how inequality is eating capitalism - Citywire [PDF]

April 2014

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ARE EMERGING MARKETS UNINVESTABLE?

HOW LEADING ASSET ALLOCATORS ARE HEDGING EQUITY RISK

HOW INEQUALITY IS EATING CAPITALISM By professor Robert Skidelsky

TECHNICAL ANALYSIS: Q2 IS ALL ABOUT THE DOLLAR

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Asset management as it should be The value of investments may go down as well as up and investors may not get back the original amount invested. For professional advisers only – not for use by retail investors. The Trust will invest substantially in stocks in the UK and will therefore have greater exposure Prospectus and Key Investor Information Document (KIID) for a fuller description of the risks prior to investing. Investment is subject to documentation Investment Management LLP which is authorised and regulated by the Financial Conduct Authority. Registered address: 25 Moorgate London EC2R 6AY.

to the market, political and economic risks in the UK than if it was more diversified across a number of countries. Please read the Risk Section of the Fund’s (Prospectus, KIID, and Terms & Conditions) copies of which can be obtained free of charge in English at www.sandwfunds.com. Issued by Smith & Williamson

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CONTENTS

Seeking returns from global diversification? APRIL 2014 / ISSUE 11

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7.39%

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5 years (p.a.)

14.53%

10 years (p.a.)

5.93%

11.41%

6.35%

1

1

1

1

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29 TECHNICAL FORECASTS

Hedges up but no retreat from risk

Key equity and currency forecasts

14 GLOBAL LIQUIDITY

22 STRESS TESTS

Volatility: The dog that didn’t bark in Q1

49 MIXED-ASSET ANALYSIS

Private flows take baton from Fed but Beijing drags down EM

Plotting the path of inflation in the year ahead

19 GLOBAL INTEREST RATE

Proven results from regional expertise Benefiting from global equity market diversification and the volatility dampening of government bonds, the AXA Framlington Managed Balanced Fund has delivered an impressive track record over many market cycles. Supported by a highly experienced team of regional specialists, lead fund manager, Richard Peirson has repeatedly applied the same proven investment process over the last 20 years.

20 FUND FLOWS

Structural inequality is killing demand and promoting destructive debt cycles

16 GLOBAL INFLATION EXPECTATIONS

9.24%

5.57%

8 HOW INEQUALITY IS EATING CAPITALISM

23 LEADING INDICATORS: PMIs

52 CITYWIRE FUND MANAGER RATINGS

Measuring conditions in major economies

The best UK (All Companies) funds

24 UNMISSABLE CHARTS

54 ASSET PRICE PERFORMANCE

Three charts you can’t afford to miss

All the key indicators for equities, alternatives, bonds, fixed income and property

EXPECTATIONS

25 TOP GLOBAL ASSET ALLOCATORS

What are the experts forecasting?

Faith in ‘stymied’ equities begins to fail

ASSET CLASSES AND SECTOR FOCUS An in-depth analysis of where to invest and the places to avoid in the year ahead 32 GLOBAL BONDS

Learn more from Richard Peirson adviser.axa-im.co.uk 020 7003 2345

33 PROPERTY

Global

Global Equities

34 ALTERNATIVE UCITS 37 UK EQUITIES

North America

UK (All Companies) Europe

39 EMERGING MARKET EQUITIES

41 ASIA PACIFIC EQUITIES

Asia Pacific Excluding Japan

42 ASIA PACIFIC EQUITIES

Japan

43 EMERGING MARKET BONDS

Volatility

35 NORTH AMERICAN EQUITIES 38 EUROPEAN EQUITIES

Source: Lipper, total return, bid to bid, net of fees as at 31/03/14. For professional investors only and must not be relied on by retail clients. The value of investments can fall as well as rise and you may get back less than invested. The value of the fund will be affected by changes in currency exchange rates. Issued by AXA Investment Managers UK Limited, authorised and regulated by the Financial Conduct Authority in the UK. Registered in England no 01431068. Registered office: 7 Newgate Street, London EC1A 7NX. 18227 04/14

How are wealth managers hedging equity risk?

Global Emerging Markets

40 EMERGING MARKET COUNTRY EQUITIES

44 ALTERNATIVE UCITS

Emerging Markets Local Currency

Currency

45 COMMODITIES

Gold and Precious Metals

46 COMMODITIES

Oil

48 COMMODITIES

Industrial Metals

China COVER IMAGE: REUTERS/Adrees Latif

April 2014

5



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Risk Warnings *The Distribution Yield reflects the amounts that may be expected to be distributed over the next 12 months as a percentage of the mid-market unit price, and is based on a snapshot of the portfolio as at 31/12/2013. It does not include any preliminary or annual charge. Investors may be subject to tax on distributions. The yield is not guaranteed and may fall below any figures stated in this document. Annual charges and performance fees are deducted from capital. The value of investments and the income from them may go down as well as up and is not guaranteed. Capital is at risk and investors may not get back what they invested. Income can fall as well as rise as a result of market and currency fluctuations. The Fund can invest in derivatives. Derivatives are used to protect against currency, credit and interest rate moves or for investment purposes. Therefore, there is a risk that losses could be made on derivative positions. For investment professionals only. Not to be relied upon by, or distributed to, retail investors. Alliance Trust Investments Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC330862, registered office, 8 West Marketgait, Dundee DD1 1QN; is authorised and regulated by the Financial Conduct Authority, firm reference number 479764. Alliance Trust Investments gives no financial or investment advice.

April 2014

7





MACRO ANALYSIS

MACRO ANALYSIS Structural inequality is killing demand and promoting destructive debt cycles BY ROBERT SKIDELSKY, PROFESSOR OF POLITICAL ECONOMY AT WARWICK UNIVERSITY

T

HOW INEQUALITY IS EATING CAPITALISM 8

April 2014

he crash of 2008 has produced an exceptionally high level of commentary on the current state of capitalism, as well as the more usual (and bestselling) ‘how to get rich and why you went bust’ crop. Key topics have been the growth of inequality, the rising debt to income ratio, the future of work, and the strength and sustainability of the recovery. French economist Thomas Piketty, American academic Erik Brynjolfsson, associate director of the Center for Digital Business at the MIT Sloan School of Management Andrew McAfee, economic and social theorist Jeremy Rifkin, and senior and associate fellow of the Rothermere American Institute, Oxford, Simon Head have written important books. American economist Larry Summers has been warning of ‘secular stagnation’. British businessman Adair Turner has surveyed the field in a lecture at London’s Cass Business School. Banquo’s ghost is Karl Marx, never mentioned, but present in everyone’s mind. The most important topic is growing inequality, its causes, effects, and possible remedies. Britain’s five richest families are worth more than the poorest 20%. At a global level, the wealth of 85 billionaires is equivalent to that of half of the earth’s population. The growth of inequality has been the result of two forces. The first has been pulling the incomes of the very wealthy top 10%, 1%, or even 0.1% of the income

distribution upward. The second has been depressing the incomes of those at the bottom of the income distribution – not just the bottom 10%, but the bottom 50%, and even the bottom 90%. Today, this middle 40% is called the ‘squeezed middle class’. Piketty has analysed the forces that benefit the rich. ‘Supermanagers’ are able to set their own pay, benefitting from changes in social norms and business culture that normalised extremely high pay. This has been most evident in the US and the UK, especially in the financial sector. Piketty calls it ‘meritocratic extremism’ – the overzealous desire to reward success. Turner singles out the ‘financialisation’ of advanced economies – pay in the financial sector has increased much more rapidly than in other sectors for people with similar skills.

The rich get richer Astronomical pay in the financial sector has certainly become more ‘taboo’ since the crisis, but bankers’ bonuses have started to exhibit a steep upward trend again, more than in line with the recovery of the economy. Regulation could limit this, but it is chiefly aimed at achieving financial stability, not reducing inequality, and hardly anyone makes the connection between the two. Furthermore, it’s not just the financial sector: Piketty points out that 80% of the top income groups are not in finance. They are top executives of manufacturing firms, plus the superstars of the entertainment industry. Very high incomes from labour are just one side of the story. The rich are also getting richer because of the ease with which they are able to convert high incomes from labour into capital ownership, and, as a result, returns from capital. The rich are able to obtain higher returns on capital than the poor, through economies of scale and access to the best advice. The re-emergence of land as a scarce factor of production in the centres of big

cities such as London has afforded its owners increasing ‘rents’. And to the extent that there is a (quasi) fixed supply of homes, property purchases by the rich make home ownership less affordable for the poor. The cost of a typical London home – £362,699 as of March 2014 – is over twice as high as in the rest of the country. The gap is the widest it has ever been. The result is that even people who do not earn any income from labour, but who have inherited large sums, see their wealth grow at an accelerated pace. Liliane Bettencourt, a Paris-born businesswoman whose father founded L’Oreal, saw her fortune increase from $2 billion to $25 billion between 1990 and 2010 – the same pace at which Bill Gates, who did work for a living, saw his climb. But the crux of the issue is whether the accelerating wealth of the rich is really a problem. If it is not done at the expense of the rest, what’s wrong with it? Conventional economics believes that the rich spend enough of their incomes to ‘lift all boats’. Additionally, rising asset prices benefit everyone through what economists call the ‘wealth effect’. Furthermore, the more unequal the society’s wealth and income, the more saving it will do, and therefore the more investment it will have. These are different versions of ‘trickle down’. They are the standard arguments against any undue attempt to compress differentials.

'Heiress Liliane Bettencourt's fortune grew from $2bn to $25bn between 1990 and 2010 – the same increase as entrepreneur Bill Gates'

Inequalities of growth The principal economic argument against large inequalities is that it narrows the consumption base. In textbook terms, we say that the poor have a ‘higher propensity to consume’, so redistributing wealth from the rich to the poor would have the net effect of increasing consumption. But would it not also reduce saving? Not necessarily according to Keynes. Keynes was the first economist to reverse the classical connection

April 2014

9





MACRO ANALYSIS

MACRO ANALYSIS

'Keynes wrote that it was not thrift that built cities but enterprise, and enterprise was GULYHQE\SURÀW

skilled workers in advanced economies, relative to more competitive labour markets like China. The second has to do with the impact of new technology on jobs. On the one hand, digital technology enables ‘ordinary’ people to leverage their talents, for example, YouTube stars such as Jenna Marbles, a comedian with more than 13 million subscribers on the website, thus bringing them higher levels of income. But this only applies to a minority, and the potential for technology to create new jobs is limited. The displacements are likely to exceed the replacements. The extent to which technology displaces jobs depends on the ‘elasticity of substitution between capital and labour’ – or in ordinary language, the extent to which machine can replace labour. Simon Head explains how automation does nott necessarily knock out the lowest paid jobs, like cleaners, ers, because these are not very routine.

Technology and the he rich between saving and investment. He wrote that it was not thrift that built cities but enterprise, and enterprise was driven by profit. If profit expectations are low, as in a recession, it is not more saving that we need, but more consumption, to give businessmen the expectation of a market. This is an argument for re-distributing income in a slump. Turner brings the further charge against rising inequality, especially if it is associated with house prices, that it increases the reliance of the economy on debt, which makes it less stable by encouraging boom and bust. The savings of the rich, he says, ‘can be intermediated [...] to provide credit to the poorer (or at least “less rich”) people attempting to maintain or increase consumption despite stagnant or falling real incomes’. But this credit flow ‘simply enables demand to be maintained at the level that would have pertained

10

April 2014

(without credit growth) if economic growth had not been accompanied with rising inequality. Thus, ‘we seem to need credit growth faster than GDP growth to achieve an optimally growing economy’. That inevitably leads to crisis and post-crisis recession, which in turn causes more inequality. So we are caught in some sort of vicious cycle. In the UK, household leverage rose from 15% of GDP in 1964 to 95% by 2008. Finally, Piketty charges rising inequality with ‘undermining the meritocratic values on which democratic societies are based’. However, policies to increase the incomes of the poor relative to those of the rich encounter formidable obstacles. The obvious one is the political resistance to higher taxes. But there are two more subtle ones which arise from the structure of the modern economy itself. The first is globalisation, which reduces the value of low

What about the effect ct of new technology on the rich? ch? The outcome is unclear. On the one hand, technology y raises the rewards to capital: al: once you have incurred fixed xed costs, the marginal costs off using digital goods approach zero o – that is, robots don’t have to be paid. d. The result is what Adair Turner calls alls a ‘huge wealth accumulation without ut much savings/ investment’. Digital technology echnology thus tends to promote ‘winner-takes-all’ inner-takes-all’ markets. However, there may ay be an opposite effect. Digital technologies ologies are more easily replicated, so their marginal

value may fall over time, and the rewards to capital will shrink. Jeremy Rifkin explains how capitalism may end up ‘destroying itself’ because automated systems produce goods at virtually zero costs, and you can’t make money out of free goods. This is possible, but it ignores the importance of network externalities and brand reputation. Brand competition will continue, creating fashions in digital goods. And users get locked into brands. As Turner puts it, ‘teenagers all use Facebook, because all teenagers use Facebook’. So though the prices of some digital goods will fall towards zero, those of others will be kept high, which means that profits are still to be made. These opposing effects mean that no one can know for sure what effect the new technology will have on incomes and jobs. One of the main problems faced by advanced economies is a return to low growth, as this implies greater inequality. The ‘fundamental force for divergence’, argues Piketty, is r>g. When the return on capital r exceeds the growth of the economy g, wealth grows faster than output and income, so inequality increases. In the long run, he predicts that g will not exceed 1-1.5%, partly because of slower demographic growth, whereas the average return on capital will be 4-5%.

Secular stagnation is built around this theme. In an IMF speech in November last year, Larry Summers said that around 2008, there was ‘too much easy money, too much borrowing’, yet ‘capacity utilisation wasn’t under any great pressure; unemployment wasn’t under any remarkably low level; inflation was entirely quiescent. So somehow even a great bubble wasn’t enough to produce any excess in aggregate demand.’ Or in other words, a bubble was necessary in order to achieve a decent level of growth. Without a bubble, growth would have been very low; the economy had a ‘negative natural rate of interest’. est .

'The problem is not structural overconsumption, but structural under-consumption, disguised by debt accumulation'

The British disease The British recovery is well under wa ay, but there are some worrying signals. The real level of inv vestment remains about 20% below its pre-crisis peak which, according a tto the TUC, corresponds to an annua al £50 billion investment gap. Clearly, if the naturall rate of interest was positive, investment would be bo w ooming, especially given the low interest rates, quantitative easing, and so g on. Furthermore, the Office for Budge o et Responsibility rreports that increased consumer spen nding is supported by a fall in the savings ratio, rather than by y higher incomes. The same happened in the run-up to th T he crisis: people ffunded their expenses by borrowing. Th his means that the problem is not structural overconsumpttion, but structural p under-consumption, disguised by debt accumulation, an u untenable position in the long term. u Economies of the British type may thu us be between a rock and a hard place. Increased inequ uality will have a deflationary effect on overall demand. Ze d ero or negative interest rates encourage the poor to borrrow rather than ssave. Yet increased household leverage (b borrowing) eventually causes a crisis, and the debt ov e verhang means tthat recovery is slow. In turn, this causes more inequality. Poor people are more likely to lose their jobs P obs and face

April 2014

11



MACRO ANALYSIS

Abenomics: the silver bullet for Japan’s economic challenges? Invest in depth

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repossession in the downturn, especially as they tend to face higher interest rates than the rich. So what, as Lenin said, is to be done? Piketty wants a progressive tax on capital as well as a progressive tax on income. But here the challenge is how to achieve international cooperation. Without crossborder agreements, there will just be tax evasion, so the regulation will become self-defeating. We could implement a higher minimum wage, although this might cause a negative effect on employment. And we could aim to slow down the rate of globalisation in order to relieve the short-term pressure on wages in rich countries, giving their workers more time to adapt to new job opportunities. There is also the educational route to higher incomes. But here, Piketty has a fair point. He says that inequalities will just be translated upward. In the past, ‘the bottom group, which had once only finished grade school, moved up a notch on the education ladder, first completing junior high school, then going on to a high school diploma. But the group that had previously made do with a high school diploma now went on to college or even graduate school’. So there is no easy escape from inequality by climbing the educational ladder. At this point in time, the chief task is to identify the most important structural issues facing late capitalist societies of our kind. It will be the task of politics to create an agenda capable of tackling them.

Monetary easing, increased public spending and reforms to increase competitiveness are the three initiatives that are helping Prime Minister Shinzo Abe get Japan’s economy back on track. The effects of Abenomics are creating a much more positive environment for Japanese companies to thrive. Outperforming the TOPIX Index by 167% since launch, the Neptune Japan Opportunities Fund is well-positioned to take advantage of this economic resurgence. Visit us now and find out how your clients can benefit from Japan’s rapid recovery. Past performance is not a guide to future performance. The value of an investment can fall as well as rise and your clients may not get back the amount originally invested.

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1

IMA Quartile Ranking

All figures source: Lipper, IMA Japan sector, as at 31.03.14. A Accumulation share class performance, in pound sterling with net income reinvested and no initial charges. The performance of other share classes may differ. The Neptune Japan Opportunities Fund launched on 30.09.02.

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About the author Lord Skidelsky is emeritus professor of political economy at the University of Warwick. His three-volume biography of the economist John Maynard Keynes received numerous prizes, including the Lionel Gelber Prize for International Relations and the Council on Foreign Relations Prize for International Relations.

12

April 2014

This advert is for Professional Investors only and should not be distributed to or relied upon by Retail Clients. This Fund may invest more than 35% in government and public securities in a number of jurisdictions. These and other risks are described in the Prospectus/Key Investor Information Document, which should be read carefully prior to investing and can be obtained by calling 0800 587 5051 or downloaded from www.neptunefunds.com FE Alpha Manager Ratings do not constitute investment advice offered by FE and should not be used as the sole basis for making any investment decision. ©2014 FE. All rights reserved. Issued by Neptune Investment Management Limited, 3 Shortlands, London W6 8DA. Authorised and regulated by the Financial Conduct Authority, www.fca.org.uk, 25 The North Colonnade, Canary Wharf, London E14 5HS. FCA registration number 416015.





GLOBAL LIQUIDITY

GLOBAL LIQUIDITY 42%

Private flows take baton from Fed but Beijing drags down EM

77%

62%

10% 25%

80%

21%

14

April 2014

78%

GLOBAL LIQUIDITY

CHINA - COMPOSITE RISK

Global Liquidity

China - Composite Risk 100

100

80

16%

80

60

60

40

40

20

13%

0 1984

1994

2004

2014

FEB 2014

72%

20

Japan Africa US Australia UK Russia China India Latin America Emerging Markets Eurozone

GLOBAL POLICY vs PRIVATE LIQUIDITY Global Policy Liquidity

Global Private Liquidity

100 80 60

0 1995

2000

2005

2010

2014

2010

2014

CHINA - LIQUIDITY RISK LIQUIDITY SCALE China - Liquidity Risk

0

20

40

60

80 100

100 80

All data calculated with 40-year historical average cross-border liquidity as index value of 50. SOURCE: CrossBorderCapital

60 40 20 0 1995

2000

2005

40 20 0 1984

1994

2004

2014

FEB 2014

The popular narrative of the last year has been that global markets are taking their first tentative steps into a lowerliquidity world, out from under the protective wing of the world’s central bankers. While seductive and appealing as an easy narrative, this is not entirely borne out by an analysis of crossborder capital flows. ‘Official’ liquidity – to a firstapproximation, money supply – has broadly declined, but this is almost directly mirrored by recovery in cross-border private capital investment. Globally, this aggregate has retrenched since the period of peak optimism throughout 2013. But beneath this, much of the developed world outside of the eurozone, continues to enjoy capital supply historically consistent with solid growth over a 12-18 month period ahead. ‘Developed market liquidity remains far stronger than [emerging markets],’ said Michael Howell, managing director of CrossBorderCapital. ‘The developed market private sector remains strong at an index level of 82.7. Cross-border flows to developed markets jumped to 52.2 [in March] from 39, perhaps again signalling a flight to quality.’ With the Bank of Japan remaining superaccommodative and the Fed actually quietly easing very slightly at the beginning of the year, official developed money supply has helped paper over cracks that have appeared in private confidence in Q1. While the pace of Fed tightening ensured that globally, 2014 would be tougher and more volatile

than 2013, Howell added the real polarity was between a robust private developed world and an enormous liquidity sink in Beijing sucking in emerging markets (see box far right), currently at a dangerously fragile liquidity value of 13, well below historical average. ‘We are currently seeing EM dragged down by three largely external forces. One, western and particularly

US capital has restructured post-Lehman and lowered its breakeven costs to such an extent that production is re-shoring. ‘Two, China has put on her monetary brakes fairly hard. This is disrupting regional capital flows and unhinging the Asian supply chain. This will likely be a long and not a short-term monetary squeeze. ‘And three, in the 1960/90 period the yen/US$ drove the tempo of the Asian business cycle, and may be doing so again given the yen’s recent collapse. In short,

American restructuring, Chinese downsizing and Japanese competitiveness are doing the damage.’ This suggests that full EM weakness remains unknowable and unpriceable, despite some investors noting that from a valuation perspective, prices are consistent with high future returns. In particular, further currency devaluations – with associated volatility and uncertain political and economic repercussions – might be required to put the region on a steadier footing.

In contrast, frontier markets better insulated against the Asian trade cycle re emained relatively supported, and have moved into a much closer correlation with developed markets than n their developing peers. ‘2014 will be trickier than 2013: we recommend some move into treasurries and the US dollar, bottomfishing in gold and a sh hift away from high yield,’ said Howell. ‘It is proba ably not time to bail out of developed market stocks yet, but nor is it time to pile into emerging markets.’’

The China composite risk index – a combination of FX, liquidity and exposure risks – has steadily climbed over the course of more than two years and sits at a level not seen since the great crash. Liquidity risk has particularly climbed over Q1 as the People’s Bank of China accelerated its attempts to drain excess capital. The underlying tensions which have come to a head are likely to continue playing out for years.

April 2014

15


Our strength is in our numbers


GLOBAL INFLATION EXPECTATIONS US INFLATION EXPECTATIONS

UK INFLATION

GOLD SPOT

US TIPS YIELD CURVE

UK INFLATION-LINKED BONDS YIELD CURVE

Mar-13

Mar-14

SOURCE: Reuters

20 months

30 months

SOURCE: Cleveland Federal Reserve

2

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Two factors were driving the inflation-linked gilt market at the end of the first quarter: a £7.4 billion fall in expected issuance to £31 billion this year following improved tax receipts, and the largest spread between CPI and the benchmark RPI since 2011. ‘The RPI data provides an upside surprise to expectations for linker carry,’ senior RBC economist Sam Hill told Bloomberg at the end of March, saying inflation-linked were likely to outperform. While CPI has fallen steadily since early 2012 from 3.57% to 1.7%, RPI has remained much more stable, falling from 3.93% to 2.76%. The continuing strength of sterling and moderating commodity pricing has helped stem the previous driving force of imported inflation, while the estimated output gap remains fairly large. Outside of London, the Bank of England said it remained relaxed about house price inflation, although it noted steps might be required to moderate some mortgage multiples.

Quartile rank5

45

US inflation expectations have shifted out over the past year but remain heavily grounded, at a forecast maximum of 0.02% growth over 14 months, according to the Cleveland Fed survey. Over the quarter, the long end of the curve remained essentially unchanged while the short end has tightened from 0.015% to 0.012%. With the Fed upping its estimate of two year rates over the quarter, the sustained fall in US Tips prices over the last year (to an annual loss of 8.4% in 2013) has begun to tempt investors back. This is likely to be based on the cheap optionality of pricing rather than a sudden resurgence in expectations however, with the CPI hovering just above 1%, well below the 2% fed target. The final Tips auction in March attracted a bid/cover ratio of 2.48 versus a previous figure of 2.31, having steadily ticked up over Q1.

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April 2014

10 months

2

4.

Gold’s rally from the lows of Q4 2013 might be better read not as an aggregate gain in global inflation pricing, but as an increase in inflation-sensitive buyers as a component of the global market. Despite Indian buyers being rationed by currency controls since September, physical consumer gold purchases actually reached a record in 2013, but even that was insufficient to outweigh paper sales. Given the simultaneous tightening in sovereign yields over the first quarter, safe haven demand against a series of potential risks – including deflation – might be the more likely motivating factor. The exit of money from gold last year did mean capitulation by goldbug inflationistas however, meaning the ground may be laid for a recovery in inflation pricing. One place no such signal of renewed strength is currently apparent is the CRB Commodity Index, which remained marginally down over the first quarter.

Range of uncertainty

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1.75

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50 yrs

31

Mar-10

30 yrs

4

1.50

2,500

16

CPI INFLATION PROJECTIONS

2.00

3,000

20 yrs

SOURCE: Reuters

2.25

3,500

15 yrs

SOURCE: Reuters

CLEVELAND FED INFLATION EXPECTATIONS

4,000

10 yrs

11 8. 53

CRB COMMODITIES INDEX

QR

TIME TO MATURITY

5 yrs

O 17

SOURCE: Reuters

30 years

(%)

FI VE

20 years

QR

5

TIME TO MATURITY

ãƟÊšũ

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TH RE E

10 years

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Mar-14

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-1.0

PO IN T

Mar-11

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PO IN T

Mar-10

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