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Opportunities Created by the Global Power Shift:

Investing in the Next Decade

3

When the real estate bubble burst in the U.S., unleashing the largest economic crisis since the Great Depression of the 1930s, it brought with it far-reaching consequences for the financial markets and, in turn, for investors. The turmoil reinforced the trend towards lower interest rates which began following the high-inflation 1970s, with credit in the industrialized countries now available at vir-tually zero interest and attractive yields on government bonds a thing of the past.

“Currently one-third of global

economic output is generated in

emerging markets.”

If interest rates start to rise in the coming years, as we expect them to, returns may even turn negative. With this in mind, investors with balanced portfolios need to take urgent action: on the one hand by reducing their bond component, and on the other by diversifying their port-folios through emerging market bonds. The picture is sim-ilar for equities: the increasing economic importance of the emerging economies – one third of global economic output is currently generated in this region – should be reflected in the composition of equity portfolios. Precious metals and commodities have also proved a safe haven in the current crisis, affording protection against the weak and volatile equity markets and rising fears of inflation, and remain attractive in the long term.

Foreword

The study is structured as follows:

Section 1 examines the global challenges facing investors in the coming decade.

Section 2 focuses on the new, increasing macroeconomic stability of most emerging markets.

Section 3 outlines three suggestions for a portfolio restructuring and the impact this will have on risk/return characteristics.

Section 4 summarizes the findings.

Dr Thomas Steinemann, Chief Strategist Vontobel Group

Dr Ralf Wiedenmann, Head of Economic Research

Oliver Russbuelt, Senior Investment Strategist

March 2011

4

The financial crisis of the past three years, which was triggered by the exorbitant debts incurred by U.S. home-owners, showed us just how vulnerable the industria li zed nations are. In essence, the crisis exacerbated and acce l-erated some longstanding global trends. These can be described as follows:

Shift in the global balance of powerThe key developed countries are stagnating, while the emerging economies are experiencing a dramatic phase of growth. Following the slew of crises in Asia and Latin America in the 1990s, several countries in these regions have stabilized on both a macroeconomic and – in many cases – a political level. Numerous dictatorships, espe -cially in Asia, had to yield to democratically elected gov-ernments, as exemplified by the case of Indonesia. A stable economy and a minimum of political freedom are important prerequisites for a sustainable economic up-swing – something which has become particularly appar-ent over the last ten years. At the start of the 1990s, emerging markets accounted for only 20 % of global eco-nomic output, compared to as much as one third today. And this is only the beginning: in 20 years’ time, accord-ing to U. S. estimates, this figure could be almost one half. Although the share of the emerging economies in global equity market capitalisation is already 13 %, this is by no means a true reflection of their economic clout.

Other factors that speak in favour of the emerging coun-tries are their significantly healthier public finances 1 and, above all, demographic developments. Chart 1.1 shows

Section 1: Global challenges for investors in the coming decade

the proportion of pensioners in the total population for deve l oping and emerging countries in the past, present and future.

For every percentage point by which the share of over-65-year-olds in a society grows, government debt rela-tive to gross domestic product increases by approxi-mately seven percentage points 2. This is due to what is known as “implicit government debt”, which essentially arises from future pension payments. What is especially disturbing about this form of debt is that it is not yet even visible. Beginning around 2020, however, it will place a major drain on government bud gets in the West, as the University of Freiburg discovered in their compre-

1 See the Vontobel study “From the Financial to the Debt Crisis” of March 2010

2 Neue Zürcher Zeitung 4 September 2010

35%

30%

25%

20%

15%

10%

5%

0%1950 1975 2009 2025 2050

Developed World Emerging Markets

Share of people over 65 in the total population

11.7%

6.4%

15.5%

6.1%

21.4%

8.5%

27.4%

12.5%

32.6%

20.2%

Source: United Nations

Chart 1.1: Ageing of society more pronounced in industrialized

nations than in emerging markets

Source: Working paper of the Research Center for Generational Contracts, University of Freiburg, Germany

Chart 1.2: Implicit government debt of selected European countries

Government employer pension scheme Social security pension scheme

% of GDP

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

AT BG CZ DE ES FI FR GR HU IT LT LV MT NL PL PT SE SK UK

5

hensive study. Chart 1.2 illustrates the estimated implicit government debt of the main European countries. These “invisible” government debts amount to between 200 % and 350 % of GDP and need to be added to existing “visible” debts.

In emerging countries, by contrast, such burdens resulting from pension and social commitments are not an issue, since demographic trends there are more favourable. With this in mind, investors should try to take advantage of the positive aspects of emerging market developments through an appropriate selection of equities and bonds.

Decline in inflation and interest rates since the 1980sAfter the inflationary 1970s, central banks started tigh t-ening monetary policy, dampening inflation expectations and triggering a sustained decline in inflation rates and bond yields. This trend was fuelled by high productivity growth, not least thanks to increasing globalization (see chart 1.3).

Interest rates may have bottomed out and should trend higher again in the coming years. This means that future bond yields will in all likelihood drop below the levels seen in the past 30 years. In view of the large share of govern-ment bonds in many portfolios, we think the time is right to change the mix.

Exchange rate volatility speaks in favour of safe- haven currencies – as well as those from the emerging economiesThe currency problems facing the euro zone are nothing new, but little has been done to eliminate them. The European Union still seems to lack the political will to take the necessary steps to solve the euro crisis – decisions which should have been made when the common curren-cy was first introduced. If the status quo persists, fur ther setbacks for the euro are inevitable. The outlook for the U. S. dollar is not much rosier: the printing presses are run-ning at full tilt due to the Fed’s exceptional monetary stabilization measures, known as quantitative easing. Fur-thermore, in December 2010 the U. S. government pro-mised a further economic stimulus package amounting to a staggering USD 800 billion, euphemistically referred to as a “budget compromise”. These circumstances under-mine the long-term strength of greenback and are prop-ping up the Swiss franc and the Japanese yen. The emerg-ing market currencies, meanwhile, are notching up impres- sive gains against the dollar and the euro and look set to keep pace with the Swiss franc in the medium term. Buoyed by solid growth and stable public finances, will these currencies be among the winners in the coming decades? This is a distinct possibility given the improved overall economic stability of these countries.

12

10

8

6

4

2

01960 20101990 200019801970

German 10Y Govt. Bond Yield Swiss 10Y Govt. Bond Yield

Yields on government bonds in Switzerland and Germany

Chart 1.3: The interest rate trough may have been reached

following a long decline

Source: Thomson Datastream

6

Section 2:New economic stability in the emerging markets

As recently as the 1990s, the emerging economies were going through one crisis after the other due to their un-sound economic policies, which placed little emphasis on stability (see chart 2.4). This resulted in high rates of inflation or even hyperinflation, currency volatility, and sky rocketing government and foreign debt. But the coun-tries learned their lessons from the crisis, and since 2000 the macroeconomic situation has markedly improved.

Inflation trending downwards in the medium termIn the past, many central banks chose to peg their curren-cies to the dollar to ensure price stability. This strategy worked at first, but over time had disastrous effects on their current account balances and public finances. Argentina, for example, went bankrupt in 2002 and had to abandon its currency peg to the dollar, causing the Argentine peso to plummet in value.

In the meantime, however, emerging countries have realized that inflation targets are the best means to fight inflation. In many instances, currency pegs have been replaced by a flexible regime. The central banks in these countries, like those in the industrialized nations, are attempting to control erratic price fluctuations through so-called managed floating. As chart 2.1 shows, inflation rates have declined dramatically in the emerging econo-mies in the last 15 years. Whereas inflation stood at almost 40 % in 1995, by 2010 it had fallen to 6.5 %.

Can we expect the emerging economies to keep their in-flation rates at similarly low levels in the future? We think they can, because the central banks of many emer ging economies have become independent and now use gen-erally recognized methods to manage their money supply and currencies. Questionable currency pegs are now a thing of the past. Over the last ten years, the monetary authorities of these countries have done a good job adher-ing to their inflation targets. The International Mone tary Fund (IMF) also forecasts that inflation in the emer ging economies will remain low over the next five years (see chart 2.1). However, there are currently concerns about rising inflation because of an increase in food and energy prices.

40

35

30

25

20

15

10

5

01995 2015201020052000

Developed markets Emerging markets

Annual inflation of the consumer price index

IMF forecast

Source: IMF, World Economic Outlook, October 2010

Chart 2.1: Inflation in the emerging economies is almost

on a par with that in the industrialized nations

7

Public finances in good shapeEmerging markets have made good progress in the area of public finances. Budget deficits relative to gross domes-tic product have been lower than those of industrialized nations over the past seven years. The emerging markets even managed to record a budget surplus between 2005 and 2007, which together with strong economic growth has helped to bring down the debt-to-GDP ratio. Public debt in the emerging markets fell from 54 % to 37 % of GDP between 2002 and 2010, while the industrialized nations saw that measure rise from 70 % to 96 % during the same period, with a further increase expected in the near term (see chart 2.2).

A major problem facing industrialized nations is the grow-ing share of pensioners in the total population. Without dramatic changes to these countries’ state pension and health systems, government debt will rise considerably in the coming decades (section 1). In the emerging markets, demographic trends are much more favourable, meaning that these countries will likely retain their edge in the area of public finances in the long term (see chart 1.1).

The emerging economies are breaking new ground in the way they finance their debt. Thanks to more mature domestic capital markets and relatively stable exchange rates, most of their government bonds (82 %) are deno-miated in local currencies and no longer in dollars. This is music to the ears of the countries’ finance minis ters, which avoid exchange rate risks when redeeming the bonds. The success of government bond issues in local currency also shows the high degree of trust the curren-cies enjoy on a domestic and an international level.

Ratings on the riseImproved public finances have called the rating agencies to action. In 2010, ratings upgrades for emerging econo-mies exceeded the number of downgrades by a factor of six. China and Taiwan, for example, have the second-best rating AA, while Chile, Estonia and Malaysia have an A (see chart 2.3). The opposite is true for the industriali- zed nations, a few of which were downgraded and none of which were upgraded between 2008 and 2010, with the trend towards lower ratings likely to persist in the coming years.

Declining foreign debtIn the past, many emerging countries have struggled with high current account deficits, which over the years have resulted in rising levels of foreign debt. Today, however, many post current account surpluses and are reducing their gross foreign debt. Some former net debtors have

120

100

80

60

40

202000 2012 20142008 20102002 2004 2006

Developed markets Emerging markets

Government debt in % of GDP

IMF forecast

Source: IMF, World Economic Outlook, October 2010

Chart 2.2: Government debt in the emerging markets is

trending downwards, while that in the industrialized nations

is on the rise

AA–

A+

A

A–

BBB+

BBB

BBB–

BB+

BB

BB–

B+ 2005

China Poland Brazil Turkey

Rating trends of selected emerging economies

201120102009200820072006

Source: S & P, Bloomberg

Chart 2.3: Emerging economies’ ratings on the rise

8

become net creditors, like Brazil in 2008, and some have used their foreign trade surpluses to build up sovereign wealth funds. Of the total global volume of these vehicles of almost USD 4,200 billion, USD 3,400 billion is attribut-able to the emerging economies. Chinese funds account for USD 831 billion, followed by Abu Dhabi (USD 689 bil-lion) and Saudi Arabia (USD 444 billion).

Currency stability on the riseIn the second half of the 1990s, emerging market curren-cies went through a series of crises. The Mexican peso, for example, lost two thirds of its value compared to the German mark during the so-called Tequila crisis from 1994 to 1995, while the Asia crisis saw the value of the Thai baht fall by 50 % versus the German currency (see chart 2.4).

Emerging market currencies have become significantly more stable since 2003 and have appreciated consider-ably against the euro. This is partly due to the countries’ newly-established currency reserves, especially in Asia, which serve as a buffer in the event that export revenues or capital imports collapse. The currency reserves of de-veloping countries have increased almost ten-fold from USD 659 billion to USD 5,933 billion since the beginning of 2000 (see chart 2.5).

Interest rates little changed since 2003Yields have moved sideways on balance since 2003. While interest rates are tending lower in Latin America, in Asia they are posting a slight rise (see chart 2.6).

12

11

10

9

8

7

6

5

4

320072006200520042003 2008 2009 2010

Asia Latin America Eastern Europe

Yields of government bonds issued by the emerging economiesin local currency

Source: JPMorgan Global Diversified Emerging Markets

Government Bond Index

Grafik 2.6: Government bonds issued by emerging economies

recovered quickly after the financial crisis

6,000

5,000

4,000

3,000

2,000

1,000

0

Emerging market currency reserves in USD bns

00 01 02 03 04 05 06 07 08 09 10

Source: IMF, Thomson Datastream

Grafik 2.5: Emerging market currency reserves have increased

dramatically

?

100

90

80

70

60

50

401994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

CHF / Emerging market Currencies EUR / Emerging market Currencies

Long-term trends in emerging market currencies

Tequila crisis(1994–95)

Asia crisis(1997)

Dot-comcrisis

Subprime &financial crisis

Euro crisis

Ruble crisis(1998)

Brazilian real crisis(1999)

South Africanrand crisis (1996)

Source: Thomson Datastream, Vontobel

Currency basket: MSCI EM Equity (until end of 2002); JPM GBI-EM Global Diversified (as of beginning of 2003)

Grafik 2.4: Emerging market currencies have become more stable since 2003. Are we about to enter an era

of the emerging market currencies?

9

In spite of the good economic conditions, risks still persist. The mass protests in various Arab countries are a fi tting reminder that the emerging markets have still a long way to go in terms of political stability. Some emerging mar-kets recently introduced checks on the movement of cap-

ital. At the end of 2010, for example, Brazil increasedthe tax rate on bonds in Brazilian real acquired by foreign investors to 6 %. Due to these economic policy risks, emerging market bonds will continue to have a yield pre-mium in the future.

How to invest in emerging market bonds Investments in emerging market bonds can be madevia bonds in local currency or in US dollars, primarily via so-called Brady bonds. Brady bonds were introduced in 1989 in an attempt to manage the Latin American debt crisis of the 1980s by providing a solid mechanism for the repayment of the foreign debt of the countries con-cerned. Backing these bonds with U. S. government paper guarantees the redemption of at least the princi-pal and in some cases also interest payments. This form of securitization revolutionized global trade in emerging market bonds. Improved macroeconomic stability cou-pled with increasing investor interest in the emerging markets enabled these countries to issue bonds in local currency for the fi rst time around the turn of the new millennium. Ever since, the local bond markets have de-veloped steadily. Bonds issued by the emerging coun -tries currently account for over 10 % of global outstand-ing volumes – a fi gure that is expected to rise to 30 %by 2030 and to over 40 % by 2050, according to Gold-man Sachs.

Investors can rely on various benchmarks to measurethe performance of emerging market bonds. JPMorgan Chase & Co. has been compiling reference indices for Brady bonds since 1993, and since 2002 has maintained an entire index family for local bonds, led by the widely- observed JPM Government Bond Emerging Market Global Diversifi ed Index. This index comprises exclusively emer-ging markets which, according to the World Bank, have belonged to the low/middle income category without interruption for at least two years and where there are no substantial hurdles to investment. The index is strongly diversifi ed on a regional basis – the weighting of each in -di vidual country may not exceed 10 % – and covers allof the world’s relevant emerging regions.

Source: JPM, Emerging Markets Bond Index Monitor, 31 January 2011

Chart B1: Regional breakdown of the JPM Government Bond Emerging Market Global Diversifi ed Index

Asia 29.3%

Eastern Europe 33.9%

Latin America 26.6%

Africa/Middle East 10.2%

Asia 29.3 %

Malaysia 10.0 %

Thailand 10.0 %

Indonesia 8.8 %

Philippines 0.5 %

Eastern Europe 33.9 %

Poland 10.0 %

Turkey 10.0 %

Hungary 7.5 %

Russia 6.4 %

Latin America 26.6 %

Brazil 10.0 %

Mexico 10.0 %

Columbia 4.5 %

Peru 2.0 %

Chile 0.1 %

Africa/Middle East 10.2 %

South Africa 10.0 %

Egypt 0.2 %

10

Section 3:Three steps to creating a balanced, future-oriented portfolio

An analysis of many investors’ strategic portfolio struc-tures reveals some interesting results: equities and bonds from emerging economies are underrepresented. In an average balanced private client portfolio, only around 5 % 3 of assets are invested in emerging economies. In the case of institutional investors, this quota is even lower. While most clients allow their asset managers to build up positions primarily in equity funds in the tactical asset allocation process, substantial, long-term emerging mar-ket holdings are still the exception. Another charac - te r is tic feature of today’s portfolios is their extremely large weighting of government bonds from industrialized nations, which frequently account for one half of a bal-anced portfolio.

How should investors take on the global challenges of the coming decade? Our solution is to broaden the scope of the risk buffer and return driver asset classes (chart B2) and also to slightly increase the weighting of return drivers within the portfolio.

Three measures can achieve this:1. Reduce the weighting of bonds in general while includ-

ing emerging markets bonds for diversification reasons.2. Diversify the equities part by increasing the emerging

markets stocks quota.3. Increase the share of liquid alternative investments by

building up positions in precious metals, commodities and real estate.

3 NZZ Anlagepanorama 11 October 2010 (average tactical asset allocation weighting of the eight participating private banks)4 Alternative investments generally comprise hedge funds, real estate, private equity and commodities. In an institutional context, real estate

is generally managed as an independent asset class.

Weighting of asset classes according to Bank VontobelIn the financial world, it has become common practice to distinguish key asset classes such as cash, bonds, equities and alternative investments 4. We, by contrast, specify asset classes according to the specific function assigned to them within a balanced portfolio. Each asset class has certain characteristics which prove useful in different market phases. For example, precious metals generally provide protection against crises and inflation, while equi-ty investments are directly coupled to a company’s fluc-tuating success. For clarity’s sake, we distinguish between two functions: risk buffers and return drivers. The aim of the risk buffer asset class is to exert a stabilizing effect on portfolios, especially in times of crisis. The aim of return driver asset class, meanwhile, is to generate opti-mum returns.

Cash 5%

Industrial country bonds 26%

Emerging country bonds 4%

Industrial country equities 36%

Emerging country equities 4%

Hedge funds 8%

Precious metals 5%

Real estate 6%

Commodities 6%

Risk buffers 45%

Yield drivers 55%

Source: Vontobel

Chart 3.1: Example structure of the new balanced portfolio

Chart B2: Functions of the various asset classes within

the context of a balanced portfolio

Risk buffers

Yield drivers

Cas

h

Cash X

Bon

ds Industrial country bonds X

Emerging country bonds X

Equi

ties

Industrial country equities X

Emerging country equities X

Investment theme equities X

Alt

erna

tive

in

vest

men

ts

Funds of hedge funds (UCITS) X

Precious metals X

Commodities X

International real estate X

Swiss real estate funds X

Source: Vontobel

11

On measure 2: On the equities front, we also advise to build up positions in the emerging markets. The region already generates one third of global economic output and that share is expected to continue to rise. Given the increased robustness of the emerging markets, eco- no mic fluctuations look set to diminish and returns should become more stable, as described in detail in section 2. Valuation discounts on equities as a premium for increased earnings volatility should disappear over time. Since these developments are not yet fully priced in, we see potential for equities in this region to outperform their peers over the coming years.

Relevance for institutional investorsThis study is based on portfolio structures for private clients. The relevant risk measures in chart 3.2 also refer to our new portfolio structures for private clients. Insti-tutional investors have a different set of considerations. Their benchmarks are geared towards the individual situation of a specific pension fund and the respective legal framework. Thus, the recommendations in this study do not directly apply to institutional investors. Nevertheless, they could use it as an occasion to rethink

existing benchmarks: Can the bond allocation be re - du ced in favour of alternative investments such as com-modities, precious metals and real estate? In the area of foreign-currency bonds, can emerging market bonds also be included in the benchmark? Should the bench-mark for foreign equities comprise emerging market stocks? The world has changed and will continue to change – both for private investors as well as for insti-tutional clients.

On measure 1: After declining steadily over the last 30 years, yields of government bonds issued by industria l-ized nations may now have finally bottomed out. The forecast slight rise in interest rates will likely result in low or even negative returns. Investors will demand higher credit risk premiums due to industrialized nations’ growing levels of government debt as well as higher in-flation premiums due to more expansive monetary poli-cies. The situation is different in the emerging econo mies, where increasing macroeconomic stability (section 2) will further improve these countries’ credit ratings and thus reduce risk premiums. Currency risk compensation also looks set to decrease, since we expect emerging market currencies to remain stable compared to the euro and the Swiss franc over the long term. With this in mind, we recommend reducing the proportion of government bonds while increasing diversification through emerging market bonds.

12

On measure 3: In the broad and extremely heterogeneous class of alternative investments, we favour liquid asset classes that offer attractive risk/returns. Precious metals and commodities have proved a risk buffer in the cur- rent crisis. The same applies to liquid hedge fund strat-egies which comply with European UCITS regulations. The real estate sector is benefiting from the global trends of a growing world population and increasing urbaniza-tion. In view of the current low interest rate environment, the sector also offers attractive dividends, stable cash flows and protection against inflation.

Why do we also recommend a slightly higher weighting of return drivers? Shifts within the risk buffer and return driver categories will have a positive impact on expected returns but this will only partly offset the anticipated decline in returns tied to slipping bond yields, in particular. It therefore seems prudent to slightly increase the pro-portion of return drivers in the portfolio. True, this will in-crease volatility. But it will also improve other risk meas-ures: the Sharpe ratio 5 will improve, the recovery period 6 will become shorter and the maximum drawdown 7 will remain constant.

The new portfolio structures have more attractive risk- adjusted returns and thus exceed the previous ones by far.

5 The Sharpe ratio represents the excess return (difference between investment return and risk-free return) of a portfolio relative to volatility. It thus shows the return of a portfolio independent of the risk entered into.

6 Longest period in months that investors would have to stay invested in order to achieve a positive return, if they invested at an unfavourable point in time.

7 Maximum loss that investors would sustain if they invested at an unfavourable point in time.

Chart 3.2: New portfolio structure improves risk/return characteristics (example of a balanced portfolio)

Source: Vontobel, Thomson Datastream

Calculation of returns based on index data of the past 15 years and the average expected return over the next five years;

risk and key measures with index data over the past 15 years.

Quelle: Vontobel, Thomson Datastream

Portfolio structure

New Old

Performance

p. a. 5.06 % 4.29 %

Risk

Volatility p. a. 9.01 % 7.94 %

Key figures

Max. drawdown 7 –30.33 % –29.81 %

Recovery period (in months) 6 42 52

Sharpe ratio 5 0.51 0.45

6.0%

5.5%

5.0%

4.5%

4.0%

3.5%

3.0%7.0% 10.0%9.0% 9.5%7.5% 8.0% 8.5%

Risk p.a.

Yie

ld p

.a.

Old portfolio structure(historical return)

Old portfolio structure(expected return)

New portfolio structure(expected return)

13

Section 4: Summary and conclusions for investors

The financial crisis essentially exacerbated and accelera -ted three longstanding global trends. Firstly, interest rates for government bonds from industrialized nations have fallen to record lows in the wake of the flight to quality. Secondly, the contribution made by emerging econ - o mies to global economic output has since reached 30 %, while their market capitalization accounts for only 13 % of the global equity market. And thirdly, the debt crisis is stoking currency turmoil in the large currency blocks of the U. S. and the euro zone, whereas the currencies of the emerging markets and the traditional safe-haven curren -cies – the franc and the yen – continue to stabilize.

“Emerging market bonds are a suitable

way of introducing an element of

diversification to the bond portion

of a portfolio.”

In view of the recovery of the global economy since 2009, interest rates are expected to rise over the coming years. For investors, this means that bond components of a bal-anced portfolio will likely post only small or even nega -tive returns. We therefore recommend reducing the bond component in favour of commodities, precious metals and real estate where possible. We also recommend an increased diversification in the area of fixed income, trad - itionally geared towards government bonds from indus-trialized countries. Emerging market bonds are a suitable way of introducing this element of diversification to the bond portion of a portfolio.

The measures recommended in this study relate to longer-term, strategic portfolio restructuring. It is well known that the financial markets are not a one-way street and will still be subject to setbacks and high volatility in the future. In addition to the basic considerations outlined here, pro-active, tactical decisions will continue to play a vital role for investment success.

DisclaimerAlthough Vontobel Group believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. This document is for information purposes only and nothing contained in this document should constitute a solicitation, or offer, or recommendation, to buy or sell any investment instruments, to effect any transactions, or to conclude any legal act of any kind whatsoever.This document has been produced by the organizational unit Asset Management of Bank Vontobel AG. It is explicitly not the result of a financial analysis and therefore the “Directives on the Independence of Financial Research” of the Swiss Bankers Association is not applicable. All estimates and opinions expressed in this brochure are the authors’ and reflect the estimates and opinions of Bank Vontobel. No part of this material may be reproduced or duplicated in any form, by any means, or redistributed, without acknowledgement of source and prior written consent from Bank Vontobel AG.

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