497 1 ahit-497_011521.htm HIT FACTSHEET4Q-2020

 

 

 

 

HIT AT A GLANCE

 

•A $6.7 billion investment grade fixed-income mutual fund.

 

•Expertise in the highest credit quality multifamily mortgage backed securities (MBS).

 

•Proven 35+-year history of competitive returns for pension funds and labor organizations, such as health and welfare funds, while also generating vital union construction jobs, and supporting housing (including affordable and workforce housing), and healthcare facilities.

 

•100% union labor requirement for all on-site construction.

 

•Successful history as a fixed-income impact investor incorporating Environmental, Social, and Governance (ESG) factors into its investment strategy and signatory of the United Nations-supported Principles for Responsible Investment (PRI).

 

RELATIVE RETURNS 

As of December 31, 2020, periods over one year are annualized

 

 

The AAA Index represents the AAA Component of the Bloomberg Barclays U.S. Aggregate Bond Index.

 

BENEFITS OF THE HIT

 

•Core fixed-income option with a strong performance record.

 

•Higher income, superior credit profile, and similar levels of interest rate risk compared to its benchmark.

 

•Directly sources multifamily construction-related investments that have higher yields than other investments of similar duration and credit quality.

 

•Ongoing yield advantage strengthens its performance relative to its benchmark.

 

•High credit quality multifamily MBS differentiate the HIT from many other core fixed-income vehicles.

 

•The HIT’s risk profile, due to its concentration in multifamily MBS and exclusion of corporate bonds, could be a useful consideration for potential portfolio diversification from other asset classes.

STRATEGY: OVERSIGHT MULTIFAMILY MBS

 

•Construct and manage a portfolio with higher credit quality, higher yield, and similar interest rate risk relative to the Bloomberg Barclays US Aggregate Bond Index benchmark.

 

•Invest in high credit quality multifamily MBS that can provide an income advantage for the HIT and contribute to its performance relative to the benchmark.

 

SECTOR ALLOCATION

As of December 31, 2020

 

 

RISK COMPARISON

As of December 31, 2020

 

  HIT Barclays
Credit Profile        
U.S. Government/Agency/AAA/Cash 91.18%   69.83%  
A & Below/Not Rated 3.28%   26.81%  
Yield  
Current Yield 2.68%   2.54%  
Yield to Worst 1.51%   1.02%  
Interest Rate Risk  
Effective Duration 5.83   6.26  
Convexity 0.25   0.29  
Call Risk  
Call Protected 78%   73%  
Not Call Protected 22%   27%  

 

Source: HIT and Bloomberg Barclays US Aggregate Bond Index



continued

 

 

The calculations of the HIT yield herein represent widely accepted portfolio characteristics information based on coupon rate, current price and, for yield to worst, certain prepayment assumptions, and are not current yield or other performance data as defined by the SEC in Rule 482.

 

 

 

 

 

HIT INVESTS IN UNDERSERVED COMMUNITIES

•  HIT projects now under construction are predominantly located in areas that have lower median household incomes and are more racially diverse than the US average according to the US Census Bureau.

•  HIT’s investments create union jobs that provide training, fair wages and safe working conditions and broader economic benefits at a time of high unemployment.

 

HIT’S DIVERSE WORKFORCE AND LEADERSHIP

•  HIT’s diverse workforce and leadership, with their varied experience and perspectives, add significant value to its management and performance.

•  Diverse Workforce—63% minority or women.

•  Diverse Leadership Team—50% minority or women.

LABOR POLICIES: BEST IN CLASS

 

•Documentation—general contractors and developers have a contractual obligation requiring 100% union labor.

 

•Monitoring and Enforcement—HIT Labor Relations ensures compliance and solves issues that may arise.

 

•Measurement—work hours measured and reported for every project.

 

 



 

 

 

 

53 COLTON STREET 

SAN FRANCISCO, CA

 

•$19.1 million HIT investment

 

•$52.5 million new construction project

 

•$108.4 million in total economic benefits

 

•Creating an estimated 368,640 hours of union construction work (618 jobs)

 

•96 units of housing (100% affordable)

ECONOMIC IMPACT OF INVESTMENTS*

(1984-present) 

 

  545 PROJECTS 182.2M hours of on-site union construction work created
$9.1B in HIT capital invested
$17.1B in total development cost
$34.0B total economic benefits

$13.8B in personal income including wages and
benefits ($7.0B for construction workers)

200,113 total jobs generated across communities
118,679 housing and healthcare units nationwide
(67% affordable housing)

 

 

 

 

 

 



 

 

*Job and economic impact figures are estimates calculated using IMPLAN, an input-output model, based on HIT and HIT subsidiary Building America CDE, Inc. project data. Data is current as of December 31, 2020. Economic impact data is in 2019 dollars and all other figures are nominal.

 

The performance data quoted represents past performance and is no guarantee of future results. Investment results and principal value will fluctuate so that units in the HIT, when redeemed, may be worth more or less than the original cost. The HIT’s current performance data may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available from the HIT’s website at www.aflcio-hit.com. Gross performance figures do not reflect the deduction of HIT expenses. Net performance figures reflect the deduction of HIT expenses and are the performance returns that HIT’s investors obtain. Information about HIT expenses can be found on page 1 of the HIT’s current prospectus.

 

Investors should consider the HIT’s investment objectives, risks, and charges and expenses carefully before investing. This and other information is contained in the HIT’s current prospectus. To obtain a current prospectus, call the HIT at (202) 331-8055 or visit the HIT’s website at www.aflcio-hit.com.

 

 

 

1227 25th Street, NW | Suite 500 | Washington, DC 20037 | 202.331.8055 | www.aflcio-hit.com