Thursday, August 25, 2011

BBT continues to maintain investment-grade holdings, despite U.S. credit rating downgrade

In the wake of Standard & Poor's downgrade of the U.S.' credit rating in early August, Church of the Brethren Benefit Trust sent a letter to Pension Plan members and Foundation clients assuring them that their investments continue to be in higher-rated securities, and that the portfolios are being carefully monitored during these uncertain times.

The Investment Guidelines - documents that outline the duties and regulations that BBT expects its investment managers to fulfill - state that all bond funds, except the High Yield Bond Fund, shall invest in securities that are investment-grade (the credit rating is BBB- or higher by Standard & Poor's or Baa3 or higher by Moody's). An investment-grade bond possesses a strong capacity to meet its financial commitment. The Aug. 12 letter notes, "Despite S&P's actions, our investment managers continue to be in compliance with our Investment Guidelines and our holdings maintain investment-grade status."

The release provided an overview of the investment manager review process that BBT staff members and their consultants undertake each quarter, which includes verification that investment managers are adhering to BBT's and BFI's Investment Guidelines.

"Investment Guidelines are designed to protect the assets of our members and clients, especially during these stressful times," the letter states. "We maintain well-diversified portfolios with the goal of insulating the portfolios from the effects of substantial losses in any single security or sector of the market. Policies and procedures designed to oversee the execution of Investment Guidelines are ensuring efforts to properly fulfill our fiduciary responsibility in the management of these assets, and we will take appropriate action as necessary."

Brethren Pension Plan members should contact Scott Douglas, director, with any questions they have about their investment allocations. Steve Mason, director of BFI, can be contacted by clients who have accounts with Brethren Foundation.

Visit\news to read the letters sent to BBT members and BFI clients.

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