Market Focus

Second Quarter 2012

Bank of America Merrill Lynch Investment Management & Guidance

Bank of America Merrill Lynch is a marketing name for the Retirement Services businesses of Bank of America Corporation (BAC). Banking and fiduciary activities are performed by wholly owned banking affiliates of BAC, including Bank of America, N.A., member FDIC. Brokerage services are performed by wholly owned brokerage affiliates of BAC, including Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLFP&S), a registered broker-dealer and member SIPC. Investment Products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value

MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation. 2012 Bank of America Corporation. All rights reserved.

Global Markets Overview

Market Index Returns (%)

Investors grew more nervous in the second quarter due to slowing growth and concerns about the European
debt crisis. Riskier assets declined, while those considered safer outperformed.

Description
Equity

Q2 2012 (%)
-2.8 -3.2 -3.1 -4.0 -2.2 -4.4 -5.6 -3.3 -3.5 -3.9 -3.0 2.2 3.0 2.4 1.8 1.1 2.0 2.5 -2.7 -5.1 -7.1 -7.5 -8.9 -6.4

YTD 2012 (%)

9.5 9.3 9.4 10.1 8.7 8.0 8.1 7.8 8.5 8.8 8.2 2.5 1.7 4.9 7.1 1.7 4.1 7.1 6.9 5.9 3.0 2.4 3.9 4.2

U.S. Treasuries led performance, rising 3.0% on rising investor fear. The Large Cap equity S&P 500 fell 2.8%; the ML US Broad Market Index rose 2.2%. Markets with very high exposure to economic growth, such as commodities and Emerging Markets, were lead
underperformers. The MSCI Emerging Market Index fell sharply, down 8.9%.
Riskier assets fell in the second quarter as investors grew increasingly concerned about slowing global growth and the Eurozone debt crisis. Volatility jumped, and by early June many equity indices had declined significantly from last quarters highs. Investors fled into government bonds considered safe, such as U.S. Treasuries and German bunds, where yields neared historic lows. In June, however, investors took heart from government measures in Europe as well as signs that growth, though slowing, was not coming to a halt. As a result, equities recovered somewhat from the quarters lows. The S&P 500 Index declined 2.8% in the second quarter, with riskier Small Cap stocks, represented by the Russell 2000 Index, down 3.5%. Bonds benefitted from rising investor fears, and the ML US Broad Market Index increased 2.2%. U.S. Treasuries, considered a safe haven, led performance with a 3.0% gain. Other areas of the markets sensitive to economic growth, especially commodities, posted dramatic declines. Outside the U.S., developed markets posted negative returns in U.S. dollars (partly because the euro fell against the U.S. dollar) while Emerging Markets, as represented by the MSCI Emerging Market Index, plunged 8.9%.

S&P 500 WITH DIVIDENDS RUSSELL 3000 RUSSELL 1000 RUSSELL 1000 GROWTH RUSSELL 1000 VALUE RUSSELL MIDCAP RUSSELL MIDCAP GROWTH RUSSELL MIDCAP VALUE RUSSELL 2000 RUSSELL 2000 GROWTH RUSSELL 2000 VALUE Fixed Income ML US BROAD MARKET BOND ML US TREASURY MASTER ML CORPORATE MASTER ML HIGH YIELD MASTER ML MORTGAGE MASTER ML MUNICIPAL MASTER USD EMERGING MARKET SOVEREIGNS PLUS ML CONVERTIBLE BOND INDEX Global Equities* MSCI WORLD INDEX MSCI EAFE INDEX MSCI EUROPE MSCI EMERGING MARKETS MSCI PACIFIC

Austerity vs. Growth

In May, equities markets fell rapidly as the European debt crisis continued to worry investors. The debate of growth versus austerity became a public referendum of sorts in two European countries: Greece and France. (The debate pits those who believe that public spending and other measures, regardless of near-term deficits, are needed to stem the crisis as opposed to those who believe fiscal prudence, primarily through budget cuts, will restore confidence.) In Greece, voters favored parties that rejected the European bailout deal. In France, Socialist Party candidate Francois Hollande pledged to support growth over austerity, threatening to leave Germany, which has strongly supported austerity, isolated. As a result of the uncertainty posed by these elections, as well as evidence of slowing economic growth in the U.S. and China, investors around the world pulled out of riskier assets.
Investor sentiment improved somewhat in June. The Greeks ultimately elected a moderate party that supported austerity and Hollandes capture of the French presidency did not result in dramatic changes. Moreover, a deal was reached to help Spain bail out its crippled banks, though borrowing costs for both Spain and Italy remained relatively high.

*Morgan Stanley Capital International Indexes (MSCI). All Indexes include dividend reinvestment and are in U.S. dollar terms.

2007
40

2008

2009

2010

2011

2012

20 0
-20 -40

Looking Ahead
After watching Europes situation deteriorate in the second quarter, investors will likely focus more on the situation in the U.S., where voters will be choosing a president and a polarized government will face significant challenges on the fiscal and budgetary front. Of great concern is the fiscal cliff, a combination of automatic tax increases and budget cuts that, together, would likely push the U.S. economy into recession if measures are not taken.
GLOBAL WEALTH MANAGEMENT INVESTMENT MANAGEMENT AND GUIDANCE SECOND QUARTER 2012

-60
MSCI EAFE -NET S&P 500 WITH DIVIDENDS CASH ML US BROAD MARKET BOND INDEX RUSSELL 2000

*All figures, unless otherwise specified, are in U.S. dollar terms. 2012 Bank of America Corporation. Printed in the USA. All rights reserved.

Equity Focus
Performance by Style (%)

As volatility rose, U.S. equities ended lower in the second quarter, with U.S. Midcap and Small Cap stocks
among the lead underperformers, down 4.4% and 3.5%, respectively, as represented by the Russell Midcap Index and Russell 2000 Index, respectively. U.S. Large Caps, represented by the Russell 1000 Index also posted negative returns, declining 3.1%.
S&P 500
15 10 5 0 -5 -10

Russell 1000 Russell 1000 Russell Growth Value Mid Growth

-4.0 10.1 -2.2 8.7 -5.6 8.1

Russell Russell 2000 Russell 2000 Mid Value Growth Value

-3.3 7.8 -3.9 8.8 -3.0 8.2

-2.8

9.5

Large Cap Value stocks outperformed Large Cap Growth stocks, as investors sought out income from
companies that pay dividends.

Yield led performance, with Telecommunications the lead sector, up 14.1%. Defensive sectors also benefitted
from investor concern. Utilities rose 6.5%.

Financials were the worst performing sector, falling 6.8% as investors confronted the potential for a stricter
regulatory environment.

U.S. equities were volatile for the quarter as concerns over a global slowdown deterred investors from taking risks. Markets peaked in the beginning of the quarter before dropping dramatically in the end of May, after uncertainty in Europe and disappointing U.S. economic news heightened investor worries that a global economic slowdown could continue. U.S. gross domestic product (GDP) growth was revised downwards in May. In June, the lower-than-expected jobs report continued to shake investor confidence. The S&P 500 was down 2.8% for the quarter.

Index Returns S&P 500 RUSSELL 1000 GROWTH RUSSELL 1000 VALUE RUSSELL MIDCAP GROWTH RUSSELL MIDCAP VALUE RUSSELL 2000 GROWTH RUSSELL 2000 VALUE

Q2 2012 -2.8 -4.0 -2.2 -5.6 -3.3 -3.9 -3.0

YTD 2012 9.5 10.1 8.7 8.1 7.8 8.8 8.2

Performance by Size (%)

Russell 1000
10 5
0 -5

Russell Midcap
-4.4 8.0

Russell 2000
-3.5 8.5

Defensive Sectors Led Performance

As volatility rose, investors sought safety in defensive sectors. Utilities were up 6.5% and Healthcare rose 1.7%. The Energy and the Materials sectors, which have high exposure to economic growth, lagged and were down 6.0% and 4.2%, respectively. Financials posted one of the worst performances for the quarter, down 6.8%, in part due to investor concerns over the potential for tougher regulations for the sector.

-3.1

9.4

Value Outperformed Growth; Large Cap Beat Small Cap

Investors preferred Value stocks to Growth stocks in the quarter, as investors focused on income among companies that offered dividends. The Russell 1000 Growth Index returned -4.0% for the quarter, compared to 2.2% for the Russell 1000 Value Index. Larger companies outperformed small. The Large Cap Russell 1000 Index returned -3.1% while the Small Cap Russell 2000 Index was down 3.5%.

Index Returns RUSSELL 1000 RUSSELL MIDCAP RUSSELL 2000

Q2 2012 -3.1 -4.4 -3.5

YTD 2012 9.4 8.0 8.5

Performance by S&P 500 Sector (%)

Sector
TELECOMMUNICATIONS UTILITIES CONSUMER STAPLES HEALTHCARE CONSUMER DISCRETIONARY INDUSTRIALS MATERIALS ENERGY INFORMATION TECHNOLOGY FINANCIALS
-10% -5% 0% 5% 10% 15% 20%

Looking Ahead
Investors will continue to evaluate potential actions by government policymakers to see if they will offer solutions to stimulate economic growth. They will also begin to focus on the upcoming November U.S. presidential election and how the U.S. election uncertainty may affect the markets.

Q2 2012

YTD 2012

Q2 2012
14.1 6.5 2.9 1.7 -2.6 -3.6 -4.2 -6.0 -6.7 -6.8

YTD 2012
16.5 4.8 8.6 11.0 12.9 7.3 6.5 -2.3 13.3 13.7

GLOBAL WEALTH MANAGEMENT INVESTMENT MANAGEMENT AND GUIDANCE SECOND QUARTER 2012

2012 Bank of America Corporation. Printed in the USA. All rights reserved.

Fixed Income Focus

Fixed Income Index Performance (%)

Bonds rose in the second quarter as investors fled riskier assets. Safer bonds led performance in the quarter with the ML US Treasury Master rising 3.0%, and the ML US
Treasuries 15+ Yrs Index up 11.2%.

Sector
ML US BROAD MARKET BOND ML US TREASURY MASTER ML CORPORATE MASTER ML HIGH YIELD MASTER ML MORTGAGE MASTER ML MUNICIPAL MASTER ML 3 MTH US T-BILLS ML 1-3 YR TREASURY ML 3-5 YR TREASURY ML 5-7 YR TREASURY ML 7-10 YR TREASURY ML 10-15 YR TREASURY ML US TREASURIES 15+ YRS ML CONVERTIBLES
-5%

Q2 2012

YTD 2012

Q2 2012
2.2 3.0 2.4 1.8 1.1 2.0 0.0 0.2 1.2 2.8 4.8 6.4 11.2 -2.7

YTD 2012
2.5 1.7 4.9 7.1 1.7 4.1 0.0 0.1 0.8 2.1 3.2 3.7 4.3 6.9

Muni bond performance has remained steady, with the ML Muni Master up 2.0%. With falling interest rates,
longer maturity municipals rallied.

The second quarter marked another flight to safety for investors as they sold equities and turned to U.S. bonds amid a volatile market. The Treasury yield curve flattened along with the rally in Treasuries, with the 10-year Treasury yield ending well below the 2% level, finishing the quarter at 1.67%.

Investors Turned to High Quality Bonds

Investors sought out high-quality securities in particular, with AAA rated bonds outperforming lower investmentgrade and high-yield corporate issues. The ML US Broad Market Index rose 2.2%; U.S. Treasuries were up 3.0%. Higher quality global sovereign bonds rallied to historically low yields as the three countries currently at the center of the European debt crisis, Greece, Italy and Spain, all experienced significant spikes in yields.

0%

5%

10%

15%

Treasury Yield Curve (%)

3 Month
5 4 3 3.3 2.9 2.8

Munis Remained Steady

The municipal bond market remained stable in the second quarter, with the ML Muni Master Index up 2.0%, as the asset class did not experience the flight-to-quality environment seen in the global taxable bond markets. Longer maturity municipals rallied, along with Treasuries, as interest rates fell. Muni performance also reflected higher demand from investors attempting to take advantage of what they believe are attractive municipal versus Treasury ratios. The municipal bond market experienced a notable increase in issuance in the second quarter ahead of what has historically been a period of very low issuance in July and August.

6 Month

2 Year

5 Year

10 Year

30 Year

2 1 0

Looking Ahead
During the next quarter, investors will look for signs of market stability. They will also be watching global government policymakers, particularly in Europe, for evidence that the region is a step closer to resolving its financial problems.

As of 12/31/2011 As of 3/31/2012 As of 6/30/2012

Higher Quality Led Fixed Income Performance in Q2 2012

ML US Treasury Master
10 5 0

ML Corporate Master
2.4 4.9

ML High Yield Master

1.8 7.1

3.0

1.7

Index Returns ML US TREASURY MASTER ML CORPORATE MASTER ML HIGH YIELD MASTER

GLOBAL WEALTH MANAGEMENT INVESTMENT MANAGEMENT AND GUIDANCE SECOND QUARTER 2012

Q2 2012 3.0 2.4 1.8

YTD 2012 1.7 4.9 7.1

2012 Bank of America Corporation. Printed in the USA. All rights reserved.

International Focus
MSCI EAFE Returns (%) in U.S. Dollar Terms - Net

International equities were down for the second quarter as the European debt crisis deepened. Greece led
the European stock decline, down 27.5% .*
10 5 0 -5 -10 -15

Japan
-7.3 3.1

United Kingdom
-4.0 3.4

Germany
-12.4 5.9 -9.0

France
2.1 -7.1

EAFE
3.0

Emerging Markets, which are considered relatively risky, led underperformance, dropping 8.9%. In developed markets, Germanys performance was especially weak, declining 12.4%. The U.S. dollar held strong against most major currencies with the exception of the Japanese yen, leading
to lower performance for U.S.-based investors who hold foreign investments.
Investors continued to favor the U.S. markets over other international developed markets due to the fiscal problems in Europe and the slowing growth in the Emerging Markets. The S&P 500 returned -2.8% in the quarter versus -7.1% for MSCI EAFE and -8.9% for MSCI Emerging Markets.

Market JAPAN UNITED KINGDOM GERMANY FRANCE EAFE

Q2 2012 -7.3 -4.0 -12.4 -9.0 -7.1

YTD 2012 3.1 3.4 5.9 2.1 3.0

Eurozone Fiscal Woes Renewed Investor Worries

Investors sold off international equities in the second quarter, primarily driven by renewed concerns over the financial crisis in the Eurozone. Investors worried over a possible Euro breakup with the potential departure of Greece, the liquidity problems facing Spanish banks and the potential for the crisis to spread to peripheral countries, especially Italy. The elections in France and Greece also led to uncertainty over the direction of the new leadership.

Performance of Major Currencies Against the U.S. Dollar in Q1 (%)

Sector
JAPANESE YEN SINGAPORE DOLLAR AUSTRALIAN DOLLAR SOUTH KOREAN WON TAIWANESE DOLLAR CANADIAN DOLLAR BRITISH POUND NEW ZEALAND DOLLAR MEXICAN PESO SWEDISH KRONA NORWEGIAN KRONE SWISS FRANC DANISH KRONE EURO SOUTH AFRICAN RAND BRAZILIAN REAL
-10% -5% 0% 5%

Q2 2012

Q2 2012
3.9 -0.6 -1.0 -1.1 -1.2 -1.8 -1.9 -2.1 -4.1 -4.4 -4.5 -4.9 -5.0 -5.1 -6.0 -9.1

Symbol
JPY SGD AUD KRW TWD CAD GBP NZD MXN SEK NOK CHF DKK EUR ZAR BRL

Developed Markets Led Emerging Markets

Given the level of concerns over solvency, Greece led the decline in European stocks, at -28.3%, followed by Germany at -12.4% and a 9.0% decline in France. Currency depreciation significantly contributed to Emerging Market underperformance. Emerging Markets were down 8.9% in the quarter, led mostly by the BRICs (Brazil, Russia, India and China) with Brazil returning -18.9%, Russia -14.4% and India at -9.5%.
The U.S. dollar remained strong against most of the currencies across major countries, with the exception of the Japanese yen, which appreciated 3.9%. The euro declined 5.1%, Swiss franc fell 4.9% and the British pound fell 1.9%. Investors pulled back significantly from the Emerging Market currencies for the quarter. The Russian ruble declined 9.5%, Brazilian real fell 9.1% and the Indian rupee fell 8.6%.

Looking Ahead
Looking ahead, international investors will review the new measures for the European bailout plan and its impact on the debt crisis. Investors will also continue to look toward policymakers for additional solutions to market volatility.
S&P 500
10 5

Return Comparison (%)

MSCI Emerging Markets
9.5 -8.9 3.9 -5.1

World
5.9 -7.1

EAFE
3.0

-2.8

0
-5 -10

*All figures, unless otherwise specified, are in U.S. dollar terms.

GLOBAL WEALTH MANAGEMENT INVESTMENT MANAGEMENT AND GUIDANCE SECOND QUARTER 2012

Index Returns S&P 500 MSCI EMERGING MARKETS WORLD EAFE

Q2 2012 -2.8 -8.9 -5.1 -7.1

YTD 2012 9.5 3.9 5.9 3.0

2012 Bank of America Corporation. Printed in the USA. All rights reserved.

Hedge Fund Focus*

The Dow Jones/Credit Suisse AllHedge Index was down 2.5% for the quarter, in line with faring slightly better
than the S&P 500. Performance by Style (%)
S&P 500 Index
15

Macro events, somewhat dormant in the previous quarter, came to the forefront as sovereign debt, Greek
elections, and the U.S. fiscal cliff concerns stifled investors risk appetite.

DJ/CS Hedge DJ/CS Global DJ/CS Long DJ/CS Event Fund Index Macro Short Driven
-2.5 1.5 -2.8 -1.9 -3.7 4.4 -3.5 0.1

DJ/CS Managed Futures

-1.4 -1.9

DJ/CS Emerging Markets

-7.6 0.6

-2.8

9.5

Markets became more risk-averse, and there were noticeable declines across the board in all strategies,
especially in May. Fixed income investment continued to be a lead performer.

10 5 0

Falling Commodity Prices Weakened Emerging Markets

Emerging Markets, as represented by the MSCI Emerging Market Index, fell 8.9% while the DJ/CS Emerging Market index was off 7.6%, BRIC nations (Brazil, Russia, India and China) plunged 11.6% according to the MSCI BRIC Index. Commodity-exporting nations felt the impact of falling prices and the potential global slowdown, especially in China.

-5

-10

Macro Overweighed Equity Long/Short, Event-Driven & Credit Fundamentals

The DJ/CS Long/Short Equity Index was off 3.7% for the quarter but up 4.4% for the year. Macro concerns in May led to heightened correlations and volatility and made for a difficult quarter for fundamental stock pickers. Event-driven & credit was also lower for the quarter with credit-sensitive hedge funds faring better than equitycentric and mergers and acquisitions. The DJ/CS Event-Driven Index fell 3.5% for the quarter and is basically flat for the year. Credit continued its upward trend in the second quarter, with total returns for high-yield bonds up 1.8% while bank loans improved by 1.1%. Year-to-date, bonds and loans are up 8% and 5.25%, respectively. New issuance saw an increase in covenant light deals, especially those emanating from Europe. Merger activity picked up in the second quarter versus the first quarter but was down 23.1% year-over-year.

Hedge Funds S&P 500 INDEX DJ/CS HEDGE FUND INDEX DJ/CS GLOBAL MACRO DJ/CS LONG SHORT DJ/CS EVENT DRIVEN DJ/CS MANAGED FUTURES DJ/CS EMERGING MARKETS

Q2 2012 -2.8 -2.5 -2.8 -3.7 -3.5 -1.4 -7.6

YTD 2012 9.5 1.5 -1.9 4.4 0.1 -1.9 0.6

These Trends Played a Role in Q2 2012 Hedge Fund Performance

S&P 500 (%)
15

Commodities (%)
9.5
0

U.S. Dollar Index (%)

4

Relative Value Down Marginally While Global Macro and Managed Futures Had Tough Course
Relative value was down marginally for the quarter with convertible arbitrage and low volatility credit results flat to muted. Equity market neutral, however, felt the brunt of the heightened correlations and volatility as the DJ/CS Equity Market Neutral Index finished 3.3% lower, erasing the previous quarters gains. Managed Futures and Global Macro were down 1.4% and 2.8%, respectively, according to their DJ/CS indexes. The lack of visible long-term trends made navigation difficult. Commodity markets fell dramatically in May, some registering doubledigit losses. By June, commodities saw wide dispersion with a sharp decline in oil, significant gains in natural gas and agriculturals and mixed performance in metals. Fixed income, specifically in the U.S., UK and Germany, continued to be the most consistent positive performer.

-2.8

-6.7

-6.9

3.3

1.8

10
5 0 -5

-2
-4 -6 -8

3
2 1 0

Looking Ahead
The focus will continue to be on further signs of contagion from the European debt crisis and additional indications of a global growth slowdown as recently seen by weak economic numbers from China and the U.S. The possibility of disappointing second quarter U.S. corporate earnings may also contribute to less-thanoptimistic market sentiment.
*Alternative Investment products may only be sold by AI-qualified Financial Advisors to pre-qualified clients. Most alternative investment products are sold on a private placement basis and eligible clients must typically be Qualified Purchasers ($5 million net investments).
GLOBAL WEALTH MANAGEMENT INVESTMENT MANAGEMENT AND GUIDANCE SECOND QUARTER 2012

Index Returns S&P 500 Index Commodities (Reuters Jefferies CRB Index) U.S. Dollar Index Past performance is no guarantee of future results.

Q2 2012 -2.8 -6.7 3.3

YTD 2012 9.5 -6.9 1.8

The hedge fund indices shown are provided for illustrative purposes only. They do not represent benchmarks or proxies for the return of any particular hedge fund product. The hedge fund universe from which the components of the indices are selected is based on funds which have continued to report results for a minimum period of time. This prerequisite for fund selection interjects a significant element of "survivor bias" into the reported levels of the indices, as generally only successful funds will continue to report for the required period, so that the funds from which the statistical analysis or the performance of the indices to date is derived necessarily tend to have been successful. Merrill Lynch assumes no responsibility for any of the foregoing performance information, which has been provided by the index sponsor. Neither Merrill Lynch nor the index sponsor can verify the validity or accuracy of the self-reported returns of the managers used to calculate the index returns. Merrill Lynch does not guarantee the accuracy of the index returns and does not recommend any investment or other decision based on the results presented.
2012 Bank of America Corporation. Printed in the USA. All rights reserved.

Important Information
The opinions expressed herein are those of the Merrill Lynch GWM Investment Management & Guidance as of June 30, 2012 and are subject to change. It is provided as general market commentary only, and it does not consider the specific investment objectives, financial situation or particular needs of any one client. It should not be considered a recommendation or solicitation to purchase or sell any security. There is no guarantee that any future event discussed herein will come to pass. When reading this commentary, you should consider that investments in securities involve risk and you could lose some or all of the amounts you have invested. The information herein was obtained from various sources, which we believe to be reliable, but we do not guarantee its accuracy or completeness. The indexes referenced herein are unmanaged and are not available for direct investment; returns assume no management, transaction or other expenses and also assume reinvestment of dividends, interest and/or capital gains. Past performance does not guarantee or indicate future results. MERRILL LYNCH ASSUMES NO RESPONSIBILITY FOR ANY OF THE FOREGOING PERFORMANCE INFORMATION, WHICH HAS BEEN PROVIDED BY THE INDEX SPONSOR. NEITHER MERRILL LYNCH NOR THE INDEX SPONSOR CAN VERIFY THE VALIDITY OR ACCURACY OF THE SELF-REPORTED RETURNS OF THE MANAGERS USED TO CALCULATE THE INDEX RETURNS. MERRILL LYNCH DOES NOT GUARANTEE THE ACCURACY OF THE INDEX RETURNS AND DOES NOT RECOMMEND ANY INVESTMENT OR OTHER DECISION BASED ON THE RESULTS PRESENTED. Past performance is not necessarily indicative of future results, and the comparison of Dow Jones/Credit Suisse hedge fund indices (each, an Index) of actively managed funds to passive securities indices has material inherent limitations. In addition, the results of each Index is subject to a variety of potentially material distortions compared to an actual hedge fund investment due to a number of factors, including without limitation, the manner in which the funds which comprise the Index are selected. The hedge fund universe from which the components of the Index are chosen is based on funds which have continued to report results for a minimum period of time. This prerequisite for fund selection interjects a significant element of survivor bias into the reported levels of the Index, as generally only successful funds will continue to report for the required period, so that the funds from which the statistical analysis or the performance of the HFR Index to date is derived necessarily tend to have been successful. There can, however, be no assurance that such funds will continue to be successful in the future. The relative weightings of the performance of the constituent funds in calculating the Index may further bias the Index towards successful funds. The general volatility and drawdown reduction effects of combining the performance of multiple funds must also be borne in mind when considering the performance of the Index. In addition, alternative investment funds are subject to a risk of ruin which is not reflected in the standard deviation of their returns, the only measure of risk used in calculating Sharpe Ratios. It is not possible to invest directly in a hedge fund index and the indices presented are not intended as performance benchmarks for any particular investment product. Hedge funds are speculative and involve a high degree of risk. An investor could lose all or a substantial amount of his or her investment. The use of a single fund of funds manager applying one set of allocation procedures could mean lack of diversification and, consequently, higher risk. There is no secondary market nor is one expected to develop for investments in hedge funds and there may be restrictions on transferring fund investments. Hedge funds may be leveraged and performance may be volatile. Hedge funds have high fees and expenses that reduce returns. A substantial portion of the trades executed by the underlying managers may take place on non-US exchanges. Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility. There are special risks associated with an investment in commodities, including market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes, and the impact of adverse political or financial factors.

MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation. 2012 Bank of America Corporation. All rights reserved. ARL6Z216

GLOBAL WEALTH MANAGEMENT INVESTMENT MANAGEMENT AND GUIDANCE SECOND QUARTER 2012

2012 Bank of America Corporation. Printed in the USA. All rights reserved.