QUARTER ENDING SEPTEMBER 30, 2018 …...Source: Bloomberg, Barclays, S&P, Russell, MSCI, JP Morgan, Credit Suisse, Alerian, NAREIT Equity Sep‐18 Q3 YTD 1 YR 3 YR 5 YR 10 YR MSCI

BOSTON | ATLANTA | CHARLOTTE | CHICAGO | DETROIT | LAS VEGAS | PORTLAND | SAN FRANCISCO

EASTERN MICHIGAN UNIVERSITYBOARD OF REGENTS

QUARTER ENDING SEPTEMBER 30, 2018INVESTMENT PERFORMANCE ANALYSIS

November 9, 2018

Page

NEPC Update 3

Key Themes and Opportunities 7

Market Outlook 9

Q3 Executive Summary 29

Total Fund Summary 36

Appendix- Goals and Objective- ESG Summary- Market Overview

TABLE OF CONTENTS

54

2

NEPC, LLC

NEPC UPDATE

3

HIGHLIGHTS OF THIRD QUARTER HAPPENINGS AT NEPC

NEPC INSIGHTS

• Taking Stock: Is Technology Driving Low Inflation?

• Taking Stock: Increasing Pension Contributions and Improving Corporate Pension Funding Ratios: Now What?

• NEPC 2018 ESG Flash Poll Results and Infographic

• NEPC 2018 ESG Flash Poll – Healthcare Highlights

• 2018 Second Quarter Market Thoughts

• The Evaluation of Tax Liabilities

• Healthcare Optimistic About Economy But Wary of Volatility and Geopolitical Risks (Healthcare Operating Fund Universe Results/ Infographic)

• Taking Stock: Trouble in Turkey Creates Opportunity in Emerging Markets

• State of the Union: A Look Back on 2018 and What to Expect Moving Forward

• Opportunity Zones: Doing Good in a Tax-Advantaged Way

• Taking Stock: Globalization Backlash: US-China Tariffs are Here to Stay

• Taking Stock: Total Enterprise Management: a 360 View of Investment Strategy

• Market Chatter: Potential End Game for US-China Trade Spat: The Good, the Bad, the Ugly

WEBINAR REPLAYS• NEPC’s Second Quarter 2018 Quarterly Markets Call

To download NEPC’s recent insights and webinar replays, visit: www.NEPC.com/insights

4

HIGHLIGHTS OF THIRD QUARTER HAPPENINGS AT NEPC

NEPC INSIGHTS Revisiting the Global Financial Crisis

• Lessons Learned or Forgotten? A 10-Year Retrospective of the Financial Crisis

• Taking Stock: Ten Years since the Global Financial Crisis, Part 3: Not Too Big toFail

• Healthcare: Using Past Lessons to Meet Present Challenges

• Private Wealth: The New Normal Is Here to Stay

• Taft-Hartley: Pension Plans: The Long and Difficult Road Traveled

• Insurance: Safety Nets Save the Day

• Endowments and Foundations: The 2008 Global Financial Crisis: Looking Back toGet Ahead

• Taking Stock: Will Growth Have the Last Word?

To download NEPC’s recent insights and webinar replays, visit: www.NEPC.com/insights

5

HIGHLIGHTS OF THIRD QUARTER HAPPENINGS AT NEPCRECENT UPDATES• It is with sadness we inform you of the passing away of former NEPC partner, Duane "Butch" Hess. He died

peacefully in his sleep on August 19. Duane joined NEPC in 1990 and was elected into our partnership in 1993, arole he held until 2006, when he retired to spend more time traveling, enjoying the arts and the city he loved somuch, Boston. He leaves behind his long-time partner Carmela Cattuti and two sons, Brian and Steven. For thosewho knew him, he was full of life with a smile for everyone. He joked that he was the first president of the NEPCRetired Partners Club (a title he was very honored to hold). He was frequently seen at NEPC’s Annual InvestmentConferences and would occasionally stop by the office to say hello and check in. He will be sadly missed butremembered with great fondness.

• SAVE THE DATE! NEPC will host our 24th Annual Investment Conference on May 7th and 8th, 2019 at the BostonPark Plaza. More details to come!

NEPC GIVES BACK• NEPC sponsored a volunteer day with the Greater

Boston chapter of Habitat for Humanity. Our volunteersspent their day helping to build homes for low-incomefamilies in need of decent and affordable housing.

• NEPC employees volunteered at the Greater BostonFood Bank (GBFB) and Oregon Food Bank on October4th. GBFB is the largest hunger-relief organization inNew England and among the largest food banks in thecountry. The food banks are committed to increasingfood distribution to provide at least one meal a day toevery person in need, while supporting healthy livesand healthy communities.

6

NEPC, LLC

KEY THEMES AND OPPORTUNITIES

7

CURRENT THEMES AND OPPORTUNITIES

Current Opportunities

Extended US Economic Cycle

Synchronized Economic Resurgence

China Transitions

Globalization Backlash

Trim US Equity Gains

Overweight Non-US Developed Market Equities

Maintain a Market Overweight to Emerging Market Equities

Raise Safe-Haven Fixed Income Exposure

Fund MLP/Midstream Energy Exposure From Risk Assets

Fund Emerging Local Debt

Add Macro Hedge Funds

Add Long Volatility Exposure

Key Market Themes

8

NEPC, LLC

MARKET OUTLOOK

9

Macro Equity Credit Real Assets

USDollar VIX US

10-YrS&P500

MSCIEAFE

MSCIEM

USAgg.

High Yield

DollarEMD Oil Gold REITS

0.7% -4.0 20 bps 7.7% 1.4% -1.1% 0.0% 2.4% 1.9% -1.2% -4.8% 0.7%

• US equities increased during the quarter, supported by strongmacroeconomic data and a tight labor market

• Emerging market equities broadly declined with ongoing currencyweakness and trade tensions weighing on sentiment

• The Federal Reserve hiked rates for the third time this year and isexpected to hike rates again in December

PERFORMANCE OVERVIEWQ3 Market Summary

Market segment (index representation) as follows: US Dollar (DXY Index), VIX (CBOE Volatility Index), US 10-Year (US 10-Year Treasury Yield), S&P 500 (USEquity), MSCI EAFE Index (International Developed Equity), MSCI Emerging Markets (Emerging Markets Equity), US Agg (Barclays US Aggregate BondIndex), High Yield (Barclays US High Yield Index), Dollar EMD (JPM Emerging Market Bond Index), Crude Oil (WTI Crude Oil Spot), Gold (Gold Price Spot),and REITs (NAREIT Composite Index).

10

TRAILING ANNUAL INDEX PERFORMANCE

Source: Bloomberg, Barclays, S&P, Russell, MSCI, JP Morgan, Credit Suisse, Alerian, NAREIT

Equity

Sep‐18 Q3 YTD 1 YR 3 YR 5 YR 10 YRMSCI ACWI 0.4% 4.3% 3.8% 9.8% 13.4% 8.7% 8.2%S&P 500 0.6% 7.7% 10.6% 17.9% 17.3% 13.9% 12.0%Russell 1000 0.4% 7.4% 10.5% 17.8% 17.1% 13.7% 12.1%Russell 2000 ‐2.4% 3.6% 11.5% 15.2% 17.1% 11.1% 11.1%Russell 2500 ‐1.5% 4.7% 10.4% 16.2% 16.1% 11.4% 12.0%MSCI EAFE 0.9% 1.4% ‐1.4% 2.7% 9.2% 4.4% 5.4%MSCI EM ‐0.5% ‐1.1% ‐7.7% ‐0.8% 12.4% 3.6% 5.4%

Credit

Sep‐18 Q3 YTD 1 YR 3 YR 5 YR 10 YRBC Global Agg ‐0.9% ‐0.9% ‐2.4% ‐1.3% 2.0% 0.8% 2.9%BC US Agg ‐0.6% 0.0% ‐1.6% ‐1.2% 1.3% 2.2% 3.8%BC Corp Credit ‐0.4% 1.0% ‐2.3% ‐1.2% 3.1% 3.5% 6.4%BC US HY 0.6% 2.4% 2.6% 3.0% 8.1% 5.5% 9.5%BC Muni ‐0.6% ‐0.2% ‐0.4% 0.3% 2.2% 3.5% 4.8%BC Muni HY ‐0.4% 0.8% 4.4% 6.4% 6.3% 6.4% 6.5%BC TIPS ‐1.1% ‐0.8% ‐0.8% 0.4% 2.0% 1.4% 3.3%BC 20+ STRIPS ‐4.4% ‐4.7% ‐8.3% ‐4.1% 1.5% 7.3% 7.4%BC Long Treasuries ‐3.0% ‐2.9% ‐5.8% ‐3.6% 0.7% 4.4% 5.5%BC Long Credit ‐0.6% 1.3% ‐5.2% ‐2.2% 5.2% 5.7% 8.4%BC Govt/Credit 1‐3 Yr ‐0.1% 0.3% 0.4% 0.2% 0.7% 0.8% 1.7%CS Lev Loan 0.7% 1.9% 4.4% 5.6% 5.4% 4.4% 5.8%JPM EMBI Glob Div 1.5% 2.3% ‐3.0% ‐1.9% 6.0% 5.4% 7.5%JPM GBI‐EM Glob Div 2.6% ‐1.8% ‐8.1% ‐7.4% 5.2% ‐1.7% 2.7%

Real Assets

Sep‐18 Q3 YTD 1 YR 3 YR 5 YR 10 YRBBG Commodity 1.9% ‐2.0% ‐2.0% 2.6% ‐0.1% ‐7.2% ‐6.2%Alerian MLP ‐1.6% 6.6% 5.9% 4.9% 4.4% ‐2.7% 9.2%FTSE NAREIT Equity REITs ‐2.4% 0.8% 1.8% 4.3% 9.0% 9.6% 7.8%

11

US financial conditions remain loose and support steady economic gainsBut a reversal in easy conditions could be fueled from a misstep by the Fed, strong US dollar,increased volatility in the Chinese yuan, or an acceleration in US inflation. With further rate hikeslikely in 2019, an overconfident Fed could “surprise” the markets with a more aggressive posture.

We are evaluating market metrics such as the yield curve that would cause usto shift to a more defensive outlook

Should yield curve steepness turn negative and economic metrics show some weakness, ourrecommendation will be to materially increase safe-haven fixed income and reduce equityexposure. In addition, safe-haven fixed income appears more attractive following recent increasesin US interest rates.

EVALUATION OF KEY ECONOMIC SIGNALS

Source: (Left) Federal Reserve Bank of St. LouisSource: (Right) Bloomberg

12

US ECONOMY REMAINS STRONG

0 5 10 15 20 25 30 35 40 45 50

Q42007

Q31990

Q11980

Q21960

Q12001

Q41973

Q41948

Q41969

Q21953

Q31957

Number of QuartersLength of Economic Cycles

The current expansion is tied for the longest by

duration, though cumulative growth

remains well below other historical examples.

Source: Bloomberg

13

US EQUITIES ARE THE OUTLIER IN 2018

Source: Bloomberg

14

VALUE & GROWTH EXHIBIT CYCLICAL BEHAVIOR

Source: Russell, Bloomberg, NEPCShaded area represents growth outperformance

As of September 2018

Post‐2008, growth has outperformed value with record profits and the dominance of FAANG

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

-20%

-15%

-10%

-5%

0%

5%

10%

15%

1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

R1000 Growth - Value 5-Year Return Differential

Growth Outperforms

Value Outperforms

15

SECTOR PERFORMANCE INDICATING A TURN

550

650

750

850

950

1050

1150

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

MSCI USA Cyclical Sectors – Defensive Sectors Return Spread

Source: MSCI, Bloomberg

16

US INTEREST RATES SHIFTED HIGHER IN 2018

Source: Bloomberg

17

Key Market Theme, Jan. 2017 – “Expected path of Fed policy through 2019 matters more than timing of the next hike”

Key Market Theme, Jan. 2018 – “The disconnect between market expectations and Fed signaling has grown but the expected path of Fed policy through 2020 matters more than timing of the next hike”

THE EVOLUTION OF FED GRADUALISM

Source: Bloomberg

18

THE FED IS REDUCING MARKET LIQUIDITY

The Fed’s balance sheet hasshrunk by more than $300billion from its peak of $4.5trillion and will continuedeclining by a max of $50billion a month

The Fed is slowly reducing its balance sheetand the normalization program will likelyhave tightening effects – in the same way thebalance sheet expansion had easing effects

Source: Bloomberg

19

A SHIFT TO TIGHTER FINANCIAL CONDITIONS

2.0%

2.5%

3.0%

3.5%

4.0%

2012 2013 2014 2015 2016 2017 2018

Barclays Corporate Global Aggregate Yield

Source: Barclays, Bloomberg

20

A LESS SYNCHRONIZED GLOBAL ECONOMY

‐2%

‐1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Real Annual GDP Growth

Emerging MarketsUnited StatesEurozoneJapan

Source: Bloomberg

21

THE US CONTINUES TO DIVERGE

‐2.0%

‐1.5%

‐1.0%

‐0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

1990 1994 1998 2002 2006 2010 2014 2018

10‐Year US/German Spread

Source: Bloomberg

22

EM HAS DECLINED, BUT IT COULD BE WORSE

Data Source: MSCI, Bloomberg, NEPC2018 represents returns for 12/29/2017-09/30/2018

23

CURRENCY DETRACTED FROM TOTAL RETURNS

Source: MSCI, Bloomberg, NEPC

24

US-CHINA TRADE POLICY

January 2018

Q1 2018

Q2 2018

Q3 2018

30% tariff on imported solar panels and taxes on large residential washing machines

Retaliatory tariffs of ~$3B worth of US exports

25% tariff on imported steel and 10% tariff on imported aluminum

25% tariff levied on $50 billion of imports from China

10% tariff on $200 billion of imports from China. Tariffs will be increased to 25% at the end of year.

China responds with tariffs of 25% on $50 billion worth of US exports, with soybeans being a sizable target

China calls the tariffs “a serious attack on international trade”

China responds with tariffs of 5%-10% on $60 billion worth of US exports

FutureUS may announce additional tariffs on $267 billion of imports from China. This would essentially add a tariff to the remaining products that China exports to the US.

China may cut tariffs on non-US goods to reduce the impact of US tariffs. China could further restrict the sale of rare earth elements that are inputs for many end products such as batteries and televisions.

25

POTENTIAL OUTCOMES AND IMPLICATIONS

Outcome Description Implications

Base Case: Elevated Tariffs

A long-term “cold war” in the ongoing “trade battle” between the US and China

- Tariffs and restrictions on trade are implemented – leading to marginally higher inflation and marginally lower growth rates

- Equity and currency volatility is elevated, but valuations may provide attractive investment opportunities

Favorable Case:Negotiated Settlement

The US and China agree to a mutually beneficial pact

- Some tariffs or trade limitations may be implemented, but the pact allows for broader access to local China and US markets for each nation

- Volatility may persist throughout negotiations, though this is the most appealing outcome for global equities

Tail Risks: US – China Trade War

The countries escalate to implementing more severe

protectionist policies

- Results in destabilization of global equity markets and the global economy

- It would likely result in a global recession as economic growth rates are hampered with the potential for stagflation

- Investors are encouraged to rebalance to “safe haven” fixed-income exposure, such as TIPS and government debt

Full-Blown Trade War

Other countries become involved levying additional

tariffs and materially reducing global trade flows

(e.g. 1930s style global trade restrictions)

26

TRADE TENSIONS WEIGHED ON RETURNS

Source: S&P, MSCI, Bloomberg, NEPC

27

ATTRACTIVE VALUATIONS

Source: MSCI, Bloomberg

28

NEPC, LLC

Q3 EXECUTIVE SUMMARY

29

Market Value 3 Mo Rank YTD Rank 1 Yr Rank 3 Yrs Rank 5 Yrs Rank_

Board of Regents Total Composite $40,422,850 1.2% 38 -0.1% 70 2.2% 36 5.0% 30 3.5% 51Allocation Index 1.8% 13 1.0% 35 4.2% 9 5.6% 19 -- --

XXXXX

Year to Date

Anlzd Ret Rank Anlzd StdDev Rank Sharpe

Ratio Rank_

Board of Regents TotalComposite -0.14% 70 5.19% 98 -0.28 36

Allocation Index 0.99% 35 5.10% 98 -0.07 27XXXXX

Eastern Michigan University - Board of Regents

Total Fund Performance Summary

Market Value 3 Mo Rank YTD Rank 1 Yr Rank 3 Yrs Rank 5 Yrs Rank_

Long Term Investment Pool $16,173,143 1.3% 79 -0.1% 96 2.8% 91 7.0% 86 4.9% 89Long Term Allocation Index 1.9% 65 1.1% 84 4.6% 80 8.0% 74 -- --Long Term Balanced Index 1.8% 67 1.1% 83 4.5% 81 8.0% 72 5.7% 75

XXXXX

Composite Performance - The Total Composite returned 1.2% for the quarter and the portfolio is now near flat for the year- The Long Term Investment Pool earned 1.3% for Q3, bringing YTD performance to -0.10%

Allocation Index- The overweight to Fixed Income and Equities due to the strategic decision to preserve liquidity aided performance during the quarter

Active Management - SEG Baxter outperformed the MSCI ACWI ex. USA by 40 bps for the quarter. The outperformance is attributed to their exposures within Consumer Discretionary and due to an underweight to Emerging Markets- Artisan Global Opporunities had a minor pullback for the quarter, primarily due to relative weakness in Energy and Consumer Discretionary holdings

30

Market Value($)

3 Mo(%) Rank YTD

(%) Rank 1 Yr(%) Rank 3 Yrs

(%) Rank 5 Yrs(%) Rank

_

Board of Regents Total Composite 40,422,850 1.2 38 -0.1 70 2.2 36 5.0 30 3.5 51Allocation Index 1.8 13 1.0 35 4.2 9 5.6 19 -- --

InvestorForce Trust Funds >60% Fixed Income Net Median 0.9 0.5 1.6 4.1 3.6Short Term Investment Pool 24,249,707 0.1 -- 0.1 -- 0.1 -- 0.1 -- 0.1 --

91 Day T-Bills 0.5 -- 1.3 -- 1.6 -- 0.9 -- 0.5 --Long Term Investment Pool 16,173,143 1.3 79 -0.1 96 2.8 91 7.0 86 4.9 89

Long Term Allocation Index 1.9 65 1.1 84 4.6 80 8.0 74 -- --Long Term Balanced Index 1.8 67 1.1 83 4.5 81 8.0 72 5.7 75

InvestorForce All E&F < $50mm Net Median 2.3 2.6 6.1 8.9 6.5Total Equity 6,151,494 3.6 50 3.6 51 8.6 53 13.1 41 -- --

MSCI ACWI 4.3 37 3.8 48 9.8 44 13.4 37 8.7 51eV All Global Equity Net Median 3.6 3.7 9.0 12.5 8.8

Total Fixed 5,180,150 0.5 39 -0.5 25 -0.3 32 4.0 38 -- --BBgBarc US Aggregate TR 0.0 52 -1.6 40 -1.2 48 1.3 86 2.2 46

eV Global Fixed Inc Unhedged Net Median 0.1 -2.2 -1.3 3.2 1.9GAA/ Risk Parity 2,927,761 -1.1 88 -5.1 95 -2.4 88 1.5 89 -- --

60% MSCI World (Net) / 40% FTSE WGBI 2.3 29 2.2 19 6.0 19 8.8 23 5.7 30eV Global TAA Net Median 1.6 -0.1 3.5 6.0 3.7

Real Assets 1,913,738 0.4 23 -1.8 69 1.3 92 8.2 23 -- --PIMCO All Asset Index 1.0 14 0.1 55 1.1 95 4.0 68 3.5 23Bloomberg Commodity Index -2.0 76 -2.0 71 2.6 72 -0.1 99 -7.2 67

InvestorForce All E&F Real Assets/Commodities Net Median -0.3 0.8 3.3 5.1 -1.8XXXXX


Total Fund Performance Summary

Intermediate Term Balanced Index comprised of 50.0% Barclays Intermediate U.S. GV/CR Index and 50.0% BofA ML 1-3 Year Treasury Index.Allocation Index: Used to measure the value add from active management. Calculated as the asset weight from the prior month end mulitiplied by thespecified market index.

31

Asset Allocation vs. Target

Current Policy Current Net AssetAllocation

_

Domestic Equity $1,674,305 10.0% 10.4% 17.6%International Equity $1,094,004 5.0% 6.8% 16.1%Emerging Markets Equity $737,314 5.0% 4.6% 9.2%Global Equity $2,645,871 15.0% 16.4% --Core Fixed Income $2,109,638 5.0% 13.0% 20.1%High Yield -- -- -- 0.8%TIPS -- -- -- 7.5%Multi-sector Fixed Income $792,034 5.0% 4.9% --Non-US Developed Bonds -- -- -- 4.3%Emerging Market Debt -- 5.0% -- 9.3%GAA/Risk Parity $2,927,761 20.0% 18.1% --Hedge Funds -- 10.0% -- 1.0%Absolute Return $2,278,478 10.0% 14.1% --Real Assets $1,913,738 10.0% 11.8% 2.5%Cash -- -- -- 11.6%Total $16,173,143 100.0% 100.0% 100.0%

XXXXX

-Asset Allocation vs. Policy Targets analytics are based on the Long Term Investment Pool.


Asset Allocation vs. Policy Targets

Net Asset Allocation breaksmulti-asset investments likeGAA and Global Equity intotheir underlying asset classesproviding a look through toyour actual asset allocation

32

gwyniemko

Line

INVESTMENT MANAGER - DUE DILIGENCE STATUS

Manager Changes/ NEPC DueInvestment Options Announcements Diligence Committee

(Recent Quarter) Recommendations

PIMCO Other: Transition of CEO WatchAll Asset Strategy 8/2018

Acadian Asset Management LLCLoss of Personnel: Acadian names new

Director of Implementation No ActionEmerging Markets Equity 9/2018

33

INVESTMENT MANAGER DUE DILIGENCEInvestment Option Commentary NEPC Rating

PIMCO Rob Arnott, Founder, Chairman and CEO of Research Affiliates, is formally transitioning the title of CEO to Katy Sherrerd, President and COO. Mr. Arnott will continue as Chairman of Research Affiliates, and his portfolio management duties will not change. Specifically, Mr. Arnott will continue as co-portfolio manager of the PIMCO All Asset Fund along with CIO Chris Brightman. This title transition for Ms. Sherrerd appears to be formalizing what has already occurred in practice over the last several years, as she will continue to focus on business functions, governance, and executing key strategic initiatives. NEPC Research anticipates minimal day-to-day change with Katy Sherrerd assuming the CEO role. Additionally, there is no change on the investment side or with portfolio management responsibilities associated with the PIMCO suite of funds. NEPC Research does not have any concerns with this change and does not believe it will have any day-to-day impact on the PIMCO All Asset strategies or the PIMCO suite of funds advised by Research Affiliates.

1

All Asset Strategy

Acadian Asset Management LLC

Acadian Asset Management notified NEPC Research that Director of Long/Short Equities Alex Voitenok has been promoted to Director of Implementation effective September 1, 2018. Mr. Voitenok will lead Acadian’s Portfolio Construction and Trading Team. Mr. Voitenok’s promotion is the result of Mauricio Karchmer’s departure in December 2017. Michael Gleason, Senior Vice President and Portfolio Manager, will assume a leadership role on the Long/Short Team in a joint capacity with Mr. Voitenok as Co-Directors in the interim. Effective 2019, Mr. Gleason will become sole Director of Long/Short Equities Strategy. NEPC Research is comfortable with this transition given the broad and experienced team structure at Acadian. The implementation team has 12 members and Acadian had been searching for Mr. Karchmer’s replacement since January 2018. NEPC research recommends NO ACTION.

1Emerging Markets

Equity

34

INVESTMENT MANAGER DUE DILIGENCENEPC Due Diligence Committee Recommendation Key

No Action Informational items have surfaced; no action is recommended.

Watch Issues have surfaced to be concerned over; manager can participate in future searches, but current and prospective clients must be made aware of the issues.

Hold Serious issues have surfaced to be concerned over; manager cannot be in future searches unless a client specifically requests, but current and prospective clients must be made aware of the issues.

Client Review Very serious issues have surfaced with a manager; manager cannot be in future searches unless a client specifically requests.Current clients must be advised to review the manager.

TerminateWe have lost all confidence in the product; manager would not be recommended for searches and clients would be discouraged from using. The manager cannot be in future searches unless a client specifically requests. Current clients must be advised toreplace the manager.

35

NEPC, LLC

TOTAL FUND SUMMARY

36

Market Value($)

% ofPortfolio

3 Mo(%) Rank YTD


(%) Rank 5 Yrs(%) Rank 10 Yrs

(%) Rank Inception(%)

InceptionDate

_

Board of Regents Total Composite 40,422,850 100.0 1.2 38 -0.1 70 2.2 36 5.0 30 3.5 51 -- -- 5.1 Apr-09Allocation Index 1.8 13 1.0 35 4.2 9 5.6 19 -- -- -- -- -- Apr-09

InvestorForce Trust Funds >60% Fixed Income Net Median 0.9 0.5 1.6 4.1 3.6 4.6 5.0 Apr-09Short Term Investment Pool 24,249,707 60.0 0.1 -- 0.1 -- 0.1 -- 0.1 -- 0.1 -- -- -- 0.1 Apr-09

91 Day T-Bills 0.5 -- 1.3 -- 1.6 -- 0.9 -- 0.5 -- 0.3 -- 0.3 Apr-09Bank of Ann Arbor Trust Cash 232,112 0.6 0.0 99 0.0 99 0.0 99 0.0 99 0.0 99 -- -- 0.0 Nov-09

91 Day T-Bills 0.5 76 1.3 54 1.6 48 0.9 80 0.5 83 0.3 91 0.3 Nov-09eV US Cash Management Net Median 0.5 1.3 1.6 1.0 0.7 0.5 0.5 Nov-09

Long Term Investment Pool 16,173,143 40.0 1.3 79 -0.1 96 2.8 91 7.0 86 4.9 89 -- -- 5.6 Apr-09Long Term Allocation Index 1.9 65 1.1 84 4.6 80 8.0 74 -- -- -- -- -- Apr-09Long Term Balanced Index 1.8 67 1.1 83 4.5 81 8.0 72 5.7 75 -- -- 5.6 Apr-09

InvestorForce All E&F < $50mm Net Median 2.3 2.6 6.1 8.9 6.5 7.5 10.0 Apr-09Total Equity 6,151,494 15.2 3.6 50 3.6 51 8.6 53 13.1 41 -- -- -- -- 8.6 Jan-14

MSCI ACWI 4.3 37 3.8 48 9.8 44 13.4 37 8.7 51 8.2 62 7.5 Jan-14eV All Global Equity Net Median 3.6 3.7 9.0 12.5 8.8 8.6 7.6 Jan-14

SEG Baxter 1,094,004 2.7 1.1 -- 1.9 -- 3.8 -- -- -- -- -- -- -- 7.5 Jul-17MSCI ACWI ex USA 0.7 -- -3.1 -- 1.8 -- 10.0 -- 4.1 -- 5.2 -- 6.4 Jul-17

Acadian Emerging Markets Equity 737,314 1.8 -0.8 26 -9.4 50 -3.8 56 12.0 41 -- -- -- -- 3.3 Oct-14MSCI Emerging Markets -1.1 30 -7.7 25 -0.8 27 12.4 35 3.6 54 5.4 58 3.4 Oct-14

eV Emg Mkts Equity Net Median -2.8 -9.5 -3.2 11.4 3.7 5.7 3.1 Oct-14Artisan Global Opportunities 1,361,009 3.4 3.6 51 7.7 19 12.5 24 16.8 10 -- -- -- -- 12.5 Dec-14

MSCI ACWI 4.3 37 3.8 48 9.8 44 13.4 37 8.7 51 8.2 62 7.7 Dec-14eV All Global Equity Net Median 3.6 3.7 9.0 12.5 8.8 8.6 7.7 Dec-14

Hexavest GE 1,284,862 3.2 4.2 40 1.2 70 5.6 72 10.5 75 -- -- -- -- 6.5 Dec-14MSCI ACWI 4.3 37 3.8 48 9.8 44 13.4 37 8.7 51 8.2 62 7.7 Dec-14

eV All Global Equity Net Median 3.6 3.7 9.0 12.5 8.8 8.6 7.7 Dec-14Vanguard Total Stock Market VIPERs 1,674,305 4.1 7.1 31 10.5 39 17.6 36 -- -- -- -- -- -- 18.5 Nov-16

Russell 3000 7.1 30 10.6 39 17.6 36 17.1 30 13.5 23 12.0 43 18.5 Nov-16eV All US Equity Net Median 5.6 8.4 14.6 15.1 11.6 11.6 15.8 Nov-16

-Intermediate Term Balanced Index: 50.0% Barclays Intermediate U.S. GV/CR Index and 50.0% BofA ML 1-3 Year Treasury Index.-Allocation Index: Used to measure the value add from active management. Calculated as the asset weight from the prior month end mulitiplied by the specified market index.-Long-Term Balanced Index: (10% - Russell 3000)(5% - MSCI EAFE Small Cap)(5% - MSCI Emerging Markets)(15% - MSCI ACWI)(15% - Barclays Aggregate)(5% - 50%JPM EMBIGD/ 25% JPM ELMI+/ 25% JPM GBI EM GD)(5% - Barclays Multi-verse)(20% - 60% MSCI World (Net)/ 40% CITI WGBI)(10% - HFRI Fund of Funds Composite)(10% - PIMCO All AssetIndex).


Total Fund Performance Detail

37

Market Value($)

% ofPortfolio

3 Mo(%) Rank YTD


(%) Rank 5 Yrs(%) Rank 10 Yrs

(%) Rank Inception(%)

InceptionDate

_

Total Fixed 5,180,150 12.8 0.5 39 -0.5 25 -0.3 32 4.0 38 -- -- -- -- 2.7 Jan-14BBgBarc US Aggregate TR 0.0 52 -1.6 40 -1.2 48 1.3 86 2.2 46 3.8 57 2.3 Jan-14

eV Global Fixed Inc Unhedged Net Median 0.1 -2.2 -1.3 3.2 1.9 3.9 1.9 Jan-14Franklin Templeton- Global Multi-Sector Plus 792,034 2.0 1.4 1 -0.1 14 -1.9 65 4.5 2 -- -- -- -- 1.2 Oct-14

BBgBarc Multiverse -0.8 66 -2.4 51 -1.3 42 2.3 48 0.9 60 3.1 74 0.8 Oct-14eV Global Agg Fixed Inc Net Median -0.7 -2.4 -1.5 2.1 1.1 3.6 0.6 Oct-14

BlackRock- SIO 2,278,478 5.6 0.4 45 0.0 10 0.8 5 2.7 26 -- -- -- -- 2.2 Oct-14BBgBarc US Aggregate TR 0.0 85 -1.6 77 -1.2 79 1.3 96 2.2 86 3.8 99 1.7 Oct-14

eV US Core Plus Fixed Inc Net Median 0.3 -1.3 -0.8 2.3 2.8 5.2 2.2 Oct-14Baird - Core Bond 1,073,396 2.7 0.1 70 -1.7 72 -1.2 70 1.8 31 -- -- -- -- 1.7 Dec-14

BBgBarc US Aggregate TR 0.0 76 -1.6 62 -1.2 67 1.3 68 2.2 65 3.8 78 1.3 Dec-14eV US Core Fixed Inc Net Median 0.1 -1.5 -1.1 1.5 2.3 4.3 1.5 Dec-14

Vanguard Inflation Protected Fund 948,440 2.3 -- -- -- -- -- -- -1.0 Sep-18BBgBarc US TIPS TR -0.8 -0.8 0.4 2.0 1.4 3.3 -1.1 Sep-18

Treasury Strips 87,802 0.2 -0.2 57 -1.3 1 -1.9 10 0.4 99 2.5 99 -- -- 4.1 Apr-09BBgBarc US Treasury Long TR -2.9 95 -5.8 74 -3.6 89 0.7 99 4.4 92 5.4 99 4.4 Apr-09

eV US Long Duration Fixed Inc Net Median 0.3 -5.4 -2.6 4.1 5.4 8.3 8.3 Apr-09GAA/ Risk Parity 2,927,761 7.2 -1.1 88 -5.1 95 -2.4 88 1.5 89 -- -- -- -- 0.3 Dec-14

60% MSCI World (Net) / 40% FTSE WGBI 2.3 29 2.2 19 6.0 19 8.8 23 5.7 30 6.3 55 5.2 Dec-14eV Global TAA Net Median 1.6 -0.1 3.5 6.0 3.7 6.6 2.3 Dec-14

William Blair Macro Allocation 1,499,550 3.7 -2.4 96 -3.9 89 -3.3 94 -- -- -- -- -- -- -1.5 Aug-1760% MSCI World (Net) / 40% FTSE WGBI 2.3 29 2.2 19 6.0 19 8.8 23 5.7 30 6.3 55 6.4 Aug-17

eV Global TAA Net Median 1.6 -0.1 3.5 6.0 3.7 6.6 3.6 Aug-17AQR Global Market and Alternative Premia Offshore Fund 1,428,211 3.5 0.2 73 -- -- -- -- -- -- -- -- -- -- -4.8 Mar-18

60% MSCI World (Net) / 40% FTSE WGBI 2.3 29 2.2 19 6.0 19 8.8 23 5.7 30 6.3 55 2.0 Mar-18Real Assets 1,913,738 4.7 0.4 23 -1.8 69 1.3 92 8.2 23 -- -- -- -- 3.1 Dec-14

PIMCO All Asset Index 1.0 14 0.1 55 1.1 95 4.0 68 3.5 23 5.2 12 2.8 Dec-14Bloomberg Commodity Index -2.0 76 -2.0 71 2.6 72 -0.1 99 -7.2 67 -6.2 99 -6.4 Dec-14

InvestorForce All E&F Real Assets/Commodities Net Median -0.3 0.8 3.3 5.1 -1.8 0.3 -2.8 Dec-14PIMCO All Asset 1,913,738 4.7 0.4 70 -1.8 76 1.3 66 8.2 26 -- -- -- -- 3.1 Dec-14

PIMCO All Asset Index 1.0 57 0.1 49 1.1 67 4.0 65 3.5 52 5.2 72 2.8 Dec-14Bloomberg Commodity Index -2.0 92 -2.0 78 2.6 57 -0.1 95 -7.2 99 -6.2 99 -6.4 Dec-14

eV Global TAA Net Median 1.6 -0.1 3.5 6.0 3.7 6.6 2.3 Dec-14XXXXX


Total Fund Performance Detail

38


Total Fund Asset Growth Summary Quarter Ending September 30, 2018

BeginningMarket Value Contributions Withdrawals Net Cash Flow Net Investment

ChangeEnding

Market Value_

Acadian Emerging Markets Equity $743,256 $0 $0 $0 -$5,942 $737,314AQR Global Market and Alternative Premia Offshore Fund $1,425,252 $0 $0 $0 $2,959 $1,428,211Artisan Global Opportunities $1,314,329 $0 $0 $0 $46,680 $1,361,009Baird - Core Bond $1,072,609 $0 $0 $0 $787 $1,073,396Bank of Ann Arbor Trust Cash $175,758 $953,537 -$897,182 $56,354 $0 $232,112BlackRock- SIO $2,270,144 $0 $0 $0 $8,333 $2,278,478Franklin Templeton- Global Multi-Sector Plus $780,801 $0 $0 $0 $11,233 $792,034Hexavest GE $1,233,507 $0 $0 $0 $51,355 $1,284,862Northern Inst Govt Select MMKT $0 $24,000,000 $0 $24,000,000 $17,595 $24,017,595PIMCO All Asset $1,907,007 $0 $0 $0 $6,731 $1,913,738SEG Baxter $1,082,254 $0 $0 $0 $11,750 $1,094,004Treasury Strips $87,954 $0 $0 $0 -$152 $87,802Vanguard Inflation Protected Fund -- $950,000 $0 $950,000 -$1,560 $948,440Vanguard Total Stock Market VIPERs $1,563,688 $0 $0 $0 $110,617 $1,674,305William Blair Macro Allocation $1,536,316 $0 $0 $0 -$36,767 $1,499,550Z Prisma Spectrum Fund Ltd $1,060,211 $0 -$1,060,211 -$1,060,211 $0 --Total $16,253,086 $25,903,537 -$1,957,393 $23,946,143 $223,621 $40,422,850

XXXXX

39


Long Term Investment Pool

Attribution Summary3 Months Ending September 30, 2018Wtd.

ActualReturn

Wtd. IndexReturn

ExcessReturn

SelectionEffect

AllocationEffect

InteractionEffects

TotalEffects

Total Equity 3.6% 3.6% 0.0% 0.0% 0.0% 0.0% 0.1%Total Fixed 0.5% 0.0% 0.6% 0.1% -0.1% 0.0% 0.1%GAA/ Risk Parity -1.1% 2.3% -3.5% -0.7% 0.0% 0.0% -0.6%Real Assets 0.4% 1.0% -0.7% -0.1% 0.0% 0.0% -0.1%Hedge Funds -- 0.2% -- 0.0% 0.1% 0.0% 0.1%Total 1.3% 1.8% -0.5% -0.6% 0.0% 0.1% -0.5%

40

Attribution Summary1 Year Ending September 30, 2018

Wtd.ActualReturn

Wtd. IndexReturn

ExcessReturn

SelectionEffect

AllocationEffect

InteractionEffects

TotalEffects

Total Equity 8.6% 9.5% -1.0% -0.3% 0.2% -0.1% -0.2%Total Fixed -0.3% -1.6% 1.3% 0.3% -0.2% 0.0% 0.1%GAA/ Risk Parity -2.4% 6.0% -8.5% -1.7% 0.0% 0.1% -1.6%Real Assets 1.3% 1.1% 0.2% 0.0% 0.0% 0.0% 0.0%Hedge Funds -- 3.0% -- -0.1% 0.1% 0.0% 0.0%Total 2.8% 4.5% -1.7% -1.8% 0.0% 0.1% -1.7%


Long Term Investment Pool

41


Total Fund Asset Allocation History

42

Last ThreeMonths Year-To-Date One Year Three Years

_

Beginning Market Value $16,253,086 $16,466,044 $19,980,510 $30,514,226Contributions $25,903,537 $27,419,989 $38,441,825 $164,566,089Withdrawals -$1,983,646 -$3,562,271 -$18,669,949 -$159,308,101Net Cash Flow $23,919,891 $23,857,718 $19,771,876 $5,257,989Net Investment Change $249,873 $99,088 $670,463 $4,650,635Ending Market Value $40,422,850 $40,422,850 $40,422,850 $40,422,850

_


Total Fund Asset Growth Summary

43

5 Years Ending September 30, 2018


Ratio Rank_

Long Term Investment Pool 4.93% 89 5.09% 19 0.87 75Long Term Allocation Index -- -- -- -- -- --Long Term Balanced Index 5.70% 75 5.18% 19 1.00 44


Risk vs. Return



Ratio Rank_

Long Term Investment Pool 7.04% 86 5.02% 24 1.23 82Long Term Allocation Index 7.97% 74 5.38% 35 1.32 67Long Term Balanced Index 8.02% 72 5.34% 33 1.34 63

- Above Risk vs. Return analytics are based on the Long Term Investment Pool.

44



Ratio Rank_

Board of Regents TotalComposite 3.55% 51 3.50% 51 0.86 76

Allocation Index -- -- -- -- -- --XXXXX



Ratio Rank_

Board of Regents TotalComposite 5.01% 30 3.64% 30 1.14 56

Allocation Index 5.55% 19 3.91% 19 1.20 52


Total Fund Risk vs. Return

45


Return Summary vs. Peer Universe

-The above Return Summary vs. Peer Universe analytic is based on the Long Term Investment Pool.

46



-The above Return Summary vs. Peer Universe analytic is based on the Long Term Investment Pool.

47

Long Term Investment Pool vs. InvestorForce All E&F < $50mm Net3 Years


Risk Statistics vs. Peer Universe

-The above Risk Statistics vs. Peer Universe analytics are based on the Long Term Investment Pool.

48

Long Term Investment Pool vs. InvestorForce All E&F < $50mm Net5 Years


Risk Statistics vs. Peer Universe

-The above Risk Statistics vs. Peer Universe analytics are based on the Long Term Investment Pool.

49



50



51


Risk Statistics vs. Peer UniverseTotal Composite vs. InvestorForce Trust Funds >60% Fixed Income Net

3 Years

52


Risk Statistics vs. Peer UniverseTotal Composite vs. InvestorForce Trust Funds >60% Fixed Income Net

5 Years

53

NEPC, LLC

APPENDIX

54

NEPC, LLC

GOALS AND OBJECTIVES

55

Eastern Michigan University’s investment objective shall be to preserve investment principal while deriving a reasonable return consistent with the prevailing market and economic conditions. Investment decisions shall be based on specific guidelines which incorporate quality, safety, diversity and liquidity of funds.

Investment Policy

GOALS AND OBJECTIVES

Asset Class Target RangeEquity 35% 20%‐50%

Domestic All Cap 10% 5%‐20%International Equities 5% 0%‐10%Emerging International Equities 5% 0%‐8%Global Equity 15% 10%‐20%

Fixed Income 25% 20%‐50%Core Fixed 5% 0%‐10%Absolute Return Fixed Income 10% 5%‐15%Emerging Market Debt 5% 0%‐8%Global Multi‐Sector Fixed Income 5% 0%‐10%

Global Asset Allocation/Risk Parity 20% 10%‐30%Alternatives 20% 5%‐25%

Hedge Funds 10% 0%‐20%Real Assets 10% 5%‐15%

Expected Return (5‐7 years)Standard Deviation

6.0%11.1%

56

GOALS AND OBJECTIVES – LONG TERM INVESTMENT POOL

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18

Cu

mu

lati

ve R

etu

rns

Long Term Investment Pool (Net)

Actual Expected +1 Std Dev +2 Std Dev -1 Std Dev -2 Std Dev

57

NEPC, LLC

ESG SUMMARY

58

LONG TERM INVESTMENT POOL – ESG PRODUCTS

Firm/ProductStrategy is Managed with

ESG Considerations(Y/N)

Acadian Emerging Markets Equity Yes

AQR GMAP No

Aritisan Global Opportunities No

Baird Core Bond No

BlackRock SIO No

Comerica Treasury Strips No

Franklin Templeton Yes

Hexavest Global Equity Yes

PIMCO All Asset No

Prisma Spectrum Fund No

Select Baxter Street Fund No

Vanguard No

William Blair No

59

NEPC, LLC

MARKET OVERVIEW

60


• The global growth outlook remainsin tact, despite trade policy issues

• Global bond yields increased ascentral banks transition towardtighter monetary policy

• Higher rates in the US supportedthe dollar – adding further pressureto emerging market currencies

Yield06/30/18

Yield09/30/18 |∆|

US 10‐Yr 2.86% 3.06% 0.20%

US 30‐Yr 2.99% 3.21% 0.22%

US Real 10‐Yr 0.74% 0.92% 0.18%

German 10‐Yr 0.30% 0.47% 0.17%

Japan 10‐Yr 0.04% 0.13% 0.09%

China 10‐Yr 3.48% 3.63% 0.15%

EM Local Debt 6.59% 6.62% 0.03%

Q3 Macro Market Summary

Source: Bloomberg

Source: Bloomberg

CentralBanks

CurrentRate

CPIYOY Notes from the Quarter

FederalReserve

2.00% ‐2.25% 2.7%

The Fed increased its benchmark interest rate to 2.00% ‐ 2.25% in

September and is expected to hike rates one more time in 2018

EuropeanCentralBank

0.0% 2.1%

The ECB maintained its current benchmark interest rate, but

continues its plan to scale back its QE Program

Bank of

Japan‐0.1% 1.3%

The BoJ will continue its ultra‐easy QE program with inflation remaining well below target

MACRO PERFORMANCE OVERVIEW

61


Equity Performance Overview

• Strong economic data and positivesentiment helped US equities tooutperform global equities

• Trade-sensitive economiesdisproportionately declined asescalating trade tensions andcurrency weakness weighed onreturns

Russell 3000 QTD Sector Return Contribution

Information Technology 1.7%

Consumer Discretionary 0.3%

Financials 0.5%

Industrials 1.4%

Consumer Staples 0.0%

Energy 0.4%

Materials 0.0%

Health Care 0.5%

Real Estate 0.6%

Communication Services ‐1.0%

Utilities 0.1%

Q3 Equity Market Summary

Source: MSCI, Russell, S&P, Bloomberg

Source: MSCI, Bloomberg. QTD top country contributors to index returnSource: Russell, Bloomberg

EQUITY PERFORMANCE OVERVIEW

62


Credit Performance Overview

• Credit spreads broadly declined and remain below medians in most areas of the credit market

• Dollar-denominated emerging market debt increased by 2.3% as spreads tightened

Q3 Credit Market Summary

Source: Barclays, JPM, S&P, Bloomberg

Source: Barclays, JPM, S&P, BloombergSource: Barclays, Merrill Lynch, JPM, Bloomberg, NEPC

Credit Spread(Basis Points) 06/30/18 09/30/18 |∆|

BC IG Credit 116 100 ‐16

BC Long Credit 174 153 ‐21

BC Securitized 28 28 0

BC High Yield 363 316 ‐47

Muni HY 253 198 ‐55

JPM EMBI 388 362 ‐26

Bank Loans ‐ Libor 303 281 ‐22

CREDIT PERFORMANCE OVERVIEW

63


Credit Performance Overview

• Oil declined 1.2% for the quarter,but is up 41.8% for the year

• Agricultural commodities declinedsubstantially due to robust supplyand trade war-related concerns

• MLP’s increased 6.6%, supportedby rising commodity prices andongoing industry simplification

Q3 Real Assets Market Summary

Source: S&P, NAREIT, Alerian, Bloomberg

Source: NCREIF, Alerian, NAREIT, S&P, Bloomberg Source: Bloomberg, NEPC Calculated as of 09/28/2018

Real Asset Yields 06/30/18 09/30/18

MLPs 8.1% 8.0%

Core Real Estate 4.2% 4.4%

US REITs 4.4% 4.2%

Global REITs 3.7% 3.7%

Global Infrastructure Equities 4.4% 4.5%

Natural Resource Equities 3.5% 3.5%

US 10‐Yr Breakeven Inflation 2.1% 2.1%

Commodity Index Roll Yield 0.1% ‐1.2%

REAL ASSETS PERFORMANCE OVERVIEW

64

Source: Bloomberg, Barclays, Alerian, Nareit, MSCI, JP Morgan, Credit Suisse, Thomson One*Private Equity return represents calendar year pooled IRR and is subject to a one quarter lag

CALENDAR YEAR INDEX PERFORMANCE2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 Q2 July Aug Sep Q3 YTD

S&P 500 26.5% 15.1% 2.1% 16.0% 32.4% 13.7% 1.4% 12.0% 21.8% ‐0.8% 3.4% 3.7% 3.3% 0.6% 7.7% 10.6%

Russell 1000 28.4% 16.1% 1.5% 16.4% 33.1% 13.2% 0.9% 12.1% 21.7% ‐0.7% 3.6% 3.5% 3.4% 0.4% 7.4% 10.5%

Russell 2000 27.2% 26.9% ‐4.2% 16.3% 38.8% 4.9% ‐4.4% 21.3% 14.6% ‐0.1% 7.8% 1.7% 4.3% ‐2.4% 3.6% 11.5%

Russell 2500 34.4% 26.7% ‐2.5% 17.9% 36.8% 7.1% ‐2.9% 17.6% 16.8% ‐0.2% 5.7% 1.9% 4.3% ‐1.5% 4.7% 10.4%

MSCI EAFE 31.8% 7.8% ‐12.1% 17.3% 22.8% ‐4.9% ‐0.8% 1.0% 25.0% ‐1.5% ‐1.2% 2.5% ‐1.9% 0.9% 1.4% ‐1.4%

MSCI EM 78.5% 18.9% ‐18.4% 18.2% ‐2.6% ‐2.2% ‐14.9% 11.2% 37.3% 1.4% ‐8.0% 2.2% ‐2.7% ‐0.5% ‐1.1% ‐7.7%

MSCI ACWI 34.6% 12.7% ‐7.3% 16.1% 22.8% 4.2% ‐2.4% 7.9% 24.0% ‐1.0% 0.5% 3.0% 0.8% 0.4% 4.3% 3.8%

Private Equity* 13.7% 19.7% 7.9% 12.5% 20.6% 12.7% 9.6% 8.3% 19.9% 3.2% ‐ ‐ ‐ ‐ ‐ 3.2%

BC TIPS 11.4% 6.3% 13.6% 7.0% ‐8.6% 3.6% ‐1.4% 4.7% 3.0% ‐0.8% 0.8% ‐0.5% 0.7% ‐1.1% ‐0.8% ‐0.8%

BC Municipal Bond 12.9% 2.4% 10.7% 6.8% ‐2.6% 9.1% 3.3% 0.2% 5.4% ‐1.1% 0.9% 0.2% 0.3% ‐0.6% ‐0.2% ‐0.4%

BC Muni High Yield 32.7% 7.8% 9.2% 18.1% ‐5.5% 13.8% 1.8% 3.0% 9.7% 0.6% 3.1% 0.4% 0.8% ‐0.4% 0.8% 4.4%

BC US Corp High Yield 58.2% 15.1% 5.0% 15.8% 7.4% 2.5% ‐4.5% 17.1% 7.5% ‐0.9% 1.0% 1.1% 0.7% 0.6% 2.4% 2.6%

BC US Aggregate 5.9% 6.5% 7.8% 4.2% ‐2.0% 6.0% 0.5% 2.6% 3.5% ‐1.5% ‐0.2% 0.0% 0.6% ‐0.6% 0.0% ‐1.6%

BC Global Aggregate 2.6% 5.2% 6.4% 1.6% ‐4.0% ‐0.5% ‐3.6% 1.6% 7.5% 1.4% ‐2.8% ‐0.2% 0.1% ‐0.9% ‐0.9% ‐2.4%

BC Long Treasuries ‐12.9% 9.4% 29.9% 3.6% ‐12.7% 25.1% ‐1.2% 1.3% 8.5% ‐3.3% 0.3% ‐1.5% 1.6% ‐3.0% ‐2.9% ‐5.8%

BC US Long Credit 16.8% 10.7% 17.1% 12.7% ‐6.6% 16.4% ‐4.6% 10.2% 12.2% ‐3.8% ‐2.7% 1.5% 0.3% ‐0.6% 1.3% ‐5.2%

BC US STRIPS 20+ Yr ‐36.0% 10.9% 58.5% 3.0% ‐21.0% 46.4% ‐3.7% 1.4% 13.7% ‐4.6% 0.9% ‐2.3% 2.0% ‐4.4% ‐4.7% ‐8.3%

JPM GBI‐EM Glob Div 22.0% 15.7% ‐1.8% 16.8% ‐9.0% ‐5.7% ‐14.9% 9.9% 15.2% 4.4% ‐10.4% 1.9% ‐6.1% 2.6% ‐1.8% ‐8.1%

JPM EMBI Glob Div 29.8% 12.2% 7.3% 17.4% ‐5.3% 7.4% 1.2% 10.2% 10.1% ‐1.7% ‐3.5% 2.6% ‐1.7% 1.5% 2.3% ‐3.0%

CS Leveraged Loan 44.9% 10.0% 1.8% 9.4% 6.2% 2.1% ‐0.4% 9.9% 4.2% 1.6% 0.8% 0.8% 0.4% 0.7% 1.9% 4.4%

CS Hedge Fund 18.6% 10.9% ‐2.5% 7.7% 9.7% 4.1% ‐0.7% 1.2% 7.1% 0.5% 0.1% 0.4% 0.1% ‐ ‐ 1.1%

BBG Commodity 18.9% 16.8% ‐13.3% ‐1.1% ‐9.5% ‐17.0% ‐24.7% 11.8% 1.7% ‐0.4% 0.4% ‐2.1% ‐1.8% 1.9% ‐2.0% ‐2.0%

Alerian MLP 76.4% 35.9% 13.9% 4.8% 27.6% 4.8% ‐32.6% 18.3% ‐6.5% ‐11.1% 11.8% 6.6% 1.6% ‐1.6% 6.6% 5.9%

FTSE NAREIT Eq REITs 28.0% 28.0% 8.3% 18.1% 2.5% 30.1% 3.2% 8.5% 5.2% ‐8.2% 10.0% 0.8% 2.6% ‐2.5% 0.8% 1.8%

65

SHORT-TERM PERFORMANCE SUMMARY

Source: Bloomberg, Standard and Poor's, Russell, MSCI, Barclays, JP Morgan *1 Yr Range: Represents range of cumulative high/low daily index returns for an investment made one year ago

66

Trailing 1‐Year Trailing 3‐Years Trailing 5‐Years Trailing 10‐Years Since Inception

Russell 1000 Growth 26.3% 20.6% 16.6% 14.3% 11.6%

Russell 1000 Value 9.5% 13.6% 10.7% 9.8% 12.1%

MSCI EAFE Growth 5.8% 10.3% 5.6% 6.2% 8.5%

MSCI EAFE Value ‐0.4% 8.1% 3.1% 4.5% 10.9%

MSCI EM Growth ‐3.9% 13.0% 5.1% 6.2% 8.7%

MSCI EM Value 2.3% 11.6% 2.0% 4.5% 9.3%

• While growth has outperformed in the current market regime, there isa case to be made for holding value as well, which has outperformedover the long-term, even with the strong growth rally of the pastdecade– The macroeconomic backdrop of low interest rates, muted volatility, and strong

economic growth combined with low starting valuations has fueled growth’s run

– However, rising rates and the potential for economic disruption indicate a combinationof value and growth will likely provide the best diversification benefit

IS THIS TRUE OUTSIDE THE US AS WELL?

Source: Russell, MSCI, Bloomberg, NEPCInception dates as follows: Russell 1000 – 12/31/1978; MSCI EAFE – 12/31/1974; MSCI EM – 12/29/2000

Data through September 31, 2018

67

INFORMATION DISCLAIMER

• Past performance is no guarantee of future results.

• The goal of this report is to provide a basis for substantiating asset allocation recommendations. The opinions presented herein represent the good faith views of NEPC as of the date of this report and are subject to change at any time.

• Information on market indices was provided by sources external to NEPC. While NEPC has exercised reasonable professional care in preparing this report, we cannot guarantee the accuracy of all source information contained within.

• All investments carry some level of risk. Diversification and other asset allocation techniques do not ensure profit or protect against losses.

• This report is provided as a management aid for the client’s internal use only. This report may contain confidential or proprietary information and may not be copied or redistributed to any party not legally entitled to receive it.

68

It is important that investors understand the following characteristics of non-traditional investment strategies including hedge funds and private equity:

1. Performance can be volatile and investors could lose all or a substantial portion of their investment

2. Leverage and other speculative practices may increase the risk of loss3. Past performance may be revised due to the revaluation of investments 4. These investments can be illiquid, and investors may be subject to lock-ups

or lengthy redemption terms5. A secondary market may not be available for all funds, and any sales that

occur may take place at a discount to value6. These funds are not subject to the same regulatory requirements as

registered investment vehicles7. Managers may not be required to provide periodic pricing or valuation

information to investors8. These funds may have complex tax structures and delays in distributing

important tax information9. These funds often charge high fees10.Investment agreements often give the manager authority to trade in

securities, markets or currencies that are not within the manager’s realm of expertise or contemplated investment strategy

ALTERNATIVE INVESTMENT DISCLOSURES

69

Documents

QUARTER ENDING SEPTEMBER 30, 2018 …...Source: Bloomberg, Barclays, S&P, Russell, MSCI, JP Morgan, Credit Suisse, Alerian, NAREIT Equity Sep‐18 Q3 YTD 1 YR 3 YR 5 YR 10 YR MSCI