Dear investors,

Please find below our latest edition of the Investment Committee Update as of 18.11.2019.

In a nutshell:

• Looking to 2020, we expect subdued rates of growth in most economies, but take some comfort from early signs that important downside risks –notably the trade war and Brexit– are beginning to abate
• Crucially, we have been concerned about ongoing trade tensions, which have weighed heavily on the world economy since last year. We now note that the possibility of a US-China deal is a potentially material development, even though still far from certain
• There is a significant difference between a "truce" scenario, which would improve trade dynamics only marginally and leave much uncertainty, and that of a viable deal that removes threats of future measures and even rolls back existing tariffs, thereby reducing uncertainty and improving confidence
• We stay prudent in our asset allocation, but adjust our risk exposure slightly higher to reflect the recent positive developments on both market and macro fronts. We move our position in emerging market equities from underweight to neutral, and increase the global high-yield allocation to overweight. We keep our underweight in global small cap equities and our overweight in gold.

Best regards,

Investment Committee