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“How to” use this presentation before and during the client review meeting. This presentation is designed to be used as a personalized performance review with your clients. Step 1: Insert your company logo on Cover Slide.

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how to use this presentation before and during the client review meeting
“How to” use this presentation before and during the client review meeting

This presentation is designed to be used as a personalized performance review

with your clients.

Step 1: Insert your company logo on Cover Slide.

Step 2: Insert client name and meeting date on cover slide where indicated.

Step 3: Make sure that you have the client statement available to review.

Step 4: Insert performance slide from appendix within this presentation.

Step 5: Review client objectives from prior quarter.

Step 6: In Appendix, delete any slides not applicable to the client review.

Step 7: Conclude meeting by recapping and review any action steps.

Step 8: Delete this slide before printing.

agenda
Agenda
  • Follow-up From Last Meeting and Reconfirm Goals
  • Global Market Review and Economic Outlook
  • Quarterly Portfolio Review
  • 2012 and Beyond Goal Setting
  • Appendix
    • Performance
review and monitor your goals
Review and Monitor Your Goals

.

Identify your goals and resources

Monitor investment strategies and progress

Identify the appropriate investment

Implement the Goals-Based investment solution

Evaluate and confirm the proposed investment solution

reconnect from last meeting
Reconnect from Last Meeting

[Text in grey indicates example]

global market review
Global Market Review
  • Second Quarter 2012
  • A deepening European debt crisis, worldwide economic softening and domestic fiscal uncertainty weighed on investors.
  • While central banks around the globe are attempting to combat slowing economies, markets are experiencing diminishing marginal benefits from their efforts.
  • Equity markets gave back some of their earlier gains as the U.S. outperformed global markets.
  • Investors became defensive by buying high quality stocks with high dividend payments.
  • Fixed-income markets saw a flight to safe haven sovereign bonds (U.S. Treasuries, German Bunds, U.K. Gilts) and drove yields lower.
  • However, riskier bonds withstood investor macro concerns fairly well.
  • The U.S. dollar strengthened against most major currencies.

Source: SEI,. Returns in US dollars. Large Cap = Russell 1000, Small Cap = Russell 2000, Real Estate = Wilshire RESI (Float Adjusted) Index, Developed International Equity Markets = MSCI EAFE, Emerging Markets Equity = MSCI EME, World Equities = MSCI World Index, Global Bonds = Barclay’s Capital Aggregate Global Bond Index, US Investment Grade Bonds = Barclay’s Capital US Aggregate, High Yield = Merrill Lynch US HY Constrained, Emerging Markets Debt = JP Morgan EMBIGD, Treasury = Barclay’s Capital US Treasury Bond Index, Inflation Linked = Barclays Capital 1-10 Yrs TIPS Index, Cash = BoA ML USD LIBOR 3M

equity market review second quarter 2012
Equity Market Review: Second Quarter 2012
  • Equity returns were negative across all broad asset classes and geographies, however remain positive year to date.
  • Stocks sold off in May amid concerns over:
    • Greek elections and the European debt crisis
    • The declining impact of monetary and fiscal stimulus
  • The S&P 500 experienced its worst May since 2010. It had its best June since 1999.
  • Investors stayed invested but rotated sharply to high quality and high dividend yielding stocks.
  • Top 3 sectors (S&P 500 Index)
  • Telecoms (14%)
  • Utilities (7%)
  • Consumer Staples (3%)
  • Bottom 3 sectors (S&P 500 Index)
  • Financials (-7%)
  • Technology (-7%)
  • Energy (-6%)

Sources: FactSet, Bloomberg

fixed income market review
Fixed-Income Market Review
  • Increasing political tensions in the eurozone created investor doubts about the likelihood of meaningful agreement on the debt crisis.
  • A flight to safety into the sovereign bond market led to yields lower than those seen during the 2008 financial panic in some perceived safe havens.
  • In the U.S., the yield curve flattened and spreads generally widened on signs of slowing economic growth.
  • U.S. Treasuries (+2.8%) outpaced most sectors of the Barclays U.S. Aggregate Index.
  • U.S. corporate credit remain healthy and continues to post solid results (+2.5%).
  • High Yield and Emerging Market Debt continued to benefit from favorable fundamentals.

6M 2Y 5Y 10Y 30Y

Historic Yield Levels Reached in Second Quarter

Sources: Bloomberg, BoA Merrill Lynch

economic outlook
Economic Outlook
  • U.S. gross domestic product should continue modest expansion (2% to 3% range) over next two years absent a disorderly break up of the Euro or the U.S. tipping over the “fiscal cliff.”
  • The risk of a severe European shock is real. That noted, we expect Europe to muddle through.
  • We expect Congress to postpone the effect of the automatic spending cuts and tax increases scheduled to go into effect in January 2013.
  • Inflation should remain in the 2% to 3% range.
  • Absent shocks, underlying U.S. economic resiliency and aggressively easy monetary policy should forestall recession risks.
  • After recent slowing emerging markets may begin to reaccelerate due to aggressive monetary actions coupled with cheaper currencies.

Sources: DataStream

the european crisis continues double dip for some depression for others
The European Crisis ContinuesDouble-Dip for Some, Depression for Others
  • Europe is truly in crisis—most eurozone countries are on the brink of, or still in, recession.
  • Greek and Spanish banks have come under intense pressure.
  • The European Central Bank and German Bundesbank are now heavily exposed to periphery risk.
periphery government debt still pressured spreads over german debt remain elevated
Periphery Government Debt Still PressuredSpreads Over German Debt Remain Elevated

10-Year Benchmark Bond Yields

  • Recessionary conditions are making it difficult to get budget deficits under control.
  • Greece and Portugal may eventually exit the eurozone, and Ireland may need additional support.
  • Spain and Italy are far greater tests of commitment to the single currency.
a synchronized slow patch eurozone crisis undermining global economy
A Synchronized Slow PatchEurozone Crisis Undermining Global Economy
  • The rest of the world is not immune to Europe’s struggles.
  • Emerging markets have been negatively impacted; most are now easing economic policies.
  • Tax hikes and spending cuts set to take effect in January 2013 could push the U.S. into recession.
  • U.S. policymakers remain gridlocked, and campaign season is kicking into high gear.
  • The resulting uncertainty could spur investor pessimism and market volatility.

Sources: DataStream (U.S. ISM PMI), Bloomberg (JP Morgan Global PMI Index)

u s equities profit margins have peaked but the market likely has not
U.S. Equities: Profit Margins have Peaked, but the Market Likely has not
  • Stock market bears point to the fact that corporate profit margins have peaked in the U.S.
  • Historically, margins have tended to peak two to three years before the economy and stock market.
  • Barring a severe shock, equities may likely trend higher well into 2013 if not beyond.
an extraordinary flight to safety safe haven yields at record historic lows
An Extraordinary Flight to Safety Safe Haven Yields at Record Historic Lows
  • There was an extraordinary flight to perceived safe-haven investments in the second quarter.
  • Key government debt issues have reached record multi-decade and even multi-century lows.
  • If there is a bull market anywhere, it is in fear.
  • If there is a market bubble, it is in the sovereign debt of safe haven countries.

Source: Bloomberg

no capitulation despite sell off investors aren t bearish enough for us to become bullish
No Capitulation Despite Sell-OffInvestors Aren’t Bearish Enough for us to Become Bullish
  • The move into safe haven government debt looks extreme and stocks are attractively valued.
  • Stocks are not the bargain they were in late 2011 though; investors are fearful but not panicky.
  • We will become more bullish if pessimism deepens and selling pressure intensifies a bit.
emerging markets hit hard cyclical bear market in emerging market equities
Emerging Markets Hit Hard Cyclical Bear Market in Emerging Market Equities
  • The European crisis has hit emerging markets through trade and trade finance channels.
  • Policymakers tightened in response to inflation pressures through 2011.
  • Emerging market investors have had to grapple with slowing growth and currency declines.
  • Policy easing is now in effect for many countries and weaker currencies should be supportive of growth.

Stocks

Bonds

emerging markets look interesting weaker currencies easier policies and attractive valuations
Emerging Markets Look InterestingWeaker Currencies, Easier Policies and Attractive Valuations
  • Valuations look attractive, especially against a backdrop of weaker currencies and policy easing.
  • Policy measures may start to bear fruit in the second half of 2012 or early 2013.
  • We are keeping a close eye on EM asset classes as they could benefit most from a global recovery.
the outlook waiting for a catalyst
The OutlookWaiting for a Catalyst
  • The Good News
  • The U.S. economy continues to grow, although the pace is slow.
  • Equities appear reasonably priced, but changes in investor sentiment will continue to be an important driver of stock prices.
  • Monetary policy remains expansionary in most countries, and policymakers have now moved into easing mode in many emerging markets.
  • Inflation fears have eased globally. Energy prices are down sharply, adding to disposable incomes.
  • Emerging markets valuations and currencies have fallen dramatically.
  • The Bad News
  • Europe’s recession is likely to be deeper for longer.
  • The debt crisis in Europe has now engulfed Italy and Spain, which are much larger economies and debt issuers.
  • The U.S. election could lead to deeper partisan divisions, making it more difficult to reach needed fiscal compromises at year end.
  • China and other key emerging markets have hit notable soft patches. China’s leadership change has turned messy.
  • Tensions over Iran’s nuclear capabilities have not disappeared.
review and monitor your goals1
Review and Monitor Your Goals

.

Identify your goals and resources

Monitor investment strategies and progress

Identify the appropriate investment

Implement the Goals-Based investment solution

Evaluate and confirm the proposed investment solution

goal discovery 2012 and beyond
Goal Discovery 2012 and Beyond

Establishing a time horizon and priority for goals

PRIORITY

Current & Discretionary

Objective

Grow Assets

Deferred & Discretionary

Objective

Grow Assets

Want To

Current & Required

Objective

Protect Against Losses, Maintain Steady Growth

Deferred & Required

Objective

Preserve a Guaranteed Sum, Have Enough When the Time Comes

Have To

TIME

Now

Later

reviewing your strategies
Reviewing Your Strategies

Text in grey indicates example

disclosure
Disclosure

Please note that PC model allocations and/or investment components are subject to change. Short- and long-term tax impact should be considered. It is your responsibility to ensure that you and your clients are investing in the most recent allocations.

index definitions
Index Definitions

The Barclays Capital Global Aggregate Bond Index (formerly Lehman Brothers Global Aggregate Index), an unmanaged market-capitalization-weighted benchmark, tracks the performance of investment-grade fixed income securities denominated in 13 currencies. The Index reflects reinvestment of all distributions and changes in market prices.

The Barclays Capital U.S. Aggregate Bond Index (formerly Lehman Brothers U.S. Aggregate Bond Index) is a benchmark composed of U.S. securities in Treasury, Government-Related, Corporate, and Securitized sectors. It includes securities that are of investment-grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $250 million.

The Barclays Capital 1-5 Year U.S. TIPS Index measures the performance of inflation-protected public obligations of the U.S. Treasury that have a remaining maturity of one to five years.

The Barclays Capital 1-10 Year U.S. TIPS Index measures the performance of inflation-protected public obligations of the U.S. Treasury that have a remaining maturity of one to ten years.

The Barclays Capital 1 Year Municipal Bond Index includes bonds with a minimum credit rating of BAA3, are issued as part of a deal of at least $50 million, have an ammount outstanding of at least $5 million, and have maturities of one to two years.

The Barclays Capital Short U.S. Treasury 9-12 Month Index measures the performance of U.S. Treasury securities that have a remaining maturity between one and twelve months.

The Barclays Capital Municipal Blend 3-15 Year Index measures the performance of municipal bonds with three to 15 years remaining until maturity.

The CDX IG 12 is a benchmark high-grade derivatives index, which measures the cost of insuring a basket of U.S. investment-grade corporate debt against defaults.

The Chicago Board Options Exchange Volatility Index(VIX) tracks the expected volatility in the S&P 500 over the next 30 days. A higher number indicates greater volatility. Common usage: The Chicago Board Options Exchange Volatility Index (VIX), a barometer of market volatility.

The Dow Jones Wilshire Real Estate Securities Index (RESI) is used to measure the U.S. real estate market and includes both real estate investment trusts (REITs) and real estate operating companies (REOCs). It is weighted by float-adjusted market capitalization.

The JP Morgan Emerging Market Bond Index is a total return, unmanaged trade-weighted index for U.S. dollar-denominated emerging-market bonds, including sovereign debt, quasi-sovereign debt, Brady bonds, loans and Eurobonds.

The MSCI All Country World Index is a market-capitalization-weighted index composed of over 2,000 companies, and is representative of the market structure of 48 developed and emerging-market countries in North and South America, Europe, Africa, and the Pacific Rim. The Index is calculated with net dividends reinvested in U.S. dollars.

The MSCI EAFE Index is an unmanaged, market-capitalization-weighted equity index that represents the developed world outside North America.

The MSCI Emerging Markets Index is a free-float-adjusted market-capitalization-weighted index designed to measure the performance of global emerging-market equities.

index definitions continued
Index Definitions (Continued)

The MSCI World Index is an unmanaged, market-capitalization-weighted equity index that represents that developed world outside North America.

The Merrill Lynch High Yield Master II Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Its securities have maturities of one year or more and a credit rating lower than BBB-/Baa3 but are not in default.

The Russell 1000 Index includes 1,000 of the largest U.S. equity securities based on market cap and current index membership; it is used to measure the activity of the U.S. large-cap equity market.

The Russell 2000 Index includes 2,000 small-cap U.S. equity names and is used to measure the activity of the U.S. small-cap equity market.

The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.

The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. IT includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.

The S&P 500 Index is a capitalization-weighted index made up of 500 widely held large-cap U.S. stocks in the Industrials, Transportation, Utilities and Financials sectors.

The BofA Merrill Lynch USD 3-Month LIBOR Constant Maturity Index is based on the assumed purchase of a synthetic instrument having three months to maturity and with a coupon equal to the closing quote for 3-Month LIBOR. That issue is sold the following day (priced at a yield equal to the current day closing 3-Month LIBOR rate) and is rolled into a new 3-Month Instrument. The index, therefore, will always have a constant maturity equal to exactly three months.

The BofA Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.

The BofA Merrill Lynch 1-3 Year U.S. Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years. It is not possible to invest directly in an unmanaged index.

disclosure1
Disclosure
  • This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the Funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts. There is no assurance as of the date of this material that the securities mentioned remain in or out of SEI Funds.
  • For those SEI Funds that employ the `manager of managers\' structure, SEI Investments Management Corporation (SIMC) has ultimate responsibility for the investment performance of the Funds due to its responsibility to oversee the sub-advisers and recommend hiring, termination and replacement. SIMC is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co. (SIDCO). SIMC and SIDCO are wholly owned subsidiaries of SEI Investments Company.
  • Carefully consider the investment objectives, risk factors and charges and expenses of the Funds before investing. This and other information can be found in the Funds’ prospectuses, which can be obtained by calling 1-800-DIAL-SEI. Read them carefully before investing.
  • There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Narrowly focused investments and smaller companies typically exhibit higher volatility. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Bonds and bond funds will decrease in value as interest rates rise. High-yield bonds involve greater risks of default or downgrade and are more volatile than investment-grade securities due to their more speculative nature.
  • Diversification may not protect against market risk. There is no assurance the objectives discussed will be met. Past performance does not guarantee future results. Index returns are for illustrative purposes only and do not represent actual portfolio performance. Index returns do not reflect any management fees, transaction costs or expenses. One cannot invest directly in an index.
  • Not FDIC Insured
  • No Bank Guarantee
  • May Lose Value
sei representative strategy review performance review
SEI Representative Strategy Review Performance Review
  • Stability-focused strategies protected well due to their focus on investment-grade bonds. Measured exposure to managed-volatility equities was a benefit.
  • Market-focused strategies benefited from their allocations to fixed income in a risk-averse environment.

Performance shown is for selected Private Client strategies, net of fees. Performance assumes investment at the beginning of the period indicated and reflects all recommended reallocations and changes among the funds, including changes in investment managers and funds included in the model. Information on allocation among funds, reallocations and model changes is available upon request. Model performance shown is not meant to represent any individual client account.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes. 

Sources: SEI, DataMart

Past Performance is No Guarantee of Future Performance.

sei private client short term strategy
SEI Private Client Short Term Strategy
  • Given the low interest rate environment, the strategy continued to enhance yield beyond that of cash and posted a modest positive quarterly result of 0.18%.
  • Short-Duration Government was the top performer as investor risk aversion favored high-quality bonds. Real Return detracted as inflation expectations waned on slowing global growth.
  • During the quarter, SEI introduced a new offering into the Strategy– the Multi Asset Capital Stability Fund - which provides increased diversification and enhanced ability to manage across different market environments.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei private client defensive strategy
SEI Private Client Defensive Strategy
  • The strategy posted a return of 0.47%, finishing within the range of cash and the broad fixed-income market.
  • Within bonds, U.S. Fixed Income led as its relatively longer maturity focus was a boost to returns as yields fell in the “risk-off” environment. Real Return detracted as inflation expectations waned on slowing global growth.
  • While global stocks were under pressure and posted negative returns, U.S. Managed Volatility and Global Managed Volatility mitigated the full brunt of the pullback in global stocks and posted positive results.
  • During the quarter, SEI introduced three new offerings into the Strategy –the Multi Asset Capital Stability, Multi Asset Inflation and Multi Asset Income Funds - which provide increased diversification and enhanced ability to manage across different market environments.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei private client conservative strategy
SEI Private Client Conservative Strategy
  • The strategy returned 0.59%, finishing competitively with cash and the broad U.S. fixed-income markets.
  • Within bonds, U.S. Fixed Income led as its relatively longer maturity focus boosted returns as yields fell in the “risk-off” environment. Security selection in Enhanced Income and Ultra Short Bond led to positive results.
  • While global stocks were under pressure (posting negative returns), the managed volatility portfolios posted positive results, mitigating the full brunt of the pullback in global stocks.
  • During the quarter, SEI introduced three new offerings into the Strategy –the Multi Asset Capital Stability, Multi Asset Inflation and Multi Asset Income Funds - which provide increased diversification and enhanced ability to manage across different market environments.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei private client moderate strategy
SEI Private Client Moderate Strategy
  • The strategy returned 0.45%, finishing within the range of broad U.S. fixed-income and global equity markets.
  • Within bonds, U.S. Fixed Income led as its relatively longer maturity focus was a boost to returns as yields fell in the “risk-off” environment. High Yield and Emerging Market Debt also weathered this turbulent quarter fairly well and produced positive results on the back of the solid fundamentals and attractive coupons.
  • While global stocks were under pressure and posted negative returns, the U.S. Managed Volatility and Global Managed Volatility) mitigated the full brunt of the pullback in global stocks and posted positive results.
  • During the quarter, SEI introduced three new offerings into the Strategy –the Multi Asset Capital Stability, Multi Asset Inflation and Multi Asset Accumulation Funds - which provide increased diversification and enhanced ability to manage across different market environments.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei private client core market strategy
SEI Private Client Core Market Strategy

1%

  • The strategy’s -1.29% return is within the range of returns of the U.S. fixed income and global equity markets.
  • Each of bond funds generated positive results, lessening the negative impact from falling global stock markets. Given investor preference for higher-quality assets, U.S. Fixed Income outpaced High Yield and Emerging Market Debt in terms of relative performance.
  • U.S. stocks (the strategy’s largest allocation) generally outpaced developed and developing non-U.S. stocks. Within the U.S., Large Cap beat Small Cap, continuing the theme of perceived higher-quality outperformance.
  • SEI introduced two new offerings into the Strategy–the Multi Asset Accumulation and Multi Asset Inflation Managed Funds – which provide increased diversification/enhanced ability to manage across different market environments.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei private client market growth strategy
SEI Private Client Market-Growth Strategy

1%

  • The strategy declined 2.26% in the second quarter, which was in line with the returns on the broad U.S. fixed-income and global equity markets.
  • Positive bond Fund returns lessened the impact of falling stock prices. Given investor preference for higher-quality assets, U.S. Fixed Income beat High Yield and Emerging Market Debt in terms of relative performance.
  • U.S. stocks, which represent the strategy’s largest allocation, generally outpaced developed and developing non-U.S. stocks. Within the U.S., Large Cap beat Small Cap as higher-quality performed best.
  • SEI added two new offerings into the Fund Strategy –the Multi Asset Accumulation and Multi Asset Inflation Managed Funds – which provide increased diversification/better ability to manage across different market environments.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei private client aggressive strategy
SEI Private Client Aggressive Strategy

1%

  • Market sentiment was challenged as investors grappled with sluggish economic data and ongoing sovereign debt concerns. Risk aversion led volatile equity markets to the downside. The strategy returned -3.89%, falling within the range of returns on the broad U.S. fixed-income and global equity markets.
  • U.S. stocks, which represent the strategy’s largest allocation, generally outpaced developed and developing non-U.S. stocks. U.S. Large Cap beat Small Cap, continuing the theme of higher-quality performed best.
  • Within fixed income, High Yield Bond and Emerging Market Debt weathered this turbulent quarter and produced positive results on the back of solid fundamentals and attractive yields.
  • SEI introduced a new offering into the Strategy–the Multi Asset Accumulation Fund – which provide increased diversification and enhanced ability to manage across different market environments.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei private client equity strategy
SEI Private Client Equity Strategy

1%

  • The strategy’s all-equity, global allocation returned -5.49% compared to -3.89% for S&P 500 Index and -7.61% for the MSCI AC World ex-U.S. index.
  • U.S. stocks generally outpaced developed and developing non-U.S. equities. U.S. Large Cap beat Small Cap, continuing the theme of outperformance from perceived higher-quality issues.
  • Outside of the U.S., International Equity slightly edged Emerging Market Equity despite the uncertainty in the Europe. Emerging markets are traditionally are more volatile than their developed non-U.S. counterparts and dipped further in the “risk-off” environment.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei tax managed market growth strategy
SEI Tax-Managed Market-Growth Strategy
  • The strategy returned -2.9% % in the second quarter, falling within the range of returns on the broad U.S. fixed-income and global equity markets.
  • U.S. stocks, which represent the strategy’s largest allocation, generally outpaced developed and developing non-U.S. stocks. Within the U.S., Tax-Managed Large Cap beat Small Cap, continuing the theme of better performance from higher-quality assets.
  • Within fixed income, each of bond funds generated positive results and served to lessen the negative impact from falling global stock markets. Intermediate Term Municipal posted solid results as state tax revenues continued to rebound.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees, Selected Private Client Strategies.

Past Performance is No Guarantee of Future Performance.

sei institutional growth and income strategy
SEI Institutional Growth and Income Strategy
  • The strategy returned -2.70% in the second quarter, falling with the range of returns on the broad U.S. fixed- income and global equity markets.
  • Within fixed income, each of bond funds generated positive results and served to lessen the negative impact from falling global stock markets. Given investor preference for higher quality assets, Core Fixed Income outpaced High Yield and Emerging Market Debt in terms of relative performance.
  • In equities, U.S. stocks, which represents the strategy’s largest allocation, generally outpaced developed and developing non-U.S. stocks. Within the U.S., Large Cap beat Small Cap, continuing the theme of perceived higher quality performed best.

Model performance shown is net of fees charged by SEI, but does not reflect any fee your advisor may charge. Source: SEI, FactSet, Net of Fees,

Past Performance is No Guarantee of Future Performance.

sei stability focused strategies a focus on managed volatility
SEI Stability Focused StrategiesA Focus on Managed Volatility
  • Stability-Focused strategies seek to protect against significant volatility and substantial losses.
  • Within bonds, the focus is limiting interest -rate risk and enhancing yield.
  • Within stocks, the focus is on capturing equity growth while dampening volatility via:

- U.S. Managed Volatility (U.S. only)

- Global Managed Volatility (U.S. and non-U.S.)

  • Managed Volatility portfolios emphasize attractive stocks that exhibit lower volatility

- Characterized by stable earnings profile, low financial leverage, and low stock price volatility

- Portfolios are not benchmark sensitive

- Overweight the more defensive sectors: Utilities, Consumer Stapes and Health Care

- Underweight more volatile market areas

- In Global Managed Volatility, particularly European

banks

Source: SEI, FactSet

simt multi asset accumulation fund furthering diversification and risk management
SIMT Multi-Asset Accumulation FundFurthering diversification and risk management
  • Focuses on long term consistent growth by actively managing the risk associated with global exposures through various economic environments and market conditions
  • Provides broad global market exposures, including global equities, developed and inflation-linked bonds and broad commodity exposure
  • Current strategic risk targets are 40% equity, 30% nominal interest rates and 30% inflation-sensitive assets
  • Current Positioning:
  • - Favor developed bonds: strong momentum due to risk-averse environment
  • - Underweight commodities (inflation-sensitive): weakening fundamentals (global growth) and negative momentum
  • Positive absolute and relative performance for the Fund in the second quarter (largest contribution from equity market exposure)
  • Relative performance benefitted from decreased equity market exposure in May as global stocks suffered.

Source: SEI, AQR Capital Management

opportunities in fixed income bond fund relative positioning
Opportunities in Fixed IncomeBond Fund relative positioning
  • Markets for riskier asset classes should remain volatile given continued challenges for Europe and uncertainty about global economic growth.
  • Similarly, markets for high-quality liquid assets (i.e., U.S. Treasuries and German Bunds) will remain overvalued for the foreseeable future.
  • SEI Intermediate-Term Bond Funds
  • (SIMT U.S. Fixed Income and SIMT Core Fixed Income)
  • Despite the volatility (or because of it) attractive opportunities remain in the non-government sectors of the fixed income markets.
    • Investment-grade and high-yield corporate bonds:
      • Spreads are attractive relative to historical norms and underlying fundamentals; event risk is low.
      • High yield bonds in Core Fixed Income only
    • Agency and non-agency mortgage-backed securities: - Signs of stability in the U.S. housing market should
    • support continued favorable results in the non-agency
    • MBS sectors.
    • U.S. financials are an area of particularly attractive value where regulatory reform should benefit bond holders.

*Option-adjusted spreads (OAS) are the spreads over the Treasury yield curve that is requested when discounting payments to match a security’s market price.

The option being adjusted for is an issuer’s right to prepay the full amount of the security before maturity.

Sources: Barclays Capital, BlackRock Solutions

**Represents OAS of non-agency mortgages within SIMT Core Fixed Income.

*** Represents BoA ML High Yield Constrained Index

sit international equity eurozone continues to work towards a solution
SIT International EquityEurozone continues to work towards a solution
  • While global economic growth is expected to be moderate, 2012 eurozone gross domestic product estimates indicate a contraction.
  • Eurozone’s debt crisis continued to evolve, placing Spain and its banks in the news.
  • Positioning in the Fund reflects this tepid view with an underweight to periphery Europe, particularly the banking industry within the Financials sector.
  • Performance was in line for the quarter and year; stock picking in Europe offset pressure from the emerging market overweight.
  • Active Positioning
    • Underweight Financials, specifically large European banks
    • Adding to European global multi-nationals on oversold basis
    • Overweight in emerging markets as seen as the source of global growth
    • Overweight to Canada, in particular metals
    • Underweight the aging economy of Japan with staggering fiscal deficits

Source: SEI, FactSet

sei performance summary quarterly fixed income mutual funds
SEI Performance Summary - QuarterlyFixed-Income Mutual Funds

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: SEI Datamart

sei performance summary quarterly equity mutual funds
SEI Performance Summary - Quarterly Equity Mutual Funds

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: SEI Datamart

sei performance summary quarterly equity mutual funds continued
SEI Performance Summary - Quarterly Equity Mutual Funds (continued)

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: SEI Datamart

sei performance summary quarterly alternative mutual funds
SEI Performance Summary - Quarterly Alternative Mutual Funds

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: SEI Datamart

sei annualized performance summary fixed income mutual funds
SEI Annualized Performance SummaryFixed-Income Mutual Funds

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Fee waivers are voluntary. Source: SEI Datamart

sei annualized performance summary equity mutual funds
SEI Annualized Performance SummaryEquity Mutual Funds

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Fee waivers are voluntary. Source: SEI Datamart

sei annualized performance summary equity mutual funds continued
SEI Annualized Performance SummaryEquity Mutual Funds (continued)
  • After taxes on distributions of dividends and capital gains**
  • After taxes on distributions of dividends and capital gains and proceeds from the sale of fund shares**
  • ** After-tax returns are calculated using the historical top individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Fee waivers are voluntary. Source: SEI Datamart

sei annualized performance summary alternative mutual funds
SEI Annualized Performance SummaryAlternative Mutual Funds

Performance data quoted is past performance. Past performance is no guarantee of future results. The principal value and investment return of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original value. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Fee waivers are voluntary. Source: SEI Datamart

sei annualized performance summary money market funds
SEI Annualized Performance SummaryMoney Market Funds

Performance data quoted is past performance. Past performance is no guarantee of future results. Current performance may be higher or lower. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. The yield quotation more closely reflects the current earnings of the money market fund than the total returns. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per shares, it is possible to lose money by investing in the Fund. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Fee waivers are voluntary. Source: SEI Datamart

goals based performance
Goals-Based Performance

As of June 30, 2012 (Net of Fees)

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor\'s shares, when redeemed, may be worth more or less that their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month end, please call 1-800-DIAL-SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: SEI Datamart

tax managed goals based performance
Tax-Managed Goals-Based Performance

As of June 30, 2012 (Net of Fees)

Source: SEI DataMart (monthly returns )

Performance assumes investment at the beginning of the period indicated and reflects all recommended reallocations and changes among the funds, including changes in investment managers and funds included in the model. Information on allocations among funds, reallocations and model changes is available upon request. Model performance shown is not meant to represent any individual client account. Model performance shown is net of fees charged by SEI.

goals based performance private client strategies
Goals-Based PerformancePrivate Client Strategies

As of June 30, 2012 (Net of Fees)

Performance assumes investment at the beginning of the period indicated and reflects all recommended reallocations and changes among the funds, including changes in investment managers and funds included in the model. Information on allocations among funds, reallocations and model changes is available upon request. Model performance shown is not meant to represent any individual client account. Model performance shown is net of fees charged by SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: SEI Datamart

tax managed goals based performance private client strategies
Tax-Managed Goals-Based PerformancePrivate Client Strategies

As of June 30, 2012 (Net of Fees)

Performance assumes investment at the beginning of the period indicated and reflects all recommended reallocations and changes among the funds, including changes in investment managers and funds included in the model. Information on allocations among funds, reallocations and model changes is available upon request. Model performance shown is not meant to represent any individual client account. Model performance shown is net of fees charged by SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: SEI Datamart

institutional performance
Institutional Performance

As of June 30, 2012 (Net of Fees)

Performance assumes investment at the beginning of the period indicated and reflects all recommended reallocations and changes among the funds, including changes in investment managers and funds included in the model. Information on allocations among funds, reallocations and model changes is available upon request. Model performance shown is not meant to represent any individual client account. Model performance shown is net of fees charged by SEI. Performance information as shown is net of all mutual fund fees and expenses, but does not include any charges or fees which may or may not be imposed by an investor’s financial advisor which will reduce performance returns. For example, on an account charged 1% by a financial advisor with a stated annual return (net of mutual fund fees) of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,400, and at 9%, to $236,700 before taxes.  Source: FactSet

index definitions1
Index Definitions

The Barclays Capital Global Aggregate Bond Index (formerly Lehman Brothers Global Aggregate Index), an unmanaged market-capitalization-weighted benchmark, tracks the performance of investment-grade fixed income securities denominated in 13 currencies. The Index reflects reinvestment of all distributions and changes in market prices.

The Barclays Capital U.S. Aggregate Bond Index (formerly Lehman Brothers U.S. Aggregate Bond Index) is a benchmark composed of U.S. securities in Treasury, Government-Related, Corporate, and Securitized sectors. It includes securities that are of investment-grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $250 million.

The Barclays Capital 1-5 Year U.S. TIPS Index measures the performance of inflation-protected public obligations of the U.S. Treasury that have a remaining maturity of one to five years.

The Barclays Capital 1-10 Year U.S. TIPS Index measures the performance of inflation-protected public obligations of the U.S. Treasury that have a remaining maturity of one to ten years.

The Barclays Capital 1 Year Municipal Bond Index includes bonds with a minimum credit rating of BAA3, are issued as part of a deal of at least $50 million, have an ammount outstanding of at least $5 million, and have maturities of one to two years.

The Barclays Capital Short U.S. Treasury 9-12 Month Index measures the performance of U.S. Treasury securities that have a remaining maturity between one and twelve months.

The Barclays Capital Municipal Blend 3-15 Year Index measures the performance of municipal bonds with three to 15 years remaining until maturity.

The CDX IG 12 is a benchmark high-grade derivatives index, which measures the cost of insuring a basket of U.S. investment-grade corporate debt against defaults.

The Chicago Board Options Exchange Volatility Index(VIX) tracks the expected volatility in the S&P 500 over the next 30 days. A higher number indicates greater volatility. Common usage: The Chicago Board Options Exchange Volatility Index (VIX), a barometer of market volatility.

The Dow Jones Wilshire Real Estate Securities Index (RESI) is used to measure the U.S. real estate market and includes both real estate investment trusts (REITs) and real estate operating companies (REOCs). It is weighted by float-adjusted market capitalization.

The JP Morgan Emerging Market Bond Index is a total return, unmanaged trade-weighted index for U.S. dollar-denominated emerging-market bonds, including sovereign debt, quasi-sovereign debt, Brady bonds, loans and Eurobonds.

The MSCI All Country World Index is a market-capitalization-weighted index composed of over 2,000 companies, and is representative of the market structure of 48 developed and emerging-market countries in North and South America, Europe, Africa, and the Pacific Rim. The Index is calculated with net dividends reinvested in U.S. dollars.

The MSCI EAFE Index is an unmanaged, market-capitalization-weighted equity index that represents the developed world outside North America.

The MSCI Emerging Markets Index is a free-float-adjusted market-capitalization-weighted index designed to measure the performance of global emerging-market equities.

index definitions continued1
Index Definitions (Continued)

The MSCI World Index is an unmanaged, market-capitalization-weighted equity index that represents that developed world outside North America.

The Merrill Lynch High Yield Master II Constrained Index is a market-value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Its securities have maturities of one year or more and a credit rating lower than BBB-/Baa3 but are not in default.

The Russell 1000 Index includes 1,000 of the largest U.S. equity securities based on market cap and current index membership; it is used to measure the activity of the U.S. large-cap equity market.

The Russell 2000 Index includes 2,000 small-cap U.S. equity names and is used to measure the activity of the U.S. small-cap equity market.

The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.

The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. IT includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.

The S&P 500 Index is a capitalization-weighted index made up of 500 widely held large-cap U.S. stocks in the Industrials, Transportation, Utilities and Financials sectors.

The BofA Merrill Lynch USD 3-Month LIBOR Constant Maturity Index is based on the assumed purchase of a synthetic instrument having three months to maturity and with a coupon equal to the closing quote for 3-Month LIBOR. That issue is sold the following day (priced at a yield equal to the current day closing 3-Month LIBOR rate) and is rolled into a new 3-Month Instrument. The index, therefore, will always have a constant maturity equal to exactly three months.

The BofA Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.

The BofA Merrill Lynch 1-3 Year U.S. Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years. It is not possible to invest directly in an unmanaged index.

disclosure2
Disclosure

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the Funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts. There is no assurance as of the date of this material that the securities mentioned remain in or out of SEI Funds.

For those SEI Funds which employ the `manager of managers\' structure, SEI Investments Management Corporation (SIMC) has ultimate responsibility for the investment performance of the Funds due to its responsibility to oversee the sub-advisers and recommend their hiring, termination and replacement. SIMC is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co. (SIDCO). SIMC and SIDCO are wholly owned subsidiaries of SEI Investments Company.

Carefully consider the investment objectives, risk factors and charges and expenses of the Funds before investing. This and other information can be found in the Funds’ prospectuses, which can be obtained by calling 1-800-DIAL-SEI. Read them carefully before investing.

There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Narrowly focused investments and smaller companies typically exhibit higher volatility. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Bonds and bond funds will decrease in value as interest rates rise. High-yield bonds involve greater risks of default or downgrade and are more volatile than investment-grade securities due to their more speculative nature.

Diversification may not protect against market risk. There is no assurance the objectives discussed will be met. Past performance does not guarantee future results. Index returns are for illustrative purposes only and do not represent actual portfolio performance. Index returns do not reflect any management fees, transaction costs or expenses. One cannot invest directly in an index.

  • Not FDIC Insured
  • No Bank Guarantee
  • May Lose Value
disclosure3
Disclosure

Please note that PC model allocations and/or investment components are subject to change. Short- and long-term tax impact should be considered. It is your responsibility to ensure that you and your clients are investing in the most recent allocations.

Neither SEI nor its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein: and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. Investing in the Funds is subject to the risks of the underlying funds. Asset allocation may not protect against market risk. Bonds and bond funds will decrease in value as interest rates rise. Due to their investment strategies, the Funds may buy and sell securities frequently. The use of leverage can amplify the effects of market volatility on the Fund’s share price and may also cause the Fund to liquidate portfolio positions when it would not otherwise be advantageous to do so in order to satisfy its obligations.

High-yield securities may be more volatile, be subject to greater levels of credit or default risk and may be less liquid and more difficult to sell at an advantageous time or price to value than higher-rated securities of similar maturity.

Commodity investments and derivatives may be more volatile and less liquid than direct investments in the underlying commodities themselves. Commodity-related equity returns can also be affected by the issuer’s financial structure or the performance of unrelated businesses. The Fund’s use of futures contracts, forward contracts, options and swaps is subject to market risk, leverage risk, correlation risk and liquidity risk.

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