R T L INVESTING IN THE GATEWAY TO THE CONSUMER I N D E X WHY RTL - - PowerPoint PPT Presentation

INVESTING IN THE GATEWAY TO THE CONSUMER R T L I N D E X

The storefront is the gateway to the consumer with commercial real estate serving as an ideal medium for connecting with established shoppers and attracting new ones. The fusion of retail and entertainment has increasingly been taken on in the digital age. This fusion is making tenants utilize the experiential concept to compel consumers to visit their stores. Physical retail stores are transitioning from being primarily a distribution channel for products to becoming a powerful media channel for branded experiences and stories.

GATEWAY TO THE CONSUMER

WHY RTL INDEX?

DOUG STEPHENS, RETAIL PROPHET

Smart retailers are turning their stores into beloved gathering points at the hearts of their communities

THINK ABOUT IT:

RTL INDEX LOCATION NECESSITY

Conveying clear and engaging brand stories through physical engagement and multiple sensory inputs

ENABLES RETAILERS

Offering opportunities for immersive and kinetic product experiences

COMPELS CONSUMERS

Acting as the interactive gateway to the entire brand ecosystem of products, services and purchase alternatives

INCREASES REVENUES

AMOUNT BEST BUY LOST DURING 2012

2012 RTL INDEX APOCOLYPSE

$1.2 BILLION

The problem was the Internet. Customers were comparison shopping and finding lower prices online. Sometimes they checked from a smartphone right in the aisles of a Best Buy store after sizing up the real merchandise. Analysts predicted that the phenomenon, dubbed "showrooming,” could destroy Best Buy.

ARE MODELS SOLD ON BEST BUY’S NEW STOREFRONT ON AMAZON AS OF DEC. 17, 2018

2018 RTL INDEX RENAISSANCE 2 OF THE TOP 5 BEST SELLING TELEVISIONS

The TV deal gives Best Buy access to Amazon’s massive online customer base, while Amazon gains a brick-and-mortar presence and additional products that can attach to its Alexa home assistant, which competes against similar devices from Google and Apple. The two Fire TVs, one made by Toshiba and the

• ther from Best Buy house brand Insignia, are also available in Best Buy stores and on its website.

Best Buy has managed to repair their online stores and tie their online presence more tightly to their network of more than 1,400 locations, in ways that it thinks may have neutralized the "showrooming" threat. The idea in omnichannel is to reach customers wherever they are—in a store, online or via their phones—and use technology to turn costly physical stores into an advantage. One deceptively simple step Best Buy took was to add a “Store Pickup” button to its online shop.

RTL INDEX RENAISSANCE

OMNICHANNEL MAKING EVERYTHING POSSIBLE

WATERSHED MOMENT

JUNE 16, 2017 AMAZON BUYS WHOLE FOODS

Irreplaceable real estate Amazon could not even try to replicate the Whole Foods indispensable real estate portfolio It’s about the future of commerce: Physical access to rich, urban consumers It bought 431 upper-income, prime- location distribution hubs for everything it does Gains more insight into how the same person shops on and offline

Presentations are communication tools that can be used as demonstrations, lectures, speeches, reports, and more. Most of the time, they’re presented before an audience. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. Benchmark Investments does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. Please refer to the disclaimers at the end of this document for more information about Benchmark Investments relationship to such third party product offerings.

INVESTMENT RESULTS

Portfolios & Strategies

Measures the performance of exchange listed companies in the U.S. that primarily own and manage retail real estate and rent space in those properties to tenants. The securities include REITs that focus on large regional malls, outlet centers, grocery- anchored shopping centers and power centers that feature big box retailers. Benchmark Retail Real Estate SCTR Seeks to provide exposure to the S&P Retail Select Industry Index which comprises the following sub- industries: Apparel Retail, Automotive Retail, Computer & Electronic Retail, Department Stores, Drug Retail, Food Retailers, General Merchandise Stores, Hypermarkets & Super Centers, Internet & Direct Marketing Retail, and Specialty Stores. SPDR S&P Retail ETF

XRT

The S&P 500 Index is a diversified large cap U.S. index that holds companies across all eleven GICS

• sectors. It is a market-capitalization

weighted index of the 500 largest U.S. publicly traded companies by market value. The index is widely regarded as the best single gauge of large-cap U.S. equities.

SPX

S&P 500 Index

RTL INDEX

RTL INDEX TOP TEN XRT TOP TEN

Market Exposures

Source: Bloomberg Time Period: 1/12/2019

5 YEAR INDEX TOTAL RETURNS

Time Period: 1/1/2014 to 12/31/2018

ANNUALIZED RETURNS

3.37

Benchmark Retail SCTR Index Net of Fees

• 0.16

8.50 RTL INDEX

XRT SPX

Source: Morningstar Direct Time Period: 1/1/2014 to 12/31/2018

SPDR S&P Retail ETF S&P 500 Total Return Index

Return is the amount of money an investment made for a portfolio. Return is given as a percentage.

Upside/downside capture ratio show whether a given strategy has outperformed, gained more or lost less than, a broad market benchmark during periods of market strength and weakness, and if so, by how much. Upside capture ratios for strategy's are calculated by taking the strategy's monthly return during months when the benchmark had a positive return and dividing it by the benchmark return during that same month. Downside capture ratios are calculated by taking the fund's monthly return during the periods of negative benchmark performance and dividing it by the benchmark return.

43.36

Benchmark Retail SCTR Index Net of Fees

57.79 100

XRT SPX

Source: Morningstar Direct Time Period: 1/1/2014 to 12/31/2018

SPDR S&P Retail ETF S&P 500 Total Return Index

UP/DOWN CAPTURE RATIOS

46.26

UPSIDE CAPTURE RATIO

103.78

DOWNSIDE CAPTURE RATIO

100 RTL INDEX

BETA

Beta is a measure of a strategy's sensitivity to market movements. It measures the relationship between a fund's excess return over T-bills and the excess return of the benchmark index. Equity funds are compared with the S&P 500 index. Morningstar calculates beta using the same regression equation as the one used for alpha, which regresses excess return for the fund against excess return for the index. This approach differs slightly from

• ther methodologies that rely on a regression of raw

returns.

0.57

Benchmark Retail SCTR Index Net of Fees

1.04 1.00

XRT SPX

Source: Morningstar Direct Time Period: 1/1/2014 to 12/31/2018

SPDR S&P Retail ETF S&P 500 Total Return Index

RTL INDEX

ALPHA

A measure of the difference between a strategy's actual returns and its expected performance, given its level of risk as measured by beta. A positive alpha figure indicates the strategy has performed better than its beta would predict. In contrast, a negative alpha indicates the strategy's underperformance, given the expectations established by the strategy's beta.

• 0.72

Benchmark Retail SCTR Index Net of Fees

• 7.95

0.00

XRT SPX

Source: Morningstar Direct Time Period: 1/1/2014 to 12/31/2018

SPDR S&P Retail ETF S&P 500 Total Return Index

RTL INDEX

SHARPE RATIO

This risk-adjusted measure was developed by Nobel Laureate William Sharpe. It is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the fund's historical risk-adjusted performance. It is calculated for the past 36-month period by dividing a portfolios' annualized excess returns over the risk-free rate by its annualized standard deviation.The Sharpe ratio can be used to compare directly how much risk two funds each had to bear to earn excess return over the risk-free rate.

0.29

Benchmark Retail SCTR Index Net of Fees

0.05 0.76

XRT SPX

Source: Morningstar Direct Time Period: 1/1/2014 to 12/31/2018

SPDR S&P Retail ETF S&P 500 Total Return Index

RTL INDEX

DISCLAIMERS

Data quoted represents past performance, which is no guarantee of future results. The information presented above does not reflect the performance of any fund or account managed or serviced by Benchmark Investments, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any market forecast made in this commentary will be realized. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security and should not be relied upon as investment advice. The views and opinions in the preceding commentary are as of the date of publication and are subject to change without notice. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice, is not intended to predict or depict performance of any investment and does not constitute a recommendation or an offer for a particular security. We consider the information in this presentation to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of suitability for investment. Publication Date: January 2019