1q 2016 investment portfolio reviewcbisonline.com/.../2/2016/...port_review_1q16_rev2.pdf ·...

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

1Q 2016

Investment Portfolio Review

LEADING CATHOLIC INSTITUTIONAL

INVESTMENT MANAGER

} Over $6 billion in assets under management

} Exclusively serve Catholic institutions

} Founded and owned by the De La Salle Christian Brothers

PIONEERED CATHOLIC RESPONSIBLE

INVESTING

} 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 mission with investments

DIVERSE RANGE OF NEEDS

} Portfolio services for a range of institutions

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

GLOBAL CLIENT BASE

} Religious Institutes } Dioceses } Education } Healthcare

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

9%

84%

7%

1%

11%

8%

6%

6%5%27%

23%

6%6%

BY PRODUCT TYPE ($MILLION)

BY CUIT TYPE ($MILLION)

Separate Accounts $568Global Funds PLC (UCITS) $433CUIT Funds $5,184

Money MarketOpportunistic BondBalancedCore IndexValue

Short bondInt. Diversified BondSmall capGrowthInternational

CBIS Asset Review

$6.2 BILLION IN TOTAL ASSETS

UNDER MANAGEMENT (3/31/16)

Key Highlights:Market Overviewpage 2

Investment Program Offeringspage 8

CBIS Fund’s Performancepage 9

CBIS Fund Reportspage 10

Investment Portfolio Review 1Q 2016


Market Summary

An early sell-off, with U.S. equities down 10% and other broad measures of global equities falling into bear market territory.

Dovish moves by global central banks came once again to the rescue of faltering markets, and fortunes reversed by quarter-end.

The U.S. dollar rally stalled and the U.S. currency generally weakened.

The prevalence of negative yields in Europe and Japan shaped fixed-income market returns in Q1, while U.S. bonds showed generally strong returns.

The Fed cited slow global growth as a factor in reducing its 2016 U.S. economic outlook, the ECB lowered its outlook for Eurozone growth and the outlook for Japan was weakest of all.

Velocity declined during the financial crisis, but has continued to fall despite modest economic growth.

An increase in excess reserves in the banking system has occurred, but the growth of deposits has not been accompanied by an increase in loans.

Regulation may have had the unintended consequence of restricting capital.

1Q 2016

Market OverviewUNINTENDED CONSEQUENCES

If an object lesson were ever needed in the futility of fervidly overanalyzing the market’s every twist, turn, jump and dive, the first quarter of 2016 could hardly be surpassed. It was a wild ride, and for all its drama it went almost nowhere. The year began with renewed fears of deepening global economic malaise, visibly marked by a drop in oil prices from $35/barrel to $25/barrel by mid-February. Investors faced what looked like a perfectly bearish storm:

} A relentlessly weak Eurozone economy

} Heavily indebted emerging market economies burdened by depressed commodity prices and a strengthening U.S. dollar

} Broad concerns over China’s economic slowdown

} The prospect of four U.S. Federal Reserve rate hikes in the year ahead

Stocks fell and credit spreads surged as “risk off” sentiment dominated global markets. By early February, U.S. equities were off 10% in one of the worst starts to a year in history, while other broad-based measures of global equities fell into bear market territory (a decline of 20% from the highs) for the first time since 2011.

And then something changed.

What that was is hard to pinpoint in time, but not in kind. Dovish talk and then dovish action by the enormously powerful cabal of global central banks came once again to the rescue of faltering markets, as it has so many times since the financial crisis of 2008-2009. It began in January with the Bank of Japan’s introduction for the first time of a negative policy rate to jolt its economy away from deflation. In February



despite the BOJ’s actions. In terms of sector performance, financials were weak both in the U.S and globally on fears of the impact of low to negative global yields on bank loan margins and, in some cases, potential exposure to energy sector debt impaired by the global collapse in oil prices since 2014. Healthcare was also weak, due in part to continued fallout from public disaffection over high drug prices, which has become an issue in the U.S. presidential election campaign. Utilities and telecom were by far the strongest U.S. sectors given the fall in yields during the quarter. Energy and consumer staples were moderately strong both in the U.S. and globally, with low- to mid-single digit gains.

The prevalence of negative yields in Europe and Japan shaped fixed-income market returns in Q1. German bund yields fell further into negative territory, out to the seven-year maturity. And in late March, Bloomberg reported that nearly $8 trillion of bonds globally now have negative yields, forcing many global bond investors into positive-yielding U.S. markets. Along with a dovish Fed, this drove U.S. rates down in Q1. U.S. Treasury yields declined 40 to 55 basis points along the curve from the three-year to the 30-year maturity. U.S. credit spreads spiked sharply higher through early February along with the decline in equity markets, but recovered, and ended the period little changed. For the quarter, U.S. bonds showed generally strong returns. The Barclays U.S. Aggregate Index returned +3.0%, while long Treasuries posted the highest returns, at +8.5% for the Barclays U.S. Aggregate Government 20+ year Index. Other than the mortgage-backed sector, which underperformed Treasuries due to the increased market volatility, all other fixed income sectors outperformed Treasuries on a duration-adjusted basis.

ECONOMIC OVERVIEW

The Fed cited slow global growth and potentially weaker U.S. exports as a factor in reducing its 2016 U.S. economic outlook in March to real growth of 2.2% from 2.4% early in the year. The ECB lowered its outlook for Eurozone growth from 1.7% to 1.4% in March and reduced its inflation outlook to just 0.1% from 1.0% as the year began. The outlook for Japan was weakest of all. Japan’s economy contracted by 1.4% in the final quarter of 2015 and in early April economists expected only

the People’s Bank of China reduced reserve requirements and, with the full authority of China’s command economy, encouraged more lending. In February, markets were soothed by hints that the European Central Bank (ECB) and U.S. Federal Reserve were prepared to use policy tools to counter a faltering economic outlook and weak financial markets. In March, the ECB unveiled a raft of new measures to again stimulate Eurozone growth, including a 20 billion euro increase in monthly bond purchases under its quantitative easing program, an expansion of the program to include highly rated corporate bonds and a series of loan incentives to foster bank lending to Eurozone businesses. The Fed blinked too. At its March meeting it said its planned four rate hikes in 2016 were officially off the table and that only two were now likely, citing concern over financial market volatility and a more pessimistic view of U.S. and global economic prospects.

Beginning in mid-February, markets began to register these moves. The U.S. dollar rally stalled and the U.S. currency generally weakened as the quarter continued. Oil prices firmed, helped by rumors of planned production cuts, and then rose sharply to near $40 by quarter end. Credit spreads narrowed forcefully from February highs. U.S. equity markets rallied as sharply as they had fallen. By quarter-end, anyone who had been away for three months could be forgiven for thinking that little of note had actually happened. In a real sense, they would have been right.

Global equity markets were slightly weaker than the more buoyant U.S. market for the quarter. In local currency terms, the all-developed market MSCI EAFE Index returned -6.4%, while a weaker dollar led to a better -2.9% return for U.S. dollar-based investors. The S&P 500 managed a +1.3% advance. Emerging markets performance was mixed and varied greatly depending on local economic and political conditions, but overall the MSCI Emerging Markets Index outperformed developed markets, gaining +2.8% in terms of local currencies and +5.7% in U.S. dollar terms. Developed European market equities showed pockets of weakness; in euro terms Germany fell about -7.0%, France -4.5% and Italy a notable -15.8% on fears over its banking sector’s solvency. Japan declined -12.5% in yen but only -6.4% in U.S. dollar terms as the yen strengthened



UNINTENDED CONSEQUENCES

Global central banks have cut policy rates 637 times and spent $12.3 trillion on asset purchases since the Great Financial Crisis (GFC) of 2008, according to a Bloomberg news story published in late March (“Helicopter Money Takes Flight as Latest Drastic Monetary Idea”). And yet they stand prepared to do even more, based on public statements by Fed, BOJ and ECB officials during Q1, to stimulate growth, ward off deflation and prop up markets. U.S. Federal Reserve Chairman Janet Yellen was asked during Congressional testimony whether the Fed would consider a move to a negative interest rate policy (NIRP) and she notably refused to rule it out. While the European experiment with NIRP has, so far, produced few unexpected ill effects, the announcement of NIRP in Japan was accompanied by increased market volatility and an unforeseen strengthening of the Japanese yen.

Averages can be deceiving. In recent quarterly letters we have discussed the divergences in the equity markets: growth versus value, large-cap versus small-cap, FANG (Facebook, Alphabet, Netfix, Google) versus everyone else. Divergences are not exclusive to the equity markets. The broad stock market, as measured by the Wilshire 5000, has risen approximately 20% per year since the market bottom in 2009 and unemployment has declined to approximately 5% from an October 2009 peak of 10%, yet average real income in the U.S. is flat over the period and the labor participation rate has declined to levels not seen since the late 1970s. A potentially more analytically illuminating divergence is highlighted in a Goldman Sachs study (“The Two-Speed Economy”) published in April 2015. The study found that:

} Large firms, those with annual revenue in excess of $50 million, experienced revenue growth of 8% on a compound annual basis between 2009 and 2011.

} Smaller firms, those with annual revenue less than $10 million, experienced revenue growth of only 2% over the same timeframe.

0.7% GDP growth in 2016, 0.2 percentage points lower than a month before. For 2017, the growth outlook for Japan is only 0.6%. China’s prospect for 6.5% real growth in 2016 seems super-charged by comparison, but represents the nation’s slowest growth rate in twenty-five years. In early April, the International Monetary Fund (IMF) again cut its global growth forecast to 3.2% in 2016, down by 0.2 percentage point from its January projection; the IMF said China’s slowdown and weak commodity prices were weighing on emerging market economies more than it had expected, while developed market nations were still struggling to escape the legacies of the 2008/2009 financial crisis.

With such a broad-based backdrop of economic malaise, the market rally during the second half of the quarter had no counterpart in stronger corporate earnings estimates. In fact, earnings estimates generally declined as the quarter unfolded. In early April, Zacks.com (which tracks analysts’ earnings forecasts) projected a -10.9% decline for Q1 2016 S&P 500 earnings on 2.2% lower revenue; this is down from a projected -1% decline at the beginning of the year. The weakness was broad based, effecting 14 of the 16 economic sectors Zacks monitors. Earnings are set to decline again in Q2, based on Zacks’ estimates, down -5.5%. Year-to-year gains begin in Q3 with a projected +8.1% increase, with Q4 showing a more optimistic +11.8% gain. Part of the second half strength is due to better year-to-year comparisons for energy, but that only illuminates the broader challenge facing corporate America in its search for the earnings growth that underpins stock prices. Projections for calendar year 2017 earnings growth for the S&P 500 remains an optimistic +13.6%, based on Factset data, but that would seem to require a much stronger economic growth backdrop than is evident right now in most global regions. If central bank policy is going to ever translate into real economic strength, the results cannot be postponed forever. In the long run, stock prices are based on earnings. Earnings growth, far more than central bank policy, will eventually be needed to power further market gains.



paper published by the Harvard Kennedy School in 2015 states “Community bank’s share of U.S. banking assets and lending markets has fallen from over 40 percent in 1994 to around 20 percent today. Interestingly, we find that that community banks emerged from the financial crisis with a market share 6 percent lower, but since the second quarter of 2010 – around the time of the passage of the Dodd-Frank Act – their share of commercial banking assets has declined at a rate almost double that between the second quarter of 2006 and 2010.” In an effort to protect the financial system, new regulation may have had the unintended consequence of restricting capital to fuel economic growth.

The other potential unintended consequence we are monitoring is the impact of unique monetary policies. It will probably take years to determine the true impact of the grand experiment in central banking known as quantitative easing (QE) and the true efficacy of post-financial crisis monetary policy. We know we have so far avoided a second Great Depression. The U.S. economy is growing (albeit at a slow pace by historical standards) and unemployment has declined to about 5%. From the Fed’s perspective, it could have been a lot worse. However, we don’t know what the long-term implications will be. Increasingly linked global economies and capital markets mean that many variables and interrelationships shape the financial impact of central bank policy. And given the Fed’s inclination to be more rather than less transparent, the markets have been filled with numerous “crowded trades” which can temporarily cloud the true market-based effects of policy actions. While it is too early to conclusively judge the impact of QE in the U.S., it is not too early to observe that the power of similar monetary tools used in Europe and Japan seems to be diminishing and that monetary policy alone cannot change an economy’s structural dynamics. For example, Japan’s experience has shown it is very difficult to generate inflation in an ageing population. Maybe immigration isn’t such a bad thing after all. While it is too early to declare U.S. monetary policy a success or failure, there are a few things that bear watching as the Fed embarks on its journey to normalize monetary policy.

} The cumulative change in employment at firms with fewer than 500 employees historically outpaced the comparable figure for large firms. This trend has reversed since 2008, with the rise in employment at smaller firms running significantly below that of larger firms.

} Wage growth lags at small firms versus larger firms.

The study also highlights the fact that the number of small firms declined over the five years that followed the GFC – the first such occurrence since the data became available in 1977. Given the role small business creation has played historically in supporting U.S. economic growth these statistics provide a potential explanation for why the strength of the current economic recovery has lagged that of past recoveries. And it begs the question: why has the environment been so difficult for small firms?

One answer may be found in the changing U.S. banking environment. Small- and medium-sized businesses are more dependent on bank lending than are larger counterparts. Large firms have access to other sources of credit through the capital markets. The well-intentioned introduction of the Dodd Frank Act (DFA), which became law in 2010, may have had the unfortunate unintended consequence of restricting the primary source of capital needed to fuel small business growth. Consider a quote from Fed Governor Elizabeth Duke’s testimony to Congress in February 2010, “Some banks may be overly conservative in their small business lending because of concerns that they will be subject to criticism from their examiners…some potential profitable loans to creditworthy small businesses may have been lost because of these concerns, particularly on the part of small banks.” (Emphasis added) Furthermore, a Federal Reserve Bank of Richmond report in March 2015 notes that “The rate of new bank formation has fallen from an average of about 100 per year since 1990 to an average of about three per year since 2010.” The report also points out that new bank formation is more likely when there are fewer regulatory restrictions. Such regulations, as were passed in DFA, may be particularly burdensome for small banks that are just getting started. Finally, a working



There is an idea in economics called “the quantity theory of money.” It states that nominal GDP growth equals the amount of money in the economy multiplied by the number of times the money is used. The number of times money is used during a given period is called “velocity.” The early monetarist economists assumed velocity was constant in the short run, therefore nominal economic activity was directly related to the growth in the money supply. They also believed the economy naturally grew close to potential, hence money growth in excess of the growth in potential GDP led to price increases. The variability of velocity in the 1980s and 1990s called into question the ability of the quantity theory to explain inflation, however velocity is still quite useful as a gauge for the demand for money. What does velocity tell us now?

Velocity declined during the financial crisis as one would expect, but it has subsequently continued to fall despite modest and steady economic growth. Increases in the money supply have simply been offset by an increase in money demand and a decrease in velocity. Are we experiencing the Keynesian liquidity trap? Is the amount of Fed bond purchases from non-bank participants simply being offset by a rise in banking reserves without an increase in lending activity?

Certainly, money demand would increase as participants hoard cash as a result of unfavorable economic expectations. This is a plausible explanation for the decline in money velocity post GFC. An article published by the Federal Reserve

Bank of St Louis lays out an explanation for the continued decline in velocity: the success of the Fed. As the Fed has been successful in driving interest rates toward zero, there is very little incentive to hold interest bearing assets such as Treasury bills and certificates of deposit (CDs) as opposed to non-interest bearing forms of money. From this perspective, the decline in velocity is a measure of the Fed’s success. A more cynical perspective would hold that the more artificial the level of interest rates, the more cautious decision makers become, the slower economic activity and therefore the lower money velocity. Artificially low rates will then prompt games such as stock buybacks, mergers and acquisitions, but these are essentially accounting maneuvers yielding little new productivity and are of value only to shareholders.

We have also seen an increase in excess reserves in the banking system. The growth of deposits in banks has not been accompanied by an increase in loans. Rather, banks are simply holding excess reserves. Again, this can be viewed optimistically as an indicator of the success of monetary policy managing the level of interest rates. In 2008, the Fed began paying interest on these reserves. The short-term impact of this policy is a decrease in the opportunity cost of holding reserves versus loans. Liquidity from Fed policy has been trapped away from the real economy and driven into the financial economy, as we have noted in prior quarterly letters.

VELOCITY OF M2 MONEY STOCK

Source: Federal Reserve Bank of St. Louis (FRED), research.stlouisfed.org

2.3

2.2

2.1

2.0

1.9

1.8

1.7

1.6

1.5

1.41960 1970 1980 1990 2000 2010

Ratio

QUARTERLY SHARE REPURCHASES ($M) AND NUMBER OF

COMPANIES REPURCHASING SHARES

Source: FactSet

$180,000$160,000$140,000$120,000$100,000

$80,000$60,000$40,000$20,000

400380360340320300280260240

‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15

S&P 500 Quartely Buybacks (Left)

Companies Repurchasing Shares (Right) U.S. Recessions

S&P 500 Index Price (Hidden)


Important InformationThis 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.

While some economic analysts believe the increase in reserves is a harbinger of inflation and beyond the control of the Fed, we need to recognize that the interest paid on reserves has become a new Fed policy tool. Unfortunately, we don’t know how this new tool will work as the Fed raises interest rates in the future and manages the drawdown of its balance sheet. The arcane statistics of excess bank reserves and velocity may well hold the key to economic performance over the next several years.

QUANTITATIVE EASING SUPPORTING EQUITY MARKETS? EXPLOSION OF EXCESS RESERVES: THE NEW NORMAL

Source: research.stlouisfed.org Source: Federal Reserve Bank of St. Louis, research.stlouisfed.org

4,800,000

4,400,000

4,000,000

3,600,000

3,200,000

2,800,000

2,400,000

2,000,000

1,600,000

1,200,000

2,400

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

Mill

ions

of D

olla

rs

Index

2010 2012 2014

All Federal Reserve Banks - Total Assets (left) Excess Reserves of Depository InstitutionsS&P 500© (right)

2,800,000

2,400,000

2,000,000

1,600,000

1,200,000

800,000

400,000

0

1985 1990 1995 2000 2005 2010 2015

Mill

ions

of D

olla

rs

As winter recedes into the past, the days are becoming longer, new growth is sprouting in the garden, and we are optimistic that the initial financial impacts of Fed policies and new regulation are subsiding. Monetary policy is normalizing in the U.S. and the inherent dynamism of the U.S. economy has slowly reasserted itself through innovation and slow but steady expansion. As a result, we are hopeful that lending to small- and mid-sized business will also improve and enable the U.S. economy to continue on an upward trajectory. Faith in central banks has powered the markets for the past several years, creating what is now an aging bull market. But faith in the economy’s propensity to grow, helped by the willingness of small- to mid-sized banks to lend, has been dormant. If that can reawaken, economic growth, corporate earnings and equities may benefit from another and more traditional form of support.




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 91-Day Treasury Bill Wellington

CUIT Short Bond Merrill Lynch 1-3 Year Treasury Index Longfellow

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

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

CUIT Balanced 60% S&P 500 / 40% BCAgg 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 Equity Russell 1000 Growth Index LA Capital, Wellington

CUIT Small-Cap Equity Index Russell 2000 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 Barclays Euro Gov’t Bond Index 1-3 Year ARCA

World Bond Barclays Capital Global Aggregate Index Schroder Investment Management

European Equity MSCI Europe Index Degroof Fund Management Company

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

Note: UCITS Funds are not available in the U.S., but can be purchased currently 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



INVESTMENT OPTION/BENCHMARK 1 MONTH

3 MONTHS

1YEAR

3 YEARS

5 YEARS

10 YEARS

SINCE INCEPTION

INCEPTION DATE

CUIT Money Market Fund 0.02 0.05 0.06 0.04 0.03 1.02 3.40 Jan 1985

Merrill Lynch 91-Day TBill Index 0.05 0.07 0.12 0.07 0.08 1.15 3.85

CUIT Short Bond Fund 0.34 0.80 0.94 1.14 1.74 3.15 5.40 Jan 1985

Merrill Lynch 1-3yr Treasury Index ** 0.18 0.90 0.92 0.77 0.87 2.47 5.27

CUIT Opportunistic Bond Fund Class A 0.91 1.33 1.47 * * * 1.13 May 2013

CUIT Opportunistic Bond Fund Class B 0.92 1.37 1.62 * * * 1.27 May 2013

Barclays 1-5 Year US Government/Credit Index 0.52 1.61 1.62 * * * 1.28

CUIT Inter. Diversified Bond Fund Class A 1.64 2.97 1.13 2.21 3.85 5.37 6.05 Jan 1995

CUIT Inter. Diversified Bond Fund Class B 1.65 3.01 1.29 2.37 4.01 5.53 4.96 Jan 2003

Barclays Capital Aggregate Bond Index 0.92 3.03 1.96 2.50 3.78 4.90 6.01 / 4.46

CUIT Balanced Fund 4.79 1.09 (1.17) 6.77 7.62 5.80 8.71 Dec 1983

60% S&P 500/ 40% BC Agg*** 4.44 2.11 2.09 8.18 8.61 6.47 8.66

CUIT Value Equity Fund Class A 7.24 (2.06) (5.57) 8.34 9.11 4.92 9.14 Jan 1995

CUIT Value Equity Fund Class B 7.26 (1.96) (5.23) 8.72 9.50 5.29 8.91 Jan 2003

Russell 1000 Value Index 7.20 1.64 (1.54) 9.38 10.25 5.72 9.75 / 8.63

CUIT Core Equity Index Fund Class A 6.89 1.21 0.77 11.39 11.04 6.43 9.12 Jan 1995

CUIT Core Equity Index Fund Class B 6.92 1.26 0.98 11.61 11.26 6.62 4.57 Mar 2000

Standard & Poor’s 500 Index ++ 6.78 1.35 1.78 11.82 11.58 7.01 9.39 / 4.59

CUIT Growth Fund Class A 6.07 0.52 2.82 12.90 10.82 6.32 8.17 Jan 1991

CUIT Growth Fund Class B 6.11 0.60 3.16 13.27 11.17 6.65 8.12 Jan 2003

Russell 1000 Growth Index **** 6.74 0.74 2.52 13.61 12.38 8.28 9.21 / 9.47

CUIT Small Cap Equity Index Fund Class A 7.94 (1.66) (10.06) 6.37 6.61 * 4.76 Jan 2007

CUIT Small Cap Equity Index Fund Class B 7.94 (1.56) (9.83) 6.68 6.91 * 5.05 Jan 2007

Russell 2000 Index 7.98 (1.52) (9.76) 6.84 7.20 * 5.26

CUIT International Equity Fund Class A 6.80 (1.57) (7.00) 2.45 1.85 1.47 5.33 Jan 1995

CUIT International Equity Fund Class B 6.83 (1.47) (6.64) 2.86 2.26 1.88 1.09 Mar 2000

MSCI ACWI Ex-U.S. ‡ 8.21 (0.26) (8.63) 2.40 2.59 2.18 4.89 / 2.75

Please review the Important Disclosures on page 29 for further information.

CUIT Funds Performance (March 31, 2016)

Investment Portfolio Review AUGUST 2014


Heading Goes HereFUND FACTS

PROFILE Q1 2016

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 and credit quality are maintained by investing only in securities rated A-1/P-1 or higher; average portfolio maturity is 90 days or less, while 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

BenchmarkML 91 Day Treasury Bill

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

Total Expense Ratio / Minimum 0.24% / No Minimum

MATURITY DISTRIBUTION %

FUND

0-7 Days 13.30

8-29 Days 19.47

30-59 Days 14.96

60-89 Days 15.03

90-179 Days 33.31

180 and Over 3.93

PORTFOLIO ANALYSIS

STATISTICS FUND ML T-BILL

Effective Duration 0.21 (Yrs) 0.13 (Yrs)

Average Quality AA+ Treasury

Yield-to-Maturity 0.65% 0.13%

Fund Size $69.7MM

CREDIT QUALITY %

FUND ML T-BILL

A-1+ or higher 85.0 100.0

A-1 12.0 0.0

<A-1 3.0 0.0

Not Rated 0.0 0.0

3%

2%

1%

0%

CUIT Money Market A ML 91-Day T-Bill Index

FUND PERFORMANCE

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

CUIT Money Market A 0.05 0.06 0.04 0.03 1.02

ML 91-Day T-Bill Index 0.07 0.12 0.07 0.08 1.15

CALENDAR YEAR RETURN 2015 2014 2013 2012 2011

CUIT Money Market A 0.02 0.05 0.01 0.00 0.00

ML 91-Day T-Bill Index 0.05 0.04 0.07 0.11 0.10

Please see Important Information on Page 2

3 MO 1 YR 3 YR 5 YR 10 YR



Heading Goes Here

Christian Brothers Investment Services, Inc. n [email protected] PAGE 2 | CB -FFS-005-0416

Important InformationBenchmark Index: ML 91-Day T-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. 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 Money Market Fund

ALLOCATIONS %

US Government & Agencies

Certificates of Deposit

Repurchase Agreements

Commercial Paper Corporate

Asset-BackedSecurities

Non-CorporateCredit

Fund 55.3 4.4 6.6 2.7 21.6 7.7 1.8

ML T-BILL 100 0.0 0.0 0.0 0.0 0.0 0.0




PROFILE Q1 2016


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

BenchmarkMerrill Lynch 1–3 Year Treasury Index

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


PORTFOLIO ANALYSIS

STATISTICS FUND BENCHMARK

Average Maturity 1.90 (Yrs) 1.94 (Yrs)


Average Quality AA- AAA


Current Yield 3.22% N/A

# of Securities 196 90

Fund Size $350.3MM

EFFECTIVE DURATION %

FUND BENCHMARK

< 1 Year 41.50 N/A

1-3 Years 48.60 100.00

3-5 Years 9.20 N/A

5-7 Years 0.70 N/A

7-10 Years N/A N/A

10-20 Years N/A N/A

> 20 Years N/A N/A

CREDIT QUALITY %

FUND BENCHMARK

AAA 46.75 100.0

AA 9.64 N/A

A 14.45 N/A

BBB 17.99 N/A

Below BBB 5.48 N/A

Cash 5.69 N/A

4%

3%

2%

1%

0%

CUIT Short Bond A ML 1-3 Year Treasury Index

FUND PERFORMANCE


CUIT Short Bond A 0.80 0.94 1.14 1.74 3.15

ML 1-3 Year Treasury Index 0.90 0.92 0.77 0.87 2.47


CUIT Short Bond A 0.81 1.37 0.84 2.98 2.31

ML 1-3 Year Treasury Index 0.54 0.62 0.36 0.43 1.55



RISK METRICS

CHARACTERISTICS FUND / 5 YR BENCHMARK / 5 YR

Sharpe Ratio 2.57 1.31

Information Ratio 2.00 0.00

Standard Deviation 0.78 0.61

Tracking Error 0.60 0.00

Downside Capture 29.71 100.0

Upside Capture 169.66 100.00



Heading Goes Here


Important InformationBenchmark Index: ML 1–3 Yr. Treasury Index eff. 7/1/01; ML 1–5 Yr. G/C Index eff. 7/1/97; 50% Lehman Intermediate Govt Index/50% Lehman 1–3 Yr. Govt Index eff. 5/1/96. Characteristics presented for the Short Bond Fund were compiled using data from Barclays Capital U.S. 1-3 Year Treasury Bond Index, which differs from the index used to benchmark fund performance. 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 Non-Corp. MBS CMO CMBS ABS Municipals Cash

Fund 12.26 12.34 12.03 15.21 3.21 0.0 2.63 1.12 17.37 15.12 3.03 5.69

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




PROFILE Q1 2016


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

BenchmarkBarclays Capital 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 Maturity 2.72 2.85


Average Quality AA AA


Current Yield 3.01% 2.20%

# of Securities 355 2,999

Fund Size $378.1MM


FUND BENCHMARK

< 1 Year 29.37 1.00

1 - 3 Years 41.15 59.30

3-5 Years 26.44 39.70

5-7 Years 2.83 0.00

7-10 Years 0.00 0.00

10-20 Years 0.23 0.00

> 20 Years N/A 0.00

CREDIT QUALITY %

FUND BENCHMARK

AAA 49.44 68.88

AA 5.88 6.50

A 15.48 12.50

BBB 21.16 12.05

Below BBB 6.85 0.07

Cash 1.19 N/A

10%

5%

0%

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

FUND PERFORMANCE


CUIT Opport. Bond A 1.33 1.47 – – –

CUIT Opport. Bond B 1.37 1.62 – – –

Barclays 1-5 Yr Gov't/Credit 1.61 1.62 – – –


CUIT Opport. Bond A 0.98 1.23 – – –

CUIT Opport. Bond B 1.23 1.27 – – –

Barclays 1-5 Yr Gov't/Credit 0.97 1.42 – – –



*Allocations exclude M&A.



Heading Goes Here


Important InformationBenchmark Index: 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. 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 Opportunistic Bond Fund

ALLOCATIONS %

Treasuries Agency Industrials Finance Utilities Non-Corp. MBS CMO CMBS ABS MunicipalsMerger/

Arbitrage Cash

Fund 15.70 2.71 18.22 16.97 2.15 0.00 3.40 3.08 19.07 8.91 2.48 6.19 1.11

Benchmark 59.88 8.52 14.40 11.08 1.37 4.13 0.0 0.0 0.0 0.0 0.61 0.0 0.0

All attribution is based on gross portfolio performance.

Active Weights

44.18%

Treasuries-5.81%

Agency 3.40%

MBS

3.08%

CMO

1.86%Municipals

6.19%

M&A

1.11%

Cash

3.82%

Industrials

5.89%

Finance

0.78%Utilies -4.13%

Non-Corp.

19.07%8.91%

CMBS ABS




PROFILE Q1 2016

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

BenchmarkBarclays Capital 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 $1,189.7MM


FUND BENCHMARK

< 1 Year 10.47 1.65

1-3 Years 29.05 32.80

3-5 Years 20.28 32.38

5-7 Years 10.48 11.12

7-10 Years 10.95 8.48

10-20 Years 14.28 13.57

> 20 Years 4.49 0.00

CREDIT QUALITY %

FUND BENCHMARK

AAA 61.54 71.52

AA 2.38 4.33

A 10.42 11.13

BBB 20.66 12.95

Below BBB 2.19 0.07

Cash 2.79 N/A

10%

5%

0%

CUIT Int. Divers. Bond B Barclays Aggregate Bond Index

FUND PERFORMANCE


CUIT Int. Divers. Bond A 2.97 1.13 2.21 3.85 5.37

CUIT Int. Divers. Bond B 3.01 1.29 2.37 4.01 5.53

Barclays Aggregate Bond Index 3.03 1.96 2.50 3.78 4.90


CUIT Int. Divers. Bond A -0.13 5.65 -1.73 6.05 7.22

CUIT Int. Divers. Bond B -0.05 5.81 -1.51 6.21 7.39

Barclays Aggregate Bond Index 0.55 5.97 -2.02 4.22 7.84



RISK METRICS

CHARACTERISTICS FUND / 5 YR BENCHMARK / 5 YR


Information Ratio 0.75 0.0


Tracking Error 0.85 0.0





Heading Goes Here


CUIT Int. Diversified Bond Fund


Active Weights

2.96%

Treasuries-2.13%

4.95%

Agency

-12.97%

MBS 1.60%

CMO0.00%

Municipals

2.79%

CashIndustrials

3.90%

Finance -0.56%

Utilies

-2.87%

Non-Corp. 0.78%

CMBS

1.58%

ABS

ALLOCATIONS %


Fund 39.52 2.06 19.99 11.61 1.27 0.00 15.33 1.60 2.57 2.10 1.19 2.79

Benchmark 36.56 4.19 15.05 7.71 1.83 2.87 28.30 0.00 1.78 0.52 1.19 0.0

Important InformationBenchmark Index: Barclays Capital 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. 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.




PROFILE Q1 2016


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 / 40% Barclays Capital 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 $54.5B $78.7B

Price/Book 2.1x 2.7x

Price/Earnings 17.9x 19.3x

Return on Equity 15.4% 18.0%

Dividend Yield 1.92% 2.14%

5-year Earnings Growth 8.20% 10.00%

Beta 1.01 1.00

10 Largest Holdings 24.17 8.05

# of Equity Securities 479 504

Turnover Rate 26.35 N/A

Fund Size $232.7MM

TOP TEN HOLDINGS

STATISTICS %

Microsoft Corporation 3.31

Wells Fargo & Company 2.92

Time Warner Cable Inc. 2.79

Capital One Financial Corporation 2.50

Bank of America Corporation 2.25

Comcast Corporation Class A 2.19

Time Warner Inc. 2.10

Charles Schwab Corporation 2.07

Alphabet Inc. Class C 2.04

Schlumberger NV 2.01

PORTFOLIO ANALYSIS: FIXED INCOME

STATISTICS FUND BCAGG



Average Quality AA- AA




EFFECTIVE DURATION FUND BENCHMARK

< 1 Year 12.32 1.65

1–3 Years 29.84 32.80

3–5 Years 16.96 32.38

5–7 Years 10.90 11.12

7–10 Years 11.09 8.48

10-20 Years 14.49 13.57

> 20 Years 4.35 0.00

10%

5%

0%

CUIT Balanced Fund 60% S&P 40% BC Agg

FUND PERFORMANCE

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

CUIT Balanced 1.09 -1.17 6.77 7.62 5.80

60% S&P 40% BC Agg 2.11 2.09 8.18 8.61 6.47


CUIT Balanced -2.33 8.80 21.29 14.59 0.71

60% S&P 40% BC Agg 1.28 10.62 17.56 11.31 4.69





Heading Goes Here


Important InformationBenchmark Index: 60% S&P 500/40% BC Aggregate eff. 1/2/03; 60% S&P 500/30% LB Aggregate/10% T Bill eff. 4/1/91; 60% LB Aggregate/40% S&P 500 in prior periods. 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. “S&P 500” is a registered trademark of McGraw-Hill Companies, Inc. The CUIT Balanced Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Fund. 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 Balanced Fund


Active Weights

3.95%

-2.00%

3.31% 3.26%

-0.44%-2.87%

-13.30%

1.53% 0.73% 1.75%

-0.31%

4.42%

TreasuriesMBS

CMOMunicipals

Cash

Agency

Industrials FinanceUtilities Non-Corp.

CMBS ABS

MARKET SECTOR ANALYSIS % – EQUITY

Consumer Discretionary

Consumer Staples Energy Financials Health Care Industrials

Information Technology Materials

Telecomm Service Utilities Cash

Fund 15.74 5.62 7.57 21.78 9.26 7.34 22.12 1.71 1.47 1.37 6.01

Benchmark 12.88 10.48 6.76 15.63 14.17 10.19 20.88 2.83 2.78 3.40 0.0

MARKET SECTOR ANALYSIS % – FIXED INCOME


Fund 40.50 2.20 18.35 10.98 1.39 0.00 15.00 1.53 2.51 2.27 0.88 4.42

BC Agg 36.56 4.19 15.05 7.71 1.83 2.87 28.30 0.00 1.78 0.52 1.19 0.00


Active Weights2.86%

-4.86%

0.81%

6.15%

-4.92%-2.85%

1.24%

-1.11% -1.31% -2.03%

6.01%


Information Technology

MaterialsCash

Consumer Staples

Energy Financials

Health Care IndustrialsTelecomm

Service Utilities




PROFILE Q1 2016


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

Asset ManagersRhumbLine Advisers (Effective 1/1/95)

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

PORTFOLIO ANALYSIS








Beta 1.00 1.00

Active Share 14.37 N/A

10 Largest Holdings 18.37% 16.66%



Fund Size $1,387.5MM

TOP TEN HOLDINGS

STATISTICS %

Apple Inc. 3.31


Exxon Mobil Corporation 1.97


Facebook, Inc. Class A 1.66

Berkshire Hathaway Inc. Class B 1.59

AT&T Inc. 1.47

Alphabet Inc. Class C 1.40

Procter & Gamble Company 1.39

Coca-Cola Company 1.36

30%

20%

10%

0%

CUIT Core Equity B S&P 500

RISK METRICSCHARACTERISTICS FUND / 5 YR BENCHMARK / 5 YR


Information Ratio -0.25 N/A


Tracking Error 0.55 N/A



FUND PERFORMANCE


CUIT Core Equity A 1.21 0.77 11.39 11.04 6.43

CUIT Core Equity B 1.26 0.98 11.61 11.26 6.62

S&P 500 1.35 1.78 11.82 11.58 7.01


CUIT Core Equity A 13.99 32.03 15.72 0.92 14.78

CUIT Core Equity B 14.19 32.31 15.95 1.13 15.01

S&P 500 13.69 32.39 16.00 2.11 15.07





Heading Goes Here


Important InformationBenchmark Index: S&P 500. 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. “S&P 500” is a registered trademark of McGraw-Hill Companies, Inc. The CUIT Core Equity Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Fund. 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 Core Equity Index Fund


Active Weights0.54% 0.76%

-0.04%0.16% 0.24%

1.13%

-1.24%

0.10%

-2.77%

0.17%0.93%


InformationTechnology

Materials CashConsumerStaples

Energy

Financials

Healthcare Industrials

TelecommService

Utilities

MARKET SECTOR ANALYSIS %


Consumer Staples Energy Financials Healthcare Industrials


TelecommService Utilities Cash

Fund 13.42 11.24 6.72 16.77 11.41 8.94 21.04 2.93 2.94 3.64 0.93

Benchmark 12.88 10.48 6.76 15.63 14.17 10.19 20.88 2.83 2.78 3.40 0.0




PROFILE Q1 2016


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)


TOP TEN HOLDINGS

STATISTICS %


Bank of America Corporation 2.87

JPMorgan Chase & Co. 2.55

Capital One Financial Corporation 2.19

Time Warner Cable Inc. 2.10


FedEx Corporation 1.71

Charles Schwab Corporation 1.64


Time Warner Inc. 1.62

PORTFOLIO ANALYSIS








Beta 1.04 1.00





Fund Size $393.7MM









15%

10%

5%

0%

-5

-10

CUIT Value Equity B Russell 1000 Value Index

FUND PERFORMANCE


CUIT Value Equity A -2.06 -5.57 8.34 9.11 4.92

CUIT Value Equity B -1.96 -5.23 8.72 9.50 5.29

Russell 1000 Value Index 1.64 -1.54 9.38 10.25 5.72


CUIT Value Equity A -3.58 9.57 38.32 19.15 -2.82

CUIT Value Equity B -3.26 9.97 38.80 19.54 -2.44

Russell 1000 Value Index -3.83 13.45 32.53 17.51 0.39

3 MO

1 YR

3 YR 5 YR 10 YR



Heading Goes Here


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. 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 Value Equity Fund


Active Weights

6.95%

-2.54% -2.50%-1.49% -1.21%

-1.73%

6.97%

-0.78% -1.19%

-3.52%

1.06%



Materials

Cash

ConsumerStaples Energy Financials Healthcare Industrials

TelecommService Utilities






Fund 12.26 4.82 10.24 26.73 10.45 8.65 18.57 2.05 1.66 3.51 1.06

Benchmark 5.31 7.36 12.74 28.23 11.66 10.39 11.60 2.83 2.85 7.03 0.0




PROFILE Q1 2016


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)


15%

10%

5%

0%

CUIT Growth B Russell 1000 Growth Index








FUND PERFORMANCE


CUIT Growth A 0.52 2.82 12.90 10.82 6.32

CUIT Growth B 0.60 3.16 13.27 11.17 6.65

Russell 1000 Growth Index 0.74 2.52 13.61 12.38 8.28


CUIT Growth A 5.29 11.65 32.92 14.13 -1.92

CUIT Growth B 5.63 12.06 33.31 14.48 -1.62

Russell 1000 Growth Index 5.67 13.05 33.49 15.26 2.64



PORTFOLIO ANALYSIS








Beta 0.94 1.00





Fund Size $309.6MM

TOP TEN HOLDINGS

STATISTICS %

Apple Inc. 5.74

Alphabet Inc. 3.20


Verizon Communications Inc. 2.66

Home Depot, Inc. 2.59

PepsiCo, Inc. 2.37

Visa Inc. Class A 2.14

Facebook, Inc. Class A 2.04


Amazon.com, Inc. 1.99



Heading Goes Here


Important InformationBenchmark Index: Russell 1000 Growth Index eff. June 1, 2000; prior to this date, historical returns reflect 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. 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 Growth Fund


Active Weights

-1.24%

1.82%

0.21%0.87%

-3.96% -3.85%

3.02%

0.16%0.95% 0.53%

1.50%Consumer

DiscretionaryInformationTechnology

Materials CashConsumerStaples

Energy Financials

Healthcare Industrials

TelecommService

Utilities






Fund 20.11 13.55 0.71 6.48 11.61 7.22 31.26 3.66 3.33 0.58 1.50

Benchmark 21.35 11.73 0.50 5.61 15.57 11.07 28.24 3.50 2.38 0.05 0.0




PROFILE Q1 2016


CUIT Small Cap Equity Index Fund

Objective Long-term capital appreciation by attempting to replicate the performance of the Russell 2000 Index, a commonly used index of domestic small-capitaliza-tion stocks

InvestmentsCommon stocks of companies that generally comprise the Russell 2000 Index

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

BenchmarkRussell 2000 Index

Asset ManagersRhumbLine Advisers (Effective 1/07)


10%

5%

0%

5

10

CUIT Small Cap B Russell 2000 Value Index








FUND PERFORMANCE


CUIT Small Cap Equity Index A -1.66 -10.06 6.37 6.61 –

CUIT Small Cap Equity Index B -1.56 -9.83 6.68 6.91 –

Russell 2000 Index -1.52 -9.76 6.84 7.20


CUIT Small Cap Equity Index A -4.75 4.46 38.05 15.42 -4.83

CUIT Small Cap Equity Index B -4.53 4.81 38.38 15.82 -4.58

Russell 2000 Index -4.41 4.90 38.82 16.35 -4.18


3 MO

1 YR

3 YR 5 YR 10 YR

PORTFOLIO ANALYSIS








Beta 1.00 1.00



# of Equity Securities 1,952 1,959


Fund Size $312.1MM

TOP TEN HOLDINGS

STATISTICS %

STERIS Plc 0.37

CubeSmart 0.34

Core-Mark Holding Company, Inc. 0.32

Vail Resorts, Inc. 0.30

West Pharmaceutical Services, Inc. 0.30

TreeHouse Foods, Inc. 0.30

Piedmont Natural Gas Company, Inc. 0.29

MarketAxess Holdings Inc. 0.29

Sovran Self Storage, Inc. 0.28

Highwoods Properties, Inc. 0.27



Heading Goes Here


Important InformationBenchmark Index: 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 Russell 2000 Index is a trademark/servicemark, and Russell is a trademark, of the Frank Russell Company. The Small Cap Index Fund is not sponsored, endorsed, sold or promoted by the Frank Russell Company, and the Frank Russell Company makes no representation regarding the advisability of investing in the Small Cap Index Fund. 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 Small Cap Equity Index Fund


Active Weights

0.21%

-0.20%

-0.04%

0.02%

-0.06%

-0.01% -0.01%-0.01%

0.18%


InformationTechnology Materials

Cash

ConsumerStaples Energy

FinancialsHealthcare Industrials







Fund 14.23 3.43 2.51 26.10 13.66 12.95 17.97 3.85 0.88 4.24 0.18

Benchmark 14.01 3.63 2.55 26.08 13.74 12.96 18.04 3.86 0.88 4.25 0.00

-0.08%

0.00%




PROFILE Q1 2016


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: 1.43% / No minimumClass B: 0.99% / $5M


CUIT International Equity A -1.57 -7.00 2.45 1.85 1.47

CUIT International Equity B -1.47 -6.64 2.86 2.26 1.88

MSCI ACWI ex-U.S. -0.26 -8.63 2.40 2.59 2.18


CUIT International Equity A -2.82 -5.11 22.03 19.16 -13.93

CUIT International Equity B -2.45 -4.72 22.49 19.67 -13.58

MSCI ACWI ex-U.S. -3.81 -4.49 23.30 17.90 -11.73

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.



Information Ratio 0.29 N/A





GEOGRAPHIC DISTRIBUTIONINT'L INDEX

Europe 49.16 46.47

Pacific Basin 15.90 24.69

Emerging Markets 22.22 21.75

Other 12.72 7.09

10%

5%

0%

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

FUND PERFORMANCE

3 MO1 YR

3 YR 5 YR 10 YR

PORTFOLIO ANALYSIS








Beta 0.90 1.00



# of Equity Securities 349 1,856


Fund Size $560.3MM

TOP TEN HOLDINGS

STATISTICS %

Taiwan Semiconductor Mfg. Co., Ltd. ADR 3.08

Nestle S.A. 2.29

Tencent Holdings Ltd. 2.00

KDDI Corporation 1.71

Chubb Limited 1.65

Chr. Hansen Holding A/S 1.49

Canadian Pacific Railway Limited 1.44

Compass Group PLC 1.44

Akzo Nobel N.V. 1.41

ICON Plc 1.40



Heading Goes Here


Important InformationBenchmark Index: The Fund’s benchmark was changed to MSCI All Country World Index (ACWI) ex-U.S. effective June 1, 2015. The benchmark performance shown reflects the linked performance of the prior benchmark (MSCI EAFE) through May 31, 2015 and MSCI ACWI ex-U.S. from June 1-December 31, 2015. Total Estimated Expense Ratio for Class B reflects the partial waiver of the Investment Management Fee so total expenses do not exceed 99 bps. 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. 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 International Equity Fund






Fund 13.95 10.60 4.94 17.19 7.42 14.17 14.95 6.30 4.49 2.97 3.04

Benchmark 12.00 11.21 6.40 25.76 8.84 11.51 8.45 6.94 5.33 3.58 0.0


Active Weights

1.95%

-0.61% -0.64%-1.46%

-8.57%

-1.43%

2.66%

6.50%

-0.84% -0.60%

3.04%



Materials

Cash

ConsumerStaples Energy Financials Healthcare

Industrials




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

} CBIS pioneered Catholic responsible investing and has more than 30 years of experience applying Catholic social teaching to the investing process.

} While socially responsible investing is often equated with stock screens, a truly effective CRI program requires that we 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 them be better corporate citizens; while also incorporating screens.

} CBIS’ program of Catholic Responsible Investing 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, we are supporting the growth performance of shareholder value.

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

PO Box 9683 Providence, RI 020940-9683

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

Important Disclosures*Data not available.

+ The CUIT Money Market Fund changed its investment approach from overnight repurchase agreements, to actively managed effective 8/1/01.

**Benchmark Index: 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.

++ “S&P 500” is a registered trademark of McGraw-Hill Companies, Inc. (“McGraw-Hill”). The CUIT Core Equity Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.

*** Benchmark Index: 60% S&P 500/40% BC Aggregate effective 1/2/03; 60% S&P 500/30% LB Aggregate/10% T Bill effective 4/1/91; 60% LB Aggregate/40% S&P 500 in prior periods.

**** Benchmark Index: Russell 1000 Growth Index effective June 1, 2000; prior to this date, historical returns reflect Russell Mid-Cap Growth Index.‡ Effective June 1, 2015, the benchmark for the International Fund has been 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. Past performance is not indicative of future performance.

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. 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.

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