Market Update

The Economy

• Reports of improving economic conditions created a more positive tone for the week, in line with our view that the economy should continue its recovery, albeit at a slow and uneven pace.
• U.K. producer prices rose in February by the largest amount since December 2008.
• European Union (EU) officials continued to work on a plan to extend financial aid to Greece.
• The European Central Bank decided to remove some emergency lending measures put in place during the financial crisis but left the interest rate it uses to lend to banks at the record-low level of 1%.
• German factory orders had robust gains in January, which more than offset the monthly decline in December 2009.
• The U.S. Federal Reserve issued its Beige Book report (an anecdotal report of economic characteristics across all regions in the U.S.), which showed that the economy continues to strengthen.
• The U.S. Institute for Supply Management Manufacturing Index rose to 58.4 in January from 54.9 in December, marking a sixth consecutive increase. A reading above 50 indicates expansion.
• U.S. labour markets lost 36,000 jobs in February, which was fewer than expected. The unemployment rate remained at 9.7%.
• The U.S. housing market still showed signs of weakness, as pending sales of existing homes fell 7.6%.
• U.S. retail sales for February were better than forecast, increasing 3.7% for stores open at least a year.

Stocks

• Global markets had robust gains on positive economic data and news that the EU is discussing plans to help Greece.
• In the U.K., Materials led, while Utilities, Financials and Healthcare lagged.
• In Europe, Financials and Consumer Services led, while Consumer Staples, Utilities, Healthcare and Telecommunications lagged.
• In the U.S., growth stocks outperformed their value counterparts, and small company stocks outperformed their large company brethren. Materials led the way, while Telecommunications lagged.

Bonds

• Global bond market prices were flat as investors regained their risk appetites, focusing on equities and bonds perceived to be riskier.
• Global government bonds and corporate bonds were flat for the week.
• Bonds perceived to be riskier, such as high-yield (below-investment-grade) and emerging market debt, rallied on the more upbeat global economic outlook as well as the EU’s continued effort to help Greece tackle its government debt issues.
• Greece’s bond sale, which will pay higher interest rates to its buyers to compensate for the additional risk of holding the debt, was successful as demand for the bonds exceeded supply.

Important Information:

Past performance is not a guarantee of future performance. Investment in the range of SEI’s Funds is intended as a long-term investment. The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested. Additionally, this investment may not be suitable for everyone. If you should have any doubt whether it is suitable for you, you should obtain expert advice. No offer of any security is made hereby. Recipients of this information who intend to apply for shares in any SEI Fund are reminded that any such application may be made solely on the basis of the information contained in the Prospectus. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.

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SEI sources data directly from the following vendors: Factset, MSCI Barra, Russell, TOPIX, FTSE, Barclays Capital and Merrill Lynch. Where appropriate, returns in base currencies are converted to the relevant currency using WM Reuters 4pm Spot rates.