Figure 1: High Dividend Value Equity Returns vs. Benchmark

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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 U.S. equity markets delivered slight gains in the first quarter of 2016, with the S&P 500 returning 1.3% and the Russell 1000 Value 1.6%. These figures however do not reflect the bifurcated performance of the market over the quarter, as the indices declined over 10% through mid-february before rebounding nearly 13% by the end of March. The initial decline was precipitated, in part, by concerns about slowing global economic growth. China reported 2015 GDP growth of 6.9%, the country s lowest level in 25 years. In the U.S., GDP growth slowed to 1.0% in the 4 th quarter of 2015 while euro zone growth and inflation continued to run below expectations. Commodities prices continued their slide early in the quarter with the WTI oil benchmark declining over 20% through mid-february on continued concerns of a supply glut and slowing demand. In February, central bankers worldwide announced measures to boost growth and stabilize markets in response to the deflationary market action. The Federal Reserve communicated its intent to delay interest rate increases while the ECB expanded its quantitative easing program and the Bank of Japan cut a key lending rate to negative territory for the first time in its history. Gold, the best performing asset class in the quarter, increased 17% in Q1, signifying market concerns over the long-term consequences of expanded central bank balance sheets and negative rates. The Energy, Materials and Industrials sectors, which had suffered steep losses at the beginning of the quarter, recovered sharply on news of a potential coordinated effort by key OPEC and non-opec suppliers to freeze oil production. The beta-driven rally which began on February 11 th was led by stocks with the highest short interest. Given the tumultuous nature of the markets, equity investors sought refuge in the defensive Utilities (+15.6%) and Telecom (+16.6%) sectors. Health Care was the worst-performing sector, down 5.5%, as a growing chorus of criticism from leading Presidential candidates increased concerns about drug pricing. Financials were also down for the quarter (-5.1%), largely on concerns about persistently low interest rates and loans to struggling energy companies. Performance Analysis: The High Dividend Value Equity composite returned 1.7% in the first quarter of 2016, net of fees, versus 1.3% for the S&P 500 and 1.6% for the Russell 1000 Value (Figure 1). Figure 1: High Dividend Value Equity Returns vs. Benchmark Q1 YTD 1 Yr 3 Yr 5Yr 10 Yr Since Incept* High Dividend Value Equity (net) S&P 500 Index Russell 1000 Value Index *December 31, Performance for periods greater than 1 year is annualized. 1 of 7

2 Portfolio Attribution: Attribution Effects High Dividend Value vs. Russell 1000 Value 12/31/2015 3/31/2016 Source: SCCM/Bloomberg, 3/31/2016 The Financials sector was the strongest contributor to relative performance during the quarter due to a meaningful underweight relative to the benchmark. Financials, the worst sector for the benchmark, came under pressure from capital markets and commodities volatility and net interest margin compression in this low rate environment. Chubb (+2.5% in Q1) and Travelers (+4.0% in Q1), defensive property and casualty insurers, as well as Welltower (+3.3% in Q1), a healthcare REIT, outperformed in the quarter. HSBC, Welltower and HCP increased their dividend payments during the quarter. The strategy s Consumer Staples exposure was aided by an overweight allocation and strong stock selection. Philip Morris International (+12.8% in Q1), Altria (+8.6% in Q1), Kimberly Clark (+6.4% in Q1) and Unilever (+3.9% in Q1) outperformed the sector as investors sought companies with sustainable cash flows and dividends. Macroeconomic factors boosted the sector namely the decline in US Treasury bond yields increasing the appeal of high dividend equities and the weakening of the US dollar aiding many Consumer Staples companies that have significant overseas exposure. 2 of 7

3 The Telecommunication Services sector contributed to relative performance driven by an overweight allocation. Bell Canada (+19.3% in Q1) and AT&T (15.4% in Q1) outperformed the benchmark as investors sought companies with sustainable cash flows and dividends in sectors with attractive valuations. Vodafone was a detractor on the sector declining 0.7% during the quarter. Consumer Discretionary was the best performing sector for the portfolio due to the outperformance of our sole position, Genuine Parts which returned 16.5% in the quarter. The company s strong position in the automotive aftermarket business continues to strengthen with recent capital investments while its Industrial business appears to be stabilizing after several quarters of weakness. The company raised its dividend by 7% in the quarter. The strategy benefitted from strong stock selection within the Information Technology sector with Corning (15.1% in Q1) and Symantec (12.2% in Q1) outperforming the benchmark in the quarter. The position in Symantec was sold at an opportune time during the quarter, after a significant special dividend was paid shareholders in early March. Cisco reported solid Q4 results and raised its dividend payment by 24% while Corning raised by over 12%. Health Care detracted from performance due to the underperformance of Eli Lilly and Astrazeneca. The decline in Eli Lilly was driven by a broad-based sell-off in the biologic space while Astrazeneca underperformed after initiating weaker-than-expected 2016 guidance. Johnson & Johnson (3.7% in Q1) and Merck (1.0% in Q1) outperformed the sector during the quarter. Market sentiment remained negative as political rhetoric targeting exorbitant drug prices heightened on both the Democratic and Republican sides in the primary election season. The strategy s underweight to the Energy sector hurt relative performance during the quarter. Royal Dutch Shell (9.0% in Q1), Exxon Mobil (8.2% in Q1) and Chevron (7.4% in Q1) all performed well during the quarter with ConocoPhillips (-13.1% in Q1) being the only laggard driven in large part by the decision to reduces its quarterly dividend in February. The Materials sector was a detractor as our sole position in DuPont underperformed after being a standout in recent quarters. Industrials detracted from performance as our stock positions delivered mixed results during the quarter. 3M and General Electric were positive contributors during the quarter while shares of Raytheon paused and Boeing issued weaker-than-expected 2016 EPS guidance causing the stock to underperform in the quarter. Boeing s management still expects EPS growth of ~10% year-over-year in 2016 and in December raised its dividend by nearly 20%. The Utilities sector was the best performing sector for the benchmark in Q1 and our underweight allocation was a drag on performance. NextEra Energy, the only utility stock in the portfolio, returned 14.8% during the quarter and expects to further benefit from the growth of renewable generation in the US. NextEra increased its dividend by 13.0% during the quarter. Portfolio Changes: Increased Positions Boeing (BA): The position in Boeing was raised in the quarter. The stock underperformed early in the quarter after the company released disappointing 2016 EPS guidance driven by commercial aerospace program transitions and disclosure of a potential non-cash write-down in its 787 program. Boeing s 3 of 7

4 record backlog of 737 Max, 777 and 787 orders remains intact and earnings and cash flow are set to accelerate as the company delivers on its order book with improved manufacturing efficiencies. The defense business, 1/3 of its revenues, will benefit from increased US Department of Defense spending to combat global threats and a strong backlog of international orders. Corning (GLW): The position in Corning was raised in the quarter. Corning s leading position in the glass and LCD business has strengthened over time due to consolidation and its initiative to drive down costs. Its fiber optics business is benefitting from data center build-outs and new applications for gorilla glass such as the automotive market represent catalysts for earnings growth. In February, the company raised its dividend 12.5% and intends to return more cash to shareholders over the next several years given a low 35% payout ratio. Sold Positions Symantec (SYMC): Symantec was sold out of the High Dividend Value Equity strategy in Q1. In February the company announced it will pay a special $4 cash/share dividend to shareholders but re-base its quarterly dividend due to the recent sale of its storage business, Veritas. In March shareholders received the dividend and the stock performed well given increasing expectations that the Enterprise business is delivering on a strong pipeline of endpoint security products and the Consumer division may stabilize. The stock was sold at the end of the quarter at a valuation of 16x 2016 earnings with a forward dividend yield of 1.5%. Dividend Summary: In the quarter, 12 portfolio companies raised their dividend payments with an average increase of 8.3%: MMM (MMM) raised its dividend payment by 8.0% BCE (BCE) raised its dividend payment by 5.0% Cisco Systems (CSCO) raised its dividend payment by 23.8% Corning (GLW) raised its dividend payment by 12.5% Diageo (DEO) raised its dividend payment by 5.1% NextEra Energy (NEE) raised its dividend payment by 13.0% Genuine Parts (GPC) raised its dividend payment by 7.0% Welltower (HCN) raised its dividend payment by 4.2% HCP (HCP) raised its dividend payment by 1.8% HSBC Holdings (HSBC) raised its dividend payment by 5.0% Kimberly-Clark (KMB) raised its dividend payment by 5.0% Raytheon (RTN) raised its dividend payment by 9.3% This builds on the strength of 2015 where 28 out of 37 companies raised their dividends with an average increase of 6.8%. 4 of 7

5 In addition, during the quarter two portfolio companies made significant dividend announcements: In February, ConocoPhillips announced it will reduce its quarterly dividend by 2/3 from $0.75/share to $0.25/share. While we were disappointed in the action, given management s recently affirmed commitment to maintaining the dividend, this extreme oil price environment has forced many companies in the sector to take drastic actions. To preserve its balance sheet strength in light of the credit rating agencies industry review and expected credit tightening across the industry, management reduced the dividend and implemented further capital expenditure cuts which should improve net cash flow by $4.4B in Management believes this new dividend level is sustainable for a prolonged downturn. The re-based dividend yield was 2.5% at quarterend. As oil prices recover, the company will benefit from the financial and operational actions they have taken in the downturn and the stock should recover. Management has stated that as cash flows grow, the dividend is expected to grow again. Symantec announced it will pay a special dividend of $4.00 per share, representing a 20% dividend yield, and repurchase nearly $3B in stock as it returns proceeds from its recent sale of Veritas, a software backup and recovery business. Symantec, now a smaller focused company, will reduce its quarterly dividend by 50% from $0.15/share to $0.075/share resulting in a dividend yield of 1.5%. The stock was sold out of the High Dividend Value Equity strategy in the quarter. In Q1, dividend growth measured by the number of companies increasing their dividends and the net dollar amount of dividend increases decelerated from the prior year for US domestic stocks. According to S&P, the number of companies reducing their dividends in the quarter increased nearly 50% with energy accounting for 43% of dividend cuts. In light of these trends, the High Dividend Value Equity s strong dividend sustainability and solid dividend growth position the strategy well in this market environment. Market Outlook: The S&P 500 has now registered two declines of over 10% since last summer, with first coming in August 2015 and the second occurring in January and February of this year. The market correction last August ended an especially long run without a 10% decline. As noted in past commentaries, oftentimes the longer a melt-up market lasts, the more speculative it becomes; as a result, when it finally does end, it opens the door for a very long and dramatic period of outperformance by value stocks. However, history has also shown that once an extended rally ends, speculation and momentum do not suddenly stop. Instead, a transition period ensues a period marked by volatility and possible new highs for the market. The recent short-covering rally is typical of a rally in this transition period. Figure 2 below illustrates how the most shorted names over this period dramatically outperformed the least shorted names. 5 of 7

6 Figure 2: R1000V Performance Since February 11th by Short Interest Quintile Source: Strategas Technical Analysis Research, 3/31/2016 Strong arguments can be made for a bullish and bearish case on equity markets. However, the low growth environment of the last several years is likely to continue as global debt levels remain elevated and the low interest environment incentivizes financial engineering versus long-term capital investments. The High Dividend Value Equity portfolio is comprised of high quality companies that have strong balance sheets, generate consistent cash flows and will deliver solid long-term earnings growth. Relative to fixed income and equity benchmarks, the valuation, dividend yield and dividend growth of our portfolio remain attractive. At quarter-end: The strategy s P/E is 15.1x 2016 earnings versus 17.5x for the S&P 500 and 16.3x for the Russell 1000 Value. The strategy s dividend yield is 3.6% versus 2.2% for the S&P 500 and 2.7% for the Russell 1000 Value. Dividend growth: In Q1, 12 out of 36 companies raised their dividends with the average increase being 8.3%. Best Regards, Schafer Cullen Capital Management, Inc. 6 of 7

7 Disclosure: Schafer Cullen Capital Management (SCCM 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 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 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. 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 other 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. 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 of 7