wfn.org | Newsline: Brethren Benefit Trust letter regarding financial crisis

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Newsline: Church of the Brethren News Service -- Oct. 9, 2008
Cheryl Brumbaugh-Cayford, News Director
800-323-8039 ext. 260 -- cobnews@brethren.org

>BRETHREN BENEFIT TRUST ISSUES LETTER ON
>INTERNATIONAL FINANCIAL CRISIS

(Oct. 9, 2008) Elgin, IL -- A letter from Brethren Benefit Trust (BBT)
president Nevin Dulabaum was issued last Friday, Oct. 3, regarding the
agency's response to the international financial crisis.

Brethren Benefit Trust is a Church of the Brethren agency providing
insurance and pension benefits for pastors and employees of
congregations, districts, and church agencies; ministries that undergird
the financial health and wellbeing of individuals and organizations; and
investment and information technology services for the wider church.

>The letter follows:

"As investors in the United States, and now the world, wait to learn what
is next in the rapidly changing financial markets, Brethren Benefit Trust
joins its clients and members with concern over what this all means in
the short-, mid-, and longterm for investments that are under BBT's
management.

"Obviously, BBT's stock and bond investments will follow the trend of
the markets. Our mandate to our eight national investment managers is to
outperform their respective indices, which are used as benchmarks to
gauge how successfully they invest our funds. However, our managers
cannot buck strong trends--no one can. This means that if one or more
investment markets are in full-scale decline, such as equities at this  time,
BBT investments most likely will not decline as much as its benchmark,
the S&P 500, but investments will decline nonetheless.

"It is all part of the ebb and flow of the investment marketplace, but  just
because this is part of the business cycle does not mean it is easy to
watch. Exacerbating the situation is the fact that the scope and impact of
the current financial crisis is being likened to that of Wall Street's  crash
of 1929. Over the past two weeks, a number of financial service
companies have been bought out or shut down so quickly that it is
difficult to keep up-to-date on whether one has investments in any of
these firms.

"We are in unprecedented times; however, that does not mean that we
are not prepared for times such as these.

"The BBT investment policies, which cover investments in the Brethren
Pension Plan and Brethren Foundation and have been fine-tuned for two
decades, emphasize investing in strong companies, not chasing "hot"
stocks or bonds. Companies are looked at for their stability, longterm
potential, and fiscal wellbeing.

"BBT's investment guidelines call for funds under its management to be
invested in a broad spectrum of sectors. With financials being one of a
number of investment sectors, and with guidelines also limiting how
much exposure BBT's asset managers are allowed to purchase in any
one firm, the BBT financial system is designed to absorb declines in
individual companies and individual sectors. This system is also the
reason why BBT's investments were not adversely impacted in the
recent past by other headline-grabbing implosions, such as with
WorldCom and Enron.

"BBT's investment strategy also calls for diversification through
multiple managers. BBT currently contracts with four equity managers,
two bond managers, one short-term manager, and a community
development manager to guide the investing of its funds. Each of the
equities and bond managers is given a unique investment style to follow,
so that none of the managers is investing in the same manner. Managers
are then reviewed quarterly to ensure that they are following investment
guidelines and are equaling or outperforming their respective
benchmarks.

"And who is managing these managers? On a daily basis, it is BBT's
staff that gives guidance to the investment managers. Mid- and longterm
issues receive input and direction from BBT's investment committee,
which currently is composed of an investment officer who works for an
$8 billion trust, a professional bond manager, the owner of a financial
planning firm, and an attorney. BBT also contracts with a firm that
specializes in providing investment oversight to companies like BBT to
add additional expertise to our decision making.

"Indeed, these are unprecedented times. What is certain, however, is that
the investment strategy crafted by BBT is designed to weather crises
such as this one. Which brings me to the final point:  For those who are
not investment professionals, the best investing advice is to develop a
strategy with a financial planner, and then stick with it. Market timing--
that is, the jumping in or out of investments because a perceived increase
or loss is about to take place--usually is not a sound move. For example,
on Monday, Sept. 29, all signs pointed early in the day that Congress
would approve a $700 billion bailout plan for the troubled financial
industry. The equities markets seemed poised to rise under news of that
planned stabilization. However, when the plan unexpectedly fell apart,
the Dow Jones Industrial Average dropped a whopping 777 points--the
index's largest one-day drop ever.

"BBT recommends that all of its Pension Plan members and Brethren
Foundation clients develop a longterm investment strategy based on their
respective needs, and then stick to their plans. It is the best strategy  for
these uncertain times."

The Church of the Brethren is a Christian denomination committed to
continuing the work of Jesus peacefully and simply, and to living out its
faith in community. The denomination is based in the Anabaptist and
Pietist faith traditions and is one of the three Historic Peace Churches.  It
celebrates its 300th anniversary in 2008. It counts more than 125,000
members across the United States and Puerto Rico, and has missions and
sister churches in Nigeria, Brazil, the Dominican Republic, Haiti, and
India.

># # #

>For more information contact:

>Cheryl Brumbaugh-Cayford
>Director of News Services
>Church of the Brethren
>1451 Dundee Ave., Elgin, IL 60120
>800-323-8039 ext. 260
>cobnews@brethren.org

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