Tactical Allocation

Although historical long-term risk, return, and correlation data may be a good proxy for long-term expectations, WA believes there are periods where it is prudent to modify the investment mix in response to current or expected market conditions. WA makes minor adjustments to base allocations when specific asset classes or styles are expected to perform well vis-à-vis their historical levels or alternative investment options. WA Investment Committee (or "IC") meets every two weeks, more frequently if needed, to discuss the firm’s stance on the global economy and the financial markets. The magnitude of tactical allocations is determined by the IC. In order to evaluate the impact of any tactical decisions, the IC adjusts the short-term risk and return expectation of the various asset classes. The portfolios are subsequently optimized using the current short-term risk and return estimates. Existing portfolios are compared to the compositions of the newly optimized portfolios and the IC determines if and by how much portfolios are adjusted.