Download Taking the Measure of Turbulent Markets, Focusing on Value

JANUARY 2016
Selection Effect: Taking the
Measure of Turbulent Markets,
Focusing on Value
Constrained global growth and volatile markets may be on tap again this year, but
sharp security-level analysis and a sound investment process can generate real returns.
Beware the effects of financial engineering and index composition. Return of capital is
good, if sustainable. Explore where optionality is long, and tread carefully where it’s
short. “Do we want to put money in this stock or bond?”
Talking with Jason Brady, cfa, CEO and Global Fixed Income Portfolio
Manager
Jason Brady is president and CEO of Thornburg Investment Management. He is
responsible for the company’s overall strategy and direction. He is also the head of
the firm’s global fixed income investment team and a portfolio manager on several
strategies, including Thornburg Investment Income Builder and Multisector Opportunistic strategies.
Jason was named president and CEO effective January 1, 2016. He joined the firm in
2006 and was made portfolio manager and managing director in 2007.
Q: Since the 2010 peak in the recovery
from the global financial crisis, global
growth has generally been slowing,
despite recurrent official sector projections
of reacceleration. The International
Monetary Fund (IMF) estimates global
growth in 2015 at 3.1%, down from
previous forecasts. For 2016, it sees
growth advancing modestly to a downwardly revised 3.4%. Do you see 2016 as
the year when global growth finally turns
the corner and starts to accelerate?
JB: I’m not optimistic global growth will
advance the way the IMF sees. It
continues to downgrade its growth
expectations. Looking at the big drivers
of global growth—the two biggest
economies, the U.S. and China—doesn’t
provide an optimistic view. Expectations
for the U.S. ran around 2.5%. But
people were downgrading the fourth
quarter, which fell short of expectations
and came in at a preliminary 0.7%. So
the yearly figure looks like it was slightly
lower at 2.4%. Then there’s manufacturing. Purchasing Managers Index (PMI)
readings in China were running below
50, indicating contraction, in most of
the second half of 2015, and again in
January of this year. And in the U.S. we
saw PMI reports below 50 in the last
quarter of 2015 and into January. While
the manufacturing economy in the U.S.
isn’t tremendously important, its
volatility can be indicative of some
challenges. Probably the correlation
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2 | Selection Effect
there is a strong dollar, and that’s
certainly a headwind.
We’ve had extremely accommodative
monetary policy and low growth in the
U.S. That’s been accompanied by low
labor productivity, which has been a
surprise to many observers. If that
continues, it’s going to be tough
because labor force participation also
remains low, as does unemployment.
Put it all together and the challenging
growth picture becomes clear.
In China, it’s some of the same story,
although the manufacturing economy
is much more important, and the
recent readings suggest a manufacturing recession. To me, the tail risk of
much lower Chinese growth is real.
Why are Blue Chips Up While High-Yield is Down?
Index Total Returns for 2015
35%
30%
32.3%
25%
20%
15%
10%
5%
8.6%
1.4%
0.6%
0%
-4.5%
-5%
-10%
-14.9%
-15%
-20%
S&P 500 Index
MSCI Emerging
Markets Index
(USD)
Barclays U.S.
Aggregate
Bond Index
Barclays U.S.
Corporate High
Yield Index
Barclays EM
Local Currency
Russia Index
MICEX Index
(RUB)
Source: Bloomberg
I don’t think Japan, the world’s
Past performance does not guarantee future results.
third-largest economy, has solved its
growth problems, either. They may be
expect it to repeat that performance
Russia are in recessions and China is
making different cultural choices now,
again this year. But I think we need to
slowing markedly. Do Brazil and Russia,
promoting more women in the labor
be careful about focusing just on GDP
like China, represent threats to a rebound
force and corporate governance reforms,
as opposed to asset prices broadly. Our
in global growth?
but they’ve mostly chosen a good, high
investment process focuses largely on
standard of living without much
JB: They’re both a drag on global
valuations of individual assets.
disruption.
growth and will continue to be. Both are
affected by the collapse in commodities
All in, it doesn’t mean a global recession
Q: The S&P 500 Index was up about
prices, and political uncertainty in both
is dawning. But if you just start with the
1.4% in 2015, while the Barclays U.S.
doesn’t help. Ultimately, though, our job
biggest contributors, global growth
Aggregate Bond Index gained just 0.6%
at Thornburg isn’t necessarily to predict
looks challenged. Europe is a bright
and the Barclays U.S. Corporate High
economic growth, although that’s an
spot, but from relatively low levels.
Yield Index dropped 4.5%. Is the U.S.
input. It’s really to analyze asset prices.
blue chip stock market missing something
Russia is a great, backward-looking
that the credit market is flagging?
example of this: There was a lot of very
Q: If Europe is the bright spot among
reasonable negativity around Russia a
advanced economies, India would seem to
JB: Any time the high yield market gets
year ago. Yet it was one of the best
be the same among the big emerging
pressured, that’s representative of
performing markets in 2015, both in
market economies, given that Brazil and
struggles in the rest of the market. But I
equity and fixed income. I wouldn’t
think there’s some reasonable basis for
the stock market performance, given
degrees of financial engineering that
“ … our job at Thornburg isn’t necessarily to predict
have gone on around earnings for many
economic growth, although that’s an input. It’s really
corporations in the U.S. So it’s important to differentiate the composition of
to analyze asset prices. … There was a lot of very
the high yield market from a sector
reasonable negativity around Russia a year ago. Yet
perspective versus U.S. equities. There’s
a higher weighting, for example, of
it was one of the best performing markets in 2015,
energy in U.S. high yield. Correct for
both in equity and fixed income.”
that, and the performance of the two
asset classes is more consistent.
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Interview with Jason Brady,
What that also highlights are some of
the bright spots in the S&P 500 and
equities generally that tend not to be
debt-focused companies—in particular,
the big technology companies. But that
begs the question on breadth of the
market. I do worry about the funding
pressures from much higher financing
costs in a market that has relied on
balance sheet manipulation across an
array of sectors.
Q: In December, for the first time in nine
years, the U.S. Federal Reserve hiked its
benchmark interest rate. The quarterpoint increase still leaves the Federal
funds rate at a highly accommodative
level. Do you expect more rate hikes
ahead, steady rate “normalization” or a
path marked by pauses in tightening, or
even potentially a reversal in the
tightening, following the January 2016
market rout?
JB: I think the Fed might have started
to tighten much earlier, although it was
wary of raising rates only to turn around
and loosen them, as Jean-Claude Trichet
did when he was president of the
European Central Bank. It’s happened
in a lot of places, frankly, over the last
five years. They signaled four rate hikes
in 2016. But I suspect, given how
halting progress toward their first rate
rise was, the number will be fewer. The
market says two. The difference represents divergent views of growth, and
the challenges in generating it. Normalization for the Fed these days is probably
going to look different now given
different global labor force dynamics.
So if 2.4% real GDP growth in the U.S.
is the best we can do with very accommodative monetary policy, perhaps the
neutral rate is now lower, and therefore,
the Fed’s moves toward normalization
will be slower.
I also think the Fed would like to see
some wage inflation. They would say
there’s too little of that lately. To the
extent that we actually get some wage
cfa ,
CEO and Portfolio Manager | 3
“ … if 2.4% real GDP growth in the U.S. is the best
we can do with very accommodative monetary
policy, perhaps the neutral rate is now lower, and
therefore, your moves toward normalization will be
slower.”
inflation, it may be okay for GDP and
consumption, but not perhaps for equity
prices, as labor’s share of profits would
be higher than it has been.
Q: Wages have been quite stagnant for
several years running, a theme animating candidates for the White House. Do
you expect the U.S. elections to have more
market impact than in the past, given
some of the tax proposals among candidates from both parties?
JB: Probably not. For us as investors and
shareholders, there seems to be a small
potential for real change in the tax
regime. More generally, I’m concerned
about the rise in populism without a lot
of basis in economic reality or empiricism. But that’s not a new problem in
politics.
Q: Are activist shareholders a net
positive or negative for the U.S. market
and economy? Investment, including
R&D, has come down in recent years as
return of capital has gone up among U.S.
large-caps. Does this ultimately represent
a better allocation of resources, or
undercut the degree of innovation taking
place in the economy?
JB: You can make a chicken and egg
argument about where growth comes
from. Do people see growth opportunities and then invest, or does the investment drive the growth? That’s a good
question, and I don’t have the answer to
that. What I will say is that financial
engineers across cycles tend to have
degrees of success at certain points. So
were private equity firms doing leveraged buy outs in 2006 and ‘07 driving a
lot of value? Well, they drove value for
themselves. At some level over a cycle,
they did drive some value. I think it’s
basically levered equity returns. There’s
not a lot of real improvement going on.
I would argue activist shareholders are
using the same kind of playbook. Not
many operational improvements happen.
It seems mostly about borrowing more
for shareholder returns. While I’m in
favor of returning money to shareholders, it has to come from the base
business in a sustainable way. Financial
engineering is always a part of the
investment landscape, and I’m not sure
that it’s any different this time. We’ve
seen this over and over again: financial
engineering driving short-term value. I
don’t find it more imaginative this time
around, nor do I imagine that it will
provide lasting value more than it has in
the past.
Q: Overseas, Greece has somewhat faded
from the headlines, but does the threat to
the euro zone’s architecture still exist,
whether from Greece, Portugal or some
other country in the currency block?
JB: There’s been a lot of adjustment, but
maybe not enough. As we talked about,
the labor force dynamics globally are
challenging, and that’s certainly true in
Europe, too. How they manage the
current immigration crisis will be
interestingly determinant over a much
longer period of time. I don’t know how
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4 | Selection Effect
that will play out. But clearly one of
the strengths of the U.S. labor force
has been immigration.
Greece remains extremely problematic,
but we’ve already seen enough writedowns there that I’m not sure additional write-downs are really going to
sink the euro zone. It also seems like
Germany is okay with a “transfer
union,” which is to say supporting the
rest of Europe as long as it’s a little less
explicit. And countries like Spain and
Italy, which were large problem
children, have certainly seen significant recovery from the bottom.
Although both, particularly Italy, still
have high debt loads, fiscal deficits and
unemployment rates.
One thing I worry more about around
the euro zone, something that could
become a global phenomenon, is the
change in regulation around banking.
Banks in Europe are very central to
credit creation. So the news about an
arbitrary regulatory reassignment of
senior debt securities issued by the
largest Portuguese bank caused a
massive write-down of those bonds.
They declined in price some 75%
overnight. Again, from an arbitrary
regulatory action. The bail-in of debt
securities is happening concurrently
with a massive amount of issuance of
subordinated securities. If you believe,
as I do, that some of the real impetus
behind the challenges of 2008 was that
highly rated securities suddenly didn’t
perform like that anymore, then you’re
Global Growth: Upshifting, Downshifting, and then Reverse
Estimated GDP Growth for 2015
8%
7%
7.3%
6%
6.9%
5%
4%
3%
2%
2.4%
1.5%
1%
0.6%
0%
-1%
-2%
-3%
-4%
United States
Euro Area
Japan
India
China
-3.7%
-3.8%
Russia
Brazil
Sources: International Monetary Fund, January 2016
U.S. Department of Commerce Bureau of Economic Analysis, January 2016
basically setting investors up for that
same situation in a regulatory environment that I think is looking more at
protecting taxpayers at the expense of
investors. So what will happen with
credit creation and growth if investors
decide the risks of bank-issued bonds are
running too high, given regulatory
uncertainty? It’s a question of priorities,
but that could lead to some real market
dislocation on a global basis.
Q: Back to China, its economy is slowing,
with exports contracting and foreign
exchange reserves declining. The renminbi will join the IMF’s SDR basket in
2016, but just how “freely tradable” will
“While I’m in favor of returning money to shareholders,
it has to come from the base business in a sustainable
way.”
it really be, given continued depreciation
pressures? The capital account remains
closed—if intermittently porous over the
years—to protect China’s debt-laden
financial system. Can China afford to
open its capital account amid capital
flight? Is China’s economy headed for a
hard or a soft landing?
JB: Longer term it’s an engine, not a
drag. But, clearly, the transition from a
command and control to a market-based
economy is a long and torturous one,
and is happening in fits and starts. The
most recent machinations around the
renminbi are an example of that. One
driver of risk appetite globally now is the
renminbi’s exchange rate. To the extent
that Chinese authorities feel they need a
weaker currency, which would only be
weaker against the U.S. dollar relative to
China’s new trade-weighted foreign
exchange basket, we’d be keeping it
even. It’s a very different investment
environment nowadays, particularly for
commodity producers and China’s trade
partners generally.
Transitioning to an open economy may
not even be the end goal. I suspect the
goal is simply an effective economic
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Interview with Jason Brady,
engine for the country itself. Other
members of the investsment team
probably have better insight into the
details. But it strikes me as a very
challenging transition.
Q: Resilient U.S. shale production,
OPEC, warm Northern Hemisphere
weather all continue to conspire against
oil price support. What’s needed to impact
more supply side cuts if demand growth
doesn’t pick up meaningfully? Also,
debt-heavy oil & gas companies have seen
their bond yields hit distressed levels, and
given the time lapse since crude prices
started to collapse in mid-2014, it appears
many price hedges have rolled off. How
great are the default risks at this point?
JB: Other than the old saw about the
cure for high prices being high prices
and the cure for low prices is low prices,
that energy sector dynamic at the
moment looks challenging. It’s hard to
see what would change to bring the
price of that commodity—or many
other commodities—up, especially if
one is concerned about global growth
and the demand function relative to
that. Also, technology advances have
helped support shale production,
bringing break-even costs per barrel
down. But at these prices, we’ll see more
challenges. We’ll see defaults among
indebted, higher-cost producers that
have negative cash flows and no more
access to financing. Remember, there’s
always a lag between price falls and
production declines.
The wildcard is geopolitics. I don’t have
great insight into what might happen,
but many oil supply shocks have come
from geopolitical events. Those haven’t
gone away by any stretch of the imagination. That could end up being determinant, and would quickly overshadow
rig count in the Eagle Ford basin.
Q: The collapse in oil prices was expected
to give a boost to global GDP, given that
some three-quarters of the world imports
cfa ,
CEO and Portfolio Manager | 5
“ … being long optionality is important for many of our
equity strategies. We can really think about that upside,
the multi-bagger opportunities around those changes.”
oil. But consumer spending among the net
energy importers, including in the U.S.,
hasn’t responded as expected. What’s
behind that?
JB: The effect on global consumer
spending is really interesting. You would
think that putting more money in
people’s pockets, particularly an equal
amount in everyone’s pocket, and
therefore, a lot of money on a relative
basis for people who have a higher
propensity to spend, would increase
consumer spending in aggregate. But on
a global basis, you really haven’t seen
that. It’s not as positive at the moment
as you would expect. It has shown up in
degrees in U.S. retail, housing and car
sales data, but not as much as expected,
including globally.
It’s worth noting the selloff in oil has
been concurrent with the selloff in many
other commodities: copper, iron ore,
etc., which makes me think more about
global GDP growth, and manufacturing’s contribution to it. To some
considerable extent this goes back to
China’s economic rebalancing and its
impact on global demand, not to
mention the headwind that the strong
dollar represents for commodities
generally.
Q: Forecasts in the growth of solar in the
U.S. energy mix appear quite bullish,
with some predicting sea changes in the
auto and broader transportation industries, not to mention in electricity
utilities—with oil, natural gas, coal
inputs radically reduced—and even
reduced contributions from nuclear. How
do you see the energy supply trends
evolving?
JB: This is where being long optionality
is important for many of our equity
strategies. We can really think about
that upside, the multi-bagger opportunities around those changes. Battery
technology seems challenging, but we
seem to be incrementally solving it. The
revolution in solar is still probably a
little more hype than reality. But solar
energy’s evolution will probably affect a
huge number of different industries
down the road.
On the fixed income side, we have the
utility and the extractive carbon
industries that in the future would kind
of go the other way; they’re short
optionality. So we have to be rather
careful there.
I think solar power will advance in ways
that are different from what the futurists
say. TVs are better and cars are worse
relative to the Jetsons, so I’m not sure we
can imagine exactly what it will be. But
being aware that we can have this
incredible exposure to positive optionality in a lot of our portfolios is really
fascinating and potentially important for
us to generate returns for our clients.
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6 | Selection Effect
“ … away from energy, there’s stuff that’s gotten
dragged down, such as telecoms, and that’s now
pretty interesting. Even within energy and midstream
MLP-type companies, on the debt side, it’s really
interesting.”
Q: Where do you see opportunities in the
fixed income world in 2016?
JB: In terms of my day job as portfolio
manager and head of the global fixed
income team, we are looking at some of
the markets that have been the most
challenged over the course of the last
year and a half. You already mentioned
the relative underperformance in high
yield credit. I would put emerging
market stocks obviously at the head of
the list of things that have gotten beaten
down, but not too far behind that is
emerging market debt and for very
similar reasons.
I think a lot of babies were thrown out
with the bath water in U.S. corporate
credit, particularly in cream-of-thecrop-rated junk paper. Spreads have
widened a lot. Though I’m not very
excited about U.S. growth, there seems
to be enough going okay that having
near-recession-type spreads on many
corporates is probably less reasonable.
So some securities have become notably
more interesting.
Spreads basically went to levels that
suggest we’re approaching a recession.
Now, again, there’s a lot of composition
argument there. But away from energy,
there’s stuff that’s gotten dragged down,
such as telecoms, and that’s now pretty
interesting. Even within energy and
midstream MLP-type companies, on
the debt side, it’s really interesting.
Certainly, there’s commodity exposure
there, but these are real assets doing
things that are likely to be needed for a
long time, and with yields in the double
digits. Not very long ago, some of these
issuers were considered very solidly
investment grade. Some are worth
looking at again.
Of course, for us, it’s all done on a
security-by-security basis. But generally
on the fixed income side, we’re feeling a
little more cautious about ensuring that
we get adequately paid for risks taken.
Broadly speaking, we’ve moved up in
quality, and are willing to miss any
near-term rebounds in some of the really
beaten-up stuff.
“ … on the fixed income side, we’re feeling a little
more cautious about ensuring that we get adequately
paid for risks taken. Broadly speaking, we’ve moved
up in quality, and are willing to miss any near-term
rebounds in some of the really beaten-up stuff.”
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Q: Everybody likes to look at the macro,
although the company-specific stories can
be just as fascinating, as you suggest.
How does Thornburg integrate individual company stories and their broader
operating environments?
JB: I think the problem we address with
our process is the perennial portfolio
problem, which is picking securities
while taking context into account. Most
portfolio managers use a very specific
benchmark for that context and measure
themselves solely on a relative basis. The
context we gain is broader and deeper
than that, given the way in which we do
our investment work. We spend a ton of
time on individual stories. And within
our mandates, we have real flexibility in
pursuing relative values across industries
and geographies, working on any
number of different things all the time.
Then we share our results with all our
investment teams. This provides valuable
context of great benefit to all of them.
So there’s a rich, sum of the parts,
dynamic picture that’s full of investment
ideas, analysis and context that everyone
in our investment team contributes to
and benefits from at both the security
and macro levels. That’s really the core
of our process.
On the question itself, the micro is
indeed extremely interesting. We spend
a lot of time deciding, “Do we want to
put money in this stock or bond?” We
do, of course, study macro data and
trends as well, but our macro views are
largely generated through constantly
examining all sorts of different individual opportunities around the globe,
traveling to explore them more deeply
and understanding them thoroughly,
and then bouncing the analyses off other
Thornburg investment teams. Everyone
here is able to analyze and compare
relative values across industries. That
leads us to a large variety of interesting
opportunities, while boosting quality
control by sharing the ideas and analyses
across our teams.
Interview with Jason Brady,
Energy is a perfect example to illustrate
the versatility of our approach against
that of sector specialists. If all you do is
look at oil companies, then your context
is usually the supply side. If you’re blind
to how that supply might be overwhelming demand, and don’t look at other
kinds of industries, say manufacturing
demand, or for that matter solar, or
battery technology, or a number of
different things, then you probably don’t
have the context surrounding the
demand side of the equation. And you
can really miss the forest for the trees.
I would add that we don’t have a
top-down macro or strategy view that’s
formed via a regimented checklist. Our
teams are free to form their own views
on individual opportunities and the
cfa ,
CEO and Portfolio Manager | 7
“Our teams are free to form their own views on
individual opportunities and the contexts in which
those ideas operate, informed by all of us spending
lots of time in the weeds in a lot of different places
with a lot of different folks.”
contexts in which those ideas operate,
informed by all of us spending lots of
time in the weeds in a lot of different
places with a lot of different folks. Our
relative value thought process across a
number of different sectors and asset
classes, and our collaborative culture,
are really the keys to our investment
process. They’re how we succeed over
time. n
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8 | Selection Effect
Important Information
Investments carry risks, including possible loss of principal. Additional risks may be associated with investments in emerging markets, including currency fluctuations,
illiquidity, volatility, and political and economic risks. Investments in small- and mid-capitalization companies may increase the risk of greater price fluctuations. Portfolios
investing in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds. The value of bonds will fluctuate relative to changes
in interest rates, decreasing when interest rates rise. This effect is more pronounced for longer-term bonds. Unlike bonds, bond funds have ongoing fees and expenses. Investments in lower rated and unrated bonds may be more sensitive to default, downgrades, and market volatility; these investments may also be less liquid than higher rated
bonds. Investments in derivatives are subject to the risks associated with the securities or other assets underlying the pool of securities, including illiquidity and difficulty in
valuation. Investments are not insured, nor are they bank deposits or guaranteed by a bank or any other entity.
The views expressed by Jason Brady reflect his professional opinions and are subject to change. Under no circumstances does the information contained within represent a
recommendation to buy or sell any security.
A Master Limited Partnership (MLP) is a type of limited partnership that is publicly traded. There are two types of partners in this type of partnership: The limited partner
is the person or group that provides the capital to the MLP and receives periodic income distributions from the MLP’s cash flow, whereas the general partner is the party
responsible for managing the MLP’s affairs and receives compensation that is linked to the performance of the venture.
The Special Drawing Right (SDR) is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. Its value is currently
based on a basket of four major currencies, and the basket will be expanded to include the Chinese Renminbi (RMB) as the fifth currency, effective October 1, 2016.
The performance of any index is not indicative of the performance of any particular investment. Unless otherwise noted, index returns reflect the reinvestment of income
dividends and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investments into any index.
The Barclays Emerging Markets Local Currency Government Index is a flagship index that measures the performance of local currency emerging markets (EM) debt. Classification as an EM is rules-based and reviewed annually using World Bank income group, International Monetary Fund (IMF) country classification and additional considerations
such as market size and investability.
The Barclays U.S. Aggregate Bond Index is composed of approximately 8,000 publicly traded bonds including U.S. government, mortgage-backed, corporate and Yankee
bonds. The index is weighted by the market value of the bonds included in the index.
The Barclays U.S. Corporate High-Yield Index measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified
as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes emerging market debt.
The MICEX Index is a cap-weighted composite index calculated based on prices of the 50 most liquid Russian stocks of the largest and dynamically developing Russian issuers presented on the Moscow Exchange. MICEX Index was launched on September 22, 1997 at base value 100. The MICEX Index is calculated in real time and denominated
by Moscow Exchange in Russian rubles.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The
MSCI Emerging Markets Index consists of the following 23 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India,
Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The S&P 500 Index is an unmanaged broad measure of the U.S. stock market.
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regulated by the UK Financial Conduct Authority (“FCA”). TGA LLP is an appointed representative of Robert Quinn Advisory LLP.
This material constitutes a financial promotion for the purposes of the Financial Services and Markets Act 2000 (the “Act”) and the handbook of rules and guidance issued
from time to time by the FCA (the “FCA Rules”). This material is for information purposes only and does not constitute an offer to subscribe for or purchase any financial
instrument. TGA LLP neither provides investment advice to, nor receives and transmits orders from, persons to whom this material is communicated nor does it carry on
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warranted as to completeness or accuracy and is subject to change without notice.
This communication and any investment or service to which this material may relate is exclusively intended for persons who are Professional Clients or Eligible Counterparties for the purposes of the FCA Rules and other persons should not act or rely on it. This communication is not intended for use by any person or entity in any jurisdiction or
country where such distribution or use would be contrary to local law or regulation.
For more information, visit www.thornburgglobal.com or email Chris Elsmark ([email protected]) or Karim Elfar ([email protected]).
26/2/16
For professional investors and eligible counterparties only.
TH3605