IFA Index Portfolio 50: Sea Green

Moderate: Suitable for investors who have at least 8 years before needing approximately 20% of their investments and are willing to accept a moderate degree of volatility in order to achieve moderate portfolio growth.

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Below are IMPLEMENTATIONS of the IFA Index Portfolios utilizing the appropriate funds. Returns will vary from the Index Portfolios.

Diversified
Index Managers

IFA Tax Hybrid Implementation Portfolio

The following percentage split is based on 60% taxable, 30% traditional IRA, and 10% Roth IRA. Please call an Index Funds Advisor to discuss your situation.

General Asset Class Allocation		Specific IFA Index Allocation		Combined Taxable and Tax Deferred/Exempt Account Allocation (Fund Symbols)			Number of Holdings**	Wtd Avg Mkt Cap (millions)**	Wtd Avg Book-to -Market**
General Asset Class Allocation		Specific IFA Index Allocation		Taxable	Tax- Deferred /Exempt	Mutual Funds	Number of Holdings**	Wtd Avg Mkt Cap (millions)**	Wtd Avg Book-to -Market**
24%	US Large	12.00%	IFA US Large Company Index	12.00%		DFA Tax-Managed U.S. Equity (DTMEX)	2,571	$91,131	0.49
24%	US Large	12.00%	IFA US Large Cap Value Index	12.00%		DFA Tax-Managed US Marketwide Value (DTMMX)	1,239	$60,695	0.8
12%	US Small	6.00%	IFA US Small Cap Index	6.00%		DFA Tax-Managed U.S. Small Cap (DFTSX)	2,022	$1,315	0.61
12%	US Small	6.00%	IFA US Small Cap Value Index	6.00%		DFA Tax-Managed U.S. Targeted Value (DTMVX)	1,532	$2,381	0.85
6%	Real Estate	6.00%	IFA Global REIT Index		6.00%	DFA Global Real Estate Securities (DFGEX)	338	$12,100	0.57
12%	International	6.00%	IFA International Value Index	6.00%		DFA Tax-Managed International Value (DTMIX)	510	$44,890	1.07
		3.00%	IFA International Small Company Index	2.00%	1.00%	DFA International Small Company (DFISX)	4,551	$1,737	0.8
		3.00%	IFA International Small Cap Value Index		3.00%	DFA International Small Cap Value (DISVX)	2,105	$1,758	1.28
6%	Emerging Markets	1.80%	IFA Emerging Markets Index		1.80%	DFA Emerging Markets (DFEMX)	998	$44,211	0.61
		1.80%	IFA Emerging Markets Value Index		1.80%	DFA Emerging Markets Value (DFEVX)	2,194	$26,462	1.05
		2.40%	IFA Emerging Markets Small Cap Index		2.40%	DFA Emerging Small Cap (DEMSX)	3,126	$1,373	0.73
40%	Fixed Income	10.00%	IFA One-Year Fixed Income Index	10.00%		DFA One-Year Fixed Income (DFIHX)	na	na	na
		10.00%	IFA Two-Year Global Fixed Income Index	6.00%	4.00%	DFA Two-Year Global Fixed Income (DFGFX)	na	na	na
		10.00%	IFA Short Term Government Index		10.00%	DFA Short Term Government (DFFGX)	na	na	na
		10.00%	IFA Five-Year Global Fixed Income Index		10.00%	DFA Five-Year Global Fixed Income (DFGBX)	na	na	na

*Asset class is held in both the Roth and traditional IRA.
**As of March 31, 2013

2013 Year To Date Year To Date Returns for IFA Hyb. Taxable & Tax Def/Exempt Index Portfolios

Data as of Market Close 5/24/13

IFA Tax Hybrid Portfolios	YTD¹	Value²	Risk³
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 100	12.90%	7,618	22.74
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 95	12.92%	6,349	22.22
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 90	12.93%	5,239	21.73
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 85	12.27%	4,497	20.59
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 80	11.61%	3,807	19.46
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 75	10.96%	3,181	18.35
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 70	10.31%	2,624	17.25
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 65	9.66%	2,137	16.17
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 60	9.01%	1,718	15.09
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 55	8.37%	1,365	14.03
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 50	7.72%	1,071	12.98
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 45	7.07%	829	11.94
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 40	6.42%	635	10.90
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 35	5.78%	480	9.88
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 30	5.14%	359	8.86
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 25	4.49%	265	7.87
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 20	3.84%	194	6.90
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 15	3.19%	140	5.96
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 10	2.54%	100	5.06
IFA Tax Hybrid Portfolio IFA Hyb. Taxable & Tax Def/Exempt 5	1.91%	70	4.18

IFA Index Portfolios	YTD¹	Value²	Risk³
IFA Index Portfolio IFA Index 100	13.00%	7,978	22.66
IFA Index Portfolio IFA Index 95	13.04%	6,526	22.17
IFA Index Portfolio IFA Index 90	13.07%	5,289	21.70
IFA Index Portfolio IFA Index 85	12.42%	4,535	20.56
IFA Index Portfolio IFA Index 80	11.76%	3,836	19.44
IFA Index Portfolio IFA Index 75	11.11%	3,202	18.33
IFA Index Portfolio IFA Index 70	10.45%	2,638	17.24
IFA Index Portfolio IFA Index 65	9.79%	2,146	16.15
IFA Index Portfolio IFA Index 60	9.14%	1,724	15.08
IFA Index Portfolio IFA Index 55	8.48%	1,368	14.02
IFA Index Portfolio IFA Index 50	7.82%	1,072	12.97
IFA Index Portfolio IFA Index 45	7.17%	830	11.93
IFA Index Portfolio IFA Index 40	6.51%	635	10.89
IFA Index Portfolio IFA Index 35	5.86%	480	9.87
IFA Index Portfolio IFA Index 30	5.20%	358	8.86
IFA Index Portfolio IFA Index 25	4.54%	264	7.85
IFA Index Portfolio IFA Index 20	3.89%	192	6.87
IFA Index Portfolio IFA Index 15	3.23%	138	5.91
IFA Index Portfolio IFA Index 10	2.57%	98	4.99
IFA Index Portfolio IFA Index 5	1.92%	69	4.13

YTD Diff.
-0.10%
-0.12%
-0.14%
-0.15%
-0.15%
-0.15%
-0.14%
-0.13%
-0.13%
-0.11%
-0.10%
-0.10%
-0.09%
-0.08%
-0.06%
-0.05%
-0.05%
-0.04%
-0.03%
-0.01%

¹ When IFA Indexes are shown in Index Portfolios, all returns data reflects a deduction of 0.9% annual investment advisory fee, which is the maximum IFA fee. Your fee may be less depending on assets under management at IFA. Unless indicated otherwise, data shown for each individual IFA Index is shown without a deduction of the IFA advisory fee. It is important to understand that the assumption of annual rebalancing has an impact on the monthly returns reported for the IFA index portfolios in both this Table, Table 11.9 and in the Index Calculator. The reason for this difference is that with annual rebalancing, the monthly returns are calculated by applying the asset class percentages to the year-to-date returns as of the beginning and the end of the month, unlike monthly rebalancing which assumes that the portfolio is perfectly in balance at the beginning of the month. At a month-end or year-end, the returns shown above may differ slightly from the returns shown on IFA's big table due to the different methods used in the calculation of the impact of advisory fees. See ifabt.com.
²Index Value based on starting value of one, as of Jan 1, 1928. Source: ifabt.com, dfaus.com. & yahoo.com.
³ The risk measure is calculated as the annualized standard deviation of monthly returns for 84 years from 1/1/1928 to 12/31/2012. (See Index Calculator)

Sources, Updates, and Disclosures: ifabt.com

An additional way that a passive advisor can add value is not just asset allocation but asset location. Specifically, for a client that has a mixture of taxable accounts, traditional IRAs, and Roth IRAs, it is often helpful to construct a single portfolio consisting of multiple asset classes that are divided up among the different accounts with the ultimate purpose of optimizing after-tax returns. Considerations in deciding which asset classes to place in different account types include the following:

For Roth IRAs where all the investment growth is tax-free, the preference is to put in the asset classes that have the highest expected returns (which is equivalent to the highest risks). Examples include emerging markets and international small value.
For traditional IRAs where the withdrawals are taxed as ordinary income, the preference is to put in the asset classes that are the least tax-efficient. Examples include real estate investment trusts (REITs) and fixed income.
For taxable accounts, the preference is to utilize tax-managed funds wherever possible. Index Funds Advisors currently uses tax-managed funds in the following five asset classes: US large company, US large cap value, US small blend, US small cap value, and international value.

It is important for clients to understand that in a tax-hybrid portfolio, each of the accounts will have very different performance. If the client is not comfortable with this performance difference (e.g., a married couple where the wife's Roth IRA has a higher expected return than the husband's traditional IRA), then the tax-hybrid portfolio structure may not be appropriate. Furthermore, a good passive advisor will evaluate the purpose of each account to determine if it should be stand-alone or part of a hybrid structure. A special needs trust for a disabled child is an example of an account that should be its own portfolio. Establishing a tax-hybrid portfolio is only half of the task; maintaining and rebalancing the portfolio through all types of markets and client cash needs requires the skills that the passive advisor brings to the table. For example, if the client has a cash need from a taxable account, confining the sell trades to the single account may throw the portfolio out of balance. A good advisor will carefully consider how to trade all the accounts in unison with an eye towards tax-efficiency, minimization of transaction costs and maintenance of the client's designated risk level.