TIDI PRODUCTS, LLC INCENTIVE SAVINGS PLAN 1 QUARTER …€¦ · benefits of strong quarterly...
Transcript of TIDI PRODUCTS, LLC INCENTIVE SAVINGS PLAN 1 QUARTER …€¦ · benefits of strong quarterly...
TIDI PRODUCTS, LLC
INCENTIVE SAVINGS PLAN
1st QUARTER 2018 PERFORMANCE REVIEW
Prepared by: Clifford H. Dunteman, CFA Francis Investment Counsel LLC Vice President
Principal Investment Consulting Service
Edward McIlveen, CFA Director of Research
Principal Investment Consulting Services
Agenda
Your Independent Retirement Plan Investment Advisor
First Quarter 2018
June 21, 2018 – Tidi Products, LLC
Items Recommended for Discussion• Executive Summary (pp. 15-16)
• Independent View (pp. 8-14)
• 2018 Money University (pp. 6-7)
Items of Note• Francis Investment Counsel In the News (pp. 3-5)
• SITE VISIT – Milwaukee, WI. Met with Robert Helf, member of the portfolio management committee for
the FMI Large Cap Fund (p. 55).
Additional information about our manager & site visits is available upon request
• FMI Large Cap – Co-Manager added (p. 55)
• Morgan Stanley Frontier Markets – Fund restates performance (p. 79)
• Francis Investment Counsel 408(b)(2) Disclosure for 2018
Action Items – Require Committee Discussion/Vote
• T. Rowe Price Target Retirement – Consider Collective Trusts (p. 27).
• Harbor International – Watch List IX due to relative underperformance. Fund is to be replaced 6/1/18 by
American Funds EuroPacific Growth, per last meetings discussions (p. 63).
Francis Investment Counsel In The News
Your Independent Retirement Plan Investment Advisor
First Quarter - 2018
2018 “Large Team” Retirement Plan Adviser of the Year1
PLANSPONSOR Magazine
National award recognizing top retirement plan investment advisory firm dedicated to servicing
employer-sponsored retirement plans in a fiduciary capacity, with a commitment to fee-based
compensation and utilization of outcome-based metrics for plan success.
Francis Investment Counsel Earns Recognition
2018 First-Place Eddy Award2
Pensions & Investments Magazine
National award recognizing best practices by defined contribution service providers and plan
sponsors in delivering financial education to plan participants. Francis Investment Counsel earned
its 7th Eddy Award for its ‘National Save for Retirement Week’ campaign, the ‘Fat Wallet
Challenge.’
2018 I.Q. Award for Innovation3
Milwaukee BizTimes Media
Awards salute southeastern Wisconsin businesses for their innovative products, services, or processes. Francis Investment Counsel earned recognition for its recently developed
MoneyAdvice@Work® mobile application.
3
Francis Investment Counsel In The News
Your Independent Retirement Plan Investment Advisor
First Quarter - 2018
Disclaimers
1PLANSPONSOR's 2018 Retirement Plan Advisor of the Year recognition received based on response to Asset International's 2017PLANADVISER Retirement Plan Adviser Survey. Eligible advisors required nomination as a Retirement Plan Advisor of the Year or self-nomination by providing industry references. No submission fees required. Selection process based on quantitative variables, a sub-segment ofsurvey questions, and survey information supplied by the advisors themselves. Finalist selection based on firms' business revenue derived fromemployer-sponsored retirement plans, fiduciary service capacity, commitment to fee-based compensation, utilization of outcome-based metricsfor plan success, and service to plan sponsors and plan participants. Francis Investment Counsel was selected among four finalists in the "LargeTeam" category. Francis Investment Counsel is not affiliated with, does not receive remuneration from, or provide remuneration to AssetInternational.
22018 Eddy Award recognition received based on Pensions&Investments annual evaluation process. Winners demonstrated programeffectiveness and creativity, as well as completion of the entry form, which included a $150 fee per entry. Number of entries varies annually butaverages 130-150. Francis Investment Counsel self-nominated in the category, "Service provider only (special projects)." Selection criteriaweighted differently based upon the category, but in general, creativity and the ease of understanding complex topics was key in determiningsuccessful entries. In 2018, a total of 42 defined contribution plan education programs were recognized with a First, Second, or Third-PlacedEddy Award, based on the entry category, size of the plan, and educational topic discussed.
32018 I.Q. Innovation Award recognition received based on Milwaukee BizTimes Media annual evaluation process. Number of entries variesannually, and Francis Investment Counsel self-nominated for this award. Francis Investment Counsel is not affiliated with, does not receiveremuneration from, or provide remuneration to Milwaukee BizTimes Media.
Francis Investment Counsel Earns Recognition
4
We recently completed an update to our Firm website, as well as a successful launch to a brand-new site specifically focused
on our MoneyAdvice@Work® Financial Wellness Services. We encourage you to visit both sites which include updated content,
creative imagery, and improved navigation.
Your Independent Retirement Plan Investment Advisor
First Quarter 2018
Francis Investment Counsel
Enhances Online Presence
www.francisinvco.com
Visit your customized company page,
designed as a resource for plan
participants:
moneyadviceatwork.com/tidi
Access your secure client portal.
Navigate to “Client Log-In” and
enter the following information:
Websites Launched in February 2018
Note: Reports will be uploaded to secure client portal upon completion. All previous year (2017) reports are currently
populated. Additional historical reporting may be made available via the portal per client request.
Username: tidisponsor
Password: francis15tidi82
www.moneyadviceatwork.com
5
September 18 - Manitou, West Bend
September 26 - Lambeau Field, Green Bay
October 2 - Jefferson Street Inn, Wausau
October 9 - Marriott West, Madison
October 23 - Heyde Center, Chippewa Falls
October 30 - Miller Park, Milwaukee
November 6 - Live Web Sessions
To register, visit moneyadviceatwork.com/moneyu
JOIN US FOR
6
A Little Bit About Bitcoin Budgeting that Works
Investing 101 5 Estate Documents You Need
Are Reverse Mortgages a Good Idea? How to Save and Pay for College
Maximizing Social Security Benefits Raising Financially Savvy Kids
Which is Better: ETFs or Mutual Funds? Where’s the Market Heading?
What Insurance Do You Really Need? Understanding Medicare
How to Turn on Retirement Income How to Shop for a Financial Advisor
HSAs Aren’t Just for Today’s Health Expenses
Alphabet Soup: Understanding Pre-Tax and Roth IRAs
What’s Your Number: Find Out What You Really Need to Retire
Courses Offered
Welcome to Money University 2018!
We’re pleased to announce that Money University will return in Fall 2018! This special
off-site evening event will provide employees an opportunity to learn about money topics
important to them. Attendees select three courses throughout the evening, each taught
by “no sales,” MoneyAdvice@Work® advisors. Spouses and significant others are
encouraged to attend. A light dinner will be served.
This special employee benefit program is free-of-charge to participants. We ask for the
following plan sponsor support:
Provide reimbursement for initial announcement mailing costs. Plan sponsor will
provide letterhead and envelopes as well as a listing of all employees and their home
addresses. Francis will prepare and deliver announcements.
Promote event through postings and email reminders. Francis will provide reminder
emails to plan sponsor key contact for forwarding to participants. Plan sponsor will
also post event reminders in company common areas and communication centers.
7
Independent View
Your Independent Retirement Plan Investment Advisor
First Quarter 2018
Looking Back...
Source: Morningstar
~Exhibit 1~
Source: Morningstar
~Exhibit 2~ Source: Morningstar
Prices on pause – U.S. stocks snaprecord-breaking monthly gain streak
• After an exceptionally strong start to 2018,U.S. stock prices came unraveled in early-February, as investor anxiety surroundinginflation and the pace of Fed tightening sparkedthe first equity market correction in two years.
• February’s -3.69% total return for the S&P 500marked the end of a 15-month winning streak –the longest such streak for U.S. equities in thehistory of the index.
• Globally diversified investors reaped thebenefits of strong quarterly results in thedeveloping world, as accelerating globalearnings growth, benign trends in inflation, andrising oil prices served as tailwinds to bothemerging- and frontier-market equities.
• In addition to gains in energy, spiking pricesfor most agricultural contracts helped propelcommodities forward 2.8% for the quarter – apositive source of diversification in a difficultmarket environment for most risk assets.
5.2%
2.8%
1.5%
-0.1
%
-0.8
%
-1.4
%
-1.5
%
27.6
%
14.4
%
25.4
%
11.8
%
14.0
%
15.3
%
1.2%
-20%
-10%
0%
10%
20%
30%
40%
Frontier Mkts(MSCI
Frontier)
Hard Asset(CS
Commodity)
EmergingMkts (MSCI
EM)
U.S. SmallCap (Russell
2000)
U.S. LargeCap (S&P
500)
IntlDeveloped
(MSCIEAFE)
U.S. Bond(Bloomberg
BarclaysAgg)
Asset Class Returns, Ranked by 1Q18 Results1st Qtr 2018 1 Year
1Q18,-1.17%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
1/1 1/8 1/15 1/22 1/29 2/5 2/12 2/19 2/26 3/5 3/12 3/19 3/26
Qua
rter
-to-
date
Pric
e R
etur
n
1Q18: S&P 500 Price Return Index
"Official" Correction,-10.2% peak to trough
~Exhibit 3~
Source: FRED
Volatility vaults back to the forefront
• Absent for the entirety of 2017, equity marketvolatility returned during the first quarter. Inaddition to a sustained jump in the VIX, theMSCI World Index notched 14 trading sessionswith price moves of +/- 1.00%. This is almost5x the 3 total occurrences of last year.
• This surge in volatility led directly to theimplosion of multiple esoteric alternativestrategies, exposing vulnerabilities in thestructure of a few hedge funds and leveragedETFs.
0
10
20
30
40
50
60
2010 2011 2012 2013 2014 2015 2016 2017 2018
VIX
Ind
ex L
evel
CBOE VIX IndexVIX measures market expectations of near term volatility
conveyed by stock index option prices
2Q10: Flash Crash; Greece
3Q11: U.S. downgrade;European stress
3Q15: Chinagrowth slowdown
1Q18: Inflation &trade worries
2017: Extremelack of
volatility
8
Independent ViewFirst Quarter 2018
~Exhibit 5~
~Exhibit 6~
Source: USDA
Source: Bloomberg
Tough on trade – U.S. and China threatentariffs on targeted imports• Having campaigned on a platform of
renegotiating trade deals with China, PresidentTrump proposed tariffs on more than $50B ofChinese imports. The threat of a trade warshook markets throughout March.
• Beijing responded by proposing tariffs of theirown, targeting strategically important sectors ofthe U.S. economy (aircraft, auto, soybeans),particularly those with an outsized presence instates that supported Trump’s election.
Crypto-crash - bubbles burst in digital currencies• The bitcoin bubble was short-lived, as the
cryptocurrency cornerstone cratered more than50% during the first quarter, shedding almosttwo-thirds of its peak value.
• Cryptocurrencies came under fire early in thequarter, as a clamp-down by Asian regulatorsthreatened the spread of the virtual currenciesin China and South Korea. The introduction offutures contracts tied to bitcoin also helpedfacilitate its downfall, providing investors avehicle to speculate on its decline.
U.S. Soybean Production by County
12/18/17,$18,932
12/31/17,$14,311
3/31/18,$6,853
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
Cro
ss R
ate
(USD
/Bitc
oin)
Bitcoin vs. USD Cross Rate (since 4/1/17)
From peak: -64%1Q18: -52%
~Exhibit 4~
Source: U.S. Treasury
Coordinated correction – stocks and bonds decline together
• Breaking from an extended trend of negativecorrelation, U.S. bond prices fell right alongsideof stocks during the quarter. Yields on 10-yearU.S. Treasuries spiked more than 0.30%,reaching their highest levels since early-2014.
• Although long-term yields moved meaningfullyhigher, Fed initiated hikes on the short-endactually caused the yield curve to flatten duringthe quarter, with the spread on 2- and 10-yearU.S. Treasuries reaching its lowest point sinceOctober of 2007.
12/31/17,2.40%
3/31/18,2.74%
2.0%
2.2%
2.4%
2.6%
2.8%
3.0%
3.2%
10 Y
ear T
reas
ury
Not
e Y
ield
10 Year U.S. Treasury Yield (since 1/1/17)
1Q18
9
Independent View
Looking Forward ...
Source: Citi, Bloomberg
First Quarter 2018
~Exhibit 7~
~Exhibit 8~
~Exhibit 9~
Source: IMF, Bloomberg
Source: OECD, JPMorgan, Bloomberg
Economic activity easing, but expansion poised to push on
• Leading economic indicators, emergingmarket export volume, and globalmanufacturing PMI readings suggest aslowdown from recent peaks in economicactivity, an inevitable occurrence given theexceptionally strong results achieved sinceearly 2016.
• Although things are softening at themargin, absolute results for each of thesemeasures remain firmly in expansionaryterritory, a trend we don’t foresee changingin the near-term.
• In our opinion, one distinct benefit torecent pullbacks in economic activity andglobal equity prices is a healthy reset ininvestor expectations.
• As expectations trend lower, we believethat global fundamental data should start toexhibit upside surprise once more. This istypically a positive sign for global equityinvestors. As shown in the chart, theCitigroup Global Economic Surprise Indexis nearing similar low points to thosereached over the past two years.
• While fundamental data on the margin cancertainly influence short-term marketmovements, we advocate that investorsdon’t let this “noise” distract from thebroader picture – the global economicexpansion remains on solid ground.
• Global GDP growth accelerated to itsfastest pace since the Euro crisis during2017, and the coordinated expansion of theworld’s largest economies is setting thetable for even better results in each of thenext two years.
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Apr
-15
Aug
-15
Dec
-15
Apr
-16
Aug
-16
Dec
-16
Apr
-17
Aug
-17
Dec
-17C
LI
Tre
nd R
esto
red
Inde
x V
alue
OECD Global Leading Economic Indicators
Turning points = momentum changes
3/31/18 53.3
48.0
49.0
50.0
51.0
52.0
53.0
54.0
55.0
56.0
Apr
-15
Aug
-15
Dec
-15
Apr
-16
Aug
-16
Dec
-16
Apr
-17
Aug
-17
Dec
-17
PM
I Ind
ex V
alue
Global Purchasing Managers Index (JPM)
>50 is Expansionary
3.5%3.5%
3.6%
3.4%
3.2%
3.7%
3.9% 3.9%
3.0%
3.2%
3.4%
3.6%
3.8%
4.0%
4.2%
2012 2013 2014 2015 2016 2017 2018 E 2019 E
Ann
ual y
oy C
hang
e in
Wor
ld G
DP
Global GDP Growth
IMF Projections
4/11/18,-5.7
-20
-10
0
10
20
30
40
50
60
Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18
Inde
x V
alue
Citi Global Economic Surprise IndexA rising index means economic data is exceeding expectations, and vice versa
10
Independent View
Source: AAII, Bloomberg
First Quarter 2018
~Exhibit 11~
~Exhibit 12~
~Exhibit 10~
Source: Bloomberg
Source: Bloomberg
From volatility comes opportunity – U.S. equities growing more attractive
• Although the overall impact of recentmarket volatility wasn’t particularlysevere (the S&P 500 was down only0.76% during the first quarter), it wasenough to spark a major reversal inretail investor sentiment.
• As of early-April, nearly 43% of retailinvestors now hold a bearish outlook onU.S. equities, the highest proportionsince 2012. Historically, negative retailsentiment represents an opportune timeto buy U.S. stocks.
• In addition to impacting investorsentiment, softening equity prices alsoresulted in a marked improvement inU.S. equity valuations on virtuallyevery measure.
• Coupling incrementally weaker stockprices with more bullish forecasts forU.S. earnings growth caused theforward P/E ratio of the S&P 500 to fallfrom cyclical highs (20x) to below itsaverage level dating by to 1990 (17x).
• We believe that the impact of corporatetax reform, expansionary fiscal policy,and robust capital investment frombusiness owners should keep the U.S.economy trending upwards in the near-term, even in the midst of monetarytightening.
• For the first time in recent history,economic fundamentals, investorsentiment, and valuations all lookpositive for U.S. equities. Accordingly,we have upgraded the asset class to amodest overweight.
Valuations - PE
12/31/17,19.95
3/31/18,16.93
Avg. 16.94
10
12
14
16
18
20
22
24
26
28
Forw
ard
P/E
Rat
io (
Cur
rent
Yea
r)
S&P 500 Forward PE Ratio (1990-Present)
4/12/18,42.8%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
AAII Investor Sentiment Survey - % BearishHighest reading since 2012
-25
-20
-15
-10
-5
0
5
10
15
1988
1989
1990
1992
1993
1994
1995
1997
1998
1999
2000
2002
2003
2004
2005
2007
2008
2009
2010
2012
2013
2014
2015
2017
Con
fere
nce
Boa
rd U
.S. L
EI
Inde
x
U.S. Leading Economic Indicators
11
Independent View
Despite rising valuations, overseas outlook remains positive
Source: Bloomberg
First Quarter 2018
~Exhibit 13~
~Exhibit 14~
~Exhibit 15~
Source: MSCI, Bloomberg
Source: Bloomberg
• Unlike the U.S. Federal Reserve Bank,both the ECB and BOJ continue to provideimmense monetary support to theirrespective economies. Short-term interestrates remain at or below zero, andquantitative easing is set to continue untilat least September of 2018.
• Loose monetary policy has helped stabilizeconsumer prices and suppress the values ofboth the Euro and the Yen, trends that haveserved as a distinct tailwinds to economiesheavily reliant on exports.
• Cheap financing and relatively weakcurrencies have revitalized corporateearnings growth in both developed- andemerging-markets. That said, even whenconsidering recent gains, aggregate EPSand operating margins remain below pre-crisis peaks in the Eurozone.
• Improved profitability has bolsteredbusiness sentiment across the developedworld. In addition to the best 12-monthsfor Eurozone M&A growth (+56%) since2007, businesses are ramping upexpectations for future capex.
• Relatively young economic cycles keepus optimistic about the outlook forforeign stocks, but recent success hasn’tgone unnoticed in the market. Investorshave funneled money into foreign fundsfor six straight quarters, causingvaluations to normalize on a P/B basis.
• Although no longer a screaming bargain,both developed- and emerging-marketvaluations compare favorably to those inthe United States, keeping us overweightboth categories.
31.7%27.4%
13.4%
-30%
-20%
-10%
0%
10%
20%
30%
40%
09-1
112
-11
03-1
206
-12
09-1
212
-12
03-1
306
-13
09-1
312
-13
03-1
406
-14
09-1
412
-14
03-1
506
-15
09-1
512
-15
03-1
606
-16
09-1
612
-16
03-1
706
-17
09-1
712
-17
Gro
wth
(ye
ar-o
ver-
year
TT
M)
Corporate Earnings Growth Intl Developed (MSCI EAFE) Emerging (MSCI EM) U.S. (MSCI USA)
4Q17
Eurozone, 0.00%Japan,
-0.05%
U.S.,1.75%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Key Global Monetary Policy RatesEurozone Japan U.S.
1.66 1.76
3.23
1.711.55
2.80
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Intl Developed (MSCI EAFE) Emerging (MSCI EM) U.S. (MSCI USA)
Price/Book Ratio: Current vs. 20 Year HistoryCurrent (3/31/18) 20 Year Median
12
Independent ViewFirst Quarter 2018
Source: Bloomberg
~Exhibit 18~
Source: JPMorgan
~Exhibit 17~
~Exhibit 16~
Source: U.S. Treasury, FRED
A confluence of catalysts for commodities
• The U.S. output gap has officially closed,meaning economic growth from this pointforward will bring with it increased risk ofinflation. This late cycle dynamic tends tobe a favorable environment for hard assets.
• In addition, the threat of global trade wars,heightened geopolitical uncertainty, areduction in U.S. crude inventories, andattractive valuations relative to equitieshave bolstered our outlook on the assetclass.
Inflation anticipation on the rise – a bad sign for bondholders
• For much of the current recovery, U.S.monetary policy has aimed to stimulategrowth and fight deflation. Now more thannine years in, the Fed’s priorities haveshifted 180°, with each of the FOMC’s 12members now more concerned with thebuilding risk of inflation.
• This presents a difficult situation for bondsin the near-term, as the two most likelyoutcomes are the reappearance of above-target inflation or a more rapid pace ofshort-term interest rate hikes – neither ofwhich favors U.S. fixed income.
• Although rising U.S. Treasury yields wouldlikely put a damper on returns of fixedincome across the globe, this environmentfavors the higher-yielding bonds found inemerging markets.
• On a credit spread basis, EMD valuationsremain relatively expensive. That saidemerging market issuer fundamentals haveimproved markedly and currencies remainmore than one standard deviationundervalued relative to the U.S. Dollar.
3/31/18,0.99
0
1
2
3
4
5
6
7
8
9
10
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
S&P
GSC
I In
dex
/ S&
P 5
00 I
ndex
S&P Goldman Sachs Commodity Index/S&P 500
Avg. 3.94
Commodities "Cheap" v. Stocks
Commodities"Expensive" v. Stocks
3Q17,-0.2%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
% o
f G
DP
*
Emerging Market Current Account Balance
*Based on a weighted average of countries in the JPM GBI-EM Global Diversified Index
4/13/18,2.01%
0.75%
1.00%
1.25%
1.50%
1.75%
2.00%
2.25%
5 Year U.S. Breakeven Inflation RateMarket inflation expectations, based on yields of nominal vs. TIPS bonds
13
Independent View
Michael J.Francis, CIMA
PresidentChief Investment Officer
Jonathan N. Nolan, CFA
Senior Research Analyst
Kevin J. Roloff, CFA
Senior Research Analyst
Edward C. McIlveen, CFA
PrincipalDirector of Research
Clifford H. Dunteman Jr., CFA
Principal VP, Investment Consulting
Services
Francis Investment Counsel Investment
Committee
Francis Investment Counsel’s Global Economic Outlook and Recommendations
Global Economy – Economic Activity Easing, but Expansion Poised to Move Forward• United States – Despite the market jitters from early 2018, leading economic indicators continue
moving higher, consumers remain confident, and notable gains in both the temporary employmentand the PMI survey point to sustainable economic growth on the horizon. The longer duration ofthe benefits from tax reform – supportive of future capital expenditures and productivityenhancements – squarely point to significant earnings growth in the months ahead.
• Developed International - European corporate earnings growth is improving at an impressivepace and is coincident with the region’s strongest PMI readings in a decade. While the pace ofUK economic growth has moderated, the trends for economic growth in mainland Europe skew tothe upside, driven by favorable monetary conditions. In Japan, both the manufacturing and non-manufacturing Tankan surveys turned in their strongest readings since 2011. Evidence that theeconomic cycle is maturing in Japan: a very low unemployment rate and a YoY deceleration inthe growth of corporate operating profits off of already strong readings.
• Emerging/Frontier Markets – In China, both electricity consumption and capacity utilization havespiked higher corresponding with improvements in the country’s GDP growth, though the amountof leverage employed in the country remains concerning. Emerging Asia’s strength in exportsand hearty infrastructure spending is directly tied to China’s positive economic trajectory.Leading indicators for both Brazil and India and trending positively.
Domestic Equities – Neutral/Overweight (Upgrade from Neutral)• We’ve upgraded our outlook for U.S. equities given the recent correction and the deterioration in
investor sentiment. Valuations have also gone from being overvalued to attractive with theforward P/E ratio falling to 16.5x from 20.0x just 90-days previous. A strengthening economicback drop bolsters our conviction that equities have “room to run,” spurred on by the economicreboot provided by tax reform.
International Equities – Developed Neutral/Overweight / Emerging Neutral/Overweight (NoChange)• Developed international stocks are set to move higher, driven by strong fundamentals, abundant
liquidity, and attractive relative valuations (14x forward P/E). It’s important to keep in mind thatinternational equities appear to be coming back into favor after underperforming U.S. equities forseveral years.
• Although emerging market equity valuations on a P/B basis are slightly higher than longer termaverages (1.8x), the economic growth differential for the category is widening to the upsideversus developed markets. Risks to the downside seem contained with improvements in currentaccounts for the most risky countries, EM currencies in aggregate are cheap relative to the U.S.dollar, and commodity prices are sturdy.
Fixed Income – Neutral/Underweight (No Change) / EMD Neutral (No Change)• The Fed is likely to raise the Fed Funds rate a total of 3 times in 2018, but the prospect of a fourth
rate hike isn’t out of the question. Rates across the yield curve have moved higher, but the morerapid increase on the short-end has resulted in a relatively flatter yield curve. With U.S. andglobal economic growth improving, slightly underweighting U.S. bonds is prudent given the lowabsolute yields and better opportunities in equities. Though emerging market debt is yielding6.0% (gross), the overall valuation relative to U.S. Treasuries looks expensive and hence why wemaintain our “Neutral” rating.
Hard Assets – Neutral/Overweight (Upgrade from Neutral)• We’ve upgraded our outlook in Hard Assets to “Neutral/Overweight.” With the global economic
recovery firmly in place, we see the next phase of expansion accompanied with an inflationaryupturn. Though global inflation readings are tepid at the moment, 5-year and 10-year inflationexpectations signal that risk of higher than expected inflation is coming into focus. Commoditiesare also a good hedge in times of transient geopolitical events.
14
Active WL Criteria
Since Inc*
Quantitative
Qtr YTD
Executive SummaryTIDI Products, LLC
Ticker 1 Yr 3 Yr 5 Yr
Peer G
r. <50%
Qualitative
Peer G
r. <75%
Dow
nsid
e Risk
5 y
r Ret. v
. Mkt
R2 >
85%
Inv. F
irm
Inv. P
ersonnel
Indicates Positive/Negative
Change From Previous QuarterAs of March 31, 2018p / q
Passive
Track
ing E
rror
Stable Value XXXX X X X X
NONE
0.4%
0.4%Morley Stable Value Net 25bps N/A
0.4%
0.4%
1.1%
1.7%
0.5%
1.5%
0.3%
1.3%
0.3%
1.3%
Citigroup 3-month T-bill
PIntermediate Bond Index XXXX X X X X
NONE
-1.5%
-1.5%Vanguard Total Bond Market Index Adm VBTLX
-1.5%
-1.5%
1.2%
1.1%
1.2%
1.1%
1.8%
1.7%
1.7%
1.6%
Bloomberg Barclays U.S. Aggregate
Inflation-Protected Bond P PP F F P PXXXX X X X X
NONE
-0.8%
-1.1%DFA Inflation-Protected Securities I DIPSX
-0.8%
-1.1%
0.9%
0.6%
1.3%
1.2%
0.0%
-0.1%
0.1%
0.1%
Bloomberg Barclays U.S. Treasury: U.S. TIPS
Emerging Market Bond F PP P P P PpXXq X X X X
NONE
-1.8%
-1.5%MFS Emerging Markets Debt R6 MEDHX
-1.8%
-1.5%
3.3%
4.2%
5.5%
4.8%
3.9%
3.3%
4.0%
3.8%
JPM EMBI Global
Consider Collective TrustsTarget Retirement Date
-0.2%T. Rowe Price Retirement Balanced I TRPTX -0.2% 6.6% N/A N/A 5.8% P PP F P P PXXXX X X X X
-0.4%T. Rowe Price Retirement I 2010 I TRPAX -0.4% 7.4% N/A N/A 6.9% P PP F P P PXXXX X X X X
-0.2%T. Rowe Price Retirement I 2015 I TRFGX -0.2% 8.5% N/A N/A 8.0% P PP F P P PXXXX X X X X
-0.1%T. Rowe Price Retirement I 2020 I TRBRX -0.1% 10.3% N/A N/A 9.2% P PP F P P PXXXX X X X X
0.1%T. Rowe Price Retirement I 2025 I TRPHX 0.1% 11.6% N/A N/A 10.2% P PP F P P PXXXX X X X X
0.2%T. Rowe Price Retirement I 2030 I TRPCX 0.2% 12.9% N/A N/A 11.0% P PP F P P PXXXX X X X X
0.3%T. Rowe Price Retirement I 2035 I TRPJX 0.3% 14.0% N/A N/A 11.6% P PP F P P PXXXX X X X X
0.4%T. Rowe Price Retirement I 2040 I TRPDX 0.4% 14.7% N/A N/A 12.1% P PP F P P PXXXX X X X X
0.4%T. Rowe Price Retirement I 2045 I TRPKX 0.4% 15.0% N/A N/A 12.2% P PP F P P PXXXX X X X X
0.4%T. Rowe Price Retirement I 2050 I TRPMX 0.4% 15.1% N/A N/A 12.2% P PP F P P PXXXX X X X X
0.4%T. Rowe Price Retirement I 2055 I TRPNX 0.4% 15.0% N/A N/A 12.2% P PP P P P PXXXX X X X X
0.4%T. Rowe Price Retirement I 2060 I TRPLX 0.4% 15.0% N/A N/A 8.5% XXXX X X X X
Large Value P PP P P P PpXXX X X X X
SITE VISIT
Co-Manager Added
-2.8%
-1.2%FMI Large Cap FMIHX
-2.8%
-1.2%
7.0%
11.7%
7.9%
8.7%
10.8%
11.5%
13.1%
13.0%
Russell 1000 Value
Large Growth P PP P F P PqXXX X X X X
NONE
1.4%
3.0%Fidelity Contrafund FCNTX
1.4%
3.0%
21.2%
23.8%
12.9%
12.9%
15.5%
15.1%
10.2%
10.7%
Russell 1000 Growth
PMulti Blend Index XXXX X X X X
NONE
-0.6%
-0.6%Vanguard Total Stock Mkt Idx Adm VTSAX
-0.6%
-0.6%
13.9%
13.8%
10.2%
10.2%
13.0%
13.0%
14.5%
14.5%
CRSP US Total Market Index
International F PF F F P PXXXX X X X X
To be Replaced 6/1/18
Watch List IX
-1.1%
-0.6%Harbor International Retirement HNINX
-1.1%
-0.6%
17.0%
12.5%
6.7%
3.7%
6.4%
4.7%
8.4%
6.7%
MSCI ACWI ex USA
Small Value P PP P P P PXXXp X X X X
NONE
-2.6%
-2.2%DFA US Targeted Value I DFFVX
-2.6%
-2.2%
5.1%
6.9%
7.9%
7.2%
10.0%
10.6%
12.8%
14.3%
Russell 2000 Value
Small Growth P PP P P P PXXXX X X X X
NONE
2.3%
4.8%Loomis Sayles Small Cap Growth Instl LSSIX
2.3%
4.8%
18.6%
22.9%
8.8%
10.2%
12.9%
13.2%
11.8%
11.6%
Russell 2000 Growth
International Small Cap P PP F F P PXXXX X X X X
NONE
0.3%
1.0%Hartford International Small Company Y HNSYX
0.3%
1.0%
23.9%
22.8%
12.6%
9.7%
11.5%
10.1%
14.4%
13.4%
MSCI EAFE Small Cap
~ Continued on Following Page ~
PERFORMANCE NET OF INVESTMENT MANAGEMENT FEES. TRUST, INVESTMENT CONSULTING, AND/OR ADMINISTRATION FEES HAVE NOT BEEN DEDUCTED. The summary/prices/quotes/statistics contained
herein have been obtained from sources believed reliable but are not necessarily complete and cannot be guaranteed. Total return includes change in share price, reinvestment of dividends, and capital gains. Past performance results are
not a guarantee of future results. Actual performance will be affected by flows in and out of the Fund. Source: Morningstar Direct, Zephyr Associates, or Investment Company
Returns shaded in red indicate underperformance by active managers relative to their passive benchmarks.
*Since inclusion performance represents average annualized returns generated by the investment manager since being added to the Plan or since Francis Investment Counsel started monitoring the Plan. Actual inception dates can be
found on the first fund-specific page behind each tab throughout this report (in the footer).
15
Active WL Criteria
Since Inc*
Quantitative
Qtr YTD
Executive SummaryTIDI Products, LLC
Ticker 1 Yr 3 Yr 5 Yr
Peer G
r. <50%
Qualitative
Peer G
r. <75%
Dow
nsid
e Risk
5 y
r Ret. v
. Mkt
R2 >
85%
Inv. F
irm
Inv. P
ersonnel
Indicates Positive/Negative
Change From Previous QuarterAs of March 31, 2018p / q
Passive
Track
ing E
rror
Emerging Market Equity F PP P P P PpXXX X X X X
NONE
1.5%
3.0%Oppenheimer Developing Markets I ODVIX
1.5%
3.0%
25.4%
25.5%
9.2%
9.4%
5.4%
6.1%
6.5%
7.5%
MSCI Emerging Markets
Frontier Market XXXX X X X X
Fund Restates Performance
5.2%
5.7%Morgan Stanley Inst Frontier Mkts I MFMIX
5.2%
5.7%
27.6%
19.2%
8.3%
6.2%
9.1%
8.0%
20.8%
12.6%
MSCI Frontier Markets
Hard Asset XXXX X X X X
NONE
2.8%
3.3%PIMCO CommoditiesPLUS Strategy Instl PCLIX
2.8%
3.3%
14.4%
17.5%
-0.8%
1.4%
-8.2%
-6.4%
-6.8%
-4.6%
Credit Suisse Commodity Benchmark
Batting Average
(Includes active managers and excludes target date funds)
11 of 12
92%
11 of 12
92%
8 of 12
67%
6 of 12
50%
6 of 12
50%
6 of 12
50%
PERFORMANCE NET OF INVESTMENT MANAGEMENT FEES. TRUST, INVESTMENT CONSULTING, AND/OR ADMINISTRATION FEES HAVE NOT BEEN DEDUCTED. The summary/prices/quotes/statistics contained
herein have been obtained from sources believed reliable but are not necessarily complete and cannot be guaranteed. Total return includes change in share price, reinvestment of dividends, and capital gains. Past performance results are
not a guarantee of future results. Actual performance will be affected by flows in and out of the Fund. Source: Morningstar Direct, Zephyr Associates, or Investment Company
Returns shaded in red indicate underperformance by active managers relative to their passive benchmarks.
*Since inclusion performance represents average annualized returns generated by the investment manager since being added to the Plan or since Francis Investment Counsel started monitoring the Plan. Actual inception dates can be
found on the first fund-specific page behind each tab throughout this report (in the footer).
16
Created with Zephyr StyleADVISOR.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
0.43
%
0.43
%
1.66
%
1.50
%
1.29
%
0.35
%
0.35
%
1.07
%
0.49
%
0.28
%0.52
%
0.52
%
2.03
%
1.87
%
1.84
%
0.43
%
0.43
%
1.66
%
1.50
%
1.29
%
0.35
%
0.35
%
1.07
%
0.49
%
0.28
%0.52
%
0.52
%
2.03
%
1.87
%
1.84
%
0.43
%
0.43
%
1.66
%
1.50
%
1.29
%
0.35
%
0.35
%
1.07
%
0.49
%
0.28
%0.52
%
0.52
%
2.03
%
1.87
%
1.84
%
Retu
rn
0
0.5
1
1.5
2
2.5
3
1 quarter YTD 1 year 3 years Since Inc.*
FundCitigroup 3-month T-billHueler Stable Value Pooled Universe
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
100
102
104
106
108
110
112
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
FundCitigroup 3-month T-billHueler Stable Value Pooled Universe
Francis Investment Counsel LLC Review:Summary & OpinionYour stable value fund, the Morley Stable Value Fund, gained 0.43% in the first quarter. The mandate of this offering is to provide the Plan with a conservative, high quality and liquid investment vehicle which helps participants steadily build wealth through income accumulation and compounding. The team’s task is to construct the Fund to reflect the investment committee’s opinions about duration, relative valuations in various sectors, individual securities, as well as thoughtfully manage risk. Risk management at Morley is central to every aspect of the strategy as they use stress testing and optimization to determine portfolio allocations in combination with their fundamental credit research. In general, the Fund has the latitude to hold cash in a range of 5-15%, short-term bonds (duration of 0.25-3 years) at 35-80%, and intermediate (3-5 years) bonds in a band of 15-50%. The Fund has withstood many different market environments over the years and has garnered a meaningful fan base of over 5,000 different plans. In our opinion, client diversification is an advantage in helping the team manage cash flows and minimizes the risk of significant disruptions to the strategy from a single plan liquidating. In terms of the return profile, the Fund’s results over the last 3-years have lagged that of the average peer, but Morley maintains that the relative outperformance by other competitors also reflects a willingness to take on more risk than Morley thinks is practical for this mandate. More recently, however, the return gap between the Fund and the average peer has started to narrow as the Fed has been increasing interest rates and provided a boost for the reinvestment opportunities on the shorter-end of the yield curve where Morley has historically allocated significant capital. On that point, the current crediting rate is just over 2.00%. Our most recent site visit to Morley’s Portland, OR headquarters took place in December 2017. While onsite, we learned the team is actively deploying more technology to both comb through scores of data in the credit market markets and help them create an optimization of sorts within certain sub-strategies (i.e. credits in a narrow industry group). Importantly, they are not sacrificing risk management in an effort to seek additional opportunities - if anything, the technology has been designed to leverage a conservative approach and increase the scale for idea generation within that philosophy. This latest enhancement has also helped incrementally increase the Fund's current yield, but by design this is intended to only be on the margin. In sum, Morley has effectively deployed a repeatable and transparent investment process, and we readily endorse it as the Plan’s stable value offering.
Management & ExpensesTeam managed. In 2007, Morley Capital Management, Inc. became an indirect, wholly owned subsidiary of Principal Financial Group (Principal) and an affiliate of Principal Global Investors (PGI). The Fund’s expense ratio is 0.55%.
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Mar. 31, 2018 Morley Stable Value Fund Type: Stable Value
17
F R A N C I S I N V E S T M E N T C O U N S E L L L C 1 9 4 3 5 W C A P I T O L D R . S T E . 2 0 1 B R O O K F I E L D , W I 5 3 0 4 5 8 6 6 - 2 3 2 - 6 4 5 7
Mar. 31, 2018 Morley Stable Value Fund Type: Stable Value
Historical Asset Allocation Analysis
Portfolio Characteristics Top Holdings 12/31/17 3/31/18
Issue % of
Portfolio Number of Issuers 9 9 Prudential 17.29%Average Quality AA (S&P) AA (S&P) MetLife 12.59%Average Duration 2.68 Years 2.74 Years Transamerica Life 11.95%Total Fund Assets $7,706 M $7,610 M MassMutual Life 10.42%Crediting Rate 1.96% 2.04% TIAA-CREF Life 10.40%Total Fund Operating Expenses 0.54% 0.53% New York Life 9.18%Market Value/Book Value 99.77% 98.64% RGA Reinsurance 7.55% American General Life 7.85% State Street Bank 5.66% Represents 92.89% of portfolio Credit Quality (S&P Ratings) Sector Diversification
A-, 7.59%
A, 4.76%
A+, 2.35%
AA-, 4.59%
AA, 0.48%
Below A- & Not Rated,
14.88%
AA+, 0.80%
AAA, 64.55%
US Govt, 23%
ABS, 10%
Credit, 32%
GIC, 5%
MBS , 19%
Cash & Other, 6%
CMBS, 6%
The above summary/prices/quotes/statistics have been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. Past performance is no guarantee of future results.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1Q 9
4
4Q 9
4
3Q 9
5
2Q 9
6
1Q 9
7
4Q 9
7
3Q 9
8
2Q 9
9
1Q 0
0
4Q 0
0
3Q 0
1
2Q 0
2
1Q 0
3
4Q 0
3
3Q 0
4
2Q 0
5
2Q06
1Q07
4Q07
3Q08
2Q09
1Q10
4Q10
3Q11
2Q12
1Q13
4Q13
3Q14
2Q15
1Q16
4Q16
3Q17
Synthetic/Separate Account Contracts & GICs Cash
18
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
-1.4
7%
-1.4
7%
1.11
%
1.12
%
1.57
%
-1.4
6%
-1.4
6%
1.20
%
1.20
%
1.66
%
-1.4
6%
-1.4
6%
1.34
%
1.44
% 2.05
%
-1.4
7%
-1.4
7%
1.11
%
1.12
%
1.57
%
-1.4
6%
-1.4
6%
1.20
%
1.20
%
1.66
%
-1.4
6%
-1.4
6%
1.34
%
1.44
% 2.05
%
-1.4
7%
-1.4
7%
1.11
%
1.12
%
1.57
%
-1.4
6%
-1.4
6%
1.20
%
1.20
%
1.66
%
-1.4
6%
-1.4
6%
1.34
%
1.44
% 2.05
%
Ret
urn
-4
-3
-2
-1
0
1
2
3
4
5
1 quarter YTD 1 year 3 years Since Inc.*
Fund**Bloomberg Barclays U.S. AggregateLipper Core Bd Fd IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
96
98
100
102
104
106
108
110
112
114
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
Fund**Bloomberg Barclays U.S. AggregateLipper Core Bd Fd IX
Francis Investment Counsel LLC Review:Summary & OpinionYour intermediate bond fund, the Vanguard Total Bond Market Index Fund, lost 1.47% during the first quarter, performing in line with the average actively managed core bond fund. Given Vanguard’s expertise in passive management and the low costs afforded to investors, we hold this Fund out as a solid option for gaining exposure to the broad U.S. bond market. This Fund’s goal is to replicate the performance of the Barclays U.S. Aggregate Float-Adjusted Bond Index, and its passive investment style uses a sampling technique to closely match key benchmark characteristics, including sector weight, coupon, maturity, effective duration, convexity, and credit quality. Because it doesn't hold all 9,000+ issues in the index, there are some quarters when the Fund's results are slightly out of step with those of the benchmark, but over the past 5-years the Fund’s tracking error has proven quite low. The Fund invests in investment-grade corporate, U.S. Treasury, mortgage-backed, and asset-backed securities with short, intermediate, and long maturities in excess of one year, resulting in a portfolio of intermediate duration. Since the Fund tracks an investment-grade only index, it doesn't have the option to boost exposure to higher yielding, below-investment grade securities like many of its actively managed peers, an attribute that often causes it to lag in bull-market environments. All things considered, we continue to view this Fund as a strong passive fixed income option. Tracking Error, Management, and ExpensesThe Fund’s tracking error is 0.29% over the past 5-years, and remains highly competitive for an intermediate bond index fund. Joshua Barrickman (since 2013) is the Fund’s lead manager, and the Fund is very competitively priced at 0.05%. The Plan does not currently qualify for the Institutional share class of this offering (0.04%) which requires a minimum investment of $5M.Performance CommentaryThe first quarter proved to be a difficult one for fixed income investors, as 10-year Treasury yields moved upward more than 0.30% during a bout of equity market volatility in late-January and early-February. U.S. Treasuries held up better than corporate issues in this environment, as corporate debt spreads widened from cyclical lows during the quarter. Given the sharp upward movement in rates, shorter duration securities generally outpaced their longer duration counterparts.Performance vs. Active ManagementThe Fund currently ranks just outside the top half of the Morningstar Intermediate Bond peer group on a rolling 3-year basis. While passive management in this category has been a reasonably effective strategy over the past 3 years, actively managed intermediate bond funds performed much better on average from 2011 to mid-2015.
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results. **Represents spliced performance of the Vanguard Total Bond Market Index Signal (8/12-7/14) and Vanguard Total Bond Market Index Adm (8/14-present).
Fund change from Vanguard Total Bond Market Index Signal to Vanguard Total Bond Market Index Adm on 8/15/14, expenses remained unchanged.
Mar. 31, 2018 Vanguard Total Bond Market Index AdmFund Type: Intermediate Bond Index
19
20
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
-1.1
1%
-1.1
1%
0.63
% 1.23
%
0.06
%
-0.7
9%
-0.7
9%
0.92
%
1.30
%
0.14
%
-0.4
9%
-0.4
9%
0.67
%
1.05
%
-0.1
5%
-1.1
1%
-1.1
1%
0.63
% 1.23
%
0.06
%
-0.7
9%
-0.7
9%
0.92
%
1.30
%
0.14
%
-0.4
9%
-0.4
9%
0.67
%
1.05
%
-0.1
5%
-1.1
1%
-1.1
1%
0.63
% 1.23
%
0.06
%
-0.7
9%
-0.7
9%
0.92
%
1.30
%
0.14
%
-0.4
9%
-0.4
9%
0.67
%
1.05
%
-0.1
5%
Retu
rn
-4
-3
-2
-1
0
1
2
3
1 quarter YTD 1 year 3 years Since Inc.*
FundBloomberg Barclays U.S. Treasury: U.S. TIPSLipper Inf Prot Bd Fd IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
90
92
94
96
98
100
102
104
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
FundBloomberg Barclays U.S. Treasury: U.S. TIPSLipper Inf Prot Bd Fd IX
Francis Investment Counsel LLC Review:Summary & OpinionYour inflation-protected bond fund, the DFA Inflation Protected Securities Fund, lost 1.11% during the first quarter and underperformed its passive benchmark and average peer. Short-term relative performance ebbs and flows with shifts in the yield curve, but long-term performance is competitive. Since its October 2006 inception, the Fund's return slightly outpaces the passive benchmark 4.0% vs. 3.9% and ranks in the top decile of its peer group (out of 85). We attribute much of the Fund’s success to its low expense ratio (0.12%) and targeted maturity approach. With such cheap expenses, the hurdle to outperformance is lower when compared to the vast majority of competing products. Expenses are kept competitive partly by the firm's efficient trading systems and techniques, but also because trading volume is limited (16% turnover). The investment strategy here has not only been effective, but it is also straight forward, repeatable, and transparent. The Fund employs a constant-maturity approach focused on securities with maturities between 5 and 20 years. According to the portfolio management team, this segment of the yield curve is the most favorable from a risk-adjusted performance standpoint. Though the Fund will generally try to own a portion of each issue in the investable TIPS universe with maturities between 5 and 20 years, the managers may choose to exclude on-the-run (most recently issued) securities, which can command a premium price. Notably, interest rate forecasting has no part in the portfolio management process. The Fund’s mandate is simply to match the duration of the benchmark, which is currently 7.6 years. Recent performance remains competitive, with the Fund passing 2 of 4 quantitative Watch List criteria and sporting a three year peer group ranking in the top third. Overall, the Fund remains one of our top picks in the inflation-protected bond category.Management & Expenses David Plecha (since 2006), Joe Kolerich (2012), and Alan Hutchison (2016) of Dimensional Fund Advisors (Austin, TX). At 0.12%, the Fund's expense ratio is competitive versus an average of 0.19% for funds in the inflation-protected bond category used by Francis Investment Counsel.Quarterly Performance CommentaryThe Fund’s lack of exposure at the short end of the curve and an overweight to maturities between 7 and 15 years detracted from relative performance. These headwinds were partially offset by the favorable impact of excluding securities on the long end of the curve (20+ years). Compared to nominal bonds, TIPS outperformed during the quarter as expectations for future inflation crept higher.
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Mar. 31, 2018 DFA Inflation Protected Securities IFund Type: Inflation-Protected Bond
21
22
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 11% 17% 29%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk116.7%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL115.5% 117.3%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets
-0.8%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS0.1% 0.4% -0.3% -0.3%
FAIL3 of 5 outperforming the passive target needed to pass FAIL PASS FAIL FAIL 2 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 97.05% PASS
Investment Firm: Dimensional Fund Advisors LP PASS
Investment Personnel: David Plecha, since 2006 PASSJoe Kolerich, since 2012Alan Hutchison, since 2016
BenchmarksPeer Group: Lipper Inflation Protected Bond FundsPassive Target: Bloomberg Barclays U.S. Treasury: U.S. TIPS
Mar. 31, 2018 DFA Inflation-Protected Securities IFund Type: Inflation-Protected Bond
23
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
-1.5
2%
-1.5
2%
4.17
%
4.79
%
3.83
%
-1.7
8%
-1.7
8%
3.33
% 5.48
%
4.05
%
-0.3
1%
-0.3
1%
5.92
%
6.19
%
3.89
%
-1.5
2%
-1.5
2%
4.17
%
4.79
%
3.83
%
-1.7
8%
-1.7
8%
3.33
% 5.48
%
4.05
%
-0.3
1%
-0.3
1%
5.92
%
6.19
%
3.89
%
-1.5
2%
-1.5
2%
4.17
%
4.79
%
3.83
%
-1.7
8%
-1.7
8%
3.33
% 5.48
%
4.05
%
-0.3
1%
-0.3
1%
5.92
%
6.19
%
3.89
%
Retu
rn
-8
-6
-4
-2
0
2
4
6
8
10
12
1 quarter YTD 1 year 3 years Since Inc.*
Fund**JPM EMBI Global TRLipper EMG Mkt Dbt Fd IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
95
100
105
110
115
120
125
130
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
Fund**JPM EMBI Global TRLipper EMG Mkt Dbt Fd IX
Francis Investment Counsel LLC Review:Summary & OpinionYour emerging market bond fund, the MFS Emerging Markets Debt Fund, declined 1.52% in the first quarter, but in doing so slightly outperformed its passive benchmark and meaningfully underperformed its average Lipper peer. This Fund’s mandate is dedicated to providing investors a relatively higher amount of current income while seeking to preserve capital. While the average intermediate U.S. bond fund’s current yield is about 2.7%, this Fund’s current yield is around 4.6%. The higher current yield is the result of the credit, currency, and liquidity risks associated with this asset class. Largely, the team believes that favorable risk-adjusted returns are best achieved by identifying market inefficiencies via fundamental analysis, though they apply technical analysis when it comes to currency hedging positions. To best meet the current income objective and manage the aforementioned risks, the strategy is principally driven by a top-down, country allocation model. The Fund then deploys a diversified structure intended to reduce volatility and emphasize securities with above average trading liquidity. In terms of portfolio construction, this Fund is characteristically invested in cash bonds versus synthetic securities, meaning that management’s use of derivative securities to hedge currency, gain exposure to obscure markets, and manage duration is limited (currently less than 5%). Turning to the long term performance history, the product passes 6 out of 7 of our Watch List criteria but the rolling 3-year peer group ranking has moved into the third quartile which is mildly concerning. However, considering the strategy’s incrementally more defensive posture over the last 12-months (downside risk capture is 91%, down from nearly 98% just a few reporting periods ago) as the bull market in EMD has ensued, it’s not surprising to see the offering underperform. Effectively, this is the kind of return profile we would expect given a hindsight view of the market environment which transpired and management’s de-risking maneuvers. We recently visited (fourth quarter of 2017) with the team in their Boston office to get an update on performance, changes in personnel, and understand management’s portfolio positioning in the context of their current economic outlook. Overall, this was a productive meeting and the interaction affirmed our positive opinion for this Fund. While this defensively oriented approach has lagged its benchmarks over the last 3-years, we nevertheless remain comfortable with the offering and believe it is a suitable core option for the Plan’s participants given its long-term track record of success. Management & ExpensesMatthew Ryan (since 1998) and Ward Brown (since 2008) of Massachusetts Financial Services Company. The Fund’s expense ratio of 0.75% is below the average of 0.81% for emerging market debt funds utilized by Francis Investment Counsel clients. Performance Commentary Contributors to the Fund’s slight relative outperformance included security selection within sovereign bonds and underweight allocations to countries Ecuador, Kenya, and Oman. On the other hand, having zero exposure to Lebanon, which outperformed, an overweight and poor security selection in India, and a position in a metals/mining company in Zambia were detractors.
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results. **Represents spliced performance for MFS Emerging Markets Debt R4 (8/12-9/13) and MFS Emerging Markets Debt R6 (10/13-present).
Fund change from MFS Emerging Markets Debt R4 to MFS Emerging Markets Debt R6 on 9/17/13. Expenses were reduced from 0.86% to 0.78%, a savings of 9%.
Mar. 31, 2018 MFS Emerging Markets Debt R6Fund Type: Emerging Market Bond
24
25
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 45% 53% 70%
PASS FAIL FAIL 1 of 3 FAIL3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk97.8%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
PASS94.7% 91.3%
2 of 3 better than median (<100%) needed to pass PASS PASS 3 of 3 PASS
Mar 2014Returns vs. Markets
-0.7%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS0.1% -2.9% 0.0% 0.8%
PASS3 of 5 outperforming the passive target needed to pass FAIL FAIL PASS PASS 3 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 96.50% PASS
Investment Firm: Massachusetts Financial Services Company
PASS
Investment Personnel: Matthew Ryan, since 1998 PASSWard Brown, since 2008
BenchmarksPeer Group: Lipper Emerging Mrkts Hard Currency Debt FundsPassive Target: JPM EMBI Global TR USD (MS)
Mar. 31, 2018 MFS Emerging Markets Debt R6Fund Type: Emerging Market Bond
26
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Consider Collective Trusts
Quarter YTD 1-Year 3-YearSince
Inclusion(8/12, 12/14)*
Expense Ratio
T. Rowe Price Ret. Balanced I** -0.22% -0.22% 6.62% 4.74% 5.78% 0.42%Fidelity Freedom Income -0.61% -0.61% 4.86% 3.48% 3.98% 0.47%Vanguard Target Retirement Income -0.50% -0.50% 5.35% 3.68% 4.72% 0.13%S&P Target Date Income TR Index -0.80% -0.80% 5.35% 3.53% 4.64%
T. Rowe Price Retirement 2010 I** -0.43% -0.43% 7.36% 5.20% 6.91% 0.42%American Funds Trgt Date Ret 2010 R6 -1.01% -1.01% 5.87% 4.84% 6.76% 0.34%Fidelity Freedom 2010 -0.50% -0.50% 7.74% 5.09% 6.55% 0.53%S&P Target Date 2010 TR Index -0.87% -0.87% 6.09% 4.15% 5.74%
T. Rowe Price Retirement 2015 I** -0.25% -0.25% 8.55% 5.81% 8.05% 0.45%American Funds Trgt Date Ret 2015 R6 -0.95% -0.95% 6.47% 5.18% 7.59% 0.33%Fidelity Freedom 2015 -0.37% -0.37% 9.15% 5.83% 7.18% 0.58%Vanguard Target Retirement 2015 -0.52% -0.52% 7.30% 4.73% 7.08% 0.13%S&P Target Date 2015 TR Index -0.90% -0.90% 6.95% 4.76% 6.80%
T. Rowe Price Retirement 2020 I** -0.08% -0.08% 10.28% 6.61% 9.19% 0.49%American Funds Trgt Date Ret 2020 R6 -0.63% -0.63% 7.83% 5.80% 8.62% 0.35%Fidelity Freedom 2020 -0.36% -0.36% 10.01% 6.31% 7.78% 0.62%Vanguard Target Retirement 2020 -0.54% -0.54% 8.99% 5.66% 8.30% 0.13%S&P Target Date 2020 TR Index -0.92% -0.92% 7.78% 5.31% 7.73%
T. Rowe Price Retirement 2025 I** 0.08% 0.08% 11.65% 7.18% 10.16% 0.52%American Funds Trgt Date Ret 2025 R6 -0.30% -0.30% 9.86% 6.75% 10.19% 0.37%Fidelity Freedom 2025 -0.35% -0.35% 10.81% 6.70% 8.75% 0.66%Vanguard Target Retirement 2025 -0.59% -0.59% 10.20% 6.30% 9.14% 0.14%S&P Target Date 2025 TR Index -0.93% -0.93% 9.03% 6.02% 8.60%
T. Rowe Price Retirement 2030 I** 0.23% 0.23% 12.89% 7.80% 11.02% 0.55%American Funds Trgt Date Ret 2030 R6 -0.00% -0.00% 12.14% 7.86% 11.33% 0.39%Fidelity Freedom 2030 -0.33% -0.33% 12.78% 7.76% 9.66% 0.70%Vanguard Target Retirement 2030 -0.56% -0.56% 11.19% 6.83% 9.92% 0.14%S&P Target Date 2030 TR Index -0.95% -0.95% 10.19% 6.61% 9.41%
T. Rowe Price Retirement 2035 I** 0.30% 0.30% 13.95% 8.20% 11.65% 0.58%American Funds Trgt Date Ret 2035 R6 0.34% 0.34% 14.29% 8.86% 12.01% 0.40%Fidelity Freedom 2035 -0.26% -0.26% 14.32% 8.56% 10.64% 0.75%Vanguard Target Retirement 2035 -0.58% -0.58% 12.23% 7.35% 10.69% 0.14%S&P Target Date 2035 TR Index -0.94% -0.94% 11.31% 7.21% 10.11%
T. Rowe Price Retirement 2040 I** 0.38% 0.38% 14.69% 8.55% 12.08% 0.59%American Funds Trgt Date Ret 2040 R6 0.39% 0.39% 15.02% 9.20% 12.30% 0.41%Fidelity Freedom 2040 -0.28% -0.28% 14.52% 8.63% 10.75% 0.75%Vanguard Target Retirement 2040 -0.53% -0.53% 13.25% 7.86% 11.26% 0.15%S&P Target Date 2040 TR Index -0.94% -0.94% 12.08% 7.62% 10.62%
T. Rowe Price Retirement 2045 I** 0.45% 0.45% 15.00% 8.69% 12.16% 0.60%American Funds Trgt Date Ret 2045 R6 0.45% 0.45% 15.35% 9.41% 12.43% 0.41%Fidelity Freedom 2045 -0.25% -0.25% 14.48% 8.61% 10.87% 0.75%Vanguard Target Retirement 2045 -0.58% -0.58% 13.68% 8.10% 11.40% 0.15%S&P Target Date 2045 TR Index -0.94% -0.94% 12.49% 7.88% 11.00%
Mar. 31, 2018 T. Rowe Price Retirement IFund Type: Target Retirement Date
27
*Since inclusion performance in intended to represent results since an investment was added to the Plan. For the vintages Retirement Balanced through 2055, the date of inclusion was 8/1/12. The inclusion date for the 2060 fund is 12/1/14 (actual date of addition was 12/8/14).**Represents spliced performance of the T. Rowe Price Retirement retail funds (prior to 6/1/16) and T. Rowe Price Retirement I funds (6/1/16-present).
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Quarter YTD 1-Year 3-YearSince
Inclusion(8/12, 12/14)*
Expense Ratio
T. Rowe Price Retirement 2050 I** 0.45% 0.45% 15.10% 8.71% 12.16% 0.60%American Funds Trgt Date Ret 2050 R6 0.53% 0.53% 15.60% 9.53% 12.47% 0.42%Fidelity Freedom 2050 -0.25% -0.25% 14.59% 8.63% 10.94% 0.75%Vanguard Target Retirement 2050 -0.55% -0.55% 13.69% 8.11% 11.40% 0.15%S&P Target Date 2050 TR Index -0.94% -0.94% 12.84% N/A 11.34%
T. Rowe Price Retirement 2055 I** 0.37% 0.37% 15.03% 8.68% 12.15% 0.60%American Funds Trgt Date Ret 2055 R6 0.53% 0.53% 15.60% 9.51% 12.46% 0.42%Fidelity Freedom 2055 -0.29% -0.29% 14.49% 8.60% 11.10% 0.75%Vanguard Target Retirement 2055 -0.56% -0.56% 13.69% 8.05% 11.37% 0.15%S&P Target Date 2055 TR Index -0.91% -0.91% 13.01% N/A 11.59%
T. Rowe Price Retirement 2060 I** 0.45% 0.45% 15.04% 8.72% 8.49% 0.60%Fidelity Freedom 2060 -0.25% -0.25% 14.50% 8.57% 8.30% 0.75%Vanguard Target Retirement 2060 -0.52% -0.52% 13.72% 8.06% 7.67% 0.15%S&P Target Date 2060+ TR Index -0.90% -0.90% 13.15% N/A 8.03%
Mar. 31, 2018 T. Rowe Price Retirement IFund Type: Target Retirement Date
28
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Francis Investment Counsel LLC Review:Summary & Opinion: During the first quarter, the T. Rowe Price Retirement Funds outperformed the S&P Target Date Indexes. This outcome is somewhat surprising given the suite of fund's higher risk profile (more equity exposure) than the industry average and this quarter's widespread decline across all vintages of target date funds. Historically, these funds have underperformed during down markets. This quarter, however, the Funds got a nice boost from manager selection results, with a strong majority (16 of 20) of the underlying managers outperforming their respective benchmarks. The suite's Watch List metrics also remain strong, with each vintage ranking at or near the apex of its peer group on a three year basis. Overall, with a long history of competitive performance, a steady approach, strong underlying investment managers, and a well-equipped management team, this suite easily earns our endorsement. On the administrative front, having surpassed the required minimum investment of $20M, the Plan now qualifies for access to the T. Rowe Price Retirement Trusts. The Trusts, managed in an identical fashion to the funds but with lower operating costs, charge a flat fee of 0.46%. Based on the Plan's 3/31/18 balances, a conversion to the Trusts would save participants about $22,000 per year. Accordingly, we recommend having a discussion about making the conversion.
Since the T. Rowe Price Retirement Funds were launched in 2002, strong performance has been driven by a combination of effective strategic asset allocation decisions, competitive performance from underlying managers, and skillful tactical asset allocation. Given the history of successful implementation, target retirement assets under management at T. Rowe have ballooned to $220B. Importantly, two things have remained constant over the years: 1) portfolio manager Jerome Clark has managed the suite since day one, and 2) the equity glide path (which has a major influence on performance) has not materially changed. The glide path is structured so that investors with the longest time horizons have 90% in equities while investors at retirement have 55% in equities. The Funds continue to get more conservative for a 30-year period following the retirement year, at the end of which equity exposure remains fixed at 20%. Overall, it's a more aggressive glide path compared to most competing products. Also part of the suite is the T. Rowe Price Retirement Balanced Fund, which maintains a static strategic allocation of 40% equity/60% fixed-income. This offering is designed for retirees who prefer not to de-risk throughout retirement in order to pursue higher expected returns (albeit with more market risk). For the sake of comparison, the 2010 vintage currently has an equity exposure of 39.3% compared to 36.8% for the Retirement Balanced Fund.
The firm's Asset Allocation Committee is responsible for approving all asset allocation adjustments in the Funds. Adjustments can fall into one of two categories—strategic or tactical. A strategic change is the result of a fundamental shift in how the Asset Allocation Committee views the world and is made to reflect updated long-term expectations. These changes naturally require a lot of debate and discussion, which is fueled by input from a 21-person research and development team (1/3 have PhDs). The most recent change modified how the Funds allocate to fixed income with the goal of improving risk-adjusted performance. The Funds still split fixed-income exposure 70% to "core" bonds and 30% to "diversifiers," but the composition of each bucket has changed. New asset classes include non-USD hedged, unconstrained, long duration Treasuries, and bank loans. The team also implemented a "dynamic" allocation strategy in the diversifier bucket, giving more weight to long-duration Treasuries in vintages with high equity exposure (to hedge equity risk), and more weight to return-seeking assets (high yield, emerging market debt, bank loans) in shorter-date vintages. These changes were announced in 2Q17, and implementation began in 4Q17.
In contrast to strategic asset allocation changes, tactical changes are made with a shorter time frame in mind, typically 6 to 18 months. These adjustments arise from a combination of somewhat fluid inputs, including macroeconomic outlook, valuations, supply/demand dynamics, and input from the firm’s army of analysts and portfolio managers. Tactical calls are generally inspired by a belief that valuation levels tend to revert to the mean. At the end of the first quarter, the Funds remained underweight to equities (vs. bonds) as valuations look extended against a backdrop of continued modest economic growth. They also favor non-U.S. equities (vs. U.S. equities), which they view as having more earnings upside and economic growth potential. Overall, we maintain a high opinion of this suite.
Performance results are taken from Fund company and are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above summary/prices/quotes/statistics have been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. Past performance is no guarantee of future results.
Mar. 31, 2018 T. Rowe Price Retirement IFund Type: Target Retirement Date
29
E q u i t y G l i d e p a t h C o m p a r i s o n
F r a n c i s I n v e s t m e n t C o u n s e l L L C 1 9 4 3 5 W C a p i t o l D r . B r o o k f i e l d , W I 5 3 0 4 5 8 6 6 - 2 3 2 - 6 4 5 7 w w w . f r a n c i s i n v c o . c o m
Equity Glidepath Comparison T. Rowe Price Retirement Funds vs. S&P Target Date Indexes
*The T. Rowe Price Retirement Balanced Fund maintains a static 40% equity/60% fixed-income allocation and does not reside on the equity glidepath. All other vintages in the suite are set to follow a glidepath that will cause them to become increasingly conservative for 30 years
following the retirement year. At the end of those 30 years, equity exposure will stand at just 20%.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Retire.Bal.*
Tot
al E
quit
y E
xpos
ure
Vintage
Equity Glidepath Comparison: T. Rowe Price Retirement vs. S&P Target Date Indexes
T. Rowe Price Retirement (as of 12/31/17)
S&P Target Date (as of 2/28/18)
30
T. Rowe Price New Income I -1.48% -1.48% 1.58% 1.30% 1.78%BBgBarc US Agg Bond TR USD -1.46% -1.46% 1.20% 1.20% 1.82%
T. Rowe Price Ltd Dur Infl Focus Bd I 0.23% 0.23% 0.23% 0.91% -0.04%BBgBarc U.S. Treasury TIPS 1-5Y TR USD 0.12% 0.12% 0.14% 1.14% 0.07%
T. Rowe Price Intl Bd (USD Hdgd) I 1.15% 1.15% N/A N/A N/ABBgBarc Gbl Agg Ex USD TR Hdg USD 0.94% 0.94% 3.38% 2.54% 3.68%
T. Rowe Price Dynamic Global Bond I 0.64% 0.64% 0.29% 2.61% N/AICE LIBOR 3 Month USD 0.32% 0.32% 1.19% 0.75% 0.55%
T. Rowe Price US Treasury Long-Term I -3.42% -3.42% 3.08% -0.06% 2.53%BBgBarc Long Term US Treasury TR USD -3.29% -3.29% 3.51% 0.35% 3.29%
T. Rowe Price Floating Rate I 0.97% 0.97% 3.64% 3.66% 3.39%S&P/LSTA Performing Loan TR 1.53% 1.53% 4.63% 4.57% 4.20%
T. Rowe Price High Yield I -1.13% -1.13% 3.69% 4.80% 4.82%Credit Suisse HY USD -0.85% -0.85% 3.68% 5.16% 4.89%
T. Rowe Price Emerging Markets Bond I -0.87% -0.87% 3.78% 7.23% 3.95%JPM EMBI Global TR USD -1.78% -1.78% 3.34% 5.48% 3.86%
T. Rowe Price Value I -2.06% -2.06% 11.12% 8.11% 11.93%Russell 1000 Value TR USD -2.83% -2.83% 6.95% 7.88% 10.78%
T. Rowe Price Equity Index 500 I -0.78% -0.78% 13.90% 10.64% 13.11%S&P 500 TR USD -0.76% -0.76% 13.99% 10.78% 13.31%
T. Rowe Price Growth Stock I 3.86% 3.86% 25.04% 13.89% 17.11%Russell 1000 Growth TR USD 1.42% 1.42% 21.25% 12.90% 15.53%
T. Rowe Price Mid-Cap Value I -0.63% -0.63% 7.61% 9.11% 11.65%Russell Mid Cap Value TR USD -2.50% -2.50% 6.50% 7.23% 11.11%
T. Rowe Price Mid-Cap Growth I 4.09% 4.09% 20.29% 11.50% 15.37%Russell Mid Cap Growth TR USD 2.17% 2.17% 19.74% 9.17% 13.31%
T. Rowe Price International Value Eq I -1.13% -1.13% 11.59% 4.01% 5.47%MSCI EAFE Value GR USD -1.87% -1.87% 12.82% 4.89% 6.36%
T. Rowe Price International Stock I 0.32% 0.32% 16.95% 7.22% 7.71%MSCI EAFE Growth GR USD -0.96% -0.96% 17.92% 7.12% 7.54%
T. Rowe Price Overseas Stock I -0.18% -0.18% 17.27% 6.50% 7.47%MSCI EAFE GR USD -1.41% -1.41% 15.32% 6.05% 6.98%
T. Rowe Price Small-Cap Value I -1.59% -1.59% 10.26% 10.80% 10.51%Russell 2000 Value TR USD -2.64% -2.64% 5.13% 7.87% 9.96%
T. Rowe Price Small-Cap Stock I 1.91% 1.91% 13.61% 9.19% 12.09%Russell 2000 TR USD -0.08% -0.08% 11.79% 8.39% 11.47%
T. Rowe Price New Horizons I 6.27% 6.27% 27.04% 14.07% 17.11%Russell 2000 Growth TR USD 2.30% 2.30% 18.63% 8.77% 12.90%
T. Rowe Price Emerging Markets Stock I 2.87% 2.87% 30.93% 12.12% 7.64%MSCI EM GR USD 1.47% 1.47% 25.37% 9.21% 5.37%
T. Rowe Price Real Assets I -4.54% -4.54% 3.16% 2.62% 1.87%S&P North American Natural Resources TR -6.04% -6.04% -0.66% -1.45% -1.56%
BATTING AVERAGE (active funds only) 16 of 20 16 of 20 14 of 19 14 of 19 12 of 18
80% 80% 74% 74% 67%
Source: Morningstar Inc. / Zephyr Associates, Inc.
5 Years3 YearsYTDQuarter
The summary/prices/quotes/statistics contained herein have been obtained from sources believed reliable but are not necessarily complete and cannot be guaranteed. Total return includes change in share price, reinvestment of dividends, and capital gains. Past performance results are not a guarantee of future results. Actual performance will be affected by flows in and out of the Fund.
1 Year
PERFORMANCE NET OF INVESTMENT MANAGEMENT FEES. TRUST, INVESTMENT CONSULTING, AND/OR ADMINISTRATION FEES HAVE NOT BEEN DEDUCTED.
Returns in RED are active managers that underperformed for the period.
As of March 31, 2018
T. Rowe Price Retirement I Component Performance
31
32
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 15% 8% 4%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk140.2%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL133.2% 122.1%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets2.2%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-1.2% -0.4% 2.8% 1.3%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 3 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 94.34% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2002 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target Today FundsPassive Target: S&P Target Date Retirement Income Index
Mar. 31, 2018 T. Rowe Price Retirement Balanced IFund Type: Target Retirement
33
34
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 5% 4% 0%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk129.9%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL125.7% 117.8%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets2.2%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-0.5% 0.0% 2.0% 1.3%
PASS3 of 5 outperforming the passive target needed to pass PASS PASS PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 97.90% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2002 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2010 FundsPassive Target: S&P Target Date 2010 Index
Mar. 31, 2018 T. Rowe Price Retirement 2010 IFund Type: Target Retirement
35
36
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 4% 2% 0%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk123%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL120% 114%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets2.6%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-0.2% -0.3% 1.9% 1.6%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 3 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 97.87% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2004 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2015 FundsPassive Target: S&P Target Date 2015 Index
Mar. 31, 2018 T. Rowe Price Retirement 2015 IFund Type: Target Retirement
37
38
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 0% 0% 0%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk121.2%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL118.9% 113.4%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets2.9%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS0.1% -0.5% 2.0% 2.5%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 97.79% PASS
Investment Firm: T. Rowe Price Associates, Inc. PASS
Investment Personnel: Jerome Clark, since 2002 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2020 FundsPassive Target: S&P Target Date 2020 Index
Mar. 31, 2018 T. Rowe Price Retirement 2020 IFund Type: Target Retirement
39
40
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 0% 0% 0%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk117%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL115% 111%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets3.3%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS0.8% -0.8% 2.0% 2.6%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 97.31% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2004 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2025 FundsPassive Target: S&P Target Date 2025 Index
Mar. 31, 2018 T. Rowe Price Retirement 2025 IFund Type: Target Retirement
41
42
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 0% 0% 1%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk112.9%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL111.8% 108.2%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets3.4%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS1.1% -0.9% 2.0% 2.7%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 97.00% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2002 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2030 FundsPassive Target: S&P Target Date 2030 Index
Mar. 31, 2018 T. Rowe Price Retirement 2030 IFund Type: Target Retirement
43
44
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 2% 3% 4%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk110.5%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL109.6% 106.6%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets3.5%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS1.3% -1.1% 1.8% 2.6%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 96.45% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2004 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2035 FundsPassive Target: S&P Target Date 2035 Index
Mar. 31, 2018 T. Rowe Price Retirement 2035 IFund Type: Target Retirement
45
46
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 1% 3% 4%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk110.6%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL109.8% 106.8%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets3.4%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS1.4% -1.3% 1.8% 2.6%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 96.42% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2002 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2040 FundsPassive Target: S&P Target Date 2040 Index
Mar. 31, 2018 T. Rowe Price Retirement 2040 IFund Type: Target Retirement
47
48
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 2% 5% 5%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk105.7%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL105.0% 103.1%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets2.7%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS1.4% -1.1% 1.3% 2.5%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 96.50% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2005 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2045 FundsPassive Target: S&P Target Date 2045 Index
Mar. 31, 2018 T. Rowe Price Retirement 2045 IFund Type: Target Retirement
49
50
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 3% 6% 6%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk101.7%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL101.1% 99.7%
2 of 3 better than median (<100%) needed to pass FAIL PASS 1 of 3 FAIL
Mar 2014Returns vs. Markets2.0%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS1.2% -0.9% 0.7% 2.3%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 96.46% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2006 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2050 FundsPassive Target: S&P Target Date 2050 Index
Mar. 31, 2018 T. Rowe Price Retirement 2050 IFund Type: Target Retirement
51
52
Note: Because the I share class has a limited track record, the return stream analyzed in this analysis is spliced. The return stream incorporates peformance of the retail share class prior to the launch of the I share class on 10/1/15; the performance of the I share class is utilized thereafter.
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 7% 9% 13%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk99.6%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
PASS98.9% 98.2%
2 of 3 better than median (<100%) needed to pass PASS PASS 3 of 3 PASS
Mar 2014Returns vs. Markets1.4%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS1.2% -0.9% 0.3% 2.0%
PASS3 of 5 outperforming the passive target needed to pass PASS FAIL PASS PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 96.45% PASS
Investment Firm: T. Rowe Price PASS
Investment Personnel: Jerome Clark, since 2006 PASSWyatt Lee, since 2015
BenchmarksPeer Group: Lipper Mixed-Asset Target 2055+ FundsPassive Target: S&P Target Date 2055 Index
Mar. 31, 2018 T. Rowe Price Retirement 2055 IFund Type: Target Retirement
53
54
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
SITE VISIT Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
-1.1
6%
-1.1
6%
11.6
8%
8.71
% 12.9
6%
-2.8
3%
-2.8
3%
6.95
%
7.88
% 13.0
7%
-2.3
4%
-2.3
4%
9.43
%
8.34
% 13.0
5%
-1.1
6%
-1.1
6%
11.6
8%
8.71
% 12.9
6%
-2.8
3%
-2.8
3%
6.95
%
7.88
% 13.0
7%
-2.3
4%
-2.3
4%
9.43
%
8.34
% 13.0
5%
-1.1
6%
-1.1
6%
11.6
8%
8.71
% 12.9
6%
-2.8
3%
-2.8
3%
6.95
%
7.88
% 13.0
7%
-2.3
4%
-2.3
4%
9.43
%
8.34
% 13.0
5%
Retu
rn
-15
-10
-5
0
5
10
15
20
25
1 quarter YTD 1 year 3 years Since Inc.*
FundRussell 1000 ValueLipper Lg-Cap Value IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
100
120
140
160
180
200
220
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
FundRussell 1000 ValueLipper Lg-Cap Value IX
Francis Investment Counsel LLC Review:Summary & OpinionYour large-cap value fund, the FMI Large-Cap Fund, declined 1.16% in the first quarter but in doing so outperformed its benchmarks. In our opinion, shareholders have been the beneficiaries of a consistently applied process bringing portfolio concentration and diversification together for a compelling risk/reward profile. In March 2018 we sat down with investment committee member and analyst, Rob Helf, to get an update on the firm’s views about global capital markets, current portfolio positioning, and discussed one of the Fund’s holdings. Helf, one of ten listed portfolio managers here, noted the team’s discussions of late have been dominated by concerns about heightened valuation levels. This same sentiment was plainly stated in FMI’s most recent investor update to shareholders: “It takes a suspension of reason, and certain amount of raw greed, to get a market that resembles 1999, but investors have managed it.” Helf noted the biggest issue today has to do with the reality, at least what they see as a reality, that it is almost impossible to structure a diversified portfolio with inexpensively valued stocks. They see money pouring into indexing as fueling this mania and believe history will look back and blame indexing for many of the current valuation woes in the stock market. While FMI almost always has a reason to disparage a bull market, the team acknowledged they may have underestimated the impact of the regulatory rollback organized by the current administration. In terms of stocks, Helf walked us through the investment thesis for long time holding Expeditors International. The company provides air and ocean freight forwarding, vendor consolidation, and customs clearance services. Helf sees the firm benefiting from increasing international trade and indeed, volumes are improving off of lower levels from a few years back. Although Expeditors has a relatively small portion of the global market opportunity, its niche in customs clearing (43% of revenue) is very profitable and possesses hard to replicate competitive advantages. Valuation for the company is higher than preferred, but Helf is comfortable holding on as he thinks Expeditors is a great business, capital-lite, and a beneficiary of lower corporate tax rates. In sum, we found this meeting productive leaving us with a sense that the investment process continues to be operated as advertised. Additionally, the Fund is passing all of our Watch List criteria and it outperformed the Russell 1000 Value Index by 4.7% over the last 12-months. With so much working in its favor at present, the Fund accordingly earns our vote of confidence. Management & ExpensesPat English (since 2000) and a team of co-managers (see Watch List for details). The Fund's expense ratio is 0.84% which is much higher than our institutional average in this category at 0.50%. FMI recently launched (at the end of 2016), an institutional share class for this offering priced at 0.72%. Under the current arrangement, however, the existing share class pays 0.40% of revenue sharing which is rebated back to participants, bringing the net cost to shareholders to 0.44%. Given that the net arrangement is better for participants, the Committee decided to maintain the Plan’s allocation to the existing share class. Performance CommentaryFavorable sector weighting and stock selection results helped the Fund outperform its benchmark during the first quarter. Within sector weighting, an overweight allocation to the Information Technology (16.5% vs. 8.8% weight) sector proved beneficial, as the sector posted a +6.1% return. Within stock selection, results were strong within the Financials (+2.3% vs. -1.2%) and Consumer Discretionary (-0.3% vs. -2.7%) sectors. Notable individual performers included Progressive (+8.2%), TJX Companies (+7.1%), and Ebay (+6.6%). Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Mar. 31, 2018 FMI Large-Cap Fund Type: Large Value
55
56
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 7% 17% 27%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk83.2%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
PASS83.2% 87.7%
2 of 3 better than median (<100%) needed to pass PASS PASS 3 of 3 PASS
Mar 2014Returns vs. Markets
-1.5%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS2.3% 0.6% -3.1% 4.7%
PASS3 of 5 outperforming the passive target needed to pass FAIL PASS FAIL PASS 3 of 5
Benjamin Karek, since 2018
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 89.06% PASS
Investment Firm: Fiduciary Management, Inc. of Milwaukee
PASS
Investment Personnel: Pat English, since 2001 PASSJohn Brandser, since 2009Matthew Goetzinger, since 2009Robert Helf, since 2009Andy Ramer, since 2009Daniel Sievers, since 2010Jonathan Bloom, since 2011Matthew Sullivan, since 2014Jordan Teschendorf, since 2016
Commentary: Benjamin Karek was added to the portfolio management team on 1/31/18.
BenchmarksPeer Group: Lipper Large-Cap Value FundsPassive Target: Russell 1000 Value
Mar. 31, 2018 FMI Large CapFund Type: Large Value
57
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnApril 2005 - March 2018 (not annualized if less than 1 year)
3.06
%
3.06
%
23.7
7%
12.9
5%
10.7
2%
1.42
%
1.42
%
21.2
5%
12.9
0%
10.1
6%
2.98
%
2.98
%
23.1
4%
11.7
0%
9.03
%
3.06
%
3.06
%
23.7
7%
12.9
5%
10.7
2%
1.42
%
1.42
%
21.2
5%
12.9
0%
10.1
6%
2.98
%
2.98
%
23.1
4%
11.7
0%
9.03
%
3.06
%
3.06
%
23.7
7%
12.9
5%
10.7
2%
1.42
%
1.42
%
21.2
5%
12.9
0%
10.1
6%
2.98
%
2.98
%
23.1
4%
11.7
0%
9.03
%Ret
urn
0
5
10
15
20
25
30
35
1 quarter YTD 1 year 3 years Since Inc.*
FundRussell 1000 GrowthLipper Lg-Cap Growth IX
Manager Performance: "Mountain" ChartApril 2005 - March 2018 (Single Computation)
50
100
150
200
250
300
350
400
Mar 2005 Dec 2007 Dec 2009 Dec 2011 Dec 2013 Dec 2015 Mar 2018
FundRussell 1000 GrowthLipper Lg-Cap Growth IX
Francis Investment Counsel LLC Review:Summary & OpinionYour large-cap growth fund, the Fidelity Contrafund, gained 3.06% during the first quarter, outperforming its benchmarks. Will Danoff is one of the stars of the investment management industry, and for good reason. In all of his years as an investor, Danoff has hung his hat on one simple premise – stocks follow earnings. Find companies with the ability to consistently grow earnings and you’ll find stock prices that grow alongside of them. The key factor in Danoff’s simplistic mantra is consistency of earnings growth. Most companies can drive earnings growth over short stretches; however, in Danoff’s opinion only a shrewd management team can keep earnings growth alive over the long-term. To this end, Danoff has met with the company management for every stock he owns. In addition to a motivated management team, Danoff’s top holdings tend to boast high returns on capital and strong free cash flow generation. While the Fund doesn’t typically exhibit aggregate earnings growth as high as its average Morningstar peer, Contrafund tends to be more patient with his winners, allowing them to compound earnings growth over time. For example, Amazon, Alphabet, and Berkshire Hathaway are 3 of the Fund’s top 4 holdings, each of which has been in the portfolio for more than a decade. In the past, positions in small- and mid-cap companies accounted for a significant portion of the Fund’s return potential. However, as assets have grown ($124B as of 2/28/18) it has become increasingly difficult for Danoff to exploit these opportunities in a way that has meaningful impact on overall results. While the Fund now operates with a more limited potential for upside (2017’s results aside), it earns its fee by outperforming its benchmarks in market downturns, with a trailing 3-year downside capture of just 94%. This helps keep the Fund’s risk-adjusted returns well above those of its average peer, and gives us the view that the product is a viable alternative in the large-cap growth category. Will Danoff has proven capable of generating alpha for long-term shareholders and the Fund currently ranks within the top quartile of its peer group and passes 6 of our 7 Watch List criteria.Management & ExpensesWill Danoff (Since 1990). The Fund’s expense ratio was recently increased from 0.68% to 0.74%, as part of Fidelity’s performance-based fee structure. At 0.74%, the Fund's expense ratio is higher than the average expense ratio of 0.65% for active large-cap growth funds used by Francis Investment Counsel clients. Fidelity recently launced a K6 version of this fund (0.45%), although it provides the Plan with 35 bps less in revenue credit. The Committee has opted to remain in the retail share class until the K6 share class becomes less expensive on a net basis.Performance CommentaryBoth sector weighting and stock selection results added value during the quarter, as the Fund outperformed its benchmarks. Within sector weighting, the Fund benefited from a large overweight to the Financials sector (18.7% vs. 3.4%). Within stock selection, results were strong within the Consumer Discretionary (+14.0% vs. +4.2%) and Health Care (+2.9% vs. -0.2%) sectors. Notable individual performers included Amazon (+23.8%), Netflix (+53.9%), and Adobe Systems (+23.3%). Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 156 months beginning 4/1/05 (inception date provided by JD Young at Fidelity). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Mar. 31, 2018 Fidelity Contrafund Fund Type: Large Growth
58
59
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 30% 21% 22%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk87.5%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
PASS88.9% 94.4%
2 of 3 better than median (<100%) needed to pass PASS PASS 3 of 3 PASS
Mar 2014Returns vs. Markets0.2%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-2.6% -1.8% -0.1% 2.5%
FAIL3 of 5 outperforming the passive target needed to pass PASS FAIL FAIL PASS 2 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 92.15% PASS
Investment Firm: Fidelity Management & Research Company
PASS
Investment Personnel: William Danoff, since 1990 PASS
BenchmarksPeer Group: Lipper Large-Cap Growth FundsPassive Target: Russell 1000 Growth
Mar. 31, 2018 Fidelity ContrafundFund Type: Large Growth
60
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
-0.6
0%
-0.6
0%
13.8
5%
10.2
0% 14.5
3%
-0.6
0%
-0.6
0%
13.8
7%
10.2
1% 14.5
4%
-0.7
8%
-0.7
8%
13.2
8%
9.00
% 13.6
8%
-0.6
0%
-0.6
0%
13.8
5%
10.2
0% 14.5
3%
-0.6
0%
-0.6
0%
13.8
7%
10.2
1% 14.5
4%
-0.7
8%
-0.7
8%
13.2
8%
9.00
% 13.6
8%
-0.6
0%
-0.6
0%
13.8
5%
10.2
0% 14.5
3%
-0.6
0%
-0.6
0%
13.8
7%
10.2
1% 14.5
4%
-0.7
8%
-0.7
8%
13.2
8%
9.00
% 13.6
8%
Ret
urn
-10
-5
0
5
10
15
20
25
1 quarter YTD 1 year 3 years Since Inc.*
Fund**Passive Index***Lipper Mlt-Cap Core IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
100
120
140
160
180
200
220
240
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
Fund**Passive Index***Lipper Mlt-Cap Core IX
Francis Investment Counsel LLC Review:Summary & OpinionYour multi-cap blend fund, the Vanguard Total Stock Market Index Fund, lost 0.60% during the first quarter, but in doing so performed in-line with its primary benchmark and outperformed its average actively-managed Lipper peer. The Fund’s objective is to replicate the performance of the CRSP US Total Market Index, which contains exposure to mostly large-cap stocks, but some mid- (18%) and small-cap (11%) stocks as well. Vanguard’s Quantitative Equity Group attempts to mimic the index by sampling several thousand holdings and optimizing the holdings to replicate performance. Since founding the first index mutual fund available to individual investors in 1976, Vanguard's Quantitative Equity Group has developed some sophisticated portfolio construction methodologies and efficient trading strategies to deliver returns that are highly correlated with the benchmark. We also note that the Fund’s limited participation in securities lending and prudent practices with respect to the program (low volume, investing in high quality collateral) gives us confidence that management isn’t taking on unnecessary risks in an attempt to add value. All things considered, we continue to believe this Fund is an ideal option for passive exposure to U.S. equities.Tracking Error, Management, and ExpensesThe Fund’s tracking error is only 0.03% over the past 5-years, and remains highly competitive for a multi-cap blend index fund. Gerard O’Reilly (1994) and Walter Nejman (2016) manage this offering. The Fund carries an expense ratio of 0.04%. The Plan does not currently qualify for the Institutional share class of the Fund (0.035%) which requires a minimum investment of $5M.Performance CommentaryThe Fund declined during the quarter, marked by poor performance within the Consumer Staples (-6.7%), Energy (-6.0%), and Real Estate (-6.2%) sectors. Facebook (-9.5%), Wells Fargo (-13.1%), and Exxon Mobil (-9.9%) were among the largest individual detractors. Performance vs. Active ManagementThe Fund has held up exceptionally well relative to active managers in the Morningstar large-cap core category, ranking within the top quartile on a rolling 3-year basis. Please reference page 2 of this tab for a longer-term analysis of the Fund's performance relative to active management.Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results. **Represents spliced performance of the Vanguard Total Stock Market Index Signal (8/12-7/14) and Vanguard Total Stock Market Index Adm (8/14-present).***Represents spliced performance for the MSCI US Broad Market Index (prior to 6/13) and the CRSP US Total Market Index (6/13-present).
The primary benchmark for the Vanguard Total Stock Market Index Fund, the performance of which the Fund seeks to replicate, changed from the MSCI US Broad Market Index to the CRSP US Total Market Index on 6/3/13.
Fund change from Vanguard Total Stock Market Index Signal to Vanguard Total Stock Market Index Adm on 8/15/14, expenses remained unchanged.
Mar. 31, 2018 Vanguard Total Stock Market Index Adm Fund Type: Multi Blend Index
61
62
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List IX / To be Replaced on 6/1/18Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
-0.5
6%
-0.5
6%
12.4
5%
3.67
%
6.72
%
-1.0
8%
-1.0
8%
17.0
5%
6.68
%
8.38
%
-0.7
4%
-0.7
4%
16.3
4%
6.30
%
9.31
%
-0.5
6%
-0.5
6%
12.4
5%
3.67
%
6.72
%
-1.0
8%
-1.0
8%
17.0
5%
6.68
%
8.38
%
-0.7
4%
-0.7
4%
16.3
4%
6.30
%
9.31
%
-0.5
6%
-0.5
6%
12.4
5%
3.67
%
6.72
%
-1.0
8%
-1.0
8%
17.0
5%
6.68
%
8.38
%
-0.7
4%
-0.7
4%
16.3
4%
6.30
%
9.31
%
Retu
rn
-15
-10
-5
0
5
10
15
20
25
30
1 quarter YTD 1 year 3 years Since Inc.*
Fund**MSCI ACWI ex USALipper Internatl Fd IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
100
110
120
130
140
150
160
170
180
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
Fund**MSCI ACWI ex USALipper Internatl Fd IX
Francis Investment Counsel LLC Review:Summary & OpinionYour international fund, the Harbor International Fund, lost 0.56% in the first quarter but held up a little better than its passive benchmark and its average peer. The Fund landed on the Watch List more than two years ago following a series of miscues that dragged on relative performance. While on the Watch List, the Fund failed to show improvement, trailing its benchmarks +9.5% vs. +13.4% (passive) and +11.6% (active). The Fund still fails all four quantitative Watch List criteria as well. Accordingly, the Committee reviewed alternative international funds and selected the American Funds Europacific Growth R6 Fund as a replacement. The transition was scheduled for 6/1/18.
Management & ExpensesHoward Appleby, Jean-Francois Ducrest, and James LaTorre (managers since 2009, analysts since 2003) of subadvisor Northern Cross (Boston, MA). At 0.64%, the Fund's expense ratio is lower than the average of 0.71% for active international funds used by Francis Investment Counsel clients.
Quarterly Performance CommentaryModerate outperformance during the first quarter was driven by positive stock selection results in the Consumer Discretionary (+1.4% vs. -0.9%) and Industrials (+3.1% vs. -1.5%) sectors. Notable individual performers included Las Vegas Sands (+4.5%), Wynn Resorts (+8.5%), and ASML Holding (+13.0%). An out-of-benchmark stake in U.S. domiciled companies (15.8%) was also a tailwind, as the Fund’s U.S. allocation gained 2.3%.
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Fund change from Harbor International Instl to Harbor International Retirement on 6/1/17 reducing expenses from 0.79% to 0.71%, a savings of 10%.
Mar. 31, 2018 Harbor International Retirement Fund Type: International
63
64
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 72% 83% 86%
FAIL FAIL FAIL 0 of 3 FAIL3 of 3 better than median (<75%) needed to pass PASS FAIL FAIL 1 of 3 FAIL
Downside Risk104.0%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL101.3% 103.7%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets2.8%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-1.9% 0.2% -5.2% -4.6%
FAIL3 of 5 outperforming the passive target needed to pass PASS PASS FAIL FAIL 2 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 91.77% PASS
Investment Firm: Harbor Capital Advisors Inc PASSSubadvised by Northern Cross
Investment Personnel: Howard Appleby, since 2009 PASSJean Francois-Ducrest, since 2009James LaTorre, since 2009
BenchmarksPeer Group: Lipper InternationalPassive Target: MSCI ACWI ex USA
Mar. 31, 2018 Harbor International RetirementFund Type: International
65
66
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:yManager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
-2.1
9%
-2.1
9%
6.92
%
7.25
%
14.2
9%
-2.6
4%
-2.6
4%
5.13
%
7.87
% 12.7
8%
-2.4
9%
-2.4
9%
6.72
%
7.37
% 12.3
9%
-2.1
9%
-2.1
9%
6.92
%
7.25
%
14.2
9%
-2.6
4%
-2.6
4%
5.13
%
7.87
% 12.7
8%
-2.4
9%
-2.4
9%
6.72
%
7.37
% 12.3
9%
-2.1
9%
-2.1
9%
6.92
%
7.25
%
14.2
9%
-2.6
4%
-2.6
4%
5.13
%
7.87
% 12.7
8%
-2.4
9%
-2.4
9%
6.72
%
7.37
% 12.3
9%
Retu
rn
-15
-10
-5
0
5
10
15
20
25
1 quarter YTD 1 year 3 years Since Inc.*
FundRussell 2000 ValueLipper Sm-Cap Value IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
100
120
140
160
180
200
220
240
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
FundRussell 2000 ValueLipper Sm-Cap Value IX
Francis Investment Counsel LLC Review:Summary & OpinionYour small-cap value fund, the DFA US Targeted Value Fund, lost 2.19% in the first quarter but outperformed its passive and active benchmarks. Competitive performance the last few years has kept the Fund in good shape on the Watch List, where it passes all four quantitative criteria. Since the Fund was launched in 2000, its annualized return of +11.5% easily beats the passive benchmark’s +9.7%. The strategy has clearly been effective over time, and our forecast is for continued success given the repeatability inherent in the Fund’s rigid investment process and its cheap price tag (0.37%). DFA has made a name for itself by taking academic principles and incorporating them into asset management to deliver competitive performance. Simply put, the firm tries to add value by capturing premiums persistently shown to be associated with three key factors: company size (favoring small), relative price (favoring value), and profitability (favoring higher profitability). In terms of portfolio construction, there is no company-specific or macroeconomic research impacting buy or sell decisions. Instead, portfolio managers at DFA rely on data feeds to provide the necessary inputs to a process dependent on qualitative and quantitative stock selection rules and momentum screens. That process filters out REITs, Utilities, companies in bankruptcy, firms with less than $10M in market capitalizations, and stocks with negative price momentum. From there, it’s simply a matter of building a portfolio that skews towards small-cap, value-oriented, and highly profitable companies. But there is one important nuance. This Fund also maintains a structural mid-cap bias in order to broaden the opportunity set and allow for increased diversification, and this bias has been a substantial tailwind for historical performance. Since the Fund's 2000 inception, mid-cap value stocks (Russell MCV Index) have outperformed small-cap value stocks (Russell 2000 Value Index) 10.9% vs. 9.7%. Roughly 40% of the Fund's holdings are classified as mid-cap compared to 20% for the Russell 2000 Value Index. Overall, the Fund receives our endorsement.Management & ExpensesJed Fogdall (2012), Joseph Chi (2012), and Joel Schneider (2015) of Dimensional Fund Advisors (Austin, TX). The Fund’s expense ratio of 0.37% is meaningfully lower than an average of 0.87% for active small-cap value funds used by Francis Investment Counsel clients.Quarterly Performance CommentaryThe Fund’s 0.4% vs. 9.9% underweight to REITS (which is standard practice for this offering) was the biggest contributor to outperformance. With interest rates on the rise, REITS fell by 8.4%. Aided by positive effects from the Fund’s mid-cap bias, stock selection results were also positive, especially in the Energy (-6.8% vs. -10.7%) and Financials (+2.2% vs. +0.5%) sectors. Top individual performers included Kohl’s (+22.0%), Validus Holdings (+44.6%), and KapStone Paper and Packaging (+51.7%). Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Mar. 31, 2018 DFA U.S. Targeted Value I Fund Type: Small Value
67
68
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 58% 36% 41%
FAIL PASS PASS 2 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk99.7%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
PASS96.5% 95.7%
2 of 3 better than median (<100%) needed to pass PASS PASS 3 of 3 PASS
Mar 2014Returns vs. Markets5.6%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:PASS0.3% 0.8% -5.3% 1.8%
PASS3 of 5 outperforming the passive target needed to pass PASS PASS FAIL PASS 4 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 96.68% PASS
Investment Firm: Dimensional Fund Advisors LP PASS
Investment Personnel: Jed Fogdall, since 2012 PASSJoseph Chi, since 2012Joel Schneider, since 2015
BenchmarksPeer Group: Lipper Small-Cap Value FundsPassive Target: Russell 2000 Value
Mar. 31, 2018 DFA US Targeted Value IFund Type: Small Value
69
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnJuly 2011 - March 2018 (not annualized if less than 1 year)
4.76
%
4.76
%
22.9
2%
10.1
5%
11.6
3%
2.30
%
2.30
%
18.6
3%
8.77
% 11.8
3%
4.15
%
4.15
%
22.0
1%
9.54
%
11.0
9%
4.76
%
4.76
%
22.9
2%
10.1
5%
11.6
3%
2.30
%
2.30
%
18.6
3%
8.77
% 11.8
3%
4.15
%
4.15
%
22.0
1%
9.54
%
11.0
9%
4.76
%
4.76
%
22.9
2%
10.1
5%
11.6
3%
2.30
%
2.30
%
18.6
3%
8.77
% 11.8
3%
4.15
%
4.15
%
22.0
1%
9.54
%
11.0
9%Retu
rn
0
5
10
15
20
25
30
35
40
1 quarter YTD 1 year 3 years Since Inc.*
Fund**Russell 2000 GrowthLipper Sm-Cap Growth IX
Manager Performance: "Mountain" ChartJuly 2011 - March 2018 (Single Computation)
60
80
100
120
140
160
180
200
220
Jun 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
Fund**Russell 2000 GrowthLipper Sm-Cap Growth IX
Francis Investment Counsel LLC Review:Summary & OpinionYour small-cap growth fund, the Loomis Sayles Small-Cap Growth Fund, gained 4.76% in the first quarter and outperformed its benchmarks. In our opinion, this remains a top offering for small-cap growth investing. Management’s strategy in seeking to outperform the Russell 2000 Growth Index is done by first utilizing a quantitative screen designed to spot fast growing companies with improving relative strength and lower than average trading volume. From there, fundamental research is deployed to identify important economic drivers and evaluate if the forward-looking prospects of a company are sufficient for sustainable growth opportunities. Significantly, the valuation of each candidate is considered based on the team’s estimates of future cash flow and is abridged into a discounted cash flow analysis to create an intrinsic value for comparison to the current share price. In terms of portfolio construction, management spreads it bets out over about 100 holdings with top holding (2U Inc.) accounting for just 1.7% of assets. This kind of diversification, along with the Fund’s sell discipline that incorporates stop-losses, helps to keep downside volatility in check. This slightly more defensive posture can be observed in our Watch List criteria in the “Downside Risk” analysis where the Fund routinely captures less of the bad volatility (91% currently) as well as appraising performance in calendar years where markets were soft such as 2011 and 2015 where the passive index declined but the Fund made money albeit a modest amount. Importantly, the Fund’s rebound in 2017 has resulted in a material improvement in the Fund’s showing on the Watch List to where it is now passing all of our quantitative metrics. On the qualitative front, our most recent site visit with the team in their Boston offices during October 2017 affirmed there haven’t been material changes to the investment process or philosophy that warrant concern. Given this favorable backdrop, the Committee agreed with our recommendation last quarter to remove the Fund from the Watch List. Management & ExpensesMark Burns and John Slavik (both since 2005). The Fund’s expense ratio of 0.95% is slightly higher than that of the average small-cap growth fund we follow at 0.88%. However, the revenue sharing paid to plan participants is 0.15% bringing the net cost to 0.80%. There is a share class of this fund (N shares) which does not pay revenue sharing, but is more expense than the current arrangement at 0.82%. Our recommendation is to stay the course with the current share class (I shares) until the cost advantage of utilizing the N shares is the same as or better than the non-rev share option. Performance Commentary Strong stock selection results boosted relative performance during the quarter, a trend that was particularly evident within the Consumer Discretionary (+4.7% vs. -3.2%), Health Care (+9.7% vs. +6.4%), and Information Technology (+12.8% vs. +9.9%) sectors. A few individual contributors included online education provider 2U (+30.3%), which moved up as the firm reported strong results amid a continued gain in market share, and medical device company Insulet (+25.6%), which expanded its business outside of the U.S. and improved margins.
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 81 months beginning 7/1/11 (actual inception 7/15/11). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. Past performance is no guarantee of future results. **Represents spliced performance for Loomis Sayles Small-Cap Growth Retail (7/11-7/12) and Loomis Sayles Small-Cap Growth Instl (8/12-present).
Fund change from Loomis Sayles Small-Cap Growth Retail to Loomis Sayles Small-Cap Growth Instl on 8/15/12 reducing the expense ratio from 1.25% to 0.98% a savings of 22%.
Mar. 31, 2018 Loomis Sayles Small-Cap Growth InstlFund Type: Small Growth
70
71
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 34% 36% 27%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk96.5%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
PASS96.5% 91.6%
2 of 3 better than median (<100%) needed to pass PASS PASS 3 of 3 PASS
Mar 2014Returns vs. Markets4.5%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-6.3% 2.4% -2.9% 4.3%
PASS3 of 5 outperforming the passive target needed to pass PASS PASS FAIL PASS 3 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 91.87% PASS
Investment Firm: Loomis Sayles & Company LP PASSCommentary: Closed to new investors on 1/30/13.
Investment Personnel: Mark Burns, since 2005 PASSJohn Slavik, since 2005
BenchmarksPeer Group: Lipper Small-Cap Growth FundsPassive Target: Russell 2000 Growth
Mar. 31, 2018 Loomis Sayles Small Cap Growth InstlFund Type: Small Growth
72
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
1.00
%
1.00
%
23.0
6%
7.73
%
9.83
%
0.32
%
0.32
%
23.9
3%
12.6
5%
14.2
7%
0.44
%
0.44
%
22.5
9%
10.5
1%
12.5
8%
1.00
%
1.00
%
23.0
6%
7.73
%
9.83
%
0.32
%
0.32
%
23.9
3%
12.6
5%
14.2
7%
0.44
%
0.44
%
22.5
9%
10.5
1%
12.5
8%
1.00
%
1.00
%
23.0
6%
7.73
%
9.83
%
0.32
%
0.32
%
23.9
3%
12.6
5%
14.2
7%
0.44
%
0.44
%
22.5
9%
10.5
1%
12.5
8%
Retu
rn
0
5
10
15
20
25
30
35
1 quarter YTD 1 year 3 years Since Inc.*
Fund**MSCI EAFE SMALL CAPLipper Intl Sm Cap Fd IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
100
120
140
160
180
200
220
240
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
Fund**MSCI EAFE SMALL CAPLipper Intl Sm Cap Fd IX
Francis Investment Counsel LLC Review:Summary & Opinion Your international small-cap fund, the Hartford International Small Company Y Fund, gained 1.00% in the first quarter and outpaced its benchmarks. Overall, this Fund has generated strong long-term results with qualitative factors that remain in place today: a resource rich organization, a skilled and long-tenured portfolio management team, and a sensible and unique investment approach. The Fund is subadvised by industry titan Wellington Management, which has more than $1T in assets under management and 500+ research analysts/portfolio managers on staff. Lead portfolio manager, Simon Thomas, has more than 20 years of investment experience and has been managing the Fund along with co-PM Daniel Maguire since 2006. Aided by a couple dedicated analysts, the managers rely heavily on proprietary research to identify attractively valued, high-quality businesses that are likely to post above-consensus earnings results. One of the Fund's newest holdings is France-based Soitec (added Feb. 2018), which manufactures integrated circuits and electronic components. The company has a relatively new CEO that is driving efficiencies in the business, and several large foundries have started using Soitec's wafer technology at the request of customers (an explicit shift in sentiment). Together, the team expects these factors to drive above-consensus earnings growth. In terms of investment philosophy, the team's valuation approach is really what drives portfolio construction. They call it “geographic arbitrage,” and it’s based on the idea that companies with similar characteristics operating in similar industries should trade at similar valuations, regardless of geography. Thus, when it comes to idea generation, the team will apply an industry-specific valuation framework to companies across the globe. The finished product is a broadly diversified portfolio with 100-150 holdings and a slight growth bias (benchmark is also growth-leaning). Emerging market exposure can go as high as 15% but has never been higher than 8% and currently sits at 2.8%. Turning to performance, relative results cooled off between 2014 and 2016 but have since stabilized. On the Watch List, the Fund passes 2 of the 4 quantitative criteria. All things considered, we find this to be a solid option for exposure to international small caps.Management & ExpensesSimon Thomas (since 2006), and Daniel Maguire (since 2006) of Wellington Management (Boston, MA). At 1.00%, the Fund's expense ratio is roughly in-line with the average (1.01%) for international small cap products used by Francis Investment Counsel.Quarterly Performance CommentaryOutperformance was driven primarily by favorable positioning in the Health Care sector, where shareholders benefited from an overweight (13% vs. 7%) and good stock selection results (+13% vs. +7%), aided by a position in a Chinese biopharmaceutical company called BeiGene (+72%). On the other side of the equation, with 36% of the Fund invested in Japan, lagging stock selection results (-0.9% vs. +2.2%) were a notable drag on relative performance. Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results. **Represents spliced performance of the Columbia Acorn International Z Fund (8/12-7/14) and Columbia Acorn International Y Fund (8/14-present).
Fund change from Columbia Acorn International Z to Columbia Acorn International Y on 8/15/14 reducing the expense ratio from 0.93% to 0.87%, a savings of 6%.
Fund change from Columbia Acorn International Y to Hartford International Small Company Y on 6/1/17. Since 6/1/17, the Fund has returned 13.44% versus 14.45% for the MSCI EAFE SMALL CAP and 13.53% for the Lipper Intl Sm Cap Fd IX.
Mar. 31, 2018 Hartford International Small Company Y Fund Type: International Small
73
74
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 42% 39% 46%
PASS PASS PASS 3 of 3 PASS3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk111.2%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
FAIL110.3% 110.2%
2 of 3 better than median (<100%) needed to pass FAIL FAIL 0 of 3 FAIL
Mar 2014Returns vs. Markets3.1%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-0.6% -5.3% -2.0% -1.2%
FAIL3 of 5 outperforming the passive target needed to pass PASS FAIL FAIL FAIL 1 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 90.23% PASS
Investment Firm: Hartford Funds Management Company, LLC
PASS
Subadvised by Wellington ManagementCommentary: Closed to new investors on 4/29/16.
Investment Personnel: Simon Thomas, since 2006 PASSDaniel Maguire, since 2006
BenchmarksPeer Group: Lipper International Small/Mid-Cap CorePassive Target: MSCI EAFE SMALL CAP
Mar. 31, 2018 Hartford International Small Company YFund Type: International Small
75
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
3.03
%
3.03
%
25.5
2%
9.38
%
7.47
%
1.47
%
1.47
%
25.3
7%
9.21
%
6.48
%
2.06
%
2.06
%
23.0
1%
9.48
%
6.59
%
3.03
%
3.03
%
25.5
2%
9.38
%
7.47
%
1.47
%
1.47
%
25.3
7%
9.21
%
6.48
%
2.06
%
2.06
%
23.0
1%
9.48
%
6.59
%
3.03
%
3.03
%
25.5
2%
9.38
%
7.47
%
1.47
%
1.47
%
25.3
7%
9.21
%
6.48
%
2.06
%
2.06
%
23.0
1%
9.48
%
6.59
%
Retu
rn
0
5
10
15
20
25
30
35
1 quarter YTD 1 year 3 years Since Inc.*
FundMSCI EM (EMERGING MARKETS)Lipper Emerg Mkt Fd IX
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
80
90
100
110
120
130
140
150
160
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
FundMSCI EM (EMERGING MARKETS)Lipper Emerg Mkt Fd IX
Francis Investment Counsel LLC Review:Summary & OpinionYour emerging market equity fund, the Oppenheimer Developing Markets Fund, gained 3.03% in the first quarter and outperformed its benchmarks. Lead portfolio manager Justin Leverenz has a big boat to steer with this Fund’s nearly $41B in assets. Managing such a large emerging market equity assignment isn’t easy, but Leverenz has been able to turn in a competitive track record in the 10+ years he’s been at the wheel. Since May 2007 when he took over, the Fund has gained 6.63% versus the passive benchmark’s return of 4.51%, a result which easily ranks in the top decile (3%) of its Lipper peers. With less flexibility due to a larger asset base, Leverenz has to lean on stock picking and a buy and hold approach (turnover at 33%) in order to constructively position the Fund’s assets. Using a benchmark agnostic strategy and preferring companies benefiting from secular growth, Leverenz selects companies tied to themes such as mass affluence, technology, restructuring, and aging. Research and company visits drive this Fund’s capital allocation decisions. With respect to research, the team is devoted to far-reaching international travel as well as staying in tune with developments in behavioral finance both of which play nicely into refining his contrarian thinking. In an average year, Leverenz’s itinerary takes him to China four times, two to three times to India, two times to Brazil, and numerous other stops in between. In a recent update to shareholders, Leverenz once again reiterated his bullishness on China and maintains, that after numerous meetings with business and governmental officials, many investors continue to misinterpret China’s macroeconomic growth profile. Similarly, the Fund’s current overweight to Russia (8% vs. 3%) has been formulated over years of research giving Leverenz confidence to apportion capital there for the long term when many others shy away. Turning to relative performance, the Fund’s rolling 3-year peer group ranking has recently improved into the second quartile and the offering passes 6 out of 7 Watch List metrics. While the Fund is soft-closed, the growth in assets will continue to be one of the areas of monitoring as it may hinder the ability of the manager to be nimble when needed. That said, close to 90% of the Fund’s assets are classified as large- or mega-caps so Leverenz should have ample room to maneuver for the time being. Management & ExpensesJustin Leverenz (since 2007). The Fund’s expense ratio is 0.86%, which is competitive compared to an average of 1.09% for emerging market equity funds utilized by Francis Investment Counsel clients.Performance Commentary Strong stock selection results drove outperformance during the first quarter, while sector allocation detracted slightly. In particular, stock selection results were strong within the Health Care (+15.3% vs. +7.1%) and Information Technology (+4.9% vs. +1.9%) sectors, as well as countries India (+0.4% vs. -6.9%) and South Korea (+5.8% vs. -0.9%). On an individual basis, Taiwan Semiconductor Manufacturing (+9.4%), Novatek PJSC (+14.0%), and Alibaba Group (+6.4%) were the largest contributorsReturns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Mar. 31, 2018 Oppenheimer Developing Markets I Fund Type: Emerging Market Equity
76
77
Created with Zephyr StyleADVISOR. Manager returns supplied by: Lipper, Morningstar, Inc.
FRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE, STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Watch List CriteriaPeer Group Ranking Sep 2017 Dec 2017 Mar 2018 Grade
2 of 3 better than median (<50%) needed to passTrailing 36-Months vs. Peer Group: 65% 60% 38%
FAIL FAIL PASS 1 of 3 FAIL3 of 3 better than median (<75%) needed to pass PASS PASS PASS 3 of 3 PASS
Downside Risk92.3%
Sep 2017 Dec 2017 Mar 2018Trailing 36-Months vs. Passive Target:
PASS86.4% 84.0%
2 of 3 better than median (<100%) needed to pass PASS PASS 3 of 3 PASS
Mar 2014Returns vs. Markets7.9%
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Trailing 12-Months vs. Passive Target:FAIL-4.7% 1.8% -2.0% 0.2%
PASS3 of 5 outperforming the passive target needed to pass PASS PASS FAIL PASS 3 of 5
Qualitative IssuesInvestment Style: Trailing 3-Year R-Squared: 91.34% PASS
Investment Firm: OFI Global Asset Management, Inc. PASSCommentary: Fund closed to new investors on 4/12/13.
Investment Personnel: Justin Leverenz, since 2007 PASS
BenchmarksPeer Group: Lipper Emerging Markets FundsPassive Target: MSCI EM (EMERGING MARKETS)
Mar. 31, 2018 Oppenheimer Developing Markets IFund Type: Emerging Market Equity
78
Created with Zephyr StyleADVISOR.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Restates Performance Fund Performance:Manager vs Benchmark: ReturnOctober 2013 - March 2018 (not annualized if less than 1 year)
5.71
%
5.71
%
21.6
4%
0.96
%
1.05
%5.15
%
5.15
%
27.5
9%
8.31
%
7.92
%
5.71
%
5.71
%
21.6
4%
0.96
%
1.05
%5.15
%
5.15
%
27.5
9%
8.31
%
7.92
%
5.71
%
5.71
%
21.6
4%
0.96
%
1.05
%5.15
%
5.15
%
27.5
9%
8.31
%
7.92
%
Retu
rn
0
5
10
15
20
25
30
35
40
1 quarter YTD 1 year 3 years Since Inc.*
Fund**MSCI Frontier Markets
Manager Performance: "Mountain" ChartOctober 2013 - March 2018 (Single Computation)
80
90
100
110
120
130
140
150
Sep 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Mar 2018
Fund**MSCI Frontier Markets
Francis Investment Counsel LLC Review:Summary & Opinion Your frontier markets fund, the Morgan Stanley Instl Frontier Markets Fund, gained 5.71% in the first quarter and outperformed its benchmark. The relative outperformance for Q1 2018 is welcome news especially following the Fund’s disappointing 2017 campaign. Yet, this quarter the Fund threw another curve ball at shareholders by announcing a restatement to Fund performance due to over-witholding of foreign taxes. As a result, the Fund’s 2017 performance - previously reported at 18.98% - increased to 20.82% following the correction. Morgan Stanley informed record keepers in mid-March about the performance restatement and provided the necessary adjustments required to make shareholders whole. Morgan Stanley noted they reserved too much for taxes related to Argentine securities held by the Fund. In our view, Morgan Stanley’s management handled the matter as expeditiously as possible and we are satisfied this matter is closed. No further action is needed by the Committee. We continue to believe this team’s country allocation model remains one of its competitive advantages. Management is also very competent, something we witnessed again during a meeting with lead portfolio manager Tim Drinkall in October 2017, and the Fund’s return profile over the long term is competitive gaining 2.71% vs. 0.61% versus the MSCI Frontier Markets Index (September 2008 to March 2018). That said, with the strategy soft closed at $1.5B in assets, the challenge for management is to allocate capital in a manner which continues to generate alpha in an asset class with meaningful liquidity constraints.
Management & Expenses Tim Drinkall (since 2008) and Pierre Horvilleur (since 2015). The Fund’s expense ratio is 1.69% which is lower than our institutional average utilized by our clients in Frontier Equity markets at 1.77%.
Performance Commentary At the country allocation level, having zero exposure to country Mauritius (0.0% vs. 2.4%) added value while on the stock selection side, strong results within the Industrials (+21.7% vs. +4.1%) and Financials (+7.4% vs. +6.5%) sectors aided relative performance. Notable individual performers included VietJet Aviation (+52.7%), National Bank of Kuwait (+13.5%), and Joint Stock Commercial Bank for Foreign Trade of Vietnam (+29.3%).
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are for 54 months beginning 10/1/13 (actual inception date of 9/17/13). Fund performance results are annualized for periods greater than one year and are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. Past performance is no guarantee of future results.**Represents spliced performance of the Wasatch Frontier Emerging Small Countries Inv Fund (10/13-5/17) and the Morgan Stanley Inst Frontier Markets I Fund (6/17-present).
Fund change from Wasatch Frontier Emerg Sm Countrs Inv to Morgan Stanley Inst Frontier Mkts I on 6/1/17. Since 6/1/17, the Fund has returned 12.63% versus for 20.84%the MSCI FM (FRONTIER MARKETS).
Mar. 31, 2018 Morgan Stanley Inst Frontier Mkts IFund Type: Frontier Market
79
80
F R A N C I S I N V E S T M E N T C O U N S E L L L C 1 9 4 3 5 W C A P I T O L D R . S T E . 2 0 1 B R O O K F I E L D , W I 5 3 0 4 5 8 6 6 - 2 3 2 - 6 4 5 7
Mar. 31, 2018 Morgan Stanley Inst Frontier Mkts I Fund Type: Frontier Markets
Peer Group Comparison
Average Annualized Returns (3/31/18)
1Q18* 1-Year 2-Year 3-Year 4-Year 5-Year Morgan Stanley Frontier Emerging Mkts I 5.71% 19.15% 16.43% 6.25% 3.35% 8.04%Harding Loevner Frontier Emerg Mkts Inst 5.78% 25.18% 16.10% 4.78% 2.20% 4.46%HSBC Frontier Markets I 3.74% 17.74% 17.08% 7.92% 4.78% 8.01%T. Rowe Price Instl Frontier Markets Eq. 5.80% 28.60% 25.01% 11.56% N/A N/ATempleton Frontier Markets R6 1.05% 14.64% 15.88% 3.14% -3.09% -0.62%Wasatch Frontier Emerg Sm Countrs Instl 1.70% 19.12% 6.02% 0.27% -1.01% 1.29%MSCI FM (FRONTIER MARKETS) 5.15% 27.59% 20.26% 8.31% 5.30% 9.06%
*Returns for periods of less than one year have not been annualized.
Sharpe Ratios (3/31/18) 1-Year 2-Year 3-Year 4-Year 5-Year
Morgan Stanley Frontier Emerging Mkts I 2.42 2.15 0.55 0.29 0.72Harding Loevner Frontier Emerg Mkts Inst 2.80 1.97 0.37 0.17 0.38HSBC Frontier Markets I 2.12 2.11 0.60 0.37 0.66T. Rowe Price Instl Frontier Markets Eq. 4.05 4.05 1.11 N/A N/ATempleton Frontier Markets R6 0.93 1.30 0.18 -0.24 -0.07Wasatch Frontier Emerg Sm Countrs Instl 2.40 0.67 -0.03 -0.18 0.11MSCI FM (FRONTIER MARKETS) 3.99 2.41 0.72 0.43 0.77
Information Ratios (3/31/18)
vs. MSCI Frontier Markets Index 1-Year 2-Year 3-Year 4-Year 5-Year
Morgan Stanley Frontier Emerging Mkts I -1.93 -0.77 -0.47 -0.38 -0.21Harding Loevner Frontier Emerg Mkts Inst -0.69 -0.73 -0.60 -0.54 -0.86HSBC Frontier Markets I -2.12 -0.47 -0.06 -0.08 -0.18T. Rowe Price Instl Frontier Markets Eq. 0.22 0.85 0.66 N/A N/ATempleton Frontier Markets R6 -0.87 -0.39 -0.51 -0.89 -1.10Wasatch Frontier Emerg Sm Countrs Instl -1.54 -2.12 -1.19 -0.88 -1.15
Calendar Year Returns &
Batting Average vs. MSCI Frontier Markets Index 2017 2016 2015 2014 2013 2012 2011 Batting
AverageMorgan Stanley Frontier EM I 20.82% 3.83% -10.58% 2.66% 32.95% 22.27% -23.37% 4 of 7Harding Loevner Frontier EM Inst 25.09% 2.16% -19.10% 6.22% 17.03% 19.88% -21.03% 1 of 7HSBC Frontier Markets I 21.60% 8.96% -10.46% 5.10% 26.08% 24.38% N/A 3 of 6T. Rowe Price Instl Frontier Mkts 31.69% 10.10% -12.83% N/A N/A N/A N/A 2 of 3Templeton Frontier Markets R6 23.25% 5.54% -21.63% -14.86% 17.28% 25.38% -18.65% 2 of 7Wasatch Frontier Emerg Sm Cntrs 21.49% -11.37% -12.10% 1.69% 18.00% N/A N/A 1 of 5MSCI Frontier Markets 32.32% 3.16% -14.07% 7.21% 26.32% 9.25% -18.38%
81
Created with Zephyr StyleADVISOR. Manager returns supplied by: Morningstar, Inc.
TIDI PRODUCTS, LLCFRANCIS INVESTMENT COUNSEL LLC • 19435 W. CAPITOL DRIVE STE 201 • BROOKFIELD, WI • 53045 • 866-232-6457
Fund Performance:Manager vs Benchmark: ReturnAugust 2012 - March 2018 (not annualized if less than 1 year)
3.30
%
3.30
%
17.5
1%
1.38
%
-4.5
9%
2.76
%
2.76
%
14.4
0%
-0.8
4%
-6.7
5%
3.30
%
3.30
%
17.5
1%
1.38
%
-4.5
9%
2.76
%
2.76
%
14.4
0%
-0.8
4%
-6.7
5%
3.30
%
3.30
%
17.5
1%
1.38
%
-4.5
9%
2.76
%
2.76
%
14.4
0%
-0.8
4%
-6.7
5%
Retu
rn
-30
-20
-10
0
10
20
30
40
1 quarter YTD 1 year 3 years Since Inc.*
FundCredit Suisse Commodity Benchmark
Manager Performance: "Mountain" ChartAugust 2012 - March 2018 (Single Computation)
40
50
60
70
80
90
100
110
120
Jul 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Mar 2018
FundCredit Suisse Commodity Benchmark
Francis Investment Counsel LLC Review:Summary & Opinion Your “hard asset” fund, the PIMCO CommoditiesPlus Fund, returned 3.30% in the first quarter and outperformed its primary benchmark. The objective of this Fund is to provide investors with exposure to the changes in commodities prices by investing in futures contracts and swap agreements that mimic the Credit Suisse Commodity Benchmark. Co-portfolio managers Nic Johnson and Greg Sharenow also employ numerous trading strategies in an attempt to add value. Accordingly, this Fund is an “enhanced index” strategy, and its approach has been quite successful as evidenced by the Fund outperforming over the last 3-years. Over the last 18-months in particular, management has made hay with “commodity alpha strategies” within Agriculture (short soybeans relative to corn) and Energy (long European refining margins), short duration positioning within the collateral portfolio as well as tactical allocations to MBS securities, corporate credit and emerging market debt. As enjoyable as the Fund’s recent success is for shareholders, it’s essential to note that management is taking on more risk as the tactical bets are having an ever larger impact on the Fund’s tracking error versus its benchmark. We’re willing to give PIMCO some leeway in deploying more of their active management toolkit as we have known this team for many years and seen firsthand during our site visits how the group develops its models. In our opinion, the team’s practice for finding opportunities and managing risk in a comprehensive manner has generated compelling long term relative results. All things considered, a favorable opinion on this product is warranted.
Management & Expenses Nic Johnson (since 2010) and Greg Sharenow (since 2015). The Fund’s expense ratio is 0.75%.
Performance CommentaryCommodity markets moved higher in the first quarter of the year with constituents in Energy (+5.5%) and Agriculture (+4.3%) leading the way. Individually, ICE Cocoa (+35.0%), HRW Wheat (+6.9%), and WTI Crude (+8.8%) were some of the Fund’s best performing contracts. In contrast, Livestock contracts were the weakest performer, as individual contracts Live Cattle (-9.5%), Feeder Cattle (-4.7%), and Lean Hogs (-10.8%) moved lower.
Returns are time-weighted rates of return for period ended 3/31/2018.*Since Inc. results are average annualized time-weighted rates of return for 68 months beginning 8/1/12 (actual inception 8/15/12). Fund performance results are net of investment management fees. Trust and/or administration fees have not been deducted. Actual performance affected by fees and money flows in and out of the Fund and can vary significantly from published Fund results. The above performance was obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Past performance is no guarantee of future results.
Mar. 31, 2018 PIMCO CommoditiesPLUS Strat Instl Fund Type: Hard Asset
82
F R A N C I S I N V E S T M E N T C O U N S E L L L C 1 9 4 3 5 W C A P I T O L D R . S T E . 2 0 1 B R O O K F I E L D , W I 5 3 0 4 5 8 6 6 - 2 3 2 - 6 4 5 7
Mar. 31, 2018 PIMCO CommoditiesPLUS Strategy I Fund Type: Hard Asset
Calendar Year Returns
Fund Analytics Benchmark Target Commodity Weightings Fund Index
Forward P/E Ratio N/A N/AMedian Market Cap (Avg.) N/A N/ANumber of Holdings 448* 34Beta (vs. S&P 500 Index) 0.49 0.393-year Sharpe Ratio 0.05 -0.08Total Net Assets (Millions) $3,488 N/A3-year Morningstar Rank┼ 3% N/AExpense Ratio┼ 0.74%┼┼ 1.26%┼┼┼
Effective Duration 0.57 yrs N/A*as of 12/31/17
Benchmark Sector Weightings
┼Expressed as a percentage rank of all the funds in the Morningstar category Commodities – Broad Basket. The lower the percentage, the higher the ranking. Expense Ratio of Index is average of all mutual funds in Morningstar category Commodities – Broad Basket. ┼┼Expense ratio reflects I shares net operating expense ratio. ┼┼┼ Expense ratio of Index is average of all mutual funds in the corresponding Morningstar category. The above summary/prices/quotes/statistics have been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. Past performance is no guarantee of future results.
Calendar Year ReturnAs of March 2018
Retu
rn
-30%
-20%
-10%
0%
10%
20%
YTD 2017 2016 2015 2014 2013 2012
PIMCO CommoditiesPLUS Strategy InstlCredit Suisse Commodity Benchmark
Energy, 54.38%
Ind. Metals, 11.94%
Prec. Metals, 8.36%
Agriculture, 21.25%
Livestock, 4.08%
83
PIMCO CommoditiesPLUS® Strategy Fund Derivative Summary Report FOR SHAREHOLDER SERVICES CALL 888.87.PIMCO 31 March 2018
DerivativesDuration
(Years)
% of
Mkt ValueCharacteristics of Derivatives Control Measures
Bond-Equivalent Derivatives:
Government Futures 0.1 2.5
U.S. 0.3 4.7
Non - U.S. -0.2 -2.2
Other Futures: 0.0 0.0 Includes municipal, mortgage-backed and interest rate swap futures. See Government Futures
Interest Rate Swaps -0.8 -13.3
Receive 0.2 3.9
Pay -1.0 -17.2
Credit Default Swaps 0.0 0.2
Written 0.0 0.2
Purchased 0.0 0.0
Option Premiums -0.1 0.0
Written 0.0 0.0
Purchased -0.1 0.0
Mortgage Derivatives 0.0 0.0
Used to manage portfolio duration and/or enhance yield. Includes securities determined by PIMCO to
have potentially less stable duration characteristics, such as Interest Only strips (IOs), Principal Only
strips (POs), Support Class CMOs and Inverse Floaters. Value will fluctuate as prepayment speeds
respond to rising and falling interest rates.
Bond exposure included in portfolio duration, convexity, and
prepayment risk measures. Use IOs' and POs' in moderation and
in an overall portfolio context.
Total Return Swaps 0.0 0.0
Fixed Income 0.0 0.0
Total Bond-Equiv. Derivatives: -0.8 -10.7
Money Market Derivatives: 0.0 0.0
Futures 0.0 0.0
Interest Rate Swaps 0.0 0.0
Commodity Exposure N/A 120.1
Equity Derivatives N/A 0.0
Futures N/A 0.0
Total Return Swaps N/A 0.0
Used to adjust interest rate exposures and replicate government bond positions. May offer
opportunity to outperform due to active management of the liquid portfolio backing the exposure.
Bond-equivalent exposure included in portfolio duration. Back
net long futures positions with high grade, liquid debt securities.
Includes Swaps with duration greater than 1 year. Used to adjust interest rate and yield curve
exposures and substitute for physical securities. Long swap positions ("receive fixed") increase
exposure to long-term interest rates; short positions ("pay fixed") decrease exposure.
Bond-equivalent exposure included in portfolio duration. Back
net long swaps positions with high grade, liquid debt securities.
Credit default swaps are used to manage credit exposure without buying or selling securities outright.
Written CDS increase credit exposure ("selling protection"), obligating the portfolio to buy bonds from
counterparties in the event of a default. Purchased CDS decrease exposure ("buying protection"),
providing the right to "put" bonds to the counterparty in the event of a default.
Bond-equivalent exposure included in portfolio credit risk
measures. Back net long exposures with high grade, liquid debt
securities. Continually monitor underlying credit exposure.
Purchased options are used to manage interest rate and volatility exposures. Written options
generate income in expected interest rate scenarios and may generate capital losses if unexpected
interest rate environments are realized. Both written and purchased options will become worthless at
expiration if the underlying instrument does not reach the strike price of the option.
Bond-equivalent exposure included in portfolio duration
(weighted by volatility relative to underlying instrument). In-the-
money portion of written options covered by high grade, liquid
debt securities.
Used to manage exposures at the front end of the yield curve. Includes Swaps with duration of 1 year
or less, and Eurodollar, Euribor and other futures based on short-term interest rates. The notional
amount of money market futures is divided by the term of the underlying interest rate to properly
reflect the exposure. Eurodollar futures, based on an annualized 3-month interest rate, are divided by
4; Fed funds futures, based on an annualized 1-month rate, are divided by 12.
Bond-equivalent exposure included in portfolio duration. Money
market futures are based on short-term interest rates and don't
require delivery of an asset at expiration, therefore do not
require cash backing.
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Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus and summary prospectus, if available, which may be obtained by
contacting your financial advisor or PIMCO representative or by visiting www.pimco.com/investments. Please read them carefully before you invest or send money.
A word about risk:
All investments contain risk and may lose value.
Investing in the bond market is subject to certain risks, including market, interest rate, issuer, credit and inflation risk; investments may be worth more or less than the original cost when redeemed.
Investing in foreign-denominated and/or -domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets.
Mortgage- and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some
form of government or private guarantee, there is no assurance that private guarantors will meet their obligations.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark or registered trademark of Allianz Asset Management of America L.P. and Pacific Investment
Management Company LLC, respectively, in the United States and throughout the world. ©2017, PIMCO.
PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY, 10019, is a company of PIMCO.
Derivatives may involve certain costs and risks, such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested.
Please refer to the Fund’s prospectus for a complete overview of the primary risks associated with the Fund.
The value of most bond strategies and fixed income securities are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices
generally fall as interest rates rise.
Additional risk factors can be found in the prospectus.
Holdings are subject to change without notice and may not be representative of current or future allocations.
This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.
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BUSINESS
Don’t miss this moment to bolster your savings 401(k) ADVISER MICHAEL J. FRANCIS
Not since the Reagan era has there been an opportunity like this one. The chance for so many to save more money or pay down more debt without reducing current spending.
“By now, most people should have seen an increase in their take home pay. The new tax law decreased Federal income tax rates and as a result lowered the IRS’s tax withholding tables. Depending on the amount and frequency of the paycheck, the average American worker has seen an increase in their take home pay by tens if not hundreds of dollars each check,” according to Bob Freese, tax manager at Schenck S.C.
Here are some ideas for how to best take advantage of this opportunity.
Increase your 401(k) contribution to maximize the match
Your employer’s retirement plan is a powerful tool to help you build wealth for retirement. It’s convenient, tax-advantaged and the best deal around if you happen to work for a generous employer that will match your contributions. Be sure to collect all of this “free money” from your employer. Not doing so is like walking past $20 bills on the sidewalk. If you’re unsure whether your employer offers matching contributions, talk to your human resources department.
Pay down expensive consumer debt
After you’ve collected all those $20s, the next best thing you can do is use this extra take home pay to reduce credit card debt. This debt is typically the most expensive kind you have and needs to be eliminated as quickly as possible. Lowering your credit card debt by $2,000 can save you nearly $600 a year in interest payments.
Set up an emergency fund
When you have the first two goals covered, setting money aside for an emergency is a really good idea. You never know when an unexpected expense is going to require immediate liquidity. Open a money market or high interest savings account and start pumping a few bucks each paycheck toward it. You’ll be surprised how quickly it builds and how good it feels to know you’ve got some financial backup. While three months of typical expenses is a good initial goal, six months is a better long-term goal.
Longer-term planning
To reach retirement age financially prepared to stop working, you need to target a minimum savings rate of 10% of your income. If you’re getting a later start, better to target 15%. You can also consider using your tax savings to switch your future contributions from traditional pre-tax to Roth post-tax. This move has the same effect of increasing your contribution and offers a long list of tax and estate planning advantages. If you have your retirement savings under control, consider making an extra car or mortgage payment. This maneuver can save you a bunch of interest in the future.
Finally, the recent change in the tax law is a good reminder that you should periodically check to ensure you’re not having too much or too little withheld from your paycheck. The IRS has updated its tax withholding calculator, which can be found by clicking on “withholding calculator” on www.IRS.gov. With the help of a recent pay stub, this calculator can help make sure you’re on the right track for 2018.
Have the discipline to capture this additional take home pay and put it to its highest use. Otherwise, this recent “windfall” is likely to disappear into your everyday discretionary spending and be consumed in a far less productive fashion.
Act today to capitalize on this opportunity.
The material in this column is provided for informational purposes only. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Francis Investment Counsel does not offer personal tax or legal advice. Michael J. Francis is president and senior investment consultant of Francis Investment Counsel LLC, a registered investment adviser based in Brookfield. He can be reached at [email protected]
Milwaukee Journal Sentinel
JSOnline.com Sunday,
March 18, 2018
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Plan Asset Allocation Tidi Products, LLC
2.3%
11.9%
8.2%
27.1%
39.2%
7.6%
3.7%
2.2%
9.9%
9.6%
23.2%
45.9%
6.8%
2.4%
1.7%
8.7%
8.5%
23.8%
48.6%
6.3%2.5%
1.7%
8.4%
8.6%
22.6%
50.1%
6.5%2.1%
2.1%6.9%
6.1%
17.8%
58.1%
5.6%3.3%
1.5%5.8%
4.6%
13.5%
67.5%
3.5%3.6%
1.4%5.6%
4.6%
14.4%
68.2%
3.0%2.6%
1.4%5.6%
4.5%
14.1%
67.8%
2.9%3.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec '12 Dec '13 Dec '14 Dec '15 Dec '16 Sep '17 Dec '17 Mar '18
Specialty Fund International FundsSmall-Cap Funds Mid-Cap FundsLarge-Cap Funds Target Retirement FundsFixed Income Funds Stable Value Fund
Dec ‘12 Dec ‘13 Dec ‘14 Dec ‘15 Dec ‘16 Sep ‘17 Dec ‘17 Mar ‘18
$12,667,815 $15,044,007 $16,695,206 $16,341,246 $22,810,558 $33,965,788 $36,366,928 $37,132,293
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Plan Asset Allocation Tidi Products, LLC
Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Sep-17 Dec-17 Mar-18 Stable Value Fund 3.7% 2.4% 2.5% 2.1% 3.3% 3.6% 2.6% 3.7% $1,373,586
Morley Stable Value 1.1% 2.4% 2.5% 2.1% 3.3% 3.6% 2.6% 3.7% $1,373,586Fidelity Managed Income 2.6% - - - - - - - -
Fixed Income Funds 7.6% 6.8% 6.3% 6.5% 5.6% 3.5% 3.0% 2.9% $1,061,198
Bond Fund Vanguard Total Bond Market Index 4.7% 3.8% 3.4% 3.6% 3.2% 1.7% 1.5% 1.5% $549,906Inflation Protected Bond DFA Inflation Protected Securities 1.7% 1.6% 1.4% 1.4% 1.3% 0.9% 0.7% 0.6% $229,003Emerging Market Debt MFS Emerging Market Debt 1.2% 1.4% 1.4% 1.5% 1.2% 0.9% 0.7% 0.8% $282,290
Target Retirement Date Funds 39.2% 45.9% 48.6% 50.1% 58.1% 67.5% 68.2% 67.8% $25,180,417
T. Rowe Price Retirement Income 1.0% 1.1% 1.5% 1.2% 1.1% 0.7% 0.7% 0.6% $239,871T. Rowe Price Retirement 2005 0.0% 0.0% 0.0% 0.0% - - - - -T. Rowe Price Retirement 2010 1.5% 1.5% 1.1% 1.1% 1.0% 0.8% 0.8% 0.8% $291,870T. Rowe Price Retirement 2015 4.7% 4.8% 4.2% 4.0% 6.2% 4.3% 4.0% 3.7% $1,379,791T. Rowe Price Retirement 2020 11.9% 12.8% 12.8% 12.7% 9.7% 10.5% 9.7% 9.3% $3,441,325T. Rowe Price Retirement 2025 6.0% 5.7% 6.8% 7.1% 7.6% 10.7% 11.6% 10.5% $3,892,495T. Rowe Price Retirement 2030 2.2% 3.3% 4.1% 3.6% 5.4% 9.9% 10.3% 11.5% $4,272,547T. Rowe Price Retirement 2035 4.3% 5.3% 6.0% 6.6% 8.3% 10.1% 10.8% 10.9% $4,042,036T. Rowe Price Retirement 2040 5.3% 8.6% 8.4% 9.3% 10.9% 10.9% 10.8% 10.9% $4,037,000T. Rowe Price Retirement 2045 1.8% 2.0% 2.6% 3.0% 4.0% 4.5% 4.3% 4.4% $1,634,787T. Rowe Price Retirement 2050 0.4% 0.6% 0.8% 1.0% 1.8% 2.6% 2.6% 2.7% $990,111T. Rowe Price Retirement 2055 0.1% 0.2% 0.4% 0.3% 1.8% 2.0% 2.1% 2.1% $761,286T. Rowe Price Retirement 2060 - - 0.0% 0.1% 0.4% 0.5% 0.5% 0.5% $197,297
Large-Cap Funds 27.1% 23.2% 23.8% 22.6% 17.8% 13.5% 14.4% 14.1% $5,251,219 Large-Cap Value Fund FMI Large Cap 4.8% 4.6% 4.3% 3.7% 3.5% 2.2% 2.3% 2.3% $839,318Large-Cap Blend Fund Vanguard Total Stock Market Index 7.7% 7.0% 8.2% 7.5% 6.7% 4.9% 5.2% 4.9% $1,837,080Large-Cap Growth Fund Fidelity Contrafund 14.5% 11.7% 11.3% 11.4% 7.5% 6.4% 7.0% 6.9% $2,574,821
Small-Cap Funds 8.2% 9.6% 8.5% 8.6% 6.1% 4.6% 4.6% 4.5% $1,685,313
Small-Cap Value Fund DFA US Targeted Value 2.7% 3.6% 3.1% 2.9% 2.9% 2.2% 2.2% 2.0% $747,434Small-Cap Growth Fund Loomis Sayles Small-Cap Growth 5.5% 6.0% 5.3% 5.7% 3.2% 2.4% 2.5% 2.5% $937,880
International Funds 11.9% 9.9% 8.7% 8.4% 6.9% 5.8% 5.6% 5.6% $2,067,642
Developed International Harbor International 8.5% 5.7% 4.7% 4.5% 3.6% 2.8% 2.7% 2.7% $986,357Hartford International Small Company - - - - - 0.9% 0.9% 0.9% $316,841Columbia Acorn International 1.3% 1.4% 1.3% 1.4% 1.1% - - - -Emerging Markets Oppenheimer Developing Markets 2.1% 2.3% 2.1% 2.0% 1.9% 1.8% 1.7% 1.7% $624,839Frontier Markets Morgan Stanley Instl Frontier Markets - - - - - 0.4% 0.3% 0.4% $139,606Wasatch Frontier Emerging Small Countries - 0.4% 0.5% 0.4% 0.4% - - - -
Specialty Fund 2.3% 2.2% 1.7% 1.7% 2.1% 1.5% 1.4% 1.4% $512,918
PIMCO CommoditiesPLUS 2.3% 2.2% 1.7% 1.7% 2.1% 1.5% 1.4% 1.4% $512,918
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The information contained within is proprietary and confidential, therefore, we respectfully request that it not be shared with anyone outside the Investment Committee.
The summary/prices/quotes/statistics contained herein have been obtained from sources believed reliable but are not necessarily complete and cannot be guaranteed. Annual, cumulative and annualized total returns are calculated assuming reinvestment of dividends and income plus capital appreciation. Past performance results are not necessarily indicative of future results. Performance presented herein represents that of the mutual fund itself and is, in most instances, independent of the actual return earned by the Plan or its participants, unless otherwise noted. Timing of cash flows into and out of a fund can significantly impact the actual performance experienced by the Plan and its participants. Returns shown are net of investment management fees but before administrative expenses. As expenses are deducted quarterly, the compounding effect will be to increase the impact of the expenses by an amount directly related to the gross account performance. For example, on an account with a 2% fee, if the gross performance is 20%, the compounding effect of the fees will result in a net performance of approximately 17.6%. The cost/dividend/return information is provided to analyze performance, and should not be used for tax purposes. Francis Investment Counsel does not provide tax or legal advice. Please consult your tax and/or legal advisor for such guidance.
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