As of March 31, 2025, the value of The Church Pension Fund’s portfolio stood at $17.7 billion, compared with $17.5 billion at the end of the prior fiscal year. Despite a sell-off in the first quarter of 2025, public equity markets posted moderate gains for the year, with strong performance increasingly concentrated in very large (and expensive) technology stocks. With bond yields having moved higher after a few years at rock-bottom levels, fixed-income markets delivered solid increases. Private assets, including venture capital and real estate, have resumed building value following a few years of accommodation to the new interest-rate environment. CPF has continued to make new investment commitments in these areas, which should bear fruit in the coming 10 to 15 years.

Over the past decade, the CPF investment portfolio produced an annualized compound return of 7.2%, compared with its investment goal (an “inflation-plus” target) of 7.5% and its public markets benchmark of 6.3%. The investment goal is a measure of the return estimated to be required over time to maintain the health of the fund, taking into account that assessments cover only about 20% of benefits paid out each year.

The Investment team spends much of its time understanding and monitoring the risks involved in managing a complex portfolio. This vigilance has enabled CPF to maintain the necessary financial strength to meet its obligations.

CPF incorporates socially responsible investment (SRI) principles in its investment strategy, in a manner consistent with its fiduciary responsibilities. CPF makes investments that bring positive social impacts when strong risk-adjusted returns can be achieved. As part of this strategy, the Investment team evaluates how current and prospective investment managers reflect environmental, social, and governance (ESG) issues in their analysis. CPF also collaborates with peers and industry working groups on SRI issues.

Financial market volatility jumped in early 2025, fueled by uncertainty about global trade policy. When markets are moving fast, CPF’s Investment team works to ensure that the portfolio remains close to its asset allocation targets through a disciplined process of regular rebalancing. The team also ensures that portfolio liquidity—essentially, the ability to convert investments into cash—will be sufficient to make estimated benefit payments. The team regularly stress tests the portfolio’s cash availability against cash needs.

Two cornerstones of CPF’s approach—a long-term focus and an emphasis on diversification—come to the forefront when near-term turbulence hits. Rather than depending on short-term price fluctuations, many CPF investments build value gradually over many years. New commitments made today to venture capital managers, for instance, will come to fruition in the 2030s, after current headlines have faded.

Meanwhile, various dimensions of diversification reduce portfolio risk. For example, CPF’s investments in stocks and bonds should generally move in contrasting directions. While most CPF investments are denominated in US dollars, the portfolio contains many investments denominated in other currencies. Within each asset class, CPF also hires various managers with differentiated skill sets and techniques, further reducing risk concentration.