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BROKERS IRELAND

IRISH LIFE

INVESTMENTS

December 2019

History of Equity Markets

Diversification

Active vs Passive

Behavioural Finance

Irish Life Fund Solutions

Investment Quiz

Market Outlook

Summary

HISTORY OF EQUITY MARKETS

LONG TERM EQUITY RETURNS – US EQUITIES 1927-2018

S&P 500

WW2 1939-45

Korean War 1950-53

Post War Boom

New Deal 1933-40

Oil shocks 1973 & 79

Vietnam war 1969-72

Black Monday Oct 1987

Stagflation 1973-75

Savings & loans crisis 1986-95

Iraq invasion of Kuwait

Tech bubble

Tech bubble burst

Allied invasion of Iraq

Global financial crisis

US QE1

Q4 2018 crash

Great Depression

Reagan era

LONG TERM EQUITY RETURNS – US EQUITIES 1900-2018

▪ LT Annualised Return is 9.4% Nominal and 6.4% Real return

▪ Inflation 2.9% p.a.

0.7 0.8

1969-2018 1900-2018

Equities Bonds Bills

Note: The three asset classes are equities, long-term government bonds, and Treasury bills. All returns include reinvested income, are adjusted for inflation, and are

expressed as geometric mean returns.

RELATIVE SIZES OF WORLD STOCK MARKET

Top 3 1899

UK 25%

USA 15%

Germany 13%

Top 3 2018

USA 53%

Japan 8.4%

The evolution of equity markets over time from end-1899 to end-2017

HOLDING PERIOD MATTERS

The longer your holding period, the better chance of positive returns

Maximum and minimum real returns over different periods

Note: light blue represents current year. Source CRSP. Barclays Research

DISTRIBUTION OF EQUITY RETURNS

▪ Distribution of Equity Returns S&P 500

▪ 3 years below 30% drop

POWER OF COMPOUNDING – £100 INVESTED IN 1899

Equities

Without reinvesting Income reinvested

15,185

2,706,467

41,873

20,733

LESSONS FROM HISTORY

DIVERSIFICATION, WHAT DRIVES MARKETS & AVOID THE HEADLINES

WHAT CAN YOU INVEST IN? – MAJOR ASSET CLASSES

Cash Bonds Stocks

Commodities Property Alternatives

WHY DIVERSIFY?

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

Fidelity India

45.60%

Indexed

European Gilts

10.48%

Fidelity India

87.18%

Fidelity EMEA

41.64%

Indexed

Technology

Fidelity Euro

27.07%

Indexed Ireland

37.26%

Fidelity India

56.84%

Indexed Ireland

33.27%

Indexed

Emerging Market

Equity

20.59%

Fidelity China

25.87%

Irish Property

Indexed

Technology

22.93%

Indexed Pacific

Equity

18.77%

Indexed Fixed

Interest

Fidelity EMEA

79.31%

Fidelity India

39.17%

Indexed North

American Equity

Fidelity Spec

25.86%

Indexed

Technology

30.34%

Fidelity India

42.35%

Indexed

Technology

22.19%

Indexed North

American Equity

19.45%

Fidelity India

24.44%

Property

Portfolio

Fidelity Managed

22.71%

Fidelity Man

11.31%

Fidelity India

78.98%

Fidelity Man

32.25%

Indexed

European Gilts

Fidelity India

25.19%

Fidelity Spec

28.62%

Fidel Glob Prop

Shares

36.49%

Indexed

Japanese Equity

21.55%

Indexed Pacific

Equity

18.82%

Fidelity India

24.41%

Fidelity Multi

Asset Str Def

Fidelity Global

Prop Shares

19.90%

Fidelity Euro

Inflation Link

Indexed

Emerging Market

Equity

73.05%

Indexed

Technology

32.05%

Indexed Fixed

Interest

Fidel Glob Prop

Shares

24.61%

Indexed

Japanese Equity

24.42%

Indexed

Technology

35.57%

Fidelity Euro

20.60%

IL/Setanta Global

Equity

16.02%

Indexed

Emerging Market

Equity

19.45%

UK Property

Infrastructure

Equities

18.03%

Indexed

Technology

Indexed

Japanese Equity

-25.03%

Indexed Pacific

Equity

67.43%

Indexed Pacific

Equity

29.10%

Indexed UK

Equity

Fidelity EMEA

23.14%

Indexed North

American Equity

22.26%

Fidelity China

28.98%

Fidelity Spec

18.58%

Fidelity EMEA

15.50%

Indexed

Technology

16.72%

Indexed

Technology

Indexed North

American Equity

17.37%

Property

Portfolio

Property

Portfolio

-27.62%

Fidelity China

64.48%

Fidel Glob Prop

Shares

28.64%

Indexed Euro

Short Dated Bond

Indexed Ireland

23.08%

Property

Portfolio

21.62%

Infrastructure

Equities

28.55%

Property

Portfolio

17.18%

Infrastructure

Equities

15.00%

Multi Asset

Portfolio 6

14.71%

Indexed

European Gilts

Indexed

European Gilts

15.40%

Indexed

European Equity

UK Property

-31.70%

Indexed

Technology

50.89%

Indexed

Emerging Market

Equity

28.08%

UK Property

Indexed Pacific

Equity

20.56%

Consensus Equity

20.38%

Indexed North

American Equity

28.51%

Fidelity Man

15.05%

IL/Setanta

Managed

12.33%

Indexed Pacific

Equity

13.28%

Indexed Fixed

Interest

Indexed Ethical

Global Equity

14.73%

Indexed North

American Equity

-34.11%

Fidelity Euro

45.14%

Fidelity India

27.78%

Indexed Euro

Corporate Bond

Indexed

European Equity

20.15%

Fidelity Man

19.52%

Property

Portfolio

21.68%

UK Property

14.29%

Indexed World

Equity Fd

11.69%

Fidelity EMEA

13.12%

Fidelity Global

Spec Sitns

14.22%

Fidelity Spec

Consensus

-34.72%

Fidelity Spec

43.14%

Indexed

Commodities

25.54%

Indexed Ireland

Fidelity India

19.97%

Indexed World

Equity Fd

19.06%

IL/Setanta

Managed

20.44%

Fidelity China

11.86%

IL/Setanta Equity

Dividend

11.66%

Fidelity Spec

12.53%

Fidelity India

Fidelity Euro

13.85%

Indexed Fixed

Interest

Active Managed

-37.46%

Fidelity Man

40.68%

Fidelity Spec

24.40%

Infrastructure

Equities

Fidelity Man

18.16%

Fidelity Euro

18.57%

Indexed

European Gilts

20.43%

IL/Setanta Equity

Dividend

11.73%

Multi Asset

Portfolio 6

11.23%

Fidelity Man

11.99%

Indexed EU Short

Dated Bond

Consensus Equity

EARNINGS DRIVE MARKETS

MARKET CONTROVERSIES ARE A CONSTANT

--- S&P500 (LHS)

--- Earnings Per Share -RHS

BEWARE HEADLINES – THE DEATH OF EQUITIES

February 2000

The Boom – How Prosperity is reshaping the American Economy

August 13, 1979

The Death of Equities

SOCIAL MEDIA CAN MOVE MARKETS

KEY LEARNINGS I

Diversification is important –

assets have

different characteristics

Earnings are the driver of

shares prices in the long run

Tune out the Noise!

ARE MARKETS EFFICIENT?ACTIVE V PASSIVE

ARE MARKETS EFFICIENT?

▪ Efficient Markets Hypothesis (EMH)

▪ Yes and No

▪ Efficient Markets mean all information about a stock is in the price already and assets are fairly priced

▪ Is there any point to doing Fundamental Analysis?

▪ Probably are efficient in the long term but not so in the short term – this is where dislocations and bubbles occur

ACTIVE OR PASSIVE? PASSIVE

▪ Passive Approach is buy all of the stocks in an index

and not conduct fundamental analysis

▪ Tracking error is a key skill here

▪ Replicate the benchmark and get the benchmark return

▪ Majority of active managers underperform the major

indices

ACTIVE OR PASSIVE? ACTIVE

▪ But some managers do outperform markets

▪ Any manager can outperform over 1 year but can

they do it consistently?

▪ Today there is no information advantage but you

can have a knowledge advantage – most

investors don’t think long term

BEHAVIOURAL FINANCE

BEHAVIOUR – WHAT INFLUENCES OUR DECISIONS?

INVESTOR BEHAVIOUR

Loss Aversion

Investors are more averse to losses

than to potential returns

Narrow Framing

Making decisions without considering

all implications

Mental Accounting

Taking undue risk in one area and

avoiding rational risk in another

Diversification

Seeking to reduce risk, but simply

using different sources

Herding

Copying the behaviour of others even

in the face of unfavourable outcomes

Regret

Treating errors of commission more

seriously than errors of omission

Media Response

Tendency to react to news without

reasonable examination

Confirmation Bias

Accepting information that confirms

already-held views

Anchoring

Relating to the familiar experiences, even

when inappropriate

VOLATILITY HAS A DIRTY NAME

Seeing through the noise:

▪ Markets suffered double-digit declines in 22 of the last 39 years, yet still ended those years with positive returns 75%

of the time.

S&P 500 intra-year declines vs. calendar year returns

Despite average intra-year drops of 13.9%, annual returns positive in 29 of 39 years

Source: Factset, Standard & Poor’s, J.P. Morgan Asset Management

TIMING THE MARKET CAN BE COSTLY

Annual Price Returns S&P 500 1996-2016

CAGR Excluding 10 best days Excuding 20 best days Excluding 30 best days Excluding 40 best days

TIMING THE MARKET CAN BE COSTLY

Average Stock Fund Return vs. Average Stock Fund Investor Return

Average Stock Fund Return Average Stock Fund Investor Return

1994-2013

Investor

Behaviour Penalty

• As Warren Buffett wrote in 1991, “the stock market serves as a relocation centre at which money is moved

from the active to the patient.”

LESSONS FROM INVESTMENT MASTERS

KEY LEARNINGS II

Equities are the best performing

asset class over timeVolatility is not a bad thing Timing the market is not

possible consistently

IRISH LIFE FUND SOLUTIONS

OUR FUND MANAGERS

Expertise in designing MAPS, Ireland’s largest retail multi-asset fund (over €5bn AUM, Jun 19)

Strong background in Quantitative Solutions

Over €79bn in assets under management

Track record of long-term successful partnerships

Award winning team: Irish Pensions 2018 Passive and Property Manager of the Year

Ireland’s leading active fund manager, focus on long-term value investing

Recognised by leading global consultants, Morningstar rated funds

Over €10bn in assets under management

Track record of consistent outperformance irrespective of market conditions

Award winning team: Irish Pensions 2018 Equities Manager of the Year

Global active investment fund manager with over $412bn assets under management

Multiple award winning team: 31 Morningstar awards, 109 Thomson Reuters Lipper fund awards in 12 countries

Over 230 investment researchers with a focus on bottom-up research (17,000 company meetings or one every 10 minutes on average)

Broad range of investment strategies (multi-asset, regional, thematic etc.)

IRISH LIFE MAPS

Irish Life MAPS – Four Pillars to Support Customers

Choice Smoother returns Risk management Peace of mindDiversification within:▪ Asset Classes▪ Managers▪ Strategies▪ Currencies▪ Geographies▪ Option Strategy

▪ Range of 5 Risk Rated Funds

▪ Annual Review▪ Rebalancing▪ DSC▪ Systematic

Currency Hedge▪ Low Volatility▪ Equity Option

Strategy

▪ Performance▪ Range of

Returns▪ ILIM▪ ESG

SMART BETA – QUANTS FACTOR-BASED INVESTING

▪ Hybrid of Active & Passive

▪ Capture market inefficiencies in a systematic way

▪ Not market weighted may be instead ranked by volatility, dividends or equal weighted

ILIM Quantitative Strategies Group set up in 1996

Factor

Risk Control strategies

– DSC, Equity Options

Global Low

Volatility

Currency

Hedging

SETANTA – DEDICATED VALUE INVESTORS

Core Principals Evidence

Selective

Risk Averse

Long Term

Deep Research

Consistent Application

Incentive Structure

High Active Share

Strong risk-adjusted returns

Low Portfolio Turnover

Established 1998Owned by Great West Lifeco

Part of Irish Life Group

Focused ExpertiseStock pickers, differentiated portfolios

“Value is more than a number”

Knowledge advantage

LONG TERM TIME HORIZON: WHY DOES IT

MATTER?

Current Setanta Global Equity Portfolio

➢ 87 holdings

➢ 51 held for > 5 years

➢ Accounts for 64% of portfolio

➢ Companies have grown in value

➢ Our competition?

➢ Holding period typically <1 year

➢ Alignment of interest:

➢ 80% incentives - 3/5 year performance

5 year time period from 15th May 2012 to 15th May 2017

FIDELITY – GLOBAL ACTIVE

DIVERSIFIED

OUTCOME FOCUSED

FLEXIBLE

Sources of return, risk and yield

should be uncorrelatedPortfolios positioned to mitigate event

risk and manage volatility

RESEARCH-LED

RISK-CONSCIOUS

Clients’ specific needs at the centre of our approach

A range of strategies, evolving to meet client requirements

Investors must deal with

unpredictable and uncertain markets

Dynamic asset allocation to generate stable outcomes through the cycle

A broad range of research disciplines produces uncorrelated

Well-resourced research team, with a variety of specialisms and expertise

Investors must take a degree of risk

but limit the risk of permanent capital loss

Taking risk intelligently and consciously is key

Investment PhilosophyCore beliefs and their applications

KEY LEARNINGS III

Long term time horizon Active & Passive approaches are

not mutually exclusive

Smart Beta is a combination

of both

CAN AN IRISH MANAGER COMPETE?

MULTIPLE AWARD WINNING TEAMS WITH

STRONG TRACK RECORDS

Fidelity World’s Jeremy Podger –

track record of strong

outperformance

ILIM Indexation process

A-rated by leading

international consultants

Setanta Global Equity

outperforms the index in 16

of 18 years

HOW WE MANAGE MONEY

IRISH LIFE MAPS – INVESTMENT PROCESS

Idea Generation

▪ Quantitative Strategies Group

▪ Alternative Strategies Team

▪ Asset Allocation Committee

Portfolio Solutions Team

▪ Annual Portfolio Modelling Exercise

▪ Determine what makes sense from a portfolio perspective

▪ Size positions appropriately

Asset Allocation Committee▪ Proposed changes presented to the

Asset Allocation Committee

CIO Sign-Off

A robust and structured solution review process

IRISH LIFE MAPS – MANAGING RISK

Deliver a return commensurate with each funds targeted risk rating and within the expected range of returns

• Smoother Journey• Manage for extreme

events• Returns within an

expected range

Core objective: to deliver risk-controlled investment returns

PROPERTY

EQUITIES

ALTERNATIVES

Fund Name MAP2 MAP3 MAP4 MAP5 MAP6

Emerging Market Shares 0% 0% 0% 10% 32%

Low Volatility Shares 5% 10% 15% 11% 6.5%

All Country World Index 11% 22% 33% 45% 45%

Equity Option Strategy 3% 6% 9% 12% 5%

Infrastructure Equities 1% 2% 3% 2% 1.5%

EQUITIES 20% 40% 60% 80% 90%

Euro Corporate Bonds 30% 19% 3.5% 0% 0%

Euro Government Bonds 8.5% 0% 0% 0% 0%

Emerging Market Debt 0% 3% 3.5% 0% 0%

Global High Yield Bonds 3.5% 3.5% 3.5% 0% 0%

BONDS 42% 25.5% 10.5% 0% 0%

EXTERNAL MANAGERS 22% 22% 22% 12.5% 5%

IRISH PROPERTY 6% 7.5% 7.5% 7.5% 5%

CASH 10% 5% 0% 0% 0%

RISK CONTROL

STRATEGIES

Oct 2015▪ Underweight in emerging

market equities

Nov 2015▪ Max property allocation

Dec 2015▪ Underweight

government bonds ▪ Overweight corporate

Jun 2014▪ Property introduced▪ Low Vol Equities replaces Min

Vol Equities

Jan 2017▪ Overweight equities▪ Increased underweight

to bonds

Feb 2017▪ Reduced cash

overweight

Mar 2017▪ Introduced equity

option strategy▪ Extended low volatility

to emerging market equities

Jan 2016▪ Partial currency hedge ▪ DSC extended to include

emerging market equities

Mar 2016▪ DSC triggered

Jun 2016▪ Underweight global equities

Dec 2016▪ Neutral global equities▪ Reduced overweight to

property

2015 2017

2018▪ DSC triggered in

March and October▪ Introduce

infrastructure shares

▪ Residential property added

SETANTA INCOME OPPORTUNITIES FUND

› A conservative, value strategy

› Appeals to investors seeking above average yield without putting more capital at risk

› Lower volatility than a traditional balanced fund

Description

Objectives are:

› To generate a targeted income for the investor (measured by the net yield on the Fund)

› To maintain the real value of the portfolio (European Harmonised Index of Consumer Prices

(HICP) over 5 year period)

Second Objective:

Capital Growth

Assets meet value criteria

Long term oriented

Risk: Probability of permanent

impairment of capital

First Objective:

Income Generation

Dividend Stocks

Option Income

Property Income

Bond Income

HEADLINE 02

Multi Asset Portfolio Objectives

Investment Process

› Irish Property Crisis (Part 1)

› Fund invested in office and retail assets in 2012 after property collapse.

› Eurozone Sovereign Crisis

› Fund buys peripheral Eurozone debt when mispriced (2010-2011).

› Irish Property Crisis (Part 2)

› Fund invests in residential assets to backdrop of scarce capital for required investment (2014)

› Oil Price Crash

› Fund invests in bonds of oil exposed companies (2016).

› Emerging Market Fears

› Fund takes advantage to buy positions in bonds backed by strong companies (Turkey, Mexico 2017-2018)

Opportunistic Approach to Asset Selection

High Yield Equities

• Strategy filters broader Setanta philosophy

• Seek stocks with both capacity and commitment to pay dividends

• Expect stocks to have sustainable dividend prospects

• Some sectors and regions offer better income prospects, but fund managers believe in sensible

diversification

• Many ideas in common with the Setanta Global Equity Fund

Defensive in Times of Strife

Source: Setanta estimates; based on CLI Income Opportunities Fund. Periods shown are those of cumulative declines of greater than 5% in which all individual months record

declines.

FIDELITY WORLD FUND

Global equity fund with a developed market focus

Concentrated & active portfolio

Stock selection backed by depth of FI research team

Portfolio managed to deliver across the cycle

Long-term career track record

4* Morningstar rating

Outperformance of global indices and peers over a long industry tenure

Indexed

Jeremy Podger MSCI World MSCI ACWI IA Sector Average

Past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations. For fundsthat invest in overseas markets, changes in currency exchange rates may affect the value ofan investment.

Source: Morningstar Direct. Basis: bid-bid, net income reinvested at UK basic rate of tax in UK sterling to 31 May 2019. Jeremy Podger's combined track record of Investec Global Strategy I Acc GBP (01 April 1996 –31 August 2003), Threadneedle Global Select Z Acc GBP (1 September 2003 – 29 February 2012) and Fidelity Global Special Situations W Acc (1 March 2012 onwards). Note that the MSCI ACWI Gross Return (GR) index is used as the Net Return (NR) index does not have sufficient history.

Ann. Net Excess Return vs. MSCI ACWI:

Ann. Net Excess Return vs. MSCI World:

Ann. Net Excess Return vs. Sector Average:

% of Peers Beaten: 91%

Ann. Net Excess Return vs. MSCI ACWI: 0.8%

Ann. Net Excess Return vs. MSCI World: 2.1%

Ann. Net Excess Return vs. Sector Average: 1.5%

1000Investec Global Free Enterprise Threadneedle Global Select

10.1% p.a.

7.8% p.a.

7.4% p.a.

6.4% p.a.

Fidelity

Ann. Net Excess Return vs. MSCI ACWI: 1.7%

Ann. Net Excess Return vs. MSCI World: 1.4%

Ann. Net Excess Return vs. Sector Average: 3.8%

1000Threadneedle Global Select

Ratings

JEREMY PODGER – TRACK RECORD

INVESTMENT QUIZ

THE NEXT INVESTMENT MASTER?

Brisbane

• Is the next Warren Buffett

in the room?

MARKET OUTLOOK

MARKET RETURNS

Source: Bloomberg

▪ Equity rebound from 2018 correction

▪ Policy pivot by US Fed and other central banks supports both equities and bonds

▪ Trade and growth concerns have contributed to ongoing volatility and equity draw downs ytd

▪ Global bonds higher ytd on growth concerns, persistent low inflation and more dovish central banks

Market performance YTD to 31st October

16.915.2

18.219.8

World Equities North America Pacific ex Japan Japan Emerging Market Rest of Europe UK Eurozone Bond 5yr+

Eurozone Bond 1-5 yr

Investment GradeCorporate

EM Debt Euro

Local Euro

PERFORMANCE

▪ Volatility remains a feature in equity markets

▪ Dovish central banks supported moves to new all time highs this year

▪ Growth concerns and trade war have contributed to draw downs in 2019

MSCI AC World

Source: Bloomberg, October 2019

MSCI AC World

Trade fears

Dovish central banksGrowth fears

Trade hopes

GLOBAL TRADE / BREXIT

TRADE BREXIT

▪ US and China have agreed a ‘mini’ trade deal

▪ Deal prevents further escalation of trade tensions

▪ Previously planned tariff increases being suspended

▪ China has agreed to increase imports of US agricultural goods

▪ Comprehensive deal however does not seem likely in the short term

▪ Existing tariffs to remain in place

▪ No firm agreements on intellectual property/technology

transfer/Chinese industrial subsidies/enforcement mechanisms

▪ Without a full resolution of trade dispute, uncertainties are expected

to remain a drag on growth

▪ New Withdrawal deal agreed between the UK and EU

▪ Deal not yet ratified by UK parliament

▪ As a result, Article 50 extended to January 31st

▪ UK general election to be held on 12th December

▪ Polls suggest Conservatives will win a clear majority

▪ A Conservative victory would result in new Withdrawal deal being

passed

▪ UK expected to officially leave the EU on 31st January

EQUITY MARKET VALUATIONS

Source: JP Morgan, Bloomberg October 2019

▪ Equity valuations are at or above long term average levels

▪ Equity P/e valuation now at the long term average

▪ Market rebound has caused P/e multiple to rise from December lows

▪ Equities expensive on price/book and yield basis v’s long term averages

Global Equity 12 month Fwd P/e Global Dividend Yield

88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

MSCI AC World 12m Fwd P/E Average +1Stdev -1Stdev

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18

MSCI World Dividend Yield Median +1Stdev -1Stdev

EQUITIES: SUMMARY OUTLOOK

Outlook

Outlook hinges on economic and

earnings backdrop

2019 global GDP growth

forecasts lowered to 2.6%

Increased fears of growth

slowdown could lead to fall in

equity markets

Equity valuations viewed as

being ‘full’ at current levels

Base case is limited equity market

upside on a 12 month view with

risks skewed to the downside

Volatility to remain a feature

given various risks

EUROZONE BOND YIELDS

▪ Yields still close to all-time lows

▪ Peripheral spreads have narrowed on easing of Italian political tensions and expectations of renewed asset purchases by the ECB

▪ Ireland seen as semi core but has been sensitive to Brexit outcome

Eurozone Yields

-0.66-0.61

-0.38-0.38

Germany France Spain Italy Ireland

Eurozone Yields2 yr 5 yr 10 yr

EUROZONE INFLATION

▪ Eurozone inflation has been persistently weak

▪ Headline inflation at 0.7% y/y while core at 1.1% y/y

▪ Long term inflation expectations have declined and are close to all time lows

▪ Failure of inflation and inflation expectations to rise has contributed to the ECB providing additional policy accommodation

Eurozone Inflation Eurozone Inflation Expectations

31/12/2015 31/12/2016 31/12/2017 31/12/2018

Headline CPI Core CPI Target

12 MONTH FORECASTS

12 Month forecasts Fed funds

10 year US yield ECB 10 Year Germany

Peripheral bond

spreads

Current 1.50% to 1.75% 1.69%-0.5% deposit rate; QE

reinvestments -0.38%

Italy +137

Spain +65

Ireland +41

12 Months 1.50% to 1.75% 1.00% to 1.80%

-0.5% deposit rate; QE

reinvestments; new

LTRO’s; restart QE

-1.00% to -0.20%

Italy +125/200

Spain +55/125

Ireland +35/75

Source: Bloomberg September 2019

▪ Bond trading ranges have

shifted to the downside

given growth/inflation

concerns and dovish

central banks

▪ Growth outcome and

central bank policies will be

key drivers of yield levels

▪ Core yield upside in

Europe capped by

additional policy

accommodation from the

ECB/low growth/low

inflation

▪ Base case is yields remain

low due to increased policy

accommodation and

growth concerns

▪ German 10 year yield:

-0.60% in 12 months

▪ US 10 year yield: 1.30%

in 12 months

FIDELITY: THE NEXT FIVE YEARS

SUMMARY

Research

& Selection

Strong risk/return

profile

Research

Active &

Indexed

Long-term track record

Flagship funds

Diversification

Risk management

DISCLAIMER

This material is intended for the use of institutional and other professional investors.

This document is for the use of the addressees only and may not be reproduced, redistributed or passed on to any other person or

published, in whole or in part, for any purpose, without the prior, written consent of Irish Life Investment Managers. The manner of

distributing this document may be restricted by law or regulation in certain countries, including the United States. Persons into whose

possession this document may come are required to inform themselves about and to observe such restrictions. By accepting this

document, a recipient hereof agrees to be bound by the foregoing limitations.

This document is for information purposes only. The information contained herein does not constitute the provision of investment advice.

It is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the

financial instruments and/or securities mentioned in this document and will not form the basis or part of any contract or commitment

whatsoever.

Investors should seek independent professional advice and draw their own conclusions regarding suitability of any transaction

including the economic benefits, risk, legal, regulatory, credit, accounting and tax implications.

Past performance, forecasts and simulated performance may not be a reliable guide to future performance. Investments may fall as well

as rise.

Irish Life Investment Managers Limited is regulated by the Central Bank of Ireland.

Irish Life Assurance plc is regulated by the Central Bank of Ireland.

Setanta Asset Management is regulated by the Central Bank of Ireland.

Fidelity International is regulated by the Financial Conduct Authority.

THANK YOU

Irish Life Investment Managers Limited is regulated by the Central Bank of Ireland

Irish Life Assurance plc. is regulated by the Central Bank of Ireland

Past performance, forecasts and simulated performance may not be a reliable guide to future performance

Investments may fall as well as rise

Changes in currency exchange rates may have an adverse effect on the value, price or income of the product

This material is for information only and does not constitute an offer or recommendation to buy or sell any investment and has not been prepared

based on the financial needs or objectives of any particular person. It is intended for the use of institutional and other professional investors

Tel 353 (0)1 704 2000Irish Life Brokerage

Beresford Court

Beresford Place

Dublin 1

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