1q 2018 investment portfolio review - cbisonline.com · era of low equity volatility ending...

Christian Brothers Investment Services, Inc. n [email protected] PAGE 1

1Q 2018

Investment Portfolio Review

LEADING CATHOLIC INSTITUTIONAL

INVESTMENT MANAGER

} Over $7 billion in assets under management

} Exclusively serve Catholic institutions

} Founded and owned by the De La Salle Christian Brothers

PIONEERED CATHOLIC RESPONSIBLE

INVESTINGSM

} Thoughtful and disciplined Catholic investment screens

} Encourage companies to improve policies and practices through active ownership

DIVERSIFIED INVESTMENT PROGRAMS

} Manager of managers } Institutional pooled funds

and separate accounts

UNIFY FAITH AND FINANCE

} Align investments with mission

DIVERSE RANGE OF NEEDS

} Portfolio services for a range of institutions

} Single- and multi-product relationships with institutions and their consultants

GLOBAL INVESTOR BASE

} Religious Institutes } Dioceses } Education } Healthcare

CBIS helps Catholic organizations achieve their financial goals through the socially responsible management of their investments.

BY PRODUCT TYPE ($MILLION)

BY CUIT TYPE ($MILLION)

Separate Accounts $663Global Funds PLC (UCITS) $641CUIT Funds $6,143

Money MarketOpportunistic BondBalancedCore IndexValue

Short bondInt. Diversified BondSmall capGrowthInternational

CBIS Asset Review

$7.4 BILLION IN TOTAL ASSETS

UNDER MANAGEMENT (3/31/18)

1%

6%

20%

5%6%

5%

6%

14%

30%

6%

8%9%

83%

Key Highlights:Market Overviewpage 2

Investment Program Offeringspage 8

CUIT Fund’s Performancepage 9

CUIT Fund Reportspage 10

Investment Portfolio Review 1Q 2018

Christian Brothers Investment Services, Inc. n [email protected] PAGE 2Christian Brothers Investment Services, Inc. n [email protected] PAGE 1

MARKET PERSPECTIVE 1Q 2018

The Return of Volatility

Volatility has returned to equity markets, but despite the turbulence, the

overall market saw only modest declines in the first quarter, with the

S&P 500 Index down by less than 1%. A number of economic signals and

policy factors, including normalizing interest rates, drove the change in

volatility—which may signal an opportunity for disciplined investors.

CAPITAL MARKETS REVIEW

Global Overview

U.S. Equity Markets

Fixed Income Markets

Inflation Moving Toward Fed Target

Wages Finally Increasing

Growth Still Dominating Value

Gap Narrows Between Bond & Equity Valuations

MARKET MUSINGS

Era of Low Equity Volatility Ending

Normalizing Interest Rates

Low Unemployment & Labor Participation

Trade Fears: Globalization Is Real



Market Perspective 1Q 2018 APRIL 2018


Capital Markets Review

Market Performance: 3 Month Market Performance: 12 Month

BB U.S. Short T-Bill (1-3M)

BB U.S. Aggregate

S&P 500

Russell 1000 Value

Russell 1000 Growth

S&P SmallCap 600

MSCI ACWI-Ex US (USD)

MSCI ACWI-Ex US (Local)

MSCI EM (USD)

MSCI EM (Local) 0.8

1.5

-3.0

-1.1

0.6

1.4

-2.8

-.08

-1.5

0.3 BB U.S. Short T-Bill (1-3M)

BB U.S. Aggregate

S&P 500

Russell 1000 Value

Russell 1000 Growth

S&P SmallCap 600

MSCI ACWI-Ex US (USD)

MSCI ACWI-Ex US (Local)

MSCI EM (USD)

MSCI EM (Local) 22.4

25.4

9.4

17.0

12.7

21.3

6.9

14.0

1.2

1.1

S&P 500

Consumer Discretionary

Consumer Staples

Energy

Financials

Healthcare

Industrials

Info Technology

Materials

Real Estate

Telecom

Utilities

S&P 500


Consumer Staples

Energy

Financials

Healthcare

Industrials

Info Technology

Materials

Real Estate

Telecom

Utilities

1.7

1.9

10.5

27.7

14.0

11.3

18.0

-0.2

-0.9

16.9

14.0

-5.0

-7.5 -4.9

-3.3

-5.5

3.5

-1.6

-1.2

-1.0

-5.9

-7.1

3.1

-0.8

Market Performance: 3 Month Market Performance: 12 Month

GLOBAL OVERVIEW

• Despite increased equity market

volatility and headlines about the

FAANG stocks (Facebook, Apple,

Amazon, Netflix, and Google), U.S.

growth stocks kept advancing while

value stocks lost ground.

• In the last 12 months, growth has

outperformed value by almost 15%.

• Small caps outperformed larger

cap stocks for the quarter, driven

largely by concerns over tariffs and a

resulting trade war.

• Emerging markets stocks

outperformed developed markets in

local and dollar terms.

• U.S. fixed income underperformed

equities as interest rates increased

across the curve during the quarter.

• Despite a weak March, the

Information Technology sector

generated the strongest

performance during 1Q, followed by

Consumer Discretionary.

• The Consumer Staples and Telecom

sectors were relatively weak in the

period.

• Over the last 12 months, only

three of the 11 S&P 500 sectors

outperformed the overall market.

• The Information Technology sector

has provided market leadership

for the last 12 months, followed

distantly by the Financials and

Consumer Discretionary sectors.

U.S. EQUITY MARKETS





Treasury Yield Curve

Market Performance: 12 MonthMarket Performance: 3 Month

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

3/31/17Maturity

12/31/173/31/18

30Y10Y7Y5Y3Y2Y1Y6M3M1M

High Yield

Corporate

CMBS

ABS

MBS

Treasury

BB U.S. Aggregate

-1.2

-1.2-0.4

-0.2

High Yield

Corporate

CMBS

ABS

MBS

Treasury

BB U.S. Aggregate -1.5

-0.4

-1.2-0.1

-2.3-0.8

-0.9-0.2

0.4

0.80.3

0.50.6

1.2

1.31.4

2.72.1

3.83.6

Duration-Adjusted Excess ReturnAbsolute Return

FIXED INCOME MARKETS

• While the yield curve has

experienced a significant twist in

the past 12 months, with the 30-

year portion unchanged, it shifted

upward in a parallel fashion in 1Q.

• In contrast, long duration has

outperformed shorter duration

in the past 12 months despite an

overall increases in yields.

• Credit and Asset Backed sectors

underperformed Treasuries in 1Q,

driven partly by increased market

volatility.

• In the past year, sectors offering

“equity-like risk” (e.g., High Yield

bonds) were rewarded.

Duration and performance exhibited a linear relationship in 1Q, with long duration underperforming short duration.





Source: U.S. Bureau of Labor Statistics, via Federal Reserve Economic Data, as of 3/31/2018; www.myf.red/g/jelQ

Employment Cost Index

Perce

nt Ch

ange

from

a Ye

ar A

go

2004 2006 2008 2010 2012 2014 20161.0

1.5

2.0

2.5

3.0

3.5

4.0

WAGES FINALLY INCREASING

• Wage increases should be

welcomed, not feared as

inflationary.

• The rate of wage increase is well

below historical norms, at levels

economists generally consider

“healthy.”

• Further increases closer to 3.5%-

4.5% would be a sign of stronger

economic growth.

• The Fed’s preferred measure of

inflation, the Personal Consumption

Expenditures Index, has moved

toward the monetary authority’s

stated target.

• The Fed will welcome consistent

readings between 2% and 2.5%.

INFLATION MOVING TOWARD FED TARGET

1970 1980 1990 2000 2010-2.5

0.0

2.5

5.0

7.5

10.0

12.5

Personal Consumption Expenditures Index

Source: U.S. Bureau of Economic Analysis, via Federal Reserve Economic Data, as of 3/31/2018; www.myf.red/g/iSGP

Perce

nt Ch

ange

from

a Ye

ar A

go




• Growth sectors continue to

outperform value despite increased

volatility; when will this trend turn?

• The gap between bond and

equity price-to-earnings ratios has

compressed; this trend is expected

to continue.

GROWTH STILL DOMINATING VALUE

GAP NARROWS BET WEEN BOND & EQUITY VALUATIONS

1980 1990

Relative Cumulative Added Value

Source: Bloomberg, as of 3/31/2018; www.Bloomberg.com

-0.4

-0.2

0

0.2

0.4

0.6

0.8

Feb ‘00

Jul ‘06

2000 2010 2018

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Source: Bloomberg, U.S. Department of the Treasury as of 3/31/2018; www.bloomberg.com, www.treasury.gov

2017201020001990 1995 200519851980

Bond P/E

Stock P/E

Market volatility will increase as the valuation difference narrows between these two asset classes.



Investment Portfolio Review 1Q 2018Market Perspective 1Q 2018 APRIL 2018


Thus the equity market volatility we witnessed in the first quarter was not unexpected. Rising interest rates represent change at the margin—in this case, higher borrowing costs for companies. Stock market investors consider that change and adjust their forecasts for the future profitability of companies. As a result, the relative attractiveness of individual stocks changes. Shares are traded. Repricing occurs. Volatility rises. All this happens so we can return the monetary system to the normal footing we require for the economy to function sustainably.

This increased volatility signals opportunity for disciplined investors. It exacerbates valuation differences and increases the potential for market mispricing of securities. This provides the potential for outperformance or alpha by active asset managers. At the portfolio level, volatility provides opportunities for improved outcomes for investors who follow a disciplined rebalancing process. In this case, market volatility encourages investors to “buy low and sell high” through rebalancing. Of course, emotion and institutional decision-making may make this advice difficult to follow. Each of these characteristics serves to transform market volatility from a risk into an asset.

The larger concern for market returns is not the increased volatility, but the potential for policy mistakes from well-intentioned actions and initiatives. This is where the quote from Milton Friedman comes into play.

There is no doubt in my mind the Federal Reserve is on the correct path by normalizing interest rates. In doing so, the Fed removes perverse incentives and potential risks from negative real interest rates. However, in forecasting the relationship between the unemployment rate and inflation in a 21st century

Volatility has returned to equity markets, a development that should cause neither surprise nor apprehension. For most of the past six years, we have been in an environment characterized by low levels of volatility, caused in large part by historically low interest rates. The world’s central banks engineered the low rate environment to stave off economic collapse in the face of the 2008 credit crisis and to prevent recession in the years of fragile recovery that followed.

Think of it as a program of life support—extreme measures applied on a temporary basis. Now the Federal Reserve has been quite eager to move its patient out of treatment and back to routine daily life. To do so, the central bank has been explicit in its desire to normalize interest rates, which means simply raising rates from levels near zero to somewhere in the direction of their longer-term averages. In the case of the federal funds rate, that’s just under 5%. Over the past 16 months, Fed policymakers have approved a series of six 0.25% interest rate increases, lifting the targeted federal funds rate into a range of 1.50% to 1.75%. That’s a significant move from zero, and while still a long way from the long-term historical average, it represents an extremely high percentage of change, coming as it does off a small base.

0%

5%

10%

15%

20%

Normalizing Interest Rates

1954 1962 1970 1978 1986 1994 2002 2010 2018

LT Avg. 4.85%

0.00%

0.50%

1.00%

1.50%

2.00%

2016 2017 2018

Path to Normal

Sep Dec Mar Jun Sep Dec Mar

Effec

tive F

eder

al Fu

nds R

ate

Source: Board of Governors of the Federal Reserve System, via Federal Reserve Economic Data, as of 3/31/2018; www.myf.red/g/iOFF

0%

1988 1998 2008 2018

10%

20%

30%

40%

50%

60%

70%

80%

90%AverageVolatility

Era of Low Equity Volatility Ending

Source: Bloomberg, as of 3/31/2018; www.Bloomberg.com

Equity market volatility has remained below long-run averages for most of the period since

the Global Financial Crisis, but we believe this period of tranquility is over as the Fed moves

toward normalization of short-term rates.

Market Musings

“One of the great mistakes is to judge policies and programs by their intentions rather than their results.” — Milton Friedman





corporations in foreign domiciles. Trade is not a “you win, I lose” proposition but rather a “win-win” or “lose-lose” equation. The dollars we spend on imports find their way back to the U.S. to purchase goods, services, or government debt to support our economic growth. Where else would the dollars

go? Unfortunately, tariffs simply increase the cost of the good or service. As with any product, increased prices result in reduced demand. The market reaction to the trade rhetoric is well-placed, and we anticipate continued volatility as these policies play out.

We have been fortunate to have low market volatility through the period of rehabilitation of global economies in the aftermath of the Financial Crisis. Now as economic growth is becoming more robust, monetary authorities are moving towards normalization of policy. This is a positive development that includes higher market volatility with all its risks and benefits.

economy, members of the Fed’s Open Market Committee risk overshooting—setting interest rates too high and triggering recession. Certainly this fear permeated the market in early February as a result of a strong employment report, a short-term increase in long-term bond yields as a result of increased inflationary expectations, and the first shot of higher volatility.

Shouldn’t we welcome higher wage growth? We have been waiting for this for years. Yes, the unemployment rate is low, and maybe it is close to a level that will spur inflationary wage increases. But, we cannot overlook the fact that the labor participation rate is also low and has not increased. The unemployment rate only factors in those individuals that are actively seeking employment, not those who have given up the job search. The low participation rate points to a supply of potential workers who are not currently seeking employment. With an increase in wages, is it not likely that some of the frustrated job seekers will re-enter the work force? That increase in the supply of labor could mitigate wage inflation. Wage growth remains below historical levels, and while we must always remain vigilant for inflation, at this point it remains a risk—not a reality.

A trade war presents an even greater threat to the market outlook. Trade is an ever-increasing percentage of world economic growth, with significant profits earned by U.S.

Low Unemployment & Labor Participation

1950 1960 1970 1980 1990 2000 20102%

3%

4%

5%

6%

7%

8%

9%

10%

11%

65.00%

63.75%

62.50%

61.25%

60.00%

58.75%

57.50%

66.25%

67.50%

68.75%Civilian Labor Force Participation Rate (right)Civilian Unemployment Rate (left)

Source: U.S. Bureau of Labor Statistics, via Federal Reserve Economic Data, as of 3/31/2018; www.myf.red/g/jeH4

Inflation fears in 1Q were based on the Phillips Curve Theory, which holds that unemployment

and inflation have a stable, inverse relationship. However, the decline in the participation

rate—particularly post-2008—can be viewed as a mitigating factor to offset Phillips Curve

concerns.

Wor

ld Tr

ade a

s Sha

re of

Wor

ld G

DP0%

10%

20%

30%

40%

50%

60%

70%

Trade Fears: Globalization Is Real

1960 1968 1976 1984 1992 2000 2008 2016

Source: World Development Indicators, as of 3/1/2018; databank.worldbank.org

Trade makes up more than 50% of global GDP; an outbreak of trade wars has the potential to

harm both economic growth and corporate earnings in the U.S.

John W. Geissinger, CFACIO, CBIS

Important Information: This is for informational purposes only and does not constitute an offer to sell any investment. The Funds are not available for sale in all jurisdictions. Where available for sale, an offer will only be made through the prospectus for the Funds, and the Funds may only be sold in compliance with all applicable country and local laws and regulations.


INVESTMENT PROGRAM OFFERINGSCBIS Offers Pooled Funds through its CUIT and Global Funds plc (UCITS) Fund families

CUIT FUND BENCHMARK MANAGER(S)

CUIT Money Market Fund Bloomberg Barclays U.S. Short T-Bills (1-3M) Index Wellington

CUIT Short Bond Bloomberg Barclays 1-3 Year Treasury Index Longfellow

CUIT Intermediate Diversified Bond Bloomberg Barclays Aggregate Index Dodge & Cox, Jennison, Reams

CUIT Opportunistic Bond Bloomberg Barclays 1-5 Year US Gov’t Credit Index Longfellow and Reams

CUIT Balanced 60% S&P 500 / 40% BBAgg Dodge & Cox, Jennison, Reams, RhumbLine

CUIT Core Equity Index S&P 500 RhumbLine

CUIT Value Equity Russell 1000 Value Index AJO, Dodge & Cox

CUIT Growth Russell 1000 Growth Index LA Capital, Wellington

CUIT Small-Cap Equity Index S&P SmallCap 600 Index RhumbLine

CUIT International Equity MSCI ACWI Ex-U.S. Index Causeway, Principal Global, WCM

UCITS FUND BENCHMARK MANAGER(S)

European Short-Term Government Bond Bloomberg Barclays Euro Gov’t Bond Index 1-3 Year ARCA

World Bond Bloomberg Barclays Capital Global Aggregate Index Degroof Fund Management Company

European Equity MSCI Europe Index Degroof Fund Management Company

World Equity MSCI AC World IndexScott Investment Partners; Los Angeles Capital Management Equity Research

Note: CUIT Funds are available to tax-exempt Catholic institutions in the United States. CBIS Global (UCITS) Funds can be purchased in select countries around the world.

Investment Management ProcessCBIS hires institutional investment management firms to manage our institutional funds and separately managed portfolios. We typically combine two or more managers in actively managed funds in order to achieve our investment objective.

MANAGERIDENTIFICATIONAND SELECTION

PORTFOLIOCONSTRUCTION

ON-GOINGDUE DILIGENCE

Proven Investment Process

Defined Core Competency

Value add over a full market cycle

Preference for majority-owned firms

Assess CRI Impact

Diversification of manager core competencies

Improved risk-adjusted returns

Managed Active Share

Systematic evaluation process

Quantitative and qualitative assessment

Analyze any disconnect between expectations and reality



Please review the Important Disclosures on page 32 for further information.

CUIT Funds Performance (March 31, 2018)

INVESTMENT OPTION/BENCHMARK1

MONTH3

MONTHS1

YEAR3

YEARS5

YEARS10

YEARSSINCE

INCEPTIONINCEPTION

DATE

CUIT Money Market Fund 0.12 0.32 1.08 0.52 0.33 0.32 3.24 Jan 1985

Bloomberg Barclays U.S. Short T-Bills (1-3 M) Index ± 0.13 0.33 1.05 0.51 0.32 0.33 3.66

CUIT Short Bond Fund 0.19 (0.06) 1.13 1.26 1.25 2.25 5.15 Jan 1985

Bloomberg Barclays 1-3 Year Treasury Index** 0.20 (0.16) (0.00) 0.38 0.50 1.12 4.95

CUIT Opportunistic Bond Fund Class A 0.07 (0.53) 0.72 1.25 * * 1.13 May 2013

CUIT Opportunistic Bond Fund Class B 0.08 (0.50) 0.87 1.40 * * 1.28 May 2013

Bloomberg Barclays 1-5 Year US Government/Credit Index 0.24 (0.50) 0.19 0.77 * * 0.90

CUIT Intermediate Diversified Bond Fund Class A 0.56 (1.24) 1.30 1.25 1.85 4.31 5.63 Jan 1995

CUIT Intermediate Diversified Bond Fund Class B 0.65 (1.13) 1.52 1.43 2.02 4.47 4.51 Jan 2003

Bloomberg Barclays Aggregate Bond Index 0.64 (1.46) 1.20 1.20 1.82 3.63 5.55 / 3.98

CUIT Balanced Fund (1.76) (0.87) 8.68 7.08 8.62 7.50 8.87 Dec 1983

60% S&P 500 / 40% BB Agg *** (1.24) (0.92) 8.89 7.10 8.81 7.52 9.55

CUIT Value Equity Fund Class A (2.53) (2.01) 10.96 7.87 11.07 8.17 9.66 Jan 1995

CUIT Value Equity Fund Class B (2.51) (1.92) 11.36 8.25 11.46 8.55 9.78 Jan 2003

Russell 1000 Value Index (1.76) (2.83) 6.95 7.88 10.78 7.78 10.02 / 9.19

CUIT Core Equity Index Fund Class A (2.51) (0.70) 14.88 10.50 13.10 9.08 9.67 Jan 1995

CUIT Core Equity Index Fund Class B (2.47) (0.63) 15.13 10.73 13.33 9.30 5.77 Mar 2000

S&P 500 Index (2.54) (0.76) 13.99 10.78 13.31 9.49 9.91 / 5.75

CUIT Growth Fund Class A (2.88) 1.68 18.31 11.18 13.97 9.65 8.70 Jan 1991

CUIT Growth Fund Class B (2.85) 1.74 18.66 11.52 14.33 9.98 9.12 Jan 2003

Russell 1000 Growth Index **** (2.74) 1.42 21.25 12.90 15.53 11.34 9.86 / 10.62

CUIT Small Capitalization Equity Index Fund Class A 1.97 0.56 12.62 8.27 11.18 9.47 7.13 Jan 2007

CUIT Small Capitalization Equity Index Fund Class B 2.00 0.63 12.97 8.58 11.50 9.79 7.43 Jan 2007

S&P SmallCap 600 Index § 2.04 0.57 13.09 8.80 11.72 9.97 7.66

CUIT International Equity Fund Class A (0.88) (0.88) 19.15 7.74 7.65 2.93 6.21 Jan 1995

CUIT International Equity Fund Class B (0.86) (0.79) 19.64 8.17 8.09 3.35 2.68 Mar 2000

MSCI ACWI-ex U.S. ‡ (1.69) (1.08) 17.05 6.74 7.40 3.43 5.76 / 4.07



FUND FACTS

PROFILE Q1 2018

Christian Brothers Investment Services, Inc. (800) 592-8890 n [email protected]

CUIT Money Market Fund

Objective Preserve capital, provide current income; and maintain liquidity

InvestmentsHigh quality, short-term, fixed-income obligations

StrategyLiquidity will be maintained by investing in highly rated securities with short maturities and by constraining the average portfolio maturity to less than 90 days; credit and default risk are further minimized by diversifying among issuers; the Fund attempts to maintain a stable net asset value of $1.00 per unit.

BenchmarkBloomberg Barclays U.S. Short T-Bills (1-3 M) Index

Asset ManagersWellington Management Company (Effective 8/1/01)

Total Expense Ratio / Minimum 0.32% / No Minimum

Fund Features Commingled fund exclusive for tax-exempt Catholic institutions

Daily NAV and daily liquidity

Dividends Distributed Monthly

MATURITY DISTRIBUTION %

FUND

0 to 7 Days 26.4

8 to 29 Days 26.4

30 to 59 Days 18.1

60 to 89 Days 12.8

90 to 179 Days 9.6

180 and Over 6.8

PORTFOLIO ANALYSIS

STATISTICS FUND BENCHMARK

Effective Duration (years) 0.1 Yrs 0.1 Yrs

Average Quality A-1 A-1+

Yield-to-Maturity 1.9% 1.6%

Fund Size $62.1MM

CREDIT QUALITY %

FUND BENCHMARK

A-1+ or higher 71.7 100.0

A-1 25.5 0.0

Less than A-1 1.3 0.0

Cash 1.4 0.0

1.4%

5.0%

4.0%

3.0%

2.0%

1.0%

0.%

CUIT Money Market A BB U.S. Short T-Bills (1-3 M) Index

FUND PERFORMANCE

QUARTERLY RETURN 3 MO 1 YR 3 YR 5 YR 10 YR

CUIT Money Market 0.32 1.08 0.52 0.33 0.32

Bloomberg Barclays U.S. Short T-Bills (1-3 M) Index 0.33 1.05 0.51 0.32 0.33

CALENDAR YEAR RETURN 2017 2016 2015 2014 2013

CUIT Money Market 0.93 0.31 0.02 0.05 0.01

Bloomberg Barclays U.S. Short T-Bills (1-3 M) Index 0.81 0.33 0.05 0.04 0.07

Please see Important Information on Page 2

The Fund’s benchmark was changed to the Bloomberg Barclays U.S. Short Treasury Bills (1-3 Month) Index effective April 1, 2017. For periods prior to

April 1, 2017, the applicable benchmark was the Merrill Lynch 91-Day Treasury Bill Index.

3 MO 1 YR 3 YR 5 YR 10 YR

Christian Brothers Investment Services, Inc. n [email protected] PAGE 12Christian Brothers Investment Services, Inc. n [email protected] PAGE 2 | CB -FFS-000-0000

Important InformationBenchmark Index: The Fund’s benchmark was changed to the Bloomberg Barclays U.S. Short Treasury Bills (1-3 Month) Index effective April 1, 2017. For periods prior to April 1, 2017, the applicable benchmark was the Merrill Lynch 91-Day Treasury Bill Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS.

Bloomberg Index Services Limited: BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

CUIT Money Market Fund

ALLOCATIONS %

US Government & Agencies

Certificates of Deposit

Repurchase Agreements

Commercial Paper Corporate

Asset-BackedSecurities

Non-Corporate Credit Cash

Fund 32.2 3.6 0.5 10.1 21.1 30.1 0.8 1.4

BENCHMARK 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

FUND COMMENTARY

3-Month Review

¡ Rates rose during the quarter as the Fed increased rates 25 basis points at its December meeting.

– The 1-month Treasury yield rose from 1.29% to 1.63%;– The 3-month yield rose from 1.44% to 1.73%;– The 6-month yield rose from 1.61% to 1.93%.

¡ The Fund’s yield to maturity rose from 1.44% to 1.91%.

¡ The Fund’s performance was slightly above the benchmark for the quarter, largely driven by asset backed securities – autos, which account for just over 19% of the holdings.

12-Month Review

¡ During the past year the Fed increased the Fed Funds rate by 25 basis points three times, for a total of 75 basis points, in turn lifting yields and Fund performance.

¡ The 1-month and 3-month Treasury yields rose during the past 12 months, up 89 basis points and 97 basis points respectively.

¡ Asset classes that outperformed for the period were asset backed securities – autos and credit cards and corporate/non-corporate credit.

Positioning & Outlook

¡ It is the sub-advisor’s view that the Fed will continue its gradual tightening trajectory with U.S. balance sheet reductions. The expectation is for steady U.S. economic growth and a stable inflation outlook. This supports the case for two to four additional Fed rate hikes in 2018.

¡ With a high likelihood of several more rate hikes this year, the sub-advisor has positioned the portfolio with roughly 50% floating rate notes, possibly moving to 60% depending on economic strength. The current floating rate breakdown is 40% corporates, which are linked to LIBOR, 0% T-Bill floaters and 5% Agency floaters. This positioning is well suited to weather Fed tightening.

¡ The sub-advisor believes the recent LIBOR-Overnight Swap spread widening will revert to historical norms later this year. Although the spread typically ranges from 10-20 basis points, it recently spiked to 60 basis points, a result of the corporate tax code changes and U.S. corporations repatriating overseas cash. This has driven down demand for short-term securities. This is a supply and demand issue and not credit related.


FUND FACTS

PROFILE Q1 2018


CUIT Short Bond Fund

Objective Preserve capital while providing current income in excess of cash market yields with moderate emphasis on capital appreciation

InvestmentsU.S. government, agency, corporate, asset-backed and mortgage-backed securities with an average maturity of less than five years; up to 10% of the portfolio may be invested in securities rated below investment-grade (including U.S. dollar-denominated domestic, supranational or foreign issues)

StrategyFocuses on sector allocation and security selection, coupled with a top-down macroeconomic risk management process; aimed at minimizing downside risk while maximizing income potential

BenchmarkBloomberg Barclays 1–3 Year Treasury Index

Asset ManagersLongfellow Investment Management Co. (Effective 7/1/08)





PORTFOLIO ANALYSIS


Average Maturity (years) 2.1 Yrs 1.9 Yrs


Average Quality AA- AAA


Current Yield 3.0% 1.8%

# of Securities 187 95

Fund Size $390.3MM

EFFECTIVE DURATION %

FUND BENCHMARK

< 1 Year 40.4 0.0

1 - 3 Years 46.8 100.0

3 - 5 Years 9.8 0.0

5 - 7 Years 2.6 0.0

7 - 10 Years 0.5 0.0

10 - 20 Years 0.0 0.0

> 20 Years 0.0 0.0

CREDIT QUALITY %

FUND BENCHMARK

AAA 58.9 100.0

AA 8.2 0

A 13.3 0

BBB 15.5 0

Below BBB 3.8 0

Cash 0.3 0

3%

2%

1%

0%

-1%

CUIT Short Bond A BB 1-3 Year Treasury Index

FUND PERFORMANCE


CUIT Short Bond -0.06 1.13 1.26 1.25 2.25

Bloomberg Barclays 1-3 Year Treasury Index -0.16 0.00 0.38 0.50 1.12


CUIT Short Bond 1.71 1.99 0.81 1.37 0.84

Bloomberg Barclays 1-3 Year Treasury Index 0.42 0.86 0.54 0.62 0.36

Please see Important Information on Page 2 The Fund’s benchmark was changed to the Bloomberg Barclays 1-3 Year Treasury Index effective July 1, 2016. For periods prior to July 1, 2016, the applicable benchmarks were: ML 1-3 Yr Treasury Index effective 7/1/01.


RISK METRICS

CHARACTERISTICS FUND / 5 YR BENCHMARK / 5 YR

Sharpe Ratio 1.6 0.3

Information Ratio 2.1 N/A

Standard Deviation 0.8 0.7

Tracking Error 0.5 N/A

Upside Capture 153.0 100.0

Downside Capture 36.5 100.0


Important InformationBenchmark Index: The Fund’s benchmark was changed to the Bloomberg Barclays 1-3 Year Treasury Index effective July 1, 2016. For periods prior to July 1, 2016, the applicable benchmarks were: ML 1-3 Yr Treasury Index effective 7/1/01; ML 1-5 Yr G/C Index effective 4/1/98; 50% LB Intermediate Government /50% LB 1-3 Yr Government effective 5/1/96; LB 1-3 Yr Government in prior periods. The performance shown for SBF reflects the linked performance of these benchmarks for each applicable period. Characteristics presented for the Short Bond Fund were also compiled using data from Barclays Capital U.S. 1-3 Year Treasury Bond Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS.


CBIS offers pooled funds on behalf of a not-for-profit investment trust, the Catholic United Investment Trust (CUIT) Offering Memorandum, which contains further information, is available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Fund. Commingled Fund exclusively for tax-exempt Catholic institutions. All assets are invested in accordance with CBIS’ Catholic Responsible Investing Guidelines. Total expense ratio includes management fee and all other fees (accounting, custody and transfer agent). The Funds provide daily NAV and daily liquidity.

CUIT Short Bond Fund

ALLOCATIONS %

Treasuries Agency Industrials Finance Utilities MBS CMO CMBS ABS Municipals Cash

Fund 23.5 8.7 13.6 17.0 1.7 1.6 1.3 10.8 18.9 2.7 0.3

Benchmark 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

FUND COMMENTARY

3-Month Review ¡ The Fed increased benchmark interest rate to 1.50-1.75% in March. As a result, yields rose about 40 basis points across short to intermediate

areas of the curve.

¡ The Fund’s strongest source of return, approximately10 basis points, was its shorter relative duration to the benchmark (1.7 vs. 1.9).

¡ The combination of sector and security selection added modestly to overall outperformance of the Fund.

¡ Curve positioning was neutral for the period.

12-Month Review

¡ The Fund’s combined allocation to corporates and securitized bonds contributed approximately 80 basis points of income advantage over the all-Treasury index. Allocations to financials, industrials, asset backed and commercial mortgage backed securities were additive.

¡ Shorter duration and curve positioning together added approximately 45 basis points to overall performance as yields increased on the front end of the curve.

¡ Security selection added modestly to results.


¡ The sub-advisor expects modest economic growth in the 2-3% range for 2018 and continues to seek added income from non-Treasury holdings.

¡ The Fund maintains duration slightly below the benchmark in anticipation of the Fed’s desire to raise rates.

¡ Emphasis on industrials, financials, asset backed, and commercial mortgage backed issues provide attractive opportunities to generate stable cash flow in the Fund.

¡ Curve positioning remains “barbelled” versus the benchmark, with an overweight in the 0-1 and 3-5 year duration buckets.

¡ The portfolio maintains close to a 4% exposure to high-yield bonds; the sub-advisor will continue to emphasize upgrade and take-out opportunities within the industrial sector.


FUND FACTS

PROFILE Q1 2018


CUIT Opportunistic Bond Fund

Objective Current income and long-term capital appreciation

InvestmentsU.S. government, agency, corporate, and mortgage-backed securities; primarily investment grade with no more than 20% of the portfolio rated below BBB; up to a 10% allocation to merger/arbitrage sector

StrategyUses top down macroeconomic analysis, along with fundamental industry and company research, to capture inefficiencies in the valuation of sectors and individual securities; this is combined with duration management (+/– 2.5 years of the benchmark) in pursuit of above-benchmark returns over a full market cycle

BenchmarkBloomberg Barclays 1-5 Year Government/Credit Index

Asset ManagersLongfellow Investment Management (Effective 5/1/13); Reams AssetManagement Co. (Effective 5/1/13)

Total Expense Ratio/MinimumClass A: 0.56% / No MinimumClass B: 0.41% / $5M




PORTFOLIO ANALYSIS




Average Quality A+ AA



# of Securities 347 2,847

Fund Size $471.8MM


FUND BENCHMARK

< 1 Year 15.4 2.9

1 - 3 Years 52.8 59.2

3 - 5 Years 27.8 37.9

5 - 7 Years 3.6 0.0

7 - 10 Years 0.4 0.0

10 - 20 Years 0.1 0.0

> 20 Years 0.0 0.0

CREDIT QUALITY %

FUND BENCHMARK

AAA 38.8 68.7

AA 5.1 6.0

A 19.1 13.0

BBB 25.0 12.2

Below BBB 4.2 0.0

Merger/Arbitrage 6.7 0.0

Cash 1.0 0.0

2%

1%

0%

-1%

CUIT Opport. Bond B Bloomberg Barclays 1-5 Yr Gov't/Credit

FUND PERFORMANCE


CUIT Opport. Bond A -0.53 0.72 1.25 – –

CUIT Opport. Bond B -0.50 0.87 1.40 – –

Bloomberg Barclays 1-5 Year Government/Credit -0.50 0.19 0.77 – –


CUIT Opport. Bond A 1.63 2.54 0.98 1.23 –

CUIT Opport. Bond B 1.78 2.69 1.23 1.27 –

Bloomberg Barclays 1-5 Year Government/Credit 1.27 1.56 0.97 1.42 –



*Allocations exclude M&A.

RISK METRICS









Important InformationBenchmark Index: Bloomberg Barclays 1–5 Year U.S. Govt/Credit Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS.


CUIT Opportunistic Bond Fund

ALLOCATIONS %

Treasuries Agency Industrials Finance Utilities Sovereign MBS CMO CMBS ABS MunicipalsMerger/

Arbitrage Cash

Fund 14.9 1.6 22.0 21.4 1.6 0.0 3.6 0.7 11.2 11.6 3.7 6.7 1.0

Benchmark 60.8 6.6 14.8 11.5 1.1 0.6 0.0 0.0 0.0 0.0 0.7 0.0 0.0

All attribution is based on gross portfolio performance.

Active Weights

-45.9%

Treasuries

-5.0%

Agency 3.6%

MBS

0.7%CMO

3.0%

Municipals

6.7%

M&A

1.0%

Cash

7.2%

Industrials

9.9%

Finance0.5%Utilies -0.6%

Sovereign11.2% 11.6%

CMBS ABS

FUND COMMENTARY

3-Month Review ¡ The Fund’s relatively shorter duration (2.5 vs. 2.7) was the main driver of excess returns as yields rose during the quarter.

¡ Curve positioning was neutral for the period.

¡ Security selection added modestly to offset the negative drag caused by key areas such as financials and industrials.

¡ The Fund’s merger and arbitrage sleeve lagged the index due to a difficult regulatory environment and concerns around the uncertain timeline for deal approvals.

12-Month Review ¡ Sector allocation was additive (+79 basis points), due to the Fund’s overweight in the outperforming securitized and corporate sectors.

An underweight to Treasuries also benefitted results.

¡ Over the period, the Fund’s relative shorter duration added 18 basis points to performance.

¡ Curve positioning benefitted due to longer relative to benchmark exposure 5+ years.

¡ Security selection was additive (+27 basis points) largely from strength among corporates; industrial issues contributed 17 basis points.

¡ The merger and arbitrage strategy outperformed the Index and was additive for the trailing 12-month period.

Positioning & Outlook ¡ The Fund continues to maintain shorter duration than the benchmark. Positioning remains defensive given the likelihood of continued Fed

tightening.

¡ The sub-advisor continues to emphasize corporates and securitized sectors with a corresponding underweight to Treasuries. Allocation to industrials, financials, ABS and CMBS remains near 70% of the Fund’s sector exposure.

¡ Curve positioning continues to overweight 0-1 year securities with a significant relative underweight to 3-5 year exposure.

¡ The Fund maintains approximately a 7% allocation to the merger and arbitrage strategy. The sub-advisor seeks to find pockets of opportunity in deals that have the most attractive risk/reward, but where there appears to be a defined path to close.


FUND FACTS

PROFILE Q1 2018

Christian Brothers Investment Services, Inc. (800)-592-8890 n [email protected]

CUIT Int. Diversified Bond Fund

Objective Current income and long-term capital appreciation

InvestmentsU.S. government, agency, corporate, and mortgage-backed securities; holdings are primarily investment grade (BBB to AAA, based on the three primary rating agencies)

StrategyUses top down macroeconomic analysis, along with fundamental research, to capture inefficiencies in the valuation of sectors and individual securities; combined with duration management (+/– 20% of the benchmark) in pursuit of above-benchmark returns over a full market cycle

BenchmarkBloomberg Barclays Aggregate Bond Index

Asset ManagersDodge & Cox, Inc. (Effective 1/1/95); Jennison Associates (Effective 9/2/02); Reams Asset Management Co. (Effective 7/1/08)

Total Expense Ratio/MinimumClass A: 0.53% / No MinimumClass B: 0.38% / $5M




PORTFOLIO ANALYSIS




Average Quality AA+ AA




Fund Size $1,239.5MM


FUND BENCHMARK

< 1 Year 8.2 1.1

1 - 3 Years 19.6 22.2

3 - 5 Years 29.3 28.9

5 - 7 Years 24.6 26.0

7 - 10 Years 6.4 7.4

10 - 20 Years 11.4 14.2

> 20 Years 0.4 0.2

CREDIT QUALITY %

FUND BENCHMARK

AAA 65.2 71.6

AA 4.2 3.8

A 11.0 11.2

BBB 16.2 13.3

Below BBB 2.4 0.0

Cash 1.2 0.0

6%

4%

2%

0%

-2%

CUIT Int. Divers. Bond B Bloomberg Barclays Aggregate Bond Index

FUND PERFORMANCE


CUIT Int. Divers. Bond A -1.24 1.30 1.25 1.85 4.31

CUIT Int. Divers. Bond B -1.13 1.52 1.43 2.02 4.47

Bloomberg Barclays Aggregate Bond Index -1.46 1.20 1.20 1.82 3.63


CUIT Int. Divers. Bond A 3.38 3.53 -0.13 5.65 -1.73

CUIT Int. Divers. Bond B 3.54 3.69 -0.05 5.81 -1.51

Bloomberg Barclays Aggregate Bond Index 3.54 2.65 0.55 5.97 -2.02



RISK METRICS










ALLOCATIONS %

Treasuries Agency Industrials Finance Utilities Supranational Sovereign MBS CMO CMBS ABS MunicipalsCovered Bonds

Merger Arbitrage Cash

Fund 41.0 0.7 16.2 13.9 1.7 0.0 0.0 18.8 1.0 1.9 2.5 1.2 0.0 0.0 1.2

Benchmark 37.2 3.3 15.4 8.1 1.8 1.6 1.0 28.2 0.0 1.9 0.5 1.0 0.1 0.0 0.0


Active Weights

3.8%

Treasuries

-2.6%

0.8%Agency

-1.0%

Sovereign

-9.4%

MBS

2.0%

0.2%1.2%

0.0%ABS Municipals CashMerger

Arbitrage

CoveredBonds

Industrials

5.8%

Finance -0.1% -0.1%

Utilies

-1.6%

Supranational 1.0%CMO

0.0%CMBS

Christian Brothers Investment Services, Inc. n [email protected] PAGE 3 | CB -FFS-000-0000


Important InformationBenchmark Index: Bloomberg Barclays Aggregate Bond Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS.



FUND COMMENTARY

3-Month Review ¡ The Fund’s duration positioning, shorter than the benchmark, was the largest contributor to outperformance for the quarter (+24 basis points).

¡ Curve positioning was a neutral as the curve shifted in parallel for the quarter.

¡ Sector allocation was slightly negative (-3 basis points), primarily due to the 4.1% bank sector overweight.

¡ Security selection was positive (+10 basis points) for the quarter. Corporate names in the industrial and financial sectors were the primary drivers.

12-Month Review

¡ The Fund’s shorter than benchmark duration positioning was positive (+49 basis points). Over the period, the Fund’s duration modestly increased from 5.4 years to 5.7 years.

¡ Curve positioning was a slight negative due to a flattening with no change to the 30-year.

¡ Sector exposure was additive (+8 basis points), largely due the Fund’s 6.2% overweight to corporates.

¡ Security selection was a slight detractor (-5 basis points) due primarily to Treasuries and agencies and offset by corporates and government related.


¡ The Fund’s sub-advisors are all in a defensive mode due to historically tight spreads and a lack of volatility. They are poised to take advantage of opportunities as they emerge.

¡ The Fund’s effective duration continues to be slightly below benchmark (5.7 vs 6.0 years) as the sub-advisors expectations of continued Fed rate increases and improved economic conditions continue.

¡ The Fund’s curve positioning remains similar to last quarter with an overweight to 0-3 year securities and a slight underweight to 10+ years. During the quarter the sub-advisors increased 5-7 year maturity holdings by about 7% due to relative valuation opportunities.

¡ The Fund’s sector allocation remains similar to the previous quarter end. Overweight sectors are Treasuries (+5%) and corporates (+5%), primarily in Bank names. The largest underweight position is the mortgage backed securities sector (-8%).



FUND FACTS

PROFILE Q1 2018


CUIT Balanced Fund

Objective Long-term capital appreciation and current income

InvestmentsThe equity allocation is comprised primarily of large-cap U.S. companies diversified across industry sectors. Fixed-income instruments include corporate, U.S. government and agency bonds, and asset-backed and mortgage-backed securities.

StrategyThe equity portion blends undervalued companies with a modest exposure to growth through a core equity index allocation. The fixed-income portion leverages economic and fundamental research in an attempt to identify and capture inefficiencies across the yield curve.

Benchmark60% S&P 500 Index / 40% Bloomberg Barclays Aggregate Bond Index

Asset ManagersFixed Income: Dodge & Cox, Inc. (Effective 4/1/91); Jennison Associates(Effective 9/2/02); Reams Asset Management Co. (Effective 7/1/08)

Equities: Dodge & Cox, Inc. – (Effective 4/1/91); RhumbLine Advisers – (Effective 4/1/02)





PORTFOLIO ANALYSIS

STATISTICS FUND S&P 500

Weighted Median Market Cap $70.3B $100.5B

Price/Book 2.3x 3.1x

Price/Earnings 17.4x 21.4x

Return on Equity 16.2% 19.8%

Dividend Yield 1.6% 1.9%

5-year Earnings Growth 8.7% 9.5%

Beta 1.0 1.0

10 Largest Holdings 27.6 11.7

# of Equity Securities 474 507

Fund Size $230.3MM

TOP TEN HOLDINGS

STATISTICS %

Microsoft Corporation 3.4

Alphabet Inc. 3.2

Bank of America Corporation 3.1

Charles Schwab Corporation 3.0

Wells Fargo & Company 2.8

Capital One Financial Corporation 2.8

JPMorgan Chase & Co. 2.5

Comcast Corporation 2.3

Twenty-First Century Fox, Inc. 2.3

Goldman Sachs Group, Inc. 2.2

PORTFOLIO ANALYSIS: FIXED INCOME

STATISTICS FUND BBAgg

Average Maturity 7.8 8.3

Effective Duration (years) 5.7 6.0

Average Quality AA AA




EFFECTIVE DURATION FUND BBAgg

< 1 Year 6.1 1.1

1 - 3 Years 20.8 22.2

3 - 5 Years 31.0 28.9

5 - 7 Years 24.4 26.0

7 - 10 Years 6.2 7.4

10 - 20 Years 11.1 14.2

> 20 Years 0.4 0.2

18%

10%

8%

6%

4%

2%

0%

-2%

CUIT Balanced Fund 60% S&P 500 / 40% BB Agg

FUND PERFORMANCE

% AVERAGE ANNUAL RETURN 3 MO 1 YR 3 YR 5 YR 10 YR

CUIT Balanced -0.87 8.68 7.08 8.62 7.50

60% S&P 500 Index / 40% Bloomberg Barclays Aggregate Bond -0.92 8.89 7.10 8.81 7.52


CUIT Balanced 13.08 12.05 -2.33 8.80 21.29

60% S&P 500 Index / 40% Bloomberg Barclays Aggregate Bond 14.25 8.31 1.28 10.62 17.56




CUIT Balanced Fund

MARKET SECTOR ANALYSIS % – EQUITY

ConsumerDiscretionary

ConsumerStaples Energy Financials Healthcare Industrials

InformationTechnology Materials Real Estate

Telecomm Service Utilities Cash

Fund 16.7 2.5 7.6 26.0 9.4 7.3 22.4 2.0 1.1 1.8 1.0 2.2

Benchmark 12.7 7.7 5.7 14.8 13.7 10.2 24.8 2.8 2.8 1.9 2.8 0.0


Active Weights

4.0%

1.9%

11.2%

ConsumerDiscretionary

Energy Energy

-5.2%

ConsumerStaples

-2.9% -2.4%-1.7% -1.8%

-0.1%-0.8%

IndustrialsInformationTechnology Real Estate Real Estate

TelecommServiceMaterials

2.2%

Cash

-4.3%

Healthcare

MARKET SECTOR ANALYSIS % – FIXED INCOME

Treasuries Agency Industrials Finance Utilities Supranational Sovereign MBS CMO CMBS ABS MunicipalsCovered Bonds

Merger Arbitrage Cash

Fund 41.8 0.6 15.4 12.5 1.6 0.0 0.0 19.5 0.9 1.7 3.0 0.8 0.0 0.0 2.2

Benchmark 37.2 3.3 15.4 8.1 1.8 1.6 1.0 28.2 0.0 1.9 0.5 1.0 0.1 0.0 0.0

Industrials


Active Weights

4.6%

Treasuries

-2.7%

0.0%Agency

-1.0%

-8.7%

Sovereign MBS

2.5%2.2%

0.0%ABS

Municipals

CashMergerArbitrage

CoveredBonds

4.4%

Finance -0.2% -0.2%-0.2% -0.1%

Utilies

-1.6%

Supranational 0.9%CMO

CMBS

Christian Brothers Investment Services, Inc. n [email protected] PAGE 3 | CB -FFS-000-0000

Important InformationBenchmark Index: The Fund’s benchmark was changed to 60% S&P 500 Index / 40% Bloomberg Barclays Aggregate effective January 2, 2003. For prior periods, the applicable benchmark was 60% S&P 500 Index / 30% LB Aggregate / 10% T-Bill. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI"), and has been licensed for use by CBIS. Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by CBIS. The CUIT Core Equity Index Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.



FUND COMMENTARY

3-Month Review ¡ The equity component of the Fund trailed the S&P 500 by a small amount (-32 basis points); the fixed income composite finished ahead of the

Barclays U.S. Aggregate index.

¡ The style tilt of the equity component detracted as value oriented sub-advisor Dodge & Cox did not keep pace with the S&P 500, although it was well ahead of the Russell 1000 Value. This was the case in Q1 and has been for much of the past five years.

¡ Overall stock selection results were weakest in consumer discretionary (media & retail), financials, and healthcare.

¡ The Fund’s fixed income duration positioning, shorter than the benchmark, was the largest contributor to outperformance for the quarter (+24 basis points).

12-Month Review

¡ The Fund underperformed the index over the trailing 12-month period primarily because of the value tilt of the equity allocation and weak stock selection (combined -83 basis points). The fixed income component added value.

¡ The largest negatives for relative performance were media holdings in the consumer discretionary sector of the Dodge & Cox portfolio. The passive index strategy outperformed, driven by the absence of industrial conglomerate GE and several weak performing pharmaceutical stocks.

¡ The fixed income segment’s shorter than benchmark duration positioning was positive (+45 basis points). Over the period, the Fund’s duration modestly increased from 5.5 to 5.7 years.


¡ The Fund maintains a value tilt within the equity allocation. This has hindered relative performance in the short term, but is generally beneficial over longer time periods.

¡ Within the equity portfolio, the Fund is overweight financials, consumer discretionary (predominately media companies), and energy.

¡ The equity portfolio is underweight consumer staples (predominately tobacco), industrials, healthcare, information technology, utilities, and real estate.

¡ The Fund’s fixed income sub-advisors are all in a defensive mode due to historically tight spreads and a lack of volatility. They are poised to take advantage of opportunities as they emerge.

¡ The Fund’s effective duration continues to be slightly below benchmark (5.7 vs 6.0 years) as the sub-advisors expectations of continued Fed rate increases and improved economic conditions continue.

CUIT Balanced Fund



FUND FACTS

PROFILE Q1 2018


CUIT Core Equity Index Fund

Objective Long-term capital appreciation

InvestmentsCommon stocks of companies that make up the S&P 500, except those excluded as a result of CBIS’ screens (about 6% of the S&P 500's constituent companies – all unscreened companies are held at their index weight or higher)

StrategyTrack the S&P 500 and counter the impact of screens by overweighting select holdings so that the Fund's broadquantitative characteristics match those of the S&P 500 as closely as possible

BenchmarkS&P 500 Index

Asset ManagersRhumbLine Advisers (Effective 1/1/95)

Total Expense Ratio / Minimum Class A: 0.38% / No MinimumClass B: 0.18% / $3M



Dividends Distributed Quarterly

PORTFOLIO ANALYSIS








Beta 1.0 1.0

Active Share 14.9 0



Fund Size $1,847.2MM

TOP TEN HOLDINGS

STATISTICS %

Apple Inc. 3.9


Alphabet Inc. 3.0

Amazon.com, Inc. 2.6

Berkshire Hathaway Inc. 2.6

Facebook, Inc. 1.8


Exxon Mobil Corporation 1.5


3M Company 1.2

20%

15%

10%

5%

0%

-5%

CUIT Core Equity B S&P 500 Index

RISK METRICSCHARACTERISTICS FUND / 5 YR BENCHMARK / 5 YR







FUND PERFORMANCE


CUIT Core Equity A -0.70 14.87 10.49 13.10 9.08

CUIT Core Equity B -0.63 15.12 10.72 13.32 9.30

S&P 500 Index -0.76 13.99 10.78 13.31 9.49


CUIT Core Equity A 22.64 11.27 0.29 13.99 32.03

CUIT Core Equity B 22.87 11.51 0.50 14.19 32.31

S&P 500 Index 21.83 11.96 1.38 13.69 32.39

Please see Important Information on Page 2 The Fund’s benchmark was changed to the Bloomberg Barclays 1-3 Year Treasury Index effective July 1, 2016. For periods prior to July 1, 2016, the applicable benchmarks were: ML 1-3 Yr Treasury Index effective 7/1/01.




MARKET SECTOR ANALYSIS %


Consumer Staples Energy Financials Healthcare Industrials

Information Technology Materials Real Estate

TelecommService Utilities Cash

Fund 12.9 7.5 5.7 15.6 11.7 9.0 25.4 3.2 3.3 2.0 3.0 0.7

Benchmark 12.7 7.7 5.7 14.8 13.7 10.2 24.8 2.8 2.8 1.9 2.8 0.0


Active Weights0.2% 0.4% 0.2%

-0.2%0.0%

0.6% 0.7%0.8%

-1.2%-2.0%

0.5%0.1%


InformationTechnology

Materials Cash

ConsumerStaples

Energy Financials

Healthcare Industrials

RealEstate

TelecommService

Utilities


Important InformationBenchmark Index: S&P 500 Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI"), and has been licensed for use by CBIS. Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by CBIS. The CUIT Core Equity Index Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.



FUND COMMENTARY

3-Month Review ¡ The Fund was slightly overweight in the best performing information technology sector, adding 3 basis points to relative return in the quarter.

¡ Pharmaceutical companies had returns averaging -3.0% in Q1. The Fund did not hold most of those companies and redeployed assets into much stronger performing biotech stocks, adding 30 basis points in the quarter.

¡ Tobacco screens by themselves added 9 basis points; however, re-weighting into other industries within consumer staples offset much of that gain.

¡ Aerospace and defense company screens hindered relative performance in the quarter, as those stocks had 8.2% average gains. The restriction on GE added 14 basis points in the quarter. In total the relative performance impact was -16 basis points for the industrials sector.

¡ There were no significant performance differentials in the remaining sectors.

12-Month Review

¡ The largest contributors to the Fund’s outperformance in the 12-month period were noted in healthcare and industrials holdings.

¡ In healthcare, the large underweight in pharmaceuticals, together with the specific performance of the Fund’s pharma holdings added more than 70 basis points in relative return. Some of that gain (approximately 20 basis points) was offset by the subsequent re-weighting into weaker performing biotech stocks.

¡ The industrials sector was additive (+42 basis points) over the past 12 months. Due to screening GE, which returned -53% during the period, the Fund gained nearly 80 basis points.

¡ Also within industrials, aerospace and defense screens subtracted 55 basis points from relative return.

¡ Tobacco screens were additive (+~30 basis points); the total impact within consumer staples was added 12 basis points.


¡ The Fund is structurally underweight pharmaceuticals (healthcare sector), aerospace and defense and a large conglomerate (industrials sector) and tobacco (consumer staples sector) due to Catholic Responsible InvestingSM screens.

¡ Screened companies represent about 14% of the S&P 500 by market cap.

¡ The Fund is constructed using a portfolio optimization process that aligns the portfolio’s factor exposures as closely as possible with those of its benchmark, using a range of fundamental security and industry factors, while also minimizing specific risk by constraining individual security weights to their Index weights or slightly higher. In so doing it seeks to minimize tracking error, while also constraining trading costs.


FUND FACTS

PROFILE Q1 2018


CUIT Value Equity Fund


InvestmentsPrimarily the common stocks of U.S. companies, and the dollar denominated stocks of foreign companies, with market capitalizations greater than $1 billion

StrategyCombines complementary value strategies – one seeks undervalued securities using fundamental research, emphasizing industry-leaders with a medium to long-term investment horizon; the other seeks undervalued securities using a quantitative model to analyze asset values, earnings, and other factors

BenchmarkRussell 1000 Value Index

Asset ManagersDodge & Cox (Effective 2/1/00) AJO (Effective 4/1/02)




Dividends Distributed Quarterly

TOP TEN HOLDINGS

STATISTICS %




Charles Schwab Corporation 2.4

Capital One Financial Corporation 2.2

Wells Fargo & Company 1.8

Cigna Corporation 1.8

Twenty-First Century Fox, Inc. 1.7

Hewlett Packard Enterprise Company 1.7

Goldman Sachs Group, Inc. 1.7

PORTFOLIO ANALYSIS








Beta 1.1 1.0

Active Share 69.8 N/A



Turnover Rate 47.0 N/A

Fund Size $338.8MM









20%

10%

0%

-10%

CUIT Value Equity B Russell 1000 Value Index

FUND PERFORMANCE


CUIT Value Equity A -2.01 10.96 7.87 11.07 8.17

CUIT Value Equity B -1.92 11.36 8.25 11.46 8.55

Russell 1000 Value Index -2.83 6.95 7.88 10.78 7.78


CUIT Value Equity A 16.53 13.98 -3.58 9.57 38.32

CUIT Value Equity B 16.96 14.41 -3.26 9.97 38.80

Russell 1000 Value Index 13.66 17.34 -3.83 13.45 32.53





Active Weights

6.3%

-4.6%

-0.9%

-2.9%

-0.6%

2.0%

6.5%

-0.4% -0.9%

-3.5

1.5%

-2.6%



Materials

Cash

Real EstateConsumer

Staples Energy

Financials

Healthcare IndustrialsTelecomm

Service Utilities






Fund 13.1 3.5 9.8 29.1 10.7 7.6 15.8 2.5 2.0 2.0 2.4 1.5

Benchmark 6.8 8.1 10.7 27.1 13.6 8.2 9.3 2.9 4.6 2.9 5.9 0.0


Important InformationBenchmark Index: Russell 1000 Value Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the indices may be obtained from our provider or CBIS.



FUND COMMENTARY

3-Month Review ¡ Sector allocation bets, driven primarily by sub-advisor Dodge & Cox, drove most of the Q1 performance differential.

¡ The largest sector impacts were the overweight in information technology (+55 basis points) and underweights in consumer staples and real estate (+36 basis points).

¡ Stock selection results within the Fund were neutral to the benchmark during the quarter as AJO’s gains were offset by Dodge’s deficit in relative terms. AJO also marginally gained from sector weightings.

¡ In aggregate, both sub-advisors outperformed the Russell 1000 Value. Dodge’s outperformance was driven by their sector decisions; AJO’s gains were a result of strong stock selection within sectors, especially in healthcare and real estate.

12-Month Review¡ Both sub-advisors generated returns that were almost identical and outperformed the benchmark over the 12-month period, though they did so in

very different ways.

¡ The total relative performance impact was equally split between sector allocation and stock selection. Dodge’s gain came almost exclusively via the sector weights, while AJO is sector neutral and generates alpha through stock selection within each sector.

¡ For the Fund, sector impacts were positive in all 11 sectors, led by information technology (+99 basis points), consumer staples (+44 basis points), and real estate (+30 basis points) – just as in the most recent quarter.

¡ Positive stock selection results were concentrated in four components: healthcare, staples, industrials, and information technology. The Fund’s healthcare providers and service company holdings generated returns exceeding 17%.

¡ Food and staples retailer holdings returns were 32.7% over the period, adding 64 basis points.

Positioning & Outlook¡ The Fund enters Q2 with its largest overweights in information technology (+6.5% vs. the Index, mostly in software and services) and in consumer

discretionary (+6.3%). Financial stocks comprise 29% of the holdings, +2% versus the Russell 1000 Value.

¡ To compensate for the overages, the Fund’s allocations are underweight in consumer staples (-4.6% vs. the Index, primarily food, tobacco, and household products); healthcare (-2.9%); utilities (-2.5%), and real estate (-2.6%). Other sector differences are modest.

¡ The Fund has 174 securities; its weighted average market cap and the trailing 12-month P/E ratio (15.1 vs. 17.0) are both lower than the Index.

¡ The three largest individual overweights are Microsoft (+2.4%), Charles Schwab (+2.3%) and Capital One Financial (+1.8%). The largest underweights are Berkshire Hathaway (-3.1%), Johnson & Johnson (-2.4%, screened holding), and Intel (-2.0%).


FUND FACTS

PROFILE Q1 2018


CUIT Growth Fund


InvestmentsCommon stocks of U.S. companies and the dollar-denominated stocks of foreign companies with market capitalizations above $500 million

StrategyFocus on mid- and large-cap stocks that exhibit sustainable, above- average earnings growth; blends a quantitative manager that seeks to identify key investment risks and capture alpha through dynamic modeling with a bottom-up fundamental manager to deliver a portfolio with balanced growth, valuation, and quality attributes

BenchmarkRussell 1000 Growth Index

Asset ManagersWellington Management (Effective 12/31/04)Los Angeles Capital Management (Effective 4/1/09)




30%25%20%15%10%

5%

0%

CUIT Growth B Russell 1000 Growth Index



Information Ratio -0.1 N/A





FUND PERFORMANCE


CUIT Growth A 1.68 18.31 11.18 13.97 9.65

CUIT Growth B 1.74 18.66 11.52 14.33 9.98

Russell 1000 Growth Index 1.42 21.25 12.90 17.33 11.34


CUIT Growth A 25.38 5.37 5.29 11.65 32.92

CUIT Growth B 25.77 5.69 5.63 12.06 33.31

Russell 1000 Growth Index 30.21 7.08 5.67 13.05 33.49



PORTFOLIO ANALYSIS








Beta 1.1 1.0

Active Share 45.8 N/A




Fund Size $309.8MM

TOP TEN HOLDINGS

STATISTICS %


Apple Inc. 6.2

Alphabet Inc. 5.7

Amazon.com, Inc. 4.7

Facebook, Inc. 3.6

Home Depot, Inc. 2.3

Visa Inc. 2.3

Mastercard Incorporated 2.1

Caterpillar Inc. 1.3

Adobe Systems Incorporated 1.3


CUIT Growth Fund


Active Weights

-3.8%-4.7%

1.6%2.3%

-2.8%

-1.1% -0.9%-1.6%

11.4%

-1.0%

0.0% 0.4%Consumer Discretionary


Materials

Cash

ConsumerStaples

Energy Financials Healthcare

Industrials Real EstateTelecomm

Service

Utilities






Fund 14.8 1.7 2.4 5.8 9.7 11.6 50.1 2.5 0.8 0.0 0.0 0.4

Benchmark 18.6 6.4 0.8 3.5 12.5 12.7 38.7 3.5 2.4 0.9 0.0 0.0


Important InformationBenchmark Index: The Fund’s benchmark was changed to the Russell 1000 Growth Index effective June 1, 2000. For prior periods, the benchmark was the Russell Mid-Cap Growth Index. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS.


CUIT Growth Fund

FUND COMMENTARY

3-Month Review ¡ The Fund’s outperformance in Q1 was primarily due to its overweight in the information technology sector (+19 basis points) and underweight in

consumer staples (+31 basis points).

¡ The performance impacts of other sector imbalances were relatively small and offset one another.

¡ The composite impact of stock selection within sectors was also small but positive. Sub-advisor Wellington did particularly well in information technology (+66 basis points), holding software and services stocks that outperformed the overall market.

¡ The underweight in pharmaceuticals was beneficial, but the positive results among biotech holdings were even larger.

¡ On the downside, the lack of aerospace and defense companies and overweight in construction machinery detracted.

12-Month Review

¡ Wellington managed to stay ahead of the index, but the shortfall from LA Capital’s stock selection models dominated the net returns.

¡ The three strongest sectors in the market – information technology, industrials, and financials – each registered gains exceeding 25% over the past 12 months for an average return of 28.3%. The Fund’s average return in those sectors was 24.7%. This differential explains more than 200 basis points of negative relative performance for the 12-month period.

¡ After performing very well in 2016 and previously, LA Capital’s quantitative models had difficulty adapting to several shifts in market sentiment in 2017 and Q1 2018, particularly in the growth versus valuation factors.


¡ The CUIT Growth Fund has 256 securities with a weighted average market cap above $240 billion, slightly higher than the benchmark’s market cap.

¡ The Fund has 50.1% of its holdings in the information technology sector, compared to 38.7% for the Russell 1000 Growth index. Secondary overweights remain in financials (+2.3%) and energy (+1.6%).

¡ To compensate, the underweights are largest in consumer staples (-4.7%), consumer discretionary (-3.6%), and healthcare (-2.8%).

¡ Both sub-advisors expect to add value primarily through specific stock selection analytics and research, though they do so in different ways. We expect relative performance to improve when evaluated over a complete market cycle.

¡ Largest active positions are Cummins (+1.1%), Microsoft (+1.1%), and Alphabet (+0.9%). Largest under-weights were United Health Group (-1.6%), Boeing (-1.4%), and AbbVie (-1.2%), all screened holdings.


FUND FACTS

PROFILE Q1 2018


CUIT Small Cap Equity Index Fund

Objective Long-term capital appreciation by attempting to replicate the performance of the S&P SmallCap 600, a commonly used index of domestic small-capitaliza-tion stocks

InvestmentsCommon stocks of companies that generally comprise the S&P SmallCap 600

StrategyClosely track the benchmark Index, while seeking replacements for screened stocks among companies with similar market capitalizations in the same or a related industry

BenchmarkS&P SmallCap 600 Index

Asset ManagersRhumbLine Advisers (Effective 1/07)




20%

15%

10%

5%

0%

CUIT Small Cap B S&P SmallCap 600 Index








FUND PERFORMANCE


CUIT Small Cap Equity Index A 0.56 12.62 8.27 11.18 9.47

CUIT Small Cap Equity Index B 0.63 12.97 8.58 11.50 9.79

S&P SmallCap 600 Index 0.57 13.09 8.80 11.72 9.97


CUIT Small Cap Equity Index A 14.43 20.60 -4.75 4.46 38.05

CUIT Small Cap Equity Index B 14.81 20.97 -4.53 4.81 38.38

S&P SmallCap 600 Index 15.22 21.31 -4.41 4.90 38.82

The Fund’s benchmark was changed to the S&P SmallCap 600 Index effective November 1, 2017. For periods prior to November 1, 2017, the benchmark was the Russell 2000 Index. Please see Important Information on Page 2.


PORTFOLIO ANALYSIS








Beta 1.0 1.0

Active Share 5.6 0

10 Largest Holdings 5.1% 5.1%



Fund Size $353.2MM

TOP TEN HOLDINGS

STATISTICS %

Chemed Corporation 0.6

Five Below, Inc. 0.5

ASGN Inc 0.5

Lumentum Holdings, Inc. 0.5

Haemonetics Corporation 0.5

FirstCash, Inc. 0.5

CACI International Inc 0.5

John Bean Technologies Corporation 0.5

Selective Insurance Group, Inc. 0.5

Integra LifeSciences Holdings Corporation 0.5









Fund 15.0 2.9 3.3 17.0 12.6 19.3 15.5 5.2 5.6 1.0 2.2 0.3

Benchmark 14.6 2.5 3.1 16.8 15.3 19.0 14.7 5.1 5.2 1.0 2.6 0.0

EnergyActive Weights

0.4% 0.4% 0.4% 0.3%

0.8%

0.0%0.2% 0.2%

0.3% 0.1% -0.4%Consumer

Discretionary

InformationTechnology Materials

CashConsumerStaples

FinancialsHealthcare Industrials

TelecommService

Real EstateUtilities

-2.7%


Important InformationBenchmark Index: The Fund’s benchmark was changed to the S&P SmallCap 600 Index effective November 1, 2017. For periods prior to November 1, 2017, the benchmark was the Russell 2000 Index. Performance for periods of one year and longer are annualized. Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS.

The S&P SmallCap 600 Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI"), and has been licensed for use by CBIS. Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by CBIS. The CUIT Small Capitalization Equity Index Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P SmallCap 600 Index.



FUND COMMENTARY

3-Month Review ¡ The large number of Fund holdings and small weight of restrictions (under 2% of Index weight) generally result in little performance impact from

screens; this was the case again in Q1.

¡ While the overall market in the S&P SmallCap 600 universe was mostly flat for the quarter, the disparity among sectors was unusually large. Healthcare returns averaged +14% in Q1; financials, information technology, consumer discretionary and Industrial stock returns were close to zero; utilities, consumer staples, real estate and energy stocks ranged between -5% and -10%.

¡ U.S. small cap stocks outperformed large cap in Q1 but remain slightly behind on a trailing 1-year basis. Over the 3- and 5-year periods, large cap returns are still 150-200 basis points ahead of small cap on an annualized basis.

12-Month Review

¡ The impact on performance from Catholic Responsible InvestingSM screens within the Fund was minimal over the 12-month period.

¡ Healthcare returns were also very robust among small cap companies over the trailing 1-year period, averaging 41% within the linked benchmark index.

¡ Industrials gained 18%; consumer discretionary stocks increased nearly 14%; and financials were up 12%.

¡ Consumer staples and real estate stocks declined by roughly 5%, and energy companies lost 19% of their market values on average over the past 12 months.


¡ The Fund screens select pharmaceutical, aerospace ans defense, and tobacco benchmark constituents. A few companies in other industries are also restricted due to CBIS’ Catholic Responsible InvestingSM criteria.

¡ Screened companies represent less than 2% of the S&P SmallCap 600 Index by market cap.

¡ The sub-advisor constructs the portfolio using an optimization process that aligns the portfolio’s factor exposures as closely as possible with those of its benchmark. In so doing it seeks to minimize tracking error, while also constraining trading costs. Due in part to the small weight of screened names, this creates very close to a fully replicated portfolio.

¡ Generally speaking, the Fund owns most Index constituents at their index weight, along with a subset of the very smallest constituents to help round up the Fund’s industry weights at or very close to their Index weights.


FUND FACTS

PROFILE Q1 2018


CUIT International Equity Fund


InvestmentsBroad mix of mostly large and mid cap equities chosen from a universe that incorporates 22 Developed Market countries and 23 Emerging Market countries; up to 30% of the portfolio may be invested in emerging markets

Strategy Combines three managers with complementary growth and value oriented investment processes to produce highly competitive risk adjusted returns.

BenchmarkMSCI All Country World Index ex-U.S.

Asset ManagersCauseway Capital (Effective 2/1/05) Principal Global (Effective 5/18/07)WCM (Effective 9/23/15)

Total Expense Ratio / Minimum Class A: 1.40% / No minimumClass B: 0.98% / $5M




CUIT International Equity A -0.88 19.15 7.74 7.65 2.93

CUIT International Equity B -0.79 19.64 8.17 8.09 3.35

MSCI ACWI ex-U.S. -1.08 17.05 6.74 7.40 3.43


CUIT International Equity A 30.47 2.35 -2.82 -5.11 22.03

CUIT International Equity B 31.04 2.75 -2.45 -4.72 22.49

MSCI ACWI ex-U.S. 27.77 5.01 -3.81 -4.49 23.30

The Fund’s benchmark was changed to MSCI ACWI ex-U.S. effective June 1, 2015. The benchmark performance shown in this presentation reflects the linked performance of the prior benchmark (MSCI EAFE) through May 31, 2015 and MSCI ACWI ex-U.S. after June 1, 2015.








GEOGRAPHIC DISTRIBUTIONFUND BENCHMARK

United Kingdom 15.2 11.8

France 7.6 7.4

Italy 4.2 1.7

Germany 7.5 6.6

Japan 12.6 16.8

USA* 5.4 0.0

Canada 7.0 6.2

Other Europe 14.7 15.9

Developed Asia 3.5 8.0

Emeg. Mkts Asia 17.3 18.6

Other Emeg. Mkts 5.1 6.9

20%

10%

0%

-10%

CUIT International Equity B MSCI ACWI ex-U.S.

FUND PERFORMANCE


PORTFOLIO ANALYSIS








Beta 1.0 1.0

Active Share 74.3 0




Fund Size $845.9MM

TOP TEN HOLDINGS

STATISTICS %

Tencent Holdings Ltd. 2.7

Taiwan Semiconductor Manufacturing Co., Ltd. 2.2

Canadian Pacific Railway Limited 2.1

Keyence Corporation 1.8

Nestle S.A. 1.7

Volkswagen AG 1.7

LVMH Moet Hennessy Louis Vuitton SE 1.6

Samsung Electronics Co., Ltd. 1.4

Accenture plc 1.3

HDFC Bank Limited 1.3

*U.S. allocation includes ADRs and cash.








Fund 14.0 9.2 5.6 17.3 5.2 15.5 16.5 8.4 0.9 2.7 1.5 3.1

Benchmark 11.4 9.5 6.7 23.1 7.7 11.8 11.8 8.0 3.2 3.9 3.0 0.0


Active Weights

2.6%

-0.3%

0.4%

-1.1%

-5.8%

-2.5%

3.7%4.7%

-2.3%

-1.2% -1.5%

3.1%



Materials Cash

ConsumerStaples Energy Financials Healthcare

Industrials

Real EstateTelecomm

Service Utilities



Important InformationBenchmark Index: The Fund’s benchmark was changed to MSCI All Country World Index (ACWI) ex-U.S. effective June 1, 2015. For periods prior to June 1, 2015, the applicable benchmark was the Morgan Stanley Capital International Europe, Australia and the Far East Index (“EAFE”). Performance for periods of one year and longer are annualized. All Fund performance is reported net of any fees and expenses, but inclusive of dividends and interest. Past performance is not indicative of future performance. The return and principal value of the Fund will fluctuate, and upon redemption, shares in the Fund may be worth less than their original cost. The comparative index represents unmanaged or average returns on various financial assets which can be compared to the Fund’s total returns for the purpose of measuring relative performance, but is not necessarily intended to parallel the risk or investment approach of your investments. The index does not incur taxes or expenses but is inclusive of dividends and interest. Comparative index information is provided by BNY Mellon Bank; information regarding composition of the index may be obtained from our provider or CBIS.

Total Estimated Expense Ratio for Class B reflects the partial waiver of the Investment Management Fee so total expenses do not exceed 99 bps.


FUND COMMENTARY

3-Month Review ¡ Although small in magnitude, value was added through both sector weightings and stock selection in the quarter. The two growth-oriented

sub-advisors finished ahead of the benchmark; the value-focused manager trailed by 1.1%.

¡ The Fund’s largest sector overweight in information technology was beneficial (+~20 basis points) in relative terms, as the sector’s average returns of 1.90% were once again the best performing in the index. The other sector imbalances had minimal impact on relative return.

¡ Collectively, stock selection results for the sub-advisors were most productive in financials (led by diversified bank and multi-line insurance company holdings), healthcare, and information technology – for a total of approximately 70 basis points in added value.

¡ The only significant weakness was noted in food and beverage companies within consumer staples (-35 basis points in aggregate).

12-Month Review

¡ Outperformance for the 12-month period was driven by stock selection (75%) and by sector weighting differences versus the benchmark (25%).

¡ The Fund maintained an average 5% overweight in information technology stocks. Holdings gained 43.2% in the Fund and 34.6% in the Index. These allocation and selection decisions accounted for nearly half of the excess return.

¡ Small additional gains were realized through underweights in telecom, utilities, financials, and healthcare (+32 basis points combined), offsetting a portion of the performance drag from holding transactional cash in a strong up market.

¡ Stock selection results were strong in healthcare (avoiding poor performing pharma companies) and in financials (particularly bank stocks). Restricting tobacco stocks added roughly 35 basis points; but defense restrictions detracted marginally.


¡ The Fund’s holdings are 78% in developed countries and 22% in emerging markets. Relative to the index, the Fund is about 2% underweight in emerging markets.

¡ Within developed countries, the Fund is roughly 4% overweight in Europe (especially UK, Germany and Italy) and underweight in Japan (largest underweight) and other Asian countries.

¡ The Fund’s 361 holdings indicate a slight bias toward growth over value with a higher than market P/E ratio (15.9 vs 14.2). The weighted-average market cap is very close to the benchmark Index. The 5-year earnings growth rate is higher than market and the dividend yield is lower than average.

¡ Sector allocations remain similar to recent positioning with a significant underweight to financials (-5.8%) and smaller underweights in energy, healthcare, telecom, utilities, and real estate. The significant overweights are in information technology (+4.7%), industrials (+3.7%), and consumer discretionary (+2.6%).


CBIS’ offers a disciplined and comprehensive approach to Catholic Responsible InvestingSM

} CBIS pioneered Catholic Responsible Investingsm (CRI)and has more than 30 years of experience applying Catholic ethical and social teaching to the investing process.

} While socially responsible investing is often equated with stock screens, a truly effective Catholic Responsible InvestingSM program requires that we also act as responsible owners of companies to bring about a more just society. Our approach to Catholic socially responsible investing emphasizes direct engagement with companies to help improve their policies and practices.

} Catholic Responsible InvestingSM enables Catholic institutions to align their investments with their beliefs and effect real change in corporate activities with respect to human rights, the environment, and corporate governance.

} As an institutional investment firm, we believe that by encouraging strong corporate environmental, social and governance policies, we are helping support long-term performance and the potential growth of shareholder value.

TEL: 800-592-8890 EMAIL: [email protected]

PO Box 9683 Providence, RI 02940-9683

U.S. TEL: 800-321-7194 U.S. FAX: 844-261-6489

NON-U.S. TEL: 508-871-9942 NON-U.S. FAX: 508-599-4183

Via Aurelia, 476 CP 9099 00165 ROMA-ITALIA

TEL: (39) 06 66 01 72 18 FAX: (39) 06 663 88 21

CHICAGO, IL 20 North Wacker Drive, Suite 2000 Chicago, IL 60606-3002

TEL: 877-550-2247 312-803-6440 FAX: 312-803-6441

NEW YORK, NY 777 Third Avenue, 29th Floor, New York NY 10017-1401

TEL: 800-592-8890 212-490-0800 FAX: 212-490-6092

SAN FRANCISCO, CA One Embarcadero Center, Suite 500 San Francisco, CA 94111

TEL: 800-754-8177 415-623-2080 FAX: 415-623-2070

CBIS REGIONAL OFFICES

CBIS REGIONAL TEAMS

TO LEARN MORE ABOUT CBIS CBIS ACCOUNT SERVICES CBIS GLOBAL ROME SERVICE CENTRE


CENTRAL

Daniel T. Hynes Managing Director – Relationship Management DIRECT: (312) 803-4722 EMAIL: [email protected]

Michael A. Nagy Managing Director – Investor and Consultant Relations DIRECT: (312) 803-4732 EMAIL: [email protected]

Thomas R. Kelly, CFA® Director – Investment Concierge DIRECT: (312) 803-4710 EMAIL: [email protected]

EAST

Mark F. Degenhart, Sr. Managing Director – Relationship Management DIRECT: (212) 503-1934 EMAIL: [email protected]

Sean P. McCaffrey, CAIA Managing Director – Investor & Consultant Relations DIRECT: (212) 503-1913 EMAIL: [email protected]

Jelena Milinkovic, CFA® Managing Director – Investment Concierge DIRECT: (212) 503-1970 EMAIL: [email protected]

WEST

Thomas D. Matty Managing Director - Relationship Management DIRECT: (415) 315-1594 EMAIL: [email protected]

David A. Schwarzenberger, CFA® Managing Director – Investor & Consultant Relations DIRECT: (415) 623-2089 EMAIL: [email protected]

Elizabeth J. Vella Director – Investment Concierge DIRECT: (415) 623-2083 EMAIL: [email protected]



Important Disclosures+ The CUIT Money Market Fund changed its investment approach from overnight repurchase agreements, to actively managed effective 8/1/01. ± Effective April 1, 2017, the benchmark for the CUIT Money Market Fund was changed to the Bloomberg Barclays U.S. Short Treasury Bills (1-3 Month) Index. For periods prior to April 1, 2017, the applicable benchmark was the Merrill Lynch 91-Day Treasury Bill Index. ** Effective July 1, 2016, the benchmark for the CUIT Short Bond Fund (SBF) was changed to the Bloomberg Barclays 1-3 Year Treasury Index. For periods prior to July 1, 2016, the applicable benchmarks were: ML 1-3 Yr Treasury Index effective 7/1/01; ML 1-5 Yr G/C Index effective 4/1/98; 50% LB Intermediate Government /50% LB 1-3 Yr Government effective 5/1/96; LB 1-3 Yr Government in prior periods. The benchmark performance shown for SBF in this presentation reflects the linked performance of these benchmarks for each applicable period. *** Effective January 2, 2003, the benchmark for the CUIT Balanced Fund was changed to 60% S&P 500/40% Bloomberg Barclays Aggregate. For prior periods, the applicable benchmark was 60% S&P 500/30% LB Aggregate/10% T Bill. **** Effective June 1, 2000, the benchmark was changed to the Russell 1000 Growth Index; prior to this date, historical returns reflect Russell Mid-Cap Growth Index. ‡ Effective June 1, 2015, the benchmark for the International Fund was changed to the Morgan Stanley Capital International All Country World ex U.S. Index (“ACWI ex U.S.”). For periods prior to June 1, 2015, the applicable benchmark was the Morgan Stanley Capital International Europe, Australia and the Far East Index (“EAFE”). The benchmark performance shown in this presentation reflects the linked performance of the two benchmarks for the respective applicable periods.

All data sourced from FactSet unless otherwise noted. FactSet returns can vary from other sources due to different methodologies. Active share is defined as the sum of the absolute value of the differences between the weights of the securities in a portfolio and the weights of securities in the fund’s benchmark, divided by two.

The CUIT Money Market Fund is not guaranteed by the U.S. Government and there can be no assurance that a stable net asset value of $1.00 can be maintained.

The comparative indices represent unmanaged or average returns on various financial assets which can be compared to the Funds’ total returns for the purpose of measuring relative performance, but are not necessarily intended to parallel the risk or investment approach of your investments. The indices do not incur taxes or expenses but are inclusive of dividends and interest. Comparative index information is provided by certain third parties; information regarding composition of indexes may be obtained from provider or CBIS.

The CUIT Funds are exempt from registration with the Securities and Exchange Commission and therefore are exempt from certain regulatory requirements applicable to registered mutual funds. Performance for periods of one year and longer are annualized. All Fund performance, except where otherwise noted, is reported net of any fees and expenses, but inclusive of dividends and interest. The return and principal value of the Funds will fluctuate and, upon redemption, shares in the Funds may be worth less than their original cost. Past performance is not indicative of future performance.

CBIS offers pooled funds on behalf of a not-for-profit investment trust, Catholic United Investment Trust (CUIT). Offering Memoranda / Disclosure Statements, which contain further information regarding each of the Funds, including certain restrictions regarding redemptions, are available by calling 800-592-8890. Such information should be carefully considered prior to investing in the Funds. Shares in the CUIT Funds are offered exclusively through CBIS Financial Services, Inc., a broker-dealer subsidiary of CBIS.

The S&P 500 Index and S&P SmallCap 600 Index are products of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and have been licensed for use by CBIS. Standard & Poor’s®, S&P®, S&P 500® and S&P SmallCap 600® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). The trademarks have been licensed to SPDJI and have been sublicensed for use for certain purposes by CBIS. The CUIT Core Equity Fund and the CUIT Small Cap Equity Index Fund are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of the CUIT Core Equity Fund, the CUIT Small Cap Equity Index Fund, or any member of the public regarding the advisability of investing in securities generally or in the CUIT Core Equity Fund or the CUIT Small Cap Equity Index Fund particularly or the ability of the S&P 500 Index and S&P SmallCap 600 Index to track general market performance. S&P Dow Jones Indices’ only relationship to CBIS with respect to the S&P 500 Index and the S&P SmallCap 600 Index is the licensing of the Indices and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The S&P 500 Index and the S&P SmallCap 600 Index are determined, composed and calculated by S&P Dow Jones Indices without regard to CBIS, the CUIT Core Equity Fund, or the CUIT Small Cap Equity Index Fund. S&P Dow Jones Indices has no obligation to take the needs of CBIS, the owners of the CUIT Core Equity Fund, or the owners of the CUIT Small Cap Equity Index Fund into consideration in determining, composing or calculating the S&P 500 Index and the S&P SmallCap 600 Index. S&P Dow Jones Indices is not responsible for and has not participated in the determination of the prices, and amount of the CUIT Core Equity Fund and the CUIT Small Cap Equity Index Fund or the timing of the issuance or sale of the CUIT Core Equity Fund and the CUIT Small Cap Equity Index Fund or in the determination or calculation of the equation by which the CUIT Core Equity Fund and the CUIT Small Cap Equity Index Fund are to be converted into cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the CUIT Core Equity Fund or the CUIT Small Cap Equity Index Fund. There is no assurance that investment products based on the S&P 500 Index and the S&P SmallCap 600 Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.

S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P 500 INDEX AND THE S&P SMALLCAP 600 INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY CBIS, OWNERS OF THE CUIT CORE EQUITY FUND AND THE CUIT SMALL CAP EQUITY INDEX FUND OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX AND THE S&P SMALLCAP 600 INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND CBIS, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.


1q 2018 investment portfolio review - cbisonline.com · era of low equity volatility ending...

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