EFTA Document EFTA01457962

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