STRICTLY CONFIDENTIAL
Power Shares Senior Loan ETFHold
Ticker: BKLNPurchase Date: 03/11/15Purchase Price: $24.13Current Price: $22.10 Price Return Since Purchase: (8.41%)
Atkins Investment Group | [Sector Name]
Fund Overview Fund Summary
Credit Rating Credit Breakdown by Country Top Industry Groupings
| 2
BKLN is an actively managed ETF that invests at least 80% of its total assets in the securities that comprise the S&P/LSTA U.S.
Securities within the fund have a floating rate off LIBOR, which in theory would offer higher dividend payments once it passed its 1% floor
BKLN loans are secured by the assets of the companies within the fund, which are senior debt in the structure.
Number of Holdings:113
Total Expense Ratio:0.66%
Modified Duration:0.25%
3-Month LIBOR:0.62%
YTM:6.10%
Structure Breakdown
MediaRetailLodgingTelecommunicationsSoftwareElectricHealthcare-ServicesPharmaceuticalsEntertainmentCommercial Services
8.91%7.26%5.67%5.37%5.27%4.84%4.79%4.76%4.57%3.51%
Fund Details
Loans
Cash and Cash Equivalents
High Yield Securi-ties
86.32%
7.19%
6.48%
U.S
Canada
Luxembourg
Cayman Islands
Australia
Netherlands
U.K.
74.37%
5.47%
4.40%
2.07%
1.42%
0.94%
0.74%
Atkins Investment Group | [Sector Name]
Trading Update
Price Performance Annualized Price Returns Trend
Dividend Payment Since Inception
| 3
2012 2013 2014 2015-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
1-Apr-
11
1-Aug
-11
1-Dec-
11
1-Apr-
12
1-Aug
-12
1-Dec-
12
1-Apr-
13
1-Aug
-13
1-Dec-
13
1-Apr-
14
1-Aug
-14
1-Dec-
14
1-Apr-
15
1-Aug
-15
1-Dec-
15 $-
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
Purchased
3/3/20
11
9/3/20
11
3/3/20
12
9/3/20
12
3/3/20
13
9/3/20
13
3/3/20
14
9/3/20
14
3/3/20
15
9/3/20
1520
21
22
23
24
25
26
Purchased
Leverage Loan vs. High Yield
3/4/20
11
10/4/
2011
5/4/20
12
12/4/
2012
7/4/20
13
2/4/20
14
9/4/20
14
4/4/20
15
11/4/
2015
-25%
-20%
-15%
-10%
-5%
0%
5%
Leverage Loan High Yield
94% Correlation
Atkins Investment Group | [Sector Name]
Leverage Loan Market
Going forward
| 4
Market review 2015
3/1/2006 12/1/2006 9/1/2007 6/1/2008 3/1/2009 12/1/2009 9/1/2010 6/1/2011 3/1/2012 12/1/2012 9/1/2013 6/1/2014 3/1/20150
100000
200000
300000
400000
500000
600000
700000
800000
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
C&I Loans Non-Performing Loans Total Corporate Loans Outstanding
2015 was the second largest issuance of CLO in the US totaling $97.89 billion
2014: largest at $124.1 billion
Default rates historic low of 2%
Average bid for LSTA US BB loan index peaked from a high of 98.86 in April, currently trading at 93.78
Large outflows from hedge funds
Banks projecting $60-$80 Billion in issuance in 2016
Default rate projected to hit 3%
Non-Performing Corporate Loans gradually decreasing
Insurance companies increasing inflows for below investment grade
US and Japanese banks becoming more active in AAA investing
Atkins Investment Group | [Sector Name]
Relative Indicators
Business Indicators
Loan Risk Volume vs. Demand for Loans
| 5
3/1/20
02
6/1/20
03
9/1/20
04
12/1/
2005
3/1/20
07
6/1/20
08
9/1/20
09
12/1/
2010
3/1/20
12
6/1/20
13
9/1/20
14-40%
-30%
-20%
-10%
0%
10%
20%
0%20%40%60%80%100%120%140%160%
ISM Manufacturing Leverage Loan Index US Corp Profitablilty
13% Correlation US Corp Profitability
74% Correlation ISM
4/1/2006 12/1/2006 8/1/2007 4/1/2008 12/1/2008 8/1/2009 4/1/2010 12/1/2010 8/1/2011 4/1/2012 12/1/2012 8/1/2013 4/1/2014 12/1/2014 8/1/20150
2000400060008000
1000012000140001600018000
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
Moderate Risk Loans Low Risk LoansDemand for Commercial & Industrial Loans (Large & Middle-Market Firms)
Recent Trends
Low risk loan volume trending upward, moderate to high risk loans trending down.
Demand decrease do to market-sell off and investor sentiment
ISM Manufacturing index hit a 7 year low of 48
US Corporate Profitability index slightly trending down
Atkins Investment Group | [Sector Name]
Historical Snapshot
Leverage Loan Index vs Us Corp Profitability 2002-2009
| 6
3/1/20
02
11/1/
2002
7/1/20
03
3/1/20
04
11/1/
2004
7/1/20
05
3/1/20
06
11/1/
2006
7/1/20
07
3/1/20
08
11/1/
2008
7/1/20
090%
10%20%30%40%50%60%70%80%90%
-40%
-30%
-20%
-10%
0%
10%
20%
US Corp Profitablilty Leverage Loan Index
Leverage Loan Index vs US Corp Profitability 2011-Present
6/1/20
11
10/1/
2011
2/1/20
12
6/1/20
12
10/1/
2012
2/1/20
13
6/1/20
13
10/1/
2013
2/1/20
14
6/1/20
14
10/1/
2014
2/1/20
15
6/1/20
150%
5%
10%
15%
20%
25%
30%
-8%
-6%
-4%
-2%
0%
2%
4%
US Corp Profitablilty Leverage Loan Index
Leverage Loan Index vs ISM Manufacturing 2004-2010 Leverage Loan Index vs ISM Manufacturing 2012-Present
12/1/
2004
9/1/20
05
6/1/20
06
3/1/20
07
12/1/
2007
9/1/20
08
6/1/20
09
3/1/20
10
12/1/
2010
6065707580859095
100105
30
35
40
45
50
55
60
Leverage Loan ISM
3/1/20
12
8/1/20
12
1/1/20
13
6/1/20
13
11/1/
2013
4/1/20
14
9/1/20
14
2/1/20
15
7/1/20
15
12/1/
2015
80828486889092949698
100
44
46
48
50
52
54
56
58
Leverage Loan ISM
Atkins Investment Group | [Sector Name]
SummaryLeveraged Loans vs. Other Indicators
Historical Performance and Recovery Rates Summary
| 7
Leverage Loan 2015 default rates are low at 2% compared to their 4.5% historical average.
Senior Secured Loans have a historical 80% recovery rate.
Leverage Loans have outperformed the aggregate bonds market in rising interest rate environments.
9/30/2
003
1/30/2
004
6/1/20
04
10/1/
2004
2/1/20
05
6/1/20
05
10/1/
2005
2/1/20
06
6/1/20
06
10/1/
2006
2/1/20
07
6/1/20
07
10/1/
2007
2/1/20
08
6/1/20
08
10/1/
2008
2/1/20
09
6/1/20
09
10/1/
2009
2/1/20
10
6/1/20
10
10/1/
2010
2/1/20
11
6/1/20
11
10/1/
2011
2/1/20
12
6/1/20
12
10/1/
2012
2/1/20
13
6/1/20
13
10/1/
2013
2/1/20
14
6/1/20
14
10/1/
2014
2/1/20
15
6/1/20
15
10/1/
2015
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
0
1
2
3
4
5
6
Leverage Loan Index Barclays Agg Fed Funds LIBOR
Leverage Loans are trading at a discount due to recent market turbulence.
Fed Funds hopeful to raise over the next 24
month.
Long term, Fed Funds projected to reach 4.5% in 2020.
BKLN offers low duration risk as loan rates within the fund are reset quarterly which has traditionally offered less price volatility.
Atkins Investment Group | [Sector Name]
Comparable Funds
Normalized Comparable Funds Price Performance
Key Comparative Statistics
| 8
12 month dividend yield 30-day Avg. Liquidity Expense Ratio Inception Date Market Cap Maturity < 7 yrs. Type
BKLN 4.21% 2.9M 0.65% 3/3/2011 3.79B 98.60% Open
SRLN 4.45% 176.5K 0.70% 4/4/2033 773.08M 91.18% Open
SNLN 4.40% 151.4K 0.55% 11/6/2012 283.14M NA Open
FTSL 3.96% 127.5K 0.85% 5/5/2013 420.48M 88.77% Closed
3/4/20
11
4/22/2
011
6/10/2
011
7/29/2
011
9/16/2
011
11/4/
2011
12/23
/2011
2/10/2
012
3/30/2
012
5/18/2
012
7/6/20
12
8/24/2
012
10/12
/2012
11/30
/2012
1/18/2
013
3/8/20
13
4/26/2
013
6/14/2
013
8/2/20
13
9/20/2
013
11/8/
2013
12/27
/2013
2/14/2
014
4/4/20
14
5/23/2
014
7/11/20
14
8/29/2
014
10/17
/2014
12/5/
2014
1/23/2
015
3/13/2
015
5/1/20
15
6/19/2
015
8/7/20
15
9/25/2
015
11/13
/2015
1/1/20
16-14%-12%-10%-8%-6%-4%-2%0%2%4%
BKLN SRLN SNLN FTSL
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