2014 AGB Foundation Leadership Forum
Creating a Sustainable Spending Policy
Presented By:
Laura Block, CPA, CFP
Chief Financial Officer
University of North Dakota Foundation
Mary Jane (MJ) Bobyock, CFA
SEI Director of Institutional Nonprofit Advice
January 27, 2014
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
© 2013 SEI
1
Numerous variables impact an endowment’s spending policy
Support
operating
budget
Donor
expectations
Liquidity
needs
Inflation
Administrative costs
Strategic
initiatives
Enrollment
UPMIFA
Inflation
Capital market
impact
Calculation
methodology
Public vs. private
Spending
Policy
Scholarships
Drawdown risk
Fundraising
Purchasing power
Budget
Government
support
Underwater
endowments
Capital
campaigns
Financial
aid
Restricted vs.
unrestricted
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
2
Volatile investment environment leads organizations to make
spending policy changes
Combining diligent spending analysis with asset allocation decisions can help to balance shortterm cash needs with long term portfolio growth goals
Increased focus on finding the right level of spending as a result of:
• Lower expected returns from investment markets
• Higher demands for the use of endowment assets
In light of a recent volatile investment environment, 61% of poll respondents said their
organizations have made a change to their spending policies since 2008
SEI’s Nonprofit Management Research
Panel conducted a survey on spending
methodologies in Spring 2013
Respondents included:
• 260 U.S. nonprofit leaders, finance
executives, and investment committee
members
• Oversee endowments ranging in size
from $25 million to $6 billion in assets
Footer
FOR INSTITUTIONAL INVESTOR USE
ONLY. NOT FOR PUBLIC DISTRIBUTION.
3
An organization’s hurdle rate drives future strategic
asset allocation
• Once a hurdle rate is determined, it drives the strategic asset allocation, balanced by the risk
objectives of the organization
• The example below shows a sample of what client portfolio allocations might look like based on unique
hurdle rates and risk metrics associated with each allocation
Client Hurdle-Rate Objective is the long-term return needed by the client to cover its spending rate + inflation expectations + any related fees.
Footer
FOR INSTITUTIONAL INVESTOR USE
ONLY. NOT FOR PUBLIC DISTRIBUTION.
4
Spending policies by organization type
SEI’s Nonprofit Management Research Panel Survey (Spring 2013)
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
5
Colleges and universities spending policy & effective rates
SEI’s Nonprofit Management Research Panel Survey (Spring 2013)
• Average spending policy based on size
– <$100M = 4.19%
– $100-300M = 4.61%
– >$300M = 4.54%
• Average spending policy based on type
– Private = 4.71
– Public = 4.47
NACUBO-Commonfund Study of Endowments 2014
Effective spending rates (vs. policies)
2013
2012
2011
2010
2009
2008
4.4%
4.2%
4.6%
4.5%
4.4%
4.3%
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
6
Strategies for calculating the annual spending rate
Methodology (Response)
Moving average (79%)
based on rolling 3 or 5 year MVs
Hybrid (Yale) Model (15%)
weighted average of previous year
spending plus moving average
Banded inflation (6%)
floors and ceilings, adjusted for inflation
PROS
CONS
Smoother spending amount
year-to-year
Lower spending dollars when
market returns are strong
Compromise between
budget needs and long term
asset health
Heavier weight to fixed
spending can reduce
purchasing power of the
assets over long-term
More consistency in
budgeting forecasting
process
Spending rate may be outside
policy and in poor market
return environment erode
long-term purchasing power
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
7
Case Study:
University of North Dakota Foundation
A process for analyzing potential
changes and risks
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
8
Case study: Public University Endowment
Organization
Overview
• A state university foundation overseeing the endowment
• Approximately $200M in assets and over 13,000 annual contributors
• Acts as centralized infrastructure to support all private fund raising efforts on behalf of
the University
• Shares resources with its sister organization – the University’s alumni association
Key Factors
Goals
• Administrative fee charged at donor level supports operations of endowment but is
high compared to peers
• Quantify impact of different levels of administrative fees on endowment hurdle rate,
assets and operating revenue
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
9
University of North Dakota Foundation
Observations and assumptions used in analysis: Sept 2012
• Current market value of Foundation is $195 Million
• Spending policy is 4%
– Review based on 4 quarter and 12 quarter methodologies
• Administrative fee is currently 2% which covers the administrative and operational costs of running the
Foundation and affiliated fundraising
– Review impact of reducing fee percentage over time as asset values increase
•
•
•
•
Long term inflation assumption is 2%
Total return or “Hurdle” rate is 8% -- in line with NACUBO research
Year by year cash flow detail from the Pledge Cash Flow report was included
Additional inflows of $1 million each from both the Irrevocable Planned Detail Report and Revocable
Planned Detail report were included
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
10
How we create probability distributions and what they mean
• The probability distribution graphs and / or tables that follow are meant to
provide an overview of the range of possible outcomes for a given variable
(e.g., returns, pension contributions, expense) for a given asset allocation.
modeling tool and simulated capital market behavior.
• Capital market behavior is simulated for 1,000 possible scenarios based on
expected performance of each asset class and reflecting current economic
conditions. Capital market assumptions such as return, standard deviation
and covariances are inputs into this process, combining with model
parameters to create market scenarios.
20
percentile:
50% of outcomes are greater than
this amount, and 50% are less
scenarios for each variable being considered.
output variables, falling between the 5% and 95% results, based on SEI
Capital Market Assumptions.
95th Percentile
18
50th
• We use these 1,000 capital market scenarios to create 1,000 output
• A 90% confidence interval should be interpreted as 90% of the projected
22
16
75th Percentile
14
$ Millions
• The probability distributions are generated using SEI’s proprietary
Distribution of
Probable Outcomes
95th percentile:
95% of outcomes are less than
or equal to this value
5th percentile:
5% of outcomes are less than or
equal to this value
• This projection is hypothetical in nature, does not reflect actual investment
12
10
Median
(50th Percentile)
8
6
25th Percentile
4
2
5th Percentile
0
results and is not a guarantee of future results.
About Capital Market Assumptions
• SEI Investment Management Corporation develops forward-looking, long-term capital market assumptions for risk, return, and
correlations for a variety of global asset classes, currencies, interest rates, and inflation.
• These assumptions are created using a combination of historical analysis, future market environment expectations and by applying our
own judgment. In certain cases, alpha and tracking error estimates for a particular asset class are also factored into the assumptions.
• We believe this approach is less biased than using pure historical data, which may be affected by unsustainable trends or permanent
material shifts in market conditions.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
11
University of North Dakota
Current Portfolio
11.0
Russell 1000 Large Cap Index
11.0
Small Cap Equity
3.0
World Equity ex-US
10.0
Emerging Markets Equity
3.0
Dynamic Asset Allocation
4.0
Total Equity
42.0
U.S. High Yield
Emerging Markets Debt
4.0
3.0
Core Fixed Income
9.0
Diversified Short Term Fixed Income
2.0
Short Term Corporate Fixed Income
2.0
Total Fixed Income
20.0
Multi-Asset
5.0
Total Inflation Protection/Real Assets
5.0
Low Volatility Hedge
4.0
Moderate Volatility Hedge
6.0
Structured Credit
3.0
Private Real Estate
5.0
Global Private Capital
7.0
Distressed Debt
5.0
Natural Resources
Total Alternatives/Other
33.0
Expected Return (Net of Fees)
7.3%
Standard Deviation
12.6%
Sharpe Ratio
Risk of Loss (5th percentile)
3.0
0.42
-11.4%
Expected Return Distribution
(simulations)
40%
POTENTIAL
OUTCOMES
30%
29.8%
Good Scenarios
(95th Percentile)
75th Percentile
20%
RETURN (%)
Asset Class
U.S. Large Cap Fundamental Equity
16.0%
10%
Median
(50th Percentile)
25th Percentile
7.3%
0%
Poor Scenarios
(5th Percentile)
-0.8%
-10%
-11.4%
-20%
Current Portfolio
*Net of Fees
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
12
10 year distribution of fund values: Analyzing different
administrative fees
4% Spending Policy Over a 3 Year Moving Average of Market Values + Administrative Fee + 2% Inflation
Assumption + Inv Management Fee
No Contributions assumed in this analysis
Nominal Values
Real Values
600
600
500
500
POTENTIAL
OUTCOMES
486.70
Millions($)
Millions($)
465.10
400
300
200
400
423.70
Good Scenarios
(95th Percentile)
404.70
Median
(50th Percentile)
300
243.00
231.00
192.20
182.40
145.90
138.10
100
25th Percentile
200
100
76.00
71.60
0
75th Percentile
204.60
194.60
154.10
146.20
117.00
110.80
60.50
56.90
1.5% Administrative Fee
2% Administrative Fee
Poor Scenarios
(5th Percentile)
0
1.5% Administrative Fee
2% Administrative Fee
*Net of Fees. Starting Market Value: $169mm
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
13
Cumulative spending vs. administrative fees
4% Spending Policy Over a 3 Year Moving Average of Market Values + Administrative Fee + 2% Inflation
Assumption + Inv Management Fee
No Contributions assumed in this analysis
$120,000,000.00
$120,000,000.00
$100,000,000.00
$100,000,000.00
$80,000,000.00
$80,000,000.00
$60,000,000.00
$60,000,000.00
$40,000,000.00
$40,000,000.00
$20,000,000.00
$20,000,000.00
$-
$2014
4% Spending ($)
2016
2018
2020
2022
1.5% Administrative Fee ($)
2024
2014
2016
4% Spending ($)
2018
2020
2022
2024
2% Administrative Fee ($)
*Net of Fees
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
14
10 year distribution of fund values
Analyzing different spending policies: 4% vs. 5%
Spending Policy Over a 3 Year Moving Average of Market Values + 2% Administrative Fee + 2% Inflation
Assumption + Inv Management Fee
No Contributions assumed in this analysis
Real Values
600
600
500
500
465.10
400
424.00
Good Scenarios
(95th Percentile)
404.70
75th Percentile
368.70
Median
(50th Percentile)
25th Percentile
231.00
208.00
182.40
100
400
POTENTIAL
OUTCOMES
300
300
200
Millions($)
Millions($)
Nominal Values
200
194.60
175.30
163.70
138.10
123.40
71.60
146.20
100
63.30
110.80
Poor Scenarios
(5th Percentile)
131.10
99.20
56.90
50.30
4% Spending
5% Spending
0
0
4% Spending
5% Spending
*Net of Fees. Starting Market Value: $169mm
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
15
10 year spending on current portfolio
Spending Policy Over a 3 Year Moving Average of Market Values + 2% Administrative Fee + 2% Inflation
Assumption + Inv Management Fee
No Contributions assumed in this analysis
$12,000,000.00
$10,000,000.00
$8.81M
$8.24M
$8.10M
$8,000,000.00
$6.87M
$6,000,000.00
$4,000,000.00
$2,000,000.00
$2014
2015
2016
2017
2018
4% Spending Policy
2019
2020
2021
2022
2023
2024
5% Spending Policy
*Net of Fees
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
16
15% market shock on current portfolio in 2016
Spending Policy Over a 3 Year Moving Average of Market Values + 2% Administrative Fee
+ 2% Inflation Assumption + Inv Management Fee
No Contributions assumed in this analysis
$200,000,000
$14,000,000
$180,000,000
$12,000,000
$11,953,667
$160,000,000
$10,337,128
$140,000,000
$8,391,574
$9,295,503
$10,000,000
$120,000,000
$8,000,000
$100,000,000
$6,000,000
$80,000,000
$60,000,000
$4,000,000
$40,000,000
$2,000,000
$20,000,000
$-
$2014
2015
2016
2017
2018
2019
2020
4% Spending Nominal
4% Spending Real
2021
2022
2023
5% Spending Nominal
5% Spending Real
5% Spending Policy
4% Spending Policy
2024
*Net of Fees
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
17
Impact of fundraising
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
18
10 year distribution of fund values: Analyzing different
spending policies
Spending Policy Over a 3 Year Moving Average of Market Values + 2% Administrative Fee + 2% Inflation
Assumption + Inv Management Fee
+ $15 Million a year in Gifts and 2% in Market Growth
900
900
855.20
800
800
794.90
776.40
700
Millions($)
Millions($)
700
600
500
498.50
POTENTIAL
OUTCOMES
720.40
Good Scenarios
(95th Percentile)
600
75th Percentile
500
Median
(50th Percentile)
463.40
400
400
413.00
428.90
383.80
300
334.90
311.70
300
335.50
270.40
200
215.40
200.80
100
4% Spending
5% Spending
200
398.10
25th Percentile
311.80
Poor Scenarios
(5th Percentile)
251.60
162.00
151.10
4% Spending
5% Spending
100
*Net of Fees. Starting Market Value: $169mm
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
19
10 year distribution of cumulative spending
Spending Policy Over a 3 Year Moving Average of Market Values + 2% Administrative Fee + 2% Inflation
Assumption + Inv Management Fee
+ $15 Million a year in Gifts and 2% in Market Growth
$180.00
$169.59
$160.00
$150.84
Millions($)
$140.00
$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
$2014
2015
2016
2017
2018
4% Spending Policy
2019
2020
2021
2022
2023
2024
5% Spending Policy
*Net of Fees. Starting Market Value: $169mm
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
20
SEI Capital Market Assumptions - short term - July 2013
Compound Return
Risk
Arithmetic Return
Emerging Markets Equity
8.53%
30.34%
13.13%
World Equity ex-US
8.39%
21.18%
10.63%
US Private Equity
11.76%
20.11%
13.78%
Private Equity
11.32%
18.89%
13.10%
Core Fixed Income
3.87%
6.58%
4.08%
U.S. High Yield
7.68%
12.17%
8.42%
Emerging Markets Debt
8.24%
15.52%
9.44%
Moderate Volatility Hedge
8.64%
10.53%
9.20%
Low Volatility Hedge
5.95%
7.05%
6.20%
US Small Cap Equity
9.12%
23.44%
11.87%
US Large Cap Fundamental Equity
8.12%
19.09%
9.94%
Short Term Corporate Fixed Income
2.94%
4.07%
3.03%
Diversified Short Term Fixed Income
3.48%
5.56%
3.63%
Structured Credit
8.42%
21.00%
10.62%
Russell 1000 Large Cap Index
6.99%
19.00%
8.79%
Dynamic Asset Allocation
9.30%
19.92%
11.29%
Multi-Asset
3.77%
10.19%
4.29%
Private Real Estate
6.30%
11.84%
7.00%
Inflation:
2.00%
Please see important disclosures on prior slide and at the back of the presentation.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
21
SEI Capital Market Assumptions - short term - July 2013
Emerging World
Markets Equity
Correlations
Equity ex-US
-1.00
Emerging Markets Equity 1.00
US
Core
Private Private Fixed
Equity Equity Income
-1.00
-1.00
-1.00
US
US Large Short Term Diversified
U.S. Emerging Moderate Low
Small
Cap
Corporate Short Term
High Markets Volatility Volatility Cap Fundament Fixed
Fixed Structured
Yield
Debt
Hedge Hedge Equity al Equity
Income
Income
Credit
-1.00 -1.00
-1.00
-1.00 -1.00
-1.00
-1.00
-1.00
-1.00
Russell
1000
Large Dynamic
Private
Cap
Asset Multi- Real
Index Allocation Asset Estate
-1.00
-1.00 -1.00 -1.00
World Equity ex-US
0.78
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
US Private Equity
0.75
0.75
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
Private Equity
0.70
0.88
0.80
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
Core Fixed Income
0.00
0.19
0.10
0.28
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
U.S. High Yield
0.60
0.56
0.70
0.70
0.40
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
Emerging Markets Debt
0.80
0.66
0.60
0.65
0.50
0.75
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
Moderate Volatility Hedge
0.55
0.56
0.60
0.65
0.30
0.63
0.55
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
Low Volatility Hedge
0.40
0.42
0.45
0.47
0.22
0.41
0.40
0.97
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
US Small Cap Equity
US Large Cap Fundamental
Equity
Short Term Corporate Fixed
Income
Diversified Short Term
Fixed Income
Structured Credit
Russell 1000 Large Cap
Index
Dynamic Asset Allocation
0.70
0.80
0.85
0.83
0.20
0.60
0.60
0.60
0.45
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
0.75
0.86
0.85
0.89
0.30
0.60
0.65
0.64
0.46
0.90
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
0.20
0.19
0.00
0.33
0.70
0.55
0.35
0.20
0.15
0.15
0.20
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
-1.00
0.40
0.37
0.35
0.56
0.40
0.80
0.50
0.10
0.10
0.40
0.40
0.85
1.00
-1.00
-1.00
-1.00
-1.00
-1.00
0.45
0.47
0.60
0.61
0.00
0.80
0.50
0.00
0.00
0.50
0.50
0.50
0.88
1.00
-1.00
-1.00
-1.00
-1.00
0.75
0.86
0.85
0.89
0.30
0.60
0.65
0.65
0.45
0.90
1.00
0.20
0.40
0.50
1.00
-1.00
-1.00
-1.00
0.75
0.86
0.85
0.89
0.30
0.60
0.65
0.64
0.46
0.90
1.00
0.20
0.40
0.50
1.00
1.00
-1.00
-1.00
Multi-Asset
0.45
0.34
0.35
0.34
0.30
0.40
0.50
0.25
0.20
0.40
0.25
0.40
0.45
0.40
0.25
0.25
1.00
-1.00
Private Real Estate
0.35
0.39
0.30
0.56
0.10
0.40
0.35
0.35
0.25
0.30
0.40
0.45
0.50
0.40
0.40
0.40
0.30
1.00
Please see important disclosures on prior slide and at the back of the presentation.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
22
Best practices
Your hurdle rate has several levers you can adjust to impact asset allocation:
Spending
Liquidity/cash flow flexibility
Inflation
Administrative/investment fees
Level of confidence
Long term growth
Test impact from multiple spending policies
• Spending rate
• Calculation methodology
• Shock analysis
Examine use of immunization strategy
• Would it benefit the long term assets to have you upcoming cash flow commitments in a separate short term pool?
• Liquidity profile
Inflation erosion impact
• Is it important to be spending the same in real terms in twenty years as you are currently? Are your asset values after adjusting for
long -term inflation at least the same as they are today?
• Cost of fees
• Do you include administrative or investment fees in your hurdle rate?
• What is the impact of reducing those fees on spending? Long term assets? Asset allocation?
Cash flow considerations
• Incorporate projections of incoming and outgoing flows; what is the level of confidence on the predictability?
• Fundraising and Capital Expenditure Initiatives
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
23
Disclosures
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.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
24
Disclosures
IMPORTANT INFORMATION
SIMC develops forward-looking, long-term capital market assumptions for risk, return, and correlations for a variety of global asset classes, interest
rates, and inflation. These assumptions are created using a combination of historical analysis, current market environment assessment and by
applying our own judgment. We believe this approach is less biased than using pure historical data, which is often biased by a particular time
period or event.
The asset class assumptions are aggregated into a diversified portfolio, so that each portfolio can then be simulated through time using a montecarlo simulation approach. This approach enables us to develop scenarios across a wide variety of market environments so that we can educate
our clients with regard to the potential impact of market variability over time. Ultimately, the value of these assumptions is not in their accuracy as
point estimates, but in their ability to capture relevant relationships and changes in those relationships as a function of economic and market
influences.
The projections or other scenarios in this presentation are purely hypothetical and do not represent all possible outcomes. They do not reflect
actual investment results and are not guarantees of future results. All opinions and estimates provided herein, including forecast of returns, reflect
our judgment on the date of this report and are subject to change without notice. These opinions and analyses involve a number of assumptions
which may not prove valid. The performance numbers are not necessarily indicative of the results you would obtain as a client of SIMC.
We believe our approach enables our clients to make more informed decisions related to the selection of their investment strategies.
For more information on how SIMC develops capital market assumptions, please refer to the SEI paper entitled “Executive Summary: Developing
Capital Market Assumptions for Asset Allocation Modeling.” If you would like further information on the actual assumptions utilized, you may
request them from your SEI representative.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
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