Institutional Investing at a

Crossroads: Big Challenges,

New Solutions & Potential Risks

Dave Nadig, Moderator President, ETF Analytics IndexUniverse Paul Bosse, Presenter Principal The Vanguard Group Lee Partridge, Presenter Chief Investment Officer Salient Partners Robert Trumbull, Presenter Vice President, Institutional ETF Specialist State Street Global Advisors

Institutional Investing at a

Crossroads: Big Challenges,

New Solutions & Potential Risks

Dave Nadig, President, ETF Analytics IndexUniverse

Robert Trumbull, Vice President, Institutional ETF Specialist State Street Global Advisors

Paul Bosse, Principal The Vanguard Group

Institutional Investing at a

Crossroads: Big Challenges,

New Solutions & Potential Risks Lee Partridge,

Chief Investment Officer Salient Partners

What’s an “Institution” Anyway?

Correlations

S&P 500, Barclays Aggregate, GSCI, CPI; Weekly, 10 years ending 12/31/2012

Stocks Commodities Bonds Inflation

Stocks 1 0.425 0.041 0.065

Commodities 0.425 1 -0.026 0.401

Bonds 0.041 -0.026 1 -0.259

Inflation 0.065 0.401 -0.259 1

Correlations: GLD vs. SPY

Monthly, 10 years ending 4/18/2013

Diversification vs. Volatility

Matching the portfolio to the need

Beyond Total Return

Liability Driven Investing

Movement to Risk-Based Allocations Risk vs. Dollar allocations

Diversification

Index Suite Indexes mimicking Portfolio Strategy

Ignore Liability, Focus on Asset Classes

Behavior vs. Efficient Market Theory Indexes

Alternative Exposure

Market Risk

Are ETFs the solution?

Liquidity Risk

Hedging Tail Risk

Gold as an asset class?

What about CDS ownership?

Should my hedging be direct?

Or consultant driven?

The Search For Yield Is yield enough? Or is Total Return key?

Big Bucket Trends

The Return of CDOs?

Thank You. Questions?

Institutional Investing at a

Crossroads: Big Challenges,

New Solutions & Potential Risks

Dave Nadig, Moderator President, ETF Analytics IndexUniverse Paul Bosse, Presenter Principal The Vanguard Group Lee Partridge, Presenter Chief Investment Officer Salient Partners Robert Trumbull, Presenter Vice President, Institutional ETF Specialist State Street Global Advisors