RE:
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NEW
COVENANT FUNDS (the “Trust”)
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(1)
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The
Trust acknowledges that in connection with the comments made by the Staff
on the Form N-1A registration statement, the Staff has not passed
generally on the accuracy or adequacy of the disclosure made in the
registration statement;
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(2)
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The
Trust acknowledges that Staff comments or changes to disclosure in
response to Staff comments in the filings reviewed by the Staff do not
foreclose the Commission from taking any action with respect to the
filing; and
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(3)
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The
Trust represents that it will not assert the Staff’s review process as a
defense in any action by the Commission or any securities-related
litigation against the Trust.
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1.
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Staff
Comment: In the Summary Section—Fees and Expenses for
each of the New Covenant Funds, please revise the caption in the table to
read: “Total Annual Fund Operating Expenses After Fee
Waiver/Expense Reimbursement”.
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2.
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Staff
Comment: In the Summary Section—Fees and Expenses for
each of the New Covenant Funds, please delete footnote 1 and instead
include this information in a paragraph after the
table.
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3.
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Staff
Comment: In the Summary Section—Fees and Expenses for
each of the applicable New Covenant Funds, footnote 2, please disclose the
termination date of the fee waiver, indicate who can terminate the fee
waiver, disclose the circumstances under which the fee waiver changed,
indicate whether the Adviser can recoup expenses that are waived, and
indicate whether the Adviser increased the expenses in order to permit
future recoupment of waived fees.
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4.
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Staff
Comment: In the Summary Section—Principal Investment
Strategies for each New Covenant Fund, please include an explanation in
the summary section regarding what is meant on page 22 by the Fund’s
“limitation” on investments (e.g., in terms of the
percentage of revenues derived) in the types of companies that are in
conflict with the stated social-witness
principles.
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5.
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Staff
Comment: Consistent with Item 9(b)(2) of Form N-1A, in
the Summary Section—Principal Investment Strategies for the New Covenant
Growth Fund and New Covenant Income Fund, please summarize how the Adviser
decides to buy and sell securities.
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6.
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Staff
Comment: In the Summary Section—Principal Investment
Risks for each of the New Covenant Funds, please disclose the risk of
investing using social witness
principles.
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7.
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Staff
Comment: In the Summary Section—Principal Investment
Risks for the New Covenant Growth Fund on page 3, please explain what is
meant by the term “appreciation-oriented
strategy.”
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8.
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Staff
Comment: In the Summary Section—Performance for each of
the New Covenant Funds, please make the sentence regarding year-to-date
total return a footnote to the bar
chart.
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9.
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Staff
Comment: In the Summary Section—Performance for each of
the New Covenant Funds, please note that footnote 1 should be in paragraph
form and not disclosed as a
footnote.
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10.
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Staff
Comment: In the Summary Section—Performance for each of
the New Covenant Funds, please modify the introductory paragraph prior to
the bar charts to mirror the requirements of the MassMutual SEC no-action
letter. Additionally, please add an additional column to the
Average Annual Total Return table to present pre- and post-tax returns
since the effective registration date for each
Fund.
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11.
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Staff Comment: In the
Summary Section—Performance for each of the New Covenant Funds, please
make footnote 3 a narrative description rather than a
footnote.
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12.
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Staff
Comment: In the Summary Section—Performance for each of
the New Covenant Funds, please disclose in narrative format the
information required under Form N-1A that states: “If average
annual total return (after taxes on distributions and redemption) is
higher than average annual total return, the reason for this result may be
explained.”
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13.
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Staff
Comment: In the Summary Section—Fees and Expenses for
the New Covenant Income Fund on page 7, the Staff’s calculation differs
from the figures provided in the table for 3 Years, 5 Years and 10
Years. The Staff calculates the numbers as $331, $593 and
$1,341, respectively.
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14.
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Staff
Comment: In the Summary Section—Fees and
Expenses/Portfolio Turnover for the New Covenant Income Fund on page 7,
given the 230% portfolio turnover rate, please add a reference to high
portfolio turnover in the Summary Section—Principal Investment
Strategies.
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15.
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Staff
Comment: In the Summary Section—Principal Investment
Strategies for the New Covenant Income Fund on page 8, please
explain/define duration using standard
terminology.
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16.
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Staff Comment: In the
Summary Section—Principal Investment Risks for the New Covenant Income
Fund on page 8, please include emerging markets risk in the Foreign
Securities Risk narrative.
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17.
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Staff
Comment: In the Summary Section—Fees and Expenses for
the New Covenant Balanced Growth Fund on page 12, the Staff’s calculation
differs from the figures provided in the table for 1 Year, 3 Years, 5
Years and 10 Years. The Staff calculates the numbers as $124,
$423, $744 and $1,654,
respectively.
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18.
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Staff
Comment: In the Summary Section—Principal Investment
Strategies for the New Covenant Balanced Growth Fund and New Covenant
Balanced Income Fund, please disclose the credit strategy in terms of
ratings for investments in corporate
bonds.
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19.
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Staff
Comment: In the Summary Section—Principal Investment
Risks for each of the New Covenant Funds, please consider revising the
credit risk disclosure, which currently seems to only reference junk bond
risk.
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·
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Credit
Risk—An issuer of a fixed-income security may not be able to make default on a security by failing to
pay interest or principal payments when
due.
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20.
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Staff
Comment: In the Summary Section—Management for the New
Covenant Balanced Growth Fund and New Covenant Balanced Income Fund,
please include a subsection titled, “Portfolio Manager(s),” which details
the individuals or team responsible for rebalancing the allocations for
the Fund.
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21.
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Staff
Comment: In the Summary Section - Purchase, Exchange,
and Sale of Fund Shares for each Fund, please remove references to
exchanges, as this is not allowed under Form
N-1A.
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22.
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Staff
Comment: In the Principal Strategies, Other Policies and
Risks Section on page 22, please revise the temporary defensive position
disclosure to conform to Item 9(b), Instruction 6 of Form
N-1A.
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-
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A Fund may take a temporary defensive
position wWhen
adverse market conditions
exist. This may
prevent the Fund fromthreatening a Fund's ability
toachievinge its investment
objective appear
imminent, the Fund may take a temporary defensive position designed to
reduce risk because, even though such a
temporary position would
may be inconsistent
with the Fund’s customary strategies. For example, the GROWTH
FUND may increase its bond and cash equivalent holdings and the INCOME
FUND may increase its cash equivalent
holdings.
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23.
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Staff
Comment: In the Principal Strategies, Other Policies and
Risks section on page 23, please provide clarification as to which
strategies are further elaborations of the principal
strategies.
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24.
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Staff
Comment: In the Management of the Funds Section—The
Adviser on page 27, please describe the experience of the Adviser and the
variety/types of clients that the Adviser
services.
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25.
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Staff
Comment: In the Management of the Funds—The Sub-Advisers
section on page 27, please describe the compensation for each Sub-Adviser
and clarify that the Adviser pays the Sub-Adviser out of its management
fees.
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26.
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Staff
Comment: In the Management of the Funds Section—The
Sub-Advisers, please describe the experience of the Sub-Advisers and the
variety/types of clients that each Sub-Adviser
services.
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27.
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Staff
Comment: In the Management of the Funds Section—The
Sub-Advisers, please state each portfolio manager’s business experience
(i.e., position
held) for the last five years.
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28.
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Staff
Comment: On the pages of the Privacy Notice, please
remove the phrase, “THIS IS NOT A PART OF THE PROSPECTUS” from each
page.
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29.
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Staff
Comment: In the Disclosure of Fund Portfolio Holdings
Section on page 34, please define terms for clarity and provide the
frequency with which information about portfolio securities is disclosed,
and the length of the lag, if any, between the date of the information and
the date on which the information is
disclosed.
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