Macro Economic and Financial Market Outlook January 2013

Macro Economic and Financial Market Outlook January, 2013 Pioneer Investments For Broker/Dealer Use Only and Not to be Distributed to the Public

Agenda What did We Say Last Year? The Big Picture Macro View – US: Recovery Going On – Europe: A Turning Point – Emerging Markets: Improving Outlook Investment Strategy For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 2

What Did We Say Last Year? The Economic Outlook DEVELOPED MARKETS § De leveraging on going in the private sector § Sub par growth § Negative real rates § Unconventional monetary policy EMERGING MARKETS EURO CRISIS § Addressing structural § Engine of global imbalances growth § Difficult decoupling in § Possible restructuring of Greece but no the short term Euro break up § Slow pace to further integration (fiscal and banking union) For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 3

Pioneer Investments Asset Allocation Changes in 2012 + - US Equities + Emerging Markets equities + In June 2012 High Dividend + = + European Equities Relative Japan Equities In June 2012 Credit, High Yield and EM Bonds Search for yield Source: Pioneer Investment, the table indicates the overweight (+) and underweight ( ) on the global asset allocation of Pioneer Investments during 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 4

2012 Performance of Main Asset Classes 2012 Performance 35% 30. 9% Performance % 30% 25% 20% 22. 3% 18. 8% 17. 7% 17. 0% 16. 0% 15. 6% 15% 10. 8% 10% 5% 0% 4. 1% 0. 2% Global High EMU Emerging US Equity European Global IG Global Euro Cash Emerging Yield Peripheral. Market Equity Corporate Government Markets Bonds Bond Credit Sovereign Source. Bloomberg. Index used in the slide: Global Emerging Markets Credit = ML Global Emerging Markets Credit TR in LC, Global Emerging Markets Sovereign = ML Global Emerging Markets Sovereign TR in LC, Global High Yield = ML Global Corporate High Yield TR in LC, EMU Peripheral Bonds = JPMorgan GBI EMU Greece/Ireland/Italy/Portugal/Spain in LC, Emerging Market Equity = MSCI EM TR in LC, US Equity = S&P 500 TR in USD, European Equity = MSCI Europe TR in LC, Global IG Corporate Bond = ML Global Corporate Large Cap TR in LC, Global Government Bond = JPMorgan Global Govt Bond TR LC, Euro Cash = DB Eonia TR. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 5

Agenda What did We Say Last Year? The Big Picture Macro View – US: Recovery Going On – Europe: A Turning Point – Emerging Markets: Improving Outlook Investment Strategy For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 6

The Big Issue in the Long Term The Mountain of Debt in Developed Markets is Still Increasing Since 2008, government debt to GDP has increased by around 30% 270 Private sector Public sector 240 210 % 180 150 120 90 60 30 0 1986 1991 1996 2001 Developed market total debt, % of GDP 2006 2011 Source: Thomson Reuters, Credit Suisse Research. Data at 31 December 2011. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 7

The Issue Could Further Exacerbate Future Liabilities will Weigh on Public Sector Gross Debt/GDP: Possible Increase due to Future Liabilities 350 300 250 % of GDP 200 150 100 50 US Japan UK Italy Net Present Value of health care spending change 2011 -50 Net Present Value of pension spending change 2011 -50 Gross Debt/GDP at 2011 France Germany Gross Debt/GDP at 2011 + Future Liabilities Source: IMF Fiscal Monitor, October 2012 Edition. Projections do not take into account reforms enacted after December 2011. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 8

The Possible Way Out of Debt Financial Repression In the Developed Countries Real Central Bank Rates 6 4 Rates % 2 0 2 4 6 2000 2002 US 2004 Eurozone 2006 2008 UK 2010 2012 Japan Source: Bloomberg, data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 9

Baseline Scenario for 2013: Overview 2013 Growth Monetary policy 3. 6% Pick up from H 2 2013 following dynamics of D. M. and E. M. Central Banks stance from loose to very loose globally U. S. 2. 1% Pick up starting in H 1 2013; Moderate fiscal repair – partially avoided fiscal cliff Very loose monetary policy; Euro Area 0. 4% Bottom in H 1 2013; modest pick up from H 2 2013 Temporarily on hold Possible further rate cut Emerging Markets * 5. 6% Improving outlook; China back to potential in 2013 On hold; easing if fiscal cliff/debt ceiling negotiations in the U. S. stall Global * Source: Pioneer Investments. *IMF estimate included in the October 2012 edition of the World Economic Outlook. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 10

Baseline Scenario for 2013: Triggers and Risks Triggers Risks US housing sector fully recovers with positive direct and indirect effects on households, employment and investments US over and down the cliff. US into recession, threat to global growth recovery, serious credit rating downgrade, risk off environment US unemployment falls at faster pace: as fiscal cliff impact is avoided and the policy framework becomes clearer, business sentiment recovers and employment picks up Significant worsening of European sovereign crisis. No break up of the Union but further stalling of reforms, Spain doesn’t apply to OMT, political election dampen continuity reform process (Italy), election in Germany exacerbate Greece exit. Euro Area smoothly progresses towards Material deterioration in Chinese data. integration and proves able to provide credible Economic policies fail to support growth hit by the solutions to the debt crisis open issues. global slowing demand. Chinese economy strengthens: the strong linkages with Asian partners shield China’s economic activity, economic rebalancing can take place gradually with no major disruptions. Escalation in Middle East drives oil prices up, halting global recovery. Source: Pioneer Investments. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 11

Agenda What did We Say Last Year? The Big Picture Macro View – US: Recovery Going On – Europe: Economy Bottoming – Emerging Markets: Improving Outlook Investment Directions For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 12

Improving Economic Indicators - Confidence Signals of recovery in consumer confidence US: Consumer Confidence and Manufacturing PMI Consumer Confidence Index Level 60 100 55 80 50 60 45 40 40 20 35 0 2005 ISM Manufacturing PMI Level 120 30 2006 Consumer Confidence 2007 2008 2009 2010 2011 2012 ISM Manufacturing PMI SA Source: Bloomberg, Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 13

Improving Economic Indicators – Disposable Income Supportive trend for consumption Change in Real Disposable Income Year Over Year % Household's Disposable Income 7, 5 5, 0 2, 5 5, 0 2007 2008 2009 2010 2011 2012 Change in Real Disposable Income Yo. Y Source: Bloomberg, Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 14

Improving Economic Indicators – Employment Slow recovery in the job market US Labor Market 10 Unemployment Rate % 600 400 9 200 8 0 7 200 6 400 5 600 4 800 3 2000 2001 2002 2003 2004 2005 2006 Monthly Change in Nonfarm Payrolls (RH scale) 2007 2008 2009 2010 2011 Monthly Change in Payrolls Thousands 11 1000 2012 Unemployment Rate (LH scale) Source: Bloomberg, Data as at 30 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 15

Improving Economic Indicators – Housing Market The housing market is accelerating and could provide a boost in 2013 U. S. Housing Improving Sentiment U. S. Housing Starts Have Bottomed 80 3, 000 2, 500 60 50 40 30 Thousands Index Level between 1 and 100 70 2, 000 1, 500 1, 000 20 10 500 1985 1990 1995 2000 2005 2010 2012 National Association of Home Builders Traffic of Prospective Buyers 1985 1990 1995 2000 2005 2010 2012 US New Privately Owned Housing Source: Bloomberg. Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 16

Encouraging Signals For Manufacturing Cheap natural gas (shale gas) may boost energy related manufacturing U. S. Natural Gas Industrial Price Dollars per Thousand Cubic Feet 14 12 10 8 6 4 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 U. S. Natural Gas Industrial Price Source: Energy Information Administration. Data as at 31 October 2012 For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 17

US Long Term Positive Trends on Real Economy Energy independency could support manufacturing renaissance Net oil & gas import dependance Source: International Energy Agency, World Energy Outlook November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 18

We Think A Weaker US Dollar Could Support the Economy U. S. Dollar Traded-Weighted Value 130 Base 100 at 31 Dec 1999 120 110 100 90 80 70 1999 2001 2003 2005 2007 2009 2011 Source: Bloomberg, Bank of England. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 19

The Fed is Committed to Supporting Growth Federal Reserve Unconventional Operations 3, 000 2, 400 FED Asset USD Billions 2, 000 Oct 2011 Operation Twist 1 2, 000 1, 600 1, 500 1, 200 Sept 2008 U. S. banking Crisis 1, 000 June 2012 Operation Twist 2 (announced) Nov 2010 QE 2 800 Mar 2008 QE 1 500 400 FED Treasury Purchases USD Billions Dec 2012 QE 4 2, 500 2007 2008 FED Balance Sheet (USD Billion) 2009 2010 2011 2012 FED Treasury Purchases (USD Billion) Source: U. S. Federal Reserve, Bloomberg data as at 10 December 2012 For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 20

Summing Up In US Improvements in Growth and Financial Repression Base Scenario for 2013 Risks for 2013 § Signs of economic improvement due to continue thanks to housing and manufacturing sector recovery § Political gridlock on fiscal matters (fiscal cliff, debt ceiling) resulting in increasing uncertainties for business investments § FED should continue to keep accommodative policy, which may result in financial repression For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 21

Agenda What did We Say Last Year? The Big Picture Macro View – US: Recovery Going On – Europe: A Turning Point – Emerging Markets: Improving Outlook Investment Strategy For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 22

On Going Fiscal Consolidation Has Had a Negative Impact on the Economy Primary Balance in the Euro Area 10 5 % of GDP 5 10 15 20 25 30 2006 Germany 2007 France Italy 2008 Spain 2009 Portugal Ireland 2010 2011 2012 Greece Source: Data and Forecast from IMF Outlook, October 2012 Edition. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 23

Fiscal Austerity Impact on Growth The Eurozone Economy Should Improve in 2013 GDP in Main EMU Countries 2. 0 Year over Year % Change 1. 0 0. 0 1. 0 2. 0 3. 0 4. 0 5. 0 6. 0 Germany 2012 Forecast France Italy 2013 Forecast Spain Ireland Portugal Greece Source: Data and Forecast from IMF Outlook, October 2012 Edition. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 24

Moving Towards a Recovery in 2013? Improving financial conditions in the Euro-Area could be a positive sign for GDP Growth 2 Financial Conditions Index 6 4 0 2 2 0 4 2 6 4 8 1999 6 2000 2001 2002 2003 2004 2005 2006 Bloomberg European Financial Conditions Index 2007 2008 2009 2010 2011 GDP Growth Yo. Y, % 4 2012 Euro Area GDP Growth (Yo. Y, %, lagged 2 quarters) Source: Bloomberg, data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 25

The Worst of the Fiscal Tightening Could be Over Fiscal Adjustments in the Euro Area Differences in cyclically adjusted primary balance as % of GDP 16. 0 Around 75% of the adjustment already completed in peripheral countries 14. 0 % of GDP 12. 0 10. 0 8. 0 6. 0 4. 0 2. 0 France 2010 -12 Germany Italy Spain Portugal Ireland Greece 2013 -15 Source: IMF Fiscal Monitor, October 2012 Edition. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 26

But Labour Markets Remain Very Weak in the Periphery Euro Area: Unemployment 30 Unemployment rate % 25 20 15 10 5 0 2000 Germany 2002 France Italy 2004 Spain 2006 Portugal Ireland 2008 2010 2012 Greece Source: Bloomberg. Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 27

But Labour Markets Remain Very Weak in the Periphery Euro AREA: Youth Unemployment 70 Youth Unemployment rate % 60 50 40 30 20 10 0 2000 Germany 2002 France Italy 2004 Spain Portugal 2006 Ireland 2008 2010 2012 Greece Source: Bloomberg. Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 28

Peripheral Countries Remain vulnerable to Shift in Market Sentiment Total Financing Need 35 30 25 % of GDP 20 15 10 5 Italy 2012 2013 Greece Portugal Spain France Ireland Germany 2014 Source: IMF Fiscal Monitor, October 2012 Edition. Greece's maturing debt assumes 90 percent participation in the Private Sector Involvement (PSI) debt exchange program. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 29

Billions Euro An Already “de-facto Fiscal Union” in the Cross Border Claims (Target 2) Net Claims of National Central Banks within Eurosystem (Target Balance) 800 700 600 500 400 300 200 100 200 300 400 500 2006 2007 Germany France 2008 Italy Spain 2009 Portugal 2010 Ireland 2011 2012 Greece Source: Bloomberg. Data as at 31 October 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 30

The ECB’s OMT Has Averted the Tail Risk “The ECB is ready to do whatever it takes to preserve the Euro. ” Speech by Mario Draghi, 26 July 2012 “A situation of systemic instability was occurring… It was necessary to allay the unfounded fears about the future of the euro area. ” Speech by Mario Draghi, 15 November 2012 Source: European Central Bank website www. ecb. int. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 31

OMT Support to Peripheral Bonds Spread on 2 Year Government Bonds 800 Spread in basis points 700 600 500 400 300 200 100 0 Jan 09 ITALY Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Dec 12 SPAIN Source: Bloomberg. Data as at 11 January 2013. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 32

The ECB Will Remain Crucial to Support the Banking System… Bank Deposit Growth in the Euro Periphery % Change Year over Year 30 25 20 15 10 15 20 2006 Italy 2007 Spain Portugal 2008 Ireland 2009 2010 2011 2012 Greece Source: Bloomberg, ECB. Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 33

…as Limited Liquidity Is Being Passed on to the Real Economy Euro Area Loans To Non Financial Corporations and Households 16 Year on Year % Change 14 12 10 8 6 4 2 2 4 2000 2002 2004 Loans To Non Financial Corporations 2006 2008 2010 2012 Loans To Households Source: Bloomberg. Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 34

…and Credit Conditions Remain Tight Financial Lending Rates to Non-Financial Corporations Loans up to € 1 million at floating rate and up to 1 year initial rate fixation 9 8 Lending Rates % 7 6 5 4 3 2 1 0 2003 Eonia 2004 2005 Germany 2006 Italy 2007 Spain 2008 Portugal 2009 2010 Ireland 2011 2012 Greece Source: ECB, Loans up to € 1 million at floating rate and up to 1 year initial rate fixation. Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 35

Good News on the Adjustment Process: Productivity Delta Sept 12 vs Dec 08 Real Labour Productivity per Hour Worked 130 15. 5% Base 100 at Dec 2000 125 120 115 8. 8% 2. 4% 3. 7% 5. 8% 110 105 100 0. 9% 95 2000 Germany 2002 France 2004 Italy Spain 2006 Portugal 2008 2010 Ireland Source: Eurostat. Data as at 30 September 2012. Data on Real labour productivity per hour worked, seasonally adjusted and adjusted by working days. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 36

Good News on the Adjustment Process: Unit Labour Costs Delta Sept 12 vs Dec 08 Nominal Unit Labour Costs 150 Base 100 at Dec 2000 140 + 4. 1% 130 + 6. 2% - 5. 9% 120 - 16. 2% - 0. 3% 110 + 5. 4% 100 90 2000 Germany 2002 2004 France Italy Spain 2006 Portugal 2008 Ireland 2010 Greece Source: Eurostat. Data as at 30 September 2012. Data on nominal unit labour costs, seasonally adjusted and adjusted by working days. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 37

Good News on the Adjustment Process: Current Account Deficit Current Account Balance Delta Dec 12 vs Dec 08 10. 0 - 0. 8% in % of GDP 5. 0 + 7. 5% + 0. 0% 0. 0 + 1. 4% + 7. 7% 5. 0 + 9. 8% + 9. 1% 10. 0 15. 0 2000 Germany 2002 France 2004 Italy Spain 2006 2008 Portugal Ireland 2010 2012 Greece Source: Bloomberg, IMF. Data as at 31 October 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 38

Further Structural Reforms Could Support Long – Term Growth Long Run Impact of Reforms in Euro Area Impact on the Level of GDP in % 0 0. 5 1 Labour market reform 1. 5 2 IMF: closing 50% of gaps with OECD best 2. 5 practice could boost GDP by 4. 5% over 5 years. Pension reform Tax reform Product market reform 5 Years impact on level of GDP Source: IMF Staff Discussion Note, “Fostering Growth in Europe Now”, 18 June 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 39

Summing Up Adjustment Process on Going Base Scenario for 2013 Risks for 2013 § We still expect weak economic activity in 2013 and a slight recovery in the second half of the year § Election year (Italy, Germany) and risk of step backs on reforms § Further steps for crisis resolution: banking union, adjustment process, reforms… § Unsustainable fiscal tightening (social unrest due to high unemployment and new recession) § ECB very supportive crucial to avoid a credit crunch For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 40

Agenda What did We Say Last Year? The Big Picture Macro View – US: Recovery Going On – Europe: A Turning Point – Emerging Markets: Improving Outlook Investment Strategy For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 41

Emerging Markets Continue to be the Engine of Global Growth Global GDP Growth IMF Forecast 12 Annual Real GDP Growth % 10 8 6 4 2 0 2 4 6 2000 2002 Developing Asia 2004 2006 United States 2008 2010 2012 Latin America and the Caribbean 2014 2016 Euro Area Source: IMF: World Economic Outlook, World Economic Outlook Database, October 2012. Estimates start after 2011. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 42

We Think China Should Lead Emerging Markets Growth China Real GDP Growth Forecast Yo. Y 16 Annual Real GDP Growth % 14 12 66% 10 95% probability band 8 6 4 2 0 Q 1 06 Q 1 07 Q 1 08 Q 1 09 Q 1 10 Q 1 11 Q 1 12 Q 1 13 Source: Pioneer Investments estimates for 2012 and 2013. and may be exceeded or undershot and should not be construed as an assurance or guarantee. Bloomberg for data at Q 2 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 43

China: Economic Activity Could be Bottoming China: Industrial Production and Retail Sales 25 Year on Year % Change 23 21 19 17 15 13 11 9 7 5 2006 2008 China Value Added of Industry 2010 2012 China Retail Sales Value Source: Bloomberg, data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 44

China: Economic Activity Could be Bottoming China Exports and Imports with Asia 100% Change Year over Year 80% 60% 40% 20% 40% 60% Dec 07 Jun 08 China Exports to Asia Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Nov 12 China Imports from Asia Source: Bloomberg, data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 45

Room for Accommodative Policies, But Not Too Wide Source: Bloomberg, data as at 19 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 46

China: Structural Issue To be Addressed Rebalance from Investment/Export to Consumption China GDP composition 100% 80% 60% 40% 20% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Household Consumption Inventories Change Govt Consumption Net Exports Gross Fixed Capital Formation Source: Bloomberg, data as at 31 December 2011. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 47

Is China’s Productivity Growth Sustainable? Average 10 year annual productivity growth 12% Challenges for the new Leadership 10% § Reform agenda 8% § Sustain growth rate 6% § Welfare state 4% § Financial sector liberalisation 2% § Promotion of privately owned enterprises 0% 1962 1971 1972 1981 1982 1991 1992 2001 2002 2011 Source: The Conference Board, Labor productivity person employed in 1990 US$ (converted at Geary Khamis PPPs). Data as of 25 September 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 48

Summing Up Chinese Economy Could be Bottoming But Structural Issue Still Unresolved Base Scenario for 2013 § We believe growth should remain around 8%. Policy effort might continue to support growth and urbanization trend through infrastructure Risks for 2013 and beyond § New Leadership Too Slow in implementing structural shift § Social unrest for increasing inequalities § There is still room for easing monetary policy (not too aggressive) while inflation is under control § Structural reform should proceed slowly For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 49

Agenda What did We Say Last Year? The Big Picture Macro View – US: Recovery Going On – Europe: A Turning Point – Emerging Markets: Improving Outlook Investment Strategy For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 50

Still Running “Risky Asset” with Some Hedging Probability “Camel” - Distribution of what we think are the two most likely scenarios Muddle through with exit strategy Probability Slow but converging path of policy solutions 60% Armageddon 40% Policy mistakes drive a bad outcome of debt management 20% WORSENING Investment Implication Economic Conditions Help to protect portfolio through real assets and hedging IMPROVING Search for Yield to continue & gradually move into equities Source: Pioneer Investments. For illustrative purposes only. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 51

We See the Most Compelling Opportunities in Equity Markets Nominal Annualised 10 years Expected Returns 16% 14% 12% 10% 8% 6% 4% 2% 0% US Equity Europ. Equity EM Equity Treasury Bund US HY EU HY US IG EU IG FOR ILLUSTRATIVE PURPOSES ONLY. Source. Pioneer Investmemts simulations, Data as of 31 December 2012. Equity markets returns are obtained by the aggregation of the projected contributions to total returns from earnings growth, valuation re rating and dividends (share buy backs are considered where meaningful). Earnings growth is calculated as the combination of sales growth and margin changes, valuations changes imposes a long run mean reversion on long term CAPE, while dividends are calculated on constant pay out ratios. Govies returns are obtained by the aggregation of the projected contributions of inflation and of mean and trend reversion assumptions. Credit returns to total returns are obtained by the aggregation of the projected contributions of interest rates curve and default rate. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 52

Our Investment Strategies 1 Favour equities focusing especially in the Euro Area 2 Prefer selective credit opportunities vs government bonds in developed markets 3 Enlarge the investment universe with Emerging Markets corporate bonds 4 Grasp long term emerging markets equity opportunities For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 53

1 Favour Equities Focusing Especially in the Euro Area Extreme valuations on an historical basis European Equity Valuations at Historical Lows Cyclically Adjusted Price Earnings 30 25 20 15 10 5 1987 CAPE Europe 1992 1997 2002 2007 2012 CAPE Europe Avg Source: Pioneer Investment. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 54

1 Favour Equities Focusing Especially in the Euro Area Attractive European Equity Dividend Yield EMU Dividend Yields vs 2 Years German Government Bond Yields Dividend Yield vs 2 Yrs Bond Yields 8 6 4 2 0 2 4 6 8 10 1973 1978 1983 1988 1993 1998 2003 2008 2012 Source: Bloomberg. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 55

2 Prefer Selective Credit Opportunities in US Spreads in US Investment Grade and High Yield Bonds 600 Spread Investment Grade 2800 2400 500 2000 400 1600 300 1200 800 100 400 153 Spread High Yield 700 531 0 0 1998 2000 2002 ML US Corporate Master 2004 2006 2008 2010 2012 ML US High Yield Source: Bloomberg, Bank of America Merrill Lynch. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 56

2 Prefer Selective Credit Opportunities in Europe Spreads in the Euro Credit Market 900 Spread in basis points 800 700 600 500 400 300 200 100 0 2002 2003 2004 2005 Euro Periphery Financial Euro Periphery Non-Financial 2006 2007 2008 2009 2010 2011 Euro Non-Periphery Financial Euro Non-Periphery Non-Financial 2012 Source: Bloomberg, Bank of America Merrill Lynch. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 57

3 Enlarge the Investment Universe with Emerging Mkt. Corporate Bonds Emerging Markets Bond Increasing Share on Global Credit Market Investment Grade Market High Yield Market 100% 80% 60% 40% 20% 0% 0% 2002 2004 US IG 2006 EU IG 2008 EM IG 2010 2012 2004 US HY 2006 EU HY 2008 2010 2012 EM HY Source: Bank of America Merrill Lynch. Data as at 30 November 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 58

3 Enlarge the Investment Universe with Emerging Mkt. Corporate Bonds Spreads in Emerging Markets Bonds 2 800 Spread Investment Grade 2 400 2 000 1 600 1 200 800 676 400 418 0 1998 2000 2002 ML Global EM Sovereign 2004 2006 2008 2010 2012 ML Emerging Markets Credit Source: Bloomberg, Bank of America Merrill Lynch. Data as at 31 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 59

4 Grasp Long Term Emerging Markets Equity Opportunities EM Ready to Regain Momentum? Emerging Markets Equities Performance vs US Equity Index Value Base 100 at Dec 1987 350 300 250 200 150 100 50 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: Bloomberg. Index MSCI EM Local Currencies divided by S&P 500. Data as at 30 December 2012. For Broker/Dealer Use Only and Not to be Distributed to the Public | December 2012 | Page 60

4 Grasp Long Term Emerging Markets Opportunities with China Equity % Difference from estimated fair value Emerging Markets Equities Pioneer Investments Estimates on Over and Under Valuations 30 20 10 20 30 40 Russia Taiwan Brazil China Korea India Mexico Philippines South Africa Turkey Source: Pioneer Investments, data as at December 2012. Considers EPS growth, CPI expectations at country level, EMBI spread, commodity prices, OECD leading indicator. These views are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 61

Important Information Unless otherwise stated all information contained in this document is from Pioneer Investments and is as at 11 January 2013. Past performance does not guarantee and is not indicative of future results. Unless otherwise stated, all views expressed are those of Pioneer Investments. These views are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. More recent returns may be different than those shown. Please contact Pioneer Investments for more current performance results. This material is not a prospectus and does not constitute an offer to buy or a solicitation to sell any units of any investment fund or any services, by or to anyone in any jurisdiction in which such offer or solicitation would be unlawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any United States person (being residents and citizens of the United States or partnerships or corporations organized under United States laws). The non US Pioneer Investments range of investment funds have not been registered in the United States under the Investment Company Act of 1940 and units/shares of these funds are not registered in the United States under the Securities Act of 1933. This document is not intended for and no reliance can be placed on this document by retail clients, to whom the document should not be provided. The content of this document is approved by PGIL. In the UK, it is directed at professional clients and not at retail clients and it is approved for distribution by Pioneer Global Investments Limited (London Branch), Portland House, 8 th Floor, ressenden Place, London B SW 1 E 5 BH, authorised by the Central Bank of Ireland regulated by the Financial Services Authority for the conduct of UK business. The Pioneer Investments range of investment funds (with the exception of Pioneer SICAV) are unregulated collec tive investment schemes under the UK Financial Services and Markets Act 2000. The Pioneer Investments range of investment funds do not carry the protection provided by the UK regulatory system. Pioneer Funds Distributor, Inc. , 60 State Street, Boston, MA 02109 (“PFD”), a U. S. registered broker dealer, provides marketing services in connection with the distribution of Pioneer Investments’ products. PFD markets these products to financial intermediaries, both within and outside of the U. S. (in jurisdictions where permitted to do so) for sale to clients who are not United States persons. For Broker/Dealer Use Only and Not to be Distributed to the Public. Pioneer Investments is a trading name of the Pioneer Global Asset Management . p. A. group of companies. S Date of First Use: 14 January 2013. For Broker/Dealer Use Only and Not to be Distributed to the Public | January 2013 | Page 62

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