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1 Emerging Markets High Dividend Q Commentary Market Review: The first quarter of 2019 saw emerging markets (EM) equities rebound strongly compared to the sharp weakness seen during While concerns around global macro persisted, the US Fed s indication of a pause in its monetary tightening policy was a significant tailwind. Among EM economies, China was the prominent contributor, led by a series of monetary and fiscal stimulus measures adopted by its government. De-escalation of trade tensions between the US and China and MSCI s decision to accelerate the inclusion of China A-shares also helped. As a result, EM stocks traded up during the first quarter, closing YTD with a 9.90% gain. This implied only a marginal underperformance versus the Developed Markets (MSCI EAFE) index which gained 10.15%. The United States (S&P 500) index gained 13.65% during the period. EM Asia (+11.06%, MSCI EM Asia Index) outperformed Latin America (+7.93%, MSCI EM Latin America Index) and EMEA (+5.60%, MSCI EM Europe Middle East and Africa Index). Within EM, Growth (+11.96%) outperformed Value (+7.76%), led by a recovery in consumer discretionary stocks. Commodities also rebounded sharply YTD, led by oil, as concerns regarding global economic growth slowdown were more than neutralized by planned and unplanned supply cuts. Brent crude (European Dated Brent Forties Oseberg Ekofisk) rallied 27% during the quarter to close at $67.51 per barrel. Controlled supply by OPEC and Russia, lack of clarity on Iran waivers, political crises in Venezuela and between India-Pakistan, and a decline in US rig count all contributed to oil price gains. The S&P Industrial Metals index also recovered, trading up 8.19% YTD led by gains in copper, zinc and nickel through supply disruptions and ongoing fiscal stimulus in China. The US dollar strengthened and the Dollar Index (DXY) ended the first quarter up 1.16%. This was despite the dovish stance of the US Fed towards interest rate hikes as anticipation of global economic weakness weighed in. Among other notable events, the first quarter saw a second round of negotiations between the US and North Korea in relation to the latter s nuclear weapons capabilities. Tensions between India and Pakistan escalated dramatically during Feb- March on account of India s retaliation to a terrorist attack in Jammu & Kashmir. In the US, special counsel Robert Mueller submitted his report on the investigation into the alleged role of Russia in the 2016 presidential elections. The report has not yet been made public. The top performers among major EM countries during YTD of 2019 were China, Russia, and Taiwan. China benefited from expectations of a potential trade truce with the US in addition to its own ongoing monetary and fiscal stimuli. Russia gained primarily on the back of a pick-up in oil prices while a continued budget surplus and a rating upgrade by Moody s also helped. Taiwan benefited largely on the back of improving China macro indicators. The bottom EM country performers were Qatar, Turkey and Poland. Weak economic growth outlook and high valuations worked against Qatar YTD. Turkey remained volatile given its recessionary macro environment and weak currency while weakness in Europe and low inflation dragged Poland down YTD. The top EM sectors YTD in 2019 were Consumer Discretionary, Real Estate and Information Technology. The bottom performers were Healthcare, Utilities, and Industrials. Performance: S C H A F E R C U L L E N C A P I T A L M A N A G E M E N T The strategy appreciated 12.2% (gross) and 11.9% (net of fees) in the first quarter of 2019, outperforming the benchmark by 2.3%, as stock selection in Real Estate, Consumer Staples and Financials was the main contributor. Over the long-term, we expect the strategy to participate meaningfully in up markets, while outperforming in down months. 1

2 Emerging Markets High Dividend Returns vs. Benchmark QTD 1 Yr 3 Yr 5 Yr 10 Yr Since Inception* EM High Dividend (gross) EM High Dividend (net) MSCI Emerging Markets Index *As of 12/31/2005 through 12/31/2018. Performance for periods greater than 1 year is annualized. Past performance is no guarantee of future results. Portfolio Attribution: Sector Attribution Source: Research, 03/31/2019. On a sector basis, the fund s top contributor was its stock selection in Real Estate, Consumer Staples and Financials. For Real Estate and Financials, allocation also contributed. Stock selection within Consumer Discretionary, Communication Services and Materials sectors was the main detractor. Additionally, the portfolio s underweight allocation to Consumer Discretionary also impacted its performance YTD. 2

3 Country Attribution Source: Research, 03/31/2019. On a country basis, the fund s stock selections in Thailand, Mexico and Russia were contributors. In Russia, the fund s overweight allocation also contributed. The top country detractors were Brazil, Panama and Vietnam. Stock selection was the main detractor in Brazil while allocation detracted in Panama and Vietnam. Top contributors in the quarter were Times China Holdings (China/ HK, Real Estate), Thai Beverage (Thailand, Consumer Staples), WH Group (China/ HK, Consumer Staples), and Lukoil (Russia, Energy). Top detractors in the quarter were Vale SA (Brazil, Materials), SK Telecom (South Korea, Communication Services) and ishares MSCI South Korea ETF (South Korea). Portfolio Positioning and Outlook: We are encouraged by the strong start to the year by Emerging Market stocks and anticipate that they may very well continue their advance in The strong YTD performance is not surprising in light of the exceptional valuations of EM stocks and our portfolio in particular at the start of the year. Our YTD outperformance in a strong overall market environment was aided by our decision to retain balanced exposure to cyclical and noncyclical dividend payers, despite experiencing a somewhat difficult quarter in 4Q That is because while EM value stocks have meaningfully underperformed EM growth stocks in 1Q, cyclical value stocks have posted strong returns to help drive our relative performance in the quarter. We believe EM equities continue to trade at 3

4 quite attractive valuations on an absolute and relative basis, with the MSCI EM index trading at a forward P/E of approximately 12.2, which represents almost a 20% discount to developed market stocks. Valuations are even more attractive within our portfolio, with the portfolio trading at an estimated 10.8 forward EPS and offering a 5.0% dividend yield, both still at historically attractive levels. The portfolio dividend yield looks particularly attractive relative to fixed income alternatives that have seen their income yields decline YTD. These attractive valuations have been accompanied by improving sentiment and the potential for an acceleration of growth as trade tensions ease, global interest rates decline and China stimulates its economy to support growth. These factors should continue to drive Emerging Markets in 2019 since the positive impacts of greater global liquidity and stimulus are just starting to impact the Chinese economy; if history is any guide, these measures are likely to continue to propel the economy and stock market before China feels compelled to reduce stimulus. This benefit to economic growth should lead to consensus upgrades to Emerging Market earnings estimates, further supporting already attractive valuations. We would not be surprised to see China continue to lead EM equity performance as Chinese equities also benefit from MSCI s decision to increase the country s weight in the MSCI EM Index. Further, accelerated regulatory efforts to open China to foreign investment in both bond and equity markets should also bode well for EM equity performance. The increased membership in several MSCI indices and the opening of the Chinese market to foreign investment can drive large fund flows in coming years from both domestic and international investors, both of whom have meaningful underweight allocations to Chinese equities following their underperformance in The potential for increased fund flows into China from these investors is significant in light of the size of the market, low overall stock ownership and the likelihood that China will become an even greater weight in the MSCI EM and other global indices in the future. Indeed, the Shanghai Composite Index started the year at technical levels that in the past have been a pre-cursor to outsized returns and the aforementioned catalysts may lead to a repeat of this historical pattern in Are Chinese Stocks About to Slingshot Higher? Shanghai Composite is at a level that preceded most rallies in the market s industry Source: Bloomberg, April 17, Our YTD portfolio changes were largely based on stock-specific opportunities, as well as the result of an ongoing drive to consolidate portfolio holdings in an effort to further increase portfolio conviction and concentration. We initiated a position in Copa Airlines, an airline operating primarily in South America that 4

5 enjoys a dominant regional market position and is led by a strong management team that has built a solid track record of consistently generating above-industry-average levels of profitability. We sold our position in Vale after the tragic collapse of a dam at one of its mines caused the company to suspend the dividend and has materially changed the investment thesis behind owning the stock. We sold our position in Concha y Toro because the company delisted its ADR and we do not have local access to equities in Chile. We also sold our position in RHT Health Trust after we received the proceeds from the acquisition of the company by Fortis Healthcare. Finally, we sold PT Telekom Indonesia whose equity valuation is no longer attractive in light of a modestly worsening growth outlook. We continue to see attractive opportunities from a variety of companies including suppliers exposed to megathematic growth areas like green energy, electric vehicles, big data, emissions technologies and demographic trends, among others. New opportunities are also materializing in larger EM companies that are turnaround stories and stand to benefit from improving corporate governance and domestic reforms as a result of changes in corporate and government leadership. As described above and at greater length in our fourth quarter commentary, we continue to see opportunities in select cyclical stocks due to their attractive absolute and relative valuations, as well as beneficial and changing industry dynamics that we think will lead to higher average valuations in the years to come. We expect our exposure to these cyclical stocks to be modest and do not anticipate it to pose a challenge to our objective to outperform in the large majority of down-market environments, as we have done historically. While identifying diverse opportunities, we will continue to adhere to our investment discipline, which focuses on valuation, balance sheet strength, earnings growth, as well as strong dividend and quality attributes. We believe that over the long term, this fundamentals-driven value investing strategy could deliver meaningful outperformance to our investors while taking on less risk. Thank you for your continued support and please do not hesitate to contact us with any questions. Best Regards, Schafer Cullen Capital Management, Inc. 5

6 Portfolio Exposure and Characteristics as of 3/31/2019 Sectors MSCI Top 10 Countries MSCI Communication Services China / Hong Kong Consumer Discretionary Taiwan Consumer Staples South Korea Energy Russia Financials Brazil Health Care India Industrials Indonesia Information Technology Thailand Materials Mexico Real Estate Greece Utilities Total Regions MSCI Top 10 Holdings Asia Pacific AIA Group 3.9 EMEA Lukoil 3.6 Latin America Taiwan Semiconductor 3.5 Other Thai Beverage 3.0 Ping An Insurance 2.9 Xinyi Glass Holdings 2.9 Opap 2.8 SK Telecom 2.8 Sinopec 2.8 China Construction Bank 2.7 Portfolio Characteristics Price/Earnings Forward Dividend Yield NTM LT DPS Growth LT EPS Growth Weighted Avg. Market Cap ($B) Emerging Markets High Dividend MSCI EM Index Additional Disclosure: Sector weights, portfolio characteristics, ten largest holdings and other information constitutes supplemental information. Please see important disclosures listed on the following page. 6

7 Disclosure: Schafer Cullen Capital Management ( or the Adviser ) is an independent investment advisor registered under the Investment Advisers Act of This information should not be used as the primary basis for any investment decision nor should it be considered as advice to meet your particular investment needs. The portfolio securities and sector weights may change at any time at the discretion of the Adviser. It should not be assumed that any security transactions, holdings or sectors discussed were or will be profitable, or that future recommendations or decisions will be profitable or equal the investment performance discussed herein. Investing in equity securities is speculative and involves substantial risk. Past performance is no guarantee of future results. Market conditions can vary widely over time and can result in a loss of portfolio value. Individual account performance results will vary and will not match that of the composite or model. This variance depends on factors such as market conditions at the time of investment, and / or investment restrictions imposed by a client which may cause an account to either outperform or underperform the composite or model s performance. A list of all recommendations made by within the immediately preceding period of not less than one year is available upon request. The strategy depicted in this report has been managed in accordance with the investment objectives of the strategy as determined by the Adviser. The Adviser has selected benchmarks, which in their opinion closely resemble the style of the securities held in the composite or model portfolio of the strategy (e.g. large cap value, small cap value, international, etc.). The securities held in the composite or model are actively managed while the benchmark index is not. Investors should be aware that the Adviser makes no attempt to match the portfolio securities, or the security weightings of the benchmark. The composite or model s performance will be affected greater by the price movements of individual securities as the composite or model is more concentrated, generally less than 100 securities, while a comparative benchmark will generally have between 500 and 2,500 securities where individual security price movements have a lesser affect. An individual cannot invest directly in an index. Returns are expressed in US dollars. Gross of fee performance is calculated gross of management fees and custodian fees and net of transaction costs. Net of fee performance is calculated net of actual management fees and transaction costs but gross of custodian fees. Past performance does not guarantee future results. Individual account performance will not match the composite and will depend upon various factors including market condition at the time of investment. It should not be assumed that recommendations made in the future will be as profitable or surpass the historical performance of the securities in the composite. The primary benchmark used is the total return indices for the MSCI Emerging Markets Index. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that measures equity market performance of emerging markets. Schafer Cullen Capital Management, Inc. makes no representation that the use of this material can in and of itself be used to determine which securities to buy or sell, or when to buy or sell them; makes no representation, either directly or indirectly, that any graph, chart, formula or other device being offered herein will assist any person in making their own decisions as to which securities to buy, sell, or when to buy or sell them. All opinions expressed constitute Schafer Cullen Capital Management s judgment as of the date of this report and are subject to change without notice. 7