CAPSTONE Updates – August 2019

Replacing Schlumberger & Telefonica

After careful review of the holdings in your Liberty One CAPSTONE portfolio, our investment committee has chosen to upgrade your portfolio by replacing Schlumberger Limited (SLB) & Telefonica,S.A (TEF) with CVR Energy, Inc (CVI) & BCE, Inc (BCE). We view that current weakness in Oil and Gas capital expenditure (CAPEX) spending could be dragged on for longer than expected, and SLB’s lack of exposure to US shale operations could mitigate its long-term growth potential. Telefonica is one of the largest telecommunication company globally, but its heavy exposure in Europe and Latin America pose some serious macro headwinds for the company, in our opinion. We view the more challenging business environment and higher regulatory risks as factors that led to our replacement decisions.

CVR Energy is a diversified energy company engaged in crude oil refining and nitrogen fertilizer manufacturing. We view the current crack spread environment as attractive and beneficial for the company. The company also pays a healthy dividend and have expressed interests in becoming a potential buyout candidate. BCE is one of the three largest telecom company in Canada, controlling 40% of market share. We are encouraged by the strong relationships the company has built with its regulators and its economies of scale which creates a high barrier of entry for new entrants.

If you have any questions about these or any changes in your Liberty One portfolio(s), potential tax implications, or would simply like to learn more, please contact your financial advisor.

Thank you for your continued trust and confidence!

Liberty One Investment Management, LLC is a Registered Investment Advisor with the SEC. Liberty One Investment Management’s ADV Brochure, which serves as Liberty One’s primary disclosure document, is available upon request at no charge or may be obtained directly from Liberty One Investment Management’s website at www.libertyoneim.com. An investment in any Liberty One strategy involves risk of loss, including principal, as well as the potential for gain. Before investing, consider the investment objective, risk tolerance, potential for loss of principal, fees, and expenses. Past performance is no guarantee of future results. Diversification and asset allocation do not ensure a profit or guarantee against loss. Liberty One Investment strategies may lose value, are not FDIC/NCUA insured. Liberty One strategies are not suitable for all investors.

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