EFTA01459576.pdf

Review of 2015 Themes Total Score for 2015 = 90% Investment Theme Investment Theme Grade Rationale Recommendation Dial Down Return Expectations as S&P 500 PE contracted for the first time since 2011 and average Good, but Not "Great Valuations are Less Attractive and daily S&P 500 volatility (16. 7)was the highest since 2012. FX and Expectations" Volatility is to Increase Treasury Volatility also increased. U.S. to be the Developed Market The U.S. is on path to post 2 2% growth compared to 1 4% in Diverging Dynamics in Monetary eader, Leading to Diverging Monetary Europe and 0.8% in Japan. The Fed hiked rates for the first time Policy Policy since 2006. while the ECB announced QE Slight Rise in Treasury Yields: Favor 10 Year treasury yields rose only 10 bps throughout 2015 Fixed Income — Shooting at Small 1vestment Grade and High Yield over However, both high yield and investment grade credit Targets Treasuries underperformed treasuries. EM hard currency bonds significantly outperformed both local Favor EM Hard Currency Bonds over EM Fixed Income - Hard Pressed currency bonds and the Barclays Agg by 1167 bps and 74 bps, EM Local Currency Bonds respectively. Accommodative Policy Will Dnve While the S&P 500 is on pace to post slightly positive earnings DM Equities- "Earning"Their Global Equities Higher S&P will Post and returns for the seventh straight year. On the back of weaker Way Higher Positive Returns for Seventh Year currencies, Europe and Japanese earnings outpaced the V.S. Both the S&P 500 Dividend Aristocrats Index (+0.93%) and the Dividend Stocks Favor Dividend Paying Stocks EuroStoxx 50 (7 3%) were positive in 2015 Th e NASDAQ will reach a record high. The NASDAQ reached a record high in 2015 Both consumer Sector Focus Favor Consumer Discretionary and discretionary (+10 1%) and info tech (+5.9%) outperformed the Info Tech S&P 500 (+1.4%). DM equities (MSCI EAFE -0.4% USD) outperformed EM equities EM Equities - Honey I Shrunk the Favor DM Equities over EM Within (MSCI EM' -14.6% USD) by 1421 bps Within EM. Asia Growth Premium EM, favor Asia over LATAM outperformed LATAM by 2192 bps. The Dollar Will Continue to Rally in The Dollar rose -9% in 2015 and has rallied against every major Dollar Dominance to Continue 2015. Invest on a Currency Hedged currency. While the MSCI AC World is down 1.8% in USD terms, Basis it is up 1.8% in local terms. Real Assets — Rank Rattle and Favor REITs and Infrastructure Over While REITs (+2.8%) outperformed both gold (-10.5%) and crude Roll Crude Oil and Gold oil (-30.5%), infrastructure (-14.4%) lagged gold returns. Deutsche Bank Footnotes. Data as of December 31, 2015. ttic-c-ht Source: FactSet, Bloomberg Finance LP, Deutsche Bark'"V”. " 1- 31 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0 120080 CONFIDENTIAL SDNY_GM_00266264 EFTA01459576