Insights and Commentary from Wespath

The white papers and thought leadership articles published prior to 2019 were created under the Wespath Investment Management brand name. Upon the January 2019 launch of Wespath Institutional Investments, the Wespath Investment Management brand name was discontinued.


In this series of white papers and thought leadership articles, Wespath Institutional Investments provides its views on topical issues, market trends and ways it executes an investment program that aspires to produce excellent investment returns aligned with values.
2017-2018 Sustainable Investment Report—Creating a More Sustainable Global Economy – Wespath’s 2017-2018 Sustainable Investment Report takes a deep dive into its work to seek positive financial returns, while also seeking a positive impact on the world around us. This report is also Wespath’s first to incorporate the Task Force on Climate-related Financial Disclosures (TCFD) framework. (Posted June 24, 2019)
Wespath ‘Transition Ready’ Strategy—Investing for a Low-Carbon Future – Wespath believes that a global transition to a low-carbon economy is underway, creating winners and losers across companies, industries and countries and impacting investment returns. This belief inspired Wespath to partner with BlackRock, the world’s largest asset manager, to develop a new way of investing. In this interview, Juan Lois, Manager, Impact Investments, and Kaitlin Bergan, Vice President of BlackRock’s Institutional Products Group, discuss the development, philosophy and custom framework behind the new “Transition Ready” strategy. (Posted June 6, 2019)
Investing for Endowments and Foundations – Wespath understands that prudent investing for endowments and foundations is different from prudent investing for retirement plans. Endowments and foundations exist in perpetuity and must address the challenge of finding the correct balance of risk and rewards in the management of their assets to support their ability to fulfill their mission for generations into the future. This paper by Chief Investment Officer Dave Zellner describes Wespath's flexibility to execute a strategy customized to meet the unique needs of each client. (Posted January 9, 2018)
ESG Integration in External Asset Manager Selection – Wespath believes assessing an external asset manager’s ESG competencies during the selection process is an important element of enhancing long-term returns and mitigating investment risks. In this report, Nick Abel, Sustainable Investment Specialist, and Juan Lois, Research Analyst, Sustainable Investment Strategies, explain how Wespath aims to uncover managers’ ESG strengths throughout this process. (Posted December 13, 2017)
The Benefits of International Investing – There is an ongoing global shift in financial markets, with a greater share of global investment opportunity and economic growth coming from outside the United States. This shift is influencing long-term investors who may benefit from increased returns and from reduced portfolio risk by investing in international markets. Mark Warren, Manager, Public Equities, explains. (Posted November 17, 2017)
ESG Integration—Evaluating and Monitoring External Asset Manager Performance – This report outlines Wespath’s ESG Appraisal, the internal process we developed to benchmark how our external asset managers integrate environmental, social and governance (ESG) factors into investment decision-making. It helps us understand how ESG integration filters down from our managers’ organizational policies to everyday investment decision-making, as we believe it positively affects long-term performance. (Posted March 27, 2017)
2015-2016 Sustainable Investment Report – This report provides a comprehensive overview of Wespath’s sustainable investment activities throughout 2015 and 2016. Wespath incorporates the consideration of environmental, social and governance (ESG) factors into investments across asset classes and in the selection of external asset managers. (Posted February 9, 2017)
Did Your Asset Manager Choose an Appropriate Benchmark? – Choosing an appropriate benchmark is essential for providing investors a baseline for evaluating an asset manager’s success over the long-term. An inappropriate benchmark can make a skilled manager look ineffective or an underperforming manager look capable. However, choosing the right benchmark is subjective and not always straight-forward—it requires careful consideration between the asset owner and investment manager. (Posted January 11, 2017)
Case Study: Shareholder Engagement—Identifying Human Rights Risks – This paper contains practical learnings and engagement questions to five key challenges faced by the extractives sector when implementing the U.N. Guiding Principles on Business and Human Rights (Guiding Principles). Wespath staff visited Newmont Mining Corporation’s (Newmont) mines in Peru to learn first-hand how one of the world’s largest gold producers integrates human rights concerns. Newmont’s experience in Peru demonstrates that a company can face real conflict despite its best efforts to faithfully implement the Guiding Principles. The insights gained from this field visit can help investors better understand how global companies in multiple sectors are addressing human rights-related issues. (Posted August 1, 2016)
The New "SRI": Sustainable and Responsible Investment – For many years, religious and other values-based investors avoided investments likely to directly or indirectly support activities that were deemed unethical, manufactured harmful products or provided harmful services. Applying these types of ethical exclusions—or social screens—became known as Socially Responsible Investing or "SRI." Today, a new breed of investors is beginning to exert its influence across the investment landscape. This White Paper examines how the new SRI—Sustainable and Responsible Investment—is not just about excluding or screening based on an investor’s moral or ethical beliefs. Rather, it is analyzing the extent to which ESG factors will affect long-term performance and actively promoting policies and practices to thwart the adverse consequences of unsustainable activities. (Posted June 17, 2015)
Protecting Investors from Inflation—The Inflation Protection Fund Approach – This White Paper by Wespath's Director of Fixed Income Frank Holsteen examines the Inflation Protection Fund (IPF), which seeks to provide investors with current income while protecting principal from loss of purchasing power due to inflation. (Posted January 11, 2016)
Determining an Appropriate Benchmark for Private Real Estate Investments – In order to assess the benefits of adding private real estate to a broad-based equity portfolio, it is necessary to choose an appropriate benchmark to assess performance of the asset class. This White Paper by Wespath Alternative Investments Manager Amy Bulger examines the process for selecting benchmarks broadly and the challenges of applying that process to private real estate portfolios. (Posted April 23, 2014)
To Serve the Present Age: Socially Responsible Investing—2013 in Review – Using sound fiduciary principles and a variety of advocacy tools, Wespath seeks to maximize shareholder value and attain high standards of corporate responsibility. This White Paper details our shareholder advocacy work for the year 2013. (Posted April 1, 2014)
Enhancing Shareholder Value: A Case for Board Diversity – The civil rights movement of the 1950s and ‘60s ushered in an era of new employment practices in this country. This shift in employment practices opened the door for more women and minorities to acquire the professional work experience necessary to qualify them to serve on company boards of directors. But despite these legislative changes, women and racial/ethnic minorities currently remain under-represented on company boards of directors. This White Paper explores the research regarding board diversity and best practice trends that indicates having a diverse racial/ethnic/gender presence on company boards has a positive impact on a company’s financial performance. (Posted February 20, 2015)
Understanding Fixed Income Returns: Past, Present and Future – In today’s economic environment, much discussion is centered around the impact of rising interest rates on fixed income portfolios. This White Paper looks at how bond portfolios have performed over the years, the current interest rate environment and provides a framework for forecasting returns given the concern of rising interest rates in the future. (Posted February 10, 2014)
Secondary Funds: Adding Value to Private Equity – An important element of Wespath’s investment philosophy is achieving diversification across a variety of asset classes; private equity serves an important role in achieving diversification within a portfolio of public equities. This White Paper by Wespath's director of equities Brian Boyer, CFA, takes a closer look at private equity investments. (Posted January 8, 2014)
An Introduction to Proxy Voting – Public companies hold annual meetings to conduct important business regarding corporate governance and other issues. Because the majority of shareholders do not attend these annual meetings, most voting takes place by proxy. This article serves as an introduction to the proxy voting process. (Posted March 6, 2014)
Multi-Manager Portfolios: Are Your Active Risks Appropriate? – Carefully monitoring active risk exposures within each of its investment funds helps Wespath deliver competitive, risk-adjusted investment performance. The following White Paper describes specific active risk monitoring techniques Wespath utilizes at the individual investment manager level and at the multi-manager fund level. (Posted October 31, 2013)
Wespath’s Hedge Fund Strategy—The Path Not Followed – While a wide variety of institutional investors embrace hedge fund investing as an integral and "sophisticated" element of their overall program, Wespath has concluded that the potential risk-adjusted return opportunities do not justify the requisite resources and costs required for prudently engaging in this popular form of investing. In the following White Paper, Dave Zellner, Wespath's Chief Investment Officer, explains our rationale for declining to establish a significant investment of the assets entrusted to us by our stakeholders in hedge funds. (Posted June 7, 2013)
Fixed-Income Securities: A Foundation for Success – This White Paper discusses the role fixed-income investments play in helping achieve financial objectives. It aims to help stakeholders understand fixed-income securities, their history, and develop a basic comprehension of their fundamental principles. (Posted November 28, 2012)
Consideration of Alignment of Interest in the Selection of Alternative Investment Managers – This White Paper by Wespath's director of equities Brian Boyer, CFA, addresses the issue of why alignment of interest is crucial when considering placing capital with alternative investment managers. It also summarizes the due diligence "best practices" used by Wespath in its assessment of alternative managers’ fiduciary standards. Wespath invests primarily in two alternative asset fund types: private equity and private real estate. (Posted October 18, 2012)
The General Board of Pension and Health Benefits and the United Nations’ Principles for Responsible Investment – In 2005, Kofi Annan, then the United Nations Secretary-General, invited the General Board of Pension and Health Benefits of The United Methodist Church (General Board) to join 20 institutional investors in creating the United Nations Principles for Responsible Investment (UNPRI). This document outlines the six Principles and the ways in which Wespath Benefits and Investments applies them. (Posted January 18, 2012)
The Case for Alternative Investments in a Diversified Portfolio – This White Paper by Wespath's director of equities Brian Boyer, CFA, examines two types of alternative investments—real assets and private equity—along with best practices for administering these alternative investments in public equity portfolios. It also describes how Wespath’s alternative investment strategies add value to our public equity portfolios, and how the Wespath investment team has established a solid track record in both real estate and private equity investments. (Posted January 2, 2013)
Investor Rationale for Responsible Investment – As an institutional investor, Wespath adheres to our obligation as a prudent fiduciary. As a general agency of The United Methodist Church, we also understand that financial transactions carry ethical implications. These two perspectives form the basis of our well-rounded investment strategy, which utilizes traditional financial metrics and also considers the investment risk caused by environmental, social and corporate governance (ESG) practices. The topics covered in the Investor Rationale for Responsible Investment document are also available as individual PDFs:
The Responsible Investing Penalty: Myth or Reality? – This White Paper, authored by Wespath Chief Investment Officer Dave Zellner, discusses the importance of environmental, social and governance (ESG) issues as they relate to corporate responsibility and long-term sustainable business practices. Increasingly, institutional investors have come to recognize that an understanding of ESG factors is critical to evaluating business sustainability and contributes to investment performance. (Posted March 18, 2011)

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