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New England Investment and Retirement Group's Quarterly Considerations Ending June 30th, 2017

NEIRG
NEIRG

New England Investment and Retirement Group is pleased to present the Quarterly Considerations ending June 30th, 2017. Within this quarter’s considerations you’ll find a market snapshot of fixed income, equities and real assets; a U.S. economic update reviewing the GDP, inflation, and unemployment rates; a global economic update reviewing the economies of Spain, Germany, Italy, France, and Japan; reports on global and U.S. fixed income; quarterly domestic and international equity sector returns; financial markets performance and more.

1 of 14
FINANCIAL PLANNING GUIDE
2017
500 West Madison Street, Suite 1700 | Chicago, IL 60661 | 312.853.1000
All material and information is intended for DiMeo Schneider & Associates, L.L.C. business only. Any use or public dissemination outside firm business is prohibited. Information is obtained from a variety of
sources which are believed though not guaranteed to be accurate. This presentation does not represent a specific investment recommendation. Please consult with your advisor, attorney and accountant, as
appropriate, regarding specific advice. DiMeo Schneider & Associates, L.L.C. does not provide tax or legal advice.
Our mission is to help our clients pursue financial independence
by providing unbiased objective guidance. We bring value
through communication, education, and exceptional service..
1
Quarterly Considerations
June 30, 2017
Please reference the disclosures at the end of this presentation for additional information related to the material presented.
Plan Sponsors
Right Direction - The expense ratio of equity mutual funds in 401(k) plans has fallen by over 40% from the 83 basis points reported in 2003 to 48 basis points in
2016, according to an Investment Company Institute survey.1
Nonprofit Organizations
403(b) in Focus - 403(b) lawsuits continue to rise with several large universities, including Washington University in St. Louis, University of Chicago and Princeton
University forced to defend fiduciary oversight. Please ask us about 403(b) best practices.
Private Clients
Trouble in Muni Land? - Deteriorating fiscal situations in Puerto Rico and Illinois have garnered significant press as of late, and created volatility in the municipal
bond market. However, as is often the case, the financial media’s predictions of doom and gloom might prove to be overblown at this point. We partner with a
number of highly specialized and highly sophisticated municipal bond managers doing their own credit research to ensure muni portfolios are insulated from
problem areas to the greatest extent possible. Please contact us if you have any questions about potential risks in your muni bond portfolio.
Something From Nothing - Prior to the Federal Reserve’s recent rate increases, there was essentially no way to safely generate some interest income on short-
term deposits. Until recently, money market funds were earning essentially nothing. Following its third rate hike since December 2016, the Fed is now targeting a
range of 1.00% to 1.25% for its benchmark Fed Funds Rate. As a result of the recent rate increases, short-term deposit rates have also increased, albeit
modestly. We have helped private clients and business owners implement ‘enhanced cash’ solutions that target higher yields. Please contact us if you are
interested in learning more about higher yielding options for excess cash.
Half-Time Adjustments - Mid-year is a good time to review your current investment strategy as it relates to potential year-end tax liability. This is even more
important this year to ensure a sound understanding of your tax position in light of tax reform negotiations expected to take place in Washington. We can help
optimize your personal portfolio from an after-tax perspective and can also help navigate any potential tax changes that take place prior to year-end.
Confusion Reigns - Do you know if your financial advisor is a fiduciary? On June 9th, the initial phasing-in of the requirements under the DoL’s ‘Fiduciary Rule’
officially started. Once every mandate of the rule has been phased in, all financial professionals working with retirement plans or accounts will be legally and
ethically required to adhere to a fiduciary standard of care. While we are pleased the DoL has finally mandated this, we act as a fiduciary on behalf of clients that
we have served since our founding. Understanding if your current advisor is a fiduciary and the standard of care under which he/she is required to operate can be
confusing. We are happy to discuss your current financial advisory arrangement and ways we might enhance ongoing oversight.
1http://www.pionline.com/article/20170615/ONLINE/170619918/ici-mutual-fund-fees-continue-to-decline-for-401k-plans
QUARTERLY
CONSIDERATIONS
Please reference the disclosures at the end of this presentation for additional information related to the material presented.
MARKET SNAPSHOT
Please reference the disclosures at the end of this presentation for additional information related to the material presented.
Fixed Income
• High yield remained one of the strongest
performing fixed income asset classes as
investors continued to demand risk-
oriented assets.
• The yield on the 10-Year U.S. Treasury
decreased despite the increase in the
federal funds rate at the June FOMC
meeting.
• Emerging markets debt remained the best
performing fixed income asset class as the
U.S. dollar continued to weaken.
Equities
• Larger cap U.S. equity securities
outperformed their small-cap counterparts
in the second quarter.
• Within developed international markets,
Europe led the charge broadly
outperforming developed Asia.
• Emerging markets continued its strong
year-to-date performance with another
positive quarter led by the far east
countries of China, South Korea and
Taiwan.
Real Assets
• Both domestic and global REITs finished the
quarter with positive returns, outperforming
MLPs and commodities.
• Commodities declined for the quarter
following a consistent fall in oil prices, which
was partially the result of OPEC’s decision to
extend production cuts after its meeting in
May.
• MLPs fell sharply in the second quarter due in
part to the continued strain on energy
markets.
-0.4%
1.2% 1.4%
2.2%
0.6%
3.5% 3.6% 3.1%
2.5%
6.4% 6.4%
1.5%
3.6%
-3.0%
0.2%
-6.4%
0.9%
3.2%
2.3%
4.9%
0.6%
6.1%
10.4%
9.3%
5.0%
14.2%
18.6%
2.7%
6.6%
-5.3%
3.7%
-2.7%
-10%
-5%
0%
5%
10%
15%
20%
Bloomberg
Barclays U.S.
TIPS
Bloomberg
Barclays
Muni Bond 5
Year
Bloomberg
Barclays U.S.
Aggregate
Bloomberg
Barclays U.S.
Corp High
Yield
Bloomberg
Barclays
Global Agg
ex. US
(Hedged)
Bloomberg
Barclays
Global Agg
ex. US
(Unhedged)
JPMorgan
GBI-EM
Global
Diversified
(Unhedged)
S&P 500 Russell 2000 MSCI EAFE MSCI EM NAREIT
Equity REITs
S&P
Developed
World
Property
Bloomberg
Commodity
Index
HFRI Fund of
Funds
Composite
Alerian MLP
Index
TotalReturn
Source: Bloomberg
Fixed Income Equities Alternatives
Key: Left Bar: Recent Quarter Return
Right BaRight Bar: Year-To-Date Return
Total return as of 06/30/2017
U.S. ECONOMIC UPDATE
2.1%
-6%
-4%
-2%
0%
2%
4%
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
YoY%Change(SA)
U.S. Real GDP Growth
(Seasonally Adjusted - YoY % Change)
Real GDP Growth % YoY
Sources: Bloomberg & Bureau of Economic Analysis
2.4%
2.0%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
YoY%Change
U.S. Inflation (YoY % Change)
CPI CPI Core
Sources: Bloomberg & The Bureau of Labor Statistics
30-Jun % Chg MoM 30-Jun % Chg MoM
4.4% 0.1% 118.9 1.1%
31-May % Chg MoM 31-May % Chg MoM
127.0 0.3% $13.2T 0.1%
31-May % Chg MoM 31-May % Chg MoM
1.09M -5.5% $16.5T 0.4%
30-Jun % Chg MoM 31-May % Chg MoM
57.8 5.3% $474B -0.3%
Consumer Confidence
Retail Sales
Unemployment Rate
Leading Indicators
ISM Manufacturing PMI
U.S. Personal IncomeHousing Starts
Consumer Spending
• U.S. GDP increased at an annual quarter-over-quarter rate of
1.4% in the first quarter, following a 2.1% gain in the fourth
quarter. While consumer spending grew at its slowest pace
since 2013, there were signs of strength in areas such as
housing, financial services and healthcare spending.
• The U.S. consumer continues to enjoy relatively benign
inflation that remains within range of the Fed’s 2% target.
• Unemployment declined from 4.5% in March to 4.4% in June.
The labor force participation rate decreased to 62.8%, falling
by 0.2% during the quarter.
Please reference the disclosures at the end of this presentation for additional information related to the material presented.
Source: Bloomberg
GLOBAL ECONOMIC UPDATE
2.1% 1.9% 2.0%
1.7%
1.1% 1.2%
3.0%
0.4%
0.9%
1.3%
6.9%
-0.4%
0.5%
5.3%
2.4%
1.5%
2.1%
1.6%
1.2%
1.4%
2.3%
1.7%
0.6% 0.2%
0.9%
4.6% 4.3%
2.6%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
U.S. Eurozone U.K. Germany France Italy Spain Greece Switzerland Japan China Brazil Russia India
YoY%Change
Global Real GDP & Inflation Rates (YoY)
Source: Bloomberg Key: Flagged bars: YoY Real GDP growth
Blue bars: YoY CPI change
March 31, 2017As of:
• Spain expanded at the fastest rate among major European economies. Germany grew at a respectable pace, performing in-line with
the overall Eurozone growth rate of 0.6% on an annual quarter-over-quarter basis. Growth in Italy and France was positive but
subdued. No economy in the Eurozone contracted.
• The European Central Bank left interest rates unchanged and maintained its bond purchase program but scaled back the pace of its
asset purchases from €80 billion to €60 billion effective April 2017. On the political front, UK Prime Minister Theresa May’s gamble to
call an early election backfired as the Conservative Party lost its majority resulting in a hung parliament, which forced them to form a
coalition with Northern Ireland’s Democratic Unionist Party (DUP).
• The Bank of Japan left its ultra-accommodative monetary policy unchanged but raised its economic assessment, signaling the central
bank may not pursue additional stimulus measures. Japan’s GDP rose 0.3% on an annual quarter-over-quarter basis, marking the fifth
straight quarter of growth and the longest stretch of positive expansion in more than a decade.
Please reference the disclosures at the end of this presentation for additional information related to the material presented.
GLOBAL FIXED INCOME
1.2%
-0.4%
1.2% 1.4%
0.9% 0.6%
1.3%
2.5% 2.2%
4.4%
0.6%
3.5% 3.6%
1.9%
0.9%
3.2%
2.3%
1.3% 1.1%
2.2%
3.8%
4.9%
6.0%
0.6%
6.1%
10.4%
-2%
0%
2%
4%
6%
8%
10%
12%
U.S. Treasuries U.S. TIPS U.S. Muni 5 Year U.S. Aggregate U.S. MBS U.S. ABS U.S. CMBS U.S. Corporates U.S. High Yield U.S. Long Gov /
Credit
Global Agg ex.
U.S. Hedged
Global Agg ex.
U.S. Unhedged
JPMorgan GBI-
EM Global
Diversified
Unhedged
TotalReturn Fixed Income Sector Returns
QTR YTD
Sources: Bloomberg, Barclays, & JPMorgan
All indices are Bloomberg Barclays indices except where noted
Total return as of 06/30/2017
6.7%
-0.9%
3.7%
3.2%
1.5%
2.7%
4.5%
0.8%
7.9%
3.9%
5.2%
12.6%
2.4%
3.5%
6.0% 6.3%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
Euro Japanese
Yen
British
Pound
Mexican
Peso
Chinese
Yuan
Canadian
Dollar
Swiss Franc Australian
Dollar
TotalReturn
Currency Returns vs. U.S. Dollar
QTR YTDSource: Bloomberg
Total return as of 06/30/2017
• Fixed income markets continued to generate positive returns
during the quarter. As inflation expectations continued to
wane, Treasuries outperformed TIPS by approximately 160
basis points.
• Debt in international and emerging markets, specifically
unhedged strategies, continued to outperform broader fixed
income markets as the dollar retraced much of the gains it had
experienced in the first quarter. Longer maturity bonds in the
U.S. outperformed shorter maturity debt as the yield curve
flattened following an interest rate hike in June.
• Global currencies rallied against the dollar during the quarter,
with the exception of the Japanese yen, as gridlock in
Washington regarding health care and tax reform tempered
bullish dollar speculation.
Please reference the disclosures at the end of this presentation for additional information related to the material presented.

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New England Investment and Retirement Group's Quarterly Considerations Ending June 30th, 2017

  • 1. FINANCIAL PLANNING GUIDE 2017 500 West Madison Street, Suite 1700 | Chicago, IL 60661 | 312.853.1000 All material and information is intended for DiMeo Schneider & Associates, L.L.C. business only. Any use or public dissemination outside firm business is prohibited. Information is obtained from a variety of sources which are believed though not guaranteed to be accurate. This presentation does not represent a specific investment recommendation. Please consult with your advisor, attorney and accountant, as appropriate, regarding specific advice. DiMeo Schneider & Associates, L.L.C. does not provide tax or legal advice. Our mission is to help our clients pursue financial independence by providing unbiased objective guidance. We bring value through communication, education, and exceptional service.. 1 Quarterly Considerations June 30, 2017 Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 2. Plan Sponsors Right Direction - The expense ratio of equity mutual funds in 401(k) plans has fallen by over 40% from the 83 basis points reported in 2003 to 48 basis points in 2016, according to an Investment Company Institute survey.1 Nonprofit Organizations 403(b) in Focus - 403(b) lawsuits continue to rise with several large universities, including Washington University in St. Louis, University of Chicago and Princeton University forced to defend fiduciary oversight. Please ask us about 403(b) best practices. Private Clients Trouble in Muni Land? - Deteriorating fiscal situations in Puerto Rico and Illinois have garnered significant press as of late, and created volatility in the municipal bond market. However, as is often the case, the financial media’s predictions of doom and gloom might prove to be overblown at this point. We partner with a number of highly specialized and highly sophisticated municipal bond managers doing their own credit research to ensure muni portfolios are insulated from problem areas to the greatest extent possible. Please contact us if you have any questions about potential risks in your muni bond portfolio. Something From Nothing - Prior to the Federal Reserve’s recent rate increases, there was essentially no way to safely generate some interest income on short- term deposits. Until recently, money market funds were earning essentially nothing. Following its third rate hike since December 2016, the Fed is now targeting a range of 1.00% to 1.25% for its benchmark Fed Funds Rate. As a result of the recent rate increases, short-term deposit rates have also increased, albeit modestly. We have helped private clients and business owners implement ‘enhanced cash’ solutions that target higher yields. Please contact us if you are interested in learning more about higher yielding options for excess cash. Half-Time Adjustments - Mid-year is a good time to review your current investment strategy as it relates to potential year-end tax liability. This is even more important this year to ensure a sound understanding of your tax position in light of tax reform negotiations expected to take place in Washington. We can help optimize your personal portfolio from an after-tax perspective and can also help navigate any potential tax changes that take place prior to year-end. Confusion Reigns - Do you know if your financial advisor is a fiduciary? On June 9th, the initial phasing-in of the requirements under the DoL’s ‘Fiduciary Rule’ officially started. Once every mandate of the rule has been phased in, all financial professionals working with retirement plans or accounts will be legally and ethically required to adhere to a fiduciary standard of care. While we are pleased the DoL has finally mandated this, we act as a fiduciary on behalf of clients that we have served since our founding. Understanding if your current advisor is a fiduciary and the standard of care under which he/she is required to operate can be confusing. We are happy to discuss your current financial advisory arrangement and ways we might enhance ongoing oversight. 1http://www.pionline.com/article/20170615/ONLINE/170619918/ici-mutual-fund-fees-continue-to-decline-for-401k-plans QUARTERLY CONSIDERATIONS Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 3. MARKET SNAPSHOT Please reference the disclosures at the end of this presentation for additional information related to the material presented. Fixed Income • High yield remained one of the strongest performing fixed income asset classes as investors continued to demand risk- oriented assets. • The yield on the 10-Year U.S. Treasury decreased despite the increase in the federal funds rate at the June FOMC meeting. • Emerging markets debt remained the best performing fixed income asset class as the U.S. dollar continued to weaken. Equities • Larger cap U.S. equity securities outperformed their small-cap counterparts in the second quarter. • Within developed international markets, Europe led the charge broadly outperforming developed Asia. • Emerging markets continued its strong year-to-date performance with another positive quarter led by the far east countries of China, South Korea and Taiwan. Real Assets • Both domestic and global REITs finished the quarter with positive returns, outperforming MLPs and commodities. • Commodities declined for the quarter following a consistent fall in oil prices, which was partially the result of OPEC’s decision to extend production cuts after its meeting in May. • MLPs fell sharply in the second quarter due in part to the continued strain on energy markets. -0.4% 1.2% 1.4% 2.2% 0.6% 3.5% 3.6% 3.1% 2.5% 6.4% 6.4% 1.5% 3.6% -3.0% 0.2% -6.4% 0.9% 3.2% 2.3% 4.9% 0.6% 6.1% 10.4% 9.3% 5.0% 14.2% 18.6% 2.7% 6.6% -5.3% 3.7% -2.7% -10% -5% 0% 5% 10% 15% 20% Bloomberg Barclays U.S. TIPS Bloomberg Barclays Muni Bond 5 Year Bloomberg Barclays U.S. Aggregate Bloomberg Barclays U.S. Corp High Yield Bloomberg Barclays Global Agg ex. US (Hedged) Bloomberg Barclays Global Agg ex. US (Unhedged) JPMorgan GBI-EM Global Diversified (Unhedged) S&P 500 Russell 2000 MSCI EAFE MSCI EM NAREIT Equity REITs S&P Developed World Property Bloomberg Commodity Index HFRI Fund of Funds Composite Alerian MLP Index TotalReturn Source: Bloomberg Fixed Income Equities Alternatives Key: Left Bar: Recent Quarter Return Right BaRight Bar: Year-To-Date Return Total return as of 06/30/2017
  • 4. U.S. ECONOMIC UPDATE 2.1% -6% -4% -2% 0% 2% 4% Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 YoY%Change(SA) U.S. Real GDP Growth (Seasonally Adjusted - YoY % Change) Real GDP Growth % YoY Sources: Bloomberg & Bureau of Economic Analysis 2.4% 2.0% -2% -1% 0% 1% 2% 3% 4% 5% 6% Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 YoY%Change U.S. Inflation (YoY % Change) CPI CPI Core Sources: Bloomberg & The Bureau of Labor Statistics 30-Jun % Chg MoM 30-Jun % Chg MoM 4.4% 0.1% 118.9 1.1% 31-May % Chg MoM 31-May % Chg MoM 127.0 0.3% $13.2T 0.1% 31-May % Chg MoM 31-May % Chg MoM 1.09M -5.5% $16.5T 0.4% 30-Jun % Chg MoM 31-May % Chg MoM 57.8 5.3% $474B -0.3% Consumer Confidence Retail Sales Unemployment Rate Leading Indicators ISM Manufacturing PMI U.S. Personal IncomeHousing Starts Consumer Spending • U.S. GDP increased at an annual quarter-over-quarter rate of 1.4% in the first quarter, following a 2.1% gain in the fourth quarter. While consumer spending grew at its slowest pace since 2013, there were signs of strength in areas such as housing, financial services and healthcare spending. • The U.S. consumer continues to enjoy relatively benign inflation that remains within range of the Fed’s 2% target. • Unemployment declined from 4.5% in March to 4.4% in June. The labor force participation rate decreased to 62.8%, falling by 0.2% during the quarter. Please reference the disclosures at the end of this presentation for additional information related to the material presented. Source: Bloomberg
  • 5. GLOBAL ECONOMIC UPDATE 2.1% 1.9% 2.0% 1.7% 1.1% 1.2% 3.0% 0.4% 0.9% 1.3% 6.9% -0.4% 0.5% 5.3% 2.4% 1.5% 2.1% 1.6% 1.2% 1.4% 2.3% 1.7% 0.6% 0.2% 0.9% 4.6% 4.3% 2.6% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% U.S. Eurozone U.K. Germany France Italy Spain Greece Switzerland Japan China Brazil Russia India YoY%Change Global Real GDP & Inflation Rates (YoY) Source: Bloomberg Key: Flagged bars: YoY Real GDP growth Blue bars: YoY CPI change March 31, 2017As of: • Spain expanded at the fastest rate among major European economies. Germany grew at a respectable pace, performing in-line with the overall Eurozone growth rate of 0.6% on an annual quarter-over-quarter basis. Growth in Italy and France was positive but subdued. No economy in the Eurozone contracted. • The European Central Bank left interest rates unchanged and maintained its bond purchase program but scaled back the pace of its asset purchases from €80 billion to €60 billion effective April 2017. On the political front, UK Prime Minister Theresa May’s gamble to call an early election backfired as the Conservative Party lost its majority resulting in a hung parliament, which forced them to form a coalition with Northern Ireland’s Democratic Unionist Party (DUP). • The Bank of Japan left its ultra-accommodative monetary policy unchanged but raised its economic assessment, signaling the central bank may not pursue additional stimulus measures. Japan’s GDP rose 0.3% on an annual quarter-over-quarter basis, marking the fifth straight quarter of growth and the longest stretch of positive expansion in more than a decade. Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 6. GLOBAL FIXED INCOME 1.2% -0.4% 1.2% 1.4% 0.9% 0.6% 1.3% 2.5% 2.2% 4.4% 0.6% 3.5% 3.6% 1.9% 0.9% 3.2% 2.3% 1.3% 1.1% 2.2% 3.8% 4.9% 6.0% 0.6% 6.1% 10.4% -2% 0% 2% 4% 6% 8% 10% 12% U.S. Treasuries U.S. TIPS U.S. Muni 5 Year U.S. Aggregate U.S. MBS U.S. ABS U.S. CMBS U.S. Corporates U.S. High Yield U.S. Long Gov / Credit Global Agg ex. U.S. Hedged Global Agg ex. U.S. Unhedged JPMorgan GBI- EM Global Diversified Unhedged TotalReturn Fixed Income Sector Returns QTR YTD Sources: Bloomberg, Barclays, & JPMorgan All indices are Bloomberg Barclays indices except where noted Total return as of 06/30/2017 6.7% -0.9% 3.7% 3.2% 1.5% 2.7% 4.5% 0.8% 7.9% 3.9% 5.2% 12.6% 2.4% 3.5% 6.0% 6.3% -2% 0% 2% 4% 6% 8% 10% 12% 14% Euro Japanese Yen British Pound Mexican Peso Chinese Yuan Canadian Dollar Swiss Franc Australian Dollar TotalReturn Currency Returns vs. U.S. Dollar QTR YTDSource: Bloomberg Total return as of 06/30/2017 • Fixed income markets continued to generate positive returns during the quarter. As inflation expectations continued to wane, Treasuries outperformed TIPS by approximately 160 basis points. • Debt in international and emerging markets, specifically unhedged strategies, continued to outperform broader fixed income markets as the dollar retraced much of the gains it had experienced in the first quarter. Longer maturity bonds in the U.S. outperformed shorter maturity debt as the yield curve flattened following an interest rate hike in June. • Global currencies rallied against the dollar during the quarter, with the exception of the Japanese yen, as gridlock in Washington regarding health care and tax reform tempered bullish dollar speculation. Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 7. U.S. FIXED INCOME • Rates rose in June following the Fed’s decision to raise interest rates but not enough to overtake the steadily declining yields through much of the quarter resulting in the 10-Year Treasury retreating nine basis points to finish the quarter at 2.30%. • Concerns around waning inflation expectations have cast doubt on the pace and magnitude of future rate hikes this year. • Breakeven inflation rates fell approximately 30 basis points to finish at 1.7% as inflation expectations continued to fall during the quarter. • Credit spreads continued to compress within high yield while investment grade spreads were fairly consistent. 0% 1% 2% 3% 4% 3 Month 6-Month 2-Year 5-Year 10-Year 30-Year Yield U.S. Yield Curve Dec-16 Mar-17 Jun-17Source: Bloomberg 1.7% 2.3% 0.6% -2% -1% 0% 1% 2% 3% 4% 5% 6% Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Rate 10-Year Breakeven Inflation Rate 10-Year Breakeven Inflation 10-Year Treasury Yield 10-Year TIPS Yield Source: Bloomberg As of 06/30/2017 0.3% 0.9% 2.3% 0% 2% 4% 6% 8% 10% 12% 14% Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Yield Credit Spreads Above Treasuries Agency Spread A Spread BB Spread Sources: Bloomberg & Barclays As of 06/30/2017 Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 8. 3.1% 7.7% 6.9% 4.7% 9.9% 4.0% 5.2% 1.6% 8.7% 10.7% 2.9% -6.6% -9.8% -1.6% 7.3% 0.8% 2.3% 9.5% 15.9% 16.0% 10.0% 17.9% 11.3% 10.1% 13.6% 23.3% 25.0% 20.5% 3.1% -14.0% 10.3% 24.5% 3.5% 5.2% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% U.S. Europe Germany United Kingdom France Pacific Japan Pacific (ex. Japan) EM Asia China India Brazil Russia EM Latin America Mexico Canada EM EMEA TotalReturn MSCI Equity Returns by Country / Region QTR YTDSources: Bloomberg & MSCI Total return as of 06/30/2017 GLOBAL EQUITY MARKETS U.S. Equities: • U.S. equities ended the quarter higher across market capitalizations as each pull back was met with persistent demand. Small cap securities continued to lag their large- and mid-cap counterparts. Growth outperformed value across market capitalizations. • International developed markets were positive on the backs of a strong April and May followed by a pull back in June. Europe posted the strongest returns among developed markets. • Emerging markets added to year-to-date performance but individual country results were mixed. The Asia Pacific region dominated performance and helped balance out the negative returns out of Brazil and Russia. Please reference the disclosures at the end of this presentation for additional information related to the material presented. QTR YTD QTR YTD QTR YTD Source: Bloomberg Total return as of 06/30/2017 LargeMidSmall 14.0 5.2 8.0 4.2 11.4 2.5 9.3 0.7 0.5 4.7 1.4 2.7 4.4 10.0 Value Core Growth 1.3 3.1 4.7 5.0
  • 9. QUARTERLY EQUITY SECTOR RETURNS 3.0% 1.1% -7.0% 4.2% 7.1% 3.2% 4.6% 3.7% -1.7% 2.3% -2.8% -17.8% 1.5% 9.0% -1.4% 3.6% 4.0% 4.5% -20% -15% -10% -5% 0% 5% 10% 15% Consumer Discretionary Consumer Staples Energy Financial Services Health Care Materials & Processing Producer Durables Technology Utilities TotalReturn Domestic Equity Sector Returns Domestic Large Cap (Russell 1000) Domestic Small Cap (Russell 2000)Sources: Bloomberg & Russell Total return as of 06/30/2017 4.9% 7.9% -0.4% 7.4% 4.7% 7.4% 7.1% 9.5% 3.4% 5.0% 7.5% 8.4% 5.2% -4.8% 4.1% 11.5% 4.4% 3.9% 15.5% -0.4% 2.1% -1.6% -10% -5% 0% 5% 10% 15% 20% Consumer Discretionary Consumer Staples Energy Financials Real Estate Health Care Industrials Information Technology Materials Telecommunication Services Utilities TotalReturn International Equity Sector Returns International (MSCI EAFE) Emerging Markets (MSCI EM) Sources: Bloomberg & MSCI Total return as of 06/30/2017 Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 10. REAL ASSETS 1.5% 0.7% 1.0% 5.7% -7.6% 0.9% 5.2% 4.7% 2.7% 0.5% 2.6% 6.0% -12.0% -1.1% 12.5% 16.0% -15% -10% -5% 0% 5% 10% 15% 20% Equity Index Diversified Office Apartment Retail Lodging & Resorts Health Care Mortgage TotalReturn Domestic REIT Sector Returns QTR YTDSources: Bloomberg & NAREIT Total return as of 06/30/2017 -3.0% -9.7% 4.5% -1.2% 11.2% -9.8% -3.2% -14.3% -5.3% -20.0% 3.0% 6.3% 11.4% -18.2% 6.3% -18.4% -25% -20% -15% -10% -5% 0% 5% 10% 15% Bloomberg Commodity Total Return Energy Grains Industrial Metals Livestock Petroleum Precious Metals Softs TotalReturn Bloomberg Commodity Returns QTR YTDSource: Bloomberg Total return as of 06/30/2017 4.9% 2.0% 0.9% 3.7% 0% 1% 2% 3% 4% 5% 6% 7% 8% Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 %Spread MLPYield Spreads over 10-Year Treasury MLP Spread FTSE NAREIT Equity REIT Spread A-Rated Corporate Spread BBB-Rated Corporate SpreadSource: BloombergSource: Bloomberg As of 06/30/2017 • REITs outperformed MLPs and commodities during the quarter, both of which were in negative territory as a slide in oil and natural gas prices hurt returns. REITs finished in positive territory, extending first quarter gains. • Domestic retail REITs continued to be the major drag on performance, falling 7.6%. International REIT indices continued to outperform domestic during the second quarter. • Commodities were pressured by weakness among energy and soft commodities. Livestock and grains performed well heading into the summer months, but were not enough to combat the heavy index weight to petroleum. • MLPs finished lower for the quarter as both lower oil and natural gas, as well as broad concerns over slower growth in yield going forward, hindered performance. Following the pullback, however, the yield spread over Treasuries increased for the first time in several quarters to 4.9%. Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 11. 0.2% 1.1% 2.3% 1.8% -0.7% 0.6% 2.6% 3.7% 6.2% 4.3% -0.8% 2.9% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% Fund of Funds Composite Direct Fund Composite* Equity Hedge Event Driven Macro Relative Value TotalReturn QTR YTD Sources: Bloomberg & Hedge Fund Research *Methodology is fund weighted Total return as of 06/30/2017 HEDGE FUNDS • The HFRI Fund Weighted Composite Index advanced +1.1% during the second quarter, including June being the eighth consecutive monthly gain and the 15th gain in the last 16 months. Strong performance occurred in Emerging Markets, Equity Hedge and Healthcare. • Relative Value strategies advanced for the 16th consecutive month in June as the U.S. Federal Reserve raised interest rates, with the HFRI Relative Value Index advancing +0.6% for the quarter and +2.9% YTD. • Led by Activist strategies, the HFRI Event-Driven Index advanced +1.8% during the quarter, bringing its YTD return to +4.3% as positions in Whole Foods, Nestle and General Motors contributed to performance. • Macro strategies declined for the quarter and remain negative YTD as implied volatilities remain near historic lows, though Currency strategies extended strong recent performance. The HFRI Macro Index fell -0.7% percent for the quarter and -0.8%YTD, with negative contributions from quantitative, trend-following CTA strategies. Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 12. Financial Markets Performance Periods greater than one year are annualized Total return as of June 30, 2017 All returns are in U.S. dollar terms Global Fixed Income Markets QTR YTD 1YR 3YR 5YR 7YR 10YR 15YR Bloomberg Barclays 1-3-Month T-Bill 0.2% 0.3% 0.4% 0.2% 0.1% 0.1% 0.5% 1.2% Bloomberg Barclays US TIPS -0.4% 0.9% -0.6% 0.6% 0.3% 2.9% 4.3% 4.9% Bloomberg Barclays Municipal Bond (5 Year) 1.2% 3.2% 0.4% 2.0% 2.1% 2.8% 4.0% 3.7% Bloomberg Barclays US Aggregate 1.4% 2.3% -0.3% 2.5% 2.2% 3.2% 4.5% 4.5% Bloomberg Barclays U.S. Corporate High Yield 2.2% 4.9% 12.7% 4.5% 6.9% 8.2% 7.7% 9.1% Bloomberg Barclays Global Aggregate ex-US Hedged 0.6% 0.6% -0.7% 3.8% 4.0% 3.9% 4.5% 4.4% Bloomberg Barclays Global Aggregate ex-US Unhedged 3.5% 6.1% -3.8% -2.4% -0.4% 1.8% 3.0% 4.6% Bloomberg Barclays U.S. Long Gov / Credit 4.4% 6.0% -1.1% 5.3% 4.3% 6.8% 7.6% 7.2% JPMorgan GBI-EM Global Diversified 3.6% 10.4% 6.4% -2.8% -0.7% 1.9% 4.0% N/A Global Equity Markets QTR YTD 1YR 3YR 5YR 7YR 10YR 15YR S&P 500 3.1% 9.3% 17.9% 9.6% 14.6% 15.4% 7.2% 8.3% Dow Jones Industrial Average 4.0% 9.3% 22.1% 11.0% 13.4% 14.7% 7.6% 8.4% NASDAQ Composite 4.2% 14.8% 28.4% 13.1% 17.5% 18.0% 10.2% 11.2% Russell 3000 3.0% 8.9% 18.5% 9.1% 14.6% 15.3% 7.2% 8.6% Russell 1000 3.1% 9.3% 18.0% 9.2% 14.7% 15.4% 7.3% 8.6% Russell 1000 Growth 4.7% 14.0% 20.4% 11.1% 15.3% 16.5% 8.9% 9.0% Russell 1000 Value 1.3% 4.7% 15.5% 7.3% 13.9% 14.3% 5.5% 8.1% Russell Mid Cap 2.7% 8.0% 16.5% 7.7% 14.7% 15.3% 7.6% 10.5% Russell Mid Cap Growth 4.2% 11.4% 17.0% 7.8% 14.2% 15.2% 7.8% 10.3% Russell Mid Cap Value 1.4% 5.2% 15.9% 7.4% 15.1% 15.3% 7.2% 10.4% Russell 2000 2.5% 5.0% 24.6% 7.3% 13.7% 14.3% 6.9% 9.2% Russell 2000 Growth 4.4% 10.0% 24.4% 7.6% 14.0% 15.1% 7.8% 9.5% Russell 2000 Value 0.7% 0.5% 24.8% 7.0% 13.4% 13.5% 5.9% 8.7% MSCI ACWI 4.5% 11.8% 19.4% 5.4% 11.1% 11.1% 4.3% 7.9% MSCI ACWI ex. U.S. 6.0% 14.5% 21.0% 1.3% 7.7% 7.1% 1.6% 7.4% MSCI EAFE 6.4% 14.2% 20.8% 1.6% 9.2% 8.4% 1.5% 6.8% MSCI EAFE Growth 7.7% 17.0% 16.1% 3.2% 9.6% 9.0% 2.4% 6.7% MSCI EAFE Value 5.1% 11.6% 25.7% 0.0% 8.7% 7.7% 0.5% 6.8% MSCI EAFE Small Cap 8.3% 17.0% 23.6% 6.0% 13.3% 11.8% 3.8% 10.3% MSCI Emerging Markets 6.4% 18.6% 24.2% 1.4% 4.3% 4.2% 2.2% 11.0% Alternatives QTR YTD 1YR 3YR 5YR 7YR 10YR 15YR Consumer Price Index 0.0% 0.4% 1.7% 0.9% 1.3% 1.7% 1.6% 2.1% FTSE NAREIT Equity REITs 1.5% 2.7% -1.7% 8.3% 9.5% 13.2% 6.0% 10.0% S&P Developed World Property x U.S. 5.7% 11.5% 7.7% 2.8% 8.9% 10.0% 1.4% 9.5% S&P Developed World Property 3.6% 6.6% 2.6% 5.1% 9.1% 11.4% 3.1% 9.5% Bloomberg Commodity Total Return -3.0% -5.3% -6.5% -14.8% -9.2% -5.7% -6.5% 0.0% HFRI Fund of Funds Composite 0.2% 2.6% 5.8% 1.3% 3.7% 2.9% 0.8% 3.4% HFRI Fund Weighted Composite 1.1% 3.7% 8.0% 2.6% 4.9% 4.4% 3.0% 5.7% Source: Bloomberg Please reference the disclosures at the end of this presentation for additional information related to the material presented.
  • 13. WHY DIVERSIFY? Please reference the disclosures at the end of this presentation for additional information related to the material presented. Total returns as of 6/30/2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 10yr Annualized Aggregate Bond 5.2% Emerging 79.0% MLP 35.9% MLP 13.9% Emerging 18.6% Small Growth 43.3% REITs 30.1% Large Growth 5.7% Small Value 31.7% Emerging 18.6% Large Growth 8.9% Foreign Bond 4.4% MLP 76.4% Small Growth 29.1% TIPS 13.6% REITs 18.1% Small Blend 38.8% Large Blend 13.7% REITs 3.2% Small Blend 21.3% International 14.2% Small Growth 7.8% Cash 1.8% High Yield 58.2% REITs 27.9% REITs 8.3% Small Value 18.1% Small Value 34.5% Large Value 13.5% Large Blend 1.4% MLP 18.3% Large Growth 14.0% High Yield 7.7% TIPS -2.4% Large Growth 37.2% Small Blend 26.9% Aggregate Bond 7.8% International 17.9% Large Growth 33.5% Large Growth 13.1% Aggregate Bond 0.5% Large Value 17.3% Emerging Debt 10.4% Large Blend 7.2% Emerging Debt -5.2% Small Growth 34.5% Small Value 24.5% High Yield 5.0% Large Value 17.5% Large Value 32.5% Aggregate Bond 6.0% Cash 0.0% High Yield 17.1% Small Growth 10.0% Small Blend 6.9% Hedge Funds -21.4% International 32.5% Emerging 19.2% Foreign Bond 4.4% Emerging Debt 16.8% Large Blend 32.4% Small Growth 5.6% Hedge Funds -0.3% Large Blend 12.0% Large Blend 9.3% REITs 6.0% Balanced -25.8% Balanced 29.9% Commodities 16.8% Large Growth 2.6% Small Blend 16.3% MLP 27.6% Small Blend 4.9% International -0.4% Commodities 11.8% Balanced 6.2% Small Value 5.9% High Yield -26.2% REITs 28.0% Large Growth 16.7% Large Blend 2.1% Large Blend 16.0% International 23.3% MLP 4.8% Small Growth -1.4% Emerging 11.6% Foreign Bond 6.1% MLP 5.7% Small Value -28.9% Small Blend 27.2% Emerging Debt 15.7% Large Value 0.4% High Yield 15.8% Balanced 11.3% Small Value 4.2% TIPS -1.4% Small Growth 11.3% Small Blend 5.0% Large Value 5.6% Small Blend -33.8% Large Blend 26.5% Large Value 15.5% Cash 0.1% Large Growth 15.3% Hedge Funds 9.0% TIPS 3.6% Large Value -3.8% Emerging Debt 9.9% High Yield 4.9% Aggregate Bond 4.5% Commodities -35.6% Emerging Debt 22.0% High Yield 15.1% Balanced -0.4% Small Growth 14.6% High Yield 7.4% Balanced 3.6% Small Blend -4.4% REITs 8.5% Large Value 4.7% TIPS 4.3% Large Value -36.8% Small Value 20.6% Large Blend 15.1% Emerging Debt -1.8% Balanced 11.3% REITs 2.5% Hedge Funds 3.4% High Yield -4.5% Balanced 8.3% REITs 2.7% Emerging Debt 4.0% MLP -36.9% Large Value 19.7% Balanced 13.8% Small Growth -2.9% TIPS 7.0% Cash 0.1% High Yield 2.5% Balanced -5.1% Large Growth 7.1% Hedge Funds 2.6% Balanced 3.9% Large Blend -37.0% Commodities 18.9% International 8.2% Small Blend -4.2% MLP 4.8% Aggregate Bond -2.0% Cash 0.0% Foreign Bond -6.0% TIPS 4.7% Aggregate Bond 2.3% Foreign Bond 3.0% REITs -37.7% Hedge Funds 11.5% Aggregate Bond 6.5% Small Value -5.5% Hedge Funds 4.8% Emerging -2.3% Emerging -1.8% Small Value -7.5% Aggregate Bond 2.6% TIPS 0.9% Emerging 2.2% Large Growth -38.4% TIPS 11.4% TIPS 6.3% Hedge Funds -5.7% Aggregate Bond 4.2% Foreign Bond -3.1% Foreign Bond -3.1% Emerging -14.6% International 1.5% Small Value 0.5% International 1.5% Small Growth -38.5% Foreign Bond 7.5% Hedge Funds 5.7% International -11.7% Foreign Bond 4.1% TIPS -8.6% International -4.5% Emerging Debt -14.9% Foreign Bond 1.5% Cash 0.3% Hedge Funds 0.8% International -43.1% Aggregate Bond 5.9% Foreign Bond 4.9% Commodities -13.3% Cash 0.1% Emerging Debt -9.0% Emerging Debt -5.7% Commodities -24.7% Hedge Funds 0.5% MLP -2.7% Cash 0.5% Emerging -53.2% Cash 0.2% Cash 0.1% Emerging -18.2% Commodities -1.1% Commodities -9.5% Commodities -17.0% MLP -32.6% Cash 0.3% Commodities -5.3% Commodities -6.5%
  • 14. Index Proxies Utilized: Cash – Citigroup 90 Day T-Bill; TIPS – Barclays US Treasury TIPS; Aggregate Bond – Barclays US Aggregate Bond Index; Municipal Bond – Barclays Municipal 5-Year Bond, High Yield – Barclays US Corporate High Yield; Foreign Bond – Barclays Global Aggregate Ex USD; Local Currency Denominated Emerging Markets Debt – JPMorgan GBI-EM Global Diversified Unhedged Index; Large Value – Russell 1000 Value; Large Blend – S&P 500; Large Growth – Russell 1000 Growth; Small Value – Russell 2000 Value; Small Blend – Russell 2000; Small Growth – Russell 2000 Growth; International – MSCI EAFE; Emerging Markets – MSCI EM; REITs - FTSE NAREIT Equity REITs; Commodities – Bloomberg Commodity Index; MLP – Alerian MLP; Hedge Funds – HFRI Fund of Funds Composite Index; Balanced – 5% Barclays US Treasury TIPS, 10% Barclays US Aggregate Bond Index, 4.5% Barclays Global Aggregate Ex USD, 4.5% Barclays Global Aggregate Ex USD (Hedged), 9% Barclays US Corporate High Yield, 2% JPMorgan GBI-EM Global Diversified Unhedged Index , 16% S&P 500, 5% Russell 2000, 12% MSCI EAFE, 7% MSCI EM, 5% FTSE NAREIT Equity REITs, 5% Bloomberg Commodity Index, 5% Alerian MLP, 10% HFRI Fund of Funds Composite Index; Domestic Equity Indices – Russell 1000, Russell 1000 Growth, Russell 1000 Value, Russell Mid-Cap, Russell Mid Cap Growth, Russell Mid-Cap Value, Russell 2000, Russell 2000 Growth, Russell 2000 Value; International Developed Markets – MSCI EAFE; US Dollar – US Dollar Index; Unhedged Developed Fixed Income – Barclays Global Aggregate Ex USD (Hedged); Real Assets – Bloomberg Commodity Index; Materials, Financials, Energy, Oil & Gas, Healthcare, Information Technology, Consumer Related Sectors – Dow Jones Sector Indices; Small Cap Securities – Russell 2000, Russell 2000 Growth, Russell 2000 Value; Large Cap Securities – Russell 1000, Russell 1000 Growth, Russell 1000 Value; Mid Cap Securities – Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value; Growth; Russell 1000 Growth, Russell Mid Cap Growth, Russell Small Cap Growth; Value – Russell 1000 Value, Russell Mid Cap Value, Russell 2000 Value; Fixed Income Markets –Barclays US Treasury TIPS, Barclays Municipal 5-Year Bond, Barclays Aggregate; Investment Grade Corporate Securities – Barclays US Credit; Long Maturity Treasuries – Barclays US Treasury 20+ Year; Shorter Dated Issues – Barclays US Treasury 1-3 Year; Industrial- , Financial- and Utility-Related Credits – Barclays Fixed Income Sector Indices; BB-Rated, B-Rated and CCC-Rated – Barclays Fixed Income Credit Quality Indices; MBS – Barclays US MBS; ABS – Barclays ABS; Crude Oil – Bloomberg Composite Crude Oil; Australia, New Zealand, Japan, China, India, Taiwan, South Korea, Brazil, Mexico, Chile, South Africa, Turkey, Egypt, Hungary, Poland, Russia, Canada, United Kingdom, Spain, Germany, Italy, France – MSCI Country Index Gross return USD; Natural Gas – Bloomberg Natural Gas Note: This report is intended for the exclusive use of clients or prospective clients of New England Investment & Retirement Group Inc. Content is privileged and confidential. Any dissemination or distribution is strictly prohibited. Information has been obtained from a variety of sources believed to be reliable though not independently verified. Any forecast represent median expectations and actual returns, volatilities and correlations will differ from forecasts. Past performance does not indicate future performance. NEIRG is an investment adviser registered with the SEC. Registration with the SEC does not imply a certain level of skill or training. All information contained herein is believed to be correct but accuracy cannot be guaranteed. Past returns are not indicative of future results. Comments and general market related projections are based on information available at the time of writing, are for informational purposes only, are subject to change without notice, and may not be relied upon for individual investing purposes. NEIRG and its employees do not provide tax or legal advice. NEIRG maintains the necessary notice filings, registrations and licenses with all appropriate jurisdictions. Disclosures 14