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Global Sustainability Index

as of 12/31/17

Fund Commentary

In the fourth quarter of 2017, the MSCI World ESG Leaders Index returned 5.03%. ESG equities underperformed developed markets, represented by MSCI World Index, which returned 5.51% in the fourth quarter.

The top-performing sectors over this time period were information technology and materials, returning 9.29% and 6.81%, respectively. Health care and utilities were the worst-performing sectors for this quarter, with returns of -0.35% and 0.80%, respectively.

The top-performing countries over this time period were Singapore and Israel, returning 10.25% and 9.56%, respectively. Sweden and Portugal were the worst-performing countries for this quarter, with returns of -4.52% and -1.97%, respectively.

The Global Sustainability Index Fund returned 4.87% during the fourth quarter. Its benchmark, the MSCI World ESG Leaders Index returned 5.03%. Global equity returns have remained strong through the fourth quarter of 2017. U.S. equities in the fourth quarter of 2017 continued to rally off of the strong first three quarters of the year. The S&P 500® Index posted, for the first time ever, positive performance in each of the 12 months of a calendar year, pushing the index to new all-time highs for the quarter, and keeping volatility near all-time lows. Market participants continued to shrug off geopolitical turmoil in North Korea and the Middle East, and instead focused on continued global growth. The fourth quarter also saw the Federal Reserve begin the process of unwinding their balance sheet while keeping with intentions for continued gradual interest rate increases. These announcements, coupled with the late year passing of U.S. tax reform, lead to an increase in market optimism and interest rates, benefitting equities on the whole. Developed ex U.S. markets continued the strong performance during the fourth quarter, led by Japan, but underperformed U.S. equities. 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 continue to indicate economic improvements and future growth.

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