Trouble in the U.S. banking sector has led i to increased market uncertainty. fino.clulb Silicon Valley Bank collapse Feb Mor Apa Faerie urrse 6 a pees thefinoclub | 2023n> fino.club What types of investing strategies have historically displayed signs of resiliency when the market has faced headwinds? Value Equities During periods of high inflation and slower growth, value equities have been well-positioned Drivers: Income | Highercash =, Lowcorrelation to > Quali 3 a £0) generation & auaty balances. >the economic cycle Value equities include the four most traditional “defensive” sectors, whose eamings are less correlated to economic cycles: (py Real Estate Utilities {7 Consumer Staples | Health Care Not only have these sectors tended to be more resilient in downturns; cash flows from these sectors, have been often positively correlated with inflation. thefinoclub | 2023Free Cash Flow Yield @ sirvsteniex @ sircronh inex fino.club * * os r PS anal ae ea Dividend Yield (Bloomberg Estimate) @ saPvalueindex @ S&P Growth Index 45% 35% 25% 15% 05% 9 2020 20 3022 ipNorenbe Sn mdecdconscan be oudctneenget Oe pee A moderate equity allocation to value equities within a diversified portfolio could help provide resiliency during times of above-trend inflation and below-trend growth. . / thefinoclub | 2023 »nb fino.club iti In today’s geopolitical landscape, the following Commodities pionggoaeesnly ee a Drivers: Energy ate China’s py, Minerals and metals ¥ \dependence “= reopening > to fuel green energy Consider how investors may integrate commodities into their portfolio: ‘Traditional 60/40 Sample Commodities Satellite Portfolio Equities Bonds thefinoclub | 2023 %@ A commodities satellite portfolio represents ? 2.5% exposure to commodities in the portfolio.ne fino.club Looking back over a 25-year period, a hypothetical portfolio with a 5% allocation to commodities had a stronger risk-adjusted retum than a traditional portfolio. Risk Metrics (Jan 1998-Oct 2022) itional 60/40 ‘Sample Commodities Satellite Portfolio ‘The Sharpe Ratio measures the risk-adjusted retums of a portfolio. Ahigher numberis Sharpe Ratio 0.96 doo Considered better. ‘Average Drawdown refers, to the average drop in price ‘Average Drawdown 4.2% 3.7% ofthe portfolio from its peak level Given these factors, commodities may be positioned for strength. thefinoclub | 2023ie ° | o # Infrastructure equities present key benefits as $1.37 is Tnfrastrirc tune cise sect waste across energy, transportation, and broadband sectors. Drivers: =, High government _.. Cash flows may be Potentially more stable spending ~~ correlated with inflation | retums vs. alternative assets Below, we show how investors can integrate infrastructure into their portfolios ‘Traditional 60/40 ‘Sample Infrastructure Satellite Portfolio Equities Bonds Infrastructure 0% 10% e@ on Nowe thefinoclub | 2023nb fino.club Compared toa traditional portfolio, a portfolio with an infrastructure ‘component had improved risk metrics over the following sample period i i ‘Sample infrastructure Risk Metrics (Jan 1998-Oct 2022) Traditional 60/40 SnRS POLTORS ‘Sharpe Ratio 0.74 0.76 ‘Average Drawdown -4.5% 4.3% Annual Returns 2000 2008 2022 © tasructue © 2 sIndex 12% aay iz = -18% -37% Infrastructure equities may present opportunities for investors looking to diversify their portfolios, especially during down markets. thefinoclub | 2023 »ne fino.club Remaining Resilient Together, these three strategies may provide investors with more resilience regardless of the stage of the economic cycle. All-Weather Strategies Value Equities Commodities Infrastucture thefinoclub | 2023nd fino.clulb Save For Later!