Mid-Year Investment Outlook June 2015 by ABN AMRO I-Comms

mindful moves

Mid-Year Investment Outlook June 2015

Contents Mindful moves

Active strategies review

All of the pieces to fall into place

Equities can rise further in 2015

Megatrends lead equities higher

Time to take profits in bonds

Hedge funds: benefiting from divergence

Steady recovery in real estate

Private equity: mature but dynamic

Commodities: a bumpy ride to equilibrium

Dollar strength to dominate

Forecasts

Positioning for performance

Asset allocation profiles

Contributors

This is an international ABN AMRO publication. Risk profiles and availability of investment products may differ by country. Your local advisor will be able to provide more information.

mindful moves Active and vigilant

After remarkable performance in the first half of the year, investment prospects remain positive. It is now a more challenging environment, however, for risky assets. The extraordinary support from central banks will continue to influence markets, but it is also creating side-effects, such as herd behaviour and intermediate corrections. Paradoxically, these corrections are necessary and healthy. They promote risk awareness and prevent momentum trends from turning into bubbles. Our conviction remains that equities will continue to outperform cash and bonds in the second part of the year. We expect the European recovery to gather pace and for the US economy to regain the ground lost in the first quarter. Asia remains key for exposure to growth and diversification.

Didier Duret Chief Investment Officer, ABN AMRO Private Banking June 2015

We believe that the path to a more normal US monetary policy and the vulnerabilities caused by near-zero bond yields call for a new perspective on managing investments, where strong convictions are blended with vigilant risk awareness. A very active investment approach is required. For our ABN AMRO Private Banking clients, we are proposing a large number of active strategies with special attention to non-consensus trades. We recommend building-in diversification in equities to avoid the risk of local corrections, using commodities as a hedge for reversals in other asset classes and implementing purposeful hedge-fund strategies to cushion the expected volatility along the way. The ABN AMRO Private Banking investment team, who are responsible for this Mid-Year Investment Outlook, provide more information on their recommendations in the pages that follow. Your Relationship Manager or local Investment Advisory Centre (see back cover) stand ready to assist you to prepare for what is ahead in the second part of the year and beyond.

Mindful moves As the rally in equity markets matures and bond yields tumble, the case for diversification increases. We advise staying active as the recovery progresses and remaining aware of the benefits of diversification to reduce risk.

There are powerful fundamental forces in favour of equities, while the character of bond markets has altered completely. There is also increased volatility in currencies, while financial markets remain highly sensitive to the behaviour of central banks. We remain positive on equities and continue to maintain an overweight position. After the market’s progression had swelled the equity portion of client portfolios beyond the targeted strategic allocation, we rebalanced it in late April by taking profits. In the wake of declining and negative bond yields, we again reduced our underweight allocation to bonds, where it is now at a minimum. For diversification, we recommend a combination of inflation-linked bonds, commodities, small caps and hedgefund strategies, which alongside a well-balanced portfolio of US, European and Asian equities can mitigate the risk of corrections.

Mindful moves for diversification Momentum risk

Local risk International equities

• Commodities • Long/short equity • CTA

Remaining value • Small caps • Inflationlinked bonds • High yield

Trends in an uneven recovery XXThe

economic recovery continues to depend on central bank policies. Europe is finally moving away from deflation, the US economy should accelerate in the second half of 2015 and China policymakers are pursuing a controlled slowdown. XX The depreciation of oil prices and the euro have not yet fully affected economies and company earnings. The positive effects of lower oil prices on growth, inflation and balance sheets will support equity markets, but short-term volatility will persist. XXEquity investment drivers have changed. Fundamentalsbased equity selection has given way to momentum positioning.

Challenges linked to the unprecedented monetary policies XXThe

forceful actions of central banks are creating new problems. The side-effects of monetary policies include challenges to the traditional role of bonds in portfolios and pension-funds struggling to fund liabilities. XXConsensus views are leading to momentum positioning. This is spurring profit-taking and creating corrections in the US-dollar exchange rate and in government bond markets. The short-term volatility of European equities has also increased. XXThe low cost of funding has decreased the incentive for states to reduce debt burdens and implement reforms, which could hamper the eurozone recovery.

Diversifying opportunities equities, which bear less risk than domestic equities and reduce the impact of local corrections. XXSmall- and mid-caps will benefit from inflows now that large-cap shares have become expensive. XXPrivate equity (for qualified investors) can diversify market risk. XXHigh-yield and inflation-linked bonds are the last segments of value in bond markets. XXCommodities can mitigate adverse movements in bonds, equities and currencies. XXHedge fund strategies, such as those that can exploit short positions (long/short equity), trend reversals (CTA/managed futures) and corporate actions (event-driven) are favoured for their diversification and return characteristics. XXInternational

Didier Duret – Chief Investment Officer

Source: ABN AMRO Private Banking

June 2015

Active strategies review ■■ Twelve of sixteen active strategies outperformed benchmarks year-to-date. ■■ Market momentum is boosting equities. ■■ Equity diversification across regions and sectors is rewarded. The Global Investment Committee is a successful active investor. It has implemented 16 active strategies, representing 72% of the portfolio. Twelve of the 16 active strategies have had better returns than their benchmarks year-todate, as of 30 April 2015. Most of the active equity strategies (Europe, emerging markets Asia and selected sectors) benefited from strong market momentum. The overweight in commodities was a contrarian strategy, while the overweight allocation to hedge funds was implemented to reduce portfolio volatility. Performance in most asset categories for the first four months of the year clearly outpaced the annual long-term ten-year return. (See Graphic.) Ranking the performance of our active strategies demonstrates the power of holding strategies for the long haul. Emerging markets equities, for example, ranked high in both the long- and short-term, albeit, at the cost of higher shortterm volatility. It can also be seen that international equity diversification is paying off, as there is a wide range of returns across countries and sectors in the long and short term. Not all of our active strategies outperformed. The underexposure to US equities in 2014, for example, and, more recently, underexposure to the telecoms sector and India hurt performance. But, again, diversification can help deflect the risk to the overall portfolio when some strategies do not perform as expected. Our current active equity strategies fit into long-term industrial and geographical trends. The outperformance of European equities year to date (16.6% year to date versus 13.7% for global equities) is a sign that the European market is progressively catching up after long-term underperformance. In 2015, we expect that bond returns will be limited, as we are not far from historical low points in yields, due to the phenomenal monetary easing by central banks and demand based on a need for safe assets. The risk for bonds is owing to a combination of volatility and extremely low yields in an environment where central banks are succeeding at boosting inflation.

Active strategy absolute performance Year-to-date

2014

10-year (annualized)

Equities China 36.2%

Equities India 40.9%

Equities China 17.5%

EM Asia Equities 21.3%

Equities Healthcare 34.5%

Equities India 13.7%

Equities Healthcare 16.8%

Equities Utilities 31.3%

EM Asia Equities 12.7%

Equities Europe 16.6%

Equities US 27.4%

Equities Healthcare 12.2%

Equities Telecomm. 16.0%

Equities China 23.3%

Equities Cons. Discr. 11.4%

Equities Cons. Discr. 15.6%

Global Equities 18.6%

Equities Telecomm. 9.7%

Global Equities 13.7%

EM Asia Equities 16.7%

Equities US 9.3%

Equities US 10.2%

Equities Telecomm. 11.7%

Global Equities 8.5%

Commodities 7.8%

Credits 8.3%

Equities Utilities 7.7%

Equities India 6.1%

Global Bonds 8.1%

High Yield 7.5%

Equities Utilities 4.5%

Equities Europe 6.8%

Equities Europe 7.1%

High Yield 4.2%

High Yield 2.3%

Credits 4.4%

Hedge Funds 2.0%

Cash 0.1%

Global Bonds 4.3%

Global Bonds 1.0%

Hedge Funds -1.0%

Cash 1.6%

as of 30 April 2015

Credits 1.0% Cash 0.0%

Legend Green: overweight Red: underweight (in euros)

Hedge Funds 0.4% Commodities -0.2%

Source: ABN AMRO Private Banking, Bloomberg, FactSet

In the short run, the prospects for equities depend purely on market sentiment. In the long-term, equities will be driven by the capacity for companies to sustain profitability over time. Investment Strategy & Portfolio Expertise Hans Peters – Head of I-Risk mindful moves

All of the pieces to fall into place ■■ US economic growth is strengthening. ■■ The eurozone is doing better than expected. ■■ Global growth should accelerate in 2015 and 2016, helped by low inflation and accommodating central banks. So far this year, there has been more disappointing news about growth than positive surprises. We think that this was temporary, and we expect a meaningful cyclical improvement through the rest of the year.

US slowdown is temporary The US economy had a weak start in 2015. We believe that this was mainly due to temporary factors, such as adverse weather and industrial action at West Coast ports. These effects are now behind us. The impact of the stronger dollar will linger, while lower oil prices have led to a sharp contraction in investment spending in the energy sector. The positive effects on consumer spending are still coming, as they take longer to appear. Overall, we think that economic growth in the US will strengthen gradually.

Europe is beating expectations The eurozone economy has struggled in recent years, but is now benefitting from a number of positive forces: the lower euro, the lower oil price and the sharp fall in borrowing costs. In addition, the economies that have implemented significant reforms are now benefitting from stronger growth. As a result, the eurozone economy has been beating expectations for months. Retail sales, for example, are surprisingly strong (see Graphic 1). And the peripheral countries, perhaps with the exception of Greece, have performed impressively. We expect this favourable run to continue.

weak, Chinese policymakers will take action to prop up economic activity. It is an effective strategy. The outlook is therefore for gradually slower growth within a controlled process. While this may not sound positive for global growth, 6-7% growth in today’s China is still more than the 10% growth that was achieved when the Chinese economy was much smaller.

Deflation fears are receding The sharp fall in oil prices last year pushed inflation lower (see Graphic 2). It occurred to such an extent that combined with relatively weak economic growth, fears for painful deflation emerged in the eurozone and elsewhere. Stronger economic growth, plus a modest bounce in oil prices have made these fears disappear almost as quickly as they came. Which, in turn, raises doubt whether the European Central Bank’s (ECB’s) large-scale bond buying programme was really necessary. The ECB is buying bonds in some markets that are actually shrinking. The German government, for example, is running a modest budget surplus. The impact on yields and general market functioning is therefore significant. This, allegedly, is leading to significant distortions.

Graphic 1: Eurozone retail sales The European economy, however, still has a long way to go in terms of reforms, if there is going to be a serious increase in growth. In addition, expectations are being adjusted upward, making it more difficult to beat them. On balance, we expect decent growth in the eurozone economy this year and next.

Mixed picture in emerging economies Emerging economies form a diverse group. Lower oil prices and the weakness of other commodity prices are a significant headwind for some countries, making it difficult to generate much growth. This situation is unlikely to change very much in 2015 or 2016.

% year on year 6 4 2 0 -2 -4

China’s economy is also continuing to slow. This is not necessarily bad, as it is partly the result of the leadership’s efforts to address problems with corruption and in the housing and financial sectors. This will make the economy healthier eventually. When growth is considered to be too

June 2015

-6 2005 Source: Bloomberg

2007

2009

2011

2013

2015

No early end to the ECB’s asset purchases While we think that the ECB’s asset-purchasing programme was not really necessary, we do not believe the central bank will end the programme any time soon. An early end would raise issues over the ECB’s credibility, and a possible sharp rise in bond yields could have damaging effects on the various eurozone economies. In any event, while deflation fears are receding, actual inflation is still significantly below the ECB’s target. The ECB’s programme may also be helpful in preventing Greece’s troubles from spreading to other markets, such as Portugal and Spain, which the ECB would, under no circumstances, want to risk. For now, we are assuming that the ECB will complete its programme as planned. If the discussion around Greece is resolved, the eurozone economy continues to grow and inflation rises back towards the target, it is conceivable that the ECB will start tapering its purchases in the course of next year.

US central bank divided, but gradual tightening on the horizon In the US, the normalisation of economic conditions warrants a normalisation in interest rates. The US Federal Reserve is moving closer to hiking interest rates. It will be the first increase since 2006. Judging by remarks from various Fed policymakers, the Fed’s rate-setting committee is seriously divided about when to start and how fast to raise rates. There are arguments for taking a slow approach, as inflation is low, growth has been unconvincing lately and the dollar has strengthened significantly. We think that the first rate hike will take place in September and that the subsequent pace of tightening will be slow.

There are risks along the way We are expecting an acceleration of global growth, led by Europe and the US, low inflation and continued accommodative monetary policy. There are risks, however. Aggressive monetary policy in recent years has, arguably, caused distortions in financial markets, and it is unclear how markets and economies will respond to (an anticipated) return to normal. In addition, disappointing growth could bring deflation fears back and the euro crisis could re-escalate. Geopolitical risks are also always present in the background.

Graphic 2: Oil price and eurozone inflation expectations USD

120

2.4

2.0 80 1.8 60

Group Economics Han de Jong – Chief Economist

2.2

100

Jan-14

Brent oil (USD/barrel) (lhs) Eurozone inflation based on five-year inflation swaps (rhs) Jul-14

1.6

1.4

Jan-15

Source: Bloomberg

mindful moves

Equities can rise further in 2015 ■■ Fundamental factors for equity growth remain in place. ■■ European equities and emerging markets are favoured. ■■ Consumer-discretionary and health-care sectors should do well. After a strong start in 2015, we believe equities have further potential. This is despite the correction in April and early May. We believe that this was a temporary market reversal, as fundamentals that are positive for equities remain in place. These fundamentals include continued low interest rates, improving earnings momentum and ample liquidity. These factors led to strong performance of European equities in the first quarter of 2015. During the same period, US equity markets lagged, and, in emerging markets, Chinese equities were the clear winners.

Sectors undergoing major changes and disruptions, such as telecommunications and utilities, are expected to lag. We remain neutral on the energy sector, as it adjusts to changes in energy prices. We are also neutral on the financials sector, based on the impact of regulations and online competition. We are also cautious on the consumer-staples sector, where many retailers face growing online competition; and the industrials sector, where growing capacity and modest demand hurt growth potential. Investment Strategy & Portfolio Expertise Annemijn Fokkelman – Global Head Equity Strategy & Portfolio Management

European equities are expected to outperform Within our overweight allocation to equities, we recommend diversifying in Europe and emerging markets and underweighting the US. In Europe, we expect domestic demand to start to improve and to underpin earnings momentum. This should add support to European equities in the coming months, taking over from margin improvement and favorable currency effects, which drove markets in the first quarter. For the rest of the year, we expect the earnings of small and mid-sized companies to benefit, based on sales to domestic consumers and international companies. We also expect the liquidity-driven policies of the European Central Bank to contribute positively. As shown in the Graphic, the profitability of European companies is being restored.

US valuations are rich Our underweight allocation to US equities is despite the expected growth of the US economy and the market’s robust earnings. We believe that elevated margins limit earnings potential, valuations are demanding and that the strong US dollar is negatively affecting US exporters.

Stronger earnings momentum expected in Europe % 300 Europe 250

In emerging markets, we prefer Asia, and mainly China and India. This region is benefiting from accommodative monetary policies, lower commodity input prices and increasing consumer demand.

Health-care and consumer-discretionary sectors are preferred The strong outperformance of innovative sectors is continuing. In developed markets, technology companies, innovative health-care companies and companies developing industrial solutions have been leading markets higher. Consumer spending continues to be strong in Asia, while it is on the mend in the US and there is growing confidence in Europe. On the back of these trends, we prefer the healthcare and consumer-discretionary sectors. Share prices in these sectors have mostly moved upward in line with earnings and revenue growth.

June 2015

Asia United States

200

150

100

50 2008 2009 2010 2011 2012 2013 2014 2015e 2016e Earnings per share consensus expectation (2015e-2016e) and realisation (2008-2014). In local currencies. Indexed data: 2008 = 100%. Source: Bloomberg, MSCI.

Megatrends lead equities higher ■■ Fundamental forces evident in megatrends. ■■ Innovations having widespread economic impact. ■■ Thematic investing provides diversification. Megatrends related to powerful demographic, social, scientific and economic trends are underlying drivers of stock-market performance. They capture key fundamental forces and can offer diversification in times of uncertainty and short-term market volatility. Within thematic equity, we focus on the following:

Demographics and the rise of the global middle class. Growing populations within market economies and longer life expectancy are increasing consumption and savings. As a result of economic and social development, there is also increased access to innovations, growing urbanisation and industrialization. For investors, there are opportunities in rising demand for health-care solutions, investment products and durable goods, all of which are increasingly accessible to the expanding global middle class.

Innovations. The past 20 years of technological and scien-

remote control and automation are applied to electricity delivery systems, are transforming energy consumers into suppliers.

Unlocking shareholder value. In a world of activist investors, forced global competition, an intense focus on efficiency and low interest rates, investors are looking for higher equity returns. By breaking up conglomerates into old versus new technologies and high-margin versus lowmargin businesses, shareholders are pressing for change. They want more and direct exposure to innovation within companies. This trend also leaves open the possibility of “old” technology and low-margin businesses consolidating, which could lead to better pricing power and improved investment returns. Investment Strategy & Portfolio Expertise Edith Thouin – Senior Equity Thematic Expert

tific discoveries is having increasing economic impact and is clearly seen in terms of improved productivity and long evity. From the intensive use of the internet, automation and robots to new drugs and inventions in agriculture, innovation has improved health and welfare across the board.

Plenty of energy. Energy supplies are expanding and are becoming less reliant on traditional providers. The US, for example, has become a large producer of oil & gas. And alternative energy sources, such as solar power, wind power and biofuels, are gaining ground. Innovative smart-grid solutions, for example, where computer-based Asset class Equities Overweight

Megatrend Key Features Demographics and the rise of • Wealth and income are created through economic the global middle class development and demographic changes. • Higher demand for healthcare solutions, investment products and durable goods. Innovations • Innovations increase productivity and longevity. • Automation and artificial intelligence are having an exponential impact. • Trends towards personalised medicine. Energy revolution • Expanded and diversified choices for energy needs. • Consumers become producers. • Dominance of OPEC is reduced. Unlocking shareholder value • Increased efficiency, global competition and low interest rates. • Pressure to get ‘better value for money’. • Chance to increase valuations by breaking up large firms.

Recommendation Actavis/Allergan, Berkshire Hathaway, BlackRock, Ping An

Nestlé, Illumina, ABB, Kuka, Roche

Dow Chemical, FedEx, Nucor

DuPont, Dow Chemical, Amgen, Novartis, Nokia, Adidas, HSBC Holdings

mindful moves

Time to take profits in bonds ■■ It will be difficult to generate bond returns in the second half of the year. ■■ We advise taking profits and moving to a minimum fixed-income allocation. ■■ We recommend selling illiquid individual securities and reinvesting in funds. The European Central Bank (ECB) has driven yields to such extremely low levels, that the time has come to lock-in the profits of the last couple of years and move towards a minimum allocation to bonds. Yields could move up further towards the end of the year, based on improved economic and inflation outlooks for Europe, a reacceleration of growth in the US and the first hike in interest rates by the Federal Reserve in almost a decade. With German government bond yields moving below zero for maturities of up to nine years, we were able to achieve a 2.5% return on our bond portfolios in the first quarter. The portfolios benefited from an overweight allocation to eurozone peripheral bonds and an allocation to credits. (See Graphic.) We do not believe we can make similar returns in the second half of 2015 -- not even if we invest in longer maturities or in riskier bond segments.

Bond allocation moved further underweight We decided to further underweight the allocation to bonds in April. We did this mainly by selling the government bonds with the shortest maturities and the lowest yields. As a result, we slightly lengthened the portfolio’s duration to 5.5 years from 4.5 years, which is neutral with the bond benchmark for our euro-denominated portfolios. For the US-dollar-denominated portfolios, we maintained a duration of four years (neutral). Within government bonds, we maintained our allocation to inflation-linked bonds, where the principal and coupon are indexed to inflation. This allocation is based on the goal of eurozone monetary policies to increase inflation to close to 2%. We also retained our sub-asset allocation towards credits and high-yield bonds.

Returns can still be found in credits but sell illiquid issues We believe that investment-grade corporate credits will continue to benefit from the search for yield that is underway in liquid bond segments. High-yield bonds offer attractive returns, but given that global non-investment grade (high-yield) bonds include a large proportion of US credits, the global high-yield segment is very sensitive to US monetary policy. Expectations about the US Federal Reserve’s plan to hike interest rates could therefore negatively impact the entire high-yield asset class and temporarily create increased volatility. Investors who have been searching for yield in small, individual and less liquid corporate bonds should consider taking profits now. Liquidity for these securities is already shrinking rapidly. Moreover the instruments could be seriously at risk once the ECB or the Federal Reserve changes direction. We advise selling illiquid individual issues and reinvesting in fixed-income mutual funds with daily liquidity. Investment Strategy & Portfolio Expertise Roel Barnhoorn - Senior Fixed Income Thematic Expert Henk Wiersma - Senior Fixed Income Research & Advisory Expert

Eurozone and global high-yield bond yields 25%

Global high yield 10-year Spain 10-year Germany

20%

Eurozone periphery government bonds are favoured Given that the ECB is automatically buying EUR 60 billion in assets every month, with the goal to boost the economy and spur inflation, we remain in favour of investing in government bonds of the eurozone periphery. Greece’s finances remain a concern, but we believe that while the risks of an accident are relatively high, any contagion to other economies is limited. This will be true as long as there are no outsized domestic-capital outflows from other peripheral countries. There could, however, be increased volatility among periphery government bonds. But with the ECB’s plan to continue buying bonds, we think that the market’s nervousness will be temporary. 8

June 2015

15%

10%

0% Jan 05

Jan 07

Source: Bloomberg, Barclays

Jan 09

Jan 11

Jan 13

Jan 15

Hedge funds: benefiting from divergence ■■ Strong performance so far in 2015. ■■ Returns vary widely by strategy. ■■ Mergers & acquisitions supporting event-driven hedge funds. During the first months of 2015, hedge funds had positive performance across the board. Especially the macro/commodity trading advisors (CTA) and equity hedge-fund strategies have been able to continue to produce strong risk-adjusted returns. In general, however, there was wide performance divergence among different hedge-fund strategies and also within strategies among managers. (See Graphic.)

Environment supports selected hedge-fund strategies

Macro/CTA strategies are positioned to gain from momentum trends and have the agility to benefit from trend reversals. Greater divergence among asset classes and regions should continue to benefit both macro and CTA hedge-fund strategies. Investment Products & Wealth Solutions Wilbert Huizing - Investment Product & Wealth Specialist

Large dispersion of returns among hedge-fund strategies (in %)

Many markets have moved back to fundamentals, allowing for a better distinction between undervalued and overvalued securities. We expect this to persist over the next few quarters and to increase opportunities for long/short strategies. An increase in corporate activities, a spike in volatility and the observed divergence in monetary policies between the US, UK, Europe and Japan have also added to the opportunities that can be captured by event-driven and macro/CTA hedgefund strategies. We are overweight event-driven, long/short equity and macro/CTA strategies, and we are neutral on relative-value strategies.

CTA

Event driven

Global Macro

Long/Short Global

Relative Value

Event-driven strategies have benefited from an increasing trend in mergers & acquisitions and corporate events. Long/short equity hedge funds are benefiting from accommodative central bank policies in Europe and Japan. The benefit of this strategy is its lack of correlation with traditional longonly equity investing.

-15

-10

-5

Based on three-year annualized returns, as of February 2015. For each strategy, 90% of the managers within the sample fall within the upper and lower boundaries.

Source: Pictet Alternative Investments

Steady recovery in real estate

■■ Strong fundamentals continue to provide support. ■■ Rising rates are a threat. ■■ Valuations have increased.

Market conditions remain favourable for listed real estate. There are a number of factors supporting the asset class: stable cash flow linked to leases; the limited supply of new space; cost of capital at very low levels; and the fact that listed real-estate companies own tangible assets that are in high demand. Prolonged accommodative monetary policies are constructive for the performance of the sector, with the caveat that the industry has the capacity to quickly adjust when interest rates and yields rise. For this reason, we continue to focus on quality real estate, based on a low cost of funding and the potential for acquisition that can increase shareholder value. We define quality companies as those with strong balance sheets, long lease durations and strong tenants. Current low bond yields open the possibility of total returns that are higher

than dividend yields, which highlights the role of property for diversification in an investment portfolio. Valuation multiples have increased, making the sector less attractive than a year ago. On average, the sector is trading slightly above its net asset value. There are some segments where valuations are still attractive, including many companies with high-quality assets and attractive growth prospects. In Europe, investor demand for real estate remains strong supporting capital appreciation. For US real estate investment trusts (REITs), valuations are certainly less appealing, reflecting positive fundamentals, including a lack of new supply in an environment of growing demand and low financing costs. A.A.Advisors Manuel Hernandez Fernandez – Property Specialist mindful moves

Private equity: mature but dynamic ■■ Successful initial public offerings boost later-stage investments. ■■ Fund managers are attracted to US investment opportunities. ■■ Energy, healthcare and US manufacturing are top investment themes. It is a seller’s market in private equity. This is especially true for funds with more mature investments, where it is now time to harvest profits, such as by selling to strategic buyers (e.g. competitors), financial buyers (other privateequity investors) or through initial public offerings (IPOs). In the first quarter of 2015, the cash raised from European IPOs topped last year’s first-quarter results. And, secondquarter results are expected to be equally good. Examples of successful private-equity-backed IPOs are Auto Trader, Sunrise Communications and GrandVision. In the US, firstquarter IPO proceeds were below those of a year ago, but given that 2014 was a record-breaking year, it is understandable. Despite promising macroeconomic data and recent optimism regarding European growth, the best possibilities for “going public” remain in the US. A side-effect of the successful IPO climate is a renewed interest in venture capital and growth financing, driven by the achievements of Uber and Airbnb in 2014.

fund managers are allocating up to 70% to the US. With high valuations in listed markets, fund managers have become less interested in investing in very large buyouts. Instead, they are focusing on mid-market deals. In this size segment, activity increased by roughly 15% in terms of the number of deals and by nearly 60% in terms of dollar volumes. Private-equity investors are also increasingly pursuing buy-and-build strategies. Here, they favour smaller platforms that can be built up through add-on acquisitions. The top segments for this type of activity are the energy, health care and US manufacturing segments, where there is a trend towards returning outsourced activities to domestic operations. Eric Zuidmeer, Senior Specialist Private Equity Jobst-Albrecht Klemme, Private Equity Solutions

IPOs boosting later-stage valuations Due to activity in public markets, valuations for buyouts and later-stage investments are being pushed up. The significant amounts of uncommitted capital at privateequity funds and the availability of financing are supporting deal demand. Opportunities are seen among mid-market companies and in transactions that offer the scope to increase value through operational improvements.

US seen as most attractive market Given improving fundamentals in the US, private-equity fund managers are increasingly positive toward investing there (see Graphic). The region is also favoured based on the depth of the market and the availability of sufficient goodquality companies at reasonable prices. Globally-oriented

Favoured investment regions based on fund managers survey 60%

North America

54%

52%

Europe

59%

19%

Asia

22%

Dec-13

11%

Others

11% 0%

10% 20% 30% 40% 50% 60% 70%

Source: Preqin Investor Interviews, 2013 and 2014.

June 2015

Dec-14

Commodities: a bumpy ride to equilibrium ■■ Commodities will become more attractive once demand overtakes supply. ■■ China drives the demand for cyclical metals, such as copper. ■■ US oil supply is limiting price increases. The search for equilibrium between supply and demand in commodity markets can be bumpy. The good news, however, is that demand will eventually overtake supply and commodities will become more attractive. While an acceleration of US and European economic growth will increase commodity demand, the main driver is development in Asia and, in particular, in China. Especially for cyclical metals used in industrial processes, such as copper and palladium, Chinese production and growth data are the crucial indicators.

Price increases limited by strong supply and weak demand In the near term, the combination of relatively overall weak demand and strong supply of commodities will limit price increases. In the oil & gas market, the impact of the US shale revolution has had a dramatic impact. But while inventories have hit record-highs and oil & gas prices have dropped by more than 40%, production has been slow to adjust. (See Graphic.)

oil prices begin to negatively affect US crude production during the second half of the year. For grains and soft commodities, harsh weather could also lead to increased volatility. Finally, speculative trading could also significantly support commodity markets, as long as central banks continue their policies to support economic growth. For precious metals, position unwinding could lead to further price declines. As we expect a substantial rise in the US dollar, this position liquidation could more than outweigh stronger demand and tighter supply. Group Economics Hans van Cleef - Senior Energy Economist Georgette Boele – Coordinator FX and Commodity Strategy

The ability for grain prices to rise is also limited in the near term. The combination of high inventory levels and consumption data suggests that supplies will increase later this year. This should lead to some stabilization in grain prices in the coming months. Soft commodities, a category that includes coffee, cocoa and sugar, present a mixed picture. The supplies for (Arabica) coffee, for example, are growing, while cocoa production is weakening. Overall, this leads to a relatively neutral view for soft commodities, with some near-term risks over the coming months.

Commodities are recommended, but there are risks

US oil production has grown, despite a decline in the number of oil rigs 10,000 9,500 9,000

We continue to maintain an overweight recommendation for commodities. We believe this position, introduced in February 2015, is grounded in positive fundamentals. We believe that continued economic growth will support demand. Excess supplies will diminish, which will lead to price appreciation overall, and, in particular, for cyclical metals.

8,500

The search for a new equilibrium in commodity markets will likely also mean increased volatility. The rebalancing of oil markets, and the tussle for market share between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, will not be smooth. While there are near-term risks, some support can be expected if low

6,000

1,800 US crude production in thousands of barrels per day (lhs)

1,600

US rig count (rhs)

1,400

8,000

1,200

7,500 1,000

7,000 6,500

800 600

5,500 5,000 2010

400 2011

2012

2013

2014

2015

Source: Baker Hughes and Thomson Reuters

mindful moves

Dollar strength to dominate ■■ The US dollar rally is not over. ■■ The vulnerability of emerging-markets currencies has lessened. ■■ The Chinese central bank will protect the yuan from further depreciation. From July 2014 until the meeting of the US Federal Reserve in March 2015, the US dollar Index rose by around 20%. Since then, a weaker-than-expected US economy and a US central bank that appears inclined to take a slow approach to rate hikes have led to a correction in the US dollar. We do not believe, however, that the rally is over. We expect that the US dollar will appreciate by another 10-15% (on tradeweighted terms) in 2015.

XXThe

Polish zloty could continue to appreciate against the euro, considering the improvement of the Polish economy and the central bank ending its cycle of rate cuts. Group Economics Georgette Boele – Coordinator FX and Commodity Strategy

Forecasts for major emerging-markets currencies Elements supporting the US dollar through the rest of the year are the proximity of the Federal Reserve to implementing interest rate hikes and the effect of the European Central Bank’s aggressive asset-purchasing programme, which has yet to be fully felt. The dollar will also be supported by other central banks that remain in an easing mode.

Emerging markets currencies less vulnerable The Federal Reserve returning to more normal rates is a known risk for emerging-markets currencies. Some of these currencies, however, are less vulnerable than they were when the Fed signalled possible tapering in May 2013. We are less negative than we were then, for example, on the Chinese yuan. The Chinese central bank has less tolerance now for a sharp depreciation of the yuan. The central bank is also providing resistance to market speculation that the currency can only weaken. Nevertheless, we do not expect the Chinese central bank to intervene on a sustained basis. Instead, we believe that policymakers are more inclined to demonstrate that the yuan’s exchange rate is determined by the market. In our view, the yuan is no longer undervalued. Its real effective exchange (trade-weighted) rate has strengthened by almost 30% since 2010 (see Graphic). Further support is provided by recent data flows, which show that in 2015, China will be a net capital exporter. This means that outward investment from China will exceed foreign investment into the country.

FX pair USD/CNH USD/INR USD/KRW USD/SGD USD/THB USD/TWD USD/IDR USD/RUB USD/TRY USD/ZAR EUR/PLN EUR/CZK EUR/HUF USD/BRL USD/MXN USD/CLP

19 May 6.21 63.62

Q4 2015 6.30 65.00

Q2 2016 6.37 66.00

1,088 1.33 33.43 30.47 13,190 49.27 2.58 11.86 4.04 27.50 305.74 3.01 15.17 599.68

1,130 1.40 34.00 31.50 13,700 50.00 2.85 12.20 3.90 27.50 320.00 3.20 15.50 630.00

1,150 1.43 34.80 32.00 13,900 47.00 2.85 12.20 3.85 27.25 325.00 3.10 15.25 640.00

Source: ABN AMRO Group Economics

Real effective exchange rates

140 130 120

Chinese yuan US dollar Euro Japanese yen

110 100

Mixed picture for other emerging-markets currencies XXThe

Mexican peso should be resilient through the end of the year, due to the absence of major economic imbalances, stabilizing oil prices and the strength of the US economy. XXThe South African rand is expected to be moderately weak, given the vigilance of the South African Reserve Bank and improving fundamentals. XXThe Russian rouble should recover, backed by improving oil prices and a stabilizing economy. 12

June 2015

90 80 70 Base year is 2010 60 2010 2011 2012 Source: BIS

2013

2014

2015

Forecasts Differing from the consensus view of economists and financial analysts is relevant at this point of the business cycle. This is because financial liquidity is abundant and is gravitating towards investment ideas shared by a large number of investors. The herding behaviour behind these financial flows makes the related investments vulnerable to heavy short-term profit-taking. It is therefore important to highlight where our view differs from the consensus.

Macro indicators (%) 1 21 May 2015

US Eurozone UK Japan Other countries* EM Asia Latin America Emerging Europe** World

Equity indexes

Real GDP growth 2015 ABN Market AMRO 3.1 1.8 2.8 1.1 2.0 6.4 0.5 -0.6 3.3

view 3.1 1.4 2.7 1.1 1.9 5.9 0.7 -0.8 3.0

Inflation 2015 ABN Market AMRO 0.2 0.4 1.1 0.8 0.8 3.1 13.1 10.4 3.7

view 0.3 0.0 0.5 0.7 1.2 3.0 13.4 8.7 3.0

Interest rates and bond yields (%)

Spot 20 May 2015 MSCI ACWI S&P 500 Euro STOXX 50 FTSE-100 Nikkei 225 DAX CAC 40 AEX Hang Seng Index Shanghai SE Comp. Straits Times Index

441.35 2,125.85 3,683.48 7,007.26 20,196.56 11,848.47 5,133.20 501.90 27,585.05 4,446.29 3,439.68

Sensex

27,837.21

Active strategy

Forward P/E 2016

Overweight Underweight Overweight Overweight Neutral Overweight Overweight Overweight Neutral Overweight Neutral Overweight

15.2 16.0 14.2 14.9 17.4 13.4 14.8 15.7 12.0 16.1 13.1 13.2

Forecasts for major developed-markets currencies

20 May 2015

Q4 2015

Q2 2016

United States US Fed 3-month 2-year 10-year

0.25 0.28 0.59 2.25

0.75 0.90 1.25 2.50

1.50 1.65 1.75 2.80

Germany ECB Refi 3-month 2-year 10-year

0.05 -0.01 -0.22 0.63

0.05 0.00 -0.20 0.50

0.05 0.00 0.10 1.20

ABN AMROâ&#x20AC;&#x2122;s macroeconomic scenario, for example, is more optimistic for the eurozone and emerging Asia for 2015 than the consensus view, and we expect more growth than our peers in the US later this year and going into 2016. We also expect higher interest rates in the US in September and for global inflation to pick up.

FX pair EUR/USD USD/JPY EUR/JPY GBP/USD EUR/GBP USD/CHF EUR/CHF AUD/USD EUR/AUD NZD/USD EUR/NZD USD/CAD EUR/CAD EUR/SEK EUR/NOK

19 May 1.1152 120.34 134.15 1.5594 0.7171 0.9319 1.0422 0.7954 1.4020 0.7384 1.5102 1.2172 1.3612 9.2884 8.3461

Q4 2015 1.00 128 128 1.49 0.67 1.05 1.05 0.72 1.39 0.68 1.47 1.30 1.30 9.50 8.00

Q2 2016 1.05 135 142 1.50 0.70 1.00 1.05 0.68 1.54 0.65 1.62 1.33 1.40 9.50 7.75

All forecasts are annual averages of quarterly year-on-year changes. * Australia, Canada, Denmark, New Zealand, Norway, Sweden and Switzerland. ** Belarus, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Slovenia, Turkey, Ukraine. Source: ABN AMRO Group Economics, Consensus Economics, EIU.

mindful moves

Positioning for performance ■■ Positive performance in all risk profiles year-to-date. ■■ Economic recovery will continue to support equities. ■■ Contrarian overweight in commodities was successful. Our asset allocation is based on the fundamental conviction that the recovery is underway and that the divergent monetary policies of central banks will continue to affect asset prices. The case for equities remains strong, despite periods of volatility stemming from adjustments in the bond and currency markets. This volatility should be seen as an opportunity to align portfolios toward the targeted allocation. The major risk that could lead to an equity market correction is a recession and its impact on earnings.

Commodities for diversification A shift to an overweight allocation to commodities was put in place in early February. It was a contrarian trade, given declining oil prices. It has contributed positively to performance, in particular, during April and May when markets corrected owing to volatility in the US dollar, bonds and European equities.

Bond allocation reduced to the minimum Investors can no longer rely on bonds for income, and the environment for bonds is increasingly difficult. The European Central Bank’s quantitative easing programme is suppressing current yields and, consequently, future returns. Bond market liquidity has shrunk and the asset class is volatile. These elements and the prospect of interest-rate hikes in the US triggered the decision to further underweight bonds and reduce the bond allocation closer to the minimum position. This decision was taken before the early May correction in bond markets. The exposure was adjusted from 34% to 25% in risk profile 3, and the proceeds invested in the money market. The only segments in bond markets that now offer a yield buffer are high-yield and inflation-linked bonds.

Rebalancing to take profits The target asset allocation reflects the intended risk exposure of the portfolio as well as the goals concerning returns. Deviations therefore must be monitored and analyzed carefully. Mindful rebalancing back to the target asset allocation can have a positive impact on future returns and potentially reduce risk. Owing to the positive drift upward in equity markets in 2015, the equity allocation had increased and therefore moved away from the target asset allocation. This represented an occasion to take profits and to avoid the bias of remaining passive as the equity portion of the portfolio swelled. On 23 April, the portfolio was rebalanced back to the level of 13 March. The target allocation for equities was then reduced from 46% to 43% in risk profile 3. Performance of the various risk profiles has been strong year to date, as of 30 April, on an absolute and relative-to-thebenchmark basis. Returns varied from 1.0% to 14.5% for the euro-based profiles and from between 1.3% to 6.1% for the US-dollar-based profiles (See Graphic below.) Didier Duret – Chief Investment Officer

Performance (%) of the tactical asset allocation vs. the strategic asset allocation EUR

USD

22 May 2003 to 30 April 2015* 2015 YTD (30 April 2015) 22 May 2003 to 30 April 2015* 2015 YTD (30 April 2015) Strategic Tactical Excess Return Strategic Tactical Excess Return Strategic Tactical Excess Return Strategic Tactical Excess Return

Profile 1 Profile 2 Profile 3 Profile 4 Profile 5 Profile 6

70.51 81.94 107.39 123.82 148.41 162.76

76.11 97.88 140.06 157.75 189.93 200.66

3.28 8.76 15.75 15.16 16.72 14.42

1.02 3.48 5.53 8.30 11.11 13.24

1.04 5.23 7.80 10.81 13.18 14.48

0.01 1.69 2.16 2.32 1.87 1.09

57.90 69.80 98.36 115.60 139.36 154.02

74.06 90.99 130.29 146.81 175.92 186.48

10.23 12.48 16.09 14.48 15.27 12.78

1.23 1.90 2.53 3.37 4.18 4.78

1.25 2.72 3.68 4.75 5.68 6.10

0.01 0.80 1.11 1.34 1.43 1.25

* Profiles 1 and 2 are linked to the “old” Conservative profile, profiles 3 and 4 to the “old” Balanced profile and profiles 5 and 6 to the “old” Growth profile.

June 2015

Asset allocation profiles ABN AMROâ&#x20AC;&#x2122;s Global Investment Committee model portfolios showing EUR/USD risk profiles in percent, starting with our most conservative (ProfileÂ 1) and ending with that most exposed to market risks (Profile 6). Asset allocation Asset class

Profile 1

Neutral Money markets 5 Bonds* 90 Equities 0 Alternative investments 5

Strategic Min. 0 40 0 0

Profile 2 Tactical

Max. 60 100 10 10

46 46 0 8

Deviation Neutral 5 70 15 10

41 -44 0 3

Strategic Min. 0 30 0 0

Max. 70 85 30 20

Tactical

Deviation

24 35 26 15

19 -35 11 5

Funds of hedge funds Real estate

Commodities

Total Exposure

100

Asset allocation Asset class

Funds of hedge funds Real estate Commodities

Strategic Min. 0 20 10 0

Profile 4 Tactical

Max. 70 70 50 20

17 25 43 15

Deviation Neutral 5 35 50 10

12 -30 13 5

Strategic Min. 0 10 20 0

Deviation

9 13 63 15

4 -22 13 5

100

Profile 5

Neutral Money markets 5 Bonds* 15 Equities 70 Alternative investments 10

100

Tactical

100

Funds of hedge funds Real estate Commodities

Max. 70 55 70 30

Asset allocation Asset class

Total Exposure

100

Profile 3

Neutral Money markets 5 Bonds* 55 Equities 30 Alternative investments 10

Total Exposure

100

Strategic Min. 0 0 30 0

Profile 6 Tactical

Max. 70 40 90 30

2 5 81 12

Deviation Neutral 5 0 85 10

-3 -10 11 2

Strategic Min. 0 0 40 0

Max. 60 25 100 30

Tactical

Deviation

0 0 88 12

-5 0 3 2

100

*Recommended duration: Neutral. Benchmark: Bank of America, Merrill Lynch Government Bonds 1-10 years.

mindful moves

Contributors Members of the ABN AMRO Bank Global Investment Committee Didier Duret didier.duret@nl.abnamro.com Gerben Jorritsma gerben.jorritsma@nl.abnamro.com Han de Jong han.de.jong@nl.abnamro.com Olivier Raingeard olivier.raingeard@fr.abnamro.com Bernhard Ebert bernhard.ebert@de.abnamro.com Rico Fasel rico.fasel@nl.abnamro.com

Chief Investment Officer Private Banking Global Head Investment Strategy & Portfolio Expertise Chief Economist Head Investments Private Clients Neuflize OBC Head Discretionary Portfolio Management Bethmann Bank Director Product Management Investment Advisory Netherlands

Group Economics Nick Kounis Georgette Boele Hans van Cleef

nick.kounis@nl.abnamro.com georgette.boele@nl.abnamro.com hans.van.cleef@nl.abnamro.com

Head Macro Research Coordinator FX and Commodity Strategy Senior Energy Economist

Investment Strategy & Portfolio Expertise Roel Barnhoorn

roel.barnhoorn@nl.abnamro.com

Senior Fixed Income Thematic Expert

Henk Wiersma Carman Wong Grace M.K. Lim Annemijn Fokkelman Daphne Roth Edith Thouin Ralph Wessels Maurits Heldring Javy Wong

henk.wiersma@nl.abnamro.com carman.wong@hk.abnamro.com grace.m.k.lim@sg.abnamro.com annemijn.fokkelman@nl.abnamro.com daphne.roth@sg.abnamro.com edith.thouin@nl.abnamro.com ralph.wessels@nl.abnamro.com maurits.heldring@nl.abnamro.com javy.wong@hk.abnamro.com

Senior Fixed Income Research & Advisory Expert Head Emerging Markets Bonds Emerging Market Bond Analyst Global Head Equity Strategy & Portfolio Management Asia Equity Strategist Senior Equity Thematic Expert Equity Research & Advisory Expert Senior Equity Research & Advisory Expert North Asia Equity Strategist

Sustainable Development Solange Rouschop

solange.rouschop@nl.abnamro.com

Global Head Investment Services & Sustainability

Alternative Investments Olivier Couvreur Eric Zuidmeer Wilbert Huizing Jobst-Albrecht Klemme Manuel Hernandez Fernandez

olivier.couvreur@fr.abnamro.com eric.zuidmeer@nl.abnamro.com wilbert.huizing@nl.abnamro.com jobst-albrecht.klemme@bethmannbank.de manuel.hernandez@nl.abnamro.com

CIO Multimanager, Hedge Funds Senior Specialist Private Equity Investment Product & Wealth Specialist Head Private Equity, Director Property Specialist

Quantitative Analysis and Risk Management Hans Peters Paul Groenewoud

hans.peters@nl.abnamro.com paul.groenewoud@nl.abnamro.com

Head Investment Risk Quant Risk Specialist

Investment Communications This publication is produced by the Global Investment Communications team. If you have questions or comments, contact the team at I-Comms.Global@nl.abnamro.com.

June 2015

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© Copyright 2015 ABN AMRO Bank N.V. and affiliated companies (“ABN AMRO”), Gustav Mahlerlaan 10, 1082 PP Amsterdam / P.O. box 283, 1000 EA Amsterdam, The Netherlands. All rights reserved. This material was prepared by the Investment Advisory Centre (IAC) of ABN AMRO. It is provided for informational purposes only and does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. While based on information believed to be reliable, no guarantee is given that it is accurate or complete. While we endeavour to update on a reasonable basis the information and opinions contained herein, there may be regulatory, compliance or other reasons that prevent us from doing so. The opinions, forecasts, assumptions, estimates, derived valuations and target price(s) contained in this material are as of the date indicated and are subject to change at any time without prior notice. The investments referred to in this material may not be appropriate or suitable for the specific investment objectives, financial situation, knowledge, experience, or individual needs of recipients and should not be relied upon in substitution for the exercise of independent judgement. ABN AMRO or its officers, directors, employee benefit programs or co-workers, including persons which were involved in preparing or issuing this material, may from time to time hold long- or short-positions in securities, warrants, futures, options, derivatives or other financial instruments referred to in this material. ABN AMRO may offer and render at any time investment banking-, commercial banking-, credit-, advice-, and other services to the issuer of any security referred to in this material. Pursuant to offering and rendering such services, ABN AMRO may come into possession of information not included in this material and ABN AMRO may prior or immediately after publication thereof have acted based on such information. In the past year, ABN AMRO may have acted as lead manager or co-lead manager with regard to a public offering of securities from issuers as mentioned in this material. The stated price of any securities mentioned herein is as of the date indicated and is not a representation that any transaction can be effected at this price. Neither ABN AMRO nor other persons shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material. This material is for the use of intended recipients only and the contents may not be reproduced, redistributed, or copied in whole or in part for any purpose without ABN AMRO’s prior express consent. This document is solely intended for dissemination amongst private/retail customers in a PC country. Distribution to private/retail customers in any jurisdiction that would require registration or licensing of the distributor which the distributor does not currently have, is not permitted. Material means all research information contained in any form including but not limited to hard copy, electronic form, presentations, e-mail, SMS or WAP. US Securities Law ABN AMRO Bank N.V. is not a registered broker-dealer under the U.S. Securities Exchange Act of 1934, as amended (the “1934 Act”) and under applicable state laws in the United States. In addition, ABN AMRO Bank N.V. is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the “Advisers Act” and together with the 1934 Act, the “Acts), and under applicable state laws in the United States. Accordingly, absent specific exemption under the Acts, any brokerage and investment advisory services provided by ABN AMRO Bank N.V., including (without limitation) the products and services described herein are not intended for U.S. persons. Neither this document, nor any copy thereof may be sent to or taken into the United States or distributed in the United States or to a US person. Other jurisdictions Without limiting the generality of the foregoing, the offering, sale and/or distribution of the products or services described herein is not intended in any jurisdiction to any person to whom it is unlawful to make such an offer, sale and/or distribution. Persons into whose possession this document or any copy thereof may come, must inform themselves about, and observe, any legal restrictions on the distribution of this document and the offering, sale and/or distribution of the products and services described herein. ABN AMRO can not be held responsible for any damages or losses that occur from transactions and/or services in defiance with the restrictions aforementioned. Sustainability Indicator Disclaimer ABN AMRO Bank N.V. has taken all reasonable care to ensure the indicators are reliable, however, the information is unaudited and subject to amendment. ABN AMRO Bank is not liable for any damage that constitute from the (direct or indirect) use of the indicators. The indicators alone do not constitute a recommendation in relation to a specific company or an offer to buy or sell investments. It should be noted that the indicators represent an opinion at a specific period of time considering a number of different sustainability considerations. The sustainability indicator is only an indication regarding the sustainability of a company within its own sector. Company disclosures ABN AMRO may beneficially hold a major shareholding or a significant financial interest of the debt of this company. ABN AMRO currently maintains a market in the security of this company and otherwise purchases and sells securities of this company as principal. ABN AMRO has received compensation for investment banking services from this company, its subsidiaries or affiliates during the previous 12 months. All disclosures made herein refer to ABN AMRO and its affiliates, including ABN AMRO Incorporated, which is regulated in the United States by the NYSE, NASD and SIPC. Personal disclosures The information in this opinion is not intended as individual investment advice or as a recommendation to invest in certain investments products. The opinion is based on investment research of ABN AMRO IAC. The analysts have no personal interest in the companies included in this publication’. Their remuneration for this work is not, was not and will not be related directly or indirectly to the specific recommendations or views expressed in this opinion.

Investment Advisory Centres Europe

ABN AMRO MeesPierson Amsterdam Rico Fasel rico.fasel@nl.abnamro.com

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ABN AMRO Private Banking Hong Kong William Tso william.tso@hk.abnamro.com

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The Investment Advisory Centres are built around the work of investment specialists who provide financial advice and support for your key investment decisions. These specialists are assisted by a dedicated team of research & strategy analysts who provide in-depth coverage of the major financial markets and investment categories â&#x20AC;&#x201C; currencies, equities, bonds and alternative investments. For all enquiries, please contact one of the branches above. If you are interested in our Private Banking iPad Research app, please send an email to iResearch@nl.abnamro.com.