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Knights of Columbus INVESTMENT REVIEW 2012. Our Commitment to You “We do not invest in high risk vehicles such as derivatives and junk bonds, nor do we.

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Presentation on theme: "Knights of Columbus INVESTMENT REVIEW 2012. Our Commitment to You “We do not invest in high risk vehicles such as derivatives and junk bonds, nor do we."— Presentation transcript:

1 Knights of Columbus INVESTMENT REVIEW 2012

2 Our Commitment to You “We do not invest in high risk vehicles such as derivatives and junk bonds, nor do we invest in the types of structured transactions that are currently causing such turmoil in the markets. We stay away from them not because we don't understand them - but because we do understand them - and the risk they entail.” Carl Anderson, Supreme Knight

3 WHAT WE DO: The Investment Department focuses on the purchase of: Investment grade corporates, across all market sectors Investment grade mortgage securities issued by agencies and mortgage companies In addition, we focus on asset allocation and assist in the development of new products WHAT WE DON’T DO: Invest in junk bonds Invest in derivatives Invest in highly speculative or highly structured Wall Street driven transactions Our focus is on investing in high quality securities

4 All investment managers for the Order are prohibited from investing in companies engaged in any of the following activities: Embryonic Stem Cell Research Human Cloning Pornography Abortifacient Contraception For Profit Health Care

5 $4,076 $9,958 $19,402 Average Annual Growth Rates: 1 Year 10 Years 20 Years Life & Other 6.8% 6.5% 7.9% Annuities 10.1% 8.2% 8.7% Total 7.6% 6.9% 8.1% 5

6 Total Assets: $19,401 (MM) 6

7 86.6% Agenda: Investment Process 2012 Activities Diversification & Quality Securities Lending 7

8 BOOK VALUE % PORTYIELDQUALITY U.S. MUNICIPALITY$ 1,394.4 9.8%4.64% AA- CORPORATES$ 7,695.9 54.2%4.98% A- MTG. BACKED SECS.$ 2,447.4 17.2%5.20% AA+ GOVT. & AGENCY$ 873.5 6.1%4.74% AAA COMM. MTG. BACKED SECS.$ 1,457.6 10.2%4.92% AA+ ASSET BACKED SECS.$ 354.2 2.5%4.35% A+ $ 14,223.4 100.0%4.94% A+ CANADA CORPORATES$ 1,460.0 57.4%4.50% A COMM. MTG. BACKED SECS.$ 190.8 7.5%5.22% AAA MTG. BACKED SECS.$ 164.3 6.5%4.62% AAA GOVT. & AGENCY$ 690.5 27.1%4.23% AA+ ASSET BACKED SECS.$ 39.4 1.5%3.04% AAA $ 2,545.2 100.0%4.47% AA- GRAND TOTAL$ 16,768.74.87% A+ SUMMARY OF 2012 BOND HOLDINGS* (Dollars in Millions) *No foreign exchange adjustment 8

9 3.09% Agenda: Top holdings Diversification Returns 9

10 2.39% Agenda: Management Platform Results * Includes SSGA Canadian Account 10

11 1.24% REAL ESTATE $241.5 Million $241.5 Million Agenda: ChurchLoan Program Real Estate Funds 11

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13 GROSS INVESTMENT INCOME* * INCLUDES INTEREST MAINTENANCE RESERVE (IMR) (Dollars in Millions) 13

14 ANNUALIZED GROWTH OF NET INVESTMENT INCOME FIVE YEARS ENDING 2012 * Peer group: Massachusetts Mutual, New York Life, Northwestern Mutual, State Farm and TIAA. USAA was excluded as their results, +11.32% for the five year period, is an outlier which skewed the peer numbers. 14

15 GROSS INVESTMENT YIELD* * Gross Investment Yield = Gross Investment Income/Average Assets 15

16 TOTAL CAPITAL AND SURPLUS* Annualized Growth: 1 Year10 Year20 Year Total Surplus0.10%0.46%2.55% * Includes Surplus, AVR and IMR (Dollars in Millions) 16

17 KNIGHTS OF COLUMBUS ACHIEVES HIGHEST RATINGS IN 2012: A.M. Best A++ (Superior)  A.M. Best said that “The ratings of the Order reflect its strong fraternal and Insurance presence within the Catholic communities in the United States and Canada, its superior risk-adjusted capitalization as measured by Best’s Capital adequacy Ratio and the Order’s consistently positive operating results.” A.M. Best also declared that the Knights of Columbus “has a strong affinity with its large membership base through its charitable programs and competitive portfolio of life insurance and annuity products.” There is no more highly rated life insurer in North America. 17

18 Fees:No up front sales charge or annual fee Access:1) Annual free withdrawals (10% of account balance per year) 2) Medical Withdrawal Option (FPA Contract) 3) Guaranteed income for life (with annuitization) 4) At death… ► avoids costs and delays of probate ► privacy protected, no public record ► reduces challenge potential Rate:1) Competitive with CDs 2) Tax-deferred, so compounds at higher rate while reinvesting (grows at full pre-tax rate) 3) Minimum interest rate guarantee, credited daily (worth more every single day*) Safety:Principal & Interest 100% guaranteed by the Knights of Columbus (will never go down in accumulation value*) ► Financial strength of the Knights of Columbus * - reducing surrender charges may apply The benefits of a Knights of Columbus retirement annuity:

19 Key Questions What is your planned retirement date? What part of your retirement funds should be in more conservative types of investments? Do you currently have any monies that should be ‘rolled over’? Do you qualify for a ROTH IRA with income tax free growth? Is tax deferral important to you? When does your next CD mature?

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