High Dividend Value Equity Q Commentary. Market Review: Performance Analysis:

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1 S C H A F E R C U L L E N High Dividend Value Equity Q Commentary Market Review: C A P I T A L M A N A G E M E N T US equities rose modestly higher in the 2nd quarter of 2018, with the S&P 500 increasing 3.4% and the Russell 1000 Value up 1.2%. Energy was the best performing sector (+13.5%), as the WTI oil benchmark increased 14%. OPEC agreed to lift production in June by roughly 600,000 barrels per day; however, this was at the low end of the range most analysts had projected and oil prices increased sharply on the news. Consumer Discretionary was the next best performing sector (+8.1%), driven by a resurgence in retailing, including brick and mortar retailers. Retailers and apparel firms are benefitting from a historically strong labor market and near-record levels of consumer confidence. Information Technology continued to outperform (+7.1%), as major technology firms announced large scale share repurchases from tax savings and repatriated overseas cash. Industrials and Financials were the two worst performing sectors, both down 3.2%. Large, multi-national capital goods firms declined on potential trade disruptions, while banks and insurers were impacted by a flattening yield curve. Consumer Staples were down 2.2%, partly on increasing concerns of pricing pressure for consumer packaged goods companies. S&P 500 companies reported earnings for the 1st quarter that increased 24.8% on average from a year earlier the highest level of earnings growth since For all of 2018, analysts on average are projecting earnings growth of 20.5%. Furthermore, economists are projecting 2nd quarter GDP growth of well over 3%, with many seeing growth in the quarter potentially exceeding 4%. Given the positive economic backdrop, the Federal Reserve increased interest rates by a quarter of a point for the second time in 2018, to roughly 2%, and gave indications there will likely be two more hikes in the year. In 2017 and early 2018, stocks advanced partly on evidence of synchronized global growth. While the current US economic expansion shows few signs of abating, recent data point to slowing growth in international markets. 1st quarter GDP growth in the Eurozone slowed to 0.4%, the weakest pace since mid-2016, while Japanese GDP declined by 0.6% following eight consecutive quarters of expansion. Recent political unrest has compounded these concerns, particularly between the US and its trading partners. President Trump announced a series of tariffs against China, Canada, Mexico and the EU, with each vowing to respond with retaliatory trade measures of their own. Performance Analysis: The High Dividend Value Equity strategy composite returned 0.57% and -2.02%, gross, and 0.47% and -2.20%, net of fees, in the second quarter of 2018 and YTD 2018, respectively. The S&P 500 returned 3.43% and 2.65% and the Russell 1000 Value 1.18% and -1.69% for the quarter and YTD, respectively. 1 of 8

2 Figure 1: High Dividend Value Equity Returns vs. Benchmark Q2 YTD 1 Yr 3 Yr 5 Yr 10 Yr Since Incept* High Dividend Value Equity (gross) High Dividend Value Equity (net) Russell 1000 Value Index S&P 500 Index *December 31, Performance for periods greater than 1 year is annualized. In the quarter, Growth, led by Information Technology and Consumer Discretionary, continued to outperform Value with the Russell 1000 Growth Index +5.76% and the Russell 1000 Value Index +1.18%, a 458 basis point spread. Year-to-date, the Growth over Value spread has widened to 894 basis points with Technology the single largest contributor to the S&P 500 1H gain, contributing 2.6 percentage points, or 98% of the index s total return. The typical defensive, high dividend sectors of the market REITs, Utilities, Staples and Telecommunications sectors (RUST) delivered mixed performance in the quarter with Real Estate and Utilities recovering but Telecommunications and Consumer Staples underperforming. In addition, the traditional Value sectors of the market (excluding Energy), Financials and Industrials underperformed in the quarter. Figure 2: S&P 500 Sectors (Total Return) S&P 500 Sectors (Total Return) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 (Sorted) 2018 YTD Energy 7.3% 6.7% 6.4% 6.8% 6.0% 5.9% 13.5% 6.8% Discretionary 2.3% 8.4% 2.4% 0.8% 9.9% 3.1% 8.2% 11.5% Technology 1.2% 12.6% 4.1% 8.6% 9.0% 3.5% 7.1% 10.9% Real Estate 4.4% 3.5% 2.8% 0.9% 3.2% 5.0% 6.1% 0.8% Utilities 0.1% 6.4% 2.2% 2.9% 0.2% 3.3% 3.7% 0.3% S&P 500 Total Return 3.8% 6.1% 3.1% 4.5% 6.6% 0.8% 3.4% 2.6% Health Care 4.0% 8.4% 7.1% 3.7% 1.5% 1.2% 3.1% 1.8% Materials 4.7% 5.9% 3.2% 6.0% 6.9% 5.5% 2.6% 3.1% Telecom 4.8% 4.0% 7.0% 6.8% 3.6% 7.5% 0.9% 8.4% Staples 2.0% 6.4% 1.6% 1.3% 6.5% 7.1% 1.5% 8.5% Financials 21.1% 2.5% 4.2% 5.2% 8.6% 1.0% 3.2% 4.1% Industrials 7.2% 4.6% 4.7% 4.2% 6.1% 1.6% 3.2% 4.7% Source: Strategas, Quarterly Review in Charts, 7/2/2018. While high dividend stocks partially recovered in the quarter, the highest yielding quintiles of the market have significantly underperformed year-to-date. They generally remain out of favor despite their strong historical performance in challenging markets while valuations have become increasingly attractive. Figure 3: S&P 500 Price Performance by Dividend Quintile # of Wgt in Price Performance Forward Div. Comp S&P Mon 3 Mon 6 Mon 12 Mon YTD Adj Beta P/E Ratio Yield Yield Sectors 0.00 To To To To To Source: BofA/ML US Performance Monitor, 7/3/ of 8

3 The investment discipline core to the High Dividend Value Equity strategy focuses on the long-term factors that drive superior risk-adjusted returns investments in high quality companies with attractive relative valuations, sustainable and growing dividends and catalystss to drive earnings growth and improving sentiment. Committing to this process over market cycles has rewarded clients with solid longterm gains and down market protection. At quarter-end: Low P/E Valuation Discipline: The strategy s P/E S&P 500 and 16.8x for the Russell 1000 Value (Q2). is 15.5x 2018 earnings versus 17.6x for the High Absolute Dividend Yield: The strategy s dividend yield is 3.5% versus 2.0% for the S&P 500 and 2.5% for the Russell 1000 Value (Q2). Strong Dividend Growth: In Q2, 8 out of 39 portfolio companies raised their dividends with an average increase of 6.6%. Year-to-date e, 25 out off 39 portfolio companies have raised their dividends with an average increase of +8. 1%. Portfolio Attribution: Attribution Effects High Dividend Value vs. Russell 1000 Value 3/31/2018 6/30/2018 Source: SCCM/Bloomberg, 6/30/ of 8

4 The following attribution analysis of the High Dividend Value Equity portfolio utilizes the Russell 1000 Value as the benchmark of comparison for the second quarter of Our underweight allocation to the Financials sector was the largest contributor to relative performance for the quarter. The sector declined partly due to the flattening yield curve, as the spread between the 2-year and 10-year Treasury yields is at its lowest point in over a decade, reducing banks net interest margins. Strong stock selection in the Information Technology sector aided relative performance. Microsoft (+8.5%) continues to rapidly grow its cloud computing platform, Azure, with revenue up 93% in its latest quarter, and the company sees a substantial a growth opportunity in its gaming segment as it moves towards gaming-as-a-service offerings. Cisco (+1.1%) reported healthy top-line growth in both products and services, and the company continues to transition towards a subscription-based model with its switching platforms and in growing areas such as security and collaboration. Strong stock selection in the Real Estate sector contributed to relative performance as both Welltower (+17.0%) and HCP (+12.9%) outperformed. The health care REITs showed signs of stabilizing and returning to more normalized valuation levels after selling off in late 2017 and early 2018 as interest rates climbed. Stock selection also aided relative performance in the Materials sector, as DowDuPont (+4.1%), led by CEO Ed Breen, realizes synergies between the former Dow and DuPont and positions for the eventual three-way split of the business. Stock selection and our overweight allocation to the Industrials sector detracted from relative performance, as the sector declined largely on escalating trade tensions between the US and its major international trading partners. Raytheon (-10.1%) reported net earnings that were up 25% year over year; however, the firm s sales of missile defense systems are viewed by some investors as vulnerable in a trade war. 3M (-9.8%) shares declined after management tempered their outlook for earnings growth for 2018, given a slight increase in input costs; however, the company remains on track to deliver double-digit earnings growth this year. Both stocks had been strong outperformers in the prior two years. Our overweight allocation and stock selection within Consumer Staples detracted from relative performance, as the sector declined partly on concerns of competitive pressures within the consumer packaged goods industries. Philip Morris Int l (-17.6%) declined substantially on the news that growth of its iqos nextgeneration reduced-risk product has slowed in Japan; however, iqos is currently the market share leader in the next generation category and is expected gain approval in key markets including the US within the next year. Altria Group (-7.8%) declined partly on concerns that newer vapor/e-cigarette competitors, such as JUUL, are taking share in the US. However, JUUL, a relatively new entrant in the space that has experienced rapid initial growth, still only accounts for a small portion of the overall tobacco category and could potentially face scrutiny from the FDA. Finally, our underweight allocation to the Energy sector detracted from relative performance, as Energy was the best performing sector in the quarter. The higherbeta E&P companies outperformed the Integrated Oil companies, however all four energy holdings in the portfolio, ConocoPhillips (COP), Royal Dutch Shell (RDSB), Exxon Mobil (XOM) and Chevron (CVX) were up over 11% in the quarter. Portfolio Changes: Purchases / Additions A new position in Walgreens Boots (WBA) was established in the High Dividend strategy. Walgreens is a US-based retail drugstore offering a wide variety of prescription and non-prescription drugs and consumer goods in more than 13,200 retail pharmacies across 11 countries, primarily in the US and the UK. The company also offers health services, including primary and acute care, wellness, pharmacy and disease management services, and health and fitness. Walgreens operates a wholesale operation serving more than 230,000 pharmacies, hospitals, and clinics in over 20 countries. 4 of 8

5 Walgreens is a dominant player in the consolidating retail pharmacy industry, further strengthening its position through the acquisition of nearly 2,000 Rite-Aid stores in the US. Within the evolving retail landscape, the company is focused on growing its health care segment through the development of valueadded services to capitalize on demand and drive store traffic. Walgreens plans to expand its own offering of specialty medical services including hearing, optical and lab testing and partner with strong health systems and insurers to offer urgent care services within its store and adjacent to large health systems. In addition, it has developed partnerships with LabCorp and Fedex for in-store services and creating pilot programs to capitalize on its advantageous retail footprint. In a consolidating health care services supply chain (with multiple managed care, pharmacy benefit managers and retail pharmacy transactions), Walgreens strength is aided by its position as the largest independent retail pharmacy and stands to benefit from competitive conflicts with the merger of CVS/Aetna as the managed care industry potentially moves volume to Walgreens. While US brick-and-mortar retailers have been pressured by Amazon and other online retailers, Walgreens retail ( front-end ) segment has opportunities for top-line growth and margin expansion. Management is focused on increasing penetration of its strong private label business, particularly in the beauty category by leveraging the strength of the Boots brand, which will drive improving gross margins if successful. In addition, with digital investments and data analytics, the company is improving its merchandizing and rationalizing SKUs which is improving operating margins. Walgreens expects double digit EPS growth in 2018 through organic growth, operational efficiencies and tax reform. The stock trades at an attractive valuation: 11x 2018 earnings with a 2.7% dividend yield and a 40% payout ratio. The risks for Walgreens in its retail business are similar risks faced by many traditional retailers the increasing penetration of Amazon and on-line retailers; however, Walgreens should benefit from retail industry consolidation and its own footprint expansion into healthcare services. While the consolidating health care services landscape may cause short-term disruptions for Walgreens pharmacy services business, the company stands to benefit from its strengthened competitive position. The positions in SunTrust Bank (STI), Bell Canada (BCE), Welltower (WELL), Genuine Parts (GPC) and DowDupont (DWDP) were raised in the strategy. Sales / Reductions The positions in Adient (ADNT) and Brighthouse Financial (BHF) were sold in the quarter. Both holdings were spin-off securities received over the last two years and represented insignificant positions in the strategy. Adient, an automotive seating supplier, operates in a highly competitive industry with limited competitive advantages. Brighthouse Financial, a life insurer specializing in variable annuities, is a turnaround situation and will unlikely pay a meaningful dividend for quite some time. Both are smallcapitalization stocks. The positions in Metlife (MET), Intel (INTC), Pfizer (PFE), Boeing (BA), Merck (MRK) and Altria (MO) were reduced in the quarter. 5 of 8

6 Dividend Summary: In the second quarter of 2018, 8 out of 39 portfolio companies raised average increase of +6.6% %: their dividend payments with an Chubbb (CB) raised its dividend payment by +2.8% Exxon Mobil (XOM) raised its dividend payment by % Johnson & Johnson (JNJ) raised its dividend paymentt by +7.1% MetLife (MET) raised its dividend payment by +5.0% Philip Morris International (PM) raised its dividend payment by +6.5% Travelers (TRV) raised its dividend payment by +6.9% Unilever (UN) raised its dividend payment by +8.0% Walgreens Boots Alliance (WBA) raised its dividend payment by +10.0% Year-to-date, + 8.1%. 25 out of 39 portfolio companies have raised d their dividends with an average increase of Market Outlook: The current bull market, the 2nd longest at 112 months and third strongest at +305% since 1930, has remained range-bound this year, as it consolidates the significant gains over the past few years. The market continues to weigh solid US economic and strong corporate earnings growth against the negative impact from recently announced trade tariffs, slowing global growth and the Fed rate hike cycle and balance sheet reduction (quantitative tapering) fueling a stronger US dollar. US equities remain bifurcated with a narrowing group of Technology and Consumer Discretionary stocks in addition to the resurgence of Energy leading performance,, while a sell-off initially concentrated in high dividend sectors has now spread to Industrials and Financials. The result is a widening performance disparity between Growth and Value stocks and an increasingg spread between the style P/E multiples. Figure 4: Spread between Growth and Value Relative P/E Multiple Source: Cornerstone Macro, 6/25/2018. Despite strong earnings growth, thus far in 2018, most sectors have seen their 2018 P/E multiples contract except for two sectors - Information Technology and Consumer Discretionary. 6 of 8

7 10.0% 5.0% 0.0% Figure 5: % Change in 2018 P/E Multiple Since 12/18/ % 4.4% -5.0% -10.0% -15.0% -20.0% -15.2% -13.0% % -9.0% -6.5% -6.3% -6.1% -25.0% -21.9% -21.9% TEL ENEE FIN IND MAT CS S&P 500 HC UTL TECH CD Source: Strategas Research Analysis, 7/1/2018. As a result of its strong multi-year performance but increasingly in-line earnings growth, Technology sector P/E multiples have risen dramatically. According to Bernstein Research, Technology now trades at 1.18x the market s Price/NTM Earnings multiple, making it the most expensive sector in the market. Technology now comprises 26% of the S&P 500 s markett capitalization while accounting for 18% of earnings. The sector remains the most crowded in the market, residing in the 90 th percentile relative to history. Figure 6: S&P Tech NTM P/E vs. S&P 500 Figure 7: NASDAQ NTM P/E vs. S& &P 500 Source Figures 6 and 7: Factset, Morgan Stanley Research,, Idea: US Equity Strategy, 7/9/2018. Meanwhile, valuations on the so-called RUST (REITs, Utilities, Staples and Telecommunications) sectors of the market, those with above-average dividend yields andd generally viewed as defensive, have fallen dramatically in the past two quarters and now all four sectors trade at relative P/E ratios below their 10- year averages. Specifically, for the Consumer Staples sector, this year ss dramatic underperformance has led to significant multiple compression. 7 of 8

8 Figure 8: Consumer Staples Performance andd NTM P/E Multiple Summary Source: Factset, Morgan Stanley Research, Idea: US Equity Strategy, 7/9/2018. Data as of 7/4/2018. The threat from technology competitors and challenger brands has driven Consumer Staples sentiment to near historic lows as the market questions the ability of many consumer brands to maintain market share. However, companies are undergoing significant transformations to adapt, by erecting barriers and consolidating, or face the prospect of shrinking over time. The number of industries facing threats from Amazon and new competitors continues to grow early on, retailing was viewed as an industry in disruption, however cable & media, healthcare, industrial distributors, and transports are weak on perceived threats. Pessimism for these businesses remains high and the market in many instances has priced in little to no growth or a significant decline in their businesses. Since the initial sell-off in many retail stocks in 2016, the sector has battled newer entrants by making significant investments, while consolidation through M&A and bankruptcies have reduced competitive intensity; sentiment and stock prices for retailers has since moved higher. Thank you for your continued support. Feel free to reach out to us if you have any questions. Best Regards, Schafer Cullen Capital Management, Inc. Disclosure: Schafer Cullen Capital Management (SCCM or the Adviser ) is an independentt 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 off 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 onn factors such as market conditions at the time of investment, and / orr 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 SCCM 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 determinedd by the Adviser. The Adviser has selected benchmarks, which in their opinion closely resemble the style of the securities held inn 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 thee benchmark index is not. Investors should be aware that the Adviser makes no attempt to match the portfolioo 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. In the case where this report displays model results, please be aware that such results do not represent actual trading and that results may not reflect the impact that material economic and market factors might have had on the Adviser's decision-making if the Adviser were actually managing clients' money. Model and actual results reflect the deduction of advisory fees, brokerage or other commissions, and any otherr expenses that a client would have paid or actually paid (Net of Fee performance) and reflect the reinvestment of dividends and other earnings. 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; SCCM 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. Alll opinions expressed constitute Schafer Cullen Capital Management s judgment as of the datee of this report andd are subject to change without notice. 8 of 8