Separately Managed Accounts

Transcription

1 Fourth Quarter 2017 Separately Managed Accounts Newton Dreyfus International Equity Newton Dreyfus Global Equity Sub-Advised by Newton Investment Management (North America) Limited 0 Not FDIC-insured. Not bank-guaranteed. May lose value.

2 Two Professional Firms Committed to Your Success Dreyfus Dreyfus Investments is a division of MBSC Securities Corporation, a subsidiary of The Dreyfus Corporation. The Dreyfus Corporation was founded in Newton London-based global equities investment managers for more than 30 years. Newton, a subsidiary of BNY Mellon, has approximately $72.8 billion in assets under management (AUM) with $25.6 billion in global equity as of December 31, Newton and/or the Newton Investment Management brand refers to the following group of affiliated companies: Newton Investment Management Limited, Newton Investment Management (North America) Limited (NIMNA Ltd) and Newton Investment Management (North America) LLC (NIMNA LLC). NIMNA LLC personnel are supervised persons of NIMNA Ltd and NIMNA LLC does not provide investment advice, all of which is conducted by NIMNA Ltd. NIMNA LLC and NIMNA Ltd are the only Newton companies to offer services in the U.S. Newton is a wholly owned subsidiary of The Bank of New York Mellon Corporation. In addition, AUM for Newton may include assets managed by Newton s officers as dual officers or employees of The Bank of New York Mellon and assets of wrap-fee account(s) for which Newton Investment Management Limited provides certain investment management services to MBSC in connection with these products. Newton, The Dreyfus Corporation and MBSC Securities Corporation are subsidiaries of The Bank of New York Mellon Corporation. MBSC Securities Corporation, a registered broker-dealer and investment manager, provides discretionary investment management services for the products described in this presentation. Newton provides certain investment management services to MBSC in connection with the strategies described in this presentation. 1

3 The Newton Difference Unique Combination of Bottom-Up Stock Selection Within a Thematic Framework Themes help identify areas of risk and opportunity, helping narrow the stock universe. Bottom-up stock selection is a priority decision, not sector or country allocations. Flexible investment analysis allows for using differing investment tools, not rules, during changing market and business cycles. The investment process is style and market cap agnostic. Performance-Driven Culture Newton manages a proportion of its assets utilizing a performance fee-based structure, attempting to create a performance-driven culture aligned with clients objectives. Team-Focused Culture Newton s investment process relies on the interaction between its global analysts, portfolio managers and regional specialists. This process looks to capture the best ideas within the house and deliver them into each client s portfolio. 2

4 Newton s Investment Philosophy Global thematic investing since 1978 We believe in Global Themes Analysis Conviction Thinking globally, evaluating each idea in a global context Using themes to understand the forces driving global change Conducting rigorous fundamental analysis incorporating Environmental, Social and Governance (ESG) considerations Constructing investment portfolios incorporating our highest -conviction ideas Source: Newton, 2017 Our primary objective is delivering results for our clients 3

5 Newton Investment Management As of December 31, 2017 Focus Single location Investment only, no distractions Themes Stability and Experience Approaching 40 years in global investing Team-based approach Perspective Thematic framework Proprietary global research, skilled security selection Integrated ESG research Alignment of Interests Performance culture Real equity ownership 1 AUM for Strategic Asset Allocation (SAA) included in respective underlying asset class. Note effects of rounding. Source: Newton, December 31, Our culture is aligned with your objectives 4

6 Newton Global Equity Team Idea generation and input GLOBAL STRATEGY GROUP THEMATIC FOCUS GROUPS BOND/FX STRATEGY GROUP Global Research 15 years investment experience 9 years at Newton Industry Analysts Global Equity Leadership 17 years average investment experience 11 years at Newton Portfolio Managers 19 years investment experience 14 years at Newton Global Equity Responsible Investment Analysts Raj Shant Robert Hay Terry Coles Equity Jeff Munroe Paul Markham Ben Smith Multi-Asset & UK Multi-Asset Real Return Credit Analysts Emerging & Asian Equity Nick Clay Ian Clark Robert Canepa-Anson John Gilmore Yuko Takano Emma Mogford Fixed Income Source: Newton, December 31, Years investment experience and tenure at Newton are team average numbers. Total number of investment personnel = 64 (some investment professionals are included in more than one category). Length and breadth of experience, diversity of perspectives 5

7 Investment Philosophy We believe In active management, where portfolios reflect our conviction In taking a long-term perspective, using themes to understand forces driving change Every investment idea must be understood in a global context Every investment idea should be subject to rigorous and consistent analysis 6

8 Our Investment Process We think globally, using themes which: Represent key forces of observable change Provide long-term orientation Provide a stimulus for debate and focus for research We conduct proprietary global research with: Career global sector analysts Credit, asset class, regional, strategic complements Responsible investment Investment engine deliberately based in London. We believe this fosters: Perspective: dispassionate global judgment Communication culture, robust real-time debate Efficient idea generation and implementation Client requirements Client portfolios Investment risk group We construct single portfolios: Research recommended lists act as menus Model portfolios provide leadership Portfolio managers given discretion and accountability Perspective, pragmatism and insight are key 7

9 Global Thematic Framework Themes help identify opportunities and challenges Identify Drivers of Long-Term Change Represent the First Stages of Idea Generation and Risk Management Allow a Longer-Term Global Perspective in a Volatile World Provide a Dynamic Framework for Investment Thinking Source: Newton, Objective trends, not subjective forecasts 8

10 Stock Selection Newton s long-term perspective is built on: Themes Identifying drivers of change, providing a framework for idea generation Fundamentals Conducting rigorous proprietary research Valuation Investing in what Newton believes are strong businesses at the right price IDEAL CANDIDATE Source: Newton,

11 Newton Process overview Themes Global Research Portfolio Managers Client Portfolios Themes: Long-term in nature, set the background for our stock research and portfolio construction Global Research: Career industry analysts provide global stock recommendations, with integrated ESG 1 research Portfolio Managers: Provide a combination of perspectives and ensure ideas are delivered effectively and consistently into portfolios Client Portfolios: High-conviction, single portfolios constructed from firmwide recommendations 1 Environmental,Social and Governance. Process designed to encourage lateral thinking, teamwork, fluid communication and swift implementation of ideas 10

12 Global Research Sector Team Team Overview Duncan Bulgin Head of Research Robert Canepa- Anson 3 Tim Lucas Michal Plotkowiak Laura Sheehan Mathieu Poitrat Rachmaninoff TBD Jeremy Stuber 1 Fati Naraghi Jonathan McMullan TBD Nick Pope Emily Heaven Stephen Rowntree Global research 14 Industry analysts 6 Credit analysts 4 Responsible Investment 2 Strategy Maria Toneva Amy Chamberlain Rob Stewart 4 Head of Responsible and Charity Investment Ian Burger Victoria Barron Lottie Meggitt TBD Howard Cunningham 2 Scott Freedman 2 Martin Chambers Parmeshwar Chadha 2 Ashwin Palta Anna Martinez Charles French Head of Investment Source: Newton, December 31, Accounting and valuation oversight; 2 Combined Research/Investment Management roles; 3 Additional focus on Global Income stocks; 4 Portfolio management responsibilities. Brendan Mulhern Fostering collaborative teamwork 11

13 Buy Discipline Newton typically buys stocks that it believes are: Attractively valued (upside potential) Financially and commercially sound (pass quality tests) Benefiting from one or more investment themes Strong buy discipline 12

14 Sell Discipline Newton typically sells stocks that it believes are: Fully valued or where growth prospects are no longer applicable Showing a deterioration of business fundamentals No longer a beneficiary of an investment theme Strong sell discipline 13

15 Potential Newton Benefits Newton is a highly experienced asset manager with an established history of investing in international markets. London-based manager with 30+ years of global equity investing and an international equity composite launched 18 years ago. Experienced team of portfolio managers supported by global sector analysts. Its entire investment team s location is in one single office and designed to encourage efficient idea generation and rapid implementation of ideas into portfolios. Thoughtful combination of rigorous bottom-up analyses within a global thematic framework: Themes help the investment team identify areas of risk and opportunity, while rigorous bottom-up analyses help the team select the right securities. Client-focused firm with a performance-driven culture focused on delivering for our clients. 14

16 Newton Dreyfus International Equity Portfolios

17 Newton Dreyfus International Equity Strategy Type International Equity Objective To achieve long-term capital growth from investing in global equities excluding U.S. securities A focused, actively managed portfolio of global equities Flexibility: ability to invest anywhere around the world, excluding the U.S. Freedom: portfolio can deviate considerably from the benchmark Integrated ESG research Stocks held will generally be Research Recommended by Newton and/or constituents of Newton s International Equity model portfolio Emerging market exposure capped at 20%, off-benchmark exposure capped at 25% in total There s no guarantee the strategy s objective will be achieved. Portfolio holdings are subject to change at any time without notice and may not be construed as investment recommendations. Please see important information at the end of this presentation. 16

18 Portfolio Information Newton Dreyfus International Equity as of 12/31/17 TOP 10 HOLDINGS SECTOR POSITIONS RELATIVE TO MSCI EAFE (%) COMPANY Percent of Portfolio TechnoPro Holdings 3.95 Wolters Kluwer 3.68 Royal Bank of Scotland Group 3.47 Infineon Technologies 3.41 Sony 2.58 Royal Dutch Shell 2.53 AIA Group 2.41 Japan Tobacco 2.35 Vodafone Group 2.20 Novartis 2.14 Total Information Technology Consumer Discretionary Real Estate Other* Telecommunication Services Industrials Energy REGIONAL ALLOCATION NEWTON DREYFUS INT L EQUITY (%) MSCI EAFE (%) RELATIVE (%) Japan Emerging Other Europe Eurozone Europe Non-Eurozone Asia Pacific ex-japan Emerging Market (Subtotal) Developed Market (Subtotal) Consumer Staples Health Care Utilities Financials Materials Cash Source: Newton. Based on a model wrap account and subject to change; actual individual accounts may vary. Sectors are defined according to the Global Industry Classification Standard. There can be no assurance that the securities purchased will remain in the portfolio or that other securities have not been purchased. The holdings listed should not be considered recommendations to purchase or sell a particular security. It should not be assumed that securities bought or sold in the future will be profitable or will equal the performance of the securities in this list. Newton will provide a complete list of portfolio holdings purchased and sold in the last 12 months upon request. The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. An investor cannot invest directly in any index. While the MSCI EAFE Index does not contain any ADRs, the Newton International Equity wrap accounts are composed mostly of ADRs. * Represents position in the MSCI Japan ETF, a non-benchmark holding. 17

19 International Equity Investing Seeking to manage risks Bottom-up risk management MSCI EAFE: +2% per annum 1 Themes International Equity Strategy Security selection Portfolio construction Proprietary research Fundamentals Valuation Single portfolio approach Perspective Risk management (portfolio guidelines) Risk Parameters Portfolio diversification and off-benchmark constraints: Max 25% off-benchmark exposure Max 20% emerging market exposure Risk monitoring Quantitative Risk Assessment How much risk? What kind of risk? Is risk consistent? Stock weights, correlation, volatility Currency, industry, stock-specific Strategic views, security selection, income level 1 The MSCI EAFE Index is used as a comparative index for this strategy. The strategy does not aim to replicate either the composition or the performance of the comparative index. Seeking appropriate, consistent and intended risk 18

20 Newton Dreyfus International Equity Performance Total Returns as of 12/31/17 30% 25% 20% 28.06% 27.20% 28.06% 27.20% 25.02% 25.02% 24.22% 24.22% Newton Dreyfus International Equity ("Pure" Gross of Fee) Newton Dreyfus International Equity (Net 3% Max. Wrap Fee) MSCI EAFE Index MSCI All Country World Index (Ex-U.S.) 15% 10% 5% 6.00% 5.19% 5.01% 4.24% 8.05% 7.79% 7.84% 8.11% 7.90% 4.81% 4.86% 6.80% 6.60% 6.04% 4.94% 3.40% 2.56% 1.94% 1.84% 0% -0.51% -5% Qtr YTD 1-Year 3-Year 5-Year 7-Year 10-Year Annualized Source: MBSC and Lipper. Past performance is no guarantee of future results. Pure gross-of-fee returns are supplemental to net-of-fee returns and do not reflect the deduction of managed account fees. The information shown is supplemental to a fully compliant GIPS presentation following this page along with other important disclosures. Sources: MBSC and Lipper. For comparison purposes, the MSCI All Country World Ex-U.S. Index is included. The MSCI EAFE Index is an unmanaged index that tracks the stocks of about 1,000 companies in Europe, Australasia and the Far East. An investor cannot invest directly in any index. While the MSCI EAFE Index does not contain any ADRs, the Newton Dreyfus International Equity wrap accounts are composed primarily of ADRs and non-u.s. dollar-denominated ordinary shares. 19

21 Newton Dreyfus International Equity Composite Performance Presentation Year End December 31 Composite Annual Total Return ( Pure Gross of Fees)* (%) Composite Annual Total Return (Net of Fees) (%) MSCI EAFE Index Return (%) Number of Portfolios in Composite Composite Dispersion (%) Composite Ex-Post Standard Deviation (3-yr Annualized) ** Benchmark Ex-Post Standard Deviation (3-yr Annualized) ** Composite Assets at End of Period (U.S. $ Millions) Composite Assets as a Percentage of Firm s Assets Under Management (%) Total Firm Assets Under Management (U.S. $ Millions) , , , , *** , , , * Pure gross-of-fees returns are supplemental to net-of-fees returns and do not reflect the deduction of managed account program fees. ** Three-year annualized ex-post standard deviation of the composite is not required prior to *** Assets reflect the redefined firm. Effective January 1, 2009, the firm with which this composite has been associated was redefined. At that time, MBSC, as the redefined Firm, became specifically associated with the composites for which GIPS compliance had been claimed historically by The Dreyfus Corporation ( Dreyfus ). Prior to January 1, 2009, the firm was defined as The Dreyfus Corporation and included Dreyfus and certain of its adviser subsidiaries (including MBSC). Beginning in 2009, total firm assets reflect those of MBSC, not Dreyfus. No other changes were made to this presentation because of the redefinition. 20

22 Newton Dreyfus International Equity Composite Performance Presentation (cont d.) MBSC Securities Corporation ( MBSC or the Firm ) claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with GIPS standards. MBSC has been independently verified for calendar years 2002 through Verification assesses whether (1) the firm has complied with the composite construction requirements of GIPS standards on a firm-wide basis and (2) the firm s policies and procedures are designed to calculate and present performance in compliance with GIPS standards. The Newton Dreyfus International Equity Composite has been examined for the periods from April 1, 2006 through December 31, 2011, and from January 1, 2014 through December 31, The verification and performance examination reports are available upon request. A complete list and description of the Firm s composites are available upon request. For further information, please contact Dreyfus at MBSC is a registered investment adviser. MBSC is a wholly owned subsidiary of The Dreyfus Corporation ( Dreyfus ) and an indirect subsidiary of The Bank of New York Mellon Corporation ( BNY Mellon ). MBSC offers wrap account and separately managed account strategies managed by the Firm and other investment advisers. The Firm is defined as encompassing those accounts for which MBSC serves as the discretionary asset manager (as defined under, and reported in, MBSC s Form ADV) and excludes non-discretionary accounts (as defined under, and reported in, MBSC s Form ADV) and model delivery accounts. 2. Past performance is not indicative of future results and any portfolio could suffer losses as well as achieve gains. Performance returns are based in U.S. dollars, and are shown both before the deduction of managed account program fees ( pure gross of fees), and after the deduction of managed account program fees (net of fees). Net-of-fee performance figures demonstrate the compounding effect of fees and are derived by using the highest model, all-inclusive fee ( wrap fee ) of 3.00%. Returns include realized and unrealized gains and losses plus accrued income. The performance of the Newton Dreyfus International Equity Composite (the Composite ) is based in U.S. dollars and is net of non-reclaimable withholding taxes on dividends, interest income and capital gains where applicable. Generally, equity securities held in the composite that are listed on a major U.S. exchange are valued using the last sale price reported. For foreign equity and ADR positions that trade over the counter, an imputed price may be used, based on the last sale price reported on the primary foreign exchange, converted to U.S. dollars using the current currency exchange (or spot ) rate. Additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations is available upon request. 21

23 Newton Dreyfus International Equity Composite Performance Presentation (cont d.) 3. The Composite was created on April 1, 2006 with an inception date of April 1, From inception, the Composite consists of all fully discretionary international equity accounts subject to a wrap fee for which Newton Investment Management (North America) Limited, an affiliate of the Firm, has served as sub-adviser to MBSC. Accounts in the Composite are invested in international equities selected through a bottom-up process within a global thematic framework. The composition of the portfolios is limited to Depository Trust and Clearing Corporation (DTCC)-eligible securities of international companies, inclusive of American Depositary Receipts (ADRs), index-based exchange-traded funds, and/or non-dtcc-eligible foreign ordinary shares settled in U.S. dollars. The portfolios may invest as much as 25% of their total assets in markets outside the constituents of the MSCI EAFE Index, including a maximum of 20% in emerging markets. 4. The standard wrap fee charged to accounts included in this Composite ranges from 1.00%-3.00%, depending on assets and plan sponsor, and typically includes transaction charges, custody, advisory, servicing and consulting fees. Fees charged to individual accounts may vary. 5. Accounts are included in the Composite in the first full calendar month under management and, if terminated, remain in the historical Composite record through the last full calendar month under management. 6. Performance figures for each account within the Composite are calculated monthly on a trade-date basis. Monthly market values include all dividends, interest and accrued interest, and realized and unrealized gains or losses, if any, and reflect the daily weighting of cash flow, using the modified Dietz method. Composite performance results are asset-weighted on a monthly basis using beginning-of-the-month market values. Re-valuation of returns occurs when cash flows or security transfer in-kind exceeds 10% of the beginning-of-the-month market value. Account exclusion occurs when a client-initiated significant cash flow or security transfer in-kind exceeds 30% of the beginning-of-the-month market value. The account is removed temporarily from the composite for the month of the significant cash flow or security transfer in-kind, and returned to the composite the following month. Extended periods of composite performance are computed by linking monthly returns. Dispersion measures the variability of account returns within a composite and is calculated using asset-weighted standard deviation for any time period in which at least five accounts have been open for the entire year. 7. The benchmark for the Composite is the MSCI EAFE Index, which is a free float adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. Benchmark performance is net of withholding taxes using the highest tax rates applicable to non-resident individual investors. An investor cannot invest directly in any index. Benchmark returns are not covered by the reports of the independent accountants. 22

24 Newton Dreyfus Global Equity Portfolios

25 Newton Dreyfus Global Equity Strategy Type Global Equity Objective To achieve long-term capital growth from investing in global equities A focused, actively managed portfolio of global equities Flexibility: ability to invest anywhere around the world Freedom: portfolio can deviate considerably from the benchmark Integrated ESG research Stocks held will generally be Research Recommended by Newton and/or constituents of Newton s Global Equity model portfolio There s no guarantee the strategy s objective will be achieved. Portfolio holdings are subject to change at any time without notice and may not be construed as investment recommendations. Please see important information at the end of this presentation. 24

26 Portfolio Information Newton Dreyfus Global Equity as of 12/31/17 TOP 10 HOLDINGS COMPANY Percent of Portfolio Microsoft 5.32 Citigroup 3.65 Alphabet 3.31 AIA Group 2.66 RELX 2.44 Sony 2.34 Wolters Kluwer 2.30 Ferguson 2.28 Amazon.com 2.20 Apple 2.13 Total REGIONAL ALLOCATION NEWTON DREYFUS GLOBAL EQUITY (%) MSCI World (%) RELATIVE (%) Europe Eurozone Europe Non-Eurozone Japan Emerging Other Asia Pacific ex-japan North America Emerging Market (Subtotal) Developed Market (Subtotal) SECTOR POSITIONS RELATIVE TO MSCI WORLD (%) Consumer Staples 7.55 Information Technology 7.07 Other* 2.00 Consumer Discretionary 0.16 Telecommunication Services Energy Utilities Health Care Industrials Real Estate Materials Financials Cash Source: Newton. Based on a model wrap account and subject to change; actual individual accounts may vary. Sectors are defined according to the Global Industry Classification Standard. There can be no assurance that the securities purchased will remain in the portfolio or that other securities have not been purchased. The holdings listed should not be considered recommendations to purchase or sell a particular security. It should not be assumed that securities bought or sold in the future will be profitable or will equal the performance of the securities in this list. Newton will provide a complete list of portfolio holdings purchased and sold in the last 12 months upon request. The MSCI World Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets. The index includes 23 MSCI national developed market indices. An investor cannot invest directly in any index. While the MSCI World Index does not contain any ADRs, the Newton Global Equity wrap accounts are composed mostly of ADRs. * Represents position in the MSCI Japan ETF, a non-benchmark holding. 25

27 Newton Dreyfus Global Equity Performance Total Returns as of 12/31/17 25% 20% 22.36% 22.39% 22.36% 22.39% 18.69% 18.69% Newton Dreyfus Global Equity ( Pure Gross of Fee) Newton Dreyfus Global Equity (Net 3% Max. Wrap Fee) MSCI World Index 15% 11.54% 11.63% 10% 9.68% 9.25% 8.20% 9.17% 9.58% 5% 5.66% 4.86% 5.51% 6.39% 5.89% 4.53% 5.03% 1.39% 0% Qtr YTD 1-Year 3-Year 5-Year 7-Year 10-Year Annualized Sources: MBSC and Lipper. Past performance is no guarantee of future results. Pure gross-of-fee returns are supplemental to net-of-fee returns and do not reflect the deduction of managed account program fees. The information shown is supplemental to a fully compliant GIPS presentation following this page along with other important disclosures. The MSCI World Index is a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed markets. The index includes 23 MSCI national developed market indices. An investor cannot invest directly in any index. While the MSCI World Index does not contain any ADRs, the Newton Global Equity wrap accounts are composed mostly of ADRs. 26

28 Newton Dreyfus Global Equity Composite Performance Presentation Year End December 31 Composite Annual Total Return ( Pure Gross of Fees)* (%) Composite Annual Total Return (Net of Fees) (%) MSCI World Index Return (%) Number of Portfolios in Composite Composite Dispersion (%) Composite Ex-Post Standard Deviation (3-yr Annualized) ** Benchmark Ex-Post Standard Deviation (3-yr Annualized) ** Composite Assets at End of Period (U.S. $ Millions) Composite Assets as a Percentage of Firm s Assets Under Management (%) Total Firm Assets Under Management (U.S. $ Millions) N/A **** , , *** * Pure gross-of-fees returns are supplemental to net-of-fees returns and do not reflect the deduction of managed account program fees. ** Three-year annualized ex-post standard deviation of the composite is not required prior to ***Assets reflect the redefined firm. Effective January 1, 2009, the firm with which this composite has been associated was redefined. At that time, MBSC, as the redefined Firm, became specifically associated with the composites for which GIPS compliance had been claimed historically by The Dreyfus Corporation ( Dreyfus ). Prior to January 1, 2009, the firm was defined as The Dreyfus Corporation and included Dreyfus and certain of its adviser subsidiaries (including MBSC). Beginning in 2009, total firm assets reflect those of MBSC, not Dreyfus. No other changes were made to this presentation because of the redefinition. **** Less than five accounts were open during the full-year period. 27

29 Newton Dreyfus Global Equity Composite Performance Presentation (cont d.) MBSC Securities Corporation ( MBSC or the Firm ) claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with GIPS standards. MBSC has been independently verified for calendar years 2002 through Verification assesses whether (1) the firm has complied with the composite construction requirements of GIPS standards on a firm-wide basis and (2) the firm s policies and procedures are designed to calculate and present performance in compliance with GIPS standards. The Newton Dreyfus Global Equity Composite has been examined for the periods from April 1, 2006 through December 31, 2011, and from January 1, 2014 through December 31, The verification and performance examination reports are available upon request. A complete list and description of the Firm s composites are available upon request. For further information, please contact Dreyfus at MBSC is a registered investment adviser. MBSC is a wholly owned subsidiary of The Dreyfus Corporation ( Dreyfus ) and an indirect subsidiary of The Bank of New York Mellon Corporation ( BNY Mellon ). MBSC offers wrap account and separately managed account strategies managed by the Firm and other investment advisers. The Firm is defined as encompassing those accounts for which MBSC serves as the discretionary asset manager (as defined under, and reported in, MBSC s Form ADV) and excludes non-discretionary accounts (as defined under, and reported in, MBSC s Form ADV) and model delivery accounts. 2. Past performance is not indicative of future results and any portfolio could suffer losses as well as achieve gains. Performance returns are based in U.S. dollars, and are shown both before the deduction of managed account program fees ( pure gross of fees), and after the deduction of managed account program fees (net of fees). Net-of-fee performance figures demonstrate the compounding effect of fees and are derived by using the highest model, all-inclusive fee ( wrap fee ) of 3.00%. Returns include realized and unrealized gains and losses plus accrued income. The performance of the Newton Dreyfus Global Equity Composite (the Composite ) is based in U.S. dollars and is net of non-reclaimable withholding taxes on dividends, interest income and capital gains where applicable. Generally, equity securities held in the composite that are listed on a major U.S. exchange are valued using the last sale price reported. For foreign equity and ADR positions that trade over the counter, an imputed price may be used, based on the last sale price reported on the primary foreign exchange, converted to U.S. dollars using the current currency exchange (or spot ) rate. Additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations is available upon request. 28

30 Newton Dreyfus Global Equity Composite Performance Presentation (cont d.) 3. The Composite was created on April 1, 2006 with an inception date of April 1, From inception, the Composite consists of all fully discretionary global equity accounts subject to a wrap fee for which Newton Investment Management (North America) Limited, an affiliate of the Firm, has served as sub-adviser to MBSC. Accounts in the Composite are invested in U.S. and international equities selected through a bottom-up process within a global thematic framework. The composition of the portfolios is limited to Depository Trust and Clearing Corporation (DTCC)-eligible securities of global companies, inclusive of U.S. equities and American Depositary Receipts (ADRs), index-based exchange-traded funds, and/or non-dtcc-eligible foreign ordinary shares settled in U.S. dollars. The portfolios may invest as much as 25% of their total assets in markets outside the constituents of the MSCI World Index, including a maximum of 20% in emerging markets. 4. The standard wrap fee charged to accounts included in this Composite ranges from 1.00%-3.00%, depending on assets and plan sponsor, and typically includes transaction charges, custody, advisory, servicing and consulting fees. Fees charged to individual accounts may vary. 5. Accounts are included in the Composite in the first full calendar month under management and, if terminated, remain in the historical Composite record through the last full calendar month under management. 6. Performance figures for each account within the Composite are calculated monthly on a trade-date basis. Monthly market values include all dividends, interest and accrued interest, and realized and unrealized gains or losses, if any, and reflect the daily weighting of cash flow, using the modified Dietz method. Composite performance results are asset-weighted on a monthly basis using beginning-of-the-month market values. Re-valuation of returns occurs when cash flows or security transfer in-kind exceeds 10% of the beginning-of-the-month market value. Account exclusion occurs when a client-initiated significant cash flow or security transfer in-kind exceeds 30% of the beginning-of-the-month market value. The account is removed temporarily from the composite for the month of the significant cash flow or security transfer in-kind, and returned to the composite the following month. Extended periods of composite performance are computed by linking monthly returns. Dispersion measures the variability of account returns within a composite and is calculated using asset-weighted standard deviation for any time period in which at least five accounts have been open for the entire year. 7. The benchmark for the Composite is the MSCI World Index, which is a free float adjusted market capitalization-weighted index that is designed to measure equity performance of developed markets. The index consists of select designated MSCI national developed market indices. Benchmark performance is net of withholding taxes using the highest tax rates applicable to non-resident individual investors. An investor cannot invest directly in any index. Benchmark returns are not covered by the reports of the independent accountants. 29

31 Learn More For more information, please call Dreyfus at RISKS Equities are subject to market, market sector, market liquidity, issuer, and investment style risks, to varying degrees. Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries. American Depositary Receipts (ADRs) are certificates evidencing ownership of shares of a foreign-based issuer held in trust by a bank or similar financial institution. ADRs are alternatives to the purchase of the underlying securities in their original markets and currencies. ADRs are subject to many of the same risks as the foreign securities to which they relate. MBSC Securities Corporation ( MBSC ), through certain of its Dreyfus-branded divisions, sponsors or provides investment advisory or administrative services to various wrap programs. MBSC is a direct subsidiary of The Dreyfus Corporation ( Dreyfus ) and an indirect subsidiary of BNY Mellon. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Newton Investment Management provides certain investment management services to MBSC in connection with the strategies described in this presentation. BNY Mellon utilizes the Dreyfus brand as a distribution mark for certain investment management products for which it provides investment advisory or administrative services. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular investment, strategy, investment manager or account arrangement. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Please consult a legal, tax or investment advisor in order to determine whether an investment product or service is appropriate for a particular situation. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. The Dreyfus Corporation, Newton (the strategy's sub-adviser) and MBSC Securities Corporation are companies of BNY Mellon MBSC Securities Corporation, 225 Liberty Street, 19th Floor, New York, NY MARK DSA-NEWPRS