Reinventing growth

Quarterly Outlook Q1 2013

Investment Strategy

Quarterly Outlook Q1 2013

Reinventing growth
The quest for yield has become increasingly difficult; therefore, investors need to find returns calibrated to the sources of growth rather than be tempted by the perceived comfort of speculative yields. From an economic perspective, we are cautiously optimistic for several reasons that the conditions for such returns are being reinvented. First, we believe that the reflationary policies presented by some major economies primarily the United States are gaining an edge over the austerity measures of, mainly, European Union (EU) countries and Japan. Second, China seems to have engineered a soft landing, and many other big emerging economies are well positioned for a global upturn. Third, although wary of the never-ending eurozone saga, we are generally positive about the outcome and suspect that financial markets will focus more on business developments. We highlight this in on our new equity theme Masters of manufacturing. So, what is the blueprint for returns in the first quarter of 2013? The components are: equities (notably Europe, Asia and Brazil), in which the recent under-performance should be mirrored by out-performance in 2013; selected peripheral EU bonds to enhance yield; Asian property; and, for both US dollar- and euro-based investors, the Canadian dollar and a selection of emerging-market currencies. The ABN AMRO Private Banking Research & Strategy team closely examines these and other views on the following pages, helping you to invest prudently and successfully. Your Relationship Manager or nearest Investment Advisory Centre (see back cover) is also ready to assist you in selecting the asset allocation reflecting the risk/return strategy that best meets your investment needs and goals.

Didier Duret
Chief Investment Officer, ABN AMRO Private Banking

December 2012

Quarterly Outlook Q1 December 2012

Contents
Introduction Reinventing growth Economics Cyclical improvement under way Economics Emerging markets momentum Economics Will central bank money drive up inflation? Equity market outlook Equity market Sector outlook Equity theme Megatrend update Equity theme Masters of manufacturing Bond market outlook Bond portfolio allocation Currency outlook Forecasts Hedge funds Commodity outlook Property Private equity Asset allocation Contributors 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20

This is an international ABN AMRO publication. Riskprofiles and availability of investment products may differ by country. Your local Advisor will be able to inform you.

Reinventing growth
The quest for yield is hitting limits and making way for a search for return calibrated to the sources of growth

Research & Strategy

Didier Duret Chief Investment Officer

Investors are facing the harsh reality that they cannot get decent real yields without venturing into over-risky territory. The debt crisis is far from over but a cyclical upswing could well develop during 2013, led by the United States along with Brazil, Russia, India and China (the BRICs). With low yields on high-quality bonds, equities can offer exposure to this upswing. And because risk-averse investors need to enter a comfort-free zone of low-quality bonds to achieve yield, equities attractiveness is reinforced, reinventing the conditions for harnessing growth and generating portfolio returns in the first quarter.

Major central banks have gone beyond their normal mandate. They want to reflate their economies, but hints by the Federal Reserve of monetary normalisation could harm the US government bond market. Still, investor flight from safe havens should be gradual, limiting the risk of a sharp rise in yields. Stock market performance may not be aligned with economic performance. Valuation, confidence and money flows can be more influential than pure fundamentals.

Key opportunities Key trends

The benefits of reflationary policies are starting to gain traction and get the upper hand over the austerity imposed by debt-adjustment programmes. Better US prospects are likely once fiscal-cliff uncertainty is resolved. Equally, domestic demand from the BRICs is creating a gravitational pull for other emerging countries and for European and Japanese exporters. A new, competitive landscape is emerging. The energy revolution, the climb up the value chain, access to markets and supply-chain redesign are reshaping global industry. The quest for yield will make way for a search for return. The bull market in bonds is very mature and low yields are forcing institutional and private investors to consider equities for their target returns. Equities (Overweight in Europe, Asia and Brazil) and real estate are the asset classes of choice for gaining exposure to the cyclical recovery after the fiscal cliff. Companies that are masters of manufacturing. Our equity theme focuses on companies benefiting from IT, industrial services and the energy revolution. Equities with emerging-market exposure present the best positioning, including large, internationally diversified companies, and those with direct exposure to fast-growing national markets. High-dividend yield companies are more appealing in developing than developed markets. The former are in an early stage and the latter have already outperformed considerably. Peripheral bonds (primarily Spain) can be played with a combination of sovereign and corporate bonds. The US dollar could well appreciate based on the countrys own growth fundamentals that differ from past safe-haven flows. The Norwegian krone, Canadian dollar and some emerging-market currencies offer diversification.

Key challenges
The struggle between fiscal austerity and private-sector growth impulses will persist throughout 2013, as will the structural divergence between core and peripheral countries in the eurozone. From the quest for yield towards the search for growth
Cash

Deflationary forces

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Quarterly Outlook Q1 December 2012

Cyclical improvement under way

Creating room for positive surprises
The global business cycle is turning, but unequally among regions. Downside risks are still evident, and expectations for economic growth are low. Still, demand has become heavily pent up in some areas, allowing for possible upside surprises in 2013. Having weakened for most of 2012, global economic activity is now gaining some momentum, and is expected to do so for the next couple of quarters. Business confidence indicators have largely stopped falling and are strengthening a little in many countries. There are several reasons for this. The inventory cycle in the industrial sector is turning, which usually provides a tailwind to economic activity. In addition, inflation pressures are easing in response to the earlier economic slowdown, supporting consumers real spending power. Easing pressure in the financial system is also contributing to economic growth. But perhaps the most important factors are in policy: by announcing outright monetary transactions, the European Central Bank (ECB) has reduced the risk of extremely negative developments, which has buttressed confidence. Other policymakers have provided further stimulus to activity.

Research & Strategy and Group Economics

Han de Jong Chief Economist

government deficit has fallen against a background of modest economic growth and rising employment. Europes problems are more significant, because its deleveraging coincides with efforts to rebuild the framework to make the euro sustainable. And although here, too, progress is undeniable, the continued need to strengthen balance sheets will weigh on economic growth going forward. With production depressed, pent-up demand has built up in the global economy. If and when this can be unlocked, the global economy will receive a welcome stimulus. US residential construction may be the first area to see such demand hit the market. Thus we believe that, for the first time in a while, there are chances of upside surprises against expectations.

EU and US consumer confidence indicators

150

10 0 -10

Not all at the same speed

The improving worldwide picture masks wide divergence. The US and China (along with many other emerging economies) are well ahead of Europe and Japan, where growth has conspicuously failed to return with any vigour. But the divergence is unlikely to last. We expect that Europe will show a modest improvement during 2013 as it benefits from improving confidence that the euro crisis can be kept under control (see graph), from a modest improvement in world trade and from a further drop in inflation. The global economy fell into a credit crisis four years ago and a slow and painful process of lowering debt ratios started. Progress has been faltering and uneven. The US is arguably most advanced in the adjustment process as private debts have fallen, banks have been strengthened and the

113

75 -20 38 -30 -40

jan 1995 jan 2000 jan 2005 jan 2010 jan 2012

0
jan 1990

EU consumer confidence (rs)

US consumer confidence (ls)

Source: Conference Board, European Commission, Bloomberg

Emerging markets momentum size and speed

Although affected by the sombre economic climate, emerging markets still have much brighter growth prospects than industrial countries. With an expected growth rate of 6.8% in Asia, 4.2% in Latin America and 3% in Eastern Europe, these regions will continue to outperform the US (a meagre 2%) and Europe (stagnation) in 2013. Growth in countries in the Organisation for Economic Co-operation and Development (OECD) has averaged 1.5% a year over the past 10 years, against over 5% in non-OECD countries. Of the large emerging markets, China and India have been the star performers, with growth of 10% and 7%, respectively. The associated, insatiable appetite for raw materials, particularly in China, has fuelled vigorous growth in other emerging markets, notably in Latin America and Africa. Moreover, rising wages and hence growing prosperity in China are prompting a shift of production to lower-wage countries. The main beneficiaries of this process are other Asian countries, but Mexicos assembly industry is also flourishing again thanks to the sharp narrowing of the wagecost difference with China. In virtually all emerging countries, robust economic growth is going hand in hand with the advent of an affluent middle class. As a result, emerging economies are developing from marginal players that respond chiefly to events in the industrial countries into powerful independent actors in their own right. These countries are also steadily gaining in significance as strategic growth markets for global companies. In 2012, the four BRICs (measured in nominal US GDP) were in the top 10 global economies, and nine emerging countries by size, China, Brazil, India, Russia, Mexico, South Korea, Indonesia, Turkey and Saudi Arabia were in the top 20, which account for about 80% of global GDP. The share of these nine has risen from almost 10% of global GDP in 1990 to more than 25% in 2012. Given the current growth outlook,

Group Economics

Marijke Zewuster Head Emerging Markets

China is likely to overtake the US as the worlds largest economy and India to topple Japan from third place within the coming decades. But size isnt everything. Alongside these nine emerging markets, smaller economies are also becoming increasingly attractive for corporate and personal investors. Countries such as Angola, Bangladesh, Colombia, Egypt, Ghana, Nigeria, the Philippines and Vietnam are all expected to grow twice as fast as the global economy in the next five years. And beyond growth, emerging markets have also improved their creditworthiness and reinforced their institutional structures, another trend that should continue in the coming years.

BRIC GDP growth, % year on year

20 15 10 5 0 -5 -10 Brazil -15 mai 2005 Russia mai 2007 India mai 2009 China mai 2011

Source: Bloomberg

Quarterly Outlook Q1 December 2012

Will central bank money drive up inflation?

There can be too much of a good thing
Unconventional monetary policy on both sides of the Atlantic
The ECB and the Federal Reserve have taken a whole slew of actions over the last few years to support their economies. These steps have led to sharp increases in the central banks balance sheets, as the Fed has adopted large-scale asset purchase programmes, while the ECB has lent vast amounts to commercial banks against collateral. Some commentators have argued that these programmes will lead to a surge in inflation.

Group Economics
Nick Kounis Head Macro Research

Risks higher in the US than the eurozone

It seems unlikely that central banks would keep so much liquidity in the system if a multi-year credit boom emerged. We do not therefore expect that current unconventional policies will be allowed to generate excessive inflation. However, we see a more significant risk of a longer-term rise in inflation in the US than in the eurozone, where we judge the inflation risk to be low. The Feds monetary expansion has been much larger than that of the ECB and the duration will also be longer under unchanged policies. Crucially, the US banking system is in better shape than the eurozones, suggesting that the credit mechanism is likely to start to function again at an earlier stage. Indeed, we expect credit growth in the eurozone to remain weak for the next few years. Finally, we think that the Fed has a weaker inflation focus than the ECB. The US central banks exit policy may not be smooth, and it could lead to an abrupt jump in interest rate expectations if the Fed waits too long before withdrawing policy accommodation.

Different types of money

The economists Milton Friedman and Anna Schwartz famously asserted that inflation is always and everywhere a monetary phenomenon. However, there are different types of money. The money that central banks are creating is reserve or base money, in the sense that it leads to increases in commercial bank reserves held at the central bank. Our research1 suggests that the link between base money and inflation is only strong over periods of around 10 years. This reflects the fact that the rise in base money needs to lead to an increase in wider measures of the money supply to become inflationary. This takes time and depends on the combination of a strong and sustained upswing in private sector credit growth and central banks not taking steps to make monetary policy less accommodative.

Money supply, US and eurozone, year on year

15

10

%yoy

0 US M2 -5 Feb 2000 Feb 2002 Eurozone M3 Feb 2004 Feb 2006 Feb 2008 Feb 2010 Feb 2012

Source: Thomson Reuters Datastream, ABN AMRO Group Economics

Please see the ABN AMRO Macro Focus note Will central banks spur inflation, 19 November 2012.

Equity market outlook

Entering a sweet spot

Research & Strategy

Sybren Brouwer Global Head Equity Research

Fiscal austerity measures in Europe and the US may still be at the forefront of investors minds, depressing consumer spending and sentiment, but once the fiscal cliff is behind us the recovery of the US economy could well pick up pace on revived capital spending. Coupled to that, inventories are being rebuilt in fast-growing economies, especially China. These forces together are brightening prospects for growth and helping the outlook for European industries. Equity markets are in a position to benefit from this global cyclical improvement as valuations remain attractive and financial liquidity is still abundant at a time when the future return potential of fixed-income investments is shrinking.

Plenty of growth opportunities in the fast-expanding markets alongside efficiency gains (through new technologies and a soft labour market) and low interest rates have helped margins. The result is a high and fairly sustainable level of free cash flow generation, allowing large companies to pay attractive dividends and often to buy back their own shares. Relative to bond yields, the case for an overweight in equities is therefore very compelling, as illustrated in the chart below.

Earnings yield as support for dividend sustainability, %

18 16 14 12 10 8 6 4 2 0 Nov 2005 Nov 2006 Nov 2007 Nov 2008 Nov 2009 Nov 2010 Nov 2011 Nov 2012

New forces unleashed by the corporate sector supported by financial strength

Europes small and mid-cap corporate sector has been hard hit, particularly its regionally exposed industries like construction, building materials and real estate. Consumerrelated companies have also had a tough time. In sharp contrast, most multinational companies in industrialised countries went into the latest recession with healthy and cash-rich balance sheets and are coming out of it in even better shape. Historically, recessions damaged corporate balance sheets, but not this time around.

MSCI Europe earnings yield Euro govt bond 10 year yield

MSCI Europe dividend yield

Source: Bloomberg

Asset class Equities: Overweight

Fundamental view Substantial earnings and dividend yields top bond yields

Our recommendations Sustainable dividend payers, growth industries with global appeal Large industrial, materials and consumer stocks in US, EU; mid-sized suppliers

Earnings recovery in Asia, particularly in China and other emerging markets. Economic recovery in US helping Q4 2012 and Q1 2013 results

Megatrends support strength of balance sheets, allowing Highly efficient companies with a competitive cost base, for more corporate investment to stimulate growth and attractive brands, expertise or franchises, developed in the Masters of manufacturing theme

Quarterly Outlook Q1 December 2012

Equity market Sector outlook

Combining sustainable growth with cyclical exposure
With a more positive stance on the global economy, we have further increased our overweight Equity position and gradually enhanced our cyclical exposure, as reflected in our theme (see next page). On a (sub-)sector level, the cyclical exposure is obtained through an overweight for Industrials, where we like Capital Goods, which could benefit from huge

Research & Strategy

Sybren Brouwer Global Head Equity Research

demand from energy, transport and communication networks. We are also overweight Energy, preferring Oil Services as this subsector could benefit strongly from an improving macro environment and low valuations. More defensively, for sustainable growth we prefer Healthcare, Biotech in particular.

Overweight - Neutral - Underweight

Sector
Energy

Subsector
Oil Services Integrated Oils Exploration & Production Refining Chemicals Metals & Mining Construction Materials Paper & Forest Commercial Services & Supplies Capital Goods Transportation

Top picks
Halliburton, Noble Corp, Saipem Royal Dutch Shell, Chevron Whiting Petroleum, CNOOC Valero Agrium, BASF, PPG, Lanxess, LyondellBasell, Syngenta Rio Tinto, Xstrata China National Building Materials, HeidelbergCement International Paper Bureau Veritas, Intertek ABB, Schneider, Emerson, Deere, GE, H. Whampoa, MTR, China Comm. Constr., Keppel Corp, EasyJet LVMH, Richemont, adidas, Lennar, WeightWatchers Compass PPR, Target BMW, Volkswagen, Michelin, Hyundai Motors CBS, Walt Disney, WPP, Comcast, Wolters Kluwer L'Oral, Henkel, Reckitt Benckiser, Procter & Gamble, Este Lauder Tesco, CVS Caremark Nestl, Nutreco, Pernod Ricard, Coca-Cola, Mead Johnson, Mondelez DaVita, Fresenius SE Gilead Sciences, Abbott Labs, Biogen, Sanofi, Amgen Am. Express, JP Morgan, Wells Fargo Allianz, AXA, Prudential UK, Munich Re, AIA Group HSBC, Standard Chartered, ICBC, CCB, Oversea-Chinese Banking Corp Simon Property Group, Henderson Land Development, Sino Land, Mitsui Fudosan, Unibail Rodamco EMC IBM, Google, Nuance Qualcomm, Samsung Electronics Vodafone, France Telecom EDP Renovaveis, Enel Green Power GDF Suez, Veolia Environment, NextEra Energy

Comments
Cheap valuations promise strong upside Defensive nature protects against market volatility Over-pessimistic oil & nat gas price assumptions Support from strong refining margins in weakest Q4 Demand recovery: Asia on inventory cycle, US on low gas prices All eyes on China: demand depends on its policy Austerity measures vs. restructuring and price increases Focus on further consolidation and integration/synergies Outsourcing and quality requirements are main drivers Infrastructure and efficiency improvements are drivers; EU weakness an obstacle Continuing passenger growth, but fierce competition and rising fuel prices Luxury goods benefit from global Chinese tourism spending Summer slowdown was only temporary Heavy discounting should hurt profitability Focus on top brands; avoid firms with high EU exposure Higher fees for content reduces volatiliy of revenue streams Upside margin potential; restructuring stories dominate Valuation seems good, but with cyclical and structural issues Inflated input costs; little ability to pass on costs; demanding valuation Dialysis services and instruments Successful biotech introductions; high free cash flows Quality, defensive and well diversified names; the winners The US and asset management help improve business Emerging regions still offer the best growth opportunities Top-quality names with assets in prime locations Data storage leader, good vehicle to play cloud computing Example of stable earnings, market leaders Royalties for mobile devices Challenging regulatory and competitive environment Uncertainty on subsidies weighs on growth perspectives Muted fundamentals; depressing demand and prices

Materials

Industrials

Consumer Discretionary

Consumer Staples

Consumer Durables Consumer Services Retailing Automobiles & Components Media Household & Personal Care Food & Drug Retailing Food, Beverages & Tobacco

Healthcare Financials

Healthcare Equip. & Services Pharma, Biotech & Life Sciences Diversified Financials Insurance Commercial Banks Real Estate

Information Tech

Telecom Utilities

Technology Hardware & Equip. Software & Services Semicond. & Semicond. Equip. Telecommunication Services Renewable Utilities Regulated/Multi-Utilities

Equity theme Megatrend update

Our new theme, Masters of manufacturing, fits well with our current portfolio of themes. As global industrialisation continues and the fast-growing economies (especially China)

Research & Strategy

Edith Thouin Head Equity Theme Research

move up the value chain and have to pay higher wages, automation, quality control and a streamlined production process are the main areas to invest in now for corporations.

Theme New age of services Green infrastructure Big is beautiful Taking care European gems

Launch 3Q08 3Q09

Investment case As global trade expands, the need for transport, storage and inspection of goods is accelerating Long-term elements (environment friendliness and energy savings) and short-term reasons (stimulus programmes) benefit green infrastructure Investors focus on large companies that can expand in emerging markets (EM) to become real global players. The rising and changing needs of consumers in EM as they move up Maslows triangle of needs. Large European expertise and brand names are in demand with the rising middle classes worldwide, helped by a weakening euro. As production in EM moves up the value chain and global trade keeps on growing, the need for global quality standards, including environmental and safety regulations, is on the rise. With the recovery (in the US and Asia) gaining pace, consumer spending is leading. Companies are cash rich. Vertical integration and scarcity issues lead to more acquisitions. In an age of austerity, pricing power is proving paramount for companies to maintain margins and secure long-term earnings growth. In an uncertain and low interest rate environment, investors focus on dividend-paying stocks as a stable source of yield. Focus on health and wellness trends, relaxing in a high-stress environment. Shale gas revolution in the US will have profound impact on different companies. New solutions in biotechnology help find and develop renewable alternatives for fossil-based commodities and for pharmaceuticals

Key components Vopak, SGS, Intertek, Burlington Northern (taken over by Berkshire Hathaway) Nalco, Syngenta, DSM, Arcadis, Veolia, Flour Samsung Electr., HSBC, Roche, Oracle, Coca-Cola, LVMH, Caterpillar, Walmart Samsung Electr., Adidas, Genting B., Mead Johnson, Heineken, Prudential, Intertek BASF, DSM, Daimler, Fresenius, LOral, Intertek, Sanofi, Siemens Mead Johnson, Bureau Veritas, Thermo Fischer, Symrise, Vopak, Fresenius, DSM, Keppel Corp. Adidas, Apple, Daimler, Fedex, Randstad, Simon Property, Swatch, Wereldhave Mead Johnson, Mosaic, Gea, Symrise, Starbucks, Actelion, Macarthur Coal, Qiagen Apple, Philip Morris, Allergan, Lanxess, Coca-Cola, Nestl, Reckitt Benckiser, Starbucks BASF, DSM, Philip Morris Intl., Royal Dutch, Roche, AT&T, Nestl, Bristol Myers, SingTel, Vodafone Allergan, Estee Lauder, DSM, WeightWatchers, Starbucks, LOral, DaVita Dow Chemical, BASF, LyondellBasell, Intl. Paper, Kinder Morgan Ecolab, Actelion, Agrium, Amgen, BASF, Biogen, Celgene, DSM, Gilead, Mosaic, Roche, Sanofi, Syngenta

Current theme recommendation Strong buy Buy

4Q09 2Q10 3Q10

Buy Strong buy Buy

Quality counts

4Q10

Strong buy

The return of the consumer Mergers and Acquisitions for a reason Pricing power

1Q11 2Q11

Hold Buy

3Q11

Buy

High-quality dividends The care industry Step on the gas Biological solutions

4Q11

Strong buy

1Q12 2Q12 4Q12

Strong buy Strong buy Strong buy

Quarterly Outlook Q1 December 2012

Equity theme Masters of manufacturing

Our focus this quarter is on the production sector, mainly as we see inventory rebuilding in fast-growing economies, especially China, as well as the US once the fiscal cliff is overcome. We also highlight those companies that will benefit most from new insights and innovations for manufacturing processes. In an increasingly global landscape, competitive advantages have to be combined with excellent quality and high efficiency to achieve good margins. Cost advantages are fading as salary levels converge between large economies, and higher material costs are a common issue (beneficiaries of low natural gas prices in the US are one exception). What makes a difference now is how production facilities are managed, what tools can increase productivity and who complies with the high standards of quality demanded in a more crowded suppliers market. The result is that makers of higher-value goods, in Asia especially, are on the rise.

Research & Strategy

Edith Thouin Head Equity Theme Research

Global improvements are in evidence, particularly in information technology, with software providers and consultants like SAP, Oracle and Accenture dominating. Production lines are manned by robots and electronically monitored. Close interaction between producers and customers ensures that quality is high and consistent. This strengthens the ties between users and providers, assuring long-term and reliable partnerships beneficial to all, and with strong franchises built by the suppliers. Optimising systems and processes such as Six Sigma, developed by Motorola and GE, and Total Quality Management are becoming the global standards. Quality testing by trusted operations, such as SGS, Intertek and Bureau Veritas, rounds off these production tools.

EMC

BMW
E Ele mers ctr on oni cs
B AB

BASF

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Hy u Mo nda tor i s

Intertek

Mi ch

Sc hn eid er La nx es s

eli n

Qualcomm

Volkswagen

ng msu nics Sa tro Elec

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Bond market outlook

A maturing bull market

Research & Strategy

Roel Barnhoorn Head Bond Theme Research

US Treasuries as the canary in the coal mine

In a period of sovereign stress in developed markets, core government bonds were clear beneficiaries. Investors looking for safe havens invested massively in US Treasuries, UK Gilts, and German Bunds. Industrial-country central banks targeted these bonds to help their economies and financial systems, as they represent the benchmarks for other sources of funding for credit and corporate issuance. These two forces have pushed yields to unprecedented lows. Central bankers obviously want to avoid falling into a depression or to repeat the anaemic growth path Japan has followed, which should limit any big move up in yields. This backdrop will keep interest rates low in 2013 and maintain the quest for yield across fixed-income markets. But such low yields offer little room for error when investing in these bonds. As cyclical forces may ramp up once negotiations on the fiscal cliff are over, US Treasury volatility may contaminate other government bonds, with ripple effects into other parts of the fixed-income market.

push through effective austerity measures should benefit from investment flows: Belgium, Ireland, Italy and Spain are making clear progress, but the path is long and arduous. In the meantime, emerging market government debt has become a new reference for quality. Policymakers of fastgrowing nations are trying to maintain a minimum growth trajectory. International flows are attracted by the improvement seen in the credit rating of both Asian states and corporations.

Government bonds, 10-year yield

8 7 6 5 4 3

A new pecking order

Several core government bonds (namely Austria, France and the US) have fallen from AAA grace or are on negative watch (the UK); peripheral eurozone countries are rushing to adjust their debt; and countries like Ireland that entered the sovereign debt crisis early are finally able to issue bonds on the capital markets. Countries that are independent enough to

2 1 US 0 Dec 2002 Germany Dec 2006 Spain Dec 2008 Dec 2010 Dec 2012

Dec 2004

Source: Bloomberg

Asset class: Underweight Government: Underweight

Fundamental view Low-yielding core government bonds are risky at current levels Central bank bond purchases aim to reduce funding costs

Drivers Low risk appetite

Our recommendations Go for neutral duration Prefer Belgian and French government bonds Consider opportunities in eurozoneperiphery issues in EUR and USD Take profits on expensive investment-grade bonds See recommendations in our Credit Handbook, Covered Bond Handbook and Monthly Bond Opportunities Buy global high-yield bonds Look at Asian corporate bonds for emerging-market allocation

Investors quest for yield

Corporate: Overweight

Treasury management makes firms stronger and better positioned than states The search for yield supports tighter credit-yield spreads Low-yielding government bonds should support high-yielding bonds further Market liquidity remains limited

Low default rates supported by strong balance sheets

Quarterly Outlook Q1 December 2012

11

Research & Strategy

Roel Barnhoorn Head Bond Theme Research

Bond portfolio allocation

Selective exposure to manage the stress
Bond investors are caught between opposing forces: the sovereign stress that is simply more acceptable because of friendly central banks, and the very low and negative real yields of the best quality bonds. Although the bond market rally is very mature, a return to economic normality is uncertain, and bonds can continue to offer a decent alternative to cash as well as diversification for the portfolio, in case economic growth does not materialise and regardless of current low interest rates. But ultra-low yields make bonds that much more sensitive to the benchmarks (US Treasury notes and German Bunds), which may fluctuate in 2013, justifying a prudent exposure with an underweight in bonds. The benefits of low-quality corporate bonds and emerging markets will continue providing a source of yield as the default rates on these asset classes should stay muted.

Recommended bond portfolio duration: Neutral

35.0% 12.5%

12.5% 40.0%

Plan BBB Opportunities in government and corporate bonds

In 2012, core government bond yields have dropped and those of eurozone peripherals have risen, suggesting that markets have the ability to differentiate and apply suitable risk premia to the various government bond markets. These differences will ultimately be arbitraged, based on the success and failure of governments to implement fiscal adjustments, and this will attract money flows. We feel confident enough to promote Spanish government bonds for portfolios denominated in EUR and USD. In addition, corporate bonds from Spain and, to a lesser extent, Italy are more attractive than their sector peers, such as telecoms and utilities. The search for yield explains why most bonds are expensive and trade at a premium to par. The flip side is that high bond prices increase the risk for investors, and companies are tempted to issue more debt. Even investors with a strong investment grade bias are looking to lower-grade bonds to capture yield. The wise path for clients is to find a new balance in the bonds we cover between high and lower quality (BBBBB) and developed and emerging market universes.

High-grade government and supranational Investment-grade credits Emerging-market debt (funds) US high-yield credits (funds)

Source: ABN AMRO Private Banking

12

Currency outlook
Common factors

Group Economics
Georgette Boele Coordinator FX and Commodity Strategy

Bullish on the US dollar

In the near term, the US dollar may come under pressure if the US fiscal cliff is averted, as safe-haven flows to the currency could ease. This weakness could be temporary, though, as any deal would remove a big block to the US gaining momentum. As it is, US economic growth is expected to outperform the eurozones next year and this will make the US dollar and US assets attractive. The outlook for the US current account, too, is improving because production of shale gas and oil is pointing to lower energy imports over time. Further, the fiscal deficit is narrowing. But loose monetary policy is a mixed blessing for the greenback: positively, it means that the Federal Reserve is geared towards supporting the economy low real yields are negatives. In summary, we emphasise the US growth story because real interest rates are low in most developed economies and because the impact of several rounds of quantitative easing on the dollar is largely priced in (see graph). Our preferred currencies have commonalities: a central bank reluctant to ease further, a resilient economy, low exposure to the eurozone crisis, relatively high exposure to the US economy and attractive long-term valuation.

Our top picks versus the USD for 2013

Our top picks are the Canadian dollar, Mexican peso and Brazilian real. Mexicos improved competitiveness and Brazils relatively aggressive macro stimulus make us optimistic about their respective growth dynamics. In Asia, we still like the Singapore dollar (and when the time is right) the Korean won as good proxies for our expectations of moderate strength in Asian currencies next year. But as short-term intervention risk for the won is high, we prefer to wait for lower entry levels.

Historical relation between USD and US economic growth

12

US GDP in % yoy (Jan 1970 Sep 2012)

10 8 6 4 2 0 -2 -4 -6 -8 US dollar index 60 70 80 90 100 110 120 130 140 150 160

Our top picks versus the EUR for 2013

The Canadian dollar remains our top pick. We are also positive on the Norwegian krone. These are markets where the economy is relatively resilient and monetary policy is unlikely to become more accommodative. In addition, their economies are more diversified than other oil producers.

Source: Datastream, ABN AMRO Bank

Asset class Currency

Fundamental view (Group Economics) Positive on USD Diversification plays based on solid common fundamentals (see text)

Recommendations (ABN AMRO Private Banking) Accumulate USD above 1.30 per euro Top picks versus EUR: CAD, NOK Top picks versus USD: CAD, MXN, BRL SGD and KRW good proxies for moderate strength of Asian currencies.

Quarterly Outlook Q1 December 2012

13

Forecasts
They always say time changes things, but you actually have to change them yourself Andy Warhol

Research & Strategy and Group Economics

Our central scenario reflects the view that the world economy will regain momentum during 2013, marking the conflict between economies able to generate a cyclical recovery (BRICs, other fast-growing nations and the US) and those

toiling with fiscal adjustment (Japan and the EU). Market dynamics will depend on the pace and breadth of recovery, but the reduction of systemic risk achieved by the central banks has increased confidence in the forecasts.

Macro (%) 3 Dec 2012 Real GDP Growth 2013 ABN Market AMRO view 2.0 0.0 1.2 1.4 2.3 6.7 4.2 2.6 3.3 1.9 0.0 1.3 0.8 2.2 6.7 3.8 3.1 3.3 Inflation 2013 ABN Market AMRO view 2.1 1.7 2.3 0.2 1.9 5.4 6.2 5.0 3.9 2.0 1.9 2.3 -0.2 1.6 4.4 6.4 6.0 3.4

Equities Spot 3 Dec 2012 S&P 500 Euro Stoxx 50 FTSE-100 Nikkei 225 DAX CAC 40 AEX Hang Seng Index Shanghai SE Comp. Straits Times Index
U/W = Underweight O/W = Overweight

Active strategy U/W O/W O/W U/W O/W O/W O/W Neutral O/W Neutral

Forward P/E 2013 12.3 10.2 10.6 14.6 10.5 10.3 10.5 10.5 8.3 13.4

US Eurozone UK Japan Other countries* Em Asia Latin America EEMEA** World

1416.18 2585.86 5880.17 9458.18 7436.92 3573.12 338.21 21767.85 1959.76 3065.74

All forecasts are annual averages of quarterly year-on-year changes. * Australia, Canada, Denmark, New Zealand, Norway, Sweden and Switzerland ** Emerging Europe, Middle East and Africa Source: ABN AMRO Group Economics, Consensus Economics, EIU

Currencies Interest rates and bond yields (%) FX pair 3 Dec 2012 Mar 2013 United States US Fed 3-month 2-year 10-year Germany ECB Refi 3-month 2-year 10-year 0.75 0.50 0.00 1.45 0.75 0.30 0.10 1.50 0.75 0.30 0.20 1.70 0.75 0.30 0.35 2.00 0.75 0.30 0.40 2.20 0.25 0.50 0.26 1.65 0.25 0.30 0.20 1.60 Jun 2013 0.25 0.30 0.20 1.90 Sep 2013 0.25 0.30 0.30 2.20 Dec 2013 0.25 0.30 0.30 2.40 EUR/USD GBP/USD EUR/GBP USD/CHF EUR/CHF USD/JPY EUR/JPY USD/CAD AUD/USD NZD/USD EUR/NOK EUR/SEK 3 Dec 2012 Mar 2013 1.30 1.61 0.81 0.93 1.21 82.30 107.40 0.99 1.04 0.82 7.36 8.66 1.25 1.56 0.80 0.98 1.23 82.00 103.00 0.98 1.00 0.80 7.50 8.50 Jun 2013 1.25 1.56 0.80 1.00 1.25 82.00 103.00 0.96 1.00 0.80 7.25 8.25 Sep 2013 1.20 1.52 0.79 1.04 1.25 85.00 102.00 0.95 0.98 0.78 7.00 8.00 Dec 2013 1.15 1.47 0.78 1.13 1.30 88.00 101.00 0.95 0.96 0.78 7.00 8.00

14

Research & Strategy

Olivier Couvreur CIO Multimanager, Hedge Funds Erik Keller Senior Hedge Fund Analyst

Hedge funds
Diversifying in a low-yield environment
Low interest rate risk
Central banks supportive actions have abated fears of systemic risk, leading to further declines in volatility, interest rates and spreads. Investors who have grown accustomed to capital gains in bond portfolios are likely to find current yields and spreads inadequate. At these low interest rate and volatility levels, investors are increasingly exposed to interest rate risks. Multi-strategy funds of hedge funds with a low to moderate volatility profile can provide a steady return that is relatively insensitive to interest-rate and bursts of inflationary risk, thus providing risk reduction and return enhancement against a traditional fixed-income portfolio. Macro and most long-term commodity trading advisors (CTAs) have recently encountered difficulties trading the current market environment as most longer-term CTAs were unable to capture the short-term trend reversals in equity and commodity markets. However, macro and CTA funds have proven their use as defensive diversifiers illustrated by the positive performance of these funds when equity markets experience severe corrections. We therefore think that these strategies should play a role in a portfolio as insurance against tail risks. We maintain our overweight recommendation for diversified funds of hedge funds as they can provide return enhancement and (interest rate) risk reduction against a traditional portfolio of bonds. Investors who have already allocated to these funds of funds could also consider adding long/short equity-focused funds of funds to their portfolios, as they can bring additional returns but with only slightly more volatility.

Return enhancement
This more constructive market environment is also supportive for long/short equity funds. These funds have increased their market exposure (see graph), and have indicated that they can find investment opportunities in European and US equity markets. Managers focus is on alpha generation through stock selection on both the long and short side, and less on beta or market exposure management. Multi-strategy funds of hedge funds have also increased their exposure to long/short equity funds to benefit from this more favourable market environment. Long/short equity funds are also suitable for investors who do not like to take strong bets on the direction of the equity markets at this point in the cycle. Long/short equity hedge funds increase their market exposure, %
60 50 40 30 20 10 0 Oct 2006

Hedge fund strategies:

Positive on long/short equity and relative value Neutral on global macro/CTA Negative on event-driven Long/short equity: We prefer variable biased funds that are flexible in managing their market exposure and have good stock selection capabilities on both the long and short side Relative value: We prefer credit and fixed-income focused long/short funds. Interest rate and spread levels have already compressed significantly but the flexibility of these funds should enable them to make money on the long and short side and protect capital better than long-only funds in a more volatile interest-rate and spread environment Macro/CTA: We favour a diversified basket of CTAs and discretionary global macro funds as insurance against periods of market disruption and tail risk events Event-driven: Merger arbitrage funds have difficulty making money in the current environment as the deal flow has been muted and many deals have even collapsed. As merger arbitrage is at the core of many event-driven funds, we think a downgrade of this strategy is preferred

Oct 2007

Oct 2008

Oct 2009

Oct 2010

Oct 2011

Nov 2012

Source: Lyxor Asset Management

Quarterly Outlook Q1 December 2012

15

Group Economics
Hans van Cleef Energy Economist Georgette Boele Coordinator FX and Commodity Strategy

Commodity outlook
A neutral view generally, but gold less bright
Balancing forces in oil
Upward and downward pressures on oil prices are balancing out and, despite some inherent volatility, this has resulted in relatively stable (see graph) market conditions. Production is set to continue rising in several regions, either owing to new sources of production, as in the US and the former Soviet Union countries, or due to the resumption of production, as in Nigeria, Libya, Angola and Iraq. In addition, India and South Korea have restarted importing Iranian oil. Demand on the other hand will stay weak on a moderate global recovery. Most developed economies will feel the effects of a fiscal hangover at the same time as authorities in big emerging markets stay rather cautious in implementing monetary and fiscal stimulus. WTI remains pressured by increased production and weak local demand, while Brent is supported by geopolitical tensions, factors keeping the Brent WTI spread above USD 20. Weak demand for oil alongside higher production should result in downward pressure, not only in the coming months but also longer term. In fact, when looking at supplydemand dynamics, this trend should keep the lid on oil prices in the years to come assuming that geopolitical tensions do not escalate. an environment of loose monetary policy, low real yields and tensions between China and Japan and in the Middle East. Further, some investors are worried about higher inflation in the future. Yet these elements have not pushed gold prices to new highs, because most are already factored in. We expect investors to lose their patience with gold in 2013 and 2014 if the US economy maintains its resilience, the US dollar rallies on cyclical factors or alternative investments become more attractive than gold.

Oil supply outpaces demand

92 90 88 86 84 82 80 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 Demand l.a. Difference r.a. Supply l.a. 3 2 1 0 -1 -2 4

Gold losing its shine

World gold demand for jewellery has been on a structural declining trend while total demand for the metal has stayed high, mainly due to a rise in investment demand for it. But here, too, the underlying picture is weakening. Investment demand is closely linked to expectations for the gold price in

Source: Bloomberg

Asset class Commodities Neutral

Fundamental view (Group Economics) Group Economics has a neutral view on price development, as the supplydemand factors balance out

Recommendations (ABN AMRO Private Banking) Commodity index exposure

16

Research & Strategy

Manuel Hernandez Fernandez Property Specialist

Property
Capturing the quality dividend
Dynamics have become supportive for the sector, essentially from two angles: attractive valuations in the US (see graph), and improving fundamentals in Asia (mainly developed Asia: Australia, Singapore, Hong Kong and Japan). Our regional allocation in Asia is upgraded, which complements the positive view for the US. The current economic and property soft landing in China and Hong Kong augurs well for robust volume sales by developers and for stable residential prices. The average leverage for property companies in Asia (23%) is also lower than in Europe (43%) and the US (38%). However, the expected return for the next year is lower for Asia (79%), compared with Europe at 911% and the US at 810% and in the dividend yield 3% Asia, 4% US and 6% Europe. Valuations and performances in Asia differ by country and we favour developed Asia at the expense of emerging Asia (for example, China) given our preference for quality, and the meaningful supply constraints. The same view applies to the office sector, which is seeing improving demand from international tenants. In the US, valuations are more appealing than in previous quarters, having gone down from an 11% premium to net asset values (NAVs) to the current 3% premium. This stabilisation is nurtured by the strong access to capital of real estate investment trusts (REITs), which can solidify balance sheets and help them to pursue acquisitions. US REITs are expected to raise dividends at an above-trend rate, above the 6% mark on average, based on cash-flow projections for the next four years. Simon Property Group, for example, expanded its revenues by 14% year over year in the third quarter of 2012 and raised its dividend and guidance for the full year. The search for yield has polarised the direct market between prime and secondary assets all over the globe. Our stance is to focus on top-tier companies that can generate compelling dividend yields of 34%, which could imply paying a premium for investments in the best locations, regions and categories. We avoid lower-tier companies, even at what may become unsustainable double-digit yields, mainly in Europe.

Attractive valuations for real estate: price to book values

2.5x

2.0x

1.5x

1.0x

0.5x Europe 0.0x Nov 2007 Nov 2008 Asia Nov 2009 N. America Nov 2010 Nov 2011 Nov 2012

Source: Bloomberg

Asset class Overweight

Fundamental view US REITs: Improved valuations on top-tier companies Retail and commercial sectors are our favourites Asia: Developed markets versus emerging markets Retail and office sectors preferred Europe: The sector is paying its toll for the crisis Top-tier companies preferred

Our recommendations Overweight: North America

Neutral: Asia

Underweight: Europe

Quarterly Outlook Q1 December 2012

17

Research & Strategy

Olivier Palasi Head Private Equity

Private equity
The private equity wheel goes round
2013 could begin auspiciously: all segments of the private equity industry are seeing buoyant activity, and exit routes are increasing as the IPO market gets its colour back. Fundraising is in a recovery phase, and the best performers can raise a new partnership in a mere 15 days. Private equity fund managers have a clear visibility of trends and can focus on the most promising deals. Asia and rest of the world economies continue to be perceived as better protected from the negative aftermath of the crisis, and should overtake Europe to become the second-largest fundraiser. deploy their dry powder and taking on board overpriced assets. A high level of primary deals remains a reference for a strong buyout team. The US large-cap buyout sector is expected to start a new cycle. We remain supportive of mid-market funds with clearly identified deal flows.

Secondary market
The secondary market is buoyant and large transactions are frequent, as for instance the recent deal with Lloyds Banking Group for around USD 1.7 billion. The majority of traded interests have been located in North American vehicles. Listed private equity funds of funds are also contributors of funds stakes. Further, many pension funds are adopting a proactive approach, using the secondary market to remove underperforming managers. Moreover, Asias fundraising take-off will fuel a very strong pipeline of opportunities in the coming years. According to an October 2012 Preqin survey, the top 10 secondary fund managers have in aggregate some USD 28.2 billion available for acquiring secondary positions. We continue to favour medium-sized partnerships with a clear cash return strategy above a multiple of 1.6x.

Distressed
Geographically, the US as a developed market with an established legal environment and managers with experience is clearly the place to be. The European market is in its infancy and local partnerships in fundraising do not have the same credentials as their American peers who develop strategies for Europe. We prefer both distressed-debt trading funds (because positions are held for a relatively short time) and distressed-debt for control funds (which are focused either on controlling a company restructuring in potential bankruptcy or insolvency process, or on taking equity control through a debt-for-equity swap).

Buyouts
Uncertainties on equity markets have a negative influence on the buyout segment. They generally increase the number of secondary buyouts, that is, private equityowned companies sold to other private equity firms. With a solid industry network and operating capabilities, a new owner intends to take the company to a higher level of development. We select investment teams able to run this kind of deal. But we are uncomfortable with investment managers being in a rush to

Venture
The year 2013 will start with a favourable environment for capital early-stage funds. Almost USD 12 billion will have been raised by end-2012 and many funds have closed above target to invest in technology areas, including cloud computing, mobile infrastructure, social commerce and digital media.

18

Asset allocation
Picking up exposure as the world economy improves
Asset allocation: more exposure
The rationale for the allocation reflects a return to a moderate recovery path globally, contained systemic risks linked to the eurozone debt crisis and a positive resolution to the fiscal cliff albeit with short-term volatility. With the medium-term scenario in mind, investors are advised to use this volatility to gain exposure to equities that will represent a medium-term source of income and return, as cash and bonds are less and less adequate for these goals. Accordingly, ABN AMRO Banks Global Investment Committee has taken further steps in its path to gain exposure to risky assets by increasing its existing overweight in equities and closing its underweight in commodities in its multi-asset portfolios. The preferred equity regions are Europe and emerging markets, balanced by a negative positioning on the US and Japan. In fixed income, we prefer corporate, high-yield and emerging market debt to core government bonds. Peripheral European bonds, in particular Spanish and Italian government bonds, could be a good alternative for non-defensive clients in their search for yield.

Risk: evaluation and control

The changes in our investment policy increase the total risk exposure of our asset allocation profiles. Based on separate calculations, the risk of our balanced portfolio (profile 3) increased from 7.8% to 8.4%, compared with 6.2% for its benchmark. As new challenges and opportunities appear, we will continue to evaluate and control the risk implications of our tactical positioning.

Performance: a quiet Q4
The final quarter has turned out quiet. Indeed, global equities have slightly risen and bonds have been basically flat, although lower-graded corporates and high-yield bonds have marginally outperformed core sovereign debt. All our asset allocation profiles took advantage of this outperformance in both absolute and relative terms: for instance, since start of the year a balanced portfolio (profile 3) gained 7.98% in USD, outperforming the benchmark by 165 basis points, and 10.10% in EUR, almost the same as the benchmark.

Audited performance of our Tactical asset allocation vs. its Strategic asset allocation
EUR 22 May 2003 to 30 November 2012*
Strategic Tactical Excess Return

USD 2012 YTD (30 November) 22 May 2003 to 30 November 2012*

Strategic Tactical Excess Return

2012 YTD (30 November)

Strategic Tactical Excess Return

Strategic

Tactical

Excess Return

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

52.99 54.71 68.52 70.46 77.58 79.01

65.17 66.38 89.71 90.89 101.87 102.78

12.18 11.67 21.19 20.43 24.29 23.77

7.80 9.01 9.98 11.25 12.48 13.39

8.64 9.43 10.12 10.80 11.70 12.20

0.84 0.42 0.14 -0.45 -0.79 -1.19

54.15 57.93 76.20 80.29 88.60 91.55

68.12 70.42 94.07 96.28 107.92 109.63

13.97 12.49 17.86 15.99 19.31 18.08

2.04 4.53 6.43 8.89 11.28 13.02

5.69 7.13 8.18 9.42 10.81 11.72

3.65 2.60 1.76 0.53 -0.47 -1.29

* 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.

Quarterly Outlook Q1 December 2012

19

Research & Strategy

Gerardo Amo Quantitative and Risk Analysis

continued
Asset allocation of model portfolios showing EUR/USD risk profiles in %, starting with our most conservative (Profile 1) and ending with that most exposed to market risks (Profile 6).
Asset allocation Asset class Money markets Bonds* Equities Alternative investments
Funds of hedge funds Real estate Commodities

Profile 1 Neutral 5 90 0 5
5 0 0

Profile 2 Tactical Deviation +13 -16 +3

8 0 0 +3

Strategic Min. 0 40 0 0

Max. 60 100 10 10

18 74 0 8

Neutral 5 70 15 10
5 3 2

Strategic Min. 0 30 0 0

Tactical Max. 70 85 30 20 7 58 20 15
8 5 2

Deviation +2 -12 +5 +5
+3 +2

Total Exposure**

100

100

100

100

Asset allocation Asset class Money markets Bonds* Equities Alternative investments
Funds of hedge funds Real estate Commodities

Profile 3 Neutral 5 55 30 10
5 3 2

Profile 4 Tactical Deviation -5 -9 +9 +5

8 5 2 +3 +2

Strategic Min. 0 20 10 0

Max. 70 70 50 20

0 46 39 15

Neutral 5 35 50 10
5 3 2

Strategic Min. 0 10 20 0

Tactical Max. 70 55 70 30 0 25 60 15
8 5 2

Deviation -5 -10 +10 +5

+3 +2

Total Exposure**

100

100

100

100

Asset allocation Asset class Money markets Bonds* Equities Alternative investments
Funds of hedge funds Real estate Commodities

Profile 5 Neutral 5 15 70 10
5 3 2

Profile 6 Tactical Deviation -5 -4 +9

5 3 2

Strategic Min. 0 0 30 0

Max. 70 40 90 30

0 11 79 10

Neutral 5 0 85 10
5 3 2

Strategic Min. 0 0 40 0

Tactical Max. 60 25 100 30 0 0 90 10

5 3 2

Deviation -5 +5

Total Exposure**

100

100

100

100

* Recommended duration: Neutral. Benchmark: Bank of America, Merrill Lynch Government Bonds 110 years. ** Foreign exchange exposure; only equity markets and a small portion of alternative investments are exposed to foreign currencies.

20

Contributors
Members of the ABN AMRO Bank Global Investment Committee Didier Duret didier.duret@ch.abnamro.com Gerben Jorritsma gerben.jorritsma@nl.abnamro.com Han de Jong han.de.jong@nl.abnamro.com Arnaud de Dumast arnaud.de.dumast@fr.abnamro.com Wim Fonteine wim.fonteine@nl.abnamro.com Bernhard Ebert bernhard.ebert@de.abnamro.com Group Economics Nick Kounis Georgette Boele Marijke Zewuster Bond Research & Strategy Team Roel Barnhoorn Jeroen van Herwaarden Agnes Pell-Charron Carman Wong Grace M.K. Lim Equity Research & Strategy Team Sybren Brouwer Thomas Helfer Daphne Roth Fera Wirawan Ivy Pan Edith Thouin Markus Glockenmeier Yunpu Li Alfred Schoengraf Beat Lang Jens Zimmermann Margareta Jonker Ralph Wessels Emilie Bruneau Gustavo Guimaraes Alternative Investments Olivier Couvreur Olivier Palasi Manuel Hernandez Fernandez Erik Keller Technical Analysis Aad Hoogervorst Demis Bril Chief Investment Officer Private Banking Global Head Discretionary Portfolio Management Chief Economist Head Investments Private Clients Neuflize OBC Senior Investment Specialist and Advisory Delegate Head Discretionary Portfolio Management Bethmann Bank

nick.kounis@nl.abnamro.com georgette.boele@nl.abnamro.com marijke.zewuster@nl.abnamro.com

Head Macro Research Coordinator FX and Commodity Strategy Head Emerging Markets

roel.barnhoorn@nl.abnamro.com jeroen.van.herwaarden@nl.abnamro.com agnes.pelle.charron@ch.abnamro.com carman.wong@hk.abnamro.com grace.m.k.lim@sg.abnamro.com

Head Bond Theme Research Credit Analyst Credit Analyst Head of Emerging Bond markets Emerging market Bond Analyst

sybren.brouwer@nl.abnamro.com thomas.helfer@ch.abnamro.com daphne.roth@sg.abnamro.com fera.wirawan@sg.abnamro.com ivy.pan@hk.abnamro.com edith.thouin@nl.abnamro.com markus.glockenmeier@bethmannbank.de yunpu.li@bethmannbank.de alfred.schoengraf@bethmannbank.de beat.lang@ch.abnamro.com jens.zimmermann@ch.abnamro.com margareta.jonker@nl.abnamro.com ralph.wessels@nl.abnamro.com emilie.bruneau@fr.abnamro.com gustavo.guimaraes@fr.abnamro.com

Global Head Equity Research Head Equity Research US market, Materials Head Asia Equity Research, Australia, EM Asia Equity Analyst Japan, Singapore, South Korea Equity Analyst China, Hong Kong Head Equity Theme Research, Materials, Healthcare Equity Analyst Telco & Utilities, Europe Equity Analyst Consumer Staples, Latin America Equity Analyst Industrials Equity Analyst Consumer Discretionary Equity Analyst Energy, CEE, Middle East & North Africa Equity Analyst Netherlands Equity Analyst Financials Equity Analyst Neuflize OBC Inv. European IT Equity Analyst Neuflize OBC Inv. US Technology

olivier.couvreur@fr.abnamro.com olivier.palasi@fr.abnamro.com manuel.hernandez@nl.abnamro.com erik.keller@nl.abnamro.com

CIO Multimanager, Hedge Funds Head Private Equity Property Specialist Senior Hedge Fund Analyst

aad.hoogervorst @nl.abnamro.com demis.bril@nl.abnamro.com

Senior Technical Analyst Senior Technical Analyst

Quantitative Analysis and Risk Management Gerardo Amo gerardo.amo@ch.abnamro.com Paul Groenewoud paul.groenewoud@nl.abnamro.com Production Team Barbara Schiphorst Jonathan Aspin Christina Santore Christina Cain Andr Heemstra Kai A. Smith Special thanks:

Quantitative and Risk Analysis Quantitative and Risk Analyst

barbara.schiphorst@nl.abnamro.com j@j.aspin.name christina.santore@yahoo.com cgkcain@gmail.com andre.heemstra@nl.abnamro.com kai.smith@ch.abnamro.com Andrew Trythall

Global Coordination Editor Quarterly Outlook Editorial and Communication Support Editor Supporting Documents Editorial Support IAC Project Manager

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