Page 253

253

Step 11: Risk Exposure

Index Portfolio 50

Simulated Passive Investor Experiences (SPIEs)

Based on 50 Years of Monthly Data (January 1, 1964 to December 31, 2013) 600 Months Examples of 8-Year Monthly Rolling Periods 1 1

Jan 64

8 Yrs

Feb 64

2 3

Mar 64

4

Apr 64

1961

1962

Dec 71

8 Yrs

Jan 72

8 Yrs

Feb 72

8 Yrs 1963

1964

1965

Mar 72

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

Rolling Period Return Data: 50 Years (1964 to 2013) Return Median Per Period # of Median Range Ann'lzd Number of: Rolling Return (High minus Growth of $1 Yrs Months Periods (50th %ile) Low) 0.08 0.25 0.5 1 2 3 4 5 6 7 88 1 9 10 11 12 13 14 15 20 30 40 50

1 3 6 12 24 36 48 60 72 84 96 96

600 598 595 589 577 565 553 541 529 517 505 505 493 481 469 457 445 433 421 361 241 121 1

108 120 132 144 156 168 180 240 360 480 600

1.02% 2.95% 5.20% 11.17% 10.30% 9.81% 9.43% 9.44% 9.09% 9.24% 9.42% 9.42% 9.42% 9.22% 9.37% 9.36% 9.51% 9.80% 10.11% 11.32% 11.05% 10.14% 9.72%

$1.01 $1.03 $1.05 $1.11 $1.22 $1.32 $1.43 $1.57 $1.69 $1.86 $2.05 $2.05

22.90% 35.47% 51.72% 65.08% 39.94% 30.05% 25.68% 22.18% 19.46% 16.50% 14.23% 14.23%

$2.25 13.76% $2.42 12.36% $2.68 13.07% $2.93 12.57% $3.26 12.25% $3.70 10.56% $4.24 11.05% $8.54 7.55% 3.53% $23.23 1.82% $47.66 0.00% $103.34

Lowest Rolling Period Return

Lowest Rolling Period Date 10/87-10/87 9/08-11/08 9/08-2/09 3/08-2/09 3/07-2/09 3/06-2/09 3/05-2/09 3/04-2/09 12/68-11/74 1/68-12/74 3/01-2/09 3/01-2/09 3/00-2/09 3/99-2/09 3/98-2/09 3/97-2/09 3/96-2/09 10/97-9/11 3/94-2/09 3/89-2/09 7/83-6/13 3/69-2/09 1/64-12/13

Highest Rolling Period Date

Growth of $1 in Lowest Period

-11.30% $0.89 -16.52% $0.83 -23.43% $0.77 -24.50% $0.75 -13.73% $0.74 -6.44% $0.82 -2.64% $0.90 -0.52% $0.97 -0.06% $1.00 2.38% $1.18 2.99% $1.27 2.99% $1.27 3.17% $1.32 4.33% $1.53 3.73% $1.50 4.37% $1.67 4.90% $1.86 5.54% $2.13 5.25% $2.15 6.63% $3.61 8.88% $12.82 8.98% $31.19 9.72% $103.34

1/75-1/75 1/75-3/75 3/09-8/09 7/82-6/83 7/84-6/86 8/84-7/87 7/82-6/86 8/82-7/87 10/81-9/87 4/80-3/87 10/81-9/89 10/81-9/89 1/75-12/83 9/77-8/87 1/75-12/85 9/74-8/86 10/74-9/87 1/75-12/88 10/74-9/89 10/74-9/94 1/75-12/04 12/66-11/06 1/64-12/13

Growth of $1 in Highest Period

Highest Rolling Period Return

11.60% $1.12 18.95% $1.19 28.29% $1.28 40.58% $1.41 26.21% $1.59 23.61% $1.89 23.04% $2.29 21.66% $2.67 19.40% $2.90 18.88% $3.36 17.22% $3.56 16.93% $4.09 16.69% $4.68 16.81% $5.52 16.93% $6.54 17.15% $7.82 16.10% $8.09 16.30% $9.63 14.18% $14.18 12.40% $33.36 10.81% $60.60 9.72% $103.34

8-Year 1 Monthly Rolling Periods: 50 Years (1964 to 2013) Total of 505 Rolling Periods 120 110 100 90 80 70 60 50 40 30 20 10 0

5th* 5.24%

0

1

2

3

4

5

25th* 7.57%

6

7

8

50th* 9.65%

9

10

75th* 13.43%

11

12

13

14

*Percentile ranking of all the rolling periods.

95th* 17.12%

15

16

17

18

19

20

21

22

23

24

25

Annualized Returns for 8-Year Monthly Rolling Periods (%) 8-years represents the estimated average holding period for investors who score 50 on the Risk Capacity Survey at ifa.com. The Median Annualized Returns, Return Range, and Median Growth of $1 shown for 1, 3, and 6 month periods are not annualized. Sources, Updates, and Disclosures: ifabt.com, Appx A

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