Newfound Research was founded in 2008 based on the premise of capital preservation for investors. The company believes in portfolio processes that are simple, consistent, and thoughtfully designed, with managing risk being paramount. Newfound Research focuses on defensive, simple, consistent, and thoughtful investment philosophies and strategies. The documents provides an overview of Newfound Research's investment philosophy and approach to risk management. It also discusses concepts like asset bubbles, bond valuations, equity valuations, and the benefits of diversification in periods of low expected future returns for traditional stock and bond portfolios.

1. NEWFOUND
RESEARCH
1
Newfound Case #4582249
DEFENSIVE | SIMPLE | CONSISTENT | THOUGHTFUL
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

2. In August 2008, Newfound Research was founded based on a simple, but powerful, premise: investors
care deeply about capital preservation.
We believe in portfolio processes that are simple, consistent, and thoughtfully designed.
Most of all, we believe that managing risk is paramount to potentially achieving superior risk-adjusted
returns*.
Volatility happens. Have a plan with Newfound Research.
OUR INVESTMENT PHILOSOPHY
DEFENSIVE | SIMPLE | CONSISTENT | THOUGHTFUL
2
Defensive Simple Consistent Thoughtful
We view risk management
from the investor’s point of
view, seeking to participate in
bull markets and avoid large
losses during bear markets.
Volatility will happen: it is the
price of admission to the
financial markets. We believe
investors need a thoughtful
plan to deal with this volatility
before it happens.
We believe that each strategy
should seek to adhere to a
simple investment objective,
providing transparency both
in expected outcome and
process. Our research
shows that simple processes
are more robust to
uncertainty than complicated
processes – an important
factor in delivering consistent
and repeatable results.
To meet a simple objective, a
strategy must be governed
by a guiding policy. At
Newfound, we believe that
the best way to ensure
consistency in our process is
through a quantitatively-
enabled, rule-based
approach, which can help
mitigate the behavioral
biases that often compound
into investment errors.
At Newfound, we recognize
the clear distinction between
the quantitative models that
generate our investment
signals and the rules we use
to translate those signals into
portfolios. We believe that it
is with these rules – the
design of the portfolio – that
we seek to achieve our
objective and manage model
risk.
There is no guarantee that any investment strategy will achieve its objectives.
* Risk-adjusted returns is a measure to find out how much return an investment will provide given the level of risk associated with it.
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

3. Asset Bubbles
What are they?
Asset Bubble: When an asset trades at a price that significantly deviates from
its intrinsic value.
Asset bubbles are often difficult to observe in real-time (after all, if they weren’t it
would be easy to avoid them) and are instead observed in retrospect after
prices crash.
Examples:
- 1600s: Tulipmania (single tulip sells for $60,000 in today’s dollars!)
- 1700s: South Sea bubble, Mississippi Bubble
- 1900s: Great Depression (NYC real estate prices down 67% in one quarter), Japan
- 2000s: Dot-com bubble (NASDAQ up 671% from Dec. 1994 to Mar. 2000, subsequently lost 78%,
didn’t recover untilApril 2015), Real estate / global financial crisis
3
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

4. Asset Bubbles
What are their impact?
At their core, asset bubbles lead to depressed future returns. Oftentimes, this is
because the bubble pops.
4
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
Growth of $1 after all-time high
Emerging Markets
Return: -3.4%
Volatility: 37.9%
Technology
Return: -1.2%
Volatility: 27.9%
Financials
Return: -3.2%
Volatility: 42.0%
Mortgage REITs
Return: -6.3%
Volatility: 31.3%
Private Equity
Return: -5.1%
Volatility: 36.4%
Emerging Markets represented by EEM and data is from October 2007 to April 2016. Financials represented by XLF and data is from June 2007 to April 2016. Private
Equity represented by PSP and data is from June 2007 to April 2016. Mortgage REITs represented by REM and data is from June 2007 to April 2016. Technology
represented by XLK and data is from March 2000 to April 2016. Returns i nclude the reinvestment of dividends. Source: Yahoo! Finance. Calculations by Newfound
Research. Past performance does not guarantee future results.

5. 5
Takeaway:
Bubbles compress future asset
returns.
“What the wise do in the
beginning, fools do in the end”
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

6. 0
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10-Year Constant Maturity Treasury Rate
Are Bonds in a Bubble?
Historical Bond Yields (Prices)
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FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
March 2016: 1.89%
Full Period Average:
5.97%
All-Time Low: 1.53%
Rates certainly remain near all-time lows and well below long-term averages.
Source: Federal Reserve Economic Data from the St. Louis Federal Reserve.

7. Nominal (including inflation) GDP growth is a good rough proxy for interest rate
“fair value.”
Why?
- If the economy returns a rate higher than prevailing interest rates, then it
makes sense for businesses to borrow and expand. This is a positive return
proposition since returns are higher than borrowing costs. More demand for
credit should eventually increase interest rates.
- If the economy returns a rate lower than prevailing interest rates, then
borrowing to invest is a losing proposition. Credit demand will fall and the
cost of borrowing (interest rates) will decline.
Are Bonds in a Bubble?
Model for Bond Fair Value
7
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

8. Bonds look to be moderately overvalued relative to nominal GDP growth.
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
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Economic Growth vs. Interest Rates
YOY Nominal GDP Growth 10-Year Constant Maturity Treasury Rate
Are Bonds in a Bubble?
Model for Bond Fair Value
8
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
Dec. 2015
10-Year Rate: 2.2%
GDP Growth: 3.1%
Source: Federal Reserve Economic Data from the St. Louis Federal Reserve. Calculations by Newfound Research.

9. 9
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%
HypotheticalReturnon10-YearConstantMaturity
TreasuryIndex
Increase in 10-Year Interest Rates Over the Next Year
Are Bonds in a Bubble?
Probably Not in The Traditional Sense
Increase to “Fair Value” in next year would lead to -7.7%.
Rates would need to increase to above 6.5% for 30% loss.
Data Source: Federal Reserve Economic Data from the St. Louis Federal Reserve. Calculations by Newfo und Research. Assumes hypothetical 10-year Treasury bond
that pays interest annually and that the rate increase occurs in year one of the bond’s life. Numbers include the benefit from the interest payment in year one.

10. Interest Rates vs. Forward Bond Returns
But Perhaps a Bubble can be Painful Without Popping
10
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1953
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2007
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2010
2011
2013
2014
10-Year Constant Maturity U.S. Treasury Index
(1953 to 2016)
Starting 10-Year Yield Subsequent10-Year Return
Correlation = 0.93
Data Source: Federal Reserve Economic Data from the St. Louis Federal Reserve. Calculations by Newfound Research. Assumes hypothetical constant maturity 10-
year Treasury bond i ndex that is rolled over every month. Retur ns include the reinvestment of interest. Index returns are hypothetical and do not reflect fees or
transaction costs. Past performance does not guarantee future results.

11. 11
Takeaway:
Bonds don’t need to “pop” to
disappoint.
“You don’t need to be a rocket
scientist. Investing is not a
game where the guy with the
160 IQ beats the guy with 130
IQ.”
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

12. -5%
0%
5%
10%
15%
20%
25%
1953.01
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1955.07
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1981.10
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1985.07
1986.10
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1990.07
1991.10
1993.01
1994.04
1995.07
1996.10
1998.01
1999.04
2000.07
2001.10
2003.01
2004.04
2005.07
2006.10
2008.01
2009.04
2010.07
2011.10
2013.01
2014.04
2015.07
U.S. Equities (1953 to 2015)
U.S. Equities Earnings Yield Subsequent10-Year Return
What About Equities?
Earnings Yield vs. Future Equity Returns
12
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
Correlation = 0.72
Data Source: Shiller data library (http://www.econ.yale.ed u/~shiller/data.htm). Calculations by Newfound Research. Earnings yield calculated as equity market earnings
dividend by price. Index returns are hypothetical and do not reflect fees or transaction costs. Past performance does not guarantee future results.

13. Nowhere to Hide?
U.S. Stocks and Bonds Both Historically Overvalued
13
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
Stocks overvalued
Bonds overvalued
Stocks undervalued
Bonds overvalued
Stocks overvalued
Bonds undervalued
Stocks undervalued
Bonds undervalued
1999 to 2009
0.6% per year after
inflation
1981 to 1991
10.5% per year after
inflation
2015
Data Source: Shiller data library (http://www.econ.yale.ed u/~shiller/data.htm) and Federal Reserve of St. Louis. Calculations by Newfound Research. Data for the period
from 1953 to 2015. Cyclically Adjusted P/E Ratio is a version of the P/E ratio that averages earnings over the prior ten years. The 50/ 50 portfolio is a hypothetical index
that is rebalanced annually. Index returns are hypothetical and do not reflect fees or transaction costs. Past performance does not guarantee future results.
Colors representforward 10-year
return on a 50/50 stock/bond
portfolio. Darker orange
indicates lower returns and
darker green indicates higher
returns.
-
5
10
15
20
25
30
35
40
45
50
0% 2% 4% 6% 8% 10% 12% 14% 16%
CyclicallyAdjustedP/ERatio
10-Year Treasury Rate

14. Nowhere to Hide?
U.S. Stocks and Bonds Both Historically Overvalued
14
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
Expected Returns from
ResearchAffiliates
U.S. Large Cap
Stocks
U.S. Core Bonds
60/40 U.S.
Stock/Bond Portfolio
Yield 2.2% 0.8% 1.6%
Growth 1.3% 0.8%
Roll Return 0.7% 0.3%
Credit Loss -0.3% -0.1%
Valuation -2.2% -0.4% -1.5%
FX 0.0%
10 Yr. Expected Real
Return 1.3% 0.8% 1.1%
Source: Research Affiliates. Data as of 3/31/16. Expected returns are calculated by Research Affiliates using data from MSCI, Bloomberg, and Barclays. These
forecasts are forward looking statements based upon the reasonable beliefs of Research Affiliates and are not a guarantee of future performance. This content is not
investment or tax advice.

15. 15
Takeaway:
Value matters.
“Price is what you pay; value is
what you get.”
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

16. Nowhere to Hide?
Expand Your Horizons, Especially With High Income
16
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10-Year Expected Real Returns from Research Affiliates
Source: Research Affiliates. Data as of 3/31/16. Expected returns are calculated by Research Affiliates using data from MSCI, Bloomberg, and Barclays. These
forecasts are forward looking statements based upon the reasonable beliefs of Research Affiliates and are not a guarantee of future performance. This content is not
investment or tax advice.

17. Nowhere to Hide?
Expand Your Horizons, Especially With High Income
17
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
Expected Returns from Research
Affiliates
60/40 U.S. Stock/Bond
Portfolio
Diversified
Yield 1.6% 2.3%
Growth 0.8% 0.2%
Roll Return 0.3% 0.6%
Credit Loss -0.1% -0.5%
Valuation -1.5% -0.5%
FX 0.0% 0.5%
10 Yr. Expected Real Return 1.1% 2.7%
Source: Research Affiliates. Data as of 3/31/16. Expected returns are calculated by Research Affiliates using data from MSCI, Bloomberg, and Barclays. These
forecasts are forward looking statements based upon the reasonable beliefs of Research Affiliates and are not a guarantee of future performance. This content is not
investment or tax advice. The diversified portfolio consists of a 12.5% allocation to U.S. large-cap equities, a 7.5% allocation to EAFE equities, a 5% allocation to EM
equities, a 5% allocation to long-term Treasuries, a 10% allocation to U.S. core fixed income, a 10% allocation to global core fixed
income, a 5% allocation to REITs, a 5% allocation to U.S. TIPS, a 10% allocation to high yield, a 10% allocation to
USD EM bonds, a 10% allocation to local currency EM bonds, and a 10% allocation to bank loans.

18. 18
Takeaway:
Opportunity exists globally and
in high income asset classes.
“You can get in a whole lot more
trouble in investing with a
sound premise than with a false
premise.”
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

19. This document (including the hypothetical/backtested performance results) is provided for informational purposes only and is subject to revision.
This document is not an offer to sell or a solicitation of an offer to purchase an interest or shares (“Interests”) in any pooled vehicle. Newfound
does not assume any obligation or duty to update or otherwise revise information set forth herein. This document is not to be reproduced or
transmitted, in whole or in part, to other third parties, without the prior consent of Newfound.
Certain information contained in this presentation constitutes “forward-looking statements,” which can be identified by the use of forward-looking
terminology such as “may,” “will,” “should,” “expect,”“anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives
thereof or other variations or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance
of an investment managed using any of the investment strategies or styles described in this document may differ materially fromthose reflected
in such forward-looking statements or in the hypothetical/backtested results included in this presentation. The information in this presentation is
made available on an “as is,” without representation or warranty basis.
There can be no assurance that any investment strategy or style will achieve any level of performance, and investment results may vary
substantially from year to year or even from month to month. An investor could lose all or substantially all of his or her investment. Both the use of
a single adviser and the focus on a single investment strategy could result in the lack of diversification and consequently, higher risk. The
information herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations.
You should consult your investment adviser, tax, legal, accounting or other advisors about the matters discussed herein. These materials
represent an assessment of the market environment at specific points in time and are intended neither to be a guarantee of future events nor as a
primary basis for investment decisions. The hypothetical/backtested performance results and model performance results should not be
construed as advice meeting the particular needs of any investor. Past performance (whether actual, hypothetical/backtested or model
performance) is not indicative of future performance and investments in equity securities do present risk of loss. The ability to replicate the
hypothetical or model performance results in actual trading could be affected by market or economic conditions, among other things.
Investors should understand that while performance results may show a general rising trend at times, there is no assurance that any such trends
will continue. If such trends are broken, then investors may experience real losses. No representation is being made that any account will achieve
performance results similar to those shown in this presentation. In fact, there may be substantial differences between backtested performance
results and the actual results subsequently achieved by any particular investment program. There are other factors related to the markets in
general or to the implementation of any specific investment program which have not been fully accounted for in the preparation of the
hypothetical/backtested performance results, all of which may adversely affect actual portfolio management results. The information included in
this presentation reflects the different assumptions, views and analytical methods of Newfound as of the date of this presentation.
19
Disclosures
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

20. Performance during the backtested period is not based on live results produced by an investor’s actual investing and trading, but was achieved
by the retroactive application of a model designed with the benefit of hindsight, and is not based on live results produced by an investor’s
investment and trading, and fees, expenses, transaction costs, commissions, penalties or taxes have not been netted from the gross
performance results except as is otherwise described in this presentation. The performance results include reinvestment of dividends, capital
gains and other earnings. As the information was backtested, it does not reflect contemporaneous advice or record keeping by an investment
adviser. Actual, live client results may have materially differed from the presented performance results.
The Hypothetical Information and model performance assume full investment, whereas actual accounts and funds managed by an adviser would
most likely have a positive cash position. Had the Hypothetical Information or model performance included the cash position, the information
would have been different and generally may have been lower. While Newfound believes the outside data sources cited to be credible, it has not
independently verified the accuracy of any of their inputs or calculations and, therefore, does not warranty the accuracy of any third-party
sources or information.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a
loss. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given
level of income.
These materials represent an assessmentof the market environment at specific points in time and are intended neither to be a guarantee of
future events nor as a primary basis for investment decisions. The performance results should not be construed as advice meeting the particular
needs of any investor. Neither the information presented nor any opinion expressed herein constitutes a solicitation for the purchase or sale of
any security. Past performance is not indicative of future performance and investments in equity securities do present risk of loss. Newfound
Research LLC’s results are historical and their ability to repeat could be affected by material market or economic conditions, among other things.
This document contains the opinions of the managers and such opinions are subject to change without notice. This document has been
distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security,
strategy or investment product. This document does not reflect the actual performance results of any Newfound investment strategy or index.
The investment strategies and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and
financial situation.
No part of this document may be reproduced in any form, or referred to in any other publication, without express written permission from
Newfound Research.
© Newfound Research LLC, 2016. All rights reserved.
20
Disclosures
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.