ARROW GLOBAL GROWTH FUND

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1 Experience. Active Management. The fi rst quarter s return was modest with the Fund up 0.9%. Equity markets performed well with the exception of Japan as shown in the table of returns below: Equities S&P % S&P TSX % Nikkei 225 (1.07%) STOXX Euro 6.39% ASX 3.51% Emerging Markets 11.14% Fixed Income US 10 year (2.33%) German 10 yr 0.40% BAML HYield 2.71% Commodities Gold 8.86% WTI Oil (9.59%) Copper 5.46% Ags (DBA) (0.95%) Currencies USD/CAD (0.92%) AUD/USD 5.84% USD/JPY (4.76%) EUR/USD 1.28% The biggest macro change in Q1 has been the market s increasingly negative view of the refl ation trade; and in particular, Trump s healthcare policy failure to create room for his tax cut policy. Government spending and lower corporate taxes both appear to be 2018 stories now. Politics aside, the cyclical backdrop that has been supporting refl ation is now beginning to falter. The so-called soft data (e.g. business and consumer confi dence surveys) has been strong but has, at least for now, not translated into the hard data (GDP, consumer spending etc.). We are watching the data closely maybe we have to be patient? Perhaps, but the business cycle is likely to end at some point this year as excess liquidity (liquidity over and above that required by the real economy) is set to roll over. Blame the FED recent rate hikes, along with two more telegraphed for 2017, is beginning to have an impact. The problem, as Hoisington Investments has identifi ed, is that four conditions today make rate hikes very different and potentially riskier than those of previous cycles 1 : 1. Deteriorating economy (poor GDP growth) 2. Highly indebted corporates and governments 3. Over levered FED / prior QE programs 4. Regulatory changes for banks (liquidity needs / lending standards) 1 Hoisington Investment Management Company, Quarterly Review and Outlook, First Quarter 2017, page 1

2 2 These conditions make any rate hikes more impactful and a potentially harmful force to the economy. Indeed, excess liquidity has been contracting. All of the main components of bank credit C&I, Real Estate, Consumer and Other are seeing growth rates rolling over. Given that the consumer accounts for some 70% of the U.S. economy, the consumer loan market especially in the more risky subprime categories is showing early negative signs (as seen in the charts below). In particular, credit card delinquencies and subprime auto loans troubles have the Fund short a number of companies in these areas. Inevitably many will suggest that a reversal of much of the Dodd-Frank framework would lead to greater credit availability. However, our view is that the credit cycle is far more important than the regulatory environment. At this late stage of the economic cycle, we expect wider credit spreads later this year and have been building spread trades in anticipation. Needless to say, as credit becomes stressed it will put pressure on equities. The combination of high leverage ratios, peak multiples and peak margins will make this a challenging period for investors. Source: Variant Perception, April 2017 The Chinese economy, the second largest in the world, remains a tough call. While leading economic indicators remain high thanks to even more spending stimulus, excess liquidity is now tightening as well as the government tries to reign corporate leverage. Inflation is rising and the banking sector remains stressed. We believe the 2H 2017 may be tough for the Chinese economy. Our preferred way to express this theme remains shorting the Aussie dollar and equities and the Canadian dollar and equities. We closed our Korean equity short as it we hit our stop loss (likely as the result of fl ows into EM where Korea is a large part of the MSCI index) but remain short the Singapore dollar and equities. A new trade is long Malaysia via the EWM ETF where the ringgit appears to have fully depreciated and equities are quite cheap. Elsewhere, in Japan, we have reduced our DXJ position to 7.5% as the Yen has strengthened making shares (especially export sector) less attractive. The key variable to watch here is the U.S. 10 year if it can remain anchored in the 2.4% to 2.5% range, then there is scope for further yen depreciation and equity performance into 2018.

3 3 In Europe, we have continued with hedged equity positions via the HEDJ and EUSC along with a pair trade of long Spanish and short Italian shares given the expected relative economic performance. Against our Japanese and European equity long positions, we continue to tactically short U.S. equity futures. We remain long (and nervous) emerging markets equities via the EEM. The big benefi ciary here has been the bounce back in EM FX and the better expectations for global economic growth. Institutional allocations to EM are fi nally starting to rise again as the consensus searches for cheaper markets with growth potential. This position serves as a useful hedge to our negative secular view on the global economy. On the fi xed income front, we have reduced our long Treasuries position and have closed out our successful Bund short. If 10yr rates move back to the 2.5% range we will re-establish this pair. Our timing on shorting U.S. high yield has been wrong so far but we will look to increase this position in Q2 when the technical backdrop deteriorates. Finally, in our FX allocations we closed our long MXN trade for a tidy proft and are now short with a 1.20 target. Our core positions are the AUD and CAD shorts. We closed our market hedge EUR/JPY short at 116 in March but have re-initiated at 122 recently. On the long/short sector portion of our book, our biggest allocations are in the Financials sector we are long European fi nancials and U.S. banks and insurers and short U.S. credit card and sub prime lenders along with select Canadian banks and mortgage companies. This trade has proven very profi table in April with the French election results and the challenges at Home Capital in Canada. Materials is our second largest exposure with long lithium (ALB. SQM, LAC) and gold (ABX, AEM, GDX) shares while shorting base metals fi rms and ETF s (RIO, BHP and XLB/XME). We expect our base metals short exposure to grow materially in Q2. Finally, we have an active long short portfolio in Industrials were we are long defence companies (NOC, LMT, RTN) and short deep cyclicals (DE, CAT, WAB, MSM). We have attached a copy of our macro and sector thematic trades as at March 31st. As always we appreciate your trust and look forward to a stronger second quarter. Sincerely, Jim McGovern Managing Director & CEO Arrow Capital Management Inc. Effective January 1, 2015, this fund was renamed Arrow Global Growth Fund and James McGovern was appointed as the sole portfolio manager. Prior to January 1, 2015, the fund was managed by different teams with substantially different investment parameters. For a complete history of this fund, including returns, please contact Arrow Capital Management Inc. Unless otherwise stipulated returns are net of all fees, in Canadian dollars, reflect class F units and assume reinvestment of all distributions. This document is not to be construed as a public offering of securities in any jurisdiction in Canada. The offering of units of the Fund is made pursuant to the Offering Memorandum only to those investors in all jurisdictions of Canada who meet certain eligibility of minimum purchase requirements. Important information about Arrow Funds, including statement of each fund s fundamental investment objective, is contained in their respective offering memorandum, a copy of which may be obtained from Arrow Capital Management Inc. Please read the applicable offering memorandum carefully before investing. The information and materials in this document are for informational purposes only. They are not intended as investment, financial or other advice. The information included in this document is not an offer to sell. While the information and material in this document are believed to be accurate at the time they are prepared, Arrow Capital Management Inc. (and its affiliates, subsidiaries or sub-advisors) cannot give any assurance that they are accurate, complete or current at all times. Past returns are not necessarily indicative of future performance. Actual results will vary.

4 MACRO THEMES (GROSS 65%) Experience. Active Management. March 31, 2017 Price/Yield (YE) ($) Target Stop Size 1. Long Japanese Equities (FX Hedged) DXJ $49.54 $60 $44 5% - 10% Hedges/Delta Trading: Short AUD/JPY, Long Energy 2. China Slowing/Short Southeast Asian Equities/FX EWY $53.22 $48 $60 2% - 5% EWS $19.93 $18 $ % - 5% EWH $19.48 $17 $ % - 5% 3. Long European Equities (FX Hedged) HEDJ/EUSC $49.54 $75 $51 5% - 10% Long EWP/Short EWI $24.67 $30 $23 0% - 5% 4. Long U.S. and Australian 10 yr Treasury Futures U.S. 10 yr Futures % - 20% Aussie 10 yr Futures % - 5% Short German 10 yr Futures % - 2% Short U.S. High Yield (JNK) $36.50 $35 $38 2% - 5% 5. Short Canadian Equities & Australian Equities XIU $22.64 $18 $24 5% - 10% EWA $20.23 $18 $22 2% - 5% 6. Short Canadian Dollar vs. USD USD/CAD % - 25% 7. Long Gold/Select Gold Equities Futures % - 5% Gold Equities (GDX) $20.92 $30 $18 0% - 5% 8. Long EM Equity Long EEM/EWM $35 $40 $30 2% - 5% Short EWZ (01/04/17) $36.75 $30 $40 1% - 3% 9. Long U.S. Equity Volatility 1% - 5% Long Puts on SPX % - 2%

5 EQUITY SECTOR THEMES (GROSS 65%) 1. Financials 2. Consumer 3. Materials 4. Energy 5. Utilities/REITS 6. Healthcare 7. Technology 8. Industrials U.S./European Financials Select Canadian Financials U.S. Regional Banks/Finance Companies Select M&A Targets Spirits/Beverage Companies Select Restaurants Select Retailers Lithium Producers Precious Metal Companies U.S. Steel Companies Iron Ore Producers U.S. Oil E&P Companies Refiners Integrated Oil Companies Select Pipeline/Infrastructure Companies Select REITs Select Biotech Companies Select Hospitals/Medical Devices Select Chip Makers/Flash Defense Companies Select Industrials Offering of units in the Arrow Global Growth Fund are made pursuant to the Confi dential Offering Memorandum (offering memorandum) only to those investors who meet certain eligibility or minimum purchase requirements. Important information, including the fund s fundamental investment objective is contained in the offering memorandum which may be obtained from Arrow Capital Management Inc. Please read the offering memorandum carefully before investing. Past returns are not necessarily indicative of future performance. Actual results will vary. Copyright Arrow Capital Management Inc Arrow, Arrow Capital and Arrow Capital Management are all trademarks of Arrow Capital Management Inc. Experience. Intelligent Investing is a trademark of Arrow Capital Management Inc.