Low P/E Valuation Discipline: The strategy s P/E is 16.4x forward earnings versus 18.2x for the S&P 500 and 17.5x for the Russell 1000 Value (Q4).

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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 The U.S. equity market closed 2017 with a particularly strong quarter, with the S&P 500 up 6.6% and the Russell 1000 Value up 5.3%. It was the largest quarterly increase for the S&P 500 since the 4th quarter of 2013, and also its ninth consecutive positive quarter. Notably, December marked the 14th consecutive month of gains for the S&P 500 on a total return basis, the longest monthly streak for the index since Stocks were propelled higher by the passage of the Republican tax bill, one of President Trump s foremost campaign pledges and the most significant restructuring of the U.S. tax code in decades. For businesses, the tax overhaul reduces the corporate tax rate to 21% from 35%, lowers the tax rate for passthrough entities such as partnerships and sole proprietorships, exempts corporations from taxes on most future foreign profits, and repeals the corporate alternative minimum tax, among several other changes. Every sector finished the 4th quarter in positive territory with Consumer Discretionary leading the way (+9.9%). Retailers and restaurants are key beneficiaries of the tax cut as they generally have high effective tax rates due to their primarily domestic revenue base. Information Technology was up 9.0% in part because leading tech firms with substantial cash holdings overseas can now repatriate that cash at a reduced, one-time tax of 15.5%. Financials increased 8.6% in the quarter as banks with operations solely in the U.S. are significant tax cut beneficiaries. Utilities were the worst-performing sector, up only 0.2%; as highly-regulated entities, utilities will likely be required to pass the bulk of their tax savings on to consumers in the form of lower energy bills. As expected, the Federal Reserve raised interest rates another quarter of a percentage point to 1.5%, the third hike of Investors were encouraged by Trump s nomination of Jerome Powell as new Fed Chair, with his term beginning in February when Janet Yellen steps down. Mr. Powell is expected to maintain Yellen s policy outlook of gradual increases in interest rates and has indicated that he is in favor of easing regulatory rules on banks and other financial institutions. Internationally, the European Central Bank announced it would halve its monthly government bond purchases to 30 billion from 60 billion and continue buying bonds through September The ECB s scaling back of its quantitative easing program is in response to Europe s strengthening economy and the synchronized growth of virtually all developed countries worldwide. Despite equity markets trading at all-time highs and high valuation levels, investors remain complacent about risk. The High Dividend Value Equity strategy is focused on three investment criteria to deliver long-term gains while providing downside protection: Low P/E Valuation Discipline: The strategy s P/E is 16.4x forward earnings versus 18.2x for the S&P 500 and 17.5x for the Russell 1000 Value (Q4). High Absolute Dividend Yield: The strategy s dividend yield is 3.2% versus 1.9% for the S&P 500 and 2.4% for the Russell 1000 Value (Q4). Strong Dividend Growth: In Q4, three additional portfolio companies raised their dividends with an average increase of 3.0%. For the full year 2017, 30 out of 38 portfolio companies raised their dividends with an average increase of 6.8%. 1 of 8

2 Performance Analysis: The High Dividend Value Equity strategy composite gained 4.1%, net of fees, in the quarter. The S&P 500 returned 6.6% and the Russell 1000 Value 5.3% for the fourth quarter of For the full year 2017, the High Dividend Value Equity strategy returned 17.0%, net of fees, versus 21.8% for the S&P 500 and 13.7% for the Russell 1000 Value. In the fourth quarter, Growth extended its leadership over Value driven by strength in Consumer Discretionary and Information Technology. The Russell 1000 Growth index returned 7.9% in the quarter and 30.2% for the full year, outperforming the Russell 1000 Value index by 253 basis points for the quarter and 1,650 basis points for the full year, the widest spread since For the year, Technology was up 38.8% and was the best-performing sector, contributing nearly 40% of the S&P 500 s returns. Financials, Health Care and Consumer Discretionary each contributed 15% of the total return of the S&P 500. The Top ten stocks contributed 35% of the S&P 500 return. Cyclical, risk-on leadership over defensive industries was illustrated by the underperformance of high dividend yielding stocks with the highest dividend-yielding quintile of stocks (3%+ dividend yield) underperforming the market, up +2.7% for the quarter. Figure 1: High Dividend Value Equity Returns vs. Benchmark Q4 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. 2 of 8

3 Portfolio Attribution: Attribution Effects High Dividend Value vs. Russell 1000 Value 9/30/ /31/2017 Source: SCCM/Bloomberg, 12/31/2017. The following attribution analysis of the High Dividend Value Equity portfolio utilizes the Russell 1000 Value as the benchmark of comparison for the 4th quarter of The Information Technology sector was the largest contributor to relative performance for the quarter. Our overweight allocation combined with strong stock selection drove excess returns, as the sector outperformed in the quarter and was by far the best performing sector for the full year. Intel (+21.9%) reported particularly strong third quarter results driven by growth in its data center chips business as well as its Internet of Things (IoT) segment. Microsoft (+15.4%) and Cisco (+14.9%) also reported strong quarterly results and are viewed as beneficiaries of repatriation measures included in the tax bill. Our underweight allocation and strong stock selection in the Utilities sector aided relative performance. Given that utilities are highly regulated entities, most will likely not benefit from tax reform; however, NextEra Energy (+7.3%) generates roughly one-third of its earnings from its renewable segment benefitting from the preservation of federal production tax credits. Stock selection within the Energy sector aided relative performance as Royal Dutch Shell (+10.8%), ConocoPhillips (+10.3%) and Chevron (+7.6%) benefitted from oil prices that finished the year at their highest levels since of 8

4 Our underweight allocation to Financials detracted from relative performance as banks and other financial institutions rallied with the increasing likelihood of U.S. tax reform and the move to ease financial regulations. Stock selection also detracted as MetLife (-2.0%) and Chubb (+3.0%) underperformed the sector. Stock selection within the Real Estate sector detracted from relative performance as Welltower (-8.1%) and HCP (-5.0%) retreated, partly due to concerns of oversupply in seniors housing and the rotation out of high-yielding REITs. Finally, our slight overweight allocation to the Health Care sector combined with stock selection detracted from relative performance, as Merck (-11.4%) declined on concerns over a delay in its application for European approval for its leading immunotherapy drug. Portfolio Changes: Purchases / Additions SunTrust Bank (STI) was purchased in the High Dividend Value strategy in the fourth quarter. Based in Atlanta, Georgia, SunTrust Bank is a super-regional bank with leading positions in high growth markets primarily in the Southeast and Mid-Atlantic states (FL, GA, MD, NC, TN and VA). The company has $208B in assets (11th largest nationally), $160B in deposits, over 1,400 branches and offers a wide range of financial services including mortgage, credit card, wealth and investment management, insurance, investment banking, equipment leasing and brokerage products and services. SunTrust s main businesses are in Consumer, Commercial and Investment Banking as well as Wealth Management. SunTrust is focused on building scale and full product capabilities profitability with a One Team approach across its consumer, commercial and investment banking businesses. This strategy has allowed it to grow its fee-based revenues through expanding client relationships and further penetrating the middle market and large C&I (commercial and industrial) space. The company s Consumer Banking business targets high-quality prime customers with above-average credit history and has had success in building out a mobile-centric platform for client servicing. Management s goal of improving efficiency is specifically focused on streamlining operations, optimizing staff models, making technology enhancements for automation/self-servicing, improving loan origination platforms, reducing procurement costs and consolidating real estate. While a portion of the cost savings are used to fund investments in growth and technology, the company has set about a goal of further reducing its efficiency ratio of 62% to less than 60% in the next two years. The company will likely benefit from corporate tax reform and financial deregulation, both set to be implemented in the coming years. The bank s current effective tax rate of 30% will likely be reduced to ~21%, boosting earnings per share. While some of the financial benefits of tax reform may be competed away and used to make capital investments, SunTrust may benefit from higher economic growth and potentially higher interest rates. In addition, the recent move by a bipartisan group of Senate Banking Committee members to raise the asset threshold for the Fed s annual CCAR stress tests to $250B will allow SunTrust to be deregulated over time and no longer restricted by CCAR requirements to hold higher capital levels. These actions will allow the bank to reduce expenses associated with the exam and compliance as well as return excess capital to shareholders through dividends and buybacks. SunTrust Bank (STI) trades at 14.7x 2018 earnings, 1.3x book value with a 2.5% dividend yield. The company raised its dividend in April 2017 by 54% year-over-year. There were no other changes to the portfolio. 4 of 8

5 Dividend Summary: In the quarter, three additional portfolio companies raised their dividend payments with an average increase of +3.0%: Johnson Controls (JCI) raised its dividend payment by +4.0% Merck (MRK) raised its dividend payment by +2.1% Siemens (SIEGY) raised its dividend payment by +2.8% For the full year 2017, 30 out of 38 portfolio companies raised their dividends with an average increase of +6.8%. Market Outlook: The end of 2017 brought the current equity market expansion to the 2nd longest in duration at 106 months and the 3rd largest advance at 295% for the S&P 500. The defining characteristic of 2017 was the historic low volatility which resulted in a number of milestones for the market: 1) the first ever year with the S&P 500 posting positive total returns in every month, a so-called perfect year ; 2) the third longest stretch of trading days without a 5% correction since 1930, at 381 days and counting; and 3) 62 all-time highs for the S&P 500 during the year, the second most of any calendar year in history. With the S&P 500 price return of 19% in 2017 and realized volatility in the bottom 1st percentile since 1930, the risk-adjusted return ranked in the 97th percentile relative to history. Figure 2: Annual S&P 500 Risk-Adjusted Returns Since 1930 Source: Goldman Sachs, US Weekly Kickstart, 1/2/2018. The bull market in equities, already fueled by the anticipation of strong U.S. GDP and corporate earnings growth in 2018, got further steam with the passage of U.S. tax reform. The significant reduction in corporate tax rates will benefit companies with a high percentage of revenues derived in the U.S.; however, a key question is how those tax savings will be allocated. While a portion will flow to shareholders in the form of higher earnings, the expectation is that companies will increase wages, 5 of 8

6 increase capital expenditures given the 100% deductibility of capital expenses and pass along savings to customers. There are also questions of what the long-term implications are for the economy and the nation s finances, given the estimated loss of $1.5 trillion in tax collections over the next decade. Furthermore, should the tax overhaul produce faster economic growth, it could result in higher inflation and long-term interest rates. It remains to be seen whether inflation will break out, overcoming the deflationary forces of globalization, technology disintermediation and the widening jobs/skills gap signaled by low U.S. labor participation. If inflation measures do in fact pick up, the Fed may be pressed to raise rates more quickly than is widely anticipated. Higher economic growth could also result in a tightening of the valuation disparity between Value and Growth stocks. Historically, when companies are broadly able to boost revenue as a result of the fastergrowing economy, investors would have less of a reason to pay up for high-multiple Growth stocks. In 2017, Growth outperformed Value by 17 percentage points, the widest spread since The Median Trailing P/E of high-multiple Growth stocks versus cheap Value stocks is at the widest level seen in this cycle. Figure 3: Russell 3000 Median Trailing P/E by Quintile Fifth Quintile Source: Strategas, Year End Review in Charts, 1/2/2018. Key beneficiaries of low volatility and bullish market sentiment have been Growth stocks and Momentum stocks. The correlation between Growth and Momentum is currently at 64% (in the 94th percentile vs. history) on a factor basis, and the correlation between Information Technology and Momentum is at 70% (in the 97th percentile vs. history). Historically, when the correlation between performance leaders (currently Growth and Momentum) has been unusually high, downside risk significantly increases 1. 1 Goldman Sachs, Quantamentals: 2017 Factor Review, 1/2/ of 8

7 Figure 4: Downside Risk Increases When Correlation with Performance Leaders is Stretched Source: Goldman Sachs Investment Research, Quantamentals: 2017 Factor Review, 1/2/2018. Includes observations where correlation >50%; Hit Rate represents % of observations with negative fwd. performance. 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. 7 of 8

8 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. 8 of 8