Extended Term Fixed Income Fund (ETFIF)
Fund Overview: Objective, Strategy and Holdings
Earn current income while preserving capital and providing exposure to long term interest rates by primarily investing in a diversified mix of fixed income instruments.
Holds publicly traded U.S. fixed income securities, fixed income instruments denominated in currencies other than the U.S. dollar, and includes private debt securities.
May hold 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.
ETFIF will seek exposure to longer term fixed income security yields while accepting the higher risk associated with market interest rate changes. At its inception and for a period of time thereafter, the Fund will seek to reduce the risk of market interest rate changes, but not eliminate them. For more information, see the Investment Funds Description.
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 ETFIF, 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 2017, ETFIF’s expenses were equal to 0.40% of the Fund’s total assets.
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Risk and Disclosures
ETFIF is designed for investors with a longer investment time horizon who seek a greater portion of their investment return from current income rather than capital appreciation but exhibit a willingness to incur significant fluctuations in investment value due to higher levels of interest rate risk. Fund investments carry some degree of risk that will affect the value of ETFIF’s investments, its investment performance and the price of its units. As a result, loss of money is a risk of investing in the Fund. ETFIF is subject to the following principal investment risks: credit risk, country risk, currency risk, derivatives risk, interest rate risk, investment style risk, liquidity risk, market risk, prepayment risk, security-specific risk and yield curve risk.
Historical returns are not indicative of future performance. For further discussion of the Fund’s investments strategies and risks, please refer to the Wespath Investment Funds Description and related documents. 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.
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The Extended Term Fixed Income Fund performance benchmark is the Bloomberg Barclays U.S. Long Government/Credit Bond Index.