Schroders Economics Lens

Schroders Economics Group

June 2024

Marketing material for professional

clients only.
Index

Summary (slide 3)
Forecast update (slides 4-8)
Global goods cycle picking up, inflation remains a concern (slides 9-13)
US focus: Solid growth means that inflation likely to be stickier, and fewer Fed cuts (slides 14-19)
Europe focus: ECB expected to start cutting rates this summer (slides 20-23)
UK focus: Rebounding inflation to halt rate cuts in early 2025 (slides 24-28)
Emerging markets focus: Solid macro backdrop (slides 29-31)
China focus: Export-led growth to fade in 2025 (slides 32-36)
Appendix: scenario explanations (slide 37-38)

2
Summary: Onwards and upwards
Read more: Economic and Strategy Viewpoint – Q2 2024
− Upward revisions to our forecasts mean that we expect the global economy to expand by 2.8% in both 2024 and 2025. Our
forecast is above consensus and implies that most major economies will beat expectations over the next 18 months.

− Robust global growth should drive further recovery in the global manufacturing cycle. Leading indicators are pointing firmly
upwards and manufacturing PMIs are unlikely to peak until early-2025.

− Global inflation should continue to decline, but incoming data have been higher than expected and completing the last mile of
disinflation against a backdrop of robust activity will remain the key concern for central banks.

− The US should remain the engine of global growth this year. A much longer run of softer data will probably be required before
the Federal Reserve (Fed) starts to cuts interest rates. Our baseline forecast assumes that a total of 75bp of rate cuts will begin
in September (50bps this year; 25bps in 2025), but the balance of risks is towards a later and shallower easing cycle.

− The case for interest rate cuts is much clearer in Europe and the UK. Both economies have already suffered recession, while
inflation is on a clear downward path. We expect the European Central Bank (ECB) to cut rates in June, followed by the Bank of
England (BoE) in August.

− Emerging market (EM) GDP growth looks set to come in at 4.3% this year and 4% in 2025. China made a solid start to the year
on the back of strong manufactured exports. Other major EM have also been faring well, and commodity exporters are likely to
get a lift if the manufacturing cycle continues to push up prices.

Source: Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

3
Forecast update
Steady global growth as inflation continues to decline
Global GDP expected to growth 2.8% in 2024 and 2025, up from previous forecast
Contributions to World GDP growth (y/y) Contributions to World inflation (y/y)

Forecast
8 9 Forecast
6.4
5.6 5.7 8 7.2
6 5.1 5.2
7
3.9 3.6 3.6
4 3.1 3.1 3.4 3.4 3.0 2.9 6
2.9 2.8 2.8 2.8 2.8 4.9
4.4
5
4.0
2 4 3.4
3.1 3.0 3.3 3.1
2.7 2.8
2.4 2.2 2.4
3 2.1 2.4 2.2 1.6
0 1.2 1.6 1.7
-0.1 2

-2 1
0
-4 -2.9
-1
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
US Europe Rest of advanced US Europe Rest of advanced
China Rest of emerging World China Rest of emerging World

Source: Schroders Economics Group, 28 May 2024. Please see relevant disclaimers on slide 39.

5
Revisions move our global forecast in a reflationary direction
Growth prospects brightening outside of the US, but inflation remains sticky
Real GDP
y/y% Wt (%) 2023 2024 Prev. Consensus 2025 Prev. Consensus
World 100 2.8 2.8  (2.6) 2.6 2.8  (2.7) 2.5
Advanced* 59.6 1.6 1.7  (1.6) 1.5 1.9  (1.8) 1.6
US 28.3 2.5 2.7 (2.7) 2.4 2.1  (1.9) 1.7
Eurozone 15.6 0.5 0.9  (0.7) 0.6 1.8 (1.8) 1.4
Germany 4.5 0.0 0.4  (0.2) 0.2 1.6  (1.7) 1.2
UK 3.4 0.1 0.7  (-0.2) 0.5 1.3  (1.0) 1.1
Total Emerging** 40.4 4.4 4.3  (4.0) 4.2 4.0 (4.0) 3.9
BRICs 28.3 5.3 4.9  (4.5) 4.7 4.4  (4.3) 4.3
China 19.9 5.2 5.2  (4.8) 4.9 4.5 (4.5) 4.4

Inflation CPI
y/y% Wt (%) 2023 2024 Prev. Consensus 2025 Prev. Consensus
World 100 4.4 3.1  (2.9) 3.1 2.4  (2.5) 2.6
Advanced* 59.6 4.6 2.7  (2.5) 2.8 2.3 (2.3) 2.2
US 28.3 4.1 3.1  (2.7) 3.2 2.2  (2.1) 2.3
Eurozone 15.6 5.4 2.3  (2.1) 2.3 2.4  (2.8) 1.9
Germany 4.5 6.0 2.3  (2.4) 2.4 2.4  (2.8) 2.0
UK 3.4 7.3 2.6  (2.4) 2.5 2.8 (2.8) 2.2
Total Emerging** 40.4 4.1 3.5  (3.4) 3.6 2.7  (2.8) 3.2
BRICs 28.3 1.8 1.8 (1.8) 1.8 1.7  (1.9) 2.4
China 19.9 0.2 0.4  (0.2) 0.7 0.5  (0.7) 1.5

Source: Schroders Economics Group, 28 May 2024. Please see relevant disclaimers on slide 39.

6
Fed likely to be the last major central bank to cut rates
Recent recessions mean rate cuts in Europe and UK to start imminently
US interest rates forecast vs market EZ interest rates forecast vs market UK interest rates forecast vs market
% % %
6 6 6

5 5 5

4 4 4

3 3 3

2 2 2

1 1 1

0 0 0

-1 -1 -1
16 17 18 19 20 21 22 23 24 25 16 17 18 19 20 21 22 23 24 25 16 17 18 19 20 21 22 23 24 25
Fed ECB Refi BoE
ECB Depo
Schroders Fed forecast Schroders BoE forecast
Schroders ECB Refi forecast
US OIS EUR OIS GBP OIS

OIS = overnight index swap: a proxy for interest rate expectations in market
Source: Schroders Economics Group (28 May 2024). Goldman Sachs data for OIS (28 May 2024). Please see relevant disclaimers on slide 39.

7
Risks still skewed towards higher inflation
Scenario analysis (base case set out on slides 5-6)
Scenario impact on growth and inflation Scenario probabilities*
+2.0
Stagflationary Reflationary
+1.5
Middle East war
US recession 2025, 6%
Cumulative 2024-2025 inflation vs. baseline

Consumer
+1.0 Baseline, 62%
boom
Second inflation wave

+0.5
Consensus Productivity
Baseline
0 boost, 6%
forecast

Previous baseline
-0.5 Middle East war, 5%
Productivity
-1.0 boost Consumer
US recession
boom, 11%
2025
-1.5

-2.0 Deflationary Productivity boost

Second inflation wave, 10%
-2.0 -1.5 -1.0 -0.5 0 +0.5 +1.0 +1.5 +2.0
Cumulative 2024-2025 growth vs. baseline forecast
Source: Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39. Previous baseline published on 11 March 2024 *Scenario probabilities are based on mutually
exclusive scenarios. Description of these alternative scenarios are provided in the Appendix

8
Global goods cycle picking
up, inflation remains a
concern
Solid US consumption should continue to drive global growth
Softer labour market conditions are a story for 2025 growth
US wage growth feeds through to consumption with a lag of about 9 months
6 10

8
4

6
2

4
0
2

-2
0

-4
-2

-6 -4
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

US real wage growth (% y/y Adv 9m, LHS) US personal consumption expenditure (% y/y, RHS)

Source: LSEG Datastream, Schroders Economics Group, 28 May 2024. Please see relevant disclaimers on slide 39.

10
 Global manufacturing cycle to accelerate
Upturn in global manufacturing should lift commodity prices higher
Leading indicators point firmly up Commodities do not anticipate a manufacturing recovery

30 60 60 80
58
58 60
20
56
56
54 40
10
54
52 20
0 50 52
0
48 50
-10 -20
46
48
44
-20 46 -40
42
44 -60
-30 40
2000 2004 2008 2012 2016 2020 2024
1998 2002 2006 2010 2014 2018 2022
Sweden Manufacturing PMI - new orders minus inventories (3m Avg Adv 3m, LHS) Global manufacturing PMI (LHS)
Global manufacturing PMI (RHS) Bloomberg commodity price index (% y/y, RHS)

Source: LSEG Datastream, Schroders Economics Group, Bureau of Economic Analysis, 3 June 2024. Please see relevant disclaimers on slide 39.

11
Inflation remains too high
Tackling inflation against a backdrop of solid growth is a headache for central banks
Inflation remains above target in most developed markets The easy wins from commodity prices are over
14 14
60 12
12
10
10 40
8
8
20 6
6
4
4 0
2
2 0
-20
0 -2

-2 -40 -4
1980 1985 1990 1995 2000 2005 2010 2015 2020 1992 1996 2000 2004 2008 2012 2016 2020 2024
FAO food price index (% y/y Adv 9m, forecast based on futures pricing,
Contribution of Core %-pt Contribution of Food %-pt
LHS)
Contribution of Energy %-pt G7 Headline CPI (% y/y) G7 food inflation (% y/y, RHS)

Source: LSEG Datastream, Schroders Economics Group, 28 May 2024. Please see relevant disclaimers on slide 39.
12
US focus
Solid growth means that inflation likely to
be stickier, and fewer Fed cuts
Weak Q1 GDP growth was a red herring
Underlying demand remained strong, growth likely to rebound in Q2
The drag from net exports and inventories masked strong GDP growth to bounce back in Q2 as temporary drags reverse
domestic demand in Q1
US GDP growth forecast (%, q/q)
+1.5

+1.0

+0.5

-0.5

-1.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2022 2023 2024 2025

Latest data Current forecast Previous data Previous forecast

Source: Macrobond, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

14
Labour market is slowly moving into better balance
Lags mean that softer labour market is a story for the real economy in 2025
Several months of sub-neutral payroll growth are required to Leading indicators point to softer job creation in the future
ease strains in the labour market

Shaded areas are US recessions.

Source: Macrobond, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

15
Wage growth set to slow further in the months ahead
Usual lags imply that slower wage growth will cool demand conditions in 2025
Quits rate implies nominal wage growth will slow to 4% Real wages may continue to support demand in the near term,
before tailing off in 2025

Source: Macrobond, LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

16
Inflation is taking longer to decline than expected
Underlying inflation has picked up
Housing inflation is slowly easing… …but underlying “supercore” inflation has accelerated

Supercore inflation is defined as core services less rent of shelter. Shaded areas are US recessions.

Source: Macrobond, Schroders Economics Group, 28 May 2024. Please see relevant disclaimers on slide 39.

17
 Base case is that steady disinflation will allow Fed to cut rates
We assume 75bp of cuts starting in September; but risk is later and shallower easing
Headline inflation to trend down below 3%, but core services Risk is that the Fed cuts less and later than we assume
less rent assumed to be structurally higher than pre-Covid
% y/y contribution %
6.0
8
5.5
7

6
5.0

5 4.5
4 4.0
3
3.5
2
3.0
1

0 2.5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
-1
18 19 20 21 22 23 24 25 2024 2025 2026
Probability weighted Baseline (mid-range)
Core goods Core services less rent Rent of shelter Core CPI Market (USD OIS adj) Fed Dots (Mar-23 Median)
Shaded area is US forecast.

Source: Macrobond, LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

18
Presidential election appears to be a close contest
While GOP has a strong chance of flipping Senate, they could stand to lose the House

Six swing states will decide the election; Trump leads in all six In the Senate, GOP only need to convert one toss up (or win the WH)…
Number of Senate seats contested
15
Joe Manchin (WV) not
seeking re-election
10
MI
15 PA 5
NV 19
6
0
Solid D Likely D Lean D Toss up Lean R Likely R Solid R
Republican Independent Democrat

…but Democrats could regain the House of Representatives

190 13 22 8 202
226 77 235
270 to win Solid or likely D Lean D Toss up Lean R Solid or likely R
*Maine and Nebraska use the congressional-district method of awarding electoral votes. Both states allocate two electoral votes to the state popular vote winner, and then one electoral vote to the popular
vote winner in each congressional district (two in Maine, three in Nebraska). This can result in a split electoral vote for both states.

Source: Schroders Economics Group, Federal Election Commission, Cook Political Report. 24 May 2024
Europe focus
ECB expected to start cutting rates this
summer
Eurozone exited recession in Q1
Rebound in flash PMIs is consistent with faster growth in Q2
Growth beat expectations in Q1 PMIs point to a further recovery in Q2
Eurozone GDP growth forecast (%, q/q) 65 3.0
+1.0
2.5

+0.8 60 2.0

1.5
+0.6
55 1.0

+0.4 0.5

50 0.0
+0.2
-0.5

0 45 -1.0

-1.5
-0.2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 40 -2.0
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
2022 2023 2024 2025
Latest data Current forecast Previous data Previous forecast Flash eurozone composite PMI (LHS) Eurozone GDP (% q/q, RHS)

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

21
Twin speed recovery leaves manufacturing lagging behind
Damaged competitiveness is hindering European manufacturers
Europe is lagging the global manufacturing recovery Consumption of European manufactured goods has decoupled
from domestic demand
Flash manufacturing PMIs

65 65

60
60
55

55 50

45
50
40

45 35

30
40
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
2010 2012 2014 2016 2018 2020 2022 2024
Eurozone flash manufacturing PMI - new orders
Eurozone Japan US UK Eurozone flash services PMI - new orders

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

22
Falling inflation to make room for ECB rate cuts from June
Inflation to remain close to 2% through to mid-2025
Eurozone inflation forecast (% y/y)
Y/Y
12%
Forecast
10%

8%

6%

4%

2%

0%

-2%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Core Food incl. alcohol & tobacco Energy Headline

Source: LSEG Datastream, Eurostat, Schroders Economics Group, 28 May 2025. Please see relevant disclaimers on slide 39.

23
UK focus
Rebounding inflation to halt rate cuts in
early 2025
UK economy also pulled out of recession in Q1
Manufacturing PMI has picked up in recent months
UK delivered a massive beat versus our forecast in Q1 PMIs point to a further recovery in Q2
UK GDP growth forecast (%, q/q) 70
+0.8
65
+0.6
60
+0.4
55
+0.2
50
0
45
-0.2
40
-0.4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 35
May 19 May 20 May 21 May 22 May 23 May 24
2022 2023 2024 2025
Latest data Current forecast Previous data Previous forecast Macro composite Manufacturing Services

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

25
Labour market remains tight despite economic soft patch
Wage growth remains high despite some increase in unemployment
Unemployment rate has edged up… …wage growth rolling over but still far too high

6.0 3m, y/y

10%

5.5
8%

5.0
6%

4.5
4%

4.0 2%

3.5 0%

3.0 -2%
2019 2020 2021 2022 2023 2024 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
Monthly 3-month moving average Whole economy Private sector Public sector

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

26
Inflation to hit 2% target this year before rising in 2025
Deteriorating inflation outlook likely to force Bank of England to halt easing
Inflation to temporarily hit 2% this year Worsening inflation outlook to halt rate cuts in early-2025
Y/Y %
12% 6

10% 5

8% 4

6%
3

4%
2
2%
1
0%
0
-2%
-1
-4% 16 17 18 19 20 21 22 23 24 25
21 22 23 24 25
BoE Schroders BoE forecast GBP OIS
Energy Food, Tobacco and Alcoholic beverages Core UK CPI

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

27
General election: Labour on course for an overall majority
Betting odds imply 82% chance of Labour victory on 4th July
UK national voting intention (% share of popular vote*) Likelihood of outcome at next general election
Implied probability

100%

82.3%
80%

60%

40%

20% 14.7%
3.0%
0%
No Overall Majority Conservative Majority Labour Majority

Source: Macrobond, Betfair, Schroders Economics Group, Bureau of Labor Statistics, LSEG Datastream. 28 May 2024. Please see relevant disclaimers on slide 39. *Smoothed average of all
national polls collated by Europe Elects. Shaded area denotes UK general election.

28
Emerging markets focus
Solid macro backdrop
EM is leading the manufacturing recovery
Cyclical recovery positive for EM assets

EM manufacturing PMI is outperforming DM Cyclical upturn good news for EM equities

60 80
58 102
60
56
101 40
54
52
20
100
50
0
48
99
46 -20
44 98
-40
42
40 97 -60
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 1996 2000 2004 2008 2012 2016 2020 2024

Developed markets manufacturing PMI OECD G20 leading indicator (LHS)

Emerging markets manufacturing PMI MSCI EM equities (Lcu % y/y, RHS)

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Lcu = local currency. Please see relevant disclaimers on slide 39.

30
Disinflation likely to be more difficult from here
Easy wins from commodity price effects over, focus now on getting core down

EM inflation has fallen back to around 4% Commodity price effects will go into reverse

11 60
10 Based on futures 14
50 prices and
9
constant 12
8 40 exchange rates
7 10
30
6
5 8
20
4
10 6
3
2 4
0
1
0 -10 2
-1
-20 0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
2000 2003 2006 2009 2012 2015 2018 2021 2024
Core %-pt contribution Food %-pt contribution FAO Food Price Index (Lcu % y/y Adv. 5m, LHS)
Energy %-pt contribution EM Headline % y/y EM Food Inflation (% y/y RHS)

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Lcu = local currency. Please see relevant disclaimers on slide 39.

31
Delayed Fed pivot forcing EM to slow pace of rate cuts
More cautious central banks leaves major EM offering very attractive carry

EM central banks are sensitive to what the Fed does Real rates are very attractive in many EMs
Correlation of policy rate with Fed 1 Year Ahead Market-Implied Policy Rate - 1 Year Ahead
0.8 Rolling Consensus Inflation Forecast

0.7
6
0.6

0.5 4

0.4 2
0.3
0
0.2

0.1 -2

0.0 -4

Indonesia

Czech Rep
SA

Chile
Hungary
Mexico

Poland

Peru
Philippines
Brazil

Colombia

India

Thailand

Taiwan
South Korea

Malaysia
Source: LSEG Datastream, Bloomberg, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.

32
China focus
Export-led growth to fade in 2025
Manufactured exports to boost growth in 2024
Ongoing real estate sector weakness likely to weigh on long-term growth
Net exports added 0.8%-pt to GDP growth in Q1 Leading indicators suggest exports will accelerate further
Contributions to Expenditure Breakdown 56 50
20
40
54
15 30
52
20
10
50 10
5 0
48
-10
0 46
-20
-5 44
-30

-10 42 -40
2018 2019 2020 2021 2022 2023 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Final Consumption Investment Net Exports Caixin Manufacturing PMI - New Export Orders (3m Avg, Adv 6m, LHS)
Other GDP % y/y China Exports (US$ 3m Avg % y/y, RHS)

Source: LSEG Datastream, Schroders Economics Group. 3 June 2024. Please see relevant disclaimers on slide 39.

34
China’s domestic economy remains fragile
Housing crisis has led to L-shaped domestic recovery and weak demand for credit
Housing bust has cut investment and dented consumer Weak private sector demand for credit points to slowdown in
confidence 2025
Official activity data Jan. 2018 = 100 Contributions to Credit Impulse (% GDP)

160 12

150
8
140
4
130
0
120

110 -4

100
-8
90
-12
80 2014 2016 2018 2020 2022 2024
2018 2019 2020 2021 2022 2023 2024
Bank Lending Shadow Financing Corporate Bonds
Industrial Production FAI Retail sales (nom)
Gov bonds Credit impulse

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.
35
The government is ramping up housing policy
Lower interest rates unlikely to work; government purchases promising but too small
Housing starts have fallen to 2007 levels The link between interest rates and housing demand is
broken
160
3 30
25
140
4 20
120 15
5 10
100 5
6 0
80
-5

60 7 -10
-15
40 8 -20
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Real Estate Starts (12m Avg, Millions of SqM) Average mortgage interest rate (% inverted, Advanced 2Q, LHS)
Real Estate Sales (12m Avg, Millions of SqM) Medium/long term loans to households (% y/y detrended, RHS)

Source: LSEG Datastream, Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.
36
Appendix: scenario
descriptions
Scenario descriptions

• US recession 2025: the long and variable lags of monetary policy finally come to the fore as the cumulative effect
of past aggressive interest rate hikes and QT tip the US economy into recession in early 2025.
• Productivity boost: labour recruitment and retention difficulties prompt firms to squeeze additional productivity
out of their existing workforces, iron out supply chain inefficiencies and adopt technology more rapidly.
• Middle East war: the conflict spreads across the region and drags in Western nations. Oil prices climb to $150/bbl
and immediately drive-up inflation, forcing central banks to abandon rate cuts.
• Consumer boom: strong labour market conditions, resurgent credit growth and buoyant consumer confidence
lead booming consumption that ultimately forces central banks to raise interest rates again.
• Second wave inflation: interest rate cuts by major central banks prove too early and a combination of resilient
labour markets and demand cause inflation to return in 2025. The second wave forces policymakers to reverse
course, hiking rates again.

Source: Schroders Economics Group. 28 May 2024. Please see relevant disclaimers on slide 39.
38
Relevant Disclosures
– All investments involve risk including the loss of principal. The information presented is current as of the date
of this publication.
– The views and opinions shared are those of the authors of this publication and are subject to change due to market
and other conditions. The opinions stated may include some forward looking views. We believe that we are basing
our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However,
there is no guarantee that they will be realized.
– The market value of an equity portfolio may decline as a result of a number of factors, including adverse economic
and market conditions, performance of stocks in the portfolio, changing interest rates, and real or perceived
adverse competitive industry conditions. These risk are increased when investing directly in equity securities of
individual companies. Investing in international equities involves special risks including among others, risks related
to political or economic instability, foreign currency (such as exchange, valuation and fluctuation) risk, market entry
or exit restrictions, illiquidity and taxation. These risks exist to a greater extent in emerging markets than in
developed markets.
– Any analysis or illustration of trends whether current or historical should not be solely relied upon to predict future
events or results. Trends may not continue or lead to favorable investment conditions.
– This publication is intended to be for information purposes only and it is not intended as promotional material in
any respect. The material is not intended as an offer or solicitation for the purchase of sale of any investment
service or financial instrument. The material is not intended to provide, and should not be relied on for, accounting,
legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder
Investment Management North America Inc. does not warrant its completeness or accuracy. See “Important
Information” slide for additional disclosures.

39
Important information (1 of 4)
Marketing material for professional investors or advisers only. It is not to be provided to retail clients.

The views and opinions contained herein are those of the authors as at the date of publication and are subject to change due to market and other conditions. Such views and opinions may not necessarily
represent those expressed or reflected in other Schroders communications, strategies or funds.

This presentation is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument or security or to adopt any
investment strategy. The information provided is not intended to constitute investment advice, an investment recommendation or investment research and does not take into account specific circumstances of
any recipient. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any references to securities, sectors, regions and/or countries are for illustrative purposes
only.

Information herein is believed to be reliable but Schroders does not represent or warrant its completeness or accuracy. No responsibility or liability is accepted by Schroders, its officers, employees or agents
for errors of fact or opinion or for any loss arising from use of all or any part of the information in this document. No reliance should be placed on the views and information in the document when taking
individual investment and/or strategic decisions. Schroders has no obligation to notify any recipient should any information contained herein change or subsequently become inaccurate. Unless otherwise
authorised by Schroders, any reproduction of all or part of the information in this document is prohibited.

Any data contained in this document have been obtained from sources we consider to be reliable. Schroders has not independently verified or validated such data and they should be independently verified
before further publication or use. Schroders does not represent or warrant the accuracy or completeness of any such data.

All investing involves risk including the possible loss of principal.

This material has not been reviewed by the regulators.

Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. This document may contain “forward-
looking” information, such as forecasts or projections. Please note that any such information is not a guarantee of any future performance and there is no assurance that any forecast or projection will be
realised. For your security, communications may be taped or monitored.

Third party data is owned or licensed by the data provider and may not be reproduced or extracted and used for any other purpose without the data provider's consent. Third party data is provided without any
warranties of any kind. The data provider and issuer of the document shall have no liability in connection with the third party data. The Prospectus and/or www.schroders.com contains additional disclaimers
which apply to the third party data.

The forecasts stated in this presentation are the result of statistical modelling, based on a number of assumptions. Forecasts are subject to a high level of uncertainty regarding future economic and market
factors that may affect actual future performance. The forecasts are provided to you for information purposes as at today’s date. Our assumptions may change materially with changes in underlying
assumptions that may occur, among other things, as economic and market conditions change. We assume no obligation to provide you with updates or changes to this data as assumptions, economic and
market conditions, models or other matters change.

40
Important information (2 of 4)
For readers/viewers in Argentina: Schroder Investment Management S.A., Ing. Enrique Butty 220, Piso 12, C1001AFB - Buenos Aires, Argentina. Registered/Company Number 15. Registered as Distributor of
Investment Funds with the CNV (Comisión Nacional de Valores). Nota para los lectores en Argentina: Schroder Investment Management S.A., Ing. Enrique. Butty 220, Piso 12, C1001AFB - Buenos Aires,
Argentina. Inscripto en el Registro de Agentes de Colocación y Distribución de PIC de FCI de la Comisión Nacional de Valores con el número 15.

For readers/viewers in Australia: Issued by Schroder Investment Management Australia Limited Level 20, Angel Place, 123 Pitt Street, Sydney NSW 2000 Australia ABN 22 000 443 274, AFSL 226473. It is
intended for professional investors and financial advisers only and is not suitable for retail clients.

For readers/viewers in Bahrain: The material has not been approved by the Central Bank of Bahrain which takes no responsibility for its contents. No offer to the public to purchase funds will be made in the
Kingdom of Bahrain and this invite is intended to be read by the addressee only and must not be passed to, issued to, or shown to the public generally.

For readers/viewers in Brazil: Schroder Investment Management Brasil Ltda., Rua Joaquim Floriano, 100 – cj. 142 Itaim Bibi, São Paulo, 04534-000 Brasil. Registered/Company Number 92.886.662/0001-29.
Authorised as an asset manager by the Securities and Exchange Commission of Brazil/Comissão de Valores Mobiliários (“CVM”) according to the Declaratory Act number 6816. This document is intended for
professional investors only as defined by the CVM rules which can be accessed from their website www.cvm.gov.br.
For readers/viewers in Canada: Schroder Investment Management North America Inc., 7 Bryant Park, New York, NY 10018-3706. NRD Number 12130. Registered as a Portfolio Manager with the
Ontario Securities Commission, Alberta Securities Commission, the British Columbia Securities Commission, the Manitoba Securities Commission, the Nova Scotia Securities Commission, the Saskatchewan
Securities Commission and the (Quebec) Autorité des marchés financiers.”

For readers/viewers in the People’s Republic of China: Issued by Schroder Investment Management (Shanghai) Co., Ltd. Unit 33T52A, 33F Shanghai World Financial Center, 100 Century Avenue, Pudong New
Area, Shanghai, China, AMAC registration NO. P1066560. Regulated by Asset Management Association of China (“AMAC”) This material has not been reviewed by the AMAC.

For readers/viewers in the European Union/European Economic Area: Schroders will be a data controller in respect of your personal data. For information on how Schroders might process your personal
data, please view our Privacy Policy available at www.schroders.com/en/privacy-policy or on request should you not have access to this webpage. Issued by Schroder Investment Management (Europe) S.A., 5,
rue Höhenhof, L-1736 Senningerberg, Luxembourg. Registered No. B 37.799.

For readers/viewers in Hong Kong S.A.R.: This document is intended to be for information purposes only and it is not intended as promotional material in any respect. This document is intended for
professional investors only as defined by Securities and Futures Ordinance (“SFO”) (and any rules made thereunder) or as otherwise permitted under the Hong Kong laws. Issued by Schroder Investment
Management (Hong Kong) Limited. Level 33, Two Pacific Place, 88 Queensway, Hong Kong. This material has not been reviewed by the Securities and Futures Commission of Hong Kong.

For readers/viewers in Indonesia: This document is intended to be for information purposes only and it is not intended as promotional material in any respect. This document is intended for professional
investors only as defined by the Indonesian Financial Services Authority ("OJK"). Issued by PT Schroder Investment Management Indonesia Indonesia Stock Exchange Building Tower 1, 30th Floor, Jalan Jend.
Sudirman Kav 52-53 Jakarta 12190 Indonesia PT Schroder Investment Management Indonesia is licensed as an Investment Manager and regulated by the OJK. This material has not been reviewed by the OJK.

For readers/viewers in Japan: Issued by Schroder Investment Management (Japan) Limited 21st Floor, Marunouchi Trust Tower Main, 1-8-3 Marunouchi, Chiyoda-Ku, Tokyo 100-0005, Japan Registered as a
Financial Instruments Business Operator regulated by the Financial Services Agency of Japan (“FSA”). Kanto Local Finance Bureau (FIBO) No. 90 This material has not been reviewed by the FSA.

41
Important information (3 of 4)
For readers/viewers in Kuwait: This invite is not for general circulation to the public in Kuwait. No Schroders’ products have been licensed for offering in Kuwait by the Kuwait Capital Markets Authority or any
other relevant Kuwaiti government agency. Any offering of Schroders products in Kuwait could be only on the basis of a private placement or public offering is, therefore, restricted in accordance with Law No.
7 of 2010 and the bylaws thereto (as amended). No private or public offering of Schroders’ products is being made in Kuwait, and no agreement relating to the sale of Schroders’ products will be concluded in
Kuwait. No marketing or solicitation or inducement activities are being used to offer or market products in Kuwait.

For readers/viewers in Malaysia: This presentation has not been approved by the Securities Commission Malaysia which takes no responsibility for its contents. No offer to the public to purchase any fund will
be made in Malaysia and this presentation is intended to be read for information only and must not be passed to, issued to, or shown to the public generally. Schroder Investment Management (Singapore) Ltd
does not have any intention to solicit you for any investment or subscription in any fund and any such solicitation or marketing will be made by an entity permitted by applicable laws and regulations.

For readers/viewers in Oman: The information contained in this material neither constitutes a public offer of securities in the Sultanate of Oman as contemplated by the Commercial Companies Law of Oman
(Royal Decree 4/74) or the Capital Market Law of Oman (Royal Decree 80/98), nor does it constitute an offer to sell, or the solicitation of any offer to buy Non-Omani securities in the Sultanate of Oman as
contemplated by Article 139 of the Executive Regulations to the Capital Market Law (issued by Decision No.1/2009). Additionally, this private placement memorandum is not intended to lead to the conclusion of
any contract of whatsoever nature within the territory of the Sultanate of Oman.

For readers/viewers in Qatar: The invite does not constitute an offer to the public and is for the use only of the named addressee and should not be given or shown to any other person (other than
employees, agents or consultants in connection with the addressee’s consideration thereof). No transaction will be concluded in your jurisdiction and any inquiries regarding the presentations should be made
to SIM Ltd, UK.

For readers/viewers in Saudi Arabia: Schroder’s products may only be offered and sold in the Kingdom of Saudi Arabia in accordance with Article 4 of the Investment Funds Regulations issued on December
24, 2006 (the “Regulations”). Article 4(b)[(1)/(4)]* of the Regulations states that, if investment fund units are offered to [certain persons specified in the Regulations/no more than 200 offerees in the Kingdom of
Saudi Arabia]* and the minimum amount payable per offeree is not less than Saudi Riyals 1 million or an equivalent amount in another currency, such offer of investment fund units shall be deemed a private
placement for purposes of the Regulations. Investors are informed that Article 4(g) of the Regulations places restrictions on secondary market activity with respect to such investment fund units.

For readers/viewers in Singapore: This presentation is intended to be for information purposes only and it is not intended as promotional material in any respect. This document is intended for professional
investors only as defined by Securities and Futures Act to mean for Accredited and or Institutional Clients only, where appropriate. Issued by Schroder Investment Management (Singapore) Ltd (Co. Reg. No.
199201080H) 138 Market Street #23-01 CapitaGreen, Singapore 048946. This document has not been reviewed by the Monetary Authority of Singapore.

For readers/viewers in South Korea: Issued by Schroders Korea Limitedn26th Floor, 136, Sejong-daero, (Taepyeongno 1-ga, Seoul Finance Center), Jung-gu, Seoul 100-768, South Korea . Registered and
regulated by Financial Supervisory Service of Korea (“FSS”)This material has not been reviewed by the FSS.

For readers/viewers in Switzerland: For readers/viewers in Switzerland: Marketing material for professional clients and qualified investors only. This document has been issued by Schroder Investment
Management (Switzerland) AG, Central 2, CH-8001 Zurich, Switzerland a fund management company authorised and supervised by the Swiss Financial Market Supervisory Authority FINMA, Laupenstrasse 27,
CH-3003 Bern

42
Important information (4 of 4)
For readers/viewers in Taiwan: Issued by Schroder Investment Management (Taiwan) Limited 9F., No. 108, Sec. 5, Xinyi Road, Xinyi District, Taipei 11047, Taiwan. Tel +886 2 2722-1868 Schroder Investment
Management (Taiwan) Limited is independently operated. This material has not been reviewed by the regulators.

For readers/viewers in Thailand: This presentation has not been approved by the Securities and Exchange Commission which takes no responsibility for its contents. No offer to the public to purchase any
fund will be made in Thailand and this presentation is intended to be read for information only for professional investors as defined by regulations and it is not intended as promotion material in any respect. It
must not be passed to, issued to, or shown to the public generally. Schroder Investment Management (Singapore) Ltd does not have any intention to solicit you for any investment or subscription in any fund
and any such solicitation or marketing will be made by an entity permitted by applicable laws and regulations.

For readers/viewers in the United Arab Emirates: Schroder Investment Management Limited, located in Office 506, Level 5, Precinct Building 5, Dubai International Financial Centre, PO Box 506612 Dubai,
United Arab Emirates. Regulated by the Dubai Financial Services Authority. This document is not subject to any form of approval by the DFSA. Accordingly, the DFSA has not approved any associated documents
nor taken any steps to verify the information and has no responsibility for it. This document is intended to be for information purposes only and it is not intended as promotional material in any respect. This
document is intended for professional investors only as defined by the DFSA rules which can be accessed from their website www.dfsa.ae.

For readers/viewers in the United Kingdom: Schroders will be a data controller in respect of your personal data. For information on how Schroders might process your personal data, please view our Privacy
Policy available at www.schroders.com/en/privacy-policy or on request should you not have access to this webpage. Issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y
5AU. Registered Number 1893220 England. Authorised and regulated by the Financial Conduct Authority.

For readers/viewers in the United States: For financial professionals and consultant only. Schroder Investment Management North America Inc., 7 Bryant Park, New York NY 10018-3706. CRD
Number 105820. Registered as an investment adviser with the US Securities and Exchange Commission.

43