Market Sector Update

• Global equities declined in the third quarter, as measured by the MSCI ACWI Index.
• The U.S.-China trade war continues to take its toll on economic activity as capital investment and manufacturing activity slowed in the U.S., Europe and China. Through the quarter, the likelihood of an overarching deal between the U.S. and China all but evaporated, but there still remains a chance at a narrower trade deal. Europe entered the trade fray with tariffs being implemented between it and the U.S., a signal that tariffs continue to be a key sticking point for global trade. Finally, Brexit is closing in on key deadlines, which could lead to an extension and possible new referendum vote.
• In the face of slowing global growth, central banks around the world continued to follow a loose monetary policy path, with interest rate decreases and stimulus measures taking place in most major economies. The U.S. Federal Reserve eased rates, the European Central Bank reinitiated a bond buying program and major emerging-market economies also moved forward with stimulus.
• Brent crude oil finished the quarter down almost 7%, despite a shock to oil markets. An attack on a Saudi Arabia oil facility provided a temporary lift to prices, but they quickly retreated upon reports the facility would be back online sooner than expected.

Portfolio Strategy

• A passively managed index fund, the Fund delivered a positive return and outperformed its benchmark for the quarter.
• Five of the 11 sectors represented in the Fund delivered positive returns, including utilities, consumer staples, information technology, real estate and communication services. The top sector detractors for the period were materials, financials and health care.
• The Fund’s largest country allocations for the quarter were to the U.S., Japan and the U.K. The combined weight of these three allocations comprised nearly 67% of the Fund’s total weight.

Outlook

• Ongoing geopolitical tensions – the trade war, Brexit, nationalism around the globe and Middle East frictions –seem to have an outsized impact on the economic and market environment. Capital investment and industrial production have suffered, and economic growth now is heavily dependent on consumer spending.
• It remains unclear how long the cycle will go on under these conditions, but the risks are greater. We believe accommodative central bank policy will likely remain the status quo as growth wanes and the risk of inflationary pressure is subdued.

The opinions expressed are those of the Fund’s manager and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through Sept. 30, 2019, are subject to change at any time based on market and other current conditions, and no forecasts can be guaranteed. This commentary is being provided as a general source of information and is not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy. Investment decisions should always be made based on an investor’s specific objectives, financial needs, risk tolerance and time horizon. Past performance is not a guarantee of future results.

Diversification is an investment strategy that attempts to manage risk within your portfolio but it does not guarantee profits or protect against loss in declining markets.

The Fund is a passively managed index fund designed to track the performance of its stated benchmark index. It does not invest in securities based on the managers' view of the investment merit of a particular security or company, nor does it conduct conventional investment research or analysis or forecast market movement or trends, in managing the assets of the Fund. The Fund seeks to remain fully invested at all times in securities that, in combination, provide exposure to its respective benchmark Index without regard to market conditions, trends or direction.

The MSCI ACWI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 46 country indexes, comprising 23 developed and 23 emerging market country indexes. The developed market country indexes included are: Australia,Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. The emerging market country indexes included are: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary,India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. It is not possible to invest directly in an index.

Alexander Ilyasov served as a portfolio manager on the Fund until April 2019.

Risk factors: The value of the Fund's shares will change and you could lose money on your investment. International investing involves additional risks, including currency fluctuations. political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. The Fund entails other risks, including imperfect benchmark correlation and market price variance that may decrease performance. While the Fund attempts to track the performance of its stated index, there is no guarantee or assurance that the methodology used to create the Index will result in the Fund achieving high, or even positive, returns. The Index may underperform, and the Fund could lose value, while other indices or measures of market performance increase in value. A number of factors may affect the Fund's ability to achieve a high degree of correlation with the Index, and there is no guarantee that the Fund will achieve a high degree of correlation. Failure to achieve a high degree of correlation may prevent the Fund from achieving its investment objective. The Fund's use of derivatives presents several risks, including the risk that these instruments may change in value in a manner that adversely affects the Fund's net asset value and the risk that fluctuations in the value of the derivatives may not correlate with the reference instrument underlying the derivative. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. These and other risks are more fully described in the Fund's prospectus. Not all funds or fund classes may be offered at all broker/dealers.