Tax drag: Seeing is believing

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Expense ratios are as of the most recent prospectus (3/1/2022) or supplemental prospectus (9/7/2022).

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^⫲The Net Annual Operating Expense Ratio for the Tax-Managed U.S. Large Cap Fund may be less than the Total Operating Expense Ratio and represents the actual expenses expected to be borne by shareholders after the application of:

• For M Share Class, a contractual transfer agency fee or advisory fee waiver through February 28, 2023;
• For A, C, M, and S Share Classes, a contractual cap and reimbursement on expenses through February 28, 2023;

These contractual agreements may not be terminated during the relevant periods except at the Board of Trustee's discretion. Details of these agreements are in the current prospectus. Absent these reductions, the fund's return would have been lower.

IMPORTANT: The projections or other information generated by the Tax Impact Comparison Tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.

Tax-adjusted returns is defined as after-tax returns that are calculated using the historical highest individual federal marginal income tax rates, as well as the 3.8% net investment income tax, and do not reflect the impact of state and local taxes. Returns shown are pre-liquidation returns. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. Returns After Taxes on Distributions may be the same as Returns Before Taxes for the same period if there were no distributions for that period.

Tax-cost ratio is defined as Morningstar’s Tax Cost Ratio, which measures how much a fund's annualized return is reduced by the taxes investors pay on distributions. Investors then must pay taxes on distributions during the year they were received. Like an expense ratio, the tax cost ratio is a measure of how one factor can negatively impact performance. For example, if a fund had a 2% tax cost ratio for the three-year time period, it means that on average each year, investors in that fund lost 2% of their assets to taxes. If the fund had a three-year annualized pre-tax return of 10%, an investor in the fund took home about 8% on an after-tax basis. (Because the returns are compounded, the after-tax return is actually 7.8%.)

MORNINGSTAR CATEGORY DEFINITIONS:

Large-blend portfolios are fairly representative of the overall U.S. stock market in size, growth rates, and price. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large-cap. The blend style is assigned to portfolios where neither growth nor value characteristics predominate. These portfolios tend to invest across the spectrum of U.S. industries, and owing to their broad exposure, the portfolios' returns are often similar to those of the S&P 500 Index.

Total Return Percentile Rank, Morningstar Category: Percentile rank is a standardized way of ranking items within a peer group, in this case, funds with the same Morningstar category. The observation with the largest numerical value is ranked one; the observation with the smallest numerical value is ranked 100. The remaining observations are placed equal distance from one another on the rating scale. Note that lower percentile ranks are generally more favorable for returns (high returns), while higher percentile ranks are generally more favorable for risk measures (low risk).

*U.S. Equity: Morningstar U.S. Equity Universes average.  Morningstar’s tax cost ratio assumes the highest possible applicable tax rates, including the 3.8% net investment income tax. Many investors are not subject to the highest rates. Note that tax drag calculations only apply to taxable accounts.

Methodology for Universe Construction:

• Average of Morningstar’s Tax Cost Ratio for universes as defined.
• Averages calculated on a given category. For example, average reflects the arithmetic average of the Morningstar Tax Cost Ratio for the universe/category as listed. Data includes all share classes
• Large Cap/Small Cap determination based upon Morningstar Category.
• If fund is indicated by Morningstar as passive or an ETF, the fund is considered to be passively managed. Otherwise, the fund is considered to be actively managed.
• Tax Drag: Morningstar calculated Tax Cost Ratio.
• Morningstar Categories included:
  U.S. Equity: US Fund Large Blend, US Fund Large Value, US Fund Large Growth, US Fund Mid-Cap Blend, US Fund Mid-Cap Value, US Fund Mid-Cap Growth

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