Capital Markets: Winter 2019

A Powerful Trend ​ Fundamentals

• There have been various periods in history marked by fears of “trade wars” but ultimately countries have acted rationally and reduced trade barriers • While there may be more pain to come, we believe the powerful trend toward lower tariffs and more trade will prevail

• In the meantime, opportunities will likely arise for active management

U.S. Tariff Rates

U.S. Gross International Trade % of GDP

8%

35%

30%

Japanese auto quotas imposed

6%

25%

20%

4%

Bush steel tariffs

15%

10%

2%

Chicken Tax / European trade dispute

5%

Time magazine cover on “Trade Wars”

0%

0%

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

2017

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

2017

Source: U.S. International Trade Commission, U.S. Bureau of Economic Analysis, and Alger. Tariffs are calculated as duties collected divided by total imports.

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