Investment Views - VP Bank

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32 | November 2010 | Asset Classes | Equities Equities Equity Markets and ETFs – Overview Product Name Underlying Provider Curr. ISIN Price YTD (indicative) Perf. % Switzerland 0.96 * CS ETF (CH) on SMI Swiss Market Index (SMI) Credit Suisse CHF CH0008899764 64.69 1.47 UBS-ETF SLI Swiss Leader Index Swiss Leader Index (SLI) UBS CHF CH0032912732 101.22 2.38 CS ETF (CH) on SMIM Swiss Market Index Mid (SMIM) Credit Suisse CHF CH0019852802 136.12 9.66 Europe 6.71 * iShares MSCI Europe MSCI Europe BlackRock EUR DE000A0M5X28 16.90 7.13 db x-trackers EURO STOXX 50 EURO STOXX 50 Index Deutsche Bank EUR LU0274211217 28.87 –1.41 iShares DAX DAX (Germany) BlackRock EUR DE0005933931 59.92 7.56 db x-trackers FTSE 100 FTSE 100 (UK) Deutsche Bank GBp LU0292097234 581.15 8.29 Lyxor ETF CAC 40 CAC 40 (France) Lyxor EUR FR0007052782 38.08 –0.78 Lyxor ETF IBEX35 IBEX 35 (Spain) Lyxor EUR FR0010251744 109.30 –6.05 North America 6.05 * iShares MSCI North America MSCI North America BlackRock USD IE00B14X4M10 23.50 5.72 Dow Diamonds Dow Jones Index (US) StateStreet USD US78467X1090 111.01 7.48 iShares S&P 500 S&P 500 Index (US) BlackRock USD IE0031442068 11.69 5.49 PowerShares EQQQ Fund Nasdaq Composite Index (US) PowerShares USD IE0032077012 51.14 11.38 UBS-ETF MSCI Canada MSCI Canada (Canada) UBS CAD LU0446734872 32.48 7.39 Pacific 8.00 * ComStage ETF MSCI Pacific TRN MSCI Pacific ComStage USD LU0392495023 39.59 13.54 ** iShares MSCI Japan MSCI Japan (Japan) BlackRock JPY IE00B02KXH56 832.00 –7.27 Tracker Fund of Hong Kong Hang Seng Index (China) StateStreet HKD HK2800008867 24.35 11.32 SPDR S&P/ASX 200 Fund S&P/ASX 200 (Australia) StateStreet AUD AU000000STW9 44.26 –1.32 Emerging Markets 13.10 * iShares MSCI Emerging Markets MSCI Emerging Markets BlackRock USD IE00B0M63177 43.06 13.20 db x-trackers MSCI EM Asia MSCI Emerging Markets Asia Deutsche Bank USD LU0292107991 37.68 14.98 db x-trackers MSCI EM LATAM MSCI Emerging Markets Latin America Deutsche Bank USD LU0292108619 65.71 11.37 db x-trackers MSCI EM EMEA MSCI EM Europa, Middle East and Africa Deutsche Bank USD LU0292109005 25.27 20.16 * Figures refer to their respective MSCI index ** Since launch on 06/01/2010
Equities | Pascal Tschütscher Regions and Themes Germany: Above-average Performance Current economic developments continue to put Germany in a favorable light compared with the rest of Europe, though clouds are now appearing on the horizon. Vigorous growth in Asia and a weak euro have boosted German exports in 2010 and highlighted the structural strength of many German manufacturing firms. Numerous companies have reported remarkably good half-year results. This robust business performance is reflected in the above-average showing of the German equity market, which has outpaced many major European and North American indices. Year-to-date Performance of Major Equity Markets 10% 8% 6% 4% 2% 0% –2% –4% –6% –8% 6.21% S&P 500 –6.44% TOPIX CAC 40 SMI FTSE 100 DAX Year-to-date performance in local currency Legal notes on page 60. –0.11% 1.79% 8.35% 8.95% DAX Still Attractive Is the German equity market therefore already too expensive? We think not. Based on the price/book ratio for 2011 (1.5x) the DAX is roughly on a par with other markets and still around 15% – 20% below its historical average. The price/earnings ratio based on the Bloomberg consensus for 2011 (10.7x) and 2012 (9.6x) presents a similar picture. Here too the long-term average (15.2x) is around 25% higher. Thus the p/e for the next two years imply profit improvements of 11% and 13% respectively. Assuming solid economic growth of around 2.5% next year, this is a realistic outlook. Encouraging Profit Revisions Expectations regarding the current reporting season are upbeat – realistically so, in our view. The latest profit revisions for the German equity market in 2010 and 2011 are above the European average. Profit forecasts for the 30 blue chips in the DAX have been revised sharply upwards over the last three months. The recent appreciation of the euro will have hardly any impact on this outlook. The average EUR/USD exchange rate in the second and third quarters was only marginally different from analysts’ assumptions. Profit Revisions DAX FTSE 100 SMI –1.98% Highlights • Attractive valuations, upward profit revisions and the sustained growth of demand in emerging markets are convincing arguments for an overweighting of German equities. • In Brazil the positive outlook for economic growth is balanced by the latent danger of further capital controls. CAC 40 –0.19% (in %) –2.5 –2.0 –1.5 –1.0 –0.5 0 0.5 1.0 1.5 2.0 2.5 2011 profit revisions made in last 3 months Sources: VP Bank, IBES 0.15% 1.86% We Remain Optimistic Now that Germany has secured its position as a major exporter on world markets, it will continue to profit from the growing economic strength of the emerging economies over the years ahead. At the same time, lower-than-expected unemployment will have a positive impact on domestic private consumption, which has been conspicuously weak in recent years. However, the improvement in the German labor market is bound to slow down, and economic momentum is now 33 | November 2010 | Asset Classes | Equities
Page 1 and 2: Investment Views November 2010
Page 3 and 4: Contents Foreword 4 Current Market
Page 5: Current Market Assessment The table
Page 8 and 9: 8 | November 2010 | Focus | Top Iss
Page 10 and 11: 10 | November 2010 | Focus | Econom
Page 13 and 14: 2. Asset Classes Money Markets
Page 15 and 16: Money Markets | Oliver Schlumpf Mar
Page 17: Money Markets Selected Products Pro
Page 20 and 21: 20 | November 2010 | Asset Classes
Page 29 and 30: 2. Asset Classes Equities
Page 31: Equities | Bernd Hartmann Market Ou
Page 35 and 36: Equities Selected VP Bank Equity Fu
Page 37 and 38: Equities | Rolf Kuster Sectors Divi
Page 39 and 40: Europe ex-Switzerland Sector/Compan
Page 41: Asia-Pacific Sector/Company Industr
Page 51 and 52: 3. Investment Management Mandates
Page 53 and 54: Investment Management Mandates | Pa
Page 55 and 56: 55 | Der Blindtext | VP Bank Bank 4
Page 57 and 58: Financing Products The tables below
Page 59 and 60: Glossary Allocation Strategic Long-
Page 61 and 62: Explanatory notes on conflicts of i

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