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Page 1: EMERGING MARKETS EQUITY Investments - SSQ Presentation...% of Exports to US MEXICO AND US MIDTERMS Top chart source: Bloomberg as of 6/22/2018. Bottom chart source: US Census Bureau,

TM

EMERGING MARKETS EQUITY

Page 2: EMERGING MARKETS EQUITY Investments - SSQ Presentation...% of Exports to US MEXICO AND US MIDTERMS Top chart source: Bloomberg as of 6/22/2018. Bottom chart source: US Census Bureau,

Fisher Investments Camas, WA Headquarters Fisher Investments Woodside, CA Office

Fisher Investments EuropeLondon Headquarters

Fisher Investments Branch Office Dubai International Financial Centre

Fisher Investments AustralasiaSydney Office

Fisher Investments JapanTokyo Office

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FI SH ER IN VEST MEN T S TM

INSTITUTIONAL GROUP

PAGE

3

Firm Overview

Market Outlook

Appendix

4

9

23

TABLE OF CONTENTS

Inside cover photographs: Two offices of FI are located in Washington and California, USA. The London, UK office is the headquarters of Fisher Investments Europe, Limited, FI’s wholly owned subsidiary in England. The Dubai International Financial Centre  office is a branch office of FI. Fisher Investments Australasia Pty Ltd (FIA) is FI’s wholly‐owned subsidiary based in Sydney, Australia. Fisher Investments Japan (FIJ) is FI’s wholly‐owned subsidiary based in Tokyo, Japan

Page 4: EMERGING MARKETS EQUITY Investments - SSQ Presentation...% of Exports to US MEXICO AND US MIDTERMS Top chart source: Bloomberg as of 6/22/2018. Bottom chart source: US Census Bureau,

FI SH ER IN VEST MEN T S TM

INSTITUTIONAL GROUP

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4

Firm Overview

Market Outlook

Appendix

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5

FISHER INVESTMENTS

Experienced Founded by Ken Fisher in 1979

• Contributes to consistency of investment results

Independent 100% Fisher employee and family‐owned

• Aligns the interests of our employees with our clients

• Helps retain key investment professionals

FocusedAsset management is our business

• Reduces potential for conflicts of interest and competition for resources

Complete Investment Process Top‐down approach accounts for three critical decisions helping to maximize probability of excess

return

AN OVERVIEW

Investment Policy Committee membersʹ average experience at FI: 24 years

As of 06/30/2018.

● Over C$129 billion in assets under management

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6

INVESTMENT POLICY COMMITTEE

William Glaser Ken Fisher Aaron Anderson Jeffery Silk Michael HansonExecutive VP of Executive Chairman, Senior VP of Vice Chairman, Senior VP of

Portfolio Management Co‐CIO Research Co‐CIO Research

18 years at 39 years at 13 years at 35 years at 16 years atFisher Investments Fisher Investments Fisher Investments Fisher Investments Fisher Investments

As of 06/30/2018. Please see additional disclosures in the Appendix. 

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Three Critical Decisions

Country and sector decisions enhance security selection odds

THREE PRIMARY DETERMINANTS OF PORTFOLIO RETURN

Stock

Country Sector

EMERGING MARKETS EQUITY

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8Percentage breakdown of the absolute factor contributions to MSCI Emerging Markets’ performance based on annual returns, from01/01/2008 through 12/31/2017. Source: MSCI Barra Portfolio Manager, GEM2L model.

TOP‐DOWN INVESTING IN EMERGING MARKETS

0%

20%

40%

60%

80%

100%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Average (2

008‐

2017)

% of A

bsolute Con

tribution to Return

Country & Currency Style Sector Equity Specifics

Top‐down factors explain almost 

90% of theMSCI EMʹs return

since 2007

On average, over the past 10 years, top‐down factors accounted for almost 90% of MSCI EM’s returns.

*Excluding the World equity factor from GEM2L

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9

Firm Overview

Market Outlook

Appendix

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Source: FactSet and Fisher Investments Research as of August 2018. MSCI EM indexed to 100 December 1987. 

RECENT EM CALM LONGEST IN HISTORYEM equities tend to experience more frequent corrections or bear markets than developed. The unusually long calm period between the end of the last EM bear and this year’s downturn was the longest in the category’s history.

Start End EM Calm Period (Trading Days)01/22/2016 01/25/2018 67008/25/1992 02/10/1994 53501/17/1991 04/16/1992 45612/31/1987 06/01/1989 40703/12/2003 04/11/2004 397

0

200

400

600

800

1000

1200

1400

1600

Dec 1987

Dec 1989

Dec 1991

Dec 1993

Dec 1995

Dec 1997

Dec 1999

Dec 2001

Dec 2003

Dec 2005

Dec 2007

Dec 2009

Dec 2011

Dec 2013

Dec 2015

Dec 2017

MSCI EM Price Index

EM Bear EM Correction MSCI EM (Price)

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Currency leadership shifts periodically and is nearly impossible to time. The US dollar’s strength has posed a recent headwind to EM equity returns – however, many fail to recognize EM returns in USD actually outperform returns in local currencies during most of the current bull market.

Source: FactSet as of 08/31/2018. 

DOLLAR’S MUTED IMPACT OVER THIS BULL

0%

50%

100%

150%

200%

250%

2009 2011 2013 2015 2017

Cum

ulative Inde

x To

tal R

eturn (%

)

Axis Title

MSCI EM (USD) MSCI EM (Local)

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EM PERFORMANCE DURING US RATE HIKESEM does not necessarily underperform when the Fed tightens monetary policy

Source: FactSet  as of 08/31/2018.

‐50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

2001 2003 2005 2007 2009 2011 2013 2015 2017

Cum

ulative Inde

x To

tal R

eturn (%

)

US Fed Rate Hikes MSCI EM Cumulative Index Return

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EM CURRENT ACCOUNT BALANCESEM current account balances have significantly improved since the taper tantrum.

Source: FactSet  as of 06/30/2018.

‐8%

‐4%

0%

4%

8%

12%

16%

20%

24%

28%

32%

Qatar

UAE

Taiwan

Malaysia

South Korea

Russia

Philippines

China

Hungary

Thailand

Mexico

Czech Republic

Pakistan

Indonesia

Peru

Brazil

Colombia

Egypt

Poland

Greece

Chile

India

South Africa

Turkey

Current Account Balance / GDP (%)

As of 6/30/2018 As of 12/31/2012Current Account Balance as % of GDP

Current Account Balances as a % of GDP for the Fragile 5 (India, Brazil, Indonesia,South Africa and Turkey) 

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With the recent additional Chinese tariffs, duties as a percentage of total US imports for consumption rose just 0.79% ‐much smaller than most major historical tariff hikes... 

Top Chart Source: US International Trade Commission, as of 6/4/2018. US duties as a percentage of imports for consumption, daily, 1/31/1891 ‐ 12/30/2016. Projections based off estimates, daily, 1/31/2017 – 5/31/2018. Bottom Chart Source: IMF as of 1/3/2018. Worst‐case tariff impact from the Office of US Trade Representative, White House and US Bureau of Economic Analysis, 6/28/2018. 

RELATIVE TO HISTORY, NEW TARIFFS LACK SCALE

…and the worst‐case tariff impact is not enough to cause a Wallop

$65

$70

$75

$80

$85

Global GDP (in tillions of USD)

2018: +$5.1 trillion (est.)

2017: $79.3 trillion 

To cause a global recession in 2018, a Wallop would need to knock at least $5.1 trillion from global GDP

0

5

10

15

20

25

30

1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

US Duties as % of Imports for Consumption Major Tariff Hikes

Increase from China, steel & aluminium tariffs at 2.29%

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EM usually outperforms in the 6 months following US midterm elections. As current trade war fears dissipate, US midterms should boost EM performance.

Source: FactSet as of 06/29/2018. Data from 05/01/1926 – 05/04/2014. Based on MSCI EM Index price returns in USD.

‐10%

‐5%

0%

5%

10%

15%

20%

25%

30%

Midterm Yrs. Presidential Yrs. Non‐Election Yrs.*

Annualized  6mo. Price Return

6 mo. Prior to Election 6 mo. Following Election

EM OUTPERFORMANCE POST US MIDTERMS

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72%21%

17%13%13%12%11%7%5%

MexicoChinaIndia

MalaysiaBrazilKorea

IndonesiaSouth Africa

Russia

% of Exports to US

MEXICO AND US MIDTERMS

Top chart source: Bloomberg as of 6/22/2018.Bottom chart source: US Census Bureau, US BEA. Share of Foreign Exports to Mexico for 2017 – the latest available data. 

Being the most exposed to US protectionism, Mexico has the most to gain from passing midterms. 

GOP States trading with Mexico have most to lose from a trade war.

0%

5%

10%

15%

20%

25%

30%

35%

40%

TX AZ

MI

MO IL CA WI

TN CO IN OH

MN LA PA NC

GA

MA NJ

CT

VA FL MD

NY

WA

OR

Top 25 US States by GDP

Share of Foreign Exports to Mexico 

Voted for Trump Voted for Clinton

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EM VALUATIONS ARE ATTRACTIVEEM valuations are at a favorable discount to their developed peers.

Source: FactSet, as of 6/30/2018. Based on monthly forward valuations.

 5.0 7.0 9.0 11.0 13.0 15.0 17.0 19.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PE vs. 5 Year Average

MSCI Emerging Markets IndexMSCI World IndexMSCI World Index 5 year avg

 1.0

 1.5

 2.0

 2.5

 3.0

 3.5

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PB vs. 5 Year AverageMSCI Emerging Markets IndexMSCI World IndexMSCI World Index 5 year avg

 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PSR vs. 5 Year Average MSCI Emerging Markets IndexMSCI World IndexMSCI World Index 5 year avg

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EM EASTERN EUROPE’S BENEFITS OF PROXIMITY

Top chart source: FactSet as of 4/30/2018. Based on monthly data points. Bottom chart source: FactSet as of 7/31/2018. Data indexed to 1 in January 2003.

Performance in Eastern Europe is heavily linked to developed Europe’s demand growth.

Further, EM Europe’s relative performance to the MSCI EM is highly correlated to that of developed Europe’s relative performance to the MSCI World.

‐60%

‐30%

0%

30%

60%

‐40%

‐20%

0%

20%

40%

60%

2000 2002 2004 2006 2008 2010 2012 2014 2016

Eastern Europe Exports to EU Y/Y % (Left Axis) MSCI Eastern Europe x Russia Y/Y% ‐ MSCI EM Y/Y% (Right Axis)

Eastern Europe Exports to the EU Account for 75‐85% of Total Exports

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2003 2005 2007 2009 2011 2013 2015 2017

MSCI Eastern Europe x Russia / MSCI EM (Left Axis) MSCI EMU / MSCI World (Right Axis)

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EMERGING MARKETS INTERNET SOFTWARE AND SERVICESEM Information Technology should benefit from robust global IT spending driven by the growing demand for products and services related to mobile, cloud computing and the “Internet of Things”. Internet Software & Services has grown rapidly as a percentage of the EM Information Technology Index over time.  

Source: FactSet GeoRev and Oxford Economics as of December 2017. Big Pharma is based on MSCI World Pharmaceuticals Biotechnology & Life Sciences constituents.

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CHINESE INFORMATION TECHNOLOGY

Top Chart Source: National Bureau of Statistics China. Data is for 2016 – the latest available period.Bottom Chart Source: Factset, Inc. as of 7/31/2018. Gross Margin is shown for the top 10 industries by weight in the MSCI China index and is calculated by taking the aggregates of constituents’ last twelve month gross income divided by last twelve month sales. Excluding Financials.

We remain overweight to consumption and service‐related portions of the Chinese economy, notably, Information Technology. There is room for future growth in online retail activity. With penetration rates below 50%, growth rates remain strong in both deeply penetrated and less penetrated regions. 

Information Technology represents about 40% of the MSCI China. Technology tends to be higher margin, a characteristic we favor in the later stages of a bull market. Software & Services contains the highest gross margins of all industries in the MSCI China. 2018 global IT services and enterprise software spending is expected to grow in excess of global GDP, driven primarily by trends in cloud computing. 

0102030405060

Software& Services

Pharma,Biotech&Life

Sciences

TelecomServices

Real Estate ConsumerServices

MSCI China Utilities Energy Retailing CapitalGoods

TechHardware

&Equipment

Gross Margin (%)

0% 10% 20% 30% 40% 50% 60%

BeijingShanghaiZhejiang

GuangdongFujianJiangsuShaanxiTianjin

Online Retail Sales as a % of Total Retail Sales Growth Rate of Online Retail Sales (Y/Y %)

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BIG PHARMA’S BIG EM OPPORTUNITYHuge swathes of EM populations are breaching key income thresholds, allowing for the purchase of pharmaceuticals and medical devices for the first time. Developed world Pharma sees an increasing share of their revenues come from EM.  

Source: FactSet GeoRev and Oxford Economics as of December 2017. Big Pharma is based on MSCI World Pharmaceuticals Biotechnology & Life Sciences constituents.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$0

$200

$400

$600

$800

$1,000

$1,200

2002 2004 2006 2008 2010 2012 2014 2016

Big Pharmaʹs Revenues Derived in EM (Left Axis)

EM GDP per Capita (Right Axis)

Revenue Growth (10 Year  Ann.) Share of Revenues ʹ17 Share of Revenues ʹ07EM 13% 14% 11%DM 4% 79% 84%

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SOUTH KOREAN EXPORT DEMAND

FactSet as of 07/31/2018.

Global expansion drives demand for Korea’s exports – supporting Korean equities.

‐30%‐20%‐10%0%10%20%30%40%50%

40

45

50

55

60

65

2010 2012 2014 2016 2018

Average EU PMI & US ISM (Left Axis)

Korea Export Growth 3MMA Y/Y (Right Axis)

600

1,100

1,600

2,100

2,600

3,100

 15 20 25 30 35 40 45 50 55

2008 2010 2011 2013 2015 2016

Korean Exports in $M (Left Axis)

KOSPI Price Level (Right Axis)

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Firm Overview

Market Outlook

Appendix

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PERFORMANCE

The foregoing information is based on the FIIG EM composite, which was incepted on 04/01/2006 and is benchmarked against the MSCI EM index. Performance is preliminary. Preliminary performance is subject to the final reconciliation of accounts and deduction of any outstanding advisory fees, which will have the effect of lowering performance by the amount of the deductions. Performance results are inclusive of dividends, royalties, interest and other forms of accrued income. Gross returns are gross of advisory fees and net of brokerage or other commissions. See full net of fees performance and important disclosures in the Appendix. MSCI EM returns sources: Eagle Investment Systems, LLC & FactSet. Data in CAD. 

FISHER EMERGING MARKETS EQUITY COMPOSITE

Gross of Fee Returns

MSCI Emerging Markets IndexFisher Emerging Markets Equity

‐2.8%

6.6%

8.2%

12.1%

8.0%6.7%

8.4%

‐2.0%

9.6%

7.4%

9.8%

6.0%4.9%

6.0%

169.6%

104.7%

‐50.0%

0.0%

50.0%

100.0%

150.0%

200.0%

‐5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Year‐to‐Date(06/30)

Trailing 1Year

Trailing 3Years

(Annualized)

Trailing 5Years

(Annualized)

Trailing 7Years

(Annualized)

Trailing 10Years

(Annualized)

SinceInception(04/06)

(Annualized)

SinceInception(04/06)

(Cumulative)

AS OF 06/30/2018

Fisher Emerging Markets Equity composite performance net of fees: cumulative return (since inception, 04/06), 151.8%.

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CONSISTENCY OF EXCESS RETURN

The foregoing information is based on the FIIG EM composite, which was incepted on 04/01/2006 and is benchmarked against the MSCI EM Index.  Performance is preliminary. Preliminary performance is subject to the final reconciliation of accounts and deduction of any outstanding advisory fees, which will have the effect of lowering performance by the amount of the deductions. Each point represents the intersection of the respective performance period and computation frequency referenced in the sub header of Fisher Investments Institutional Group Emerging Markets Equity composite and MSCI EM Index using data for the period indicated above. Performance is inclusive of dividends, royalties, interest and other forms of accrued income. Returns are gross of advisory fees and net of brokerage or other commissions. MSCI EM Index sources: FactSet and Eagle Investment Systems LLC. Please see the performance disclosure in the Appendix. Data in CAD. 

ANNUALIZED 3‐YEAR PERFORMANCE ROLLED MONTHLY

Fisher Investments Emerging Markets Equity (Gross)

MSCI Emerging Markets Index

‐10%

0%

10%

20%

30%

‐10% 0% 10% 20% 30%

Outperform MSCI Emerging Markets

Underperform MSCI Emerging Markets

Since Inception, as of 06/30/2018

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PERFORMANCE ATTRIBUTION

Performance is preliminary. Preliminary performance is subject to the final reconciliation of accounts and deduction of any outstanding advisory fees, which will have the effect of lowering performance by the amount of the deductions. Based on a representative Fisher Investments Institutional Group Emerging Markets (FIIG EM) portfolio, including cash. Please see the representative portfolio disclosure and full performance history in the Appendix. Portfolio characteristics listed above are shown as supplemental information to the FIIG EM composite. The FIIG EM composite, which was incepted on 1 April 2006, is benchmarked against the MSCI Emerging Markets Index. Barra Ex‐Ante Active Risk is calculated using MSCI Barra’s Aegis Portfolio Manager system. Equity Selection Risk is Barra’s Asset Selection factor while the combination of Market Timing and Common Factor risk make up Top Down Risk. Variance of Return is calculated using Eagle Investment Systems (Brinson attribution methodology). equity selection reflects the difference between the sum of both the country and sector allocations from the total excess return. Variance: for a given factor, absolute value of excess return divided by sum of absolute value of total excess return for all three factors. Average variance of return: average of annual variance of return for each factor. “Average” is calculated as a weighted average of the periods shown. Sources: Eagle Investment Systems LLC, MSCI Barra Aegis Portfolio Manager. Data in USD.

EX ANTE RISK IS ALIGNED WITH EX POST RETURN

Ex Ante Active Risk (Barra)Ex Post Return

As of 06/30/2018

Country, 38% Sector, 26% Stock, 36%Top Down Risk, 58% Bottom Up Risk, 42%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Average

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

Country Sector Stock Top Down Risk Bottom Up Risk

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INVESTMENT PROFESSIONALS

Owen Muehlfeld                                      Vice President, Portfolio Specialist 16 years at Fisher InvestmentsOwen serves as a liaison between the Investment Policy Committee and FI’s institutional clients and consultants. In this role, Owen communicates portfolio strategy, market outlook, performance, and conducts ad hoc research projects. Prior to joining Fisher Investments, Owen worked as a financial adviser for UBS Financial Services.

BIOGRAPHIES

Benjamin Kothe Vice President, Relationship Manager 17 years at Fisher Investments Ben serves as a liaison between the Investment Policy Committee and our institutional clients and their investment consultants. In this role, Ben communicates portfolio strategy, market outlook, performance, stock analysis and conducts ad hoc research projects. Prior to his current role, Ben was the Vice President of Marketing & Analytics where he oversaw the firm’s global institutional marketing efforts. Previously, Ben was an Investment Counselor responsible for maintaining relationships with high‐net‐worth private clients, as well as a Group Manager within Investment Operations where he supervised back office activities.

Scott Botterman Research Analyst, Capital Markets 11 years at Fisher Investments Scott generates fundamental and quantitative macroeconomic research for use in the investment process. Scott is also a member of the Portfolio Engineering Team focused on the FIIG Emerging Market Equity strategies. He previously worked in the Research Group as an analyst on the Securities Research and Research Analytics and Production Teams conducting company specific research and performance analysis for the Investment Policy Committee.

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DISCLOSURESEMERGING MARKETS EQUITY PERFORMANCE

Fisher Investments Institutional Group claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. The firm has been independently verified for the periods January 01, 1990 through December 31, 2016.  Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm‐widebasis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Fisher Investments Institutional Group Emerging Markets Equity Composite has been examined for the periods April 01, 2006 through December 31, 2016.  The verification and performance examination reports are available upon request. Performance is preliminary as of September 06, 2018.

1. Fisher Asset Management, LLC, doing business as Fisher Investments (FI), is an investment adviser registered with the US Securities and Exchange Commission.  As of August 31, 2018 FI managed assets valued over $131 billion. FI maintains two principal business units – Fisher Investments Institutional Group (FIIG) and Fisher Investments Private Client Group (FIPCG).  FIPCG services substantially all private client accounts managed by FI and FIIG services substantially all institutional accounts managed by FI (including those accounts sub‐managed for Fisher Investments Europe and Fisher Investments Australasia). The Investment Policy Committee is responsible for all strategic investment decisions for both business units.2. The FIIG Emerging Markets Equity composite consists of accounts managed against the MSCI Emerging Markets Index (MSCI EM) with a view towards capital appreciation.3. MSCI Emerging Markets Index is a free float‐adjusted market cap‐weighted index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of 24 emerging market country indices. Unless otherwise specified, returns shown include dividends after deducting estimated withholding taxes. MSCI calculates estimated withholding taxes using the maximum rate of the constituent company’s country of incorporation applicable to non‐resident institutional investors that do not benefit from double‐taxation treaties.

*Total FI Institutional Assets and % of FI Institutional Assets represent assets within Fisher Investments Institutional Group strategies only. 

Year

Gross Annual 

Return (%)Net Annual Return (%)

Benchmark Return (%)

Number of Portfolios

Composite Dispersion

Total Strategy Assets at End of Period (CAD millions)

FI Institutional Assets* (CAD millions)

% of FI Institutional Assets*

Composite Trailing 3 Year 

Standard Deviation

Benchmark Trailing 3 Year 

Standard Deviation

2018 (31/08) ‐4.6% ‐5.0% ‐3.4% ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐2017 30.3% 29.5% 28.3% 27 0.9% C$23,354 C$55,377 42.2% 13.4% 12.9%2016 2.7% 2.2% 7.3% 30 1.2% C$18,360 C$45,544 40.3% 13.1% 12.6%2015 7.5% 7.0% 2.0% 26 1.3% C$15,713 C$42,977 36.6% 11.8% 11.4%2014 11.9% 11.2% 6.7% 20 0.7% C$9,449 C$32,624 29.0% 11.4% 11.5%2013 13.1% 12.4% 4.3% 16 0.6% C$3,705 C$25,494 14.5% 14.7% 14.2%2012 12.0% 11.4% 14.8% 13 0.5% C$2,657 C$18,924 14.0% 16.9% 15.1%2011 ‐14.6% ‐15.1% ‐16.5% 15 0.9% C$988 C$14,065 7.0% 19.4% 17.0%2010 19.5% 18.9% 12.7% 11 0.5% C$731 C$13,695 5.3% ‐‐ ‐‐2009 61.3% 60.3% 54.1% 7 0.8% C$257 C$12,434 2.1% ‐‐ ‐‐

TrailingSince Inception (Annualised) 8.1% 7.5% 5.8%

Trailing 1 Year 1.9% 1.3% 3.3%Trailing 3 Years 11.2% 10.5% 10.7%Trailing 5 Years 11.8% 11.2% 9.6%Trailing 7 Years 9.0% 8.3% 7.1%Trailing 10 Years 7.6% 7.0% 5.6%

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DISCLOSURESEMERGING MARKETS EQUITY PERFORMANCE

4. For the period from April 1, 2006 through September 30, 2007, performance for this composite was determined using time‐weighted rates of return, with valuation on at least a monthly basis and geometric linking of periodic returns. On October 1, 2007, Fisher Investments adopted a new performance calculation system using time‐weighted rates of return, with valuation on a daily basis and geometric linking of periodic returns. Valuations are based on trade date. Neither leverage nor derivatives have been used in obtaining performance. Returns reflect the reinvestment of dividends, royalties, interest and other forms of accrued income. Composite performance is presented net of foreign withholding taxes on dividends, interest income and capital gains. Withholding taxes may vary according to each investorʹs domicile. Net performance figures are presented after deduction of actual management fees and are inclusive of performance based fees where applicable.5. Valuations and returns are computed in US Dollars (USD) and converted to Canadian Dollars (CAD). Prior to October 1, 2007, composite returnconversions utilized exchange rates provided by Thomson Reuters. Canadian T‐Bill returns were provided by Global Financial Data, Inc. Benchmark exchange rates were provided by MSCI. The exchange rates provided might differ as a result of their source. On October 1, 2007, Fisher Investments adopted a new performance calculation system that utilized Bloomberg exchange rates for all currency converted values. As of February 1, 2014, Fisher Investments utilizes WM/Reuters exchanges rates provided by FactSet for all currency converted values. This includes converting US T‐bill and all trailing returns to CAD.6. The dispersion of annual returns is measured by the asset‐weighted standard deviation across portfolio returns gross of fees represented within the composite for the full year.  The composite dispersion is shown as N/A when there is 1 or fewer accounts in the composite for the full calendar year.7. Fisher Investments Institutional Group standard US dollar fee schedule for Emerging Markets Equity (also listed in Part 2A of Fisher Investments’ Form ADV) is: 1.00% on the first $25 million, 0.95% on the next $25 million, 0.90% on the next $50 million, 0.85% on the next $50 million, and negotiable beyond $150 million.8. Fisher Investments Institutional Group standard Canadian dollar fee schedule for Emerging Markets Equity is: 1.00% on the first $25 million, 0.95% on the next $25 million, 0.90% on the next $50 million, 0.85% on the next $50 million, and negotiable beyond $150 million.ʺ9. This composite was created in April 200610. A list of FIIG composite descriptions is available upon request.11. The policies regarding valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.12. From March 2014 to September 2014, individual portfolio cash flows (either cash or in‐kind legacy holdings) greater than 50% of portfolio assets were placed in temporary accounts until the assets were implemented or disbursed, and performance of these temporary accounts were excluded from the composite.  Effective October 2014, the cash flow criteria was updated to either 50% of portfolio assets or $500 Million USD.13. Three year annualized ex‐post standard deviation is measured using asset‐weighted monthly composite returns gross of fees. 14. Investment in securities involves the risk of loss.  Past performance is no guarantee of future returns. Other methods may produce different results, and the results for individual portfolios and for different periods may vary depending on market conditions and the composition of the portfolio.

GIPS® is a registered trademark of CFA Institute. CFA Institute has not been involved in the preparation or review of this report.

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FIRM

DISCLOSURES

Fisher Investments (FI) is an investment adviser registered with the Securities and Exchange Commission. As of June 30, 2018, FI managed over C$129billion, including  assets sub‐managed for its wholly‐owned subsidiaries. FI and its subsidiaries maintain four principal business units – Fisher InvestmentsInstitutional Group (FIIG), Fisher Investments Private Client Group (FIPCG), Fisher Investments International (FII), and Fisher Investments 401(k)Solutions Group (401(k) Solutions). These groups serve a global client base of diverse investors including  corporations, public  and multi‐employer  pension funds, foundations and endowments, insurance companies, healthcare organizations, governments and high‐net‐worth individuals. FI’s Investment Policy  Committee (IPC) is responsible for investment decisions for all investment strategies.

For purposes of defining  “years with Fisher Investments,” FI was established as a sole proprietorship in 1979, incorporated in 1986, registered with the US  SEC in 1987, replacing  the prior registration of the sole proprietorship, and succeeded its investment adviser registration to  a limited liability  company  in 2005. “Years with Fisher Investments” is calculated using  the date on which FI was established as a sole proprietorship through June 30, 2018.

FI is wholly  owned by  Fisher Investments, Inc . Since Inception, Fisher Investments, Inc . has been 100% Fisher‐family  and employee owned, currently  Fisher Investments Inc. benefic ially  owns 100% of Fisher Investments (FI), as listed in Schedule A to  FI s Form ADV  Part 1. Ken Fisher beneficially  owns more than 75% of Fisher Investments, Inc. as noted in Schedule B to  FI s Form ADV  Part 1.

REPRESENTATIVE PORTFOLIOThe foregoing information is based on a representative portfolio (rather than a composite or an average of a group of portfolios), excluding cash,unless otherwise denoted. This representative portfolio information is derived from an actual client portfolio. Clients’ portfolio characteristics maydiffer given the various investment restrictions, cash requirements and other circumstances that can apply to particular clients. Portfolioinformation is as of the dates indicated, and no assurances can be given that it has not changed or that it will not change in the future.

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