Our Perspective IS WINTER COMING FOR MUNIS? MAY 2016 Exhibit 3: Entitlement Benefits as a Share of Total State Expenditures Source: Standard & Poor’s, U.S. Census Bureau Exhibit 4: Capital Outlay as Percent of Total State Expenditures Source: Standard & Poor’s, U.S. Census Bureau We are now in the seventh year of the economic recovery from the Great Recession. Despite the economic recovery, some states and cities are still experiencing credit stress and may be running out of time to put their houses in order before another recession strikes.

Only state and local credits that have had the political fortitude and strong fiscal management to build up budgetary reserves and enact pension reform will outperform in the next economic downturn. As we have previously stated, we continue to believe long term rates will remain lower for longer and we remain constructive on the municipal sector over the next several months because of its tax exempt income, strong technical factors, and compelling yields compared to other global fixed income rates. That being said, we believe that muni fundamentals most likely peaked in 2015 and we are in the late stages of the credit cycle with limited potential for credit spreads to tighten significantly from here.

As a result, we have been upgrading our portfolios to take advantage of the strong technical environment. The assertions in this perspective are Seix Investment Advisors’ opinion. BofA Merrill Lynch Municipal Master Index tracks the performance of the investment-grade U.S. tax-exempt bond market. Qualifying bonds must have at least one year remaining term to maturity, a fixed coupon schedule, and an investment grade rating (based on average of Moody’s, S&P, and Fitch). Investment Risks: All investments involve risk.

Debt securities (bonds) offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. Generally, a portfolio’s fixed income securities will decrease in value if interest rates rise and vice versa.

A portfolio’s income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. There is no guarantee a specific investment strategy will be successful. This information and general market-related projections are based on information available at the time, are subject to change without notice, are for informational purposes only, are not intended as individual or specific advice, may not represent the opinions of the entire firm, and may not be relied upon for individual investing purposes. Information provided is general and educational in nature, provided as general guidance on the subject covered, and is not intended to be authoritative.

All information contained herein is believed to be correct, but accuracy cannot be guaranteed. This information may coincide or conflict with activities of the portfolio managers. It is not intended to be, and should not be construed as investment, legal, estate planning, or tax advice.

Seix Investment Advisors does not provide legal, estate planning or tax advice. Investors are advised to consult with their investment processional about their specific financial needs and goals before making any investment decisions. Past performance is not indicative of future results. ©2016 Seix Investment Advisors LLC. Seix Investment Advisors is a registered investment adviser with the SEC and a member of the RidgeWorth Capital Management LLC network of investment firms. .