Before the Bell Morning Market Brief

August 7, 2020

FOR IMPORTANT DISCLOSURES, PLEASE SEE THE DISCLOSURE PAGES AT THE END OF THIS DOCUMENT

MORNING MARKET COMMENTARY: Anthony M. Saglimbene, Global Market Strategist  Quick Take: U.S. futures are pointing to a flattish open; European markets are trading mixed; Asia ended mostly lower overnight; West Texas Intermediate (WTI) oil trading up to $41.41; 10-year U.S. Treasury yield at 0.53%.

 Is Tech In A Bubble? Yesterday, we noted the intense focus on Big Tech this year, which has propelled Apple's stock to a weighting within the S&P 500 Index that has now surpassed IBM's record-holding size in 1985, according to Bloomberg. Currently, Apple accounts for 6.5% of the S&P 500 and roughly 12% of the NASDAQ 100 Index. However, the focus on Big Tech extends well beyond Apple, as investors have gravitated to several large, high-quality Tech companies with strong secular tailwinds all year. The broader NASDAQ Composite has outperformed the S&P 500 by +20% year-to-date on a price basis. As the FactSet chart below shows, the NASDAQ 100's outperformance has been even more pronounced over the last 12 months, causing some to ask the question: Has Tech entered a bubble?

Notations:  For further information on any of the topics mentioned, please contact your Financial Advisor.  Unless specifically stated otherwise, comments contained in this document should not be construed as an investment opinion or recommendation of any securities mentioned. Charts depicted are from FactSet unless otherwise noted. ______© 2020 Ameriprise Financial, Inc. All rights reserved. Page 1 of 11

Before The Bell August 7, 2020 ______

 The BCA Research chart below shows how each decade has produced its unique financial excesses over the last 60 years. As BCA recently noted, each "bubble" consists of an extended period of easy money, a strong narrative that drives investors toward certain assets, and an extended period of outsized returns.  For example, the euphoria around the "Nifty 50", represented by Disney, focused on a period of stable franchises, proven track records, and strong dividend growth. In the 1970s, commodities benefited from a plummeting U.S. dollar and rising inflation, while in the 1980s, Japan's economy experienced a massive expansion. In the 1990s, tech stocks boomed, and inflation fell, while the urbanization of China and its expanding economy during the 2000s led to increased demand for commodities. Today, Big Tech, led by companies such as Apple, Microsoft, Amazon, Facebook, Alphabet as well as their interconnected ecosystems are again fueling talk of financial excesses. But even so, we believe investors shouldn’t shy away from the group.

 As the second BCA Research chart below highlights, there are a couple of significant drivers to Tech's outperformance as well as its recent acceleration higher. Tech generates a superior level of free cash flow relative to most other industries, and interest rates are at historically low levels. Tech's ability to expand earnings growth through time, above and beyond most other areas across the global economy, is one of the critical narrative advantages the sector currently enjoys — even during a global pandemic.

 As the last BCA Research chart above highlights, spending on Technology relative to everything else remains strong and should accelerate as businesses look to control costs, reduce cybercrime, and work-from-home trends become a more lasting fixture within the labor force. Semiconductor trends have also held up well and may benefit from increased adoption across a broader set of goods/products over time.  We'll close on a few critical points to consider around the Technology sector and as you think about its place within your portfolio. Though "bubble talk" may continue to surround the industry, and as long as it remains in a leadership position, we believe investors should continue to Overweight the sector based on the following:  Tech has significant exposure to high-quality companies with secular tailwinds. In a period where so much about the future is uncertain, we believe investors are best served by allocating to stable, high-quality assets, with more predictable revenue streams. Today, a large portion of these types of companies reside in the technology sector. The caveat: When/if a COVID-19 vaccine becomes available, the sector could be a source of capital for highly cyclical areas that would benefit from a more pronounced return to regular activity. Such a scenario could produce a near-to-intermediate- term headwind. With that said, longer-term trends in Tech should be unaffected by any short-term rotation, in our view.  Tech is built to operate well in a deflationary environment. With interest rates low and unemployment high, Tech should continue to perform well, in our view. Growth stocks, as a whole, generally underperform during periods of higher inflation (like during brief periods in the 1990s). But since we anticipate interest rates will trace historically low levels for some time, the macro set up for the sector remains positive.

 Valuations are high, but not at nosebleed levels. The trailing 12-month price-to-earnings (P/E) ratio for the S&P 500 Information Technology Index peaked at 64.3 in March 2000. Today, the trailing P/E stands at 31.2. On a trailing 12-month price-to-cashflow P/CF basis, Info Tech peaked in March 2000 at 52.5 — today, the metric stands at 21.6. Bottom line: Tech is expensive, but nowhere near the bubble days of 2000.  Many investors missed Tech's run higher. Currently, more than $4.5 trillion sits in money market funds. At the end of 2018, money market assets stood closer to $3 trillion. Since 2010, the largest purchasers of stocks have been companies themselves, through share buybacks. At the same time, investors and pension funds have reduced their allocations to stocks. In a "there is no alternative," aka TINA environment, and where the narrative for Tech becomes more durable over time, we believe there is ample cash on the sidelines to fuel added gains if conditions remain healthy.

 Asia-Pacific: Asian equities finished mostly lower on Friday. According to Bloomberg, President Trump's Working Group on Financial Markets said Chinese listed companies on U.S. exchanges must grant American regulators access to their audit work papers. Although the U.S. Treasury Department and Securities and Exchange Commission need to determine still how to establish rules and enforce guidelines, a final penalty would include the removal of a company from U.S. exchanges. In the past, Beijing has refused to allow U.S. auditors access to companies such as Alibaba, Baidu, and other firms that trade on American exchanges.  Europe: Most markets across the region are trading mixed at midday. German industrial production in June increased +8.9% m/m and better than the +7.4% increase in May. As with much of the very backward-looking data out of Germany this week, Europe's largest economy looks like it bottomed in April and gained momentum through the early part of summer as lockdown restrictions eased.  U.S.: Equity futures are pointing to a flattish open. Here is a quick news rundown to start your morning:  The July employment report: This morning, the July nonfarm payrolls report showed a gain of 1.76 million jobs last month, as the unemployment rate declined to 10.2% from 11.1% in June. Coming into today's jobs report, economists expected July payrolls would rise by 1.58 million. The market expected job growth had moderated last month from June levels (+4.8 million) due to a rise in COVID- 19 cases and a leveling off in high-frequency data.  President Trump signs executive orders on TikTok and WeChat. As expected, the White House released a pair of executive orders prohibiting U.S. residents from doing any business with TikTok, WeChat, or any other Chinese owned apps beginning in 45 days, according to Bloomberg. The move is in line with comments from President Trump and U.S. Secretary of State Mike Pompeo over recent days. After 45 days, U.S. residents or businesses engaging in any transactions with these companies or owners face potential penalties.  Coronavirus cases plateauing at elevated levels. Over the last three days, U.S. coronavirus cases have averaged roughly 50K a day, down from the 70K+ a day seen in July. Hotspot states like Arizona, California, Texas, and Florida are seeing a moderation in new cases, but absolute levels remain elevated. Embracing masks and social distancing in these states has helped to reduce transmission. However, and as we discussed in yesterday's Before the Bell, high-frequency data is showing economic momentum is losing some steam. Time management firm Kronos found that work shifts are up only +1.5% in the past five weeks, versus an average gain of +32% over the prior eleven weeks. Also, foot traffic, based on mobile-phone data, has fallen to its lowest levels since May.  Still no deal. The White House and congressional Democrats remain at an impasse on the shape and size of a fifth-round coronavirus relief package. Both sides said they remain far apart on critical issues such as enhanced unemployment benefits and additional aid for states and local governments. President Trump has said previously if no deal is reached by today, he would issue an executive order related to a payroll tax cut, eviction protections, unemployment extensions, and student loan repayment options. However, the market still expects a deal at some point, given the sluggish economic restart.  Earnings Update: With approximately 89% of S&P 500 Q2'20 profit reports complete, the blended earnings per share (EPS) growth rate has declined 33.8% y/y on sales growth that has decreased by 9.9%.

WORLD CAPITAL MARKETS 8/7/2020 As of: 8:30 AM ET Americas % chg. % YTD Value Europe (Intra-day) % chg. %YTD Value Asia/Pacific (Last Night) % chg. %YTD Value S&P 500 0.64% 4.86% 3,349.2 DJSTOXX 50 (Europe) -0.12% -11.57% 3,236.4 Nikkei 225 (Japan) -0.39% -4.51% 22,329.9 Dow Jones 0.68% -2.66% 27,387.0 FTSE 100 (U.K.) -0.06% -18.47% 6,023.1 Hang Seng (Hong Kong) -1.60% -10.78% 24,531.6 NASDAQ Composite 1.00% 24.58% 11,108.1 DAX Index (Germany) 0.06% -4.90% 12,599.4 Korea Kospi 100 0.39% 7.48% 2,351.7 Russell 2000 -0.10% -6.67% 1,544.6 CAC 40 (France) -0.32% -16.94% 4,869.7 Singapore STI -0.53% -18.75% 2,545.5 Brazil Bovespa 1.29% -9.96% 104,126 FTSE MIB (Italy) -0.58% -17.63% 19,361.3 Shanghai Comp. (China) -0.96% 9.96% 3,354.0 S&P/TSX Comp. (Canada) 0.47% -0.87% 16,579.1 IBEX 35 (Spain) -0.92% -26.08% 6,894.2 Bombay Sensex (India) 0.04% -6.93% 38,040.6 Mexico IPC 0.25% -11.96% 37,998.3 MOEX Index (Russia) -0.47% 1.39% 2,974.3 S&P/ASX 200 (Australia) -0.62% -8.34% 6,004.8

Global % chg. % YTD Value Developed International % chg. %YTD Value Emerging International % chg. %YTD Value MSCI All-Country World Idx 0.19% 1.46% 565.2 MSCI EAFE -0.71% -6.77% 1,862.3 MSCI Emerging Mkts 0.32% 1.03% 1,106.6 Note: International market returns shown on a local currency basis. The equity index data shown above is on a total return basis, inclusive of dividends.

S&P 500 Sectors % chg. % YTD Value Commodities Communication Services 2.45% 9.69% 197.5 Equity Income Indices % chg. % YTD Value Futures & Spot (Intra-day) % chg. % YTD Value Consumer Discretionary 0.50% 19.45% 1,170.9 JPM Alerian MLP Index 0.17% -39.01% 133.1 CRB Raw Industrials 0.24% -2.30% 441.41 Consumer Staples 0.02% 1.82% 647.8 FTSE NAREIT Comp. TR 0.16% -10.14% 19,187.0 NYMEX WTI Crude (p/bbl.) -1.29% -32.18% 41.41 Energy -0.71% -36.73% 280.5 DJ US Select Dividend -0.12% -18.83% 1,859.0 ICE Brent Crude (p/bbl.) -1.06% -32.41% 44.61 Financials -0.15% -19.90% 403.3 DJ Global Select Dividend -0.45% -21.52% 179.7 NYMEX Nat Gas (mmBtu) 1.62% 0.50% 2.20 Health Care -0.57% 5.06% 1,234.7 S&P Div. Aristocrats -0.23% -4.03% 2,943.8 Spot Gold (troy oz.) -0.60% 35.19% 2,051.21 Industrials 0.32% -8.26% 623.9 Spot Silver (troy oz.) -3.06% 57.04% 28.04 Materials -0.43% 1.45% 386.6 LME Copper (per ton) -0.29% 5.38% 6,479.75 Real Estate 0.09% -5.52% 223.3 Bond Indices % chg. % YTD Value LME Aluminum (per ton) 0.71% -2.22% 1,741.75 Technology 1.46% 26.98% 2,031.2 Barclays US Agg. Bond 0.11% 7.90% 2,400.8 CBOT Corn (cents p/bushel) -0.15% -19.69% 323.25 Utilities 0.52% -4.94% 306.6 Barclays HY Bond 0.04% 1.23% 2,209.7 CBOT Wheat (cents p/bushel) 0.05% -11.82% 501.50

Foreign Exchange (Intra-day) % chg. % YTD Value % chg. % YTD Value % chg. % YTD Value Euro (€/$) -0.52% 5.37% 1.18 Japanese Yen ($/¥) -0.13% 2.76% 105.69 Canadian Dollar ($/C$) -0.33% -2.70% 1.34 British Pound (£/$) -0.52% -1.37% 1.31 Australian Dollar (A$/$) -0.46% 2.59% 0.72 Swiss Franc ($/CHF) -0.49% 5.72% 0.91 Data/Price Source: Bloomberg. Equity Index data is total return, inclusive of dividends, where applicable.

Ameriprise Global Asset Allocation Committee U.S. Equity Sector - Tactical View S&P 500 GAAC GAAC S&P 500 GAAC GAAC Index GAAC Tactical Recommended Index GAAC Tactical Recommended Sector Weight Tactical View Overlay Weight Sector Weight Tactical View Overlay Weight

1) Communication Services 10.7% Underweight - 2.0% 8.7% 6) Health Care 14.9% Overweight +3.0% 17.9%

2) Consumer Discretionary 9.9% Overweight +2.0% 11.9% 7) Industrials 8.4% Equalweight - 8.4%

3) Consumer Staples 7.6% Equalweight - 7.6% 8) Information Technology 25.7% Equalweight - 25.7%

4) Energy 2.7% Equalweight - 2.7% 9) Materials 2.4% Equalweight - 2.4%

5) Financials 11.2% Underweight - 3.0% 8.2% 10) Real Estate 3.0% Overweight +1.0% 4.0%

11) Utilities 3.5% Underweight - 1.0% 2.5% As of: March 31, 2020

Ameriprise Global Asset Allocation Committee Global Equity Region - Tactical View

MSCI All-Country GAAC GAAC MSCI All-Country GAAC GAAC World Index GAAC Tactical Recommended World Index GAAC Tactical Recommended Region Weight Tactical View Overlay Weight Region Weight Tactical View Overlay Weight

1) United States 55.7% Overweight +7.1% 62.8% 5) Latin America 1.0% Equalweight - 1.0%

2) Canada 2.7% Equalweight - 2.7% 6) Asia-Pacific ex Japan 14.4% Equalweight - 14.4%

3) United Kingdom 4.2% Underweight - 2.0% 2.2% 7) Japan 7.2% Underweight - 2.0% 5.2%

4) Europe ex U.K. 13.7% Underweight - 2.0% 11.7% 8) Middle East / Africa 1.1% Underweight - 1.1% - As of: March 31, 2020

BY THE NUMBERS: ECONOMIC ACTUALS AND FORECAST: Current Projections: Full Year Quarterly Actual Actual Actual Actual Est. Est. Actual Actual Actual Est. Est. 2016 2017 2018 2019 2020 2021 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Real GDP (YOY) 1.7% 2.3% 3.0% 2.2% -4.5% 3.9% 2.1% -5.0% -32.9% 25.4% 5.5% Unemployment Rate 4.7% 4.1% 3.9% 3.5% 9.0% 6.0% 3.5% 4.4% 11.1% 10.0% 9.0% CPI (YoY) 1.3% 2.1% 2.4% 1.8% 1.0% 2.1% 2.0% 2.1% 0.4% 0.8% 0.8% Core PCE (YoY) 1.6% 1.6% 2.0% 1.6% 1.1% 1.5% 1.6% 1.7% 0.9% 1.1% 1.1%

Sources: Historical data via FactSet. Estimates (Est.) via American Enterprise Investment Services, Inc. YoY = Year-over-year, Unemployment numbers are period ending. GDP: Gross Domestic Product; CPI: Consumer Price Index PCE: Personal Consumption Expenditures Price Index. Core excludes food and energy. Last Updated: July 31, 2020 Please note: Due to the very dynamic nature of current economic conditions, economic forecasts may change measurably and quickly.

ECONOMIC NEWS OUT TODAY: Economic Releases for August 7, 2020. All times Eastern. Consensus estimates via Bloomberg.

Time Period Release Consensus Est. Actual Prior Revised to 8:30 AM JUL Change in Nonfarm Payrolls +1500k +1763k +4800k +4791k 8:30 AM Two-Month Payroll Net Revision +17k 8:30 AM JUL Change in Private Payrolls +1400k +1462k +4767k +4737k 8:30 AM JUL Change in Manufacturing Payrolls +270k +26k +356k +357k 8:30 AM JUL Unemployment Rate (U3) 10.5% 10.2% 11.1% 8:30 AM JUL Underemployment Rate (U6) N/A 16.5% 18.0% 8:30 AM JUL Average Hourly Earnings MoM -0.5% +0.2% -1.2% 8:30 AM JUL Average Hourly Earnings YoY +4.2% +4.8% +5.0% 8:30 AM JUL Average Weekly Hours All Employees 34.4 34.5 34.5 34.6 8:30 AM JUL Labor Force Participation Rate 61.8% 61.4% 61.5% 3:00 PM JUN Consumer Credit +$10.0B -$18.3B

Economic Perspective: Russell T. Price, CFA – Chief Economist  The job market recovery stalled in July, but the impact of a resurgence of new virus cases was not as bad as some had feared. According to today’s Labor Department release, employers added 1.76 million net new jobs from mid-June through mid-July after gaining 4.8 million from mid-May through mid-June. Given the dynamic nature of the current environment, we believe it’s important to remember that the data used in the Labor Department’s Jobs Report is collected in the second week of the month (the week that contains the 12th, to be specific). The chart at right is sourced from FactSet and HAS been updated for today’s release.  Every primary sector indicated by the Labor Department showed a sharp deceleration in job growth, but all but three (Energy, Information, and Wholesale Trade) added workers. Government employment also surged by 301k in reflection of

this year’s delayed Census count. The leisure & hospitality, manufacturing and retail trade sectors showed the sharpest slowdowns in job gains relative to their June numbers.  We may already be past the soft-patch. Starting in mid-June, many businesses were forced to close once-again amid a resurgence of new coronavirus cases in their local area. The shut-downs were concentrated in some of the nation’s highest population states in the south and west, stretching from Florida to California, and primarily effected businesses that rely on people coming together in gatherings such as bars and restaurants.  More recently, a few high-frequency indicators appear to offer some tentative encouragement that the employment recovery freeze may be beginning to thaw. This would correlate with data showing the national number of virus cases and, more importantly in our view, hospitalizations, has been “rolling-over,” based on data from The COVID Tracking Project.  Almost all industries have experienced reduced demand and shed workers over the last few months. But the leisure and hospitality (L&H) sector, which includes bars, restaurants (incl. fast food), casinos, amusement parks, sporting and music event venues, zoos, museums, and other gathering places, has been at the center of job fluctuations.  Consider: – In 2019, the L&H sector accounted 16.6 million nonfarm payroll jobs, or about 11% of total employment. – L&H accounted for 38% of all nonfarm payroll jobs lost in March and April (8.3 million out of 22.2 million). – It then accounted for 47% of the jobs recovered in May and June (3.5 million out of 7.5 million). – The sector also offers the lowest average hourly earnings of any primary industry as measured by the BLS. As shown in the chart below, the sector offers average weekly wages of $433.25 versus an average for all industries of $1,013.27, according to the Labor Department. The lower wages and higher job losses leaves workers in the sector much more reliant on the federal support programs currently being debated in Washington.  Other measures of economic activity for July are yet likely to show a similar lull in activity - most notably, retail sales.  Simple momentum is a very important yet often overlooked consideration in gauging economic prospects at any time. Unfortunately, this could work against near-term recovery prospects as some of the country’s highest population and highest business activity states and regions have recently found it necessary to reverse certain reopening policies. Employment at bars, restaurants and other businesses typically characterized by large crowds or close quarters could slow as the summer vacation season is likely to be very subdued across most of the country.

FIXED INCOME NEWS & VIEWS: Brian M. Erickson, CFA, Fixed Income Research & Strategy

Please see our Morning Research Notes report for today’s fixed income commentary. Fixed Income News & Views will return to this space on Monday.

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Ameriprise Investment Research Group

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RESEARCH & DUE DILIGENCE LEADER MANAGER RESEARCH FIXED INCOME RESEARCH & STRATEGY

Lyle B. Schonberger - Vice President Michael V. Jastrow, CFA – Vice Fixed Income Research President Brian M. Erickson, CFA – Vice Business Unit Compliance Liaison President Mark Phelps, CFA – Director – Multi- (BUCL) Asset Solutions Jeff Carlson, CLU, ChFC – Sr. Manager High Yield and Investment Grade

Credit ETFs, CEFs, UITs Investment Research Coordinator Jon Kyle Cartwright – Sr. Director Jeffrey R. Lindell, CFA – Director Kimberly K. Shores Stephen Tufo – Director James P. Johnson, CFA, CFP® – Sr Sr. Administrative Assistant Analyst Jillian Willis RETIREMENT RESEARCH Alternatives STRATEGISTS Justin E. Bell, CFA – Vice President – Jay C. Untiedt, CFA, CAIA, RICP – Vice Head of Quantitative Research and President Chief Market Strategist Alternatives David M. Joy – Vice President Nidhi Khandelwal – Director Kay S. Nachampassak – Director - Matt Morgan – Sr. Manager Global Market Strategist Alternatives Anthony M. Saglimbene – Vice President Quantitative Research Kurt J. Merkle, CFA, CFP®, CAIA – Sr Thomas Crandall, CFA, CMT, CAIA – Director Sr. Director, Asset Allocation Peter W. LaFontaine – Sr Analyst

Cedric Buermann Jr., CFA – Analyst – David Hauge, CFA – Analyst Quantitative, Asset Allocation Blake Hockert – Sr Associate Gaurav Sawhney – Research Analyst Bishnu Dhar – Sr Research Analyst Amit Tiwari – Sr. Research Associate Parveen Vedi – Sr Research Associate

Chief Economist Darakshan Ali – Research Process Russell T. Price, CFA – Vice President Trainee

Retirement Research Equities Jay C. Untiedt, CFA, CAIA, RICP – Vice Christine A. Pederson, CAIA, CIMA – Sr President Director – Growth Equity, Infrastructure & REIT

EQUITY RESEARCH Benjamin L. Becker, CFA – Director – International/Global Equity Equity Research Director Cynthia Tupy, CFA – Director – Value Justin H. Burgin – Vice President and Equity Income Equity Consumer Goods and Services Alex Zachman, CFA – Analyst – Core Patrick S. Diedrickson, CFA – Director Equity Energy/Utilities William Foley, ASIP – Director Fixed Income Steven T. Pope, CFA, CFP® – Sr Financial Services/REITs Director – Non-Core Fixed Income Lori Wilking-Przekop – Sr Director Douglas D. Noah, CFA – Sr Analyst – Health Care Core Taxable & Tax-Exempt Fixed Daniel Garofalo – Director Income Industrials/Materials Frederick M. Schultz – Director

Technology/Telecommunication Open

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______© 2020 Ameriprise Financial, Inc. All rights reserved. Page 9 of 11 Before The Bell August 7, 2020 ______third-party research which provides additional investment DEFINITIONS OF TERMS highlights. SEC filings may be viewed at sec.gov Agency – Agency bonds are issued by Government Sponsored Enterprises (GSE) but are NOT direct obligations All fixed income securities are subject to a series of risks of the U.S. government. Common GSE’s are the Federal which may include, but are not limited to: interest rate risk, Home Loan Mortgage Corp. (Freddie Mac) Federal National call risk, refunding risk, default risk, inflations risk, liquidity Mortgage Association (Fannie Mae) and Federal Home Loan risk and event risk. Please review these risks with your Bank (FHLB). financial advisor to better understand how these risks may affect your investment choices. In general, bond prices rise Beta: A measure of the risk arising from exposure to general when interest rates fall and vice versa. This effect is usually market movements as opposed to company-specific factors. more pronounced for longer-term securities. This means Betas in this report, unless otherwise noted, use the S&P you may lose money if you sell a bond prior to maturity as a 500 as the market benchmark and result from calculations result of interest rate or other market movement. over historic periods. A beta below 1.0, for example, can suggest the equity has tended to move with lower volatility Any information relating to the income or capital gains tax than the broader market or, due to company-specific treatment of financial instruments or strategies discussed factors, has had higher volatility but generally low herein is not intended to provide specific tax advice or to be correlations with the overall market. used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances Corporate Bonds – Are debt instruments issued by a private from an independent tax professional. corporation. Non-Investment grade securities, commonly known as “high-yield” or “junk” bonds, are historically A real estate investment trust or REIT is a company that subject to greater risk of default, including the loss of owns and operates income-producing real estate. In principal and interest, than higher-rated bonds, which may addition, some REITs participate in the financing of real result in greater price volatility than experienced with a estate. To qualify as a REIT, a company must: I) invest at higher-rated issue. least 75% of its total assets in real estate assets, II) generate at least 75% of its gross income from real property Mortgage Backed Securities – Bonds are subject to or interest, and III) pay at least 90% of its taxable income to prepayment risk. Yield and average lives shown consider shareholders in the form of distributions. A company that prepayment assumptions that may not be met. Changes in qualifies as a REIT is permitted to deduct the distributions payments may significantly affect yield and average life. paid to shareholders from its corporate taxes. Consequently, Please contact your financial advisor for information on many REITs target to payout at least 100% of taxable CMOs and how they react to different market conditions. income, resulting in virtually no corporate taxes. Municipal Bonds – Interest income may be subject to state An investment in a REIT is subject to many of the same risks and/or local income taxes and/or the alternative minimum as a direct investment in real estate including, but not tax (AMT). Municipal securities subject to AMT assume a limited to: Illiquidity and valuation complexities, redemption “nontaxable” status for yield calculations. Certain municipal restrictions, distribution and diversification limits, tax bond income may be subject to federal income tax and are consequences, fees, defaults by borrowers or tenants, identified as “taxable”. Gains on sales/redemptions of market saturation, balloon payments, refinancing, municipal bonds may be taxed as capital gains. If the bonds bankruptcy, decreases in market rates for rents and other are insured, the insurance pertains to the timely payment of economic, political, or regulatory occurrences affecting the principal (at maturity) and interest by the insurer of the real estate industry. underlying securities and not to the price of the bond, which will fluctuate prior to maturity. The guarantees are backed Ratings are provided by Moody’s Investors Services and by the claims-paying ability of the listed insurance company. Standard & Poor’s. Treasury Securities – There is no guarantee as to the Non-Investment grade securities, commonly known as market value of these securities if they are sold prior to "high-yield" or "junk" bonds, are historically subject to maturity or redemption. greater risk of default, including the loss of principal and Price/Book: A financial ratio used to compare a company’s interest, than higher-rated bonds, which may result in market share price, as of a certain date, to its book value greater price volatility than experienced with a higher-rated per share. Book value relates to the accounting value of issue. assets and liabilities in a company’s balance sheet. It is generally not a direct reflection of future earnings prospects Securities offered through AFSI may not be suitable for all investors. or hard to value intangibles, such as brand, that could help Consult with your financial advisor for more information regarding generate those earnings. the suitability of a particular investment. Price/Earnings: An equity valuation multiple calculated by For further information on fixed income securities please refer to dividing the market share price, as of a certain date, by FINRA’s Smart Bond Investing at FINRA.org, MSRB’s Electronic Municipal Market Access at emma.msrb.org, or Investing in Bonds earnings per share. Trailing P/E uses the share price at investinginbonds.com. divided by the past four-quarters’ earnings per share. Forward P/E uses the share price as of a certain date

Price/Sales: An equity valuation multiple calculated by dividing the market share price, as of a certain date, by the company’s sales per share over the most recent year.

INDEX DEFINITIONS An index is a statistical composite that is not managed. It is not possible to invest directly in an index.

Definitions of individual indices mentioned in this report are available on our website at ameriprise.com/legal/disclosures in the Additional Ameriprise research disclosures section, or through your Ameriprise financial advisor.

DISCLAIMER SECTION Except for the historical information contained herein, certain matters in this report are forward-looking statements or projections that are dependent upon certain risks and uncertainties, including but not limited to, such factors and considerations as general market volatility, global economic and geopolitical impacts, fiscal and monetary policy, liquidity, the level of interest rates, historical sector performance relationships as they relate to the business and economic cycle, consumer preferences, foreign currency exchange rates, litigation risk, competitive positioning, the ability to successfully integrate acquisitions, the ability to develop and commercialize new products and services, legislative risks, the pricing environment for products and services, and compliance with various local, state, and federal health care laws. See latest third-party research reports and updates for risks pertaining to a particular security.

This summary is based upon financial information and statistical data obtained from sources deemed reliable, but in no way is warranted by Ameriprise Financial, Inc. as to accuracy or completeness. This is not a solicitation by Ameriprise Financial Services, Inc. of any order to buy or sell securities. This summary is based exclusively on an analysis of general current market conditions, rather than the suitability of a specific proposed securities transaction. We will not advise you as to any change in figures or our views.

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