Fixed Income Fund (FIF)

Fund Characteristics
Fund Performance (Gross)
Fund Performance (Net)
Risk and Disclosures

Fund Objective, Strategy and Holdings

  • Earn current income by investing in a broadly diversified portfolio of fixed-income instruments.
  • Holds publicly traded U.S. fixed-income securities, and fixed-income securities denominated in currencies other than the U.S. dollar.
  • Holds privately placed loans originated by the Positive Social Purpose Lending Program (e.g., affordable housing and community development loans).

Management

The Fund invests with nine different investment management firms that use a combination of active and enhanced management styles. Wespath’s Positive Social Purpose Lending Program makes up roughly 10% of the Fund’s allocation.

Asset Managers

* Signatory to the United Nations Principles for Responsible Investment

Performance Review

For the third quarter 2016, the fund outperformed its benchmark due primarily to the combined effect of an underweight allocation of U.S. Treasury securities and overweight allocations to high yield U.S. corporate debt and emerging market debt.

Fund Characteristics as of September 30, 2016

  FIF Benchmark
Effective Duration 5.98 6.25
Effective Convexity 0.69 0.78
Yield to Worst* 3.64% 2.45%
Effective Maturity 8.62 8.47
 
* Does not reflect the deduction of fees.
 

Fund Performance

Performance, Gross of Fees

Fixed Income Fund – September 30, 2016

FIF_chart1
 
The accompanying chart represents the range of investment returns for the BNY Mellon Master Trust Universe for Fixed Income manager asset pools. BNY Mellon provides a fund-level tracking service used to compare Wespath’s actual gross of fees performance for its Fixed Income strategy to the performance of similar asset pools of other institutional investors. The Universe includes corporate, foundation, endowment, public, Taft-Hartley and health care plans. Source: BNY Mellon.
 

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

Performance, Net of Fees - December 31, 2016

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
Fixed Income Fund
-2.64%
5.74%
5.74%
2.63%
3.29%
5.26%
Benchmark2
-2.80%
4.62%
4.62% 3.35%
3.03%
4.61%
2 On January 1, 2006, the benchmark for the Fixed Income Fund became the Barclays Capital (formerly Lehman Brothers) U.S. Universal ex-Mortgage Backed Securities Index. Prior to this date, the benchmark is the Barclays Capital (formerly Lehman Brothers) U.S. Universal Index.
 

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

 

Fund Distribution by Credit Rating as of September 30, 2016:

FIF_chart2

 

Holdings-Based Sector Allocations as of December 31, 2016

Sector Actual Benchmark Difference
Asset-Backed Securities 1.4% 0.5% +0.9%
Commercial Mortgage-Backed Securities 0.7% 2.0% -1.3%
Emerging Market Debt 10.1% 6.6% +3.5%
High Yield 13.1% 7.7% +5.4%
Mortgage-Backed Securities 4.3% 0.4% +3.9%
Non-U.S. Corporate 6.8% 7.2% -0.4%
Non-U.S. Government 8.0% 6.9% +1.1%
Term Loans 1.6% 0.0% +1.6%
U.S. Corporate 25.6% 25.9% -0.3%
U.S. Government 0.9% 3.7% -2.8%
U.S. Treasuries 16.4% 39.1% -22.7%
Affordable Housing-Wespath 8.4% 0.0% +8.4%
Other* 2.7% 0.0% +2.7%

 

* Other includes alternatives and cash.

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 FIF, 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, FIF’s expenses were equal to approximately 0.55% of the Fund’s total assets.

Risk and 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. FIF 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.

For further discussion of the Fund’s investments strategies and risks, please refer to "Principal Investment Strategies and Principal Investment Risks of the Funds — 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 December 31, 1997
Exp. Ratio 0.55% for 2015
Benchmark Barclays Capital US Universal (ex mortgage backed securities)
Fund Assets $5.48 Billion as of December 31, 2016
Holdings September 30, 2016
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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