WILMINGTON TRUST COLLECTIVE INVESTMENT TRUST FOR EMPLOYEE BENEFIT PLANS INTERNATIONAL GROWTH PORTFOLIO

Transcription

1 WILMINGTON TRUST COLLECTIVE INVESTMENT TRUST FOR EMPLOYEE BENEFIT PLANS INTERNATIONAL GROWTH PORTFOLIO FINANCIAL STATEMENTS (PREPARED ON THE LIQUIDATION BASIS OF ACCOUNTING) FOR THE PERIOD FROM SEPTEMBER 1, 2016 TO APRIL 30, 2017 WITH INDEPENDENT AUDITOR'S REPORT

2 CONTENTS Independent Auditor's Report... 1 Schedule of Investments in Liquidation... 3 Statement of Assets and Liabilities in Liquidation... 6 Statement of Operations in Liquidation... 6 Statement of Changes in Net Assets in Liquidation... 7 Financial Highlights in Liquidation... 8 Notes to the Financial Statements in Liquidation... 9

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 the (the "Portfolio"), a separate fund of Wilmington Trust Collective Investment Trust, which comprise the Statement of Assets and Liabilities in Liquidation, including the Schedule of Investments in Liquidation, as of April 30, 2017, and the related Statements of Operations in Liquidation, Changes in Net Assets in Liquidation, and the Financial Highlights in Liquidation for the period from September 1, 2016 to, and the related Notes to the Financial Statements in Liquidation. These financial statements and Financial Highlights are hereafter 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit 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 opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets in liquidation of the as of, and the results of its operations in liquidation, changes in its net assets in liquidation and its financial highlights in liquidation for the period from September 1, 2016 to, in accordance with accounting principles generally accepted in the United States of America. 1

4 Emphasis of Matter As discussed in Note 1 to the financial statements, the Trustee approved the liquidation of the International Growth Portfolio and the termination of the Trust subsequent to. As a result, the Portfolio has changed its basis of accounting from the going concern basis to the liquidation basis. Other Matter Our audit was 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 period from September 1, 2016 to April 30, 2017, following the Schedule of Investments in Liquidation, 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 audit 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 August 31,

5 Schedule of Investments in Liquidation Principal Amount or Fair Units Cost Value Common Stocks % Communications % Just Eat PLC 120,000 $ 835,308 $ 895,792 LINE Corporation 20, , ,460 Total Communications 1,728,771 1,589,252 Consumer, Cyclical % Delphi Automotive PLC 12, , ,800 MercadoLibre, Inc. 3, , ,730 Start Today Company Ltd 40, , ,041 Total Consumer, Cyclical 1,666,188 2,505,571 Consumer, Non-cyclical % Dollarama, Inc. 9, , ,587 Reckitt Benckiser Group PLC 7, , ,989 Total Consumer, Non-cyclical 914,317 1,476,576 Energy % Amec Foster Wheeler PLC 130,000 1,282, ,258 Noble Group Ltd 5,000,000 1,921, ,555 Total Energy 3,204,065 1,424,813 Financial % Azimut Holding SpA 50,000 1,012, ,699 Deutsche Boerse AG 8, , ,658 KBC Group NV 12, , ,107 Worldpay Group PLC 210, , ,062 Total Financial 3,038,458 3,488,526 Healthcare % Alkermes PLC 15, , ,750 Cochlear Ltd 8, , ,874 CSL Ltd 9, , ,147 GN Store Nord A/S 35, , ,129 Hikma Pharmaceuticals PLC 30, , ,798 Roche Holding AG 3, , ,469 Santen Pharmaceutical Company Ltd 55, , ,168 Total Healthcare 4,996,509 5,822,335 See Notes to the Financial Statements in Liquidation. 3

6 Schedule of Investments in Liquidation (continued) Principal Amount or Fair Units Cost Value Common Stocks % (continued) Industrial % DSV A/S 16,000 $ 474,931 $ 891,153 Experian PLC 40, , ,532 Ferguson PLC 12, , ,346 GEA Group AG 22, , ,277 MTU Aero Engines AG 5, , ,801 The Weir Group PLC 35,000 1,068, ,550 UMICORE SA 12, , ,373 Total Industrial 4,960,527 5,767,032 Material % Koninklijke DSM NV 12, , ,136 Symrise AG 12, , ,842 Total Material 1,429,896 1,697,978 Technology % SAP SE 9, , ,336 Sophos Group PLC 180, , ,816 The Sage Group PLC 100, , ,812 Total Technology 1,921,563 2,556,964 Total Common Stocks 23,860,294 26,329,047 Depositary Receipts % Consumer, Cyclical % Vishop Holdings, Ltd (1) 65, , ,550 Consumer, Non-cyclical % TAL Education Group (1) 7, , ,770 Total Depositary Receipts 1,071,910 1,735,320 Total Investments % $ 24,932,204 28,064,367 Other Assets in Excess of Liabilities % 982,646 Net Assets in Liquidation - 100% $ 29,047,013 (1) American Depositary Receipt See Notes to the Financial Statements in Liquidation. 4

7 Schedule of Investments in Liquidation (continued) The following table summarizes how the Portfolio's investments are broken down by country of issuance as a percentage of net assets of the Portfolio: Percentage Country of Issuer Fair Value of Net Assets United Kingdom $ 7,693, % Germany 4,225, % Japan 2,320, % Denmark 1,801, % China 1,735, % Australia 1,729, % Belgium 1,568, % Switzerland 1,545, % Italy 975, % Ireland 873, % Netherlands 858, % Canada 786, % Jordan 751, % Argentina 686, % Hong Kong 511, % $ 28,064, % The following shows the fair value of the investments in the Portfolio based on the inputs used to value it as of (see Note 2): Fair Value Measurements Level 1 Level 2 Level 3 Total Common Stocks $ 26,329,047 $ - $ - $ 26,329,047 Depositary Receipts 1,735, ,735,320 Total $ 28,064,367 $ - $ - $ 28,064,367 During the period from September 1, 2016 to, the Portfolio did not hold any Level 3 securities. The Portfolio recognizes transfers between the fair value hierarchy levels as of the beginning of the period. There were no transfers between any of the fair value hierarchy levels during the period. SUPPLEMENTARY INFORMATION: The following is a breakdown of the total purchases, sales, and realized loss for the Portfolio for the period from September 1, 2016 to : Purchases Sale Realized at Cost Proceeds Loss Securities $ 4,422,972 $ 13,274,671 $ (59,606) See Notes to the Financial Statements in Liquidation. 5

8 Statement of Assets and Liabilities in Liquidation Assets Investment in securities, at fair value (cost $24,932,204) $ 28,064,367 Foreign currency (cost $5,688) 5,707 Dividends receivable 486,161 Receivable for investments sold 1,451,270 Receivable for participant units sold 5,175 Total assets 30,012,680 Liabilities and Net Assets Payable to custodian 878,842 Payable for participant units purchased 48,617 Accrued expenses 38,208 Total liabilities 965,667 Net assets in liquidation $ 29,047,013 Statement of Operations in Liquidation For the period from September 1, 2016 to Investment income Dividends (net of withholding taxes of $13,004) $ 355,390 Interest income 132 Miscellaneous income 1,678 Total investment income 357,200 Expenses Trustee, investment management, and service provider fees 15,550 Professional fees and other operating expenses 27,143 Total expenses 42,693 Net investment income 314,507 Realized and unrealized gain (loss) on investments and foreign currency transactions Net realized loss on investments (59,606) Net realized loss on foreign currency transactions (5,573) Net change in unrealized appreciation on investments 3,301,809 Net change in unrealized appreciation on foreign currency transactions 19 Net realized and unrealized gain on investments 3,236,649 Net increase in net assets resulting from operations $ 3,551,156 See Notes to the Financial Statements in Liquidation. 6

9 Increase (decrease) in net assets resulting from operations Net investment income $ 314,507 Net realized loss on investments (59,606) Net realized loss on foreign currency transactions (5,573) Net change in unrealized appreciation on investments 3,301,809 Net change in unrealized appreciation on foreign currency transactions 19 Net increase in net assets resulting from operations 3,551,156 Portfolio Unit Transactions Proceeds from units issued Class 0IM 2,840,250 Class 35^ 467,744 Class 45* 5,912 Class ,025 Total proceeds from units issued 4,093,931 Value of units redeemed Class 0IM (12,619,402) Class 35^ (9,582) Class 45* (343,577) Class 60 (613,731) Total value of units redeemed (13,586,292) Decrease in net assets resulting from portfolio unit transactions (9,492,361) Net decrease in net assets (5,941,205) Net assets, beginning of period 34,988,218 Net assets in liquidation, end of period $ 29,047,013 ^Class 35 funded on 10/24/2016. ^All Class 45 units were redeemed on 10/31/2016. Statement of Changes in Net Assets in Liquidation For the period from September 1, 2016 to See Notes to the Financial Statements in Liquidation. 7

10 Financial Highlights in Liquidation For the period from September 1, 2016 to Per Unit Operating Performance Class 0IM Class 35 Class 45 Class 60 Net asset value, beginning of period or at inception $ $ $ $ Income (loss) from investment operations: Net investment income (loss) (1) (0.002) Net realized and unrealized gain on investments and foreign currency transactions (1) Total income from investment operations Net asset value in liquidation, end of period $ $ $ * $ Total Return % % ^ 1.481%* % Supplemental Data Ratio to average net assets: (2)(3) Expenses 0.147% 0.591% ^ 0.222% * 0.932% Net investment income (loss) 1.021% 0.453% ^ (0.008%) * 0.208% Fund Unit Activity Units, beginning of period 1,440,855-15,371 26,449 Issued 119,427 19, ,408 Redeemed (525,045) (384) (15,630) (26,887) Units, end of period 1,035,237 19,608-33,970 (1) Based on average units outstanding. (2) The ratios do not include certain Trustee fees which are calculated and paid outside the Trust. Please refer to Note 4 of the Notes to the Financial Statements in Liquidation. (3) Not annualized. ^Class 35 funded on 10/24/2016. *All Class 45 units were redeemed on 10/31/2016. The net asset value is as of the redemption date of 10/31/2016. See Notes to the Financial Statements in Liquidation. 8

11 Notes to the Financial Statements in Liquidation Note 1 Organization and Plan of Liquidation Organization Wilmington Trust Fiduciary Services Company Collective Investment Trust for Employee Benefit Plans (the "Trust") was created pursuant to a declaration of trust dated February 2, 1987, as last amended June 20, Wilmington Trust Fiduciary Services Company served as the Trustee of the Trust. Effective September 1, 2016, Wilmington Trust Fiduciary Services Company merged with and into its parent corporation, Wilmington Trust, National Association. From and after that date, the Trustee is Wilmington Trust, National Association (the "Trustee"). The Declaration of Trust was further amended, effective September 1, 2016, to change the name of the Trust to Wilmington Trust Collective Investment Trust and to state that the Trust is governed by the laws of the State of Delaware, except to the extent preempted or superseded by the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or other governing federal law. M&T Bank Corporation is the ultimate parent of the Trustee. The Trustee is responsible for maintaining and administering the Trust and its various portfolios and also serves as the investment adviser (the "Investment Adviser") to the portfolios. State Street Bank and Trust Company provides transfer agency services for the Trust and its portfolios. 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 investment portfolios 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 materials specified by the Trustee. The (the "Portfolio") is one of the portfolios of the Trust. The Portfolio was created during February 1993 by the Trustee, with the objective to generate a total return in excess of the benchmark, the MSCI ACWI ex-usa Growth Index, over a full market cycle. The Trustee has appointed Franklin Templeton Institutional, LLC as Sub-Advisor to the Portfolio. State Street Bank and Trust Company is the custodian of the Portfolio. The Portfolio offers multiple unit classes. 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 unit class based on the units outstanding for the unit class in proportion to the total outstanding units. Plan of Liquidation The Trustee approved a plan of liquidation and concluded liquidation was imminent as defined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") subtopic , Liquidation Basis of Accounting. Under the plan of liquidation, the Portfolio plans to use its assets to satisfy the Portfolio's obligations and pay the final redemption distribution to unit holders. As a result, the Portfolio changed its basis of accounting from the going concern basis to the liquidation basis of accounting effective September 1,

12 Notes to the Financial Statements in Liquidation (continued) Under the liquidation basis of accounting, assets are measured at the estimated amount of cash or other consideration that the Portfolio expects to collect in settling or disposing of those assets, and liabilities are measured at their estimated settlement amount, including costs that the Portfolio expects to incur through the end of its liquidation (liquidation value). Based on the nature of the Portfolio's assets as of, fair value approximates liquidation value. The use of the liquidation basis of accounting is substantially similar to the basis of accounting that the Portfolio had applied prior to the use of the liquidation basis of accounting. Therefore, the Trustee believes the adoption of the liquidation basis of accounting did not have a material effect on the carrying values of assets and liabilities as of. Note 2 Significant Accounting Policies The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the Trust agreement which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Net Asset Value ("NAV") Units of each fee class of the Portfolio 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 Portfolio, less its liabilities, by the total number of units outstanding at the time of such computation. Investment income earned is reinvested in the Portfolio and included in the determination of unit values. Cash The Portfolio maintains its cash, if any, in custody at State Street Bank and Trust Company. Security Valuation Portfolio securities are valued at their current fair value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, such securities are fair valued in good faith in accordance with the Trust valuation procedures established by the Trustee. In general, the fair values of securities which are readily available and deemed reliable are determined as follows: Securities listed on a national securities exchange (other than securities listed on the NASDAQ OMX Group, Inc. ("NASDAQ")) are valued at the last sale price at the close of the exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price. Securities traded in the overthe-counter market ("OTC") are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources. Investments in money market funds are valued at the daily closing net asset value of the respective fund, which approximates fair value. There were no changes to the Portfolio's valuation policies during the period. 10

13 Notes to the Financial Statements in Liquidation (continued) Foreign Currency Translation The accounting records of the Portfolio are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars using foreign currency exchange rates determined as of the close of regular trading on the New York Stock Exchange. Purchases and sales of Portfolio securities, commitments under forward foreign currency contracts and income receipts are translated at the prevailing exchange rate as of the date of each transaction. Realized and unrealized gain or loss on the translation of foreign currency denominated investments is included as a component of net realized and unrealized gain or loss on investments in the Statements of Operations in Liquidation. Realized gain or loss on foreign currency transactions may include gains and losses from sales and maturities of foreign currency exchange contracts, gains and losses realized between the trade and settlement dates of foreign security transactions or the difference between the amount of net investment income accrued on foreign securities and the U.S. dollar amount actually received. Unrealized gain or loss on foreign currency transactions include gains and losses due to changes in the value of assets and liabilities, other than Portfolio securities, resulting from changes in exchange rates. Certain foreign exchange gains and losses included in realized and unrealized gains and losses are included in or are a reduction of ordinary income in accordance with U.S. federal income tax regulations. Security Transactions and Related Investment Income and Expense Security transactions are accounted for on the trade date (the date the order to buy or sell is executed). Interest income and expense, adjusted for the accretion of discounts and amortization of premiums, are recorded on the accrual basis. Dividend income is recognized on the ex-dividend date, net of withholding, except for certain dividends from foreign securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Portfolio. Costs used in determining realized gains (losses) on the security transactions are calculated on a first-in, first-out basis. Withholding taxes on foreign dividends have been provided for in accordance with the Portfolio's understanding of the applicable country's tax regulations and rates. Units Issued and Redeemed Unit purchases and redemptions are transacted at the net asset value per unit of the Portfolio determined as of the close of each business day. The Portfolio issues new units and repurchases outstanding units on a daily basis at the net asset value per unit. Each participating plan may withdraw, in whole or in part, amounts from its account, upon notice to the Trustee. Investment income earned is retained in the Portfolio and included in the determination of unit values. Fair Value Measurements In accordance with ASC 820, fair value is defined as the price that the Portfolio would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Portfolio's investments are categorized based on the priority of the inputs to the valuation technique into a threelevel fair value hierarchy. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Financial assets and liabilities are recorded based on the three levels of the fair value hierarchy as follows: Level 1 - Unadjusted quoted prices in active markets at the measurement date for identical securities. Level 2 - Other prices in markets that are not active or based on quoted prices for similar assets or liabilities, or for which all significant inputs are observable, directly or indirectly. 11

14 Notes to the Financial Statements in Liquidation (continued) Level 3 - Significant unobservable inputs (including the Trustee's own assumptions in determining the value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The aggregate fair value of the investments in the Portfolio by input level used as of, is included following the Schedule of Investments in Liquidation. Note 3 Income Tax Status Income Taxes The Trust is a qualified trust under Section 401(a) of the Code and, because of this qualification, no provision for income taxes is required. It is intended that the Trust and the Portfolio be exempt from taxation under Section 501(a) of the Code and qualify as a "group trust" under Revenue Ruling and other applicable Internal Revenue Service rules and regulations. 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 Portfolio's 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 more-likely-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 for all open tax years for the Portfolio since the Portfolio's inception and has determined that the Portfolio's tax positions are deemed to be "more-likelythan-not" as of. The Trust's federal fiduciary tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service. The Portfolio did not accrue any interest or penalties related to uncertain tax liabilities as of. Note 4 Fees and Expenses Expenses 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. Except as otherwise noted, all asset-based fees are paid from the assets of the Portfolio. Fees by class are presented as a percentage of net assets: Unit Class Trustee Fee Management Fee Service Provider Fee Unit Class 0IM 0.03% 0.00% 0.00% Unit Class % 0.51% on first $100m 0.49% on $100m-$250m 0.48% on $250m-$500m 0.46% on $500m-$750m 0.45% thereafter 0.35% 12

15 Notes to the Financial Statements in Liquidation (continued) Unit Class Trustee Fee Management Fee Service Provider Fee Unit Class % 0.51% on first $100m 0.49% on $100m-$250m 0.48% on $250m-$500m 0.46% on $500m-$750m 0.45% thereafter Unit Class % 0.51% on first $100m 0.49% on $100m-$250m 0.48% on $250m-$500m 0.46% on $500m-$750m 0.45% thereafter 0.45% 0.60% Trustee Fee The Trustee receives an annual fee for trustee and administrative services provided to the Portfolio. Trustee fees, except as noted below with respect to Class 0IM, are based upon the average daily value of the Portfolio and are accrued daily, paid quarterly in arrears and charged against the assets invested in the Portfolio. Such Trustee Fees for the period from September 1, 2016 to, were $7,121. Plans invested in Class 0IM have agreed to pay external fees that are paid either by redemption of Portfolio units or paid directly by the plan sponsor. Portions of external fees are paid by the Trustee to MG Trust Company ("Matrix Trust Company") for its services as plan trustee and to the Sub-Advisor. These fees are not charged to the Portfolio; they are calculated on month-end net assets and paid by the plan or plan sponsor. Management Fee The Sub-Advisor is compensated for its investment advisory services provided to the Portfolio. Management fees, except as noted below with respect to Class 0IM, are based upon the average daily value of the Portfolio and are accrued daily, paid quarterly in arrears and charged against the assets invested in the Portfolio. Plans in Class 0IM (or their plan sponsors) paid a management fee of 0.34% based on the month-end values of the Portfolio. These fees are not reflected in the Portfolio's expense ratio. For Class 0IM, the actual expense ratio including management fees incurred would be 0.49%. Service Provider Fee Service provider fees, if any, are used to compensate other service providers to the Portfolio, including brokers and financial intermediaries and other parties providing services to retirement plans participating in the Portfolio. Service provider fees may also be paid to plan service providers, such as third-party administrators and record keepers that provide sub-transfer agency, record keeping and other administrative services to participating plans invested in the Portfolio. Payments of service provider fees are made at the direction of the plan. Fund Operating Expenses In addition to the fees described above, the Portfolio bears expenses related to its operations, including, but not limited to, audit, custody, tax and legal services. Expenses incurred in connection with the investment and reinvestment of Portfolio assets, including, without limitation, transfer agency fees and other expenses, are also charged against the Portfolio. 13

16 Notes to the Financial Statements in Liquidation (continued) Note 5 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 6 Indemnification The Trust's organizational documents provide limited indemnification for the Trustee, and its directors, officers, employees, and agents against liabilities arising in connection with the performance of their duties to the Trust. The Trust's maximum exposure under this arrangement is unknown as this would be dependent on future claims that may be made against the Trust. The risk of material loss from such claims is considered remote. Note 7 Risks Associated with Investing in the Portfolio In the normal course of business, the Portfolio trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the fair value of the Portfolio. Currency risk. Investments in securities traded in foreign currencies or more directly in foreign currencies are subject to the risk that the foreign currency will decline in value relative to the U.S. dollar, which may reduce the value of the Portfolio. Investments in currency hedging positions are subject to the risk that the value of the U.S. dollar will decline relative to the currency being hedged, which may result in a loss of money on the investment as well as the position designed to act as a hedge. Cross-currency hedging strategies and active currency positions may increase currency risk because actual currency exposure may be substantially different from that suggested by the Portfolio's holdings. Emerging markets risk. Investments in emerging- and frontier-markets securities may be subject to greater market, credit, currency, liquidity, legal, political, and other risks compared with assets invested in developed foreign countries. Foreign securities risk. Investments in foreign securities may be subject to increased volatility as the value of these securities can change more rapidly and extremely than the value of U.S. securities. Factors that increase the risk of investing in foreign securities include but are not limited to the following: less public information about issuers of non- U.S. securities, less governmental regulation and supervision over the issuance and trading of securities, the unavailability of financial information regarding the non-u.s. issuer or the difficulty of interpreting financial information prepared under non-u.s. accounting standards, less liquidity, the imposition of withholding and other taxes, and adverse political, social or diplomatic developments. In addition, foreign securities are subject to increased costs because there are generally higher commission rates on transactions, transfer taxes, higher custodial costs, and the potential for foreign tax charges on dividend and interest payments. Many foreign markets are relatively small, and securities issued in less-developed countries face the risks of nationalization, expropriation or confiscatory taxation, and adverse changes in investment or exchange control regulations, including suspension of the ability to transfer 14

17 Notes to the Financial Statements in Liquidation (continued) currency from a country. Economic, political, social, or diplomatic developments can also negatively impact performance. Growth investing risk. 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 risk. 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 risk. 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. Management risk. Performance is subject to the risk that the Sub-Advisor's asset allocation and investment strategies do not perform as expected, which may cause the Portfolio to underperform its benchmark, other investments with similar objectives, or the market in general. The investment is subject to the risk of loss of income and capital invested, and the Sub-Advisor does not guarantee its value, performance, or any particular rate of return. Market/market volatility risk. The market value of the Portfolio's securities may fall rapidly or unpredictably because of changing economic, political, or market conditions, which may reduce the value of the Portfolio. Restricted/illiquid securities risk. Restricted and illiquid securities may fall in price because of an inability to sell the securities when desired. Investing in restricted securities may subject the Portfolio to higher costs and liquidity risk. Note 8 Subsequent Events The Trustee has evaluated the effects of subsequent events on the Portfolio's financial statements through August 31, 2017, which is the date the financial statements were available to be issued, and has determined that there are no material subsequent events, other than the event mentioned below, that would require adjustment or disclosure in the Portfolio's financial statements through this date. Subsequent to, the of the Trust was merged with and into the International Growth Fund, a fund of the Wilmington Trust Collective Investment Trust. The Collective Investment Fund Management Committee approved the liquidation of the and the termination of the Trust subsequent to. 15