SEI Systematic Core Strategies: Information For Investors

S&P 500® Index Return

16.26%

-100%

-50%

50%

Sunrise in busy container terminal in Rotterdam, Netherlands.

The future is here. Like most investors, you crave personalization, control and transparency.

what is direct indexing? learn more

+ Important Information

Independent Advisor Solutions by SEI is a strategic business unit of SEI Investments Company (SEI).Investment services are provided by SEI Investments Management Corporation (SIMC). SIMC is a wholly owned subsidiary of SEI. Your financial advisor is not affiliated with SEI or its subsidiaries. For those portfolios of individually managed securities, SIMC makes recommendations as to which manager will manage each asset class. SIMC may recommend the termination or replacement of a money manager and the investor has the option to move the account assets to another custodian or to change the manager as recommended.Please see SIMC’s Form ADV Part 2A (or the appropriate wrap brochure) for a full disclosure of the fee schedule Tax and Tax Management Techniques Disclosures – SIMC does not represent in any manner that the tax consequences described as part of its tax-management techniques and strategies will be achieved or that any of SIMC’s tax-management techniques, or any of its products and/or services, will result in any particular tax consequence. The tax consequences of the tax-management techniques, including those intended to harvest tax losses, and other strategies that SIMC may pursue are complex and uncertain and may be challenged by the IRS. Neither SIMC nor its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax, penalties and/or interest which may be imposed by the IRS or any other taxing authority; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor. Accordingly, Clients should confer with their personal tax advisors regarding the tax consequences of investing with SIMC and engaging in the tax-management techniques described herein (including the described tax loss harvesting strategies) based on their particular circumstances.Clients and their personal tax advisors are responsible for how the transactions conducted in an account are reported to the IRS or any other taxing authority on the Client’s personal tax returns. SIMC assumes no responsibility for the tax consequences to any Client of any transaction. There are risks involved with investing, including loss of principal. There is no assurance the goals of the strategy discussed will be met nor that risk can be managed successfully. Tracking error risk is the risk that the performance of a portfolio designed to track an index may vary substantially from the performance of the benchmark index it tracks as a result of cash flows, portfolio expenses, imperfect correlation between the portfolio’s and benchmark’s investments and other factors. This risk is magnified when sampling a benchmark index as the strategy may not track the return of its benchmark index as well as it would have if the strategy purchased all of the securities in its benchmark index. Index returns are for illustrative purposes only and do not represent actual investment performance. Index returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Environmental, social and governance (ESG) guidelines may cause a manager to make or avoid certain investment decisions when it may be disadvantageous to do so. This means that these investments may underperform other similar investments that do not consider ESG guidelines when making investment decisions. In all cases, a Client may, at any time, impose reasonable restrictions on the management of a Client’s account. Such restrictions may include one or more “screens” offered by SIMC that restrict or permanently remove securities from the Client’s selected strategy on the basis of ESG or other criteria. SEI has selected and engaged Institutional Shareholder Services Inc. and MSCI ESG Research LLC, the “vendors” to provide the selected screens. The vendors can vary from other ESG vendors and advisers with respect to its methodology for constructing screens, including with respect to the factors and data that it collects and applies as part of its process. As a result, the vendors’ screens may differ from or contradict the conclusions reached by other ESG vendors or advisers with respect to the same issuers. A client restriction, including the selection of a screen, will likely contribute to performance deviations from the strategy, including underperformance. Any securities mentioned herein are intended only as examples of specific sector and/or industry information and are not intended to constitute an investment recommendation.

By harnessing the power of technology, the Strategies seek to modernize the traditional structure of passive investments like index mutual funds and exchange traded funds (ETFs); instead directly purchasing a subset of the component stocks within a broad market index to bring greater transparency to your investment solutions and a cutting-edge strategy defined by your priorities.

Investing is personal. Today, perhaps more than ever, investors want their investment portfolio to reflect their own image – their own goals, priorities and causes and interests that they care about. And they want to do so in a tax-efficient manner. These objectives don’t need to be mutually exclusive.

Why Personalization Matters

What is Direct Indexing?

Direct indexing refers to tracking the performance of an index by buying a sample of individual stocks instead of an ETF or mutual fund.

https://www.justinvest.com/2020/05/modern-direct-indexing/

the basics

ETFs and Index Mutual Funds

Single pre-packaged, pooled fund comprised of underlying securities

Transparency

Existing individual stock holdings cannot be incorporated into pooled fund

Transition Management

Investors taxed on capital gains of the fund, regardless of how long the fund was held, and do not benefit from losses within the fund

Tax-Efficiency

Pooled funds are shared with thousands of other investors, and pre-packaged with no control over the companies within

Impact Investing

Only tax lots of the full fund can be donated

Charitable Giving

SEI Systematic Core Strategies

Basket of individual securities, so you hold the shares of the companies in which you invest

Existing individual stock holdings – if represented in the index – may be used to build the Strategy, helping to minimize tax costs

Tax-loss harvesting at the individual stock level and investor-specific cost basis both seek to improve after-tax return

Define your values or beliefs and screen out individual companies that don’t support those priorities

Most highly-appreciated tax lots of individual securities can be donated – seeking to maximize wealth for future actions

• Individual stock holdings

• Seeks to track performance of index

Tax-Efficiency in Action

By using individual stocks, each of those component securities provides potential for tax benefits.

100%

Individual components at a loss

203 (40.2%)

Individual components at a gain

302 (59.8%)

CALENDAR YEAR 2020 RETURNS

Actual S&P 500 Index Return

making a bigger impact

Sustainable investing is, at its core, the alignment of investment objectives with social and environmental considerations.

YOU'RE NOT ALONE

As with any investment concept, it is critical to understand the details before making investment decisions. Your financial advisor can work with you to create a sound investment strategy that aligns with your objectives and goals, and brings these cutting-edge concepts to life for you.

Building better financial futures, together. Talk to your advisor to learn more.

Tax management is only applied to taxable accounts

Chart and data as of 12/31/2020. The S&P 500® Index is an unmanaged market-capitalization-weighted index generally considered to be representative of U.S. equity market activity. The index consists of 505 stocks representing leading industries of the U.S. economy. Source: BarChart.

AAPL

MSFT

JPM

AMZN

JNJ

GOOGL

TSLA

The SEI Systematic Core Strategies (“the Strategies”) were designed with your distinct needs in mind, taking passive investing a step forward by providing a better way to personalize your portfolio through individual stock ownership.

Investing directly in shares of some of the individual stocks – rather than the pooled structure of a mutual fund or ETF – can offer greater control over gains and losses throughout the year, both during the transition of a portfolio as well as through its ongoing daily management — and you can still seek to maintain the risk-return profile of the index you are attempting to match. What's more, optimizing tax outcomes becomes clearer, minimizing the chances of receiving unanticipated tax bills for capital gains. Finally, personalization features allow you to build a portfolio that reflects your individual values and beliefs and avoid investing in companies that don’t.

• Single holding / ticker

• Seeks to track performance of index

In owning the shares of a company directly, the practice of tax-loss harvesting looks opportunistically for any single stock that declines in value and then sells those shares, books the loss, and buys the stock of a similar company--and in doing so can create an asset in the form of a “tax shield” for profits in other areas of your portfolio. Why is it important to look at the individual components? Because even in “up” markets, market swings can occur daily and the performance of the individual stocks may vary widely.

Many investors use terms such as values-based investing, impact investing, socially responsible investing (SRI), or environmental, social and governance (ESG) investing. All may be synonymous with sustainable investing, but they do not all reflect the same approach. Regardless of the approach, when you own individual stocks, you gain a clearer picture into the companies in which you are investing and can prioritize accordingly.

Individual Security Screening

Catholic Values*

Baptist Values*

Tobacco

Nuclear Power

Military

Gambling

Firearms

Contraceptives

Bioethics / Stem Cell*

Alcohol

Adult Entertainment

Abortion & Abortifacient

Fossil Fuel*

Sharia Values**

Environment

Excludes companies with involvement in abortifacient manufacturing, emergency contraceptive manufacturing or abortion services.

Excludes companies that derive a significant portion of their revenues from involvement in adult media, sexually explicit internet operations, adult software or video games or sexually explicit live performances.

Excludes companies that derive a significant portion of their revenues from involvement in the manufacturing, branding, wholesale distribution or retail sales of alcohol. Companies that derive a portion of their revenues from the production or sale of consumable or non-consumable alcohol inputs are also excluded.

Excludes companies with involvement in embryonic stem-cell or fetal-tissue research. Companies with involvement in adult, umbilical or placenta stem-cell research (or stem-cell research supplies or services) are also excluded.

Excludes companies with involvement in emergency contraceptive manufacturing, non-emergency contraceptive manufacturing or contraceptives and abortifacient marketing.

Excludes companies that fall within the bottom 5% of ratings for categories related to the environment, which may include: climate change, environmental management, environmental performance, industry involvement, environmental procedures, sustainable timber or programs and codes of conduct.

Excludes companies with involvement in the manufacture of firearms or small-arms ammunition for non-military markets.

Excludes companies with involvement in the production, distribution, services, and exploration of fossil fuels.

Excludes companies that derive a significant portion of their revenues from gambling operations or online gaming.

Excludes companies with involvement in the manufacture of conventional military weapons, nuclear weapons or landmines and cluster munitions.

Excludes companies with involvement in nuclear-power generation or nuclear-power resale.

Excludes companies that derive a significant portion of their revenues from the manufacturing, branding or retail sales of tobacco, along with companies that are involved in the manufacture of materials intended primarily for use in tobacco products.

Excludes companies with significant involvement in the following issues: adult entertainment; alcohol; gambling; life/choice; and tobacco.

Based on the U.S. Conference of Catholic Bishops investment guidelines. Excludes companies with significant involvement in the following issues: abortion; adult entertainment; financial institutions with a Community Reinvestment Act rating below “Satisfactory” in helping meet the credit needs of its community, including low- and moderate-income neighborhoods; bioethics/ stem cell and human cloning; contraceptives; defense and weapons; and racial and gender discrimination.

Based on the AAOIFI Sharia standards for screening companies. Excludes companies with significant involvement in the following issues: alcohol; adult entertainment; defense; gambling; pork products; and tobacco. Companies within the following industries will also be screened out: cinema/broadcasting; conventional financial services; conventional insurance companies; hotels; interest income; and music.

+ Important Information

*These screens are not available for use in Loomis, Sayles & Company portfolios **These screens are not available for use in Loomis, Sayles & Company portfolios or SEI Fixed Income Strategies

Core Strategies

systematic

SEI

For illustrative purposes.

+ Important Information

Chart and data as of 12/31/2020. Source: BarChart. Companies shown solely to illustrate various returns over the 2020 calendar year and are not intended to constitute an investment recommendation. Index returns are for illustrative purposes only and do not represent actual investment performance. Index returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.