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1 st Quarter 2014 INSERT CLIENT NAME DATE. Client Investment Review. Agenda › Setting Goals. Follow-up From Last Meeting Financial Planning Check Up and Reconfirm Goals Global Market Review and Economic Outlook Your Portfolio Review Financial Planning Tips & Upcoming Tax Climate

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agenda setting goals
Agenda ›Setting Goals
  • Follow-up From Last Meeting
  • Financial Planning Check Up and Reconfirm Goals
  • Global Market Review and Economic Outlook
  • Your Portfolio Review
  • Financial Planning Tips & Upcoming Tax Climate
  • Next Steps
our plan my commitment as your financial advisor
Our Plan ›My Commitment as Your Financial Advisor
  • Better understanding your needs and goals.
  • Helping you avoid emotion-driven mistakes.
  • Helping you better understand the markets.
  • Providing options and explaining the trade-offs of each.
  • Being available to consult with you in all markets.
  • Providing access to your investments 24/7 through personal contact and technology.
  • Continuous monitoring and quarterly rebalancing of your accounts.
  • Keeping you up-to-date on your concerns and adjusting your investment strategies to help you meet your goals.
  • My goal is to help you manage risk and achieve consistent returns that will keep you on path to your goals.
financial check up a holistic view
Financial Check Up ›A Holistic View
  • How are you and your family doing? How is your health?
  • How is your cash flow?
  • Do you have any anticipated changes to your investment plan, estate plan or insurance coverage?
  • Have there been any changes to your lifestyle or circumstances?
  • What are your plans for the next three to six months?
  • What are your top concerns for this year? What keeps you up at night?
your goals ongoing monitor and review
Your Goals ›Ongoing Monitor and Review

Identify your goals and resources

Monitor investment strategies & progress to goals on an on-going basis

Identify the appropriate investment strategies to meet your goals

Implement the Goals-Based investment solution

Evaluate and confirm the proposed investment solution designed to meet your goals

.

diversification asset class returns
Diversification ›Asset Class Returns
  • Individual asset classes go in and out of favor over time. Harnessing proper diversification can enhance returns and help to cushion against volatility.
  • This graphic illustrates why investors diversify and the potential damages of market timing.
  • As you can see, no single asset class remained at the top for two consecutive years, and in fact often trailed the market in succeeding years.

See appendix for index definitions. Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

Source: lbbotson Associates. This material has been obtained from sources generally considered reliable. No guarantee can be made as to its accuracy.

Not intended to represent the performance of any particular investment. Indices are unmanaged and one cannot invest directly in an index.

global market review
Global Market Review

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 Index, Emerging Markets Debt = JP Morgan EMBIGD, Treasury = Barclay’s Capital US Treasury Bond Index, Inflation Linked = Barclays Capital 1-10 Yrs TIPS Index, Cash = BofA Merrill Lynch US Dollar 3-Month Deposit Offered Rate Constant Maturity Index. Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance is no guarantee of future results.

  • Continued economic expansion in advanced economies is creating optimism, while emerging economies sort through political, financial and social reforms.
  • Global equities rebounded from an early setback, reaching positive territory by quarter end.
    • Europe and the U.S. led with 2% gains; Japan lagged with a 6% decline.
    • Emerging markets continued to lag.
  • Global central banks have generally remained committed to providing stimulus in one form or another.
  • Geopolitical concerns and a further easing of inflation pressures around the globe sparked a stronger rally in sovereign debt than anticipated.
  • Riskier bonds led as investor demand remained firm.
    • Emerging-market debt and high yield gained 3.7% and 3.0%, respectively.
  • Since the start of the bull market in stocks five years ago, equities have outperformed the U.S. Treasury 10-year bond by almost 190 percentage points.
fixed income market review
Fixed-Income Market Review

2.72%

0.60%

Source: FactSet, SEI

  • Treasury yields generally fell despite firming growth and continued bond-purchase tapering by the Federal Reserve (Fed).
    • Barclays U.S. Aggregate Index returned 1.84%.
  • Investor demand drove high-yield bonds and emerging-market debt to strong results.
  • Although we think the Fed will remain dovish, we expect some firming of bond yields toward 3.25%—a more normal relationship vis-à-vis expected inflation.
    • Nominal yields (U.S. Treasury yields) are still overvalued.
    • The implied inflation rate within nominal yields is reasonable.
    • However, real yields (Treasury inflation-protected securities yields) appear artificially low due to the Fed’s quantitative easing efforts (despite rising since talk of tapering easing).
  • Given this, duration positioning is generally shorter than the benchmark.
  • With current spread levels tighter, security selection will play a larger role in driving performance.
    • Overweights to the spread sectors were maintained but remain actively managed based on spread levels.
    • Non-agency commercial and residential mortgage-backed securities, as well as corporate debt of financials, are preferred.
equity market review
Equity Market Review

Index returns are for illustrative purposes only and do not represent actual fund performance.

Index performance returns do not reflect any management fees, transaction costs or expenses.

Indexes are unmanaged and one cannot invest directly in an index. Past performance does not

guarantee future results.

  • Global equity markets shook off concerns of slower growth in China and tapering by the Federal Reserve to close higher.
  • In the U.S., large cap outpaced small cap, and value beat growth, in terms of style.
  • Given the market’s ascent, U.S. equity valuations are elevated (16.5x)* but appear well within the historical norm, especially against:
    • The backdrop of very low interest rates.
    • A still-expansionary monetary policy.
    • Further improvement in economic growth and corporate profitability.
  • While earnings growth has been supportive, top-line growth is key to a more robust expansion.
    • Corporate earnings for S&P 500 companies posted a 9% year-over-year gain (December 2013).
  • The biggest risk we see is the momentum of the market becoming overextended.
  • Given this, we have a focus on quality-growth stocks.

Source (both charts): FactSet, SEI

* 12-month price-to-earnings ratio of S&P 500 Index

sei representative strategy review
SEI Representative Strategy Review
  • Volatility returned to global equity and fixed-income markets during the first quarter, but returns for the period overall were fairly muted. This environment was reflected in quarterly strategy returns, which were modestly positive for all strategies.
  • Trailing one-year performance patterns were quite different, reflecting strong gains in equity markets (especially U.S. small- and large-cap stocks), contrasted with a difficult fixed-income environment. The Short Term strategy return was marginally negative; all other strategies were in positive territory, particularly those with predominantly equity-based exposure.

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 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, but does not reflect any fee your advisor may charge.

Sources: SEI, DataMart

Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns

do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest

directly in an index. Past performance is no guarantee of future results.

sei representative strategy review stability focused strategies
SEI Representative Strategy ReviewStability-Focused Strategies

Index returns are for illustrative purposes only and do not represent actual fund

performance. Index performance returns do not reflect any management fees,

transaction costs or expenses. Indexes are unmanaged and one cannot invest

directly in an index. Past performance is no guarantee of future results.

Source: SEI, BlackRock Solutions

Durations shown as of 3/31/14.

Weighted average results derived from the fixed income fund components of Strategy;

U.S. Bonds reflects Barclays U.S. Aggregate Bond Index

  • Stability-focused strategies (Short Term, Defensive, Conservative, and Moderate) are designed to reduce portfolio volatility and drawdown risk, while still seeking long-term appreciation.
  • The fixed-income focus is on reducing interest-rate risk and enhancing yield.
  • The equity focus is on capital appreciation with below-market volatility.
  • The U.S. Managed Volatility equity portfolio outperformed its benchmark by over 200 basis points for the quarter, and continued to show solid longer-term returns.

* Values were set to zero as of March 31, 2011.

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.

stability focused strategy pc short term strategy
Stability-Focused Strategy ›PC Short Term Strategy

Strategy Themes

  • The strategy delivered a marginally positive quarterly return, reflecting stabilization of shorter duration U.S. fixed-income securities and the continuation of near-zero cash yields.
  • Quarterly performance was aided by a slight gain in the Multi-Asset Capital Stability fund, and marginally positive returns in Short Duration Government and Real Return.
  • Trailing 1-year returns remained marginally negative, driven primarily by declines in Real Return and Multi-Asset Capital Stability. Both funds were negatively affected by the mid-2013 volatility in global fixed-income markets, and weakness in Treasury Inflation-Protected Securities (TIPS).

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused strategy pc short term strategy1
Stability-Focused Strategy ›PC Short Term Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

stability focused strategy pc defensive strategy
Stability-Focused Strategy ›PC Defensive Strategy

Manager changes during the quarter:

- QS Investors added to Multi-Asset Inflation Managed

Fund Highlight: U.S. Fixed Income

Three of SEI’s stability-focused strategies employ the U.S. Fixed Income fund. The fund’s first-quarter gain of nearly 2% had a positive impact on strategy performance. Longer-term absolute and relative returns have also been favorable.

The fund remains positioned in anticipation of a gradual trending toward higher interest rates, with a somewhat shorter duration than the benchmark. SEI believes that spread sectors generally offer the best opportunities within the fixed-income universe, and that actively managing these exposures is vital, given the key role that security selection is expected to play in driving performance.

Strategy Themes

  • During the quarter, the portfolio benefited most from its equity, high yield, and intermediate-term fixed-income exposure. In particular, U.S. and Global Managed Volatility, High Yield, and Multi-Asset Income were the strongest performers. Short-Duration Government and funds offering TIPS exposure lagged but still generated marginally positive returns.
  • For the trailing 1-year period, the strategy’s diversified approach also proved advantageous, as its equity (U.S. and Global Managed Volatility), high yield, and diversified income (Multi-Asset Income) components served to offset weakness within fixed income (particularly Treasury Inflation-Protected Securities, or TIPS) and commodities.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused strategy pc defensive strategy1
Stability-Focused Strategy ›PC Defensive Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

defensive strategy asset allocation changes
Defensive Strategy ›Asset Allocation Changes

Allocations were primarily modified to:

Shorten duration — As a tapering of the Fed’s quantitative easing program comes to fruition, a shorter-duration profile across the strategies is sought to aid in mitigating the impact of a rising interest rate environment.

  • Implementation primarily involved an increase to the Short-Duration Government Fund and decreases to the Real Return Fund and U.S. Fixed Income Fund.
stability focused strategy pc conservative strategy
Stability-Focused Strategy ›PC Conservative Strategy

Manager changes during the quarter:

- QS Investors added to Multi-Asset Inflation Managed

Fund Highlight: U.S. Fixed Income

Three of SEI’s stability-focused strategies employ the U.S. Fixed Income fund. The fund’s first-quarter gain of nearly 2% had a positive impact on strategy performance. Longer-term absolute and relative returns have also been favorable.

The fund remains positioned in anticipation of a gradual trending toward higher interest rates, with a somewhat shorter duration than the benchmark. SEI believes that spread sectors generally offer the best opportunities within the fixed-income universe, and that actively managing these exposures is vital, given the key role that security selection is expected to play in driving performance.

Strategy Themes

  • During the quarter, the portfolio benefited most from its equity, high yield, and intermediate-term fixed-income exposure. In particular, U.S. and Global Managed Volatility, High Yield, and Multi-Asset Income were the strongest performers. Short-duration fixed-income funds and those offering TIPS exposure lagged but still generated marginally positive returns.
  • For the trailing 1-year period, the strategy’s diversified approach also proved advantageous, as its equity (U.S. and Global Managed Volatility), high yield, diversified income (Multi-Asset Income), and alternatives components served to offset weakness within fixed income (particularly Treasury Inflation-Protected Securities, or TIPS) and commodities.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused strategy pc conservative strategy1
Stability-Focused Strategy ›PC Conservative Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

conservative strategy asset allocation changes
Conservative Strategy ›Asset Allocation Changes

Allocations were primarily modified to:

Shorten duration — As a tapering of the Fed’s quantitative easing program comes to fruition, a shorter-duration profile across the strategies is sought to aid in mitigating the impact of a rising interest rate environment.

  • Implementation primarily involved an increase to the Short-Duration Government Fund and decreases to the Real Return Fund and U.S. Fixed Income Fund.

Increase emerging-market debt exposure — We believe the improved quality in the asset class makes for a more suitable investment across a broader range of risk-tolerance levels. In addition, with its diversified exposure to a basket of emerging-market currencies, the asset class is less exposed to the movements in U.S. interest rates, providing a decoupled source of yield.

  • Implementation primarily involves the increase of the Emerging Market Debt Fund, with a decrease to developed U.S. fixed income or equity depending on the risk level of the strategy.
stability focused strategy pc moderate strategy
Stability-Focused Strategy ›PC Moderate Strategy

Manager changes during the quarter:

- QS Investors added to Multi-Asset Inflation Managed

Fund Highlight: U.S. Fixed Income

Three of SEI’s stability-focused strategies employ the U.S. Fixed Income fund. The fund’s first-quarter gain of nearly 2% had a positive impact on strategy performance. Longer-term absolute and relative returns have also been favorable.

The fund remains positioned in anticipation of a gradual trending toward higher interest rates, with a somewhat shorter duration than the benchmark. SEI believes that spread sectors generally offer the best opportunities within the fixed-income universe, and that actively managing these exposures is vital, given the key role that security selection is expected to play in driving performance.

Strategy Themes

  • During the quarter, the portfolio benefited from its equity, high yield, and risk parity exposure. In particular, U.S. and Global Managed Volatility, Multi-Asset Accumulation, and High Yield were the strongest performers. Short-Duration Government and funds offering TIPS exposure lagged but still generated marginally positive returns.
  • For the trailing 1-year period, the strategy’s diversified approach also proved somewhat advantageous, as its equity (Large Cap, U.S. and Global Managed Volatility), high yield, and alternative components served to offset weakness within fixed income (especially emerging markets debt and Treasury Inflation-Protected Securities, or TIPS) and commodities.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused strategy pc moderate strategy1
Stability-Focused Strategy ›PC Moderate Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

moderate strategy asset allocation changes
Moderate Strategy ›Asset Allocation Changes

Allocations were primarily modified to:

Add Multi-Asset Income — Due to its differentiated approach from traditional bonds in sourcing income, we expect that adding the fund will reduce overall sensitivity (beta) to fixed income within the Strategies, effectively minimizing an investor’s exposure to some of the uncertainty surrounding the fixed-income market.

  • Implementation primarily involved an increase to the Multi-Asset Income Fund and decreases to a diversified mix of fixed income and equity.
multi asset income fund
Multi-Asset Income Fund
      • The Multi-Asset Income Fund is now held in five of the non-Tax-Managed Private Client strategies, following the recent strategic allocation changes.
  • The fund utilizes a differentiated, non-benchmark-constrained, “go-anywhere” tactical approach, investing in a broad range of income-producing securities. In addition to opportunistically managing credit and liquidity risk, the fund also seeks to actively manage interest-rate risk.
  • In a frequently challenging environment for fixed-income investing, the fund has delivered positive returns for the first quarter, trailing year, and since-inception (4/9/2012) period of 2.7%, 5.2%, and 9.7% (annualized), respectively.
  • The fund’s performance has held up particularly well on days in which interest rates have risen most and fixed-income markets have been stressed.

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. As of 3/31/2014 and subject to change.

growth focused strategy pc core market strategy
Growth-Focused Strategy ›PC Core Market Strategy

1%

Manager changes during the quarter:

- QS Investors added to Multi-Asset Inflation Managed

Fund Highlights: Large Cap and Small Cap

SEI’s growth-focused strategies employ both the Large Cap and Small Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy benefited from its diversified approach during the first quarter, as performance was driven by solid gains in Multi-Asset Accumulation, High Yield, and Emerging Markets Debt. Emerging Markets Equity was the only fund within the model to experience a quarterly decline.
  • Trailing 1-year strategy performance benefited from strong returns in Small Cap, Large Cap, and International Equity; but was constrained by weakness in Emerging Markets Debt and Equity, Multi-Asset Inflation, and U.S. Fixed Income.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc core market strategy1
Growth-Focused Strategy ›PC Core Market Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

core market strategy asset allocation changes
Core Market Strategy ›Asset Allocation Changes

Allocations were primarily modified to:

Add Multi-Asset Income — Due to its differentiated approach from traditional bonds in sourcing income, we expect that adding the fund will reduce overall sensitivity (beta) to fixed income within the Strategies, effectively minimizing an investor’s exposure to some of the uncertainty surrounding the fixed-income market.

  • Implementation primarily involved an increase to the Multi-Asset Income Fund and decreases to a diversified mix of fixed income and equity.

Increase emerging-market debt exposure — We believe the improved quality in the asset class makes for a more suitable investment across a broader range of risk-tolerance levels. In addition, with its diversified exposure to a basket of emerging-market currencies, the asset class is less exposed to the movements in U.S. interest rates, providing a decoupled source of yield.

  • Implementation primarily involves the increase of the Emerging Market Debt Fund, with a decrease to developed U.S. fixed income or equity depending on the risk level of the strategy.
growth focused strategy pc market growth strategy
Growth-Focused Strategy ›PC Market Growth Strategy

1%

Manager changes during the quarter:

- QS Investors added to Multi-Asset Inflation Managed

Fund Highlights: Large Cap and Small Cap

SEI’s growth-focused strategies employ both the Large Cap and Small Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy benefited from its diversified approach during the first quarter, as performance was driven by solid gains in Multi-Asset Accumulation, High Yield, and Emerging Markets Debt. Emerging Markets Equity was the only fund within the model to experience a quarterly decline.
  • Trailing 1-year strategy performance benefited from strong returns in Small Cap, Large Cap, and International Equity; but was constrained by weakness in Emerging Markets Debt and Equity, Multi-Asset Inflation, and U.S. Fixed Income.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc market growth strategy1
Growth-Focused Strategy ›PC Market Growth Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

market growth strategy asset allocation changes
Market Growth Strategy ›Asset Allocation Changes

Allocations were primarily modified to:

Add Multi-Asset Income — Due to its differentiated approach from traditional bonds in sourcing income, we expect that adding the fund will reduce overall sensitivity (beta) to fixed income within the Strategies, effectively minimizing an investor’s exposure to some of the uncertainty surrounding the fixed-income market.

  • Implementation primarily involved an increase to the Multi-Asset Income Fund and decreases to a diversified mix of fixed income and equity.
growth focused strategy pc aggressive strategy
Growth-Focused Strategy ›PC Aggressive Strategy

1%

Fund Highlights: Large Cap and Small Cap

SEI’s growth-focused strategies employ both the Large Cap and Small Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy benefited from its diversified approach during the first quarter, as performance was driven by solid gains in Multi-Asset Accumulation, High Yield, and Emerging Markets Debt. Emerging Markets Equity was the only fund within the model to experience a quarterly decline.
  • Trailing 1-year strategy performance benefited from strong returns in Small Cap, Large Cap, and International Equity; but was constrained by weakness in Emerging Markets Debt and Equity, and a marginally positive gain for Multi-Asset Accumulation.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc aggressive strategy1
Growth-Focused Strategy ›PC Aggressive Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

aggressive strategy asset allocation changes
Aggressive Strategy ›Asset Allocation Changes

Allocations were primarily modified to:

Increase emerging-market debt exposure — We believe the improved quality in the asset class makes for a more suitable investment across a broader range of risk-tolerance levels. In addition, with its diversified exposure to a basket of emerging-market currencies, the asset class is less exposed to the movements in U.S. interest rates, providing a decoupled source of yield.

  • Implementation primarily involves the increase of the Emerging Market Debt Fund, with a decrease to developed U.S. fixed income or equity depending on the risk level of the strategy.

Increase emerging-market equity exposure — As the recovery in the developed market matures, we expect the growth in emerging markets to return to the long-term trend. Based on our research, we believe that an increase in emerging-market equity exposure should provide more consistent results across different economic environments, enhancing overall diversification.

  • Implementation primarily involved an increase to the Emerging Market Equity Fund and decrease to the Large Cap Fund.
growth focused strategy pc equity strategy
Growth-Focused Strategy ›PC Equity Strategy

1%

Fund Highlights: Large Cap and Small Cap

SEI’s growth-focused strategies employ both the Large Cap and Small Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy’s first-quarter return was driven by gains in Large Cap and Small Cap. International Equity’s performance was marginally positive, while Emerging Markets Equity declined during the quarter.
  • Trailing 1-year strategy performance benefited from strong returns in Small Cap and Large Cap, and a more muted but still solid gain in International Equity. Emerging Markets Equity’s slight decrease over the period had a negative impact on returns.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc equity strategy1
Growth-Focused Strategy ›PC Equity Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

equity strategy asset allocation changes
Equity Strategy ›Asset Allocation Changes

Allocations were primarily modified to:

Increase emerging-market equity exposure — As the recovery in the developed market matures, we expect the growth in emerging markets to return to the long-term trend. Based on our research, we believe that an increase in emerging-market equity exposure should provide more consistent results across different economic environments, enhancing overall diversification.

  • Implementation primarily involved an increase to the Emerging Market Equity Fund and decrease to the Large Cap Fund.

Increase small-cap exposure — Based on our research, an increased weight to U.S. small-cap equity providing greater diversification benefits in a global equity strategy, since small-cap equities have less exposure than U.S. large-cap equities to global market cycles.

  • Implementation primarily involved an increase to the Small Cap Fund and decreases to the Large Cap Fund.
multi asset accumulation fund
Multi-Asset Accumulation Fund
  • The Multi-Asset Accumulation Fund is held in four of the non-tax-managed Private Client strategies, with the goal of decreasing the reliance on equity beta as the primary driver of portfolio risk and return.
  • The fund seeks long-term growth across a variety of economic and market conditions by offering very diversified global market exposures that are balanced on the basis of volatility levels rather than capital weightings.
  • The fund benefited from its diversified approach during the first quarter, returning 3.5% and exceeding its blended benchmark* by nearly 200 basis points.
  • In contrast to calendar 2013, commodities and global fixed-income exposure had the largest positive impact on the fund’s performance, while global equities made a smaller contribution.  The fund holds a slight overweight allocation (versus its 40% strategic target) to Global Equities, on a risk-weighted basis.

*60% MSCI World Equity Index (Hedged) / 40% Barclays Global Aggregate Bond Index (Hedged)

Source: SEI, Factset, BlackRock. Past performance is no guarantee of future results. 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. Asset allocation as of 3/31/2014 and subject to change.

stability focused strategy pc tax managed short term strategy
Stability-Focused Strategy › PC Tax-Managed Short Term Strategy

Fund Highlight: Short Duration Municipal

All four of SEI’s tax-managed stability-focused strategies employ the Short Duration Municipal fund. The fund achieved slightly positive returns for both the first quarter and the trailing one-year period; consistent with its focus on capital preservation, the fund has never experienced a calendar year decline since its November 2003 inception.

The fund holds nearly 70% of its portfolio in revenue bonds, as managers continue to see greater relative value there than in the general obligation and pre-refunded sectors.  Currently, the fund’s duration is about 25% shorter than that of its benchmark.

Strategy Themes

  • The strategy delivered a slightly positive quarterly return, reflecting stabilization of shorter duration U.S. fixed-income securities and the continuation of near-zero cash yields. Each component fund rose during the quarter, with Intermediate-Term Municipal showing the largest gain.
  • Trailing 1-year returns were marginally positive, driven by a slight gain in Short Duration Municipal. The strategy was able to overcome headwinds created by the mid-2013 volatility in global fixed-income markets, as well as uncertainties about the potential future tax treatment of municipal securities and concerns about the creditworthiness of certain headline cities and regions.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused pc tax managed short term strategy
Stability-Focused ›PC Tax-Managed Short Term Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

stability focused strategy pc tax managed defensive strategy
Stability-Focused Strategy ›PC Tax-Managed Defensive Strategy

Fund Highlight: Short Duration Municipal

All four of SEI’s tax-managed stability-focused strategies employ the Short Duration Municipal fund. The fund achieved slightly positive returns for both the first quarter and the trailing one-year period; consistent with its focus on capital preservation, the fund has never experienced a calendar year decline since its November 2003 inception.

The fund holds nearly 70% of its portfolio in revenue bonds, as managers continue to see greater relative value there than in the general obligation and pre-refunded sectors.  Currently, the fund’s duration is about 25% shorter than that of its benchmark.

Strategy Themes

  • During the quarter, the portfolio benefited most from its high-yield and equity exposure. In particular, Tax-Advantaged Income (high-yield municipal securities and preferred stocks) and Tax-Managed Managed Volatility were the strongest performers, while Short Duration Municipal lagged.
  • For the trailing 1-year period, the strategy’s diversified approach also proved somewhat advantageous, as its equity component (Tax-Managed Managed Volatility) served to offset weakness in Intermediate-Term Municipal and Tax-Advantaged Income.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused pc tax managed defensive strategy
Stability-Focused ›PC Tax-Managed Defensive Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

stability focused strategy pc tax managed conservative strategy
Stability-Focused Strategy ›PC Tax-Managed Conservative Strategy

Fund Highlight: Short Duration Municipal

All four of SEI’s tax-managed stability-focused strategies employ the Short Duration Municipal fund. The fund achieved slightly positive returns for both the first quarter and the trailing one-year period; consistent with its focus on capital preservation, the fund has never experienced a calendar year decline since its November 2003 inception.

The fund holds nearly 70% of its portfolio in revenue bonds, as managers continue to see greater relative value there than in the general obligation and pre-refunded sectors.  Currently, the fund’s duration is about 25% shorter than that of its benchmark.

Strategy Themes

  • During the quarter, the portfolio benefited most from its high-yield and equity exposure. In particular, Tax-Advantaged Income (high-yield municipal securities and preferred stocks) and Tax-Managed Managed Volatility were the strongest performers, while Short Duration Municipal lagged.
  • For the trailing 1-year period, the strategy’s diversified approach also proved somewhat advantageous, as its equity components (Tax-Managed Large Cap and Tax-Managed Managed Volatility) served to offset weakness in Intermediate-Term Municipal and Tax-Advantaged Income.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused strategy pc tax managed conservative strategy1
Stability-Focused Strategy ›PC Tax-Managed Conservative Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

stability focused strategy pc tax managed moderate strategy
Stability-Focused Strategy ›PC Tax-Managed Moderate Strategy

Fund Highlight: Short Duration Municipal

All four of SEI’s tax-managed stability-focused strategies employ the Short Duration Municipal fund. The fund achieved slightly positive returns for both the first quarter and the trailing one-year period; consistent with its focus on capital preservation, the fund has never experienced a calendar year decline since its November 2003 inception.

The fund holds nearly 70% of its portfolio in revenue bonds, as managers continue to see greater relative value there than in the general obligation and pre-refunded sectors.  Currently, the fund’s duration is about 25% shorter than that of its benchmark.

Strategy Themes

  • During the quarter, the portfolio benefited most from its high-yield and domestic equity exposure. In particular, Tax-Advantaged Income (high-yield municipal securities and preferred stocks) and Tax-Managed Managed Volatility were the strongest performers, while Short Duration Municipal and International Equity lagged.
  • For the trailing 1-year period, the strategy’s diversified approach also proved somewhat advantageous, as its U.S. and international equity components served to offset weakness in Intermediate-Term Municipal and Tax-Advantaged Income.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

stability focused strategy pc tax managed moderate strategy1
Stability-Focused Strategy ›PC Tax-Managed Moderate Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

growth focused strategy pc tax managed core market strategy
Growth-Focused Strategy ›PC Tax-Managed Core Market Strategy

Fund Highlights: Tax-Managed Large Cap and Small/Mid Cap

SEI’s tax-managed growth-focused strategies use both the Large Cap and Small/Mid Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small/Mid Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy benefited from its diversified approach during the first quarter, as performance was driven mainly by solid gains in Tax-Advantaged Income (high-yield municipal securities and preferred stocks), Intermediate Term Municipal, and Emerging Markets Debt. Emerging Markets Equity was the only fund within the model to experience a quarterly decline.
  • Trailing 1-year strategy performance benefited from strong returns in Small/Mid Cap, Large Cap, and International Equity; but was constrained by weakness in Emerging Markets Debt and Equity, and Intermediate Term Municipal.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc tax managed core market strategy1
Growth-Focused Strategy ›PC Tax-Managed Core Market Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

growth focused strategy pc tax managed market growth strategy
Growth-Focused Strategy ›PC Tax-Managed Market Growth Strategy

Fund Highlights: Tax-Managed Large Cap and Small/Mid Cap

SEI’s tax-managed growth-focused strategies use both the Large Cap and Small/Mid Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small/Mid Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy benefited from its diversified approach during the first quarter, as performance was driven mainly by solid gains in Tax-Advantaged Income (high-yield municipal securities and preferred stocks), Intermediate Term Municipal, and Emerging Markets Debt. Emerging Markets Equity was the only fund within the model to experience a quarterly decline.
  • Trailing 1-year strategy performance benefited from strong returns in Small/Mid Cap, Large Cap, and International Equity; but was constrained by weakness in Emerging Markets Debt and Equity, and Intermediate Term Municipal.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc tax managed market growth strategy1
Growth-Focused Strategy ›PC Tax-Managed Market Growth Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

growth focused strategy pc tax managed aggressive strategy
Growth-Focused Strategy ›PC Tax-Managed Aggressive Strategy

Fund Highlights: Tax-Managed Large Cap and Small/Mid Cap

SEI’s tax-managed growth-focused strategies use both the Large Cap and Small/Mid Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small/Mid Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy benefited from its diversified approach during the first quarter, as performance was driven mainly by solid gains in Tax-Advantaged Income (high-yield municipal securities and preferred stocks), Small/Mid Cap, and Emerging Markets Debt. Emerging Markets Equity was the only fund within the model to experience a quarterly decline.
  • Trailing 1-year strategy performance benefited from strong returns in Small/Mid Cap and Large Cap, and a more muted but still solid gain in International Equity; but was constrained by weakness in Emerging Markets Debt and Equity, and Tax-Advantaged Income.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc tax managed aggressive strategy1
Growth-Focused Strategy ›PC Tax-Managed Aggressive Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

growth focused strategy pc tax managed equity strategy
Growth-Focused Strategy ›PC Tax-Managed Equity Strategy

Fund Highlights: Tax-Managed Large Cap and Small/Mid Cap

SEI’s tax-managed growth-focused strategies use both the Large Cap and Small/Mid Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small/Mid Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy’s first-quarter return was driven by gains in Small/Mid Cap and Large Cap. International Equity’s performance was marginally positive, while Emerging Markets Equity declined during the quarter.
  • Trailing 1-year strategy performance benefited from strong returns in Small/Mid Cap and Large Cap, as well as a more muted but still solid gain in International Equity. Emerging Markets Equity’s slight decrease over the period had a negative impact on returns.

Sources: SEI, FactSet. Returns are net of fees, selected Private Client Strategies.

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. Asset allocation as of 3/31/2014 and subject to change.

growth focused strategy pc tax managed equity strategy1
Growth-Focused Strategy ›PC Tax-Managed Equity Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

institutional strategy capital growth
Institutional Strategy ›Capital Growth

1%

Fund Highlight: Core Fixed Income

Five of SEI’s institutional strategies employ the Core Fixed Income fund. The fund’s first quarter gain of 2.25% had a positive impact on strategy performance. Longer-term absolute and relative returns have also been very favorable.

The fund remains positioned in anticipation of a gradual trending toward higher interest rates, with a somewhat shorter duration than the benchmark. SEI believes that spread sectors generally offer the best opportunities within the fixed-income universe, and that actively managing these exposures is vital, given the key role that security selection is expected to play in driving performance.

Strategy Themes

  • The strategy benefited from its diversified approach during the first quarter, as performance was driven by solid gains in Large Cap Value, High Yield, Emerging Markets Debt, and Core Fixed Income. Emerging Markets Equity was the only fund within the model to experience a quarterly decline.
  • Trailing 1-year strategy performance benefited from strong returns in U.S. equities (especially Small Cap Growth and Large Cap Value) and International Equity; but was constrained by weakness in Emerging Markets Debt and Equity, and Core Fixed Income.

Sources: SEI, FactSet. Returns are 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. Asset allocation as of 3/31/2014 and subject to change.

institutional strategy capital growth strategy
Institutional Strategy ›Capital Growth Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

tax sensitive strategy ts 100
Tax Sensitive Strategy ›TS 100

Fund Highlights: Tax-Managed Large Cap and Small/Mid Cap

SEI’s tax-managed growth-focused strategies use both the Large Cap and Small/Mid Cap funds. The strategies benefited from each fund’s positive 1st quarter and strong trailing 1-year returns.

During the quarter, relative performance for each fund was driven mainly by stock selection. Large Cap continues to position away from deep cyclical and defensive sectors in favor of quality growth; while Small/Mid Cap remains mildly pro-cyclical with a tilt towards quality companies and attractive valuations.

Strategy Themes

  • The strategy’s first-quarter return was driven by gains in Small/Mid Cap and Large Cap. International Equity’s performance was marginally positive, while Emerging Markets Equity declined during the quarter.
  • Trailing 1-year strategy performance benefited from strong returns in Small/Mid Cap and Large Cap, as well as a more muted but still solid gain in International Equity. Emerging Markets Equity’s slight decrease over the period had a negative impact on returns.

Sources: SEI, FactSet. Returns are 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. Asset allocation as of 3/31/2014 and subject to change.

tax sensitive strategy ts 100 strategy
Tax Sensitive Strategy ›TS 100 Strategy

Asset allocation as of 3/31/14 and subject to change. Securities as of 2/28/14 and subject to change.

stocks stumbled out of the gate but then hit their stride
Stocks Stumbled Out of the Gate, But Then Hit Their Stride
  • Equities have turned a bit more volatile this year in response to disruptive weather, the invasion of the Crimean peninsula and longer run emerging-market worries.
  • Even so, following a brief dip in the latter part of January, global stocks bounced higher with the U.S. leading.
  • The ability of equities in developed markets to quickly overcome periodic stumbles underscores investors’ willingness to assume risk even when economic and geopolitical uncertainties are on the rise.
    • In our view, the rotation out of cash and fixed-income assets and into stocks is still very much in play.
  • The yields on Treasury and investment-grade corporate bonds remain low relative to their own history and to inflation.
  • We continue to expect more volatile assets (equities, high-yield debt and emerging-market debt) to outperform less volatile ones.

Index returns are for illustrative purposes only and do not represent actual fund performance.

Index performance returns do not reflect any management fees, transaction costs or expenses.

Indexes are unmanaged and one cannot invest directly in an index. Past performance does not

guarantee future results.

surprise surprise the economy turns cold
Surprise, Surprise: The Economy Turns Cold
  • With some help from poor weather, Citigroup’s Economic Surprise Index turned sharply lower beginning in January, hitting its lowest point in almost 20 months.
    • The persistent trend in this measure coincides with a string of poor economic outcomes.
  • The Chicago Federal Reserve National Economic Activity Index, a composite of 85 monthly indicators, suggests that the U.S. economy was tracking below trend during the first quarter.
  • Some economists worry that there’s more underlying weakness than can be explained by weather alone.
  • Although that’s a minority view, we share in the frustration that the recovery from one of the deepest recessions remains one of the weakest.
real gdp better not great
Real GDP: Better, Not Great
  • Since the recession’s bottom in the second quarter of 2009, U.S. inflation-adjusted gross domestic product (GDP) has advanced at a meager 2.3% annual rate.
  • The U.S. economic expansions that followed the recessions of 1973 to 1975 and 1981 to 1982 were more than twice as strong as the current one this far into the upturn.
  • The saddest fact is that this lackluster performance since the start of the recovery in mid-2009 looks downright stellar compared against those of the other major developed economies.
  • Both the U.K. and Japan have recorded a decent improvement in GDP over the past year, closer to the U.S. experience and much better than that of the eurozone.
bottom lines go in different directions
Bottom Lines Go in Different Directions
  • Earnings have been solid in the U.S. and Japan, and they are expected to gain traction elsewhere this year.
  • Forward-looking estimates of U.S. company earnings per share (EPS) continue to move ahead into new-high territory, with the latest EPS forecasts more than 20% above the 2008 peak.
  • Companies in the U.K. have not benefited very much from the rather vibrant economic recovery—underscoring the importance of global economic conditions to U.K. companies’ bottom lines.
  • Within the eurozone, analysts’ EPS forecasts have been in a narrow range since mid-2012, although one can argue that this is an improvement in itself versus the declines sustained in 2008 and 2011.
  • In contrast, Japan’s expected earnings trend has been enjoying a sharp rebound since 2012, benefiting from the yen’s decline, quantitative easing and Prime Minster Abe’s fiscal stimulus measures.
not much economic dread in today s yield curve spread
Not Much Economic Dread in Today’s Yield Curve Spread
  • The yield curve spread between 2-year and 10-year U.S. Treasurys is likely to flatten over time as the Federal Reserve shifts away from its ultra-loose policy position.
  • However, given the extreme starting point with 2-year notes some 230 basis points below 10-year bonds, the curve will likely remain rather steep through 2015.
  • Recessions usually begin a year or two after the yield curve flattens and inverts, since an inverted curve is symptomatic of tight liquidity and corporate financial stress.
  • As a result, it appears too early for markets to discount a cyclical downturn.
  • We expect bond yields to drift upward through 2014, with the yield on the Treasury 10-year bond reaching 3.25% to 3.50% by the end of the year.
  • The first Federal funds rate hike could occur as early as mid-2015.
cape in hand
CAPE in Hand
  • The U.S. is among the more expensive stock markets in the world today. Yet the market’s price/earnings ratio and other metrics of value appear well within the historical norm.
  • This is especially so against the fundamental backdrop of very low interest rates, a still-expansionary monetary policy and further improvement in economic growth and corporate profitability.
  • The cyclically adjusted price/earnings ratio (CAPE), however, measures the current level of the S&P 500 Price Index at 25 times its average reported earnings over the previous 10 years. This does indeed look extended versus most time periods.
  • Although there is a strong inverse correlation between the level of the CAPE and future stock market performance, the consistency of those outcomes are much higher when the time horizon is expanded to five and ten years. It’s a mistake to forecast equity performance over a one- or two-year time frame using this statistic.
periphery yields plunge
Periphery Yields Plunge…
  • The eurozone is enjoying its best economic performance since 2010 as gross domestic product has turned modestly positive on consumptions gains.
  • Investor sentiment has improved in stunning fashion, and periphery bond yields have fallen sharply—both in absolute terms and relative to German bunds.
  • The huge declines in periphery yields reflect:
    • An improvement in fiscal positions, with some countries now running primary fiscal surpluses (i.e. before interest payments on the debt).
    • The elimination of the risk of a currency breakup.
    • Some crossover demand as investors move away from emerging markets.
    • Falling inflation through the eurozone, with the periphery countries either near a zero price change over the past year or experiencing outright deflation.
  • Despite this, we still believe that the region is a fair distance away from a sustained expansion.
but periphery debt doesn t
…But Periphery Debt Doesn’t
  • Debt burdens remain near their peak levels in Europe; this is especially true in the periphery, where recession and price deflation have increased the real debt burden.
  • We are keeping a close eye on eurozoneinflation rates. The steady decline in non-periphery core-country consumer price indexes to a pace well below the European Central Bank 2% target is worrisome.
  • Deflation in the periphery countries only serves to impede their recovery.
  • The health of the European banking system is still in question. Lending to businesses and households continues to be quite weak, although lending standards have eased somewhat in recent quarters.
  • This year’s Asset Quality Review and stress testing of major and mid-tier European banks will likely constrain lending to households and corporations in the coming months.
labor s love lost
Labor’s Love Lost
  • Growth in the region will almost certainly continue to be subpar.
  • Industrial output is improving noticeably in Germany, but appears to be flat-lining elsewhere.
  • Recovery in the labor markets is virtually non-existent. At 12%, the overall eurozone unemployment rate remains stuck near its cyclical high.
  • We continue to believe that the European Central Bank’s (ECB) reluctance to counteract the decline in its balance sheet threatens to worsen the disinflationary impact of the rising euro.
  • We anticipate the ECB will become incrementally more expansive in order to provide relief to the banking system and stanch the downward pressure on inflation.
crimea and punishment
Crimea and Punishment
  • In emerging markets, both political and economic factors have reduced our conviction that their value will be realized quickly.
  • The obvious political factor is Russia’s invasion of Crimea, which led to economic sanctions from the U.S. and its allies.
  • While there are questions about how painful and effective those sanctions will be, foreign investors have been quicker and more aggressive in delivering punishment.
    • The Russian stock market and currency have fallen sharply, although the ruble started to slide well before the invasion of Crimea.
    • The ruble’s value is now lower than it was during the 2008 financial crisis—a time when oil prices also plunged.
  • Since the Russian stock market accounts for 6% of the MSCI Emerging Market Index, prolonged weakness in Russian equities and the ruble would act as an important headwind impeding overall emerging-market equity performance.

Index returns are for illustrative purposes only and do not represent actual fund performance.

Index performance returns do not reflect any management fees, transaction costs or expenses.

Indexes are unmanaged and one cannot invest directly in an index. Past performance does not

guarantee future results.

summing up
Summing Up
  • Geopolitical concerns and a further easing of inflation pressures around the globe should keep global monetary policies accommodative.
  • Although we think the Federal Reserve will remain dovish, we expect some firming of bond yields by year end—a more normal relationship vis-à-vis expected inflation.
  • Overall, we continue to expect more volatile assets (equities, high-yield debt and emerging-market debt) to outperform less volatile ones.
  • In equities, while momentum (as opposed to value) has worked best, we are mindful that it can become dangerous as participants crowd into the same trade and leverage up in an effort to improve returns.
  • The surge in margin debt as a percentage of equity market capitalization is an early warning sign that we think merits monitoring.
sei performance summary fixed income mutual funds as of 3 31 2014
SEI performance summary Fixed-income mutual funds – as of 3/31/2014

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 equity mutual funds as of 3 31 2014
SEI performance summary Equity mutual funds – as of 3/31/2014

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 equity mutual funds as of 3 31 2014 continued
SEI performance summary Equity mutual funds – as of 3/31/2014 (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 multi asset mutual funds as of 3 31 2014
SEI performance summaryMulti-asset mutual funds – as of 3/31/2014

Blended Benchmarks include: Accumulation (40% Barclays Global Aggregate Hdg index; 60% MSCI World Hdg Index), Capital Stability (95% Barclays 1-3yr U.S. Govt/Credit Index; 5% S&P 500 Index), Income (45% Barclays U.S. Aggregate Bond Index; 40% BofAML High Yield Master Constrained Index; 15% S&P 500 Index), Inflation Managed (70% Barclays TIPS 1-5yr; 30% MSCI ACWI Commodity Producers Index)

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 as of 3 31 2014
SEI annualized performance summaryFixed-income mutual funds – as of 3/31/2014

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 and may be discontinued at any time. Source: SEI Datamart

sei annualized performance summary equity mutual funds as of 3 31 2014
SEI annualized performance summaryEquity mutual funds – as of 3/31/2014

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 and may be discontinued at any time. Source: SEI Datamart

sei annualized performance summary equity mutual funds as of 3 31 2014 continued
SEI annualized performance summaryEquity mutual funds – as of 3/31/2014 (continued)

(1) After taxes on distributions of dividends and capital gains**

(2) 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 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. 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 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 and may be discontinued at any time. Source: SEI Datamart

sei annualized performance summary multi asset mutual funds as of 3 31 2014
SEI annualized performance summaryMulti-asset mutual funds – as of 3/31/2014

Blended Benchmarks include: Accumulation (40% Barclays Global Aggregate Hdg index; 60% MSCI World Hdg Index), Capital Stability (95% Barclays 1-3yr U.S. Govt/Credit Index; 5% S&P 500 Index), Income (45% Barclays U.S. Aggregate Bond Index; 40% BofAML High Yield Master Constrained Index; 15% S&P 500 Index), Inflation Managed (70% Barclays TIPS 1-5yr; 30% MSCI ACWI Commodity Producers Index)

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 and may be discontinued at any time. Source: SEI Datamart

sei annualized performance summary money market funds as of 3 31 2014
SEI annualized performance summaryMoney market funds – as of 3/31/2014

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 share, it is possible to lose money by investing in the Fund.

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. Fee waivers are voluntary and may be discontinued at any time. Source: SEI Datamart.

goals based performance as of 3 31 2014 private client strategies
Goals-based performance – as of 3/31/2014Private Client Strategies

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.  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. Fee waivers are voluntary and may be discontinued at any time. Source: SEI Datamart.

tax managed goals based performance as of 3 31 2014 private client strategies
Tax-managed goals-based performance – as of 3/31/2014Private Client Strategies

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.  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. Fee waivers are voluntary and may be discontinued at any time. Source: SEI Datamart.

institutional performance as of 3 31 2014
Institutional performance – as of 3/31/2014

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.  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. Fee waivers are voluntary and may be discontinued at any time. Source: SEI Datamart.

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 index 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 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 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.
  • 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.
index definitions1
Index Definitions
  • The BofA Merrill Lynch US 3-Month Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
  • BofA Merrill Lynch Preferred Stock Fixed is designed to replicate the total return of a diversified group of investment-grade preferred securities.
  • Barclays Capital US Treasury Index is an unmanaged index of public obligations of the U.S. Treasury with a remaining maturity of one year or more.
  • Barclays Capital Municipal 3-15 Year Index is an unmanaged index considered representative of the tax-exempt bond market.
  • Barclays Capital High Yield Municipal Bond Index is an unmanaged index consisting of noninvestment-grade, unrated or below Ba1 bonds.
  • Barclays Capital Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.
  • Barclays Capital U.S. TIPS: 1-10 Year is an unmanaged index comprised of U.S. Treasury Inflation Protected securities having a maturity of at least 1 year and less than 10 years.
  • MSCI ACWI ex-US is a market-capitalization-weighted index designed to provide a broad measure of stock performance throughout the world, with the exception of U.S.-based companies.
  • The Russell 1000 Index includes 1000 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 2000 small-cap U.S. equity names and is used to measure the activity of the U.S. small-cap equity market.
  • 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 VIX, or Chicago Board Options Exchange Volatility Index, uses option prices on the S&P 500 to estimate the implied volatility of the S&P 500 Index over the next 30 days. Options are derivative contracts that give a buyer the right (and impose upon the seller an obligation, if called upon by the buyer) to buy or sell an underlying security at a specified price, usually for a specified period of time. A higher number indicates greater volatility and an increase in the VIX is often associated with higher risk aversion among investors. Common usage: The Chicago Board Options Exchange Volatility Index (VIX), a barometer of market volatility.
index definitions2
Index Definitions
  • Large Cap Core = Russell 1000 Index
  • International Equity = MSCI EAFE Index
  • Emerging Markets Equity = MSCI Emerging Markets Free Index
  • Core Fixed Income = Barclays Capital U.S. Aggregate Bond Index
  • REIT Index = DJ U.S. Select REIT Index
  • High Yield Bond = U.S. High Yield Master II Constrained Index
  • Emerging Market Debt = JP Morgan EMBI Global Index
  • International Fixed Income = Citigroup Bond WGBI Non-US Hedged Index
  • Large Cap Growth = Russell 1000 Growth Index
  • Large Cap Value = Russell 1000 Value Index
  • Small Cap Value = Russell 2000 Value Index
  • Small Cap Growth = Russell 2000 Growth Index
  • 60/40 Diversified Portfolio = Annual returns for the 60/40 diversified portfolio are based on 24% Barclays Capital U.S. Aggregate Bond Index, 19% Russell 1000 Growth, 18% Russell 1000 Value, 12% MSCI EAFE, 6% MSCI Emerging Market, 6% Citigroup WGBI, Non-US, Hedged 4% Merrill Lynch U.S. High Yield Master II Constrained, 4% J.P. Morgan EMBI Global, 3% Russell 2000 Growth, 2% Russell 2000 Value, and 2% Dow Jones DJ U.S. Select REIT Index.
  • Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha.
  • Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices.
  • Inflation beta is many percentage points the asset's total return rises or falls, on average, for each percentage point increase in inflation
disclosures
Disclosures

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. This information is for educational purposes only.

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.

There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. Diversification may not protect against market risk. There is no assurance the goals of the strategies discussed will be met.

International: 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.

Emerging Markets: Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.

Small-Cap: Narrowly focused investments and smaller companies typically exhibit higher volatility.

Bonds: Bonds and bond funds will decrease in value as interest rates rise.

High Yield Bonds: High yield bonds involve greater risks of default or downgrade and are more volatile than investment grade securities, due to the speculative nature of their investments.

Real Estate: In addition to the normal risks associated with investing, real estate and REIT investments are subject to changes in economic conditions, credit risk and interest rate fluctuations.

TIPS: TIPS can provide investors a hedge against inflation, as the inflation adjustment feature helps preserve the purchasing power of the investment. Because of this inflation adjustment feature, inflation protected bonds typically have lower yields than conventional fixed rate bonds.

Municipal Bonds: There is no guarantee that the Fund’s income will be exempt from federal or state income taxes. Capital gains, if any, are subject to capital gains tax. Bonds and bond funds will decrease in value as interest rates rise.

There is no guarantee that the Fund’s income will be exempt from federal or state income taxes. Capital gains, if any, are subject to capital gains tax. Bonds and bond funds will decrease in value as interest rates rise.

disclosures1
Disclosures

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.

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.

Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

To determine if the Funds are an appropriate investment for you, carefully consider the investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds’ full and summary prospectuses, which may be obtained by calling 1-800-DIAL-SEI. Read it carefully before investing.

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.

SEI Investments Management Corporation 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. Neither SEI nor its subsidiaries are affiliated with your financial advisor.