srwkhwlfdo$oorfdwlrq $53(7) · hypothetical portfolio illustration 07-16-2013 to 08-31-2017...

Moderately Conservative Portfolio Hypothetical AllocationARP ETF 35

September 01, 2017

Prepared by:Douglas Reed, CIOResearch & Investment SpecialistRFG Global Asset Management, LLC

Prepared for:AmericasRetirementPlan.com

Hypothetical Portfolio Illustration

07-16-2013 to 08-31-2017

Portfolio Summary

Portfolio DJ Moderately Conservative TR USD (USD) Net Amount Invested

0

2

4

6

8

10

12

14

16

18

$20k

07-13 10-13 01-14 04-14 07-14 10-14 01-15 04-15 07-15 10-15 01-16 04-16 07-16 10-16 01-17 04-17 07-17

Planning Assumptions

Currency USD

Rebalance Quarterly

Rebalance Threshold% +/- 0.00%

Allocation UpdateFrequency

None

Annual Fee Paid Out of Pocket

Federal Income Tax Rate 0%

Capital Gain Tax Rate 0%

State Tax Rate 0%

Tax Paid Out of Pocket

Performance

Net Amount Invested $10,166

Final Market Value $12,826

Average Annualized Return 5.84%

Cumulative Return 26.40%

Cumulative Ret -Benchmark

23.22%

Portfolio-Level Performance Disclosure

The portfolio-level performance shown is hypothetical and for illustrative purposes only. Investor returns will differ from the results shown.

Investment DetailPeriod Beginning

BalanceNew

InvestmentDistribution/Withdrawal

TotalReinvest

Charges& Fees

TaxesDue

MarketValue

TotalReturn %

Totals 0 10,000 0 1,305 166 0 12,826 5.84

July-December 2013 0 10,000 0 150 18 0 10,346 3.28January-December 2014 10,346 0 0 296 38 0 11,172 7.61January-December 2015 11,172 0 0 325 39 0 11,298 0.77January-December 2016 11,298 0 0 333 41 0 12,084 6.58

January-August 2017 12,084 0 0 200 29 0 12,826 5.89

Release date 08-31-2017

©2017 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses andopinions contained herein (1) include the confidential and proprietary information of Morningstar, (2) may include, or be derived from, account information provided by your financial advisor which cannot be verified byMorningstar, (3) may not be copied or redistributed, (4) do not constitute investment advice offered by Morningstar, (5) are provided solely for informational purposes and therefore are not an offer to buy or sell a security,and (6) are not warranted to be correct, complete or accurate. Except as otherwise required by law, Morningstar shall not be responsible for any trading decisions, damages or other losses resulting from, or related to, thisinformation, data, analyses or opinions or their use. Opinions expressed are as of the date written and are subject to change without notice. Investment research is produced and issued by subsidiaries of Morningstar, Inc.including, but not limited to, Morningstar Research Services LLC, registered with and governed by the U.S. Securities and Exchange Commission. This report is supplemental sales literature. If applicable it must be precededor accompanied by a prospectus, or equivalent, and disclosure statement. Please see important disclosures at the end of this report.

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Hypothetical Portfolio Illustration Continued

07-16-2013 to 08-31-2017

Security Summary

0

2

4

6

8

10

12

14

16

18

$20k

07-13 10-13 01-14 04-14 07-14 10-14 01-15 04-15 07-15 10-15 01-16 04-16 07-16 10-16 01-17 04-17 07-17

% of Total Market Value

Start 07-16-2013

End 08-31-2017

Investment Assumptions

Investment Name HoldingPeriod

InitialInvestment

SubsequentInvest/Withdwl

ReinvestDistributions

Liqui-date

Re-balance

Charges and Fees

FrontLoad

AnnualFee

Deferred LoadAmount%

PeriodYears

MarketValue

Start End Amount Amount Freq Income Cap Gains (%) End ($)

PowerShares Emerging Markets SovDbt ETF (USD, PCY)

07-13 08-17 1,200 0 — Y Y N 12.00 0.00% 0.35% 0.00-0.00 — 1,562

VanEck Vectors AMT-Free IntermMuni ETF (USD, ITM)

07-13 08-17 800 0 — Y Y N 8.00 0.00% 0.35% 0.00-0.00 — 1,028

Vanguard High Dividend Yield ETF(USD, VYM)

07-13 08-17 1,200 0 — Y Y N 12.00 0.00% 0.35% 0.00-0.00 — 1,536

Vanguard Short-Term Corporate BondETF (USD, VCSH)

07-13 08-17 2,500 0 — Y Y N 25.00 0.00% 0.35% 0.00-0.00 — 3,180

Vanguard Interm-Term Corp Bd ETF(USD, VCIT)

07-13 08-17 1,000 0 — Y Y N 10.00 0.00% 0.35% 0.00-0.00 — 1,284

TD Money Market A (USD, TDAXX) 07-13 08-17 300 0 — Y Y N 3.00 0.00% 0.35% 0.00-0.00 — 379

iShares iBoxx $ Invmt Grade Corp BdETF (USD, LQD)

07-13 08-17 1,500 0 — Y Y N 15.00 0.00% 0.35% 0.00-0.00 — 1,920

iShares Core S&P 500 ETF (USD, IVV) 07-13 08-17 1,500 0 — Y Y N 15.00 0.00% 0.35% 0.00-0.00 — 1,937



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Portfolio X-Ray®

Benchmark Market ValueDJ Moderately Conservative TR USD (USD) $12,825.73

Asset Allocation 08-31-2017

Asset Allocation Portfolio % Bmark (%)

Cash 2.80 0.00US Stocks 26.73 11.98Non-US Stocks 0.26 13.12Bonds 70.05 0.00Other/Not Clsfd 0.16 74.90

Bond Analysis 08-31-2017

Fixed-Income Sectors Portfolio (%) Bmark (%) Portfolio Bmark

⁄ Government 17.46 0.00

‹ Municipal 11.35 0.00

› Corporate 70.18 100.00

€ Securitized 0.03 0.00

fi Cash & Equivalents 0.98 0.00

± Derivative 0.00 0.00

0% 10 20 30 40 50 60 70 80 90 100

Maturity BreakdownEffective Maturity Portfolio (%)

1-3 17.333-5 24.835-7 13.447-10 19.5010-15 8.1315-20 4.7820-30 11.15>30 0.84

Credit Quality BreakdownCredit Quality Portfolio (%)

AAA 3.67AA 16.46A 31.76BBB 39.02BB 4.20B 2.77Below B 1.08NR 1.04

Stock Analysis 08-31-2017

Stock Sectors

Cyclical

Defe

nsive

Sensitive

BenchmarkPortfolio

Portfolio (%) Bmark (%)h Cyclical 28.51 38.82

r Basic Matls 3.30 4.58t Consumer Cycl 8.91 12.37y Financial Svs 14.99 17.52u Real Estate 1.31 4.35

j Sensitive 40.94 38.16

i Commun Svs 4.42 3.42o Energy 7.43 4.93p Industrials 11.25 10.63a Technology 17.84 19.18

k Defensive 30.55 23.02

s Consumer Def 10.97 8.25d Healthcare 14.19 11.51f Utilities 5.39 3.26

Not Classified 0.00 0.00

World Regions

Greater Asia Americas Greater Europe

<25 25-50 50-75 >75%

Portfolio (%) Bmark (%)Americas 99.03 65.63

North America 99.02 63.89Latin America 0.01 1.73

Greater Europe 0.63 2.39

United Kingdom 0.14 0.13Europe-Developed 0.49 0.30Europe-Emerging 0.00 0.99Africa/Middle East 0.00 0.97

Greater Asia 0.34 32.01

Japan 0.00 13.06Australasia 0.00 3.60Asia-Developed 0.07 7.26Asia-Emerging 0.27 8.07


Investment Style 08-31-2017

Ltd Mod Ext

HighM

edLow

0 0 0

35 14 21

0 0 0

0-10 10-25 25-50 >50

Fixed-Income Style Portfolio Bmark

Effective Duration 5.21 —Effective Maturity 6.74 —

Value Blend Growth

LargeM

idSm

all

40 30 17

6 4 2

1 0 0

0-10 10-25 25-50 >50

Equity Style Portfolio Bmark

Average Market Cap ($mil) 89,318.24 46,276.25Price/Earnings 20.89 19.86Price/Book 2.88 2.26Price/Sales 2.00 1.67Price/Cash Flow 12.53 11.06

Top 10 Net Underlying Holdings 08-31-2017

Assets % Name Type Sector Country

1.10 Microsoft Corp(USD) ST Technology United States0.71 Johnson & Johnson(USD) ST Healthcare United States0.66 Exxon Mobil Corp(USD) ST Energy United States0.64 JPMorgan Chase & Co(USD) ST Financial Services United States0.61 Apple Inc(USD) ST Technology United States

0.47 Wells Fargo & Co(USD) ST Financial Services United States0.47 AT&T Inc(USD) ST Communication Services United States0.46 Procter & Gamble Co(USD) ST Consumer Defensive United States0.43 General Electric Co(USD) ST Industrials United States0.41 Serbia Rep 7.25%(USD) BND Government —



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Portfolio X-Ray®

Portfolio Holdings BenchmarkDJ Moderately Conservative TR USD (USD)

Portfolio Holdings 08-31-2017

Total: 8 Holdings Type Fund Portfolio Date Assets % Market Value $

Vanguard Short-Term Corporate Bond ETF (USD, VCSH) ETF 07-31-2017 24.79 3,180iShares Core S&P 500 ETF (USD, IVV) ETF 08-30-2017 15.11 1,937iShares iBoxx $ Invmt Grade Corp Bd ETF (USD, LQD) ETF 08-30-2017 14.97 1,920PowerShares Emerging Markets Sov Dbt ETF (USD, PCY) ETF 08-30-2017 12.18 1,562Vanguard High Dividend Yield ETF (USD, VYM) ETF 07-31-2017 11.98 1,536

Vanguard Interm-Term Corp Bd ETF (USD, VCIT) ETF 07-31-2017 10.01 1,284VanEck Vectors AMT-Free Interm Muni ETF (USD, ITM) ETF 08-30-2017 8.01 1,028TD Money Market A (USD, TDAXX) MM 07-31-2017 2.95 379



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Portfolio Snapshot Portfolio Value Benchmark$12,825.73 DJ Moderately Conservative TR USD (USD)

Analysis 08-31-2017

Asset Allocation PortfolioNet %

BmarkNet %

Cash 2.80 0.00US Stocks 26.73 11.98Non-US Stocks 0.26 13.12Bonds 70.05 0.00Other/Not Clsfd 0.16 74.90

Morningstar Equity Style Box % Morningstar Fixed Income Style Box %

Value Blend Growth

LargeM

idSm

all

40 30 17

6 4 2

1 0 0

Total Stock Holdings744

% Not Classified0

0-10 10-25 25-50 >50

Ltd Mod Ext

HighM

edLow

0 0 0

35 14 21

0 0 0

Total Bond Holdings8,013

% Not Classified30

0-10 10-25 25-50 >50

Stock Analysis 08-31-2017Stock Sectors

Cyclical

Defe

nsive

Sensitive

BenchmarkPortfolio

Portfolio (%) Bmark (%)h Cyclical 28.51 38.82

r Basic Matls 3.30 4.58t Consumer Cycl 8.91 12.37y Financial Svs 14.99 17.52u Real Estate 1.31 4.35

j Sensitive 40.94 38.16

i Commun Svs 4.42 3.42o Energy 7.43 4.93p Industrials 11.25 10.63a Technology 17.84 19.18

k Defensive 30.55 23.02

s Consumer Def 10.97 8.25d Healthcare 14.19 11.51f Utilities 5.39 3.26


World Regions

Greater Asia Americas Greater Europe

<25 25-50 50-75 >75%

Portfolio (%) Bmark (%)Americas 99.03 65.63

North America 99.02 63.90Latin America 0.01 1.73

Greater Europe 0.63 2.39

United Kingdom 0.14 0.13Europe-Developed 0.49 0.30Europe-Emerging 0.00 0.99Africa/Middle East 0.00 0.97

Greater Asia 0.34 32.01

Japan 0.00 13.07Australasia 0.00 3.60Asia-Developed 0.07 7.26Asia-Emerging 0.27 8.08


Performance 08-31-2017

Investment Activity Graph Portfolio Final Mkt Val: $12,826

Benchmark

07-13 01-14 07-14 01-15 07-15 01-16 07-16 01-17 07-179

10

11

12

13

$14k

Trailing Returns 3 Mo 1 Yr 3 Yr 5 Yr 10 Yr

Portfolio Return 1.76 4.70 4.62 — —Benchmark Return 2.24 5.61 3.61 — —+/- Benchmark Return -0.48 -0.91 1.01 — —

Best/Worst TimePeriods

Best % Worst %

3 Months 4.65 ( Feb 2016-Apr 2016 ) -2.54 ( Jun 2015-Aug 2015 )1 Year 12.33 ( Sep 2013-Aug 2014 ) -1.14 ( Mar 2015-Feb 2016 )3 Years 7.09 ( Sep 2013-Aug 2016 ) 4.53 ( Jul 2014-Jun 2017 )

Portfolio Yield ( 08-31-2017 ) Yield %

12-Month Yield —


The portfolio-level performance shown is hypothetical and for illustrative purposes only.Investor returns will differ from the results shown.

Holdings 08-31-2017

Top 8 holdings out of 8 Symbol Type Holding Value $ % Assets

Vanguard Short-Term Corporate Bond ETF (USD) VCSH ETF 3,180 24.79iShares Core S&P 500 ETF (USD) IVV ETF 1,937 15.11iShares iBoxx $ Invmt Grade Corp Bd ETF (USD) LQD ETF 1,920 14.97PowerShares Emerging Markets Sov Dbt ETF (USD) PCY ETF 1,562 12.18Vanguard High Dividend Yield ETF (USD) VYM ETF 1,536 11.98Vanguard Interm-Term Corp Bd ETF (USD) VCIT ETF 1,284 10.01VanEck Vectors AMT-Free Interm Muni ETF (USD) ITM ETF 1,028 8.01TD Money Market A (USD) TDAXX MM 379 2.95



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Risk Analysis 08-31-2017

Risk/Reward Scatterplot Portfolio Holdings Bmark 3 Year Mean

-1.10

0.00

1.10

2.20

3.30

4.40

5.50

6.60

7.70

8.80

9.90

-1.0 -0.1 0.8 1.7 2.6 3.5 4.4 5.3 6.2 7.1 8.0 8.9 9.8 10.7 11.6

3 Year Standard Deviation

Performance History Graph Portfolio Quarterly returns +/- Benchmark in %

2013 2014 2015 2016 2017-2.0

Bmark

2.0

4.0

6.0

8.0

10.0%

Risk and Return Statistics 3 Yr 5 Yr 10 YrPortfolio Bmark Portfolio Bmark Portfolio Bmark

Standard Deviation 3.90 4.55 — — — —Mean 4.62 3.61 — — — —Sharpe Ratio 1.12 0.75 — — — —

MPT Statistics 3 Yr Portfolio 5 Yr Portfolio 10 Yr Portfolio

Alpha 1.60 — —Beta 0.80 — —R-Squared 87.12 — —


The portfolio-level performance shown is hypothetical and for illustrative purposes only. Investor returns will differ from the results shown.

Fundamental Analysis 08-31-2017

Asset Allocation

-100 -50 0 50 100

PortfolioNet %

PortfolioLong %

PortfolioShort %

Cash 2.80 2.80 0.00US Stocks 26.73 26.73 0.00Non-US Stocks 0.26 0.26 0.00Bonds 70.05 70.05 0.00Other/Not Clsfd 0.16 0.16 0.00

Total 100.00 100.00 0.00

Market Maturity% of Stocks Portfolio Bmark

Developed Markets 99.73 88.24Emerging Markets 0.27 11.76Not Available 0.00 0.00

Valuation Multiples Portfolio Bmark

Price/Earnings 20.89 19.86Price/Book 2.88 2.26Price/Sales 2.00 1.67Price/Cash Flow 12.53 11.06

Profitability Portfolio Bmark

% of Stocks 2017-08 2017-08

Net Margin 15.01 14.39ROE 22.02 17.63ROA 7.25 6.39Debt/Capital 44.82 38.14

Fund StatisticsPotential Cap Gains Exposure 4.93Avg Net Expense Ratio 0.16Avg Gross Expense Ratio 0.16

Geometric Avg Capitalization ($Mil)

Portfolio 89,318.24Benchmark 46,276.25

Credit Quality Breakdown % of Bonds

AAA 3.67AA 16.46A 31.76BBB 39.02BB 4.20B 2.77Below B 1.08NR 1.04

Interest Rate Risk Bonds % NotAvailable

Avg Eff Maturity 6.74 29.54Avg Eff Duration 5.21 29.54Avg Wtd Coupon 4.15 0.82

Type Weightings% of Stocks Portfolio Bmark

nHigh Yield 5.86 —

bDistressed 1.63 —

vHard Asset 7.33 —

mCyclical 38.50 —

xSlow Growth 26.83 —

zClassic Growth 9.45 —

lAggressive Growth 6.77 —

cSpeculative Growth 0.66 —

Not Available 2.96 100.000% 10 20 30 40 50 60 70 80 90 100



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Standardized and Tax Adjusted Returns

The performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment willfluctuate; thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than returndata quoted herein. For performance data current to the most recent month-end please visit http://advisor.morningstar.com/familyinfo.asp.

Standardized Returns assume reinvestment of dividends and capital gains. They depict performance without adjusting for the effects of taxation, but are adjusted toreflect sales charges and ongoing fund expenses.

If adjusted for taxation, the performance quoted would be significantly reduced. For variable annuities, additional expenses will be taken into account, includingM&E risk charges, fund-level expenses such as management fees and operating fees, contract-level administration fees, and charges such as surrender, contract,and sales charges.

After-tax returns are calculated using the highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fundshares through tax-deferred arrangements such as 401(k) plans or an IRA. After-tax returns exclude the effects of either the alternative minimum tax or phase-out ofcertain tax credits. Any taxes due are as of the time the distributions are made, and the taxable amount and tax character of each distribution are as specified bythe fund on the dividend declaration date. Due to foreign tax credits or realized capital losses, after-tax returns may be greater than before-tax returns. After-taxreturns for exchange-traded funds are based on net asset value.

Money Market Fund DisclosuresIf money market fund(s) are included in the Standardized Returns table below, each money market fund’s name will be followed by a superscripted letter that linksit to the applicable disclosure below:

Institutional Money Market Funds (designated by an “S”):You could lose money by investing in the fund. Because the share price of the fund will fluctuate, when you sell your shares they may be worth more or less thanwhat you originally paid for them. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidityfalls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal DepositInsurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should notexpect that the sponsor will provide financial support to the fund at any time.

Government Money Market Funds that have chosen to rely on the ability to impose liquidity fees and suspend redemptions (designated by an ”L” )andRetail Money Market Funds (designated by an “L”):You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will doso. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimumsbecause of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any othergovernment agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will providefinancial support to the fund at any time.

Government Money Market Funds that have chosen not to rely on the ability to impose liquidity fees and suspend redemptions (designated by an“N”):You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will doso. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has nolegal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

Annualized returns 06-30-2017

Standardized Returns (%) 7-day YieldSubsidized

7-day YieldUnsubsidized

1Yr 5Yr 10Yr SinceInception

InceptionDate

Max FrontLoad %

Max BackLoad %

Net ExpRatio %

Gross ExpRatio %

MaxRedemption %

as of date as of date

iShares Core S&P 500 ETF-NAV — — 17.85 14.57 7.13 5.00 05-15-2000 NA NA 0.04 0.04 NAiShares Core S&P 500 ETF-Market — — 17.95 14.57 7.15 5.00 05-15-2000 NA NA 0.04 0.04 NAiShares iBoxx $ Invmt Grade Corp Bd ETF-NAV

— — 1.65 4.11 5.93 5.68 07-22-2002 NA NA 0.15 0.15 NA

iShares iBoxx $ Invmt Grade Corp Bd ETF-Market

— — 1.39 4.05 5.86 5.67 07-22-2002 NA NA 0.15 0.15 NA



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Annualized returns 06-30-2017

Standardized Returns (%) 7-day YieldSubsidized

7-day YieldUnsubsidized

1Yr 5Yr 10Yr SinceInception

InceptionDate

Max FrontLoad %

Max BackLoad %

Net ExpRatio %

Gross ExpRatio %

MaxRedemption %

as of date as of date

PowerShares Emerging Markets Sov DbtETF-NAV

— — 4.86 5.42 — 7.12 10-11-2007 NA NA 0.50 0.50 NA

PowerShares Emerging Markets Sov DbtETF-Market

— — 4.04 5.30 — 6.99 10-11-2007 NA NA 0.50 0.50 NA

TD Money Market A S 0.4909-07-2017

— 0.07 0.02 0.43 0.47 05-24-2007 NA NA 0.70 0.70 NA

VanEck Vectors AMT-Free Interm Muni ETF-NAV

— — -1.31 3.05 — 4.45 12-04-2007 NA NA 0.24 0.24 NA

VanEck Vectors AMT-Free Interm Muni ETF-Market

— — -1.55 2.99 — 4.43 12-04-2007 NA NA 0.24 0.24 NA

Vanguard High Dividend Yield ETF-NAV — — 12.71 13.62 7.07 7.53 11-10-2006 NA NA 0.08 0.08 NA

Vanguard High Dividend Yield ETF-Market — — 12.73 13.64 7.08 7.53 11-10-2006 NA NA 0.08 0.08 NAVanguard Interm-Term Corp Bd ETF-NAV — — 1.47 4.15 — 5.86 11-19-2009 NA NA 0.07 0.07 NAVanguard Interm-Term Corp Bd ETF-Market — — 1.10 4.04 — 5.83 11-19-2009 NA NA 0.07 0.07 NAVanguard Short-Term Corporate Bond ETF-NAV

— — 1.35 2.36 — 3.03 11-19-2009 NA NA 0.07 0.07 NA

Vanguard Short-Term Corporate Bond ETF-Market

— — 1.15 2.30 — 3.01 11-19-2009 NA NA 0.07 0.07 NA

BBgBarc US Agg Bond TR USD -0.31 2.21 4.48 — —DJ Moderately Conservative TR USD 5.44 5.49 4.80 — —MSCI EAFE NR USD 20.27 8.69 1.03 — —S&P 500 TR USD 17.90 14.63 7.18 — —USTREAS T-Bill Auction Ave 3 Mon 0.58 0.18 0.49 — —

Return after Tax (%) On Distribution On Distribution and Sales of Shares

1Yr 5Yr 10Yr Since Inception Inception Date 1Yr 5Yr 10Yr Since Inception

iShares Core S&P 500 ETF-NAV 17.19 13.97 6.69 4.51 05-15-2000 10.41 11.58 5.68 3.89iShares iBoxx $ Invmt Grade Corp Bd ETF-NAV

0.25 2.59 4.22 3.94 07-22-2002 0.92 2.46 3.90 3.73

PowerShares Emerging Markets Sov DbtETF-NAV

2.60 3.26 — 4.90 10-11-2007 2.72 3.16 — 4.59

TD Money Market A S 0.04 0.01 0.28 0.30 05-24-2007 0.04 0.01 0.28 0.30VanEck Vectors AMT-Free Interm Muni ETF-NAV

-1.31 3.05 — 4.45 12-04-2007 0.20 2.90 — 4.14

Vanguard High Dividend Yield ETF-NAV 11.90 12.63 6.17 6.63 11-10-2006 7.81 10.62 5.35 5.76Vanguard Interm-Term Corp Bd ETF-NAV 0.07 2.68 — 4.36 11-19-2009 0.82 2.54 — 3.94Vanguard Short-Term Corporate Bond ETF-NAV

0.41 1.49 — 2.17 11-19-2009 0.76 1.43 — 1.99



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Illustration Returns

Total 8 holdings as of 08-31-2017 Symbol Type HoldingsDate

% ofAssets

HoldingValue $

30-day SECYield

Subsidizedas of date

30-day SECYield

Unsubsidizedas of date

1 YrRet %

3 YrRet %

5 YrRet %

10 YrRet %

Vanguard Short-Term CorporateBond ETF (USD)

VCSH ETF 07-2017 24.79 3,180 2.1209-07-2017

— 1.41 1.85 — —

iShares Core S&P 500 ETF (USD) IVV ETF 09-2017 15.11 1,937 — — 15.76 9.13 — —

iShares iBoxx $ Invmt Grade CorpBd ETF (USD)

LQD ETF 09-2017 14.97 1,920 3.1609-06-2017

— 1.19 3.40 — —

PowerShares Emerging MarketsSov Dbt ETF (USD)

PCY ETF 09-2017 12.18 1,562 4.9507-31-2017

6.1312-31-2015

2.99 5.56 — —

Vanguard High Dividend Yield ETF(USD)

VYM ETF 07-2017 11.98 1,536 3.0609-07-2017

— 11.80 8.41 — —

Vanguard Interm-Term Corp BdETF (USD)

VCIT ETF 07-2017 10.01 1,284 3.0809-07-2017

— 1.80 3.58 — —

VanEck Vectors AMT-Free IntermMuni ETF (USD)

ITM ETF 09-2017 8.01 1,028 — — 0.08 3.02 — —

TD Money Market A (USD) TDAXX MM 07-2017 2.95 379 0.0009-06-2017

— -0.24 -0.30 — —

Performance DisclosureThe performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate; thus aninvestor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein. For performance datacurrent to the most recent month-end, please visit http://advisor.morningstar.com/familyinfo.asp. An investment in the fund is not insured or guaranteed by the FDIC or any othergovernment agency. The current yield quotation more closely reflects the current earnings of the money market fund than the total return quotation.See Disclosure Page for Standardized Returns.



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Stock IntersectionThis Stock Detail table shows how the top 50 net stock holdings are distributed across the portfolio, ranked by the percentage of portfolio net assets. The Holding Portfolio Date is thedate that the fund's portfolio was last updated. When making comparisons among funds, it is an important date to keep in mind. It is possible that a fund's portfolio could be up to eightmonths old at the time of publication. See disclosures for more information.

Stock Details

Stock Ticker/ISIN Market Value $ % of Investments Holding PortfolioDate

Sector

Microsoft Corp(USD) MSFT 141 1.10 a Technology

Source of Stock

Vanguard High Dividend Yield ETF (USD) VYM 89 0.69 07-31-17iShares Core S&P 500 ETF (USD) IVV 52 0.41 08-30-17

Johnson & Johnson(USD) JNJ 91 0.71 d Healthcare

Source of Stock


Exxon Mobil Corp(USD) XOM 85 0.66 o Energy

Source of Stock


JPMorgan Chase & Co(USD) JPM 83 0.64 y Financial Services

Source of Stock


Apple Inc(USD) AAPL 78 0.61 a Technology

Source of Stock

iShares Core S&P 500 ETF (USD) IVV 78 0.61 08-30-17

Wells Fargo & Co(USD) WFC 61 0.47 y Financial Services

Source of Stock


AT&T Inc(USD) T 60 0.47 i Communication Services

Source of Stock


Procter & Gamble Co(USD) PG 59 0.46 s Consumer Defensive

Source of Stock


General Electric Co(USD) GE 56 0.43 p Industrials

Source of Stock


Chevron Corp(USD) CVX 52 0.41 o Energy

Source of Stock




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Stock Intersection (Continued)

Stock Details


Sector

Pfizer Inc(USD) PFE 50 0.39 d Healthcare

Source of Stock


Verizon Communications Inc(USD) VZ 50 0.39 i Communication Services

Source of Stock


Philip Morris International Inc(USD) PM 46 0.36 s Consumer Defensive

Source of Stock


Coca-Cola Co(USD) KO 45 0.35 s Consumer Defensive

Source of Stock


Merck & Co Inc(USD) MRK 44 0.35 d Healthcare

Source of Stock


Intel Corp(USD) INTC 42 0.33 a Technology

Source of Stock


PepsiCo Inc(USD) PEP 42 0.33 s Consumer Defensive

Source of Stock


Cisco Systems Inc(USD) CSCO 40 0.31 a Technology

Source of Stock


Facebook Inc A(USD) FB 37 0.29 a Technology

Source of Stock


Amazon.com Inc(USD) AMZN 35 0.27 t Consumer Cyclical

Source of Stock


Boeing Co(USD) BA 35 0.27 p Industrials

Source of Stock




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Stock Details


Sector

Amgen Inc(USD) AMGN 33 0.25 d Healthcare

Source of Stock


McDonald's Corp(USD) MCD 33 0.25 t Consumer Cyclical

Source of Stock


Altria Group Inc(USD) MO 32 0.25 s Consumer Defensive

Source of Stock


Berkshire Hathaway Inc B(USD) BRK.B 31 0.24 y Financial Services

Source of Stock


International Business Machines Corp(USD) IBM 31 0.24 a Technology

Source of Stock


3M Co(USD) MMM 30 0.24 p Industrials

Source of Stock


Wal-Mart Stores Inc(USD) WMT 30 0.23 s Consumer Defensive

Source of Stock


AbbVie Inc(USD) ABBV 29 0.23 d Healthcare

Source of Stock


Gilead Sciences Inc(USD) GILD 26 0.20 d Healthcare

Source of Stock


Alphabet Inc A(USD) GOOGL 26 0.20 a Technology

Source of Stock


Alphabet Inc C(USD) GOOG 25 0.20 a Technology

Source of Stock




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Stock Details


Sector

Bristol-Myers Squibb Company(USD) BMY 24 0.19 d Healthcare

Source of Stock


Bank of America Corporation(USD) BAC 22 0.17 y Financial Services

Source of Stock


Texas Instruments Inc(USD) TXN 21 0.16 a Technology

Source of Stock


Eli Lilly and Co(USD) LLY 20 0.16 d Healthcare

Source of Stock


Qualcomm Inc(USD) QCOM 20 0.15 a Technology

Source of Stock


United Parcel Service Inc Class B(USD) UPS 20 0.15 p Industrials

Source of Stock


DowDuPont Inc(USD) DWDP 19 0.15 r Basic Materials

Source of Stock


Lockheed Martin Corp(USD) LMT 19 0.15 p Industrials

Source of Stock


E.I. du Pont de Nemours & Co(USD) DD 18 0.14 r Basic Materials

Source of Stock


Comcast Corp Class A(USD) CMCSA 18 0.14 i Communication Services

Source of Stock


NextEra Energy Inc(USD) NEE 18 0.14 f Utilities

Source of Stock




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Stock Details


Sector

Visa Inc Class A(USD) V 18 0.14 y Financial Services

Source of Stock


UnitedHealth Group Inc(USD) UNH 17 0.13 d Healthcare

Source of Stock


Citigroup Inc(USD) C 17 0.13 y Financial Services

Source of Stock


ACE 17 0.13

Source of Stock


Caterpillar Inc(USD) CAT 17 0.13 p Industrials

Source of Stock


The Home Depot Inc(USD) HD 16 0.13 t Consumer Cyclical

Source of Stock


Duke Energy Corp(USD) DUK 15 0.12 f Utilities

Source of Stock




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Hypothetical ReportDisclosure Statement

GeneralThis is an illustration of a simulated investment that assumes the portfolioholding(s) were purchased on the first day of the period indicated. Sales and taxcharges, including those required in the event of transfers between assets, aretaken into account at the rates shown and may be higher or lower than what aninvestor would have actually paid had the investments been purchased then ornow. The performance data represents past performance and is not indicative offuture results. Principal value and investment returns will fluctuate, and aninvestor's shares/units, when redeemed, may be worth more or less than theoriginal investment.

The underlying holdings of the portfolio are not federally or FDIC-insured and arenot deposits or obligations of, or guaranteed by, any financial institution.Investing in securities involves investment risks including possible loss ofprincipal and fluctuation in value.

The investment returns do not reflect active trading and do not necessarilyreflect the results that might have been achieved by active management of theaccount. The investment returns of other clients of the advisor may differmaterially from the investment portrayed.

The information contained in this report is from the most recent informationavailable to Morningstar as of the release date, and may or may not be anaccurate reflection of the current composition of the securities included in theportfolio. There is no assurance that the weightings, composition and ratios willremain the same.

Pre-inception ReturnsThe analysis in this report may be based, in part, on adjusted historical returnsfor periods prior to the fund's actual inception. These calculated returns reflectthe historical performance of the oldest share class of the fund, adjusted toreflect the fees and expenses of this share class. These fees and expenses arereferenced in the report's Charges and Fees section.

When pre-inception data is presented in the report, the header at thetop of the report will indicate this.

While the inclusion of pre-inception data provides valuable insight into theprobable long-term behavior of newer share classes of a fund, investors shouldbe aware that an adjusted historical return can only provide an approximation ofthat behavior. For example, the fee structures of a retail share class will varyfrom that of an institutional share class, as retail shares tend to have higheroperating expenses and sales charges. These adjusted historical returns are notactual returns. Calculation methodologies utilized by Morningstar may differfrom those applied by other entities, including the fund itself.

The investment returns do not necessarily reflect the deduction of all investmentadvisory fees. Client investment returns may be reduced if additional fees areincurred.

Performance for closed-end and exchange-traded funds is calculated based onthe fund's end of the day market prices as reported by the New York StockExchange. Separate account performance is based on the mean experience ofan investor in the account.

This illustration may reflect the results of systematic investments and/or

withdrawals. Systematic investment does not ensure a profit, nor does it protectthe investor against a loss in a declining market. Also, systematic investing willnot keep an investor from losing money if shares are sold when the market isdown.

Investment Summary GraphThe investment summary graph plots the approximate market value of thesecurity or portfolio over the investing horizon. It may also include the totalinvestment assumed in the illustration and/or a benchmark. Total investmentincludes dollar inflows and outflows, including outflows representing notedtaxes and annual fees paid out of pocket. If a benchmark index is included on agraph, it assumes a similar pattern of investment/withdrawal as that of thesecurity or portfolio. Taxes and transaction costs are also applied to thebenchmark index. Note that direct investment in an index is not possible.Indexes are unmanaged portfolios representing different asset classes, withvarying levels of associated risk. The benchmark index included in the graphmay or may not represent an appropriate or accurate comparison with thesecurity or portfolio illustrated.

Standardized ReturnsFor ETFs, the standardized returns reflect performance, both at market price andNAV price, without adjusting for the effects of taxation or brokeragecommissions. These returns are adjusted to reflect all ongoing ETF expensesand assume reinvestment of dividends and capital gains. If adjusted, the effectsof taxation would reduce the performance quoted.

For HOLDRs, the standardized returns reflect performance at market price,without adjusting for the effects of taxation or brokerage commissions. Thesereturns are adjusted to reflect all ongoing expenses and assume reinvestment ofdividends and capital gains. If adjusted, the effects of taxation would reduce theperformance quoted.

For money-market mutual funds, standardized return is total return adjusted forsales charges and reflects all ongoing fund expenses. Current 7-day yield moreclosely reflects the current earnings of the money-market fund than the totalreturn quotation.

For mutual funds, standardized return is total return adjusted for sales chargesand reflects all ongoing fund expenses. Preceding this disclosure statement,standardized returns for each portfolio holding are shown.

For VA subaccounts, standardized return is total return based on the inceptiondate within the separate account and is adjusted to reflect recurring and non-recurring charges such as surrender fees, contract charges, maximum front-endload, maximum deferred load, maximum M&E risk charge, administration fees,and actual ongoing fund-level expenses.

For VL subaccounts, standardized return is total return based on the inceptiondate within the separate account and is adjusted to reflect recurring and non-recurring charges such as surrender fees, contract charges, maximum front-endload, maximum deferred load, maximum M&E risk charge, administration fees,and actual ongoing fund-level expenses. For VLs, additional fees specific to a VLpolicy such as transfer fees and cost of insurance fees, which are based onspecific characteristics of an individual, are not included. If VL fees wereincluded in the return calculations, the performance would be significantlylower. An investor should contact a financial advisor and ask for a personalizedperformance illustration, either hypothetical or historical, which reflects allapplicable fees and charges including the cost of insurance. Please review theprospectus and SAI for more detailed information.

Bond ReturnsPrice evaluations and fixed coupon amounts are provided by Interactive Data



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Corporation. The fixed coupon amount is assumed to be paid out semi-annuallywith the first payment beginning six months after the bond start date within theillustration.

Definitions of Report TermsAnnual Fee Paid: Your advisor was able to specify whether annual fees, if any,should be assumed paid out of pocket or from selling shares of securities held inthe illustration.

Average Annualized Return: Average annualized money-weighted return(internal rate of return). In illustrations with time periods less than one year, thisfigure is not annualized.

Capital Gains (Individual Report): Percentage of the total market value of theholding that is attributable to the reinvestment of capital gains distributions.

Charges & Fees (Investment Detail): The sum of fees charged to the investorduring the period, including front or deferred loads, VA charges, and annualfees.

Cumulative Return: The total money-weighted return of the investment over theentire time period of the illustration.

Distribution/Withdrl: The sum of distributions not reinvested, plus any cashwithdrawals during the period.

Income (Individual Report): The percentage of the total market value of theholding that is attributable to the reinvestment of income or dividenddistributions.

Liquidate: Indicates whether the advisor chose that the holding be liquidated onthe end date.

Median (Comparison Report): The total money-weighted return (internal rate ofreturn) of the median security in the illustration for the calendar year indicated.

New investment: Any new cash invested during the period.

Principal (Individual Reports): The percentage of the total market value of theholding that is attributable to new investment.

Rebalance (Planning Assumptions): Indicates whether rebalancing is used, andits frequency. "No" indicates no rebalancing. Options for rebalancing frequencyare monthly, quarterly, semi-annually, and annually.

Rebalance (Investment Assumptions): Percentage of total asset allocation to bemaintained in this holding through rebalancing.

Security Return (Comparison Report): The total money-weighted return (internalrate of return) for the holding in the calendar year indicated, taking into accountcash flows, charges, and fees.

Subsequent Invest/Withdwl: The amount, type, and frequency of subsequentinvestments or withdrawals from the holding. Withdrawals are represented bya negative number. Systematic investments and withdrawals may be mademonthly, quarterly, semi-annually, or annually. If "Custom", a custom scheduleof investments or withdrawals was used.

Taxes Due: The total amount of taxes due from the investor, determined byapplying specified tax rates to distributions and sale of shares during eachcalendar year. Taxes accrued during the calendar year are applied on April 15 of

the following year, or on the illustration end date if it occurs before April 15.

Taxes Paid: Your advisor was able to specify whether taxes, if any, should beassumed paid out of pocket or from selling shares of securities held in theillustration.

Net Amount Invested: The total out-of-pocket expense for the investor. Includesnew investment, annual fees paid to advisor, and taxes due. This figure is netof withdrawals, including liquidation.

Total Reinvest: The sum of distributions reinvested during the period.

Total Return %: The total money-weighted return (internal rate of return) oninvestments for the period.

Portfolio X-Ray ReportDisclosure Statement

GeneralThis report summarizes the composition characteristics of a portfolio ofsecurities. It considers broad asset allocation and regional exposure, securitystyle, and sector exposure to provide a variety of ways for considering the levelof diversification within a portfolio, its potential riskiness, and its possiblebehavior in the future.

The Portfolio X-Ray report is supplemental sales literature and must bepreceded or accompanied by the fund’s/policy’s current prospectus orequivalent. Please read these carefully before investing. In all cases, thisdisclosure statement should accompany the Portfolio X-Ray report. Morningstaris not itself a FINRA-member firm.

Data for this analysis is collected in several ways. For mutual funds, closed-endfunds, exchange-traded funds, and variable annuity subaccounts, equity data isbased upon Morningstar's analysis of the holdings, which are providedperiodically by the fund to Morningstar. For fixed-income securities included inthese products, duration and other data is provided by the fund company. Forseparately managed accounts, data for the account composite reflecting theaverage investor's experience is provided directly by the manager. Stock data isbased upon Morningstar analysis.

An investment in the funds/subaccounts listed in this report is not insured orguaranteed by the Federal Deposit Insurance Corporation (FDIC) or any othergovernment agency.

The information contained in this report is from the most recent informationavailable to Morningstar as of the release date, and may or may not be anaccurate reflection of the current composition of the securities included in theportfolio. There is no assurance that the weightings, composition, ratios, etc.will remain the same.

Comparison of Fund TypesFunds, including closed-end funds, exchange-traded funds (ETFs), money marketfunds, open-end funds, and unit investment trusts (UITs), have many similarities,but also many important differences. In general, publicly-offered funds areinvestment companies registered with the Securities and Exchange Commissionunder the Investment Company Act of 1940, as amended. Funds pool moneyfrom their investors and manage it according to an investment strategy orobjective, which can vary greatly from fund to fund. Funds have the ability tooffer diversification and professional management, but also involve risk,



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including the loss of principal.

A closed-end fund is an investment company, which typically makes one publicoffering of a fixed number of shares. Thereafter, shares are traded on asecondary market. As a result, the secondary market price may be higher orlower than the closed-end fund's net asset value (NAV). If these shares trade ata price above their NAV, they are said to be trading at a premium. Conversely, ifthey are trading at a price below their NAV, they are said to be trading at adiscount. A closed-end mutual fund’s expense ratio is an annual fee charged toa shareholder. It includes operating expenses and management fees, but doesnot take into account any brokerage costs. Closed-end funds may also have 12b-1 fees. Income distributions and capital gains of the closed-end fund are subjectto income tax, if held in a taxable account.

An ETF is an investment company that typically has an investment objective ofstriving to achieve a similar return as a particular market index. The ETF willinvest in either all or a representative sample of the securities included in theindex it is seeking to imitate. Like closed-end funds, an ETF can be traded on asecondary market and thus have a market price that may be higher or lower thanits net asset value. If these shares trade at a price above their NAV, they aresaid to be trading at a premium. Conversely, if they are trading at a price belowtheir NAV, they are said to be trading at a discount. ETFs are not activelymanaged, so their value may be affected by a general decline in the U.S. marketsegments relating to their underlying indexes. Similarly, an imperfect matchbetween an ETF’s holdings and those of its underlying index may cause itsperformance to vary from that of its underlying index. The expense ratio of anETF is an annual fee charged to a shareholder. It includes operating expensesand management fees, but does not take into account any brokerage costs. ETFsdo not have 12b-1 fees or sales loads. Capital gains from funds held in a taxableaccount are subject to income tax. In many, but not all cases, ETFs are generallyconsidered to be more tax-efficient when compared to similarly invested mutualfunds.

Holding company depository receipts (HOLDRs) are similar to ETFs, but theyfocus on narrow industry groups. HOLDRs initially own 20 stocks, which areunmanaged, and can become more concentrated due to mergers, or thedisparate performance of their holdings. HOLDRs can only be bought in 100-share increments. Investors may exchange shares of a HOLDR for its underlyingstocks at any time.

A money-market fund is an investment company that invests in commercialpaper, banker's acceptances, repurchase agreements, government securities,certificates of deposit and other highly liquid securities, and pays money marketrates of interest. Money markets are not FDIC-insured, may lose money, and arenot guaranteed by a bank or other financial institution.

An open-end fund is an investment company that issues shares on a continuousbasis. Shares can be purchased from the open-end mutual fund itself, or throughan intermediary, but cannot be traded on a secondary market, such as the NewYork Stock Exchange. Investors pay the open-end mutual fund’s current netasset value plus any initial sales loads. Net asset value is calculated daily, atthe close of business. Open-end mutual fund shares can be redeemed, or soldback to the fund or intermediary, at their current net asset value minus anydeferred sales loads or redemption fees. The expense ratio for an open-endmutual fund is an annual fee charged to a shareholder. It includes operatingexpenses and management fees, but does not take into account any brokeragecosts. Open-end funds may also have 12b-1 fees. Income distributions andcapital gains of the open-end fund are subject to income tax, if held in a taxableaccount.

A unit investment trust (UIT) is an investment company organized under a trustagreement between a sponsor and trustee. UITs typically purchase a fixed

portfolio of securities and then sell units in the trust to investors. The majordifference between a UIT and a mutual fund is that a mutual fund is activelymanaged, while a UIT is not. On a periodic basis, UITs usually distribute to theunit holder their pro rata share of the trust's net investment income and netrealized capital gains, if any. If the trust is one that invests only in tax-freesecurities, then the income from the trust is also tax-free. UITs generally makeone public offering of a fixed number of units. However, in some cases, thesponsor will maintain a secondary market that allows existing unit holders tosell their units and for new investors to buy units. A one-time initial salescharge is deducted from an investment made into the trust. UIT investors mayalso pay creation and development fees, organization costs, and/or trustee andoperation expenses. UIT units may be redeemed by the sponsor at their netasset value minus a deferred sales charge, and sold to other investors. UITshave set termination dates, at which point the underlying securities are sold andthe sales proceeds are paid to the investor. Typically, a UIT investment is rolledover into successive trusts as part of a long-term strategy. A rollover fee may becharged for the exercise of rollover purchases. There are tax consequencesassociated with rolling over an investment from one trust to the next.

Comparison of Other Security TypesVariable annuities are tax-deferred investments structured to convert a sum ofmoney into a series of payments over time. Variable annuity policies havelimitations and are not viewed as short-term liquid investments. An insurancecompany's fulfillment of a commitment to pay a minimum death benefit, aschedule of payments, a fixed investment account guaranteed by the insurancecompany, or another form of guarantee depends on the claims-paying ability ofthe issuing insurance company. Any such guarantee does not affect or apply tothe investment return or principal value of the separate account and itssubaccount. The financial ratings quoted for an insurance company do not applyto the separate account and its subaccount. The insurance company offering avariable life contract will charge several fees to investors, including annualcontract charges that compensate the insurance company for the cost ofmaintaining and administering the variable life contract, mortality and expenserisk (M&E Risk) charges based on a percentage of a subaccount’s assets tocover costs associated with mortality and expense risk, and administration feesthat are based on a percentage of a subaccount’s assets to cover the costsinvolved in offering and administering the subaccount. A variable life investorwill also be charged a front-end load by the insurance company on their initialcontribution, ongoing fees related to the management of the fund, and surrendercharges if the investor makes a withdrawal prior to a specified time. If thevariable annuity subaccount is invested in a money-market fund, the moneymarket fund is not FDIC-insured, may lose money, and is not guaranteed by abank or other financial institution.

Variable life insurance is a cash-value life insurance that has a variable cashvalue and/or death benefit depending on the investment performance of thesubaccount into which premium payments are invested. Unlike traditional lifeinsurance, variable life insurance has inherent risks associated with it, includingmarket volatility, and is not viewed as a short-term liquid investment. For moreinformation on a variable life product, including each subaccount, please readthe current prospectus. Please note, the financial ratings noted on the report arequoted for an insurance company and do not apply to the separate account andits subaccount.

Fixed annuities have a predetermined rate of return an investor earns and afixed income payout that is guaranteed by the issuing investment company, andmay be immediate or deferred. Payouts may last for a specific period or for thelife of the investor. Investments in a deferred fixed annuity grow tax-deferredwith income tax incurred upon withdrawal, and do not depend on the stockmarket. However, the insurance company's guaranteed rate of return andpayments depends on the claims-paying ability of the insurance company. Fixedannuities typically do not have cost-of-living payment adjustments. Fixed



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annuities often have surrender charges if the event you need to withdraw yourinvestment early. Fixed annuities are regulated by state insurancecommissioners.

Fixed indexed annuities, also called equity index annuities, are a combination ofthe characteristics of both fixed and variable annuities. Fixed indexed annuitiesoffer a predetermined rate of return like a fixed annuity, but they also allow forparticipation in the stock market, like a variable annuity. Fixed indexed annuitiesare typically risker and offer the potential for greater return than fixed annuities,but less so than a variable annuity. Investments in a fixed indexed annuity growtax-deferred with income tax incurred upon withdrawal. The insurancecompany’s guaranteed rate of return and ability to make payments depends onthe claims-paying ability of the insurance company. While fixed indexedannuities may limit an investor’s gains in an up market, they are also designedto help limit losses in a down market. Fixed indexed annuities can becomplicated and an investor in a fixed indexed annuity should carefully read theinsurance company’s offering material to understand how a specific annuity’sreturn will be determined. Fixed indexed annuities often have surrender chargesin the event you need to withdraw your investment early and are regulated bystate insurance commissioners.

A stock is an ownership interest in a company. When an investor purchases astock, they become a business owner, and the value of their ownership stakewill rise and fall according to the underlying business. Stockholders are entitledto the profits, if any, generated by the company after everyone else –employees, vendors, lenders – get paid. Companies usually pay out their profitsto investors in the form of dividends, or they reinvest the money back into thebusiness. Stocks trade on exchanges throughout the day, through a brokeragefirm who will charge a commission for the purchase or sale of shares. Incomedistributions and capital gains of the stock are subject to income tax upon theirsale, if held in a taxable account.

A bond is a debt security. When an investor purchases a bond, the purchaseamount is lent to a government, municipality, corporation or other entity knownas an issuer. The issuer promises to pay a specified rate of interest during thelife of the bond and repay the face value of the bond when it matures. U.STreasuries can be purchased directly from the Treasury or through a brokeragefirm. Most other newly issued bonds are offered through an underwriter. Olderbonds are traded throughout the day on the secondary market and can bepurchased through a brokerage firm, who will charge transaction fees andcommission for the purchase or sale. Price evaluations are provided byInteractive Data Corporation (IDC).

Preferred stock usually offers a fixed dividend payment, which is paid out beforevariable dividends that may be paid to investors in a company's common stock.Therefore, preferred stock is typically less risky in terms of principal loss, butthere is also less potential for return when compared to a company’s commonstock. If a company fails, their obligations to preferred stockholders must be metbefore those of the company's common stock holders, but after bondholders arereimbursed.

A separate account is a portfolio of securities (such as stocks, bonds, and cash)that follows a specified investment strategy and is managed by an investmentprofessional. The securities in the portfolio are directly owned by the separateaccount’s owner. Separate accounts are unregistered investment vehicles;therefore they do not have the same performance and holding reportingresponsibilities that registered securities have. Separate account performancedata is reported to Morningstar from the investment manager as a composite ofsimilarly managed portfolios. As such, investors in the same separate accountmay have slightly different portfolio holdings because each investor hascustomized account needs, tax considerations and security preferences. Themethod for calculating composite returns can vary. The composite performance

for each separate account manager may differ from actual returns in specificclient accounts during the same period for a number of reasons. Differentseparate account managers may use different methods in constructing orcomputing performance figures. Thus, performance and risk figures for differentseparate account managers may not be fully comparable to each other.Likewise, performance and risk information of certain separate accountmanagers may include only composites of larger accounts, which may or maynot have more holdings, different diversification, different trading patterns anddifferent performance than smaller accounts with the same strategy. Finally,composite performance of the separate account offered by the money managermay or may not reflect the reinvestment of dividends and capital gains. Grossreturns are collected on a monthly and quarterly basis for separate accounts andcommingled pools. This information is collected directly from the assetmanagement firm running the product(s). Morningstar calculates total returns,using the raw data (gross monthly and quarterly returns), collected from theseasset management firms. The performance data reported by the separateaccount managers will not represent actual performance net of managementfees, brokerage commissions or other expenses. Management fees as well asother expenses a client may incur will reduce individual returns for that client.Because fees are deducted regularly, the compounding effect will increase theimpact of the fee deduction on gross account performance by a greaterpercentage than that of the annual fee charged. For example, if an account ischarged a 1% management fee per year and has gross performance of 12%during that same period, the compounding effect of the quarterly feeassessments will result in an actual return of approximately 10.9%. Clientsshould refer to the disclosure document of the separate account manager andtheir advisor for specific information regarding fees and expenses. The analysisin this report may be based, in part, on adjusted historical returns for periodsprior to an insurance group separate account's (IGSA's) actual inception. Whenpre-inception data are presented in the report, the header at the top of thereport will indicate this and the affected data elements will be displayed initalics. These calculated returns reflect the historical performance of the oldestshare class of the underlying fund, adjusted to reflect the management fees ofthe current IGSA. While the inclusion of pre-inception data provides valuableinsight into the probable long-term behavior of an IGSA based on the underlyingfund’s performance, investors should be aware that an adjusted historical returncan only provide an approximation of that behavior. These adjusted historicalreturns are not actual returns. Calculation methodologies utilized byMorningstar may differ from those applied by other entities, including the IGSAitself. Morningstar % Rank within Morningstar Category does not account for aseparate account's sales charge (if applicable).

A collective investment trust (CIT) may also be called a commingled or collectivefund. CITs are tax-exempt, pooled investment vehicles maintained by a bank ortrust company exclusively for qualified plans, including 401(k)s, and certaintypes of government plans. CITs are unregistered investment vehicles subject tobanking regulations of the Office of the Comptroller of the Currency (OCC),which means they are typically less expensive than other investment optionsdue to lower marketing, overhead, and compliance-related costs. CITs are notavailable to the general public, but are managed only for specific retirementplans.

A 529 Portfolio is a specific portfolio of securities created from a 529 plan'savailable investments. In general, the data presented for a 529 Portfolio uses aweighted average of the underlying holdings in the portfolio. Most 529 plans areinvested in open-end mutual funds; however, other investment types arepossible such as stable value funds, certificates of deposit, and separateaccounts.

Offshore funds are funds domiciled in a country outside the one the investorresides in. Many banks have offshore subsidiaries that are under the standardsand regulations of the particular country, which can vary considerably.



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Companies may establish headquarters offshore because of lower tax rates.Offshore funds are not regulated by the SEC and may have tax implications.

Hedge funds are aggressively managed portfolios which make extensive use ofunconventional investment tools such as derivatives as well as long and shortpositions. Managers of hedge-funds typically focus on specific areas of themarket and/or trading strategies. Strategies may include the use of arbitrage,derivatives, leverage, and short selling, and may hold concentrated positions orprivate securities, which can make them risker than other investment types.Hedge funds are typically pooled investment vehicles available to sophisticatedinvestors that meet high investing minimums. Many hedge funds areunregistered and are not subject to the same regulations as registeredinvestment vehicles, such as mutual funds. Funds of hedge funds are pooledinvestment vehicles that invest in multiple unregistered hedge funds, and maybe registered with the SEC. Registered funds of hedge funds typically havelower investment minimums than hedge funds, but they are usually notregistered on an exchange and can be illiquid. Fund of hedge fund fees aregenerally higher than those of other pooled investments (like mutual funds) andmay have tax consequences.

Cash is a short-term, highly liquid investment. Cash typically doesn’t earn asmuch as other investments, such as stocks or bonds, but is less risky.

Indexes are unmanaged and not available for direct investment. Indexes arecreated to measure a specified area of the stock market using a representativeportfolio of securities. If a security is not available in Morningstar’s database,your financial professional may choose to show a representative index. Pleasenote that indexes vary widely, and it is important to choose an index that hassimilar characteristics to the security it is being used to represent. In no wayshould the performance of an index be considered indicative or a guarantee ofthe future performance of an actual security, be considered indicative of theactual performance achieved by a security, or viewed as a substitute for theactual security in your portfolio. Actual results of a security may differsubstantially from the historical performance shown for an index and mayinclude an individual client incurring a loss. Past performance is no guarantee offuture results.

Morningstar assigns each security in its database to a Morningstar Categoryusing the underlying securities in the security’s portfolio. If a security is notavailable in Morningstar’s database, your financial professional may choose toshow the security’s category. Please note that a category will not be an exactmatch to your securities. In no way should the performance of a category beconsidered indicative or a guarantee of the future performance of an actualsecurity, be considered indicative of the actual performance achieved by asecurity, or viewed as a substitute for the actual security in your portfolio.Actual results of a security may differ substantially from the historicalperformance shown for a category and may include an individual client incurringa loss. Past performance is no guarantee of future results.

Asset AllocationThe weighting of the portfolio in various asset classes, including "Other" isshown in this graph and table. "Other" includes security types that are notneatly classified in the other asset classes, such as convertible bonds andpreferred stocks.

In the graph and table, allocation to the classes is shown for long positions,short positions, and net (long positions net of short) positions. These newportfolio statistics help investors look "under the hood" of a portfolio. Thesestatistics summarize what the managers are buying and how they arepositioning the portfolio. When short positions are captured in these portfoliostatistics, investors get a more robust description of the funds' exposure andrisk.

Most managed product portfolios hold fairly conventional securities, such aslong positions in stocks and bonds. Other portfolios use other investmentstrategies or securities, such as short positions or derivatives, to reducetransaction costs, enhance returns, or reduce risk. Some of these securities andstrategies behave like conventional securities, while others have unique returnand risk characteristics.

Most portfolios take long positions in securities. Long positions involve buyingthe security outright and then selling it later, with the hope that the securityprice rises over time. In contrast, short positions are taken to benefit fromanticipated price declines. In this type of transaction, the investor borrows thesecurity from another investor, sells it and receives cash, and then is obligatedto buy it back at some point in the future. If the price falls after the short sale,the investor will have sold high and can now buy low to close the short positionand lock in a profit. However, if the price of the security increases after theshort sale, the investor will experience losses by buying it at a higher price thanthe sale price.

The strategy of selling securities short is prevalent in specialized portfolios,such as long-short, market-neutral, bear-market, and hedge funds. Mostconventional portfolios do not typically short securities, although they mayreserve the right to do so under special circumstances. Funds may also shortderivatives, and this is sometimes more efficient than shorting individualsecurities. Short positions produce negative exposure to the security that isbeing shorted. This means that when the security rises in value, the shortposition will fall in value and vice versa. Morningstar's portfolio statistics willcapture this negative exposure. For example, if a fund has many short stockpositions, the percent of assets in stocks in the asset allocation breakdown maybe negative. Funds must provide their broker with cash collateral for the shortposition, so funds that short often have a large cash position, sometimes evenexceeding 100% cash.

World RegionsThis data set provides a broad breakdown of a portfolio's geographicalexposure, by region and by market maturity. Only non-cash long equity assetsare evaluated in determining the exposure. Not Classified indicates thepercentage of the equity portion of the portfolio for which Morningstar is unableto assess region or origin.

Stock SectorsThis table shows the percentage of the portfolio's long equity assets invested ineach of the three supersectors (Cyclical, Sensitive, and Defensive) and 11 majorindustry subclassifications. The Sector Graph accompanying the tabledemonstrates the sector orientation of the portfolio.

Fixed Income SectorsThis table shows the percentage of the portfolio's long fixed income assetsinvested in each of the six supersectors (Government, Municipal, Corporate,Securitized, Cash & Equivalents, and Derivative). The Sector Graphaccompanying the table demonstrates the sector weighting of the portfolioagainst the benchmark.

Morningstar Style Box DiversificationThe Morningstar Style Box reveals a fund's investment style as of the datenoted on this report.

For equity funds the vertical axis shows the market capitalization of the longstocks owned and the horizontal axis shows investment style (value, blend, orgrowth).

For fixed-income funds, the vertical axis shows the credit quality of the longbonds owned and the horizontal axis shows interest rate sensitivity as



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measured by a bond's effective duration.

Morningstar seeks credit rating information from fund companies on a periodicbasis (e.g., quarterly). In compiling credit rating information Morningstar acceptscredit ratings reported by fund companies that have been issued by allNationally Recognized Statistical Rating Organizations (NRSROs). For a list of allNRSROs, please visithttp://www.sec.gov/divisions/marketreg/ratingagency.htm. Additionally,Morningstar accepts foreign credit ratings from widely recognized or registeredrating agencies. If two rating organizations/agencies have rated a security, fundcompanies are to report the lower rating; if three or moreorganizations/agencies have rated a security, fund companies are to report themedian rating, and in cases where there are more than two organization/agencyratings and a median rating does not exist, fund companies are to use the lowerof the two middle ratings. PLEASE NOTE: Morningstar, Inc. is not itself anNRSRO nor does it issue a credit rating on the fund. An NRSRO or rating agencyratings can change from time-to-time.

For credit quality, Morningstar combines the credit rating information providedby the fund companies with an average default rate calculation to come up witha weighted-average credit quality. The weighted-average credit quality iscurrently a letter that roughly corresponds to the scale used by a leadingNRSRO. Bond funds are assigned a style box placement of "low", "medium", or"high" based on their average credit quality. Funds with a low credit quality arethose whose weighted-average credit quality is determined to be less than"BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; andhigh are those with a weighted-average credit quality of "AA-" or higher. Whenclassifying a bond portfolio, Morningstar first maps the NRSRO credit ratings ofthe underlying holdings to their respective default rates (as determined byMorningstar's analysis of actual historical default rates). Morningstar thenaverages these default rates to determine the average default rate for the entirebond fund. Finally, Morningstar maps this average default rate to itscorresponding credit rating along a convex curve.

For interest-rate sensitivity, Morningstar obtains from fund companies theaverage effective duration. Generally, Morningstar classifies a fixed-incomefund's interest-rate sensitivity based on the effective duration of theMorningstar Core Bond Index (MCBI), which is currently three years. Theclassification of Limited will be assigned to those funds whose averageeffective duration is between 25% to 75% of MCBI's average effective duration;funds whose average effective duration is between 75% to 125% of the MCBIwill be classified as Moderate; and those that are at 125% or greater of theaverage effective duration of the MCBI will be classified as Extensive.

For municipal bond funds, Morningstar also obtains from fund companies theaverage effective duration. In these cases static breakpoints are utilized. Thesebreakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: morethan 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. Inaddition, for non-US taxable and non-US domiciled fixed income funds staticduration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii)Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greaterthan 6 years.

The below referenced data elements are a weighted average of the longholdings in the portfolio.

Price/Earnings Ratio: The asset-weighted average of the price/earnings ratiosof the stocks in the portfolio. The P/E ratio of a stock is calculated by dividingthe current price of the stock by its trailing 12-months’ earnings per share.

Price/Cashflow: The asset-weighted average of the price/cash flow ratios ofstocks in a portfolio. Price/cash flow shows the ability of a business to

generate cash and acts as a gauge of liquidity and solvency.

Price/Book Ratio is a weighted average of the price/book ratios of all the stocksin the underlying fund's portfolio. The P/B ratio of a company is calculated bydividing the market price of its stock by the company's per-share book value.Stocks with negative book values are excluded from this calculation.

Price/Sales is the asset-weighted average of the portfolio's stock's pricesdivided by the respective company's sales per share.

Geometric Average Capitalization is the overall size of a stock fund's portfolio asthe geometric mean of the market capitalization for all of the stocks it owns. It'scalculated by raising the market capitalization of each stock to a power equal tothat stock's stake in the portfolio. The resulting numbers are multiplied togetherto produce the geometric mean of the market caps of the stocks in the portfolio,which is reported as geometric average cap.

Effective duration is a time measure of a bond's interest-rate sensitivity. Incomputing the average, Morningstar weights the duration of each fixed-incomeholding within the portfolio by the percentage of fixed income assets itrepresents compared with the entire portfolio.

Effective maturity is used for holdings in the taxable fixed-income category. Thisis a weighted average of all the maturities of the bonds in a portfolio, computedby weighting each maturity date by the market value of the security.

Credit quality breakdowns are shown for corporate-bond holdings and depict thequality of bonds in the underlying portfolio. The report shows the percentage offixed-income securities that fall within each credit quality rating as assigned byan NRSRO. Bonds not rated by an NRSRO are included in the not rated (NR)category.

Top 10 Underlying HoldingsThis section indicates the 10 most heavily weighted underlying holdings in theportfolio. It identifies the percentage of assets that each holding represents inthe portfolio, the security type, the sector classification, and the country oforigin.

Portfolio Snapshot ReportDisclosure Statement

GeneralInvestment portfolios illustrated in this report can be scheduled or unscheduled.With an unscheduled portfolio, the user inputs only the portfolio holdings andtheir current allocations. Morningstar calculates returns using the givenallocations assuming monthly rebalancing. Taxes, loads, and sales charges arenot taken into account.

With scheduled portfolios, the user inputs the date and amount for allinvestments into and withdrawals from each holding, as well as tax rates, loads,and other factors that would have affected portfolio performance. Ahypothetical illustration is one type of scheduled portfolio.

Both scheduled and unscheduled portfolios are theoretical, for illustrativepurposes only, and are not reflective of an investor's actual experience. For bothscheduled and unscheduled portfolios, the performance data given representspast performance and should not be considered indicative of future results.Principal value and investment return of stocks, mutual funds, and variableannuity/life products will fluctuate, and an investor's shares/units, when



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redeemed, will be worth more or less than the original investment. Stocks,mutual funds, and variable annuity/life products are not FDIC-insured, may losevalue, and are not guaranteed by a bank or other financial institution. Portfoliostatistics change over time.

Used as supplemental sales literature, the Portfolio Snapshot report must bepreceded or accompanied by the fund/policy's current prospectus or equivalent.In all cases, this disclosure statement should accompany the Portfolio Snapshotreport. Morningstar is not itself a FINRA-member firm.

The underlying holdings of the portfolio are not federally or FDIC-insured and arenot deposits or obligations of, or guaranteed by any financial institution.Investing in securities involves investment risks, including possible loss ofprincipal and fluctuation in value.

The information contained in this report is from the most recent informationavailable to Morningstar as of the release date, and may or may not be anaccurate reflection of the current composition of the securities included in theportfolio. There is no assurance that the weightings, composition and ratios willremain the same.

Comparison of Fund TypesFunds, including closed-end funds, exchange-traded funds (ETFs), money marketfunds, open-end funds, and unit investment trusts (UITs), have many similarities,but also many important differences. In general, publicly-offered funds areinvestment companies registered with the Securities and Exchange Commissionunder the Investment Company Act of 1940, as amended. Funds pool moneyfrom their investors and manage it according to an investment strategy orobjective, which can vary greatly from fund to fund. Funds have the ability tooffer diversification and professional management, but also involve risk,including the loss of principal.

A closed-end fund is an investment company, which typically makes one publicoffering of a fixed number of shares. Thereafter, shares are traded on asecondary market. As a result, the secondary market price may be higher orlower than the closed-end fund's net asset value (NAV). If these shares trade ata price above their NAV, they are said to be trading at a premium. Conversely, ifthey are trading at a price below their NAV, they are said to be trading at adiscount. A closed-end mutual fund’s expense ratio is an annual fee charged toa shareholder. It includes operating expenses and management fees, but doesnot take into account any brokerage costs. Closed-end funds may also have 12b-1 fees. Income distributions and capital gains of the closed-end fund are subjectto income tax, if held in a taxable account.

An ETF is an investment company that typically has an investment objective ofstriving to achieve a similar return as a particular market index. The ETF willinvest in either all or a representative sample of the securities included in theindex it is seeking to imitate. Like closed-end funds, an ETF can be traded on asecondary market and thus have a market price that may be higher or lower thanits net asset value. If these shares trade at a price above their NAV, they aresaid to be trading at a premium. Conversely, if they are trading at a price belowtheir NAV, they are said to be trading at a discount. ETFs are not activelymanaged, so their value may be affected by a general decline in the U.S. marketsegments relating to their underlying indexes. Similarly, an imperfect matchbetween an ETF’s holdings and those of its underlying index may cause itsperformance to vary from that of its underlying index. The expense ratio of anETF is an annual fee charged to a shareholder. It includes operating expensesand management fees, but does not take into account any brokerage costs. ETFsdo not have 12b-1 fees or sales loads. Capital gains from funds held in a taxableaccount are subject to income tax. In many, but not all cases, ETFs are generallyconsidered to be more tax-efficient when compared to similarly invested mutualfunds.

Holding company depository receipts (HOLDRs) are similar to ETFs, but theyfocus on narrow industry groups. HOLDRs initially own 20 stocks, which areunmanaged, and can become more concentrated due to mergers, or thedisparate performance of their holdings. HOLDRs can only be bought in 100-share increments. Investors may exchange shares of a HOLDR for its underlyingstocks at any time.

A money-market fund is an investment company that invests in commercialpaper, banker's acceptances, repurchase agreements, government securities,certificates of deposit and other highly liquid securities, and pays money marketrates of interest. Money markets are not FDIC-insured, may lose money, and arenot guaranteed by a bank or other financial institution.

An open-end fund is an investment company that issues shares on a continuousbasis. Shares can be purchased from the open-end mutual fund itself, or throughan intermediary, but cannot be traded on a secondary market, such as the NewYork Stock Exchange. Investors pay the open-end mutual fund’s current netasset value plus any initial sales loads. Net asset value is calculated daily, atthe close of business. Open-end mutual fund shares can be redeemed, or soldback to the fund or intermediary, at their current net asset value minus anydeferred sales loads or redemption fees. The expense ratio for an open-endmutual fund is an annual fee charged to a shareholder. It includes operatingexpenses and management fees, but does not take into account any brokeragecosts. Open-end funds may also have 12b-1 fees. Income distributions andcapital gains of the open-end fund are subject to income tax, if held in a taxableaccount.

A unit investment trust (UIT) is an investment company organized under a trustagreement between a sponsor and trustee. UITs typically purchase a fixedportfolio of securities and then sell units in the trust to investors. The majordifference between a UIT and a mutual fund is that a mutual fund is activelymanaged, while a UIT is not. On a periodic basis, UITs usually distribute to theunit holder their pro rata share of the trust's net investment income and netrealized capital gains, if any. If the trust is one that invests only in tax-freesecurities, then the income from the trust is also tax-free. UITs generally makeone public offering of a fixed number of units. However, in some cases, thesponsor will maintain a secondary market that allows existing unit holders tosell their units and for new investors to buy units. A one-time initial salescharge is deducted from an investment made into the trust. UIT investors mayalso pay creation and development fees, organization costs, and/or trustee andoperation expenses. UIT units may be redeemed by the sponsor at their netasset value minus a deferred sales charge, and sold to other investors. UITshave set termination dates, at which point the underlying securities are sold andthe sales proceeds are paid to the investor. Typically, a UIT investment is rolledover into successive trusts as part of a long-term strategy. A rollover fee may becharged for the exercise of rollover purchases. There are tax consequencesassociated with rolling over an investment from one trust to the next.

Comparison of Other Security TypesVariable annuities are tax-deferred investments structured to convert a sum ofmoney into a series of payments over time. Variable annuity policies havelimitations and are not viewed as short-term liquid investments. An insurancecompany's fulfillment of a commitment to pay a minimum death benefit, aschedule of payments, a fixed investment account guaranteed by the insurancecompany, or another form of guarantee depends on the claims-paying ability ofthe issuing insurance company. Any such guarantee does not affect or apply tothe investment return or principal value of the separate account and itssubaccount. The financial ratings quoted for an insurance company do not applyto the separate account and its subaccount. The insurance company offering avariable life contract will charge several fees to investors, including annualcontract charges that compensate the insurance company for the cost ofmaintaining and administering the variable life contract, mortality and expense



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risk (M&E Risk) charges based on a percentage of a subaccount’s assets tocover costs associated with mortality and expense risk, and administration feesthat are based on a percentage of a subaccount’s assets to cover the costsinvolved in offering and administering the subaccount. A variable life investorwill also be charged a front-end load by the insurance company on their initialcontribution, ongoing fees related to the management of the fund, and surrendercharges if the investor makes a withdrawal prior to a specified time. If thevariable annuity subaccount is invested in a money-market fund, the moneymarket fund is not FDIC-insured, may lose money, and is not guaranteed by abank or other financial institution.

Variable life insurance is a cash-value life insurance that has a variable cashvalue and/or death benefit depending on the investment performance of thesubaccount into which premium payments are invested. Unlike traditional lifeinsurance, variable life insurance has inherent risks associated with it, includingmarket volatility, and is not viewed as a short-term liquid investment. For moreinformation on a variable life product, including each subaccount, please readthe current prospectus. Please note, the financial ratings noted on the report arequoted for an insurance company and do not apply to the separate account andits subaccount.

Fixed annuities have a predetermined rate of return an investor earns and afixed income payout that is guaranteed by the issuing investment company, andmay be immediate or deferred. Payouts may last for a specific period or for thelife of the investor. Investments in a deferred fixed annuity grow tax-deferredwith income tax incurred upon withdrawal, and do not depend on the stockmarket. However, the insurance company's guaranteed rate of return andpayments depends on the claims-paying ability of the insurance company. Fixedannuities typically do not have cost-of-living payment adjustments. Fixedannuities often have surrender charges if the event you need to withdraw yourinvestment early. Fixed annuities are regulated by state insurancecommissioners.

Fixed indexed annuities, also called equity index annuities, are a combination ofthe characteristics of both fixed and variable annuities. Fixed indexed annuitiesoffer a predetermined rate of return like a fixed annuity, but they also allow forparticipation in the stock market, like a variable annuity. Fixed indexed annuitiesare typically risker and offer the potential for greater return than fixed annuities,but less so than a variable annuity. Investments in a fixed indexed annuity growtax-deferred with income tax incurred upon withdrawal. The insurancecompany’s guaranteed rate of return and ability to make payments depends onthe claims-paying ability of the insurance company. While fixed indexedannuities may limit an investor’s gains in an up market, they are also designedto help limit losses in a down market. Fixed indexed annuities can becomplicated and an investor in a fixed indexed annuity should carefully read theinsurance company’s offering material to understand how a specific annuity’sreturn will be determined. Fixed indexed annuities often have surrender chargesin the event you need to withdraw your investment early and are regulated bystate insurance commissioners.

A stock is an ownership interest in a company. When an investor purchases astock, they become a business owner, and the value of their ownership stakewill rise and fall according to the underlying business. Stockholders are entitledto the profits, if any, generated by the company after everyone else –employees, vendors, lenders – get paid. Companies usually pay out their profitsto investors in the form of dividends, or they reinvest the money back into thebusiness. Stocks trade on exchanges throughout the day, through a brokeragefirm who will charge a commission for the purchase or sale of shares. Incomedistributions and capital gains of the stock are subject to income tax upon theirsale, if held in a taxable account.

A bond is a debt security. When an investor purchases a bond, the purchase

amount is lent to a government, municipality, corporation or other entity knownas an issuer. The issuer promises to pay a specified rate of interest during thelife of the bond and repay the face value of the bond when it matures. U.STreasuries can be purchased directly from the Treasury or through a brokeragefirm. Most other newly issued bonds are offered through an underwriter. Olderbonds are traded throughout the day on the secondary market and can bepurchased through a brokerage firm, who will charge transaction fees andcommission for the purchase or sale. Price evaluations are provided byInteractive Data Corporation (IDC).

Preferred stock usually offers a fixed dividend payment, which is paid out beforevariable dividends that may be paid to investors in a company's common stock.Therefore, preferred stock is typically less risky in terms of principal loss, butthere is also less potential for return when compared to a company’s commonstock. If a company fails, their obligations to preferred stockholders must be metbefore those of the company's common stock holders, but after bondholders arereimbursed.

A separate account is a portfolio of securities (such as stocks, bonds, and cash)that follows a specified investment strategy and is managed by an investmentprofessional. The securities in the portfolio are directly owned by the separateaccount’s owner. Separate accounts are unregistered investment vehicles;therefore they do not have the same performance and holding reportingresponsibilities that registered securities have. Separate account performancedata is reported to Morningstar from the investment manager as a composite ofsimilarly managed portfolios. As such, investors in the same separate accountmay have slightly different portfolio holdings because each investor hascustomized account needs, tax considerations and security preferences. Themethod for calculating composite returns can vary. The composite performancefor each separate account manager may differ from actual returns in specificclient accounts during the same period for a number of reasons. Differentseparate account managers may use different methods in constructing orcomputing performance figures. Thus, performance and risk figures for differentseparate account managers may not be fully comparable to each other.Likewise, performance and risk information of certain separate accountmanagers may include only composites of larger accounts, which may or maynot have more holdings, different diversification, different trading patterns anddifferent performance than smaller accounts with the same strategy. Finally,composite performance of the separate account offered by the money managermay or may not reflect the reinvestment of dividends and capital gains. Grossreturns are collected on a monthly and quarterly basis for separate accounts andcommingled pools. This information is collected directly from the assetmanagement firm running the product(s). Morningstar calculates total returns,using the raw data (gross monthly and quarterly returns), collected from theseasset management firms. The performance data reported by the separateaccount managers will not represent actual performance net of managementfees, brokerage commissions or other expenses. Management fees as well asother expenses a client may incur will reduce individual returns for that client.Because fees are deducted regularly, the compounding effect will increase theimpact of the fee deduction on gross account performance by a greaterpercentage than that of the annual fee charged. For example, if an account ischarged a 1% management fee per year and has gross performance of 12%during that same period, the compounding effect of the quarterly feeassessments will result in an actual return of approximately 10.9%. Clientsshould refer to the disclosure document of the separate account manager andtheir advisor for specific information regarding fees and expenses. The analysisin this report may be based, in part, on adjusted historical returns for periodsprior to an insurance group separate account's (IGSA's) actual inception. Whenpre-inception data are presented in the report, the header at the top of thereport will indicate this and the affected data elements will be displayed initalics. These calculated returns reflect the historical performance of the oldestshare class of the underlying fund, adjusted to reflect the management fees of



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the current IGSA. While the inclusion of pre-inception data provides valuableinsight into the probable long-term behavior of an IGSA based on the underlyingfund’s performance, investors should be aware that an adjusted historical returncan only provide an approximation of that behavior. These adjusted historicalreturns are not actual returns. Calculation methodologies utilized byMorningstar may differ from those applied by other entities, including the IGSAitself. Morningstar % Rank within Morningstar Category does not account for aseparate account's sales charge (if applicable).

A collective investment trust (CIT) may also be called a commingled or collectivefund. CITs are tax-exempt, pooled investment vehicles maintained by a bank ortrust company exclusively for qualified plans, including 401(k)s, and certaintypes of government plans. CITs are unregistered investment vehicles subject tobanking regulations of the Office of the Comptroller of the Currency (OCC),which means they are typically less expensive than other investment optionsdue to lower marketing, overhead, and compliance-related costs. CITs are notavailable to the general public, but are managed only for specific retirementplans.

A 529 Portfolio is a specific portfolio of securities created from a 529 plan'savailable investments. In general, the data presented for a 529 Portfolio uses aweighted average of the underlying holdings in the portfolio. Most 529 plans areinvested in open-end mutual funds; however, other investment types arepossible such as stable value funds, certificates of deposit, and separateaccounts.

Offshore funds are funds domiciled in a country outside the one the investorresides in. Many banks have offshore subsidiaries that are under the standardsand regulations of the particular country, which can vary considerably.Companies may establish headquarters offshore because of lower tax rates.Offshore funds are not regulated by the SEC and may have tax implications.

Hedge funds are aggressively managed portfolios which make extensive use ofunconventional investment tools such as derivatives as well as long and shortpositions. Managers of hedge-funds typically focus on specific areas of themarket and/or trading strategies. Strategies may include the use of arbitrage,derivatives, leverage, and short selling, and may hold concentrated positions orprivate securities, which can make them risker than other investment types.Hedge funds are typically pooled investment vehicles available to sophisticatedinvestors that meet high investing minimums. Many hedge funds areunregistered and are not subject to the same regulations as registeredinvestment vehicles, such as mutual funds. Funds of hedge funds are pooledinvestment vehicles that invest in multiple unregistered hedge funds, and maybe registered with the SEC. Registered funds of hedge funds typically havelower investment minimums than hedge funds, but they are usually notregistered on an exchange and can be illiquid. Fund of hedge fund fees aregenerally higher than those of other pooled investments (like mutual funds) andmay have tax consequences.

Cash is a short-term, highly liquid investment. Cash typically doesn’t earn asmuch as other investments, such as stocks or bonds, but is less risky.

Indexes are unmanaged and not available for direct investment. Indexes arecreated to measure a specified area of the stock market using a representativeportfolio of securities. If a security is not available in Morningstar’s database,your financial professional may choose to show a representative index. Pleasenote that indexes vary widely, and it is important to choose an index that hassimilar characteristics to the security it is being used to represent. In no wayshould the performance of an index be considered indicative or a guarantee ofthe future performance of an actual security, be considered indicative of theactual performance achieved by a security, or viewed as a substitute for theactual security in your portfolio. Actual results of a security may differ

substantially from the historical performance shown for an index and mayinclude an individual client incurring a loss. Past performance is no guarantee offuture results.

Morningstar assigns each security in its database to a Morningstar Categoryusing the underlying securities in the security’s portfolio. If a security is notavailable in Morningstar’s database, your financial professional may choose toshow the security’s category. Please note that a category will not be an exactmatch to your securities. In no way should the performance of a category beconsidered indicative or a guarantee of the future performance of an actualsecurity, be considered indicative of the actual performance achieved by asecurity, or viewed as a substitute for the actual security in your portfolio.Actual results of a security may differ substantially from the historicalperformance shown for a category and may include an individual client incurringa loss. Past performance is no guarantee of future results.

Pre-inception ReturnsThe analysis in this report may be based, in part, on adjusted historical returnsfor periods prior to the fund's actual inception. These calculated returns reflectthe historical performance of the oldest share class of the fund, adjusted toreflect the fees and expenses of this share class. These fees and expenses arereferenced in the report's list of holdings and again on the standardized returnspage. When pre-inception data is presented in the report, the header at the topof the report will indicate this and the affected data elements will be displayedin italics.

While the inclusion of pre-inception data provides valuable insight into theprobable long-term behavior of newer share classes of a fund, investors shouldbe aware that an adjusted historical return can only provide an approximation ofthat behavior. For example, the fee structures of a retail share class will varyfrom that of an institutional share class, as retail shares tend to have higheroperating expenses and sales charges. These adjusted historical returns are notactual returns. Calculation methodologies utilized by Morningstar may differfrom those applied by other entities, including the fund itself.

Scheduled Portfolio Trailing ReturnsScheduled Portfolios are customized by the user to account for loads, taxes,cash flows and specific investment dates. Scheduled portfolios use theportfolio's investment history to calculate final market values and returns. Forscheduled portfolios, both individual holdings and portfolio returns are internal-rate-of-return calculations that reflect the timing and dollar size of all purchasesand sales. For stocks and mutual funds, sales charges and tax rates are takeninto account as specified by the user (except in the pre-tax returns, which reflectthe impact of sales charges but not taxes). Note that in some scheduledportfolio illustrations, dividends and capital gains distributions, if applicable, arereinvested at the end of the month in which they are made at the month-endclosing price. This can cause discrepancies between calculated returns andactual investor experience.

The trailing returns for scheduled portfolios commence at the end of the day onthe investment start date. All front-load fees and beginning of period asset-based fees are deducted at the start of the day, therefore these fees will not beincorporated within the trailing return time period that matches the wholeinvestment time period. For example, an investor pays $10,000 for security Awith a 5% front-load and generates a 5-year Hypothetical Illustration thatshows an end value of $12,500. Assuming no cash inflows or outflows asidefrom the initial investment and end value, the whole investment time periodreturn will be 4.56% ((12,500/ $10,000)^(1/5)-1) while the 5-year trailing returnwill be 5.64% (( $12,500/ $9,500)^(1/5)-1).

Scheduled Portfolio Returns-Based Performance DataFor scheduled portfolios, the monthly returns used to calculate alphas, betas, R-



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squareds, standard deviations, Sharpe ratios and best/worst time-period dataare internal rates of return.

Important VA Disclosure for Scheduled PortfoliosFor variable annuity products, policy level charges (other than front-end loads, ifinput by the advisor) are not factored into returns. When withdrawals andliquidations are made, increases in value over the purchase price are taxed atthe capital gains rate that is currently in effect. This is not reflective of theactual tax treatment for these products, which requires the entire withdrawal tobe taxed at the income tax rate. If adjusted for sales charges and the effects oftaxation, the subaccount returns would be reduced.

Scheduled Portfolio Investment Activity GraphThe historic portfolio values graphed are those used to track the portfolio whencalculating returns.

Unscheduled Portfolio ReturnsMonthly total returns for unscheduled portfolios are calculated by applying theending period holding weightings supplied by the user to an individual holding'smonthly returns. When monthly returns are unavailable for a holding (ie. due toit not being in existence during the historical period being reported), theremaining portfolio holdings are re-weighted to maintain consistent proportions.Inception dates are listed in the Disclosure for Standardized and Tax AdjustedReturns. Trailing returns are calculated by geometrically linking these weighted-average monthly returns. Unscheduled portfolio returns thus assume monthlyrebalancing. Returns for individual holdings are simple time-weighted trailingreturns. Neither portfolio returns nor holding returns are adjusted for loads ortaxes, and if they were, the returns stated would be reduced. The returns statedassume the reinvestment of dividends and capital gains. Mutual fund returnsinclude all ongoing fund expenses. VA/VL returns reflect subaccount level fundexpenses, including M&E expenses, administration fees, and actual ongoingfund-level expenses.

Unscheduled Portfolio Investment Activity GraphThe historic performance data graphed is extrapolated from the ending portfoliovalue based on monthly returns.

Benchmark ReturnsBenchmark returns may or may not be adjusted to reflect ongoing expenses suchas sales charges. An investment's portfolio may differ significantly from thesecurities in the benchmark.

Returns for custom benchmarks are calculated by applying user-suppliedweightings to each benchmark's returns every month. Trailing returns arecalculated by geometrically linking these weighted-average monthly returns.Custom benchmark returns thus assume monthly rebalancing.

Standardized ReturnsFor mutual funds, standardized return is total return adjusted for sales charges,and reflects all ongoing fund expenses. Following this disclosure statement,standardized returns for each portfolio holding are shown.

For money-market mutual funds, standardized return is total return adjusted forsales charges and reflects all ongoing fund expenses. Current 7-day yield moreclosely reflects the current earnings of the money-market fund than the totalreturn quotation.

For VA subaccounts, standardized return is total return based on the inceptiondate within the separate account and is adjusted to reflect recurring and non-recurring charges such as surrender fees, contract charges, maximum front-endload, maximum deferred load, maximum M&E risk charge, administration feesand actual ongoing fund-level expenses.

For ETFs, the standardized returns reflect performance, both at market price andNAV price, without adjusting for the effects of taxation or brokeragecommissions. These returns are adjusted to reflect all ongoing ETF expensesand assume reinvestment of dividends and capital gains. If adjusted, the effectsof taxation would reduce the performance quoted.

The charges and expenses used in the standardized returns are obtained fromthe most recent prospectus and/or shareholder report available to Morningstar.For mutual funds and VAs, all dividends and capital gains are assumed to bereinvested. For stocks, stock acquired via divestitures is assumed to beliquidated and reinvested in the original holding.

Non-Standardized ReturnsFor mutual funds, total return is not adjusted for sales charges and reflects allongoing fund expenses for various time periods. These returns assumereinvestment of dividends and capital gains. If adjusted for sales charges andthe effects of taxation, the mutual fund returns would be reduced. Please notethese returns can include pre-inception data and if included, this data will berepresented in italics.

For money-market funds, total return is not adjusted for sales charges andreflects all ongoing fund expenses for various time periods. These returnsassume reinvestment of dividends and capital gains. If adjusted for salescharges and the effects of taxation, the money-market returns would bereduced.

For VA and VL subaccounts, non-standardized returns illustrate performance thatis adjusted to reflect recurring and non-recurring charges such as surrenderfees, contract charges, maximum front-end load, maximum deferred load,maximum M&E risk charge, administrative fees and underlying fund-levelexpenses for various time periods. Non-standardized performance returnsassume reinvestment of dividends and capital gains. If adjusted for the effectsof taxation, the subaccount returns would be significantly reduced. Please notethese returns can include pre-inception data and if included, this data will berepresented in italics.

Investment Advisory FeesThe investment(s) returns do not necessarily reflect the deduction of allinvestment advisory fees. Client investment returns will be reduced if additionaladvisory fees are incurred such as deferred loads, redemption fees, wrap fees,or other account charges.

Asset AllocationThe weighting of the portfolio in various asset classes, including "Other", isshown in this graph and table. "Other" includes security types that are notneatly classified in the other asset classes, such as convertible bonds andpreferred stocks. "Not classified" represents the portion of the portfolio thatMorningstar could not classify at all, due to missing data.

In the graph and table, allocation to the classes is shown for long positions,short positions, and net (long positions net of short) positions. These newportfolio statistics help investors look "under the hood" of a portfolio. Thesestatistics summarize what the managers are buying and how they arepositioning the portfolio. When short positions are captured in these portfoliostatistics, investors get a more robust description of the funds' exposure andrisk.

Most managed product portfolios hold fairly conventional securities, such aslong positions in stocks and bonds. Other portfolios use other investmentstrategies or securities, such as short positions or derivatives, to reducetransaction costs, enhance returns, or reduce risk. Some of these securities andstrategies behave like conventional securities, while others have unique return



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and risk characteristics.

Most portfolios take long positions in securities. Long positions involve buyingthe security outright and then selling it later, with the hope that the securityprice rises over time. In contrast, short positions are taken to benefit fromanticipated price declines. In this type of transaction, the investor borrows thesecurity from another investor, sells it and receives cash, and then is obligatedto buy it back at some point in the future. If the price falls after the short sale,the investor will have sold high and can now buy low to close the short positionand lock in a profit. However, if the price of the security increases after theshort sale, the investor will experience losses by buying it at a higher price thanthe sale price.

The strategy of selling securities short is prevalent in specialized portfolios,such as long-short, market-neutral, bear-market, and hedge funds. Mostconventional portfolios do not typically short securities, although they mayreserve the right to do so under special circumstances. Funds may also shortderivatives, and this is sometimes more efficient than shorting individualsecurities. Short positions produce negative exposure to the security that isbeing shorted. This means that when the security rises in value, the shortposition will fall in value and vice versa. Morningstar's portfolio statistics willcapture this negative exposure. For example, if a fund has many short stockpositions, the percent of assets in stocks in the asset allocation breakdown maybe negative. Funds must provide their broker with cash collateral for the shortposition, so funds that short often have a large cash position, sometimes evenexceeding 100% cash.

Investment StyleThe Morningstar Style Box reveals a fund's investment style as of the datenoted on this report.

For equity funds, the vertical axis shows the market capitalization of the stocksowned and the horizontal axis shows investment style (value, core, or growth).

For fixed-income funds, the vertical axis shows the credit quality of the bondsowned and the horizontal axis shows interest rate sensitivity as measured by abond's effective duration.

Morningstar seeks credit rating information from fund companies on a periodicbasis (e.g. quarterly). In compiling credit rating information Morningstar acceptscredit ratings reported by fund companies that have been issued by allNationally Recognized Statistical Rating Organizations (NRSROs). For a list of allNRSROs, please visithttp://www.sec.gov/divisions/marketreg/ratingagency.htm. Additionally,Morningstar accepts foreign credit ratings from widely recognized or registeredrating agencies. If two rating organizations/agencies have rated a security, fundcompanies are to report the lower rating; if three or moreorganizations/agencies have rated a security, fund companies are to report themedian rating, and in cases where there are more than two organization/agencyratings and a median rating does not exist, fund companies are to use the lowerof the two middle ratings. PLEASE NOTE: Morningstar, Inc. is not itself anNRSRO nor does it issue a credit rating on the fund. An NRSRO or rating agencyratings can change from time to time.

For credit quality, Morningstar combines the credit rating information providedby the fund companies with an average default rate calculation to come up witha weighted-average credit quality. The weighted-average credit quality iscurrently a letter that roughly corresponds to the scale used by a leadingNRSRO. Bond funds are assigned a style box placement of "low", "medium", or"high" based on their average credit quality. Funds with a low credit quality arethose whose weighted-average credit quality is determined to be less than"BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; and

high are those with a weighted-average credit quality of "AA-" or higher. Whenclassifying a bond portfolio, Morningstar first maps the NRSRO credit ratings ofthe underlying holdings to their respective default rates (as determined byMorningstar's analysis of actual historical default rates). Morningstar thenaverages these default rates to determine the average default rate for the entirebond fund. Finally, Morningstar maps this average default rate to itscorresponding credit rating along a convex curve.

For interest-rate sensitivity, Morningstar obtains from fund companies theaverage effective duration. Generally, Morningstar classifies a fixed-incomefund's interest-rate sensitivity based on the effective duration of theMorningstar Core Bond Index (MCBI), which is currently three years. Theclassification of Limited will be assigned to those funds whose averageeffective duration is between 25% to 75% of MCBI's average effective duration;funds whose average effective duration is between 75% to 125% of the MCBIwill be classified as Moderate; and those that are at 125% or greater of theaverage effective duration of the MCBI will be classified as Extensive.

For municipal bond funds, Morningstar also obtains from fund companies theaverage effective duration. In these cases static breakpoints are utilized. Thesebreakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: morethan 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. Inaddition, for non-US taxable and non-US domiciled fixed income funds staticduration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii)Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greaterthan 6 years.

Stock RegionsThis section provides the allocation of the portfolio's long stock positions to theworld regions, in comparison with a benchmark.

Risk and ReturnStandard deviation is a statistical measure of the volatility of a portfolio'sreturns around its mean.

Mean represents the annualized geometric return for the period shown.

Sharpe ratio uses a portfolio's standard deviation and total return to determinereward per unit of risk.

Alpha measures the difference between a portfolio's actual returns and itsexpected performance, given its beta and the actual returns of the benchmarkindex. Alpha is often seen as a measurement of the value added or subtractedby a portfolio's manager.

Beta is a measure of the degree of change in value one can expect in a portfoliogiven a change in value in a benchmark index. A portfolio with a beta greaterthan one is generally more volatile than its benchmark index, and a portfoliowith a beta of less than one is generally less volatile than its benchmark index.

R-squared reflects the percentage of a portfolio's movements that is explainedby movements in its benchmark index, showing the degree of correlationbetween the portfolio and a benchmark. This figure is also helpful in assessinghow likely it is that alpha and beta are statistically significant.

Portfolio YieldThe dividend yield produced for the most recent 12 months is presented.

Fundamental AnalysisThe below referenced data elements are a weighted average of the long equityholdings in the portfolio.



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The median market capitalization of a subaccount's equity portfolio gives you ameasure of the size of the companies in which the subaccount invests.

The Price/Cash Flow ratio is a weighted average of the price/cash-flow ratios ofthe stocks in a subaccounts portfolio. Price/cash-flow shows the ability of abusiness to generate cash and acts as a gauge of liquidity and solvency.

The Price/Book ratio is a weighted average of the price/book ratios of all thestocks in the underlying fund's portfolio. The P/B ratio of a company iscalculated by dividing the market price of its stock by the company's per-sharebook value. Stocks with negative book values are excluded from this calculation.

The Price/Earnings ratio is calculated by dividing the market value of the equityassets by the trailing 12 month earnings. The 12 month earnings value comesfrom multiplying the number of shares and the adjusted trailing 12 months'earnings per share for each equity asset and summing the results.

The Price/Sales ratio is a weighted average of the price/sales ratios of thestocks in the underlying fund's portfolio. The P/S ratio of a stock is calculated bydividing the current price of the stock by its trailing 12 months' revenues pershare. In computing the average, Morningstar weights each portfolio holding bythe percentage of equity assets it represents.

The return on assets (ROA) is the percentage a company earns on its assets in agiven year. The calculation is net income divided by end-of-year total assets,multiplied by 100.

The Return on Equity (ROE) is the percentage a company earns on itsshareholders' equity in a given year. The calculation is net income divided byend-of-year net worth, multiplied by 100.

Market Maturity shows the percentage of a holding's long common stocks thatare domiciled in developed and emerging markets.

The data elements listed below are a weighted average of the long fixed incomeholdings in the portfolio.

Average maturity is used for holdings in the taxable fixed-income category. Thisis a weighted average of all the maturities of the bonds in a portfolio, computedby weighting each maturity date by the market value of the security.

Credit quality breakdowns are shown for corporate-bond holdings and depict thequality of bonds in the underlying portfolio. The report shows the percentage offixed-income securities that fall within each credit quality rating as assigned byan NRSRO. Bonds not rated by an NRSRO are included in the not rated (NR)category.

Debt as a percentage of capital is calculated by dividing long-term debt by totalcapitalization (the sum of common equity plus preferred equity plus long-termdebt). This figure is not provided for financial companies.

Duration is a time measure of a bond`s interest-rate sensitivity.

Net Margin is a measure of profitability. It is equal to annual net income dividedby revenues from the same period for the past five fiscal years, multiplied by100.

Type Weightings divide the stocks in a given holding's portfolio into eight typedesignations, each of which defines a broad category of investmentcharacteristics. Not all stocks in a given holding's portfolio are assigned a type.These stocks are grouped under NA.

The data elements listed below are a weighted average of the total holdings inthe portfolio.

The average expense ratio is the percentage of assets deducted each year foroperating expenses, management fees, and all other asset-based costs incurredby the fund, excluding brokerage fees. Please note for mutual funds, variableannuities/life, ETFs and closed-end funds, we use the gross prospectus ratio asprovided in the prospectus. Separate accounts and stocks are excluded from theaverage expense ratio.

Potential capital gains exposure is the percentage of a holding's total assetsthat represent capital appreciation.

Stock Intersection ReportDisclosure Statement

Used as supplemental sales literature, the Stock Intersection report must bepreceded or accompanied by the fund's/policy's current prospectus orequivalent. In all cases, this disclosure statement should accompany the StockIntersection report. Morningstar is not itself a FINRA-member firm. Informationcontained in the report is from the most recent information available toMorningstar.

The Stock Intersection report reviews the top 50 holdings in the portfolio toidentify, at a glance, the portfolio's overall weighting in a particular security orsector. This report only displays the top 50 holdings; the investor's portfolio mayhold substantially more.

Note that while the investor does not own the securities held by an open-endfund, closed-end fund, or similar investment, the holdings are relevant inreviewing the overall asset allocation and diversification. This report is not anoffer or recommendation by Morningstar to purchase or liquidate any securitylisted.

Percentage of PortfolioThe Percentage of Portfolio column indicates the percentage of net assets anygiven security (either as an individual holding or as an underlying stock) makesup as an overall position of the portfolio.

Holding Portfolio DateThe Portfolio Date is the date that the fund's portfolio was last updated. Whenmaking comparisons among funds, it is an important date to keep in mind.Although Morningstar tries to ensure that we receive timely information, wedon't always receive current information from fund companies. By law, fundsneed only report this information two times during the calendar year, and theyhave two months after the report date to actually release the shareholder reportand portfolio. Therefore, it is possible that a fund's portfolio could be up to eightmonths old at the time of publication.

SectorMorningstar breaks down all equities into the following sectors: ConsumerDefensive, Healthcare, Utilities, Communication Services, Energy, Industrials,Technology, Basic Materials, Consumer Cyclical, Financial Services, and RealEstate.

Investment Risks



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International/Emerging Market Equities: Investing in international securitiesinvolves special additional risks. These risks include, but are not limited to,currency risk, political risk, and risk associated with varying accountingstandards. Investing in emerging markets may accentuate these risks.

Sector Strategies: Portfolios that invest exclusively in one sector or industryinvolve additional risks. The lack of industry diversification subjects the investorto increased industry-specific risks.

Non-Diversified Strategies: Portfolios that invest a significant percentage ofassets in a single issuer involve additional risks, including share pricefluctuations, because of the increased concentration of investments.

Small Cap Equities: Portfolios that invest in stocks of small companies involveadditional risks. Smaller companies typically have a higher risk of failure, andare not as well established as larger blue-chip companies. Historically, smaller-company stocks have experienced a greater degree of market volatility than theoverall market average.

Mid Cap Equities: Portfolios that invest in companies with market capitalizationbelow $10 billion involve additional risks. The securities of these companiesmay be more volatile and less liquid than the securities of larger companies.

High-Yield Bonds: Portfolios that invest in lower-rated debt securities(commonly referred to as junk bonds) involve additional risks because of thelower credit quality of the securities in the portfolio. The investor should beaware of the possible higher level of volatility, and increased risk of default.

Tax-Free Municipal Bonds: The investor should note that the income from tax-free municipal bond funds may be subject to state and local taxation and theAlternative Minimum Tax.

Bonds: Bonds are subject to interest rate risk. As the prevailing level of bondinterest rates rise, the value of bonds already held in a portfolio declines.Portfolios that hold bonds are subject to declines and increases in value due togeneral changes in interest rates.

HOLDRs: The investor should note that these are narrow industry-focusedproducts that, if the industry is hit by hard times, will lack diversification andpossible loss of investment would be likely. These securities can trade at adiscount to market price, ownership is of a fractional share interest, theunderlying investments may not be representative of the particular industry, theHOLDR might be delisted from the AMEX if the number of underlying companiesdrops below nine, and the investor may experience trading halts.

Hedge Funds: The investor should note that hedge fund investing involvesspecialized risks that are dependent upon the type of strategies undertaken bythe manager. This can include distressed or event-driven strategies, long/shortstrategies, using arbitrage (exploiting price inefficiencies), internationalinvesting, and use of leverage, options and/or derivatives. Although the goal ofhedge fund managers may be to reduce volatility and produce positive absolutereturn under a variety of market conditions, hedge funds may involve a highdegree of risk and are suitable only for investors of substantial financial meanswho could bear the entire loss of their investment.

Bank Loan/Senior Debt: Bank loans and senior loans are impacted by the risksassociated with fixed income in general, including interest rate risk and defaultrisk. They are often non-investment grade; therefore, the risk of default is high.These securities are also relatively illiquid. Managed products that invest inbank loans/senior debt are often highly leveraged, producing a high risk ofreturn volatility.

Exchange Traded Notes (ETNs): ETNs are unsecured debt obligations. Anyrepayment of notes is subject to the issuer's ability to repay its obligations.ETNs do not typically pay interest.

Leveraged ETFs: Leveraged investments are designed to meet multiples of thereturn performance of the index they track and seek to meet their fundobjectives on a daily basis (or other time period stated within the prospectusobjective). The leverage/gearing ratio is the amount of excess return that aleveraged investment is designed to achieve in comparison to its indexperformance (i.e. 200%, 300%, -200%, or -300% or 2X, 3X, -2X, -3X).Compounding has the ability to affect the performance of the fund to be eithergreater or less than the index performance multiplied by the multiple statedwithin the funds objective over a stated time period.

Short Positions: When a short position moves in an unfavorable way, the lossesare theoretically unlimited. The broker may demand more collateral and amanager might have to close out a short position at an inopportune time to limitfurther losses.

Long-Short: Due to the strategies used by long-short funds, which may includebut are not limited to leverage, short selling, short-term trading, and investing inderivatives, these funds may have greater risk, volatility, and expenses thanthose focusing on traditional investment strategies.

Liquidity Risk: Closed-end fund, ETF, and HOLDR trading may be halted due tomarket conditions, impacting an investor’s ability to sell a fund.

Market Price Risk: The market price of ETFs, HOLDRs, and closed-end fundstraded on the secondary market is subject to the forces of supply and demandand thus independent of the NAV. This can result in the market price trading ata premium or discount to the NAV, which will affect an investor’s value.

Market Risk: The market prices of ETFs and HOLDRs can fluctuate as a result ofseveral factors, such as security-specific factors or general investor sentiment.Therefore, investors should be aware of the prospect of market fluctuations andthe impact it may have on the market price.

Target-Date Funds: Target-date funds typically invest in other mutual funds andare designed for investors who are planning to retire during the target date year.The fund's target date is the approximate date when investors expect to beginwithdrawing their money. A target-date fund's investment objective/strategytypically becomes more conservative over time, primarily by reducing itsallocation to equity mutual funds and increasing its allocations in fixed-incomemutual funds. An investor's principal value in a target-date fund is notguaranteed at any time, including at the fund's target date.

High double- and triple-digit returns: High double- and triple-digit returns werethe result of extremely favorable market conditions, which may not continue tobe the case. High returns for short time periods must not be a major factor whenmaking investment decisions.

Benchmark Disclosure

BBgBarc US Agg Bond TR USDThis index is composed of the BarCap Government/Credit Index, the Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. The returns wepublish for the index are total returns, which includes the daily reinvestment ofdividends. The constituents displayed for this index are from the followingproxy: iShares Core US Aggregate Bond ETF.



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DJ Moderately Conservative TR USDThis risk-based index consists stocks, bonds, and cash and is intended torepresent 40% of the risk and return of the 100% Global Portfolio Index.

MSCI EAFE NR USDThis Europe, Australasia, and Far East index is a market-capitalization-weightedindex of 21 non-U.S., industrialized country indexes.

This disclosure applies to all MSCI indices: Certain information included hereinis derived by Morningstar in part from MSCI’s Index Constituents (the “IndexData”). However, MSCI has not reviewed any information contained herein anddoes not endorse or express any opinion such information or analysis. MSCIdoes not make any express or implied warranties, representations or guaranteesconcerning the Index Data or any information or data derived therefrom, and inno event will MSCI have any liability for any direct, indirect, special, punitive,consequential or any other damages (including lost profits) relating to any use ofthis information.

S&P 500 TR USDA market capitalization-weighted index composed of the 500 most widely heldstocks whose assets and/or revenues are based in the US; it's often used as aproxy for the U.S. stock market. TR (Total Return) indexes include dailyreinvestment of dividends. The constituents displayed for this index are from thefollowing proxy: iShares Core S&P 500 ETF.

USTREAS T-Bill Auction Ave 3 MonThree-month T-bills are government-backed, short-term investments consideredto be risk-free and as good as cash because the maturity is only three months.Morningstar collects yields on the T-bill on a weekly basis from the Wall StreetJournal.



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srwkhwlfdo$oorfdwlrq $53(7) · hypothetical portfolio illustration 07-16-2013 to 08-31-2017...

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