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HomeMy WebLinkAboutRESPONSE - RFP - 8692 PENSION CONSULTANT & CO-FIDUCIARY FOR PFAREQUEST FOR PROPOSAL 8692 PENSION CONSULTANT & CO-FIDUCIARY FOR PFA INNOVEST RESPONSE February 23, 2018 Table of Contents Section 1: ................................................................................................................................. Letter of Interest Section 2: ................................................................................ Innovest Response to Poudre Fire Authority Section 3: .................................................................................................................. Signed Vendor Statement Section 4: .................................................................................................................. Innovest Articles of Note Section 5: ................................................................................ Poudre Fire Authority’s Performance Report Section 6: ...................................................................................Asset Allocation for PFA’s Custom Models Section 7: ............................................................................. Poudre Fire Authority’s Participant Newsletter SECTION 1 SECTION 2 Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 1 Outline of Qualifications and Professional Credentials Evidencing the Ability to Provide the Described Services Richard Todd and Wendy Dominguez founded Innovest Portfolio Solutions in 1996 after they grew tired of the conflicts in the Wall Street Firm for which they worked. With an objective to better serve clients in a conflict-free and client-centered firm, they founded Innovest. We have operated for over 21 years under the present organization offering financial advisory services. Innovest consults to retirement plans, foundations and endowments, other nonprofits, and wealthy families. Innovest Portfolio Solutions, LLC is an independent provider of investment related consulting services specializing in public sector plan consulting. We consult on a fee-only basis and believe there is an inherent conflict of interest if the organization which provides advice also receives remuneration from investments or vendors used as a result of that advice. Total assets under advisement is over $19 billion, and we consult to more than 65 defined contribution public sector plans. The Innovest philosophy is based on excellent client service and forward-looking, innovative investment solutions. Innovest employs a team approach designed to provide in-depth consulting experience and expertise, and to ensure continuity of service. Innovest has 45 employees with the majority dedicated to consulting and research. Our consultants average more than 20 years of investment experience. The result of this experience is that we have a staff of professionals that can easily answer questions or issues unique to each of our clients. Our clients include some of the most respected retirement plans, nonprofit organizations and associations both locally and nationally. The assigned consults, Principal Gordon Tewell, Chief Operating Officer and Principal Peter Mustian and Vice President Jared Martin will be supported by our team of professionals with a variety of financial disciplines, including Chartered Financial Analysts, Accredited Investment Fiduciaries, Registered Fiduciaries, Juris Doctors, Certified Pension Consultants, Certified Financial Planners and Masters of Business Administration. As retirement plan experts, our custom work for clients has been recognized nationally and our expertise published frequently. This year, Innovest was listed as a Top 100 Retirement Plan Adviser by PlanAdviser magazine. In 2017, Innovest was named a Top DC Advisor Firm by the National Association of Plan Advisors. In September 2014, Innovest was selected as the national Retirement Plan Adviser Team of the Year by PLANSPONSOR, one of the most prestigious awards in the retirement plan business. The nomination by our clients, their vendors and our industry colleagues for this prestigious award exemplifies our commitment to our clients and our proven expertise in implementing custom solutions to best meet our clients' unique needs. In addition, Innovest has received the following recognition from independent sources in the past five years which demonstrates our expertise and credibility: • PlanAdviser, Top 100 Retirement Plan Advisers of the Year, 2018 • National Association of Plan Advisors, Top DC Advisor Firm, 2017 • Pension & Investments, Best Places to Work in the Nation, 2017, 2016 and 2014 • Financial Times, Top Registered Investment Advisers, 2016 • Employee Benefit Adviser, Most Influential Women in Benefit Advising (Innovest President Wendy Dominguez), 2016, 2014 Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 2 • Denver Business Journal, #1 among Investment Managers in Colorado, 2015 • PlanAdvisor, Top 100 Retirement Plan Advisers of the Year, 2015, 2016 • Pension & Investments, Eddy Award, 2015 • PLANSPONSOR, The Retirement Plan Adviser Team of the Year, 2014 to 2015 • PlanAdviser, Top 100 Retirement Plan Advisers of 2014 • Financial Advisor, Top National Financial Advisor, #23 in the nation, 2014 • Denver Business Journal, Best Places to Work, 2013 • Financial Advisor, Top National RIAs, 2012 • NABCAP, Premier Advisors, 2009, 2010, 2011, 2012, 2013, 2014 Of importance to note are two awards for which we are extremely honored to have recently received: Innovest Received a 2015 Eddy award from Pensions & Investments In March 2016, Innovest received a 2015 Eddy award from Pensions & Investments recognizing our work with the University of Colorado's 401(a) and 403(b) plans on their $3.5 billion retirement plan conversion communication to participants. As a result of our collaborative communication efforts, the University now offers leading-edge plans to its valued faculty and staff and will continue to build upon the success it has had with renewed participant engagement in the retirement program. Innovest Ranked in the Best Places to Work in the Nation by Pensions & Investments In 2017, 2016 and in 2014, Innovest was recognized as one of the Best Places to Work by Pensions & Investments. It is both a tremendous honor and an achievement to be recognized as one of the best places to work in the nation since it allows us to hire and retain top-quality talent who share our commitment to serving our valued clients. Please see Section 4 for Innovest Articles of Note. Innovest Public Sector Retirement Plan Experience Innovest delivers powerful, innovative investment solutions to public sector retirement plan sponsors. We are the retirement plan expert and we use that expertise to equip retirement plan sponsors to effectively manage their fiduciary liabilities in the areas of investments, vendor management, and cost control. Innovest strives to create custom solutions designed to exceed, not just meet your expectations. Innovest has extensive experience with Poudre Fire Authority’s current recordkeeper and possesses a keen insight into the defined contribution plan marketplace. We have a solid knowledge of ICMA-RC services as a consultant to 29 ICMA-RC plans. In addition, we have reviewed their services in more than 20 vendor searches and have extensive working knowledge of their current pricing and service offerings. We use this expertise to ensure our clients have the best possible plan and fee structure available to them. Innovest serves as an extension of our clients’ staff managing the plan and controlling all of the moving parts. Defined contribution plans consist of plan investments, plan administration, participant communication/education, and the costs associated with those vital elements. When one element breaks down, the ripple effect is enormous, often leading to participant distrust or disengagement. Our professionals have actually supervised recordkeeping systems and coordinated plan conversions. We understand the systems, the testing and administrative functions from the vendor perspective. This experience gives us a unique depth of knowledge in vendor management and oversight. We have professionals that have been in the plan sponsor's Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 3 role and have a deep understanding of the issues facing investment committees and plan trustees. We use this expertise to offer customized solutions to our retirement plan clients. Our services have added value to our public plan clients for over 21 years. Innovest is dominant in the public sector market and we believe we are uniquely qualified to continue to provide the services detailed in Poudre Fire Authority’s Scope of Work. Innovest understands the rules and regulations unique to public plans. • We know the differences in vendors in the public market from that of the private sector. • The vendors provide us with very low cost solutions because of our dominance. They want to bid on every plan we take to the market and know that they have to provide the best solutions possible with extremely competitive pricing. • We help our public clients share best practices. Innovest has significant investment expertise and have a deep, focused team of professionals to drive the best solutions to our clients. Our team approach is designed to provide depth in consulting experience and expertise, and to ensure continuity of service. Our consultants average more than 20 years of experience consulting to public sector plans. We have expertise in the areas of investment due diligence, performance monitoring and measurement, plan design, plan compliance, vendor management, recordkeeping and implementation, and employee and plan sponsor education design and delivery. We help our clients manage their plans, provide high-quality investments, support the achievement of effective plan governance, and enhance participant engagement. We also specialize in helping plan sponsors with change management as it relates to improving participant outcomes and implementing best practices for plan sponsors. We assist our clients in understanding how proper plan design and use of certain plan features can help the plan sponsor meet plan goals. Decisions regarding eligibility, vesting, automatic contribution arrangements, availability of loans, hardship withdrawals and other distribution options, plus the use of pooled or self-directed investments, are important considerations for effective plan design. Our expertise also includes building best- of-breed menus with non-overlapping funds as well as utilizing model and target date portfolios, if appropriate. Our expertise also extends to our relationships with providers. We believe it is very important to work closely with a client's recordkeeper while keeping a client's best interests in mind at all times. As mentioned above, we have a working relationship with ICMA-RC. We work to maintain positive relationships with the firm providing retirement plan services to our clients. We believe that a positive working relationship furthers the interests of our clients. For example, open lines of communication keeps us abreast of the providers' planned service enhancements. Knowledge of new services and offerings allows us to better consult to our clients. While we want to maintain positive relationships with management, we maintain acute awareness of our role as co- fiduciary and ultimate client advocate. We have no financial relationship with any retirement plan services provider. We utilize our extensive experience in managing trustee directed portfolios, such as defined benefit plans, health trusts, and foundation/endowments, in assessing the quality of each investment menu. Studies have shown that having more investment options is not always best for plan participants. Many participants are confused by the range of investments, and end up diversifying their asset allocations inappropriately. Our goal is for each investment option to be distinct so that the difference can be explained to participants. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 4 Please see examples of our: Thoughtful public sector work below: • A plan sponsor was concerned about the ability of plan participants to reach a comfortable retirement. Additionally, the plan sponsor wished to attract talent in a highly competitive environment. Secondary goals were to encourage greater employee savings, reduce high initial turnover and to share retirement plan costs. Innovest changed non-elective employer contributions to employer match contributions. We established vesting on match contributions to assist with retention and to keeping costs under control. Additionally we recommended establishing an automatic contribution arrangement. • A client asked Innovest to create a custom philosophy around their target date fund selection. Innovest started by examining the participant demographics and behavior by examining such items such as average contribution rates, average retirement age and average account balances. Innovest then surveyed committee members on their own philosophy as it related to the purpose and risk profile of target date funds. Analysis was combined into a summary document. Three off-the-shelf target date fund families were presented as options to the committee. Through this process Innovest was able to simplify the selection process for the committee and conform to the tips that the DOL has outlined as best practices in selecting target date funds. • Innovest performed a plan benchmarking study for a municipality sponsoring six plans for different employee groups. The review of these 401(a) and 457 plans included the evaluation of the investment performance, investment diversity, service structure and reasonableness of fees charged by the vendor. In addition to uncovering a complicated menu design, Innovest found a significantly high number of participants utilizing expensive managed accounts. Recommendations included targeted education programs, building custom model portfolios, and simplifying the plan menus. Public sector organization leadership and involvement: • Innovest helped establish a nonprofit organization, the Colorado Public Plan Coalition, which provides education and networking opportunities for administrators of Colorado public plans and powerful advocacy for public employee benefit plans. Innovest and its professionals have been directly involved in the Colorado Public Pension Conference (CPPC) for over 20 years. More than 80 public sector plans throughout the Rocky Mountain region attend the conference regularly. CPPC is an excellent resource to public plan sponsors. Innovest has been a regular contributor and volunteer to the educational programs, delivering presentations on plan benchmarking, investments, fiduciary responsibility, and participant communication among others. • Innovest has been a sponsor to the Colorado Government Finance Officers Association (CGFOA) in a variety of capacities. CGFOA strives to improve the practices of governmental financials and to develop closer relationships and understanding among those concerned with public finance in Colorado. Gordon Tewell and Rick Rodgers have been actively involved for a number of years, and Gordon has served on the board. Additionally, Founders Rich Todd and Wendy Dominguez provided education to a CGFOA interest group. • Innovest founded and co-sponsors the Rocky Mountain Benefit Plans Conference (RMBPC). This annual all-day conference provides education on topics of significant interest to help both private and public sector plans improve the management of their benefit plans and participant outcomes. CPE and ethics credits are available. Each year this conference continues to grow. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 5 • Innovest professionals are also members of the National Association of Government Defined Contribution Administrators (NAGDCA), an organization made up of the deferred compensation/defined contribution plan administrators from across the nation. Many Innovest clients regularly attend this conference and Innovest is a regular sponsor. Principal, Rick Rodgers, has spoken at the conference over ten times and he has been a volunteer mentor for the student attendees at multiple conferences. Please see below for Innovest’s Public Sector Client List. Arapahoe County 457 City of Loveland Fire 401(a) Larimer County 401(a) Aurora Police 401(a) City of Mesa 457 Larimer County 457 Boulder Fire & Police 401(a) City of Northglenn 401(a) Littleton Public Schools 457 Colorado Intergovernmental Risk Sharing Agency 401(a) City of Northglenn Police 401(a) Littleton Public Schools 457 Colorado Intergovernmental Risk Sharing Agency 457 City of Scottsdale* Littleton Public Schools 403(b) Colorado County Officials and Employees Retirement Association 457 City of Thornton 401(a) Moffat County 401(a) City of Aurora 457 City of Thornton 457 Moffat County 457 City and County of Denver 457 City of Thornton Fire 401(a) Northern Colorado Water 401(a) City of Chandler 457 City of Thornton Police 401(a) Northern Colorado Water 457 City of Fort Collins City of Westminster 401(a) Pueblo Water Works City of Fort Collins Police Pension City of Westminster 457 Pitkin County 401(a) City of Fort Collins RHS 1 City of Wheat Ridge 401(a) Poudre Fire New Hire 401(a) City of Fort Collins RHS 2 City of Wheat Ridge 457 Poudre Fire Old Hire 401(a) City of Fort Collins RHS3 City of Wheat Ridge Police 401(a) Regional Transportation District 401(a) City of Fort Collins Service Providers Colorado School of Mines 401(a) Roaring Fork Transportation Authority 401(a) City of Fort Collins Unclassified Colorado State University OPEB Santa Clara Valley Water District 457 City of Golden 401(a) Denver Health Authority 401(a) Summit County 401(a) City of Golden 457 Denver Health Authority 457 Town of Breckenridge 401(a) City of Kansas City 457 Denver Housing Authority 401(a) Town of Vail 401(a) City of Lakewood 457 Denver Housing Authority 457 Town of Vail 457 City of Lakewood Police 401(a) Denver Regional Council of Governments 401(a) Town of Vail Recreation District 401(a) City of Longmont 401(a) Denver Regional Council of Governments 457 University of Colorado 401(a) City of Loveland 401(a) Jefferson County Public Schools 403(b) University of Colorado 403(b) Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 6 Poudre Fire Authority’s Experience with Innovest Poudre Fire Authority has been a valued Innovest client since 2013. Throughout our longstanding relationship, we have been committed to providing you with the highest quality, responsive service, and innovative investment solutions. We believe the success of our partnership is demonstrated by several measures, including investment performance, trustee education, evaluation of third party providers including a plan auditor and plan counsel, plan design changes, development of custom models for participants and our on-going relationship with ICMA-RC in providing participant education. Innovest Consultants Assigned to Poudre Fire Authority One of the four principles on which Innovest was founded is maintaining a client-centered culture. As a local, employee-owned organization we are extremely responsive to our clients. As mentioned previously, Innovest uses a team approach designed to provide depth in consulting experience and expertise, and to ensure continuity of service. Our average client to employee ratio is 6 to 1 and we have committed to our clients that this will remain constant with any future growth. In fact, in our recent client survey, our highest score was treatment by our entire team, where we scored 4.8 out of 5.0. We believe this is evidence that our team approach assures continuity of service. The team for Poudre Fire Authority will remain as it is now, consisting of Principal Gordon Tewell, Principal and Chief Operating Officer Peter Mustian and Vice President Jared Martin who has extensive participant education and recordkeeper experience, specifically with ICMA-RC. Please see the graphic below: Gordon Tewell, CFA, CPC, ERPA Principal 20 years of experience Peter Mustian, MBA Chief Operating Officer 14 years of experience Jared Martin, CFP®, AIF® Vice President 18 years of experience Katherine Sauer, Ph.D. Vice President & Director 13 years of experience Retirement Plan Support Team Poudre Fire Authority Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 7 The chart below further delineates the division of responsibilities among the assigned staff at Innovest: Primary Duties Consulting Team Director of Retirement Plan Services Retirement Plan Support Team Primary Client Contact X Work deliverables X X X Quarterly Meetings with Board X Plan Governance Support X Board Education X RFP/RFI Services X X X Investment Option Selection, Evaluation & Monitoring X X X Report Preparation X X IPS Review X Quality Control X X Participant Education X Please see consultant biographies below: GORDON TEWELL, CFA, CPC, ERPA | PRINCIPAL Gordon joined Innovest in 2007 and is a principal and consultant. He is a member of Innovest’s Retirement Plan Practice Group, a specialized team that identifies best practices and implements process improvements to maximize efficiencies for our retirement plan clients. Gordon is an occasional speaker at industry conferences including the PLANSPONSOR Annual Conference, the Western Pension and Benefits Council/American Society of Pension Professionals and Actuaries national conference, the Colorado Public Plan Conference and the Rocky Mountain Benefit Plans Conference. Gordon has more than 20 years of retirement plan industry experience. At Innovest, Gordon provides institutional consulting services to committees and boards of various types of retirement plans, both corporate and public-sector. Due to his expertise in retirement plan design and management and in-depth understanding of IRS Code and DOL rules and regulations, his responsibilities include consulting on plan design and features, plan health and retirement readiness, fiduciary responsibilities and protection, plan benchmarking, vendor search analysis, and investment menu design and implementation. Prior to joining Innovest, Gordon worked for the Retirement Group at Merrill Lynch as a relationship manager. As a relationship manager, Gordon provided strategic direction to clients of an integrated benefit platform supporting defined benefit, defined contribution, non-qualified deferred compensation and equity compensation plans. His experience also includes working as a plan sponsor as the administrator of the City of Westminster Pension Plans. Gordon was responsible for all aspects of the City’s five retirement plans and approximately $180 million in assets. Gordon’s responsibilities included planning, developing and delivering the education and communication programs, vendor selection and relationship management, strategic planning, and all compliance functions including maintenance of the plan document and IRS filings. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 8 Gordon is a graduate of Colorado State University, graduating with a Bachelor of Science degree in economics. Gordon is a Chartered Financial Analyst (CFA) and is a member of the CFA Institute and the CFA Society of Colorado. Additionally, Gordon has received the Qualified 401(k) Administrator (QKA), Qualified Pension Administrator (QPA) and Certified Pension Consultant (CPC) designations from the American Society of Pension Professionals and Actuaries (ASPPA). The CPC designation is the highest non-actuarial designation available from ASPPA and requires in-depth understanding of IRS Code and DOL regulations and an extensive working knowledge of plan features and design. CPCs generally work alongside employers to formulate, implement, administer, and maintain qualified retirement plans. Gordon is also an Enrolled Retirement Plan Agent (ERPA). The ERPA designation allows the designee to represent clients before the IRS on certain retirement plan matters. He is a member of ASPPA, the Denver Chapter of the Western Pension and Benefits Conference and a founding Board member of the Colorado Public Plan Coalition. Gordon and his wife Deb spend their free time traveling throughout the U.S., much of this time spent on their bicycles. When not bicycling or hiking in the Colorado Mountains, Gordon and Deb volunteer at their local YMCA, assisting with programs that promote healthy spirit, mind and body. PETER MUSTIAN, MBA | PRINCIPAL, CHIEF OPERATING OFFICER Peter is a principal, consultant and the chief operating officer at Innovest. Peter provides institutional consulting services to committees and boards of various types of retirement plans, foundation and endowment clients, and wealthy families. He is also a member of the Capital Markets Research Group, responsible for asset allocation studies and portfolio construction. He is also part of Innovest’s Investment Committee, which makes decisions on investment related research and due diligence. He is a member of Innovest’s Retirement Plan, Foundation and Endowment, and Wealthy Family Practice Groups, that identify best practices and implements process improvements to maximize efficiencies for our clients. In addition, Peter leads Innovest's Mentoring Committee, responsible for the ongoing professional development of Innovest's team members. In addition, he is responsible for coordinating the work of Innovest’s Client Service Team that includes managing due diligence, performance reporting, portfolio accounting, trading, and special client projects. He has more than 14 years of experience in the investment industry. Peter graduated from the University of Colorado at Boulder (with distinction) where he studied both finance and history. While in school he contributed articles and research to various business publications including co- authoring a business text book used at the University of Colorado Leeds School Of Business. He earned his MBA from Colorado State University. Prior to joining Innovest, he worked at UBS Financial Services. His responsibilities at UBS included portfolio analysis, mutual fund evaluation and investment research. In addition to his work at UBS, Peter has done significant charitable work abroad in a variety of capacities and remains highly involved in working with several humanitarian and outreach agencies. Peter is happily married and has two young boys and one daughter. Peter serves on the investment committee for several local and national religious organizations. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 9 JARED MARTIN, CFP®, AIF® | VICE PRESIDENT, CONSULTANT Jared is a vice president and consultant at Innovest Portfolio Solutions. Jared is a member of Innovest’s Retirement Plan Practice Group, a specialized team that identifies best practices and implements process improvements to maximize efficiencies for our retirement plan clients. At Innovest, Jared provides consulting services to committees, boards and individuals. He also manages the relationships between service providers and plan sponsors and provides ongoing vendor management for Innovest’s clients. He also leads many special projects for our retirement plan clients. Jared is a Certified Financial Planner®, holding this designation since 2003. Jared holds an Accredited Investment Fiduciary (AIF®) designation and having successfully completed this course of study, he uses his expertise to ensure that Innovest institutional clients are following a prudent investment process utilizing the Uniform Fiduciary Standards of Care. Jared received his Bachelor’s degree in business and economics from Regis University in Denver, graduating cum laude. Prior to joining Innovest, Jared was director of relationship management with ICMA-RC. In this role he was responsible for the overall business relationship and retention of the clients within his territory. Prior to being a relationship manager, he was financial planning manager with ICMA-RC for the previous 8 years. Jared is on the Board of the Colorado Public Plan Coalition (CPPC). Jared and his wife Erin have been married for more than 12 years and they have three children. In their free time they enjoy the outdoors and participating in all sports, for both the adults and the kids. Measuring the Success of Our Retirement Plan Consulting We define and measure the success of our retirement plan consulting relationships by designing and facilitating measurable improvements to our clients’ plans. These improvements may be in the areas of plan design, plan services, plan fee and expense reduction, and improved participant outcomes. Our goal is to make your plan the best it can be, and ultimately we measure these results by how well the plans meet the needs of participants. We continually measure the plan against goals set by the committees and boards with whom we work, and we use our expertise to ensure your plan is competitive in the marketplace. Client Retention One key measure of our success is our client retention rate, which averages 98% over the past five years. We believe this retention demonstrates our enduring commitment to our clients and the success we have achieved in our partnerships with them. Innovest 2017 Client Survey Results We believe having objectives with respect to serving clients is very important. In fact, we go one step further and actually benchmark our success in meeting our objectives. Innovest compares its objectives to the results of our annual client survey, and the measurement of the success of our investment recommendations to existing clients. Our highest priority is to deliver exceptional service and results to our clients. The level of overall satisfaction with our services was 4.8 (1=poor, 2=fair, 3=average, 4=good, 5=excellent). Our highest score was treatment by our entire team and knowledge and experience of our consultants, in which categories we scored 4.8 out of 5.0. We believe this is evidence that we provide unparalleled service to our clients. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 10 2017 PLANSPONSOR Best in Class Plans Each year, the editors of PLANSPONSOR magazine recognize leaders in retirement plan best practices that aim to provide more secure financial outcomes for U.S. workers. Innovest is proud that two of our clients, Molson Coors and Western Union, were selected as Best in Class for 2017. Poudre Fire Authority’s Experience with Innovest Innovest enjoys our partnership with Poudre Fire Authority. Four board members of Poudre Fire Authority responded to Innovest’s client survey marking Innovest excellent or very good in a number of categories including “meetings with the Innovest team are valuable”, “the quality of Innovest’s work”, and “the knowledge of Innovest consultants.” They also provided feedback that Innovest was knowledgeable, professional and provides overall good quality service. Additionally, they said they were highly likely to recommend Innovest to someone else. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 11 Example of Investment Line-up Performance Report that Details Methodology and Outcomes that Vendor Plans to Use if Selected: Our ongoing monitoring process of investment managers encompasses a variety of quantitative and qualitative analyses and checks. Relative performance is compared to the relevant peer group and index, but even more importantly, each manager’s performance is analyzed using a variety of risk adjusted measures; we want to know what risks our managers are taking to generate returns for our clients. The fundamentals (sector weightings, valuation metrics, holdings, etc.) of each portfolio are also analyzed during this formal quarterly review, which adds not only to our understanding of a manager’s style, but again, the risks the manager is taking to generate returns. Our custom quarterly performance report is extremely thorough and the primary tool for communicating with clients each quarter. It covers macroeconomic data and market conditions, analysis of total plan costs, menu design, detailed investment level information with an analysis of why the managers performed or under- performed, target date portfolio performance, and recommendations for change if necessary. Please see Section 5 for the most recent Poudre Fire Authority Quarterly Performance Report Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 12 Qualifications to Perform Scope of Work Innovest is uniquely positioned to handle the scope of services below in a timely fashion with a team of experienced professionals. In addition to the consulting team of Gordon Tewell, Peter Mustian and Jared Martin, Innovest has 42 additional professionals supporting the lead team. Our Investment Committee (seven person team) is responsible for all investment related research and due diligence. This committee consists of senior firm leadership with average tenure of nearly 20 years. The result of this experience is that we have a staff of professionals that can easily answer (or have the resources to research) questions or issues that come up regarding investment policy, implementation, recordkeeping and administration, investment due diligence, performance measurement and monitoring.  Establish and maintain a positive working relationship with our plan administrator – ICMA-RC. We believe it is very important to work closely with our client’s recordkeepers while keeping our clients best interests in mind at all times. As previously mentioned, we have had a positive working relationship with ICMA-RC for more than 20 years. Innovest consults to 29 plans which utilize ICMA-RC as their recordkeeper with more than $2.3 billion in combined assets. Through these shared clients and Colorado Public Plan Coalition (CPPC) board membership, we believe we have a strong working relationship with Gary Helm and their local professionals. In addition, we are recognized by ICMA-RC nationally as one of the top consultants to ICMA-RC plans in the country evidenced by Innovest being selected to pilot their quarterly client update program. In this program, we meet with ICMA-RC corporate leaders quarterly to talk about our shared clients, their issues, and how ICMA-RC and Innovest can better serve them. Additionally, Jared Martin, a consultant to the plan was formerly with ICMA-RC. Poudre Fire Authority’s Experience with Innovest • In 2013, Innovest prepared a RFI in order to benchmark proposed fees from ICMA-RC for administration and recordkeeping. The RFI resulted in the adoption of ICMA-RC proposed pricing at a below market level. • In 2014-2016, Innovest reviewed and assisted with ICMA-RC contract negotiations and conducted an additional RFI on administration and recordkeeping  Review current fund line-up and recommend changes to improve investment performance using best in class approach, true fund diversity, and cost value. Innovest assists in reviewing the plans’ current menus and making recommendations for improvement. Our approach to the investment process is comprised of a combination of manager due diligence and money management. Managers should withstand our comprehensive due diligence, but must also be an ideal fit within the multi-manager investment menu. We believe that investors, plan sponsors, and consultants make the mistake of judging managers only in isolation and fail to understand the impact of a particular bias or strategy within the broad portfolio context. We conduct a thoughtful analysis on the investment menu as a whole and whether or not a quality investment portfolio can be developed from the menu. We utilize our extensive experience in managing trustee directed portfolios, such as defined benefit plans, health trusts, and foundation/endowments, in developing our opinion as to the quality of the investment menu. Our recommendation includes a best-in- Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 13 class menu with non-overlapping funds as well as utilizing model and/or target date portfolios if appropriate. Studies have shown that more investment options aren't always better for plan participants. Many participants are confused by the investments and end up not diversifying their asset allocation appropriately. The goal would be for each investment option to be distinct and different and can therefore be explained to participants. Innovest often implements a three-tiered approach in designing an investment menu. Quality asset allocation funds, either target retirement date funds or risk-based funds comprise the first tier and are an important part of all menus, as the majority of employees are very interested in this type of investment assistance. The second tier of investment funds covers all major asset classes: domestic equity, fixed income, international equity, cash, and specialty funds if any. Finally, some plans allow for a third tier providing self-directed investing through a brokerage window. Please see the menus for both the New Hire Retirement Plan and Old Hire Retirement Plan below: Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 14 Poudre Fire Authority’s Experience with Innovest Innovest designed custom model portfolios for Poudre Fire Authority to provide a professional asset allocation alternative to participants. These portfolios can be selected by participants as a single investment choice on the ICMA-RC platform. They are completely custom and derived from the investments in your investment menu as well as alternative strategies that help reduce the volatility of the portfolio. (See example above: “Model Portfolios Only Funds”). Custom model portfolios are automatically rebalanced each quarter, but they may be rebalanced more frequently as market conditions dictate. In volatile markets, as we have been experiencing lately, custom models allow for a diversified portfolio that spreads out downside risk due to the allocation of funds to many different asset classes. Our defined contribution retirement plan clients are taken through the same sophisticated annual capital markets and asset allocation process as we do our defined benefit and health and welfare clients. Asset allocation drives results and studies show that individual investors have underperformed institutions by 4 to 5% per year. Professional asset allocation design will help participants achieve better results. Defined contribution investors do not have to be relegated to traditional options that add little true diversification. All equity styles are highly correlated and simply offer a variety of opportunity sets. Other complementary investments and strategies will more appropriately diversify portfolios and improve risk-adjusted Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 15 performance. Our portfolio construction strategies have enhanced participant performance throughout various economic markets. Please see Section 6 for Poudre Fire Authority’s Asset Allocation Alternative Investments Innovest believes that risk-based portfolios should contain exposure to various asset classes, and clients should consider including alternative investments (e.g., Hedge Funds, Private Equity) in these portfolios. We have extensive experience analyzing alternative investments as we have been investing in alternatives on behalf of our clients since the firm's inception in 1996. Alternative investment strategies play an important role in our clients’ portfolios. Innovest helps clients determine which types of alternative asset classes are appropriate for their needs and helps identify, scrutinize, and evaluate various opportunities. Our edge lies in three main areas: expertise, contacts, and size. We have particular knowledge of the hedge fund community, with valuable, insight regarding fund managers, their people, process, risk controls, strengths, and weaknesses. Since we conduct asset allocation studies on a client-by-client basis we quantify the percentage of assets that should be allocated to alternatives depending on objectives, liquidity, time frames, and experience levels. Some clients have low exposure to alternatives while some have low to moderate exposure in the range of 5-35. With hedge funds and absolute return strategies, we use products that are fully diversified across various strategies (long/short equity, arbitrage, relative value, event driven, credit, global macro, etc.) and regions (domestic and international). We also use products that have at least 15 underlying managers (diversify away single manager risk), have low leverage, have a low correlation to both equity and fixed income indices and who manage a substantial amount of capital.  Chosen professional is to serve as an advisor to the board providing subject matter expertise in the areas of fund management and participant education. The successful candidate must be willing to become a Co-fiduciary of the plan encompassing their scope of work. Innovest will serve as a plan fiduciary to Poudre Fire Authority, and will acknowledge this responsibility in writing. Innovest is an independent registered investment advisor under the Investment Advisers Act of 1940 and acknowledges our fiduciary responsibility in providing advice to clients that is utilized. Fiduciary oversight entails constant review of the plan’s design, recordkeeping and administration, education and counseling, investments, and cost controls. It is crucial that each of these factors be prudently managed to encourage active involvement and to meet employees’ needs. Innovest makes it a priority to keep abreast of current trends and regulatory changes in the retirement plan marketplace. We make ourselves aware of these developments through analyzing pending and recently passed legislation, attending educational conferences, and monitoring industry surveys that reflect plan sponsor and participant activity. Our professionals who have CPA, CFA, AIF, CPC designations and legal backgrounds also have continuing education requirements that provide additional educational opportunities to them directly and indirectly to all of our staff. Internally, we have weekly meetings with time dedicated to discussing these types of developments. Our fiduciary expertise is proven by our Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 16 engagement in nearly 60 cases as an expert witness in fiduciary breach cases. What we learn from these cases help us to arm our clients with information to protect themselves avoiding similar situation. In addition, Innovest provides fiduciary training and assists boards with management of their fiduciary responsibilities. We believe it is important to educate plan sponsors, Board members and pension staff on fiduciary-related matters as well as the capital markets and investments. Our qualifications for providing this education are as unique as the education itself. Innovest is the first Qualified Training Organization (QTO) in the Rocky Mountain region and one of only a handful in the country. A QTO delivers the required training and continuing education to trustees to obtain and maintain the Registered Fiduciary™ or RF™ designation. This designation indicates that the individual is able to act as a fiduciary. The Registered Fiduciary designation is based on the 2010 Fiduciary Standards of the Foundation for Fiduciary Studies and validated by Dalbar, Inc., the independent expert. Poudre Fire Authority’s Experience with Innovest Innovest provided formal fiduciary education to the Board in 2013, 2016, and 2017. We believe each meeting resulted in increased Board understanding of their fiduciary responsibilities. Innovest has also been heavily involved in the strategic planning for participant education since the beginning of our engagement in 2013. Innovest assisted the Board and ICMA-RC in setting strategic goals for the education program and determined how to implement educational programs to reach those goals. More recently, Innovest has added participant education expertise in adding Jared Martin to the consulting team which services the plan. Jared has many years of experience in handling participant education and communication due to his former role with ICMA-RC. Jared Martin, vice president, is well qualified to provide and review participant education services offered by ICMA-RC as he was the CFP and relationship manager for Poudre Fire Authority prior to joining Innovest. At least two of your consultants will meet with Poudre Fire Authority quarterly at a minimum to help effectively manage your plan and your fiduciary responsibilities. Our role in a typical board meeting includes an in-depth discussion of the following: • Review of the markets from the previous quarter, and provide a forward-looking perspective of market “headwinds” and “tailwinds” • Review of investments and model portfolios in the plan • Evaluation of funds in reference to the Investment Policy • Discussion of on-going participant needs and education in reference to the Education Plan • Trends and legislations effecting plans and participants • Fee review by funds • Comparison of the portfolios against benchmarks and peers Poudre Fire Authority’s Experience with Innovest For plan fiduciaries, ensuring that retirement plan fees are reasonable and fair is a fiduciary duty, and understanding plan fees can have a significant impact on retirement plan savings for participants. Innovest helped the Board implement fee leveling this past October. The process ensured that plan fees are shared equally among all plan participants. It also allowed the plans to implement lower cost and lower revenue generating share class options in multiple funds. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 17  Assist in the development of investment strategy seeking to improve investment return and cost value. Develop an investment oversight/review process for fund performance with a replacement plan. Provide fund replacement recommendations to the Board. Innovest assists in developing a strategy to enhance the outcomes of the participants in the plans. Research is the cornerstone of our firm and the majority of Innovest employees are dedicated to investment research. Our research is generated internally and focuses on areas such as capital markets, traditional and non- traditional products, menu and custom model portfolio construction, and fiduciary issues. Our proven investment consulting approach is described below. Ongoing Investment Monitoring Innovest’s ongoing evaluation and monitoring helps our clients understand performance as opposed to pure number crunching. This leads to better decision making. Changes are made for the right reasons, and are not a reactionary and emotional response to data. We believe this will lead to better long-term performance. We utilize sophisticated performance measurement capabilities to provide a comprehensive and informative evaluation of investment options on an ongoing basis. The organization and content of our performance measurement report enables you to determine "why" performance results were achieved, and to identify adjustments which periodically become necessary to maintain performance and manage risk. While the performance measurement is easy to understand, more important is the interpretation and insights presented by our consultants. Innovest formally reviews each manager’s performance on a quarterly basis in addition to informal intra- quarter reviews utilizing data obtained from Investment Metrics and Morningstar. Investment performance monitoring is comprised of two overlapping sequential procedures - performance measurement and performance evaluation. Performance measurement consists of evaluating a fund’s time weighted rates of return, characteristics, and sector commitments. This information needs to be compared to both market indices and managers of similar styles. Peer group comparisons are essential to gauge the performance of any manager. In addition, the money manager should not supply this information. Instead, it should be compiled by an objective third party. Performance evaluation consists of a top down approach to the factors that contributed to the returns of investments in the plan and identifying adjustments which periodically become necessary to maintain performance and manage risk. At each quarterly performance review meeting, your consults will review the following: • Analyze the current macro-economic environment and returns of asset classes and sub-asset classes. • Review the investment policy, re-examine strategic allocation of fund, and review the security guidelines. • Review the stated investment strategies of each of the money managers. • Compare the performance of the managers with those of others following the same strategy or style. • Compare the risk-adjusted performance of the money managers. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 18 • Evaluate the performance of the money manager against benchmarks and security guidelines in the investment policy statement. While the quarterly performance review is indeed important, what is paramount in our minds is the ongoing review of material qualitative factors. Through periodic discussions with managers via phone, email, or meetings, as well as thorough annual due diligence questionnaires and ADV reviews, we strive to know what is going on within each of the asset management organizations with which we work. We also monitor industry publications and websites, and maintain close industry contacts to enhance our ability to stay informed. The stability or instability of an organization, an investment team and/or an investment process is what bolsters or erodes our confidence in a manager’s ability to add value on a risk adjusted basis going forward. On-site due diligence visits, while not a requirement of our process, are carried out as needed. Due Diligence Process Innovest's ongoing monitoring process encompasses a variety of quantitative and qualitative analyses and checks. Relative performance is compared to the relevant peer group and index, but even more importantly, each manager's performance is analyzed using a variety of risk adjusted measures; we want to know what risks our managers are taking to generate returns for our clients. The fundamentals (sector weightings, valuation metrics, holdings, etc.) of each portfolio are also analyzed during this formal quarterly review, which adds not only to our understanding of a manager's style, but again, the risks the manager is taking to generate returns. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 19 Watch List We have developed an investment product scoring system that is tracked and maintained within our manager database. The main criteria for scoring includes: Organization, People, Style Consistency, Philosophy/Process, Asset Base, Performance, Expenses, Overall. Our investment product rating system provides our clients an executive summary of the issues that we believe are important in evaluating asset management firms. We rate each product in our client’s investment menu using the criteria listed by giving them a green, yellow, or red rating indicating there are no concerns, minor concerns, or major concerns surrounding that manager. This evaluation of managers is an ongoing process with formal reporting to the client each quarter. Recommendations are made in writing either through our quarterly reporting process or intra-quarter, if necessary. Please see the Manager Score Card from your most current performance report below. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 20 Fund Replacement Recommendations Innovest utilizes sophisticated performance measurement capabilities to provide a comprehensive and informative evaluation of the total plan and individual fund managers on an ongoing basis. The organization and content of your performance measurement report enables you to determine "why" performance results were achieved, and to identify adjustments which periodically become necessary to maintain performance and manage risk. While the performance measurement is easy to understand, more important is the interpretation and insights presented by our consultants. The ongoing review and analysis of money managers is just as important as the due diligence implemented during the manager selection process. A client’s Investment Policy Statement should include the process for both money manager review and termination. This will put the managers on notice to the criteria for evaluation and will also take the emotion out of decision making for the client. These guidelines are tailored to each client’s unique situation Major organizational changes also warrant immediate review of the mutual fund, including: • Change in professionals • Significant account losses • Significant growth of new business • Change in ownership We formally review the performance of all of our managers on an ongoing basis. Multiple quarters of unexplainable underperformance can trigger a formal review and change in product scoring. Generally, our procedures for inclusion of an investment fund to the Watch List and the removal of an investment fund from the plan will include the following steps: 1. The board shall be briefed by Innovest at least annually regarding all funds, and advised at each quarterly meeting on any fund not currently fulfilling the minimum requirements and Watch List measures. 2. Any investment fund that fails to comply with one or more of the Watch List measures will be placed on the Watch List, and shall be reevaluated the following quarter. 3. A fund may remain on watch status until the board decides to take further action. At the request of the board Innovest will create and present a Watch List Report. The Watch List Report shall address the outstanding concerns for the strategy and a recommendation on what action to take. The board will then determine whether the investment fund shall then be removed from the plan, frozen to new investments, or remain on the Watch List. We believe that occasional periods of negative performance generally do not provide sufficient reason to terminate a fund. However, poor risk-adjusted performance over a variety of time horizons is a stronger signal, particularly if that performance occurs during periods in which the fund's strategy should perform well. The best inferences are based on a variety of time periods, adjustment for risk, representative performance, and context. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 21 Investment Manager Searches and Selection Innovest believes that while many quantitative and qualitative measures can be employed to assess performance, ultimately the professional judgment of our investment professionals is what matters. We do not believe that a computer can successfully choose managers that will outperform going forward; we rely on our investment professionals to do so. Innovest strives to identify those key factors that explain past performance, and more importantly, give us a sense for whether or not a manager will be able to add value going forward. Our analysts uncover managers from data purchased from Investment Metrics and Morningstar, as well as through considerable research, interviews, meetings, and incoming communication from money managers. Our verification process encompasses many due diligence touchpoints which include meetings, third party verification, conference calls, and face-to-face meetings with all of the managers we utilize. Our manager database is consistently updated and maintained with new information. This level of almost constant interaction helps us keep abreast of issues regarding investment managers. Innovest begins the fundamental investment analysis process by benchmarking each manager. Our goal is to understand how similar or different a manager is from the benchmark, considering both quantitative and qualitative factors. After determining the proper benchmark, each manager’s performance is put through a rigorous evaluation, again, considering both quantitative and qualitative issues. We have a set of principles in our investment product due diligence process and we've outlined certain issues that we believe are important in evaluating asset management firms. Please note that there are always exceptions to each of the criteria set forth below; these are not hard and fast rules, rather preferences, all else being equal. • Ownership. We prefer privately held firms to public firms, because public firms have to serve two sets of constituents, their investors and their shareholders, which may result in conflicts. • Ownership Distribution. We prefer widespread, meaningful equity stakes among the investment professionals. This helps ensure team stability and may positively impact the alignment of interests with clients. • Team Depth. We prefer deep, experienced teams. We believe even the stars within the money management world require good teams around them • Business Focus. We prefer firms that are focused exclusively on asset management as opposed to investment banks, insurance companies, commercial banks or other diversified financial institutions. It has been our experience that the majority of quality products we have identified over the years come from firms that are focused on asset management. • Strategy Focus. We prefer firms that have a core competency and stick to it, e.g. PIMCO only manages fixed income (even PIMCO's equity strategies are index based and the team attempts to add value through a fixed income component), Third Avenue only manages opportunistic value strategies, etc. When firms try to offer products in every category, more often than not they have a lot of bad products; no firm is good at everything. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 22 • Research Focus. We prefer firms that approach research without focusing on benchmarks. For example, the analysts that cover technology cover the full market cap spectrum as opposed to having a small cap tech analyst, a mid-cap tech analyst and a large cap tech analyst, which we believe puts them in a better position to understand what is going on in technology. Market cap and benchmark weightings are utilized in implementation. • Performance. We evaluate past investment performance by reviewing the historic results and portfolio attribution. Particular attention is given to risk, consistency, style drift, and sector bets. • Concentration. We prefer firms/products that only invest in their team's best ideas. While studies on the subject of concentration have been inconclusive regarding performance relative to diversified funds, the better performing products that we have come across over time have usually been more concentrated. • Turnover. It has been our experience that better performing and more consistent products/strategies exhibit lower turnover. We believe this may differentiate true investing, where fundamental analysis pays off, and market timing/trading strategies, which seem to be less consistent and of course are more costly. • Capacity. We prefer to invest with firms that have demonstrated a willingness to close products to new investors before asset growth negatively impacts performance. • Compensation. We prefer firms that apply a significant weighting to long-term, risk adjusted performance when compensating investment professionals, as opposed to those compensation schemes that emphasize beating the index each year. • Manager Investment. While the information is often difficult to obtain, we prefer investment products where the manager has a significant amount of his/her own money invested. We create custom investment manager search books per asset class to present recommended managers to our clients. Both qualitative and quantitative details derived from our extensive search process are included in these books with our recommendations for each search. Poudre Fire Authority’s Experience with Innovest In 2013 Innovest guided the Board through the process of eliminating poor performing proprietary investments, adding new best–of-class options, streamlining the investment menu and adding risk- based model portfolios. During our time working with the plans, Innovest has presented searches to replace PIMCO, Allianz NFJ Dividend Value and for investments commodity, floating rate corporate loans, hedge fund of funds and high yield investment products.  Provide a method for due-diligence on funds outside the ICMA-RC fund line-up. Innovest conducts due diligence on all funds within the plans’ investment menus. Our due diligence process is outlined on pages 18-19. Typically recordkeepers receive revenue from proprietary products used in plans they provide. Innovest prides itself in our thorough evaluation of products and through our leverage with all our recordkeeping partners ensuring that our clients are provided with fully open architecture. Through Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 23 this process we ensure that all proprietary products which are utilized in our client’s investment menus are best in class and fully appropriate for that client before they may be included in plan’s investment menu. Poudre Fire Authority’s Experience with Innovest In 2013 when Innovest was first retained by Poudre Fire Authority, we analyzed the existing menu and made recommendations to streamline and improve the fund line-up.  Develop a plan to determine plan members investment goals and retirement needs. Participant retirement readiness is the biggest challenge facing plan sponsors today. Many plan sponsors are reassessing their duty and obligation to create plans with the appropriate tools and features to maximize retirement savings for participants, to minimize fees paid by the plan (the savings from which are realized by the plan participants), and to ensure the plan is competitive to a group of similarly- sized peers in the marketplace. The voluntary plan marketplace is evolving, and as a deeper understanding of participant needs comes to light, so too does the necessity for plan sponsors to understand the strategies available to them to achieve these goals. Innovest thinks it’s important to provide plan members with retirement income goals. We do not believe that employers can continue to merely tell employees that they need to save. Instead, these participants need to be provided with real numbers on how much they need to save. We believe that in plans where employers have provided employees with retirement savings goals, employees are more engaged in actively planning for their retirement, have higher savings rates, are more attentive to their investment allocations and returns, and generally put more time into monitoring the progress of the retirement accounts. Recent studies demonstrate that workers who have identified a retirement saving goal are much more confident that they are on track to achieving a secure retirement. We will continue to identify and provide additional educational support services by ICMA-RC, for example financial planning services. This includes identifying income replacement ratios. Poudre Fire Authority’s Experience with Innovest When Innovest was retained in 2013, we presented to employee groups educating them on the new plan design and how it would affect their saving for retirement. Innovest also worked with ICMA-RC to implement Participant Retirement Readiness Reviews. These reviews are individual reports prepared and presented to each individual in the plan showing them their retirement preparedness. The reports drove action causing many plan members to increase contributions to their voluntary retirement program.  Provide a quarterly report for each plan member addressing fund performance. The report should benchmark to the recipients goals and needs. Recommendations to achieve goals should be provided. As previously described, we provide our clients with custom quarterly performance reports (Section 5). This report is extremely thorough as it covers macroeconomic data and market conditions, analysis of total plan costs, menu design, detailed investment level information with an analysis of why the managers performed or under-performed, target date portfolio performance, risk-based model performance, and recommendations for change if necessary. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 24 In addition, we provide our clients with participant newsletters for distribution containing information specific to their plans. These newsletters are custom to each client and are tailored to meet the plan’s specific needs. Each quarter the newsletter contains a timely article on investing as well as specific fund performance, performance of custom target-date or risk-based portfolios, and easy to understand fee information. We will work closely with Poudre Fire Authority and ICMA-RC to add specific benchmarks for participants and include recommendations to achieve those goals. Please see Section 7 for the most recent Poudre Fire Authority Participant Newsletter.  Attend quarterly Pension Board meetings held on the fourth Wednesday of January, April, July and October in Fort Collins, CO. At least two members of your consulting team will meet with you on a quarterly basis. As each client is organized uniquely, we will meet with management and board members as required to provide the fiduciary oversight and meet the needs of the organization. Consultants are always available for additional in-person meetings or conference calls if they arise. Phone calls will be returned within one business day. The Innovest consulting team for Poudre Fire Authority will agree on a plan with the board regarding all work projects and we will meet every deadline.  Develop and recommend a participant educational plan that includes a policy statement, goals and measurable objectives. Innovest partners with our clients to create and implement a customized education plan and develop an education policy statement. We guide the process by working with recordkeepers, such as ICMA- RC, to determine participant needs, target education objectives, and outline an appropriate strategy to deliver education in a variety of formats to help ensure compatibility with participants’ learning styles. Because participant learning styles vary, no single type of delivery is best. A combination of printed materials, group meetings, and one-on-one meetings should be considered by the plan sponsor. Retirement plan vendors, like ICMA-RC, have excellent education resources that we work with to coordinate the education program. However, if requested, we can supplement vendor education. We feel participant education is so important that in January 2014, Innovest acquired InSight Employee Benefit Communications. InSight provides custom employee benefit education solutions, retirement plan communications, plan governance services, and fiduciary due diligence support to plan sponsors. Quality participant outcomes are crucial to retirement plan fiduciaries and participant education is a vital component to achieving these outcomes. Adding these resources to Innovest’s already knowledgeable and experienced consulting team has significantly benefited our clients’ experiences and those of their employees. Education plans we develop include the following elements detailed in the education policy statement with goals, measurable objectives, timelines and service standards: • Enrollment Meetings - group educational meetings to discuss plan features, investment options, and provide participants with a knowledge base to guide them to make better investment elections. These meetings should be offered both at the time of initial enrollment and on an ongoing basis according to a schedule determined. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 25 • Group Presentations - educational workshops for participants where plan specific data is customized for their plan. Workshops are presented on-site by experienced professionals who understand how to successfully communicate complex subject matter and inspire participants to make necessary decisions. • Online Education - seminars which will provide information that will help participants make better investment and savings decisions for retirement. These sessions will include education on the process of making investment elections. The seminars should consist of slides and voice narrations that are developed by ICMA-RC professionals. • Written Materials - customized retirement plan materials and other education materials to communicate investment options and guide participants through the election process. These include election forms which graphically illustrate model portfolios and individual fund options. • Additional educational materials designed to teach participants about capital markets to help them make proper long-term investment decisions should be included. • One-On-One Counseling - Individual employee one-on-one sessions to assist them in making their fund selection and asset allocation decisions. These on-site meetings allow more individualized questions from participants regarding funds, asset allocation, risk, return, savings levels, and direction regarding integration of the participant’s plan assets with personal assets. • Individual Reviews - quarterly investment review letters and participant newsletters discussing market events, investment results, and the market outlook. These are to be made available in physical and electronic versions to plan participants. Innovest will monitor compliance with the education plan throughout the year and assist if deemed necessary. As mentioned previously, consultant Jared Martin is well equipped to offer his expertise to improve retirement readiness for your participants through his past experience with ICMA-RC. Further, Innovest has been recognized by Pensions & Investments multiple times for our assistance in creating award winning participant education campaigns. Poudre Fire Authority’s Experience with Innovest During 2014-2016, Innovest worked with Poudre Fire Authority to develop and analyze an employee survey on education goals. The outcome of our analysis resulted in revising the focus of the educational program and content and developing a new approach towards education by the Board and ICMA-RC. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 26 Time Line If retained, Innovest will continue with the current time line of work performed for Poudre Fire Authority. Poudre Fire Authority Work Plan and Time Line Proposed Task Timeframe Analyze and benchmark recordkeeping, if applicable, and investment fees to the marketplace. Determine and compare fees to similar sized plans. Identify potential areas of cost savings or opportunities for enhanced services. Provided quarterly. The next scheduled review would be in April 2018 and with the less frequent benchmarking based on the timing of items 16 and 17. Scrutinize structure of the investment menu for overlap of style, gaps in style, and the need for Lifestyle/Target Date products. Evaluate investment products comparing them to an appropriate benchmark and to a universe of similarly managed investments. Ongoing and presented quarterly. The next review would be scheduled for April 2018. Review vendor contract including cost reconciliation, terms, and flexibility surrounding notice requirements, investment products, and service standards. Immediately. The first review would be scheduled within the first 30 days of the engagement. Review vendor service levels including responsiveness to plan sponsor and participants, accuracy of transactions, and education levels. Immediately. The first review would be scheduled within the first 30 days of the engagement. Develop / modify Investment Policy Statement. Within 30 days. We would review and provide suggested modifications no later than March 2018. Assist in adhering to effective plan governance complying with the various regulations and responsibilities that dictate plan's ongoing operation as well as fiduciary behavior. Ongoing as actions are driven by changes in regulations. Any changes necessary in the current environment would be presented in April 2018. Provide ongoing investment monitoring and perform investment searches that meet the portfolio design criteria as needed. Ongoing as Innovest provides continuous investment monitoring and performs investment searches quarterly. The next presentation of results would be scheduled for April 2018. Develop and implement custom risk-based model portfolios into the plan menus, if appropriate. Custom models have been implemented, and are reviewed annually. The most recent review was in January 2018 and the next annual review would be scheduled for January 2019. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 27 Meet with the Committee quarterly and provide customized, quarterly performance reports. Quarterly. The next review would be scheduled for April 2018. Provide an annual plan fee review (reviewed quarterly) to understand fees and determine the fairness of the fees. As vendor searches are completed for other clients, fees are reviewed to see if the fees remain consistent with the market. Annually. Innovest performed an update in September 2017. Innovest would perform the next annual update in September 2018. The next quarterly review would be scheduled for April 2018. A review with the provider would be completed annually to benchmark against similarly sized clients. Coordinate investment program by acting as the single contact in the day-to-day operation of plan investments. Ongoing. Innovest would handle this role immediately upon engagement and would continue to do so on an ongoing basis. Coordinate issues between recordkeeping, money management, accountants, auditors, and any other pertinent vendors. Immediately. Innovest would handle this role beginning immediately and then on an ongoing basis. Conduct trustee fiduciary education workshops on a variety of investment and fiduciary related topics. Annually and as needed. Fiduciary training would continue to be provided annually and as needed as Board members are added. The next scheduled training session would be scheduled for April 2018. Assist ICMA-RC in developing and implementing a participant education strategy and review the results on a quarterly basis. Within 30-45 days. Innovest would review the results of the participant education strategy on a quarterly basis. Provide participant education on an as needed basis. (Additional cost). Immediately. Innovest would provide as needed education immediately upon request. Innovest will conduct a Request for Information (RFI) for the plans every three years to confirm that vendor pricing remains competitive in the marketplace. Within 90 days. Innovest would issue an RFI within 3 months of engagement. Innovest will conduct a formal Request for Proposal (RFP) for the plan as needed. Conversion coordination and transition services will be provided. As needed and as requested by the Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 28 General Availability As a local, employee-owned organization, we are extremely responsive to our client’s needs. As mentioned previously, your team of consultants is available to you at all times. Consultants will meet with you on a quarterly basis at a minimum. Consultants are also available for additional meetings or conference calls as needed. All phone calls will be returned within one business day. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 29 Innovest Cost Detail Itemizing Services Innovest is only compensated on a fee-only basis. We will not accrue any benefit from vendors, brokerage commissions, finder's fees, or the splitting of money management fees. As a pure investment management consulting organization, we do not sell investment products or actuarial services. To insure that the interests of both Poudre Fire Authority and Innovest Portfolio Solutions remain aligned, we feel our compensation should not be dependent upon commissions Please note, Innovest did not increase our fee. The fee for consulting services for Poudre Fire Authority has remained the same since 2013. Retainer Consulting Fee .............................................................................................................. $39,500* *Plus annual CPI increases. Note: Investment consulting fees are considered legitimate plan expenses and may be paid for out of the plan. The following services are included in the fee proposal above (as further described in this proposal). • Plan Benchmarking – Analyze and benchmark recordkeeping and investment fees to the marketplace. Total plan costs determined and compared to similar sized plans. Potential areas of cost savings or opportunities for enhanced services will be identified. – Scrutinize structure of the investment menu for overlap of style, gaps in style, and the need for Lifestyle/Target Date products. Evaluate investment products comparing them to an appropriate benchmark and to a universe of similarly managed investments. – Review vendor contract including cost reconciliation, terms, and flexibility surrounding notice requirements, investment products, and service standards. – Review vendor service levels including responsiveness to plan sponsor and participants, accuracy of transactions, and education levels. • Plan Governance – Develop Investment Policy Statement, if needed. Review and modify the Investment Policy Statement as necessary. – Assist Poudre Fire Authority in adhering to effective plan governance complying with the various regulations and responsibilities that dictate plan's ongoing operation as well as fiduciary behavior. – Assist with drafting a board charter. • Investment Product Searches – Innovest will review investments on an ongoing basis and perform investment searches that meet the portfolio design criteria as needed. – Our extensive qualitative analysis includes an examination of each manager’s organization, the people responsible for managing the product, their philosophy and process, the consistency of their investing style, and the impact of the asset base being managed in that style. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 30 • Custom Model Portfolios – Develop and implement custom risk-based model portfolios into the plan menus, if appropriate. – Models are comprised of both underlying options that are currently in the plan and complemented by investment strategies that have low correlation to the traditional investments (e.g. commodities, hedged- equity). – Innovest provides clients with quarterly participant newsletters for participant distribution, which contain information on retirement-oriented investment strategies and their custom model portfolios. • Monitoring of Investment Products – Monitor the plan’s investment products on an ongoing basis. • Quarterly Meetings – Meet with the board quarterly and provide customized, quarterly performance reports. • Monitoring Plan Fees and Expenses – Provide an annual plan fee review to help you better understand fees and determine the fairness of the fees. As vendor searches are completed for other clients, fees are reviewed to see if the fees remain consistent with the market. – Provide fees for both recordkeeping services and investments against appropriate benchmarks and peers. • Vendor Management Services – Coordinate investment program by acting as the single contact in the day-to-day operation of plan investments. – Coordinate issues between recordkeeping, money management, accountants, auditors, and any other pertinent vendors. • Education Services – Conduct trustee fiduciary education workshops on a variety of investment and fiduciary related topics. – Assist the vendor in developing and implementing a participant education strategy and review the results on a quarterly basis. – Provide participant education on an as needed basis. • Vendor Search and Conversion (as needed) – The aspects of a vendor that we analyze and provide objective guidance and expertise to evaluate include customer service, recordkeeping, administration, participant communication, investment options, plan compliance, and service costs. – As the conversion of a retirement plan to a new vendor is just as crucial as the selection of that vendor, Innovest will help manage the conversion process. • Request for Information (RFI) or Request for Proposal (RFP) – Innovest will conduct a Request for Information (RFI) for the plans every two to three years to confirm that vendor pricing remains competitive in the marketplace. – A comprehensive fee review will be performed annually and reported quarterly. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 31 – If requested, Innovest will work with your Purchasing department to issue an RFP for vendor services as necessary. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 32 Innovest References 1. Client Name: City of Westminster Contact Person: Kim McDaniel Address: 4800 W. 92nd Ave., Westminster, CO 80031 Phone Number: (303) 658-2046 Email: kmcdanie@cityofwestminster.us Assets: $295 million Tenure with Innovest: 1999 - current 2. Client Name: Boulder Fire & Police Contact Person: Bruce Penfold, Trustee Address: 1805 33rd Street, Boulder, CO 80301 Phone Number: (303) 441-3363 Email: penfoldb@bouldercolorado.gov Assets: $150 million Tenure with Innovest: 2001 - current 3. Client Name: City & County of Denver Contact Person: Steve Ellington Address: 201 W. Colfax, Denver, CO 80202 Phone Number: (720) 913-9384 Email: Steve.ellington@denvergov.org Assets: $695 million Tenure with Innovest: 2011 - current Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 33 Innovest’s Philosophy and Approach to Sustainability We are more than an investment firm. We are stewards to our clients, our employees and our community. This mission articulates the responsibility we take for our clients' investments, their growth and their continued success. Each and every professional at Innovest lives our mission and understands the importance of their role as a steward to our clients. As part of our mission of stewardship, Innovest strives to also be a good steward of our resources. Here are a few examples of our sustainability practices in action.  Each employee receives individual recycle bins at their desk as well as recycle bins in common gathering areas.  Printer ink cartridges are recycled through the Wild Life Sanctuary in partnership with Laser Concepts.  All employees are encouraged to not keep paper files and file all documentation electronically. When printing is necessary, we use recycled paper.  Our building is LEED® Silver Certified.  Public transportation is encouraged and our location is adjacent to RTD regional bus hub and within walking distance of the Belleview Light Rail station.  Employees are encouraged to carpool when it is possible, not only in coming to work, but also in driving to client meetings and volunteer opportunities.  Innovest allows employees to work from home. Additionally, Innovest adds to the sustainability of our community by being a charitably focused firm. Community Contributions Innovest supports our community and encourages giving back as we realize success. Among the Bedrock Principles on which Innovest was founded is our commitment to building community, working as a team, and maintaining balance. Not only do we follow these principles in running our business, but we also use this deeply rooted philosophy as a catalyst for positive change in our community. We know that we can make the greatest impact on our community by supporting causes that are important to our neighbors, employees, and clients. We serve by providing financial and volunteer support to more than 50 nonprofit organizations throughout the year and presenting opportunities for our employees to give back. Innovest is committed to the philanthropic mission of improving inner-city education. Additionally, 1.5% of Innovest revenue is given to the community through direct client donations. As a firm, Innovest has given nearly $1 million to charities, over the last 10 years. We are proud to be a charitably focused firm. Innovest also employs four students from Arrupe Jesuit High School. These students are from economically disadvantaged families, and they are usually the first in their families to not only graduate from high school but also attend college. Innovest pays a portion of their tuition to attend a private college preparatory high school, and in exchange, they work at Innovest one day per week. Each of the students has an Innovest employee as their professional mentor. Innovest is in our fourth year as a corporate work study partner. CEO, Richard Todd also sits on the board of trustees for Arrupe High School. Charitable Donations Committee The Innovest Charitable Donation Committee's mission is to provide opportunities for the Innovest team to support a diverse community of local nonprofits through active volunteerism and financial support. The process begins with nominations from Innovest employees who select community organizations with whom Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 34 they have formed meaningful relationships. From the nominations, the Committee selects a diverse group of nonprofits to support throughout the year. We typically spend a day providing services to each organization with whom we have partnered each year. Innovest's Bedrock Principles • We Have an Unwavering Commitment to Client Service. Our clients come first. We expect each to feel that they truly are our most important client. It is a privilege to serve our clients. Quality client communication is crucial. • We Must Add Value to Clients. We must strive to provide advice and services that are worth more than our compensation. We will focus on servicing the unique needs of our clients and continually improving their situation. Our clients must have a feeling of wellbeing and trust. • We Maintain our Integrity. By providing our clients with all the facts, they can make informed decisions and judgments. We will provide full disclosure and maintain the highest ethical and moral standards. • We Build Community. We strive to have our clients and associates proud and privileged to be a part of our firm and success. This can only happen if each and every principle is maintained and nurtured. We must earn the respect of our clients. • We Hire Great People. Intelligence and a positive attitude are most paramount, while skills can be developed. Values must include honesty, professional service, respectfulness, and responsiveness. • We Work as a Team. Our clients must receive contribution from each of us. Personal responsibility, commitment, and distinct, unique characteristics and contributions create true synergy. Working together creates passion. • We are Reflective. Our humility and dedication to excellence causes us to constantly reflect on ways to improve. We challenge each other to create better processes and approaches. • We Treat People Well. In light of the challenges of adversity and pressure, we will strive to treat people with respect, warmth, and patience. • We are Devoted to our Process. Both our investment and internal processes are the cornerstones of our business and demand respect and commitment by every individual. Short cuts are not tolerated. • We Work Hard. Our environment is exciting, fun and demanding, yet rewarding, and total commitment and dedication is the result. We expect our culture and success to create passion and to make hard work a fulfilling experience. • We Are Focused. We need to ensure that our firm is stable in an unstable industry. Continuity promotes client confidence and an attractive environment for all. Life is too short for anything less. • We Are Balanced. The intricate balance of being large enough to achieve economies of scale, but small enough to maintain relationships based on intimacy, loyalty, friendship, and candor. More than a series of the latest corporate buzz words, we live our mission and our Bedrock Principles each day. We believe that these principles and the dedication of each professional on our team has contributed to our success. Request for Proposal 8692 Pension Consultant & Co-Fiduciary for Poudre Fire Authority Innovest Response 4643 S Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com 35 Disclaimers Past performance is no guarantee of future results. Investing involves the risk of loss. The material herein has been prepared for informational purposes only and is not intended to provide, and should not be relied on for investment, tax, accounting, or legal advice. No representation is being made as to whether any investment product, strategy, or security is suitable or appropriate for an investor’s particular circumstances. Assumptions, opinions, and forecasts herein constitute our judgment and are subject to change without notice. Innovest is an independent Registered Investment Adviser registered with the Securities and Exchange Commission. This document may also contain returns and valuations from outside sources. While the information contained herein is believed to be true and accurate, Innovest assumes no responsibility for the accuracy of these valuations or return methodologies. SECTION 3 SECTION 4 Best places to work in money management Innovest Portfolio Solutions Brushing up: Employees got out the rollers for a recent Brothers Redevelopment Paint-A-Thon. This year, employees of the firm spent their time painting the home of a man who is caretaker for a sister battling cancer. By Trilbe Wynne | December 11, 2017 Additional winners, managers with 20 to 49 employees Denver | $18 billion in AUA | Years won: 2014, 2016, 2017 Popular perks:  Hosts entire staff at weekly company-sponsored “lunch bunch” to encourage cross-departmental team building.  Sponsors different wellness events each quarter, with activities such as meditation and yoga at lunch.  Organizes four firmwide volunteer days annually and gives each employee an additional day of paid time off annually to support individual causes. Employees say:  “Management seems to try to live what they teach, of having integrity, being ethical and doing what is right just because it's the right thing to do. The company hires people of character so these traits are firmwide.”  “Senior management at Innovest does a great job of recognizing and rewarding employees who perform their job well. The weekly recognition from senior management is greatly appreciated.”  “Innovest is a firm committed to doing what's right for the employee and their family.” 1 2014 Retirement Plan Adviser Team of the Year Innovest Portfolio Solutions Denver, Colorado Innovest Portfolio Solutions is the 2014 PLANSPONSOR Retirement Plan Adviser Team of the Year winner. The impetus to found Innovest in 1996 as an independent registered investment advisory firm was to avoid "the conflicts of interest on Wall Street," says Wendy Dominguez, president. Today, the practice has 28 employees who serve 98 retirement plans with $5.2 billion in assets under advisement (AUA) and 100,000 participants. Innovest's primary commitment is "to deliver custom, innovative investment solutions to retirement plan sponsors and help our clients and their participants manage change to improve retirement readiness." Innovest's mission statement isn't a single tagline but, rather, 12 "Bedrock Principles":  We have an unwavering commitment to client service: Our clients come first.  We must add value to our clients by providing advice and services that are worth more than our compensation.  We maintain our integrity by providing our clients with all the facts, so they can make informed decisions and judgments.  We build community and earn the respect of our clients.  We hire great people; intelligence and positive attitude are paramount.  We work as a team; our clients must receive contributions from each of us.  We treat people well—with respect, warmth and patience.  We reflect on ways to improve; we challenge each other to create better processes and approaches.  We are devoted to our process.  We work hard.  We are focused on providing continuity to ensure client confidence. Jerry Huggins, Douglas Inglee, Peter Mustian, Rick Rodgers, Wendy Dominguez, and Gordon Tewell 2  We are balanced—large enough to achieve economies of scale but small enough to maintain relationships based on intimacy, loyalty, friendship and candor. Innovest also has deep bench strength in terms of its employees' experience, with each of its consultants having been in the retirement plan industry for an average of 20 years, in a variety of disciplines in addition to investment consulting including: pensions, plan recordkeeping, hedge fund management, commodities trading, fiduciary litigation, accounting and banking. "We've brought in experts to really complement our team over time, as we recognized that retirement plans have many moving pieces—including plan administration, implementation, investment due diligence, performance measurement and monitoring, and education," Dominguez says. "The length of time our consultants have been in the business—and their expertise—are two of our biggest differentiators." The first thing that Innovest does when first working with a client is to "find out where the needle is that the plan sponsor wants to see moving, and draw on the knowledge, expertise, talents and skills of the team to hold ourselves accountable to that goal," says Gordon Tewell, principal. "It's most gratifying when you actually see it working and moving participants to a better retirement readiness outcome." To ensure that the practice delivers consistent client service, as well as to share ideas, each Innovest consultant serves on the Retirement Plan Practice Group, Dominguez says. "We discuss issues as they relate to our clients and our plans not only in our practice group meetings, but also in our weekly client board meetings and our Investment Committee meetings," she says. Innovest's client service includes benchmarking recordkeeping and investment costs, and consistently looking to reduce those fees "by helping our plan sponsors design and develop requests for proposals [RFPs]," Dominguez says. Innovest prefers RFPs and requests for information (RFIs) to the benchmarking services available in the industry in order to work with current data, she says. "We've used our industry clout to negotiate dramatically lower revenue requirements for plan vendors as a result of the RFP process," she says. "In addition, we've reduced investment costs by creating streamlined investment menus with cost-effective investment products. We've successfully negotiated lower investment minimums and access to closed investment products." In fact, Dominguez notes, for one public sector 457 plan with $600 million in AUA, Innovest reduced the fees paid by participants by more than $1.5 million a year. Furthermore, in addition to this focus on third-party fees, Innovest benchmarks its own fees—which are primarily either hard dollar or flat fee—against the industry. "We can talk to clients about how our fee, our involvement in the plan, directly benefits plan participants," Dominguez says, noting that Innovest offers both group and one-on-one participant meetings, and serves as either a 3(21) or 3(38) fiduciary to all of its plans. "So, we think it's absolutely legitimate for our fee to be paid by the plan participants, but we also recognize that our presence on the board helps our committees be better fiduciaries and protect themselves on the fiduciary standpoint, so we can also talk about how the plan sponsor benefits from our involvement," she says. 3 Because of Innovest's dedication to reducing fees, the practice has found it achieves the greatest success in this area by serving plans with $20 million or more in AUA. In fact, Innovest's median plan size in assets is $25 million. Innovest has also attracted a number of municipal 457 plans looking for the unusually high-touch depth of service the practice offers, Dominguez says. "A lot of legal firms have hired us as well, and that's a great feather in our cap just because a lot of the best ERISA [Employee Retirement Income Security Act] attorneys in the state sit on those committees." Having achieved a successful track record over the past eight years and built the practice up to $5.2 billion in assets, at this point Innovest is primarily interested in working with "those plan sponsors who are truly engaged and have a genuine interest in improving the plan for their participants while maintaining fiduciary soundness," says Rick Rodgers, consultant, vice president and director. This goes back to the point about serving not just as an investment adviser but a true retirement plan adviser, Dominguez says. "Our value proposition is not just picking funds but focusing on the entire retirement plan—its design, automatic enrollment, automatic escalation, restructured company matches, deferral rates, participation rates, investment diversification, financial wellness and retirement readiness. These are the benchmarks and goals we hold to each plan." In tandem with educating its plan sponsor clients about the importance of outcomes and consistently improving results, Innovest surveys its clients annually to find out what additional measures they would like Innovest to take to improve each plan further. Clients rated gave Innovest a 4.7 out of possible 5 score in the last client survey. —Lee Barney Thank you to our clients, employees, and friends for another successful year at Innovest! We just completed our 21st year, believe it or not, and we are happy to celebrate another record year. Our revenue was up just under 10% over 2016 which was an Innovest top line best number. Our promise to team members is they will benefit from our growth in new opportunities for advancement and responsibility. We have several former analyst assistants that are members of our 11-partner group today! We instill a “pull each other up” culture and we emphasize the best way to be promoted at Innovest is to prepare others to take over current responsibilities. We are client driven, work as a team, and are driven to make each other better! Giving Back Another key to the Innovest culture is our involvement in the community. We sponsored four company volunteer events at nonprofits including Junior Achievement, Central City Opera House, Brothers Re-development, and GrowHaus. We also supported July and December giving weeks where we donated clothing and participated in infant and school supply drives, as well as worked at Urban Peak, Glorified Recess, and the Denver Rescue Mission. Once again, our employees will receive a day off on their birthdays in 2018 because of everyone’s participation in Colorado Gives Day. Analyst Kathy LaLone did an amazing job leading our philanthropy activity! The highlight of our work with the community is our corporate work study sponsorship of Arrupe Jesuit High School. Each day, we have an Arrupe student work at Innovest and in turn, we pay a substantial portion of their tuition at this amazing prep school. Students attend school four long days and work the fifth. Students are able to enroll at Arrupe by qualifying for the National School Lunch Program. These inner-city Arrupe students are achieving incredible results and we are fortunate to work with four of them each year! Growth Continues Investment results in 2017 were strong as nearly all equity markets finished the year at close to all-time highs. We continue to promise our clients that they will benefit from our firm growth. They include Kristy LeGrande, CFA, who was a managing director at Cambridge Associates and Katie Sauer, PH.D., who was director of financial wellness, education, and research at the University of Colorado System Administration Office. Employee retention is over 90% at Innovest. We are committed to continually moving our firm to the next generation of professionals and have no intention of “selling out.” We believe this is best for clients and employees alike. Committed to independence and objectivity, we are confident our business model leads to better client advice and solutions. Selling investment products taints investment advice. 100 percent of Innovest revenue is from the fees our clients pay. Firms that accept commissions (many can be completely hidden for the investor) only do so to line their own pockets at the expense of the client. In other words, commissions only drive up the cost to the client. The Innovest fee-only approach is the right way to do business! We were pleased to add 27 new clients in 2017, including families and family offices, governmental, corporate, and multi-employer retirement plans, and a number of nonprofit organizations’ operating reserves, endowment, and foundation assets. Our diversified clientele keeps us challenged and we are confident our consulting and client solutions are better because of it. For example, our portfolio accounting and custom client reporting is cutting edge in the family office world and is accomplished by the demands of the institutional marketplace and the large technology and database investments that we make at Innovest. Thanks to our great clients and friends of our firm for the referrals; they are important to us! Our research and due diligence team was busy spending more than 60 days on the road conducting onsite meetings with over 100 managers, products, and strategies! Overall, we held more than 300 meetings with managers in 2017. While crunching numbers is part of the process, our process is much more in-depth, focusing on the health of the organization, consistency in process and philosophy, manager consistency, fees, and fiduciary elements. Ultimately, we believe our due diligence process and approach to capital markets and asset allocation will lead to better client investment results. Measuring Success The 2017 client survey results were very strong with our overall score being a 4.7 on a 5.0 scale which is equal to the best score we have ever received. Our highest scores were “Knowledge and Experience of Our Consultants” and “Treatment by Our Entire Team” – each at 4.8. Innovest is a thought leader in the investment and fiduciary world and we have been recognized with many awards. Founding Partner Wendy Dominguez was a Denver Business Journal Outstanding Woman in Business Finalist and we are proud to be named one of the Best Places to Work nationally in the investment industry by Pensions and Investments for the third time in four years. This award is based on a very comprehensive employee survey to help evaluate ourselves and determine how we can improve and become a better place to work. In addition, our professionals wrote or were interviewed in 16 different articles and presented nine speeches at conferences. From the 2016 employee survey, we spent considerable time and attention on the Innovest mentorship program Routinely rebalancing a diversified portfolio of investments can play an important role in helping investors achieve their investment objectives. Other aspects of portfolio management are important, too, of course. It’s important to construct a portfolio based on an investor’s goals and risk and return objectives. It is also important to use forward- looking return assumptions, suitable asset classes and competent investment managers. With these pieces in place, rebalancing can be a relatively easy way to improve results. Staying on Target The most obvious benefit of rebalancing is that it helps a portfolio maintain its return and volatility targets. A properly diversified portfolio will include investments with different return and volatility expectations. In addition, their returns in a given period will not normally match one another— one may be up when another is down, and vice versa. Over time, some investments will outperform others. Without rebalancing, this will cause the portfolio to stray gradually from the initial target allocations. To take a simple example1, consider a portfolio that was composed of 60% stocks and 40% bonds in January 2007. Ideally, an investor with this portfolio would have selected the investment mix in order to target a particular level of return and corresponding risk for the portfolio. However, if the portfolio were left alone, by October 2007 it would have been 65% stocks and 35% bonds. In other words, the portfolio would likely have higher return expectations and volatility. Moreover, October 2007 would have been the wrong time to have an overly aggressive portfolio, as the S&P 500 declined by approximately 45% over the following eighteen months. By March 2009, the decline would have reduced stocks to just 48% of the total portfolio, with bonds composing 52%—much less aggressive than the initial 60/40 portfolio. Just as October 2007 was the wrong time to be overly aggressive, March 2009 was the wrong time to be overly conservative. By January 1, 2017 the S&P 500 had risen more than 180% from the March 2009 bottom. Instead of using this buy-and-hold strategy, we believe the better approach is to rebalance periodically—typically quarterly, semi-annually, or annually. If a portfolio with a 60/40 target allocation became 65/35 after stocks advanced, as in October 2007, the investor would sell the 5% over- allocation to stocks and invest the proceeds in bonds. Likewise, in March 2009, an investor would sell a portion of the bond investment to bring stocks back up to the 60% target allocation. To be clear, this example focuses on the stock market’s peaks and troughs in order to emphasize the point of rebalancing. Implementing a routine rebalancing plan would result in more incremental changes, and sometimes an investment will continue to decline after an investor has brought the allocation back up to target. Buying Low and Selling High Rebalancing to the 60/40 mix annually over twenty years would have reduced the standard deviation of the portfolio’s annual returns from 9.2% to 9.0%. At the same time, the portfolio’s average annual return would have increased from 6.6% to 7.0% for the same period. Together, the increased return and decreased volatility would have increased the portfolio’s Sharpe Ratio from 0.47 to 0.52. 4 www.innovestinc.com continued from page 3 Conclusion To sum up, rebalancing is a relatively easy way to ensure that a portfolio’s expected return and volatility characteristics stay on target. Historically, a systematic, routine rebalancing process has resulted in increased returns and reduced volatility. That is due, at least in part, to selling investments after they have outperformed relative to other parts of the portfolio and buying after they have underperformed. However, before implementing a rebalancing strategy, investors should consider the transaction costs and tax consequences. And finally, investors should keep in mind that sometimes what has underperformed will continue to underperform; the benefits of rebalancing are likely to accrue over several years, not necessarily right away. Notes This example is based on research conducted by JP Morgan Asset Management. Stocks are represented by the S&P 500 Index. Bonds are represented by the Bloomberg Barclays U.S. Aggregate Index. NONPROFIT SPOTLIGHT INNOVEST DAYS OF GIVING This year Innovest continued our “Winter Week of Giving” tradition. On the first day of giving, Innovest sent to thee: gently used clothing and toil-let-tries. On the second day of giving, Innovest gave to thee: money to the charities we love. On the third day of giving, Innovest gave to thee: decorated Project Angel Heart bags by the tens. On the fourth day of giving, Innovest gave to thee: lunch served and encouraging words. On the fifth day of giving, Innovest gave to thee: gifts for six adopted families we bring. Organizations Innovest was privileged to serve during this week included the Denver Rescue Mission, Project Angel Heart and Colorado Gives Day. For the fourth year in a row 100 percent of Innovest employees participated in the Colorado Gives Day Corporate Challenge, earning an extra day off for their birthdays. Typical of Innovest, each day employees brought in snacks to incentivize and encourage co-workers to contribute and participate in the designated activities. We were thrilled to have the opportunity to serve so many deserving organizations in 2017. Not only do these activities provide team-building experiences, but they provide already generous people with new opportunities to give back and find new nonprofits to support and be passionate about. Innovest is proud to be a company full of generous people! Top Photo: Members of Innovest’s Charitable Donation’s Committee collect presents for our six adopted families. Middle Photo: Innovest volunteers pose with Denver Rescue Mission staff after serving lunch. Bottom Photo: Innovest employees box up the presents to be delivered to the adopted families. Photo: Employee-decorated bags for Project Angel Heart. It has been more than 11 years since the first retirement plan excessive fee cases were filed by Schlichter Bogard & Denton, against some of the largest corporations in the United States. Prior to 2006, fee cases were usually directed at the financial institutions who provided retirement plan services, not at the plan sponsors. 2006 changed that perspective and put both mutual fund and recordkeeping fees in the spotlight. Most of the complaints filed since 2006 allege a breach of fiduciary duty in violation of ERISA. Several of these claims allege that either excessive fees were charged, imprudent or higher cost investments were offered, or service providers kept undisclosed revenue-sharing dollars as payment for their services. Other claims involved plan sponsors that came under fire for failing to take their plans out to bid on a scheduled basis to ensure that the services received and the fees paid for those services were competitive and in the best interests of participants. The trend of suing plans for excessive fees has escalated and over the past two years, more than 60 additional excessive fee cases, including 16 involving private university 403(b) plans, have been filed in District Courts across the country. In order to understand the flurry of activity in the courts, let’s look at some facts that may be partially responsible for the recent increase in excessive fee lawsuits. LARGE SETTLEMENTS = LARGE FEES – Several cases have been settled for tens of millions of dollars, and those large settlements resulted in significant attorney fees. Some examples are Nolte v. Cigna settled for $35 million in October 2015 Spano v. Boeing settled for $57 million in August of 2015 and Abbott v. Lockheed Martin settled for $62 million in July 2015, resulting in approximately $50 million in attorney fees1. The lure of big money has brought out local personal injury attorneys seeking new sources of revenue. A highly visible Denver based firm recently launched an advertising campaign encouraging 401(k) participants to call the firm to see if their retirement funds may have been mismanaged and determine if they may be entitled to compensation. It is important to note that most of the previous cases involved very large employers with multi-billion-dollar retirement plans, but recent activity suggests that these claims are moving down market and smaller plans are no longer immune from litigation. SUPREME COURT DECISION - Tibble v. Edison International was heard by the Supreme Court of the United States in May of 2015. Tibble is the only excessive fee case to come before the high court. continued on page 6 WINTER 2018 5 THE NEXT CHAPTER OF RETIREMENT PLAN EXCESSIVE FEE LAWSUITS Marianne Marvez, RPA Vice President, Director 1 2 The case centered around 17 retail share class mutual funds which were chosen by the trustees and placed in the trust in 2001. Subsequently, the trustees failed to monitor the funds and did not exchange the higher cost funds for lower priced institutional funds when they became available. The Supreme Court unanimously ruled in favor of the plaintiffs and held that the defendants had indeed breached their fiduciary duty under ERISA as addressed under the common law of trusts, which states that the plan fiduciaries not only have an obligation to exercise prudence in the selection of investment options, but have an additional duty to monitor those investment options ongoing, and remove any imprudent investment funds. Finding in favor of the plaintiffs reinforced the importance for plan sponsors of having a prudent process in place for the ongoing monitoring of the plan’s investment options. LOWERING FEES POST TIBBLE – Studies indicate that plan sponsors and advisors are understanding of the importance of monitoring fees, utilizing the most cost-efficient share classes available, reducing or eliminating revenue-sharing arrangements, implementing fee equalization and putting prudent monitoring processes in place. In certain cases, making these changes post Tibble has resulted in certain plans coming under additional scrutiny. One major corporation caught in this trap is Starwood Hotels & Resorts Worldwide Inc. Workers allege that the company cut their fees in half post Tibble, but had they done so six years earlier, they may have saved plan participants more than $20 million in fees over that period. PRIVATE UNIVERSITY 403(b) PLANS - Since the summer of 2016, 16 private universities have been sued for excessive fees. Brown, Columbia, Cornell, Duke, Emory, New York University, Johns Hopkins, Massachusetts Institute of Technology, Northwestern, Princeton, University of Chicago, University of Pennsylvania, University of Southern California, Vanderbilt, Washington and Yale. The only 403(b) case to be dismissed to date is the University of Pennsylvania. These cases are somewhat unique as 403(b) plans have a long history dating back to the early 1900s and until 2009 were not highly regulated. These types of plans typically have had multiple recordkeepers and duplicative investment options available from multiple investment providers. There is a growing trend towards consolidation and streamlining of recordkeeping services and investment options, especially for those 403(b) plans that are subject to ERISA. FUTURE TARGETS – Labor Unions may be the next group to be targeted by the tort lawyers. A suit was filed in the District Court of Central California on November 30th involving a 27,178 member, $1 billion dollar, union sponsored WINTER 2018 7 EMPLOYEE SPOTLIGHT BECCA ELLIS - MANAGER Becca is the manager of Marketing, supporting Business Development efforts for Innovest’s retirement plan, foundation and endowment and high net worth family practices. Her primary responsibilities are to further Innovest’s brand through proposals and presentations, social media, public relations, and events. WHERE IS YOUR HOMETOWN? A Colorado native, I was born and raised in Centennial. TELL US SOMETHING UNIQUE ABOUT YOU. My husband and I met in the same dorm hallway at Colorado State University (CSU) that my parents did 50 years earlier. Nine of our family members have attended CSU. Go Rams! WHAT DO YOU LIKE BEST ABOUT WORKING AT INNOVEST? I can’t say enough about the culture at Innovest. There is an emphasis on creating a best place to work through the type of people hired, an emphasis on being stewards, fun morale-building activities, community service opportunities, and including employees’ families in the Innovest family. HOW DO YOU GIVE BACK TO THE COMMUNITY? I enjoy participating in a number of service projects through my church, at Innovest, or my sister’s nonprofit, Awesome Kids Who Care. WHAT ARE YOUR HOBBIES AND INTERESTS? My main hobby right now is chasing around my 18-month-old toddler, Miles. He keeps me on my toes, and we love spending time outdoors on walks, at the zoo, or at the park. After his bedtime, you can find me exercising, watching Shark Tank, watching chick flicks, and catching up with friends. TELL US ABOUT YOUR FAMILY. My husband, Jason, and I have been married for seven years. We are blessed with a goofy and cuddly son, Miles. We are fortunate to have both sets of grandparents nearby for trips to the mountains, family dinners and holiday celebrations. 8 WINTER 2018 INNOVEST PRINCIPALS Richard Todd Wendy Dominguez Bill Fender Peter Mustian Scott Middleton Steven Karsh Garry Beaulieu Gordon Tewell Jerry Huggins Rick Rodgers Elizabeth Stemper 4643 S. Ulster Street | Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com EDITORS Whitney Wilkinson and Becca Ellis Past performance is no guarantee of future results. Investing involves the risk of loss. The material herein has been prepared for informational purposes only and is not intended to provide, and should not be relied on for investment, tax, accounting, or legal advice. No representation is being made as to whether any investment product, strategy, or security is suitable or appropriate for an investor’s particular circumstances. Assumptions, opinions, and forecasts herein constitute our judgment and are subject to change without notice. Innovest is an independent Registered Investment Adviser registered with the Securities and Exchange Commission. This document may also contain returns and valuations from outside sources. While the information contained herein is believed to be true and accurate, Innovest assumes no responsibility for the accuracy of these valuations or return methodologies. AROUND THE FIRM RECENT EVENTS Innovest was proud to be named one of the “Best Places to Work in Money Management” by Pensions and Investments for three of the last four years. Employees consistently identified Innovest’s stewardship culture as a reason for it being a great place to work. Consistently being ranked as a best place to work aided Innovest in attracting Innovest’s newest team member, Vice President Katherine Sauer, Ph.D. Katie is working primarily with our university and retirement plan clients, as well as serving as a key contributor on our Capital Markets Team. Prior to joining Innovest, she was the director of financial wellness, education and research at the University of Colorado System Administration Office. Additionally, she previously held faculty positions at Metropolitan State University of Denver and University of Southern Indiana. Katie earned her doctorate in economics from the University of Colorado at Boulder and holds a certificate in change leadership from Cornell University. Last fall, from August 29 to September 1, 2017, Innovest sponsored and presented at the Colorado Public Plan Coalition Annual Conference in Beaver Creek, CO. Innovest team members Richard Todd, Donna Patch, Jerry Huggins, Gordon Tewell, Scott Middleton, Jared Martin, Marianne SECTION 5 4643 S Ulster Street | Suite 1040 | Denver, CO 80237 303.694.1900 | innovestinc.com PORTFOLIO REVIEW 4Q17 Poudre Fire Authority New and Old Hire Money Purchase Pension Plans Gordon Tewell, CFA, CPC Peter Mustian Jared Martin, CFP® , AIF® Prepared by: T.J. Berge © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC INNOVEST AT A GLANCE Our History — Founded in 1996 by Richard Todd and Wendy Dominguez who lead the firm today — Independent, privately held and employee-owned — SEC Registered Investment Advisor — Currently more than $19 billion in firm assets* Our Professionals — 45 employees — Long-term relationships with top tier managers, vendors, and service providers — 94% employee retention rate — Demonstrated ability to hire and retain top quality talent Alignment of Interest with Our Clients — 97% client retention — Conflict-free, independent and objective advocate — A consistent investment philosophy since the firm’s inception — A client-centered, risk-focused, and performance-driven culture — Year-over-year revenue growth 19 of the last 20 years — 2017 Client Survey Results: Overall Client Satisfaction 4.7 (5-point Scale) Award-Winning Team — Innovest named one of the Best Places to Work in the nation, 2017, 2016, 2014, Pensions & Investments — PLANADVISER named Innovest Top 100 Retirement Plan Advisors, 2016 — Forbes ranked Innovest #3 Fastest Growing RIA Firms, 2016 — Recognized for 403(b) Plan Conversion Campaign, The Eddy Awards, 2016 — ColoradoBiz Finalist for the Colorado Top Company Award, 2015 — Top 100 Wealth Managers in the nation, 2015, Forbes — 2014 Retirement Plan Adviser Team of the Year, PLANSPONSOR — 19th Fastest Growing RIA in the nation, 2015, Financial Advisor Fiduciary Expertise — One of the first investment firms in the Rocky Mountain region rooted in prudent fiduciary principles — Accreditations through Investment Management Consultants Association and Center for Fiduciary Studies — Process-oriented approach with a focus on investment and spending policies — Expert Witness in nearly 60 cases involving fiduciary investment responsibilities — Numerous fiduciary certifications: AIF™, AIFA ™, CIMA® , CFA , QPFC, RF™, RPS Money Management Experience — 7 member Investment Committee with median experience of nearly 20 years — Partners have more than 25 years of experience managing large pension and foundation portfolios — Disciplined and opportunistic approach to forward-looking portfolio design — Experts in many investment strategies: active, passive, hedge funds, and other alternatives — Emphasis on downside risk quantification in developing portfolio design Client Access and Transparency — Direct access to Innovest’s investment and operational heads at all INNOVEST’S HISTORY WITH POUDRE FIRE 2013 • Signed contract between Poudre Fire Authority and Innovest Portfolio Solutions, LLC in the 1st quarter of 2013. • Provided first quarterly performance report 1Q13 and have provided reports each quarter thereafter. • Provided Fiduciary education. • Provided an Investment Policy statement which is reviewed and updated annually. • Analyzed the existing menu and made recommendation to streamline and improve the fund line-up. • Prepared investment mapping strategy for conversion of existing investment options • Participated in employee presentations on new plan design. • Developed Custom model portfolio with non-core mutual funds. • Presented searches for Commodities, Floating Rate Corporate Loans, Hedge Fund of Funds and High Yield products. • Prepared an RFI in order to benchmark proposed fees from ICMA-RC for administration and record keeping. • Prepared Participant Newsletters and continue to do so quarterly. 2014 – 2016 • Reviewed and assisted with ICMA contract negotiation. • Performed an asset allocation on the custom models. • Conducted a RFI on administration and recordkeeping pricing. • Signed a one year contract extension. 2014 – 2016 Continued • Developed and analyzed an employee survey on education goals for the next two years. • Replaced PIMCO Total Return with MetWest Total Return, replaced PIMCO Commodity with Credit Suisse Commodity and replaced Allianz NFJ Dividend Value with Diamond Hill Large Cap Value • Performed annual asset allocation study. • Selected Litman Gregory Masters Alternative Strategies to replace Absolute Strategies in the Liquid Low Correlated Hedge Fund basket. 2017 • Performed annual asset allocation study. • Implemented fee leveling • Performed fiduciary education • Moving to new lower cost and lower revenue generating share class options in multiple funds in October 2017: Diamond Hill Large Cap I (DHLRX) -> Diamond Hill Large Cap Y (DHLYX) John Hancock Disciplined Value Mid Cap I (JVMIX) -> John Hancock Disciplined Value Mid Cap R6 (JVMRX) Franklin Natural Resources Adv (FNRAX) -> Franklin Natural Resources R6 (FNCSX) VT PLUS Fund R5 -> VT PLUS Fund R10 John Hancock Global Absolute Return Strat. I (JHAIX) -> John Hancock Global Absolute Return Strat. R6 (JHASX) VT Vantagepoint Milestone Target Date Funds R5 RETIREMENT PLAN TOPICS AND TRENDS Behavioral economics is the study of why individuals make decisions that are not in their best interest or otherwise contradict economic logic. Specific tactics can be used to capitalize on participants’ behavioral tendencies, and drive both plan and participant success. Inertia • Much like the properties of physical objects, a person is much more likely to stay in their current situation than they are to make a change • Procrastination and decision paralysis can leave participants stranded in inopportune investment situations Framing • Communicating information in either a positive or negative way can have a powerful effect in driving participant outcomes • Framing that draws upon the principles of loss aversion can be impactful – participants will respond to the emotion that certain statements make them feel I want to participate in the retirement savings plan and give up __% of my pay. I want to participate in the retirement savings plan and save __% of my pay to plan for a successful retirement. VS. Plan features can solve for inertia. Auto-enroll Active Choice Auto-escalate Re-enrollment BEHAVIORAL ECONOMICS 4 RETIREMENT PLAN TOPICS AND TRENDS Anchoring • People tend to set value by imprints or anchors in their mind, therefore a value that is introduced is subsequently used as a mental reference point when making decisions • Initial exposure to a specific number influences future judgments about value Considerations • Enrollment process • Default deferral rates • Investment menu 0% 4% 7% 8% 13% 16% 20% Your peers are deferring 8% to their retirement plan on average. How are you doing in comparison to your peers? Option A Option B Elect you voluntary deferral rate to the retirement savings plan: 6% of pay 8% of pay 12% of pay 0% of pay 3% of pay 5% of pay Other % Other % BEHAVIORAL ECONOMICS 5 THIS PAGE LEFT INTENTIONALLY BLANK 6 © 2017 INNOVEST PORTFOLIO SOLUTIONS, LLC 5 POUDRE FIRE PLAN SUMMARY Current Structure Considerations and Next Steps Plan Provisions • Plan Type: 401(a) Money Purchase Pension Plan • Vesting Schedule: 100% Immediate • Eligibility Requirements: 18 years of age • Roth: No • Safe Harbor: No • Normal Retirement Age: Earlier of 20 years of service or 50 years of age Governance • IPS: Updated March 2017 • Governance Documents: • Plan Documents: Restated 2016 • Fiduciary Education: Conducted April 2016 • ICMA-RC Contract: July 2014, 5-year contract term • Innovest Contract: Renewed February 2016 Contributions • Contribution Rate (Mandatory/Voluntary): EE: Mandatory - 10%, ; ER: 8% : Voluntary - additional 7% • Match Provision: 457 contributions up to 3% matched into 401a • Enrollment: Participant-elected • Automatic Enrollment: No • Auto-Escalation: No Distributions • Loans: Yes (Maximum five loans) • Hardships: • Installments: Yes • In-Service Withdrawals: Yes, at age 50 Costs • Revenue Sharing: Rebated to participants • Fee Leveling: Yes; 0.122% on NH and 0.135% on OH with revenue rebated to participants • Annual Plan Fee Analysis: Last Updated September 2017 • Vendor Competitive Pricing Analysis: Pricing comparison as part of 2005 RFP • Other Fees: Managed Account, Loan Origination and Maintenance Fees • Share Class Review: Last Updated January 2017 Investments • Self Directed v. Trustee Directed: Self Directed • # of Investment Options: 23 • QDIA/DIA: Age-appropriate VantagePoint Milestone Target Date Fund • Re-enrollment: No • Managed Accounts: Yes • Self-Directed Brokerage Window: No • GMWB Option: VT Retirement IncomeAdvantage Education • Participant Education Plan: Yes • Participant Readiness Review: Yes 7Plan • Develop Annual Education Average Number Investment Options 19 Number Investment Options 23 Average Contribution Rate* 5.8% /6.9% Average Contribution Rate EE 10% / ER 8% Average Account Balance $113,539 Average Account Balance $329,465 *Contribution rate for low er compensated/higher compensated employees Source: PSCA's 58th Annual Survey of Profit Sharing and 401(k) Plans (2014) Litman Gregory Master Strat John Hancock GARS Real Estate New Hire Retirement Plan Statistics and Menu Coverage Plan Averages Menu Coverage Industry Averages* Fixed Income Domestic Equity Value Core Growth VantageTrust Cash Management VantageTrust PLUS Fund Large Diamond Hill Large Cap Vanguard 500 Index Fidelity Contrafund Nuveen Real Estate Secs MetWest Total Return Vanguard Total Bond Mkt Index Mid John Hancocl Disc Value Mid Cap Prudential Jennison Mid Cap Growth Specialty International Equity Columbia Seligman Emerging Markets Vanguard Extended Market Index Vanguard Inflation- Prot Secs Small Diamond Hill Small Cap American Beacon Stephens Small Cap Growth MFS Utilities Franklin Natural Resources Model Portfolios Only Funds Eaton Vance Floating Rate JP Morgan High Yield Bond Credit Suisse Commodity Return Blackstone Alt Strat. Oppenheimer Developing Markets Target Date/Allocation Funds Asset Allocation Asset Allocation Sep-2017 Dec-2017 ($) % ($) % Large Cap Equity Diamond Hill Large Cap 2,867,582 4.07 3,303,050 4.52 Vanguard 500 Index Adm 5,329,350 7.56 6,019,597 8.23 VT Fidelity Contrafund 8,398,997 11.91 8,707,791 11.91 Large Cap Equity 16,595,928 23.53 18,030,438 24.65 Mid Cap Equity John Hancock Disciplined Mid Cap Value 5,191,872 7.36 5,192,522 7.10 Vanguard Extended Market Idx 5,356,317 7.59 5,522,491 7.55 Prudential Jennison Mid Cap Growth 3,730,074 5.29 3,896,834 5.33 Mid Cap Equity 14,278,263 20.24 14,611,847 19.98 Small Cap Equity Diamond Hill Small Cap 1,188,403 1.68 1,620,263 2.22 American Beacon Stephens Small Cap Growth 536,988 0.76 634,162 0.87 Small Cap Equity 1,725,392 2.45 2,254,424 3.08 International Equity Harbor International 3,741,251 5.30 3,669,391 5.02 VT Vantagepoint Overseas Eq Ind 728,315 1.03 767,388 1.05 American Funds EuroPacific Gr 906,192 1.28 1,185,673 1.62 International Equity 5,375,758 7.62 5,622,453 7.69 Emerging Markets Oppenheimer Developing Markets 1,603,709 2.27 1,785,023 2.44 Emerging Markets 1,603,709 2.27 1,785,023 2.44 Specialty Nuveen Real Estate Secs 1,639,714 2.32 1,540,222 2.11 Franklin Natural Resources 534,367 0.76 482,945 0.66 Columbia Seligman Comm & Info 1,167,306 1.65 1,432,905 1.96 MFS Utilities A 1,253,061 1.78 1,280,509 1.75 Specialty Equity 4,594,447 6.51 4,736,581 6.48 Poudre Fire New Hire Total Fund 70,535,920 100.00 73,141,267 100.00 Guaranteed Minimum Withdrawal Benefit VT Retirement Income Advantage 4,250,527 6.03 4,030,055 5.51 Sep-2017 Dec-2017 ($) % ($) % Fixed Income Vanguard Total Bond Market Idx 1,108,023 1.57 1,286,119 1.76 Met West Total Return 2,616,666 3.71 2,486,723 3.40 Vanguard Inflation-Protected Secs 821,479 1.16 721,440 0.99 Vantage Trust Plus 7,967,229 11.30 7,828,289 10.70 VantageTrust Cash Management 63,219 0.09 45,073 0.06 Loans 884,070 1.25 829,919 1.13 Fixed Income 13,460,687 19.08 13,197,564 18.04 Funds Available in Model Portfolios Only Eaton Vance Floating Rate; I 18,630 0.03 19,703 0.03 JPMorgan High Yield Select 4,673 0.01 4,930 0.01 Crdt Suis Comm Rtn Strat 23,111 0.03 25,611 0.04 Blackstone Alt Multi Strategy 13,883 0.02 14,742 0.02 John Hancock GARS 13,916 0.02 14,779 0.02 Litman Gregory Masters Alt Strat 18,586 0.03 19,723 0.03 Total Funds in Models Only 92,800 0.13 99,488 0.14 Target Date Funds VantagePoint Milestone 2010 77,688 0.11 76,947 0.11 VantagePoint Milestone 2015 455,644 0.65 226,982 0.31 VantagePoint Milestone 2020 1,173,399 1.66 1,077,167 1.47 VantagePoint Milestone 2025 645,907 0.92 669,278 0.92 VantagePoint Milestone 2030 968,643 1.37 1,120,677 1.53 VantagePoint Milestone 2035 1,647,427 2.34 1,734,198 2.37 VantagePoint Milestone 2040 2,312,760 3.28 2,485,709 3.40 Average Number Investment Options 19 Number Investment Options 23 Average Contribution Rate* 5.8% / 6.6% Average Contribution Rate EE 10% / ER 8% Average Account Balance $113,539 Average Account Balance $774,866 *Contribution rate for low er compensated/higher compensated employees Source: PSCA's 58th Annual Survey of Profit Sharing and 401(k) Plans (2014) Oppenheimer Developing Markets Target Date/Allocation Funds Harbor International VT Vantagepoint Overseas Equity Model Portfolios Only Funds Eaton Vance Floating Rate JP Morgan High Yield Bond Blackstone Alt Strat. International Equity VT VantagePoint Milestone 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055 and MS Retirement Income; Conservative, Moderate & Aggressive Portfolios Credit Suisse Commodity Return American Funds EuroPac Guaranteed Min. Withdrawal Benefit Litman Gregory Master Strat John Hancock GARS Growth Vanguard Inflation- Prot Secs Small Diamond Hill Small Cap Emerging Markets Vanguard Extended Market Index MetWest Total Return Vanguard Total Bond Mkt Index Mid Prudential Jennison Mid Cap Growth John Hancock Disc Value Mid Cap Specialty Value Core American Beacon Stephens Small Cap Growth VT Retirement IncomeAdvantage MFS Utilities Columbia Seligman Growth Old Hire Retirement Plan Statistics and Menu Coverage Industry Averages* Plan Averages Asset Allocation Asset Allocation Sep-2017 Dec-2017 ($) % ($) % Large Cap Equity Diamond Hill Large Cap 363,191 3.33 348,374 3.20 Vanguard 500 Index Adm 1,668,798 15.30 1,555,603 14.30 VT Fidelity Contrafund 1,216,326 11.15 1,238,486 11.38 Large Cap Equity 3,248,316 29.77 3,142,463 28.88 Mid Cap Equity John Hancock Disciplined Mid Cap Value 835,353 7.66 845,518 7.77 Vanguard Extended Market Idx 539,829 4.95 541,784 4.98 Prudential Jennison Mid Cap Growth 117,140 1.07 118,564 1.09 Mid Cap Equity 1,492,321 13.68 1,505,866 13.84 International Equity Harbor International 311,250 2.85 302,622 2.78 VT Vantagepoint Overseas Eq Ind 153,190 1.40 156,656 1.44 American Funds EuroPacific Gr 28,930 0.27 30,143 0.28 International Equity 493,370 4.52 489,421 4.50 Emerging Markets Oppenheimer Developing Markets 64,641 0.59 67,936 0.62 Emerging Markets 64,641 0.59 67,936 0.62 Fixed Income Met West Total Return 2,616,666 23.98 2,486,723 22.86 Vanguard Total Bond Market Idx 38,306 0.35 38,407 0.35 Vanguard Inflation-Protected Secs 229,606 2.10 217,083 2.00 Vantage Trust Plus 2,372,287 21.74 2,436,753 22.40 VantageTrust Cash Management 33,736 0.31 41,739 0.38 Loans 32,614 0.30 32,177 0.30 Fixed Income 3,405,725 31.22 3,439,086 31.61 Poudre Fire Old Hire Total Fund 10,909,943 100.00 10,880,307 100.00 Sep-2017 Dec-2017 ($) % ($) % Specialty Funds Nuveen Real Estate Secs 33,020 0.30 33,550 0.31 MFS Utilities A 68,633 0.63 68,472 0.63 Columbia Seligman Comm & Info 36,248 0.33 36,198 0.33 Specialty Equity 137,901 1.26 138,220 1.27 Guaranteed Minimum Withdrawal Benefit VT Retirement Income Advantage 403,668 3.70 418,602 3.85 Target Date Funds VantagePoint Milestone 2010 484,854 4.44 476,399 4.38 VantagePoint Milestone 2015 584,033 5.35 595,275 5.47 VantagePoint Milestone 2020 30,285 0.28 31,152 0.29 Vantagepoint MS Retirement Inc 369,713 3.39 372,851 3.43 Target Date Funds 1,664,000 15.25 1,678,714 15.43 Poudre Fire Old Hire Total Fund 10,909,943 100.00 10,880,307 100.00 Asset Allocation Old Hire 11 Plan Benchmark* $ 70,535,920 Similarly Sized 0.54% 0.99% 0.59% N/A Provider Fee (in $) Fee (in %) Fee (in $) Fee (in %) Fee (in $) Fee (in %) Expense ratio retained by fund manager Fund Managers $ 333,274 0.47% $ 333,274 0.47% Net Investment Management Fees** $ - 0.00% $ 333,274 0.47% $ 333,274 0.47% Recordkeeping/Administration Fee ICMA-RC $ 47,964 0.07% $ 47,964 0.07% Investment Consultant Innovest $ 34,223 0.05% $ 34,223 0.05% Other Budgeted Items Other $ 3,867 0.01% $ 3,867 0.01% Total Budget $ - 0.00% $ 86,054 0.12% $ 86,054 0.12% Total Plan Expenses $ - 0.00% $ 419,328 0.59% $ 419,328 0.59% Managed Account Fees ICMA-RC $ 8,796 0.01% $ 8,796 0.01% Loan origination ($75 per application) ICMA-RC $ 975 0.00% $ 975 0.00% Loan maintenance ($50 annual fee) ICMA-RC $ 3,891 0.01% $ 3,891 0.01% Total Participant Paid Fees for Selected Services $ - 0.00% $ 13,662 0.02% $ 13,662 0.02% Employer Paid Employee Paid Total Poudre Fire New Hire Annual Fee Review Investment, Recordkeeping and Administrative Costs Plan assets as of 9/30/2017 Estimated Total Plan Expenses *The plan's estimated investment, recordkeeping and administrative costs of 0.54% as shown above, compare favorably to 401(k) Source data, a universe of 48 similarly sized 401(k) plans with an average investment, recordkeeping and administrative cost of 0.99%. **Excludes any revenue sharing and Investment Advisory Expenses credited back to participants who generated it. Revenue sharing is dependent on participants' individual investment options. Revenue generated by current investments is $153,554 (0.22%) 12 Plan Benchmark* $ 10,877,328 Similarly Sized 0.42% 0.99% 0.48% N/A Provider Fee (in $) Fee (in %) Fee (in $) Fee (in %) Fee (in $) Fee (in %) Expense ratio retained by fund manager Fund Managers $ 37,839 0.35% $ 37,839 0.35% Net Investment Management Fees** $ - 0.00% $ 37,839 0.35% $ 37,839 0.35% Recordkeeping/Administration Fee ICMA-RC $ 7,397 0.07% $ 7,397 0.07% Investment Consultant Innovest $ 5,277 0.05% $ 5,277 0.05% Other Budgeted Items Other $ 2,010 0.02% $ 2,010 0.02% Total Budget $ - 0.00% $ 14,684 0.14% $ 14,684 0.14% Total Plan Expenses $ - 0.00% $ 52,524 0.48% $ 52,524 0.48% Employer Paid Employee Paid Total Poudre Fire Old Hire Annual Fee Review Investment, Recordkeeping and Administrative Costs Plan assets as of 9/30/2017 Estimated Total Plan Expenses *The plan's estimated investment, recordkeeping and administrative costs of 0.42% as shown above, compare favorably to 401(k) Source data, a universe of 48 similarly sized 401(k) plans with an average investment, recordkeeping and administrative cost of 0.99%. **Excludes any revenue sharing and excess Investment Advisory Expenses credited back to participants who generated it. Revenue sharing is dependent on participants' individual investment options. Revenue generated by current investments is $29,485 (0.27%). 13 THIS PAGE LEFT INTENTIONALLY BLANK 14 THE MARKETS 2017 Investment Returns YTD 4Q17 1st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter 3.34% 0.39% 6.64% 4.23% 7.44% 14.65% 3.54% 21.83% 25.03% 37.28% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% S&P 500 MSCI EAFE MSCI EM Russell 2000 BBgBarc US Agg Bond 15 GLOBAL EQUITY INDICES Returns sourced from the S&P 500, S&P 500 Value, S&P 500 Growth, Russell Mid Cap, Russell Mid Cap Value, Russell Mid Cap Growth, Russell 2000, Russell 2000 Value, Russell 2000 Growth, MSCI EAFE, MSCI EAFE Value, MSCI EAFE Growth, and MSCI EM indices. Dark green indicates returns at or greater than 10%, light green indicates returns 0-4%, light pink indicates returns 0% to -5%, light dark red indicates returns down more than 10. Returns for time periods of 3 years or longer are annualized. Source: Morningstar Direct. 4th Quarter 2017 YTD as of December 31, 2017 1 Year Domestic Equity Domestic Equity Domestic Equity Value Core Growth Value Core Growth Value Core Growth Large 6.3% 6.6% 6.8% Large 15.4% 21.8% 27.4% Large 15.4% 21.8% 27.4% Mid 5.5% 6.1% 6.8% Mid 13.3% 18.5% 25.3% Mid 13.3% 18.5% 25.3% Small 2.0% 3.3% 4.6% Small 7.8% 14.6% 22.2% Small 7.8% 14.6% 22.2% Developed International Equity Developed International Equity Developed International Equity Value Core Growth Value Core Growth Value Core Growth 3.2% 4.2% 5.2% 21.4% 25.0% 28.9% 21.4% 25.0% 28.9% Emerging Markets Emerging Markets Emerging Markets 7.4% 37.3% 37.3% 3 Year Annualized 5 Years Annualized 10 Years Annualized Domestic Equity Domestic Equity Domestic Equity Value Core Growth Value Core Growth Value Core Growth Large 9.5% 11.4% 12.9% Large 14.2% 15.8% 17.0% Large 6.8% 8.5% 10.0% Mid 9.0% 9.6% 10.3% Mid 14.7% 15.0% 15.3% Mid 9.1% 9.1% 9.1% Small 9.5% 10.0% 10.3% Small 13.0% 14.1% 15.2% Small 8.2% 8.7% 9.2% Developed International Equity Developed International Equity Developed International Equity Value Core Growth Value Core Growth Value Core Growth 6.4% 7.8% 9.2% 7.0% 7.9% 8.8% 1.1% 1.9% 2.7% Emerging Markets Emerging Markets Emerging Markets 9.1% 4.4% 1.7% 16 DOMESTIC EQUITY SECTOR PERFORMANCE Returns are based off return data for the eleven sectors according to the S&P 500. Source: Morningstar Direct. 9.9% 6.5% 6.0% 8.6% 1.5% 6.1% 9.0% 6.9% 3.2% 3.6% 0.2% 0% 2% 4% 6% 8% 10% 12% Fourth Quarter 2017 Utilities Telecom Services Real Estate Materials Info Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 23.0% 13.5% -1.0% 22.2% 22.1% 21.0% 38.8% 23.8% 10.8% -1.3% 12.1% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 1 One Year (ending 12/31/2017) Utilities Telecom Services Real Estate Materials Info Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 17 FIXED INCOME AND ADDITIONAL ASSET CLASSES Returns sourced from the BBgBarc US Agg Bond, BBgBarc US Corporate High Yield, BBgBarc US Govt 1-3 Yr, Credit Suisse Leveraged Loan, BBgBarc Municipal, Bloomberg Commodity, Alerian MLP Infrastructure, HFRI Fund of Fund Index, and the S&P Developed Property indices. Dark green indicates returns at or greater than 4%, light green indicates returns 0-4%, light pink indicates returns 0% to -5%, light dark red indicates returns down more than 10%. Returns for time periods of 3 years or longer are annualized. Source: Morningstar Direct and InvestmentMetrics. Credit spreads source: Eaton Vance and Factset as of 12/31/17. Spread history measures past 15 years. All fixed-income spreads are measured in basis points and measure option-adjusted yield spread relative to comparable US Treasuries using daily data. Loan index spread represents the three-year discounted spread over LIBOR. Floating-Rate Loans represented by S&P/LSTA Leveraged Loan Index. High Yield represented by BofA Merrill Lynch US High Yield index. Dark green indicates current spreads greater than 1.25x the median, light green indicates spreads from 0.76 to 1.24x the median, and red indicates spreads at 0.75x the median or less. FIXED INCOME INDICES ADDITIONAL ASSET CLASSES Barclays Agg U.S. Bond HFRI Fund of Fund Index QTD YTD 1 Year 3 Year 5 Year 10 Year QTD YTD 1 Year 3 Year 5 Year 10 Year 0.4% 3.5% 3.5% 2.2% 2.1% 4.0% 2.0% 7.7% 7.7% 2.6% 4.0% 1.1% Barclays U.S. Government 1-3 Year Bloomberg Commodity QTD YTD 1 Year 3 Year 5 Year 10 Year QTD YTD 1 Year 3 Year 5 Year 10 Year -0.3% 0.4% 0.4% 0.6% 0.6% 1.5% 4.7% 1.7% 1.7% -5.0% -8.5% -6.8% Barclays Municipal Bond Alerian MLP Infrastructure QTD YTD 1 Year 3 Year 5 Year 10 Year QTD YTD 1 Year 3 Year 5 Year 10 Year 0.7% 5.4% 5.4% 3.0% 3.0% 4.5% -1.8% -8.8% -8.8% -9.6% 0.6% 6.8% Credit Suisse Leveraged Loan S&P Developed Property QTD YTD 1 Year 3 Year 5 Year 10 Year QTD YTD 1 Year 3 Year 5 Year 10 Year 1.2% 4.2% 4.2% 4.5% 4.3% 4.6% 3.9% 13.2% 13.2% 6.4% 8.0% 4.6% Barclays U.S. Corporate High Yield QTD YTD 1 Year 3 Year 5 Year 10 Year 0.5% 7.5% 7.5% 6.4% 5.8% 8.0% Credit Spreads Category Median Current High Low FR Corp Loans 540 405 2474 222 High Yield Corporate 480 358 2147 241 18 Criteria Organization People Philosophy & Process Style Consistency Asset Base Performance Expenses Overall Costs Exp Ratio (%) Median Exp Ratio (%) Ratio of Exp to Median (%) Diamond Hill Lg Cap;Y (DHLYX) 0.59 1.04 56.73 Vanguard 500 Index;Adm (VFIAX) 0.04 0.99 4.04 Fidelity Contrafund (FCNTX) 0.68 1.08 62.96 J Hancock III:DVMC;R6 (JVMRX) 0.76 1.09 69.72 Vanguard Ext Mk Id;Adm (VEXAX) 0.08 1.17 6.84 Pru Jenn Mid-Cap Gro;Q (PJGQX) 0.58 1.23 47.15 Diamond Hill Sm Cap;Y (DHSYX) 0.90 1.32 68.18 Am Beacon:Sm Cp Gro;Inst (STSIX) 1.09 1.38 78.99 Harbor:Internatl;Inst (HAINX) 0.72 1.16 62.07 Vantagepoint Overseas Equity Index R5 0.25 1.14 21.93 American Funds EuPc;R6 (RERGX) 0.50 1.16 43.10 Oppenheimer Dev Mkts;I (ODVIX) 0.88 1.41 62.41 Nuveen Real Est;R6 (FREGX) 0.87 1.24 70.16 Franklin Str:Nt Re;R6 (FNCSX) 0.56 1.29 43.41 Columbia:Sel C&Info;I2 (SCMIX) 0.97 1.37 70.80 MFS Utilities;R6 (MMUKX) 0.64 1.04 61.54 VT Retirement Income Advantage 1.72 1.72 100.00 Met West:Total Return;I (MWTIX) 0.44 0.74 59.46 Vanguard Tot Bd;Adm (VBTLX) 0.05 0.74 6.76 Vanguard Infl-Prot;Adm (VAIPX) 0.10 0.72 13.89 Vantage Trust Plus R10 0.58 0.73 79.45 Eaton Vance Flt Rt;Inst (EIBLX) 0.79 1.09 72.48 JPMorgan:High Yield;I (OHYFX) 0.75 1.04 72.11 Crdt Suis Cmdty Rtn;Inst (CRSOX) 0.79 1.40 56.43 J Hancock II:G Ab Rt;R6 (JHASX) 1.22 1.65 73.94 BlkStone:Alt Mlt-Str;I (BXMIX) 2.40 1.65 145.46 Litman Greg:Alt Str;Inst (MASFX) 1.47 1.65 89.09 VantagePoint Milestone 2030 R9 0.64 0.87 73.56 Legend For Overall Criteria No/Minimum Concerns Minor Concern Major Concern Under Review New No/Minimum Concerns Upgrade to Minor Concern Downgrade to Minor Concern New Major Concern Manager Score Factor Comments Pru Jenn Mid-Cap Gro;Q (PJGQX) Performance The fund's 3 and 5 year performance has been concerning, as performance has lagged both the benchmark and peer group, landing it in the bottom quartile for both periods. We will continue to closely monitor performance going forward and remain confident in the manager's ability to perform over the long term. Pru Jenn Mid-Cap Gro;Q (PJGQX) Overall . Manager Score Card The Expense Ratio and Median Expense Ratio for Hedge Fund of Funds and Private Equity Fund of Funds excludes underlying fund expenses; the expenses shown are only at the Fund of Funds level. 19 Manager Score Card Manager Score Factor Comments Am Beacon:Sm Cp Gro;Inst (STSIX) Performance Over the last few years the fund’s performance has lagged its peers due to its over allocation to energy and poor stock selection within the industrial and technology space. As a result, the fund has failed to outperform its median peer and benchmark over the trailing 3- and 5-year periods. Harbor:Internatl;Inst (HAINX) Performance The fund's performance has struggled recently over the 3 and 5 year periods, although we remain confident in the manager's ability to perform over the long term. We will continue to closely monitor the fund's performance going forward. Franklin Str:Nt Re;R6 (FNCSX) Performance Underperformance has resulted from stock selection within the energy and materials industries and an overweight position in metals and mining ompanies. MFS Utilities;R6 (MMUKX) Performance MFS Utilities has underperformed both their peer median group and the benchmark over a 3 and 5 year standpoint. The fund is not a "pure" utility fund, having a larger exposure in energy and the biggest detractors have been stock selection in electric power and an overweight to natural gas pipeline. Also, the portfolio's currency exposure had a negative impact on relative performance. JPMorgan:High Yield;I (OHYFX) Asset Base The assets withdrawn from the strategy are greater than 30% of fund AUM which merits increased monitoring and due diligence. We will continue to ensure the asset base is appropriate for the fund to pursue its stated goals. BlkStone:Alt Mlt-Str;I (BXMIX) Expenses Blackstone's size and reputation allows them to invest in more difficult to access Hedge Fund Managers that tend to have higher fee structures. Therefore, the overall fee is greater than the average liquid alternative fund. VantagePoint Milestone 2030 R9 Philosophy & Process Effective January 8 2018, the Vantagepoint Milestone Funds are reducing the weight of their multi-strategy sleeve across all vintages of the target date suite. This reduction in the multi-strategy is designed to be in line with ICMA-RC's long term capital market expectations. Innovest will continue to monitor this situation going forward. VantagePoint Milestone 2030 R9 Style Consistency Effective January 8 2018, the Vantagepoint Milestone Funds have expanded their definition of fixed income to include a possible addition of Stable Value into the portfolio. Innovest will continue to monitor this change going forward. The Expense Ratio and Median Expense Ratio for Hedge Fund of Funds and Private Equity Fund of Funds excludes underlying fund expenses; the expenses shown are only at the Fund of Funds level. 20 Last Quarter 2017 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception Inception Date Large Cap Equity Diamond Hill Large Cap 5.75 (50) 20.42 (8) 20.42 (8) 11.10 (3) 15.79 (4) N/A N/A 19.50 (21) 04/01/2016 S&P 500 Value 6.33 (38) 15.36 (59) 15.36 (59) 9.47 (23) 14.24 (27) 12.48 (26) 6.80 (45) 17.46 (46) IM U.S. Large Cap Value Equity (MF) Median 5.74 16.22 16.22 8.47 13.32 11.52 6.62 17.24 Vanguard 500 Index 6.64 (39) 21.79 (37) 21.79 (37) 11.38 (17) 15.75 (15) 13.72 (14) 8.49 (18) 8.64 (24) 10/01/2006 S&P 500 Index 6.64 (38) 21.83 (36) 21.83 (36) 11.41 (17) 15.79 (14) 13.76 (13) 8.50 (18) 8.65 (24) IM U.S. Large Cap Core Equity (MF) Median 6.41 20.85 20.85 10.11 14.52 12.45 7.57 7.78 VT Fidelity Contrafund 6.75 (47) 32.27 (25) 32.27 (25) 13.33 (22) 16.43 (31) 13.88 (31) 8.96 (39) 10.12 (29) 06/01/2006 S&P 500 Growth 6.80 (44) 27.44 (70) 27.44 (70) 12.86 (30) 17.00 (20) 14.81 (13) 9.99 (13) 10.46 (19) IM U.S. Large Cap Growth Equity (MF) Median 6.67 29.47 29.47 11.78 15.72 13.07 8.53 9.32 Mid Cap Equity John Hancock Disciplined Mid Cap Value 5.07 (57) 15.69 (23) 15.69 (23) 10.88 (5) 16.65 (1) N/A N/A 12.38 (2) 12/01/2013 Russell Midcap Value Index 5.50 (42) 13.34 (44) 13.34 (44) 9.00 (31) 14.68 (20) 12.76 (13) 9.10 (29) 10.92 (7) IM U.S. Mid Cap Value Equity (MF) Median 5.22 12.62 12.62 7.97 13.44 11.40 8.16 8.97 Vanguard Extended Market Idx 4.82 (41) 18.11 (32) 18.11 (32) 9.88 (40) 14.58 (26) 12.32 (24) 9.29 (28) 9.05 (28) 11/01/2006 S&P Completion Index 4.84 (40) 18.11 (32) 18.11 (32) 9.80 (42) 14.49 (28) 12.24 (26) 9.17 (32) 8.95 (29) IM U.S. SMID Cap Equity (MF) Median 4.31 14.30 14.30 9.33 13.54 11.09 8.51 8.09 Prudential Jennison Mid Cap Gro 5.38 (62) 22.88 (70) 22.88 (70) 7.80 (81) 12.01 (88) N/A N/A 8.82 (65) 12/01/2013 Russell Midcap Growth Index 6.81 (26) 25.27 (42) 25.27 (42) 10.30 (35) 15.30 (23) 12.78 (19) 9.10 (19) 11.32 (21) IM U.S. Mid Cap Growth Equity (MF) Median 5.70 24.57 24.57 9.58 13.54 11.30 7.60 9.36 Small Cap Equity Diamond Hill Small Cap 3.91 (36) 11.06 (32) 11.06 (32) 7.13 (69) 12.62 (46) N/A N/A 6.83 (50) 12/01/2013 Russell 2000 Value Index 2.05 (82) 7.84 (47) 7.84 (47) 9.55 (32) 13.01 (40) 10.84 (33) 8.17 (48) 8.51 (24) IM U.S. Small Cap Value Equity (MF) Median 3.12 7.52 7.52 8.05 12.28 10.39 8.13 6.80 American Beacon Stephens Small Cap Growth 4.55 (49) 19.42 (55) 19.42 (55) 7.67 (58) 11.55 (79) N/A N/A 4.96 (71) 12/01/2013 Russell 2000 Growth Index 4.59 (48) 22.17 (44) 22.17 (44) 10.28 (42) 15.21 (35) 12.34 (37) 9.19 (41) 9.44 (36) IM U.S. Small Cap Growth Equity (MF) Median 4.47 20.54 20.54 9.16 13.89 11.59 8.72 7.37 International Equity Harbor International 2.18 (100) 22.90 (61) 22.90 (61) 5.82 (95) 5.23 (95) 4.77 (59) 2.12 (20) 3.05 (25) 07/01/2008 MSCI EAFE Value Index (Net) 3.24 (73) 21.44 (83) 21.44 (83) 6.35 (62) 6.95 (28) 5.41 (40) 1.15 (43) 2.80 (30) IM International Large Cap Value Equity (MF) Median 3.63 23.93 23.93 6.56 6.42 5.18 0.79 2.40 VT Vantagepoint Overseas Eq Ind 3.80 (57) 25.31 (52) 25.31 (52) 7.72 (54) 7.47 (50) 5.90 (42) 1.87 (44) 3.09 (43) 11/01/2006 MSCI EAFE (Net) Index 4.23 (31) 25.03 (59) 25.03 (59) 7.80 (53) 7.90 (35) 6.04 (37) 1.94 (41) 3.26 (39) IM International Multi-Cap Core Equity (MF) Median 3.89 25.37 25.37 7.86 7.46 5.67 1.76 2.86 Table of Returns The expense ratio and median expense ratio for Hedge Fund of Funds and Private Equity Fund of Funds excludes underlying fund expenses; the expenses shown are at the fund of fund level. 21 Table of Returns Last Quarter 2017 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception Inception Date American Funds EuroPacific Gr 4.23 (37) 31.17 (16) 31.17 (16) 9.66 (10) 9.21 (5) 7.05 (10) N/A 6.88 (11) 12/01/2013 MSCI EAFE Growth Index (Net) 5.24 (4) 28.86 (44) 28.86 (44) 9.15 (24) 8.78 (11) 6.60 (25) 2.67 (46) 5.89 (25) IM International Large Cap Growth Equity (MF) Median 4.07 28.07 28.07 8.11 7.15 5.88 2.57 5.01 Emerging Markets Oppenheimer Developing Mkts 5.13 (77) 35.33 (51) 35.33 (51) 7.85 (60) 5.48 (30) N/A N/A 4.78 (61) 12/01/2013 MSCI Emerging Markets (Net) Index 7.44 (22) 37.28 (42) 37.28 (42) 9.10 (39) 4.35 (47) 2.56 (48) 1.68 (45) 5.66 (43) IM Emerging Markets Equity (MF) Median 6.35 35.34 35.34 8.56 4.18 2.45 1.39 5.36 Speciality Funds Nuveen Real Estate Secs 2.48 (41) 5.78 (40) 5.78 (40) 5.47 (33) N/A N/A N/A 11.32 (20) 12/01/2013 Wilshire U.S. REIT Index 1.70 (71) 4.18 (66) 4.18 (66) 5.21 (40) 9.35 (18) 10.47 (17) 7.28 (34) 11.22 (21) IM Real Estate Sector (MF) Median 2.13 5.10 5.10 4.89 8.44 9.61 6.82 10.37 Franklin Natural Resources 7.23 (51) N/A N/A N/A N/A N/A N/A N/A 05/01/2011 S&P North American Natural Res Sector Index 5.94 (68) 1.23 (72) 1.23 (72) 0.11 (54) 1.07 (34) -0.02 (21) -0.23 (7) -1.90 (27) IM Global Natural Resources (MF) Median 7.23 4.46 4.46 0.22 -1.18 -3.50 -3.91 -5.33 Columbia Seligman Comm & Info 3.03 (83) 34.43 (56) 34.43 (56) 19.47 (20) 21.72 (20) 15.56 (25) 12.55 (11) 13.62 (5) 09/01/2005 S&P 500 Information Technology 9.01 (9) 38.83 (27) 38.83 (27) 18.74 (29) 20.90 (32) 17.20 (11) 11.90 (22) 11.74 (36) IM Science & Technology Sector (MF) Median 6.03 34.99 34.99 16.87 18.89 14.30 10.71 11.12 MFS Utilities A (MMUKX) 0.34 (53) 15.13 (19) 15.13 (19) 3.24 (81) 8.44 (71) N/A N/A 5.84 (83) 12/01/2013 S&P 500 Utilities 0.21 (64) 12.11 (58) 12.11 (58) 7.45 (9) 12.62 (8) 11.92 (7) 6.31 (20) 12.45 (5) IM Utility Sector (MF) Median 0.38 12.88 12.88 5.35 10.68 10.47 5.45 8.97 MFS Utilities;A (MMUFX) 0.20 (64) 14.68 (28) 14.68 (28) 2.88 (92) 8.05 (82) 8.58 (72) 5.31 (54) 8.93 (7) 09/01/2005 S&P 500 Utilities 0.21 (64) 12.11 (58) 12.11 (58) 7.45 (9) 12.62 (8) 11.92 (7) 6.31 (20) 8.12 (45) IM Utility Sector (MF) Median 0.38 12.88 12.88 5.35 10.68 10.47 5.45 8.03 Guaranteed Minimum Withdrawal Benefit VT Retirement Income Advantage 3.20 13.09 13.09 5.62 7.18 6.49 N/A 7.49 08/01/2010 VT Retirement Income Advantage Benchmark 3.63 14.07 14.07 7.20 8.74 7.96 N/A N/A Fixed Income Met West Total Return 0.38 (41) 3.43 (58) 3.43 (58) 2.05 (59) 2.51 (16) 4.19 (5) 5.59 (1) 1.72 (53) 04/01/2015 Bloomberg Barclays U.S. Aggregate Index 0.39 (40) 3.54 (52) 3.54 (52) 2.24 (43) 2.10 (39) 3.20 (49) 4.01 (48) 1.85 (42) IM U.S. Broad Market Core Fixed Income (MF) Median 0.35 3.58 3.58 2.16 1.96 3.19 3.97 1.75 Vanguard Total Bond Market Idx 0.40 (36) 3.56 (52) 3.56 (52) 2.18 (49) 2.02 (46) 3.12 (57) 3.95 (52) 4.22 (43) 11/01/2006 Bloomberg Barclays U.S. Aggregate Index 0.39 (40) 3.54 (52) 3.54 (52) 2.24 (43) 2.10 (39) 3.20 (49) 4.01 (48) 4.26 (41) IM U.S. Broad Market Core Fixed Income (MF) Median 0.35 3.58 3.58 2.16 1.96 3.19 3.97 4.12 The expense ratio and median expense ratio for Hedge Fund of Funds and Private Equity Fund of Funds excludes underlying fund expenses; the expenses shown are at the fund of fund level. 22 Table of Returns Last Quarter 2017 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception Inception Date Vanguard Inflation-Protected Secs 1.19 (43) 2.91 (35) 2.91 (35) 1.91 (32) 0.06 (29) 2.82 (11) N/A 3.24 (11) 11/01/2009 Bloomberg Barclays U.S. TIPS Index 1.26 (31) 3.01 (30) 3.01 (30) 2.05 (24) 0.13 (20) 2.92 (6) 3.53 (9) 3.33 (7) IM U.S. TIPS (MF) Median 1.11 2.63 2.63 1.60 -0.27 2.18 2.85 2.64 Vantage Trust Plus 0.62 (1) 2.43 (1) 2.43 (1) 2.36 (1) 2.41 (1) 2.65 (1) 3.17 (5) 3.55 (1) 09/01/2005 Ryan 3 Yr GIC Master Index 0.42 (93) 1.60 (100) 1.60 (100) 1.38 (100) 1.25 (100) 1.45 (100) 2.29 (72) 2.61 (97) IM U.S. GIC/Stable Value (SA+CF) Median 0.49 1.86 1.86 1.88 1.82 2.10 2.56 2.91 Funds Available in Model Portfolios Only Eaton Vance Floating Rate; I 1.10 (33) 4.47 (13) 4.47 (13) 4.50 (19) 3.78 (23) 4.22 (25) 4.10 (21) 3.58 (16) 12/01/2013 CSFB Leveraged Loan 1.17 (26) 4.26 (18) 4.26 (18) 4.49 (22) 4.33 (3) 4.67 (6) 4.56 (3) 3.93 (4) Loan Participation Mutual Funds Median 1.01 3.53 3.53 3.84 3.26 3.78 3.72 2.99 JPMorgan High Yield Select 0.32 (62) 6.65 (49) 6.65 (49) 5.01 (51) 4.92 (41) 5.95 (46) 7.05 (27) 4.45 (41) 12/01/2013 Bloomberg Barclays U.S. Corporate High Yield 0.47 (48) 7.50 (24) 7.50 (24) 6.35 (11) 5.78 (12) 7.04 (9) 8.03 (4) 5.39 (11) IM U.S. High Yield Bonds (MF) Median 0.44 6.63 6.63 5.02 4.71 5.88 6.43 4.22 Crdt Suis Comm Rtn Strat 4.42 1.74 1.74 -4.97 -8.47 -8.11 -6.67 -3.26 04/01/2015 Bloomberg Commodity Index Total Return 4.71 1.70 1.70 -5.04 -8.45 -8.15 -6.83 -3.35 Blackstone Alt Multi Strategy 0.22 (85) 7.19 (32) 7.19 (32) 4.00 (24) N/A N/A N/A 3.51 (30) 07/01/2014 HFRI Fund of Fund Liquidity Adj. 1.89 (35) 7.20 (32) 7.20 (32) 2.09 (54) 3.48 (36) 2.15 (59) 0.58 (43) 2.07 (53) IM Absolute Return (MF) Median 0.95 5.05 5.05 2.38 2.46 2.51 0.01 2.26 Litman Gregory Masters Alt Strat 0.67 (61) 4.51 (54) 4.51 (54) 3.48 (34) 4.07 (26) N/A N/A 5.30 (12) 10/01/2011 HFRI Fund of Fund Liquidity Adj. 1.89 (35) 7.20 (32) 7.20 (32) 2.09 (54) 3.48 (36) 2.15 (59) 0.58 (43) 3.36 (48) IM Absolute Return (MF) Median 0.95 5.05 5.05 2.38 2.46 2.51 0.01 3.24 John Hancock GARS 1.84 (69) 3.94 (83) 3.94 (83) 1.06 (77) 2.41 (62) N/A N/A N/A 01/01/2012 HFRI Macro: Discretionary Thematic Index -1.61 (98) -0.27 (92) -0.27 (92) 0.11 (89) -0.08 (90) -0.52 (94) 0.24 (99) 0.49 (93) IM Alternative Global Macro (MF) Median 2.95 10.58 10.58 3.17 3.19 3.47 3.08 4.16 Model Portfolios Poudre New Hire Conservative Model 1.82 9.08 9.08 4.39 4.65 5.04 N/A 4.22 01/01/2014 Poudre Conservative Custom Benchmark 1.94 8.61 8.61 4.32 4.83 4.93 4.56 4.39 Poudre New Hire Moderate Model 2.97 13.89 13.89 5.93 7.00 6.67 N/A 5.35 01/01/2014 Poudre Moderate Custom Benchmark 3.26 13.13 13.13 6.01 7.39 6.76 5.11 5.68 Poudre New Hire Aggressie Model 4.49 20.92 20.92 7.66 9.42 8.26 N/A 6.62 01/01/2014 Poudre Aggressive Custom Benchmark 4.96 19.51 19.51 7.97 10.01 8.50 5.40 7.18 The expense ratio and median expense ratio for Hedge Fund of Funds and Private Equity Fund of Funds excludes underlying fund expenses; the expenses shown are at the fund of fund level. 23 Table of Returns Last Quarter 2017 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception Inception Date Target Date Funds VantagePoint Milestone 2010 2.11 (76) 9.51 (78) 9.51 (78) 4.53 (74) 5.70 (64) 5.61 (66) 4.46 (35) 5.19 (24) 11/01/2005 Vantagept Target 2010 Idx 2.35 (34) 9.39 (80) 9.39 (80) 5.67 (7) 7.49 (1) 7.29 (1) 5.95 (1) 6.40 (1) IM Mixed-Asset Target 2010 (MF) Median 2.23 10.24 10.24 4.91 5.93 5.89 4.11 4.68 VantagePoint Milestone 2015 2.40 (76) 10.85 (67) 10.85 (67) 5.02 (71) 6.54 (62) 6.20 (68) 4.58 (47) 5.53 (N/A) 11/01/2005 Vantagept Target 2015 Idx 2.73 (41) 10.79 (70) 10.79 (70) 6.38 (7) 8.55 (1) 8.14 (1) 6.10 (1) 6.74 (N/A) IM Mixed-Asset Target 2015 (MF) Median 2.65 11.40 11.40 5.52 6.76 6.50 4.45 N/A VantagePoint Milestone 2020 2.68 (72) 12.37 (55) 12.37 (55) 5.58 (55) 7.51 (34) 6.88 (37) 4.82 (30) 5.85 (20) 11/01/2005 Vantagept Target 2020 Idx 3.14 (38) 12.32 (56) 12.32 (56) 7.12 (3) 9.70 (1) 9.05 (1) 6.51 (1) 7.18 (1) IM Mixed-Asset Target 2020 (MF) Median 3.00 12.63 12.63 5.77 6.74 6.40 4.45 5.16 VantagePoint Milestone 2025 3.09 (73) 13.92 (66) 13.92 (66) 6.19 (66) 8.47 (33) 7.61 (45) 5.13 (41) 6.22 (37) 11/01/2005 Vantagept Target 2025 Idx 3.61 (35) 14.05 (64) 14.05 (64) 7.94 (1) 10.90 (1) 10.00 (1) 6.88 (1) 7.57 (1) IM Mixed-Asset Target 2025 (MF) Median 3.46 14.95 14.95 6.54 7.93 7.40 4.96 5.91 VantagePoint Milestone 2030 3.54 (80) 15.67 (69) 15.67 (69) 6.82 (64) 9.38 (34) 8.30 (31) 5.44 (30) 6.55 (18) 11/01/2005 Vantagept Target 2030 Idx 4.07 (43) 15.72 (69) 15.72 (69) 8.74 (1) 12.08 (1) 10.92 (1) 7.28 (1) 7.97 (1) IM Mixed-Asset Target 2030 (MF) Median 4.01 16.91 16.91 7.19 8.78 7.83 4.95 5.89 VantagePoint Milestone 2035 3.95 (84) 17.52 (75) 17.52 (75) 7.42 (69) 10.26 (35) 8.96 (32) 5.78 (32) 6.90 (20) 11/01/2005 Vantagept Target 2035 Idx 4.53 (41) 17.48 (75) 17.48 (75) 9.56 (1) 13.33 (1) 11.89 (1) 7.72 (1) 8.37 (1) IM Mixed-Asset Target 2035 (MF) Median 4.44 18.72 18.72 7.96 9.66 8.50 5.45 6.40 VantagePoint Milestone 2040 4.39 (82) 19.07 (63) 19.07 (63) 7.92 (57) 10.98 (22) 9.53 (20) 6.14 (18) 7.21 (13) 11/01/2005 Vantagept Target 2040 Idx 5.02 (25) 19.19 (60) 19.19 (60) 9.79 (3) 13.67 (1) 11.87 (1) 7.00 (3) 7.88 (2) IM Mixed-Asset Target 2040 (MF) Median 4.74 19.71 19.71 8.11 10.08 8.67 5.27 6.33 Vantagepoint Milestone 2045 4.75 (65) 20.36 (59) 20.36 (59) 8.31 (64) 11.33 (17) 9.77 (21) N/A 10.60 (20) 12/01/2010 Vantagepoint Target 2045 Idx 5.37 (7) 20.38 (58) 20.38 (58) 10.37 (1) 14.00 (1) 12.09 (1) N/A 13.13 (1) IM Mixed-Asset Target 2045 (MF) Median 4.85 20.65 20.65 8.65 10.52 9.05 5.73 9.92 Vantagepoint Milestone 2050 4.86 (65) 20.47 (59) 20.47 (59) 8.41 (56) 11.27 (22) N/A N/A 11.49 (22) 12/01/2012 Vantagepoint Target 2050 Index 5.45 (12) 20.64 (53) 20.64 (53) 10.48 (1) N/A N/A N/A N/A IM Mixed-Asset Target 2050 (MF) Median 4.99 20.75 20.75 8.52 10.61 9.02 5.52 10.83 Vantagepoint MS Retirement Inc 2.02 (59) 8.76 (56) 8.76 (56) 4.24 (48) 4.46 (45) 4.54 (62) 3.91 (63) 4.49 (55) 11/01/2005 Vantagept Target Inc Ind 2.17 (53) 8.74 (56) 8.74 (56) 5.34 (9) 6.00 (9) 5.98 (12) 5.23 (6) 5.63 (5) IM Mixed-Asset Target Today (MF) Median 2.24 9.11 9.11 4.17 4.34 4.75 4.34 4.56 The expense ratio and median expense ratio for Hedge Fund of Funds and Private Equity Fund of Funds excludes underlying fund expenses; the expenses shown are at the fund of fund level. 24 4643 S Ulster Street | Suite 1040 | Denver, CO 80237 303.694.1900 | innovestinc.com PRODUCT ANALYSIS 4Q17 Poudre Fire Authority New and Old Hire Money Purchase Pension Plans Gordon Tewell, CFA, CPC Peter Mustian Jared Martin, CFP® , AIF® FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Large Cap Value Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The Fund seeks businesses with sustainable competitive advantages, conservative balance sheets, and management with an ownership mentality. Investments are sold when the stock price reaches management’s estimate of intrinsic value, the estimate of intrinsic value is revised such that there is no longer a discount to intrinsic value, a holding reaches the stated maximum position size, or to raise proceeds for a more attractive opportunity. Innovest Assessment: We expect the strategy to outperform following periods of extreme valuations, following which the market often over corrects, providing opportunities to invest in companies trading significantly below the fund’s estimate of intrinsic value. The strategy may underperform during periods when market psychology is short-term focused and volatile, or when investors do not care about valuation. -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Diamond Hill Lg Cap 5.72 (51) 20.30 (9) 20.30 (9) 10.99 (4) 15.64 (5) 13.25 (10) 8.54 (7) ˜ S&P 500 Value 6.33 (38) 15.36 (59) 15.36 (59) 9.47 (23) 14.24 (27) 12.48 (26) 6.80 (45) Median 5.74 16.22 16.22 8.47 13.32 11.52 6.62 3.0 6.0 9.0 SECTOR ALLOCATION STYLE MAP (02/01/05 - 12/31/17) SECTOR PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS UP/DOWN CAPTURE (01/01/13 - 12/31/17) TOTAL SECTOR ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Abbott Laboratories 4.28 0.00 7.47 Citigroup Inc 4.19 1.77 2.74 Discover Financial Services 3.76 0.25 19.93 JPMorgan Chase & Co 3.67 3.33 12.61 United Technologies Corp 3.51 0.85 10.55 Microsoft Corp 3.28 0.00 15.42 Alphabet Inc 3.20 0.00 8.18 Morgan Stanley 3.07 0.66 9.47 Philip Morris International Inc 2.99 0.74 -3.85 Pfizer Inc 2.91 1.05 2.38 % of Portfolio 34.86 8.65 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $152,253 $133,561 Median Mkt. Cap $M $46,316 $20,284 Price/Earnings ratio 20.85 20.50 Price/Book ratio 3.00 2.42 5 Yr. EPS Growth Rate (%) 10.16 4.90 Current Yield (%) 1.84 2.41 Beta (5 Years, Monthly) 1.05 1.00 % in Int'l Securities 2.28 4.46 Active Share 80.91 N/A Number of Stocks 50 391 Diamond Hill Lg Cap S&P 500 Value 0.0 10.0 20.0 30.0 40.0 Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0 0.0 0.0 3.8 12.3 8.3 14.1 28.6 2.1 11.6 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Large Cap Core Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The core of this Fund's strategy is simple: It buys and holds the stocks that make up the S&P 500 Index. The Fund attempts to add value on the margins by opportunistically buying futures contracts, among other techniques, and actively tries to reduce trading costs. -4.0 2.0 8.0 14.0 20.0 26.0 32.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vanguard 500 Index 6.64 (39) 21.79 (37) 21.79 (37) 11.38 (17) 15.75 (15) 13.72 (14) 8.49 (18) ˜ S&P 500 Index 6.64 (38) 21.83 (36) 21.83 (36) 11.41 (17) 15.79 (14) 13.76 (13) 8.50 (18) Median 6.41 20.85 20.85 10.11 14.52 12.45 7.57 6.0 9.0 12.0 15.0 18.0 Return (%) 4.0 6.0 8.0 10.0 12.0 14.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Vanguard 500 Index 15.75 9.41 ˜ S&P 500 Index 15.79 9.41 ¾ Median 14.52 9.63 Fund Family : Vanguard Group Inc Fund Inception : 11/13/2000 Portfolio Manager : SECTOR ALLOCATION STYLE MAP (12/01/00 - 12/31/17) SECTOR PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS UP/DOWN CAPTURE (01/01/13 - 12/31/17) TOTAL SECTOR ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Apple Inc 3.82 3.81 10.20 Microsoft Corp 2.88 2.89 15.42 Amazon.com Inc 2.04 2.05 21.65 Facebook Inc 1.83 1.84 3.27 JPMorgan Chase & Co 1.64 1.63 12.61 Johnson & Johnson 1.64 1.64 8.12 Berkshire Hathaway Inc 1.59 1.67 8.13 Exxon Mobil Corp 1.55 1.55 2.97 Alphabet Inc 1.38 1.38 9.10 Alphabet Inc 1.37 1.38 8.18 % of Portfolio 19.74 19.84 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $193,937 $194,088 Median Mkt. Cap $M $22,067 $22,214 Price/Earnings ratio 23.28 23.31 Price/Book ratio 3.41 3.41 5 Yr. EPS Growth Rate (%) 13.46 13.47 Current Yield (%) 1.88 1.88 Beta (5 Years, Monthly) 1.00 1.00 % in Int'l Securities 3.56 3.56 Active Share 0.39 N/A Number of Stocks 508 505 Vanguard 500 Index S&P 500 Index 0.0 8.0 16.0 24.0 32.0 Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 3.1 2.0 3.0 3.0 23.9 10.1 14.2 14.7 6.0 8.1 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Large Cap Growth Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy Seeks capital appreciation. The fund's mandate is very flexible, giving fund manager Will Danoff the ability to invest in companies across all market capitalizations and investment styles. Will's investment philosophy is rooted in the belief that share prices of companies follow the direction of their earnings and businesses that are growing their earnings the fastest tend to outperform relative to other firms. By utilizing Fidelity's extensive research capabilities and frequent interaction with company management teams, Will seeks to identify firms that have the potential to be among the best of their breed and are expected to deliver the fastest earnings growth. While the fund mainly focuses on U.S. stocks, it does have the flexibility to consider opportunities in foreign companies. Innovest's Assessment The fund will tend to outperform in market driven rallies, focusing on earnings growth for large proven companies, rather than lower quality, undiscovered names. The fund will underperform when strong fundamental valuation techniques are rewarded and due to its high asset base, will lag in strong growth rallies in mid and small cap sectors. The fund also will perform relative to its non sector and index weighting style, including perpetual overweights in international and financials. -4.0 4.0 12.0 20.0 28.0 36.0 44.0 Return Last Quarter Year To Date 1 Year 3 Years 5 SECTOR ALLOCATION STYLE MAP (01/01/90 - 12/31/17) SECTOR PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS UP/DOWN CAPTURE (01/01/13 - 12/31/17) TOTAL SECTOR ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Facebook Inc 7.42 3.60 3.27 Berkshire Hathaway Inc 5.43 0.00 8.32 Amazon.com Inc 5.24 4.00 21.65 Alphabet Inc 3.68 2.69 8.18 Apple Inc 3.51 7.44 10.20 Alphabet Inc 3.37 2.70 9.10 Microsoft Corp 3.19 5.65 15.42 Unitedhealth Group Inc 2.90 1.83 12.94 Visa Inc 2.63 1.77 8.53 salesforce.com Inc 2.33 0.60 9.43 % of Portfolio 39.70 30.28 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $260,190 $251,777 Median Mkt. Cap $M $24,648 $25,178 Price/Earnings ratio 29.16 26.69 Price/Book ratio 4.23 5.47 5 Yr. EPS Growth Rate (%) 31.27 21.52 Current Yield (%) 0.79 1.38 Beta (5 Years, Monthly) 0.93 1.00 % in Int'l Securities 8.05 2.71 Active Share 53.16 N/A Number of Stocks 280 290 VT Fidelity Contrafund S&P 500 Growth 0.0 15.0 30.0 45.0 60.0 Utilities Telecommunication Services Real Estate Other Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0 0.5 0.2 0.0 2.0 44.4 6.2 9.7 18.4 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Mid Cap Value Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: John Hancock Disciplined Mid Cap Value is fundamental, bottom-up value strategy. Their value discipline is rooted in three "fundamental truths": 1. Low valuation stocks outperform high valuation stocks. 2. Companies with strong fundamentals (high returns on invested capital) outperform companies with poor. 3. Stocks with positive business momentum (improving trends/rising earnings) outperform stocks with negative momentum. These characteristics are analyzed using a bottom-up blend of qualitative and quantitative inputs to build a portfolio which they believe will outperform with the ultimate goal to "win by not losing". Innovest's Assessment: The strategy should be expected to outperform in market environments with an upward bias that are broadly based and balanced in terms of style. It should also outperform in periods marked by a correction from prior market imbalances and recovery from profound valuation dislocations. It should underperform in a highly speculative market in which valuation and fundamental investment principles are disregarded. As the strategy is perpetually underweight utilities, the strategy should be expected perform accordingly. -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years SECTOR ALLOCATION STYLE MAP (07/01/97 - 12/31/17) SECTOR PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS UP/DOWN CAPTURE (01/01/13 - 12/31/17) TOTAL SECTOR ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Discover Financial Services 1.79 0.70 19.93 Raymond James Fin. Inc. 1.66 0.21 5.89 Amdocs Ltd 1.57 0.23 2.15 SunTrust Banks Inc. 1.56 0.77 8.77 Boston Properties Inc 1.54 0.42 6.48 Reinsurance Group of Amer. 1.49 0.25 12.12 DXC Technology Company 1.47 0.00 10.72 Harris Corp 1.47 0.31 8.01 Diamondback Energy Inc 1.46 0.24 28.88 Arrow Electronics Inc 1.46 0.18 0.00 % of Portfolio 15.47 3.31 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $17,732 $14,254 Median Mkt. Cap $M $13,243 $7,407 Price/Earnings ratio 21.12 20.69 Price/Book ratio 2.43 2.14 5 Yr. EPS Growth Rate (%) 11.86 10.00 Current Yield (%) 1.41 2.17 Beta (5 Years, Monthly) 1.02 1.00 % in Int'l Securities 8.95 5.52 Active Share 76.62 N/A Number of Stocks 131 584 JH Disc. MCV Russell MCV Idx 0.0 8.0 16.0 24.0 32.0 Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 6.2 0.0 7.0 6.2 20.4 17.0 5.1 24.7 8.2 0.6 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. SMID Cap Core Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: This fund has tracked the S&P Completion Index since September 2005. The fund picks up (in terms of market capitalization) where the venerable S&P 500 leaves off. Thus, it mainly consists of mid- and small-cap stocks. Like other S&P indexes, this one screens out companies that don't produce consistent profits. That could limit the price volatility normally associated with smaller-cap stocks. -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vanguard Ext Mkt Idx 4.77 (33) 17.94 (10) 17.94 (10) 9.74 (40) 14.43 (23) 12.17 (23) 9.13 (33) ˜ S&P Completion Idx 4.84 (32) 18.11 (9) 18.11 (9) 9.80 (39) 14.49 (21) 12.24 (21) 9.17 (31) Median 3.71 12.90 12.90 9.21 13.41 10.94 8.37 0.0 4.0 8.0 12.0 16.0 20.0 Return (%) 6.0 9.0 12.0 15.0 18.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Vanguard Ext Mkt Idx 14.43 12.04 ˜ S&P Completion Idx 14.49 12.02 ¾ Median 13.41 12.92 Fund Family : Vanguard Group TOP 10 HOLDINGS STYLE MAP (<StartDate:MM/dd/yy> - 12/31/17) ASSET ALLOCATION SECTOR ALLOCATION PORTFOLIO CHARACTERISTICS UP/DOWN CAPTURE (<StartDate:MM/dd/yy> - 12/31/17) Tesla Inc ORD 0.99 % Las Vegas Sands Corp ORD 0.50 % Liberty Global PLC ORD 0.50 % ServiceNow Inc ORD 0.39 % T-Mobile US Inc ORD 0.38 % SBA Communications Corp ORD 0.35 % Biomarin Pharmaceutical Inc ORD 0.34 % First Republic Bank ORD 0.33 % MGM Resorts International ORD 0.33 % Markel Corp ORD 0.29 % Total Securities 3,231 Avg. Market Cap $6,061 Million P/E 29.64 P/B 4.69 Div. Yield 2.56% Annual EPS 17.77 5Yr EPS 12.55 3Yr EPS Growth 12.23 3 Years 5 Years vs. S&P Completion Index Beta 1.00 1.00 Sector Weights As of 06/30/2017 Vanguard Ext Mkt Idx S&P Completion Index 0.0 6.0 12.0 18.0 24.0 30.0 36.0 Other Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0% 25.0% 50.0% 75.0% 100.0% 125.0% Convertibles Fixed Income Other Cash Equities 0.0% 0.1% 0.1% 3.1% 96.8% Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Vanguard Ext Mkt Idx 50.0 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Mid Cap Growth Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: As with all Jennison strategies, the Prudential Jennison Mid Cap Growth fund employs a research intensive growth strategy that aims to invest in companies with relatively predictable revenue streams coming from a strong customer base, contracts in place, or secular industry growth. They look for high quality components including: strong balance sheets, strong R&D capabilities, and defensible branding. The team does not focus on valuation and looks at earnings indicators such as high P/E ratios, differing from its peers. Mullman also leverages Jennison's "cross-sharing" approach by going beyond his seven member team and accessing the firm's 21 other analysts for additional stock ideas. Innovest's Assessment: Jennison’s Mid Cap Growth portfolio should outperform in periods of average market earnings growth, when above-average earnings growth for their portfolio is more achievable and recognizable and when investors have historically been more willing to pay for both above-average and longer- duration growth. The strategy should be expected to underperform in momentum driven markets and when general market earnings growth exceeds historical averages. -4.0 4.0 12.0 20.0 28.0 36.0 44.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years SECTOR ALLOCATION STYLE MAP (01/01/97 - 12/31/17) SECTOR PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS UP/DOWN CAPTURE (01/01/13 - 12/31/17) TOTAL SECTOR ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) SBA Communications Corp 3.33 0.63 13.41 Dollar Tree Inc 2.95 0.76 23.60 Hilton Worldwide Holdings Inc 2.40 0.49 15.22 Analog Devices Inc. 2.21 1.05 3.86 Red Hat Inc 2.20 0.69 8.33 AMETEK Inc 2.19 0.09 9.88 Roper Technologies Inc 2.17 0.79 6.56 Affiliated Managers Group Inc. 1.97 0.00 8.24 Vantiv Inc 1.91 0.38 4.37 ServiceNow Inc 1.84 0.70 10.94 % of Portfolio 23.17 5.58 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $17,332 $15,444 Median Mkt. Cap $M $14,156 $8,585 Price/Earnings ratio 29.55 28.98 Price/Book ratio 3.93 5.57 5 Yr. EPS Growth Rate (%) 16.34 13.79 Current Yield (%) 0.75 1.01 Beta (5 Years, Monthly) 0.93 1.00 % in Int'l Securities 6.71 3.99 Active Share 73.63 N/A Number of Stocks 88 421 Pru Jenn Mid-Cap Gro Russell Midcap Growth Index 0.0 10.0 20.0 30.0 40.0 Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0 0.0 7.2 5.1 26.0 14.1 14.7 9.3 2.3 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Small Cap Value Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The Fund seeks medium to small market capitalization businesses with sustainable competitive advantages, conservative balance sheets, and management with an ownership mentality. Investments are sold when the stock price reaches management’s estimate of intrinsic value, the estimate of intrinsic value is revised such that there is no longer a discount to intrinsic value, a holding reaches the stated maximum position size, or to raise proceeds for a more attractive opportunity. Innovest's Assessment: We expect the strategy to outperform following periods of extreme valuations, following which the market often over corrects, providing opportunities to invest in companies trading significantly below the fund’s estimate of intrinsic value. The strategy may underperform during periods when market psychology is short-term focused and volatile, or when investors do not care about valuation. -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Diamond Hill Sm Cap 3.86 (36) 10.95 (32) 10.95 (32) 7.02 (69) 12.48 (47) 9.58 (66) 8.45 (38) ˜ Russell 2000 Value Index 2.05 (82) 7.84 (47) 7.84 (47) 9.55 (32) 13.01 (40) 10.84 (33) 8.17 (48) Median 3.12 7.52 7.52 8.05 12.28 10.39 8.13 0.0 4.0 SECTOR ALLOCATION STYLE MAP (05/01/05 - 12/31/17) SECTOR PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS UP/DOWN CAPTURE (01/01/13 - 12/31/17) TOTAL SECTOR ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Avis Budget Group Inc 7.64 0.00 15.29 DST Systems Inc. 3.76 0.00 13.44 Vail Resorts Inc. 3.55 0.00 -5.95 Live Nation Entertainment Inc 3.24 0.00 -2.25 Trinity Industries Inc. 3.19 0.00 17.88 Cimarex Energy Co. 3.03 0.00 7.41 BankUnited Inc 2.95 0.00 15.18 iStar Inc 2.68 0.07 -4.24 Red Rock Resorts Inc 2.63 0.00 46.22 Hub Group Inc 2.62 0.15 11.53 % of Portfolio 35.29 0.22 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $4,665 $2,112 Median Mkt. Cap $M $3,435 $742 Price/Earnings ratio 22.64 19.32 Price/Book ratio 2.47 1.75 5 Yr. EPS Growth Rate (%) 8.39 5.85 Current Yield (%) 1.38 1.88 Beta (5 Years, Monthly) 0.67 1.00 % in Int'l Securities 4.62 3.43 Active Share 97.06 N/A Number of Stocks 67 1,387 Diamond Hill Sm Cap Russell 2000 Value Idx 0.0 10.0 20.0 30.0 40.0 Utilities Telecommunication Services Real Estate Other Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 2.6 0.8 7.5 0.0 0.0 10.1 23.8 5.0 26.0 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Small Cap Growth Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: American Beacon Stephens Small Cap Growth strategy is a team-based, bottom-up strategy with a macro overlay. Central to their philosophy are the tenets of behavioral finance and how these behavioral biases create inefficiencies in the market for the team to capitalize on and/or defend against. The management team attempts to construct a high-quality growth portfolio that identifies two types of stocks: core and catalyst. Core companies are the stable, steady growers, whereas catalyst companies have a near-term inflection point that may translate into accelerated earnings. This balance of stocks is driven by the market environment and is always fluid. Innovest Assessment: The strategy should be expected to outperform when the market is recognizing companies with higher, more consistent earnings growth patterns. The strategy should be expected to underperform during speculative, lower quality rallies and when earnings growth is inconsistent. -10.0 0.0 10.0 20.0 30.0 40.0 50.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Am Beacon:Sm Cp Gro 4.58 (48) 19.45 (55) 19.45 (55) 7.78 (57) 11.64 (79) 10.81 (66) 7.84 (69) ˜ Russell 2000 Growth Index 4.59 (48) 22.17 (44) 22.17 (44) 10.28 (42) 15.21 (35) 12.34 (37) 9.19 (41) Median 4.47 20.54 20.54 9.16 13.89 11.59 8.72 6.0 SECTOR ALLOCATION STYLE MAP (09/01/06 - 12/31/17) SECTOR PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS UP/DOWN CAPTURE (01/01/13 - 12/31/17) TOTAL SECTOR ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Icon PLC 1.99 0.00 -1.52 Proto Labs Inc 1.92 0.23 28.27 Calavo Growers Inc 1.78 0.12 16.80 CoStar Group Inc 1.70 0.00 10.70 Ligand Pharmaceuticals 1.63 0.26 0.57 Neogen Corp 1.56 0.28 6.13 Take-Two Interactive Software Inc 1.56 0.00 7.38 WageWorks Inc 1.55 0.23 2.14 Proofpoint Inc 1.54 0.36 1.82 Microsemi Corp 1.47 0.00 0.33 % of Portfolio 16.70 1.48 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $3,615 $2,627 Median Mkt. Cap $M $2,429 $1,003 Price/Earnings ratio 40.21 26.22 Price/Book ratio 4.18 4.15 5 Yr. EPS Growth Rate (%) 19.18 14.02 Current Yield (%) 0.20 0.68 Beta (5 Years, Monthly) 0.90 1.00 % in Int'l Securities 6.63 1.92 Active Share 88.66 N/A Number of Stocks 109 1,175 Am Beacon:Sm Cp Gro Russell 2000 Gr Idx 0.0 15.0 30.0 45.0 60.0 Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.0 0.3 0.0 0.9 38.8 16.8 21.1 6.0 2.8 3.1 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM International Large Cap Value Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The fund's management seeks above average returns over the long-run by investing in common and preferred stocks of large, foreign companies. The team combines a top down investment theme with fundamental analysis of companies, countries, and regions. Investments are made only in countries in which shareholders receive adequate legal protection. Moreover, the team prefers high quality companies with strong competitive advantages and frequently holds positions for five years or more. Innovest Assessment: The Harbor International Fund will tend to outperform when the market favors relative value stocks, especially those in emerging markets, as the fund typically has relatively high direct and indirect emerging market exposure. The Fund historically overweights European stocks and does not hedge currencies; therefore, a strengthening Euro would benefit the portfolio. In contrast, the Fund will tend to underperform in markets favoring high growth stocks, especially during speculative, short-term rallies, and when emerging market stocks underperform. -12.0 -4.0 4.0 12.0 20.0 28.0 36.0 44.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 REGION ALLOCATION STYLE MAP (01/01/99 - 12/31/17) REGION PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS TOTAL SECTOR ATTRIBUTION (10/01/17 - 12/31/17) TOTAL REGION ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Las Vegas Sands Corp 7.24 0.00 9.42 Wynn Resorts Ltd 3.77 0.00 13.58 Schlumberger Ltd 3.40 0.00 -2.64 Vivendi 3.28 0.00 6.30 Alibaba Group Holding Ltd 3.27 0.00 -0.16 Fanuc Corp 2.81 0.00 18.67 BAYER AG 2.71 0.00 N/A Heineken NV 2.46 0.00 5.54 Shire PLC 2.41 0.00 3.83 Atlas Copco AB 2.26 0.00 3.40 % of Portfolio 33.61 0.00 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $72,504 $72,970 Median Mkt. Cap $M $34,397 $11,206 Price/Earnings ratio 21.18 13.98 Price/Book ratio 2.83 1.64 5 Yr. EPS Growth Rate (%) 5.43 5.58 Current Yield (%) 2.01 4.09 Beta (5 Years, Monthly) 0.87 1.00 % in Emerging Market 9.59 N/A Active Share 93.03 N/A Number of Stocks 75 483 Harbor Intl MSCI EAFE Val Idx 0.0 15.0 30.0 45.0 60.0 United Kingdom Pacific ex Japan Other North America Middle East Japan Europe ex UK EM Latin America EM Asia 14.9 0.0 0.1 14.1 1.0 10.8 49.1 6.5 3.5 19.8 11.2 0.3 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM International Multi-Cap Core Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The investment seeks to offer long-term capital growth and diversification by approximating the performance of the MSCI Europe Australasia Far East (EAFE) Index. The fund invests normally at least 90% of its net assets in equity securities (common and preferred stock) included in the MSCI Europe Australasia Far East (EAFE) Index (Net), weighted to seek to replicate the investment characteristics of the MSCI EAFE Index (Net) and performance that correlates with that of the index. It follows an indexed or "passively managed" approach to investing. -12.0 -4.0 4.0 12.0 20.0 28.0 36.0 44.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vantagepoint Overseas Eq Idx 3.80 (57) 25.31 (52) 25.31 (52) 7.72 (54) 7.47 (50) 5.90 (42) 1.87 (44) ˜ MSCI EAFE (Net) Index 4.23 (31) 25.03 (59) 25.03 (59) 7.80 (53) 7.90 (35) 6.04 (37) 1.94 (41) Median 3.89 25.37 25.37 7.86 7.46 5.67 1.76 -3.0 0.0 3.0 6.0 9.0 12.0 Return (%) 3.0 6.0 9.0 12.0 15.0 18.0 Risk (Standard Deviation %) Return Standard Deviation THIS PAGE LEFT INTENTIONALLY BLANK 21 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM International Large Cap Growth Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: This fund's managers are focused on long term capital growth. They primarily invest in common stocks of European and Pacific Basin issuers that have prospects of above average capital appreciation. The managers may use cash to moderate volatility, typically holding 5-10% of fund assets in cash. The Fund usually has a stake in emerging-markets companies and will sometimes hold preferred stock and convertible debt. Innovest's Assessment: The fund’s propensity to focus intensely on bottom-up, fundamental factors can lead to periods of underperformance when the market is less concerned about company fundamentals and more driven by thematic and macroeconomic factors. Additionally, the fund is likely to lag when highly cyclical stocks and lower quality companies significantly outperform the overall market. Finally, the fund’s immense asset base is likely to present some challenges in the fund’s ability to build meaningful positions in smaller companies and to opportunistically trade in less liquid markets. -12.0 -4.0 4.0 12.0 20.0 28.0 36.0 44.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Amer Funds EuPc 4.23 (37) 31.17 (16) 31.17 (16) 9.66 (10) 9.21 (5) 7.05 (10) N/A REGION ALLOCATION STYLE MAP (06/01/09 - 12/31/17) REGION PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS TOTAL SECTOR ATTRIBUTION (10/01/17 - 12/31/17) TOTAL REGION ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Alibaba Group Holding Ltd 2.99 0.00 -0.16 AIA Group Ltd 2.84 1.36 15.62 British American Tobacco 2.70 2.05 4.96 Tencent Holdings LTD 2.52 0.00 20.67 Taiwan Semiconductor 2.47 0.00 8.11 H D F C Bank Ltd 2.22 0.00 6.14 Reliance Industries Ltd 2.20 0.00 20.73 European Aeronautic 2.14 0.76 4.83 Softbank Group Corp 2.01 0.86 -1.87 Nintendo Co Ltd 1.89 0.55 -0.95 % of Portfolio 23.98 5.58 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $86,214 $53,812 Median Mkt. Cap $M $23,525 $11,990 Price/Earnings ratio 20.31 22.17 Price/Book ratio 2.99 3.01 5 Yr. EPS Growth Rate (%) 10.43 9.85 Current Yield (%) 1.42 2.08 Beta (5 Years, Monthly) 0.88 1.00 % in Emerging Market 27.63 N/A Active Share 77.13 N/A Number of Stocks 249 543 Amer Funds EuPc MSCI EAFE Gr Idx Net 0.0 15.0 30.0 45.0 60.0 United Kingdom Pacific ex Japan Other North America Middle East Japan Europe ex UK EM Mid East+Africa EM Latin America EM Europe EM Asia 10.6 10.7 0.4 4.9 0.2 15.8 27.8 1.2 2.2 0.8 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Emerging Markets Equity (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The portfolio manager invests in emerging market businesses that appear likely to grow at a faster pace than world GDP and may benefit from distinctive structural global growth themes. They rely on fundamental analysis to search for exceptional businesses with sustainable competitive advantages, strong management and high return on capital. They maintain a country and sector agnostic approach. Innovest Assessment: This fund will tend to outperform when “ rational” markets prevail (i.e., when earnings and stock price are positively correlated and when the relationship between security valuations and stock performance matter). It has also performed well in down-markets due to investments in companies with a strong downside position resulting from favorable balance sheets, solid cash flows, and some competitive advantage in their industry. In irrational markets (e.g., when low-quality companies outperform in the short-term), the strategy may lag behind its peers. -25.0 -10.0 5.0 20.0 35.0 50.0 65.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Oppenheimer Dev Mkts 5.03 (78) 34.77 (53) 34.77 (53) 7.38 (66) 5.01 (37) 3.40 (32) 4.25 (6) ˜ MSCI Emerging Markets (Net) Index 7.44 (22) 37.28 (42) 37.28 (42) 9.10 (39) 4.35 (47) 2.56 (48) 1.68 (45) Median 6.35 35.34 35.34 8.56 4.18 2.45 1.39 REGION ALLOCATION STYLE MAP (01/01/01 - 12/31/17) REGION PERFORMANCE PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS TOTAL SECTOR ATTRIBUTION (10/01/17 - 12/31/17) TOTAL REGION ATTRIBUTION Portfolio Weight (%) Benchmark Weight (%) Quarterly Return (%) Tencent Holdings LTD 7.81 5.45 20.67 Taiwan Semiconductor 6.13 3.50 8.11 Alibaba Group Holding Ltd 5.50 3.66 -0.16 HDFC 4.60 0.75 0.49 AIA Group Ltd 3.10 0.00 15.62 Kering 2.84 0.00 18.42 Glencore Plc 2.81 0.00 15.00 Novatek PJSC 2.51 0.20 3.10 NAVER Corp 2.34 0.42 25.14 China Lodging Group Ltd 1.97 0.00 22.28 % of Portfolio 39.61 13.98 Portfolio Benchmark Wtd. Avg. Mkt. Cap $M $101,163 $89,981 Median Mkt. Cap $M $13,241 $6,078 Price/Earnings ratio 23.12 14.41 Price/Book ratio 3.48 2.46 5 Yr. EPS Growth Rate (%) 13.79 11.34 Current Yield (%) 1.56 2.27 Beta (5 Years, Monthly) 0.90 1.00 % in Emerging Market 69.03 86.63 Active Share 78.15 N/A Number of Stocks 96 846 Oppenheimer Dev Mkts MSCI EM (Net) Index 0.0 20.0 40.0 60.0 80.0 United Kingdom Pacific ex Japan North America Frontier Markets Europe ex UK EM Mid East+Africa EM Latin America EM Europe EM Asia Cash 4.0 12.8 3.4 0.7 5.7 5.5 10.7 8.5 45.4 3.3 0.0 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Real Estate Sector (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The managers use a combination of trend analysis and fundamental research to identify fund prospects. They uses quantitative screens to look for companies with high-growth expectations, positive earnings momentum, and solid balance sheets. The team then hones in on those backed by solid management teams, portfolios of top-tier assets, and sustainable cash flows. Roughly 75% of the portfolio is invested in long-term core holdings. The remainder consists of short-term opportunistic value plays. Weightings are kept close to those of the MSCI U.S. REIT Index. -4.0 0.0 4.0 8.0 12.0 16.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Nuveen Real Estate Secs 2.39 (43) 5.61 (42) 5.61 (42) 5.28 (37) 9.19 (22) 10.27 (24) 8.22 (13) ˜ Wilshire U.S. Real Estate Securities Index 1.72 (70) 4.84 (56) 4.84 (56) 5.75 (26) 9.70 (13) 10.63 (13) 7.36 (31) Median 2.13 5.10 5.10 4.89 8.44 9.61 6.82 2.0 4.0 6.0 8.0 10.0 12.0 Return (%) -6.0 0.0 6.0 12.0 18.0 24.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Nuveen Real Estate Secs 9.19 13.16 ˜ Wilshire U.S. Real Estate Securities Index 9.70 13.45 TOP 10 HOLDINGS STYLE MAP (07/01/95 - 12/31/17) REGIONAL ALLOCATION SECTOR ALLOCATION PORTFOLIO CHARACTERISTICS UP/DOWN CAPTURE (01/01/13 - 12/31/17) Simon Property Group Inc ORD 8.20 % Equinix Inc ORD 5.09 % Vornado Realty Trust ORD 4.01 % Public Storage ORD 3.83 % AvalonBay Communities Inc ORD 3.79 % Ventas Inc ORD 3.57 % Equity Residential ORD 3.36 % Digital Realty Trust Inc ORD 2.93 % Boston Properties Inc ORD 2.87 % Duke Realty Corp ORD 2.83 % Total Securities 96 Avg. Market Cap $17,044 Million P/E 36.15 P/B 3.81 Div. Yield 3.55% Annual EPS 22.81 5Yr EPS 20.04 3Yr EPS Growth 29.09 No data found. No data found. Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Nuveen Real Estate Secs 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Nuveen Real Estate Secs 12/31/17 27 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Global Natural Resources (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The investment seeks high total return. Under normal market conditions, the fund invests at least 80% of its net assets in the equity and debt securities of companies in the natural resources sector. It predominantly invests in equity securities, primarily common stock. In addition to its investments in companies in the natural resources sector, the fund may also invest up to 20% of its net assets in equity or debt securities of any type of foreign or U.S. issuer. It may invest a portion of its assets in smaller capitalization companies, which are generally companies with market capitalizations of less than $1.5 billion at the time of the fund's investment. -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Franklin Natural Res 7.04 (56) 0.32 (79) 0.32 (79) -0.87 (66) -3.16 (74) -4.67 (72) -3.00 (31) ˜ S&P N American Nat Res 5.94 (68) 1.23 (72) 1.23 (72) 0.11 (54) 1.07 (34) -0.02 (21) -0.23 (7) Median 7.23 4.46 4.46 0.22 -1.18 -3.50 -3.91 -18.0 -12.0 -6.0 0.0 6.0 12.0 18.0 Return (%) 0.0 8.0 16.0 24.0 32.0 Risk (Standard Deviation %) PORTFOLIO CHARACTERISTICS TOP 10 HOLDINGS STYLE MAP (07/01/01 - 12/31/17) SECTOR ALLOCATION ASSET ALLOCATION REGION ALLOCATION TOP 5 COUNTRIES UP/DOWN CAPTURE (01/01/13 - 12/31/17) Schlumberger NV ORD 4.41 % Halliburton Co ORD 3.73 % Noble Energy Inc ORD 3.59 % Anadarko Petroleum Corp ORD 3.44 % Occidental Petroleum Corp ORD 3.44 % EOG Resources Inc ORD 3.17 % Royal Dutch Shell PLC DR 2.98 % Suncor Energy Inc ORD 2.91 % Kinder Morgan Inc ORD 2.56 % Cabot Oil & Gas Corp ORD 2.54 % Total Securities 87 Avg. Market Cap $44,697 Million P/E 38.17 P/B 1.89 Div. Yield 2.72% Annual EPS 22.28 5Yr EPS -21.56 3Yr EPS Growth -25.46 -50.0 % 0.0% 50.0% 100.0% 150.0% Cash Convertibles Other Fixed Income Equities -0.4 % 0.0% 0.6% 0.6% 99.2% United States 66.88 % Canada 13.59 % United Kingdom 9.49 % Netherlands 2.98 % Australia 2.31 % 3 Years 5 Years vs. S&P North American Natural Res Sector Index (TR) Beta 1.19 1.17 Franklin Natural Res S&P North American Natural Res Sector Index (TR) 0.0 15.0 30.0 45.0 60.0 75.0 90.0 105.0 Other Materials Energy Franklin Natural Res S&P North American Natural Res Sector Index (TR) 0.0 15.0 30.0 45.0 60.0 75.0 90.0 105.0 Other United Kingdom Europe ex UK Pacific ex Japan North America EM Latin America Style History Dec-2017 Average Style Exposure FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Science & Technology Sector (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: Seligman primarily looks for technology stocks with a combination of decent valuations and good growth prospects. The Fund is valuation-sensitive than many of his rivals and shies away from companies that aren't generating cash or that have inexperienced management. It will make sizable semiconductor bets when the industry cycle allows him to buy in cheaply. The Fund's more expansive mandate also allows him to invest substantial sums in the health-care sector. -10.0 5.0 20.0 35.0 50.0 65.0 80.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Columbia Sel Com&Inf 2.95 (87) 34.06 (62) 34.06 (62) 19.06 (27) 21.28 (26) 15.14 (37) 12.12 (17) ˜ S&P 500 Info Tech 9.01 (9) 38.83 (27) 38.83 (27) 18.74 (29) 20.90 (32) 17.20 (11) 11.90 (22) Median 6.03 34.99 34.99 16.87 18.89 14.30 10.71 5.0 10.0 15.0 20.0 25.0 30.0 Return (%) 6.0 9.0 12.0 15.0 18.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Columbia Sel Com&Inf 21.28 13.16 ˜ S&P 500 Info Tech 20.90 12.43 ¾ Median 18.89 13.38 Fund TOP 10 HOLDINGS STYLE MAP (<StartDate:MM/dd/yy> - 12/31/17) ASSET ALLOCATION SECTOR ALLOCATION PORTFOLIO CHARACTERISTICS UP/DOWN CAPTURE (<StartDate:MM/dd/yy> - 12/31/17) Lam Research Corp ORD 8.73 % Broadcom Ltd ORD 7.15 % Apple Inc ORD 5.77 % Micron Technology Inc ORD 4.74 % Synopsys Inc ORD 3.83 % Qorvo Inc ORD 3.75 % Teradyne Inc ORD 3.24 % Western Digital Corp ORD 3.23 % Visa Inc ORD 3.17 % Synaptics Inc ORD 3.16 % Total Securities 61 Avg. Market Cap $113,003 Million P/E 32.03 P/B 4.33 Div. Yield 1.67% Annual EPS 16.43 5Yr EPS 17.46 3Yr EPS Growth 15.19 3 Years 5 Years vs. S&P 500 Information Technology Beta 0.89 0.88 Sector Weights As of 07/31/2017 Columbia Sel Com&Inf S&P 500 Information Technology 0.0 20.0 40.0 60.0 80.0 100.0 120.0 Other Information Technology Industrials Financials Consumer Staples Consumer Discretionary -50.0 % 0.0% 50.0% 100.0% 150.0% Cash Fixed Income Convertibles Other Equities -0.2 % 0.0% 0.0% 1.9% 98.4% Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Columbia Sel Com&Inf 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Utility Sector (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Style: The investment seeks total return. The fund normally invests at least 80% of its net assets in securities of issuers in the utilities industry. Issuers in the utilities industry include issuers engaged in the manufacture, production, generation, transmission, sale or distribution of electric, gas or other types of energy, and issuers engaged in telecommunications, including wireless, telephone, and cable (but not engaged in public broadcasting). It primarily invests its assets in equity securities, but may also invest in debt instruments, including less than investment grade quality debt instruments. -10.0 -4.0 2.0 8.0 14.0 20.0 26.0 32.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ MFS Utilities;A (MMUFX) 0.20 (64) 14.68 (28) 14.68 (28) 2.88 (92) 8.05 (82) 8.58 (72) 5.31 (54) ˜ S&P 500 Utilities 0.21 (64) 12.11 (58) 12.11 (58) 7.45 (9) 12.62 (8) 11.92 (7) 6.31 (20) Median 0.38 12.88 12.88 5.35 10.68 10.47 5.45 4.0 6.0 8.0 10.0 12.0 14.0 Return (%) 6.0 8.0 10.0 12.0 14.0 16.0 Risk (Standard Deviation %) Return Standard Deviation TOP 10 HOLDINGS STYLE MAP (<StartDate:MM/dd/yy> - 12/31/17) ASSET ALLOCATION SECTOR ALLOCATION PORTFOLIO CHARACTERISTICS UP/DOWN CAPTURE (<StartDate:MM/dd/yy> - 12/31/17) Exelon Corp ORD 6.65 % NextEra Energy Inc ORD 4.23 % PPL Corp ORD 3.98 % EDP Renovaveis SA ORD 3.95 % Sempra Energy ORD 3.59 % Enel SpA ORD 3.32 % PG&E Corp ORD 2.96 % Com Hem Holding AB ORD 2.54 % American Electric Power Company 2.48 % Enterprise Products Partners LP 2.32 % Total Securities 95 Avg. Market Cap $31,955 Million P/E 29.52 P/B 2.60 Div. Yield 3.76% Annual EPS 12.62 5Yr EPS -1.69 3Yr EPS Growth 6.21 3 Years 5 Years vs. S&P 500 Utilities Beta 0.43 0.51 Sector Weights As of 07/31/2017 MFS Utilities;A (MMUFX) S&P 500 Utilities 0.0 15.0 30.0 45.0 60.0 75.0 Other Utilities Telecommunication Services Materials Industrials Financials Energy Consumer Discretionary 0.0% 25.0% 50.0% 75.0% 100.0% 125.0% Convertibles Fixed Income Cash Other Equities 0.0% 0.1% 0.8% 13.0% 86.1% Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value MFS Utilities;A (MMUFX) 50.0 75.0 100.0 125.0 150.0 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Broad Market Core Fixed Income (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The core tenant of MetWest’s fixed income philosophy is a disciplined implementation of their value-based process. The “value” concept is that regardless of factor (duration, yield curve, sector selection, or issue) the strategic decisions, and buy and sell decisions should be determined by whether the factor or security is cheap or rich to fair value. Further, their investment approach is designed to take advantage of the fact that fixed income pricing is extremely volatile in the short run, but over the long term the pricing risks tend to mean revert. Hence, they tend to only overweight interest rates, yield curve, credit / spread risk when prices move out of line with the long term fundamentals. Innovest Assessment: The fund is expected to outperform when its sector allocation and security selection in undervalued or under sponsored assets move toward management’s view of intrinsic value. The strategy will underperform when market psychology and investor sentiment cause temporary dislocations leading to mispriced securities. These short-term disruptions should lead to long-term opportunities. -2.0 0.0 2.0 4.0 6.0 8.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Met West:Total Return 0.38 (41) 3.43 (58) 3.43 (58) 2.05 (59) 2.51 (16) 4.19 (5) 5.59 (1) PORTFOLIO CHARACTERISTICS TOP SECTOR ALLOCATIONS STYLE MAP (04/01/00 - 12/31/17) QUALITY ALLOCATION ASSET ALLOCATION MATURITY DISTRIBUTION UP/DOWN CAPTURE (01/01/13 - 12/31/17) GNMA and Other Mtg Backed 36.58 % Corporate Notes/Bonds 30.39 % Government Agency Securities 25.51 % Asset Backed Securities 5.98 % Avg. Coupon 3.17 % Nominal Maturity 7.16 Years Effective Maturity N/A Duration 5.62 Years SEC 30 Day Yield 3.85 Avg. Credit Quality AA 0.0% 50.0% 100.0% 150.0% Convertibles Equities Other Cash Fixed Income 0.0% 0.0% 0.0% 1.5% 98.5% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Government/AAA A Rated BBB Rated AA Rated CCC, CC AND C rated BB AND B Rated D Rated Not Rated Equities/Other 64.6% 15.9% 9.6% 5.3% 2.4% 2.1% 0.2% 0.0% 0.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% >30Yrs Other 10-20Yrs 1-3Yrs 20-30Yrs <1Yr 3-5Yrs 5-10Yrs 0.0% 0.0% 4.3% 8.4% 9.2% FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. Broad Market Core Fixed Income (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The investment seeks to track the performance of a broad, market- weighted bond index. The fund invests by sampling the index. It invests at least 80% of assets in bonds held in the index. The fund maintains a dollar- weighted average maturity consistent with that of the index, ranging between 5 and 10 years. -2.0 0.0 2.0 4.0 6.0 8.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vanguard Tot Bd 0.40 (36) 3.56 (52) 3.56 (52) 2.18 (49) 2.02 (46) 3.12 (57) 3.95 (52) ˜ BC Aggregate Idx 0.39 (40) 3.54 (52) 3.54 (52) 2.24 (43) 2.10 (39) 3.20 (49) 4.01 (48) Median 0.35 3.58 3.58 2.16 1.96 3.19 3.97 -1.0 0.0 1.0 2.0 3.0 4.0 Return (%) 0.6 1.2 1.8 2.4 3.0 3.6 4.2 Risk (Standard Deviation %) Return Standard Deviation £¢ Vanguard Tot Bd 2.02 2.96 ˜ BC Aggregate Idx 2.10 2.82 ¾ Median 1.96 2.86 Fund Family : Vanguard Group Inc Fund Inception : 11/12/2001 Portfolio PORTFOLIO CHARACTERISTICS TOP SECTOR ALLOCATIONS STYLE MAP (12/01/01 - 12/31/17) QUALITY ALLOCATION ASSET ALLOCATION MATURITY DISTRIBUTION UP/DOWN CAPTURE (01/01/13 - 12/31/17) Treasury Notes/Bonds 39.77 % Corporate Notes/Bonds 31.09 % GNMA and Other Mtg Backed 23.21 % Government Agency Securities 2.79 % US$ Denominated Fgn. Gvt. 1.69 % Asset Backed Securities 0.63 % Fgn. Currency Denominated Bonds 0.04 % Avg. Coupon 3.07 % Nominal Maturity N/A Effective Maturity 8.20 Years Duration 5.95 Years SEC 30 Day Yield 2.65 Avg. Credit Quality AA -50.0 % 0.0% 50.0% 100.0% 150.0% Other Convertibles Equities Cash Fixed Income -1.1 % 0.0% 0.0% 1.9% 99.2% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Government/AAA BBB Rated A Rated AA Rated Foreign Securities Equities/Other 70.7% 13.3% 11.8% 5.3% 0.0% -15.0 % 0.0% 15.0% 30.0% 45.0% 60.0% Other >30Yrs <1Yr 10-20Yrs 20-30Yrs 3-5Yrs 1-3Yrs 5-10Yrs -1.1 % 0.6% 1.9% 3.8% 12.4% 21.7% 22.0% 38.7% Style History Dec-2017 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. TIPS (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Style: The goal here is to provide inexpensive exposure to the inflation-protected bond market. Most of management's actions involve trying to identify undervalued issues along the inflation-protected bond-maturity spectrum. Historically, the fund has stuck exclusively with Treasury issues. Innovest's Assessment: The principal on the fund's holdings adjust with changes in the Consumer Price Index, but interest rates and inflation won't necessarily move in lockstep, and the fund is likely to underperform when interest rates spike. The fund is likely to outperform during periods of inflation or when the dollar is declining, as a declining dollar tends to lead to inflation. -4.0 -2.0 0.0 2.0 4.0 6.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vanguard Infl-Prot 1.19 (43) 2.91 (35) 2.91 (35) 1.91 (32) 0.06 (29) 2.82 (11) 3.37 (22) ˜ BC U.S. Treasury: U.S. TIPS 1.26 (31) 3.01 (30) 3.01 (30) 2.05 (24) 0.13 (20) 2.92 (6) 3.53 (9) Median 1.11 2.63 2.63 1.60 -0.27 2.18 2.85 -3.6 -2.7 -1.8 -0.9 0.0 0.9 1.8 Return (%) -2.0 0.0 2.0 4.0 6.0 8.0 Risk (Standard Deviation %) PORTFOLIO CHARACTERISTICS TOP SECTOR ALLOCATIONS STYLE MAP (07/01/05 - 12/31/17) QUALITY ALLOCATION ASSET ALLOCATION MATURITY DISTRIBUTION UP/DOWN CAPTURE (01/01/13 - 12/31/17) Avg. Coupon 0.79 % Treasury Notes/Bonds 99.78 % Nominal Maturity N/A Effective Maturity 8.55 Years Duration 7.68 Years SEC 30 Day Yield 0.58 Avg. Credit Quality AAA 0.0% 50.0% 100.0% 150.0% Convertibles Equities Other Cash Fixed Income 0.0% 0.0% 0.0% 0.2% 99.8% 0.0% 50.0% 100.0% 150.0% Government/AAA Equities/Other 100.0% 0.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% >30Yrs Other <1Yr 10-20Yrs 20-30Yrs 1-3Yrs 3-5Yrs 5-10Yrs 0.0% 0.0% 1.0% 7.9% 12.0% 15.0% 18.9% 45.3% Style History Dec-2017 Average Style Exposure Capitalization Manager Style Barclays Capital Long Term Govt Bond Barclays Capital U.S. Credit 1-5 Year Index Barclays Capital Long U.S. Credit Barclays Capital 1-5 Yr Gov Vanguard Infl-Prot 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 FUND INFORMATION ROLLING 3 YEAR RETURNS AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. GIC/Stable Value (SA+CF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The PLUS Fund's investment strategies are based on a structured and diversified multi-product, multi-manager approach. The PLUS Fund invests primarily in a diversified portfolio of stable value investment contracts and fixed income securities that back certain stable value investment contracts. Cash equivalents are held, in part, to provide liquidity for payouts. The composition of the PLUS Fund portfolio and its allocations to various stable value investments and fixed income investment sectors is determined based on prevailing economic and capital market conditions, relative value analysis, and other factors. -0.6 0.1 0.8 1.5 2.2 2.9 3.6 4.3 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vantage Trust Plus 0.62 (1) 2.43 (1) 2.43 (1) 2.36 (1) 2.41 (1) 2.65 (1) 3.17 (5) ˜ Ryan 3 Yr GIC Master Index 0.42 (93) 1.60 (100) 1.60 (100) 1.38 (100) 1.25 (100) 1.45 (100) 2.29 (72) Median 0.49 1.86 1.86 1.88 1.82 2.10 2.56 0.8 1.2 1.6 2.0 2.4 2.8 Return (%) 0.0 0.1 0.2 Risk (Standard Deviation %) Financial Strength: A+ A+ AA- AA- 18.2% 5.2% 13.0% 13.4% Aa3 A1 Aa2 Aa2 Pacific Life Ins. Co. Principal Life Ins. Co. Prudential Ins. Co. of America Transamerica Premier Life Ins. Co Investment Contract Issuers New York Life Ins. Co. Bank of Tokyo-Mitsubishi Vantage Trust PLUS AA+ % of Wrapped Assets 7.0% Aaa Moody's S&P 5.6% Aa2 AA- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Market-to-Book 99.88% 95.18% 99.74% 101.37% 102.42% 103.22% 100.60% 101.45% 100.20% 100.29% 90% 95% 100% 105% HISTORIC MARKET-TO-BOOK VALUES Organization: Founded in 1972, ICMA-RC's mission is to help building retirement security for public employees. Description: The PLUS Fund's investment strategies are based on a structured and diversified multi-product, multi-manager approach. The PLUS Fund invests primarily in a diversified portfolio of stable value investment contracts and fixed income securities that back certain stable value investment contracts. Cash equivalents are held, in part, to provide liquidity for payouts. The compostion of the PLUS fund and its allocations to vaious stable value investments and fixed income invesment sectors is determined based on prevailing economic and capital market condtions, relative value analysis, and other factors. Current sub-advisors include: BlackRock, Dodge & Cox, Loomis Sayles, NYL Investors, Facific Asset Management, Pacific Investment Management, Principal Global Investors, Prudential Investment Management, Wellington Cash & Equivalents 9% Traditional GICs 21% Agencies 1% Treasuries 11% Credits 29% Mortgage-Backed 25% Municipals 0% ABS FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - Loan Participation Mutual Funds CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The Eaton Vance Floating Rate Fund invests in senior, secured floating-rate bank loans, most of which are rated below investment grade. It is a bottom- up strategy that focuses on capital preservation and giving shareholders low volatility exposure to the floating rate loan asset class. Due to the large size of the strategy’s asset base, it is difficult for incremental gains from credit selection to be significant enough to generate meaningful alpha. Instead, the team focuses on only the largest issues of the highest rated credits available and leaves the "diamond in the rough" finds to smaller, more nimble strategies. Innovest's Assessment: The strategy should be expected to outperform slightly during more difficult credit environments where higher quality, broad portfolio diversification tactics will protect the portfolio from widespread credit deterioration. The strategy should underperform when lower quality credits (B- and lower) lead, the largest issues selloff, and in situations when smaller issues outperform. Still, because of the fund’s size, it will often track the benchmark relatively closely. -2.0 0.0 2.0 4.0 6.0 8.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Eaton Vance Flt Rt;Inst (EIBLX) 1.10 (33) 4.47 (13) 4.47 (13) 4.50 (19) 3.78 (23) 4.22 (25) 4.10 (21) PORTFOLIO CHARACTERISTICS TOP SECTOR ALLOCATIONS STYLE MAP (02/01/01 - 12/31/17) QUALITY ALLOCATION ASSET ALLOCATION MATURITY DISTRIBUTION UP/DOWN CAPTURE (01/01/13 - 12/31/17) Avg. Coupon 4.66 % Corporate Notes/Bonds 94.01 % Nominal Maturity 5.14 Years Effective Maturity N/A Duration 0.24 Years SEC 30 Day Yield 3.84 Avg. Credit Quality BB 0.0% 50.0% 100.0% 150.0% Convertibles Equities Other Cash Fixed Income 0.0% 0.0% 1.7% 4.3% 94.0% 0.0% 25.0% 50.0% 75.0% 100.0% BB AND B Rated BBB Rated Government/AAA Not Rated CCC, CC AND C rated Equities/Other D Rated 80.5% 5.6% 4.3% 3.6% 3.2% 1.7% 1.1% 0.0% 15.0% 30.0% 45.0% 60.0% 75.0% >30Yrs 20-30Yrs 10-20Yrs Other <1Yr 1-3Yrs 3-5Yrs 5-10Yrs 0.0% 0.0% 0.1% 1.7% 4.7% 12.4% 26.9% 54.2% Style History Dec-2017 Average Style Exposure Capitalization Manager Style Barclays Capital Long Term Govt Bond FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM U.S. High Yield Bonds (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: The team utilizes a flexible approach that seeks to generate excess return by utilizing the full range of opportunities presented by the high yield market, from investment grade credits trading at high yield spreads to distressed and defaulted securities and post- reorganization debt securities. Innovest's Assessment: The JPMorgan High Yield Fund has historically had an overweight allocation to BB and B-rated credits; therefore it is likely to underperform in markets where lower-rated high yield credits (CCC and lower) perform well. The strategy is likely to outperform when higher quality high yield credits are in favor or when investors generally favor less risky assets. Additionally, the strategy should perform well in market environments where bottom-up fundamental credit research is rewarded. -4.0 -1.0 2.0 5.0 8.0 11.0 14.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ JPMorgan High Yield 0.32 (62) 6.65 (49) 6.65 (49) 5.01 (51) 4.92 (41) 5.95 (46) 7.05 (27) ˜ BC US Corp: High Yield 0.47 (48) 7.50 (24) 7.50 (24) 6.35 (11) 5.78 (12) 7.04 (9) 8.03 (4) Median 0.44 6.63 6.63 5.02 4.71 5.88 6.43 -1.5 0.0 1.5 3.0 4.5 6.0 PORTFOLIO CHARACTERISTICS TOP SECTOR ALLOCATIONS STYLE MAP (12/01/98 - 12/31/17) QUALITY ALLOCATION ASSET ALLOCATION MATURITY DISTRIBUTION UP/DOWN CAPTURE (01/01/13 - 12/31/17) Corporate Notes/Bonds 76.99 % US$ Denominated Fgn. Gvt. 15.78 % Common Stock 0.55 % Preferred Stock-Non Convertible 0.37 % Convertible Securities 0.04 % Asset Backed Securities 0.01 % Avg. Coupon N/A Nominal Maturity N/A Effective Maturity 5.94 Years Duration 4.12 Years SEC 30 Day Yield 7.26 Avg. Credit Quality BB 0.0% 50.0% 100.0% 150.0% Other Convertibles Equities Cash Fixed Income 0.0% 0.0% 0.6% 6.2% 93.2% 0.0% 25.0% 50.0% 75.0% 100.0% BB AND B Rated CCC, CC AND C rated Government/AAA Not Rated BBB Rated Equities/Other A Rated 75.0% 14.5% 6.2% 1.9% 1.3% 1.0% 0.1% 0.0% 15.0% 30.0% 45.0% 60.0% 20-30Yrs 10-20Yrs 1-3Yrs Other >30Yrs <1Yr 3-5Yrs 5-10Yrs 0.0% 0.0% 0.0% 1.0% 5.9% 6.2% 41.2% FUND INFORMATION SECTOR ALLOCATIONS PERFORMANCE OVER TIME INVESTMENT STATISTICS (5 YEARS*) RISK VS. RETURN (5 YEARS*) *If less than 5 years, since inception time period was used. Investment Strategy: The fund uses a wholly-owned subsidiary to invest in derivatives that provide exposure to the Bloomberg Commodity Index. It primarily uses swaps but can also hold futures and structured notes. The goal is to track the benchmark without much tracking error. Management tries to modestly outpace the benchmark by executing at favorable prices and employing low-risk cash management. Innovest Assessment: The fund should outperform the benchmark in periods where fundamental supply and demand factors are driving commodity market returns. In addition, due to the Team’s conservative cash management strategy, the Fund may outperform the market during environments where interest rates are rising or credit spreads are widening. Periods of event driven risk can increase the volatility in the spread between an underlying contract of one maturity versus the same underlying instrument expiring at a different time. This environment often be challenging and cause increased tracking error. Crdt Suis Comm Rtn Strat Bloomberg Commodity Index Total Return 0.0 4.0 8.0 -4.0 -8.0 -12.0 Return (%) Last Quarter 2017 1 Year 3 Years 5 Years 7 Years 10 Years 4.7 1.7 1.7 -5.0 -8.5 -8.1 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Absolute Return (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy Blackstone’s Alternative Multi-Strategy Fund attempts to replicate the risk and return characteristics of Blackstone’s Partner’s Fund (‘BPIF’) utilizing the exact same investment team and process - top-down strategy selection combined with bottom-up manager selection - as BPIF. While the mutual fund does not have explicit return and volatility targets, BPIF targets returns of LIBOR + 3-5% over a full market cycle and has historically averaged 4-4.5% volatility while maintaining an equity Beta of around 0.3. Innovest Assessment Blackstone Alternative Multi-Strategy Fund (BXMIX) is recommended for clients seeking a core, diversified Hedge Fund of Funds with daily liquidity due to BAAM’s strong track record and thoughtful approach to managing the constraints imposed by a daily liquid vehicle. -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ BlkStone:Alt Mlt-Str;I 0.22 (85) 7.19 (32) 7.19 (32) 4.00 (24) N/A N/A N/A ˜ HFRI Fund of Fund Liquidity Adj. 1.89 (35) 7.20 (32) 7.20 (32) 2.09 (54) 3.48 (36) 2.15 (59) 0.58 (43) Median 0.95 5.05 5.05 2.38 2.46 2.51 0.01 -9.0 -6.0 -3.0 0.0 3.0 FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Alternative Global Macro (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy The investment team managing GARS aims to exploit inefficiencies across and within markets to maximize risk adjusted returns. They conduct in-depth macro-economic, fundamental, thematic and quantitative research to identify investment opportunities and gather investment insights. The strategy typically allocates between 20- 35 market, relative value and opportunistic return positions in categories including equity, interest rates, real estate, foreign exchange, credit, volatility, inflation and alpha. Innovest Assessment Risk management is paramount in the portfolio construction process for this fund. Quantitative risk analysis using historic data along with the investment team’s future expectations of risk and returns is coupled with analyzing the joint behavior of the positions in a wide variety of difficult economic conditions. The aim is to position the portfolio to respond well in the widest possible range of scenarios. The circumstances under which GARS might outperform its objective correspond to economic circumstances that conform closely to their 3 year outlook. -10.0 -4.0 2.0 8.0 14.0 20.0 26.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ J Hancock II:G Ab Rt;I 1.74 (70) 3.75 (84) 3.75 (84) 0.96 (79) 2.30 (65) N/A N/A FUND INFORMATION ROLLING 3 YEAR RETURN AND PERCENTILE RANKINGS PEER GROUP ANALYSIS - IM Absolute Return (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) *If less than 5 years, data is since inception of fund share class. Investment Strategy: Litman Gregory believes that it is possible to identify highly skilled and experienced investment managers who can successfully execute various investment approaches that target materially lower volatility than the stock market or that have a low correlation or low sensitivity to traditional investment strategies. Litman Gregory also feels that allocating to multiple investment managers with different but complementary strategies can further enhance the risk-adjusted potential of an overall portfolio over a full market cycle. The return objective over a full market cycle is 4% to 8% above the 3- month Libor rate and to outperform a 40/60 stock bond portfolio. Litman Gregory offers additional flexibility that comes from a multi-manager structure and in some cases invest in ways that only accredited investors would be able to access. Innovest Assessment: The Litman Gregory Masters Alternative Strategies fund seeks absolute and relative long-term returns with lower risk and volatility than the stock market with relatively low correlation to stock and bond market indices. With a majority of assets in fixed income funds, the strategy should outperform when fixed income markets perform well. However, with relatively low allocations to long/short equity, the fund may lag in periods when long/short equity leads other hedge fund strategies -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Return Last Quarter Year To Date 1 Year 3 *Glidepath generated from Morningstar Target‐Date Fund Series Report Funds of Funds Number of Funds/ Holdings Open Architecture (%) Sub‐ Advisors Used % Active Managers Max % Equity % Equity at Target‐Date Min % Equity Age at Glide Path End Y 14 100% Y 76% 84% 51% 30% 75 Median Asset Class Income 0.54% 0.87% Intermediatae Term Bond 2015 0.55% 0.84% Large Value 2020 0.56% 0.91% Multialternative 2025 0.58% 0.89% Foreign Large Blend 2030 0.59% 0.95% Short‐Term Bond 2035 0.62% 0.92% Large Blend 2040 0.63% 0.97% Large Growth 2045 0.69% 0.93% Mid‐Cap Blend 2050 0.85% 0.98% High Yield Bond Vantagepoint Infl Focused Inflation‐Protected Bond • • Vantagepoint Growth & Income Vantagepoint Growth Vantagepoint Diversifying Strat Vantagepoint International Vantagepoint Low Duration Bond Vantagepoint SMID Company Vantagepoint High Yield International Equity U.S. Fixed Income U.S. TIPS REITs Commodities • • • Emerging Markets Equity High Yield Fixed Income InternaƟonal Fixed Income Emerging Markets Debt Vantagepoint Milestone Target Date Funds Vantagepoint U.S. Mid Cap U.S. Small Cap EXPENSES PEER GROUP ANALYSIS - IM Mixed-Asset Target Today (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) ASSET ALLOCATION UP/DOWN CAPTURE (01/01/13 - 12/31/17) *If less than 5 years, data is since inception of fund share class. -4.0 0.0 4.0 8.0 12.0 16.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vantagepoint MS Retirement Inc R5 2.02 (59) 8.76 (56) 8.76 (56) 4.24 (48) 4.46 (45) 4.54 (62) 3.91 (63) ˜ Vantagept Target Inc Ind 2.17 (53) 8.74 (56) 8.74 (56) 5.34 (9) 6.00 (9) 5.98 (12) 5.23 (6) Median 2.24 9.11 9.11 4.17 4.34 4.75 4.34 0.0 1.5 3.0 4.5 6.0 7.5 Return (%) 0.7 1.4 2.1 2.8 3.5 4.2 4.9 5.6 Risk (Standard Deviation %) Return Standard Deviation £¢ Vantagepoint MS Retirement Inc R5 4.46 3.32 ˜ Vantagept Target Inc Ind 6.00 2.37 ¾ Median 4.34 3.66 2016 2015 2014 2013 2012 2011 2010 Vantagepoint MS Retirement Inc R5 5.77 (28) -1.55 (59) 3.38 (74) 6.24 (33) 7.18 (76) 2.37 (64) 6.93 (94) Vantagept Target Inc Ind 5.88 (24) 1.53 (1) 7.42 (1) 6.59 (30) 6.65 (77) 5.22 (10) 8.71 (70) IM Mixed-Asset Target Today (MF) Median 5.16 -1.42 3.86 5.37 8.90 2.84 9.52 No data found. Vantagepoint MS Retirement Inc R5 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 65.0 80.0 95.0 110.0 125.0 140.0 150.0 Down Capture Vantagepoint MS Retirement Inc R5 12/31/17 51 PEER GROUP ANALYSIS - IM Mixed-Asset Target 2010 (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) ASSET ALLOCATION UP/DOWN CAPTURE (01/01/13 - 12/31/17) *If less than 5 years, data is since inception of fund share class. -1.0 2.0 5.0 8.0 11.0 14.0 17.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ VantagePoint Milestone 2010 R5 2.11 (76) 9.51 (78) 9.51 (78) 4.53 (74) 5.70 (64) 5.61 (66) 4.46 (35) ˜ Vantagept Target 2010 Idx 2.35 (34) 9.39 (80) 9.39 (80) 5.67 (7) 7.49 (1) 7.29 (1) 5.95 (1) Median 2.23 10.24 10.24 4.91 5.93 5.89 4.11 0.0 2.0 4.0 6.0 8.0 10.0 Return (%) 2.8 3.2 3.6 4.0 4.4 4.8 Risk (Standard Deviation %) Return Standard Deviation £¢ VantagePoint Milestone 2010 R5 5.70 3.93 ˜ Vantagept Target 2010 Idx 7.49 2.98 ¾ Median 5.93 3.95 2016 2015 2014 2013 2012 2011 2010 VantagePoint Milestone 2010 R5 5.95 (51) -1.54 (70) 3.88 (59) 11.17 (14) 9.53 (56) 1.41 (31) 8.51 (94) Vantagept Target 2010 Idx 6.24 (41) 1.52 (1) 8.13 (1) 12.49 (1) 9.11 (63) 4.52 (2) 10.59 (57) IM Mixed-Asset Target 2010 (MF) Median 5.98 -1.18 4.11 8.67 9.78 0.75 10.78 No data found. VantagePoint Milestone 2010 R5 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 65.0 80.0 95.0 110.0 125.0 140.0 150.0 Down Capture VantagePoint Milestone 2010 R5 12/31/17 PEER GROUP ANALYSIS - IM Mixed-Asset Target 2020 (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) ASSET ALLOCATION UP/DOWN CAPTURE (01/01/13 - 12/31/17) *If less than 5 years, data is since inception of fund share class. -4.0 0.0 4.0 8.0 12.0 16.0 20.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ VantagePoint Milestone 2020 R5 2.68 (72) 12.37 (55) 12.37 (55) 5.58 (55) 7.51 (34) 6.88 (37) 4.82 (30) ˜ Vantagept Target 2020 Idx 3.14 (38) 12.32 (56) 12.32 (56) 7.12 (3) 9.70 (1) 9.05 (1) 6.51 (1) Median 3.00 12.63 12.63 5.77 6.74 6.40 4.45 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Return (%) 0.9 1.8 2.7 3.6 4.5 5.4 6.3 7.2 Risk (Standard Deviation %) Return Standard Deviation £¢ VantagePoint Milestone 2020 R5 7.51 5.09 ˜ Vantagept Target 2020 Idx 9.70 4.03 ¾ Median 6.74 4.63 2016 2015 2014 2013 2012 2011 2010 VantagePoint Milestone 2020 R5 6.64 (39) -1.80 (68) 4.46 (61) 16.82 (8) 11.25 (60) -0.26 (46) 11.27 (74) Vantagept Target 2020 Idx 7.72 (11) 1.59 (1) 9.66 (1) 17.86 (3) 11.16 (60) 3.86 (7) 12.16 (53) IM Mixed-Asset Target 2020 (MF) Median 6.31 -1.44 4.72 11.84 11.53 -0.43 12.31 No data found. VantagePoint Milestone 2020 R5 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 65.0 80.0 95.0 110.0 125.0 140.0 150.0 Down Capture PEER GROUP ANALYSIS - IM Mixed-Asset Target 2030 (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) ASSET ALLOCATION UP/DOWN CAPTURE (01/01/13 - 12/31/17) *If less than 5 years, data is since inception of fund share class. -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ VantagePoint Milestone 2030 R5 3.54 (80) 15.67 (69) 15.67 (69) 6.82 (64) 9.38 (34) 8.30 (31) 5.44 (30) ˜ Vantagept Target 2030 Idx 4.07 (43) 15.72 (69) 15.72 (69) 8.74 (1) 12.08 (1) 10.92 (1) 7.28 (1) Median 4.01 16.91 16.91 7.19 8.78 7.83 4.95 3.0 6.0 9.0 12.0 15.0 Return (%) 3.5 4.2 4.9 5.6 6.3 7.0 7.7 8.4 Risk (Standard Deviation %) Return Standard Deviation £¢ VantagePoint Milestone 2030 R5 9.38 6.41 ˜ Vantagept Target 2030 Idx 12.08 5.26 ¾ Median 8.78 5.93 2016 2015 2014 2013 2012 2011 2010 VantagePoint Milestone 2030 R5 7.88 (32) -2.33 (79) 4.96 (58) 22.39 (8) 13.28 (60) -1.46 (28) 13.12 (64) Vantagept Target 2030 Idx 9.35 (9) 1.60 (1) 11.23 (1) 23.71 (4) 13.24 (61) 3.14 (6) 13.50 (53) IM Mixed-Asset Target 2030 (MF) Median 7.31 -1.61 5.18 17.87 13.71 -2.56 13.63 No data found. VantagePoint Milestone 2030 R5 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 65.0 80.0 95.0 110.0 125.0 140.0 150.0 Down Capture VantagePoint Milestone 2030 R5 12/31/17 54 PEER GROUP ANALYSIS - IM Mixed-Asset Target 2040 (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) ASSET ALLOCATION UP/DOWN CAPTURE (01/01/13 - 12/31/17) *If less than 5 years, data is since inception of fund share class. -4.0 2.0 8.0 14.0 20.0 26.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ VantagePoint Milestone 2040 R5 4.39 (82) 19.07 (63) 19.07 (63) 7.92 (57) 10.98 (22) 9.53 (20) 6.14 (18) ˜ Vantagept Target 2040 Idx 5.02 (25) 19.19 (60) 19.19 (60) 9.79 (3) 13.67 (1) 11.87 (1) 7.00 (3) Median 4.74 19.71 19.71 8.11 10.08 8.67 5.27 3.0 6.0 9.0 12.0 15.0 18.0 Return (%) 4.0 4.8 5.6 6.4 7.2 8.0 8.8 9.6 Risk (Standard Deviation %) Return Standard Deviation £¢ VantagePoint Milestone 2040 R5 10.98 7.65 ˜ Vantagept Target 2040 Idx 13.67 7.22 ¾ Median 10.08 6.90 2016 2015 2014 2013 2012 2011 2010 VantagePoint Milestone 2040 R5 8.83 (24) -3.01 (84) 5.43 (50) 27.06 (1) 15.33 (39) -2.61 (23) 14.91 (44) Vantagept Target 2040 Idx 9.92 (10) 1.00 (1) 9.74 (1) 30.67 (1) 16.32 (15) -0.68 (8) 13.72 (62) IM Mixed-Asset Target 2040 (MF) Median 7.98 -1.75 5.38 21.61 14.92 -3.93 14.63 No data found. VantagePoint Milestone 2040 R5 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 65.0 80.0 95.0 110.0 125.0 140.0 150.0 Down Capture VantagePoint Milestone 2040 R5 12/31/17 55 PEER GROUP ANALYSIS - IM Mixed-Asset Target 2050 (MF) CALENDAR YEAR RETURNS AND PERCENTILE RANKINGS RISK VS. RETURN (5 YEARS*) ASSET ALLOCATION UP/DOWN CAPTURE (01/01/13 - 12/31/17) *If less than 5 years, data is since inception of fund share class. -4.0 2.0 8.0 14.0 20.0 26.0 32.0 Return Last Quarter Year To Date 1 Year 3 Years 5 Years 7 Years 10 Years £¢ Vantagepoint Milestone 2050 R5 4.86 (65) 20.47 (59) 20.47 (59) 8.41 (56) 11.27 (22) N/A N/A ˜ Vantagepoint Target 2050 Index 5.45 (12) 20.64 (53) 20.64 (53) 10.48 (1) N/A N/A N/A Median 4.99 20.75 20.75 8.52 10.61 9.02 5.52 6.0 8.0 10.0 12.0 14.0 Return (%) 4.9 5.6 6.3 7.0 7.7 8.4 9.1 9.8 Risk (Standard Deviation %) Return Standard Deviation £¢ Vantagepoint Milestone 2050 R5 10.14 7.83 ˜ Vantagepoint Target 2050 Index 12.87 7.07 ¾ Median 10.09 7.13 2016 2015 2014 2013 2012 2011 2010 Vantagepoint Milestone 2050 R5 9.18 (25) -3.13 (85) 5.21 (60) 27.22 (1) N/A N/A N/A Vantagepoint Target 2050 Index 10.60 (6) 1.07 (1) 9.60 (1) N/A N/A N/A N/A IM Mixed-Asset Target 2050 (MF) Median 8.16 -1.76 5.61 23.08 15.47 -4.38 14.80 No data found. No data found. Vantagepoint Milestone 2050 R5 12/31/17 56 Glossary Active Share measures the percentage of a product’s holdings that differ from the product’s benchmark index, based on portfolio weightings. An Active Share of 60% or higher is generally considered to be active management and less than 20% is generally considered to be passive management. Active Share allows investors to distinguish between products that do and do not engage in a large amount of stock selection. Products with high Active Share may experience significant deviation from the performance of benchmarks over time. Alpha measures a portfolio’s return in excess of the market return adjusted for risk. It is a measure of the manager’s contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk that was taken for that level of market exposure. Beta measures the sensitivity of rates of portfolio return to movements in the market. A portfolio’s beta measures the expected change in return per 1% change in the return on the market. If the beta of a portfolio is 1.5, a 1 percent increase in the return of the market will result, on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true. Dividend Yield - The total amount of dividends paid out for a stock over the preceding twelve months divided by the closing price of a share of the common stock. Down Capture Ratio - The Down Capture Ratio is a measure of the Investment’s compound return when the Benchmark was down divided by the Benchmark’s compound return when the Benchmark was down. The smaller the value, the better. Duration - A time measure of a bond’s interest-rate sensitivity, based on the weighted average of the time periods over which a bond’s cash flows accrue to the bondholder. Forecasted Long-Term Earnings Growth - This growth rate is a measure of a company’s expected long-term success in generating future year-over-year earnings growth. This growth rate is a market value weighted average of the consensus (mean) analysts’ long-term earnings growth rate forecast for each company in the portfolio. The definition of long-term varies by analyst but is limited to a 3-8 year range. This value is expressed as the expected average annual growth of earnings in percent. Information Ratio measures the excess return per unit of residual “non market” risk in a portfolio. The ratio is equal to the Alpha divided by the Residual Risk. Market Capitalization - The market value of a company’s outstanding shares of common stock at a specific point in time, computed as the product of the number of outstanding shares times the stock’s closing price per share. P/E ratio relates the price of the stock to the per-share earnings of the company. A high P/E generally indicates that the market will pay more to obtain the company because it has confidence in the company’s ability to increase its earnings. Conversely, a low P/E indicates that the market has less confidence that the company’s earnings will increase, and therefore will not pay as much for its stock. In most cases a fund with a high average P/E ratio has paid a premium for stocks that have a high potential for increased earnings. If the fund’s average P/E ratio is low, the manager may believe that the stocks have an overlooked or undervalued potential for appreciation. P/B ratio of a company relates the per-share market price of the company’s stock to its per-share book value, the historical accounting value of the company’s tangible assets. A high P/B ratio indicates that the price of the stock exceeds the actual worth of the company’s assets. A low P/B ratio would indicate that the stock is a bargain, priced below what the company’s assets could be worth if liquidated. P/CF ratio compares the total market value of the portfolio to the portfolio’s share of the underlying stocks’ earnings (or book value, cash flow, sales or dividends). R-Squared indicates the extent to which the variability of the portfolio returns is explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An R-Squared value of .75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An R-Squared of 1.0 indicates that a portfolio’s returns are entirely related to the market and it is not influenced by other factors. An R-Squared of zero indicates that no relationship exists between the portfolio’s return and the market. Residual Risk is the unsystematic risk of a fund, or the portion of the total risk unique to the manager and not related to the overall market. This reflects the “bets” which the manager places in that particular asset class. These bets reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce the residual risk of that portfolio. Sharpe Ratio is a measure of risk-adjusted return. It is calculated by subtracting the risk-free return (90 day T-Bills) from the portfolio return and dividing the resulting “excess return” by the portfolio’s total risk level (standard deviation). The result is a measure of returned gained per unit of total risk taken. Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of observations from their sample mean. Stand ard Deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns, the higher the standard deviation of returns, and the higher the portfolio risk. If returns are normally distributed (i.e. as a bell shaped curve distribution) then approximately 66% of 2/3 of the returns would occur within plus or minus one standard deviation of the sample mean. Style Exposure Chart indicates a portfolio’s exposure to a particular capitalization (large, medium or small) and style (value or growth). Based on Sharpe’s return based style analysis, a style map will attempt to correlate a manager to a particular style of investing (i.e. Large Cap Growth). Turnover Ratio - This is a measure of the fund’s trading activity which is computed by taking the lesser of purchases or sales (excluding all securities with maturities of less than one year) and Organization Asset Base Pct. Owned by Employees Current Boutique vs. Institutional Growth of AUM Recent Changes in Ownership Capacity Constraints Management Investment in Firm’s Products Soft Closed Specialized vs. All in One Re-opening of Products People Performance Size of Team Short Term vs. Benchmark and Style Group Structure of Team Long Term vs. Benchmark and Style Group Experience of Team Consistency – Relative/Absolute/Risk Adjusted Turnover of Key Members Growth of Team with Assets Philosophy/Process Expenses Style Consistency (Growth/Value, Market Cap) Cost vs. Competitors Domestic/Int’l drift Examples of things that would cause concern resulting in a YELLOW or RED box include but not limited to: 6) EXPENSES - A fund or product that is substantially above the median expense ratio or management fee would be a cause for concern. Fund Analysis Overview Key 1) ORGANIZATION - A change in ownership whereby it is unclear what the structure of the new organization will be, how will key personnel be compensated, and what type of employment contracts are in place to keep key decision makers. 2) PEOPLE - A change in portfolio manager would be a cause for concern. We would assess the new talent taking over. Is the new portfolio manager a current member of the team or is it someone new from outside the group or organization. 3) PHILOSOPHY/PROCESS - A change in portfolio characteristics would be a cause for concern. For example, if a growth style manager suddenly starts investing in value names during a value rally or if a small cap portfolio was migrating into midcap names due to asset growth. 4) ASSET BASE - A small cap fund with more than $3 billion in assets would be a cause for concern or a fund that continues to add assets as it becomes clear the portfolio management team can not handle the inflows. A sign of this would be a large increase in the cash position of the portfolio. 5) PERFORMANCE - A product that fails to outperform either the index and/or the median manager on a consistent basis (at least 50% of the time) would be a cause for concern. Short term and long term performance is considered both on an absolute basis and relative basis in addition to risk-adjusted measures. Each of the 6 criteria are evaluated on an individual basis and subjective based on Innovest’s assessment. Below are examples of the many factors under each category we consider when making an assessment. 58 Disclaimer Past performance is no guarantee of future results. Investing involves the risk of loss. The material herein has been prepared for informational purposes only and is not intended to provide, and should not be relied on for investment, tax, accounting, or legal advice. No representation is being made as to whether any investment product, strategy, or security is suitable or appropriate for an investor’s particular circumstances. Assumptions, opinions, and forecasts herein constitute our judgment and are subject to change without notice. Innovest is an independent Registered Investment Adviser registered with the Securities and Exchange Commission. This document may also contain returns and valuations from outside sources. While the information contained herein is believed to be true and accurate, Innovest assumes no responsibility for the accuracy of these valuations or return methodologies. The preceding statistical analysis was prepared by Innovest Portfolio Solutions LLC with data provided by Investment Metrics (IM), Lipper and Morningstar, Inc. All Rights Reserved. The investment products discussed are not insured by the FDIC and involve investment risk including the possible loss of all principal. Note: Actual client mutual fund returns are reflected on the table of returns page. Fund pages subsequent to the table of returns reflect the representative mutual fund with the longest track record and may not be the actual share class held by the client. Copyright 2017, Standard & Poor’s Financial Services LLC. Reproduction of S&P Index Services in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Index Services (2017) Copyright MSCI 2017. Unpublished. All Rights Reserved. This information may only be used for your internal use, may not be reproduced or re-disseminated in any form and may not be used to create any financial instruments or products or any indices. This information is provided on an “as is” basis and the user of this information assumes the entire risk of any use it may make or permit to be made of this information. Neither MSCI, any or its affiliates or any other person involved in or related to compiling, computing or creating this information makes any express or implied warranties or representations with respect to such information or the results to be obtained by the use thereof, and MSCI, its affiliates and each such other person hereby expressly disclaim all warranties (including, without limitation, all warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any other person involved in or related to compiling, computing or creating this information have any liability for any direct, indirect, special, incidental, punitive, consequential or any other damages (including, without limitation, lost profits) even if notified of, or if it might otherwise have anticipated, the possibility of such damages. 59 SECTION 6 4643 S Ulster Street | Suite 1040 | Denver, CO 80237 303.694.1900 | innovestinc.com Innovest’s Long-Term Outlook for the Economy and Capital Markets Privileged and Confidential January 2018 Poudre Fire Authority New and Old Hire Money Purchase Pension Plans © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL PORTFOLIO CONSTRUCTION: LOOKING FORWARD Asset allocation The largest impact on portfolio returns Focusing on past returns Dangerous for portfolio design Opportunities Uncovered by due diligence Forecasts Inevitably imprecise Used with permission. 2 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL SAMPLE PORTFOLIO: THEN AND NOW Source: Innovest Portfolio Solutions. 1998 – 2017 Historical Returns 2018 Long-Term Projections Trailing 20-Year Return: 6.7% Trailing 20-Year Standard Deviation: 10.4% Expected Return: 5.3% Expected Standard Deviation: 14.9% Domestic Fixed Income 30% Large Cap (U.S.) 70% Domestic Fixed Income 30% Large Cap (U.S.) 70% 3 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL PERIODIC TABLE OF RETURNS 2008 - 2017 Source: Innovest Portfolio Solutions. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized Return '08 -'17 Annualized Std. Dev. '08 -'17 U.S. Fixed Income MLPs MLPs MLPs Emerging Markets U.S. Equity Real Estate Real Estate MLPs Emerging Markets U.S. Equity Real Estate 5.24% 85.04% 34.98% 16.99% 18.23% 33.55% 31.78% 4.23% 18.74% 37.28% 8.60% 25.64% Hedge Funds Emerging Markets Real Estate Real Estate Real Estate MLPs U.S. Equity U.S. Fixed Income U.S. Equity Int'l Equity Real Estate Emerging Markets -21.37% 78.51% 28.60% 9.24% 17.59% 29.48% 12.56% 0.55% 12.74% 25.03% 7.28% 23.58% Diversified Portfolio Diversified Portfolio Emerging Markets U.S. Fixed Income Int'l Equity Int'l Equity MLPs U.S. Equity Emerging Markets U.S. Equity MLPs MLPs -32.94% 32.43% 18.88% 7.84% 17.32% 22.78% 7.61% 0.48% 11.19% 21.13% 6.78% 20.63% U.S. Equity Int'l Equity U.S. Equity U.S. Equity U.S. Equity Diversified Portfolio Diversified Portfolio Hedge Funds Diversified Portfolio Diversified Portfolio Diversified Portfolio Int'l Equity -37.31% 31.78% 16.93% 1.03% 16.42% 17.59% 6.76% -0.27% 7.64% 14.33% 5.46% 19.62% © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL SUMMARY: INNOVEST’S LONG-TERM OUTLOOK Valuations are high Healthy economic fundamentals and low interest rates have supported equities. Demographic headwinds and economic uncertainty support long-term caution. Given recent strong returns and high valuations, we have reduced long-term projected investment returns. Volatility Have a plan, including portfolio rebalancing. Continue to consider exposure to non-correlated assets. The most effective investment strategy Remain diversified and focused on the long term. Remain exposed to growth but manage future return expectations. Consider more opportunistic areas within asset classes. Remember that market timing is an exercise in futility. 1 2 3 5 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL INNOVEST’S CAPITAL MARKETS PROCESS GLOBAL ECONOMICS ASSET CLASS PROJECTIONS ASSET ALLOCATION STUDIES Monetary Policy Employment & Wages Debt Levels Returns Volatility Correlations Valuations Earnings Growth Dividend Yields Nominal and Real Rates Inflation Credit Spreads Quantitative Analysis Valuations Qualitative Assessments Equities Fixed Income Diversifiers Inflation Fiscal Policy & Politics Portfolio Risk Portfolio Range of Returns Opportunities ASSET CLASS FUNDAMENTALS 6 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL • The working-age population is declining, which will likely reduce tax receipts and increase pressure on government spending on healthcare and income security programs. • Lack of political courage to address persistent budget deficits is likely to persist and add to already high debt levels. • Growth of the middle class, particularly in emerging economies, could help counteract unfavorable demographic ramifications on global growth. • Despite long-term threats resulting from demographic challenges, recession risk is low in the near- term. Working-Age Population As a % of Total Population in Each Country “Working age” defined as those age 15 through 64. Reported 10/29/2017. Sources: Charles Schwab and World Bank data. GLOBAL ECONOMICS: DEMOGRAPHIC HEADWINDS 7 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL • Quantitative easing was implemented in the years following the global financial crisis to help stabilize the world economy. • The unwinding of up to $14 trillion in central banks’ quantitative easing assets has considerable unknown consequences. • World economies are reaching full capacity, which has historically led to moderate inflationary pressures and higher short-term interest rates globally. Sources: Central Banks, Thomson Reuters Datastream, and Fathom Consulting. Reported Sept. 2017. Central Banks’ Assets GLOBAL ECONOMICS: MONETARY UNCERTAINTY 8 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL IMPLICATIONS OF TAX REFORM • The 2017 Tax Cuts and Jobs Act will accrue benefits to most corporations and individuals. • For individuals, a broad reduction in taxation will likely result in higher consumer spending, particularly in the near-term. • Corporations will benefit from a lower corporate tax rate (which will likely result in repatriation of overseas earnings) as well as 100% expensing of capital spending. The extent to which capital spending increases will be dependent on whether corporations decide to reinvest or repurchase stock. – Companies with higher tax rates (small companies and high tax sectors such as banks, telecoms, consumer discretionary stocks) will likely benefit the most. • Increased consumer and business spending may boost GDP growth in the near term, however it could limit growth in U.S. corporate operating earnings due to: – Lower unemployment and upward pressure on wages and inflation. – Potentially leading the Federal Reserve to raise rates faster than expected. • The itemization limit on property taxes and mortgage deductions could negatively impact real estate prices for homeowners. 9 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL EQUITIES: VALUATIONS DM = Developed Markets; EM = Emerging Markets Valuations refer to NTMA P/E for U.S. and Developed Markets, and P/B for Emerging Markets. Data as of 12/31/2017. Sources: IBES, FactSet, MSCI, Standard & Poor’s, and J.P. Morgan Asset Management. < Undervalued Overvalued > Equity Valuations Drive Long-Term Returns U.S. Above long-term averages Developed Markets Slightly above long-term averages Emerging Markets At long-term averages 10 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL • Over the past 37 years, the S&P 500 has had an average intra-year decline of ~14%. • In 2017, investors experienced record peaks in equity markets accompanied by historic lows in volatility. • Going forward, investors should expect increased volatility highlighting the need to remain well diversified and disciplined in rebalancing. Bars represent the calendar year return for given year, circles represent the intra-year drawdown for the give calendar year. Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during the year. For illustrative purposes only. Returns shown are calendar year returns from 1980 to 2017, over which time period the average annual return was 8.8%. Data as of December 31, 2017. EQUITIES: VOLATILITY Bars = Calendar year return Circles = Calendar year intra-year decline 11 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL -40% -30% -20% -10% 0% 10% 20% 30% 40% Outperformance Over 36-Month Period 36-month Period Ending U.S. vs International Developed Equities U.S. Equities Outperform International Developed Equities Outperform Chart as of 12/31/2017. U.S. Equities represented by S&P 500 Index returns. International (Developed) Equities represented by MSCI EAFE Index. Source: Innovest Portfolio Solutions. • Equity market performance tends to move in cycles. • U.S. outperformance reversed in 2017 and may mark the start of a new cycle. • Investors should maintain diversified geographic exposure across equity allocations as timing of cyclical turns is impossible to predict. EQUITIES: U.S. VERSUS INTERNATIONAL 12 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL FIXED INCOME: INTEREST RATES • It is anticipated that the Fed will continue its policy of modest rate hikes into 2018. • Rate increases are often positive for equities, but can cause bond prices to fall over concerns of higher inflation. • This chart shows how an interest rate hike can affect returns of U.S. aggregate bonds, if spreads hold steady. Source: Bloomberg Barclays. Bloomberg Barclays Aggregate Bond Index used in projections. J.P. Morgan Asset Management as of 12/31/2017. Impact of Spike in Interest Rates on High-Quality Bonds -3.2 -6.1% -9.0% -10% -8% -6% -4% -2% 0% +1% +1.5% +2% Total Return 13 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL FIXED INCOME: SPREADS • Floating rate loan and high yield bond spreads, the difference in yield relative to a U.S. Treasury of the same maturity, have narrowed and are currently below median relative to history. • Spread compression has been supported by very low expectations of defaults. • An economic recession would pose a significant headwind for returns due to increasing default risk. Spreads are Low Spreads are reported in basis points. Source: Eaton Vance. Spread history measures past 15 years. Floating-Rate Loans represented by S&P/LSTA Leveraged Loan Index. High Yield represented by ICE BofA Merrill Lynch US High Yield Index. Factset as of 12/31/2017. 14 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL ALTERNATIVES: VOLATILITY • Hedge Funds, Private Real Estate, Private Equity, and Reinsurance have consistently exhibited less volatility than equities and less extreme drawdowns. • Alternatives provide attractive diversification benefits in the face of challenges for fixed income and equities. Volatility is shown as a moving average of each investment’s 20 year standard deviation. Source: Innovest Portfolio Solutions. Data represents each reported index. S&P 500 Large Cap (U.S.) Cambridge Associate US Private Equity Index NCREIF ODCE Real Estate HFRI Fund Weighted Composite Index Bloomberg Barclays Aggregate Index SwissRe Global Cat Bond TR USD 15 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL LONG-TERM PROJECTIONS EXPECTED RETURNS OVER A 5-10 YEAR PERIOD Projections (%) Asset Class 2018 Return 2017 Return Change 2018 Standard Deviation Broad Domestic Equity 6.75% 7.00% -0.25% 22.75% Large Cap (U.S.) 6.50% 6.75% -0.25% 21.89% Small/Mid Cap (U.S.) 7.00% 7.25% -0.25% 26.98% International Equity 7.00% 8.00% -1.00% 26.35% Int'l Small Equity 7.50% 9.50% -2.00% 29.82% Global Equity 7.00% 7.50% -0.50% 24.53% Emerging Market Equity 8.00% 9.50% -1.50% 33.22% Domestic Fixed Income 2.50% 2.75% -0.25% 3.96% Defensive Fixed Income 1.75% 1.75% 0.00% 2.37% Float. Rate Corp Loans 5.25% 5.25% 0.00% 15.75% High Yield Fixed Income 4.25% 4.50% -0.25% 16.65% TIPS 2.50% 2.50% 0.00% 6.07% Stable Value 1.50% 1.75% -0.25% 0.67% Muni Fixed Income 2.25% 2.50% -0.25% 5.41% Defensive Muni F.I. 1.25% 1.50% -0.25% 1.82% Emerging Market Debt 4.00% 4.75% -0.75% 14.71% Global Fixed Income 1.50% 1.75% -0.25% 7.02% Projections (%) Asset Class 2018 Return 2017 Return Change 2018 Standard Deviation Commodities 4.00% 4.50% -0.50% 25.44% Low Correlated Hedge 5.25% 5.50% -0.25% 9.29% Liquid Low Correlated Hedge 4.75% 5.00% -0.25% 9.28% Cons. Low Correlated Hedge 4.25% 4.50% -0.25% 8.15% Hedge Funds 6.75% 7.00% -0.25% 11.14% Private Equity 9.00% 9.50% -0.50% 14.85% Listed Private Equity 7.50% 8.00% -0.50% 46.39% Illiquid Credit 7.25% 7.50% -0.25% 10.87% Real Estate 6.25% 7.00% -0.75% 11.92% Domestic REITs 5.75% 6.25% -0.50% 36.88% Global REITs 5.75% 6.00% -0.25% 31.95% Reinsurance 6.00% 6.00% 0.00% 8.04% MLPs (pre-tax) 9.50% 10.00% -0.50% 22.89% MLPs 5.75% 6.00% -0.25% 22.89% Cash Equivalents 1.25% 1.50% -0.25% 1.08% Inflation 2.25% 2.25% 0.00% Source: Innovest Portfolio Solutions. 16 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL LONG-TERM PROJECTED RISK AND RETURNS See important disclosures at the end of this document. Capital Markets Projections Risk vs. Return Scatter Chart Source: Innovest Portfolio Solutions. 17 Objective 4%-6% Asset Allocation Study- Conservative 2017 Characteristics Efficient Frontier 2018 - Asset Mix Alternatives 2018 - Range of Projected Returns - 1 Year 0 1 2 3 4 5 6 7 Projected Return (%) 0 5 10 15 20 25 Projected Risk (%) IPS IPS Mix 1 Mix 2 Mix 3 95th Percentile (8%) (8%) (9%) (11%) 99th Percentile (13%) (12%) (15%) (17%) Prob > 0.00% 69% 70% 68% 66% Portfolio Component IPS Mix 1 Mix 2 Mix 3 Large Cap (U.S.) 11% 11% 13% 15% Small/Mid Cap (U.S.) 5% 4% 5% 6% Int'l Equity (Developed) 7% 9% 11% 13% Emerging Mkt Equity 3% 3% 4% 4% Domestic Fixed Inc. 41% 46% 41% 35% High Yield 3% 0% 0% 0% Float. Rate Corp Loans 9% 7% 7% 7% Stable Value 10% 10% 10% 10% Liquid Low Corr Hedge 10% 10% 10% 10% Commodities 1% 0% 0% 0% Totals 100% 100% 100% 100% Expected Return 4.09% 4.00% 4.25% 4.50% Standard Deviation 7.95% 7.38% 8.75% 10.15% Sharpe Ratio 0.35 0.37 0.34 0.32 Portfolio Component IPS Large Cap (U.S.) 11% Small/Mid Cap (U.S.) 5% Int'l Equity (Developed) 7% Emerging Mkt Equity 3% Domestic Fixed Inc. 41% High Yield 3% Float. Rate Corp Loans 9% Stable Value 10% Liquid Low Corr Hedge 10% Commodities 1% Totals 100% Expected Return 4.41% Standard Deviation 8.03% Sharpe Ratio 0.36 -15 -10 -5 Objective 5%-7% Asset Allocation Study- Moderate 2017 Characteristics Efficient Frontier 2018 - Asset Mix Alternatives 2018 - Range of Projected Returns - 1 Year 0 1 2 3 4 5 6 7 Projected Return (%) 0 5 10 15 20 25 Projected Risk (%) IPS IPS Mix 1 Mix 2 Mix 3 95th Percentile (16%) (14%) (16%) (18%) 99th Percentile (23%) (21%) (23%) (26%) Prob > 0.00% 63% 64% 62% 62% Portfolio Component IPS Mix 1 Mix 2 Mix 3 Large Cap (U.S.) 22% 19% 22% 24% Small/Mid Cap (U.S.) 9% 8% 9% 10% Int'l Equity (Developed) 13% 16% 18% 20% Emerging Mkt Equity 5% 5% 6% 7% Domestic Fixed Inc. 21% 30% 24% 18% High Yield 3% 0% 0% 0% Float. Rate Corp Loans 9% 7% 7% 7% Stable Value 5% 5% 5% 5% Liquid Low Corr Hedge 10% 10% 10% 10% Commodities 3% 0% 0% 0% Totals 100% 100% 100% 100% Expected Return 5.16% 5.00% 5.25% 5.50% Standard Deviation 13.70% 12.65% 14.08% 15.51% Sharpe Ratio 0.28 0.29 0.28 0.27 Portfolio Component IPS Large Cap (U.S.) 22% Small/Mid Cap (U.S.) 9% Int'l Equity (Developed) 13% Emerging Mkt Equity 5% Domestic Fixed Inc. 21% High Yield 3% Float. Rate Corp Loans 9% Stable Value 5% Liquid Low Corr Hedge 10% Commodities 3% Totals 100% Expected Return 5.56% Standard Deviation 13.71% Sharpe Ratio 0.29 -30 -20 -10 Objective 6%-8% Asset Allocation Study- Aggressive 2017 Characteristics Efficient Frontier 2018 - Asset Mix Alternatives 2018 - Range of Projected Returns - 1 Year 0 1 2 3 4 5 6 7 Projected Return (%) 0 5 10 15 20 25 Projected Risk (%) IPS IPS Mix 1 Mix 2 Mix 3 95th Percentile (24%) (23%) (24%) (26%) 99th Percentile (34%) (32%) (33%) (36%) Prob > 0.00% 59% 60% 59% 58% Portfolio Component IPS Mix 1 Mix 2 Mix 3 Large Cap (U.S.) 35% 28% 32% 37% Small/Mid Cap (U.S.) 14% 11% 13% 15% Int'l Equity (Developed) 22% 23% 26% 31% Emerging Mkt Equity 9% 8% 9% 10% High Yield 1% 3% 0% 0% Float. Rate Corp Loans 4% 7% 7% 1% Liquid Low Corr Hedge 10% 15% 14% 7% Commodities 5% 5% 0% 0% Totals 100% 100% 100% 100% Expected Return 6.44% 6.25% 6.50% 6.75% Standard Deviation 20.87% 19.55% 20.79% 22.83% Sharpe Ratio 0.25 0.25 0.25 0.24 Portfolio Component IPS Large Cap (U.S.) 35% Small/Mid Cap (U.S.) 14% Int'l Equity (Developed) 22% Emerging Mkt Equity 9% High Yield 1% Float. Rate Corp Loans 4% Liquid Low Corr Hedge 10% Commodities 5% Totals 100% Expected Return 6.97% Standard Deviation 20.79% Sharpe Ratio 0.26 -40 -30 -20 -10 0 10 20 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL Appendix 21 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL PROJECTED VOLATILITY • Based on each asset class’s worst five-year standard deviation over the past 20 years. • Combining low-correlated assets in a portfolio: helps to reduce the volatility of the portfolio. • Focus: the whole portfolio. • Portfolio rebalancing: a proven way to manage volatility. 22 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL PROJECTED CORRELATIONS See important disclosures at the end of this document. Combining asset classes with low correlations can provide potentially lower portfolio volatility. Correlations measure the degree of co-movement between asset classes. Projected correlations uses 20 years of historical data to encompass multiple market cycles and economic conditions. • Correlation of 1.0: The two asset classes move in the same direction, in lockstep • Correlation of (1.0): The two asset classes move in the exact opposite direction • Correlation of 0.0: No relationship in the movement of the two asset classes 23 © 2018 INNOVEST PORTFOLIO SOLUTIONS, LLC PRIVILEGED AND CONFIDENTIAL Given the complexity of the financial markets, individual circumstances, and risk-reward trade-offs of portfolio construction, we believe it is not prudent or advisable to rely solely on forecasts and quantitative modeling. The material herein has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, accounting, or legal advice. No representation is being made as to whether any investment product, strategy, or security is suitable or appropriate for an investor’s particular circumstances. Assumptions, opinions, and forecasts herein constitute our judgment and are subject to change without notice. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The statistical analysis herein was prepared by Innovest Portfolio Solutions LLC with data provided by Investment Metrics (IM). Innovest and IM assume no responsibility for the accuracy of these valuations or return methodologies. Reasonable care has been taken to assure the accuracy of the MPI computer software and database. Innovest and IM disclaim responsibility, financial or otherwise, for the accuracy and completeness of this report. © Copyright 2018 by Innovest Portfolio Solutions LLC and Investment Metrics. Asset Class Projections Expected returns are the long-term projected total rate of return (income and capital gains) for each asset class and is shown in annualized form. Innovest’s 2017 long-term research on the capital markets includes, but is not limited to, resources from Aon Hewitt, Bank of New York Mellon, Callan Associates, Horizon Actuarial Services, JP Morgan Asset Management, Merrill Lynch Global Institutional Consulting, Morgan Stanley Wealth Management, SEI, UBS, Voya Investment Management, Wells Fargo Investment Institute, and Willis Towers Watson. Volatility Standard deviation is a statistical measure of the variability of potential returns around the expected return. Approximately 68% of the returns are expected to fall within plus or minus one standard deviation of the expected return in any single year. Standard deviation is also represented in annualized form. We utilize the single five year period with the highest standard deviation over a 20-year period for each asset class. For asset classes without a 20-year history, we use the longest data series available. Correlations Our projections of asset class correlations are based on 20-year historical correlations between asset classes, as they incorporate several economic and market cycles. The illiquid credit correlation projection uses the Bloomberg Barclays Corporate HY Bond Index as its proxy benchmark, which gives it a perfect correlation of 1.0 with high yield fixed income. DISCLOSURES 24 SECTION 7 Dreaming of a Royal Retirement? Cash flow is king when thinking about your financial future Cash flow is like the water in the moat surrounding a successful retirement. It’s an essential element of financial planning that can help you defend your castle against unexpected expenses, coffer-raiding or overspending. Cash flow planning combines five interdependent activities: setting goals, establishing an emergency fund, calculating your net worth, recording expenses and communicating your wishes to your loved ones — the five elements of cash flow planning. Look from the Tower: Set Goals It’s impossible to plan without having a goal in mind. When it comes to your future finances, start with the basics, whether it’s to pay down school loans or to establish a three-month emergency fund. For example, if you were faced with a $500 unexpected bill, would you be able to cover it? Nearly six in 10 Americans don’t have enough savings to pay a $500 or $1,000 expense, according to Bankrate.1 Without having a cash cushion, emergencies can cause you to tap funds earmarked for other purposes, such as your retirement. An emergency fund not only can help you manage a car or home repair, it can tide you over in the event of an unforeseen illness or job loss. Survey Your Realm: Calculate Your Net Worth Your ability to project your future income needs depends on the clarity of your financial picture today. Your best snapshot for that is your net worth — the total value of what you own minus what you owe. Here’s a simplified worksheet to give you a rough approximation of your personal or household net worth. Net Worth Worksheet A. What You Own (Assets) Value Cash on Hand $ Cash in checking, savings accounts $ Market value of your home and household items $ Stocks, bonds, mutual funds $ Market value of vehicles $ Current value of 401(k), IRA $ Other assets $ TOTAL ASSETS $ B. What You Owe (Liabilities) Value Mortgage $ Home equity loan or line of credit $ Auto loan and credit card balance $ Student loans $ Other liabilities $ TOTAL LIABILITIES $ NET WORTH (A minus B) $ Summon the Scribe! Record Your Expenses Many people who struggle with not knowing where their money went don’t have a firm handle on their expenses. If this fits your description, consider buying a small notebook and recording what you spend every day. Add it up at the end of the month. You may be 2 Published by Innovest Portfolio Solutions 4643 S. Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com We all know how difficult it is to put aside money for the future when there are so many competing claims on your income. Small wonder that half of American households currently have no savings for when they stop working.1 But trimming a few dollars here, a few there in the daily way you shop, drive, cook or use utilities can add up to serious savings and can be a good way to pad your nest egg. Try these 10 savvy tips, adapted from AARP2, and you could add upwards of $3,109 to your wallet this year. Shopping Store brands. A recent survey of the cost of 16 common grocery items showed that name-brand items cost $56.24 while store brands totaled $41.51.3 Annual savings: $766. The soap slope. A branded liquid soap pump costs about $1.50, but a gallon sets you back only $14, good for 17 refills (or $0.68 a pop). Annual savings: $20.4 Robotic rebates. Use your computer to automatically search for savings at joinhoney.com. A toaster priced at $45 recently was priced at $9.99 after mail-in rebate — with free shipping! Savings: $35. Driving Tire-lessly. If the best price for four tires at your local tire shop is $448, try an online store. With free delivery and $80 installation fee, you might save a bundle.5 Savings: $68. Blow ’em up. Underinflating tires by just 5 percent can cost you $2.50 in monthly gas, plus wear and tear.6 Keep them properly inflated. Annual savings: $30. Air it out. Changing your car’s air filter — a big contributor to improving the air quality inside your vehicle — takes just five minutes and will save you $19 in labor.7 Savings: $19. Cooking Dress for success. A simple vinaigrette of Dijon mustard, red wine vinegar, olive oil and salt and pepper can save you $1.50 a week over store- bought dressings. Annual savings: $78. Veg out. Foregoing meat one day a week can save you an estimated $10 per week — and may possibly deliver ecological and health benefits.8 Annual savings: $520. Heating and Cooling Turn off the AC. On average, air conditioning in your home costs 36 cents an hour, but ceiling fans only about 1 cent an hour.9 Assuming you only need cooling for half the year, that could mean $1,533 in annual savings. Pipe up. Insulating your hot water lines The pie chart and accompanying data shown for each portfolio illustrates the percentage allocated to each fund. How is the portfolio diversified? Investment performance results shown above represent past performance and are not indicative of future results. Please read the information contained in the applicable fund prospectuses carefully before investing money. Past Performance Current Age: The age (today) of an average investor with time horizon, risk level, and return expectations of the Conservative Portfolio. Time Horizon: Indicates the number of years (time horizon) to the average retirement age of 65, when the investor will begin spending the money in their account, and the number of years to assumed life expectancy of age 85. Risk Level: The amount of expected risk in the Conservative Portfolio. Risk is measured by the potential loss over a 12-month period that an investor might expect in the Conservative Portfolio, and is calculated via a statistical process consistent with 95% probability. Low: -8% to -14% Expected Return: The level of expected investment return from the Conservative Portfolio. The range of returns shown below indicates the potential gain that an investor might expect each year, on average, over a 5-year period. This is also referred to as the "mean" return, and is calculated using a statistical process to determine a range of probabilities. Low: 4% to 6% Who typically uses this portfolio? Understanding Your Professionally-Managed Portfolios Who typically uses this portfolio? Portfolio Allocation (%) Current Age: over 60 Risk Level: Low Expected Return: Low Time Horizon: Years to Age 65: under 5 Years to Age 85: under 25 Expense Ratio (%) 0.64 Past Performance (%)* December 31, 2017 : $100 £¢ Diamond Hill Lg Cap;I (DHLRX) 4.0 £¢ Vanguard 500 Index;Adm (VFIAX) 3.0 £¢ Fidelity Contrafund (FCNTX) 4.0 £¢ Pru Jenn Mid-Cap Gro;Q (PJGQX) 2.0 £¢ Vanguard Ext Mk Id;Adm (VEXAX) 2.0 £¢ Diamond Hill Lg Cap;Y (DHLYX) 1.0 £¢ Harbor:Internatl;Inst (HAINX) 2.0 £¢ VT Vantagepoint Overseas Eq Ind 3.0 £¢ American Funds EuPc;R6 (RERGX) 2.0 £¢ Oppenheimer Dev Mkts;I (ODVIX) 3.0 £¢ Met West:Total Return;I (MWTIX) 41.0 £¢ JPMorgan:High Yield;I (OHYFX) 3.0 £¢ Eaton Vance Flt Rt;Inst (EIBLX) 9.0 £¢ Vantage Trust PLUS 10.0 £¢ Crdt Suis Cmdty Rtn;Inst (CRSOX) 1.0 £¢ BlkStone:Alt Mlt-Str;I (BXMIX) 3.0 £¢ Litman Greg:Alt Str;Inst (MASFX) 4.0 £¢ J Hancock II:G Ab Rt;R6 (JHASX) 3.0 Last Quarter YTD 1 Year 3 Years 5 Years 10 Years Poudre New Hire Conservative Model 1.82 9.08 9.08 4.39 4.65 N/A Poudre New Hire Conservative Model 12/31/17 *Innovest relies on 3rd party data for these returns. Periods greater than one year are annualized. The pie chart and accompanying data shown for each portfolio illustrates the percentage allocated to each fund. How is the portfolio diversified? Investment performance results shown above represent past performance and are not indicative of future results. Please read the information contained in the applicable fund prospectuses carefully before investing money. Past Performance Current Age: : The age (today) of an average investor with time horizon, risk level, and return expectation of the Moderate Portfolio. Time Horizon: Indicates the number of years (time horizon) to the average retirement age of 65, when the investor will begin spending the money in their account, and the number of years to assumed life expectancy of age 85. Risk Level: The amount of expected risk in the Moderate Portfolio. Risk is measured by the potential loss over a 12-month period that an investor might expect in the Moderate Portfolio, and is calculated via a statistical process consistent with 95% probability. Moderate: -13% to -19% Expected Return: The level of expected investment return from the Moderate Portfolio. The range of returns shown below indicates the potential gain that an investor might expect each year, on average, over a 5-year period. This is also referred to as the "mean" return, and is calculated using a statistical process to determine a range of probabilities. Moderate: 5% to 7% Who typically uses this portfolio? Understanding Your Professionally-Managed Portfolios Who typically uses this portfolio? Portfolio Allocation (%) Current Age: 40 - 60 Risk Level: Moderate Expected Return: Moderate Time Horizon: Years to Age 65: 5 - 25 Years to Age 85: 25 - 45 Past Performance (%)* Expense Ratio (%) 0.66 December 31, 2017 : $100 £¢ Diamond Hill Lg Cap;Y (DHLYX) 7.0 £¢ Vanguard 500 Index;Adm (VFIAX) 8.0 £¢ Fidelity Contrafund (FCNTX) 7.0 £¢ Pru Jenn Mid-Cap Gro;Q (PJGQX) 4.0 £¢ Vanguard Ext Mk Id;Adm (VEXAX) 3.0 £¢ Diamond Hill Sm Cap;Y (DHSYX) 2.0 £¢ Harbor:Internatl;Inst (HAINX) 5.0 £¢ VT Vantagepoint Overseas Eq Ind 4.0 £¢ American Funds EuPc;R6 (RERGX) 4.0 £¢ Oppenheimer Dev Mkts;I (ODVIX) 5.0 £¢ Met West:Total Return;I (MWTIX) 21.0 £¢ JPMorgan:High Yield;I (OHYFX) 3.0 £¢ Eaton Vance Flt Rt;Inst (EIBLX) 9.0 £¢ Vantage Trust PLUS 5.0 £¢ Crdt Suis Cmdty Rtn;Inst (CRSOX) 3.0 £¢ BlkStone:Alt Mlt-Str;I (BXMIX) 3.0 £¢ Litman Greg:Alt Str;Inst (MASFX) 4.0 £¢ J Hancock II:G Ab Rt;R6 (JHASX) 3.0 Last Quarter YTD 1 Year 3 Years 5 Years 10 Years Poudre New Hire Moderate Model 2.97 13.89 13.89 5.93 7.00 N/A Poudre New Hire Moderate Model 12/31/17 *Innovest relies on 3rd party data for these returns. Periods greater than one year are annualized. The pie chart and accompanying data shown for each portfolio illustrates the percentage allocated to each fund. How is the portfolio diversified? Investment performance results shown above represent past performance and are not indicative of future results. Please read the information contained in the applicable fund prospectuses carefully before investing money. Past Performance Current Age: : The age (today) of an average investor with time horizon, risk level, and return expectation of the Aggressive Portfolio. Time Horizon: Indicates the number of years (time horizon) to the average retirement age of 65, when the investor will begin spending the money in their account, and the number of years to assumed life expectancy of age 85. Risk Level: The amount of expected risk in the Aggressive Portfolio. Risk is measured by the potential loss over a 12-month period that an investor might expect in the Aggressive Portfolio, and is calculated via a statistical process consistent with 95% probability. High: -17% to -23% Expected Return: The level of expected investment return from the Aggressive Portfolio. The range of returns shown below indicates the potential gain that an investor might expect each year, on average, over a 5-year period. This is also referred to as the "mean" return, and is calculated using a statistical process to determine a range of probabilities. High: 6% to 8% Who typically uses this portfolio? Understanding Your Professionally-Managed Portfolios Who typically uses this portfolio? Portfolio Allocation (%) Current Age: 30 - 50 Risk Level: High Expected Return: High Time Horizon: Years to Age 65: 15 - 35 Years to Age 85: 35 - 55 Past Performance (%)* Expense Ratio (%) 0.66 December 31, 2017 : $100 £¢ Diamond Hill Lg Cap;Y (DHLYX) 12.0 £¢ Vanguard 500 Index;Adm (VFIAX) 11.0 £¢ Fidelity Contrafund (FCNTX) 12.0 £¢ Pru Jenn Mid-Cap Gro;Q (PJGQX) 7.0 £¢ Vanguard Ext Mk Id;Adm (VEXAX) 4.0 £¢ Diamond Hill Sm Cap;Y (DHSYX) 3.0 £¢ Harbor:Internatl;Inst (HAINX) 7.0 £¢ VT Vantagepoint Overseas Eq Ind 8.0 £¢ American Funds EuPc;R6 (RERGX) 7.0 £¢ Oppenheimer Dev Mkts;I (ODVIX) 9.0 £¢ JPMorgan:High Yield;I (OHYFX) 1.0 £¢ Eaton Vance Flt Rt;Inst (EIBLX) 4.0 £¢ Crdt Suis Cmdty Rtn;Inst (CRSOX) 5.0 £¢ BlkStone:Alt Mlt-Str;I (BXMIX) 3.0 £¢ Litman Greg:Alt Str;Inst (MASFX) 4.0 £¢ J Hancock II:G Ab Rt;R6 (JHASX) 3.0 Last Quarter YTD 1 Year 3 Years 5 Years 10 Years Poudre New Hire Aggressive Model 4.49 20.92 20.92 7.66 9.42 N/A Poudre New Hire Aggressive Model 12/31/17 *Innovest relies on 3rd party data for these returns. Periods greater than one year are annualized. Average 401(k) Plan Expenses 0.99% 0.54% Poudre Fire Plan Fund Name Fund Objective/Category Ticker Category Median Expense Ratio Category Annual Expense For Each $1,000 Mutual Fund Expense Ratio Mutual Fund Annual Expense For Each $1,000 Diamond Hill Large Cap YLg Cap Value DHLYX 1.01% $ 10.10 0.58% $ 5.80 Vanguard 500 Index Admiral Lg Cap Broad VFIAX 1.00% $ 10.00 0.04% $ 0.40 Fidelity® Contrafund® Lg Cap Value FCNTX 1.01% $ 10.10 0.68% $ 6.80 JHancock Disciplined Value Mid Cap R6 Mid Cap Value JVMRX 1.11% $ 11.10 0.77% $ 7.70 Vanguard Extended Market Index Admiral Mid Cap Broad VEXAX 1.14% $ 11.40 0.08% $ 0.80 Prudential Jennison Mid‐Cap Growth Q Mid Cap Growth PJGQX 1.22% $ 13.90 0.58% $ 5.80 Diamond Hill Small Cap YSm Cap Growth DHSYX 1.46% $ 14.60 0.90% $ 9.00 American Beacon Stephens Sm Cp Gr YSm Cap Value SPWYX 1.29% $ 12.90 1.16% $ 11.60 Harbor International Institutional International Lg Cap Value HAINX 1.14% $ 11.40 0.72% $ 7.20 Vantagepoint Overseas Equity Index II International Lg Cap Core VPOEX 1.07% $ 10.70 0.29% $ 2.90 American Funds Europacific Growth R6 International Lg Cap Growth RERGX 1.17% $ 11.70 0.50% $ 5.00 Oppenheimer Developing Markets I Emerging Mkts ODVIX 1.41% $ 14.10 0.88% $ 8.80 Nuveen Real Estate Securities R6 Real Estate FREGX 1.24% $ 12.40 0.87% $ 8.70 Franklin Natural Resources R6 Specialty FNCSX 1.30% $ 13.00 0.57% $ 5.70 Columbia Seligman Comms & Info Inst2 Specialty SCMIX 1.40% $ 14.00 0.97% $ 9.70 MFS® Utilities R6 Specialty MMUKX 1.26% $ 12.60 0.64% $ 6.40 Metropolitan West Total Return Bd I General Fixed Income MWTIX 0.74% $ 7.40 0.44% $ 4.40 Vanguard Total Bond Market Index Adm General Fixed Income VBTLX 0.74% $ 7.40 0.05% $ 0.50 Vanguard Inflation‐Protected Secs Adm General Fixed Income VAIPX 0.74% $ 7.40 0.10% $ 1.00 Vantage Trust PLUS Stable Value VTP‐SV 0.60% $ 6.00 0.58% $ 5.80 Eaton Vance Floating Rate I Floating Rate Corp. Loans EIBLX 1.10% $ 11.00 0.79% $ 7.90 JPMorgan High Yield I High Yield OHYFX 1.04% $ 10.40 0.75% $ 7.50 Credit Suisse Commodity Return Strat I Commodity CRSOX 1.40% $ 14.00 0.79% $ 7.90 Litman Gregory Masters Alt Strats Instl Hedged FoF MASFX 2.05% $ 20.50 1.47% $ 14.70 Blackstone Alternative Multi‐Strategy I Hedged FoF BXMIX 2.05% $ 20.50 2.52% $ 25.20 JHancock Global Absolute Ret Strats R6 Hedged FoF JHASX 2.05% $ 20.50 1.24% $ 12.40 Vantagepoint Milestone 2030 R9 Target Date N/A 0.65% $ 6.50 0.87% $ 8.70 Comparison of Plan Expenses for the Poudre Fire Plan Poudre Fire Plan Expense Estimate Your retirement plan offers many different mutual fund investment options that cover a broad range of risk and investment opportunites. Each fund charges fees for management and operating expenses. These fees are referred to as the expense ratio. This is the percentage of fund assets paid for operating expenses and management fees. The expense ratio typically includes the following types of fees: accounting, administrator, advisor, auditor, board of directors, custodial, distribution (12b‐1), legal, organizational, professional, registration, shareholder reporting, sub‐advisor, and transfer agency. The table below provides a comparison between the median category expense ratio and the actual expense ratio of funds offered through the RMH 401(k). Retirement Plan. Source: Innovest Portfolio Solutions LLC. Plan Expenses ‐ Expenses for your retirement plan include investment, record‐keeping (accounting and reporting), customer service, participant education, trust and custody, and the cost of professionals hired by the Plan, such as investment consultants, accounts and attorneys. The table below provides a comparison between annual plan expenses for the average 401(k) retirement plan (as a percentage of assets) and the actual expenses for the RMH 401(k) Retirement Plan. Source: 401(k) Source Data. Your retirement plan offers many different mutual fund investment options that cover a broad range of risk and investment opportunites. Each fund charges fees for management and operating expenses. These fees are referred to as the expense ratio. This is the percentage of fund assets paid for operating expenses and management fees. The expense ratio typically includes the following types of fees: accounting, administrator, advisor, auditor, board of directors, custodial, distribution (12b‐1), legal, organizational, professional, registration, shareholder reporting, sub‐advisor, and transfer agency. The table below provides a comparison between the median category expense ratio and the actual expense ratio of funds offered through the Poude Fire 401 Plan. Source: Innovest Portfolio Solutions LLC. Plan Expenses ‐ Expenses for your retirement plan include investment, record‐keeping (accounting and reporting), customer service, participant education, trust and custody. The table below provides a comparison between annual plan expenses for the average 401(k) retirement plan (as a percentage of assets) and the actual expenses for the Poudre Fire 401 Plan. Source: 401(k) Source Data. Dreaming of a Royal Retirement? Cash flow is king when thinking about your financial future Cash flow is like the water in the moat surrounding a successful retirement. It’s an essential element of financial planning that can help you defend your castle against unexpected expenses, coffer-raiding or overspending. Cash flow planning combines five interdependent activities: setting goals, establishing an emergency fund, calculating your net worth, recording expenses and communicating your wishes to your loved ones — the five elements of cash flow planning. Look from the Tower: Set Goals It’s impossible to plan without having a goal in mind. When it comes to your future finances, start with the basics, whether it’s to pay down school loans or to establish a three-month emergency fund. For example, if you were faced with a $500 unexpected bill, would you be able to cover it? Nearly six in 10 Americans don’t have enough savings to pay a $500 or $1,000 expense, according to Bankrate.1 Without having a cash cushion, emergencies can cause you to tap funds earmarked for other purposes, such as your retirement. An emergency fund not only can help you manage a car or home repair, it can tide you over in the event of an unforeseen illness or job loss. Survey Your Realm: Calculate Your Net Worth Your ability to project your future income needs depends on the clarity of your financial picture today. Your best snapshot for that is your net worth — the total value of what you own minus what you owe. Here’s a simplified worksheet to give you a rough approximation of your personal or household net worth. Net Worth Worksheet A. What You Own (Assets) Value Cash on Hand $ Cash in checking, savings accounts $ Market value of your home and household items $ Stocks, bonds, mutual funds $ Market value of vehicles $ Current value of 401(k), IRA $ Other assets $ TOTAL ASSETS $ B. What You Owe (Liabilities) Value Mortgage $ Home equity loan or line of credit $ Auto loan and credit card balance $ Student loans $ Other liabilities $ TOTAL LIABILITIES $ NET WORTH (A minus B) $ Summon the Scribe! Record Your Expenses Many people who struggle with not knowing where their money went don’t have a firm handle on their expenses. If this fits your description, consider buying a small notebook and recording what you spend every day. Add it up at the end of the month. You may be 2 Published by Innovest Portfolio Solutions 4643 S. Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com We all know how difficult it is to put aside money for the future when there are so many competing claims on your income. Small wonder that half of American households currently have no savings for when they stop working.1 But trimming a few dollars here, a few there in the daily way you shop, drive, cook or use utilities can add up to serious savings and can be a good way to pad your nest egg. Try these 10 savvy tips, adapted from AARP2, and you could add upwards of $3,109 to your wallet this year. Shopping Store brands. A recent survey of the cost of 16 common grocery items showed that name-brand items cost $56.24 while store brands totaled $41.51.3 Annual savings: $766. The soap slope. A branded liquid soap pump costs about $1.50, but a gallon sets you back only $14, good for 17 refills (or $0.68 a pop). Annual savings: $20.4 Robotic rebates. Use your computer to automatically search for savings at joinhoney.com. A toaster priced at $45 recently was priced at $9.99 after mail-in rebate — with free shipping! Savings: $35. Driving Tire-lessly. If the best price for four tires at your local tire shop is $448, try an online store. With free delivery and $80 installation fee, you might save a bundle.5 Savings: $68. Blow ’em up. Underinflating tires by just 5 percent can cost you $2.50 in monthly gas, plus wear and tear.6 Keep them properly inflated. Annual savings: $30. Air it out. Changing your car’s air filter — a big contributor to improving the air quality inside your vehicle — takes just five minutes and will save you $19 in labor.7 Savings: $19. Cooking Dress for success. A simple vinaigrette of Dijon mustard, red wine vinegar, olive oil and salt and pepper can save you $1.50 a week over store- bought dressings. Annual savings: $78. Veg out. Foregoing meat one day a week can save you an estimated $10 per week — and may possibly deliver ecological and health benefits.8 Annual savings: $520. Heating and Cooling Turn off the AC. On average, air conditioning in your home costs 36 cents an hour, but ceiling fans only about 1 cent an hour.9 Assuming you only need cooling for half the year, that could mean $1,533 in annual savings. Pipe up. Insulating your hot water lines The pie chart and accompanying data shown for each portfolio illustrates the percentage allocated to each fund. How is the portfolio diversified? Investment performance results shown above represent past performance and are not indicative of future results. Please read the information contained in the applicable fund prospectuses carefully before investing money. Past Performance Current Age: The age (today) of an average investor with time horizon, risk level, and return expectations of the Conservative Portfolio. Time Horizon: Indicates the number of years (time horizon) to the average retirement age of 65, when the investor will begin spending the money in their account, and the number of years to assumed life expectancy of age 85. Risk Level: The amount of expected risk in the Conservative Portfolio. Risk is measured by the potential loss over a 12-month period that an investor might expect in the Conservative Portfolio, and is calculated via a statistical process consistent with 95% probability. Low: -8% to -14% Expected Return: The level of expected investment return from the Conservative Portfolio. The range of returns shown below indicates the potential gain that an investor might expect each year, on average, over a 5-year period. This is also referred to as the "mean" return, and is calculated using a statistical process to determine a range of probabilities. Low: 4% to 6% Who typically uses this portfolio? Understanding Your Professionally-Managed Portfolios Who typically uses this portfolio? Portfolio Allocation (%) Current Age: over 60 Risk Level: Low Expected Return: Low Time Horizon: Years to Age 65: under 5 Years to Age 85: under 25 Expense Ratio (%) 0.64 Past Performance (%)* December 31, 2017 : $100 £¢ Diamond Hill Lg Cap;I (DHLRX) 4.0 £¢ Vanguard 500 Index;Adm (VFIAX) 3.0 £¢ Fidelity Contrafund (FCNTX) 4.0 £¢ Pru Jenn Mid-Cap Gro;Q (PJGQX) 2.0 £¢ Vanguard Ext Mk Id;Adm (VEXAX) 2.0 £¢ Diamond Hill Lg Cap;Y (DHLYX) 1.0 £¢ Harbor:Internatl;Inst (HAINX) 2.0 £¢ VT Vantagepoint Overseas Eq Ind 3.0 £¢ American Funds EuPc;R6 (RERGX) 2.0 £¢ Oppenheimer Dev Mkts;I (ODVIX) 3.0 £¢ Met West:Total Return;I (MWTIX) 41.0 £¢ JPMorgan:High Yield;I (OHYFX) 3.0 £¢ Eaton Vance Flt Rt;Inst (EIBLX) 9.0 £¢ Vantage Trust PLUS 10.0 £¢ Crdt Suis Cmdty Rtn;Inst (CRSOX) 1.0 £¢ BlkStone:Alt Mlt-Str;I (BXMIX) 3.0 £¢ Litman Greg:Alt Str;Inst (MASFX) 4.0 £¢ J Hancock II:G Ab Rt;R6 (JHASX) 3.0 Last Quarter YTD 1 Year 3 Years 5 Years 10 Years Poudre Old Hire Conservative Model 1.82 9.08 9.08 4.39 4.65 N/A Poudre Old Hire Conservative Model 12/31/17 *Innovest relies on 3rd party data for these returns. Periods greater than one year are annualized. The pie chart and accompanying data shown for each portfolio illustrates the percentage allocated to each fund. How is the portfolio diversified? Investment performance results shown above represent past performance and are not indicative of future results. Please read the information contained in the applicable fund prospectuses carefully before investing money. Past Performance Current Age: : The age (today) of an average investor with time horizon, risk level, and return expectation of the Moderate Portfolio. Time Horizon: Indicates the number of years (time horizon) to the average retirement age of 65, when the investor will begin spending the money in their account, and the number of years to assumed life expectancy of age 85. Risk Level: The amount of expected risk in the Moderate Portfolio. Risk is measured by the potential loss over a 12-month period that an investor might expect in the Moderate Portfolio, and is calculated via a statistical process consistent with 95% probability. Moderate: -13% to -19% Expected Return: The level of expected investment return from the Moderate Portfolio. The range of returns shown below indicates the potential gain that an investor might expect each year, on average, over a 5-year period. This is also referred to as the "mean" return, and is calculated using a statistical process to determine a range of probabilities. Moderate: 5% to 7% Who typically uses this portfolio? Understanding Your Professionally-Managed Portfolios Who typically uses this portfolio? Portfolio Allocation (%) Current Age: 40 - 60 Risk Level: Moderate Expected Return: Moderate Time Horizon: Years to Age 65: 5 - 25 Years to Age 85: 25 - 45 Past Performance (%)* Expense Ratio (%) 0.66 December 31, 2017 : $100 £¢ Diamond Hill Lg Cap;Y (DHLYX) 7.0 £¢ Vanguard 500 Index;Adm (VFIAX) 8.0 £¢ Fidelity Contrafund (FCNTX) 7.0 £¢ Pru Jenn Mid-Cap Gro;Q (PJGQX) 4.0 £¢ Vanguard Ext Mk Id;Adm (VEXAX) 3.0 £¢ Diamond Hill Sm Cap;Y (DHSYX) 2.0 £¢ Harbor:Internatl;Inst (HAINX) 5.0 £¢ VT Vantagepoint Overseas Eq Ind 4.0 £¢ American Funds EuPc;R6 (RERGX) 4.0 £¢ Oppenheimer Dev Mkts;I (ODVIX) 5.0 £¢ Met West:Total Return;I (MWTIX) 21.0 £¢ JPMorgan:High Yield;I (OHYFX) 3.0 £¢ Eaton Vance Flt Rt;Inst (EIBLX) 9.0 £¢ Vantage Trust PLUS 5.0 £¢ Crdt Suis Cmdty Rtn;Inst (CRSOX) 3.0 £¢ BlkStone:Alt Mlt-Str;I (BXMIX) 3.0 £¢ Litman Greg:Alt Str;Inst (MASFX) 4.0 £¢ J Hancock II:G Ab Rt;R6 (JHASX) 3.0 Last Quarter YTD 1 Year 3 Years 5 Years 10 Years Poudre Old Hire Moderate Model 2.97 13.89 13.89 5.93 7.00 N/A Poudre Old Hire Moderate Model 12/31/17 *Innovest relies on 3rd party data for these returns. Periods greater than one year are annualized. The pie chart and accompanying data shown for each portfolio illustrates the percentage allocated to each fund. How is the portfolio diversified? Investment performance results shown above represent past performance and are not indicative of future results. Please read the information contained in the applicable fund prospectuses carefully before investing money. Past Performance Current Age: : The age (today) of an average investor with time horizon, risk level, and return expectation of the Aggressive Portfolio. Time Horizon: Indicates the number of years (time horizon) to the average retirement age of 65, when the investor will begin spending the money in their account, and the number of years to assumed life expectancy of age 85. Risk Level: The amount of expected risk in the Aggressive Portfolio. Risk is measured by the potential loss over a 12-month period that an investor might expect in the Aggressive Portfolio, and is calculated via a statistical process consistent with 95% probability. High: -17% to -23% Expected Return: The level of expected investment return from the Aggressive Portfolio. The range of returns shown below indicates the potential gain that an investor might expect each year, on average, over a 5-year period. This is also referred to as the "mean" return, and is calculated using a statistical process to determine a range of probabilities. High: 6% to 8% Who typically uses this portfolio? Understanding Your Professionally-Managed Portfolios Who typically uses this portfolio? Portfolio Allocation (%) Current Age: 30 - 50 Risk Level: High Expected Return: High Time Horizon: Years to Age 65: 15 - 35 Years to Age 85: 35 - 55 Past Performance (%)* Expense Ratio (%) 0.66 December 31, 2017 : $100 £¢ Diamond Hill Lg Cap;Y (DHLYX) 12.0 £¢ Vanguard 500 Index;Adm (VFIAX) 11.0 £¢ Fidelity Contrafund (FCNTX) 12.0 £¢ Pru Jenn Mid-Cap Gro;Q (PJGQX) 7.0 £¢ Vanguard Ext Mk Id;Adm (VEXAX) 4.0 £¢ Diamond Hill Sm Cap;Y (DHSYX) 3.0 £¢ Harbor:Internatl;Inst (HAINX) 7.0 £¢ VT Vantagepoint Overseas Eq Ind 8.0 £¢ American Funds EuPc;R6 (RERGX) 7.0 £¢ Oppenheimer Dev Mkts;I (ODVIX) 9.0 £¢ JPMorgan:High Yield;I (OHYFX) 1.0 £¢ Eaton Vance Flt Rt;Inst (EIBLX) 4.0 £¢ Crdt Suis Cmdty Rtn;Inst (CRSOX) 5.0 £¢ BlkStone:Alt Mlt-Str;I (BXMIX) 3.0 £¢ Litman Greg:Alt Str;Inst (MASFX) 4.0 £¢ J Hancock II:G Ab Rt;R6 (JHASX) 3.0 Last Quarter YTD 1 Year 3 Years 5 Years 10 Years Poudre Old Hire Aggressive Model 4.49 20.92 20.92 7.66 9.42 N/A Poudre Old Hire Aggressive Model 12/31/17 *Innovest relies on 3rd party data for these returns. Periods greater than one year are annualized. Average 401(k) Plan Expenses 0.99% 0.54% Poudre Fire Plan Fund Name Fund Objective/Category Ticker Category Median Expense Ratio Category Annual Expense For Each $1,000 Mutual Fund Expense Ratio Mutual Fund Annual Expense For Each $1,000 Diamond Hill Large Cap YLg Cap Value DHLYX 1.01% $ 10.10 0.58% $ 5.80 Vanguard 500 Index Admiral Lg Cap Broad VFIAX 1.00% $ 10.00 0.04% $ 0.40 Fidelity® Contrafund® Lg Cap Value FCNTX 1.01% $ 10.10 0.68% $ 6.80 JHancock Disciplined Value Mid Cap R6 Mid Cap Value JVMRX 1.11% $ 11.10 0.77% $ 7.70 Vanguard Extended Market Index Admiral Mid Cap Broad VEXAX 1.14% $ 11.40 0.08% $ 0.80 Prudential Jennison Mid‐Cap Growth Q Mid Cap Growth PJGQX 1.22% $ 13.90 0.58% $ 5.80 Diamond Hill Small Cap YSm Cap Growth DHSYX 1.46% $ 14.60 0.90% $ 9.00 American Beacon Stephens Sm Cp Gr YSm Cap Value SPWYX 1.29% $ 12.90 1.16% $ 11.60 Harbor International Institutional International Lg Cap Value HAINX 1.14% $ 11.40 0.72% $ 7.20 Vantagepoint Overseas Equity Index II International Lg Cap Core VPOEX 1.07% $ 10.70 0.29% $ 2.90 American Funds Europacific Growth R6 International Lg Cap Growth RERGX 1.17% $ 11.70 0.50% $ 5.00 Oppenheimer Developing Markets I Emerging Mkts ODVIX 1.41% $ 14.10 0.88% $ 8.80 Nuveen Real Estate Securities R6 Real Estate FREGX 1.24% $ 12.40 0.87% $ 8.70 Franklin Natural Resources R6 Specialty FNCSX 1.30% $ 13.00 0.57% $ 5.70 Columbia Seligman Comms & Info Inst2 Specialty SCMIX 1.40% $ 14.00 0.97% $ 9.70 MFS® Utilities R6 Specialty MMUKX 1.26% $ 12.60 0.64% $ 6.40 Metropolitan West Total Return Bd I General Fixed Income MWTIX 0.74% $ 7.40 0.44% $ 4.40 Vanguard Total Bond Market Index Adm General Fixed Income VBTLX 0.74% $ 7.40 0.05% $ 0.50 Vanguard Inflation‐Protected Secs Adm General Fixed Income VAIPX 0.74% $ 7.40 0.10% $ 1.00 Vantage Trust PLUS Stable Value VTP‐SV 0.60% $ 6.00 0.58% $ 5.80 Eaton Vance Floating Rate I Floating Rate Corp. Loans EIBLX 1.10% $ 11.00 0.79% $ 7.90 JPMorgan High Yield I High Yield OHYFX 1.04% $ 10.40 0.75% $ 7.50 Credit Suisse Commodity Return Strat I Commodity CRSOX 1.40% $ 14.00 0.79% $ 7.90 Litman Gregory Masters Alt Strats Instl Hedged FoF MASFX 2.05% $ 20.50 1.47% $ 14.70 Blackstone Alternative Multi‐Strategy I Hedged FoF BXMIX 2.05% $ 20.50 2.52% $ 25.20 JHancock Global Absolute Ret Strats R6 Hedged FoF JHASX 2.05% $ 20.50 1.24% $ 12.40 Vantagepoint Milestone 2030 R9 Target Date N/A 0.65% $ 6.50 0.87% $ 8.70 Comparison of Plan Expenses for the Poudre Fire Plan Poudre Fire Plan Expense Estimate Your retirement plan offers many different mutual fund investment options that cover a broad range of risk and investment opportunites. Each fund charges fees for management and operating expenses. These fees are referred to as the expense ratio. This is the percentage of fund assets paid for operating expenses and management fees. The expense ratio typically includes the following types of fees: accounting, administrator, advisor, auditor, board of directors, custodial, distribution (12b‐1), legal, organizational, professional, registration, shareholder reporting, sub‐advisor, and transfer agency. The table below provides a comparison between the median category expense ratio and the actual expense ratio of funds offered through the RMH 401(k). Retirement Plan. Source: Innovest Portfolio Solutions LLC. Plan Expenses ‐ Expenses for your retirement plan include investment, record‐keeping (accounting and reporting), customer service, participant education, trust and custody, and the cost of professionals hired by the Plan, such as investment consultants, accounts and attorneys. The table below provides a comparison between annual plan expenses for the average 401(k) retirement plan (as a percentage of assets) and the actual expenses for the RMH 401(k) Retirement Plan. Source: 401(k) Source Data. Your retirement plan offers many different mutual fund investment options that cover a broad range of risk and investment opportunites. Each fund charges fees for management and operating expenses. These fees are referred to as the expense ratio. This is the percentage of fund assets paid for operating expenses and management fees. The expense ratio typically includes the following types of fees: accounting, administrator, advisor, auditor, board of directors, custodial, distribution (12b‐1), legal, organizational, professional, registration, shareholder reporting, sub‐advisor, and transfer agency. The table below provides a comparison between the median category expense ratio and the actual expense ratio of funds offered through the Poude Fire 401 Plan. Source: Innovest Portfolio Solutions LLC. Plan Expenses ‐ Expenses for your retirement plan include investment, record‐keeping (accounting and reporting), customer service, participant education, trust and custody. The table below provides a comparison between annual plan expenses for the average 401(k) retirement plan (as a percentage of assets) and the actual expenses for the Poudre Fire 401 Plan. Source: 401(k) Source Data. with preformed foam insulation jackets could lower your power bill by $40 a year. How to Save $3,000 This Year Making thrifty decisions can become a regular habit that adds up 1 “The Real Reason People Don’t Save for Retirement,” Forbes.com, February 24, 2016. https://www.forbes.com/sites/ lawrencelight/2016/02/24/the-real-reason-people-dont-save-for-retirement/#2750189837c5. 2 AARP, Great Money Saving Tips. http://www.aarp.org/money/budgeting-saving/info-2017/great-money-saving-tips.html. 3 http://www.threethriftyguys.com/2016/06/brand-name-vs-no-name-brand-a-price-comparison. Assumes consumers purchase identical items each week. 4 http://www.aarp.org/money/budgeting-saving/info-2017/how-to-save-20-dollars.html. 5 tirebuyer.com. 6 AARP, op cit. 7 Ibid. 8 https://www.aol.com/article/finance/2016/04/29/meatless-monday-can-save-you-money-savings-experiment/21346907/. 9 AARP, op cit. Published by Innovest Portfolio Solutions 4643 S. Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com Whom do I call for help? Account Information > Balances > Investment changes > Change personal info Contact : ICMA-RC 800.669.7400 | www.icmarc.org The Plan’s Investment Consultant Innovest Portfolio Solutions 4643 S. Ulster St., Suite 1040 Denver, CO 80237 303.694.1900 | www.innovestinc.com surprised to see where all your cash is going! Sound the Trumpets: Communicate with Your Household Spouses or significant others often disagree about the role of money in the household. One may see cash as a license to shop and spend, the other for saving. The important thing is to communicate these views and resolve disagreements well before financial stress enters the picture. Cash flow planning is at the core of financial planning, because cash flow can give you the freedom and flexibility to rule your destiny. That’s a worthy goal any king or queen can champion. Winter 2018 1 1 “Six in 10 Americans don’t have $500 in savings,” CNN Money, January 12, 2017. http://money.cnn.com/2017/01/12/pf/americans-lack-of- savings/index.html with preformed foam insulation jackets could lower your power bill by $40 a year. How to Save $3,000 This Year Making thrifty decisions can become a regular habit that adds up 1 “The Real Reason People Don’t Save for Retirement,” Forbes.com, February 24, 2016. https://www.forbes.com/sites/ lawrencelight/2016/02/24/the-real-reason-people-dont-save-for-retirement/#2750189837c5. 2 AARP, Great Money Saving Tips. http://www.aarp.org/money/budgeting-saving/info-2017/great-money-saving-tips.html. 3 http://www.threethriftyguys.com/2016/06/brand-name-vs-no-name-brand-a-price-comparison. Assumes consumers purchase identical items each week. 4 http://www.aarp.org/money/budgeting-saving/info-2017/how-to-save-20-dollars.html. 5 tirebuyer.com. 6 AARP, op cit. 7 Ibid. 8 https://www.aol.com/article/finance/2016/04/29/meatless-monday-can-save-you-money-savings-experiment/21346907/. 9 AARP, op cit. Published by Innovest Portfolio Solutions 4643 S. Ulster Street, Suite 1040 | Denver, CO 80237 | 303.694.1900 | www.innovestinc.com Whom do I call for help? Account Information > Balances > Investment changes > Change personal info Contact : ICMA-RC 800.669.7400 | www.icmarc.org The Plan’s Investment Consultant Innovest Portfolio Solutions 4643 S. Ulster St., Suite 1040 Denver, CO 80237 303.694.1900 | www.innovestinc.com surprised to see where all your cash is going! Sound the Trumpets: Communicate with Your Household Spouses or significant others often disagree about the role of money in the household. One may see cash as a license to shop and spend, the other for saving. The important thing is to communicate these views and resolve disagreements well before financial stress enters the picture. Cash flow planning is at the core of financial planning, because cash flow can give you the freedom and flexibility to rule your destiny. That’s a worthy goal any king or queen can champion. Winter 2018 1 1 “Six in 10 Americans don’t have $500 in savings,” CNN Money, January 12, 2017. http://money.cnn.com/2017/01/12/pf/americans-lack-of- savings/index.html 30 40 50 Annual Return, % IPS 95th Percentile (24%) 99th Percentile (33%) Prob > 0.00% 60% 20 0 10 20 30 Annual Return, % IPS 95th Percentile (15%) 99th Percentile (23%) Prob > 0.00% 64% 19 0 5 10 15 20 Annual Return, % IPS 95th Percentile (8%) 99th Percentile (13%) Prob > 0.00% 70% 18 MLPs Real Estate Diversified Portfolio Diversified Portfolio Diversified Portfolio Hedge Funds U.S. Fixed Income Int'l Equity Real Estate Hedge Funds U.S. Fixed Income U.S. Equity -38.55% 28.60% 14.54% -0.98% 12.64% 8.96% 5.97% -0.81% 7.24% 7.75% 4.01% 16.69% Real Estate U.S. Equity Int'l Equity Hedge Funds Hedge Funds Real Estate Hedge Funds Diversified Portfolio U.S. Fixed Income Real Estate Int'l Equity Diversified Portfolio -39.20% 28.34% 7.75% -5.72% 4.79% 1.86% 3.37% -2.94% 2.65% 4.18% 1.94% 13.42% Int'l Equity Hedge Funds U.S. Fixed Income Int'l Equity U.S. Fixed Income U.S. Fixed Income Emerging Markets Emerging Markets Int'l Equity U.S. Fixed Income Emerging Markets Hedge Funds -43.38% 11.47% 6.54% -12.14% 4.21% -2.02% -2.19% -14.92% 1.00% 3.54% 1.68% 6.62% Emerging Markets U.S. Fixed Income Hedge Funds Emerging Markets MLPs Emerging Markets Int'l Equity MLPs Hedge Funds MLPs Hedge Funds U.S. Fixed Income -53.33% 5.93% 5.70% -18.42% 4.21% -2.60% -4.90% -31.74% 0.51% -8.81% 1.08% 3.26% High Low U.S. Equities: Russell 3000, MLPs: Alerian MLP Infrastructure, Real Estate: Wilshire US REIT, U.S. Fixed Income: BbgBarc US Agg, Int'l Equity: MSCI EAFE, Emerging Markets: MSCI EM, Hedge Funds: HFRI Fund of Funds Composite Diversified Portfolio: Russell 3000: 31%, MSCI EAFE: 18%, MSCI EM: 6%, BbgBarc US Agg: 10%, Wilshire US REIT: 7%, Alerian MLP Infrastructure: 7%, HFRI Fund of Funds Composite: 15%, CSFB Leveraged Loans: 6% High Low 4 dividing by average monthly net assets. Up Capture Ratio - The Up Capture Ratio is a measure of the Investment’s compound return when the Benchmark was up divided by the Benchmark’s co mpound return when the Benchmark was up. The greater the value, the better. Down Capture Ratio - The Down Capture Ratio is a measure of the Investment’s compound return when the Benchmark was down divided by the Benchmark’s compound return when the Benchmark was down. The smaller the value, the better. 57 VantagePoint Milestone 2020 R5 12/31/17 53 52 • • • Fund COMPOSITION GLIDE PATH ASSET CLASS SUMMARY U.S. Large Cap Top 10 Holdings Vantagepoint Core Bond Index Vantagepoint Equity Income Organization: In 1972 the ICMA Retirement Corporation (ICMA-RC) was created by the public sector for the public sector. Vantagepont is housed within ICMA-RC to manage retirements exclusively for public employees. Glide Path Rationale: Vantagepoint supplemented traditional asset-allocation theory with data and assumptions regarding its well-defined client base of public employees. Given public employees conservative approach to investing and low risk- tolerance, the series avoids asset classes such as commodities, foreign, and high yield debt. At retirement, the series focuses on capital preservation over real return. Composition of Funds: Vanagepoint uses a compact lineup of six to eight funds in each individual Milestone portfolio. These are proprietary Vantagepoint products, that are sub-advised by many different third-party asset managers such as T. Rowe Price or Wellington on the equity side. They seek to get diversification through the advent of these managers within the target date series. 50 Years 5 Years 7 Years 10 Years £¢ Litman Greg:Alt Str;Inst 0.67 (61) 4.51 (54) 4.51 (54) 3.48 (34) 4.07 (26) N/A N/A ˜ HFRI Fund of Fund Liquidity Adj. 1.89 (35) 7.20 (32) 7.20 (32) 2.09 (54) 3.48 (36) 2.15 (59) 0.58 (43) Median 0.95 5.05 5.05 2.38 2.46 2.51 0.01 -6.0 -3.0 0.0 3.0 6.0 9.0 12.0 Return (%) -5.0 0.0 5.0 10.0 15.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Litman Greg:Alt Str;Inst 4.07 2.87 ˜ HFRI Fund of Fund Liquidity Adj. 3.48 3.23 ¾ Median 2.46 4.15 Fund Family : Litman/Gregory Fund Advisors LLC Fund Inception : 09/30/2011 Portfolio Manager : Team Managed Total Assets : $1,751 Million Turnover : 142% 2016 2015 2014 2013 2012 2011 2010 Litman Greg:Alt Str;Inst 6.87 (17) -0.80 (30) 3.60 (31) 6.32 (26) 9.41 (11) N/A N/A HFRI Fund of Fund Liquidity Adj. 0.01 (75) -0.76 (30) 2.85 (38) 8.41 (17) 4.27 (56) -6.19 (88) 5.18 (14) IM Absolute Return (MF) Median 2.98 -2.33 2.00 4.02 5.11 -2.45 2.68 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Litman Greg:Alt Str;Inst 3.48 (34) 3.18 (15) 3.00 (30) 6.42 (17) N/A N/A N/A HFRI Fund of Fund Liquidity Adj. 2.09 (54) 0.69 (65) 3.43 (25) 5.15 (29) 1.98 (52) 0.95 (48) 3.05 (38) IM Absolute Return (MF) Median 2.38 1.27 1.83 3.80 2.07 0.91 1.85 Litman Greg:Alt Str;Inst 12/31/17 49 ˜ HFRI Macro: Discr Thematic -1.61 (98) -0.27 (92) -0.27 (92) 0.11 (89) -0.08 (90) -0.52 (94) 0.24 (99) Median 2.95 10.58 10.58 3.17 3.19 3.47 3.08 -6.0 -3.0 0.0 3.0 6.0 9.0 Return (%) -5.0 0.0 5.0 10.0 15.0 20.0 Risk (Standard Deviation %) Return Standard Deviation £¢ J Hancock II:G Ab Rt;I 2.30 3.32 ˜ HFRI Macro: Discr Thematic -0.08 2.70 ¾ Median 3.19 6.43 Fund Family : John Hancock Group Fund Inception : 12/19/2011 Portfolio Manager : Guy Stern Total Assets : $3,295 Million Turnover : 80% 2016 2015 2014 2013 2012 2011 2010 J Hancock II:G Ab Rt;I -2.50 (88) 1.73 (7) 3.95 (24) 4.76 (38) 8.02 (74) N/A N/A HFRI Macro: Discr. Thematic 0.03 (82) 0.59 (11) -1.54 (78) 0.79 (58) 3.44 (89) -6.37 (80) 5.49 (77) IM Alternative Global Macro (MF) Median 4.63 -5.65 1.58 1.54 9.70 -1.72 10.84 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 J Hancock II:G Ab Rt;I 0.96 (79) 1.02 (41) 3.47 (18) 5.56 (43) N/A N/A N/A HFRI Macro: Discr. Thematic 0.11 (89) -0.31 (65) -0.06 (46) 0.88 (85) -0.80 (92) 0.72 (96) 4.18 (97) IM Alternative Global Macro (MF) Median 3.17 0.64 -0.43 4.90 5.28 6.21 9.40 J Hancock II:G Ab Rt;I 12/31/17 48 6.0 9.0 Return (%) -5.0 0.0 5.0 10.0 15.0 20.0 Risk (Standard Deviation %) Return Standard Deviation £¢ BlkStone:Alt Mlt-Str;I 3.51 3.43 ˜ HFRI Fund of Fund Liquidity Adj. 2.07 3.14 ¾ Median 2.26 4.53 Fund Family : Blackstone Alternative Inv Advisors LLC Fund Inception : 06/16/2014 Portfolio Manager : Team Managed Total Assets : $4,353 Million Turnover : 237% 2016 2015 2014 2013 2012 2011 2010 BlkStone:Alt Mlt-Str;I 1.35 (68) 3.55 (9) N/A N/A N/A N/A N/A HFRI Fund of Fund Liquidity Adj. 0.01 (75) -0.76 (30) 2.85 (38) 8.41 (17) 4.27 (56) -6.19 (88) 5.18 (14) IM Absolute Return (MF) Median 2.98 -2.33 2.00 4.02 5.11 -2.45 2.68 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 BlkStone:Alt Mlt-Str;I 4.00 (24) N/A N/A N/A N/A N/A N/A HFRI Fund of Fund Liquidity Adj. 2.09 (54) 0.69 (65) 3.43 (25) 5.15 (29) 1.98 (52) 0.95 (48) 3.05 (38) IM Absolute Return (MF) Median 2.38 1.27 1.83 3.80 2.07 0.91 1.85 BlkStone:Alt Mlt-Str;I 12/31/17 47 -6.8 4.4 1.7 1.7 -5.0 -8.5 -8.1 -6.7 Crdt Suis Comm Rtn Strat Bloomberg Commodity Index Total Return -8.5 -8.4 Return (%) 11.6 11.8 12.0 Risk (Standard Deviation %) Last Quarter 2017 1 Year 3 Years 5 Years 7 Years 10 Years Crdt Suis Comm Rtn Strat 4.42 1.74 1.74 -4.97 -8.47 -8.11 -6.67 Bloomberg Commodity Index Total Return 4.71 1.70 1.70 -5.04 -8.45 -8.15 -6.83 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Crdt Suis Comm Rtn Strat 12.42 -24.96 -16.87 -9.96 -1.83 -12.29 16.93 20.12 -35.47 14.78 Bloomberg Commodity Index Total Return 11.77 -24.66 -17.01 -9.52 -1.06 -13.32 16.83 18.91 -35.65 16.23 Alpha Beta Actual Correlation Up Market Capture Down Market Capture Inception Date Crdt Suis Comm Rtn Strat -0.18 0.98 1.00 97.43 98.67 01/01/2006 Bloomberg Commodity Index Total Return 0.00 1.00 1.00 100.00 100.00 01/01/2006 0.0 10.0 20.0 30.0 40.0 Energy Precious M etals Industrials M etals Livestock Agriculture 29.1 16.2 20.0 5.9 28.8 Crdt Suis Comm Rtn Strat 12/31/17 46 45.7% Style History Dec-2017 Average Style Exposure Capitalization Manager Style Barclays Capital Long Term Govt Bond Barclays Capital U.S. Credit 1-5 Year Index Barclays Capital Long U.S. Credit Barclays Capital 1-5 Yr Gov JPMorgan High Yield 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture JPMorgan High Yield 12/31/17 45 7.5 Return (%) -3.0 0.0 3.0 6.0 9.0 Risk (Standard Deviation %) Return Standard Deviation £¢ JPMorgan High Yield 4.92 4.86 ˜ BC US Corp: High Yield 5.78 5.18 ¾ Median 4.71 4.90 Fund Family : JPMorgan Funds Fund Inception : 11/13/1998 Portfolio Manager : Morgan/Shanahan Total Assets : $4,347 Million Turnover : 52% 2016 2015 2014 2013 2012 2011 2010 JPMorgan High Yield 13.75 (47) -4.54 (60) 2.67 (19) 6.94 (42) 14.81 (48) 2.65 (63) 14.67 (36) Bloomberg Barclays U.S. Corporate High Yield 17.13 (6) -4.47 (59) 2.45 (24) 7.44 (30) 15.81 (29) 4.98 (16) 15.12 (28) IM U.S. High Yield Bonds (MF) Median 13.41 -3.92 1.49 6.61 14.72 3.32 14.04 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 JPMorgan High Yield 5.01 (51) 3.69 (38) 1.58 (44) 8.02 (34) 8.02 (53) 10.56 (50) 20.45 (47) Bloomberg Barclays U.S. Corporate High Yield 6.35 (11) 4.66 (11) 1.69 (40) 8.43 (22) 9.32 (10) 11.86 (9) 24.12 (5) IM U.S. High Yield Bonds (MF) Median 5.02 3.36 1.38 7.48 8.07 10.56 20.22 JPMorgan High Yield 12/31/17 44 Barclays Capital U.S. Credit 1-5 Year Index Barclays Capital Long U.S. Credit Barclays Capital 1-5 Yr Gov Eaton Vance Flt Rt;Inst (EIBLX) 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Eaton Vance Flt Rt;Inst (EIBLX) 12/31/17 43 ˜ CSFB Leveraged Loan Idx 1.17 (26) 4.26 (18) 4.26 (18) 4.49 (22) 4.33 (3) 4.67 (6) 4.56 (3) Median 1.01 3.53 3.53 3.84 3.26 3.78 3.72 0.0 1.0 2.0 3.0 4.0 5.0 Return (%) 0.0 0.8 1.6 2.4 3.2 4.0 4.8 Risk (Standard Deviation %) Return Standard Deviation £¢ Eaton Vance Flt Rt;Inst (EIBLX) 3.78 2.58 ˜ CSFB Leveraged Loan Idx 4.33 2.32 ¾ Median 3.26 2.58 Fund Family : Eaton Vance Management Fund Inception : 01/30/2001 Portfolio Manager : Page/Russ Total Assets : $6,083 Million Turnover : 27% 2016 2015 2014 2013 2012 2011 2010 Eaton Vance Flt Rt;Inst (EIBLX) 11.07 (29) -1.63 (53) 0.63 (29) 4.82 (51) 8.27 (67) 2.44 (9) 9.55 (43) Credit Suisse Leveraged Loan Index 9.84 (56) -0.39 (22) 2.06 (1) 6.15 (4) 9.42 (33) 1.80 (29) 9.97 (39) Loan Participation Mutual Funds Median 10.00 -1.53 0.25 4.86 8.89 1.43 9.17 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Eaton Vance Flt Rt;Inst (EIBLX) 4.50 (19) 3.21 (20) 1.24 (41) 4.53 (52) 5.15 (43) 6.71 (36) 18.02 (17) Credit Suisse Leveraged Loan Index 4.49 (22) 3.75 (3) 2.58 (2) 5.84 (3) 5.74 (13) 6.99 (27) 17.49 (30) Loan Participation Mutual Funds Median 3.84 2.72 0.99 4.54 5.00 6.45 16.28 Eaton Vance Flt Rt;Inst (EIBLX) 12/31/17 42 4% PORTFOLIO ALLOCATION 41 Return Standard Deviation £¢ Vantage Trust Plus 2.41 0.06 ˜ Ryan 3 Yr GIC Master Index 1.25 0.11 ¾ Median 1.82 0.09 2016 2015 2014 2013 2012 2011 2010 Vantage Trust Plus 2.29 (1) 2.34 (1) 2.39 (3) 2.59 (1) 3.03 (8) 3.50 (19) 3.85 (29) Ryan 3 Yr GIC Master Index 1.39 (94) 1.16 (95) 1.03 (95) 1.06 (93) 1.48 (99) 2.44 (63) 3.53 (40) IM U.S. GIC/Stable Value (SA+CF) Median 1.83 1.81 1.74 1.74 2.41 2.92 3.39 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Vantage Trust Plus 2.36 (1) 2.34 (1) 2.44 (1) 2.67 (1) 3.04 (1) 3.46 (21) 3.84 (21) Ryan 3 Yr GIC Master Index 1.38 (100) 1.19 (98) 1.09 (96) 1.19 (100) 1.66 (97) 2.48 (79) 3.48 (32) IM U.S. GIC/Stable Value (SA+CF) Median 1.88 1.76 1.81 1.97 2.37 2.85 3.20 Vantage Trust Plus 12/31/17 40 Down Capture Vanguard Infl-Prot 12/31/17 39 Return Standard Deviation £¢ Vanguard Infl-Prot 0.06 4.56 ˜ BC U.S. Treasury: U.S. TIPS 0.13 4.42 ¾ Median -0.27 4.26 Fund Family : Vanguard Group Inc Fund Inception : 06/10/2005 Portfolio Manager : Gemma Wright- Casparius Total Assets : $13,763 Million Turnover : 27% 2016 2015 2014 2013 2012 2011 2010 Vanguard Infl-Prot 4.62 (40) -1.69 (37) 3.97 (6) -8.86 (57) 6.90 (24) 13.29 (12) 6.31 (29) Bloomberg Barclays U.S. TIPS Index 4.68 (36) -1.44 (29) 3.64 (8) -8.61 (45) 6.98 (22) 13.56 (7) 6.31 (29) IM U.S. TIPS (MF) Median 4.39 -2.07 2.10 -8.70 6.31 11.88 5.84 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Vanguard Infl-Prot 1.91 (32) 2.26 (11) -2.34 (28) 0.43 (24) 3.34 (15) 8.79 (19) 10.15 (22) Bloomberg Barclays U.S. TIPS Index 2.05 (24) 2.26 (10) -2.27 (25) 0.44 (24) 3.55 (7) 8.90 (14) 10.38 (18) IM U.S. TIPS (MF) Median 1.60 1.36 -2.79 -0.05 2.86 8.19 9.25 Vanguard Infl-Prot 12/31/17 38 Average Style Exposure Capitalization Manager Style Barclays Capital Long Term Govt Bond Barclays Capital U.S. Credit 1-5 Year Index Barclays Capital Long U.S. Credit Barclays Capital 1-5 Yr Gov Vanguard Tot Bd 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Vanguard Tot Bd 12/31/17 37 Manager : Joshua C. Barrickman Total Assets : $79,818 Million Turnover : 61% 2016 2015 2014 2013 2012 2011 2010 Vanguard Tot Bd 2.60 (63) 0.40 (29) 5.89 (31) -2.14 (58) 4.15 (82) 7.69 (14) 6.54 (69) Bloomberg Barclays U.S. Aggregate Index 2.65 (61) 0.55 (19) 5.97 (27) -2.02 (53) 4.21 (80) 7.84 (11) 6.54 (69) IM U.S. Broad Market Core Fixed Income (MF) Median 2.85 0.00 5.55 -1.98 5.98 6.65 7.24 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Vanguard Tot Bd 2.18 (49) 2.94 (39) 1.33 (34) 2.58 (70) 3.15 (65) 6.12 (69) 6.75 (82) Bloomberg Barclays U.S. Aggregate Index 2.24 (43) 3.03 (31) 1.44 (25) 2.66 (67) 3.26 (59) 6.19 (67) 6.77 (81) IM U.S. Broad Market Core Fixed Income (MF) Median 2.16 2.80 1.10 3.07 3.46 6.69 8.76 Vanguard Tot Bd 12/31/17 36 11.1% 22.3% 44.7% Style History Dec-2017 Average Style Exposure Capitalization Manager Style Barclays Capital Long Term Govt Bond Barclays Capital U.S. Credit 1-5 Year Index Barclays Capital Long U.S. Credit Barclays Capital 1-5 Yr Gov Met West:Total Return 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Met West:Total Return 12/31/17 35 ˜ BC Aggregate Idx 0.39 (40) 3.54 (52) 3.54 (52) 2.24 (43) 2.10 (39) 3.20 (49) 4.01 (48) Median 0.35 3.58 3.58 2.16 1.96 3.19 3.97 -1.0 0.0 1.0 2.0 3.0 4.0 Return (%) 0.6 1.2 1.8 2.4 3.0 3.6 4.2 Risk (Standard Deviation %) Return Standard Deviation £¢ Met West:Total Return 2.51 2.64 ˜ BC Aggregate Idx 2.10 2.82 ¾ Median 1.96 2.86 Fund Family : Metropolitan West Asset Management LLC Fund Inception : 03/31/2000 Portfolio Manager : Team Managed Total Assets : $48,270 Million Turnover : 313% 2016 2015 2014 2013 2012 2011 2010 Met West:Total Return 2.46 (70) 0.29 (35) 5.99 (26) 0.50 (2) 11.55 (1) 5.52 (81) 11.66 (2) Bloomberg Barclays U.S. Aggregate Index 2.65 (61) 0.55 (19) 5.97 (27) -2.02 (53) 4.21 (80) 7.84 (11) 6.54 (69) IM U.S. Broad Market Core Fixed Income (MF) Median 2.85 0.00 5.55 -1.98 5.98 6.65 7.24 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Met West:Total Return 2.05 (59) 2.88 (44) 2.22 (4) 5.92 (1) 5.76 (1) 9.54 (1) 11.39 (11) Bloomberg Barclays U.S. Aggregate Index 2.24 (43) 3.03 (31) 1.44 (25) 2.66 (67) 3.26 (59) 6.19 (67) 6.77 (81) IM U.S. Broad Market Core Fixed Income (MF) Median 2.16 2.80 1.10 3.07 3.46 6.69 8.76 Met West:Total Return 12/31/17 34 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture MFS Utilities;A (MMUFX) 12/31/17 33 £¢ MFS Utilities;A (MMUFX) 8.05 10.79 ˜ S&P 500 Utilities 12.62 13.67 ¾ Median 10.68 11.77 Fund Family : MFS Investment Management Fund Inception : 02/14/1992 Portfolio Manager : Shaughnessy/Davis Total Assets : $1,961 Million Turnover : 27% 2016 2015 2014 2013 2012 2011 2010 MFS Utilities;A (MMUFX) 11.40 (80) -14.77 (90) 12.58 (84) 20.16 (27) 13.33 (7) 6.58 (75) 13.57 (14) S&P 500 Utilities 16.29 (39) -4.85 (10) 28.98 (1) 13.21 (84) 1.29 (91) 19.91 (2) 5.46 (72) IM Utility Sector (MF) Median 14.88 -8.78 19.75 18.22 5.23 11.12 7.01 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 MFS Utilities;A (MMUFX) 2.88 (92) 2.24 (82) 4.86 (85) 15.31 (26) 13.22 (29) 11.11 (14) 17.16 (6) S&P 500 Utilities 7.45 (9) 12.59 (3) 11.59 (4) 13.94 (59) 11.20 (59) 8.60 (58) 12.27 (59) IM Utility Sector (MF) Median 5.35 6.68 8.42 14.17 12.19 9.04 12.48 MFS Utilities;A (MMUFX) 12/31/17 32 Down Capture Columbia Sel Com&Inf 12/31/17 31 Family : Columbia Threadneedle Investments Fund Inception : 06/23/1983 Portfolio Manager : Paul H. Wick Total Assets : $3,579 Million Turnover : 54% 2016 2015 2014 2013 2012 2011 2010 Columbia Sel Com&Inf 15.38 (24) 9.11 (22) 26.09 (11) 23.32 (98) 7.46 (81) -4.86 (42) 15.29 (68) S&P 500 Information Technology 13.85 (27) 5.92 (44) 20.12 (16) 28.43 (74) 14.82 (37) 2.41 (3) 10.19 (88) IM Science & Technology Sector (MF) Median 10.91 5.52 10.91 34.02 13.36 -6.31 19.19 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Columbia Sel Com&Inf 19.06 (27) 16.65 (11) 19.27 (24) 18.67 (63) 8.03 (87) 5.63 (75) 20.60 (60) S&P 500 Information Technology 18.74 (29) 13.15 (20) 17.78 (39) 20.99 (33) 14.73 (26) 9.02 (44) 22.20 (44) IM Science & Technology Sector (MF) Median 16.87 8.79 16.36 19.44 11.72 8.63 21.56 Columbia Sel Com&Inf 12/31/17 30 Capitalization Manager Style MSCI EAFE Growth Index MSCI EAFE Small Cap MSCI Emerging Markets Index MSCI EAFE Value Index Franklin Natural Res 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Franklin Natural Res 12/31/17 29 Return Standard Deviation £¢ Franklin Natural Res -3.16 21.02 ˜ S&P N American Nat Res 1.07 17.67 ¾ Median -1.18 17.28 Fund Family : Franklin Templeton Investments Fund Inception : 06/05/1995 Portfolio Manager : Fromm/Land/Adam s Total Assets : $335 Million Turnover : 30% 2016 2015 2014 2013 2012 2011 2010 Franklin Natural Res 34.56 (13) -27.85 (67) -20.17 (85) 9.55 (57) -4.89 (81) -11.71 (35) 30.12 (6) S&P North American Natural Res Sector Index (TR) 30.87 (29) -24.28 (50) -9.77 (18) 16.49 (26) 2.20 (46) -7.35 (10) 23.88 (23) IM Global Natural Resources (MF) Median 24.70 -24.32 -13.02 10.58 1.43 -16.31 16.64 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Franklin Natural Res -0.87 (66) -8.14 (59) -14.23 (68) -5.95 (82) -2.74 (63) 3.00 (31) 23.09 (6) S&P North American Natural Res Sector Index (TR) 0.11 (54) -3.66 (23) -7.32 (29) 2.42 (22) 3.32 (18) 5.46 (16) 16.44 (37) IM Global Natural Resources (MF) Median 0.22 -7.01 -10.38 -1.67 -1.57 1.53 14.31 Franklin Natural Res 12/31/17 28 ¾ Median 8.44 13.23 2016 2015 2014 2013 2012 2011 2010 Nuveen Real Estate Secs 6.79 (40) 3.48 (38) 31.28 (18) 1.32 (58) 18.34 (24) 7.89 (50) 30.57 (13) Wilshire U.S. Real Estate Securities Index 7.62 (32) 4.81 (7) 31.53 (13) 2.15 (35) 17.55 (32) 8.56 (40) 29.12 (23) IM Real Estate Sector (MF) Median 6.18 2.88 29.43 1.62 16.85 7.89 27.46 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Nuveen Real Estate Secs 5.28 (37) 13.20 (17) 11.24 (23) 16.32 (15) 8.96 (34) 18.57 (13) 22.51 (19) Wilshire U.S. Real Estate Securities Index 5.75 (26) 14.05 (5) 12.09 (8) 16.46 (12) 9.24 (22) 18.11 (21) 21.89 (32) IM Real Estate Sector (MF) Median 4.89 12.15 10.40 15.27 8.56 17.10 20.96 Nuveen Real Estate Secs 12/31/17 26 12.4 0.3 0.1 0.0 7.9 12.1 6.5 60.7 0.0 Oppenheimer Dev Mkts -3.2 -2.4 -1.6 -0.8 0.0 0.8 1.6 0.1 0.7 -0.3 0.0 0.2 -2.0 -0.3 -1.4 0.6 -0.2 Oppenheimer Dev Mkts MSCI EM (Net) Index -30.0 -15.0 0.0 15.0 30.0 9.7 17.1 -0.3 5.3 11.8 -14.3 -6.0 -8.7 9.0 0.3 0.0 11.8 6.9 -5.5 0.0 17.4 -2.4 5.5 7.6 0.0 Style History Dec-2017 Average Style Exposure Capitalization Manager Style MSCI EAFE Growth Index MSCI EAFE Small Cap MSCI Emerging Markets Index MSCI EAFE Value Index -3.2 -2.4 -1.6 -0.8 0.0 0.8 1.6 2.4 Utilities Telecommunication Services Real Estate Other Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary Cash 0.2 0.1 0.0 0.0 0.1 1.3 0.0 0.2 -0.8 -0.1 -1.1 -2.0 -0.2 Oppenheimer Dev Mkts 12/31/17 25 -8.0 -4.0 0.0 4.0 8.0 12.0 Return (%) 0.0 10.0 20.0 30.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Oppenheimer Dev Mkts 5.01 13.65 ˜ MSCI Emerging Markets (Net) Index 4.35 14.27 ¾ Median 4.18 13.78 Fund Family : OppenheimerFunds Inc Fund Inception : 11/18/1996 Portfolio Manager : Leverenz/Lech Total Assets : $6,245 Million Turnover : 18% 2016 2015 2014 2013 2012 2011 2010 Oppenheimer Dev Mkts 6.89 (58) -14.06 (50) -4.81 (72) 8.35 (16) 20.85 (25) -18.10 (33) 26.98 (10) MSCI EM (Net) Index 11.19 (30) -14.92 (58) -2.19 (43) -2.60 (58) 18.23 (56) -18.42 (36) 18.88 (44) IM Emerging Markets Equity (MF) Median 8.26 -14.07 -2.95 -1.42 18.78 -19.51 18.32 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Oppenheimer Dev Mkts 7.38 (66) -4.37 (74) -3.94 (29) 7.62 (19) 2.36 (13) 7.92 (9) 23.64 (10) MSCI EM (Net) Index 9.10 (39) -2.55 (42) -6.76 (53) 4.05 (55) -2.06 (51) 4.66 (53) 20.07 (26) IM Emerging Markets Equity (MF) Median 8.56 -2.92 -6.50 4.29 -2.04 4.84 17.94 Oppenheimer Dev Mkts 12/31/17 24 25.5 16.0 11.5 0.4 0.2 0.5 24.2 47.1 0.0 0.0 0.0 0.0 Amer Funds EuPc -1.6 -1.2 -0.8 -0.4 0.0 0.4 0.8 0.1 0.0 0.0 0.0 0.0 -0.9 0.0 0.3 -0.1 0.1 0.1 Amer Funds EuPc MSCI EAFE Gr Idx Net -15.0 0.0 15.0 30.0 45.0 6.6 11.1 1.5 3.9 8.3 5.6 -0.3 29.6 -0.7 13.8 5.2 5.4 10.7 12.5 -6.5 1.1 9.2 1.8 0.0 0.0 0.0 0.0 Style History Dec-2017 Average Style Exposure Capitalization Manager Style MSCI EAFE Growth Index MSCI EAFE Small Cap MSCI Emerging Markets Index MSCI EAFE Value Index -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary -0.3 -0.1 -0.1 0.0 -0.4 0.0 0.4 -0.3 0.1 0.3 -0.3 Amer Funds EuPc 12/31/17 23 ˜ MSCI EAFE Gr Idx 5.24 (4) 28.86 (44) 28.86 (44) 9.15 (24) 8.78 (11) 6.60 (25) 2.67 (46) Median 4.07 28.07 28.07 8.11 7.15 5.88 2.57 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Return (%) 8.0 10.0 12.0 14.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Amer Funds EuPc 9.21 10.44 ˜ MSCI EAFE Gr Idx 8.78 11.19 ¾ Median 7.15 10.84 Fund Family : American Funds Fund Inception : 05/01/2009 Portfolio Manager : Team Managed Total Assets : $61,729 Million Turnover : 36% 2016 2015 2014 2013 2012 2011 2010 Amer Funds EuPc 1.01 (22) -0.48 (51) -2.29 (16) 20.58 (20) 19.64 (36) -13.31 (47) 9.76 (55) MSCI EAFE Gr Idx Net -3.04 (79) 4.09 (9) -4.43 (44) 22.55 (9) 16.86 (66) -12.11 (36) 12.25 (40) IM International Large Cap Growth Equity (MF) Median -0.26 -0.48 -4.69 19.10 18.96 -13.42 10.89 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Amer Funds EuPc 9.66 (10) -0.60 (16) 5.45 (11) 12.12 (6) 7.74 (36) 4.42 (51) N/A MSCI EAFE Gr Idx Net 9.15 (24) -1.20 (38) 6.83 (2) 11.03 (36) 7.97 (31) 4.85 (45) 8.47 (60) IM International Large Cap Growth Equity (MF) Median 8.11 -1.75 4.26 10.54 7.36 4.44 8.94 Amer Funds EuPc 12/31/17 22 £¢ Vantagepoint Overseas Eq Idx 7.47 11.25 ˜ MSCI EAFE (Net) Index 7.90 11.57 ¾ Median 7.46 11.08 No data found. 2016 2015 2014 2013 2012 2011 2010 Vantagepoint Overseas Eq Idx 1.07 (49) -1.32 (56) -5.72 (60) 21.70 (39) 18.74 (33) -12.28 (31) 7.54 (75) MSCI EAFE (Net) Index 1.00 (50) -0.81 (46) -4.90 (49) 22.78 (25) 17.32 (63) -12.14 (27) 7.75 (73) IM International Multi-Cap Core Equity (MF) Median 0.99 -0.95 -5.03 20.93 17.92 -13.57 10.00 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Vantagepoint Overseas Eq Idx 7.72 (54) -2.03 (60) 4.23 (54) 10.86 (38) 8.22 (24) 3.85 (44) 6.74 (57) MSCI EAFE (Net) Index 7.80 (53) -1.60 (46) 5.01 (32) 11.06 (33) 8.17 (26) 3.56 (53) 7.65 (42) IM International Multi-Cap Core Equity (MF) Median 7.86 -1.78 4.36 10.32 7.21 3.67 7.09 Vantagepoint Overseas Eq Idx 12/31/17 20 0.2 0.4 23.2 44.8 0.0 0.0 Harbor Intl -1.8 -1.2 -0.6 0.0 0.6 1.2 1.8 2.4 -0.6 0.0 0.0 0.5 0.1 -0.4 1.3 -0.8 -0.1 Harbor Intl MSCI EAFE Val Idx -30.0 -15.0 0.0 15.0 30.0 45.0 2.9 0.0 26.2 6.9 8.3 9.3 2.9 -8.5 -0.2 6.1 3.8 2.5 -3.7 7.4 7.8 0.0 0.0 0.0 Style History Dec-2017 Average Style Exposure Capitalization Manager Style MSCI EAFE Growth Index MSCI EAFE Small Cap MSCI Emerging Markets Index MSCI EAFE Value Index -1.2 -0.9 -0.6 -0.3 0.0 0.3 0.6 0.9 Utilities Telecommunication Services Real Estate Materials Information Technology Industrials Health Care Financials Energy Consumer Staples Consumer Discretionary 0.3 -0.2 -0.1 -0.7 -0.1 0.1 0.4 0.1 -0.7 0.4 0.2 Harbor Intl 12/31/17 19 Years £¢ Harbor Intl 2.18 (100) 22.90 (61) 22.90 (61) 5.82 (95) 5.23 (95) 4.77 (59) 2.12 (20) ˜ MSCI EAFE Value Index (Net) 3.24 (73) 21.44 (83) 21.44 (83) 6.35 (62) 6.95 (28) 5.41 (40) 1.15 (43) Median 3.63 23.93 23.93 6.56 6.42 5.18 0.79 3.6 4.5 5.4 6.3 7.2 8.1 9.0 Return (%) 10.4 11.2 12.0 12.8 13.6 Risk (Standard Deviation %) Return Standard Deviation £¢ Harbor Intl 5.23 11.66 ˜ MSCI EAFE Value Index (Net) 6.95 12.48 ¾ Median 6.42 11.48 Fund Family : Harbor Capital Advisors Inc Fund Inception : 12/29/1987 Portfolio Manager : Appleby/Ducrest/La Torre Total Assets : $28,066 Million Turnover : 14% 2016 2015 2014 2013 2012 2011 2010 Harbor Intl 0.25 (85) -3.82 (71) -6.81 (36) 16.84 (90) 20.87 (12) -11.13 (22) 11.98 (3) MSCI EAFE Val Idx 5.02 (3) -5.68 (89) -5.39 (15) 22.95 (16) 17.69 (43) -12.17 (32) 3.25 (74) IM International Large Cap Value Equity (MF) Median 1.68 -2.97 -9.08 21.36 17.23 -13.36 5.52 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Harbor Intl 5.82 (95) -3.50 (50) 1.55 (91) 9.59 (40) 7.87 (44) 6.35 (6) 11.31 (5) MSCI EAFE Val Idx 6.35 (62) -2.14 (20) 3.14 (29) 11.04 (9) 8.32 (30) 2.19 (59) 6.77 (25) IM International Large Cap Value Equity (MF) Median 6.56 -3.54 2.66 9.36 7.72 2.58 5.97 Harbor Intl 12/31/17 18 10.1 0.7 1.1 3.4 4.7 24.4 18.2 23.7 6.1 1.2 2.6 13.7 Am Beacon:Sm Cp Gro -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 0.0 0.0 0.1 0.0 0.2 0.7 -1.0 0.1 -0.2 0.3 0.0 Am Beacon:Sm Cp Gro Russell 2000 Gr Idx -16.0 -8.0 0.0 8.0 16.0 24.0 0.0 -3.8 0.0 -0.3 2.9 11.7 -1.6 6.3 -1.2 17.4 9.9 6.1 -2.1 1.8 3.9 1.4 7.5 3.3 5.9 8.6 8.5 8.4 Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Am Beacon:Sm Cp Gro 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture American Beacon Stephens SCG 12/31/17 17 9.0 12.0 15.0 18.0 21.0 Return (%) 6.0 9.0 12.0 15.0 18.0 21.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Am Beacon:Sm Cp Gro 11.64 13.70 ˜ Russell 2000 Growth Index 15.21 14.45 ¾ Median 13.89 14.70 Fund Family : American Beacon Advisors Inc Fund Inception : 08/31/2006 Portfolio Manager : Team Managed Total Assets : $464 Million Turnover : 40% 2016 2015 2014 2013 2012 2011 2010 Am Beacon:Sm Cp Gro 10.05 (47) -4.75 (61) -3.08 (84) 42.93 (51) 16.23 (10) 1.77 (12) 26.77 (53) Russell 2000 Gr Idx 11.32 (44) -1.38 (36) 5.60 (16) 43.30 (48) 14.59 (23) -2.91 (36) 29.09 (33) IM U.S. Small Cap Growth Equity (MF) Median 8.64 -3.29 1.55 43.05 11.62 -4.19 27.07 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Am Beacon:Sm Cp Gro 7.78 (57) 0.53 (59) 9.68 (80) 17.21 (50) 19.13 (14) 14.46 (11) 20.74 (29) Russell 2000 Gr Idx 10.28 (42) 5.05 (27) 14.28 (21) 20.14 (24) 16.82 (43) 12.82 (31) 19.00 (41) IM U.S. Small Cap Growth Equity (MF) Median 9.16 2.50 11.81 17.10 15.97 11.67 17.57 American Beacon Stephens SCG 12/31/17 16 3.3 5.7 15.1 6.8 0.6 10.9 0.0 4.2 9.2 12.0 6.1 30.9 6.2 2.7 10.4 Diamond Hill Sm Cap -1.6 -0.8 0.0 0.8 1.6 2.4 3.2 0.1 0.1 0.4 0.0 -0.1 1.0 1.9 -0.2 0.1 -0.1 -0.3 -0.3 Diamond Hill Sm Cap Russell 2000 Value Idx -16.0 -8.0 0.0 8.0 16.0 1.4 5.0 2.0 0.0 0.0 9.7 11.4 -3.0 1.0 7.9 -1.6 3.2 0.5 -7.8 -1.2 0.0 3.7 -0.2 4.4 1.0 0.8 6.3 5.9 6.8 Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Diamond Hill Sm Cap 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Diamond Hill Sm Cap 12/31/17 15 8.0 12.0 16.0 20.0 Return (%) 5.0 10.0 15.0 20.0 25.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Diamond Hill Sm Cap 12.48 10.04 ˜ Russell 2000 Value Index 13.01 13.76 ¾ Median 12.28 13.81 Fund Family : Diamond Hill Capital Management Inc Fund Inception : 04/29/2005 Portfolio Manager : Schindler/Welch/Mo nroe Total Assets : $871 Million Turnover : 15% 2016 2015 2014 2013 2012 2011 2010 Diamond Hill Sm Cap 14.45 (98) -3.47 (9) 4.86 (30) 40.08 (25) 13.17 (65) -6.91 (73) 23.39 (71) Russell 2000 Value Idx 31.74 (23) -7.47 (47) 4.22 (32) 34.52 (50) 18.05 (27) -5.50 (64) 24.50 (58) IM U.S. Small Cap Value Equity (MF) Median 29.17 -7.67 2.84 34.48 15.30 -2.78 24.87 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Diamond Hill Sm Cap 7.02 (69) 5.03 (59) 12.34 (4) 18.46 (33) 13.85 (63) 9.14 (81) 14.13 (82) Russell 2000 Value Idx 9.55 (32) 8.31 (31) 9.06 (41) 18.29 (34) 14.49 (48) 11.57 (51) 12.36 (96) IM U.S. Small Cap Value Equity (MF) Median 8.05 5.52 8.48 16.83 14.43 11.58 16.30 Diamond Hill Sm Cap 12/31/17 14 3.6 17.7 0.1 0.2 3.3 6.4 28.2 16.8 14.2 7.1 2.5 4.1 17.2 Pru Jenn Mid-Cap Gro -1.6 -1.2 -0.8 -0.4 0.0 0.4 0.8 0.0 0.0 0.3 0.1 0.1 -0.5 -0.1 -0.9 0.0 -0.3 -0.2 Pru Jenn Mid-Cap Gro Russell Midcap Growth Index -4.0 0.0 4.0 8.0 12.0 16.0 0.0 0.0 11.1 7.3 6.3 6.7 2.9 -0.6 5.2 1.2 6.5 11.4 6.9 6.0 5.5 5.9 9.5 3.4 9.2 5.6 9.2 7.7 Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Pru Jenn Mid-Cap Gro 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Pru Jenn Mid-Cap Gro 12/31/17 13 10 Years £¢ Pru Jenn Mid-Cap Gro 5.25 (66) 22.28 (77) 22.28 (77) 7.30 (89) 11.48 (92) 10.70 (60) 8.17 (35) ˜ Russell Midcap Growth Index 6.81 (26) 25.27 (42) 25.27 (42) 10.30 (35) 15.30 (23) 12.78 (19) 9.10 (19) Median 5.70 24.57 24.57 9.58 13.54 11.30 7.60 3.0 6.0 9.0 12.0 15.0 18.0 21.0 Return (%) 6.0 8.0 10.0 12.0 14.0 16.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Pru Jenn Mid-Cap Gro 11.48 10.32 ˜ Russell Midcap Growth Index 15.30 10.73 ¾ Median 13.54 11.27 Fund Family : Prudential Investments LLC Fund Inception : 12/31/1996 Portfolio Manager : Mullman/Prasad Total Assets : $1,475 Million Turnover : 24% 2016 2015 2014 2013 2012 2011 2010 Pru Jenn Mid-Cap Gro 3.83 (61) -2.71 (77) 9.16 (26) 27.67 (94) 15.89 (31) 2.11 (9) 19.98 (88) Russell Midcap Growth Index 7.33 (26) -0.20 (48) 11.90 (9) 35.74 (45) 15.81 (32) -1.65 (30) 26.38 (44) IM U.S. Mid Cap Growth Equity (MF) Median 4.84 -0.44 7.14 35.32 14.36 -4.61 25.43 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Pru Jenn Mid-Cap Gro 7.30 (89) 3.31 (62) 10.68 (79) 17.33 (62) 14.74 (37) 12.39 (32) 19.87 (39) Russell Midcap Growth Index 10.30 (35) 6.23 (17) 14.88 (23) 20.71 (18) 15.63 (24) 12.91 (22) 22.06 (15) IM U.S. Mid Cap Growth Equity (MF) Median 9.58 3.80 13.09 18.23 13.96 11.16 18.87 Pru Jenn Mid-Cap Gro 12/31/17 12 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Vanguard Ext Mkt Idx 12/31/17 11 Inc Fund Inception : 12/21/1987 Portfolio Manager : Donald M. Butler Total Assets : $1,647 Million Turnover : 12% 2016 2015 2014 2013 2012 2011 2010 Vanguard Ext Mkt Idx 15.99 (84) -3.39 (37) 7.42 (23) 38.19 (36) 18.31 (16) -3.73 (55) 27.37 (27) S&P Completion Index 15.95 (84) -3.35 (36) 7.50 (22) 38.24 (35) 18.45 (14) -3.71 (55) 27.46 (25) IM U.S. SMID Cap Core Equity (MF) Median 20.35 -4.26 5.25 36.79 15.36 -3.30 25.61 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Vanguard Ext Mkt Idx 9.74 (40) 6.37 (57) 12.77 (19) 20.65 (17) 16.32 (26) 13.20 (26) 19.00 (26) S&P Completion Index 9.80 (39) 6.41 (56) 12.83 (18) 20.74 (14) 16.39 (25) 13.28 (25) 19.10 (25) IM U.S. SMID Cap Core Equity (MF) Median 9.21 6.75 11.50 18.52 15.02 11.78 17.28 Vanguard Ext Mkt Idx 12/31/17 10 4.5 11.0 0.6 14.4 5.4 6.5 11.8 6.5 20.3 7.9 3.9 11.8 JH Disc. MCV -1.2 -0.8 -0.4 0.0 0.4 0.8 -0.1 0.1 0.3 -0.2 0.1 0.4 -0.1 0.0 0.4 -0.2 -0.7 JH Disc. MCV Russell MCV Idx -16.0 -8.0 0.0 8.0 16.0 -4.8 0.0 2.4 6.6 5.9 8.7 1.3 6.8 11.6 -3.7 -5.0 0.9 -7.0 1.9 10.5 5.7 6.9 4.3 7.2 7.2 8.6 6.8 Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value JH Disc. MCV 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture JH Disc. MCV 12/31/17 9 7 Years 10 Years £¢ JH Disc. MCV 5.11 (54) 15.64 (23) 15.64 (23) 10.80 (5) 16.54 (1) 14.40 (1) 11.67 (1) ˜ Russell Midcap Value Index 5.50 (42) 13.34 (44) 13.34 (44) 9.00 (31) 14.68 (20) 12.76 (13) 9.10 (29) Median 5.22 12.62 12.62 7.97 13.44 11.40 8.16 -5.0 0.0 5.0 10.0 15.0 20.0 Return (%) 0.0 4.0 8.0 12.0 16.0 20.0 Risk (Standard Deviation %) Return Standard Deviation £¢ JH Disc. MCV 16.54 11.08 ˜ Russell Midcap Value Index 14.68 10.32 ¾ Median 13.44 11.15 Fund Family : John Hancock Group Fund Inception : 06/02/1997 Portfolio Manager : Pollack/Feeney Jr Total Assets : $10,081 Million Turnover : 50% 2016 2015 2014 2013 2012 2011 2010 JH Disc. MCV 15.25 (79) 2.06 (2) 13.29 (16) 39.49 (11) 18.57 (20) 0.62 (13) 23.24 (38) Russell MCV Idx 20.00 (34) -4.78 (46) 14.75 (9) 33.46 (72) 18.51 (22) -1.38 (37) 24.75 (25) IM U.S. Mid Cap Value Equity (MF) Median 17.06 -5.62 10.26 35.75 16.70 -3.64 21.76 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 JH Disc. MCV 10.80 (5) 10.04 (5) 17.27 (1) 23.28 (7) 18.50 (3) 13.71 (8) 20.47 (12) Russell MCV Idx 9.00 (31) 9.45 (12) 13.40 (22) 21.98 (21) 15.97 (44) 13.39 (11) 18.19 (33) IM U.S. Mid Cap Value Equity (MF) Median 7.97 6.90 12.37 20.27 15.64 11.42 17.08 JH Disc. MCV 12/31/17 8 1.5 2.4 14.9 0.8 0.9 3.9 0.0 2.1 37.2 11.2 15.8 4.2 2.0 5.9 16.0 VT Fidelity Contrafund -1.2 -0.9 -0.6 -0.3 0.0 0.3 0.6 0.0 0.0 0.2 0.0 0.0 -0.6 0.2 0.3 0.2 0.1 0.1 -0.2 VT Fidelity Contrafund S&P 500 Growth -5.0 0.0 5.0 10.0 15.0 20.0 0.0 2.4 3.9 13.2 8.1 7.2 10.1 -0.6 8.2 14.0 11.1 8.7 7.0 8.5 3.1 0.0 7.4 9.1 6.7 0.6 7.6 5.5 6.5 10.1 Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value VT Fidelity Contrafund 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture VT Fidelity Contrafund 12/31/17 7 Years 7 Years 10 Years £¢ VT Fidelity Contrafund 6.75 (47) 32.27 (25) 32.27 (25) 13.33 (22) 16.43 (31) 13.88 (31) 8.96 (39) ˜ S&P 500 Growth 6.80 (44) 27.44 (70) 27.44 (70) 12.86 (30) 17.00 (20) 14.81 (13) 9.99 (13) Median 6.67 29.47 29.47 11.78 15.72 13.07 8.53 6.0 9.0 12.0 15.0 18.0 21.0 Return (%) 6.0 9.0 12.0 15.0 Risk (Standard Deviation %) Return Standard Deviation £¢ VT Fidelity Contrafund 16.43 9.63 ˜ S&P 500 Growth 17.00 9.84 ¾ Median 15.72 10.76 Fund Family : Fidelity Management & Research Company Fund Inception : 05/17/1967 Portfolio Manager : William Danoff Total Assets : $85,634 Million Turnover : 41% 2016 2015 2014 2013 2012 2011 2010 VT Fidelity Contrafund 3.36 (35) 6.46 (40) 9.56 (62) 34.15 (48) 16.24 (36) -0.12 (31) 16.93 (31) S&P 500 Growth 6.89 (8) 5.52 (51) 14.89 (5) 32.75 (63) 14.61 (54) 4.65 (4) 15.05 (51) IM U.S. Large Cap Growth Equity (MF) Median 1.92 5.63 10.51 33.95 14.82 -1.86 15.14 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 VT Fidelity Contrafund 13.33 (22) 6.43 (42) 16.09 (51) 19.54 (52) 15.91 (32) 10.73 (22) 14.70 (58) S&P 500 Growth 12.86 (30) 9.03 (5) 17.19 (28) 20.46 (34) 16.77 (19) 11.33 (14) 16.57 (34) IM U.S. Large Cap Growth Equity (MF) Median 11.78 6.05 16.13 19.65 14.89 9.05 15.30 VT Fidelity Contrafund 12/31/17 6 11.9 3.1 2.0 3.0 3.0 23.9 10.1 14.2 14.7 6.0 8.1 11.9 Vanguard 500 Index -0.2 -0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Vanguard 500 Index S&P 500 Index 0.0 3.0 6.0 9.0 12.0 0.2 4.0 3.2 6.9 9.0 6.1 1.4 8.6 6.1 6.5 9.9 0.2 3.7 3.2 6.9 9.0 6.1 1.5 8.6 6.1 6.5 9.9 Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Vanguard 500 Index 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Vanguard 500 Index 12/31/17 5 Butler/Geiger Total Assets : $217,229 Million Turnover : 4% 2016 2015 2014 2013 2012 2011 2010 Vanguard 500 Index 11.93 (26) 1.36 (28) 13.64 (15) 32.33 (41) 15.96 (41) 2.08 (24) 15.05 (26) S&P 500 Index 11.96 (26) 1.38 (28) 13.69 (15) 32.39 (39) 16.00 (40) 2.11 (24) 15.06 (26) IM U.S. Large Cap Core Equity (MF) Median 10.00 -0.26 11.36 31.82 15.41 -0.55 13.18 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Vanguard 500 Index 11.38 (17) 8.84 (8) 15.09 (17) 20.37 (27) 16.14 (26) 10.85 (18) 14.14 (26) S&P 500 Index 11.41 (17) 8.87 (7) 15.13 (17) 20.41 (26) 16.18 (25) 10.87 (17) 14.11 (26) IM U.S. Large Cap Core Equity (MF) Median 10.11 7.24 13.58 19.26 14.86 9.28 12.95 Vanguard 500 Index 12/31/17 4 19.2 6.1 3.4 1.7 4.2 7.0 8.7 12.2 28.0 10.9 10.8 6.8 Diamond Hill Lg Cap -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 0.4 0.2 0.0 0.1 0.2 0.6 0.4 -1.0 0.0 -0.4 -0.8 Diamond Hill Lg Cap S&P 500 Value -4.0 0.0 4.0 8.0 12.0 16.0 0.0 0.0 0.0 8.8 8.9 12.4 5.9 5.4 7.4 2.9 2.9 -0.9 2.1 3.5 6.6 8.3 5.0 2.9 8.8 6.2 6.5 9.1 Style History Dec-2017 Average Style Exposure Capitalization Manager Style Large Cap Growth Small Cap Value Small Cap Growth Large Cap Value Diamond Hill Lg Cap 50.0 75.0 100.0 125.0 150.0 Up Capture 50.0 70.0 90.0 110.0 130.0 150.0 Down Capture Diamond Hill Lg Cap 12/31/17 3 12.0 15.0 18.0 Return (%) 3.0 6.0 9.0 12.0 15.0 Risk (Standard Deviation %) Return Standard Deviation £¢ Diamond Hill Lg Cap 15.64 10.68 ˜ S&P 500 Value 14.24 9.80 ¾ Median 13.32 10.36 Fund Family : Diamond Hill Capital Management Inc Fund Inception : 01/31/2005 Portfolio Manager : Bath/Welch/Hawley Total Assets : $3,207 Million Turnover : 23% 2016 2015 2014 2013 2012 2011 2010 Diamond Hill Lg Cap 14.63 (44) -0.85 (8) 10.74 (55) 36.60 (10) 12.62 (86) 2.60 (11) 9.72 (92) S&P 500 Value 17.40 (22) -3.13 (33) 12.36 (19) 31.99 (56) 17.68 (26) -0.48 (31) 15.10 (24) IM U.S. Large Cap Value Equity (MF) Median 14.13 -3.86 10.88 32.33 15.79 -2.38 12.70 3 Years Ending Dec-2017 3 Years Ending Dec-2016 3 Years Ending Dec-2015 3 Years Ending Dec-2014 3 Years Ending Dec-2013 3 Years Ending Dec-2012 3 Years Ending Dec-2011 Diamond Hill Lg Cap 10.99 (4) 7.97 (19) 14.47 (4) 19.43 (51) 16.43 (22) 8.23 (55) 13.74 (14) S&P 500 Value 9.47 (23) 8.51 (9) 12.83 (30) 20.40 (33) 15.62 (35) 10.47 (16) 11.55 (39) IM U.S. Large Cap Value Equity (MF) Median 8.47 6.80 12.23 19.47 14.64 8.54 10.96 Diamond Hill Lg Cap 12/31/17 2 Menu Coverage Fidelity Contrafund Nuveen Real Estate Secs VantageTrust Cash Management VantageTrust PLUS Fund Large Diamond Hill Large Cap Vanguard 500 Index FixedEstate Income Domestic Equity Real Value Core 10 Vantagepoint Milestone 2045 141,188 0.20 173,465 0.24 Vantagepoint Milestone 2050 923,021 1.31 991,666 1.36 Vantagepoint MS Retirement Inc 212,734 0.30 217,306 0.30 Target Date Funds 8,558,409 12.13 8,773,395 12.00 Model Portfolios Poudre New Hire Conservative Model - 0.00 - 0.00 Poudre New Hire Moderate Model - 0.00 - 0.00 Poudre New Hire Aggressive Model 468,765 0.66 497,624 0.68 Poudre Fire New Hire Model Portfolios 468,765 0.66 497,624 0.68 Poudre Fire New Hire Total Fund 70,535,920 100.00 73,141,267 100.00 Asset Allocation New Hire 9 VT VantagePoint Milestone 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, 2055 and MS Retirement Income; Conservative, Moderate & Aggressive Portfolios Value Core Growth Harbor International VT Vantagepoint Overseas Equity American Funds EuroPac Guaranteed Min Withdrawal Benefit VT Retirement IncomeAdvantage 8 -> VT Vantagepoint Milestone Target Date Funds R9 3 times — Routine access to closed products, waived investment minimums, lower product fees, and socially responsible mandates — Customized asset allocation, benchmarking and reporting Diverse Client Base — 250+ clients in 21 states — Retirement Plans — Foundations, Endowments and Nonprofits — Wealthy Families *As of October 2017 Privileged and Confidential 2 Marvez, and Rick Rodgers attended the conference. The conference drew more than 150 participants, including representatives from some of the largest public plans in Colorado. On December 7, Innovest sponsored the Rocky Mountain Benefit Plans Conference. The conference featured speakers from Innovest, EKS&H, Sherman & Howard, the U.S. Securities and Exchange Commission, TR Solutions and Empower. The conference was attended by more than 100 plan sponsors. Innovest employees and their families celebrated the holiday season with a gathering at Columbine Country Club. The event included a special visit from Santa, a delicious brunch, and a white elephant gift exchange. Congratulations to Nancy Swanson for winning the Founders Award – representing Innovest’s core values of honesty, integrity, hard work, and dedication to the client. Congratulations to Ryan Murphy for winning the 212-Degree Award, in recognition for his commitment to going the extra step for our clients and team. Congratulations also to Kathy LaLone for winning the annual Service to Others Award for focusing on helping the Innovest team and putting others first. Innovest will host the 18th Annual Rocky Mountain Nonprofit Conference on Wednesday, March 14, 2018. The mission of the conference is to provide an educational forum on topics of interest to enable board members, trustees, and executive staff to improve management of their organizations and their investment portfolios. Registration for the event will open in mid-January. If you have questions, please call Whitney Wilkinson at (303) 694- 1900, ext. 331 or wwilkinson@innovestinc.com. Vice President Katie Sauer. RETIREMENT multiemployer Supplemental Income 401(k) Plan. The claim is that the Board of Trustees and its individual members breached their duty of loyalty and prudence by offering higher cost retail share class mutual funds when identical lower cost institutional share classes were available and that the plan overpaid the- recordkeeping service providers due to revenue sharing arrangements that led to higher cost retail funds. The number of lawsuits filed in the last few years plus the addition of other types of plans besides mega corporate 401(k) plans has caused concern for retirement plan fiduciaries. One of the best ways for plan fiduciaries to keep plans out of the headlines is to make sure that plan sponsors and their representatives understand the fees they are paying and how those fees are being paid. The second is to make certain that there is a process in place to monitor the performance, expenses and available share classes of funds in the plan. Plan sponsors who have revenue sharing funds in their plans might consider crediting back any revenue sharing generated to the participants who are invested in those funds, thereby lowering the net expense ratio of those funds. Plan sponsors that charge their recordkeeping fees to the plan, might consider charging a flat per participant fee to any participant with an account balance. In addition, a set percentage based on plan assets could be allocated across all participant account balances. In some cases it might make sense to have both a flat per head fee and an asset based fee. These are just some ideas of how to make the payment of plan expenses more transparent and equitable for all participants. It is important to remember that neither ERISA nor the Department of Labor requires you to choose the least expensive service provider or fund share class. The least expensive option may not always be the best choice unless cost is the only difference, but acting in the best interests of plan participants is always what really matters. Stay tuned for the next chapter in fee litigation. continued from page 5 6 www.innovestinc.com 3 1 Source: Bloomberg BNA review of docket files 4 5 One of the reasons for the increase in returns is that rebalancing generally means selling investments after their prices have increased relative to other portfolio investments and buying investments that have decreased on a relative basis. A systematic rebalancing program that is essentially automatic can be particularly helpful when investors’ emotions are telling them to buy more of what has gone up and less of what has not. Although an investment to which assets have been added may continue to underperform the rest of the portfolio, over the long run, rebalancing means on average buying low and selling high, improving the portfolio’s performance. The 60/40 portfolio example above illustrates this well. By rebalancing to target in October 2007, an investor would sell part of the stock investment that had outperformed and move the money to bonds. In March 2009, after stocks had fallen, an investor would have moved money from bonds to stocks. Possible Drawbacks: Transaction Costs and Taxes So what are the drawbacks to rebalancing? The primary concerns are transaction costs and taxes. Transaction costs, especially for smaller portfolios, can erode value. As a result, it probably makes sense to set a rebalancing threshold so that transaction costs are only incurred when rebalancing would be most advantageous. For instance, rebalancing only when an investment is 5% above or below target might be appropriate for smaller portfolios, while a 3% threshold might make sense for larger portfolios. Additionally, for taxable portfolios, rebalancing can also create realized gains, particularly when it involves selling appreciated stocks. Consequently, before rebalancing, an investor should consider the tax consequences of any trades before moving forward. WINTER 2018 3 THE BENEFITS OF REBALANCING Chris Meyer Vice President continued on page 4 and will introduce new initiatives based on suggestions in the 2017 survey. Mentorship and leadership training are especially crucial for our younger professionals’ success. We are also excited about the progress of our college internship program and employed seven interns in 2017. Several young professionals were all former Innovest college interns in past years including T.J. Berge, Joe Lemming, Thomas Martin, Kristin Lee, Whitney Wilkinson, and Harrison Levin. Excited for 2018 We are excited about 2018 and have identified some additional areas where we can serve our clients! Market valuations are stretched but the economy is on sound footing, and as we continue to grow, we will add to the professional ranks. Despite a very competitive Denver employment marketplace, Innovest is blessed by our reputation and our ability to attract top professionals into our firm. Thanks to our wonderful clients, professionals, and friends for making last year a successful one! We wish all of you amazing success in 2018! Happy New Year! 2 www.innovestinc.com continued from page 1 Photo (top and bottom): Innovest employees divide into teams for kickball at the annual company picnic. Adding high quality professionals is one of the best ways we add value to clients. In 2017, nine professionals joined our near 50-employee firm. INNOVEST’S RESEARCH REPORT continued on page 2 A NEWSLETTER BY WINTER | 2018 www.innovestinc.com 1 IN THIS ISSUE: A Good 2017. Excited for 2018! The Benefits of Rebalancing Nonprofit Spotlight: Innovest Days of Giving The Next Chapter of Retirement Plan Excessive Fee Lawsuits Employee Spotlight: Becca Ellis Around the Firm 1 3 5 7 4 8 A GOOD 2017. EXCITED FOR 2018! Richard Todd Managing Principal, CEO NEW CLIENTS Innovest was recently selected to provide investment consulting services for: Colorado Permanente Medical Group Operating Reserves Pueblo Water Taylor University Foundation It is not known whether the listed clients approve or disapprove of the services provided. The new clients on page one and in the Client Spotlight are listed with their approval and permission. Board. Innovest would initiate an RFP immediately upon request.