Wealth Outlook 2024 - Slow then grow

Disclosures 143 Bond rating equivalence Alpha and/or numeric symbols used to give indications of relative credit quality. In the municipal market, these designations are published by the rating services. Internal ratings are also used by other market participants to indicate credit quality. Bond credit quality ratings Rating agencies Credit risk Moody's¹ ¹ The ratings from Aa to Ca by Moody's may be modified by the addition of a 1, 2, or 3 to show relative standing within the category. Standard & Poor's² Fitch Ratings² ² The ratings from AA to CC by Standard and Poor's and Fitch ratings may be modified by the addition of a plus or a minus to show relative standing within the category Investment grade Highest quality Aaa AAA AAA High quality (very strong) Aa AA AA Upper medium grade (strong) A A A Medium grade Baa BBB BBB Not investment grade Lower medium grade (somewhat speculative) Ba BB BB Low grade (speculative) B B B Poor quality (may default) Caa CCC CCC Most speculative Ca CC CC No interest being paid or bankruptcy petition filed C D C In default C D D Bonds are affected by a number of risks, including fluc- tuations in interest rates, credit risk and prepayment risk. In general, as prevailing interest rates rise, fixed income securities prices will fall. Bonds face credit risk if a decline in an issuer’s credit rating, or creditworthiness, causes a bond’s price to decline. High yield bonds are subject to additional risks such as increased risk of default and greater volatility because of the lower credit quality of the issues. Finally, bonds can be subject to prepayment risk. When interest rates fall, an issuer may choose to borrow money at a lower interest rate, while paying off its previ- ously issued bonds. As a consequence, underlying bonds will lose the interest payments from the investment and will be forced to reinvest in a market where prevailing in- terest rates are lower than when the initial investment was made. (MLP’s) - Energy Related MLPs May Exhibit High Volatility. While not historically very volatile, in certain market envi- ronments Energy RelatedMLPSmay exhibit high volatility. Changes in Regulatory or Tax Treatment of Energy Relat- ed MLPs. If the IRS changes the current tax treatment of the master limited partnerships included in the Basket of Energy Related MLPs thereby subjecting them to higher rates of taxation, or if other regulatory authorities enact regulations which negatively affect the ability of themas- ter limited partnerships to generate income or distribute dividends to holders of common units, the return on the Notes, if any, could be dramatically reduced. Investment in a basket of Energy Related MLPs may expose the in- vestor to concentration risk due to industry, geographi- cal, political, and regulatory concentration. Mortgage-backed securities ("MBS"), which include collateralized mortgage obligations ("CMOs"), also re- ferred to as real estate mortgage investment conduits ("REMICs"), may not be suitable for all investors. There is Wealth Outlook 2024