General Board of Pension and Health Benefits of the United Methodist Church, Glenview, Ill., hired Northern Trust Asset Management to manage a new fund, called Equities Social Values Plus.
The new fund will be available Jan. 1, 2015, for participants in the board's self-directed defined contribution plans and for institutional clients of the board's Wespath Investment Management division, David Zellner, chief investment officer, said in an e-mail. The defined contribution plans represent about $2.5 billion of the board's total $20.4 billion in assets, while the institutional clients account for $2.5 billion.
The new fund, an index fund, will hold U.S. and international equities using MSCI environmental, social and governance research to apply additional screening criteria compared with other GBPHB funds. Existing screens exclude companies that provide products or services inherently in conflict with United Methodist Church values; the new fund also will screen to exclude companies based on unsustainable human rights or environmental practices.
The new fund will replace the Balanced Social Values Plus Fund, whose 60% U.S. equity allocation is managed by Northern Trust. The remaining 40% is internally managed fixed income through GBPHB's positive social purpose lending program. “The loans that presently comprise (30% of) the fund will be transferred to other funds,” Mr. Zellner said. The other 10% is in short-term investments.
GBPHB is dropping the fund because its “Multiple Asset Fund provides participants with a more diversified balanced fund offering.” Mr. Zellner said.
Balances of participants who don't choose a new fund before the Balanced Social Values Plus Fund is closed will be transferred to the Multiple Asset Fund.
No consultant was used in the changes.