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Emerging Markets StocksFourth Quarter 2018 Index ReturnsIn US dollar terms, emerging markets outperformed developedRanked Returns for the Quarter (%)Local currencyUS currencymarkets, including the US.Value outperformed growth across large and small cap stocks.-6.68-6.75ValueSmall caps outperformed large caps.-7.29-7.18Small Cap-7.43-7.47Large CapGrowthWorld Market Capitalization—Emerging Markets12%Emerging Markets 5.4 trillion-8.19-8.22Period Returns (%)* AnnualizedAsset Class1 Year3 Years**5 Years**10 Years**Value-10.749.520.516.99Large Cap-14.589.251.658.02Growth-18.268.892.678.97Small Cap-18.593.680.959.87Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.Market segment (index representation) as follows: Large Cap (MSCI Emerging Markets Index), Small Cap (MSCI Emerging Markets Small Cap Index), Value (MSCI Emerging Markets Value Index), and Growth (MSCIEmerging Markets Growth Index). All index returns are net of withholding tax on dividends. World Market Cap represented by Russell 3000 Index, MSCI World ex USA IMI Index, and MSCI Emerging Markets IMI Index. MSCIEmerging Markets IMI Index used as the proxy for the emerging market portion of the market. MSCI data MSCI 2019, all rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks,and copyrights related to the Russell Indexes.10

Select Country PerformanceFourth Quarter 2018 Index ReturnsIn US dollar terms, New Zealand and Hong Kong recorded the highest country performance in developed markets, while Austria and Norway posted thelowest returns for the quarter. In emerging markets, Brazil and Indonesia recorded the highest country performance, while Columbia and Pakistan postedthe lowest performance.Ranked Developed Markets Returns (%)New ZealandHong orway -20.48Ranked Emerging Markets Returns ppinesTurkeyIndiaPoland-2.88Peru-3.05South .04Czech bia-19.69Pakistan -21.0214.288.287.545.805.463.443.20Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.Country performance based on respective indices in the MSCI World ex US IMI Index (for developed markets), MSCI USA IMI Index (for US), and MSCI Emerging Markets IMI Index. All returns in USD and net of withholdingtax on dividends. MSCI data MSCI 2019, all rights reserved. UAE and Qatar have been reclassified as emerging markets by MSCI, effective May 2014.11

Select Currency Performance vs. US DollarFourth Quarter 2018In developed markets, currencies mostly depreciated vs. the US dollar with a few exceptions, including the Japanese yen, which appreciated over 3.5%. Inemerging markets, currencies were mixed against the US dollar, ranging from 12% to –10%.Ranked Developed Markets (%)Ranked Emerging Markets (%)Japanese yen (JPY)3.53New Zealand dollar (NZD)1.15Swedish krona (SEK)0.31Turkish lira (TRY)12.92Indian rupee (INR)3.83Indonesia rupiah (IDR)3.63Brazilian real (BRL)3.04Philippine peso (PHP)Singapore dollar (SGD)0.25Hong Kong dollar (HKD)-0.062.75Chinese yuan (CNY)0.22Malaysian ringgit (MYR)0.15Egyptian pound (EGP)Swiss franc (CHF)-0.91Euro (EUR)-1.58Danish krone (DKK)-1.65British pound (GBP)-2.34Israel shekel (ILS)-2.69Australian dollar (AUD)-2.70Canadian dollar (CAD)Norwegian krone (NOK)-5.36-5.960.00South Korean won (KRW)-0.59Taiwanese NT dollar (TWD)-0.66Thailand baht (THB)-0.68Hungary forint (HUF)-0.77Czech koruna (CZK)-1.41South African rand (ZAR)-1.62Poland zloty (PLN)-1.88Peru sol (PEN)-2.36Chilean peso (CLP)-4.96Mexican peso (MXN)-5.05Russian ruble (RUB)Colombian peso (COP)Pakistani rupee (PKR)-5.59-8.56-10.53Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.MSCI data MSCI 2019, all rights reserved.12

Real Estate Investment Trusts (REITs)Fourth Quarter 2018 Index ReturnsNon-US real estate investment trusts outperformed US REITsRanked Returns for the Quarter (%)in US dollar terms.Global REITS (ex US)US REITSTotal Value of REIT StocksWorld ex US 436 billion245 REITs(22 othercountries)-6.61* AnnualizedPeriod Returns (%)Asset Class42%-4.6858%1 Year3 Years**5 Years** 10 Years**US REITS-4.221.977.8912.05Global REITS-7.423.353.398.94US 601 billion97 REITsPast performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.Number of REIT stocks and total value based on the two indices. All index returns are net of withholding tax on dividends. Total value of REIT stocks represented by Dow Jones US Select REIT Index and the S&P Global ex USREIT Index. Dow Jones US Select REIT Index used as proxy for the US market, and S&P Global ex US REIT Index used as proxy for the World ex US market. Dow Jones and S&P data 2019 S&P Dow Jones Indices LLC, adivision of S&P Global. All rights reserved.13

CommoditiesFourth Quarter 2018 Index ReturnsThe Bloomberg Commodity Index Total Return declined 9.41%Ranked Returns for Individual Commodities (%)during the fourth quarter of 2018, bringing the total annualSugarreturn to –11.25%.7.41GoldSugar led quarterly performance with a gain of 7.41%. Energywas the worst-performing complex, with WTI crude oil andunleaded gas declining by 37.87% and 37.78%, e cattle1.33Natural gas-0.63Soybean meal-1.07Lean hogs-2.96Wheat-3.08Coffee-3.73Zinc-4.38Soybean oil* AnnualizedCopper5 Years** 10 Years**CottonPeriod Returns (%)Asset ClassQTR1 Year 3 .77-7.50Kansas wheat-8.50Aluminum-11.43Nickel-15.66Heating oilBrent crude oil-28.38-34.99Unleaded gas -37.78WTI crude oil -37.87Past performance is not a guarantee of future results. Index is not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.Commodities returns represent the return of the Bloomberg Commodity Total Return Index. Individual commodities are sub-index values of the Bloomberg Commodity Total Return Index. Data provided by Bloomberg.14

Fixed IncomeFourth Quarter 2018 Index ReturnsInterest rate changes across the USUS Treasury Yield Curve (%)Bond Yield across Issuers (%)fixed income market were mixed duringthe fourth quarter of 2018. The yield on4.004.36the 5-year Treasury note declined 43basis points (bps), ending the quarter at9/28/20183.0012/31/20182.51%. The yield on the 10-yearTreasury note decreased 36 bps to12/31/20173.303.52State andLocalMunicipalsAAA-AACorporates2.692.002.69%. The 30-year Treasury bond yielddecreased 17 bps to finish at 3.02%. For1.002018, yields on the 10-year Treasuryand 30-year Treasury increased 29 bpsand 28 bps, respectively.0.001Yr5Yr10Yr30Yr10-Year USTreasuryA-BBBCorporatesIn terms of total returns, short-termcorporate bonds increased 0.78% duringthe quarter. Intermediate-term corporate*AnnualizedPeriod Returns (%)Asset ClassQTR1 YearBloomberg Barclays US Government Bond Index Long4.16-1.792.635.904.15Total returns for short-term municipalBloomberg Barclays Municipal Bond Index1.691.282.303.824.85bonds were 1.10% for the quarter.Bloomberg Barclays US Aggregate Bond Index1.640.012.062.523.48FTSE World Government Bond Index 1-5 Years (hedged to USD)1.532.121.581.531.69FTSE World Government Bond Index 1-5 Years0.94-0.761.56-0.820.29ICE BofAML 1-Year US Treasury Note Index0.781.861.060.700.62ICE BofAML US 3-Month Treasury Bill Index0.561.871.020.630.37Bloomberg Barclays US TIPS Index-0.42-1.262.111.693.64Bloomberg Barclays US High Yield Corporate Bond Index-4.53-2.087.233.8311.12bonds had a total return of 0.58%.Intermediate-term municipal bondsreturned 2.00%.3 Years** 5 Years** 10 Years**One basis point equals 0.01%. Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with themanagement of an actual portfolio. Yield curve data from Federal Reserve. State and local bonds are from the S&P National AMT-Free Municipal Bond Index. AAA-AA Corporates represent the Bank of America Merrill LynchUS Corporates, AA-AAA rated. A-BBB Corporates represent the ICE BofAML Corporates, BBB-A rated. Bloomberg Barclays data provided by Bloomberg. US long-term bonds, bills, inflation, and fixed income factor data Stocks, Bonds, Bills, and Inflation (SBBI) Yearbook , Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield). FTSE fixed income indices 2019 FTSE Fixed Income LLC, all rightsreserved. ICE BofAML index data 2019 ICE Data Indices, LLC. S&P data 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.15

Global Fixed IncomeFourth Quarter 2018 Yield CurvesUSInterest rates in the global developedUKmarkets generally decreased during4.0the quarter.4.09/30/201812/31/20183.03.0global developed markets.2.0Yield (%)outperformed shorter-term bonds in theYield (%)Longer-term bonds generally1.00.09/30/201812/31/20182.01.00.0For the year, longer-term bonds-1.0underperformed shorter-term bonds in-1.01Y5Y10Y20Y30Y1Y5Y10Y20Y30Ythe US but generally outperformedYears to Maturityshorter-term bonds in the non-USYears to Maturitydeveloped .09/30/201812/31/20181.00.0-1.0Yield (%)Changes in Yields (bps) since 9/30/2018Yield 0YYears to MaturityOne basis point equals 0.01%. Source: ICE BofAML government yield. ICE BofAML index data 2019 ICE Data Indices, LLC.30Y1Y5Y10Y20Y30YYears to Maturity16

Impact of DiversificationFourth Quarter 2018 Index ReturnsThese portfolios illustrate the performance of different globalRanked Returns (%)stock/bond mixes and highlight the benefits of diversification.Mixes with larger allocations to stocks are considered riskier0.56100% Treasury Billsbut have higher expected returns over time.25/75-2.8150/50-6.1475/25100% Stocks-9.42-12.65Growth of Wealth: The Relationship between Risk and Return 120,000 100,000Period Returns (%)Asset Class100% Treasury BillsStock/Bond Mix100% Stocks* Annualized10-Year1 Year 3 Years** 5 Years**10 Years** 510.98100% Stocks-8.937.184.8210.0514.65 80,00075/25 60,00050/50 40,00025/75100% Treasury Bills 20,000 1. STDEV (standard deviation) is a measure of the variation or dispersion of a set of data points. Standard deviations are often used to quantify the historical return volatility of a security or portfolio.Diversification does not eliminate the risk of market loss. Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect expenses associated with themanagement of an actual portfolio. Asset allocations and the hypothetical index portfolio returns are for illustrative purposes only and do not represent actual performance. Global Stocks represented by MSCI All Country WorldIndex (gross div.) and Treasury Bills represented by US One-Month Treasury Bills. Globally diversified allocations rebalanced monthly, no withdrawals. Data MSCI 2019, all rights reserved. Treasury bills Stocks, Bonds,Bills, and Inflation Yearbook , Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).17

Why Should You Diversify?Fourth Quarter 2018As 2019 approaches, and with US stocks outperforming non-US stocks in recent years,some investors have again turned their attention towards the role that global diversification plays in their portfolios.For the five-year period ending October 31, 2018,the S&P 500 Index had an annualized return of11.34% while the MSCI World ex USA Indexreturned 1.86%, and the MSCI Emerging MarketsIndex returned 0.78%. As US stocks haveoutperformed international and emerging marketsstocks over the last several years, some investorsmight be reconsidering the benefits of investingoutside the US.THERE’S A WORLD OF OPPORTUNITY INEQUITIESThe global equity market is large and represents aworld of investment opportunities. As shown inExhibit 1, nearly half of the investmentopportunities in global equity markets lie outsidethe US. Non-US stocks, including developed andemerging markets, account for 48% of worldmarket capitalization¹ and represent thousands ofcompanies in countries all over the world. Aportfolio investing solely within the US would notbe exposed to the performance of those markets.Exhibit 1. World Equity Market CapitalizationWhile there are many reasons why a US-basedinvestor may prefer a degree of home bias in theirequity allocation, using return differences over arelatively short period as the sole input into thisdecision may result in missing opportunities thatthe global markets offer. While international andemerging markets stocks have delivereddisappointing returns relative to the US over thelast few years, it is important to remember that: Non-US stocks help provide valuablediversification benefits. Recent performance is not a reliable indicatorof future returns.As of December 31, 2017. Data provided by Bloomberg. Market cap data is free-float adjusted and meets minimum liquidity and listingrequirements. China market capitalization excludes A-shares, which are generally only available to mainland China investors. For educationalpurposes; should not be used as investment advice.1. The total market value of a company’s outstanding shares, computed as price times shares outstanding.18

Why Should You Diversify?(continued from page 18)THE LOST DECADEPICK A COUNTRY?We can examine the potential opportunity cost associated with failing todiversify globally by reflecting on the period in global markets from 2000–2009.During this period, often called the “lost decade” by US investors, the S&P 500Index recorded its worst ever 10-year performance with a total cumulativereturn of –9.1%. However, looking beyond US large cap equities, conditionswere more favorable for global equity investors as most equity asset classesoutside the US generated positive returns over the course of the decade. (SeeExhibit 2.) Expanding beyond this period and looking at performance for eachof the 11 decades starting in 1900 and ending in 2010, the US marketoutperformed the world market in five decades and underperformed in theother six.² This further reinforces why an investor pursuing the equity premiumshould consider a global allocation. By holding a globally diversified portfolio,investors are positioned to capture returns wherever they occur.Are there systematic ways to identify which countries will outperform others inadvance? Exhibit 3 illustrates the randomness in country equity marketrankings (from highest to lowest) for 22 different developed market countriesover the past 20 years. This graphic conveys how difficult it would be toexecute a strategy that relies on picking the best country and the resultingimportance of diversification.Exhibit 2. Global Index Returns, January 2000–December 2009In addition, concentrating a portfolio in any one country can expose investorsto large variations in returns. The difference between the best- andworst-performing countries can be significant. For example, since 1998, theaverage return of the best-performing developed market country wasapproximately 44%, while the average return of the worst-performing countrywas approximately –16%. Diversification means an investor’s portfolio isunlikely to be the best or worst performing relative to any individual country,but diversification also provides a means to achieve a more consistentoutcome and more importantly helps reduce and manage catastrophic lossesthat can be associated with investing in just a small number of stocks or asingle country.A DIVERSIFIED APPROACHOver long periods of time, investors may benefit from consistent exposure intheir portfolios to both US and non-US equities. While both asset classes offerthe potential to earn positive expected returns in the long run, they mayperform quite differently over short periods. While the performance of differentcountries and asset classes will vary over time, there is no reliable evidencethat this performance can be predicted in advance. An approach to equityinvesting that uses the global opportunity set available to investors canprovide diversification benefits as well as potentially higher expected returns.S&P data 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. MSCIdata MSCI 2019, all rights reserved. Indices are not available for direct investment. Indexperformance does not reflect expenses associated with the management of an actual portfolio. Pastperformance is not a guarantee of future results.2. Source: Annual country index return data from the Dimson-Marsh-Staunton (DMS) Global Returns Data, provided by Morningstar, Inc.19

Why Should You Diversify?(continued from page 19)Exhibit 3. Equity Returns of Developed MarketsSource: MSCI country indices (net dividends) for each country listed. Does not include Israel, whichMSCI classified as an emerging market prior to May 2010. MSCI data MSCI 2019, all rights reserved.Past performance is no guarantee of future results. Indices are not available for direct

S&P Global ex US REIT Index (net div.) Dow Jones US Select REIT Index MSCI Emerging Markets Value Index (net div.) MSCI Emerging Markets Small Cap Index (net div.) MSCI Emerging Markets Index (net div.) MSCI All Country World ex USA Index (net div.) Russell 1000 Value Index MSCI World ex USA Value Index (net div.) MSCI World ex USA Index (net .