The Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Funds by ECM.
Investment Performance
The Board received and considered information regarding the investment performance of each Fund. The Board reviewed performance information for each Fund’s Investor Class and Institutional Class as compared against a composite of multiple indices and a “performance universe” of peer funds compiled by Broadridge, based on Lipper fund classification schema. This performance data included, among other things, annualized returns for the one-, three-, five- and ten-year periods ended December 31, 2023 with respect to the Investor Class and, for the Institutional Class, annualized returns for the one-, three- and five-year periods ended December 31, 2023. In evaluating the performance of the Funds, the Board noted how each Fund performed relative to the returns of the applicable composite index and performance universe. In addition, the Board noted that it had also received and discussed at periodic intervals information comparing each Fund’s performance to that of its composite index and to a peer group of funds.
In evaluating each Fund’s investment performance, the Board considered each Fund’s quintile ranking within its performance universe - with the first quintile being the best performers and the fifth quintile being the worst performers - and made the following observations:
Empower Aggressive Profile Fund: For the Investor Class, the annualized returns for the one-, three-, five- and ten-year periods ended December 31, 2023 were in the fourth, first, second and first quintiles, respectively, of its performance universe, which exceeded its performance universe median for each period reviewed with the exception of the one-year period. As to the Institutional Class, the annualized returns for the one-, three- and five-year periods ended December 31, 2023 were in the fourth, first and second quintiles, respectively, of its performance universe, which, like the Investor Class, exceeded its performance universe median aside from the returns for the one-year period.
Empower Moderately Aggressive Profile Fund: The annualized returns of the Fund’s Investor Class for the one-, three-, five- and ten-year periods ended December 31, 2023 were in the fourth, third, fourth and third quintiles, respectively, of its performance universe, exceeding its performance universe median for the three-year period and specifically ranking in the 77th, 64th and 56th percentiles for the one-, five- and ten-year periods, respectively. The annualized returns of the Fund’s Institutional Class were in the fourth, second and third quintiles of its performance universe for the one-, three- and five-year periods ended December 31, 2023, respectively, exceeding its performance universe median for the three-year period and specifically ranking in the 70th and 55th percentiles for the one- and five-year periods, respectively.
Empower Moderate Profile Fund: With the exception of the one-year period ended December 31, 2023, the annualized returns of each class of the Fund exceeded its respective performance universe median for each period reviewed and ranked in the second quintile of its respective performance universe. As to the annualized returns of each class of the Fund for the one-year period ended December 31, 2023, such returns ranked in the third quintile of the respective performance universe, specifically ranking in the 54th percentile for the Investor Class and in the 51st percentile for the Institutional Class.
Empower Moderately Conservative Profile Fund: The annualized returns of the Fund’s Investor Class for the one-, three-, five- and ten-year periods ended December 31, 2023 were in the fifth, third, fourth and fourth quintiles, respectively, of its performance universe, exceeding its performance universe median for the three-year period. As to the Fund’s Institutional Class, the annualized returns for the one-, three- and five-year periods ended December 31, 2023 were in the fourth, third and fourth quintiles, respectively, of its performance universe, similarly exceeding its performance universe median for the three-year period.
Empower Conservative Profile Fund: For the Investor Class, the annualized returns for the one-, three-, five- and ten-year periods ended December 31, 2023 were in the fourth, first, third and second quintiles, respectively, of its performance universe, exceeding its performance universe median for each period with the exception of the one-year period. As to the Institutional Class, the annualized returns for the one-, three- and five-year periods ended December 31, 2023 were in the fourth, first and second quintiles, respectively, of its performance universe, similarly exceeding its performance universe median for each period aside from the one-year period.
In assessing the comparative performance information, including each Fund’s performance relative to its composite index which, with the exception of the Empower Conservative Profile Fund’s Institutional Class for the three- and five-year periods ended December 31, 2023 and the Empower Moderately Conservative Profile Fund’s Institutional Class for the three-year period ended December 31, 2023, underperformed its respective composite index, the Board considered ECM’s processes for monitoring Fund performance, as well as the regular reports provided to the Board from ECM regarding the ratings and
