MFS - insidedwp.ladwp.com · 14/11/2018 · Robert Almeida, an institutional portfolio manager an 18-year MFS veteran, will be named global investment strategist effective January

FOR INSTITUTIONAL USE ONLY

MFS® International Value EquityPresented to

Los Angeles Department of Water and Power14 November 2018

MFS® International Value Equity ii299-I-CT-IV-14Nov18.ii

PresentersPresenters

Camille Humphries Lee, CFA

Carolyn Lucey, CIMA

- Investment Officer

- Institutional Equity Portfolio Manager

- As an Institutional Portfolio Manager, participates in the research process and strategy discussions. Assesses portfolio risk, customizes portfolios to client objectives and guidelines, and manages daily cash flows. Communicates investment policy, strategy, and positioning.

- Joined MFS in 2000.

- Previous experience includes 3 years as Research Analyst at SG Cowen Securities Corporation; 8 years as Research Analyst and Associate Analyst at Alex Brown.

- Affiliations include CFA Institute, CFA Society of Boston

- University of Virginia, MBA

- University of Virginia, BA

- Director, Relationship Management

- As a Relationship Manager, responsible for the overall client experience including communicating portfolio positioning, strategy, and performance attribution and ensuring that our clients' ongoing service needs are met.

- Joined MFS in 1998; previous positions include Investment Director for Private Portfolio Services; Vice President, Director of Product Management; Assistant Vice President, Domestic Equity Product Manager.

- Previous experience includes 1 year as Product Manager at Van Kampen American Capital; 6 years as Product Manager at John Hancock Funds; 2 years as Associate at Putnam Investments.

- Affiliations include Investment & Wealth Institute

- Manhattanville College, BA

MFS® International Value Equity iii299-I-CT-IV-14Nov18.iii

Table of Contents

Contents Tab

Section A: Company Overview 1

Section B: Investment Process and Discipline 2

Section C: Market Overview 3

Section D: Performance Review 4

Section E: Portfolio Review and Characteristics 5

Section F: Fee Schedule 6

Section G: Glossary of Investment Terms 7

COMPANY OVERVIEW

MFS® International Value Equity 2299-I-CT-IV-14Nov18.2

MFS: Creating Value With 90 Years of Active SkillInvestment outcomes delivered through...

* MFS believes active skill or skilled active management includes one or more of the following behaviors: demonstrating conviction through low portfolio turnover and high active share, adding value in volatile markets and conducting integrated research within a collaborative culture.

Creating long-term value through active skill,* time and collaborative thinking

CLIENT ALIGNMENTA mutually benefi cial relationship

with shared beliefs, clear expectationsand the time needed to deliver

desired outcomes

RISK MANAGEMENTSeeing All Angles

Recognizing opportunity whilemanaging the downside

COLLECTIVE EXPERTISEInsight to Advantage

Diverse views and collaborative debatefor effective decision making

CONTINUITYTime Is an Asset

Harnessing the value of time for investors

§ Sharing information and diverse views

§ Actively debating insights

§ Collaborating for better decisions

§ Developing conviction

§ Extending time horizon and opportunity set

§ Sustaining our skill

§ Embedding risk in our process

§ Knowing material factors

§ Finding opportunity in risk


Assets under management (USD) as of September 30, 2018:Total firm AUM:

§ 484 billion USD

Total MFS International Value Equity strategy AUM: § 38.8 billion USD

Personnel Changes § Aditi Taylor, formerly of Deloitte & Touche LLP, joined MFS as Chief Risk Officer (CRO) on November 27, 2017. She succeeded the former CRO who left MFS in December 2017 to pursue other opportunities. Aditi spent over 18 years with Deloitte's Advisory practice working with multinational corporate environments advising on and implementing risk management programs. She focused on evaluating enterprise-wide risks and establishing effective strategies to detect, assess, and mitigate critical strategic, financial, operational, and compliance risks.

§ Effective January 1, 2018 Carol Geremia, co-head of Global Distribution and president of MFS Institutional Advisors, Inc., became head of Global Distribution and president of MFS Investment Management. Carol brings to the role 33 years of experience in business development, management and enhancing client relationships with the firm. She has been leading MFS' global institutional business since 2004 and will continue to serve as a member of the MFS Management Committee.

§ Beginning January 2018, MFS assumed all external research costs for all clients globally. We believe that paying for all external research is the most efficient and effective solution for our clients.

§ On February 15, 2018, MFS announced that James Swanson, chief investment strategist, will be retiring from the firm effective December 31, 2018. Robert Almeida, an institutional portfolio manager an 18-year MFS veteran, will be named global investment strategist effective January 1, 2019.

§ Effective January 1, 2019, Edward M. "Ted" Maloney will become the next chief investment officer (CIO). Ted will succeed Michael Roberge in the role of CIO and join the firm's management committee. Reporting to Michael Roberge, he will be responsible for the continued development and success of the global investment platform, leading a team of more than 200 investment professionals worldwide in investment research, portfolio management, trading and investment risk management.

MFS corporate update


Multi-Strategy (5%)

Global equities (19%)

EAFE/International equities (22%)US equities (36%)

Regional equities (6%)

Fixed Income (12%)

Asia Pacific (36%)EMEA (20%)

North America (44%)

28452.19 ex31JAN19

As of 30-Jun-18.1 Data is rounded to the nearest fi gure. ² Total fi xed income assets, including non-dedicated fi xed income mandates are 80 billion USD.3 Represents global clients in institutional vehicles only.

Well-diversified business across clients, regions, and investment strategies

Business Profile (USD) 473 billion total MFS® AUM

Client Types

Defi ned benefi t/defi ned contribution

Endowment and foundation

Sovereign wealth fund/government agency

Institutional platform/insurance subadvisory

Diversified Client and Asset Base¹

Assets

Global equities 89.5 billion

EAFE/international equities 103.3 billion

US equities 167.5 billion

Regional equities 30.0 billion

Fixed Income² 58.0 billion

Multi-strategy/other 24.7 billion

Institutional Business by Client Type and Region³

Regions

Assets

Asia Pacifi c36%EMEA

20%

North America44%

Fixed Income12%

Multi-Strategy5%

Global equities19%

EAFE/International equities22%

US equities35%

Regional Equities6%


Our experienced investment team and collaborative culture distinguish our approach to investing

MFS® Investment Professionals

As of 30-Sep-18.Years = average years industry experience

¹ Member of Investment Management Committee.

Executive ChairmanRobert Manning1

Chief Executive Offi cer and Chief Investment Offi cer – Michael Roberge1

Vice Chairman – David Antonelli1

26 Fixed IncomePortfolio Managers

24 years

49 EquityPortfolio Managers

22 years

9 QuantitativePortfolio Managers

23 years

Portfolio Management(84)

40 Fixed Income Analysts15 years

64 Equity Analysts14 years

9 Quantitative Analysts15 years

Research Team(113)

10 Fixed Income Associates3 years

19 Equity Associates3 years

15 Quantitative Associates11 years

Research/Investment Associates

(44)

Gregory Heller1, Director of Global Fixed Income Trading Brenda Farley¹, Director of Global Equity Trading

13 Equity Traders — 20 years16 Fixed Income Traders — 20 years

Trading(29)

Jeffrey Estella1, Director of Trading Analytics 3 Trading Analytics Analysts – 17 years

Trading Analytics(3)

TOTAL273


As of 30-Sep-18.

MFS® Equity Investment Professionals

Executive Chairman | Robert ManningChief Executive Offi cer, and Chief Investment Offi cer | Michael Roberge || President | Carol Geremia

Vice Chairman | David Antonelli || Chief Investment Offi cer, Global Equity | Kevin BeattyChief Investment Risk Offi cer, Director of Quantitative Solutions | Joseph Flaherty

Portfolio Management

Core Value Growth Quantitative

Kevin Beatty Nevin Chitkara Robert Almeida Dino Davis

Filipe Benzinho Pablo de la Mata David Antonelli James Fallon

Gabrielle Gourgey Anne-Christine Farstad Matthew Barrett Matthew Krummell

Victoria Higley Rick Gable Andrew Boyd Jonathan Sage

Christopher Jennings Steven Gorham Jeffrey Constantino John Stocks

Ben Kottler Camille Humphries Lee Kevin Dwan

Daniel Ling Katrina Mead Eric Fischman

Joseph MacDougall Jeffrey Morrison Brett Fleishman

Edward Maloney Kevin Schmitz Peter Fruzzetti

Ryan McAllister Maura Shaughnessy José Luis García

Roger Morley David Shindler Paul Gordon

Sanjay Natarajan Benjamin Stone Michael Grossman

Chris Sunderland Brooks Taylor Jamie Keating

Alison O'Neill Mackey Barnaby Wiener Robert Lau

Edward Dearing Thomas Meléndez

Dimi Ntantoulis

Nicholas Paul

Harry Purcell

Matthew Sabel

Joseph Skorski

Nicole Zatlyn

Fundamental ResearchSheba Alexander Philip Evans Andrew Quatrale

Mariana Araujo David Falco Marco Quiza

Koki Akala Molly Frew C.V. Rao

Michael Aurelio Genevieve Gilroy Matthew Scholder

Ryan Ball Lionel Gomez James Schuster

Aparna Bedi Tanna Simon Gresham Deividas Seferis

Jordan Bertier Ward Griffi ths Eleanor Shing

Ian Bigney Jude Jason Benjamin Slingsby

Eric Braz Zahid Kassam Nicholas Spratt

Katherine Cannan Salman Khan Florence Taj

Nathalie Casali Yuko Kikuchi Gaurav Tewary

Jean-Marc Chow Takeyuki Kora Jeanine Thomson

Tim Clark Bradford Mak Scott Walker

Christopher Cork Stuart McPherson Stephen White

Thomas Crowley Bradford Mak Robert Wilson

Poojah Daftary Stuart McPherson Kevin Wei-Cher Yeoh

Shanti Das-Wermes Ayako Mikami Donald Zhang

Claud Davis Colin Moore Erica Zieba

Marion de Floris Johnathan Munko

Nicholas Demko Raj Nair

Timothy Dittmer Vipin Narula

Reinier Dobbelmann James Neale

Guillermo Espallargas Richard Offen

Quantitative Research

Mark Citro

Noah Rumpf

Shruthi Saralaya

Ramanathan Sundaram

Michael Tata

Bhushan Vartak

Jenney Zhang

Trading and Risk Analytics

Brenda Farley, Director of Equity Trading Jeffrey Estella, Director of Trading Analytics and Investment Operations

Jennifer Blanchette Michael Flint Alfred Sablone Bradley Zancanaro Trading and Analytics Investment Operations

Alan Brown Charles Graul Michael Spalla Mark Garabedian, Transaction Cost Specialist

Robb Mansi, Director of Global Investment and Client Support

Claudio Faiella Robert Johnson Eric Trach Steven Donovan Nancy MacDonald Matthew Sweeney

Marc Pascal Matt Wilkinson Khaled Shahin, Transaction Cost Specialist

Christopher Frier Becky Nanberg

Matthew Halperin Julie O’Dette


Experienced MFS International Value Equity Team

Benjamin Stone, IIMRPortfolio Manager22 years industry experience

Pablo de la Mata, CFAPortfolio Manager14 years industry experience

Camille Lee, CFAInstitutional Portfolio Manager28 years industry experience

Additional resources

Nevin Chitkara

Portfolio Manager25 years indsutry experience

Steven Gorham, CFA

Portfolio Manager28 years industry experience

Barnaby Wiener

Portfolio Manager24 years industry experience

Kate Mead, CFA

Institutional Portfolio Manager23 years industry experiencee

John Mahoney, CFA

Investment Product Specialist14 years industry experience

Experienced management, tested by markets, backed by depth

MFS® International Value Equity 7299-I-CT-IV-14Nov18.715OCT18

MFS International Value Equity Team

Benjamin Stone, IIMR - Investment Officer

- Equity Portfolio Manager

- As an Equity Portfolio Manager, responsible for buy and sell decisions, portfolio construction, risk control

and cash management. Participates in the research process and strategy discussions.

- Joined MFS in 2005; previous positions include Equity Research Analyst.

- Previous experience includes 9 years as Research Analyst at Schroders Investment Management.

- Affiliations include Institute of Investment Management and Research

- Durham University, BA, 2:1

Pablo de la Mata, CFA - Investment Officer

- Equity Portfolio Manager, Equity Research Analyst

- As a Non-U.S. Equity Portfolio Manager, responsible for final buy and sell decisions, portfolio construction,

risk and cash management. Participates in the research process and strategy discussions.


- Previous experience includes 1 year as Equity Research Analyst at Magnetar Capital; 3 years as Equity

Research Analyst at Blackrock/Merrill Lynch Investment Managers; 1 year as Wholesale Support at Merrill

Lynch Investment Managers.

- Affiliations include CFA Institute

- Colegio Universitario de Estudios Financieros (CUNEF), BS

Camille Humphries Lee, CFA - Investment Officer

- Institutional Equity Portfolio Manager

- As an Institutional Portfolio Manager, participates in the research process and strategy discussions.

Assesses portfolio risk, customizes portfolios to client objectives and guidelines, and manages daily cash

flows. Communicates investment policy, strategy, and positioning.


- Previous experience includes 3 years as Research Analyst at SG Cowen Securities Corporation; 8 years as

Research Analyst and Associate Analyst at Alex Brown.

- Affiliations include CFA Institute, CFA Society of Boston

- University of Virginia, MBA

- University of Virginia, BA


Commitment to world class client service results in enduring relationships

Non-profit & other § Archdiocese of New York

§ Children’s Hospital of Pittsburgh

§ Furman University

§ National Gallery of Art

§ Northwell Health System, Inc.

§ Oregon and Southwest Washington Painters

§ REST Industry Super, Australia

§ Saskatchewan Healthcare Employees' Pension

§ Plan, Canada

§ Texas A&M Foundation

§ Trinity University

§ UFCW Tri-State Pension

§ University of British Columbia, Canada

§ University of Western Ontario, Canada

Corporate funds § American Airlines

§ Bristol-Myers Squibb

§ CenturyLink

§ Manulife Financial, Canada

§ Mitsubishi Electric Pension Fund

§ Panasonic Pension Fund, Japan

§ PepsiCo Inc.

§ Robert Bosch GmbH

§ Soka-Bau-Zusatzversorgungskasse des Baugewerbes AG

§ Telstra Super, Australia

§ Toyota Motor Corporation, Japan

Sub-advised accounts § ANZ New Zealand Investments

§ Financière des professionnels, Canada

§ GuideStone Capital Management, USA

§ NTUC Income Insurance, Singapore

1 As of 30-Sep-18. This does not represent a complete list of MFS’ institutional clients. The selection of clients represents a sampling of those who have agreed to the use of their names.It is not known whether the listed clients approve or disapprove of MFS Institutional Advisors Inc. or the advisory service provided. The criteria used to include the above listed clients are a mix of investment style, type of client, and other considerations.

Representative MFS Institutional Client List1

Serving over 800 institutional clients globally

Commitment to world class client service results in enduring relationships

Public funds § Andra AP-Fonden

§ Bureau of Labor Funds, Taiwan

§ Canada Post Corporation, Canada

§ City of Phoenix

§ County of Los Angeles

§ Federation of National Public Service Workers

§ Personnel Mutual Aid Associations, Japan

§ Government Pension Investment Fund of Japan

§ Government Pension Fund, Thailand

§ Kapitalforeningen Lærernes Pension Invest, Denmark

§ Kapitalforeningen LD

§ LSR, The Pension Fund for State Employees in Iceland

§ Nebraska Investment Council

§ Parliamentary Contributory Pension Fund

§ Soka-Bau-Zusatzversorgungskasse des Baugewerbes AG, Germany


Carolyn Lucey, CIMADirector

Relationship Manager

Office phone: 617.954.5980

Cell phone: 617.513.5831

Fax: 617.210.8814

Email: [email protected]

Erin MandigoClient Service Manager

Phone: 617-954-4046

Email: [email protected]

Mailing AddressMFS Investment Management

111 Huntington Avenue, 23rd Floor

Boston, MA 02199

Key contacts

INVESTMENT PROCESS AND DISCIPLINE


Distinguishing Characteristics

What do we believe makes us different from other international value managers?

Integrated global research platform

§ Collaborative culture critical to process

§ Combines equity, fi xed-income, and quantitative analysis

Disciplined, consistent strategy

§ Seeks sustainable returns in various market environments

§ Assess investment opportunities in context of 5 to 10 year time horizon

Rigorous valuation discipline

§ Patient, contrarian approach

§ Focus on downside risk management

Integrated approach to analyzing value and evaluating risk


Goal Outperform the MSCI World ex US IMI Index (net div) over full market cycles. The reference style for MFS is the MSCI World Value ex US IMI Index.

Strategy

Invest rather than speculate Most market participants speculate on near-term information and over-react to short-term newsflow.

§ We assess investment opportunities in context of 5 to 10 year time horizon. Our global research platform, collaborative investment approach and compensation structure are all aligned with a long-term approach.

Analyze rather than forecast Most market participants attach too much weight to forecasts, which often prove inaccurate, particularly at inflection points.

§ Typically, we seek an analytical advantage by evaluating the long-term quality, sustainability, improvement potential and intrinsic value of businesses.

Focus on downside risk Most market participants overemphasize upside potential vs.downside risk.

§ We manage capital with the goal of attempting to avoid stocks with substantial downside risk, and only invest where valuations more than compensate for inherent risks.

Investment Approach

Leverage long-term analysis to exploit market inefficiencies


Investment Process Overview

Analyze rather than forecast

§ Evaluate quality

§ Assess improvement potential

§ Determine appropriatevaluation

350 to 450 non-U.S. buy candidates

Focus on downside risk

§ Attractive valuation

§ Risk/return

§ Risk Review

150 to 200 stocks that fi t investment approach

Invest rather than speculate

§ Research analysts

§ Portfolio managers

§ Quantitative analysis

More than 1,000 non-U.S. stocks rated by analyst team

Best high-qualityvalue ideas

Generally, have held 80-100 holdings

Idea generation Fundamental analysis

Portfolio construction

The information listed above is current as of the date of the material, and any additions, modifi cations, or deletions that have occurred since that date are not refl ected.

Rigorous analysis of business, risk and valuation

MFS® International Value Equity


Toronto Boston

Mexico City

São Paulo

London

Tokyo

Hong Kong

Singapore

Sydney

104Fundamental

Research Analysts

8Global

Sector Teams

84Portfolio

Managers

organized by regionand sectors

USD 44.9 bn in AUM with signifi cant industry experience in value, core, growth, quantitative and fi xed income investing

9 quantitative analysts provide proprietary research models, stock rankings, and scenario testing; backed by15 quantitative researchassociates

Collaborative research environment

We believe a fully integrated global research platform provides competitive advantages

MFS Global Research Platform

Analyst-Managed Strategies

11Quantitative

Research Analysts

9

25 U.S. equity analysts 39 non-U.S. equity analysts40 credit analysts backed by29 research/investment associates

As of 30-Sep-18


Evaluate quality

Assess im

provement potential Determine app

ropr

iate

val

uati

on

Stock Analysis: Analyze Rather Than Forecast

Assess durability of returns and intrinsic value

§ Sustainability of business model

§ Industry growth rate, cyclicality and risk

§ Management strength and capital allocation

§ Changes in supply/demand

§ Relative profi tability andrestructuring potential

§ Analysis of change in management

§ Examine a broad range of approaches

§ Assess value relative to history,peers, market

Intrinsicvalue


Entry points Portfolio construction Exit points

§ Negative short-term event

§ Underappreciated duration of returns

§ Unrecognized improvement potential

§ Attractive valuation

§ Determine position size by conviction and liquidity

§ Manage and evaluate risk and return

Security level and systemic risk assessment

§ Senior management semiannual risk review: portfolio vs. objectives

§ Generally, portfolio exposure has been:

Position size < 5% of portfolio at purchase

Industry weighting < 25% of portfolio

Emerging markets < 15% of portfolio

§ Expensive valuation

§ Fundamentals change

§ Attractive alternatives

Portfolio Construction: Focus on Downside Risk

Seeks to invest where we believe valuations more than compensate for inherent risks

The information listed above is current as of the date of the material, and any additions, modifi cations, or deletions that have occurred since that date are not refl ected.


A Holistic, Multifaceted Approach to Risk ManagementControls in place at security, portfolio, and firm-levelsInvestment Process Circle:

Manage risk

Sound Business Management § Stable, well-capitalized,

profitable enterprise

§ Strong, established parent

§ Diversified by business channel, geography and asset class

§ Rigorous capacity management

Broad Portfolio-Level Controls § Daily review of portfolio guidelines and risk

exposures

§ Pre- and post-trade compliance system for each portfolio’s guidelines

§ Semiannual strategy review by Investment Management Committee

Operational Excellence § Conservative approach to selection and

monitoring of counterparties

§ Highly liquid investment strategies

§ Experienced traders (average 20 years) focused on best execution

§ Independent audit annually (SSAE 16, Type II)

Portfolio

Deep Understanding of Risks at Security Level (Know What You Own)

§ Specialization by sector and industry

§ Integration of fundamental equity, fixed income credit and quantitative analysts

§ Experienced investors (analysts average 15 years, portfolio managers average 24 years)

§ Emphasis on global collaboration

As of 30-Jun-18.

A balance of quantitative discipline and qualitative assessment


Note: This section is only intended to serve as a summary of the client’s investment guidelines.Please consult the current investment management agreement for complete investment guidelines.

Portfolio guidelines1. The portfolio shall be composed of cash equivalents and equity securities of companies doing business outside the United States (as defined

using MSCI classification of issuer or issue) with minimum market capitalizations of $200 million. Equity securities shall be restricted to those issues listed on the major local-country stock exchanges. The markets that MFS can invest in are those within the following indices: a. Morgan Stanley-Capital World ex-U.S. Value Investable Market Index ND (MSCI World ex-U.S. Value IMI ND)

b. Morgan Stanley-Capital World ex-U.S. Equity Investable Market Index ND (MSCI World ex-U.S. Equity IMI ND)

2. SEC Rule 144A international equity instruments with registration rights are fully permissible. Those instruments without registration rights must not exceed 10% of the lesser of cost or market value of any single international equity portfolio.

3. American Depository Receipts (ADRs) are permissible up to 2.5% of the total portfolio. Investing in Emerging Markets is prohibited. Emerging markets shall be defined as those countries included in the MSCI Emerging Markets Investable Market Index ND.

4. In order to minimize transaction costs and market impact associated with country reclassification, and as MSCI reclassifies specific countries from one market to another (such as from emerging to developed or frontier to emerging), MFS, with advance notification to the Retirement Plan Manager, may invest in such countries, subsequent to the announcement of MSCI’s formal reclassification and prior to its effective date.

5. MFS shall not use (non-currency) derivatives within the portfolio without the expressed written consent of the Plan. If MFS elects to use derivatives as part of its investment strategy, the Plan requires that MFS document the rationale for using such instruments. MFS shall not invest in letter or restricted stock, naked options or future contracts, and uncovered short positions or commodities. Use of any derivative instrument for speculation is prohibited.

6. Currency hedging up to a maximum of 25% of the portfolio (notional) is permitted for defensive purposes. Currency hedging shall be effected through the use of forward currency contracts and put and call options.

7. For prudent diversification the portfolio shall have a minimum of 30 issues quoted in at least 10 stock markets, although assets will not be specifically allocated to individual countries or markets. No more than 5% of the portfolio at the lesser of cost or market value shall be invested in any one issue. In addition, no issue shall be purchased in the Portfolio if more than 15% of the outstanding shares of that company are held by the Manager in the total of all of its accounts.

8. The cash equivalent portion should not normally exceed 15% of the portfolio. Cash equivalents may be U.S. dollar or non-U.S. dollar denominated.

LADWP’s investment guidelines

MARKET OVERVIEW


The views expressed in this presentation are subject to change at any time. These views should not be relied upon as investment advice, as securities recommendation, or as an indication of trading intent on behalf of any other MFS investment product.

Global equity markets advanced during the third quarter, fueled largely by the strength of US equities. Developed international markets generated lesser gains, and emerging markets posted small losses for the quarter. The US economic expansion continued, fueled by tax-cut driven growth, and the US unemployment rate fell to its lowest level since 1969. Meanwhile, economic fundamentals outside the US remained lackluster. The effects of US-China trade tariffs, uncertainty around Brexit and tensions between Italy and the European Union weighed on European equities. Japan was the best performing region in the EAFE universe during the quarter, benefitting from the weaker yen and expectations of continued political stability following the re-election of Prime Minister Abe as party leader.

As we look forward, the tariffs between the US and China, as well as Brexit in the UK, are adding to the already long list of risks to the global economy. The global economy is late in the business cycle, and the bull market is breaking records for its long-duration run, at a time when interest rates are rising in the US and growth outside the US has slowed.

We believe that the issues driving US-China trade tensions and Brexit in the UK are part of a broader theme of protectionism that is popping up in various regions around the world. For instance, the election of President Trump in the US and the political upheaval in Italy and Spain. Protectionism, in our view, reflects a challenge to the status quo and is largely a reaction to the bifurcation of income in recent years. The top 1% of the population in many developed countries reap a disproportionate share of profits, and the top 10%, or perhaps 20%, of the population lives well. Meanwhile, the vast majority have not benefitted in a meaningful way from the global economic recovery of the past decade. That frustration creates an environment ripe for protectionist politics.

In considering how tariffs and Brexit might affect the companies we invest in, we believe that businesses with value-added, differentiated products or services should be more protected from the dislocations resulting from these challenges. Furthermore, companies with little or no debt are better able to withstand the headwinds.

Market overviewAs of 30 September 2018

PERFORMANCE REVIEW


Yes No

All companies doing business outside the United States

Minimum market cap of $200 million

Equity securities listed on the major local-country stock exchanges

Emerging markets prohibited

Minimum of 30 issues quoted in at least 10 stock markets

No more than 5% of the portfolio invested in any one issue

No issue purchased if more than 15% of the outstanding shares of that company are held by the Mgr in total of all accounts managed.

Cash equivalent portion should not normally exceed 15% of the portfolio.

Compliance with LADWP’s investment guidelinesAs of 30 September 2018

Note: This section is only intended to serve as a summary of the client’s investment guidelines.Please consult the current investment management agreement for complete investment guidelines.


Market Overview

Region performance (%)1, as of 30-Sep-18

One year sector performance (%)2, as of 30-Sep-18

Market review as of 30-Sep-18 § Divergence between United States and rest-of-world equity performance has widened in recent months as global growth has become less

synchronized and the trade friction has intensified.

§ Growth in the US has been supported by fiscal stimulus, rising corporate profits, increased capital expenditures, and stronger employment and wages, which have outweighed the impact of less accommodative monetary policy.

§ Momentum outside the US has weakened amid macroeconomic and political concerns including US-China trade tensions, Brexit uncertainties, the Italian budget proposal, etc.

§ Tightening financial conditions and a stronger US dollar, combined with a less synchronized global growth backdrop, have exposed structural weaknesses and external vulnerabilities in several emerging market countries.

§ Despite a widening valuation gap, growth stocks have continued to outpace value stocks in a typical late-cycle market behavior.

1 Source: FactSet Research Systems, Inc. Region performance based on MSCI regional/country indexes.2 Source: FactSet Research Systems, Inc. Portfolio Analysis application. Sector performance based on GICS sector classification. The analysis of MSCI World IMI constituents are broken out by GICS

defined sectors.

UnitedStates

Japan Pacificex Japan

U.K. Japan EmergingMarkets

Europeex U.K.

17.2

10.2

4.3 2.9 1.9

-0.8 -1.5

Ener

gy

Hea

lth C

are

Info

rmat

ion

Te

chn

olog

y

Indu

stri

als

Mat

eria

ls

Rea

l Est

ate

Con

sum

er

Stap

les

Con

sum

er

Dis

cret

ion

ary

Util

ities

Fina

ncia

ls

Tele

com

mun

icat

ion

Se

rvic

es

15.921.0

8.7

3.78.5

-0.3

3.70.7

3.66.6

3.40.8

2.9

-0.9

2.5

-2.6

0.3

-1.3 -2.6-3.7

-3.0-7.0

■ MSCI World Index (ex US) IMI ■ MSCI World Index (ex US) IMI Value ■ One year


Executive Summary

Employees' Retirement, Disability & Death Benefit Asset summary (USD)

Beginning value as of 30-Sep-17 576,014,024

Contributions 0

Withdrawals 18,557

Change in market value 48,524,355

Ending value as of 30-Sep-18 624,519,822

Portfolio and benchmark data shown is based on MFS’ sector/industry classification methodology, which differs from the benchmark’s.Source for benchmark performance: SPAR, FactSet Research Systems Inc.Past performance is no guarantee of future results. All periods greater than one year are annualized.

Performance results net (%) (USD), as of 30-Sep-18

1 Year Since Client's Inception(06-July-12)

8.08 8.12

2.78

0.00

11.43 11.43

8.167.49

■ Employees' Retirement, Disability & Death Benefit

■ MSCI World ex US IMI

Retiree Health Benefits Fund Asset summary (USD)

Beginning value as of 30-Sep-17 96,904,998

Contributions 0

Withdrawals 17,351

Change in market value 8,199,763

Ending value as of 30-Sep-18 105,087,410

■ Retiree Health Benefits Fund

■ MSCI World ex US IMI Value


MFS International Value Equity Unrestricted Composite vs MSCI World (ex-US) Investable Market Index (net div)October 2003-September 2018

Market return less than -5%

Market return -5% to +5%

Market return greater than +5%

Total

Average quarterly relative performance (%) +4.49 +1.02 -0.54 +1.00

Nu

mb

er o

f qu

arte

rs a

bov

e /b

elow

ben

chm

ark

Please note the composite shown is unrestricted and allows for investment in Emerging Markets and US Securities. Source: Benchmark performance from SPAR, FactSet Research Systems Inc. The exhibit above reflects the performance of a fully discretionary composite; individual portfolio results will vary. This performance information is supplemental to the composite's compliant presentation. Please see appendix for composite report, and other information. It is not possible to invest directly in an index.Past performance is not a reliable indicator for future results. All financial investments involve an element of risk. The value of investments may rise and fall so you may get back less than originally invested. Investors should consider the risks, including lower returns, related to currency movements between their investing currency and the portfolio's base currency, if different.

Number of outperforming quarters Number of underperforming quarters

0

5

10

15

20

25

30

35

40

Historical Relative Performance in Diverse MarketsGross of fees (USD)


Employees' Retirement, Disability & Death Benefit Plan Performance — net of fees (USD)

YTD 1 year 3 years 5 years Since Client's inception (01-Aug-12)

2.01

-1.62-3.54

8.08

2.78

0.00

10.949.72 8.99

7.90

4.623.43

11.43

8.16 7.49

Periods greater than one year are annualized, as of 30-Sep-18

Annual performance (%) 2017 2016 2015 2014 2013

Portfolio — Net 26.89 -0.80 6.81 0.86 30.86

MSCI World ex US IMI 25.17 2.95 -1.95 -4.45 21.57

MSCI World ex US IMI Value 22.01 7.45 -6.57 -5.46 22.23

Source: benchmark performance from SPAR, FactSet Research Systems, Inc. Past performance is no guarantee of future results.

Excess returns (%) YTD 1 Year 3 Years 5 Years Since inception (06-July-12)

Net vs. MSCI World (ex-US) Investable Market Index (net div)

3.63 5.31 1.22 3.28 3.28

Net vs. MSCI World (ex-US) Investable Market Index Value (net div)

5.55 8.08 1.95 4.47 3.94

■ Portfolio - Net ■ MSCI World ex US IMI Value ■ MSCI World ex US IMI


Retiree Health Benefits Fund Performance — net of fees (USD)

Source: benchmark performance from SPAR, FactSet Research Systems, Inc. Past performance is no guarantee of future results.

YTD 1 year 3 years 5 years Since Client's inception (01-Aug-12)

2.06

-1.62-3.54

8.12

2.78

0.00

10.949.72 8.99

7.90

4.623.43

11.43

8.16 7.49

Periods greater than one year are annualized, as of 30-Sep-18

Annual performance (%) 2017 2016 2015 2014 2013

Portfolio — Net 26.90 -0.86 6.80 0.88 30.87

MSCI World ex US IMI 25.17 2.95 -1.95 -4.45 21.57

MSCI World ex US IMI Value 22.01 7.45 -6.57 -5.46 22.23

■ Portfolio - Net ■ MSCI World ex US IMI Value ■ MSCI World ex US IMI

Excess returns (%) YTD 1 Year 3 Years 5 Years Since inception (06-July-12)

Net vs. MSCI World (ex-US) Investable Market Index (net div)

3.94 5.34 1.22 3.28 3.28

Net vs. MSCI World (ex-US) Investable Market Index Value (net div)

3.68 8.12 1.95 4.47 3.27


Annualized Returns (%)

Excess Returns (%) 3Q18 YTD 1 Year 3 Years 5 Years 10 Years

Gross vs. MSCI EAFE (Europe, Australasia, Far East) Value Index (net div)

1.42 6.04 9.24 5.25 6.67 6.33

Net vs. MSCI EAFE (Europe, Australasia, Far East) Value Index (net div)

1.23 5.47 8.43 4.42 5.85 5.50

Gross vs. MSCI World (ex-US) Investable Market Index (net div) 1.62 4.17 6.10 3.65 5.19 5.18

Net vs. MSCI World (ex-US) Investable Market Index (net div) 1.43 3.60 5.29 2.82 4.37 4.35

Information ratio (%) — — — 0.59 0.86 0.82

YTD 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

n MFS International Value Equity Unrestricted Composite- Gross 2.55 28.13 4.90 7.51 2.33 29.04 17.21 -0.68 10.60 26.50 -30.86

n MFS International Value Equity Unrestricted Composite- Net 1.98 27.20 4.12 6.71 1.56 28.09 16.34 -1.43 9.78 25.57 -31.39

n MSCI EAFE (Europe, Australasia, Far East) Value Index (net div) -3.49 21.44 5.02 -5.68 -5.39 22.95 17.69 -12.17 3.25 34.23 -44.09

n MSCI World (ex-US) Investable Market Index (net div) -1.62 25.17 2.95 -1.95 -4.45 21.57 16.55 -12.66 10.66 35.35 -44.00

Please note the composite shown is unrestricted and allows for investment in Emerging Markets and US Securities. Source: Benchmark performance from SPAR, FactSet Research Systems Inc. It is not possible to invest directly in an index. Please see performance methodology and composite report in appendix for performance and other information.Past performance is not a reliable indicator for future results. All financial investments involve an element of risk. The value of investments may rise and fall so you may get back less than originally invested. Investors should consider the risks, including lower returns, related to currency movements between their investing currency and the portfolio's base currency, if different.All periods greater than one year are annualized. Periods less than one year are actual not annualized.

MFS International Value Equity Unrestricted Composite (USD)Performance as of 30 September 2018

MFS International Value Equity Unrestricted Composite - Gross MFS International Value Equity Unrestricted Composite - Net

MSCI EAFE (Europe, Australasia, Far East) Value Index (net div) MSCI World (ex-US) Investable Market Index (net div)

2.60 2.411.18 0.98

2.551.98

-3.49

-1.62

8.888.07

-0.36

2.78

13.3712.54

8.12

9.72 9.818.99

3.14

4.62

10.829.99

4.495.64


Please note the composite shown is unrestricted and allows for investment in Emerging Markets and US Securities. ¹ Based on monthly returns.² Based on quarterly returns.³ Relative to the MSCI World ex USA IMI Index.4 The upside market capture ratio is calculated by dividing the return of the portfolio during the up market periods by the return of the market during the same periods. The downside market capture ratio is calculated

by dividing the return of the portfolio during the down market periods by the return of the market during the same periods. The MFS percentile rank for downside market capture has been adjusted to show the ranking in ascending order.

5 Rankings are vs. the eVestment EAFE Value Equity universe. The number of observations for the eVestment EAFE Value Equity: 98 (1 year); 94 (3 years); 86 (5 years); 75 (10 years). Compiled on 29 October 2018 with 93.8 % of firms reporting.

6 MSCI World ex USA IMI Index with net dividends reinvested. This Peer Universe Ranking does not use the composite's standard benchmark. Please see attached GIPS report for for complete composite performance information.

MFS International Value Equity Unrestricted Composite (USD)Peer Universe Rankings as of 30 September 2018

Annualized returns (gross of fees) Information ratio1,3

Upside market

capture2,3,4

Downside market

capture2,3,4

1 year 3 years 5 years 10 years 5 years 10 years 10 years 10 years

MFS International Value Equity 8.9 13.4 9.8 10.8 0.95 0.87 98 57

MFS Percentile Rank 3 9 2 7 6 13 64 3

MSCI World ex USA IMI Index6 2.8 9.7 4.6 5.6 – – – –

Index Percentile Rank5 27 47 58 64 – – – –


Benchmark returns (%)Benchmark returns (%)

Benchmark returns (%)Benchmark returns (%)

Rolling 10 Years

-4 0 4 8 12 16

-4

0

4

8

12

16

Man

ager

ret

urn

s (%

)

Rolling 7 Years

-5 0 5 10 15 20

-5

0

5

10

15

20

Man

ager

ret

urn

s (%

)

Rolling 5 Years

-10 0 10 20 30

-10

0

10

20

30

Man

ager

ret

urn

s (%

)

Rolling 3 Years

-40 -20 0 20 40

-40

-20

0

20

40

Man

ager

ret

urn

s (%

)

% of outperforming periods:

Average excess return:100%4.71%







MFS International Value Equity Composite vs. MSCI World (ex-US) Investable Market Index (net div)December 1997 - September 2018

Please note the composite shown is unrestricted and allows for investment in Emerging Markets and US Securities. The strategy outperformed 131 out of 131 rolling 10 year periods, 167 out of 167 rolling 7 year periods, 191 out of 191 rolling 5 year periods and 214 out of 215 rolling 3 year periods.Source: Benchmark performance from SPAR, FactSet Research Systems Inc. The exhibit above reflects the performance of a fully discretionary composite; individual portfolio results will vary. This performance information is supplemental to the composite's compliant presentation. Please see appendix for composite report, and other information. It is not possible to invest directly in an index.Past performance is not a reliable indicator for future results. All financial investments involve an element of risk. The value of investments may rise and fall so you may get back less than originally invested. Investors should consider the risks, including lower returns, related to currency movements between their investing currency and the portfolio's base currency, if different.For all time periods, results were calculated on a rolling basis, measured monthly. All returns are annualized.

Consistency of Historical Relative OutperformanceOver Rolling PeriodsGross of fees (USD)

MFS International Value Equity Unrestricted Composite vs. MSCI World (ex-US) Investable Market Index (net div)


Historically consistent returnsRolling gross portfolio performance since inception relative to MSCI World (ex-US) IMI Index (USD) As of 30 September 2018

Past performance is no guarantee of future results.Source: FactSet.Inception of the Employees' Retirement, Disability, and Death Benefit plan is 6 July 2012. Returns have been provided as of the start of the first full month after inception (1 August 2012). For all time periods, results were calculated on a rolling basis, measured monthly. The strategy outperformed 39 of 39 rolling 3 year periods, and 15 of 15 rolling 5 year periods.

Rolling 3 years Rolling 5 years

% of outperforming periods 100% 100%

Average excess return 4.6 3.7


Performance Drivers — RegionsRelative to MSCI World ex US IMI (USD) — one year as of 30 September 2018

Attribution results are generated by the FactSet application utilizing a methodology which is widely accepted in the investment industry. Results are based upon daily holdings using a buy and hold methodology to generate individual security returns and do not include expenses. As such, attribution results are essentially estimates and may not aggregate to the total return of the portfolio or of the benchmark which can be found elsewhere in this presentation.

Average Relative

Weighting (%)

Portfolio Returns (%)

Benchmark Returns (%) Allocation (%) + Stock

Selection (%) + Currency Effect (%) =

Relative Contribution

(%)

Contributors Europe Ex-U.K. 10.1 6.1 -0.4 -0.4 3.2 0.2 3.0

Japan 1.8 16.8 10.0 0.1 1.6 0.1 1.7

United Kingdom 0.5 6.7 3.1 0.0 0.6 -0.0 0.6

North America -7.1 14.5 2.4 0.0 0.2 0.0 0.2

Detractors Asia/Pacific Ex-Japan -8.8 2.6 4.2 -0.3 -0.1 0.2 -0.2

Cash 3.6 1.7 – -0.2 – 0.1 -0.1

Developed - Middle East/Africa -0.0 3.2 16.2 -0.0 -0.1 0.0 -0.1

Emerging Markets -0.0 – 39.7 -0.0 – -0.0 -0.0

Total 8.6 3.3 -0.8 5.5 0.6 5.3


Performance Drivers — CountriesRelative to MSCI World ex US IMI (USD) — one year as of 30 September 2018

Average Relative

Weighting (%)


Benchmark Returns (%)

Region Allocation

(%)+ Stock



(%)

Contributors Japan 1.8 16.8 10.0 0.1 1.6 0.1 1.7

Spain -0.0 45.5 -7.9 0.0 1.4 -0.0 1.4

France 3.1 11.9 4.5 0.1 0.8 -0.0 0.8

United Kingdom 0.5 6.7 3.1 -0.0 0.6 -0.0 0.6

Germany 6.6 2.6 -4.1 -0.6 1.0 0.0 0.5

Switzerland 6.3 5.6 2.4 -0.1 0.4 0.1 0.4

Italy -2.4 – -7.2 0.3 – -0.0 0.3

Canada -7.1 14.5 2.4 0.0 0.2 0.1 0.2

Belgium -1.1 – -9.0 0.2 – -0.0 0.1

Ireland 1.2 5.7 -2.2 -0.1 0.1 0.0 0.1

Austria -0.3 – 1.4 0.0 – -0.0 0.0

Portugal -0.2 – 2.0 0.0 – -0.0 0.0

Detractors Netherlands 0.4 -8.2 -1.0 0.0 -0.3 -0.0 -0.2

Hong Kong -2.9 -57.0 1.0 0.2 -0.1 -0.1 -0.1

Australia -4.4 10.2 5.2 -0.3 0.0 0.3 -0.1

Denmark -1.0 -19.4 -1.5 0.1 -0.1 -0.0 -0.1

Israel -0.1 3.2 16.7 -0.0 -0.1 0.0 -0.1

Norway -0.1 9.6 16.7 -0.0 -0.1 -0.0 -0.1

Cash 3.6 1.7 – -0.2 – 0.1 -0.1

Finland -0.7 -15.3 8.4 -0.0 -0.1 -0.0 -0.1

Sweden -1.4 -9.9 0.1 -0.0 -0.1 0.1 -0.1

United States -0.0 – 31.9 0.0 – -0.0 -0.0

China -0.0 – 18.6 -0.0 – -0.0 -0.0

New Zealand -0.3 – 9.3 -0.0 – 0.0 -0.0

Singapore -1.2 – 5.7 -0.0 – -0.0 -0.0

South Africa -0.0 – -1.7 0.0 – -0.0 -0.0

Total 8.6 3.3 -0.6 5.3 0.6 5.3




Average Relative

Weighting (%)


Benchmark Returns (%)

Sector Allocation (%) + Stock



(%)

Top Contributors Information Technology 6.8 20.0 8.5 0.3 1.5 0.1 1.8

Financials -10.8 2.4 -2.6 0.6 0.4 0.1 1.2

Consumer Staples 21.1 6.8 2.9 -0.1 1.0 0.2 1.1

Real Estate 1.4 20.1 3.4 -0.0 0.9 0.0 0.9

Materials -3.2 15.0 3.6 -0.0 0.6 0.1 0.6

Telecommunication Services -1.6 8.3 -3.0 0.1 0.2 0.0 0.3

Industrials 3.3 4.8 3.7 0.0 0.2 -0.0 0.2

Utilities -3.1 — 0.3 0.1 — -0.0 0.1

Consumer Discretionary -7.8 1.4 2.5 0.1 -0.0 -0.1 0.0

Top Detractors Energy -6.1 -5.1 15.9 -0.8 -0.0 0.0 -0.8

Cash 3.6 1.7 — -0.2 — 0.1 -0.1

Health Care -3.7 12.4 8.7 -0.2 0.2 0.0 -0.0

Total 8.6 3.3 -0.1 4.9 0.6 5.3

Performance Drivers – SectorsRelative to MSCI World ex US IMI (USD) — one year as of 30 September 2018


1 Represents performance for the time period stock was held in portfolio.Attribution results are generated by the FactSet application utilising a methodology which is widely accepted in the investment industry. Results are based upon daily holdings using a buy and hold methodology to generate individual security returns and do not include expenses. As such, attribution results are essentially estimates and may not aggregate to the total return of the portfolio or of the benchmark which can be found elsewhere in this presentation.

Average Weighting (%) Returns (%)

Portfolio Benchmark Portfolio1 Benchmark Relative Contribution (%)

Top Contributors Amadeus IT Holding 2.8 0.2 45.5 45.5 1.0

Kao Corp 2.6 0.2 39.3 39.3 0.8

Dassault Systemes Se 1.4 0.1 48.5 48.5 0.5

OBIC Co Ltd 1.1 0.0 52.4 52.4 0.4

Nomura Research Institute Ltd 1.7 0.0 31.8 31.8 0.4

Top Detractors Henkel KGaA 2.9 0.2 -12.3 -11.9 -0.5

GEA Group AG 1.1 0.0 -19.7 -19.7 -0.3

Japan Tobacco Inc 1.1 0.2 -16.8 -16.8 -0.3

Royal Dutch Shell PLC — 1.5 — 20.6 -0.2

Hirose Electric Co Ltd 1.1 0.0 -16.3 -16.3 -0.2

Performance Drivers – StocksRelative to MSCI World ex US IMI (USD) — one year as of 30 September 2018

PORTFOLIO REVIEW AND CHARACTERISTICS


Significant Transactions

From 01-Oct-17to 30-Sep-18 Security Sector Transaction Type Trade (%) Beginning

Weight (%)Ending

Weight (%)

Purchases DIAGEO PLC Consumer Staples New position 2.0 — 2.1

L'OREAL SA Consumer Staples Add 0.9 0.5 1.6

HENKEL AG & CO KGAA Consumer Staples Add 0.8 2.7 3.1

SCHNEIDER ELECTRIC SE Industrials Add 0.7 1.5 2.0

SMC CORP/JAPAN Industrials New position 0.6 — 0.6

SalesYAMATO HOLDINGS CO LTD

Industrials Trim -1.2 1.2 0.4

BUNZL PLC Industrials Trim -1.2 1.8 0.5

ING GROEP NV Financials Eliminate position -1.0 1.2 —

BRITISH AMERICAN TOBACCO PLC

Consumer Staples Trim -1.0 1.9 0.6

BRAMBLES LTD Industrials Trim -1.0 2.1 1.2


Top 10 Portfolio Holdings

30-Sep-18 Country Sector Portfolio (%) MSCI World ex US IMI (%)

MSCI World ex US IMI Value

(%)

NESTLE SA Switzerland Consumer Staples 4.5 1.4 1.0

GIVAUDAN SA Switzerland Materials 3.4 0.1 –

AMADEUS IT GROUP SA Spain Information Technology 3.3 0.2 –

RECKITT BENCKISER GROUP PLC United Kingdom Consumer Staples 3.1 0.3 –

HENKEL AG & CO KGAA Germany Consumer Staples 3.1 0.2 –

PERNOD RICARD SA France Consumer Staples 3.0 0.2 –

KAO CORP Japan Consumer Staples 2.8 0.2 –

DANONE SA France Consumer Staples 2.6 0.3 –

DEUTSCHE WOHNEN SE Germany Real Estate 2.4 0.1 0.1

COMPASS GROUP EQUITY United Kingdom Consumer Discretionary 2.2 0.2 –


Characteristics

As of 30-Sep-18 Portfolio MSCI World ex US IMI

MSCI World ex US IMI Value

Fundamentals - weighted average

Price/earnings (12 months forward ex-negative earnings) 20.1x 13.9x 11.5x

Price/book 2.8x 1.7x 1.2x

Dividend yield 2.1% 3.1% 4.1%

Return on equity (3-year average) 17.2% 13.8% 10.8%

Market capitalization Weighted average 43.1 bn 51.8 bn 58.5bn

Diversification Top ten holdings 30% 9% 16%

Number of holdings 91 3,574 2066

Number of countries 17 22 22

Turnover Trailing 1 year turnover 1 16% — —

Risk profile (current) Active share — 89% 94%

Barra predicted tracking error 2 — 3.80% 5.18%

Risk/reward (5 year) Standard deviation 9.6% 10.8% 11.7%

Beta vs benchmark — 0.8 0.7

R-Square vs benchmark — 80% 63%

Correlation — 0.89 0.80

Alpha (Annualized) — 4.45% 5.92%

Sharpe Ratio — 0.8 0.8

Jensen's Alpha — 4.5% 5.8%

Treynor Ratio — 9.8 11.9

1 (Lesser of Purchase or Sales)/Average Month End Market Value2 Source Barra. The Barra information may not be redistributed, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. The Barra

information is provided on an "as is" basis and the user of this information assumes the entire risk of any use made of this information. Barra, each of its affiliates and each other person involved in or related to compiling, computing or creating any Barra information (collectively, the "Barra Parties") expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any Barra Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.Past performance is no guarantee of future results. No forecasts can be guaranteed.


Regional Exposures — Domicile vs. RevenuePortfolio relative to MSCI World ex US IMI Index

Source: MSCI, FactSet. For companies not covered by the MSCI database, regional exposure was allocated based on country of domicile. All portfolio calculations exclude cash.The “Other Countries” category consists of countries not followed by MSCI.

By Domicile By Revenue

MFS International

Value Equity (%)

MSCI World ex US IMI Index (%)

Relative weight (%)

MFS International

Value Equity (%)

MSCI World ex US IMI Index (%)

Relative weight (%)

North America 2.0 8.8 -6.8 18.8 22.0 -3.2

Europe Ex-U.K. 54.0 40.4 13.6 24.4 23.0 1.4

United Kingdom 17.1 16.1 1.0 9.9 8.0 1.9

Developed - Middle East/Africa 0.6 0.7 -0.1 0.3 0.6 -0.3

Japan 24.9 23.3 1.6 21.6 17.1 4.5

Asia Pacific Ex-Japan 1.4 10.7 -9.3 1.3 8.6 -7.3

Emerging Markets 0.0 0.0 0.0 21.5 18.7 2.8

Other Countries 0.0 0.0 0.0 2.3 2.1 0.2

NorthAmerica

Europeex-U.K.

UnitedKingdom

Developed –Middle East/

Africa

Japan Asia PacificEx-Japan

EmergingMarkets

OtherCountries

Perc

ent (

%)

-6.8

-3.2

13.6

1.4 1.0 1.9

-0.1 -0.3

1.6

4.5

-9.3-7.3

0.02.8

0.0 0.2

Relative weight (%), as of 30-Sep-18

■ By Revenue■ By Domcile


Region and Country Weights

As of 30-Sep-18 Portfolio (%) MSCI World ex US IMI (%)

Underweight/ Overweight (%)

Europe ex-U.K. 52.2 40.4 11.8Germany 15.3 8.1 7.2Switzerland 13.6 7.0 6.6France 13.1 9.2 3.9Ireland 1.7 0.5 1.2Spain 3.3 2.6 0.7Norway 0.7 0.9 -0.2Netherlands 2.5 2.9 -0.4Finland 0.2 1.0 -0.8Denmark 0.5 1.5 -1.0Sweden 1.2 2.9 -1.7Other countries1 0.0 3.8 -3.8

Japan 24.1 23.3 0.8United Kingdom 16.5 16.1 0.4Asia/Pacific ex-Japan 1.3 10.7 -9.4

Hong Kong 0.1 3.0 -2.9Australia 1.2 6.2 -5.0Other countries1 0.0 1.5 -1.5

North America 1.9 8.8 -6.9Canada 1.9 8.8 -6.9

Developed - Middle East/Africa 0.6 0.7 -0.1Israel 0.6 0.7 -0.1

3.3% Cash & Cash Equivalents.0.1% Other. Other consists of: (i) currency derivatives and/or (ii) any derivative offsets.

1 Portfolio does not own securities in the following countries : Italy 2.3%; Singapore 1.2%; Belgium 1.0%; and 3 other countries with weights less than 1.00% totaling 0.8%.

Underweight/Overweight (%)

Europe ex-U.K. 11.8

Japan 0.8

United Kingdom 0.4

Asia/Pacific ex-Japan -9.4

North America -6.9

Developed - Middle East/Africa

-0.1


Relative Exposure

MSCI World ex US IMI 21.8 3.9 7.5 -11.5 -2.4 1.7 -4.6 -8.2 -1.5 -7.0 -3.0

MSCI World ex US IMI Value 27.4 9.2 12.3 -22.7 -1.7 -0.6 -2.5 -5.6 -2.9 -11.2 -5.0

Con

sum

er

Stap

les

Indu

stri

als

Info

rmat

ion

Tech

nolo

gy

Fina

ncia

ls

Mat

eria

ls

Rea

l Est

ate

Hea

lth C

are

Con

sum

er

Dis

cret

iona

ry

Tele

com

mun

icat

ion

Serv

ices

Ener

gy

Util

ities

31.7

9.9

4.3

19.0

15.1

9.8

14.7

7.2

2.4

8.6

20.1

31.3

6.08.4 7.7

6.04.3

6.65.2

9.87.7

3.7

11.99.3

1.73.2

4.6

0.0

7.0

11.2

0.0

3.05.0

Sector Weights

3.3% Cash & Cash Equivalents.0.1% Other. Other consists of: (i) currency derivatives and/or (ii) any derivative offsets. The sectors described above and the associated portfolio composition are based on MFS¿ own sector classification methodology which differs from industry classification standards, including the standard that is associated with the benchmark composition presented above. The variance in sector weights between the portfolio and the benchmark would be different if an industry classification standard was used.

As of 30-Sep-18

The Employees’ Retirement, Disability and Death Benefit Plan MSCI World ex US IMI MSCI World ex US IMI Value


Employees' Retirement, Disability & Death Benefit PlanPortfolio Holdings

As of 30-Sep-18 Country Equivalent Exposure (%)

Cash & Cash Equivalents 3.3

Consumer Discretionary 3.7

Compass Group PLC United Kingdom 2.2

Cie Financiere Richemont SA Switzerland 0.8

USS Co Ltd Japan 0.3

LVMH Moet Hennessy Louis Vuitton SE France 0.3

Esprit Holdings Ltd Hong Kong 0.1

Consumer Staples 31.7

Nestle SA Switzerland 4.5

Reckitt Benckiser Group PLC United Kingdom 3.1

Henkel AG & Co KGaA IPS Germany 3.1

Pernod Ricard SA France 3.0

Kao Corp Japan 2.8

Danone SA France 2.6

Diageo PLC United Kingdom 2.1

Heineken NV Netherlands 1.8

L'Oreal SA France 1.6

Kobayashi Pharmaceutical Co Ltd Japan 1.4

Kerry Group PLC Ireland 1.3

Ito En Ltd Japan 1.3

Toyo Suisan Kaisha Ltd Japan 1.2

Japan Tobacco Inc Japan 0.7

British American Tobacco PLC United Kingdom 0.6

Kose Corp Japan 0.4

Nissin Foods Holdings Co Ltd Japan 0.3

Lindt & Spruengli AG Switzerland 0.1


Financials 8.6

Svenska Handelsbanken AB Sweden 1.2

UBS Group AG Switzerland 1.1

Fairfax Financial Holdings Ltd Canada 1.1

Hiscox Ltd United Kingdom 0.7

Thomson Reuters Corp Canada 0.7

Jardine Lloyd Thompson Group PLC United Kingdom 0.7

DNB ASA Norway 0.7

Chiba Bank Ltd Japan 0.3

Julius Baer Group Ltd Switzerland 0.3

Jyske Bank AS Denmark 0.3

Daiwa Securities Group Inc Japan 0.3

Mebuki Financial Group Inc Japan 0.3

North Pacific Bank Ltd Japan 0.2

Sydbank AS Denmark 0.2

IG Group Holdings PLC United Kingdom 0.2

Hachijuni Bank Ltd Japan 0.2

Health Care 5.2

Santen Pharmaceutical Co Ltd Japan 1.2

Terumo Corp Japan 1.1

Nihon Kohden Corp Japan 1.0

Rohto Pharmaceutical Co Ltd Japan 0.8

Bayer AG Germany 0.6

Roche Holding AG Switzerland 0.5

Industrials 19.0

Schneider Electric SE France 2.0

Other consists of: (i) currency derivatives and/or (ii) any derivative offsets.Portfolio characteristics are based on equivalent exposure, which measures how a portfolio's value would change due to price changes in an asset held either directly or, in the case of a derivative contract, indirectly. The market value of the holding may differ.


Employees' Retirement, Disability & Death Benefit PlanPortfolio Holdings Continued...


Legrand SA France 1.9

SGS SA Switzerland 1.6

Spirax-Sarco Engineering PLC United Kingdom 1.3

Secom Co Ltd Japan 1.3

Brambles Ltd Australia 1.2

Intertek Group PLC United Kingdom 1.0

GEA Group AG Germany 1.0

IMI PLC United Kingdom 1.0

Brenntag AG Germany 0.8

Experian PLC United Kingdom 0.8

RELX PLC Netherlands 0.8

SMC Corp Japan 0.6

Bunzl PLC United Kingdom 0.5

Schindler Holding AG Switzerland 0.5

MISUMI Group Inc Japan 0.5

Ryanair Holdings PLC ADR Ireland 0.5

Geberit AG Switzerland 0.4

Yamato Holdings Co Ltd Japan 0.4

Sohgo Security Services Co Ltd Japan 0.3

Wartsila OYJ Abp Finland 0.2

Rentokil Initial PLC United Kingdom 0.2

Information Technology 14.7

Amadeus IT Group SA Spain 3.3

Dassault Systemes SE France 1.8

Nomura Research Institute Ltd Japan 1.5

Infineon Technologies AG Germany 1.4


Obic Co Ltd Japan 1.3

Halma PLC United Kingdom 1.1

Hirose Electric Co Ltd Japan 0.9

Omron Corp Japan 0.8

Check Point Software Technologies Ltd Israel 0.6

SAP SE Germany 0.6

Spectris PLC United Kingdom 0.6

Yokogawa Electric Corp Japan 0.5

Disco Corp Japan 0.2

Descartes Systems Group Inc Canada 0.1

Materials 6.0

Givaudan SA Switzerland 3.4

Symrise AG Germany 1.7

Sika AG Switzerland 0.4

Kansai Paint Co Ltd Japan 0.3

Croda International PLC United Kingdom 0.2

Other 0.1

Real Estate 6.0

Deutsche Wohnen SE Germany 2.4

Vonovia SE Germany 2.1

LEG Immobilien AG Germany 0.8

TAG Immobilien AG Germany 0.6

Telecommunication Services 1.7

KDDI Corp Japan 1.7



Retiree Health Benefits FundPortfolio Holdings


Cash & Cash Equivalents 3.3

Consumer Discretionary 3.8

Compass Group PLC United Kingdom 2.3

Cie Financiere Richemont SA Switzerland 0.8

USS Co Ltd Japan 0.3

LVMH Moet Hennessy Louis Vuitton SE France 0.3

Esprit Holdings Ltd Hong Kong 0.1

Consumer Staples 31.5

Nestle SA Switzerland 4.5

Henkel AG & Co KGaA IPS Germany 3.1

Reckitt Benckiser Group PLC United Kingdom 3.0

Pernod Ricard SA France 2.9

Kao Corp Japan 2.8

Danone SA France 2.6

Diageo PLC United Kingdom 2.1

Heineken NV Netherlands 1.8

L'Oreal SA France 1.6

Kobayashi Pharmaceutical Co Ltd Japan 1.4

Kerry Group PLC Ireland 1.3

Ito En Ltd Japan 1.3

Toyo Suisan Kaisha Ltd Japan 1.2

Japan Tobacco Inc Japan 0.6

British American Tobacco PLC United Kingdom 0.6

Kose Corp Japan 0.4

Nissin Foods Holdings Co Ltd Japan 0.3

Lindt & Spruengli AG Switzerland 0.1


Financials 8.7

Svenska Handelsbanken AB Sweden 1.2

Fairfax Financial Holdings Ltd Canada 1.2

UBS Group AG Switzerland 1.1

Hiscox Ltd United Kingdom 0.7

Thomson Reuters Corp Canada 0.7

Jardine Lloyd Thompson Group PLC United Kingdom 0.7

DNB ASA Norway 0.7

Chiba Bank Ltd Japan 0.3

Julius Baer Group Ltd Switzerland 0.3

Daiwa Securities Group Inc Japan 0.3

Jyske Bank AS Denmark 0.3

Mebuki Financial Group Inc Japan 0.3

IG Group Holdings PLC United Kingdom 0.2

North Pacific Bank Ltd Japan 0.2

Sydbank AS Denmark 0.2

Hachijuni Bank Ltd Japan 0.2

Health Care 5.3

Santen Pharmaceutical Co Ltd Japan 1.2

Terumo Corp Japan 1.2

Nihon Kohden Corp Japan 1.0

Rohto Pharmaceutical Co Ltd Japan 0.8

Bayer AG Germany 0.6

Roche Holding AG Switzerland 0.4

Industrials 18.9

Schneider Electric SE France 2.0



Retiree Health Benefits FundPortfolio Holdings Continued…


Legrand SA France 1.9

SGS SA Switzerland 1.6

Spirax-Sarco Engineering PLC United Kingdom 1.3

Secom Co Ltd Japan 1.3

Brambles Ltd Australia 1.2

Intertek Group PLC United Kingdom 1.0

IMI PLC United Kingdom 1.0

GEA Group AG Germany 1.0

Brenntag AG Germany 0.8

Experian PLC United Kingdom 0.8

RELX PLC Netherlands 0.8

Bunzl PLC United Kingdom 0.6

SMC Corp Japan 0.5

Schindler Holding AG Switzerland 0.5

MISUMI Group Inc Japan 0.5

Ryanair Holdings PLC ADR Ireland 0.5

Geberit AG Switzerland 0.4

Yamato Holdings Co Ltd Japan 0.4

Sohgo Security Services Co Ltd Japan 0.3

Wartsila OYJ Abp Finland 0.2

Rentokil Initial PLC United Kingdom 0.2

Information Technology 14.8

Amadeus IT Group SA Spain 3.3

Dassault Systemes SE France 1.8

Nomura Research Institute Ltd Japan 1.6

Infineon Technologies AG Germany 1.4


Obic Co Ltd Japan 1.3

Halma PLC United Kingdom 1.1

Hirose Electric Co Ltd Japan 0.9

Omron Corp Japan 0.8

Check Point Software Technologies Ltd Israel 0.6

Spectris PLC United Kingdom 0.6

SAP SE Germany 0.6

Yokogawa Electric Corp Japan 0.5

Disco Corp Japan 0.2

Descartes Systems Group Inc Canada 0.1

Materials 6.0

Givaudan SA Switzerland 3.4

Symrise AG Germany 1.7

Sika AG Switzerland 0.4

Kansai Paint Co Ltd Japan 0.3

Croda International PLC United Kingdom 0.2

Other 0.1

Real Estate 6.0

Deutsche Wohnen SE Germany 2.4

Vonovia SE Germany 2.1

LEG Immobilien AG Germany 0.8

TAG Immobilien AG Germany 0.6

Telecommunication Services 1.7

KDDI Corp Japan 1.7


FEE SCHEDULE


Assets Fees

Separate account Initial $100 million 45 basis points or 0.45%

Next $100 million 40 basis points or 0.40%

Next $300 million 30 basis points or 0.30%

Over $500 million 25 basis points or 0.25%

LADWP’s fee schedule


Market Capitalization (USD)

As of 30-Sep-18

0-1 bn 1-5 bn 5-10 bn 10-50 bn 50-100 bn 100 bn +

USD Billions Weighted Average Market Cap

Weighted Median Market Cap

The Employees' Retirement, Disability and Death Benefit Plan

43.1 24.1

MSCI World ex US IMI 51.8 29.6

MSCI World ex USA IMI Value 58.5 35.1

% o

f por

tfol

io

3.3% Cash & Cash Equivalents.0.1% Other. Other consists of: (i) currency derivatives and/or (ii) any derivative offsets.

The Employees’ Retirement, Disability and Death Benefit Plan MSCI World ex US IMI MSCI World ex USA IMI Value

0.12.4 2.8

9.2

12.9 13.9 14.111.2

8.3

48.3

38.9

34.3

16.918.4

22.7

8.0

16.218.0

Composite: MFS International Value Equity CompositeBenchmark: MSCI EAFE Value - Net Return

Creation Date: 19-Oct-2005

Inception Date: 01-Dec-1997

Investment Objective: To provide long-term capital appreciation and current income by investing principally in attractively valued equities of companies whose operations lie outside of the U.S. Stock selection is based solely on MFS proprietary research process and therefore excludes assets managed by external parties or non-MFS sub-advisors.

Institutional Separate Accounts Fee ScheduleAsset Breakpoints (USD) FeeFor Assets Up To 50 MM 75 bpFor Assets From 50 MM To 100 MM 60 bpFor Assets Over 100 MM 50 bp

Derivative Exposure DisclosureCertain MFS portfolios in this composite may utilize derivative instruments to manage risk or to achieve timely and cost effective implementation of the investment strategy. As of 30-Sep-2018, the number of accounts in the composite shown below held derivatives with the following average equivalent exposure of total net assets:

Number of Accounts ExposureLong Exposure 10 5.19%Short Exposure 10 -5.03%

Accounts are eligible for inclusion in the composite if they have assets greater than 2 MM USD. Accounts are included as of their first full month of performance.

Accounts in Annualized 3-YearComposite and Benchmark Return % Composite Composite at Standard Deviation Assets in Composite

Period Gross of fees Net of fees Benchmark Dispersion End of Period Composite Benchmark (USD million) %Firm2018 Q3 2.60 2.41 1.18 0.04 14 8.73 11.95 $37,681.5 7.8

2018 Q2 0.53 0.34 -2.64 0.07 14 9.74 13.14 $37,495.0 7.9

2018 Q1 -0.57 -0.76 -2.03 0.12 14 10.01 13.11 $38,603.1 8.0

2017 28.13 27.20 21.44 0.13 14 9.66 12.84 $38,627.0 7.9

2016 4.90 4.12 5.02 0.24 15 10.29 13.51 $31,474.5 7.4

2015 7.51 6.71 -5.68 0.29 18 10.85 13.61 $32,903.4 8.0

2014 2.33 1.56 -5.39 0.23 19 10.87 14.32 $27,757.3 6.5

2013 29.04 28.09 22.95 0.58 20 12.32 17.45 $22,037.3 5.3

2012 17.21 16.34 17.69 0.23 19 14.59 20.56 $12,317.2 3.8

2011 -0.68 -1.43 -12.17 0.10 12 19.87 24.86 $6,494.2 2.9

2010 10.60 9.78 3.25 n/a 9 n/a n/a $5,104.7 2.3

2009 26.50 25.57 34.23 n/a <6 n/a n/a $3,009.2 1.6

2008 -30.86 -31.39 -44.09 n/a <6 n/a n/a $998.4 0.8MFS Investment Management® claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. MFS Investment Management® has been independently verified for the periods 1-Jan-1988 through 31-Dec-2017. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. MFS International Value Equity Composite has been examined for the periods 01-Dec-1997 through 31-Dec-2017. The verification and performance examination reports are available upon request.

Total Gross-of-fee returns in USD (includes both capital appreciation and income) are net of transaction costs, withholding taxes and direct expenses, but before management fees, custody and other indirect expenses. Certain institutional accounts hold Canadian trusts subject to custody and other indirect expenses. Certain accounts may be subject to fair valuation as conditions warrant. Typical separate accounts utilize 4:00 PM (London Time) foreign exchange rates; retail products will use rates deemed most appropriate for daily NAV per share calculations. The possibility exists for performance dispersion between otherwise similarly managed accounts and also with the benchmark. Net composite returns are prepared by subtracting from the monthly gross returns one-twelfth of the maximum applicable annual institutional separate account fee. Returns based on actual management fees, including non-separate account fees and performance based fees, would be lower for the following periods - 2008: -31.49; 2009: 25.44. Total returns of the benchmark are provided for each period depicted, expressed in USD. Source of Benchmark Performance: FACTSET ®. Benchmark returns and benchmark annualized 3-year standard deviation are not examined by independent accountants. MSCI EAFE Value - Net Return - a market capitalization-weighted index that is designed to measure equity market performance for value securities in the developed markets, excluding the U.S. and Canada. Composite Dispersion is measured by the asset-weighted standard deviation of account returns for all accounts in the composite for the full period. For composites containing less than six accounts for the full period, dispersion is deemed not meaningful. Prior to 31-Mar-2009 accounts have been eligible for inclusion in the composite if they had assets greater than 5.0 MM USD. Certain accounts in this composite may make tactical allocation to U.S. and Canadian based securities, where each investment is deemed to be consistent with the composite's overall investment objective. For purposes of GIPS compliance, the firm is defined as MFS Investment Management® which is comprised of Massachusetts Financial Services Company (MFS) and MFS Institutional Advisors, Inc. (MFSI), each of which is a registered investment advisor, MFS Heritage Trust Company, a New Hampshire Trust company, and MFS Investment Management Canada Limited. Total firm assets are calculated at market value and include assets managed by MFS, MFSI, MFS Heritage Trust Company and MFS Investment Management Canada Limited as well as assets managed by MFS and MFSI in a sub-advisory capacity on behalf of affiliated investment advisors that are not registered under the United States Investment Advisers Act of 1940, such as MFS International (U.K.), Ltd. (MIL UK) and MFS Investment Management K.K. (MIMKK), MFS International Singapore Pte. Ltd and MFS International Australia Pty Ltd as well as assets managed by MFS and MFSI on behalf of unaffiliated investment advisors that may or may not be registered under the United States Investment Advisers Act of 1940. Total firm assets for GIPS purposes do not include assets of non-discretionary advisory relationships.In November of 2011 MFS acquired McLean Budden Limited (now MFS Investment Management Canada Limited). Total firm assets from 31-Mar-2012 forward include the assets of institutional and pooled MFS Investment Management Canada Limited products. Assets from 31-Dec-2012 forward include the MFS Investment Management Canada Limited PPM product assets. A complete list of firm composites and descriptions, along with additional information regarding policies for valuing portfolios, calculating and reporting performance, and preparing compliant presentations are available upon request. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Run Time: 18-Oct-18 11:09:21 AM AEDIV Page 1 of 1

Performance Presentation Report 2018, Q3

Composite: MFS International Value Restricted CompositeBenchmark: MSCI EAFE Value - Net Return

Creation Date: 30-Jul-2010

Inception Date: 01-Jun-2010

Investment Objective: To provide long-term capital appreciation and current income by investing primarily in attractively valued equities of companies whose operations lie outside the US while adhering to specific client guidelines.

Institutional Separate Accounts Fee ScheduleAsset Breakpoints (USD) FeeFor Assets Up To 50 MM 75 bpFor Assets From 50 MM To 100 MM 60 bpFor Assets Over 100 MM 50 bp

Derivative Exposure DisclosureCertain MFS portfolios in this composite may utilize derivative instruments to manage risk or to achieve timely and cost effective implementation of the investment strategy. As of 30-Sep-2018, the number of accounts in the composite shown below held derivatives with the following average equivalent exposure of total net assets:

Number of Accounts ExposureLong Exposure 4 7.71%Short Exposure 4 -7.56%

Accounts are eligible for inclusion in the composite if they have assets greater than 2 MM USD. Accounts are included as of their first full month of performance.

Accounts in Annualized 3-YearComposite and Benchmark Return % Composite Composite at Standard Deviation Assets in Composite

Period Gross of fees Net of fees Benchmark Dispersion End of Period Composite Benchmark (USD million) %Firm2018 Q3 2.56 2.37 1.18 n/a <6 9.37 11.95 $1,116.1 0.2

2018 Q2 0.36 0.18 -2.64 n/a <6 10.51 13.14 $1,088.3 0.2

2018 Q1 -0.65 -0.83 -2.03 n/a <6 10.79 13.11 $1,084.4 0.2

2017 27.28 26.35 21.44 n/a <6 10.54 12.84 $1,091.6 0.2

2016 -0.10 -0.84 5.02 n/a <6 10.98 13.51 $867.6 0.2

2015 6.32 5.53 -5.68 n/a <6 11.15 13.61 $203.5 0.0

2014 1.74 0.98 -5.39 n/a <6 10.99 14.32 $110.8 0.0

2013 30.06 29.10 22.95 n/a <6 12.57 17.45 $137.1 0.0

2012 16.78 15.92 17.69 n/a <6 n/a n/a $105.4 0.0

2011 -1.13 -1.87 -12.17 n/a <6 n/a n/a $44.8 0.0

2010** 21.81 21.29 20.07 n/a <6 n/a n/a $45.2 0.0MFS Investment Management® claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. MFS Investment Management® has been independently verified for the periods 1-Jan-1988 through 31-Dec-2017. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. ** Indicates partial period. Total Gross-of-fee returns in USD (includes both capital appreciation and income) are net of transaction costs, withholding taxes and direct expenses, but before management fees, custody and other indirect expenses. Certain institutional accounts hold Canadian trusts subject to custody and other indirect expenses. Certain accounts may be subject to fair valuation as conditions warrant. Typical separate accounts utilize 4:00 PM (London Time) foreign exchange rates; retail products will use rates deemed most appropriate for daily NAV per share calculations. The possibility exists for performance dispersion between otherwise similarly managed accounts and also with the benchmark. Net composite returns are prepared by subtracting from the monthly gross returns one-twelfth of the maximum applicable annual institutional separate account fee. Total returns of the benchmark are provided for each period depicted, expressed in USD. Source of Benchmark Performance: FACTSET ®. Benchmark returns and benchmark annualized 3-year standard deviation are not examined by independent accountants. MSCI EAFE Value - Net Return - a market capitalization-weighted index that is designed to measure equity market performance for value securities in the developed markets, excluding the U.S. and Canada. Composite Dispersion is measured by the asset-weighted standard deviation of account returns for all accounts in the composite for the full period. For composites containing less than six accounts for the full period, dispersion is deemed not meaningful. For purposes of GIPS compliance, the firm is defined as MFS Investment Management® which is comprised of Massachusetts Financial Services Company (MFS) and MFS Institutional Advisors, Inc. (MFSI), each of which is a registered investment advisor, MFS Heritage Trust Company, a New Hampshire Trust company, and MFS Investment Management Canada Limited. Total firm assets are calculated at market value and include assets managed by MFS, MFSI, MFS Heritage Trust Company and MFS Investment Management Canada Limited as well as assets managed by MFS and MFSI in a sub-advisory capacity on behalf of affiliated investment advisors that are not registered under the United States Investment Advisers Act of 1940, such as MFS International (U.K.), Ltd. (MIL UK) and MFS Investment Management K.K. (MIMKK), MFS International Singapore Pte. Ltd and MFS International Australia Pty Ltd as well as assets managed by MFS and MFSI on behalf of unaffiliated investment advisors that may or may not be registered under the United States Investment Advisers Act of 1940. Total firm assets for GIPS purposes do not include assets of non-discretionary advisory relationships.In November of 2011 MFS acquired McLean Budden Limited (now MFS Investment Management Canada Limited). Total firm assets from 31-Mar-2012 forward include the assets of institutional and pooled MFS Investment Management Canada Limited products. Assets from 31-Dec-2012 forward include the MFS Investment Management Canada Limited PPM product assets. A complete list of firm composites and descriptions, along with additional information regarding policies for valuing portfolios, calculating and reporting performance, and preparing compliant presentations are available upon request. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Run Time: 18-Oct-18 11:10:51 AM AEIIR Page 1 of 1

Performance Presentation Report 2018, Q3

FOR INSTITUTIONAL USE ONLY

GLOSSARY OF INVESTMENT TERMS


§ Alpha is a measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk asmeasured by beta. A positive alpha figure indicates the portfolio has performed better than its beta would predict. In contrast, a negative alpha indicates the portfolio's underperformance, given the expectations established by the fund's beta.

§ Beta is a measure of a portfolio's sensitivity to market movements. The beta of the market is 1.00 by definition. A portfolio with a beta of 0.85 would indicate that the portfolio is expected to perform 15% worse that the market's excess return during up markets and 15% better during down markets , assuming all other factors remain constant.

§ Earnings-per-share (EPS) growth represents the annualized rate of net-income-per-share growth over the trailing three-year period for the stocks held by the portfolio. Earnings-per-share growth gives a good picture of the rate at which a company has grown its profitability per unit of equity.

§ Excess return is defined as the portfolio's achieved rate of return minus the benchmark return over the same period.

§ Information ratio is a measure of risk adjusted performance. Dividing the portfolio active return by portfolio tracking error gives you the information ratio.

§ Predicted tracking error (also called active risk) is a measure of the expected deviation from the benchmark.

§ Price/book ratio of the portfolio is the weighted average of the price/book ratios of all the stocks in the portfolio. Book value is the total assets of a company, less total liabilities. A company's book value is calculated by dividing the market price of its outstanding stock by the company's book value, and then adjusting for the number of shares outstanding (Stocks with negative book values are excluded from this calculation.). The price/book ratio can tell investors approximately how much they're paying for a company's assets, based on historical, rather than current, valuations.

§ Price/cash flow is a stock's current price divided by the trailing 12-month cash flow per share. For the portfolio this number represents the weighted average of the price/cash-flow ratios of the stocks in the portfolio. Price/cash-flow represents the amount an investor is willing to pay for a dollar generated from a particular company's operations. Price/cash-flow shows the ability of a business to generate cash and acts as a gauge of liquidity and solvency.

Glossary of terms


§ P/E (12 month forward) is a stock's current price divided by the company's trailing 12-month earnings per share. The (P/E) ratio of the portfolio is the weighted average of the price/earnings ratios of the stocks in the portfolio. The P/E ratio of a company, which is a comparison of the cost of the company's stock and its expected next 12-month earnings per share, is calculated by dividing these two figures.

§ Price/sales is a stock's current price divided by the company's trailing 12-month sales per share. For the portfolio this number represents the weighted average of the price/sales ratios of the stocks in the portfolio. Price/sales represents the amount an investor is willing to pay for a dollar generated from a particular company's operations.

§ R-Squared is the measure of correlation between a portfolio and the market (benchmark). Values range between 0 and 1. The higher the value of R-Square, the greater the correlation between the two. R-squared can be used to determine the significance of a particular beta or alpha. Generally, a higher R-squared will indicate a more useful beta figure. If the R-squared is lower, then the beta is less relevant to the fund's performance.

§ Realized tracking error (also called active risk) is a measure of the actual deviation from the benchmark.

§ Return on Equity (ROE) represents the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROE can be one measure of quality of a company.

§ Sharpe Ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the portfolio's historical risk-adjusted performance.

§ Standard Deviation is a statistical measurement of dispersion about an average and depicts how widely a portfolio's returns varied over a certain period of time. When a portfoliohas a high standard deviation, the predicted range of performance is wide, implying greater volatility.

Glossary of termsContinued...


Disclosure

Issued in the United States by MFS Institutional Advisors, Inc., a U.S.-based investment advisor and subsidiary of Massachusetts Financial Services Company ("MFS").

This material is directed at investment professionals for general information use only with no consideration given to the specific investment objective, financial situation and particular needs of any specific person. Any securities and/or sectors mentioned herein are for illustration purposes and should not be construed as a recommendation for investment. Investment involves risk. Past performance is not indicative of future performance. The information contained herein may not be copied, reproduced or redistributed without the express consent of MFS Investment Management (“MFS”). While the information is believed to be accurate, it may be subject to change without notice. MFS does not warrant or represent that it is free from errors or omissions or that the information is suitable for any particular person’s intended use. Except in so far as any liability under any law cannot be excluded, MFS does not accept liability for any inaccuracy or for the investment decisions or any other actions taken by any person on the basis of the material included. MFS does not authorise distribution to retail investors.

Unless otherwise indicated, logos, product and services names are trademarks of MFS and its affiliates and may be registered in certain countries.

Documents

MFS - insidedwp.ladwp.com · 14/11/2018 · Robert Almeida, an institutional portfolio manager an 18-year MFS veteran, will be named global investment strategist effective January