An index is a group of securities with similar investment characteristics combined to create a
benchmark against which performance of a specific security is measured. An index does not represent
any single asset but rather an entire group of assets. One cannot invest directly into any index.
Indices are unmanaged and returns assume the reinvestment of all dividends. Past performance is no
guarantee of future results.
A model portfolio is made up of a mix of asset classes and those asset classes are tied to appropriate
A recommended portfolio is derived from the completion of a risk tolerance questionnaire with scoring
that is associated to a model portfolio.
Simple average, equal to the sum of all values divided by the number of values.
Rate of Return:
The average annual return for the number of years shown.
A statistical measure of the volatility based on the distribution of a set of data from its mean (average value). Example: A portfolio with an average return of 10% and a standard deviation of 15% would return a result between -5% and +25% the majority of the time (68% probability or 1 standard deviation), almost all the time the return would be between -20% and +40% (95% probability or twice the standard deviation). If there were 0 standard deviation then the result would always be 10%. Generally, more aggressive portfolios have a higher standard deviation and more conservative portfolios have a lower standard deviation.
Large Cap Growth -
The benchmark used for Large Cap Growth is the Russell 1000 Growth Index. This index measures
the performance of the large-cap growth segment of the U.S. equity universe. It includes those
Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Large Cap Value -
The benchmark used for Large Cap Value is the Russell 1000 Value Index. This index measures the
performance of the large-cap value segment of the U.S. equity universe. It includes those Russell
1000 companies with lower price-to-book ratios and lower expected growth values.
Mid Cap -
The benchmark used is the Russell Midcap Index which measures the performance of the mid-cap
segment of the U.S. equity universe. The Russell Midcap Index is a subset of the Russell 1000®
Index. It includes approximately 800 of the smallest securities based on a combination of their
market cap and current index membership.
Small Cap -
The benchmark used is the Russell 2000 Index. This index measures the performance of the
small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell
3000® Index represents approximately 8% of the total market capitalization of that index. It includes
approximately 2,000 of the smallest securities based on a combination of their market cap and
current index membership.
International Stocks -
The benchmark used for International Stocks is the MSCI EAFE Index: This index tracks non-U.S.
stock funds (EAFE refers to Europe, Australasia, and Far East). The EAFE Index is an aggregate of
21 individual country indexes that collectively represent many of the world’s major markets.
Taxable Debt Asset Classes:
Aggregate Bonds -
The benchmark used for Aggregate Bonds is Barclays Capital Aggregate Index. This index is a
Market-value-weighted performance benchmark for investment-grade fixed-rate debt issues,
including government, corporate, asset-backed, and mortgage-backed securities, with maturities of
at least one year.
Aggregate Muni -
The benchmark used is the Barclays Municipal Bond Index. This index is a broad-based, total return
index. The Index is comprised of 8000 actual bonds. The bonds are all investment-grade, fixed-rate,
long-term maturities (greater than two years).
Other Asset Classes:
Cash Equivalents -
The benchmark used for Cash Equivalents is the Citigroup U.S. Domestic 3 Month Treasury Bill
Index which is government guaranteed and offers a fixed rate of return. Return and principal of
stocks and bonds will vary with market conditions. Treasury bills are less volatile than longer-term
fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S.
Alternative Investments -
The benchmark used for Alternative Investments is the Credit Suisse/Tremont Hedge Fund Index.
This index is broadly diversified, encompassing 481 funds across ten style-based sectors, and
representative of the entire hedge fund industry.
Domestic REITs (Real Estate Investment Trusts) -
The benchmark used for Domestic REITS is the FTSE NAREIT Equity REIT Index. This index is a
Market-capitalization-weighted index that includes healthcare and net lease REITs but excludes real
estate operating companies. There is no minimum size or liquidity requirement for an equity REIT to
be included in this index.