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Fund Overview: Objective, Strategy and Holdings

The Social Values Choice Equity Fund (SVCEF) seeks to attain long-term capital appreciation from a passively-managed portfolio of U.S. and non-U.S. domiciled publicly owned companies that fulfills investor preferences for a heightened focus on corporate environmental and social performance.

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:

Frankl Holsteen Image

Frank Holsteen

Managing Director, Investment Management

  • With Wespath since 2012
  • B.A. from Lake Forest College
Mark Warren Image

Mark Warren, CFA, CIMA

Manager, Public Equities

  • With Wespath since 2015
  • B.S. from Purdue University
  • CFA Charterholder
  • CIMA Certification

Management

SVCEF, in response to the concerns expressed in petitions approved by a threshold number of annual conferences, excludes companies with fossil fuel reserves used for energy purposes. Additionally, and in response to the concerns expressed in petitions approved by a threshold number of annual conferences, SVCEF excludes specific companies that are the subject of annual conference resolutions concerning peace in the Middle East. Both the Fiduciary Committee and the UMC Principles Committee of Wespath’s board of directors have approved these additional exclusions.

Like Wespath’s other funds, SVCEF 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.

External Asset Managers

* Signatory to the United Nations Principles for Responsible Investment

Research and Index Provider

 

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

Performance, net of fees (as of 06/30/2021)

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
Social Values Choice Equity Fund 7.70% 13.53% 37.56% 16.72% 15.22% -
SVCEF Benchmark 7.68% 13.60% 37.74% 16.63% 15.28% -

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


SVCEF Benchmark

The Social Values Choice Equity Fund, formerly the Equity Social Values Plus Fund, performance benchmark is the World Environmental, Social and Governance (ESG) ex Fossil Fuels Index, effective April 1, 2017. Prior to April 1, 2017, the benchmark was the MSCI World Custom Environmental, Social, and Governance (ESG) Special Weighted 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].

Characteristics

Fund Statistics as of June 30, 2021

  SVCEF SVCEF Benchmark**
Wgt. Mkt. Cap ($MM) $345,511 $344,921
Price/Earnings 30.2 30.3
Price to Book 3.7 3.7
Dividend Yield*** 1.6% 1.6%
# of Stocks 695 701


** The benchmark is the MSCI World Environmental, Social and Governance (ESG) ex Fossil Fuels Index

*** Does not reflect the deduction of fees.


Characteristics as of June 30, 2021

SVCEF Characteristics image


Top 10 Stock Holdings as of June 30, 2021

Company Fund %
Microsoft Corporation 6.8%
Alphabet Inc. 5.2%
Tesla Inc. 1.8%
NVIDIA Corporation 1.7%
Johnson & Johnson 1.5%
Visa Inc. Class A 1.4%
Home Depot, Inc. 1.2%
Proctor & Gamble 1.2%
Mastercard Inc. Class A 1.1%
Walt Disney Company 1.1%

Risks & Disclosures

SVCEF is designed for investors who have a heightened focus on corporate environmental and social performance, seek long-term investment growth through exposure to the U.S. and non-U.S. public equities of companies, and are willing to accept the risk of wide fluctuations in the unit price of the fund.

All investments carry some degree of risk that will affect the value of SVCEF’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. SVCEF is subject to the following principal investment risks: market risk, investment style risk, security-specific risk, country risk, currency risk, derivatives risk and liquidity risk. Additionally, SVCEF is subject to modestly increased diversification risk, as compared to broad-market passively-managed equity funds, as a result of the exclusion of a significant number of stocks from the investment universe (i.e., the exclusion of companies with fossil fuel reserves used for energy purposes).

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.

Valuation of SVCEF Units

In the daily valuation of SVCEF units, Wespath uses a valuation methodology to capture changes in non-U.S. securities values that arise because of time-zone differences among global securities markets. Many non-U.S. securities trade on exchanges that close several hours before SVCEF’s closing unit price is calculated in the United States, generally at 4 p.m. Eastern time. In the hours between the close of the non-U.S. markets and the close of the U.S. market, the value of the non-U.S. securities may change due to a variety of factors including, for example, company-specific announcements or market-wide developments. SVCEF’s daily return may diverge from the daily return of its benchmark index, in part, because the benchmark index values do not reflect such price adjustments.

Lending of Portfolio Securities

SVCEF 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 SVCEF, 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 2020, SVCEF’s expenses were 0.42% of the fund’s total assets.