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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
Brian Boyer Image

Brian Boyer, CFA

Director, Private Markets

  • 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 Bulger Image

Amy Bulger

Manager, Alternative Investments

  • 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 06/30/2020 )

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
U.S. Equity Fund-I Series 25.43% -1.76% 5.66% - - -
USEF-I Benchmark3 22.03% -3.48% 6.53% - - -

Strategy1,4 Performance, Net-of-Fees (as of 06/30/2020 )

As represented solely by the I Series4 As represented by the I Series beginning 1/1/19, as represented by the P Series prior to 1/1/19
  3 mo YTD 1 yr 3 yr 5 yr 10 yr
U.S. Equity (USEF) Strategy 25.43% -1.76% 5.66% 9.99% 9.59% 13.10%
USEF Strategy Benchmark3 22.03% -3.48% 6.53% 10.04% 10.03% 13.72%

Universe Comparison

U.S. Equity Strategy4 vs. Peer Group Universe

Peer Group Performance Comparison

Peer group performance comparison

Annualized Performance (Gross-of-Fees)

  QTD 1 Year 3 Year 5 Year 10 Year
U.S. Equity Strategy -21.1% -11.0% 3.8% 5.5% 10.1%
Median -21.2% -10.6% 3.0% 4.9% 9.5%
Rank in Universe 48th 56th 33rd 37th 30th
# of Observations 299 283 251 244 155

Peer Group Performance Comparison and Annualized Performance (Gross-of-Fees) data as of March 31, 2020.

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 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.


Footnotes

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

1 The performance shown is for the stated time period only. 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 Strategies 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 strategy employed by: (a) Wespath Institutional Investments (WII) through funds called the I Series funds available as of January 1, 2019; and (2) 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 strategy for the applicable P Series fund before January 1, 2019 and the strategy for the applicable I Series fund have substantially similar investment objectives and investment strategies and are referred to collectively as “the Strategy.” Thus, the Strategy performance presented reflects the actual returns of the applicable P Series fund through December 31, 2018, and the actual returns of the applicable I Series fund from January 1, 2019 onward. The performance of the applicable P Series fund after January 1, 2019 is excluded from the performance of the Strategy because, as of January 1, 2019, all Institutional Investors invest in the Strategy through the I Series fund. 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. Except as otherwise noted, the Strategy performance is net-of-fees—that is, with the deduction of investment management fees, custody fees, and administrative and overhead expenses. The I Series funds’ fees and expenses are described in the Investment Funds Description – I Series, and the P Series funds’ fees and expenses are described in the Investment Funds Description - P Series. The performance shown is for the stated time periods only. Differences in timing of transactions and market conditions prevailing at the time of investment by the applicable I Series or P Series fund could lead to divergence between the results of the I Series and P Series fund. The future performance of the I Series funds may be better or worse than the performance of the P Series funds. Factors that could affect performance differences between the I Series funds and the P Series funds include, but are not limited to, portfolio composition, strategy constraints, investor universe, size of the portfolio, fees, expenses and the timing of cash flows.

Units of the I Series funds are available to organizations related to The United Methodist 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 March 31, 2020

 

Style USEF-I Actual (%) USEF-I Benchmark (%) Difference (%)
   U.S. Equity Securities 87.7% 100% -12.3%
   Large Cap 46.5% 70.9% -24.4%
      Large Cap Core 10.1% 17.4%  
      Large Cap Growth 19.8% 34.4%  
      Large Cap Value 16.6% 19.1%  
   Mid Cap 29.9% 23.3% +6.6%
      Mid Cap Core 7.0% 7.1%  
      Mid Cap Growth 12.5% 6.7%  
      Mid Cap Value 10.4% 9.5%  
   Small Cap 11.3% 5.8% +5.5%
      Small Cap Core 1.5% 1.6%  
      Small Cap Growth 7.9% 2.4%  
      Small Cap Value 1.9% 1.8%  
Alternatives 4.2% 0.0% +4.2%
   Private Equity 1.8% 0.0%  
   Private Real Estate 2.4% 0.0%  
Cash 8.1% 0.0% +8.1%


Future asset allocations may be different than those stated above.

Characteristics

Fund Characteristics as of March 31, 2020

  USEF-I3 USEF-I Benchmark
Wgt. Mkt. Cap ($MM) $143,225 $244,231
Price/Earnings 23.7 20.8
Price to Book 2.3 2.6
Dividend Yield4 1.9% 2.2%
# of Stocks 2,530 2,976


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 March 31, 2020

USEF-I Sector Weightings

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 March 31, 2020

  USEF-I USEF-I Benchmark
Beta 1.06 1.00
R-Squared 0.99 1.00
 


Top 10 Stock Holdings as of March 31, 2020

Company Fund % % of USEF-I Benchmark
Microsoft Corporation 2.1% 4.8%
Amazon.com, Inc. 1.7% 3.3%
Apple Inc.. 1.5% 4.2%
Facebook, Inc. 1.0% 1.6%
Alphabet Inc. 1.0% 2.8%
Berkshire Hathaway Inc. 1.0% 1.4%
Johnson & Johnson 0.9% 1.4%
Netflix, Inc. 0.8% 0.6%
NVIDA Corporation 0.8% 0.6%
Teladoc Health, Inc. 0.8% 0.0%

 

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 Annual Fund Operating Expenses information set forth above is based on actual asset balances, fees and expenses, and various other factors. This information is as of December 31, 2019. The Fund Manager expects that the Annual Fund Operating Expenses for 2020 will not be materially different. There is no guarantee that the Fund’s actual Annual Fund Operating Expenses will match the amounts reflected. 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 third party fees.

All fees and expenses of the Fund are deducted from the Fund’s net asset value. The fees and expenses paid by the Fund include external investment management fees paid to subadvisors, and the fund's prorated portion of the bank custodial fees and administrative and overhead expenses incurred by the overall Wespath Benefits and Investments (WBI) organization in connection with providing investment, operating and administrative support to the Fund and other funds, and the cost of WBI’s and its subsidiaries’ other activities and operations. These expenses are paid directly by the Fund, 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. More information about the calculation of these fees and expenses is available in the definition of Expense Ratio set forth in the Glossary of Terms of the Investment Funds Description – I Series.