BLOOMBERG COMMODITY SOLUTIONS. Carole Bernard, Index Specialist, Bloomberg L.P

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1 BLOOMBERG COMMODITY SOLUTIONS Carole Bernard, Index Specialist, Bloomberg L.P

2 START OF 2016 HAS BEEN MARKED BY First month of 2016 and it feels like the year of the bear with all asset classes down significantly VIX moved above psychological 40 level while the VIX oil is close to 150 showing market stress

3 ASSET CLASS PERFORMANCE Ranked Asset Class Performance YTD Source: Bloomberg L.P. Annual data, 31/12/ /01/2016. Commodities represented by BCOMTR. Equities represented by MXWO. Bonds represented by LEGATRUU. Real Estate represented by BWREAL. Cash represented by JPCAUS3M

4 COMMODITY PERFORMANCE Commodity Performance YTD Source: Bloomberg L.P. Annual data, 31/12/ /27/2016. BCOM Composite used to represent Diversified. BCOM Sector indices used to represent Energy, Industrial Metals, Precious Metals, Agriculture & Livestock. BCOM Roll Select index used for Curve Play and UBS Bloomberg CMCI used for Alternative Roll. Total Return indices used in all cases.

5 ENERGY COMMODITY SECTORS ROTATION ANALYSIS RRG<GO> Source: Bloomberg L.P., 27/01/2016 "JdK RS Ratio" is an indicator that uses a normalization algorithm which takes into account not only the comparison against the benchmark but also the comparison to all other elements in the universe. The result is a line that oscillates around the 100 level, where values above 100 indicate a positive trend in the RS line and vice versa. JdK RS Momentum indicator helps identify not only the positioning, but also the trend Is the position getting stronger or weaker (JdK RS Momentum line is a normalized measure of the Rate of Change of the JdK RS Ratio line).

6 OIL VOLATILITY HGIH OR RANGEBOUND? GV<GO>, OVDV<GO>

7 OIL MARKET DRIVERS OPEC<GO>

8 OIL A CLOSER LOOK AT GLOBAL PRODUCTION G<GO> CUSTOM GRAPH

9 ENERGY COMPANIES FINANCING TRAP? BI OILS<GO> U.S.-listed independent E&Ps have continued to significantly underperform the S&P 500 as oil prices remain depressed. Concerns are mounting that oversupply in the market may last for years, suppressing prices and reducing activity.

10 ENERGY COMPANIES FINANCING TRAP? PORT<GO> At least 180 bonds issued by North American energy companies with an aggregate face value of more than $88 billion were trading with an option-adjusted spread of over 1,000 bps in early December, according to Bloomberg data. That's grown from over $77 billion in early November as oil prices have dropped below $35 a barrel for the first time since BUHY INDEX PORT <GO> - BUHY Bloomberg USD High Yield Corporate Bond Index

11 ENERGY COMPANIES FINANCING TRAP? BI STRT<GO> North American energy companies with bonds trading at distressed levels may find themselves with some breathing room in 2016 due to a lack of debt maturities. Only one of 180+ bonds with an aggregate face value of at least $88 billion that's trading with an option-adjusted spread of over 1,000 bps in early December has a scheduled maturity date in Looking at Bloomberg HY energy index, refinancing is going to be a concern for US producer from 2019

12 ENERGY COMPANIES FINANCING TRAP? BI STRT<GO>

13 COMMODITY ETPs FLOWS ETF<GO>

14 WHAT WILL 2016 BRING FOR COMMODITIES? Money managers increased their combined net-bearish position across 18 raw materials to the biggest ever, doubling the negative bets in just two weeks.

15 COMMODITY INDEX AUM BCOM ~$44B in Q4 15 (~$55.25B in 3Q15) 1/3 BCOM 1/3 Modified BCOM 1/3 Forward, Singles, Sectors Sizable AUM linked to proprietary commodity benchmarks UBS Bloomberg CMCI, Credit Suisse CI, Deutsche Bank CI Estimated total AUM tracking benchmark commodity indices: ~$90B 50% drop in 5 years Source: AUM based on Bloomberg estimates

16 COMMODITY RESEARCH BCOM TABLES & CHARTS

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