The Revolutionary Role of Mobile Devices in the

Global EconomyAugust 2016

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WHO ARE WE?

Payden & Rygel is one of the largest privately-owned global investment advisers. Founded in 1983, we are a leader in the active management of equity and fixed income portfolios, through domestic and international

solutions. Advising the world’s leading institutions and individual investors, we provide strong performance and real-world strategy on the global economy and capital markets.

Advising the World’s Leading Institutions and Individual Investors

LOS ANGELES | BOSTON | LONDON | PARIS

$100BILLIONAUM

23 ACCOUNTS

OVER $1BILLION

350CLIENT

RELATIONSHIPS

25 YEARS

AVERAGE TENURE OFMANAGEMENT TEAM

$200-400MILLION

AVERAGE ACCOUNT SIZE

200EMPLOYEES

VISIT US AT PAYDEN.COM

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OUR QUARTERLY PUBLICATION

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WHEN IS SOMETHING REVOLUTIONARY?

3

Steam Engine

1776

Intermodal Container

1955

Airplane

1903

Widely-adopted

Creates platform for previously unexpected products/services

Alters the structure of production and employment

PAYDEN.COM

THIS IS NOT REVOLUTIONARY…circa 1988

4

https://www.youtube.com/watch?v=rWfqkrAM8IY

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WHEN IS SOMETHING REVOLUTIONARY?

5

Steam Engine

1776

Intermodal Container

1955

Airplane

1903

Widely-adopted

Creates platform for previously unexpected products/services

Alters the structure of production and employment

PAYDEN.COM

SMARTPHONES WIDELY ADOPTED IN THE U.S. IN JUST 8 YEARS

6

8

14

20

20

23

27

58

75

Smartphone

Cellphone

Color TV

Internet

Radio

Microwave

Stove

Car

Source: Asymco

Years To Go From 10% to 90% Adoption Rate By Household

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THE SMARTPHONE IS QUICKLY BECOMING THE MOST ADOPTED DEVICE ON THE PLANET

7

• Smartphone subscriptions are expected to double by 2021.

• From 3.4 billion today to 6.4 billion.

130m

130m

200m

270m

740m

1,580m

North America

Western Europe

Central/Eastern Europe

Latin America

Middle East & Africa

Asia Pacific

Most subscriptions will be added in developing countries

Smartphone Subscriptions to be Added by 2021

Source: Ericsson Mobility Report

PAYDEN.COM

WHEN IS SOMETHING REVOLUTIONARY?

8

Steam Engine

1776

Intermodal Container

1955

Airplane

1903

Widely-adopted

Creates platform for previously unexpected products/services

Alters the structure of production and employment

PAYDEN.COM

21,000

13

1978 - Polaroid 2012 - Instagram

Sources: Boston University and Wired.com

Number of Employees – Polaroid, 1978 and Instagram, 2012

THE SMARTPHONE DISRUPTS INDUSTRIES

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HOW MANY ITEMS HAVE BEEN SUBSUMED BY YOUR PHONE?

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Computer System

Camcorder

Calculator

Cellphone

CD Player

Clock Radio

Speed Dial Phone

Voice Recorder

Flashlight

Weather ReportPhone Book

iPod/MP3 Player

Camera

GPS

Compass

Boarding Passes

Pager

Physical Gift Cards

Photo Albums

Diary/Calendars

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NEARLY A MONTH OF WORK…FOR WHAT?

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Average worker would have to work 125 hours in 1988 to afford this phone.

Today, the average worker needs to work less than 6 hours for a smartphone.*

*Based on a smartphone that retails for $120 (HTC Desire, LG K4 or Microsoft Lumia on the Verizon Store on 8-17-2016).

PAYDEN.COM

WHEN IS SOMETHING REVOLUTIONARY?

12

Steam Engine

1776

Intermodal Container

1955

Airplane

1903

Widely-adopted

Creates platform for previously unexpected products/services

Alters the structure of production and employment

PAYDEN.COM

UNEXPECTED USE #1WHETHER INDIA OR UNITED STATES, YOU USE YOUR SMARTPHONE TO GET FROM POINT A TO B

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UNEXPECTED USE #2Pokémon GO!

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93% Increase in Nintendo’s stock price since the release of Pokémon Go

Camera + GPS + Large Display + Data Connectivity+ $ transaction ability =

PAYDEN.COM

WHEN IS SOMETHING REVOLUTIONARY?

15

Steam Engine

1776

Intermodal Container

1955

Airplane

1903

Widely-adopted

Creates platform for previously unexpected products/services

Alters the structure of production and employment

PAYDEN.COM

QUESTIONS?