Preferred themes e High quality dividend yields (sourced from existing European e Government bond alternatives (sourced from government bonds and UK equities) - ClO UW) High quality companies with geographically diversified business models Developed world government bonds offer a comparatively small cushion that pay sustainable dividends offer an attractive income stream in a against future interest rate hikes and many face increasing credit risk. We low yield world. Historically, dividends have made a substantial expect select bonds of supranational or national agencies, sub-national contribution to total returns, and we expect this to remain the case in governments, multinational corporates, and covered bonds to the current environment. outperform government bonds. We recommend switching out of . . government bonds into these alternatives. e Western winners from emerging market growth (sourced from existing equity holdings) e US high yield corporate bonds (sourced from government bonds - Emerging economies continue to grow faster than developed ClO UW) economies. With little need to deleverage and repair balance sheets, Positive economic growth, robust corporate earnings and healthy eslan SESH OMICS ate also well positioned te SeNTINUE i Gulpace their balance sheets provide support to US high yield corporate bonds. Current Wiestern Pets in the years ahead. We have identified COMipanies from a yield spreads of roughly 660 basis points still price in a much more dire variety of sectors in EUROPE, the Us and Japan waiinicla have significant economic outcome than we expect. Historically, US high yield bonds have Exposure to the rapidly growing emerging regions. WE RELIEVE 8 delivered similar returns to US equities with lower volatility. We continue diversified portfolio of these companies will reward investors seeking to believe that US high yield corporate bonds represent a more favorable to profit from the robust demand growth in emerging economies. risk/return pote