Notice of Changes to Your Unitarian Universalist Common Endowment Fund (UUCEF)
The UUA finance / accounting staff have been reviewing changes to our accounting processes with the vendor who provides the “back office” accounting for UUCEF client accounts. This review has led us to make some changes we believe will simplify our statements and provide a more transparent view of client accounts. Previously, our process involved allocating six components of the market value change to every client account based on the number of units held in each account. The major limitation of this approach was that the realized and unrealized gains shown on an account statement did not portray the actual transactions on the account. For example, if an account did not have any sales/withdrawals during a reporting period, then the change in Net Asset Value (the market value per unit at month end) would all be an unrealized gain or loss. The only time an account actually realizes a gain or loss is when units owned by the account are sold to fund a distribution request.
The new process, effective with the new fiscal year beginning July 1, 2022, will calculate the realized or unrealized gains or losses for an account based solely on the transactions for that account. Additionally, account statements will no longer show the allocation of UUCEF pool accounting activity. Instead, an account statement will simply show any fund purchases or sales, any realized gain or loss on a sale or distribution, and the change in market value of the account’s holdings, i.e. the unrealized gain or loss. The sample statements shown below illustrate the presentation change that will commence with the July 2022 statement.
Old Statement Format (Prior to 7-1-2022)
New Statement Format (Beginning 7-1-2022)
Clients will still have access to information about the overall investment performance, expense ratios, and the reconcilations of Net Asset Value (NAV) changes for quarter and annual periods. (The expense ratios and NAV reconciliations are located at the bottom of the page linked above.) Keep in mind that individual client performance is dependent on timing of investment addtions and withdrawals. The UUCEF performance and expense ratio information is intended to provide our clients with information to help evaluate their investment in UUCEF. The fund is managed with a very long-term approach. We seek to generate enough income and capital appreciation to provide for prudent distributions while preserving the real (inflation-adjusted) purchasing power of the fund, all while ensuring diversification and adhering to our risk tolerance.
One other important note: beginning with the July 2022 statements, transactions will be shown for the fiscal year to date. That is, each monthly statement posted to a client’s portal will reflect all transactions from July 1 through the statement date. A separate statement for a single month’s activity will no longer be produced. However, clients will have the ability to use their portal access to prepare select reports of their choosing.
Client Web Portal Changes in Process
Clients will soon notice some changes to the web portal for their UUCEF accounts. The first change will be that clients will have the ability to run reports based on date specific ranges. Reports will be easily downloadable as spreadsheet formats or PDF documents. Please reach out to us with any questions you may have on this process.
The second change, which will happen before the end of calendar year 2022, is a major overhaul of the security features and design of the portal website. We will keep you informed of the progress on this work and the changes you can expect as we approach the implementation date.
We appreciate the confidence you have entrusted in us by choosing UUCEF as an investment holding for all or a part of your investment holdings. Please do not hestitate to contact us should you need additional information about these changes.
Andrew McGeorge Susan Helbert