Multi-Manager Emerging Markets Equity
as of June 30, 2014
Fund Commentary
The MSCI Emerging Markets Index gained 6.60%, outperforming developed market indices during the quarter. The strongest gains were posted within the energy, information technology and utilities sectors, while materials, consumer staples and consumer discretionary stocks lagged the broader Index. The Emerging Asia region was the strongest area for the quarter, with India the top-performing market within Emerging Asia and among the best within the broader Index. Taiwan was also a strong performer, rising 9.8%. Latin America in aggregate outperformed the broader Index with a return of 6.8%. With a gain of 7.9%, Brazil made a healthy contribution to its region’s results. The Emerging Europe, Middle East and Africa (EMEA) region was the worst performer, posting a 4.8% return in the quarter.

The Multi-Manager Emerging Markets Equity Fund returned 5.64% during the quarter, compared with the benchmark return of 6.60%. The Fund’s overweight exposure to the consumer discretionary sector represented a drag on returns. In addition, stock selection among technology stocks was relatively weak during the period. From a regional perspective, the Fund performed particularly well within the Pacific ex-China region while underperforming in EMEA.

Sub-adviser performance was mixed during the period. Following a strong first quarter, Westwood’s positions in the financials, materials and technology sectors underperformed the market. PanAgora’s quantitative approach contributed to Fund returns, with particular strength in India.
Investor Profile

If you're a long-term investor looking to diversify your investments by pursuing the growth potential of emerging and frontier market equities, 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.

Investing in emerging markets entails extra risk. The securities markets of emerging countries are less liquid, more volatility, and less regulated than the markets of more developed countries. This risk is magnified in frontier countries since they generally have smaller economies or less developed capital markets than traditional emerging markets.

  • Invest at least 80% of net assets in equity securities of emerging and frontier markets — emerging and frontier markets are defined as markets in MSCI Emerging Markets Index and MSCI Frontier Markets 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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