The Georgia United Methodist Foundation and Wespath Provide Update on Recent Financial News


The Georgia United Methodist Foundation partners with Wespath Institutional Investments to give Methodist congregations and organizations in Georgia access to the Wespath I-Series of Funds. Importantly, the Foundation/Wespath is not a bank.

Below is a complete overview of Wespath’s exposure to the banks that have been in the news this week. As you will see, all of Wespath’s exposure is inside the U.S. Equity Fund (USEF), and it is very small:

The Foundation delivers advanced faith-based financial solutions in partnership with Wespath Institutional Investments. This partnership enables the Foundation to offer Georgia Methodists access to a respected team of Wespath advisors who manage one of the largest reporting faith-based pension funds in the world. Wespath (in operation since 1908) and its subsidiaries manage over $25 billion in assets (including $5 billion for more than 100 institutional clients). The Foundation/Wespath relationship enables Georgia Methodists to be good stewards of the financial resources entrusted to them by God while living out a strong Christian witness through socially responsible investment practices. Wespath Institutional Investments is a not-for-profit subsidiary of Wespath Benefits and Investments, a general agency of The United Methodist Church (UMC). Wespath Institutional Investments provides comprehensive investment solutions for United Methodist-related institutional investors, including foundations, endowments, higher education institutions, and healthcare organizations. More about Wespath Institutional Investments, including comprehensive reporting (and daily pricing) is available online here: Not-for-Profit Investment Funds | Wespath Institutional Investments.

BNY Mellon is responsible for safeguarding and administering Wespath Institutional Investments’ assets. BNY Mellon strikes a daily NAV for the funds and provides final fund level returns on a monthly basis. In addition, Wespath has obtained GIPS (Global Investment Performance Standards) compliance and verification since January 1, 2016, and Wespath completed a SOC1 audit starting in 2021.

At the Foundation, we maintain four banking relationships that allow for a diversification of functions and partnerships. The cash management strategy of the Foundation includes daily sweeps to ensure that cash held by the Foundation is responsibly invested and protected. The Foundation completes a comprehensive annual audit, and the results (three years) are published on

Additionally, all of the Foundation’s managed funds accounts are governed by an Investment Management Agreement (IMA) that is completed in partnership with each client before funds are invested.

The Foundation’s staff and Board of Trustees monitor diligence (i.e., regulatory, compliance, staffing changes, operations, business continuity, cyber security, etc.) related to Wespath on an ongoing basis. The Foundation’s Board of Trustees, through the Investment Committee, monitors the relationship with Wespath through direct engagement. Members of the Foundation’s Investment Committee include individuals with investment expertise. Mr. William A. Vogel (CFA), and member of Dunwoody UMC, serves as a Trustee of the Foundation and is Chair of the Investment Committee. Mr. Vogel joined Montag & Caldwell in 1988 as a portfolio manager and research analyst. He currently serves as Managing Principal and previously served as Chief Executive Officer (from 2006 to 2018) and President (from July 1, 2009 to March 31, 2017). Additionally, I serve as a member of the Board of Directors of Wespath Benefits and Investments, and I (along with Senior Vice President and CFO Russell H. Jones) regularly communicate with Wespath’s leadership, including the leadership of Wespath Institutional Investments.

From time to time, clients ask how Wespath defines investment risk in the context of managing the assets (i.e., the philosophy around investment risk management).

The definition of investment risk is unique to each client. Wespath and the Foundation work closely with clients to understand and define any portfolio risks based upon their goals and objectives. This includes managing the client’s spending policy, determining liquidity needs, and considering potential risk-related covenants. For each portfolio (managed account), a tracking error risk budget is determined from which the investment team decides how to allocate the risk budget to high potential strategies and passively manage market sectors with low return potential. There are both “qualitative” risks (e.g., macro, manager-specific, ESG, etc.) and “quantitative” (measurable) risks (tracking error). This is the approach that is taken into account for both the Multiple Asset Fund strategy and the Foundation’s Standard Investment Model strategy.

Macro Risk Management: Senior members of Wespath’s investment team have identified five “megatrends” that we believe will influence future economic growth: demographic shifts, heightened impact from climate change and environmental stress, increasing pace of urbanization, accelerated adoption of technology, and global power shifts (developed markets to emerging markets). The team considers how these macro trends can create risks that may impact markets.

Portfolio Risk Management: Wespath reports to investors on several fund and benchmark risk-related measurements over the near- and long-term, including standard deviation, beta, R-Square, Sharpe Ratio, Tracking Error, and the Treynor Ratio. Wespath also analyzes factor exposures for its funds and constituent portfolios and assesses style drift as part of the overall fund risk analysis.

Sustainable Investment: Wespath believes that by integrating ESG (Environmental, Social, and Governance) factors within its funds and elevating its understanding, as well as its managers’ understanding, of these factors, it is mitigating risk and capitalizing on opportunities related to global changes. One example of this is the adoption of Wespath’s “Low-Carbon Transition” belief, which formally acknowledges the fiduciary obligation inherent to the world’s transition to a low-carbon economy. Subsequently, Wespath and its subsidiaries have collaborated with highly respected investment managers to invest a combined $2.44 billion (as of June 30) in strategies that they believe will provide investors with improved benchmark-relative performance related to this transition.

Management of Excessive Sustainability Risk: Wespath’s Management of Excessive Sustainability Risk (MESR) policy assists in identifying and managing ESG-related financial risks. The MESR policy recognizes that there may be instances when a particular issue, company, or industry exposes investors to high levels of controllable risk. In such instances, the Wespath Board may adopt an investment guideline that will apply additional limits regarding companies in which Wespath may invest. Wespath currently implements two guidelines under the MESR policy: Climate Change (thermal coal) and Human Rights. Wespath works with its global ESG research provider, Sustainalytics, to identify and assess the management policies and practices of companies that pose excessive sustainability risk when subject to these guidelines.

We hope you find this information helpful. In short, the Foundation/Wespath team remains in a strong position as a known and trusted partner.