January Economic Report. Month ending January 31, McGladrey LLP. All Rights Reserved McGladrey LLP. All Rights Reserved.

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1 January Economic Report Month ending January 31, 2015

2 MARKET DASHBOARD Last Price Change % Chg. YTD % Last Price Change % Chg. YTD % S&P 500 2, % 0.2% Russell Global EM 3, % 2.4% Dow Industrials 17, % 0.4% 10-Year US Treas bps NM NM Nasdaq 4, % 0.6% DJ UBS Comm. Idx % -1.6% Russell , % 0.3% Gold $1, $ % 4.9% Euro Stoxx % 8.9% Crude Oil $52.34 $ % -4.7% Shanghai Composite 3, % -4.9% Dollar % 4.6% Russell Global 1, % 1.3% VIX % -12.2% ; % change is based on price. S&P 500 : Trailing 180 Days /11 8/25 9/8 9/22 10/6 10/20 11/3 11/17 12/1 12/15 12/29 1/12 1/26 L S One Week YTD Value Growth Value Growth 3.83% 3.45% 3.08% -1.62% -0.06% 1.48% 3.42% 3.26% 3.12% 1.88% 1.60% 1.34% 4.14% 3.72% 3.31% -0.26% 0.33% 0.92% Sector Performance: S&P/Global Industry Classification Sectors (GICS) % Wgt in S&P 500 Week % Chg. YTD % Chg. Consumer Discretionary % 1.1% Consumer Staples % 1.3% Energy % 0.8% Financials % -2.5% Health Care % 2.6% Industrials % -0.5% Information Technology % -0.8% Materials % 2.7% Telecom Services % 3.1% Utilities % 2.3% VIX : Trailing 180 Days 10 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan Wealth Growth of $1: Trailing 24 Months Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 S&P 500 Dow Industrials Small Cap EAFE Emerging Mkts. 1

3 S&P/Case-Shiller Home Price -Trailing 12 Mos Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 THE ECONOMY AND MARKETS A Macro View January Monthly Recap Domestic equity markets got off to a rough start in 2015, in a similar scenario to Stocks tumbled right out of the gate as concerns about economic growth in international regions began to creep into U.S. markets. The S&P 500 index shed more than 3% in the first two weeks of trading before stabilizing somewhat. Economic data continued to trend higher, with real Gross Domestic Product (GDP) and employment remaining key drivers of market activity. The first estimate of fourth quarter real GDP came in at +2.6%, slightly below the forecast of 3.0%. Earnings season also began favorably, with about 77% of S&P 500 companies beating analysts earnings estimates. Crude oil staged a recovery at the end of the month, generating its largest two-week rally since With this environment as a backdrop, stocks posted generally negative results in January. The S&P 500 declined -3.0% for the month, it s second straight negative monthly return. The Dow Jones Industrials shed -3.6% gain for the month. The tech-heavy Nasdaq Composite declined -2.1% in January. The Russell 2000 of small cap stocks was weak on a relative basis during the month, being outperformed by the Russell 1000 of large cap stocks, with returns of -3.2% and -2.8%, respectively. Growth stocks outperformed value stocks during the month. In terms of sector performance, the top performers in the month were utilities, health care and consumer staples with returns of +2.4%, +1.2% and -1.1%, respectively. Financials and energy were the poorest performers, with returns of -6.9% and -4.8%, respectively. International equity markets fared, on balance, somewhat better than domestic U.S. indices in January. Markets responded to the announcement by the European Central Bank (ECB) that it would commence a U.S.-style asset purchase program amounting to about $1.3 trillion. The program was initiated to try to invigorate the tepid eurozone economy. The MSCI World ex-u.s. declined -0.3% for the month. Emerging markets posted slight gains in January, in part due to a rebound in oil prices in the latter half of the month. The MSCI Emerging Markets advanced +0.6% for the month, and the MSCI EAFE, which measures developed markets performance, was up +0.5%. Regionally, Asia was the best performer on a relative basis, advancing +2.4%. Latin America and Eastern Europe were among the poorest performers, with results of -6.2% and -2.1%, respectively. Fixed-income markets fared well in January, as economic growth concerns caused investors to seek the safe haven of U.S. fixed income. Against this backdrop, the 10-year U.S. Treasury yield ended the month at 1.67%, down fifty basis points from the 2.17% level of December 31st. Broad-based fixed-income indices were higher in January, with the Barclays U.S. Aggregate Bond gaining +2.1% for the month. Once again, global fixed-income markets performed relatively poorly, with the Barclays Global Aggregate ex-u.s. declining -1.8% for the month. Intermediate-term corporate bonds jumped, as the Barclays U.S. Corporate 5-10 Year shot up 3.0%. The Barclays U.S. Corporate High Yield ended the month with a gain of +0.7%. Municipals continue to generate positive performance, returning +1.8% for the month. 2

4 % % % % EUROZONE SELECTED EUROPEAN SOVEREIGN YIELD PERFORMANCE Last Change % Chg. YTD % Last Change % Chg. YTD % Germany 10-Yr. Govt bps NM NM France 10-Yr. Govt bps NM NM Greece 10-Yr. Govt bps NM NM Ireland 10-Yr. Govt bps NM NM Italy 10-Yr. Govt bps NM NM Portugal 10-Yr. Govt bps NM NM Spain 10-Yr. Govt bps NM NM Netherlands 10-Yr. Govt bps NM NM Belgium 10-Yr. Govt bps NM NM U.K. 10-Yr. Govt bps NM NM Basis points (bps) 0.90 Germany 10-Year Government Bond Yield 2.2 Spain 10-Year Government Bond Yield Italy 10-Year Government Bond Yield Greece 10-Year Government Bond Yield

5 EQUITIES WORLD MARKET PERFORMANCE Last Change % Chg. YTD % Last Change % Chg. YTD % S&P 500 2, % 0.18% Swiss Market 8, % -4.40% Dow Industrials 17, % 0.40% CAC 40 (France) 4, % 9.85% Nasdaq Composite 4, % 0.59% DAX (Germany) 10, % 10.58% Russell Global 1, % 1.3% Irish Overall 5, % 6.39% Russell Global EM 3, % 2.4% Nikkei , % 1.13% S&P/TSX (Canada) 15, % 3.37% Hang Seng 24, % 4.55% Mexico IPC 42, % -1.60% Shanghai Composite 3, % -4.91% Brazil Bovespa 48, % -2.75% Kospi (S. Korea) 1, % 2.08% Euro Stoxx % 8.87% Taiwan Taiex 9, % 1.60% FTSE 100 6, % 4.50% Tel Aviv 25 1, % -0.25% IBEX 35 (Spain) 10, % 2.75% MICEX (Russia) 1, % 26.02% ; % change is based on price. Dow Jones Industrial Average -Trailing 90 Days 18,200 18,000 17,800 17,600 17,400 17,200 17,000 16,800 16,600 16,400 11/7 11/21 12/5 12/19 1/2 1/16 1/30 Nasdaq Composite-Trailing 90 Days 4,850 4,800 4,750 4,700 4,650 4,600 4,550 4,500 4,450 4,400 11/7 11/21 12/5 12/19 1/2 1/16 1/30 Shanghai Composite -Trailing 90 Days 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 11/7 11/21 12/5 12/19 1/2 1/16 1/30 Euro Stoxx -Trailing 90 Days /7 11/21 12/5 12/19 1/2 1/16 1/30 4

6 Yield % INTEREST RATES SELECTED INTEREST RATES Last Change % Chg. YTD % Last Change % Chg. YTD % 2-Yr. U.S. Treasury 0.61% -3 bps NM NM Prime Rate 3.25% 0.00 NM NM 5-Yr. U.S. Treasury 1.46% 24 bps NM NM Fed Funds Rate 0.25% 0.00 NM NM 10-Yr. U.S. Treasury 1.94% 23 bps NM NM Discount Rate 0.75% 0.00 NM NM 30-Yr. U.S. Treasury 2.52% 22 bps NM NM LIBOR (3 Mo.) 0.26% 0 bps NM NM German 10-Yr. Govt. 0.35% -5 bps NM NM Bond Buyer 40 Muni 3.48% 17 bps NM NM France 10-Yr. 0.59% -5 bps NM NM Bond Buyer 40 G.O. 3.49% NA NM NM Italy 10-Yr. 1.55% 4 bps NM NM Bond Buyer 40 Rev. 4.16% NA NM NM Fed 5-Yr Fwd BE Inf. 1.75% 0 bps NM NM YIELD CURVES 4.00 US Treasury Actives Curve US Treasury Actives Curve USD US Industrial (BB) BFV Cur USD Composite (BBB) BFV Curve M 1Y 3Y 5Y 8Y 10Y 15Y 20Y 30Y Year Treasury Yield - Trailing 180 Days 1.90 BBB/Baa- 10-Yr Treas. Spread Rising Line = Risk Aversion

7 CURRENCIES SELECTED CURRENCY PERFORMANCE Last Change % Chg. YTD % Last Change % Chg. YTD % Dollar % 4.54% Chinese Yuan % -0.63% Euro % -6.25% Swiss Franc % 7.17% Japanese Yen % 0.80% New Zealand Dollar % -5.59% British Pound % -2.12% Brazilian Real % -4.12% Canadian Dollar % -6.82% Mexican Peso % -0.86% 100 U.S. Dollar - Trailing Six Months 1.40 Euro - U.S. Dollars per Euro Chinese yuan - yuan per U.S. Dollar Japanese yen - Yen per U.S. Dollar

8 $ per bushel $ per barrel $ per ounce COMMODITIES SELECTED COMMODITY MARKET PERFORMANCE Last Change % Chg. YTD % Last Change % Chg. YTD % DJ UBS Comm. Idx % -1.63% Platinum Spot $1, $ % 1.87% Rogers Int. Comm. Idx % -4.33% Corn % -2.58% Crude Oil $52.22 $ % -4.71% Wheat % % Natural Gas $2.57 -$ % % Soybeans % -4.10% Gasoline ($/Gal.) $2.17 $ % -3.30% Sugar % 0.83% Heating Oil % 0.80% Orange Juice % -2.65% Gold Spot $1, $ % 4.88% Aluminum 1, % 1.75% Silver Spot $ $ % 7.79% Copper 5, % -9.21% ; % change is based on price. 100 Crude Oil - Light Crude ($ per barrel) 1,350 Gold - Spot gold price ($ per ounce) 90 1, ,250 1,200 1, ,100 7,500 Copper 420 Corn - Active Contract 410 7, , , , ,000 8/11 9/10 10/10 11/9 12/9 1/

9 ALTERNATIVE INVESTMENTS SELECTED ALTERNATIVE INVESTMENT INDEX PERFORMANCE Last Change % Chg. YTD % Last Change % Chg. YTD % HFRX Global Hedge Fund % 0.02% HFRX Distressed % -1.45% HFRX Equity Market Neutral % 0.35% HFRX Merger Arbitrage % 1.49% HFRX Equity Hedge % -0.39% HFRX Convertible Arbitrage % -0.24% HFRX Event-Driven % -0.80% HFRX Macro CTA % 1.67% HFRX Absolute Return % 0.71% IQ Fixed Income Beta Arb % 1.12% ; % change is based on price. HFRX Global Hedge Fund - Trailing 90 Days 1,240 1,230 1,220 1,210 1,200 1,190 1,180 1,170 HFRX Equity Hedge - Trailing 90 Days 1,195 1,190 1,185 1,180 1,175 1,170 1,165 1,160 1,155 1,150 1, HFRX Equity Market Neutral - Trailing 90 Days 1,410 IQ Fixed Income Beta Arb - Trailing 90 Days 990 1, ,400 1, , , , ,375 1, , ,360 8

10 PORTFOLIO CONSTRUCTION 3.50 S&P 500/MSCI EAFE - Trailing 180 Days 5.50 S&P 500/MSCI EM - Trailing 180 Days MSCI EAFE/MSCI EM - Trailing 180 Days Large Cap/Small Cap - Trailing 180 Days Growth/Value - Trailing 180 Days

11 PORTFOLIO CONSTRUCTION (cont d.) Info Tech/S&P Trailing 180 Days Inv. Grade Bonds/Int. Govt. Bonds - Trailing 180 Days High Yield Bonds/Int. Govt. Bonds - Trailing 180 Days High Yield/Inv. Grade Bonds - Trailing 180 Days

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