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Keeping a Strong Municipal Core Amid Volatility

2

Ken LeechChief Investment Officer

2Q20 Market & Strategy UpdateApril 7, 2020

3

Coronavirus Shock

As of 06 Apr 20

Sharpest monthly decline in risk assets on record

Both a demand and supply shock

Government-mandated economic shutdown experiment

Extent and length of growth shortfall unknown

Oil price adds deflationary impulse

Not GFC; while timing is unknown, the growth shortfall should prove transitory

4

Forecast as of 05 Jan 20

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3.5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2019 2020 2021 2022

Perce

nt

Wall Street's Growth Forecast

Forecast

Source: Wall Street Bank, Western Asset. As of 06 Apr 20

Question as of 06 Apr 20

US Growth Dramatically Downgraded for 2020

5

Inflation – Expectations and Trends

10-Year Breakeven Inflation (%)

Australia 0.63

Canada 0.49

Germany 0.50

Japan -0.16

US 1.16Source: Bloomberg. As of 06 Apr 20

-3

-2

-1

0

1

2

3

4

2001 2004 2007 2010 2013 2016 2019

Perce

nt

Breakeven Inflation Rate for 5-Year TIPS

Fed's Inflation Target of 2%

Source: Gavekal. As of 03 Apr 20

Greenspan started to hike

6

06 Apr 20

31 Dec 19

20

25

30

35

40

45

50

55

60

65

Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 Dec 24 Dec 25 Dec 26 Dec 27 Dec 28 Dec 29 Dec 30

WTI

Oil F

uture

s Pric

e

Monthly Futures Contract Dates

Market Forecasts Oil Will Recover Long-Dated Oil Down $3 From End-2019 Levels

Oil Price War Has Added a Deflationary Shock

Source: Bloomberg. As of 06 Apr 20

7

OPEC Supply (left)

Global Crude Demand (right)

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-1.5

-1.0

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2.5

Mar97

Jun97

Sep97

Dec97

Mar98

Jun98

Sep98

Dec98

Mar99

Jun99

Sep99

Dec99

Change from Q3-1997, Millions of Barrels per DayYear

-ove

r-Yea

r Cha

nge,

Millio

ns of

Bar

rels

per D

ay

Oil Demand and Supply During the Asian Financial Crisis

Oil Prices Recovered With Demand Following the Asian Financial Crisis

Source: IEA, DOE, Bloomberg. As of 31 Dec 99

Spot Brent

1-Year Fwd Brent

0

5

10

15

20

25

30

Nov97

Feb98

May98

Aug98

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Feb99

May99

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Nov99

Dolla

rs

Oil Prices During the Asian Financial Crisis

8

0

10

20

30

40

50

60

70

80

90

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Index

Volatility Index (VIX)


Equity Stress Reaches GFC Levels

9

2468

10121416

2012 2013 2014 2015 2016 2017 2018 2019 2020

Basis

Poin

ts (2

1 day

avg.)

Median S&P 500 Stock Bid-Ask Spread

Source: Goldman Sachs. As of 02 Apr 20

2.5

3.5

4.5

5.5

6.5

7.5

8.5

2012 2013 2014 2015 2016 2017 2018 2019 2020

Basis

Poin

ts (2

1 day

avg.)

Median Eurostoxx Stock Bid-Ask Spread


579

1113151719

2012 2013 2014 2015 2016 2017 2018 2019 2020

Basis

Poin

ts (2

1 day

avg.)

Median FTSE Stock Bid-Ask Spread


Global Equity Liquidity Evaporated

-100-50

050

100150200250300

2008 2010 2012 2014 2016 2018 2020

Basis

Poin

ts

Corporate Overnight Indexed Swap3M Financial CP-OIS 3M Nonfinancial CP-OIS


10

Agency and AAA Sectors Collapsed

-250

255075

100125150175200

2008 2010 2012 2014 2016 2018 2020

Basis

Poin

ts

Agency MBS Option-Adjusted Spread

Source: Bloomberg,. As of 02 Apr 20

75

125

175

225

275

325

2012 2014 2016 2018 2020

Basis

Poin

ts

AAA CLO Option-Adjusted Spread


0

200

400

600

800

1,000

1,200

2008 2010 2012 2014 2016 2018 2020

Basis

Poin

ts

AAA ABS Option-Adjusted Spread


11

-100

-50

0

50

100

150

Mar15

Jun15

Sep15

Dec15

Mar16

Jun16

Sep16

Dec16

Mar17

Jun17

Sep17

Dec17

Mar18

Jun18

Sep18

Dec18

Mar19

Jun19

Sep19

Dec19

Mar20

Basis

Poin

ts

Spread Between Option-Adjusted Spread on 10+ USD Industrials and 1-5 Year USD Industrials

Source: Bloomberg. As of 31 Mar 20

Credit Curve InversionFront-end spreads have meaningfully underperformed.

12

COVID-19 Update

The virus is extremely contagious and hard to predict

Modelling error has been high, as the denominator is still unknown

Policy tradeoffs between saving lives and saving the economy

Testing is the key to the puzzle

A vaccine would be a game changer, but is likely many months away

13

40

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100

120

140

160

0

20

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60

80

100

120

22 Jan 20 05 Feb 20 19 Feb 20 04 Mar 20 18 Mar 20 01 Apr 20

Basis PointsNu

mber

of C

ountr

ies

COVID-19 and IG SpreadsNumber of Countries with Cumulative Daily Confirmed COVID-19 Case Growth >10% (left)CDX IG 5y Index (right)

Source: JP Morgan, Bloomberg. As of 06 Apr 20

Market Is Following the Path of the Virus

14

Recent Virus Data in Italy Is Encouraging

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01 Mar 05 Mar 09 Mar 13 Mar 17 Mar 21 Mar 25 Mar 29 Mar 02 Apr

New DeathsNew

Case

s

Italy New Coronavirus Cases Italy New Coronavirus Deaths


15

0

10

20

30

40

50

60

Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20

Beds

(tho

usan

ds)

IHME Forecast: COVID-19 ICU Beds Needed95% Confidence IntervalForecast - Apr 6Forecast - Mar 31

Source: Institute for Health Metrics and Evaluation. As of 06 Apr 20

IHME Forecast Constantly Subject to Substantial Revisions

05 Apr 20

01 Apr 20

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

31 Mar 20 14 Apr 20 28 Apr 20 12 May 20

Percent of US Population Past Hospitalization Peak

Source: Institute for Health Metrics and Evaluation. As of 05 Apr 20

16

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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

Perce

nt

3-Day Growth in Fatalities Starting When National Lockdowns Began

Hubei Italy Spain US UK France Germany

Source: Bloomberg, Western Asset. As of 06 Apr 20

Fatality Growth Rates Converging to Hubei Levels

17

0.00.20.40.60.81.01.21.4

05 Mar 20 12 Mar 20 19 Mar 20 26 Mar 20

Perce

nt

United StatesUnited StatesUnited States, ex. New YorkNew York

Source: Gavekal. As of 30 Mar 20

0

50

100

150

200

250

26 Jan 20 09 Feb 20 23 Feb 20 08 Mar 20 22 Mar 20

Perce

nt

EuropeFrance GermanyItaly SpainUK

Source: World Health Organization, Gavekal. As of 03 Apr 20

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0.8

1.0

01 Feb 20 15 Feb 20 29 Feb 20 14 Mar 20 28 Mar 20

Perce

nt

South Korea and ChinaSouth KoreaChinaChina ex Hubei


The Virus Map Is Looking Similar GloballyJolt of Confirmed COVID-19 Cases (Change in Growth Rates)

18

Coronavirus Task Force Base Case

The impact of COVID-19 is looking more like the Spanish flu than SARS

Peak US health care utilization suggests containment measures will be in place through at least early May

After peak hospitalizations, an opportunity to relax containment, starting in late Q2 Concerns over reinfection will slow relaxation and keep borders closed

Economic recovery starts in Q3 and gains steam in Q4 China as a case study – economic activity is back to 70-80% of pre-virus levels two months after lockdown Consumer spending recovery may lag – travel/leisure/sports impacted

Health care/technology – more of a 2021 event Increased virus and antibody testing should help the return to work Vaccines and therapeutics – not expected until 2021

Risks we are monitoring Threat of second waves of infection – would prolong containment measures and economic recovery Changes in virus behavior – mutation could increase severity, but more asymptomatic cases could improve herd

immunity

19

A Different Sort of Crisis?

Length and depth of downdraft unknown

Strong likelihood for eventual recovery

What form might future policy take and how long might it be needed?

Global monetary and fiscal stimulus have accelerated and will continue to accelerate

20

0

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1400

1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017

Thou

sand

s

Weekly Initial Unemployment Insurance Claims7,000 Most

Recent 6,648k

Source: US Department of Labor. As of 02 Apr 20

US Growth Falling Fast and Furious

21

Effects of Spanish Flu Were Quite Short-Lived

Source: Wikipedia, National Bureau of Economic Research

The decline in GNP shown in the chart coincides BOTH with the deadliest months of the Spanish flu and also the end of WWI. The demobilization following the end of fighting would typically, by itself, be associated with recession, so it is hard to disentangle the effects of war’s end and pandemic on economic output. Spanish flu is thought to have infected 500 million people, 25% of world population then, with associated fatalities of 17 to 50

million, possibly as high as 100 million. US incidence estimated at 450,000 deaths. Pandemic lasted from Jan 1918 through Dec 1920 worldwide. The “second wave,” starting in August 1918 proved to be more

deadly. “After the lethal second wave struck in late 1918, new cases dropped abruptly – almost to nothing after the peak in the second

wave. In Philadelphia, for example, 4,597 people died in the week ending 16 October, but by 11 November, influenza had almost disappeared from the city.”

200

220

240

260

1917 1918 1919

Real US GNP During Spanish Flu Pandemic

USD

(billio

n 19

72 d

ollar

)

22

Very Different Recession

No physical destruction

Self-imposed shutdowns

Monetary and fiscal policy completely supportive

23

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Jan 20 Feb 20 Mar 20 Apr 20

Year

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r-Yea

r Per

cent

Chan

ge

Economy Slowly NormalizingProperty Sales Volume in 30 Major CitiesCoal Use of 6 Major Power ProducersTraffic Congestion Index, 100 City Median


Manufacturing

Service

25

30

35

40

45

50

55

60

Jan 19 Mar 19 May 19 Jul 19 Sep 19 Nov 19 Jan 20 Mar 20

China PMI

Source: Bloomberg. As of 31 Mar 20

China Outlook: Nascent Signs of Economic Normalization

Despite abating coronavirus outbreak, China maintains systematic control

March leading indicators are encouraging

Financial market conditions continue to be growth-supportive

Fiscal policy is also becoming supportive

24

t=4t=5

94

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106

t=0 t=1 t=2 t=3 t=4 t=5 t=6 t=7 t=8

GDP

Index

Global GDP - Recessions ComparedCOVID-19 World (t0=Q419) GFC World (t0=Q208)

Source: UBS, Haver, JP Morgan. As of 31 Mar 20

How Well Will the Global Economy Hold Up?

25

0

2

4

6

8

10

12

Public HealthStudentLoan/Others

State & LocalGov't Aid

Individuals(checks)

SmallBusinesses

(loans/grants)

LargeCorporations

(loans)

Total

Perce

ntPercent of GDP

Source: Gavekal

The CARES Act

26

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25

50

75

100

125

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175

200

Spain Italy Germany France

Euro

(billi

ons)

ECB Asset Purchases vs. Promised Direct Fiscal Spending So FarDirect COVID-19 Fiscal Measures Announced Potential ECB Purchase

Source: Gavekal

Europe Responds Forcefully

27

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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nt

Change in Cyclically Adjusted Primary Fiscal Balance as % Global GDPROW EM ex China and IndiaEurozone ChinaUS WorldPre-COVID-19 World

Loosening

Tightening

Source: UBS, Haver, European Commission, CBO. As of 31 Mar 20

Will the Enormity of Global Stimulus Prove Sufficient?

28

Fed Cut Rates Extremely Fast, Will Raise Rates Extremely Slowly

“That’s actually one of the main things we’re trying to do by assuring the flow of credit in the economy and keeping rates low, is to assure that that rebound, when it does come, is as vigorous as possible.”

– Chair Powell, March 26, 2020 Appearance on The Today Show

0

1

2

3

4

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6

7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Perce

nt

Federal Funds Rate

Source: Federal Reserve, As of 31 Mar 20

29

0

20

40

60

80

100

120

02 M

ar 20

04 M

ar 20

06 M

ar 20

10 M

ar 20

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ar 20

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ar 20

20 M

ar 20

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ar 20

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ar 20

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ar 20

01 A

pr 20

USD

Billio

ns

Daily Federal Reserve PurchasesTreasury Coupons Treasury TIPSTreasury Bills Treasury FRNsMBS (Agency)

-4-202468

Mar 19 Jun 19 Sep 19 Dec 19 Mar 20

Basis

Poin

ts

Off-the-Run vs. On-the-Run Spreads in Treasuries(Triple Old 10-year vs. Current 10-year Treasury Yield)

Fed Is Providing Liquidity “As Needed”Treasury Market Showing Signs of Stabilization

Source: Bloomberg, Federal Reserve. As of 31 Mar 20

020406080

100120140160180

Jan 18 Jul 18 Jan 19 Jul 19 Jan 20

Index

Implied Volatility in Treasury Yields (MOVE Index)

30

Fed’s Credit Facilities Will Be a Meaningful Intervention


“When it comes to this lending, we’re not going to run out of ammunition. That doesn’t happen.”

“The main thing we’re doing now is really with our lending programs. That’s the principle thing we’re doing now to support the economy, is through that channel.”

- Chair Powell, March 26, 2020 Appearance on The Today Show

Programs Primary Market Corporate Credit Facility (PMCCF), Secondary Market Corporate Credit Facility (SMCCF), Term Asset-Backed Securities Loan Facility (TALF), Money Market Mutual Fund Liquidity Facility (MMLF), Commercial Paper Funding Facility (CPFF), and a “Main Street Lending Program”

Structure Special Purpose Vehicles: US Treasury in first loss position, Federal Reserve providing financing. Leverage is 10:1

Available Resources Initial Capital from Exchanges Stabilization Fund: $50 billionAdditional Capital provided by CARES Act: $450 billionEventual Size: $4+ trillion (assuming 10:1 leverage)

Federal Reserve Credit Lending Programs

31

Fed Is Buying IG Corporate Credit for the First Time


Secondary Market Corporate Credit Facility (SMCCF) Eligibility: BBB- and above, <5 years to maturity, max 10% per issuer

– Eligibility likely to be expanded with additional resources from the CARES Act First time Fed has supported IG credit; first time Fed is supporting secondary market for credit Fed is an outright buyer (even as prices recover, Fed to keep buying) Likely to include bank debt Direct support for credit and financial conditions

32Source: Bloomberg, J.P. Morgan. As of 31 Mar 20

Residential Mortgage Spreads

March 15 – Fed announced $200 billion in buying in coming months

March 23 – Fed announced QE and has purchased more than $343 billion

March 27 – CARES Act passed

60 bps

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2.5-500

50100150200250

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

USD (Trillions)Basis

Poin

ts

Agency MBS OAS (left) Fed MBS Balance Sheet (Inverted) (right)$ 2 Trillion ProjectedFed MBS Balance Sheet

0

10

20

30

40

50

02 Mar 20 09 Mar 20 16 Mar 20 23 Mar 20 30 Mar 20

USD

(billi

ons)

Fed's Agency MBS Purchases

33

0

5

10

15

20

25

1945 1955 1965 1975 1985 1995 2005 2015

Perce

nt

Default Rates, Investment-Grade Corporates

5-Year Cumulative Rate of Historical Defaults,Investment-Grade Corporates²

5-Year Implied Cumulative Default Rate Based on 40% Recovery by Market Pricing 01 Apr 20: 20.68%

Source: Moody's, Bloomberg Barclays, Bloomberg. As of 01 Apr 20¹Calculation assumes 25 bps liquidity premium³As of 31 Dec 19

5-Year Implied Cumulative Default Rate Based on 30% Recovery by Market Pricing 01 Apr 20: 16.53%¹

+278 bps

0100200300400500600700

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

OAS

(bps

)

US Corporate Bond Spreads

Source: Bloomberg Barclays. As of 01 Apr 20

Investment Themes – Corporate BondsImplied Default Rates

34

23 Mar 20, +299 bps

02 Apr 20, +232 bps

0

50

100

150

200

250

300

350

400

450

500

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

OAS

(bps

)

U.S. Long Credit A Index Historical OAS

Source: Bloomberg Barclays. As of 02 Apr 20

High Quality Companies Chose to Pay Decade High Spreads to Borrow in March 2020

Ratings Company and Issue Spread at New Issue (bps)

Aa3/AA- Procter & Gamble 30 yrs 225A1/A+ Pepsi 30 yrs 200A1/A+ Intel 30 yrs 310A1/A+ Coca Cola 30 yrs 260A1/A+ Mastercard 30 yrs 250A2/A- Wells Fargo 30 yrs 370A2/A- Bank of America 30yrs 260

35

Banks in Sound Financial ShapeBanks are generally well capitalized

CET1 levels are more than double that of the minimum requirements

The introduction of more capital buffers has led to this build up of “excess” capital

The authorities have signalled that the buffers can be used

3.7

13.6

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12.2

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4

6

8

10

12

14

16

18

20072018 20072018 20072018

Europe USA Canada

Fully

Load

ed B

asel

III (%

)

Regulatory Common Equity Tier 1 Ratio for Selected Global Banks

Source: BNP Paribas. As of 28 Feb 19

0

2

4

6

8

10

12

14

16

Europe Canada US

Bank

CET

1 Rati

o (%

)

Spare CET1 by RegionCET1 ExcessCET1 Min. Req.

$681bn

$116bn $545bn

$559bn$69bn $328bn

Source: BNP Paribas; Bank Annual Reports and Quarterly Updates 2019. As of 19 Mar 20Number of banks in sample: Europe 39, Canada 7, US 12

36

+797 bps

0

200

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800

1,000

1,200

2007

2008

2009

2010

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Basis

Poin

ts

IG Independent Energy OAS

Source: Bloomberg Barclays. As of 31 Mar 20

Great Financial Crisis

CommodityCrisis

Dual Shock

Investment-Grade Energy – Unprecedented Supply and Demand Shock

Since 2016, IG Managements Have Acted conservatively Lowered cost structures Improved cash flow Delevered balance sheets Extended maturity runways Improved liquidity Implemented hedges

Have Additional Levers Cut capital budgets Cut dividends

Conclusion: Severe downward price action Valuations extreme Downgrades happening Capital preservation in focus

37

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9

10

JPY IG EUR IG UK IG Asia IG US IG

PercentUS

D (tr

illion

s)

Market Value (left) YTW (right)

Source: Bloomberg Barclays. As of 01 Apr 20Bloomberg Barclays Global Credit Index by Currency

Credit Market Yields and Size

US Credit Markets Offer Both Attractive Yield and Size Relative to other mature markets, US credit markets are attractive to a global investor.

38

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1.00

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1.50

1.75

2.00

2.25

2.50

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

USD

S&P/LSTA Leveraged Loan Index Growth of a Dollar

Sources: LCD, an offering of S&P Global Market Intelligence; S&P/LSTA Leveraged Loan Index as of 25 Mar 20

Long-Term Performance of Bank Loans

39

+942* bps

0

500

1,000

1,500

2,000

1994 1997 2000 2003 2006 2009 2012 2015 2018

OAS

(bps

)

Bloomberg Barclays US High-Yield Corporate Bond Spreads

Source: Bloomberg Barclays. *As of 03 Apr 20

High Yield … Another “Historic” OpportunityValuations look attractive on a historical basis.

Bloomberg Barclays U.S. High Yield Index OAS: +942 bpsRecovery Rate: 30% Year 1 Year 2 Year 3 Year 4 Year 5Annual Default Rate 12.6% 12.6% 12.6% 12.6% 12.6%Cumulative Default Rate 12.6% 23.6% 33.2% 41.6% 49.0%

Recovery Rate: 40% Year 1 Year 2 Year 3 Year 4 Year 5Annual Default Rate 14.5% 14.5% 14.5% 14.5% 14.5%Cumulative Default Rate 14.5% 27.0% 37.6% 46.6% 54.4%Source: Bloomberg Barclays, Western Asset. As of 03 Apr 20

1 Year Later 2 Years LaterOAS (bps) Annualized Return (%)

Jun 2009 945 26.77 21.07May 2009 1,067 28.79 23.39Apr 2009 1,219 42.58 27.17Mar 2009 1,514 56.18 33.61Feb 2009 1,544 56.24 35.51Jan 2009 1,476 51.15 32.52Dec 2008 1,662 58.21 34.96Nov 2008 1,833 64.95 38.79Oct 2008 1,479 48.10 32.95Sep 2008 1,020 13.37 16.17Oct 2002 1,014 32.95 22.58Sep 2002 996 29.98 20.95Aug 2002 918 24.86 19.22Jul 2002 915 26.96 19.81Average 40.08 27.05

14 times when HY spread exceeded +900 at month end.Annualized returns for HY when spreads exceeded +900 at month end.

Source: Bloomberg Barclays. As of 30 Jun 11

40

High-Yield Should Benefit from Stimulus Package

¹Specific Industry support²Source: Barclays, March 26th, Barclays Tuesday Credit Call)

While the Fed’s corporate market facilities target investment-grade companies, the mid-sized business loan program in the CARES Act should offer more assistance to the high-yield market¹ 48% of high-yield issuers are eligible for the potential 2% loan under the CARES Act, versus 19% of investment-grade issuers²

Airlines $25 billion in wage grants and $25 billion in loans

Automotive TALF 2.0 Enable efficient funding in the ABS market

Areas of focus in high-yield: Industries that can endure throughout a protracted downturn

– Cable, wireless, healthcare, food & beverage, and other consumer non-cyclicals Deeper value/higher return potential opportunities in certain, more stressed sectors

– Energy, airlines, metals & mining (with a focus on copper). Individual issuer selection is crucial!

41

Emerging Markets: Market Impact and Valuations

EM is particularly growth-sensitive given existing balance sheet quality and external vulnerability

Capacity for monetary policy and fiscal stimulus is more limited in EM

Valuations displaced across all EM sectors

Thinking of local rates as carry rather than total return, while EMFX will remain vulnerable to virus-related growth downside

We find value in high quality EM hard currency bonds and displaced front-end paper

EM

DM

-4-3-2-10123

2010 2011 2012 2013 2014 2015 2016 2017 2019 2020

Perce

nt

Emerging Markets and Developed Sovereign Real Yields

Source: Bloomberg, J.P. Morgan. As of 29 Feb 20

RatingYield to

Worst (%)Duration

(yrs)J.P. Morgan GBI EM Global Diversified BBB 5.5 5.2Bloomberg Barclays US Treasury AAA 0.6 7.1Bloomberg Barclays Euro Area Treasury AA- 0.2 8.4Bloomberg Barclays UK Treasury AA 0.4 13.8Bloomberg Barclays Japan Treasury A+ 0.0 9.8Bloomberg Barclays US IG Credit A 3.3 7.7Source: Bloomberg Barclays, J.P. Morgan. As of 30 Mar 20

Great Value Medium-Term

42

Outlook2020

As of 06 Apr 20

Coronavirus-related growth setbacks have meaningfully reduced global and US growth

The medical battle will take time and prolonged efforts; recent developments are encouraging

US and global inflation rates will be very subdued

Central banks will remain extraordinarily accommodative

Fiscal policy will continue to ramp up to provide relief efforts

Even after recovery begins, central banks will keep rates ultra low

Spread products ultimately should be primary beneficiaries of recovery

The timing and slope at eventual recovery remains the largest uncertainty

43

Questions & Answers

44

Thank you.

0

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© Western Asset Management Company Ltd 2020. 当資料の著作権は、ウエスタン・アセット・マネジメント株式会社およびその関連会社（以下「ウエスタン・アセット」という）に帰属するものであり、ウエスタン・アセットの顧客、その投資コンサルタント及びその他の当社が意図した受取人のみを対象として作成されたものです。第三者への提供はお断りいたします。当資料の内容は、秘密情報及び専有情報としてお取り扱い下さい。無断で当資料のコピーを作成することや転載することを禁じます。

過去の実績は将来の投資成果を保証するものではありません。当資料は情報の提供のみを目的としており、作成日におけるウエスタン・アセットの意見を反映したものです。ウエスタン・アセットは、ここに提供した情報が正確なものであるものと信じておりますが、それを保証するものではありません。当資料に記載の意見は、特定の有価証券の売買のオファーや勧誘を目的としたものではなく、事前の予告なく変更されることがあります。当資料に書かれた内容は、投資助言ではありません。ウエスタン・アセットの役職員及び顧客は、当資料記載の有価証券を保有している可能性があります。当資料は、お客様の投資目的、経済状況或いは要望を考慮することなく作成されたものです。お客様は、当資料に基づいて投資判断をされる前に、お客様の投資目的、経済状況或いは要望に照らして、それが適切であるかどうかご検討されることをお勧めいたします。お客様の居住国において適用される法律や規制を理解し、それらを考慮する責任はお客様にあります。

ウエスタン・アセット・マネジメント・カンパニーDTVM(Distribuidora de Títulos e Valores Mobiliários)リミターダ（ブラジル、サンパウロ拠点）はブラジル証券取引委員会（CVM）とブラジル中央銀行（Bacen）により認可、規制を受けます。ウエスタン・アセット・マネジメント・カンパニー・ピーティーワイ・リミテッド (ABN 41 117 767 923) （オーストラリア、メルボルン拠点）はオーストラリアの金融サービスライセンス303160を保有。ウエスタン･アセット･マネジメント･カンパニー・ピーティーイー・リミテッド（シンガポール拠点）は、キャピタル・マーケット・サービス（CMS）ライセンス (Co. Reg. No. 200007692R) を保有し、シンガポール通貨監督庁に監督されています。ウエスタン・アセット・マネジメント株式会社（日本拠点）は金融商品取引業者として登録、日本のFSAの規制を受けます。ウエスタン･アセット・マネジメント・カンパニー・リミテッド（英国、ロンドン拠点）は英金融行動監視機構(FCA)により認可、規制を受けます。当資料は英国および欧州経済領域(EEA)加盟国においては、FCAまたはMiFID IIに定義された「プロフェッショナルな顧客」のみを対象とした宣伝目的に使用されるものです。

期限日のお知らせ：金融商品取引法（以下、「法」）の以下の規定による期限日は、いずれも毎年9月30日（休日の場合は、前営業日）とします。法第34条の2により、特定投資家を特定投資家以外の顧客とみなす場合。法第34条の3により、特定投資家以外の顧客である法人を特定投資家とみなす場合。法第34条の4により、特定投資家以外の顧客である個人を特定投資家とみなす場合。

個人情報の取り扱いについて：当社はその業務に関連して、お客様及びお客様の役職員の個人情報を取得する場合があります。当社は取得した情報を、当社からのご連絡、セミナーのご案内などの営業活動に利用することがあります。

ウエスタン・アセット・マネジメント株式会社について：業務の種類：金融商品取引業者（投資運用業、投資助言・代理業、第二種金融商品取引業）登録番号：関東財務局長（金商）第427号加入協会：一般社団法人日本投資顧問業協会（会員番号 011-01319）、一般社団法人投資信託協会

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