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Separately Santa Managed Barbara Account Core Management

Dividend Growth As of 30 Jun 2021

Equity market review consumer discretionary, financials, and materials. According U.S. economic growth rebounded strongly in the second to FactSet, S&P 500 earnings per are now expected to quarter and led the global recovery as widespread grow by approximately 35% in 2021. Growth style factors vaccination efforts increased the pace of reopening. Across outperformed value during the second quarter with much the globe, economic growth rates were largely dependent of the outperformance occurring in June as rates on countries’ ability to vaccinate populations and control declined. Within the index, 10 of 11 sectors were in positive COVID-19. Historic levels of fiscal and monetary stimulus territory led by double-digit gains for real estate, information also continued, providing ongoing support to individuals, technology, energy and communication services, while businesses and financial markets. The U.S. labor market the defensive utilities sector was slightly negative over disappointed in April and May despite record levels of the quarter. Similar to the first quarter, several defensive open positions, but hiring improved in June with the U.S. oriented sectors underperformed the broad market during adding back 850,000 jobs. Some evidence of wage growth the quarter as many are not viewed as beneficiaries of the contributed to inflationary pressures as employers sought to economic recovery. entice more individuals back to work with higher pay. Dividend Growth The (Fed) was in the spotlight throughout During the second quarter of 2021, the Santa Barbara the quarter as inflationary fears led to increased market Dividend Growth portfolio underperformed its benchmark, . Both inflation readings and the inflation outlook the S&P 500 Index (gross and net of fees). Both selection exceeded expectations as the unleashing of pent-up demand and sector allocation had a negative impact on relative overwhelmed global supply chains, while commodity prices performance during the quarter. The consumer staples sector and wage pressures increased. Oil prices ended the quarter had the largest contribution to relative performance due to up around 50% year to date as broad economic reopenings the strong performance by the portfolio’s sector constituents. led to a surge in fuel consumption, while supply remained The information technology sector was the largest detractor constrained. The financial markets interpreted the Fed’s to relative performance due to stock selection detractions and June meeting comments as hawkish, sparking a mini “taper the strong performance of non-dividend paying companies tantrum” as policymakers upped their growth and inflation within the benchmark. In general, the strong performance by forecasts and their “dot plot” looked more aggressive. higher and non-dividend paying companies during the However, volatility was lived as policymakers eased quarter created a headwind for the Dividend Growth strategy fears with a likely timeline for tapering monthly asset given the portfolio’s lower-risk profile and focus on higher purchases beginning in early 2022 and two potential rate quality, dividend growth companies. hikes in 2023. Chair Powell also reinforced the Fed’s that inflation pressures are mostly transitory due to the base Enterprise software company was effect of comparing to last year’s depressed readings during the top contributor to performance during the quarter. The lockdowns and temporary supply bottlenecks caused by the company reported quarterly results above expectations and rapid reopening. raised guidance for the upcoming quarter. Quarterly results were supported by accelerating growth in the commercial market exuberance carried over from the first quarter cloud business, continued strength from Windows, and cost with the U.S. market rallying into quarter end and outpacing controls that led to operating expansion. Microsoft its international counterparts. The S&P 500 advanced by continues to benefit as companies accelerate their migration 8.55% during the second quarter and finished the month of to the cloud and digital transformations. June at a new all-time high. The second quarter was the fifth quarter in a row in which the index advanced by 5% or more. Another top contributor was consumer electronic company Corporate earnings outpaced consensus expectations and Apple Inc. The company reported quarterly and estimates for the upcoming quarter were steadily increased earnings above expectations supported by double digit over the past several months. First quarter earnings growth growth in all product categories and the overall strength of was above 50%, higher than initial expectations, and led by its ecosystem. Apple’s installed base of active devices reached

NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE nuveen.com/santabarbara Dividend Growth As of 30 Jun 2021 a new all-time high and the company reported over a billion earnings above expectations and continued strategic iPhone users. The Mac and iPad businesses continue to benefit in its renewables business. The company’s from the remote work and distanced education environment. Florida Power & Light subsidiary recently submitted a Sales in the iPhone segment were above expectations for the proposal to the state regulators for a four-year base rate fifth consecutive quarter as consumers continue to adopt 5G. increase. In past instances, the stock has been pressured until Additionally, the company increased its quarterly dividend the details of the rate case are finalized. During the quarter, by 7% and authorized an additional $90 billion to its existing the company agreed to purchase wind from Brookfield stock repurchase program. Renewable for $733 million and we believe the company’s strength allows for additional opportunities to Mission critical communication device provider Motorola acquire regulated utility assets. Solutions, Inc. further contributed to portfolio performance. The company reported results above During the quarter, we established a new position in global expectations and increased guidance for both the upcoming semiconductor and infrastructure software solutions quarter and full calendar year. The company is benefiting company Broadcom Inc. We eliminated our position in from strong demand and its greater focus on video security pharmaceutical company Organon Inc. which spun-off from and command and control software solutions which are Merck & Co., Inc. in June. higher growth and margin businesses. The company is well Market outlook positioned to benefit from Federal stimulus programs such as the American Rescue Plan which will provide funding to The backdrop for the U.S. equity markets remains positive schools, airports, transit, and state and local governments. given the economic recovery and strong earnings growth Additionally, believe the company would benefit environment. While economic and earnings growth likely from a potential infrastructure plan. peaked during the second quarter, we expect strong, yet modestly decelerating growth in the second half of 2021. Dialysis product and hospital supply company Baxter Inflation was the primary concern during the International, Inc. was the largest detractor from second quarter and we believe it will continue to represent performance during the quarter despite reporting quarterly the largest risk to capital markets in the second half of the results above expectations. Management has maintained year. Inflation concerns have moderated but market anxiety conservative guidance and sentiment remains lukewarm could escalate if new data shows accelerating wage growth as the company identified headwinds due to higher raw and/or unwieldy price appreciation. While the question of materials and logistics costs in 2021. Management is focused whether the rise in inflation is transitory or more embedded on margin improvement and we expect greater clarity at remains, future changes in monetary policy will likely the upcoming analyst day in September. In our opinion, the be determined by the pace of the jobs recovery. Though company’s fundamentals continue to improve and the stock significant monetary and fiscal stimulus measures remain remains attractively valued relative to peers. Additionally, we in place, we expect continued regarding the are encouraged by the 14% dividend increased announced timing of the Federal Reserve’s plans to taper their monthly during the quarter. purchases to result in market uncertainty associated Diversified utility company WEC Energy Group, Inc. was with policy tightening phases. At this point, we believe the another top detractor from performance during the quarter. Federal Reserve will announce plans to taper their bond While the company reported quarterly earnings above purchases by the end of the year and do not anticipate the consensus estimates and also reaffirmed its 2021 earnings first federal funds rate increase until late 2022 or early per share guidance, the stock declined during the quarter 2023. While we view inflation as the biggest risk to the mainly for non-company specific reasons. Investors favored capital markets, we believe speculation regarding the timing growth oriented companies and sectors while the defensive of the Fed’s tightening plans, the Covid-19 Delta variant’s oriented utilities sector was the only sector in the S&P 500 impact on growth, geopolitical tensions, and uncertainty that declined during the quarter. The company recently regarding infrastructure, taxes, and other policies could requested a delay to their Wisconsin rate case which has lead to persistent volatility during the remainder of the year. created uncertainty and will likely remain until resolution is We continue to believe earnings growth will be the driver of reached later this year. equity returns moving forward and security selection will be paramount. Integrated utility company NextEra Energy, Inc. further detracted from performance during the quarter. The company The economic recovery, strong corporate earnings growth, declined slightly during the quarter despite reporting and fiscal and monetary accommodation has resulted in Dividend Growth As of 30 Jun 2021 improved dividend sustainability and broader participation across the equity markets in 2021. With uncertainty surrounding inflation and changing interest rates, we expect volatility to remain persistent and security selection should be rewarded. We believe investors should seek dividend paying companies that are supported by positive fundamentals, balance sheet strength, ample free flow, and attractive relative valuations. We find these types of companies are well positioned to benefit from the reacceleration of economic growth allowing for the growth of capital returns to . The combination of strong capital flexibility and growing dividend payments may help mitigate future inflationary pressures. Companies are widely reinstating capital return programs and we expect these friendly trends to continue. Bolstered by earnings growth, margin expansion, and greater confidence in the sustainability of the economic recovery, share repurchases and dividends are near pre-pandemic levels. More than 180 S&P 500 constituents declared a dividend increase during the first half of 2021, topping the number of dividend increases announced during the first 6 months of 2020 and near 2019 levels. According to FactSet, the S&P 500 is expected to generate 5% dividend growth in 2021. While dividend increases are distributed across all GICS sectors, cyclical sectors such as industrials and financials have had the largest number of declared increases. The strong earnings growth environment should result in continued robust dividend growth from sectors with lower such as information technology, health care, and consumer discretionary. Dividend Growth As of 30 Jun 2021

Sector average weight (%) Best and worst performers 01 Apr 2021 – 30 Jun 2021 ▬ Dividend Growth ▬ S&P 500® Average Contribution Best performing securities weight (%) to return (%) Microsoft Corporation 4.70 0.69 Apple Inc. 4.55 0.55 Motorola Solutions, Inc. 2.55 0.37 American Express Company 2.27 0.36 Marsh & McLennan Companies, Inc. 1.93 0.29 Weight () Weight Average Contribution Worst performing securities Weight (%) to return (%) Baxter International Inc. 1.97 -0.08 WEC Energy Group Inc 1.81 -0.07 Energy Comm.

staples NextEra Energy, Inc. 2.56 -0.06 tilities services Materials Consumer Consumer Financials ndustrials technology eal estate eal ealth care nformation AT&T Inc. 1.84 -0.05 discretionary Organon & Co. 0.01 -0.01 Source: FactSet, based on the Dividend Growth model portfolio from 01 Apr 2021 - 30 Jun 2021. Source: FactSet. The holdings listed above are based on the Dividend Growth SMA model portfolio. Holdings of individual accounts and weights may differ from this model and are subject to change without notice. Holdings do not reflect all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that the securities identified were or will be profitable. The exposure and performance contribution information presented above is based on the model portfolio, applying daily closing prices rather than the actual transaction prices for the respective time period. Accordingly, the information presented will differ from a client’s actual exposure and performance contribution. In addition, holdings data, exposures, and performance contribution information may not reflect reconciliation of all transactions in a client’s account. Performance will vary depending upon, among other things, time of initial , cash flows and investment management fees. For additional information regarding the methodology used to select these holdings and to obtain a list showing the contribution of every holding in the model portfolio to the overall account’s performance, please contact Nuveen at 800.752.8700. Past performance is no guarantee of future results.

For more information contact: 800.752.8700 or equated with loss of purchasing power. Payout ratio is a financial metric showing the proportion of earnings a company pays shareholders in the form of dividends, expressed as a percentage of the company’s total visit nuveen.com earnings. Valuation is the process of determining the current worth of an asset or a company; there are many techniques used to determine value. An analyst placing a value on a company looks at the company’s The statements contained herein reflect opinions of Santa Barbara Asset Management, LLC (“Santa Barbara”) management, the composition of its capital structure, the prospect of future earnings and market value of as of the date written. Certain statements are forward looking or based on current expectations, projections assets. Volatility is the fluctuations in market value of a portfolio or other security. The greater a portfolio’s and information currently available to Santa Barbara and are subject to change without notice. There is no volatility, the wider the fluctuations between its high and low prices. TheS&P 500® measures the performance assurance that any predicted results will actually occur. The securities identified herein are based on the model portfolio and may vary from securities held in other client accounts. These securities represent relevant of large capitalization U.S. contributors or detractors from performance and include all of the new and eliminated positions purchased or A word on risk sold in the model portfolio during the period. Such securities do not represent all of the securities purchased, All investments carry a certain degree of risk, including possible loss of principal, and there is no assurance sold or recommended over the past year and the reader should not assume that the securities identified that an investment will provide positive performance over any period of time. It is important to review necessarily were or will be profitable. investment objectives, risk tolerance, tax liability and liquidity needs before choosing an investment style This material is not intended to be a recommendation or investment advice, does not constitute a solicitation or manager. Equity investments are subject to market risk or the risk that stocks will decline in response to to buy, sell or hold a security or an investment strategy or sell securities, and is not provided in a fiduciary such factors as adverse company news or industry developments or a general economic decline. A focus on capacity. The information provided does not take into account the specific objectives or circumstances of any dividend-paying securities presents the risks of greater exposure to certain economic sectors rather than the particular investor, or suggest any specific course of action. Investment decisions should be made based broad equity market, sector or concentration risk. Smaller company stocks are subject to greater volatility. on an investor’s objectives and circumstances and in consultation with his or her financial professionals. Foreign investments involve additional risks. The strategy’s potential investment in non-U.S. stocks presents Clients should consult their financial professional regarding unknown financial terms and concepts. risks such as political risk, exchange rate risk, lack of liquidity and inflationary risk, economic change, social Glossary unrest, changes in government relations, and different standards. This strategy may invest in American Depositary Receipts (ADRs). ADRs do not eliminate the currency and economic risks for the Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market underlying shares in another country. A portfolio’s investment in dividend-paying stocks could cause the as a whole. (EPS) is the portion of a company’s allocated to each share of portfolio to underperform similar portfolios that invest without consideration of a company’s track record . Earnings per share serve as an indicator of a company’s profitability. Federal funds rate of paying dividends. Stocks of companies with a history of paying dividends may not participate in a broad is the interest rate which is charged by banks to lend to other banks needing overnight loans. The Federal market advance to the same degree as most other stocks, and a sharp rise in interest rates or economic Reserve Board sets the target for this rate which is the most sensitive indicator of the direction of short-term downturn could cause a company to unexpectedly reduce or eliminate its dividend. Dividends are not interest rates. is a measure of financial performance calculated as operating cash flow minus guaranteed and will fluctuate. Dividend is one component of performance and should not be the only capital expenditures. It represents the cash that a company is able to generate after laying out the money consideration for investment. . required to maintain or expand its asset base Inflation is a rise in the prices of goods and services, often Santa Barbara Asset Management, LLC, is a registered investment adviser and an affiliate of Nuveen, LLC. SCM-1720519PR-Q0721P 800.257.8787 | nuveen.com