Strong and consistent global equity performance across most major regions Japan led the way, gaining 8.6% in the quarter

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1 Re: 4Q17 Performance From: Adam Petryk, Head of Multi-Asset and Solutions, QS Investors Thomas Picciochi, Head of Multi-Asset Portfolio Management & Implementation, QS Investors Ellen Tesler, Portfolio Manager, QS Investors Highlights n n Strong and consistent global equity performance across most major regions Japan led the way, gaining 8.6% in the quarter n Both the U.S. dollar and commodities rebounded in the quarter, following large losses throughout most of the year As the portfolio managers of the Scholars Choice College Savings Program, we are responsible for constructing the plan s portfolios, selecting the underlying funds and managers within each portfolio, and importantly, continually monitoring the performance of each fund. Responsible management of your money requires ongoing due diligence. The following is intended to offer you a perspective on recent performance of the Program. Markets review Equity performance, as measured by the MSCI All Country World Index (ACWI), 1 in the fourth quarter of 2017 largely mirrored strong, consistent growth throughout 2017, and it was persistent across most major regions. Regionally, Japan led the way, with the MSCI Japan Local Index 2 appreciating 8.6% in the quarter. This was followed by U.S. equities (S&P 500 Index), 3 emerging markets (MSCI Emerging Markets Index), 4 global (MSCI ACWI Index) and international developed equities MSCI EAFE (Europe, Australasia and Far East) Index, 5 appreciating 6.6%, 5.7%, 5.5% and 4.3%, respectively. Throughout the quarter, major U.S. equity indexes continued to set new, all-time highs. With these new highs, valuations also matched historic levels. One measurement, the cyclically adjusted P/E ratio (CAPE), 6 reached 32x in December the second-highest point in the time series history, dating from MSCI All Country World Index is a market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 45 country indices comprising 24 developed and 21 emerging market country indices. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 2 The MSCI Japan Local Index is designed to measure the performance of the large- and mid-cap segments of the Japanese market. The index covers approximately 85% of the free float-adjusted market capitalization in Japan. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 3 The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. 4 Morgan Stanley Capital International (MSCI) Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. Please note an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 5 The MSCI EAFE Index is a free float-adjusted market-capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect fees, expenses or sales charges. 6 The cyclically adjusted price-to-earnings ratio, commonly known as CAPE, is a valuation measure usually applied to the US S&P 500 equity market. It is defined as price divided by the average of 10 years of earnings (moving average), adjusted for inflation. It is principally used to assess likely future returns from equities over timescales of 10 to 20 years, with higher-than-average CAPE values implying lower-than-average long-term annual average returns.

2 The quarter s strong equity market performance was driven by many advanced economies approaching full employment and inflation rising slowly. In addition to this, a variety of strong economic data throughout the quarter provided additional fuel for broad equity market appreciation: n Global manufacturing data, as represented by various PMI 7 measurements, indicated that advanced economies in aggregate ended 2017 growing at a robust rate of around 4% n U.S. consumer confidence rose to in October, driven largely by optimism around a potential tax cut. This level represented the measurement s highest level since January n In November, 3Q17 s real GDP 8 growth was revised higher from 3.0% to 3.3%. n Initial jobless claims at the end of December remained low, at 250,000, and they averaged 238,000 over the quarter. For context, initial jobless claims peaked at 665,000 during the global financial crisis. n There was an increase in new-home sales, and housing starts rebounded in October. In addition to economic data, government action also supported equity growth. Notably, the Trump administration s tax cut gained momentum throughout the quarter, and it was finally passed in December. This legislation substantially lowers the U.S. corporate tax rate from 35% to 21%, supporting corporate future earnings growth. Furthermore, the U.S. Federal Reserve 9 continued its path of normalization by announcing a 25-basis-point 10 rate hike in December this was a pace and magnitude largely expected by the market. All of these pro-growth factors contributed to muted results in the fixed income market, with global bonds rising 1.1% (Bloomberg Barclays Global Aggregate Index Unhedged) 11 and U.S. bond markets gaining 0.4% (Bloomberg Barclays U.S. Aggregate Bond Index). 12 Also in global markets this quarter, commodities had their strongest quarter of performance this year, appreciating 4.4% (Bloomberg Commodity Index). 13 This was primarily attributed to a sharp rise in crude oil during the quarter, which rose 16.9% (Generic Front Month WTI Crude Oil Future). 14 Crude oil prices rebounded in the fourth quarter as Saudi Arabia signaled in October that they would support the extension of OPEC 15 -led output cuts. The U.S. dollar (represented by the Bloomberg Dollar Spot Index) 16 slowed its losses, falling only 9 basis points in the fourth quarter, following large declines of 3.5%, 3.2% and 2.0% in the first three quarters of the year. 7 The Institute for Supply Management s composite PMI Index (formerly the National Association of Purchasing Managers Index) is based on a survey of purchasing executives who buy the raw materials for manufacturing at more than 350 companies. It offers an early reading on the health of the manufacturing sector. Please note an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 8 Gross domestic product (GDP) is an economic statistic that measures the market value of all final goods and services produced within a country in a given period of time. 9 The Federal Reserve Board ( Fed ) is responsible for the formulation of policies designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments. 10 A basis point is one one-hundredth of one percent (1/100% or 0.01%). 11 Bloomberg Barclays Global Aggregate Index Unhedged is an unmanaged index of global investment-grade fixed income securities. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 12 The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based bond index composed of government, corporate, mortgage and asset-backed issues rated investment grade or higher and having at least one year to maturity. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 13 The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Indexes. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 14 West Texas Intermediate (WTI), also known as Texas light sweet, is a grade of crude oil used as a benchmark in oil pricing. This grade is described as light because of its relatively low density, and sweet because of its low sulfur content. Futures are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. 15 OPEC is defined as an abbreviation for Organization of Petroleum Exporting Countries, which is a union of oil producing countries that regulate the amount of oil each country is able to produce. 16 The Bloomberg Dollar Spot Index (BBDXY) tracks the performance of a basket of leading global currencies versus the U.S. dollar. The index represents both developed and emerging market currencies that have the highest liquidity in the currency markets and the biggest trade flows with the U.S. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges.

3 Outlook At the end of December, we preferred U.S. equities versus investment-grade (IG) bonds, though this conviction level was approaching a 12-month low. This level of conviction in U.S. equities was lower than one month prior, largely due to our Leading Economic Indicator Index (LEI). 17 Our LEI was driven down largely due to a negative change in global trade data and a change in average hours worked. Additionally, a rising interest rate trend also moderated our preference for equities versus bonds. We have stronger conviction in international developed equities over U.S. equities, largely on the observation of steeper yield curves in EAFE (Europe, Australasia, Far East) countries and a more favorable valuation level. Stronger price momentum in U.S. markets served as the only moderating factor between these assets. In fixed income, we are modestly in favor of U.S. high-yield bonds over investment grade. This view is driven by spread tightening and relative valuation between the two assets. Underlying investment performance In the fourth quarter, performance of the Scholars Choice portfolios benefited from broad equity and fixed income gains, as positive momentum continued throughout the quarter. All Scholars Choice portfolios had positive returns in the quarter. Among the Age Based portfolios, the equity-heavy Portfolio I was the best performer, gaining 4.53%. As equity allocations diminished along the age-based horizon, absolute performance decreased. The fixed income-heavy Portfolio VII was the lowest performer, albeit with a positive 0.37% return. Among the portfolios underlying holdings returns, U.S. equity led, and particularly U.S. Large Cap. The QS U.S. Large Cap Equity Fund was the top-performing holding, gaining 7.90%. Returns were also strong across developed non-u.s. holdings; the QS Global Dividend Fund was the best performer, with a 5.04% return. Within fixed income returns, returns were muted relative to equities. Inflation was the top fixed income asset class, as the Western Inflation Indexed Plus Bond Fund gained 1.70%. The BrandywineGLOBAL - Global Opportunities Bond Fund 18 was the only holding that posted a negative return in the quarter, falling 0.54%. Relative to their benchmarks, the Age Based portfolios mostly lagged; Portfolio VII was the sole portfolio to outperform. Relative returns ranged from -0.38% for Portfolio III to 0.06% for Portfolio VII. Relative performance was mainly impacted by underperformance within equities; the Templeton Foreign Fund and ClearBridge Aggressive Growth Fund were the biggest relative laggards. However, BrandywineGLOBAL - Diversified US Large Cap Value Fund 19 had the best relative performance of all underlying holdings. The portfolios had mostly positive contributions from U.S. Fixed Income, most notably from the outperformance by the Western Asset Short Term Bond Fund. The All Equity and All Fixed Income portfolios both had positive returns in the period. However, both underperformed their benchmarks by 0.34% and 0.04%, respectively. Within the individual fund options, all but the Global Fixed Income option had positive returns. The U.S. Core Equity portfolio performed best in absolute terms. All the individual fund options underperformed their benchmarks, most notably the U.S. Aggressive Equity option. 17 The Leading Economic Indicator Index (LEI) is intended to predict future economic activity. Typically, three consecutive monthly LEI changes in the same direction suggest a turning point in the economy. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 18 Prior to December 29, 2017, this fund was known as Legg Mason BW Global Opportunities Bond Fund. 19 Prior to December 29, 2017, this fund was known as Legg Mason BW Diversified Large Cap Value Fund..

4 Closing thoughts Our commentary at the end of the third quarter of 2017 posed concerns regarding the Trump administration s ability to pass its tax reform package following an inconsistent track record on other major platform initiatives. We viewed fiscal stimulus from an aggressive tax cut as potentially the missing piece in a puzzle regarding how long U.S. equity market growth could persist. With tax reform moving from concept to signed law during the quarter, this box has now been checked, and the market resumed its torrid pace of growth in the fourth quarter and potentially beyond. One of the most persistent questions in the market this quarter and throughout 2017 concerned equity market volatility or the lack thereof. Equity volatility remained at near all-time lows in the fourth quarter, with the VIX Index 20 averaging throughout this period. This level represents the Index s 1.5 percentile rank, dating back to its inception in This phenomenon was not limited to implied equity volatility, as seen in the VIX Index. The S&P 500 s realized volatility at the end of the quarter was 5.6% also representing the 1.5 percentile rank in the Index s history dating back to April For many investors, a rule of thumb is that a low-volatility environment supports equity market growth and this has been true during many points of market history. This begs the question are we now in a persistently low-volatility environment, which will continue to underpin equity gains across the globe? This is difficult to forecast, but there are events on the horizon that could bring markets back to a normalized range of volatility in Most notably, if global central banks fail to act in measured and consistent ways regarding policy tightening, equity volatility could quickly revert to historical levels. Also, while the absolute level of volatility was very low in 2017, volatility s own rate of change (the volatility of volatility) was largely at normal levels at quarter end. We have some questions about the longevity of the current U.S. equity market rally and whether volatility is due to mean revert in To alleviate these concerns, we believe geographic diversification and tilting U.S. stock portfolios toward defensive stocks are particularly sensible allocation moves at this time. As always, if you have any questions or concerns about your investment in the Scholars Choice program, please talk to your financial advisor. Adam Petryk Head of Multi-Asset and Solutions QS Investors Thomas Picciochi Head of Multi-Asset Portfolio Management & Implementation QS Investors Ellen Tesler Portfolio Manager QS Investors 20 VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility measure is meant to be forward-looking, is calculated from both calls and puts, and is a widely used measure of market risk; and it is often referred to as the investor fear gauge. Please note that an investor cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges

5 The performance shown represents past performance. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown. Principal value and investment returns will fluctuate, and investors shares, when redeemed, may be worth more or less than the original cost. Total returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Total return figures are based on the NAV per share applied to shareholder subscriptions and redemptions, which may differ from the NAV per share disclosed in Fund shareholder reports. Performance would have been lower if fees had not been forgone in various periods. To obtain performance data current to the most recent month end, please visit our website, The performance does not reflect the impact of sales charges, since they will not apply with respect to the purchase of the Funds by the Portfolios. The Fund performance data are net of all Fund fees and expenses, while the benchmark returns are gross of fees and expenses. ClearBridge Aggressive Growth Fund ( : 1/30/1996) (%) Fund Performance (As of December 31, 2017) QTRLY YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR SINCE INCEPTION CLASS I (SAGYX) 3.28% 14.64% 14.64% 5.24% 14.21% 8.49% 10.86% RUSSELL 3000 GROWTH INDEX % 29.59% 29.59% 13.51% 17.16% 9.93% 8.32% ANNUAL EXPENSE RATIO Gross 0.81 Net 0.81 Gross expenses are the Fund s total annual operating expenses for the share class(es) shown. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund s gross expenses, which cannot be terminated prior to December 31, 2019 without Board consent. Top 10 Holdings for ClearBridge Aggressive Growth Fund as of 12/31/17 (%) Biogen, Inc. 8.90, UnitedHealth Group Inc 8.68, Comcast Corp Class A 7.50, Amgen Inc. 6.31, Broadcom Ltd. 4.78, Allergan PLC 3.80, Anadarko Petroleum Corp 3.64, Seagate Technology 3.62, Core Laboratories N.V. 2.87, Autodesk, Inc QS U.S. Large Cap Equity Fund ( : 5/1/15) (%) Fund Performance (As of December 31, 2017) QTRLY YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR SINCE INCEPTION CLASS I (LMTIX) 7.91% 23.50% 23.50% % RUSSELL 1000 INDEX % 21.69% 21.69% % ANNUAL EXPENSE RATIO Gross 0.74 Net 0.74 Gross expenses are the Fund s total annual operating expenses for the share class(es) shown. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund s gross expenses, which cannot be terminated prior to December 31, 2019 without Board consent. Top 10 Holdings for QS U.S. Large Cap Equity Fund as of 12/31/17 (%) Apple Inc. 4.77, Alphabet Inc 2.55, Microsoft Corp 2.53, JPMorgan Chase & Co. 2.17, The Home Depot, Inc. 2.06, The Boeing Company 2.00, Facebook Inc 1.95, Cisco Systems, Inc. 1.63, PepsiCo Inc 1.60, Northrop Grumman Corp The Russell 3000 Growth Index measures the performance of those Russell 300 Index companies with higher price-to-book ratios and higher forecasted growth values. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 22 The measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 90% of the total market capitalization of the Russell 3000 Index. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges.

6 BrandywineGLOBAL - Global Opportunities Bond Fund ( : 3/19/09) (%) Fund Performance (As of December 31, 2017) QTRLY YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR SINCE INCEPTION CLASS I (GOBIX) -0.55% 12.72% 12.72% 2.62% 1.93% % FTSE WORLD GOVERNMENT BOND INDEX % 7.49% 7.49% 1.74% 0.12% % ANNUAL EXPENSE RATIO Gross 0.71 Net 0.71 Gross expenses are the Fund s total annual operating expenses for the share class(es) shown. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund s gross expenses, which cannot be terminated prior to December 31, 2018 without Board consent. Top 10 Holdings for BrandywineGLOBAL - Global Opportunities Bond Fund as of 12/31/17 (%) UNITED ST FRN 07/31/ % 10.75, UK TSY BONDS REGS % 07/22/ , NOTA DO TESOURO NACIONAL NOTES % 01/01/ , MEX BONOS DESARR FIX RT BONDS % 11/13/ , US TREASURY FRN 04/19 VAR % 04/30/ , Republic of South Africa % 02/28/ , OBRIGACOES DO TESOURO SR UNSEC % 10/15/ , MEX BONOS DESARR FIX RT BONDS % 11/18/ , AUSTRALIAN GOVERNMENT SR UNSEC % 10/21/ , MEX BONOS DESARR FIX RT BONDS % 05/31/ Brandywine GLOBAL - Diversified US Large Cap Value Fund ( : 9/7/10) (%) Fund Performance (As of December 31, 2017) QTRLY YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR SINCE INCEPTION CLASS I (LBWIX) 7.13% 19.99% 19.99% 9.90% 14.46% % RUSSELL 1000 VALUE INDEX % 13.66% 13.66% 8.65% 14.04% % ANNUAL EXPENSE RATIO Gross 0.81 Net 0.81 Gross expenses are the Fund s total annual operating expenses for the share class(es) shown. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund s gross expenses, which cannot be terminated prior to December 31, 2018 without Board consent. Top 10 Holdings for Brandywine GLOBAL - Diversified US Large Cap Value Fund as of 12/31/17 (%) Apple Inc. 4.70, JPMorgan Chase & Co. 4.11, Johnson & Johnson 4.06, Wells Fargo & Co 3.26, Wal Mart Stores Inc 3.23, Chevron Corp 2.56, Intel Corporation 2.34, Verizon Communications Inc. 2.23, Pfizer Inc 2.23, Citigroup Inc The FTSE World Government Bond Index (WGBI) measures the performance of fixed-rate, local currency, investment-grade sovereign bonds. The WGBI currently comprises sovereign debt from multiple countries, denominated in a variety of currencies. The WGBI provides a broad benchmark for the global sovereign fixed income market. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges. 24 The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.

7 QS Global Dividend Fund ( : 3/2/2015) (%) Fund Performance (As of December 31, 2017) QTRLY YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR SINCE INCEPTION CLASS I (LTTMX) 4.93% 14.84% 14.84% % MSCI ALL COUNTRY WORLD INDEX % 23.97% 23.97% % ANNUAL EXPENSE RATIO Gross 0.92 Net 0.92 Gross expenses are the Fund s total annual operating expenses for the share class(es) shown. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund s gross expenses, which cannot be terminated prior to December 31, 2018 without Board consent. Top 10 Holdings for QS Global Dividend Fund as of 12/31/17 (%) Microsoft Corp 1.53, Wal Mart Stores Inc 1.45, AbbVie, Inc. 1.45, Valero Energy Corp 1.41, Intel Corporation 1.34, Apple Inc. 1.32, McDonald s Corp. 1.29, Daito Trust Construct Co Ltd. 1.27, Waste Management Inc 1.24, Bridgestone Corp Western Asset Inflation Indexed Plus Bond Fund ( : 3/1/01) (%) Fund Performance (As of December 31, 2017) QTRLY YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR SINCE INCEPTION CLASS I (WAIIX) 1.58% 3.82% 3.82% 1.20% -0.43% 3.04% 4.77% BLOOMBERG BARCLAYS U.S. TIPS INDEX % 3.01% 3.01% 2.05% 0.13% 3.53% 5.12% ANNUAL EXPENSE RATIO Gross 0.37 Net 0.37 Gross expenses are the Fund s total annual operating expenses for the share class(es) shown. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund s gross expenses, which cannot be terminated prior to December 31, 2018 without Board consent. Top 10 Holdings for Western Asset Inflation Indexed Plus Bond Fund as of 12/31/17 (%) TSY INFL IX N/B 04/ % 11.07, US INFLATION-LINKED TREASURY NOTE % 04/15/ , US INFLATION-LINKED TREASURY BOND % 02/15/ , US INFLATION-LINKED TREASURY BOND % 01/15/ , US INFLATION-LINKED TREASURY NOTE % 07/15/ , US INFLATION-LINKED TREASURY NOTE % 01/15/ , US INFLATION-LINKED TREASURY BOND % 04/15/ , TSY INFL IX N/B 01/ % 5.97, US INFLATION-LINKED TREASURY BOND % 01/15/ , TSY INFL IX N/B 04/ % MSCI All Country World Index is a market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 45 country indices comprising 24 developed and 21 emerging market country indices. Investors cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. 26 The Bloomberg Barclays U.S. TIPS Index is an unmanaged index that measures the performance of intermediate (1 to 10 year) U.S. Treasury Inflation Protected Securities. Investors cannot invest directly in an index and unmanaged index returns do not reflect any fees, expenses or sales charges

8 Western Asset Short-Term Bond Fund ( : 2/7/96) (%) Fund Performance (As of December 31, 2017) QTRLY YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR SINCE INCEPTION CLASS I (SBSYX) 0.30% 2.46% 2.46% 1.64% 1.36% 2.07% 3.32% FTSE TREASURY/GOVERNMENT SPONSORED -0.19% 0.84% 0.84% 0.91% 0.82% 1.85% N/A CREDIT 1-3 YEAR INDEX 27 ANNUAL EXPENSE RATIO Gross 0.52 Net 0.50 Gross expenses are the Fund s total annual operating expenses for the share class(es) shown. Net expenses reflect contractual fee waivers and/or reimbursements, where these reductions reduce the Fund s gross expenses, which cannot be terminated prior to December 31, 2019 without Board consent. Top 10 Holdings for Western Asset Short-Term Bond Fund as of 12/31/17 (%) FNMA POOL BH2623 FN 08/47 FIXE % 08/01/ , GOVERNMENT NATIONAL MORTGAGE A % 07/20/ , US TREASURY N/B 12/ % 1.63, FNMA 4% TBA MBS 30yr 01/18/ , BANK OF AMERICA CORP SR UNSECU % 10/19/ , FHLMCG 3.5% TBA MBS 30yr 01/18/ , GOVERNMENT NATIONAL MORTGAGE A % 12/20/ , VISA INC SR UNSECURED 12/ % 12/14/ , FHLMC TBA 30 YR 4 GOLD SINGLE % 01/18/ , ENERGY TRANSFER PARTNERS SR UN % Mat 06/15/ The FTSE Treasury/Government Sponsored/Credit 1-3 Year Index is a broad-based index of short-term U.S. Treasury and corporate debt securities. An index does not reflect deductions for fees, expenses or taxes. Investors cannot invest directly in an index, and unmanaged index returns do not reflect any fees, expenses or sales charges Fund holdings are subject to change at any time. Current and future portfolio holdings are subject to risk. Characteristics are expressed as a percentage of net assets. The performance shown represents past performance. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown. Principal value and investment returns will fluctuate, and investors shares, when redeemed, may be worth more or less than the original cost. Total returns assume the reinvestment of all distributions at net asset value and the deduction of all Fund expenses. Total return figures are based on the NAV per share applied to shareholder subscriptions and redemptions, which may differ from the NAV per share disclosed in Fund shareholder reports. Performance would have been lower if fees had not been forgone in various periods. To obtain performance data current to the most recent month end, please visit our website, The performance does not reflect the impact of sales charges, since they will not apply with respect to the purchase of the Funds by the Portfolios. The Fund performance data are net of all Fund fees and expenses, while the benchmark returns are gross of fees and expenses. An investor should consider the Program s investment objectives, risks, charges and expenses before investing. The Program Disclosure Statement at scholars-choice.com/pds, which contains more information, should be read carefully before investing. If an investor and/or an investor s beneficiary are not Colorado taxpayers, they should consider before investing whether their home states offer 529 plans that provide state tax and other benefits such as financial aid, scholarship funds, and protection from creditors that are only available to state taxpayers investing in such plans. Investments in the Scholars Choice College Savings Program are not insured by the FDIC or any other government agency and are not deposits or other obligations of any depository institution. Investments are not guaranteed by the State of Colorado, CollegeInvest, QS Investors, LLC, Legg Mason Investor Services, LLC, or Legg Mason, Inc., or its affiliates, and they are subject to risks, including loss of principal amount invested. Legg Mason, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer s particular circumstances from an independent tax advisor.

9 Scholars Choice is a registered service mark of CollegeInvest. CollegeInvest and the CollegeInvest logo are registered trademarks. Administered and issued by CollegeInvest, State of Colorado. QS Legg Mason Global Asset Allocation, LLC is the Investment Manager and Legg Mason Investor Services, LLC is the primary distributor of interests in the Program; together they serve as Manager of the Program. QS Legg Mason Global Asset Allocation, LLC, QS Batterymarch Financial Management, Inc., Brandywine Global Investment Management, LLC, ClearBridge Investments, LLC, Western Asset Management Company, and Legg Mason Investor Services, LLC are Legg Mason, Inc. affiliates. Thornburg Investment Management, Inc. and Templeton Global Advisors Limited are not affiliated with Legg Mason, Inc. While the Cash Reserve Option will invest all of its assets in a money market mutual fund and will value its units based on the underlying money market fund share value, the Cash Reserve Portfolio itself is not a money market mutual fund. The Cash Reserve Option will not seek capital appreciation and may underperform other investment options. You could lose money by investing in this investment option. Although the money market fund in which your investment option invests (the underlying fund ) seeks to preserve its value at $1.00 per share, the underlying fund cannot guarantee it will do so. An investment in this investment option is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The underlying fund s sponsor has no legal obligation to provide financial support to the underlying fund, and you should not expect that the sponsor will provide financial support to the underlying fund at any time. RISKS All investments involve risk, including possible loss of principal. Please see the underlying funds prospectuses for more detailed risk information. Investments in small-cap companies involve a higher degree of risk and volatility than investments in larger, more established companies. Foreign securities are subject to the additional risks of fluctuations in foreign exchange rates, changes in political and economic conditions, foreign taxation, and differences in auditing and financial standards. These risks are magnified in emerging markets. Fixed income investments are subject to interest rate risk. As rates rise, the price of fixed income securities falls, reducing the value of an investment. There is also a risk that an issuer will be unable to make principal and/or interest payments. High-yield bonds are subject to increased risk of default and greater volatility due to the lower credit quality of the issues. Outperformance does not imply positive results. GENERAL DEFINITIONS Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody s Investors Service and AAA, AA, A and BBB by Standard & Poor s Ratings Service, or that have an equivalent rating by a nationally recognized statistical rating organization or are determined by the manager to be of equivalent quality. Relative performance is the return an asset achieves over a period of time compared to a benchmark. The relative return is the difference between the absolute return achieved by the asset and the return achieved by the benchmark. Gross domestic product (GDP) is the market value of all final goods and services produced within a country in a given period of time.. scholars-choice.com 2018 Legg Mason Investor Services, LLC. Member FINRA, SIPC. Legg Mason Investor Services, LLC is a subsidiary of Legg Mason, Inc SCHX /18

10 4Q 2017 Performance Summary SCHOLARS CHOICE 529 COLLEGE SAVINGS PROGRAM INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

11 Scholars Choice Performance scholars-choice.com Portfolio Class Excluding the effects of sales charges (%) Date YTD 1 Yr 3 Yr 5 Yr 10 Yr Investment Choices Automatic Allocations AVERAGE ANNUAL TOTAL RETURNS as of quarter ending 12/31/2017 Including the effects of maximum sales charges (%) YTD 1 Yr 3 Yr 5 Yr 10 Yr CALENDAR RATES OF RETURN ending 12/31 Excluding the effects of sales charges (%) Est. Expense Ratio Age-Based: 0-3 A 7/17/ B* 7/18/ C 7/17/ O 10/26/ Benchmark N/A N/A N/A Age-Based: 4-6 A 7/17/ Age-Based: 7-9 Years to Enrollment: Age-Based: Years to Enrollment: 7-9 Age-Based: Years to Enrollment: 4-6 Age-Based: Years to Enrollment: 1-3 Age-Based: 19+ Years to Enrollment: Less Than 1 B* 7/17/ C 7/18/ O 10/25/ Benchmark N/A N/A N/A A 7/17/ B* 7/17/ C 7/17/ O 11/3/ Benchmark N/A N/A N/A A 7/17/ B* 7/18/ C 7/18/ O 10/26/ Benchmark N/A N/A N/A A 7/23/ B* 7/18/ C 7/19/ O 11/8/ Benchmark N/A N/A N/A A 7/23/ B* 8/9/ C 7/19/ O 11/14/ Benchmark N/A N/A N/A A 7/19/ B* 7/27/ C 7/18/ O 12/27/ Benchmark N/A N/A N/A The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Principal value and investment returns will fluctuate, and investors units, when redeemed, may be worth more or less than the original cost. For performance data current to the most recent month end, go to scholars-choice.com. For performance data including the effects of sales charges, Class A units reflect the maximum front-end sales charge of 3.50% and the Class B units reflect the maximum deferred sales charge of 2.50%. Class C units have no initial or deferred sales charge, but are subject to a distribution fee of 0.75%. The purchase of Class O units is restricted, as disclosed in the PDS. The unaudited performance data shown is net of all fees and expenses, but does not reflect the annual $20 small account balance fee which may be applicable to certain accounts. Estimated Expense Ratio includes, as applicable, estimated underlying fund expenses, the Manager s service fee, CollegeInvest s administration fee and an annual distribution fee. Actual underlying fund expenses borne by a Portfolio may be higher or lower than the estimate of such expenses used in calculating a Portfolio s Estimated Expense Ratio. Please read the PDS for more information concerning fees and expenses. * Class B units are no longer available for purchase. However, an Account Owner who is changing investment option(s) may transfer existing Class B units of a portfolio to Class B units of another portfolio, if available. Collegelnvest currently is electing to waive 0.04% of its 0.10% administration fee commencing September 1, While such waiver continues in effect, Collegelnvest will receive an administration fee at an annual rate of 0.06% of the average daily net assets in each Portfolio. Such waiver may be reduced or terminated at any time. Portfolio returns would have been lower in the absence of such waiver.

12 Scholars Choice Performance Portfolio Class Excluding the effects of sales charges (%) Date YTD 1 Yr 3 Yr 5 Yr 10 Yr Investment Choices Static Multi-Fund Allocations AVERAGE ANNUAL TOTAL RETURNS as of quarter ending 12/31/2017 Including the effects of maximum sales charges (%) YTD 1 Yr 3 Yr 5 Yr 10 Yr scholars-choice.com CALENDAR RATES OF RETURN ending 12/31 Excluding the effects of sales charges (%) Est. Expense Ratio All Equity A 7/17/ B* 7/17/ C 7/17/ O 10/6/ Benchmark N/A N/A N/A Equity 80% A 7/17/ B* 7/18/ C 7/17/ O 10/26/ Benchmark N/A N/A N/A Balanced 50/50 A 7/17/ B* 7/18/ C 7/18/ O 10/26/ Benchmark N/A N/A N/A Fixed Income 80% A 7/23/ B* 8/9/ C 7/19/ O 11/14/ Benchmark N/A N/A N/A All Fixed Income A 7/26/ B* 7/30/ C 7/30/ O 11/1/ Benchmark N/A N/A N/A Portfolio Class Date YTD 1 Yr 3 Yr 5 Yr Investment Choices Static Multi-Fund Allocations YTD 1 Yr 3 Yr 5 Yr Est. Expense Ratio 7-Day Yield With Waiver Without Waiver Cash Reserve 1 A 8/11/ B* 9/19/ C 8/8/ O 7/29/ Benchmark N/A N/A N/A N/A N/A The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Principal value and investment returns will fluctuate, and investors units, when redeemed, may be worth more or less than the original cost. For performance data current to the most recent month end, go to scholars-choice.com. For performance data including the effects of sales charges, Class A units reflect the maximum front-end sales charge of 3.50% and the Class B units reflect the maximum deferred sales charge of 2.50%. Class C units have no initial or deferred sales charge, but are subject to a distribution fee of 0.75%. The purchase of Class O units is restricted, as disclosed in the PDS. The unaudited performance data shown is net of all fees and expenses, but does not reflect the annual $20 small account balance fee which may be applicable to certain accounts. 1 While the Cash Reserve Option will invest all of its assets in a money market mutual fund and will value its units based on the underlying money market fund share value, the Cash Reserve Portfolio itself is not a money market mutual fund. The Cash Reserve Option will not seek capital appreciation and may underperform other investment options. You could lose money by investing in this investment option. Although the money market fund in which your investment option invests (the underlying fund ) seeks to preserve its value at $1.00 per share, the underlying fund cannot guarantee it will do so. An investment in this investment option is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The underlying fund s sponsor has no legal obligation to provide financial support to the underlying fund, and you should not expect that the sponsor will provide financial support to the underlying fund at any time. Current 7-day yield represents net interest income generated by the investments for the past seven days and assumes that the same income is generated each week over a 365-day period. The 7-day yield more closely reflects current portfolio earnings than does total returns. The with waiver 7-day yield shown for the Cash Reserve Portfolio reflects the Program Manager s voluntary waiver of all or a portion of its service fee and Collegelnvest s waiver of all or a portion of its administration fee, as described above. Such waivers may be reduced or terminated at any time. Returns for the Cash Reserve Portfolio would have been lower in the absence of such waivers.

13 Scholars Choice Performance Portfolio Class Excluding the effects of sales charges (%) Date YTD 1 Yr 3 Yr 5 Yr 10 Yr Investment Choices Individual Fund Portfolios U.S. Aggressive Equity AVERAGE ANNUAL TOTAL RETURNS as of quarter ending 12/31/2017 Including the effects of maximum sales charges (%) YTD 1 Yr 3 Yr 5 Yr 10 Yr scholars-choice.com CALENDAR RATES OF RETURN ending 12/31 Excluding the effects of sales charges (%) Est. Expense Ratio A 8/31/ N/A N/A C 8/31/ N/A N/A O 8/31/ N/A N/A Benchmark N/A N/A N/A N/A N/A U.S. Core Equity A 8/31/ N/A N/A U.S. Small Cap Equity International Equity Global Fixed Income C 8/31/ N/A N/A O 8/31/ N/A N/A Benchmark N/A N/A N/A N/A N/A A 8/31/ N/A N/A C 8/31/ N/A N/A O 8/31/ N/A N/A Benchmark N/A N/A N/A N/A N/A A 8/31/ N/A N/A C 8/31/ N/A N/A O 8/31/ N/A N/A Benchmark N/A N/A N/A N/A N/A A 8/31/ N/A N/A C 8/31/ N/A N/A O 8/31/ N/A N/A Benchmark N/A N/A N/A N/A N/A The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Principal value and investment returns will fluctuate, and investors units, when redeemed, may be worth more or less than the original cost. For performance data current to the most recent month end, go to scholars-choice.com. For performance data including the effects of sales charges, Class A units reflect the maximum front-end sales charge of 3.50% and the Class B units reflect the maximum deferred sales charge of 2.50%. Class C units have no initial or deferred sales charge, but are subject to a distribution fee of 0.75%. The purchase of Class O units is restricted, as disclosed in the PDS. The unaudited performance data shown is net of all fees and expenses, but does not reflect the annual $20 small account balance fee which may be applicable to certain accounts.