Symmetry Partners Panoramic Fund Transition Guide

Transcription

1 Partners Fund Transition Guide For Advisor Use Only. Not For Public Distribution.

2 In Q4 2018, Partners will reallocate the Structured mutual fund portfolios to a series of institutional class fund-of-funds/sub-advised funds. s History of Innovation For over 20 years has been at the forefront of financial innovation with one goal in mind making it easier for advisors and their clients to achieve investing success! By consistently driving down costs By adopting and leveraging new technologies to improve implementation By seeking to build the most efficient investment solutions quicker & smarter 1994 Launched Registered Investment Advisory firm, embracing the role of Fiduciary, promoting complete transparency of fees, low costs, and financial planning 1995 Introduced Passive (Beta) to client portfolios 1996 Introduced Factor Investing (Value, Size) to client portfolios 1999 Adopted Managed Models for client portfolios 2002 Launched Structured Models 2006 Seeded Dimensional s Core Funds 2010 Launched ETF models 2015 Expanded Factor exposures in Structured models (Momentum, Quality, Interest Rate, Credit) Seeded AQR TM Multi-Style Funds Launched Alternatives model 2016 Evolved PrecisionFactor Suite of ETF Models, expanded Factor exposures (Momentum, Quality, Low Volatility, Interest Rate, Credit) 2018 The Improved Structured Solution For Advisor Use Only. Not for Public Distribution. All data is from sources believed to be reliable but cannot be guaranteed or warranted. The information is provided on the condition that the financial advisor and institution use the information for its own educational and background use. Past performance does not

3 Introducing... SYMMETRY MUTUAL FUNDS is excited to announce the launch of the Fund platform. These funds will exhibit the core characteristics of s portfolios (broadly diversified, low cost, liquid, process-driven, tax-efficient, and transparent), while retaining a factor-based investment philosophy. The addition of these fund-of-funds/sub-advised funds will allow to: Aggregate and leverage our true buying power Access any products we desire for our models Provide a similar investment experience for our clients regardless of when they get in, trade, etc. Manage model changes efficiently Manage taxes at the model level A Fund Platform Built to Build Models US Equity Fund International Equity Fund Global Equity Fund TM Global Equity Fund US Fixed Income fund Global Fixed Income Fund Municipal Fixed Income Fund Alternatives Fund Choose a -Built Portfolio or Customize -Built Model Portfolios Advisor-Built Custom Portfolios For Advisor Use Only. Not for Public Distribution. All data is from sources believed to be reliable but cannot be guaranteed or warranted. The information is provided on the condition that the financial advisor and institution use the information for its own educational and background use. Past performance does not Please note the funds are distributed by SEI Investment Distribution Company (SIDCO). SIDCO is not affiliated with Partners, LLC, AQR Capital Management, Dimensional Fund Advisors, Vanguard, or J.P. Morgan Asset Management. CONSIDER THE FUNDS INVESTMENT OBJECTIVE, RISK, AND CHARGES AND EXPENSES. THIS AND OTHER INFORMATION CAN BE FOUND IN THE FUNDS PROSPECTUS WHICH CAN BE OBTAINED BY CALLING SYM-FUND ( ). PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. There are risks involved in investing, including loss of principal. Asset allocation may not protect against market risk. Investment in the fund(s) is subject to the risks of the underlying funds. Please see disclosure at the end of presentation for additional risks and information regarding Partners, LLC and the Funds.

4 The factor landscape is evolving in a very positive way; and so are we. The preponderance of factor based products, especially in the Exchange Traded Funds (ETF) space, has brought a plethora of portfolio building blocks for factorbased money managers. With this industry shift, the need to be flexible, dynamic, and efficient in the creation of factor-based portfolios is paramount. s Mutual Fund fund of fund / sub-advised building blocks will allow to continue delivering the best-of-breed, factor-based investment experience and portfolios our clients have come to expect in a rapidly changing landscape. BENEFITS FOR INVESTORS: Better Portfolio Management - Clients will benefit from s ability to better execute and implement portfolio improvements both quicker and more efficiently as factor-based products come to market. ETFs - ETFs are typically less expensive than open-ended mutual funds, and are the preferred vehicle for new factor products. Currently, there are limitations in how can use these vehicles and the Mutual Fund solution allows us to take advantage of these new products. - Vanguard recently launched a suite of Factor Based ETFs. - AQR has filed for the ability to launch ETFs. - DFA provides indexes for John Hancock ETFs. - Many other players have entered the market: Fidelity, Goldman Sachs, and JP Morgan, for example. Fixed Income - The next frontier of factor-based investing is fixed income. Mutual Funds may seek to take advantage of new, factor-based, fixed-income products to improve upon our portfolios. Value, Carry, Momentum, and Defensive factors are currently on the docket for consideration. Better Building Blocks - Through sub-advised solutions, helps to engineer what the building blocks and strategies look like and can improve upon how they work together in the model portfolios. At the launch of Mutual Funds, AQR will be the first sub-advisor with other providers to follow. is increasing exposure and improving the implementation to the Momentum factor that is currently not available in the existing AQR mutual fund so it fits better with the other funds in the portfolio. Tax Benefits - The Mutual Fund suite may provide tax benefits for our investors through enhanced tax management and tax-loss harvesting. Enhanced Access - Access to the Funds will allow to provide an enhanced client experience: - Similar investment experience for clients regardless of when they get in, trade, etc. because allocations within each fund will be the same for all shareholders, and fund changes will impact all clients in the same manner. - More efficient model changes through the use of daily cash flows to reposition exposures within the funds; the potential mitigation of transaction costs for our clients associated with model changes. For Advisor Use Only. Not for Public Distribution. All data is from sources believed to be reliable but cannot be guaranteed or warranted. The information is provided on the condition that the financial advisor and institution use the information for its own educational and background use. Past performance does not

5 BENEFITS FOR ADVISORS: Simplified Fee Discussion - Advisors have consistently demanded we wrap the fee in the expense ratio - and we listened. s fee will be inserted into the mutual fund so that advisors do not need to constantly explain the second tier of fees clients currently see on their statements. Flexibility - The ability to use the extensive research and portfolio construction in either a portfolio or by using standalone Mutual Funds. The best of both worlds. - Advisors have greater flexibility via tax management at the portfolio level, the ability to use the funds as RPM, and access to factor ETFs. Exclusivity - Funds are not available for individual investors and will only be offered through financial advisors at this time. FEES: The simple answer is that the overall expenses of the portfolio are going up. It s important to understand this is due to the nature of launching a 40 Act Fund and the additional expenses are associated with the administration of the funds. The investor has and will always be s first priority, and we would not be launching these funds for the portfolios if there was no benefit to the investor. For Advisor Use Only. Not for Public Distribution. All data is from sources believed to be reliable but cannot be guaranteed or warranted. The information is provided on the condition that the financial advisor and institution use the information for its own educational and background use. Past performance does not

6 Current Non-Tax-Managed Structured Master Model Allocations Asset Class Ticker 0/100 10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10 100/0 US Equity 0.0% 5.80% 11.60% 17.40% 23.20% 29.00% 34.80% 40.60% 46.40% 52.20% 56.90% DFA US Core 2 DFQTX NA 2.10% 4.2% 6.30% 8.40% 10.50% 12.60% 14.70% 16.80% 18.90% 19.90% DFA Us Vector DFVEX NA 2.20% 4.40% 6.60% 8.80% 11.00% 13.20% 15.40% 17.60% 19.80% 22.00% AQR Large Cap Multi-Style R6 QCERX NA 1.50% 3.00% 4.50% 6.00% 7.50% 9.00% 10.50% 12.00% 13.50% 15.00% International Equity 0.0% 3.40% 6.80% 10.20% 13.60% 17.00% 20.40% 23.80% 27.20% 30.60% 33.30% DFA Intl Core DFIEX NA 0.40% 0.80% 1.20% 1.60% 2.00% 2.40% 2.80% 3.20% 3.60% 3.60%. DFA Intl Vector DFVQX NA 0.90% 1.80% 2.70% 3.60% 4.50% 5.40% 6.30% 7.20% 8.10% 9.00% AQR Intl Multi-Style R6 QICRX NA 0.70% 1.40% 2.10% 2.80% 3.50% 4.20% 4.90% 5.60% 6.30% 7.00% DFA Emerging Core DFCEX NA 0.90% 1.80% 2.70% 3.60% 4.50% 5.40% 6.30% 7.20% 8.10% 8.70% AQR Emerging Multi-Style R6 QECRX NA 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% REITs 0.00% 0.80% 1.60% 2.40% 3.20% 4.00% 4.80% 5.60% 6.40% 7.20% 7.80% Global REITs DFGEX NA 0.80% 1.60% 2.40% 3.20% 4.00% 4.80% 5.60% 6.40% 7.20% 7.80% Fixed Income 100.0% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 2.00% Vanguard Short-Term Ix Adm VBIRX 58.00% 43.00% 38.00% 33.00% 22.00% 18.00% NA NA NA NA NA DFA Two-Year Global DFGFX 30.00% 18.00% 16.00% 14.00% 12.00% 10.00% NA NA NA NA NA Vanguard Total Bond Ix Adm VBTLX 10.00% 27.00% 24.00% 21.00% 24.00% 20.00% 19.00% 12.50% 7.00% 3.00% NA DFA Five-Year Global DFGBX NA NA NA NA NA NA 7.00% 5.00% 3.00% 1.00% NA Vanguard Total Intl Bond Ix Adm VTABX NA NA NA NA NA NA 12.00% 10.50% 8.00% 4.00% NA Cash 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Estimated Non-Tax-Managed Structured Master Model Allocations Non-Tax-Managed Structured Model Allocations 0/100 10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10 100/0 Equity 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 98.0% US Equity 0.0% 3.9% 7.8% 11.6% 15.5% 19.4% 23.3% 27.2% 31.0% 34.9% 38.0% International Equity 0.0% 2.1% 4.2% 6.4% 8.5% 10.6% 12.7% 14.8% 17.0% 19.1% 20.8% Global Equity 0.0% 4.0% 8.0% 12.0% 16.0% 20.0% 24.0% 28.0% 32.0% 36.0% 39.2% Fixed Income 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 2.0% US Fixed Income 93.0% 79.0% 70.0% 61.0% 49.0% 40.5% 8.0% 4.5% 2.4% 1.2% 0.0% Global Fixed Income 5.0% 9.0% 8.0% 7.0% 9.0% 7.5% 30.0% 23.5% 15.6% 6.8% 0.0% Cash 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% also offers tax-managed versions of each model, which aim to minimize tax impact. The above information is supplemented by the attached disclosure located at the end of this module labeled Master Model Allocation and Expense Ratios Disclosure. The data should be reviewed in conjunction with the disclosure of the source of the information. Investors will not receive the exact allocations presented above due to a variety of implementation factors, including but not limited to: the custodian or trading platform s own trading algorithm, any changes in price that take place from the time the positions are calculated to the time they are actually traded. In some cases for certain custodians, positions with small allocations may be eliminated altogether. Calculation of expense ratio assumes no cost for cash position. The holdings comprising the strategies and the allocations to those holdings have changed over time and may change in the future. Please be advised that some of the portfolios may not be available though all broker-dealers. Please be advised that the information provided is an estimate and provided for educational background use only. All data is from sources believed to be reliable but cannot be guaranteed or warranted. Any information derived here or in the future is an estimate based on the information currently presented. For Advisor Use Only.Not for Public Distribution. All data is from sources believed to be reliable but cannot be guaranteed or warranted. The information is provided on the condition that the financial advisor and institution use the information for its own educational and background use. Past performance does not

7 Current Tax-Managed Structured Master Model Allocations Asset Class Ticker 0/100 10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10 100/0 US Equity 0.00% 5.80% 11.60% 17.40% 23.20% 29.00% 34.80% 40.60% 46.40% 52.20% 56.90% DFA TA US Core 2 DFTCX NA 2.10% 4.2% 6.30% 8.40% 10.50% 12.60% 14.70% 16.80% 18.90% 19.90% DFA US Vector DFVEX NA 2.20% 4.40% 6.60% 8.80% 11.00% 13.20% 15.40% 17.60% 19.80% 22.00% AQR TM Large Cap Multi-Style R6 QTLRX NA 1.50% 3.00% 4.50% 6.00% 7.50% 9.00% 10.50% 12.00% 13.50% 15.00% International Equity 0.0% 3.60% 7.30% 10.90% 14.60% 18.20% 21.90% 25.50% 29.20% 32.80% 35.80% DFA TA World ex US Core DFTWX NA 0.60% 1.20% 1.80% 2.40% 3.00% 3.60% 4.20% 4.80% 5.40% 5.60%. DFA Intl Vector DFVQX NA 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% AQR TM Intl Multi-Style R6 QIMRX NA 0.80% 1.60% 2.40% 3.20% 4.00% 4.80% 5.60% 6.40% 7.20% 8.00% DFA Emerging Core DFCEX NA 0.70% 1.50% 2.20% 3.00% 3.70% 4.50% 5.20% 6.00% 6.70% 7.20% AQR TM Emerging Multi-Style R6 QTERX NA 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% REITs 0.00% 0.60% 1.10% 1.70% 2.20% 2.80% 3.30% 3.90% 4.40% 5.00% 5.40% DFA US REITs DFREX NA 0.60% 1.10% 1.70% 2.20% 2.80% 3.30% 3.90% 4.40% 5.00% 5.40% Fixed Income 100.0% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 2.00% DFA Short-Term Muni DFSMX 58.00% 43.00% 38.00% 33.00% 28.00% 23.00% NA NA NA NA NA DFA Two-Year Global DFGFX 30.00% 18.00% 16.00% 14.00% NA NA NA NA NA NA NA Vanguard Total Bond Ix Adm VBTLX 10.00% 27.00% 24.00% 21.00% NA NA NA NA NA NA NA DFA Five-Year Global DFGBX NA NA NA NA 12.00% 10.00% 7.00% 5.00% 3.00% 1.00% NA Vangaurd Total Intl Bond Ix Adm VTABX NA NA NA NA 18.00% 15.00% 12.00% 10.50% 8.00% 4.00% NA DFA Intermediate-Term Muni DFTIX NA NA NA NA NA NA 19.00% 12.50% 7.00% 3.00% NA Cash 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Estimated Tax-Managed Structured Master Model Allocations Tax-Managed Structured Model Allocations 0/100 10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10 100/0 Equity 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 98.0% US Equity 0.0% 1.8% 3.6% 5.3% 7.1% 8.9% 10.7% 12.5% 14.2% 16.0% 17.4% International Equity 0.0% 0.7% 1.4% 2.2% 2.9% 3.6% 4.3% 5.0% 5.8% 6.5% 7.1% TM Global Equity 0.0% 7.5% 15.0% 22.5% 30.0% 37.5% 45.0% 52.5% 60.0% 67.5% 73.5% Fixed Income 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 2.0% US Fixed Income 29.0% 21.5% 19.0% 16.5% 12.0% 10.0% 8.0% 4.5% 2.0% 1.0% 0.0% Global Fixed Income 10.0% 22.5% 20.0% 17.5% 17.0% 14.0% 11.0% 11.0% 9.0% 4.0% 0.0% Municipal Fixed Income 59.0% 44.0% 39.0% 34.0% 29.0% 24.0% 19.0% 12.5% 7.0% 3.0% 0.0% Cash 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% also offers tax-managed versions of each model, which aim to minimize tax impact. The above information is supplemented by the attached disclosure located at the end of this module labeled Master Model Allocation and Expense Ratios Disclosure. The data should be reviewed in conjunction with the disclosure of the source of the information. Investors will not receive the exact allocations presented above due to a variety of implementation factors, including but not limited to: the custodian or trading platform s own trading algorithm, any changes in price that take place from the time the positions are calculated to the time they are actually traded. In some cases for certain custodians, positions with small allocations may be eliminated altogether. Calculation of expense ratio assumes no cost for cash position. The holdings comprising the strategies and the allocations to those holdings have changed over time and may change in the future. Please be advised that some of the portfolios may not be available though all broker-dealers. Please be advised that the information provided is an estimate and provided for educational background use only. All data is from sources believed to be reliable but cannot be guaranteed or warranted. Any information derived here or in the future is an estimate based on the information currently presented. For Advisor Use Only.Not for Public Distribution. All data is from sources believed to be reliable but cannot be guaranteed or warranted. The information is provided on the condition that the financial advisor and institution use the information for its own educational and background use. Past performance does not

8 Estimated Expenses at the Model Level Expenses at the NTM Model Level* Ticker Prospectus Net Expense Ratio 0/100 10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10 100/0 Equity US Equity SPUSX 0.67% 0.0% 3.9% 7.8% 11.6% 15.5% 19.4% 23.3% 27.2% 31.0% 34.9% 38.0% International Equity SPILX 0.95% 0.0% 2.1% 4.2% 6.4% 8.5% 10.6% 12.7% 14.8% 17.0% 19.1% 20.8% Global Equity SPGEX 0.76% 0.0% 4.0% 8.0% 12.0% 16.0% 20.0% 24.0% 28.0% 32.0% 36.0% 39.2% Fixed Income US Fixed Income SPUBX 0.48% 93.0% 79.0% 70.0% 61.0% 49.0% 40.5% 8.0% 4.5% 2.4% 1.2% 0.0% Global Fixed Income SPGBX 0.52% 5.0% 9.0% 8.0% 7.0% 9.0% 7.5% 30.0% 23.5% 15.6% 6.8% 0.0% Cash 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% Total Expense Ratio 0.47% 0.50% 0.53% 0.56% 0.59% 0.62% 0.65% 0.68% 0.71% 0.73% 0.75% Expenses at the TM Model Level** Ticker Prospectus Net Expense Ratio 0/100 10/90 20/80 30/70 40/60 50/50 60/40 70/30 80/20 90/10 100/0 Equity US Equity SPUSX 0.67% 0.0% 1.8% 3.6% 5.3% 7.1% 8.9% 10.7% 12.5% 14.2% 16.0% 17.4% International Equity SPILX 0.95% 0.0% 0.7% 1.4% 2.2% 2.9% 3.6% 4.3% 5.0% 5.8% 6.5% 7.1% TM Global Equity SPGTX 0.79% 0.0% 7.5% 15.0% 22.5% 30.0% 37.5% 45.0% 52.5% 60.0% 67.5% 73.5% Fixed Income US Fixed Income SPUBX 0.48% 29.0% 21.5% 19.0% 16.5% 12.0% 10.0% 8.0% 4.5% 2.0% 1.0% 0.0% Global Fixed Income SPGBX 0.52% 10.0% 22.5% 20.0% 17.5% 17.0% 14.0% 11.0% 11.0% 9.0% 4.0% 0.0% Municipal Fixed Income SPMFX 0.63% 59.0% 44.0% 39.0% 34.0% 29.0% 24.0% 19.0% 12.5% 7.0% 3.0% 0.0% Cash 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Total Expense Ratio 0.56% 0.58% 0.60% 0.62% 0.64% 0.66% 0.68% 0.70% 0.72% 0.75% 0.76% Structured non-tax-managed models All existing Structured non-tax-managed models on B/D platforms will be reallocated according to the transition schedule targeted to begin Q As the transition occurs, new accounts will begin using the updated Structured non-tax-managed models that will hold the mutual funds. Structured tax-managed models All existing Structured tax-managed models on B/D platforms will be maintained in their current Structured models. According to the transition schedule, targeted to begin in Q4, new accounts will be using the updated Structured tax-managed models that will hold the mutual funds. 1 X s e u Please be advised that the information provided is an estimate and provided for educational background use only. All data is from sources believed to be reliable but cannot be guaranteed or warranted. Any information derived here or in the future is an estimate based on the information currently presented. * The net expense ratio as of the most recent prospectus. Gross expense ratio as of the most recent prospectus as follows: SPUSX 0.97%, SPILX 1.33%, SPGEX 1.13%, SPUBX 0.76%, and SPGBX 0.84%. Waivers are contractual. Please see important disclosure on the back page. ** The net expense ratio as of the most recent prospectus. Gross expense ratio as of the most recent prospectus as follows: SPUSX 0.97%, SPILX 1.33%, SPGTX 1.43%, SPUBX 0.76%, SPGBX 0.84%, and SPMFX 1.24%. Waivers are contractual. Please see important disclosure on the back page. For Advisor Use Only. Not for Public Distribution. All data is from sources believed to be reliable but cannot be guaranteed or warranted. The information is provided on the condition that the financial advisor and institution use the information for its own educational and background use. Past performance does not

9 Important Disclosure Partners, LLC is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered, or exempted or excluded from registration requirements. Past Performance does not Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, or any non-investment related content, made reference to directly or indirectly in this material will be profitable, or prove successful. As with any investment strategy, there is the possibility of profitability as well as loss. Partners, LLC is not affiliated with SIDCO, AQR Capital Management, Dimensional Fund Advisors, Vanguard, or J.P. Morgan Asset Management. Diversification seeks to reduce volatility by spreading your investment dollars into various asset classes to add balance to your portfolio. Using this methodology, however, does not guarantee a profit or protection from loss in a declining market. Rebalancing assets can have tax consequences. If you sell assets in a taxable account you may have to pay tax on any gain resulting from the sale. Please consult your tax advisor. Any chart that is presented in this presentation is for informational purposes only and should not be considered an all inclusive formula for security selection. Partners investment approach seeks enhanced returns by overweighting assets that exhibit characteristics that tend to be in accordance with one or more factors identified in academic research as historically associated with higher returns. Please be advised that adding these factors may not ensure increased return over a market weighted investment and may lead to underperformance relative to the benchmark over the investor s time horizon. The factors seeks to capture may change over time at its discretion. Currently, the major factors in equity markets used by and some associated academic research are: the market risk premium (Sharpe, William F. Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. The Journal of Finance, Vol. 19, No. 3 (Sept. 1964), ), value (Fama, Eugene and Ken French. Common risk factors in the returns on stocks and bonds. Journal of Financial Economics, 33, (1993), 3-56.), small (Banz, Rolf W. The Relationship Between Return and Market Value of Common Stocks. Journal of Financial Economics, 9 (1981), 3-18.), profitability (Novy- Marx, Robert. The Other Side of Value: The Gross Profitability Premium. Journal of Financial Economics, 108(1), (2013), ), quality (Asness, Clifford S.; Andrea Frazzini; and Lasse H. Pedersen. Quality Minus Junk. Working Paper.), momentum (Jegadeesh,Narasimhan and Sheridan Titman. Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency. The Journal of Finance, Vol. 48, No. 1, (March 1993), 65-91), and minimum volatility (Ang, Andrew, Robert J. Hodrick, Yuhang Xing and Xiaoyan Zhang. The Cross-Section of Volatility and Expected Returns. The Journal of Finance, Vol. 61, No. 1 (Feb. 2006), pp ) On the bond side, primarily seeks to capture maturity and credit risk premiums (Ilmanen, Antti. Expected Returns: An Investor s Guide to Harvesting Market Rewards. WileyFinance, 2011, p and ). All data is from sources believed to be reliable but cannot be guaranteed or warranted. Higher potential return generally involves greater risk, short term volatility is not uncommon when investing in various types of funds including but not limited to: sector, emerging markets, small and mid-cap funds. International investing involves special risks such as currency fluctuation, lower liquidity, political and economic uncertainties, and differences in accounting standards. Risks of foreign investing are generally intensified for investments in emerging markets. Risks for emerging markets include risks relating to the relatively smaller size and lesser liquidity of these markets, high inflation rates and adverse political developments. Risks for investing in international equity include foreign currency risk, as well as, fluctuation due to economic or political actions of foreign governments and/or less regulated or liquid markets. Risks for smaller companies include business risks, significant stock price fluctuation and illiquidity. Investing in real estate entails certain risks, including changes in: the economy, supply and demand, laws, tenant turnover, interest rates (including periods of high interest rates), availability of mortgage funds, operation expenses and cost of insurance. Some real estate investments offer limited liquidity options. Investing in higher-yielding, lower-rated bonds has a greater risk of price fluctuation and loss of principal income than U.S. government securities, such as U.S. Treasury bond and bills. Treasuries and government securities are guaranteed by the government for repayment of principal and interest if held to maturity. Investors should carefully assess the risks associated with an investment in the fund. Long/short investment strategies utilize short selling, which involves selling a security not owned in anticipation that the security s price will decline. This strategy could result in losses if the value of the securities held long decrease and the value of the securities sold short increase. Investing in commodities is often through futures trading, where the risk of loss in these contracts can be substantial. You and your advisor should carefully consider whether such trading is suitable depending on your financial situation. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by charges in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates the possibility for greater loss. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the original investment. The use of derivatives may not be successful, resulting in the investment losses, and the cost of such strategies may reduce investment returns. Expense Ratio Disclosure The fund s adviser has contractually agreed to waive its management fee until at least October 31, 2019 so that the aggregate management fee retained by the Adviser with respect to the fund after payment of sub-advisory fees does not exceed 0.25% of the Fund s average net assets. The Adviser also has contractually agreed to reduce the Fund s fees and/or absorb expenses of the Fund until at least October 31, 2019 to ensure that total annual Fund operating expenses after expense waiver and reimbursement (exclusive of any front-end or contingent deferred loads; brokerage fees and commissions; acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); taxes; and extraordinary expenses such as litigation expenses) will not exceed 0.48% of average daily net assets of the Fund. This agreement may be terminated by the Fund s Board of Trustees on 60 days written notice to the Adviser. This fee waiver/expense reimbursement is subject to possible recoupment from the Fund in future years on a rolling three year basis (within the three years after the fees have been waived or reimbursed) if such recoupment can be achieved without exceeding the foregoing expense limits.

10 Structured Master Model Allocations & Expense Ratios Disclosure As with any investment philosophy, there is a possibility of profitability as well as loss. Higher potential return generally involves greater risk; short-term volatility is not uncommon when investing in various types of funds including, but not limited to: sector, emerging markets, small and mid-cap funds. Risks for emerging markets include risks relating to the relatively smaller size and lesser liquidity of these markets, high inflation rates and adverse political developments. Risks for investing in international equity include foreign currency risk, as well as fluctuation due to economic or political actions of foreign governments and/or less regulated or liquid markets. Risks for smaller companies include business risks, significant stock price fluctuation and illiquidity. Real estate investments are affected by changes in real estate values, property taxes, interest rates and regulatory requirements and are subject to heavy reliance on cash flow and concentration in a small number of projects or single sector. Investing in higher-yielding, lower rated bonds has a greater risk of price fluctuation and loss of principal income than U.S. Government securities such as U.S. Treasury bonds and bills. Treasuries and government securities are guaranteed by the government for repayment of principal and interest if held to maturity. Investors should carefully assess the risks associated with an investment in the fund. International fund unit values and returns will fluctuate with market conditions, currencies, and economic and political climates where investments are made. All data is from sources believed to be reliable but cannot be guaranteed or warranted. Past performance is no guarantee of future results. The chart does not constitute a complete description of our investment services and is for informational purposes only. All expense information for all Dimensional Fund Advisors (DFA), Vanguard, and AQR funds can be found in the funds prospectus. The weighted expense ratios provided herein are calculated based on the prospectus net expense ratios provided by Morningstar Direct. The expense ratios provided for Dimensional Fund Advisors, AQR, and Vanguard are as of most recent prospectus date and provided by Morningstar Direct. Contact Dimensional Fund Advisors at (310) , Vanguard at (877) and AQR at (866) to receive prospectuses. The total expense ratio represents the weighted fund expense of the Funds proportionate to their allocation percent within each portfolio. Please note that the weighted expense ratios for the qualified and non-qualified portfolios may differ slightly. This is due to the fact that the non-qualified portfolios use tax-managed and tax advantaged funds and because the asset allocations differ between the two models. For illustration purposes, the Qualified Structured 0/100 Portfolio is made of up three bond funds whose allocation percent within the portfolio is 58%, 30% and 10% respectively. The three funds have the following expenses: VBIRX.07%, DFGFX.17% and VBTLX.05%. Each fund expense is multiplied by its allocation percent (VBIRX.58, DFGFX.30 and VBTLX.10), and then added together to produce the weighted expense ratio of.10%. The aforementioned method to review fund expenses is for informational purposes only and does not represent a solicitation of a formula for security selection. *In some cases specific custodians may restrict the usage of non-institutional share classes, such as AQR s R6. In the event that non-institutional share classes cannot be used, the portfolio will substitute the funds with the applicable institutional share class. It must be noted that the replacement of R6 share class funds with institutional funds will lead to a higher net expense ratio. An example would be that if an investor was seeking to hold a Structured Qualified 100/0 portfolio, with the model holdings the net expense ratio would be If the investor was restricted from using the Structured Qualified 100/0 models R6 share class and had to replace the R6 share class with Institutional Share classes then the net expense ratio would rise to With AQR R6 Share Class With AQR Ins Share Class Structured 100/ Structured 60/ TM Structured 100/ TM Structured 60/ tax-managed portfolios are designed with the goal of increasing the portfolio s overall tax efficiency. Changes to portfolio holdings which comprise the portfolio may have tax consequences. If you sell assets in a taxable account, you may have to pay tax on any gain. While seeks to mitigate tax exposure when possible, it is likely that investors will incur a taxable event while being invested in the portfolio. Morningstar All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information, except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.

11 For Advisor Use Only. Not For Public Distribution. CRN