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eke muttons rec.• The 5y ectues t v lefjed, Maeda% pnpnthes PorliOho iigivvirmcwo Wee Investment traffic lights Our tactical and strategic view *Eurozone (equities) While we stay neutral on Europe. we upgrade the Eurozone to overweight. The danger of a "Grexit- appears to have passed its peak so that investors can again focus on corporate data which should benefit from accelerating domestic consumption. *Germany (equities) r÷.2,U4 G)I!. Although German equities stand to benefit from several factors, the composition of the DAX is not optimal in the current environment. Car makers could be hit by sluggish Chinese demand, while industrials and chemicals will see a fall in investment *Asia ex Japan (equities) •d r— chee)ra °Melt, Rapidly falling prices on the Shanghai and Shenzen exchanges in June and July prompted government countermeasures. The impact on the economy should be limited in our view. Equities will remain volatile but cheaply valued H-shares could offer good opportunities in the months to come. 0 Healthcare (equities) rtcr: ie e. Pricing power, mergers and acquisitions and an ageing society will support the sector in the long run. But it has now outperformed the market for four years and is valued accordingly so that we do not upgrade it beyond neutral. (D Industrials (equities) • • Ct Low prices for oil and other commodities as well as economic adjustment in China are contributing to the current fall in investment, burdening industrials - more so in Europe than in the. United States. ()U.S. Treasuries (10-year) We are neutral on all U.S. Treasury maturities. Although we still believe that there will be an acceleration in economic growth In the second half of the year, the signals on the timing of the first interest-rate move by the Fed remain ambiguous. A December start looks increasingly possible. ties* Regions United States Europe Eurozone Germany United Kingdom Japan Emerging markets Asia ex Japan Latin America Consumer staples Healthcare Telecommunications Utilities Consumer discretionary Energy Financials Industrials Information technology Materials • • F • F • A • A • NI • • • • • • • • F Style Small and mid cap • 'as of 7/15/15 ()German Bunds (10-year) As for most bonds we also expect Bunds to swing back and forth in a trading range for the time being, offering short-term opportunities. Such as going tactically underweight. 0 U.S. investment grade a'n 'ArM • We downgrade U.S. corporates to underweight. The market tends to dry out during the summer holiday season, increasing possible volatility, particularly since banks cut back on their trading activities. Additional burdens are a full issuance calendar and the impending Fed hike. Refer to page 9 for the traffic lights key. ra t=iteenme Ce.)1/4* Ammaa. 611.)e I A:taixe 7015 CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0117747 SDNY_GM_00263931 EFTA01458000