Eagle Invest

Hypothetical example for illustrative purposes only.

The graph above is for illustrative purposes only and shows the hypothetical growth of an initial investment with compounding interest compared to a cash investor. The compounding portfolio assumes an annual return of 5.5%, based on First Republic Investment Management's Capital Market Assumptions (CMA), and both may include ongoing contributions, as determined by the “recurring investment” option. The compounding portfolio assumes a 0.40% annual management fee and active, daily management including tax loss harvesting and tax-efficient asset placement. The compounding portfolio assumes First Republic Investment Management’s Strategic Moderate Growth allocation which consists of 20% investment grade bonds, 54.4% U.S. large capitalization equities, 5.6% U.S. small capitalization equities, 13.6% international developed market equities, 6.4% emerging market equities. Diversification and asset allocation do not guarantee profit or protect against loss.

Important Disclosures regarding Capital Market Assumptions

Risk: The projections generated by our CMA regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk associated with actual trading. Therefore, the back-tested results may not reflect the impact that material economic and market factors might have had on the portfolio manager’s decision-making if the portfolio manager was actually selecting the managers for a client’s assets in the time period represented. Assumptions: Our CMAs are developed using different methodologies and multiple internal and external data sources, and each of these inputs rely on numerous quantitative and qualitative assumptions.

The quantitative assumptions are derived from various formulations utilizing historical data typically going back approximately 30 years. The qualitative assumptions are forward-looking and developed using expert judgement. The overarching assumption is that the economic landscape over the long term will revert to “normal” market conditions, i.e.;

• Domestic and international Inflation and economic growth (GDP) rates will stabilize and follow an assumed path then reach long-term terminal rates
• The treasury yield curve will shift and assume a normalized upward sloping shape over an assumed path during the subsequent years
• Price multiples and various other valuation matrixes will mean-revert to a normalized long-term state
• For each asset class, we assume the return expectation is a combination of the risk-free rate of return plus risk premiums unique to that asset class

It is important to note that the economic and fundamental assumptions are applicable to only half of the weight in our CMAs. The other half comes from a pure quantitative approach (i.e., reverse-optimization framework, bootstrapping simulations etc. ) and from external sources who developed their CMAs using their own assumptions (i.e. Market consensus views).

Limitations: Future returns may behave differently from the historical patterns captured in the distribution of returns generated by our models. Our models may be underestimating extreme scenarios that were unobserved in the historical data on which the models are based. One of the limitations of hypothetical performance results is that they are prepared with the benefit of hindsight. There are numerous other factors related to the markets in general or to the implementation of any specific trading strategy which cannot be fully accounted for in the preparation of hypothetical performance and all of which can adversely affect actual trading results.

The investment products and financial strategies suggested herein are subject to investment risk, including possible loss of principal amount invested. There can be no guarantee the suggested strategies or investments will lead to successful outcomes and clients may experience different results. Investment decisions should be based on each individual’s goals, time horizon and tolerance for risk.

First Republic Private Wealth Management encompasses First Republic Investment Management, Inc., an SEC-registered Investment Advisor, First Republic Securities Company, LLC, Member FINRA/SIPC, First Republic Trust Company, First Republic Trust Company of Delaware LLC and First Republic Trust Company of Wyoming LLC. First Republic Investment Management, Inc. does not provide tax or legal advice and is not affiliated with Pershing, LLC.

SigFig Wealth Management, LLC (SigFig) serves in a sub-advisory role and is an SEC-registered investment adviser and a subsidiary of Nvest, Inc. SigFig is not affiliated with First Republic Private Wealth Management or any of its affiliates, nor is it affiliated with Pershing, LLC. For more information, please visit SigFig. {hyperlink to SigFig's privacy policy OR} see SigFig's privacy policy on their public website.

The strategies in this document will often have tax and legal consequences. It is important to note that First Republic does not provide tax or legal advice. This information is provided to you as is, is not legal advice, is governed by our Terms and Conditions of Use, and we are not acting as your attorney or tax advisor. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information herein. Clients’ tax and legal affairs are their own responsibility. Clients should consult their own attorneys or tax advisors in order to understand the tax and legal consequences of any strategies mentioned herein.