Moderate Portfolio

Tactical Asset Allocation

Strategic Asset Allocation

Dynamic Advisors Program

Conservative Portfolio

Moderate Portfolio

Growth Portfolio

Aggressive Growth Portfolio

MODERATE PROGRAM
Willing to accept more risk than the Conservative investor, but probably not willing to accept much short-term downside risk. Seeks a balance between Capital Preservation and Growth.

U.S. Large Cap Equity	35	%
U.S. Small Cap Equity	9	%
International Equity	8	%
Intermediate-Term U.S. Gov't./Corp Bonds	29	%
Cash	19	%

Expected Return 1	8.18	%
Standard Deviation 2	7.60	%

% Equity	52	%
% Fixed Income	48	%

Note: All values in percent.

The Moderate Investor	The moderate investor is willing to accept more risk than the conservative investor, but is probably not willing to accept the short-term downside risk associated with achieving a long-term return dramatically above the inflation rate.
Portfolio:	Moderate Growth
Appropriate Time Horizon:	Five years or more
Portfolio Characteristics:	Moderate volatility
	Seeks to have a 75% chance of achieving a non-negative return over a 1-year time frame and at least a 95% chance over a 3-year holding period. These constraints are much looser than for the conservative portfolio, but still account for moderate short-term loss aversion.
	Seeks to have at least a 75% chance of keeping pace with expected inflation over a 3-year holding period and 90% chance over a 5-year span.*
	Seeks to achieve a return that outpaces expected inflation by approximately 6% over a 20 year holding period. The actual performance of a given asset allocation model may be greater or less than the projected return.

*The criteria is the same for all investors. It is assumed that a high probability of achieving the minimal investment goal of keeping pace with inflation is desired by all investors over this typical period of investment performance evaluation.

1. The Expected Return for a particular investment objective is a weighted average of the expected returns of each asset class. The expected return of a particular asset class is calculated by adding historical risk premiums associated with that asset class to the current risk free rate, which is the yield on a 20-year U.S. Treasury bond, as reported in the Wall Street Journal on May , 1999. Weighting of each asset class may change in response to changes in market conditions as determined by Ibbotson Associates.

2. The Expected Standard Deviation is a measure of market volatility. It is calculated by taking the past performance of the various asset classes and determining the range of possible future performances. A probability is attached to the chances of the portfolio performance deviating from the expected return. The greater the probability, the greater the risk.