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HomeMy WebLinkAboutAgenda - Pension Advisory Committee - 04/23/2024____________________________________________________________________________________ Pension Advisory Committee (PAC) Quarterly Meeting Tuesday, April 23, 2024 2:00 p.m. City Hall Conference Room 301, 180 Market Street Attend Virtually: https://meet.goto.com/SouthBurlingtonVT/pensionadvisorycommittee04-23-2024 You can also dial in using your phone (224) 501-3412 Access Code: 653-603-925 A G E N D A ______________________________________________________________________________ 1)Welcome & Introductions 2)Additions, deletions, or changes to agenda 3)*** Approve prior meeting minutes from January 16, 2024 4)*** SEI review of Q1 Net Performance Report-Dan Cappell •Discuss performance and status of asset allocation •Provide overview of the plan fee’s structure 5)Other business 6)Next scheduled meeting- July 23, 2024 at 2pm, 7)Adjourn *** Attachments Included _____________________________________________________________________________________ Pension Advisory Committee (PAC) Quarterly Meeting Tuesday, January 16, 2024, 2:00 p.m. City Hall Conference Room 301, 180 Market Street Attend Virtually: https://meet.goto.com/SouthBurlingtonVT/pensionadvisorycommitteemeeting1-16-2024 You can also dial in using your phone. Access Code: 302-315-605 : +1 (312) 757-3121 MINUTES ______________________________________________________________________________ Attendees: Martha Machar, Daisy Brayton, Dan Chappell, Dan Boyer, Erik Shait, Tim Barrit, Spencer Baker, Steve Locke, Brad Datillio, Absent: Matt Sleeman, Jason Morin 1) Welcome & Introductions 2) Additions, deletions, or changes to agenda - None 3) Approve prior meeting minutes from the October 24, 2023,PAC Meeting – Meeting minutes were approved. 4) SEI review of Q4 Net Performance Report. Executive Summary: Everything was up in 2023 except for commodities. One year return, 13.22% 3 year return, 3.68% 5 year return, 8.47% 5) Economy – the U.S. avoided a recession in 2023, managing to advance an above-average pace through the first 3 quarters of the year. Interest Rates/Inflation – Continue to believe that inflation will remain persistent, diven by services, low unemployment and wages. Markets – The outperformance of the “Magnificent 7” tech stocks to the broader market in 2023 was not as pronounces inQ4. This is a trend expected to continue. 6) Market and Economic Review Fixed income review – Treasury yields endured another volatile quarter. Improved bond market sentiment led to a further compression of credit spreads. Equities manage through presidential elections. Steady returns across the board in election years. Across the board there will be a massive shift in age demographics. 1/5th of US population will be retired by 2030. Economic outlook – Good news – U.S. economy remains relatively healthy. Fiscal policies are generally quite exansionary. Risk assets traditionally have performed well then the Fed starts to cut interest rates. Bad news – With animal spirits running high, it would not be surprising to ssee this bull market stumble in early 2024. Central banks might not be able to cut interest rates as much as markets are expecting and bon yields are not likely to fall much from here. 7) Portfolio Review – fund is in compliance with agreement. 8) City of South Burlington Retirement Income Plan- Erik Schait No new employees participating in the plan since 7/1/2019, We are 100% funded on past. 85.23% funded on future. Comparisons - Average public plan = 77%, VMERS 74.10%, VSTRS 57.48%, Burlington 80.10%, City of St Albans 54.88%. 9) Next scheduled meeting- Tuesday April, 23, 2024, at 2:00 p.m. 10) Adjourn – meeting adjourned at 3:00 p.m. For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.1©2024 SEI Dan Cappell, CAIA dcappell@seic.com 610-676-5292 OCIO partnership review First Quarter 2024 April 23, 2024 City of South Burlington For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.2©2024 SEI Agenda •Executive Summary •Market & Economic Review •Portfolio Review •Appendix For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.3©2024 SEI Please refer to the important disclosures accompanying your portfolio performance in this presentation for information on performance calculations. Executive summary Equities: Equity performance has broadened thus far in 2024—Japanese equities are enjoying a strong rally and the “Magnificent Seven” are ending their run in favor of the “Fab Four” or maybe the “Terrific Trio”. quite a bit of good news is already priced into the U.S. market. Starting from here, the bar has been set fairly high for earnings to outperform expectations and drive prices higher Fixed Income: Global fixed-income assets lost ground for the quarter. U.S. Treasury yields rose across the curve—with the exception of 1-and 2-month Treasury bills—over the quarter (bond prices move inversely to yields). Alternatives: The property market continued its modest selloff through the fourth quarter of 2023. Income remained the positive contributor to performance once again, as rising rates and heightened economic uncertainty pushed valuations down further. Q1 Manager Changes: No manager changes in the quarter. As of:3/31/2024 net of fees Market Value 3 Month Return FYTD Return 1 Year Return 3 Year Return 5 Year Return Since Inception Return (10/31/16) City of South Burlington $46.5M 4.35%9.76%13.43%4.10%7.56%6.33% -5%0%5%10%15%20%25%30%35% Commodities Inflation-Linked Emerging Markets Debt High Yield Bonds Long Duration Fixed Income Core Fixed Income Emerging Markets Equity World Equity x US U.S. Small Cap U.S. Large Cap Financial Markets Review One Year 2024 Q1 For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.4©2024 SEI SEI Point of View Inflation: •We believe Inflation will remain stubbornly high and above central bank targets. Developed central banks are keen to cut rates, but may disappoint expectations. We believe the level of rates will be more important than the number of cuts. In other words, if U.S. 10-year Treasury yields revisit 5%, equities may struggle. Interest Rates •Debt markets deserve our attention, particularly in the U.S., as fiscal spending continues unabated in the face of some eye watering metrics. U.S. government debt has reached $36 trillion as of December 2023, in excess of 120% of GDP, with annual interest costs breaching $1 trillion. We see additional room for bond yields to move higher, not only on the aforementioned sticky inflation data, but also on the substantial budget funding pressures and the lack of term premium priced into the yield curve. Markets: •Multiple rate cuts are priced in to equity markets across the globe, so while a realization of these cuts may boost risk assets in the near term, any disappointment in stimulus measures could prove challenging. However, we have seen this movie before, as rate- cut expectations in the U.S. have already been halved thus far this year, which has been of no concern to the equity market. Quite a bit of good news is already priced into the U.S. market. Starting from here, the bar has been set fairly high for earnings to outperform expectations and drive prices higher For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.5©2024 SEI Market and economic review For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.6©2024 SEI 6©2024 SEI Sources: Bloomberg, Russell, Standard & Poor’s. US Large Cap = Russell 1000 Index, US Small Cap = Russell 2000 Index. Value and Growth represented by Russell 1000 Value Index and Russell 1000 Growth Index, respectively. Sectors represented by respective S&P 500 sector indexes. As of 3/31/2024. Past performance is not a guarantee of future results. U.S. equity market review •US large caps marched steadily higher during the quarter, encouraged by a still-solid growth outlook and the prospect of eventual Federal Reserve rate cuts. After a faltering start to the year, small caps managed to post a positive performance thanks to a March bounce. •Within large caps, sector strength was once again broad-based. Ongoing excitement around artificial intelligence (AI) boosted tech-oriented sectors, while cyclical areas such as energy, financials, industrials and materials also did well. Healthcare performance was boosted by weight loss drug makers. •Value stocks trailed growth stocks, but both styles were strong in the quarter as the AI-driven rally began to broaden out and an increasing number of US large caps reached new highs. -10% -5% 0% 5% 10% 15% Dec '23 Mar '24 Cu m u l a t i v e T o t a l R e t u r n QTD Domestic Equity Market Returns U.S. Large Cap (10.3%)U.S. Small Cap (5.2%) 9.0%11.4%15.8%13.7%12.7%12.4%11.0%8.9%8.9%7.5%5.0%4.6% -0.5% 20.2% 39.0%49.8% 17.6% 46.0%33.5%26.6%17.6%16.1%7.2% 28.7% 0.4%9.6% Value Growth Communications Energy Technology Financials Industrials Materials Healthcare Cons.Staples Cons.Disc.Utilities Real Estate To t a l R e t u r n U.S. Large Cap Sectors First Quarter One Year For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.7©2024 SEI Source: Bloomberg, Russell, MSCI, SEI. U.S. = Russell 3000 Total Return Index, Developed (ex-US) = MSCI World ex-U.S Net Total Return Index, Emerging = MSCI Emerging Markets Net Total Return Index, Europe = MSCI Europe Net Total Return Index, Japan = MSCI Japan Net Total Return Index, Pacific ex-Japan = MSCI Pacific Ex Japan Net Total Return Index, EMEA = MSCI Emerging Markets Europe Middle East & Africa Net Total Return Index, Latin America = MSCI EM Latin America Net Total Return Index, Asia = MSCI EM Asia Net Total Return Index. All returns in USD. As of 3/31/2024. Past performance is not a guarantee of future results. International equity market review •Developed markets maintained their winning form against emerging markets in the first quarter. •Within developed markets, Japan and the US were notable outperformers. Although Europe underperformed regionally, the Netherlands, Denmark, Italy and Ireland were all up by double digits. Pacific ex-Japan was down due to negative performances from Hong Kong and New Zealand. •In emerging markets, Asia outperformed as ongoing AI mania pushed Taiwan’s stock market higher. Turkey was the strongest performer, and Egypt the weakest, in EMEA. Peru and Columbia were up double digits but their impacts on Latin America were swamped by Brazil’s much larger market, down 7%. -8% -6% -4% -2% 0% 2% 4% 6% 8% Dec '23 Mar '24 Cu m u l a t i v e T o t a l R e t u r n QTD International Equity Market Returns Developed (ex-U.S.) (5.6%)Emerging Markets (2.4%) 10.0%5.6%2.4%11.0%5.2% -1.7% 3.4%1.0% -4.0% 29.3% 15.3%8.2% 25.8% 14.1%2.4%6.3%10.5%22.6% U.S.Developed(ex-U.S.)Emerging Japan Europe Pacific ex-Japan Asia EMEA Latin America Broad Regions Developed Regions Emerging Regions To t a l R e t u r n Regional Performance First Quarter One Year For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.8©2024 SEI Sources: Bloomberg, JP Morgan, SEI. Option-adjusted spreads over US Treasurys US Investment Grade = Bloomberg Barclays U.S. Corporate Index, US High Yield = Bloomberg Barclays U.S. Corporate High Yield Index, and Emerging Market Debt = JP Morgan EMBI Diversified Sovereign Index. Vertical axis in U.S. Yield Curve chart shortened to enhance visibility of yield curve dynamics. As of 3/31/2024. Past performance is not a guarantee of future results. Fixed income review •Treasury yields moved higher over the quarter as markets reassessed the outlook for Federal Reserve (Fed) interest rate cuts due to better-than- expected economic activity and concerns that inflation could prove stubborn or even reaccelerate. •With the Fed holding its policy rate steady and the “soft-landing” and even “no- landing” scenarios gaining traction, the curve continued to shift higher from the more pessimistic levels of a year ago. •Credit spreads continued to tighten at the start of 2024. •Both US investment grade (IG) and high yield (HY) spreads remained well below longer-term averages. A number of high yield issuers were able to successfully push maturities into later years, according to Standard & Poor’s. •Emerging markets debt continued to find its footing with spreads finally falling below their 10-year average. 2.0% 3.0% 4.0% 5.0% 6.0% 0 5 10 15 20 25 30 Yi e l d Maturity (Years) U.S. Yield Curve 3/31/2024 12/31/2023 3/31/2023 0.9% 3.0%3.4% 1.0% 3.2% 3.8% 1.4% 4.6%4.8% 1.2% 4.3%3.8% 0% 1% 2% 3% 4% 5% 6% US Investment Grade US High Yield Emerging Market DebtOp t i o n -Ad j u s t e d S p r e a d Option-Adjusted Spreads 3/31/2024 12/31/2023 1-Year Ago 10Y Average For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.9©2024 SEI The good news •The U.S. economy continues to exceed expectations, and there are emerging signs that other countries are beginning to see modest improvement. •The Eurozone has been posting some upward surprises, although Germany still appears in the doldrums; the U.K. and Canada are also struggling to gain traction. •Japan appears to have left its multi-year stagnation and deflation behind it, as wages accelerate and earnings rise sharply in local currency terms; equities have finally surpassed their previous all-time high set in 1989. •Forward earnings estimates for the S&P 500 companies have been rising since the start of 2023, but explains only a small portion of the market’s total return over the period. •Outside the U.S., forward earnings estimates have been rising at a much faster rate than in the U.S., but price-to-earnings ratio remain exceptionally depressed. The bad news •Labor markets are still tight across the major economies, and wages continue to rise at a pace inconsistent with low inflation. •As expected, the biggest central banks are hesitating to cut policy rates, given the slow progress in reducing core inflation. •We continue to hold the view that inflation will stay stickier than expected, given the slow decline in services inflation and an expected reacceleration in goods inflation. •SEI expects bond yields to remain elevated, with the U.S. Treasury 10-year benchmark more likely to trade sustainably in the 4%-to-5% range in the absence of more significant economic weakness. •China remains something of a weak link in the global economy; although there are some hopeful signs for a turnaround, the debt overhang at the local government level and the overbuilding that occurred in years past are now coming back to bite the country. These are the views and opinions of SEI which are subject to change. They should not be construed as investment advice. Economic outlook: Global outlook slowly gaining steam For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.10©2024 SEI Fee review For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.11©2024 SEI SEI’s full-service OCIO solution Strategic Advice •Asset allocation studies •Investment policy review •Investment policy development •Capital markets review •Co-fiduciary •Market research •Fee analysis •Peer analysis •Committee education and training Investment Management •Manager research and selection •Manager oversight and replacement •Proactive portfolio positioning •Dynamic asset management •Public and private markets •Exclusive fiduciary •Transition management •Integration and oversight for existing assets Risk Management •Blackrock Aladdin System •Market risk management •Alpha risk management •Organization risk management •VaR, Stress testing: •Manager level •Strategy level •Proprietary investment and risk analytics •Goals-based reporting Plan modeling •Coordination with your actuary Administrative Services •Consolidated performance reporting •Audit assistance •Rebalancing services •Secure web access SEI’s fee includes: For existing institutional investor client use only. 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The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.12©2024 SEI Global investment team: 30 years of taking accountability for client investment results An experienced team of investment professionals •SEI has over 30 years of manager selection and portfolio construction experience •More than 100 credentialed investment professionals across the globe •More than 100 CFAs, MBAs or other advanced designations Accountable to clients •Significant level of senior investment team equity in SEI •Compensation based on achieving performance within specified risk parameters •No “pay to play” Globally integrated team-based structure •Investment teams sharing best practices globally •Teams focused on research and portfolio strategy •Global investment strategy oversight by senior leaders Investment disciplines •Manager selection and continuous oversight •Portfolio construction •Risk management •Equities •Fixed income •Alternative investments •Dynamic asset allocation Global Locations Toronto Oaks South Africa Dublin London Hong Kong New Delhi Luxemborg City Zurich Chicago New York City Indianapolis San Francisco Denver Seattle For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.13©2024 SEI City of South Burlington Defined Benefit Plan Fee summary Investment Management Fees Assets Current Fee Schedule First $25 million (Public Funds)0.62% Next $25 million (Public Funds)0.57% Over $50 million (Public Funds)0.47% Core Property (Real Estate)1.25% Other Services Assets Current Fee Schedule Trust and Custody Fee Included For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.14©2024 SEI Portfolio review For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.15©2024 SEI Important information: asset valuation and portfolio returns Inception date 8/31/2013. Historical Total Index can be provided upon request. The Portfolio Return and fund performance numbers are calculated using Gross Fund Performance, using a true time-weighted performance method (prior to 6/30/2012, the Modified Dietz method of calculation was used). Gross Fund Performance reflects the effective performance of the underlying mutual funds that are selected or recommended by SIMC to implement an institutional client’s investment strategy. Gross Fund Performance does not reflect the impact of fund level management fees,fund administration or shareholder servicing fees, all of which, if applicable, are used to offset the account level investment management fees the client pays to SIMC. Gross Fund Performance does reflect certain operational expenses charged by the funds and the reinvestment of dividends and other earnings. The inclusion of the fund level expenses that the client incurs but that are offset against the client’s account level investment management fees would reduce the Gross Fund Performance of the mutual funds. For additional information about how performance is calculated, please see your monthly performance report. If applicable, alternative, property and private assets performance and valuations may be reported on a monthly or quarterly lag. Alternative, property and private assets performance is calculated gross of investment management fees and net of administrative expenses and underlying fund expenses. However: Structured Credit Fund performance is calculated gross of investment management fees and net of administrative expenses; SEI Offshore Opportunity Fund II Ltd. Class A performance is calculated net of investment management and administrative expenses; and Energy Debt Fund performance is calculated net of management fees, performance fees, as applicable,and operating expenses. Net Portfolio Returns since 6/30/12 reflect the deduction of SIMC’s investment management fee and the impact that fee had on the client’s portfolio performance. Prior to 6/30/12, Net Portfolio Returns deduct a proxy annual fee for all periods to demonstrate the impact that SIMC’s investment management fee had on the portfolio performance. However, this is a hypothetical calculation, as it does not reflect the actual fees paid by the client during the period. Please see your client invoice for actual fees paid. For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.16©2024 SEI City of South Burlington Defined Benefit Plan Portfolio summary —March 31, 2024 For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.17©2024 SEI Return time periods less than 12 months are cumulative, over 12 months are annualized. City of South Burlington Defined Benefit Plan Annualized investment returns —March 31, 2024 For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.18©2024 SEI Return time periods less than 12 months are cumulative, over 12 months are annualized. City of South Burlington Defined Benefit Plan Annualized investment returns —March 31, 2024 For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.19©2024 SEI City of South Burlington Defined Benefit Plan Investment compliance verification —March 31, 2024 As of: 3/31/2024 Market Value Actual Allocation Target Allocation US Equity Factor $7,104,127 15.3%15.0% Large Cap Index Fund $6,123,837 13.2%13.0% Small Cap II Fund $1,436,843 3.1%3.0% World Equity Ex-US Fund $9,818,192 21.1%21.0% Emerging Markets Equity Fund $1,393,378 3.0%3.0% Equity $25,876,377 55.6%55.0% Core Fixed Income Fund $5,456,263 11.7%12.0% Limited Duration Fund $5,427,419 11.7%12.0% High Yield Bond Fund $1,836,430 3.9%4.0% Emerging Markets Debt Fund $1,839,024 4.0%4.0% Fixed Income $14,559,136 31.3%32.0% Dynamic Asset Allocation $2,349,895 5.1%5.0% Other $2,349,895 5.1%5.0% Core Property CIT $3,715,148 8.0%8.0% Real Estate $3,715,148 8.0%8.0% Gov't Institutional Fund $7 0.0%0.0% Cash $7 0.0%0.0% Total $46,500,563 100.0%100.0% For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.20©2024 SEI Data as of 3/31/2024. Source: APX and SEI Data Warehouse. Manager and fund allocations are subject to change. Note that SEI Investments Company has a minority ownership interest in LSV Asset Management as of the date of this report. City of South Burlington Defined Benefit Plan Institutional investment strategies Total Equity World Equity Ex-US Fund Jupiter Asset Management Ltd Acadian Asset Management LLC Pzena Lazard Asset Management LLC -International Quality Growth Lazard Asset Management LLC -All Country Ex-US 130/30 Momentum Macquarie Investment Management Large Cap Index Fund SSGA Funds Management, Inc. Large Cap Fund Acadian Asset Management LLC LSV Asset Management Cullen Capital Management, LLC Copeland Capital Management, LLC Mar Vista Investment Partners, LLC Fred Alger Management, LLC Small Cap II Fund Easterly Investment Partners LLC Los Angeles Capital Management LLC Leeward Investments, LLC EAM Investors, LLC Copeland Capital Management, LLC ArrowMark Partners Total Fixed Income Core Fixed Income Fund Metropolitan West Asset Management LLC Allspring Global Investments Western Asset Management Company MetLife Investment Management, LLC Jennison Associates LLC Opportunistic Income Fund Manulife Investment Management (US) LLC Ares Capital Management II LLC Wellington Management Company LLP High Yield Bond Fund Brigade Capital Management, LP Benefit Street Partners LLC Ares Capital Management II LLC T. Rowe Price Associates, Inc. J.P. Morgan Investment Management Inc. SEI Investments Management Corporation Emerging Markets Debt Fund Neuberger Berman Investment Advisers LLC Ninety One Grantham Mayo van Otterloo Marathon Asset Management, L.P. Colchester Global Investors Limited Cash/Cash Equivalents Govt Fund Instl BlackRock Advisors, LLC For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.21©2024 SEI Important information: SIMC This presentation is provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company. The material included herein is based on the views of SIMC. Statements that are not factual in nature, including opinions, projections and estimates, assume certain economic conditions and industry developments and constitute only current opinions that are subject to change without notice. Nothing herein is intended to be a forecast of future events, or a guarantee of future results. This presentation should not be relied upon by the reader as research or investment advice (unless SIMC has otherwise separately entered into a written agreement for the provision of investment advice). There are risks involved with investing including loss of principal. There is no assurance that the objectives of any strategy or fund will be achieved or will be successful. No investment strategy, including diversification, can protect against market risk or loss. Current and future portfolio holdings are subject to risk. Past performance does not guarantee future results. For those SEI funds which employ a “manager of managers” structure, SIMC is responsible for overseeing the sub-advisers and recommending their hiring, termination, and replacement. References to specific securities, if any, are provided solely to illustrate SIMC’s investment advisory services and do not constitute an offer or recommendation to buy, sell or hold such securities. Any presentation of gross mutual fund performance of underlying mutual fund investments or gross account level performance is only intended for one-on-one presentations with clients and may not be duplicated in any form by any means or redistributed without SIMC’s prior written consent. Annual performance is calculated based on monthly return streams, geometrically linked as of the end of the specified month end. Performance results do not reflect the effect of certain account level advisory fees. The inclusion of such fees would reduce account level performance, particularly when compounded over a period of years. The following hypothetical illustration shows the compound effect fees have on investment return: For an account charged 1% with a stated annual return of 10%, the net total return before taxes would be reduced from 10% to 9%. A ten year investment of $100,000 at 10% would grow to $259,374, and at 9%, to $236,736 before taxes. For a complete description of all fees and expenses, please refer to SIMC’s Form ADV Part 2A, the investment management agreement between SIMC and each client, and quarterly client invoices. Certain economic and market information contained herein has been obtained from published sources prepared by other parties, which in certain cases have not been updated through the date hereof. While such sources are believed to be reliable, neither SEI nor its affiliates assumes any responsibility for the accuracy or completeness of such information and such information has not been independently verified by SEI. Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs, or expenses, which would reduce returns. Indexes are unmanaged and one cannot invest directly in an index. Any presentation of gross mutual fund performance of underlying mutual fund investments or gross account level performance is only intended for one-on-one presentations with clients and may not be duplicated in any form by any means or redistributed without SIMC’s prior written consent. For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.22©2024 SEI Important information: collective trust funds As identified in the presentation, certain funds are collective trust funds, not mutual funds. A collective trust fund is an investment fund that is maintained by a bank or trust company for the collective investment of qualified retirement plans and governmental plans, and that is exempt from SEC registration as an investment company under Section 3(c)(11) of the Investment Company Act of 1940. Collective trust funds eliminate many of the administrative costs associated with institutional and retail mutual funds. For more information on the collective trust funds, including fees and expenses, please read the disclosure document for the trust. There is no guarantee that the investment objective will be fulfilled. If the fund is a target date fund, the principal balance of the portfolio may be depleted prior to a portfolio’s target end-date and, therefore, distributions may end earlier than expected. This risk increases if the distribution amount chosen is a significant portion of the starting principal. The target date represents the respective date when an investor intends to retire. Principal of any target date fund is not guaranteed at any time, including the target date. The projected time periods do not take into account the payment of fees to the advisor out of the portfolio or any other additional distribution from the account. For those SEI collective trust funds that may be held in the account, the SEI collective trust fund is part of a Collective Investment Trust (the "Trust") operated by SEI Trust Company (“STC”). STC manages the Trust based on the advice of one or more third party managers, which may include SIMC. Additionally,STC serves as the trustee of the collective trust funds and maintains ultimate fiduciary authority over the management of, and the investments made, in the funds. STC is also a wholly owned subsidiary of SEI Investments Company. For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI.23©2024 SEI Thank you.