MARKET COMMENTARY

Investors entered the third quarter optimistic that the Federal Reserve had orchestrated a soft landing for the economy and
would potentially start cutting rates by year-end, but enthusiasm abated throughout August and September, as the prospect of
a sustained period of higher rates became more likely, with both stock and bond markets finishing the quarter down
approximately -3%.

The U.S. economy has remained resilient with GDP growth and employment beating expectations, recession worries have been
pushed to 2024, and though headline inflation has increased recently due to fluctuating energy prices, core inflation has
remained on a downward trend. At its September meeting, the Federal Reserve kept its policy rate at a range of 5.25%-5.50%,
where participants signaled one more rate hike is likely in 2023 before an extended pause. Additionally, the updated dot plot
now shows a higher median rate for 2024 (5.1% vs 4.6%), indicating interest rates are expected to stay at a peak exceeding 5%
for several quarters before any cuts occur, with this outlook underpinned by the increasing consensus view that inflation will
remain above the Fed’s 2% target well into 2024. Chair Powell noted the FOMC is prepared to increase rates further if required
but will proceed carefully and will be assessing the totality of incoming data, with risks of over-tightening/under-tightening
becoming more two-sided.

In response, yields on longer dated U.S. treasuries rose sharply as investors braced for a prolonged period of higher interest
rates, with the 10-year rising by 78 bps to 4.59%, its highest level since 2007, the 2-year finished 16 bps higher to 5.03%, and
high yield bond spreads narrowed by 2 bps. The Bloomberg Barclays Aggregate Bond Index (“Agg”) finished Q3 down -3.2%,
and down -1.2% YTD through September 30th. Apart from a significant fourth-quarter rally, the Agg is on track for a third
consecutive year-over-year decline, a trend unprecedented in the history of the United States.

At their July highs, the S&P 500, Nasdaq, and Dow came within 5% from the prior all-time highs set in late ‘21/early ‘22, and
eventually saw declines in the final two months to finish Q3 in the red (S&P 500 -3.3%, Nasdaq -3.9%, Dow -2.1%). The
robust YTD gains in the large cap benchmarks have been driven by a small group of mega-cap companies, with the market
cap-weighted benchmarks (S&P 500 +13.1% YTD) grossly outperforming their equal-weight counterparts (S&P 500 equal
weight +1.7% YTD). At the sector level, five of the eleven sectors are down YTD, with communications and technology up
+37.6% and +32.6% YTD, whereas defensive sectors such as utilities and consumer staples are down -14.4% and -6.0%. In an
environment where 1-year T-bills are yielding over 5%, higher-yielding defensive sectors have become less attractive on a
relative basis. Additionally, non-US equities represented by the MSCI EAFE Index and MSCI Emerging Market Index finished
the quarter down -4.1% and -2.9%.

ALTERNATIVE INVESTMENT COMMENTARY*

Hedge funds provided positive returns for a third consecutive quarter in 2023 as the HFRI Fund-of-Funds Composite Index
rose 0.6% in the third quarter of 2023. Volatility rose during the quarter (which was welcomed by our market-neutral multimanagers)
as inflation continued to prove stubborn amid sustained strength in a resilient U.S. labor market. During the quarter,
‘Macro’ and ‘Event Driven’ strategies were among the best performing strategies as the HFRI Macro (Total) Index and HFRI
Event-Driven (Total) Index rose by 2.5% and 2.0%, respectively. Directional Equity strategies saw a drawdown during the
quarter with increasing volatility as the HFRI Equity Hedged (Total) Index fell 0.8%. Relative value and multi-strategy hedge
funds contributed positive performance during the quarter as the HFRI Relative Value (Total) Index and HFRI Multi-Strategy
Index rose by 1.6% and 1.3%, respectively. We are pleased with our manager’s performance during the quarter as many
contributed positively during a period when traditional stocks as measured by the S&P 500 fell.

*Data taken from HFRI (Hedge Fund Research Indices) as of October 10th, 2023

This material contains the current opinions of Family Management Corporation and its affiliates (collectively, “FMC”), which may change without notice. This material is distributed for informational purposes only. It is not a recommendation or offer of any investment or strategy. Nothing herein shall be considered a solicitation to buy or sell, or an offer to buy or sell, to or from any persons in any jurisdiction where such solicitation, offer, purchase, or sale would be unlawful. Information contained herein has been obtained from sources believed to be reliable, but are not guaranteed. FMC provides no guarantees regarding the performance of any investment or strategy. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future performance and individual client results will vary. No part of this material may be reproduced in any form, or referred to in any publication, without the express written permission of FMC