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An Update on Global Financial Markets

Welcome

Friday, May 15th 12pm CDT

Altair Advisers

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Speakers

Jason M. Laurie, CFA, CFP®Managing Director & CIO

Altair Advisers

David J. Lin, CFADirector of Investment Research

Altair Advisers

2,000

2,200

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3,000

3,200

3,400

3,600

January February March April May

Stocks Stabilize Following Plunge4

See disclosures at end of document. Sources: Morningstar, Altair Advisers

January 1, 2020 – May 14, 2020

S&P 500 hits all-time high

First COVID-19 death reported in the U.S.

S&

P 50

0 In

dex

Leve

l

U.S. passes $2T stimulus package

Fed unveils additional $2.3T stimulus package

Additional $484B fiscal stimulus package signed

by President Trump

Fed announces unlimited monetary support

5

See disclosures at end of document. Sources: Morningstar, Altair Advisers

Recovery Has Been Uneven

YTD PerformanceJanuary 1, 2020 – May 14, 2020

Asset Class (ETF) YTD (%)

U.S. Large Cap (S&P 500) -11.1

U.S. Small Cap (Russell 2000) -25.4

International Developed Equities (MSCI EAFE)

-21.2

Emerging Markets Equities (MSCI Emerging Markets)

-18.9

U.S. REITs (Vanguard REIT Index Fund)

-25.0

U.S. Taxable Bonds (Vanguard Total Bond Market)

5.0

Municipal Bonds (National Muni Bond) -0.1

As of 5/14/20

-50.0

-40.0

-30.0

-20.0

-10.0

0.0

10.0

1/1 1/15 1/29 2/12 2/26 3/11 3/25 4/8 4/22 5/6

Tota

l Ret

urn

(%)

U.S. Large Cap U.S. Small Cap International DevelopedEmerging Markets U.S. REITs U.S. Taxable BondsMunicipal Bonds

0% 10% 20% 30% 40%

All Other Categories

Local government

Professional andbusiness services

Manufacturing

Health care

Other services

Arts, entertainment,and recreation

Retail trade

Accommodation andfood services

Pain Most Prevalent in Job Market6

Tota

l Em

ploy

ees,

Non

farm

Pay

rolls

(Mill

ions

)

April 2010 – April 2020

See disclosures at end of document. Sources: St. Louis Federal Reserve, Altair Advisers

120

125

130

135

140

145

150

155

160A

pr-1

0D

ec-1

0A

ug-1

1A

pr-1

2D

ec-1

2A

ug-1

3A

pr-1

4D

ec-1

4A

ug-1

5A

pr-1

6D

ec-1

6A

ug-1

7A

pr-1

8D

ec-1

8A

ug-1

9A

pr-2

0

Composition of April Job Losses

54% of losses directly tied to shutdown of consumer

activity

-35.0

-30.0

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

Q1'15

Q2'15

Q3'15

Q4'15

Q1'16

Q2'16

Q3'16

Q4'16

Q1'17

Q2'17

Q3'17

Q4'17

Q1'18

Q2'18

Q3'18

Q4'18

Q1'19

Q2'19

Q3'19

Q4'19

Q1'20

Q2'20

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GDP Drawdown Will Be Drastic

See disclosures at end of document. Sources: St. Louis Federal Reserve, New York Federal Reserve, Atlanta Federal Reserve

Q1 2015 – Q2 2020

Ann

ualiz

ed P

erce

nt C

hang

e in

Rea

l GD

P

Fed GDP estimates

8

See disclosures at end of document. Source: Noah Kroese Illustration for Altair Advisers

A Bridge to Recovery

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2008 2020

Fede

ral R

eser

ve B

alan

ce S

heet

Gro

wth

as

% o

f GD

P P

er Y

ear

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2008 2020

Fisc

al S

timul

us a

s %

of

GD

P P

er Y

ear

9

Stimulus Dwarfs 2008 Amount

See disclosures at end of document. Sources: Strategas, Altair Advisers

Global Financial Crisis COVID-19 Pandemic

1.1%

9.9%

4.5%

12.3%

26.5%

Fiscal Response Monetary Response

Projected Balance Sheet Growth For

Remainder of 2020

10

See disclosures at end of document. Source: St. Louis Federal Reserve

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Consumer Price Index2000 – 2020

No Near-Term Inflation ConcernYe

ar o

ver y

ear p

erce

nt c

hang

e, m

onth

ly

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Largest Sectors Drive Market

See disclosures at end of document. Sources: Standard & Poor’s, Morningstar, Altair Advisers

Tech + Health Care + Communication Services

= 52% of Index

S&P 500 Sector PerformanceJanuary 1, 2020 – May 14, 2020

S&P 500 Sector WeightsAs of April 30th

-40.0 -30.0 -20.0 -10.0 0.0 10.0

Energy

Financials

Industrials

Real Estate

Materials

Utilities

Consumer Staples

Consumer Discretionary

Communication Services

Health Care

Information Technology

Total Return (%)

Energy

Materials

Industrials

Utilities

Consumer Staples

Financials

Health Care

Information Technology

Communication Services

Consumer Discretionary

Real Estate

12

Top Holdings Outperform

See disclosures at end of document. Sources: Morningstar, Altair Advisers

S&P 500 Top 5 PositionsJanuary 1, 2020 – May 14, 2020

5.8% 5.5% 4.2% 3.4% 2.1%Weight in S&P 500

= 21%

14.8

6.0

29.3

1.4 0.80.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Microsoft Apple Amazon Alphabet Facebook

Tota

l Ret

urn

(%)

13

See disclosures at end of document. Source: St. Louis Federal Reserve

Corporate Credit Spreads

Developing Opportunities

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

AA Corporates BBB Corporates High Yield CCC & Unrated

December 31 March 23 May 13

Yiel

d sp

read

ove

r Tre

asur

ies

(%)

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Economic data should bottom in a historically bad second quarter and then begin improving as stay-at-home restrictions ease.

U.S. monetary and fiscal aid far exceeds the government’s 2008 response and can bridge the economic gap temporarily.

The disconnect between markets and the economy represents investors’ longer-term optimism; the near term hinges on COVID-19 trends and the success of re-openings.

A handful of giant tech companies have driven the market higher this spring and some longer-term trends also are taking shape.

We have no near-term concern with inflation and it may not present a risk longer-term despite unprecedented debt levels.

Continuing fallout of the pandemic is creating additional opportunities, including dislocation in corporate credit.

Key Takeaways

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Thank You!

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© 2020 Altair Advisers LLC 5-14

The material shown is for informational purposes only. Past performance is not indicative of future performance, and all investments are subject to the risk of loss. Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, and actual results may differ materially from those anticipated in forward-looking statements. As a practical matter, no entity is able to accurately and consistently predict future market activities. Information presented herein may incorporate Altair Advisers' opinions as of the date of this publication, is subject to change without notice and should not be considered as a solicitation to buy or sell any security. While efforts are made to ensure information contained herein is accurate, Altair Advisers cannot guarantee the accuracy of all such information presented. Material contained in this publication should not be construed as accounting, legal, or tax advice.

ETFs selected by Altair are intended to approximate performance of respective asset class in lieu of an established index. Altair has no relationship with the ETFs selected.

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© 2020 Altair Advisers LLC. All Rights Reserved.

Disclosures17