Market Sector Update

• The S&P 500 ended a remarkable year by posting strong returns of 12.2% during the fourth quarter. The market assumed a strong risk-on posture in early November on hopes that positive vaccine developments would accelerate the economic recovery. Additional stimulus announcements further bolstered markets towards year end.
• For the year, the S&P 500 Index returned 18.4% after declining 34% in less than a month at the outset of the pandemic. But not all stocks participated. A wide dispersion in performance between winning sectors and styles like technology and growth stocks contrasted with laggards like energy and value stocks throughout the year.
• The fourth quarter's rally was broad, however, as all 11 sectors of the S&P 500 Index posted gains. Best performing were the cyclical energy (27.8%) and financials (23.2%). Underperformers for the quarter were real estate, utilities and consumer staples stocks which produced mid-single digit returns.

Portfolio Strategy

• The Fund delivered a positive return, but underperformed its benchmark for the quarter. Unfavorable stock screening drove underperformance, which was only partially offset by small but favorable sector allocation impacts.
• The largest relative detractors at the sector level were consumer staples, financials, and communication services stocks. A sizeable overweight (approximately 13%) to the consumer staples sector drove most of the relative underperformance, as the sector meaningfully underperformed the broader market for the period. Further detracting from results was poor stock performance within the index’s financials and communication services stocks, which underperformed those from the broader market sectors.
• Partially offsetting these results was strong stock performance from the index’s overweight to materials stocks, which outperformed the broader market. An underweight to the health care sector, which underperformed the market, also contributed to relative performance.

Outlook

• The Fund remains focused exclusively on companies within the S&P 500® Index that have grown dividends for at least 25 consecutive years. While not necessarily providing the highest dividend yield, the strategy is based on highquality companies with a consistent track record of dividend growth and provides the potential for attractive long-term outperformance.

The opinions expressed are those of the Fund’s managers and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through Dec. 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 S&P 500® Dividend Aristocrats® Index measures the performance S&P 500® Index companies that have increased dividends every year for the last 25 consecutive years. The Index treats each constituent as a distinct investment opportunity without regard to its size by equally weighting each company. The S&P 500 Index is a float-adjusted market capitalization weighted index that measures the large-capitalization U.S. equity market. 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. Large capitalization companies in which the Index and, by extension, the Fund are exposed may go in and out of favor based on market and economic conditions. The Fund's emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform non-dividend paying stocks and the market as a whole over any period of time. In addition, there is no guarantee that the companies in which the Fund invests will declare dividends in the future or that dividends, if declared, will remain at current levels or increase over time. The amount of any dividend the company may pay may fluctuate significantly. In addition, the value of dividend-paying common stocks can decline when interest rates rise as fixed-income investments become more attractive to investors. This risk may be greater due to the current period of historically low interest rates. 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. 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.