Union Securities Research Team

research@unionsecurities.ch

January 7, 2020

Equity Market Review

Equity Highlights

January 7, 2020 2

Performance

ScheduleImportant Events This Week

Tuesday: US ISM Services, US Durable Goods Orders

Wednesday: US Crude Oil Inventory

Thursday: US Jobless Claims

Friday: US Monthly Job Report

Total return performance on both the portfolios and the indices

Strategy European Global Leaders

US Global Leaders

Next-Gen Leaders

YtD 1.04% vs 0.75% / 0.28% alpha YtD 0.39% vs 0.15% / 0.24% alpha

Weekly 0.06% vs -0.24% / 0.29% alpha Weekly 0.08% vs -0.12% / 0.20% alpha

2019 32.10% vs 29.34% / 2.76% alpha 2019 35.66% vs 31.49% / 4.17% alpha

2018 -6.90% vs -11.26% / 4.36% alpha 2018 1.48% vs -4.39% / 5.86% alpha

Since Inception 181.59% vs 124.57% / 57.03% alpha Since Inception 281.39% vs 215.97% / 65.42% alpha

Since August 2011 Benchmark: EuroStoxx 50 Since August 2011 Benchmark: S&P 500

YtD 0.00% vs 0.00% / 0.00% alpha YtD 0.86% vs 0.72% / 0.14% alpha

Weekly -0.48% vs -0.68% / 0.20% alpha Weekly 0.36% vs 0.29% / 0.07% alpha

2019 31.59% vs 18.10% / 13.49% alpha 2019 33.55% vs 39.46% / -5.91% alpha

2018 -12.99% vs -16.04% / 3.05% alpha 2018 6.92% vs 0.01% / 6.91% alpha

Since Inception 30.82% vs 12.52% / 18.30% alpha Since Inception 65.13% vs 53.56% / 11.57% alpha

Since August 2017 Benchmark: Topix Since July 2017 Benchmark: Nasdaq

European Global Leaders US Global Leaders

Japanese Global Leaders Next-Gen Leaders

Global Leaders - Performance per Year

-20%

-10%

0%

10%

20%

30%

40%

2011 2012 2013 2014 2015 2016 2017 2018 2019

Global Leaders Europe EuroStoxx Global Leaders US S&P 500

January 7, 2020 3

Global Leaders – Relative performance per Year

January 7, 2020 4

-10%

-5%

0%

5%

10%

15%

2011 2012 2013 2014 2015 2016 2017 2018 2019

Global Leaders Europe Global Leaders US

Global Leaders - ESG Rating

RobecoSAM is an investment company, based in Zurich with a focus on sustainability investments.

They provide a sustainability score on thousands of global companies. The score is measured as a percentile

rank, 100 representing the highest sustainability score.

They look at three aspects :

The Social Dimension: Human Capital Development, Talent Attraction & Retention, Health & Safety, etc…

The Environmental Dimension: Environmental Policy & Management, Operational Eco-Efficiency, Climate

Strategy, etc…

The Economic Dimension: Corporate Governance, Codes of Business Ethics, Risk & Crisis Management,

Customer Relationship Management, Tax Strategy, etc…

The Global Leaders are well established, successful companies that tend to have a good ESG rating with an

average score above 60.

On the other hand, the Next-Gen Leaders are younger, fast growing companies that focus primarily on product

development and client acquisition and thus tend to have a sub average sustainability score.

January 7, 2020 5

Companies with a market cap. above $100bn

January 7, 2020 6

There are now 111 companies that trade

with a market capitalization above $100bn.

Three have a market cap greater that

$1Trn and 8 have a market cap greater

than $500bn.

62 are American, 27 are European and 11

are Chinese (the others are from Saudi

Arabia, Japan, India and Canada).

21 are Tech companies, 18 are Financials

and 18 are Healthcare companies.

The table only shows the first 37

companies, please contact us for more

details.

NameMkt Cap

($bn)

Revenue

($bn)Sector

Country

Name

ARAMCO 1874.1 315.1 Energy Saudi Arabia

Apple 1304.8 260.2 Information Technology United States

Microsoft 1203.1 125.8 Information Technology United States

Alphabet 922.9 136.8 Communication Services United States

Amazon 916.2 232.9 Consumer Discretionary United States

Facebook 585.3 55.8 Communication Services United States

Alibaba 569.0 56.2 Consumer Discretionary China

Berkshire Hathaway 553.7 225.4 Financials United States

Tencent 468.9 47.3 Communication Services China

JP Morgan 437.2 131.4 Financials United States

Johnson & Johnson 383.9 81.6 Health Care United States

Visa 369.9 23.0 Information Technology United States

WalMart 337.2 514.4 Consumer Staples United States

Nestlé 321.3 93.8 Consumer Staples Switzerland

Bank of America 316.8 110.6 Financials United States

Procter & Gamble 311.5 67.7 Consumer Staples United States

Mastercard 301.2 15.0 Information Technology United States

Exxon 295.2 279.3 Energy United States

ICBC 298.5 169.1 Financials China

Samsung Electronics 284.2 221.6 Information Technology South Korea

TSMC 292.7 34.2 Information Technology Taiwan

AT&T 285.5 170.8 Communication Services United States

UnitedHealth 278.5 226.2 Health Care United States

Roche 278.0 58.1 Health Care Switzerland

Walt Disney 260.7 69.6 Communication Services United States

Intel 260.3 70.8 Information Technology United States

Verizon 253.9 130.9 Communication Services United States

Novartis 239.3 53.2 Health Care Switzerland

Home Depot 238.2 108.2 Consumer Discretionary United States

Coca-Cola 237.1 34.3 Consumer Staples United States

LVMH 238.1 55.3 Consumer Discretionary France

RDSA (GBP) 234.0 388.4 Energy Netherlands

Merck & Co 231.6 42.3 Health Care United States

Toyota Motor 231.5 272.6 Consumer Discretionary Japan

Chevron 227.9 158.9 Energy United States

Wells Fargo 227.5 101.1 Financials United States

Ping An Insurance 223.5 161.0 Financials China

European Global Leaders – Weekly Recap

Market Wise

The EuroStoxx jumped in the middle of the week after news of policy support from China’s central bank to

boost its economy, but finally fell after a US airstrike killed a top Iranian commander.

The strategy strongly outperformed its benchmark.

Alpha Wise

Vivendi jumped after Tencent agreed to buy 10% of Universal Music Group after months of talks. The deal

values the world’s biggest music company at €30bn. Tencent and its partners can increase their stake to as

much as 20% at the same valuation until January 15, 2021.

Total rose as other oil companies after the US killed an Iranian General in an airstrike. Investors were

concerned by a possible supply disruption due to escalating tensions with a heightened risk of attacks near

energy facilities.

EssilorLuxottica fell after the company said it was the target of a €190M fraud at a factory in Thailand. The

effective final amount is subject to decrease due to insurance, anticipated recovery of funds currently frozen

on various bank account, and filed legal complaints in Thailand. This amount should also be put into

perspective given the annual free cash flow capacity of € 2Bn and a market cap of € 60Bn.

Novo Nordisk dropped after an analyst cut the recommendation to neutral from buy, due to competition

expected to intensify through 2022 pressuring global insulin pricing.

January 7, 2020 7

US Global Leaders – Weekly Recap

Market Wise

US Markets jumped in the middle of the week after news of policy support from China’s central bank to boost

its economy and after US President Donald Trump said he will sign the first phase of a trade deal with China

on January 15. It finally fell after a US airstrike killed a top Iranian commander.

The strategy strongly outperformed its benchmark.

Alpha Wise

Exxon Mobil and Chevron rose as other oil companies after the US killed an Iranian General in an airstrike.

Investors were concerned by a possible supply disruption due to escalating tensions with a heightened risk

of attacks near energy facilities.

January 7, 2020 8

Next-Gen Global Leaders – Weekly Recap

Market Wise

Nasdaq jumped in the middle of the week after news of policy support from China’s central bank to boost its

economy and after US President Donald Trump said he will sign the first phase of a trade deal with China on

January 15. It finally fell, but still positive, after a US airstrike killed a top Iranian commander.

The strategy outperformed its benchmark.

Alpha Wise

Illumina slid after it agreed with Pacific Biosciences to terminate their merger agreement due to a lengthy

regulatory approval process and a continued uncertainty of the ultimate outcome.

January 7, 2020 9

Investment Recommendations

January 7, 2020 10

Global Leaders

January 7, 2020 11

Benchmark: S&P 500Benchmark: EuroStoxx 50

European Portfolio US Portfolio

The Global Leaders are quality companies that we believe are fit for long-term investment.

Check our website for more information.

*Since August 2011

Portfolio Benchmark Delta Annualized Portfolio Benchmark Delta Annualized

Performance 181.59% 124.57% 57.03% 13% Performance 281.39% 215.97% 65.42% 17%

Weekly Perf. 0.1% -0.2% 0.3% Weekly Perf. 0.1% -0.1% 0.2%

Performance YTD 1.04% 0.75% 0.28% Performance YTD 0.39% 0.15% 0.24%

Volatility 14.3% 18.8% -4.5% Volatility 13.4% 13.7% -0.3%

Max DrawDown -18.7% -27.8% 9.1% Max DrawDown -18.8% -19.4% 0.6%

-20

30

80

130

180

230Index Benchmark

-10

40

90

140

190

240

Index Benchmark

Global Leaders – Current List

12January 7, 2020

European Portfolio US Portfolio

Name Ticker Exch Code Theme

Apple AAPL US Hardware

Microsoft MSFT US Software

Alphabet GOOGL US Internet Media

Amazon AMZN US e-Commerce

Facebook FB US Internet Media

Berkshire Hathaway BRK/B US Investment Company

JP Morgan JPM US Banks

Visa V US Payment Technology

Johnson & Johnson JNJ US Pharmaceuticals

Exxon XOM US Big Oil

Bank of America BAC US Banks

AT&T T US Big Telco

Mastercard MA US Payment Technology

Walt Disney DIS US Media & Entertainement

Verizon VZ US Telcos

Chevron CVX US Big Oil

Merck & Co MRK US Pharmaceuticals

Pepsico PEP US Food Products

Citigroup C US Banks

McDonald's MCD US Restaurants

Medtronic MDT US Medical Devices

Adobe ADBE US Software

Nike NKE US Apparel

Costco COST US Mass Merchants

Honeywell HON US Diversified Industrials

Accenture ACN US IT Services

Starbucks SBUX US Restaurants

Bristol Myers BMY US Pharmaceuticals

Goldman Sachs GS US Banks

Name Ticker Exch Code Theme

Nestlé NESN SW Food Products

Roche ROG SW Pharmaceuticals

RDSA (EUR) RDSA NA Big Oil

LVMH MC FP Luxury Goods

Novartis NOVN SW Pharmaceuticals

SAP SAP GY Software

L'Oréal OR FP Household Products

Unilever NV UNA NA Food and Household Products

Total FP FP Big Oil

Novo Nordisk NOVOB DC Pharmaceuticals

Astrazeneca AZN LN Pharmaceuticals

Airbus AIR FP Aerospace

ASML ASML NA Semiconductors Equipment

Allianz ALV GY Diversified Insurance

Volkswagen VOW3 GY Automobiles

Inditex ITX SM Apparel

Kering KER FP Luxury Goods

BNP BNP FP Banks

Banco Santander SAN SM Banks

AXA CS FP Diversified Insurance

Vinci DG FP Infrastructure

Essilor EL FP Medical Devices

Heineken HEIA NA Brewers

Philips PHIA NA Health Care

Dassault Systemes DSY FP Software

Vivendi VIV FP Media

Ferrari RACE IM Luxury Goods

Fresenius FRE GY Diversified Health Care

Thales HO FP Defense

Ubisoft UBI FP Video Games

Japan Global Leaders

January 7, 2020 13

Benchmark: Topix

Japan Portfolio

We have introduced a Japanese version of the Global Leaders portfolio. Check our website for more information.

*Since September 2017

NameMkt Cap

($bn)Sector

Toyota Motor 199.6 Consumer Discretionary

Softbank Group 107.6 Telecommunication Services

Keyence 67.4 Information Technology

Nintendo 48.2 Information Technology

Nidec 42.7 Industrials

Kao 38.8 Consumer Staples

Shiseido 27.1 Consumer Staples

Komatsu 27.0 Industrials

Terumo 21.8 Health Care

Recruit Holdings 53.6 Industrials

Fujitsu 75.5 Consumer DiscretionaryPortfolio Benchmark Delta

Performance 30.82% 12.52% 18.30%

Weekly Perf. -0.5% -0.7% 0.2%

Performance YTD 0.00% 0.00% 0.00%

Volatility 18.2% 14.7% 3.5%

Max DrawDown -26.1% -24.4% -1.6%

-10

0

10

20

30

40Index Benchmark

Next-Gen Leaders

January 7, 2020 14

Benchmark: Nasdaq

Next-Gen Leaders

Next-Gen Leaders are cutting-edge companies with exciting growth profiles. Check our website for more information.

*Since July 2018

Communication Services Industrials

Information Services Information Services

Online Dating Website Research & Analytics

Social Network Information Technology

Video Games Big Data Analytics

Web Advertising Cloud Based - CRM Application

Consumer Discretionary Cloud Based - HR Application

Food delivery Cloud-Based Software and Services

Online Fashion Retail Creativity Software

Health Care Design Software

DNA Sequencing Engineering Software

Human Data Science Internet Services

Medical Robots Navigation Systems

Medical Technology Payment Technologies

Research & Analytics

Next-Gen Investment Themes

Portfolio Benchmark Delta

Performance 65.13% 53.56% 11.57%

Performance 5D 0.4% 0.3% 0.1%

Performance YTD 0.86% 0.72% 0.14%

Volatility 21.3% 18.5% 2.8%

Max DrawDown -27.1% -22.7% -4.3%

-10

0

10

20

30

40

50

60

70Index Benchmark

Contacts

Union Securities Switzerland Research

research@unionsecurities.ch

Tel: +41 22 59 18 64

Union Securities Switzerland SA is a FINMA-registered Securities Dealer.

Union Securities Switzerland SA

11 Cours de Rive

1204 Geneva Switzerland

www.unionsecurities.ch

January 7, 2020 15

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January 7, 2020 16