. Corporate bonds, municipal bonds, receivables and portfolio
securities not currently quoted as indicated above, and other assets will be
valued at fair value as determined in good faith by the Board of Trustees.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the New York Stock Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the New York Stock
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
Exchange that will not be reflected in the computation of a Fund's net asset
value. If events materially affecting the value of such securities occur during
such period, these securities will be valued at their fair value according to
procedures decided upon in good faith by the Funds' Board of Trustees. All
securities and other assets of a Fund initially expressed in foreign currencies
will be converted to U.S. dollar values at the mean of the bid and offer prices
of such currencies against U.S. dollars last quoted on a valuation date by any
recognized dealer.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income,
adjusted for accretion of discounts and amortization of premiums, is recorded on
the accrual basis. Dividend income is recorded on the ex-dividend date, except
that certain dividends from foreign securities are recorded as soon as the Funds
are informed of the ex-dividend date, if the ex-dividend date has passed.
OPTIONS: The Income Fund may purchase or write options which are exchange traded
to hedge fluctuation risks in the prices of certain securities. When a Fund
writes a call or put option, an amount equal to the premium received is
reflected as a liability. The liability is subsequently "marked-to-market" to
reflect the current market value of the option written. The premium paid by a
Fund for the purchase of a call or put option is recorded as an investment and
subsequently "marked-to-market" to reflect the current market value of the
option purchased. The Fund is subject to the risk of an imperfect correlation
between movement in the price of the instrument and the price of the underlying
security or transaction. Risks may also arise due to illiquid secondary markets
for the instruments.
FOREIGN CURRENCY TRANSLATION: The books and records of the Funds are maintained
in U.S. dollars. Investment valuations and other assets and liabilities
initially expressed in foreign currencies are converted each business day into
U.S. dollars based upon current exchange rates. Purchases and sales of foreign
investments and income and expenses are converted into U.S. dollars based upon
exchange rates prevailing on the respective dates of such transactions. That
portion of unrealized gains or losses on investments due to fluctuations in
foreign currency exchange rates is not separately disclosed.
REPURCHASE AGREEMENTS: The Funds may enter into repurchase agreements with a
bank, broker-dealer or other financial institution, which are secured by
obligations of the U.S. government. Each repurchase agreement is at least 100%
collateralized and marked to market daily. However, in the event of default or
bankruptcy by the counterparty to the agreement, realization of the collateral
may be subject to certain costs, losses or delays.
DEFERRED OFFERING COSTS: The Trust has deferred initial offering costs by Fund
as follows: Growth Fund, $92,967; Income Fund, $64,192; Balanced Growth Fund,
$42,057; and Balanced Income Fund, $22,135. These costs will be amortized over
the period of benefit, not to exceed 12 months from the date the Fund commences
operations.
34
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income of all Funds are declared and paid at least annually. For all Funds, all
net realized long-term or short-term capital gains, if any, will be declared
and distributed at least annually. Interest and dividend payments will normally
be distributed as income dividends on a quarterly basis for each of the Funds.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income, gains and losses on various investment securities held by a Fund, timing
differences in the recognition of income, gains and losses and differing
characterizations of distributions made by the Fund.
FEDERAL INCOME TAXES: It is the Funds' intention to qualify as a regulated
investment company by complying with the appropriate provisions of the Internal
Revenue Code of 1986, as amended. Accordingly, no provision for federal income
tax has been made.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Trust, on behalf of each Fund, has entered into an Investment Advisory
Agreement with New Covenant Trust Company, N.A. (or the "Adviser"). Under the
Agreement, the Adviser is responsible for managing the Funds' investments as
well as furnishing the Funds with certain administrative services. The Growth
Fund pays the Adviser a monthly fee at the annual rate of 0.99% of the Growth
Fund's average daily net assets and the Income Fund pays the Adviser a monthly
fee at the annual rate of 0.75% of the value of the Income Fund's average daily
net assets. The Adviser does not receive advisory fees for the Balanced Growth
and Balanced Income Funds. The Adviser has entered into Sub-Advisory Agreements
with eight Sub-Advisers to assist in the selection and management of each Fund's
investment securities. It is the responsibility of the Sub-Advisers, under the
direction of the Adviser, to make day-to-day investment decisions for the Funds.
The Adviser pays each Sub-Adviser a quarterly fee for their services in managing
assets of the Funds. The Adviser pays the Sub-Advisers' fees directly from its
own advisory fees. The Sub-Advisory fees are based on the assets of a Fund to
which a Sub-Adviser is responsible for making investment decisions.
The following are the Sub-Advisers for the Growth Fund: William Blair & Company,
L.L.C.; John W. Bristol & Co., Inc.; Capital Guardian Trust Company; Carl Domino
Associates, L.P.; Lazard Asset Management; and Seneca Capital Management.
The following are the Sub-Advisers for the Income Fund: Standish, Ayer & Wood,
Inc. and Tattersall Advisory Group.
The Trust has a Services Agreement with PFPC Inc. ("PFPC"). Under the Services
Agreement, PFPC provides certain transfer agency and administrative services to
the Funds. Fees charged for fund administration are 0.15% of the first $50
million of total net assets, 0.10% of the next $50 million of total net assets
and 0.05% of total net assets over $100 million. The maximum annual combined fee
for fund administration is $250,000 for all four Funds. Fees charged for
transfer agency services are $20 per shareholder account for each Fund with a
minimum annual fee of $27,000 per Fund.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
The Trust has a Distribution Agreement with Provident Distributors Inc. (the
"Distributor") to serve as the principal distributor of the Funds' shares. The
Funds do not pay any fees to the Distributor in its capacity as principal
distributor.
4. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding U.S.
Government and short-term investments, for the six months ended December 31,
1999 were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FUND PURCHASES SALES
- --------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund ....................... $ 243,918,915 $ 250,694,475
Income Fund ....................... 285,737,528 278,934,647
Balanced Growth ................... 296,940,073 15,905,050
Balanced Income ................... 123,302,450 6,358,047
- --------------------------------------------------------------------------------
</TABLE>
The cost of purchases and proceeds from sales of long-term U.S. Government
securities for the six months ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
FUND PURCHASES SALES
- --------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund ....................... $ -- $ --
Income Fund ....................... 178,301,235 150,634,120
Balanced Growth ................... -- --
Balanced Income ................... -- --
- --------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
At December 31, 1999, the aggregate cost of investments, gross unrealized
appreciation and depreciation and net unrealized appreciation/(depreciation) for
federal tax purposes was as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
FUND COST APPRECIATION DEPRECIATION (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth Fund ................. $667,871,451 $251,734,026 $ 31,452,633 $220,281,393
Income Fund ................. 607,012,452 5,070,533 24,959,081 (19,888,548)
Balanced Growth ............. 293,214,924 42,617,919 -- 42,617,919
Balanced Income ............. 124,585,986 7,385,619 -- 7,385,619
- ---------------------------------------------------------------------------------------------------------
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust Instrument authorizes the issuance of an unlimited number of shares
for each of the Funds, and each share has a par value of $0.001 per share. The
Fund currently offers a single class of shares. Each issued and outstanding
share of each Fund is entitled to participate equally in dividends and
distributions declared by such Fund and in the net assets of such Fund upon
liquidation or dissolution remaining after satisfaction of outstanding
liabilities.
<TABLE>
<CAPTION>
SIX MONTHS ENDED 12/31/99
- --------------------------------------------------------------------------------
SHARES AMOUNT
- --------------------------------------------------------------------------------
GROWTH FUND:
<S> <C> <C>
Sold .................................... 797,998 $ 31,603,675
Issued as reinvestment of dividends ..... 50,980 2,122,643
Redeemed ................................ (1,204,013) (45,540,831)
- --------------------------------------------------------------------------------
Net increase ............................ (355,035) $(11,814,513)
================================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED 12/31/99
- --------------------------------------------------------------------------------
SHARES AMOUNT
- --------------------------------------------------------------------------------
INCOME FUND:
<S> <C> <C>
Sold .................................... 1,617,117 $ 39,316,659
Issued as reinvestment of dividends ..... 31,711 768,120
Redeemed ................................ (694,562) (16,903,805)
- --------------------------------------------------------------------------------
Net increase ............................ 954,266 $ 23,180,974
================================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED 12/31/99
- --------------------------------------------------------------------------------
SHARES AMOUNT
- --------------------------------------------------------------------------------
BALANCED GROWTH FUND:
<S> <C> <C>
Sold .................................... 3,693,402 $294,718,986
Issued as reinvestment of dividends ..... 75,986 6,914,790
Redeemed ................................ (149,961) (13,678,512)
- --------------------------------------------------------------------------------
Net increase ............................ 3,619,427 $287,955,264
================================================================================
</TABLE>
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED 12/31/99
- --------------------------------------------------------------------------------
SHARES AMOUNT
- --------------------------------------------------------------------------------
BALANCED INCOME FUND:
<S> <C> <C>
Sold .................................... 6,474,501 $121,925,644
Issued as reinvestment of dividends ..... 128,890 2,567,801
Redeemed ................................ (243,029) (4,835,951)
- --------------------------------------------------------------------------------
Net increase (decrease) ................. 6,360,362 $119,657,494
================================================================================
</TABLE>
6. RISK FACTORS
The performance of a Fund's investments in non-U.S. companies and in companies
operating internationally or in foreign countries will depend principally on
economic conditions in their product markets, the securities markets where their
securities are traded, and on currency exchange rates. These risks are present
because of uncertainty in future exchange rates back into U.S. dollars, and
possible political instability which could affect foreign financial markets and
local economies. There are also risks related to social and economic
developments abroad, as well as risks resulting from the differences between the
regulations to which U.S. and foreign issuers and markets are subject. The
conversion in 1999 of various European currencies into a single "euro" currency
also presents a risk on the timing of interest and principal payments.
The Funds will not invest more than 15% of the value of their net assets in
securities that are illiquid because of restrictions on transferability or other
reasons. Repurchase agreements with deemed maturities in excess of seven days
and securities that are not registered under the Securities Act of 1933, as
amended, but that may be purchased by institutional buyers pursuant to Rule 144A
are subject to this 15% limit (unless such securities are variable-amount
master-demand notes with maturities of nine months or less or unless the Board
determines that a liquid trading market exists). The Funds may purchase
securities which are not registered under the Securities Act but which can be
sold to "qualified institutional buyers" in accordance with Rule 144A under the
Securities Act. In some cases, such securities are classified as "illiquid
securities", however, any such security will not be considered illiquid so long
as it is determined by the Adviser, under guidelines approved by the Board of
Trustees, that an adequate trading market exists for that security. This
investment practice could have the effect of increasing the level of illiquidity
in the Fund during any period that qualified institutional buyers become
uninterested in purchasing these restricted securities.
The Income Fund may invest a limited amount of assets in debt securities which
are rated below investment grade (hereinafter referred to as "lower-rated
securities") or which are unrated but deemed equivalent to those rated below
investment grade by the portfolio managers. The lower the ratings of such debt
securities, the greater their risks. These debt instruments generally offer a
higher current yield than that available from higher-grade issues, and typically
involve greater risk. The yields on high-yield/high-risk bonds will fluctuate
over time. In general, prices of all bonds rise when interest rates fall and
fall when interest rates rise. While less sensitive to changing interest rates
than investment-grade debt, lower-rated securities are especially subject to
adverse changes in general economic conditions and to changes in the
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NEW COVENANT FUNDS
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
financial condition of their issuers. During periods of economic downturn or
rising interest rates, issuers of these instruments may experience financial
stress that could adversely affect their ability to make payments of principal
and interest, and increase the possibility of default.
The Balanced Funds invest their assets primarily in the Growth Fund and the
Income Fund. By investing primarily in shares of these Funds, shareholders of
the Balanced Funds indirectly pay a portion of the operating expenses,
management expenses and brokerage costs of the underlying Funds as well as their
own operating expenses. Thus, shareholders of the Balanced Funds may indirectly
pay slightly higher total operating expenses and other costs than they would pay
by directly owning shares of the Growth Fund and Income Fund. Total fees and
expenses to be borne by investors in either Balanced Fund will depend on the
portion of the Funds' assets invested in the Growth Fund and in the Income Fund.
A change in the asset allocation of either Balanced Fund could increase or
reduce the fees and expenses actually borne by investors in that Fund. The
Balanced Funds are also subject to rebalancing risk. Rebalancing activities,
while undertaken to maintain the Fund's investment risk-to-reward ratio, may
cause the Fund to underperform other funds with similar investment objectives.
For the Balanced Growth Fund, it is possible after rebalancing from equities
into a greater percentage of fixed-income securities, that equities will
outperform fixed-income investments. For the Balanced Income Fund, it is
possible that after rebalancing from fixed-income securities into a greater
percentage of equity securities, that fixed-income securities will outperform
equity investments. The performance of the Balanced Growth Fund and the Balanced
Income Fund depends on the performance of the underlying funds in which they
invest.
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NFC SAR 2/00
