2019
Global Market
Outlook
Richard Lacaille
Global Chief Investment Officer
Zurich, 13 November 2018
Geneva, 14 November 2018 This material is solely for the private use of SSGA clients and Prospects and is not intended for public dissemination. All the information contained in this presentation is as of date
Indicated unless otherwise noted.
For Investment Professional Use Only
2304964.1.1.EMEA.INST 1
Marketing Communication
2019 Global Market Outlook
2293442.1.1.GBL.INST 2
The Macro Picture • US
• Eurozone
• China and Emerging Markets
Tactical Themes • Sourcing upside in equities
• Late-cycle caution in fixed
income
• Tactical plays in currency
hedging
Strategic Themes • ESG investing
• Building capital-efficient equity
portfolios
The Macro Picture
3 2293442.1.1.GBL.INST
• Global growth slows
• Synchronized monetary tightening
• Inflation still contained
• US stands out with ongoing stimulus
• Trade remains biggest downside risk
Global Growth Momentum Wanes
Sources: State Street Global Advisors Economics, IMF, Oxford Economics. Data as of 10/1/2018. Projected characteristics are based upon estimates and reflect subjective judgments,
assumptions, and analysis made by State Street Global Advisors Economics. There can be no assurance that developments will transpire as forecasted and that the estimates are
accurate.
2293442.1.1.GBL.INST 4
-1
0
1
2
3
4
5
6
7
% World Real GDP Growth, % chg y/y State Street Global Advisors Forecast Long-Term Average
Despite Historic Unemployment Lows…
Sources: Macrobond, SSGA Economics, IMF, U.S. Bureau of Labor Statistics (BLS), Japanese Statistics Bureau, German Federal Labour Office (Bundesagentur Arbelt), U.K. Office for
National Statistics. Data as of 10/9/2018.
5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
3
4
5
6
7
8
9
10
11
12
13
United States, lhs Germany, lhs United Kingdom, lhs Japan, rhs
2293442.1.1.GBL.INST
Percent Percent
…Inflation Remains Contained
Sources: State Street Global Advisors Economics, IMF, OECD (Organization for Economic Co-operation & Development). Data as of 10/1/2018.
2293442.1.1.GBL.INST 6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018
G7 CPI % change y/y, SA G7 Core CPI % chg y/y, SA (All Items Less Food and Energy)%
Synchronous Monetary Tightening, But Slowly
Sources: Macrobond State Street Global Advisors Economics. Data as of 10/1/2018.
2293442.1.1.GBL.INST 7
-1
0
1
2
3
4
5
6
7
8
Percent
Federal Funds Target Rate - Upper Bound Bank Of Japan Policy-Rate Balance Rate
Australia RBA Cash Rate UK Official Bank Rate
Germany Repo Rate Canada Overnight Rate
Global Liquidity Now Receding After
Recent Peaks
Sources: Federal Reserve, European Central Bank, Bank of Japan, Bank of England, State Street Global Advisors Research.
*Asset Purchase Facility only.
2293442.1.1.GBL.INST 8
-100
-50
0
50
100
150
200
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
Fed ECB BoE* BoJ Total
Monthly change in the central bank balance sheet,
12-month moving average, billion USD
Fiscal Capacity Much Weaker Than in 2007
Source: IMF World Economic Outlook, as of April 2018.
2293442.1.1.GBL.INST 9
0
10
20
30
40
50
60
70
80
90
100
110
120
130
-6 -5 -4 -3 -2 -1 0 1 2
General government debt, % GDP
General government balance, % GDP
2018
2007
2018
2007
2007
2007
2007
2007
2018
2018
2018
2018
United States
China
Germany
France
Italy
2007
2018
Eurozone
United
Kingdom
150
170
190
210
230
250
-3.5 -3.25 -3
2007
2018
Japan
Worse on both metrics Worse on debt metrics Better on both metrics
Open Economies Most Vulnerable to Trade War
Sources: OECD, State Street Global Advisors Research. All data as of 2016 except Brazil (2015).
2293442.1.1.GBL.INST
10
-10
-8
-6
-4
-2
0
2
4
6
8
10
-50
-40
-30
-20
-10
0
10
20
30
40
50
Germany Euro area Korea France Italy UnitedKingdom
China India Japan Brazil UnitedStates
% GDP % GDP
Exports / GDP (%) - LHS Imports / GDP (%) - LHS Net exports / GDP (%) - RHS - lhs - lhs - rhs
1 Eurozone
United States
2293442.1.1.GBL.INST 11
US Stands Out as Manufacturing
Powers Ahead
Markit Manufacturing Purchasing Managers’ Indices (PMIs)
Sources: Macrobond, HIS Markit. Data as of 10/2/2018.
2293442.1.1.GBL.INST 12
48
50
52
54
56
58
60
1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018
Index Emerging Markets United States
Rising US Capex Plans Offer Hope for
Productivity Revival
Source: NFIB US Department of Labor
2293442.1.1.GBL.INST 13
-1
0
1
2
3
4
5
6
15
18
21
24
27
30
33
36
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
US NFIB Planning A Capital Expenditure, Next Three to Six Months, SA, 6 mo ma, lhs
US Nonfarm Labor Productivity (Output per Hour), % Change y/y, 6 mo ma, rhs
US NFIB Planning a Capital Expenditure, Next Three to Six Months, SA, 6 mo ma, lhs
US Nonfarm Labor Productivity (Output per Hour), % Change y/y, 6 mo ma, rhs
US Inflation Trending Higher, But Gently
Sources: Macrobond, State Street Global Advisors Economics, U.S. Bureau of Labor Statistics (BLS), Energy Information Administration (EIA), U.S. Bureau of Economic Analysis (BEA).
Data as of 10/9/2018.
2293442.1.1.GBL.INST 14
-0.5
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018
Percent chg y/y US Core CPI US CPI, total US Core PCE Deflator
Eurozone
2293442.1.1.GBL.INST 15
European Growth Disappoints
Eurozone GDP Growth
Source: Eurostat.
2293442.1.1.GBL.INST 16
-2
-1
0
1
2
3
4
5
3/1/2010 3/1/2011 3/1/2012 3/1/2013 3/1/2014 3/1/2015 3/1/2016 3/1/2017 3/1/2018
Percent Real GDP Growth (quarter-over-quarter at annualized rate) Real GDP Growth (year-over-year)
Manufacturing Falls Off the 2017 Peak
Sources: Macrobond, HIS Markit. Data as of 10/2/2018.
2293442.1.1.GBL.INST 17
40
45
50
55
60
1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018
Index
Manufacturing PMI Manufacturing PMI New Orders Index Composite PMI Output Index
A Study in Contrast:
Italy vs. Germany Industrial Production
Sources: Macrobond, State Street Global Advisors Economics, World Bank Global Economic Monitor. Data as of 10/10/2018.
2293442.1.1.GBL.INST 18
80
90
100
110
120
130
140
Index, Jan 1999 = 100
Italy Germany
Does Italy Still Pose Contagion Risks?
Sources: Bloomberg and State Street Global Advisors Research for spreads; Bank of International Settlements for bank exposures; IMF World Economic Outlook for GDP. Left-hand chart
as of October 25, 2018; right-hand chart as of June 30, 2018.
19
0
100
200
300
400
500
600
700
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
Italy Spain10-year government bond yields,
spread over Germany, basis points
0
2
4
6
8
10
12
14
16Total (breakdownunavailable)
Off-balance sheetexposures
Other private sector
Banks
Government
Exposure of banks to
Italy, % GDP
2293442.1.1.GBL.INST
China and Emerging
Markets
2293442.1.1.GBL.INST 20
Emerging Market Momentum Wanes Emerging Markets growth momentum waned in 2018, with upheaval in debt-sensitive EMs such
as Turkey and Argentina. But China will matter most in 2019.
Sources: IMF, State Street Global Advisors Economics. Data for 2018 and 2019 is projected by State Street Global Advisors Economics. .
2293442.1.1.GBL.INST 21
GDP Growth in the Developing Economies
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
12/31/2010 12/30/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/30/2016 12/29/2017 12/31/2018 12/31/2019
Percent
Gross Domestic Product, Constant Prices, %chg, y/y - Emerging Markets
China Outstanding Debt Securities Doubled
Since 2014
All Issuers, All Maturities, All Currencies, USD
Sources: Macrobond, State Street Global Advisors Economics, Asian Development Bank (ADB), BIS (Bank of International Settlements). Data as of 10/10/218.
2293442.1.1.GBL.INST 22
0
2
4
6
8
10
12
14Trillion
Financial Corporations General Government Non-Financial Corporations All Issuers
China Building Debt at Lower Wealth Levels
Credit to GDP Ratio, From All Sectors to Private Sector
Sources: BIS (Bank of International Settlements), International Monetary Fund (IMF). Data as of 10/10/2018.
2293442.1.1.GBL.INST 23
0
50
100
150
200
250 Percent China Japan United States
Too Big to Ignore: The Age of China
China’s Contribution to Global GDP Growth (Purchasing Power Parity Basis)
2293442.1.1.GBL.INST 24
US 0.44
China 1.20
Asia (ex China) 0.89
Eurozone 0.23
Middle East & Africa 0.27
UK, 0.03
Other DM, 0.21
LATAM, 0.15
Emerging Europe & Russia, 0.25
Japan, 0.05
• Milestone year for joining
major indexes
• Long-term investment thesis intact
• “Strategic rivalry” with US
heightens trade tension and risk
of policy mistake
• Stock selection will be key in 2019
Source: IMF as of October 2018.
Tactical Positioning
25 2293442.1.1.GBL.INST
• Risk On: Growth and inflation remain supportive of US equities
• Mind the Gap: Monetary tightening requires caution as credit spreads start to widen
• Diverging Growth Engines: The US and China matter most as momentum in Europe, Japan and EM slows
Our Tactical Positioning
European Model Portfolio Tactical Positions
Source: State Street Global Advisors ISG as of 10/9/2018.
The Benchmark is a custom Tactical Asset Allocation Benchmark. European Model Portfolio Positions are as of the date indicated, are subject to change, and should not be relied upon
as current thereafter. The Model portfolio positions presented above are representative of ISGs market views and our positioning for our tactical portfolios as of the date given. The
results shown were achieved by means of a mathematical formula, and are not indicative of actual future results which could differ substantially. This information should not be
considered a recommendation to invest in a particular sector or to buy or sell any security shown. It is not known whether the sectors or securities shown will be profitable in the future.
0.0
-1.0
1.0
6.0
-1.0
-1.0
1.0
0.0
-7.0
1.0
1.0
0.0
MSCI Eurozone
MSCI Europe ex Europe
MSCI Pacific
MSCI North America
MSCI Emerging Markets
FTSE EPRA Europe REITs
Bloomberg Commodity Index
GOLD - Bloomberg Gold TR
Citi Core EMU Government Index
Citi EMU Credit Index
Barclays Euro High Yield
Euribor 1M
26
Benchmark Asset Class Benchmark Weight (%)
MSCI Eurozone 10.0
MSCI Europe ex Euro 5.0
MSCI Pacific 7.0
MSCI North America 22.0
MSCI Emerging Markets 6.0
FTSE EPRA Europe REITs 4.0
Bloomberg Commodity Index 4.0
GOLD – Bloomberg Gold TR 0.0
Citi Core EMU Government Index 22.0
Citi EMU Credit Index 10.0
Barclays Euro High Yield 5.0
Euribor 1M 5.0
Total 100.0
2293442.1.1.GBL.INST
Equity Outlook
2293442.1.1.GBL.INST 27
• Overweight US equities
• Be defensive in Europe amid political risk
• EMs offer attractive discounts to DMs
Earnings Growth Drives Equity Returns
Source: MSCI forward EPS estimates, State Street Global Advisors, Bloomberg. As of September 2018.
2293442.1.1.GBL.INST 28
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
2016 2017 YTD 2016 2017 YTD 2016 2017 YTD 2016 2017 YTD 2016 2017 YTD 2016 2017 YTD
MSCI World MSCI US MSCI Europe MSCI APACxJ MSCI Japan MSCI EM
FX Div EPS Growth Change in PE (%)Currency Dividend Earnings-per-share
(EPS) Growth Change in Price-to-
Earnings (P/E) Ratio (%)
2018
YTD 2018
YTD
2018
YTD
2018
YTD
2018
YTD
2018
YTD
Uncertainty Driving Demand for Higher Risk
Premia from Non-US Assets
Economic Uncertainty Index
Sources: MSCI, State Street Global Advisors, Bloomberg. As of September 2018.
2293442.1.1.GBL.INST 29
0
100
200
300
400
500
600
700
800US Europe China
US Stocks Are Rich for a Reason
Sources: State Street Global Advisors, Factset. As of 10/4/2018.
2293442.1.1.GBL.INST 30
MSCI EM
MSCI USA
MSCI China
MSCI Europe x UK
MSCI UK
MSCI Japan MSCI Asia ex J
Russell 1000
Russell 2000
1
1.5
2
2.5
3
3.5
4
5 7 9 11 13 15 17
Return on Equity
Price to Book
US Leading in EPS/Sales Growth and Revisions
Expected 2019 EPS—Rebased
Sources: MSCI forward EPS estimates, State Street Global Advisors, Bloomberg. As of September 2018. Projected characteristics are based upon estimates and reflect subjective
judgments, assumptions, and analysis made by State Street Global Advisors. There can be no assurance that developments will transpire as forecasted and that the estimates are
accurate.
2293442.1.1.GBL.INST 31
90
95
100
105
110
115
Dec-17 Feb-18 Apr-18 Jun-18 Aug-18
MSCI World MSCI EM MSCI Europe
MSCI USA MSCI JapanMSCI
World
MSCI
USA
MSCI
EUROPE
ex UK
MSCI
UK
MSCI
Japan
MSCI
EM
% 2019 EPS
Growth
9.39 9.39 10.31 7.96 4.53 11.51
% 2019
Sales
Growth
4.4 5.16 4.06 2.92 2.77 7.79
Expected 2019 EPS – in USD, Rebased
Supportive Levers for Earnings Capex, company priorities, government spending and buoyant US consumer point to positive period
for US equities
Sources: Bloomberg (Retail Sales); JP Morgan (CapEx); State Street Global Advisors (Government Spending and Key Management Topics).
2293442.1.1.GBL.INST 32
-40
-20
0
20
40
60
CapEx (%) 1H17 vs. 1H16 1H18 vs. 1H17
0
1
2
3
2017 2018 2019
Government Spending (% chg, y/y); 2018 and 2019 Projected
Shareholder
Payouts Trade War
Input Costs
Capital
Expenditure
Tax Reform
Consumer Strength
M&A Delever-
aging
Labor Costs
Key Management Topics
Textual Analysis Based on Q2 2018 Company Reports
-6%
-4%
-2%
0%
2%
4%
6%
8% % chg, y/y
Retail Sales Less Food/Auto/Gas
European Risk Premia Justified in Light of the
Real Political Risks
Sources: Worldscope, Factset, State Street Global Advisors. As at September, 2018. Price to Book ratios for Europe and US adjusted to MSCI World sector weights
2304964.1.1.EMEA.INST 33
-0.6
-0.4
-0.2
0
0.2
0.4
Jul-96 Jul-00 Jul-04 Jul-08 Jul-12 Jul-16
◄E
uro
pe C
heap
er
U
S C
heap
er►
Sector Adjusted Price to Book Spread (Europe minus US)
PB_DELTA AVG_PB_SPREAD
Italian 10Y Spreads
0
1
2
3
4
5
10/14/2013 10/14/2014 10/14/2015 10/14/2016 10/14/2017
-7
-6
-5
-4
-3
-2
-1
0
1
2
Oct-13 Oct-14 Oct-15 Oct-16 Oct-17
EURUSD25R3M BGN Curncy (R1)
GBPUSD25R3M Curncy (L1)
EUR/GBP Risk Reversal
Look for Better Entry Point in Europe, Even as
Valuations Disconnect From Fundamentals
2293442.1.1.GBL.INST 34
80
90
100
110
120
130
140
150
6/1/2013 6/1/2014 6/1/2015 6/1/2016 6/1/2017 6/1/2018
EuroStoxx Index Eurostoxx EPS
44
46
48
50
52
54
56
58
60
Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18
Markit Composite PMIs European Share Prices v. Earnings Per Share (EPS)
Sources: Macrobond, HIS Markit. Data as of 10/2/2018. Bloomberg data as of September 2018.
Manufacturing PMI Manufacturing
PMI New
Orders Index
Composite
PMI Output
Index
Sep-18
Emerging Market Valuations & EPS Growth
Offer Opportunities
Sources: Bloomberg, Worldscope, State Street Global Advisors. As at, September 2018. Projected characteristics are based upon estimates and reflect subjective judgments,
assumptions, and analysis made by State Street Global Advisors. There can be no assurance that developments will transpire as forecasted and that the estimates are accurate.
2293442.1.1.GBL.INST 35
EM valuations are roughly at their average level since 2003, but their valuations relative to
elsewhere are at all-time lows.
6
8
10
12
14
16
Jun-03 Jun-05 Jun-07 Jun-09 Jun-11 Jun-13 Jun-15 Jun-17
P/E NTM Average +1 SD -1 SD
EM Valuation More/Less at Average Since 2003
60
70
80
90
100
110
120
130
140
1 101 201 301 401 501 601 701
Days After Rebase Date
EPS 2018
EPS 2019
12% EPS Expected in 2018:
Earnings Cycle Needs to Stabilize
-1.5
-1
-0.5
0
-1
0
1
2
3
4
5ROE Diff P/B Diff
Rebased Change in Earnings Per Share Estimates
Price to Equity
Price to Equity,
Next 12 Months Average +1 Standard
Deviation
-1 Standard
Deviation
ROE Diff Return on
Equity Diff P/B
Diff
Price to
Book Diff
Sep-18
Better Value in EM Growth Sectors Markets have undervalued EM consumption relative to DM, even as slowing YoY retail sales in
China still point to strong consumer narrative overall.
Sources: Bloomberg, Worldscope, State Street Global Advisors. As of September 2018.
2293442.1.1.GBL.INST 36
0
5
10
15
20
25
30
35
China Retail Sales (y/y)
-0.60
-0.10
0.40
0.90
1.40
ROE Diff (EM-DM) P/B Diff (EM-DM)
EM versus DM: Return on equity (ROE) and Price to Book (P/B)
0.1
1
10
100
This is a log scale!
Cumulative Returns Book to Market
Value Stocks Outperform Over the Long Term
2293442.1.1.GBL.INST 37
-0.04
-0.02
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
10-year rolling returns
Book to Market
Cumulative return and rolling 10 year return of portfolio that is long the top quintile and short the bottom quintile of stocks in the NYSE, AMEX, and NASDAQ universes.
Sourced from: http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html as at 08/31/2018.
Value Underperformance Unusually Long-Lived Last ten years has been unusually extended period of underperformance, so should be close to
inflection point. Greatest upside happens early, so don’t give up on value now.
Drawdown return of portfolio that is long top quintile and short the bottom quintile of stocks in the NYSE, AMEX, and NASDAQ universes.
Sourced from: http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html as at 08/31/2018
2293442.1.1.GBL.INST 38
Drawdown of Fama French Price to Book Portfolio Return
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
-0.5
-0.45
-0.4
-0.35
-0.3
-0.25
-0.2
-0.15
-0.1
-0.05
0
Drawdown greater than 10% Drawdown
Sources: MSCI, Bloomberg. Data as at 09/30/2018.
2293442.1.1.GBL.INST 39
y = 0.0087x - 0.0321 R² = 0.2573
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0 5 10 15 20
Price to Book Spread for Highest P/B quintile and lowest P/B Quintile in Russell 1000
Subsequent five-year return
of Value versus Growth
0
2
4
6
8
10
12
14
16
18 Price to Book spread between high and low P/B quintiles within Russell 1000 Universe
When Value Is Cheap and Growth
Is Expensive, What Happens Next? Current P/B spread between top and bottom value quintile is 11.3
Where to Find Value? In What Environment
Does It Turn?
40 2293442.1.1.GBL.INST
Undervalued sector Reason for undervalue Catalyst for realization of value
Financials
(US more than Europe)
Prolonged interest rate environment
suppressing net interest margin, flat
yield curve
Rate rises in excess of
expectations, upward sloping
yield curve
Resources Sluggish global growth, lack of
cap-ex in oil services
Reduction in political risk, trade
war rhetoric, weaker USD, US
fiscal stimulus
Industrials Eurozone, Japan manufacturing Trade war resolution, European
political stability
Fixed Income Outlook
2293442.1.1.GBL.INST 41
• Maintaining modest overweight in credit but focusing on quality
• Consider short-duration opportunities
• Explore EM bonds and currencies for value
US Bonds Offer Value
2293442.1.1.GBL.INST 42
The market is pricing in future interest rates (5yr5yr) above our estimates (implied neutral nominal
rate) and those of the Fed (Fed long-run rate). This leads us to believe that US rates currently offer
value, either directly from the yield or from potential capital appreciation should the market reprice
towards these estimates over time.
0
0.5
1
1.5
2
2.5
3
3.5
4
1/1/16 1/1/17 1/1/18
% Fed long-run rate 5y5y Implied neutral nominal rate
Sources: Bloomberg and State Street Global Advisors as of October 2018.
10/1/18
Fed Hikes Make Short-Term Yields Attractive
Source: With the exception of the Prime Money Market, all yield and duration combinations are from Bloomberg Barclays indices as of 7/31/2018. The Prime Money Market exhibits the
SEC yield of the State Street Liquid Reserves Fund Premier Class as of 7/31/2018.
2293442.1.1.GBL.INST 43
1-3 Year US Credit US High Yield 1-5 Year
Cash Pay 2% Cap
US ABS
MBS
Global Aggregate
10 Year US Treasury Bellwether
US Aggregate
U.S. Floating Rate Notes
1-3.5 Year CMBS
CMBS
1-3 Year ABS US Government
Prime Money Market
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0 1 2 3 4 5 6 7 8 9
Yield to Worst (bps)
Modified Adjusted Duration
Italian Market Stress
Sources: State Street Global Advisors, Bloomberg, as of 10/17/2018.
2293442.1.1.GBL.INST 44
Spreads relative to German bunds
0
0.5
1
1.5
2
2.5
3
3.5
01/12/2015 01/12/2016 01/12/2017
France 10 Year Italy 10 Year Spain 10 Year%
10/17/18
Difficult to Hedge Brexit Risks in
Gilt Market
Sources: State Street Global Advisors , Bloomberg, as of 10/17/2018.
2293442.1.1.GBL.INST 45
Brexit fat tails around deal or no deal are material and binary
0
0.5
1
1.5
2
2.5
3
3.5
Oct 13 Jul 14 Apr 15 Jan 16 Oct 16 Jul 17 Apr 18
2-Year Gilt 10-year Gilt2-year Gilt % 2-year Gilt 10-year Gilt
Oct 18
Credit Spreads Offer Some Value
Sources: State Street Global Advisors , Bloomberg, as of 10/18/2018. Data is basis points of spread.
2293442.1.1.GBL.INST 46
High yield has repriced since 2017
50
100
150
200
250
Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jul 18
US IG Credit Euro IG Credit
200
300
400
500
600
700
800
900
Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jul 18
US High Yield Euro High Yield
bps
bps
Oct 18
Oct 18
Emerging Market Bonds & Currencies
Offer Value
Sources: Left hand chart: State Street Global Advisors estimate of fair value versus the US dollar as of August 30, 2018 — valuations above 0% imply overvalued and below imply
undervalued. This information should not be considered a recommendation to invest in a particular currency. It is not known whether EM currencies will be profitable in the future.
Right hand chart: State Street Global Advisors, Bloomberg Finance, L.P. as of October 11, 2018. GBI-EM Real Yield is an estimate based on JP Morgan GBI-EM Global Diversified
Index weightings as of September 30, 2018 (excluding Argentina, Uruguay and Dominican Republic which account for 0.9% of the index) and an estimate of real yield yields using
approximations of the average maturity for each country. Global Treasury Real Yield uses Bloomberg Barclays index weightings as of August 31, 2018 excluding emerging
economies and also uses approximations of the average maturity for each country. Past performance is not a guarantee of future results.
2293442.1.1.GBL.INST 47
-1.00
0.00
1.00
2.00
3.00
4.00%
GBI-EM Real Yield Estimate
Global Treasury Real Yield
EM Currencies Still Offer Value
-30%
-20%
-10%
0%
10%
20%
30%
40%
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
EMD Real Yields
US Dollar Strength to Persist in 2019
Sources: State Street Global Advisors /Bloomberg - 12/31/2017 to 09/30/2018.
*MSCI EM Index equity market capitalization weighted currency return vs. US Dollar.
2293442.1.1.GBL.INST 48
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
SEK AUD NZD EM* EUR GBP CAD JPY CHF NOK
Total Return vs. USD
Currency Return vs. US Dollar December 31, 2017 - September 30, 2018
Sterling Still Weak Post Brexit
Sources: State Street Global Advisors, Bloomberg, as of 10/17/2018.
2293442.1.1.GBL.INST 49
90
100
110
120
130
140
1994 1997 2000 2003 2006 2009 2012 2015 2018
BIS Real Effective Sterling Exchange Rate
To Hedge or Not to Hedge?
Source: State Street Global Advisors as of 09/30/2018.
2293442.1.1.GBL.INST 50
Currency Heat Map
Foreign Currency (%)
Base
Currency
(%)
AUD CAD CHF EUR GBP JPY NOK SEK USD
AUD 0.0 -3.6 18.1 -2.6 -16.7 -23.9 -22.7 -30.3 2.1
CAD 3.8 0.0 22.5 1.1 -13.6 -21.0 -19.8 -27.7 6.0
CHF -15.3 -18.4 0.0 -17.5 -29.5 -35.5 -34.5 -41.0 -13.5
EUR 2.6 -1.1 21.2 0.0 -14.6 -21.9 -20.7 -28.5 4.8
GBP 20.1 15.7 41.8 17.0 0.0 -8.6 -7.1 -16.3 22.7
JPY 31.4 26.6 55.1 28.1 9.4 0.0 1.6 -8.4 34.2
NOK 29.3 24.6 52.7 26.0 7.7 -1.6 0.0 -9.8 32.1
SEK 43.5 38.2 69.4 39.8 19.5 9.2 10.9 0.0 46.5
USD -2.1 -5.7 15.6 -4.6 -18.5 -25.5 -24.3 -31.7 0.0
For example, for AUD-based investors, CHF is 18.1% overvalued and GBP is 16.7% undervalued. So investors would want to have a high hedge
against CHF and low hedge against GBP.
overvalued currencies undervalued currencies
Strategic Issues for
Long-Term Investors
51 2293442.1.1.GBL.INST
• ESG
• Capital-Efficient Portfolios
ESG Investing
Source: Mozaffar Kahn, George Serafeim, Aaron Yoon, “Corporate Sustainability: First Evidence on Materiality,” The Accounting Review, Vol. 91, No 6.
2293442.1.1.GBL.INST 52
At State Street Global Advisors, we integrate leading ESG frameworks into our clients’ portfolios
through investment management and asset stewardship
“We find that firms with strong ratings on material sustainability issues have better future
performance than firms with inferior ratings on the same issues.”
—”Corporate Sustainability: First Evidence on Materiality,” Khan, Serafeim, Yoon (2016)
Environmental actions can impact
• Operational efficiency / costs
• Environmental liability
• Opportunities for low-carbon
revenue sources
Social behaviors can impact
• Effective management
of human capital
• Risks related to product/
service safety
• Reputation & trust with
customer base
Governance practices
can impact
• Long-term strategy &
capital allocation decisions
• Financial &
operational performance
• Regulatory liability
Why ESG Matters
Academic Evidence
Source: From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance, March 2015, University of Oxford and Arabesque Partners. Retrieved
01/20/2016. The authors reviewed 29 cost of capital studies, 51 operating performance studies, and 41 stock price studies, respectively. Past performance is not a guarantee of future
results. For illustrative purposes only and not intended as investment advice.
2293442.1.1.GBL.INST 53
Cost of Capital Operating Performance Stock Prices
90% of studies on cost of
capital show that high
ESG scores equate to
lower cost of capital
88% of studies show that
strong ESG performance
yields better operating
performance of firms
(e.g., ROA, Tobin’s Q)
80% of studies show
positive correlation
between high ESG
and superior stock
performance
Our ESG Investment Approach
1Mozaffar Kahn, George Serafeim, Aaron Yoon, “Corporate Sustainability: First Evidence on Materiality,” The Accounting Review, Vol. 91, No 6.
*Sustainability Accounting Standards Board: Our ESG scores are mapped to SASB’s materiality framework, bringing transparency to a commonly black-box process.
2293442.1.1.GBL.INST 54
Best-in-Class Data/Scoring
Our proprietary platform is built from 9+
data sources, resulting in unique E, S,
and G perspectives for each company,
plus five nuanced SASB-aligned*
metrics
Reporting on Risk
We generate both client-facing
reporting, and interactive portfolio
management tools for multiple views
on ESG exposure of a given portfolio
Risk-adjusted Returns
We design investment solutions to
deliver long-term performance by
leveraging frameworks that deliver
financial returns for investors according
to academic research1
Mitigate ESG risks
Seek higher returns
Support business
models solving
sustainability issues
Maximize a portfolio’s
ESG score on risk profile
Mitigate ESG risks
Support business
models solving
sustainability issues
Improve or maximize
a portfolio’s ESG score
Generate and measure
specific social and/or
environmental benefits
that align with purpose
Align portfolios with moral
and ethical values
Mitigate ESG risks
Influence companies to
change business models or
stop certain practices
Impact Investing
ESG Integration
Positive Screening
Exclusionary Screening
ESG Method
Investor Motivation/ Common Objectives
Active Ownership/Stewardship
Next Generation of Climate Strategies
Sources: State Street Global Advisors, MSCI, FTSE, S&P Trucost.
2293442.1.1.GBL.INST 55
Generation 1:
Exclusionary
Incorporation of “Climate Tilt”:
underweight above-average carbon
emitters
Generation 2:
Mitigation
Underweight above-average carbon
emitters; overweight companies
generating green (low-carbon) revenue
Generation 3:
Mitigation & Adaptation
Overweight
Green
Revenue
Resiliency
(Adaptation)
Underweight
Worse-than-
average carbon
emitters
Brown Revenue
Mitigation Adaptation
Objectives Minimize Carbon
Emission Intensity
Minimize Fossil
Fuel Reserves
Minimize “Brown”
Revenues
Maximize “Green”
Revenues
Build Resilient
Portfolio
Metrics CO2 Emission/
$M revenues
Embedded
CO2/$M revenues
% revenues
from extractives
activities
% revenues from
low-carbon tech
Score on
Climate Change
Preparedness
Mitigation and adaptation are complementary approaches for reducing risks of climate change impacts over different timescales—ideal given asset
owners’ need to balance short- and long-term risks and opportunities.
Over-diversification of Equity Managers =
Higher Fees for Less True Alpha
Sources: Morningstar, Axioma, State Street Global Advisors, As of 12/31/2015.
Mckay, Shapiro, and Thomas. “What Free Lunch? The Costs of Overdiversification”, Financial Analysts Journal, Q1 2018
The information contained above is for illustrative purposes only and is not indicative of the performance of any product managed by State Street Global Advisors. We constructed the
table above by selecting Equity Mutual Funds from Morningstar and equally-weighting them in a holding portfolio. The mutual funds were selected at random, and the results above are
from running that randomized selection 10,000 times. This illustration is as of 12/31/2015. This information is not the result of actual trading.
2293442.1.1.GBL.INST 56
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
0.75 1 1.25 1.5 1.75 2 2.25 2.5 2.75 3 3.25 3.5 3.75 4 4.25 4.5 4.75 5 5.25 5.5 5.75 6 6.25 6.5 6.75 7 7.25 7.5 7.75 8
Active Risk 1 Portfoliio
Active Risk 4 Portfolios
Active Risk 10 Portfolios
Active Risk 1 Portfolios
Active Risk 4 Portfolios
Active Risk 10 Portfolios
Using Factors to Build More Efficient
Equity Programs
Source: SSGA The information contained above is for illustrative purposes only.
As of 02/28/2018.
2293442.1.1.GBL.INST 57
Traditional Model Hybrid Model: Traditional + Factor
Core-Cap
Weighted (25%)
Core-Enhanced
(25%)
Option-
Based
Strategy
(Structured
#2) 5%
Futures-
Based
Strategy
(Structured
#1) 5%
Factor-
Based
20%
Active
Quant 20%
Core-Cap
Weighted Active #2 Active #4
Active #3
Active #1
The New Investment Reality:
Everything Shifts Lower
2293442.1.1.GBL.INST 58
Every Bip Counts! • Get more from your core
• Make factors your friend
• Align fees with value-add
• Leverage long time horizon
Build in Flexibility • Diversify across regions,
sectors, securities
• Position size matters
• Dry powder for tactical
opportunities
Manage
Drawdown Risk • Manage asymmetries
• Seek securities that protect
on the downside
• Consider overlay hedges
• Understand your ESG
exposure
.
2019
Global Market
Outlook – Through the
Flows Lens Antoine Lesné
Head of SPDR ETF Strategy & Research EMEA
November 2018
This material is solely for the private use of SSGA clients and prospects and is not intended for public dissemination. All the information contained in this presentation is as of date
Indicated unless otherwise noted.
2308596.1.1.EMEA.INST 59
Marketing Communication
Where Are Investors
Going?
60 2308596.1.1.EMEA.INST
• Equities Inflows Moderate
• Swings in Money Market Flows
• Emerging Markets Slow Revival
Global Flows Abate Across All Asset Classes
Sources: State Street Global Advisors Morningstar. Data as of 10/1/2018. – Flows are for Worldwide Open End funds, Money market and ETFs ex Funds of Funds and Feeder funds
2293442.1.1.GBL.INST 61
-400
-200
0
200
400
600
800
De
c-0
8
Ma
r-0
9
Jun-0
9
Sep-0
9
De
c-0
9
Ma
r-1
0
Jun-1
0
Sep-1
0
De
c-1
0
Ma
r-1
1
Jun-1
1
Sep-1
1
De
c-1
1
Ma
r-1
2
Jun-1
2
Sep-1
2
De
c-1
2
Ma
r-1
3
Jun-1
3
Sep-1
3
De
c-1
3
Ma
r-1
4
Jun-1
4
Sep-1
4
De
c-1
4
Ma
r-1
5
Jun-1
5
Sep-1
5
De
c-1
5
Ma
r-1
6
Jun-1
6
Sep-1
6
De
c-1
6
Ma
r-1
7
Jun-1
7
Sep-1
7
De
c-1
7
Ma
r-1
8
Jun-1
8
Sep-1
8
$ B
illio
ns
Equity Fixed Income Money Market Commodities Others (converts, alloc, property, alts…)
Asset Classes - 3 months cumulative flows
Sectors Flows - Snapshot Long Term Investors Sector Flows & Holdings
Source: State Street Global Markets – as of 31 October 2018. Characteristics are as of the date indicated, are subject to change, and should not be relied upon as current thereafter.
2308596.1.1.EMEA.INST 62
Energy
Materials
Industrials
Cons. Disc
Cons. Staples
Health Care
Financials
Info. Tech
Telecom
Utilities
Real Estate
Overvalued Undervalued
Un
de
rweig
ht O
verw
eig
ht
Energy
Materials Industrials
Cons. Disc
Cons. Staples
Health Care
Financials
Info. Tech
Telecoms
Utilities
Real Estate
Overvalued Undervalued
Un
de
rweig
ht O
verw
eig
ht
Energy
Materials
Industrials
Cons. Disc
Cons. Staples
Health Care
Financials
Info. Tech
Telecoms
Utilities
Real estate
Overvalued Undervalued
Un
de
rweig
ht O
verw
eig
ht
Global Europe US
Are Investors Back To EM Equities?
Emerging Market Equity Fund Flows – 3 months cumulative flows
2308596.1.1.EMEA.INST 63
(20.00)
(10.00)
0.00
10.00
20.00
30.00
40.00
50.00
Ma
r-0
7
Jul-0
7
No
v-0
7
Ma
r-0
8
Jul-0
8
No
v-0
8
Ma
r-0
9
Jul-0
9
No
v-0
9
Ma
r-1
0
Jul-1
0
No
v-1
0
Ma
r-1
1
Jul-1
1
No
v-1
1
Ma
r-1
2
Jul-1
2
No
v-1
2
Ma
r-1
3
Jul-1
3
No
v-1
3
Ma
r-1
4
Jul-1
4
No
v-1
4
Ma
r-1
5
Jul-1
5
No
v-1
5
Ma
r-1
6
Jul-1
6
No
v-1
6
Ma
r-1
7
Jul-1
7
No
v-1
7
Ma
r-1
8
Jul-1
8
$ B
illio
ns
EM Equity Non Index EM Equity Index OE fund EM Equity Index ETF
Sources: State Street Global Advisors Morningstar. Data as of 10/1/2018. – Flows are for Worldwide Open End funds, Money market and ETFs ex Funds of Funds and Feeder funds
UCITS ETF Investors Favour US Equities
64 2293442.1.1.GBL.INST
Cumulative Equity Flows Year To Date – Per Exposure
Sources: State Street Global Advisors Bloomberg Finance L.P. Data as of 10/31/2018. – Flows are for European Domiciled Exchange Traded Products
2,081 4,885
7,124 8,663 9,278
12,334 15,249
17,405 20,341
22,515
3,653
1,177
2,222
2,829
8,852
9,783
9,965
10,964
12,957 9,585
2,084 3,408
5,166
6,153
5,356
3,469
2,583
2,554
2,883 2,963
-282 -211 -149
523
819
1,445
1,505
1,507
1,685 1,745
1,522
2,885
2,327
1,804
1,525
-140 -629 -1,049 -1,463 -1,170
4,689
8,758
6,222 1,164
-2,775 -4,498 -4,259 -3,414 -2,509
-1,794
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
US Equity Global Equity EM Equity UK Equity Japan Equity Europe Equity
Fixed Income
2308596.1.1.EMEA.INST 65
Use this title slide for
presentations that have
themes of Skill, Strategy,
Advice, Precision,
Planning.
66 • 2308596.1.1.EMEA.INST
Source: State Street Global Markets, as of 28 September 2018. *As at quarter end. Past performance is not a guarantee of future results.
2308596.1.1.EMEA.INST 67
What Do Circa 10trn$ of Fixed Assets Tell Us?
US Treasuries: still very OW duration
• Overall weak flows
• Duration shift
- buying the belly back
- selling the long end
Euro Sovereigns: UW overall
• Duration barbell:
- buying the belly back
- selling the long end
Europe positioning
UW Italy and little flows despite volatility
Gilts buying: a hedge against no-deal Brexit
Strong OAT buying
Credit
EM Selling
US IG&HY buying
Fixed Income Flows
Source: State Street Global Markets, as of 28 September 2018.
2308596.1.1.EMEA.INST
68
A challenging Fixed Income environment leads to weaker flows overall. Emerging Market
Debt weak.
Few right spots to highlight:
• US Corporate demand
• Treasuries holding up
• Gilts surprisingly see flows despite firm inflation data
Source: State Street Global Markets, as of 28 September 2018.
2308596.1.1.EMEA.INST 69
US Fixed Income Flow Focus
US Fixed Income
• TIPS a sell – check inflation
• High Yield gradually back
US Duration
• Short duration is the trade…
• Belly repositioning
Inflation: PriceStats®
Source: State Street Global Markets, as of 28 September 2018.
2308596.1.1.EMEA.INST
70
Inflation
US was bound to disappoint
Eurozone: steady as she goes
Emerging Markets: parabolic!
- weaker currency passthrough
- watch potential tightening of policy
What About EM Debt More Broadly?
2308596.1.1.EMEA.INST 71
(30.00)
(20.00)
(10.00)
0.00
10.00
20.00
30.00
40.00
Ma
r-0
7
Jul-0
7
No
v-0
7
Ma
r-0
8
Jul-0
8
No
v-0
8
Ma
r-0
9
Jul-0
9
No
v-0
9
Ma
r-1
0
Jul-1
0
No
v-1
0
Ma
r-1
1
Jul-1
1
No
v-1
1
Ma
r-1
2
Jul-1
2
No
v-1
2
Ma
r-1
3
Jul-1
3
No
v-1
3
Ma
r-1
4
Jul-1
4
No
v-1
4
Ma
r-1
5
Jul-1
5
No
v-1
5
Ma
r-1
6
Jul-1
6
No
v-1
6
Ma
r-1
7
Jul-1
7
No
v-1
7
Ma
r-1
8
Jul-1
8
$ B
illio
ns
EM FI Non Index EM FI Index OE fund EM FI Index ETF
Emerging Market Equity Fund Flows – 3 months cumulative flows
Sources: State Street Global Advisors Morningstar. Data as of 10/1/2018. – Flows are for Worldwide Open End funds, Money market and ETFs ex Funds of Funds and Feeder funds
Treasuries Flow Return
Sources: State Street Global Advisors Bloomberg Finance L.P. Data as of 10/31/2018. Flows are for European Domiciled Exchange Traded Products. Past performance is not a guarantee
of future results.
2308596.1.1.EMEA.INST 72
877 1,719
2,391 2,738 2,712 3,570 3,931 3,952 4,412
5,065
-825
505
1,720
3,079 2,683
2,982
3,836 4,059 3,362
4,007
1,086
1,348
836
620 257
346
1,041 857 1,768
1,890
63
296
443
381
602
878
1,072 1,212
1,298
1,322
-376 -1352
-2518 -2569
-2427 -2410 -1600 -2003
-1512 -2694
-6,000
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
US Treasury Euro Treasury EM Debt Global Fixed Income Other Fixed Income
US IG Corporate UK Fixed Income US High Yield Euro Corporate
SPDR Implementation*
73 * This is the view of State Street Global Advisors 2293442.1.1.GBL.INST
• Risk On For Equities: US Equities In Quality and Low Volatility for Euro Equities
• Mind the Rate Gap: Low Duration Exposures, Convertible Bonds, Value in Emerging Markets
• Diverging Growth Engines: China & EM? DM without EM?
What Type of Exposures Do We Look At? *
74 * This is the view of State Street Global Advisors 2293442.1.1.GBL.INST
Equities Rationale
Broad Index US Equities Broad Beta Overweight Play
Dividend US Equities with a Quality Tilt Through Dividend Stability & Growth
Low Volatility For Eurozone – Continued political risk, index does well relative to
broad beta in most periods
Value US Value focusing on factor extraction benefits from gradual rising rates
and economy still running positively
Fixed Income Rationale
Short Dated Bonds Lower interest rate sensitivity, protection in EUR and GBP, risk trade off
in USD – Focusing on Investment Grade
Convertibles Equity appreciation, lower interest rate sensitivity, higher quality than
high yield
Emerging Market Debt Local Currency for Relative valuation attractiveness, real yield
US Domiciled ETFs Value Flows
Flows Momentum Is Turning For Value
Source: State Street Global Advisors , Bloomberg Finance L.P. - as of 16 October 2018
75
In Millions October Year to Date Trailing Three
Months Trailing Twelve
Months Current AUM in
US$ mn
Broad Market 730 18,379 5,987 24,770 212,187
Large-Cap -2,909 31,084 22,587 65,855 1,055,646
Mid-Cap -2,012 7,603 2,983 12,055 178,346
Small-Cap -2,549 19,144 4,598 23,523 203,234
Growth -5,928 22,216 -1,308 31,410 357,536
Value 628 12,049 6,731 18,723 197,753
2308596.1.1.EMEA.INST
Dividend & Rates
Correlation of Equity Indices and Treasury Rate Changes – A Non-Linear Relationship
Source: State Street Global Advisors , Bloomberg Finance L.P. As of May 2018 – Daily observations since January 1962. Past perfomance is not a guarantee of future returns.
2308596.1.1.EMEA.INST 76
-1.00
-0.80
-0.60
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
1 M
on
th C
orr
ela
tio
n o
f E
qu
itie
s v
ers
us
Tre
asu
ries c
han
ges
10 Year US Treasury Yields
Average Correlation + 0.5 stdev (S&P 500) Average Correlation - 0.5 Stdev (S&P 500)Average Correlation (S&P 500) MaxMin Average (S&P HY Dividend Arist)
Convertible Bonds & Rising Rates
2308596.1.1.EMEA.INST 77
Historical performance during periods when 10yr US Treasury yield changes by 100 bps or more (%)
0
1
2
3
4
5
6
-50%
0%
50%
100%
150%
200%
250%
10yr
US
Tre
asu
ry Y
ield
Cu
mu
lati
ve In
dex P
erf
orm
an
ce
Thomson Reuters Qualified Global Convertible Index Bloomberg Barclays Global Corporate Index
MSCI ACWI Net Return index US 10 year Treasury Yield (RHS in %)
Source: State Street Global Advisors , Bloomberg Finance L.P. Data as of 30 September 2018. Past performance is not a guarantee of future results. Index returns reflect capital gains
and losses, income, and the reinvestment of dividends.
Global Demographics &
Investment Implications:
Focus on Switzerland Amlan Roy, PhD
Senior Managing Director, Global Chief Retirement Strategist
Swiss GMO Road Show
13–14 November 2018 For details of team members, please see contacts page at the back.
Research materials used for SSGA Institutional Client use only and is not intended for public dissemination.
All the information contained in this presentation is as of date indicated unless otherwise noted.
78
Research Materials for Client Discussions Only
2306674.1.1.APAC.INST
Demographics: A Different Perspective
Unless otherwise stated, all data and all data sourced to “UN” is the most current data attributable to the United Nations Population Division.
Data shown beyond 2015 is a UN projection. Red outline of boxed indicate content covered in this presentation.
2306674.1.1.APAC.INST 79
WHAT IT CONNECTS TO & INFLUENCES
D: Discount rates, Debt
E: Economic Growth, Efficiency, Structure
M: Mortality
O: Organisation Behaviour, Structure
G: Geography, Geopolitics, Governance
R: Robotics, Real Estate
A: Asset Prices, Asset Allocation
P: People, Pensions, Politics
H: Heterogeneity, Households
I: Inflation, Inequality, Institutions
C: Consumers, Culture, Cities
S: Sustainability
WHO DOES IT PERTAIN TO?
All the “People” in the world and
their characteristics as “consumers
and workers” in the world.
It affects all Income Statements
& Balance sheets in the world for
• Individuals
• Households
• Corporates
• Nations
The World’s Super-old (80+) Age Group
Fastest Growing
Source: UN, SSGA Demographics
2306674.1.1.APAC.INST 80
400.0 200.0 0.0 200.0 400.0
0-45-9
10-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-79
80+
Population (millions)
Years
1985
Male
Female
400.0 200.0 0.0 200.0 400.0
0-4
5-9
10-1415-19
20-24
25-2930-34
35-39
40-44
45-4950-54
55-59
60-64
65-6970-74
75-79
80+
Population (millions)
Years
2015
Male
Female
44.3 126
Total: 4,873M Total: 7,383M + 51%
+ 184 %
Source: UN, SSGA Demographics
2306674.1.1.APAC.INST 81
Total Population
(millions) Share of 80+ (%) Share of 60+ (%)
1985 2017 1985 2017 1985 2017
World 4,874 7,550 0.9 1.8 8.8 12.7
Europe 708 742 2.4 5.0 16.9 24.7
France 55 65 3.2 6.2 18.2 25.7
Germany 78 82 3.2 6.3 19.9 28.0
Ireland 4 5 2.0 3.1 14.5 19.1
Italy 57 59 2.6 7.1 18.7 29.4
Switzerland 6 8 3.1 5.1 19.0 24.1
United Kingdom 56 66 3.1 5.1 20.8 23.9
Total Population, Share of 80+ and 60+ Age
Groups
Core Demographics: Developed Countries
Source: UN, SSGA Demographics
2306674.1.1.APAC.INST 82
33.7 34.2
38.1
47.8
30.1
25.7
29.0
14.0
19.0
24.0
29.0
34.0
39.0
44.0
49.0
54.0
1985 2020
Annual Population Growth Old Age Dependency Ratio
Nu
mb
er
of
65
+ p
er
10
0 a
ged
15
–64
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
1.20
%p
.a.
1985-1990 2015-2020
Population Change Decomposition
Source: UN, SSGA Demographics
2306674.1.1.APAC.INST 83
France UK
Germany Switzerland
-2,000-1,000
01,0002,0003,0004,000
Net population Change Net migration
In t
ho
usa
nd
s
in t
ho
usa
nd
s
-2,000
-1,000
0
1,000
2,000
3,000
4,000
Net population Change Net migration
0500
1,0001,5002,0002,5003,000
Net population Change Net migration
In t
ho
us
an
ds
-200-100
0100200300400500600
In t
ho
usa
nd
s
Net population Change Net migration
Migration Trends: Top Immigrant Sources
by Country
Source: OECD, SSGA Demographics
2306674.1.1.APAC.INST 84
France UK
Germany Switzerland
in t
ho
usan
ds
In t
ho
usa
nd
s
in t
ho
usa
nd
s
In t
ho
usa
nd
s
222.3 179.5 160.7
83.0 75.8
0
50
100
150
200
250
2006 2016
21.3 18.4
13.9 12.4 11.6
0
10
20
30
40
Algeria Morocco Italy Portugal UnitedKingdom
2006 2016
20.9 18.1
13.8 10.1
5.8
0
5
10
15
20
25
30
Germany Italy France Portugal Spain
2006 2016
55.0
35.0 35.0 29.0 26.0
0
20
40
60
80
Romania China India Poland Italy
2006 2016
Labour Force Participation Rate by Age
Source: ILO, SSGA Demographics
2306674.1.1.APAC.INST 85
Switzerland Germany
67
95 97 95
80
16
68
87 83 84
66
8 0
10
20
30
40
50
60
70
80
90
100
15-24 25-34 35-44 45-54 55-64 65+
%
Age group (years)
MLFP 1990 MLFP 2015
FLFP 1990 FLFP 2015
51
90 95 93
76
9
47
80 83 85
64
4 0
10
20
30
40
50
60
70
80
90
100
15-24 25-34 35-44 45-54 55-64 65+
%
Age group (years)
MLFP 1990 MLFP 2015
FLFP 1990 FLFP 2015
Gender Differences: Participation & Income
Source: ILO, UN, SSGA Demographics
2306674.1.1.APAC.INST 86
Gender Labour Participation Differences Male GNI pc to female GNI pc 2015 in
2011 PPP
Ra
tio
(%)
51
55
39
50
57 56
62 61
66
58
71 68 68
74
35
40
45
50
55
60
65
70
75
80
FLFP MLFP
1.4
1.5
2.0 2.0
1.9
1.5
1.4
1.2
1.4
1.6
1.8
2.0
2.2
86
Age-Specific Fertility Rates
Source: UN, SSGA Demographics
2306674.1.1.APAC.INST 87
Germany
Switzerland
Bir
ths p
er
1000 w
om
en
Bir
ths p
er
1000 w
om
en
0
20
40
60
80
100
120
15-19 20-24 25-29 30-34 35-39 40-44 45-49
1985-1990 2015-2020
0
20
40
60
80
100
120
140
15-19 20-24 25-29 30-34 35-39 40-44 45-49
1985-1990 2015-2020
The Demographic Manifesto (2000)
2306674.1.1.APAC.INST 88
• Abolish Mandatory retirement ages. Adopt Flexible retirement.
• Close gender gaps to better utilise female work potential
• Rethink & implement immigration policies
• Outsource and off-shore non-core jobs based on costs and benefits
Radical Policy Actions to mitigate the Ageing Time Bomb
Retirement Ages: Effective & Official (2016)
Source: OECD, SSGA Demographics
2306674.1.1.APAC.INST 89
* Red Cells: Effective retirement age > Official retirement age
Retirement Age (Years) Men Women
Effective Official Effective Official
Korea 72.0 61.0 72.2 61.0
Mexico 71.6 65.0 67.5 65.0
Turkey 66.1 60.0 66.3 58.0
Japan 70.2 65.0 68.8 65.0
New Zealand 68.4 65.0 66.4 65.0
Switzerland 66.0 65.0 64.3 64.0
United States 66.8 66.0 65.4 66.0
United Kingdom 64.6 65.0 63.2 63.0
Italy 62.1 66.6 61.3 65.6
Netherlands 63.5 65.5 62.3 65.5
France 60.0 61.6 60.3 61.6
Germany 63.3 65.0 63.2 65.0
Demographics, Savings & Current Account
Source: Eurostat, SSGA Demographics
2306674.1.1.APAC.INST 90
-2
-1
0
1
2
3
4
5
0
5
10
15
20
25
30
35
40
1980 1985 1990 1995 2000 2005 2010 2015
% o
f G
DP
Current account balance (RHS) Total investment (LHS) Gross national savings (LHS)
Japan
-7
-6
-5
-4
-3
-2
-1
0
1
0
5
10
15
20
25
30
1980 1985 1990 1995 2000 2005 2010 2015
% o
f G
DP
US
From National Income Identity: S = I + CA + (G – T)
S = Private Saving, I = Investment, G = Government Expenditure, CA = X – M = Net Exports, T=Taxes
We find statistically strong links between demographic variables &
aggregate savings, investment & current account balance
Top 5 Trade Partners & GDP Structure in 2016
Source: World Bank, SSGA Demographics
2306674.1.1.APAC.INST 91
UK: Trade partners and shares Import Partner Import Partner Share (%) Export Partner Export Partner Share (%)
Germany 13.8 US 15.0
China 9.4 Germany 10.6
US 9.0 France 6.4
Netherlands 7.5 Netherlands 6.2
France 5.7 Ireland 5.6
Germany: Trade partners and shares Import Partner Import Partner Share (%) Export Partner Export Partner Share (%)
China 9.9 United States 8.9
Netherlands 8.7 France 8.3
France 6.9 United Kingdom 7.0
United States 6.2 Netherlands 6.5
Italy 5.4 China 6.4
Switzerland: Trade partners and shares Import Partner Import Partner Share (%) Export Partner Export Partner Share (%)
Germany 14.3 Germany 19.3
United States 12.1 United States 8.9
United Kingdom 10.7 Italy 7.4
China 9.0 United Kingdom 7.1
Hong Kong, China 6.1 United Arab Emirates 6.2
Openness (exports + imports) as a ratio of GDP: 114% (Switzerland), 84% (Germany), 58% (UK)
Demographic Components of GDP Growth
2306674.1.1.APAC.INST 92
2.5
1.3 0.4
2.8
1.1 1.2 1.8
0.9 0.9
2.4 1.6
1.9
2.0
0.9 1.8
2.1
1.2 1.1
-1.5
-0.5
0.5
1.5
2.5
3.5
1991-00 2001-10 2011-17 1991-00 2001-10 2011-17 1991-00 2001-10 2011-17
UK Germany France
Ave
rag
e a
nn
ual g
row
th r
ate
(%
)
Labour productivity growth Labour utilization growth Working age population growth
Working-age
Population Growth working-age population =
population aged 15–64
Labour Productivity
Growth labour productivity = real GDP/
hours worked
Labour Utilisation
Growth labour utilisation = hours
worked/working-age population
• G6 GDP growth rate has fallen dramatically
• Main cause is declining labour productivity growth. Similar across the developed & developing world.
Real GDP growth
Real GDP Growth Contributions
Source: GGDC, UN, SSGA Demographics.
Real GDP Growth: Germany & Switzerland
Source: UN, GGDC, SSGA Demographics
2306674.1.1.APAC.INST 93
Germany Switzerland
1.1
-5.7
4.0 3.6
0.5 0.5
1.9 1.7 1.9 2.1
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
% p
.a.
LPG LUG WAG Real GDP Growth
2.3
-2.1
2.9
1.8 1.0
1.8 2.0
0.8
1.3 1.2
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
LPG LUG WAG Real GDP Growth
GDP Growth & GDP Per Capita Growth
(1985–2017)
Source: IMF, SSGA Demographics
2306674.1.1.APAC.INST 94
Avera
ge A
nn
ual
Gro
wth
Rate
(%
)
1.3
1.5
1.7
0.9
1.7 1.8
2.2
1.7
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
France Germany UK Switzerland
GDP Per Capita Growth GDP Growth
Technology & Education
Source: World Bank, UNESCO, SSGA Demographics
2306674.1.1.APAC.INST 95
Data for UK refer to 2014. Others refer to 2015
Internet Users (% of population) Educational Attainment of the population
aged 25+
(%)
% o
f p
op
ula
tio
n a
ged
25+
0.8 1.6
9.2
45.8
80.1 76.2
0
10
20
30
40
50
60
70
80
90
World EuropeanUnion
US
1995 2016
52.6
62.2
50.5 53.0 60.0
30.3 25.4
32.4
42.3 36.8
0.0
20.0
40.0
60.0
80.0
100.0 Unknown
Tertiary
Post-secondarynon-tertiary
Secondary
Primary
Incompleteprimary
No schooling
Consumers & Life Cycles: Multiple
Generations, Millennials
Source: Longer Lives, Changing Life Cycles: Exploring Consumer & Worker Implications, Credit Suisse (2011), UN, SSGA Demographics
2306674.1.1.APAC.INST 96
Increased
Socialisation
Early exposure
to Digital & TV
experiences
More Tech
Savvy
Multi-taskers
Increased years
in education
Delayed entry
into labour
market
Late marriage &
Delayed
parenthood
Frequent job
changes
Long distance
workers,
Remote workers
Increased use of
technology &
training
Increase in
Longevity
Increase in
wealth
Increase in
travel, leisure &
luxury
Growing number
of 80+
Coping with an
uncertain future
Long &
uncertain post
retirement
periods
0–5 Yrs 80+ Yrs 65–80 Yrs 25–65 Yrs 18–25 Yrs 5–18 Yrs
Share of Millennials, 2017 (% of total population): Born between 1981–1996.
(%) 23
20 20 18
21 20
17
22
27
World Europe Germany UK US SwitzerlandThe figures are calculated by interpolating population of different UN age groups
Unsustainable Fiscal Strains (Ageing Related)
Source: EC, Switzerland Federal Department of Finance, SSGA Demographics.
2306674.1.1.APAC.INST 97
• In most EU countries, age related expenditures
currently account for 20% + of GDP
• This is unsustainable currently and
in future without radical reform
• In Switzerland, expenditure for general
government sector increases from 17.3%
of GDP in 2013 to 20.8% in 2045.
• Roughly 45% of the increase, is due to
higher expenditure for healthcare and
long-term care
• Approximately 37% of additional burden
is due to additional expenditure for old-age,
survivors and disability insurance.
EU28, 2014, % of Total Benefits
Others 7.6%
Disability 7%
Survivors 5.5%
Family & Children 8.2%
Unemployment 4.9%
Sickness/Healthcare 28.1%
Old Age 38.7%
Sectors Demographically Advantaged
2306674.1.1.APAC.INST 98
Changing consumers and workers in a global and technologically advancing world. Not just people numbers, but groups and behaviours impact these sectors.
FINANCIAL SERVICES
INFRASTRUCTURE NATURAL RESOURCES LEISURE & LUXURY
EMERGING MARKETS PHARMA & BIOTECH
Demographics & Inflation
Deutsche Bank (2018), Long Term Asset Return Study, Figure 3, Jim Reid.
2306674.1.1.APAC.INST 99
Demographics, Monetary Policy & Interest
Rates
2306674.1.1.APAC.INST 100
Philip Turner (BIS, 2013) — Benign neglect of the long-term interest rate:
• Maturity risk reduction makes financial system more shock resilient. Extended period
of low long rates and high public debt creates financial stability risks.
• Policy frameworks should be reconsidered, with a view to clarifying the importance
of the long-term interest rate for monetary policy, financial stability and
government debt management
Stanley Fischer (Federal Reserve Board, 2016) on ‘The Low Level of Global Real
Interest Rates’:
• Aging population lowers equilibrium interest rate beyond effect on labor force and
trend growth
• Higher saving by near-retirement households could be pushing down longer-run
equilibrium federal funds rate relative to its level in the 1980s by 75 bps
Pension Indicators, 2016
Spurce: OECD, SSGA Demographics
2306674.1.1.APAC.INST 101
Gross pension replacement rate,
average male earners
Gross pension wealth, average
male earners
(%)
Mu
ltip
le o
f avera
ge e
an
ing
s
11.8
8.3
13.3
6.6
4.4
6.7
8.5
0
2
4
6
8
10
12
14
60.5
38.2
83.1
34.6
22.1
38.3 42.1
0
10
20
30
40
50
60
70
80
90
Health Expenditures
Source: OECD, SSGA Demographics
2306674.1.1.APAC.INST 102
Health Expenditures as % of GDP Health Expenditure per capita, USD PPP
(%)
US
D
8.7 9.5
6.7
9.1 7.7 8.5 7.9
2.3 1.7
2.2
1.7
2.0
8.8
4.5
0
5
10
15
20
Government/Compulsory Voluntary/Out-of-pocket
4,600
5,551
3,391
4,519 4,192
9,892
7,919
0
2,000
4,000
6,000
8,000
10,000
12,000
2000 2016
2001 2017
Equities
(%)
Bonds
(%)
Cash
(%)
Other
(%)
Equities
(%)
Bonds
(%)
Cash
(%)
Other
(%)
Australia 62 19 5 14 49 14 15 22
Canada 62 26 2 10 45 31 2 22
Japan 52 46 0 2 30 56 4 10
Netherlands 44 44 11 1 33 50 0 17
Switzerland 36 35 20 9 33 34 4 28
UK 67 18 5 10 47 35 2 16
US 65 28 2 5 50 21 2 28
Pension Fund Asset Allocation Trends:
2017 versus 2001
Source: Willis Towers Watson (2018)
* DC assets in Switzerland are cash balance plans and are excluded from the analysis.
2306674.1.1.APAC.INST 103
2001 2017
DC (%) DB (%) DC (%) DB (%)
Australia 83 17 87 13
Canada 3 97 5 95
Japan 0 100 4 96
Netherlands 2 98 6 94
UK 8 92 19 81
US 52 48 60 40
Total Assets
(USD Billion)
Assets/GDP
Ratio (%)
Australia 1,924 138.4
Canada 1,769 107.8
Japan 3,054 62.5
Netherlands 1,598 193.8
Switzerland 906 133.1
UK 3,111 121.3
US 25,411 131.2
DB — DC Asset Split (2017 versus 2001)* Asset size
Development, Governance, Corruption &
Gender Balance Indicators
Source: World Bank, WEF, UN, TI, SSGA Demographics.
2306674.1.1.APAC.INST 104
Countries
Human
Development
Index Score
(%)
Human
Development
Index Rank
Gender Gap
Index Score
(%)
Gender Gap
Index Rank
Corruption
Perception
Index Score
Corruption
Perception
Index Rank
Sustainability Percentile
Rank
Norway 94.9 1 83.0 2 85 6 1.17 91.4
Switzerland 93.9 2 75.5 21 86 5 1.32 95.7
Germany 92.6 4 77.8 12 81 10 0.76 71.0
Netherlands 92.4 7 73.7 32 83 8 0.89 77.6
Iceland 92.1 9 87.8 1 78 14 1.33 96.2
US 92.0 10 71.8 49 74 18 0.35 58.6
Canada 92.0 10 76.9 16 82 9 1.24 93.3
Sweden 91.3 14 81.6 5 88 4 0.98 82.4
UK 91.0 16 77.0 15 81 10 0.38 59.0
Japan 90.3 17 65.7 114 72 20 1.01 86.2
France 89.7 21 77.8 11 69 23 -0.06 44.3
Finland 89.5 23 82.3 3 89 3 0.96 81.0
Italy 88.7 26 69.2 82 47 60 0.35 58.1
Saudi Arabia 84.7 38 58.4 138 46 62 -0.50 28.6
UAE 84.0 42 64.9 120 66 24 0.44 61.0
Russia 80.4 49 69.6 71 29 131 -0.89 16.7
Turkey 76.7 71 62.5 131 41 75 -2.00 5.7
Mexico 76.2 77 69.2 81 30 123 -0.77 20.0
Brazil 75.4 79 68.4 90 40 79 -0.45 30.0
China 73.8 90 67.4 100 40 79 -0.52 27.1
India 62.4 131 66.9 108 40 79 -0.95 14.3
Switzerland: Regional Differences
Source: FSO, SSGA Demographcis
2306674.1.1.APAC.INST 105
Residents in 1000,
2016 GDP per capita
(Swiss francs), 2015 GDP growth (%),
2014–2015 Unemployment rate,
2017 Zurich 1,488 96,613 2.5 3.54 Bern 1,027 76,897 0.6 2.59 Lucerne 403 66,220 2.1 1.9 Uri 36 53,347 2.2 1.01 Schwyz 156 59,867 2.9 1.79 Obwalden 37 66,019 1.9 0.89 Nidwalden 43 70,259 1 1.12 Glarus 40 68,116 0.6 2.12
Zug 124 152,708 2.8 2.42
Fribourg 312 59,407 1.6 2.77 Solothurn 269 66,024 0.9 2.82
Basel-Stadt 193 168,891 1.2 3.76
Basel-Landschaft 286 68,730 0.8 2.91 Schaffhausen 81 86,478 2.9 3.22
Appenzell Ausserrhoden 55 56,527 1.1 1.77
Appenzell Innerrhoden 16 61,570 1.9 0.94
St. Gallen 503 72,479 0.9 2.37 Graubunden 198 71,240 -1 1.52 Aargau 663 61,689 -0.5 3.15 Thurgau 271 60,409 1.2 2.25 Ticino 354 82,479 0.4 3.38 Vaud 785 68,257 1.1 4.52 Valais 339 53,383 1.6 3.58 Neuchatel 179 87,582 4.4 5.6 Geneva 490 98,436 -0.9 5.28 Jura 73 63,477 -1 4.61
Conclusions
2306674.1.1.APAC.INST 106
Demographic change is about changing consumers and workers. Understanding
behaviour alongside economic factors is important. Macro fundamentals (growth,
inflation, public debt) & asset prices are affected by demographics.
People Flows, Capital Flows and Trade Flows are influenced by demographics.
Important to understand European Populism (Italy, Greece, Germany) and
BREXIT through the Demographic lens.
Multiple generations, Millennials, Baby-boomers and Gen-Yers are different than
they were 10-years ago. They need to invest according to their beliefs in
different ways.
Switzerland faces ageing and public debt concerns. Policy reforms in labour,
gender, health, education can help it navigate these future stresses while
maintaining its strong economic position.
Global Demographics & Retirement Research
2306674.1.1.APAC.INST 107
• Why Global Demographics Matter? (September 2017)
• Demographics Disruption: Why we need to save more and invest differently?
(September 2017)
• EM Pension Systems: A Cross-Country Analysis (October 2017)
• Global Demographics and Retirement Implications (April 2018)
• What Do US Tax Cuts Mean for Global Investors? (April 2018)
• Italy’s Demographics Underpins its Growth, Debt Stability & Politics
(June 2018)
Amlan Roy ([email protected]) Amy Le ([email protected])
https://www.ssga.com/global/en/our-insights/viewpoints/demographics-and-
retirement.html
SSGA Contacts
2306674.1.1.APAC.INST 108
Global Demographics/Retirement Research
Amlan Roy, PhD
Senior Managing Director
Global Chief Retirement Strategist
+44 203 395 6719
Amy Le
Investment Strategist
+ 44 203 395 6590
For additional information or any questions on the information covered in
today’s presentation, please contact
Annex
2304730.1.1.EMEA.INST
Biographies
Richard Lacaille
Rick Lacaille, Executive Vice President is Global
Chief Investment Officer (CIO) of State Street
Global Advisors and a member of the firm's
Executive Management Group. In his role as Chief
Investment Officer Rick has responsibility for all
investment management activity at State Street
Global Advisors, including research and trading.
Prior to his current role, Rick was Head of Global
Active Equities, and previously European CIO.
Before joining State Street Global Advisors in 2000,
he held a wide variety of posts in quantitative fund
management and research at Gartmore Investment
Management, including periods as Head of
Quantitative Research and Head of Structured
Equities.
Rick has a BSc (Hons) in Operational Research
from Lancaster University and MSc in Econometrics
from London Guildhall University.
Rick is a member of the FTSE Russell Policy
Advisory Board, the MSCI Editorial Advisory Board
and the Asset Management Committee of the
Investment Association. He is a regular writer and
broadcaster on investment issues and speaks
frequently at industry conferences.
2304964.1.1.EMEA.INST
Antoine Lesné
Antoine is a Vice President of State Street Global
Advisors and Head of SPDR ETF Strategy &
Research for EMEA. Antoine's responsibilities
include developing a strategy framework for the
existing SPDR ETF range to align it with financial
market developments and longer term economic
outlooks. This is delivered through research on
ETFs as well as market notes produced by the
strategy team supporting information and the
distribution of ETFs across EMEA. Prior to this role
Antoine was a Fixed Income Portfolio Strategist in
EMEA covering Europe and Global Fixed Income
beta strategies as well as Smart Beta for Credit
strategies.
Antoine joined SSGA in 2006 from Sungard Reech
where he was responsible for selling advanced
pricing and risk analytics to banks and asset
managers in France and the Netherlands, with a
focus on structured fixed income derivatives. Prior
to that he took part in a start-up which managed an
internet based Interest Rate Swaps interdealer
trading platform. He started his career at Societe
Generale Corporate and Investment Banking on the
Fixed Income & FX structured products sales desk.
Antoine has earned a Master's degree from the
French Business School, ESCEM, with a major in
Finance in 1998.
Biographies
Amlan Roy
Dr. Amlan Roy is the Global Chief Retirement Strategist
and Senior Managing Director at SSGA since April 2017.
He is an experienced Global Macro Researcher
specializing in Demographics & Pensions related to
Economics, Investments and Public Policy. He highlights
structural issues related to gender disparity, youth
unemployment, systemic risks due to policy interactions
with ALM & SAA. He is a Senior Research Associate at
LSE and Guest Finance Professor at LBS.
Prior to joining SSGA, he was Head of Global
Demographics & Pensions Research and Managing
Director at Credit Suisse having joined there in 1998. At
Credit Suisse, Amlan was a client facing Researcher
presenting to clients in 25+ countries and speaking at 60+
global conferences/events. In a prior role he developed
global risk and asset allocation models serving as an
international expert on Financial System Architecture.
His big-picture macro strategic research in Global
Demographics & Pensions is used by policy makers and
investors and draws on the fields of Macroeconomics,
Portfolio Theory, Behavioral Economics, Statistics,
Derivatives and Econometrics.
Prior to joining Credit Suisse, he spent over a decade in
academia with a distinguished teaching career in the US
and the UK. He was UK ESRC Research Fellow,
Ponders Fellow, a Boston University Doctoral Scholar
and a Government of India National Scholar. Amlan has a
PhD and an MA in Financial Economics from the
University of Iowa, an MBA from Indian Institute of
Management Ahmedabad and a BA Honours in
Economics from St. Stephen's College, University of
Delhi.
2306674.1.1.APAC.INST
Important Risk Disclosure
For use in EMEA. The information provided does
not constitute investment advice as such term is
defined under the Markets in Financial
Instruments Directive (2014/65/EU) and it should
not be relied on as such. It should not be
considered a solicitation to buy or an offer to sell
any investment. It does not take into account any
investor's or potential investor’s particular
investment objectives, strategies, tax status, risk
appetite or investment horizon. If you require
investment advice you should consult your tax and
financial or other professional advisor. All material
has been obtained from sources believed to be
reliable. There is no representation or warranty as
to the accuracy of the information and State Street
shall have no liability for decisions based on such
information.
This communication is directed at professional
clients (this includes eligible counterparties) who
are deemed both knowledgeable and experienced
in matters relating to investments. The products
and services to which this communication relates
are only available to such persons and persons of
any other description (including retail clients)
should not rely on this communication.
For use in Switzerland. The information provided
does not constitute investment advice as such
term is defined under applicable Swiss regulation
and it should not be relied on as such. All material
has been obtained from sources believed to be
reliable. There is no representation or warranty as
to the accuracy of the information and State Street
shall have no liability for decisions based on such
information. This communication is directed at
qualified investors (as defined by FINMA) who are
deemed both knowledgeable and experienced in
matters relating to investments. The products and
services to which this communication relates are
only available to such persons and persons of any
other description (including retail clients) should
not rely on this communication.
The information provided does not constitute
investment advice and it should not be relied on as
such. It should not be considered a solicitation to
buy or an offer to sell a security. It does not take
into account any investor's particular investment
objectives, strategies, tax status or investment
horizon. You should consult your tax and financial
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sources believed to be reliable. There is no
representation or warranty as to the accuracy of
the information and State Street shall have no
liability for decisions based on such information.
The views expressed in this material are the views
of State Street Global Advisors through the period
November 7, 2018 and are subject to change
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Unless otherwise noted, the opinions expressed are those of the author who is a researcher at State Street. Views and opinions are subject to change at any time
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Equity securities may fluctuate in value in response to the activities of individual companies and general market and economic conditions.
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risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed
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