PUBLIC SECURITIES GROUP I | FEBRUARY 2018 | REAL...

Real Assets QuarterlyPUBLIC SECURITIES GROUPI | FEBRUARY 2018 | REAL ASSETS

We begin 2018 with an important milestone for the Public Securities Group. On February 2, 2018, we completed the acquisition of Center Coast Capital Holdings Inc. (CCC), an industry-leading, Houston-based investment advisor to energy infrastructure portfolios. This transaction will meaningfully diversify our product lineup in midstream energy infrastructure, while also adding depth and breadth to our investment and research capabilities. We are pleased to align ourselves with such a talented team of investment professionals—one that shares many of our investment philosophies, most notably Brookfield’s “owner/operator” mentality for investing in real assets.

Along with our regular quarterly insights on the global universe of listed real assets, our new energy infrastructure team will for the first time share their expertise as a regular contributor to the Real Assets Quarterly. As a Special Feature, we offer some very preliminary thoughts on the potential winners and losers of the Tax Cuts and Jobs Act of 2017 as it pertains to the listed real asset classes in our investing universe.

1

Macroeconomic and Market Overview

Across developed market economies, the European recovery witnessed the strongest acceleration in recent quarters, with economic and policy surprise indexes in Europe generally outpacing those in Asia and the Americas over the last 12 months.

A Y E A R F O R T H E R E C O R D B O O K S

The MSCI World and S&P 500 Indexes advanced to record highs in 2017 as accommodative policy, strong corporate earnings, accelerating economic growth and abundant investor optimism drove capital markets higher. This was the first year in the history of capital markets when total returns were positive in every calendar month for the MSCI World Index (back to 1970) and the S&P 500 Index (back to 1928). Meanwhile, oil prices rose, the U.S. dollar fell and volatility hovered near historic lows for most of the year.

Global real assets also performed well during the year. With the exception of MLPs, all real asset sectors delivered positive performance. Global real estate, infrastructure and natural resource indexes all posted double-digit returns; however, none managed to outpace global equities more broadly (as shown in Exhibit 1). Real asset high-yield and investment grade debt also posted strong returns and performed on par with their respective broad market high-yield and investment-grade indexes.

All real asset sectors, apart from Master Limited Partnerships ("MLPs") and U.S. REITs, posted gains for the fourth quarter. Global natural resource equities was the only sector to outperform global equities. Real asset investment-grade debt outperformed broad market investment grade, while real asset high-yield debt performed on par with broad market high-yield debt.

S Y N C H R O N I Z E D G L O B A L G R O W T H

The current economic global growth cycle has continued longer than many have expected, and is remarkably synchronized across the globe. Global sentiment indicators reflect optimistic expectations, with most survey data at or near cycle highs. Adding to this optimism, the U.S. Tax Cuts and Jobs Act of 2017—which lowers federal tax rates for U.S. companies and individuals—was signed into law in the final days of December. Further on in this report, we will take a closer look at the implications of this legislation as it pertains to the real asset classes in our investing universe.

Source: Bloomberg, ICE BofA ML, S&P, FTSE and MSCI as of December 31, 2017. Brookfield has no direct role in the management of the Dow Jones Brookfield Global Infrastructure Index. The quoted benchmarks within this report do not reflect deductions for fees, expenses or taxes. These benchmarks are unmanaged and cannot be purchased directly by investors. Benchmark performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison such as differences in the volatility, and regulatory and legal restrictions between the indexes shown and an actively managed investment strategy. See index definitions at the end of this report. Past performance does not guarantee results. Index performance is not indicative of fund performance. To obtain fund performance call 1-855-777-8001 or visit our website, www.Brookfield.com.

E X H I B I T 1 : T O T A L R E T U R N S U M M A R Y A S O F 1 2 / 3 1 / 1 7GLOBAL REAL ESTATE QTD % YTD %

FTSE EPRA / NAREIT Developed Index 3.83 11.42

MSCI U.S. REIT Index -0.21 1.41

BofA Merrill Lynch Preferred Stock REITs 7% Constrained Index 1.44 12.59

GLOBAL INFRASTRUCTURE

Dow Jones Brookfield Global Infrastructure Index 0.51 15.79

FTSE Global Core Infrastructure 50/50 Index 1.94 19.32

Alerian MLP Index -0.95 -6.52

S&P 500 Utilities Index 0.21 12.11

NATURAL RESOURCES

S&P Global Natural Resources Index 8.59 22.66

Bloomberg Commodities Index 4.71 1.70

REAL ASSETS/ REAL RETURN INDEXES

BofA Merrill Lynch Real Asset High Yield Custom Index 0.57 10.13

BofA Merrill Lynch Real Asset Corporate & High Yield Custom Index 0.93 10.13

S&P Real Assets Total Return Index 2.92 11.16

Bloomberg Barclays U.S. Treasury Inflation Notes Index 1.26 3.01

BROAD MARKET BENCHMARKS

MSCI World Index 5.62 23.07

S&P 500 Index 6.64 21.83

Bloomberg Barclays Global Aggregate Bond Index 1.08 7.39

ICE BofA Merrill Lynch Global High Yield Index 0.77 10.20

ICE BofA Merrill Lynch Global Corporate Index 1.44 9.26

REAL ASSETS QUARTERLY 2

The acceleration of growth and sentiment in capital markets are further indications in our view of just how late we are in the current economic cycle. Consistent with this late stage we should expect to see increased prevalence of late cycle markers, namely inflation, more hawkish monetary policy and rising real interest rates, along with signs of excess in financial markets.

We began 2018 with near full employment in the U.S., as the U-3ii unemployment rate hit at 4.1%, not far from the 3.8% record low seen in 2000. Current forecasts call for the U.S. unemployment rate to move even lower by year end,iii beyond the level of what has traditionally marked “full employment.” To date, wage inflation has remained modest; however, we expect gradual improvement in wage pressure as the employment market tightens further.

While the level of inflation is expected to rise slowly—with core PCEiv inflation in the U.S. expected to reach 2% in 2018—we see an increasing probability that tightening labor markets and tightening commodity markets will lead to more volatility in inflation expectations. In fact, this change in inflation expectations is already occurring. Consider the recent rise of the

U.S. 10-year break-even inflation rate,v a metric which captures market expectations of average inflation over the next 10 years. As shown in Exhibit 2, this indicator has risen from a low of under 1.7% in mid-June 2017 to 2.0% at year end. We believe that increased volatility in inflation expectations should drive increased volatility in the valuation of long-term cash flows, including U.S. Treasuries, credit and even equites.

Central banks have already begun to respond to the tightening labor markets. The Federal Reserve has continued on their path to raise policy rates, and the ECB and BOJ are also expected to shift toward less accommodative policies. The global shift toward incrementally more hawkish policy has already reverberated through the front end of global fixed-income markets. Following a period of stability early in the 4th quarter, the 3-month Libor rate rose rapidly into year end, closing 2017 at 1.7%—nearly 40 basis points higher than at the beginning of the quarter.

In our view, longer-term yields in the U.S. are likely to drift higher. While we expect the rise in interest rates to move fairly slowly in the U.S., room for upward surprises in long-term interest rates is perhaps most likely in

Our Outlook for Markets and the Global Economy

E X H I B I T 2 : T H E U . S . B R E A K - E V E N I N F L AT I O N R AT E H A S M O V E D H I G H E R

1.50

1.75

2.00

2.25

2.50

Jan 31,2017

Feb 28,2017

Mar 31,2017

Apr 30,2017

May 31,2017

Jun 30,2017

Jul 31,2017

Aug 31,2017

Sep 30,2017

Oct 31,2017

Nov 30,2017

Dec 31,2017

Source: Bloomberg as of December 31, 2017.


Germany, where growth remains robust and inflation expectations are on the rise, but 10-year bund yields remain near historical lows (closing the year at 1.32%).

Across risk assets, improvements in economic outlook and performance have been matched or exceeded by increases in expectations, driving valuations higher and thus leaving little room for error.

Credit markets look particularly vulnerable to a rising rate environment or a decline in fundamental credit performance, since we are entering 2018 with credit spreads near post-crisis lows. We could see weakness in highly leveraged credit as a result of the recent tax legislation, which caps deductibility of interest expense at 30% of EBITDA (earnings before interest, taxes, depreciation and amortization). Additionally, though faced with marginally less interest-rate risk amid rising rates than Treasury markets, credit markets are likely to face investor outflows as interest rates move higher.

Meanwhile, positive earnings trends in global equity markets have led to lofty earnings expectations. As shown in Exhibit 3, earnings estimates for the S&P 500 Index over the next few years are calling for growth of 11 to 12%, despite 0% growth in 2016 and a decline of 3% in 2015.

Valuations are also full in Europe, where high earnings growth is forecast for the Eurostoxx Index. These high expectations leave equities vulnerable to rate increases, particularly in the EU where rates have the potential to post relatively large year-over-year changes, given the low starting point of today’s yields.

As for global energy markets, we expect that the coordinated acceleration in global growth and OPEC solidarity will continue to constrain supply and put an upward bias on prices. The ever-present potential for geopolitical conflict could lead to sharper moves higher during the year (although this is not our base- case expectation).

E X H I B I T 3 : S & P 5 0 0 I N D E X A C T U A L E A R N I N G S V S . F O R W A R D E A R N I N G S E S T I M AT E S

Source: Bloomberg as of December 31, 2017. (a) S&P 500 Index forward earnings represented by earnings estimates for the next 12 months. The quoted index does not reflect deductions for fees, expenses or taxes. The index is unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison such as differences in the volatility, and regulatory and legal restrictions between the indexes shown and an actively managed investment strategy. See index definitions at the end of this report. Past performance does not guarantee results. Index performance is not indicative of fund performance. To obtain fund performance call 1-855-777-8001 or visit our website, www.Brookfield.com. Forward earnings is not a measure of the Funds' future performance.

160

140

120

100

802/4/20199/22/20175/10/201612/27/20148/14/20134/1/2012

SPX Actual Earnings S&P 500 Index Forward Earnings (a)


The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) is perhaps the most comprehensive tax overhaul in more than 30 years. For corporations, significant provisions include (i) a reduction in corporate tax rates from a current maximum 35% to a flat rate of 21%, (ii) the elimination of the corporate alternative minimum tax, (iii) full and immediate expensing of short-lived capital investments for the next six years, and (iv) a reduced tax rate on accumulated foreign earnings that are repatriated. These corporate incentives are designed to boost near-term economic growth.

For individuals, the most significant provisions are (i) to reduce tax rates, (ii) reduce the number of marginal tax brackets, and (iii) place a new cap on the deductibility of state and local taxes (SALT). These provisions will likely lead to higher disposable incomes for most taxpayers. However, for high earners in markets with high income taxes and high property taxes—notably California, New York, New Jersey and Connecticut, along with the DC/Maryland/Virginia area — the SALT provisions will likely result in lower disposable income. Higher aggregate disposable income may boost spending and near-term economic growth.

We expect that companies issuing real asset equity and debt securities will generally benefit from changes in both corporate and individual taxation. While the details are yet to come on some provisions, we highlight below some very preliminary thoughts on how real estate equities, infrastructure equities and real-asset-related debt securities might be affected.

Real Estate Equities. Most U.S. real estate companies are structured as REITs and pay little or no corporate tax. We expect the Tax Act will treat REITs as pass-through entities, resulting in dividends taxed at the pass-through rate, rather than the individual tax rate. This will be beneficial to taxable REIT investors, as it lowers the maximum taxable rate from 39.6% to 29.6%.

For real estate companies subject to corporate taxes, the reduced corporate rate will likely be particularly beneficial for companies with high effective tax rates, including homebuilders. Landlords may see increased demand across all property types driven by improved corporate earnings and greater disposable income. In particular, retail landlords may benefit from increased consumer spending and hotel owners may benefit from increased business and leisure travel.

Infrastructure Equities. While lower corporate taxes are generally favorable for U.S. infrastructure equities, there were concerns in the earlier stages of Congressional negotiations about which tax credits might be eliminated to offset the rate cut.

For example, renewable energy assets were initially threatened due to changes in the investment tax credit (ITC), production tax credit (PTC) and Base Erosion Anti-Abuse Tax (BEAT) provisions, but were ultimately left unchanged.

The tax implications appear neutral for pure regulated utility operators. Here, the corporate tax rate cut gets passed through to rate-payers and should serve to lower rate-payers’ bills. Lower customer rates then may provide more “headroom” for utilities to invest in their operations. As a result, we expect that lower taxes will lead to higher rate-base growth and higher utility earnings. But at the same time, these utilities are exempt from the provision of “bonus” depreciation, a form of accelerated depreciation that allows for lower cash-tax expense, and therefore more rapid cash flow growth. This elimination will likely pressure utility cash flows and may result in pressure on credit metrics, leading to more equity required to finance capex than might have previously been expected.

Energy Infrastructure may see the indirect benefit of lower tax rates for the Exploration & Production companies, which likely stand to improve returns on existing production and could allow for more incremental

Reflections on Real Assets and the Tax Cuts and Jobs Act of 2017 (the “Tax Act”)


production (i.e., higher pipeline volumes from healthier customers), given a fixed commodity price level. Broadly speaking, we expect benefits for most investors of MLPs or MLP investment funds structured as C-Corps from the Tax Act, including the 20% pass-through income deduction and the lowering of the corporate tax rate. MLPs, as tax pass-through entities, are also likely to be indirect beneficiaries of individual tax rate cuts, and for many direct MLP investors, the ultimate tax liability could be reduced by as much as 10%.

Real Asset Debt. Investments in corporate debt, particularly below investment grade, will be subject to several positive and negative provisions of the Tax Act. Companies will likely benefit from the reduction in corporate rates and current-year deductibility of capex for the next six years. Negative provisions include the limitation on the deductibility of interest expense to 30% of EBITDA until 2021, and the limitation on the amount of net operating losses that can be carried forward and applied to offset pre-tax income, which will be limited to 80%. We believe these positive and negative provisions offset each other to varying degrees across industries and companies. Generally, we expect

that companies with higher current tax rates, higher capital expenditures, lower debt loads and lower net operating loss carryforwards will fare well under the new law. A study by J.P. Morgan found that for 75% of high-yield companies, the benefit of a lower corporate tax rate and the ability to depreciate more capex outweigh the inability to fully deduct interest expense.vi The study also found that higher-rated companies are likely to fare better under the new law than lower-rated companies, principally because of the high debt burden at lower-rated companies.

Within the Real Asset Debt universe, we find that communications infrastructure companies may benefit as the immediate deduction of capital expenditures could facilitate network upgrades. Many companies in natural-resource-related sectors may also benefit from the immediate deduction of capital expenditures, including chemicals, metals, mining and refining—all capital-intensive sectors. Within real estate, the health care sector may be negatively impacted by the repeal of the Affordable Care Act’s mandate requiring individuals to purchase health insurance, which could lead to lower utilization.

We believe that global real estate securities are trading near fair value overall. However, there are wide variations in company, sector and regional valuations, which present attractive opportunities for active management.

Below in Exhibit 4, we compare current valuations to historical levels by region, as measured by premium/discount to net asset value (NAV).

Global Real Estate Securities

E X H I B I T 4 : P R E M I U M / D I S CO U N T T O N AV B Y G E O G R A P H Y

Global GlobalDevelopers

Global Investors

U.S. Canada Australia Hong Kong JapanDevelopers

Japanese REITs

Singapore Developers

Singapore REITs

ChinaDevelopers

ContinentalEurope

U.K.-80%

-60%

-40%

-20%

40%

60%

80%

20%

0%

Current Historical 10th to 90th percentile

Historical maximum/minimum

As of December 31, 2017. Represents data beginning January 1990. Valuation dataset duration varies by geography and is dependent on data availability for each individual market. Source: UBS Global Real Estate Research; Brookfield Investment Management research and estimates. Canada data sourced from BMO Capital Markets. Premium/Discount to NAV is a comparison of the trading price to the net asset value of the underlying assets.


On average, the U.S. REIT sector currently trades approximately at NAV. That said, there are large parts of the market trading at meaningful discounts, while a portion of the market still trades at a large premium. These conditions offer solid opportunities for active managers; however, we view the market with a cautious eye given the likelihood for interest rates to move higher from today’s cyclical lows. Our view is that as long as the increases proceed at a gradual pace, REITs should be able to perform well in the face of rising rates—especially if the increases are driven higher by inflation and/or rising economic growth—both of which are good for real estate.

As noted earlier in this report, the forecasts for inflation have been increasing, which has led us to favor companies with shorter lease terms and those trading below NAV. In our view, companies that trade at meaningful premiums to NAV are at risk of a price correction if rates continue to rise, as NAVs will be reduced further should rates move significantly higher without a commensurate pickup in economic activity.

We continue to monitor the supply pipeline in U.S. property markets. While supply growth has been much more limited than in previous cycles, we are concerned about pockets of new supply, particularly in coastal apartments and senior housing.

Two sectors experiencing a shift in long-term cyclical demand are Data Centers and Towers. Both are benefiting from rising demand for data consumption and transmission, which may continue for several more years. We believe this trend will lead to meaningful revenue growth in these sectors, compared with more traditional real estate sectors.

Outside the U.S., we continue to see better values in the U.K. than in Continental Europe. We favor exposure to London office space where we believe the public market discount is widest and where we believe market sentiment has created the greatest opportunity. Our focus is on companies with high-quality management teams and strong balance sheets. In Continental Europe, we believe interest rates have bottomed amid this past year’s pickup in economic growth. Since many companies in this region trade above NAV, a significant rate increase may present a risk to both property and equity values.

In the Asia Pacific region, reflationary government policies in China have served to relax credit standards and housing policies, as well as to increase infrastructure spending. However, there are risks that some of these policies will be reversed, which would likely lead to a slowdown in economic growth. There is also a risk of tightening housing and credit policies which would also put downward pressure on stocks in the region.

We continue to see attractive opportunities in Singapore, where the government has been easing or reversing many measures designed to cool the property market over the last several years. We therefore see the potential for a recovery in the region. In Japan, developers continue to trade at large discounts to NAV. In our view, this discount could narrow with demand now at sufficient levels to support the profitable lease-up of new projects. However, this new supply could have a negative effect on Japanese REITs, still trading at premiums to NAV (even though valuations have improved amid recent underperformance).


Overall, our research shows that the balance sheets and fundamentals of listed infrastructure companies are generally healthy relative to historical levels. From a valuation perspective, listed infrastructure also remains attractive relative to broader equities and fixed

Nevertheless, we believe that our positioning remains slightly defensive, as we focus our efforts more on sectors where we see relatively more attractive valuations. Below we share some highlights on various sectors of our investing universe, of which the most attractive to us is energy infrastructure.

Transmission and distribution utility companies in North America and Europe continue to perform well amid low financing costs and growth rates that are generally healthy. However, valuations appear to be elevated, and investors are paying very high multiples for exposure to these businesses. California—a market where we previously saw regulatory support—is now contending with the potential liabilities from widespread fires, making the region highly uncertain and less attractive for investment.

income. We base our assessment on infrastructure’s wider-than-average yield spreads versus the U.S. 10-Year Treasury and smaller-than-average multiple spreads vs. the S&P 500 Index at the end of 2017. These factors are highlighted in Exhibits 5 and 6 below.

We continue to find value in lower-cost renewables generation, as the economics of developing new solar and wind farms continue to compete with legacy electric generation. Supporting the case for wind energy is the declining levelized cost of production (a project-level net present value per megawatt hour) that is now at or below other forms of power generation. Because of the perception of higher costs necessitating power-price subsidies, wind power has struggled to gain acceptance with infrastructure investors in the past, often trading solely on relative dividend yields instead of more detailed examinations of project and firm values. We witnessed this change in 2017, however, as the group re-rated to higher multiples more in line with better established utilities. Additionally, we have observed other signs of industry acceptance, such as the oversubscribed

E X H I B I T 5 : E V/ E B I T D A : I N F R A S T R U C T U R E L E S S S & P 5 0 0 I N D E X

E X H I B I T 6 : I N F R A S T R U C T U R E D I V I D E N D Y I E L D S V S . U . S . T R E A S U R Y N O T E Y I E L D S

-0.3

0.2

0.7

1.2

1.7

2.2

2.7

3.2

EV/E

BITD

A Sp

read

Spread to S&P Average+1 Standard Deviation -1Standard Deviation

Sep2008

Mar2010

Sep2011

Mar2013

Sep2015

Mar2016

Dec2017

1%

2%

3%

4%

5%

6%

7%

4.53%

2.40%

Historical Average Spread: 209 basis points

Current: 213basis points

Dow Jones Brookfield Global Infrastructure Composite IndexU.S. 10-Year Treasury Yield

Sep2008

Sep2010

Sep2012

Sep2014

Dec2017

Sep2016

Source: Brookfield Investment Management research and estimates; FactSet, S&P Dow Jones Indexes, BofA Merrill Lynch Global Indexes and MSCI Indexes as of December 31, 2017. Median EV/EBITDA based on forward 12-month analysis derived using the constituents of Brookfield Investment Management’s Global Infrastructure Securities Universe. EV/EBITDA multiple is a financial ratio that measures a company's return on investment (ROI). EV (enterprise value) is a company’s market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is the company’s earnings before interest, taxes, depreciation and amortization. Brookfield Investment Management cannot warrant that EV/EBITDA or Yield levels will meet historical percentages shown above. Standard Deviation measures the degree to which an investment’s return varies from its mean return. Yields compare dividends paid from infrastructure equities to the yields of 10-Year U.S. Treasury bonds. The investment objectives of infrastructure equities are income and capital appreciation, while U.S. Treasuries seek income and capital preservation. U.S. Treasury securities are backed by the full faith of the U.S. government, while investments in stocks, such as infrastructure securities involve risk, including the full loss of principal. The tax treatment of dividends paid from infrastructure equities and interest paid on U.S. Treasuries may differ based on the respective holding periods and other factors. Standard deviation is the measure of dispersion of a set of data from its mean.

Global Listed Infrastructure


The past year proved to be challenging for midstream infrastructure companies and MLPs, yet we remain optimistic for 2018 and beyond. Fundamentals improved in 2017, highlighted by record oil & gas production and growing demand for U.S. hydrocarbons (both domestically and abroad). Frustratingly, market performance did not align with this fundamental backdrop, as various corporate finance and technical factors weighed on the sector and anemic fund flows were overwhelmed by new equity.

issuance of 1,000 year bonds for Danish company Orsted. This offering raised $2.4 billion for the company to invest in green energy projects.

Outside of the U.S., U.K. utilities have underperformed amid uncertainties related to Brexit, currency and in some cases, possible nationalization of assets if the labor party gains control of the U.K. government. While these conditions have created more attractive valuations, we continue to monitor regional risks, particularly those regarding regulations.

In the transportation sector, traffic and cash flow growth has been positive for toll roads across the globe. We continue to prefer companies with European exposure, where growth has been steady and political risks are lower. However, we are observing the re-emergence of some risks in the political environment, which we will be monitoring closely in the coming months. We remain optimistic for the prospect of passenger traffic

The result of these two seemingly contradictory forces—improving fundamentals and prolonged underperformance—is an asset class we believe to be trading at attractive valuation levels, especially on a relative basis. As seen in Exhibit 7 below, MLPs’ historical EV/EBITDAviii premium relative to the broader market eroded throughout 2017 to a discounted level not seen since the 2008 financial crisis. Exhibit 8 highlights the growing spread between the distribution yields of MLPs and yields of other income-oriented investments.

in certain markets within Latin America, particularly Mexican toll road operators. The political situation in Mexico, specifically as it pertains to NAFTAvii negotiations, continues to be a risk factor we are monitoring.

Our outlook for the communications sector is unchanged as we continue to see long-term growth prospects. We decreased our exposure during the fourth quarter, however, amid this past year’s very strong performance for U.S. tower companies.

After underperforming for much of the quarter, investor sentiment toward energy turned more positive in the final weeks of the year, and we believe there is considerable room for investor sentiment to catch up with fundamentals. Areas of specific opportunity are addressed below by our new energy infrastructure team that joined Brookfield’s Public Securities Group on February 2, 2018.

Midstream Energy Infrastructure

E X H I B I T 7 : CO M PA R I S O N O F E V/ N T M E B I T D A A L E R I A N M L P I N D E X V S . T H E S & P 5 0 0 I N D E X

E X H I B I T 8 : H I S T O R I C A L D I S T R I B U T I O N Y I E L D S P R E A D S A L E R I A N M L P I N D E X V S . O T H E R A S S E T C L A S S E S (A M Z )

3.5X2.5X1.5X0.5X

-0.5X-1.5X-2.5X-3.5X

0.0X

Dec2009

Dec2010

Dec2011

Dec2012

Dec2013

Dec2014

Dec2015

Dec2016

Dec2017

Avg. since Dec-09: Avg. for 2017: As of 12/31/17:

1.5X(0.5x)(1.2x) -4%

-2%0%2%4%6%8%

10%12%

Dec2009

Dec2010

Dec2011

Dec2012

Dec2013

Dec2014

Dec2015

Dec2016

Dec2017

AMZ-10-Year U.S. Treasuries AMZ-UtilitiesAMZ-High Yield AMZ-Municipal Bonds

Source for both Exhibit 7 and Exhibit 8: Bloomberg and Brookfield as of December 31, 2017. EV/EBITDA multiple is a financial ratio that measures the total value of a company in relation to its operating performance. EBITDA is the company’s earnings before interest, taxes, depreciation and amortization. Brookfield Investment Management cannot warrant that EV/EBITDA or yield levels will meet historical percentages shown above. EV/NTM (NTM=next twelve months) compares the EV calculated by a primary valuation method, such as the discounted cash flow approach, against the target's EBITDA. The quoted indexes do not reflect deductions for fees, expenses or taxes. These indexes are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison such as differences in the volatility, and regulatory and legal restrictions between the indexes shown and an actively managed investment strategy. See index definitions at the end of this report. Past performance does not guarantee results. Index performance is not indicative of fund performance. To obtain fund performance call 1-855-777-8001 or visit our website, www.Brookfield.com.


M I D S T R E A M P O S I T I O N E D T O B E N E F I T F R O M R E C O R D S U P P LY A N D G R O W I N G D E M A N D

Our view of MLP valuations is not the only reason we are bullish heading into 2018. Drawing from our owner-operator perspective and a bottom-up investment process that emphasizes asset-level diligence, we see several reasons to be excited about the long-term sustainable cash flowix growth of midstream energy infrastructure, both from a supply and demand perspective:

Supply: Record and growing production across all hydrocarbons will drive fee-based cash flow across the midstream footprint, based on EIA forecasts.x

■■ U.S. crude oil production, which is currently on par with Saudi Arabian output, is expected to eclipse 10 million barrels of oil per day (mmbbl/d) for the first time early in 2018; meanwhile, the Permian basin alone is approaching the production of Kuwait

■■ U.S. natural gas production leads the world and is expected to have a record daily throughput of 80 billion cubic feet of gas per day (bcf/d) in the first half of 2018

■■ U.S. natural gas liquids (“NGLs”) production continues to lead the world, setting a record of 4.5 mmbbl/d at the end of 2017, led by a ramp up in ethane extraction

Demand: The abundant, low-cost shale resource exploited by U.S. producers has spurred new demand across the product value chain. For example, the shale boom has spurred a significant buildout of export capabilities, most apparent with the U.S.’ first foray into

large-scale liquefied natural gas (“LNG”) export facilities, which when fully operational could have capacity of nearly 10 bcf/day. In addition, the petrochemical industry has undertaken its own significant infrastructure buildout to take advantage of low-cost U.S. ethane, a key feedstock in plastics manufacturing. These plants are expected to have aggregate capacity of almost 800,000 barrels per day once they become operational over the next two-to-three years.xi

While the market pain of 2017 was disappointing, we do believe it ultimately spurred the evolution of the sector into a more disciplined, better-positioned asset class. Many management teams, in response to shifting investor priorities, undertook a variety of measures in 2017 to reduce reliance on the equity capital markets. Overall, we believe midstream equity needs in 2018 will be less than 40% of what they were in 2017.xii In addition, the market accelerated corporate/partnership simplification, and many mature MLPs have now eliminated their incentive distribution rights (“IDRs”) in order to permanently reduce their costs of capital. We believe that these actions, while painful in the short-term (especially when accompanied by a distribution reduction), should position the asset class to be more stable and self-reliant as we move forward.

Looking ahead, we anticipate new records for the production, transportation and consumption of U.S. hydrocarbons, and we believe the MLP asset class is ready to reap these rewards throughout 2018 and beyond.

Throughout most of 2017, strong equity market returns, benign interest rates and strong commodity prices were all positive for real asset debt. We have observed that any global political and markets risks were largely shrugged off by investors, who instead preferred to focus on corporate tax cuts, deregulation in the United States and strong corporate earnings. Earnings were boosted further by the weakening of the dollar after a very strong post-election rally.

Many companies have used the extended economic expansion and low interest rates to access debt markets, especially the loan market, to build cash balances and engage aggressively in mergers and acquisitions, particularly among investment-grade companies. While debt levels are high (approaching and in some cases exceeding the prior cycle peaks), earnings are strong and interest expenses are low, leaving companies easily able to service their debt overall. The refinancing trend of the

Real Asset Debt


past several years by high yield companies continued in 2017, resulting in manageable maturity schedules. As a result, we believe that the outlook for defaults is quite positive, and may serve to extend this credit cycle.

From a valuation perspective, 2017’s nearly perfect environment for fixed income has left markets richly valued at year end, in our view. While the Federal Reserve raised short-term rates three times, long rates did not respond. In this period, a flatter yield curve coupled with very strong corporate earnings proved to be supportive for corporate issues, with the passage of tax cuts putting the “icing on the cake” at year end.

We find it hard to be enthusiastic about investment- grade markets at these levels, given the low quality of the indexes, near-record long duration and tight spreads in an environment where interest rates are rising. On the other hand, we have observed that the spreads of high-yield Corporates, while narrow, continue to reap the benefits of very good credit quality, few debt maturity hammers and low default levels. Despite narrow spreads, the market has seen tighter spreads historically, suggesting that there may be room to absorb any increases in interest rates.

We opened the new year with high-yield spreads at 354 basis points over 10-Year U.S. Treasuries, nearly 100 basis points tighter than at the beginning of 2017, as measured by the ICE BofA Merrill Lynch Global High Yield Index. While spreads are also tight in investment-grade markets, high yield remains more attractive, in our view. Of the three broad real asset segments in our universe, we have a more favorable view of infrastructure, particularly oil and gas distribution and utilities. In real estate, hotel and gaming remain attractive; however, our stance on real estate markets overall is neutral. We view natural resources as the least favorable group, particularly energy exploration & production companies.

That said, we believe that investors should exercise caution at this point, with corporate balance sheets demonstrating classic late cycle behaviors, in our view. With yields low and spreads tight, investors are not being compensated for taking marginal risk. The yield curve has flattened to levels which have been problematic for credit in the past, although typically because of looming recession, which we do not expect. While price appreciation potential is limited, the income opportunity in credit is attractive and will likely comprise the bulk of investor returns in 2018.

E X H I B I T S 9 A N D 10 : CO R P O R AT E S P R E A D S A R E T I G H T I N B O T H H I G H -Y I E L D A N D I N V E S T M E N T- G R A D E M A R K E T S

2,500

2,000

1,500

1,000

500

0Dec

2001Dec

2003Dec

2005Dec

2007Dec

2009Dec

2011Dec

2013Dec

2015Dec

2017

Average:592 Basis Points

Average:140 Basis Points

500

400

300

100

200

0Dec

2001Dec

2003Dec

2005Dec2007

Dec2009

Dec2011

Dec2013

Dec2015

Dec2017

Source: Bloomberg as of December 31, 2017. High-yield corporate bonds represented by the ICE BofA Merrill Lynch Global High Yield Index. Investment Grade Bonds represented by the ICE BofA Merrill Lynch Global Corporate Bond Index. The spread to worst measures the difference from the worst performing security to the best, and can be seen as a measure of dispersion of returns within a given market or between markets. The quoted indexes do not reflect deductions for fees, expenses or taxes. These indexes are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison such as differences in the volatility, and regulatory and legal restrictions between the indexes shown and an actively managed investment strategy. See index definitions at the end of this report. Past performance does not guarantee results. Index performance is not indicative of fund performance. To obtain fund performance call 1-855-777-8001 or visit our website, www.Brookfield.com.

Exhibit 9: Spread-to-Worst: High-Yield Corporate Bonds

Exhibit 10: Spread-to-Worst: Investment-Grade Corporate Bonds


S O M E T H O U G H T S O N T H E I N F L A T I O N S E N S I T I V I T Y O F R E A L A S S E T S

To make informed decisions on asset allocation, we believe investors need to consider how macroeconomic conditions—both current trends and those anticipated in the future—will impact their investment returns. For this reason, inflation protection is an important long-term investment objective, even though today’s rate of inflation is relatively low versus historical measures.

Over the long term, our research has shown that real assets have generally outperformed broader equity and fixed income markets in the face of rising inflation. We illustrate in Exhibit 11 with a study from January 2003 through December 2017, which compares the performance of stocks, bonds and various real asset classes in periods when inflation has come as a surprise. The bar labeled “DRA” is what we call the Diversified Real Assets Index Blend, which combines historical

index returns for a variety of real asset classes—real estate equities, REIT preferred securities, infrastructure equities, MLPs and real asset debt. These are also the asset classes we deem to be strategic allocations when we design multi-sector real asset solutions.

* Brookfield has no role in the composition or the management of the Dow Jones Brookfield Infrastructure Index.

Source: Bloomberg, Brookfield, Bureau of Labor Statistics, Federal Reserve Bank of Philadelphia Survey of Professional Forecasters (SPF), BofA Merrill Lynch as of December 31, 2017. Greater-than/less-than expected inflation is defined as 4-quarter periods during which Seasonally Adjusted CPI-U was greater-than/less-than the trailing 12-month SPF Forecast one year prior. For the period January 1, 2003 through to December 31, 2017, during which there were 26 periods of greater-than-expected Inflation. Indexes represented in the chart correspond to the index key and are defined in the disclosures section at the end of this report. Past performance is not indicative of future results. Brookfield-branded indexes do not reflect any performance data from Brookfield Investment Management Inc. portfolio composites. The performance results do not represent actual trading or represent the performance of any Brookfield strategy. Actual trading may produce different results. Past performance does not guarantee results. Index performance is not indicative of fund performance. To obtain fund performance call 1-855-777-8001 or visit our website, www.Brookfield.com. Investing in the real asset classes highlighted above involves risk. The loss of principal is possible, except for TIPS and U.S. Treasury bills for which principal is guaranteed by the full faith of the U.S. government. The tax treatment of returns of the asset classes listed above may differ given differential tax treatment of income versus capital gain and other factors, such as the capital structure of the investment.

Eye on Asset Allocation

E X H I B I T 11 : A S S E T C L A S S P E R F O R M A N C E I N P E R I O D S O F G R E AT E R -T H A N - E X P E C T E D I N F L AT I O N ( 2 0 0 3 -2 0 17 )

13.53%

5.66%

18.04% 17.33%

8.42%

22.38% 23.43%

11.44%

7.58%

24.10%

12.99%

6.79%

STRATEGIC ASSET CLASSES

=

EQT FI DRA RE PREF INFR MLP RAHY RAIG NREQ COMM TIPS

Greater-Than-Expected Inflation Environments AVERAGE ANNUAL RETURNS (1/1/2003–12/31/2017)

EQT MSCI World Index

FI Bloomberg Barclays Global Aggregate Bond Index

DRA The Brookfield Diversified Real Assets Index Blend is composed of the following index proxies outlined in this Index Key: 35% RE (Real Estate), 5% PREF (Real Estate Preferred Securities), 40% INFR (Infrastructure), 5% MLP and 15% Real Asset Debt (divided 70%/30% between RAIG/RAHY)

RE S&P Developed Market REIT Index until 2/28/05, linked to the FTSE EPRA/NAREIT Developed Market Index thereafter

PREF BofA Merrill Lynch Preferred Stock REIT 7% Constrained Index

INFR Equal blend of the Datastream World Gas, Water & Multi-Utilities Index and Datastream World Pipelines Index through 7/31/08 and the Dow Jones Brookfield Global Infrastructure Index* thereafter

MLP DataStream North American Pipelines Index from 12/31/03 through 5/31/06 and the Alerian MLP Index thereafter

RAHY The BofA Merrill Lynch Custom Real Asset High Yield Index

RAIG A non-investible blend of real asset sectors, as designated by Brookfield, of the BofA Merrill Lynch Global Corporate Bond Index

I N D E X K E Y

T A C T I C A L T A L K I N G P O I N T S

Consistent with the fundamental views presented earlier in this report by our investment teams, we are constructing our diversified real asset solutions with overweight allocations to real estate equities, infrastructure equities and MLPs by approximately 100 basis points, 200 basis points and 300 basis points, respectively, relative to our strategic allocations. We remain underweight in our real asset debt and REIT preferred allocations by approximately 500 basis points and 200 basis points respectively, relative to our strategic allocations.


D I S C L O S U R E SBrookfield Investment Management Inc. (“BIM”) is an SEC-registered investment adviser and represents the Public Securities Group of Brookfield Asset Management Inc. (“BAM”), providing global listed real assets strategies including real estate equities, infrastructure equities, multi-strategy real asset solutions and real asset debt. BIM is a wholly owned subsidiary of BAM. The information in this publication is not and is not intended as investment advice or prediction of investment performance. This information is deemed to be from reliable sources; however, Brookfield does not warrant its completeness or accuracy. This commentary is not intended to and does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any security, product or service (nor shall any security, product or service be offered or sold) in any jurisdiction in which Brookfield is not licensed to conduct business, and/or an offer, solicitation, purchase or sale would be unavailable or unlawful.Performance shown in USD unless otherwise noted. Past performance is not indicative of future results. Opinions expressed herein are current opinions of Brookfield Investment Management Inc. and are subject to change without notice. The mention of specific securities is not a recommendation, offer or solicitation for any person to buy, sell or hold any particular security. Any outlooks or forecasts presented herein are as of the date appearing on this material only and are also subject to change without notice.

F O R W A R D - L O O K I N G S T A T E M E N T SInformation herein contains, includes or is based upon forward-looking statements within the meaning of the federal securities laws, specifically Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements, other than statements of historical fact, that address future activities, events, or developments, including without limitation, business or investment strategy or measures to implement strategy, competitive strengths, goals, expansion and growth of our business, plans, prospects and references to our future success. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other similar words are intended to identify these forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results or outcomes. Consequently, no forward-looking statement can be guaranteed. Our actual results or outcomes may vary materially. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

The quoted indexes within this publication do not reflect deductions for fees, expenses or taxes. These indexes are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison such as differences in the volatility, and regulatory and legal restrictions between the indices shown and the strategy.

I N D E X D E F I N I T I O N SThe Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships (“MLPs”) calculated by Standard & Poor's using a float-adjusted market capitalization methodology. The Bloomberg Barclays U.S. Treasury Inflation Notes Index is composed of Inflation-Protection Securities issued by the U.S. Treasury (TIPS). BofA Merrill Lynch Preferred Stock REITs 7% Constrained Index is a subset of the BofA Merrill Lynch Fixed-Rate Preferred Securities Index including all real estate investment trust issued preferred securities. The BofA ML Fixed-Rate Preferred Securities Index tracks the performance of fixed-rate U.S. dollar-denominated preferred securities issued in the U.S. domestic market.The BofA Merrill Lynch Custom Real Asset High Yield Index tracks below investment grade corporate debt publicly issued in the major domestic or eurobond markets for sectors deemed by Brookfield to be real asset related.The BofA Merrill Lynch Real Asset Corporate & High Custom Yield Index is divided 70%/30% between real asset related sectors of the BofA Merrill Lynch Real Asset High Yield Index and the BofA Merrill Lynch Global Corporate Index.

The BofA Merrill Lynch Preferred Stock REIT 7% Constrained Index is a proprietary index representing the performance of fixed-rate REIT preferred securities. The Bloomberg Commodity Index is a broadly diversified index that tracks the commodities markets through commodity futures contracts.The Bloomberg Barclays Global Aggregate Bond Index tracks the performance of investment grade public debt issued in the major domestic and eurobond markets, including global bonds.The Datastream World Index Series of infrastructure-related sectors, including Gas, Water & Multi-Utilities, Materials and Oil & Gas Pipelines, is used as a proxy for infrastructure prior to the inception of the Dow Jones Brookfield Global Infrastructure Index in the exhibits of this report. These indexes are compiled by Thomson Reuters Datastream. The Datastream North American Pipelines Index is an index of energy pipeline companies domiciled in North America, as compiled by Thomson Reuters Datastream. This index is used in the exhibits of this report as a proxy for MLPs prior to the inception of the Alerian MLP Index.The Dow Jones Brookfield Global Infrastructure Index is calculated and maintained by S&P Dow Jones Indexes and comprises infrastructure companies with at least 70% of their annual cash flows derived from owning and operating infrastructure assets. Brookfield has no role in managing the Index. Data presented in this report reflect performance and characteristics of the index and not those of a Brookfield fund or composite.The FTSE Global Core Infrastructure 50/50 Index gives participants an industry-defined interpretation of infrastructure and adjusts the exposure to certain infrastructure sub-sectors. The constituent weights are adjusted as part of the semi-annual review according to three broad industry sectors - 50% Utilities, 30% Transportation including capping of 7.5% for railroads/railways and a 20% mix of other sectors including pipelines, satellites and telecommunication towers. Company weights within each group are adjusted in proportion to their investable market capitalization.The FTSE EPRA/NAREIT Developed Index is an unmanaged market-capitalization-weighted total-return index, which consists of publicly traded equity REITs and listed property companies from developed markets. The FTSE NAREIT Equity Index contains all tax-qualified REITs with more than 50 percent of total assets in qualifying real estate assets excluding REITs designated as Timber REITs or Infrastructure REITs. The ICE BofA Merrill Lynch Global Corporate Index is an unmanaged, commonly accepted measure of the performance of global investment grade corporate securities. The ICE BofA Merrill Lynch Global High Yield Index is an unmanaged, commonly accepted measure of the performance of global high yield corporate securities. The Merrill Lynch Option Volatility Estimate (MOVE) Index is a yield-curve-weighted index of the normalized implied volatility on 1-month Treasury options which are weighted on the 2-, 5-, 10-, and 30-year contracts. The MSCI U.S. REIT Total Return Index is a free float market-capitalization- weighted index that is composed of Equity REITs securities that belong to the MSCI U.S. Investible Market 2500 Index.The MSCI World Index is a free float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets. The S&P Developed Market REIT Index serves as a benchmark of publicly traded equity REITs domiciled in developed markets.The S&P Global Natural Resource Equities Index includes 90 of the largest publicly traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified, liquid and investable equity exposure across three primary commodity-related sectors: Agribusiness, Energy and Metals & Mining. The S&P Real Assets Index measures global property, infrastructure, commodities and inflation-linked bonds using liquid component indexes that track equities (representing 50% of the index), fixed income (representing 40% of the index) and futures (representing 10% of the index). The S&P 500 Index is an equity index of 500 widely held, large-capitalization U.S. companies.


The S&P 500® Utilities Index comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.A basis point is one hundredth of one percent.Yield to worst is the bond yield computed by using the lower of either the yield to maturity or the yield to call on every possible call date.

D A T A P R O V I D E R D I S C L O S U R E SMSCI: Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representation with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damage (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted with MSCI’s express written consent.S&P/Dow Jones: The Dow Jones Brookfield Global Infrastructure Index is a product of S&P Dow Jones Indexes LLC and/or its affiliates and has been licensed for use by Brookfield Investment Management Inc. Copyright © 2017 S&P Dow Jones Indexes LLC, a subsidiary of McGraw Hill Financial Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indexes LLC. For more information on any of S&P Dow Jones Indexes LLC’s indexes please visit www.spdji.com. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indexes LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third-party licensors shall have any liability for any errors, omissions, or interruptions or any index or the data included therein.More information on S&P Dow Jones Indexes can be found at www.spdji.com www.spdji.com. S&P Dow Jones Indexes is a global leader in providing investable and benchmark indexes to the financial markets. To date, S&P Dow Jones calculates over 700,000 indexes in real-time or at the end of day, and is home to some of the world’s most followed and recognized stock markets. Source Merrill Lynch, Pierce, Fenner & Smith Incorporated ("BofAML"), used with permission. BofAML permits use of the BofAML indexes and related data on an "As Is" Basis, makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the BofAML indexes or any data included in, related to, or derived therefrom, assumes no liability in connection with the use of the foregoing, and does not sponsor, endorse, or recommend Brookfield Investment Management Inc., or any of its products or services.

The Funds' investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 1-855-777-8001 or visiting our website, www.Brookfield.com. Read it carefully before investing.Mutual fund investing involves risk. Principal loss is possible. The Funds will be closely linked to the real assets market.Real assets include real estate securities, infrastructure securities and natural resources securities. Property values may fall due to increasing vacancies or declining rents resulting from unanticipated economic, legal, cultural or technological developments. REITs are dependent upon management skills and generally may not be diversified.REITs are subject to heavy cash flow dependency, defaults by borrowers and self-liquidation. Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including high interest costs, high leverage, regulation costs, economic slowdown, surplus capacity, increased competition, lack of fuel availability and energy conversation policies. The Funds invest in small and mid-cap companies, which involve additional risks such as limited liquidity and greater volatility. The Brookfield Global Listed Infrastructure Fund, the Brookfield Global Listed Real Estate Fund and the Brookfield Real Assets Securities Fund invest in foreign securities which involve greater volatility and political, economic and currency

risks and differences in accounting methods. Investing in emerging markets may entail special risks relating to potential economic, political or social instability and the risks of nationalization, confiscation or the imposition of restrictions on foreign investment.Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, tax risks, less frequent trading, dilution and voting rights. Energy infrastructure companies are subject to risks specific to the industry such as fluctuations in commodity prices, reduced volumes of natural gas or other energy commodities, environmental hazards, changes in the macroeconomic or the regulatory environment or extreme weather. Because the Brookfield Real Assets Securities Fund invests significantly in Natural Resources Securities, there is the risk that the Fund will perform poorly during a downturn in the natural resource sector. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Increases in interest rates can cause the prices of fixed-Income securities to decline.Using derivatives exposes the Funds to additional risks, may increase the volatility of the Fund's net asset value and may not provide the result intended. The risk of owning an ETF generally reflect the risks of owning the underlying securities the ETF holds. The Brookfield U.S. Listed Real Estate Fund and the Brookfield Global Listed Infrastructure Fund will invest more than 25% of their total assets in securities in the real estate industry, the Brookfield Real Asset Securities Fund will invest more than 80% of its total assets in securities in real assets securities and the Brookfield Global Listed Infrastructure fund will invest more than 25% of its total assets in securities in the infrastructure industry, therefore the Funds may be subject to greater volatility than a fund that is more broadly diversified.A compliant presentation and/or the firm’s list of composite descriptions are available upon request by contacting the Public Securities Group at [email protected] or at 855-777-8001.The Brookfield Investment U.S. Open-End Funds are distributed by Quasar Distributors, LLC

E N D N O T E Si. The Public Securities Group (Brookfield Investment Management Inc.)

is a wholly owned subsidiary of Brookfield Asset Management Inc.ii. U-3 is the official unemployment rate that occurs when people are

without jobs and they have actively looked for work within the past four weeks

iii. Based on BLS employment forecasts December 2017iv. Personal consumption expenditure (PCE) inflation is one measure

of U.S. inflation, tracking the change in prices of goods and services purchased by consumers throughout the economy

v. The break-even inflation rate is a market-based measure of expected inflation. It is the difference between the yield of a nominal bond and an inflation-linked bond of the same maturity

vi. J.P. Morgan, U.S. Tax Reform and the Implications for the High Yield Market. December 31, 2017

vii. NAFTA is the North American Free Trade Agreementviii. EV/EBITDA is a commonly used measure of cash flow ix. Cash flow generally refers to a company's operating cash flow minus

capital expenditures. These funds can be used to pay dividends, buy back stock, pay off debt and expand a business.

x. EIA is the Energy Information Agency. Figures sourced from the EIA Short-term Energy Outlook, January 2018

xi. Source: Company reportsxii. Source: Wells Fargo research

C O N T A C T U STelephone: 1-855-777-8001 Email: [email protected] Or visit our website at www.brookfield.com© 2018 Brookfield Investment Management Inc. RAQ_2-18


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