Inflation Protection Fund
The following individuals are responsible for the selection and monitoring of external asset managers:
Connie Christian, CFA
The Inflation Protection Fund (IPF) invests with eight external investment firms that invest in assets that are expected to provide returns in excess of inflation over time. The Fund has 35% of its assets allocated to an enhanced U.S. TIPS strategy. The remainder is invested mostly in active strategies that hold inflation-linked bonds from both developed and developing countries. The Fund also attempts to modestly improve investment returns by investing up to 10% of its assets in commodity futures contracts, up to 10% in senior secured loans, and up to 10% in real assets and alternative investments.
* 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.
The Inflation Protection Fund performance benchmark is 90% Bloomberg U.S. Treasury Inflation-Linked Bond Index and 10% Bloomberg Commodity Index, effective February 1, 2023. The Bloomberg U.S. Treasury Inflation-Linked Bond Index measures the investment performance of the U.S. Treasury Inflation Protected Securities (TIPS) market. The Bloomberg Commodity Index measures the investment performance of a broadly diversified portfolio of futures contracts on physical commodities. From January 1, 2016 to January 31, 2023, the benchmark was 80% Bloomberg World Government Inflation Linked Bond Index (Hedged), 10% Bloomberg Emerging Market Tradeable Inflation Linked Bond Index (Unhedged) and 10% Bloomberg Commodity Index. Prior to January 1, 2016, the benchmark was the Bloomberg U.S. Government Inflation Linked Bond (Series B) Index.
|Inception||January 5, 2004|
|Exp. Ratio||0.46% for 2022|
|Fund Assets||$1,073 Million as of July 31, 2023|
|Holdings||June 30, 2023|
|Unit Price History||Wespath Funds Price History|
|For More Information||Investment Funds Description – P Series|
|3 mo||YTD||1 yr||3 yr||5 yr||10 yr|
|Inflation Protection Fund||-1.52%||0.75%||3.39%||1.54%||2.80%||2.12%|
Inflation Protection Fund vs. Peer Group Universe
|1 Year||3 Year||5 Year||10 Year|
|Inflation Protection Fund||1.0%||3.2%||3.0%||2.4%|
|Rank (%) in Universe||9th||8th||8th||4th|
|# of Observations||204||189||185||126|
Peer Group Performance Comparison and Annualized Performance (Net-of-Fees) data as of June 30, 2023.
Source: Lipper. Lipper Inflation Protection Funds Universe is a group of mutual funds comparable to IPF. The Lipper Universe used for this comparison was Inflation Protected Bonds.
See Risk and Disclosures for more information regarding Net of Fees Performance.
The IPF performance benchmark is 90% Bloomberg U.S. Treasury Inflation-Linked Bond Index and 10% Bloomberg Commodity Index, effective February 1, 2023. The Bloomberg U.S. Treasury Inflation-Linked Bond Index measures the investment performance of the U.S. Treasury Inflation Protected Securities (TIPS) market. The Bloomberg Commodity Index measures the investment performance of a broadly diversified portfolio of futures contracts on physical commodities. From January 1, 2016 to January 31, 2023, the benchmark was 80% Bloomberg World Government Inflation Linked Bond Index (Hedged), 10% Bloomberg Emerging Market Tradeable Inflation Linked Bond Index (Unhedged) and 10% Bloomberg Commodity Index. Prior to January 1, 2016, the benchmark was the Bloomberg U.S. Government Inflation Linked Bond (Series B) 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].
|Sector||IPF Actual (%)||IPF Benchmark (%)||Difference (%)|
|Global Inflation-Linked Bonds (Developed)||9.3%||0.0%||+9.3%|
|Senior Secured Loans (Floating Rate)||10.1%||0.0%||+10.1%|
|Emerging Market Inflation-Linked Bonds||8.5%||0.0%||+8.5%|
|Real Assets and Alternative Investments||3.6%||0.0%||+3.6%|
|Mortgage Backed Securities||0.0%||0.0%||0.0%|
|Real Yeld to Worst*||1.98%||2.15%|
* Does not reflect the deduction of fees.
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. IPF 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, deflation risk, liquidity risk and prepayment risk.
Because U.S. Treasury Inflation Protected Securities (TIPS) are debt obligations issued and backed by the full faith and credit of the U.S. Government, they are considered to have low credit or default risk. Inflation Protected Securities issued by foreign governments, particularly governments of emerging countries, risk the possibility of loss due to credit risk.
The performance shown is for the stated time period only and computed in U.S. Dollars (USD). Historical returns are not indicative of future performance. 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.
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.
The expense ratio is a measure of the annual fund operating expenses paid by the Fund expressed as a percentage of the average fair value of the Fund’s assets for the applicable year. The annual fund operating expenses consist of fees paid to subadvisor(s), and the Fund’s pro rata portion of custody fees and administrative and overhead expenses incurred by the overall Wespath Benefits and Investments organization in connection with providing investment, operating and administrative support to the Fund and the other funds available through Wespath Benefits and Investments, and for non-Fund related activities and operations.
The expense ratio shown on the Fund Overview page is based on the prior year’s data and fee calculation methodology. The fee calculation methodology was changed effective July 1, 2023. The Fund’s actual annual fund operating expenses and the related expense ratio can differ from year to year. Actual annual fund operating expenses may vary depending on, among other things, market events, Fund size, transaction costs, timing of Fund inflows and outflows, and applicable internal costs and third-party fees.
The Fund may also pay transaction costs, performance fees, interest expenses, taxes and fees on uninvested cash held in sweep accounts, which are in addition to the annual fund operating expenses. The annual fund operating expenses and these additional expenses are reflected in the Fund’s unit price and reduce the Fund’s rate of return. For further information about the Fund’s fees and expenses, including the fee calculation methodology change, please refer to the Investment Funds Description – P Series.