CIO WM Global Investment Office For marketing purposes only External Version CIO monthly video www.ubs.com/cio-video For smartphone users: scan the code with an app like "scan" UBS CIO Monthly Extended July 2012 Published 29 June 2012 Please see important disclaimer and disclosures at the end of the document. The content of this publication reflects the view of UBS Wealth Management & Swiss Bank’s Chief Investment Office (CIO). The relative asset class preferences in this publication refer to an investment horizon of 6 months following the publication date – if not indicated differently – and will be updated on a monthly basis. The preferred investment themes have a time frame of either 3-12 months or >12 months since inception, as indicated. The information does not constitute UBS financial research and therefore may not reflect or be fully aligned with the views of UBS Research expressed in other publications. The statutory regulations regarding the independence of financial research are not applicable to this publication. Investments may be subject to jurisdictional and regulatory restrictions and may therefore not be available – please discuss the availability and appropriateness of specific investments with your client adviser. Table of Contents Section 1 Base slides 3 Section 2 Asset class views 12 2.A Equities 13 2.B Fixed income 23 2.C Foreign exchange 30 2.D NTAC: Commodities, Listed real estate, Hedge funds and Private equity 34 1 Section 1 Base slides Summary "With the global economy continuing to muddle through, we believe that US corporate bonds offer the best risk return." • Economy The successful formation of a Greek government after the June 17 elections has reduced the risk of an imminent Greek exit from the Eurozone. However, the Euro debt crisis persists, and further reform and consolidation efforts in Spain and Italy are needed. In the US, economic data weakened recently, but it remains in line with our forecast of moderate growth of around 2% i