CHIEF INVESTMENT OFFICE

Capital Market Outlook

July 3, 2023

All data, projections and opinions are as of the date of this report and subject to change.

IN THIS ISSUE MARKET VIEW 

Market View— Still On Top: Debunking the Myth of America’s Decline: Distracted by Joseph P. Quinlan
divisive politics and a 24/7 negative news cycle, many investors have been blinded to the Managing Director and Head of CIO Market
underlying strengths of the U.S. economy and bought into the narrative that America is in Strategy
secular decline, and that global growth, consumption and earnings are shifting elsewhere, Lauren J. Sanfilippo
notably East, to China. However, evidence of this global shift isn’t as compelling and Director and Senior Investment Strategist
cogent as the consensus suggestions. We are well into the 21st century, and America
remains one of the most competitive and resilient economies in the world. As we discuss, MARKETS IN REVIEW 
the U.S. is a hydra-headed superpower—or an extraordinary economy that does a number
of extraordinary things very well. Data as of 7/3/2023,
and subject to change
With just 4.25% of the world’s total population, America accounted for roughly 25% of
total world output in 2022, according to figures from the International Monetary Fund
(IMF). Amazingly, that’s the same percentage as 1980, meaning the U.S. economy has held Portfolio Considerations
its own—and then some—in the face of major seismic events of the past forty years.
Betting against the U.S. has been costly for investors. Indeed, U.S. Equities have handily We are in the realistic camp that
outperformed other global indexes over the past decade, as we highlight in this report. emphasis on diversification, balance,
an understanding that a mixed
It’s important for investors to lean against American declinism and the perception that the environment can be confusing at
nation is heading in the wrong direction. This misguided diagnostic may lead to times, and a focus on higher-quality
investment paralysis, hesitation when it’s time to rebalance portfolios, time out of the
investments makes the most sense.
market, and other characteristics that undercut long-term investment returns. It can also
We remain neutral Equities and Fixed
influence asset allocations, with many investors running to money market funds this year
Income relative to our strategic
not knowing that over the post-war era stretching from 1945 to 2022, the S&P 500 has
handily outperformed other asset classes. We are staying long the United States. benchmarks. Opportunities to add to
Equities for long-term exposure
should present themselves given the
prospects for a liquidity drain in the
coming few months. At this point, we
would emphasize a solid mix of both
Growth and Value investments, Small-
and Large-capitalization stocks, and
in Fixed Income, a mix of higher-
grade bonds across multiple sectors.

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MARKET VIEW
Still On Top: Debunking the Myth of America’s Decline
Joseph P. Quinlan, Managing Director and Head of CIO Market Strategy
Lauren J. Sanfilippo, Director and Senior Investment Strategist
Investment Implications
“God has a special providence for fools, drunkards, and the United States of America.”
We are bullish on the future of
German Chancellor Otto von Bismarck
America. While hardly perfect, the
We agree with the German statesman Otto von Bismarck—that there is something unique U.S. economy is well positioned to
about the U.S. and its place in the global hierarchy of nations. Here we are, nearly one-quarter remain one of the most
into the 21st century, and America remains the largest, most competitive and dynamic nations competitive economies in the
in the world—bar none, including China. world as we head into the second
That may sound out of kilter because isn’t this supposed to be Asia’s century? Aren’t emerging half of this decade. No economy is
market consumers the key drivers of global consumption? Hasn’t America’s global preeminence as large, diversified, wealthy and
and attractiveness been undermined by expensive wars in the Middle East, political dysfunction technologically prepared for the
in Washington, and soaring budget deficits, leaving the U.S. dollar as roadkill? Doesn’t the future as America’s. Investors
future of the global economy beat to the tune of China and its followers, not the U.S.? This is should neither be fixated on day-
the prevailing narrative, so shouldn’t U.S. investors be allocating a lot more capital overseas to-day swings in capital markets
and rebalancing portfolios towards non-U.S. assets and away from the U.S.? nor influenced by the 24/7 media
chatter. Take the long view. See
The short answer to these questions is simply “no.”
the forest before the trees. Stay
Outperforming and Punching Above One’s Weight invested in U.S.-denominated
assets.
As Exhibit 1 makes clear, the U.S. economy and its close cousin, the U.S. stock market, are one
of the greatest wealth-generating machines ever created. If an investor had thrown down one
hundred dollars on the U.S. in 1992, it would now be worth about $1,760. In contrast, a one
hundred dollar investment on the rich world (excluding the U.S.) would be valued at $650; an
investment on China: a mere $118. Simply put, the outperformance of the U.S. relative to many
other parts of the world—notably over the past decade—has been stunning, undercutting the
doomsayer’s narrative that America is in secular decline.
Exhibit 1: Global Equity Market Returns.

MSCI Total Return Indexes (USD) December 1992 = 100

2,000
1,750 U.S.
1,500
1,250
1,000 Germany
750 Emerging
Markets
500 Developed ex-U.S.
250 Japan
0 China
1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Source: Bloomberg. Data as of May 2023. Past performance is no guarantee of future results. It is not possible to invest directly in an index. Please refer to index definitions at the end of this
report.

Nothing could be further from the truth.

Investors should stop sweating the prospects of near-term U.S. recession and instead grasp
just how large and diversified the U.S. economy truly is. With just 4.25% of the world’s total
population, America accounted for roughly 25% of total world output in 2022, according to
figures from the IMF. Amazingly, that’s the same percentage as 1980, meaning the U.S.
economy has held its own—and then some—in the face of some seismic events over the past
forty years. Think the rise of China, the enlargement of the European Union (EU), a dotcom
boom and bust, a terrorist attack on U.S. soil on 9/11, multiple wars in the Middle East, the
Great Financial Crisis of 2008/2009, the global rise of political populism, an unfathomable

2 of 7 July 3, 2023 – Capital Market Outlook RETURN TO FIRST PAGE

pandemic and a ground war in the heart of Europe. Through it all, major U.S. indexes have
churned higher (Exhibit 2).
Exhibit 2: Equity Market And Historical Periods Of Crisis and Recovery.

Dow Jones Industrial Index COVID-19

Recovery Periods Crisis Periods pandemic SVB*
Level (log scale) Dot-com peak Global
financial collapse
100000
Fall of 9/11 crisis
Berlin attacks
1957-58 Double-digit Wall
10000 Spanish Flu influenza Nixon U.S. Inflation
pandemic 1929 crash pandemic Shock Russia-
and Great Facebook Ukraine
Depression Initial Pulic conflict
World World Developed Offering
1000 War II World Wide Web
War I economy
launched internet
Development of Reagan election penetration
100 integrated circuit crosses 50%
European and rise of digital Federal Reserve
Bretton Coal & Steel (Fed) Reform
Roaring New Woods Community computing Act
Twenties Deal Agreement formed
10
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

*SVB: Silicon Valley Bank. Sources: Chief Investment Office; Bloomberg. Data as of December 2022. Past performance is no guarantee of future results. It is not possible to invest directly in an
index.

Never have so few people produced so much output (GDP), underscoring the productive
capacity of the U.S. While the U.S. economy was actually smaller than the EUs in 2008 ($14.7
trillion vs. $16.2 trillion), by 2022, the U.S. economy was a third larger. It is now more than 50%
larger than the EU minus the United Kingdom. 1
America is a hydra-headed economic superpower. Aerospace, agriculture, artificial intelligence,
entertainment, education, energy, finance, life sciences, technology—pick virtually any sector,
and America is likely to be the leader of the global pack.
To this point, and contrary to popular lore, the U.S. remains a global manufacturing superpower.
According to recent data from the United Nation’s (UN) Development Organization, of the 22
manufacturing categories outlined by the U.N., the U.S. ranked first in terms of global share of
output in 12 categories. The top ranking of the U.S. runs the gamut from paper products to
motor vehicles to aircraft. In other words, America’s manufacturing base is alive and extremely
well, and about to be supercharged with the massive wave of public- and private-sector
spending on renewable energy, semiconductors, electrical vehicles and related activities. The
U.S., in our opinion, is on the cusp of a manufacturing supercycle that should maintain U.S.
manufacturing primacy well into the next decade.

What about China?

Yes, based on purchasing power parity (PPP) metrics, China is the largest economy in the world,
with an 18% share of global gross domestic product (GDP) versus the U.S. 16% share,
according to the IMF. However, as The Economist recently noted, “though purchasing-power parity
(PPP) is the right metric for comparing people’s well-being in different economies, in terms of what
those economies can achieve on the world stage, it is exchange rates set by markets that count.
And looked at this way, American pre-eminence is clear.” 2
It sure is.
And one critical area that separates the U.S. from China is per capita income—or wealth and
the capacity to spend. America is not only large, but also wealthy. Its per capita income was
roughly $80,000 in 2023, according to the IMF. Meanwhile, China is large but relatively poor,
with a per capita income of $13, 720 in 2023, a fraction of America’s. India is poorer still: the
nation’s per capita income remains under $3,000. Even wealthy nations like Japan, Germany
and France don’t stack up against the U.S., with per capita incomes of $35,000, $51,400, and
$44,400, respectively, in 2023. Because of this wealth differential, it’s little wonder that the

1
Jeremy Shapiro and Jana Puglierin, "The art of vassalisation: How Russia's war on Ukraine has transformed
transatlantic relations," European Council on Foreign Relations, April 4, 2023.
2
“America's economic outperformance is a marvel to behold”, The Economist, April 2023.

3 of 7 July 3, 2023 – Capital Market Outlook RETURN TO FIRST PAGE

U.S. consumer alone accounted for a staggering 30% of global personal consumption
expenditures in 2021. 3

The U.S. Remains a Magnet for Foreign Capital

A key component of American dynamism lies with the nation’s ability to attract foreign
capital—both portfolio flows and foreign direct investment (FDI). The former helps grease the
wheels of the U.S. capital markets each day and is evident through the foreign ownership of
liquid U.S. securities. Foreign investors owned some $23.3 trillion in U.S. securities (U.S. Exhibit 3: The U.S. Dollar’s Hegemonic
Treasurys + corporate bonds + government agency bonds + Equities) at the end of 2022, up Role by Activity.
from $3.7 trillion at the start of the century, according to the Fed. Think of this slug of capital
as a massive vote of foreign confidence in the U.S.—and a massive support to the U.S. dollar, FX Transaction Volume 88
which remains the world’s reserve currency. The greenback still accounts for roughly 60% of
the official reserves of the world’s central banks, with the euro accounting for 21%, a distant Official FX Reserves 60
second. The dominant role of the dollar in driving global commerce is succinctly depicted in
Exhibit 3. In a nutshell, and to the huge benefit to the U.S., the global economy runs on dollars. Trade Invoicing 50

And also to the benefit of the U.S. economy, no other economy in the world attracts as much Cross-border Loans 50
FDI as America. In 2021, the latest available figures from the UN, the U.S. alone accounted for
International Debt
nearly one-quarter (23.2%) of total global FDI inflows, up from 15.7% the year before. There’s Securities
49
no better number that illustrates the preference of foreign firms to invest in the U.S. versus the
SWIFT Payments 42
rest of the globe. China’s share, by the way, was a distant second, at 11.4%. Global FDI inflows
to the U.S. have handily outpaced China’s for decades due in large part to America’s large,
Global GDP 25
transparent, market-friendly market environment versus China’s more top-down, command-
and-control government-led economy. And more FDI inflows means more jobs, income, World Trade 12
investment, trade and tax revenues for the U.S. Inflows are a catalyst for growth, in other
words—near term and long term. 0 20 40 60 80 100
Percent
Exports, Brands and Education
America is unique because it does so many things well. Case in point: Reflecting the underlying Source: Drehmann, M. and V. Sushko (2022),"The global
competitiveness of the U.S. economy and its breadth of capabilities, U.S. exports of goods and foreign exchange market in a higher-volatility
services hit a record high of $3 trillion in 2022, according to the Bureau of Economic Analysis. environment," BIS Quarterly Review, pp 36-37. Data as of
April 10, 2023.
That’s a staggering sum of commerce for a nation that is hardly dependent on exports for
growth—trade is more of a residual in America, not a driver. Think of it this way: What America
sells to the rest of the world in a year is roughly equivalent to the total output of the Indian
economy. And it’s well in excess of the total output of such nations as South Korea, Spain and
Mexico.
What is America peddling to the rest of the world? Answer: plenty. Think capital goods
($572 billion last year), industrial supplies ($8106 billion), consumer goods ($246 billion), food
and beverages ($208 billion), and autos and auto parts ($158 billion). Add to this list soaring U.S.
energy exports (a record $269 billion) and record service exports (roughly $1 trillion), with the
latter encompassing everything from transport to telecommunications, business services to
financial services. Rarely discussed and not understood by investors, America is a trading
superpower, a fact that is hugely supportive of the long-term earnings potential of the S&P 500.
America is also a brands superpower. Indeed, despite intense global competition, America’s
global brand presence has become stronger over the past few years. Of the top 10 global
brands in 2023, eight of 10 were American, according to a report by BrandZ, which ranks the
top 100 most valuable global brands. Brands matter: They carry intangible value for firms and
rank as a key and critical “soft power” capability of the U.S.
And higher education matters as well, with the U.S. a global leader in producing skilled and
productive capital via its first-class universities. The top-ranked universities in the world are in
the U.S.; indeed, 27% of the universities in the Quacquarelli Symonds World Rankings’ top 100
universities for 2023 were located in America; five out of the top 10, and 9 out of the top 20,
were American universities.

3
The United Nations.

4 of 7 July 3, 2023 – Capital Market Outlook RETURN TO FIRST PAGE

A Tech Goliath Like No Other
While China has made significant technological strides over the past decade, the U.S. remains
the world’s technology leader owing to the nation’s risk-taking, not-afraid-to-fail
entrepreneurial culture that underpins America’s leadership in both technology and innovation.
America is the largest market in the world for information technology (IT) spending on
Exhibit 4: Largest Companies’ Market
hardware, software and services, according to International Data Corporation estimates. It’s
Capitalizations Measure Up to Full
also the largest market in the world for e-commerce, according to figures from the UN. Its
Economies' GDPs.
digital economy, according to figures from the Bureau of Economic Analysis, is already valued
at $3.7 trillion, a figure only expected to grow as the boom in artificial intelligence kicks into
Apple
higher gear over the balance of this decade. Meanwhile, no one spends more on research &
development as a percentage of GDP than America, with the U.S. figure totaling 3.5% in 2021, France
according to the Organisation for Economic Co-operation and Development. The comparable
figure for China was 2.4%, and it was 2.15% for the EU. Finally, according to the 2022 Network Microsoft
Readiness Index, which measures how prepared countries are to leverage the opportunities Russia
offered by technological innovation, the U.S., not surprisingly, ranked number one. 4 On it goes.
The bottom line: America remains a global innovation giant, a fact not lost on investors given Amazon

the outsized effect of the “Magnificent Seven” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Indonesia
Tesla and Meta) on market returns this year. As Exhibit 4 highlights, the market cap of some of
America’s leading technology giants is greater than the output of many industrialized nations. NVIDIA
Due in part to the capabilities of these companies, in particular, and America’s technology eco- Saudi Arabia
system in general, the U.S. remains as one of the most competitive economies in the world. 0.0 1.0 2.0 3.0
Trllions of USD
The Investment Implications
The point of all the above is not to stoke the patriotic fires the week of America’s birthday. And Source: Drehmann, M. and V. Sushko (2022),"The global
by the same token, nor are we oblivious to the multiple challenges in front of America—a foreign exchange market in a higher-volatility
crumbling physical infrastructure, burdensome entitlement expenditures, the rising cost to environment," BIS Quarterly Review, pp 36-37. Data as of
service America’s debt, an unwieldy healthcare system, anti-trade and immigration sentiment April 10, 2023. For illustrative purposes only.
—that’s just for starters. Of particular concern, overall life expectancy in the U.S. has declined
for three years in a row, reversing a half-century of gains, with the ongoing opioid crisis chiefly
to blame. So yes, just as there are many things right about America, there are a lot of things
wrong that need fixing—and fast.
Rather, our narrative leans against American declinism and the perception that we hear often
from investors that the nation is in decline and heading in the wrong direction. This
misguided diagnostic can lead to investment paralysis, hesitation when it’s time to rebalance
portfolios, time out of the market, and other characteristics that undercut long-term
investment returns. It can also influence asset allocations, with many investors running to
money market funds this year not knowing that over the post-war era stretching from 1945
to 2022, the S&P 500 has handily outperformed other asset classes, posting annualized total
returns of 11.2%. That’s well in excess of the average annual gains of corporate credit
(5.7%), government bonds (5.1%), cash (3.8%) and inflation (3.7%). The key takeaway: Stay in
the market, with a bias toward U.S. Equities.
Finally, we’ll end where we began—with another insight from Chancellor Otto von Bismarck. As
a military strategist, Bismarck knew all too well the importance of geography—it’s advantages
and disadvantages, and how the fate of nations can be shaped and reshaped by contested
borders. Just ask Ukraine. As we enter a new period of hard power geopolitics, geography
matters—to future economic growth, corporate earnings and market returns. It’s the world we
live in. That said, the U.S. again stands out from the rest of the world. Per Bismarck, “the
Americans are very lucky people. They’re bordered to the north and south by weak neighbors,
and to the east and west by fish.”
We’re still on top. Don’t buy or believe the American defeatist narrative. If you do, you’re
shortchanging the most dynamic economy in the world……and your portfolio.

4
See “The Network Readiness Index, 2022.” Portulans Institute, Washington DC.

5 of 7 July 3, 2023 – Capital Market Outlook RETURN TO FIRST PAGE

MARKETS IN REVIEW

Equities
Total Return in USD (%) Economic Forecasts (as of 6/30/2023)
Current WTD MTD YTD 2022A Q1 2023A Q2 2023E Q3 2023E Q4 2023E 2023E
DJIA 34,407.60 2.0 4.7 4.9 Real global GDP (% y/y annualized) 3.6* - - - - 3.0
NASDAQ 13,787.92 2.2 6.7 32.3 Real U.S. GDP (% q/q annualized) 2.1 2.0 1.5 1.0 0.5 1.8
S&P 500 4,450.38 2.4 6.6 16.9
CPI inflation (% y/y) 8.0 5.8 4.1 3.3 2.9 4.0
S&P 400 Mid Cap 2,622.34 4.3 9.2 8.8
Core CPI inflation (% y/y) 6.1 5.6 5.3 4.6 4.0 4.8
Russell 2000 1,888.73 3.7 8.1 8.1
Unemployment rate (%) 3.6 3.5 3.6 3.7 3.9 3.7
MSCI World 2,966.72 2.2 6.0 15.1
Fed funds rate, end period (%) 4.33 4.83 5.13 5.63 5.63 5.63
MSCI EAFE 2,131.73 1.7 4.6 11.7
MSCI Emerging Markets 989.48 0.0 3.8 4.9 The forecasts in the table above are the base line view from BofA Global Research. The Global Wealth & Investment
Management (GWIM) Investment Strategy Committee (ISC) may make adjustments to this view over the course of the
Fixed Income† year and can express upside/downside to these forecasts. Historical data is sourced from Bloomberg, FactSet, and
Total Return in USD (%) Haver Analytics. There can be no assurance that the forecasts will be achieved. Economic or financial forecasts are
Current WTD MTD YTD inherently limited and should not be relied on as indicators of future investment performance.
A = Actual. E/* = Estimate.
Corporate & Government 4.80 -0.18 -0.32 2.21
Sources: BofA Global Research; GWIM ISC as of June 30, 2023.
Agencies 4.93 -0.25 -0.48 1.64
Municipals 3.52 -0.02 1.00 2.67
U.S. Investment Grade Credit 4.81 -0.26 -0.36 2.09 Asset Class Weightings (as of 6/1/2023) CIO Equity Sector Views
International 5.48 0.15 0.41 3.21
CIO View CIO View
High Yield 8.50 0.83 1.67 5.38
Asset Class Underweight Neutral Overweight Sector Underweight Neutral Overweight
90 Day Yield 5.28 5.29 5.39 4.34 neutral yellow

Global Equities
Overweight green

    Healthcare    
2 Year Yield 4.90 4.74 4.40 4.43 Neutral yellow

U.S. Large Cap Growth

Slight overweight green

    Energy    
10 Year Yield 3.84 3.73 3.64 3.87 Slight overweight green

U.S. Large Cap Value    

Slight overweight green

30 Year Yield 3.86 3.81 3.86 3.96 neutral yellow

Utilities    
US. Small Cap Growth    
neutral yellow
Consumer Neutral yellow

   
Commodities & Currencies US. Small Cap Value     Staples
Slight underweight orange

Total Return in USD (%) International Developed     Information Neutral yellow

   
Technology
Neutral yellow

Commodities Current WTD MTD YTD Emerging Markets    

Communication
Neutral yellow

Bloomberg Commodity 226.74 -0.7 4.0 -7.8 Global Fixed Income    

Neutral yellow

   
Slight overweight green

Services
WTI Crude $/Barrel†† 70.64 2.1 3.7 -12.0 U.S. Governments     Neutral yellow

Gold Spot $/Ounce†† 1919.35 -0.1 -2.2 5.2

neutral yellow

Industrials    
U.S. Mortgages     Neutral yellow

Financials    
Neutral yellow

U.S. Corporates    
Total Return in USD (%) slight underweight orange

Materials
Slight underweight orange

High Yield        
Prior Prior 2022 slight underweight orange

Currencies Current Week End Month End Year End U.S. Investment Grade Slight underweight orange

   
Real Estate    

EUR/USD 1.09 1.09 1.07 1.07 Tax Exempt

Slight underweight orange Consumer Underweight red

   
USD/JPY 144.31 143.70 139.34 131.12 U.S. High Yield Tax Exempt     Discretionary
neutral yellow

USD/CNH 7.27 7.22 7.12 6.92 International Fixed Income    

Cash
S&P Sector Returns CIO asset class views are relative to the CIO Strategic Asset Allocation (SAA) of a multi-asset portfolio.
Source: Chief Investment Office as of June 1, 2023. All sector and asset allocation recommendations must be considered in the
Real Estate 5.1% context of an individual investor's goals, time horizon, liquidity needs and risk tolerance. Not all recommendations will be in the
Energy 4.8% best interest of all investors.
Materials 4.0%
Industrials 3.9%
Financials 3.0%
Information Technology 2.9%
Consumer Discretionary 2.5%
Utilities 0.7%
Consumer Staples 0.6%
Healthcare 0.6%
Communication Services 0.4%
0% 1% 2% 3% 4% 5% 6%

Sources: Bloomberg; Factset. Total Returns from the period of

6/23/2023 to 6/30/2023. †Bloomberg Barclays Indices. ††Spot price
returns. All data as of the 6/30/2023 close. Data would differ if a
different time period was displayed. Short-term performance shown
to illustrate more recent trend. Past performance is no guarantee
of future results.

6 of 7 July 3, 2023 – Capital Market Outlook RETURN TO FIRST PAGE

Index Definitions
Securities indexes assume reinvestment of all distributions and interest payments. Indexes are unmanaged and do not take into account fees or expenses. It is not possible to invest
directly in an index. Indexes are all based in U.S. dollars.
S&P 500 Index is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.
Dow Jones Industrial Index is a stock market index of 30 prominent companies listed on stock exchanges in the United States.
Network Readiness Index is an index published annually by the World Economic Forum in collaboration with INSEAD, as part of their annual Global Information Technology Report. It aims to
measure the degree of readiness of countries to exploit opportunities offered by information and communications technology.
MSCI USA Index is designed to measure the performance of the large and mid cap segments of the US market.
MSCI Germany Index is designed to measure the performance of the large and mid cap segments of the German market.
MSCI Emerging Market Index captures large and mid cap representation across 24 Emerging Markets (EM) countries.
MSCI World ex USA Index captures large and mid cap representation across 22 of 23 Developed Markets (DM) countries* excluding the United States.
MSCI Japan Index is designed to measure the performance of the large and mid cap segments of the Japanese market.
MSCI China Index measures large and mid-cap representation across China securities listed on the Shanghai and Shenzhen exchanges.
Corporate Credit/Bloomberg U.S. long corporate is designed to measure the performance of U.S. corporate bonds that have a maturity of greater than or equal to 10 years.
Government Bonds/ Bloomberg Intermediate U.S. Treasury Index measures US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury with maturities of 1 to 9.9999 years to
maturity.
Inflation/Consumer Price Index (CPI) measures the overall change in consumer prices based on a representative basket of goods and services over time.
Cash/U.S. Treasury Bill Index is an index based on recent auctions of U.S. Treasury bills and is commonly used as a benchmark when determining interest rates, such as mortgage rates.

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The Chief Investment Office (“CIO”) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions
oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp.").
The Global Wealth & Investment Management Investment Strategy Committee (“GWIM ISC”) is responsible for developing and coordinating recommendations for short-term and long-term
investment strategy and market views encompassing markets, economic indicators, asset classes and other market-related projections affecting GWIM.
BofA Global Research is research produced by BofA Securities, Inc. (“BofAS”) and/or one or more of its affiliates. BofAS is a registered broker-dealer, Member SIPC and wholly owned subsidiary of
Bank of America Corporation.
All recommendations must be considered in the context of an individual investor’s goals, time horizon, liquidity needs and risk tolerance. Not all recommendations will be in the best interest of all
investors.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the
companies or markets, as well as economic, political or social events in the U.S. or abroad. Stocks of small-cap companies pose special risks, including possible illiquidity and greater price volatility
than stocks of larger, more established companies. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or
economic developments and yields and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice versa. Bonds are subject to interest
rate, inflation and credit risks. Treasury bills are less volatile than longer-term fixed income securities and are guaranteed as to timely payment of principal and interest by the U.S. government.
Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other
developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector
concentration. There are special risks associated with an investment in commodities, including market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes
and the impact of adverse political or financial factors. Investing directly in Master Limited Partnerships, foreign equities, commodities or other investment strategies discussed in this document,
may not be available to, or appropriate for, clients who receive this document. However, these investments may exist as part of an underlying investment strategy within exchange-traded funds
and mutual funds.
Nonfinancial assets, such as closely-held businesses, real estate, fine art, oil, gas and mineral properties, and timber, farm and ranch land, are complex in nature and involve risks including total loss
of value. Special risk considerations include natural events (for example, earthquakes or fires), complex tax considerations, and lack of liquidity. Nonfinancial assets are not in the best interest of all
investors. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax,
or estate planning strategy.
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