U.S. stocks continued rising in the fourth quarter, capping another year of strong gains for the equity market. It was the ninth consecutive positive year for the large-cap S&P 500 Index. Driving the year-end rally was the development of tax reform legislation that was passed by Congress and signed into law by President Trump in December. Among the biggest changes in the new tax law are reductions in tax rates for corporations and closely held businesses, reductions in marginal tax rates for individuals at most income levels, and changes to the limits for various individual tax deductions. The Federal Reserve raised interest rates on December 13, but this was widely expected and did not disrupt the equity markets. Large-cap stocks outperformed their smaller peers, a trend that prevailed throughout 2017. As measured by various Russell indexes, growth stocks outperformed value stocks across all market capitalizations—not only for the quarter, but also for the full year.

Domestic bonds generally produced flat to slightly positive returns. The Bloomberg Barclays U.S. Aggregate Bond Index returned 0.39%. The Treasury yield curve flattened, as short-term yields rose in anticipation of further gradual Fed rate increases, but longer-term yields rose to a lesser extent or decreased. In fact, the difference between shorter- and longer-term Treasury yields narrowed to a 10-year low. In the investment-grade universe, long-term corporate bonds and long-term Treasury bonds fared best. Mortgage- and asset-backed securities were little changed. Tax-free municipal bonds outperformed their taxable bond peers, and high yield issues marginally outperformed higher-quality securities.

Stocks in developed non-U.S. markets underperformed large-cap U.S. shares. The MSCI EAFE Index, which measures the performance of stocks in Europe, Australasia, and the Far East, returned 4.27%. Developed Asian markets performed very well in dollar terms, led by Singapore’s 10% gain. Japanese stocks advanced about 8.5%. Japan’s economic expansion has lasted for seven consecutive quarters—a streak not seen in Japan for more than 15 years. Eurozone markets lagged with milder gains. Although eurozone economies continued to expand, investor sentiment was hurt somewhat by some disappointing corporate earnings reports. German stocks rose almost 3%, but investors were discouraged by the inability of Chancellor Angela Merkel’s political party to form a governing coalition. Political uncertainty in Spain and Italy weighed on those markets in particular. In the UK, shares climbed nearly 6% in U.S. dollar terms, thanks to a reduction of Brexit uncertainty.

Emerging markets stocks outperformed shares in developed markets. The MSCI Emerging Markets Index returned 7.50%. In dollar terms, most Asian markets performed well, led by India, South Korea, and Thailand. In Emerging Europe, Poland, Hungary, and the Czech Republic rose roughly between 6% and 8%, but regional heavyweights Russia and Turkey advanced less than 5%. In the Middle East, most Gulf Cooperation Council markets sagged, but Qatari shares rose almost 4%, helped by brisk gains in December amid hopes that the embargo against Qatar by several Middle Eastern countries would soon end. South African stocks soared 21% in dollar terms—helped by a 9% rand rally—amid hopes that Cyril Ramaphosa, who was elected as the leader of the African National Congress (ANC), would eventually replace South Africa’s unpopular President Jacob Zuma and initiate some much-needed economic reforms. In Latin America, the smaller markets advanced, but Brazilian shares fell 2%, while Mexican stocks dropped 8% in dollar terms.

Bonds in developed non-U.S. markets produced good returns in U.S. dollar terms, as yields eased in several eurozone sovereign debt markets. A 1.5% gain in the euro versus the dollar lifted returns to U.S. investors. UK government bond yields declined amid hopes that inflation is nearing a peak and that the UK’s negotiations to leave the EU will proceed more smoothly. The Bank of England raised short-term interest rates in November, which helped lift the pound sterling versus the dollar. The Japanese yen and 10-year government bond yield were little changed.

Emerging markets bond returns were mostly positive. Returns on local currency bonds in U.S. dollar terms varied widely, however, due to significant currency movements in some countries. On the plus side, several Asian currencies appreciated versus the dollar, as did the South African rand. However, the Brazilian real and the Turkish lira declined moderately, reducing local bond returns in dollar terms. Yields on long-term Mexican sovereign bonds climbed and the peso fell about 7% due to concerns that the new U.S. tax law could discourage investment in Mexico.

In this environment, all portfolios had positive absolute returns, and all of their component funds gained. The Global Equity Pool and the Growth Pool had the largest positive absolute returns. The Gift Preservation Pool had a neutral absolute return for the quarter.

T. Rowe Price Gift Preservation Pool Performance — December 31, 2017

The Gift Preservation Pool returned 0.00%, compared with 0.28% for its benchmark. The Short Term Bond Fund, the largest component of the pool, and the U.S. Treasury Money Fund both had slightly positive returns.

GIFT PRESERVATION POOL
PERFORMANCE AS OF December 31, 2017
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Gift Preservation Pool 2 0.00% 0.85% 0.24% 1.20% 2.06%
Underlying Funds Weight 0.05% 1.64% 0.96% 2.22% 3.22%
Short Term Bond Fund - I Class1 75.0%
US Treasury Money Fund1 25.0% 0.22% 0.58% 0.13% 0.22% 1.21%
WBGPP Weighted Benchmark 0.28% 0.84% 0.24% 0.36% 1.93%


1 T. Rowe Price Program for Charitable Giving has adopted the policy of converting its investment in a fund to I Class shares of the same fund when the I-Class shares are available. The first conversion to available I Class shares occurred on July 26, 2016. Please note that for the first conversion, the I Class shares incepted prior to the conversion date. The performance figures for each underlying I Class fund have been calculated using the performance data of the prior share class up to the inception date of the I Class and the actual performance results of the I Class since its inception date. Because the I Class of a fund is expected to have lower expenses than the prior share class of the same fund, the I Class performance figures for the periods spanning before its inception date would have been higher had such I Class existed over such periods.

2 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. On August 2, 2016 the U.S. Treasury Money Fund replaced the Summit Cash Reserves Fund. Performance prior to August 2, 2016 is based on the previously applied allocations of the underlying funds.

T. Rowe Price Diversified Income Pool Performance — December 31, 2017

The Diversified Income Pool returned 2.37%, versus 2.09% for its weighted benchmark. The Spectrum Income Fund, the largest component of the pool, had a positive absolute return. The Real Assets Fund, the pool’s smallest component, had the largest absolute gain.

DIVERSIFIED INCOME POOL
PERFORMANCE AS OF December 31, 2017
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Diversified Income Pool 2.37% 10.38% 6.16% 5.43% 5.88%
Underlying Funds Weight 1.08% 7.02% 3.95% 5.23% 6.15%
Spectrum Income Fund 60.0%
Equity Income Fund - I Class1 19.0% 5.47% 16.31% 12.58% 6.94% 7.52%
Balanced Fund - I Class1 19.0% 3.66% 18.20% 9.79% 6.60% 6.27%
Real Assets Fund - I Class1 2.00% 5.56% 10.68% 2.77% N/A N/A
WBDEP Weighted Benchmark 2.09% 7.88% 5.99% 5.34% 5.55%


1 T. Rowe Price Program for Charitable Giving has adopted the policy of converting its investment in a fund to I Class shares of the same fund when the I-Class shares are available. The first conversion to available I Class shares occurred on July 26, 2016. Please note that for the first conversion, the I Class shares incepted prior to the conversion date. The performance figures for each underlying I Class fund have been calculated using the performance data of the prior share class up to the inception date of the I Class and the actual performance results of the I Class since its inception date. Because the I Class of a fund is expected to have lower expenses than the prior share class of the same fund, the I Class performance figures for the periods spanning before its inception date would have been higher had such I Class existed over such periods.

T. Rowe Price Balanced Index Pool Performance — December 31, 2017

The Balanced Index Pool had a return of 3.35%, compared with 3.63% for its weighted benchmark. The pool’s largest absolute gains came from the Equity Index Fund and the Real Assets Fund. The U.S. Enhanced Bond Index Fund, the pool’s largest component, had the weakest absolute return, followed by the International Equity Index.

BALANCED INDEX POOL
PERFORMANCE AS OF December 31, 2017
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (8/31/04)
T. Rowe Price Balanced Index Pool 3.35% 13.79% 7.82% 5.52% 6.40%
Underlying Funds Weight 0.41% 3.82% 2.11% 4.06% 4.08%
U.S. Bond Index Fund 40.0%
Equity Index 500 Fund - I Class1 29.9% 6.62% 21.73% 15.58% 8.28% 8.87%
Extended Equity Market Index Fund 10.0% 4.59% 17.96% 14.52% 9.24% 10.51%
International Equity Index Fund 17.1% 4.23% 26.45% 7.53% 2.01% 6.43%
Real Assets Fund - I Class1 3.0% 5.56% 10.68% 2.77% N/A N/A
WBBAX Weighted Benchmark 3.63% 14.79% 8.88% 6.22% 7.14%


1 T. Rowe Price Program for Charitable Giving has adopted the policy of converting its investment in a fund to I Class shares of the same fund when the I-Class shares are available. The first conversion to available I Class shares occurred on July 26, 2016. Please note that for the first conversion, the I Class shares incepted prior to the conversion date. The performance figures for each underlying I Class fund have been calculated using the performance data of the prior share class up to the inception date of the I Class and the actual performance results of the I Class since its inception date. Because the I Class of a fund is expected to have lower expenses than the prior share class of the same fund, the I Class performance figures for the periods spanning before its inception date would have been higher had such I Class existed over such periods.

T. Rowe Price Moderate Growth Pool Performance — December 31, 2017

The Moderate Growth Pool posted a return of 3.60%, while its weighted benchmark returned 4.26%. Many of the pool’s smaller components had strong absolute gains for the period. These included the Emerging Markets Stock Fund, the Equity Index 500 Fund, and the Real Assets Fund. The Spectrum Income Fund, the pool’s largest component, also gained for the quarter.

MODERATE GROWTH POOL
PERFORMANCE AS OF December 31, 2017
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Moderate Growth Pool 3.60% 17.70% 9.35% 6.23% 5.74%
Underlying Funds Weight 1.08% 7.02% 3.95% 5.23% 6.15%
Spectrum Income Fund 30.00%
Equity Index 500 Fund - I Class1 5.45% 6.62% 21.73% 15.58% 8.28% 5.48%
Growth Stock Fund - I Class1 15.20% 6.10% 33.84% 17.96% 10.03% 7.01%
Equity Income Fund - I Class1 15.20% 5.47% 16.31% 12.58% 6.94% 7.52%
Mid-Cap Growth Fund - I Class1 2.85% 4.46% 25.02% 17.05% 10.76% 9.68%
Mid-Cap Value Fund - I Class1 2.85% 5.20% 11.79% 14.36% 9.55% 11.35%
Small-Cap Stock Fund - I Class1 5.00% 3.48% 15.43% 14.33% 10.91% 9.65%
International Stock Fund - I Class1 8.55% 3.59% 28.40% 8.17% 3.39% 4.00%
International Value Equity Fund - I Class1 8.55% 1.40% 20.98% 6.60% 1.49% 5.32%
Emerging Markets Stock Fund - I Class1 2.85% 7.42% 43.04% 6.54% 1.49% 9.14%
Real Assets Fund - I Class1 3.50% 5.56% 10.68% 2.77% N/A N/A
WBMPP Weighted Benchmark 4.26% 16.98% 10.06% 6.42% 5.90%


1 T. Rowe Price Program for Charitable Giving has adopted the policy of converting its investment in a fund to I Class shares of the same fund when the I-Class shares are available. The first conversion to available I Class shares occurred on July 26, 2016. Please note that for the first conversion, the I Class shares incepted prior to the conversion date. The performance figures for each underlying I Class fund have been calculated using the performance data of the prior share class up to the inception date of the I Class and the actual performance results of the I Class since its inception date. Because the I Class of a fund is expected to have lower expenses than the prior share class of the same fund, the I Class performance figures for the periods spanning before its inception date would have been higher had such I Class existed over such periods.

T. Rowe Price Growth Pool Performance — December 31, 2017

The Growth Pool returned 4.75%, against the 5.95% return of its weighted benchmark. In absolute terms, the Emerging Markets Stock Fund and the Equity Index 500 Fund had the strongest absolute returns. The Equity Income Fund, one of the pool’s larger components, was also among the strongest performers for the period. The International Value Equity Fund and the International Stock Fund had among the weakest returns for the period.

GROWTH POOL
PERFORMANCE AS OF December 31, 2017
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Growth Pool 4.75% 22.68% 11.88% 6.57% 5.95%
Underlying Funds Weight 6.62% 21.73% 15.58% 8.28% 5.48%
Equity Index 500 Fund - I Class1 10.20%
Growth Stock Fund - I Class1 20.45% 6.10% 33.84% 17.96% 10.03% 7.01%
Equity Income Fund - I Class1 20.45% 5.47% 16.31% 12.58% 6.94% 7.52%
Mid-Cap Growth Fund - I Class1 4.05% 4.46% 25.02% 17.05% 10.76% 9.68%
Mid-Cap Value Fund - I Class1 4.05% 5.20% 11.79% 14.36% 9.55% 11.35%
Small-Cap Stock Fund - I Class1 7.35% 3.48% 15.43% 14.33% 10.91% 9.65%
International Stock Fund - I Class1 12.10% 3.59% 28.40% 8.17% 3.39% 4.00%
International Value Equity Fund - I Class1 12.10% 1.40% 20.98% 6.60% 1.49% 5.32%
Emerging Markets Stock Fund - I Class1 4.25% 7.42% 43.04% 6.54% 1.49% 9.14%
Real Assets Fund - I Class1 5.00% 5.56% 10.68% 2.77% N/A N/A
WBGRP Weighted Benchmark 5.95% 23.20% 13.48% 7.04% 5.51%


1 T. Rowe Price Program for Charitable Giving has adopted the policy of converting its investment in a fund to I Class shares of the same fund when the I-Class shares are available. The first conversion to available I Class shares occurred on July 26, 2016. Please note that for the first conversion, the I Class shares incepted prior to the conversion date. The performance figures for each underlying I Class fund have been calculated using the performance data of the prior share class up to the inception date of the I Class and the actual performance results of the I Class since its inception date. Because the I Class of a fund is expected to have lower expenses than the prior share class of the same fund, the I Class performance figures for the periods spanning before its inception date would have been higher had such I Class existed over such periods.

T. Rowe Price Global Equity Pool Performance — December 31, 2017

The Global Equity Pool returned 5.47%, compared with a 5.84% return for its weighted benchmark. The most substantial absolute gain for the quarter came from the Global Stock Fund, also the pool’s largest component. The Emerging Markets Stock Fund and the Equity Index Fund also had strong returns. The International Growth and Income Fund and the International Equity Index Fund had among the weakest absolute returns.

GLOBAL EQUITY POOL
PERFORMANCE AS OF December 31, 2017
Total Return Annualized
3 Months
1 Year
5 Years
Since Inception (6/30/08)
T. Rowe Price Global Equity Pool 5.47% 25.07% 11.19% 6.10%
Underlying Funds Weight 7.65% 33.23% 16.36% 6.63%
Global Stock Fund - I Class1 22.30%
International Value Equity Fund - I Class1 12.35% 1.40% 20.98% 6.60% 3.00%
International Equity Index Fund 16.60% 4.23% 26.45% 7.53% 3.40%
Emerging Markets Stock Fund - I Class1 9.95% 7.42% 43.04% 6.54% 3.21%
Equity Index 500 Fund - I Class1 14.50% 6.62% 21.73% 15.58% 10.21%
Value Fund - I Class1 11.15% 6.07% 19.16% 15.17% 10.35%
Mid-Cap Growth Fund - I Class1 2.40% 4.46% 25.02% 17.05% 12.16%
Mid-Cap Value Fund - I Class1 2.40% 5.20% 11.79% 14.36% 11.06%
Small-Cap Stock Fund - I Class1 3.35% 3.48% 15.43% 14.33% 12.76%
Real Assets Fund - I Class1 5.00% 5.56% 10.68% 2.77% N/A
WBGEP Weighted Benchmark 5.84% 24.62% 11.40% 6.73%


1 T. Rowe Price Program for Charitable Giving has adopted the policy of converting its investment in a fund to I Class shares of the same fund when the I-Class shares are available. The first conversion to available I Class shares occurred on July 26, 2016. Please note that for the first conversion, the I Class shares incepted prior to the conversion date. The performance figures for each underlying I Class fund have been calculated using the performance data of the prior share class up to the inception date of the I Class and the actual performance results of the I Class since its inception date. Because the I Class of a fund is expected to have lower expenses than the prior share class of the same fund, the I Class performance figures for the periods spanning before its inception date would have been higher had such I Class existed over such periods.

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.
Bloomberg 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.