MEETINGS Where do you recommend I invest towards the end of the year?

Luis Martin-Jadraque

Director of the investment center at Deutsche Bank Spain

Which investment strategies do you think are most appropriate? What three securities do you recommend I have in my long-term investment portfolio? Luis Martín-Jadraque, director of the investment center at Deutsche Bank Spain, answered your questions on October 4, 2021.

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Shots_S1. Good afternoon. I would like to know your assessment of Chinese equities. Do you think that the falls of the last few months are just a temporary slump that you will leave behind soon, or will you continue bearish? If it's an opportunity, go in now, or wait for what? And if you can cite a good investment fund to incorporate this market into your portfolio. Thank you very much.

10:34 Good morning, Tomas. What happened in China is a mixture of regulatory risk, weak economic data and a government that wants to make far-reaching structural reforms. What has affected the markets the most in recent weeks is the crisis in Evergrande, the second largest real estate company in the country. We expect volatility to continue across all Chinese asset classes. However, the corporate situation of Chinese companies remains largely healthy, especially their industrial sectors. Many companies are already trading at very low valuations, so we have a neutral view of the Chinese stock market. As for Chinese credit, volatility could continue amid ongoing credit developments and government tightening efforts.

Antonio32. Good morning. I would like to have a small part of my portfolio invested long-term in Bitcoin or several cryptocurrencies through an investment fund, or an ETF, failing that, is there one that can be contracted by a small investor from Spain? Thank you very much.

10:40 Good morning, Antonio. In our opinion, investing in cryptocurrencies continues to be very high risk. The number of cryptocurrencies continues to grow and their prices are subject to high speculation. In the future, we will also have to see how these assets coexist with the future digital currencies of the central banks, which obviously do have their backing. We believe private cryptocurrencies will co-exist with central bank currencies in the future, but it's hard to know how many of today's will survive, so we still don't recommend going into these assets.

< dt>Lucia3. Good morning, do you think it would be appropriate at this time to take positions in an Inverse Fixed Income fund? Thank you very much

10:47 Good morning, Lucía. It is true that the prospects for fixed income are not very favourable, but it is also true that we cannot have our entire portfolio invested in equities, due to their high risk. Therefore, we believe that having a good flexible fixed income fund in the portfolios gives stability to it. Diversification is the key. Currently, we believe that having public fixed income only makes sense to provide stability in the face of volatility movements in the market. We see some opportunities in corporate fixed income, especially within the High Yield universe in the US and Europe, and in emerging hard currency but global bonds, as China will continue to be highly volatile.

Manu_M4. Good afternoon and thank you for this opportunity. Do you find it interesting to have a convertible bond fund in a diversified portfolio? I am not sure whether to consider it as high-yield fixed income or low-yield equities, that is, due to its volatility and risk, in bearish stock market phases are they more similar to VR or RF? In any case, do they serve as a refuge against falls in the VR or are they too correlated? Regards

10:52Convertible bonds are highly correlated with stock markets since, by definition, they are bonds that will be converted into shares in the future. The current environment of rising debt yields does not favor them either. Therefore, it is currently an asset that we do not particularly like. We believe that it makes more sense to combine flexible fixed-income funds with pure variable-income funds in the portfolios.

Josese5. Good morning. What are the countries, assets and sectors that you see as more attractive from now on? In particular, will the technology sector continue to be a good bet? And related sectors such as artificial intelligence, new energies, or blockchain? Thank you very much.

10:56 Good morning. We continue to bet on a mixed strategy, which combines on the one hand cyclical sectors, such as financials, cyclical consumption, especially in Europe, with more growth funds, such as technology (more present in the US). It is true that technology has gone a long way, but we still think that it is a sector for the future, that it has to be in our portfolios.

KR6. Good morning, Mr. Jadraque, what do you think of these funds? Allianz Strateguy 15 ct Schroder ISF GLB Inflation, do you think they are appropriate to keep in the portfolio? If not, can you point me to one of your liking?

11:03 Good morning, the funds you propose are, on the one hand, a long-standing fixed-income mix.Allianz Global Investors has a great team of multi-assets and a very attractive range, however there is a range that we consider to be superior in Allianz whose origin is in the Strategy but which have included improvements. It is called Allianz Dynamic Multi Asset Strategy. They also have several profiles, 15, 50 and 75. They have very good quality and we have followed them since their launch. However, like Deutsche Bank, the range of asset allocation funds that I recommend is the DB Strategic Asset Allocation. We also have several profiles and seeing that you are positioned in the lowest risk profile, I suggest the DB SAA Conservative Plus. In this fund you invest in the asset allocation recommended by Deutsche Bank over the long term. It has a low turnover and its investment is made through ETFs. As for the Schroders ISF Global Inflation fund, although we haven't reviewed it in a while, let me tell you that inflation-linked bond funds invest in very long-term bonds, so the duration is usually very long. In fact, the duration at the end of August was over 12 years. Although we do not believe that there will be imminent rate hikes, it is clear that the Central Banks have already begun to talk about withdrawing stimuli, which will sooner or later be followed by rate hikes. Rate hikes are especially damaging to bonds with long durations, so it is foreseeable that this type of funds will suffer in this situation. At Deutsche Bank, for investment in fixed income we opted for funds with significant tactical management. This is an important time to be flexible and it is essential to go hand in hand with a highly talented manager who has managed to take advantage of the situation in the past. We propose Flossbach von Storch Bond Opportunities, a global fixed income fund, completely agnostic to the reference index and forcefully positioned in those sectors where it sees the most value. He had a spectacular 2019 and 2020 and we continue to bet on them.

Marta7. Good morning, I have the DWS Sector Plus fund with a very important revaluation in the year, lately it is flatter, I don't know if it is time to change it to the DWS Croci Euro, thank you very much

11:10 Good morning Marta. The CROCI methodology is very particular, it seeks to select the values ​​with the lowest price/earnings ratios in both funds. In the case of Sector Plus, it searches for the three cheapest sectors globally and in the CROCI Euro it searches for the 30 cheapest values ​​but only in the euro zone. We always look for geographical diversification, so the Plus Sector would have more points in this case. It is also true that we would prefer it to combine some growth with value. For this reason, my recommendation would be to diversify with a fund such as Capital Group New Perspective, a global fund that does not define itself as a growth fund, the truth is that its resulting portfolio has growth themes such as 5G for example.

Salvador Díez8. Good morning, have technology companies and the American stock market reached the end of their maximum journey? Thank you very much

11:17 Right now we have a positive vision of equities, although we believe that in the short term there may be occasional corrections (of between 5% and 10%) that could be new points input. Despite the high valuations, economic growth in the US is very high, which supports business results, and with a prudent Fed when it comes to withdrawing stimuli and a fiscal package of up to 2.9 bn. dollars on the table, it is difficult for us to see sharp falls. Furthermore, we must not forget the lack of alternative in an environment of very low interest rates. Our target for the S&P as of September 2022 is 4,600 points. As for the technology sector, it continues to be one of our long-term bets.

Miguel9. Good morning: I have the pension plan at caixabank absolute return, where it is convenient to have it according to the market, it is convenient to have more variable income, I am 54 years old, thanks

11:22 Good morning Miguel. Investing in pension plans is a long-term investment. At your current age, where retirement is still many years away, I believe that a large portion of your investment should be in risky assets such as equities. I would recommend a highly diversified global VR pension plan, or one with a dynamic profile, that has the possibility of investing up to 60%-70% of your assets in equities. I am afraid that in a world in which interest rates are going to be very low for a long time, and in which inflation is expected to remain between 1.5%-2%, only in this way will you be able to achieve positive real returns for your retirement.From the age of 60, this percentage of investment in the stock market should gradually decrease, until reaching a maximum of 10%-15% at the time of retirement.

Juan10. Good morning Luis, I am an aggressive long-term investor, what global equity funds are there that include those sectors that are most undervalued today and the manager is free to move the portfolio depending on the moment of the market. Thank you

11:48 Good morning Juan, Thank you for your question. The fund you are looking for is DWS CROCI Sectors Plus. It invests in a strategy that selects 30 stocks, 10 stocks from each of the three “cheapest” sectors, according to the CROCI Ratio, to create the so-called ¿economic¿ PER. However, this management style must be accompanied by a certain amount of time and that is why it is rebalanced quarterly.

Luis Herrero Casares11. Good morning Luis, I'm very nervous, I have IAG ac. 5,740 to 0.9910, PROSEGUR CASH ac. 6,579 to €0.6621, TELEFONICA ac. 4,537 to €1.8823, REPSOL ac. 1,999 to €5.8772, B. SANTANDER ac. €4,130 to €1.5108. The reason for my nerves is that in order not to make a statement, I cannot go beyond €5,000 of benefits. because I already have some benefits this year. What do you advise me to sell? Thanks in advance.

11:52 Good morning. IAG still has a long way to go as there are routes from British to Asia and from Iberia to Latin America that are not yet fully operational. Prosegur Cash is severely undervalued according to analyst consensus. As for Santander, the increases in real rates and the expected recovery of the business in Brazil could give it a boost, but relative. Repsol has doubled in the last 12 months and has reduced potential due to the probable increases in production after the last rally in crude oil and Telefónica may also have problems in the short term.

Ángel12 . Good morning Luis, facing the end of the year, what do you think about buying Ebro Foods? Thank you

11:54 Good morning. The consensus of analysts gives it a potential of close to 20% but given the course of the last year it seems to have lost favor with managers and individual investors and its trend is clearly bearish.

13. Good morning. What do you think of ACS, Cie Automotive, Ence and Vidrala, for an investment of more than 4-5 years? Thank you

11:57 ACS is attractive as it is one of the world leaders in public works and has a prestige that culminates in large contracts in countries that will invest heavily in infrastructure such as the US and Australia. The latest falls in CIE and ENCE and Vidrala give them potential according to the consensus of analysts, being the paper mill the one with the best rating and track record.

Marcos S14. Do you expect a general drop towards the end of the year?

12:01 Good morning Marcos. We believe that there are enough uncertainty factors to expect a small punctual correction (5%-10%). The weakening of some economic indicators (such as confidence indices), the rise in inflation, the situation of the Chinese real estate sector and regulatory fears in this country, the bottlenecks in some sectors, the budget negotiation in the US, and especially everything, the future of monetary policy are short-term volatility factors. However, we believe that the situation of high global growth (which means good business results), and the low interest rate environment means that there is no alternative for investors, hence we expect any correction to be punctual. Therefore, we remain positive in the long term in equities.

JUAN CARLOS15. HELLO GOOD MORNING, FROM HERE TO THE END OF THE YEAR WHICH DO YOU THINK BETTER ENAGAS, IBERDROLA, NATURGY OR ENDESA? THANK YOU.

12:09Hello Juan Carlos, as we have commented, we believe that there may be a specific correction, but not a strong correction given the good economic fundamentals and the lack of alternatives in a world of interest rates Negative reals.

Dnt16. Good morning. What do you expect from Arcelor? At what price would I enter Solaria? Thank you

12:19The change in the leadership of the steel company has been very well received and its potential is great according to the consensus of analysts (60% at 12 months). The scenarios for economic growth and investment in infrastructure are favourable. Regarding Solaria, the latest results presented have disappointed investors and analysts, who have considerably lowered their recommendation and target prices. We should wait for it to confirm its current trend, clearly bearish, to make a decision.

goyomunguia17. I have oryzon genomic shares that have been flat for a long time, what can I expect from them, should I keep them or change them for others

12:28In the absence of important catalysts,the trend of the stock seems very flat but the analysts who cover it expect strong gains. The potential, according to the consensus of analysts, exceeds 175%.

americanino18. Which Actions Are Interesting to Invest in Latin America?

12:29Right now we do not see the area as a clear investment objective in variable income. There are still many uncertainties about growth that remain to be cleared up with the pandemic situation on the continent. An interesting option would be to invest in a Global Emerging VR fund, such as JPM Emerging Markets Equity.

B. Bareres19. Could Banco Santander be a good investment? At what prices to buy? Thank you.

12:30Shows some potential for your good job of restructuring and risk control. Low rates in Europe and lower growth in its Brazilian division. In any case, given the volatility of the Spanish banking sector, we believe that there are more interesting options in Europe.

MONTECRISTO20. Good morning Luis, what do you think about investing in securities linked to travel / tourism? What do you think of Amadeus, IAG, NH Hoteles and Sol Meliá? Which one do you like the most and why? Thanks in advance. Regards.

12:33In the sector we see opportunities since the restrictions on tourism and leisure are gradually being withdrawn. IAG has potential since after its expansion it is the most solid airline on the Old Continent. Hotel companies, especially NH, which bases its business on business trips, will hardly recover their pre-pandemic figures due to the emergence of videoconferences and other digital media that have reduced the need for these trips. The rises in the last 12 months at MELIÁ leave it, according to the consensus of analysts, with no revaluation potential.

MONTECRISTO21. Good morning Luis, is it time to enter some cyclical values ​​like that of the steel companies? How do you see Acerinox and Arcelor? Thanks in advance. Regards.

12:37The materials-related sectors are one of our favorites in Europe. The change in Arcelor's management leadership has been very well received and its potential is great according to the consensus of analysts (60% at 12 months). The scenarios for economic growth and investment in infrastructure are favourable.As for Acerinox, given that the peak of the cycle, the best moment for stainless steel, is being delayed in Europe, the analyst consensus expects strong growth in the next 12 months.

MONTECRISTO22. Good morning Luis, with the US and EU trying to promote expansionist policies, are you interested in entering the sector of construction companies / service providers? Which one does Acciona, ACS, FCC, Ferrovial, Sacys or OHL take? With respect to ACS, people always speak in positive terms and it never seems that the expectations that they have regarding this company are met, what do you think? What can be expected of her? Thanks in advance. Regards.

12:40Investment in civil works is going to be very strong globally, since almost all countries, both developed and emerging, have approved plans for it. Our construction companies have unquestionable prestige in countries like Australia and the US, two of the countries that will invest the most. The consensus of analysts gives greater potential to ACS and Sacyr.

MONTECRISTO23. Good morning Luis, where would you recommend investing towards the end of the year? How do you see the Ibex between now and the end of the year, bullish, bearish or sideways? What three stocks would you recommend holding as a long-term investment? Thanks in advance. Regards.

12:47La Caixa has already warned that it was not going to attend because they consider their participation as strategic, as has the rest of the hard core of shareholders. The takeover bid can go ahead at this price and it does not seem that the Australians are in favor of raising the price, although it cannot be ruled out. Following the decree approved by the Government, the sector has fallen by more than 10% and Naturgy has held steady, so we cannot rule out corrections after the takeover bid.

MONTECRISTO24. Good morning Luis, what do you think of the Australian pension fund's takeover bid for Naturgy? There are those who say that IFM will have to raise the price offered because it does not pay what Naturgy is worth. Do you think the IFM price will rise? Would you recommend entering the stock in light of the takeover bid and hoping that the tug of war between La Caixa and IFM could raise the share price? Thanks in advance. Regards.

12:50La Caixa has already warned that it was not going to attend because they consider their participation as strategic, as has the rest of the hard core of shareholders. The takeover bid can go ahead at this price and it does not seem that the Australians are in favor of raising the price, although it cannot be ruled out.After the decree approved by the Government, the sector has fallen by more than 10% and Naturgy has remained, so we cannot rule out corrections after the takeover bid.

Mixinat25. Good morning Mr. Martin-Jadraque What do you think of the disaster of the last days of Hellofresh? Do you recommend continuing to invest? Why do you think that Vidrala is regressing lately? Wouldn't it be a good investment to enter the value now? Thank you very much

12:55 Good morning. Indeed, in recent weeks and from highs Hellofresh has corrected 18% but it must be taken into account that in the last 24 months it had risen 600%, so there is some vertigo. There are already many analysts who see its potential exhausted in the short and medium term. In Vidrala we have also seen recommendation downgrades by analysts who have made a dent in its price, the latest falls give it some potential but its current trend is bearish. In addition, the possible increase in risk appetite in Europe makes it less attractive as a defensive stock.

26. What do you think of telephone? Thank you

12:59Although the analyst consensus gives it a target price of 4.7 euros, the stock seems unable to hold the 4 for long enough to try to attack higher levels. The reduction in debt is commendable, more than 40%, but it is still a heavy burden, especially if we take into account the investments that it will have to make for the expansion of 5G. Until we see significant growth in Brazil and the rest of Latin America, it will be difficult for it to rise strongly.

Optimism Searcher27. I have BBVA, Santander, Mapfre, ACS, Enagás, Iberdrola, Endesa, E.On, ENI and Telefónica in my portfolio. I have patience and on the other hand I look for a dividend. They have given the electric companies a blow but I understand that in the medium term they are good values. How do you see it? Thank you

13:02The European financial sector has potential given the discount at which it is trading with respect to book value and the expected economic growth for the coming quarters. Even so, BBVA and Santander's exposure to Latin America detracts from their potential. There are better opportunities in Europe. The same thing happens with Mapfre, its exposure to LatAm will continue to take its toll in the short and medium term and there are better opportunities in Europe. As for the Spanish electricity sector, it has been punished, rightly so, by the decree approved by the Government. Iberdrola would be the most attractive due to its exposure to the US and renewables. Enagás and Endesa are the most exposed to new regulations. ENI is one of the European oil companies to which the consensus of analysts gives less potential, especially if OPEC increases production. E.On is one of the favorite electric companies among European analysts.

antonio28. Good morning, you think it's time to leave Arcelormital. And between IAG Iberia and Edreams O Digeo, which one would you buy? Thank you very much

13:15 Arcelar has potential as I have already answered in previous questions. Between IAG and eDreams we would choose the airline, the most solid in Europe.

Federico29. Good morning and thank you for meeting here. My portfolio is fairly diversified, mainly between the US and Europe through investment funds such as GDB European Continental, Robeco Global Premium, Ms Global Opportunity and GDB World Technology. What is your opinion for a dynamic profile with a time horizon of at least 10 years? Thank you

13:23 Good afternoon, Federico. I like your portfolio, it has an interesting combination between value funds and growth funds and that is always diversified and timely. However, I propose another fund for the technology sector, you can combine it with Polar Global Technology, Allianz Artifitial Intelligence and NeubergerBerman 5G . Of course, the weight has to be restrained within your portfolio, otherwise the balance that you mentioned at the beginning would lean towards growth. For this reason, it would also include in its portfolio a fund such as DWS Invest ESG Equity Income, which invests taking into account sustainable criteria in companies with high dividend yield or that are growing in said dividend.