Trade Cost and Trade Flow MSCI World and MSCI North America constituents saw another month of net outflow in the resources sector

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1 May 213 contact Asia Pacific Canada EMEA United States Trade Cost and Trade Flow MSCI World and MSCI North America constituents saw another month of net outflow in the resources sector All markets, except MSCI North America (-$2bn), saw trade inflow. We continue to note outflow of in the resources sectors, -$87 million and - $259 million, respectively, in the developed and emerging markets. The Nikkei Index saw extreme volatility in May. We tracked $27.6billion in total trade flow and a net trade inflow of $1.2billion for Japan. Net Tradeflow ($,million) and ICE Brent Crude ($) and Gold Spot Price ($) Per Troy Ounce: Sector ($4,) ($3,5) ($3,) ($2,5) ($2,) ($1,5) ($1,) ($5) $ $5 $12 $115 $11 $15 $1 $95 $9 1/2 1/9 1/16 1/23 1/3 2/6 2/13 2/2 2/27 3/6 3/13 3/2 3/27 4/3 4/1 4/17 4/24 5/1 5/8 5/15 5/22 5/29 1/2 1/9 1/16 1/23 1/3 2/6 2/13 2/2 2/27 3/6 3/13 3/2 3/27 4/3 4/1 4/17 4/24 5/1 5/8 5/15 5/22 5/29 5/213 Trade Flow 4/213 Trade Flow 3/213 Trade Flow ICE Brent Crude Sector ($1,5) ($1,) ($5) $ $5 $1, $1,8 $1,7 $1,6 $1,5 $1,4 $1,3 $1,2 5/213 Trade Flow 4/213 Trade Flow 3/213 Trade Flow Gold Spot Price, $ per Troy Ounce Source: ITG, Inc., Bloomberg.

2 May From the charts above, we show that the resources sector in MSCI World (-$87mn) and MSCI North America (-$1bn) and MSCI Emerging Markets ($-271mn) continue to experience trade outflow. However, MSCI Europe and MSCI EAFE demontrated trade inflow. For the basic materials sector, key developed markets, MSCI World ($+767mn), MSCI North America (+$488), MSCI Europe (+$19mn)and MSCI EAFE (+$28mn), MSCI Pacific (+$164mn) and MSCI Far East(+$23mn) saw net trade inflow. MSCI Emerging Markets (-$192mn) continued to demostrate trade outflow. As of June 27, 213, near the publication date for this article, gold spot prices per troy ounces traded below the $1,2 mark. This is more than a $27 per troy ounce drop from the high of $1,474 on May 8, 213. We expect this to further impact the trade flow of the basic Net Trade Flow in Developed Markets ($,Million): $1, $8, $6, $4, $2, $ ($2,) ($4,) ($6,) U MSCI_Pacific MSCI_Far_East Net Trade Flow as a % of Total Trade Flow (%): 16% 14% 12% 1% 8% 6% 4% 2% % U MSCI_Pacific MSCI_Far_East We saw another month of net trade inflow across all developed market indices except for MSCI North America (-$2bn). The results are as follow: MSCI World (+$1.4bn), MSCI EAFE (+$3.4bn), MSCI Europe (+$2.8bn), MSCI EMU (+$2.6), MSCI Pacific (+$635mn) and MSCI Far East (+$1.1bn). The average trade flow was approximaetely 2% of total trade flow with a range of between.4% (MSCI World) and 5.7% (MSCI EMU). Trade inflow also dominated all MSCI Emerging Market indices. The result are as follow: MSCI Emerging Market(+$1.2bn), MSCI EM Asia (+$1bn), MSCI EMFE (+$93mn), MSCI BRIC (+$1.1bn) and MSCI EM Latin America (+$278mn) and MSCI Emerging Europe (+$5mn). As a percentage of total trade flow, the average for the emerging market indices was approximately 3%.

3 May Net Trade Flow in Emerging Markets ($,Million): $15 $1, $5 $ ($5) ($1,) ($1,5) _Asia FE MSCI_BRIC _Latin_America _Europe Net Trade Flow as a % of Total Trade Flow in Emerging Markets (%) 14% 12% 1% 8% 6% 4% 2% % _Asia FE MSCI_BRIC _Latin_America _Europe

4 May Net Trade Flow Across Sectors For Indices Across Developed Markets ($,Million) MSCI WORLD (2,) (1,5) (1,) (5) 5 1, (2,5) (2,) (1,5) (1,) (5) 5 1, 1,5 2, 2,5 1,5 materials sector in June. MSCI World (-$87mn), MSCI North America (-$1bn), MSCI Pacific (-$12mn)and MSCI Far East (-$128mn) saw another month of net trade outflow in the resources sector while MSCI Europe (+$267mn) and MSCI EAFE (+$165)saw trade inflow. All developed markets, MSCI World ($+767mn), MSCI North America ($488mn), MSCI EAFE ($28mn), MSCI Europe ($19mn), MSCI Pacific (+$164mn) and MSCI Far East (+$23mn) saw trade inflow in the basic material sector. MSCI NORTH AMERICA MSCI EAFE MSCI PACIFIC (8) (6) (4) (2) (6) (4) (2) (2,) (1,5) (1,) (5) 5 1, 1,5 2, 2,5 (3,) (2,5) (2,) (1,5) (1,) (5) 5 1, MSCI EUROPE MSCI FAR EAST

5 May MSCI Emerging Markets (-$271mn), MSCI EMFE (-$342mn), MSCI EM Asia (-$23mn)and MSCI BRIC(-$154mn) experience trade outflow in the resources sector while MSCI EM Latin America (+$38mn) and MSCI EM Europe (+$33mn) saw net trade inflow in the same sector. MSCI Emerging Markets (-$192mn), MSCI BRIC(-$228mn), MSCI EM Latin America (-$79mn) and MSCI EM Europe (-$153mn) experienced trade outflow in the basic materials sector while MSCI EM Asia (+$49mn) and MSCI EMFE (+$36mn) saw slight net trade inflow in the same sector. Net Trade Flow Across Sectors For Indices Across Emerging Markets ($,Million) MSCI EMERGING MARKETS MSCI EMFE (4) (3) (2) (1) (4) (3) (2) (1) MSCI EM ASIA MSCI EM LATIN AMERICA (1) (5) (2) (15) (1) (5) (3) (2) (1) (4) (2) MSCI BRIC MSCI EM EUROPE

6 May Dramatic Volatility in Japan It is noteworthy for us to include Japan in this month of the trade cost and trade flow report. Adjusted close of indices (Value set to 1 on 1/4/213) Source: ITG, Inc. S&P5 Russell 2 FTSE DAX HSI NKY Exchange Rate From Basecurrency to USD (Value set to 1 on 1/4/213) Source: ITG, Inc. GBP EUR HKD JPY In May, the Nikkei index flucutated from a peak of 15,627 on 5/22/213 to a nadir of 13,589 on 5/3/213. The exchange rate from JPY to USD also saw huge gyration, from 15.3 JPY/USD on 5/22/213 to JPY/USD on 5/1/213. In the charts above we indexed the S&P5, Russell 2, FTSE, DAX, Hang Seng and Nikkei indices to 1 in the beginning of 213. We also chart exchange rates between USD and GBP, EUR, HKD and JPY in the same period. The Nikkei index and USD to JPY exchange rats saw the widest movement. Relative to the month prior, trade flow in May for Japan increased by 32% from $2.9bn to $ $27.6 bn. Japan also tracked a net trade inflow of $1.2bn and the average trading costs was 45bps.

7 May For May 213, the average trading costs for both the developed and emerging markets increased from April 213. Average trading costs for the constituents in the MSCI World Index was -3 bps and MSCI Emerging Market Index was - 5 bps. Trade Cost for MSCI Regional Indices (Basis Points) Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 (28) (25) (26) (26) (27) (3) (31) (33) (3) (33) (3) (25) (29) (33) (33) (28) (3) (27) (24) (25) (3) (28) (3) (3) (31) (29) (31) (28) (24) (25) (33) (29) (29) (28) (29) (26) (28) (28) (25) (32) (35) (37) (31) (37) (35) (26) (35) (33) (39) (26) (32) (27) (24) (28) (26) (2) (25) (34) (33) (28) (33) (35) (21) (31) (29) (33) (21) (27) U (28) (26) (25) (26) (22) (28) (38) (32) (32) (37) (35) (35) (33) (3) (33) (23) (27) MSCI_Pacific (38) (32) (3) (29) (38) (47) (38) (45) (42) (49) (45) (38) (43) (42) (53) (33) (42) MSCI_Far_East (4) (32) (3) (33) (31) (43) (39) (38) (46) (5) (45) (33) (43) (4) (57) (36) (45) MSCI_Emerging_Mkt (51) (47) (44) (42) (38) (46) (44) (49) (37) (48) (46) (4) (49) (48) (58) (44) (5) _Asia (49) (45) (41) (38) (38) (45) (42) (38) (33) (44) (41) (36) (44) (42) (58) (41) (44) FE (48) (45) (39) (35) (37) (47) (39) (39) (31) (43) (4) (31) (41) (41) (51) (34) (41) MSCI_BRIC (48) (42) (49) (44) (38) (41) (45) (45) (39) (41) (54) (39) (47) (44) (59) (33) (46) _LatinAmerica (52) (51) (48) (51) (38) (47) (52) (65) (61) (52) (48) (61) (47) (44) (5) (48) (63) _Europe (51) (66) (62) (43) (47) (64) (4) (5) (53) (69) (58) (44) (57) (53) (5) (5) (43) Source: ITG, Inc. *Global Cost and Trade Flow (GCTF) data is derived from Investment Technology Group s Peer Universe. For May 213, GCTF drew nearly 5.86 million trades ($417 billion) from ITG s Transaction Cost Peer Universe as of June 17, 213. The data are sourced directly from buy-side institutions and may include soft-dollar, CSA and execution-only commissions. The information presented is based on order creation time stamp recorded in client order management systems and and trade flow are calculated for the theoretical portfolios using MSCI indices as the basis for constructing these portfolios. Due to the unique purpose of each report and analysis, our methodology may vary, for example, we may use different filtering criteria and report run date, as such, users will notice data differentials. **Trade Cost and Trade Flow are preliminary. 1 Trading Cost and Trade Flow are both derived from ITG s Group Peer Universe. 2 Trade Flow is the total trade value for all constituents within the specific MSCI Index. We include indexes with trade flow that exceed $1, Million. Due to the unique purpose of each cost report and analysis, our methodology may vary, for example, we may use different filter criteria and report run date, as such, users will notice data differentials. 3 Net Trade Flow is the subtraction of Trade Flow for sells from the value of Trade Flow for buys. 213 Investment Technology Group, Inc. All rights reserved. Not to be reproduced or retransmitted without permission. Compliance # These materials are for informational purposes only, and are not intended to be used for trading or investment purposes or as an offer to sell or the solicitation of an offer to buy any security or financial product. The information contained herein has been taken from trade and statistical services and other sources we deem reliable but we do not represent that such information is accurate or complete and it should not be relied upon as such. No guarantee or warranty is made as to the reasonableness of the assumptions or the accuracy of the models or market data used by ITG or the actual results that may be achieved. These materials do not provide any form of advice (investment, tax or legal). ITG Inc. is not a registered investment adviser and does not provide investment advice or recommendations to buy or sell securities, to hire any investment adviser or to pursue any investment or trading strategy. Certain Index Data contained herein is the property of MSCI. Copyright MSCI 213. All Rights Reserved. Without prior written permission of MSCI, this information and any other MSCI intellectual property may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. This information is provided on an as is basis, and the user of this information assumes the entire risk of any use made of this information. Neither MSCI nor any third party involved in or related to the computing or compiling of the data makes any express or implied warranties, representations or guarantees concerning the MSCI index-related data, and in no event will MSCI or any third party have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) relating to any use of this information.