The following individuals are responsible for the selection and monitoring of external asset managers:
Nízida Arriaga, CFA
Inflation Protection Fund-I Series (IPF-I) invests with five external investment firms that invest in assets that are expected to provide returns in excess of inflation over time. The Fund has 40% of its assets allocated to an enhanced U.S. TIPS strategy. The remainder is invested mostly in active strategies that hold inflation-linked bonds from both developed and developing countries. The Fund also attempts to modestly improve investment returns by investing up to 10% of its assets in commodity futures contracts and, up to 10% in senior secured loans.
* Signatory to the United Nations Principles for Responsible Investment
Please refer to the Investment Funds Description – I Series for a detailed description of the investment strategies used in managing the Fund.
** 80% Bloomberg Barclays World Government Inflation Linked Bond Index (Hedged), 10% Bloomberg Barclays Emerging Market Tradeable Inflation Linked Bond Index (Unhedged) and 10% Bloomberg Commodity Index.
|Inception||January 1, 2019|
|Exp. Ratio||0.43% for 2019 (Estimated)|
|Fund Assets||$192 Million as of January 31, 2020|
|Holdings||Holdings as of December 31, 2019|
|Unit Price History||I Series Price History|
|For More Information||Summary Fund Descriptions - I Series and Investment Funds Description - I Series and the related Statement of Additional Information.|
The Fund commenced operations on January 1, 2019 and, as a result, performance information for the Fund is not presented herein. The information in the charts below does not represent the performance of the Fund. The Fund is advised by the Fund Manager. The Fund Manager is related to UMC Benefit Board, Inc., which serves as the adviser to the Inflation Protection Fund (the "Related Fund"). The Related Fund is managed, and has historically been managed, with substantially similar investment styles, objectives, policies, and strategies to those that are used to manage the Fund. The Adviser and the adviser to the Related Fund are part of the overall Wespath organization and rely on certain Wespath Benefits and Investments shared employees, including internal fund managers, and substantially similar sub advisers to execute substantially similar investment strategies on behalf of different categories of investors.
The Fund is providing this related performance information because of the similarities between the Fund and the Related Fund. This information may be helpful in evaluating the Fund’s risks by demonstrating how the Related Fund has performed historically. The performance of the Related Fund is not the performance of the Fund. Future performance of the Fund may be better or worse than the performance of the Related Fund. Factors that could affect performance differences between the Fund and the Related Fund include, but are not limited to, portfolio composition, size of the portfolio, fees, expenses and the timing of cash flow.
|3 mo||YTD||1 yr||3 yr||5 yr||10 yr|
|Inflation Protection Fund||1.69%||8.86%||8.86%||3.60%||2.62%||3.36%|
Inflation Protection Fund-I Series vs. Peer Group Universe
|QTD||1 Year||3 Year||5 Year||10 Year|
|Inflation Protection Fund||1.7%||8.9%||3.6%||2.6%||3.4%|
|Rank in Universe||7th||11th||6th||13th||7th|
|# of Observations||216||215||189||159||95|
Peer Group Performance Comparison and Annualized Performance (Gross-of-Fees) data as of December 31, 2019.
Source: Lipper. The adjacent chart represents the range of investment returns for the Lipper mutual fund universe for inflation protected bonds. Wespath Benefits and Investment’s traditional source of comparative performance information, BNY Mellon, has insufficient data to provide a comparison for inflation-protected asset pools managed by other institutional investors.
See Risk and Disclosures for more information regarding Net of Fees Performance.
The performance shown is for the stated time period only. Historical returns are not indicative of future performance. Differences in timing of transactions and market conditions prevailing at the time of investment could lead to different results. The past performance of the Related Fund is presented net of fees – that is, with the deduction of external investment management fees, custody fees, and administrative and operating expenses. The inception date of the Related Fund was January 5, 2004. The investments of the Related Fund may vary substantially from those in the Fund benchmark. The benchmark is based on broad-based securities market indices, which are unmanaged and are not subject to fees and expenses typically associated with investment funds. Investors cannot invest directly in the index used as the Fund benchmark.
4 The Related Fund performance benchmark is 80% Bloomberg Barclays World Government Inflation Linked Bond Index (Hedged), 10% Bloomberg Barclays Emerging Market Tradeable Inflation Linked Bond Index (Unhedged) and 10% Bloomberg Commodity Index.
|Global Inflation-Linked Bonds (Developed)||13.6%||43.8%||-30.2%|
|Senior Secured Loans (Floating Rate)||9.7%||0.0%||+9.7%|
|Emerging Market Inflation-Linked Bonds||8.9%||10.0%||-1.1%|
Future asset allocations may be different than those stated above.
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. IPF-I is subject to the following principal investment risks: market risk, investment style risk, security-specific risk, credit risk, country risk, currency risk, derivatives risk, interest rate risk, deflation risk, liquidity risk and prepayment risk.
Because U.S. Treasury Inflation Protected Securities (TIPS) are debt obligations issued and backed by the full faith and credit of the U.S. Government, they are considered to have low credit or default risk. Inflation Protected Securities issued by foreign governments, particularly governments of emerging countries, risk the possibility of loss due to credit risk.
Historical returns are not indicative of future performance. For further discussion of the Fund’s investment strategies and risks, please refer to "Principal Investment Strategies and Principal Investment Risks of the Funds — Inflation Protection Fund - I Series" in the Investment Funds Description – I Series. This is not an offer to purchase 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.
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.
The estimated expense ratio set forth above is based on projected asset balances, fees and expenses, and various other assumptions. There is no guarantee that the Fund’s actual expense ratio will match this estimate. The fund expense ratio may vary depending on, among other things, market events, portfolio 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.
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