Most major U.S. stock indexes rose in the second quarter, and they recovered steep losses late in the period following the UK referendum on June 23 to leave the European Union—the so-called “Brexit.” The market jolt was preceded by fairly calm and orderly global market gains during the period, helped by recent central bank actions in the eurozone and Japan and by reduced expectations for Federal Reserve interest rate increases in 2016. Rebounding commodity prices provided some relief to natural resource companies and exporters during the quarter. Mid- and small-cap shares outpaced their large-cap counterparts. As measured by various Russell indexes, value stocks surpassed growth stocks across all market capitalizations.

The outcome of the UK Brexit referendum took financial markets by surprise and extended a rally in safe-haven government bonds from developed markets, driving their already low (or negative) yields even lower. (Bond prices and yields move in opposite directions.) In the days following the Brexit vote, the yield on 10-year UK sovereign notes fell below 1.0% for the first time ever. The German 10-year government note’s yield also decreased into uncharted terrain, joining 10-year Japanese sovereign debt in negative territory. Domestic bonds produced good returns. Intermediate- and long-term bond prices rose and interest rates declined as the Fed refrained from raising short-term rates. A late-quarter flight to safety following the UK referendum also helped U.S. Treasuries, whose yields remain higher than sovereign debt yields in many developed countries.

Investment-grade corporate bonds lagged their high-yield cousins but still posted healthy returns, benefiting from both narrowing credit spreads and their correlation with rallying Treasuries. New issuance was very heavy, with over $160 billion in new U.S. investment-grade corporate debt reaching the market in May, the highest monthly amount on record. Outside the U.S., the European Central Bank announced the criteria for its purchases of investment-grade corporate debt in April and started buying the bonds in June, helping to extend the biggest rally in European corporate bonds in over three years.

Stocks in developed non-U.S. markets lagged U.S. shares, buffeted by post-Brexit volatility. In Europe, UK equities fell less than 1% in dollar terms, as the British pound sterling dropped 7% versus the greenback. Eurozone markets Austria, Ireland, and Italy dropped close to 10%, hurt in part by the euro’s 2.5% decline versus the dollar. European bank stocks were among the hardest hit after the UK referendum. Italian banks in particular continue to struggle with substantial amounts of nonperforming loans on their balance sheets. Developed Asian markets rose slightly; Japanese stocks rose 1% in dollar terms, helped by the yen’s nearly 10% gain versus the dollar.

Emerging markets stocks in aggregate edged higher. In U.S. dollar terms, Latin American markets fared best, helped by rebounding commodity prices and the suspension of Brazilian President Dilma Rousseff, whose replacement is pursuing reforms to help lift the country out of a deep recession. Stocks in Brazil jumped almost 14%. Most emerging European markets fell, though shares in oil producer Russia rose 4%. Asian markets were mostly higher, but stocks in Malaysia, South Korea, and China’s A shares market declined.

Bonds in developed non-U.S. markets produced good returns in dollar terms. This was driven mainly by gains late in the period, when global slowdown concerns and falling inflation expectations fueled a rally across developed government bond markets. Core countries added strong gains in late June, benefiting from demand for low-risk government debt in the aftermath of the UK referendum. In Japan, long-dated government bonds produced strong gains as they benefited from safe-haven flows and rising market expectations that the Bank of Japan will expand its monetary easing measures. Elsewhere, UK government bonds, known as gilts, rallied after the referendum result raised expectations that the Bank of England would reduce interest rates and possibly restart asset purchases.

Emerging markets bonds appreciated. Dollar-denominated issues fared better than local currency bonds, which were hurt by a stronger dollar versus many emerging markets currencies. At the end of June, the central bank of Mexico unexpectedly raised short-term interest rates to help lift the peso, which slumped to a record low versus the dollar after the Brexit referendum.

Emerging markets bonds appreciated. Dollar-denominated issues fared better than local currency bonds, which were hurt by a stronger dollar versus many emerging markets currencies. At the end of June, the central bank of Mexico unexpectedly raised short-term interest rates to help lift the peso, which slumped to a record low versus the dollar after the Brexit referendum.

T. Rowe Price Gift Preservation Pool Performance — June 30, 2016

The Gift Preservation Pool returned 0.50%, compared with 0.06% for its benchmark. The Short Term Bond Fund, the largest component of the pool, had a positive absolute return as market volatility late in the quarter drove investors to seek safe havens in government and corporate bonds.

GIFT PRESERVATION POOL
PERFORMANCE AS OF June 30, 2016
Total Return4
3 Months 1 Year 5 Years3 10 Years3
T. Rowe Price Gift Preservation Pool1 0.50% 0.64% 0.40% 1.83%
Underlying Funds Weight 0.81% 1.53% 1.21% 2.92%
Short-Term Bond Fund 75.0%
Summit Cash Reserves Fund 25.0% 0.02% 0.03% 0.01% 1.04%
WBGPP Weighted Benchmark2 0.06% 0.14% 0.06% 1.03%


1 The current weights of the underlying funds became effective on June 28, 2010; also on this date, the Short-Term Bond Fund and Summit Cash Reserves Fund replaced the Short-Term Income Fund. Performance prior to June 28, 2010, is based on the previously applied allocations of the underlying funds.

2 The benchmark reflects the performance of a combined portfolio consisting of 80% Citigroup 3-Month Treasury Bill Index and 20% Barclays 1–3 Year Government/Credit Index through June 30, 2008, and the performance of the Citigroup 3-Month Treasury Bill Index from July 1, 2008, forward.

3 These figures are annualized.

4 Returns are based on net asset value per share and reflect changes in principal value, reinvested dividends, and capital gain distributions, if any. The pool returns are net of underlying expenses for the mutual funds and Program administrative fees.

T. Rowe Price Diversified Income Pool Performance — June 30, 2016

The Diversified Income Pool returned 2.94%, versus 2.61% for its weighted benchmark. All components of the pool had positive absolute returns for the period. While it is the smallest component of the pool, the Real Assets Fund had by far the largest absolute gain.

DIVERSIFIED INCOME POOL
PERFORMANCE AS OF June 30, 2016
Total Return4
3 Months 1 Year 5 Years3 10 Years3
T. Rowe Price Diversified Income Pool1 2.94% 2.71% 5.33% 5.48%
Underlying Funds Weight 3.16% 4.68% 4.39% 5.73%
Spectrum Income Fund 60.0%
Equity Income Fund 19.0% 3.93% 1.28% 9.11% 5.82%
Balanced Fund 19.0% 1.27% -0.41% 7.20% 6.21%
Real Assets Fund 2.0% 8.46% 5.83% -0.85% N/A
WBDEP Weighted Benchmark2 2.61% 4.93% 6.22% 5.80%


1 The current weights of the underlying funds became effective on February 28, 2013. Beginning in October 2012, the pool began incrementally adding the Real Assets Fund to its portfolio until February 2013 when the pool’s current allocation to the fund was reached. Performance prior to September 30, 2012, is based on the previously applied allocations of the underlying funds. The Balanced Fund was added to the pool on August 31, 2004.

2 The benchmark reflects the performance of a combined portfolio consisting of 60% Barclays U.S. Aggregate Bond Index, 19% Russell 1000 Value Index, 19% Balanced Fund Blended Benchmark (45.5% S&P 500 Index, 35% Barclays U.S. Aggregate Bond Index, and 19.5% MSCI EAFE Index), and 2% in a blended benchmark (70% Russell 3000 Index and 30% MSCI EAFE Index) through December 31, 2013, and the performance of a combined portfolio consisting of 60% Barclays U.S. Aggregate Bond Index, 19% Russell 1000 Value Index, 19% Balanced Fund Blended Benchmark (45.5% S&P 500 Index, 35% Barclays U.S. Aggregate Bond Index, and 19.5% MSCI EAFE Index), and 2% MSCI All Country World Index from January 1, 2014, forward.

3 These figures are annualized.

4 Returns are based on net asset value per share and reflect changes in principal value, reinvested dividends, and capital gain distributions, if any. The pool returns are net of underlying expenses for the mutual funds and Program administrative fees.

T. Rowe Price Balanced Index Pool Performance — June 30, 2016

The Balanced Index Pool had a return of 2.04%, compared with 1.81% for its weighted benchmark. The pool’s largest component, the U.S. Bond Index Fund, had a solid positive absolute return in a favorable environment for fixed-income investments. The strongest absolute return came from the Real Assets Fund, which is also the smallest allocation.

BALANCED INDEX POOL
PERFORMANCE AS OF June 30, 2016
Total Return4
3 Months 1 Year 5 Years3 10 Years3
T. Rowe Price Balanced Index Pool1 2.04% 1.14% 6.05% 5.36%
Underlying Funds Weight 2.50% 5.98% 3.74% 5.14%
U.S. Bond Enhanced Index Fund 40.0%
Equity Index 500 Fund 29.9% 2.40% 3.70% 11.81% 7.16%
Extended Equity Market Index Fund 10.0% 3.33% -5.68% 9.47% 7.51%
International Equity Index Fund 17.1% -0.77% -9.47% 1.32% 1.71%
Real Assets Fund 3.0% 8.46% 5.83% -0.85% N/A
WBBAX Weighted Benchmark2 1.81% 1.51% 6.91% 6.02%


1 The current weights of the underlying funds became effective on February 28, 2013. Beginning in October 2012, the pool began incrementally adding the Real Assets Fund to its portfolio until February 2013, when the pool’s current allocation to the fund was reached. Performance prior to September 30, 2012, is based on the previously applied allocations of the underlying funds.

2 The benchmark reflects the performance of a combined portfolio consisting of 40% Barclays U.S. Aggregate Bond Index, 29.9% S&P 500 Index, 10% S&P Completion Index, 17.1% FTSE All World Developed ex North America Index, and 3% in a blended benchmark (70% Russell 3000 Index and 30% MSCI EAFE Index) through December 31, 2013, and the performance of a combined portfolio consisting of 40% Barclays U.S. Aggregate Bond Index, 29.9% S&P 500 Index, 10% S&P Completion Index, 17.1% FTSE All World Developed ex North America Index, and 3% MSCI All Country World Index from January 1, 2014, forward.

3 These figures are annualized.

4 Returns are based on net asset value per share and reflect changes in principal value, reinvested dividends, and capital gain distributions, if any. The pool returns are net of underlying expenses for the mutual funds and Program administrative fees.

T. Rowe Price Moderate Growth Pool Performance — June 30, 2016

The Moderate Growth Pool posted a return of 2.08%, while its weighted benchmark returned 1.86%. The pool’s largest holding, the Spectrum Income Fund, was well into positive territory for the quarter. The strongest absolute returns came from the pool’s smallest holdings, the Real Assets Fund and Emerging Markets Stock Fund, whose holdings were helped by recovering commodities prices. The Growth Stock Fund, one of the larger components of the pool, had a negative absolute return.

MODERATE GROWTH POOL
PERFORMANCE AS OF June 30, 2016
Total Return4
3 Months 1 Year 5 Years3 10 Years3
T. Rowe Price Moderate Growth Pool1 2.08% -0.71% 6.31% 5.63%
Underlying Funds Weight 3.16% 4.68% 4.39% 5.73%
Spectrum Income Fund 30.00%
Equity Index 500 Fund 5.45% 2.40% 3.70% 11.81% 7.16%
Growth Stock Fund 15.20% -0.69% -2.74% 12.04% 8.42%
Equity Income Fund 15.20% 3.93% 1.28% 9.11% 5.82%
Mid-Cap Growth Fund 2.85% 1.94% 0.26% 11.92% 10.15%
Mid-Cap Value Fund 2.85% 4.29% 4.03% 10.93% 8.63%
Small-Cap Stock Fund 5.00% 4.20% -2.27% 9.99% 8.39%
International Stock Fund 8.55% -0.33% -8.29% 2.19% 3.23%
International Growth & Income Fund 8.55% -2.01% -12.17% 0.94% 1.56%
Emerging Markets Stock Fund 2.85% 4.70% -5.63% -1.72% 3.87%
Real Assets Fund 3.50% 8.46% 5.83% -0.85% N/A
WBMPP Weighted Benchmark2 1.86% 0.83% 7.45% 5.92%


1 The current weights of the underlying funds became effective on February 28, 2013. Beginning in October 2012, the pool began incrementally adding the Real Assets Fund to its portfolio until February 2013, when the pool's current allocation to the fund was reached. Performance prior to September 30, 2012, is based on the previously applied allocations of the underlying funds. The Emerging Markets Stock Fund was added to the pool on June 30, 2008.

2 The benchmark reflects the performance of a combined portfolio consisting of 30% Barclays U.S. Aggregate Bond Index, 49% Russell 3000 Index, and 21% MSCI EAFE Index through December 31, 2013 and the performance of a combined portfolio consisting of 30% Barclays U.S. Aggregate Bond Index, 46.55% Russell 3000 Index, 19.95% MSCI All Country World Index ex-U.S., and 3.5% MSCI All Country World Index from January 1, 2014, forward.

3 These figures are annualized.

4 Returns are based on net asset value per share and reflect changes in principal value, reinvested dividends, and capital gain distributions, if any. The pool returns are net of underlying expenses for the mutual funds and Program administrative fees.

T. Rowe Price Growth Pool Performance — June 30 2016

The Growth Pool returned 1.68%, against the 1.70% return of its weighted benchmark. In absolute terms, the highest returns were earned by the Real Assets Fund and the Emerging Markets Stock Fund, both relatively small components of the pool. The Growth Stock Fund, which is one of the largest components of the pool, posted a negative absolute return for the quarter.

GROWTH POOL
PERFORMANCE AS OF June 30, 2016
Total Return4
3 Months 1 Year 5 Years3 10 Years3
T. Rowe Price Growth Pool1 1.68% -2.79% 7.25% 5.52%
Underlying Funds Weight 2.40% 3.70% 11.81% 7.16%
Equity Index 500 Fund 10.20%
Growth Stock Fund 20.45% -0.69% -2.74% 12.04% 8.42%
Equity Income Fund 20.45% 3.93% 1.28% 9.11% 5.82%
Mid-Cap Growth Fund 4.05% 1.94% 0.26% 11.92% 10.15%
Mid-Cap Value Fund 4.05% 4.29% 4.03% 10.93% 8.63%
Small-Cap Stock Fund 7.35% 4.20% -2.27% 9.99% 8.39%
International Stock Fund 12.10% -0.33% -8.29% 2.19% 3.23%
International Growth & Income Fund 12.10% -2.01% -12.17 0.94% 1.56%
Emerging Markets Stock Fund 4.25% 4.70% -5.63% -1.72% 3.87%
Real Assets Fund 5.00% 8.46% 5.83% -0.85% N/A
WBGRP Weighted Benchmark2 1.70% -1.64% 8.77% 5.84%


1The current weights of the underlying funds became effective on February 28, 2013. Beginning in October 2012, the pool began incrementally adding the Real Assets Fund to its portfolio until February 2013, when the pool's current allocation to the fund was reached. Performance prior to September 30, 2012, is based on the previously applied allocations of the underlying funds. The Emerging Markets Stock Fund was added to the pool on June 30, 2008.

2 The benchmark reflects the performance of a combined portfolio consisting of 70.05% Russell 3000 Index and 29.95% MSCI EAFE Index through December 31, 2013 and the performance of a combined portfolio consisting of 66.55% Russell 3000 Index, 28.45% MSCI All Country World Index ex-U.S., and 5% MSCI All Country World Index from January 1, 2014, forward.

3 These figures are annualized.

4 Returns are based on net asset value per share and reflect changes in principal value, reinvested dividends, and capital gain distributions, if any. The pool returns are net of underlying expenses for the mutual funds and Program administrative fees.

T. Rowe Price Global Equity Pool Performance — June 30, 2016

The Global Equity Pool returned 1.69%, compared with a 1.19% return for its weighted benchmark. The largest absolute gains came from the Real Assets Fund, which is among the smaller components of the pool, and the Emerging Markets Stock Fund, reflecting recovery in markets that experienced considerable losses earlier in the year.

GLOBAL EQUITY POOL
PERFORMANCE AS OF June 30, 2016
Total Return4
3 Months
1 Year
5 Years3
Since Inception3
6/30/08
T. Rowe Price Global Equity Pool1 1.69% -3.57% 5.50% 3.58%
Underlying Funds Weight 1.90% -1.00% 8.45% 3.18%
Global Stock Fund 22.30%
International Growth & Income Fund 12.35% -2.01% -12.17% 0.94% 0.62%
International Equity Index Fund 16.60% -0.77% -9.47% 1.32% 0.49%
Emerging Markets Stock Fund 9.95% 4.70% -5.63% -1.72% -0.93%
Equity Index 500 Fund 14.50% 2.40% 3.70% 11.81% 8.48%
Value Fund 11.15% 1.56% -0.83% 11.61% 8.82%
Mid-Cap Growth Fund 2.40% 1.94% 0.26% 11.92% 10.78%
Mid-Cap Value Fund 2.40% 4.29% 4.03% 10.93% 10.11%
Small-Cap Stock Fund 3.35% 4.20% -2.27% 9.99% 11.42%
Real Assets Fund 5.00% 8.46% 5.83% -0.85% N/A
WBGEP Weighted Benchmark2 1.19% -3.17% 5.95% 4.25%


1 The current weights of the underlying funds became effective on February 28, 2013. Beginning in October 2012, the pool began incrementally adding the Real Assets Fund to its portfolio until February 2013, when the pool's current allocation to the fund was reached. Performance prior to September 30, 2012, is based on the previously applied allocations of the underlying funds.

2 The benchmark reflects the performance of a 100% allocation to the MSCI All Country World Index since inception of the portfolio.

3 These figures are annualized.

4 Returns are based on net asset value per share and reflect changes in principal value, reinvested dividends, and capital gain distributions, if any. The pool returns are net of underlying expenses for the mutual funds and Program administrative fees.

Benchmark Information
Barclays 1–3 Year Government/Credit Index is a total return index that incorporates all bonds in the Treasury Bond Index and the Agency Bond Index, as well as U.S. corporate and some foreign debentures and secured notes, with maturities of one to three years.
Barclays U.S. Aggregate Bond Index is an unmanaged index that tracks domestic investment-grade bonds, including corporate, government, and mortgage-backed securities.
Citigroup 3-Month Treasury Bill Index is an unmanaged index that tracks short-term U.S. government debt instruments.
FTSE All World Developed ex North America IndexTM is a broadly diversified stock market index based on the investable market capitalization of predominately larger companies. The index's major markets include the UK, Japan, and developed countries in Europe and the Pacific Rim.
MSCI EAFE Index tracks the performance of stocks of companies in Europe, Australasia, and the Far East (EAFE).
MSCI All Country World Index tracks the equity market performance of global developed and emerging markets.
MSCI All Country World Index ex-U.S. is a market capitalization-weighted index of stocks traded in world markets.
Russell 1000 Value Index tracks the performance of the 1,000 largest companies in the Russell 3000 Index. The Russell 3000 Index tracks the performance of the 3,000 largest U.S. companies, representing approximately 98% of the investable U.S. equity market.
S&P 500 Index tracks the stocks of 500 mostly large U.S. companies.
S&P Completion Index tracks the performance of the U.S. stocks not included in the S&P 500, which are primarily small- and mid-capitalization stocks.

"Standard & Poor's", "S&P®", "S&P 500®", "Standard & Poor's 500", "500", "S&P Completion Index", "S&P Total Market Index", and "S&P TMI" are marks/trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by T. Rowe Price. The product is not sponsored, endorsed, sold, or promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the product.

Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell indexes. Russell® is a trademark of Russell Investment Group.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI.