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International Equity Index

as of 12/31/17

Fund Commentary

In the fourth quarter of 2017, the MSCI EAFE® Index returned 4.23%. International equities underperformed U.S. equities, as measured by the S&P 500® Index, which returned 6.64% in the fourth quarter.

The top-performing sectors over this time period were energy and materials, returning 10.05% and 8.50%, respectively. Utilities and health care were the worst-performing sectors for the quarter, with returns of -0.93% and -0.03%, respectively.

From a regional perspective, exposure to Singapore and Japan aided the Fund's performance with returns of 10.10% and 8.49%, respectively. Meanwhile, Sweden and Finland returned -3.71% and 2.55%, respectively, thus diminishing the Fund's returns.

For the fourth quarter, the International Equity Index Fund posted a total return of 3.83% compared with 4.23% for the Fund's benchmark, the MSCI EAFE® Index. Developed ex U.S. markets continued the strong performance during the 4th quarter, led by Japan. Strong economic growth has been supported by low global interest rates, modest inflation and stable labor markets. Manufacturing and industrial production in Japan and the eurozone continued to indicate economic improvements and future growth. The geopolitical events, including the aggressive posturing of North Korea, Saudi Arabia upheaval and continued fighting across the Middle East, has not deterred investors nor significantly changed the risk profile of the equity markets. Oil rose to almost touch $60 a barrel to end the quarter; however investors remained focused on the global growth story.

Not FDIC insured | May lose value | No bank guarantee

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