Extended Term Fixed Income Fund (ETFIF)

Fund Characteristics
Risk and Disclosures

Fund Objective, Strategy and Holdings

  • The Extended Term Fixed Income Fund seeks to 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.
  • The Fund 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.
  • The Fund may hold privately placed loans originated by the Positive Social Purpose Lending Program (e.g., affordable housing and community development loans).

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.

Management

ETFIF invests with four different investment management firms that use a combination of active and enhanced management styles. Wespath’s Positive Social Purpose Lending Program may make up to 10% of the Fund’s allocation.

Asset Managers

* Signatory to the United Nations Principles for Responsible Investment

 

Performance Review

During the first quarter of 2017 the prospects for future economic growth and for interest rate hikes increased, causing bond rates to rise. The fund’s policy to maintain a shorter-than-benchmark duration generated a return that was less negative than that of the benchmark, significantly contributing to benchmark-relative outperformance.

Fund Characteristics as of March 31, 2017

  ETFIF Bloomberg BC US Long Gov/Cred Bond Index
Effective Duration 9.62 14.84
Effective Convexity 1.66 3.07
Yield to Worst* 3.26% 3.90%
Effective Maturity 16.61 24.07
 
* Does not reflect the deduction of fees.



Performance, Net of Fees - March 31, 2017

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
Extended Term Fixed Income Fund
1.33%
1.33%
1.90%
N/A
N/A
N/A
Benchmark
1.58%
1.58%
0.98% N/A
N/A
N/A

 

Fund Distribution by Credit Quality as of March 31, 2017

ETFIF_chart2

 

Fund Distribution by Sector as of March 31, 2017

ETFIF_chart3

 

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 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 2015, ETFIF’s expenses were equal to approximately 0.44% of the Fund’s total assets.

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.

For further discussion of the Fund’s investment strategies and risks, please refer to "Principal Investment Strategies and Principal Investment Risks of the Funds — Extended Term Fixed Income Fund" in the Wespath Investment Funds Description.

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.

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 Facts

Inception May 29, 2015
Exp. Ratio 0.44%
Benchmark Bloomberg Barclays US Long Gov/Cred
Fund Assets $1.08 Billion as of April 30, 2017
Holdings March 31, 2017
Unit Price History Wespath Funds Price History
For More Information Investment Funds Description
 

Fund Manager

frank-holsteen

Frank Holsteen

Director, Fixed Income
With Wespath since 2012
B.A. from Lake Forest College
 
 
constance-christian

Constance Christian, CFA

Manager, Fixed Income
With Wespath since 2016
BSBA and MBA from Xavier University
MA from DePaul University
 
 
 
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