Market Update

The Economy

• Further setbacks in the form of disappointing U.S. employment data and concerns about government bonds in several European countries resulted in a cautious tone for the market, which continues to reflect our view that the road to recovery will likely be bumpy.
• In the U.S., the Institute for Supply Management (ISM) survey on manufacturing activity showed month-over-month gains.
• U.S. non-manufacturing activity was flat month over month, according to ISM.
• U.S. aggregate job losses for December were revised upward from a loss of 85,000 to a loss of 150,000. However, a gain of 11,000 jobs in the manufacturing sector was a positive development.
• The U.S. unemployment rate decreased to 9.7%.
• The Bank of England kept rates unchanged at 0.5% and decided not to extend its bond-buying programs. These announcements resulted in negative investor sentiment, as uncertainty still looms regarding the economic effects of taking away these accommodative policies.
• The European Central Bank voted to keep interest rates at a record low of 1%.
• German industrial production fell unexpectedly in December.

Economic Calendar

• Wholesale inventories will be released February 9.
• The trade balance and MBA mortgage applications will be released February 10.
• Initial jobless claims, continuing claims, retail sales and business inventories will be released February 11.
• The University of Michigan consumer confidence survey will be released February 12.

Stocks

• Global markets fell for the week on gloomy U.S. employment news and increasing fears about potential defaults on European government debt. Investors began a flight to safety, focusing on more defensive assets.
• In the U.S., growth stocks outperformed their value counterparts, as Financials have a larger weight within the value-specific index.
• In the UK, equity markets fell; Financials, Materials and Energy had the largest declines. Telecommunications posted the only positive sector return.
• In Europe ex-UK, equity markets fell by a larger amount than they did in the UK due to the government debt crises of Portugal, Ireland, Greece and Spain. Information Technology, Healthcare and Materials performed best, while Financials, Energy and Consumer Services lagged.
• Gold and oil both declined for the week, and the U.S. dollar strengthened.

Bonds

• Global bond markets were flat for the week on uncertainties surrounding the global economic recovery.
• U.S. and UK government bonds outperformed European bonds on heightened worries about government debt in several Euro- zone countries.
• High-yield and corporate bonds underperformed the broader market, as investors avoided riskier assets on weak economic news.
• Credit-default swaps on the sovereign debt of Portugal, Ireland, Greece and Spain rose to record highs, increasing fears of default.

Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Diversification may not protect against market risk. There are risks involved with investing, including loss of principal.

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. This information is for educational purposes only.

SEI Investments Management Corporation (SIMC) is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co (SIDCO). SIMC and SIDCO are wholly owned subsidiaries of SEI Investments Company.

To determine if the Fund(s) are an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Fund’s prospectus, which can be obtained by calling 1-800-DIAL-SEI. Please read it carefully before investing.