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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

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 0.49% for 2021
Benchmark Bloomberg Barclays US Universal (ex mortgage backed securities)
Fund Assets $5,655 Million as of February 28, 2023
Holdings December 31, 2022
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 12/31/2022)

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
Fixed Income Fund 2.60% -12.65% -12.65% -2.17% 0.41% 1.56%
FIF Benchmark 2.27% -13.34% -13.34% -2.34% 0.39% 1.51%

Universe Comparison

Fixed Income Fund vs. Peer Group Universe

Peer Group Performance Comparison

Peer group performance comparison

Annualized Performance (Net-of-Fees)

  1 Year 3 Year 5 Year 10 Year
Fixed Income Fund -12.6% -2.2% 0.4% 1.6%
Median -13.8% -2.4% 0.1% 1.2%
Rank (%) in Universe 18th 35th 30th 26th
# of Observations 315 288 252 171

 

Peer Group Performance Comparison and Annualized Performance (Net-of-Fees) data as of December 31, 2022.

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 U.S. Universal Index (excluding mortgage backed securities). 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. From January 1, 2003, through December 31, 2005 the benchmark was the Bloomberg U.S. Aggregate Bond Index. Prior to January 1, 2003, the benchmark had been the Bloomberg Intermediate Aggregate Bond Index.


Wespath Benefits and Investments (“Wespath”) is a general agency of The United Methodist Church, a 501(c)(3) tax-exempt organization. Wespath administers benefit plans and together with its subsidiaries, UMC Benefit Board, Inc. (“UMCBB”) and Wespath Institutional Investments, LLC (“WII”) invests (or provides back-office services for) assets on behalf of benefit plan participants and beneficiaries, plan sponsors and other institutions controlled by, affiliated with or related to The United Methodist Church (the “Church”). For GIPS compliance purposes, the Firm referenced herein is defined to include Wespath, UMCBB and WII (“Firm”).

Wespath claims compliance with the Global Investment Performance Standards (GIPS®). GIPS is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. To obtain a copy of Wespath’s GIPS Report, please call us at 1-847-866-4100 or e-mail us at [email protected].

Allocations

Holdings-Based Sector Allocations as of December 31, 2022

Sector FIF Actual (%) FIF Benchmark (%) Difference (%)
U.S. Treasuries 19.6% 45.4% -25.8%
U.S. Government* 0.8% 1.3% -0.5%
U.S. Corporate 20.8% 24.7% -3.9%
Non-U.S. Government 5.5% 4.9% +0.6%
Non-U.S. Corporate 5.7% 8.8% -3.1%
High Yield 9.5% 5.5% +4.0%
Emerging Market Debt 10.2% 6.2% +4.0%
Mortgage-Backed Securities 3.2% 0.0% +3.2%
Asset-Backed Securities 1.9% 0.0% +1.9%
Commercial Mortgage-Backed Securities 11.1% 2.6% +8.5%
Term Loans 1.4% 0.0% +1.4%
Affordable Housing-Wespath 3.0% 0.0% +3.0%
Collateralized Mortgage Obligations 0.0% 0.0% 0.0%
Other** 7.3% 0.6% +6.7%

* 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 December 31, 2022

  FIF FIF Benchmark
Effective Duration 5.47 6.01
Effective Convexity 0.51 0.73
Yield to Worst* 3.25% 3.02%
Effective Maturity 7.35 8.40

* Does not reflect the deduction of fees.


Distribution by Credit Rating as of December 31, 2022

  FIF FIF Benchmark
AAA 37.2% 51.5%
AA 7.1% 5.3%
A 11.5% 16.0%
BBB 22.6% 18.6%
BB 7.9% 4.4%
B 7.4% 3.2%
< B 2.4% 1.0%
NR 2.7% 0.0%
Cash 1.2% 0.0%

Risks & Disclosures

The performance shown is for the stated time period only and computed in U.S. Dollars (USD). 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 investment management fees, operating expenses, bank custodial fees and miscellaneous Fund administration expenses. These expenses are paid directly by FIF, 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 2021, FIF’s expenses were 0.49% of the fund’s total assets.