Issue link: https://read.uberflip.com/i/1490963
For existing institutional investor client use only. Not for public distribution. The information contained herein is confidential and proprietary to SEI and is not to be reproduced or made available in any form to any persons without the express prior written consent of SEI. 4 ©2023 SEI How we create probability distributions and what they mean • The probability distribution graphs and/or tables that follow are meant to provide an overview of the range of possible outcomes for a given variable (e.g. returns, expense) for a given asset allocation. • The probability distributions are generated using SEI's proprietary modeling tool and simulated capital market behavior. • Capital market behavior is simulated for 1,000 possible scenarios based on expected performance of each asset class and reflecting current economic conditions. Capital market assumptions such as return, standard deviation and covariances are inputs into this process, combining with model parameters to create market scenarios. • We use these 1,000 capital market scenarios to create 1,000 output scenarios for each variable being considered. • A 90% confidence interval should be interpreted as 90% of the projected output variables, falling between the 5% and 95% results, based on SEI Capital Market Assumptions. • This projection is hypothetical in nature, does not reflect actual investment results and is not a guarantee of future results. About capital market assumptions • SEI Investments Management Corporation develops forward-looking, long-term capital market assumptions for risk, return and correlations for a variety of global asset classes, currencies, interest rates, and inflation. • These assumptions are created using a combination of historical analysis, future market environment expectations and by applying our own judgment. In certain cases, alpha and tracking error estimates for a particular asset class are also factored into the assumptions. • We believe this approach is less biased than using pure historical data, which may be affected by unsustainable trends or permanent material shifts in market conditions. 95 th percentile: 95% of outcomes are less than or equal to this value 5 th percentile: 5% of outcomes are less than or equal to this value 50 th percentile: 50% of outcomes are greater than this amount, and 50% are less $ Millions Distribution of probable outcomes 95 th Percentile Median (50 th Percentile) 5 th Percentile 75 th Percentile 25 th Percentile 22 20 18 16 14 12 10 8 6 4 2 0