A Novel Business Cycle Multi-Asset Allocation Strategy

BUSINESS CYCLE ASSET ALLOCATION A Novel Business Cycle Multi-Asset Allocation Strategy May, 2017 Proforma Performance Comparison AASE Strategy v. S&P500 v. Stock/Bond Portfolio Proforma Performance Comparison AASE Global Strategy v. MSCI World (USD) Proforma Performance Comparison AASE Strategy v. TOPIX v. Stock/Bond Portfolio Proforma Performance Comparison AASE Strategy v. Stoxx v. Stock/Bond Portfolio 1

Contents Summary Matrix... 3 U.S. (Using commodity index ETF)... 4 U.S. (using commodity sectors)... 6 Eurozone... 8 Japan... 10 Australia... 12 Global Asset Allocation... 14 The Framework... 18 *Notes... 21 Our method allows investors to apply economic fundamentals in a focused way to choose the correct assets classes. This is made possible by our ability to forecast with considerable accuracy the future stages of the business cycle using our proprietary leading index. 2

Summary Matrix AASE Business Cycle Asset Allocation for June 2017 USA Eurozone Japan Australia Business Cycle Stage (1-4) 3 3 4 1 Equities Consumer Discretionary Consumer Staples Financials Industrials IT Commodities (or commodity related equity sectors Telecom Services Healthcare Utilities Materials Energy Business Cycle Risk Spectrum 1 Stage 1 Stage 2 Stage 3 Stage 4 Australia USA Eurozone Japan 3 1 Red denotes the most defensive stage and thus the highest risk aversion. Orange denotes moving into defensive stage and the Green stages denotes a more beneficial environment for equities & commodities in general

U.S. (Using commodity index ETF) AASE Asset Allocation Approach*: U.S. (February 1973-April 2017; Rebased to 100) Allocation across equities, government bonds and commodities (allocation to Commodities via GSCI Index (now available as an ETF)) For the month of April the AASE US Strategy (/Commodities) Portfolio declined by 1.5%. This compared to the S&P500 total return gain of 1% and a stock/bond portfolio notional return of 0.8%. Proforma Performance Comparison AASE Strategy v. S&P500 v. Stock/Bond Portfolio For June the AAS Economics four-stage business cycle leading index showed Stage 3, which is unchanged from May. ALLOCATIONS (Using GSCI Commodity ETF) April 2017 Stage 3 Stocks 50% Industrials 16.67% Telecom 16.67% Financials 16.67% Commodity Index 50% GSCI ETF 50% May 2017 Stage 3 Stocks 50% Industrials 16.67% Telecom 16.67% Financials 16.67% Commodity Index 50% GSCI ETF 50% June 2017 Stage 3 Stocks 50% Industrials 16.67% Telecom 16.67% Financials 16.67% Proforma Performance AASE Strategy v. S&P500 v. Stock/Bond Portfolio AASE Feb-1973 to Apr-2017 Approach* S&P Total Return Proforma Asset Allocation June 2017 AASE Strategy: Stage 3 CAGR 14.99% 10.33% 9.19% Max Drawdown -21.2% -50.9% -22.5% Std Dev 12.0% 15.3% 8.8% Return/Drawdown 0.71 0.20 0.41 Sharpe 3% 1.00 0.48 0.71 % Positive Years 95.6% 80.0% 97.4% Commodity Index 50% GSCI ETF 50% 4

U.S. (Using commodity index ETF) Yearly Analysis YEARLY AASE Approach S&P Total Return YEARLY AASE Approach S&P Total Return 1973 25.81% -13.40% -4.47% 1996 7.42% 22.96% 11.09% 1974-9.17% -26.46% -11.09% 1997 4.68% 33.36% 22.06% 1975 5.68% 37.22% 22.12% 1998 46.63% 28.58% 21.51% 1976 13.17% 23.93% 18.57% 1999 50.14% 21.04% 5.60% 1977 1.59% -7.16% -2.90% 2000 3.73% -9.10% 2.31% 1978 5.58% 6.57% 5.30% 2001 19.10% -11.89% -3.62% 1979 12.69% 18.61% 11.28% 2002 1.36% -22.10% -4.49% 1980 19.72% 32.50% 16.58% 2003 38.32% 28.68% 14.54% 1981 8.84% -4.92% 0.35% 2004 10.37% 10.88% 7.96% 1982 37.76% 21.55% 27.95% 2005 5.62% 4.91% 3.73% 1983 18.04% 22.55% 12.55% 2006 12.54% 15.79% 8.47% 1984 13.51% 6.27% 10.43% 2007 12.89% 5.49% 7.80% 1985 25.64% 31.73% 30.02% 2008 6.65% -37.00% -11.54% 1986 24.16% 18.67% 19.77% 2009 10.78% 26.46% 7.73% 1987 8.91% 5.25% 2.50% 2010 21.93% 15.06% 12.69% 1988 22.52% 16.61% 11.48% 2011 12.58% 2.11% 9.78% 1989 34.96% 31.68% 24.04% 2012 9.93% 16.00% 10.58% 1990 2.74% -3.10% 1.91% 2013 17.75% 32.39% 10.83% 1991 33.10% 30.47% 23.96% 2014 12.99% 13.69% 12.24% 1992 10.46% 7.62% 7.11% 2015 2.20% 1.38% 1.56% 1993 15.01% 10.08% 11.08% 2016 16.82% 11.96% 6.56% 1994 3.21% 1.32% -3.33% 2017-0.49% 7.16% 4.27% 1995 35.12% 37.58% 30.54% Recent Cycle Stages RECENT CYCLE STAGES Subsequent Month Return S&P Total Return Jan-16 STAGE 1 1.8% -5.0% -0.9% Feb-16 STAGE 1 1.4% -0.1% 0.8% Mar-16 STAGE 1 1.4% 6.8% 3.3% Apr-16 STAGE 3 5.2% 0.4% 0.3% May-16 STAGE 3 1.4% 1.8% 0.8% Jun-16 STAGE 3 1.2% 0.3% 1.8% Jul-16 STAGE 3-3.5% 3.7% 2.0% Aug-16 STAGE 3 0.7% 0.1% -0.4% Sep-16 STAGE 3 1.4% 0.0% -0.1% Oct-16 STAGE 3-1.8% -1.8% -1.8% Nov-16 STAGE 3 5.7% 3.7% -0.1% Dec-16 STAGE 4 1.0% 2.0% 0.8% Jan-17 STAGE 4 0.8% 1.9% 0.9% Feb-17 STAGE 4 3.2% 4.0% 2.4% Mar-17 STAGE 3-3.0% 0.1% 0.0% Apr-17 STAGE 3-1.5% 1.0% 0.8% 5

U.S. (using commodity sectors) AASE Asset Allocation Approach*: U.S. (February 1973-April 2017; Rebased to 100) Allocation across equities and government bonds (allocation to Commodities via Stock Sectors - Energy, Materials) For the month of April the AASE US Strategy () Portfolio declined by 0.8%. This compared to the S&P500 total return gain of 1% and a stock/bond portfolio notional return of 0.8%. Proforma Performance Comparison AASE Strategy v. S&P500 v. Stock/Bond Portfolio For June the AAS Economics four-stage business cycle leading index showed Stage 3, which is unchanged from May. ALLOCATIONS (Using Commodity Sectors) April 2017 Stage 3 Stocks 50% Industrials 16.67% Telecom 16.67% Financials 16.67% Commodity Sectors 50% Basic Materials 25% Oil & Gas 25% May 2017 Stage 3 Stocks 50% Industrials 16.67% Telecom 16.67% Financials 16.67% Commodity Sectors 50% Basic Materials 25% Oil & Gas 25% June 2017 Stage 3 Stocks 50% Industrials 16.67% Telecom 16.67% Financials 16.67% Proforma Performance AASE Strategy v. S&P500 v. Stock/Bond Portfolio AASE Feb-1973 to Apr-2017 Approach* S&P Total Return Proforma Asset Allocation June 2017 AASE Strategy: Stage 3 CAGR 14.80% 10.33% 9.19% Max Drawdown -32.6% -50.9% -22.5% Std Dev 13.4% 15.3% 8.8% Return/Drawdown 0.45 0.20 0.41 Sharpe 3% 0.88 0.48 0.71 % Positive Years 88.9% 80.0% 97.4% Commodity Sectors 50% Basic Materials 25% Oil & Gas 25% 6

U.S. (using commodity sectors) Yearly Analysis YEARLY AASE Approach S&P Total Return YEARLY AASE Approach S&P Total Return 1973-2.58% -13.40% -4.47% 1996 7.42% 22.96% 11.09% 1974-20.97% -26.46% -11.09% 1997 5.36% 33.36% 22.06% 1975 40.68% 37.22% 22.12% 1998 52.18% 28.58% 21.51% 1976 13.17% 23.93% 18.57% 1999 48.22% 21.04% 5.60% 1977-0.08% -7.16% -2.90% 2000-4.33% -9.10% 2.31% 1978 3.65% 6.57% 5.30% 2001 21.31% -11.89% -3.62% 1979 8.62% 18.61% 11.28% 2002 0.91% -22.10% -4.49% 1980 28.07% 32.50% 16.58% 2003 44.83% 28.68% 14.54% 1981 9.82% -4.92% 0.35% 2004 6.10% 10.88% 7.96% 1982 28.65% 21.55% 27.95% 2005 7.24% 4.91% 3.73% 1983 22.47% 22.55% 12.55% 2006 17.86% 15.79% 8.47% 1984 15.04% 6.27% 10.43% 2007 12.89% 5.49% 7.80% 1985 28.58% 31.73% 30.02% 2008 6.65% -37.00% -11.54% 1986 24.16% 18.67% 19.77% 2009 11.06% 26.46% 7.73% 1987-4.24% 5.25% 2.50% 2010 23.31% 15.06% 12.69% 1988 16.38% 16.61% 11.48% 2011 15.12% 2.11% 9.78% 1989 32.80% 31.68% 24.04% 2012 10.06% 16.00% 10.58% 1990 1.56% -3.10% 1.91% 2013 26.51% 32.39% 10.83% 1991 36.16% 30.47% 23.96% 2014 11.58% 13.69% 12.24% 1992 10.68% 7.62% 7.11% 2015 2.20% 1.38% 1.56% 1993 18.08% 10.08% 11.08% 2016 20.26% 11.96% 6.56% 1994 3.85% 1.32% -3.33% 2017 2.08% 7.16% 4.27% 1995 33.99% 37.58% 30.54% Recent Cycle Stages RECENT CYCLE STAGES Subsequent Month Return S&P Total Return Jan-16 STAGE 1 1.8% -5.0% -0.9% Feb-16 STAGE 1 1.4% -0.1% 0.8% Mar-16 STAGE 1 1.4% 6.8% 3.3% Apr-16 STAGE 3 3.5% 0.4% 0.3% May-16 STAGE 3 0.0% 1.8% 0.8% Jun-16 STAGE 3 1.8% 0.3% 1.8% Jul-16 STAGE 3 2.1% 3.7% 2.0% Aug-16 STAGE 3 0.1% 0.1% -0.4% Sep-16 STAGE 3-0.2% 0.0% -0.1% Oct-16 STAGE 3-2.3% -1.8% -1.8% Nov-16 STAGE 3 8.2% 3.7% -0.1% Dec-16 STAGE 4 1.0% 2.0% 0.8% Jan-17 STAGE 4 0.8% 1.9% 0.9% Feb-17 STAGE 4 3.2% 4.0% 2.4% Mar-17 STAGE 3-1.2% 0.1% 0.0% Apr-17 STAGE 3-0.8% 1.0% 0.8% 7

Eurozone AASE Asset Allocation Approach*: Eurozone (January 1999-April 2017; Rebased to 100) Allocation across equities and government bonds (allocation to Commodities via Stock Sectors - Energy, Materials) For the month of April the AASE Eurozone Strategy () Portfolio showed a notional return of 4.9%. This compared to the Stoxx index return of 5.5% and a stock/bond portfolio notional return of 2.1%. Proforma Performance Comparison AASE Strategy v. Stoxx v. Stock/Bond Portfolio For June the AAS Economics four-stage business cycle leading index showed Stage 3, which was unchanged from May. ALLOCATIONS (Commodities reflected in Oil & Gas and Basic Materials) April 2017 Stage 3 Stocks 70% Industrials 14.00% Basic Materials 14.00% Telecom 14.00% Consumer Discretionary 14.00% Financials 14.00% Commodity Sectors 30% Oil & Gas 15.00% Basic Materials 15.00% May 2017 Stage 3 Stocks 70% Industrials 14.00% Basic Materials 14.00% Telecom 14.00% Consumer Discretionary 14.00% Financials 14.00% Commodity Sectors 30% Oil & Gas 15.00% Basic Materials 15.00% June 2017 Stage 3 Stocks 70% Industrials 14.00% Basic Materials 14.00% Telecom 14.00% Consumer Discretionary 14.00% Financials 14.00% Proforma Performance AASE Strategy v. Stoxx v. Stock/Bond Portfolio Jan-1999 to Apr- 2017 AASE Approach* EuroStoxx Proforma Asset Allocation June 2017 AASE Strategy: Stage 3 CAGR 10.73% 0.02% 1.64% Max Drawdown -25.5% -62.7% -33.3% Std Dev 12.9% 18.7% 8.9% Return/Drawdown 0.42 0.00 0.05 Sharpe 3% 0.60-0.16-0.15 % Positive Years 89.5% 68.4% 78.9% Commodity Sectors 30% Oil & Gas 15.00% Basic Materials 15.00% 8

Eurozone Yearly Analysis YEARLY AASE Approach EuroStoxx Portfolio 1999 22.81% 32.06% 7.05% 2000 7.80% -2.69% 0.58% 2001-4.48% -20.25% -10.29% 2002 10.08% -37.30% -17.27% 2003 28.83% 15.68% 8.11% 2004 11.81% 6.90% 6.36% 2005 17.05% 21.28% 12.31% 2006 20.20% 15.12% 4.61% 2007 6.99% 6.79% 2.28% 2008-4.36% -44.37% -20.08% 2009 6.99% 21.14% 9.38% 2010 16.24% -5.81% 0.03% 2011 5.58% -17.05% -3.27% 2012 8.64% 13.79% 10.40% 2013 24.57% 17.95% 6.56% 2014 2.10% 1.20% 8.06% 2015 3.07% 3.85% 2.07% 2016 6.90% 0.70% 3.41% 2017 6.19% 8.18% 3.94% Recent Cycle Stages RECENT CYCLE STAGES Subsequent Month Return Stoxx50E Return Jan-16 STAGE 2-5.3% -6.8% -1.7% Feb-16 STAGE 2-2.1% -3.3% -0.5% Mar-16 STAGE 2 3.5% 2.0% 0.8% Apr-16 STAGE 2-0.8% 0.8% -0.2% May-16 STAGE 3 0.0% 1.2% 1.2% Jun-16 STAGE 3-6.3% -6.5% -2.0% Jul-16 STAGE 3 4.4% 4.4% 2.4% Aug-16 STAGE 3 3.1% 1.1% 0.3% Sep-16 STAGE 3-0.1% -0.7% -0.1% Oct-16 STAGE 3 3.0% 1.8% -0.4% Nov-16 STAGE 3 0.6% -0.1% -0.6% Dec-16 STAGE 3 7.6% 7.8% 4.3% Jan-17 STAGE 3-1.2% -1.8% -1.7% Feb-17 STAGE 3 1.4% 2.8% 2.5% Mar-17 STAGE 3 4.9% 5.5% 2.1% Apr-17 STAGE 3 1.1% 1.7% 1.0% 9

Japan AASE Asset Allocation Approach*: Japan (January 1988-April 2017; Rebased to 100) Allocation across equities and government bonds (allocation to Commodities via Stock Sectors - Energy, Materials) For the month of April the AASE Japan Strategy () Portfolio showed a notional return of 0.6%. This compared to the Topix index return of 1.27% and a stock/bond portfolio notional return of 0.9%. Proforma Performance Comparison AASE Strategy v. TOPIX v. Stock/Bond Portfolio In June the AAS Economics four-stage business cycle leading index remains in Stage 4, which is changed from May. ALLOCATIONS (Commodities reflected in Oil & Gas and Basic Materials) April 2017 Stage 3 Stocks 80% Consumer Staples 26.7% Health 26.7% Financials 26.7% Commodity Sectors 20% Oil & Gas 10% Basic Materials 10% May 2017 Stage 4 Stocks 50% Consumer Staples 16.7% Health 16.7% Utilities 16.7% 50% 10-yr Gov't Bond 50% Commodity Sectors June 2017 Stage 4 Stocks 50% Consumer Staples 16.7% Health 16.7% Utilities 16.7% Proforma Performance AASE Strategy v. TOPIX v. Stock/Bond Portfolio ANALYSIS Jan-1988 to Apr-2017 AASE Approach* TOPIX Proforma Asset Allocation June 2017 AASE Strategy: Stage 4 CAGR 7.07% -0.41% 1.24% Max Drawdown -26.0% -75.0% -32.4% Std Dev 14.2% 19.2% 9.6% Return/Drawdown 0.27-0.01 0.04 Sharpe 3% 0.29-0.18-0.18 % Positive Years 86.7% 53.3% 60.0% 50% 10-yr Gov't Bond 50% Commodity Sectors 10

Japan Yearly Analysis YEARLY AASE Approach TOPIX Portfolio YEARLY AASE Approach TOPIX Portfolio 1988 24.48% 36.57% 17.15% 2003-4.36% 23.76% 9.72% 1989 3.41% 22.25% 7.64% 2004 6.85% 10.15% 5.39% 1990-15.37% -39.83% -24.13% 2005 33.17% 43.50% 20.65% 1991 8.04% -1.10% 4.36% 2006 3.48% 1.90% 0.61% 1992 2.18% -23.74% -9.68% 2007 0.57% -12.22% -4.97% 1993 21.82% 10.07% 11.00% 2008 2.36% -41.77% -20.91% 1994 13.57% 8.32% -0.92% 2009 14.59% 5.63% 3.15% 1995 3.93% 1.19% 6.97% 2010 3.10% -0.97% 1.46% 1996 0.05% -6.77% -1.29% 2011-11.92% -18.94% -8.70% 1997 15.18% -20.12% -6.69% 2012 10.17% 18.01% 10.84% 1998 3.95% -7.49% -2.89% 2013 33.00% 51.46% 24.25% 1999 9.73% 58.44% 28.10% 2014 5.56% 8.08% 6.63% 2000 2.91% -25.46% -13.41% 2015 21.14% 9.93% 6.05% 2001-3.04% -19.59% -8.17% 2016 10.00% -1.85% 0.96% 2002 4.88% -18.30% -6.84% 2017 0.36% 0.87% 0.66% Recent Cycle Stages Recent Cycle Stages Subsequent Month Return Topix Return Jan-16 STAGE 4-1.53% -7.45% -2.92% Feb-16 STAGE 4-1.81% -9.37% -3.87% Mar-16 STAGE 3 2.79% 3.80% 1.85% Apr-16 STAGE 3 0.89% -0.49% -0.08% May-16 STAGE 3 2.07% 2.93% 1.65% Jun-16 STAGE 3-9.45% -9.71% -4.22% Jul-16 STAGE 3 4.33% 6.17% 2.80% Aug-16 STAGE 3-0.46% 0.51% -0.28% Sep-16 STAGE 3 0.04% -0.51% -0.11% Oct-16 STAGE 3 3.68% 5.31% 2.50% Nov-16 STAGE 3 5.56% 5.49% 2.40% Dec-16 STAGE 3 4.40% 3.35% 1.60% Jan-17 STAGE 3-0.04% 0.20% -0.10% Feb-17 STAGE 3 1.41% 0.90% 0.61% Mar-17 STAGE 3-1.61% -1.48% -0.76% Apr-17 STAGE 3 0.62% 1.27% 0.91% 11

Australia AASE Asset Allocation Approach*: Australia (April 2000-April 2017; Rebased to 100) Allocation across equities and government bonds (allocation to Commodities via Stock Sectors - Energy, Materials) For the month of April the AASE Australia Strategy () Portfolio showed a notional return of 1.1%. This compared to the ASX200 index return of 0.7% and a stock/bond portfolio notional return of 0.86%. Proforma Performance Comparison AASE Strategy v. ASX200 v. Stock/Bond Portfolio For June the AAS Economics four-stage business cycle leading index has moved into Stage 1, which has changed from May. ALLOCATIONS (Commodities reflected in Oil & Gas and Basic Materials) April 2017 Stage 4 Stocks 50% Utilities 15.00% Consumer Staples 15.00% Health 15.00% 50% Commodity Sectors May 2017 Stage 4 Stocks 50% Utilities 15.00% Consumer Staples 15.00% Health 15.00% 50% Proforma Performance AASE Strategy v. ASX200 v. Stock/Bond Portfolio Apr-2000 to Apr-2017 AASE Approach* All Ords Index CAGR 9.97% 3.82% 3.07% Maximum Drawdown -17.6% -51.4% -24.0% Standard Deviation 11.0% 13.0% 6.4% Return/Drawdown 0.57 0.07 0.13 Sharpe 3% 0.64 0.06 0.01 % Positive Years 88.9% 72.2% 77.8% Proforma Asset Allocation June 2017 AASE Strategy: Stage 4 Commodity Sectors June 2017 Stage 1 Stocks 30% Consumer Staples 15.00% Health 15.00% Consumer Staples, 15.0% Health, 15.0% 70% Government Bonds, 70.0% Commodity Sectors 12

Australia Yearly Analysis YEARLY AASE Approach All Ordinaries Index/Bonds 2000 16.69% 0.68% 3.19% 2001 15.49% 6.51% 1.46% 2002-11.54% -11.44% -2.65% 2003 8.15% 11.11% 3.67% 2004 26.87% 22.60% 11.84% 2005 15.13% 16.18% 8.17% 2006 17.99% 19.87% 6.99% 2007 20.32% 13.76% 5.16% 2008 0.17% -43.01% -15.87% 2009 42.42% 33.43% 8.78% 2010 5.35% -0.73% 1.28% 2011-15.45% -15.18% -1.50% 2012 11.24% 13.46% 8.56% 2013 11.42% 14.76% 2.28% 2014 5.84% 0.66% 7.90% 2015 2.21% -0.82% -0.63% 2016 4.51% 7.01% 4.54% 2017 6.54% 3.99% 2.56% Recent Cycle Stages Recent Cycle Subsequent Stages Month Return All Ords Return Jan-16 STAGE 4 0.50% -5.39% -1.63% Feb-16 STAGE 4 0.21% -2.15% -0.12% Mar-16 STAGE 4 0.62% 4.12% 2.30% Apr-16 STAGE 3 4.20% 3.19% 1.49% May-16 STAGE 3 2.17% 2.48% 2.00% Jun-16 STAGE 3-2.18% -2.52% -0.09% Jul-16 STAGE 3 5.63% 6.28% 3.53% Aug-16 STAGE 4-1.49% -2.03% -0.85% Sep-16 STAGE 4-0.88% -0.08% -0.26% Oct-16 STAGE 4-4.24% -2.22% -2.81% Nov-16 STAGE 4-1.22% 1.85% -0.71% Dec-16 STAGE 4 1.49% 3.94% 1.77% Jan-17 STAGE 4 0.89% -0.77% -0.26% Feb-17 STAGE 4 1.77% 1.52% 0.66% Mar-17 STAGE 4 2.63% 2.48% 1.28% Apr-17 STAGE 4 1.11% 0.74% 0.86% 13

Global Asset Allocation For the Global model each constituent country s business cycle stage is determined using the methodology described at the end of the report. This delivers the asset allocation at the country level. The individual country allocations are then weighted by the relative market capitalizations of their respective stock markets, expressed in US dollars. This then delivers the asset allocations by country, asset class and sector. Country Weights USA 72.09% Japan 17.24% Eurozone 10.68% TOTAL 100% Global Asset Allocations* - Country Breakdown (Proportion of Total Portfolio) June 2017 (Numbers rounded) INDIVIDUAL COUNTRY ALLOCATIONS* Equities Sectors USA Japan Eurozone Consumer Staples 2.9% Consumer Discretionary 1.4% Industrials 12.1% 1.4% Financials 12.1% 1.4% Technology Telecommunications 12.1% 1.4% Health 2.9% Utilities 2.9% Commodity Sectors 10-year 8.8% Oil & Gas 18.2% 1.5% Basic Materials 18.2% 2.8% 14

Global Asset Allocation Global Asset Allocations* - Asset Breakdown (Proportion of Total Portfolio) (Numbers rounded) GLOBAL ASSET ALLOCATION* April 2017 Total Stocks Industrials 13.47% Consumer Staples 4.70% 55.9% Telecom 13.47% Financials 18.17% Technology 0.00% Utilities 0.00% Consumer Discretionary 1.36% Health 4.70% 10-yr Gov't Bond 0.00% 0.0% Commodity Sectors Oil & Gas 21.38% Basic Materials 22.74% 44.1% May 2017 Total Stocks Industrials 13.47% Consumer Staples 2.94% 50.6% Telecom 13.47% Financials 13.47% Technology 0.00% Utilities 2.94% Consumer Discretionary 1.36% Health 2.94% 10-yr Gov't Bond 8.82% 8.8% Commodity Sectors Oil & Gas 19.62% Basic Materials 20.98% 40.6% June 2017 Total Stocks Industrials 13.47% Consumer Staples 2.94% 50.6% Telecom 13.47% Financials 13.47% Technology 0.00% Utilities 2.94% Consumer Discretionary 1.36% Health 2.94% 10-yr Gov't Bond 8.82% 8.8% Commodity Sectors Oil & Gas 19.62% Basic Materials 20.98% 40.6% 15

Apr-00 Dec-00 Aug-01 Apr-02 Dec-02 Aug-03 Apr-04 Dec-04 Aug-05 Apr-06 Dec-06 Aug-07 Apr-08 Dec-08 Aug-09 Apr-10 Dec-10 Aug-11 Apr-12 Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 AAS ECONOMICS LTD Global Asset Allocation AASE Global Asset Allocation Approach* (Apr 2000-April 2017; Rebased to 100) Allocation across equities and government bonds Allocation to Commodities via Stock Sectors (Energy, Materials) AASE World Model (USD) 500 MSCI World Index (USD) 50 ANALYSIS * Apr-2000 to Apr-2017 AASE Global Index USD MSCI AC World Index USD CAGR 11.94% 4.42% Maximum Drawdown -13.60% -54.57% Standard Deviation 9.37% 15.68% Return/Drawdown 0.88 0.08 Sharpe 3% 0.95 0.09 % Positive Years 94% 67% 16

Global Asset Allocation Yearly Analysis YEARLY AASE Approach (USD) MSCI AC World Index (USD) 2000-2.96% -10.93% 2001 10.40% -15.91% 2002 6.34% -18.98% 2003 38.12% 34.63% 2004 9.29% 15.75% 2005 8.43% 11.37% 2006 16.36% 21.53% 2007 12.50% 12.18% 2008 7.74% -41.85% 2009 11.54% 35.41% 2010 19.96% 13.21% 2011 8.70% -6.86% 2012 8.03% 16.80% 2013 23.89% 23.44% 2014 5.29% 4.71% 2015 4.00% -1.84% 2016 17.42% 8.48% 2017 3.42% 8.77% Average: 11.6% 6.1% Recent Cycle Stages Recent Cycle Stages Subsequent Month Return Jan-16 0.30% -6.01% Feb-16 1.82% -0.63% Mar-16 2.38% 7.48% Apr-16 3.72% 1.54% May-16-0.60% 0.21% Jun-16 0.05% -0.55% Jul-16 3.03% 4.34% Aug-16 0.06% 0.39% Sep-16 0.32% 0.66% Oct-16-1.55% -1.67% Nov-16 5.00% 0.81% Dec-16 1.84% 2.20% Jan-17 1.36% 2.76% Feb-17 2.52% 2.85% Mar-17-0.34% 1.29% Apr-17-0.14% 1.60% MSCI World Index (ACWI), USD Return 17

The Framework Applying the AASE Business Cycle Approach to Asset Allocation Some assets of the market tend to perform better in different stages of the economic cycle. Not only is this a non-contentious belief, it is empirically testable. But is it possible to both forecast the stages of the business cycle and simultaneously determine the optimal asset mix for those forecast stages? We believe that it is. The central reason for this assertion is that, because money supply is a leading indicator, one can utilize changes in money supply to establish a forward looking view as to which stage of the cycle we anticipate the economy to be entering. By modifying the standard money supply definitions to better reflect the true nature of money we are able to better predict the business cycle and its stages. As can be seen below this approach has delivered reliable forecasts over many decades. If we expect the economy to be in Stage 1, for example, for the next three months then we can position ourselves accordingly in assets which have performed best historically in Stage 1. A visual representation of our cycle staging approach is shown below along with asset classes which tend to historically outperform in each respective stage. AMS Business Cycle Model Equities Consumer Staples Healthcare Utilities Equities Discretionary IT Industrials Cash Commodities Basic Materials Energy Equities Discretionary Telecom Financials Industrials Staples Healthcare Commodities Basic Materials Energy Equities Consumer Staples Healthcare Utilities Cash STAGE 1 STAGE 2 STAGE 3 STAGE 4 18

Cycle Stage 1: Recessionary conditions optimal to be defensive In Stage 1 of the AASE cycle the economy is declining at a rapid pace and, in general, it is better to adopt a defensive strategy. This typically entails higher allocations to cash and/or bonds, and perhaps allocations to some very defensive equity sectors. Cycle Stage 2: Early rebound period In Stage 2 of the AASE cycle the economy is declining at a slower pace or may be starting to show signs of positive growth. The economy at this stage is commonly patchy but with the emergence of some momentum in a number of assets, generally equities and in particular some of the more cyclical sectors. Different economies, with different industrial structures, will have slight variations as to which sectors are, in their cases, more cyclical when compared to other economies. There will thus be some differences in asset allocation across countries but the cyclical theme prevails. On occasions there may be some small pickup in commodity prices (although this is more common in Stage 3) and bond holdings frequently perform badly. Cash is generally not attractive as interest rates have typically been sharply reduced while simultaneously the returns achievable in other assets begin to become more attractive. Cycle Stage 3: Late recovery period In Stage 3 of the AASE cycle the economy is expanding at a more rapid pace. The conventionally measured end products of the monetary distortions created by the central and commercial banks appear to be strong as the multitudinous micro-bubbles are diffusing across the entire economy and attracting resources. Now the cyclicals may be performing well but the risks are increasing and some of the more non-cyclical sectors come into favour. Often industrials will be performing well, enjoying the pull-up demand from other sectors. At this stage it is often common to see increases in commodity prices (which may also appear earlier in the cycle in some economies where capacity may be more constrained due to greater destruction during Stage 1). Therefore direct or indirect (via commodity-related stock sectors) allocations to commodities are more likely in this stage. Property may also perform well over this period. It may even be beneficial to shift weightings towards the overall market (via the index) in order to spread risk. 19

Cycle Stage 4: Downturn In Stage 4 of the AASE cycle the economy is growing at a slower pace as measured economic activity has peaked and begins to weaken. At this time a defensive posture is warranted. In some economies this can mean switching out of equities altogether or rotating into very defensive sectors such as utilities and healthcare. Allocations to commodities (either directly or via equities) are typically a liability in this stage as de-stocking in manufacturing industries has dramatic effects on commodity prices, and so weightings here are typically zero. Bonds and cash generally assume greater importance in this stage. For investors what this means is that changes in money supply can indicate many months ahead the stages of the economic cycle and those assets that have performed best in those stages. 20

*Notes Allocation towards asset classes is illustrated below. Sector allocations are equally weighted USA Eurozone Japan Australia Stage 1 Stage 2 Stage 3 Stage 4 Sectors 30% 90% 50% 50% Commodity Sectors - 10% 50% - 70% - - 50% Sectors 20% 90% 70% 50% Commodity Sectors - 10% 30% - 80% - - 50% Sectors 20% 90% 80% 50% Commodity Sectors - 10% 20% - 80% - - 50% Sectors 30% 90% 70% 50% Commodity Sectors - 10% 30% - 70% - - 50% Assumed transactions costs: 0.25%. Proforma allocations of assets as indicated by the AASE process. Allocations across stock sectors. Equity Sector Sources: - S&P500 Sectors (USA) - MSCI EMU Sectors ( Eurozone) - S&P/Topix Sectors (Japan) - S&P/ASX200 Sectors (Australia) No rebalancing unless sector allocations changed. Sectors defined as: All Countries Consumer Discretionary Consumer Staples Healthcare Industrials Basic Materials Energy IT Telecommunication Services Financials Utilities 21

This analysis does not represent an actual investment portfolio but rather the application of the AASE process to historical data. This is for information only and is not investment advice. No action should be taken based on this analysis. IMPORTANT NOTICE This document is an economic research document. Neither this document, nor its author or publisher, provides opinion, investment advice or financial product advice. This information is not intended to influence any investment decision. Neither this document, nor its author or publisher, seek to procure or solicit investment in, or influence any decision in relation to, any asset, asset class, instrument or security. No investment action should be taken based on any information contained in this publication. Readers should obtain information regarding investment and financial products from a person licensed to provide advice in relation to investments and financial products. This document is not intended to be published in any jurisdiction where such publication would contravene any law or regulation. By continuing to read this document you acknowledge and agree to the above and that no action of any kind shall lie against any author or publisher of this document for any reason whatsoever. MORE INFORMATION For more information please contact AAS Economics info@aasecon.com 22