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f 1 HIGHMARK° CAPITAL MANAGEMENT PARS DIVERSIFIED PORTFOLIOS CAPITAL APPRECIATION Q4 2017 WHY THE PARS DIVERSIFIED INVESTMENT OBJECTIVE CAPITAL APPRECIATION PORTFOLIO? The rima Efficient Frontier p ry goal of the Capital Comprehensive Investment Solution Appreciation objective is growth z Capital AppreciationHighMark0 Capital Management, Inc.'s(HighMark) of principal. The major portion o Balanced diversified investment portfolios are designed to of the assets are invested in vca Moderate balance return expectations with risk tolerance. equity securities and market v Moderately Conservative Key features include:sophisticated asset allocation fluctuations are expected. 3 and optimization techniques, four layers of Conservative diversification(asset class,style, manager, and Risk(Standard Deviation) security),access to rigorously screened, top tier money managers, flexible investment options, and ASSET ALLOCATION-CAPITAL APPRECIATION PORTFOLIO experienced investment management. Strategic Range Policy Tactical Equity 65-85% 75% 75% Rigorous Manager Due Diligence Fixed Income 10 30% 20% 23% Our manager review committee utilizes a rigorous screening process that searches for investment Cash 0 20% 5% 2% managers and styles that have not only produced (Gross of Investment Management Fees, but above-average returns within acceptable risk ANNUALIZED TOTAL RETURNS Net of Embedded Fund Fees) parameters, but have the resources and commitment to continue to deliver these results.We have set high Current Quarter* 4.16% standards for our investment managers and funds. Blended Benchmark** 4.34% This is a highly specialized,time consuming Year To Date 16.72% approach dedicated to one goal: competitive and Blended Benchmark 16.55% consistent performance. 1 Year 16.72% Flexible Investment Options Blended Benchmark 16.55% In order to meet the unique needs of our clients, 3 Year 8.20% we offer access to flexible implementation strategies: Blended Benchmark 8.27% HighMark Plus utilizes actively managed mutual 5 Year 10.08% - funds while Index Plus utilizes index-based Blended Benchmark 10.56% securities, including exchange-traded funds. Both Inception to Date(108-Mos.) 10.90% investment options leverage HighMark's active asset Blended Benchmark 11.64% allocation approach. *Returns less than 1-year are not annualized."Breakdown for Blended Benchmark,39-5%S&P500,7.5%Russell Mid Cap,10.5% Russet 2000,5.25%MSCI EM FREE,10_25%MSC!EAFE,16%BC US Agg,3%ML 1-3 Yr US Corp/Gov't,1%US High Yield Risk Management Master II,2%Wilshire REIT,and 5%Citi 1 Mth T-Bill. The portfolio is constructed to control risk through ANNUAL RETURNS four layers of diversification—asset classes(cash, fixed income, equity), investment styles(large cap, 2008 N/A% small cap, international, value, growth), managers 2009 23.77% and securities. Disciplined mutual fund selection and 2010 12.95% - monitoring process helps to drive return potential 2011 -1.35% while reducing portfolio risk. 2012 13.87% 2013 20.33% _ 2014 6.05% 2015 -0.27% 2016 8.81% 2017 16.72% PORTFOLIO FACTS HighMark Plus(Active) Index Plus(Passive) Inception Data 01/2009 Inception Data N/A No of Funds in Portfolio 19 No of Funds in Portfolio 13