CBIS Christian Brothers Investment Services

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A Message to Our Participants

For 30 years, Christian Brothers Investment Services has been solely dedicated to offering Catholic institutions socially responsible investing solutions that meet their current and future investment needs. While this mission remains unchanged, the tools and methods we use to reach this goal have evolved just as the needs and priorities of our participants have evolved. We enter the next 30 years a much more sophisticated company, unafraid to accept new challenges, while remaining true to the core beliefs of our shared faith.

And we continue to innovate. Just as the past 30 years have been marked by constant change, we fully expect that the next 30 will require even more from us. As we reflect on the milestones we have achieved, we know that ultimately, the past 30 years were only the beginning.

Board Consolidation

In 2011, we began the process of working with the Religious Communities Trust (RCT) and the Catholic United Investment Trust (CUIT) to merge into a single trust. The Trustees and CBIS have decided to retain the Catholic United Investment Trust (CUIT) name because it well reflects the underlying investment approach of the programs as well as the wide variety of Catholic organizations that participate. While the initial impacts to our participants may seem largely cosmetic — the existing RCT Funds will be renamed as CUIT Funds — we anticipate that this change will position CBIS and our Funds to serve the Catholic institutional market more effectively moving forward. The benefits to our participants include:

• The consolidated Trust will be governed by a single Board of Trustees, offering our participants a single body representing their interests and ensuring that the legal structures underpinning our Funds are uniform across all Funds;
• The new structure will facilitate the introduction of new products that may not have been possible under the old structure; and
• Over time, the new structure should provide additional efficiencies and economies of scale, potentially reducing costs for our participants.

While the RCT name may be leaving us, the spirit and mission of the men and women who have served as Trustees will be forever a part of the participants they served and of CBIS. We are sincerely grateful for their time and dedication.

CUIT and RCT Investment Programs

2011 marked a bit of a stall — albeit a tumultuous one — in the continuing recovery from the 2008 financial crisis, with the major equity indices near flat for the year. Our managers maintained their investment styles and discipline throughout. While 12-month relative returns were hurt primarily by the outperformance of some of our Principled Purchasing exclusions, virtually all of our Funds ended the year matching or exceeding their indices on a three-year basis. This demonstrates both the long-term nature of our managers’ investment styles, and the cyclical nature of the impact of Principled Purchasing. We have seen, again and again, that our screens have very little impact on investment performance when measured over a full market cycle.

Socially Responsible Investing

2011 saw significant achievements in our Socially Responsible Investing (SRI) programs. On our participants’ behalf, our SRI team took on issues ranging from human trafficking to the environment, and from corporate governance to worker safety. The highlights in 2011 included:

• CBIS received the prestigious Founder’s Award from the Coalition to Abolish Slavery and Trafficking (CAST) for our work combating human trafficking.
• CBIS was the only shareholder to file a resolution at News Corporation in the wake of the phone hacking scandals that plagued the company. Our resolution was widely reported in the press, with coverage by The Wall Street Journal, Bloomberg, the BBC and many other outlets.
• CBIS led an international coalition of shareholders to press BP for increased disclosure and better risk controls in the wake of the tragic Gulf of Mexico oil spill.
• CBIS co-authored a guide for corporations to help them better comply with California’s new Transparency in Supply Chains Act, designed to help corporations ensure that their supply chains are free of slavery and other human rights abuses.

Alternative Investments

The market environment of the past few years has been a stark reminder of the importance of diversification and risk management. While traditional equities and bonds are still the basic building blocks of a portfolio, alternative investments can offer an important non-correlated asset class to a well-diversified portfolio.

As part of our commitment to innovation, CBIS launched CBIS Capital, offering CBIS participants access to alternative investments at lower minimums than most alternative investment managers require. This unique structure will continue to evolve in response to the needs of our participants, and the array of alternatives on offer will expand in the coming years.

CBIS Global

Our commitment to expanding our services to non-U.S. participants through CBIS Global continued in 2011. Even as the financial turmoil caused by the sovereign debt crisis continued, CBIS Global, under the leadership of CBIS founder Br. Louis DeThomasis, stayed the course. During the year, CBIS Global received permission to provide our Funds in Belgium and we expect France to follow in 2012. In addition, we maintained our partnership with STOXX, one of Europe’s premier providers of index data, collaborating on the STOXX Europe Christian Index, the first of its kind in Europe.

While reaching our 30-year anniversary is certainly an indication that CBIS has firmly established itself as a leading provider of investment services for Catholic institutions, we cannot spend too much time reflecting on this milestone; the world changes far too rapidly for that. Instead, we are using the past 30 years as a foundation, drawing on the experience we have gained to prepare for the future. We thank all of our participants for your support over the past 30 years, and we are confident that the next 30 will be just as rewarding.