Asset Flows Report Q March 8, Summary

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1 Asset Flows Report March 8, 2018 Summary evestment s Traditional Asset Flows Report shows the flow of institutional funds across investment strategies, regions, and investor types. Investor flows are calculated based on a bottomup approach, measured for each product and summarized at the universe and asset class levels. Highlights Institutional investor flows were positive for long-only strategies in with aggregate net allocations of +$15.4 billion. Fixed income strategies, particularly those investing globally and in the, saw broad investor support with inflows of +$92.2 billion during the quarter. Equity strategies broadly saw another quarter of net redemptions. However, passive ACWI ex- equity and passive EM equity experienced combined inflows of +$44.7 billion in.

2 Executive Summary Asset managers reported long-only institutional assets under management of $27.1 trillion to evestment at the end of, up from $25.3 trillion at year-end. Institutional investor flows were net positive for the fourth straight quarter measuring +$15.4 billion in and +$185.7 billion for the full year. Fixed income strategies were again clear winners in terms of flows with net institutional inflows of +$92.2 billion during the most recent quarter; cash management products, separate from the prior figure, also pitched in +$16.8 billion of net inflows. Allocations to fixed income strategies were widespread geographically with, global, and fixed income products leading the way. On a strategy level, core/core plus, long duration, global aggregate, and global unconstrained managers saw the largest dollar inflows. Equity strategies, in juxtaposition to fixed income strategies, again saw sizeable outflows across a number of categories in. Both active and passive equity products saw institutional redemptions during the quarter totaling -$98.0 billion. Passive non- equity, in particular passive ACWI ex- equity and passive emerging markets equity strategies, was the only area registering net inflows across the long-only equity space. Passive ACWI ex- equity saw net inflows of +$27.2 billion over and passive emerging markets equity, +$17.5 billion. 2

Trends Net institutional investor flows by investment region and asset class as a percentage of prior period institutional AUM Canada Equity -2.2% -0.3% -5.0% Fixed Income 0.3% -1.4% -3.8% Equity -4.

7% pe ex- Equity 4.0% -8.1% -5.2% Fixed Income 8.5% 4.1% 7.3% Asia-Pacific ex- Japan Equity -9.7% -10.2% -8.2% Fixed Income 5.1% 23.2% 3.1% Australia Equity 0.3% 0.5% 1.2% Fixed Income -2.4% -6.0% 7.

3 Trends Net institutional investor flows by investment region and asset class as a percentage of prior period institutional AUM Canada Equity -2.2% -0.3% -5.0% Fixed Income 0.3% -1.4% -3.8% Equity -4.1% -6.9% -13.4% Fixed Income -9.1% 3.2% 0.1% Japan Equity -2.3% -8.9% -4.1% Fixed Income -11.7% 10.6% -5.2% Equity -5.3% -5.4% -5.3% Fixed Income -0.9% 3.9% 4.2% Multi-Asset -0.7% -1.5% 0.7% pe ex- Equity 4.0% -8.1% -5.2% Fixed Income 8.5% 4.1% 7.3% Asia-Pacific ex- Japan Equity -9.7% -10.2% -8.2% Fixed Income 5.1% 23.2% 3.1% Australia Equity 0.3% 0.5% 1.2% Fixed Income -2.4% -6.0% 7.7% Emerging Markets Equity -1.9% 0.6% 0.0% Fixed Income -7.4% -6.9% 7.1% Equity -2.0% -3.0% -1.4% Fixed Income 0.7% -1.9% 12.7% Multi-Asset 4.2% -3.1% -3.2% International EAFE Equity 1.5% 0.3% -0.8% ACWI ex-us EQ 2.7% 3.7% 5.2% 3

4 Active vs. Passive: and Non- Equity Strategies Asset managers reported institutional assets of $7.3 trillion in equity strategies and $7.2 trillion in non- equity strategies thus far for. Active equity strategies continued to see outflows; -$78.6 billion during the most recent quarter, essentially unchanged from 3Q 17. Active non- equity and passive equity products also saw net redemptions, but to a lesser extent than during the prior quarter. Passive non- equity strategies experienced its fifth consecutive quarter of inflows, +$10.0 billion in 4Q 17 and +$47.6 billion over. Cumulative net institutional investor flows (USD BN) $200 $0 ($200) ($400) ($600) ($800) ($1,000) ($1,200) ($1,400) ($1,600) $99 ($57) ($351) ($938) Active Equity Active Non- Equity Passive Equity Passive Non- Equity $16,000 Institutional assets under management (USD BN) $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 $3,887 $3,882 $3,858 $3,886 $3,890 $3,804 $3,683 $3,502 $3,567 $3,529 $3,445 $3,434 $4,904 $4,946 $5,224 $5,370 $4,836 $5,249 $4,459 $4,389 $4,593 $4,410 $4,449 $4,348 $2,747 $2,726 $2,183 $2,399 $2,431 $2,778 $2,969 $3,124 $3,247 $3,490 $2,365 $3,394 $1,900 $1,848 $1,630 $1,769 $1,767 $1,721 $1,982 $1,856 $2,088 $2,296 $2,019 $1,921 Active Equity Active Non- Equity Passive Equity Passive Non- Equity 4

5 Active vs. Passive: and Non- Fixed Income Strategies Institutional fixed income flows, excluding cash management strategies, were positive across all four broad categories in totaling +$92.2 billion. Active fixed income strategy flows were +$45.9 billion during the quarter and +$19.5 billion for active non- managers. Passive strategies also enjoyed inflows of +$15.4 billion () and +$11.4 billion (non-). fixed income flows were one of the highest on record with institutions allocating +$479.0 billion. $700 Cumulative net institutional investor flows (USD BN) $600 $500 $400 $300 $200 $100 $0 ($100) ($200) $317 $103 $162 $38 Active Fixed Income Active Non- Fixed Income Passive Fixed Income Passive Non- Fixed Income $12,000 $10,000 Institutional assets under management (USD BN) Active Fixed Income $8,000 $6,000 $4,000 $2,000 $0 $6,404 $6,354 $6,127 $5,224 $5,234 $5,223 $5,089 $5,378 $5,651 $5,621 $5,914 $6,178 $3,022 $3,243 $3,807 $2,748 $2,876 $2,785 $2,651 $2,874 $2,870 $2,932 $2,821 $2,846 $478 $529 $531 $604 $629 $666 $579 $726 $751 $797 $812 $811 $415 $381 $429 $372 $262 $270 $287 $272 $537 $543 $276 $285 Active Non- Fixed Income Passive Fixed Income Passive Non- Fixed Income Note: Fixed income strategies Q3 reporting is currently less robust as compared to Q2. We recommend reviewing updates of the data published on our Asset Flows platform. 5

6 Asset Class Flows: Equity Strategies Net institutional investor flows as % of prior period institutional AUM for select equity universes; Positive figures in bold, negative figures in italics Q1 Q2 Q3 9.61% All 1.29% ACWI ex- All 5.14% 0.47% 1.16% ACWI ex- All 0.39% ACWI ex- All 0.50% 0.94% 1.09% EM All 5.15% 1.18% 4.01% ACWI ex- All -0.13% ACWI ex- All 1.16% -0.18% 0.14% ACWI ex- All 0.57% 0.49% 4.72% All 0.48% 0.25% -0.34% Large -1.64% All -0.21% EM All -0.04% Large -0.06% Large 0.11% Large 1.66% 0.34% Large -1.74% EM All -2.26% EM All -2.58% -1.10% -0.27% -0.28% EM All 0.08% ACWI ex- All -0.67% EM All 0.27% -2.19% Large -2.63% -4.15% EM All -1.24% -0.31% -0.37% 0.06% All -2.10% 0.03% -2.27% -4.26% All -4.19% Large -1.25% All -0.33% -0.82% ACWI ex- All -0.37% All -3.09% Large 0.02% -2.80% All -4.26% -4.99% -1.70% Large -0.42% All -0.97% -0.94% -4.03% ACWI ex- All -1.09% All -3.87% Small -5.51% -5.19% Small -1.75% Small -1.82% EM All -1.16% Large -2.01% -4.54% -4.48% EM All -3.95% All -6.87% -7.38% -2.01% Large -1.85% -1.54% All -2.13% Small -6.59% Large -5.53% All -4.07% -8.11% Small -7.76% All -2.49% -1.96% Large -1.73% -2.28% -7.38% -8.35% Small -5.48% Large -8.83% Large -9.02% Large -2.67% -2.84% Small -1.79% Small -2.37% Large -9.28% Small % Large -8.13% -8.93% All % -4.61% All -3.88% All -2.73% All -2.64% 6

7 Asset Class Flows: Fixed Income Strategies Net institutional investor flows as % of prior period institutional AUM for select fixed income universes; Positive figures in bold, negative figures in italics Q1 Q2 Q3 Unconstrained 62.45% Unconstrained 17.17% 10.33% 10.62% Unconstrained 20.05% Unconstrained 4.89% Long 5.60% Unconstrained 3.65% Unconstrained 2.57% Credit 18.13% 13.58% Unconstrained 5.29% 4.69% Long 9.69% Credit 4.36% Unconstrained 4.31% 2.09% 1.85% Long 11.50% Credit 11.92% 3.90% High 4.33% Credit 8.47% 2.38% Credit 3.91% Long 1.70% Long 1.30% 4.13% 6.75% Credit 3.76% Credit 3.83% 8.43% 2.20% Core 3.23% Core 1.45% Core 1.03% High 2.17% Core 5.73% Long -0.05% 2.04% 7.13% 0.95% 2.88% Credit 1.20% 0.91% 1.76% 4.64% High -0.80% 1.11% Core 6.74% Long 0.22% 2.42% 0.67% 0.54% -0.96% -1.12% Core -2.22% Core 1.03% -0.32% Core 0.08% 2.23% 0.52% Credit 0.17% -1.56% Long -4.63% -7.11% -0.06% -0.58% High -0.60% 1.41% 0.33% -0.11% Core -3.55% High -4.74% -7.86% Long -2.53% -2.26% -0.91% -0.17% 0.21% -0.79% -4.28% -6.39% % -4.83% -4.48% -1.39% -0.78% -1.92% -1.83% -6.97% -6.77% % Unconstrained -8.46% -5.20% -1.54% High -1.16% High -2.15% High -2.11% -8.16% % % % High -6.08% -3.45% -1.20% -3.29% -3.59% 7

8 Flows by Investor Domicile: Long-only strategies reported domiciled investor assets of $21.6 trillion in. fixed income managers continued to see support from domiciled investors with net allocations of +$66.6 billion. ACWI ex- equity and global fixed income were the other major category winners in terms of net inflows, +$6.7 billion and +$5.2 billion, respectively. On the other end of the spectrum,, EAFE, and global equity strategies all saw outflows from -based investors during Q4 and emerging markets fixed income managers saw inflows dry up considerably from an average of +$3.0 billion from Q1 Q3 to +$0.4 billion in the final quarter. domiciled investor flows (last 4 quarter investor flows as % of Q4 investor AUM; flows as % of Q3 investor AUM) Emerging Markets Equity 1.1% 0.7% Fixed Income 5.5% 0.2% Investor Domicile (Source of Assets) Equity -2.0% -0.4% Fixed Income 6.7% 0.9% Equity -6.3% -1.6% Fixed Income 3.4% 0.8% International ACWI ex-us EQ 1.7% 0.7% EAFE Equity -1.4% -1.0% *All calculations in the Flows by Investor Domicile section are based on total flows and total assets under management, in contrast to the remainder of the report which utilizes institutional flow and institutional AUM figures. Certain products provide total AUM but do not provide investor domicile asset breakdowns. 8

9 Flows by Investor Domicile: Long-only managers reported domiciled investor assets of $1.4 trillion up from the $1.3 trillion reported at the end of. flows from -based investors were directed largely at (+$3.4 billion), global (+$3.2 billion), and emerging markets (+$2.5 billion) fixed income and to global multi-asset strategies (+$1.5 billion). domiciled investors continued to eschew equity exposure, both local and otherwise, in the final quarter of the year. Outflows across,, global, and emerging markets equity strategies totaled -$47.9 billion for. domiciled investor flows (last 4 quarter investor flows as % of Q4 investor AUM; flows as % of Q3 investor AUM) Emerging Markets Equity -5.4% -1.0% Fixed Income 23.1% 8.1% Investor Domicile (Source of Assets) Equity -8.0% -1.7% Fixed Income 15.3% 1.5% Equity -11.9% -3.8% Fixed Income 0.1% -2.9% Equity -17.3% -3.0% Fixed Income 9.8% 2.8% *All calculations in the Flows by Investor Domicile section are based on total flows and total assets under management, in contrast to the remainder of the report which utilizes institutional flow and institutional AUM figures. Certain products provide total AUM but do not provide investor domicile asset breakdowns. 9

Flows by Investor Domicile: pe ex- In contrast to,, and Japan domiciled investors, those in pe ex- allocated heavily to global equity strategies, +$12.3 billion during and +$33.

10 Flows by Investor Domicile: pe ex- In contrast to,, and Japan domiciled investors, those in pe ex- allocated heavily to global equity strategies, +$12.3 billion during and +$33.1 billion over the course of the year. Continental pe-based investors were also the only regional cohort to redeem from fixed income strategies (-$7.5 billion); the group was still a net allocator to the universe on a full year basis (+$37.6 billion). pe ex- domiciled investors also provided net inflows for global fixed income (+$6.1 billion), emerging markets fixed income (+$5.3 billion), and global multi-asset strategies (+$2.1 billion) during. pe ex- domiciled investor flows (last 4 quarter pe ex- investor flows as % of Q4 pe ex- investor AUM; pe ex- flows as % of Q3 pe ex- investor AUM) *Strategies with pe as the investment geography INCLUDE zone, Pan-pean, and pe ex- country-specific strategies and EXCLUDE -specific strategies Emerging Markets Equity 0.2% 0.7% Fixed Income 14.3% 1.9% Investor Domicile (Source of Assets) Equity 7.4% 2.2% Fixed Income 22.9% 1.0% pe Equity -0.8% -0.6% Fixed Income 0.6% -1.0% Equity -12.2% -3.0% Fixed Income 6.8% -1.2% *All calculations in the Flows by Investor Domicile section are based on total flows and total assets under management, in contrast to the remainder of the report which utilizes institutional flow and institutional AUM figures. Certain products provide total AUM but do not provide investor domicile asset breakdowns. 10

11 Company Description evestment, a Nasdaq company, provides a flexible suite of easy-to-use, cloud-based solutions to help global investors and their consultants select investment managers, enable asset managers to successfully market their funds worldwide and assist clients to identify and capitalize on global investment trends. With the largest, most comprehensive global database of traditional and alternative strategies, delivered through leading-edge technology and backed by fantastic client service, evestment helps its clients be more strategic, efficient and informed. For more evestment research visit: Locations Atlanta (Headquarters) support@evestment.com +1 (877) New York support@evestment.com +1 (212) Edinburgh europe@evestment.com +44 (0) London europe@evestment.com +44 (0) Sydney australia@evestment.com +61 (0) Hong Kong asia@evestment.com Dubai support@evestment.com Research Group Peter Laurelli, CFA Head of Research plaurelli@evestment.com +1 (212) Minkyu Mike Cho, CFA Senior Research Analyst mcho@evestment.com +1 (212) Tony Kristić Senior Research Analyst tkristic@evestment.com +1 (646) Media Contacts Mark Scott Communications mscott@evestment.com +1 (678) Hugh Cunningham Cognito (US) hugh.cunningham@cognitomedia.com +1 (646) Francesca Bliss Cognito (UK) francesca.bliss@cognitomedia.com +44 (0) Natalie Chan Teneo Strategy (Asia) natalie.chan@teneostrategy.com evestment Alliance, LLC All Rights Reserved 11

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