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Secular Outlook 2023-1
Secular Outlook 2023-1
SECULAR OUTLOOK
Economic and investment trends
Marketing Material
Publication date: 8 December 2022, 8:00 CET
Please find important legal information at the end of this document.
Source: Bank Julius Baer & Co. Ltd. (Julius Baer), unless explicitly stated otherwise.
Contents
4
The end of the peace dividend
6
Key secular trends
22
Key risk factors
23
Appendix
3
The end of the peace dividend
4
The end of the peace dividend
will continue to wag the dog (i.e. given the expo- key commodities necessary for the energy transition
nential value of financial assets in relation to global may see upward price pressure for years to come, as
gross domestic product, changes in asset prices still supply struggles to catch up with demand.
disproportionally influence the real economy), and
central banks will only be allowed to act in an uncon- Finally, this year is exceptional in the sense that,
strained manner in the absence of systemic risk given the derating across asset classes, it provides
threats. investors the rare opportunity to (hopefully) prof-
itably reposition their portfolios for the next cycle.
Let us now turn to the most watched topic of this This, naturally, gives rise to conversations about
year, inflation. Following the geopolitical events of the emergence of a new market leadership. The
2022, we have adapted our view on long-term infla- last decade was all about the US technology plat-
tion. In the previous year’s edition of the Secular forms, known as the FAANMGs1. As the business
Outlook, we saw no structural forces warranting a models of these companies mature, it remains to
rapid and persistent rise in inflation. We expected be seen whether they can maintain their previous
economies to gradually reflate as a result of gen- above-market profitability. For our part, we surmise
erous fiscal and monetary policies and decreas- that new growth champions could emerge from the
ing inequalities. While we do not believe, as noted group of companies that manage to bring the digital
above, that global supply chains will be dismantled revolution into the physical world. After the inter-
rapidly, geopolitical frictions should nonetheless net, this is the next step in digital disruptions. The
exert enough pressure and increase supply volatility field is quite large, from robotics and automation to
to maintain average inflation in the West somewhat supply-chain optimisation, but our preferred theme
above 3%, on average, as opposed to the below 2% remains these disruptions in the life-science space,
that prevailed in the decades prior. Critically, infla- including digital healthcare and biotechnology.
tion in the new supply-constrained world is the result
of policy choices. This is of the utmost importance We hope you will enjoy reading this edition of the
for investors, who need to work extra hard to prevent Secular Outlook, and that you will find it a useful
the purchasing power of their capital from eroding. guide for your investment decisions in these turbu-
In this environment, real assets (e.g. equities) gen- lent times.
erally outperform nominal claims, such as bonds.
That said, the move towards a higher but contained
inflation world will not be smooth. Therefore, in the Yours faithfully,
not-too-distant future, even a deflationary spell may
appear, which complicates the role of central banks.
We expect both inflation and general macroeco-
nomic volatility (including economic activity as well
as financial markets) to be much more pronounced
as a result of the new geopolitical environment.
FAANMG: Meta (formerly Facebook), Apple, Amazon, Netflix, Microsoft, and Alphabet (formerly Google).
1
5
Key secular trends
Bretton Woods Floating Falling inflation Fall of the European Economic Managed Multipolarity and
exchange rates Berlin Wall and Monetary Union deleveraging in strategic reshoring
Plaza currency
western countries
Oil shock agreement Globalisation Great global Unorthodox
imbalance Shift from macroeconomic
What happened?
US Nifty-Fifty Small caps Government bonds Index funds Hedge funds Developed-market ‘Store of value’
stocks: 50 most quality equities equity markets
What profited?
6
Key secular trends
From the trends that arose out of the embrace of global inflation spike, especially in Europe, where
neoliberal policies in the West, the most prominent the fear of shortages in the winter continues to grab
one is globalisation. The surge in global trade that headlines. While we see ample evidence that these
was first incited by the end of the Cold War, and fears are overblown, as of now Europe’s energy secu-
later boosted by China’s accession to the World rity has been upended, and it is forced to rethink its
Trade Organization in 2001, had a tangible impact whole energy supply chain.
on most of the global population. While lifting many
people out of poverty in developing countries and Thus, on its surface, the picture seems pretty dire.
allowing for huge efficiency gains and cost reduc- Every significant geopolitical event in recent years
tions for corporations, many cite it as the prime tells us that we are on a no-return path to the inev-
reason for growing inequalities and rising populism itable restructuring of supply chains that were built
within the advanced economies. It is thus not a in the past three decades. Yet we continue to believe
surprise that as the foundations of the neoliberal that even if global trade is stagnating and geopolit-
doctrine begin to crumble, globalisation is the first ical tensions will likely also continue to send tremors
element that many suggest should be thrown out through economies and markets, a full-fledged
the window. deglobalisation and decoupling remains unlikely.
While traditional measures of trade openness have There are two reasons for this. First, we believe
been stagnating since the Global Financial Crisis, it that despite the two countries’ rhetoric and stra-
was the US’s trade war with China, which was initi- tegic ambitions, the US and China are simply too
ated in 2018 by former US President Donald Trump, economically interlinked to allow for an abrupt
that really propelled the idea of deglobalisation into and broad break in their trade relations. Reading
the mainstream. The thesis of a decoupling bipolar between the lines, we see plenty of signs that nei-
US-China world severing major global trade ties was ther nation sees this kind of outcome as desirable.
reinforced as it became clear that the US stance was The war in Ukraine has presented plenty of oppor-
not going to change with the Biden administration. tunities for diplomatic mishaps, yet overall disagree-
If anything, the animosity between the two coun- ments between the US and China have mostly been
tries has further increased since then. The Demo- focused on trade and economic competition issues,
cratic administration has not only extended bans which has allowed them to mainly express their dis-
on investment in Chinese companies but has also agreements on the subject in words, not actions.
introduced a ban on the exportation of cutting-edge
semiconductors and various key technologies to
China. Although the US, as the threatened, reigning global
superpower, seems much more resolved to contain
China, outside of sanctions and ban lists, its bilat-
With Russia’s invasion of Ukraine, the threat of eral trade with the country continues to grow, albeit
deglobalisation has never seemed more real. The at a slower pace. A recent study by the Peterson
ongoing war gives us a glimpse of what a disman- Institute for International Economics shows that, in
tling of well-established trade relations could look the four years since the start of the trade war, the
like. Soaring energy prices have exacerbated the
8
Key secular trends
Chinese goods hit by high US tariffs have indeed goods that are of lesser strategic importance, as well
seen a significant decline in terms of US imports. as those where competitive suppliers are scarce, are
However, those goods that have not been subject unlikely to be reshored.
to levies have actually surged, increasing by 50%
(as compared to US imports from the rest of the The second reason why we believe that deglobali-
world, which increased by only 38%; see chart 1). sation will ultimately be limited is that the world is
These include such goods as laptops, smartphones, multipolar, as opposed to bipolar. Until recently, we
and video-game consoles. Meanwhile, even imports also subscribed to the bipolar view, but develop-
of some products that were hit with medium-sized ments this year have made us change our minds.
tariffs have increased. For example, the import of What these developments show is that the unques-
lithium batteries used in electric vehicles has shot tioned leadership that was, for instance, exhibited by
up due to high demand and the absence of a viable the US and the Soviet Union during the Cold War
(affordable) alternative. is not present today. Today, some countries clearly
prioritise their own objectives in favour of habitually
Overall, with international supply chains as inter- adhering to one block or another. The most prom-
twined, complex, and mutually profitable as they are inent example this year is India’s purchase of dis-
today, we believe there is no strong case for China counted Russian oil despite being a usual ally of the
and the US to fully decouple, nor, more generally, West, especially when it comes to opposing China.
for countries to fully reshore (or friend-shore) their Contrary to what some people might have expected,
businesses. The greatest incentive for a decoupling the West not only neglected to condemn the coun-
exists in key strategic sectors that are important to try for its self-serving practice, but it even confirmed
national security, such as technology (which can be the legitimacy of its decision. In a similar manner,
weaponised) or energy. In these sectors, we are likely Saudi Arabia has defied US opposition by agreeing
to continue to see government policies designed to with Russia to support oil prices. It could be argued
boost domestic production, increase resilience, and that these countries are not in the US’s core alli-
curtail ‘the other side’s’ efforts to succeed. However, ance against China – after all, they are not part of
Value of US imports by provenance and tariff list (Index, June 2018 =100)
150
July 2018:
US starts tariff war
125
100
75
50
2017 2018 2019 2020 2021 2022
China – all product categories China – high tariffs
China – medium tariffs China – no tariffs
Rest-of-the-world Pre-trade war trend in total US imports
9
Key secular trends
13.3%
125
12.5%
11.3%
10.2% 10.0% 25
9.0%
8.1%
5
1
Inflationary environment Disinflationary environment 1970 1980 1990 2000 2010 2020
Source: Bloomberg Finance L.P., Thomson Reuters Datastream, O. Jordà, M. Schularick, and A.M. Taylor (2017). Macrofinancial History
and the New Business Cycle Facts. In NBER Macroeconomics Annual 2016, volume 31. O. Jordà, K. Knoll, D. Kuvshinov, M. Schularick,
and A.M. Taylor (2019). The Rate of Return on Everything, 1870–2015. In Quarterly Journal of Economics, volume 134.
Notes: Based on annual data. The inflationary environment comprises the period 1970–1990. The disinflationary environment comprises
the period 1990–2021. Past performance and forecasts are not reliable indicators of future results. The return may increase or decrease
as a result of currency fluctuations.
11
Key secular trends
Unorthodox macroeconomic
policies
In a highly financialised world, unorthodox macroeconomic policies will continue to domi-
nate, including financial repression and fiscal policy inspired by Modern Monetary Theory.
Just like us, monetary authorities initially did not This stark shift in the policy landscape is confront-
expect the 2021–2022 inflation spike to be as ing investors with an important question: “Is this the
strong, and certainly not as persistent, as it turned end of unorthodox policies and financial repression?”
out to be. On one hand, supply-chain difficul- With the US 10-year Treasury yield having breached
ties related to the global pandemic did not dis- the 4% threshold in late September and short-term
sipate as quickly as expected. China’s continued rates expected at around 5% next spring, it certainly
zero-Covid-19 policy contributed to that, while would not be a stretch to say that we are done with
Russia’s invasion of Ukraine added fuel to the fire zero-to-negative interest rates, quantitative easing,
by jacking up energy prices and taking the inflation and Modern Monetary Theory (MMT)-inspired
problem to the next level. On the other hand, in the policies.
US, demand turned out to be exceptionally resili-
ent. Once again, Covid-19 and its aftermath are As with other apparent big shifts this year, we prefer
most likely to ‘blame’ here. The generous US gov- to take such predictions with a pinch of salt. Sim-
ernment stimulus meant to compensate for income ply stated, many of the trends that led us to declare
losses from the lockdowns was most likely more than the new era of state-sponsored capitalism are still
enough to provide households with a buffer well well in play. Crucially, we maintain the view that the
beyond the reopening of the economy. Additionally, ‘tail is wagging the dog’, i.e. given the exponential
a structural shift in the labour market significantly value of financial assets in relation to global gross
shrunk the US labour force. A wave of early retire- domestic product, changes in asset prices still dis-
ments and a drop in the immigrant workforce coin- proportionally influence the real economy. 2022
cided with a shortage of workers in the lower-paying tried its best to make us believe the opposite – after
industries that were hit by the pandemic, which pro- all, despite the sharpest drop in liquidity supply in
vided a nice boost in wages for the group. decades, the US economy, though predictably slow-
ing, manages to stay remarkably on course thanks to
The result of this toxic inflationary mix was the the changes on the labour market described above.
180-degree pivot from dovish to hawkish by the Fed At one point, though, if the Fed continues to blindly
and the most violent hiking campaign of the fed- tighten, something will break, and this breakage will
eral funds target rate on record. The central bank likely constrain its tightening intentions substantially.
proceeded with several 50 and 75 basis-point rate We saw a similar scenario play out in the UK, as the
hikes, restarted its quantitative tightening experi- Bank of England reopened the asset purchase taps
ment, and repositioned itself as an inflation fighter, in order to rescue the British pension fund market.
rather than the ‘perma-dove’ it had channelled just Since then, the turmoil has calmed down, but one
12 months prior. At the same time, US fiscal policy, could imagine a situation in which the financial dis-
despite making a lot of noise with catchy-sounding ruption is much greater. Another example lies in the
bill names (e.g. ‘Build Back Better’ and ‘Inflation crypto space, where the liquidity crunch did, in fact,
Reduction Act’), is expected to be one of the largest cause something of a Lehman-style meltdown in
drags on gross domestic product in the next couple the digital-asset ecosystem. Luckily, this ecosystem
of years. These programmes are projected to be, at is too isolated from the broad market and is small
best, fiscally neutral. enough to be contained within its own sphere.
12
Key secular trends
Overall, the sheer volume of financial assets and to have any hope of reshoring key industries or suc-
global debt would not allow for a continuous rise in ceeding in their ambition to achieve net-zero car-
interest rates and yields, as its potential to cause sys- bon emissions. The fiscal wave might have rolled
temic problems is too high. Actually, the best tools over for now, but we see this changing throughout
for eroding the global debt burden while avoiding the decade, as we get to know the true meaning of
a disorderly collapse of debt are low interest rates ‘state-sponsored capitalism’. In five years’ time, we
combined with a healthy (meaning higher, but con- might be surprised at just how large the monetary
tained, i.e. between 3% and 4%) dose of inflation. and fiscal policy toolbox has become, as policymak-
ers harness their full potential (including the lessons
Looking at the outlook for fiscal policy, advanced learned from over a decade of unconventional pol-
economies continue to suffer from record inequal- icymaking) to deal with higher structural inflation
ities, ageing demographics, and stagnating econ- and elevated macroeconomic volatility in a highly
omies, and there is still tremendous pressure on financialised world (see ‘Asset allocation in a 3%+
governments to alleviate these problems. Moreo- inflation world’ on p. 15).
ver, government support is essential for countries
Key secular trends
Understanding the implications of the US-dollar combined with the curtailment of Russian access to
regime has actually been the most important asset the SWIFT payment system, is the first time in his-
allocation input, tightly linked to the investment tory that the global financial system and the US dol-
trend dominating markets in each decade. Dur- lar have been weaponised against a major economic
ing secular US-dollar bull markets, US assets have power. It would be hard to overstate the geopolitical,
outperformed the rest of the world, and during economic, and financial ramifications, as this inci-
secular bear trends, the rest of the world has outper- dent is tantamount to the end of the peace dividend
formed US assets. Since 2011, we have experienced that has contributed to the rising prosperity of the
a US-dollar secular bull market again. This sequence global economy over the past three decades. Indeed,
has been driven by the unique status enjoyed by financial markets are no longer immune to geopolit-
the greenback as the world’s main reserve currency. ical affairs, and financial warfare means that poten-
Most of the global trade in goods and services has tial international diversification benefits give way to
been, and still is to a large but declining extent, con- confiscation risk.
ducted in US dollars.
Furthermore, unorthodox macroeconomic policies,
Today, the rise of China is changing this dynamic in including those inspired by MMT, where recurring
multiple ways. China is intent on breaking free from public deficits are monetised by the central bank,
the dollar-dominated system and establishing the are still very much on the US policy agenda. Yet
CNY (or the e-CNY) as a stable global reserve cur- nowadays, all major advanced economies are doing
rency. The Russian invasion of Ukraine and West- the exact same thing to various degrees. Accord-
ern sanctions imposed on the aggressor will further ingly, in a higher inflation world, the US dollar is not
accelerate this effort. Already today, discount Rus- expected to debase against other paper currencies
sian oil bought by China is paid in renminbi. The but rather against real assets: equities, gold, and real
freezing of Russian companies’ assets and the estate, in that order.
Russian central bank’s foreign-exchange reserves,
14
Key secular trends
DISINFLATIONARY INFLATIONARY
15
Key secular trends
too volatile to form a solid backbone for the typical portfolios could be positioned to be able to profit
investment portfolio and work only when inflation is from both inflationary and deflationary spells. For
exceptionally high and rising. Purely financial assets, example, this could be achieved through the right
such as bonds, have historically provided limited balance of equity styles. Second, investors could
protection against inflation. They remain a crucial take a tactical approach by investing in assets that
portfolio building block, be it for downside protec- would profit the most from higher or lower inflation,
tion or for return-enhancing carry. Following the his- depending on the market situation. Inflation-linked
torical bond market sell-off of 2022, bonds are once bonds would work well in an environment where
more priced for attractive returns in the short-to- inflation is expected to accelerate. The same goes
medium term. for equity markets that are exposed to commodities.
If expected inflation is on a downward trajectory, US
What is the best way to deal with higher volatility? Treasuries and defensive equities should typically
The short answer is that investors are going to have outperform.
to learn to live with it. Fighting against volatility by
attempting to stamp it out completely would most
likely turn out to be counterproductive, as volatil-
ity also goes hand in hand with returns. However,
there are ways to extract the most from it. First,
Yves Bonzon
Group Chief Investment Officer
Key secular trends
Energy transition
The energy transition, which aims for a shift towards net-zero carbon emissions, is in full
swing. However, legacy energy sources will remain important for some time to provide
energy security during the transition period.
This year has put global markets to the test, to rollercoaster? The short answer is no. The longer
say the least. Continued global supply-chain dis- answer, however, is not as black and white.
ruptions, a war in Ukraine, and an unfortunate
maintenance schedule for nuclear power plants in One year ago, in the prior edition of this publication,
France has unsurprisingly proved to be an explo- we explicitly stated that the global shift to more sus-
sive mix for global energy prices. Additionally, var- tainable energy sources would not be a smooth jour-
ious media outlets, alongside a great number of ney and that the first bumps in the road were already
financial analysts, did not hold back in predicting a noticeable. Twelve months later, it has become clear
freezing Europe this winter, sending investors into that we might have underestimated the emerging
panic mode. Critics of green and renewable ener- challenges and that some of these bumps in the
gies were quick to find a scapegoat for this accumu- road have turned out to be potentially car-wrecking
lation of mishaps: the ongoing energy transition. Is potholes. The war in Ukraine has demonstrated
the world’s shift towards net-zero carbon emissions how dependent Western Europe still is on imported
and the subsequent decrease in investments into Russian and nuclear energy. Despite significant
fossil fuels really to blame for this year’s energy price
Lithium
Cobalt USD 6.3 bn
USD 8.7 bn 0.3 mt
0.2 mt
Copper
USD 230 bn Nickel
USD 48 bn
Aluminium 25 mt
2.6 mt
USD 166 bn
67 mt
Steel
USD 2282 bn
Iron ore 1,950 mt
USD 216 bn
1,353 mt
Source: International Aluminium Institute, International Copper Study Group, International Nickel Study Group, United States Geolog-
ical Survey, Julius Baer
Notes: Bubble sizes show market size; volumes and values based on 2021 production and average annual prices. The vertical position of
the bubbles also illustrates the demand impact. A higher position indicates higher demand, a lower position lower demand. Mt = metric
tonnes; bn = billions
17
Key secular trends
18
Key secular trends
broad-scale super cycle without an accompanying peak in 2030), the energy transition will be its sin-
oil super cycle. Nonetheless, we do not see a strong gle strongest driver until the middle of the century,
case for the latter, as supplies are constrained polit- which will lead to a continuously growing global
ically rather than structurally, and as imminent struc- copper consumption. Looking at the supply side, we
tural demand headwinds will arise, especially from expect to see a significant slowdown in mine-supply
China. growth from the middle of the decade before an
acceleration of scrap supplies due to a faster recy-
It is important to note that this unlikeliness of a cling cycle for electric-vehicle batteries will finally
broader commodity super cycle does not mean that be able to offset this gap. All in all, this temporary
certain commodities will not experience a period imbalance between growing demand and simultane-
of elevated prices during this decade. Looking at ously declining supply leads to a very strong struc-
industrial metals, for example, there are two oppos- tural outlook for copper in the coming decade, which
ing structural trends at work influencing demand. should push prices from today’s level of around USD
China’s demographics and its economic transition 8,350 back to above USD 10,000 per tonne, and
towards slower growth act as a negative price pres- potentially beyond in the longer term. Copper thus
sure, while the growth of clean technologies has a joins the energy-transition-driven battery-metals
positive influence. One metal that deserves more super cycle (including nickel, cobalt, and lithium).
attention in that regard is copper. Despite China That said, prices are still susceptible to short- and
slowly moving from boosting to breaking copper medium-term swings, reflecting a mix of the market
demand (Chinese copper demand is expected to mood and the cyclical economic environment.
Key secular trends
Life-science disruptions
Reinforced by the digitalisation of healthcare and the rise of data, life-science innovations
will deeply impact lifestyles and the investment landscape.
Apart from defining the prevailing macroeconomic The business models of some of these companies
trends, our yearly Secular Outlook also seeks to are under serious pressure and raise questions about
identify the market leaders of the unfolding decade. their future viability as we enter the next phase
If historical evidence is anything to go by, the win- of the information age. The FAANMGs urgently
ners of the past decade are unlikely to be the win- need to focus on spiralling costs in order to main-
ners of the current decade. While the FAANMGs tain their relevance as building blocks in portfolios.
have been at the forefront of shareholder value cre- While some members of the group are unlikely to
ation over the past years of secular disinflation, we be able to reverse the current negative profitability
are starting to see a gradual shift, which marks the trend, others will probably succeed in transforming
end of the FAANMG supremacy over the US equity themselves from growth engines into mature qual-
market. This raises two major questions. What role ity companies. Those that successfully manage this
will the FAANMGs play in investors’ portfolios going transition will continue to have their place in invest-
forward, and what companies will take over the mar- ors’ portfolios.
ket leadership?
Total return
150%
100%
50%
0%
-50%
-100%
S&P 500
EM debt (local)
USD/EUR
MSCI EMU
US high yield
Bitcoin
Nasdaq Biotech
Gold
MSCI EM
Nasdaq
US Treasuries
EM currencies
EM debt (HC)
MSCI China
20
Key secular trends
21
Key risk factors
Infrastructure risk
Infrastructure risk lies at the crossroads
between climate change and cyber risk. This
prompts governments to accelerate their efforts
against those threats and also pushes infrastructure
projects to become resilient to them.
Appendix
Appendix
Table 1: Performance over the last five years
23
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rated and existing under the laws of the Grand Duchy eign bank.
of Luxembourg, with registered office at 25, rue Edward
Steichen, L-2540 Luxembourg, registered with the Lux- Spain: Bank Julius Baer Europe S.A., Sucursal en España,
embourg Register of Commerce and Companies (RCSL) is a branch of Bank Julius Baer Europe S.A. with regis-
under number B 8495. Bank Julius Baer Europe S.A. Ire- tered branch office in Paseo de la Castellana 7, 2nd floor,
land Branch distributes this document to its clients. Some E-28046 Madrid. It is authorised and regulated by the
of the services mentioned in this document, which are Commission de Surveillance du Secteur Financier (CSSF),
available to clients of Bank Julius Baer Europe S.A. Ireland 283, route d’Arlon, L-1150 Luxembourg, and is regulated
branch, may be provided by members of the Julius Baer for conduct of business rules by the Bank of Spain (Banco
Group based outside of the Grand Duchy of Luxembourg de España), c/Alcalá, 48, E-28014 Madrid, under the
or the Republic of Ireland. In these cases, rules made by registration number 1574. Bank Julius Baer Europe S.A.,
the CSSF and the CBI for the protection of retail clients Sucursal en España is also authorised to provide invest-
do not apply to such services, and the CSSF and the Irish ment services subject to the supervision of the Comisión
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able to resolve complaints in respect of such services. E-28006 Madrid. Bank Julius Baer Europe S.A. is a société
anonyme incorporated and existing under the laws of the
Singapore: This document is distributed in Singapore Grand Duchy of Luxembourg, with registered office at 25,
by Bank Julius Baer & Co. Ltd., Singapore branch, and is rue Edward Steichen, L-2540 Luxembourg, registered with
available for accredited investors or institutional investors the Luxembourg Register of Commerce and Companies
only. This document does not constitute an ‘advertise- (RCSL) under number B 8495. Bank Julius Baer Europe
ment’ as defined under Section 275 or 305 respectively S.A., Sucursal en España distributes this document to its
of the Securities and Futures Act, Cap. 289 of Singapore clients.
(the ‘SFA’). This document has not been reviewed by and
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(‘MAS’). Any document or material relating to the offer or Baer & Co. Ltd., Zurich, authorised and regulated by the
sale, or invitation for subscription or purchase, of securities Swiss Financial Market Supervisory Authority (FINMA).
or investment funds (i.e. collective investment schemes)
United Arab Emirates (UAE): This document has not
may not be circulated or distributed, nor may such secu-
been approved or licensed by the UAE Central Bank, the
rities or investment funds be offered or sold, or be made
UAE Securities and Commodities Authority or any other
the subject of an invitation for subscription or purchase,
relevant authority in the UAE. It is strictly private and con-
whether directly or indirectly, to persons in Singapore
fidential and is being issued to a limited number of sophis-
other than (i) to an institutional investor under Section
ticated individual and institutional investors upon their
274 or 304 respectively of the SFA, (ii) to a relevant per-
request and must not be provided to or relied upon by any
son (which includes an accredited investor), or any person
other person.
pursuant to Section 275(1A) or 305(2) respectively, and
in accordance with the conditions specified in Section 275 United Kingdom (UK): Julius Baer International Lim-
or 305 respectively of the SFA, or (iii) otherwise pursu- ited, which is authorised and regulated by the Financial
ant to, and in accordance with the conditions of, any other Conduct Authority (FCA), distributes this document to
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ment funds that are not authorised or recognised by the the UK, this document is a financial promotion that has
MAS, units in such funds are not allowed to be offered to been approved by Julius Baer International Limited for
the retail public; any written material issued to persons as distribution in the UK. Some of the services mentioned in
aforementioned in connection with an offer is not a pro- this document may be provided by members of the Julius
spectus as defined in the SFA and, accordingly, statutory Baer Group outside the UK. Rules made by the FCA for
liability under the SFA in relation to the content of pro- the protection of retail clients do not apply to services pro-
spectuses does not apply, and investors should consider vided by members of the Julius Baer Group outside the
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T07FC7005G) is incorporated in Switzerland with limited the client’s individual circumstances, and it may be subject
liability. to change in the future. Clients should obtain independ-
ent tax advice in relation to their individual circumstances
South Africa: This document is distributed by Julius
from a tax advisor before deciding whether to invest.
Baer South Africa (Pty) Ltd, which is an authorised finan-
Julius Baer International Limited provides advice on a lim-
cial services provider (FSP no. 49273) approved by the
ited range of investment products (restricted advice).
28
Uruguay: In case this document is construed as an offer,
recommendation or solicitation for the sale or purchase of
any securities or other financial instruments, the said offer,
recommendation or solicitation is being placed relying on
a private placement exemption (oferta privada) pursuant
to Section 2 of Law No. 18,627 and is not and will not be
registered with the Superintendency of Financial Services
of the Central Bank of Uruguay to be publicly offered in
Uruguay. In case of any closed-ended or private equity
funds, the relevant securities are not investment funds
regulated by Uruguayan Law No. 16,774 dated 27 Sep-
tember 1996, as amended. If you are located in Uruguay,
you confirm that you fully understand the language in
which this document and all documents referred to herein
are written, and you have no need for any document what-
soever to be provided in Spanish or any other language.
29
Notes
30
Founding Signatory of: