International Equity Fund (IEF)

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

Fund Objective, Strategy and Holdings

  • The International Equity Fund seeks to earn long-term capital appreciation primarily from a broadly diversified portfolio of foreign equities.
  • The Fund holds real estate investment trusts (REITs) and interests in private real estate and private equity partnerships located in foreign countries.

Management

The Fund invests with strategies that include developed markets, emerging markets and international small-cap. The approach primarily uses active management to invest fund assets among different countries and/or regions of the world. The Fund's managers seek to invest in attractively valued companies that represent long-term above-average investment opportunities.

Asset Managers

* Signatory to the United Nations Principles for Responsible Investment

Performance Review

For the fourth quarter, the fund’s underweighting of several large European banking and insurance companies detracted from performance as rising interest rates saw significant stock price increases for the European financial sector. In addition, the fund’s holdings of a Japanese technology company and a Hong Kong-based insurance company incurred significant declines, which also detracted. Finally, the fund’s allocation to private equity and private real estate, along with the collective below-benchmark performance of stocks excluded for ethical reasons, contributed positively to the fund’s performance, although the application of the fund’s daily valuation policy (see here) detracted from results.

Fund Holdings as of December 31, 2016

Top 10 Stock Holdings

Company Country Fund %
AIA Group Limited Hong Kong 1.3%
Taiwan Semiconductor Manufacturing Taiwan 1.0%
SoftBank Group Corp. Japan 0.9%
ASML Holding NV Netherlands 0.9%
Compagnie Financiere Richemont SA Switzerland 0.8%
Industria de Diseno Textil, S.A. Spain 0.8%
Nestle S.A. Switzerland 0.7%
L'Oréal SA France 0.6%
Royal Dutch Shell Plc United Kingdom 0.6%
Genmab A/S Denmark 0.6%

Holdings-Based Regional Allocations1 as of December 31, 2016

Region Actual Benchmark Difference
Europe (ex-United Kingdom) 30.7% 31.3% -0.6%
Emerging Markets2 24.4% 22.7% +1.7%
Japan 14.1% 17.7% -3.6%
United Kingdom 10.9% 12.7% -1.8%
Pacific (ex-Japan) 9.6% 8.4% +1.2%
Canada 5.7% 7.2% -1.5%
United States 1.5% 0.0% +1.5%
Frontier 0.5% 0.0% +0.5%
Unassigned 0.0% 0.0%   0.0% 
Cash (equitized) 2.6% 0.0%  
 

Holdings-Based Sector/Industry Allocations as of December 31, 2016

Sector/Industry Actual Benchmark Difference
REITs3 6.3% 4.3% +2.0%
Private Equity 2.7% 0.0% +2.7%
Private Real Estate 2.8% 0.0% +2.8%
 

Holdings-Based Style Allocations as of December 31, 2016

Style Actual Benchmark Difference
Large Cap (>$20Bil) 48.6% 52.7% -4.1%
Mid Cap ($5Bil - $20Bil) 29.3% 27.5% +1.8%
Small Cap (<$5Bil) 19.5% 19.8% -0.3%
Cash (equitized) 2.6% 0.0%  

1 Public securities only—alternatives and fund cash account not included.
2 Emerging Market includes frontier markets, unassigned securities, cash and alternatives.
3 Real Estate Investment Trusts (REITs) includes Real Estate Management and Development.
 
 

Fund Performance

Performance, Gross of Fees

International Equity Fund – December 31, 2016

IEF_chart1
 
The accompanying chart represents the range of investment returns for the BNY Mellon Master Trust Universe for non-U.S. Equity manager asset pools. BNY Mellon provides a fund-level tracking service used to compare Wespath's actual gross of fees performance for its International Equity 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
International Equity Fund
-2.31%
6.02%
6.02%
-2.29%
5.40%
1.72%
Benchmark2
-1.57%
4.41%
4.41% -1.44%
5.35%
1.27%
 
2 On January 1, 2008, the benchmark for the International Equity Fund became the MSCI All Country World Index (ACWI) ex USA Investable Market Index (IMI). From January 1, 2006 through 2007, the benchmark is the MSCI ACWI ex USA Index. Prior to 2006, the benchmark is the MSCI EAFE Index.
 
See Risk and Disclosures for more information regarding Net of Fees Performance.
 

Fund Characteristics as of December 31, 2016

  IEF3 Benchmark
Wgt. Mkt. Cap ($MM) $41,546 $45,936
Price/Earnings 22.8 22.6
Price to Book 1.8 1.6
Dividend Yield4 2.3% 2.9%
# of Stocks 2,931 6,138
 
3 Reflects the portion of the fund portfolio that is invested in public equities and REITs.
 
Does not reflect the deduction of fees.
 

Risk Characteristics as of December 31, 2016

Statistics (trailing 5 years) IEF Benchmark
Beta 0.97 -
R-Squared 0.97 -
 

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 IEF, 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, IEF’s expenses were approximately 0.76% 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. IEF 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.

For further discussion of the Fund’s investments strategies and risks, please refer to "Principal Investment Strategies and Principal Investment Risks of the Funds — International Equities 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.

Valuation of IEF Units

In the daily valuation of IEF 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 IEF’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. IEF’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.

Benchmark

The benchmark for the Fund was a blend of the MSCI EAFE and MSCI Emerging Markets Indexes from January 1, 2001 to December 31, 2005, was the MSCI ACWI ex US Index from January 1, 2006 to December 31, 2007 and became the ACWI ex USA IMI Index on January 1, 2008.

Fund Facts

Inception December 31, 1997
Exp. Ratio 0.76% for 2015
Benchmark Morgan Stanley Capital International All Country World (MSCI ACWI) ex-USA IMI
Fund Assets $4.81 Billion as of January 31, 2017
Index Weight of Stocks Ineligible for Purchase 5.58% as of December 31, 2016
Holdings December 31, 2016
Unit Price History Wespath Funds Price History
For More Information Investment Funds Description
 

Fund Managers

brian_boyer

Brian Boyer, CFA

Director, Equities
With Wespath since 2003
B.A. and B.E. from Dartmouth College
MBA from The Wharton School at the University of Pennsylvania
CFA Charterholder
 
amy_bulger01

Amy Bulger

Manager, Alternative Investments
With Wespath since 2013
B.S. from Northern Illinois University
MBA from Kellstadt Graduate School of Business at DePaul University
  
mark_warren

Mark Warren, CFA, CIMA

Manager, Public Equities
With Wespath since 2015
B.S. from Purdue University
CFA Charterholder
CIMA Certification
 
 
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