BPV Capital Market Update - April 2016

BPV Capital Market UpdateA

pri

l2

01

6

GLOBAL MARKET SUMMARY

CONFIDENTIAL INFORMATION | © 2016 BPV Capital Management. All rights reserved. Institutional only. 2

Stabilizing global economy pushed equities, interest rates and commodities higher in April

United StatesEconomic: Economic data in April came in worse than expected and first quarter GDP came in at 0.5% versus 0.7% expected. Business Cycle: As the mid-to-late cycle transition is firmly underway, late cycle dynamics are beginning to gain momentum.

Equities

US Equities continued their momentum from March and were up another 0.39% in April as earnings season for Q1 2016 is underway. Poor Q1 earnings growth has so far been overshadowed by an increase in oil prices.

Fixed Income

Both the ECB and Federal Reserve met during the month and relieved markets with even more dovish rhetoric and projections. Markets are now expecting the next rate increase in December.

Mortgage Backed Securities

Mortgage Backed Securities outperformed US Treasuries and Swaps across coupons in both 15yr and 30yr collateral. Prepayment speeds were higher during the month as expected.

Currencies

The yen strengthened vs the dollar as the BOJ surprised investors by leaving monetary policy unchanged at their April meeting.

Volatility

The VIX and OVX are near YTD lows and are nearing 2015’s low levels as equities and oil rallied during the month.

Commodities

OPEC’s meeting resulted in no action being taken at this time, but oil markets shrugged off this news and instead focused on declining US production, which is down 7% from a year ago.

Europe

ECB: The ECB met on April 20 and left policy unchanged, but Draghi maintained a dovish tone in his post-meeting press conference.

Brexit: There is growing uncertainty around the June 23 referendum as polls are currently split on the decision.

China

Chinese economic data came in much better than expected during the month and investors are seemingly no longer worried about an economic hard landing. The yuan has been stable for two months and traded in a very tight range in April.

April 2016

CHART OF THE MONTH


In April, the main underlying theme driving asset class performance was that the fears of a global recession continued to ease. This can be seen in the chart by looking at the Citi Economic Surprise Index for the US, Europe and China.

In the beginning of the year, economic data began missing expectations in the US, Europe and China. The US began to improve in February, followed by Europe in March and China in April. The improvement in Chinese economic data in April was the final data point needed for investors to become “risk-on”. The validation that the global economy may still be on solid ground led to a rebound in commodity prices, an increase in US interest rates and a continued rise in global equity markets, led by cyclical sectors. It also resulted in the Fed removing the statement “…global economic and financial developments continue to pose risks” from the April FOMC statement.The solid economic footing is a relief for investors who were fearing the worst earlier in the year, but investors may not be out of the woods yet. US economic data has begun to miss expectations in April, and Q1 GDP came in at a low level of 0.5%.

Fears of global recession are easing

-80.0

-60.0

-40.0

-20.0

0.0

20.0

40.0CESI - Europe CESI - China CESI - US

EQUITY PERFORMANCE


Data as of April 29, 2016

PRICE 1 MONTH QTD YTD 1 YEAR

S&P 500 2,065.30 0.39% 0.39% 1.74% 1.20%

Consumer Discretionary 628.76 0.13% 0.13% 1.74% 6.94%

Consumer Staples 535.63 (1.28%) (1.28%) 4.22% 10.86%

Energy 502.42 8.70% 8.70% 13.07% (13.91%)

Financials 313.64 3.40% 3.40% (1.83%) (1.52%)

Healthcare 806.34 2.93% 2.93% (2.73%) (1.08%)

Industrials 487.65 0.89% 0.89% 5.93% 4.12%

Information Technology 696.81 (5.39%) (5.39%) (2.93%) (0.10%)

Materials 295.62 4.95% 4.95% 8.74% (4.30%)

Telecommunications 167.13 (2.11%) (2.11%) 14.15% 9.79%

Utilities 245.76 (2.41%) (2.41%) 12.77% 13.68%

Russell 2000 1,130.85 1.57% 1.57% 0.02% (5.95%)

Europe (Stoxx 600) 341.48 1.87% 1.87% (5.24%) (10.81%)

Germany (DAX) 10,038.97 0.74% 0.74% (6.55%) (12.36%)

China (Shanghai Composite) 2,938.32 (2.16%) (2.16%) (16.95%) (32.80%)

Japan (Nikkei) 16,666.05 (0.55%) (0.55%) (11.72%) (13.07%)

FIXED INCOME PERFORMANCE


1 MONTH QTD YTD 1 YEAR

Barclay's US Treasury 1-3 YR 0.04% 0.04% 0.97% 0.99%Barclay's US Treasury 7-10 YR (0.08%) (0.08%) 4.77% 5.16%Barclay's US Treasury 20+ YR (0.53%) (0.53%) 8.09% 7.92%BofAML 1-3YR Agency and Treasury 0.03% 0.03% 0.97% 0.99%Bloomberg Corporate Bond Index 1.36% 1.36% 5.49% 3.41%Bloomberg High Yield Bond Index 3.90% 3.90% 7.53% (0.56%)

YIELD 1 MONTH QTD YTD 1 YEAR

US 2 YR 0.78% 0.72% 0.72% 1.05% 0.56%US 5 YR 1.29% 1.20% 1.20% 1.76% 1.42%US 10 YR 1.83% 1.77% 1.77% 2.27% 2.04%US 30 YR 2.68% 2.61% 2.61% 3.02% 2.75%5 YR Breakeven 1.60% 1.51% 1.51% 1.28% 1.73%10 YR Breakeven 1.71% 1.63% 1.63% 1.58% 1.93%Germany 0.26% 0.15% 0.15% 0.63% 0.28%France 0.60% 0.49% 0.49% 0.99% 0.56%Italy 1.47% 1.22% 1.22% 1.59% 1.50%Spain 1.57% 1.43% 1.43% 1.77% 1.46%UK 1.60% 1.42% 1.42% 1.96% 1.83%Japan (0.14%) (0.04%) (0.04%) 0.26% 0.30%Data as of April 29, 2016

CURRENCIES PERFORMANCE




USD/JPY 106.60 (5.30%) (5.30%) (11.57%) (10.44%)

EUR/USD 1.15 1.02% 1.02% 5.90% 3.31%

GBP/USD 1.45 1.22% 1.22% (1.43%) (5.85%)

USD/CHF 0.95 (0.76%) (0.76%) (4.68%) 1.62%

USD/CAD 1.27 (2.15%) (2.15%) (8.16%) 5.86%

USD/SEK 8.06 (0.73%) (0.73%) (4.74%) (3.26%)

AUD/USD 0.75 (2.25%) (2.25%) 2.49% (6.53%)

DXY Index 92.94 (1.74%) (1.74%) (5.82%) (2.38%)

JPMorgan Emerging Markets Currency Index 68.36 (0.11%) (0.11%) 4.17% (10.17%)

COMMODITIES PERFORMANCE



Bloomberg Commodity Index 85.52 8.49% 8.49% 9.77% (17.02%)

Natural Gas USD/MMBtu 2.18 6.04% 6.04% (11.21%) (27.69%)WTI USD/bbl. 45.92 15.52% 15.52% 13.24% (27.89%)Brent USD/bbl. 47.37 16.19% 16.19% 15.59% (32.99%)WTI-Brent USD/bbl. (0.68) 75.40 75.40 380.43 (69.56)Gasoline USd/gal. 160.44 9.79% 9.79% 4.51% (18.96%)Heating Oil USd/gal. 138.60 15.34% 15.34% 14.52% (31.91%)

Copper USd/lb. 228.35 4.22% 4.22% 9.13% (18.72%)Aluminum USD/MT 1,679.00 10.46% 10.46% 13.99% (10.83%)Zinc USD/MT 1,934.00 6.72% 6.72% 22.81% (16.27%)Nickel USD/MT 9,417.00 11.19% 11.19% 10.50% (30.52%)

Gold USD/t oz. 1,293.53 4.93% 4.93% 20.37% 7.37%Silver USD/t oz. 17.85 15.61% 15.61% 28.64% 7.80%Platinum USD/t oz. 1,076.40 10.32% 10.32% 21.83% (6.74%)Palladium USD/t oz. 622.79 10.41% 10.41% 15.22% (20.44%)

Corn USd/bu. 391.75 10.12% 10.12% 7.70% (4.86%)Soybean USd/bu. 1,029.75 12.20% 12.20% 18.67% 5.18%Live Cattle USd/lb. 114.93 (7.34%) (7.34%) (9.83%) (20.00%)Cocoa USD/MT 3,233.00 9.26% 9.26% 3.56% 12.37%Coffee USd/lb. 121.50 (6.21%) (6.21%) (5.04%) (20.64%)Lean Hog USd/lb. 81.70 1.05% 1.05% 5.05% 2.70%Sugar USd/lb. 16.32 5.63% 5.63% 13.41% 10.57%Wheat USd/bu. 488.50 1.61% 1.61% 3.44% (9.91%)Cotton USd/lb. 63.77 9.36% 9.36% (0.69%) (2.95%)


MACROECONOMIC SUMMARY

United States

• Employment: The March employment report showed job growth continued at a faster than expected pace with payroll growth of 215k. Wage growth was also better than expected and increased 2.3% YoY.

• Consumer: Retail sales continue to be poor, declining 0.3% in March from a weak reading in February. The control group, which is an input into GDP was also weaker than expected and showed growth of only 0.1%.

• Manufacturing: The uptick in regional manufacturing surveys last month did not translate into an improvement in data this month as data releases for the sector were very weak. April’s advance PMI was at the weakest since 2009 and both industrial production and durable goods orders for March came in much weaker than expected.

• GDP: First quarter GDP came in at 0.5%, which was worse than expectations of 0.7%. First quarter GDP has been the weakest throughout the recovery, averaging 0.7% since 2010, while the other three quarters have an average growth rate of 2.2%.


Mixed US economic data provides unclear pictureRetail sales have been on a declining trend since March 2015

Manufacturing data has been poor

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0Retail Sales MoM

46.0

48.0

50.0

52.0

54.0

56.0

58.0

60.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0 Industrial Production YoY Markit US Manufacturing PMI

BUSINESS CYCLE


Transition between cycles currently taking placeOperating margins have been declining

Lack of inflation preventing late cycle transition

Indicators of the Mid Cycle• GDP growth begins to moderate• Profit margins peak• Monetary policy is still accommodative, but less

accommodative than early cycle• Lack of clear sector leadership

Indicators of the Late Cycle• Above trend rates of inflation• GDP and Industrial Production begin to hit slower

growth rates• Monetary policy tightens• Profit margins deteriorate• Inventories tend to build unexpectedly as sales decline.

Late Cycle Transition: We believe that the US economy is currently transitioning from the mid to late cycle with a tilt to late cycle dynamics. Manufacturing data has been very weak and profit margins continue to decline. There is still a lack of inflation, although core PCE has started to rise and is getting close to 2%.

7.0%8.0%9.0%

10.0%11.0%12.0%13.0%14.0%15.0%

Operating Margin

-1.0

0.0

1.0

2.0

3.0

4.0

5.0Headline CPI

EQUITIES


Equities slightly up in April but earnings have been poor

Valuations at highest levels since the financial crisis

Tech has underperformed, banks have outperformed on earningsValuations: Equities rallied further in April after a strong March as oil prices led markets higher. With negative earnings growth and prices increasing, the trailing P/E is now at a post-recession high. First Quarter Earnings: Earnings announcements for the first quarter are in progress. So far over 70% of companies have beaten EPS expectations, but growth is still coming in at -7.8%. Full year EPS growth expectations have also been lowered from 1.7% on April 1 to 0.9%.Cyclicals vs. Defensives: After strong performance earlier in the year, defensives have begun to lag with Utilities returning -2.41% this month while the S&P 500 is up 0.39%. Interest rates rose this month as investors began to be less concerned about weakness in the global economy.Information Technology: Large-cap tech companies Apple, Microsoft, and Google missed EPS expectations and each had selloffs larger than 5% the day after. Earnings for the sector as a whole have fallen 9.8% in Q1 versus low expectations of -7.0%. Banks: Banks were the first sector to report earnings and surprised largely to the upside. The overall numbers are still poor, but after a large selloff at the beginning of the year the calls reassured investors that the banking environment is not as weak as some thought. Banks rallied 6.8% during April, outperforming the S&P 500.

15.015.516.016.517.017.518.018.519.019.520.0

105.0106.0107.0108.0109.0110.0111.0112.0113.0 Trailing 12M EPS Trailing P/E

100

105

110

115

120

125 S&P 500 Index Information Technology Financials

FIXED INCOME


Interest rates increased with inflation expectationsThe yield curve steepened in AprilYield Curve: Interest rates across the curve were higher from

March despite weaker domestic economic data in the month. Inflation expectations again increased with higher commodity prices. The yield curve steepened as an increase in inflation expectations caused longer dated yields to rise. Fed dovishness kept short term rates anchored.

Federal Reserve: The Fed met on April 27 and elected to keep the Fed Funds rate at a range of 0.25-0.50%. There was no press conference after the meeting and the statement was very similar to March. However, rhetoric from officials since the March meeting has been mostly dovish with Fed officials expressing concerns about the global economic environment.

Interest Rate Changes

1M 2YR 5YR 10YR 30YR

3/31/16 0.17% 0.72% 1.20% 1.77% 2.61%

4/29/16 0.15% 0.78% 1.29% 1.83% 2.68%

Change (0.02%) 0.06% 0.09% 0.06% 0.07%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%3/31/2016 4/29/2016

FIXED INCOME


High yield spreads continue to come down with increases in commodity prices

High yield spreads are now 6.32%High Yield: High yield spreads decreased during the month and are now at 6.32%, down from 7.25% in March and the 8.96% February high. This was largely due to the April rally in commodities, led by oil, that eased worries on defaults from commodity producers.

Breakevens: 10-year inflation expectations increased from 1.63% to 1.71% in the month. Commodities were again the driver within inflation expectations, as the Bloomberg Commodity Index gained 8.49% during the month.

1.00%

1.10%

1.20%

1.30%

1.40%

1.50%

1.60%

1.70%

1.80%

1.90%

2.00%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0% High Yield Spread 10 YR Breakeven

FIXED INCOME


Negative interest rates were in focus in April

With much of the global debt market in negative territory (see chart on next page), negative interest rates are no longer theoretical. While it is still too early to call them a success or detriment, it is important to understand both points of view.

Advocates: Those in favor or negative interest rates argue that it incentivizes corporations to spend rather than keep money deposited at central banks and this will stimulate economic activity. It also makes new debt extremely cheap to issue, which should promote capital expenditures and other economic activity.

Critics: Those who argue against negative rates generally point to the banking sector as an example of the fallacies of the policy. They say banks are unlikely to pass on negative rates to consumers thus the impact on the real economy will be muted. This also means that negative interest rates will hurt banks’ profitability and cause them to lend less as a result, which actually tightens conditions.

Japan’s yields are negative out to 10 years

(0.30%)

(0.20%)

(0.10%)

0.00%

0.10%

0.20%

0.30%

0.40%

FIXED INCOME


Negative interest rates were in focus in AprilMaturity

1 2 3 4 5 6 7 8 9 10 15 20 30Switzerland (0.89%) (0.89%) (0.89%) (0.81%) (0.74%) (0.63%) (0.54%) (0.41%) (0.33%) (0.26%) (0.04%) 0.09% 0.23%Netherlands (0.48%) (0.45%) (0.40%) (0.32%) (0.07%) 0.07% 0.22% 0.37% 0.50% 0.86% 0.95% 1.16%Finland (0.48%) (0.43%) (0.36%) (0.22%) (0.15%) 0.04% 0.11% 0.28% 0.39% 0.58% 0.97% 1.18%Sweden (0.61%) (0.41%) (0.07%) 0.24% 0.47% 0.62% 1.44%France (0.48%) (0.40%) (0.33%) (0.22%) (0.10%) (0.00%) 0.15% 0.30% 0.48% 0.63% 1.12% 1.41% 1.62%Greece 9.37% 9.03% 8.41% 8.18% 8.04%Italy (0.11%) (0.05%) 0.02% 0.18% 0.39% 0.74% 0.96% 1.20% 1.33% 1.49% 1.89% 2.19% 2.62%Spain (0.17%) (0.07%) 0.02% 0.36% 0.58% 0.63% 0.88% 1.28% 1.43% 1.59% 2.02% 2.48% 2.82%Portugal 0.04% 0.67% 1.15% 1.59% 1.91% 2.40% 2.88% 2.97% 3.15% 3.56% 3.92% 4.08%Germany (0.52%) (0.49%) (0.48%) (0.40%) (0.29%) (0.23%) (0.13%) (0.01%) 0.13% 0.27% 0.46% 0.73% 1.01%United Kingdom 0.47% 0.52% 0.71% 0.88% 0.97% 1.16% 1.34% 1.49% 1.48% 1.60% 2.09% 2.27% 2.39%Japan (0.27%) (0.24%) (0.23%) (0.22%) (0.20%) (0.21%) (0.19%) (0.16%) (0.13%) (0.08%) 0.07% 0.31% 0.33%China 2.31% 2.53% 2.55% 2.70% 2.68% 2.90% 2.94% 2.89%Russia 9.60% 9.38% 9.32% 9.02% 9.00% 8.92% 8.88% 8.93%India 7.04% 7.17% 7.27% 7.39% 7.44% 7.61% 7.58% 7.60% 7.62% 7.44%Brazil 13.32% 12.69% 12.50% 12.46% 12.41% 12.44% 12.47%Mexico 3.92% 4.03% 4.60% 5.25% 5.47% 5.67% 5.86% 6.17% 6.41% 6.51%Canada 0.60% 0.69% 0.68% 0.78% 0.88% 1.05% 1.21% 1.34% 1.43% 1.51% 2.07% 2.08%United States 0.55% 0.78% 0.93% 1.29% 1.62% 1.83% 2.68%

MORTGAGE BACKED SECURITIES


MBS generally outperformed Treasuries due to high demand

MBS outperformance was especially strong during the

back-end of the month as treasuries sold off while MBS prices inched higher. Demand was strong in part due to the backup in rates, overseas demand, and continued

Federal Reserve purchases.

Prepayment speeds increased considerably due to many expected factors such as an increase in number of

business days, lower interest rates, and general seasonal turnover. However, prepayments remain

muted versus historical norms and today’s environment continues to be an attractive one for prepayment risk.

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000 MBS Refinancing Index

Prepayment speeds increased but remain below historical norms

CURRENCIES


Dollar weakens as yen strengthens on BOJ policyEUR/USD above 1.14, USD/JPY below 110

Speculative bets on the yen have increased

USD: The dollar was slightly weaker as economic data was weak throughout the month. Markets are still only expecting one rate increase this year and for it to come in December, compared to the Fed’s projection of two rate increases in 2016.

Euro: The ECB met on April 20 and left policy unchanged, but during Draghi’s press conference he stated that rates will stay at or below current levels for an extended period of time and that risks are still tilted to the downside.

Yen: The Bank of Japan met on April 28 and surprised markets by keeping monetary policy on hold for the time being. Further easing was expected as the yen had strengthened by 4.5% since their last meeting. The yen strengthened after the announcement and finished the month 5.5% stronger versus the dollar.

• This chart shows that speculative bets on the Yen have completely reversed since the beginning of 2015. Investors expected the yen to weaken due to accommodative monetary policy, but were wrong-footed as the yen has strengthened vs the dollar. Futures positioning has gone from –31,183 contracts to +66,498 contracts over the last year.

95.00100.00105.00110.00115.00120.00125.00130.00

1.00

1.05

1.10

1.15

1.20 EUR/USD USD/JPY

-150,000

-100,000

-50,000

0

50,000

100,000JPY Net Positions

COMMODITIES


Commodities continue rally with positive data and dollar weakness

Base metals rallied in April after a tough 2015

Oil has rebounded with US production declinesOil: OPEC’s much-discussed meeting was on April 17 and ended with no agreement from producers. Oil markets were largely unaffected despite rallying prior to the meeting on rumors of a production freeze. US oil production is now in focus, with production from the Lower 48 states down over 700k barrels per day since it’s peak last June.

• Storage concerns also relaxed during the month, which provided a further tailwind to oil. While total inventories continue to build, it is at a much slower pace than late last year. Capacity concerns were also primarily focused on the Cushing, OK hub. Those concerns have been eased as Cushing has seen inventory withdrawals in four of the last six weeks.

Base Metals: After declining 60% from April 2011 – March 2016, base metals began to rally in April. Chinese economic improvements were largely the spark to the rally as investors are now less concerned with an economic slowdown out of the country.

• Goldman Sachs, Bank of America, and many others have voiced skepticism of the rally. They point to the rise of trading volumes and leverage in Chinese commodity markets and draw similarities to 2015’s equity market run-up.

20.0025.0030.0035.0040.0045.0050.0055.0060.0065.00

8,2508,3508,4508,5508,6508,7508,8508,9509,0509,1509,250

Lower 48 Oil Production WTI

175

195

215

235

255

275

295

315

1,400

1,500

1,600

1,700

1,800

1,900

2,000 Aluminum Copper

VOLATILITY


The VIX traded in a low range for much of the monthVIX and OVX have declined YTDVIX: Both the VIX and OVX (Oil Volatility) have come down

substantially since January YTD highs as oil prices have rallied. This further emphasizes the commentary that the recent rally in asset prices has been primarily driven by oil.

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0 VIX Oil Volatility

EUROPE


European equities have outperformed the S&P 500 after a slow start to the yearECB: The ECB met on April 21 and left policy unchanged, but during Draghi’s press conference he stated that rates will stay at or below current levels for an extended period of time and that risks are still tilted to the downside.

United Kingdom: While there have been no major developments as markets await the referendum on June 23, markets continue to be cautious regarding a potential Brexit. Latest polls show the campaign to stay within the European Union is beginning to gain momentum within the country, but this can change very quickly due to a volatile geopolitical environment.

Europe outperformed domestic markets in April

Economic data showing signs of improving

"Inflation rates could turn negative again in the coming months before picking up in the second half of 2016.

Inflation rates should pick up further in 2017."- Mario Draghi, ECB President

96

98

100

102

104

106

108S&P 500 Index Stoxx 50

-80.0

-60.0

-40.0

-20.0

0.0

20.0

40.0 Citi Economic Surprise Index - Europe

CHINA


Chinese economy showing signs of stabilizingGDP: China’s official Q1 GDP came in in-line with expectations at 6.7%. The government has said its 2016 GDP target is a range of 6.5% - 7%.

Economic Data: China also released other key data points throughout the month. Trade data and industrial production were both much better than expected while retail sales were in line with expectations. Chinese economic data was relatively weak in the first quarter, so the relief from the data this month caused investor sentiment to become more positive.

Yuan: The yuan traded in a 71 basis point range during the month as economic data was stable and sentiment turned more positive. This quiet trading environment was a relief as many investors feared a major devaluation earlier in the year.

Equities: After a 12% gain in March, the Shanghai Composite finished down 2.16% in April. Trading volumes in China have been light as investors have focused on commodities.

Equity markets were down after a strong March

The yuan has traded in a tight range

1,5001,7001,9002,1002,3002,5002,7002,9003,1003,300

2,500

3,000

3,500

4,000

4,500

5,000

5,500 Shanghai Composite Shenzen Composite

6.06.16.26.36.46.56.66.7

USD/CNY

DISCLOSURES

The Volatility Index (VIX) shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. You can not invest directly in an index.

The S&P 500 Total Return Index is the total return of the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. You cannot invest directly in an index.

The Shanghai Composite is a stock market index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. You cannot invest directly in an index.

The Russell 2000 Index tracks the stocks of the 2,000 smallest companies in the Russell 3000 index. It is considered the benchmark index of the small-cap U.S. equity universe. You cannot invest directly in an index.

The STOXX 600 tracks 600 publicly-traded companies based in one of 18 EU countries. The index includes small cap, medium cap, and large cap companies. You cannot invest directly in an index.

The DAX (Deutscher Aktienindex (Germanstock index)) is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. You cannot invest directly in an index.


DISCLOSURES

The Nikkei 225 Stock Average, or Nikkei, is the leading index of Japanese stocks. It is a price-weighted index comprised of Japan’s top 225 blue-chip companies on the Tokyo Stock Exchange. You cannot invest directly in an index.

The Bloomberg US Corporate Bond Index is a rules-based market-value weighted index engineered to measure the investment grade, fixed-rate, taxable, corporate bond market. You cannot invest directly in an index.

The Bloomberg US High Yield Corporate Bond Index is a rules-based market-value weighted index engineered to measure the non-investment grade, fixed-rate, taxable, global corporate bond market. You cannot invest directly in an index.

The Barclay's 1-3 Year Treasury Index is an unmanaged index tracking short-term government securities with maturities between 1 and 2.99 years. You cannot invest directly in an index.

The Barclay’s 7-10 Year Treasury Index is an unmanaged index tracking medium-term government securities with maturities between 7 and 9.99 years. You cannot invest directly in an index.

The Barclay’s 20+ Year Treasury Index is an unmanaged index tracking long-term government securities with maturities greater than 20 years. You cannot invest directly in an index.


DISCLOSURES

JP Morgan Emerging Market Currency Index is comprised of the spot prices of 10 emerging market currencies relative to the U.S. dollar. You cannot invest directly in an index.

The Bloomberg Commodity Index is a broadly diversified commodity price index designed to allow investors to track commodity futures through a single, simple measure. The index is designed to minimize concentration in any one commodity or sector.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure emerging markets equity performance. You cannot invest directly in an index.

The opinions expressed are as of the date written and may change as subsequent conditions vary. This paper is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this paper is at the sole discretion of the reader.


Contact Us:865.243.8000 Local 877.819.2188 Toll Free

KNOXVILLE:9202 S. Northshore Drive, Suite 300Knoxville, TN 37922

SHREWSBURY:595 Shrewsbury Ave.Shrewsbury, NJ 07702

ORLANDO:801 N. Orange Avenue, Suite 730 Orlando, FL 32801

DENVER:1228 15th Street, Suite 306 Denver, CO 80202

www.backporchvista.com Copyright © 2016 by BPV Capital Management. All rights reserved.

Economy & Finance

BPV Capital Market Update - April 2016