PIMCO’s Economic Outlook
Your Global Investment AuthorityPIMCO’s Economic OutlookEd DevlinJuly 2012PIMCO Canada Corp.120 Adelaide Street West,Suite 1901, Toronto, OntarioCanada M5H 1T1416-368-3350For Dealer Use Only - NotFor Public DistributionYour Global Investment Authoritypg 1
Agenda1.PIMCO’s Global Outlook2.PIMCO’s U.S. Outlook3.Headwinds to growth4.PIMCO’s European Outlook5.Investment ImplicationsYour Global Investment Authority!mk Global Advantagepg 2
1. PIMCO’s global outlookYour Global Investment Authoritypg 3
The New Normal:Moving from a normal to a bimodal distributionVirtuous CycleProbability (%)Vicious CycleNormaldistributionBimodaldistributionEconomic conditions (improvement from left to right)DISORDERLYDE-LEVERAGINGMUDDLE THROUGHEUROZONE RESOLUTIONAND GLOBAL GROWTHAs of 31 March 2012Refer to Appendix for additional investment strategy, outlook and risk information.Your Global Investment AuthorityMk 4cs TR strat 01 cdapg 4
Structure of global economy and debt dynamics arechanging rapidly Advanced Economy indebtedness is increasing sharply and has reachedunprecedented levels At the same time Emerging Markets (EM) share of global activity is increasing withhigh savings and lower leverage supportive of positive debt dynamicsTraditional patterns of global indebtedness arebeing turned around150Gross government debt–to–GDP ratios20072011Emerging markets now the main drivers ofglobal growthAverage real GDP growth forecasted for 2012 (percent)2015FPercent (%)1251007550No dataBelow 025Between 0 and 3Between 3 and 60Between 6 and 10G20 industrialized countriesG20 emerging marketsYour Global Investment AuthorityAbove 10!mk EM DLM ELB Fundpg 5
Markets are now acknowledging thisshift in sovereign credit risk1000Difference in sovereign spreads between emerging and advanced '11As of 31 March 2012SOURCE: Bloomberg, PIMCONote: Chart shows CDS spreads for Markit iTraxx SOVX Western European Index and Markit CDX Emerging Markets IndexA positive number implies that EM spreads are greater than DM spreads. A negative number implies that EM spreads are less than DM spreads, therefore implying thatmarket is pricing lower credit risk for specified baskets of EM countries than for DM countries.Refer to the Appendix for additional index information.Your Global Investment Authoritypg 6
Grand bargain #1: Can EM re-orient towards domesticgrowth allowing the developed markets (DM) to de-leverage?Unemployment in emerging economies (EM) vs. G-7 2001-2011EM10G7Unemployment Rate 1As of 31 December 2011SOURCE: Haver AnalyticsYour Global Investment Authoritypg 7
DM public sector de-leveraging is amulti-year headwind to global growthPercent of Global GDP in countries with fiscal deficit of 8% of GDP or more502009: US, UK, Spain, Greece,Portugal, Ireland, Japan, India,Nigeria, Venezuala etc4540Percent352010/2011: Almost all of the Above302520151050'80 '81'82'83 '84'85'86 '87'88'89 '90'91'92 '93'94'95 '96'97'98 '99'00'01 '02'03'04 '05'06'07 '08'09'10 '11As of 30 September 2011SOURCE: PIMCO, Citi, IMF, Bloomberg Financial MarketsYour Global Investment AuthorityEuropean Sovereign Risk(07-02-10)pg 8
Unfortunately, DM private sectordeleveraging is also a significant headwindHousehold Debt-to-Income Ratio1601401201008060United States (LHS)United Kingdom (LHS)Japan (LHS)Euro area (RHS)18124102806'00'02'04'06'08'10'12'14'16% of Financial Assets146105010016815'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11Percent (%)Percent (%)10United StatesEuro areaUnited KingdomJapan-5'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11Household Saving RateHousehold growth rate of debt stock20Annual Rate (%)Annual Rate (%)180Unitedhat we believe are likely to contribute positivelyto U.S. economic growth in 2012:1. A reduction in negativity from Washington relative to 20112. Fracking and factories3. Credit and cars4. Multi-family housing5. HiringAs of 31 December 2011SOURCE: PIMCORefer to Appendix for additional outlook information.Your Global Investment Authoritypg 12
Good riddance, Washington Elections bring empowerment: Washington’s abrogation of theelectorate’s right to steer the direction of the nation will giveway yet again to hope for “change”As of 16 August 2011Your Global Investment Authoritypg 13
Fracking and factories The U.S. factory workweek is at its longest since 1945 6'80'84'88'92'96'00'04'08As of: 31 January 2012Source: Bureau of Labor StatisticsYour Global Investment Authoritypg 14'12
Fracking and factories Factory jobs are growing at their fastest pace in 15 years40Monthly change in factory jobs (1-year moving average, in thousands of 3'04'05'06'07'08'09'10'11As of 31 January 2012Source: Bureau of Labor StatisticsYour Global Investment Authoritypg 15'12
Fracking and factories Five top factors fueling the factory sector’s revival:1. Persistent strength in the Japanese yen2. Supply-chain diversification3. Increased labor costs in China4. Increased U.S. competitiveness5. Decline in the price of natural gasSOURCE: PIMCORefer to Appendix for additional outlook information.Your Global Investment Authoritypg 16
Fracking and factories U.S. energy production is rising sharplyTotal oil (includes biofuels and refinery buildout); (LHS)Dry natural gas 0050,0009,00045,0008,5008,00040,0001981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014As of 31 January 2012SOURCE: EIAYour Global Investment Authoritypg 17Million cubic feet/dayThousands of barrels/day11,50070,000
Credit and carsMyth: Banks aren’t 512606795123567551210671511856675May '10Aug '10Nov '10Feb '11May '11Aug '11Nov '11Feb '12As of 15 February 2012SOURCE: Federal ReserveYour Global Investment Authoritypg 18All Loans & LeasesC&I Loans1410C&I loansAll loans & leasesU.S. Bank Loans Outstanding (in billions of dollars)
Time for a new car? Cars are older11.0 Credit conditions have improvedAverage Age of U.S. Cars and Light Trucks780Average credit scores - New auto loans773 77477510.5YearsAge in years7667659.5772767762760755 7539.077676977010.0775 9'111Q '08 3Q '08 1Q '09 3Q '09 1Q '10 3Q '10 1Q '11As of 30 September 2011SOURCE: R.L. Polk, Experian Automotive Edmunds.com, Inc.Your Global Investment Authoritypg 19
Housing won’t likely add much to growth;but it won’t take away much either2250Total starts, LHSMulti-family, RHSMulti-family starts are responding to rental 0072008200920102011As of 30 September 2011SOURCE: U.S. Census Bureau. Shown in thousands of unitsRefer to Appendix for additional outlook information.Your Global Investment Authoritypg 20Multi-familyTotal starts1950500
Support for U.S. economic growth800Jobless ClaimsUnemployment rateJobless claims versus the unemployment rate7001210Jobless 119951999200320072011As of 31 May 2012SOURCE: HaverYour Global Investment Authoritypg 21Unemployment rate (%)600
3. Headwinds to growthYour Global Investment Authoritypg 22
Headwinds to growthWealth destruction70000Income Growtat risk you are taking: Pay attention to sovereign credit as well asinterest rate risk Re-examine your benchmark: Look for bespoke benchmarks with a higherweight of less-leveraged sovereign credits e.g. Investment-Grade EmergingMarkets or GDP-weighted indices (e.g. PIMCO GLADI) Avoid passive investing: Emphasize bottom-up credit assessment forsovereigns as well as corporate credits.Refer to Appendix for additional investment strategy, index and risk information.Your Global Investment Authority!mk EM DLM ELB Fundpg 37
Investment implicationsPortfolio implications to consider: Focus on Developed country interest rate risk in 5-7yr sector which couldbenefit from expected carry and roll down as rates kept on hold. Under-weight Eurozone peripheries as crisis needs to get worse to elicitpolicy response, and left tail risk of policy failure can’t be dismissed Under-weight Bunds: Own higher yielding German agencies instead Diversify into local currency duration in high quality EM countries where realinterest rates are high and there is flexibility to withstand global anddomestic shocks. Focus on “safe spread*” investments across assets taking into account lossand volatility-adjusted total returns. Take liquidity rather than credit riskpremiums. Look to incorporate tail-risk hedges to help manage high sovereign creditrisk and the spillover effects.*“Safe Spread” is defined as sectors that we believe are most likely to withstand the vicissitudes of a wide range of possible economic scenarios. All investments contain riskand may lose value.Refer to Appendix for additional investment strategy and risk information.Your Global Investment Authority!mk EM DLM ELB Fundpg 38
AppendixPast performance is not a guarantee or a reliable indicator of future results.FORECASTForecasts, estimates, and certain information contained herein are based upon proprietary research and should not beconsidered as investment advice or a recommendation of any particular security, strategy or investment product. There is noguarantee that results will be achieved.INVESTMENT STRATEGYThere is no guarantee that these investment strategies will work under all market conditions and each investor should evaluatetheir ability to invest for a long-term especially during periods of downturn in the market.OUTLOOKStatements concerning financial market trends are based on current market conditions, which will fluctuate. There is noguarantee that these investment strategies will work under all market conditions, and each investor should evaluate their abilityto invest for the long-term, especially during periods of downturn in the market. Outlook and strategies are subject to changewithout notice.RISKInvesting in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Investingin foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economicand political risks, which may be enhanced in emerging markets. Sovereign securities are generally backed by the issuinggovernment, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally notbacked by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate invalue. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the riskthat a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested.Diversification does not ensure against loss.Your Global Investment Authority!mk Canada Std Appendixpg 39
AppendixThe PIMCO Canada Trusts offered by PIMCO Canada Corp. are only available in provinces or territories of Canada to investors whoare accredited investors within the meaning of the relevant provincial or territorial legislation or rules and in certain provinces, onlythrough dealers authorized for that purpose. PIMCO Canada will retain PIMCO LLC as a sub-advisor. PIMCO Canada will remainresponsible for any loss that arises out of the failure of its sub-advisor.This material contains the current opinions of the manager and such opinions are subject to change without notice. Thismaterial has been distributed for informational purposes only and should not be considered as investment advice or arecommendation of any particular security, strategy or investment product. Information contained herein has been obtainedfrom sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred toin any other publication, without express written permission. 2012, PIMCO.PIMCO Canada Corp., 120 Adelaide Street West, Suite 1901, Toronto, ON MSH 1T1, 416.368.3350, 866.341.3350Your Global Investment Authority!mk Canada Std Appendixpg 40
AppendixINDEX DESCRIPTIONSThe BofA Merrill Lynch Canada Corporate Index tracks the performance of CAD denominated investment grade corporate,securitized and collateralized debt publicly issued in the Canadian domestic market. Qualifying securities must have aninvestment grade rating (based on an average of Moody’s, S&P and DBRS), at least one year remaining term to final maturity, afixed coupon schedule and a minimum amount outstanding of CAD 100 million.The BofA Merrill Lynch Euro Broad Market Index tracks the performance of EUR denominated investment grade debt publiclyissued in the eurobond or Euro member domestic markets, including euro-sovereign, quasi-government, corporate, securitizedand collateralized securities. Qualifying securities must have an investment grade rating (based on an average of Moody’s, S&Pand Fitch), at least one year remaining term to final maturity and a fixed coupon schedule.BofA Merrill Lynch Global High Yield BB-B Rated 2% Constrained Index tracks the performance of below investment grade bondsof below investment grade bonds of corporate issuers domiciled in countries having an investment grade foreign currency longterm debt rating (based on a composite of Moody's, S&P, and Fitch). The index includes bonds denominated in U.S. dollars,Canadian dollars, sterling, euro (or euro legacy currency), but excludes all multicurrency denominated bonds. Bonds must berated below investment grade but at least B3 based on a composite of Moody's, S&P, and Fitch. Qualifying bonds arecapitalization-weighted provided the total allocation to an individual issuer (defined by Bloomberg tickers) does not exceed 2%.Issuers that exceed the limit are reduced to 2% and the face value of each of their bonds is adjusted on a pro-rata basis.Similarly, the face value of bonds of all other issuers that fall below the 2% cap are increased on a pro-rata basis. The index is rebalanced on the last calendar day of the month. The inception date of the index is December 31, 1997.The BofA Merrill Lynch US Corporate Index tracks the performance of US dollar denominated investment grade corporate debtpublicly issued in the US domestic market. Qualifying securities must have an investment grade rating (based on an average ofMoody’s, S&P and Fitch), at least one year remaining term to final maturity, a fixed coupon schedule and a minimum amountoutstanding of 250 million.The BofA Merrill Lynch US Financial Index is a subset of The BofA Merrill Lynch US Corporate Index including all securities ofFinancial issuers.Your Global Investment Authority!mk Canada Std Appendixpg 41
AppendixThe DEX Corporate Bond Index consists of a diversified selection of investment-grade corporate bonds issued domestically inCanada and denominated in Canadian dollars.The DEX Universe Bond Index covers all marketable Canadian bonds with term to maturity of more than 1 year. History datesfrom December 1979. The Universe contains over 900 marketable Canadian bonds. The average term is 9 years and the averageduration is 5.5 years. The purpose of this index is to reflect performance of the broad "Canadian bond market" in a mannersimilar to the way the TSE 300 represents the Canadian equity market. Prior to 22 October 2007, the index was known as ScotiaCapital Universe Bond Index.The DEX Long Term Bond index is an unmanaged index that covers bonds with term to maturity of greater than 10 years. Theindex includes historical dates from December 1947 and approximately 270 marketable Canadian bonds. The average term ofthe bond is 21 years and average duration is 10 years. Prior to 22 October 2007, the index was known as Scotia Capital LongTerm Bond Index.The JPMorgan Emerging Markets Bond Index Global is an unmanaged index which tracks the total return of U.S.-dollardenominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady Bonds, loans,Eurobonds, and local market instruments.It is not possible to invest directly in an unmanaged index.Your Global Investment Authority!mk Canada Std Appendixpg 42
Ed Devlin July 2012. Your Global Investment Authority !mk_Global_Advantage pg 2 1. PIMCO’s Global Outlook . 50 75 100 125 150 G20 industrialized countries G20 emerging markets Percent (%) . Grand bargain #1: Can EM re-orient towards
PIMCO has teamed up with TurboTax and H&R Block to help provide fast, accurate and secure access to your tax data using your PIMCO Funds Account Access login credentials. To establish login credentials needed to access TurboTax and H&R Block software, visit PIMCO Account Acce
Outlook 2013, Outlook 2016, or volume-licensed versions of Outlook 2019 Support for Outlook 2013, 2016, and volume-licensed versions of Outlook 2019 ends in December 2021. To continue using the Outlook integration after the end of 2021, make plans now to upgrade to the latest versions of Outlook and Windows. Outlook on the web
o Microsoft Outlook 2000 o Microsoft Outlook 2002 o Microsoft Outlook 2003 o Microsoft Outlook 2007 o Microsoft Outlook 2010 o Microsoft Outlook 2013 o Microsoft Outlook 98 o Microsoft PowerPoint 2000 o Microsoft PowerPoint 2002 – Normal User o Microsoft PowerPoint 2002 – Power User o Microsoft PowerPoint 2002 – Whole Test
Outlook 2003 with Exchange 2010 still gives an excellent email experience and the improvements made in Outlook 2007, Outlook 2010 and Outlook 2013 are relatively minor. Outlook 2003 was the first version of Outlook capable of connecting to an Exchange server over the Internet, as opposed to an Exchange server located on the same LAN.
Outlook Integration with Salesforce Page 1 of 19 Outlook Integration with Salesforce This guide will help you set up the Outlook Integration add-in, which replaces the Salesforce for Outlook app you may be familiar with, within Outlook and Outlook on the Web to connect to Salesforce, and show you how to log emails, events and meetings to Salesforce.
Outlook 2016 Setup Instructions Page 1 of 18 How to Configure Outlook 2016 to connect to Exchange 2010 Currently Outlook 2016 is the version of Outlook supplied with Office 365. Outlook 2016 will install and work correctly on any version of Windows 7, Windows 8 or Windows 10. Outlook 2016 won't install on Windows XP or Vista.
Core Funds Specialty Funds 2000 2010 2020 2030 2040 2050 2005 2015 2025 2035 2045 20551 U.S. Equity Fixed Income Value Blend Growth International/ Global Equity Stable Value Income Fund2 High Quality PIMCO Core Plus Bond Fund - Class II Real Return Bond PIMCO Real Return Strategy Fund - Class II Large Cap Value LSV U.S. Large Cap Value Equity
Andreas M unch and Endre S uli Mathematical Institute, University of Oxford Andrew Wiles Building, Radcli e Observatory Quarter, Woodstock Road Oxford OX2 6GG, UK Barbara Wagner Weierstrass Institute Mohrenstraˇe 39 10117 Berlin, Germany and Technische Universit at Berlin, Institute of Mathematics Straˇe des 17. Juni 136 10623 Berlin, Germany (Communicated by Thomas P. Witelski) Abstract .
