Tactical ETF Portfolio Shift Commentary 02/11/2011

We are reducing exposure to emerging market equities as we expect conditions to remain challenged in light of policy response to inflationary concerns and geopolitical uncertainty in the Middle East. Overall, we still believe in the fundamental story of emerging markets and expect returns to ultimately recover vs. the developed markets so we are retaining the bulk of our allocation to that segment. We are shifting the proceeds to domestic small caps which we believe offer better return prospects near-term vs. emerging markets and as a higher beta sector, will capture the bulk of the upside when emerging markets recover.