Mee real:ens rce. 1So tna PCUlt. knee/owleeriebeets Atlitnittt pimp:taloa: Porte,* High-conviction ideas Selected investment ideas to complement wealth-management clients' portfolios European automotive sector idea iretataa November 1, 2015 Refe;renCe IlleaW Martel i&oxx EUR Corporates Autometklesand Parts inci.ex vs cast? I III Investment horizon 6 12 months it Performance since initiation When we launched this idea, we cautioned that there could be several more uncertain months before the sector eventually stabilized. This has moved to be the case: Volkswagen's problems have deepened in recent weeks, with Increasing numbers of autos likely to be recalled. However, we believe that corporate investment-grade bonds in this sector appear to offer a lower-risk alternative to equities for investors with a longer-term horizon. Long U.S. dollar Wet initiated September 1, 2015 Reference measure "IlirtrrI'. n I - ll Investment horizon 3 - 12 months Performance since initiation 0 The Bloomberg Dollar Spot Index has been moving upwards since the middle of October, with the U.S. dollar gaining ground against both developed and emerging. market currencies. In part, this was the result of market expectations of further monetary stimulus from both the EC B and the BOJ. The strengthening of many emerging-market currencies in early October after major falls earlier in 2015 - also appears to have run out of steam. Global financials idea initiated July 1, 2015 Reference measure lLi,pioLworkk9 091 vo....ispiA1,3mi Lr11,,• Investment horizon 3 - 124 months Perionsiame since initiation Global financials are likely to gain from an upwards turn in the U.S. interest-rate cycle Rising dividends and share buybacks, as wallas valuations, are also likely to be positives. Possible negatives include the impact of banking- activity regulation although banks are taking action to offset such headwinds, for example t