The Current and Long- Term Case for Overseas Investing

The Current and Long- Term Case for Overseas Investing Q1 2017 TP666

Bank of America Corporation ( Bank of America ) is a financial holding company that, through its subsidiaries and affiliated companies, provides banking and investment products and other financial services. Merrill Lynch, Pierce, Fenner & Smith Incorporated is a wholly-owned subsidiary of Bank of America Corporation, and a registered broker-dealer and member of FINRA and SIPC. Investment products provided by Merrill Lynch, Pierce, Fenner & Smith, Incorporated: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value The views and opinions expressed in this presentation are not necessarily those of Bank of America Corporation;; Merrill Lynch, Pierce, Fenner & Smith Incorporated;; or any affiliates. Nothing discussed or suggested in these materials should be construed as permission to supersede or circumvent any Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated policies, procedures, rules, and guidelines. Merrill Lynch, Pierce, Fenner & Smith Incorporated is not a tax or legal advisors. Clients should consult a personal tax or legal advisor prior to making any tax or legal related investment decisions.

Investing in Overseas Equities for Risk Diversification and Return Potential 1 Tactical rationales: Monetary policy, energy volatility, current valuations 2 Strategic rationales: Global diversification, unique opportunities elsewhere 3 Importance of active management Special risks may be associated with investments outside the United States, especially in emerging markets, including currency fluctuations, illiquidity, volatility, and political and economic risks. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment loss. 3

Current Realities The Tactical Case Fed tightening;; foreign central banks continuing on stimulus Overseas economies earlier in the economic recovery cycle than the Overseas valuations cheaper Stable oil Special risks may be associated with investments outside the United States, especially in emerging markets, including currency fluctuations, illiquidity and volatility. 4

Don t Fight the Fed or BOJ, or ECB Drawing on a Successful Playbook From 1/2009 through 3/2017 5.0 Major central banks balance sheets 4.5 4.0 3.5 $ in Trillions 3.0 2.5 2.0 1.5 1.0 0.5 Federal Reserve European Central Bank Bank of Japan 0.0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Source: Bloomberg 5

Policy Reactions to a Low Growth / Low Inflation World Total Central Bank Assets (% of GDP) Source: Financial Times, IMF, Haver Analytics, Fulcrum Asset Management, LLP 6

Strong Dollar Can Be a Tailwind for Overseas Companies Dollar Index Spot As of 12/31/2016 105 100 95 A strong dollar benefits overseas firms that sell into the Their costs are typically in local currency while their sales into the are in USD, which translates back into more local currency units. This can be extremely accretive to foreign company earnings. 102.2 90 85 80 75 70 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Past performance does not guarantee future results. Source: Bloomberg 7

Cheap Oil Greatly Benefits Net Importers Source: Financial Times Winners and losers of oil price plunge by Chris Giles, December 15, 2014 8

Valuations Can Be Attractive As of 12/31/2016* 35 30 25 MSCI USA - PE - NTM MSCI Europe - PE - NTM MSCI Japan - PE - NTM MSCI Pacific ex JP - PE - NTM MSCI EM - PE - NTM P/E - NTM (x) 20 15 10 5 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Source: FactSet *Price multiples are based on consensus estimates, Next 12 Months (NTM) 9

World Equity Indices Annual Returns (ranked in order of performance) From 2006 through 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Emerging Markets 32.59% Emerging Markets 39.78% -37.00% Emerging Markets 79.02% Emerging Markets 19.20% 2.11% Emerging Markets 18.63% 32.39% 13.69% 1.38% 11.96% EAFE 26.86% EAFE 11.63% EAFE -43.06% EAFE 32.46% 15.06% EAFE -11.73% EAFE 17.90% EAFE 23.29% Emerging Markets -1.82% EAFE -0.39% Emerging Markets 11.19% 15.79% 5.49% Emerging Markets -53.18% 26.46% EAFE 8.21% Emerging Markets -18.17% 16.00% Emerging Markets -2.27% EAFE -4.48% Emerging Markets -14.60% EAFE 1.00% Past performance does not guarantee future results. Source: FactSet, MSCI.com and Standard & Poor s. is the S&P 500 Index, other regions are MSCI indices. Returns are gross index USD. 10

Cycles of Global Investment Performance Market vs. International Market From To Outperformer By April 30, 1971 March 30, 1973 MSCI EAFE 62.2% March 30, 1973 October 31, 1976 S&P 500 30.5% October 31, 1976 October 31, 1980 MSCI EAFE 90.0% October 31, 1980 October 31, 1982 S&P 500 34.1% October 31, 1982 February 28, 1989 MSCI EAFE 409.4% February 28, 1989 August 31, 2000 S&P 500 490.6% August 31, 2000 November 30, 2007 MSCI EAFE 60.5% November 30, 2007 December 31, 2016 S&P 500 84.2% Past performance does not guarantee future results. Source: Morgan Stanley, Bloomberg data used for most recent time period. Cumulative index return with dividends reinvested. 11

Mutual Fund Cash Flow Trends Equity (average monthly net flows in $ billions) As of 2/28/2017 25 20 21.6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 15 10 5 0-5 -10 10.8 9.3 4.5 2.6 0.9-2.1-4.0-3.3-5.9-8.8 1.5-5.0-7.2 12.4 11.6 11.9 8.7 7.1 7.8 5.6 4.2 4.9 4.3 1.9 2.6 0.4 0.2-0.2-1.8-2.1-6.9-15 -12.6-13.0-14.2-20 -19.6-25 Domestic Equity World Equity Source: Investment Company Institute 12

Long-Term Realities the Strategic Case share of global GDP is declining, while that of EM, and especially China, are rising share of global stock market capitalization is also declining Portfolio yield outside the is often superior to that inside the Unique companies, unique opportunities in distinct markets 13

Share of Global GDP Continues to Fall Historical and Estimated Share of World GDP Over Time 90% 80% 70% 60% 50% Advanced Economies Emerging Market and Developing Economies United States China 40% 30% 20% 10% 0% 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2018 2021 Source: International Monetary Fund, as of December 31, 2016 In current USD 14

World Market Capitalization International Equities Represent Almost Half of World Market Capitalization 66% World 34% 1970 Source: FactSet Data represents MSCI AC World Index, as of December 2015. World percentage excludes the United States. 15 54% World 46% 2016

Yet Investors Continue to Show a Home Country Bias As of 12/31/2015 Equity Fund Assets World GDP 26% 25% Non - Non - 74% 75% Source: 2016 Investment Company Fact Book and International Monetary Fund, World Economic Outlook Database, April 2017 16

Global Diversification Can Improve the Portfolio Yield 2018 MSCI Indices Dividend Yield Estimates As of 3/31/2017 U.S 2.2% Canada 3.0% EM Latin America U.K. 4.5% 3.6% Europe Ex-U.K. Nordic Countries 3.7% China 2.4% Japan 2.3% 3.5% Australia 4.5% Source: Bloomberg Diversification does not guarantee a profit or protect against a loss. 17

Unique Business Opportunities Abroad China Mobile Leading telecom in the world s most populous country, fastgrowing subscriber base Aena Largest listed airport operator globally, with ownership of 40+ airports in Spain Interxion Leading European data center operator World s largest mobile network Rising network quality, smart phone adoption (including iphones);; cheap valuation Huge data usage potential after 4G service launch;; big earnings driver Industry-leading profit margins Generates significant free cash flow after a period of capital investment Initiation of dividend, then high growth of same Passenger traffic remains below peak levels and key airports have significant headroom to grow High barriers to entry with difficult-to-replicate assets High profitability with good operating leverage potential Cloud, mobility, and tech outsourcing all drive demand for data centers China Mobile is 1.8% in Thornburg Developing World Fund and 4.3% in Thornburg Investment Income Builder Fund;; Aena is 1.4% in Thornburg Better World International Fund and 5.0% in Thornburg Global Opportunities Fund;; Interxion is 1.8% in Thornburg Global Opportunities Fund, as of 2/28/2017. The securities mentioned are for illustration purposes only. Under no circumstances does the information contained within represent a recommendation to buy or sell the security. 18

In Summary Comparative regional advantages Unique business opportunities abroad Currency exposure Valuations Potential for increased portfolio yield Special risks may be associated with investments outside the United States, especially in emerging markets, including currency fluctuations, illiquidity and volatility. 19

Thornburg International & Global Equity Fund Lineup Investment Income Builder Fund Global Opportunities Fund Launched December 24, 2002 Focused on providing an attractive dividend that, subject to fluctuation, can grow over time Seeks out companies with the willingness and ability to increase dividends Allocation to fixed-income securities that management believes can help fulfill goals of the fund Launched July 28, 2006 Focused, flexible global product of 30-40 holdings Leverages the research of the entire Thornburg equity team International Value Fund Launched May 28, 1998 Comprehensive approach to value;; three-basket approach to portfolio construction Focused portfolio Better World International Fund Launched September 30, 2015 Invests in high quality, attractively priced companies that have a positive impact on the world Focused portfolio International Growth Fund Launched February 1, 2007 International multi-cap growth strategy built on fundamental, bottom-up research Focused portfolio Developing World Fund Launched December 16, 2009 Invests in companies that stand to benefit from growth in developing markets Employs three-basket approach to portfolio construction;; focused portfolio There is no guarantee the funds will meet their objectives. 20

Equity Funds: Performance Average Annual Total Returns As of 3/31/2017 Thornburg Investment Income Builder Fund (Inception: 12/24/2002)** Total annual operating expenses are 1.07% 1-Yr 3-Yr 5-Yr 10-Yr Inception I Shares TIBIX 12.20% 3.21% 7.07% 5.74% 9.90% Blended Index* 11.06% 4.92% 7.70% 4.50% 7.44% Thornburg Global Opportunities Fund (Inception: 7/28/2006) Total annual operating expenses are 0.99% I Shares THOIX 14.05% 8.98% 13.35% 7.88% 10.51% MSCI AC World Index 15.04% 5.08% 8.37% 4.00% 5.19% Thornburg International Value Fund (Inception: 5/28/1998)** Total annual operating expenses are 0.90% I Shares TGVIX 9.03% 3.31% 4.87% 2.98% 7.80% MSCI EAFE Index 11.67% 0.50% 5.83% 1.05% 3.92% Thornburg Better World International Fund (Inception: 9/30/2015) Total annual operating expenses are 2.28%;; Net 1.09% I Shares TBWIX 12.78% N/A N/A N/A 11.76% MSCI AC World ex- Index 13.13% N/A N/A N/A 10.62% Thornburg International Growth Fund (Inception: 2/1/2007) Total annual operating expenses are 1.00%;; Net 0.99% I Shares TINGX 9.24% 1.52% 7.45% 6.68% 7.16% MSCI AC World ex- Growth Index 9.63% 1.55% 4.84% 1.97% 2.19% Thornburg Developing World Fund (Inception: 12/16/2009) Total annual operating expenses are 1.16%;; Net 1.09% I Shares THDIX 7.94% -2.49% 2.42% N/A 5.60% MSCI Emerging Markets Index 17.22% 1.18% 0.81% N/A 2.19% Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate so shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than quoted. For performance current to the most recent month end, visit thornburg.com or call 877-215-1330. There is no up-front sales charge for class I shares. Thornburg Investment Management and/or Thornburg Securities Corporation have contractually agreed to waive fees and reimburse expenses through at least April 10, 2018, for some of the share classes;; these are reflected in the net expense ratio. For more detailed information on fund expenses and waivers/reimbursements, please see the fund's prospectus. *The Blended Index is composed of 25% Bloomberg Barclays Aggregate Bond Index and 75% MSCI World Index ** Prior to inception of class I shares (3/30/2001 for International Value Fund and 11/3/2003 for Investment Income Builder), performance is calculated from actual returns of the class A shares adjusted for the lower Institutional expenses. 21

www.thornburg.com Before investing, carefully consider the Fund s investment goals, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, contact your financial advisor or visit thornburg.com. Read them carefully before investing. Not FDIC Insured. May lose value. No bank guarantee. Thornburg Funds are distributed by Thornburg Securities Corporation. 2300 North Ridgetop Road Santa Fe, New Mexico 87506 877-215-1330 ML#17-002362

Disclosure Appendix Investments carry risks, including possible loss of principal. Additional risks may be associated with investments outside the United States, especially in emerging markets, including currency fluctuations, illiquidity, volatility, and political and economic risks. Investments in small- and mid-capitalization companies may increase the risk of greater price fluctuations. Portfolios investing in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds. The value of bonds will fluctuate relative to changes in interest rates, decreasing when interest rates rise. Investments in the Funds are not FDIC insured, nor are they bank deposits or guaranteed by a bank or any other entity. The trade-weighted dollar index, also known as the broad index, is a measure of the value of the United States dollar relative to other world currencies. Its numerical value is determined as a weighted average of the price of various currencies relative to the dollar. P/E Price/Earnings ratio (P/E ratio) is a valuation ratio of a company s current share price compared to its per-share earnings. P/E equals a company s market value per share divided by earnings per share. Forecasted P/E is not intended to be a forecast of the fund's future performance. The MSCI USA Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the United States. To construct a country index, every listed security in the market is identified. Securities are free float adjusted, classified in accordance with the Global Industry Classification Standard, and screened by size, liquidity and minimum free float. The MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe. The MSCI Europe Index consists of the following 15 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The MSCI Japan Index is designed to measure the performance of the large and mid cap segments of the Japanese market. With 314 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Japan. The MSCI Pacific ex-japan Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in the Pacific region. The index consists of the following 4 developed market countries: Australia, Hong Kong, New Zealand, and Singapore. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 23 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. The S&P 500 Index is an unmanaged broad measure of the stock market. 23

Disclosure Appendix The MSCI EAFE (Europe, Australasia, Far East) Index is an unmanaged index. It is a generally accepted benchmark for major overseas markets. Index weightings represent the relative capitalizations of the major overseas developed markets on a dollar adjusted basis. The index is calculated with net dividends reinvested in dollars. Gross Domestic Product (GDP) A country's income minus foreign investments: the total value of all goods and services produced within a country in a year, minus net income from investments in other countries. The MSCI country indices are free float-adjusted market capitalization indices that are designed to measure equity market performance in that specific country in dollars. Dividend Yield A ratio that shows how much a company pays out in dividends each year relative to its share price. The MSCI All Country (AC) World Index is a market capitalization weighted index that is representative of the market structure of 46 developed and emerging market countries in North and South America, Europe, Africa, and the Pacific Rim. The index is calculated with net dividends reinvested in dollars. The MSCI All Country (AC) World ex- Growth Index is a market capitalization weighted index that includes growth companies in developed and emerging markets throughout the world, excluding the United States. Thornburg Investment Income Builder Fund s Blended Index is composed of 25% Bloomberg Barclays Aggregate Bond Index and 75% MSCI World Index, rebalanced monthly. The MSCI World Index is an unmanaged market-weighted index that consists of securities traded in 23 of the world s most developed countries. Securities are listed on exchanges in the, Europe, Canada, Australia, New Zealand, and the Far East. The index is calculated with net dividends reinvested in dollars. The Bloomberg Barclays Aggregate Bond Index is composed of approximately 8,000 publicly traded bonds including government, mortgage-backed, corporate and Yankee bonds. The index is weighted by the market value of the bonds included in the index. The MSCI All Country (AC) World ex-us Index is a market capitalization weighted index representative of the market structure of 45 developed and emerging market countries in North and South America, Europe, Africa, and the Pacific Rim, excluding securities of United States issuers. The index is calculated with gross dividends reinvested in dollars. 24