Overweight US Energy Infrastructure Master pursue a US-centric policy toward China. Risks are Limited Partnerships (MLPs): We initiated a exacerbated by the leadership’s lack of experience direct allocation to energy MLPs in late January in handling financial market volatility, as evidenced 2016 and have maintained that tilt. Given our by China’s policy response to its equity market assumptions about oil prices, we believe that the collapse in June 2015 and its approach to shifting cash distributions from MLPs are generally secure —_ the currency regime to a more flexible one in and provide a yield to investors of just over 7%. August 2015 and January 2016. We expect the In the absence of any valuation changes, the yield currency to depreciate about 7% in 2017; since translates into a high single-digit tax-advantaged 4% is already priced in the forward markets, we return. Any growth in cash flow distribution or expect a return of about 3%. There is considerable improvements in valuation relative to the S&P 500 scope for further upside from this tilt if China would provide some upside. abandons its current control of the currency, a move that could lead to depreciation in the Overweight Spanish Equities: We maintain an renminbi of about 20%. overweight to Spanish equities on a currency- hedged basis. This tactical tilt was introduced in Our tactical tilts are based on above-trend growth August 2013, and we have adjusted the size of of 2.3% in the US, global growth of 2.9%, the overweight about a dozen times since. Spanish — generally favorable monetary policy and more equities offer some of the cheapest valuations stimulative fiscal policy across developed and across the developed markets, attractive dividend emerging market countries. We expect returns to yields, expected earnings growth of 4.6%, aided be muted across asset classes, resulting in modest by healthy domestic growth, and a particularly returns in a diversified portfolio with a modest well-capitalized*>