Exhibit 69: EM Equity Valuations Against this uncertain backdrop and Aggregate valuations are near neutral levels. considering today's uninspiring valuations (see NORTIaBY comBDSER SRO Exhibit 69), we remain tactically neutral on 4 o9 emerging market equities. That said, we continue 08 4 07 to explore relative investment opportunities that os ate exploit the significant domestic activity, external as aa, Oe vulnerability and valuation differences among a a1 on alll individual emerging countries. 0.0 | | ia 0.0 a —— Ls = PB 2 02 02 1 2017 Global Currency Outlook 04 2™ SESS 8 j%&§ 3 2 3 $ 8 = Inanotable departure from recent years, the e-° 2283 538 28 & = ~ = * USdollar did not enjoy unequivocal dominance SF = = = 3 an i « 3 in 2016 (see Exhibit 70). The yen, for example, ended a four-year slide against the greenback as Data as of December 31, 2016. ‘ ; 3 Note: Based on monthly data since 1994 for Price/Forward Earnings, Price/Book Value, Price/ the market questioned the BOJ s commitment Cash Flow, Price/Sales, Price/Earnings-to-Growth Ratio, Dividend Yield and Return on Equity. : i g, Numbers in parentheses denote the country’s weight in MSCI EM. Only showing countries with a to MIOUeLary casing. Certain CMeree market ae weight greater than 1%. currencies—such as the Russian ruble and Brazilian Source: Investment Strategy Group, Datastream, I/B/E/S, MSCI. real—also outperformed the dollar on the back of stronger commodity prices and favorable political developments at home. And while the dollar did On the other hand, a harsher US stance on trade make notable gains against the euro, pound and and foreign policy would hurt emerging market Mexican peso in particular, these currencies enter earnings, sentiment and valuation multiples. 2017 with a more balanced risk/reward profile China, Korea, Mexico and Taiwan—which as a result. account for about 60% of MSCI emerging market The upshot is that while tightening monetary capitalization and earnings—seem particularly policy