U.S. Equity Fund (USEF)
Fund Characteristics
Fund Performance (Gross)
Fund Performance (Net)
Risk and Disclosures
Fund Objective, Strategy and Holdings
- Earn long-term capital appreciation from a broadly diversified portfolio of primarily U.S. stocks.
- Holds securities of publicly-traded U.S. based real estate investment trusts (REITs), limited partnership interests in private U.S. real estate and other private investments (venture capital, buyouts, etc.) of U.S. companies.
- Holds equity index futures of U.S. stock indexes.
Management
The U.S. Equity Fund (USEF) invests with investment managers that specialize in broadly diversified strategies. USEF also invests with more than a dozen general partners through its real estate and private equity investments. Approximately 25% of the fund holds passive indexes. Wespath engages the services of active investment managers for the other 75% of the fund. These managers rely on professional judgment that involves the use of fundamental analysis to select securities. They seek to invest in attractively valued companies that represent above-average long-term investment opportunities. Each active manager has an objective to outperform specific performance benchmarks related to their investment style.
Asset Managers
* Signatory to the United Nations Principles for Responsible Investment
Performance Objective
The performance objective for USEF is to produce a return that, on average, exceeds that of the Russell 3000 Index (hereinafter referred to as “Benchmark”) by 0.75% on average per year, net of all fees, over a market cycle of three to five years. The Benchmark is comprised of the 3,000 largest U.S.-domiciled companies based on market value as of June 30 of each year.
Performance Review
During the first quarter, the performance of the fund (+12.0%) trailed that of its benchmark by 0.9%. The relative underperformance was primarily attritutable to the fund's allocation to private equity and real estate.
Fund Holdings
| Top 10 Stock Holdings as of 3/31/2012 |
| Company |
Fund % |
| Apple Inc. |
2.3% |
| Microsoft Corp |
1.3% |
| Google Inc. |
1.1% |
| Exxon Mobile Corp |
1.1% |
| Qualcomm Inc. |
1.0% |
| Johnson & Johnson |
0.9% |
| IBM |
0.8% |
| JP Morgan Chase & Co. |
0.8% |
| Wells Fargo & Co. |
0.8% |
| Coca-Cola Co. |
0.7% |
Complete list of fund holdings PDF
Fund Statistics as of 3/31/2012
| |
USEF |
Benchmark |
| Price/Earnings |
19.1 |
17.1 |
| Price to Book |
2.3 |
2.2 |
| Dividend Yield |
1.5% |
1.9% |
Risk Characteristics as of 3/31/2012
| |
USEF |
Benchmark |
| Beta |
1.14 |
1.09 |
| R-Squared |
1.00 |
1.00 |
Fund Performance
Performance, Gross of Fees
U.S. Equity Fund – March 31, 2012
Gross of Fees
Source: BNY Mellon
The accompanying chart represents the range of investment returns for the BNY Mellon U.S. Master Trust Universe for U.S. Equity asset pools. BNY Mellon provides a fund-level tracking service used to compare Wespath's actual gross of fees performance for its U.S. equity strategy to the performance of similar asset pools of other institutional investors. As of March 31, 2012, the Universe consisted of data for 519 corporate, foundation, endowment, public, Taft-Hartley and health care plans updated through May 2, 2012.
1 For purposes of reflecting the historical performance of USEF’s current investment strategy, the performance chart and tables do not include the annual performance from year to year for USEF prior to January 1, 2006. Instead, for the period prior to January 1, 2006, the performance chart and tables show the annual performance from year to year of the domestic equity segments of the Multiple Asset Fund (MAF) and MAF’s predecessor, the Diversified Investment Fund (DIF). The reason for reporting the historical returns in this manner is that the Fund Manager applied an investment strategy for the domestic equity segment of MAF and DIF that is more similar to the strategy that has been applied to USEF since January 1, 2006 than the investment strategy used by the Fund prior to January 1, 2006.
Performance, Net of Fees - April 30, 2012
| |
3 mo |
YTD |
1 yr |
3 yr |
5 yr |
10 yr |
| U.S. Equity Fund |
5.6%
|
11.2%
|
1.3%
|
17.4%
|
1.1%
|
5.0%
|
| Russell 3000 Index |
6.7%
|
12.1%
|
3.4% |
19.9% |
1.2%
|
5.2%
|
See Risks and Disclosures for more information regarding Net of Fees Performance.
Capitalization Weightings as of 3/31/12:
Sector Weightings as of 3/31/12:
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 USEF, 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 2011, USEF’s expenses were approximately 0.71% 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. USEF 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 — US 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 additionally, losses could result from the reinvestment of the cash collateral received on loaned securities.
Gross of Fees Performance
Since January 1, 2006, Wespath has applied a more diversified investment strategy, including the use of multiple investment managers, in managing USEF. The performance chart and table show the actual compounded annual rate of return of the fund since January 1, 2006. For years prior to January 1, 2006, the performance chart and table show the actual compounded annual rate of return for the same diversified, multi-manager strategy applied to the U.S. equity segment of other funds managed by Wespath. Please refer to the Wespath Investment Funds Description for additional information regarding performance.
Net of Fees Performance
The net of fees performance for USEF includes the actual compounded annual rate of return for the fund since January 1, 2001. This includes the actual performance of the fund from January 1, 2001 to December 31, 2005 when the entire fund used a passive index strategy. The fund discontinued using this passive index strategy on January 1, 2006 and replaced it with the diversified multi-manager strategy used by other funds managed by Wespath.
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, pornography, weapons, or the management or operation of prison facilities.