Due Diligence Milliman Managed Risk Parity4

Strategist Due Diligence Report
Milliman Financial Risk Management LLC
August 2017
FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY

Strategist Due Diligence
August 2017
Strategies Evaluated
x Milliman Managed Risk Parity – Growth
x Milliman Managed Risk Parity - Moderate
Key Observations
x The strategies use an algorithm that forecasts volatilities and correlations of the investment opportunity set
to determine the appropriate allocation to a predetermined set of asset classes.
x The strategies are benchmarked against the S&P Multi-Asset Risk Control (MARC) 5% Index, which is a
custom index developed in coordination with Standard and Poor’s. The index relies on a risk parity
approach to investment portfolio management, which focuses on allocation of risk, rather than allocation of
capital. The index allocates between three asset classes: US large cap equity (i.e., S&P 500), 10-year US
Treasury securities, and gold.
x The inception date for the Growth and Moderate strategies is March 8th, 2017. Strategy performance
provided by Milliman prior to the official inception date is based on back-tested hypothetical performance
results that may not be representative of actual historical and/or future performance. Milliman states that
they have been employing versions of these strategies in similar funds that use volatility and correlation
forecasting to determine asset allocations for approximately 5 years.
x The strategies do not have a GIPS-compliant track record.
x ETF selection could probably be optimized to include lower costs ETFs without compromising liquidity.
Minimum Investment Criteria

Firm Viability
x Firm Assets Under Management Equal to or greater than $500 million
As of 12/31/2016, Milliman FRM directly managed $10.7 billion in client assets.
Strategy Viability
x Strategy Assets Under Management Equal to or greater than $100 million
The Growth strategy has approximately $14.7 million in assets under management, and the Moderate strategy has
approximately $7.5 million in assets under management. As of July 14, 2017, AE Wealth Management has roughly
$14 million invested in the Growth strategy. As of 12/31/2016, Milliman FRM directly managed $10.7 billion in
client assets.
Milliman states they have been employing versions of their Managed Risk strategies in similar funds that use
volatility and correlation forecasting to determine asset allocations for approximately 5 years and that those funds
currently have assets of $50 billion.
FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 2

August 2017
Investment Team Experience
x Strategy Track Record with Current Investment Team Equal to or greater than 5 years
The proposed strategies were based on backtested hypothetical data and, at the time of addition to the AE Wealth
Management platform, did not have a live track record with client assets. Milliman states they have been
employing versions of these strategies in similar funds that use volatility and correlation forecasting to determine
asset allocations for approximately 5 years.
The inception date for the Growth and Moderate strategies is March 8, 2017.
Verifiable Performance Track Record
x Strategies delivered in model format must have an equivalent separate account composite or reference portfolio that is
compliant with GIPS standards (verified by independent third-party)
These strategies are not GIPS-compliant. The firm has no current plans to pursue GIPS compliance as they do not
employ composites at this time.
Competitive Fees
x Mutual Funds – equal to or less than most the applicable Morningstar peer group average
x Model Portfolios – equal to or less than 50 basis points
The fee to access these strategies is 20 bps.
Evidence of Potential Skill
x Performance consistency
o At the time of addition, positive 3-year rolling excess returns vs. assigned benchmark in greater than 50% of
monthly periods since inception (or since current portfolio management team began managing the strategy)
o At the time of addition, positive 5-year rolling excess returns vs. assigned benchmark in greater than 65% of
monthly periods since inception (or since current portfolio management team began managing the strategy)
At the time of addition, the strategies were based on backtests and did not have a live track record with client
assets. Thus, skill potential was extremely difficult to determine. Simulated returns had outperformed the
strategy’s benchmark (S&P Multi-Asset Risk Control (MARC) 5% Index) since 1995 while taking on more risk as
defined by standard deviation. This resulted in simulated Sharpe ratios that were slightly below the benchmark
over the duration of the backtest. The hypothetical results posted positive returns in 19 of 21 years in which the
backtest was conducted.
Milliman supplied the following chart of hypothetical backtested returns. There is no reference to the period
covered, and the strategy returns cannot be verified.

August 2017
“These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual
performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-
or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also
subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or
losses similar to these being shown. Milliman does not manage the underlying fund”.
Hypothetical results use index returns adjusted for ETF management fees during periods in which an appropriate index tracking ETF was not available.
Milliman believes the Transamerica Managed Risk Balanced ETF strategy represents an accurate proxy of a live
track record for the proposed strategies since it utilizes similar risk management tools and allocates to ETFs.
However, Milliman has only been the sub-advisor for the strategy since May 2015. In addition, this strategy
doesn’t include allocations to gold and real estate.
The Transamerica strategy uses a combination of Vanguard, iShares and Schwab ETFs. Equity exposure has
averaged around 48% of the portfolio since Milliman began managing the strategy, with the remainder of the
portfolio invested in fixed income securities and cash proxies. International equity exposure has made up around
30% of the total equity exposure on average since inception. Morningstar categorizes the strategy in the US
Insurance Allocation 30%-50% peer group, and the Bloomberg Barclays US Aggregate Bond Index and is listed as a
primary benchmark (the Transamerica Managed Risk – Balanced ETF VP Blended benchmark is also listed; unclear
at this time as to what this benchmark includes). Given the strategy’s significant equity exposure, the 50% Russell
Global/50% Bloomberg Barclays US Aggregate Bond Index appears to be an appropriate benchmark.
Since Milliman began managing the strategy on May 1, 2015 through November 30, 2016, the strategy had
underperformed all relevant benchmarks and the peer group.
Standard deviation was in line with the backtested standard deviation for the proposed Moderate strategy, and
was slightly below the 50% Russell Global/50% Bloomberg Barclays US Aggregate Bond Index. Downside
protection was better than the S&P 500, has been largely in line with the 50% Russell Global/50% Bloomberg
Barclays US Aggregate Bond Index, and had fallen below the Bloomberg Barclays US Aggregate Bond Index. The
strategy ranked in the 77th of peers since Milliman began managing the strategy on May 1st, 2015 through
November 2016. Due to the relatively short track record, long-term performance consistency could not be assessed.

August 2017
5/1/2015
11/30/2016
Morningstar
category Downside Worst Max
Return percentile Std Dev Deviation Best Month Best Quarter Worst Month Quarter Drawdown
Transamerica Mgd Risk Bal ETF VP Int -0.50 77 6.27 1.17 3.49 2.19 -3.52 -3.70 -6.48
BBgBarc US Agg Bond 1.13 3.21 4.55 1.80 3.03 -2.37 -0.57 -3.28
50% Russell Global - 50% BarCap U.S. Agg 0.30 6.68 0.00 4.24 3.01 -3.43 -4.28 -6.19
S&P 500 5.72 12.26 3.09 8.44 7.04 -6.03 -6.44 -8.36
Excess vs.
BBgBarc US Agg Bond -1.64 3.07 -3.37 1.70 -0.84 -1.15 -3.13 -3.20
50% Russell Global - 50% BarCap U.S. Agg -0.80 -0.41 1.17 -0.75 -0.81 -0.09 0.58 -0.29
S&P 500 -6.23 -5.99 -1.92 -4.94 -4.85 2.52 2.74 1.87
Source: Morningstar Direct
Strategy Overview
Firm
Milliman Financial Risk Management LLC (Milliman FRM) provides financial risk management to the retirement
savings industry. Established in 1998 as a business unit within Milliman, Inc., the practice now includes over 150
professionals operating from three trading platforms around the world (Chicago, London, and Sydney). In 2011 the
business unit was organized as a limited liability company and a wholly-owned subsidiary of Milliman, Inc.
Milliman FRM was registered with the SEC as an investment adviser and with the CFTC/NFA as a commodity
trading adviser in 2011, and registered as a commodity pool operator in 2012. Milliman FRM’s advisory affiliates
are Milliman Financial Strategies Ltd (UK) and Milliman Pty Ltd. (Australia), each wholly owned subsidiaries of
Milliman, Inc. Milliman, Inc. was founded in 1947. Milliman, Inc. is owned and operated by approximately 400
principals.
Milliman FRM’s focus is providing financial risk management services, which follows two major business lines:
fund-based services (asset management) and hedging services to the life insurance industry. Milliman FRM offers
four core strategies, each of which are further tailored to individual clients’ needs.
As of June 30, 2017 Milliman FRM provides investment advisory, hedging, and consulting services on $152 billion
in assets. Approximately $52 billion of this is in the Milliman Managed Risk Strategy in funds and pensions, with
the remaining $100 billion in consulting and advisory services to insurance companies. As of 12/31/2016, Milliman
FRM directly managed $22.4 billion in client assets.
Investment Team
The strategies are managed by the Milliman FRM research team, which is dedicated to developing advanced
techniques in volatility and correlation forecasting and risk allocation methodologies. The team includes at least 11
investment professionals. Investment team member responsibilities include portfolio management, quantitative
development, and trading.
In 2012 Milliman FRM hired Jeff Greco as a Portfolio Manager. There have been no other material changes to the
team in the past five years.
Investment Process and Philosophy
The algorithm methodology uses the forecasting of volatilities and correlations of the investment opportunity set to
determine the allocation to asset classes (the asset classes used in the strategies have been selected for their

August 2017
liquidity). These estimates are created based on historical returns of the asset classes. Specifically, these estimates
are used to determine the relative allocation between assets as well as the overall allocation to assets and cash.
Milliman states that the backtest was created using out-of-sample forecasts. The algorithm uses models that are
calibrated each day of the backtest using the data that would have been available as of that day. This methodology
captures how the algorithm would have performed without leaking in future data or information into the
algorithm.
Milliman believes that the goal of the asset allocation process is to obtain equal exposure to each of the available
risks, and the resulting risk diversification helps to mitigate concentration risk. Volatility control is used by the
allocation process to protect capital and limit drawdowns during times when markets are excessively volatile.
Additionally, the volatility control process does not allow for leverage. Diagnostic results are generated as part of
calibrations processes which are then studied by the Milliman FRM staff to ensure that the processes are
functioning properly. Liquidity is monitored to make sure that strategies are not trading too aggressively under
certain market conditions.
The algorithm used to manage the strategy is maintained by Milliman FRM’s quantitative research group.
Milliman states the source code for the algorithm is in source control, goes through unit and regression testing, and
is peer reviewed prior to being released. The quantitative research group began research into risk managed funds
in the late 2000s with volatility forecasting. From there, improvements in the models and methods have expanded
to multi asset forecasting, more robust volatility modeling and risk weighting schemes being explored and
developed.
The strategies are benchmarked against the S&P Multi-Asset Risk Control (MARC) 5% Index, which is a custom
index developed in coordination with Standard and Poor’s. The index relies on a risk parity approach to
investment portfolio management, which focuses on allocation of risk, rather than allocation of capital. The index
allocates between three asset classes: US large cap equity (i.e., S&P 500), 10-year US Treasury securities, and gold.
The index maintains a 5% target volatility level, with allowable exposure up to 150%. In view of the constraints of
an index-based approach, the strategy uses a “naïve” risk parity approach that does not consider the correlations
between asset classes.
Milliman states that the S&P Multi-Asset Risk Control (MARC) 5% Index and the strategies proposed differ in the
following ways:
s The strategies have more available asset classes for investing

s The strategies do not allow for leverage (maximum of 100% exposure)
s The strategies have a higher volatility target/limit
s The strategies employ advanced volatility and correlation forecasting instead of standard formulas
s The strategies employ a more advanced asset allocation methodology. These include using correlations to
create the most diversified portfolio based on the asset classes being used

August 2017
Source: Milliman
The strategy invests in 10 ETFs. The strategy only invests in non-leverage ETFs. The ETFs were selected based on
liquidity and efficiency of trading while keeping expense ratios in mind, rather than basing selection solely on the
lowest expense ratio. However, the final selection of ETFs is open to discussion as the size of the fund and the
implementation strategy is finalized.
Source: Milliman
Milliman recommends using GLD for the commodity exposure, as they believe it provides diversification through
inflation protection, is highly liquid, and its ETF structure holds physical gold. When testing alternatives to the
S&P Multi-Asset Risk Control (MARC) 5% Index, the use of a commodity basket (instead of the gold allocation)
was also analyzed. For the basket, allocations to precious metals, base metals, energy and soft commodities were
used in the basket. The analysis showed that the overall performance was similar between the two alternatives.
In the commodity ETF space, the structure of the exposure to the commodity is critical. Some exchange-traded
products hold the physical commodity; others hold futures contracts, and some are structured as obligations
(exchange-traded notes). Liquidity is also a key factor in ETF selection. The team believes that gaining exposure to a
commodity basket through the DBC futures contract or by creating the basket directly would be challenging given
liquidity and other constraints.

August 2017
The strategy does not have a fully-invested mandate. The strategy will be fully invested in the underlying ETFs if
the realized volatility of the portfolio is less than the target volatility. The average cash position over the backtest
period was around ~1%.
Milliman provided the following comments in regard to what type of market environment might provide
challenges.
“One scenario that would present a challenge to the methodology would be if the correlation structure between
assets changes drastically and in a short period, and the correlation forecasting mechanism is not able to adjust
quickly enough. This could happen if there is a significant change in correlation between asset classes, which is
believed to be a less than likely event. Such an abrupt change would lead to the allocations between the asset
classes not reflecting these new correlations. As a result, the diversification of the portfolio would be less than
optimal. “
“A second scenario that would present a challenge is when unexpected, sudden drops in asset prices occur. The
algorithm is designed to limit the amount of volatility in strategy performance based on the volatility forecasts. If a
major market decline and excessive volatility both occur without triggering the volatility forecasting mechanism,
the strategy will not have time to de-risk before the drop (e.g., gap risk). In most situations, market volatility is
likely to be increasing before large moves and the strategy will be able to deallocate before these events happen. It
should also be noted that the fund does not incorporate leverage and therefore even in market environments where
the strategy does not deallocate, the fund performance would be no worse than a similar strategy that that employs
no volatility management at all.“
Portfolio Composition and Characteristics
Backtested historical asset allocation is listed in the charts below. The Moderate strategy adds additional weight to
fixed income to reduce the return and volatility of the strategy, while improving risk adjusted return.
Source: Milliman

August 2017
“These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual
performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-
or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also
subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or
losses similar to these being shown. Milliman does not manage the underlying fund”. Source: Milliman
Tax efficiency is not an explicit part of the process. The average turnover numbers for the strategy are provided in
the table below:
Annualized Turnover (as of July 2017; includes actual (3/8/17-7/31/17) and backtested assumptions)
Growth Portfolio Moderate Portfolio

Last 1 Year 92% 83%
Last 3 Years 58% 47%
Investment advisory services are available through Sterling Capital Management LLC, a separate subsidiary of BB&T Corporation. Sterling Capital Management
LLC manages customized investment portfolios, provides asset allocation analysis and offers other investment-related services to affluent individuals and
businesses. Securities and other investments held in investment management or investment advisory accounts at Sterling Capital Management LLC are not
deposits or other obligations of BB&T Corporation, Branch Banking and Trust Company or any affiliate, are not guaranteed by Branch Banking and Trust
Company or any other bank, are not insured by the FDIC or any other government agency, and are subject to investment risk, including possible loss of principal
invested.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial trends, which are based on
current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as
an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material
has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for, accounting, legal or tax advice. References
to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes
only and are not to be relied upon as advice or interpreted as a recommendation.

Release date 10-31-2017 Page 1 of 10
Overall Morningstar RatingTM Standard Index
iShares 20+ Year Treasury Bond ETF QQQ BBgBarc US Agg
Category Index
BBgBarc US
Morningstar Cat
US Fund Long
(USD) 24 US Fund Long Government Bond TR USD Government Long
TR USD
Government
Performance 10-31-2017 7 7 7 7 7 7 7 8 7 7 7 7 Investment Style

Fixed-Income
Quarterly Returns 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total % 100 100 100 100 99 100 100 100 99 100 100 99 Bond %
2015 4.19 -9.09 5.29 -1.38 -1.65 100k
80k Growth of $10,000
2016 8.52 6.92 -0.56 -12.15 1.36 60k
2017 1.42 4.15 0.54 — 6.16 iShares 20+ Year Treasury
40k Bond ETF
Trailing Returns 1 Yr 3 Yr 5 Yr 10 Yr Incept
20,382
Std Mkt 09-30-17 -6.97 — 2.80 6.92 6.68 20k Category Average
Std NAV 09-30-17 -6.70 — 2.83 6.93 6.69 19,801
Standard Index
Mkt Total Ret -2.74 3.99 2.89 6.73 6.64 10k
16,475
NAV Total Ret -2.58 3.98 2.84 6.76 6.65
+/- Std Index -3.49 1.58 0.81 2.57 — 4k
+/- Cat Index -0.29 0.08 -0.03 0.08 — Performance Quartile
( & * ( ) * ) ) & ( * _ (within category)
% Rank Cat — — — —
No. in Cat — — — — 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 10-17 History
0.70 10.29 33.92 -21.80 9.05 33.96 2.63 -13.37 27.30 -1.79 1.18 6.45 Mkt Total Ret %
Subsidized Unsubsidized
0.83 10.15 33.76 -21.53 9.25 33.60 3.25 -13.91 27.35 -1.65 1.36 6.16 NAV Total Ret %
30-day SEC Yield 10-31-2017 2.72 —
-3.50 3.18 28.52 -27.46 2.71 25.76 -0.97 -11.89 21.39 -2.20 -1.29 2.96 +/- Standard Index
Performance Disclosure
-1.23 0.50 11.08 -9.35 -0.18 4.45 -0.54 -1.44 2.69 -0.48 -0.06 0.16 +/- Category Index
The Overall Morningstar Rating is based on risk-adjusted returns,
derived from a weighted average of the three-, five-, and 10-year 53 20 34 59 81 40 77 87 18 55 28 — % Rank Cat
(if applicable) Morningstar metrics. 34 29 30 33 33 34 32 24 30 34 34 — No. of Funds in Cat
The performance data quoted represents past performance and -0.01 0.05 0.04 0.08 -0.01 0.06 -0.03 0.02 -0.01 -0.01 0.01 — Avg Prem/Discount %
does not guarantee future results. The investment return and
principal value of an investment will fluctuate; thus an investor's Portfolio Analysis 10-30-2017
shares, when sold or redeemed, may be worth more or less than Asset Allocation % 10-26-2017 Net % Long % Short % Share Chg Share Holdings : Net Assets
their original cost. since Amount 0 Total Stocks , 33 Total Fixed-Income, %
Cash 0.64 0.66 0.02 10-2017 24% Turnover Ratio
Current performance may be lower or higher than return data
US Stocks 0.00 0.00 0.00
quoted herein. For performance data current to the most recent Y 795 mil US Treasury Bond 2.5% 8.74
Non-US Stocks 0.00 0.00 0.00
month-end, please call 800-474-2737 or visit www.ishares.com. Y 709 mil US Treasury Bond 3% 8.66
Bonds 99.36 99.36 0.00
Fees and Expenses Other/Not Clsfd 0.00 0.00 0.00 Y 581 mil US Treasury Bond 3.125% 7.23
Fund Expenses Y 585 mil US Treasury Bond 2.875% 7.01
Total 100.00 100.02 0.02
Management Fees % 0.15 Y 553 mil US Treasury Bond 2.5% 6.09
Annual Report Net Expense Ratio % 0.15 Equity Style Portfolio Statistics Port Rel Rel
Avg Index Cat Y 446 mil US Treasury Bond 2.875% 5.28
Value Blend Growth
Annual Report Gross Expense Ratio % 0.15 P/E Ratio TTM — — — Y 461 mil US Treasury Bond 2.5% 5.05
Large
12b1 Expense % NA P/C Ratio TTM — — — Y 326 mil US Treasury Bond 4.25% 4.88
P/B Ratio TTM — — — Y 349 mil US Treasury Bond 3% 4.27
Mid
Risk and Return Profile

3 Yr 5 Yr 10 Yr Geo Avg Mkt Cap — — — Y 257 mil US Treasury Bond 4.625% 4.01
Small
24 funds 22 funds 16 funds $mil

Morningstar Rating TM
5Q 4Q 2Q Y 278 mil US Treasury Bond 3.625% 3.76
Morningstar Risk +Avg +Avg +Avg
Fixed-Income Style Y 289 mil US Treasury Bond 3% 3.50
Avg Eff Maturity 26.02
Morningstar Return +Avg +Avg Avg
Ltd Mod Ext
Y 294 mil US Treasury Bond 2.75% 3.45
Avg Eff Duration 17.68
High
3 Yr 5 Yr 10 Yr Avg Wtd Coupon 3.19

Med
Standard Deviation NAV 11.53 10.89 14.15 Avg Wtd Price 106.84
Standard Deviation MKT 12.02 11.31 —
Low
Sector Weightings Stocks % Rel Std Index

Mean NAV 3.98 2.84 6.76 h Cyclical — —
Mean MKT 3.99 2.89 6.73 Credit Quality Breakdown — Bond %
r Basic Materials — —
Sharpe Ratio 0.45 0.29 0.52 AAA 100.00 t Consumer Cyclical — —
AA 0.00
MPT Statistics Standard Index Best Fit Index y Financial Services — —
BBgBarc US A 0.00
u Real Estate — —
NAV Treasury Long TR BBB 0.00
USD
BB 0.00 j Sensitive — —
Alpha -3.70 -0.11 B 0.00 i Communication Services — —
Beta 3.75 1.07 o Energy — —
Below B 0.00
R-Squared 86.04 99.92 p Industrials — —
NR 0.00
12-Month Yield 2.50% a Technology — —
Potential Cap Gains Exp — Regional Exposure Stocks % Rel Std Index
k Defensive — —
Leveraged No Americas — —
s Consumer Defensive — —
Leverage Type — Greater Europe — —
d Healthcare — —
Leverage % 100.00 Greater Asia — —
f Utilities — —
Primary Prospectus Benchmark ICE U.S. Treasury
20+ Year Bond TR
USD
Operations
Family: iShares Ticker: TLT Prem/Discount: -0.02
Manager: Multiple Incept: 07-22-2002 Mkt Price: 124.46
Tenure: 7.3 Years Expiration Date: — Base Currency: USD
Total Assets: $8,204.1 mil Exchange: NASDAQ Legal Structure: Open Ended Investment Company
Shares Outstanding: 65.90 mil NAV: 124.49 Backing Bank: BlackRock Fund Advisors
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Standardized and Tax Adjusted Returns Disclosure Statement
The performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will
fluctuate; thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return
data quoted herein. For performance data current to the most recent month-end please visit http://advisor.morningstar.com/familyinfo.asp.
Standardized Returns assume reinvestment of dividends and capital gains. They depict performance without adjusting for the effects of taxation, but are adjusted
to reflect sales charges and ongoing fund expenses.
If adjusted for taxation, the performance quoted would be significantly reduced. For variable annuities, additional expenses will be taken into account, including
M&E risk charges, fund-level expenses such as management fees and operating fees, contract-level administration fees, and charges such as surrender, contract,
and sales charges.
After-tax returns are calculated using the highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-
tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund
shares through tax-deferred arrangements such as 401(k) plans or an IRA. After-tax returns exclude the effects of either the alternative minimum tax or phase-out
of certain tax credits. Any taxes due are as of the time the distributions are made, and the taxable amount and tax character of each distribution are as specified
by the fund on the dividend declaration date. Due to foreign tax credits or realized capital losses, after-tax returns may be greater than before-tax returns. After-
tax returns for exchange-traded funds are based on net asset value.
Money Market Fund Disclosures

If money market fund(s) are included in the Standardized Returns table below, each money market fund’s name will be followed by a superscripted letter that links
it to the applicable disclosure below:
Institutional Money Market Funds (designated by an “S”):

You could lose money by investing in the fund. Because the share price of the fund will fluctuate, when you sell your shares they may be worth more or less than
what you originally paid for them. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity
falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not
expect that the sponsor will provide financial support to the fund at any time.
Government Money Market Funds that have chosen to rely on the ability to impose liquidity fees and suspend redemptions (designated by an ”L” )
and
Retail Money Market Funds (designated by an “L”):
You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do
so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums
because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide
financial support to the fund at any time.
Government Money Market Funds that have chosen not to rely on the ability to impose liquidity fees and suspend redemptions (designated by an
“N”):
so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has
no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
Annualized returns 09-30-2017

Standardized Returns (%) 7-day Yield 7-day Yield 1Yr 5Yr 10Yr Since Inception Max Front Max Back Net Exp Gross Exp Max
Subsidized Unsubsidized Inception Date Load % Load % Ratio % Ratio % Redemption %
as of date as of date
iShares 20+ Year Treasury Bond ETF-NAV — — -6.70 2.83 6.93 6.69 07-22-2002 NA NA 0.15 0.15 NA
iShares 20+ Year Treasury Bond ETF-Market — — -6.97 2.80 6.92 6.68 07-22-2002 NA NA 0.15 0.15 NA
BBgBarc US Agg Bond TR USD 0.07 2.06 4.27 — —
BBgBarc US Government Long TR USD -6.14 2.87 6.83 — —
BBgBarc US Treasury Long TR USD -6.35 2.84 6.89 — —
MSCI EAFE NR USD 19.10 8.38 1.34 — —
S&P 500 TR USD 18.61 14.22 7.44 — —
ß

USTREAS T-Bill Auction Ave 3 Mon 0.77 0.23 0.40 — —
Return after Tax (%) On Distribution On Distribution and Sales of Shares
1Yr 5Yr 10Yr Since Inception Inception Date 1Yr 5Yr 10Yr Since Inception
iShares 20+ Year Treasury Bond ETF-NAV -7.71 1.65 5.59 5.22 07-22-2002 -3.80 1.61 4.92 4.71
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An ETF is an investment company that typically has an investment objective of

ETF Detail Report striving to achieve a similar return as a particular market index. The ETF will
invest in either all or a representative sample of the securities included in the
Disclosure Statement index it is seeking to imitate. Like closed-end funds, an ETF can be traded on a
secondary market and thus have a market price that may be higher or lower
than its net asset value. If these shares trade at a price above their NAV, they
The Exchange-Traded Fund (ETF) Detail Report is supplemental sales literature,
are said to be trading at a premium. Conversely, if they are trading at a price
and therefore must be preceded or accompanied by the mutual fund’s current
below their NAV, they are said to be trading at a discount. ETFs are not actively
prospectus or an equivalent statement. Please read this information carefully.
managed, so their value may be affected by a general decline in the U.S.
In all cases, this disclosure statement should accompany the ETF Detail Report.
market segments relating to their underlying indexes. Similarly, an imperfect
Morningstar is not itself a FINRA-member firm. All data presented is based on
match between an ETF’s holdings and those of its underlying index may cause
the most recent information available to Morningstar as of the release date and
its performance to vary from that of its underlying index. The expense ratio of
may or may not be an accurate reflection of current data for securities included
an ETF is an annual fee charged to a shareholder. It includes operating
in the fund’s portfolio. There is no assurance that the data will remain the
expenses and management fees, but does not take into account any brokerage
same.
costs. ETFs do not have 12b-1 fees or sales loads. Capital gains from funds held
in a taxable account are subject to income tax. In many, but not all cases, ETFs
Unless otherwise specified, the definition of “funds” used throughout this
are generally considered to be more tax-efficient when compared to similarly
Disclosure Statement includes closed-end funds, exchange-traded funds,
invested mutual funds.
grantor trusts, index mutual funds, open-ended mutual funds, and unit
investment trusts. It does not include exchange-traded notes or exchange-
Holding company depository receipts (HOLDRs) are similar to ETFs, but they
traded commodities.
focus on narrow industry groups. HOLDRs initially own 20 stocks, which are
unmanaged, and can become more concentrated due to mergers, or the
Prior to 2016, Morningstar’s methodology evaluated open-end mutual funds and
disparate performance of their holdings. HOLDRs can only be bought in 100-
exchange-traded funds as separate groups. Each group contained a subset of
share increments. Investors may exchange shares of a HOLDR for its underlying
the current investments included in our current comparative analysis. In this
stocks at any time.
report, historical data presented on a calendar-year basis and trailing periods
ending at the most-recent month-end reflect the updated methodology.
A money-market fund is an investment company that invests in commercial
paper, banker's acceptances, repurchase agreements, government securities,
Risk measures (such as alpha, beta, r-squared, standard deviation, mean, or
certificates of deposit and other highly liquid securities, and pays money market
Sharpe ratio) are calculated for securities or portfolios that have at least a
rates of interest. Money markets are not FDIC-insured, may lose money, and are
three-year history.
not guaranteed by a bank or other financial institution.
Most Morningstar rankings do not include any adjustment for one-time sales
An open-end fund is an investment company that issues shares on a continuous
charges, or loads. Morningstar does publish load-adjusted returns, and ranks
basis. Shares can be purchased from the open-end mutual fund itself, or
such returns within a Morningstar Category in certain reports. The total returns
through an intermediary, but cannot be traded on a secondary market, such as
for ETFs and fund share classes without one-time loads are equal to
the New York Stock Exchange. Investors pay the open-end mutual fund’s
Morningstar’s calculation of load-adjusted returns. Share classes that are
current net asset value plus any initial sales loads. Net asset value is
subject to one-time loads relating to advice or sales commissions have their
calculated daily, at the close of business. Open-end mutual fund shares can be
returns adjusted as part of the load-adjusted return calculation to reflect those
redeemed, or sold back to the fund or intermediary, at their current net asset
loads.
value minus any deferred sales loads or redemption fees. The expense ratio for
an open-end mutual fund is an annual fee charged to a shareholder. It includes
Comparison of Fund Types operating expenses and management fees, but does not take into account any
Funds, including closed-end funds, exchange-traded funds (ETFs), money market brokerage costs. Open-end funds may also have 12b-1 fees. Income
funds, open-end funds, and unit investment trusts (UITs), have many distributions and capital gains of the open-end fund are subject to income tax,
similarities, but also many important differences. In general, publically-offered if held in a taxable account.
funds are investment companies registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended. Funds
A unit investment trust (UIT) is an investment company organized under a trust
pool money from their investors and manage it according to an investment
agreement between a sponsor and trustee. UITs typically purchase a fixed
strategy or objective, which can vary greatly from fund to fund. Funds have the
portfolio of securities and then sell units in the trust to investors. The major
ability to offer diversification and professional management, but also involve
difference between a UIT and a mutual fund is that a mutual fund is actively
risk, including the loss of principal.
managed, while a UIT is not. On a periodic basis, UITs usually distribute to the
unit holder their pro rata share of the trust's net investment income and net
A closed-end fund is an investment company, which typically makes one public realized capital gains, if any. If the trust is one that invests only in tax-free
offering of a fixed number of shares. Thereafter, shares are traded on a securities, then the income from the trust is also tax-free. UITs generally make
secondary market. As a result, the secondary market price may be higher or one public offering of a fixed number of units. However, in some cases, the
lower than the closed-end fund's net asset value (NAV). If these shares trade at sponsor will maintain a secondary market that allows existing unit holders to
a price above their NAV, they are said to be trading at a premium. Conversely, if sell their units and for new investors to buy units. A one-time initial sales
they are trading at a price below their NAV, they are said to be trading at a charge is deducted from an investment made into the trust. UIT investors may
discount. A closed-end mutual fund’s expense ratio is an annual fee charged to also pay creation and development fees, organization costs, and/or trustee and
a shareholder. It includes operating expenses and management fees, but does operation expenses. UIT units may be redeemed by the sponsor at their net
not take into account any brokerage costs. Closed-end funds may also have asset value minus a deferred sales charge, and sold to other investors. UITs
12b-1 fees. Income distributions and capital gains of the closed-end fund are have set termination dates, at which point the underlying securities are sold
subject to income tax, if held in a taxable account.
ß
and the sales proceeds are paid to the investor. Typically, a UIT investment is statistics, investors get a more robust description of the fund’s exposure and
rolled over into successive trusts as part of a long-term strategy. A rollover fee risk. Long positions involve buying the security outright and selling it later, with
may be charged for the exercise of rollover purchases. There are tax the hope the security’s price rises over time. Short positions are taken with the
consequences associated with rolling over an investment from one trust to the hope of benefitting from anticipated price declines. The investor borrows the
next. security from another investor, sells it and receives cash, and then is obligated
to buy it back at some point in the future. If the price falls after the short sale,
Performance the investor will have sold high and can buy low to close the short position and
The performance data given represents past performance and should not be lock in a profit. However, if the price of the security increases after the short
considered indicative of future results. Principal value and investment return sale, the investor will experience a loss buying it at a higher price than the sale
will fluctuate, so that an investor's shares, when sold, may be worth more or price.
less than the original investment. Fund portfolio statistics change over time.
Funds are not FDIC-insured, may lose value, and are not guaranteed by a bank Most fund portfolios hold fairly conventional securities, such as long positions
or other financial institution. in equities and bonds. Morningstar may generate a colored pie chart for these
portfolios. Other portfolios use other investment strategies or securities, such
The market price noted on the ETF Detail Report is the price of the fund as of as short positions or derivatives, in an attempt to reduce transaction costs,
the close of trading on the last business day at month-end. This date is listed enhance returns, or reduce risk. Some of these securities and strategies
at the top of the ETF Detail Report. behave like conventional securities, while other have unique return and risk
characteristics. Portfolios that incorporate investment strategies resulting in
Morningstar calculates after-tax returns using the highest applicable federal short positions or portfolio with relatively exotic derivative positions often
marginal income tax rate plus the Medicare surcharge. As of 2016, this rate is report data to Morningstar that does not meet the parameters of the calculation
39.6% plus 0.9% Medicare surcharge, or 40.5%, this has been unchanged since underlying a pie chart’s generation. Because of the nature of how these
2013. This rate changes periodically in accordance with changes in federal law. securities are reported to Morningstar, we may not always get complete
portfolio information to report asset allocation. Morningstar, at its discretion,
12 Month Yield may determine if unidentified characteristics of fund holdings are material.
12 Month Yield is derived by summing the trailing 12-months’ income Asset allocation and other breakdowns may be rescaled accordingly so that
distributions and dividing the sum by the last month’s ending NAV, plus any percentages total to 100 percent. (Morningstar used discretion to determine if
capital gains distributed over the same period. Income refers only to interest unidentified characteristics of fund holdings are material, pie charts and other
payments from fixed-income securities and dividend payoffs from common breakdowns may rescale identified characteristics to 100% for more intuitive
stocks. presentation.)
12b1 Expense % Note that all other portfolio statistics presented in this report are based on the
A 12b-1 fee is a fee used to pay for a mutual fund’s distribution costs. It is long (or long rescaled) holdings of the fund only.
often used as a commission to brokers for selling the fund. The amount of the
fee is taken from a fund’s returns. Average Effective Duration
Duration is a time measure of a bond's interest-rate sensitivity. Average
30-Day SEC Yield effective duration is a weighted average of the duration of the fixed-income
The 30-day SEC Yield is a calculation based on a 30-day period ending on the securities within a portfolio.
last day of the previous month. It is computed by dividing the net investment
income per share earned during the period by the maximum offering price per Average Effective Maturity
share on the last day of the period. The figure listed lags by one month. When Average Effective Maturity is a weighted average of the maturities of all bonds
a dash appears, the yield available is more than 30 days old. This information in a portfolio.
is taken from fund surveys.
Average Weighted Coupon
Alpha A coupon is the fixed annual percentage paid out on a bond. The average
Alpha is a measure of the difference between a security or portfolio’s actual weighted coupon is the asset-weighted coupon of each bond in the portfolio.
returns and its expected performance, given its level of risk (as measured by
beta.) Alpha is often seen as a measure of the value added or subtracted by a Average Weighted Price
portfolio manager. Average Weighted Price is the asset-weighted price of bonds held in a
portfolio, expressed as a percentage of par (face) value. This number reveals if
Asset Allocation the portfolio favors bonds selling at prices above or below par value (premium
Asset Allocation reflects asset class weightings of the portfolio. The “Other” or discount securities respectively.)
category includes security types that are not neatly classified in the other asset
classes, such as convertible bonds and preferred stocks, or cannot be classified Best Fit Index
by Morningstar as a result of missing data. Morningstar may display asset Alpha, beta, and R-squared statistics are presented for a broad market index
allocation data in several ways, including tables or pie charts. In addition, and a “best fit” index. The Best Fit Index identified in this report was
Morningstar may compare the asset class breakdown of the fund against its determined by Morningstar by calculating R-squared for the fund against
three-year average, category average, and/or index proxy. approximately 100 indexes tracked by Morningstar. The index representing the
highest R-squared is identified as the best fit index. The best fit index may not
Asset allocations shown in tables may include a breakdown among the long, be the fund’s benchmark, nor does it necessarily contain the types of securities
short, and net (long positions net of short) positions. These statistics that may be held by the fund or portfolio.
summarize what the fund’s managers are buying and how they are positioning
the fund’s portfolio. When short positions are captured in these portfolio Beta
ß
Beta is a measure of a security or portfolio’s sensitivity to market movements registered with and governed by the U.S. Securities and Exchange Commission.
(proxied using an index.) A beta of greater than 1 indicates more volatility than The Manager Research Group evaluates funds based on five key pillars, which
the market, and a beta of less than 1 indicates less volatility than the market. are process, performance, people, parent, and price. The Manager Research
Group uses this five pillar evaluation to determine how they believe funds are
Credit Quality Breakdown likely to perform relative to a benchmark, or in the case of exchange-traded
Credit Quality breakdowns are shown for corporate-bond holdings in the fund’s funds and index mutual funds, a relevant peer group, over the long term on a
portfolio and depict the quality of bonds in the underlying portfolio. It shows the risk-adjusted basis. They consider quantitative and qualitative factors in their
percentage of fixed-income securities that fall within each credit-quality rating research, and the weight of each pillar may vary. The Analyst Rating scale is
as assigned by a Nationally Recognized Statistical Rating Organization Gold, Silver, Bronze, Neutral, and Negative. A Morningstar Analyst Rating of
(NRSRO). Bonds not rated by an NRSRO are included in the Other/Not- Gold, Silver, or Bronze reflects the Manager Research Group’s conviction in a
Classified category. fund’s prospects for outperformance. Analyst Ratings ultimately reflect the
Manager Research Group’s overall assessment, are overseen by an Analyst
Expense Ratio % Rating Committee, and are continuously monitored and reevaluated at least
The expense ratio is the annual fee that all funds charge their shareholders. It every 14 months. For more detailed information about Morningstar’s Analyst
expresses the percentage of assets deducted each fiscal year for fund Rating, including its methodology, please go to
expenses, including 12b-1 fees, management fees, administrative fees, global.morningstar.com/managerdisclosures/.
operating costs, and all other asset-based costs incurred by the fund. Portfolio
transaction fees, or brokerage costs, as well as front-end or deferred sales The Morningstar Analyst Rating (i) should not be used as the sole basis in
charges are not included in the expense ratio. The expense ratio, which is evaluating a fund, (ii) involves unknown risks and uncertainties which may
deducted from the fund’s average net assets, is accrued on a daily basis. The cause the Manager Research Group’s expectations not to occur or to differ
gross expense ratio, in contrast to the net expense ratio, includes interest and significantly from what they expected, and (iii) should not be considered an
dividends on borrowed securities but does not reflect any fee waivers in effect offer or solicitation to buy or sell the fund.
during the time period.
Morningstar Category
Geometric Average Market Capitalization Morningstar Category is assigned by placing funds into peer groups based on
Geometric Average Market Capitalization is a measure of the size of the their underlying holdings. The underlying securities in each portfolio are the
companies in which a portfolio invests. primary factor in our analysis as the investment objective and investment
strategy stated in a fund’s prospectus may not be sufficiently detailed for our
Growth of 10,000 proprietary classification methodology. Funds are placed in a category based on
For funds, this graph compares the growth of an investment of 10,000 (in the their portfolio statistics and compositions over the past three years. Analysis of
base currency of the fund) with that of an index and/or with that of the average performance and other indicative facts are also considered. If the fund is new
for all funds in its Morningstar Category. The total returns are not adjusted to and has no portfolio history, Morningstar estimates where it will fall before
reflect sales charges or the effects of taxation but are adjusted to reflect actual giving it a permanent category assignment. Categories may be changed based
ongoing fund expenses, and they assume reinvestment of dividends and capital on recent changes to the portfolio.
gains. If adjusted, effects of sales charges and taxation would reduce the
performance quoted. If pre-inception data is included in the analysis, it will be Morningstar Rank
graphed. Morningstar Rank is the total return percentile rank within each Morningstar
Category. The highest (or most favorable) percentile rank is zero and the lowest
The index in the Growth of 10,000 graph is an unmanaged portfolio of specified (or least favorable) percentile rank is 100. Historical percentile ranks are based
securities and cannot be invested in directly. The index does not reflect any on a snapshot of a fund at the time of calculation.
initial or ongoing expenses. A fund's portfolio may differ significantly from the
securities in the index. The index is chosen by Morningstar. Morningstar Rating™
The Morningstar Rating™ for funds, or "star rating", is calculated for managed
Management Fees % products (including mutual funds, variable annuity and variable life
The management fee includes the management and administrative fees listed subaccounts, exchange-traded funds, closed-end funds, and separate accounts)
in the Management Fees section of a fund’s prospectus. Typically, these fees with at least a three-year history. Exchange-traded funds and open-ended
represent the costs shareholders paid for management and administrative mutual funds are considered a single population for comparative purposes. It is
services over the fund’s prior fiscal year. calculated based on a Morningstar Risk-Adjusted Return measure that accounts
for variation in a managed product's monthly excess performance, placing more
Maximum Redemption Fee % emphasis on downward variations and rewarding consistent performance. The
The Maximum Redemption Fee is the maximum amount a fund may charge if top 10% of products in each product category receive 5 stars, the next 22.5%
redeemed in a specific time period after the fund’s purchase (for example, 30, receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars,
180, or 365 days). and the bottom 10% receive 1 star. The Overall Morningstar Rating for a
managed product is derived from a weighted average of the performance
Mean figures associated with its three-, five-, and 10-year (if applicable) Morningstar
Mean is the annualized geometric return for the period shown. Rating metrics. The weights are: 100% three-year rating for 36-59 months of
total returns, 60% five-year rating/40% three-year rating for 60-119 months of
total returns, and 50% 10-year rating/30% five-year rating/20% three-year
Morningstar Analyst Rating™
rating for 120 or more months of total returns. While the 10-year overall star
The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective
rating formula seems to give the most weight to the 10-year period, the most
evaluation performed by Morningstar’s manager research group, which consists
recent three-year period actually has the greatest impact because it is included
of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the
in all three rating periods.
United States, that subsidiary is Morningstar Research Services LLC, which is
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Morningstar Return “BBB-“; "medium" are those less than “AA-“, but greater or equal to “BBB-“;
The Morningstar Return rates a fund’s performance relative to other managed and "high" are those with a weighted-average credit quality of “AA-“ or higher.
products in its Morningstar Category. It is an assessment of a product's excess When classifying a bond portfolio, Morningstar first maps the NRSRO credit
return over a risk-free rate (the return of the 90-day Treasury Bill) in comparison ratings of the underlying holdings to their respective default rates (as
with the products in its Morningstar category. In each Morningstar category, determined by Morningstar’s analysis of actual historical default rates).
the top 10% of products earn a High Morningstar Return (High), the next 22.5% Morningstar then averages these default rates to determine the average
Above Average (+Avg), the middle 35% Average (Avg), the next 22.5% Below default rate for the entire bond fund. Finally, Morningstar maps this average
Average (-Ave), and the bottom 10% Low (Low). Morningstar Return is default rate to its corresponding credit rating along a convex curve.
measured for up to three time periods (three, five, and 10 years). These
separate measures are then weighted and averaged to produce an overall For interest-rate sensitivity, Morningstar obtains from fund companies the
measure for the product. Products with less than three years of performance average effective duration. Generally, Morningstar classifies a fixed-income
history are not rated. fund's interest-rate sensitivity based on the effective duration of the
Morningstar Core Bond Index, which is currently three years. The classification
of Limited will be assigned to those funds whose average effective duration is
Morningstar Risk between 25% to 75% of MCBI's average effective duration; funds whose
Morningstar Risk evaluates a fund’s downside volatility relative to that of other average effective duration is between 75% to 125% of the MCBI will be
products in its Morningstar Category. It is an assessment of the variations in classified as Moderate; and those that are at 125% or greater of the average
monthly returns, with an emphasis on downside variations, in comparison with effective duration of the MCBI will be classified as Extensive.
the products in its Morningstar category. In each Morningstar category, the
10% of products with the lowest measured risk are described as Low Risk For municipal-bond funds, Morningstar also obtains from fund companies the
(Low), the next 22.5% Below Average (-Avg), the middle 35% Average (Avg), average effective duration. In these cases, static breakpoints are used. These
the next 22.5% Above Average (+Avg), and the top 10% High (High). breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more
Morningstar Risk is measured for up to three time periods (three, five, and 10 than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In
years). These separate measures are then weighted and averaged to produce addition, for non-U.S. taxable and non-U.S. domiciled fixed-income funds, static
an overall measure for the product. Products with less than three years of duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii)
performance history are not rated. Moderate: more than 3.5 years but less than or equal to 6 years; (iii) Extensive:
more than 6 years.
Morningstar Style Box™
The Morningstar Style Box™ reveals a fund’s investment strategy as of the date Interest-rate sensitivity for non-U.S. domiciled funds (excluding funds in
noted on this report. convertible categories) may be measured with modified duration when effective
duration is not available.
For equity funds, the vertical axis shows the market capitalization of the long
stocks owned, and the horizontal axis shows the investment style (value, blend, P/B Ratio TTM
or growth.) A darkened square in the style box indicates the weighted average The Price/Book Ratio (or P/B Ratio) for a fund is the weighted average of the
style of the portfolio. P/B Ratio of the stocks in its portfolio. Book value is the total assets of a
company, less total liabilities. The P/B ratio of a company is calculated by
For fixed-income funds, the vertical axis shows the credit quality of the long dividing the market price of its outstanding stock by the company's book value,
bonds owned and the horizontal axis shows interest-rate sensitivity as and then adjusting for the number of shares outstanding. Stocks with negative
measured by a bond's effective duration. Morningstar seeks credit rating book values are excluded from this calculation. It shows approximately how
information from fund companies on a periodic basis (for example, quarterly). In much an investor is paying for a company’s assets based on historical
compiling credit rating information, Morningstar accepts credit ratings reported valuations.
by fund companies that have been issued by all Nationally Recognized
Statistical Rating Organizations. For a list of all NRSROs, please visit P/C Ratio TTM
http://www.sec.gov/divisions/marketreg/ ratingagency.htm. Additionally, The Price/Cash Flow Ratio (or P/C Ratio) for a fund is the weighted average of
Morningstar accepts foreign credit ratings from widely recognized or registered the P/C Ratio of the stocks in its portfolio. The P/C Ratio of a stock represents
rating agencies. If two rating organizations/ agencies have rated a security, the amount an investor is willing to pay for a dollar generated from a
fund companies are to report the lower rating; if three or more company’s operations. It shows the ability of a company to generate cash and
organizations/agencies have rated a security, fund companies are to report the acts as a gauge of liquidity and solvency.
median rating; and in cases where there are more than two
organization/agency ratings and a median rating does not exist, fund P/E Ratio TTM
companies are to use the lower of the two middle ratings. The Price/Earnings Ratio (or P/E Ratio) for a fund is the weighted average of the
P/E Ratios of the stocks in its portfolio. The P/E Ratio of a stock is the stock’s
Please Note: Morningstar, Inc. is not an NRSRO nor does it issue a credit rating current price divided by the company’s trailing 12-month earnings per share. A
on the fund. NRSRO or rating agency ratings can change from time to time. high P/E Ratio usually indicates the market will pay more to obtain the
company’s earnings because it believes in the company’s abilities to increase
For credit quality, Morningstar combines the credit rating information provided their earnings. A low P/E Ratio indicates the market has less confidence that
by the fund companies with an average default rate calculation to come up with the company’s earnings will increase, however value investors may believe
a weighted-average credit quality. The weighted-average credit quality is such stocks have an overlooked or undervalued potential for appreciation.
currently a letter that roughly corresponds to the scale used by a leading
NRSRO. Bond funds are assigned a style box placement of “low,” “medium,” or Percentile Rank in Category
“high” based on their average credit quality. Funds with a "low" credit quality Percentile Rank is a standardized way of ranking items within a peer group, in
are those whose weighted-average credit quality is determined to be less than this case, funds within the same Morningstar Category. The observation with
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the largest numerical value is ranked zero the observation with the smallest recent calendar-quarter end for one-year, five-year, 10-year, and/or since-
numerical value is ranked 100. The remaining observations are placed equal inception periods, and it demonstrates the impact of sales charges (if
distance from one another on the rating scale. Note that lower percentile ranks applicable) and ongoing fund expenses. Standardized Return reflects the return
are generally more favorable for returns (high returns), while higher percentile an investor may have experience if the security was purchased at the beginning
ranks are generally more favorable for risk measures (low risk). of the period and sold at the end, incurring transaction charges.
Performance Quartile Total Return

Performance Quartile reflects a fund’s Morningstar Rank. Total Return, or "Non Load-Adjusted Return", reflects performance without
adjusting for sales charges (if applicable) or the effects of taxation, but it is
Potential Capital Gains Exposure adjusted to reflect all actual ongoing security expenses and assumes
Potential Capital Gains Exposure is an estimate of the percent of a fund’s reinvestment of dividends and capital gains. It is the return an investor would
assets that represent gains. It measures how much the fund’s assets have have experienced if the fund was held throughout the period. If adjusted for
appreciated, and it can be an indicator of possible future capital gains sales charges and the effects of taxation, the performance quoted would be
distributions. A positive potential capital gains exposure value means that the significantly reduced.
fund’s holdings have generally increased in value while a negative value means
that the fund has reported losses on its book. Total Return +/- indicates how a fund has performed relative to its peers (as
measure by its Standard Index and/or Morningstar Category Index) over the
Quarterly Returns time periods shown.
Quarterly Return is calculated applying the same methodology as Total Return
except it represents return through each quarter-end. Trailing Returns
Standardized Return applies the methodology described in the Standardized
R-Squared Returns page of this report. Standardized Return is calculated through the most
R-squared is the percentage of a security or portfolio’s return movements that recent calendar-quarter end for one-year, five-year, 10-year, and/or since-
are explained by movements in its benchmark index, showing the degree of inception periods, and it demonstrates the impact of sales charges (if
correlation between the security or portfolio and the benchmark. This figure is applicable) and ongoing fund expenses. Standardized Return reflects the return
helpful in assessing how likely it is that beta and alpha are statistically an investor may have experienced if the fund was purchased at the beginning
significant. A value of 1 indicates perfect correlation between the security or of the period and sold at the end, incurring transaction charges.
portfolio and its benchmark. The lower the R-squared value, the lower the
correlation. Load-Adjusted Monthly Return is calculated applying the same methodology as
Standardized Return, except that it represents return through month-end. As
Regional Exposure with Standardized Return, it reflects the impact of sales charges and ongoing
The regional exposure is a display of the portfolio’s assets invested in the fund expenses, but not taxation. If adjusted for the effects of taxation, the
regions shown on the report. performance quoted would be significantly different.
Sector Weightings Trailing Return +/- indicates how a fund has performed relative to its peers (as
Super Sectors represent Morningstar's broadest classification of equity sectors measure by its Standard Index and/or Morningstar Category Index) over the
by assigning the 11 equity sectors into three classifications. The Cyclical Super time periods shown.
Sector includes industries significantly impacted by economic shifts, and the
stocks included in these sectors generally have betas greater than 1. The
Defensive Super Sector generally includes industries that are relatively immune Investment Risks
to economic cycles, and the stocks in these industries generally have betas less
than 1. The Sensitive Super Sector includes industries that ebb and flow with
the overall economy, but not severely so. Stocks in the Sensitive Super Sector International/Emerging Market Equities: Investing in international securities
generally have betas that are close to 1. involves special additional risks. These risks include, but are not limited to,
currency risk, political risk, and risk associated with varying accounting
standards. Investing in emerging markets may accentuate these risks.
Share Change
Shares Change represents the number of shares of a stock bought or sold by a
fund since the previously reported portfolio of the fund. Sector Strategies: Portfolios that invest exclusively in one sector or industry
involve additional risks. The lack of industry diversification subjects the investor
to increased industry-specific risks.
Sharpe Ratio
Sharpe Ratio uses standard deviation and excess return (a measure of a
security or portfolio’s return in excess of the U.S. Treasury three-month Non-Diversified Strategies: Portfolios that invest a significant percentage of
Treasury Bill) to determine the reward per unit of risk. assets in a single issuer involve additional risks, including share price
fluctuations, because of the increased concentration of investments.
Standard Deviation
Standard deviation is a statistical measure of the volatility of the security or Small Cap Equities: Portfolios that invest in stocks of small companies involve
portfolio’s returns. The larger the standard deviation, the greater the volatility additional risks. Smaller companies typically have a higher risk of failure, and
of return. are not as well established as larger blue-chip companies. Historically, smaller-
company stocks have experienced a greater degree of market volatility than the
overall market average.
Standardized Returns
Returns page of this report. Standardized Return is calculated through the most Mid Cap Equities: Portfolios that invest in companies with market capitalization
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below $10 billion involve additional risks. The securities of these companies but are not limited to leverage, short selling, short-term trading, and investing
may be more volatile and less liquid than the securities of larger companies. in derivatives, these funds may have greater risk, volatility, and expenses than
those focusing on traditional investment strategies.
High-Yield Bonds: Portfolios that invest in lower-rated debt securities
(commonly referred to as junk bonds) involve additional risks because of the Liquidity Risk: Closed-end fund, ETF, and HOLDR trading may be halted due to
lower credit quality of the securities in the portfolio. The investor should be market conditions, impacting an investor’s ability to sell a fund.
aware of the possible higher level of volatility, and increased risk of default.
Market Price Risk: The market price of ETFs, HOLDRs, and closed-end funds
Tax-Free Municipal Bonds: The investor should note that the income from tax- traded on the secondary market is subject to the forces of supply and demand
free municipal bond funds may be subject to state and local taxation and the and thus independent of the NAV. This can result in the market price trading at
Alternative Minimum Tax. a premium or discount to the NAV, which will affect an investor’s value.
Bonds: Bonds are subject to interest rate risk. As the prevailing level of bond Market Risk: The market prices of ETFs and HOLDRs can fluctuate as a result of
interest rates rise, the value of bonds already held in a portfolio declines. several factors, such as security-specific factors or general investor sentiment.
Portfolios that hold bonds are subject to declines and increases in value due to Therefore, investors should be aware of the prospect of market fluctuations and
general changes in interest rates. the impact it may have on the market price.
HOLDRs: The investor should note that these are narrow industry-focused Target-Date Funds: Target-date funds typically invest in other mutual funds and
products that, if the industry is hit by hard times, will lack diversification and are designed for investors who are planning to retire during the target date
possible loss of investment would be likely. These securities can trade at a year. The fund's target date is the approximate date when investors expect to
discount to market price, ownership is of a fractional share interest, the begin withdrawing their money. A target-date fund's investment
underlying investments may not be representative of the particular industry, the objective/strategy typically becomes more conservative over time, primarily by
HOLDR might be delisted from the AMEX if the number of underlying reducing its allocation to equity mutual funds and increasing its allocations in
companies drops below nine, and the investor may experience trading halts. fixed-income mutual funds. An investor's principal value in a target-date fund is
not guaranteed at any time, including at the fund's target date.
Hedge Funds: The investor should note that hedge fund investing involves
specialized risks that are dependent upon the type of strategies undertaken by High double- and triple-digit returns: High double- and triple-digit returns were
the manager. This can include distressed or event-driven strategies, long/short the result of extremely favorable market conditions, which may not continue to
strategies, using arbitrage (exploiting price inefficiencies), international be the case. High returns for short time periods must not be a major factor
investing, and use of leverage, options and/or derivatives. Although the goal of when making investment decisions.
hedge fund managers may be to reduce volatility and produce positive absolute
return under a variety of market conditions, hedge funds may involve a high
degree of risk and are suitable only for investors of substantial financial means Benchmark Disclosure
who could bear the entire loss of their investment.
Bank Loan/Senior Debt: Bank loans and senior loans are impacted by the risks
associated with fixed income in general, including interest rate risk and default BBgBarc US Agg Bond TR USD
risk. They are often non-investment grade; therefore, the risk of default is high. This index is composed of the BarCap Government/Credit Index, the Mortgage-
These securities are also relatively illiquid. Managed products that invest in Backed Securities Index, and the Asset-Backed Securities Index. The returns we
bank loans/senior debt are often highly leveraged, producing a high risk of publish for the index are total returns, which includes the daily reinvestment of
return volatility. dividends. The constituents displayed for this index are from the following
proxy: iShares Core US Aggregate Bond ETF.
Exchange Traded Notes (ETNs): ETNs are unsecured debt obligations. Any
repayment of notes is subject to the issuer's ability to repay its obligations. BBgBarc US Government Long TR USD
ETNs do not typically pay interest. Includes those indexes found in the BarCap Government index which have a
maturity of 10 years or more. The constituents displayed for this index are from
Leveraged ETFs: Leveraged investments are designed to meet multiples of the the following proxy: iShares 20+ Year Treasury Bond ETF.
return performance of the index they track and seek to meet their fund
objectives on a daily basis (or other time period stated within the prospectus BBgBarc US Treasury Long TR USD
objective). The leverage/gearing ratio is the amount of excess return that a Includes all public obligations of the U.S. Treasury, excluding flower bonds and
leveraged investment is designed to achieve in comparison to its index foreign-targeted issues with maturates of 10 years or longer. The returns we
performance (i.e. 200%, 300%, -200%, or -300% or 2X, 3X, -2X, -3X). publish for the index are total returns, which include reinvestment of dividends.
Compounding has the ability to affect the performance of the fund to be either The constituents displayed for this index are from the following proxy: SPDR®
greater or less than the index performance multiplied by the multiple stated Portfolio Long Term Treasury ETF.
within the funds objective over a stated time period.
MSCI EAFE NR USD
Short Positions: When a short position moves in an unfavorable way, the This Europe, Australasia, and Far East index is a market-capitalization-weighted
losses are theoretically unlimited. The broker may demand more collateral and index of 21 non-U.S., industrialized country indexes.
a manager might have to close out a short position at an inopportune time to
limit further losses. This disclosure applies to all MSCI indices: Certain information included herein
is derived by Morningstar in part from MSCI’s Index Constituents (the “Index
Long-Short: Due to the strategies used by long-short funds, which may include Data”). However, MSCI has not reviewed any information contained herein and
ß
does not endorse or express any opinion such information or analysis. MSCI
does not make any express or implied warranties, representations or
guarantees concerning the Index Data or any information or data derived
therefrom, and in no event will MSCI have any liability for any direct, indirect,
special, punitive, consequential or any other damages (including lost profits)
relating to any use of this information.
S&P 500 TR USD

A market capitalization-weighted index composed of the 500 most widely held
stocks whose assets and/or revenues are based in the US; it's often used as a
proxy for the U.S. stock market. TR (Total Return) indexes include daily
reinvestment of dividends. The constituents displayed for this index are from
the following proxy: iShares Core S&P 500 ETF.
USTREAS T-Bill Auction Ave 3 Mon

Three-month T-bills are government-backed, short-term investments considered
to be risk-free and as good as cash because the maturity is only three months.
Morningstar collects yields on the T-bill on a weekly basis from the Wall Street
Journal.
ß
Vanguard REIT ETF (USD) QQQQ MSCI ACWI NR
Category Index
S&P United States
Morningstar Cat
US Fund Real Estate
225 US Fund Real Estate USD REIT TR USD
Equity
Quarterly Returns 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total % 98 98 98 100 99 100 99 100 100 99 100 100 Stocks %
2015 4.73 -10.48 2.02 7.02 2.37 100k
2016 6.28 6.80 -1.45 -2.98 8.53 60k
2017 0.96 1.61 0.90 — 5.18 Vanguard REIT ETF
40k 23,666
Category Average
Std Mkt 09-30-17 0.49 — 9.48 6.04 8.95 20k 20,891
Std NAV 09-30-17 0.43 — 9.48 6.02 8.95 Standard Index
20,941
Mkt Total Ret 10.12 5.99 10.08 7.08 8.96 10k
NAV Total Ret 10.11 5.99 10.09 7.11 8.96
+/- Std Index -14.53 -2.02 -0.85 2.74 — 4k
+/- Cat Index 0.72 0.17 0.12 0.39 — Performance Quartile
* * * * * * * * * ( & _ (within category)
% Rank Cat 42 34 26 27
No. in Cat 252 225 198 138 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 11-17 History
35.19 -16.34 -37.00 30.08 28.37 8.62 17.63 2.31 30.36 2.42 8.60 5.06 Mkt Total Ret %
35.20 -16.38 -36.98 29.76 28.44 8.62 17.67 2.42 30.29 2.37 8.53 5.18 NAV Total Ret %
30-day SEC Yield — —
14.25 -28.05 5.21 -4.86 15.77 15.97 1.54 -20.38 26.13 4.73 0.66 -16.82 +/- Standard Index
-0.83 0.32 1.35 1.17 -0.03 0.14 -0.31 0.02 0.03 -0.18 0.03 0.69 +/- Category Index
(if applicable) Morningstar metrics. 306 372 265 262 267 242 263 259 274 282 267 253 No. of Funds in Cat
The performance data quoted represents past performance and -0.01 -0.06 0.04 -0.22 0.03 -0.02 -0.04 -0.01 -0.01 0.00 -0.01 — Avg Prem/Discount %
shares, when sold or redeemed, may be worth more or less than Asset Allocation % Net % Long % Short % Share Chg Share Holdings : Net Assets
US Stocks 99.53 99.53 0.00 315 mil Vanguard REIT II Index 9.88
quoted herein. For performance data current to the most recent
Non-US Stocks 0.00 0.00 0.00
month-end, please call 866-499-8473 or visit www.vanguard.com. T 21 mil Simon Property Group Inc 5.19
Bonds 0.00 0.00 0.00
Fees and Expenses Other/Not Clsfd 0.01 0.01 0.00 T 5 mil Equinix Inc 3.86
Fund Expenses T 36 mil Prologis Inc 3.66
Total 100.00 100.01 0.01
Management Fees % 0.11 T 11 mil Public Storage 3.47
Avg Index Cat T 9 mil AvalonBay Communities Inc 2.67
Value Blend Growth
Annual Report Gross Expense Ratio % 0.12 P/E Ratio TTM 28.0 1.44 1.01 T 25 mil Equity Residential 2.64
Large
12b1 Expense % NA P/C Ratio TTM — — — T 25 mil Welltower Inc 2.62

P/B Ratio TTM 2.3 1.01 5.56 T 14 mil Digital Realty Trust Inc 2.60
Mid

3 Yr 5 Yr 10 Yr Geo Avg Mkt Cap 10214 0.18 0.74 T 24 mil Ventas Inc 2.38
Small

3Q 4Q 4Q T 10 mil Boston Properties Inc 1.99
Morningstar Risk +Avg +Avg +Avg
Fixed-Income Style T 4 mil Essex Property Trust Inc 1.84
Avg Eff Maturity —
Morningstar Return Avg +Avg +Avg
Ltd Mod Ext
T 18 mil Realty Income Corp 1.57
Avg Eff Duration —
T 50 mil Host Hotels & Resorts Inc 1.55
High
3 Yr 5 Yr 10 Yr Avg Wtd Coupon —

T 12 mil Vornado Realty Trust 1.36
Med
Standard Deviation NAV 13.47 13.76 25.04 Avg Wtd Price —

Standard Deviation MKT 13.60 13.88 24.92
Low

Mean NAV 5.99 10.09 7.11 h Cyclical 98.8 2.52
r Basic Materials 0.0 0.00
Sharpe Ratio 0.47 0.75 0.39 AAA — t Consumer Cyclical 0.5 0.05
AA —
MPT Statistics Standard Index Best Fit Index y Financial Services 0.0 0.00
A —
NAV u Real Estate 98.3 33.80
Alpha 2.47 — BBB —
BB — j Sensitive 1.2 0.03
Beta 0.49 —
B — i Communication Services 0.0 0.00
R-Squared 14.60 —
Below B — o Energy 0.0 0.00
12-Month Yield — p Industrials 1.2 0.11
NR —
Potential Cap Gains Exp — a Technology 0.0 0.00
Leveraged No Regional Exposure Stocks % Rel Std Index
k Defensive 0.0 0.00
Leverage Type — Americas 100.0 1.76
s Consumer Defensive 0.0 0.00
Leverage % 100.00 Greater Europe 0.0 0.00
d Healthcare 0.0 0.00
Primary Prospectus Benchmark MSCI US REIT GR Greater Asia 0.0 0.00
USD f Utilities 0.0 0.00
Operations
Family: Vanguard Ticker: VNQ Prem/Discount: -0.04
Total Assets: $35,197.7 mil Exchange: NYSE ARCA Legal Structure: Open Ended Investment Company
Shares Outstanding: 415.90 mil NAV: 84.42 Backing Bank: Vanguard Group Inc
ß
and sales charges.


and
“N”):

Vanguard REIT ETF-NAV — — 0.43 9.48 6.02 8.95 09-23-2004 NA NA 0.12 0.12 NA
Vanguard REIT ETF-Market — — 0.49 9.48 6.04 8.95 09-23-2004 NA NA 0.12 0.12 NA
MSCI ACWI NR USD 18.65 10.20 3.88 — —
MSCI EAFE NR USD 19.10 8.38 1.34 — —
S&P 500 TR USD 18.61 14.22 7.44 — —
S&P United States REIT TR USD -0.12 9.39 5.62 — —
ß

Vanguard REIT ETF-NAV -1.63 7.86 4.61 7.50 09-23-2004 0.21 6.69 4.05 6.66
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
The Morningstar Rating™ for funds, or "star rating", is calculated for funds and
Management Fees % separate accounts with at least a three-year history. Exchange-traded funds
The management fee includes the management and administrative fees listed and open-ended mutual funds are considered a single population for
in the Management Fees section of a fund’s prospectus. Typically, these fees comparative purposes. It is calculated based on a Morningstar Risk-Adjusted
represent the costs shareholders paid for management and administrative Return measure that accounts for variation in a managed product's monthly
services over the fund’s prior fiscal year. excess performance, placing more emphasis on downward variations and
rewarding consistent performance. The Morningstar Rating does not include
Maximum Redemption Fee % any adjustment for sales loads. The top 10% of products in each product
The Maximum Redemption Fee is the maximum amount a fund may charge if category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3
redeemed in a specific time period after the fund’s purchase (for example, 30, stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The
180, or 365 days). Overall Morningstar Rating for a managed product is derived from a weighted
average of the performance figures associated with its three-, five-, and 10-
Mean year (if applicable) Morningstar Rating metrics. For more information about the
Mean is the annualized geometric return for the period shown. Morningstar Rating for funds, including its methodology, please go to
global.morningstar.com/managerdisclosures/.
The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective Morningstar Return
evaluation performed by Morningstar’s manager research group, which consists The Morningstar Return rates a fund’s performance relative to other managed
of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the products in its Morningstar Category. It is an assessment of a product's excess
United States, that subsidiary is Morningstar Research Services LLC, which is return over a risk-free rate (the return of the 90-day Treasury Bill) in comparison
ß
more than 6 years.
“BBB-“; "medium" are those less than “AA-“, but greater or equal to “BBB-“; the largest numerical value is ranked zero the observation with the smallest
and "high" are those with a weighted-average credit quality of “AA-“ or higher. numerical value is ranked 100. The remaining observations are placed equal
When classifying a bond portfolio, Morningstar first maps the NRSRO credit distance from one another on the rating scale. Note that lower percentile ranks
ratings of the underlying holdings to their respective default rates (as are generally more favorable for returns (high returns), while higher percentile
ß

Share Change
Sharpe Ratio
Standard Deviation
recent calendar-quarter end for one-year, five-year, 10-year, and/or since- below $10 billion involve additional risks. The securities of these companies
inception periods, and it demonstrates the impact of sales charges (if may be more volatile and less liquid than the securities of larger companies.
applicable) and ongoing fund expenses. Standardized Return reflects the return
an investor may have experience if the security was purchased at the beginning High-Yield Bonds: Portfolios that invest in lower-rated debt securities
ß
repayment of notes is subject to the issuer's ability to repay its obligations. MSCI ACWI NR USD
ETNs do not typically pay interest. Description unavailable. The constituents displayed for this index are from the
following proxy: iShares MSCI ACWI ETF.
Leveraged ETFs: Leveraged investments are designed to meet multiples of the
return performance of the index they track and seek to meet their fund MSCI EAFE NR USD
objectives on a daily basis (or other time period stated within the prospectus This Europe, Australasia, and Far East index is a market-capitalization-weighted
objective). The leverage/gearing ratio is the amount of excess return that a index of 21 non-U.S., industrialized country indexes.
leveraged investment is designed to achieve in comparison to its index
performance (i.e. 200%, 300%, -200%, or -300% or 2X, 3X, -2X, -3X). This disclosure applies to all MSCI indices: Certain information included herein
Compounding has the ability to affect the performance of the fund to be either is derived by Morningstar in part from MSCI’s Index Constituents (the “Index
greater or less than the index performance multiplied by the multiple stated Data”). However, MSCI has not reviewed any information contained herein and
within the funds objective over a stated time period. does not endorse or express any opinion such information or analysis. MSCI
Short Positions: When a short position moves in an unfavorable way, the guarantees concerning the Index Data or any information or data derived
losses are theoretically unlimited. The broker may demand more collateral and therefrom, and in no event will MSCI have any liability for any direct, indirect,
a manager might have to close out a short position at an inopportune time to special, punitive, consequential or any other damages (including lost profits)
limit further losses. relating to any use of this information.
Long-Short: Due to the strategies used by long-short funds, which may include S&P 500 TR USD
but are not limited to leverage, short selling, short-term trading, and investing A market capitalization-weighted index composed of the 500 most widely held
in derivatives, these funds may have greater risk, volatility, and expenses than stocks whose assets and/or revenues are based in the US; it's often used as a
those focusing on traditional investment strategies. proxy for the U.S. stock market. TR (Total Return) indexes include daily
ß
S&P United States REIT TR USD

Description unavailable. The constituents displayed for this index are from the
following proxy: First Trust S&P REIT Fund.

Journal.
ß
SPDR® Gold Shares (USD) Morningstar Lng-
Category Index
Bloomberg Sub US Fund Commodities
Morningstar Cat
10 US Fund Commodities Only Cmdty TR USD Precious Metals TR Precious Metals

Precious Metals USD
Fixed-Income
Quarterly Returns 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total % 0 — 0 0 0 0 0 0 0 0 0 0 Bond %
2015 -1.12 -1.45 -4.97 -4.74 -11.78 100k
2016 16.34 6.67 0.03 -12.44 8.69 60k
2017 7.29 -0.31 3.19 — 10.04 SPDR® Gold Shares
40k 23,800
Category Average
Std Mkt 09-30-17 -3.23 — -6.69 5.17 8.15 20k 22,571
Std NAV 09-30-17 -3.37 — -6.67 5.20 8.21 Standard Index
8,652
Mkt Total Ret 8.37 2.60 -6.12 4.59 8.01 10k
NAV Total Ret 8.23 2.26 -6.18 4.60 8.07
+/- Std Index 5.48 11.90 3.91 9.22 — 4k
& & & * ) & ) * * * ( _ (within category)
% Rank Cat 45 34 43 50
No. in Cat 11 10 8 3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 11-17 History
22.17 30.56 4.96 23.99 29.27 9.57 6.60 -28.33 -2.19 -10.67 8.03 10.48 Mkt Total Ret %
23.44 31.07 2.99 27.12 27.25 11.21 5.26 -28.09 -0.58 -11.78 8.69 10.04 NAV Total Ret %
23.67 -0.69 36.76 6.22 3.63 16.52 1.60 -24.34 23.80 14.51 -4.25 10.79 +/- Standard Index
-3.67 5.12 7.04 -2.08 -15.40 6.64 -1.02 2.71 6.12 -0.33 -0.81 2.38 +/- Category Index
The performance data quoted represents past performance and 0.50 -0.01 -0.25 0.23 0.40 0.11 -0.07 0.29 -0.24 0.14 0.10 — Avg Prem/Discount %
principal value of an investment will fluctuate; thus an investor's Portfolio Analysis 11-30-2017 Top Holdings 10-31-2017
US Stocks 0.00 0.00 0.00
quoted herein. For performance data current to the most recent Y 27 mil Physical Gold Bullion 100.00
Non-US Stocks 0.00 0.00 0.00
month-end, please call 866-320-4053 or visit
www.streettracksgoldshares.com.
Bonds 0.00 0.00 0.00 Sector Weightings Stocks % Rel Std Index
Other/Not Clsfd 100.00 100.00 0.00 h Cyclical — —
Fees and Expenses
Total 100.00 100.00 0.00 r Basic Materials — —
Fund Expenses
Management Fees % 0.40 Equity Style Portfolio Statistics Port Rel Rel t Consumer Cyclical — —
Annual Report Net Expense Ratio % 0.40 Value Blend Growth
Avg Index Cat y Financial Services — —
P/E Ratio TTM — — — u Real Estate — —
Large
Annual Report Gross Expense Ratio % 0.40 P/C Ratio TTM — — —

12b1 Expense % NA P/B Ratio TTM — — — j Sensitive — —
Mid
Risk and Return Profile Geo Avg Mkt Cap — — — i Communication Services — —
Small
$mil o Energy — —
3 Yr 5 Yr 10 Yr
10 funds 8 funds 3 funds p Industrials — —
— — — Fixed-Income Style
a Technology — —
Ltd Mod Ext
Morningstar Risk — — —
Avg Eff Duration — k Defensive — —
High
Morningstar Return — — — Avg Wtd Coupon — s Consumer Defensive — —

Med
3 Yr 5 Yr 10 Yr Avg Wtd Price — d Healthcare — —

Standard Deviation NAV 14.03 16.06 19.03
f Utilities — —
Low

Mean NAV 2.26 -6.18 4.60 Credit Quality Breakdown — Bond %
Mean MKT 2.60 -6.12 4.59 AAA —
Sharpe Ratio 0.20 -0.33 0.31 AA —
A —
MPT Statistics Standard Index Best Fit Index
NAV BBB —
Alpha 3.68 — BB —
Beta 0.10 — B —
R-Squared 1.37 — Below B —
12-Month Yield — NR —
Leveraged No Americas — —
Leverage Type — Greater Europe — —
Leverage % 100.00 Greater Asia — —
Primary Prospectus Benchmark LBMA Gold Price PM
USD
Operations
Family: SPDR State Street Global Ticker: GLD Prem/Discount: -0.37
Advisors Incept: 11-18-2004 Mkt Price: 121.10
Manager: Management Team
Expiration Date: — Base Currency: USD
Tenure: 13.1 Years
Exchange: NYSE ARCA Legal Structure: Grantor Trust
Total Assets: $34,768.1 mil
NAV: 121.55 Backing Bank: World Gold Trust Services, LLC
Shares Outstanding: 287.10 mil
ß
and sales charges.


and
“N”):

SPDR® Gold Shares-NAV — — -3.37 -6.67 5.20 8.21 11-18-2004 NA NA 0.40 0.40 NA
SPDR® Gold Shares-Market — — -3.23 -6.69 5.17 8.15 11-18-2004 NA NA 0.40 0.40 NA
Bloomberg Sub Precious Metals TR -6.56 -8.81 4.00 — —
USD
Morningstar Lng-Only Cmdty TR USD -1.10 -11.28 -4.67 — —
MSCI EAFE NR USD 19.10 8.38 1.34 — —
ß

S&P 500 TR USD 18.61 14.22 7.44 — —

SPDR® Gold Shares-NAV -3.37 -6.67 5.20 8.21 11-18-2004 -1.91 -4.91 4.16 6.83
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
ß
more than 6 years.
ß

Share Change
Sharpe Ratio
Standard Deviation
ß
repayment of notes is subject to the issuer's ability to repay its obligations. Bloomberg Sub Precious Metals TR USD
ETNs do not typically pay interest. DJ-UBS Precious Metals is a multiple-commodity sub-index of the DJ-UBS
Commodity Index and is intended to reflect the returns that are potentially
Leveraged ETFs: Leveraged investments are designed to meet multiples of the available through an unleveraged investment in the futures contracts on
return performance of the index they track and seek to meet their fund physical commodities comprising the index and potential rate of interest on
objectives on a daily basis (or other time period stated within the prospectus cash collateral invested in specified T-Bills. Contracts for gold and silver are
objective). The leverage/gearing ratio is the amount of excess return that a currently included in DJ-UBS Precious Metals.
performance (i.e. 200%, 300%, -200%, or -300% or 2X, 3X, -2X, -3X). Morningstar Lng-Only Cmdty TR USD
Compounding has the ability to affect the performance of the fund to be either The Long-Only Commodity Index is a fully collateralized commodity futures
greater or less than the index performance multiplied by the multiple stated index that is long all eligible commodities.
MSCI EAFE NR USD
Short Positions: When a short position moves in an unfavorable way, the This Europe, Australasia, and Far East index is a market-capitalization-weighted
losses are theoretically unlimited. The broker may demand more collateral and index of 21 non-U.S., industrialized country indexes.
a manager might have to close out a short position at an inopportune time to
limit further losses. This disclosure applies to all MSCI indices: Certain information included herein
is derived by Morningstar in part from MSCI’s Index Constituents (the “Index
Long-Short: Due to the strategies used by long-short funds, which may include Data”). However, MSCI has not reviewed any information contained herein and
but are not limited to leverage, short selling, short-term trading, and investing does not endorse or express any opinion such information or analysis. MSCI
in derivatives, these funds may have greater risk, volatility, and expenses than does not make any express or implied warranties, representations or
those focusing on traditional investment strategies. guarantees concerning the Index Data or any information or data derived
ß

S&P 500 TR USD


Journal.
ß
iShares Core S&P 500 ETF (USD) QQQQ S&P 500 TR USD
Category Index
Russell 1000 TR
Morningstar Cat
US Fund Large Blend
1,183 US Fund Large Blend USD
Equity
2015 0.94 0.26 -6.44 7.03 1.34 100k
2016 1.34 2.44 3.84 3.81 11.90 60k
2017 6.06 3.08 4.47 — 20.45 iShares Core S&P 500 ETF
40k 27,144
Category Average
Std Mkt 09-30-17 18.58 — 14.19 7.37 5.19 20k 23,340
27,307
Mkt Total Ret 22.88 10.87 15.70 8.25 5.46 10k
NAV Total Ret 22.83 10.86 15.69 8.25 5.46
+/- Std Index -0.05 -0.05 -0.06 -0.05 — 4k
+/- Cat Index 0.22 0.13 -0.01 -0.15 — Performance Quartile
& * * ( * & * * & & * _ (within category)
% Rank Cat 26 13 14 23
No. in Cat 1,338 1,183 1,051 772 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 11-17 History
15.95 5.32 -36.93 26.42 15.09 1.86 16.06 32.30 13.56 1.30 12.16 20.30 Mkt Total Ret %
15.69 5.44 -36.95 26.43 14.96 2.03 15.91 32.31 13.62 1.34 11.90 20.45 NAV Total Ret %
-0.10 -0.06 0.04 -0.04 -0.10 -0.08 -0.09 -0.08 -0.07 -0.05 -0.06 -0.04 +/- Standard Index
0.23 -0.34 0.64 -2.00 -1.14 0.53 -0.51 -0.80 0.38 0.42 -0.15 0.11 +/- Category Index
The performance data quoted represents past performance and 0.01 0.00 0.01 0.01 -0.03 -0.02 -0.06 -0.04 -0.02 0.00 -0.02 — Avg Prem/Discount %
US Stocks 98.76 98.76 0.00
quoted herein. For performance data current to the most recent T 32 mil Apple Inc 3.97
Non-US Stocks 0.93 0.93 0.00
month-end, please call 800-474-2737 or visit www.ishares.com. T 47 mil Microsoft Corp 2.86
Bonds 0.00 0.00 0.00
Fees and Expenses Other/Not Clsfd 0.00 0.00 0.00 T 2 mil Amazon.com Inc 2.03
Fund Expenses T 14 mil Facebook Inc A 1.91
Total 100.00 100.00 0.00
Management Fees % 0.04 T 16 mil Johnson & Johnson 1.67
Avg Index Cat T 12 mil Berkshire Hathaway Inc B 1.57
Value Blend Growth
Annual Report Gross Expense Ratio % 0.04 P/E Ratio TTM 22.7 1.00 1.02 T 22 mil JPMorgan Chase & Co 1.56
Large
12b1 Expense % NA P/C Ratio TTM 14.2 1.00 0.99 T 26 mil Exxon Mobil Corp 1.53
P/B Ratio TTM 3.1 1.00 9.82 T 2 mil Alphabet Inc A 1.39
Mid

3 Yr 5 Yr 10 Yr Geo Avg Mkt Cap 95381 1.00 0.72 T 2 mil Alphabet Inc C 1.39
Small

4Q 4Q 4Q T 60 mil Bank of America Corporation 1.18
Morningstar Risk Avg -Avg Avg
Fixed-Income Style T 27 mil Wells Fargo & Co 1.09
Morningstar Return +Avg +Avg +Avg
Ltd Mod Ext
T 16 mil Procter & Gamble Co 1.02
T 12 mil Chevron Corp 0.98
High

T 38 mil AT&T Inc 0.96
Med

Low

AA —
A —
Alpha -0.05 — BBB —
Beta 1.00 —
R-Squared 100.00 —
NR —
Primary Prospectus Benchmark S&P 500 TR USD Greater Asia 0.5 1.00
f Utilities 3.1 1.00
Operations
Family: iShares Ticker: IVV Prem/Discount: 0.03
ß
and sales charges.


and
“N”):

iShares Core S&P 500 ETF-NAV — — 18.57 14.17 7.39 5.19 05-15-2000 NA NA 0.04 0.04 NA
iShares Core S&P 500 ETF-Market — — 18.58 14.19 7.37 5.19 05-15-2000 NA NA 0.04 0.04 NA
MSCI EAFE NR USD 19.10 8.38 1.34 — —
Russell 1000 TR USD 18.54 14.27 7.55 — —
S&P 500 TR USD 18.61 14.22 7.44 — —
ß

iShares Core S&P 500 ETF-NAV 17.79 13.53 6.92 4.69 05-15-2000 10.70 11.21 5.87 4.05
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
ß
more than 6 years.
ß

Share Change
Sharpe Ratio
Standard Deviation
ß
repayment of notes is subject to the issuer's ability to repay its obligations. MSCI EAFE NR USD
ETNs do not typically pay interest. This Europe, Australasia, and Far East index is a market-capitalization-weighted
index of 21 non-U.S., industrialized country indexes.
return performance of the index they track and seek to meet their fund This disclosure applies to all MSCI indices: Certain information included herein
objectives on a daily basis (or other time period stated within the prospectus is derived by Morningstar in part from MSCI’s Index Constituents (the “Index
objective). The leverage/gearing ratio is the amount of excess return that a Data”). However, MSCI has not reviewed any information contained herein and
leveraged investment is designed to achieve in comparison to its index does not endorse or express any opinion such information or analysis. MSCI
performance (i.e. 200%, 300%, -200%, or -300% or 2X, 3X, -2X, -3X). does not make any express or implied warranties, representations or
Compounding has the ability to affect the performance of the fund to be either guarantees concerning the Index Data or any information or data derived
greater or less than the index performance multiplied by the multiple stated therefrom, and in no event will MSCI have any liability for any direct, indirect,
within the funds objective over a stated time period. special, punitive, consequential or any other damages (including lost profits)
Short Positions: When a short position moves in an unfavorable way, the
losses are theoretically unlimited. The broker may demand more collateral and Russell 1000 TR USD
a manager might have to close out a short position at an inopportune time to Consists of the 1000 largest companies within the Russell 3000 index, which
limit further losses. represents approximately 98% of the investable US equity market. Also known
as the Market-Oriented Index, because it represents the group of stocks from
Long-Short: Due to the strategies used by long-short funds, which may include which most active money managers choose. The constituents displayed for this
but are not limited to leverage, short selling, short-term trading, and investing index are from the following proxy: iShares Russell 1000 ETF.
in derivatives, these funds may have greater risk, volatility, and expenses than
those focusing on traditional investment strategies. S&P 500 TR USD
ß

Journal.
ß
iShares Core S&P Mid-Cap ETF (USD) QQQQ S&P 500 TR USD
Category Index Morningstar Cat
Russell Mid Cap TR US Fund Mid-Cap
340 US Fund Mid-Cap Blend USD Blend
Equity
2015 5.32 -1.10 -8.52 2.60 -2.23 100k
2016 3.77 3.97 4.12 7.39 20.63 60k
2017 3.92 1.96 3.22 — 15.94 iShares Core S&P Mid-Cap
40k ETF
30,352
Std Mkt 09-30-17 17.38 — 14.36 8.89 9.48 20k Category Average
Std NAV 09-30-17 17.45 — 14.34 8.91 9.48 24,240
Standard Index
Mkt Total Ret 18.53 11.30 15.39 9.80 9.75 10k
27,307
NAV Total Ret 18.46 11.30 15.37 9.82 9.75
+/- Std Index -4.42 0.39 -0.38 1.52 — 4k
+/- Cat Index -0.30 1.98 0.11 0.84 — Performance Quartile
( * * * & * * ( * & & _ (within category)
% Rank Cat 38 7 19 6
No. in Cat 420 340 309 208 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 11-17 History
10.14 7.30 -36.02 37.48 26.72 -2.18 17.79 33.46 9.71 -2.33 20.73 15.96 Mkt Total Ret %
10.13 7.80 -36.19 37.21 26.38 -1.89 17.76 33.40 9.64 -2.23 20.63 15.94 NAV Total Ret %
-5.66 2.30 0.80 10.74 11.32 -4.01 1.76 1.01 -4.05 -3.61 8.67 -4.55 +/- Standard Index
-5.13 2.20 5.27 -3.27 0.91 -0.35 0.48 -1.36 -3.58 0.21 6.83 -1.48 +/- Category Index
The performance data quoted represents past performance and -0.03 0.01 -0.06 -0.06 0.00 -0.02 -0.06 -0.06 -0.03 -0.01 -0.01 — Avg Prem/Discount %
US Stocks 98.99 98.99 0.00
quoted herein. For performance data current to the most recent T 3 mil Take-Two Interactive Software Inc 0.78
Non-US Stocks 0.78 0.78 0.00
month-end, please call 800-474-2737 or visit www.ishares.com. T 2 mil Cognex Corp 0.70
Bonds 0.00 0.00 0.00
Fees and Expenses Other/Not Clsfd 0.00 0.00 0.00 T 1 mil Teleflex Inc 0.69
Fund Expenses T 2 mil MSCI Inc 0.66
Total 100.00 100.00 0.00
Management Fees % 0.07 T 85,057 NVR Inc 0.66
Avg Index Cat T 1 mil SVB Financial Group 0.66
Value Blend Growth
Annual Report Gross Expense Ratio % 0.07 P/E Ratio TTM 24.0 1.06 1.06 T 1 mil Huntington Ingalls Industries Inc 0.61
Large
12b1 Expense % NA P/C Ratio TTM 12.1 0.85 1.01 T 6 mil Trimble Inc 0.61
P/B Ratio TTM 2.4 0.75 5.94 T 3 mil Broadridge Financial Solutions Inc 0.60
Mid

3 Yr 5 Yr 10 Yr Geo Avg Mkt Cap 5281 0.06 0.69 T 2 mil IDEX Corp 0.57
Small

5Q 4Q 4Q T 5 mil The Chemours Co 0.56
Morningstar Risk Avg Avg Avg
Fixed-Income Style T 2 mil Reinsurance Group of America Inc 0.56
Morningstar Return High +Avg High
Ltd Mod Ext
T 2 mil Ingredion Inc 0.56
T 3 mil Atmos Energy Corp 0.55
High

T 919,915 IPG Photonics Corp 0.52
Med

Low

AA —
A —
Alpha 0.86 — BBB —
Beta 0.96 —
R-Squared 76.78 —
NR —
Primary Prospectus Benchmark S&P MidCap 400 TR Greater Asia 0.0 0.00
f Utilities 5.0 1.59
Operations
Family: iShares Ticker: IJH Prem/Discount: 0.01
ß
and sales charges.


and
“N”):

iShares Core S&P Mid-Cap ETF-NAV — — 17.45 14.34 8.91 9.48 05-22-2000 NA NA 0.07 0.07 NA
iShares Core S&P Mid-Cap ETF-Market — — 17.38 14.36 8.89 9.48 05-22-2000 NA NA 0.07 0.07 NA
MSCI EAFE NR USD 19.10 8.38 1.34 — —
Russell Mid Cap TR USD 15.32 14.26 8.08 — —
S&P 500 TR USD 18.61 14.22 7.44 — —
ß

iShares Core S&P Mid-Cap ETF-NAV 16.83 13.82 8.52 9.09 05-22-2000 9.99 11.35 7.17 7.95
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
ß
more than 6 years.
ß

Share Change
Sharpe Ratio
Standard Deviation
ß
losses are theoretically unlimited. The broker may demand more collateral and Russell Mid Cap TR USD
a manager might have to close out a short position at an inopportune time to Measures the performance of the 800 smallest companies in the Russell 1000
limit further losses. Index, which represent approximately 25% of the total market capitalization of
the Russell 1000 Index. The constituents displayed for this index are from the
Long-Short: Due to the strategies used by long-short funds, which may include following proxy: iShares Russell Mid-Cap ETF.
but are not limited to leverage, short selling, short-term trading, and investing
in derivatives, these funds may have greater risk, volatility, and expenses than S&P 500 TR USD
those focusing on traditional investment strategies. A market capitalization-weighted index composed of the 500 most widely held
ß

Journal.
ß
iShares Russell 2000 ETF (USD) QQQ S&P 500 TR USD
Category Index
Russell 2000 TR
Morningstar Cat
US Fund Small Blend
627 US Fund Small Blend USD
Equity
2015 4.33 0.43 -11.91 3.65 -4.33 100k
2016 -1.49 3.81 9.04 8.84 21.36 60k
2017 2.48 2.46 5.68 — 15.11 iShares Russell 2000 ETF
40k 27,039
Category Average
Std Mkt 09-30-17 20.96 — 13.86 7.91 8.20 20k 24,127
27,307
Mkt Total Ret 18.37 11.20 15.07 8.78 8.34 10k
NAV Total Ret 18.31 11.19 15.06 8.78 8.37
+/- Std Index -4.56 0.28 -0.69 0.48 — 4k
+/- Cat Index -0.03 0.05 0.04 0.04 — Performance Quartile
& * * ( * ( * * * * * _ (within category)
% Rank Cat 27 29 33 38
No. in Cat 760 627 535 382 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 11-17 History
18.27 -1.76 -34.15 28.51 26.93 -4.44 16.69 38.69 5.03 -4.47 21.60 15.05 Mkt Total Ret %
18.17 -1.47 -33.64 27.13 26.76 -4.19 16.39 38.85 4.94 -4.33 21.36 15.11 NAV Total Ret %
2.38 -6.97 3.36 0.67 11.70 -6.30 0.39 6.46 -8.74 -5.71 9.40 -5.38 +/- Standard Index
-0.20 0.09 0.15 -0.04 -0.09 -0.02 0.04 0.03 0.05 0.08 0.05 0.00 +/- Category Index
The performance data quoted represents past performance and -0.08 -0.12 -0.08 -0.06 -0.08 -0.04 -0.05 -0.08 -0.02 -0.05 -0.02 — Avg Prem/Discount %
their original cost. since Amount 1,979 Total Stocks , 0 Total Fixed-Income, %
US Stocks 98.63 98.63 0.00
quoted herein. For performance data current to the most recent Y 955,781 bluebird bio Inc 0.37
Non-US Stocks 1.03 1.03 0.00
month-end, please call 800-474-2737 or visit www.ishares.com. Y 2 mil Exact Sciences Corp 0.34
Bonds 0.00 0.00 0.00
Fees and Expenses Other/Not Clsfd 0.02 0.02 0.00 Y 3 mil Nektar Therapeutics Inc 0.33
Fund Expenses Y 1 mil MKS Instruments Inc 0.28
Total 100.00 100.00 0.00
Management Fees % 0.20 Y 2 mil GrubHub Inc 0.27
Avg Index Cat Y 8 mil MGIC Investment Corp 0.26
Value Blend Growth
Annual Report Gross Expense Ratio % 0.20 P/E Ratio TTM 22.9 1.01 1.09 Y 923,023 Curtiss-Wright Corp 0.26
Large
12b1 Expense % NA P/C Ratio TTM 11.5 0.81 0.89 Y 1 mil EPAM Systems Inc 0.25
P/B Ratio TTM 2.3 0.72 5.72 Y 4 mil Sterling Bancorp 0.25
Mid

3 Yr 5 Yr 10 Yr Geo Avg Mkt Cap 1891 0.02 0.60 Y 2 mil Aspen Technology Inc 0.25
Small

4Q 3Q 3Q Y 1 mil Idacorp Inc 0.24
Morningstar Risk +Avg +Avg Avg
Fixed-Income Style Y 833,926 Monolithic Power Systems Inc 0.24
Morningstar Return +Avg Avg Avg
Ltd Mod Ext
Y 1 mil Blackbaud Inc 0.24
Y 3 mil Knight-Swift Transportation Holdin 0.24
High

Y 3 mil Catalent Inc 0.24
Med

Low

AA —
A —
Alpha -0.29 — BBB —
Beta 1.10 —
R-Squared 61.26 —
NR —
Primary Prospectus Benchmark Russell 2000 TR Greater Asia 0.1 0.19
USD f Utilities 3.7 1.18
Operations
Family: iShares Ticker: IWM Prem/Discount: 0.02
ß
and sales charges.


and
“N”):

iShares Russell 2000 ETF-NAV — — 20.77 13.84 7.89 8.23 05-22-2000 NA NA 0.20 0.20 NA
iShares Russell 2000 ETF-Market — — 20.96 13.86 7.91 8.20 05-22-2000 NA NA 0.20 0.20 NA
MSCI EAFE NR USD 19.10 8.38 1.34 — —
Russell 2000 TR USD 20.74 13.79 7.85 — —
S&P 500 TR USD 18.61 14.22 7.44 — —
ß

iShares Russell 2000 ETF-NAV 20.10 13.28 7.45 7.80 05-22-2000 11.78 10.88 6.23 6.75
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
ß
more than 6 years.
ß

Share Change
Sharpe Ratio
Standard Deviation
ß
losses are theoretically unlimited. The broker may demand more collateral and Russell 2000 TR USD
a manager might have to close out a short position at an inopportune time to Consists of the 2000 smallest companies in the Russell 3000 Index. The
limit further losses. constituents displayed for this index are from the following proxy: iShares
Russell 2000 ETF.
Long-Short: Due to the strategies used by long-short funds, which may include
but are not limited to leverage, short selling, short-term trading, and investing S&P 500 TR USD
in derivatives, these funds may have greater risk, volatility, and expenses than A market capitalization-weighted index composed of the 500 most widely held
those focusing on traditional investment strategies. stocks whose assets and/or revenues are based in the US; it's often used as a
ß

Journal.
ß
PowerShares QQQ ETF (USD) QQQQQ S&P 500 TR USD
Category Index
Russell 1000
Morningstar Cat
US Fund Large Growth
1,194 US Fund Large Growth Growth TR USD
Equity
2015 2.57 1.69 -4.66 10.15 9.54 100k
2016 -2.12 -1.19 10.63 0.02 7.01 60k
2017 12.03 4.13 6.11 — 32.05 PowerShares QQQ ETF
40k 42,339
Category Average
Std Mkt 09-30-17 23.75 — 17.65 12.00 6.44 20k 25,074
27,307
Mkt Total Ret 33.38 14.76 20.17 12.75 6.75 10k
NAV Total Ret 33.52 14.78 20.16 12.74 6.76
+/- Std Index 10.65 3.87 4.42 4.44 — 4k
( & ( & & & & & & & & _ (within category)
% Rank Cat 15 3 1 1
No. in Cat 1,334 1,194 1,080 765 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 11-17 History
7.14 19.02 -41.73 54.70 19.91 3.38 18.12 36.63 19.18 9.45 7.10 31.88 Mkt Total Ret %
7.02 19.07 -41.68 54.45 19.89 3.44 18.09 36.60 19.12 9.54 7.01 32.05 NAV Total Ret %
-8.78 13.58 -4.68 27.99 4.83 1.33 2.09 4.22 5.43 8.16 -4.95 11.56 +/- Standard Index
-2.06 7.26 -3.24 17.25 3.18 0.80 2.84 3.12 6.07 3.87 -0.07 2.84 +/- Category Index
The performance data quoted represents past performance and -0.05 -0.02 -0.11 -0.01 0.00 0.03 0.00 0.03 0.02 0.01 -0.01 — Avg Prem/Discount %
US Stocks 95.12 95.12 0.00
quoted herein. For performance data current to the most recent Y 42 mil Apple Inc 12.14
Non-US Stocks 4.74 4.74 0.00
month-end, please call 800-983-0903 or visit Y 62 mil Microsoft Corp 8.79
www.invescopowershares.com.
Bonds 0.00 0.00 0.00
Other/Not Clsfd 0.00 0.00 0.00 Y 4 mil Amazon.com Inc 7.48
Fees and Expenses Y 19 mil Facebook Inc A 5.86
Total 100.00 100.00 0.00
Fund Expenses Y 3 mil Alphabet Inc C 4.90
Management Fees % 0.06 Equity Style Portfolio Statistics Port Rel Rel
Avg Index Cat Y 2 mil Alphabet Inc A 4.26
Annual Report Net Expense Ratio % 0.20 Value Blend Growth
P/E Ratio TTM 25.3 1.11 0.91 Y 38 mil Intel Corp 2.90
Large
Annual Report Gross Expense Ratio % 0.20 P/C Ratio TTM 15.9 1.12 0.93 Y 41 mil Cisco Systems Inc 2.52
12b1 Expense % NA P/B Ratio TTM 5.1 1.64 26.63 Y 38 mil Comcast Corp Class A 2.33
Mid
Risk and Return Profile Geo Avg Mkt Cap 163572 1.72 1.33 Y 5 mil NVIDIA Corp 1.78
Small
$mil
3 Yr 5 Yr 10 Yr
1194 funds 1080 funds 765 funds Y 6 mil Amgen Inc 1.70
5Q 5Q 5Q Fixed-Income Style Y 3 mil Broadcom Ltd 1.55
Morningstar Risk High +Avg High Ltd Mod Ext
Y 12 mil Qualcomm Inc 1.36
Y 10 mil The Kraft Heinz Co 1.35
High
Morningstar Return High High High Avg Wtd Coupon —

Y 8 mil Texas Instruments Inc 1.35
Med
3 Yr 5 Yr 10 Yr Avg Wtd Price —

Standard Deviation NAV 13.58 12.00 17.88
Low

h Cyclical 17.9 0.55
Mean NAV 14.78 20.16 12.74 Credit Quality Breakdown — Bond %
Mean MKT 14.76 20.17 12.75 AAA — t Consumer Cyclical 16.7 1.51
Sharpe Ratio 1.06 1.58 0.74 AA —
y Financial Services 1.2 0.07
A —
MPT Statistics Standard Index Best Fit Index u Real Estate 0.0 0.00
NAV BBB —
Alpha 1.92 — BB — j Sensitive 66.9 1.61
Beta 1.19 — B — i Communication Services 5.0 1.38
R-Squared 77.39 — Below B — o Energy 0.0 0.00
NR — p Industrials 3.6 0.34
12-Month Yield —
a Technology 58.2 2.72
Leveraged No k Defensive 15.2 0.59
Americas 95.5 0.96
Leverage Type — s Consumer Defensive 5.2 0.64
Greater Europe 0.8 2.26
Leverage % 100.00 d Healthcare 10.0 0.70
Greater Asia 3.7 6.78
Primary Prospectus Benchmark NASDAQ 100 TR f Utilities 0.0 0.00
USD
Operations
Family: PowerShares Ticker: QQQ Prem/Discount: -0.05
Manager: Management Team Incept: 03-10-1999 Mkt Price: 155.15
Total Assets: $58,026.4 mil Exchange: NASDAQ Legal Structure: Unit Investment Trust
Shares Outstanding: 375.45 mil NAV: 155.23 Backing Bank: Invesco PowerShares Capital Mgmt LLC
ß
and sales charges.


and
“N”):

PowerShares QQQ ETF-NAV — — 23.81 17.65 12.01 6.46 03-10-1999 NA NA 0.20 0.20 NA
PowerShares QQQ ETF-Market — — 23.75 17.65 12.00 6.44 03-10-1999 NA NA 0.20 0.20 NA
MSCI EAFE NR USD 19.10 8.38 1.34 — —
Russell 1000 Growth TR USD 21.94 15.26 9.08 — —
S&P 500 TR USD 18.61 14.22 7.44 — —
ß

PowerShares QQQ ETF-NAV 23.34 17.14 11.64 6.23 03-10-1999 13.52 14.08 9.83 5.29
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
ß
more than 6 years.
ß

Share Change
Sharpe Ratio
Standard Deviation
ß
losses are theoretically unlimited. The broker may demand more collateral and Russell 1000 Growth TR USD
a manager might have to close out a short position at an inopportune time to Tracks the companies within the Russell 1000 with higher price-to-book ratios
limit further losses. and higher forecasted growth values. The constituents displayed for this index
are from the following proxy: iShares Russell 1000 Growth ETF.
Long-Short: Due to the strategies used by long-short funds, which may include
but are not limited to leverage, short selling, short-term trading, and investing S&P 500 TR USD
in derivatives, these funds may have greater risk, volatility, and expenses than A market capitalization-weighted index composed of the 500 most widely held
those focusing on traditional investment strategies. stocks whose assets and/or revenues are based in the US; it's often used as a
ß

Journal.
ß
Vanguard FTSE Developed Markets ETF QQQQ MSCI ACWI Ex
Category Index
MSCI ACWI Ex
Morningstar Cat
US Fund Foreign Large
(USD) 575 US Fund Foreign Large
Blend
USA NR USD USA NR USD Blend

Equity
2015 5.54 1.03 -9.94 3.92 -0.21 100k
2016 -1.99 -0.24 6.38 -1.44 2.51 60k
2017 7.81 6.39 5.55 — 23.24 Vanguard FTSE Developed
40k Markets ETF
17,277
Std NAV 09-30-17 19.32 — 8.92 1.70 1.68 15,895
Standard Index
Mkt Total Ret — — — — — 10k
17,200
NAV Total Ret 24.36 6.68 9.08 1.44 1.84
+/- Std Index 0.72 0.97 1.79 0.52 — 4k
_ _ & ( ( * * & ( * * _ (within category)
% Rank Cat — — — —
No. in Cat — — — — 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 10-17 History
— — -40.65 27.49 8.35 -12.30 18.56 21.83 -5.98 -0.38 2.67 — Mkt Total Ret %
— — -41.25 28.34 8.47 -12.57 18.60 22.12 -5.71 -0.21 2.51 23.24 NAV Total Ret %
— — 4.28 -13.11 -2.68 1.14 1.77 6.83 -1.84 5.45 -1.99 -0.17 +/- Standard Index
— — 4.28 -13.11 -2.68 1.14 1.77 6.83 -1.84 5.45 -1.99 -0.17 +/- Category Index
derived from a weighted average of the three-, five-, and 10-year — — 20 63 67 32 41 23 56 36 28 — % Rank Cat
(if applicable) Morningstar metrics. — — 778 823 829 817 786 791 750 788 762 — No. of Funds in Cat
The performance data quoted represents past performance and — 0.28 0.52 0.17 0.02 0.27 0.21 0.10 0.06 0.06 0.07 — Avg Prem/Discount %
US Stocks 1.08 1.08 0.00
quoted herein. For performance data current to the most recent T 16 mil Nestle SA 1.34
Non-US Stocks 95.47 95.47 0.00
month-end, please call 866-499-8473 or visit www.vanguard.com. T 12 mil Novartis AG 1.03
Bonds 0.04 0.04 0.00
Fees and Expenses Other/Not Clsfd 1.23 1.23 0.00 T 102 mil HSBC Holdings PLC 1.02
Fund Expenses T 448,876 Samsung Electronics Co Ltd 1.02
Total 100.00 100.00 0.00
Management Fees % 0.05 T 4 mil Roche Holding AG Dividend Right Ce 0.91
Avg Index Cat T 13 mil Toyota Motor Corp 0.80
Value Blend Growth
Annual Report Gross Expense Ratio % 0.07 P/E Ratio TTM 17.1 1.02 0.94 T 11 mil British American Tobacco PLC 0.71
Large
12b1 Expense % NA P/C Ratio TTM 8.4 0.98 0.87 T 23 mil Royal Dutch Shell PLC Class A 0.69
P/B Ratio TTM 1.7 0.97 3.06 T 98 mil BP PLC 0.63
Mid

3 Yr 5 Yr 10 Yr Geo Avg Mkt Cap 24024 0.70 0.57 T 11 mil Total SA 0.61
Small

4Q 4Q 4Q T 19 mil Royal Dutch Shell PLC B 0.59
Morningstar Risk Avg Avg Avg
Fixed-Income Style T 4 mil Bayer AG 0.58
Morningstar Return +Avg +Avg +Avg
Ltd Mod Ext
Y 7 mil Royal Bank of Canada 0.58
T 81 mil Banco Santander SA 0.57
High

T 6 mil Sanofi SA 0.56
Med
Standard Deviation NAV 11.45 11.33 18.89 Avg Wtd Price 99.68
Low

Mean MKT — — — Credit Quality Breakdown — Bond %
AA —
A —
NAV MSCI EAFE NR USD u Real Estate 3.9 1.11
Alpha 1.46 1.15 BBB —
Beta 0.91 0.92
R-Squared 95.57 96.75
NR —
Primary Prospectus Benchmark FTSE Dvlp ex US All Greater Asia 35.7 0.84
Cap(US RIC)NR USD f Utilities 3.0 0.96
Operations
Family: Vanguard Ticker: VEA Prem/Discount: —
Shares Outstanding: 1,488.96 mil NAV: 44.12 Backing Bank: Vanguard Group Inc
ß
and sales charges.


and
“N”):

Vanguard FTSE Developed Markets ETF- — — 19.32 8.92 1.70 1.68 07-20-2007 NA NA 0.07 0.07 NA
NAV
Vanguard FTSE Developed Markets ETF- — — 19.31 8.96 1.68 1.63 07-20-2007 NA NA 0.07 0.07 NA
Market
MSCI ACWI Ex USA NR USD 19.61 6.97 1.28 — —
MSCI EAFE NR USD 19.10 8.38 1.34 — —
ß

S&P 500 TR USD 18.61 14.22 7.44 — —

Vanguard FTSE Developed Markets ETF-NAV 18.41 7.92 0.87 0.86 07-20-2007 11.36 6.70 1.08 1.07
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
ß
more than 6 years.
ß

Share Change
Sharpe Ratio
Standard Deviation
ß
repayment of notes is subject to the issuer's ability to repay its obligations. MSCI ACWI Ex USA NR USD
ETNs do not typically pay interest. The MSCI AC World ex USA is a free float-adjusted market capitalization index
that is designed to measure equity market performance in the global developed
Leveraged ETFs: Leveraged investments are designed to meet multiples of the and emerging markets. The index consists of 48 developed and emerging
return performance of the index they track and seek to meet their fund market country indices. The returns we publish for the index are total returns,
objectives on a daily basis (or other time period stated within the prospectus which include reinvestment of dividends. The constituents displayed for this
objective). The leverage/gearing ratio is the amount of excess return that a index are from the following proxy: iShares MSCI ACWI ETF.
performance (i.e. 200%, 300%, -200%, or -300% or 2X, 3X, -2X, -3X). MSCI EAFE NR USD
Compounding has the ability to affect the performance of the fund to be either This Europe, Australasia, and Far East index is a market-capitalization-weighted
greater or less than the index performance multiplied by the multiple stated index of 21 non-U.S., industrialized country indexes.
This disclosure applies to all MSCI indices: Certain information included herein
Short Positions: When a short position moves in an unfavorable way, the is derived by Morningstar in part from MSCI’s Index Constituents (the “Index
losses are theoretically unlimited. The broker may demand more collateral and Data”). However, MSCI has not reviewed any information contained herein and
a manager might have to close out a short position at an inopportune time to does not endorse or express any opinion such information or analysis. MSCI
limit further losses. does not make any express or implied warranties, representations or
Long-Short: Due to the strategies used by long-short funds, which may include therefrom, and in no event will MSCI have any liability for any direct, indirect,
ß

S&P 500 TR USD


Journal.
ß
Due Diligence Report
Vanguard Developed Markets Index Fund

Vanguard FTSE Developed Markets ETF
October 2015
FOR INSTITUTIONAL USE ONLY – Not for use with or distribution to the general public
Due Diligence
Vanguard Developed Markets ETF
October 2015
Recommendation
Sterling Capital’s Advisory Solutions team is recommending the addition of the Vanguard Developed Markets Index Fund
(VTMGX) and the Vanguard Developed Markets ETF (VEA) to the approved investment manager platform. These passively-
managed international developed market strategies, which will follow FTSE Developed All Cap ex US Index after a short
transition period (see report for further details), will be utilized as the recently-added passively-managed international
developed market large cap allocation within the Advisory Solutions Models. The mutual fund will be used as the preferred
vehicle in the Models for operational reasons (trade settlement will be aligned with the actively-managed international
developed market mutual funds in the Models). However, the ETF is available for accounts that prefer a vehicle with intra-day
liquidity, or for larger accounts that have chosen to use the ADR model-based separate account versions of the actively
managed international developed market strategies (aligns trade settlement timeframe).
Key Considerations
 The expense ratio for both vehicles is just 9 basis points, which compares favorably to the 33 basis point
expense ratio for iShares MSCI EAFE ETF (EFA).
 Both vehicles are tax efficient as no realized capital gains have been distributed since at least 2010.
 Although both vehicles will soon track an all cap benchmark (benchmark transition is highlighted later in the
report), exposure to mid and small cap securities will be similar to many actively- managed international
developed market large cap strategies, and improves the odds of achieving some degree of outperformance vs.
large cap benchmark given the attractive long-term risk/reward profile of international developed market
small cap equities.
Strategy Facts
Inception Date: 8/17/1999 (VTMGX); 7/21/2007 (VEA)
Average # of Positions: Approximately 3,700 (after transition)
Beta (FTSE Developed All Cap ex US Index)*: Approximately 1.00
Tracking Error** 2.77%
Average Turnover: 5%
Strategy Assets Under Management:*** $50 billion
Firm Assets Under Management:*** $3 trillion
% of Positive Rolling 3 Year Alpha Periods N/A
% of Rolling 3 Year Alpha Periods > Peer Group Median N/A
% of Positive Rolling 5 Year Alpha Periods N/A
% of Rolling 5 Year Alpha Periods > Peer Group Median N/A
*Estimated beta vs. FTSE Developed All Cap ex US Index when transition is complete; see report for complete details
**Tracking error for VEA vs. blended benchmark since inception
***As of 8/31/2015
Firm Overview
Vanguard is one of the world's largest investment companies, offering a large selection of low-cost mutual funds,
ETFs, advice, and related services. The firm was founded on May 1, 1975 in Valley Forge, PA, and is owned by its
clients. The company has been long-time proponent of the benefits of low cost investing, and the firm’s average
expense ratio is significantly below the industry average. As of December 31, 2014, Vanguard managed roughly
280 low-cost traditional mutual funds and ETFS, including around 160 U.S. funds (including variable annuity
portfolios) and about 120 additional funds in markets outside the United States.
FOR INSTITUTIONAL USE ONLY – Not for use with or distribution to the general public 2
Due Diligence
October 2015
Strategy Overview
Investment Team
Vanguard’s Equity Investment Group oversees the management of all passively-managed equity strategies at the
firm, and is responsible for trade-execution and risk-management. Christine Franquin has been the designated
portfolio manager for the strategy since February 2013. Franquin joined Vanguard in 2000, and has been a portfolio
manager since 2004. She has managed multiple index strategies assuming a portfolio management role in 2004
(Vanguard moves portfolio managers to different index strategies over time to help enrich their development and
allow them to better assist other portfolio managers in the management of other index strategies.). Franquin is also
directly responsible for the management of other equity index strategies at Vanguard. She received her B.A. from
Universitaire Faculteiten Sint Ignatius Antwerpen Belgium and a Master Degree in Finance from Clark University
in Massachusetts.
Investment Process
The fund attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that
make up the index, holding each stock in approximately the same proportion as its weighting in the index.
Portfolio
The fund began to track the FTSE Developed ex North America Index at the end of May 2013. Prior to this date, the
fund tracked the MSCI EAFE Index (benchmark change was made to reduce cost). In June 2015, Vanguard
announced that the fund will track the FTSE Developed All Cap ex US Index after a six month transition period
that will begin in the fourth quarter of 2015. In contrast to the FTSE Developed ex North America Index, the FTSE
Developed All Cap ex US Index contains Canadian and small-cap companies. This change will result in
approximately 2,247 small-cap and 233 Canadian stocks being added to the strategy.
The FTSE Developed All Cap ex US Index is a float-adjusted market-cap weighted index that provides exposure to
approximately 3,700 large, mid, and small-cap stocks based in 24 developed market countries across Europe,
Australia, Canada and Asia (including South Korea). FTSE ranks all stocks in each region by free-float market cap
and excludes those representing the smallest 2% of each market. The index then targets stocks representing the
largest 86% of the remaining universe by market cap. In order to reduce turnover, constituents may remain in the
index as long as they remain in the largest 92% of the investable market. FTSE reviews the index's constituents
semiannually in September and March.
The transition is set to begin in 4Q2015, and will be completed approximately six months after commencement.
Vanguard is not announcing the exact transition time period to ensure that front running does not take place.
Throughout the transition period, the fund will track a transition index that will be updated monthly. The
transition index will sell large and mid-cap stocks on a monthly basis while proportionally adding Canadian and
small cap stocks based on each security’s weight in the index. The utilization of a transition index will help to
minimize transaction costs, minimize tracking error, and provide transparency for shareholders. The transition is
not expected to generate capital gains in the mutual fund as accumulated losses are expected to offset any realized
gains. The transition is expected to temporarily increase transaction costs and turnover in the strategy. However,
index license fees will remain the same and the expense ratio for both vehicles will remain constant.
Due Diligence
October 2015
Source: FTSE data as of 7/31/2015
Due Diligence
October 2015
The inclusion of Canadian and small cap equities actually makes the strategy more representative of the investment
opportunity set for many active international developed market large cap managers, including the managers on the
Advisory Solutions approved investment manager platform. These approved managers include Canada in their
opportunity set, and will occasionally have limited exposure to mid and small cap securities. The inclusion of
South Korea in the benchmark (which is contrast to MSCI and Russell) further aligns the opportunity set with both
international developed market strategies that are currently included in the Advisory Solutions Models. The
Causeway International Value strategy considers South Korea to be a developed market, and the Harding Loevener
International strategy is able to invest in South Korean companies given the strategy’s flexibility to have some
degree of direct exposure to emerging markets.
Although average daily trading volume for the Vanguard Developed Markets ETF (VEA) is lower than the iShares
MSCI EAFE ETF (EFA), liquidity is not a concern. Income is distributed quarterly for the mutual fund and ETF.
Performance
An historical analysis of relative performance is somewhat difficult given the benchmark transitions that have
occurred in recent years. In addition, Vanguard Developed Markets Index Fund was merged into Vanguard Tax-
Managed International Fund April 4, 2014, and performance prior to April 4, 2014 is that of the former Vanguard
Tax-Managed International Fund. Despite some degree of ambiguity as a result of previous and ongoing
benchmark transitions, it’s important to point out that Vanguard is an undisputed leader in the passively managed
equity strategy segment of the market, and has an extensive track record of achieving low tracking error,
benchmark-like returns across multiple passively-managed vehicles.
The ETF, which was launched in July 2007, is a better proxy for relative performance and has generated a fairly low
tracking error vs. its respective benchmark over time relative other international equity ETFs. In addition, the
inception date for the FTSE Developed All Cap ex US Index is 12/31/2012. The index’s relatively short history also
makes long-term correlation analysis vs. other international developed market large cap benchmarks somewhat
difficult. However, correlation vs. other international developed market large cap benchmarks has been extremely
high since inception and it’s reasonable to expect this to continue given the similarities in index constituents and
construction methodology.
Correlation Matrix
Time Range: 1/2013 - 8/2015
1 2 3
1 FTSE Developed All Cap ex US NR USD
2 Russell Developed xUS LC NR USD 1.00
3 MSCI EAFE NR USD 0.99 1.00
4 FTSE Developed ex North America NR USD 1.00 1.00 1.00
Prepared by:
Brandon W. Carl, CFA
Investment Analyst
(919) 716-6190
bcarl@sterling-capital.com
Due Diligence
October 2015
Investment advisory services are available through Sterling Capital Management LLC, a separate subsidiary of BB&T Corporation. Sterling
Capital Management LLC manages customized investment portfolios, provides asset allocation analysis and offers other investment-related
services to affluent individuals and businesses. Securities and other investments held in investment management or investment advisory
accounts at Sterling Capital Management LLC are not deposits or other obligations of BB&T Corporation, Branch Banking and Trust
Company or any affiliate, are not guaranteed by Branch Banking and Trust Company or any other bank, are not insured by the FDIC or any
other government agency, and are subject to investment risk, including possible loss of principal invested.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial trends, which
are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness.
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described
may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and
should not be relied upon for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns
a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or
interpreted as a recommendation.
Vanguard FTSE Emerging Markets ETF QQQ MSCI ACWI Ex
Category Index
MSCI EM NR USD
Morningstar Cat
US Fund Diversified
(USD) 637 US Fund Diversified
Emerging Mkts
USA NR USD Emerging Mkts

Equity
2015 2.08 1.73 -18.21 -0.33 -15.35 100k
2016 5.36 2.33 7.80 -3.84 11.75 60k
2017 10.87 3.47 7.76 — 26.69 Vanguard FTSE Emerging
40k Markets ETF
19,751
Std NAV 09-30-17 18.86 — 3.61 0.97 7.01 18,556
Standard Index
Mkt Total Ret 21.16 4.25 4.36 0.02 7.26 10k
17,200
NAV Total Ret 20.98 4.10 4.21 0.05 7.17
+/- Std Index -2.66 -1.61 -3.08 -0.87 — 4k
+/- Cat Index -5.47 -1.60 -0.63 -0.55 — Performance Quartile
( * * * * * * ) & ( * _ (within category)
% Rank Cat 65 61 63 61
No. in Cat 794 637 452 187 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 10-17 History
29.36 37.26 -52.49 76.28 19.46 -18.75 19.20 -4.92 -0.07 -15.81 12.21 27.22 Mkt Total Ret %
29.53 39.05 -52.77 76.28 18.99 -18.68 18.84 -5.00 0.60 -15.35 11.75 26.69 NAV Total Ret %
2.88 22.40 -7.25 34.83 7.84 -4.97 2.01 -20.29 4.46 -9.69 7.26 3.28 +/- Standard Index
-2.61 -0.37 0.56 -2.23 0.12 -0.25 0.62 -2.40 2.79 -0.43 0.57 -5.57 +/- Category Index
The performance data quoted represents past performance and 0.54 0.31 0.58 0.39 0.11 0.07 0.01 -0.30 -0.12 -0.14 0.26 — Avg Prem/Discount %
US Stocks 0.43 0.43 0.00
quoted herein. For performance data current to the most recent Y 91 mil Tencent Holdings Ltd 4.58
Non-US Stocks 95.36 95.36 0.00
month-end, please call 800-662-7447 or visit www.vanguard.com. Y 236 mil Taiwan Semiconductor Manufacturing 1.96
Bonds 0.16 0.16 0.00
Fees and Expenses Other/Not Clsfd 1.75 1.75 0.00 Y 7 mil Naspers Ltd Class N 1.80
Fund Expenses Y 34 mil Taiwan Semiconductor Manufacturing 1.48
Total 100.00 100.00 0.00
Management Fees % 0.07 Y 1,522 mil China Construction Bank Corp H 1.47
Avg Index Cat T 1,355 mil Industrial And Commercial Bank Of 1.17
Value Blend Growth
Annual Report Gross Expense Ratio % 0.14 P/E Ratio TTM 15.1 0.89 0.97 Y 89 mil China Mobile Ltd 1.05
Large
12b1 Expense % NA P/C Ratio TTM 8.7 0.98 0.86 Y 253 mil Hon Hai Precision Industry Co Ltd 1.01
P/B Ratio TTM 1.8 1.02 3.86 R 4 mil Alibaba Group Holding Ltd ADR 0.88
Mid

3 Yr 5 Yr 10 Yr Geo Avg Mkt Cap 16749 0.47 0.57 Y 27 mil Housing Development Finance Corp L 0.83
Small

3Q 3Q 3Q T 90 mil Ping An Insurance (Group) Co. of C 0.80
Morningstar Risk Avg +Avg Avg
Fixed-Income Style T 1,318 mil Bank Of China Ltd H 0.76
Morningstar Return Avg Avg Avg
Ltd Mod Ext
Y 55 mil Reliance Industries Ltd 0.76
Avg Eff Duration — 181 mil Sberbank of Russia PJSC 0.70
High

T 32 mil Infosys Ltd 0.52
Med

Low

AA —
Morningstar EM GR A —
USD BBB —
Alpha -1.53 -1.80 BB — j Sensitive 39.4 1.15
Beta 1.07 0.99 B — i Communication Services 5.4 1.23
R-Squared 72.41 98.25 Below B — o Energy 6.8 1.02
12-Month Yield — NR — p Industrials 6.7 0.60
Regional Exposure Stocks % Rel Std Index
Leveraged No k Defensive 13.8 0.69
Americas 14.5 1.42
Leverage Type — s Consumer Defensive 7.2 0.74
Greater Europe 15.4 0.33
Leverage % 100.00 d Healthcare 3.1 0.42
Greater Asia 70.1 1.64
Primary Prospectus Benchmark FTSE EMs AC China f Utilities 3.5 1.14
A Incl (US RIC) NR
USD
Operations
Family: Vanguard Ticker: VWO Prem/Discount: 0.36
Shares Outstanding: 1,460.99 mil NAV: 44.47 Backing Bank: Vanguard Group Inc
ß
and sales charges.


and
“N”):

Vanguard FTSE Emerging Markets ETF-NAV — — 18.86 3.61 0.97 7.01 03-04-2005 NA NA 0.14 0.14 NA
Vanguard FTSE Emerging Markets ETF- — — 18.66 3.75 1.01 7.10 03-04-2005 NA NA 0.14 0.14 NA
Market
Morningstar EM GR USD 20.64 — — — —
MSCI ACWI Ex USA NR USD 19.61 6.97 1.28 — —
MSCI EAFE NR USD 19.10 8.38 1.34 — —
ß

MSCI EM NR USD 22.46 3.99 1.32 — —

S&P 500 TR USD 18.61 14.22 7.44 — —
Vanguard FTSE Emerging Markets ETF-NAV 17.91 2.57 0.10 6.21 03-04-2005 10.93 2.37 0.43 5.45
ß

same.
traded commodities.
stocks at any time.
three-year history.
loads.
ß
ß
ß
more than 6 years.
ß

Share Change
Sharpe Ratio
Standard Deviation
ß
repayment of notes is subject to the issuer's ability to repay its obligations. Morningstar EM GR USD
ETNs do not typically pay interest. Description unavailable.
Leveraged ETFs: Leveraged investments are designed to meet multiples of the MSCI ACWI Ex USA NR USD
return performance of the index they track and seek to meet their fund The MSCI AC World ex USA is a free float-adjusted market capitalization index
objectives on a daily basis (or other time period stated within the prospectus that is designed to measure equity market performance in the global developed
objective). The leverage/gearing ratio is the amount of excess return that a and emerging markets. The index consists of 48 developed and emerging
leveraged investment is designed to achieve in comparison to its index market country indices. The returns we publish for the index are total returns,
performance (i.e. 200%, 300%, -200%, or -300% or 2X, 3X, -2X, -3X). which include reinvestment of dividends. The constituents displayed for this
Compounding has the ability to affect the performance of the fund to be either index are from the following proxy: iShares MSCI ACWI ETF.
greater or less than the index performance multiplied by the multiple stated
MSCI EAFE NR USD
This Europe, Australasia, and Far East index is a market-capitalization-weighted
Short Positions: When a short position moves in an unfavorable way, the index of 21 non-U.S., industrialized country indexes.
losses are theoretically unlimited. The broker may demand more collateral and
a manager might have to close out a short position at an inopportune time to This disclosure applies to all MSCI indices: Certain information included herein
limit further losses. is derived by Morningstar in part from MSCI’s Index Constituents (the “Index
Data”). However, MSCI has not reviewed any information contained herein and
Long-Short: Due to the strategies used by long-short funds, which may include does not endorse or express any opinion such information or analysis. MSCI
ß

MSCI EM NR USD
Description unavailable. The constituents displayed for this index are from the
following proxy: iShares MSCI Emerging Markets ETF.
S&P 500 TR USD


Journal.
ß

Due Diligence Report
Vanguard FTSE Emerging Markets ETF (VWO)

Vanguard Emerging Markets Stock Index Fund (VEMAX)
August 2016
FOR INSTITUTIONAL USE ONLY – Not for use with or distribution to the general public
Due Diligence
Vanguard Emerging Markets
August 2016
Recommendation
Sterling Capital’s Advisory Solutions Team has added the Vanguard FTSE Emerging Markets ETF (VWO) and the
Vanguard Emerging Markets Stock Index Fund (VEMAX) to the approved investment manager platform. This
emerging markets equity strategy (subsequently referred to as ‘Vanguard EM’) provides low cost exposure to the
broad emerging markets equity universe.
Key Considerations
 The Vanguard EM strategy is designed to track the performance of the FTSE Emerging Markets All Cap
China A Transition Index, which includes common stocks of large-, mid-, and small-cap companies located
in emerging markets around the world.
 The expense ratio for both vehicles is low at just 0.15%.
Strategy Facts
Inception Date: 3/4/2005 (ETF), 11/13/2000 (mutual fund)
# of Positions: 4,076
Beta (vs. FTSE EM All Cap China A Transition Index)*: NA*
Tracking Error (vs. FTSE EM All Cap China A Transition Index)* NA*
Turnover: 7% (2015, prior NA – different benchmark)
Strategy Assets Under Management:** $54 billion
Firm Assets Under Management: $3.4 trillion (as of 3/31/2016)
% of Positive Rolling 3 Year Alpha Periods N/A***
% of Rolling 3 Year Alpha Periods > Peer Group Median N/A ***
% of Positive Rolling 5 Year Alpha Periods N/A ***
% of Rolling 5 Year Alpha Periods > Peer Group Median N/A ***
*Current benchmark/mandate has only been in place since 11/1/15 – not statistically significant to display. Note that Beta and R‐squared over the trailing 3
years versus a ‘spliced’ index (links FTSE EM through 10/31/15 with current benchmark 11/1/16 – present) is 0.99.
**As of 6/30/2016
***NA for passive investments

Firm Overview
Vanguard is one of the world's largest investment companies, offering a large selection of low-cost mutual funds,
ETFs, advice and related services. The firm was founded on May 1, 1975 in Valley Forge, P.A. and is owned by its
clients. The company has been a long-time proponent of the benefits of low-cost investing, and the firm’s average
expense ratio is significantly below the industry average. As of December 31, 2015, Vanguard managed roughly 175
U.S. funds (including variable annuity portfolios) and about 145 additional funds in markets outside the United
States.
Due Diligence
August 2016
Strategy Overview
Investment Team
Vanguard’s Equity Investment Group oversees the management of all passively-managed equity strategies at the
firm, and is responsible for trade execution and risk management. The designated portfolio managers for this
strategy are Michael Perre and Jeffrey D. Miller.
Michael Perre, Principal, has managed the strategy since 2008 (co-managed since 2016), and has investment
experience since 1990. He earned a B.A. from St. Joseph’s University and an M.B.A. from Villanova University.
Jeffrey D. Miller, Portfolio Manager, was added as a co-manager to the strategy within 2016. He has worked in the
investment industry since 2007. Mr. Miller earned a B.A. from Pennsylvania State University and an M.B.A. from
Drexel University.
Investment Process
The Vanguard EM strategy seeks to track the performance of the FTSE Emerging Markets All Cap China A
Transition Index. The Fund invests substantially all (normally around 95%) of its assets in the common stocks of the
index, while employing a form of sampling to reduce risk. Sampling is the holding of a broadly diversified
collection of securities that, in the aggregate, approximates the full index in terms of key characteristics. These key
characteristics include industry weightings and market capitalization, as well as certain financial measures, such as
price/earnings ratio and dividend yield.
The team uses proprietary software to implement trading decisions that accommodate cash flows and maintain
close correlation with index characteristics.
Portfolio
The strategy has utilized several benchmarks since inception. Indexes utilized through time are: Select Emerging
Markets Index (through 8/23/06), MSCI Emerging Markets Index (through 1/9/13), FTSE Emerging Transitional
Index (through 6/27/13), FTSE Emerging Markets Index (through 11/1/15), and FTSE Emerging Markets All Cap
China A Transition Index (current).
The FTSE Emerging Markets All Cap China A Transition Index is an interim index that will gradually increase
exposure to small-capitalization stocks and China A-shares while proportionally reducing exposure to other stocks
based on their weightings. The Index is a market capitalization weighted index that is made up of approximately
3,500 common stocks of large-, mid-, and small-cap companies located in emerging markets around the world. The
transition will be completed in September 2016.
Risks include country/regional risk, currency risk, and China A-shares risk. Country/regional risk is the chance
that world events – such as political upheaval, financial troubles, or natural disasters – will adversely affect the
value of securities held. Currency risk is the chance that the value of a foreign investment, measured in U.S. dollars,
will decrease because of unfavorable changes in currency exchange rates. China A-shares risk is the chance that the
Fund may not be able to access a sufficient amount of China A-shares to track its target index.
Due to the lack of historical track record for the current index (index performance start date was 2/27/15), a
comparison with the FTSE Emerging Index is also included. Note the FTSE EM Index does not include small-cap
stocks.
Due Diligence
August 2016
As of 6/30/2016 3 Month YTD 1 Year 2 Year 3 Ye ar 5 Ye ar 10 Ye ar 15 Ye ar
FTSE EM All Cap China A Transition Index 1.41 6.92 -12.85

FTSE Emerging Index 1.71 7.87 -12.18 -7.31 -0.77 -3.21 4.06 9.58
Vanguard FTSE EM ETF (VWO) 2.33 7.81 -12.12 -7.39 -0.75 -3.53 3.54
Vanguard EM Stock Index (VEMAX) 2.35 7.81 -12.12 -7.40 -0.75 -3.53 3.54 8.87
Ave rage Market Cap Marke t Cap Market Cap Market Cap Market Cap
Market Giant % Large % Mid % Small % Micro %
Cap (mil)
FTSE EM All Cap China A Transition Index 13,163.54 48.22 29.52 14.52 3.92 0.40
Vanguard FTSE EM ETF (VWO) 13,366.14 45.98 27.94 13.32 3.03 0.58
Vanguard EM Stock Index (VEMAX) 13,336.14 45.98 27.94 13.32 3.03 0.58
Source: Morningstar Direct. Index data is as of 6/30/2016. Vanguard T otal Stock Market data is as of 5/31/2016.
GICS GICS GICS GICS GICS

Energy % Materials % Industrials % Consumer Consumer
Discretionary Staples %
%
FTSE EM All Cap China A Transition Index 8.51 7.53 7.43 9.44 7.89
Vanguard FTSE EM ETF (VWO) 7.46 6.90 6.77 8.96 7.75

Vanguard EM Stock Index (VEMAX) 7.46 6.90 6.77 8.96 7.75
GICS GICS GICS GICS GICS

Healthcare Financials % Information Telecom Utilities %
% Technology Services %
%
FTSE EM All Cap China A Transition Index 3.14 28.65 15.50 6.56 3.73
Vanguard FTSE EM ETF (VWO) 2.96 25.94 15.49 6.45 3.55

Vanguard EM Stock Index (VEMAX) 2.96 25.94 15.49 6.45 3.55
Source: Morningst ar Direct . Data is as of 6/30/2016.

Prepared by:
Travis Pollack, CFA
(919) 716‐6287
tpollack@sterling‐capital.com
Due Diligence
August 2016
Investment advisory services are available through Sterling Capital Management LLC, a separate subsidiary of BB&T Corporation. Sterling Capital Management
LLC manages customized investment portfolios, provides asset allocation analysis and offers other investment‐related services to affluent individuals and
businesses. Securities and other investments held in investment management or investment advisory accounts at Sterling Capital Management LLC are not
deposits or other obligations of BB&T Corporation, Branch Banking and Trust Company or any affiliate, are not guaranteed by Branch Banking and Trust
Company or any other bank, are not insured by the FDIC or any other government agency, and are subject to investment risk, including possible loss of principal
invested.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial trends, which are based on
current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as
an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material
has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for, accounting, legal or tax advice. References
to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes
only and are not to be relied upon as advice or interpreted as a recommendation.

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Minimum Investment Criteria

x Firm Assets Under Management Equal to or greater than $500 million

As of 12/31/2016, Milliman FRM directly managed $10.7 billion in client assets.

x Strategy Assets Under Management Equal to or greater than $100 million

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 2

Investment Team Experience

Verifiable Performance Track Record

The fee to access these strategies is 20 bps.

Evidence of Potential Skill

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 3

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 4

Investment Process and Philosophy

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 5

s The strategies have more available asset classes for investing

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 6

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 7

Portfolio Composition and Characteristics

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 8

Growth Portfolio Moderate Portfolio

FOR USE WITH AE WEALTH MANAGEMENT INVESTMENT COMMITTEE ONLY 9

Performance 10-31-2017 7 7 7 7 7 7 7 8 7 7 7 7 Investment Style

Risk and Return Profile

24 funds 22 funds 16 funds $mil

3 Yr 5 Yr 10 Yr Avg Wtd Coupon 3.19

Sector Weightings Stocks % Rel Std Index

Standardized and Tax Adjusted Returns Disclosure Statement

Money Market Fund Disclosures

Institutional Money Market Funds (designated by an “S”):

Annualized returns 09-30-2017

Annualized returns 09-30-2017

USTREAS T-Bill Auction Ave 3 Mon 0.77 0.23 0.40 — —

Return after Tax (%) On Distribution On Distribution and Sales of Shares

An ETF is an investment company that typically has an investment objective of

Performance Quartile Total Return

S&P 500 TR USD

USTREAS T-Bill Auction Ave 3 Mon

12b1 Expense % NA P/C Ratio TTM — — — T 25 mil Welltower Inc 2.62

Risk and Return Profile

225 funds 198 funds 138 funds $mil

3 Yr 5 Yr 10 Yr Avg Wtd Coupon —

Standard Deviation NAV 13.47 13.76 25.04 Avg Wtd Price —

Sector Weightings Stocks % Rel Std Index

Standardized and Tax Adjusted Returns Disclosure Statement

Money Market Fund Disclosures

Institutional Money Market Funds (designated by an “S”):

Annualized returns 09-30-2017

Annualized returns 09-30-2017

USTREAS T-Bill Auction Ave 3 Mon 0.77 0.23 0.40 — —

Return after Tax (%) On Distribution On Distribution and Sales of Shares

An ETF is an investment company that typically has an investment objective of

Performance Quartile Total Return

the following proxy: iShares Core S&P 500 ETF.

S&P United States REIT TR USD

USTREAS T-Bill Auction Ave 3 Mon

10 US Fund Commodities Only Cmdty TR USD Precious Metals TR Precious Metals

Annual Report Gross Expense Ratio % 0.40 P/C Ratio TTM — — —

Morningstar Return — — — Avg Wtd Coupon — s Consumer Defensive — —

3 Yr 5 Yr 10 Yr Avg Wtd Price — d Healthcare — —

Standard Deviation MKT 15.50 16.05 19.09

Standardized and Tax Adjusted Returns Disclosure Statement

Money Market Fund Disclosures