Transcript Slide 1

SEI – Since 1968
SEI Creates & Manages Wealth For Institutions and Private Clients
A leading global provider of outsourced business solutions
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As of June 30, 2007, SEI managed $212 billion in assets for investors in 12 countries, over $8.6 billion in Canada
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Publicly held corporation with 40% employee ownership
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Since 1968 we have helped institutions and individuals create and maintain wealth
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Leading provider of high-end, Fee-Based investment management offered through independent investment advisors
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Potential Danger Signals in Your Portfolio
Yes
No
• Lack of clear investment policy (IPS)
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• Investments mismatched with objectives
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• Inappropriate level of risk
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• Lack of diversification
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• Under performing investments or managers
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• Style drift
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• Overlapping investments or management styles
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• Excessive expenses or trading activity
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• Lack of monitoring, adjusting, rebalancing
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• Unclear or untimely reporting
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• Lack of communication and service
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Proper Asset Allocation Diversifies
Across Global Security Markets
International
Developed
Equities
Canadian
Equities
High Yield
International
Fixed Income
Emerging
Markets
Equity
Canadian
Fixed
Income
Emerging
Markets
Debt
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Why Diversify by Asset Class?
Performance of Various Asset Classes: 1993 to 2006
Annual Total Returns of Key Indices (Based on Sector)
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
The information seen is for illustrative purposes only and is not reflective of the performance of any SEI Funds. Past performance is no guarantee of future results.
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Why Diversify by Style?
Performance of Various Canadian Equity Investment Styles: 1994 to 2006
Annual Total Returns of Key Styles
The information seen is for illustrative purposes only and is not reflective of the performance of any SEI Funds. Past performance is no guarantee of future results.
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Your Optimal Asset Allocation
The Importance of Asset Classes
• How much in stock?
• How much in bonds?
• How much cash?
Canadian vs. Foreign?
Stocks?
Cash?
• How much in Canadian securities?
• How much foreign content?
Bonds?
Asset Allocation = Diversification = Lower Risk
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Retail Vs. Institutional?
Retail Investors
Institutional Investors
• Chase return
• Consider both return and risk
• Buy/sell short-term
• Invest long term
• Make decisions themselves
• Use professional managers
• Have individual positions
• Have a portfolio
• Concentrate
• Diversify
• Act on emotion
• Use a scientific process
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SEI Managed Process
A Scientific Approach to
Disciplined Investing
Planning Process
Establishes Goals
Sets Risk Limits
Custom
Portfolio
Sets Long Term Target
Sets Short Term Limits
Manager
Selection
Low Cost Vehicle
Specialist Managers
Rebalancing
Reallocation
Maintains
Objectives
Monitoring
and Reporting
Keeps You
Informed and On Track
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Mutual Funds vs. SEI…
Represents a Difference From Regular Mutual Funds
Regular Mutual Funds
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Intensely marketed products
Good managers go bad
Star managers move
DSC fees lock people in
Mutual fund portfolios become
unbalanced and too risky
SEI Manager of Managers
• Customized asset management
from the world’s leading money
managers
• Combining multiple managers
intelligently with less risk
• Strict monitoring of each manager
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SEI Portfolios vs. Separately Managed Accounts
• While most SMAs offer access to one portfolio manager, SEI’s Portfolios offer access to numerous global
portfolio managers, typically only available to pension plans or institutional investors
• SEI’s programs can offer clients further diversification than in SMAs, as portfolio manager’s specialties lies
within different mandates
• The chart below gives examples of some account minimums of portfolio managers within the underlying funds
of the SEI Portfolios
Mandate within SEI
Fund
Portfolio Manager
Separate Account
Minimum*
Canadian Equity Fund
Large Cap Growth
Sionna Investment Managers
Inc.
$20 million
Canadian Equity Fund
Large Cap Value
Jarislowsky Fraser Limited
$25 million
U.S. Large Company Equity
Fund
Relative Value
Aronson+Johnson+Oritz, L.P.
$50 million (USD)
U.S. Large Company Equity
Fund
Emerging Growth
Delaware Investment Advisors
$50 million (USD)
Core – Volatility Capture
Enhanced Investment
Technologies, LLC
$25 million (USD)
EAFE Equity Fund
GARP
Capital Guardian Trust
Company
$50 million (USD)
Canadian Fixed Income
Fund
Duration Management
Addenda Capital Inc.
$50 million
SEI Fund
U.S. Large Company Equity
Fund
* Separate Account Minimums listed are as of December 2006
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SEI’s Investment Philosophy
Objective:
Structured
Asset
Allocation
Achieve superior long-term investment
returns while managing risk
Efficient
Portfolio
Construction
Manager
Selection
Continuous
Portfolio
Monitoring
Asset allocation is the key determinant of performance
Portfolio structure is the key determinant of performance within each asset class
Specialist managers add value in their respective areas of expertise
Continuous monitoring of each manager’s daily trading is the only effective way to
control managers and maintain portfolio structure
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SEI’s Manager Research Process is Proven and Comprehensive
• Identify the inefficiencies in the market
• Measure the quality of the alpha source
• Understand the sustainability of the
inefficiencies
Analyze Markets to Identify
Drivers of Excess Return
(Alpha Sources)
• Proprietary framework to assess markets
• Leverages academic and manager network
• Global sourcing of managers
• Leverage knowledge and reputation
Define Manager Universe
by Alpha Source
• 90+ experienced professionals worldwide
• Proprietary database with 26,000 products
• Strong relationship with academia
• Understand drivers of return
• Separate quality of decisions from
outcomes
• Determine competitive advantage
Analysis of Decisions and
Decision Making Process
• Extensive analytical technology
• Database of historical investment decisions
• Assess sustainability of competitive
advantages
Onsite Due Diligence
• 20+ years assessing investment firms
• 1,000 global meetings annually
• Analyze changes in market dynamics
• Monitor firm and process changes
Construct Portfolios to
Diversify Alpha Risk
• 30+ current managers
• Approved backup list of managers
• Incentive based research team
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Manager Discovery: Casting a Wide Net
19,000 Managers in initial
universe
3,000 Managers remain after
initial fundamental screen
1,000 managers
remain after
qualitative screen
• Client and portfolio objective drive
manager discovery
• Seek opportunities and inefficiencies
in the market place
• Reputation leads to many firms
visiting SEI’s offices each year
• Focused research - no legal requirements
to have opinion on many firms
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Breadth of research allows us
“first mover” advantage
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Global presence and industry experience
45 managers remain
for further analysis
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SEI’s Investment Management Unit:
Leveraging Global Coverage
Client Portfolio Management
92 Professionals
Portfolio Strategy
Average Experience
13 Years
Global Investment Strategy
Average SEI Tenure
7 Years
Fundamental Research | Quantitative Research
Global
Fixed Income
Non-Directional
Strategies
Global
Equity
Over 49% with CFA’s & MBA’s
Global Private
Markets
Execution and Operations
*As of 1/31/2007
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Our Monitoring Process is Rigorous and Dynamic
Daily
Daily trade oversight
Weekly
Monthly
Performance attribution
Performance attribution
Review of buys & sells
Review of buys & sells
Additional Monitoring
• Ongoing dialogue with managers
• Onsite annual visits
• Risk management
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SEI Triggers for Manager Changes
SEI Manager Turnover
(1995-2006)
Better Ideas (5)
22%
Process (3)
29%
Reasons for Sell Decision
• Organization
(stability, liquidity event, etc.)
• Investment Team
(turnover, generational transition)
• Process
(inability to exploit inefficiencies, asset growth)
• Structural Change in Market
• Better Ideas (discovered higher quality manager)
Organization (1)
6%
Team (2)
20%
Structural (4)
23%
Advantages of SEI’s Sell Discipline
• Decision Speed
• Back-up Managers
• Market and Industry Analysis
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Canadian Equity Structure
As of August 2007
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Portfolio Structure: Style and Size
%
Importance of Large Cap Manager Style
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Large Cap
Growth
Outperforms
Large Cap Value
Outperforms
40
35
30
Return
Difference 25
Average = 9.84%
20
15
10
5
0
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Year
%
Importance of Market Capitalization
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Large Cap
Outperforms
Small Cap
Outperforms
20
Return
15
Difference
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Source: BARRA, SEI
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82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
Year
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Canadian Equity Market Investing (1998 – 2007)
Style indices returns are courtesy of BARRA Consulting.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Rates of
return do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are
not guaranteed, their values change frequently and past performances may be repeated.
Index performance returns do not reflect any management fees, transaction costs or expanses. One cannot invest directly in an index. Past performance does not guarantee future
results.
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Multi-Fund Multi-Asset
SEI Sample Balanced Fund
As of August 2007
5 Asset Classes
25% Canadian Equity
Canadian
Equity
Canadian
Equity
35% Foreign Equity
40% Fixed Income
International Equity
U.S. Equity
Cdn. Fixed Income
Global Fixed Income
10 Underlying SEI Funds
SEI Canadian
Cdn. Equity
- 23%
Cdn. Small
Company
Equity
Fund Equity - 2%
SEILarge
U.S. Large
SEI U.S.
Small
U.S.
Company
Equity
- 14%
U.S.
Small Company
Equity
- 2%
Company
Fund
Company
Fund
U.S. MidCap Synthetic - 5%
EAFESEI
Equity
EAFE- 12%
Emerging Markets Equity - 2%
Equity Fund
Cdn. Fixed Income - 30%
Real Return Bond - 6%
Enhanced Global Bond - 4%
Multi-Style
3026
Investment
Styles
Styles
Large Cap Market Driven
Relative Value
GlobalPremium
Value
Value
Value Focused
Deep Value
Contrarian Value
Value
Duration Management
Relative Value
Earnings Anticipation
DeepValue
Value
Core
Emerging Growth
Value
GlobalPremium/Momentum
GARP
Momentum Growth
Global Growth
GARP
Earnings Momentum
Relative Growth
Factor Customization
Small Cap Value
Quality Growth
Core
Small Cap Growth
Core – Customized Factors
Growth
Core – Volatility Capture
Value
Global Bonds
Investment Grade/Credit
Factor Rotation
Discipline Equity
Core Research
Factor Customization
Multi-Manager
36 Managers
Jarislowsky Fraser Limited
Sionna Investment Managers Inc.
Aronson+Johnson+Ortiz, LP
LSV Asset Management
Goodman & Company Inv. Cnsl Ltd. Sanford C. Bernstein & Co., LLC
Highstreet Asset Management Inc. Delaware Investment Advisors
PCJ Investment Counsel Ltd.
Goldman Sachs Asset Mgt., L.P.
MFC Global Investment Mgt.
Montag & Caldwell, Inc.
Sanford C. Bernstein & Co., LLC
AXA Rosenburg Inv. Mgt. LLC
Strategic Fixed Income, LLC
McKinley Capital Management Inc. Addenda Capital Inc.
Capital Guardian Trust Company
AEGON Capital Management Inc.
Fuller & Thaler Asset Mgt, Inc.
Co-operators Inv. Counselling Ltd.
Quantitative Management Ass, LLC J. Zechner Associates Inc.
Beutel, Goodman & Company Ltd. Quantitative Management Ass, LLC AllianceBernstein LP
Montrusco Bolton Investments Inc. Enhanced Investment Tech., LLC
Beutel, Goodman & Company Ltd.
Connor, Clark & Lunn Inv. Mgt. Inc.
Fiera YMG Management Inc.
The Boston Co. Asset Mgt, LLC
Martingale Asset Management, L.P.
Please note the number of managers is based on the total managers in each asset class.
TD Asset Management Inc.
Los Angeles Capital Management
PanAgora Asset Management, Inc.
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Automatic Portfolio Rebalancing
Equities
60%
Current
Asset
Allocation
Equities
50%
Target
Asset
Allocation
Cash
10%
Rebalancing ensures that your
recommended asset mix is
constantly in place.
Fixed
Income
30%
Rebalancing reduces unintended
and unnecessary risk keeping
your portfolio on the right course.
Cash
5%
Fixed Income
45%
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What Should You Expect from
a Professional Investment Advisor?
The right advisor is someone who will:
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Keep you from making emotional decisions that may hurt your
long-term goals
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Take the time to update you on your portfolio’s progress and
keep you on course with your investment objectives
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Continuously monitor your portfolio
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Provide you with a customized monthly report and quarterly and
annual reporting statements
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Keep you abreast of any additional opportunities in the market
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Develop an investment plan based on your needs that utilizes an
institutional investment process
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Representative Canadian Institutional Client List
AFG Industries Ltd.
Saint-Augustin, QC
Bell Aliant Regional Communications
Saint John, NB
Blount Canada Ltd.
Guelph, ON
BOC Canada Limited
Mississauga, ON
Brewster Transport Company Limited
Banff, AB
Brink’s Canada Limited
Toronto, ON
BAX Global (Canada) Ltd.
Mississauga, ON
Canadian Tire Corporation Limited
Toronto, ON
Connell Industries Canada Company
Mississauga, ON
Diamond Foundation
Vancouver, BC
Falconbridge Limited
Toronto, ON
Health Services Foundation of the
South Shore
Bridgewater, NS
Hitachi Construction Truck
Manufacturing Ltd.
Guelph, ON
HSBC Financial Corporation Limited
Toronto, ON
Jewish Community Foundation of
Montreal
Montreal, QC
Lafarge Canada Inc.
Concord, ON
Laurentian University of Sudbury
Sudbury, ON
Laurentian University of Sudbury
Sudbury, ON
Mercedes-Benz Canada Inc.
Toronto, ON
Moore Corporation Limited
Chicago, IL (USA)
Northern Cancer Research Foundation
Sudbury, ON
Northern Development Initiative Trust
Prince George, BC
Peerless Clothing Inc.
Montreal, QC
Reitmans (Canada) Limited
Montreal, QC
Ryerson Canada, Inc.
Etobicoke, ON
Smucker Foods of Canada Co.
Markham, ON
St. Peter’s Seminary Foundation
London, ON
Representative clients are selected by SEI to illustrate a sampling of SEI’s client base, but may not necessarily endorse all of the services provided by SEI. List as of June 30, 2007.
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Representative U.S. Corporate Institutional Client List
Ahlstrom USA
Windsor Locks, CT
Alfa Insurance Companies
Montgomery, AL
AT&T Inc.
San Antonio, TX
Builders Mutual Insurance
Raleigh, NC
California Casualty Management Co.
San Mateo, CA
Carlisle Companies Inc.
Charlotte, NC
C & D Technologies, Inc.
Blue Bell, PA
Clarks America, Inc.
Boston, MA
Cleveland-Cliffs Inc
Cleveland, OH
Comcast Corporation
Philadelphia, PA
CommScope*
Hickory, NC
CoorsTek, Inc.*
Golden, CO
Deloitte & Touche LLP
Morristown, VT
Ecolab, Inc.
St. Paul, MN
Elkem Metals Inc.
Pittsburgh, PA
ESSROC Italcementi Group
Nazareth, PA
Federal Mogul Corporation
Southfield, MI
FLSmidth Inc.*
Bethlehem, PA
Givaudan Corporation
Cincinnati, OH
Hercules, Inc.
Wilmington, DE
Independence Community Bank
Brooklyn, NY
Intelsat Global Services Corp.
Washington, DC
Jackson Energy Authority
Jackson, TN
JM Smucker company
Orrville, OH
Joy Global, Inc.
Milwaukee, WI
Lafarge NA, Inc.
Herndon, VA
LVMH Moet Hennessy Louis Vuitton
New York, NY
Marine Corps Community Services
Quantico, VA
Nalco Holding Company
Naperville, IL
Nashville Electric Services*
Nashville, TN
National Services Industries, Inc.
Atlanta, GA
Ottaway Newspapers
Campbell Hill, NY
Panasonic Corporation
Secaucus, NJ
Pearson, Inc.
New York, NY
Qantas Airways Ltd.*
Los Angeles, CA
Ryerson
Chicago, IL
SAP America Inc.
Newtown Square, PA
The Clearing House
New York, NY
US Filter Corporation
Palm Desert, CA
Valero Energy, Inc.*
San Antonio, TX
Representative clients are selected by SEI to illustrate a sampling of SEI’s client base, but may not necessarily endorse all of the services provided by SEI. List as of June 30, 2007.
* Sourced through the Advisor channel
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Representative Global Institutional Client List
South Africa
UK
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Old Mutual Symmetry (Cape Town)
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BOC Group plc (Windlesham, Surrey)
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Grant Thornton (Johannesburg)
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Diamond Trading Company (London)
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Transnet (Johannesburg)
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Nynas (Cheshire)
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Perenco (London)
University of Bristol (Bristol)
Hong Kong
Benelux
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American Club Hong Kong
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Hong Kong Jockey Club
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Hong Kong Housing Society
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Shui On Investment Company
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Hong Kong Electric Holdings
Equens, St. Psf. (Utracht)
Limited
Representative clients are selected by SEI to illustrate a sampling of SEI’s client base, but may not necessarily endorse all of the services provided by SEI. List as of June 30, 2007.
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Disclosures
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For more information about the SEI funds, please consult with your investment professional. The prospectus and other
important information relating to the SEI funds can be found at www.seic.com or www.sedar.com.
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Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund
investments. Please read the prospectus of the SEI fund before investing in them. Mutual fund securities are not
covered by the Canada Deposit Insurance Corporation or any other government deposit insurer. Mutual funds are not
guaranteed, their values change frequently and past performances may not be repeated.
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For those SEI funds which employ the 'manager-of-managers' structure, SEI Investments Canada Company has
ultimate responsibility for the investment performance of the fund due to its responsibility to oversee the sub-advisors
and recommend their hiring, termination and replacement.
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Material that discusses the SEI funds and index returns, represent an assessment at a specific point in time and is not
intended to be a forecast of future events, or a guarantee of future results. You cannot invest in an index. Index returns
do not reflect the impact of any management fees, transaction costs or expenses. The index information presented is
for illustrative purposes only, and is not reflective of the performance of specific SEI Funds.
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Except as otherwise noted, the rates of return shown are the historical annual compounded total returns including
changes in unit value and reinvestment of all distributions. The rates of return shown for periods of less than one year
are simple rates of return. Rates of return do not take into account sales, redemption, distribution or optional charges
or income taxes payable by any security holder that would have reduced returns.
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The information contained herein is for general information purposes only and is not intended to constitute legal, tax,
accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment. You
should not act or rely on the information contained herein without obtaining specific legal, tax, accounting and
investment advice from an investment professional.
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