US Equities Seven Themes for the Post-Pandemic Economy

US equities Seven themes for the post-pandemic economy

Chief Investment Office GWM | 23 April 2020 4:50 pm EDT Laura Kane, CFA, CPA, Head Thematic Research Americas, laura.kane@ubs.com; Michelle Laliberte, CFA, Thematic Investment Associate, [email protected]; Bradley Ball, Financials Analyst Americas, [email protected]; Robert Samuels, Consumer Analyst Americas, [email protected]; Adam Scheiner, CFA, Industrial and Materials Analyst Americas, [email protected]; Kevin Dennean, CFA, Technology & Communication Services Analyst Americas, [email protected]; Jonathan Woloshin, CFA, Real Estate & Lodging Analyst Americas, [email protected]; James Dobson, CFA, MLP and Utilities Analyst Americas, [email protected]; David Lefkowitz, CFA, Sr. Equity Strategist Americas, [email protected]; Reid Gilligan, Equity Associate Analyst Americas, [email protected]

• We believe that the COVID-19 pandemic will have lasting economic consequences. • We anticipate changes to consumer behavior, corporate strategy, and government policy and spending decisions. • At the same time our relationships with key trading partners will experience disruption. • In this report we provide equity investment ideas for a post pandemic world. • For more information on how COVID-19 will influence the global economy and cross-asset class strategy going forward, please see our global whitepaper, After COVID-19. • For further context around how COVID-19 has accelerated certain secular trends and longer-term investment (LTI) themes, see our report, Decade Ahead and COVID-19.

In a short time, the COVID-19 outbreak has brought many changes to markets, the economy, and our daily lives. Some of these changes, like extreme financial market volatility, rapidly rising unemployment, and strict social distancing, will be temporary. Others will be long-lasting. Specifically, we believe that the experience of this pandemic will leave a lasting imprint on consumer behavior, corporate decision-making, and government policy and spending decisions. At the same time our relationships with key trading partners will experience disruption. The ripple effects from these changes will touch nearly every industry from healthcare to real estate. In the following pages, we explore these shifting currents and discuss how to position US equity portfolios for the post-pandemic world. There are seven investment themes that we see arising from the COVID-19 pandemic. 1. Virtual becomes "at-home" reality 2. Clicks over bricks 3. Keeping the change in payments 4. Pandemic preparedness is the new counter-terrorism 5. Rethinking business practices – localizing and digitizing 6. Sharing is not always caring 7. Depending on dividends This report has been prepared by UBS Financial Services Inc. (UBS FS). Analyst certification and required disclosures begin on page 13. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. US equities

1. Virtual becomes "at-home" reality Across the country, social distancing has become the norm in the collective fight against the spread of COVID-19. As a result, most of our daily activities – from work to leisure – have quickly transitioned from the physical to the virtual world. While we expect quarantining measures to eventually be lifted, we believe that some habits formed during this time spent indoors may endure. Specifically, we expect to see less personal travel (for now), more in-home, digital leisure experiences, and ongoing shifts toward telecommuting.

In previous thematic reports, we had discussed the growing share of consumer dollars being spent on experiences vs. physical goods. This trend has been temporarily disrupted as restaurants, theme parks, and stadiums have closed their doors, and travel has ground to a halt amid health safety concerns. While we do believe that air travel will return to normal at some point, it could take as much as one to two years (or more) for air travel to get back to 2019 level (with domestic travel recovering faster than international), assuming no further outbreak later this year. This would mean potentially little near-term demand for aircraft outside of replacement orders, which would be negative for aircraft manufacturers. The airlines would also see a drag from reduced leisure travel, as well as the slow return of business travel, which is the highest margin segment. We note that some airline stock prices already reflect this highly uncertain outlook.

Without travel plans to look forward to, consumers are finding ways to enjoy their leisure time at home in the virtual realm. Fortunate- ly, internet connectivity is ubiquitous in the US, with more than 112mn wired broadband connections and 490mn wireless connections (greater than the US population of 330mn). This has led to wide range of entertainment options while sheltering-in-place. For example, over-the-top (OTT) video consumption, which was a secular force pre-COVID-19, has only gained momentum due to the pandemic. Paid services such as Netflix have likely gained a significant number of new subscribers, but we believe free-to-stream such as Pluto TV, Crackle, Tubi TV, Vudu, and Xumo have also gained awareness and subscribers. The impact on traditional media is likely negative on balance, but with some potential benefits. Further reduced viewership of traditional video will pressure the highly profitable advertising revenues, but at the same time a dearth of quality content against a vast (more than 200 globally with more launching every month) creates the opportunity for licensing back catalogs of content.

Another area that has seen an uptick is video gaming. The video game industry is experiencing a surge in new users and significantly increased engagement. We can see this by looking at games down- loaded, both on consoles and smartphones, data traffic from the connectivity-focused companies, and through hours of video games watched on platforms such as Amazon's Twitch and Alphabet's Youtube. While the current level of user level and engagement will be unsustainable when kids go back to school and employees return to work, the recent uptick has more clearly shown the opportunity that exists within gaming and e-sports, including on the advertising side. We are seeing major brands running marketing partnerships

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with popular games, such as Fortnite and Animal Crossing, and more companies are considering advertising on streaming platforms. The trend towards a more mainstream video game and e-sports culture was already under way but the global quarantine has sped up the pace. Longer term we would expect e-sports leagues to grow in pop- ularity, advertising strategies to shift, and the industry to consolidate. A number of large companies are coming to market with cloud game streaming platforms without major publishers behind them and could potentially see AAA publishers be acquired to bolster the offering.

Looking forward, we expect the trend toward at-home, virtual experiences, from streaming to gaming, to continue until a vaccine is discov- ered. As a result, we could see consumers investing more discretionary dollars in making their "nests" as comfortable as possible, leading to home furnishing purchases and do-it-yourself home improvement projects. This trend could benefit home improvement retailers.

Next, shifting to the professional world, many employers have required or encouraged workers to telecommute until virus concerns abate. In light of this, we expect a longer-reaching impact of COV- ID-19 will be companies provisioning remote workforces, both as a disaster recovery strategy and as part of an ongoing effort to bet- ter balance real-estate costs and geographically diversify headcount. Traditional disaster recovery strategies typically require the provisioning of redundant systems in secondary locations, tying up capital while often requiring significant employee travel. Looking forward, we expect companies, particularly larger enterprises, will harness the power of cloud computing to enable increased remote working and work-from-home capabilities. This will require investment in data centers, and in our view, will benefit providers of key semiconductors, communications equipment, software, and security used in cloud computing environments.

The implications of remote working trends for the office real estate market are mixed. It is likely that a percentage of firms will allow an increased level of remote working, and we could see sales/client- focused businesses reducing their office footprints. That being said, the potential reversal of the office densification trend (i.e. reducing square footage per employee) could offset some of this weakening demand for office space, as employers seek to provide greater physical distance between employees for health purposes. We could also see increased demand for office space coming from the life-sciences and research segment in response to additional funding and demand for pharmaceutical and biotechnology research going forward.

Finally, if the trend toward increased remote working arrangements persists, we could see the need for additional antenna and tower capacity. Additional antennas on an existing tower carry extreme- ly high incremental margins for the tower companies (which were already benefiting from 5G trends).

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2. Clicks over bricks The current pandemic will have long-lasting effects on the consumer and will likely accelerate the growth in online sales. Online shopping, which currently represents roughly 12% of total retail sales, has soared during the economic shutdown and we believe this trend will endure. Grocery shopping online will likely be a major beneficiary of "quarantine-life." Pre-virus, roughly 3% of groceries were purchased online. Post-virus, some experts think this percentage could rise to as much as 30%, as consumers become accustomed to this modern-day convenience. We see this as a near-term boost for grocers, but longer term, it's likely that companies with more established online sales and delivery platforms will prevail in the space. Beyond the grocery segment, we may also see some forced switching to "click to buy" due to the shrinkage of retail in light of bankruptcies and store closures. As a result, retailers and providers of consumer goods and services will have to adapt to increasingly virtual customers that never set foot in a store or touch a product. A virtual consumer will require new engagement strategies focused on brand intimacy and immediacy.

The investment implications of an accelerated shift toward e-commerce span multiple sectors. In the consumer segment, the winners will be companies that can leverage strong e-commerce capabilities, such as Amazon, as well as omni-channel retailers and strong brands. On the other hand, we think traditional brick-and-mortar retail will only experience additional market share losses and store closures. Within communication services, e-commerce trends should support demand for digital advertising, especially across search and social media, along with digital campaign management and customer rela- tionship management. Shifting to industrials, parcel carriers should benefit, although they will see near-term headwinds as they adjust to the higher costs of e-commerce. We could also see a rebound in growth for containerboard boxes, which would support paper companies. On the real estate side, we see opportunities in data centers and warehouses. Demand for warehouse space was already strong as a result of e-commerce growth and demands for ever-shorter delivery times. We believe the increased demand for fresh food and household staples deliveries, in particular, could further accelerate warehouse demand. In addition, the acute shortages of many household basics could lead to an increased level of inventory stocking in warehouses.

3. Keeping the change in payments The shutdowns, social distancing, and broadly negative impact of the COVID-19 crisis on all aspect of commercial activity have caused a significant slowing of traditional card-based transaction volumes. Card payments have broadly declined across major areas of spending including travel, lodging, entertainment and virtually every discretionary spending category (including products, services and experiences). Since the crisis began, cross-border transactions have dried- up as travel and tourism have broadly ceased. While these negative effects on payment volumes are expected to be temporary, one trend has emerged during the COVID-19 crisis that we believe will continue, namely the sharp increase electronic transactions.

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We see increasing ecommerce, as well as digital invoicing and bill paying, as secular trends that will likely accelerate when the economy inevitably emerges from the crisis. As consumers and businesses have grown increasingly comfortable transacting over digital and mobile devices, the ease, speed and security of the experience should help motivate more non-traditional payments to these channels. Per- son-to-person (P2P), person-to-business (P2B) and business-to business (B2B) payment activities that were formerly executed using checks and cash should move easily over to online channels. Mean- while, we would expect newer digital wallet and tap-to-pay features to continue to disintermediate cash at the point-of-sale to help mini- mize physical interactions such as cashiers making change.

This accelerating trend in favor of digital, mobile and contactless payments activity should benefit the major card networks. While we would expect payment volumes to grow faster post COVID-19, we believe the networks' total addressable market (TAM) should also expand to include new types of transactions. In a post COVID-19 world, we would not be surprised to see consumers' rent, healthcare and even utility payments (to name a few) move onto the payment networks' rails. Moreover, we can imagine a world where businesses invoice and remit payments electronically over the established networks. The upshot is that today's COVID-19 related inconveniences could actually spur improving ease and efficiency of electronic payments in the future.

4. Pandemic preparedness is the new counterterrorism The COVID-19 pandemic exposed the cracks in the global healthcare system. As a result, we expect to see changes going forward in terms of how healthcare services are accessed, administered, and paid for. At the same time, the pandemic has created investment opportunities across several sub-segments of healthcare.

One of the primary criticisms of the US's response to the pandemic has been inadequate diagnostic testing. Countries like South Korea were quickly able to organize private domestic companies to develop tests at scale, administer tests, and quickly identify and quarantine those testing positive. Pressure will be on the US and Western Euro- pean countries to develop the same capability. Broad-based population testing will almost certainly be instituted as part of the return to work plans in the US. Revenue from those tests will likely flow to large suppliers and test processing companies but ultimate bot- tom-line impacts are less certain due to limited ability to profit from COVID-19. These diagnostic testing companies and their suppliers will increasingly be viewed as national security assets, but it is yet to be determined how these companies will be compensated for essentially reserving spare capacity to quickly make new tests when needed in an emergency situation. The larger, longer-term question will be who controls the patient data and what are the privacy implications? This will be a double-edged sword for companies, as owning data brings a competitive advantage but also more scrutiny from regulators.

Another major bottleneck to containing and treating COVID-19 has been hospital capacity. Hospitals have been closing over the last cou-

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ple of decades, especially in cities and rural communities. This trend likely stops near term, as governments push for alternatives to closures. This likely leads to more consolidation among hospitals, with some form of state, local or federal subsidy for keeping a weak facility open, or at least available as flex capacity. For-profit hospital companies should benefit from the pressure to keep existing hospitals open. For example, they may be able to acquire facilities at low(er) prices in exchange for a commitment to keep them on-line and available.

A final – and ongoing – concern is the question of how to pay for healthcare. COVID-19 likely increases voter acceptance of greater government involvement in health care. After prior crises (Great Depression, World War 2, 9-11), a more active federal government emerged, leading to programs like Social Security, massive military spending, and homeland security efforts. These forces likely make single-payer health care in the US more viable politically over the medi- um term (three to five years). The rationale being that if the US government can authorize USD 2.2tr in spending on COVID-19 stimu- lus, then the government spending USD 2tr to shift health care cover- age from employers to the government seems less daunting. In addition, limited access to health care – due high-out-of-pocket costs, for example – will likely be viewed as an exacerbating factor in the COVID-19 spread and death toll. While single-payer health care will still be difficult to achieve in the US, we believe COVID-19 will shift the collective view enough to keep the issue at the forefront of the political debate, which will cap managed care valuations well below their late-2018 highs. To the extent the access and affordability dis- cussion settles on expanded Medicaid, Medicare and ACA programs, the managed care companies could benefit. This goldilocks outcome is a plausible scenario to consider in 2021.

Despite the hurdles the nation has faced in treating coronavirus patients, a number of promising drug treatments have emerged. While several pharmaceutical companies are leading in terms of potential drug treatments or vaccines, we would recommend taking a diversified approach to investing in COVID-19 treatments. It is unlikely that any one COVID-19 therapeutic treatment has a major financial impact on any specific drug company. So far, the large companies have characterized their efforts as “not-for-profit.” They do not want to appear as though they are profiting from COVID-19, at least not during the acute phase. Since the most impactful treatment will likely be vaccine-based, the direct financial impact to a drug company is limited – this will not be chronic therapy, but rather a one-time shot, unlikely to be priced for excessive (or even any) profit.

That being said, we do see the coronavirus as a tailwind for the broader pharma industry. The positive role drug companies are playing in terms of coming up with treatments should improve the industry's political standing in the face of drug pricing pressure. In addition, the pharma industry is one of the nation's employers that to date has retained a significant internal workforce and funds legions of attor- neys, consultants and advertising executives, despite the economic shutdown. This should further highlight the industry’s broader economic importance, and should help insulate the industry from some

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of the more onerous pricing proposals in Congress. Pharma relative and absolute valuations have been historically low, in part because of concerns over potential US drug pricing legislation. Pharma valuations should improve as the industry positions itself as a pillar of both economic resilience and needed innovation during the COVID-19 crises.

Looking to the future, technology will play a role in making health care more accessible and efficient. During the pandemic, we've seen a surge in telehealth platform usage, as patients seek to reduce exposure to the deadly virus and avoid overcrowded healthcare facilities. In the near-term, dedicated telehealth platforms will likely continue to outperform, but longer term, we expect some competition from large insurers and hospital systems that own their physician networks. While there has been a lot of focus on the telehealth trend, this is just the tip of the iceberg in the growing field of "healthtech." In particular, we expect to see digital healthcare data harnessed to improve diagnostics, assess treatment options, and anticipate health care needs. For example, data about healthcare populations both lon- gitudinally and from real-time monitoring will be the feedstock that powers machine learning systems to identify nascent outbreaks, as well as longer-term solutions and care. Healthcare delivery will be increasingly virtual and increasingly remote, driving the same need for increased cloud computing capacity and even more ubiquitous connectivity. In particular, we see telemedicine as a catalyst for 5G adoption globally, as it will likely drive a need for real-time monitoring. Pri- vacy rights and civil liberties will have to be balanced against increased monitoring, but one of the far-reaching lessons of COVID-19 is high- lighting just how under-prepared and ill-equipped every global economy was for a pandemic.

5. Rethinking business practices – localizing and digitizing We believe that COVID-19 is causing a sea change in how companies will view supply chains going forward. In particular, we expect them to reduce exposure to the more volatile regions far from their home ter- ritories. Companies have recently commented on how the transition of supply chains out of China last year has helped them to weather the current crisis. We would expect to see companies exploring mov- ing some operations back to the US or areas closer to home such as Mexico, in an effort to diversify their supply chains. This is especially true for companies involved in goods that are deemed critical to public health, such as manufacturers of medical protective equipment (PPE) and pharmaceutical treatments. Localizing efforts could cause a boost in new factory construction, which could benefit companies exposed to automation and robotics technologies that help improve new plant productivity. These trends should also be positive for warehouse demand.

In addition to supply chain changes, companies will also reassess their IT infrastructure in light of some of the changes we expect in a post-pandemic economy. For example, we believe that the combined forces of servicing a virtual consumer, and a more distributed workforce, will lead to increased cloud adoption over the long term. This is clearly a positive for providers of cloud infrastructure and services, as well as for data centers. However, the near-term outlook for some of

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these companies is likely "clouded" by a contraction in IT spending as well as a retrenchment from ambitious, transformational IT projects.

In the near term, providers of enterprise hardware and communications equipment will see mixed trends, with some benefit from emergency capacity additions partially offset by overall lower economic and business activity. Software companies should benefit from an inher- ently higher mix of subscription revenues that has only increased with the adoption of software-as-a-services (SaaS).

While software companies' revenues are likely more immune to the impact of COVID-19, new projects will likely be pushed out. This will present a headwind for the key performance indicators such as bookings, billings, and remaining performance obligations (RPO) that investors carefully monitor to understand the true underlying health of software businesses.

A recession will almost undoubtedly lead to a contraction in IT spending. In this environment, we believe spending will focus on essen- tial maintenance rather than more growth-oriented projects. Howev- er, we believe the post-COVID recovery will see greater adoption of not just cloud infrastructure, but also third-party cloud applications at the expense of in-house solutions. Constrained IT budgets and the new world of virtual consumers will likely force companies to choose proven, available cloud-based solutions that will power digital transformation at speed rather than face continued in-house investment for an uncertain outcome.

6. Sharing is not always caring Over the past decade, technology has unleashed the potential for sharing high cost assets among strangers. For example, with help of the internet, GPS, and smartphones, car-pooling in your parents' station wagon transitioned to vast ride-hailing and ride-sharing platforms accessible through a finger tap on a mobile device. Ride sharing is just one example among many other industries – from home rentals to co-working spaces – that make up the modern-day "sharing economy." For those unfamiliar with the term, the World Economic Forum (WEF) defines it as an economic model that focuses on the sharing of underutilized assets, monetized or not, in ways that improve efficiency, sustainability and community. Going forward, we believe that COVID-19 has altered the path of some sectors within the sharing economy.

Given the trends toward remote working and away from office densification, we expect to see disruption in the rise of co-working, or flexible, workspaces. The past decade has seen rapid growth in this space. According to Colliers International, the number of co-working spaces in the US grew from just 300 in 2010 to 4,000 by the end of 2017. More recently, the pace of growth has been slowing as the market matures, and we expect COVID-19 to be another drag on the sector. Since the coronavirus is spread through human contact and exposure to contaminated surfaces, we believe that appetite for shared office space will diminish. The longer-term outlook for flexible work space is cloudy. There is the potential to shift co-working business models toward more "pandemic-proof" office spaces, with

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more space between desk and limits on occupancy, but this will take time and investment. Further, shelter-in-place orders have provided a "proof-of-concept" for the efficacy of working from home.

Other sharing trends that COVID-19 may influence include ride sharing and home rental. On ride sharing, we may see some consumer apprehension to share a vehicle with an unknown passenger, who could be sick. On the flip side, we could actually see more demand for ride hailing, as urban dwellers seek to avoid overcrowded public transportation (however, they will likely choose a private rather than shared vehicle option). Ride-hailing platforms that also in engage in food delivery could see growth in that segment help to offset temporary reductions in passenger demand until virus concerns subside. Shifting to home rental, both home-sharing platforms and traditional hotels have suffered the sharp downturn in travel amid the coronavirus outbreak, but we would expect to see hotels recover somewhat faster. Hotels have brand standards, loyalty programs, and established cleaning and maintenance practices, all of which we believe will help to draw in customers faster once travel activity resumes.

Finally, one sharing trend that we could actually see accelerated by COVID-19 is crowdfunding. A number of small businesses have been turning to crowdfunding platforms, such as GoFundMe to help meet cash shortfalls during government-mandated shutdowns. Accord- ing to a letter from GoFundMe CEO Tim Cadogan, 22,000 coronavirus-related campaigns had been launched as of 20 March. Look- ing longer-term, we believe crowdfunding platforms can successful- ly compete with the banks in the small to midsize IPO (initial public offering) segment as well as the market for risky loans, as in the case of startup companies. The global crowd-funding market is expected to grow by a CAGR of 17% from 2018–22 according to Technavio, a global market research firm, with 47% of the growth coming from the Asia Pacific (APAC) region. We note that from an investment perspective, the major players in the space tend to be smaller, startup fintech firms.

For equity ideas related to themes 1-6 above, please see figure 2.

7. Depending on dividends From a portfolio perspective, one of the most striking features of the current environment is the exceedingly low level of interest rates around the world. For example, the yield on the 10-year US Treasury note stands at 0.6%. Yields in other rich countries are even lower. The yield on German debt is -0.5%. Japan is at 0.0%. As we explained in After COVID-19, we believe these unusually low levels of interest rates will likely persist for some time.

Economics 101 informs us that interest rates reflect the balance between the supply of savings and the demand for investment. The coronavirus-induced collapse in demand means investment spending will likely remain sluggish until economic activity fully recovers. This may take some time. In addition, central banks are buying massive quantities of government bonds in order to ensure smooth market

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functioning and keep interest rates low as government debt surges, Fig 1. Dividend yields are attractive versus inter- another reason to expect interest rates to remain unusually low. est rates S&P 500 dividend yield less 10-year Treasury yield So how can investors generate income in such a low interest rate environment? We suggest taking a look at stocks for a portion of a 4% portfolio's income needs. The dividend yield on the S&P 500 is now 2.1%, which is 1.5 percentage points higher than the yield on the -1% 10 year Treasury. This is the largest spread between dividend yields and interest rates in 65 years (fig. 1). In addition, for taxable investors, -6% dividends enjoy a favorable tax rate relative to interest income, making after-tax yields even more attractive. For federal taxes, the highest -11% dividend tax rate is 23.8% compared to 40.8% for interest income. 1950 1960 1970 1980 1990 2000 2010 2020 Finally, dividends tend to grow over time, which means investors can Source: Bloomberg, UBS as of 22 April 2020 likely count on a growing income stream and some inflation protec- tion. In contrast, interest payments are fixed if an investor holds a bond to maturity. While some companies have announced dividend cuts in recent weeks, we believe only a small minority of S&P 500 constituents will have to cut their dividends. We look for dividends to decline by 6-8% this year.

Obviously stocks are more volatile than bonds so looking to the equity market for income may not make sense for every investor. But for those that can withstand the additional volatility, we believe this strategy has merit.

Investors can gain exposure to our preferred dividend paying stocks by investing Dividend Ruler or Opportunistic Equity Income (OEI), two CIO model portfolios. Dividend Ruler invests in companies with consistent and sustainable dividend growth that offer an attractive dividend yield. Companies in OEI have more of a value tilt and tend to have a higher dividend yield. The constituents of both portfolios are listed in Figure 3.

Spotlight on China: Authors: Alejo Czerwonko & Xingchen Yu

Chinese equities: Diversify geographically in an increasingly multipolar world While this report is focused on US equity investment themes, we recommend considering these ideas in the context of a regionally diversified equity portfolio. A key vulnerability we regularly observe in investment portfolios worldwide is that of home bias and a lack of geographic diversification. History shows that no single country has consistently outperformed through the decades, and that extrapolating recent performance can be dangerous. These investment principles will become more important than ever as the coronavirus pandemic accelerates some of the shifts we identified in the Decade of Transformation. Key among these is the ongoing de-globalization process led by a decoupling of the US-China partnership.

China's economic sphere of influence will likely continue to grow, the country will continue to conduct economic policy independently of the West, and we are likely to live in an increasingly multipolar world. In such an environment, exposure to Chinese assets - and to those of emerging Asia more broadly, which we expect to be the most economically dynamic region globally in the years to come - should act as great portfolio diversifiers.

For a quick reminder of the value of such geographic diversification, one needs to look no further than at year-to-date performance. China was the first country to impose draconian containment measures, including city lockdowns and travel restrictions, to bend the curve of the coronavirus. It is therefore emerging as the first country to see economic activity normalize. Consequently, Chinese shares are the best performing major equity market globally so far this year, posting roughly half the losses experienced by the S&P 500.

Looking ahead, we think earnings growth in China would be at low-to-mid single digit this year. Although in the near term Chinese equities could feel some pain as the global economy continues to suffer from the pandemic, current valuations lead us to expect 10-15% upside through the year- end from current levels.

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Figure 2. Equity ideas for themes 1-6 above The check marks indicate the company is a potential beneficiary of the theme. This list is not comprehensive and should not be viewed as a total portfolio.

Virtual Keeping the Pandemic Rethinking Sharing is becomes Clicks over Ticker Company change in prepared- business not always "at-home" bricks payments ness practices caring reality

MSFT MICROSOFT CORP CRM SALESFORCE.COM INC ADBE ADOBE INC SPLK SPLUNK INC INTC INTEL CORP GOOG ALPHABET INC-CL C FB FACEBOOK INC-CLASS A CMCSA COMCAST CORP-CLASS A PANW PALO ALTO NETWORKS INC ERIC ERICSSON (LM) TEL-SP ADR + NOK NOKIA CORP-SPON ADR + JNPR JUNIPER NETWORKS INC CSCO CISCO SYSTEMS INC TTWO TAKE-TWO INTERACTIVE SOFTWRE HD HOME DEPOT INC LOW LOWE'S COS INC AMZN AMAZON.COM INC LULU LULULEMON ATHLETICA INC NKE NIKE INC -CL B WMT WALMART INC UPS UNITED PARCEL SERVICE-CL B FDX FEDEX CORP IP INTERNATIONAL PAPER CO MA MASTERCARD INC - A V VISA INC-CLASS A SHARES ABT ABBOTT LABORATORIES + LH LABORATORY CRP OF AMER + TMO THERMO FISHER SCIENTIFIC INC + HCA HCA HEALTHCARE INC + GILD GILEAD SCIENCES INC + JNJ JOHNSON & JOHNSON + MRK MERCK & CO. INC. + ABBV ABBVIE INC + ACN ACCENTURE PLC-CL A HON HONEYWELL INTERNATIONAL INC ROK ROCKWELL AUTOMATION INC EQIX EQUINIX INC AMT AMERICAN TOWER CORP CCI CROWN CASTLE INTL CORP PLD PROLOGIS INC REXR REXFORD INDUSTRIAL REALTY IN ARE ALEXANDRIA REAL ESTATE EQUIT UBER UBER TECHNOLOGIES INC+ Note: Stocks are rated Most Preferred or Bellwether by CIO equity strategists. Stocks that are only covered by UBS Investment Research are annotated as such with a "+" sign. These stocks have a 12-month Buy or Neutral recommendation. UBS IR is part of the UBS Investment Bank (the UBS business group that includes, among others, UBS Securities LLC). For more information, please see the most recent complete version of CIO's Equity Preference List for each sector or the most recent corporate report for securities only covered by UBS Investment Bank. Source: UBS

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Figure 3. Depending on dividends - Constituents of Dividend Ruler and Opportunistic Equity Income Ticker Company Name Sector Model Portfolio Yield T AT&T Communication Services OEI 7.0% CMCSA Comcast Communication Services Dividend Ruler 2.5% VFC V.F. Corporation Consumer Discretionary Dividend Ruler / OEI 4.1% HD Home Depot Consumer Discretionary Dividend Ruler 3.0% MCD McDonald's Consumer Discretionary Dividend Ruler / OEI 2.8% TGT Target Consumer Discretionary OEI 2.6% MO Altria Group Consumer Staples OEI 9.2% KO Coca-Cola Consumer Staples Dividend Ruler 3.8% DEO Diageo Consumer Staples Dividend Ruler 2.7% PG Procter & Gamble Consumer Staples Dividend Ruler / OEI 2.6% CAG Conagra Brands Consumer Staples OEI 2.5% WMT Walmart Consumer Staples OEI 1.7% RDS.B Royal Dutch Shell Energy OEI 11.4% SU Suncor Energy Energy Dividend Ruler 8.8% CVX Chevron Energy Dividend Ruler 6.1% TFC Truist Financial Financials Dividend Ruler 5.2% JPM JPMorgan Chase & Co. Financials Dividend Ruler / OEI 3.9% MS Morgan Stanley Financials OEI 3.8% CME CME Group Financials OEI 3.6% TRV Travelers Financials OEI 3.4% BLK BlackRock Financials Dividend Ruler 3.1% CB Chubb Financials Dividend Ruler 2.8% AXP American Express Financials OEI 2.1% MMC Marsh & McLennan Financials Dividend Ruler 2.0% ABBV AbbVie Health Care OEI 6.1% NVS Novartis Health Care Dividend Ruler / OEI 3.4% GILD Gilead Sciences Health Care OEI 3.4% MRK Merck Health Care OEI 3.1% JNJ Johnson & Johnson Health Care Dividend Ruler 2.7% MDT Medtronic Health Care Dividend Ruler 2.3% BDX Becton Dickinson Health Care OEI 1.2% CR Crane Industrials Dividend Ruler 3.4% UNP Union Pacific Industrials Dividend Ruler 2.7% LMT Lockheed Martin Industrials Dividend Ruler / OEI 2.6% ROK Rockwell Automation Industrials Dividend Ruler 2.6% NSC Norfolk Southern Industrials OEI 2.5% RSG Republic Services. Industrials Dividend Ruler 2.1% RTX Raytheon Technologies Industrials Dividend Ruler / OEI 2.0% AVGO Broadcom Information Technology OEI 5.1% CSCO Cisco Systems Information Technology Dividend Ruler / OEI 3.5% TXN Texas Instruments Information Technology Dividend Ruler 3.3% INTC Intel Information Technology Dividend Ruler / OEI 2.3% ACN Accenture Information Technology Dividend Ruler 2.0% MSFT Microsoft Information Technology Dividend Ruler / OEI 1.2% LIN Linde plc Materials Dividend Ruler / OEI 2.1% CCI Crown Castle Real Estate OEI 3.0% PLD Prologis Real Estate OEI 2.6% D Dominion Energy Utilities OEI 4.8% AEP American Electric Power Utilities Dividend Ruler 3.3% NEE NextEra Energy Utilities Dividend Ruler / OEI 2.2% Note: For more information, please see the most recent Dividend Ruler Stock and Opportunistic Equity Income Model Portfolio reports. Source: Factset, UBS as of 22 April 2020

We would like to acknowledge the assistance of UBS CIO colleague Eric Potoker in the creation of this report.

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Appendix

Statement of Risk Equities - Stock market returns are difficult to forecast because of fluctuations in the economy, investor psychology, geopolitical conditions and other important variables.

Required Disclosures

Analyst Certification

Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report.

Companies mentioned in this report (23 April 2020): AbbVie (ABBV - Not Rated, $81.47), Abbott Laboratories (ABT - Not Rated, $95.48), Accenture Plc (ACN - Most Preferred, $172.31), American Electric Power (AEP - Most Preferred, $85.00), American Tower Corp. (AMT - Most Preferred, $252.98), Amazon.com Inc. (AMZN - Most Preferred, $2,363.49), Alexandria Real Estate Equities (ARE - Most Preferred, $150.94), Broadcom Corp. (AVGO - Bellwether, $259.97), American Express (AXP - Most Preferred, $82.54), Becton Dickinson & Co (BDX - , $266.76), BlackRock Inc (BLK - Bellwether, $481.00), Chubb (CB - Bellwether, $106.22), Crown Castle Intl. Corp. (CCI - Bellwether, $163.17), Comcast Corp. (Cl A) (CMCSA - Most Preferred, $35.73), CME Group Inc. (CME - Bellwether, $179.39), Crane Co. (CR - Bellwether, $50.05), Salesforce.com (CRM - Most Preferred, $154.14), Cisco Systems Inc. (CSCO - Most Preferred, $41.76), Chevron (CVX - Most Preferred, $84.44), Dominion Energy (D - Most Preferred, $78.74), Diageo Plc (DEO US - , $132.36), Equinix Inc. (EQIX - Most Preferred, $684.79), Ericsson (ERIC - , $8.40), Facebook (FB - Most Preferred, $182.28), FedEx Corp. (FDX - Bellwether, $118.54), Gilead Sciences Inc. (GILD - Not Rated, $81.31), Alphabet Inc. Class C (GOOG - Most Preferred, $1,263.21), Home Depot Inc. (HD - Bellwether, $204.17), Honeywell International Inc. (HON - Most Preferred, $133.03), Intel Corp. (INTC - Most Preferred, $60.10), International Paper (IP - Bellwether, $29.97), Johnson and Johnson (JNJ - Not Rated, $152.99), Juniper Networks Inc. (JNPR - Most Preferred, $23.20), JPMorgan (JPM - Bellwether, $89.34), Coca-Cola Co. (KO - Most Preferred, $45.68), Linde PLC (LIN - Most Preferred, $181.60), Lockheed Martin Corp. (LMT - Most Preferred, $380.40), Lowe's Cos. (LOW - Most Preferred, $94.95), Lululemon Athletica (LULU - Bellwether, $212.09), MasterCard (MA - Most Preferred, $256.91), McDonald's Corp. (MCD - Most Preferred, $186.48), Medtronic Inc. (MDT - Not Rated, $96.08), Marsh & McLennan Cos. (MMC - Bellwether, $94.08), Altria Group Inc. (MO - Not Rated, $37.81), Morgan Stanley (MS - Bellwether, $37.81), Microsoft Corp. (MSFT - Most Preferred, $173.52), NextEra Energy Inc. (NEE - Most Preferred, $247.17), Nike Inc. (NKE - Most Preferred, $88.77), Nokia (NOK - , $3.38), Novartis (NOVN VX - , $0.36), Norfolk Southern (NSC - Bellwether, $153.78), Palo Alto Networks (PANW - Most Preferred, $191.86), PG&E (PCG - Not Rated, $11.00), ProLogis (PLD - Most Preferred, $87.87), Royal Dutch Shell (RDSB - , $), Rexford Industrial Realty Inc (REXR - Most Preferred, $39.45), Rockwell Automation, Inc (ROK - Bellwether, $166.19), Republic Services Inc. (RSG - Most Preferred, $77.87), Raytheon Technologies (RTX - Most Preferred, $63.45), Splunk (SPLK - Most Preferred, $131.28), Suncor Energy (SU - Most Preferred, $15.52), AT&T Inc. (T - Most Preferred, $29.47), Truist (TFC - Bellwether, $34.00), Thermo Fisher Scientific (TMO - Not Rated, $335.59), Travelers (TRV - Bellwether, $101.79), Take-Two Interactive (TTWO - Bellwether, $127.44), Texas Instruments Inc. (TXN - Bellwether, $111.98), Uber (UBER - , $28.24), Union Pacific (UNP - Most Preferred, $147.10), United Parcel Service Inc. (UPS - Most Preferred, $97.61), Visa Inc. (V - Most Preferred, $166.59), VF Corp (VFC - Bellwether, $54.27), Walmart Inc. (WMT - Most Preferred, $131.59)

CIO Americas, Wealth Management equity selection system Equity sector strategists provide three equity selections: Most Preferred (MP), Least Preferred (LP) and Bellwether designation. Rating definitions Most Preferred*: The equity sector strategist expects the stock to outperform the relevant benchmark in the next 12 months.

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Least Preferred*: The equity sector strategist expects the stock to underperform the relevant benchmark in the next 12 months. Bellwether: Stocks that are of high importance or relevance to the sector and which the equity sector strategist expects the stock to perform broadly in line with the sector benchmark in the next 12 months. *A stock cannot be selected as Most Preferred if UBS Investment Research rates it a Sell, while a UBS Investment Research Buy rated stock cannot be selected as Least Preferred. Restricted: Issuing of research on a company by CIO Americas, WM can be restricted due to legal, regulatory, contractual or best business practice obligations which are normally caused by UBS Investment Bank’s involvement in an investment banking transaction in regard to the concerned company. Equity selection: An assessment relative to a benchmark Equity selections in Equity Preferences lists (EPLs) are relative assessments versus a sector/industry, country/regional or thematic benchmark. The chosen benchmark is disclosed on the front page of each EPL. Stocks can be selected for several EPLs. To keep consistency, a stock can only be selected as either Most Preferred or Least Preferred, but not both simultaneously. As benchmarks differ between lists, stocks need not be included on every list to which they could theoretically be added.

For a complete set of required disclosures relating to the companies that are the subject of this report, please mail a request to UBS CIO Global Wealth Management Business Management, 1285 Avenue of the Americas, 8th Floor, Avenue of the Americas, New York, NY 10019. UBS Investment Research: Global Equity Rating Definitions For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical performance information; and certain additional disclosures concerning UBS research recommendations, please visit www.ubs.com/disclosures. Global Equity 12-Month Rating Definitions Buy: FSR is > 6% above the MRA. Neutral: FSR is between -6% and 6% of the MRA. Sell: FSR is > 6% below the MRA. Key Definitions Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not a forecast of, the equity risk premium). Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. Exceptions and Special Cases Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment Review Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's debt. As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating. When such exceptions apply, they will be identified the Companies Mentioned or Company Disclosure table in the relevant research piece. Disclosures (23 April 2020) Abbott Laboratories 2, 4, 5, AbbVie 1, 2, 3, Accenture Plc 2, 4, 5, 6, Alexandria Real Estate Equities 2, Alphabet Inc. Class C 1, 2, 6, 9, 11, 12, Altria Group Inc. 2, 4, 5, Amazon.com Inc. 1, 2, 3, 4, 5, 9, 10, 11, American Electric Power 1, 2, 4, 5, 6, American Express 1, 2, 4, 5, 12, American Tower Corp. 2, 7, 8, AT&T Inc. 1, 2, 4, 5, 7, 13, 14, 18, Becton Dickinson & Co 2, BlackRock Inc 1, 2, 3, 6, 7, 12, 13, 14, Broadcom Corp. 2, 11, Chevron 1, 2, 4, 5, 9, 12, Chubb 1, 2, 6, 9, 14, 15, Cisco Systems Inc. 2, 4, 5, 6, CME Group Inc. 1, 2, 3, 4, 5, Coca-Cola Co. 1, 2, 4, 5, 20, Comcast Corp. (Cl A) 2, 6, 16, 17, Crane Co. 2, 6, 10, Crown Castle Intl. Corp. 2, 4, 5, Diageo Plc 1, 2, 6, 7, 14, 18, Dominion Energy 1, 2, 4, 5, Equinix Inc. 2, Ericsson 2, 10, Facebook 2, 9, 11, 16, FedEx Corp. 1, 2, Gilead Sciences Inc. 2, HCA Holdings 1, 2, 7, 13, Home Depot Inc. 2, 4, 5, 6, Honeywell International Inc. 2, 4, 5, 6, Intel Corp. 1, 2, 3, 4, 5, 6, 7, 11, 12, 13, International Paper 2, 4, 5, Johnson and Johnson 1, 2, 4, 5, 7, 12, 13, JPMorgan 1, 2, 3, 4, 5, 7, 12, 19, Juniper Networks Inc. 2, 7, 13, Linde PLC 1, 2, 6, 21, Lockheed Martin Corp. 1, 2, 4, 5, 6, 7, 10, 12, Lowe's Cos. 2, 4, 5, 6, Lululemon Athletica 2, 9, Marsh & McLennan Cos. 1, 2, 4, 5, 6, 9, 10, MasterCard 2, 4, 5, 11, McDonald's Corp. 2, 4, 5, 6, 14, 16, Medtronic

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Inc. 1, 2, 3, 6, 10, 12, Merck and Co Inc 1, 2, 3, 4, 5, 16, 22, Microsoft Corp. 1, 2, 3, 4, 5, 7, 11, 12, 13, 17, Morgan Stanley 1, 2, 3, 4, 5, 7, 11, 12, 13, 18, NextEra Energy Inc. 1, 2, 6, 7, 13, Nike Inc. 2, 9, 11, 15, Nokia 2, 10, Norfolk Southern 2, 4, 5, Novartis 1, 2, 7, 10, 13, 14, 16, 17, 23, Palo Alto Networks 2, PG&E 1, 2, 10, 19, ProLogis 2, Raytheon Technologies 1, 2, 4, 5, 6, Republic Services Inc. 2, 6, 10, Rexford Industrial Realty Inc 2, Rockwell Automation, Inc 2, 6, 10, Royal Dutch Shell 1, 2, 7, 9, 10, 13, 15, Salesforce.com 2, 4, 5, 11, Splunk 2, 7, 16, Suncor Energy 2, 6, 19, Take- Two Interactive 2, 9, Target Corp. 2, Texas Instruments Inc. 2, 4, 5, Thermo Fisher Scientific 1, 2, 6, Travelers 1, 2, 4, 5, 9, 12, Truist 1, 2, 3, 4, 5, 7, 12, 13, 14, 18, 19, 24; Uber 2, 9, Union Pacific 1, 2, 4, 5, 6, United Parcel Service Inc. 1, 2, 3, 4, 5, 7, 12, 13, 18, VF Corp 2, 6, 9, 10, Visa Inc. 2, 11, Walmart Inc. 2, 4, 5, 1. Within the past 12 months, UBS Securities LLC and/or its affiliates have received compensation for products and services other than investment banking services from this company/entity. 2. UBS Securities LLC makes a market in the securities and/or ADRs of this company. 3. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided. 4. This company/entity is, or within the past 12 months has been, a client of UBS Financial Services Inc, and non- investment banking securities-related services are being, or have been, provided. 5. Within the past 12 months, UBS Financial Services Inc has received compensation for products and services other than investment banking services from this company. 6. UBS Financial Services Inc., its affiliates or subsidiaries owns a net long position exceeding 0.5% of the total issued share capital of this company. 7. Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking services from this company/entity or one of its affiliates. 8. UBS Financial Services Inc. its subsidiaries or affiliates owns a net long position exceeding 0.5% of the total issued share capital of the this company. 9. Because this security exhibits higher-than-average volatility, the FSR has been set at 15% above the MRA for a Buy rating, and at -15% below the MRA for a Sell rating (compared with 6/-6% under the normal rating system). 10. UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of this company's common equity securities as of last month's end (or the prior month's end if this report is dated less than 10 days after the most recent month's end). 11. UBS AG, its affiliates or subsidiaries held other significant financial interests in this company/entity as of last month's end (or the prior month's end if this report is dated less than 10 working days after the most recent month's end). 12. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-investment banking securities-related services are being, or have been, provided. 13. This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided. 14. UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services from this company/entity within the next three months. 15. An employee of UBS AG is an officer, director, or advisory board member of this company. 16. The equity analyst covering this company, a member of his or her team, or one of their household members has a long common stock position in this company. 17. The UBS Wealth Management strategist, a member of his or her team, or one of their household members has a long common stock position in this company. 18. UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of securities of this company/entity or one of its affiliates within the past 12 months. 19. Because this security exhibits higher-than-average volatility, the FSR has been set at 25% above the MRA for a Buy rating, and at -25% below the MRA for a Sell rating (compared with 6/-6% under the normal rating system). 20. UBS AG London Branch is acting as financial advisor to Coca-Cola Hellenic in its acquisition of Acque Minerali SrL which is being made in conjunction with The Coca-Cola Co 21. UBS AG London branch or affiliates acts as liquidity provider or market maker in the financial instruments of this company. 22. A household member of the equity analyst covering this company was an employee of the company during the past 12 months and received compensation from the company during that employment.

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23. The equity analyst covering this company, a member of his or her team, or one of their household members is an officer, director, or advisory board member of this company. 24. UBS Europe SE (Luxembourg Branch), its affiliates or subsidiaries owns a net long position exceeding 0.5% of the total issued share capital of this company.

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Disclaimer

UBS Chief Investment Office's ("CIO") investment views are prepared and published by the Global Wealth Management business of UBS Switzerland AG (regulated by FINMA in Switzerland) or its affiliates ("UBS"). The investment views have been prepared in accordance with legal requirements designed to promote the independence of investment research. Instrument/issuer-specific investment research – Risk information: This publication is for your information only and is not intended as an offer, or a solicitation of an offer, to buy or sell any investment or other specific product. The analysis contained herein does not constitute a personal recommendation or take into account the particular investment objectives, investment strategies, financial situation and needs of any specific recipient. It is based on numerous assumptions. Different assumptions could result in materially different results. 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Research publications from CIO are written by UBS Global Wealth Management. UBS Global Research is written by UBS Investment Bank. Except for economic forecasts, the research process of CIO is independent of UBS Global Research. As a consequence research methodologies applied and assumptions made by CIO and UBS Global Research may differ, for example, in terms of investment horizon, model assumptions, and valuation methods. Therefore investment recommendations independently provided by the two UBS research organizations can be different. The compensation of the analyst(s) who prepared this report is determined exclusively by research management and senior management (not including investment banking). Analyst compensation is not based on investment banking, sales and trading or principal trading revenues, however, compensation may relate to the revenues of UBS as a whole, of which investment banking, sales and trading and principal trading are a part. 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Appendix particular investment objectives, financial situation and needs of our individual clients and we would recommend that you take financial and/or tax advice as to the implications (including tax) of investing in any of the products mentioned herein. This material may not be reproduced or copies circulated without prior authority of UBS. Unless otherwise agreed in writing UBS expressly prohibits the distribution and transfer of this material to third parties for any reason. UBS accepts no liability whatsoever for any claims or lawsuits from any third parties arising from the use or distribution of this material. This report is for distribution only under such circumstances as may be permitted by applicable law. For information on the ways in which CIO manages conflicts and maintains independence of its investment views and publication offering, and research and rating methodologies, please visit www.ubs.com/research. Additional information on the relevant authors of this publication and other CIO publication(s) referenced in this report; and copies of any past reports on this topic; are available upon request from your client advisor. Important Information About Sustainable Investing Strategies: Sustainable investing strategies aim to consider and incorporate environmental, social and governance (ESG) factors into investment process and portfolio construction. Strategies across geographies and styles approach ESG analysis and incorporate the findings in a variety of ways. Incorporating ESG factors or Sustainable Investing considerations may inhibit the portfolio manager’s ability to participate in certain investment opportunities that otherwise would be consistent with its investment objective and other principal investment strategies. The returns on a portfolio consisting primarily of sustainable investments may be lower or higher than portfolios where ESG factors, exclusions, or other sustainability issues are not considered by the portfolio manager, and the investment opportunities available to such portfolios may differ. Companies may not necessarily meet high performance standards on all aspects of ESG or sustainable investing issues; there is also no guarantee that any company will meet expectations in connection with corporate responsibility, sustainability, and/or impact performance. Distributed to US persons by UBS Financial Services Inc. or UBS Securities LLC, subsidiaries of UBS AG. UBS Switzerland AG, UBS Europe SE, UBS Bank, S.A., UBS Brasil Administradora de Valores Mobiliarios Ltda, UBS Asesores Mexico, S.A. de C.V., UBS Securities Japan Co., Ltd, UBS Wealth Management Israel Ltd and UBS Menkul Degerler AS are affiliates of UBS AG. UBS Financial Services Incorporated of Puerto Rico is a subsidiary of UBS Financial Services Inc. UBS Financial Services Inc. accepts responsibility for the content of a report prepared by a non-US affiliate when it distributes reports to US persons. All transactions by a US person in the securities mentioned in this report should be effected through a US-registered broker dealer affiliated with UBS, and not through a non-US affiliate. The contents of this report have not been and will not be approved by any securities or investment authority in the United States or elsewhere. UBS Financial Services Inc. is not acting as a municipal advisor to any municipal entity or obligated person within the meaning of Section 15B of the Securities Exchange Act (the "Municipal Advisor Rule") and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of the Municipal Advisor Rule. External Asset Managers / External Financial Consultants: In case this research or publication is provided to an External Asset Manager or an External Financial Consultant, UBS expressly prohibits that it is redistributed by the External Asset Manager or the External Financial Consultant and is made available to their clients and/or third parties. For country disclosures, click here. Number 06/2019. CIO82652744 © UBS 2020. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.

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