WILMINGTON TRUST COLLECTIVE INVESTMENT TRUST FUNDS SUB-ADVISED BY PIONEER INSTITUTIONAL ASSET MANAGEMENT, INC. FINANCIAL STATEMENTS DECEMBER 31, 2017

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1 WILMINGTON TRUST COLLECTIVE INVESTMENT TRUST FUNDS SUB-ADVISED BY PIONEER INSTITUTIONAL ASSET MANAGEMENT, INC. FINANCIAL STATEMENTS DECEMBER 31, 2017 WITH INDEPENDENT AUDITOR'S REPORT

2 CONTENTS Independent Auditor's Report... 1 Fund Index... 3 Pioneer Large Cap Growth Portfolio... 4 Pioneer Bond Fund Trust Notes to the Financial Statements... 13

3 INDEPENDENT AUDITOR'S REPORT Wilmington Trust, N.A, Trustee for Wilmington Trust Collective Investment Trust Report on the Financial Statements We have audited the accompanying financial statements of Pioneer Institutional Asset Management, Inc., subadvised funds of Wilmington Trust Collective Investment Trust (the "Trust"), which comprise the Statements of Assets and Liabilities, including the Schedules of Investments, as of, and the related Statements of Operations and Changes in Net Assets, and the Financial Highlights for the year then ended, or for the period then ended for inception dates in 2017, and the related Notes to the Financial Statements. These financial statements and Financial Highlights are hereinafter collectively referred to as financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each Fund as of, and the results of its operations, and changes in its net assets and its financial highlights for the year then ended, or period then ended for inception dates in 2017, in accordance with accounting principles generally accepted in the United States of America. 1

4 Other Matter Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information on investments purchased and sold for the year ended, or period then ended for inception dates in 2017, following the Schedule of Investments, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Tulsa, Oklahoma April 30,

5 Pioneer Institutional Asset Management, Inc.

6 FUND INDEX FUND NAME Pioneer Large Cap Growth Portfolio Pioneer Bond Fund Trust FUND OBJECTIVE The Fund seeks long-term growth of capital through investment principally in publicly-traded equity securities. The Fund seeks current income and total return. See Notes to the Financial Statements. 3

7 Pioneer Large Cap Growth Portfolio Statement of Assets and Liabilities Assets Investments in securities, at fair value (cost $134,546,240) $ 156,511,398 Accrued interest and dividends 77,482 Receivable for fund units sold 52,720 Total assets 156,641,600 Liabilities and Net Assets Accrued expenses 100,857 Net assets $ 156,540,743 Statement of Operations For the year ended Investment income Dividends $ 1,841,993 Interest 27,758 Total investment income 1,869,751 Expenses Trustee, administrative services and sub-advisory fees 336,771 Professional services and other operating expenses 6,588 Total expenses 343,359 Net investment income 1,526,392 Realized and unrealized gain on investments Net realized gain on investments 6,545,102 Net change in unrealized appreciation on investments 22,427,356 Net realized and unrealized gain on investments 28,972,458 In-kind transfer (see Note 5) (4,322,798) Net increase in net assets resulting from operations $ 26,176,052 See Notes to the Financial Statements. 4

8 Pioneer Large Cap Growth Portfolio Statement of Changes in Net Assets For the year ended Increase in net assets resulting from operations Net investment income $ 1,526,392 Net realized gain on investments 6,545,102 Net change in unrealized appreciation on investments 22,427,356 In-kind transfer (see Note 5) (4,322,798) Net increase in net assets resulting from operations 26,176,052 Fund unit transactions Proceeds from units issued Class 0TS 18,217,775 Class 0TS1 ^ 316,360 Class 0TS1 - In-kind transfer^ (see Note 5) 45,536,700 Class R 6,175,422 Class R1 9,679,454 Total proceeds from units issued 79,925,711 Value of units redeemed Class 0TS (1,221,072) Class 0TS1 ^ (21,111,577) Class R (6,643,740) Class R1 (8,738,292) Total value of units redeemed (37,714,681) Increase in net assets resulting from fund unit transactions 42,211,030 Increase in net assets 68,387,082 Net assets, beginning of year 88,153,661 Net assets, end of year $ 156,540,743 ^Class 0TS1 was funded with an in-kind transfer on 5/9/2017. See Notes to the Financial Statements. 5

9 Pioneer Large Cap Growth Portfolio Financial Highlights For the year ended Per Unit Operating Performance Class 0TS Class 0TS1 Class R Class R1 Net asset value, beginning of year or at inception $ $ ^ $ $ Income from investment operations: Net investment income (1) Net realized and unrealized gain on investments and in-kind transfer (1) Total loss from investment operations Net asset value, end of year $ $ $ $ Total Return 23.17% 10.34% ^ 23.46% 23.08% Supplemental Data Ratio to average net assets: Expenses 0.32% 0.30% # 0.10% 0.40% Net investment income 1.05% 1.19% # 1.26% 0.95% Fund Unit Activity Units, beginning of year 2,593,718-4,197,803 1,686,682 Issued 1,560,058 26, , ,105 In-kind transfer - 3,922, Redeemed (103,457) (1,746,417) (562,934) (765,453) Units, end of year 4,050,319 2,201,775 4,154,393 1,807,334 (1) Based on average units outstanding. ^Not annualized for periods less than one year. Class 0TS1 funded on 5/9/2017. #Annualized. See Notes to the Financial Statements. 6

10 Pioneer Large Cap Growth Portfolio Schedule of Investments Principal Amount or Fair Shares Cost Value Common Stocks % Basic Materials - 1.3% International Flavors & Fragrances 12,869 $ 1,627,541 $ 1,963,938 Communications % Alphabet Inc. Class C 9,964 7,721,547 10,426,330 CDW Corporation of Delaware 29,035 2,010,175 2,017,642 Time Warner Inc. 50,830 4,922,388 4,649,420 Total Communications 14,654,110 17,093,392 Consumer, Cyclical % Home Depot Inc. 40,007 5,763,238 7,582,527 O'Reilly Automotive Inc. 12,168 3,108,378 2,926,891 Ross Stores Inc. 55,025 3,737,539 4,415,756 Starbucks Corporation 51,110 2,945,957 2,935,247 Tractor Supply Company 22,520 1,631,432 1,683,370 Wal-Mart Stores, Inc. 30,188 2,982,245 2,981,065 Total Consumer, Cyclical 20,168,789 22,524,856 Consumer, Non-cyclical % Alexion Pharmaceuticals Inc. 11,444 1,458,129 1,368,589 Allergan PLC 11,106 2,542,845 1,816,719 Colgate Palmolive Company 36,510 2,550,177 2,754,680 Ecolab Inc. 24,083 3,027,353 3,231,457 Edwards Lifesciences Corporation 10, ,010 1,149,529 Gilead Sciences Inc. 46,868 3,482,550 3,357,624 Johnson & Johnson 30,209 3,684,974 4,220,801 Medtronic PLC 31,568 2,445,568 2,549,116 PayPal Holdings Inc. 36,978 2,132,626 2,722,320 PepsiCo Inc. 41,656 4,536,580 4,995,388 The Cooper Companies, Inc. 13,114 2,886,949 2,857,278 The Hershey Company 20,902 2,184,584 2,372,586 Thermo Fisher Scientific Inc. 23,742 3,668,340 4,508,131 Vertex Pharmaceuticals Inc. 9, ,027 1,471,026 Total Consumer, Non-cyclical 36,521,712 39,375,244 Energy - 1.4% Cabot Oil & Gas Corporation 79,242 1,855,685 2,266,321 See Notes to the Financial Statements. 7

11 Pioneer Large Cap Growth Portfolio Schedule of Investments (continued) Principal Amount or Fair Shares Cost Value Common Stocks % (continued) Financial % Charles Schwab Corporation 73,439 $ 3,291,787 $ 3,772,561 Intercontinental Exchange Inc. 66,730 3,947,793 4,708,469 Marsh & McLennan Companies, Inc. 53,462 4,121,799 4,351,272 Mastercard Inc. Class A 41,336 4,489,466 6,256,617 Total Financial 15,850,845 19,088,919 Industrial - 8.6% Amphenol Corporation Class A 20,171 1,414,013 1,771,014 Masco Corporation 63,429 2,191,560 2,787,070 Raytheon Company 24,337 3,718,804 4,571,705 Stanley Black & Decker Inc. 11,622 1,967,835 1,972,137 United Technologies Corporation 18,159 2,072,899 2,316,544 Total Industrial 11,365,111 13,418,470 Technology % Accenture PLC Class A 23,239 3,237,865 3,557,659 Adobe Systems Inc. 16,372 2,003,190 2,869,029 Apple Inc. 67,835 8,556,225 11,479,717 Cognizant Technology Solutions Class A 36,694 2,127,931 2,606,008 Broadcom Ltd. 18,580 3,963,475 4,773,202 Microsoft Corporation 134,402 8,615,865 11,496,747 Total Technology 28,504,551 36,782,362 Total Common Stocks 130,548, ,513,502 Money Market Fund - 2.6% State Street Institutional U.S. Government Money Market Fund 3,997,896 3,997,896 3,997,896 Total Investments % $ 134,546, ,511,398 Other Assets in Excess of Liabilities - 0.0% 29,345 Net Assets - 100% $ 156,540,743 The following is a summary of the fair value of the investments in the Fund based on the inputs used to value them as of, (see Note 3): Fair Value Measurements Level 1 Level 2 Level 3 Total Common Stocks $ 152,513,502 $ - $ - $ 152,513,502 Money Market Fund 3,997, ,997,896 Total $ 156,511,398 $ - $ - $ 156,511,398 See Notes to the Financial Statements. 8

12 Pioneer Large Cap Growth Portfolio Schedule of Investments (continued) During the year ended, the Fund did not hold any Level 3 securities. The Fund recognizes transfers between the fair value hierarchy levels as of the beginning of the fiscal year. There were no transfers between any of the fair value hierarchy levels during the year. Concentration of Ownership: As of, the Fund had one unaffiliated plan holding 10% or more of the outstanding units of the Fund, representing 50% of the total outstanding units. Supplementary Information: Total investment purchases, sales proceeds, and realized gain for the year ended, were: Purchases Sales Realized at Cost Proceeds Gain Investments $ 124,914,836 $ 69,096,974 $ 6,545,102 See Notes to the Financial Statements. 9

13 Pioneer Bond Fund Trust Statement of Assets and Liabilities Assets and Net Assets Receivable for fund units sold $ 10,693,401 Net assets $ 10,693,401 Statement of Operations For the period from December 29, 2017 (date of inception) to Expenses Total expenses - Net investment income - Realized and unrealized gain on investments Net realized and unrealized gain on investments - Net change in net assets resulting from operations $ - See Notes to the Financial Statements. 10

14 Pioneer Bond Fund Trust Statement of Changes in Net Assets For the period from December 29, 2017 (date of inception) to Fund unit transactions Proceeds from units issued Total proceeds from units issued - Class R1 $ 10,693,401 Increase in net assets resulting from fund unit transactions 10,693,401 Increase in net assets 10,693,401 Net assets, beginning of period - Net assets, end of period $ 10,693,401 See Notes to the Financial Statements. 11

15 Per Unit Operating Performance Class R1 Net asset value, at inception $ Net asset value, end of period $ Total Return Supplemental Data Ratio to average net assets: Expenses Net investment income Pioneer Bond Fund Trust Financial Highlights For the period from December 29, 2017 (date of inception) to 0.00% ^ 0.00% ^ 0.00% ^ Fund Unit Activity Units, beginning of period - Issued 1,069,340 Redeemed - Units, end of period 1,069,340 ^Class R1 funded on 12/29/2017; therefore, no expenses were charged for the period. See Notes to the Financial Statements. 12

16 Notes to the Financial Statements Note 1 Organization Wilmington Trust Collective Investment Trust (the "Trust") is intended to constitute an exempt trust under Section 501(a) of the Internal Revenue Code of 1986, as amended, and a group trust within the meaning of Rev. Rul , as clarified and amended. The Trust is exempt from registration under the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended. Wilmington Trust, N.A. ("WTNA" or the "Trustee") serves as the Trustee of the Trust. The Trustee is responsible for maintaining and administering the Trust and its funds (the "Funds" see Fund Index) and also serves as the investment advisor (the "Investment Advisor") to the Funds. M&T Bank Corporation is the ultimate parent of the Trustee. State Street Bank and Trust Company provides custody and transfer agency services for the Trust and the Funds. The purpose of the Trust is to allow collective investments by plan sponsors of retirement plans which qualify for exemption from federal income taxation pursuant to Section 501(a) of the Internal Revenue Code, as amended (the "Code"), by reason of qualifying under Section 401(a) of the Code; tax-exempt governmental plans under Section 414(d) or Section 818(a)(6) of the Code; eligible deferred compensation plans under Section 457(b) of the Code established by a government employer; group trusts or separate accounts consisting solely of assets of the foregoing; and other investors eligible for participation in the Trust. The Trust consists of separate funds with differing investment objectives, which are available for investment by participating plans. An eligible plan may join the Trust, subject to the Trustee's acceptance, and become a participating plan by executing participation documents specified by the Trustee. Not all funds within the Trust are presented herein. WTNA has engaged Pioneer Institutional Asset Management, Inc. (the "Sub-Advisor") to provide investment advice and recommendations with respect to investment of the Funds' assets. While the Trustee generally relies on the Sub- Advisor to manage the Funds' assets, the Trustee maintains ultimate fiduciary authority over the management of and investments made in each Fund. The Sub-Advisor is engaged pursuant to a sub-advisory agreement. Note 2 Significant Accounting Policies The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Funds are investment companies and follow the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic No Net Asset Value ("NAV") Units of each fee class of each Fund are valued each day on which the New York Stock Exchange ("NYSE") is open for trading in accordance with the valuation procedures established by the Trustee. The NAV per unit is calculated as of the close of trading on the NYSE (generally, 4:00 p.m. U.S. Eastern time). The NAV per unit is computed by dividing the total fair value of the assets of a Fund, less its liabilities, by the total number of units outstanding at the time of such computation. Investment income earned is reinvested in the Fund and included in the determination of unit values. 13

17 Notes to the Financial Statements (continued) Fund Unit Transactions The Funds sell new units and repurchase outstanding units on a daily basis. Unit purchases and redemptions are transacted at the NAV per fee class of the Funds determined as of the close of business each day. A summary of the Fund unit activity for each Fund is included with its Financial Highlights. The Funds require the plan sponsors to provide a five-day written notice for withdrawals which will exceed $1 million or 10% of the assets invested in each Fund. Investment Valuation Investments are valued at their current fair value determined as follows: Money Market Fund Investments in money market funds are valued at the daily closing net asset value of the respective fund. Securities Securities, other than bonds, listed on a securities exchange, market or automated quotation system for which quotations are readily available are valued at the closing price on the primary exchange or market on which they are traded on the day of valuation or, if there is no such reported sale on the valuation date, at the most recent bid quotation on the principal exchange. If a market price is not readily available or if such price is deemed unreliable, it will be valued at fair value in accordance with valuation procedures established by the Trustee. The Trustee's determination of fair value involves consideration of a number of subjective factors, and therefore, no single standard for determining fair value will apply. When the valuation method described above is not reflective of fair value, investments are valued at fair value following procedures and/or guidelines determined by or under the direction of the valuation committee established by the Trustee. In light of the judgment involved in fair value decisions, there can be no assurance that a fair value assigned to a particular investment is accurate. Cash and Cash Equivalents The Funds consider all highly liquid instruments with original maturities of three months or less at the acquisition date to be cash equivalents. Investment Transactions and Investment Income The Funds record security transactions on a trade date basis. Dividend income is recorded on the ex-dividend date. Net realized gains and losses on investments are determined by the first-in, first-out method. Interest income and expenses are recorded daily on the accrual basis. Fee Classes and Allocations The Funds offer multiple fee classes. Not all fee classes are available for investment by all plans. Each class is allocated expenses on the basis of expense loads assigned to that class. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each fee class based on the units outstanding for the fee class in proportion to the total outstanding units. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Guarantees and Indemnifications Under the Funds' organizational documents, each trustee, officer, employee and agent of the Trust is indemnified, to the extent permitted by law, against certain liabilities that may arise in the performance of their duties to the Funds. 14

18 Notes to the Financial Statements (continued) Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of indemnification clauses. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds has not had prior claims or losses pursuant to these contracts and the Trustee believes the risk of loss to be remote. Income Tax Status The Trust has received a determination from the Internal Revenue Service (the "IRS") that the Trust is exempt from federal income taxation under Section 501(a) of the Code. ASC , Accounting for Uncertainty in Income Taxes, provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the morelikely-than-not threshold are recorded as a tax expense. The Trustee has evaluated uncertain tax positions in the United States and all major foreign jurisdictions and has determined that the Funds' tax positions are deemed to be "more-likely-than-not" as of. In the event that the Funds incur any tax liabilities in the future, the tax liabilities and the corresponding tax expense will be recorded on the Statement of Assets and Liabilities and Statement of Operations, respectively. The Funds did not accrue any interest or penalties related to uncertain tax liabilities as of. The Trustee is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. Subsequent Events The Trustee has evaluated the effect of subsequent events on the Funds' financial statements through April 30, 2018, which is the date the financial statements were available to be issued, and has determined that there are no material subsequent events that would require disclosure or adjustment in the Funds' financial statements through this date. Note 3 Fair Value Measurements Fair value is defined as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. Various inputs are used in determining the fair value of the Funds' investments. The Trustee has performed an analysis of the significance and character of these inputs to the fair value determination. These inputs are summarized in the three broad levels listed below: Level 1 Quoted prices in active markets for identical investments. Level 2 Other significant observable inputs (including quoted prices for similar investments, published net asset values, interest rates, credit risk, and others). Level 3 Significant unobservable inputs (including the Trustee's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used as of, in valuing the Funds' assets carried at fair value is included in Note 2. 15

19 Notes to the Financial Statements (continued) The FASB issued Accounting Standards Update ("ASU") , Fair Value Measurement (Topic 820) - Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). ASU removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share as a practical expedient. ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share as a practical expedient. Investments that calculate NAV per share (or its equivalent), but for which the practical expedient is not applied, will continue to be included in the fair value hierarchy along with the related required disclosures. The Pioneer Large Cap Growth Portfolio elected to adopt ASU , effective December 31, 2016, and the Pioneer Bond Fund Trust adopted ASU , which did not have an impact to the, financial statements. The aggregate fair value of the investments in the Funds, by input level used as of, is included following each Fund's Schedule of Investments. Note 4 Fees and Expenses Trustee, Administrative Services and Sub-Advisory Fees All asset-based fees are based upon the net assets as determined at the end of each preceding business day as set forth in the table below (in basis points). Except as otherwise noted, all asset-based fees are paid from the assets of the Fund. Fund Trustee Fee Administrative Services Fee Sub-Advisory Fee Pioneer Large Cap Growth Portfolio 0 or 8 0 or 2 0 or 30 Pioneer Bond Fund Trust 0 or or 20 Trustee and Administrative Services Fee The Trustee receives an annual fee for trustee and administrative services provided to the Funds. Trustee fees are based upon the average daily value of the Fund and are accrued daily, paid quarterly in arrears and charged against the assets invested in the Fund. Such Trustee fees for the year ended, or for the period then ended for inception dates in 2017, are included in the Statement of Operations. Sub-Advisory Fee The Sub-Advisor is compensated for its investment advisory services provided to each Fund. These fees are based upon the average daily value of the Fund and are accrued daily, paid quarterly in arrears and charged against the assets invested in the Fund. Operating Expenses In addition to the fees described above, each Fund bears expenses related to its operation, including, but not limited to, audit, custody, tax and legal services. Expenses incurred in connection with the investment and reinvestment of Fund assets, including, without limitation, transfer agency fees, brokerage commission and other expenses, are also charged against each Fund. 16

20 Notes to the Financial Statements (continued) When assets of a Fund are invested in other investment vehicles, such as other collective funds or exchange-traded funds, those investment vehicles will incur fees and expenses, which will be reflected in the operating results and value of the Fund's investment in such investment vehicle, and are separate and distinct from the fees and expenses of the Fund described above. Note 5 In-Kind Transfer On May 9, 2017, the Fund received securities with a fair value of $45,536,700 and a cost basis of $39,763,902 from Multi-Manager Large Cap Growth Fund, a fund of Wilmington Trust Collective Investment Trust, and an additional $1,450,000 in cash. The Fund also received 3,922,126 units. Note 6 Related Party Transactions The Trustee is a national bank that provides trust and custodial services for tax-advantaged retirement plans as well as trust and investment services to business pension and retirement plans. The Trustee is responsible for managing the Trust's investment and business affairs. Note 7 Risks Associated with Investing in the Funds In the normal course of business, the Funds trade financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the fair value of the investments. The principal risks associated with investing in each Fund are: Active Management. The Fund is actively managed and subject to the risk that the sub-advisor's usage of investment techniques and risk analyses to make investment decisions fails to perform as expected, which may cause the Fund to lose value or underperform investments with similar objectives and strategies or the market in general. Capitalization Exposure. Concentrating assets in stocks of one or more capitalizations (small, mid, or large) may be subject to both the specific risks of those capitalizations as well as increased volatility because stocks of specific capitalizations tend to go through cycles of beating or lagging the market as a whole. Credit and Counterparty. The issuer or guarantor of a fixed income security, counterparty to an OTC derivatives contract, or other borrower may not be able to make timely principal, interest, or settlement payments on an obligation. In this event, the issuer of a fixed income security may have its credit rating downgraded or defaulted, which may reduce the potential for income and value of the Fund. Depositary Receipts. Investments in depositary receipts generally reflect the risks of the securities they represent, although they may be subject to increased liquidity risk and higher expenses and may not pass through voting and other shareholder rights. Depositary receipts cannot be directly exchanged for the securities they represent and may trade at either a discount or premium to those securities. 17

21 Notes to the Financial Statements (continued) Equity Securities. The value of equity securities, which include common, preferred, and convertible preferred stocks, will fluctuate based on changes in their issuers' financial conditions, as well as overall market and economic conditions, and can decline in the event of deteriorating issuer, market, or economic conditions. Fixed Income Securities. The value of fixed income or debt securities may be susceptible to general movements in the bond market and are subject to interest rate and credit risk. Growth Investing. Growth securities may be subject to increased volatility as the value of these securities is highly sensitive to market fluctuations and future earnings expectations. These securities typically trade at higher multiples of current earnings than do other securities and may lose value if it appears their earnings expectations may not be met. Industry and Sector Investing. Concentrating assets in a particular industry, sector of the economy, or markets may increase volatility because the investment will be more susceptible to the impact of market, economic, regulatory, and other factors affecting that industry or sector compared with a more broadly diversified asset allocation. Issuer. A stake in any individual security is subject to the risk that the issuer of that security performs poorly, resulting in a decline in the security's value. Issuer-related declines may be caused by poor management decisions, competitive pressures, technological breakthroughs, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, or other factors. Additionally, certain issuers may be more sensitive to adverse issuer, political, regulatory, market, or economic developments. Large Cap. Concentrating assets in large-capitalization stocks may subject the Fund to the risk that those stocks underperform other capitalizations or the market as a whole. Large-cap companies may be unable to respond as quickly as small- and mid-cap companies can to new competitive pressures and may lack the growth potential of those securities. Historically, large-cap companies do not recover as quickly as smaller companies do from market declines. Long-Term Outlook and Projections. The investment is intended to be held for a substantial period of time, and investors should tolerate fluctuations in their investment's value. Market/Market Volatility. The market value of the Fund's securities may fall rapidly or unpredictably because of changing economic, political, or market conditions, which may reduce the value of the Fund. Pricing. Some investments may not have a market observed price; therefore, values for these assets may be determined through a subjective valuation methodology. Fair values determined by a subjective methodology may differ from the actual value realized upon sale. Valuation methodologies may also be used to calculate a daily net asset value. Regulation/Government Intervention. The business of the issuer of an underlying security may be adversely impacted by new regulation or government intervention, impacting the price of the security. Direct government ownership of distressed assets in times of economic instability may subject the Fund's holdings to increased price volatility and liquidity risk. 18