Americas Gabriela Santos* New York Europe Asia Karen Ward London Dr. David Kelly, CFA New York Marcella Chow Hong Kong Hugh Gimber, CFA London Meera Pandit, CFA New York Tai Hui Hong Kong Vincent Juvyns Luxembourg Jack Manley New York Shogo Maekawa Tokyo Ian Hui Hong Kong Jordan Jackson New York Aaron Mulvihill, CFA New York Aaron Hussein, CAIA London Fumiaki Morioka Tokyo Tilmann Galler, CFA Frankfurt Jennifer Qiu, CFA Hong Kong Stephanie Aliaga New York Max McKechnie London Brandon Hall New York Maria Paola Toschi Milan Chaoping Zhu, CFA Shanghai Adrian Wong Hong Kong Mary Park Durham* New York Katie B Korngiebel New York Natasha May London Elena Domecq Madrid Arthur Jiang Shanghai Raisah Rasid Singapore Marina Valentini* São Paulo Grant Papa New York Grace Wyckoff New York Zara Nokes London Lucia Gutierrez Mellado Madrid Sahil Gauba Mumbai Agnes Lin Taipei Kerry Craig, CFA Melbourne Real GDP growth Inflation Contribution to growth, year-over-year % change Year-over-year % change 10% 12% 10% 8% 8% 6% 6% 4% 4% Oct. 2024: 4.7% 2% Average: 2.3% 0% 2% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Real policy rates by country 0% Nominal policy rate deflated by 12-month inflation expectations 14% -2% Brazil 9% Mexico -4% Government spending -6% Investment Private consumption Net exports -8% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Colombia 4% Peru -1% Chile -6% '08 '10 '12 '14 '16 '18 '20 '22 '24 Exports Latin America merchandise exports to U.S. and China % of nominal GDP, USD terms, goods, 2023 % of total merchandise exports, yearly average and YTD 2024 70% 18% Exports to U.S. U.S. Venezuela 7% 15% 60% EM ex-China 12% China Argentina 50% 10% 6% Other Colombia 9% Eurozone 40% 3% 14% Exports to China 30% 0% '00 Brazil 16% '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 China FDI into Latin American countries USD billions, official reports (solid) vs. academic estimates (dotted) $20 25% $15 28% $10 $5 2015 2016 2017 2018 2019 2020 2021 2022 2023 $0 2022 40% 2021 30% 2020 20% 2019 10% 2018 33% 0% Colombia 2017 Mexico Mexico Chile Peru 2015 Chile Brazil 2016 Peru 2023 Real GDP Real consumption and investment Year-over-year % change Year-over-year % change 13% 15% 11% 9% 35% Consumption 25% 3Q24: 5.5% 9% 15% 3% 5% 7% -5% -3% 3Q24: 10.8% 5% -9% Average: 2.3% 3% -15% -25% Investment -15% 1% -35% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Trade balance and exchange rate -1% USD billions, accumulated past 12 months, real effective FX* $125 -3% 140 Trade balance Dec. 2024: $71.2bn $100 -5% 120 $75 -7% -9% Real GDP 3Q24 YoY % change 4.0% 100 $50 80 $25 QoQ % change Dec. 2024: 108.4 3.7% -11% $0 -13% -$25 60 REER '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 40 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Inflation targeting and inflation Inflation breakdown IPCA, 12-month accumulated % change IPCA, 12-month accumulated % change 13.0% Consensus* 25% Supervised** 20% 15% 11.5% Services 10% Goods 5% 10.0% 0% -5% 8.5% -10% '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 Target policy rate and expectations 7.0% Nov. 2024: 4.9% 5.5% BCB Selic target rate and consensus expectations 16% Upper limit: 4.5% 14% Consensus* 12% Dec. 2024: 12.25% 10% 4.0% 8% Target: 3.0% 2.5% 6% 4% 2% Lower limit: 1.5% 1.0% 0% '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '27 '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '27 Consumer and industrial confidence Credit growth Seasonally adjusted Year-over-year % change, non-earmarked credit* 125 50% 40% Industrial Nov. 2024: 11.0% 30% 115 Corporations 20% Consumer Nov. 2024: 98.6 105 10% Households 0% Nov. 2024: 9.3% -10% 95 -20% '08 Nov. 2024: 95.6 85 '10 '12 '14 '16 '18 '20 '22 '24 Unemployment rate Non-seasonally adjusted 16% 14% 75 12% 10% 65 8% 6% Nov. 2024: 6.1% 4% 55 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 Public sector primary balance Social security and payroll expenditures % of GDP, annual and YTD average, non-seasonally adjusted % of total expenses, 12-month moving average 6% 55% Social security Gov. targets* Oct. 2024: 41.2% 45% '26T, 0.25% 4% '25T, 0% '24T, 0% 2% 35% 25% Payroll 15% Oct. 2024: 16.5% 0% 5% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 General government gross debt -2% Nov. 2024: -2.3% -4% % of GDP 90% Nov. 2024: 77.8% 80% 70% -6% Average: 66.1% 60% -8% 50% 40% -10% '00 '04 '08 '12 '16 '20 '24 ‘24 '26T YTD '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Real GDP Real private consumption and investment Year-over-year % change Year-over-year % change 20% 40% 30% 15% 20% 3Q24: 3.0% Investment 10% 10% Average: 1.7% 0% 5% 3Q24: 1.3% Consumption -10% -20% '00 0% '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Mexican peso vs. U.S. dollar USDMXN U.S. election (2020)/COVID-19 28 -5% U.S. election (2016) and Mexico election (2018) 24 20 -10% -15% Mexico election (2012) 16 Real GDP 3Q24 12 YoY % change 1.6% 8 QoQ % change 4.4% 4 U.S. and Mexico elections (2000) Mexico election/judicial reforms/U.S. election (2024) Global Financial Crisis/ U.S. election (2008) 0 -20% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '90 '95 '00 '05 '10 '15 '20 Foreign direct investment into Mexico Remittances USD billions, annual and YTD 2024 USD billions, annual and YTD 2024 $50 $70 Parent company accounts $60 Reinvestments $45 Average: $27.9bn $50 New investments $40 $40 Average: $29.2bn $35 $63 $59 $54 $53 $30 $20 $30 $10 $7 $42 $37 $34 $31 $28 $26$27$26 $24$25 $22$22$24$23$23 $22 $18 $15 $9 $10 $0 $25 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 YTD '24 Top factors that favor or curb relocation efforts % of businesses surveyed $20 100% Top incentives $15 Top disincentives 80% $10 60% $5 40% 20% $0 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 YTD '24 0% Geolocation Low wages Labor quality Rule of law Taxation Infrastructure Inflation targeting and inflation Core inflation breakdown IPCA, 12-month accumulated % change Year-over-year % change, nsa 9% Consensus* 12% 10% 8% 8% Nov. 2024: 4.9% Core goods 6% 7% 4% 6% 2% Core services Nov. 2024: 2.4% 0% '08 5% '10 '12 '14 '16 '18 '20 '24 Banxico target rate and consensus expectations 12% 4% Nov. 2024: 4.6% 3% '22 Target policy rate and expectations Upper limit: 4.0% Consensus* Dec. 2024: 10.0% 10% 8% Average: 3.0% 6% 2% Lower limit: 2.0% 4% 1% 2% '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '08 '10 '12 '14 '16 '18 '20 '22 '24 '26 Gross fixed investment Gross government debt % of GDP, quarterly, seasonally adjusted % of GDP 55% 50% Gov. projections* 26% 2023: 46.8% 23% 7% 2024-27E Gov. proj. 45% 51.4% 40% 3Q24: 22.3% 6% 35% 20% 30% 5% 25% 20% 17% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '26 4% Public balance Annual government spending as % of GDP 8% Primary balance Interest expense 6% 14% Gov. projections* 3Q24: 2.6% 3% 4% 11% 2% 0% -2% 2% 8% -4% -6% Private -8% Public 5% -10% '90 '95 '00 '05 '10 '15 '20 '25 1% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Real GDP Inflation Year-over-year % change % change month-over-month, national CPI 20% 30% Headline Core 25% 15% Nov. 2024 (y/y change): 166.0% Expectations next 12m: 29.4% 20% 15% 10% Average: 1.3% 5% 10% 2.4% 2.7% 5% 0% '18 0% '19 '20 '21 '22 '23 '24 International reserves USD billions $90 -5% Capital controls $80 $70 -10% $60 $50 -15% Real GDP 3Q24 YoY % change -2.1% $30 QoQ % change 16.4% $20 -20% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 $40 Dec. 2024: $32.7bn $10 '18 '19 '20 '21 '22 '23 '24 Real GDP Real private consumption and investment Year-over-year % change Year-over-year % change 20% 30% 100% Consumption 20% 70% 16% 3Q24: 1.6% 10% 40% 12% 0% 8% 10% -10% -20% 3Q24: 4.0% Average: 3.6% Investment -20% 4% '06 '08 '10 '12 '14 '16 '18 -50% '20 '22 '24 International trade 0% Year-over-year % change, 4-quarter moving average 50% 40% -4% 30% -8% Real GDP 3Q24 YoY % change 2.0% QoQ % change 0.8% Imports 20% 3Q24: 5.7% 10% -12% 0% Exports -10% -20% -16% '08 '10 '12 '14 '16 '18 '20 '22 '24 3Q24: -2.3% -30% '06 '08 '10 '12 '14 '16 '18 '20 '22 Inflation targeting and inflation Oil prices and the Colombian peso Headline inflation, 12-month accumulated % change COP per USD (inverted), Brent US$ per barrel 16% Consensus* $160 500 Colombian peso $140 1,500 $120 14% $100 2,500 $80 12% 3,500 $60 $40 4,500 $20 10% Oil ($/bbl) $0 5,500 '07 8% '09 '11 '13 '15 '17 '19 '21 '23 Target policy rates and expectations BanRep repo rate and consensus expectations 16% 6% Upper limit: 4.0% 4% Consensus* Nov. 2024: 5.2% 12% Dec. 2024: 9.50% 8% Target: 3.0% 2% 4% Lower limit: 2.0% 0% 0% '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 Real GDP Real private consumption and investment Year-over-year % change Year-over-year % change, nsa 20% 40% 30% 20% 15% 15% 3Q24: 1.0% 0% 10% 0% Average: 3.5% 3Q24: -0.2% -20% 5% Consumption -15% Investment -40% -30% '01 0% '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 International trade Year-over-year % change, 4-quarter moving average 40% -5% 30% -10% Real GDP 3Q24 20% YoY % change 2.3% 10% QoQ % change 2.6% Imports 3Q24: 3.9% 0% -15% Exports -10% 3Q24: -2.1% -20% -20% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Inflation targeting and inflation Copper prices and the Chilean peso Headline inflation, 12-month accumulated % change CLP per USD (inverted), $/mt 16% $10,500 400 $9,500 500 Consensus* 14% $8,500 600 $7,500 12% 700 $6,500 800 $5,500 10% 900 $4,500 1000 $3,500 8% Chilean peso $2,500 Target: 3.0% 6% Copper prices Nov. 2024: 4.2% Upper limit: 4.0% 4% 1100 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 Target policy rates and expectations Central Bank of Chile rate and consensus expectations 14% Consensus* 12% 2% 10% Lower limit: 2.0% 8% 0% 6% Dec. 2024: 5.00% 4% -2% 2% 0% -4% '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '27 '08 '10 '12 '14 '16 '18 '20 '22 '24 '26 Real GDP Real private consumption and investment Year-over-year % change Year-over-year % change 40% 40% 100% Consumption 30% 75% 20% 50% 3Q24: 6.6% 25% Average: 4.2% 10% 25% 0% 0% 3Q24: 3.5% -10% -25% Investment 10% -20% -50% '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 International trade Year-over-year % change, 4-quarter moving average -5% 30% Exports 20% 3Q24: 4.9% 10% -20% Real GDP 3Q24 YoY % change 3.8% QoQ % change 4.8% 0% -10% Imports -20% 3Q24: 4.4% -30% -35% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Inflation targeting and inflation Reserve requirements Headline inflation, Lima, year-over-year % change Reserve requirements as % of total deposits 10% 30% Consensus* 25% 9% 20% 8% 15% 10% 7% Nov. 2024: 5.1% 5% 6% 0% '07 5% '09 '11 '13 '15 '17 '19 '21 '23 Target policy rate and expectations BCRP official reference rate and consensus expectations 4% 10% Upper limit: 3.0% 3% Consensus* 8% Target: 2.0% 2% Dec. 2024: 2.0% Lower limit: 1.0% 1% 6% Dec. 2024: 5.00% 4% 0% 2% 0% -1% '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 '07 '09 '11 '13 '15 '17 '19 '21 '23 '25 Consumer goods spending relative to trend Real GDP growth Latest available, % deviation from 2016-2019 trend 1Q14 = 100 145 140 135 U.S. Europe China EM Asia Forecast* Latin America Japan 195 185 5% 1% 1% 0% -1% -5% 175 -5% -10% 130 165 -15% 125 155 -20% -12% -13% -21% -25% 120 145 115 135 110 125 105 115 100 105 95 95 US Japan Latam Euro area UK EM China Revenue exposure vs. country of listing % of total revenue from foreign countries 100% 80% 77% 59% 60% 55% 41% 40% 33% 22% 90 85 20% 85 75 0% '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 14% UK Europe ex-UK Japan U.S. EM Asia Latin America China Global Composite (manufacturing & services combined) Purchasing Managers’ Index, quarterly 2024 Nov Dec Global 52.4 - Manufacturing 50.0 49.6 Services 53.1 - DM 52.2 - EM 52.8 - U.S. 54.9 56.6 Japan 50.1 50.8 UK 50.5 50.5 Euro Area 48.3 49.5 Germany 47.2 47.8 France 45.9 46.7 Italy 47.7 - Spain 53.2 - China 52.3 - India 58.6 60.7 Brazil 55.1 - Emerging Developed 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 '24 Year-over-year headline inflation by country and region, quarterly 2024 Nov Dec Global 2.5% - DM 2.4% - EM 2.8% - U.S. 2.7% - Canada 1.9% - Japan 2.9% - UK 2.6% - Euro Area 2.2% - Germany 2.3% - France 1.3% - Italy 1.4% - Spain 2.4% 2.8% Greece 2.4% - China 0.2% - Indonesia 1.5% 1.6% Korea 1.5% 1.9% Taiwan 2.1% - India 5.5% - Brazil 4.9% - Mexico 4.5% - Emerging Developed 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Developed market central bank bond purchases Historical policy rates and forward curves USD billions, 12-month rolling flow Target policy rates and market implied forward rates 6% $6,000 Fed Forecast* Fed $5,000 ECB BoE BoJ 5% BoJ ECB $4,000 BoE 4% Total $3,000 3% $2,000 2% $1,000 1% $0 0% -$1,000 -$2,000 -1% '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '19 '20 '21 '22 '23 '24 '25 '26 '27 Contributors to real GDP growth Quarter-over-quarter, seasonally adjusted annualized rate 14% 12% Consumption Bus. fixed investment Gov't spending Residential Net exports Chg. in private inventories Real GDP 10% 7.4% 8% 6.4% 5.6% 2000-2023 Share of Avg. nominal GDP contribution 68% 1.7% 13% 0.4% 19% 0.2% 4% 0.0% -4% -0.1% 0.0% 100% 2.3% 3Q24 2.5% 0.6% 0.9% -0.2% -0.4% -0.2% 3.1% 6% 4.4% 3.5% 4% 3.2% 3.4% 2.7% 2.8% 2.4% 3.0% 3.1% 2Q24 3Q24 2% 0.3% 1.6% 0% -1.0% -2% -4% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 The 2025 federal budget Federal deficit and net interest outlays USD trillions % of GDP, 1973-2034, CBO Baseline Forecast $8.0 -15% -11% $7.0 Non-defense disc.: $867bn (12%) $6.0 $5.0 $4.0 $3.0 $2.0 Defense: $964bn (14%) Other m andatory: $833bn (12%) Deficit: $1,938bn (28%) -7% Tariffs: $76bn (1%) Other: $184bn (3%) Corporate taxes: $490bn (7%) -3% Net interest outlays Primary deficit or surplus Payroll taxes: $1,737bn (25%) 5% '73 '78 '83 '88 '93 '98 '03 '08 '13 '18 '23 '28 '33 Federal net debt (accumulated deficits) Social Security: $1,549bn (22%) % of GDP, 1940-2034, CBO Baseline Forecast, end of fiscal year Incom e taxes: $2,550bn (37%) $1.0 Net interest: $1,016bn (15%) $0.0 TCJA extension* 1% Medicaid: $600bn (9%) Medicare: $1,145bn (16%) Forecast Total deficit or surplus Total spending: $7.0tn TCJA extension* 140% 120% Total government spending Sources of financing 2024: 98.2% 100% CBO's Baseline economic assumptions 2034: 129.9% 2034: 119.1% 80% 2024 '25-'26 '27-'28 '29-'34 Real GDP grow th 2.9% 2.0% 1.7% 1.8% 60% 10-year Treasury 4.5% 4.0% 3.6% 4.0% 40% Headline inflation (CPI) 3.2% 2.4% 2.2% 2.2% Unem ploym ent 3.8% 4.0% 4.3% 4.5% Forecast 20% '40 '48 '56 '64 '72 '80 '88 '96 '04 '12 '20 '28 Consumer balance sheet Household Householddebt debtservice serviceratio ratio 3Q24, USD trillions, not seasonally adjusted Debt of of disposable personal income, SA SA Debtpayments paymentsasas%% disposable personal income, 18% $200 Total assets: $189.7tn $160 4Q07: 15.8% 4Q07: 15.8% 16% $180 1Q80: 12.4% 14% Homes: 28% 4Q24**: 4Q24**: 11.3% 11.3% 12% 12% $140 $120 $100 Other tangible: 5% 10% 10% Deposits: 8% 8% 8% '00 '00 Auto loans: 7% 12% 15% Other liabilities: 10% Other financial assets: 43% Total liabilities: $20.9tn $20 Mortgages: 66% $0 Assets '95 '95 Revolving*: 6% Student loans: 8% $40 '90 '90 % of balance delinquent 30+ days 20% 17% 20% 16% Other non-revolving: 2% $60 '85 '85 '05'05 '10'10 '15 '15 '20 '20 Real consumer spending by expenditure category Flows into early delinquencies Year-over-year % change, average level of spending Pension funds: 17% $80 '80 '80 Liabilities 7% 8% 10% 4% 3%3% 2% 9% 7% Durable Loans goods 3Q24 Auto loans 8.1% Nondurable goods Credit cards 8.8% Services Student loans 0.9% Mortgages 5% 3% 0% 0% 5% -4% 3.6% 4% 3% 1% 3% 3% 2% '19 '23'21 YTD '24* '23 -2% -8% 0% '03 '19 '05 -6% '20 '07 '09 '11 '21 '13 '15 '22'17 Nonfarm payroll gains Sources of population growth Month-over-month change and 3mo. moving average, SA Contribution to annual percentage change 1000 1.3% 900 Payroll gain 3mo. avg Nov. '24 227K 173K Births minus deaths CBO Projections* Net immigration 0.9% 800 0.5% 700 0.1% 600 -0.3% Population growth '04 '07 '10 '13 '16 '19 '22 '25 '28 '31 '34 '37 '40 '43 '46 '49 '52 500 Labor force participation rate changes % change since 2019 average, SA 400 4% Female 25-54 2% 300 0% Male 25-54 200 -2% 100 -4% 0 -6% 55 and over Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 Jul '23 Jan '24 Jul '24 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 Civilian unemployment rate and wage growth CPI and core CPI %, seasonally adjusted % change vs. prior year, seasonally adjusted 15% 16% Apr. 2020: 14.8% 14% 12% 12% Unemployment rate 50-yr. avg. 3.7% Headline CPI Oct. 2009: 10.0% Oct. 2024 2.6% Nov. 2024 2.7% Core CPI 3.7% 3.3% 3.3% Headline PCE PCE deflator Headline Core PCE PCE deflator Core 3.2% 3.2% 3.2% 3.2% 2.3% 2.3% 2.8% 2.8% 2.4% 2.4% 2.8% 2.8% Core svcs. PCE ex. housing and energy 3.9% 3.5% 3.5% 9% 10% 8% 6% Nov. 2024: 4.2% Avg.: 6.2% 6% 3% 4% Avg.: 4.0% 0% 2% Nov. 2024: 3.9% Wage growth 0% -3% '74 '79 '84 '89 '94 '99 '04 '09 '14 '19 '24 '74 '79 '84 '89 '94 '99 '04 '09 '14 '19 '24 Contributors to headline CPI inflation Contribution to y/y % change in CPI, non-seasonally adjusted 10% 9% 8% Jun. 2022: 9.1% Energy Food at home Shelter Core goods Dining, recreation and other svcs. Auto insurance 7% 6% 5% Nov. 2024: 2.7% 4% 3% 2% 1% 0% -1% -2% Jan '18 Jul '18 Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 Jul '23 Jan '24 Jul '24 Federal funds rate expectations FOMC and market expectations for the federal funds rate 8% FOMC December 2024 forecasts Percent 2024 2025 2026 2027 Change in real GDP, 4Q to 4Q 2.5 2.1 2.0 1.9 Long run* 1.8 Unemployment rate, 4Q 4.2 4.3 4.3 4.3 4.2 Headline PCE inflation, 4Q to 4Q 2.4 2.5 2.1 2.0 2.0 Core PCE inflation, 4Q to 4Q 2.8 2.5 2.2 2.0 7% 6% 5% 4.38% 3.93% 3.94% Federal funds rate FOMC year-end estimates 4% 3.92% 3.90% Market expectations 3.10% FOMC long-run projection* 3.40% 3% 3.00% 2% 1% 0% '93 '96 '99 '02 '05 '08 '11 '14 '17 '20 '23 '26 Long run Eurozone headline inflation and wage growth EU Recovery Fund grants Year-over-year EUR billions 12% 6% Headline inflation 140 € Wage growth Initial planned disbursement 10% Actual/forecast disbursement 5% Forecast* 3Q24: 5.4% 8% 4% 120 € 6% 3% 4% 2% 2% 100 € 1% 0% Nov. 2024: 2.2% -2% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 0% 80 € '24 Eurozone confidence indicators 60 € Index benchmarked to zero, monthly 20 Industry 10 Dec. 2024: -14.5 0 40 € -10 20 € -20 Consumer -30 Dec. 2024: -11.1 -40 '00 '03 '06 '09 '12 '15 '18 '21 '24 0€ 2021 2022 2023 2024 2025 2026 Nominal GDP Inflation and wage growth Year-over-year change JPY trillions 6% ¥70 Forecast* ¥60 4% Nov. 2024: 2.9% ¥50 ¥40 Nov. 2024: 2.4% 2% ¥30 ¥20 '80 0% '85 '90 '95 '00 '05 '10 '16 '18 '15 '20 '25 '30 Interest rate expectations Based on 5y5y swaps 2.5% 2.0% -2% 1.5% Inflation ex-fresh food and energy Wage growth 1.0% -4% 0.5% 0.0% -0.5% -6% '01 33 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '08 '10 '12 '14 '20 '22 '24 China real GDP contribution Pace of central and local government bond issuances Year-over-year % change, contribution by component Total issuances as a % of annual quotas, central and local combined 15% 140% 9.4% 10.6% 9.5% 10% 4Q23 1Q24 2Q24 3Q24 Investm ent 1.2% 0.6% 1.9% 1.3% Consum ption 4.2% 3.9% 2.2% 1.3% Net exports -0.2% 0.8% 0.6% 2.0% Total GDP 5.2% 5.3% 4.7% 4.6% 120% 2021 100% Central gov. bond quota % quota filled (CNY tn) 2.8 86% Local gov. quota (CNY tn) 4.5 % quota filled 108% 2022 2.7 100% 4.4 105% 2023 3.2 131% 4.5 126% YTD '24 5.2 96% 6.1 109% 80% 9.7% 60% 8.0% 8.4% 6.7% 3.9% 7.9% 7.8% 40% 6.9% 7.4% 7.0% 6.9% 6.8% 1.7% 5.1% 3.3% 4.1% 3.3% 1.6% 3.1% 2.7% 6.0% 5.2% 1.7% 1.5% 2.9% 5% 20% 4.9% Jan 2.5% 3.0% 6.3% 4.3% 4.9% 4.4% 2.2% 4.5% 3.9% 4.3% 3.9% 4.2% 3.5% 0.2% -4.0% -1.2% -0.7% 0.6% -0.3% -0.1% 0.3% -0.8% 0.8% 0.6% 1.8% -0.5% -0.2% Apr May Jun Jul Aug Sep Oct Nov 140 1.1% 130 120 0.5% Employment confidence Consumer confidence -0.6% 110 100 Willingness to consume 90 -5% Dec Confidence and willingness to consume Jan. 2017 = 100 1.3% 1.0% 0.3% Mar Monthly, index levels 1.5% 4.3% 1.8% 0% Feb Consumer income and wealth effect 4.9% 5.4% 5.1% 0% 80 70 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 Contribution to real GDP growth PEG ratios Year-over-year % change, fiscal years* P/E ratio divided by long-term EPS growth rate 1.8 20% 15% '21 '22 '23 '24 1H '25 Gross capital formation (investment) -2.2% 5.5% 2.2% 3.0% 2.2% Consumption -3.1% 6.7% 4.8% 2.6% 3.9% Net exports 1.5% 1.0% 0.5% -2.0% 1.1% Others** -2.0% -3.4% -0.6% 4.6% -1.2% Total GDP growth (%y/y) -5.8% 9.7% 7.0% 8.2% 6.0% 1.6 India >1: Overvalued 1.4 1.2 1 0.8 0.6 10% EM 0.4 0-1: Fairly valued 0.2 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 Domestic vs. foreign flows into Indian equities 5% USD billions $100 $80 0% Foreign flows Domestic flows $60 $40 -5% $20 $0 -10% '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 1H '25 -$20 '19 '20 '21 '22 '23 '24 '24 Greenfield foreign direct investment announcements U.S. goods imports by country % of global greenfield FDI announcements, USD billions % of total U.S. goods imports, annual and YTD 2024 25% 25% $200 % of global greenfield FDI ann. (bars) Jan. 2018: Start of Trade War 1.0 $ value of ann. (diamonds) $180 China 20% 20% $160 2004 2023 Canada 15% Mar. 2020: COVID-19 pandemic 15% $140 $120 $100 Euro Area 10% $80 Mexico $60 10% ASEAN 5% Dec. 2001: China joins the WTO $20 Taiwan & South Korea 5% 0% LatAm ex-Mexico India 0% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 $40 $0 Average tariff rate on U.S. goods imports U.S. trade balance with major trading partners Duties collected / value of total goods imports for consumption USD billions, 2023 20% $100 10% Average tariff rate on all imports 18% $43 $50 Average tariff rate on imports from China 5% $10 $16 16% $0 0% YTD ‘24 14% -$50 -$51 12% -$83 -$100 -$72 -$66 -5% -$48 -$64 -10% -$105 10% -$150 -15% 8% -$152 Goods trade balance (USD bil.) -$200 6% -20% % of trading partner's GDP '40 '50 '60 '70 '80 '90 '00 '10 '20 India Brazil UK Taiwan South Korea '30 Canada 0% Ireland -30% Japan -$300 -$279 Germany 2% Vietnam -25% Mexico -$250 China 4% Manufacturing output and workforce Global manufacturing wages Percent, 2018 Annual salaries of production workers in USD, latest available 25% U.S. Percent of global mfg. Percent of workforce employed in mfg. $32,000 China $14,000 Brazil $13,000 20% Vietnam $6,000 Latin America 15% Mexico $2,500 India $2,000 $0 Rest of world $10,000 $20,000 $30,000 $40,000 Infrastructure investments USD billions, 2018-22 avg., public investment with private participation $25 10% $20.0 Latin America $20 Rest of world $15 $12.9 5% $8.2 $10 $4.2 $5 $2.7 $1.9 Mexico Colombia $0 0% China U.S. Japan Germany Brazil India Mexico China Brazil India Vietnam Semiconductor production by location Mining production by location % global share % global share, 2023 100% 3% 6% 8% 6% 5% Others* Rare earths 90% 19% 22% 11% 24% 22% 21% China Lithium 22% 13% 60% 12% 15% 80% 70% 19% 68% 32% 47% 18% 22% 18% 17% 17% Taiw an Copper 8% 15% Zinc 7% 19% 35% 5%6%4% 32% 44% 17% 50% 15% 21% 18% 19% 19% South Korea 44% 7% 6% 4% 19% 40% 18% 24% 30% 20% 9% 8% 12% 11% 15% 15% Japan 8% 9% Europe 13% 14% U.S. Nickel 5%6% 6% 78% Cobalt 17% 5% 75% 19% 13% 0% 1990 15% 13% 37% 10% 15% 2000 2010 2020 2025F 2030F 2032F 0% China U.S. Africa & RoW 20% 40% 60% APAC ex-China North America ex-U.S. 80% South America Europe 100% Capex from the major AI hyperscalers* U.S. industrial production of high tech industries USD billions; Alphabet, Amazon (AWS), Meta, Microsoft, Oracle Indexed to 100 in Jan. 2020 $300 100% Capital spending % of operating cash flow** 160 Com puter equipment Com munication equipment 150 Sem iconductors 249 $250 All industry ex-high tech 234 80% 140 130 197 $200 Recession 60% 120 110 $150 123 126 40% $100 100 92 90 65 67 Aug. 2022: CHIPS Act 73 20% $50 80 40 17 7 4 2 2 4 5 10 7 8 '04 '10 23 25 31 70 $0 0% '06 '08 '12 '14 '16 '18 '20 '22 '24 '26 60 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 U.S. electricity electricityconsumption generation growth U.S. U.S. demand from in data Data center growth electricity demand Dataelectricity centerexpected expected growth in centers electricity demand 10yr ann. growth Terawatt-hour rate, retail sales(TWh), to major end-use sectors Net generation, monthly 11% 500 Generation Share of total consumption EIA forecast Industrial 8.8% Average monthly generation per year* Commercial 9% 450 U.S. energy consumption, projections through 2030 2030 Terawatt-hour (TWh), 2022-2026** U.S.data datacenter center energy consumption, projections through 800 16% 300 800 16% 7.6% 700 700 260 600 600 2024* 26% 500 500 220 400 400 300 180 300 36% Residential 38% Transportation and other 0% U.S. data center energy U.S. data center energy consumption, TWh consumption, TWh 1.3x 7% 0 100 6% 6% 4% 4% 0 2% 2% 2023 2024 2025 2026 2027 2028 2029 2030 2024 2022 2025 2026 2027 2028 2026E 2029 2030 Thousands Thousands 1,000 3% Forecasts*** 920 800 2.3% 300 800 1.4% 1% 600 600 380 400 250 0.0% 200 -1% 0 1950s '03 1960s '05 '07 1970s '09 1980s '11 '13 1990s '15 2000s '17 '19 2010s 2020s** '21 380 400 0.2% 200 '01 920 Forecasts*** 1,000 3.1% 200 8% 8% Number of electric electric vehicle in in thethe U.S. Number vehiclecharging chargingpoints points U.S. 4.5% 350 260 TWh: ~6% of U.S. demand 200 TWh: ~4% of U.S. demand 2023 5% 12% 12% 10% 10% 200 200 140 100 100 400 14% 14% %%of oftotal totalU.S. U.S. power powerdemand demand '23 '25 183 183 99 114 128 77 128 114 54 43 99 38 32 77 12 15 20 38 43 54 12 15 20 32 0 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '25F '30F '25F'30F EMD spreads: Sovereigns USD-denominated sovereign debt, basis points over Treasuries Global – U.S. Treasuries 5-year spread Basis points, local currency debt 950 Spreads Avg. Dec. '24 EM 382 325 EM LATAM 411 427 850 750 Avg. 6% 7% Yield Dec. '24 8% 9% Brazil 1128 Colombia 552 Mexico 548 650 550 450 South Africa 350 India 495 234 250 '16 '17 '18 '19 '20 '21 '22 '23 '24 Indonesia 203 Chile 150 EMD spreads: Corporates USD-denominated corporate debt, basis points over Treasuries 1,300 Spreads Yield Avg. Dec. '24 Avg. Dec. '24 EM 302 206 5% 6% EM LATAM 376 263 6% 7% 1,100 900 Peru Malaysia 65 -77 Current 700 Korea -163 10-year average (LATAM) 500 10-year average (Other EM) China 300 100 '16 '17 '18 '19 '20 '21 '22 '23 '24 -299 -400 -200 0 200 400 600 800 1,000 1,200 Fixed income return composition 2024, total return, USD 15% 10% 9.2% 8.7% 7.8% 7.1% 6.5% 5% 1.9% 1.3% 0% -2.4% -5% -4.9% -10% -15% -20% Total return Income return Price return Currency return -14.7% -25% Global high yield LATAM corporates (USD) LATAM sovereigns (USD) Emerging corporates (USD) Emerging sovereigns (USD) Global IG U.S. Agg Emerging sovereigns (LCL) Developed sovereigns (LCL) LATAM sovereigns (LCL) Yield-to-worst across fixed income sectors Percent, past 10 years Axis Core sectors 8.0% Extended sectors 16.0% 10-year median 10-year range Current 7.0% 14.0% 6.0% 12.0% 6.3% 5.0% 5.3% 5.3% 5.3% 5.4% 8.7% 4.0% 7.9% 4.5% 4.0% 3.2% 3.4% 3.0% 2.8% 7.5% 6.4% 6.6% 8.0% 6.0% 2.8% 3.2% 1.9% 6.4% 6.3% 5.8% 10.0% 6.2% 6.0% 5.3% 2.0% 4.0% 4.5% 1.0% 1.0% 2.0% 0.0% U.S. Municipals* IG corps Treasuries Weight in U.S. Agg.** 44% <1% 24% MBS CMBS ABS Euro IG EMD ($) 25% 2% <1% - - EMD (LCL) EM Corp - - Euro HY U.S. HY Leveraged Loans - - - 0.0% Yield-to-worst and subsequent 5-year annualized returns Bloomberg U.S. Aggregate Total Return Index 24% 2010s 22% 2000s Subsequent annualized five-year returns 20% 1990s 18% 1980s 16% 1970s 14% R² = 88% 12% As of 12/31/2024, a current yield of 4.91% implies a forward 5-yr. return of 5.07% 10% 8% 6% 4% 2% 0% -2% 1% 3% 5% 7% 9% 11% Starting yield 13% 15% 17% 19% U.S. and global bond yields U.S. Treasury yield curve Yield to maturity 6.0% 6% Oct. 19, 2023 (10-year Treasury peak) 4.9% 5.0% 5% 4.8% 4.6% 4.4% 4.3% 4.2% 4.5% Dec. 31, 2024 (Current) 4.4% 4.3% 4.0% 4% 4.2% Jul. 3, 2023 (Peak inversion*) U.S. 10Y Treasury 3% 3.0% 2% 2.0% 1% 1.0% Bloomberg Global Aggregate Aug. 4, 2020 (10-year Treasury trough) 0.0% 0% '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 3m 1y 3y 5y 7y 10y 20y 30y Impact of a 1% rise or fall in interest rates Total return, assumes a parallel shift in the yield curve and spreads are maintained 25% 1% rise in interest rates No change 1% fall in interest rates 20.8% 20% 14.0% 12.5% 11.3% 11.1% 8.8% 10% 7.5% 6.1% 5% 15.1% 14.4% 15% 4.3% 4.4% 4.6% 4.8% 5.4% 5.4% 5.4% 3.8% 2.4% 0% 7.4% 11.0% 7.9% 7.9% 6.6% 7.1% 4.9% 4.7% 2.0% 2.0% 1.3% 0.7% 0.2% -0.1% -1.2% -3.4% -5% -10% -11.2% -15% 2-year Treasury 5-year Treasury 10-year Treasury 30-year Treasury Floating rate High yield global U.S. ABS USD EMD corporates USD Latin America aggregate USD Latin USD EMD America sovereigns sovereigns U.S. aggregate Corporate credit spreads U.S. high yield by credit rating Option-adjusted spread, 2001 - present 25% %, J.P. Morgan Domestic High Yield Index Investment grade 20% High yield Spread YTW Spread YTW Avg. 149 bps Current 80 bps Percentile 1.1% 4.4% 513 bps 8.1% 5.3% 287 bps 7.5% 71% 4.7% 48% 60% Pre-GFC Dec. '24 B CCC/NR 50% 40% 30% 20% 10% 0% 15% BBB BB U.S. high yield default rates By credit rating 27% 10% 18% BB B CCC/Split CCC High yield* 25yr Avg. Last 12m 0.72% 0.00% 2.53% 0.31% 6.71% 1.23% 2.97% 1.14% 5% 9% 0% 0% '01 '04 '07 '10 '13 '16 '19 '22 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 Latin America valuations Latin America earnings Price-to-earnings ratio, NTM EPS, local currency, NTM, Jan. 2011 = 100 26x 350 15-yr. range 15-yr. average Latest 23x Brazil Chile Colombia Mexico EM Asia Peru Latin America 300 20x 250 17x 15.2x 14x 12.9x 12.6x 200 12.6x 11.7x 12.0x 12.2x 10.3x 11x 150 10.7x 9.7x 10.7x 100 8x 7.0x 7.9x 5.9x 50 5x 2x 0 Latin EM Asia America Peru Mexico Chile Brazil Colombia '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 MSCI EM index by region MSCI EM index by sector LATAM exBrazil, 3% EMEA, 13% Rest of Asia, 5% Other 14% India, 19% Consumer 18% Commodities 12% China, 28% Technology 34% Financials 24% Taiwan, 20% Korea, 9% MSCI MSCI EM EM country country index index by by sector sector 100% 100% 21% 20% 80% 80% 60% 60% 20% 14% 16% 19% 33% 40% 5% 7% 33% 32% 19% 10% 26% 28% 0%0% 2% 11% 5% 8% 12% 11% 11% 17% 17% Financials Technology 53% 48% 64% 64% 35% 34% 35% 35% Mexico* Mexico 10% 11% 4%4% 20% 20% Saudi Arabia Saudi Arabia India India Other** Commodities 18% 17% 12% 8% Brazil Brazil 15% 23% 29% 27% 48% 47% 35% 25% 20% 20% 22% 16% 13% 17% 6% 6% 19% 15% 17% 15% 40% 40% 15% 20% 12% 11% China China Korea Korea 6%6% Taiwan Taiwan Consumer EM earnings by region EM equity returns EPS for next 12-month consensus, local currency, Jan. 2007 = 100 MSCI EM Index, country contribution, total return, USD 220 30% Taiwan Korea Total EM Asia 180 25% 140 20% 18.9% 18.7% India LATAM China Other Latin America 100 15% 10.3% 60 EMEA 10% '23 5% 8.1% 20 '07 '09 '11 '13 '15 '17 '19 '21 Net equity flows into emerging markets 0% USD billions, rolling 12 months, net non-resident purchases $15 EMEA -2.2% -5% $10 China $5 -10% $0 -15% Latin America -$5 -20% -$10 -19.7% EM Asia ex-China -25% -$15 '15 '16 '17 '18 '19 '20 '21 '22 '23 2019 2020 2021 2022 2023 2024 Sources of global equity returns* Total return, USD 40% 15-year ann. 2023 2024 33.5% 30% 25.0% 26.3% 19.7% 22.7% 20% 20.8% 13.9% 10% 6.3% 6.0% 12.6% 8.7% 5.2% 3.4% 8.1% 10.3% 2.5% 8.2% 1.0% 0% -1.2% -10% -11.0% Total return -20% Earnings Dividends -30% Multiples -26.0% Currency -40% U.S . Japan Eur ope EM Asi a ex- UK EM China Latin America Latin America U.S . Eur ope Japan ex- UK EM EM Asi a China U.S . China EM Asi a Japan EM Eur ope Latin ex- UK America Global earnings estimates Global valuations Jan. 2005 = 100, next 12 months consensus estimates, U.S. dollars Price-to-earnings ratios, next 12 months 400 46x 37x U.S. Recession Current Jan. 1, 2024 China 350 33x Canada 25-year range Japan 25-year average Europe ex-UK 300 29x EM 250 25x 21.5x 200 21x 150 17x 19.5x 15.3x 14.7x 13.5x 100 13x 13.7x 14.1x 13.9x 12.0x 10.2x 11.9x 50 9x 0 9.3x 5x '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 U.S. Canada Japan Europe exUK EM China S&P 500 year-over-year pro-forma EPS growth Return on equity Annual growth broken into changes in revenue, profit margin and share count 70% Net income divided by shareholders' equity 40% Share of EPS grow th 2024* Avg. '01-'23 Margin 8.2% 2.7% Revenue 1.4% 4.2% Share count -0.9% 0.3% Total EPS 8.7% 7.2% U.S. Quality 60% 30% 48% 50% 20% '26F: $311 41% 40% '25F: $274 '24F: $239 30% 24% 10% 0% '13 21% 20% 14%15% 14%13% 12% 9% 6% 6% 7% 6% '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '23 '24 Operating margins 14% 9% 10% U.S. Large Cap Operating income divided by revenue, trailing 12 months 25% 5% 0% 1% U.S. Quality 1% 20% 0% 0% 15% -3% -10% 10% -20% -16% -16% -16% '01 '03 '05 '07 '09 U.S. Large Cap -14% '11 '13 '15 '17 '19 '21 '23 '25 5% '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 Value vs. Growth relative valuations Value vs. Growth in different interest rate environments Rel. fwd. P/E ratio of Value vs. Growth, 1997 - present Annualized total return by 10-year Treasury rate ranges, 1979 - present 1.2 20% Recession 18.6% Growth cheap/Value expensive 16.2% 1.0 16% 15.4% 15.0% Growth Value 0.8 12% 11.2% 10.9% 10.4% 10.5% Long-term avg.*: 0.71 0.6 8% 0.4 7.1% Dec. 31, 2024: 0.54 Value cheap/Growth expensive 6.4% 4% 0.2 Value Forward P/E LongCurrent term avg.* 16.2x 14.2x Div. yield** LongCurrent term avg.* 2.2% 2.6% Growth 28.9x 0.6% Style 21.1x 0% 1.3% 0.0 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 % of time 0-2% 2-3% 3-4% 4-5% U.S. 10-year Treasury rate ranges >5% 11% 14% 14% 49% 11% S&P 500 sector pro forma EPS growth Year-over-year 2022 Tech. Financials Health Care Cons. Disc. Com m . Services Industrials Cons. Staples Energy Utilities Materials Real Estate Weight* 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QF 1QF 2025 2QF 3QF 4QF 32% 14 % 10 % 11% 9% 8% 6% 3% 2% 2% 2% 14 % - 19 % 15 % -29% - 1% 38% 8% 282% 27% 47% 19 % 1% - 2 1% 8% - 16 % - 2 1% 33% 2% 3 0 1% -4% 17 % 6% - 1% - 18 % 0% 7% -23% 20% 1% 14 0 % -8% - 12 % 11% -9% - 13 % -4% - 19 % -26% 40% 1% 58% 10 % - 18 % 8% -8% -5% - 15 % 38% - 14 % 24% 3% 19 % -23% -20% - 1% 4% -2% -27% 48% 20% 12 % 8% -49% -3% -24% 5% 14 % 12 % - 18 % 38% 44% 9% 7% -34% 10 % - 16 % - 1% 23% - 2 1% - 15 % 27% 44% 4% 6% -23% 3 1% - 2 1% 3% 25% 9% -25% 2 1% 42% 2% 6% -24% 28% - 2 1% 6% 20% 17 % 19 % 10 % 8% -3% 4% 0% 2 1% -8% 0% 8% 7% 14 % 8% 26% - 11% 4% -28% -2% - 11% 2% 15 % 38% 13 % 11% 23% -4% 0% -29% -2% 2% 2% 17 % 6% 42% 10 % 9% 10 % 0% - 12 % 9% 7% 1% 20% 2% 13 % 7% 33% 10 % 5% -3% 3% 8% 3% 30% 7% 14 % 8% 5% 30% 6% 15 % 16 % 29% 6% 20% 15 % 17 % 16 % 13 % 19 % 9% 2 1% 11% 27% 7% 10 % 7% 3% -3% - 1% -4% 6% 4% 6% 11% 5% 11% 11% 11% 15 % 17 % S&P 500 2023 2024 Total shareholder yield by sector Last 12-months dividends and buybacks minus issuance divided by market cap 8% Buyback yield 6.6% Dividend yield 6% 3.5% 3.8% 4% 2% 3.2% 3.5% 2.1% 3.2% 0.6% 0% 1.4% 3.2% 1.1% 2.1% 3.1% 1.3% 1.8% 2.9% 1.6% 1.3% 2.8% 1.6% 1.2% 2.8% 1.7% 2.6% 2.0% 1.8% 2.7% 1.4% 1.2% -0.1% 0.6% 0.6% 1.2% 1.6% 3.0% -1.4% -2% Energy Comm. Svcs. Financials Cons. Staples Materials Industrials S&P 500 Health Care Utilities Info. Tech. Cons. Disc. Real Estate P/E ratio of the top 10 and remaining stocks in the S&P 500 Weight of the top 10 stocks in the S&P 500 Next 12 months, 1996 - present % of market capitalization of the S&P 500 44% 44x 39x Top 10 Remaining stocks S&P 500 Current 29.8x 18.2x 21.5x Average 20.6x 15.7x 16.6x % of avg. 145% 115% 129% Dec. 31, 2024: 38.7% 40% 36% 32% 28% 24% 34x 20% 16% 12% 29x '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Economic concentration in the S&P 500 % of S&P 500 metric, 3Q24 24x 50% 41% Top 10 40% 19x 26% 30% 24% 19% 20% 14x 13% 10% 10% 0% 9x '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 R&D Expense Free Cash Flow Operating Income Capex Sales Employees Performance of “Magnificent 7” stocks in S&P 500* Earnings growth Indexed to 100 on 1/1/2021, price return Pro forma EPS, estimates 4Q24 onwards, y/y 240 60% Returns S&P 500 S&P 500 ex-Mag 7 220 Magnificent 7 Share of returns** 200 '21 27% '22 -19% '23 24% '24 23% 50% 50% 40% 17% -8% 8% 10% 30% 40% -40% 76% 48% 20% 33% 56% 63% 55% 10% 31% 34% Mag 7 S&P 500 ex-Mag 7 35% 21% 23% 19% 21% 21% 13% 9% 6% 3% 8% 9% 25% 8% 21% 13% 15% 1% 0% 180 160 -10% -4% -20% -14% '22 '23 -2% '24 '25 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Profit margins Quarterly earnings/sales 25% 140 Mag 7 S&P 500 ex-Mag 7 3Q24: 23.5% 20% 120 15% 100 3Q24: 9.3% 10% 5% 80 '21 '22 '23 '24 4Q20 2Q21 4Q21 2Q22 4Q22 2Q23 4Q23 2Q24 2010 - 2024 Ann. Vol. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Sm all Cap High Div. Cyclical Value Value Mom en. Sm all Cap Mom en. Min. Vol. Cyclical Mom en. Value Defens. Cyclical Mom en. Cyclical Cyclical 26.9% 14.3% 20.1% 43.2% 17.7% 9.3% 21.3% 37.8% 1.5% 36.3% 29.6% 29.2% 5.3% 39.1% 20.3% 13.2% 18.2% MultiFactor Min. Vol. Value Sm all Cap Min. Vol. Min. Vol. High Div. Cyclical Mom en. Quality Cyclical Cyclical High Div. Quality Quality Mom en. Value 18.3% 12.9% 16.8% 38.8% 16.5% 5.6% 16.3% 27.3% -1.6% 34.4% 27.8% 27.6% -3.8% 31.1% 11.9% 12.8% 16.1% Mom en. Defens. Sm all Cap MultiFactor High Div. Quality Value Quality High Div. Mom en. Sm all Cap Quality Min. Vol. MultiFactor Cyclical Quality Sm all Cap 18.2% 10.1% 16.3% 37.4% 14.9% 4.6% 15.9% 22.5% -2.3% 28.1% 20.0% 27.2% -9.2% 17.7% 10.9% 11.9% 15.9% Cyclical Quality MultiFactor Cyclical MultiFactor Cyclical Cyclical Value Defens. Min. Vol. Quality MultiFactor Value Sm all Cap MultiFactor MultiFactor Quality 17.9% 7.5% 15.7% 35.0% 14.8% 2.6% 14.0% 22.2% -2.9% 28.0% 17.1% 25.1% -14.0% 16.9% 10.4% 10.8% 14.9% High Div. MultiFactor Mom en. Mom en. Mom en. High Div. MultiFactor MultiFactor Cyclical Value MultiFactor Defens. MultiFactor Value Defens. Min. Vol. Mom en. 15.9% 7.3% 15.1% 34.8% 14.7% 0.7% 13.7% 21.5% -5.3% 27.7% 11.4% 25.0% -15.5% 14.4% 8.8% 10.1% 14.4% Min. Vol. High Div. Quality MultiFactor Min. Vol. High Div. Mom en. Min. Vol. High Div. High Div. MultiFactor 10.7% 19.5% -5.6% 26.6% 5.8% 21.9% -17.4% 9.8% 8.1% 9.7% 13.6% Sm all Cap Defens. Min. Vol. Quality Mom en. Value Value High Div. 25.5% 5.2% 21.0% -20.3% 9.5% 7.8% 8.6% 9.7% High Div. High Div. High Div. Min. Vol. Defens. Min. Vol. Min. Vol. Mom en. Quality Quality Cyclical MultiFactor 14.7% 6.1% 12.8% 34.3% 13.6% 0.4% Quality Value Min. Vol. High Div. Defens. Defens. Quality Min. Vol. MultiFactor 14.2% -2.7% 11.2% 28.9% 13.0% -0.9% 9.4% 19.2% -9.7% Value Cyclical Defens. Defens. Quality Sm all Cap Defens. 12.7% -3.4% 10.7% 28.9% 10.7% -4.4% 7.7% 14.6% -11.0% 22.5% 1.7% 14.8% -20.4% 6.8% 7.7% 8.2% 9.5% Defens. Sm all Cap High Div. Min. Vol. Sm all Cap Value Mom en. Defens. Value Defens. Value Mom en. Cyclical Defens. Sm all Cap Sm all Cap Defens. 12.0% -4.2% 10.6% 25.3% 4.9% -6.4% 5.1% 12.3% -11.1% 21.4% -0.2% 12.9% -27.2% 0.4% 5.2% 7.9% 9.1% Sm all Cap Sm all Cap Sm all Cap Sm all Cap Sector composition Percent of unprofitable companies % of index market capitalization Pro forma EPS 32% Info. Tech. 14% 14% 60% 50% Large cap Mid cap 17% 19% 32% 30% 32% 29% 28% 20% 16% 20% 10% 9% Health Care 43% 37% 40% 11% 11% 10% Cons. Discretionary 46% 41% 14% Financials 53% Small cap 16% 7% 10% 9% Comm. Svcs. 4% 3% 0% Tech bubble 8% Industrials 60% 3% 3% 5% 5% 2% Utilities Growth Value Large cap 63% 37% Mid cap 38% 62% Small cap 43% 57% 50% 40% 20% 3% 2% 10% 8% 6% 12% 10% 5%7% 0% -12% -20% 5% 53% 53% 9% 5% 14%14% 15% 13% 11% 11% 5% 18% 16% 17% 15% -10% 5% 4% 0% 50% 44% 0% 2% Materials Large cap Mid cap Small cap 30% 6% Real Estate Current Pro forma EPS, y/y 6% 5% Energy COVID-19 Earnings growth 17% 18% Cons. Staples Financial crisis 10% 15% 20% 25% 30% 35% '22 '23 -13% '24F '25F 1Q25F 2Q25F 3Q25F 4Q25F Europe relative relativevaluation valuationvs. vs.the theU.S. U.S.by bysector sector Europe Operating margins Forward premiumorordiscount discountvs.vs. the U.S. Forward P/E ratio, ratio, premium the U.S. 12-month trailing earnings relative to sales Technology Industrials Healthcare Technology Industrials Healthcare Comm. services Materials 19% 19% Discount vs. Discount vs. the U.S. U.S. the 25-year average U.S. 15% 15% Europe Current 25-year average 13% 13% Current Europe 11% 11% Materials Utilities 9% 9% '04 '04 Cons. staples Cons. staples '06 '06 '08 '08 '10 '10 '12 '12 '14 '14 '16 '16 '18 '18 '20 '20 '22 '22 '24 Buyback dividend yields Buybackand yields Previous quarter-end* Net buybacks divided by market capitalization 6% 5% 5.2% Utilities Comm. services Index Index 5% 4.2% 4% 4% Energy Financials Buyback yield Dividend yield 3.5% U.S. 3.0% 2.7% U.S. '20 '18 '22EM 3% 3% Financials Energy Cons. disc. Cons. disc. -60% -60% -50% U.S. 17% 17% -40% -40% -30% -20% -20% -10% Premium vs.Premium the U.S. 2% 2% vs. the U.S. 1% 0% 0% 10% 20% 20% 1% Europe 0% 0% -1% '04 UK '06 '08Europe '10 ex-UK '12 Japan '16 '14 Correlation between the yen and Japanese equity market Price-to-book ratio Rolling 1yr correl. between weekly change in JPY vs. USD and MSCI Japan Percent of companies with P/B ratios less than 1x, TOPIX Index 0.6 70% TSE reforms announced in Apr. 2023 65% 60% 0.4 54% 55% 50% 0.2 49% 45% 45% 40% 0.0 35% 2021-current: -0.1 30% '12 -0.2 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 Ratio of companies with net cash Share of index constituents 60% 53% -0.4 50% -0.6 2007-2019: -0.6 40% 26% 30% 20% -0.8 13% 12% Europe U.S. 10% -1.0 0% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Japan Korea '24 Global growth sectors vs. MSCI EM LATAM Top 50 performing companies globally Jan. 2015 = 100, total return, USD # of companies by country/region of listing, MSCI All Country World Index 450 LATAM U.S. growth EM ex-LATAM U.S. DM ex-U.S. 50 EM Asia tech 400 Europe biotech 40 Europe luxury goods 30 Latin America 350 20 10 300 0 '02 250 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 Representation of cyclical and technology sectors % of index market capitalization 200 80% 74% 65% 62% Cyclicals 61% 55% 60% 150 Tech 55% 40% 40% 32% 24% 100 14% 20% 14% 8% 7% 0% 0% 50 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 LATAM Japan AC World ex-U.S. China EM Europe U.S. MSCI EM Latin America intra-year declines vs. calendar year returns Local currency, average intra-year drops of 19.1% (median -16.4%) and annual returns positive in 14 of 24 years 80% 58% 55% 40% 33% 28% 34% 32% 21% 1% 19% 9% 7% 16% 14% 1% 0% -1% -9% -40% -17% -16% -23% -25% -23% -7% -4% -11% -10% -15% -15% -13% -13% -18% -20% -19% -27% -16% -7% 0% -4% -8% -11% -15% -16% -20% -15% -15% -10% -40% -42% -57% -80% '01 '04 '07 '10 '13 '16 '19 '22 S&P 500 intra-year declines vs. calendar year returns Local currency, average intra-year drops of 14.1% (median -10.3%) and annual returns positive in 34 of 45 years 40% 34% 15%17% 20% 27% 26% 26% 15% 12% 0% -7% -8%-9% -10%-17% -13% -18% -17% -40% -8% 31% 27% 20% 20% 30% 26% 9% 4% 7% 2% 1% -20% 26% 14% 3% -30% -34% 19% 13% 13% 11% 27% 10% 0% -6% -10% -16% -28% -19% -7%-1%-11% -3%-6% -7% -12% -5% -20% -34% -38% -49% -60% '80 '85 '90 '95 '00 '05 24% 23% 16% 4% -6% -3% -7% -5%-2% -8% -6% -12% -8%-10% -9% -7% -11% -8% -8% -10% -13% -14% -19% -17% -23% -20% -34% 29% 23% '10 '15 '20 -10%-8% -19% -25% Bloomberg Commodity Index Commodity prices Since index inception, total returns Bloomberg Commodity Index constituents 480 420 -57% Apr. 29, 2011 353 360 +220% +72% 300 -18% -64% 240 +131% Mar. 2, 2009 293 180 Dec. 31, 2024 239 Nov. 5, 2001 148 Mar. 18, 2020 127 120 '01 '03 '05 '07 '09 '11 Current price level Change since 12/31/2023 Change since 6/9/2022* Energy (Index level) WTI crude oil Natural gas Brent crude Low sulphur gas oil RBOB gasoline Grains (Index level) Corn Soybeans Soybean meal Wheat Soybean oil HRW w heat Industrial m etals (Index level) 29.49 $71.72 $3.63 $74.64 $695.25 $200.15 32.19 $458.50 $998.25 $307.60 $551.50 $39.78 $559.25 -3.88% 0.1% 44.51% -3.12% -7.39% -4.81% -19.90% -2.71% -22.83% -20.31% -12.18% -16.85% -12.89% -52.43% -41.0% -59.5% -39.4% -50.0% -53.2% -42.79% -40.7% -43.6% -28.0% -48.5% -51.9% -51.5% 140.32 -1.63% -23.80% Copper $402.65 3.50% -8.1% Aluminum Zinc Nickel Precious m etals (Index level) $2,536.48 $2,960.44 $15,140.07 7.87% 12.01% -7.88% -7.2% -21.5% -45.8% 743.22 26.07% 40.64% Gold $2,624.50 27.22% 42.0% Silver Softs (Index level) Sugar Coffee Cotton Livestock (Index level) $28.90 64.33 $19.26 $319.75 $68.40 21.46% 25.88% -6.41% 69.81% -15.56% 33.24% 20.71% -0.2% 36.3% -53.3% 25.11 14.22% 13.51% Live cattle $193.85 11.62% 41.4% Lean hogs $81.30 19.60% -24.0% Constituents Jul. 2, 2008 474 '13 '15 '17 '19 '21 '23 U.S. dollar share of official foreign currency reserves Global central bank reserve manager holdings % of total USD as % of total USD EUR JPY GBP RMB CAD AUD CHF Other 100% 74% 72% 70% 90% 68% 66% 80% 64% 70% 20yr avg.: 62.8% 62% 60% 60% 58% '01 50% '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 U.S. dollar share in global markets % U.S. share 40% World trade Global GDP Trade invoice FX reserves External debt Intl bank claims Intl bonds IRD turnover FX turnover SWIFT 30% 20% 10% 0% '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24* U.S. dollar share of transactions 0% 10% 20% 30% 40% 50% 60% 70% U.S. dollar and interest rate differentials Global currency returns 120 3.5% FX spot rate per USD U.S. – intl. dev. yields Dollar index U.S.* 115 Peru 110 2.5% 10-year ann. volatility 2024 return UK India 105 China 100 1.5% Eurozone Japan Colombia 95 Chile 90 0.5% South Korea Turkey 85 Russia 80 -0.5% Mexico Brazil 75 Argentina 70 -1.5% '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% Correlations, returns and yields 10-year correlations and 10-year annualized total returns, 3Q14 – 2Q24 25% Real estate Bubble size = yield Infrastructure 3% Private markets Hedge funds 20% 10-year annualized return 0% Venture Capital 15% Transport Private Equity APAC Core RE 10% Infrastructure 60/40 Direct Lending Europe Core RE 5% U.S. Core RE Hedge Funds CML - Senior* 0% -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 Trailing 10-year correlation to 60/40 portfolio 0.8 1.0 Global core infrastructure returns U.S. real estate cap rates and interest rates Rolling 4-quarter returns from income and capital appreciation Transaction based, 10-year U.S. Treasury yield 18% 10% Capital appreciation Income return 8% Cap rate 15% 6% 4% 12% 2% 9% 10Y Treasury yield 0% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 U.S. vacancy rates by property type 6% Percent, 1Q00-3Q24 20% Apartment Industrial 3% Office Retail 15% 0% 10% -3% 5% 0% -6% '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 2010 EM Asia e quity 19 . 4 % LCL LATAM sov. 18 . 7 % 2011 US D LATAM sov. 12 . 3 % US D EMD sov. 2012 2013 EM Asia e quity DM e quity 2 1. 2 % 27.4% G loba l high yie ld 2014 US D LATAM sov. 8 . 1% G loba l IG DM e quity 15 . 0 % 4.0% 17 . 4 % 2.3% 5.5% LATAM e quity G loba l high yie ld LC L LA T A M so v. G loba l IG EM Asia e quity 14 . 9 % 3 . 1% 17 . 3 % 1. 8 % 5.3% Asse t a lloc . 0.4% 2020 2021 2022 2023 2024 US D EMD sov. LATAM e quity EM Asia e quity Ca sh DM e quity EM Asia e quity DM e quity LATAM e quity LATAM e quity DM e quity DM e quity DM e quity 1. 2 % 3 1. 5 % 43.3% 1. 8 % 28.4% 28.8% 22.3% 9.5% 33.5% 19 . 2 % 354.4% 10 . 6 % LCL LATAM sov. 2.6% LCL LATAM sov. 28.9% EM Asia e quity G loba l high yie ld G loba l high yie ld 0.0% 7.3% EM Asia e quity US D LATAM sov. 13 . 3 % 2019 7.4% 19 . 6 % 14 . 8 % 2018 Ca sh US D EMD sov. LCL LATAM sov. 1. 6 % 2017 US D EMD sov. 7.3% G loba l high yie ld 2016 G loba l high yie ld Asse t a lloc . LCL LATAM sov. 17 . 1% LATAM e quity 24.2% DM e quity Asse t a lloc . DM e quity - 0.3% 15 . 0 % 2 3 . 1% US D LATAM sov. - 2.0% DM e quity Ca sh G loba l IG G loba l high yie ld 16 . 5 % 0.0% 2.5% - 2.7% US D LATAM sov. 16 . 0 % G loba l high yie ld Asse t a lloc . 14 . 3 % 14 . 8 % US D LATAM sov. 13 . 5 % LCL LATAM sov. 13 . 2 % Asse t a lloc . Ca sh G loba l IG US D EMD sov. - 3.7% 0.0% - 3.8% 10 . 2 % US D LATAM sov. 11. 4 % DM e quity Ca sh Asse t a lloc . US D EMD sov. G loba l high yie ld EM Asia e quity DM e quity G loba l high yie ld 12 . 3 % 0 . 1% 15 . 6 % - 5.3% 0.0% - 9.5% 8.2% 10 . 4 % US D EMD sov. DM e quity G loba l IG 12 . 2 % - 5.0% 12 . 5 % LCL LATAM sov. - 2.9% EM Asia e quity DM e quity G loba l high yie ld 19 . 7 % 16 . 5 % 1. 0 % G loba l IG LATAM e quity G loba l IG Ca sh Ca sh - 3.5% 17 . 9 % 10 . 1% 0.0% 1. 5 % G loba l high yie ld US D EMD sov. - 4 . 1% 15 . 0 % US D EMD sov. - 4.3% US D LATAM sov. 14 . 1% Asse t a lloc . Asse t a lloc . - 4.5% 14 . 1% US D LATAM sov. - 5.8% LCL LATAM sov. 12 . 7 % 12 . 6 % 13 6 . 8 % 5.9% DM e quity G loba l high yie ld EM Asia e quity EM Asia e quity 24.4% 9.2% 114 . 2 % 5.2% US D LATAM sov. 99.8% US D LATAM sov. 4.7% - 1. 8 % - 5.0% 20.9% US D LATAM sov. 7.8% US D EMD sov. G loba l IG G loba l high yie ld G loba l high yie ld US D EMD sov. US D EMD sov. US D EMD sov. 5.3% - 2 . 1% - 12 . 7 % 14 . 0 % 6.5% 9 6 . 1% 4.6% US D LATAM sov. 3.3% US D LATAM sov. - 3.5% US D LATAM sov. - 14 . 6 % US D EMD sov. Ca sh Asse t a lloc . Asse t a lloc . 11. 1% 5.3% 70.3% 3.6% G loba l IG G loba l IG G loba l IG 1. 9 % 59.4% 3.2% LCL LATAM sov. 37.9% LCL LATAM sov. 2.2% Ca sh Ca sh G loba l high yie ld US D EMD sov. 7.0% Asse t a lloc . Asse t a lloc . Asse t a lloc . EM Asia e quity G loba l IG 3.0% - 4.8% - 16 . 1% US D LATAM sov. 11. 0 % US D LATAM sov. - 7.7% Asse t a lloc . Asse t a lloc . EM Asia e quity US D EMD sov. LATAM e quity G loba l high yie ld Ca sh Asse t a lloc . DM e quity G loba l IG Asse t a lloc . - 0.6% - 12 . 9 % 6.5% 10 . 3 % - 6.2% 12 . 6 % 0.5% - 6 . 1% - 17 . 7 % 10 . 2 % - 4 . 1% LCL LATAM sov. - 8.2% LCL LATAM sov. - 4.2% LCL LATAM sov. - 2 1. 7 % LATAM e quity US D EMD sov. E M A s ia e quit y - 17 . 8 % 8.2% LATAM e quity LATAM e quity - 12 . 0 % - 30.8% G loba l IG EM Asia e quity LATAM e quity 7.0% - 17 . 2 % 8.9% Ca sh LATAM e quity Ca sh LATAM e quity 0 . 1% - 19 . 1% 0 . 1% - 13 . 2 % 2010-2024 Cum. Ann. 2015 G loba l IG G loba l IG 6.0% LCL LATAM sov. 0.3% DM e quity G loba l IG 9.3% - 8.2% 11. 8 % Ca sh Ca sh EM Asia e quity Ca sh LATAM e quity 0.3% 0.8% - 15 . 2 % 2.2% - 13 . 5 % - 7.7% LCL LATAM sov. - 13 . 8 % LCL LATAM sov. - 14 . 7 % 19 . 4 % 1. 2 % LATAM e quity LATAM e quity - 16 . 7 % - 1. 2 % EM Asia e quity Ca sh LATAM e quity - 20.8% 5 . 1% - 26.0% Asset class valuations Z-scores based on 25-year average valuation measures Jan. 1, 2024 Current 3 2 1.65 1.13 1.19 1.29 Fwd. P/E 0.88 1 0.62 0.11 -0.10 0 0.24 0.88 0.87 0.89 1.02 0.51 -0.20 0.23 0.14 Option adj. spread* Option adj. spread* Fwd. P/E Option adj. spread* Option adj. spread* MBS ABS U.S. Small Cap U.S. IG U.S. High U.S. Value Yield 0.09 -0.85 0.42 -0.36 -0.34 Fwd. P/E P/B -0.62 -1 -1.09 -2 Yield-toworst* Yield-toworst* Treasuries Munis** -3 DM Equity EM Equity ex-U.S. Fwd. P/E Fwd. P/E Fwd. P/E U.S. Growth U.S. Large Cap 60/40 annual return decomposition Total returns in percent, 1950-present 40% 40% 40% 34 34 34 28 28 28 30% 30% 30% 28 28 28 26 26 26 25 25 25 25 25 25 25 20 20 20 18 18 13 13 13 12 12 12 10% 10% 10% 7 7 4 4 12 12 12 44 4 0%0% 0% -3 -3 -3 -10% -10% -10% -3 -3 -3 -2 -2 -2 -6 -6 -6 -8 -8 -8 13 13 13 22 2 1919 19 15 15 15 1212 12 10 10 10 88 8 10 10 10 44 4 11 1 1 1 2222 22 21 21 21 17 17 17 17 1717 15 15 14 14 13 13 1314 12 12 12 12 10 10 10 7 7 88 8 YTD 24 24 24 21 21 21 21 21 21 19 19 19 20% 20% 20% 30 30 30 1818 18 1919 19 1111 11 121211 1111 12 11 11 88 8 66 6 44 4 44 4 11 8 8 8 9 1 1 1 00 0 00 0 -8 -8 -8 1818 1717 17 18 1515 15 1615 1414 14 -3 -3 -3 -1-1 -1 -4-4 -4 -9-9 -9 -20% -20% -20% -16-16-16 -17 -17-17 Equity return income return return 60/40 calendar year return Equity returnFixed Fixed income 60/40 calendar year return -20 -20-20 -30% -30% -30% '50 '53 '56 '59 '62 '65 '92 '95 '98 '01 '04 '07 '10 '13 '16'16 '19'19 '22'22 '50 '68'68'71 '71'71'74 '74'74'77 '77'77'80 '80'80'83 '83'83'86 '86'86'89 '89'89 '92'92 '95'95 '98'98 '01'01 '04'04 '07'07 '10'10 '13'13 '50 '53'53'56 '56'59'59'62 '62'65'65'68 '16 '19 '22 Investment opportunities outside of CDs Peak 6-month certificate of deposit (CD) rate during previous rate hiking cycles and subsequent 12-month total returns 50% Avg. 12mo. subsequent total return Peak CD rate 40% 30% 38% 31% 30% 30% 30% 6-month CDs 7% Bloomberg U.S. Agg 14% S&P 500 24% 60/40 portfolio 20% 36% 31% 26% 19% 20% 22% 21% 18% 16% 15% 13% 12% 12% 9% 10% 6% 0% -1% -10% -11% -20% Jun '84 - Jun '85 Mar '89 - Mar '90 Dec '94 - Dec '95 May '00 - May '01 Jun '06 - Jun '07 Dec '18 - Dec '19 Sep '23 - Sep '24 1984 1989 1994 2000 2006 2018 2023 S&P 500 returns around the start of Fed cutting cycles U.S. 10-yr returns around the start of Fed cutting cycles %, price return, indexed to zero at the first cut 80 %, total return, indexed to zero at the first cut 80 1995 70 70 60 2019 60 1984 50 First cut 40 First cut 50 1984 30 40 20 1989 10 30 2001 2007 1995 1989 20 0 -10 10 -20 0 2019 2024 -30 2007 2024 -10 -40 2001 -20 -50 -30 -60 -12 -9 -6 -3 0 3 6 9 12 15 Months around the first cut 18 21 24 -12 -9 -6 -3 0 3 6 9 12 15 18 Months around the first cut 21 24 Investment universe & Latin American investors Sector exposure Percentage of total net assets % of MSCI The World Index and MSCI Latin America 100% 35% 2.5% 31% Latin America 90% Developed markets 30% 26% 80% 25% 70% 20% 60% 50% 95.3% 96.9% 17% 16% 99.9% 97.5% 15% 14% 12% 40% 11% 11% 11% 10% 8% 30% 20% 0% 10% 0% 7% 6% 5% 4.7% GDP 3.1% Bond market 0.1% Equity market Average Latin American investor allocation* 10% 3% 4% 4% 2% 2% 1% 2% 1% 0% S&P 500 returns Performance of $10,000 between Jan. 1, 2000, and Dec. 31, 2024, annualized total return $80,000 $70,274 (10.2% return ) Seven of the 10 best days occurred within two weeks of the 10 worst days $60,000 $32,195 (6.0% return) $40,000 $18,951 (3.6% return) $20,000 $12,162 (1.0% return) $8,140 (-1.0% return) $5,602 (-2.9% return) $3,979 (-4.5% return) Missed 40 best days Missed 50 best days Missed 60 best days Annual avg. total return 11.6% 5.2% 9.4% Growth of $100,000 over 20 years $895,754 $276,382 $600,708 $0 Fully invested Missed 10 best days Missed 20 best days Missed 30 best days Range of stock, bond and blended total returns Annual total returns, 1950-2024 60% 40% Stocks Bonds 60/40 portfolio 52% 33% 20% 34% 20% 29% 18% 0% -13% -20% -2% -2% 1% 20% -1% 14% 1% 16% 1% 18% 6% 11% 1% -20% -37% -40% -60% 1-yr. 5-yr. rolling 10-yr. rolling 20-yr. rolling 15% 5% All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not include fees or expenses. Equities: The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip U.S. stocks. The MSCI ACWI (All Country World Index) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI EAFE Index(Europe, Australasia, Far East)is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe. The MSCI Pacific Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the Pacific region. The Russell 1000 Index® measures the performance of the 1,000 largest companies in the Russell 3000. The Russell 1000 Growth Index® measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Value Index® measures the performance of those Russell 1000 companies with lower priceto-book ratios and lower forecasted growth values. The Russell 2000 Index® measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 2000 Growth Index® measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Value Index® measures the performance of those Russell 2000 companies with lower priceto-book ratios and lower forecasted growth values. The Russell 3000 Index® measures the performance of the 3,000 largest U.S. companies based on total market capitalization. The Russell Midcap Index® measures the performance of the 800 smallest companies in the Russell 1000 Index. The Russell Midcap Growth Index ® measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth index. The Russell Midcap Value Index ® measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value index. The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The S&P 500 Index focuses on the large-cap segment of the market; however, since it includes a significant portion of the total value of the market, it also represents the market. Fixed income: The Bloomberg 1-3 Month U.S. Treasury Bill Index includes all publicly issued zero-coupon US Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed rate and non convertible. The Bloomberg Global High Yield Index is a multi-currency flagship measure of the global high yield debt market. The index represents the union of the US High Yield, the Pan-European High Yield, and Emerging Markets (EM) Hard Currency High Yield Indices. The high yield and emerging markets sub-components are mutually exclusive. Until January 1, 2011, the index also included CMBS high yield securities. The Bloomberg Municipal Index: consists of a broad selection of investment-grade general obligation and revenue bonds of maturities ranging from one year to 30 years. It is an unmanaged index representative of the tax-exempt bond market. The Bloomberg US Dollar Floating Rate Note (FRN) Index provides a measure of the U.S. dollar denominated floating rate note market. The Bloomberg US Corporate Investment Grade Index is an unmanaged index consisting of publicly issued US Corporate and specified foreign debentures and secured notes that are rated investment grade (Baa3/BBB or higher) by at least two ratings agencies, have at least one year to final maturity and have at least $250 million par amount outstanding. To qualify, bonds must be SEC-registered. The Bloomberg US High Yield Index covers the universe of fixed rate, non-investment grade debt. Eurobonds and debt issues from countries designated as emerging markets (sovereign rating of Baa1/BBB+/BBB+ and below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries are included. The Bloomberg US Mortgage Backed Securities Indexis an unmanaged index that measures the performance of investment grade fixed-rate mortgage backed pass-through securities of GNMA, FNMA and FHLMC. The Bloomberg US TIPS Index consists of Inflation-Protection securities issued by the U.S. Treasury. The J.P. Morgan Emerging Market Bond Global Index(EMBI)includes U.S. dollar denominated Brady bonds, Eurobonds, traded loans and local market debt instruments issued by sovereign and quasi-sovereign entities. The J.P. Morgan Domestic High Yield Index is designed to mirror the investable universe of the U.S. dollar domestic high yield corporate debt market. The J.P. Morgan Corporate Emerging Markets Bond Index Broad Diversified (CEMBI Broad Diversified)is an expansion of the J.P. Morgan Corporate Emerging Markets Bond Index (CEMBI). The CEMBI is a market capitalization weighted index consisting of U.S. dollar denominated emerging market corporate bonds. The J.P. Morgan Emerging Markets Bond Index Global Diversified (EMBI Global Diversified) tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans, Eurobonds. The index limits the exposure of some of the larger countries. The J.P. Morgan GBI EM Global Diversified tracks the performance of local currency debt issued by emerging market governments, whose debt is accessible by most of the international investor base. The U.S. Treasury Index is a component of the U.S. Government index. Other asset classes: The Alerian MLP Index is a composite of the 50 most prominent energy Master Limited Partnerships (MLPs) that provides investors with an unbiased, comprehensive benchmark for the asset class. The Bloomberg Commodity Index and related sub-indices are composed of futures contracts on physical commodities and represents twenty two separate commodities traded on U.S. exchanges, with the exception of aluminum, nickel, and zinc The Cambridge Associates U.S. Global Buyout and Growth Index® is based on data compiled from 1,768 global (U.S. & ex –U.S.) buyout and growth equity funds, including fully liquidated partnerships, formed between 1986 and 2013. The CS/Tremont Hedge Fund Index is compiled by Credit Suisse Tremont Index, LLC. It is an asset-weighted hedge fund index and includes only funds, as opposed to separate accounts. The Index uses the Credit Suisse/Tremont database, which tracks over 4500 funds, and consists only of funds with a minimum of US$50 million under management, a 12-month track record, and audited financial statements. It is calculated and rebalanced on a monthly basis, and shown net of all performance fees and expenses. It is the exclusive property of Credit Suisse Tremont Index, LLC. The HFRI Monthly Indices (HFRI) are equally weighted performance indexes, utilized by numerous hedge fund managers as a benchmark for their own hedge funds. The HFRI are broken down into 4 main strategies, each with multiple sub strategies. All single-manager HFRI Index constituents are included in the HFRI Fund Weighted Composite, which accounts for over 2200 funds listed on the internal HFR Database. The NAREIT EQUITY REIT Index is designed to provide the most comprehensive assessment of overall industry performance, and includes all tax-qualified real estate investment trusts (REITs) that are listed on the NYSE, the American Stock Exchange or the NASDAQ National Market List. The NFI-ODCE, short for NCREIF Fund Index -Open End Diversified Core Equity, is an index of investment returns reporting on both a historical and current basis the results of 33 open-end commingled funds pursuing a core investment strategy, some of which have performance histories dating back to the 1970s. The NFI-ODCE Index is capitalization-weighted and is reported gross of fees. Measurement is time-weighted. Definitions: Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments involve greater risks than traditional investments and should not be deemed a complete investment program. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain. The value of the investment may fall as well as rise and investors may get back less than they invested. Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same time, creates the possibility for greater loss. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the original investment. The use of derivatives may not be successful, resulting in investment losses, and the cost of such strategies may reduce investment returns. Distressed Restructuring Strategies employ an investment process focused on corporate fixed income instruments, primarily on corporate credit instruments of companies trading at significant discounts to their value at issuance or obliged (par value) at maturity as a result of either formal bankruptcy proceeding or financial market perception of near term proceedings. Investments in emerging markets can be more volatile. The normal risks of investing in foreign countries are heightened when investing in emerging markets. In addition, the small size of securities markets and the low trading volume may lead to a lack of liquidity, which leads to increased volatility. Also, emerging markets may not provide adequate legal protection for private or foreign investment or private property. The price of equity securities may rise, or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries, or the securities market as a whole, such as changes in economic or political conditions. Equity securities are subject to “stock market risk” meaning that stock prices in general may decline over short or extended periods of time. Equity market neutral strategies employ sophisticated quantitative techniques of analyzing price data to ascertain information about future price movement and relationships between securities, select securities for purchase and sale. Equity Market Neutral Strategies typically maintain characteristic net equity market exposure no greater than 10% long or short. Global macro strategies trade a broad range of strategies in which the investment process is predicated on movements in underlying economic variables and the impact these have on equity, fixed income, hard currency and commodity markets. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Some overseas markets may not be as politically and economically stable as the United States and other nations. There is no guarantee that the use of long and short positions will succeed in limiting an investor's exposure to domestic stock market movements, capitalization, sector swings or other risk factors. Using long and short selling strategies may have higher portfolio turnover rates. Short selling involves certain risks, including additional costs associated with covering short positions and a possibility of unlimited loss on certain short sale positions. Merger arbitrage strategies which employ an investment process primarily focused on opportunities in equity and equity related instruments of companies which are currently engaged in a corporate transaction. Mid-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies. Historically, mid-cap companies' stock has experienced a greater degree of market volatility than the average stock. Price to forward earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings. Price to book value compares a stock's market value to its book value. Price to cash flow is a measure of the market's expectations of a firm's future financial health. Price to dividends is the ratio of the price of a share on a stock exchange to the dividends per share paid in the previous year, used as a measure of a company's potential as an investment. Real estate investments may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector. Real estate investments may be subject to risks including, but not limited to, declines in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrower. Relative Value Strategies maintain positions in which the investment thesis is predicated on realization of a valuation discrepancy in the relationship between multiple securities. Small-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies since smaller companies generally have a higher risk of failure. Historically, smaller companies' stock has experienced a greater degree of market volatility than the average stock. The Market Insights program provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment decision-making, the program explores the implications of current economic data and changing market conditions. For the purposes of MiFID II, the JPM Market Insights and Portfolio Insights programs are marketing communications and are not in scope for any MiFID II / MiFIR requirements specifically related to investment research. Furthermore, the J.P. Morgan Asset Management Market Insights and Portfolio Insights programs, as non-independent research, have not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor are they subject to any prohibition on dealing ahead of the dissemination of investment research. This document is a general communication being provided for informational purposes only. 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