Dear Friends in Christ,

We recognize that the current banking turmoil is causing unsettled markets and undoubtedly concerns about your investments. WELS Investment Funds retains Vanguard Institutional Advisory Services to assist in managing our long-term portfolios. Below is information from Vanguard that helps explain what is happening in the aftermath of Silicon Valley Bank’s (SVB) and Signature Bank of New York’s recent collapse.

The impact of the SVB and Signature Bank situation on Vanguard funds

The securities, both stocks and bonds, issued by SVB Financial Group (parent company of SVB) and Signature Bank, represent only 0.03% and 0.01% of U.S. domiciled Vanguard fund assets, respectively, as of February 28, 2023. The stocks’ decline and trading halt and the failure of the banks will impact fund’s differently and to varying degrees.

The U.S. domiciled Vanguard funds that hold SVB Financial Group and Signature Bank of New York stock or bonds all have less than 1% of their assets invested in these securities and therefore we expect only modest impact. Most of Vanguard’s exposure to SVB Financial Group and Signature Bank securities are in index products where Vanguard invests in line with the benchmark. Within our active funds, given the diversified nature of fund holdings and the small exposure to the impacted securities, we expect limited impacts to overall fund performance.

Investment strategies to keep in mind

• When there is breaking news about the economy or financial markets, it tends to be priced into the market right away, considering the open market valuation of each company, sector, and asset class, as well as the future expectations for the company, sector, and asset class.
• Trading based on breaking news—be it within five minutes or five hours after the news comes out—is likely not a recipe for success.
• Risk management is central to investment management. All Vanguard funds are subject to rigorous risk oversight and analysis. Investors should take a long-term view. As explained in Vanguard’s principles for investing success, investors are well-served by a long-term outlook, perspective, and discipline.

If you have further questions or need additional information regarding your WELS Investment Funds account please contact me at 414-256-3206 or via email at [email protected].

In Christian service,

James A. Holm, CFP^®
Executive Director