5 Things to Know About Wespath’s New International Equity Index Fund for Institutional Investors

   By Hoa Quach, CFA
   Director, Public Markets

   Andrew Steedman, CFA
   Senior Analyst, Investment Management
 

September 10, 2025

As some readers may have heard already, Wespath is expanding its investment lineup with the launch of the International Equity Index Fund – I Series (IEIF-I), a passively managed fund designed to meet the evolving needs of the mission-driven nonprofit organizations we serve.

IEIF-I is slated to launch on October 1, 2025. It is Wespath’s first passive non-U.S. fund for institutional investors, underscoring our commitment to providing clients with a breadth of values-aligned investment options. Here are five key things to know about this new offering:

1. It’s a Passive, Cost-Effective Option

As mentioned, IEIF-I is a passive fund, meaning it tracks a broad market index and seeks to deliver market-rate returns. Passive funds also tend to have lower fees and expenses compared to their actively managed counterparts.

While a passive strategy inherently forgoes the potential for long-term excess return that active strategies seek to achieve, they can be valuable options for investors who want cost-effective, low-active-risk exposure to a particular market. “Active risk” generally refers to the additional risk taken in pursuit of excess returns above the market benchmark. As with any investment strategy, an investor’s appetite for active risk depends on its own unique spending needs, time horizon and other factors.

2. It’s Benchmarked to the MSCI World ex-U.S. Index

IEIF-I tracks the MSCI World ex-U.S. Index, which covers large - and mid-cap companies across 22 of the 23 countries that index provider MSCI defines as developed markets (excluding the United States).

This benchmark was selected for its breadth of coverage and alignment with investor expectations. It is a mainstream index used by many international equity strategies, ensuring a standardized comparison for performance evaluation. And it covers approximately 85% of the accessible equity market cap of the countries it includes, providing investors with broad exposure to international developed stocks.

3. It’s Consistent with Our Investment Philosophy

In tracking the MSCI World ex-U.S. Index, IEIF-I allows investors to gain access to international equities outside of areas where active management is most effective. Notably, the benchmark does not include emerging markets or small-cap stocks. These are two areas of the public equity market where active management has consistently shown its potential to generate excess returns over the long term.

This is consistent with our investment philosophy, especially our conviction in “thoughtfully blending active and passive management.” We believe in investing passively in efficient markets to reduce costs, and actively where skilled managers can add meaningful value. Emerging markets, for instance, have more inefficiencies, such as less analyst coverage and lower liquidity, making it more likely for active managers to find opportunities and outperform benchmarks.

4. It Complements and Enhances Existing International Equity Options

IEIF-I plays a complementary role alongside Wespath’s International Equity Fund – I Series (IEF-I), which includes actively managed strategies. Naturally, the launch of IEIF-I provides another choice for investors who want to further customize their allocation, risk exposure, and blend of active and passive management within the international equity portion of their portfolios.

But we believe IEIF-I also enhances our international equity offerings across the board. In fact, IEF-I itself will invest in IEIF-I to achieve its own target allocation to passive management. This restructuring consolidates the existing passive strategies within IEF-I, lowering the management fees IEF-I will pay within its passive component. For IEF-I investors who want to maintain their exposure to active management through that fund, this adjustment is an enhancement that improves efficiency within the fund without changing its overall allocations or objectives.

5. It’s Values Aligned

Like Wespath’s other public equity funds, IEIF-I will include values-based ethical exclusions. This means investors can achieve broad international equity exposure while maintaining alignment with faith-based principles. These exclusions are built into the fund’s structure and manager mandate, ensuring consistency across Wespath’s investment lineup.

Final Thoughts

IEIF-I reflects Wespath’s commitment to offering values-aligned, cost-effective investment solutions that can help support the missions of the nonprofit organizations we serve. For nonprofit institutions currently considering their options for international equity exposure, this fund is a timely and strategic addition.

If you would like to learn more about IEIF-I or any of Wespath’s other investment options, our team is happy to discuss. You can contact Wespath here.