WELCOME

Quarterly Webinar

2019 Mid-Year UpdateMarket & Plan Performance

July 30, 2019

David BaskinPresident and Founder, Baskin Wealth Management (BWM)

TODAY’S SPEAKERS

Stephanie BergerDirector of Marketing and Communications, RPB

G. Leonard TeitelbaumChair, RPB Board of Trustees

Opening Remarks

Market Update

Plan Performance

Next Steps

AGENDA

OPENING REMARKS

2019 MID-YEAR MARKET UPDATE

Q2 2019 Overall Market PerformanceMacro Equity Fixed Income Real Assets

USDollar VIX US

10-YrS&P500

MSCIEAFE

MSCIEM

USAgg.

High Yield

DollarEMD Oil Gold REITS

-1.2% 1.4% -0.4% 4.3% 3.7% 0.6% 3.1% 2.5% 4.1% -3.3% 9.0% 1.7%

Global equities rallied during Q2—with the US leading the way—as the market perceived a dovish monetary policy stance from the US Federal Reserve Bank (the Fed) and other central banks

Market expectations for several interest rate cuts from the Fed intensified based on low inflation data, a weaker global economic growth outlook, and uncertain US-China trade relations

Global bond yields continued to declined, with longer duration bonds shifting materially lower, reflecting concerns over the global growth outlook

Real assets performed well with higher gold prices but lower oil prices

Q2 2019 Market Details – Interest Rates

CentralBanks

CurrentRate

CPIYOY Notes from the Quarter

FederalReserve

2.25% -2.50% 1.8%

The Fed held its benchmark interest rate at 2.25% - 2.50% in March and June; signaled possible cuts later this year.

EuropeanCentralBank

0.0% 1.2%The ECB maintained current benchmark interest rate and plans to boost commercial lending

Bank ofJapan -0.1% 0.7%

The BoJ will continue its ultra-easy QE* program with inflation remaining well below target

*Quantitative Easing – a monetary policy in which a central bank purchases government securities or other securities from the market in order to increase the money supply and encourage lending and investment.

Bonds of many European countries are yielding negative returns

Source: FactSet

Q2 2019 Market Details – Fixed Income

Developed MarketGovt. Bond Yields 6-Month 1-Year 2-Year 3-Year 5-Year 7-Year 10-Year 15-Year 30-Year

Germany -0.58% -0.69% -0.76% -0.76% -0.66% -0.57% -0.33% -0.12% 0.27%Austria -0.76% -0.73% -0.68% -0.63% -0.48% -0.25% -0.05% - 0.67%Finland -0.62% -0.64% -0.66% -0.66% -0.53% -0.39% -0.03% - 0.54%France -0.54% -0.62% -0.69% -0.68% -0.51% -0.31% -0.01% 0.36% 0.94%Japan -0.18% -0.21% -0.22% -0.23% -0.25% -0.25% -0.16% 0.05% 0.37%Netherlands - -0.67% -0.67% -0.72% -0.65% -0.42% -0.16% -0.01% 0.29%Switzerland - -0.85% -0.88% -0.89% -0.86% -0.72% -0.54% - 0.00%Belgium - -0.58% -0.68% -0.64% -0.40% -0.24% 0.07% 0.41% 1.03%Portugal -0.54% -0.50% -0.43% -0.31% -0.17% 0.22% 0.47% - 1.36%Denmark - - -0.75% -0.68% -0.64% - -0.26% - -Sweden -0.40% - -0.63% - -0.53% -0.39% 0.02% - -Spain - - -0.43% -0.40% -0.16% 0.07% 0.39% - 1.38%Italy -0.08% -0.06% 0.21% 0.80% 1.34% 1.54% 2.08% 2.53% 3.07%Australia - 1.04% 0.97% 0.95% 1.00% 1.15% 1.32% 1.44% 1.92%Canada 1.69% 1.70% 1.47% - 1.39% 1.41% 1.46% - 1.68%Hong Kong 1.81% 1.63% 1.57% 1.48% 1.39% 1.40% 1.43% - -New Zealand 1.63% - 1.18% - 1.26% 1.25% 1.57% - -Norway 1.26% - 1.23% - 1.24% 1.31% 1.43% - -Singapore 1.66% 1.64% 1.61% 1.67% 1.76% 1.89% 2.00% - 2.58%United Kingdom 0.75% 0.70% 0.67% 0.60% 0.62% 0.68% 0.83% 1.18% 1.46%United States 2.10% 1.94% 1.73% 1.69% 1.75% 1.87% 2.00% - 2.53%

Best first half for stocks since 1997; second half could be more muted

Source: FactSet

-40%

-30%

-20%

-10%

0%

10%

20%

30%

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

S&P 500 Cumulative Returns

First Half

Q2 2019 Market Details – Equities

2019 Asset Quilt – Diversification Matters

LegendAlerian MLP TR USDMaster Limited Partnerships Index

BBg Barc US Agg Bond TR USDDiversified US Investment Grade Bond Index

BBgBarc US Corporate High Yield TR USDHigh Yield Bonds Index

FTSE NAREIT Equity REITs TR USDReal Estate Investment Trust Index

FTSE Treasury Bill 3 Mon USDShort Term Gov't Debt Index

MSCI EAFE NR USDDeveloped Market International Stock Index

MSCI EM NR USDEmerging Markets Stock Index

Russell 3000 TR USDUS Stock Market Index

US Late Market Business Cycle DynamicsTrends in key indicators show the US economy has transitioned from mid- to late-cycle

US Late Market Business Cycle DynamicsBut, not all of the key indicators suggest a US recession is imminent

Key Indicator Expected Late Cycle Behavior Current Trend*

Fed Funds Rates Rising Stable

Yield Curve Flattening Flattening

Economic Growth Moderating Moderating

Output Gap Near/Above Potential Rising

Inflation Rising Falling

Unemployment Falling/Bottoming Falling

Equities Peaking Rising

Credit Yield Spreads Stable/Rising FallingSource: NEPC; trend represents changes over the previous two quarters

Late-cycle does not have to mean end of cycle; positive economic data may support continued US economic expansion and further equity gains

However, a late cycle typically dampens relative performance and there may be greater need to seek portfolio balance

Volatility may increase based on expected versus actual interest rate cuts, as well as uncertainty about US-China trade policy

Tier 1 funds are designed to protect you in down markets

Market Summary

2019 MID-YEAR PLAN UPDATE

2019 Year-To-Date Tier 1 Investment ReturnsJanuary 1, 2019 through June 30, 2019; Tier 1 returns are net of investment management fees

**50/50 MSCI ACWI (IMI)/Bloomberg Barclays Global Agg through March 31, 2015; 60/40 MSCI ACWI (IMI)/Bloomberg Barclays Global Agg through September 30, 2016; 60/40 MSCI ACWI (IMI)/Bloomberg Barclays U.S. Agg through September 30, 2017; 55/45 MSCI ACWI (IMI)/Bloomberg Barclays U.S. Agg thereafter.***Barclays Global Aggregate January 1, 2013 through September 30, 2016, Barclays US Aggregate thereafter.

.

15.9% 16.1%

11.9% 11.7%

7.1%6.1%

1.1% 1.2%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

CapitalAppreciation

Fund

MSCI ACWIIMI Net USD

Appreciationand Income

Fund

55% MSCIACWI

IMI(Net)/45%BLM BC USAgg Blend

IncomeFocused Fund

BloombergBarclays USAggregate

Fund

CapitalPreservation

Fund

FTSE T-Bill 3Months TR

Tier 1 Funds – An Overview

m Capital Appreciation Fund

Income Focused Fund

Appreciation & Income Fund

Capital Preservation Fund

Objective Growth Income Balance of growth and income

Stability of principal

Primarilyinvests in:

Equities:

• US stocks

• International developed stocks

• Emerging markets stocks

Fixed Income:

• US bonds

• Unconstrained fixed Income

• Capital Appreciation Fund 55%

• Income Focused Fund 45%

• Insurance-wrapped bonds

• Cash and cash equivalents

To diversify, also invests in:

• US bonds• Real assets

• US stocks• Real assets

(Diversifiers included as part of each fund)

Diversified funds with less volatility than the broad market index

For more details about fund holdings, visit rpb.org/factsheets

Standard Deviation – Volatility (lower is less risky) Since Inception: January 1, 2013 through June 30, 2019

*50/50 MSCI ACWI (IMI)/Bloomberg Barclays Global Agg through March 31, 2015; 60/40 MSCI ACWI (IMI)/Bloomberg Barclays Global Agg through September 30, 2016; 60/40 MSCI ACWI (IMI)/Bloomberg Barclays U.S. Agg through September 30, 2017; 55/45 MSCI ACWI (IMI)/Bloomberg Barclays U.S. Agg thereafter.**Barclays Global Aggregate January 1, 2013 through September 30, 2016, Barclays US Aggregate thereafter.

.

10.4%

11.4%

6.8% 6.9%

3.1%

3.9%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

CapitalAppreciation Fund

MSCI ACWI IMINet USD

Appreciation andIncome Fund

55% MSCI ACWIIMI(Net)/45% BLMBC US Agg Blend

Income FocusedFund

BBgBarc USAggregate Blend

TR

2019 Year-to-Date Tier 2 Investment ReturnsJanuary 1, 2019 through June 30, 2019; Tier 2 returns are net of investment management fees

18.5%18.5%19.6% 19.5%

13.9%13.8%12.3%12.2%

19.4%17.1%

6.1% 6.1%

10.0%9.9%

3.3%3.6% 3.5%3.6%

17.7%16.2%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

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Know which funds you’re invested in:Log in to InfoExpress

Click on ‘My Balance’

Does your investment allocation meet your risk tolerance, time horizon, objectives?

If not, adjust your allocations accordingly

For financial counseling, call LifeWorks: 800-533-5690

Next Steps

Thank You!

Questions? Email us at askus@rpb.org