Global Market Insights Strategy Team

Americas Europe Asia

Dr. David Kelly, CFA Karen Ward Tai Hui

Gabriela Santos
New York London Hong Kong
New York

Marcella Chow
Hugh Gimber, CFA
Hong Kong
London
Vincent Juvyns
Meera Pandit, CFA Luxembourg Shogo Maekawa
Jack Manley
New York Tokyo
New York
Ian Hui
Hong Kong
Aaron Hussein, CAIA
London
Tilmann Galler, CFA Fumiaki Morioka
Frankfurt Tokyo

Jennifer Qiu
Stephanie Aliaga Hong Kong
Jordan Jackson
New York New York Max McKechnie
London
Maria Paola Toschi Chaoping Zhu, CFA
Milan Shanghai

Mary Park Durham Brandon Hall

New York New York Natasha May
London Elena Domecq Raisah Rasid Arthur Jiang
Madrid Singapore Shanghai

Marina Valentini
São Paulo
Erin Erdoes Zara Nokes Lucia Gutierrez Mellado Sahil Gauba Agnes Lin Kerry Craig, CFA
New York London Madrid Mumbai Taipei Melbourne
S&P 500 Price Index
Jun. 30, 2024
5,800
P/E (fwd.) = 21.0x
Characteristic 3/24/2000 10/9/2007 2/19/2020 1/3/2022 6/30/2024 5,460
5,400 Index Level 1,527 1,565 3,386 4,797 5,460 Jan. 3, 2022
P/E Ratio (fwd.) 25.2x 15.1x 19.2x 21.4x 21.0x P/E (fwd.) = 21.4x
5,000 4,797
Dividend Yield 1.4% 1.9% 1.9% 1.3% 1.4%
4,600 10-yr. Treasury 6.2% 4.7% 1.6% 1.6% 4.4%
+53%
+114%
4,200
Feb. 19, 2020
3,800
P/E (fwd.) = 19.2x
-25%
3,386
3,400
Oct. 12, 2022
P/E (fwd.) = 15.7x
3,000
3,577
-34%
2,600
+401%
2,200
Mar. 24, 2000 Oct. 9, 2007 Mar. 23, 2020
P/E (fwd.) = 25.2x P/E (fwd.) = 15.1x P/E (fwd.) = 13.3x
1,800 1,527 1,565 2,237

1,400 +106% -49% +101%

-57%
1,000 Dec. 31, 1996 Oct. 9, 2002 Mar. 9, 2009
P/E (fwd.) = 15.9x P/E (fwd.) = 14.1x P/E (fwd.) = 10.4x
741 777 677
600
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
S&P 500 Index: Forward P/E ratio
30x
Std. dev.
Valuation measure Description Latest 30-year avg.*
over/under-valued
28x
P/E Forward P/E 21.01x 16.69x 1.33
CAPE Shiller's P/E 35.22x 27.80x 1.21
26x
Div. Yield Dividend yield 1.41% 1.99% 1.67
P/B Price to book 4.32x 3.15x 1.46
24x
P/CF Price to cash flow 16.08x 11.23x 2.12 Jun. 30, 2024:
EY Spread EY minus Baa yield -1.08% 0.04% 0.61 21.01x
22x
+1 Std. dev.: 19.94x
20x

18x
30-year average: 16.69x
16x

14x
-1 Std. dev.: 13.44x
12x

10x

8x
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Forward P/E and subsequent 1-yr. returns Forward P/E and subsequent 5-yr. annualized returns
S&P 500 Total Return Index S&P 500 Total Return Index
60% 60%

Jun. 30, 2024: 21.0x

Jun. 30, 2024: 21.0x
40% 40%

20% 20%

0% 0%

-20% -20%

-40% -40%

R² = 7% R² = 27%
-60% -60%
8.0x 11.0x 14.0x 17.0x 20.0x 23.0x 26.0x 8.0x 11.0x 14.0x 17.0x 20.0x 23.0x 26.0x
S&P 500 year-over-year pro-forma EPS growth S&P 500 profit margins
Annual growth broken into changes in revenue, profit margin and share count Quarterly earnings/sales
70% 14%
Share of EPS grow th 2024* Avg. '01-'23
Recession
60% Margin 9.7% 2.7% 13%
Revenue 1.1% 4.2%
Share count 0.0% 0.3%
48% 12%
50% Total EPS 10.8% 7.5%

40%
11%
40% '26F: 1Q24:
$310
'25F:
12.0%*
$279 10%
30% '24F:
24% $244
21% 9%
20%
14%15% 14%
12% 14% 8%
11% 11%
9%
10% 6% 6% 6% 7% 5%
0% 7%
1% 1% 0%

0%
6%
-3%

-10%
5%
-14%
-16%-16%
-20% -16% 4%
'01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '01 '04 '07 '10 '13 '16 '19 '22
S&P 500 pro-forma EPS growth by sector
Year-over-year
2022 2023 2024
Weight* 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QF 3QF 4QF
Tech. 32% 14 % 1% - 1% -9% -8% 4% 14 % 23% 25% 16 % 14 % 16 %
Financials 12 % - 19 % - 2 1% - 18 % - 13 % -5% -2% 12 % - 2 1% 9% 3% 0% 40%
Health Care 12 % 15 % 8% 0% -4% - 15 % -27% - 18 % - 15 % -25% 19 % 16 % 25%
Cons. Disc. 10 % -29% - 16 % 7% - 19 % 38% 48% 38% 27% 2 1% 5% 2% 17 %
Com m . Services 9% - 1% - 2 1% -23% -26% - 14 % 20% 44% 44% 42% 22% 12 % 16 %
Industrials 8% 38% 33% 20% 40% 24% 12 % 9% 4% 2% -6% 8% 7%
Cons. Staples 6% 8% 2% 1% 1% 3% 8% 7% 6% 6% 0% 4% 7%
Energy 4% 282% 3 0 1% 14 0 % 58% 19 % -49% -34% -23% -24% 11% -4% 0%
Utilities 2% 27% -4% -8% 10 % -23% -3% 10 % 3 1% 28% 11% 9% -2%
Materials 2% 47% 17 % - 12 % - 18 % -20% -24% - 16 % - 2 1% - 2 1% - 11% 8% 23%
Real Estate 2% 19 % 6% 11% 8% - 1% 5% - 1% 3% 6% - 1% 4% 4%
S&P 500 10 % 7% 3% -3% - 1% -4% 6% 4% 6% 8% 7% 17 %

Total shareholder yield by sector

Last 12-months dividends and buybacks minus issuance divided by market cap
8%
7.1%
Buyback yield
6% Dividend yield
3.8%
3.9% 3.7% 3.7%
4% 3.3% 1.8%
3.0% 2.9% 2.8%
0.8% 2.6%
2.2% 2.1%
2.0%
1.8% 1.7% 1.1%
2% 3.2% 1.0%
3.3% 3.0% 3.0% 3.5%
1.5% 1.4%
1.7% 1.5% 1.3% 1.8% 1.6%
0.4% 0.7% 0.7%
0%
-0.2%
-1.7%

-2%
Energy Cons. Staples Financials Comm. Svcs. Industrials S&P 500 Materials Utilities Health Care Cons. Disc. Info. Tech. Real Estate
Value vs. Growth relative valuations Value vs. Growth in different interest rate environments
Rel. fwd. P/E ratio of Value vs. Growth, 1997 - present Annualized total return by 10-year Treasury rate ranges, 1979 - present
1.2 20%
18.6%
Recession Growth cheap/Value
expensive
16.2%
1.0
16% 15.4% 15.0%
Growth

Value
0.8
12% 11.2%
10.5%
10.5% 10.3%
Long-term avg.*: 0.71

0.6
8%
Value cheap/Growth Jun. 30, 2024: 6.3%
expensive 0.54 5.7%
0.4

4%
Forward P/E Div. yield**
0.2 Long- Long-
Style Current Current
term avg.* term avg.*
Value 15.3x 14.1x 2.3% 2.6%
0%
Growth 28.4x 21.0x 0.7% 1.3% 0-2% 2-3% 3-4% 4-5% >5%
0.0 U.S. 10-year Treasury rate ranges
'97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 # of
months 59 80 60 74 274
Corporate cash as a % of current assets by sector Research & development and capex by sector
4Q23 Share of total S&P 500 R&D and capex by sector, current vs. average
60% 24%
Growth Growth - Capex Growth - R&D

Value - Capex Value - R&D

Value
49% 20%
50% 48%
46% Average (last 10 years)

40% 38% 16%

34%
31% 11%
30%
30% 28% 12% 8%
26% 27% 7%
24%

20% 8% 9%

2%
11%
9% 9%
10% 4% 8%
7% 7%
5%
4% 4%
2% 3%

0% 0%
P/E ratio of the top 10 and remaining stocks in the S&P 500 Weight of the top 10 stocks in the S&P 500
Next 12 months, 1996 - present % of market capitalization of the S&P 500
49x 40%
Current Average % of avg.
Jun. 30, 2024: 37.0%
Top 10 30.3x 20.4x 148% 36%
Remaining stocks 17.6x 15.7x 112%
44x 32%
S&P 500 21.0x 16.6x 127%
28%
39x 24%

20%
34x 16%

12%
29x '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Earnings contribution of the top 10 in the S&P 500
Based on last 12 months’ earnings
24x 36%

32%
Jun. 30, 2024: 26.8%
19x 28%

24%
14x 20%

16%
9x 12%
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Performance of “Magnificent 7” stocks in S&P 500* Earnings growth
Indexed to 100 on 1/1/2021, price return Pro-forma EPS, y/y
220 60%
Returns '21 '22 '23 YTD '24 50% Mag 7
50%
Magnificent 7 40% -40% 76% 33% S&P 500 ex-Mag 7
**Share of returns 33% 56% 63% 61% 40%
31% 30%
200 S&P 500 ex-Mag 7 17% -8% 8% 5% 28%
30%
**Share of returns 67% 44% 37% 39% 16% 17%17%
20%
9% 7%
10% 4% 5%
180
0%
-10% -4% -2%

160 -20% -14%

2022 2023 2024F 1Q24 2Q24F 3Q24F 4Q24F
Magnificent 7 performance dispersion
140 Price returns, best, median and worst performing Mag 7 stock by year
275%
Best: 239%

200%
120 149%
125%
125% Median
70%
100 50% 50%
Worst: 48% 29%
-25% 2% -27%
-44% -20%
80 -65%
-100%
'21 '22 '23 '24 2021 2022 2023 YTD '24
Sector composition Percent of unprofitable companies
% of index market capitalization Pro-forma EPS
32% 60%
Large cap Small cap 53%
Info. Tech. 14%
15% Mid cap
50% 46%
12% 44%
41%
Financials 16%
16% 40% 37%
32% 32%
12% 29%
Health Care 9% 30% 28%
15%
20% 19%
10% 20%
Cons. Discretionary 10%
10%
10% 7%
9%
Comm. Svcs. 3%
2%
0%
8% Tech bubble Financial crisis COVID-19 Current
Industrials 20%
17% Interest rate coverage ratios
6% EBIT/interest expense on debt, monthly, LTM, 1998 - present
Cons. Staples 3%
4% Growth Value 10x
4% Large cap 63% 37%
Energy 5% 8x
7% Mid cap 37% 63% Average
2% Small cap 43% 57%
Utilities 5% 6x
3%
2% 4x
Materials 5%
5%
2% 2x
Real Estate 8%
6%
0x
0% 5% 10% 15% 20% 25% 30% 35% '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
 10-year annualized YTD
Current P/E vs. 20-year avg. P/E
Value Blend Growth Value Blend Growth Value Blend Growth
15.3 21.0 28.4
Large

Large

Large
8.2% 12.9% 16.3% 6.6% 15.3% 20.7%
13.7 15.7 19.0

14.9 17.0 25.6

Mid

Mid

Mid
7.6% 9.1% 10.5% 4.5% 5.0% 6.0%
14.5 16.4 20.6
Small

Small

Small
16.1 21.7 32.9
6.3% 7.0% 7.4% -0.8% 1.7% 4.4%
16.7 21.4 32.3

Since market peak (February 2020) Since market low (March 2020) Current P/E as % of 20-year avg. PE
Value Blend Growth Value Blend Growth Value Blend Growth
Large

Large

Large
39.7% 72.9% 97.4% 125.9% 161.2% 188.0% 111.3% 134.0% 149.2%
Mid

Mid

Mid
37.2% 40.7% 39.7% 142.6% 135.5% 117.2% 102.8% 103.6% 124.3%
Small

Small

Small
33.2% 28.3% 20.2% 134.3% 116.3% 95.4% 96.7% 101.6% 102.0%
 Cons. Comm. Real Health Cons. S&P 500
Energy Materials Financials Industrials Disc. Tech. Services* Estate Care Staples Utilities Index
S&P weight 3.6% 2.2% 12.4% 8.1% 10.0% 32.4% 9.3% 2.2% 11.7% 5.8% 2.3% 100.0%

Weight
Russell Growth weight 0.5% 0.6% 5.7% 5.1% 14.1% 46.8% 12.7% 0.7% 10.1% 3.8% 0.1% 100.0%
Russell Value weight 8.0% 4.7% 22.9% 14.3% 4.7% 9.5% 4.5% 4.6% 13.9% 7.9% 5.0% 100.0%
Russell 2000 weight 7.5% 4.5% 16.0% 17.2% 10.4% 15.3% 2.2% 5.6% 15.2% 3.5% 2.6% 100.0%
QTD -2.4 -4.5 -2.0 -2.9 0.6 13.8 9.4 -0.8 -1.0 1.4 4.7 4.3

Return (%)
YTD 10.9 4.0 10.2 7.8 5.7 28.2 26.7 -1.9 7.8 9.0 9.4 15.3
Since market peak
104.3 60.3 45.1 56.8 47.7 151.0 67.4 9.1 51.2 39.4 12.5 72.9
(February 2020)
Since market low
363.4 150.8 154.2 168.8 116.3 264.6 134.4 75.2 109.7 83.6 74.7 161.2
(March 2020)
Beta to S&P 500 1.2 1.1 1.1 1.1 1.2 1.2 1.0* 0.9 0.7 c 0.6 0.5 1.0

β
Correl. to Treas. yields -0.1 -0.6 -0.5 -0.5 -0.6 -0.7 -0.8 -0.8 -0.6 -0.6 -0.6 -0.7

% ρ
Foreign % of sales 39.0 51.9 28.1 33.2 33.2 57.4 48.1 16.9 34.4 39.8 1.3 41.4
NTM earnings growth 2.5% 7.0% 11.4% 10.9% 14.1% 19.4% 17.8% 2.8% 13.5% 6.4% 9.5% 12.8%

EPS
20-yr avg. 100.2% 13.2% 20.6% 13.8% 16.8% 12.1% 11.3%* 6.9% 7.9% 7.5% 4.7% 10.9%
Forward P/E ratio 12.0x 19.5x 15.1x 20.5x 24.5x 30.4x 19.4x 16.5x 19.0x 20.0x 16.4x 21.0x

P/E
20-yr avg. 13.5x 15.0x 12.5x 16.3x 19.7x 18.0x 18.7x* 17.1x 15.0x 17.5x 15.7x 15.7x
Buyback yield 3.8% 1.1% 2.0% 1.8% 1.5% 1.4% 3.2% -1.7% 1.0% 0.8% -0.2% 1.7%

Bbk
20-yr avg. 1.8% 1.0% 0.5% 2.3% 2.5% 3.0% 1.8% -1.4% 1.9% 1.8% -0.7% 1.8%
Dividend yield 3.3% 1.9% 1.8% 1.6% 0.8% 0.7% 0.9% 3.9% 1.7% 2.8% 3.4% 1.4%

Div
20-yr avg. 2.8% 2.4% 2.3% 2.2% 1.4% 1.2% 1.1%* 3.8% 1.9% 2.9% 3.8% 2.1%
S&P intra-year declines vs. calendar year returns
Despite average intra-year drops of 14.2%, annual returns were positive in 33 of 44 years
40%
34% YTD
31%
30% 29% 27%
26% 27% 26% 27% 26%
26% 24%
23%
20% 20% 19%
20% 17% 16%
15% 15% 14% 14%
12% 13% 13%
11%
9% 10%
7%
4% 4%
2% 3%
1%
0%
-6% -2%-3% 0% -6% -1%
-7% -3%
-7%-6% -5% -5%
-8%-8% -8% -12% -8% -7% -6%-7% -5%
-7% -8% -9% -8%
-10% -9% -11% -10% -10% -10% -11% -10%
-17% -12%
-13% -13% -14%
-20% -17%-18% -16%
-17% -19%
-20% -19% -19% -20%
-23%
-25%
-28%
-30%
-34% -34% -34%
-40% -38%

-49%

-60%
'80 '85 '90 '95 '00 '05 '10 '15 '20
Real GDP Components of GDP
Trillions of chained (2017) dollars, seasonally adjusted at annual rates 1Q24 nominal GDP, USD trillions
$24 $29 4.0% Housing

13.7% Investment ex-housing

$25
GDP (%) 2Q23 3Q23 4Q23 1Q24
$22
Q/Q saar 2.1 4.9 3.4 1.4
Y/Y 2.4 2.9 3.1 2.9 17.5% Gov't spending
$21

$20
Trend growth:
$17
2.0%

$18
$13

67.7% Consumption
$9
$16

$5
$14

$1

$12 -3.0% Net exports

'01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 -$3
Residential investment as a % of GDP Business fixed investment as a % of GDP
Quarterly, seasonally adjusted Quarterly, seasonally adjusted
7% 16%
Recession
6% 15%
1Q24: 13.6%
14%
5%
13%
4%
Average: 4.4% 12% Average: 12.9%
1Q24: 4.0%
3% 11%

2% 10%
'68 '73 '78 '83 '88 '93 '98 '03 '08 '13 '18 '23 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13 '18 '23

Light vehicle sales Total business inventory/sales ratio

Mil vehicles, seasonally adjusted ann. rate Days of sales, monthly, seasonally adjusted
20 55
May 2024:
53
18 15.9m
51
16 49
47
14 Average: 14.8m 45
43
12 Average: 43.0 days
41
10 39
37 Apr. 2024: 41.7 days
8 35
'76 '81 '86 '91 '96 '01 '06 '11 '16 '21 '81 '86 '91 '96 '01 '06 '11 '16 '21
The 2024 federal budget Federal deficit and net interest outlays
USD trillions % of GDP, 1973-2034, CBO Baseline Forecast
$8.0 -15%
Forecast
Total deficit or surplus
Total spending: $6.8tn -11%
$7.0
TCJA
extension*
Other: $908bn (13%)
$6.0 -7%
Borrowing: $1,915bn (28%) Net interest outlays
Net int.: $892bn (13%)
$5.0 -3%
Non-defense disc.: Other: $239bn (4%)
$904bn (13%)
Social 1%
$4.0 Primary deficit or surplus
Defense: insurance:
$954bn (14%) $1,678bn (25%)
5%
$3.0 '73 '78 '83 '88 '93 '98 '03 '08 '13 '18 '23 '28 '33
Social Corporate: $525bn (8%)
Security:
$2.0 $1,452bn (21%) Federal net debt (accumulated deficits)
% of GDP, 1940-2034, CBO Baseline Forecast, end of fiscal year
Incom e: TCJA 2034:
Medicare & $2,447bn (36%) 140%
$1.0 Medicaid: extension* 133.5%
$1,696bn (25%) 120% 2024:
$0.0 99.0%
Total government spending Sources of financing 2034:
100% 122.4%
CBO's Baseline economic assumptions 80%
2024 '25-'26 '27-'28 '29-'34
Real GDP grow th 2.9% 2.0% 1.7% 1.8% 60%
10-year Treasury 4.5% 4.0% 3.6% 4.0% Forecast
40%
Headline inflation (CPI) 3.2% 2.4% 2.2% 2.2%
Unem ploym ent 3.8% 4.0% 4.3% 4.5% 20%
'40 '48 '56 '64 '72 '80 '88 '96 '04 '12 '20 '28
Consumer balance sheet Household debt service ratio
1Q24, USD trillions, not seasonally adjusted Debt payments as % of disposable personal income, SA
$200 14%
4Q07: 13.3%
Total assets: $181.4tn 13%
$180
12%
1Q80:
$160 11% 10.6%
Homes: 28% 2Q24**:
9.7%
10%
$140
9%
Other tangible: 5%
$120 8%
Deposits: 8% '80 '85 '90 '95 '00 '05 '10 '15 '20

$100 Flows into early delinquencies

Pension funds: 18% % of balance delinquent 30+ days
$80 Other non-revolving: 2% 16%
Revolving*: 6% 14%
Auto loans: 8% 12%
$60
Other liabilities: 10%
10%
Student debt: 9%
$40 8%
Other financial assets: 42%
6% Loans 1Q24
Total liabilities: $20.6tn Auto 7.9%
$20 4%
Credit card 8.9%
2%
Mortgages: 66% Student loan 1.0%
$0 0%
Assets Liabilities '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
Personal saving rate Household excess savings
Personal savings as a % of disposable personal income, annual Trillions of USD
Peak excess savings:
18% 7.0 $2.3tn
2.8

Accumulated excess savings

6.0 2.3

Personal Savings (SAAR)

Personal savings
16% 5.0 1.8

4.0 1.3
14% 3.0 0.8
Excess savings
remaining: $0.6tn
2.0 0.3
12%
1.0 -0.2
2024 YTD: 3.8% Pre-pandemic trend
0.0 -0.7
10% '18 '19 '20 '21 '22 '23 '24
Average: 8.5%
Inflation-adjusted growth in deposits by income percentiles
8% Checking and savings account balances, % change from 4Q19 to 1Q24
40% Peak growth
achieved
6% 30%

20%

4% 10%
4% 13% 0% 8% 7% 5%
0%
2% -10% -21%

-20%
0% -30%
0-20% 20-40% 40-60% 60-80% 80-99% Top 1% Total
Income percentile group
Consumer Sentiment Index and subsequent 12-month S&P 500 returns
120
Avg. subsequent 12-mo. S&P 500 returns Recession
Jan. 2000: -2.0%
9 sentiment peaks +3.5%
9 sentiment troughs +24.1% Jan. 2004:
110
+4.4%
Feb. 2020:
Aug. 1972: Mar. 1984: +13.5% +29.0%
-6.2% Jan. 2007:
Jan. 2015: -2.7%
100 -4.2%
Apr.
May 1977: +1.2% 2021:
-1.2%
90

Average: 84.6 Jun.

80
2024:
68.2
Mar. 2003: Apr. 2020:
+32.8% Oct. 2005: +43.6%
70
+14.2%

60 Oct. 1990: +29.1%

Feb. 1975:
50 +22.2% Nov. 2008: Aug. 2011:
May 1980: Sentiment cycle turning point and subsequent +22.2% +15.4%
+20.0% 12-m onth S&P 500 Index return Jun. 2022: +17.6%

40
'71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
Civilian unemployment rate and year-over-year wage growth
Private production and non-supervisory workers, seasonally adjusted, percent
16%
Apr. 2020: 14.8%

50-year avg.
14%
Unemployment rate 6.2%
Wage growth 3.9%
12%
Nov. 1982: 10.8%
Oct. 2009: 10.0%
10%
May 1975: 9.0%

Jun. 1992: 7.8% Mar. 2022:

8% 7.0%
Jun. 2003: 6.3%
6%

4%

2%
May 2024: 4.2%
May 2024: 4.0%
0%
'73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
JOLTS job openings* JOLTS quits
Total job openings, thousands, seasonally adjusted Total nonfarm quits, thousands, seasonally adjusted
14,000 5,000
Recession Apr. 2024: 3,507
Mar. 2022:
12,182 4,000
12,000
3,000

10,000 2,000

Apr. 2024: 1,000

8,059 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
8,000

JOLTS layoffs
Total nonfarm layoffs, thousands, seasonally adjusted
6,000
13,500
4,000

3,500
4,000
3,000

2,500
2,000 2,000

1,500
Apr. 2024: 1,515
0 1,000
'73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Nonfarm payroll gains Labor force growth, native and immigrant contribution
Month-over-month change and 3mo. moving average, SA Year-over-year difference, end of year, aged 16+, millions
1000 3

2
May '24
900 1
Payroll gain 272K
3mo. avg 249K 0
800 -1

-2
700 Foreign born
-3
Native born
-4
600 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23

500 Labor force participation

% of civilian noninstitutional population, SA
65% 78%
400 Total labor force
64% 77%
300
63% 76%

200 62% 75%

61% 74%
100
60% 73%
Aged 18-64
0 59% 72%
Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 Jul '23 Jan '24 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
CPI and core CPI
% change vs. prior year, seasonally adjusted
15%
50-yr. avg. Apr. 2024 May 2024
Recession Headline CPI 3.8% 3.4% 3.3%
Core CPI 3.8% 3.6% 3.4%
12% Food CPI 3.7% 2.2% 2.1%
Energy CPI 4.1% 2.5% 3.5%
Headline PCE deflator 3.3% 2.7% 2.6%
Core PCE deflator 3.3% 2.8% 2.6%
9%

6%

3%

0%

-3%
'74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Contributors to headline CPI inflation
Contribution to y/y % change in CPI, non-seasonally adjusted
10%
9.1% Energy Core goods
9% 8.5% 8.6% 8.5%
8.3% 8.3% Shelter Food at home
8.2%
7.9% 7.7% Dining, recreation and other svcs.
8% 7.5%
7.0% 7.1% Auto insurance
6.8%
7% 6.5%
6.2% 6.4%
6.0%
6% 5.4% 5.4%
5.4%5.3%
5.0% 5.0%
4.9%
5%
4.2% 4.0%
3.7%3.7%
4% 3.4%
3.5%
3.2% 3.2% 3.2% 3.4%
3.0% 3.1% 3.1% 3.3%
3% 2.6%

2%

1%

0%

-1%

-2%
Mar '21 Jul '21 Nov '21 Mar '22 Jul '22 Nov '22 Mar '23 Jul '23 Nov '23 Mar '24
Capex from the major AI hyperscalers* Global electricity demand from data centers and crypto
USD billions Terawatt-hour (TWh), 2022-2026**
200 1000
183 Data centers
800
180 1.8x
Cryptocurrencies
600
160
400

140
200
126
123
120 0
2022 2026E

100
AI adopters
92
% of firms reporting use of AI applications by sector, as of Feb. 2024
Information 18%
80 73
65 67 Professional and Technical 12%

60 Educational Services 9%
Real Estate 8%
40
40 Finance and Insurance 7%
31
23 25 Entertainment and Recreation 5%
17 Current
20 Health Care and Social Assistance 5%
5 7 4 7 8 10 Next 6 months
2 2 4 Total 5%
0
'04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 0% 5% 10% 15% 20% 25%
Change in production and consumption of liquid fuels Price of oil
Production, consumption and inventories, millions of barrels per day WTI crude, nominal prices, USD/barrel
Production '19 '20 '21 '22 '23* '24* '25* '19-'25 $160
Jul. 3, 2008:
U.S. 19.5 18.6 19.0 20.3 21.9 22.4 23.1 18.5% $145.29
OPEC 33.1 29.4 30.5 32.9 32.2 32.0 32.4 -2.0%
Russia 11.5 10.5 10.8 11.0 10.8 10.4 10.5 -8.6% $140
Mar. 8, 2022:
Global 100.3 93.9 95.7 100.0 101.8 102.6 104.7 4.4% $123.7
Consum ption
U.S. 20.5 18.2 19.9 20.0 20.3 20.3 20.6 0.4% $120 Jun. 13,
2014:
China 14.0 14.4 15.5 15.2 16.1 16.4 16.8 19.6% $106.91
India 4.9 4.5 4.7 5.1 5.3 5.6 5.9 19.1%
Global 100.9 91.6 97.6 99.9 101.9 103.0 104.5 3.6% $100
Inventory Change -0.6 2.3 -1.9 0.0 -0.1 -0.4 0.2
Oct. 3, 2018:
$80 $76.41
U.S. crude oil inventories and rig count**
Million barrels, number of active rigs
1,300 2,250 Jun. 30,
Active rigs $60
2024:
1,200 1,750 $81.54

1,100
1,250 $40
1,000
750 Feb. 12,
900 $20 2009: $33.98 Feb. 11,
2016: $26.21
800 250
Inventories (incl. SPR) Apr. 21, 2020: $11.57
700 -250 $0
'13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Federal funds rate expectations
FOMC and market expectations for the federal funds rate
8%
FOMC June 2024 forecasts
Percent
Long
7% 2024 2025 2026
run*
Change in real GDP, 4Q to 4Q 2.1 2.0 2.0 1.8
Unemployment rate, 4Q 4.0 4.2 4.1 4.2
6% Headline PCE inflation, 4Q to 4Q 2.6 2.3 2.0 2.0
Core PCE inflation, 4Q to 4Q 2.8 2.3 2.0 5.38%
5.10%
5% Federal funds rate
FOMC year-end estimates
4.87%
Market expectations 4.10%
4%
FOMC long-run projection* 3.99%
3.73%
Range of market expectations since Dec. '23 SEP
3% 3.10%

2.80%

2%

1%

0%
'93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '27
Long run
The Federal Reserve balance sheet
USD trillions
$10
Forecast*
Periods of balance sheet expansion (QE) and contraction (QT), USD billions
$9
Announced Terminated Length (m) Treasuries MBS Loans** Balance sheet Loans
QE1 11/25/2008 3/31/2010 16 $300 $1,074 $959 $1,403
$8
QE2 11/3/2010 6/29/2012 19 $829 -$196 $117 $568
QE3 9/13/2012 10/29/2014 25 $822 $874 $7 $1,674
$7 QT1 9/20/2017 7/31/2019 22 -$371 -$257 $0 -$660
QE4 3/23/2020 3/15/2022 24 $3,286 $1,343 $205 $4,779
$6 QT2 5/4/2022 Ongoing 25 -$1,310 -$379 $121 -$1,708

$5

Other
$4

MBS
$3

$2

Treasuries
$1

$0
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26
Nominal and real U.S. 10-year Treasury yields
20%

Sep. 30, 1981:

15.84%
Average
15% (1958 - present) Jun. 30, 2024
Nominal yields 5.75% 4.36%
Real yields 1.94% 0.95%
Inflation 3.81% 3.41%

Nominal 10-year U.S. Treasury yield

10%

Jun. 30, 2024:

4.36%
5%

Real 10-year U.S. Treasury yield

0%

Jun. 30, 2024:

0.95%
-5%
'58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21 '24
 Yield Return Impact of a 1% rise or fall in interest rates
2024 Avg. Correlation Correlation Total return, assumes a parallel shift in the yield curve
U.S. Treasuries 6/30/2024 12/31/2023
YTD Maturity to 10-year to S&P 500
2Y UST 6.6%
2.8%
2-Year 4.71% 4.23% 1.10% 2 years 0.76 0.00

5Y UST 8.8%
5-Year 4.33% 3.84% -0.42% 5 0.94 -0.03
-0.1%

TIPS 7.0%
TIPS 2.08% 1.72% 0.70% 7.1 0.72 0.33 -2.8%

10Y UST 12.3%

10-Year 4.36% 3.88% -2.03% 10 1.00 -0.08 -3.5%

30Y UST 20.6%

30-Year 4.51% 4.03% -6.20% 30 0.93 -0.12 -11.5%

U.S. Aggregate 11.1%

Sector -1.1%

IG Corps 12.4%
U.S. Aggregate 5.00% 4.53% -0.71% 8.4 0.89 0.25 -1.4%

Convertibles 9.1%
IG Corps 5.48% 5.06% -0.49% 10.7 0.67 0.48 5.5%

U.S. HY 11.1%
Convertibles 7.01% 7.26% 1.87% - -0.06 0.86
4.8%

Municipals 9.7%
U.S. HY 7.91% 7.59% 2.58% 4.9 0.06 0.78
-2.3%

Municipals 3.72% 3.22% -0.40% 13.4 0.71 0.26 MBS 11.3%

-0.9%

MBS 5.22% 4.68% -0.98% 7.7 0.80 0.26 ABS 1% fall 8.0%
2.7%
ABS 5.78% 5.65% 3.09% 3.6 0.36 0.24 1% rise 9.8%
Leveraged Loans
10.6%
Leveraged Loans 10.16% 10.59% 4.62% 4.6 -0.22 0.62 -20% -10% 0% 10% 20% 30%
U.S. Treasury yield curve
6.0%

Oct. 19, 2023 (10-year Treasury peak)

5.0%
5.1% 4.6%
Jun. 30, 2024 (Current) 4.5%
4.7% 4.3% 4.3% 4.4%
4.5%
4.0%
Jul. 3, 2023 (Peak inversion*)

3.0%

2.0%

1.0%

Aug. 4, 2020 (10-year Treasury trough)

0.0%
3m 1y 2y 3y 5y 7y 10y 20y 30y
Default rate and spread-to-worst
Percent
20%
Long-run avg. Jun. 30, 2024
Default rate 3.52% 2.02%
Spread-to-worst 5.63% 3.37%
16% Recovery rate 40.00% 35.30%

12%

Recession

8%

4%

0%
'90 '93 '96 '99 '02 '05 '08 '11 '14 '17 '20 '23
U.S. credit maturity schedule Index weighting by credit rating
% of bond index maturing in each year %, J.P. Morgan Domestic High Yield Index
24%
Investment grade BBB Dec '07
22%
High yield Jun '24
BB
20%

18% B

16% CCC/NR

14% 0% 10% 20% 30% 40% 50% 60%

12%
U.S. high yield default rates
By credit rating
24%
10% 25yr Avg. Last 12m
BB 0.72% 0.00%
20%
B 2.53% 1.04%
8%
CCC/Split CCC 6.71% 4.77%
16% High yield 3.00% 1.25%
6%
12%

4%
8%

2% 4%

0% 0%
2024 2025 2026 2027 2028 2029 2030 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
Yield-to-worst across fixed income sectors
Percent, past 10 years Axis
8.0% 16.0%
10-year range 10-year median Current

7.0% 14.0%

6.0% 12.0%
6.3%
10.2%
5.0% 5.5% 10.0%
5.2% 5.3%
8.4%
4.6% 7.9%
4.0% 8.0%
6.7% 7.0%
3.9% 3.3% 6.6%
3.8% 6.3% 6.1%
2.8% 5.7% 6.0%
3.0%
6.3%

1.9% 5.2%
1.8% 4.0%
2.0% 4.5%

1.0% 2.0%
1.0%

0.0% 0.0%
U.S. Municipals* IG corps MBS ABS Euro IG EMD ($) EMD (LCL) EM Corp Euro HY U.S. HY Leveraged
Treasuries Loans
 Yield 2024 Return Global bond market
Correlation USD trillions
Aggregates 6/30/2024 12/31/2023 Local USD Duration $150
to U.S. 10yr
12/31/1989 12/29/2023
U.S. 5.00% 4.53% -0.71% -0.71% 6.1 years 0.92 $140
U.S. 56.9% 38.1%
$130 Dev. ex-U.S. 41.7% 35.4%
Gbl. ex-U.S. 3.18% 2.87% - -4.71% 6.9 0.64
EM 1.4% 26.6%
$120
Japan 1.16% 0.76% -2.43% -14.49% 8.9 0.64
$110
Germ any 3.14% 2.73% -0.83% -3.78% 6.2 0.57
$100
UK 4.60% 4.10% -1.87% -2.70% 8.0 0.56
$90
EM: $40tn
Italy 3.82% 3.40% -0.21% -3.19% 6.1 0.44 $80

China 2.17% 2.62% 3.88% 1.39% 6.0 0.55 $70

$60 Developed
Sector ex-U.S.: $51tn
$50
Euro Corp. 3.82% 3.56% 0.54% -2.45% 4.4 years 0.45
$40
Euro HY 7.02% 7.35% 3.23% 0.15% 3.1 0.05
$30

EMD (USD) 8.41% 7.84% - 2.34% 5.7 0.37 $20

U.S.: $55tn
EMD (LCL) 6.60% 6.19% 1.58% -3.71% 5.0 0.26 $10

EM Corp. 6.70% 6.81% - 3.85% 5.0 0.27

$0
'89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21
Muni tax-equivalent and Treasury yield curves State and local and federal net debt
9% % of GDP, 1930-2023, end of fiscal year
120%

100% FY23:
8.0% 97.6%
8% Federal debt
80%
7.5%
BBB Muni tax-equivalent yield curve
60%

7% 40%
State and local debt FY23:
6.4% AAA Muni tax-equivalent yield curve 13.1%
6.3% 6.3% 20%
6.2% 6.3%

5.8% 0%
6%
'30 '36 '42 '48 '54 '60 '66 '72 '78 '84 '90 '96 '02 '08 '14 '20

5.3%
5.1% Muni and corporate default rates
4.9% 4.9% 4.9% % of issuers defaulting within 10 years, 1970-2022
5%
U.S. Treasury yield curve 60%
Municipals
4.6% 47.9%
4.5% 4.5% 50%
4.3% 4.3% 4.4% Corporates
4%
40% 34.7%

30%
23.6%
3% 20% 15.8% 16.6%

10% 0.7% 1.9% 3.6%

0.3% 3.3%
0.0% 0.0% 0.1% 1.0%
2% 0%
3m 1y 2y 3y 5y 7y 10y 20y 30y Aaa Aa A Baa Ba B Caa-C
Bloomberg U.S. Aggregate intra-year declines vs. calendar year returns
Despite average intra-year drops of 3.5%, annual returns were positive in 43 of 48 years
40%

33

30%

22

20% 19
16 15 16
15 15
12
10 10 10
10% 8 9 9 8 9
8 7 8 8
6 7 7
5 6 6 6 YTD
4 4 4 4 4
3 3 3 2 3 4
1 2
1 0
0%
-1 -2 -1
-1
-2 -2 -2 -2 -2 -2 -2 -3 -1 -2 -2 -3 -2 -2 -1 -2 -1 -2
-4
-2 -3
-4 -3 -4 -2 -2 -2 -2 -2
-3 -3 -3 -2 -4
-4 -4 -4 -4
-5 -5 -5 -5 -5 -5
-7 -6 -7
-10% -7
-9

-13

-17
-20%
'76 '81 '86 '91 '96 '01 '06 '11 '16 '21
Yield-to-worst and subsequent 5-year annualized returns
Bloomberg U.S. Aggregate Total Return Index
24%
2010s
22%
2000s
20%
1990s
Subsequent annualized five-year returns

18%
1980s
16%
1970s
14%
R² = 88%
12%
As of 6/30/24, a current yield of
10% 5.00%, implies a forward 5-yr. return
of 5.20%
8%

6%

4%

2%

0%

-2%
1% 3% 5% 7% 9% 11% 13% 15% 17% 19%
Starting yield
Returns YTD 2024 2023 15-years Share of global market capitalization
% weight in the MSCI All Country World Index, USD, monthly
Local USD Local USD Ann. Beta
70%
U.S. Europe ex-UK EM Japan 64%
Regions 60%

U.S. (S&P 500) - 15.3 - 26.3 14.8 1.0 50%

AC World ex-U.S. 11.0 6.0 14.7 16.2 6.7 1.0 40%

EAFE 11.5 5.7 16.8 18.9 7.3 1.0 30%

Europe ex-UK 10.3 6.2 17.3 22.7 8.1 1.2 20%

12%
Emerging markets 11.2 7.7 10.3 10.3 5.3 1.0 10% 10%
5%
0%
Selected Countries '87 '92 '97 '02 '07 '12 '17 '22
Japan 21.5 6.5 29.0 20.8 6.4 0.7 Revenue exposure vs. country of listing
% of total revenue derived from foreign countries
United Kingdom 7.8 6.9 7.7 14.1 6.5 1.0 100%

France 1.6 -1.4 18.1 22.3 7.8 1.2 79%

80%
Canada 6.0 2.2 13.3 16.4 6.8 1.1 66%
60% 54%
Germany 9.6 6.3 19.8 24.0 7.0 1.3
41%
China 5.2 4.8 -10.6 -11.0 2.8 0.9 40% 36%

Taiwan 37.0 29.6 31.1 31.3 13.8 1.0

20%
India 17.4 17.1 22.0 21.3 9.0 0.9

Brazil -6.9 -18.6 22.7 33.4 0.9 1.3 0%

UK Europe ex-UK Japan U.S. EM
Sources of global equity returns*
Total return, USD
40%

15-years ann. 2023 YTD 2024

30%
26.3%

22.7%
20.8%

20%
14.8% 15.3%

10.3%
10% 8.1% 7.7%
6.4% 5.3% 6.5% 6.2%
4.8%
2.8%

0%

Total return
Dividends
-10%
Multiples
Earnings -11.0%
Currency
-20%
U.S. Europe ex- Japan EM China U.S. Europe ex- Japan EM China U.S. EM Japan Europe ex- China
UK UK UK
U.S. dollar and interest rate differentials
3-month moving average
125 3.5%
Dollar index U.S. - international developed yields

115
2.5%

105

1.5%

95

0.5%

85

-0.5%
75

65 -1.5%
'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
MSCI EAFE and MSCI USA relative performance
U.S. dollar, total return, cumulative outperformance
300%
299% 277%
(5.6 yrs) (14.2 yrs)

250%
U.S. outperformance 220%
EAFE outperformance (6.2 yrs)

200%

150%

80% 89% 87%

100% (3.9 yrs)
(2.5 yrs) (2.0 yrs) 65%
60% (7.2 yrs)
(4.7 yrs) 36% 8%
28% (1.4 yrs) (1.3 yrs)
50%
(3.3 yrs) 21%
(1.2 yrs)

0%

-50%
'71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13 '16 '19 '22
International: Price-to-earnings discount vs. U.S. International: Difference in dividend yields vs. U.S.
MSCI All Country World ex-U.S. vs. S&P 500, next 12 months MSCI All Country World ex-U.S. minus S&P 500, next 12 months
10% 2.0%
20-yr. avg. Current 20-yr. avg. Current
P/E ratio P/E ratio div. yield div. yield Jun. 30,
S&P 500 15.7x 21.0x S&P 500 2.1% 1.4% 2024:
5%
ACWI ex-U.S. 13.0x 13.5x ACWI ex-U.S. 3.3% 3.2% 1.8%
1.8%
0% +2 Std. dev.: 1.8%

-5% 1.6%
+1 Std. dev.: -7.5%

-10%
+1 Std. dev.: 1.5%
1.4%
-15% Average: -16.8%

Average: 1.2%
-20%
1.2%

-25% -1 Std. dev.: -26.1%

1.0% -1 Std. dev.: 1.0%

-30%

-2 Std. dev.: -35.5%

-35%
Jun. 30,
0.8%
-40% 2024:
-36.0%

-45% 0.6%
'04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Global earnings estimates Global valuations
Jan. 2005 = 100, next 12 months consensus estimates, U.S. dollars Current and 25-year next 12 months price-to-earnings ratio
400 37x
44x
Current
Recession
U.S. Jan. 1, 2024
China 33x
350
Japan 25-year range
Europe ex-UK
25-year average
EM
300 29x

250 25x

21.0x
200 21x

19.5x
150 17x 15.6x
14.1x

12.4x
100 13x 14.0x 13.5x

11.9x 9.6x
50 9x
9.3x

0 5x
'05 '07 '09 '11 '13 '15 '17 '19 '21 '23 U.S. Japan Europe ex-UK EM China
Top 50 performing companies globally International growth sectors vs. U.S. growth
# of companies listed internationally, MSCI All Country World Index Jan. 2015 = 100, total return, U.S. dollars
50 500
DM ex-U.S. EM Europe renewable energy
45 Europe luxury goods
450
Europe biotech
Average: 33 EM Asia tech
40
400 U.S. growth

35
350
30

300
25

250
20

200
15

10 150

5 100

0
'02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 YTD 50
'24 '15 '17 '19 '21 '23
Interest rate expectations Equity performance in different interest rate environments
Based on 5y5y swaps U.S. 10-year Treasury ranges, ann. avg. total equity return in USD, 1979-present
6% 18%
Style % Value % Growth
U.S. equities 37% 63%
16% Intl. dev. equities 61% 39% 15.3%
5% U.S. 14.6%
Eurozone 14% 13.5%
13.3%
Japan
4%
12%
11.0%
10.2%
10%
3%
7.9%
8%

2% 6.1%
6% 5.4%5.6%

1% 4%

2%
0%
0%
0-2% 2-3% 3-4% 4-5% 5%+
U.S. 10-year Treasury rate ranges
-1% # of
'08 '10 '12 '14 '16 '18 '20 '22 '24 months 59 80 60 74 273
Economic surprises Historical policy rates and forward curves
Citi Economic Surprises Index, weekly Target policy rates and market implied forward ratses
100 7%

Fed ECB BoE BoJ

U.S. 6%

50
5%

4%
0

Japan
3%
Eurozone UK

-50
2%

1%
-100

0%

-150 -1%
May '23 Aug '23 Nov '23 Feb '24 May '24 '22 '23 '24 '25 '26 '27
Global Composite (manufacturing & services combined) Purchasing Managers’ Index, quarterly
2024
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 '24 May Jun

Global 53.7 53.1

Manufacturing 50.9 49.9

Services 54.1 54.0

DM 53.4 -

EM 54.4 -

U.S. 54.5 54.6

Japan 52.6 50.0

UK 53.0 51.7
Developed

Euro Area 52.2 50.8

Germany 52.4 50.6

France 48.9 48.2

Italy 52.3 -

Spain 56.6 -

China 54.1 -
Emerging

India 60.5 60.9

Brazil 55.1 -
Year-over-year headline inflation by country and region, quarterly
2024
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 '24 Apr May

Global 3.2% 3.2%

DM 2.9% 2.9%

EM 3.5% 3.6%

U.S. 3.4% 3.3%

Canada 2.7% 2.9%

Japan 2.5% 2.9%

UK 2.3% 2.0%
Developed

Euro Area 2.4% 2.6%

Germany 2.2% 2.4%

France 2.1% 2.3%

Italy 0.8% 0.8%

Spain 3.3% 3.7%

Greece 3.1% 2.4%

China 0.3% 0.3%

Indonesia 3.0% 2.8%

Korea 2.9% 2.7%

Emerging

Taiwan 1.9% 2.2%

India 4.8% 4.7%

Brazil 3.7% 3.9%

Mexico 4.7% 4.7%

U.S. goods imports by country Global PMI suppliers' delivery times index*
% of total U.S. goods imports, annual and YTD 2024 Figure shown is 100 - Global PMI suppliers' delivery times index
25% 70

Slower Oct. 2021:

China delivery time 65.3
65
20%
Canada

Euro Area 60

15%

55
Mexico Average: 52.4
10%

50
Taiwan, Korea
and Vietnam

5% May 2024:
45 49.5
India
Faster
Mar. 2009:
delivery time
43.3
0% 40
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Semiconductor production by location Mining production by location
% global share % global share, 2022
100%
3% Others*
8%
Rare earths 35% 26% 18%
90% 19%
11% 15%
22% 24% China
80%
Zinc 15% 40% 8% 7% 12% 14%

70% 22%
22%
13%
21% Nickel 46% 16% 7% 20%
60% Taiw an
44%

17% 15%
50%
21% Lithium 9% 28% 56% 15%

40% 19% South

Korea
18%
24% Copper 16% 30% 7% 7% 22%
30%
15%
13% Japan
20% 13%
37%
9% Cobalt 28% 9% 50%
8% Europe
10% 19%
13% 12% 10% U.S. 0% 20% 40% 60% 80% 100%
0% China APAC ex-China South America
1990 2000 2010 2020E 2030F North America Europe Africa & RoW
 U.S.
Large Corp. Hedge Private Ann.
Cap EAFE EME Bonds HY Munis Currcy. EMD Cmdty. REITs funds equity Gold Volatility

U.S. Large Cap 1.00 0.89 0.80 0.32 0.86 0.42 -0.47 0.76 0.40 0.78 0.82 0.79 0.24 15%

EAFE 1.00 0.90 0.34 0.86 0.48 -0.62 0.80 0.42 0.67 0.80 0.78 0.31 16%

EME 1.00 0.31 0.83 0.42 -0.69 0.80 0.46 0.55 0.75 0.76 0.40 18%

Bonds 1.00 0.42 0.88 -0.42 0.68 -0.29 0.50 -0.03 0.14 0.60 5%

Corp. HY 1.00 0.48 -0.52 0.88 0.45 0.70 0.76 0.72 0.34 9%

Munis 1.00 -0.46 0.75 -0.26 0.61 0.09 0.26 0.46 5%

Currencies 1.00 -0.62 -0.35 -0.31 -0.28 -0.55 -0.61 7%

EMD 1.00 0.18 0.67 0.54 0.59 0.52 8%

Commodities 1.00 0.25 0.63 0.58 0.19 17%

REITs 1.00 0.56 0.61 0.24 17%

Hedge funds 1.00 0.80 0.08 5%

Private equity 1.00 0.10 9%

Gold 1.00 13%

Correlations, returns and yields
10-year correlations and 10-year annualized total returns, quarterly, 2014 - 2023
25%
Real estate Bubble size = yield
Infrastructure
3%
Private markets
Hedge funds
20%
0%
10-year annualized return

Venture Capital
15% Private Equity
Transport

Infrastructure
10% APAC Core RE
Direct Lending

Europe Core RE
5% Hedge Funds
U.S. Core RE

0%
-0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00
Trailing 10-year correlation to 60/40 portfolio
Global core infrastructure returns
1Q09-4Q23, rolling 4-quarter returns from income and capital appreciation Segment Weight in index*
18% Power 50%
Capital appreciation Transport 23%
Income Water 16%
15%
Communication 7%
Other 4%
12%

9%

6%

3%

0%

-3%

-6%
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
U.S. REITs, direct real estate and equities
12-quarter rolling correlations, total return
1
Recession

0.8

0.6

0.4

0.2

-0.2

-0.4

-0.6
Avg. 4Q80 - 1Q24 1Q24
-0.8 Direct real estate/S&P 500 correlation -0.1 -0.4
REITs/S&P 500 correlation 0.6 0.9
-1
'80 '82 '83 '85 '86 '88 '89 '91 '92 '94 '95 '97 '98 '00 '01 '03 '04 '06 '07 '09 '10 '12 '13 '15 '16 '18 '19 '21 '22
Number of listed U.S. companies* and market cap. Average market value and median age at IPO
Number, S&P 500 market capitalization in USD trillions
9,000 45 $2.0 12
# of listed companies Market cap. Market value (LHS, USD billions)
Median age (RHS, years)
40 11
8,000
35
$1.5 10

7,000 30
9

25
6,000 $1.0 8
20

7
5,000 15

$0.5 6
10
4,000
5
5

3,000 0 $0.0 4
'91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 1980-1989 1990-1998 1999-2000 2001-2023
Public and private manager dispersion
Based on returns over a 10-year window*
30%

25%
23.3%

20% 18.1%

15% 14.1% 13.9%

10% 8.9%
75th percentile 7.6%
Median
7.3%
5% 25th percentile 6.2%
2.2%

2.1%
1.3%
0%
-0.4%
-2.2%
-5%
-4.5%

-10%
U.S. Fund Global U.S. Fund Global U.S. Core U.S. Non-core Global Private Global Venture Hedge Funds
Equities Bonds Real Estate Real Estate Equity Capital
 2009-2023
Ann. Vol. 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD
Large Sm all EM Sm all Sm all EM Large Sm all Large Large
REITs REITs REITs REITs REITs Cash REITs Com dty.
Cap Cap Equity Cap Cap Equity Cap Cap Cap Cap
14.0% 21.9% 79.0% 27.9% 8.3% 19.7% 38.8% 28.0% 2.8% 21.3% 37.8% 1.8% 31.5% 20.0% 41.3% 16.1% 26.3% 15.3%
Sm all High Sm all Fixed High Large Large Large High DM Fixed EM Large DM EM
REITs REITs Cash
Cap Yield Cap Incom e Yield Cap Cap Cap Yield Equity Incom e Equity Cap Equity Equity
11.3% 21.2% 59.4% 26.9% 7.8% 19.6% 32.4% 13.7% 1.4% 14.3% 25.6% 0.0% 28.7% 18.7% 28.7% 1.5% 18.9% 7.7%
EM DM EM High EM DM Fixed Fixed Large Large Sm all Large High Sm all DM
REITs REITs Com dty.
Equity Equity Equity Yield Equity Equity Incom e Incom e Cap Cap Cap Cap Yield Cap Equity
10.9% 20.3% 32.5% 19.2% 3.1% 18.6% 23.3% 6.0% 0.5% 12.0% 21.8% -4.0% 25.5% 18.4% 27.1% -12.7% 16.9% 5.7%
High DM Large DM Asset Asset Sm all High DM Asset Sm all Fixed Asset Asset
REITs Com dty. Cash Com dty.
Yield Equity Cap Equity Alloc. Alloc. Cap Yield Equity Alloc. Cap Incom e Alloc. Alloc.
8.6% 18.4% 28.0% 16.8% 2.1% 17.9% 14.9% 5.2% 0.0% 11.8% 14.6% -4.1% 22.7% 10.6% 14.8% -13.0% 14.1% 5.5%
Asset Sm all Large Sm all High Sm all DM EM Asset Large Asset DM Asset Asset High
Com dty. Cash Com dty.
Alloc. Cap Cap Cap Yield Cap Equity Equity Alloc. Cap Alloc. Equity Alloc. Alloc. Yield
8.1% 16.6% 27.2% 15.1% 0.1% 16.3% 7.3% 4.9% -0.4% 11.6% 14.6% -4.4% 19.5% 8.3% 13.5% -13.9% 14.0% 5.1%
DM Large Large High Asset Large Asset High Asset EM Fixed DM DM High
REITs Cash REITs REITs
Equity Cap Cap Yield Alloc. Cap Alloc. Yield Alloc. Equity Incom e Equity Equity Yield
7.4% 16.1% 26.5% 14.8% -0.7% 16.0% 2.9% 0.0% -2.0% 8.6% 10.4% -5.8% 18.9% 7.5% 11.8% -14.0% 11.4% 3.2%
EM High Asset Asset Sm all Asset High High Asset Sm all High High High Large EM
Cash REITs Cash
Equity Yield Alloc. Alloc. Cap Alloc. Yield Yield Alloc. Cap Yield Yield Yield Cap Equity
6.9% 11.5% 25.0% 13.3% -4.2% 12.2% 0.0% 0.0% -2.7% 8.3% 8.7% -11.0% 12.6% 7.0% 1.0% -18.1% 10.3% 2.7%
Fixed Asset DM DM Fixed Fixed EM Sm all Fixed Fixed Fixed EM Fixed Sm all
Com dty. Com dty. Cash Cash
Incom e Alloc. Equity Equity Incom e Incom e Equity Cap Incom e Incom e Incom e Equity Incom e Cap
2.7% 11.5% 18.9% 8.2% -11.7% 4.2% -2.0% -1.8% -4.4% 2.6% 3.5% -11.2% 8.7% 0.5% 0.0% -19.7% 5.5% 1.7%
Fixed Fixed Fixed EM DM EM DM DM Fixed Sm all Fixed
Cash Com dty. Cash Com dty. Com dty. Com dty. Cash
Incom e Incom e Incom e Equity Equity Equity Equity Equity Incom e Cap Incom e
0.8% 4.5% 5.9% 6.5% -13.3% 0.1% -2.3% -4.5% -14.6% 1.5% 1.7% -13.4% 7.7% -3.1% -1.5% -20.4% 5.1% -0.7%
EM EM EM
Com dty. Cash Cash Cash Com dty. Com dty. Com dty. Com dty. Cash Cash Cash REITs REITs Com dty. REITs
Equity Equity Equity
-0.2% 0.7% 0.1% 0.1% -18.2% -1.1% -9.5% -17.0% -24.7% 0.3% 0.8% -14.2% 2.2% -5.1% -2.2% -24.9% -7.9% -2.2%
Asset class valuations
Z-scores based on 25-year average valuation measures*
Jan. 1, 2024 Current
3

2
1.48

1.08 1.17

1 0.71

1.00
0.13
0.90 0.86
-0.07 -0.23 -0.19 0.52
0
-0.51 0.16
-0.79
-0.35 -0.39
-0.55
-1 -0.81
-1.10

-2
Yield- Fwd. Spread
Yield-to- Yield-to- to- Fwd. Fwd. Fwd. Fwd.
P/B P/E P/E -to-
worst** worst** worst** P/E P/E P/E
worst**
-3
Treasuries U.S. Core Munis*** EM Equity DM Equity U.S. Small U.S. Value U.S. High U.S. Growth U.S. Large
Bond ex-U.S. Cap Yield Cap
All-time highs and market floors Average cumulative S&P 500 total returns
S&P 500 price index, daily, 1950 - today Jan. 1, 1988 - Dec. 31, 2023
7,000 90%
Number of all-time highs (ATHs) in 2024 31 Invest on any day**
% of days S&P 500 closes at an ATH 6.6% Invest at a new high 79.6%
80%
% of ATHs that act as market floor* 30.4%
6,000 73.8%

S&P 500 price index

70%
All-time highs that set a market floor*
5,000
60%

4,000 48.1%
50%

40.2%
40%
3,000

28.9%
30%
25.0%
2,000

20%
13.4%
11.9%
1,000
10%
5.8% 5.9%
2.9% 2.3%

0 0%
'50 '55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20 3 months 6 months 1 year 2 year 3 year 5 year
Range of stock, bond and blended total returns
Annual total returns, 1950-2023
60%
Annual avg. Growth of $100,000 over
total return 20 years
50% 52% Stocks 11.4% $868,652
Bonds 5.3% $279,266
40% 60/40 portfolio 9.3% $591,915

30% 33% 34%

29%
20%
20% 20%
18% 18%
10% 14% 16% 15%
11%
1% 6% 5%
0%
1% 1% 1%
-2% -2% -1%
-13%
-10%
-20%
-20%

-30%
-37%
-40%

-50%
1-yr. 5-yr. 10-yr. 20-yr.
rolling rolling rolling
20-year manager return dispersion and growth of capital
By asset type, annualized total returns, growth of $1,000 invested 20 years ago*
14%
Growth of $1,000 invested with top decile manager
$9,822 Growth of $1,000 invested with bottom decile manager
12%

$6,900 477%
10% $6,572
$5,949 $5,936
211%

295% 221% $5,056 $4,677

8% $4,793 238%
$3,767
$3,621 $3,736 200% Cumulative outperformance $3,352
$3,552
6%
149% $2,803 88%
$2,675
$2,184 81% $2,474
4% $2,280
$1,810 55% $1,994
$1,544 43%
2% $1,629
22%
$1,385
$1,321

0%
Large- Mid- Small- Large Large Foreign EM Ultrashort Short-Term Interm. Multi- High
Cap Cap Cap Growth Value Large Equity Bond Bond Core + Bond sector Yield
Blend Blend Blend Blend Bond
Investment opportunities outside of CDs
Peak 6-month certificate of deposit (CD) rate during previous rate hiking cycles and subsequent 12-month total returns
50%
Avg. 12mo. subsequent
Peak CD rate total return
6-month CDs 7%
40%
38% Bloomberg U.S. Agg 15%
S&P 500 22%
31% 31%
30% 30% 30% 60/40 portfolio 19% 29%
30%

22%
21%
19% 18% 20%
20%
16%
15%
12% 13%

10% 9%
6% 6%

0%
-1%

-10%
-11%

-20%
Jun '84 - Jun '85 Mar '89 - Mar '90 Dec '94 - Dec '95 May '00 - May '01 Jun '06 - Jun '07 Dec '18 - Dec '19 Sep '23 - Jun '24

1984 1989 1994 2000 2006 2018 2023*

Percentage of Republicans and Democrats who rate national economic conditions as excellent or good

100%
Republican / Lean Republican
90%
Democrat / Lean Democrat
80%

70%
Election Day
60%

50%

40%

37%
30%

20%
10%
10%

0%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24

Administration Bush Obama Trump Biden

Dates in office Jan ‘01 – Jan ‘09 Jan ‘09 – Jan ‘17 Jan ‘17 – Jan ‘21 Jan ‘21 – Today
S&P 500 return -4.5% 16.3% 16.0% 12.4%
Real GDP growth 1.9% 2.2% 1.8% 2.7%
 Fixed income:
All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not
include fees or expenses. The Bloomberg 1-3 Month U.S. Treasury Bill Index includes all publicly issued zero-coupon US Treasury Bills that
have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250
Equities: million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be
The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip U.S. stocks. fixed rate and non convertible.
The MSCI ACWI (All Country World Index) is a free float-adjusted market capitalization weighted index that is The Bloomberg Global High Yield Index is a multi-currency flagship measure of the global high yield debt market.
designed to measure the equity market performance of developed and emerging markets. The index represents the union of the US High Yield, the Pan-European High Yield, and Emerging Markets (EM) Hard
The MSCI EAFE Index(Europe, Australasia, Far East)is a free float-adjusted market capitalization index that is Currency High Yield Indices. The high yield and emerging markets sub-components are mutually exclusive. Until
designed to measure the equity market performance of developed markets, excluding the US & Canada. January 1, 2011, the index also included CMBS high yield securities.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to The Bloomberg Municipal Index: consists of a broad selection of investment-grade general obligation and revenue
measure equity market performance in the global emerging markets. bonds of maturities ranging from one year to 30 years. It is an unmanaged index representative of the tax-exempt
bond market.
The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure
developed market equity performance in Europe. The Bloomberg US Dollar Floating Rate Note (FRN) Index provides a measure of the U.S. dollar denominated
floating rate note market.
The MSCI Pacific Index is a free float-adjusted market capitalization index that is designed to measure equity
market performance in the Pacific region. The Bloomberg US Corporate Investment Grade Index is an unmanaged index consisting of publicly issued US
Corporate and specified foreign debentures and secured notes that are rated investment grade (Baa3/BBB or higher)
The Russell 1000 Index® measures the performance of the 1,000 largest companies in the Russell 3000. by at least two ratings agencies, have at least one year to final maturity and have at least $250 million par amount
The Russell 1000 Growth Index® measures the performance of those Russell 1000 companies with higher outstanding. To qualify, bonds must be SEC-registered.
price-to-book ratios and higher forecasted growth values. The Bloomberg US High Yield Index covers the universe of fixed rate, non-investment grade debt. Eurobonds and
The Russell 1000 Value Index® measures the performance of those Russell 1000 companies with lower price- debt issues from countries designated as emerging markets (sovereign rating of Baa1/BBB+/BBB+ and below using
to-book ratios and lower forecasted growth values. the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds (SEC registered) of issuers in
non-EMG countries are included.
The Russell 2000 Index® measures the performance of the 2,000 smallest companies in the Russell 3000
Index. The Bloomberg US Mortgage Backed Securities Index is an unmanaged index that measures the performance of
investment grade fixed-rate mortgage backed pass-through securities of GNMA, FNMA and FHLMC.
The Russell 2000 Growth Index® measures the performance of those Russell 2000 companies with higher
price-to-book ratios and higher forecasted growth values. The Bloomberg US TIPS Index consists of Inflation-Protection securities issued by the U.S. Treasury.
The Russell 2000 Value Index® measures the performance of those Russell 2000 companies with lower price- The J.P. Morgan Emerging Market Bond Global Index(EMBI)includes U.S. dollar denominated Brady bonds,
to-book ratios and lower forecasted growth values. Eurobonds, traded loans and local market debt instruments issued by sovereign and quasi-sovereign entities.
The Russell 3000 Index® measures the performance of the 3,000 largest U.S. companies based on total market The J.P. Morgan Domestic High Yield Index is designed to mirror the investable universe of the U.S. dollar domestic
capitalization. high yield corporate debt market.
The Russell Midcap Index® measures the performance of the 800 smallest companies in the Russell 1000 The J.P. Morgan Corporate Emerging Markets Bond Index Broad Diversified (CEMBI Broad Diversified)is an
Index. expansion of the J.P. Morgan Corporate Emerging Markets Bond Index (CEMBI). The CEMBI is a market
capitalization weighted index consisting of U.S. dollar denominated emerging market corporate bonds.
The Russell Midcap Growth Index ® measures the performance of those Russell Midcap companies with
higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell The J.P. Morgan Emerging Markets Bond Index Global Diversified (EMBI Global Diversified) tracks total returns
1000 Growth index. for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities:
Brady bonds, loans, Eurobonds. The index limits the exposure of some of the larger countries.
The Russell Midcap Value Index ® measures the performance of those Russell Midcap companies with lower
price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value The J.P. Morgan GBI EM Global Diversified tracks the performance of local currency debt issued by emerging
index. market governments, whose debt is accessible by most of the international investor base.
The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. The index includes The U.S. Treasury Index is a component of the U.S. Government index.
a representative sample of 500 leading companies in leading industries of the U.S. economy. The S&P 500
Index focuses on the large-cap segment of the market; however, since it includes a significant portion of the total
value of the market, it also represents the market.
Other asset classes: Investments in emerging markets can be more volatile. The normal risks of investing in foreign countries are heightened when
The Alerian MLP Index is a composite of the 50 most prominent energy Master Limited Partnerships (MLPs) that provides investing in emerging markets. In addition, the small size of securities markets and the low trading volume may lead to a lack of
investors with an unbiased, comprehensive benchmark for the asset class. liquidity, which leads to increased volatility. Also, emerging markets may not provide adequate legal protection for private or
foreign investment or private property.
The Bloomberg Commodity Index and related sub-indices are composed of futures contracts on physical commodities and
represents twenty two separate commodities traded on U.S. exchanges, with the exception of aluminum, nickel, and zinc The price of equity securities may rise, or fall because of changes in the broad market or changes in a company’s financial
condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies,
The Cambridge Associates U.S. Global Buyout and Growth Index® is based on data compiled from 1,768 global (U.S. & ex sectors or industries, or the securities market as a whole, such as changes in economic or political conditions. Equity securities
–U.S.) buyout and growth equity funds, including fully liquidated partnerships, formed between 1986 and 2013. are subject to “stock market risk” meaning that stock prices in general may decline over short or extended periods of time.
The CS/Tremont Hedge Fund Index is compiled by Credit Suisse Tremont Index, LLC. It is an asset-weighted hedge fund Equity market neutral strategies employ sophisticated quantitative techniques of analyzing price data to ascertain information
index and includes only funds, as opposed to separate accounts. The Index uses the Credit Suisse/Tremont database, which about future price movement and relationships between securities, select securities for purchase and sale. Equity Market
tracks over 4500 funds, and consists only of funds with a minimum of US$50 million under management, a 12-month track Neutral Strategies typically maintain characteristic net equity market exposure no greater than 10% long or short.
record, and audited financial statements. It is calculated and rebalanced on a monthly basis, and shown net of all performance
fees and expenses. It is the exclusive property of Credit Suisse Tremont Index, LLC. Global macro strategies trade a broad range of strategies in which the investment process is predicated on movements in
underlying economic variables and the impact these have on equity, fixed income, hard currency and commodity markets.
The HFRI Monthly Indices (HFRI) are equally weighted performance indexes, utilized by numerous hedge fund managers as a
benchmark for their own hedge funds. The HFRI are broken down into 4 main strategies, each with multiple sub strategies. All International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and
single-manager HFRI Index constituents are included in the HFRI Fund Weighted Composite, which accounts for over 2200 differences in accounting and taxation policies outside the U.S. can raise or lower returns. Some overseas markets may not be
funds listed on the internal HFR Database. as politically and economically stable as the United States and other nations.
The NAREIT EQUITY REIT Index is designed to provide the most comprehensive assessment of overall industry performance, There is no guarantee that the use of long and short positions will succeed in limiting an investor's exposure to domestic
and includes all tax-qualified real estate investment trusts (REITs) that are listed on the NYSE, the American Stock Exchange stock market movements, capitalization, sector swings or other risk factors. Using long and short selling strategies may have
or the NASDAQ National Market List. higher portfolio turnover rates. Short selling involves certain risks, including additional costs associated with covering short
positions and a possibility of unlimited loss on certain short sale positions.
The NFI-ODCE, short for NCREIF Fund Index -Open End Diversified Core Equity, is an index of investment returns reporting
on both a historical and current basis the results of 33 open-end commingled funds pursuing a core investment strategy, some Merger arbitrage strategies which employ an investment process primarily focused on opportunities in equity and equity
of which have performance histories dating back to the 1970s. The NFI-ODCE Index is capitalization-weighted and is reported related instruments of companies which are currently engaged in a corporate transaction.
gross of fees. Measurement is time-weighted. Mid-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies. Historically,
Definitions: mid-cap companies' stock has experienced a greater degree of market volatility than the average stock.
Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Price to forward earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings. Price to book value
Alternative investments involve greater risks than traditional investments and should not be deemed a complete investment compares a stock's market value to its book value. Price to cash flow is a measure of the market's expectations of a firm's
program. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative future financial health. Price to dividends is the ratio of the price of a share on a stock exchange to the dividends per share
investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative paid in the previous year, used as a measure of a company's potential as an investment.
investment techniques, which can magnify the potential for investment loss or gain. The value of the investment may fall as well Real estate investments may be subject to a higher degree of market risk because of concentration in a specific industry, sector
as rise and investors may get back less than they invested. or geographical sector. Real estate investments may be subject to risks including, but not limited to, declines in the value of real
Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise. estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and
defaults by borrower.
Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments
involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market Relative Value Strategies maintain positions in which the investment thesis is predicated on realization of a valuation
movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such discrepancy in the relationship between multiple securities.
as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory Small-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies since smaller
developments. Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same companies generally have a higher risk of failure. Historically, smaller companies' stock has experienced a greater degree of
time, creates the possibility for greater loss. market volatility than the average stock.
Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or
market conditions than other types of investments and could result in losses that significantly exceed the original investment.
The use of derivatives may not be successful, resulting in investment losses, and the cost of such strategies may reduce
investment returns.
Distressed Restructuring Strategies employ an investment process focused on corporate fixed income instruments, primarily
on corporate credit instruments of companies trading at significant discounts to their value at issuance or obliged (par value) at
maturity as a result of either formal bankruptcy proceeding or financial market perception of near term proceedings.
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Prepared by: David P. Kelly, Jordan K. Jackson, John C. Manley, Meera Pandit, Gabriela D. Santos, Stephanie Aliaga, Sahil Gauba, Mary Park Durham, Brandon Hall and Katie Korngiebel.
Unless otherwise stated, all Data are as of June 30, 2024 or most recently available.
Guide to the Markets – U.S.
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