EFTA01459022.pdf

Ninn Ne.cON-4 10<a) Tha Stoic Imes:emir truth:. I19h73 A; m %MO* HC210)1.14:1*ii 4039 Henning Gebhardt, Global Head of Lotheev Equity-market perspectives Equity-market outlook for 2016: tactical, selective and constructive Global equity markets have recovered since mid-September. and digitalization, particularly in the technology sector. Cloud most stock-market indicators are approaching the levels we had computing or big data are no longer just catchwords - they have forecast :twelve months ago. What will 2016 bring? turned into multi-billion U.S. dollar sales drivers. The most recent price corrections in pharmaceuticals offer selective entry points Seven years after the start of the Groat Financial Crisis, markets in order to participate in seminal progress in cancer research. have entered a mature phase. For this reason, 2016 and beyond Financials, meanwhile, should benefit from the expected rate should only yield mid-single-digit total returns. At the same time, move of the Fed. we have to acknowledge a higher risk that annual returns could easily turn negative. Tact€cal and selective equity investment could turn 2016 into another successful year. With a view to stock valuations, we do not see much further upwards potential for price-to-earnings {P/E) ratios. Our Global dividends could hit a new high in 2016 .4.11 constructive view on equities is therefore based on expected OS . 0, +nr moderate earnings growth and dividends. Earnings growth should be driven by successful firms in the technology, 45 healthcare, finance and consumption sectors. Dividends, in 40 turn. are gaining in significance: globally speaking, distributions should reach a record level in 2016. In an environment of very 3S low or negative interest rates, an expected median dividend of 2.5%' is significant. The share of dividends in equities' total 75 returns should increase in the years to come, since the potential for share-price gains has decreased compared with previous 20 years. Our preference for equities from developed markets remains unchanged. In 2016, many emerging markets might face further headwinds from low commodity prices and decelerating growth in China. But we do not have any distinct preferences within the United States, Europe and Japan. Earnings growth should .es9,0\te4Veceo.tcpte'itteii:P.i4"Pi<",?,,,,,-> be similar in all three regions in 2016 and less influenced by II MSCI World Index dividends per share currency fluctuations than in 2015. The aggregate nominal payout by listed companies is likely In 2016, our focus will, therefore, be more on the selection to increase in 2016 for the 8th time in a row, setting another of sectors and stocks and less on regional allocations. Equity new record. investors will find the winners of further developments in Source: FactSer Research Systems Inc.; as of 11/2015 e = market expectations ' Expected dividend yield for the MSCI World Index 2016 Past performance is not indicative of future returns. No assurance can be given that any forecast, investment objectives and/or expected returns will be achieved. Allocations are subject to change without notice. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect. Investments come with risk. The value of an investment can fall as well as rise and your capital may be at risk. You might not get back the amount originally invested at any point in time. *Vew itawcwg ectsionINeater b?r, 2= irnt i? CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0119222 CONFIDENTIAL SDNY_GM_00265406 EFTA01459022