Global Asset Allocation & Investment Strategy

Transcription

1 Global Asset Allocation & Investment Strategy

2 QUARTERLY INVESTMENT STRATEGY 5 GLOBAL ASSET ALLOCATION SUMMARY Global Asset Allocation* N + Equities Fixed Income Commodities Cash Notes: * 3-6 month horizon - denotes maximum underweight, N denotes neutral, + denotes maximum overweight. Equities Overweight As we head into the final stretch of 214, investors start to focus on 215. Consensus GDP forecasts for most parts of the world and consensus earnings forecasts for most regions indicate better growth in the coming year. In a world of improving growth we remain biased toward equity investments. We view equity valuations in many parts of the world as above average but not excessively so and traditionally markets do not start de-rating valuations until the end of an investment cycle. We use several models to help predict the economic cycle and our conclusion is we are at least a few years away from a new downturn. We remain overweight on equities with a bias towards the US and Asia. Fixed Income Underweight Stronger growth and the start of some modest interest rate normalisation in the US make fixed income investments relatively less attractive at this stage in the cycle compared with equities. At the same time, the levels of growth are modest and we do not think interest rate normalisation will be sharp or dramatic. Therefore we are not very bearish on fixed income investments. We expect that a gradual path to interest rate normalisation will create some modest headwinds to fixed income performance but believe that fixed income investments still have a place in most portfolios as a balance to the risks of low inflation and deflation. We remain underweight on fixed income with a bias toward emerging markets (EM). Commodities Neutral While commodities do well traditionally in the later stages of a growth cycle, we find that the combination of a strong US dollar and changes in the construction demand for Chinese property has resulted in a commodity outlook that is more complicated than usual. For this reason, we stay neutral on commodities. UOB Asset Management

3 6 QUARTERLY INVESTMENT STRATEGY Economic Forecasts Real GDP Actual Forecasts World (2.7) 3. (3.1) United States (2.2) 3. (3.) Eurozone (1.1) 1.5 (1.5) Japan (1.5) 1.2 (1.2) UK (3.) 2.6 (2.5) China (7.4) 7.2 (7.2) India (4.7) 5.4 (5.4) Brazil (1.3) 1.6 (1.8) Russia (.5) 1.2 (1.8) Figures in brackets are as at 3 June 214 Note: All data are sourced from Bloomberg, Datastream and UOB Asset Management (UOBAM) unless otherwise stated, as at 8 September 214. CPI Actual Forecasts World (2.7) 2.8 (2.8) United States (1.8) 2.2 (2.1) Eurozone (.7) 1.2 (1.2) Japan (2.7) 1.8 (1.8) UK (1.8) 1.9 (2.) China (2.5) 2.9 (3.) India (4.7) 5.4 (5.4) Brazil (6.4) 6.2 (6.3) Russia (6.8) 6. (5.5) Figures in brackets are as at 3 June 214 Note: All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214. Please refer to the last page for the important notice & disclaimer.

4 QUARTERLY INVESTMENT STRATEGY 7 Economic Indicators Source: Bloomberg and HSBC, updated as at 8 September 214 Note: All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214. UOB Asset Management

5 8 QUARTERLY INVESTMENT STRATEGY Advanced Economies Emerging Economies PMI PMI 58 US US Euro Zone Japan Japan 58 Brazil Brazil Russia India India China China Real GDP (QoQ%, saar)* Real GDP (QoQ%, saar)* US Euro Zone Japan Brazil Russia India China US Euro Zone Japan 12 Brazil Russia India China CPI (YoY%) CPI (YoY%) US Euro Zone Japan Brazil Russia India China 5 12 Brazil Russia India China US Euro Zone Japan *For some economies, annualised GDP data were estimated by UOBAM. For India, data are in year-on-year percentages (YoY%). Note: All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214 Please refer to the last page for the important notice & disclaimer.

6 QUARTERLY INVESTMENT STRATEGY 9 Advanced Economies Emerging Economies IP (YoY%) IP (YoY%) Brazil Russia India China US US Euro Zone Japan Japan Brazil Russia India China Retail Sales (YoY%) Retail Sales (YoY%) Dec1 US Euro Zone Japan US Euro Zone Japan Dec11 Dec12 Dec13 Brazil Russia China 25 Brazil Russia China UOB Asset Management

7 1 QUARTERLY INVESTMENT STRATEGY Market Performance Asset Class Indices (Rebased 1 on 31 December 213) E B C Co Equities 5.6% Bonds 4.2% Cash.2% Commodities -.5% Dec 31-Jan 28-Feb 31-Mar 3-Apr 31-May 3-Jun 31-Jul 31-Aug Note: All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214 Advanced Economies Equity Indices (Rebased 1 on 31 December 213) Emerging Economies Equity Indices (Rebased 1 on 31 December 213) EM 8.5% USA 8.4% AC World 5.6% EM US AC Eu Europe -.4% Japan -2.1% Jap EM EM Latin Latin Am 14.5% Am 14.5% AsiaxJapan 9.% EM 8.5% AsiaxJapan 9.% EM 8.5% EM Europe -8.9% EM Europe -8.9% Dec 31-Jan 28-Feb 31-Mar 3-Apr 31-May 3-Jun 31-Jul 31-Aug 8 31-Dec 31-Jan 28-Feb Fixed Income Indices Fixed Income Indices (Rebased 1 on 31 December 213) (Rebased 1 on 31 December 213) 18 Asia 7.7% Asia 7.7% High Yield 5.5% Singapore Govt 4.7% Sovereigns 4.5% Investments 4.4% G7 GBI 4.2% High Yield 5.5% Singapore Govt 4.7% Sovereigns 4.5% Investment 4.4% G7 GBI 4.2% Dec 3-Jan 28-Feb 31-Mar 3-Apr 31-May 3-Jun 31-Jul 31-Aug 3-Dec 3-Jan 28-Feb 31-Mar 3-Apr 31-May 3-Jun 31-Jul 31-Aug 31-Mar 3-Apr 31-May 3-Jun 31-Jul 31-Aug Sovereign 9.8% Investm Investment 9.2% Corporate 7.7% Yie High Yield 6.5% Please refer to the last page for the important notice & disclaimer.

8 QUARTERLY INVESTMENT STRATEGY 11 Commodities and currencies Commodity Indices (Rebased 1 on 31 December 213) Dollar Spot (Rebased 1 on 31 December 213) GSCI Light -.5% Energy -2.3% -2.3% Agriculture -7.9% -7.9% Dec 31-Jan 28-Feb 31-Mar 3-Apr 31-May 3-Jun 31-Jul 31-Aug Gold 6.8% Gold 6.8% Industrial Metals 4.8% Metals 4.8% GSCI Light -.5% Currency Return (%) Currency Return (%) Australian Dollar Japanese Yen Singapore Dollar British Pound Norwegian Krone Canadian Dollar Swiss Franc Euro Swedish Krona Brazilian Real Inddian Indian Rupee Korean Won Indonesian Rupiah Chinese Renminbi Thai Baht Mexican Peso Taiwan Dollar South African Rand Russian Ruble % change versus USD from 31 December 213 to 29 August 214 % change versus USD from 31 December 213 to 29 August 214 Note: All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214 UOB Asset Management

9 12 QUARTERLY INVESTMENT STRATEGY Market Indicators Equities Developed Markets Emerging Markets Earnings Revision by Regions for FY2 Earnings Revision by Regions for FY2 EUROPE BRAZIL LATIN AMERICA WORLD AC ASIA EX JAPAN JAPAN EMERGING MARKETS US CHINA INDIA AUSTRALIA EMEA Revisons in previous 2 mths Revisons in previous 2 mths CANADA Revisions last mth RUSSIA Revisions last mth % Change % Change Earnings Revision by Sectors for FY2 Earnings Revision by Sectors for FY2 Materials Cons Discr Utilities Industrials Cons Staples Financials MSCI AC World Telecom Materials Industrials IT Cons Discr Cons Staples MSCI Emerging Markets Financials Utilities IT Energy Revisons in previous 2 mths Revisions last mth Energy Telecom Revisons in in previous 2 mths 2 mths Revisions last mth Revisions last mth Health Care Health Care % Change % Change Earnings Yield Ratio* Earnings Yield Ratio* Mean+1SD,3.2x Aug-14,2.8x 2. Mean,2x 1. Mean-1SD,.9x. Dec-98 Dec-99 Dec- Dec-1 Dec-2 Dec-3 Dec-4 Dec-5 Dec-6 Dec-7 Dec-8 Dec-9 Dec-1 Dec-11 Dec-12 Dec-13 *Mean and SD are based on data from *Mean and SD are based on data from Note: All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214 Please refer to the last page for the important notice & disclaimer.

10 QUARTERLY INVESTMENT STRATEGY 13 Others P/BV vs ROE by Region PE vs Growth by Region 2.5x US 16x 15x Canada World US 14x Australia AC World P/BV - FY1 (X) 2.x World Canada Australia AC World Europe Latin America PER FY2 (X) 13x 12x 11x Japan Asia Ex Japan Europe Latin America 1.5x Asia Ex Japan 1x Japan EMEA 9x EMEA 1.x 8% 9% 1% 11% 12% 13% 14% 15% 16% 17% ROE - 2yr Forward Avg. (%) 8x 7% 8% 9% 1% 11% 12% 13% 14% EPS CAGR FY1-3 (%) P/BV vs ROE by Sector PE vs Growth by Sector 4.x 3.6x Consumer Staples Healthcare 18.x 17.x Consumer Staples 3.2x IT 16.x Healthcare P/BV - FY1 (X) 2.8x 2.4x 2.x Industrials Telecom Svcs AC World Materials Consumer Discr PER (FY2) 15.x 14.x 13.x IT Telecom Svcs Industrials AC World Consumer Discr Materials 1.6x Utilities Energy 12.x Energy Financials 1.2x Financials 11.x.8x 9% 11% 13% 15% 17% 19% 21% ROE - 2yr Forward Avg. (%) 1.x 5% 7% 9% 11% 13% 15% 17% EPS CAGR FY1-3 (%) Note: All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214 UOB Asset Management

11 14 QUARTERLY INVESTMENT STRATEGY Fixed Income Central Bank Interest Rate Country United States Interest Rate Fed Funds Target Rate US Current Rate (%pa) Latest Meeting Change at Latest Mtg (bp).25 3 Jul Eurozone Refinance Rate.5 4 Sep 214 (1) Japan United Kingdom Brazil Russia BOJ Overnight Call Rate UK Offical Bank Rate Brazil Selic Target Rate Russia Refinacing Rate Announcement.1 17 Jun Sep Sep India Reverse Repo Rate 7. 5 Aug Last Change 16 Dec 28 (-75bp) 4 Sep 214 (-1bp) 19 Dec 28 (-2bp) 5 Mar 29 (-5bp) 2 Apr 214 (+25bp) 13 Sep 212 (+25bp) 28 Jan 214 (+25bp) Next Meeting 18 Sep Oct Oct Jul Sep 214 China Interbank Repo 1D South Africa South Africa Repo Avg Rate Sep July 214 (+25bp) 18 Sep 214 Source: Bloomberg, updated as at 8 September 214 US Treasury Curve Euro Benchmark Curve 4 3 9/2/214 Beginning of Year 9/2/214 Beginning of Year 4 9/1/214 Beginning Beginning of Year of Year 3 Mid Yield (%) 2 1 3M 2Y 5Y 1Y 3Y Mid Yield (%) M 2Y 5Y 1Y 2Y 3Y Japan Sovereign Curve Developed Markets Yield Curve 4 9/1/214 Beginning of Year US Japan Europe 9/1/214 Beginning of Year 4 US Japan Europe Mid Yield (%) Mid Yield (%) M 2Y 5Y 1Y 2Y 3Y -1 3M 2Y 5Y 1Y 3Y Please refer to the last page for the important notice & disclaimer.

12 QUARTERLY INVESTMENT STRATEGY 15 Developed Markets Emerging Markets 1 Year Govt Yield (%) 1 Year Govt Yield (%) US Euro Japan UK Brazil Russia India China US Euro Japan UK 14. Brazil Russia India China Bond Spread Bond Spread Basis Points 1, Bond Spread DM DM Investment Grade DM Grade High Yld DM High Yld Basis Points 1,2 1, Bond Spread EM High Yld EM Investment EM High Yld Grade EM Investment Grade 2 2 Note : All data are sourced from Bloomberg, Datastream and UOBAM unless otherwise stated, as at 8 September 214 UOB Asset Management

13 16 QUARTERLY INVESTMENT STRATEGY GLOBAL INVESTMENT STRATEGY: LOOKING BEYOND THE WAVES Summary Headlines on growth remain positive. US growth continues to improve, Europe has rebounded from recession and Asian growth has improved. The global environment remains clear and attractive for equity investment and we maintain our overall asset allocation views. The US continues to lead the world. The US reported weak growth in the first quarter and 214 GDP expectations were revised down accordingly. However, the downward revisions have hidden the fact that the run rate of US growth is expected to return to three per cent levels on a quarterly basis and thus growth in the US is no longer sub-par. In fact, many economic indicators and data series have posted strong jumps in recent periods and bode well for US prospects. Economic trends are more mixed around the rest of the world and many regions are counting on the strong US growth and the stronger US dollar to give them a boost. A path of interest rate normalisation will start in 215. As US data improves and employment trends look healthier, expectations are that the US Federal Reserve (Fed) will finally start to normalise its monetary policy. In 214, the Fed has steadily wound down its quantitative easing (QE) programme (expected to end in October 214) and in 215 it will likely start a path of raising interest rates at a gradual pace. As US rates and US dollar trends influence heavily global currencies and rates, this will be a trend that will weigh on global markets. While there will be some volatility in fixed income and equity markets, we expect the path of increasing interest rates to be gradual and the volatility to be contained. Deflation risks growing below the surface. While the headlines on growth remain healthy, there has been a problem brewing with inflationary trends (or lack of) across developed markets. Low inflation in Europe stands out as the most worrisome trend but despite aggressive monetary policies, Japan and the US have also not yet been able to achieve inflation targets. If the world slips into true deflation, fixed income becomes the more attractive asset class. Please refer to the last page for the important notice & disclaimer.

14 QUARTERLY INVESTMENT STRATEGY 17 Outlook As we start the fourth quarter of 214, the headlines and consensus forecasts on global growth remain healthy and we maintain our positive overweight view on equities. However, below the headlines, we see complicated trends of low inflation and deflation brewing which are critical to monitor. For now, we see enough policy stimuli which should be able to combat low inflation or deflation risks. But if the policies prove ineffective, growth and equity investments will lose their attractiveness. Headline growth and consensus forecasts improving into 215 While there were growth disappointments in the first quarter of 214, recent trends and leading indicators helped provide a basis for a confident outlook in economic trends. Most notably, the US is expected to see GDP growth rise from two per cent in 214 to three per cent in 215. Growth levels of two per cent have been considered sub-par but a three per cent growth level would be considered a return to a more normal level of growth. Further, only the first quarter of 214 was weak for the US and it is expected to run at a three per cent trend for the rest of the year. GDP forecasts continue to point to a global recovery Actual Forecasts United States Euro Area Japan China India Brazil Russia Source: UOBAM and Bloomberg. updated as on 3 September 214 UOB Asset Management

15 18 QUARTERLY INVESTMENT STRATEGY European growth rebounded from recessionary levels in 213 and while there have been some concerns on recent leading indicators, consensus expectations are still for further improvements in 215. The largest emerging markets suffered some growth weakness in late 213 and early 214 but expectations are also for improvements in 215. On top of a fairly solid global growth outlook, there have been leading indicators in the US that could be described as blowout reports and these could be signalling further improvements for the US economy. The blowout signals include the Institute for Supply Management (ISM) report which jumped unexpectedly to a level of 59 in August 214, up from the low 5 s level earlier in the year and matching the highest levels achieved in the recovery. Durable goods surged 22 per cent in August and while inflated by some big transport orders, this reflects some healthy economic activity. Several employment indicators, including the unemployment claims, the pace of new jobs in non-farm payrolls and the job opening surveys, are at the strongest levels achieved in over a decade. The unemployment rate, at 6.1 per cent as at August 214, still has room for improvement but the rate of improvement has been better than expected. Expectations for US growth are already healthy at three per cent for 215. However, if the more recent indicators continue to remain at elevated levels in the next couple of months, we would expect that there is room for US GDP forecasts to be raised further towards 3.5 per cent. For now, we are expecting a three per cent growth but see upside risks that we are monitoring. US growth implies US will start a path of interest rate normalisation US employment, growth and inflation trends have all increased over the past quarter but surprisingly, long-term yields on the 1-year US Treasuries (UST) have remained at low levels of close to a 2.5 per cent average yield as at early September. Our earlier long-term target for the 1-year UST yield had been for at least three per cent by the end of 214 but we now reduce our year-end target to a range of 2.65 per cent to 2.85 per cent. This lower target is due partly to the effects of European low yields pulling down US yields. It is also a reflection of the market reality that growth and inflation will have to pick up even more to impact longterm UST. While we find the growth trends and some signs of inflationary trends normalising, it appears that the broader market still lacks conviction on US growth and it will take longer than expected for the market to price in our expected growth levels. There are signs that the Fed is increasingly of the view that employment is healing enough and that it may begin a process of interest rate normalisation. The first step in this process was started at the end of 213 when the Fed started to wind down its QE programme. We expect the programme to end by October 214. The next phase of policy normalisation will be the increase of the Fed funds rate which we expect to start by mid-215. Key trends that are most convincing to us and are likely to be the drivers of the policy changes are the trends in employment, credit growth and prices in key core segments of the economy. Unemployment is likely to fall to a range of five per cent to six per cent by early-215. This is a range that has triggered rate increases in previous cycles. Bank credit expansion has been lacklustre since the crisis in 28 but has appeared finally on a path to grow at a high single-digit level in 214. Bank credit growth is a signal that the market between savers and borrowers is finally starting to clear and that there are enough borrowers to justify an increase in interest rates. Borrowers are saying they have enough confidence to borrow at zero per cent. Next year, the Fed is likely to test if there is enough confidence for borrowers to borrow at one per cent to two per cent. Other key trends that support the start of interest rate normalisation involve the increases in many core prices tracked by most economists. Most importantly, wages are increasing, notably in key segments such as manufacturing where wages increased from two per cent at the start of 214 to 2.4 per cent by the middle of the year. Prices of primary residential rents have picked up from 2.8 per cent (CPI rate) to 3.3 per cent rates. Overall inflation has been increasing Please refer to the last page for the important notice & disclaimer.

16 QUARTERLY INVESTMENT STRATEGY 19 as well. Core Personal Consumption Expenditures (PCE) inflation monitored by the Fed increased from 1.1 per cent at the start of the year to 1.5 per cent by the middle of the year. Core CPI is almost at the Fed s two per cent target after climbing to 1.9 per cent by mid-year. To be clear, inflation and growth trends are not excessively strong and it would be wrong to sound alarm about the trends versus the current policy stance. However, key economic indicators seem strong enough to warrant the inclusion of interest rate increases as part of our investment views. It is also important to track whether growth is strong enough to warrant a fast pace of rate increases over the coming year or at a slower pace than we have seen before. Our view remains that growth is strong enough to start the increase in rates but insufficient for an expectation of a steep path of increases throughout the year. Interest rate cycles in the rest of the world are more mixed. Most developed markets are not likely to raise rates in the next year and some emerging markets have already raised rates to some degree over the past year. Nevertheless, with the US dollar being the largest reserve currency in the world, the start of an increase in the US rate cycle should have significant effects on most regions. We would expect that either the currencies of other regions will depreciate versus the US dollar (as we would expect in Europe and Japan), or interest rates will see some further increases (as we would expect in some emerging markets). Underlying anxiety over deflation still weighing on markets Central banks in developed markets have been very aggressive in expanding their balance sheets over recent years. Most notably, the Fed s balance sheet is up 1 per cent over the past two years and the Bank of Japan s balance sheet is up 75 per cent. The European Central Bank (ECB) was aggressively expanding its balance sheet on the back of the long-term refinancing operation (LTRO) programme in 212 but as banks paid down its LTROs in late 213 and early 214, the ECB s balance sheet has declined again. Global Central Banks Balance Sheets US Federal Reserve Bank of Japan ECB Bank of England Switzerland Central Bank Source: UOBAM, Bloomberg, 1 September 214 Despite the aggressive central bank policies, inflation in the developed markets remains very low. The economist Milton Friedman famously said that inflation is always and everywhere a monetary phenomenon and most economists still accept that today. Many economists are surprised and concerned that the aggressive actions have resulted in such small effects on inflation. While the US core PCE inflation index has improved, it is still below its targets. Japan s inflation levels are only marginally above one per cent and after years of deflation, it is not clear that this one per cent level is sustainable. Alarmingly, Europe s inflation has fallen to very low levels. Core CPI has fallen below one per cent and overall CPI has fallen to.5 per cent. The deflationary fear that is brewing among investors is that if these aggressive central bank policies have not stabilised inflation, deflation may be a bigger risk than expected. Also, the region that appears to have the greatest risk of low inflation is the Eurozone where the central bank has the most constraints. While the ECB has announced quantitative measures to extend a targeted LTRO programme and to purchase asset-backed securities (ABS), it remains unclear how fast and how large a scale these programmes will be implemented and if they will be enough to stop the deflationary trends. Our view is that US growth is strong enough to support inflation in the country and that Japan s QE is aggressive enough for us to expect more inflation. However, it is not clear if the ECB has done enough to stabilise inflation. UOB Asset Management

17 2 QUARTERLY INVESTMENT STRATEGY The deflationary risk has a critical impact on our strategy. As part of our asset allocation strategy, we seek out markets that are continuing to deploy an equity-focused strategy through the expansion phase of their investment cycle. However, if a country or region falls into deflation, then our strategy would switch to a fixed income focus. We would argue that Japan s investment markets in the past couple of decades have provided an outline of what other regions that fall into deflation may experience. In Japan s case it suffered many years of weak equity market performance. While nominal interest income on Japanese fixed income securities achieved only low yields, the deflation provided effectively healthy real yields (i.e. the real yield being the stated yield minus the inflation rate. The real yield climbs when inflation turns negative.). Further, in an environment of deflation, the currency starts to strengthen as it prices in inflation differences, which was a clear pattern for the Japanese yen over the prior two decades. Geopolitical Risks While we have expressed a positive view on global macroeconomic trends, it is clear that tail risks (i.e. lower probability but potentially significant risk events) remain in global markets. As at the end of 214, the most significant risks appear to be geopolitical risks. The conflict in Ukraine has the potential to draw in Russia and trigger more European sanctions that could affect negatively the economies in both Europe and Russia. The conflict in Iraq threatens to draw the US into another messy, expensive and drawn out conflict. Israel s conflict in Gaza has the potential to trigger broader Middle East conflicts. Scotland s vote on independence could introduce political uncertainty to the UK and Europe as a whole. Generally, our view is that it almost never pays to overreact to geopolitical risks. Even in the biggest wars and conflicts over the past several decades, it did not pay to change investment strategy in the face of major conflicts. Nevertheless, investors should be mindful of the near-term volatility which the risks can trigger. Specifically, we continue to view most of these risks as lower probability events without dismissing them. Assessment In summary, the macroeconomic environment still offers healthy growth trends that are conducive to growth in corporate profitability, resulting in an attractive part of the economic cycle for equities. At the same time, we expect growth to push up the market in terms of long-term yields and the Fed to start to normalise short-term interest rates. Rising rates would provide a headwind to fixed income markets, though we are quick to mention that we expect only a gradual increase in rates and do not expect the headwind to fixed income to be very strong. Overall, such an environment of healthy growth and rising rates is clearly favourable to equities over bonds and we stay with our view to be overweight on equities. Within equities, we are most overweight on the US, neutral on Asia and underweight on most other regions including Europe, Japan and Latin America. We view valuations in the US as slightly above average but they are within our expectations at this stage of the cycle. Within fixed income markets, we prefer credit to government bonds, hard currency bonds to local currency bonds and Asia to most other markets. Overall, the key headline macro data points decidedly to an equity growth environment. However, we are keeping an eye on deflationary trends which have the potential to reverse our investment strategy should deflation really take hold in developed markets. In the absence of these risks, we would argue that this is the clearest stage in the cycle to advise an asset allocation strategy that is overweight on equities. Please refer to the last page for the important notice & disclaimer.