Multi-Manager Mid Cap
as of December 31, 2013
Fund Commentary
During the fourth quarter, a series of strong U.S. economic reports led to the Federal Reserve's tapering decision, announced on December 18. Tapering commences in January 2014 and amounts to a $10 billion reduction in Fed asset purchases, equally split between Treasuries and mortgage-backed securities. The U.S. stock market rallied following the announcement, based on renewed hope for a sustainable economic recovery. During the period, mid-cap stocks underperformed their large- and small-cap counterparts, with the Russell Midcap® Index returning 8.39%. The Russell Midcap® Value Index outpaced the Russell Midcap® Growth Index during the quarter. For the full year, the Russell Midcap® Index gained 34.76%.

The Multi-Manager Mid Cap Fund outperformed the benchmark during the quarter, with a return of 8.49% versus the Russell Midcap® Index return of 8.39%. Stock selection was the primary driver of outperformance during the quarter, with particular strength in the energy and information technology sectors. Performance in the consumer and industrials areas was weaker. For the full year, the Fund returned 35.40%, compared with the benchmark return of 34.76%.

Value sub-adviser LSV was the top performer during the quarter and for the full year. Their focus on low price-to-book stocks was in favor during the period, with their portion of the portfolio particularly strong in the energy segment. Sub-adviser Geneva Capital underperformed during the quarter and for the full year, driven by below-benchmark returns in the consumer and industrial sectors.
Investor Profile

If you're a long-term investor looking to diversify your investments by pursuing the growth potential of mid-sized company stocks, then this Fund may be right for you. It is intended for investors who are aware that mid-sized company stocks are generally riskier than large-company stocks due to greater volatility and less liquidity.

  • Invest in mid-cap stocks through a variety of external mid-cap managers who have distinct investment styles and strategies.
  • 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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