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JustMarkets

LiveWebcastHostedBy:

JeffreyGundlach
ChiefExecutiveOfficer
DoubleLine Capital

January10,2017

2016YearInReview:MSCIACWI+8.48%

Source:Bloomberg,MorganStanleyasofJanuary3,2017
BRL=Brazil,BOJ=BankofJapan,ECB=EuropeanCentralBank,DOJ=DepartmentofU.S.Justice,DB=Deutche Bank,RMB=ChineseRenminbi.
MSCIACWIIndexisMorganStanleyCapitalInternationalcaptureslargeandmidcaprepresentationacross23DevelopedMarkets (DM)and23EmergingMarkets(EM).Youcannotinvest
directlyinanindex.
11017JustMarkets2

Equity2016PerformanceTotalReturnUSD
Asof12/31/16
DevelopedMarketsEquityPerformance
(2016TotalReturnUSD)
30%
24.7%
25%

21.3%

20%
15%

16.5%
12.0%

11.6%
9.0%

10%

5.2%

4.8%
5%

1.0%

4.2%

2.5%

1.0%

0%
0.6%

5%

1.2%
6.6%

10%

10.3%

15%

EmergingMarketsEquityPerformance
(2016TotalReturnUSD)
80%
70%
60%
50%
40%
30%
20%
10%
0%
10%
20%
30%

69.1%

59.5%

24.8%

26.9%
18.1%

19.4%

17.4%

11.4%
1.6%

10.1%

29.9%

20.6%
3.0%

1.4%

4.0%

5.2%

2.8%

7.8%

16.5%

Source:Bloomberg;DoubleLine
Pleaseseeappendixforindexdefinitions.Youcannotinvestdirectlyinanindex.

11017JustMarkets3

2016ChangeinGlobal10yBondYields
Asof12/31/16

2016ChangeinGlobal10yBondYields(BPS)
116
100

69 65

17 33

22

20

20 5

0
100

12 21 13
72

200

30 42 40

39

64
118

53

12
77
87
125

300
400
500
511
600

Source:Bloomberg;DoubleLine
Bps=basispoints

11017JustMarkets4

GlobalEconomy

11017JustMarkets5

U.S.DollarIndexSpot(DXY)
December31,2007throughJanuary9,2017

Source:BloombergFinancialServices,DoubleLineCapitalLP
DXY=DXYistheUSDollarIndex(USDX)indicatesthegeneralvalueoftheUSdollar.AverageexchangeratesbetweentheUSdollarandsixmajorworldcurrencies.Aninvestmentcannotbe
madedirectlyinanindex.
11017JustMarkets6

U.S.DollarIndexSpot (DXY)LongTerm
January31,1967throughJanuary9,2017

Source:BloombergFinancialServices
DXY=DXYistheUSDollarIndex(USDX)indicatesthegeneralvalueoftheUSdollar.AverageexchangeratesbetweentheUSdollarandsixmajorworldcurrencies.Aninvestmentcannotbe
11017JustMarkets7
madedirectlyinanindex.

U.S.10yearInflationSwapandU.S.Dollar(DXY)
December15,2006toJanuary9,2017

Source:BloombergFinancialServices
DXY=DXYistheUSDollarIndex(USDX)indicatesthegeneralvalueoftheUSdollar.AverageexchangeratesbetweentheUSdollarandsixmajorworldcurrencies.Aninvestment
cannotbemadedirectlyinanindex.

11017JustMarkets8

PerformanceofWorldStockMarketsSincethe
GlobalFinancialCrisisMarch9,2009toDecember30,2016

Source:AdvisorPerspectives.
Pleaseseeappendixforindexdefinitions.Youcannotinvestdirectlyinanindex.

11017JustMarkets9

BigPictureU.S.

11017JustMarkets10

ChildrenEarningMorethanTheirParents

Note:bydecadeofbirth
Source:http://www.equalityofopportunity.org/ TheEqualityofOpportunityProject(outofStanfordandHarvard)

11017JustMarkets11

U.S.TotalDebt

Source:NewYorkFed,Equifax
HE=HomeEquityRevolvingloans

11017JustMarkets12

U.S.HouseholdDebtServiceRatio
January1,1980toJune30,2016

Source:CalculatedRisk,http://www.calculatedriskblog.com/2016/10/fedq2householddebtserviceratio.html
DSR=DebtServiceRatio

11017JustMarkets13

U.S.PublicDebt
January1,1900Projectedthrough2040

Source:TheHeritageFoundation

11017JustMarkets14

U.S.PublicDebt
January1,1791Projectedthrough2040

GNP=GrossNationallProductisabroadmeasureofanationstotaleconomicactivity.GDPI=GrossDomesticProductisthebroadestmeasureofanationstotaleconomicactivity.

11017JustMarkets15

U.S.GovernmentSpendingvs.Revenue
January1,1965Projectedthrough2025

Source:TheHeritageFoundation
GDP=GrossDomesticProductisthebroadestmeasureofanationstotaleconomicactivity.

11017JustMarkets16

U.S.FederalBudget
January1,1962Projectedthrough2020

Source:TheHeritageFoundation

11017JustMarkets17

Presidents&Recessions
January1960throughNovember30,2016

Source:MorganCreek

11017JustMarkets18

U.S.ConferenceBoardLeadingEconomicIndicator
January3,1987toJanuary3,2017

Source:Bloomberg,DoubleLine

11017JustMarkets19

CEOConfidence
December16,2002toDecember16,2016

Source:Bloomberg,DoubleLine

11017JustMarkets20

ConsumerConfidence
December1,1986toJanuary3,2017

Source:Bloomberg,DoubleLine

11017JustMarkets21

U.S.UnemploymentRatevs.12moSimpleMoving
Average January1,1948toDecember31,2016
2.5

10

Recessions

Spread(RHS)

U3

2016

2014

2013

2011

2009

2008

2006

2004

2003

2001

1999

1998

1996

1994

1993

1991

1989

1988

1986

1984

1983

1981

1979

1978

1976

1974

1973

2
1971

2
1969

1.5

1968

1966

1964

1963

0.5

1961

1959

1958

1956

0.5

1954

1953

1951

1949

1.5

1948

U3less12momov.avg.spread

11

gistered Version - http://w

U3Rate%

U3UnemploymentRateand12monthMovingAvg.(withSpread)

12monthmov.avg.

Source:Bloomberg;DoubleLine
U3istheofficialunemploymentratepertheILOdefinitionoccurswhenpeoplearewithoutjobsandtheyhaveactivelylooked forworkwithinthepastfourweeks. RHS=righthandside.

11017JustMarkets22

AtlantaFedGDPNow
January5,2012toJanuary3,2017

Source:Bloomberg;DoubleLine
GDP=GrossDomesticProductmeasurestheamountofgoodsandservicesproducedwithinagivencountry.

11017JustMarkets23

ISMManufacturingandServicesPMI

Source:Bloomberg
ISMManufacturingPMI=PurchasingManagersindexisanindicatoroftheeconomichealthofthemanufacturingsector.SA=SeasonallyAdjusted

11017JustMarkets24

Inflation

11017JustMarkets25

CommodityPrices
January9,1997toJanuary9,2017

Source:Bloomberg
BCOMIndex=BloombergCommodityIndexiscalculatedonanexcessreturnbasisandreflectscommodityfuturespricemovements withmonthlyrebalancing.You
cannotinvestdirectlyinanindex.

11017JustMarkets26

GoldDecember31,2007toJanuary9,2017

$1183.76

Source:Bloomberg
XAU Curncy =GoldspotpricequotedinUSdollarsperTroyounce.Youcannotinvestdirectlyinanindex.

11017JustMarkets27

10YearU.S.Breakevenvs.Copper

10YearUSBreakeven
December31,2015 December30,2016

2.0%

10YearUSBreakeven(LHS)

6100

CopperSpotPrice(RHS)
5600

1.8%
5100
1.6%
4600
1.4%
1.2%
1.0%

Source:Bloomberg,DoubleLine
LHS=Lefthandside,RHS=Righthandside

4100

CopperSpotPrice
December31,2015 December30,2016

2.2%

3600

11017JustMarkets28

InflationBreakevenat2%
September1,2014toDecember31,2016

AsofJanuary3,2017
Source:Bloomberg

11017JustMarkets29

DifferentMeasuresofCoreInflation
4.0

MeasuresofCoreCPIYoY

3.5
3.0
2.5
Recession

2.0

CoreCPI
CorePCE
ClevelandFedMedianCPI

1.5

AtlantaFedStickyCoreCPI

1.0
0.5

Source:Bloomberg
CPI=ConsumerPriceIndexisameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices, suchastransportation,foodand
medicalcare.PCE=PersonalConsumptionExpendituresistheprimarymeasureofconsumerspendingongoodsandservicesintheU.S.Economy.YoY=yearover
year.

11017JustMarkets30

U.S.PriceStats CPIYoY
January1,2009 December31,2016

TheannualrateofinflationrecordedbyPriceStats punchedthroughthe2%mark
forthefirsttimeintwoyearson23rdDecemberandisacceleratingrapidly.
StateStreet

Source:StateStreet
Source:Bloomberg
CPI=ConsumerPriceIndexisameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices, suchastransportation,foodand
medicalcare.YoY=yearoveryear.Youcannotinvestdirectlyinanindex.

11017JustMarkets31

U.S.WageGrowthOverall

YearoverYearChangeofMedianWageGrowth(%)
March1997 November2016

6.0

Overall

5.0

4.0

3.0

2.0

1.0

0.0

Source:AtlantaFed,DoubleLine

11017JustMarkets32

U.S.,Eurozone,UKandJapanCPIYoY
October14,2006toJanuary3,2017

Source:Bloomberg
CPI=ConsumerPriceIndexisameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices, suchastransportation,foodand
medicalcare.YoY=yearoveryear.

11017JustMarkets33

10YearBundvs.GermanCPI
January31,2000toJanuary5,2017

Source:Bloomberg
CPImeasurespricespaidbyconsumersforamarketbasketofconsumergoodsandservices.Theyearlygrowthratesrepresenttheinflationrate.GRCP20YYIndexis
GermanyCPI,LW743065CorpisaGermanCorporatebond.Youcannotinvestdirectlyinanindex.

11017JustMarkets34

TheFed

11017JustMarkets35

Fed2017DotPlot

Source:BiancoResearch

11017JustMarkets36

Evolutionof2017DotPlot

Source:Stifel

11017JustMarkets37

ChangeinEffectiveFedFundsDuringPreviousHiking
Cycles
ChangeinEffectiveFedFundsduringPreviousHikingCycles
(*20142016HikingcycleproxiedfromWuXiaShadowRate)

5
4
3
PCTChange

2
1

19941995

19992000

20042006
20142016

2
3
4
40 35 30 25 20 15 10 5

10 15 20 25 30 35 40

MonthsAroundFedTightening

Source:Bloomberg,DoubleLine

11017JustMarkets38

InterestRates

11017JustMarkets39

FedFundsTargetwithLIBORCurve

Source:Bloomberg
ICELIBOR=LondonInterbankOfferedrateadministeredbyICEBenchmarkAdministrationFixingforU.S.Dollar.Thefixingisconductedeachdateat11am.Itsanaveragederivedfromthequotations
providedbythebanksdeterminedbytheICEBenchmarkAdministration.Youcannotinvestdirectlyinanindex.

11017JustMarkets40

U.S.Breakevens January6,2013toJanuary9,2017

Source:DoubleLine,Bloomberg
USGGBEBreakevens =Arethebreakevenfortheyearsindicated.Theyarecalculatedbysubtractingtherealyieldoftheinflationlinkedmaturitycurveformtheyieldoftheclosestnominal
Treasurymaturity.Youcannotinvestdirectlyinanindex.
11017JustMarkets41

SharesOutstandingofTIPSETF(Ticker:TIP)
January5,2012toJanuary3,2017

Source:Bloomberg
TIPSETF=iSharesTIPSBondETFisanexchangetradedfundincorporatedintheUSA.TheETFwilltracktheBloombergBarclaysCapitalUSTreasuryInflationNotesIndex.You
cannotinvestdirectlyinanindex.

11017JustMarkets42

U.S.2YearTreasury
January9,2011throughJanuary9,2017

(Inbasispoints)

1.19

Source:BloombergFinancialServices,DoubleLineCapitalLP
GT02=US2YearTreasuryBond.Youcannotinvestdirectlyinanindex.

11017JustMarkets43

U.S.5YearTreasury

(Inbasispoints)

January9,2011throughJanuary9,2017

Source:BloombergFinancialServices,DoubleLineCapitalLP
GT5=US5YearTreasuryBond.Youcannotinvestdirectlyinanindex.

1.88

11017JustMarkets44

U.S.Treasuries:LeverageFund5yearU.S.Treasury
Shorts(CFTC) June30,2006toJanuary3,2017

Source:Bloomberg
CFTC=CommitmentsofTradersReport.

11017JustMarkets45

U.S.10YearTreasury

(Inbasispoints)

January9,2011throughJanuary9,2017

2.38

1.39

Source:BloombergFinancialServices,DoubleLineCapitalLP
GT10=US10YearTreasuryBond.Youcannotinvestdirectlyinanindex.

11017JustMarkets46

U.S.Rates:U.S.Treasury10yYieldForecast
August4,2011toJanuary3,2017

Source:Bloomberg
Youcannotinvestdirectlyinanindex.

11017JustMarkets47

Copper/GoldRatioand10YearU.S.TreasuryYield
January11,2012toJanuary9,2017

Source:Bloomberg
USGG10YrIndex=10yearU.S.treasuryindex.HG1COMBComdty =the1st genericfuturescontract.Youcannotinvestdirectlyinanindex.

11017JustMarkets48

CouplingbetweenU.S.DollarandU.S.Treasury10year
Yields January4,2015toJanuary3,2017

Source:Bloomberg,DoubleLine
DXY=TheU.S.dollarIndexaveragestheexchangeratesbetweentheUSDandmajorworldcurrencies.USGG10YristhegenericU.S. 10yearTreasury.Youcannotinvest
directlyinanindex.

11017JustMarkets49

10yU.S.Treasury BundSpread
Asof12/30/16
10yUSTBundSpread

2.50

USTBundSpread
+/StDev

2.00

Avg.
+/2StDev

1.50
1.00
0.50
0.00
0.50

3/31/2016

3/31/2015

3/31/2014

3/31/2013

3/31/2012

3/31/2011

3/31/2010

3/31/2009

3/31/2008

3/31/2007

3/31/2006

3/31/2005

3/31/2004

3/31/2003

3/31/2002

3/31/2001

3/31/2000

3/31/1999

3/31/1998

3/31/1997

3/31/1996

3/31/1995

3/31/1994

3/31/1993

3/31/1992

3/31/1991

3/31/1990

1.50

3/31/1989

1.00

Source:Bloomberg,DoubleLine
Standarddeviation=Ameasureofthedispersionofasetofdatafromitsmean.Themorespreadapartthedata,thehigherthedeviation.

11017JustMarkets50

TaperTantrum: Nowandthen
January3,2011toJanuary3,2017

Source:Bloomberg,DoubleLine
USGG10YristhegenericU.S.10yearTreasury.

11017JustMarkets51

U.S.30YearTreasury

(Inbasispoints)

January9,2011throughJanuary9,2017

2.97

2.22

Source:BloombergFinancialServices,DoubleLineCapitalLP
GT30=US30YearTreasuryBond.Youcannotinvestdirectlyinanindex.

2.09

11017JustMarkets52

30yU.S.TreasuryTotalReturnbyYear
Asof12/31/16
150

30yUSTTotalReturnbyYear
(Since1988)

2008

140

2011

CumulativePerformance

130

2014
1995

120
110

2010
2012
2016

100

2015

90
2013

80
70

0
7
14
21
28
35
42
49
56
63
70
77
84
91
98
105
112
119
126
133
140
147
154
161
168
175
182
189
196
203
210
217
224
231
238
245
252
259

2009

TradingDays

Source:BankofAmericaMerrillLynch;DoubleLine

11017JustMarkets53

JunkBonds
January11,2011toJanuary11,2017

Source:DoubleLine,Bloomberg
JNK=SPDRBarclaysHighYieldBondETFinanexchangetradedincorporatedintheU.S.ItseeksinvestmentresultsthatcorrespondtothepriceandyieldoftheBarclaysHighYieldVery
LiquidBondIndex.Theaboveisonlypresentedasaproxyanddoesnotconstituteanofferorsolicitationtosellsharesorsecurities.Youcannotinvestdirectlyinanindex.
11017JustMarkets54

S&P500versusHighYieldETF
1.2

GrowthofaDollar
December31,2015 December30,2016

1.1

S&P500
iSharesiBoxxHighYieldETF

1.1

1.0

1.0

0.9

0.9

Source:Bloomberg,DoubleLine
S&P500isStandard&Poors500Indexisacapitalizationweightedindexof500U.S.stocks.iSharesiBoxx HighYieldETFisanexchangetradedfundthatseekstotracktheinvestment
resultsofanindexcomposedofU.S.dollardenominatedhighyieldcorporatebonds.Youcannotinvestdirectlyinanindex.
11017JustMarkets55

U.S.HighYieldDefaultRates

HY=HighYield,RHS=Righthandside

11017JustMarkets56

U.S.CrudeOilInventoriesbyYear
AsofDecember30,2016

USCrudeOilInventoriesbyYear
550,000

500,000
2005
2006

450,000

2007
2008
2009

400,000

2010
2011
2012

350,000

2013
2014
2015

300,000

2016

250,000
1

11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
Weeks
11017JustMarkets57

TrumpEffect

11017JustMarkets58

StockMarket(S&P500)BySectorPerformance
July8,2016toDecember31,20176
Relative Returnssince7/8/16
125.00

120.00

115.00
Utilities
Healthcare

110.00

ConsumerStaples
Technology

105.00

FinancialServices
Energy

100.00

Industrials

95.00

90.00

85.00
7/8/2016

8/8/2016

9/8/2016

10/8/2016

11/8/2016

12/8/2016

Source:RobertShiller,DoubleLine,http://www.econ.yale.edu/~shiller/data.htm
Mean=Istheaverageofthenumbersoracentralvalue.Median=Denotesorrelatedtoavaluelyingatthemidpointofafrequencydistributionofobservedvalues..Pleasesee
11017JustMarkets59
indexdefinitionsforS&P500.Youcannotinvestdirectlyinanindex.

StockMarketReturnsPostElection

Source:RobertShiller,DoubleLine,http://www.econ.yale.edu/~shiller/data.htm
Mean=Istheaverageofthenumbersoracentralvalue.Median=Denotesorrelatedtoavaluelyingatthemidpointofafrequencydistributionofobservedvalues..Pleasesee
11017JustMarkets60
indexdefinitionsforS&P500.Youcannotinvestdirectlyinanindex.

TopFiveTradingPartners
August31,1978toAugust31,2016

Pleaseseeappendixforindexdefinitions.Youcannotinvestdirectlyinanindex.

11017JustMarkets61

TrumpTaxPlan

Source:FinancialSamurai

http://www.financialsamurai.com/waystocounteractdonaldtrumpsmiddleclasstaxhike/

11017JustMarkets62

ChinaTopFiveTradingPartners
August31,1978toAugust31,2016

Source:Bloomberg;DoubleLine

11017JustMarkets63

MexicoExportsTradingPartners
August31,1978toAugust31,2016

Source:Bloomberg;DoubleLine

11017JustMarkets64

Trump First100DayPlan
ToMakeAmericaGreatAgain

ThreeMainAreasofFocus:
1)

CleaningUpWashington
ImposetermlimitsonCongress

2)

ProtectingAmericanWorkers

3)

RestoringLaw&Order

Source:NPR,November9,2016HereisWhatDonaldTrumpWantstodoinHisFirst100Days

11017JustMarkets65

Trump FirstDayInOfficePlan
ToCleanupWashington
Immediatelypursuethefollowingsixmeasurestocleanup
corruptionandspecialinterestcollusioninWashingtonDC:
1)
2)
3)
4)
5)
6)

Proposeconstitutionalamendmenttoimposetermlimitsonallmembersof
Congress
FederalEmployeehiringfreeze(exceptmilitary,publicsafetyandpublichealth)
Arequirementthatforeverynewfederalregulation,twoexistingregulationsmust
beeliminated
A5yearbanonWhitehouseorCongressionalofficialsbecominglobbyistsafter
leavinggovernmentservice
LifetimebanonWhitehouseofficialslobbyingonbehalfofforeigngovernments
AcompletebanonforeignlobbyistsraisingmoneyforAmericanelections

Source:NPR,November9,2016HereisWhatDonaldTrumpWantstodoinHisFirst100Days

11017JustMarkets66

Trump FirstDayInOfficePlan
ToProtectAmericanWorkers
Immediatelypursuethefollowingsevenactionstoprotect
AmericanWorkers:
1)
2)
3)
4)
5)
6)
7)

AnnouncemyintentiontorenegotiateNAFTAorwithdrawfromthedealunder
Article2205
AnnounceourwithdrawalfromtheTransPacificPartnership
DirectSecretaryoftheTreasurytolabelChinaacurrencymanipulator
DirectSecretaryofCommercetoidentifyforeigntradingabusesthatunfairly
impactAmericanworkers anduseeverytooltoendtheabusesimmediately
Liftrestrictionsontheproductionof$50trillionworthofjobproducingAmerican
energyreserves includingshale,oil,naturalgasandcleancoal
LiftObamaClintonroadblocksandallowvitalenergyinfrastructureprojects,like
KeystonePipelinetomoveforward
CancelpaymentstoU.N.climatechangeprogramsandusethemoneytofix
Americaswaterandenvironmentalinfrastructure

Source:NPR,November9,2016HereisWhatDonaldTrumpWantstodoinHisFirst100Days

11017JustMarkets67

Trump FirstDayInOfficePlan
ToRestoreLaw&Order
Immediatelypursuethefollowingfiveactionstorestoresecurity
andtheconstitutionalruleoflaw:
1)
2)
3)
4)
5)

Canceleveryunconstitutionalexecutiveaction,memorandumandorderissuedby
PresidentObama
BegintheprocessofreplacingJusticeScalia
CancelallfederalfundingtoSanctuarycities
Beginremoving morethan2millioncriminalillegalimmigrantsandcancelvisasto
foreigncountriesthatwonttakethemback
Suspendimmigrationfromterrorproneregionswherevettingcannotsafelyoccur

Source:NPR,November9,2016HereisWhatDonaldTrumpWantstodoinHisFirst100Days

11017JustMarkets68

Trump First100DayPlan
ToMakeAmericaGreatAgain
WorkingwithCongress:
Introduce10piecesoflegislationthat:
1) RepealObamacare
2) Fundconstructionforawall(withprovisionthatMexicoreimbursetheU.S)
3) Encourageinfrastructureinvestment
4) Rebuildmilitarybases
5) Promoteschoolchoice

Source:NPR,November9,2016HereisWhatDonaldTrumpWantstodoinHisFirst100Days

11017JustMarkets69

Trump WorkingwithCongressPlan
BroaderLegislativeMeasures
1)

MiddleClassTaxRelief&SimplificationAct
Aneconomicplandesignedtogrowtheeconomy4%peryearandcreateatleast25millionnewjobsthroughmassivetax
reductionandsimplification,incombinationwithtradereform,regulatoryrelief,andliftingtherestrictionsonAmerican
energy.Thelargesttaxreductionsareforthemiddleclass.Amiddleclassfamilywith2childrenwillgeta35%taxcut.The
currentnumberofbracketswillbereducedfrom7to3,andtaxformswilllikewisebegreatlysimplified.Thebusinessrate
willbeloweredfrom35to15percent, andthetrillionsofdollarsofAmericancorporatemoneyoverseascannowbe
broughtbackata10percentrate.

2)

EndOffshoringAct
Establishestariffstodiscouragecompaniesfromlayingoffworkerstorelocateoverseas

3)

AmericanEnergy&InfrastructureAct
Leveragepublicprivatepartnershipswithtaxincentivestospur$1trillionininfrastructureinvestmentover
10years

4)

SchoolofChoice
EndsCommonCore.Bringssupervisionbacktolocalcommunities.Expandsvocationalandtechnical
training.Makescollegeaffordable.

5) Repeal&ReplaceObamacareAct
Replaecs withHealthSavingsAccounts,managesMedicaidfunds,cutsredtapeattheFDA

Source:NPR,November9,2016HereisWhatDonaldTrumpWantstodoinHisFirst100Days

11017JustMarkets70

Trump WorkingwithCongressPlan
BroaderLegislativeMeasures
6)

AffordableChildcare&EldercareAct
Deductionsforchildcareandeldercarefromtaxes,incentivizesemployerstoprovideonsidechildcare,createsDependent
caresavingsaccountsforyoungandelderlydependents

7)

EndIllegalImmigrationAct
WallconstructionwithprovisionforMexicanreimbursement,establishes2yearmandatoryminimumfederalprisonfor
illegallyreenteringtheU.S.afterdeportation,5yearmandatoryminimumforreenteringwithfelonyconvictions,multiple
misdemeanorsortwoormotepriordeportations,reformsvisarulestoenhancepenaltiesforoverstayingandensuresjobs
areofferedtoAmericansfirst.

8)

RestoringCommunitySafety
Reducessurgingcrime,drugsandviolencebycreatingaTaskForceOnViolentCrimeandincreasingfunding
forprogramsthattrainandassistlocalpolice;increasesresourcesforfederallawenforcementagenciesand
federalprosecutorstodismantlecriminalgangsandputviolentoffendersbehindbars.

9)

RestoringNationalSecurityAct
Rebuildsourmilitarybyeliminatingthedefensesequesterandexpandingmilitaryinvestment;provides
VeteranswiththeabilitytoreceivepublicVAtreatmentorattendtheprivatedoctoroftheirchoice;
protectsourvitalinfrastructurefromcyberattack;establishesnewscreeningproceduresforimmigrationto
ensurethosewhoareadmittedtoourcountrysupportourpeopleandourvalues

10) CleanupCorruptioninWashingtonAct
EnactsnewethicsreformstoDraintheSwampandreducethecorruptinginfluenceofspecialinterestson
ourpolitics.
Source:NPR,November9,2016HereisWhatDonaldTrumpWantstodoinHisFirst100Days

11017JustMarkets71

Stocks

11017JustMarkets72

StockMarket12MonthEPSvs.PriceChange

Source:FactSet
EPS=EarningsperShare.PleaseseindexdefinitionsforS&P500.Pleaseseeappendixforindexdefinition.Youcannotinvestdirectlyinanindex.

11017JustMarkets73

CorporateProfitsvs.EmployeeCompensation

Source:RobertShiller,DoubleLine,http://www.econ.yale.edu/~shiller/data.htm
GDP=GrossDomesticProductmeasurestheamountofgoodsandservicesproducedwithinagivencountry.PleaseseindexdefinitionsforS&P500.Youcannotinvestdirectly
inanindex.

11017JustMarkets74

ShillerPERatio
January1,1880throughDecember31,2016
50
45

2000

CAPE10PriceEarnings Ratio

PriceEarningsRatio(CAPE,P/E10)
January1881 December2016

40
35

1929

30
25

28.26
1901

1966

20
15
10
5
0
1880

1981

1921
1900

1920

1940

1960

1980

2000

2020

Source:RobertShiller,DoubleLine,http://www.econ.yale.edu/~shiller/data.htm
CAPE=CyclicallyAdjustedPriceEarnings.CAPE10basedonS&P500.Pleaseseeappendixforindexdefinitions.PE=priceearnings.Youcannotinvestdirectlyinanindex.

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S&P500ConsensusEstimates
January1,1880throughDecember31,2016

Source:NedDavisResearch
PE=PriceEarnings.PleaseseeappendixforS&P500definition.Youcannotinvestdirectlyinanindex.

11017JustMarkets76

S&P500Performancevs.MarginDebt
December31,1995throughJanuary9,2017

NYSE=NewYorkStockExchange,S&P500Indexisthecapitalizationweightedindexoftheofthe500largecompanieshavingcommonstockontheNYSE.Youcannotinvestdirectlyinanindex.

11017JustMarkets77

CycleAdjustedCAPEPE
January1,1998toDecember31,2016

Source:Minack Advisors;BureauofLabor&Statistics(BLS),NationalBureauofEconomicResearch(NBER)
DM=DevelopedMarkets,Pleaseseeappendixforindexdefinitions.Youcannotinvestdirectlyinanindex.

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MSCIEM(10yrs)
January11,2007toJanuary6,2017

Source:Bloomberg
11017JustMarkets79
MSCIEMIndexisafreefloatweightedequityindexthatcaptureslargeandmidcaprepresentationacrossEmergingMarkets(EM)countries.Youcannotinvestdirectlyinanindex.

SPX/MSCIEM(5yrs)
January5,2012toJanuary5,2017

Source:Bloomberg
S&P500isStandard&Poors500Indexisacapitalizationweightedindexof500U.S.stocks.MSCIEMIndexisafreefloatweightedequityindexthatcaptureslargeandmidcap
representationacrossEmergingMarkets(EM)countries.Youcannotinvestdirectlyinanindex.

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SPX/Nikkei(3years) December28,2014toJanuary3,2017

Source:Bloomberg
S&P500isStandard&Poors500Indexisacapitalizationweightedindexof500U.S.stocks.Nikkei(NKY)Indexisapriceweightedaverageof225topratedJapanesecompanieslistedinthe
FirstSectionoftheTokyoStockExchange.Youcannotinvestdirectlyinanindex.
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S&P500/MSCIEurope(3years) January4,2014toJanuary3,2017

Source:Bloomberg
S&P500isStandard&Poors500Indexisacapitalizationweightedindexof500U.S.stocks.MSCIEurope(MXEU)Indexisafreefloatweightedequityindexdesignedtomeasuretheequity
marketperformanceofthedevelopedmarketsinEurope.Youcannotinvestdirectlyinanindex.
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S&P500vs.EMBDecember31,2015toDecember31,2016

1.2

S&P500
iSharesJPMorganUSDEMBondETF

GrowthofaDollar
December31,2015 December30,2016

1.2

1.1

1.1

1.0

1.0

0.9

0.9

Source:Bloomberg,DoubleLine
S&P500isStandard&Poors500Indexisacapitalizationweightedindexof500U.S.stocks.iSharesJPMorganUSDEMBondETFisahedgedUCITSexchangetradedfund.Youcannotinvest
directlyinanindex.
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IndexDescriptions
BarclaysCapitalUSAggregateIndex TheBarclaysCapitalUSAggregateIndexrepresentssecuritiesthatareSECregistered,taxable,anddollardenominated.TheindexcoverstheUSinvestmentgrade
fixedratebondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbackedsecurities.Thesemajorsectorsaresubdividedintomore
specificindicesthatarecalculatedandreportedonaregularbasis.
BarclaysCapitalUSTreasuryIndex ThisindexistheUSTreasurycomponentoftheUSGovernmentindex.PublicobligationsoftheUSTreasurywitharemainingmaturityofoneyearormore.
BarclaysCapitalUSTreasury10YearIndex Thisindexisthe10yearcomponentoftheUSGovernmentindex.
BarclaysCapitalCapitalUSTreasury30YearIndex Thisindexisthe30yearcomponentoftheUSGovernmentindex.
BarclaysCapitalUSHighYieldIndex TheBarclaysCapitalUSHighYieldIndexcoverstheuniverseoffixedrate,noninvestmentgradedebt.Eurobondsanddebtissuer fromcountriesdesignatedas
emergingmarkets(e.g.Argentina,Brazil,Venezuela,etc.)areexcluded,butCanadianandglobalbonds(SECregistered)ofissuersinnonEMGcountriesareincluded.Originalissuezereos,stepupcoupon
structures,144Asandpayinkind(PIK,asofOctober1,2009)arealsoincluded.
BofAMerrillLynchUSGovernmentIndex(GOAO) TheMerrillLynchUSGovernmentIndextrackstheperformanceofUSgovernment(i.e.securitiesintheTreasuryandAgencyindices.)
BofAMerrillLynchUS15+YearTreasuryIndexLongTreasuries(G802) ThisindexisasubsetoftheBofAMerrillLynchUSTreasuryIndexincludingallsecuritieswitharemainingtermoffinalmaturity
greaterthan15years..
BofAMerrillLynchUSCorporateIndex(COAO)InvestmentGrade TheMerrillLynchCorporateIndextrackstheperformanceofUSdollardenominatedinvestmentgradecorporatedebtpubliclyissued
intheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&PandFitch)andaninvestmentgraderatedcountryofrisk(basedonan
averageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimum
amountoutstandingof$250MM.
BofAMerrillLynchUSAllConvertiblesIndex(VOSO) TheMerrillLynchAllConvertibleIndexisaruledrivenindex.whichincludesallbondsandpreferredstocksofU.S.registered companies,whichhave
$50millionormoreinaggregatemarketvalueandareconvertiblesinU.S.dollardenominatedcommonstocks,ADRsorcashequivalents.Pleasenoteaninvestorcannotinvestdirectlyinanindex.
CRBCommodityIndex(CRY) Anunweightedgeometricaverageofsomeimportantcommodities.Itaveragespricesacross17commoditiesandacrosstime.Theindextracksenergy,grains,industrials,
livestock,preciousmetals,andagriculturals.
S&P500(SPX) S&P500isafreefloatcapitalizationweightedindexpublishedsince1957ofthepricesof500largecapcommonstocksactively tradedintheUnitedStates.
StandardDeviation Sigma=standarddeviation.Itshowshowmuchvariationthereisfromtheaverage(mean,orexpected/budgetedvalue).Alow standarddeviationindicatedthatthedatapoint
tendtobeveryclosetothemean,whereashighstandarddeviationindicatedthatthedateisspreadoutoveralargerangeofvalues.
DowJones UBSDJCommodityIndex TheDowJonesUBS CommodityindexiscomposedofcommoditiestradedonU.S.exchanges,withtheexceptionofaluminum,nickelandzinc,whichtradeon
theLondonMetalExchange(LME).
Copper=CopperSpotPrice(HGI)Copperistheworldsthirdmostusedmetalbehindironandaluminumprimarilyusedinhighlycyclicalindustriesincludingconstructionandindustrialmachinery
manufacturing.SpotpricequotedinUSD/lb.
Gold=GoldSpotPrice(Golds)TheGoldSpotpriceisquotedasUSDollarperTroyOunce.
CrudeOil=Crudeoilvariesgreatlyinappearancedependingonitscomposition.WestTexasintermediate(WTI)=Texaslightsweetcrudeisusedasabenchmarkinoilpricing.Itslightbecauseofthe
lowdensityandsweetbecauseoflowsulfur.Brentcrude=Isamajortradingclassificationofsweetlightcrude.BrentistheoilmakeralsoknownasBrentBlend.
VolatilityIndex(VIX)TheVIXshowsthemarket'sexpectationof30dayvolatility.Itisconstructedusingtheimpliedvolatilitiesofawiderangeof S&P500indexoptions. Thisvolatilityismeanttobe
forwardlookingandiscalculatedfrombothcallsandputs. TheVIXisawidelyusedmeasureofmarketriskandisoftenreferredtoas the"investorfeargauge.
BofA MerrillLynchU.S.CommercialMortgageBackedSecuritiesIndex(CMA0) TheBofA MerrillLynchUSFixedRateCMBSIndextrackstheperformanceofUSdollardenominatedinvestmentgrade
fixedratecommercialmortgagebackedsecuritiespubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&PandFitch),a
fixedcouponschedule,atleastoneyearremainingtermtofinalmaturityandatleastonemonthtothelastexpectedcashflow.

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IndexDescriptions
BofA MerrillLynchUSDollarEmergingMarketsSovereignPlusIndex(IGOV) ThisindextrackstheperformanceofUSdollardenominatedemergingmarketandcrossoversovereigndebtpublicly
issuedintheeurobond orUSdomesticmarket.QualifyingcountriesmusthaveaBB1orlowerforeigncurrencylongtermsovereigndebtrating(basedon anaverageofMoodys,S&P,andFitch).
BofA MerrillLynchU.S.HighYieldCashPayIndex(J0A0)BelowInvestmentGrade TheMerrillLynchHighYieldIndextrackstheperformanceofUSdollardenominatedbelowinvestmentgrade
corporatedebt,currentlyinacouponpayingperiod,thatispubliclyissuedintheUSdomesticmarket.Qualifyingsecurities musthaveabelowinvestmentgraderating(basedonanaverageofMoodys,
S&PandFirthforeigncurrencylongtermsovereigndebtratings).Musthaveoneyearremainingtofinalmaturityandaminimumoutstandingamountof$100MM.
BofA MerrillLynchInternationalGovernmentIndex(NOGO) TheMerrillLynchInternationalIndextrackstheperformanceofAustralia,Canadian,French,German,Japan,Dutch,SwissandUK
investmentgradesovereigndebtpubliclyissuedanddenominatedintheissuersowndomesticmarketandcurrency.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,a
fixedcouponscheduleandaminimumamountoutstanding.
BofAMerrillLynchMortgageBackedSecuritiesIndex(MOA0) ThisindextrackstheperformanceofUSdollardenominatedfixedrateandhybridresidentialmortgagepassthroughsecuritiespublicly
issuedbyUSagenciesintheUSdomesticmarket.30year,20year,15yearandinterestonlyfixedratemortgagepoolsareincludedintheIndexprovidedtheyhaveatleastoneyearremainingtermto
finalmaturityandaminimumamountoutstandingofatleast$5billionpergenericcouponand$250MMperproductionyearwithineachgenericcoupon.
BofAMerrillLynchU.S.MunicipalSecuritiesIndex(UOA0) ThisindextrackstheperformanceofUSdollardenominatedinvestmentgradetaxexemptdebtpubliclyissuedbyUSstatesandterritories,
andtheirpoliticalsubdivisions,intheUSdomesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremainingterm to finalmaturity,afixedcouponscheduleandaninvestmentgraderating
(basedonMoodys,S&PandFitch).Minimumsizevarybasedontheinitialtermtofinalmaturityattimeofissuance.
BarclaysCapitalGlobalEmergingMarketsIndex TheBarclaysCapitalGlobalEmergingMarketsIndexrepresentstheunionoftheUSDdenominatedUSEmergingMarketsindexandthe predominately
EURdenominatedPanEuroEmergingMarketsIndex,coveringemergingmarketsinthefollowingregions:Americas,Europe,MiddleEast,Africa,andAsia.Aswithotherfixedincomebenchmarks
providedbyBarclaysCapital,theindexisrulesbased,whichallowsforanunbiasedviewofthemarketplaceandeasyreplicability.
JPMorganInvestmentGradeCorporateIndex JPMorganInvestmentGradeCorporateIndexincludesperformanceofUSdollardenominatedinvestmentgradecorporatedebtpubliclyissuedintheUS
domesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&PandFitch)andaninvestmentgraderatedcountryofrisk(basedonanaverageof
Moodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleastoneyearremainingterm tofinalmaturity,afixedcouponscheduleandaminimumamount
outstandingof$250MM.
DrawDown Thepeaktotroughdeclineduringaspecificrecordperiodofaninvestment,fundorcommodity.Adrawdownisusuallyquotedasthepercentagebetweenthepeakandthetrough.
NAV Amutualfund'spricepershareorexchangetradedfund's(ETF)persharevalue.Inbothcases,thepersharedollaramountof thefundiscalculatedbydividingthetotalvalueofallthesecurities
initsportfolio,lessanyliabilities,bythenumberoffundsharesoutstanding.
CMO Atypeofmortgagebackedsecuritythatcreatesseparatepoolsofpassthroughratesfordifferentclassesofbondholderswith varyingmaturities,calledtranches.Therepaymentsfromthepool
ofpassthroughsecuritiesareusedtoretirethebondsintheorderspecifiedbythebonds'prospectus
TIPS TreasuryInflationProtection.Atreasurysecuritythatisindexedtoinflationinordertoprotectinvestorsfromthenegativeeffectsofinflation.TIPSareconsideredanextremelylowrisk
investmentsincetheyarebackedbytheU.S.governmentandsincetheirparvalueriseswithinflation,asmeasuredbytheConsumerPriceIndex,whiletheirinterestrateremainsfixed.
CPI ConsumerPriceIndex.Ameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices,such as transportation,foodandmedicalcare.
CashFlow Cashflowmeasuresthecashgeneratingcapabilityofacompanybyaddingnoncashcharges(e.g.depreciation)andinterestexpensetopretaxincome.
ratedIndex(JOA3) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonCCCratedHighYieldcreditonly.
MSCIWorldIndex(MXWO) Isafreefloatweightedequityindexincludingdevelopedworldmarkets,anddoesnotincludeemergingmarkets.
MSCIACWIIndex(MXWD) Isafreefloatweightedequityindexincludingdevelopedworldmarketsandemergingmarkets.
MSCIAsiaIndex(MXAP) IsafreefloatequityindexandincludesAsiaPacificcountries.
MSCIEmergingMarketsIndex(MXEF) IsafreefloatweightedequityindexthatcaptureslargeandmidcaprepresentationacrossEmergingMarkets(EM)countries.
MSCILatAm Index(MXLA) IsafreefloatweightedequityindexincludingLatinAmericancountries.
MSCIUSIndex(MXUS) IsafreefloatweightedequityindexincludingU.S.stocks.
MSCIWorldIndexExUSIndex(MXWOU) IsafreefloatweightedequityindexincludingdevelopedworldmarketsexcludingtheU.S.,anddoesnotincludeemergingmarkets.

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IndexDescriptions
BofA/MerrillLynchCreditIndexAAAratedIndex(COA1) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingonthehighestratedAAAinvestmentgradecredits.
BofAMerrillLynchUSTreasuryIndex(G0Q0)TheMerrillLynchUSTreasuryIndextrackstheperformanceofUSdollardenominatedsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomestic
market.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingof$1billion.
BofA/MerrillLynch13YearTreasuryIndex(G1O2) isasubsetoftheBofA MerrillLunchUSTreasuryIndexincludingallsecuritieswitharemainingtermtofinalmaturitylessthan3years.TheBofA
MerrillLynchUSTreasuryIndextrackstheperformanceofUSdollardenominatedsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.
BofA MerrillLynchUS1015YearTreasuryIndexLongTreasury(G7O2)TheMerrillLynchUS1015TreasuryIndextrackstheperformanceofUSdollardenominated1015yearsovereigndebtpublicly
issuedbytheUSgovernmentinitsdomesticmarket.ItisasubsetoftheBofAMerrillLynchU.S.TreasuryIndex(GOQO).
BofA MerrillLynchCurrent10yearUSTIndex Thisindexisthe10yearcomponentoftheUSGovernmentindex.
BofAMerrillLynchCurrent30yearUSTIndex Thisindexisthe30yearcomponentoftheUSGovernmentindex.
JPMorganCorporateEMBIBroadDiversifiedIndex(JBCDCOMP) Thisindextrackstheperformanceofinvestmentgradecorporatedebtpublicallyissuedacrossarangeofemergingmarketcountries.
ShanghaiIndex TheShanghaiStockExchangeCompositeisacapitalizationweightedindextrackingdailypriceperformanceofallAandBshareslistedontheShanghaiStockExchange.Thisindexwas
developedDecember19,1990withabasevalueof100.
S&P/CaseShillerCompositeHomePriceIndex TheCaseShillerHomePriceIndices,onecomprisedofpricechangeswithinall20metropolitanmarkets,andanothercomprisedof pricechangeswithin
thefollowingsubsetof10metropolitanmarkets:Boston,Chicago,Denver,LasVegas,LosAngeles,Miami,NewYork,SanDiego, SanFranciscoandWashingtonDC.Inadditiontothose10markets,the20
HomePriceindexreflectspricechangesforAtlanta,Charlotte,Dallas,Detroit,Minneapolis,Phoenix,Portland,SeattleandTampa.
NASDAQ Acomputerizedsystemthatfacilitatestradingandprovidespricequotationsonmorethan5,000ofthemoreactivelytradedover thecounterstocks.Createdin1971,theNasdaqwasthe
world'sfirstelectronicstockmarket.
Transports TheIndustrialsSectorincludescompanieswhosebusinessesaredominatedbyoneofthefollowingactivities:Themanufactureand distributionofcapitalgoods,includingaerospace&
defense,construction,engineering&buildingproducts,electricalequipmentandindustrialmachinery
Utilities Apublicutilityisabusinessthatfurnishesaneverydaynecessitytothepublicatlarge.Publicutilitiesprovidewater,electricity,naturalgas,telephoneservice,andotheressentials.Utilitiesmay
bepubliclyorprivatelyowned,butmostareoperatedasprivatebusinesses.
BasisPoint Abasispointisaunitthatisequalto1/100th of1%,andisusedtodenotethechangeinafinancialinstrument.
Duration Durationisacommonlyusedmeasureofthepotentialvolatilityofthepriceofadebtsecurity,ortheaggregatemarketvalue ofaportfolioofdebtsecurities,priortomaturity.Securitieswitha
longerdurationgenerallyhavemorevolatilepricesthansecuritiesofcomparablequalitywithashorterduration.
BofA/MerrillLynchInflationLinkedIndex(G0Q1) TheBofA MerrillLynchUSInflationLinkedTreasuryIndextrackstheperformanceofUSdollardenominatedinflationlinkedsovereigndebtpublicly
issuedbytheUSgovernmentinitsdomesticmarket.
CitigroupTIPS(SBUSILSI) . Itmeasuresthereturnsoftheinflationlinkedbondswithfixedratecouponpaymentsthatarelinkedtoaninflationindex.The priceofeachissueintheUSLSIisadjustedby
usinganindexratio.Theindexratioisdeterminedbydividingthecurrentinflationindexlevelbytheinflationindexlevelatthetimeofissueofthesecurity.Theinflationindexispublishedonamonthly
basis,andtheintramonthindexratioiscalculatedusinglinear
interpolation.
BarclaysCapitalCMBSIndex trackstheperformanceofUSdollardenominatedsecuritizedcommercialmortgagebackedsecurities.
Russell2000 measurestheperformanceofthesmallcapsegmentoftheUSequityuniverse.Russell2000isasubsetoftheRussell3000indexrepresentingapproximately10%ofthetotalmarket
capitalizationofthatindex.
S&PGSCI isacompositeindexofcommoditysectorreturnrepresentinganunleveraged,longonlyinvestmentincommodityfuturesthatisbroadlydiversifiedacrossthespectrumofcommodities.
BarclaysEuropeanAggregateIndextracksfixedrate,investmentgradesecuritiesissuedinthefollowingEuropeancurrencies:euro,Britishpounds,Norwegiankrone,Danishkrone,Swedishkrona,Czech
koruna,Hungarianforint,PolishzlotyandSwissfranc.
S&PLSTALevLoanIndex(BankLoans) CreatedbytheLeveragedCommentary&Data(LCD)teamatS&PCapitalIQ,thereviewprovides an overviewandoutlookoftheleveragedloanmarketaswellas
anexpansivereviewoftheS&PLeveragedLoanIndexandsubindexes. Thereviewconsistsofindexgeneralcharacteristics,results,riskreturnprofile,default/distressstatistics, andrepaymentanalysis.It
isnotpossibletoinvestdirectlyinanindex.
Citigroup3MonthTBill(SBMMTB3) 3MonthUSTBillinUSdollars.
MoodysU.S.SpeculativeGradeDefaultRate:Aspeculativegradedefaultoccursifadefaultingissuerheldanspeculativegraderating(Ba1orlower)atthestartoflatest 12monthperiod.Therateis
establishedbydividingthenumberofSpecgradedefaultsbythenumberofSpecgradeissuersatthebeginningofthesampleperiod.
MoodysDistressedRate:PercentageofHighYieldIssuerswhosedebtistradingatdistressedlevels.Distressedissuersaredefinedashavingdebt withOASorCDSof1000bpsormore.

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IndexDescriptions
S&PGSCIAgriculture isacompositeindexofagriculturecommodityfuturesunleveraged,longonlyinvestment.
BarclaysCapitalU.S.30YearTIPSIndex .BarclaysCapital30yearTIPSontherunindexquotedinUSDollarstradedintraday
CitigroupEconomicSurpriseIndex .TheCitigroupEconomicSurpriseIndicesareobjectiveandquantitativemeasuresofeconomicnews.Theyaredefinedasweightedhistoricalstandarddeviationsof
datasurprises(actualreleasesvsBloombergsurveymedian).ApositivereadingoftheEconomicSurpriseIndexsuggeststhateconomicreleaseshaveonbalancebeatingconsensus.Theindicesare
calculateddailyinarollingthreemonthwindow.TheweightsofeconomicindicatorsarederivedfromrelativehighfrequencyspotFXimpactsof1standarddeviationdatasurprises.Theindicesalso
employatimedecayfunctiontoreplicatethelimitedmemoryofmarkets.
DAX ThisindexistheGermanStockIndexisatotalreturnindexof30selectedGermanbluechipstockstradedontheFrankfurtStockExchange.
CAC40 ThisindexthemostwidelyusedindicatoroftheParismarket,reflectstheperformanceofthe40largestequitieslistedinFrance,measuredbyfreefloatmarketcapitalizationandliquidity.
FTSE100 Isacapitalizationweightedindexofthe100mosthighlycapitalizedcompaniestradedontheLondonStockExchange.
MexicoIPCMexico TheMexicanIPCindexisacapitalizationweightedindexoftheleadingstockstradedontheMexicanStockExchange.
HangSeng TheHangSengChinaEnterprisesIndexisafreefloatcapitalizationweightedindexcomprisedofHshareslistedontheHongKong StockExchangeandincludedintheHangSengMainland
CompositeIndex.
KOSPI ThisindexisacapitalizedweightedindexofallcommonsharesontheKoreanStockExchanges.
Nikkei225 TheNikkei225Stockaverageisapriceweightedaverageof225topratedJapanesecompanieslistedintheFirstSectionofthe TokyoStockExchange.
AustraliaAORD S&P/ASXAllOrdinariesrepresents500largestcompaniesintheAustralianequitiesmarket.IndexconstitutesaredrawnfromeligiblecompanieslistedontheAustralianStockExchange.
BrazilBovespaIndex(IBOV)BrazilTheBovespaIndexisagrossreturnindexweightedbytradedvolumeandiscomprisedofthemostliquidstockstradedontheSao PauloStockExchange.The
BovespaIndexhasbeendivided10timesbyafactorof10sinceJanuary1,1985.
ShanghaiIndex(SHCOMP)TheShanghaiStockExchangeCompositeIndexisacapitalizationweightedindex.TheindextracksthedailyperformanceofallAsharesandBshareslistedontheShanghai
StockExchange.TheindexwasdevelopedonDecember19,1990withabasevalueof100.
BSEIndiaSensitiveIndex(Sensex)IndiaTheSensexisacapweightedindex.Theselectionoftheindexmembershasbeenmadeonthebasisofliquidity,depthandfloatingstockadjustmentdepthand
industryrepresentation.
DowJonesIndustrialAverageDowJones isapriceweightedaverageof30bluechipstocksthataregenerallytheleadersintheirindustry.
Eurostoxx BasedontheEUROSTOXX50IndexoptionstradedonEUREX,measuringimpliedvolatilityonoptionswitharolling30dayexpiry.
SwissMarketIndexSwitzerland(SMI) isanindexofthelargestandmostliquidstockstradedontheGeneva,ZurichandBaselStockExchanges.
FTSEMIBIndexItaly Isanindexconsistingofthe40mostliquidandcapitalizedstockslistedontheBorsa Italiana.
Indice Bursatil Espanol (IBEX)IndexSpain TheofficialindexoftheSpanishContinuousMarket.Theindexiscomprisedofthe35mostliquidstockstradedontheContinuousmarket.Itiscalculated,
supervisedandpublishedbytheSociedad deBolsas.
Standard&Poor's/TorontoStockExchangeCompositeIndex Canada AcapitalizationweightedindexdesignedtomeasuremarketactivityofstockslistedontheTorontoStockExchange.
BuenosAiresStockExchangeMerval IndexArgentina TheArgintina Merval Indexisabasketweightedindex,isthemarketvalueofastockportfolio,selectedaccordingtoparticipationintheBuenos
AiresStockExchange.
SantiagoStockExchangeIPSAIndexChile TheISPAIndexisaTotalReturnIndexandiscomposedofthe40stockswiththehighestaverageannualtradingvolumeinthe SantiagoStockExchange.
TaiwanStockExchangeWeightedIndexTaiwan TWSEIndexisacapitalizationweightedindexofalllistedcommonsharesontheTaiwanStockExchange.
FTSEBursaMalaysiaKLCIIndexMalaysia MalaysiaKLCIIndexcomprisesofthelargest30companiesbyfullmarketcapitalizationonBursaMalaysia'sMainBoard.
ThailandStockExchangeIndexThailand ThailandStockExchangeNetForeignStocksInvestment(THB)usingtheU.S.dollar.
IndonesiaJakartaStockExchangeIndexIndonesia IndexisupdateddirectlyfromJakartausingtheU.S.dollar.
ThePhilippineStockExchangePSEi IndexPhilippines isacapitalizationweightedindexcomposedofstocksrepresentativeoftheIndustrial,Properties,Services,HoldingFirms,FinancialandMining&
OilSectorsofthePSE.
PolandWarsawStockExchangeIndex"Poland"isthetotalbookvalue(nominalsharepricexsharesoutstanding)ofallcompaniestradingontheWarsawStockExchange.
PragueStockExchangeIndex"Czech"ismarketcapweightedcontaining13securities.
CSFBRussiaStockMarketIndexRussia USDDailyCapWeightedisacapitalizationweighted,basedon30stocks&denominatedinUSdollars
BudapestStockExchangeBudapestStockIndexHungaryisacapitalizationweightedindexadjustedforfreefloattrackingdailypriceonlyperformanceoflarge,activelytradedsharesontheBudapest
StockExchange.
Borsa Istanbul100IndexTurkeyisacapitalizationweightedindexcomposedofNationalMarketcompaniesexceptinvestmenttrustsselectedonthebasisofpredeterminedcriteriadirectedforthe
companiestobeincludedintheindex.
FTSE/JSEAfricaTop40TradeableIndex"SouthAfrica"isacapitalizationweightedindex.Companiesincludedarethe40largestcompaniesbymarketcapitulationincludedintheFTSE/JSEAllSharesIndex.
TheStraitsTimesIndex(STI)"Singapore"ismaintainedbyFTSEisthemostgloballyrecognizedbenchmarkindexandmarketbarometerofSingaporecoversthe30largestandmostliquidcompanies
listedontheSingaporeexchange.

11017JustMarkets87

Disclaimer
ImportantInformationRegardingThisReport
Thisreportwaspreparedasaprivatecommunicationtoclientsandwasnotintendedforpubliccirculation.Clientsmayauthorizedistributiontotheirconsultants
orotheragents.
Issueselectionprocessesandtoolsillustratedthroughoutthispresentationaresamplesandmaybemodifiedperiodically.Suchchartsarenottheonlytoolsused
bytheinvestmentteams,areextremelysophisticated,maynotalwaysproducetheintendedresultsandarenotintendedforusebynonprofessionals.
DoubleLinehasnoobligationtoproviderevisedassessmentsintheeventofchangedcircumstances.Whilewehavegatheredthisinformationfromsources
believedtobereliable,DoubleLinecannotguaranteetheaccuracyoftheinformationprovided.Securitiesdiscussedarenotrecommendationsandarepresented
asexamplesofissueselectionorportfoliomanagementprocesses.Theyhavebeenpickedforcomparisonorillustrationpurposesonly.Nosecuritypresented
withiniseitherofferedforsaleorpurchase.DoubleLinereservestherighttochangeitsinvestmentperspectiveandoutlook withoutnoticeasmarketconditions
dictateorasadditionalinformationbecomesavailable.ThismaterialmayincludestatementsthatconstituteforwardlookingstatementsundertheU.S.
securitieslaws.Forwardlookingstatementsinclude,amongotherthings,projections,estimates,andinformationaboutpossibleorfutureresultsrelatedtoa
clientsaccount,ormarketorregulatorydevelopments.

ImportantInformationRegardingRiskFactors
Investmentstrategiesmaynotachievethedesiredresultsduetoimplementationlag,othertimingfactors,portfoliomanagementdecisionmaking,economicor
marketconditionsorotherunanticipatedfactors.Theviewsandforecastsexpressedinthismaterialareasofthedateindicated,aresubjecttochangewithout
notice,maynotcometopassanddonotrepresentarecommendationorofferofanyparticularsecurity,strategy,orinvestment. Allinvestmentsinvolverisks.
PleaserequestacopyofDoubleLines FormADVPart2AtoreviewthematerialrisksinvolvedinDoubleLines strategies.Pastperformanceisnoguaranteeof
futureresults.

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DoubleLineseekstomaximizeinvestmentresultsconsistentwithourinterpretationofclientguidelinesandinvestmentmandate.WhileDoubleLineseeksto
maximizereturnsforourclientsconsistentwithguidelines,DoubleLinecannotguaranteethatDoubleLinewilloutperformaclient'sspecifiedbenchmark.
Additionally,thenatureofportfoliodiversificationimpliesthatcertainholdingsandsectorsinaclient'sportfoliomayberisinginpricewhileothersarefalling;or,
thatsomeissuesandsectorsareoutperformingwhileothersareunderperforming.Suchoutorunderperformancecanbetheresultofmanyfactors,suchasbut
notlimitedtoduration/interestrateexposure,yieldcurveexposure,bondsectorexposure,ornewsorrumorsspecifictoasinglename.
11017JustMarkets88

Disclaimer
DoubleLineisanactivemanagerandwilladjustthecompositionofclientsportfoliosconsistentwithourinvestmentteamsjudgmentconcerningmarket
conditionsandanyparticularsecurity.TheconstructionofDoubleLineportfoliosmaydiffersubstantiallyfromtheconstruction ofanyofavarietyofbondmarket
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longperiods,DoubleLinesperformanceisproperlyassessedoverafullmultiyearmarketcycle.

ImportantInformationRegardingClientResponsibilities
Clientsarerequestedtocarefullyreviewallportfolioholdingsandstrategies,includingbycomparingthecustodialstatementtoanystatementsreceivedfrom
DoubleLine.ClientsshouldpromptlyinformDoubleLineofanypotentialorperceivedpolicyorguidelineinconsistencies.Inparticular,DoubleLineunderstands
thatguidelineenablinglanguageissubjecttointerpretationandDoubleLinestronglyencouragesclientstoexpressanycontrastinginterpretationassoonas
practical.ClientsarealsorequestedtonotifyDoubleLineofanyupdatestoClientsorganization,suchas(butnotlimitedto) addingaffiliates(includingbroker
dealeraffiliates),issuingadditionalsecurities,namechanges,mergersorotheralterationstoClientslegalstructure.
ISPDRBarclaysHighYieldBondETF(JNK)InvestmentObjective&Summary
TheinvestmentobjectiveoftheSPDRBarclaysHighYieldBondETFseekstoprovideinvestmentresultsthat,beforefeesandexpenses,correspondsgenerallytothe
priceandyieldperformanceoftheBarclaysHighYieldVeryLiquidIndex.TheETFinvestsinU.S.highyieldbonds.
TheBarclaysHighYieldVeryLiquidIndexisdesignedtomeasuretheperformanceofpubliclyissuedU.S.dollardenominatedhigh yieldcorporatebondswithabove
averageliquidity.Highyieldsecuritiesaregenerallyratedbelowinvestmentgradeandarecommonlyreferredtoas"junkbonds."TheIndexincludespubliclyissued
U.S.dollardenominated,noninvestmentgrade,fixedrate,taxablecorporatebondsthathavearemainingmaturityofatleastoneyear,regardlessofoptionality,are
ratedhighyield(Ba1/BB+/BB+orbelow)usingthemiddleratingofMoody'sInvestorsService,Inc.,FitchInc.,orStandard&Poor's,Inc.Respectively,andhave$500
millionormoreofoutstandingfacevalue.
ImportantRiskInformation Ingeneral,ETFscanbeexpectedtomoveupordowninvaluewiththevalueoftheapplicableindex.AlthoughETFsharesmaybe
boughtandsoldontheexchangethroughanybrokerageaccount,ETFsharesarenotindividuallyredeemablefromtheFund.InvestorsmayacquireETFsandtender
themforredemptionthroughtheFundinCreationUnitAggregationsonly.Pleaseseetheprospectusformoredetails.
Bondfundscontaininterestraterisk(asinterestratesrisebondpricesusuallyfall);theriskofissuerdefault;issuercreditrisk;liquidityrisk;andinflationrisk.
Investinginhighyieldfixedincomesecurities,otherwiseknownas"junkbonds"isconsideredspeculativeandinvolvesgreaterriskoflossofprincipalandinterest
thaninvestingininvestmentgradefixedincomesecurities.Theselowerqualitydebtsecuritiesinvolvegreaterriskofdefaultorpricechangeduetopotentialchanges
inthecreditqualityoftheissuer.
TheFundinvestsbysamplingtheIndex,holdingarangeofsecuritiesthat,intheaggregate,approximatesthefullIndexintermsofkeyriskfactorsandother
characteristicswhichmaycausethefundtoexperiencetrackingerrorsrelativetoperformanceoftheIndex.
Distributor:StateStreetGlobalMarkets,LLC,memberFINRA,SIPC,awhollyownedsubsidiaryofStateStreetCorporation.ReferencestoStateStreetmayinclude
StateStreetCorporationanditsaffiliates.CertainStateStreetaffiliatesprovideservicesandreceivefeesfromtheSPDRETFs.
Beforeinvesting,considerthefunds'investmentobjectives,risks,chargesandexpenses.Toobtainaprospectusorsummaryprospectuswhichcontainsthisand
otherinformation,call18667872257ortalktoyourfinancialadvisor.Readitcarefullybeforeinvesting.
JNKisdistributedbyStateStreetGlobalMarkets,LLC
DoubleLine GroupisnotaregisteredinvestmentadviserwiththeSecuritiesExchangeCommission(SEC).
DoubleLineisaregisteredtrademarkofDoubleLineCapitalLP.
2017DoubleLineCapital

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