EFTA01457962.pdf

Hee pouliont Fccia The be Pthie linottrocm‘viffie light, Ant-Sus Nrtpactioes Americas PrAtiolth .4.alivirretuon Commodities Alternatives 1.O% Portfolio MO% Equities Our asset-class allocation in a balanced _30% 255%.... portfolio -30% 12.0% Traditional asset classes 2 0% 3 3% ,_345% 4.0% Within the core part of our balanced portfolio, we cover traditional liquid assets such as equities, fixed 2.544 income and commodities. The chart shows how we would currently design a balanced portfolio, including 41,Q% alternative asset classes.' Fixed income Equities Equities sowyrst(s1 weight Although there was significant progress on dealing with Developed markets 430% Greece's problems in July, we believe that periods of uncertainty are likely and, as a result, further bouts of volatility. We maintain United States 25.5% a preference for developed over emerging-market equities. Europe 12.0% We believe that in Europe, if progress continues to be made on Greece, markets could refocus their attention on recent Japan 3 5% encouraging corporate earnings news. U.S. equities have proved ill Pacific ex Japan 2.0% relatively resilient so far this year, but a temporary reversal remains possible. Chinese equities have a serious source of Emerging Markets 5.0% concern but may gain from stronger Chinese growth later in the Asia ex Japan 4.0% year. Latin America 1.0% Fixed income ■ Fixed income We still expect the U.S. Federal Reserve to start increasing rates fl Credit 2.6% later this year, most likely starting in September. Conversely the E Sovereigns 32.5% European Central Bank (ECB) will push ahead its quantitative- Emerging markets 3.0% easing program, so monetary-policy divergence will therefore remain a key theme. Sovereign-bond holdings will remain an Cash 30% important way of reducing risk in a portfolio and we continue to Commodities have an overweight to fixed income overall. Periphery Eurozone Commodities 1 0% sovereign debt may offer some opportunities but we have grown more cautious on emerging-market debt, particularly given Alternatives recent volatility. U.S. investment orade may be held back by the n Alternatives 10.0% impending Fed rate hike and U.S. and European high-yield will remain susceptible to the newsflow. Sources: Regional Investment Committee (RIC), Deutsche Asset & Wealth Management •Commodities Investment GrnbH, Deutsche Bank Trust Company Continued caution seems advisable. Oil prices fell back again Americas. as of 7/21/15. recently, due in part to evidence that U.S. oil-rig count was again This allocation may not be suitable for all investors. increasing. The oil market still appears to be in oversupply and. longer-term, the Iran deal could exacerbate this problem. There Past performance is not indicative of future returns. are also demand concerns, for example around China. Gold No assurance can be given that any forecast, investment prices rose only modestly when the Greek crisis intensified and objectives and/or expected returns will be achieved. we still believe that gold will face considerable headwinds from Allocations are subject to change without notice. the expected further strengthening of the U.S. dollar arid rise in Forecasts are based on assumptions, estimates, U.S. interest rates. opinions and hypothetical models that may prove to be incorrect. ' Alternative investments are dealt with separately in the next chapter. `i °trit 4.4. t.7.....re a Ammaa. Edi6)61 A:taun-1 7015 CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0117699 CONFIDENTIAL SDNY_GM_00263883 EFTA01457962