EFTA01377061.pdf

CIO Insights August 2016 Lotter to investors 4 • w T Thinking like this moves us away the ability of a static strategic asset from a simple binary risk on/risk off allocation to boost returns is limited calculation. We must think instead by increased correlations between about the broad path that can best asset classes. navigate us through the changing What this means in practice is that landscape. strategic asset allocation could need The good news is that the ground to be complemented by a constantly we are travelling on is rough but monitored tactical asset allocation, not impassable: global growth is individual security selection and, forecast at 3.3% in 2016 and 3.4% in of course, risk management to 2017 and most central banks could help protect the value of a portfolio remain in a highly supportive mode against potential downturns. Doing - although their efforts still need to this - as we approach and then move be supported by a political drive for through future inflection points - will structural reform. require knowledge and dexterity. I'm convinced that such a multi- The challenge is that staying on faceted approach is a thoughtful way the middle of the path may not to manage your wealth through the yield particularly attractive returns. coming months and years. Equity markets look unlikely to move much higher over the next 12 months. Many government bond investments already carry negative returns and market liquidity issues are another reminder of how important it is to have active fixed income management. Moreover, OAAFkikAVE71-1-tte, Christian Nolting Global CIO Past performance is not indicative of future returns. Readers should refer to the explanatory notes at the end of this document. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0073597 CONFIDENTIAL SONY GM_00219781 EFTA01377061