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Fund Overview: 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.

Fund Managers

The following individuals are responsible for the selection and monitoring of external asset managers:

Frank Holsteen Image

Frank Holsteen

Managing Director, Investment Management

  • With Wespath since 2012
  • B.A. from Lake Forest College
Amy Bulger Image

Amy Bulger

Director, Private Markets

  • With Wespath since 2013
  • B.S. from Northern Illinois University
  • MBA from the Kellstadt Graduate School of Business at DePaul University
Mark Warren Image

Mark Warren, CFA, CIMA

Manager, Public Equities

  • With Wespath since 2015
  • B.S. from Purdue University
  • CFA Charterholder
  • CIMA Certification

Performance

Fund1,2 Performance, Net-of-Fees (as of 06/30/2023)

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
U.S. Equity Fund-I Series 7.81% 15.33% 18.85% 12.46% - -
USEF-I Benchmark3 8.39% 16.17% 18.95% 13.89% - -

Composite1,4 Performance, Net-of-Fees (as of 06/30/2023)

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
U.S. Equity (USEF) Composite 7.43% 14.72% 18.18% 12.61% 10.22% 11.59%
USEF Composite Benchmark3 8.39% 16.17% 18.95% 13.89% 11.39% 12.34%

Universe Comparison

U.S. Equity Composite4 vs. Peer Group Universe

Peer Group Performance Comparison

Peer group performance comparison

Annualized Performance (Gross-of-Fees)

  1 Year 3 Year 5 Year 10 Year
U.S. Equity Composite 18.5% 13.2% 10.8% 12.2%
Median 16.6% 12.7% 9.8% 11.2%
Rank (%) in Universe 26th 43rd 28th 21st
# of Observations 250 223 203 171

Peer Group Performance Comparison and Annualized Performance (Gross-of-Fees) data as of June 30, 2023.

Source: BNY Mellon. The adjacent chart represents the range of investment returns for the BNY Mellon Master Trust Universe (Universe) for U.S. Equity manager asset pools. BNY Mellon provides a fund-level tracking service used to compare the actual gross-of-fees performance for its U.S. Equity Composite to the performance of similar asset pools of other institutional investors. The Universe includes corporate, foundation, endowment, public, Taft-Hartley and health care plans.


Footnotes

See Risks and Disclosures for more information regarding net-of-fees performance.

Wespath Benefits and Investments (“Wespath”) is a general agency of The United Methodist Church, a 501(c)(3) tax-exempt organization. Wespath administers benefit plans and together with its subsidiaries, UMC Benefit Board, Inc. (“UMCBB”) and Wespath Institutional Investments, LLC (“WII”) invests (or provides back-office services for) assets on behalf of benefit plan participants and beneficiaries, plan sponsors and other institutions controlled by, affiliated with or related to The United Methodist Church (the “Church”). For GIPS compliance purposes, the Firm referenced herein is defined to include Wespath, UMCBB and WII (“Firm”). Wespath claims compliance with the Global Investment Performance Standards (GIPS®). GIPS is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. To obtain a copy of Wespath’s GIPS Report, please call us at 1-847-866-4100 or e-mail us at [email protected].

1 The performance shown is for the stated time period only and computed in U.S. Dollars (USD). Historical returns are not indicative of future performance. Investment performance is presented net-of-fees—that is, with the deduction of external investment management fees, custody fees, and administrative and overhead expenses. The investments of the funds and composites may vary substantially from those in the applicable benchmark. The benchmarks are based on broad-based securities market indices, which are unmanaged, cannot be invested in and are not subject to fees and expenses typically associated with investment funds. Investments cannot be made directly in an index. This chart was produced using data from sources believed to be accurate. The bar chart and table assume reinvestment of distributions.

2 Please refer to the Investment Funds Description - I Series for more information about each Fund. This information is for informational purposes only and is not an offer to purchase securities. The investment funds are neither insured nor guaranteed by the government.

3 Benchmark descriptions can be found here.

4 The performance presented reflects the historical performance record of the composite employed by: (a) Wespath Institutional Investments (WII) through funds called the I Series funds available as of January 1, 2019; and (2) UMC Benefit Board, Inc.an affiliated entity, through funds called the P Series funds and available to certain Institutional Investors (as defined below) prior to January 1, 2019. The composite includes the applicable P Series fund before January 1, 2019. After January 1, 2019 the composite includes both the applicable P Series fund and I Series fund (asset-weighted). The composite for the applicable P Series fund and I Series fund have substantially similar investment objectives and investment strategies and are referred to collectively as “the Composite.” The P Series funds are not available to Institutional Investors other than in exceptional circumstances agreed to by the P Series funds adviser.

Historical returns are not indicative of future performance. Returns presented are time‐weighted returns. Net returns are presented net of actual fees and expenses, including transaction costs, custody fees, sub‐advisory fees, and administrative/overhead expenses and are net of withholding taxes. The portfolios in the Composite do not pay any investment management fees to Wespath. Administrative/overhead expenses are paid by the portfolios in the Composite to Wespath.

Units of the I Series funds are available to organizations related to the Church and organized and operated exclusively for religious, educational, benevolent, fraternal, charitable, or reformatory purpose: (1) no part of the net earnings of which inures to the benefit of any private shareholder or individual; or (2) which is or maintains certain pooled income funds, collective trust funds, collective investment vehicles or similar funds for the collective investment and reinvestment of assets of certain designated vehicles available for charitable investments. All such organizations shall qualify as permissible investors in a fund excepted from the definition of “investment company” contained in Section 3(c) (10) of the Investment Company Act of 1940, as amended (and are referred to as “Institutional Investors”). Certain, but not all, Institutional Investors were eligible to invest in the P Series prior to January 1, 2019.

Allocations

Holdings-Based Style Allocations as of June 30, 2023

 

Style USEF-I Actual (%) USEF-I Benchmark (%) Difference (%)
   U.S. Equity Securities      
      Mega Cap 25.9% 47.8% -21.9%
      Large Cap Core 7.1% 8.0% -0.9%
      Large Cap Growth 4.0% 4.9% -0.9%
      Large Cap Value 10.8% 10.7% +0.1%
      Mid Cap Core 12.1% 6.9% +5.2%
      Mid Cap Growth 6.3% 3.8% +2.5%
      Mid Cap Value 17.2% 12.4% +4.8%
      Small Cap Core 2.9% 1.5% +1.4%
      Small Cap Growth 5.2% 2.0% +3.2%
      Small Cap Value 2.0% 2.0% 0.0%
Alternatives 4.9% 0.0% +4.9%
Cash 1.6% 0.0% +1.6%


Future asset allocations may be different than those stated above.

Characteristics

Fund Characteristics as of June 30, 2023

  USEF-I3 USEF-I Benchmark
Wgt. Mkt. Cap ($MM) $311,843 $589,090
Price/Earnings1 25.80 21.92
Price to Book2 3.81 3.92
Dividend Yield4 1.39% 1.49%
Holdings USEF-I Holdings  

 

1 Price/Earnings is the weighted harmonic average of the price of the underlying securities as of the reported date, divided by the earnings per share of the trailing/last 12 months of the underlying securities (excluding companies with negative earnings).

2 Price to Book is the weighted harmonic average price of the underlying securities divided by the book value of the securities as of the reported date (excluding companies with negative cash flows).


3
Reflects the portion of the fund portfolio that is invested in public equities and REITs.

4 Does not reflect the deduction of fees.


Sector Weightings as of June 30, 2023

  USEF-I USEF-I Benchmark
Communication Services 5.2% 7.8%
Consumer Discretionary 9.7% 10.9%
Consumer Staples 3.7% 6.1%
Energy 4.9% 4.1%
Financials 11.8% 13.0%
Health Care 12.6% 13.5%
Industrials 12.2% 9.9%
Information Technology 25.7% 26.4%
Materials 2.5% 2.8%
Real Estate 2.2% 3.0%
Utliities 2.2% 2.5%
Alternatives 4.9% 0.0%
Cash 1.5% 0.0%
Unassigned 0.9% 0.0%

Sector weights include Private Equity and Private Real Estate categorized as Alternatives. Cash is equitized. Other includes U.S. index futures.

Fund Statistics as of June 30, 2023

  USEF-I USEF-I Benchmark
Beta 1.02 1.00
R-Squared 0.98 1.00
 


Top 10 Stock Holdings as of June 30, 2023

Company Fund % % of USEF-I Benchmark
Apple Inc. 2.67% 6.66%
Microsoft Corporation 2.65% 5.83%
Alphabet Inc. 1.47% 3.07%
Amazon.com, Inc. 1.40% 2.70%
NVIDIA Corporation 1.34% 2.31%
Super Micro Computer, Inc. 1.21% 0.03%
Tesla, Inc. 1.18% 1.66%
Berkshire Hathaway Inc. 0.99% 1.44%
Johnson & Johnson 0.78% 0.99%
JPMorgan Chase & Co. 0.72% 0.98%

 

Risks & 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-I 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.

Historical returns are not indicative of future performance. For further discussion of the Fund’s investments strategies and risks, please refer to "Principal Investment Strategies — U.S. Equity Fund-I Series" in the Investment Funds Description – I Series. This is not an offer to purchase securities.

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.

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.


Expense Ratio

The expense ratio is a measure of the annual fund operating expenses paid by the Fund expressed as a percentage of the average fair value of the Fund’s assets for the applicable year. The annual fund operating expenses consist of fees paid to subadvisor(s), and the Fund’s pro rata portion of custody fees and administrative and overhead expenses incurred by the overall Wespath Benefits and Investments organization in connection with providing investment, operating and administrative support to the Fund and the other funds available through Wespath Institutional Investments.

The expense ratio shown on the Fund Overview page is based on the prior year’s data and fee calculation methodology, which methodology was changed effective July 1, 2023. The Fund’s actual annual fund operating expenses and the related expense ratio can differ from year to year. Actual annual fund operating expenses may vary depending on, among other things, market events, Fund size, transaction costs, timing of Fund inflows and outflows, and applicable internal costs and third-party fees.

The Fund may also pay transaction costs, performance fees, interest expenses, taxes and fees on uninvested cash held in sweep accounts, which are in addition to the annual fund operating expenses. The annual fund operating expenses and these additional expenses are reflected in the Fund’s unit price and reduce the Fund’s rate of return. For further information about the Fund’s fees and expenses, including the fee calculation methodology change, please refer to the Investment Funds Description – I Series.