The TheBigEasy Easy

LiveWebcasthostedby:
JeffreyGundlach
ChiefExecutiveOfficer

March5,2013

FundOfferings
TotalReturnBondFund RetailandInstitutionalClass NoLoadMutualFund Retail Inst. Nshare Ishare Ticker MinInvestment MinIRAInvestment GrossExpenseRatio DLTNX $2,000 $500 0.76% DBLTX $100,000 $5,000 0.51% Ticker MinInvestment MinIRAInvestment Gross ExpenseRatio CoreFixedIncomeFund RetailandInstitutionalClass NoLoadMutualFund Retail Inst. Nshare Ishare DLFNX $2,000 $500 0.80% DBLFX $100,000 $5,000 0.55%

TheFundsinvestmentobjectives,risks,chargesandexpensesmustbeconsideredcarefullybeforeinvesting.The prospectuscontainsthisandotherimportantinformationabouttheFunds,anditmaybeobtainedbycalling1 (877)3546311/1(877)DLINE11,orvisitingwww.doublelinefunds.com.Readitcarefullybeforeinvesting.

Investmentsindebtsecuritiestypicallydecreaseinvaluewheninterestratesrise.Thisriskisusuallygreaterforlongertermdebtsecurities. InvestmentsinAssetBackedandMortgageBackedSecuritiesincludeadditionalrisksthatinvestorsshouldbeawareofsuchascreditrisk,prepaymentrisk, possibleilliquidityanddefault,aswellasincreasedsusceptibilitytoadverseeconomicdevelopments.Investmentsinlowerratedandnonratedsecurities presentagreaterriskoflosstoprincipalandinterestthanhigherratedsecurities securities.TheCoreFundinvestsinforeignsecuritieswhichinvolvegreatervolatility andpolitical,economicandcurrencyrisksanddifferencesinaccountingmethods.
TheTotalReturnBondFundintendstoinvestmorethan50%ofitsnetassetsinmortgagebackedsecuritiesofanymaturityortype. Opinionsexpressedaresubjecttochangeatanytime,arenotforecastsandshouldnotbeconsideredinvestmentadvice. DoubleLineFundsaredistributedbyQuasarDistributors,LLC. WhiletheFundsarenoload,managementfeesandotherexpensesstillapply.Pleaserefertotheprospectusforfurtherdetails. PastPerformancedoesnotguaranteefutureresults.Indexperformanceisnotillustrativeoffundperformance.Aninvestmentcannotbemadeinanindex.

Performance
DoubleLineTotalReturnBondFund QuarterEndingDecember31,2012
SinceInception 1Year Annualized Annualized (4610to123112) 9.16% 12.89% 9.00% 12.63% 4 21% 4.21% 6 33% 6.33%

Ishare Nshare B l USAggregate Barclays A t I Index d AsofDecember31,2012 GrossSEC30DayYield NetSEC30DayYield

December 0.23% 0.30% 0.14% 0 14% Ishare 4.35% 4.35% Ishare 0.51%

4Q2012 0.79% 0.82% 0 21% 0.21% Nshare 4.10% 4.10% Nshare 0.76%

MorningstarIntermediateTermBondFundRankings* AsofDecember31,2012 Ishare Nshare 1Year(AbsoluteRank) 245of1,165 261of1,165 1Year(%Rank) 21% 23% Fortheperiodending123112,MorningstarrankedtheTotalReturn BondFundinthe21stand23rdpercentile(fortheIandNshareclasses, respectively)amongthe1,165FundsintheIntermediateTermBondFund category t based b dontotal t t lreturns. t

GrossExpenseRatio

Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.Theinvestmentreturnandprincipal valueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheoriginalcost.Current performanceofthefundmaybelowerorhigherthantheperformancequoted.Performancedatacurrenttothemostrecentmonthendmaybe obtainedbycalling2136338200orbyvisitingwww.doublelinefunds.com.

BarclaysUSAggregateIndexrepresentssecuritiesthatareSECregistered, registered taxable, taxable anddollardenominated denominated.Theindexcoversthe USinvestmentgradefixedrate bondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbackedsecurities.Thesemajorsectors aresubdividedintomorespecificindicesthatarecalculatedandreportedonaregularbasis.Itisnotpossibletoinvestinanindex. PastPerformancedoesnotguaranteefutureresults.Indexperformanceisnotillustrativeoffundperformance.Aninvestmentcannotbemadeinanindex. *Morningstarrankings(%Rank)representafund'stotalreturnpercentilerankrelativetoallfundsthathavethesameMorningstarcategory.Thehighest percentilerankis1andthelowestis100.MorningstarRankings(Absolute)representafundstotalreturnrankrelativetoall fundsthathavethesameMorningstar g y Thehighest g rankis1andthelowestisbasedonthetotalnumberoffundsinthecategory. g y ItisbasedonMorningstar g totalreturn, ,whichincludesboth Category. incomeandcapitalgainsorlossesandisnotadjustedforsaleschargesorredemptionfees. 2012MorningstarInc.AllRightReserved.Theinformationcontainedherein:(1)isproprietarytoMorningstar;(2)maynotbecopiedordistributed;and(3)isnot warrantedtobeaccurate,completeortimely.NeitherMorningstarnoritscontentprovidersareresponsibleforanydamagesorlossesarisingfromanyuseofthis 2 information.

Performance

DoubleLineCoreFixedIncomeFund QuarterEndingDecember31,2012
1Year Annualized 8.15% 7.89% 4.21% SinceI Si Inception i Annualized (6110to123112) 10.55% 10.27% 5.71%

Ishare Nshare BarclaysUSAggregateIndex AsofDecember31,2012 GrossSEC30DayYield NetSEC30DayYield

December 0.06% 0.04% 0.14% Ishare 3.15% 3.15% Ishare 0.55%

4Q2012 0.87% 0.81% 0.21% Nshare 2.90% 2.90% Nshare 0.80%

MorningstarIntermediateTermBondFundRankings* AsofDecember31,2012 Ishare Nshare 1Year(AbsoluteRank) 360of1,165 399of1,165 1Year(%Rank) 31% 34% Fortheperiodending123112,MorningstarrankedtheCoreFixedIncome BondFundinthe31stand34thpercentile(fortheIandNshareclass, respectively) p y)among gthe1,165 , FundsintheIntermediateTermBondFund categorybasedontotalreturns.

GrossExpenseRatio

Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults.Theinvestmentreturnandprincipal valueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheoriginalcost.Current performanceofthefundmaybelowerorhigherthantheperformancequoted.Performancedatacurrenttothemostrecentmonthendmaybe obtainedbycalling2136338200orbyvisitingwww.doublelinefunds.com.

BarclaysUSAggregateIndexrepresentssecuritiesthatareSECregistered,taxable,anddollardenominated.Theindexcoversthe USinvestmentgradefixedrate bondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbackedsecurities.Thesemajorsectors aresubdividedintomorespecificindicesthatarecalculatedandreportedonaregularbasis.Itisnotpossibletoinvestinanindex. PastPerformancedoesnotguaranteefutureresults.Indexperformanceisnotillustrativeoffundperformance.Aninvestmentcannotbemadeinanindex. *Morningstarrankings(%Rank)representafund'stotalreturnpercentilerankrelativetoallfundsthathavethesameMorningstarcategory.Thehighest percentilerankis1andthelowestis100.MorningstarRankings(Absolute)representafundstotalreturnrankrelativetoall fundsthathavethesameMorningstar C t Category. The Th hi highest h trank kis i 1and dth thel lowest ti isb based donth thet total t lnumber b of ff funds d i inth thecategory. t Iti isb based donM Morningstar i t total t t lreturn, t which hi hincludes i l d both b th incomeandcapitalgainsorlossesandisnotadjustedforsaleschargesorredemptionfees. 2012MorningstarInc.AllRightReserved.Theinformationcontainedherein:(1)isproprietarytoMorningstar;(2)maynotbecopiedordistributed;and(3)isnot warrantedtobeaccurate,completeortimely.NeitherMorningstarnoritscontentprovidersareresponsibleforanydamagesorlossesarisingfromanyuseofthis 3 information.

Announcements WebcastNews
JeffSherman March19,2013
MultiAssetGrowth 1:15pmPDT/4:15pmEDT

PhilipBarach April2,2013
LowDurationBondFund 1:15pmPDT/4:15pmEDT

LuzPadilla May7 7,2013

EmergingMarketsFixedIncome 1:15pmPDT/4:15pmEDT

ToReceivePresentationSlides: Youcanemail fundinfo@doubleline com fundinfo@doubleline.com

4

The TheBigEasy Easy

LiveWebcasthostedby:
JeffreyGundlach
ChiefExecutiveOfficer

March5,2013

TABI
GovernmentSpending

Trade,ExchangeRates,BudgetsandInterestRates
AsofOctober20,2012

Germany

Source:http://www.economist.com/news/economicandfinancialindicators/21564865 TheEconomist,Trade,exchangerates,budgetbalancesandinterestrates,October20,2012 GDP=Themonetaryvalueofallthefinishedgoodsandservicesproducedwithinacountry'sbordersinaspecifictimeperiod,thoughGDPisusuallycalculatedonanannual basis.

GlobalPublicDebttoTaxRatios
AsofDecember31,2010

Germany

ComparingCentralBanksBalanceSheets
January1,1995throughJanuary31,2013
4500 4000 3500 3000 BillionsofUSD B D 2500 2000 1500 1000 500 0 4500

ComparingCentralBankBalanceSheets BillionsofUSD
FederalReserve BankofJapan BankofEngland EuropeanCentralBank S i N Swiss National ti lB Bank k

4000 3500 3000 2500 2000 1500 1000 500 0

Source:Bloomberg,DoubleLine Capital

DevelopedWorldQuantitativeEasing(QE)asa PercentageofGDP(January1,2007throughFebruary28,2012)

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/102/20121029_CB5_1.png HowCentralBankPolicyImpactsAssetPricesPart5:HowFarCanTheyGo?TylerDurden,October29,2012.
F d USFederal Fed F d lReserve R BoJ =BankofJapan ECB=EuropeanCentralBank BoE=BankofEngland GDP=GrossDomesticProduct.Themonetaryvalueofallthefinishedgoodsandservicesproducedwithinacountrysbordersinaspecifictimeperiod,butcalculatedon anannualbasis.

10

CentralBanksBalanceSheetsvs.Gold
January31,1995throughJanuary31,2013 2000 1800 1600 1400
PriceGoldU USD 45000

GoldPrice
40000

BalanceSheets:FED, FED BOE BOE, BOJ,ECB,PBoC,SNB,CBR

35000 30000 25000 20000 15000 10000 5000 0 Billi ionsUSDBalanc ceSheets
11

1200 1000 800 600 400 200 0

GoldPrice=Goldspotpricequotedintroyounces. Fed USFederalReserve PBoC =PublicBankofChina BoJ =BankofJapan SNB=SwissNationalBank ECB=EuropeanCentralBank CBR=CentralBankofRussia BoE=BankofEngland Source:Bloomberg,DoubleLineCapital

GlobalFiscalSurplustoGDP
AsofDecember31,2010

Germany

GDP=Themonetaryvalueofallthefinishedgoodsandservicesproducedwithinacountry'sbordersinaspecifictimeperiod,thoughGDPisusuallycalculatedonanannual basis. BIS=BureauofindustryandSecurity

12

NetWorthinFinancialAssetsbyCountry
AsofDecember31,2012

Source:OrganizationforEconomicCooperationandDevelopment(OECD),GoldmanSachsEquityResearchThebestofFortnightThoughts,December13,2012

13

JapansGovernmentDebttoAnnualGDP
January1,2002throughJanuary31,2013

%ofGDP

%ofGDP P

Germany

Source:http://www.tradingeconomics.com/japan/gdpgrowthannual GDP=Themonetaryvalueofallthefinishedgoodsandservicesproducedwithinacountry'sbordersinaspecifictimeperiod,thoughGDPisusuallycalculatedonanannual basis.

14

JapansGovernmentSpending
January1,2002throughJanuary31,2013

InJPYBillion

InJPYBillion

Germany

Source:http://www.tradingeconomics.com/japan/gdpgrowthannual JPY=JapaneseYen

15

JapansBirthrate
January1,1967throughJanuary31,2013

Per1,000People P e

Per1,000Peop ple

Germany

Source:http://www.tradingeconomics.com/japan/gdpgrowthannual Crudebirthrateindicatesthenumberoflivebirthsoccurringduringtheyear,per1,000populationestimatedatmidyear.

16

JapansTradeBalance
June28,1985throughDecember31,2012

Germany

Source:BloombergFinancialServices

17

NikkeiYields
January1,2000throughOctober31,2012 TheNikkeiisnowevenofferingyieldsaboveJapanesegovernmentbondsandtheUSS&P500yield

Yield(%)

Yield(%)

Germany Year

Source:BloombergFinancialServices Nikkei225IndexTotalReturn=Anindexshowingtheaverageclosingpricesof225stocksontheTokyoStockExchange. Aninvestmentcannotbemadeinanindex.

18

Nikkeivs.JapaneseGovernmentBonds
December31,2009throughFebruary28,2013 1.20
I Indexed Grow wthof1Yen (Decemb ber31,2009 February28,2013) NIKKEI225TotalReturn(JPY) MerrillLynch y Japanese p GovernmentTotalReturn Index(JPY)GOYO

1.15 1.10 1.05 1.00 0.95 0.90 0 85 0.85 0.80 0.75 Germany

$1.17 $1.08

Source:Bloomberg l b Financial i i lServices, i Merrill illLynch hIndices di denominated d i din i JapaneseYen(JPY). ( ) Nikkei225IndexTotalReturn=Anindexshowingtheaverageclosingpricesof225stocksontheTokyoStockExchange. GOYO=BofA/MerrillLynchJapaneseGovernmentBondIndexTheBofA MerrillLynchJapanGovernmentIndextrackstheperformanceofJPYdenominatedsovereigndebt publiclyissuedbytheJapanesegovernmentinitsdomesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremaining termtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingofJPY200billion. Thischartillustratestheperformanceofahypothetical1Yeninvestmentmadeintheseindexeson123109.Thischartdoesnot implyanyfutureperformance. Aninvestmentcannotbemadeinanindex.

19

JapaneseIndexvs.S&P500Growthof$1
December29,1989throughFebruary28,2013

$5.84

NIKKEI225TotalReturn(USD) S&P500TotalReturnIndex(USD)

$0.55

Source:BloombergFinancialServices,DoubleLineCapitalLPdenominatedinUSdollar. Nikkei225IndexTotalReturn=Anindexshowingtheaverageclosingpricesof225stocksontheTokyoStockExchange. S&P500Indexisacapitalizationweightedindexof500stocks. Thischartillustratestheperformanceofanhypothetical$1investmentmadeinthetwoindexeson122989.Thischartdoesnot implyanyfutureperformnace. Aninvestmentcannotbemadeinanindex.

20

Nikkeivs.S&P500 Last10Years
March5,2003throughMarch4,2013

Germany

Source:BloombergFinancialServices,DoubleLineCapitalLP Nikkei225IndexTotalReturn=Anindexshowingtheaverageclosingpricesof225stocksontheTokyoStockExchange. SPX=S&P500Indexisacapitalizationweightedindexof500stocks. Aninvestmentcannotbemadeinanindex.

21

12MonthJPYvs.5yearJPY
AsofMarch4,2013

Source:BloombergFinancialServices,DoubleLineCapitalLPdenominatedinU.S.Dollars JPY=TheNYSEArca JapanIndexisapriceweightedindexof210commonstockstradedontheTokyoStockExchangerepresentingabroadselectionofindustries. Aninvestmentcannotbemadedirectlyinanindex.

22

JapaneseConsumerConfidence
January1,2010throughJanuary31,2013

http://bonddad.blogspot.com/2013/02/japaneseconsumerconfidencemakes.html JCOMSHCF=JapaneseConsumerConfidenceindex.SubjecttoonemonthlagreleasedbytheEconomicandSocialResearchInstitute.

23

U.S.Surplus/DeficitAsAPercentageofGNP/GDP
December31,1790throughDecember31,2011

Source:http://www.ritholtz.com/blog/wpcontent/uploads/2012/12/surplusdeficitgnp.png GrossNationalProduct(GNP)orGrossDomesticProduct(GDP)=ReferstothegrossDomesticProductormarketvalueofallfinal goodsandservicesproduced withinacountryinagivenperiod.

24

USDebt&GDP
January1,2009throughJune30,2012

Germany

Source:AdvisorPerspectives.com,Strrettalklive.com http://advisorperspectives.com/dshort/guest/LanceRoberts121118CeilingsCliffsandTAG.php GDP=GrossDomesticProduct.Referstoallofthegoodsandservicesproducedinaneconomy.

25

DebtTransferfromPrivatetoPublic

http://online.wsj.com/article/SB10001424127887324906004578287810277763042.html GDP=GrossDomesticProduct.Theamountofgoodsandservicesproducedwithinagiveneconomy.

26

UnemploymentandEmploymenttoPopulationRatio
January1,2000throughDecember31,2012

EmploymenttoPopulationRatio(5)

UnemploymentratioreferstoThepercentageofthetotallaborforcethatisunemployedbutactivelyseekingemploymentandwillingtowork. EmploymenttopopulationreferstoAmacroeconomicstatisticthattakestheratioofthetotalworkingageofthelaborforcecurrentlyemployedtothe totalworkingagepopulationofaregion,municipalityorcountry.

Une employment tRate(5)

27

FederalReserveBalanceSheet
December18,2002throughApril18,2011

http://www.marketoracle.co.uk/Article29854.html,TheMarketOracle MaidenLane,AIAAuroraLLCandALICOarealllimitedpartnershipsformedbytheUSGovernmenttoallowth eFederalReservetopurchase,sellandtransferAmerican InsuranceGroup(AIG)andBearStearnsassets.TheTALFLLCwasaspecialpurposevehicletoconsolidateFederalReserveNYBalancesheet.

28

WhatDidtheAggregateQEProgramsGiveus?
Reflation ofequityprices,althoughhalflifeisdiminishingalongwiththemagnitudeoftherally

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/102/20121029_CB1_1.png QE=QuantitativeEasingprograms.
Source:Bloomberg,DoubleLine Capital

29

PerformanceSinceInceptionQE2
October4,2011throughMarch4,2013

Source:BloombergFinancialServices CRY=TR/JCRBCommoditiesExcessReturnIndexisanarithmeticaverageofcommodityfuturesprocesswithmonthlyrebalancing. SPX=Standard&Poors500Indexisacapitalizationweightedindexof500stocks.Theindexisdesignedtomeasureperformance ofthebroaddomesticeconomy. TLT=iShares Barclays20+YearTreasuryBondFundinanexchangetradedfundincorporatedintheUSA. Youcannotinvestdirectlyinanindex.

30

LaborParticipationRatesbyAgeGroup
January1,1990through2020ProjectedEstimates

Source:CalculatedRiskBlog http://www.calculatedriskblog.com/2012/10/understandingdeclineinparticipation.html

31

InflationComparison
January1,1978throughSeptember30,2012

http://globaleconomicanalysis.blogspot.com/2012/08/tradingcapsandgownsformopswhygo.html

32

%ofDebtBalance90+DaysDelinquent
January1,2003throughMarch31,2012

http://www.cnbc.com/id/49983471

33

%of90+DayDelinquentStudentLoans
December31,2002throughSeptember30,2012

34

StudentTuitionCostsvs.AverageGraduateEarnings
June30,2000throughJune30,2010

35

TABII
BloodlessVerdictoftheMarket

BofA/MerrillFixedIncomeIndexReturns
Grey=Year2012 Blue=YearToDate2013
Convertibles(VOSO) HighYield(JOAO) InternationalEmerging(IGOV) 1.43% Corporate(COAO) InternationalDeveloped(NOGO) Mortgages(MOAO) Government(G0A0) 0.14% 0.20%
37

13.63% 4.74% 1 84% 1.84% 15.44% 18.30% 0.14% 3.28% 0.49% 2 59% 2.59% 2.19% 9.52%

DataSource:BofA/MerrillLynchIndicesthroughyearendDecember31,2012andyeartodate2013throughMarch1,2013. PleaseseetheAppendixforindexdefinitions.Aninvestmentcannotbemadedirectlyinanindex.

BofA/MerrillFixedIncomeIndexReturns
Grey=Y G Year2012 Blue=YearToDate2013
CCCRatedHighYield(JOA3) BBRatedHighYieldCredit(JOA1) BRatedHighYield(JOA2) BBBRatedCredit(COA4) ARatedCredit(COA3) AAARatedCredit(COA1) 0.42% 19.70% 3.65% 14.36% 1.26% 1.75% 0.29% 0.03% 15.03% 11.98% 9.82%

3.97%

DataSource:BofA/MerrillLynchIndicesthroughyearendDecember31,2012andyeartodate2013throughMarch1,2013. PleaseseetheAppendixforindexdefinitions.Aninvestmentcannotbemadedirectlyinanindex. InvestmentGrade d =Indices d rated dAAAtoBBB (shown (h above) b )areconsidered d dtobe b investmentgrade. d Abond b disconsidered d dinvestmentgrade d if fitscredit d ratingisBBB or higherbyStandard&PoorsorBaa3byMoodys.Thehighertherating,themorelikelythebondistopaybackatpar/$100cents onthedollar.AAAisconsideredthehighest qualityandthelowestdegreeofrisk.Theyareconsideredtobestableanddependable. BelowInvestmentGrade=Alsoknownasjunkbond(shownabove)isasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas havinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinorder to makethemattractive.Theyarelesslikelytopay backatpar/$100centsonthedollar. Aninvestmentcannotbemadedirectlyinanindex.

38

Eurovs.S&P500Index
May23,2011throughMarch42013

Source:BloombergFinancialServices S&P500indexisabasketof500stocksthatareconsideredtobewidelyheld.Itisweightedbymarketvalueanditsperformanceisthoughttoberepresentativeofthestockmarketas awhole. Euro=TheofficialcurrencyoftheEuropeanUnion(EU)memberswhohaveadopteditincluding:Austria,Belgium,Finland,France,Germany,Greece,Ireland,Italy,Luxembourg,the 39 Netherlands,NewZealand,Portugal,andSpain. Aninvestmentcannotbemadedirectlyinanindex.

S&P500IndexandShanghaiIndex
July11,2011throughMarch4,2013

Source:BloombergFinancialServices,DoubleLineCapitalLP S&P500indexisabasketof500stocksthatareconsideredtobewidelyheld.Itisweightedbymarketvalueanditsperformanceisthoughttoberepresentativeofthestock marketasawhole.SPXTistheS&P500indexnettotalreturnindex. SHCOMP=TheShanghaiStockExchangeCompositeisacapitalizationweightedindextrackingdailypriceperformanceofallAandBshareslistedontheShanghaiStock Exchange.ThisindexwasdevelopedDecember19,1990withabasevalueof100. Aninvestmentcannotbemadedirectlyinanindex.

40

ShanghaiIndex
December31,2009throughMarch42013

Source:BloombergFinancialServices,DoubleLineCapitalLP Note:TheShanghaiStockExchangeCompositeisacapitalizationweightedindextrackingdailypriceperformanceofallAandBshareslistedontheShanghaiStock Exchange.ThisindexwasdevelopedDecember19,1990withabasevalueof100. Aninvestmentcannotbemadedirectlyinanindex.

41

GoldSpotIndex
YearEnd2007throughMarch4,2013

Source:BloombergFinancialServices,DoubleLineCapitalLP Aninvestmentcannotbemadedirectlyinanindex.

42

CRBCommodityIndex
YearEnd2007throughFebruary28,2013

Source:BloombergFinancialServices,DoubleLineCapitalLP Note:TheTR/JCRBCommodityExcessReturnIndexisanarithmeticaverageofcommodityfuturespriceswithmonthlyrebalancing. Aninvestmentcannotbemadedirectlyinanindex.

43

TABIII
HousingandMBSMarketTrends

HomeownershipRate
December31,1965throughDecember31,2012

Source:BloombergFinancialServices Homeownershipaffordabilitymeasuredquarterlyandsubjecttoaonemonthlag. Aninvestmentcannotbemadedirectlyinanindex.

4545

MortgageRefinancingIndex
January4,2002throughFebruary22,2013

Source:BloombergFinancialServices MortgageRefinancingIndexasmeasuredbytheMortgageBankersAssociation.Reflectsthenumberofapplicationsforrefinance.Notallapplicationsareaccepted. Aninvestmentcannotbemadedirectlyinanindex.

4646

30YearU.S.MortgageRates
December31,2007throughMarch1,2013

Source:BloombergFinancialServices,Bankrate.com ILM3NAVG=TheOvernightNationalAverageoftheU.S.30yearTreasuryinterestrate.Theyhelpconsumersseethemovementof ratesdaytoday.Subjecttoone daylag.

4747

HomePriceIndexLevelsandYearOverYearChange
January1,2000andJanuary1,2001throughOctober2012

S&P/CaseShiller HomePriceIndex

CoreLogic NationalHousing PriceIndex

S&P/CaseShiller HomePriceIndex

CoreLogicNational HousingPriceIndex

Source:BloombergFinancialServices,CaseShiller S& /C Shiller S&P/Case Shill Home H Price i Index I d i iscomprised i dof fprice i changes h within i hi the h f following ll i subset b of f20metropolitan li markets: k 10City Ci Index I d Boston,Chicago, Chi Denver,Las L Vegas, V Los L Angeles,Miami,NewYork,SanDiego,SanFranciscoandWashingtonDC.Inadditiontothe10CityIndexitincludes:Atlanta,Charlotte,Cleveland,Dallas,Detroit,Minneapolis, Phoenix,Portland,Seattle,andTampa. CoreLogicNationalHousingPriceIndex(HPI)=CoreLogicisaleadingproviderofinformationandanalytics.Thisindexcovers 6,208zipcodes,572statisticalareasand1,027 countieslocatedinall50statesandDistrictofColumbia.Itisanationalaverage. Aninvestmentcannotbemadedirectlyinanindex.

48

48

HomePricesinMajorUSMetropolitanAreas
January1,2006throughDecember31,2012

49

ABXAAA071Index
December31,2009throughMarch4,2013

Source:BloombergFinancialServices,DoubleLineCapitalLP TheABX071AAAIndexisabasketofhomeequity.Constitutedfromreferenceobligationsissuedby20issuersofresidentialmortgagebackedsecurities. Aninvestmentcannotbemadedirectlyinanindex.

50

NonAgencyRMBS60++DelinquencyRate
January31,2005throughJanuary31,2013
60%

50% 39.4% 60++SeriousDelinq 6 quencies January2005throughJa anuary2013 40%

30%

23.4%

20%

Prime AltA Subprime

11.1%

10%

0%

SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREO status. PrimedefinedasFICO>725andLTV<75 AltAdefinedasFICO675725;orFICO>725andLTV>=75 SubprimedefinedasFICO<675 Source:LoanPerformance,Vichara,DoubleLineCapitalasofJanuary31,2013.

51

NonAgencyRMBSConditionalDefaultRate
January31,2005throughJanuary31,2013
18% 16% 14% CDR January2005throughJa anuary2013 12% 10% 8% 6% 4% 2% 0% Prime AltA Subprime 4.5% 9.3% 8.8%

Serious i Delinquencies li i is i defined d fi dby b mortgagesthat h are60++delinquency d li ratesdefined d fi dasloans l 60or90days d late l in i mortgagepayments,oralready l d i inforeclosure f l orREO status. PrimedefinedasFICO>725andLTV<75 AltAdefinedasFICO675725;orFICO>725andLTV>=75 SubprimedefinedasFICO<675 Source:LoanPerformance,Vichara,DoubleLineCapitalasofJanuary31,2013.

52

NonAgencyRMBSLossSeverity
January y31, ,2005through g January y31, ,2013
90% 80% 70% LossSeverity Januar ry2005throughJan nuary2013 60% 50% 40% 30% 20% 10% 0% Prime AltA Subprime 57.1%

72.0%

44.6%

SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREO status. PrimedefinedasFICO>725andLTV<75 AltAdefinedasFICO675725;orFICO>725andLTV>=75 SubprimedefinedasFICO<675 Source:LoanPerformance,Vichara,DoubleLineCapitalasofJanuary31,2013.

53

NonAgencyRMBSConditionalRepaymentRate
January31,2005throughJanuary31,2013
45%

40%

35%

CRR Janu uary2005throughJanuary2013

30%

25%

20% 17.6% 15% Prime AltA 5% Subprime p 2.4% 0% 7.3%

10%

SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60or90dayslateinmortgagepayments,oralreadyinforeclosureorREO status. PrimedefinedasFICO>725andLTV<75 AltAdefinedasFICO675725;orFICO>725andLTV>=75 SubprimedefinedasFICO<675 Source:LoanPerformance,Vichara,DoubleLineCapitalasofJanuary31,2013.

54

TABIV
DoubleLine bl i Funds d Overview i

TotalReturnBondFundPortfolioStatistics

Total Return BondFund AveragePrice Duration Average Life 99.38 2.81 4.23

BarclaysCapitalU.S. AggregateIndex $108.81 5.20 7.10

PortfoliostatisticsasofJanuary31,2013basedonmarketweightedaverages.Subjecttochangewithoutnotice. Averageprice=Ameasureoftheweightedaveragepricepaidforthesecuritiescalculatedbytakingthepricesanddividingbythenumberofsecuritiesanddoesnotincludecash. Averagepriceshouldnotbeconfusedwithnetassetvalue. AverageDuration =Durationisusedasariskmeasure.Itmeasuresthepricevolatilityofasecuritygivenachangeininterestratemovements. g Life=Theaverage g numberofy yearsthateachdollarofunpaid p p principal p dueonthemortgage g g remainsoutstanding. g Average g lifeiscomputed p astheweighted g average g timeto Average thereceiptofallfuturecashflows,usingastheweightsthedollaramountsoftheprincipalpaydowns. Source:DoubleLineCapitalLP

56

TotalReturnBondFundPortfolioComposition BySecurityType
CMBS 5% NonAgency Residential d lMBS 29% Cash 17%

AgencyCMO 19%

Agency Passthroughs 30%

PortfoliocompositionasofJanuary31,2013.Subjecttochangewithoutnotice. Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity. Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cashequivalentsonbalance sheetsthatmayincludesecuritiesthatmaturewithin90days. days AgencyPassThroughs=MortgagepassthroughsecuritieswhoseprincipalandinterestguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC). AgencyCMO=CollateralizedMortgageObligation(CMO)isafinancialdebtvehicle/specialpurposeentitycalledapool.Investorsbuybondsissuedbytheentityandreceivepayments accordingtoadefinedsetofrules.Themortgagesthemselvesarethecollateral,thebondsarethetranches(alsocalledclasses),andthesetofrulesthatdictateshowmoneyisreceived fromthecollateralwillbedistributediscalledthestructure.Thelegalentity,collateralandstructurearecollectivelyreferredtoasthedeal. 57 NonAgencyRMBS=ResidentialMortgagesBondSecuritiesareatypeofbondbackedbyresidentialmortgages.NonAgencymeanstheywereissuedby aprivateissuer. CMBS =CommercialMortgageBackedSecurities.Securitizedloansmadeoncommercialratherthanresidentialproperty.

TotalReturnBondFundPortfolioComposition Agencyvs.NonAgencyResidentialMortgageBacked Securities(RMBS)

NonAgency 28% Cash 17% Government 3% CMBS 5%

Agency 46%
PortfoliocompositionasofJanuary31,2013.Subjecttochangewithoutnotice. Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity. AgencyRMBS=ResidentialmortgageloansguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC).AsofJanuary31,theTotalReturnBond Fundhad31.10%FannieMaeand31.89%FreddieMac. NonAgencyRMBS=Residentialmortgagebackedsecuritiesareatypeofbondbackedbyresidentialmortgages.Nonagencymeanstheywereissuedbyaprivateissuer. CMBS =CommercialMortgageBackedSecurities.Securitizedloansmadeoncommercialratherthanresidentialproperty. 58 Government=U.S.Treasurysecurities Cash=Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds, banker'sacceptances,cashequivalentsonbalance sheetsthatmayincludesecuritiesthatmaturewithin90days.

TotalReturnBondFundPortfolioAgencyCollateralized MortgageObligation(CMO)Composition
IOCurrent,1.2% CMOLocked,11.2% Cash,16.6%

AgencyCMOComposition Cash InverseFloater PassThrough CMOCurrent CMOLocked IOCurrent IOLocked Subtotal 16.6% 0.8% 28.5% 4.4% 11.2% 1.2% 0.0% 62.74%

,4.4% CMOCurrent, InverseFloater,0.8% PassThrough,28.5%

PortfoliocompositionasofJanuary31,2013.Subjecttochangewithoutnotice. Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity. Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cashequivalentsonbalance sheetsthatmayincludesecuritiesthatmaturewithin90days. AgencyPassThroughs=MortgagepassthroughsecuritieswhoseprincipalandinterestguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC). CMOCurrent C t=Collateralized C ll t li dM Mortgage t Obligation Obli ti (CMO)is i afinancial fi i ld debt btvehicle/special hi l / i lpurposeentity tit called ll dapool. l Investors I t buy b bonds b d issued i d b bythe th entity tit and dreceive i payments t accordingtoadefinedsetofrules.Themortgagesthemselvesarethecollateral,thebondsarethetranches(alsocalledclasses),andthesetofrulesthatdictateshowmoneyisreceived fromthecollateralwillbedistributediscalledthestructure.Thelegalentity,collateralandstructurearecollectivelyreferredtoasthedeal. IO =InterestOnlymortgagepoolsinwhichtheborrowersmonthlypaymentisonlytowardtheinterestontheloan.Anonamortized loan. 59 InverseFloater=Amortgagepoolthathasayieldthatisinverselyrelatedtointerestrates. CMOLockedOut=Loansthatforasetperiodoftimewillnotreceiveprincipalpayments.

TotalReturnBondFundPortfolio NonAgencyRMBSBreakdownByOriginalRating
A BBB+ BBB 2% 0% 3% AA 1% AA+ 0% BBB 0% NR 8%

AAA 86%

Portfoliocompositionandcreditratingsasofsecurityorigination.Portfoliocompositionissubjecttochangewithoutnotice.TherearesomenonratedsecuritiesintheFundasshown inthegraphabove.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognized StatisticalRatingOrganization(S&P,Moodys,andFitch). InvestmentGrade=SecuritiesratedAAAtoBBB areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB orhigherbyStandard& PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.Thehighertherating,themorelikelythebondistopayback atpar/$100 $ centsonthedollar.AAAisconsideredthe highestqualityandthelowestdegreeofrisk.Theyareconsideredtobeextremelystableanddependable. BelowInvestmentGrade=AlsoknownasjunkbondisasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas havinghigherdefaultriskor otheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinordertomakethemattractive.They arelesslikelytopaybackatpar/$100centsonthedollar. 60 NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies. CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund. Source:DoubleLineCapitalLPasofJanuary31,2013.

TotalReturnBondFundPortfolio NonAgencyRMBSBreakdownByCurrentCreditQuality
AAA AA 5% 0% NR 8% D 14% C 0% B 3% AA+ A+ 0% 1% A AA 0% A 2% 1% BBB+ 3% BBB 1% BBB 0%

BB+ 2%

BB 1% CCC+ 7% B 3% CCC 14% B+ 2%

BB 1%

CC 11% CCC 21%

PortfoliocompositionasofJanuary31,2013.Portfoliocompositionissubjecttochangewithoutnotice.Therearesomenonratedsecuritiesintheportfolioasshowninthechart above.CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch). InvestmentGrade=SecuritiesratedAAAtoBBB (showninblueabove)areconsideredtobeinvestmentgrade.AbondisconsideredinvestmentgradeifitscreditratingisBBB of higherbyStandard&PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.Thehighertherating,themorelikely thebondistopaybackatpar/$100centsonthedollar. AAAis i considered id dthe h highest hi h quality li and dthe h lowest l degree d of frisk. i k Th Theyareconsidered id dtob beextremely l stable bl and ddependable. d d bl BelowInvestmentGrade=Alsoknownasjunkbond(showningreyabove)isasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas havinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinorder to makethemattractive.Theyarelesslikelytopaybackat par/$100centsonthedollar. CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund. NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies. Source:DoubleLineCapitalLP

61

TotalReturnBondFundPortfolio NonAgencyRMBSBreakdownByPrice
7.0% 6 0% 6.0% 5.0%

%ofFund

4 0% 4.0% 3.0% 2 0% 2.0% 1.0% 0 0% 0.0%

DollarPrice

PortfoliopricecompositionasofJanuary31,2013.Subjecttochangewithoutnotice. Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.

62

CoreFixedIncomeFundPortfolioStatistics

CoreFixedIncome Fund AveragePrice Duration Average Life $105.84 5.03 6.67

BarclaysCapitalU.S AggregateIndex $108.01 5.20 6.92

PortfoliostatisticsasofJanuary31,2013basedonmarketweightedaverages.Subjecttochangewithoutnotice. Averageprice=Ameasureoftheweightedaveragepricepaidforthesecuritiescalculatedbytakingthepricesanddividing by thenumberofsecuritiesanddoesnotincludecash. Averagepriceshouldnotbeconfusedwithnetassetvalue. AverageDuration=Durationisusedasariskmeasure.Itmeasuresthepricevolatilityofasecuritygivenachangeininterest ratemovements. g Life=Theaverage g numberofyears y thateachdollarofunpaid p principal p p dueonthemortgage g g remainsoutstanding. g Average g lifeiscomputed p astheweighted g average g timeto Average thereceiptofallfuturecashflows,usingastheweightsthedollaramountsoftheprincipalpaydowns. Source:DoubleLineCapitalLP

63

CoreFixedIncomeFundPortfolioComposition
HighYield Corporate 0.13% Commercial Mortgage Backed Securities 7.18% Cash 2.22% Government 20 34% 20.34%

Investment Grade Corporate 19.26%

Emerging Markets 12.29%

PortfoliocompositionasofJanuary31,2013.Subjecttochangewithoutnotice.

Mortgage Backed Securities 38.58%

Cash =Cashholdingincludethevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds,banker'sacceptances,cash equivalentsonbalancesheetsthatmayincludesecuritiesthatmaturewithin90days. Government=Governmentdebt(alsoknownaspublicdebtornationaldebt)ismoney(orcredit)owedbyanylevelofgovernment;eithercentralgovernment,federalgovernment, municipalgovernmentorlocalgovernment. MortgageBackedSecurities=Amortgagebackedsecurity(MBS)isanassetbackedsecurityordebtobligationthatrepresentsaclaimonthecashflowsfrom mortgageloans,most commonly l onresidential id i lproperty EmergingMarketsFixedIncome=Emergingmarketdebt(EMD)isatermusedtoencompassbondsissuedbylessdevelopedcountries. InvestmentGradeandHighYieldCorporates=Investmentgradeandnoninvestmentgradecorporatecredit.Bondsissuedbycorporationstoraisemoneyinordertoexpandits business. CreditdistributionisdeterminedfromthehighestavailablecreditratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch).AbondratedBBBor 64 higherwouldbeconsideredInvestmentGrade.AnybondratedBBBorbelowwouldbeHighYield. Source:DoubleLineCapitalLP.Sectorallocationsaresubjecttochangeandshouldnotbeconsideredarecommendationtobuyorsellanysecurity.

CoreFixedIncomeFund PortfolioCreditQualityBreakdown
Unrated Securities 1.25% Cash 2.22% Government 20 34% 20.34%

Below Investment Grade 14.43% Investment Grade 37.09% Agency 24.67%

PortfoliocompositionandcreditratingsasofJanuary31,2013.Portfoliocompositionissubjecttochangewithoutnotice.Creditdistributionisdeterminedfromthehighestavailablecredit ratingfromanyNationallyRecognizedStatisticalRatingOrganization(S&P,Moodys,andFitch). Cash =Thevalueofassetsthatcanbeconvertedintocashimmediately.Canincludemarketablesecurities,suchasgovernmentbonds, banker'sacceptances,cashequivalentsonbalance sheetsthatmayincludesecuritiesthatmaturewithin90days. Government =Governmentdebt(alsoknownaspublicdebtornationaldebt)ismoney(orcredit)owedbyanylevelofgovernment;eithercentralgovernment,federalgovernment, municipalgovernmentorlocalgovernment. Agency =MortgagesecuritieswhoseprincipalandinterestareeffectivelyguaranteedbytheU.S.GovernmentagencyincludingFannieMae(FNMA)orFreddieMac(FHLMC).AsofJanuary 31,2013,theDoubleLine CoreFixedIncomeFundhad9.65%FreddieMacand13.4%FannieMaesecurities. InvestmentGrade=AbondisconsideredinvestmentgradeifitscreditratingisBBB ofhigherbyStandard&PoorsorBaa3byMoodys.Ratingsbasedoncorporatebondmodel.The hi h the higher th rating, ti th themorelikely lik l the th bond b dis i to t payback b kat tpar/$100 /$100cents t onthe th dollar. d ll BelowInvestmentGrade=Alsoknownasjunkbondisasecurityratedbelowinvestmentgrade.Thesebondsareseenashavinghigherdefaultriskor otheradversecreditevents,but typicallypayhigheryieldsthanbetterqualitybondsinordertomakethemattractive.Theyarelesslikelytopaybackatpar/$100centsonthedollar. CreditqualitymaybeassessedbydifferentagenciesfordifferentbondsforreasonsbeyondthecontroloftheFund. NR=NotRated.Securitiesthatarenotratedbythethreeratingagencies. 65 Fundholdingsaresubjecttochangeandarenotrecommendationtobuyorsellanysecurity. Source:DoubleLineCapitalLP.

The TheBigEasy Easy

LiveWebcasthostedby:
JeffreyGundlach
ChiefExecutiveOfficer

March5,2013

U.S. Aggr 1 getIndexA Back IWS?requ to In

IndexDescriptions
B l Capital Barclays C it lUSA Aggregate t Index I d TheBarclaysCapitalUSAggregateIndexrepresentssecuritiesthatareSECregistered, taxable,anddollardenominated.Theindex coverstheUSinvestmentgradefixedratebondmarket,withindexcomponentsforgovernmentandcorporatesecurities,mortgagepassthroughsecurities,andassetbacked securities.Thesemajorsectorsaresubdividedintomorespecificindicesthatarecalculatedandreportedonaregularbasis. BarclaysCapitalUSTreasuryIndex ThisindexistheUSTreasurycomponentoftheUSGovernmentindex.PublicobligationsoftheUSTreasurywitharemaining
maturityofoneyearormore.

BarclaysCapitalUSTreasury2YearIndex Thisindexisthe2yearcomponentoftheUSGovernmentindex. BarclaysCapitalUSTreasury5YearIndex This Thi index i d is i the th 5yearcomponent tof fthe th USGovernment G tindex. i d BarclaysCapitalUSTreasury7YearIndex Thisindexisthe7yearcomponentoftheUSGovernmentindex. BarclaysCapitalUSTreasury10YearIndex Thisindexisthe10yearcomponentoftheUSGovernmentindex. BarclaysCapitalCapitalUSTreasury30YearIndex Thisindexisthe30yearcomponentoftheUSGovernmentindex. BarclaysCapitalUSHighYieldIndex TheBarclaysCapitalUSHighYieldIndexcoverstheuniverseoffixedrate,noninvestmentgradedebt.Eurobondsanddebtissuer
fromcountriesdesignatedasemergingmarkets(e.g.Argentina,Brazil,Venezuela,etc.)areexcluded,butCanadianandglobal bonds(SECregistered)ofissuersinnonEMGcountries areincluded.Originalissuezereos,stepupcouponstructures,144Asandpayinkind(PIK,asofOctober1,2009)arealsoincluded.

BofAMerrillLynchUSGovernmentIndex(GOAO) TheMerrillLynchUSGovernmentIndextrackstheperformanceofUSgovernment(i.e.securitiesinthe
TreasuryandAgencyindices.)

BofAMerrillLynchUS15+YearTreasuryIndexLongTreasuries(G802) ThisindexisasubsetoftheBofAMerrillLynchUSTreasuryIndexincludingall
securitieswitharemainingtermoffinalmaturitygreaterthan15years..

BofAMerrillLynchUSCorporateIndex(COAO)InvestmentGrade TheMerrillLynchCorporateIndextrackstheperformanceofUSdollardenominated
investmentgradecorporatedebtpubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&Pand Fitch)andaninvestmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleast oneyearremainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingof$250MM.

BofAMerrillLynchUSAllConvertiblesIndex(VOSO) TheMerrillLynchAllConvertibleIndexisaruledrivenindex.whichincludesallbondsandpreferredstocks
ofU.S.registeredcompanies,whichhave$50millionormoreinaggregatemarketvalueandareconvertiblesinU.S.dollardenominatedcommonstocks,ADRsorcashequivalents. Pleasenoteaninvestorcannotinvestdirectlyinanindex.

CRBCommodityIndex Anunweightedgeometricaverageofsomeimportantcommodities.Itaveragespricesacross17commoditiesandacrosstime.The
indextracksenergy,grains,industrials,livestock,preciousmetals,andagriculturals. S&P500 S&P500isafreefloatcapitalizationweightedindexpublishedsince1957ofthepricesof500largecapcommonstocksactively tradedintheUnited States. StandardDeviation Sigma=standarddeviation.Itshowshowmuchvariationthereisfromtheaverage(mean,orexpected/budgetedvalue).Alow standarddeviationindicatedthatthedatapointtendtobeveryclosetothemean,whereashighstandarddeviationindicated thatthedateisspreadoutovera largerangeofvalues. DowJones UBSDJCommodityIndex TheDowJonesUBS CommodityindexiscomposedofcommoditiestradedonU.S.exchanges,withthe exceptionofaluminum,nickelandzinc,whichtradeontheLondonMetalExchange(LME 67

U.S. Aggr 1 getIndexA Back IWS?requ to In

IndexDescriptions
B fAMerrill BofA M illLynch L hUSDollar D ll Emerging E i Markets M k t Sovereign S i Plus Pl Index I d (IGOV)
ThisindextrackstheperformanceofUSdollardenominatedemergingmarketandcrossoversovereigndebtpubliclyissuedintheeurobondorUSdomesticmarket.Qualifying countriesmusthaveaBB1orlowerforeigncurrencylongtermsovereigndebtrating(basedonanaverageofMoodys,S&P,andFitch).

BofAMerrillLynchU.S.HighYieldCashPayIndex(J0A0)BelowInvestmentGrade
TheMerrillLynchHighYieldIndextrackstheperformanceofUSdollardenominatedbelowinvestmentgradecorporatedebt,currentlyinacouponpayingperiod,thatispubliclyissued intheUSdomesticmarket.Qualifyingsecuritiesmusthaveabelowinvestmentgraderating(basedonanaverageofMoodys,S&PandFirthforeigncurrencylongtermsovereigndebt ratings). g ) Musthaveoneyear y remaining gtofinalmaturity yandaminimumoutstanding gamountof$100MM. $

BofAMerrillLynchInternationalGovernmentIndex(NOGO)
TheMerrillLynchInternationalIndextrackstheperformanceofAustralia,Canadian,French,German,Japan,Dutch,SwissandUKinvestmentgradesovereigndebtpubliclyissuedand denominatedintheissuersowndomesticmarketandcurrency.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleanda minimumamountoutstanding.

BofAMerrillLynchMortgageBackedSecuritiesIndex(MOA0)
ThisindextrackstheperformanceofUSdollardenominatedfixedrateandhybridresidentialmortgagepassthroughsecuritiespubliclyissuedbyUSagenciesintheUSdomestic market. k t 30year,20year,15yearand dinterest i t tonly l fixed fi drate t mortgage t pools l areincluded i l d din i the th Index I d provided id dthey th have h at tleast l toneyearremaining i i t termto t final fi lmaturity t it and da minimumamountoutstandingofatleast$5billionpergenericcouponand$250MMperproductionyearwithineachgenericcoupon.

BofAMerrillLynchU.S.MunicipalSecuritiesIndex(UOA0)
ThisindextrackstheperformanceofUSdollardenominatedinvestmentgradetaxexemptdebtpubliclyissuedbyUSstatesandterritories,andtheirpoliticalsubdivisions,intheUS domesticmarket.Qualifyingsecuritiesmusthaveatleastoneyearremainingtermtofinalmaturity,afixedcouponscheduleand aninvestmentgraderating(basedonMoodys,S&P andFitch).Minimumsizevarybasedontheinitialtermtofinalmaturityattimeofissuance.

Barclays y Capital p GlobalEmerging g gMarketsIndex TheBarclays y Capital p GlobalEmerging g gMarketsIndexrepresents p theunionoftheUSDdenominatedUSEmerging g g

MarketsindexandthepredominatelyEURdenominatedPanEuroEmergingMarketsIndex,coveringemergingmarketsinthefollowingregions:Americas,Europe,MiddleEast,Africa, andAsia.AswithotherfixedincomebenchmarksprovidedbyBarclaysCapital,theindexisrulesbased,whichallowsforanunbiasedviewofthemarketplaceandeasyreplicability.

JPMorganInvestmentGradeCorporateIndex JPMorganInvestmentGradeCorporateIndexincludesperformanceofUSdollardenominatedinvestmentgrade corporatedebtpubliclyissuedintheUSdomesticmarket.Qualifyingsecuritiesmusthaveaninvestmentgraderating(basedonanaverageofMoodys,S&PandFitch)andan investmentgraderatedcountryofrisk(basedonanaverageofMoodys,S&PandFitchforeigncurrencylongtermsovereigndebtratings).Securitiesmusthaveatleastoneyear remainingtermtofinalmaturity,afixedcouponscheduleandaminimumamountoutstandingof$250MM. DrawDown Thepeaktotroughdeclineduringaspecificrecordperiodofaninvestment,fundorcommodity.Adrawdownisusuallyquotedas thepercentagebetweenthepeak

andthetrough.

NAV Amutualfund'spricepershareorexchangetradedfund's(ETF)persharevalue.Inbothcases,thepersharedollaramountofthefundiscalculatedbydividingthetotalvalue
ofallthesecuritiesinitsportfolio,lessanyliabilities,bythenumberoffundsharesoutstanding.

CMO Atypeofmortgagebackedsecuritythatcreatesseparatepoolsofpassthroughratesfordifferentclassesofbondholderswithvaryingmaturities,calledtranches.The repaymentsfromthepoolofpassthroughsecuritiesareusedtoretirethebondsintheorderspecifiedbythebonds'prospectus TIPS TreasuryInflationProtection.Atreasurysecuritythatisindexedtoinflationinordertoprotectinvestorsfromthenegativeeffectsofinflation.TIPSareconsideredanextremely lowriskinvestmentsincetheyarebackedbytheU.S.governmentandsincetheirparvalueriseswithinflation,asmeasuredbytheConsumerPriceIndex,whiletheirinterestrate remainsfixed. CPI

ConsumerPriceIndex.Ameasurethatexaminestheweightedaverageofpricesofabasketofconsumergoodsandservices,such astransportation,foodandmedicalcare.

CashFlow Cashflowmeasuresthecashgeneratingcapabilityofacompanybyaddingnoncashcharges(e.g.depreciation)andinterestexpensetopretaxincome.

68

U.S. Aggr 1 getIndexA Back IWS?requ to In

IndexDescriptions
BofAMerrillLynchUSTreasuryIndex(G0Q0)TheMerrillLynchUSTreasuryIndextrackstheperformanceofUSdollardenominatedsovereigndebtpublicly issuedby ytheUSgovernment g initsdomesticmarket.Qualifying y gsecuritiesmusthaveatleastoneyear y remaining gtermtofinal maturity, y afixedcoupon p schedule andaminimumamountoutstandingof$1billion. BofAMerrillLynchUS1015YearTreasuryIndexLongTreasuryTheMerrillLynchUS1015TreasuryIndextrackstheperformanceofUSdollardenominated10 15yearsovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.ItisasubsetoftheBofAMerrillLynchU.S.TreasuryIndex(GOQO). BofA/MerrillLynchHighYieldCashPayCCCratedIndex(JOA3) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonCCCrated HighYieldcreditonly. BofA/MerrillLynchHighYieldCashPayBBratedIndex(JOA1) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonBBrated Hi hYi High Yield ldcredit ditonly. l BofA/MerrillLynchHighYieldCashPayBratedIndex(JOA2) .AcomponentoftheBofA/MerrillLynchHighYieldCashPayIndexconcentratingonBratedHigh Yieldcreditonly. BofA/MerrillLynchCreditIndexBBBratedIndex(COA4) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingonthelowerratedBBB investmentgradecredits. BofA/MerrillLynchCreditIndexAratedIndex(COA3) . AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingontheAratedinvestmentgrade credits. BofA/MerrillLynchCreditIndexAAAratedIndex(COA1) .AcomponentoftheBofA/MerrillLynchCreditIndexconcentratingonthehighestratedAAA investmentgradecredits. DowJones UBSCommodityIndex TheDowJonesUBS CommodityindexiscomposedofcommoditiestradedonU.S.exchanges,withtheexceptionof aluminum,nickelandzinc,whichtradeontheLondonMetalExchange(LME). ShanghaiIndex TheShanghaiStockExchangeCompositeisacapitalizationweightedindextrackingdailypriceperformanceofallAandBshareslistedonthe ShanghaiStockExchange.ThisindexwasdevelopedDecember19,1990withabasevalueof100. S&P/Case / ShillerCompositeHomePriceIndex TheCaseShillerHomePriceIndices,onecomprisedofpricechangeswithinall20metropolitanmarkets,and anothercomprisedofpricechangeswithinthefollowingsubsetof10metropolitanmarkets:Boston,Chicago,Denver,LasVegas,LosAngeles,Miami,NewYork, SanDiego,SanFranciscoandWashingtonDC.Inadditiontothose10markets,the20HomePriceindexreflectspricechangesforAtlanta,Charlotte,Dallas,Detroit, Minneapolis,Phoenix,Portland,SeattleandTampa. DowJonesIndustrialAverage AlsoknownastheDOWisastockmarketindexthatincludes30largepublicallyownedcompaniesbasedintheU.S.havetraded duringastandardtradingsessioninthestockmarket. NASDAQ Acomputerizedsystemthatfacilitatestradingandprovidespricequotationsonmorethan5 5,000 000ofthemoreactivelytradedover thecounterstocks stocks. Createdin1971,theNasdaqwastheworld'sfirstelectronicstockmarket. Transports TheIndustrialsSectorincludescompanieswhosebusinessesaredominatedbyoneofthefollowingactivities:Themanufactureand distributionof capitalgoods,includingaerospace&defense,construction,engineering&buildingproducts,electricalequipmentandindustrial machinery Utilities Apublicutilityisabusinessthatfurnishesaneverydaynecessitytothepublicatlarge.Publicutilitiesprovidewater,electricity,naturalgas,telephone service,andotheressentials.Utilitiesmaybepubliclyorprivatelyowned,butmostareoperatedasprivatebusinesses. BasisPoint Abasispointisaunitthatisequalto1/100th of1%,andisusedtodenotethechangeinafinancialinstrument. REIT RealEstateTrust.Asecuritythatsellslikeastockonthemajorexchangesandinvestsinrealestatedirectly,eitherthrough propertiesormortgages Duration Durationisacommonlyusedmeasureofthepotentialvolatilityofthepriceofadebtsecurity,ortheaggregatemarketvalueofaportfolioofdebt securities,priortomaturity.Securitieswithalongerdurationgenerallyhavemorevolatilepricesthansecuritiesofcomparablequalitywithashorterduration. BookValue Bookvalueisthenetassetvalueofacompany,calculatedbysubtractingtotalliabilitiesformtotalassets. 69 PrimeXIndex PrimeXisanindexofferedbyMarkit.ItallowsinvestorstosyntheticallygainexposuretononagencyPrimeresidentialmortgagecollateral.An investmentcannotbemadedirectlyinandindex.

U.S. Aggr 1 getIndexA Back IWS?requ to In

IndexDescriptions
BofAMerrillLynch10YearUSTreasuryIndex(G0Q0) TheMerrillLynchUS10yearTreasuryIndextrackstheperformanceofUSdollardenominated10year sovereigndebtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.ItisasubsetoftheBofAMerrillLynchU.S.TreasuryIndex(GOQO). BofAMerrillLynchUS30YearTreasuryIndexTheMerrillLynchUS30yearTreasuryIndextrackstheperformanceofUSdollardenominated30yearsovereign debtpubliclyissuedbytheUSgovernmentinitsdomesticmarket.ItisasubsetoftheBofAMerrillLynchU.S.TreasuryIndex(GOQO). DowJones,CreditSuisseIndex(DJCSIN10) .AimstoreflectchangesinthelongterminflationexpectationsembeddedintheUSgovernmentbondmarketby tracking galong gp positioninontherun10y yearTIPSbonds,andadurationadjusted j shortposition p intheclosestmaturity yTreasury ytotheOTRTIPS.. CitigroupTIPS(SBUSILSI) . Itmeasuresthereturnsoftheinflationlinkedbondswithfixedratecouponpaymentsthatarelinkedtoaninflationindex.The priceof eachissueintheUSLSIisadjustedbyusinganindexratio.Theindexratioisdeterminedbydividingthecurrentinflationindexlevelbytheinflationindexlevelat thetimeofissueofthesecurity.Theinflationindexispublishedonamonthlybasis,andtheintramonthindexratioiscalculatedusinglinear interpolation. BarclaysCapital5YearTIPS(BXIIUL05) .BarclaysCapital5yearTIPSontherunindexquotedinUSDollarstradedintraday. BarclaysCapital10YearTIPS(BXIIUL10) . BarclaysCapital10yearTIPSontherunindexquotedinUSDollarstradedintraday B l C Barclays Capital it l20Y YearTIPS(BXIIUL20) (BXIIUL20) .Barclays B l Capital C it l20yearTIPSonthe th runindex i d quoted t din i USDollars D ll traded t d dintraday i t d BarclaysCapitalUSMBSIndex coversthemortgagebackedpassthroughsecuritiesofGinnieMae(GNMA),FannieMae(FNMA),andFreddieMac(FHLMC).The MBSIndexisformedbygroupingtheuniverseofover600,000individualfixedrateMBSpoolsintoapproximately3,500generic aggregates. BarclaysCapitalUS30YearTIPSIndex . BarclaysCapital30yearTIPSontherunindexquotedinUSDollarstradedintraday CitigroupEconomicSurpriseIndex . TheCitigroupEconomicSurpriseIndicesareobjectiveandquantitativemeasuresofeconomicnews.Theyaredefinedas weightedhistoricalstandarddeviationsofdatasurprises(actualreleasesvsBloombergsurveymedian).Apositivereadingof theEconomicSurpriseIndexsuggests thateconomicreleaseshaveonbalancebeatingconsensus.Theindicesarecalculateddailyinarollingthreemonthwindow.Theweightsofeconomicindicators arederivedfromrelativehighfrequencyspotFXimpactsof1standarddeviationdatasurprises.Theindicesalsoemployatimedecayfunctiontoreplicatethe limitedmemoryofmarkets.

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