Market Sector Update

• The first quarter of 2020 will undoubtedly be one of the most historic periods for not only the economy and capital markets, but for modern civilization. To begin the year, markets were coming off a period where the trade war overhang had lifted and economic activity in international markets was on a positive trajectory.
• The biggest risk to global equity markets appeared to be U.S. elections. This quickly reversed as COVID-19 put economies at a standstill and oil collapsed as demand vanished and a dispute broke out between Russia and Saudi Arabia.
• In the face of what will likely be the sharpest economic downturn in decades, governments and central banks tapped their financial war chests and launched all possible weapons at their disposal. This was met with some relief in the markets toward the end of the quarter, but markets were still down significantly.

Portfolio Strategy

• A passively managed index fund, the Fund delivered a negative return and performed in line its benchmark for the quarter.
• At the sector level, the largest contributors to relative performance were consumer discretionary, financials and industrials.
• 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 66% of the Fund’s total weight.

Outlook

• The world has quickly changed – COVID-19 has taken a very large toll on capital markets and volatility will likely continue as anticipation of the severity and duration of the outbreak evolves and companies report earnings.
• Monetary policy will be very accommodative throughout the world. Central banks will likely exhaust everything at their disposal to keep economies afloat. Fiscal stimulus is also a key component of economic survival. Whether it is large spending packages like in the U.S. or large-scale investments directly in public equities like in Japan, this government behavior will continue.
• The world will eventually recover, but the timeline of this pandemic is still unknown and the range of outcomes is wide. We believe a depth of knowledge in the business models we invest in, the sustainability of their balance sheets, and buying them at perceived attractive relative valuations is a well-suited approach in this environment.

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 March 31, 2020, 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.

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.

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 impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty.

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.