EFTA01458253.pdf

time poulient Fccist 7.14 he ICIUDS linottroen% Vela light, 4444444= p4apac.tioos Americas PrAtt)Ith 14.alivirret;h3(114“, Commodities Alternatives 1.0% Portfolio 10.0% Equities Our asset-class allocation in a balanced ... 30% 255%_.. portfolio -25% 11.3% 4 3% Traditional asset classes 2.0% 4.0% Within the core part of our balanced portfolio, we tom 2 3% cover traditional liquid assets such as equities, fixed income and commodities. The chart shows how we would currently design a balanced portfolio, including 40.5% alternative asset classes.' Fixed income Equities stigirst441 weight a Equities Developed markets 435% Equities have been unsettled by developments in China, but fundamentals in the developed markets remain sound. U.S. a United States 25.5% second-quarter corporate earnings came in better than expected and European earnings growth (excluding energy stocks) was a Europe 11.6% even stronger. Japanese earnings have also increased. Volatility Japan 4 5% is likely to increase around a Fed rate hike but could create NH Pacific ex Japan 2.0% buying opportunities. Emerging markets have found the going tougher and could suffer further both from a U.S. rate hike Emerging Markets 5.0% and also developments in China. Emerging-market equities in Asia ex Japan 4.0% economies with substantial current-account deficits could be particularly vulnerable. Latin America 1.0% Fixed income ■ Fixed income Credit 2.6% Once the Fed starts hiking rates, the pace is expected to gentle, Satereig06' 32.5% meaning that major-developed-market government yields are Emerging markets 25% unlikely to increase sharply over the next 12 months. With the ECB persevering with quantitative easing, the differential Cash 3 0% between U.S. Treasuries and German Bunds is also likely to Commodities continue. On the corporate side, high levels of recent issuance Commodities 1 0% help keep us cautious on investment grade. U.S. high-yield could be affected by concerns over energy-sector borrowers, but we Alternatives continue to see some opportunities in this asset class. Emerging- Alternatives 10.0% markets hard-currency debt may offer relatively high yields, but also increasing levels of risk. a Commodities Sources.. Regional Investment Committee ;RIC), Commodity prices face two key headwinds: a strong U.S. Deutsche Asset & Wealth Management Investment dollar and concerns about Chinese demand. In the case of oil, GmbH, Deutsche Bank Trust Company Americas, worries about possible future increases in supply will continue as of 8118/15. to create additional downwards pressure. While lower prices This allocation may not be suitable for all investors. will eventually lead to lower supply, this process is likely to take time. Evidence of stronger Chinese growth might provide some Past performance is not indicative of future returns. support. but a sharp rebound in oil and other commodity prices No assurance can be given that any forecast, investment looks most unlikely. Gold has benefited to a limited extent from objectives and/or expected returns will be achieved. recent market uncertainty but a rise in interest rates would Allocations are subject to change without notice. probably be a negative for this commodity. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be ' Alternative investments are dealt with separately in the incorrect. next chapter. Alternatives are not suitable for all clients. 120 t= 444.444. 4". tte.)1/4.4 1 airittic44 Eithh, I SW4rAtl. 20'S CONFIDENTIAL — PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0118079 CONFIDENTIAL SDNY_GM_00264263 EFTA01458253