e Equity styles UBS View Prefer value and large caps in Europe, mid caps in US RESIS lla ¢ We recommend that investors look for value opportunities in Europe: The cheapest stocks within each ° Within Europe, look for value sector are at extreme relative valuations, which should begin to normalize. Within Financials, however, opportunities within each sector, but be investors should limit their direct exposure to the Eurozone debt crisis. We assess the cheapness of a stock aware of the higher-risk Financials. by looking at its price-to-earnings and price-to-book ratios relative to its peers. * In the US, there are opportunities in value ¢ We believe US mid caps will outperform large caps. US economic data is forecast to stabilize and GDP Mares that also show strong growth. growth should be resilient in the second half of 2012. Greater domestic sales exposure reduces earnings ° Within Europe, avoid small caps and risk coming from Europe. In Europe, we prefer large over small caps in the current very challenging instead rotate into large caps. Sean SMC CnVirGnInene: e In the US, prefer mid caps to large caps ¢ High quality dividend paying stocks provide a real and stable income stream to investors during the while GDP growth is above 2%. current low yield environment. Furthermore, they give exposure to the long term potential of equity Strategic (1 to 2 years) markets while also providing some support in declining markets. . e We expect value strategies to outperform A Positive scenario Prefer value, low quality and small caps the market significantly over the long ¢ Leading indicators continue to move higher, and risks related to the Eurozone debt crisis subside. In this Fern. ; ; case, add deep cyclical value (cheap price/book, price/earnings) regardless of sector, with high beta and * Mid-cap stocks provide attractive high leverage. In such an environment, small- and mid-cap stocks should also perform well, but a dividend Spperturitics aver the lenger tert. strategy