Schafer Cullen Capital Management Emerging Markets High Dividend Strategy 2 nd Quarter 2015 Attribution Summary

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1 Schafer Cullen Capital Management Emerging Markets High Dividend Strategy 2 nd Quarter 2015 Attribution Summary Performance Information As of June 30, 2015 Annualized Returns (%) Since Q2 YTD 1 Year 3 Year 5 Year Inception Performance as of 6/30/ /31/05 Emerging High Div (gross) Emerging High Div (net) Emerging Markets Index ishares Emerging Markets ETF The Emerging Markets High Dividend Composite returned 1.6% (net) in the 2 nd quarter versus 0.7% for the Emerging Markets Index. The best performing countries that we had exposure to in the quarter were Russia, China/Hong Kong, Brazil and Taiwan while Indonesia, Malaysia, Philippines and South Korea were the worst performing. Our greater exposure relative to the EM Index to China/Hong Kong as well as our lesser exposure to Indonesia, Malaysia and South Korea helped performance. Our greater exposure to Philippines and our lesser exposure to Russia, Brazil and Taiwan hurt relative performance. Below are the 2 nd quarter local currency and U.S. dollar returns of regional benchmarks that are pertinent to our exposure: Regional Performance Performance as of 6/30/2015 Q2 YTD Local USD Local USD EM EM ASIA EMEA EM LATAM The best performing currencies that we had exposure to in the quarter were the Russian Rouble, Brazilian Real, Taiwanese Dollar and Polish Zloty while the worst performing currencies were the Thai Baht, Turkish Lira, Mexican Peso and Malaysian Ringgit. On a relative basis, our lesser exposure to the Thai Baht and Malaysian Ringgit and our greater exposure to the Polish Zloty aided performance. However, our greater exposure to the Turkish Lira, Mexican Peso and our lesser exposure to the Russian Rouble, Brazilian Real and Taiwanese Dollar hurt relative performance. In general, emerging market currencies weakened versus the U.S. dollar during the quarter. The top performing sectors in the EM index in the quarter were Energy, Financials and Consumer Staples while Information Technology, Consumer Discretionary and Health Care were the worst performing sectors. Performance relative to the benchmark was aided by our lesser exposure to Information Technology. Performance was hurt by our greater exposure to Consumer Discretionary and Health Care and our lesser exposure to the Energy, Financials and Consumer Staples sectors.

2 Top performing stocks in the quarter were Value Partners (China/Hong Kong, Financials), China Everbright (China/Hong Kong, Financials), Silicon Motion Technology (Taiwan, Technology), SATS (Singapore, Industrials) and Sunny Optical (China/Hong Kong, Technology). The worst performers were Great Wall Motor (China/Hong Kong, Consumer Discretionary), Nampak (South Africa, Materials), Grupo Financiero Santander (Mexico, Financials), Copa Holdings (Panama, Industrials) and Samsung Electronics (South Korea, Technology) New purchases in the quarter were made in shares of Baoxin Auto Group (China/Hong Kong, Consumer Discretionary) and Greatview Aseptic Packaging (China/Hong Kong, Materials). There were no sales in the quarter. Our top five country exposures at the end of the quarter were to China/Hong Kong, Taiwan, South Africa, India and Mexico. We have included summary portfolio exposure information below: Sectors Portfolio Exposure Top 10 Countries Financials China/Hong Kong Information Technology Taiwan Consumer Discretionary South Africa Industrials India Telecommunication Services Mexico Energy South Korea Health Care Israel Materials Poland Consumer Staples Singapore Other Brazil Utilities Total Regions Top 10 Holdings Asia Pacific SATS 3.2 EMEA AIA Group 3.1 Latin America MTN Group 3.1 Taiwan Semiconductor Manufacturing 3.0 ICICI Bank 2.9 China Merchants Holdings 2.9 Terrafina 2.8 Value Partners Group 2.7 Religare Health Trust 2.4 SAB Miller 2.4 Portfolio Characteristics Price / Dividend Average Earnings Yield LT DPS LT EPS Market Cap Forward NTM Growth Growth ($B) Emerging Markets High Dividend ishares EM Source: Research, Bloomberg 2 of 5

3 Market Outlook Emerging market stocks posted a roller coaster like performance last quarter with strong gains through April followed by weakness until quarter-end leaving the markets basically flat for the quarter. Gains from China regional stocks led the advance, but then also contributed to the subsequent decline with a worsening situation in Greece also not helping performance. While a more limited portion of the overall universe, there are similar signs of speculative excesses seen in developed markets with EM internet and biotech stocks, for example, dominating returns and trading at astronomical valuations. While the environment has been admittedly challenging with fewer broad areas of strength than in the recent past, our conviction in the long-term potential and performance of emerging markets remains steadfast. While volatility is likely to prevail, we are confident that a bright future with attractive dividend income and solid share price returns remains on the not so distant horizon. The recent correction in Chinese equities has created concern and confusion as to whether it might herald further share price weakness and which areas of the market might be most vulnerable. It is important to understand differences between various China exposed equities to assess exposures and vulnerabilities. has no direct exposure to Shanghai listed Chinese A-shares since most listed stocks suffer from structural problems such as overvaluation, small free floats, misrepresentation of the economy, lack of transparency, etc. that together create an essentially rigged market. We have always found it disconcerting that global investors pay so much attention to the Shanghai market in light of these inherent structural defects which make it far less important an indicator of anything in our view. We do see modestly negative long-term implications of the Chinese government's recent manipulation of the Shanghai market. It s clearly negative that such intervention runs counter to the reform related, freemarket initiatives the government had aimed for and worse that it was conducted at unattractive valuation levels. Such intervention will likely be a setback to China s goals of inclusion in indices and the basket of IMF SDR (special drawing rights) currencies. At the same time, the intervention could help stabilize near term performance of the Shanghai market and we are also mindful of the challenges market regulators face. This is because it seems to be that when the largest market by capitalization outside of America with among the largest potential domestic investor bases globally also opens up for basically the first time to global investors (who collectively represent a far greater amount of investing funds than China's domestic investors), that such a market will undoubtedly suffer from enormous volatility. Managing these gigantic, new, volatile fund flows would without question present a mega-challenge for any global regulator. We are reminded that for many good reasons, success for China will not be linear and far more likely represent a 2 steps forward, 1 step back sort of progression. Furthermore, investors perhaps overlook the fact that China s government is not alone in their market intervention, with the Japanese government having massively intervened in recent years (and in the past). Perhaps more subtly, the U.S, Europe and indeed most developed markets have done the same since a clear, yet unstated goal of quantitative easing policies that have swept the developed world has been to promote asset price inflation (i.e. make the stock market go up). So arguably, a double standard exists among many global investors who also forget that despite its substantial recent correction, Chinese stocks remain among the best performers globally in recent years. In terms of our China exposure, while we pared back exposure to many of our best performers early in the quarter, we retain meaningful exposure to Hong Kong listed H-shares since they lack the aforementioned structural defects that plague Shanghai listed A-Shares. Furthermore, H-shares offer: attractive valuations (with the Hang Seng index trading at less than 12x EPS and 1.4x book value), large discounts to dual listed companies, good overall liquidity and transparency levels, unique exposure to China, Hong Kong, and 3 of 5

4 other Pan-Asian or Global investment opportunities, etc. The last point is important since our Hong Kong listed stock holdings offer such varied exposures and not solely to China. Where we do have direct exposure to China through portfolio holdings, we continue to differentiate between a good and bad China from an investment perspective. We continue to avoid companies exposed to excesses in domestic lending, fixed asset investment, property, shadow banking, and other areas of past excessive growth that remain problematic to an exposed company s earnings growth prospects but are still not likely to create a hard landing in our view from a macro-economic perspective. Among H-shares, we continue to retain a favorable view on consumer orientated, reform related, technology, non-bank financial service, and other listed companies even in spite of a modest growth slowdown or negative potential impact from the recent market correction in China. We have long viewed a deceleration in growth as inevitable in China due to the size of the economy and deem this likely outcome as a potential positive for stocks since further stimulus become more likely and policy tightening less so. If recent Shanghai market declines are somewhat contained, we do not see them as necessarily crimping domestic consumption nor having a meaningful impact on the broader economy since household stock ownership is limited (especially relative to household cash holdings) and the wealth of many sensible longer-term domestic investors has benefitted from equity gains in recent years. Counterintuitively, strong recent equity market performance may have actually derailed consumption as consumers bought stocks instead of other goods and services such that there could be a countercyclical relationship between the spending on these items. Many H-share stocks also fell disproportionately as the Shanghai market corrected due to forced selling by investors despite having few structural defects or fundamental rationale. These sell-offs of fundamentally attractive stocks typically create long-term opportunities and thus we are retaining and anticipate selectively adding to our existing exposure to Hong Kong listed stocks. With regard to other portfolio holdings, while a global inventory overhang is negatively impacting near term earnings trends of autos, technology hardware, semiconductor, energy related, and other companies, this is normal to business cycles and recent share price weakness in impacted companies may already reflect these concerns. Conservative estimates of company earnings still offer attractive valuations and we are confident that supply-side or under-penetration related demand trends are still in relatively early stages from a long-term perspective. Our holdings of Taiwan semiconductor stocks are a good example of this trend as after strong outperformance they have recently underperformed due to inventory concerns and the perception of a lack of a killer new product like the iphone 6. Still we see strong merit to owning these companies that have global market leading positions, high levels of transparency and corporate governance, and deep value metrics with our portfolio holdings trading on average at less than 11x EPS and with +6.0% dividend yields supported by strong cash flows and net cash balance sheets. We also continue to be positive on select Frontier markets such as Vietnam, Saudi Arabia and Romania as they offer attractive valuations, a strong culture for dividends and diverse growth drivers. A common catalyst among many of the more attractive frontier markets is their opening to foreign investors for the first time. Our relative performance has benefitted in recent years from our significant underweight to commodity orientated countries which have underperformed broad EM benchmarks. While we retain this underweight exposure, our investment interest is slowly growing in select markets after their continued, substantial absolute and relative performance declines. Since it is difficult to predict market capitulations that often produce long term bottoms in affected equity markets accurately, it is likely that we will slowly reduce our significant underweights to some of these markets. For example, our underweight to Brazil will be reduced as we build positions in dominant businesses with global industry leading valuations, enviable moats to their businesses, excellent management teams, pan-regional business exposures and the financial strength that provides a margin of safety in difficult macro-economic environments. Many such companies are using the weak macro-economic environment and their financial strength as an opportunity to strengthen their businesses by expanding regionally and/or gaining market share by taking advantage of weaker 4 of 5

5 competitors, both of which are business strategies we have long admired. While timing the turnaround in share price performance is difficult, with several emerging markets near their 2008 financial crises lows we do see many new opportunities for investment. Thank you for your continued support and please don't hesitate to contact us with any questions you may have. Best Regards, Rahul Sharma Executive Director / Portfolio Manager Schafer Cullen Capital Management 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. 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; 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. 5 of 5