Download Why Use a Fund for Your Core Fixed Income Allocation?

Anfield Capital Management, LLC
“Unconstrained”
What it isn’t…and why it really matters right now!
a long time
ago….in a
galaxy far
far
away……
All heck broke loose!
And a generation of excess came home to roost in the form of a nasty
debt, asset subordination and systemic leverage unwind
It was clear things would take a long time to normalize
And that fixed income investment management needed to adapt…….
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
2
Fast Forward to the Need
 The historic interest rate bull market is coming to an end
 Fiduciaries need a solution, a tool, to manage the next 5 years
 Hence the birth of “unconstrained” fixed income investing
 So there is no need to exit debt markets altogether
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
3
Hot Topic: Alternative Fixed Income
Survey of Advisors and Institutions
What do you value most in an alternative fixed-income product?
% Respondents
Low Correlation
Traditional Fixed I ncome
I nstitutions
Adv isors
35
39
Go-Anyw here
Capabilities
21
19
Yield
19
12
I nterest-Rate Hedging
16
20
Other
8
9
Credit Hedging
2
1
Source: Morningstar
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
4
“Opportunistic” Bond Fund Ruler
 Unconstrained ≠ unpredictable
 The Goal: unconstrained opportunity set, not unconstrained risk
Not really unconstrained,
mostly marketing
1
2
3
Unconstrained yet disciplined
4
5
6
7
Unconstrained and highly
aggressive (Hedge Fund like)
8
9
10
In reality there are multiple rulers which should be:
1) Prospectus flexibility = 10
2) Management philosophy = 7
3) Risk adjusted performance/positioning = Ideally an 8 or 9 with typically ½ the risk of other funds
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
5
Bond Fund Flexibility
For all rate environments
Multi-Sector Bond
Funds
Strategic Income
Funds
Universal Bond
Funds
Hedge Funds
Allocations to multiple sectors




Long Investments







Active duration management


Yield curve trading


Hedged fixed income


Long/short fixed income


Primary Investment
Strategy
Go-anywhere flexibility
Relative value: pair trading

Credit: event driven

Stressed/distressed debt

• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
6
Things Needed to be Truly “Unconstrained”
1. The ABILITY to manage the array of security types, sectors, markets etc.
+1 : the AGILITY to use your ability
2. The MINDSET to use all that flexibility
3. The WILL to implement it
(without commercial impediments of a product line-up)
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
7
Because You Can, Doesn’t Mean
You Should…
Fund A
Portfolio Statistics
Duration
Yield
Quality
Yield/Duration
Fund B Fund G Fund J Fund M Fund P Fund JA Fund O Fund L
1.52
3.85%
BBB
2.53%
0.90
2.35%
BBB
2.61%
-0.29
-5.30
2.80% 1.75%
BB
NA
-0.53% -6.03%
1.50
2.30%
BB
1.53%
2.07
1.16%
NA
0.56%
5.06
3.00%
BBB
0.67%
1.94
4.30%
B
2.22%
4.43
4.24%
BB
0.96%
-9.7%
42.0%
12.7%
13.9%
3.0%
19.4%
18.6%
39.6%
6.3%
1.2%
0.0%
6.0%
25.1%
21.9%
31.7%
1.9%
8.6%
9.7%
6.9%
30.1%
11.1%
0.1%
1.0%
22.4%
0.0%
1.4%
6.6%
68.8%
1.1%
3.7%
3.7%
0.0%
1.0%
68.7%
21.9%
63.9%
1.7%
1.7%
5.0%
1.5%
4.8%
21.2%
22.8%
30.1%
17.4%
1.7%
0.2%
24.4%
3.1%
0.0%
13.9%
60.0%
6.8%
1.0%
0.2%
18.3%
20.6%
31.0%
24.1%
10.6%
3.1%
3.1%
7.4%
4.34%
0.80%
6.62%
0.94%
3.43%
2.08%
2.02%
0.76%
4.33%
0.87%
2.94%
1.65%
6.59%
2.07%
6.09% 13.20%
1.25% 3.39%
Sectors
US Govt
IG Corporate
HY Corporate
Bank Loan/Alt Credit
EM Debt
Mortgage/ABS
Short Term/Cash Equiv**
**(< 1 year duration)
12 Months performance
Standard Deviation (% Ann)
1 Yr Rank in M* Category
7
10
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
56
8
78
48
64
35
91
8
A Potential Solution
Overcoming the traditional allocation dilemma
Illustration of a Typical Comprehensive Fixed Income Allocation Framework:
Satellites
A Versatile Role in A Portfolio
15-35%
Multiple ways investors can make
Anfield Universal Fixed Income
Fund part of their overall strategy:
Emerging Market Sovereign
High Yield
 As a core bond complement,
with a distinct risk/return profile
and absolute return orientation
ABS/MBS
 As an equity diversifier,
potentially reducing overall
volatility
 As a defensive holding, with the
ability to pursue positive returns
in any environment as well as
manage duration amid
challenging market conditions
 As a single fund alternative to
an array of Satellite funds
How the fund fits into a broader
portfolio is ultimately a reflection
of your individual circumstances.
Currencies
Core Fixed Income
30-50%
Leveraged Loans
Non-Traditional Bond
Alternative Debt
• Event Driven
• Long/Short Credit
• Debt Arbitrage
Emerging Market Corporate
Alternatives
10-20%
For illustrative purposes.
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
9
UFIF’s “Flexible Core”
Allows evolution with the market environment
Defensive
Aggressive
Increasing Interest Rates
Decreasing Interest Rates
Spread Duration / Risk Premia
Market Interest Rate Risk
MBS
ABS
Credit
Low/Negative
Interest Rate
Duration
EM
MBS
ToolKit:
IG







Sector
Quality
Long/Short
Derivatives
Currencies
Leveraged Loans
Structural
HY
ABS
Credit
High/Moderate
Interest Rate Duration
EM
HY
MBS – Mortgage-backed security
HY – High Yield
ABS - Asset-backed security
IG - Investment Grade Credit
EM – Emerging Market
Credit – All grade credit
Spread Duration – measures the % price change for a % change in yield spread
Risk Premia – additional yield associated with one or more sources of investment risk
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
10
IG
UFIF’s “Flexible Core”
Allows evolution with the market environment
US 10 Year Treasury Rate
7.00
10 year Treasury Rate (%)
6.00
Anfield believes interest rates
are likely to rise from here
and we have positioned the
fund accordingly
5.00
4.00
2.17% as
of
12/31/14
3.00
2.00
1.00
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
 Shaded bars indicate economic recessions according to NBER
 The referenced US 10 Yr Treasury Rate is shown for illustration purposes only and does not reflect any fees, expenses or
sales charges. This illustration is not meant to represent the Fund. There is no guarantee that any investment strategy will
achieve its objectives, generate profits or avoid losses.
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
11
…and why it really matters right now!
12
Divergence of the “Dual Economy”
Creates asset & systemic bubbles
Real Estate
Fed Policy
Regulatory
Reform
US Treasuries
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
13
Rates Don’t Always Rise During
Recovery
 Steadily lower growth
rates in last 4 recoveries
have induced steadily
lower policy rates
US 10YR yield change during expansions
 Creating faster and a
greater number of asset
bubbles
 These bubbles have
been imploding before
inflation has a chance
to accelerate and
central banks can move
to tighten
 In the last 4 cycles, US
bond yields did not rise
through the economic
expansion
2.35% as
of 8/31/14
% cumulative change in the US 10YR yield from the last day of the recession
until the last day of the expansion for all expansions since 1953. Expansion
dates are based on the NBER business cycle dates. The year next to each
line shows the year of the expansion started.
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
14
Size of the Global Financial
Economy
955
$
trillion
total volume of foreign currency transactions
601trillion
$
off-exchange trading of financial derivates
87 trillion
$
volume of shares and bonds
For comparison:
$
63 trillion
Value of all goods and
services produced (GDP)
Source: Bundesbank, 2012
15
Recovery from the ‘08/09 Recession
Experienced unusually weak real economy expansion
Real Economy Performance
115.00
113.63
Real GDP
113.00
111.00
Personal Consumption
113.34
Employment
111.65
Hourly Earnings
109.00
106.37
107.00
105.00
103.00
101.00
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
16
Oct-14
Aug-14
Jun-14
Apr-14
Feb-14
Dec-13
Oct-13
Aug-13
Jun-13
Apr-13
Feb-13
Dec-12
Oct-12
Aug-12
Jun-12
Apr-12
Feb-12
Dec-11
Oct-11
Aug-11
Jun-11
Apr-11
Feb-11
Dec-10
Oct-10
Aug-10
Jun-10
Apr-10
Feb-10
Dec-09
Oct-09
Aug-09
Jun-09
97.00
Apr-09
99.00
Not so for the Financial Economy
…which may be overheating
Financial Economy Performance
350.00
312.91
S&P 500
300.00
Barclay's Agg
Residential RE
250.00
Commercial RE
Commodities
200.00
218.03
167.72
126.79
150.00
100.00
111.71
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
17
Oct-14
Aug-14
Jun-14
Apr-14
Feb-14
Dec-13
Oct-13
Aug-13
Jun-13
Apr-13
Feb-13
Dec-12
Oct-12
Aug-12
Jun-12
Apr-12
Feb-12
Dec-11
Oct-11
Aug-11
Jun-11
Apr-11
Feb-11
Dec-10
Oct-10
Aug-10
Jun-10
Apr-10
Feb-10
Dec-09
Oct-09
Aug-09
Jun-09
0.00
Apr-09
50.00
Implications
1. The Fed and other central banks are behind and will be forced to raise
rates sooner than expected
2. Risk assets can and will rally further
3. If the interest rate environment is normalized in a deliberate step-wise
manner it does not have to be disorderly / disruptive to the real
economy or capital markets – but the broad bond market will still suffer
re-pricing
4. There is still time to adopt a defensive fixed income posture…but time is
running short
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
18
Current Strategy Summary
Fixed Income
U.S.
DURATION
1 - 3 YRS
CURVE POSITIONING
Short/I nt.
U.S TREASURIES
-10 - 0%
MORTGAGES
20 - 30%
INVESTMENT GRADE CREDIT
20 - 30%
HIGH YIELD
20 - 30%
MUNICIPALS
0 - 5%
Non-U.S.
NON-U.S. DEVELOPED
0 - 10%
EMERGING MARKETS
0 - 10%
CURRENCY
0 - 5%
Red = zero to negative exposure
Yellow = modest allocation
19
Green = attractive exposure, material allocation
Appendix
20
Core of Fixed Income Market ≠ Core of Fixed
Income Allocation
 Remember - the CORE is the foundational part, NOT a reflection of
fixed income issuance patterns which are driven by many forces
 We now have to address the other misconception: “the Core must be
generally stable or stationary”
 While this makes it easier to define and explain, it also results in our Core
being exposed to interest rate, credit and other cycles
 To avoid this, we have to continuously adjust our Core as the world
unfolds
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
21
A Comprehensive Toolkit
Anfield Universal Fixed Income Fund
 The Fund has broad
discretion to apply what
Anfield believes to be it’s
best investment ideas
across the global bond
universe
 This greater investment
discretion allows Anfield to
adjust duration exposure,
allocate across sectors,
and otherwise express
active views and tap into
Anfield’s global toolkit
Portfolio Construction
Method
Manager discretion, based on Anfield's global
economic outlook
Bond Universe
∙ U.S. Treasuries
∙ U.S. and non-U.S.
investment
grade corporates
∙ Yankee bonds and
Eurobonds
∙ U.S. Treasuries
∙ Asset-backed securities
∙ U.S. investment grade corporates
∙ Convertible securities
∙ Agency bonds
∙ Preferred stock
∙ Mortgage-backed securities
∙ Non-U.S. sovereign
debt
∙ Agency bonds
∙ Asset-backed securities
∙ Emerging markets bonds
∙ Yankee bonds
∙ Inflation-indexed
bonds
∙ Municipal bonds
∙ Bank loans
∙ Foreign currencies
∙ Duration
∙ Relative value trades
∙ Structural trades
∙ Sector rotation
∙ Yield curve
positioning
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
Market capitalization-weighted
representation of current U.S. bond
market
∙ High yield bonds
∙ Mortgage-backed
securities
Tools
Barclays Capital U.S.
Aggregate Bond Index
22
∙ Currency
hedging/allocation
Current Strategy Summary
Equity
U.S.
OVERWEIGHT STOCKS
0 - 5%
DIVIDEND YIELD
5 - 10%
MEGA CAP
15 - 20%
LARGE CAP
25 - 35%
SMALL CAP
10 - 15%
Non-U.S./Alts
NON-U.S. DEVELOPED
10 - 15%
EMERGING MARKETS
10 - 15%
ALTERNATIVES
10 - 15%
Red = zero to negative exposure
Yellow = modest allocation
23
Green = attractive exposure, material allocation
Benchmarking- 2 Epic Fallacies
1.
Started out as a way to measure ex-post performance, then morphed into a way to
categorize investment managers becoming the ex-ante paradigm
 Now ALM drives Required Return, which drives asset allocation, and allocation drives
manager selection because you have to fit into a box to get funded.
2.
Desire to define manager risk via benchmark relative guidelines
 This is in complete contravention to the reality and logic:
 Increased concentration of risk factors
 Reduced manager diversification (all have to operate the same zones)
 And if you believe the opportunity set is non-stationary, and forced buying and
selling at ranges (guidelines) reduces tail risk; then the only logical conclusion is
that stationary rules in a non-stationary world must result in a lower, flatter
distribution of returns skewed to the left – and therefore a lower mean return with
higher risk over time – the exact anti-thesis of the goal.
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
24
The Result?
Investment guidelines and parameters are determined using this backwards logic,
resulting in:
 A construct of “beat the benchmark” not “make smart investments and earn
good risk adjusted returns”
 Limitations for managers: their latitude and tools to get out of the way of trouble
and capitalize on opportunity have been removed
 Concentrating risk factors
 Many guidelines are in % NAV space
 Assets, however, operate in risk factor space
 % NAV space ≠ % risk factor space
• Investment advisory services offered through Anfield Capital Management, LLC, a
registered investment advisor
**There is no guarantee that any investment strategy will achieve its objectives,
generate profits or avoid losses.
25
Disclosures
Anfield Capital Management, LLC is a registered investment advisor with the SEC. The purpose of this presentation is to
provide general information on our products and services only and should not be construed as a solicitation to effect, or
attempt to effect, either transactions in securities or the rendering of personalized investment advice.
We may change these materials at any time in the future without notice to you. We are not providing you with
investment, tax, or legal advice. Past performance is not necessarily indicative of future performance. We are not
offering to buy or sell any financial instrument or inviting you to participate in any trading strategy.
This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding
penalties that may be imposed on the taxpayer under US federal tax laws.
Anfield Capital Management, LLC claims compliance with the Global Investment Performance Standards (GIPS®) and
has calculated your performance returns in accordance with the Global Investment Performance Standards. To receive a
compliant presentation and/or the firm’s list of composite descriptions, please contact us at 949-891-0600.
Past performance is not indicative of future results. Presented performance results are total return and include the
reinvestment of all income. Net of fee performance was calculated using the highest applicable annual management
fee. Valuations and performance is reported in U.S. dollars. The results for individual accounts and for different periods may
vary depending on market conditions and other factors. The performance results displayed herein represent the
investment performance record for a composite. All performance results prior to the establishment of Anfield in August
2009 were achieved by the portfolio manager prior to the formation of Anfield and have been linked to the performance
history of Anfield. These results should not be interpreted as the actual historical performance of Anfield. Anfield has
adhered to the performance record portability requirements outlined in the GIPS Guidance Statement on Performance
Record Portability in regard to the presentation and linking of this performance track record.
26
Simulated Backtest Disclosure
Diversified Liquid Alternatives simulated backtest results were derived from the retroactive application of a model and do
not represent actual investment performance or trading. Returns have not been reduced by trading costs which would be
charged if the adviser were actually managing client’s money. Returns have been reduced by an annual management
fee of 1.25% applied on a quarterly basis. The backtested results have inherent limitations as the results are derived from
the retroactive application of a model developed with the benefit of hindsight. Performance may not reflect the impact
that certain material economic and market factors might have had on the decision-making process if Anfield Capital
Management was actually managing client assets according to the model. The strategy could not have been
implemented before Jan 2011as this was the first date that the majority of the securities in the portfolio were available.
Beginning May 2014, Anfield Capital Management started managing actual client accounts according to the Diversified
Liquid Alternatives strategy
27
Composite Disclosures
Our portfolios have assets diversified among equity and equity related instruments, fixed income securities, and cash or cash equivalents.
Total Yield Composite includes all discretionary portfolios that seek to generate superior yields over cash investments by blending securities with
different sources of premium yield advantage over traditional cash, and to preserve capital by minimizing the risk of loss. The strategy
harvests meaningful yield spreads where they naturally occur and blends the primarily "spread duration risks" to achieve an optimum yield vs. liquidity
and risk. It is best thought of as substitute to conventional narrow cash management strategies and investments. The portfolio may invest in all sectors
of the fixed income market via primarily either ETFs or mutual funds. Prior to January 2012, the Total Yield Composite was called Capital Preservation
Composite.
Core Fixed Income Composite includes all discretionary portfolios that seek total return through a combination of income and price
appreciation. The strategy invests in a wide range of fixed income and related securities spanning all maturities, sectors and credit ratings. Our
portfolios have assets diversified among equity and equity related instruments, fixed income securities, and cash or cash equivalents. The target
equity allocation of the strategy will vary over time but typically will consist of 100% of portfolio assets. This strategy may be appropriate for investors
seeking intermediate to long-term returns with risk similar to the broad U.S. bond market.
Income Plus Composite includes all discretionary portfolios that seek to total return through modest growth and a focus on income through investing
in a balanced portfolio of fixed income and related securities spanning all maturities, sectors and credit rating and diversified equity. The target
equity allocation of the strategy will vary over time but typically consists of 20% of portfolio assets. This strategy may be appropriate for investors
seeking intermediate growth of capital combined with partial insulation from the impact of inflation.
Real Balanced Growth & Income includes all discretionary portfolios that seek to provide a blend of income and growth of capital through investing
in a balanced portfolio of diversified equity and fixed income securities. It emphasizes “real” returns - the growth of purchasing power over time. The
strategy also invests in inflation-linked instruments including but not limited to U.S. TIPS, commodities contracts, and REITS. The target equity allocation
of the strategy will vary over time but typically consists of 40% of portfolio assets. This portfolio may be appropriate for investors seeking intermediate to
long-term growth of capital combined with partial insulation from the impact of inflation.
Real Wealth Accumulation Composite includes all discretionary portfolios that emphasize growth of capital by investing in a diversified portfolio of
primarily equities. The portfolio’s overall risk is tempered by allocations to fixed income and inflation-linked securities. The target equity allocation of
the strategy will vary over time but typically consists of 60% of portfolio assets. This strategy may be appropriate for investors seeking intermediate to
long-term growth of capital combined with insulation from the impact of inflation.
Aggressive Real Growth Composite includes all discretionary portfolios that seek maximum capital appreciation by investing in a portfolio heavily
weighted to equities. The strategy’s overall risk is similar to the broad stock market. The portfolio also holds modest allocations of inflation-linked
securities. The target equity allocation of the strategy will vary over time but typically consists of 80% of portfolio assets. This strategy may be
appropriate for investors seeking long to very long term growth of capital.
Diversified Equity Composite includes all discretionary portfolios that seek maximum capital appreciation by investing in a portfolio consisting
primarily of equity securities. The target equity allocation of the strategy will vary over time but typically consists of 100% of portfolio assets. The
portfolio’s overall risk is expected to be similar, on average and over time, to the broad stock market.
Diversified Liquid Alternatives Composite includes all discretionary portfolios that seek positive return over full market cycles by investing in a broad
spectrum of all asset classes. Tactical adjustments are made with the goal of reducing risk and increasing returns. The portfolio may invest in all
domestic and international asset classes, including but not limited to equity, debt, commodities, all categories of alternatives, real estate, etc. The
portfolio will look to invest in a diverse set of assets classes, typically ten different markets, sectors, and themes with a target of approximately 20 to 30
different positions, dependent on market conditions.
28
Benchmark Disclosures
Index returns are presented as additional information. We do not believe that any index return is a proper point of reference to directly compare our
strategy and composite performance against; as such, the index returns are provided as general market indicators.
U.S. Consumer Price Index (CPI) is a measure estimating the average price of consumer goods and services purchased by households. It is a price
index determined by measuring the price of a standard group of goods meant to represent the typical market basket of a typical urban consumer
LIBOR (London Interbank Offered Rate) is an average interest rate, determined by the British Bankers Association that banks charge one another for
the use of short-term money (one month) in England’s Eurodollar market.
Barclays U.S. Aggregate 1-3 Index represents securities that are SEC-registered, taxable, dollar-denominated, and with a remaining term to final
maturity of at least one year and less than three years. The index covers the U.S. investment grade fixed rate bond market, with index components for
government and corporate securities, mortgage pass-through securities, and asset-backed securities.
Barclays Intermediate Government/Credit Index measures the performance of the U.S. dollar denominated U.S. Treasuries, government related and
investment grade U.S. corporate securities that have a remaining maturity of greater than or equal to 1 year and less than 10 years.
Barclays Intermediate U.S. Aggregate Bond Index is an unmanaged index representing domestic taxable investment grade bonds with an average
maturity and duration in the intermediate range, with index components for government and corporate securities, mortgage pass-through securities,
and asset-backed securities.
Barclays U.S. Aggregate 10+ Index represents securities that are SEC-registered, taxable, dollar-denominated, and with a remaining term to final
maturity of at least ten years. The index covers the U.S. investment grade fixed rate bond market, with index components for government and
corporate securities, mortgage pass-through securities, and asset-backed securities.
S&P 500 Total Return Index is an index of a basket of 500 stocks designed to provide a broad snapshot of the overall U.S. equity market representing all
major industries.
Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 Index, which represents
approximately 10% of the total market capitalization of the Russell 3000 Index.
MSCI EAFE Index is an unmanaged index of issuers in countries of Europe, Australia, and the Far East.
MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure emerging market equity performance.
The MSCI Emerging Markets Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Columbia, Czech Republic, Egypt,
Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
29