emerging markets debt hard currency capabilities berman/fixed...a track record of client...

For Professional Client Use Only

Emerging Markets Debt – Hard Currency CapabilitiesOctober 2018

FIRM OVERVIEW

Employee-Owned Investment Manager

Partnering with clients to achieve their unique objectives

Long-term Outperformance2Alignment of Interests

Portfolio managers invest alongside clients

Breadth of Independent Perspectives

601 investment professionals1 connected across public and

private markets, equity, fixed income and alternatives

Experienced and Stable Teams

25+ year average industry experience for lead PMs; 96%

annualized retention rate of senior investment professionals at MD

and SVP level since becoming an independent company in 2009

Innovative Investment Solutions

A track record of client partnerships and long-term performance

90%Institutional-oriented equity

Percentage of institutional-oriented AUM outperforming

benchmark since inception ended June 30, 2018

95%Institutional-oriented fixed income

Percentage of institutional-oriented AUM outperforming

benchmark since inception ended June 30, 2018

74%

Private equity

Percentage of NB Private Equity funds raised between

2005 – 2015 (since inception performance)

outperforming benchmark Net IRR

Deep Resources

Extensive fundamental research, access to management,

innovative ESG research, and sophisticated risk management

1. As of August 31, 2018.2. Institutional-oriented equity and fixed income assets under management (“AUM”) includes the firm’s equity and fixed income institutional separate account (“ISA”), registered fund, and managed account/wrap (“MAG”) offerings and are based on the overall performance of each individual investment offering against its respective benchmark. High net worth/private asset management (“HNW”) AUM is excluded. If HNW AUM were included, the percentage of AUM outperforming the benchmark since inception period would have been 75% for equities and 84% for fixed income. Equity and Fixed Income AUM outperformance results are asset-weighted so individual offerings with the largest amount of assets under management have the largest impact on the results. Please see additional disclosures for important information regarding Private Equity methodology. All performance data for NB Private Equity funds, public and private indices data is as of December 31, 2017. Results are shown gross of fees. Individual offerings may have experienced negative performance during certain periods of time. See Additional Disclosures for additional information regarding the outperformance statistics shown (including 3-, 5- and 10-yr statistics for institutional-oriented equity and fixed income). Indexes are unmanaged and are not available for direct investment. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.

3

Employee Ownership Fosters Team Stability and Alignment with Clients

Industry-leading experience, retention and culture

1. Employee assets include current and former employees and their family members.

of clients’ assets managed by

lead PMs who have 20+ years

of industry experience

Manager Experience

Retention Levels For Senior Investment Professionals

Managing Directors

(includes retirements)

Managing Directors

(competitor departures only)

98%

98%

99%

91%

94%

100%

99%

100%

99%

100%

2013

2014

2015

2016

2017

93%

Alignment With Clients

invested by Neuberger Berman employees

alongside clients1~$3bn100%independent,

employee-owned

Ownership Structure

deferred cash compensation directly linked to team

and firm strategies100%

Our Culture

2013 2014 2015

2016 2017

4

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi4nP-UvfrLAhXCJh4KHTelByYQjRwIBw&url=https://www.trsretire.com/industry_awards.jsp&bvm=bv.118443451,d.dmo&psig=AFQjCNFS3swgy264EL-T9uAUy7LzUMo8Og&ust=1460048075527346

Investment Platform

Breadth of independent perspectives across asset classes

1. As of June 30, 2018. Firm assets under management (AUM) includes $103.3 billion in Equity assets, $132.2 billion in Fixed Income assets and $68.9 billion in Alternatives assets. Alternatives “AUM and Committed Capital” includes assets under management for non-Private Equity businesses and Committed Capital since inception for the Private Equity businesses. Committed Capital since inception reflects all contractual commitments, including those still in documentation, to fund investments, including those which have since been realized, advised by NB Alternatives Advisers LLC and its affiliates or predecessors (the oldest mandate of which was founded in 1981).2. As of August 31, 2018.

EQUITY FIXED INCOME ALTERNATIVES

AUM $304bn1

Investment

Professionals2

$103bn

228

$132bn

176

Risk Parity

Global Tactical Asset Allocation

Global Relative & Absolute Return

Income Focused

Inflation Management

Liability Aware

$77bn AUM and Committed Capital

152

Quantitative Global

U.S.

Emerging Markets

Custom Beta

Risk Premia

Options

Global Macro

Commodities

Fundamental Global Investment Grade

Global Non-Investment Grade

Emerging Markets, Regional EM, China

Multi-Sector, Opportunistic

Municipals

Specialty Strategies

– CLO Mezzanine

– Currency

– Corporate Hybrids

Private Equity:

– Primaries

– Co-Investments

– Secondaries

– Specialty Strategies– Minority stakes in

alternative firms - Dyal

Alternative Credit:

– Private Credit

– Residential Loans

– Special Situations

Hedge Funds:

– Multi-Manager

– Equity Long/Short

– Credit Long/Short

– Event Driven

QuantitativeFundamental

MULTI-ASSET CLASS SOLUTIONS AND STRATEGIC PARTNERSHIPS

Integration of Environmental, Social and Governance Factors

Global, EAFE

U.S. Value, Core, Growth

Emerging Markets

Regional EM, China

Global Thematic, Disruptive Themes

Sustainable Equity

Income Strategies

– MLP

– REITs

5


Fixed Income Organization

Supported by over 150 US and Global Money Managers, Research Analysts and Associates

As of July 31, 2018Combined investment professionals of the firm and affiliated investment management entities.*As previously announced Andy will be retiring at the end of 2018 and will transition his portfolio management responsibilities to a group of senior portfolio managers across Global Investment Grade and the Multi-Sector Fixed Income Group. Given our team-based approach, each account will continue to be managed by portfolio managers that have a deep understanding of each portfolio and the client’s unique objectives.**As of May 25, 2018, it was announced that Martin Rotheram intends to depart the firm. Martin will work with the members of the investment team to ensure an orderly handover of his credit responsibilities over the next six months.

GLOBAL FIXED INCOMEBRAD TANK

EMERGING MARKETS DEBT

ROB DRIJKONINGEN

GORKY URQUIETA

Hard Currency

Bart van der Made

Local Currency

Raoul Luttik

Corporates

Jennifer Gorgoll

Nish Popat

Research

Puay Yeong Goh

Vera Kartseva

Kaan Nazli

Asian Fixed Income

Prashant Singh

GLOBAL NON-INVESTMENT

GRADE

TOM O’REILLY

High Yield

Russ Covode

Dan Doyle

Patrick Flynn

Joseph Lind

Tom O’Reilly

Senior Floating Rate Loans /

Structured Credit

Stephen Casey

Joseph Lynch

Martin Rotheram**

Pim Van Schie

Research

Chris Kocinski

Steve Ruh

European High Yield

Vivek Bommi

Martin Rotheram**

GLOBAL INVESTMENT

GRADE

DAVE BROWN

ANDREW JOHNSON*

Rates

Thanos Bardas

Anthony Woodside

Credit

Dave Brown

Julian Marks

Bob Summers

Securitized

Jason Smith

Tom Sontag

Currency

Ugo Lancioni

Research

Steve Flaherty

Dmitry Gasinsky

Core/Core Plus

Thanos Bardas

Dave Brown

Nate Kush

Tom Marthaler

MUNICIPALS

JAMES ISELIN

Cash/Short Duration

Kristian Lind

Intermediate

James Iselin

S. Blake Miller

High Income

James Iselin

S. Blake Miller

Eric Pelio

Research

James Lyman

ALTERNATIVES

Global Credit

Long / Short

Rick Dowdle

Norman Milner

Special Situations

Michael Holmberg

Brendan McDermott

Ravi Soni

Residential Loans

Terry Glomski

MULTI-SECTOR

SOLUTIONS

BRAD TANK

Global / US Opportunistic

Strategies

Thanos Bardas

Ashok Bhatia

Dave Brown

Andrew Johnson

Jon Jonsson

Tom Marthaler

Research

David Tang

Insurance Solutions

Jason Pratt

Inflation / Liability Aware

Thanos Bardas

Olumide Owolabi

Ronit Walny

China Fixed Income

Peter Ru

6

EMERGING MARKETS DEBT


Emerging Markets Debt at Neuberger Berman

An experienced investment team with a proven multi site approach

Experienced Team

• Early investors in EMD:

– Hard Currency since 1994

– Local Currency (FX and rates)

since 1998

– Emerging Corporate Bonds

since 2003

– Dedicated China Onshore

Fixed Income Strategies since

2015

• Senior managers have been

working together since 2000

Full Range of EMD Capabilities

• Multi-site team ensures local

perspective incorporated

• Dedicated specialists focused on

hard currency, local currency,

corporate and China onshore

strategies

• Asset allocation capabilities

across EMD asset classes

Structured, Research-Driven

Investment Process

• Diversified set of alpha sources

on the back of bottom-up and top-

down processes

• An emphasis on fundamental

research including ESG factors

• Consistent, disciplined investment

process across strategies

Integrated Risk Management

• Seeks to ensure portfolio risks are

transparent, intentional and

consistent with our investment

strategy

• Additional risk management

oversight at firm level

_______________________As of May 2018. The portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice. Please see relevant risk disclaimers at back of document.

8


Emerging Markets Debt Team

_______________________As of October 2018.Yrs’ denotes years of investment experience

Hard Currency

Bart van der Made

Hard Currency Strategy Leader

Sr. PM / 21 yrs – The Hague

Rob Drijkoningen Global Co-Head of EMD

28 yrs – The Hague

Local Currency - Global

Sukhjeet Reehal

PM / 13 yrs – The Hague

Thijs Verheijden

PM / 8 yrs – The Hague

Raoul Luttik

Local Currency Strategy Leader


Prashant Singh

Asian Fixed Income Strategy Leader

Sr. PM 15 yrs – SingaporeMike Reyes

PM / 15yrs – Singapore

Corporate

Nish Popat

EM Corporate Strategy Co-Leader


Jennifer Gorgoll

EM Corporate Strategy Co-Leader

Sr. PM / 20 yrs – Atlanta

Manuel Guerena

Sr. Corporate Analyst / 26 yrs – The Hague

Sean Jutahkiti

Director Asian Corporate Research

/ 17 yrs – Singapore

Gorky UrquietaGlobal Co-Head of EMD

24 yrs – Atlanta

Economists / Strategists

Kaan Nazli

Sr. Economist / 18 yrs – The Hague

Puay Yeong Goh

Sr. Economist / 14 yrs – Singapore

Vera Kartseva

PM / Strategist (TAA) / 11 yrs – The Hague

Lei Wan

Quant Analyst / 7 yrs – The Hague

Alexandru Ursu

Trader / 7 yrs – The Hague Ram Bala Chandran

PM / 11 yrs – Atlanta

Doreen Saik

Sr. Corporate Analyst / 12 yrs – Singapore

Greg Magnuson

Sr. Corporate Analyst / 18 yrs – Atlanta

Gui Xiong Teo

Corporate Analyst / 8 yrs – Singapore

Alexander Sklemin

Sr. Corporate Analyst / 13 yrs– The Hague

Portfolio Specialists

Isidro Arrieta

Sr. Corporate Analyst / 11 yrs – Atlanta

Gloria Lam

Sr. Corporate Analyst / 11 yrs – Singapore

Peter Ru

China Fixed Income Strategy Leader

Sr. PM / 23 yrs – Shanghai

Ian Chong

PM / 10 yrs – Shanghai

Local Currency – China Onshore

Wenjin Li

Trader / 4 yrs – Shanghai

Samuel Wong

Corporate Analyst / 5 yrs – Shanghai

Zhilun Xu

Corporate Analyst / 4 yrs – Shanghai

Stéphane Xavier

Trader / 3 yrs – The Hague

Leonardo Bernardini

11 yrs – The Hague

Adam Grotzinger

15 yrs – Singapore

Rebecca Lohse

13 yrs – Atlanta

9

Darius Sie

Associate PM / 3 yrs – Singapore


Emerging Markets Debt - Summary of Assets Under Management

Strategy AUM ($’s In Millions)

10

As of September 30, 2018

For this purpose, Institutional includes assets of Institutional Separate Accounts and Neuberger Berman sponsored U.S. registered '40 Act open-end funds held by institutional clients including defined benefit & defined contribution plans and non-U.S. offshore funds held by institutional clients. See Additional Disclosures at the end of this piece, which are an important part of this presentation.1. Registered Fund includes Neuberger Berman sponsored U.S. registered '40 Act open-end fund and non-U.S. offshore funds (i.e. UCITS).2. Private Funds includes Neuberger Berman sponsored alternative collective investment vehicle with eligibility restrictions.3. Represents 26 mandates that the investment team manages a portion of.4. Excludes investments in the China Bond Fund by other EMD strategies to avoid double counting5. Based on the high level benchmark classification.

Blend, $6,766

Hard Currency,

$3,963

Corporates, $151

Short Duration, $3,791

Asian HC, $16

Local Currency,

$4,773

China Bond, $18

AUM BY

STRATEGY

($’s in Millions)

Hard Currency,

$8,914

Local Currency,

$7,119

Corporates, $3,445

AUM BY SUB-

ASSET CLASS5

($’s in Millions)

# of Funds / Accounts AUM % of Total

UCITS Fund1

Hard Currency 1 $1,464 8%

Local Currency 1 $2,449 13%

Corporate Debt 1 $128 1%

Short Duration (50% HC / 50% Corp) 1 $3,646 19%

Blend (50% LC / 25% HC / 25% Corp) 1 $1,742 9%

Blend IG (67% HC / 33% LC) 1 $15 0%

Asian Hard Currency 1 $16 0%

China Bond Fund 1 $11 0%

Mutual Fund1

Blend (50% LC / 25% HC / 25% Corp) 1 $207 1%

Private Fund2

Blend (50% LC / 25% HC / 25% Corp) 2 $414 2%

Short Duration (50% HC / 50% Corp) 1 $20 0%

China Bond 1 $7 0%

Separate Account

Blend (50% LC / 50% HC) 4 $2,289 12%

Blend (HC / Corp) 4 $2,099 11%

Hard Currency 4 $1,066 5%

Local Currency 5 $2,324 12%

Allocation from Fixed Income Mandates3

Hard Currency / Short Duration / Corporate * $1,581 8%

TEAM ASSETS UNDER MANAGEMENT4 30 $19,478 100%

Institutional $14,058 72%

Intermediary/HNW $5,420 28%


Neuberger Berman’s EMD Strategies

11

_______________________* As of August 31, 2018. ** US Private Funds (commingled): Blend and Short Duration are funded, the others are available for funding.UCITS funds are generally not available to US Investors

Private funds are not available to all investors

LOCAL CURRENCY HARD CURRENCY CORPORATES BLEND BLEND INVESTMENT GRADE

OverviewExposure to EM opportunities

through local currency bonds

Exposure to EM opportunities without

EM currency risk

Exposure to the rapidly growing

opportunities in EM credit

Exposure to a dynamic portfolio which

takes advantage of the broad EM debt

spectrum

Exposure to a wide opportunity set of

investment grade EM debt, with a bias

towards hard currency denominated debt.

Benchmark JP Morgan GBI-EM GD Index JP Morgan EMBI GD Index JP Morgan CEMBI Diversified Index

Blend of JP Morgan GBI-EM GD

(50%), EMBI GD (25%) & CEMBI

Diversified (25%) Indices

Blend of JP Morgan EMBI GD IG (67%) &

GBI-EM GD IG 15% Cap (33%)

Risk Budget

(over a market cycle)

Targeted Tracking Error 2-5% 2-6% 2-4% 2-6% 1-3%

Target Excess Return p.a. (gross) 1-2% 1-2% 1-2% 1-3% 1%

Asset Allocation

Sovereigns No Max No MaxMax 33%

(Sovereign /or Quasi sovereign)

HC Sovereign 10-60%

Local Currency 20%-80%

HC Sovereign 40-90%

Local Currency 10%-50%

Non Sovereign Max 20%

Max 50% (Max Quasi-sovereign 35%/

Max Sub-sovereign 10%/ Max Supra-

national 10%/Max Corporates 15%)

No Max

Max Quasi-sovereign 30%

Max Sub-sovereign 15%

Max Supra-national 10%

Max Corp 60%

Max Quasi-sovereign 40%

Max Sub-sovereign 15%

Max Supra-national 10%

Max Corp 15%

Hard or Local Currency Local Hard Max 33% Local Both Both

Benchmark Average

Credit Quality(S&P)*BBB BB+ BBB- - -

Active Duration Management +/- 2 years +/- 1.5 years +/- 1.5 years +/- 3 years +/- 3 years

Available Vehicles

Separate Account P P P P P

UCITS P P P P P

Mutual Fund (US) P

US Private Funds (commingled)** P P P P


Neuberger Berman’s EMD Strategies

12

Continued

_______________________* As of August 31, 2018.

** US Private Funds (commingled): Blend and Short Duration are funded, the others are available for funding.*** Based on linear average rating UCITS funds are generally not available to US Investors.Private funds are not available to all investors.

SHORT DURATION ASIAN HARD CURRENCY CHINA BOND (TOTAL RETURN) CHINA BOND (CORE)

Overview

Exposure to a short duration EM

portfolio of hard currency bonds with an

average IG rating***

Exposure to deeper and broader regional sub-

set of EM Sovereign and Corporate universe,

primarily through hard currency bonds

Exposure to China opportunities in local

currency through a total return oriented

approach with flexible duration and sector

allocation

Exposure to China opportunities in local

currency through a high quality focused,

benchmark aware approach focused on

government-related bonds

Benchmark - JP Morgan Asia Credit Index (JACI) -JP Morgan JADE Broad Asia Diversified - Broad

China Index

Risk Budgeting

(over a market cycle)

Targeted Tracking Error Limited Volatility 1.5-3.5% 4 to 5% Volatility 1-2%

Target Excess Return p.a. (gross) 300bp above 3m US T-Bills 1-1.5% 300bp above 3m Chinese Gov’t Bills 1%

Asset Allocation

Sovereigns30-70% (Sovereign /or Quasi

sovereign)Max 60% No Max No Max (incl. Policy Banks)

Non Sovereign 30-70%Max quasi-sovereign 35% / Max Corporates

100%No Max Max 30% Corporates

Hard or Local Currency Hard Max 30% Local Max 33% USD, CNH or other offshore bonds Max 10% Hard

Benchmark Average

Credit Quality(S&P)*- BBB+ - A+

Active Duration Management 2+/-0.75 years + / - 1.5 years 0.5 – 5 years + /- 50% of benchmark duration

Available Vehicles

Separate Account P P P P

UCITS P P P

Mutual Fund (US)

US Private Funds (commingled)** P


It is our belief that:

• Emerging markets debt is a generally improving asset class that is less efficient than developed debt markets

• Active management is the best way for investors to access the full potential of the asset class

• Bottom-up and top down expertise deepens understanding of performance drivers and improves decision making quality

• An emphasis on fundamental research is the best way to uncover the potential of emerging markets debt

Market mispricing allows managers to produce alpha opportunities through fundamental research

Investment Philosophy

_______________________This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice. Please see relevant risk disclaimers at back of document.

13


Around the Clock Coverage

QuarterlyAll seniors meet in one location

MonthlyTop-down review for all Strategies

WeeklyPortfolio reviews between CEEMEA, Asian and LatAm

Teams

COMMUNICATION

Atlanta

The Hague

Singapore

KEY BENEFITS

Access to local in-depth

knowledge and research

Multi-site team with a presence across three time zones

24 hour market coverage

Local/regional trading allows timely

execution of investment decisions

_______________________Information as of December 2017. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice.

Shanghai

14


Gross of Fees Annualized¹ (%)

EMERGING MARKET DEBT HARD CURRENCY COMPOSITE (USD) YTD 1 Year 3 Year 5 Year Since Inception (06/01/13)

Composite -3.36 -1.22 8.35 6.58 5.66

JPM EMBI Global Diversified Index -3.04 -1.92 6.04 5.38 4.28

Relative -0.32 0.70 2.31 1.20 1.38

EMERGING MARKET DEBT LOCAL CURRENCY COMPOSITE (USD) YTD 1 Year 3 Year 5 Year Since Inception (07/01/13)

Composite -9.10 -8.42 5.67 -1.29 -1.15

JPM GBI-EM Global Diversified Index -8.15 -7.40 5.17 -1.68 -1.68

Relative -0.95 -1.02 0.50 0.39 0.53

EMERGING MARKET CORPORATE DEBT COMPOSITE (USD) YTD 1 Year 3 Year 5 Year Since Inception (07/01/13)

Composite -2.09 -0.75 6.24 5.57 5.56

JPM CEMBI Diversified Index -1.66 -1.13 5.58 5.02 5.00

Relative -0.43 0.38 0.66 0.55 0.56

EMERGING MARKET DEBT BLEND COMPOSITE (USD) YTD 1 Year 3 Year 5 Year Since Inception (10/01/13)

Composite -6.19 -4.98 6.30 2.31 2.31

EMD Income Blend index -5.21 -4.40 5.58 1.79 1.79

Relative -0.98 -0.58 0.72 0.52 0.52

SHORT DURATION EMERGING MARKET DEBT COMPOSITE (USD) YTD 1 Year 3 Year 5 Year Since Inception (11/01/13)

Composite 0.64 1.22 4.06 - 3.01

ML US Treasury 3-Month Bill 1.30 1.59 0.84 - 0.53

Relative -0.66 -0.37 3.22 - 2.48

ASIAN DEBT HARD CURRENCY COMPOSITE (USD) YTD 1 Year 3 Year 5 Year Since Inception (07/01/15)

Composite -1.99 -0.99 4.99 - 4.23

JPM Asian Credit Index (JACI) -1.41 -1.01 3.79 - 3.32

Relative -0.58 0.02 1.20 - 0.91

CHINA BOND COMPOSITE (RMB) YTD 1 Year 3 Year 5 Year Since Inception (07/01/15)

Composite 4.60 4.34 - - 2.88

China Bond Custom Index 4.40 4.14 - - 2.86

Relative 0.20 0.20 - - 0.02

Neuberger Berman EMD Composite Performance

_______________________Source: Neuberger Berman.1. Periods less than one year are not annualized. The inclusion of any individual security in this document does not constitute a recommendation to invest.Past performance is no guarantee of future results. Please refer to the attached GIPS compliant composite for complete performance information. Indexes are unmanaged and are not available for direct investment. Actual investment results will vary. As with any investment, there is the possibility of profit as well as the risk of loss. See Additional Disclosures at the end of this piece, which are an important part of this presentation.


15

EMERGING MARKETS DEBT HARD CURRENCY


Emerging Markets Debt Hard Currency

Objectives and characteristics

OBJECTIVES

Investment Objective

Outperform the JP Morgan EMBI GD Index over a 3 year period. The objective of the strategy is to achieve long term capital growth, by investing in a diversified

selection of debt instrument denominated in OECD currencies issued by issuers from low and middle income developing countries. The strategy mainly invests

in Latin American, Central and Eastern European, the Middle East, Asian and African debt instruments.

Benchmark JP Morgan EMBI GD Index

REPRESENTATIVE CHARACTERISTICS

Investment Universe Emerging Markets Sovereign, Quasi-Sovereign and Corporate Debt, issued in Hard Currency.

Investment Style Combining a focus on fundamental search for value in country exposure with top down market direction, corporate issuer and instrument selection components

Horizon and Turnover Medium- to Long-term investment horizon, relatively low turnover around 75% annually

Off-Benchmark Holdings Typically 15% - 40% in off-benchmark instruments

Instruments Hard Currency Bonds; Bond Futures; CDS; Cash Instruments; FX Forwards for currency hedging only.

Non-Sovereign Exposure

Maximum 50%, as per following exposure categories:

• Quasi-sovereign (100% state owned or explicit sovereign guarantee): 35%

• Sub-sovereign (state, regional, municipal debt): 10%

• Supra-national (world bank regional development banks): 10%

• Corporate: 15%

Max. Country /Max. Issuer Maximum country exposure 25%; Maximum corporate issuer 4%

_______________________For illustrative purposes only. Please see relevant risk disclaimers at back of document.

17


Investment Universe

Focus on a broad opportunity set of hard currency denominated EM bonds

The Investment Universe of the NB EMD Hard Currency Strategy comprises of:

+

Please note that we do manage various EMD HC mandates with restrictions on off-benchmark exposure.

Certain Off-benchmark exposures, including;

− Off-benchmark countries; typically countries with a relatively

high rating which fall somewhat in between Developed

and Emerging markets, e.g. Slovenia, Saudi Arabia

− EUR-denominated EM bonds

− EM Hard Currency Corporate bonds (max 15%)

All Constituents of the Benchmark Index

− (JPM EMBI Global Diversified;

147 issuers / 627 instruments as of 30 Sept 2017)

18


EMD Hard Currency Team and Organisation

Hard Currency

Lead Portfolio Manager

BART VAN DER MADE

Corporate Recommendations

• Nish Popat

• Jennifer Gorgoll

• + Analysts

Top Down Views

TAA Team & Lead PM

• Rob Drijkoningen

• Gorky Urquieta

• Vera Kartseva

• + Bart van der Made

ROB DRIJKONINGENGlobal Co-Head of EMD

GORKY URQUIETAGlobal Co-Head of EMD

Trading / Execution Time Zones

SINGAPORE THE HAGUE ATLANTA

• Alexandru Ursu• Mike Reyes • Ram Bala Chandran

Country Positioning & Trade Ideas

LATAMEMEAASIA

• Mike Reyes

• Puay Yeong Goh

• Kaan Nazli

• Bart van der Made

• Alexandru Ursu

• Gorky Urquieta

• Ram Bala Chandran

STRATEGY OVERSIGHT

19


Hard Currency Investment Process Overview

Top down and bottom up approach with multiple potential alpha sources

1Top Down

EMD Asset Class Review

2Bottom Up

Country / Issuer / FX Review

3Strategy Setting, Risk

Management and Model

Portfolio Construction

4Portfolio Customization,

Process & Performance

Evaluation

EXPECTED ALPHA CONTRIBUTION1

Country Credit 60%

Top Down Analysis 15%

Corporate Credit and Sector 15%

Instrument Selection 10%

_______________________1. Expected Alpha contribution data is estimated and for illustrative purposes only. Forecasts may not materialize and actual data could differ. Past performance is not indicative of future results. As with any investment, there is the possibility of loss of the amount invested. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice.

20


_______________________This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice.

Top Down EMD Asset Class Review

Leveraged across all strategies to define risk profiles

Broad Market Environment for EMD

• G3 rates and spread outlook

• Global liquidity conditions

• Global growth outlook

• Inflation outlook

• Tail risk events

Near term demand/supply

• EMD inflows/outflows

• Market positioning

• Issuance outlook

Aggregates extensive

individual country analysis

• Outlook for growth and inflation

• Current account trend

• Reserve levels

• Debt-to-GDP dynamics

• Monetary & FX policies

Market pricing

• Value of absolute yields

• Value of relative yields

• FX REERs

TOP DOWN SCORE

PER STRATEGY1 = potential to increase risk

0 = neutral risk position

-1 = defensive risk position

1

23 4

21


Hard Currency: Bottom up Analysis

1

23 4

Country Credit Analysis

Macroeconomic Factors (60%) Weighting

DOMESTIC ECONOMY

Real GDP growth, % p.a.

Nominal GDP, US$ billion

GDP per Capita, US$

CPI Inflation, % p.a.

Fiscal Balance % GDP

EXTERNAL SECTOR AND DEBT

Current Account Balance % GDP

External Debt as % GDP

Short-term Debt % Reserves

Reserves – Import Coverage

Public Debt % Public Revenues

ESG

Factors

(40%)

Social Governance:

Economic

Governance:

Legal & Political

Environment

• Rule of law

• Corruption

• Politics and election

Calendar

• Energy intensity of GDP

Country scores are forward-looking (12-18 month):

100 = strong; 0 = weak

More EmphasisLess Emphasis

• Banking system

strength

• Nonperforming loans

• Ease of doing

business

• Funding sources

• Market capitalization

• Trade openness

• Government

effectiveness

• Regulatory

quality

• Political

stability &

security

• Human

development

• Voice and

accountability

_______________________For illustrative purposes only. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice.

22


ESG Country Rankings

Source: Neuberger Berman. As of April 23, 2018.

Year

2018 POLITICS

ESG SCORE Energy Intens i ty Government

Effectiveness

Regulatory

Qual i ty

Pol i tica l Stabi l i ty

& Securi ty

Human

Development

Voice and

Accountabi l i ty

Rule of Law Corruption Ease of Doing

Bus iness

Pol i tics &

Election

Calendar

Funding

Sources

Banking Sector Risk

Assessment

Banking Sector Asset

Qual i ty

Market

Capita l i zation

Trade

Openness

Weights 100.0% 5.0% 10.0% 10.0% 7.5% 5.0% 5.0% 10.0% 10.0% 2.5% 7.5% 10.0% 7.5% 5.0% 2.5% 2.5%

Singapore 88.5 99.9 94.2 93.6 80.6 89.3 44.3 86.6 84.0 98.9 100.0 100.0 80.0 83.4 99.0 90.9

Hong Kong 86.4 100.0 87.2 93.1 66.8 88.2 55.4 83.9 77.0 97.2 100.0 100.0 80.0 87.7 99.5 90.9

Chile 76.1 96.2 70.4 77.5 60.3 78.1 69.9 72.5 67.0 69.4 90.0 85.0 70.0 101.9 93.5 38.5

Taiwan 75.9 99.9 77.4 75.8 68.5 87.0 70.7 72.8 63.0 91.7 80.0 70.0 60.0 93.4 98.9 81.8

South Korea 71.4 55.0 71.4 72.3 53.4 85.9 62.5 72.8 54.0 97.8 100.0 70.0 70.0 82.4 93.7 59.1

United Arab Emirates 71.2 83.5 78.3 69.5 58.8 77.1 27.6 67.7 71.0 88.3 90.0 90.0 50.0 52.5 85.1 90.9

Lithuania 70.9 97.5 71.7 72.7 66.0 78.3 69.7 70.4 59.0 91.1 80.0 90.0 40.0 64.5 23.9 87.3

Czech Republic 69.7 83.4 71.2 69.7 69.8 82.5 70.9 71.9 57.0 83.3 80.0 60.0 70.0 57.4 52.0 85.4

Slovenia 69.3 91.9 72.4 62.8 69.9 84.3 69.9 71.7 61.0 79.4 75.0 90.0 40.0 22.7 90.5 78.8

Latvia 68.5 95.8 70.0 71.6 57.8 75.7 67.4 69.0 58.0 89.4 90.0 90.0 30.0 61.4 11.2 70.7

Israel 68.2 98.8 77.1 76.3 33.5 85.6 65.4 70.4 62.0 70.0 70.0 55.0 60.0 83.4 92.1 45.8

Slovak Republic 66.9 91.5 67.8 67.8 62.5 77.8 68.8 63.9 50.0 78.3 70.0 90.0 60.0 42.2 13.6 88.5

Poland 66.4 94.9 63.8 69.0 60.2 79.3 66.7 63.6 60.0 85.0 70.0 70.0 50.0 43.7 88.5 68.5

Qatar 63.8 60.4 65.0 63.9 67.3 79.4 26.1 67.3 63.0 53.9 65.0 85.0 50.0 46.4 89.5 60.2

Costa Rica 62.4 99.6 57.1 58.1 64.9 66.5 72.7 59.3 59.0 66.1 90.0 60.0 30.0 82.4 8.5 50.4

Uruguay 62.3 99.7 61.0 59.8 71.9 70.4 73.7 62.6 70.0 47.8 50.0 65.0 40.0 83.4 1.0 30.8

Bermuda 61.9 50.6 76.6 67.4 70.0 70.0 70.9 67.1 65.0 33.9 70.0 55.0 50.0 24.4 51.3 64.4

Malaysia 61.4 82.5 67.6 64.2 52.0 68.5 24.0 40.0 31.0 86.7 60.0 90.0 60.0 73.2 99.3 84.7

Hungary 61.2 95.1 59.1 62.1 64.3 76.6 57.4 60.2 45.0 73.3 80.0 60.0 40.0 40.5 44.8 90.9

Saudi Arabia 60.7 71.1 54.9 51.6 40.1 76.8 14.4 59.3 49.0 48.9 75.0 90.0 60.0 85.7 86.1 54.5

Oman 59.7 61.2 53.8 62.2 66.0 70.4 27.9 58.7 44.0 60.6 70.0 70.0 40.0 81.4 87.5 75.0

Namibia 58.5 99.0 53.4 47.3 64.9 46.8 62.3 57.9 51.0 41.1 80.0 60.0 40.3 77.4 38.1 56.9

Kuwait 58.5 80.0 46.4 48.5 47.1 73.8 36.1 50.7 39.0 46.7 70.0 85.0 60.0 75.5 91.3 60.6

Argentina 58.3 91.4 53.5 40.6 54.4 75.3 60.8 64.0 39.0 48.9 90.0 55.0 40.0 84.5 80.7 15.4

Croatia 58.2 97.0 59.7 57.1 63.5 75.3 60.4 58.7 49.0 71.7 75.0 50.0 30.0 18.6 85.9 62.3

Peru 57.8 99.8 46.6 60.2 46.8 62.0 55.6 40.1 37.0 67.8 80.0 75.0 50.0 70.0 74.2 30.9

China 56.8 46.7 57.2 44.7 39.6 61.1 17.7 45.5 41.0 56.7 100.0 100.0 40.0 76.4 90.3 28.0

Panama 56.4 100.0 53.7 57.2 58.7 68.5 60.6 50.5 37.0 56.1 40.0 60.0 50.0 78.4 32.7 70.8

Mexico 56.3 96.8 52.9 55.7 34.7 65.2 48.2 39.9 29.0 72.8 75.0 70.0 60.0 70.0 66.7 52.2

Colombia 55.9 100.0 50.5 58.0 30.8 60.0 51.9 43.7 37.0 67.2 90.0 70.0 40.0 68.3 63.0 28.1

Bahrain 54.7 23.0 56.5 62.2 32.8 74.8 21.1 59.2 36.0 63.3 70.0 90.0 30.0 51.2 84.5 88.2

Indonesia 54.5 97.6 50.3 47.6 42.4 54.8 52.9 42.9 37.0 60.0 80.0 70.0 30.0 74.5 83.3 27.4

Trinidad and Tobago 54.3 7.3 54.5 51.7 55.7 67.4 62.0 46.7 41.0 43.3 80.0 75.0 40.0 45.8 90.3 71.4

South Africa 54.2 29.0 55.4 54.2 47.4 52.3 62.9 51.5 43.0 54.4 70.0 55.0 50.0 71.3 99.5 44.2

Georgia 54.0 74.1 60.2 70.2 44.3 64.9 54.3 57.3 56.0 95.0 55.0 30.0 20.0 72.0 0.3 80.1

Bulgaria 53.7 63.8 55.8 63.2 50.5 68.8 58.7 49.2 43.0 72.2 75.0 55.0 30.0 19.6 49.8 74.2

Philippines 53.7 99.6 49.7 49.9 23.9 52.6 52.9 42.1 34.0 37.2 90.0 65.0 30.0 79.4 95.9 49.5

Thailand 52.6 75.6 56.7 53.4 31.4 60.8 28.0 50.2 37.0 85.6 30.0 70.0 40.0 70.0 96.2 79.5

Romania 52.5 98.8 46.6 61.7 55.3 70.4 60.3 56.0 48.0 75.0 55.0 35.0 30.0 30.6 45.7 47.5

Brazil 51.7 95.5 46.5 45.9 41.0 65.0 59.4 48.4 37.0 30.6 70.0 60.0 40.0 51.2 80.1 11.7

Jamaica 51.7 83.0 58.2 53.3 54.9 59.8 63.7 45.0 44.0 61.1 70.0 30.0 10.0 61.0 75.1 70.2

India 51.4 85.3 52.0 43.9 30.9 44.1 58.3 48.6 40.0 44.4 80.0 50.0 50.0 63.4 62.0 25.3

ENVIRONMENT SOCIAL GOVERNANCE

LEGAL ECONOMIC

23


ESG Country Rankings (Continued)

Source: Neuberger Berman. As of April 23, 2018.

Year

2018 POLITICS

ESG SCORE Energy Intens i ty Government

Effectiveness

Regulatory

Qual i ty

Pol i tica l Stabi l i ty

& Securi ty

Human

Development

Voice and

Accountabi l i ty

Rule of Law Corruption Ease of Doing

Bus iness

Pol i tics &

Election

Calendar

Funding

Sources

Banking Sector Risk

Assessment

Banking Sector Asset

Qual i ty

Market

Capita l i zation

Trade

Openness

Weights 100.0% 5.0% 10.0% 10.0% 7.5% 5.0% 5.0% 10.0% 10.0% 2.5% 7.5% 10.0% 7.5% 5.0% 2.5% 2.5%

Jordan 50.8 91.1 52.7 51.0 39.3 64.0 34.9 56.3 48.0 42.8 70.0 30.0 20.0 59.5 83.7 66.5

El Salvador 50.7 98.4 44.4 51.9 48.8 52.3 55.6 35.9 33.0 59.4 90.0 50.0 0.0 70.9 71.2 66.3

Serbia 50.3 68.8 51.8 51.1 50.9 67.3 54.3 47.7 41.0 76.1 75.0 55.0 20.0 12.2 29.5 78.2

Morocco 49.8 99.2 48.0 45.3 44.3 46.9 37.1 47.1 40.0 61.7 70.0 50.0 30.0 39.9 83.1 45.3

Sri Lanka 49.3 100.0 45.8 48.0 51.3 65.2 47.8 49.9 38.0 38.3 70.0 30.0 20.0 74.4 47.1 41.9

Armenia 48.8 79.1 47.0 55.0 38.0 61.9 37.7 47.9 35.0 73.9 80.0 35.0 40.3 44.0 7.6 71.1

Vietnam 48.5 75.7 50.2 40.9 53.4 52.2 21.9 51.0 35.0 62.2 70.0 55.0 10.0 39.1 79.4 90.9

Paraguay 48.2 96.6 34.6 44.0 54.0 54.2 49.2 36.6 29.0 40.0 80.0 55.0 20.0 76.4 9.3 66.6

Kazakhstan 47.4 40.2 48.8 48.0 50.9 69.7 24.2 41.7 31.0 80.0 65.0 65.0 20.0 44.0 59.4 54.5

Ghana 47.2 98.0 46.0 45.3 46.8 39.9 62.8 49.9 40.0 33.3 75.0 25.0 40.3 11.7 55.0 63.5

Suriname 46.8 98.7 43.2 37.5 55.5 59.2 59.2 47.7 41.0 8.3 70.0 30.0 40.3 35.7 0.0 61.9

Turkey 46.7 99.7 51.0 53.9 10.0 65.9 24.0 40.0 35.0 66.7 35.0 55.0 40.0 65.8 54.9 42.9

Mongolia 46.6 54.8 47.8 48.5 66.4 60.9 59.0 45.5 36.0 65.6 70.0 40.0 0.0 38.0 13.4 77.6

Dominican Republic 46.3 100.0 45.0 48.7 55.8 59.3 53.7 44.2 29.0 45.0 60.0 45.0 0.0 68.3 1.9 48.2

Senegal 46.0 82.5 40.7 47.1 44.7 23.7 57.5 46.3 45.0 22.2 70.0 50.0 40.3 11.7 43.0 44.2

Bolivia 45.6 81.1 38.6 31.5 45.9 51.7 50.2 25.9 33.0 15.6 90.0 55.0 20.0 84.8 27.8 40.7

Guatemala 45.0 86.6 37.9 46.0 39.3 46.7 43.8 29.2 28.0 46.1 50.0 55.0 30.0 104.5 2.9 43.7

Azerbaijan 44.9 97.3 46.9 44.4 32.6 64.4 17.9 38.7 31.0 68.3 80.0 65.0 10.0 11.9 5.8 66.5

Belize 44.8 98.4 36.5 39.8 51.1 59.3 63.4 32.8 29.0 32.8 70.0 45.0 40.3 15.6 0.0 71.0

Tunisia 44.0 97.8 45.8 40.6 30.2 60.2 56.6 50.5 42.0 51.1 60.0 30.0 10.0 14.9 45.1 67.5

Ecuador 43.2 98.7 41.4 29.6 48.0 61.7 45.1 36.1 32.0 34.4 60.0 55.0 0.0 65.8 16.3 35.4

Russia 41.3 35.8 45.7 41.7 32.1 71.1 25.8 34.0 29.0 80.6 45.0 60.0 20.0 31.3 76.6 35.6

Lebanon 41.2 95.5 39.4 43.1 18.9 67.0 39.5 32.8 28.0 26.1 35.0 55.0 10.0 55.4 48.9 73.6

Zambia 39.7 44.0 36.8 40.3 53.7 40.8 44.0 44.0 37.0 52.8 50.0 15.0 40.3 23.9 50.0 56.6

Kenya 38.9 41.0 43.7 44.0 23.5 35.5 47.1 39.4 28.0 55.6 70.0 40.0 10.0 40.1 62.1 21.7

Tanzania 38.9 33.6 39.0 41.3 41.8 31.6 46.4 42.2 36.0 23.9 70.0 30.0 40.3 30.7 12.8 25.1

Uganda 38.9 13.3 38.6 45.7 35.5 26.1 35.8 45.1 26.0 32.2 60.0 45.0 40.3 36.1 59.1 32.3

Egypt 38.9 98.6 36.8 31.5 21.6 55.7 25.5 41.8 32.0 28.9 70.0 35.0 0.0 51.2 43.3 36.2

Gabon 38.8 54.6 34.2 34.0 48.6 54.8 30.7 38.3 32.0 7.2 60.0 30.0 40.3 38.4 8.3 59.7

Cote D'Ivoire 37.8 34.5 36.6 42.7 32.0 23.2 44.3 36.6 36.0 22.8 60.0 30.0 40.3 31.9 58.2 40.6

Belarus 37.7 54.0 39.8 31.2 52.4 71.2 22.2 34.4 44.0 78.9 45.0 30.0 0.0 18.4 6.1 81.8

Honduras 37.2 67.5 35.3 39.7 42.7 43.7 41.4 27.8 29.0 36.1 40.0 30.0 20.0 61.8 18.0 49.1

Pakistan 35.2 92.0 37.3 37.2 0.7 34.1 36.2 33.4 32.0 18.3 50.0 50.0 20.0 28.8 19.7 15.3

Angola 34.0 97.9 29.2 30.0 42.3 33.1 26.7 28.4 19.0 2.8 40.0 40.0 40.3 15.2 0.0 57.1

Ethiopia 33.7 11.1 37.2 28.0 18.6 20.3 21.1 42.1 35.0 10.6 65.0 30.0 40.3 75.5 0.0 20.8

Nigeria 33.2 74.2 28.3 31.6 12.9 30.6 44.1 28.9 27.0 19.4 65.0 55.0 0.0 15.6 45.9 17.8

Tajikistan 31.7 76.3 29.6 28.1 34.2 46.4 16.6 26.4 21.0 31.7 50.0 25.0 40.3 8.4 0.0 47.7

Ukraine 31.1 14.9 38.3 41.4 12.2 63.9 50.5 34.7 30.0 57.8 35.0 20.0 0.0 8.4 37.6 74.1

Mozambique 28.8 9.0 32.9 35.9 29.0 16.6 42.1 29.6 25.0 23.3 40.0 10.0 40.3 24.5 21.6 62.1

Iraq 28.7 95.7 24.7 27.5 4.4 50.6 29.8 16.0 18.0 6.7 30.0 30.0 40.3 12.5 11.1 64.9

Venezuela 20.3 77.2 0.0 0.0 0.0 50.0 0.0 0.0 0.0 0.0 40.0 55.0 0.0 89.9 2.8 34.4

ENVIRONMENT SOCIAL GOVERNANCE

LEGAL ECONOMIC

24


Example: Brazil vs. Turkey Credit: Macroeconomic Assessment

Leverage and cyclical factors determine macroeconomic performance

1

23 4

Ad hoc update from Kaan Nazli

MACROECONOMIC SCORE ASSESSMENTS (2002-2018)

2017 SCORES IN INDIVIDUAL CATEGORY

_______________________Source: Neuberger Berman. For illustrative purposes only.As of 2018.

• The adjustment in the current account and return to growth have pushed Brazil's macroeconomic

scores back to over those of Turkey

• Brazil’s strong reserve position and relatively low external debt ratios make the country better

positioned to cope with the normalization of Fed policy

• Current account has improved in Turkey thanks to oil prices; however still lags due to strong

import compression in Brazil

• Brazil still underperforms Turkey in GDP growth, fiscal balances and public debt ratios

• Central Bank of Brazil has made headway in fighting inflation while Central Bank of Turkey faces

increased political pressure to keep rates low

0

10

20

30

40

50

60

70

200220032004 2005 2006 20072008 2009 2010 20112012 2013 2014 20152016 2017 2018

Brazil Turkey

0

50

100

Real GDPgrowth

CPI Inflation

Fiscal Balance:% GDP

Current AccountBalance: %

GDP

External Debt:% GDP

Reserves -Import Coverage

Short-term Debt:% Reserves

Public Debt: %Revenues

Brazil Turkey

25


1

23 4

Example: Brazil vs. Turkey Credit: ESG Assessment

Source: Neuberger Berman, EMD Country Credit Model scores. Scores are from 0 (weak) -100 (strong) for each category. Latest ESG assessments, as of April 23,

2018. Upper chart: Selected ESG indicators. Lower chart: Total 2018 ESG score.

For Illustration Purposes Only.

• Turkey lags Brazil in ESG metrics

as political stability and security

have worsened in recent years, as

demonstrated by the July 2016

coup attempt.

• The state of emergency introduced

after the coup attempt is likely to

stay until the 2019 elections, which

combined with the new powers for

the chief executive approved at a

controversial referendum in 2017,

raises further concerns over

independence of the judiciary and

media freedom.

• Brazil’s anti-corruption agenda is a

relative credit strength to Turkey

even as the political crisis

stemming from the carwash (“lavo

jato”) scandal has been

destabilizing and continues to block

the economic agenda.

• ESG metrics give Turkey an edge

on human development, regulatory

quality and government

effectiveness, while its large

current account deficit forced an

improvement in energy intensity in

Turkey.

0 10 20 30 40 50 60 70 80 90 100

Energy Intensity

Government Effectiveness

Regulatory Quality

Political Stability & Security

Human Development

Voice and Accountability

Rule of Law

Corruption

Ease of Doing Business

Turkey Brazil

0

10

20

30

40

50

60

70

80

Chi

le

Sou

th K

orea

Pol

and

Hun

gary

Arg

entin

a

Mex

ico

Col

ombi

a

Indo

nesi

a

Sou

th A

fric

a

Phi

lippi

nes

Tha

iland

Bra

zil

Indi

a

Tur

key

Rus

sia

Leba

non

Egy

pt

Nig

eria

Ukr

aine

Ven

ezue

la

26

For Professional Client Use OnlyAdhoc Update from Kaan Nazli

EMBI

LAT

AR

BZ

BM

BO

BR

CLCO

CR DO

EC

SV

GT

HNJM

MXPA

PY

PE

SR

TT

UY

VE

EUR

AM

AZBY

BGHR

CZ

GE

HU KZ

LV LTPLRO

RUCS

SKSI

TR

UA

AFR

AO

CM

CI

EG

ETGA

GH

KE

MA

MZ

NA

NGRW

SN

ZA TZ

TN

ZM

MID BH

IQ

IL

JO

KW

LBOM

QA

SA

AE

ASIA

CNIN

ID

MY

MNPK

PH

KR

LK

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

15253545556575

Co

un

try

Sp

read

Neuberger Berman Credit Score


1

23 4


_______________________Source: Neuberger Berman. As of April 12, 2017. For illustrative purposes only.

above the line indicating

bonds are cheap

below the line indicating

bonds are expensive

1,500

2,000

2,500

3,000

27



1

23 4

Instrument Analysis

Identifying the most

attractive instruments

in each country

Yield curve analysis: Identify most attractive issues on each issuer curve

Liquidity analysis: Assess liquidity using in-house Liquidity Model

Specific situations: Structured notes, recovery values in default situations, GDP Warrants

Spread development trackers - Relative value analysis using monitoring tools:

_______________________Source: JPMorgan, as of September 9, 2015. This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice.

• Risk premium on Hungarian EUR vs USD bonds has varied

substantially over the cycle, with EUR bonds becoming less

attractive recently as ECB QE led to massive demand for EUR

denominated fixed income

HUNGARY EUR BOND VS USD BOND

• Substantial spread widening YTD between ’21 and ’19 bonds in

the recent Brazil sell-off as shorter duration paper more often held

by buy and hold investors, leading to relative value opportunities

BRAZIL: 2021 VS 2019 BOND

28


Liquidity Management

1

23 4

Portfolio Liquidity Management

• Each bond is assigned an Issue Liquidity Rating - based on 10 factors

• The Ratings lead to:

– A measure of Total Portfolio Liquidity relative to Benchmark

– An overview of exposure concentration per liquidity bucket

WHAT WE CAPTURE HOW WE MEASURE WEIGHT

Characteristics • Potential trade sizes and investor familiarity with the issue

• Potential trade sizes and investor familiarity with the issuer

• Familiarity and natural demand from benchmark investors

• Issue size outstanding

• Issuer size

• Benchmark inclusion45%

Market Data

• Risk level of the security

• Cost of trading

• Breadth of active buy-side parties

• Breadth of active sell-side parties

• Trading volumes

• Spread over US Treasuries

• Bid-offer spread

• Number of reporting holders of the security

• Number of price-quoting sell-side parties

• Trading volume indication from MarketAxess

55%

100%

PENALTY FACTORS

Ownership Concentration• Concentration risk in major holder

• Neuberger Berman holding

• Percentage of the issue with largest reporting holder

• Percentage of the issue with Neuberger Berman-40%

_______________________For illustrative purposes only. This material is intended as a broad overview of the portfolio management team’s current style, philosophy and process. Subject to change. See Additional Disclosures.

29


Corporates: Bottom up Analysis

In-house Corporate Analysis Process results in Investment Case for every credit in the portfolio

1

23 4

Relative Value

Analysis

Investment Case

• FCF Analysis

• Debt metrics

• Covenants

• Management quality

Analyst recommendation from 1

(positive) to 4 (negative)

• Stress Liquidity Test

• Probability of Default Model

• Exclusion Criteria

• ESG Score per issuer

• Relative Value vs. Peers

• Relative Value along issuer Curve

NB Risk

Rating

ESG

Analysis

Fundamental

Analysis

Stress

Testing


30


Corporates: Investment Case

Updates from Nish Popat (ad hoc)

Stress

Liquidity Test

NB Risk Rating

Bottom-up credit

analysis and view

Outstanding Notes

& Relative Value

Environmental, Social

and Governance

Final Analyst

Recommendations

_______________________The above sample report is intended to demonstrate the portfolio management team’s research capabilities and is not intended to recommend any particular investment.

1

23 4

31


1

23 4

Sovereign Investment Case Sample

Emerging Markets Debt

Hard Currency

Analyst Name

10-Jul-14

RATING OUTLOOKIssuer Ticker (Ticker) EMBIGD % Spread 544 S&P B NEGCountry (Country) EMBIGD SprDurW Spread Diff 264 MOODY'S B2 NEGNB Country Score 36.2 EMD_HC SprDurW Target Diff FITCH B NEG

Issuance ($ million) M/M Debt Repayments (Local and External) M/M (External)

Gross Issuance Forecast 1500 Jan Jan 0

2014 Cash Flow 124 Feb Feb 39

Net Issuance -1376 Mar Mar 0

Actual Issuance 0 Apr Apr 23

Remaining Gross Issuance 1500 May May 0

% of Gross Done 0 Jun Jun 0

% of Gross Remaining 100 Jul Jul 0

Aug 1500 Aug 39

Sep Sep 0

Oct Oct 23

Nov Nov 0

Dec Dec 0

Market Positioning

Signif Overwt % 1 Size Weighted Score -2.7 Size Weighted Score Dedicated Respondents -3 Survey Date:

Overwt % 11 Size Weighted Score Ch 0.1 Assets $bn Dedicated Respondents 474 19-Jun-14

Neutral % 42 No of Respondents 73 Size Weighted Score Crossover Respondents -5.1

Underwt % 36 Assets $bn 549 Assets $bn Crossover Respondents 33

Signif Underwt % 10 Size Weighted Score Leveraged Respondents 1.5

Assets $bn Leveraged Respondents 39

CCM Data & Scores

Data 2011 2012 2013 2014 2015 15.0 7.9 5.4 4.8 5.4

39 40 46 40 39

24.3 24.9 25.6 26.2 26.9

8.6 8.8 13.6 11.8 10.8

-4.2 -12.0 -10.9 -10.0 -8.4

1,594 1,622 1,782 1,539 1,434

-9.0 -11.8 -12.6 -7.6 -8.2

29.2 30.8 25.5 35.2 43.6

3.0 2.5 2.9 2.8 3.2

54.0 51.1 50.6 74.6 73.6

43.4 51.4 52.8 59.3 62.0

220.2 265.3 313.7 302.8 315.5

14.1 13.2 12.0 12.0 12.0

8.0 8.6 8.6 8.6 8.6

39.4 31.6 29.1 27.9 28.5

49.0 51.2 47.8 48.3 48.2

43.3 39.5 36.5 36.1 36.3

Key Developments

Budget Balance (% GDP)

0.5%0.020.00

(Country)

(Country)'s macro outlook is subject to significant risks. Growth has slowed visibly in 2013-4 as high interest rates and weaker (currency) are compressing domestic demand. The economy's twin

deficits and high financing needs leave it vulnerable to a deterioration in external conditions.

Real GDP Growth (%)

Nominal GDP (US$ bn)

Population (million)

CPI Inflation (year-end)

GDP per Capita (US$)

Current Account (% GDP)

External Debt (% GDP)

Reserves - Import Coverage

Short-term Debt (% Reserves)

Public Debt (% GDP)

Public Debt (% Revenues)

Non-performing loans (% Total)

Market Capitalization (% GDP)

MACROECONOMIC SCORE

ESG SCORE

COUNTRY SCORE

- Public debt is estimated to have reached 55.4% GDP at Mar-14. Debt interest payments were 27% above target in 5m14. The deterioration will continue unless more expensive domestic debt (c. 47% of total debt) is retired. The 9% 2013 budget target was overrun as will the 8.5% target for 2014. The government moved with steady tariff increases in late 2013 but reversed them in 2Q14. - The trade deficit has narrowed sharply in 5m14 to $157mn with (currency) weakness reducing imports (-17.8%) but exports were also down due to weaker gold prices/volumes and crude volumes. It is unclear whether this can be sustained: oil import demand (-11%) will recover with FX availability through Cocobod/Eurobond issuance.) Non-oil imports fell by 19.7% but with private sector credit growth at 47.2%, signs of an import demand collapse are weak. FX reserves have declined to $4.5bn or 2.5 months of import cover in Jun-14. This figure likely masks the short-term commitments of the Bank of (country) as flagged in the IMF Article 4 report, actual usable FX reserves are likely to be even lower than this. - Electricity challenges, uncertainty around gold prices and production, plateauing oil production, and high borrowing costs has led to weaker GDP growth, with risks to the downside:*The (company) Gas processing plant for electricity production (550MW) is now expected to come on stream only towards end-14 while the Bui hydropower dam that opened in 2013 has suffered delays, currently generating 90MW vs targeted 400MW. Recent investments by the (company) will raise output from the (company) thermal plant to 330 MW by 2015. * News that (company) plans to lay off thousands of worker at its (company) gold mine in (country) and cease underground production for up to 24 months have dented the gold production outlook. * Oil production is likely to stabilize around the current 100,000bpd, with the planned increase to 250,000bpd not taking place until possibly 2022, according to a recent World Bank study. The West Africa Gas Pipeline is still operating at about half capacity.

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Bonds 3700.9 1462 555.61 1186.5 194.9 0 60.568 0 0 1022.5

Loans 0 0 149.92 0 0 6.8963 0 0 611.98 0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

US$

MM

Debt maturities

-14

-12

-10

-8

-6

-4

-2

0

0

50

100

150

200

250

300

350

2011 2012 2013 2014 2015

Key Ratios

Short-term Debt (% Reserves) Public Debt (% Revenues)

Current Account/GDP (right-axis)

NB Country Score

_______________________The above sample report is intended to demonstrate the portfolio management team’s research capabilities and is not intended to recommend any particular investment.

32


Hard Currency Strategy Setting and Portfolio Construction

Position for fundamental value in country exposure with additional alpha derived from views in top

down market direction, corporate credit and instrument selection

1

23 4

Top down

analysis

PM views on

HCS, HCC, LB

Relative value

analysis


Instrument Analysis

Top down Score

Corporate Credit Analysis

Investment Insights

Aim to position for value across alpha sources

by considering:

Portfolio

Construction

Tracking Error Analysis

Risk budgeting of country exposures

Overall portfolio interest and spread duration

Percentage exposure considerations

MODEL

PORTFOLIO

Specific Corporate exposure guidelines

Portfolio Liquidity Control


33


Translating Top-down and Bottom-up views to Portfolio Risk

Portfolio managers are responsible for translating the Top-down Score and Bottom-up country

views into portfolio risk-adjusted positioning

1

23 4

Broad Range

Top Down Score -1.0 to +1.0

Beta range 0.8 to 1.4

Overall spread duration (yrs, relative) -1.5 to +1.5

Corporates allocation 0 – 15%

Cash allocation 0 – 15%

Country View Standalone Risk1

High conviction > 0.3%

Medium conviction 0.15% – 0.3%

Low conviction < 0.15%

_______________________1. Standalone Risk is a measure that isolates the risk from a particular risk factor by combining the exposure and the volatility of that factor, e.g. 2% Brazil bonds o/w with volatility of 13% gives Standalone Risk of 0.26%. This measure is relatively light on assumptions – while the historical volatility of the position is used in the calculation, the historical correlation with the rest of the portfolio is not used. As a result this measure illustrates the tracking error contribution of a country position in case a risk event occurs where all correlations between countries go to one.

TOP-DOWN BOTTOM-UP

The top down score on hard currency spreads drives the overall

systematic risk of the portfolio versus benchmarkIndividual country position sizing is dependent on conviction levels

and the Standalone Risk contribution of the position.

34


Hard Currency: Risk Report

Data from PAR Team (Konstantinos Lamas)

Change the Bps columns in the excel to Zero decimal place before pasting in

Kazakhstan is always missing the ‘h’ in the PAR report – needs to be manually added

1

23 4

_______________________Source: BlackRock Aladdin. Please note: different treatment of defaulted bonds in portfolio characteristic calculations causes discrepancies between the index provider and our 3rd party portfolio analytics system. Performance is not impacted by these differences, however performance attribution will show discrepancies due to the treatment of the defaulted bonds.

TOP 10 COUNTRY CONTRIBUTORS TO ACTIVE RISK

BOTTOM 10 COUNTRY CONTRIBUTORS TO ACTIVE RISK

35


Net Market Weight (%

MV)

Spread Duration

(OASD) Active

Stand-alone Risk (bps

per year)Risk Concentration Factor

Total Tracking Error (bps

per year)

Contribution to Active

Risk %

Argentina 2.51 0.26 99 0.85 84 40.84

Turkey 2.37 0.15 37 0.69 25 12.33

Ivory Coast 2.85 0.18 34 0.70 24 11.64

Venezuela 0.47 0.05 42 0.39 16 7.96

Croatia 1.62 0.18 28 0.55 15 7.54

Ghana 1.40 0.11 18 0.67 12 5.78

Mexico 0.33 0.25 27 0.42 12 5.65

Egypt -0.41 0.04 15 0.72 11 5.15

Costa Rica 0.38 0.08 16 0.62 10 4.72

Oman -0.21 0.07 16 0.54 9 4.33

Net Market Weight (%

MV)

Spread Duration

(OASD) Active

Stand-alone Risk (bps

per year)Risk Concentration Factor

Total Tracking Error (bps

per year)

Contribution to Active

Risk %

Lebanon -1.93 -0.08 23 -0.38 -9 -4.19

Ecuador -1.53 -0.06 16 -0.54 -8 -4.11

Pakistan -1.14 -0.05 7 -0.54 -4 -1.94

Iraq -0.68 -0.03 6 -0.64 -4 -1.80

Uruguay -2.12 -0.23 13 -0.23 -3 -1.46

Dominican Republic -1.70 -0.10 8 -0.37 -3 -1.43

Senegal -0.38 -0.04 6 -0.52 -3 -1.41

Gabon -0.40 -0.02 4 -0.67 -3 -1.30

El Salvador -0.74 -0.05 7 -0.39 -3 -1.26

Zambia -0.18 -0.01 4 -0.55 -2 -0.95

Total 205 205


Portfolio Turnover

CALENDAR YEAR TURNOVER % (ONE WAY)

2013 (from 1 June) 62%

2014 62%

2015 92%

2016 78%

2017 46%

_______________________Source: Neuberger Berman, as of December 31, 2017. Based on the representative account for the NB EMD Hard Currency Strategy.

Medium-term focused fundamental investment style results in moderate portfolio turnover

36


Sell Discipline - Examples

-0.06

-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0

100

200

300

400

500

600

May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17

Spread (bps): Ecuador vs index (LHS) Ecuador Active Spread Duration Position

Example #1 - Ecuador

- Overweight going into 2016 on very attractive spreads vs. comparable

oil names, some progress on policies to adjust to lower oil prices

regime

- Oct 2016: reduced OW as part of portfolio risk reduction

- Dec 2016: reduced OW on tighter spreads, upcoming elections to

drive pickup in volatility

- Mar 2017: from OW to Neutral, as spreads fully recovered from oil

sell-off, tight election race, mounting fundamental challenges

- May 2017: from Neutral to UW; on increasing financing requirements,

political risks, oil price pressure

Example #2 - Angola

- Jul 2016: increased OW as spreads more than compensate for risks

related to oil prices and financing challenges; Even at current oil

prices, Angola’s private and public sector remain external net creditor

- Oct 2016: OW to Neutral as leverage is building, posing risks to net

creditor status

- Nov 2016: Neutral to UW: Fiscal balances and reserve positions

deteriorating, public sector increasingly leveraged. No sizeable policy

adjustment expected ahead of Aug 2017 elections

-0.03

-0.02

-0.01

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0

100

200

300

400

500

600

May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17

Spread (bps): Angola vs index (LHS) Angola Active Spread Duration Position

37


Hard Currency: Portfolio1

23 4

Updated monthly via: Balckrock Aladdin Prism Report – Camille Florentin.

QUALITY BREAKDOWN (MV%)

KEY CHARACTERISTICS

_______________________Source: BlackRock Aladdin. Benchmark: JP Morgan EMBI GD Index. Please note: different treatment of defaulted bonds in portfolio characteristic calculations causes discrepancies between the index provider and our 3rd party portfolio analytics system. Performance is not impacted by these differences, however performance attribution will show discrepancies due to the treatment of the defaulted bonds.

ASSET ALLOCATION BREAKDOWN (MV%)

COUNTRY BREAKDOWN (MV%)

38


Portfolio Benchmark Active

Effective Duration (Yrs) 6.81 6.82 -0.01

Maturity (Yrs) 13.77 11.17 2.60

Current Yield (%) 6.12 6.12 0.01

Yield to Maturity (%) 6.82 5.71 1.11

Spread (Bps) 376 266 111

Spread Duration (Yrs) 7.12 6.78 0.34

Moody Rating Ba2 Ba1

S&P Rating BB BB

Number of Holdings 276 666 -390

Portfolio Benchmark

Sovereign 63.36 78.80

Quasi Sovereign 19.13 21.20

Sub Sovereign 0.22

Supranational 0.20

Corporates 9.53

Other (incl. Cash) 7.55

0% 20% 40% 60%

High Yield

Investment Grade

Portfolio Benchmark

01234567

Tur

key

Mex

ico

Arg

entin

a

Bra

zil

Chi

na

Aze

rbai

jan

Ivor

y C

oast

Sri

Lank

a

Cro

atia

Indo

nesi

a

Sou

th A

fric

a

Ser

bia

Ukr

aine

Kaz

akhs

tan

Rus

sia

Om

an

Gha

na

Egy

pt

Nig

eria

Mon

golia

Per

u

Col

ombi

a

Ber

mud

a

Pan

ama

Ven

ezue

la

Hun

gary

Cos

ta R

ica

Ecu

ador

Sau

di A

rabi

a

Qat

ar

Dom

. Rep

ublic

UA

E

Rom

ania

Chi

le

Ang

ola

Mal

aysi

a

Tun

isia

Sou

th K

orea

Par

agua

y

Ken

ya

Jam

aica

El S

alva

dor

Uru

guay

Leba

non

Bel

arus

Zam

bia

Indi

a

Sup

rana

tiona

l

Mon

tene

gro

Isra

el

Jord

an

Hon

dura

s

Pap

ua N

ew G

uine

a

Sen

egal

Bel

ize

Arm

enia

Gua

tem

ala

Portfolio Benchmark


Country Weightings & Exposures

1

23 4

_________________________Source: Blackrock Aladdin. This supplemental report is provided for informational purposes only; please refer to your account statement(s) or other statement provided by your custodian for the official records of your account(s). Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results. See Additional Disclosures at the end of this presentation. Please note: different treatment of defaulted bonds in portfolio characteristic calculations causes discrepancies between the index provider and our 3rd party portfolio analytics system. Performance is not impacted by these differences, however performance attribution will show discrepancies due to the treatment of the defaulted bonds.

39


Market Value (%)

Country Portfolio Benchmark Variance

Top 10

Ivory Coast 3.67 0.82 2.85

Azerbaijan 3.74 1.17 2.56

Argentina 5.45 2.93 2.51

Serbia 3.17 0.70 2.47

Turkey 5.82 3.45 2.37

Bermuda 1.63 0.00 1.63

Croatia 3.24 1.63 1.62

Ghana 2.18 0.78 1.40

Sri Lanka 3.36 2.01 1.35

Mongolia 1.99 0.67 1.31

Bottom 10

Philippines 0.00 3.26 -3.26

Uruguay 0.38 2.50 -2.12

Poland 0.00 2.08 -2.08

Chile 0.80 2.77 -1.96

Lebanon 0.35 2.28 -1.93

Malaysia 0.75 2.59 -1.84

Dominican Republic 0.96 2.66 -1.70

Ecuador 1.13 2.66 -1.53

Panama 1.54 2.88 -1.34

Hungary 1.49 2.70 -1.21

Contribution to Duration

Country Portfolio Benchmark Variance

Top 10

Argentina 0.46 0.20 0.26

Mexico 0.71 0.46 0.25

Ivory Coast 0.23 0.05 0.18

Croatia 0.23 0.05 0.18

Turkey 0.39 0.24 0.15

Azerbaijan 0.22 0.08 0.15

Qatar 0.11 0.00 0.11

Ghana 0.16 0.05 0.11

Sri Lanka 0.20 0.10 0.10

Bermuda 0.09 0.00 0.09

Bottom 10

Philippines 0.00 0.29 -0.29

Uruguay 0.06 0.29 -0.23

Chile 0.07 0.25 -0.18

Malaysia 0.03 0.16 -0.14

Panama 0.14 0.25 -0.11

Peru 0.18 0.29 -0.11

Dominican Republic 0.10 0.20 -0.10

Poland 0.00 0.08 -0.08

Lebanon 0.02 0.11 -0.08

Ecuador 0.06 0.12 -0.06


Main Country Exposure Changes – Last 3 Months

1

23 4

ACTIVE DURATION CONTRIBUTION (YRS)ACTIVE MARKET VALUE (%)

_________________________Source: Blackrock Aladdin. This supplemental report is provided for informational purposes only; please refer to your account statement(s) or other statement provided by your custodian for the official records of your account(s). Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results. See Additional Disclosures at the end of this presentation. Please note: different treatment of defaulted bonds in portfolio characteristic calculations causes discrepancies between the index provider and our 3rd party portfolio analytics system. Performance is not impacted by these differences, however performance attribution will show discrepancies due to the treatment of the defaulted bonds.

40


-0.07

-0.05

-0.04

-0.04

-0.03

-0.03

-0.03

-0.02

-0.02

-0.02

0.01

0.01

0.01

0.01

0.02

0.04

0.04

0.04

0.04

0.05

-0.20 -0.15 -0.10 -0.05 0.00 0.05 0.10 0.15 0.20

Indonesia

Colombia

Paraguay

Romania

Costa Rica

Mexico

Jordan

Croatia

Kenya

El Salvador

Qatar

Hong Kong

Bermuda

Ecuador

Panama

Brazil

South Africa

Saudi Arabia

Dominican Republic

Ukraine

-0.53

-0.45

-0.41

-0.37

-0.33

-0.32

-0.32

-0.29

-0.29

-0.23

0.14

0.14

0.17

0.19

0.34

0.40

0.60

0.60

0.72

1.04

-2.00 -1.50 -1.00 -0.50 0.00 0.50 1.00 1.50 2.00

Indonesia

Jordan

Colombia

Mexico

Angola

Kenya

Paraguay

Romania

Croatia

El Salvador

Bermuda

Cote D'Ivoire

Turkey

Trinidad and Tobago

Russian Federation

Dominican Republic

Brazil

Saudi Arabia

South Africa

Ukraine


Hard Currency: 2018 Attribution YTD

1

23 4

Attribution report from PAR – YTD tab

Change all Bps values in PAR report (last 3 columns) to 0 decimal place before pasting into the ppt

FACTOR CONTRIBUTION (bps)

_______________________Source: Blackrock Aladdin. Past performance is not indicative of future returns. Figures are quoted in US Dollars and are gross of fees. Benchmark: JP Morgan EMBI GD Index

TOP 10 COUNTRY ACTIVE CONTRIBUTIONS BOTTOM 10 COUNTRY ACTIVE CONTRIBUTIONS

41


Yield Curve 6

Spread Duration Exposure Effect -29

Country Allocation -44

Security Selection 40

Residuals (pricing, trading effect, fees) -5

Total -32

Average Weight

(% MV)

Spread

Duration

Contribution Outperformance (bps)

Country Port B/M Active

Country

Allocation

Effect

Instrument

Selection

Effect

Total

Effect

Lebanon 0.4 2.5 -0.09 14 0 14

Azerbaijan 3.7 1.2 0.15 11 2 13

Mexico 5.6 5.2 0.24 4 4 8

Qatar 0.7 0.0 0.07 8 0 8

Oman 2.4 2.6 0.07 5 2 8

Croatia 3.8 1.6 0.21 7 0 7

Zambia 0.4 0.5 0.00 4 2 7

Brazil 3.7 3.2 -0.01 1 5 6

Ecuador 0.9 2.6 -0.08 6 0 6

UAE 1.0 0.0 0.10 4 0 4

Average

Weight (% MV)

Spread

Duration

Contribution Outperformance (bps)

Country Port B/M Active

Country

Allocation

Effect

Instrument

Selection

Effect

Total

Effect

Argentina 5.8 3.2 0.27 -51 15 -36

China 3.8 4.4 -0.04 -1 -9 -10

Russia 2.4 3.6 -0.02 -1 -9 -9

Costa Rica 1.6 1.1 0.10 -5 -2 -7

Philippines 0.0 3.3 -0.28 -7 0 -7

Uruguay 0.5 2.3 -0.18 -5 0 -5

Venezuela 1.5 1.1 0.04 -30 25 -5

Peru 2.1 2.9 -0.10 -3 -1 -5

Turkey 5.4 3.6 0.11 -5 1 -4

Bahrain 0.5 0.0 0.04 -3 0 -3

WHY INVEST IN EMERGING MARKETS DEBT


Four Main Sub-Asset Classes

Credit risk dominant

Benefit from carry

Benefit from improving credit risk trends of both government and

corporate issuers (decline in spreads)

HC Sovereign HC Corporate

EMD HARD CURRENCY

FX and interest rate risk dominant

Benefit from carry

Benefit from appreciating currencies

Benefit from declining local interest rates

EM FX (Currency) LC Bonds

EMD LOCAL CURRENCY

Information is on this page represents historical observations about the sub-asset classes and is not intended to represent or predict future events.

43


_______________________1. Source: BIS and Bank of America Merrill Lynch, as of December 31, 2017. Information is on this page represents historical observations and is not intended to represent or predict future events.

We believe investors are underexposed to the asset class

SIZABLE

Growing asset class. Total EMD market now

nearly $25 trillion1. Acceleration of new issues

from countries and corporations

INEFFICIENT

Under-researched/reported universe creates

additional alpha potential. Capital constraints

and strong home bias create alpha

opportunities

DIVERSIFICATION

Dozens of countries, currencies, yield curves,

industry sectors, and issuers across all credit

rating buckets

FUNDAMENTALS

We believe most sovereigns are well

equipped to withstand cyclical headwinds

relying on sound balance sheets, flexible

currency regimes, better managed fiscal

accounts and expanded funding sources

YIELD

Yield advantage potential over developed

markets bonds

FX APPRECIATION

Emerging markets foreign exchange (FX)

holds potential opportunities for revaluation

Rationale for Investing in Emerging Markets Debt

44


Emerging Economies – A Major Share of the World1

Understanding The Emerging Markets Landscape

Emerging Economies as % of Total World

Comparison with developed credit markets (market cap in USD trillions)

Emerging Markets Debt – A Limited Share and Underrepresented in/the Global Bond Market2

19.4%

22.4%

36.1%

53.0%

62.2%

73.0%

83.8%

80.6%

77.6%

63.9%

47.0%

37.8%

27.0%

16.2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Debt Market Cap

Equity Market Cap (Float Adjusted)

GDP at Market Rates

GDP at PPP

Foreign Exchange Reserves

Land Mass

Population

Emerging Markets Developed Markets

45

_______________________1. Source: World Bank (Population, Land Mass, GDP at PPP , GDP at Market Rates, EME Market Cap as of 2015), IMF (FX reserves as of 2014), EMD figure: BAML, BIS, As of December 2017.2. Source: JPMorgan. As of September 30, 2018. Historical trends do not imply, forecast or guarantee future results.

2.2

1.0 0.9

5.65.8

0.60.1

0

1

2

3

4

5

6

7

EM Local Market EM Credit EM External Sovereigns U.S. Mortgage BackedSecurities

U.S. Investment GradeCredit

U.S. High Yield U.S. Agencies


Stronger Real GDP Growth in Emerging Markets

_______________________Source: IMF World Economic Outlook, April 2018. Historical trends do not imply, forecast or predict future results.F=Forecast.

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018F

Differential Advanced economies Emerging market and developing economies

GDP (%)

46


EM Fundamentals Still Strong

Update from Lei Wan

Improved debt sustainability and credit quality

GENERAL GOVERNMENT DEBT AS A PERCENTAGE OF GDP1

As of April 2018

_______________________1. Source: IMF World Economic Outlook (WEO); Neuberger Berman. Historical trends do not imply, forecast or guarantee future results. 2. Source: JP Morgan. F: Neuberger Berman Forecast

0

20

40

60

80

100

120

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

E

2018

F

Advanced economies Emerging market and developing economies

47

PERCENTAGE OF EMBIG MARKET CAPITALIZATION BY RATING SEGMENTS2


Investment

Grade: 50.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-98 Nov-99 Sep-01 Jul-03 May-05 Mar-07 Jan-09 Nov-10 Sep-12 Jul-14 May-16 Mar-18

HY

IG


EMD Tradable Debt Universe and SizeEMD Tradable Debt Universe and Size

Total market nearly 25 trillion USD

EMD Local Currency (LC) represents majority of market share

Growing corporate component in Hard Currency (HC)

Corporate names increasingly issue debt

Growth potential in EMD LC

_______________________Source: BofA Merrill Lynch Global Research, BIS, Bloomberg. As of December 31, 2017.Historical trends do not imply, forecast or guarantee future results.

DOMESTIC DEBT MAKES UP 86% OF TOTAL EMD($ billions)

5%$1,198

9%$2,349

43%$10,557

43%$10,644

Sovereign HC Corporate HC Sovereign LC Corporate LC

48


Update from Lei Wan

EMD: Asset Class Growth Trends

JP Morgan EM fixed income indices have more than tripled since 2008

Average Annual

Growth: 2003-2017

• Since 2003, HC Corporate and LC Debt annual asset class growth rates, proxied by increase in market cap of JPMorgan benchmarks have outpaced

growth in HC Sovereign

• Across asset class: Debt issuance is shifting from HC to LC backed by emerging markets’ transition from debtor to creditor nation status

• Within HC: Debt issuance is shifting towards Corporate from Sovereign as credit quality of sovereign universe improves and companies profit from lower

credit risk premiums

• Within LC: Debt issuance is shifting towards longer duration on enhanced financial intermediation and better institutional infrastructure

49

27%

11%

20%

_______________________Source: JP Morgan. EMD HC Sovereign benchmark – JP Morgan EMBI Global Index; EMD HC Corporate benchmark – JP Morgan CEMBI Broad Index; EMD LC Bond benchmark – JP Morgan GBI-EM Broad Index. As of September 30, 2018. Historical trends do not imply, forecast or guarantee future results.

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

Corporates

Hard Currency

Local Currency


Benchmark Funds Are Biased Towards

Diversified Indices:

Evolution of Dedicated AUM per EMD Sub-Asset Class

JP Morgan – EMD Indices ($ millions) July 2018 2017 2016 2015 2014 2013

Local Market Debt 231,906 228,344 205,735 202,490 216,706 216,827

GBI-EM Global Div 211,131 208,417 185,538 181,183 191,402 196,672

GBI-EM Div 11,917 10,467 9,767 9,167 9,292 8,455

GBI-EM Broad Div 2,218 1,420 2,290 4,000 7,672 3,760

GBI-EM 6,640 8,040 8,140 8,140 8,340 7,940

GBI-EM Global/Broad - - - - - -

External Debt USD 364,197 360,642 317,645 296,912 300,650 292,833

EMBI Global Diversified 305,022 303,127 264,576 243,941 241,733 225,626

EMBI Global 57,870 55,620 52,100 52,300 56,922 66,747

EMBI+ 1,305 1,895 969 671 1,995 460

Corporate External Debt 100,147 93,033 80,675 78,141 73,547 62,752

CEMBI Broad Diversified 67,401 61,409 54,204 52,111 49,309 40,011

CEMBI Diversified 26,078 24,024 20,470 18,902 19,221 16,535

CEMBI Broad 4,147 4,370 3,510 4,537 4,226 5,415

CEMBI 2,521 3,230 2,491 2,591 791 791

Local Currency Money Market

ELMI+ 27,217 26,182 20,371 19,041 22,397 24,847

Total AUM managed against EM indices 723,467 708,201 624,426 596,584 613,300 597,259

_______________________Source: JP Morgan Emerging Markets Research. As of July 31, 2017.The above information is based upon the indices as identified above. Please see the Disclosure Section of this book for a complete description of each index. Actual investment results will vary. It is not possible to invest directly in any index. Past performance is not necessarily indicative of future results. As with any investment, there is the possibility of profit as well as the risk of loss. * Total may not equal 100% owing to rounding.

• 91% of local debt assets benchmarked

against GBI-EM Global Diversified

• 84% of external sovereign assets

benchmarked against EMBI Global

Diversified

• 93% of external corporate assets

benchmarked against CEMBI (Broad)

Diversified

50


Review of EMD Sub-Asset Classes

Lei Wan can provide update

Regional Composition (%)

_______________________ Source: JP Morgan, HSBC. As of August 31, 2018.The above information is based upon the indices as identified above. Please see the Disclosure Section of this book for a complete description of each index. Actual investment results will vary. It is not possible to invest directly in any index. Past performance is not necessarily indicative of future results. As with any investment, there is the possibility of profit as well as the risk of loss.

HC SOVEREIGN HC CORPORATE LOCAL CURRENCY

BenchmarkEmerging Market Bond Index Global Diversified

(EMBI GD)

Corporate EM Bond Index

(CEMBI Diversified)

Government Bond Index

(GBI-EM GD)

Benchmark DescriptionUSD-denominated debt of Sovereign/Quasi-

Sovereign issuers

USD-denominated debt issued by corporate

entities

Liquid, fixed-rate local currency debt of

Sovereign issuers

Currency Denomination USD USD LC

Average RatingBa1/BB+ Baa3/BBB- Baa2/BBB

(Moody’s/S&P)

Benchmark Characteristics

Countries 67 40 19

Yield (%) 6.6 5.9 6.6

Duration (years) 6.8 4.5 5.1

19.6

24.4

36.9

19.1

35.0

12.1

28.3

24.622.9

33.6 34.7

8.8

0

5

10

15

20

25

30

35

40

Asia Europe Latin America Middle East/Africa

Hard Currency Corporates Local Currency

51


Differentiated Returns within the Asset Class

EMD Returns Vary Significantly

2018 YTD

Allocating across the asset class offers diversified and complete EMD exposure

52

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Local

Currency

15.2%

Hard

Currency

9.9%

Corporates

6.6%

2017

Local

Currency

18.1%

Local

Currency

-5.2%

Corporates

38.6%

Local

Currency

15.7%

Hard

Currency

7.3%

Hard

Currency

1.2%

Local

Currency

15.2%

Hard

Currency

17.4%

Corporates

-1.7%

Hard

Currency

7.4%

Corporates

10.5%

Hard

Currency

6.2%

Corporates

3.5%

Hard

Currency

-12.0%

Corporates

-15.4%

Hard

Currency

29.8%

Local

Currency

22.0%

Corporates

13.5%

Hard

Currency

12.2%

Corporates

3.2%

Local

Currency

-1.8%

Corporates

17.0%

Local

Currency

16.8%

Hard

Currency

-5.3%

Local

Currency

-9.0%

Corporates

5.7%

Local

Currency

-5.7%

Corporates

1.2%

Local

Currency

-14.9%

Hard

Currency

10.2%

Local

Currency

9.9%

Hard

Currency

10.3%

Corporates

7.9%

Corporates

-2.2%

Local

Currency

-10.7%

Hard

Currency

-4.1%

_______________________Source: JP Morgan: Hard Currency (JP Morgan EMBI GD Index); Local Currency (JP Morgan GBI-EM GD Index ); Corporates (JP Morgan CEMBI Diversified Index). Information is as of September 30, 2018 and subject to change without notice.


Emerging Markets Debt – Its Role in Today’s Fixed Income Portfolio

Demonstrated attractive risk-reward dynamics and diversification benefits over time

1. Source: JP Morgan. JPM EMBI Global Diversified (EMD Hard Currency), JPM CEMBI Diversified (EMD Corporate), JPM GBI-EM Global Diversified (EMD Local Currency), 50% JPM EMBI Global Diversified 1-3yr, 50% JPM CEMBI Diversified 1-3yr (EMD Short Duration), EMD Blend (25 EMD HC/25 EMD Corp/50 EMD LC), Barclays US Agg Corporate Index (U.S. IG Corporates), Credit Suisse Leveraged Loan (Leveraged Loan CS), Barclays Global Agg Total Return Index Unhedged (Global Agg ), Unhedged Barclays US Corporate HY (U.S. HY Corp), and United States Benchmark 10 Year Datastream Government Index(U.S. Treasury). The above information is based upon the indices as identified above. Please see the Disclosure Section of this book for a complete description of each index. Actual investment results will vary. It is not possible to invest directly in any index.

2. Source: Bloomberg, JPMorgan. Past performance is not necessarily indicative of future results. As with any investment, there is the possibility of profit as well as the risk of loss.

53

EMD Blend

EMD Hard Currency

EMD CorporatesEMD Local Currency

US Corp. HY

Leveraged Loans (CS)

US Agg. Global Agg.

US Corp. IG

UST

EMD Short Duration

US Equities

Emerging Markets

0%

2%

4%

6%

8%

10%

12%

14%

2% 7% 12% 17% 22% 27%

An

nu

aliz

ed R

etu

rn

Annualized Risk

Risk/Return of Asset Classes¹ (January 1, 2003 – September 30, 2018)

Benchmark Performance EMD Hard Currency EMD Corporate EMD Local Currency EMD Blend EMD Short Duration

Annualized Return (%) 8.15 6.93 6.53 7.12 5.95

Annualized Volatility (%) 8.02 8.72 11.81 9.40 3.95

Sharpe Ratio 0.81 0.60 0.41 0.58 1.09

Correlation: U.S. Treasury 0.31 0.29 0.14 0.22 0.09

Correlation: U.S. IG Corp 0.79 0.81 0.54 0.70 0.62

Correlation: U.S. HY Corp 0.74 0.73 0.62 0.71 0.72

Correlation: U.S. Equity 0.53 0.53 0.58 0.60 0.48

Correlation: EM Equity 0.67 0.64 0.79 0.78 0.59

Summary Statistics² (January 1, 2003 – September 30, 2018)


Emerging Markets Debt – Its Role in Today’s Fixed Income Portfolio

Access to attractive yields relative to developed markets bonds and a balanced duration profile

_______________________Source: JP Morgan. Benchmarks used are EMD HC (JPM EMBI Global Diversified), EMD LC (JPM GBI-EM Global Diversified), EMD Corporate (JPM CEMBI Diversified), EMD SD (50% JPM EMBI Global Diversified 1-3yr, 50% JPM CEMBI Diversified 1-3yr), US IG Credit (JPM JULI ex-EM), US High Yield (JPM Domestic HY); US Treasury (GBI US), Blend EMD (25 EMD HC/25 EMD Corp/50 EMD LC). The above information is based upon the indices as identified above. Please see the Disclosure Section of this book for a complete description of each index. Actual investment results will vary. It is not possible to invest directly in any index. Past performance is not necessarily indicative of future results. As with any investment, there is the possibility of profit as well as the risk of loss.

54

Yield and Duration (as of September 30, 2018)

US Treasury (10Y)

EMD Short Duration

US IG Credit

EMD Corporate

EMD Hard CurrencyEMD Blend

US High YieldEMD Local Currency

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00

Yie

ld (

%)

Duration (yrs)


Breakdown of Historical Benchmark Returns

LOCAL BOND RETURNSHARD CURRENCY SOVEREIGN RETURNS

HARD CURRENCY CORPORATE RETURNS BLENDED EMD BENCHMARK RETURNS

_______________________

Source: JP Morgan, NB calculations. As of December 31, 2018,

-1% -2%5%

12%

-10%3%

10%

1%-9%

5%-1%

-1% -2%

7% 4%-6%

-34%

28%

1%

-9%

10%

-4%

-3%-4%

5% 4% 1%

4% 8% 7%

9%

11%

8%6% 7%

7%5% 6% 6% 6%

1%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

US 5Y Return Spread Return Carry and residual

-2% -1%5% 9%

-8%3% 6%

1% -6% 2% -1%-1%

-2%

6% 3%-5% -5%

11% 1%

-4%

6%

-2%

4% 3% 2%

6%7% 7%

6%8%

8% 6% 7%

6% 5% 6% 6% 7%

1%-4%

6%11%

-14%

11%

4%

-9%

3%

-9%-13%

-18%

1% 6%4%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

US 7Y Return LB Spread vs US 7Y return Carry and residual FX Spot Return

-3% -2%

7% 12%

-9%4% 8%

1%-8% 3% -1% -1% 0% -2%

-1%

3%-11%

-38%

31%

4%

-10%

9%

-1% -3% -4%

6%

3% 1%

11% 6%7%

11%

17%

6% 5%7%

7% 6% 6%5%

6% 1%

-50%

-30%

-10%

10%

30%

50%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

US 7Y Return Spread Return Carry and residual

-2% -2%5%

10%

-9%

3% 7%

1% -7%3% -1% -1% -2%2% 2%

-4%

-18%

15%1%

-5%5%

-1%-1% -2%

3% 2%1%3% 2%

-2%

-3%

5%

1%

-2%

3%

-1%

2%

2%

1%7% 7% 7%8%

11%

7% 6% 7%

7%5%

6%6% 6%

1%

-2%

3%5%

-7%

5%

2%

-5%

1%

-4% -6% -9%

0% 3%

2%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

UST Credit Spread LB vs UST Carry & Res FX Spot

55


EMD Asset Classes React Differently to Global Drivers

ANNUALIZED TOTAL RETURN – US DOLLAR MOVESANNUALIZED TOTAL RETURN – US TREASURY SHIFTS

_________________

Data: Quarterly 2004Q1-2018Q2.

Sources: Bloomberg for US Generic Govt 10 Year Yield, US Generic Govt 5 Year Yield, U.S. Dollar Index. The U.S. Dollar Index(DXY) is an average of the exchange rates between the USD and major world currencies. JP Morgan

for EMBI Glob. Div., CEMBI Div., GBI-EM Glob. Div. HC Short Duration index is 50% EMBI Glob 1-3yr + 50% CEMBI Broad 1-3yr. US Treasury Up and Down regimes are defined by the quarters when US Generic Govt 10 Year Yield

increases or decrease. USD Up and Down regimes are defined by the quarters when the U.S. Dollar Index returns increases or decrease.

0%

5%

10%

15%

EMD HardCurrency

EMD Corporates EMD LocalCurrency

EMD ShortDuration

US Treasury Yield Up US Treasury Yield Down

-10%

-5%

0%

5%

10%

15%

20%

25%

EMD HardCurrency

EMD Corporate EMD LocalCurrency

EMD ShortDuration

USD Up USD Down

56

OUTLOOK


Source: Bloomberg

58

HC spreads, EM FX showing some stabilization after selling off more than during the Taper Tantrum

Taper Tantrum: 1 May 2013 – 31 December 2013 Current Conditions: 1 Jan 2018 – 30 September 2018

Markets: ‘Taper Tantrum’ vs Current Conditions

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

250

270

290

310

330

350

370

390

May

-13

May

-13

May

-13

Jun-

13

Jun-

13

Jul-1

3

Jul-1

3

Aug

-13

Aug

-13

Sep

-13

Sep

-13

Oct

-13

Oct

-13

Oct

-13

Nov

-13

Nov

-13

Dec

-13

Dec

-13

EMBIGD Spread (LHS) EM Currencies

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

250

270

290

310

330

350

370

390

Jan-

18

Jan-

18

Feb

-18

Mar

-18

Mar

-18

Apr

-18

May

-18

May

-18

Jun-

18

Jul-1

8

Jul-1

8

Aug

-18

Sep

-18

EMBIGD Spread (LHS) EM Currencies

For Professional Client Use Only 59

EM external balance and policy mix still favorable in aggregate

Source: LHS: Bloomberg, as of 30 September 2018; EM-10: Brazil, Colombia, India, Indonesia, Korea, Mexico, Poland, Russia, South Africa, Turkey. RHS: Bloomberg, as of 30 September 2018. Real Policy Rate data series are calculated as

the policy rate for each country minus the headline inflation rate. The countries included in the EM Real Policy Rate series are all the countries in the GBI-EM GD Index as of 30 September 2018 with the exception of Argentina, Dominican

Republic and Uruguay; The countries included in the EM Real Policy Rate series are weighted based on their weights in the JPMorgan GBI-EM Global Diversified Index as of 30 September 2018.

EM-10 Aggregate Current Account ($Bn) Real Policy Rates: EM vs DM

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Jan-

14

Apr

-14

Jul-1

4

Oct

-14

Jan-

15

Apr

-15

Jul-1

5

Oct

-15

Jan-

16

Apr

-16

Jul-1

6

Oct

-16

Jan-

17

Apr

-17

Jul-1

7

Oct

-17

Jan-

18

Apr

-18

Jul-1

8

EM Real Policy Rate (GBI-EM GD Weighted)

US Real Policy Rate

Eurozone Real Policy Rate

-250

-200

-150

-100

-50

0

50

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Jan-

16

May

-16

Sep

-16

Jan-

17

May

-17

Sep

-17

Jan-

18

May

-18

Sep

-18


Current 1m ago 6m ago 12m ago

Emerging markets PMI 50.3 50.8 51.3 51.4

China 50.0 50.6 51.1 51

India 52.2 51.7 51.6 51.2

Indonesia 50.7 51.9 51.6 50.4

South Korea 51.3 49.9 48.4 50.6

Taiwan 50.8 53 54.8 54.2

Malaysia 51.5 51.2 48.6 49.9

Poland 50.5 51.4 53.9 53.7

Czech Republic 53.4 54.9 57.2 56.6

Hungary 53.8 56.0 53.3 59.3

Russia 50.0 48.9 51.3 51.9

Turkey 42.7 46.4 48.9 53.5

South Africa 43.2 43.4 50.9 44.9

Mexico 51.7 50.7 51.6 52.8

Brazil 50.9 51.1 52.3 50.9

% EM PMIs above 50 73% 73% 80% 87%

Leading indicators pointing to softer pace of EM growth

PMIs trending lower across each EM region, though still in expansionary territory in most countries

Source: Markit, Bloomberg, as of September 30, 2018.

Manufacturing PMI – EM Regions Manufacturing PMI – EM Countries

47.0

48.0

49.0

50.0

51.0

52.0

53.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep

-16

Nov

-16

Jan-

17

Mar

-17

May

-17

Jul-1

7

Sep

-17

Nov

-17

Jan-

18

Mar

-18

May

-18

Jul-1

8

Sep

-18

% EM PMIs above 50 Emerging markets PMI


EM FX weakness concentrated in ‘vulnerable’ EM currencies

Sharp sell-off in FX from countries with external and fiscal deficits

Source: Bloomberg, JPMorgan as of September 30, 2018. Vulnerable FX includes countries with weak scores on a number of factors including current account, FX reserves, fiscal balance, inflation rate and foreign ownership of local

bonds markets. The following currencies are included in this group: ZAR, TRY, INR, IDR, BRL. The Other EM FX category includes the following currencies: PLN, HUF, CZK, RUB, ILS, KRW, SGD, MYR, PHP, THB, MXN, CLP,

COP.

Real Effective Exchange Rates: ‘Vulnerable’ vs. Other EM Currencies

70

80

90

100

110

120

130

Sep

-96

Mar

-97

Sep

-97

Mar

-98

Sep

-98

Mar

-99

Sep

-99

Mar

-00

Sep

-00

Mar

-01

Sep

-01

Mar

-02

Sep

-02

Mar

-03

Sep

-03

Mar

-04

Sep

-04

Mar

-05

Sep

-05

Mar

-06

Sep

-06

Mar

-07

Sep

-07

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Sep

-10

Mar

-11

Sep

-11

Mar

-12

Sep

-12

Mar

-13

Sep

-13

Mar

-14

Sep

-14

Mar

-15

Sep

-15

Mar

-16

Sep

-16

Mar

-17

Sep

-17

Mar

-18

Sep

-18

Vulnerable FX Other EM FX


EM Corporates Outlook: leverage at lowest levels post 2014

EM deleveraging opens a path to stronger growth

1. Source: NB, Factset, based on Facstet US and EM Equity indices

2. Source: JPMorgan, as of June 10, 2018; Includes distressed exchanges; Default rates are par-weighted.

62

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Jan-

03

Dec

-03

Nov

-04

Oct

-05

Sep

-06

Aug

-07

Jul-0

8

Jun-

09

May

-10

Apr

-11

Mar

-12

Feb

-13

Jan-

14

Dec

-14

Nov

-15

Oct

-16

Sep

-17

EM Total Debt/EBITDA, LTM US Total Debt/EBITDA, LTM

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18F

EM HY US HY

EM vs US Leverage¹ EM Corporate HY vs US HY Default Rate²


Public debt levels in Emerging Markets remain moderate

Corporate leverage in China has surged but recent credit tightening measures seem to bear fruit

Source: LHS: IMF World Economic Outlook (WEO), data as of April 2018. RHS: Bank of International Settlements, Neuberger Berman, data as of September 30, 2017.

General Government Debt (% Of GDP) Non Financial Corporate Debt (% GDP)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Advanced economies Emerging market and developing economies

0

20

40

60

80

100

120

140

160

180

Mar

-06

Nov

-06

Jul-0

7

Mar

-08

Nov

-08

Jul-0

9

Mar

-10

Nov

-10

Jul-1

1

Mar

-12

Nov

-12

Jul-1

3

Mar

-14

Nov

-14

Jul-1

5

Mar

-16

Nov

-16

Jul-1

7

EM ex China (GDP-weighted) China US Europe

63


Macroeconomic Forecasts

October 2018 Forecast

Real GDP Growth

(%, y/y)

CPI Inflation*

(year-end)

Budget Balance

(% GDP)

Current Account

(% GDP)

2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019

Global EM (GDP-weighted) 4.6 4.6 4.5 3.5 4.2 3.6 -3.7 -3.1 -3.1 0.8 0.7 0.3

Export Growth

(value in US$, % y/y)

External Debt

(% GDP)

Public Debt

(% GDP)

2017 2018 2019 2017 2018 2019 2017 2018 2019

Global EM (GDP-weighted) 8.5 7.2 4.2 36.0 36.2 35.5 48.7 49.3 48.3

64

Neuberger Berman forecasts as of October 2018. *CPI Inflation aggregates exclude Argentina and Venezuela. For illustrative purposes only. Expectations may not materialize.

• We expect EM GDP growth to soften into next year as trade policy uncertainty and increased geopolitical risks are weighing on export growth and on business confidence

• Current accounts and external debt fundamentals have remained relatively well behaved in part due to floating FX regimes helpingcushion the external shocks

• Despite larger budget shortfalls compared to previous years, overall public debt levels have stabilised and remain moderate at under 50% of GDP


2H 2018: Risks on the Horizon

65

EM issuers with leveraged or weaker funding profiles are most exposed to those risks

Trade Policy

• China / US tariffs• Steel / aluminum tariffs and retaliatory tariffs• Global value chains at risk (e.g. car market)

Political

• EM elections and policy repercussions (e.g. Brazil)

• Populist policies in various countries (e.g. Italy, Hungary)

Monetary Policy

• FED hikes, QT by ECB & FED continuing the liquidity squeeze via stronger USD and portfolio flows out of EM


Local Yields Provide Substantial Cushion

Source: Neuberger Berman, Bloomberg , JPMorgan. Historical trends do not imply, forecast or guarantee future results.

66

-2

-1

0

1

2

3

4

5

6

7

US

D

EU

R

Indo

nesi

a

Mal

aysi

a

Tha

iland

Phi

lippi

nes

Chi

na

Indi

a

Sou

th K

orea

Hun

gary

Pol

and

Rom

ania

Cze

chR

ep

Tur

key

Rus

sia

Sou

th A

fric

a

Bra

zil

Chi

le

Col

ombi

a

Mex

ico

Per

u

Real yields offer an attractive premium over developed markets

GBI EM VS. US 5Y and 5Y Bund Nominal Yields (%)

as of October 9, 2018

EM VS DM Real Yield As of October 9, 2018, Based On Current

5y Nominal Yield VS 12m Fwd CPI

6.73

3.05

-0.05

-2

-1

0

1

2

3

4

5

6

7

8

Oct

-13

Dec

-13

Feb

-14

Apr

-14

Jun-

14A

ug-1

4O

ct-1

4D

ec-1

4F

eb-1

5A

pr-1

5Ju

n-15

Jul-1

5S

ep-1

5N

ov-1

5Ja

n-16

Mar

-16

May

-16

Jul-1

6S

ep-1

6N

ov-1

6Ja

n-17

Mar

-17

May

-17

Jul-1

7S

ep-1

7N

ov-1

7Ja

n-18

Mar

-18

May

-18

Jul-1

8S

ep-1

8

EMD Local Bond Yield 5y US Treasury Yield 5y German Bund Yield

2.85

GBI-EMGD

Weighted

Real Yield

LATAMASIA CEEMEA


Real Effective Exchange Rates in Emerging Markets

NB EMD REER Model points to undervaluation in the majority of EM Currencies

The NB EMD REER Model generates a 'fair value REER' for each currency based on the NB EMD Team’s end 2018 forecasts of a set of macroeconomic fundamentals for each country; the chart above shows the deviation between actual REERs and the 'fair value REERs' expressed through a z-score, based on the period 1/1/1999 – 25/05/2018. Sources: BIS, Bloomberg, Neuberger Berman; As of September 30, 2018.

Actual REER vs NB Model REER (z-score)

67

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

TRY RUB PHP CNY MXN IDR MYR ILS PLN RON ZAR CLP COP INR KRW THB TWD PEN HUF CZK SGD BRL


Corrections in Local Currency often Followed by Meaningful Recoveries

Rank End of Drawdown Magnitude 1 Week after 1 Month after 1 Quarter after

1 27-Oct-08 -27.7% 8.2% 8.8% 11.6%

2 13-Mar-15 -18.2% 2.9% 5.2% 2.0%

3 5-Sep-18 -16.4% 1.0%

4 3-Sep-13 -15.7% 2.6% 6.4% 4.8%

5 4-Sep-15 -14.1% 0.0% 3.9% -2.2%

6 9-Mar-09 -14.0% 6.9% 13.5% 23.8%

7 4-Oct-11 -11.6% 5.8% 6.3% 2.9%

8 23-Jun-06 -10.5% 2.5% 5.6% 7.5%

9 3-Feb-14 -10.3% 1.7% 4.9% 9.9%

10 20-Jan-16 -9.8% 2.1% 6.7% 16.1%

Valuations, fundamentals, and technicals are starting to align for such a recovery in local currency

Source: JPMorgan, As of September 30, 2018. The table includes the 10 largest corrections since inception of the JPMorgan GBI-EM Global Diversified Index in 2003.

Information is on this page represents historical observations about the sub-asset classes and is not intended to represent or predict future events. Historical trends do not imply, forecast or guarantee future results.


Broad-based EM spread widening across HY/IG, Sovereigns and Corporates

EM hard currency bonds spread pickup versus developed markets has widened

Source: JPMorgan, Barclays. Neuberger Berman. As of October 9, 2018. Indices used: JPM EMBI Global Diversified HY and IG subindices, JPM CEMBI Diversified HY and IG subindices, Barclays US High Yield Index, Barclays Global Aggregate Corporate IndexThis material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice. Information is on this page represents historical observations about the sub-asset classes and is not intended to represent or predict future events. Historical trends do not imply, forecast or guarantee future results.

Spread Over Treasuries


EMD HC Spread Above US High Yield Spread for the First Time Since 2005

Despite 51% of the EMD HC Index being Investment Grade rated at present

Source: JPMorgan, Barclays, As of September 30. 2018. Indices used: JPM EMBI Global Diversified Index, Barclays US High Yield Index, This material is intended as a broad overview of the portfolio managers’ current style, philosophy and process, is as of the date hereof and is subject to change without notice. Information is on this page represents historical observations about the sub-asset classes and is not intended to represent or predict future events. Historical trends do not imply, forecast or guarantee future results.

EMBI GD Spread VS Us HY Spread


Top-Down Outcome

Source: Neuberger Berman. Score ranges from -1 to 1. For illustrative purposes only. As of October 15, 2018.

Top-down Scores

Global

Markets

EMD

Fundamentals

Technical

Factors Value Total

Top-down Score

(Previous)

HC Sovereign Spreads -0.2 0.1 0.3 0.5 0.03 0.03

HC Corporate Spreads -0.1 0.2 0.3 0.0 -0.01 0.07

Local Bond Yields -0.2 -0.1 0.0 0.8 -0.08 -0.04

EM Currencies -0.2 0.1 -0.1 0.5 -0.13 -0.09

71


Total Asset Class Return Views – 12 Month Horizon

Neuberger Berman investment views are formulated by our specialty fixed income teams. For a variety of fixed income sectors we identify a range of outcomes that either may occur or alternatively be anticipated and then priced into the market. Foreach sector we formulate an investment view based on proprietary fundamental research and quantitative analysis which are used to project expected returns and a confidence level of the return expectation. Each sector team will establish anindependent view based on internal research, and a level of confidence in the outlook. The sector view is formulated by identifying various states of the economy and market (i.e. outcomes) expected typically over a 12-month horizon. Each state oroutcome is probability weighted to determine the overall sector view. The reassessment of sector views is ongoing and formally updated at least monthly. The above modeled asset class return views are based upon certain assumptions, includingthe above assumed spread to treasury and expected yield information. If actual spread to treasury and yield data differs from the assumed data above, there is a risk that the modeled asset class return views alike will differ materially from actualasset class return data. Expected Return Forecast May Not Materialize. The expected returns contained herein are being shown to illustrate the investment decision-making process and are not intended to provide any guarantee or assuranceabout the future returns of any security, asset class or portfolio. Projections or other forward-looking statements regarding future events, targets or expectations are only current as of the date indicated. There is no assurance that such events orprojections will occur, and may be significantly different than that shown here. The information in this presentation, including statements concerning financial market trends, is based on current market conditions, which will fluctuate and may besuperseded by subsequent market events or for other reasons. Please see “Disclosures” at the end of this material.

Total return analysis combines the outcomes of the TAA scorecard into a forecast per asset class

72

October 5, 201812m Expected

Returns

Scenario 1:

Reflation & Trade

Risks

Scenario 2:

Slower Global

Growth

Scenario 3:

Balanced Global

Growth

Scenario 4:

Deflation/Recession

Probability 30% 20% 35% 15%

EMD Hard Currency Sovereign 7.1% 3.3% 8.2% 9.8% 6.8%

EMD Hard Currency Corporate 4.0% 1.0% 4.3% 7.8% 0.8%

EMD Local Currency 6.6% 3.3% 6.5% 14.6% -5.4%

EMD Blended benchmark (25/25/50) 6.1% 2.7% 6.4% 11.7% -0.8%


EMD Outlook – Our Views

73

As of October 2018.Opinions expressed herein reflect the opinion of Neuberger Berman and are subject to change without notice. Expectations may not materialize. Estimates and views may not materialize. The estimates and views contained herein are being shown to illustrate NB's current expectations regarding future financial information, they are not intended to provide any guarantee or assurance about the future performance. Estimates or other forward-looking statements regarding future events, targets or expectations are only current as of the date indicated. There is no assurance that such events or forecasts will occur, and may be significantly different than that shown here. The information in this presentation, including statements concerning financial market trends, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.

• Sentiment around EM remains fragile, due to trade tensions and tighter global liquidity conditions pressuring weaker funding

profiles such as Argentina and Turkey (fiscal or balance of payments).

• We remain constructive on the medium term outlook for EM economies as they benefit from strong growth in developed

markets and reforms across a wide set of countries,

• With the underperformance of EMD in the FX and spreads space, we are witnessing a larger correction now than during

the Taper Tantrum in 2013 which is unwarranted, given much better EM fundamentals like current accounts, resilient global

growth and higher commodity prices supporting the terms of trade.

• The widening of spreads of EM hard currency sovereigns and corporates so far this year contrasts markedly with unchanged

spreads for US high yield credits. We remain o/w Sovereigns versus Corporates and Local Currency

• Benign local inflation dynamics have contained the upward pressure on local rates triggered by falling currencies and wider

spreads to some extent. Sharp rises in real yields in various cases have created value opportunities in markets like Brazil,

Mexico and Indonesia.

• EMFX remains the most sensitive to the risks outlined keeping visibility limited for now; we maintain a low risk bias in EM

currencies, with an underweight bias to select Asian currencies which have held up relatively well but are vulnerable to

worsening trade tensions.

SUPPLEMENTAL PERFORMANCE

Emerging Market Debt - Blend Composite (Inception 10/1/2013)

Investment Performance Results – As of September 30, 2018

Past performance is no guarantee of future results.Please see attached important disclosures which contain complete performance information and definitions.

Composite Benchmark Composite 3 Year Standard Deviation

Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

Custom Blend

(%)

No. of

Accounts

Market Value

($, m)

Total Firm

Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

Custom Blend

(%)

YTD Sep-

2018-6.19 -6.69 -5.21 ≤ 5 1,947.7 -- -- -- 8.65 7.69

2017 15.08 14.27 12.13 ≤ 5 1,958.4 295.2 0.66 -- 8.04 7.37

2016 10.32 9.52 10.25 ≤ 5 1,086.2 255.2 0.43 -- 9.06 8.30

2015 -7.51 -8.24 -7.14 ≤ 5 528.0 240.4 0.22 -- -- --

2014 1.26 0.37 0.31 ≤ 5 300.8 250.0 0.12 -- -- --

3 Months

20130.48 0.25 0.09 ≤ 5 100.5 241.7 0.04 -- -- --

75

Emerging Market Debt - Blend Composite

Investment Performance Disclosure Statement

Compliance Statement• Neuberger Berman Group LLC ("NB", "Neuberger Berman" or the "Firm") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS® standards. Neuberger

Berman has been independently verified for the period January 1, 2011 to December 31, 2017. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS® standards on a firm-wide basis and (2) thefirm's policies and procedures are designed to calculate and present performance in compliance with the GIPS® standards.

• The GIPS® firm definition was redefined effective January 1, 2011. For prior periods there were two separate firms for GIPS® firm definition purposes and such firms were independently verified for the periods January 1, 1997 to December 31, 2010 andJanuary 1, 1996 to December 31, 2010, respectively. Verification does not ensure the accuracy of any specific composite presentation. The verification reports are available upon request.

Definition of the Firm• The firm is currently defined for GIPS® purposes as Neuberger Berman Group LLC, ("NB", "Neuberger Berman" or the "Firm"), and includes the following subsidiaries: Neuberger Berman Investment Advisers LLC, Neuberger Berman Europe Ltd., Neuberger

Berman Asia Ltd., Neuberger Berman East Asia Ltd., Neuberger Berman Singapore Pte. Ltd., Neuberger Berman Taiwan Ltd, Neuberger Berman Australia Pty. Ltd., Neuberger Berman Trust Company N.A., Neuberger Berman Trust Company of DelawareN.A. and NB Alternatives Advisers LLC.

Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Emerging Market Debt- Blend Composite (the "Composite") includes the performance of all fee-paying Emerging Market Debt - Blend portfolios, with no minimum investment, managed by the Emerging Market Debt team. The Emerging Market Debt-

Blend strategy seeks to achieve total return consisting of income and capital appreciation, by investing in a diversified selection of debt instrument denominated in USD or local currency issued by issuers from developing countries. The strategy may invest in sovereign, quasi-sovereign, corporate, sub-sovereigns and supra-national issuers. The strategy mainly invests in Latin American, Central and Eastern European, the Middle East, Asian and African debt instruments. The Composite creation and performance inception date is October 2013. A complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is a blend of 50% of the JP Morgan GBI Emerging Markets Global Diversified Index, 25% of JP Morgan Emerging Markets Bond Index Global Diversified and 25% of the JP Morgan Corporate Emerging Market Bond Diversified Index .The

benchmark is calculated on a total return basis. Additional disclosures for complete benchmark descriptions are available upon request.Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.65% on the first $100mn; 0.55% on the next $150mn; 0.45% thereafter. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios

for the entire year.Annualized Standard Deviation• The three-year annualized standard deviation measures the variability of the Composite and the benchmark returns over the preceding 36-month period. The standard deviation is not required for periods prior to 2011.

76

Emerging Market Corporate Debt Composite (Inception 7/1/2013)




Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

JP Morgan

CEMBI

Diversified Index

(%)

No. of

Accounts

Market Value

($, m)

Total Firm

Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

JP Morgan CEMBI

Diversified Index

(%)

YTD Sep-

2018-2.09 -2.67 -1.66 ≤ 5 128.5 -- -- -- 4.54 3.96

2017 9.41 8.54 7.89 ≤ 5 145.4 295.2 0.05 -- 4.65 4.10

2016 11.73 10.85 10.43 ≤ 5 124.9 255.2 0.05 -- 5.40 4.66

2015 0.43 -0.36 1.18 ≤ 5 93.8 240.4 0.04 -- -- --

2014 6.45 5.61 5.70 ≤ 5 169.9 250.0 0.07 -- -- --

6 Months

20133.81 3.40 3.11 ≤ 5 29.2 241.7 0.01 -- -- --

77

Emerging Market Corporate Debt Composite







Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Emerging Market Corporate Debt Composite (the "Composite") includes the performance of all fee-paying Emerging Market Corporate Debt portfolios, with no minimum investment, managed by the Emerging Market Debt team. The Emerging Market

Corporate Debt strategy seeks to achieve long-term capital growth by investing generally in corporate debt instruments denominated in USD. The strategy focuses primarily on issuers from developing countries such as Latin America, Asia, Central and Eastern Europe, Middle East and Africa. The Composite creation and performance inception date is July 2013. A complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is the JP Morgan CEMBI Diversified Index (the "Index"). The Index is designed to measure the total returns for USD denominated debt issued by emerging market corporations. The CEMBI family of indices expands J.P. Morgan's regional

corporate indices - JACI, LEBI, RUBI, which provide benchmarks for Asia, Latin America, and Russia, respectively. The benchmark is calculated on a total return basis.Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.65% on the first $100mn; 0.55% on the next $150mn; 0.45% thereafter. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios


78

Emerging Market Debt - Hard Currency Composite (Inception 6/1/2013)




Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

JPM EMBI Global

Diversified Index

(%)

No. of

Accounts

Market Value

($, m)

Total Firm

Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

JPM EMBI Global

Diversified Index

(%)

YTD Sep-

2018-3.36 -3.80 -3.04 ≤ 5 1,789.6 -- -- -- 6.48 5.48

2017 14.82 14.24 10.26 ≤ 5 1,313.8 295.2 0.45 -- 6.27 5.04

2016 12.82 12.34 10.15 ≤ 5 663.4 255.2 0.26 -- 7.07 5.78

2015 -0.30 -0.66 1.18 ≤ 5 1,015.8 240.4 0.42 -- -- --

2014 8.89 8.14 7.43 ≤ 5 98.1 250.0 0.04 -- -- --

7 Months

2013-1.30 -1.70 -2.32 ≤ 5 11.4 241.7 0.00 -- -- --

79

Emerging Market Debt - Hard Currency Composite







Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Emerging Market Debt - Hard Currency Composite (the "Composite") includes the performance of all fee-paying Emerging Market Debt - Hard Currency portfolios, with no minimum investment, managed on a fully discretionary basis by the Emerging

Market Debt team. The Emerging Market Debt - Hard Currency strategy seeks to achieve long term capital growth by investing generally in debt instruments denominated in USD. The strategy focuses primarily on issuers from developing countries such as Latin America, Asia, Central and Eastern Europe, Middle East and Africa. The Composite creation and performance inception date is June 2013. A complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is the JPM EMBI Global Diversified Index (the "Index"). The Index tracks the total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities, including Brady bonds, loans, and

Eurobonds. The benchmark is calculated on a total return basis.Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.55% on the first $100mn; 0.45% on the next $150mn; 0.35% thereafter. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios


80

Emerging Market Debt - Local Currency Composite (Inception 7/1/2013)




Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

JPM GBI

Emerging

Markets Global

Diversified Index

(%)

No. of

Accounts

Market Value

($, m)

Total Firm

Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

JPM GBI Emerging

Markets Global

Diversified Index

(%)

YTD Sep-

2018-9.10 -9.51 -8.15 ≤ 5 4,066.4 -- -- -- 12.06 11.37

2017 17.10 16.36 15.21 ≤ 5 2,699.5 295.2 0.91 -- 11.31 10.87

2016 10.22 9.51 9.94 ≤ 5 1,428.0 255.2 0.56 -- 12.55 11.97

2015 -15.73 -16.37 -14.92 ≤ 5 501.4 240.4 0.21 -- -- --

2014 -4.71 -5.43 -5.72 ≤ 5 433.0 250.0 0.17 -- -- --

6 Months

2013-0.13 -0.50 -1.96 ≤ 5 124.6 241.7 0.05 -- -- --

81

Emerging Market Debt - Local Currency Composite







Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Emerging Market Debt - Local Currency Composite (the "Composite") includes the performance of all fee-paying Emerging Market Debt - Local Currency portfolios, with no minimum investment, managed on a fully discretionary basis by the Emerging

Market Debt team. The Emerging Market Debt - Local Currency strategy seeks to achieve long term capital growth by investing generally in debt instruments denominated in local currencies. The strategy focuses primarily on issuers from developing countries such as Latin American, Central and Eastern European, the Middle East, Asian and Africa. The Composite creation and performance inception date is July 2013. A complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is the JPM GBI Emerging Markets Global Diversified Index (the "Index"). The Index is designed to measure the total returns for local currency bonds issued by Emerging Market governments. The benchmark is calculated on a total return

basis and is market cap weighted and unmanaged.Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.60% on the first $100mn; 0.50% on the next $150mn; 0.40% thereafter. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios


82

Emerging Markets Debt - Blend Investment Grade Composite (Inception 8/1/2017)



Composite Benchmark Composite

3 Year Standard

Deviation

Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

EMD Blend

Investment Grade

Index (%)

No. of

Accounts

Market Value

($, m)

Total Firm Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

YTD Sep-

2018-1.56 -2.01 -1.84 ≤ 5 15.4 -- -- -- --

5 Months

20172.90 2.65 2.27 ≤ 5 14.3 295.2 0.00 -- --

83

Emerging Markets Debt - Blend Investment Grade Composite







Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Emerging Markets Debt - Blend Investment Grade Composite (the "Composite") includes the performance of all fee-paying Emerging Markets Debt - Blend Investment Grade portfolios with no investment minimum managed on a fully discretionary basis

by the Emerging Market Debt team. The Emerging Markets Debt - Blend Investment Grade strategy is designed for investors who seek long term capital growth, by investing generally in a diversified selection of investment grade debt instruments denominated in USD and local currencies issued by sovereign, quasi-sovereign and corporate issuers from developing countries. The strategy mainly invests in Latin American, Central and Eastern European, the Middle East, Asian and African debt instruments. The Composite creation and performance inception date is July 2017. A complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is a blend of 66.6% of the JP Morgan Emerging Markets Bond Index Global Diversified investment Grade and 33.3% of the JP Morgan GBI Emerging Markets Global Diversified Investment Grade 15% Cap Index.The benchmark is calculated

on a total return basis. Additional disclosures for complete benchmark descriptions are available upon request.Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.65% on the first $100mn; 0.55% on the next $150mn; 0.45% thereafter. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios


84

Asian Debt Hard Currency Composite (Inception 7/1/2015)




Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

JPM Asia Credit

Index (%)

No. of

Accounts

Market Value

($, m)

Total Firm

Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

JPM Asia Credit

Index

(%)

YTD Sep-

2018-1.99 -2.43 -1.41 ≤ 5 15.8 -- -- -- 3.34 2.79

2017 8.22 7.58 5.78 ≤ 5 16.8 295.2 0.01 -- -- --

2016 7.43 6.79 5.81 ≤ 5 16.2 255.2 0.01 -- -- --

6 Months

20150.40 0.10 0.79 ≤ 5 15.0 240.4 0.01 -- -- --

85

Asian Debt Hard Currency Composite







Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Asian Debt Hard Currency Composite (the "Composite") includes the performance of all fee-paying Asian Debt Hard Currency portfolios, with no minimum investment, managed on a fully discretionary basis by the Emerging Market Debt team. The Asian

Debt Hard Currency strategy seeks to achieve risk adjusted total returns (income plus capital appreciation) from hard currency- denominated debt issued in Asian countries. The strategy will invest primarily in debt securities and money market instruments which are issued by governments of, government agencies, or corporate issuers which have their head office or exercise an overriding part of their economic activity in Asian countries and which are denominated in Hard Currency. For the purposes of this strategy, Hard Currency is defined as US Dollar, Euro, Sterling, Japanese Yen and Swiss Franc. The Composite creation and performance inception date is July 2015. A complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is the JPM Asia Credit Index (the "Index"). The Index tracks the total return performance for actively traded USD denominated debt instruments in the Asia region (excluding Japan). The JPM Asia Credit Index (JACI) tracks total return

performance of the Asia fixed-rate dollar bond market. JACI is a market cap-weighted index comprising sovereign, quasi-sovereign and corporate bonds and it is partitioned by country, sector and credit rating.Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.60% per annum. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios


86

China Onshore Bond Composite (Inception 10/1/2015)




Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

China UCITS

Custom Index

(%)

No. of

Accounts

Market Value

(¥, m)

Total Firm

Assets

(¥, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

China UCITS

Custom Index

(%)

YTD Sep-

20184.60 4.06 4.40 ≤ 5 189.7 -- -- -- 1.94 2.16

2017 -0.36 -0.93 -0.89 ≤ 5 202.4 1,922.3 0.01 -- -- --

2016 1.58 0.92 2.15 ≤ 5 203.4 1,773.4 0.01 -- -- --

3 Months

20152.85 2.69 2.97 ≤ 5 200.7 1,561.1 0.01 -- -- --

87

China Onshore Bond Composite







Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The China Onshore Bond Composite (the "Composite") includes the performance of all fee-paying China Onshore Bond portfolios, with no minimum investment, managed on a fully discretionary basis by the Emerging Market Debt team. The China Onshore

Bond Strategy seeks to achieve risk adjusted total returns (income plus capital appreciation) from local interest rates of the People's Republic of China ("PRC"). The strategy will invest primarily in debt securities and money market instruments which are issued within the PRC by PRC government, PRC government agencies or corporate issuers. The Composite creation and performance inception date is October 2015. A complete list of Neuberger Berman's composites is available upon request.

Primary Benchmark Description• The benchmark is the China UCITS Custom Index (the "Index"). The Index tracks the total return performance of a bond portfolio consisting of Chinese Yuan (CNY) denominated, high quality and liquid bonds in China onshore market. The benchmark is

calculated on a total return basis. • Prior to May 2016, the benchmark was the HSBC Asian Local China Index.Reporting Currency• Valuations are computed and performance is reported in Yuan Renminbi.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.65% per annum. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios


88

Short Duration Emerging Market Debt Composite (Inception 11/1/2013)




Total Return

(%, Gross

of Fees)

Total Return

(%, Net

of Fees)

ICE BofAML 3-

Month Treasury

Bill Index (%)

No. of

Accounts

Market Value

($, m)

Total Firm

Assets

($, bn)

% of Firm

Assets

Internal

Dispersion

Composite

(%)

ICE BofAML 3-

Month Treasury

Bill Index

(%)

YTD Sep-

20180.64 0.27 1.30 ≤ 5 3,646.5 -- -- -- 1.95 0.18

2017 4.88 4.36 0.86 ≤ 5 3,631.6 295.2 1.23 -- 2.11 0.11

2016 6.10 5.58 0.33 ≤ 5 1,273.4 255.2 0.50 -- 2.58 0.05

2015 2.00 1.49 0.05 ≤ 5 606.8 240.4 0.25 -- -- --

2014 0.91 0.40 0.03 ≤ 5 302.2 250.0 0.12 -- -- --

2 Months

20130.38 0.30 0.02 ≤ 5 22.4 241.7 0.01 -- -- --

89

Short Duration Emerging Market Debt Composite







Policies• Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.Composite Description• The Short Duration Emerging Market Debt Composite (the "Composite") represents the performance of all fee-paying Short Duration Emerging Market Debt portfolios, with no minimum investment, managed on a fully discretionary basis by the Short Duration

Emerging Market Debt Fixed Income team. The Short Duration Emerging Market Debt Strategy seeks to achieve a positive total return by investing in short duration emerging market sovereign securities denominated in hard currencies and short duration emerging market corporate debt securities denominated in USD. The strategy focuses primarily on issuers from developing countries located in Latin America, Asia, Central and Eastern Europe, Middle East and Africa. The Short Duration Emerging Market Debt Composite ("Composite") represents the performance of all fee-paying, discretionary accounts, managed according to the Short Duration Emerging Market Debt Strategy. The Composite creation and performance inception date is November 2013. A complete list and description of the NB Composites and performance results is available upon request.

Primary Benchmark Description• The benchmark is the ICE BofAML 3-Month Treasury Bill Index (the "Index"). The Index is comprised of a single issue purchased at the beginning of the month and held for a full month. At the end of the month that issue is sold and rolled into a newly

selected issue. The issue selected at each month-end rebalancing is the outstanding Treasury Bill that matures closest to, but not beyond, three months from the rebalancing date. To qualify for selection, an issue must have settled on or before the month-end rebalancing date.

Reporting Currency• Valuations are computed and performance is reported in U.S. Dollars.Fees• Composite Gross of Fee returns are the return on investments reduced by any trading expenses incurred during the period. Composite Net of Fee returns are the Gross of Fee returns reduced by investment advisory fees.Fee Schedule• The annual investment advisory fee, generally payable quarterly, is as follows: 0.45% on the first $100mn; 0.35% on the next $150mn; 0.25% thereafter. Internal Dispersion• Internal dispersion is calculated using the asset-weighted standard deviation of annual gross returns of those portfolios that were in the Composite for the entire year. Internal dispersion is not calculated if the Composite does not contain at least 6 portfolios


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DISCLAIMER

Additional Disclosures

Institutional-Oriented Equity and Fixed Income AUM Benchmark Outperformance Note: Institutional-oriented equity and fixed income assets under management (“AUM”) includes the firm’s equity and fixed

income institutional separate account (“ISA”), registered fund, and managed account/wrap (“MAG”) offerings and are based on the overall performance of each individual investment offering against its

respective benchmark offerings and are based on the overall performance of each individual investment offering against its respective benchmark. High net worth/private asset management (“HNW”) AUM

is excluded. For the period ending June 30, 2018, the percentage of total institutional-oriented equity AUM outperforming the benchmark was as follows: Since Inception: 90%; 10-year: 44%; 5-year: 78%;

and 3-year: 73%; and total institutional-oriented fixed income AUM outperforming was as follows: Since Inception: 95%, 10-year: 82%; 5-year: 69%; and 3-year: 68%. If HNW AUM were included, total equity

AUM outperforming the benchmark was as follows: Since Inception: 88%; 10-year: 31%; 5-year: 55%; and 3-year: 53%; and total fixed income AUM outperforming was as follows: Since Inception: 94%; 10-

year: 82%; 5-year: 69%; and 3-year: 68%. Equity and Fixed Income AUM outperformance results are asset weighted so individual offerings with the largest amount of assets under management have the

largest impact on the results. As of 6/30/2018, six institutional-oriented equity offerings accounted for approximately 54% of the total firm institutional-oriented equity AUM reflected, and nine institutional-

oriented fixed income offerings accounted for approximately 53% of the total firm institutional-oriented fixed income AUM reflected. Performance for the individual offerings reflected are available upon

request. AUM for multi-asset class, balanced and alternative (including long-short equity or fixed income) offerings, as well as AUM for hedge fund, private equity and other private investment vehicle

offerings are not reflected in the AUM outperformance results shown. AUM outperformance is based on gross of fee returns. Gross of fee returns do not reflect the deduction of investment advisory fees and

other expenses. If such fees and expenses were reflected, AUM outperformance results would be lower. Investing entails risk, including possible loss of principal. Past performance is no guarantee of

future results.

Private Equity Outperformance Note: The performance information includes all funds, both commingled and custom, managed by NB Alternatives Advisers LLC with vintage years of 2005 – 2015, with the

exception of a closed-end, public investment company registered under the laws of Guernsey (the “Funds”). Accounts that are only monitored are excluded. Vintage years post 2015 are excluded as

benchmark information is not yet available. Please note that private debt funds are also excluded as benchmark data is not yet available for the applicable vintages.

Percentages are based on the number of funds, calculated as the total number of funds whose performance exceeds their respective benchmarks divided by the total number of all funds with vintage years

of 2005 through 2015. Performance is measured by net IRR, MOIC, and DPI and is compared to the respective index’s median net IRR, MOIC and DPI, respectively. The Cambridge Secondary Index was

used for secondary-focused funds; the Cambridge Buyout and Growth Equity for US and Developed Europe was used for co-investment-focused funds; the Cambridge Fund of Funds Index was used for

commingled funds and custom portfolios comprised of primaries, secondaries and co-investments; and the Cambridge Global Private Equity was used for strategies focused on minority stakes in asset

managers fund and healthcare credit.

The Cambridge Associates LLC indices data is as of December 31, 2017, which is the most recent data available. The Cambridge Associates Fund of Funds Index is the benchmark recommended by the

CFA Institute for benchmarking overall private equity fund of funds performance. The benchmark relies on private equity funds self-reporting data for compilation and as such is subject to the quality of the

data provided. The median net multiple of Cambridge Associates Fund of Funds Index is presented for each vintage year as of December 31, 2017, the most recent available. Cambridge Associates data

provided at no charge.

While one of the secondary funds closed in 2008, Cambridge Associates classifies that particular fund as a 2007 vintage year fund (the year of its formation) and, therefore, the Cambridge Associates

benchmarks used herein are for 2007 vintage year funds.

Private Offerings: Certain strategies referenced herein may only be available through a private offering of interests made pursuant to offering and subscription documents, which will be furnished solely to

qualified investors on a confidential basis at their request for their consideration in connection with an offering. These documents will contain information about the investment objective, terms and conditions

of an investment in such vehicle and will also contain tax information and risk disclosures that are important to an investment decision. Any decision to invest in such vehicle should be made after a careful

review of these documents, the conduct of such investigations as an investor deems necessary or appropriate and after consultation with legal, accounting, tax and other advisors in order to make an

independent determination of the suitability and consequences of an investment in such vehicle.

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Index Definitions

Emerging Markets – Corporate Debt

The Corporate Emerging Market Bond Index series (CEMBI) track USD denominated debt issued by emerging market corporations. The CEMBI family of indices expands J.P. Morgan's regional corporate

indices - JACI, LEBI, RUBI, which provide benchmarks for Asia, Latin America, and Russia, respectively

Emerging Markets – Local Debt

The local debt package consists of the Government Bond Index-Emerging Markets (GBI-EM) series, which was developed in response to an increase in investor appetite towards local currency debt. The

package contains three variations - the GBI-EM, GBI-EM Global and GBI-EM Broad - which cater to different investment objectives and inclusion criteria. The indices span over 15 countries and are also

available in diversified weighting versions.

Emerging Markets – External Debt

The family of J.P. Morgan Emerging Market Bond Index (EMBI) is the most widely used and comprehensive emerging market sovereign debt benchmarks. Historical information is available since December

1993.

Emerging Markets – Local Currency Money Markets

The J.P Morgan Local Market Index Plus (ELMI+) tracks total returns for local-currency denominated money market instruments in 24 emerging markets countries. The benchmark was introduced in June1996 and consists of foreign exchange forward contracts laddered with maturities ranging from one to three months. Country weights are based on a trade-weighted allocation, with maximum weight of 10%for countries with convertible currencies and 2% for countries with non-convertible currencies.

Emerging Markets – Investment Grade Corporates

The J.P. Morgan US Liquid Index (JULI) provides performance comparisons and valuation metrics across a carefully defined universe of investment grade corporate bonds, tracking individual issuers, sectorsand sub-sectors by their various ratings and maturities.

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Institutional-Oriented Equity and Fixed Income AUM Benchmark Outperformance Note: Institutional-oriented equity and fixed income assets under management (“AUM”) includes the firm’s equity and fixed

income institutional separate account (“ISA”), registered fund, and managed account/wrap (“MAG”) offerings and are based on the overall performance of each individual investment offering against its

respective benchmark offerings and are based on the overall performance of each individual investment offering against its respective benchmark. High net worth/private asset management (“HNW”) AUM

is excluded. For the period ending March 31, 2018, the percentage of total institutional-oriented equity AUM outperforming the benchmark was as follows: 10-year: 87%; 5-year: 79%; and 3-year: 78% ; and

total institutional-oriented fixed income AUM outperforming was as follows: 10-year:77%; 5-year:65%; and 3-year: 68%. If HNW AUM were included, total equity AUM outperforming the benchmark was as

follows: 10-year: 63%; 5-year: 55%; and 3-year: 56%; and total fixed income AUM outperforming was as follows: 10-year: 77%; 5-year: 65%; and 3-year: 68%. Equity and Fixed Income AUM outperformance

results are asset weighted so individual offerings with the largest amount of assets under management have the largest impact on the results. As of 3/31/2018, five institutional-oriented equity offerings

accounted for approximately 50% of the total firm institutional-oriented equity AUM reflected, and nine institutional-oriented fixed income offerings accounted for approximately 52% of the total firm

institutional-oriented fixed income AUM reflected. Performance for the individual offerings reflected are available upon request. AUM for multi-asset class, balanced and alternative (including long-short equity

or fixed income) offerings, as well as AUM for hedge fund, private equity and other private investment vehicle offerings are not reflected in the AUM outperformance results shown. AUM outperformance is

based on gross of fee returns. Gross of fee returns do not reflect the deduction of investment advisory fees and other expenses. If such fees and expenses were reflected, AUM outperformance results would

be lower. Investing entails risk, including possible loss of principal. Past performance is no guarantee of future results.

Private Equity Outperformance Note: The performance information includes all funds, both commingled and custom, managed by NB Alternatives Advisers LLC with vintage years of 2005 – 2015, with the

exception of a closed-end, public investment company registered under the laws of Guernsey (the “Funds”). Accounts that are only monitored are excluded. Vintage years post 2015 are excluded as

benchmark information is not yet available. Please note that private debt funds are also excluded as benchmark data is not yet available for the applicable vintages.

Percentages are based on the number of funds, calculated as the total number of funds whose performance exceeds their respective benchmarks divided by the total number of all funds with vintage years of

2005 through 2015. Performance is measured by net IRR, MOIC, and DPI and is compared to the respective index’s median net IRR, MOIC and DPI, respectively. The Cambridge Secondary Index was

used for secondary-focused funds; the Cambridge Buyout and Growth Equity for US and Developed Europe was used for co-investment-focused funds; the Cambridge Fund of Funds Index was used for

commingled funds and custom portfolios comprised of primaries, secondaries and co-investments; and the Cambridge Global Private Equity was used for strategies focused on minority stakes in asset

managers fund and healthcare credit.

The Cambridge Associates LLC indices data is as of September 30, 2017, which is the most recent data available. The Cambridge Associates Fund of Funds Index is the benchmark recommended by the

CFA Institute for benchmarking overall private equity fund of funds performance. The benchmark relies on private equity funds self-reporting data for compilation and as such is subject to the quality of the

data provided. The median net multiple of Cambridge Associates Fund of Funds Index is presented for each vintage year as of September 30, 2017, the most recent available. Cambridge Associates data

provided at no charge.

While one of the secondary funds closed in 2008, Cambridge Associates classifies that particular fund as a 2007 vintage year fund (the year of its formation) and, therefore, the Cambridge Associates

benchmarks used herein are for 2007 vintage year funds.

Private Offerings: Certain strategies referenced herein may only be available through a private offering of interests made pursuant to offering and subscription documents, which will be furnished solely to

qualified investors on a confidential basis at their request for their consideration in connection with an offering. These documents will contain information about the investment objective, terms and conditions

of an investment in such vehicle and will also contain tax information and risk disclosures that are important to an investment decision. Any decision to invest in such vehicle should be made after a careful

review of these documents, the conduct of such investigations as an investor deems necessary or appropriate and after consultation with legal, accounting, tax and other advisors in order to make an

independent determination of the suitability and consequences of an investment in such vehicle.

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Emerging Markets Risk. Emerging markets are those of countries with immature economic and political structures. Securities issued in emerging markets have more risk than securities issued in more developed foreign markets.Investing in emerging markets may involve heightened and significant risks and special considerations not typically associated with investing in other more established economies or securities markets. Such risks may include, butare not limited to: (i) greater social, economic and political uncertainty including war; (ii) higher dependence on exports and the corresponding importance of international trade; (iii) greater risk of inflation; (iv) increased likelihood ofgovernmental involvement in and control over the economies; (v) governmental decisions to cease support of economic reform programs or to impose centrally planned economies; (vi) the possibility of nationalization, expropriation,confiscatory tax policies and social instability; and (vii) considerations regarding the maintenance of a Client Account’s securities and cash with non-U.S. brokers and custodians. Emerging market securities will be affected by generaleconomic and market conditions, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, currency exchange controls and national and international political circumstances.These factors may affect the level and volatility of securities’ prices and the liquidity of the account’s investments. Volatility or illiquidity could impair an account’s profitability or result in losses. In addition, custodial and/or settlementsystems may not be fully developed in emerging market countries, thereby exposing a Client’s Account to the risk of a sub-custodian’s failure with no recourse against the custodian.

This presentation is being furnished on a confidential basis to a sophisticated investor on a “one-on-one” basis for informational and discussion purposes only and does not constitute an offer to sell or a solicitation of an offer topurchase any security. The information is intended only for the recipient to whom it has been distributed, is strictly confidential and may not be reproduced or redistributed in whole or in part nor may its contents be disclosed to anyother person (other than the recipient’s directors, officers, agents or other representatives) under any circumstances without the prior written consent of Neuberger Berman Investment Advisers LLC (“NBIA”). This information is notintended to constitute legal, tax or accounting advice or investment recommendations. The information set forth herein does not purport to be complete and is subject to change.

The value and the income produced by the proposed concept may be adversely affected by exchange rates, interest rates, or other factors so that an investor may get back less than he invested. The products mentioned in this document may not be eligible for sale in some states or countries, and they may not be suitable for all types of investors. The value and the income produced by products may fluctuate, so that an investor may get back less than he invested. Value and income may be adversely affected by exchange rates, interest rates, or other factors. Past performance is not necessarily indicative of future results.

A bond’s value may fluctuate based on interest rates, market conditions, credit quality and other factors. You may have a gain or loss if you sell your bonds prior to maturity. Of course, bonds are subject to the credit risk of theissuer. If sold prior to maturity, municipal securities are subject to gain/losses based on the level of interest rates, market conditions and the credit quality of the issuer. Income may be subject to the alternative minimum tax (AMT)and/or state and local taxes, based on the investor’s state of residence. High-yield bonds, also known as “junk bonds,” are considered speculative and carry a greater risk of default than investment-grade bonds. Their market valuetends to be more volatile than investment-grade bonds and may fluctuate based on interest rates, market conditions, credit quality, political events, currency devaluation and other factors. High yield bonds are not suitable for allinvestors and the risks of these bonds should be weighed against the potential rewards. Neither Neuberger Berman nor its employees provide tax or legal advice. You should contact a tax advisor regarding the suitability of tax-exemptinvestments in your portfolio.

Credit quality generally reflects the average credit quality of three Nationally Recognized Statistical Ratings Organizations (NRSROs), S&P, Moody’s and Fitch, as calculated internally by the investment adviser. Holdings that areunrated by any NRSRO may be assigned an equivalent rating by the investment manager. If NRSRO ratings differ for a particular holding, the average rating is generally used. No NRSRO has been involved with the calculation ofaverage credit quality and the ratings of underlying portfolio holdings should not be viewed as a rating of the portfolio itself. Portfolio holdings, underlying ratings of holdings and average credit may change materially overtime.

We do not represent that the information contained herein is accurate or complete, and it should not be relied upon as such. Certain information contained herein has been obtained from published sources and/or prepared by thirdparties. While such sources are believed to be reliable, none of NBIA or any of its affiliates or employees assume any responsibility for the accuracy or completeness of such information.

Statements contained herein are based on current expectations, estimates, projections, opinions and/or beliefs of Neuberger Berman. Such statements involve known and unknown risks, uncertainties and other factors, and unduereliance should not be placed thereon. Moreover, certain information contained herein constitutes “forward looking” statements, which often can be identified by the use of forward looking terminology such as “may,” “will,” “seek,”“should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” “plan” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Such statements are necessarily speculative in nature,as they are based on certain assumptions. It can be expected that some or all of the assumptions underlying such statements will not reflect actual conditions. Accordingly, there can be no assurance that any estimated projections,forecast or estimates will be realized or that the forward looking statements will materialize. Due to various risks and uncertainties, including those set forth herein, actual events or results or the actual performance of any securityreferenced herein may differ materially from those reflected or contemplated in such forward looking statements.

All information as of the date indicated. Firm data, including employee and assets under management figures, reflect collective data for the various affiliated investment advisers that are subsidiaries of Neuberger Berman Group LLC(the “firm”). Firm history and timelines includes the history and business expansions of all firm subsidiaries, including predecessor entities and acquisition entities. Investment professionals referenced include portfolio managers,research analysts/associates, traders, and product specialists and team dedicated economists/strategists.

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Additional Disclosures (continued)

This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Information is obtained from sources deemed

reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. Any views or opinions expressed may

not reflect those of the firm as a whole. Neuberger Berman products and services may not be available in all jurisdictions or to all client types. Investing entails risks, including possible loss of principal. Investments in hedge funds

and private equity are speculative and involve a higher degree of risk than more traditional investments. Investments in hedge funds and private equity are intended for sophisticated investors only. Indexes are unmanaged and are

not available for direct investment. Past performance is no guarantee of future results.

This material has been issued for use by the following entities; in the U.S. and Canada by Neuberger Berman LLC, a U.S. registered investment advisor and broker-dealer and member FINRA/SIPC; in Europe, Latin America and the

Middle East by Neuberger Berman Europe Limited, which is authorised and regulated by the UK Financial Conduct Authority and is registered in England and Wales, Lansdowne House, 57 Berkeley Square, London, W1J 6ER, and

is also regulated by the Dubai Financial Services Authority as a Representative Office; in Australia by Neuberger Berman Australia Pty Ltd (ACN 146 033 801, AFS Licence No. 391401), which is licensed and regulated by the

Australian Securities and Investments Commission to deal in, and to provide financial product advice for, certain financial products to wholesale clients; in Hong Kong by Neuberger Berman Asia Limited, which is licensed and

regulated by the Hong Kong Securities and Futures Commission; in Singapore by Neuberger Berman Singapore Pte. Limited (Company No. 200821844K),which currently carries out the regulated activity of fund management under

the Securities and Futures Act (Chapter 289) (“SFA”) and operates as an Exempt Financial Adviser under section 23(1)(d) of the Financial Advisers Act (Chapter 110) (“FAA”) of Singapore. Under the FAA, NB Singapore is exempted

from Sections 25, 27 and 36 of the FAA, where its financial advisory service is provided to an accredited or expert investor (as defined in Section 4A of the SFA); in Taiwan to specific professional investors or financial institutions for

internal use only by Neuberger Berman Taiwan Limited, which is licensed and regulated by the Financial Services Commission (“FSC”) and a separate entity and independently operated business, with FSC operating license

no.:(102) FSC SICE no.011, and address at: 10F, No. 1, Songzhi Road, Taipei, Telephone number: (02) 87268280; and in Japan and Korea by Neuberger Berman East Asia Limited, which is authorized and regulated by the

Financial Services Agency of Japan and the Financial Services Commission of Republic of Korea, respectively (please visit http://www.nb.com/japan/risk_eng.html for additional disclosure items required under the Financial

Instruments and Exchange Act of Japan). Except for the foregoing, this material is not intended for use or distribution within or aimed at the residents of any other country or jurisdiction. This document is not an advertisement and is

not intended for public use or additional distribution in the following jurisdictions: Brunei, Thailand, Malaysia and China.

This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-

related course of action. Neuberger Berman is not providing this material in a fiduciary capacity and has a financial interest in the sale of its products and services. Investment decisions and the appropriateness of this material

should be made based on an investor's individual objectives and circumstances and in consultation with his or her advisors. This material may not be used for any investment decision in respect of any U.S. private sector retirement

account unless the recipient is a fiduciary that is a U.S. registered investment adviser, a U.S. registered broker-dealer, a bank regulated by the United States or any State, an insurance company licensed by more than one State to

manage the assets of employee benefit plans subject to ERISA (and together with plans subject to Section 4975 of the Internal Revenue Code, “Plans”), or, if subject to Title I of ERISA, a fiduciary with at least $50 million of client

assets under management and control, and in all cases financially sophisticated, capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies. This

means that “retail” retirement investors are expected to engage the services of an advisor in evaluating this material for any investment decision. If your understanding is different, we ask that you inform us immediately.

This material is being issued on a limited basis through various global subsidiaries and affiliates of Neuberger Berman Group LLC. Please visit http://www.nb.com/disclosure-global-communications for the specific entities and

jurisdictional limitations and restrictions.

Neuberger Berman Investment Advisers LLC is a registered investment adviser.

The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC.

© 2018 Neuberger Berman Group LLC. All rights reserved.

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http://”http/www.nb.com/disclosure-global-communications”


This document is addressed to professional clients only.

This document is a financial promotion and is issued by Neuberger Berman Europe Limited, which is authorised and regulated by the Financial Conduct Authority and is registered in England and Wales, at Lansdowne House, 57

Berkeley Square, London, W1J 6ER and is also a Registered Investment Adviser with the Securities and Exchange Commission in the U.S. and regulated by the Dubai Financial Services Authority.

This document is presented solely for information purposes and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security.

We do not represent that this information, including any third party information, is complete and it should not be relied upon as such.

No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. Each recipient of this document should make such investigations as it deems necessary to arrive at an

independent evaluation of any investment, and should consult its own legal counsel and financial, actuarial, accounting, regulatory and tax advisers to evaluate any such investment.

It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable.

Any views or opinions expressed may not reflect those of the firm as a whole.

All information is current as of the date of this material and is subject to change without notice.

The product described in this document may only be offered for sale or sold in jurisdictions in which or to persons to which such an offer or sale is permitted. The product can only be promoted if such promotion is made in

compliance with the applicable jurisdictional rules and regulations.

Indices are unmanaged and not available for direct investment.

An investment in this product involves risks, with the potential for above average risk, and is only suitable for people who are in a position to take such risks.

Past performance is not a reliable indicator of current or future results. The value of investments may go down as well as up and investors may not get back any of the amount invested. The performance data does not take account

of the commissions and costs incurred on the issue and redemption of units.

The value of investments designated in another currency may rise and fall due to exchange rate fluctuations in respect of the relevant currencies. Adverse movements in currency exchange rates can result in a decrease in return and

a loss of capital.

Tax treatment depends on the individual circumstances of each investor and may be subject to change, investors are therefore recommended to seek independent tax advice.

Investment in this strategy should not constitute a substantial proportion of an investor’s portfolio and may not be appropriate for all investors. Diversification and asset class allocation do not guarantee profit or protect against loss.

No part of this document may be reproduced in any manner without prior written permission of Neuberger Berman Europe Limited.

The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC.

© 2018 Neuberger Berman Group LLC. All rights reserved.

Disclaimer

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