Monthly Economic Update: October 2015

U.S. Equity Returns

INDEX October 3 Month 1 Year 3 Year 5 Year 10 Year Russell 1000 Value TR USD 7.55 -1.91 0.53 14.52 13.26 6.75 Russell 1000 TR USD 8.09 -1.20 4.86 16.28 14.32 7.98 Russell 1000 Growth TR USD 8.61 -0.51 9.18 17.94 15.30 9.09 S&P 500 TR USD 8.44 -0.63 5.20 16.20 14.33 7.85 S&P 500 Low Quality TR USD 8.67 -1.91 -0.26 19.04 14.73 9.74 S&P 500 High Quality TR USD 6.19 -0.28 6.67 17.14 15.49 8.16

Russell 2000 Value TR USD 5.60 -3.06 -2.88 11.65 10.53 6.19 Russell 2000 TR USD 5.63 -5.86 0.34 13.90 12.06 7.47 Russell 2000 Growth TR USD 5.67 -8.50 3.52 16.16 13.56 8.67

2

Source: Morningstar Direct Returns as of 10/31/2015

International Equity Returns

INDEX October 3 Month 1 Year 3 Year 5 Year 10 Year MSCI EAFE Value NR USD 7.36 -6.90 -4.23 6.75 3.73 3.12 MSCI EAFE NR USD 7.82 -5.19 -0.07 8.02 4.81 4.05 MSCI EAFE Growth NR USD 8.25 -3.52 4.13 9.24 5.81 4.92 MSCI AC Europe NR USD 7.11 -5.16 -1.13 7.08 4.22 4.07 MSCI Japan NR USD 10.09 -3.36 9.07 13.22 6.52 2.24 MSCI United Kingdom NR USD 7.29 -5.11 -3.45 5.18 5.19 4.04

MSCI Portugal NR USD 6.20 -5.97 -13.43 -9.05 -12.58 -4.00 MSCI Ireland NR USD 3.78 -4.00 17.77 19.11 15.39 -4.16 MSCI Italy NR USD 4.52 -4.00 0.65 8.04 -1.12 -1.80 MSCI Greece NR USD 10.29 -28.59 -55.98 -19.39 -31.18 -21.84 MSCI Spain NR USD 7.14 -8.15 -11.40 7.33 -1.76 2.71

MSCI EM NR USD 7.13 -5.49 -14.53 -2.87 -2.80 5.70 MSCI Brazil NR USD 5.20 -20.43 -45.97 -21.66 -18.17 0.74 MSCI Russia NR USD 6.22 -4.15 -20.92 -12.80 -8.70 -2.24 MSCI China NR USD 9.08 -5.53 -0.70 4.91 0.98 11.75 MSCI India NR USD 1.57 -6.93 -8.06 6.19 -1.81 9.50

3

Returns as of 10/31/2015 Source: Morningstar Direct

Fixed Income Returns

INDEX October 3 Month 1 Year 3 Year 5 Year 10 Year Barclays US Aggregate 1-3 Yr TR USD -0.03 0.20 0.88 0.84 1.04 2.94 Barclays US Agg Bond TR USD 0.02 0.55 1.96 1.65 3.03 4.72 Barclays Global Aggregate TR USD 0.21 0.84 -3.07 -1.47 0.61 3.89 Citi WGBI USD -0.04 1.19 -3.63 -2.66 -0.47 3.55 Barclays US Corporate High Yield TR USD 2.75 -1.67 -1.94 4.15 6.18 7.62 Barclays US High Yield Loans TR USD -0.08 -1.61 0.53 3.15 4.20 N/A

Barclays Municipal 1-3 Yr TR USD 0.14 0.50 0.90 0.94 1.13 2.47 Barclays Municipal Interm 5-10 Yr TR 0.52 1.56 2.75 2.62 3.92 4.87 Barclays Municipal TR USD 0.40 1.32 2.87 2.91 4.28 4.74 Barclays HY Muni TR USD 1.22 3.79 2.85 3.58 6.08 4.97

4

Returns as of 10/31/2015 Source: Morningstar Direct

Corporate Spreads vs. U.S. Treasuries – Monthly

5

Source: FactSet as of 10/31/2015

Average Life 1 Year 3 Years 5 Years 10 Years 30 Years

Financials AAA -- -- -- -- -- AA -1.100 -4.340 -3.930 12.480 -11.180

A -8.490 -9.460 -11.970 -16.350 -10.890

BBB 12.340 -3.490 -1.170 -14.960 -4.070

BB -112.520 -81.330 -106.360 -106.790 -106.790

B -135.590 -50.050 -32.630 -113.320 -113.320

Industrials AAA 4.080 -11.040 -6.210 -24.310 -2.770

AA 5.640 -12.670 -18.330 -10.760 -5.560

A 0.180 -5.460 -7.310 -14.150 -10.260

BBB 1.970 -5.640 -5.980 -10.510 -11.700

BB -55.740 -58.160 -69.190 -11.090 -58.510

B -107.130 -24.700 -71.780 -21.600 -21.600

Utilities AAA -- -- -- -- -- AA 1.730 -5.230 1.240 0.330 0.330

A -0.810 -2.340 6.560 -9.450 -5.240

BBB 3.070 -5.750 1.940 -9.060 -9.060

BB -152.350 -64.850 15.290 -34.110 -34.110

B 83.420 -70.720 -683.110 -215.620 -215.620 Note: -- indicates spread not available

Chart reflects change in corporate spreads vs. U.S. Treasuries from end of September to end of October. Spreads generally widened through the quarter, with the most significant widening in below investment grade credit.

Real Asset Returns

INDEX October 3 Month 1 Year 3 Year 5 Year 10 Year DJ Gbl Select REIT TR USD 5.87 2.39 5.82 10.66 11.29 DJ US Select REIT TR USD 5.83 2.99 6.87 12.36 12.56 7.53 Bloomberg Commodity TR USD -0.45 -4.73 -25.72 -15.04 -9.85 -5.10 Alerian MLP TR USD 9.69 -11.68 -30.08 -0.76 4.70 9.42

6

Returns as of 10/31/2015 Source: Morningstar Direct

GDP Growth

7

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15-10%-10%

-8%-8%

-6%-6%

-4%-4%

-2%-2%

0%0%

2%2%

4%4%

6%6%

8%8%

10%10%US Real GDP Growth Launch full data release

Quarterly Change in GDP Annual Change in GDP

Following a relatively strong second quarter, the first estimate of third quarter GDP declined to 1.5%. This could be a result of economic growth being pulled into the second quarter, which ended up having stronger growth than expected. Current expectations are for growth to rebound to 2.7% for Q4, which will put the 2015 average at 2.5%. Currently, growth for 2016 is expected to continue along this moderate, mid-2% level of growth.

Through Q3 2015, based on first estimate of Q3 GDP at 1.5%

Source: FactSet

Contribution to GDP Growth

8

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15-10%-10%

-8%-8%

-6%-6%

-4%-4%

-2%-2%

0%0%

2%2%

4%4%

6%6%

8%8%

US Contribution to GDP Growth Launch full data releaseBusiness Spending Consumer Spending Government SpendingNet Exports

Third quarter GDP was driven primarily by consumer spending. Business spending declined and detracted from growth for the quarter.

Source: FactSet

ISM Manufacturing and Non-Manufacturing Indices

9

50.10

59.10

'06 '07 '08 '09 '10 '11 '12 '13 '14 '153030

3535

4040

4545

5050

5555

6060

6565

ISM Report on Business Launch full data release

ISM Manufacturing Index ISM Non-Manufacturing Index

The Institute for Supply Management’s (ISM) Manufacturing index inched closer to the dividing line between growth and contraction, coming in at 50.1 for October. The more important ISM Non-Manufacturing index rebounded sharply to 59.1.

Through October 2015

Source: FactSet

Non-Farm Payrolls and the Unemployment Rate

10

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15-1,000

-800

-600

-400

-200

0

200

400

600

4%

5%

6%

7%

8%

9%

10%

11%

US Change in NonFarm Employment & Unemployment Rate Launch full data releaseMonthly Change in Non-Farm Employment U.S. National Unemployment Rate

The economy added an above consensus 271,000 jobs in October, and the unemployment rate decreased to 5.0%. While October surprised to the upside, August and September were revised down marginally. Expectations were for a rebound to 183,000 jobs, so the report is significantly above expectations. Along with other positive U.S. indicators, the report may provide the Fed the needed data to initiate a rate increase in December.

Through October 2015

Source: FactSet

New Unemployment Filings

11

276.00

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15200200

250250

300300

350350

400400

450450

500500

550550

600600

650650

700700Weekly Initial Unemployment Claims (000's)

The decline in new unemployment filings has generally been oscillating between 250,000 and 300,000 since April. Recent reports are not significant, as none have represented an outlier and as all have been consistent with an improving labor market. If new claims revert to and maintain levels above 300,000 in coming weeks, it could be a negative signal for the labor market.

Through October 30, 2015

Source: FactSet

Job Openings and Labor Turnover Survey (JOLTS) Report

12

5370.00

'06 '07 '08 '09 '10 '11 '12 '13 '14 '150

1,000

2,000

3,000

4,000

5,000

6,000Total Jobs Available in U.S. (000's)

The latest available government JOLTS report (which tracks the number of jobs available in the economy) shows the number of available positions declined to 5.37 million jobs. While this is a reduction from the all-time high (measured in July at 5.75 million jobs), it remains at a level consistent with future job growth.

Through August 31, 2015

Source: FactSet

Capacity Utilization

13

77.54

'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '1465%65%

70%70%

75%75%

80%80%

85%85%

90%90%

US Capacity Utilization Launch full data release

U.S. Capacity Utilization

Capacity utilization is an indirect leading indicator of hiring. In theory, there is a limit to how much a company can produce with existing equipment and employees. Once that limit is reached, companies have to hire additional employees or purchase equipment. In the expansion of 2003-2007, hiring was strongest when capacity utilization reached the lower 80% range. Capacity utilization fell after Q1 and has settled around a level of 77 for the last few months. The decline is one of a few negative economic indicators suggesting future growth will continue to be slow.

Through September 2015

Source: FactSet

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '150

20

40

60

80

100

120

140

97.63

Consumer Confidence

Conference Board Survey of Consumer Confidence

14

Consumer confidence declined in October to 97.63. This decline is more in line with expectations for September, when consumer confidence surprised to the upside. Importantly, consumer confidence remains near a post-recession high, and does appear to be influencing consumer spending, as spending has been strong for most of the year. With a rebound in capital markets, a rebound in jobs growth and an acceleration in wage inflation, consumer spending is likely to increase to reflect these positive factors. Source: FactSet through October 2015

'06 '07 '08 '09 '10 '11 '12 '13 '14 '1520

30

40

50

60

70

80

90

100

110

120

96.10

Small Business Optimism Index

15

Small Business Confidence Indices

Small business optimism increased marginally in September. As was the case with consumer confidence, the rise is surprising given the coincident market volatility of the period. It remains to be seen if small business optimism declined in October, similar to consumer confidence. Stronger than anticipated hiring in October suggests that small business optimism may have been resilient in October.

Small Business Confidence through September 2015

Source: FactSet

'96 '98 '00 '02 '04 '06 '08 '10 '12 '1480

100

120

140

160

180

200

220

3

4

5

6

7

8

9

4.34

159.00

U.S. Housing Affordability Index30 Year Conventional Fixed Mortgage Rate

16

Home Affordability vs. 30-Year Mortgage Rates

The home affordability index declined through the second quarter as mortgage rates and home prices increased. Affordability remains more attractive than the bubble years of 2005-2007.

Affordability as of June 30, 2015

Mortgage rate as of September, 2015

Source: FactSet

17

Existing and New Home Sales

'11 '12 '13 '14 '153,800,000

4,000,000

4,200,000

4,400,000

4,600,000

4,800,000

5,000,000

5,200,000

5,400,000

5,600,000

5,800,000

250

300

350

400

450

500

550

600

468.00

5550000.00

Existing Home Sales, Housing Units, Saar, Units - United StatesNew Residential Sales, New Houses Sold, Total, Sa, Thous Houses - United States

Existing home sales and new home sales moves in opposite directions in October. The longer term trend in both continues to suggest a housing recovery at the national level. Regional variances continue to exist – as always, location counts.

Source: FactSet

Data through September 2015

S&P 500 vs. S&P 500 EPS

18

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15600

800

1,000

1,200

1,400

1,600

1,8002,0002,2002,400

30

40

50

60

70

80

90

100

110

120

130

112.082093.36

S&P 5002093.36 -6.57 -0.31% 8:52:15 AM VWAP: High: 2134.72 Low: 666.79 Chg: 46.16%

S&P 500 - Price S&P 500 - EPS - LTM

The S&P 500 and capital markets around the world rebounded through October, recovering much of the third quarter’s declines. This appears to be a relief rally after it became clear that China did not derail the U.S. recovery after all. For the year, earnings are expected to be flat, primarily due to energy sector losses. It is notable that the seven out of ten sectors actually have positive earnings growth for 2015. Earnings growth for 2016 currently is expected to come in at 8.6%. The estimate has slowly been declining over the last several months as companies provide negative earnings guidance.

Source: FactSet

Trailing EPS is blend of actual 2014 earnings and estimated earnings for Q3 2015. As of November 6, 2015

'06 '07 '08 '09 '10 '11 '12 '13 '14 '151

1.5

2

2.5

3

3.5

4

4.5

5

5.5

11/5/20152.26

U.S. 10-Year Treasury Yield

10-Year Treasury Yield

19

Source: FactSet

Following a spike in 2013, the 10-Year Treasury declined through 2014. The 10-Year rate has been volatile year to date as investors attempt to forecast Federal Reserve action. Following the March FOMC meeting, rates settled down as it seemed apparent the Fed would hold off on a rate increase. Rates had been increasing in anticipation of a late year raise by the Fed until a flight to quality drove demand for Treasuries and the 10-year yield fell as low as 2%. Rates rose again in anticipation of Fed action in September, but the Fed held off and another flight to quality has followed, driving rates to approximately 2%.

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct1.6

1.7

1.8

1.9

2

2.1

2.2

2.3

2.4

2.5

2.6

11/5/20152.26

U.S. 10-Year Treasury Yield

10-Year Treasury Yield Over Last Year

20

Source: FactSet

Following rate declines in September, rates stayed low for much of October before starting to increase again towards the end of October. Rates started to increase as FOMC members made clear that a rate increase is still a possibility at the December meeting. Rates spiked over 2.3% on November 6 as the strong October labor report increased the probability that the Fed would move in December.

'11 '12 '13 '14 '1520

40

60

80

100

120

140

4,000

5,000

6,000

7,000

8,000

9,000

10,000

45.2649.27

9160.00

Brent Crude Oil (Left)U.S. Oil Production (000's Barrels Per Day) (Right)

West Texas Intermediate Crude Oil (Left)

Oil Supply and Price

21

The price of oil traded around $45 (WTI) for most of September and stayed around that level for most of October. Gains and losses have alternated between news indicating that U.S. production is slowing (a positive for price of oil) and indications of slowing Chinese growth (a negative for price of oil). U.S. production has declined by approximately 500,000 barrels per day, helping to ease worries about excess supply. However, at the same time, various foreign governments, including Iran, have disclosed current or planned increases in production, offsetting the decline in U.S. production.

Oil Production through October 30, 2015 WTI and Brent Price as of November 4, 2015

Global Risks

Economic • Recent economic data suggests that the slowing Chinese economy is not spreading to the rest of the

world. Chinese government data indicates the Chinese economy is growing at 6.9%, falling short of official target of 7.0%. It is notable that many commentaries focused on the data integrity of Chinese economic statistics following the official government release. It seems few believe the number is not somehow being manipulated by the government. Additional weak growth measures could disrupt markets.

• Fed Policy error – The Federal Reserve held off on a rate increase in October as expected. There appears to be a more pronounced polarization of views amongst economists with regard to the timing of rate hike. One camp believes the recovery continues to be tenuous and the Fed is right to hold off on an initiation of rate increases. However, the other camp believes an initiation to tightening is overdue and the easy money policy is actually hurting growth at this point. Clearly, both cannot be correct, which leaves the possibility of a significant policy error by the Fed.

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Global Risks

Geopolitical – In general, the same geopolitical issues have dominated for the last few months. • Oil Pressures – The price of oil is off mid-August lows, but remains at stressed levels with U.S. oil

trading in the mid-$40s. This is both good and bad. The good is that low energy input costs is an unexpected continuing stimulus to the global economy. The bad is that prices may be low because oil investors project the global economy to be weaker than current expectations, implying future demand tracking below reasonable growth rates.

• Middle East crisis – A crisis continues to build in the Middle East, with Syria and Iraq at the epicenter. The first indication of a failure to contain the spread of a violent ideology is the suspected bombing of a Russian airliner departing from Egypt. U.S. involvement may escalate in coming months.

• 2016 Election Cycle – While we are about a year from choosing the next President, some comments have started to impact markets. For example, comments regarding price controls on pharmaceutical companies resulted in volatility for the sector within the last two weeks of September. As markets evaluate candidates and their likely policy impacts, potential policy may become a market factor.

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Disclosures

Domestic equities: The value of the fund’s domestic and foreign investment will vary from day-to-day in response to many factors. Stock values fluctuate in response to the activities of individual companies, and general market and economic conditions. The prices of small and medium sized company stocks are generally more volatile than large company stocks. They often involve higher risks because smaller companies may lack the management expertise, financial resources, product diversification and competitive strengths to endure adverse economic conditions. Investing in foreign securities presents certain risks that may not be present in domestic securities. For example, investments in foreign and emerging markets present special risks, including currency fluctuation, the potential for diplomatic and potential instability, regulatory and liquidity risks, foreign taxation and differences in auditing and other financial standards. Securities in emerging markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Fixed income securities are subject to availability and market fluctuation. These securities may be worth less than the original cost upon redemption. Certain high-yield/high-risk bonds carry particular market risks and may experience greater volatility in market value than investment-grade corporate bonds. Government bonds and Treasury bill are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and fixed principal value. Interest from certain municipal bonds may be subject to state and/or local taxes and in some instances, the alternative minimum tax. The fund’s yield, share price, and total return change daily and are based on changes in interest rates, market conditions, other economic and political news, and on the quality and maturity of its investments. In general, bond prices rise when interest rates fall, and vice versa. This effect is usually more pronounced for longer-term securities. You may have a gain or loss when you sell your shares High yield bonds, also known as junk bonds, are subject to greater risk of loss of principal and interest, including default risk, than higher-rated bonds. Investors should not place undue reliance on yield as a factor to be considered in selecting a high yield investment. These securities are rated below investment grade. Real Estate Investment Trust (REIT) is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate. Individuals can invest in REITs either by purchasing their shares directly on an open exchange or by investing in a mutual fund that specializes in public real estate. P/E (Price-to-Earnings Ratio) is a valuation ratio of a company’s current share price compare to its per-share earnings. It is also known as the “price multiple” or “earnings multiple.” Beta measures the risk potential of a stock or an investment portfolio expressed as a ratio of the stock's or portfolio's volatility to the volatility of the market as a whole. Standard deviation is an indicator of the portfolio’s total return volatility. The larger the portfolio’s standard deviation, the greater the portfolio’s volatility. Spread sectors include all non-Treasury fixed income investments. These investments typically have an interest rate that is different from the prevailing rate on Treasury securities. The difference in interest rates is known as the spread. Duration is a measure of the sensitivity of bond prices to interest rate changes. Investments are subject to market risks including the potential loss of principal invested. An investment cannot be made directly into an index This report is not an offer to buy or sell or solicitation of an offer to buy or sell any securities mentioned. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Your individual allocation may be different than the HDVAS sample strategic model due to your unique individual circumstances. ETF Performance information sourced directly from Vanguard and iShares sponsors. Fund and Index Performance sourced from Morningstar - © 2015 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar not its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Returns represent past performance, are not a guarantee of future performance. Morningstar Performance Data - © 2015 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results

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Index Definitions

Russell Investment Group is a Washington, USA, corporation which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of the Northwestern Mutual Life Insurance Company. The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values. The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the U.S. market. The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher expected growth values. The Russell 2000 Value Index measures the performance of small-cap value segment of the U.S. equity universe. The Russell 2000 Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data recommends, endorses, approves or otherwise expresses any opinion regarding any issuer, securities, financial products or instruments or trading strategies and none of the data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. The MSCI EAFE Index is an unmanaged market capitalization-weighted index of equity securities of companies domiciled in various countries. The Index is designed to represent the performance of developed stock markets outside the United States and Canada and excludes certain market segments unavailable to U.S. based investors. USD indicates performance calculated assuming foreign holdings values are converted from currency of domicile to US Dollar. LCL indicates performance calculated assuming foreign holdings values are not converted to US Dollar. The MSCI EAFE Value Index is a market capitalization-weighted index that monitors the performance of value stocks from Europe, Australasia, and the Far East. The MSCI EAFE Growth Index is a market capitalization-weighted index that monitors the performance of growth stocks from Europe, Australasia, and the Far East. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. USD indicates performance calculated assuming foreign holdings values are converted from currency of domicile to US Dollar. LCL indicates performance calculated assuming foreign holdings values are not converted to US Dollar. The MSCI Japan measures the performance of Japanese equities. The MSCI All Country Europe measures the performance of equities domiciled in developed and emerging European countries. Barclay’s Capital U.S. Treasury Index includes public obligations of the U.S. Treasury with a remaining maturity of one year or more. The Barclays U.S. Aggregate Bond index measures the performance of investment grade bonds in the U.S. fixed income universe. It includes U.S Treasury issues, agency issues, corporate bond issues and mortgage-backed issues. It is unmanaged, includes reinvestment of dividends, does not reflect the impact of transaction, manager or performance fees and is unavailable for investment.

25

Index Definitions Continued

The Barclays Global Aggregate Bond Index measures the performance of investment grade fixed rate debt globally. The major components are the U.S. Aggregate, the Pan-European Aggregate, and the Asian-Pacific Aggregate. Additionally, the index contains various other investment grade fixed rate instruments not already included in the sub-components. The Barclays U.S. 1-3 Year Aggregate is a subset of the Barclays U.S. Aggregate index, representing securities with 1 to 3 years remaining until maturity. The Barclays U.S. Credit Index comprises the U.S. Corporate Index and a non-corporate component that includes foreign agencies, sovereigns, supranationals and local authorities. The Barclays Treasury Bond Index is a capitalization weighted index measuring the performance of U.S. Treasury bonds. The Barclays U.S. High Yield Loan index measures the performance of loans rated below investment grade in the U.S. The Barclays Municipal index measures the performance of tax exempt bonds in the U.S. The Barclays Municipal Intermediate 5-10 Year index measures the performance of investment grade municipal securities with 5 to 10 years remaining until maturity. The Barclays High Yield Municipal index measures the performance of below investment grade municipal securities with at least 1 year remaining until maturity. The Barclays US Corporate High Yield Index tracks the performance of domestic non-investment grade corporate bonds. The Citi World Government Bond Index (WGBI) measures the performance of 23 government bonds markets including Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, Norway, Poland, Portugal, Singapore, Spain, Switzerland, Sweden, the United Kingdom and the U.S. The Bloomberg Commodity index is comprised of future contracts on physical commodities which trade here in the U.S. and certain foreign markets. It measures the performance of investment in a broad basket of commodity futures contracts. The index is composed of futures contracts on 19 physical commodities. No related group of commodities (e.g., energy, precious metals, livestock and grains) may constitute more than 33% of the index as of the annual re-weightings of the components. No single commodity may constitute less than 2% of the index. The Dow Jones Industrial Average (DJIA) is a price weighted index of 30 U.S blue-chip companies. The DJIA covers all industries with the exception of transportation and utilities. The Dow Jones Select REIT index represents equity real estate investment trusts (REITs) and REIT-like securities traded in the U.S. The Dow Jones Global Select REIT index represents equity real estate investment trusts (REITs) and REIT like securities traded globally. The FTSE EPRA/NAREIT Developed Index is designed to track the performance of listed real estate companies and real estate investment trusts (REITs) worldwide. The Standard and Poor’s 500 is a capitalization weighted index of 500 leading companies in leading industries of the U.S. economy. It covers approximately 75% of the total capitalization of U.S. equities. The NASDAQ Index is a market capitalization weighted index of common equities listed on the NASDAQ stock exchange. The NASDAQ 100 Index is composed of the 100 largest and most actively traded securities listed on the NASDAQ stock exchange, excluding those securities in the financial sector. The Case Shiller Composite 20 City Home Price Index measures price changes in residential sales within the 20 largest metropolitan areas in the United States. National Association of Realtors Home Affordability Index measures whether a family earning the median income as reported by the U.S. Census Bureau could qualify for a mortgage on a property at the median price and at the prevailing interest rate, assuming 20% down payment.

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