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The Church of England investment fund saw returns of 15.9% over the course of 2013, backed predominantly by UK equities and property, outperforming its own benchmark by 6 percentage points.Now at £6.1bn (€7.5bn), the fund, which pays the pensions of clergy and church staff in the fund before 1997, also made charitable contributions worth just over £200m, slightly reducing the fund’s overall return to 11%.The fund said its risk assets performed well over the year, with disappointing returns from UK Gilts, as well as US Treasuries and high yield.Given the focused nature of where the returns came from, the fund also highlighted private equity, multi-asset fixed income and low-volatility equity as asset strategies to be expanded in 2014. Over 2013, it increased its allocation to listed equities to 43%, up slightly, but still significantly below the 60% allocation in 2007.A shift towards equities paid off for the fund, as UK allocations returned 28.3%, where an overweight exposure to small caps made a significant contribution.Its global and private equity allocations returned 21.9% and 13.4%, respectively, while it generated a 16.6% return from its defensive equity portfolio, made up of long and short low-volatility mandates.The year also saw the church make a £60m allocation, as part of a consortium, to purchase 300 bank branches from The Royal Bank of Scotland (RBS).The Church became the largest investor in the new bank, holding 10% of the initial investment.However, its fixed income investments did not perform as well, as US high-yield returned 3.3% back.The Church said, due to the poor relative performance of the liquid fixed income strategies, it would adjust the balance of the portfolio to protect it against volatile rate changes.Multi-asset absolute-return allocations, worth around £600m, returned 9.2% over the year, as the fund acknowledged it would look for additional managers to improve diversification.The fund added to its private credit strategy with an allocation in 2013, as the investments returned 21.5%.Property investments returned close to 17%, with returns of 20.6% and 16.9% from residential and commercial property.The indirect property portfolio returned a much lower 9.1%. However, the fund said it increased its allocations within the UK and US markets to fund care homes and residential properties.Infrastructure was a new asset class for the fund during the year, as it made a $50m (€40.5m) investment, and its timberland and forestry allocations returned 9.5%.Andrew Brown, secretary to the Church Commissioners, said the investment return through the year was very pleasing.“It is from these investments the Commissioners are able to provide the financial support to the Church,” he added.“It is particularly pleasing to note the fund has exceeded our target and performed better than its comparator group over all of the periods measured.”The Church suffered an embarrassment in 2013 through its holding of a payday lender, something it campaigns against.It admitted it had yet to divest from the pooled fund that holds equity in the lender, which it said could take “considerable time”, and that it was reviewing its use of pooled fund strategies.