Presentation Materials

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1 Fairfax County Public Schools Third Quarter 2017 Presentation Materials Visit the Aon Hewitt Retirement and Investment Blog ( sharing our best thinking.

2 Contact Information Gregory J. Fox, CFA Senior Consultant Aon Hewitt Investment Consulting, Inc. 201 Merritt 7, STE 2 Norwalk, CT t +1 (203) f +1 (847) gregory.fox@aonhewitt.com Matthew C. Stone Consultant Aon Hewitt Investment Consulting, Inc. 201 Merritt 7, STE 2 Norwalk, CT t +1 (203) f +1 (203) matthew.stone.2@aonhewitt.com Robert Leal Investment Analyst Aon Hewitt Investment Consulting, Inc. 201 Merritt 7, STE 2 Norwalk, CT t +1 (203) f +1 (203) robert.leal@aonhewitt.com

3 Market Highlights SHORT TERM RETURNS AS OF 09/30/ % 20% 18.6% 20.7% 19.1% 22.5% Third Quarter 2017 One-Year 15% 10% 7.9% 4.5% 5.7% 5.4% 5% 0% -5% -10% S&P 500 Russell 2000 MSCI EAFE MSCI Emerging Markets Source: Russell, MSCI, Bloomberg Barclays, Bloomberg 0.8% 0.1% 0.6% Bloomberg Barclays Aggregate -6.1% Bloomberg Barclays Long Gov't 8.9% 2.2% 2.9% 2.0% 2.5% Bloomberg Barclays Long Credit Bloomberg Barclays High Yield -0.3% Bloomberg Commodity Index LONG TERM ANNUALIZED RETURNS AS OF 09/30/ % 14.2% 13.8% 15% Five-Year Ten-Year 10% 5% 7.4% 7.8% 8.4% 4.0% 1.3% 1.3% 4.3% 2.1% 2.9% 6.8% 7.6% 7.8% 6.4% 4.7% 0% -5% -10% -15% S&P 500 Russell 2000 MSCI EAFE MSCI Emerging Markets Source: Russell, MSCI, Bloomberg Barclays, Bloomberg Bloomberg Barclays Aggregate Bloomberg Barclays Long Gov't Bloomberg Barclays Long Credit Bloomberg Barclays High Yield -10.5% -6.8% Bloomberg Commodity Index Page 1

4 Market Highlights Returns of the Major Capital Markets Period Ending 09/30/2017 Third Quarter Year-to- Date 1-Year 3-Year 1 5-Year 1 10-Year 1 Equity MSCI All Country World IMI 5.32% 17.24% 18.73% 7.72% 10.42% 4.18% MSCI All Country World 5.18% 17.25% 18.65% 7.43% 10.20% 3.88% Dow Jones U.S. Total Stock Market 4.57% 13.95% 18.66% 10.69% 14.15% 7.64% Russell % 13.91% 18.71% 10.74% 14.23% 7.57% S&P % 14.24% 18.61% 10.81% 14.22% 7.44% Russell % 10.94% 20.74% 12.18% 13.79% 7.85% MSCI All Country World ex-u.s. IMI 6.27% 21.47% 19.55% 5.16% 7.32% 1.59% MSCI All Country World ex-u.s. 6.16% 21.13% 19.61% 4.70% 6.97% 1.28% MSCI EAFE 5.41% 19.96% 19.10% 5.04% 8.38% 1.34% MSCI EAFE (Local Currency) 3.36% 11.16% 19.02% 7.87% 12.26% 2.62% MSCI Emerging Markets 7.89% 27.78% 22.46% 4.90% 3.99% 1.32% Fixed Income Bloomberg Barclays Global Aggregate 1.76% 6.25% -1.26% 1.30% 0.48% 3.31% Bloomberg Barclays Aggregate 0.85% 3.14% 7% 2.71% 2.06% 4.28% Bloomberg Barclays Long Gov't 0.59% 6.06% -6.15% 4.84% 2.87% 6.83% Bloomberg Barclays Long Credit 2.17% 8.75% 2.88% 5.98% 4.71% 7.62% Bloomberg Barclays Long Gov't/Credit 1.53% 7.65% -0.79% 5.45% 3.94% 7.36% Bloomberg Barclays US TIPS 0.86% 1.72% -0.72% 1.62% 2% 3.90% Bloomberg Barclays High Yield 1.98% 7.00% 8.88% 5.83% 6.37% 7.84% Citi Group Non-U.S. WGBI 2.57% 8.63% -3.14% 0.47% -1.07% 2.67% JP Morgan EMBI Global (Emerging Markets) 2.38% 8.73% 4.15% 6.05% 4.32% 7.28% Commodities Bloomberg Commodity Index 2.52% -2.87% -0.29% % % -6.83% Goldman Sachs Commodity Index 7.22% -3.76% 1.79% % % -12% Hedge Funds HFRI Fund-Weighted Composite % 5.70% 6.95% 3.34% 4.67% 3.06% HFRI Fund of Funds % 5.52% 6.43% 2.21% 3.84% 1.07% Real Estate NAREIT U.S. Equity REITS 0.94% 3.67% 0.67% 9.86% 9.69% 5.83% NCREIF NFI - ODCE % 5.43% 7.66% 10.85% 11.59% 5.03% Private Equity Burgiss Private iq Global Private Equity 4 NA NA 12.92% 9.63% 11.68% 8.98% Infrastructure FTSE Global Core Infrastructure Index 2.20% 11.92% 8.76% 3.27% 6.97% 3.66% MSCI Indices show net returns. All other indices show total returns. 1 Periods are annualized. 2 Latest 5 months of HFR data are estimated by HFR and may change in the future. 3 Third quarter results are preliminary. 4 Source: Burgiss Private iq. Benchmark is as of 03/31/2017. Page 2

5 Global Equity Markets GLOBAL MSCI IMI INDEX RETURNS AS OF 09/30/ % 20% 18.7% 19.6% 17.9% Third Quarter % 14.9% One-Year 13.8% 25.9% 13.7% 21.4% 10% 5.3% 6.3% 4.4% 5.6% 4.4% 7.5% 7.2% 3.7% 7.6% 0% -2.6% -10% Source: MSCI ACWI IMI 48.3% ACWI ex-u.s. IMI 51.7% USA IMI 6.0% UK IMI 8.1% Japan IMI 3.2% Canada IMI -8.2% 0.2% Israel IMI 15.4% Europe ex-uk IMI 3.9% Pacific ex-japan IMI 11.5% Emerging Markets IMI Evidence of improving global growth and low inflation continued to sustain the global equity market rally over the last quarter. Moreover, markets were broadly unperturbed by heightened tensions between the U.S. and North Korea. Global equity markets returned 5.3% in Q in U.S. dollar terms. The broad weakening of the U.S. dollar (1.7% in trade-weighted terms) led to a lower return of 4.5% in local currency terms. All regions shown above generated positive returns with the exception of Israel which moved sharply lower over the quarter. Emerging markets (EM) were once again the strongest performers, returning 7.6% in the third quarter of Page 3

6 Global Equity Markets MSCI ALL COUNTRY WORLD IMI INDEX GEOGRAPHIC ALLOCATION AS OF 09/30/2017 Pacific ex-japan Canada 3.9% 3.2% Japan 8.1% UK 6.0% Europe ex-uk 15.4% Israel 0.2% Latin America 1.5% MSCI ALL COUNTRY WORLD EX-U.S. IMI INDEX GEOGRAPHIC ALLOCATION AS OF 09/30/2017 Europe ex-uk 31.9% Israel 0.4% Latin America 3.0% Emerging Markets 11.5% Asia 8.4% Japan 16.7% Emerging Markets 23.8% Asia 17.4% Source: MSCI USA 51.7% Eastern Europe, Middle East & Africa 1.6% Pacific ex-japan 8.1% Source: MSCI Canada 6.7% UK 12.4% Eastern Europe, Middle East & Africa 3.3% The two exhibits on this slide illustrate the percentage that each country/region represents of the global and international equity markets as measured by the MSCI All Country World IMI Index and the MSCI All Country World ex-u.s. IMI Index, respectively. Page 4

7 U.S. Equity Markets RUSSELL STYLE RETURNS AS OF 09/30/ % 2% 15.0% 1% 5.0% % 4.6% 18.7% Russell % Source: Russell Indexes 16.0% 31.6% Large Value 6.1% 23.4% 34.6% Large Growth 2.1% 13.4% 14.7% Medium Value Third Quarter 2017 One-Year 17.8% 5.3% 5.1% 11.2% Medium Growth 20.5% 21.0% 3.8% Small Value 6.2% 4.0% Small Growth RUSSELL GICS SECTOR RETURNS AS OF 09/30/2017 3% 25.0% 2% 15.0% 1% 5.0% % 4.6% 18.7% 8.0% 28.2% 16.1% 15.3% 3.8% 1.8% 3.3% -5.0% -1.9% Russell 18.9% 13.8% 13.4% 6.5% 3000 Technology Healthcare Cons. Disc Cons. Source: Russell Indexes Staples Third Quarter 2017 One-Year 6.8% 5.6% 5.5% 4.9% 4.2% -1.0% 5.8% Energy 21.5% 24.2% 4.0% 11.0% Materials & Producer Processing Durables 26.9% 21.4% Financial Services 7.9% 5.1% Utilities The Russell 3000 Index returned 4.6% during the third quarter and 18.7% over the one-year period. During the third quarter, the technology sector continued to be the strongest performer, posting returns of 8.0%. Consumer staples were the weakest and the only sector which posted negative returns in Q by falling 1.9%. Performance was positive across the market capitalization spectrum over the quarter. Renewed expectations for U.S. tax reform, announced late in the quarter, provided a boost for small cap stocks which outperformed their large cap peers. However, despite the recent outperformance, small cap stocks still lagged large cap stocks since the start of the year. In general, growth stocks outperformed value stocks. Page 5

8 U.S. Fixed Income Markets BLOOMBERG BARCLAYS U.S. AGGREGATE RETURNS BY MATURITY AS OF 9/30/2017 BLOOMBERG BARCLAYS U.S. AGGREGATE RETURNS BY QUALITY AND HIGH YIELD RETURNS AS OF 9/30/ % 1% Third Quarter 1.5% Third Quarter 8.9% 1.5% One-Year 8.0% One-Year 0.9% 1.0% 1.0% 0.7% 0.6% 6.0% 0.3% 0.4% 0.5% % 4.0% 3.2% % -0.5% 0.6% 1.0% 1.3% 1.6% 2.0% 2.0% 1.4% 0.4% -1.0% % -1.5% -1.0% -2.0% -0.7% -1.3% 1-3 Yr. 3-5 Yr. 5-7 Yr Yr. >10 Yr. Aaa Aa A Baa High Yield Source: Bloomberg Barclays Source: Bloomberg Barclays The Bloomberg Barclays U.S. Aggregate Bond Index returned 0.9% in the third quarter. Credit spreads narrowed over the quarter which supported corporate bond returns. Corporate bonds posted the highest return at 1.3%, particularly outperforming government bonds which had the lowest return of only 0.4%. High yield bonds outperformed their investment grade bond peers, returning nearly 2.0%. Long duration bonds outperformed intermediate and short duration bonds through the quarter. BLOOMBERG BARCLAYS U.S. AGGREGATE RETURNS BY SECTOR AS OF 9/30/ % 2.0% 1.5% 1.0% 0.5% % -0.5% -1.0% -1.5% -2.0% 0.9% 0.1% 0.4% -1.6% Barclays 43.9% U.S. Agg. Gov't Source: Bloomberg Barclays 1.3% 2.2% 25.6% Corp. 1.0% 0.3% 28.2% MBS Third Quarter One-Year 0.4% 0.9% 0.5% ABS 0.8% -0.1% 1.8% CMBS Page 6

9 U.S. Fixed Income Markets U.S. TREASURY YIELD CURVE 3.5% 9/30/ % 6/30/2017 U.S. 10-YEAR TREASURY AND TIPS YIELDS 5.0% 4.0% 10Y TIPS Yield 10Y Treasury Yield 2.5% 2.0% 1.5% 9/30/ % 2.0% 1.0% 1.0% 0.5% % Maturity (Years) Source: U.S. Department of Treasury % -1.0% -2.0% Sep 07 Sep 09 Sep 11 Sep 13 Sep 15 Sep 17 Source: U.S. Department of Treasury The Treasury yield curve marginally flattened over the quarter, as yields of short maturity bonds inched higher while longer maturity bonds were relatively unchanged. The 10-year U.S. Treasury yield ended the quarter at 2.3%, 2 basis points (bps) higher than at the start of the quarter. This was largely driven by higher breakeven inflation which moved 11 bps higher and offset the fall in real yields. The 10-year TIPS yield fell by 9 bps over the quarter and ended the period at 0.5%. Page 7

10 European Fixed Income Markets EUROZONE PERIPHERAL BOND SPREADS (10-YEAR SPREADS OVER GERMAN BUNDS) 20% 16% Spain Portugal Ireland Italy Greece 12% 8% 4% 0% Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Source: DataStream In the Eurozone, bond spreads were mixed across peripheral region. Spain s government bond yields rose by 8 bps with the majority of the increase coming towards the end of the quarter as political instability due to Catalonian Independence referendum grew. Meanwhile, Portuguese government bond yields fell sharply after the rating agency Standard & Poor s raised the nation s credit rating to investment grade from junk status, resulting in the yield on 10 year Portuguese government debt ending 64 bps lower over Q Meanwhile, the spread between Greek bonds and German Bunds moved 24 bps higher over the same period. Page 8

11 Credit Spreads Spread (bps) 30/09/ /06/ /09/2016 Quarterly Change (bps) 1-Year Change (bps) U.S. Aggregate Long Gov't Long Credit Long Gov't/Credit MBS CMBS ABS Corporate High Yield Global Emerging Markets Source: Bloomberg Barclays Improved risk appetite and a benign global credit backdrop saw spreads over U.S. Treasuries fall across all areas of the credit market. However, movement in U.S investment grade credit spreads were more muted. Global emerging market bond spreads fell by the most over the quarter, narrowing by 20 bps. They were closely followed by high yield bonds, their fellow outperformers in the credit universe this year, which fell by 17 bps. Page 9

12 Currency TRADE WEIGHTED U.S. DOLLAR INDEX (1997 = 100) Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Source: Federal Reserve U.S. DOLLAR RELATIVE TO EUR, GBP AND JPY REBASED TO 100 AT 09/30/ Stronger Dollar Weaker Dollar EUR/USD GBP/USD JPY/USD 70 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Source: DataStream The U.S. dollar weakened by 1.7% on a trade-weighted basis over the quarter. Market expectations of a rate hike were lowered after a flurry of disappointing inflation releases, although the U.S. Federal Reserve (Fed) continued to believe that the factors suppressing inflation are transitory. The U.S. dollar depreciated against all the major currencies with the exception of the Japanese yen. Bank of England officials indicated UK monetary policy struck a more hawkish tone in September which sent sterling 3.2% higher against the U.S. dollar. Despite a brief period of safe-haven flow activity amid escalating geopolitical tensions in the Korean peninsula, the yen fell by 0.2% against the U.S. dollar. Resilient economic data emanating from the Eurozone supported the euro s 3.5% appreciation against the greenback. Page 10

13 Commodities COMMODITY RETURNS AS OF 09/30/2017-4% -3% -2% -1% % 1% 2% 3% Bloomberg Commodity Index -0.3% 2.5% Ex-Energy -0.2% 0.6% Energy -2.9% 9.8% Industrial Metals 9.9% 24.0% Prec. Metals -6.6% 2.3% Agric % -6.1% Third Quarter 2017 Softs -0.7% -28.1% One-Year Grains -9.5% -5.5% Livestock -7.5% 24.4% Source: Bloomberg A strong upturn in commodity prices over the quarter saw the Bloomberg Commodity Index return 2.5%, driven mainly by the rise in crude oil prices. Over the quarter, the best performing segment was industrial metals with a return of 9.9%, closely followed by Energy (9.8%). Agriculture remained the laggard with a return of -6.1% which weighed on the overall index return. Grains was the worst performing sector over the quarter with a return of -9.5%. Page 11

14 Hedge Fund Markets Overview HEDGE FUND PERFORMANCE AS OF 09/30/ % % 2.0% 4.0% 6.0% 8.0% 1% 12.0% 14.0% 16.0% Fixed Income/Convertible Arb. Global Macro Equity Hedge Emerging Markets Event-Driven Distressed-Restructuring Relative Value Fund-Weighted Composite Index Fund of Funds Composite Index -1.2% 0.2% 1.1% 1.3% 1.4% 1.8% 2.1% 2.2% 3.5% Note: Latest 5 months of HFR data are estimated by HFR and may change in the future. Source: HFR 4.8% 6.0% 6.4% 6.4% 7.0% 9.6% 10.2% 11.0% 13.7% Third Quarter 2017 One-Year Hedge fund performance was positive across all strategies in the third quarter. The HFRI Fund-Weighted Composite Index and the HFRI Fund of Funds Composite Index produced returns of 2.1% and 2.2%, respectively, during the quarter. Emerging market hedge funds continued to be the best performer, posting a return of 4.8% during the third quarter which brought the one-year return to 13.7%. Page 12

15 Fairfax County Public Schools Summary This report has been prepared by Aon Hewitt Investment Consulting (AHIC) to provide Fairfax County Public Schools with an objective, third party review of the historical investment results of the 457(b) Plan. Asset Allocation The Fairfax County Public Schools 457(b) Plan currently offers 8 investment options and a series of lifecycle funds. As of September 30, 2017, the Plan had 1 guaranteed interest fund, 1 fixed income fund, 1 inflation-sensitive solution, 2 passivelymanaged domestic equity funds, 2 actively-managed domestic equity funds, 1 actively-managed foreign equity fund and a series of actively managed target date funds. The two passively-managed domestic equity funds cover the following asset classes: large cap core and mid cap core. The two actively-managed domestic equity funds cover the following asset classes: large cap core and mid cap growth. Participants may allocate their investments among the funds in accordance with their own personal tolerance for risk. As of September 30, 2017, the assets of the Plan totaled $209.3 million. The Plan held 15.5% of assets in the guaranteed interest product, 9.6% in fixed income, 56.0% in domestic equity, 9.5% in foreign equity and 8.6% in target date funds. The Plan s asset allocation by fund is detailed later in this report. Plan Performance During the third quarter of 2017, global equity markets continued to rise due to improving global growth and low inflation. Domestically, the Russell 3000 Index returned 4.6% during the quarter. Sector results were mostly positive during the third quarter with the exception of consumer staples, which was down -1.9%. The top performing sector of the market was technology, returning 8.0%. Performance was positive across the market capitalization spectrum during the quarter. Mid cap value stocks had the lowest absolute returns (+2.1%) while small cap growth stocks had the greatest returns (+6.2%). Growth continued to outperform value in all capitalization levels. During the third quarter, the developed non-u.s. equity markets had positive results with the MSCI EAFE Index generating a return of 5.4%. Emerging markets outperformed developed non-u.s. markets; the MSCI Emerging Markets Index returned 7.9%. The domestic fixed income market, as represented by the Bloomberg Barclays Aggregate Bond Index, posted a return of 0.9% for the quarter. The strongest performing segment of the domestic bond market was corporate bonds, which returned 1.3% for the quarter. Longer duration bonds outperformed their shorter duration counterparts as the yield curve marginally flattened over the third quarter. Asset Backed Securities and government bonds represented the worst performing sectors during the quarter, with each returning 0.4%. Overall, the global fixed income market outperformed the domestic fixed income market, as measured by the Citigroup Non-U.S. WGBI, which returned 2.6% for the quarter. Page 13

16 Fairfax County Public Schools Summary Plan Performance (continued) Against this backdrop, the Plan s options had mixed results on a relative basis. Performance for the Plan s passive strategies closely tracked their target benchmarks. Longer-term relative performance of most of the Plan s active investments also had mixed results for the ten-year period ending September 30, Allowing for the expense ratios of the funds, both of the Plan s index options successfully tracked their target Indices as well as for longer periods. Quarterly Fund Attribution PIMCO Total Return Fund outperformed during the quarter + Positions in MBS + Exposure to the Japanese Yen and the Euro + U.S. rate strategies, including duration, curve positioning and instrument selection PIMCO Inflation Response Multi-Asset Fund outperformed its benchmark during the quarter + Exposure to TIPS, commodities, emerging market currencies and gold + Active commodity positions relative to the benchmark + U.S. breakeven inflation exposure + Positions in residential MBS Page 14

17 Fairfax County Public Schools Summary Quarterly Fund Attribution (continued) Baron Growth Fund underperformed during the quarter - Underweight to cyclical and biotechnology stocks - High cash positioning - Lack of exposure to energy sector Dodge & Cox Stock Fund outperformed during the quarter + Stock selection in the consumer staples, healthcare, and technology sectors Artisan International Fund outperformed during the quarter + Positive stock selection in the financial and technology sectors + Overweight to the technology sector Page 15

18 Fairfax County Public Schools 1 Quarter Ending September 30, 2017 Financial Reconciliation ($000) Market Value As of 07/01/2017 Capital Net Transfers Contributions Distributions Apprec./ Deprec. Market Value As of 09/30/2017 U.S. FIXED INCOME Great West Portfolio Fund 31, , PIMCO Total Return Adm 19, , PIMCO Inflation Response MultiAsst Inst TARGET DATE T. Rowe Price Retirement I 2005 I T. Rowe Price Retirement I 2010 I T. Rowe Price Retirement I 2015 I 1, , T. Rowe Price Retirement I 2020 I 3, , T. Rowe Price Retirement I 2025 I 3, , T. Rowe Price Retirement I 2030 I 1, , T. Rowe Price Retirement I 2035 I 2, , T. Rowe Price Retirement I 2040 I , T. Rowe Price Retirement I 2045 I T. Rowe Price Retirement I 2050 I T. Rowe Price Retirement I 2055 I U.S. EQUITY ishares S&P 500 Index 28, , , Dodge & Cox Stock 26, , , Vanguard Mid Cap Index 31, , , Baron Growth Inst 27, , , INTERNATIONAL EQUITY Artisan International Inv 19, , , OTHER Loan Fund 1, , Forfeiture Account Total 457(b) Plan 202, , , , , Page 16

19 Fairfax County Public Schools Asset Allocation by Segment 457(b) Plan June 30, 2017 : $202,971,707 September 30, 2017 : $209,280,326 Segments Market Value Allocation ($) (%) Domestic Equity 114,703, International Equity 19,049, Domestic Fixed Income 19,284, GIC 31,441, Real Return 246, Loan Fund 1,518, Cash 315, Life Cycle 16,412, Segments Market Value Allocation ($) (%) Domestic Equity 117,176, International Equity 19,769, Domestic Fixed Income 19,763, GIC 32,448, Real Return 258, Loan Fund 1,478, Cash 381, Life Cycle 18,003, Page 17

20 Fairfax County Public Schools April 1, 2010 To September 30, 2017 Historical Asset Allocation by Segment Total 457(b) Plan Allocation (%) /10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 3/16 9/16 3/17 9/17 Domestic Equity International Equity Domestic Fixed Income GIC Real Return Loan Fund Cash Life Cycle Page 18

21 Fairfax County Public Schools As of September 30, 2017 Asset Allocation & Performance Allocation Market Value % ($000) Total 457(b) Plan 209, Quarter Year To Date 1 Year Performance(%) 3 Years 5 Years 7 Years 10 Years U.S. Fixed Income 52, Great West Portfolio Fund 32, % B Bar Int. Agg/50% 90 day T-Bill Day U.S. Treasury Bill PIMCO Total Return Adm 19, (1) 4.82 (3) 2.17 (6) 2.95 (25) 2.17 (50) 3.20 (48) 5.36 (2) Blmbg. Barc. U.S. Aggregate 0.85 (46) 3.14 (63) 7 (68) 2.71 (43) 2.06 (55) 2.95 (61) 4.27 (53) PIMCO Inflation Response MultiAsst Inst (46) 5.47 (82) 4.05 (87) 2.19 (83) (97) - - PIMCO IRMA Benchmark 1.55 (79) 2.81 (93) 0.10 (99) (92) (99) 1.02 (98) 2.14 (95) Target Date 18, T. Rowe Price Retirement I 2005 I (22) 8.43 (12) 7.54 (22) T. Rowe Price Retirement 2005* 2.43 (22) 8.32 (13) 7.39 (23) 4.97 (18) 5.96 (21) 6.56 (17) 4.81 (38) T. Rowe Price Retirement 2005 Index 2.38 (23) 7.53 (26) 7.17 (30) 4.89 (20) 5.88 (22) 6.37 (20) 4.39 (49) T. Rowe Price Retirement I 2010 I (20) 9.17 (15) 8.52 (19) T. Rowe Price Retirement 2010* 2.71 (20) 9.11 (16) 8.39 (20) 5.40 (13) 6.68 (9) 7.23 (9) 4.88 (8) T. Rowe Price Retirement 2010 Index 2.60 (25) 8.26 (34) 8.15 (22) 5.29 (22) 6.59 (10) 7.07 (13) 4.53 (17) T. Rowe Price Retirement I 2015 I 1, (17) (12) (14) T. Rowe Price Retirement 2015* 2.96 (19) (14) 9.99 (16) 6.04 (14) 7.75 (1) 8.17 (1) 5.22 (-) T. Rowe Price Retirement 2015 Index 2.96 (19) 9.43 (23) 9.72 (23) 5.93 (17) 7.62 (4) 8.03 (1) 4.88 (-) T. Rowe Price Retirement I 2020 I 4, (13) (1) (2) T. Rowe Price Retirement 2020* 3.43 (13) (1) (2) 6.83 (1) 8.81 (1) 9.08 (1) 5.51 (1) T. Rowe Price Retirement 2020 Index 3.38 (15) (17) (13) 6.62 (4) 8.60 (1) 8.90 (1) 5.14 (1) *Alternate share class shown to illustrate performance history. Page 19

22 Fairfax County Public Schools As of September 30, 2017 Asset Allocation & Performance Allocation Market Value ($000) % 1 Quarter Year To Date 1 Year Performance(%) T. Rowe Price Retirement I 2025 I 3, (12) (1) (1) T. Rowe Price Retirement 2025* 3.77 (13) (1) (1) 7.46 (1) 9.75 (2) 9.82 (1) 5.73 (1) T. Rowe Price Retirement 2025 Index 3.75 (14) (27) (11) 7.20 (3) 9.47 (3) 9.64 (3) 5.37 (1) T. Rowe Price Retirement I 2030 I 1, (24) (1) (8) T. Rowe Price Retirement 2030* 4.05 (24) (1) (8) 8.03 (1) (2) (2) 5.95 (1) T. Rowe Price Retirement 2030 Index 4.07 (24) (36) (16) 7.70 (8) (3) (3) 5.56 (4) T. Rowe Price Retirement I 2035 I 2, (37) (3) (10) T. Rowe Price Retirement 2035* 4.30 (39) (4) (12) 8.45 (5) (3) (1) 6.11 (1) T. Rowe Price Retirement 2035 Index 4.35 (36) (47) (26) 8.08 (18) (5) (4) 5.73 (1) T. Rowe Price Retirement I 2040 I 1, (34) (1) (11) T. Rowe Price Retirement 2040* 4.50 (44) (1) (11) 8.74 (6) (3) (1) 6.30 (1) T. Rowe Price Retirement 2040 Index 4.57 (27) (57) (24) 8.38 (13) (7) (4) 5.92 (6) T. Rowe Price Retirement I 2045 I (43) (3) (7) T. Rowe Price Retirement 2045* 4.57 (45) (3) (8) 8.86 (5) (3) (1) 6.34 (-) T. Rowe Price Retirement 2045 Index 4.65 (38) (60) (25) 8.50 (16) (8) (6) 5.95 (-) T. Rowe Price Retirement I 2050 I (52) (6) (7) T. Rowe Price Retirement 2050* 4.55 (57) (6) (7) 8.85 (7) (4) (1) 6.33 (1) T. Rowe Price Retirement 2050 Index 4.65 (49) (63) (33) 8.50 (18) (12) (9) 5.95 (1) T. Rowe Price Retirement I 2055 I (58) (6) (7) T. Rowe Price Retirement 2055* 4.54 (57) (7) (7) 8.85 (7) (4) (1) 6.32 (1) T. Rowe Price Retirement 2055 Index 4.65 (49) (63) (33) 8.50 (18) (12) (9) 5.95 (1) 3 Years 5 Years 7 Years 10 Years *Alternate share class shown to illustrate performance history. Page 20

23 Fairfax County Public Schools As of September 30, 2017 Asset Allocation & Performance Allocation Market Value % ($000) U.S. Equity 117, Quarter Year To Date 1 Year Performance(%) 3 Years 5 Years 7 Years 10 Years ishares S&P 500 Index 29, (28) (23) (17) (14) (18) (19) 7.35 (17) S&P 500 Index 4.48 (12) (1) (2) (1) (1) (1) 7.44 (4) Dodge & Cox Stock 27, (29) (75) (3) 9.83 (46) (4) (12) 6.59 (54) S&P 500 Index 4.48 (43) (40) (42) (23) (22) (17) 7.44 (28) Vanguard Mid Cap Index 32, (64) (45) (63) 9.73 (37) (27) (23) 7.97 (31) Vanguard Spliced Mid Cap Index 3.43 (65) (45) (62) 9.77 (36) (24) (23) 7.99 (30) Baron Growth Inst 27, (86) (23) (26) 9.77 (44) (54) (26) - Baron Growth Rtl* 3.16 (89) (24) (30) 9.49 (48) (55) (33) 7.48 (43) Russell Midcap Growth Index 5.28 (25) (54) (58) 9.96 (39) (28) (23) 8.20 (30) International Equity 19, Artisan International Inv 19, (43) (9) (81) 3.23 (83) 7.47 (56) 7.68 (5) 2.45 (30) MSCI EAFE Index (Net) 5.40 (45) (58) (40) 5.04 (41) 8.38 (23) 6.38 (32) 1.34 (58) MSCI AC World ex USA Index (Net) 6.16 (31) (41) (33) 4.70 (46) 6.97 (72) 5.25 (79) 1.28 (59) *Alternate share class shown to illustrate performance history. Page 21

24 Fairfax County Public Schools As of September 30, 2017 Calendar Year Performance U.S. Fixed Income Great West Portfolio Fund % B Bar Int. Agg/50% 90 day T-Bill Day U.S. Treasury Bill PIMCO Total Return Adm 2.34 (79) 0.47 (37) 4.43 (81) (72) (3) 3.91 (95) 8.57 (17) (30) 4.56 (23) 8.82 (1) Blmbg. Barc. U.S. Aggregate 2.65 (63) 0.55 (27) 5.97 (32) (65) 4.21 (77) 7.84 (15) 6.54 (69) 5.93 (84) 5.24 (19) 6.97 (19) IM U.S. Broad Market Core Fixed Income (MF) Median PIMCO Inflation Response MultiAsst Inst (19) (78) 1.57 (73) (100) 9.56 (64) PIMCO IRMA Benchmark 6.75 (46) (81) (82) (100) 6.58 (84) 4.56 (11) (45) (90) (13) (26) IM Flexible Portfolio (MF) Median Target Date T. Rowe Price Retirement I 2005 I 6.69 (26) T. Rowe Price Retirement 2005* 6.72 (26) (37) 4.72 (39) 9.74 (23) (16) 1.43 (65) (17) (17) (82) 6.67 (25) T. Rowe Price Retirement 2005 Index 5.84 (41) (19) 5.48 (24) 9.86 (22) 9.52 (42) 2.38 (43) (42) (63) (68) 6.79 (23) IM Mixed-Asset Target Alloc Consv (MF) Median T. Rowe Price Retirement I 2010 I 7.18 (9) T. Rowe Price Retirement 2010* 7.11 (9) (59) 4.99 (23) (8) (6) 0.54 (55) (4) (4) (80) 6.65 (48) T. Rowe Price Retirement 2010 Index 6.27 (44) (14) 5.77 (12) (7) (26) 1.81 (25) (30) (67) (34) 6.82 (46) IM Mixed-Asset Target 2010 (MF) Median T. Rowe Price Retirement I 2015 I 7.25 (14) T. Rowe Price Retirement 2015* 7.31 (13) (31) 5.37 (32) (2) (1) (81) (4) (1) (86) 6.75 (-) T. Rowe Price Retirement 2015 Index 6.91 (33) (14) 6.30 (16) (3) (25) 1.09 (42) (27) (65) (33) 6.85 (-) IM Mixed-Asset Target 2015 (MF) Median T. Rowe Price Retirement I 2020 I 7.57 (12) T. Rowe Price Retirement 2020* 7.41 (18) (25) 5.63 (37) (2) (1) (84) (3) (1) (82) 6.73 (50) T. Rowe Price Retirement 2020 Index 7.62 (10) (32) 6.70 (5) (3) (20) 0.48 (45) (22) (58) (62) 6.84 (49) IM Mixed-Asset Target 2020 (MF) Median T. Rowe Price Retirement I 2025 I 7.56 (20) T. Rowe Price Retirement 2025* 7.55 (20) (13) 5.84 (38) (3) (1) (71) (1) (1) (87) 6.81 (-) T. Rowe Price Retirement 2025 Index 8.21 (9) (31) 7.06 (9) 21 (4) (22) (25) (26) (66) (36) 6.84 (-) IM Mixed-Asset Target 2025 (MF) Median T. Rowe Price Retirement I 2030 I 7.77 (46) T. Rowe Price Retirement 2030* 7.69 (47) -2 (6) 6.05 (36) (4) (1) (70) (3) (1) (74) 6.83 (56) T. Rowe Price Retirement 2030 Index 8.80 (10) (40) 7.29 (7) (8) (20) (21) (32) (70) (45) 6.80 (56) IM Mixed-Asset Target 2030 (MF) Median T. Rowe Price Retirement I 2035 I 7.68 (67) T. Rowe Price Retirement 2035* 7.64 (67) 0.13 (4) 6.07 (38) (3) (1) (61) (1) (1) (71) 6.81 (-) T. Rowe Price Retirement 2035 Index 9.21 (14) (35) 7.37 (5) (12) (39) (10) (42) (70) (28) 6.74 (-) IM Mixed-Asset Target 2035 (MF) Median Returns for periods greater than one year are annualized. Returns are expressed as percentages. *Alternate share class shown to illustrate performance history. Page 22

25 Fairfax County Public Schools As of September 30, 2017 Calendar Year Performance T. Rowe Price Retirement I 2040 I 7.75 (66) T. Rowe Price Retirement 2040* 7.63 (67) 0.17 (3) 6.18 (38) (8) (1) (43) (9) (1) (72) 6.77 (63) T. Rowe Price Retirement 2040 Index 9.58 (15) (40) 7.43 (7) (20) (40) (9) (38) (84) (14) 6.74 (64) IM Mixed-Asset Target 2040 (MF) Median T. Rowe Price Retirement I 2045 I 7.75 (71) T. Rowe Price Retirement 2045* 7.69 (71) 0.17 (3) 6.14 (35) (5) (1) (31) (10) (1) (53) 6.84 (-) T. Rowe Price Retirement 2045 Index 9.70 (13) (36) 7.43 (7) (22) (53) (1) (44) (91) (18) 6.74 (-) IM Mixed-Asset Target 2045 (MF) Median T. Rowe Price Retirement I 2050 I 7.75 (69) T. Rowe Price Retirement 2050* 7.71 (69) 0.19 (4) 6.19 (36) (12) (4) (26) (15) (1) (58) 6.82 (-) T. Rowe Price Retirement 2050 Index 9.70 (17) (40) 7.43 (8) (28) (40) (5) (39) (85) (6) 6.74 (-) IM Mixed-Asset Target 2050 (MF) Median T. Rowe Price Retirement I 2055 I 7.65 (70) T. Rowe Price Retirement 2055* 7.73 (69) 0.18 (5) 6.18 (37) (12) (3) (26) (15) (1) (62) 6.82 (-) T. Rowe Price Retirement 2055 Index 9.70 (17) (40) 7.43 (8) (28) (40) (5) (39) (85) (6) 6.74 (-) IM Mixed-Asset Target 2050 (MF) Median U.S. Equity ishares S&P 500 Index (17) 1.35 (19) (14) (28) (33) 1.98 (41) (36) (18) (30) 5.36 (36) S&P 500 Index (7) 1.38 (9) (1) (3) (3) 2.11 (8) (1) (23) (29) 5.49 (11) IM S&P 500 Index (MF) Median Dodge & Cox Stock (1) (92) (72) (1) (2) (87) (56) (26) (91) 0.14 (96) S&P 500 Index (28) 1.38 (31) (19) (46) (44) 2.11 (29) (35) (57) (54) 5.49 (63) IM U.S. Large Cap Core Equity (MF) Median Vanguard Mid Cap Index (55) (38) (10) (50) (46) (43) (33) (34) (69) 6.22 (59) Vanguard Spliced Mid Cap Index (55) (37) (9) (50) (45) (42) (33) (34) (69) 6.19 (59) IM U.S. Mid Cap Equity (MF) Median Baron Growth Inst 6.31 (41) (80) 4.66 (78) (23) (21) 1.51 (14) (53) Baron Growth Rtl* 6.04 (45) (82) 4.40 (79) (25) (26) 1.24 (16) (55) (68) (25) 6.59 (86) Russell Midcap Growth Index 7.33 (30) (45) (11) (46) (35) (36) (39) (27) (65) (75) IM U.S. Mid Cap Growth Equity (MF) Median International Equity Artisan International Inv (100) (78) (9) (6) (4) (18) 5.91 (69) (11) (98) (16) MSCI EAFE Index (Net) 1.00 (49) (40) (43) (13) (68) (49) 7.75 (54) (49) (66) (72) MSCI AC World ex USA Index (Net) 4.50 (13) (84) (25) (81) (71) (75) (23) (6) (87) (23) IM International Large Cap Equity (MF) Median Returns for periods greater than one year are annualized. Returns are expressed as percentages. *Alternate share class shown to illustrate performance history. Page 23

26 Fairfax County Public Schools 3 Years Ending September 30, 2017 Risk Profile Annualized Return Annualized Standard Deviation Great West Portfolio Fund PIMCO Total Return Adm PIMCO Inflation Response MultiAsst Inst T. Rowe Price Ret 2005* T. Rowe Price Ret 2010* T. Rowe Price Ret 2015* T. Rowe Price Ret 2020* T. Rowe Price Ret 2025* T. Rowe Price Ret 2030* T. Rowe Price Ret 2035* T. Rowe Price Ret 2045* T. Rowe Price Ret 2050* T. Rowe Price Ret 2055* ishares S&P 500 Index Dodge & Cox Stock Vanguard Mid Cap Index Baron Growth Inst Artisan International Inv *Alternate share class shown to illustrate performance history. Page 24

27 Fairfax County Public Schools Watch List Review Organization/Staff Process Performance Watch List Status Significant Organizational Change Adverse Change in Portfolio Manager Diverged from Strategy and/or Portfolio Characteristics Underperformed / Adverse Tracking During Trailing 5- Years Underperformed / Adverse Tracking in 3 of 4 Trailing Calendar Quarters Overall Manager Research Rating U.S FIXED INCOME Great West Portfolio Fund No No No No No N/R PIMCO Total Return Adm No No No No No Buy PIMCO Inflation Response MultiAsst Inst No No No No No Buy TARGET DATE T. Rowe Price Retirement Series No No No No No Buy U.S. EQUITY ishares S&P 500 Index No No No No No Buy Dodge & Cox Stock Fund No No No No No Buy Vanguard Mid Cap Index No No No No No Buy Baron Growth Instl No No No Yes No Qualified INTERNATIONAL EQUITY Artisan International Inv No No No Yes No Qualified 3rd Quarter nd Quarter st Quarter th Quarter 2016 Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Green Yellow Green Green Green Yellow Status Number of Criteria Met Suggested Action Green 1 or less affirmatives Active No action required Yellow 2 to 3 affirmatives Active On closely monitored list Red 4 or more affirmatives or Yellow for 4 consecutive quarters Full fund review and recommendation for action will be made Changes in Watch List designations from the previous quarter are highlighted in bold. Passively managed index funds are expected to track their benchmark within a reasonable margin. Page 25

28 Watch List Guidelines AHIC Investment Option Review Criteria 1. If the Fund has underperformed its benchmark over the most recent trailing five-year period If passively managed, the fund s return must be no more than 0.5 percentage points above or below the return of the benchmark 2. If the fund has underperformed its benchmark in three of the most recent four calendar quarters 3. If the Fund diverged from its strategy and / or portfolio characteristics 4. Adverse change in portfolio manager 5. Merger with another fund 6. Significant organizational change Suggested Action Triggers 1. When an investment fund is placed on the Red Watch List, a formal fund retention meeting may be conducted. At this meeting, the fund s representative would be asked to address all relevant issues and explain why the fund should be retained. After this retention meeting, the Investment Committee may elect to either terminate the fund or grant it a one-year extension. 2. If a fund is granted the one-year extension described above and remains on the Watch List for this period, the fund may be terminated unless the Committee determines that an alternate course of action is appropriate. Special Circumstances 1. In the event of a major change to the fund (e.g., investments, ownership, and staffing), the Committee retains the right to immediately terminate any fund without invoking the Watch List criteria in any fashion. Page 26

29 Fairfax County Public Schools 457(b) Plan As of September 30, 2017 Demographic Information Participants per Investment Option Investment Options per Participant Investment Option Participants Investment Options Participants Great West Portfolio 999 One 540 PIMCO Total Return 1,071 Two 351 PIMCO Inflation Response MultiAsst 47 Three 266 T. Rowe Price Retirement I 2005 I 37 Four 307 T. Rowe Price Retirement I 2010 I 19 Five 292 T. Rowe Price Retirement I 2015 I 42 Six 251 T. Rowe Price Retirement I 2020 I 81 Seven 175 T. Rowe Price Retirement I 2025 I 105 Eight 25 T. Rowe Price Retirement I 2030 I 79 More than Eight 36 T. Rowe Price Retirement I 2035 I 112 T. Rowe Price Retirement I 2040 I 83 T. Rowe Price Retirement I 2045 I 63 Other Demographics T. Rowe Price Retirement I 2050 I 34 Item Result T. Rowe Price Retirement I 2055 I 58 Participation Rate 54.12% ishares S&P 500 Index 959 Number of Participants with Account Balances 2,243 Dodge & Cox Stock 973 Average Deferral Rate 17.21% Vanguard Mid Cap Index 1,191 Average Number of Funds per Participant 3.62 Baron Growth 1,084 Average Account Balance $92, Artisan International 1,072 Participants with Balance in One Investment Option Investment Option Participants Administration Statistics Great-West Portfolio Fund 62 Item Result PIMCO Total Return Admin 78 Number of Internet Accesses 11,415 PIMCO Inflation Response MultiAsst 5 VRU Calls 277 T. Rowe Price Retirement I 2005 I 1 T. Rowe Price Retirement I 2010 I 1 T. Rowe Price Retirement I 2015 I 3 T. Rowe Price Retirement I 2020 I 2 T. Rowe Price Retirement I 2025 I 12 T. Rowe Price Retirement I 2030 I 5 T. Rowe Price Retirement I 2035 I 8 T. Rowe Price Retirement I 2040 I 4 T. Rowe Price Retirement I 2045 I 3 T. Rowe Price Retirement I 2050 I 1 T. Rowe Price Retirement I 2055 I 3 ishares S&P 500 Index 56 Dodge & Cox Stock 69 Vanguard Mid Cap Index Ins 73 Baron Growth Instl 73 Artisan International Inv 81 * Information directly provided by Empower Retirement. Page 27

30 457(b) Plan Statistics 457(b) 403(b) Contributions Sept 2015 $ 1,432,000 $ 3.4 million Contributions Sept 2016 $ 1,363,000 $ 3.5 million Contributions Sept 2017 $ 1,525,000 $ 3.8 million Contributions Oct 2017 $ 1,201,000 $ 3.7 million Assets Sept 30, 2015 Assets Sept 30, 2016 Assets Sept 30, 2017 Assets Oct 31, 2017 $156.8 million $177.2 million $207.8 million $210.7 million Number of Participants Nov Number of Participants Nov Number of Participants Nov Average Contribution/Month Sept 2015 Average Contribution/Month Sept 2016 Average Contribution/Month Sept 2017 Average Contribution/Month Sept 2017 $ 963/mo; $126/biweekly $1043/mo; $146/biweekly $1075/mo; $170/biweekly 403(b) $756/mo; $159/biweekly Number of Employees Currently Contributing to 457(b): 1219/mo; 57/biweekly Number of Employees Currently Contributing to 403(b): 4969/mo; 587/biweekly Number of Employees Currently Contributing to both 457 & 403(b): 400 total Page 28

31 403(b) Plan Participants Age Monthly Bi-Weekly < Enrollment (b) Monthly Plan Participants < Age Range Total (b) Bi-Weekly Plan Participants Enrollment < Age Range Page 29

32 457 Plan Participants Age Monthly Bi-Weekly < Total Enrollment Monthly Plan Participants < Age Range Enrollment Bi-Weekly Plan Participants < Age Range Page 30

33 Fairfax County Public Schools 457(b) Plan Contribution Analysis 3rd Quarter 2017 Contribution Allocation Lifecycle 17% Stable Value 23% International 7% Small Cap Growth 11% Mid Cap Blend (Passive) 12% Large Cap Blend (Active) 8% Fixed Income 6% Real Return 0% Large Cap Blend (Passive) 16% 2nd Quarter 2017 Contribution Allocation International 9% Small Cap Growth 9% Lifecycle 13% Stable Value 19% Fixed Income 7% Real Return 0% Mid Cap Blend (Passive) 16% Large Cap Blend (Active) 8% Large Cap Blend (Passive) 19% Page 31

34 PIMCO Total Return Adm 09/30/17 Relative Ranking (3 Years Rolling) Relative Performance (10/01/07 to 09/30/17) 6.0 Return Percentile Rank /07 10/08 10/09 10/10 10/11 10/12 10/13 10/14 10/15 10/16 9/ /12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 9/17 Cumulative Annualized Over/Under Relative Performance Return (%) PIMCO Total Return Adm Blmbg. Barc. U.S. Aggregate Over/Under Performance Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >PIMCO Total Return Adm >Blmbg. Barc. U.S. Aggregate PIMCO Total Return Adm N/A 12 Blmbg. Barc. U.S. Aggregate N/A Style Map (Since Inception - 36 Months Rolling) Barclays Capital U.S. Credit Index Barclays Capital Government Index Style History (Since Inception - 36 Months Rolling) Capitalization Barclays Capital 1-3yr Gov/Credit Barclays Capital U.S. Long Gov/Credit 11/97 8/99 5/01 2/03 11/04 8/06 5/08 2/10 11/11 8/13 5/15 9/17 Manager Style Style History Sep-2017 Average Style Exposure Barclays U.S. Credit Index Barclays Government Index Barclays 1-3yr Gov/Credit Barclays U.S. Long Gov/Credit Page 32

35 PIMCO Inflation Response MultiAsst Inst 09/30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 PIMCO Inflation Response MultiAsst Inst PIMCO IRMA Benchmark Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >PIMCO Inflation Response MultiAsst Inst >PIMCO IRMA Benchmark PIMCO Inflation Response MultiAsst Inst N/A 13 PIMCO IRMA Benchmark N/A Relative Performance (09/01/11 to 09/30/17) Return (%) /11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 3/16 9/16 3/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Page 33

36 Target Allocation for T. Rowe Price Retirement Funds 100% 80% 60% 40% 20% 0% Target Balanced Target 2005 Target 2010 Target 2015 Target 2020 Target 2025 Target 2030 Target 2035 Target 2040 Target 2045 Target 2050 Target 2055 Target 2060 Fixed Income U.S. Equity Non-U.S. Equity Specialty Funds* * Specialty Funds include T. Rowe Price Real Assets Fund Page 34

37 Target Allocation: T. Rowe Price Retirement Funds Balanced Fund 2005 Fund 2010 Fund 2015 Fund 2020 Fund 2025 Fund 2030 Fund 2035 Fund 2040 Fund 2045 Fund 2050 Fund 2055 Fund 2060 Fund Fixed Income 61.3% 63.3% 58.3% 50.3% 40.3% 32.3% 24.8% 18.3% 13.3% 11.3% 11.3% 11.3% 11.3% T. Rowe Price Inflation Focused Bond 3% 18.0% 16.0% 12.0% 7.0% 4.0% 1.5% % % % % % % T. Rowe Price Bond Trust I 22.3% 32.4% 30.2% 27.3% 23.8% 20.2% 16.6% 13.0% 9.5% 8.0% 8.0% 8.0% 8.0% T. Rowe Price High Yield 3.0% 4.3% 4.0% 3.6% 3.2% 2.7% 2.2% 1.7% 1.3% 1.1% 1.1% 1.1% 1.1% T. Rowe Price Intl Bond 2.8% 4.1% 3.8% 3.4% 3.0% 2.5% 2.1% 1.6% 1.2% 1.0% 1.0% 1.0% 1.0% T. Rowe Price EM Bond 3.1% 4.5% 4.2% 3.8% 3.3% 2.8% 2.3% 1.8% 1.3% 1.1% 1.1% 1.1% 1.1% U.S. Equity 25.2% 23.9% 27.1% 32.4% 39.1% 44.4% 49.3% 53.6% 57.0% 58.3% 58.3% 58.3% 58.3% T. Rowe Price Value % % % 2.7% 6.2% 9.5% 12.5% 15.4% 17.5% 18.4% 18.4% 18.4% 18.4% T. Rowe Price Equity Index % 18.1% 20.6% 18.7% 16.8% 14.1% 11.7% 9.3% 7.4% 6.7% 6.7% 6.7% 6.7% T. Rowe Price Growth Stock % % % 3.2% 6.8% 10.2% 13.3% 16.1% 18.4% 19.2% 19.2% 19.2% 19.2% T. Rowe Price Mid-Cap Value 1.5% 1.4% 1.6% 1.9% 2.3% 2.6% 2.9% 3.2% 3.3% 3.4% 3.4% 3.4% 3.4% T. Rowe Price Mid-Cap Growth 1.6% 1.5% 1.7% 2.1% 2.5% 2.8% 3.2% 3.4% 3.6% 3.7% 3.7% 3.7% 3.7% T. Rowe Price Small-Cap Value 0.9% 0.9% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2.1% 2.2% 2.2% 2.2% 2.2% T. Rowe Price Small-Cap Stock 1.0% 0.9% 1.1% 1.3% 1.5% 1.7% 1.9% 2.1% 2.2% 2.3% 2.3% 2.3% 2.3% T. Rowe Price New Horizons 1.1% 1.0% 1.1% 1.4% 1.6% 1.9% 2.1% 2.3% 2.4% 2.4% 2.4% 2.4% 2.4% Non-U.S. Equity 12.0% 11.3% 12.9% 15.5% 18.6% 21.1% 23.5% 25.5% 27.1% 27.7% 27.7% 27.7% 27.7% T. Rowe Price Intl Value Equity Trust 3.6% 3.4% 3.8% 4.6% 5.5% 6.3% 7.0% 7.6% 8.0% 8.2% 8.2% 8.2% 8.2% T. Rowe Price Intl Growth Equity Trust 3.2% 3.0% 3.5% 4.1% 5.0% 5.7% 6.3% 6.8% 7.3% 7.4% 7.4% 7.4% 7.4% T. Rowe Price International Stock 3.6% 3.4% 3.9% 4.7% 5.6% 6.4% 7.1% 7.8% 8.2% 8.4% 8.4% 8.4% 8.4% T. Rowe Price Emerging Markets Stock 1.6% 1.5% 1.7% 2.1% 2.5% 2.8% 3.1% 3.4% 3.6% 3.7% 3.7% 3.7% 3.7% Real Assets 0.9% 0.8% 0.9% 1.1% 1.3% 1.5% 1.7% 1.8% 1.9% 2.0% 2.0% 2.0% 2.0% T. Rowe Price Real Assets 0.9% 0.8% 0.9% 1.1% 1.3% 1.5% 1.7% 1.8% 1.9% 2.0% 2.0% 2.0% 2.0% MM/Short Term Investment 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% T. Rowe Price U.S. Treasury Reserve Fund 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% Total 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Page 35

38 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2005 TRP Retirement 2005 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2005 >TRP Retirement 2005 Index TRP Retirement N/A 12 TRP Retirement 2005 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 36

39 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2010 TRP Retirement 2010 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2010 >TRP Retirement 2010 Index TRP Retirement N/A 12 TRP Retirement 2010 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 37

40 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2015 TRP Retirement 2015 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2015 >TRP Retirement 2015 Index TRP Retirement N/A 12 TRP Retirement 2015 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 38

41 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2020 TRP Retirement 2020 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2020 >TRP Retirement 2020 Index TRP Retirement N/A 15 TRP Retirement 2020 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 39

42 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2025 TRP Retirement 2025 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2025 >TRP Retirement 2025 Index TRP Retirement N/A 17 TRP Retirement 2025 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 40

43 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2030 TRP Retirement 2030 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2030 >TRP Retirement 2030 Index TRP Retirement N/A 18 TRP Retirement 2030 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 41

44 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2035 TRP Retirement 2035 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2035 >TRP Retirement 2035 Index TRP Retirement N/A 17 TRP Retirement 2035 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 42

45 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2040 TRP Retirement 2040 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2040 >TRP Retirement 2040 Index TRP Retirement N/A 16 TRP Retirement 2040 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 43

46 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2045 TRP Retirement 2045 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2045 >TRP Retirement 2045 Index TRP Retirement N/A 16 TRP Retirement 2045 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 44

47 TRP Retirement /30/17 Relative Ranking (3 Years Rolling) Return Percentile Rank /12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 TRP Retirement 2050 TRP Retirement 2050 Index Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >TRP Retirement 2050 >TRP Retirement 2050 Index TRP Retirement N/A 16 TRP Retirement 2050 Index N/A Relative Performance (10/01/07 to 09/30/17) Return (%) /07 4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 10/13 4/14 10/14 4/15 10/15 4/16 10/16 4/17 9/17 Cumulative Annualized Over/Under Relative Performance Over/Under Performance Alternate share class shown to illustrate performance history. Page 45

48 ishares S&P 500 Index 09/30/17 Relative Ranking (3 Years Rolling) Relative Performance (10/01/07 to 09/30/17) 0.4 Return Percentile Rank /07 10/08 10/09 10/10 10/11 10/12 10/13 10/14 10/15 10/16 9/ /12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 9/17 Cumulative Annualized Over/Under Relative Performance Return (%) ishares S&P 500 Index S&P 500 Index Over/Under Performance Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >ishares S&P 500 Index >S&P 500 Index ishares S&P 500 Index N/A 0 S&P 500 Index N/A Style Map (Since Inception - 36 Months Rolling) Large Cap Value Large Cap Growth Style History (Since Inception - 36 Months Rolling) Capitalization Small Cap Value Small Cap Growth 9/96 6/98 3/00 12/01 9/03 6/05 3/07 12/08 9/10 6/12 3/14 12/15 9/17 Manager Style Style History Sep-2017 Average Style Exposure Russell 1000 Growth Index Russell 2000 Growth Index Russell 1000 Value Index Russell 2000 Value Index Page 46

49 Dodge & Cox Stock 09/30/17 Relative Ranking (3 Years Rolling) Relative Performance (10/01/07 to 09/30/17) 16.0 Return Percentile Rank /07 10/08 10/09 10/10 10/11 10/12 10/13 10/14 10/15 10/16 9/ /12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 9/17 Cumulative Annualized Over/Under Relative Performance Return (%) Dodge & Cox Stock S&P 500 Index Over/Under Performance Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >Dodge & Cox Stock >S&P 500 Index Dodge & Cox Stock N/A 10 S&P 500 Index N/A Style Map (Since Inception - 36 Months Rolling) Large Cap Value Large Cap Growth Style History (Since Inception - 36 Months Rolling) Capitalization Small Cap Value Small Cap Growth 2/82 11/84 8/87 5/90 2/93 11/95 8/98 5/01 2/04 11/06 8/09 5/12 2/15 9/17 Manager Style Style History Sep-2017 Average Style Exposure Russell 1000 Growth Index Russell 2000 Growth Index Russell 1000 Value Index Russell 2000 Value Index Page 47

50 Vanguard Mid Cap Index 09/30/17 Relative Ranking (3 Years Rolling) Relative Performance (10/01/07 to 09/30/17) 0.2 Return Percentile Rank /07 10/08 10/09 10/10 10/11 10/12 10/13 10/14 10/15 10/16 9/ /12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 9/17 Cumulative Annualized Over/Under Relative Performance Return (%) Vanguard Mid Cap Index Vanguard Spliced Mid Cap Index Over/Under Performance Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >Vanguard Mid Cap Index >Vanguard Spliced Mid Cap Index Vanguard Mid Cap Index N/A 0 Vanguard Spliced Mid Cap Index N/A Style Map (Since Inception - 36 Months Rolling) Large Cap Value Large Cap Growth Style History (Since Inception - 36 Months Rolling) Capitalization Small Cap Value Small Cap Growth 7/01 10/02 1/04 4/05 7/06 10/07 1/09 4/10 7/11 10/12 1/14 4/15 7/16 9/17 Manager Style Style History Sep-2017 Average Style Exposure Russell 1000 Growth Index Russell 2000 Growth Index Russell 1000 Value Index Russell 2000 Value Index Page 48

51 Baron Growth Rtl 09/30/17 Relative Ranking (3 Years Rolling) Relative Performance (10/01/07 to 09/30/17) 18.0 Return Percentile Rank /07 10/08 10/09 10/10 10/11 10/12 10/13 10/14 10/15 10/16 9/ /12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 9/17 Cumulative Annualized Over/Under Relative Performance Return (%) Baron Growth Rtl Russell Midcap Growth Index Over/Under Performance Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >Baron Growth Rtl >Russell Midcap Growth Index Baron Growth Rtl N/A 5 Russell Midcap Growth Index N/A Style Map (Since Inception - 36 Months Rolling) Large Cap Value Large Cap Growth Style History (Since Inception - 36 Months Rolling) Capitalization Small Cap Value Small Cap Growth 3/98 12/99 9/01 6/03 3/05 12/06 9/08 6/10 3/12 12/13 9/15 9/17 Manager Style Style History Sep-2017 Average Style Exposure Russell 1000 Growth Index Russell 2000 Growth Index Russell 1000 Value Index Russell 2000 Value Index Alternate share class shown to illustrate performance history. Page 49

52 Artisan International Inv 09/30/17 Relative Ranking (3 Years Rolling) Relative Performance (10/01/07 to 09/30/17) Return Percentile Rank /12 6/13 12/13 6/14 12/14 6/15 12/15 6/16 12/16 9/17 Artisan International Inv MSCI EAFE Index (Net) Return (%) /07 10/08 10/09 10/10 10/11 10/12 10/13 10/14 10/15 10/16 9/17 Cumulative Annualized Over/Under Relative Performance MSCI AC World ex USA Index (Net) Over/Under Performance Relative Ranking vs. Peers (3 Years Rolling) Number of Observations >=Median Top Quartile Bottom Quartile >Artisan International Inv >MSCI EAFE Index (Net) >MSCI AC World ex U Artisan International Inv N/A MSCI EAFE Index (Net) N/A 18 MSCI AC World ex USA Index (Net) N/A Style Map (Since Inception - 36 Months Rolling) MSCI EAFE Value Index MSCI EAFE Growth Index Style History (Since Inception - 36 Months Rolling) Capitalization MSCI USA Value MSCI USA Growth 6/01 12/02 6/04 12/05 6/07 12/08 6/10 12/11 6/13 12/14 6/16 9/17 Manager Style Style History Sep-2017 Average Style Exposure MSCI EAFE Value Index MSCI USA Growth MSCI EAFE Growth Index MSCI USA Value Page 50

53 Fairfax County Public Schools As of September 30, 2017 Cost Analysis Fund Name Expense Ratio Peer Group Data 1 Fund's Peer Group Expense $ Weighted $ Weighted Ratio Median Median Average Average Difference 2 U.S FIXED INCOME Great West Portfolio Fund Stable Value 0.89% 3 N/A N/A 0.52% 4 N/A N/A PIMCO Total Return Adm US Broad Market Core Fixed 0.76% 0.49% 0.43% 0.53% 0.38% 0.23% PIMCO Inflation Response MultiAsst Inst Flexible Portfolio 0.83% 1.00% 0.84% 1.08% 0.92% -0.25% TARGET DATE T. Rowe Price Retirement I 2005 I Mixed Asset Target Today % 0.55% 0.49% 0.54% 0.52% -0.11% T. Rowe Price Retirement I 2010 I Mixed Asset Target % 0.53% 0.59% 0.55% 0.57% -0.13% T. Rowe Price Retirement I 2015 I Mixed Asset Target % 0.59% 0.62% 0.60% 0.60% -0.15% T. Rowe Price Retirement I 2020 I Mixed Asset Target % 0.55% 0.65% 0.53% 0.62% -4% T. Rowe Price Retirement I 2025 I Mixed Asset Target % 0.60% 0.69% 0.62% 0.65% -0.10% T. Rowe Price Retirement I 2030 I Mixed Asset Target % 0.65% 0.72% 0.67% 0.68% -0.12% T. Rowe Price Retirement I 2035 I Mixed Asset Target % 0.67% 0.74% 0.67% 0.70% -9% T. Rowe Price Retirement I 2040 I Mixed Asset Target % 0.71% 0.76% 0.70% 0.70% -0.11% T. Rowe Price Retirement I 2045 I Mixed Asset Target % 0.69% 0.67% 0.70% 0.68% -0.10% T. Rowe Price Retirement I 2050 I Mixed Asset Target % 0.70% 0.74% 0.71% 0.70% -0.11% T. Rowe Price Retirement I 2055 I Mixed Asset Target % 0.70% 0.76% 0.70% 0.71% -0.10% U.S. EQUITY ishares S&P 500 Index S&P 500 Index Funds (Passive) 4% 0.22% 4% 0.31% 7% -0.27% Dodge & Cox Stock U.S. Large Cap Core Equity 0.52% 0.80% 0.46% 0.84% 0.54% -0.32% Vanguard Mid Cap Index U.S. Mid Cap Core Equity (Passive) 5% 0.15% 6% 0.33% 6% -0.28% Baron Growth Inst U.S. Mid Cap Growth Equity 1.05% 1.17% 0.90% 1.28% 1.04% -0.23% INTERNATIONAL EQUITY Artisan International Inv International Equity All % 1.04% 0.72% 1.05% 0.78% 0.14% 1 All information, unless noted otherwise, was created using Morningstar audited expense ratio data as of December 31, Since mutual fund expense ratios do not change frequently, AHIC believes this study to be a relevant comparison for up to a year, at which time the data will be updated. For complete information on AHIC methodologies and additional information on the expense ratio distributions, contact your AHIC consultant. Mutual fund expense peer groups were constructed by Investment Metrics, and are consistent with the peer groups shown in other exhibits comparing performance, risk-metrics and a multitude of other characteristics. 2 Difference column represents the difference between the fund's expense ratio and the Peer Group's average expense ratio. 3 In lieu of an expense ratio, Great West assumes a margin of 89 basis points on the Portfolio Fund. This reflects the gross investment yield of the assets minus the crediting rate and cost of maintaining regulatory capital requirements. 4 Stable value fund average calculated using Hueler Universe data for a mandate size of $1 million in assets. 5 Mixed Asset peer groups utilize prospectus net expense ratio information due to the nature of the asset class and common use of a Fund of Fund structure. 6 Combines multiple Investment Metrics peer groups. Page 51

54 Manager Research Page 52

55 Aon Hewitt Retirement and Investment Proprietary and Confidential InBrief: Vanguard Passive Equity Strategies Review Date Overall Rating Previous Overall Rating June 2017 Buy No Change Overall Rating Vanguard has demonstrated an ability to provide a broad platform of passive equity products which closely track their respective indexes. The large size of the manager s passively managed equity assets and its unique mutual ownership structure allow Vanguard to minimize costs and offer its index funds at reasonable expense ratios. Research conducted by the firm is well-respected in the passive management industry and has directly impacted the construction methodologies of various index providers. We believe Vanguard is among the best in class within the passive equity manager universe. Firm Summary Head Office Location Malvern, PA Parent Name 100% Owned by member funds Firm AUM $4.2 trillion Investment Staff 323 Equity AUM $2.8 trillion Equity Staff 153 Note: Unless otherwise noted AUM data is as of March 31, Investment Manager Evaluation Factor Rating Previous Rating Business 4 No Change Rating Sheet Comments With a wide range of funds and significant assets in passive equities, Vanguard has demonstrated a long-term commitment to the passive equity business. The firm has a unique ownership structure whereby it is owned by its member funds, which are owned in turn by their mutual fund investors. This ensures that firm profits are returned to their ultimate owners (the mutual fund investors) in the form of lower fees. Investment Staff 4 No Change Investment Process 4 No Change Vanguard has a stable and deep investment staff, comprised of equity index portfolio managers, dedicated traders, and dedicated risk management professionals, all of whom oversee the firm s equity index portfolios. Vanguard s equity indexing team is also supported by senior management within the organization. Joseph Brennan is Head of Vanguard s Equity Index Group. Mr. Brennan has been with the organization since Management of the Vanguard equity index strategies aims to fully replicate the respective index holdings for the majority of its funds. For index securities that are subject to higher trading costs, as well as liquidity and market constraints, Vanguard uses a reasonable form of optimization to replicate the characteristics Risk. Reinsurance. Human Resources.