Despite a partial rebound in late December, U.S. stocks plunged in the fourth quarter of 2018, dragging all of the major indexes into the red for the year. It was the U.S. market’s worst annual performance since 2008, with several major indexes ending the year in or very close to bear market territory-down at least 20% from recent highs. Stocks fell sharply due to factors such as expectations for additional Federal Reserve interest rate increases in 2019 following an anticipated rate hike in December; forecasts for slowing corporate earnings growth in 2019, as the tailwinds from the late-2017 tax reform that boosted earnings in 2018 subside; signs of slowing economic growth in different parts of the world; and increased U.S. tensions with China. Turmoil in the Trump administration also weighed on investor sentiment.

Large-cap shares tumbled but held up better than their smaller peers. The large-cap S&P 500 Index returned -13.52%, versus -17.28% for the S&P MidCap 400 Index and -20.20% for the small-cap Russell 2000 Index. Small- and mid-cap stocks were in a bear market at the end of the year, while the S&P 500 was in its second "correction"-a drop of at least 10%-for the year. As measured by various Russell indexes, value stocks held up better than growth across all market capitalizations.

In the large-cap universe, as measured by the S&P 500, all major sectors declined. Energy stocks fared worst despite an OPEC production cut agreement with other oil-producing nations in early December, as U.S. oil prices briefly fell below $43 per barrel-an 18-month low-late in the month. Information technology shares also did poorly, surrendering significant gains from earlier in the year and sending the tech-heavy Nasdaq Composite Index into a bear market. Financials stocks also fell sharply, as a drop in long-term interest rates reduced banks’ ability to make profitable loans. Stocks in the utilities sector, which are often viewed as a proxy for the bond market due to their relatively high dividend yields, produced a slight gain for the quarter. The real estate and consumer staples sectors declined but held up much better than the broad market.

Domestic bonds produced mostly positive fourth-quarter returns-the Bloomberg Barclays U.S. Aggregate Bond Index returned 1.64%-as increased demand for the relative safety of Treasuries pushed long-term yields lower and bond prices higher. In the investment-grade bond universe, long-term Treasuries performed well as long-term yields declined during the quarter. In contrast, Treasury bill yields continued to rise, resulting in a flatter yield curve, which means there is a narrowing difference between short- and long-term yields. This is often a harbinger for an economic slowdown. Mortgage- and asset-backed securities trailed somewhat, and corporate bond returns were flat to slightly negative as credit spreads-the difference between yields of bonds with higher and lower credit risk-widened. Municipal bonds were mostly in line with taxable securities. High yield bonds fared poorly as credit spreads widened significantly due to risk aversion. A steep drop in oil prices weighed especially on bonds issued by energy companies.

Stocks in developed non-U.S. equity markets generally held up better than U.S. shares. The MSCI EAFE Index, which measures the performance of stocks in Europe, Australasia, and the Far East, returned -12.50%. Japanese shares, however, fell 14% in U.S. dollar terms during the quarter, as the yen rose 3.5% versus the greenback. Other developed Asian markets declined but held up somewhat better. In Europe, UK shares dropped almost 12%, in part because of Brexit-related uncertainty. Italian stocks also fell close to 12%, as the country’s populist government was in a standoff with Brussels for much of the quarter over its plans to increase government spending above a threshold that is acceptable to the EU. Near the end of the year, however, Italy and the EU reached an agreement on a budget that was later passed by the Italian legislature.

Stocks in emerging markets fell but held up better than shares in developed markets. The MSCI Emerging Markets Index returned -7.40%. Certain markets in Asia that are major oil importers benefited from the significant drop in oil prices. In U.S. dollar terms, Indonesia shares rose close to 10%, whereas gains in the Philippines and India were milder. However, stocks in China and many other Asian markets dropped at least 10%. In emerging Europe, Turkish shares rose close to 5%, helped by falling oil prices, signs of improving relations with the U.S., and a 13% gain in the lira versus the dollar. Russian stocks, however, fell 9%, hurt by weakness in oil prices and a nearly 6% drop in the ruble. In Latin America, Mexican shares fell almost 19% due to concerns about President Andrés Manuel López Obrador’s (AMLO’s) governing style.

Bond returns in developed non-U.S. markets were slightly positive in dollar terms. While bond yields in many markets declined and bond prices rose as investors fled equity market volatility, the stronger dollar versus European currencies reduced local returns to U.S. investors. In Germany, the 10-year bund yield fell from 0.47% to around 0.24%, but the euro slipped more than 1% versus the greenback. Similarly, the UK 10-year gilt yield fell from 1.57% to around 1.28%, but the British pound fell more than 2% versus the dollar. In Japan, the 10-year Japanese government bond yield fell from 0.13% to 0.00%, and the yen’s 3.5% gain versus the dollar boosted returns to U.S. investors.

Emerging markets bond returns were mixed. Dollar-denominated debt declined as investors shunned some risky assets during the quarter. Bonds issued in local currencies, however, produced positive returns, due in part to strength in certain key currencies, such as the Turkish lira, the Indian rupee, the Philippine peso, and the Brazilian real.

In this environment, absolute portfolio performance was predominately negative, with only the Gift Presentation Pool having a positive absolute return. The Growth Pool had the largest decline in absolute terms.

T. Rowe Price Gift Preservation Pool Performance — December 31, 2018

The Gift Preservation Pool returned 0.70%, compared with 0.57% for its benchmark. The Short Term Bond Fund drove positive absolute returns.

GIFT PRESERVATION POOL
PERFORMANCE AS OF December 31, 2018
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Gift Preservation Pool 2 0.70% 1.05% 0.51% 1.34% 2.01%
Underlying Funds Weight 0.88% 1.49% 1.20% 2.25% 3.12%
Short Term Bond Fund - I Class1 75.0%
US Treasury Money Fund1 25.0% 0.50% 1.57% 0.44% 0.23% 1.23%
WBGPP Weighted Benchmark 0.57% 1.86% 0.60% 0.35% 1.92%


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, 2018

The Diversified Income Pool returned -5.13%, versus -2.96% for its weighted benchmark. The Spectrum Income Fund, the pool’s largest component, held back absolute returns for the quarter, as did the Equity Income Fund.

DIVERSIFIED INCOME POOL
PERFORMANCE AS OF December 31, 2018
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Diversified Income Pool -5.31% -4.85% 3.10% 7.19% 5.26%
Underlying Funds Weight -1.50% -2.62% 2.79% 5.99% 5.65%
Spectrum Income Fund 60.0%
Equity Income Fund - I Class1 19.0% -12.34% -9.21% 4.82% 10.70% 6.53%
Balanced Fund - I Class1 19.0% -8.06% -4.85% 4.94% 9.68% 5.63%
Real Assets Fund - I Class1 2.00% -10.29% -11.36% 0.58% N/A N/A
WBDEP Weighted Benchmark -2.96% -2.23% 3.90% 6.24% 5.11%


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, 2018

The Balanced Index Pool had a return of -7.96%, compared with -7.90% for its weighted benchmark. The largest absolute decline came from the Extended Equity Market Index Fund. Absolute gains came from the U.S. Bond Index Fund.

BALANCED INDEX POOL
PERFORMANCE AS OF December 31, 2018
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (8/31/04)
T. Rowe Price Balanced Index Pool -7.96% -5.38% 3.80% 7.71% 5.53%
Underlying Funds Weight 1.66% -0.01% 2.56% 3.51% 3.79%
U.S. Bond Index Fund 40.0%
Equity Index 500 Fund - I Class1 29.9% -13.53% -4.44% 8.34% 12.90% 7.88%
Extended Equity Market Index Fund 10.0% -18.11% -9.66% 5.16% 13.52% 8.97%
International Equity Index Fund 17.1% -12.70% -14.27% 0.53% 6.18% 4.84%
Real Assets Fund - I Class1 3.0% -10.29% -11.36% 0.58% N/A N/A
WBBAX Weighted Benchmark -7.90% -4.73% 4.60% 8.52% 6.27%


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, 2018

The Moderate Growth Pool posted a return of -9.77%, while its weighted benchmark returned -8.98%. In absolute terms, the Spectrum Income Fund, the pool’s largest component, detracted. The International Value Equity Fund also declined.

MODERATE GROWTH POOL
PERFORMANCE AS OF December 31, 2018
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Moderate Growth Pool -9.77% -6.98% 4.15% 9.57% 5.00%
Underlying Funds Weight -1.50% -2.62% 2.79% 5.99% 5.65%
Spectrum Income Fund 30.00%
Equity Index 500 Fund - I Class1 5.45% -13.53% -4.44% 8.34% 12.90% 4.92%
Growth Stock Fund - I Class1 15.20% -14.10% -0.89% 10.22% 16.14% 6.56%
Equity Income Fund - I Class1 15.20% -12.34% -9.21% 4.82% 10.70% 6.53%
Mid-Cap Growth Fund - I Class1 2.85% -13.11% -1.91% 9.51% 16.28% 9.01%
Mid-Cap Value Fund - I Class1 2.85% -14.48% -10.48% 5.89% 13.04% 10.03%
Small-Cap Stock Fund - I Class1 5.00% -16.16% -3.10% 6.58% 15.14% 8.90%
International Stock Fund - I Class1 8.55% -12.16% -13.81% 2.24% 8.75% 2.94%
International Value Equity Fund - I Class1 8.55% -13.88% -18.04% -1.70% 5.60% 3.88%
Emerging Markets Stock Fund - I Class1 2.85% -6.71% -15.96% 3.89% 9.46% 7.59%
Real Assets Fund - I Class1 3.50% -10.29% -11.36% 0.58% N/A N/A
WBMPP Weighted Benchmark -8.98% -5.34% 4.98% 9.22% 5.25%


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, 2018

The Growth Pool returned -13.18%, against the -13.38% return of its weighted benchmark. The Growth Stock Fund, Mid-Cap Value Fund and International Value Equity Fund declined in absolute terms.

GROWTH POOL
PERFORMANCE AS OF December 31, 2018
Total Return Annualized
3 Months 1 Year 5 Years 10 Years
Since Inception (9/30/00)
T. Rowe Price Growth Pool -13.18% -8.82% 4.85% 11.14% 5.08%
Underlying Funds Weight -13.53% -4.44% 8.34% 12.90% 4.92%
Equity Index 500 Fund - I Class1 10.20%
Growth Stock Fund - I Class1 20.45% -14.10% -0.89% 10.22% 16.14% 6.56%
Equity Income Fund - I Class1 20.45% -12.34% -9.21% 4.82% 10.70% 6.53%
Mid-Cap Growth Fund - I Class1 4.05% -13.11% -1.91% 9.51% 16.28% 9.01%
Mid-Cap Value Fund - I Class1 4.05% -14.48% -10.48% 5.89% 13.04% 10.03%
Small-Cap Stock Fund - I Class1 7.35% -16.16% -3.10% 6.58% 15.14% 8.90%
International Stock Fund - I Class1 12.10% -12.16% -13.81% 2.24% 8.75% 2.94%
International Value Equity Fund - I Class1 12.10% -13.88% -18.04% -1.70% 5.60% 3.88%
Emerging Markets Stock Fund - I Class1 4.25% -6.71% -15.96% 3.89% 9.46% 7.59%
Real Assets Fund - I Class1 5.00% -10.29% -11.36% 0.58% N/A N/A
WBGRP Weighted Benchmark -13.38% -7.85% 5.85% 11.42% 4.73%


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.

T. Rowe Price Global Equity Pool Performance — December 31, 2018

The Global Equity Pool returned -12.58%, compared with a -12.65% return for its weighted benchmark. The Mid-Cap Value Fund, Global Stock Fund and International Value Equity Fund had declines in absolute returns.

GLOBAL EQUITY POOL
PERFORMANCE AS OF December 31, 2018
Total Return Annualized
3 Months
1 Year
5 Years
Since Inception (6/30/08)
T. Rowe Price Global Equity Pool -12.58% -10.19% 4.33% 4.43%
Underlying Funds Weight -14.01% -4.28% 9.03% 5.54%
Global Stock Fund - I Class1 22.30%
International Growth & Income Fund- I Class1 12.35% -13.88% -18.04% -1.70% 0.79%
International Equity Index Fund 16.60% -12.70% -14.27% 0.53% 1.58%
Emerging Markets Stock Fund - I Class1 9.95% -6.71% -15.96% 3.89% 1.21%
Equity Index 500 Fund - I Class1 14.50% -13.53% -4.44% 8.34% 8.73%
Value Fund - I Class1 11.15% -10.45% -9.32% 6.00% 8.31%
Mid-Cap Growth Fund - I Class1 2.40% -13.11% -1.91% 9.51% 10.74%
Mid-Cap Value Fund - I Class1 2.40% -14.48% -10.48% 5.89% 8.80%
Small-Cap Stock Fund - I Class1 3.35% -16.16% -3.10% 6.58% 11.15%
Real Assets Fund - I Class1 5.00% -10.29% -11.36% 0.58% N/A
WBGEP Weighted Benchmark -12.65% -8.93% 4.82% 5.13%


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
Bloomberg 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.


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