skip to main content
Institutional Investor? Visit Wespath.com

Fund Overview: Objective, Strategy and Holdings

  • Earn current income by investing in a broadly diversified portfolio of fixed-income instruments.
  • Holds publicly traded U.S. fixed-income securities, and fixed-income securities denominated in currencies other than the U.S. dollar.
  • Holds privately placed loans originated by the Positive Social Purpose Lending Program (e.g., affordable housing and community development loans).
  • The Fund generally does not invest in companies that derive more than 10% of their revenue from gambling or from the manufacture, sale or distribution of alcoholic beverages, tobacco-related products, adult entertainment, weapons, or the management or operation of prison facilities.

Fund Managers

The following individuals are responsible for the selection and monitoring of external asset managers:

Frank Holsteen Image

Frank Holsteen

Managing Director, Investment Management

  • With Wespath since 2012
  • B.A. from Lake Forest College
Nízida Arriaga Image

Nízida Arriaga, CFA

Manager, Fixed Income

  • With Wespath since 2019
  • Bachelor's degree from the University of Puerto Rico-Mayagüéz
  • MBA from the University of Wisconsin-Madison

Management

The Fund invests with nine different investment management firms that use a combination of active and enhanced management styles. Wespath’s Positive Social Purpose Lending Program makes up roughly 10% of the Fund’s allocation.

External Asset Managers

* Signatory to the United Nations Principles for Responsible Investment

 

Please refer to the Investment Funds Description – P Series for a detailed description of the investment strategies used in managing the Fund.

Fund Snapshot
Inception December 31, 1997
Exp. Ratio 0.46% for 2019
Benchmark Bloomberg Barclays US Universal (ex mortgage backed securities)
Fund Assets $5,984 Million as of September 30, 2020
Holdings June 30, 2020
Unit Price History Wespath Funds Price History
For More Information Investment Funds Description – P Series

Relative level of risk compared to other Wespath Funds

Graphic of relative level of risk compared to other Wespath Funds.

Performance, net of fees (as of 09/30/2020)

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
Fixed Income Fund 2.00% 5.37% 6.29% 4.96% 5.17% 4.20%
FIF Benchmark 1.24% 6.98% 7.38% 5.59% 4.95% 4.21%

Universe Comparison

Fixed Income Fund vs. Peer Group Universe

Peer Group Performance Comparison

Peer group performance comparison

Annualized Performance (Gross-of-Fees)

  1 Year 3 Year 5 Year 10 Year
Fixed Income Fund 6.12% 4.81% 4.54% 4.51%
Median 7.50% 4.87% 4.23% 4.24%
Rank in Universe 81st 54th 24th 34th
# of Observations 303 252 199 147

Peer Group Performance Comparison and Annualized Performance (Net-of-Fees) data as of June 30, 2020.

Source: Lipper. Lipper Bond Funds Universe is a group of mutual funds comparable to FIF. Lipper utilized all mutual funds included in the pre-defined Lipper classification universe of "Core Plus Bond" to construct this Universe.

See Risk and Disclosures for more information regarding Net of Fees Performance.

FIF Benchmark

The Fixed Income Fund performance benchmark is the Bloomberg Barclays U.S. Universal Index (excluding mortgage backed securities), effective August 24, 2016. The index consists of the U.S. Aggregate Bond Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index and the non-ERISA portion of the CMBS Index. Non-dollar denominated issues are excluded from the index. The benchmark was the Barclays U.S. Universal Index (excluding mortgage-backed securities), formerly the Lehman U.S. Universal Index (excluding mortgage-backed securities), from January 1, 2006 to August 23, 2016. From January 1, 2003, through December 31, 2005 the benchmark was the Lehman U.S. Aggregate Bond Index. Prior to January 1, 2003, the benchmark had been the Lehman Intermediate Aggregate Bond Index.

Allocations

Holdings-Based Sector Allocations as of September 30, 2020

Sector FIF Actual (%) FIF Benchmark (%) Difference (%)
Asset-Backed Securities 2.7% 0.4% +2.3%
Commercial Mortgage-Backed Securities 9.3% 2.5% +6.8%
Emerging Maket Debt 9.6% 6.6% +3.0%
High Yield 10.3% 6.5% +3.8%
Mortgage-Baked Securities 3.8% 0.2% +3.6%
Non-U.S. Corporate 7.0% 7.3% -0.3%
Non-U.S. Government 7.7% 6.6% +1.1%
Term Loans 1.3% 0.0% +1.3%
U.S. Corporate 25.5% 27.6% -2.1%
U.S. Government* 1.4% 2.7% -1.3%
U.S. Treasuries 10.5% 39.6% -29.1%
Affordable Housing-Wespath 5.1% 0.0% +5.1%
Other** 5.8% 0.7% +5.8%

* The negative exposure to U.S. Government is primarily the notional amount of U.S. interest rate swaps used for reducing duration. Contribution to duration is a better measure of interest rate swap exposure, and the negative exposure on a percentage contribution to duration basis is in the low single digits.

** Other includes alternatives and cash.

Allocations are preliminary and subject to change.

Characteristics

Characteristics as of June 30, 2020

  FIF FIF Benchmark
Effective Duration 6.52 7.00
Effective Convexity 0.73 0.96
Yield to Worst* 2.7% 1.9%
Effective Maturity 8.52 9.32

* Does not reflect the deduction of fees.


Distribution by Credit Rating as of June 30, 2020

FIF Distribution by Credit Rating

Risks & Disclosures

All investments carry some degree of risk that will affect the value of the Fund’s holdings, its investment performance and the price of its units. As a result, loss of money is a risk of investing in the Fund. FIF is subject to the following principal investment risks: market risk, investment style risk, security-specific risk, credit risk, country risk, currency risk, derivatives risk, interest rate risk, liquidity risk and prepayment risk.

For further discussion of the Fund’s investments strategies and risks, please refer to the Investment Funds Description – P Series. This is not an offer to purchase securities.

Lending of Portfolio Securities

The Fund seeks to earn additional income by lending a portion of its portfolio securities to brokers, dealers and other financial institutions. The loans are secured at all times by cash and liquid high-grade debt obligations. As with any extension of credit, there are risks of delay in recovery and in some cases even loss of rights in the collateral should the borrower fail financially. In addition, losses could result from the reinvestment of the cash collateral received on loaned securities.

Expense Ratio

All expenses of the Fund are deducted from the Fund’s net asset value. The expenses include external investment management fees, operating expenses, bank custodial fees and miscellaneous fund administration and overhead expenses. The administrative and overhead expenses paid by the Fund represent the Fund’s pro rata portion of the expenses of Wespath Benefits and Investments and its affiliates including those incurred in connection with providing investment management, operating and administrative support to the Fund. These expenses are paid directly by the Fund, and are reflected in the unit price calculated for the Fund. The unit price is multiplied by the number of units held in each client’s account to determine the total value of the client’s holdings in the Fund. For 2018, FIF’s expenses were equal to 0.46% of the Fund’s total assets.