1. September 14, 2015 For LAPERS Seminar use only. Not for further distribution. Tom Fahey Vice President, Portfolio Manager This presentation is provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Loomis, Sayles & Company, L.P., or any portfolio manager. Investment recommendations may be inconsistent with these opinions. There can be no assurance that developments will transpire as forecasted and actual results will be different. Data and analysis does not represent the actual or expected future performance of any investment product. We believe the information, including that obtained from outside sources, to be correct, but we cannot guarantee its accuracy. The information is subject to change at any time without notice. LS Loomis | Sayles is a trademark of Loomis, Sayles & Company, L.P. registered in the US Patent and Trademark Office. LAPERS Seminar 2015 THINK BROADLY. ACT DECISIVELY.

2. 2 For LAPERS Seminar use only. Not for further distribution. major investment themes Views as of 6/30/2015. This material is provided for informational use only and should not be considered investment advice. The views and opinions expressed reflect those of the authors and do not necessarily reflect the views of Loomis, Sayles & Company L.P. All statements are made as of the date of the presentation and are subject to change at any time without notice. OUR VIEWS 1.Global Savings and Weak Demand – Who Will Borrow and Spend? 2.Rotation of Global Credit Cycle Favors Developed Markets over Emerging Markets – how bad will EM Get? 3.Fed Rate Hike: Balancing Domestic vs. International Developments – can the US consumer become a growth engine? 4.Echoes of Late 1990s - Competitive Devaluations in Vogue 5.The Disjointed Credit Cycle: Corporate Fundamentals Look Late Cycle, but Fed Still Easy – Profits are Critical, Echoes of Late 1990s 6.Europe: Finally Growing But No More Surprises 7.Difficult Outlook for Emerging Markets: China Boom is Over; Global Trade Boom is Over; Commodity Boom is Over 8.Rates Can Stay Low: Can Risk Appetite Stay High? MALR0 13840

3. 3 For LAPERS Seminar use only. Not for further distribution. who is willing to borrow and spend? WORLD SAVINGS HELP TRASH BALANCE SHEETS Savings as a % of Global GDP Source: OECD, Thomson Reuters Datastream, data as of June, 2015. Deficient Demand Deleveraging Demographics Savings Shortage of High- Quality Assets Globalization & Technology Fed on Hold/Financial Repression Housing Rebound Restoration of Household Net Worth Pent-Up Demand Drives Investment Unemployment Falls/Fed Tightens Supply Side Impairment MALR0 13840

4. 4 For LAPERS Seminar use only. Not for further distribution. shift in global credit cycle EMERGING MARKETS POISED TO PASS THE BORROWING & SPENDING BATON TO DEVELOPED MARKETS 5 Year Change in Credit/GDP as of 12/29/14 Source: BIS, national sources, as of December 29, 2014. MALR0 13840

5. 5 For LAPERS Seminar use only. Not for further distribution. LIQUIDITY BOOM IN EMERGING MARKETS IS FADING M2 Year-over-Year rotation of global credit cycle Source: National Sources; includes Brazil, Chile, China, Colombia, Czech Republic, Hungary, India, Indonesia, South Korea, Malaysia, Mexico, Philippines, Poland, Russia, South Africa, Thailand, Turkey, US, UK, Euro Area, Japan, data as of 6/30/2015. Year Over Year % M2 Growth MALR0 13840

6. 6 For LAPERS Seminar use only. Not for further distribution. EMERGING MARKET EQUITIES UNDERPERFORMING Emerging Market Equity vs S&P 500 rotation of global credit cycle Source: Thomson Reuters Datastream, data as of 8/26/2015. All indexes are unmanaged and do not incur fees. You cannot invest directly in an index. Past performance is no guarantee of future results. MALR0 13840

7. 7 For LAPERS Seminar use only. Not for further distribution. EMERGING MARKET CURRENCIES UNDERPERFORMING rotation of global credit cycle Source: Thomson Reuters Datastream, data as of 8/26/2015. All indexes are unmanaged and do not incur fees. You cannot invest directly in an index. Past performance is no guarantee of future results. MALR0 13840

8. 8 For LAPERS Seminar use only. Not for further distribution. conflicting currents driving interest rates INTEREST RATES WILL PROBABLY RISE BUT KEEP YOUR EXPECTATIONS IN CHECK Source: Loomis Sayles illustration, as of 9/30/2014. This depiction shown above is for illustrative purposes only. There can be no assurance that developments will transpire as shown and actual results may likely be different. Deficient Demand Deleveraging Demographics Savings Shortage of High- Quality Assets Globalization & Technology Fed on Hold/Financial Repression Housing Rebound Restoration of Household Net Worth Pent-Up Demand Drives Investment Unemployment Falls/Fed Tightens Supply Side Impairment MALR0 13840

9. 9 For LAPERS Seminar use only. Not for further distribution. Source: Datastream, data as of Q2 2015. fed rate hike: is it time? DOMESTIC SALES ACCELERATING Final Sales to Domestic Purchasers Year Over Year % MALR0 13840

10. 10 For LAPERS Seminar use only. Not for further distribution. fed rate hike: is it time? LABOR MARKET STRENGTH SAYS YES Nonfarm Payroll vs. Fed Funds Target Rate Source: Datastream, data as of July 2015. Shaded areas represent US recessions. MALR0 13840

11. 11 For LAPERS Seminar use only. Not for further distribution. Source: Federal Reserve, Bloomberg, Loomis Sayles, data as of 6/17/2015. This material is provided for informational use only and should not be considered investment advice. The views and opinions expressed reflect those of the authors and do not necessarily reflect the views of Loomis, Sayles & Company L.P. All statements are made as of the date of the presentation and are subject to change at any time without notice. fed rate hike: is it time? POTENTIAL PATH OF THE POLICY RATE Loomis Sayles vs. Market & Fed Case MALR0 13840

12. 12 For LAPERS Seminar use only. Not for further distribution. changing climates for yields Ice Age (1-3%) Global Warming (3-5%) Overheating(6%+) ? ICE AGE GLOBAL WARMING OVERHEATING Percent % US 10-YEAR SCENARIOS Source: US Treasury, 1/1/2000 through 12/31/2013. Historic data represents yearly averages. Projections: Loomis Sayles. This information is provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Loomis, Sayles & Company, L.P., or any portfolio manager. Views are subject to change at any time without notice. MALR0 13840

13. 13 For LAPERS Seminar use only. Not for further distribution. echoes of the late 1990s U.S. STILL LEADING G10 GROWTH Deleveraging and highly accommodative policies early on have helped enable the US economy to outperform Source: Thomson Reuters Datastream, data as of Q2 2015. Real GDP Levels MALR0 13840

14. 14 For LAPERS Seminar use only. Not for further distribution. echoes of late 1990s US ACCELERATING FASTER THAN THE REST OF THE WORLD As US economy outperforms rest of world, so does its currency This happened in 1997-98 & wreaked havoc on EM & commodities Source: Thomson Reuters Datastream, CPB, Federal Reserve, data as of June 30, 2015. MALR0 13840

15. 15 For LAPERS Seminar use only. Not for further distribution. echoes of the late 1990s STRONGER DOLLAR KEEPS DOWNWARD PRESSURE ON COMMODITIES Source: Thomson Reuters Datastream, data as of July 30, 2015. MALR0 13840

16. 16 For LAPERS Seminar use only. Not for further distribution. disjointed credit cycle US COMPANIES FURTHER ALONG IN THE CREDIT CYCLE Ratio: Nonfinancial Domestic Corporate Debt to Corporate Profits Source: Barclays, Moody’s Federal Reserve, Bureau of Labor Statistics, Bureau of Economic Analysis. Data as of June 30, 2015. Quarterly data, shaded areas denote NBER-designated recessions. MALR0 13840

17. 17 For LAPERS Seminar use only. Not for further distribution. profitability appears steady A PROFIT RECESSION IS A MAJOR RISK TO CREDIT SPREADS S&P Earnings Per Share vs NIPA Profits Source: Thomson Reuters Datastream, as of 8/27/2015. Any opinions contained herein reflect the subjective judgments and assumptions of the authors only and do not reflect the views of Loomis, Sayles & Company, L.P., or any portfolio manager. *NIPA stands for National Income and Product Accounts. MALR0 13840

18. 18 For LAPERS Seminar use only. Not for further distribution. the disjointed credit cycle STEADY SPENDING ON DIVIDENDS & SHARE BUYBACKS Shareholder friendly activity hints at late stage of credit cycle Source: Federal Reserve Board, Haver Analytics, data as of 5/29/2015. Shaded areas represent US recessions. We believe the information, including that obtained from outside sources, to be correct, but we cannot guarantee its accuracy. Domestic Nonfinancial Corporate: Dividends Nonfinancial Corporate Business: Net Equity Issuance MALR0 13840

19. 19 For LAPERS Seminar use only. Not for further distribution. the financing gap CAPEX TYPICALLY RUNS GREATER THAN CASH FLOW BUT THIS COULD BE ANOTHER INDICATOR TO WATCH FOR LATE CYCLE BEHAVIOR IN THE US Source: Federal Reserve, BEA, data as of June 30, 2014. Shaded areas represent US recessions.. We believe the information, including that obtained from outside sources, to be correct, but we cannot guarantee its accuracy. MALR0 13840 Financing Gap*

20. 20 For LAPERS Seminar use only. Not for further distribution. the disjointed credit cycle: corporate fundamentals leaning late, but fed still easy REAL FED FUNDS RATE NEGATIVE INTO 2017 A long time until we are likely to see tight policy; may keep US credit cycle “earlier” than corporate fundamentals suggest Source: Haver Analytics, data as of May 29, 2015. Shaded areas represent US recessions. We believe the information, including that obtained from outside sources, to be correct, but we cannot guarantee its accuracy. MALR0 13840

21. 21 For LAPERS Seminar use only. Not for further distribution. disjointed credit cycle UNUSUAL DIVERGENCE IN GLOBAL CYCLE Source: Thomson Reuters Datastream, Bloomberg, as of August, 2015. All indexes are unmanaged and do not incur fees. You cannot invest directly in an index. Past performance is no guarantee of future results. Earnings per Share MALR0 13840

22. 22 For LAPERS Seminar use only. Not for further distribution. disjointed credit cycle COUNTRY WINNERS AND LOSERS FROM COMMODITY COLLAPSE Terms of Trade Source: Thomson Reuters Datastream, National Sources, data as of June 15, 2015. MALR0 13840

23. 23 For LAPERS Seminar use only. Not for further distribution. europe: currently growing EUROZONE GROWTH LOOKING BETTER Source: Datastream, data as of Q2 2015. Euro-Coin Monthly GDP Indicator & Euroland GDP MALR0 13840

24. 24 For LAPERS Seminar use only. Not for further distribution. RESURRECTION: EURO AREA LENDING Euro Area Private Loans Source: Thomson Reuters Datastream, data as of August 2015. europe: currently growing MALR0 13840

25. 25 For LAPERS Seminar use only. Not for further distribution. europe: currently growing FADING RISK PREMIUM ON PERIPHERY BOND MARKETS European 10-Year Bond Yields Source: Thomson Reuters Datastream, as of August 27, 2015. Indexes are unmanaged and do not incur fees. It is not possible to invest directly in an index. Past performance is no guarantee of future results. Percent % MALR0 13840

26. 26 For LAPERS Seminar use only. Not for further distribution. europe: currently growing BUT EUROPEAN EQUITIES UNDERPERFORMING US AND JAPAN Relative Regional Equity Performance vs Europe Source: Thomson Reuters Datastream, as of August 27, 2015. Indexes are unmanaged and do not incur fees. It is not possible to invest directly in an index. Past performance is no guarantee of future results. MALR0 13840

27. 27 For LAPERS Seminar use only. Not for further distribution. difficult outlook for emerging markets CHINA HAS MAJOR STRUCUTURAL SHIFTS TO WORK THROUGH The investment-led growth model may be coming to an end China needs consumers to borrow and spend, but rebalancing won’t be easy Source: Thomson Reuters Datastream, Oxford Economics, data as of December 31, 2014 for GDP comparison. Consumption vs Fixed Investment as of 12/31/14 MALR0 13840

28. 28 For LAPERS Seminar use only. Not for further distribution. difficult outlook for emerging markets : china deleveraging & weak global trade SLOWER CHINESE IMPORTS IS HAVING RIPPLE EFFECTS ACROSS THE GLOBE Growth in world trade volumes has declined significantly and creates an unfriendly environment for emerging markets Source: Datastream, data as of June 22, 2015. Year Over Year % MALR0 13840

29. 29 For LAPERS Seminar use only. Not for further distribution. triple threat for emerging markets END OF COMMODITY BOOM BRINGS MANY NEW CHALLENGES Brazil is a major exporter of iron ore; as terms of trade deteriorate so do prospects for growth Source: Bloomberg, as of March 27, 2015. % Percent MALR0 13840

30. 30 For LAPERS Seminar use only. Not for further distribution. emerging markets risk premiums rising THE RISE IN YIELDS CAN PROVIDE SOME INVESTMENT OPPORTUNITIES IN A YIELD STARVED WORLD. BUT WATCH OUT FOR CURRENCY RISK Source, Thomson Reuters Datastream, data as of August 27, 2015. Past performance is no guarantee of future results. MALR0 13840

31. 31 For LAPERS Seminar use only. Not for further distribution. emerging markets risk premiums rising BALANCING VALUE AND RISK IN EMERGING MARKETS EM credit generally offers a significant pick-up over its DM peers But the risk premium is justified given negative macro headwinds to this asset class Source: Thomson Reuters Datastream, JPM, Federal Reserve as of March 18, 2015. Red circle indicates ratings-equivalent spreads between US and EM. Indexes are unmanaged and do not incur fees. It is not possible to invest directly in an index. Past performance is no guarantee of future results. MALR0 13840

32. 32 For LAPERS Seminar use only. Not for further distribution. low rates keep risk appetite strong? EQUITY RISK PREMIUMS ARE HIGH The global average is 6.2% - equities may tolerate some increase in the risk free rate Source: Loomis Sayles & Co., data as of 6/15/2015. Equity Risk Premium MALR0 13840

33. 33 For LAPERS Seminar use only. Not for further distribution. low rates keep risk appetite strong? ON AVERAGE, STOCKS PERFORMED WELL IN THE QUARTERS BEFORE AND AFTER AN INITIAL HIKE Date of first rate hike in cycle S&P 500 12-mo prior S&P 500 6-mo prior S&P 500 3-mo prior S&P 500 1-mo prior Hike Date S&P 500 1-mo after S&P 500 3-mo after S&P 500 6-mo after S&P 500 12-mo after 3/1/197214.20%8.25%12.84%3.53%3/1/19720.37%3.52%4.14%6.34% 12/1/197617.31%5.25%-0.49%-0.29%12/1/19765.17%-0.85%-4.33%-3.56% 8/7/198022.92%7.27%19.22%5.08%8/7/19800.41%7.75%6.56%11.98% 5/2/198346.30%20.68%14.66%6.31%5/2/19831.52%1.00%3.03%4.26% 12/16/198622.06%4.17%8.84%2.55%12/16/19866.45%16.13%23.01%2.21% 2/4/19947.43%6.14%2.91%1.19%2/4/1994-0.41%-3.28%-0.44%4.75% 6/30/199922.73%12.37%6.43%5.56%6/30/1999-3.11%-6.31%6.79%7.25% 6/30/200418.94%3.71%1.16%1.93%6/30/2004-3.29%-2.29%6.49%6.19% 21.49%8.48%8.20%3.23% 0.89%1.96%5.66%4.93% Source: Bloomberg, Ned Davis, Loomis Sayles & Co., 6/15/2015. Indexes are unmanaged and do not incur fees. It is not possible to invest directly in an index. Past performance is no guarantee of future results. Performance of S&P500 Around 1 st Fed Funds Rate Hike Index Total Return (incl. dividends and reinvestment) Months PriorMonths Post MALR0 13840

34. 34 For LAPERS Seminar use only. Not for further distribution. low rates keep risk appetite strong? Source: Thomson Reuters Datastream, ECB, as of July 2015. MALR0 13840 PORTFOLIO REBALANCING IN EUROPE European Central Bank policy is pushing investors out of bonds and into higher risk assets