stable value investment association conference -...
TRANSCRIPT
Stable Value Investment Association Conference Market Outlook for Fixed Income and Impact on Stable Value
Presented by: Michael Swell
Global Fixed Income & Liquidity Management April 2015
2
Summary of Our Views:
Macro Themes:
Global growth has improved and divergence has peaked with Europe reviving
Risks have increased surrounding China growth, Greek debt
Fed is on track to raise rates in 2015, will likely wait until September
Eurozone QE driving competitive policy easing
Japan growth improving but further easing likely
Source: GSAM As of February 2015. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Global Outlook
3
Global Backdrop US growth remains solid but momentum has slowed. Global growth and inflation remains soft overall and Greece is again a risk. Many central banks have eased policy in response.
Global Outlook
Source: Bloomberg. As of March 4, 2015.
Softer data in the US; Eurozone may have bottomed Headline inflation weak globally on lower oil prices
Source: Bloomberg. As of February 2015.
Source: Citigroup, Bloomberg, as of Feb. 18, 2015. Table does not include all countries that have eased in 2015. Other examples include Albania, Pakistan, Peru , Romania and Israel.
Many central banks have eased policy in early 2015
Source: ISM, Markit, Bloomberg. As of February 2015.
Greece is again a risk, but bailout extension buys time
Developed Markets Emerging Markets
Country Policy Change Country Policy Change
Australia 25 bps rate cut China Rate cut / RRR cut
Canada 25 bps rate cut Egypt 50 bps rate cut
Denmark Negative rate India 25 bps rate cut
Eurozone QE Indonesia 25 bps rate cut
Sweden Negative rate / QE Russia 200 bps rate cut
Switzerland Negative rate Turkey 50 bps rate cut
444648505254565860
'12 '13 '14 '15
Index Manufacturing PMI
EurozoneUS
Bailout Extension
0
500
1000
1500
2000
2500
3000
Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
Basis points Greece 5-Year CreditDefault Swap
-2
-1
0
1
2
3
4
2013 2014 2015
Headline CPI
US UKEurozone ChinaJapan Australia
YoY %
4
US Employment and Inflation Are Sending Mixed Signals With inflation below target, the Fed has been patient about raising rates despite strong job growth
Global Outlook
US non-farm payroll growth has been strong Inflation remains below the Fed’s 2% target
Source: Bloomberg. As of February 2015 Source: Bloomberg. As of January 2015
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
'12 '13 '14 '15
% yoy US Headline vs Core Inflation
CPI CPI excluding food and energy
-200
-100
0
100
200
300
400
500
600
'10 '11 '12 '13 '14 '15
000's Non-Farm Payroll Growth
Non-Farm Payrolls
3-Month Average
5
Lower Oil Prices Should Be Net Positive for the US Economy Energy sector investment is likely to fall but the impact on GDP is likely to be modest, while consumers should benefit from the sharp decline in gasoline prices.
Global Outlook
Energy investment likely slow, GDP impact may be modest Consumers will spend much less on gasoline…
Source: Bloomberg. As of Q4 2014 Source: Bloomberg, As of January 2015
0%
2%
4%
6%
8%
10%
12%
14%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
% of Total Business Investment% of GDP
Investment in Mining Equipment and Structures
…suggesting upside potential for consumer spending
Source: Bloomberg, Capital Economics. As of February 2015.
0
2
4
6
8
10
'10 '11 '12 '13 '14 '15
%yoy Retail Sales Ex-Autos Ex-Autos and Gasoline
180210240270300330360390420450
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
'08 '09 '10 '11 '12 '13 '14 '15
$, billions Price/gallon US Average Gasoline Price (left)Spending on Gasoline (right)
6
Fed is Focused on Wages to Gauge Slack and Inflation Outlook The Fed is focused on wage inflation as oil-related pressure on inflation is likely temporary. While wage growth remains subdued, leading indicators suggest wages could rise.
Global Outlook
Source: Bloomberg, GSAM. As of January 2015 Wage growth is calculated as the average of year-over-year percent change in average hourly earnings and the Employment Cost Index. Modeled wage growth is a weighted sum of the difference between U3 and U6 unemployment and the JOLTS quit rate.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
%yoy Leading Indicators Suggest Wages Set to Rise
Wage growth Modeled wage growth
7
External Weakness May Keep the Fed Patient for a Bit Longer US economic outperformance has driven the dollar higher, tightening financial conditions. While oil has helped to offset some of this tightening, global demand remains weak.
Global Outlook
Stronger dollar tightens US financial conditions Lower oil has helped to offset dollar strength
Source: Bloomberg. As of January 2015 Source: Bloomberg, As of December 2014.
60
70
80
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100
110
120
130
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
Index
US Dollar Index
99
100
101
102
103
'08 '09 '10 '11 '12 '13 '14 '15
Index US Financial ConditionsUS Financial Conditions including oil
Tighter Financial Conditions
Strong dollar, weak global demand weigh on US exports
Source: Bloomberg, Goldman Sachs. As of February 2015.
-30
-20
-10
0
10
20
30
'08 '09 '10 '11 '12 '13 '14
%yoy US Exports
8
2014 2015 2016 2017 Longer Term 0
1
2
3
4
5%
FOMC Member ProjectionsFOMC Median Projection - March 2015FOMC Median Projection - December 2014Market (Overnight Index Swaps)
Macro Themes
The Market May Still Be Underestimating Potential Rate Hikes Market-implied policy rates are below the Fed’s projections. If the Fed remains on track to raise rates in 2015, we believe US market rates may need to adjust higher.
Source: Bloomberg. As of March 18, 2015. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Market long-term estimate based on 30-year bond yield and five-year, five-year forward interest rate swaps.
2.6%
9
Eurozone Growth Improves, Germany Benefits from Weak Euro Eurozone growth has improved in recent months, with PMI data consistent with GDP growth near 1.5%. Germany has led the rebound, with exports benefiting from weak euro.
Global Outlook
PMI data consistent with Eurozone GDP growth near 1.5% Germany has led the recent growth rebound
Source: Bloomberg, Markit. As of February 2015 Source: Bloomberg. As of Q4 2014
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
30
35
40
45
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60
65
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
% yoy Index
Composite PMI (left) Real GDP (right)
-5
-4
-3
-2
-1
0
1
2
3
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
%qoq Real GDP
Germany France
10
Eurozone Countries Face Structural and Cyclical Challenges Elevated unemployment suggests the Eurozone economy still has significant slack outside of Germany. Progress on structural labor market reforms has been mixed.
Global Outlook
Source: OECD. As of Q3’14
High unemployment suggests significant slack Progress on structural labor reforms has been mixed
Source: Bloomberg. As of January 2015
France
Greece
Ireland
Italy
Spain
80
85
90
95
100
105
110
'10 '11 '12 '13 '14
2010=100 Unit Labor Costs
France Greece
Ireland Italy
Spain
0
5
10
15
20
25
30
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
% Unemployment
Spain Italy
France Germany
11 Global Outlook
ECB Pursuing Aggressive QE, but Inflation Expectations Weak The ECB’s quantitative easing (QE) announcement led to modest improvement in inflation expectations but structural challenges could keep Eurozone inflation low for a long time
Source: Bloomberg, GSAM. As of December 2014. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
0
5
10
15
20
25
30
35
40
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
% of GDP Central Bank Assets
European Central Bank
Federal Reserve
Estimates
ECB targeting significant balance sheet expansion Eurozone inflation expectations remain low
0.0
0.5
1.0
1.5
2.0
2.5
3.0
'11 '12 '13 '14 '15
% 5-Year 5-Year Forward Inflation Swap
5-Year 5-Year ForwardInflation Swap
12
Greek Bailout Extension Reduces Near-Term Euro Exit Risk The Feb. 20 agreement to extend the current Greek bailout agreement buys time, but leaves the issue of large Greek debt payments to ECB in July & August unresolved.
Global Outlook
Source: Morgan Stanley, Bloomberg, As of Feb. 23, 2015.
Greek spreads have been volatile amid debt negotiations Contagion to other European peripherals has been limited
Feb March April May June Aug July
Feb 28: Current bailout expires. Extension requires parliamentary approval in Austria, Estonia, Finland, Germany, Greece, Netherlands and Slovakia.
Feb 20: Finance ministers agree to 4-month bailout extension
June 30: 4-month extension expires
By End of April: Greece must fully specify reform measures. ECB, IMF and European Commission. Greek parliament must then approve.
July 20/Aug 20: €7 billion of Greek bonds held by ECB mature
Key Dates in Greek Debt Negotiations
0
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400
600
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1200
1400
1600
1800
Jun-14 Aug-14 Oct-14 Dec-14 Feb-15
Basis points Greece 5-year Spread to Germany
Source: Bloomberg, As of Feb. 23, 2015. Source: Bloomberg, As of Feb. 23, 2015.
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20
40
60
80
100
120
140
Jun-14 Aug-14 Oct-14 Dec-14 Feb-15
Basis points Spain and Italy 5-year Spreads to Germany
Italy Spain
13 Global Outlook
Japan Recovering From Tax Hike But Inflation Remains Low Japan is recovering from the April Consumption Tax hike and the next hike has been postponed from 2015 to 2017. Inflation is falling again with the decline in oil prices.
Consumption still recovering from April tax hike Inflation slowing again as oil prices decline
Source: Bloomberg, GSAM. As of Q4 2014 Source: Bloomberg. As of December 2014
Consumption Tax Hike
-6
-5
-4
-3
-2
-1
0
1
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'10 '11 '12 '13 '14
%qoq
Real GDP
Household Consumption GDP
-2
-1
0
1
2
3
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'10 '11 '12 '13 '14
%yoy
CPI
Excluding Tax Hike
BoJ Target
14 Global Outlook
Bank of Japan May Consider Additional Easing The BoJ may consider additional easing to maintain the credibility of its inflation target but the central bank now owns more than 20% of outstanding government bonds.
The BoJ balance sheet expansion continues The BoJ owns more than 20% of the JGB market
Source: Bloomberg, GSAM. As of January 26, 2015 Source: Bloomberg. As of December 2014.
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'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
% of GDP Central Bank Assets
Bank of Japan
European Central Bank
Federal Reserve
Bank of England
Estimates
0%
5%
10%
15%
20%
25%
'08 '09 '10 '11 '12 '13 '14
BoJ Holdings of JGBs
BoJ Government Bond Holdings (%of Government Bonds Outstanding)
15
Summary of Securitized Views
• Potential Fed tightening in 2015 and subsequent reduction in reinvestments weigh on technicals; anticipate MBS spreads to widen
• Non-agency MBS gains will be harder to achieve in 2015, but overall returns should be positive
• We remain constructive on CMBS, in both agency and private-label sectors
• CLOs represent an attractive return per unit of risk for bank buyers; FFELP Student Loan ABS present attractive spreads and high quality
Source: GSAM, FOMC. As of February 20, 2015. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. GSE = Government-Sponsored Enterprise. LCR = Liquidity Coverage Ratio. HQLA = High Quality Liquid Assets.
Securitized
16
Agency MBS Basis Position: Underweight
Fannie Mae Current Coupon Nominal Spread*
Source: GSAM, Credit Suisse. As of February 23, 2015. * Calculation: Fannie Mae Current Coupon yield (Credit Suisse production model retrieved on February 24, 2015) minus the average of the US 5-year and 10-year government yields, plotted as a time series.
Securitized
Outlook We are underweight agency MBS as an asset class, and anticipate widening in the months ahead
Tapering of Fed purchases of agency MBS has pushed net issuance positive, a potential headwind for the sector
Nominal spreads are near all-time lows; we expect this to normalize over time as volatility returns to more normal levels
Financing has cheapened since net issuance turned positive mid-2014—a feature typically associated with wider spread levels
Nom
inal
Spr
ead
(bps
)
Low: 76 bps in Sep-12
Current: 102 bps
0
50
100
150
200
250
300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
17
Non-agency RMBS Improving Housing Fundamentals Remain Supportive for Valuations
Outlook Borrower performance has improved materially since 2008-2009, with delinquency pipelines diminishing, and increasing modification rates
leading to more borrowers moving from delinquent to current status
Subprime delinquency rates have shown the strongest declines, although sector-wide improvement has been notable
Improvements in fundamentals have outpaced expectations since 2009, leading to lower realized losses than anticipated in 2009-2010
2006 Vintage Non-agency RMBS
Retrieved January 2015, data to Q4 2014. Source: GSAM, Intex. Past performance does not guarantee future results, which may vary. The economic and market forecasts presented herein have been generated by GSAM for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. % Seriously Delinquent = more than 60 days delinquent.
Securitized
% S
erio
usly
Del
inqu
ent
0
10
20
30
40
50
60
24 36 48 60 72 84 96
Alt A Option ARM Subprime
(~2008) Weighted Average Loan Age (Months) (~2014) (~2009) (~2013)
18
CMBS Collateral Performance Has Improved Materially
Delinquency / Similar by Vintage Delinquency by Property Type
Source: GSAM, Trepp. Data as of December 2014, retrieved January 6, 2015. The economic and market forecasts presented herein have been generated by GSAM for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Summary Overall, delinquent loan inventories have declined over the past year, particularly in 2007 and 2006 vintage CMBS
Delinquency rates have shown the strongest improvement in the apartment sector
However, delinquencies remain elevated across vintages and property types, a factor which appears well priced into CMBS prices
0
2
4
6
8
10
12
14
16
18
2007 2008 2009 2010 2011 2012 2013 2014 2015
% 3
0 D
ays+
Del
inqu
ent /
In F
orec
losu
re /
REO
2005 2006 2007
Vintage:
0
2
4
6
8
10
12
14
16
18
2007 2008 2009 2010 2011 2012 2013 2014
Del
inqu
ency
by
Prop
erty
Typ
e (%
)
Retail Office Apartment
Type:
19
ABS FFELP Student Loans
Outlook The FFELP (Federal Family Education Loan Program) terminated in 2010; when active, loans made to students or parents were insured by
the Department of Education, rendering them high quality
The outstanding balance of FFELP loans is diminishing, as they are either being paid down or securitized; i.e., FFELP ABS exhibit the substantial positive technical of a having a finite quantity of future supply
In addition, collateral performance has been strong with unemployment continuing to fall, and default rates decreasing
Despite this, spreads have remained relatively wide; we find current levels attractive entry points
FFELP ABS Collateral Performance
Source: GSAM, Department of Education, JP Morgan, as of December 31, 2014.
Securitized
FFELP ABS Spread Performance
Coh
ort D
efau
lt R
ate
(%)
BA
ML
JPM
Cre
dit S
uiss
e
0
20
40
60
80
100
2010 2011 2012 2013 2014 2015
LIB
OR
OAS
(bps
)
3-year 5-year 7-year Spread
Duration:
0
2
4
6
8
10
12
0
5
10
15
20
25Cohort Default Rate (%, LHS)
Unemployment (%, RHS)
Unem
ployment R
ate (%)
20
Where are Credit Spreads Relative to History? Spreads in Europe are tight relative to history and about average in the US
Source: Barclays, JP Morgan, Bloomberg. As at 11-Mar-2015. The spread shown is the option-adjusted spread to worst, based on a lognormal option model
Securitized
662
125
447
366
414
79
321
US High Yield Energy
US Investment Grade
US High Yield
EM External Debt
US High Yield Ex-Energy
Euro Investment Grade
Euro High Yield
0 25 50 75 100
Percentile
Current Spread (bps)
50th Percentile
21
0
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475
500
500+
Freq
uenc
y
Spread (bp)
BBB Rated
0
10
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80
90
25 50 75 100
125
150
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375
400
400+
Freq
uenc
y
Spread (bp)
A Rated
0
20
40
60
80
100
120
20 40 60 80 100
120
140
160
180
200
220
240
260
280
280+
Freq
uenc
y
Spread (bp)
AA Rated
0
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80
40 60 80 100
120
140
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220
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260
280
300
300+
Freq
uenc
y
Spread (bp)
IG Index
Distribution of Corporate Spreads Monthly Spread Levels (June 1989 – March 2015)
Source: Barclays. As at 11-Mar-2015. The spread shown is the option-adjusted spread to worst, based on a lognormal option model
11-Mar-2015 = 163 bps
(59th Percentile)
11-Mar-2015 = 100 bps
(52nd Percentile)
11-Mar-2015 = 125 bps
(59th Percentile)
11-Mar-2015 = 68 bps
(51st Percentile)
Securitized
22
The energy sector has sold off due to lower oil prices
Source: Barclays. As of 09-Mar-2015. Past performance does not guarantee future results, which may vary.
Since 2H 2014, the corporate credit index returned +2.6% while the energy component returned -0.2% and oil field services has declined 7.0%.
Decline of Energy vs. Broad IG Corporates Index
Change in OAS (bps) from 2H 2014 to 09-Mar-2015
OAS (bps) 30-Jun-2014 9-Mar-2015 Delta
IG Corporate Index 99 122 23
Industrials 102 129 27
Energy 108 172 64
Independent Energy 99 167 68
Integrated Energy 68 90 22
Oil Field Services 121 304 183
Refiners 121 172 51
Midstream 136 189 53
23
Emerging Market Outlook for 2015 Many EM countries are well positioned to withstand potential volatility
Source: Top LHS chart. Bloomberg, Datastream, GS Global Investment Research, PIIE; Bottom LHS chart. GS Investment Strategy Group, Datastream, IMF, JP Morgan, World Bank; RHS: Citi Research
While EM Currencies are 12% weaker than the Global Financial Crisis lows…
Country selection remains key to finding winners 68
73
78
83
88
93
98
10365
70
75
80
85
90
95
100
105
110
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
US D
ollar
Inde
x (DX
Y)
EMLD
FX (0
1/01/2
008 =
100)
EMLD FX DXY (rhs, inv)
EMLD FX GFC low
Current EMLD FX level
USD Appreciation
…EM Total External Debt remains low, flexible exchange rates cushion growth
24%
15%
20%
25%
30%
35%
40%
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
EM Ex
terna
l Deb
t (%GD
P)E
M E
xter
nal D
ebt (
% o
f GD
P)
EM
Loc
al D
ebt F
X P
erfo
rman
ce (
1/1/
2008
= 1
00) –
Th
roug
h M
arch
17,
201
5
Change since April 2013 in fundamental macro variables
24%
Securitized
24
Impact on Stable Value Portfolios
Market–to–Book Value Ratios
Book Value Crediting Rates
Investment Guideline Considerations
Impairments and Defaults
Source: GSAM As of February 2015. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.
Securitized
25
Where are the Opportunities? GSAM Market Views
As of March 4, 2015. Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.
Top-Down Our View Duration/Term Structure US Short Japan Neutral UK Neutral Europe Neutral Country (rates) US Long Canada Long Europe Short UK Short Currency
GBP, NOK, SEK, MXN, INR, AUD, CAD, ZAR, USD, MYR, + EUR, NZD, CNH, SGD, KRW, JPY, TRY, –
Cross Sector Swap Spreads Neutral Agency – Municipals (BABS) Neutral ABS (incl SLABS) Neutral Agency MBS Neutral Non-Agency MBS + IG Corporates + HY Corporates + CMBS/CLO + EMD +
Bottom-Up Our View Securitized
Agency MBS pass-throughs – Multi-family MBS + Non-Agency MBS + CMBS + CLOs + Covered Bonds Neutral ABS (incl SLABS) Neutral
Corporate Credit Investment Grade +
Energy – Healthcare –
REITs & Real Estate + Finance +
Telecom-Non Cellular + High Yield +
Telecom- Cellular + Utilities - Gas Distribution – Bank Loans + Cash/Synthetic Basis Neutral
Emerging Market Debt (EMD) External Debt + Local Debt / Currency Neutral
Questions & Answers
Appendix A: Profiles of Professionals
28
Michael Swell Managing Director, Co-Head of Global Portfolio Management Michael is the co-head of Global Portfolio Management within the Global Fixed Income team in Goldman Sachs Asset Management (GSAM). In this role, he is responsible for co-leading the global team of portfolio managers that oversee multi-sector portfolios. Previously, Michael was a senior portfolio manager and co-head of the US Fixed Income group. He joined the firm in GSAM in 2007 as a managing director and head of Structured Products. This role entailed the creation of structured product asset management vehicles across the spectrum of fixed income products and management of opportunistic/alternative portfolios. Michael was named partner in 2012. Prior to joining the firm, Michael was a senior managing director in charge of Friedman, Billings & Ramsey’s (FBR) Fixed Income Sales & Trading Division. Under Michael’s guidance, his division was responsible for the underwriting of more than $22 billion of mortgage-related transactions. Prior to FBR, he was the vice president and head of the Securities Sales and Trading Group at Freddie Mac. Michael earned a BA in Politics and Economics from Brandeis University, a General Course Degree from the London School of Economics and an MA in International Economics and Finance from the Lemberg School at Brandeis University.
Profiles of key professionals
Profiles of Professionals
As of February 28, 2015.
Appendix B: Disclosures
30
Disclosures:
This material is provided at your request for informational purposes only. It is not an offer or solicitation to buy or sell any securities. THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO. Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice. Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur. These examples are for illustrative purposes only and are not actual results. If any assumptions used do not prove to be true, results may vary substantially. This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material is not financial research and was not prepared by Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of GIR or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates. Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice. Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only. References to indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only and do not imply that the portfolio will achieve similar results. The index composition may not reflect the manner in which a portfolio is constructed. While an adviser seeks to design a portfolio which reflects appropriate risk and return features, portfolio characteristics may deviate from those of the benchmark. Index Benchmarks Indices are unmanaged. The figures for the index reflect the reinvestment of all income or dividends, as applicable, but do not reflect the deduction of any fees or expenses which would reduce returns. Investors cannot invest directly in indices. The indices referenced herein have been selected because they are well known, easily recognized by investors, and reflect those indices that the Investment Manager believes, in part based on industry practice, provide a suitable benchmark against which to evaluate the investment or broader market described herein. The exclusion of “failed” or closed hedge funds may mean that each index overstates the performance of hedge funds generally. Confidentiality No part of this material may, without GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient. © 2015 Goldman Sachs. All rights reserved. Compliance code: 3963-OTU-16111
Disclosures