Multi-Manager International Equity
as of June 30, 2014
Fund Commentary
Non-U.S. equity markets rose during the quarter, with the MSCI ACWI® Ex-USA Index gaining 5.03%. Emerging markets outperformed developed markets, as the MSCI EAFE® Index returned 4.09%, compared with the 6.60% return of the MSCI Emerging Markets Index. Among developed markets, Canada and Norway saw strong performance, driven by significant exposure to the energy sector, which benefited from higher energy prices. Within Japan, the most recent data suggests that the economic cycle is picking up after taking into account the short-term negative impact of Japan’s consumption tax increase in April 2014. Among emerging markets, Asia was the strongest performing region, with India the best performing market within Emerging Asia. Latin America in aggregate outperformed the broader Index with a return of 6.8%. The Emerging Europe, Middle East and Africa (EMEA) region was the bottom performer, posting a 4.8% return.

The Multi-Manager International Equity Fund underperformed for the quarter with a return of 4.03%, compared with the MSCI ACWI® Ex-USA Index return of 5.03%. Stock selection was the primary driver of underperformance, particularly in North America. From a sector perspective, the Fund performed well within health care but lagged among technology and materials stocks.

Among the sub-advisers, each struggled to add value to varying degrees. Northern Cross’s significant overweight to Continental Europe represented a drag on returns as this portion of the market underperformed. Value sub-adviser NFJ was the strongest performer during the quarter, benefiting from an overweight to emerging markets and an underweight in Europe.
Investor Profile

If you're a long-term investor looking to diversify your investments by pursuing the growth potential of international stocks, then this Fund may be right for you. It is intended for investors who are aware that foreign markets may involve additional risks, such as social and political instability, reduced market liquidity, and currency volatility.

  • Invest in companies of any size throughout the world, but primarily in developed markets and generally in securities similar to those in the MSCI ACWI® EX-USA Index.
  • Select complementary managers from a broad universe of investment managers.
  • Blend managers into a single fund in an effort to provide an attractive combination of risk and return.
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Not FDIC insured | May lose value | No bank guarantee

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