itrix1 DiMeo$ Reports 6179446 122013 Sample Trustee...

Sample ClientDecember 31, 2013

Exceeding Your Expectations

500 West Madison Street, Suite 1700 | Chicago, IL 60661 | 312.853.1000

Page 15

Page 17

0

Page 21

Page 22 Portfolio Engineer

Page 23

Page 24

Page 25

Page 26

Page 27

Page 28 Risk Statistics

Page 29 Risk Vs. Return

Page 30

Page 33

PIMCO Total Return

Performance Summary With Peer Group

Composite Rank Vs. Peer Group

Up-Down Capture

Harbor Capital Appreciation

Performance Summary

Composite Reconciliation

Allocation Vs. Target

Investment Policy Scorecard

Sample ClientTable of Contents

Investment Summary

Quarterly Considerations

Knowledge College

2

Quarterly Considerations

1

Plan Sponsors

Non-Profit Organizations

The Wealth Office™

New Year, New Regs ‐ Expect a number of new defined contribution plan regulations in the coming year. A fiduciary definition, annuity‐related safe harbor provisions, follow‐up rules on fee and investment disclosures, and a requirement that plans illustrate lifetime earnings streams to participants are agenda items for the DOL and SEC in 2014. We’ll keep you updated.

DSA 401(k) Plan Survey ‐ Our new 401(k) Plan Survey will provide you an invaluable benchmarking tool for plan design, participant experience, and fees. Our data will help you improve employee retirement readiness through improved plan design. Look forward to our findings next quarter.

On the Mend ‐ Given improved funding status, many pension plan sponsors had already or will soon take steps to de‐risk their plans to lower funded status volatility. Companies may be further incented by risk transfer strategies this year given higher discount rates and increasing PBGC premiums.

Keeping You Informed ‐ Plan to join us for an Essential Economic Update webcast on January 29th. We also recommend you read this quarter’s Knowledge College which addresses diversification and its long‐term benefits.

Fiscal Challenge ‐ Approximately one third of universities expect weaker tuition revenue growth in fiscal year 2013, according to a Moody’s report. Several factors adversely affecting revenue include lagging growth in family income, uncertain job prospects for recent graduates, and softening demand for higher education at current "sticker" prices.

Annual Check‐Up ‐ Need help arranging your financial affairs for the preceding year? The Wealth OfficeTM annually prepares a comprehensive financial planning checklist. Please contact us for your copy of this important and useful document.

Conversion Recursion ‐ More than 10% of IRA holders with 2010 incomes in excess of $1 million took advantage of the temporary opportunity to convert an IRA to a Roth IRA. What’s more, this marked the first time Roth IRA conversion amounts were greater than Roth IRA contributions. The Wealth OfficeTM mentioned this opportunity in prior quarterly communications and will be sure to keep you apprised of similar opportunities in the future.

It’s What You Keep ‐ With the introduction of the 3.8% net investment income tax and the addition of the 20% capital gains rate, many investors are reviewing the tax‐efficiency of their investment portfolios. The Wealth OfficeTM can help you determine if your current investment strategy is as tax‐efficient as possible and if opportunities exist to enhance your portfolio’s after‐tax performance.

3

Market Snapshot

2

-2.0%

0.8%

-0.1%

3.6%0.4%

-0.7% -1.5%

10.5% 8.7%5.7%

1.9%

-0.7% -0.2% -1.1%

3.7% 5.3%

-8.6%

0.8%

-2.0%

7.4%

1.2%

-3.1%

-9.0%

32.4%

38.8%

23.3%

-2.3%

2.5%5.9%

-9.5%

9.3%

27.6%

-20%

-10%

0%

10%

20%

30%

40%

50%

Barclays U.S. TIPS

Barclays Muni Bond

5 Year

Barclays Aggregate

Barclays U.S. Corp High Yield

Barclays Global Agg

ex. US (Hedged)

Barclays Global Agg

ex. US (Unhedged)

JPMorgan GBI-EM Global

Diversified (Unhedged)

S&P 500 Russell 2000

MSCI EAFE MSCI EM NAREIT All Equity

S&P Developed

World Property

DJ UBS Commodity

Index

HFRI Weighted

Composite

Alerian MLP Index

Source: Bloomberg

Fixed Income Equities Alternatives

Key: Left Bars: Recent Quarter ReturnRight Bars: YTD Return

• U.S. equity markets were up 32.4% as measured by the S&P 500 during 2013, which was the highest calendar year return since the market downturn in 2008. The MSCI Emerging Markets index return of -2.3% paled in comparison, and the current level of dispersion in returns between the two has not been this great since the Asian Currency Crisis of the late 1990s.

• Fixed income asset classes with more exposure to lower grade credit and lower duration were favored. The 10-Year U.S. Treasury yield rose from 1.76% at year-end last year to 3.03% at the close of 2013.

• Real assets produced mixed results as MLPs rallied on strong fundamentals, commodities declined (ex-Energy) amid weaker fundamentals and macro concerns, and rising interest rates weighed on REITs.

4

U.S. Economic Update

• U.S. GDP increased at an annual quarter-over-quarter rate of 4.1% for the prior quarter.

• YoY inflation remains below the Fed’s 2% stated goal and will be a major focal point in its decision-making over the coming months.

• Unemployment fell to 6.7% in December as more workers left the labor force. The civilian participation rate fell to 62.8%, matching October as the lowest in 35 years.

3

2.0%

-6%

-4%

-2%

0%

2%

4%

6%

Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13

U.S. Real GDP Growth (Seasonally Adjusted - YoY % Change)

Real GDP Growth % YoY

Sources: Bloomberg & Bureau of Economic Analysis

1.2%1.7%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13

U.S. Inflation (YoY % Change)

CPI CPI CoreSources: Bloomberg & The Bureau of Labor Statistics

31-Dec % Chg MoM 31-Dec % Chg MoM6.7% -0.3% 78.1 8.5%

30-Nov % Chg MoM 30-Nov % Chg MoM98.3 0.8% $11.7T 0.5%

30-Nov % Chg MoM 30-Nov % Chg MoM1.09M 22.7% $14.3T 0.2%

31-Dec % Chg MoM 31-Dec % Chg MoM57.0 -0.5% $432B 0.2%

Consumer Confidence

Retail Sales

Unemployment Rate

Leading Indicators

ISM Manufacturing PMI

U.S. Personal IncomeHousing Starts

Consumer Spending

5

Global Economic Update

• Eurozone GDP increased at an annual quarter-over-quarter rate of 0.1% for the prior quarter as the region continues to struggle with weak economic growth and unemployment hovering near 12%.

• The ECB cut interest rates by 25 basis points to a record low of 0.25% amid renewed concerns about inflation, which is close to half the ECB’s target rate of “below, but close to, 2%.”

• Japan’s gross debt /GDP ratio has ballooned to over 240%, nearly twice that of Italy which ranks second among major economies.

4

2013Value

Chg from Last Year

2013Value

Chg from Last Year

U.S. 106.0% 3.3% Greece 175.7% 18.9%Eurozone 95.7% 2.8% Switzerland 48.2% -1.0%U.K. 92.1% 3.3% Japan 243.5% 5.5%Germany 80.4% -1.5% China 22.9% -3.2%France 93.5% 3.2% Brazil 68.3% 0.3%Italy 132.3% 5.3% Russia 14.1% 1.6%Spain 93.7% 7.8% India 67.2% 0.5%

Data as of: 12/31/2013Source: IMF

Gross Debt / GDP

6

Global Fixed Income

5

-0.8%-2.0%

0.8%

-0.1% -0.4%

0.3% 0.5% 1.1%

3.6%

-0.1%

0.4%

-0.7% -1.5%-2.7%

-8.6%

0.8%

-2.0% -1.4% -0.3%

0.2%

-1.5%

7.4%

-8.8%

1.2%

-3.1%

-9.0%-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

U.S. Treasuries U.S. TIPS U.S. Muni 5 Year U.S. Aggregate U.S. MBS U.S. ABS U.S. CMBS U.S. Corporates U.S. High Yield U.S. Long Gov / Credit

Global Agg ex. U.S. Hedged

Global Agg ex. U.S. Unhedged

JPMorgan GBI-EM Global Diversified Unhedged

Fixed Income Sector Returns

QTR YTDSources: Bloomberg, Barclays, & JPMorganAll indices are Barclays indices except where noted

• Fixed income investors had a mixed response to the Fed’s reduction of $10 billion in asset purchases to $75 billion per month. The 10-year Treasury yield rose on the news and ended the year at its highest value, which negatively affected Treasuries and TIPS.

• High yield continued to perform well relative to other bond asset classes, and was the best performing fixed income asset class in 2013.

• The U.S. dollar’s movement was mixed against various global currencies, and hedged foreign bonds fared better than unhedged bonds.

• Emerging market debt continued to struggle, and was down 9.0% for the year.

1.6%

-7.2%

2.2%0.4% 1.1%

-3.0%

1.3%

-4.5%

4.0%

-21.4%

1.9%

-1.4%

2.8%

-7.1%

2.5%

-16.6%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Euro Japanese Yen

British Pound

Mexican Peso

Chinese Yuan

Canadian Dollar

Swiss Franc Australian Dollar

Currency Returns vs. U.S. Dollar

QTR YTDSource: Bloomberg

7

U.S. Fixed Income

6

0%

1%

2%

3%

4%

5%

3 Month 6-Month 2-Year 5-Year 10-Year 30-Year

U.S. Yield Curve

Mar-13 Sep-13 Dec-13Source: Bloomberg

2.3%

3.0%

0.8%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

10-Year Breakeven Inflation Rate

10-Year Breakeven Inflation10-Year Treasury Yield10-Year TIPS Yield

Source: Bloomberg

0.7%1.2%2.7%

0%

2%

4%

6%

8%

10%

12%

14%

Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

Credit Spreads Above Treasuries

Agency Spread A Spread BB SpreadSources: Bloomberg & Barclays

• The U.S. yield curve continued to steepen throughout the fourth quarter and moved higher from the 2-year maturity outward.

• Investment grade and high yield corporate spreads came in during the quarter with BB-rated bonds tightening by approximately 60 basis points and A-rated bonds tightening by approximately 10 basis points.

• Market implied inflation of 2.3% ticked up by 10 bps during the quarter as the 10-year nominal yield ticked up by approximately 40 basis points and the 10-year TIPS yield ticked up by approximately 30 basis points.

8

Global Equity Markets

7

U.S. Equities:

10.3%7.9%

13.3%

7.4% 6.2%1.6% 2.3% 0.3%

3.7% 3.8%

10.3%

-5.5%

0.4%

-2.3%

8.2%4.2%

0.3%

32.6%

26.0%

32.4%

20.7%

27.7%

18.4%

27.3%

5.6%2.3% 4.0%

-3.8%

-15.8%

1.4%

-13.2%

0.2%

6.4%

-4.6%

-20%

-10%

0%

10%

20%

30%

40%

U.S. Europe Germany United Kingdom

France Pacific Japan Pacific (ex. Japan)

EM Asia China India Brazil Russia EM Latin America

Mexico Canada EM EMEA

MSCI Equity Returns by Country / Region

QTR YTDSources: Bloomberg & MSCI

QTR YTD QTR YTD QTR YTD

Larg

eM

idSm

all

33.5

33.6 34.8

8.2

35.7

8.7

33.1

9.3

34.5

32.6

8.5 8.4

8.2

43.3

Value Core Growth

10.0 10.2 10.4

38.8

• In 2013, the markets favored smaller capitalization companies and growth investing. Small cap growth stocks returned 43.3% in 2013, putting the asset class 57.8% ahead of its previous market peak in October 2007.

• The S&P 500 closed the year with a 15.4x forward P/E ratio, ahead of its 10-year average of 13.9x. All sectors of the S&P 500 made positive returns in Q4 and for the year. Consumer discretionary, heath care, and industrials all posted 40% or more gains in 2013.

• Globally, 2013 favored developed countries over emerging markets. Germany, the U.S., France, and Japan led the way. Emerging market returns were also hampered for U.S. investors as the dollar rallied against most developing nations’ currencies.

9

Equity Sector Returns (Most Recent Quarter)

8

10.2%9.0%

8.0%

10.2% 10.0%

13.0%

10.4%

12.4%

4.5%

8.9%

5.7%6.3%

9.3%8.8%

11.7%

9.9%

7.3%6.2%

0%

2%

4%

6%

8%

10%

12%

14%

Consumer Discretionary

Consumer Staples Energy Financial Services Health Care Materials & Processing

Producer Durables Technology Utilities

Domestic Equity Sector Returns

Domestic Large Cap (Russell 1000) Domestic Small Cap (Russell 2000)Sources: Bloomberg & Russell

5.3%

3.5%

6.7% 6.4%7.4%

5.1%

8.0%

3.0%

11.7%

1.7%2.6%

-1.6%-2.6%

1.0%

4.6%

2.9%

7.9%

2.2%

0.0%

4.7%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

Consumer Discretionary

Consumer Staples Energy Financials Health Care Industrials Information Technology

Materials Telecommunication Services

Utilities

International Equity Sector Returns

International (MSCI EAFE) Emerging Markets (MSCI EM)Sources: Bloomberg & MSCI

10

Real Assets

9

-0.7% -0.1%

0.6%

-2.9%

2.2%

8.3%

-7.6%

0.1%2.5%

4.3% 5.6%

-6.2%

1.9%

27.2%

-7.1%

-2.0%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

All Equity Index

Diversified Office Apartment Retail Lodging & Resorts

Health Care Mortgage

Domestic REIT Sector Returns

QTR YTDSources: Bloomberg & NAREIT

• Domestic REITs marginally declined. Strong fundamentals continued to support a rally in lodging REITs while apartment REITs lagged on rising supply concerns.

• European REITs outperformed led by the United Kingdom. Asian REITs suffered from rising rates concerns but Japan was a positive outlier.

• Commodities were mixed as non-energy sectors generally declined. Gold and silver were key laggards while unleaded gasoline rallied.

• MLPs capped off a strong year with a volatile quarter. Yields declined by 75 bps during the year.

-1.1%

4.4%

-5.4%

0.3%

-1.7%

0.8%

-9.8%-7.1%

-9.5%

5.1%

-16.9%-13.7%

-3.6%

5.0%

-30.8%

-16.9%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

DJ UBS Commodity Composite

Energy Grains Industrial Metals

Livestock Petroleum Precious Metals

Softs

DJ UBS Commodity Returns

QTR YTDSource: Bloomberg

2.7%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

MLP Yield Spreads over 10-Year Treasury

MLP Spread FTSE NAREIT All Equity REIT Spread

A-Rated Corporate Spread BBB-Rated Corporate SpreadSource: Bloomberg

11

Hedge Funds

10

3.5% 3.7%5.0%

3.8%

2.0% 2.5%

8.7% 9.3%

14.6%

12.5%

-0.3%

7.2%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Fund of Funds Composite

Fund Weighted Composite

Equity Hedge Event Driven Macro Relative Value

QTR YTDSources: Bloomberg & Hedge Fund Research

• Hedge Funds slightly outperformed Fund of Funds for the quarter and year, as the HFRI Fund Weighted Composite Index advanced 9.3% during 2013 compared to the HFRI Fund of Funds Composite Index gaining 8.7%.

• Equity hedge and event driven led yearly gains while macro slightly lagged after a strong finish in the fourth quarter. Long-biased technology and healthcare within equity hedge, as well as fundamental event driven strategies benefitting from strategic M&A and shareholder activism, outperformed.

• Steady inflows during the second half of 2013 pushed industry assets to record highs as hedge funds experienced the best calendar year performance since 2010.

12

11

Source: Bloomberg

Financial Markets PerformancePeriods greater than one year are annualized

As of: December 31, 2013

All returns are in U.S. dollar terms (unless where noted)*

Global Fixed Income Markets QTR YTD 1YR 2YR 3YR 5YR 7YR 10YR

Citi 3-Month T-Bill 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 1.0% 1.6%Barclays US TIPS -2.0% -8.6% -8.6% -1.1% 3.5% 5.6% 5.3% 4.8%Barclays Municipal Bond (5 Year) 0.8% 0.8% 0.8% 1.9% 3.5% 4.3% 4.6% 3.9%Barclays US Aggregate -0.1% -2.0% -2.0% 1.0% 3.3% 4.4% 4.9% 4.5%Barclays U.S. Corporate High Yield 3.6% 7.4% 7.4% 11.6% 9.3% 18.9% 8.7% 8.6%Barclays Global Aggregate ex-US Hedged 0.4% 1.2% 1.2% 3.8% 3.8% 3.8% 4.2% 4.3%Barclays Global Aggregate ex-US Unhedged* -0.7% -3.1% -3.1% 0.4% 1.7% 3.5% 4.7% 4.4%Barclays U.S. Long Gov / Credit -0.1% -8.8% -8.8% -0.4% 6.7% 6.4% 6.7% 6.4%JPMorgan GBI-EM Global Diversified Unhedged* -1.5% -9.0% -9.0% 3.1% 1.5% 8.1% 7.4% 9.5%

Global Equity Markets QTR YTD 1YR 2YR 3YR 5YR 7YR 10YR

S&P 500 10.5% 32.4% 32.4% 23.9% 16.2% 17.9% 6.1% 7.4%Dow Jones Industrial Average 10.2% 29.7% 29.7% 19.5% 15.7% 16.7% 7.0% 7.4%NASDAQ Composite 11.1% 40.2% 40.2% 28.4% 17.8% 23.0% 9.3% 8.8%Russell 3000 10.1% 33.6% 33.6% 24.7% 16.2% 18.7% 6.5% 7.9%Russell 1000 10.2% 33.1% 33.1% 24.5% 16.3% 18.6% 6.4% 7.8%Russell 1000 Growth 10.4% 33.5% 33.5% 24.0% 16.4% 20.4% 8.2% 7.8%Russell 1000 Value 10.0% 32.6% 32.6% 24.8% 16.1% 16.7% 4.5% 7.6%Russell Mid Cap 8.4% 34.8% 34.8% 25.7% 15.9% 22.3% 7.8% 10.2%Russell Mid Cap Growth 8.2% 35.7% 35.7% 25.3% 15.6% 23.3% 8.5% 9.7%Russell Mid Cap Value 8.5% 33.6% 33.6% 25.8% 16.0% 21.1% 6.8% 10.2%Russell 2000 8.7% 38.8% 38.8% 27.1% 15.7% 20.1% 7.2% 9.0%Russell 2000 Growth 8.2% 43.3% 43.3% 28.1% 16.8% 22.5% 8.9% 9.4%Russell 2000 Value 9.3% 34.5% 34.5% 26.0% 14.5% 17.6% 5.4% 8.6%MSCI ACWI ex. U.S. 4.8% 15.8% 15.8% 16.6% 5.6% 13.3% 2.6% 8.0%MSCI EAFE 5.7% 23.3% 23.3% 20.6% 8.7% 13.0% 2.3% 7.4%MSCI EAFE Growth 5.2% 22.9% 22.9% 20.1% 8.3% 13.2% 3.2% 7.3%MSCI EAFE Value 6.3% 23.6% 23.6% 21.0% 9.0% 12.6% 1.2% 7.4%MSCI EAFE Small Cap 5.9% 29.7% 29.7% 25.0% 9.6% 18.9% 3.7% 9.9%MSCI Emerging Markets 1.9% -2.3% -2.3% 7.7% -1.7% 15.1% 4.1% 11.5%

Alternatives QTR YTD 1YR 2YR 3YR 5YR 7YR 10YR

Consumer Price Index 0.0% 1.2% 1.2% 1.5% 2.0% 2.0% 2.0% 2.3%FTSE NAREIT Equity REIT -0.7% 2.5% 2.5% 10.0% 9.4% 16.5% 1.7% 8.4%S&P Developed World Property x U.S. 0.1% 8.3% 8.3% 22.5% 8.6% 16.6% 0.3% 9.3%S&P Developed World Property -0.2% 5.9% 5.9% 16.8% 8.8% 16.6% 0.7% 8.7%DJ UBS Commodity Total Return -1.1% -9.5% -9.5% -5.4% -8.1% 1.5% -3.0% 0.9%HFRI Fund of Funds Composite 3.5% 8.7% 8.7% 6.7% 2.4% 4.8% 1.3% 3.4%HFRI Fund Weighted Composite 3.7% 9.3% 9.3% 7.8% 3.3% 7.8% 3.8% 5.7%Alerian MLP 5.3% 27.6% 27.6% 15.6% 15.0% 29.4% 14.4% 14.9%

13

12

2004 2005 2006 2007 2008 2009 2010 2011 2012 YTDREITs31.6%

Emerging34.5%

REITs35.0%

Emerging39.8%

Aggregate Bond5.2%

Emerging79.0%

MLP35.9%

MLP13.9%

Emerging18.6%

Smal l Growth43.3%

Emerging26.0%

Commodities21.4%

Emerging32.6%

Emerging Debt18.1%

Foreign Bond4.4%

MLP76.4%

Smal l Growth29.1%

TIPS13.6%

REITs18.1%

Smal l Blend38.8%

Emerging Debt23.0%

Internationa l14.0%

Internationa l26.9%

Commodities16.2%

Cash1.8%

High Yield58.2%

REITs27.9%

REITs8.3%

Smal l Value18.1%

Smal l Value34.5%

Smal l Value22.2%

REITs12.2%

MLP26.1%

MLP12.7%

TIPS‐2.4%

Large Growth37.2%

Smal l Blend26.9%

Aggregate Bond7.8%

International17.9%

Large Growth33.5%

Internationa l20.7%

Large Value7.1%

Smal l Value23.5%

Large Growth11.8%

Emerging Debt‐5.2%

Smal l Growth34.5%

Smal l Value24.5%

High Yield5.0%

Large Value17.5%

Large Value32.5%

Smal l Blend18.3%

MLP6.3%

Large Value22.2%

Internationa l11.6%

Balanced‐24.8%

Internationa l32.5%

Emerging19.2%

Foreign Bond4.4%

Emerging Debt16.8%

Large Blend32.4%

MLP16.7%

Emerging Debt6.3%

Smal l Blend18.4%

TIPS11.6%

High Yield‐26.2%

REITs28.0%

Commodities16.8%

Large Growth2.6%

Smal l Blend16.3%

MLP27.6%

Large Value16.5%

Balanced5.8%

Large Blend15.8%

Foreign Bond11.0%

Smal l Value‐28.9%

Smal l Blend27.2%

Large Growth16.7%

Large Blend2.1%

Large Blend16.0%

International23.3%

Smal l Growth14.3%

Large Growth5.3%

Balanced15.4%

Smal l Growth7.0%

Smal l Blend‐33.8%

Large Blend26.5%

Emerging Debt15.7%

Balanced1.1%

High Yield15.8%

Balanced20.2%

Balanced12.5%

Large Blend4.9%

Emerging Debt15.2%

Aggregate Bond7.0%

Commodities‐35.6%

Emerging Debt22.0%

Large Value15.5%

Large Value0.4%

Large Growth15.3%

High Yield7.4%

Foreign Bond12.5%

Smal l Value4.7%

Smal l Growth13.3%

Large Blend5.5%

Large Value‐36.8%

Balanced21.4%

High Yield15.1%

Cash0.1%

Smal l Growth14.6%

REITs2.5%

High Yield11.1%

Smal l Blend4.6%

High Yield11.9%

Balanced4.7%

MLP‐36.9%

Smal l Value20.6%

Large Blend15.1%


Balanced12.9%

Cash0.1%

Large Blend10.9%

Smal l Growth4.2%

Large Growth9.1%

Cash4.7%

Large Blend‐37.0%

Large Value19.7%

Balanced13.9%

Smal l Growth‐2.9%

TIPS7.0%

Aggregate Bond‐2.0%

Commodities9.1%

Cash3.0%

Foreign Bond8.2%

High Yield1.9%

REITs‐37.7%

Commodities18.9%

International8.2%

Smal l Blend‐4.2%

MLP4.8%

Emerging‐2.3%

TIPS8.5%

TIPS2.8%

Cash4.8%

Large Value‐0.2%

Large Growth‐38.4%

TIPS11.4%

Aggregate Bond6.5%

Smal l Value‐5.5%

Aggregate Bond4.2%

Foreign Bond‐3.1%

Large Growth6.3%

High Yield2.7%

Aggregate Bond4.3%

Smal l Blend‐1.6%

Smal l Growth‐38.5%

Foreign Bond7.5%

TIPS6.3%

International‐11.7%

Foreign Bond4.1%

TIPS‐8.6%

Aggregate Bond4.3%

Aggregate Bond2.4%

Commodities2.1%

Smal l Value‐9.8%

Internationa l‐43.1%

Aggregate Bond5.9%

Foreign Bond4.9%

Commodities‐13.3%

Cash0.1%


Cash1.2%

Foreign Bond‐8.7%

TIPS0.5%

REITs‐15.7%

Emerging‐53.2%

Cash0.2%

Cash0.1%

Emerging‐18.2%

Commodities‐1.1%

Commodities‐9.5%

Why Diversify?

14

Fourth Quarter 2013 Knowledge College

1

Has A Market High Ever Felt So Bad?2013 brought good and bad news for investors. Unfortunately, the good AND bad news were one and the same: diversification worked extremely well. The divergence in performance between asset classes was significant, meaning the pistons in the diversification engine did what they were supposed to do. However, U.S. equities dominated all other asset classes, including developed and emerging foreign equities, real assets, and global fixed income.

The exhibit to the right shows three broadly diversified sample portfolios compared to the S&P 500 Index in 2013.

The S&P 500 Index’s total return of 32.4% in 2013 was its best calendar year return since 1997 and its fourth best in the past 38 years. Only 1980, 1995, and 1997 saw higher returns (placing 2013 in the top decile of S&P 500 historical performance since 1976).

The S&P 500’s performance was even more extraordinary when compared to virtually all other asset classes. The exhibit on the next page shows the S&P 500’s 2013 outperformance relative to other asset classes and compares this year’s results to previous calendar years. The results not only show strong absolute performance for domestic equities, but also a dominating year when compared to virtually all other asset classes.

$1.00

$1.05

$1.10

$1.15

$1.20

$1.25

$1.30

$1.35

$1.40

Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

Broadly Diversified Portfolios vs. the S&P 500

60% Fixed Income / 40% Equity & Real Assets 40% Fixed Income / 60% Equity & Real Assets20% Fixed Income / 80% Equity & Real Assets 100% Large Cap U.S. Equity

(+32.4%)

(+13.3%)

(+8.8%)

(+4.9%)

The fully invested Large Cap U.S. Equity portfolio is invested solely in the S&P 500. The allocations for the three sample diversified portfolios are shown on the following page. All portfolios were not rebalanced during the year.

15

Fourth Quarter 2013 Knowledge College

2

Observations and Comments:

• The S&P 500’s 2013 outperformance relative to Core Fixed Income, High Yield, Emerging Markets, Real Estate, Commodities, and Hedge Funds was extremely high in terms of historical norms.

• The S&P 500’s 2013 excess return compared to the Barclays Aggregate Bond Index was its highest level since the Aggregate index was created in 1976.

• 1998 was the last similar year of significant excess return for the S&P 500 versus many asset classes, including Emerging Markets, Commodities, Real Estate, High Yield Bonds, and Hedge Funds.

*Different total years reflect different starting points of respective indices.

The last time the S&P 500 dominated so significantly, we were in the midst of the technology stock boom of the late 1990’s, which led then-Fed Chairman Alan Greenspan to utter his now famous “irrational exuberance” statement. In the late 1990’s, we successfully navigated our clients away from the very natural temptation to want to abandon diversification principles (in favor of an overly U.S. and equity-centric portfolio). Over the subsequent decade, the S&P 500 Index was cut in half twice (down 51% between 2007-2009 and down 45% between 2000-2002), and our typical client weathered the storm well because they remained diversified. As Mark Twain once said, “History does not repeat itself, but it does rhyme.” The tune that’s playing now sounds very familiar.

60% Fixed Income / 40% Equity & Real Assets: 7% TIPS, 22% Core Fixed Income, 17% Foreign Developed Bonds, 9% High Yield Bonds, 5% Emerging Markets Bonds, 7% Large Cap U.S. Equity, 2% Small Cap U.S. Equity, 5% International Developed Equity, 3% Emerging Markets Equity, 6% Real Estate, 8% MLPs, and 9% Commodities.40% Fixed Income / 60% Equity & Real Assets: 6% TIPS, 9% Core Fixed Income, 11% Foreign Developed Bonds, 10% High Yield Bonds, 4% Emerging Markets Bonds, 12% Large Cap U.S. Equity, 4% Small Cap U.S. Equity, 11% International Developed Equity, 6% Emerging Markets Equity, 8% Real Estate, 8% MLPs, and 11% Commodities.20% Fixed Income / 80% Equity & Real Assets: 3% TIPS, 3% Core Fixed Income, 5% Foreign Developed Bonds, 7% High Yield Bonds, 2% Emerging Markets Bonds, 17% Large Cap U.S. Equity, 6% Small Cap U.S. Equity, 18% International Developed Equity, 11% Emerging Markets Equity, 10% Real Estate, 8% MLPs, and 10% Commodities.

ComparisonS&P 500 Return

Comparison Index

S&P 500 Excess Return

Number of Years of Greater Excess Return*:

Years of Greater Excess Return

S&P 500 to Barclays Aggregate 32.4% -2.0% 34.4% 0 of 38 years NoneS&P 500 to Barclays U.S. Corporate High Yield 7.4% 24.9% 2 of 30 years 1989 & 1998S&P 500 to MSCI Emerging Markets -2.3% 34.7% 3 of 26 years 1995, 1997, & 1998S&P 500 to FTSE NAREIT All Equity REITs 2.9% 29.5% 1 of 35 years 1998S&P 500 to DJ-UBS Commodity -9.5% 41.9% 1 of 23 years 1998S&P 500 to HFRI Fund of Funds Index 8.7% 23.7% 2 of 24 years 1995 & 1998

16

Fund &Cat Avg

Exp Ratio

Allocation

MarketValue

($)%

Performance(%)

CurrentQuarter

YTD1

Year3

Years5

Years10

Years2012 2011 2010

Composite

Sample Client 250,252,588 100.0 3.1 8.6 8.6 5.7 11.9 6.1 11.7 -2.7 15.9

Sample Target Asset Allocation 3.0 8.2 8.2 5.8 11.9 4.5 11.3 -1.7 14.6

TIPS

TIPS Fund 6,717,189 2.7 -2.2 -8.8 -8.8 3.4 5.5 4.7 6.9 13.4 6.3 0.07

Barclays U.S. Treasury: U.S. TIPS -2.0 -8.6 -8.6 3.5 5.6 4.9 7.0 13.6 6.3

IM U.S. TIPS (MF) Median -2.1 -8.8 -8.8 2.9 4.8 4.3 6.4 11.9 5.9 0.83

TIPS Fund Rank 80 55 55 15 22 17 26 9 27

Broad Domestic Fixed

Intermediate Bond Fund 11,634,443 4.6 0.1 -1.3 -1.3 4.7 6.7 4.9 7.9 7.9 8.3 0.30

Barclays Aggregate -0.1 -2.0 -2.0 3.3 4.4 4.5 4.2 7.8 6.5

IM U.S. Broad Market Core Fixed Income (MF) Median 0.1 -1.9 -1.9 3.5 6.1 4.3 6.1 6.7 7.3 0.92

Intermediate Bond Fund Rank 50 23 23 7 38 18 16 11 24

High Yield Fixed

High Yield Fund 21,862,832 8.7 3.0 5.8 5.8 8.0 15.7 7.5 14.6 4.0 14.3 0.55

Barclays US Corp: High Yield 3.6 7.4 7.4 9.3 18.9 8.6 15.8 5.0 15.1

IM U.S. High Yield Bonds (MF) Median 3.2 6.6 6.6 8.1 16.3 7.2 14.7 3.3 14.0 1.21

High Yield Fund Rank 68 70 70 52 62 39 53 36 45

International Fixed Hedged

Foreign Bond Fund Hedged 10,653,293 4.3 1.4 0.9 0.9 6.2 9.3 6.3 11.2 6.8 9.2 0.50

Barclays Global Aggregate Ex USD (Hedged) 0.4 1.2 1.2 3.8 3.8 4.3 6.5 3.9 3.3

IM International Fixed Income (MF) Median 0.0 -3.8 -3.8 1.9 4.4 4.1 6.7 3.0 6.4 1.08

Foreign Bond Fund Hedged Rank 9 10 10 3 3 11 17 7 24

International Fixed Un-Hedged

Foreign Bond Fund Un-Hedged 10,460,131 4.2 -0.5 -5.6 -5.6 3.0 8.3 N/A 6.7 8.4 12.5 0.53

Barclays Global Aggregate Ex USD -0.7 -3.1 -3.1 1.7 3.5 4.4 4.1 4.4 4.9

IM International Fixed Income (MF) Median 0.0 -3.8 -3.8 1.9 4.4 4.1 6.7 3.0 6.4 1.08

Foreign Bond Fund Un-Hedged Rank 64 70 70 31 16 N/A 49 1 12

Sample ClientInvestment Summary

As of December 31, 2013

17



Fund &Cat Avg

Exp Ratio

Allocation

MarketValue

($)%

Performance(%)

CurrentQuarter

YTD1

Year3

Years5

Years10

Years2012 2011 2010

Emerging Markets Debt

Emerging Markets Debt Fund 6,528,327 2.6 -2.0 -10.9 -10.9 0.8 8.9 N/A 15.8 -0.8 15.6 0.90

JPM GBI-EM Global Diversified -1.5 -9.0 -9.0 1.5 8.1 9.5 16.8 -1.8 15.7

IM Emerging Markets Debt (MF) Median 0.6 -6.5 -6.5 5.1 12.4 7.9 18.6 5.5 12.8 1.26

Emerging Markets Debt Fund Rank 100 100 100 100 96 N/A 85 84 13

Large Cap

S&P 500 Index Fund 27,545,206 11.0 10.5 32.4 32.4 16.2 18.1 7.5 15.9 2.1 15.2 0.05

S&P 500 10.5 32.4 32.4 16.2 17.9 7.4 16.0 2.1 15.1

IM U.S. Large Cap Core Equity (MF) Median 10.0 31.8 31.8 15.0 16.7 6.9 15.4 -0.5 13.1 1.23

S&P 500 Index Fund Rank 31 40 40 25 22 28 40 23 20

Small Cap

Small Core Fund 8,174,105 3.3 8.8 37.8 37.8 16.6 22.6 10.4 18.3 -2.6 27.9 0.08

Vanguard Spliced Small Cap Index 8.8 37.8 37.8 16.6 22.5 10.3 18.2 -2.8 27.8

IM U.S. Small Cap Core Equity (MF) Median 9.0 39.0 39.0 16.1 20.4 8.7 15.5 -2.8 26.0 1.39

Small Core Fund Rank 56 66 66 42 23 15 22 49 27

International Equity

International Fund 27,925,282 11.2 4.2 15.4 15.4 4.8 11.9 8.6 15.8 -13.9 14.1 0.75

MSCI AC World ex USA 4.8 15.8 15.8 5.6 13.3 8.0 17.4 -13.3 11.6

IM International Large Cap Core Equity (MF) Median 5.6 20.5 20.5 7.3 11.8 6.8 18.2 -12.6 7.5 1.36

International Fund Rank 84 91 91 95 48 10 87 75 1

Emerging Markets

Emerging Markets Fund 17,574,930 7.0 1.0 -3.8 -3.8 -5.1 14.9 13.0 19.4 -25.6 22.1 0.61

MSCI Emerging Markets Index 1.9 -2.3 -2.3 -1.7 15.2 11.5 18.6 -18.2 19.2

IM Emerging Markets Equity (MF) Median 2.3 -1.5 -1.5 -2.2 14.0 10.2 18.7 -19.5 18.3 1.63

Emerging Markets Fund Rank 76 69 69 86 33 7 43 87 26

Private Real Estate

Private Real Estate Fund 7,924,713 3.2 2.1 12.8 12.8 13.3 4.4 5.2 11.6 15.5 14.8

70 NCREIF / 30 FTSE NAREIT 1.6 8.5 8.5 11.4 9.7 9.3 12.8 13.0 17.6

Real Estate Global

Global Real Estate Fund 9,158,876 3.7 -0.3 3.9 3.9 7.7 15.8 9.2 27.3 -5.5 20.3 0.97

S&P Developed Property -0.2 5.9 5.9 8.8 16.6 8.7 28.9 -5.6 21.5

18



Fund &Cat Avg

Exp Ratio

Allocation

MarketValue

($)%

Performance(%)

CurrentQuarter

YTD1

Year3

Years5

Years10

Years2012 2011 2010

Commodities

Commodity Fund 22,778,239 9.1 -2.3 -14.8 -14.8 -6.0 7.6 3.2 5.3 -7.6 24.1 0.74

Dow Jones-UBS Commodity Index -1.1 -9.5 -9.5 -8.1 1.5 0.9 -1.1 -13.3 16.8

MLP

MLP Fund 1 10,786,598 4.3 13.1 42.3 42.3 16.1 29.5 N/A 6.3 3.5 35.9

Alerian MLP Index 5.3 27.6 27.6 15.0 29.5 15.0 4.8 13.9 35.9

MLP Fund 2 9,592,157 3.8 5.1 32.2 32.2 13.6 30.9 N/A 0.2 10.8 31.5

Alerian MLP Index 5.3 27.6 27.6 15.0 29.5 15.0 4.8 13.9 35.9

Hedge Funds

Hedge Fund 28,680,751 11.5 3.6 13.8 13.8 5.3 9.0 7.1 8.7 -5.6 9.9

HFRI Fund of Funds Composite Index 3.5 8.7 8.7 2.4 4.8 3.4 4.8 -5.7 5.7

Private Equity

Private Equity 1 4,637,825 1.9

Private Equity 2 3,755,623 1.5

Cash/Equivalents

Cash 3,862,067 1.5

19

vs Benchmark3

Years

vs Benchmark5

Years

vs Peer Group3

Years

vs Peer Group5

Years

Alpha3

Years

Alpha5

Years

Consistency5

Years

ExpenseRatio

Firm/StrategyEvaluation

Status

TIPS Fund Pass

Intermediate Bond Fund Pass

High Yield Fund Discuss

Foreign Bond Fund Hedged Discuss

Foreign Bond Fund Un-Hedged Discuss

Emerging Markets Debt Fund Discuss

S&P 500 Index Fund Pass

Small Core Fund Pass

International Fund Discuss

Emerging Markets Fund Discuss

Global Real Estate Fund N/A N/A N/A N/A

Commodity Fund N/A N/A N/A N/A

MLP Fund N/A N/A N/A N/A

Hedge Fund N/A N/A N/A N/A

Outperform Benchmark

Underperform Benchmark

vs Benchmark

Legend For Overall Criteria

1-50 Percentile

51-100 Percentile

vs Peer Group

50% or greater

Lower than 50%

Consistency

Lower than category average

Higher than category average

Expense Ratio

Subjective*

Subjective*

Firm/Strategy Evaluation

Discuss: Trailed 4 or more categories or recognized within Firm/Strategy Evaluation category

Status

Positive Alpha

Negative Alpha

Alpha

* Recognition within Firm/Strategy Evaluation category the result of a FLASH memo issued by DiMeo Schneider Investment Committee based on qualitative factors.

Sample ClientManager Evaluation Summary


20

ACCOUNT RECONCILIATION

BENCHMARK COMPOSITION

TRAILING PERFORMANCE SUMMARY

CALENDAR YEAR PERFORMANCE SUMMARY

CurrentQuarter

YTD1

Year3

Years5

YearsSince

InceptionInception

Date

Sample Client 01/01/1986

Beginning Market Value 244,507,853 236,871,499 236,871,499 237,256,871 174,495,266 55,220,005

Net Contributions -1,818,620 -6,872,077 -6,872,077 -26,631,013 -44,762,324 -164,041,534

Gain/Loss 7,563,356 20,253,166 20,253,166 39,626,731 120,519,647 359,074,117

Ending Market Value 250,252,588 250,252,588 250,252,588 250,252,588 250,252,588 250,252,588

CurrentQuarter

YTD1

Year3

Years5

Years10

YearsSince

InceptionInception

Date

Sample Client 3.10 8.64 8.64 5.69 11.88 6.11 9.13 01/01/1986

Sample Target Asset Allocation 2.99 8.23 8.23 5.80 11.90 4.54 8.84 01/01/1986

Sample Broad Policy Index 5.24 15.92 15.92 9.73 13.81 5.98 9.38 01/01/1986

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003

Sample Client 11.68 -2.68 15.87 28.12 -21.34 10.48 9.18 1.61 7.09 11.41

Sample Target Asset Allocation 11.27 -1.67 14.64 29.25 -33.78 6.14 11.70 4.13 8.62 19.73

Sample Broad Policy Index 12.92 0.92 13.86 26.96 -30.23 6.14 11.70 4.13 8.62 19.73

Allocation Mandate Weight (%)

Mar-2013

Barclays U.S. Treasury: U.S. TIPS 3.16

Barclays Aggregate 5.26

Barclays US Corp: High Yield 9.47

Barclays Global Aggregate Ex USD (Hedged) 4.74

Barclays Global Aggregate Ex USD 4.74

JPM GBI-EM Global Diversified 3.16

S&P 500 11.58

Russell 2000 Index 3.16

MSCI AC World ex USA 10.53

MSCI Emerging Markets Index 7.37

FTSE NAREIT Equity REIT Index 3.16

S&P Developed Property 4.21

Dow Jones-UBS Commodity Index 10.53

Alerian MLP Index 8.40

HFRI Fund of Funds Composite Index 10.53

Sample Client

Composite Reconciliation

December 31, 2013

21

Fixe

d In

com

e

Equi

ty

Rea

l Ass

ets

Hed

ge F

unds

Cas

h

TIPS

US

Bond

For.

Dev

. Bon

d

HY

Bond

EM B

ond

US

Equi

ty (L

C)

US

Equi

ty (S

C)

Int'l

Dev

elop

ed E

quity

EM E

quity

Rea

l Est

ate

MLP

s

Com

mod

. Fut

.

HFo

F M

ulti-

Stra

t

Ret

urn

Ris

k (σ

)

Dis

tanc

e F

rom

Tar

get

Reb

alan

ce R

equi

red

Target 31% 33% 26% 11% 0% 3% 0% 5% 9% 9% 3% 12% 0% 3% 11% 7% 7% 8% 11% 11% 0% 7.29% 12.05% N.A. N.A.12/31/2013 30% 34% 25% 12% 2% 3% 0% 5% 9% 9% 3% 11% 0% 3% 12% 7% 7% 8% 9% 12% 0% 7.32% 12.01% 0.06% No9/30/2013 30% 33% 25% 12% 1% 3% 0% 5% 9% 9% 3% 11% 0% 3% 11% 7% 7% 8% 10% 12% 0% 7.29% 11.98% 0.07%6/30/2013 30% 32% 26% 12% 1% 3% 0% 5% 9% 9% 3% 12% 0% 3% 11% 7% 7% 9% 9% 12% 0% 7.27% 11.82% 0.24%3/31/2013 32% 36% 21% 11% 1% 6% 0% 7% 7% 8% 3% 14% 0% 6% 11% 5% 7% 6% 9% 11% 0% 7.12% 11.79% 0.31%12/31/2012 33% 36% 20% 11% 1% 6% 0% 7% 7% 8% 3% 14% 0% 5% 11% 6% 6% 5% 9% 11% 0% 6.97% 11.64% 0.52%9/30/2012 31% 36% 22% 11% 1% 6% 0% 6% 7% 8% 3% 14% 0% 5% 12% 5% 6% 5% 10% 11% 0% 7.07% 11.82% 0.32%6/30/2012 32% 36% 21% 11% 1% 6% 0% 7% 7% 8% 3% 15% 0% 5% 11% 5% 7% 6% 9% 11% 0% 7.03% 11.67% 0.47%3/31/2012 33% 36% 20% 11% 1% 7% 0% 8% 5% 11% 0% 15% 0% 4% 11% 6% 6% 6% 9% 11% 0% 7.01% 11.61% 0.52%12/31/2011 34% 33% 20% 13% 2% 8% 0% 9% 5% 11% 0% 14% 0% 4% 11% 5% 6% 6% 9% 13% 0% 6.90% 11.17% 0.97%9/30/2011 35% 32% 20% 13% 1% 8% 0% 9% 6% 11% 0% 13% 0% 4% 11% 5% 6% 5% 9% 13% 0% 6.82% 11.03% 1.13%6/30/2011 32% 36% 21% 12% 1% 7% 0% 8% 5% 10% 0% 13% 0% 4% 12% 6% 6% 5% 9% 12% 0% 7.04% 11.63% 0.49%3/31/2011 23% 42% 23% 11% 1% 9% 0% 6% 5% 3% 0% 14% 0% 5% 14% 10% 3% 6% 14% 11% 0% 7.38% 12.41% 0.36%

Sample ClientPortfolio Engineer™

The current and target allocations exclude the private equity allocation because it cannot be rebalanced. The target allocation changed effective March 2013.

Fixed IncomeBroad Allocation 2013-2022 AssumptionsHedge FundsEquity Real Assets

6.6%

6.8%

7.0%

7.2%

7.4%

7.6%

7.8%

8.0%

10.8% 11.0% 11.2% 11.4% 11.6% 11.8% 12.0% 12.2% 12.4% 12.6% 12.8%

Expe

cted

Ret

urn

Expected Risk (Standard Deviation)

Target Allocation

12/31/2013

9/30/2013

Past Allocations

Constraint Radius 0.48%

22

December 31, 2013 September 30, 2013

September 30, 2013December 31, 2013

Market Value($)

Allocation(%)

Target(%)

TIPS 6,871,369 2.8 3.0

Broad Domestic Fixed 11,619,871 4.8 5.0

High Yield Fixed 21,236,752 8.7 9.0

International Fixed Hedged 10,506,534 4.3 4.5

International Fixed Un-Hedged 10,507,421 4.3 4.5

Emerging Markets Debt 6,663,273 2.7 3.0

Large Cap 26,292,317 10.8 11.0

Small Cap 7,511,191 3.1 3.0

International Equity 26,806,003 11.0 10.0

Emerging Markets 17,400,467 7.1 7.0

Real Estate Domestic 7,757,966 3.2 3.0

Real Estate Global 9,188,890 3.8 4.0

Commodities 23,310,293 9.5 10.0

MLP 19,578,306 8.0 8.0

Hedge Funds 27,692,007 11.3 10.0

Private Equity 8,158,186 3.3 5.0

Cash/Equivalents 3,407,005 1.4 0.0

Total Fund 244,507,853 100.0 100.0

Market Value($)

Allocation(%)

Target(%)

TIPS 6,717,189 2.7 3.0

Broad Domestic Fixed 11,634,443 4.6 5.0

High Yield Fixed 21,862,832 8.7 9.0

International Fixed Hedged 10,653,293 4.3 4.5

International Fixed Un-Hedged 10,460,131 4.2 4.5

Emerging Markets Debt 6,528,327 2.6 3.0

Large Cap 27,545,206 11.0 11.0

Small Cap 8,174,105 3.3 3.0

International Equity 27,925,282 11.2 10.0

Emerging Markets 17,574,930 7.0 7.0

Real Estate Domestic 7,924,713 3.2 3.0

Real Estate Global 9,158,876 3.7 4.0

Commodities 22,778,239 9.1 10.0

MLP 20,378,755 8.1 8.0

Hedge Funds 28,680,751 11.5 10.0

Private Equity 8,393,448 3.4 5.0

Cash/Equivalents 3,862,067 1.5 0.0

Total Fund 250,252,588 100.0 100.0

Sample Client

Allocation Vs. Target

December 31, 2013

23

CurrentQuarter

YTD1

Year3

Years5

Years10

YearsSince

InceptionInception

Date

Sample Client 3.10 8.64 8.64 5.69 11.88 6.11 9.13 01/01/1986



Sample Client

Performance Summary

December 31, 2013

24

CurrentQuarter

YTD1

Year3

Years5

Years10

YearsSince

InceptionInception

Date

Sample Client 3.10 8.64 8.64 5.69 11.88 6.11 9.13 01/01/1986

Endowments Less Than $500 Million Median 4.88 15.05 15.05 8.55 12.55 7.05 N/A



Sample Client

Performance Summary With Peer Group

December 31, 2013

25

-5

0

5

10

15

20

2526

CurrentQuarter

YTD1

Year3

Years5

Years2012 2011 2010

Sample Client 3.1 (91) 8.6 (88) 8.6 (88) 5.7 (92) 11.9 (67) 11.7 (75) -2.7 (73) 15.9 (6)

Sample Target Asset Allocation 3.0 (92) 8.2 (89) 8.2 (89) 5.8 (91) 11.9 (67) 11.3 (81) -1.7 (52) 14.6 (15)

Sample Broad Policy Index 5.2 (44) 15.9 (46) 15.9 (46) 9.7 (27) 13.8 (20) 12.9 (45) 0.9 (15) 13.9 (27)

5th Percentile 6.7 21.0 21.0 11.1 14.9 15.8 3.4 16.0

1st Quartile 5.9 17.9 17.9 9.8 13.6 13.9 -0.2 13.9

Median 4.9 15.1 15.1 8.5 12.5 12.7 -1.6 12.8

3rd Quartile 4.0 11.8 11.8 7.4 11.4 11.7 -2.9 11.4

95th Percentile 2.6 6.7 6.7 5.0 7.9 8.4 -4.4 8.0

Population 148 137 137 124 94 353 338 313

Sample ClientComposite Rank Vs. Peer Group

Endowments Less Than $500 Million

Parentheses contain percentile rankings.Calculation based on quarterly periodicity.

26

Up Market Capture

Sample Client Sample Target Asset Allocation

0.0

20.0

40.0

60.0

80.0

100.0

120.0

132.0

YTD( 3 Quarters Up )

1Year

( 3 Quarters Up )

3Years

( 8 Quarters Up )

5Years

( 14 Quarters Up )

10Years

( 26 Quarters Up )

Time Periods

100.0 100.0 100.0 100.0 100.0104.8 104.8 101.7 99.5

96.0

Down Market Capture

Sample Client Sample Target Asset Allocation

0.0

20.0

40.0

60.0

80.0

100.0

120.0

132.0

YTD( 1 Quarter Down )

1Year

( 1 Quarter Down )

3Years

( 4 Quarters Down )

5Years

( 6 Quarters Down )

10Years

( 14 Quarters Down )

Time Periods

100.0 100.0 100.0 100.0 100.0104.8 104.8 105.5

99.4

73.1

Sample ClientUp-Down Capture


27

1Year

3Years

5Years

7Years

10Years

Return 8.64 5.69 11.88 6.20 6.11

Standard Deviation 5.44 8.93 11.25 11.89 10.13

Downside Risk 2.50 6.07 5.42 7.16 6.01

vs. Sample Target Asset Allocation

Alpha -0.02 -0.21 0.39 3.52 2.32

Beta 1.05 1.02 0.96 0.82 0.81

Consistency 75.00 50.00 55.00 60.71 50.00

Information Ratio 1.43 -0.15 -0.05 0.69 0.34

M-Squared -0.01 -0.24 0.38 4.08 2.42

R-Squared 1.00 1.00 0.99 0.93 0.92

Tracking Error 0.28 0.56 1.16 3.96 3.76

Treynor Ratio 0.08 0.06 0.12 0.07 0.06

vs. Sample Broad Policy Index

Alpha -7.98 -2.61 0.90 2.08 1.41

Beta 1.10 0.87 0.79 0.77 0.76

Consistency 0.00 25.00 30.00 42.86 37.50

Information Ratio -5.85 -1.78 -0.52 0.14 -0.05

M-Squared -8.23 -3.32 0.77 2.50 1.35

R-Squared 0.97 0.96 0.94 0.94 0.93

Tracking Error 1.14 2.20 4.02 4.51 4.06

Treynor Ratio 0.08 0.07 0.15 0.08 0.06

vs. Citigroup 3 Month T-Bill

Sharpe Ratio 1.55 0.66 1.06 0.48 0.48

Sample ClientRisk Statistics


Calculation based on quarterly periodicity.

28

5 YEARS3 YEARS

10 YEARS7 YEARS

Sample Client

Risk Vs. Return

December 31, 2013

29

FUND INFO

HISTORICAL PERFORMANCE

FUND OBJECTIVE

QUARTERLY COMMENTS - FUND

PIMCO uses strategies intended to capitalize on the firm’s top-down analysis and their bottom-up fundamental research. PIMCO’s top downanalysis combines their outlook on the global economy and interest rates with a shorter term scenario analysis on factors such as interest ratevolatility, yield curve movements and credit trends. Once the larger themes are established, PIMCO’s portfolio management team focuses onselecting high-quality fixed income securities through the use of proprietary fundamental and quantitative research. In addition to traditionalstrategies such as sector rotation and yield curve management, PIMCO uses derivatives to implement portfolio strategy. The fund may use futurescontracts to replicate physical bonds or to create a short position in a given sector or along the yield curve. The fund is managed in a go anywherestyle which allows PIMCO to invest in securities not found in the index including, but not limited to, international developed country bonds,

convertible bonds, high yield bonds and emerging market debt.

Product Name : PIMCO:Tot Rtn;Inst (PTTRX)

Fund Family : PIMCO

Ticker : PTTRX

Peer Group : IM U.S. Broad Market Core Fixed Income (MF)

Benchmark : Barclays Aggregate

Fund Inception : 05/11/1987

Portfolio Manager : William H. Gross

Total Assets : $154,660 Million

Total Assets Date : 11/30/2013

Gross Expense : 0.46%

Net Expense : 0.46%

Turnover : 380%

The fund performed in line with the benchmark during the fourth quarter with some underperformance coming from the fund’s underweight to theU.S. corporate credit sector, which outperformed.However, the fund’s concentration in shorter term, less duration-sensitive securities, and holdings in mortgages and municipal bonds offset thefund’s underperformance in the U.S. corporate credit sector.Duration was added during the quarter by purchasing futures contracts to be approximately in line with the benchmark’s duration at year end.The portfolio remains underweight to the investment-grade credit sector, but the fund’s tactical positions in “Build America Bonds” are viewed assubstitutes to credit that are trading at more attractive yield spreads above treasuries than are traditional investment-grade credits.The team continues to find mortgage exposure through non-agency MBS, which the team views as more attractive on a relative value basis thanagency MBS, which the team views as overall fairly valued.During the quarter, the team added significantly to the portfolio’s futures positions that mature in late 2015 and early 2016 in order to benefit fromthe Fed delaying fed funds rate hikes longer than the market expects.Positioning remains overweight to the 0-5 year portion of the nominal yield curve and overweight to 10-20 year TIPS while limiting corporateexposure, especially in financials which are less attractive on a relative basis due to continued strong performance.

A. Novara, Research Analyst, DiMeo Schneider & Associates, L.L.C. 4Q13

CurrentQuarter

YTD1

Year3

Years5

Years10

Years2012 2011 2010 2009 2008 2007 2006 2005 2004 2003

PIMCO Total Return Instl -0.04 -1.92 -1.92 4.08 6.92 6.04 10.35 4.16 8.86 13.87 4.82 9.08 3.99 2.88 5.14 5.57

Barclays Aggregate -0.14 -2.02 -2.02 3.26 4.44 4.55 4.21 7.84 6.54 5.93 5.24 6.97 4.34 2.43 4.34 4.11

IM U.S. Broad Market Core Fixed Income (MF) Median 0.12 -1.95 -1.95 3.54 6.07 4.28 6.08 6.66 7.26 12.24 -3.46 5.30 3.93 1.80 3.95 4.24

PIMCO Total Return Instl Rank 63 49 49 27 31 1 1 94 19 41 14 1 45 3 10 23

PIMCO Total Return Instl

December 31, 2013

30

PEER GROUP ANALYSIS 3 YEAR ROLLING PEER GROUP PERCENTILE RANKING

RELATIVE PERFORMANCE TO INDEXRISK AND RETURN (01/01/09-12/31/13)

CurrentQuarter

1Year

3Years

5Years

PIMCO Total Return Instl 0.0 (63) -1.9 (49) 4.1 (27) 6.9 (31)

Barclays Aggregate -0.1 (71) -2.0 (54) 3.3 (61) 4.4 (84)

5th Percentile 1.1 -0.2 4.9 8.3

1st Quartile 0.6 -1.3 4.1 7.2

Median 0.1 -1.9 3.5 6.1

3rd Quartile -0.2 -2.5 3.0 5.0

95th Percentile -0.5 -3.5 2.2 3.6


December 31, 2013

31

PORTFOLIO CHARACTERISTICSRISK CHARACTERISTICS

SECTOR EXPOSURE (%)CREDIT QUALITY DISTRIBUTION (%)

1Year

3Years

5Years

10Years

Return -1.92 4.08 6.92 6.04

Standard Deviation 4.42 3.84 3.84 3.99

Barclays Aggregate

Return -2.02 3.26 4.44 4.55


vs. Barclays Aggregate

Tracking Error 1.74 2.68 2.53 2.18

Alpha 0.93 0.77 2.38 1.48

Beta 1.39 1.02 1.01 0.99

R-Squared 0.92 0.51 0.56 0.70

Consistency 66.67 69.44 75.00 67.50

vs. 90 Day U.S. Treasury Bill

Sharpe Ratio -0.43 1.04 1.74 1.08

Portfolio Benchmark

Effective Duration 5.2 5.6

Avg. Maturity 4.4 7.6

Yield To Worst 3.1 2.4


December 31, 2013

32

FUND INFO

HISTORICAL PERFORMANCE

FUND OBJECTIVE

QUARTERLY COMMENTS - FUND

Jennison Associates is the fund's sub advisor. The fund purchases stocks with a high level of unit growth, improving sales momentum, a high or improving return on equity and return on assets and a strong balance sheet. They also look for companies with a defensible franchise and a strongmarket position. Companies that possess distinctive attributes such as unique marketing competence, strong research and development, and/or excellent management capability, including financial discipline are also attractive. They will sell a stock if growth expectations are not achieved or if

fundamentals deteriorate. Sector weightings are a by-product of stock selection with risk controls in place that limit any one sector to 40%.

Product Name : Harbor:Cap Apprec;Inst (HACAX)

Fund Family : Harbor Capital Advisors Inc

Ticker : HACAX

Peer Group : IM U.S. Large Cap Growth Equity (MF)

Benchmark : Russell 1000 Growth Index

Fund Inception : 12/29/1987

Portfolio Manager : Team Managed

Total Assets : $19,970 Million

Total Assets Date : 11/30/2013

Gross Expense : 0.68%

Net Expense : 0.66%

Turnover : 41%(+) Favorable stock selection in health care (+0.9%) and in consumer discretionary (+0.6%) had the two biggest positive impacts throughout thefourth quarter.(+) Stock selection in industrials enhanced performance (+0.2%) for the quarterly period as well.(-) Unfavorable stock selection in energy had the most damaging impact on performance (-0.1%) throughout the fourth quarter.(+) Over the past year, stock selection in information technology (+2.4%) and sector selection in health care (+0.6%) had the two largest positiveimpacts on performance.(+) For the past 3 years, effective stock selection in information technology was the largest contributor to performance (+1.4%).(+) Over 5 years, beneficial stock selection in information technology gave the biggest boost to performance (+2.3%).

As of 9/30/2013, the three main sector and or country overweights (versus the Russell 1000 Growth Index) were in health care (+7%), consumer discretionary (+4%), and information technology (+3%). The three principal underweights were in The United States (-10%), consumer staples (-

5%), and industrials (-4%). The position in cash was 1%.

CurrentQuarter

YTD1

Year3

Years5

Years10

Years2012 2011 2010 2009 2008 2007 2006 2005 2004 2003

Harbor Capital Appreciation Instl 11.94 37.66 37.66 17.02 20.47 8.61 15.69 0.61 11.61 41.88 -37.13 12.25 2.33 14.02 9.34 30.47

Russell 1000 Growth Index 10.44 33.48 33.48 16.45 20.39 7.83 15.26 2.64 16.71 37.21 -38.44 11.81 9.07 5.26 6.30 29.75

IM U.S. Large Cap Growth Equity (MF) Median 10.75 33.55 33.55 14.83 18.80 7.23 14.93 -1.78 15.20 34.68 -39.72 13.77 6.52 5.67 7.29 26.63

Harbor Capital Appreciation Instl Rank 16 16 16 16 19 15 43 27 79 21 22 64 80 9 30 25

Harbor Capital Appreciation Instl

December 31, 2013

33

PEER GROUP ANALYSIS 3 YEAR ROLLING PEER GROUP PERCENTILE RANKING

RELATIVE PERFORMANCE TO INDEXRISK AND RETURN (01/01/09-12/31/13)

CurrentQuarter

1Year

3Years

5Years

Harbor Capital Appreciation Instl 11.9 (16) 37.7 (16) 17.0 (16) 20.5 (19)

Russell 1000 Growth Index 10.4 (60) 33.5 (51) 16.5 (23) 20.4 (20)

5th Percentile 12.7 42.5 18.7 23.4

1st Quartile 11.6 36.2 16.3 20.1

Median 10.8 33.5 14.8 18.8

3rd Quartile 9.8 30.7 13.6 17.4

95th Percentile 8.7 28.4 11.6 15.6


December 31, 2013

34

RISK CHARACTERISTICS PORTFOLIO CHARACTERISTICS

SECTOR EXPOSURE (%) TOP 10 HOLDINGS

Portfolio Benchmark

Total Securities 73 610

Price/Earnings (P/E) 33.6 20.5

Price/Book (P/B) 7.9 4.5

Dividend Yield 1.3 1.7

1Year

3Years

5Years

10Years

Return 37.66 17.02 20.47 8.61


Russell 1000 Growth Index

Return 33.48 16.45 20.39 7.83


vs. Russell 1000 Growth Index

Tracking Error 2.79 3.62 3.76 3.77

Alpha 2.85 -0.84 0.10 0.83

Beta 1.01 1.10 1.00 1.00

R-Squared 0.89 0.94 0.94 0.94

Consistency 66.67 58.33 51.67 53.33

vs. 90 Day U.S. Treasury Bill

Sharpe Ratio 3.94 1.21 1.27 0.51

As of 09/30/2013

Apple Inc ORD 4.1 %

Google Inc ORD 4.1 %

MasterCard Inc ORD 4.0 %

Amazon.com Inc ORD 3.6 %

Priceline Com Inc ORD 2.9 %

Facebook Inc ORD 2.4 %

Monsanto Co ORD 2.3 %

Biogen Idec Inc ORD 2.3 %

LinkedIn Corp ORD 2.2 %

Boeing Co ORD 2.1 %


December 31, 2013

35

Index Definitions & DisclosuresPlease note: Due to rounding methodologies of various data providers, certain returns in this report might differ slightly when compared to other sources.

Index Definitions:-Barclays Treasury U.S. T-Bills-1-3 Months includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed rate and non convertible.-Barclays Capital US Treasury Inflation Protected Securities Index measures bonds with fixed rate coupon payments that adjust for inflation as measured by the Consumer Price Index. All bonds must be publicly traded, investment grade and have a minimum maturity of one year and a minimum amount outstanding of $250 million of face value. It currently is comprised of only US Treasury issued securities.-Barclays Muni 5 Year index contains USD-denominated municipal bonds with maturities between 4 and 6 years that are classified as revenue bonds, general obligation bonds, pre-refunded bonds, or insured bonds.-Barclays U.S. Aggregate and Global Aggregate ex. USD Indices are unmanaged market value-weighted performance benchmarks for investment-grade fixed-rate debt issues, including government, corporate, asset-backed and mortgage-backed securities, with maturities of at least one year. -The Barclays U.S. Corporate High Yield Index measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds with a maturities of greater than one year. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt. -JP Morgan Government Bond Index-Emerging Market (GBI-EM) Index is a comprehensive emerging market debt index that tracks local currency bonds issued by emerging market governments; The Index is comprised of 14 countries whose weights are capped at 10% to avoid bias to more debt-laden countries.-The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s.-The Dow Jones Industrial Index is based on the average performance of the 30 blue-chip stocks monitored.-The NASDAQ measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market.-Russell 3000 is a market-cap-weighted index which consists of roughly 3,000 of the largest companies in the U.S. As such, it represents nearly 98% of the investable U.S. equity market.-Russell 1000 is a market-cap-weighted index which consists of roughly 1,000 of the largest companies in the U.S. -Russell 1000 Growth measures the performance of those Russell 1000 companies with higher P/B ratios and higher forecasted growth values.-Russell 1000 Value measures the performance of those Russell 1000 companies with lower P/B ratios and lower forecasted growth values.-Russell Mid Cap measures the performance of the 800 smallest companies in the Russell 1000 Index.-Russell Mid Cap Growth measures the performance of those Russell Mid Cap companies with higher P/B ratios and higher forecasted growth values.-Russell Mid Cap Value measures the performance of those Russell Mid Cap companies with lower P/B ratios and lower forecasted growth values.-Russell 2000 is a market-cap-weighted index which consists of the 2,000 smallest U.S. companies in the Russell 3000 universe. -Russell 2000 Growth measures the performance of the Russell 2000 companies with higher P/B ratios and higher forecasted growth values.-Russell 2000 Value measures the performance of those Russell 2000 companies with lower P/B ratios and lower forecasted growth values. -MSCI ACWI (All Country World Index) ex. U.S. Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed and emerging markets. The index consists of the 48 developed and emerging markets outside the U.S. This index represents approximately 60% of global market capitalization measured in U.S. dollars.-MSCI EAFE is a market-cap weighted index representing 22 of the developed markets outside North America. These 22 countries include 16 European countries and 6 Pacific countries.-MSCI EAFE Value and MSCI EAFE Growth are free float-adjusted market cap indexes designed to measure the equity market performance of developed markets, excluding US & Canada. Five growth and three value variables are used to assign stocks to a specific style index. These include, book value to price, 12-months forward earnings to price, dividend yield, long-term forward earnings per share (EPS) growth rate, short-term forward EPS growth rate, current internal growth rate, long-term historical EPS growth trend, and long-term historical sales per share growth trend.-MSCI EAFE Small Cap Index represents the small cap size segment of the MSCI EAFE Index. The small cap universe consists of the securities of those companies whose securities are not included in the large cap or mid cap segments of a particular market, which together comprise approximately 85% of each market’s free float-adjusted market cap. The small cap segment covers the 85-99% range of each market’s free float-adjusted market cap.-MSCI Emerging Markets is a market-cap weighted index representing the major emerging countries in the world.-Consumer Price Index is the United States Headline Consumer Price Index.-NAREIT Equity REITs measures equity REITs. The index contains health care REITs, but no mortgage and hybrid REITs.-S&P Developed World Property x U.S. measures the investable universe of publicly traded property companies in developed countries outside of the U.S.-S&P Developed World Property measures the investable universe of publicly traded property companies in developed countries.-Dow Jones UBS Commodity Index is composed of futures contracts on 19 physical commodities. No related group of commodities (e.g., energy, precious metals, livestock, grains, etc.) may constitute more than 33% of the index. Livestock = live cattle and lean hogs. Softs = sugar, cotton and coffee. Industrial Metals = aluminum, copper, zinc and nickel. Precious Metals = gold and silver. Grains = wheat, corn, soybeans. Energy = natural gas, crude oil, unleaded gas and heating oil. Petroleum = crude oil, unleaded gas and heating oil.-HFRI Fund Weighted Composite Index - Fund of Funds invest with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager. The Fund of Funds manager has discretion in choosing which strategies to invest in for the portfolio. A manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The minimum investment in a Fund of Funds may be lower than an investment in an individual hedge fund or managed account. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers. PLEASE NOTE: The HFRI Fund of Funds Index is not included in the HFRI Fund Weighted Composite Index.-The Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships and will be calculated by Standard & Poor’s using a float-adjusted, market capitalization-weighted methodology.-Cambridge Associates LLC calculates end-to-end returns for both a U.S. private equity index and a U.S. venture capital index. For the private equity index, data is compiled from 986 U.S. private equity funds formed since 1986, and for the U.S. venture capital index, 1,368 venture capital funds formed since 1981 are used. Returns include fully liquidated partnerships, and are net of fees, expenses, and carried interest. Historical returns are updated at year end to adjust for changes in the index sample. Data is subject to a one or two quarter lag, and may include the most recent preliminary data release when prudent to minimize the lag in data.Additional:-Equity sector returns are calculated by Russell and MSCI for domestic and international markets, respectively. MSCI sector definitions correspond to the MSCI GICS® classification (Global Industry Classification System); Russell uses its own sector and industry classifications. -MSCI country returns are calculated by MSCI, and are free float-adjusted market capitalization indices that are designed to measure equity market performance in each specific country.-Currency returns are calculated using Bloomberg’s historical spot rate indices and are calculated using the U.S. dollar as the base currency.-The Index of Leading Economic Indicators, calculated by The Conference Board, is used as a barometer of economic activity over a range of three to six months. The index is used to determine the direction and stability of the economy. The composite index of leading indicators, which is derived from 10 leading indicators, helps to signal turning points in the economy and forecast economic cycles. The leading indicators are the following: average weekly hours, average weekly initial claims, manufacturers new orders, both consumer and non defense capital goods, vendor performance, building permits, stock prices, money supply (M2), the interest rate spread and the index of consumer expectations.

36

DEFINITION OF KEY STATISTICS Returns

Time-weighted average annual returns for the time periods indicated. Time weighted returns seek to eliminate the impact of external cash flows on the rate of return calculations. All returns are annualized if the period for which they are calculated exceeds one year.

Universe Comparison The universe compares the fund's returns to a group of other investment portfolios with similar investment strategies. The returns for the fund, the index and the universe percentiles are displayed. A percentile ranking of 1 is the best, while a percentile ranking of 100 is the worst. For example, a ranking of 50 indicates the fund outperformed half of the universe. A ranking of 25 indicates the fund was in the top 25% of the universe, outperforming 75%.

Returns In Up/Down Markets This measures how the fund performed in both up and down markets. The methodology is to segregate the performance for each time period into the quarters in which the market, as defined by the index, was positive and negative. Quarters with negative index returns are treated as down markets, and quarters with positive index returns are treated as up markets. Thus, in a 3 year or 12 quarter period, there might be 4 down quarters and 8 up quarters. A simple arithmetic average of returns is calculated for the fund and the index based on the up quarters. A simple arithmetic average of returns is calculated for the fund and the index based on the down quarters. The up market capture ratio is the ratio of the fund's return in up markets to the index. The down market capture ratio is the ratio of the fund's return in down markets to the index. Ideally, the fund would have a greater up market capture ratio than down market capture ratio.

Standard Deviation Standard deviation is a statistical measure of the range of performance within which the total returns of a fund fall. When a fund has a high standard deviation, the range of performance is very wide, meaning there is a greater volatility. Approximately 68% of the time, the total return of any given fund will differ from the average total return by no more than plus or minus the standard deviation figure. Ninety-five percent of the time, a fund’s total return will be within a range of plus or minus two times the standard deviation from the average total return. If the quarterly or monthly returns are all the same the standard deviation will be zero. The more they vary from one another, the higher the standard deviation. Standard deviation can be misleading as a risk indicator for funds with high total returns because large positive deviations will increase the standard deviation without a corresponding increase in the risk of the fund. While positive volatility is welcome, negative is not.

R-Squared This reflects the percentage of a fund’s movements that are explained by movements in its benchmark index. An R-squared of 100 means that all movements of a fund are completely explained by movements in the index. Conversely, a

low R-squared indicates very few of the fund’s movements are explained by movements in the benchmark index. R-squared can also be used to ascertain the significance of a particular beta. Generally, a higher R-squared will indicate a more reliable beta figure. If the R-squared is lower, then the beta is less relevant to the fund’s performance. A measure of diversification, R-squared indicates the extent to which fluctuations in portfolio returns are explained by market. An R-squared = 0.70 implies that 70% of the fluctuation in a portfolio's return is explained by the fluctuation in the market. In this instance, overweighting or underweighting of industry groups or individual securities is responsible for 30% of the fund's movement.

Beta This is a measure of a fund’s market risk. The beta of the market is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the market in up markets and 10% worse that the market in down markets. It is

important to note, however, a low fund beta does not imply the fund has a low level of volatility; rather, a low beta means only that the fund’s market-related risk is low. Because beta analyzes the market risk of a fund by showing how responsive the fund is to the market, its usefulness depends on the degree to which the markets determine the fund's total risk (indicated by R-squared ).

Alpha The Alpha is the nonsystematic return, or the return that can’t be attributed to the market. It can be thought of as how the manager performed if the market’s return was zero. A positive alpha implies the manager added value to the return of the portfolio over that of the market. A negative alpha implies the manager did not contribute any value over the performance of the market.

Sharpe Ratio The Sharpe ratio is the excess return per unit of total risk as measured by standard deviation. Higher numbers are better, indicating more return for the level of risk experienced. The ratio is a fund's return minus the risk-free rate of return

(30-day T-Bill rate) divided by the fund’s standard deviation. The higher the Sharpe ratio, the more reward you are receiving per unit of total risk. This measure can be used to rank the performance of mutual funds or other portfolios.

Treynor Ratio The Treynor ratio measures returns earned in excess of that which could have been earned on a riskless investment per each unit of market risk. The ratio relates excess return over the risk-free rate to the additional risk taken; however, systematic risk is used instead of total risk. The Treynor ratio is similar to the Sharpe ratio, except in the fact that it uses the beta to evaluate the returns rather than the standard deviation of portfolio returns. High values mean better return for risk taken.

Tracking Error Tracking error measures the volatility of the difference in annual returns between the manager and the index. This value is calculated by measuring the standard deviation of the difference between the manager and index returns. For example, a tracking error of +/- 5 would mean there is about a 68% chance (1 standard deviation event) that the manager's returns will fall within +/- 5% of the benchmark's annual return.

Information Ratio The information ratio is a measure of the consistency of excess return. This value is determined by taking the annualized excess return over a benchmark (style benchmark by default) and dividing it by the standard deviation of excess return.

Consistency Consistency shows the percent of the periods the fund has beaten the index and the percent of the periods the index has beat the fund. A high average for the fund (e.g. over 50) is desirable, indicating the fund has beaten the index frequently.

Downside Risk Downside risk is a measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. The higher the factor, the riskier the product.

M-Squared M-squared, or the Modigliani risk-adjusted performance measure is used to characterize how well a portfolio’s return rewards an investor for the amount of risk taken, relative to that of some benchmark portfolio and to the risk-free rate.

37

VALUATION POLICY

DiMeo Schneider does not engage an independent third party pricing service to value securities. Our reports are generated using the security prices provided by custodians used by our clients. Our pricing hierarchy is to first use valuations provided by the custodian that holds assets for the greatest number of clients. If a client holds a security not reported by this custodian, the valuation is generated from the next most prominent custodian, and so forth. Each custodian uses pricing services from outside vendors, where the vendors may generate nominally different prices. Therefore, this report can reflect minor valuation differences from those contained in a custodian’s report.

REPORTING POLICY

This report is intended for the exclusive use of clients of DiMeo Schneider & Associates, L.L.C. Content and format is privileged and confidential. Any dissemination or distribution of this report is strictly prohibited.

The information contained in this report has been obtained from trade and statistical services and other sources which are deemed but not guaranteed to be accurate. Any opinions expressed herein reflect our judgment at this date and are subject to change.

OTHER

Rule 204-3 under the Investment Advisors Act of 1940 requires that we make an annual offer to clients to send them, without charge, a written disclosure statement meeting the requirements of such rule. We will be glad to send a copy of such a statement to you upon your written request.

Please advise us of any changes in your objectives or circumstances.

VANGUARD SPLICED INDEX DEFINITIONS

Vanguard Balanced Composite Index: Made up of two unmanaged benchmarks, weighted 60% Dow Jones U.S. Total Stock Market Index (formerly the Dow Jones Wilshire 5000 Index) and 40% Lehman Brothers U.S. Aggregate Bond Index through May 31, 2005; 60% MSCI US Broad Market Index and 40% Barclays U.S. Aggregate Bond Index through December 31, 2009; 60% MSCI US Broad Market Index and 40% Barclays U.S. Aggregate Float Adjusted Index through January 14, 2013; and 60% CRSP US Total Market Index and 40% Barclays U.S. Aggregate Float Adjusted Index thereafter.

Vanguard REIT Spliced Index: MSCI US REIT Index adjusted to include a 2% cash position (Lipper Money Market Average) through April 30, 2009; MSCI US REIT Index thereafter.

Vanguard Spliced Barclays US1-5Yr Gov/Cr Flt Adj Index: Barclays U.S. 1–5 Year Government/Credit Bond Index through December 31, 2009; Barclays U.S. 1–5 Year Government/Credit Float Adjusted Index thereafter.

Vanguard Spliced Barclays US5-10Yr Gov/Cr Flt Adj Index: Barclays U.S. 5–10 Year Government/Credit Bond Index through December 31, 2009; Barclays U.S. 5–10 Year Government/Credit Float Adjusted Index thereafter.

Vanguard Spliced Barclays US Agg Flt Adj Index: Barclays U.S. Aggregate Bond Index through December 31, 2009; Barclays U.S. Aggregate Float Adjusted Index thereafter.

Vanguard Spliced Barclays US Long Gov/Cr Flt Adj Index: Barclays U.S. Long Government/Credit Bond Index through December 31, 2009; Barclays U.S. Long Government/Credit Float Adjusted Index thereafter.

Vanguard Spliced Developed Markets Index: MSCI EAFE Index through April 30, 2013; FTSE Developed ex North America Index thereafter.

Vanguard Spliced Dev ex North America Index: MSCI EAFE Index through May 31, 2013; FTSE Developed ex North America Index thereafter.

Vanguard Spliced Emerging Markets Index: Spliced Emerging Markets Index reflects performance of the Select Emerging Markets Index through August 23, 2006; the MSCI Emerging Markets Index through January 9, 2013; and the FTSE Emerging Transition Index thereafter.

Vanguard Spliced Extended Market Index: Dow Jones Wilshire 4500 Index through June 17, 2005; S&P Transitional Completion Index through September 16, 2005; S&P Completion Index thereafter.

Vanguard Spliced Growth Index: S&P 500 Growth Index (formerly the S&P 500/Barra Growth Index) through May 16, 2003; MSCI US Prime Market Growth Index through April 16, 2013; CRSP US Large Cap Growth Index thereafter.

Vanguard Spliced Intermediate-Term Tax-Exempt Index: Barclays 7 Year Municipal Bond Index through January 31, 2002; Barclays 1–15 Year Municipal Bond Index thereafter.

Vanguard Spliced Mid Cap Growth Index: MSCI US Mid Cap Growth Index through April 30, 2013; CRSP US Mid Cap Growth Index thereafter.

Vanguard Spliced Mid Cap Value Index: MSCI US Mid Cap Value Index through April 30, 2013; CRSP US Mid Cap Value Index thereafter.

Vanguard Spliced Large Cap Index: Consists of MSCI US Prime Market 750 Index through January 30, 2013, and the CRSP US Large Cap Index thereafter.

Vanguard Spliced Mid Cap Index: S&P MidCap 400 Index through May 16, 2003; the MSCI US Mid Cap 450 Index through January 30, 2013; and the CRSP US Mid Cap Index thereafter.

Vanguard Spliced Small Cap Growth Index: S&P SmallCap 600 Growth Index (formerly the S&P SmallCap 600/Barra Value Index) through May 16, 2003; MSCI US Small Cap Growth Index through April 16, 2013; CRSP US Small Cap Growth Index thereafter.

Vanguard Spliced Small Cap Index: Russell 2000 Index through May 16, 2003; the MSCI US Small Cap 1750 Index through January 30, 2013; and the CRSP US Small Cap Index thereafter.

Vanguard Spliced Small Cap Value Index: SmallCap 600 Value Index (formerly the S&P SmallCap 600/Barra Value Index) through May 16, 2003; MSCI US Small Cap Value Index through April 16, 2013; CRSP US Small Cap Value Index thereafter.

Vanguard Spliced Total International Stock Index: Consists of the Total International Composite Index through August 31, 2006; the MSCI EAFE + Emerging Markets Index through December 15, 2010; and the MSCI ACWI ex USA IMI Index thereafter. Returns for the MSCI indexes are adjusted for withholding taxes.

Vanguard Spliced Total Stock Market Index: Dow Jones U.S. Total Stock Market Index (formerly the Dow Jones Wilshire 5000 Index) through April 22, 2005; MSCI US Broad Market Index through June 2, 2013; and CRSP US Total Market Index thereafter.

Vanguard Spliced Value Index: S&P 500 Value Index (formerly the S&P 500/Barra Value Index) through May 16, 2003; MSCI US Prime Market Value Index through April 16, 2013; CRSP US Large Cap Value Index thereafter.

38

itrix1 DiMeo$ Reports 6179446 122013 Sample Trustee...

Documents

Transcript of itrix1 DiMeo$ Reports 6179446 122013 Sample Trustee...