Stable Value Fund (SVF) | Wespath Benefits & Investments

Overview
Performance
Characteristics
Risks & Disclosures

Fund Overview: Objective, Strategy and Holdings

The Stable Value Fund (SVF) seeks preservation of capital while earning current income higher than that of money market funds. The Fund invests in a broad range of high-quality, low-risk, fixed-income instruments. These include U.S. government and agency bonds, corporate bonds, mortgages, asset-backed securities and other similar types of investments.

The manager enters into contracts with highly rated financial institutions and insurance companies ("Wrap Contracts"). Wrap Contracts provide a principal protection feature designed to protect investors from interest rate risk to assure investors can transfer or withdraw the value of all contributions and accumulated interest.

SVF seeks to maintain a constant unit price of $1.00 and credit participants with interest at month-end. Each month, Wespath Benefits and Investments posts the interest rate earned by the Fund during the previous month on the Stable Value Fund Crediting Rate page.

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.

Frank Holsteen

Managing Director, Investment Management

With Wespath since 2012
B.A. from Lake Forest College

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

San Francisco-based Standish, BNY Mellon AMNA is the lead manager of the Fund. The Fund engages the services of highly regarded fixed-income managers to manage a portion of the Fund's assets.

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.

* The Stable Value Fund performance benchmark is the Bank of America Merrill Lynch 3-Month Treasury Bill Index, effective January 1, 2016. The index measures the investment performance of the 3-month sector of the U.S. Treasury Bill market. Prior to this, the benchmark was the Bank of America Merrill Lynch Wrapped 1-5 Year Corporate Government Index. The BofA ML Wrapped 1-5 Year Corp. Govt Index is a custom index that started on December 1, 2002 to coincide with the inception of the Stable Value Fund. This index does not reflect actual performance; performance has been adjusted to represent the assumed rate of return that would have been achieved if the BofA ML 1-5 Year Corp. Govt Index had been wrapped for book value returns. This index has been established and calculated by Standish Mellon Asset Management, is not sponsored or licensed by BofA Merrill Lynch, and is not available for direct investment. The index assumes a 12 basis point annual book value wrap fee from inception to June 30, 2004; 10 basis points from then until December 31, 2008; 15 basis points from then until December 31, 2011; and 20 basis points thereafter. These wrap fee assumptions are Standish's view of the industry's average during these points in time. The Crediting Rate formula applied is: CR = (((1+YTM) * ((MV/BV)^(1/D)))-1, where CR is equal to the book value crediting reset rate, YTM is the market yield to maturity of the underlying asset(s), MV is the market value of the underlying asset(s), BV is the book value of the synthetic wrap contract and D is the duration of the underlying asset(s).

Fund Snapshot
Inception	November 18, 2002
Exp. Ratio	0.55% for 2020
Benchmark	Custom Benchmark*
Fund Assets	$373 Million as of September 30, 2021
Holdings	June 30, 2021
Unit Price History	Wespath Funds Price History
For More Information	Investment Funds Description – P Series

Relative level of risk compared to other Wespath Funds

Performance, net of fees (as of 09/30/2021)

	3 mo	YTD	1 yr	3 yr	5 yr	10 yr
Stable Value Fund	0.33%	1.08%	1.50%	1.72%	1.67%	2.07%
SVF Benchmark	0.01%	0.04%	0.07%	1.18%	1.16%	1.73%

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

SVF Benchmark

The Stable Value Fund performance benchmark is the Bank of America Merrill Lynch 3-Month Treasury Bill Index, effective January 1, 2016. The index measures the investment performance of the 3-month sector of the U.S. Treasury Bill market. Prior to this, the benchmark was the Bank of America Merrill Lynch Wrapped 1-5 Year Corporate Government Index. The BofA ML Wrapped 1-5 Year Corp. Govt Index is a custom index that started on December 1, 2002 to coincide with the inception of the Stable Value Fund. This index does not reflect actual performance; performance has been adjusted to represent the assumed rate of return that would have been achieved if the BofA ML 1-5 Year Corp. Govt Index had been wrapped for book value returns. This index has been established and calculated by Standish Mellon Asset Management, is not sponsored or licensed by BofA Merrill Lynch, and is not available for direct investment. The index assumes a 12 basis point annual book value wrap fee from inception to June 30, 2004; 10 basis points from then until December 31, 2008; 15 basis points from then until December 31, 2011; and 20 basis points thereafter. These wrap fee assumptions are Standish's view of the industry's average during these points in time. The Crediting Rate formula applied is: CR = (((1+YTM) * ((MV/BV)^(1/D)))-1, where CR is equal to the book value crediting reset rate, YTM is the market yield to maturity of the underlying asset(s), MV is the market value of the underlying asset(s), BV is the book value of the synthetic wrap contract and D is the duration of the underlying asset(s).

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

Insurance Contracts

Name	Moody's Rating	Credit Summary Reports
Aegon USA	A1	Aegon Report
American United Life Insurance Company	—	American United Life Insurance Company Report
Prudential	Aa3	Prudential Report
Voya Financial	A2	Voya Report

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. SVF 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.

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.

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 SVF, 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, SVF’s expenses were 0.55% of the fund’s total assets.

	SVF	SVF Benchmark
Effective Duration	3.2	0.23
Spot Yield*	1.78%	0.05%**
Average Rating	AA	AA

SVF