10 April 2018 | 7:58PM BST
Global Macroscope
Growth vs. Value; finding finding the right balance �
For the MSCI AC World market, ‘Growth’ has outperformed ‘Value’ by around 60% over the past 11 years (and by 80% in Europe). This is the longest and strongest period of relative outperformance since the mid-1970s.
�
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
There are several good reasons for Growth’ Growth’s outperformance. The The post financial crisis period has, until recently, experienced a very weak economic and profit recovery.. Coupled with this, low inflation and less investment spending have recovery reduced the proportion of high growth stocks in major equity markets. Growth has been ‘scarce’ and therefor therefore e highly valued, and its longer ‘duration’ has benefited from record low bond yields.
�
The success of Technology Technology has also supported Growth. Low capital employed companies have outperformed high capital employed companies in recent years, correlating closely with Growth vs. Value.
�
But most of the outperformance and higher valuations of Growth vs. Value
Peter Oppenheimer
+44(20)7552-5782 |
[email protected] Goldman Sachs International
Sharon Bell, CFA
+44(20)7552-1341 |
[email protected] Goldman Sachs International
Lilia Peytavin
+44(20)7774-8340 |
[email protected] Goldman Sachs International
Guillaume Jaisson
+44(20)7552-3000 |
[email protected] Goldman Sachs International
can be explained by higher margins, earnings earnings and ROE. This suggests that backing genuine Growth companies still makes sense. �
The underperformance of Value Value partly reflects the relentless decline in bond yields in recent years. In some markets, such as Europe, particular regulatory/competitive problems in the bank, oil and utility sectors have also played a role. But these sectors are transitioning from ‘value traps’ into genuine Value opportunities and are likely to be rewarded as returns improve. i mprove. We expect less of a ‘Macro market’ driven by binary choices between factors (Cyclicals vs. Defensive or Growth vs. Value) and prefer having an eclectic mix.
�
The significant outperfomance of the US equity market relative to the rest of the world since the financial crisis has correlated with the Growth vs. Value Value story. The US has had more growth (it has 25% exposure to tech compared with 5% in Europe, for example) but has had few fewer er value traps. Recently, US equities have started to underperform both in local currency and USD terms. This trend is likely to continue as the USD remains weak and selected Value Value starts to recover recover..
Goldman Sachs 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 affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html . Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.
Goldman Sachs
Global Macroscope
Why has Growth performed so well? The post financial crisis world has thrown up many unusual situations for investors; it has been a cycle like no other. Record low interest rates, QE, the weakest (until recently) but longest economic cycle post war, and so on. But these conditions have meant that macro factors have become dominant in driving performance across sectors, and also across and within equity markets. Factor investing investing has become popular because macro factors, such as persistent falls in bond yields, have had a significant impact on groups of companies or industries. Some broad factor sensitivities are easy to understand: Cyclical versus
Defensive performance, performance, for example, continues to correlate closely with economic activity. Others, such as ‘Growth’ versus ‘Value’, have experienced less of a cyclical dynamic but more of a secular one since the financial crisis. We look at the reasons
why but also why it makes sense to be more selective now. now. Many of the conditions that have boosted returns in Growth continue, but several unique factors that have dampened the returns to Value are fading. We think it is time to be more eclectic.
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
Growth has had a record period of outperformance Since the financial crisis, Value as a factor has performed poorly. This has been particularly the case relative to Growth. Looking at the MSCI World World Value Value versus Growth indices shows an astonishing period of underperformance of Value, Value, which has continued since the financial crisis started (Exhibit 1). Exhibit 1: The record outperformance of ‘Growth’ vs. ‘Value’ MSCI World Value vs. Growth 185
Growth outperforming World Value vs Growth
170
155
140
125
110
95 74
76
78
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
10
12
14
16
18
Source: Datastream, Goldman Sachs Global Investment Research
10 April 2018
2
Goldman Sachs
Global Macroscope
Exhibit 2: Periods of Growth outperforming Value MSCI World Periods of MSCI World Growth outperformance Start
End
Length (years)
Mar-78
N ov - 8 0
Growth vs. Value
MSCI World
2.6
Performance 14%
Annualised 5%
Performance 51%
Annualised 17% 33%
Jan-84
Apr-87
3.2
21%
6%
149%
Jul-88
Dec-91
3.4
15%
4%
18%
5%
Jul-94
Feb-00
5.6
46%
7%
114%
15%
Dec-06
Apr-18
11.3
59%
4%
39%
3%
Source: Datastream, Goldman Sachs Global Investment Research
The relative performance of Growth versus Value Value has been the strongest since the MSCI Value Value and Growth indicators started in 1975. As Exhibit 2 shows, World Growth has outperformed Value Value by 60%, while in Europe it has outperformed Value Value by 80% since the start of 2007 2007.. In the World World indices the current cycle of Growth outperformance has lasted for 11.3 years, twice as long as the previous longest stretch in the late 1990s. M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
There are various reasons for this unprecedented strength of Growth.
1. Poor economic and profit growth; the ‘scarcity’ of Growth Until late 2016 2016 the economic recovery was very weak and consistently disappointed expectations. Investors rewarded Growth because it was scarce. This has been the case even for the US economy economy,, which, until recently, was the only major economy to recover from the recession in 2009. Exhibit 3: US real GDP following recessions 155
1953 1957
145
1960 1969 1973
135
1980 1981
125
1990 2001
115
2007 105 Quarters
95 1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
Source: Haver Analytics, Goldman Sachs Global Investment Research
10 April 2018
3
Goldman Sachs
Global Macroscope
The scarcity of Growth was not just a function of weak economic activity but also the persistent pattern of economic and earnings downgrades. Exhibits 4 and 5 show the pattern of growth and earnings revisions in the post financial crisis environment. Up until 2016, 201 6, the relentless pattern of downgrades was a dominant trend. Faced with such weakness, and with uncertainty, investors were prepared to back and reward companies and sectors that were perceived perceived to deliver dependable Growth. This
was even the case at the country level (a point we will come back to later in this piece) as investors were attracted to the US equity market given it was underpinned by better economic and profit growth than many of it peers across the world.
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
Exhibit 4: Global growth has beaten expectations G7 Consensus Real GDP Growth Forecast
Exhibit 5: Global earnings are being revised up materially I/B/E/S consensus calendarised earnings for MSCI World ($) over time
3.0
$145
%
2.8
$140
2.6
$135
2019E 2013
$130
2.4 2018: 2.1%
2.2
2018E
$120
2017: 2.1%
2.0
2015 2014
$125
2017
$115 1.8
$110
2015: 1.9%
1.6
2014: 1.7%
1.4
2019: 1.8%
2012: 1.4%
2011: 1.4%
1.2
2013: 1.2%
11
12
13
14
$105 2016
$100 $95
2016: 1.5%
1.0 10
2012
15
Source: Bloomberg, Goldman Sachs Global Investment Research
16
17
18
$90 2011
2012
2013
2014
2015
2016
2017
2018
Source: I/B/E/S, Goldman Sachs Global Investment Research
2. Less inflation and investment has reduced the proportion of Growth companies Another factor boosting the Growth factor is that the number of companies that have been able to deliver strong top line growth has also faded in recent years. This, in part, reflects lower inflation and to some extent the fall in investment spending across the corporate sector. sector. Outside of technology spend, companies have generally been more prepared to use cash to buy back shares (in the case of the US) or sit on cash (given concerns about recession in Europe) than to spend on traditional capex. Low interest rates and QE have also protected capacity that might otherwise have been taken out as a result of technological innovations or greater competition. As Exhibit 6 shows, the proportion of companies globally that are expected to sustain top line growth of 8% on consensus FY3 projections continues to fall.
10 April 2018
4
Goldman Sachs
Global Macroscope
Exhibit 6: Just 13% of European companies have high expected sales growth % of companies with high expected sales growth in FY3 50%
High growth (>8%)
45% 40% 35% 30%
25% 25% 20% 15% 10% M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
MSCI AC World
13%
SXXP
5% 0% 98
00
02
04
06
08
10
12
14
16
18
Source: Bloomberg, Goldman Sachs Global Investment Research
3. Technology Technology stocks enjoyed particular growth While weak economic activity acted as a headwind for economically sensitive companies and sectors, technology stocks also generated remarkable profit and margin growth. Between the last peak in i n 2007 and now, technology technology companies in the US have driven around 80% of the rise in i n US margins. It is true that even margins outside of the technology sector have increased (even in the more economically challenged Europe region), but the rise in margins in technology has been an important contributor to the outperformance of Growth. The technology sector makes up 30% of the MSCI US Growth index, although of course many technology-related technology-related stocks also fall into other areas of the market, such as consumer services, which also makes up 20%.
10 April 2018
5
Goldman Sachs
Global Macroscope
Exhibit 7: The gap between US and European margins halves if we exclude technology Net income margins, in all cases ex financials (%) 12
US US ex tech
10
Europe Europe ex tech
8
6
4
2
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Source: Datastream, I/B/E/S, Goldman Sachs Global Investment Research
4. Companies with less capital employed have enjoyed much higher returns Another reason why Growth has done so well in recent years is that there has been a significant shift in the performance of companies that are less capital-intensive. This is, of course, partly because so many of the lowest capital employed companies are technology companies, or are ‘disrupters’ employing technology. It is also because in the capital-intensive sectors the impact of QE and years of close to zero rates have prevented weak companies from exiting, and have therefore pushed margins and returns down. We can gain a sense of this by ranking companies according to their assets/employee, their income/assets and their income/capex ratios. We We can then separate them between 1 high and low capital intensive sectors . Just as technology and Growth have outperformed since the start of the financial crisis, so too have low capital intensive companies.
Paper, Industrial Metals & Mining, Automobiles & Parts, Leisure Capital Intensive Sectors: Forestry & Paper, Goods, Construction & Materials, Oil Equipment & Services, Fixed Line Telecommunications, Telecommunications, Mobile Telecommunications, Electricity, Gas, Water & Multiutilities Beverages, s, Food Producers, Household Goods & Home Construction, Non Capital Intensive Sectors: Beverage Personal Goods, Tobacco, General Retailers, Health Care Equipment & Services, Pharmaceuticals & Biotechnology,, Software & Computer Services, Technology Biotechnology Technology Hardware & Equipment 1
10 April 2018
6
Goldman Sachs
Global Macroscope
Exhibit 8: Performance of capital and non capital intensive sectors sectors World aggregate 1600
Capital Intensive
Non Capital Intensive
1400 1200 1000 800 600 400 M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
200 0 90
92
94
96
98
00
02
04
06
08
10
12
14
16
18
Source: Worldscope, Datastream, Goldman Sachs Global Investment Research
5. Growth stocks have widened their relative ROE and earnings strength, justifying their valuations Given that many of the companies in the Growth indices are technology companies, or indeed consumer services companies that are using technology to disrupt traditional businesses, they have generated very high returns. Both in the case of the World equity market overall (Exhibit 10) 10) and in Europe in particular (Exhibit 9), the ROE generated in the Growth segment of the market has been much higher than for Value Value and the gap has widened since the financial crisis. Exhibit 9: Growth generated higher ROE than Value in the market, and not just in Europe... ROE 25
20
MSCI Europe
18
MSCI Europe Value 20
Exhibit 10: ...but also globally ROE
MSCI Europe Growth
16 14
15
12 10
10
8 6
5
MSCI AC World
4
MSCI AC World Value
2 0
MSCI AC World Growth
0 03
04
05
06
07
08
09
10
11
12
Source: FactSet, Goldman Sachs Global Investment Re Research
10 April 2018
13
14
15
16
17
18
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Source: FactSet, Goldman Sachs Global Investment Re Research
7
Goldman Sachs
Global Macroscope
6. Growth companies have benefited from lower bond yields Given that Growth sectors tend to be longer duration than the market overall, they have benefited from lower bond yields. Exhibit 11: Performance of MSCI World Growth vs. MSCI World, compared with 10-year US bond yields
130
Exhibit 12: Performance of MSCI Europe Growth vs. STOXX 600 compared with 10-year interest rates 10-year interest rates calculated using 75% Germany and 25% UK 5.5 5.0
125
135
5.5 5.0
130
4.5 4.0
120
3.5 115
4.5 125
4.0 3.5
120
3.0
3.0 115
2.5
110
2.0 105
1.5
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
0.5
US 10 year interest rates 95 08
09
10
11
12
13
14
15
16
1.5
105
17
0.5
Europe 10 year interest rates 95
18
0.0 07
Source: Da Datastream, Go Goldman Sa Sachs Gl Global In Investment Re Research
1.0
MSCI Europe Growth vs STOXX 600
100
0.0 07
2.0
1.0
MSCI World Growth vs MSCI World
100
2.5 110
08
09
10
11
12
13
14
15
16
17
18
Source: Da Datastream, Go Goldman Sa Sachs Gl Global In Investment Re Research
7. Growth valuations are high but largely justified in our view Valuations of Growth stocks have increased. In the case of the US they are back to the relative highs last seen in the early 1990s. In Europe they are less expensive relative to history but this in part reflects the depth of the crisis for value stocks – and banks in particular – during the financial crisis. Exhibit 13: Relative valuations of Growth are above their historical average – but Europe is still cheaper relative to the World 12m fwd P/E Premium of Growth vs. Value 70%
MSCI Europe Growth vs.Value MSCI AC World Growth vs.Value
60%
50%
40%
30%
20%
10%
0% 04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Source: FactSet, Goldman Sachs Global Investment Research
10 April 2018
8
Goldman Sachs
Global Macroscope
But it is not clear that Growth as a fact factor or has become too expensive relative to its fundamentals. Exhibit 14 shows the different drivers of returns between Growth and
Value indices in the US, Europe and for the World aggregate. Exhibit 14: Strong earnings growth has justified returns and valuation in the Growth factor Contribution to price performance since Jan-09 300%
278%
Valuation contribution Earnings contribution
250%
Price change 200%
168% 76 pp.
150%
130% 93%
100% 78 pp.
68 pp.
36%
36 pp.
50% 24 pp.
0%
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
32 pp. 166 pp.
22 pp.
37 pp.
87%
63 pp. 64 pp.
-66 pp.
-50% Value
Growth
Value
US
Growth
Europe
Value
Growth
World
Source: FactSet, Datastream, Goldman Sachs Global Investment Research
The better performance has been largely justified by superior earnings, and the contribution of valuation changes to the returns is not very different. While the
absolute numbers are lower in Europe, the differences are no less striking. The Growth index has generated more than four times greater earnings than the Value Value index over the past decade.
10 April 2018
9
Goldman Sachs
Global Macroscope
Why has Value performed so poorly? Of course, the strength of Growth stocks is one part of the story; the weakness in Value is another. Why Why has this happened?
The impact of falling bond yields Part of the explanation for this is the sector exposure of the Value Value factor and its sensitivity to both economic growth and bond yields. Weak growth and falling bond yields – which in many ways reflected the weak growth conditions – have dampened the returns of Cyclical sectors, which have a high weight in the Value Value indices (banks, oil & gas and utilities) and are typically shorter duration. Exhibit 15: Value has more cyclicals than growth Sector weight differentials
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
20
MSCI AC World Value minus Growth
15
15
10
6 4
5
4
3
3
2
1
0
0
0
-1
-5
-2
-2
-2
-2
-3
-10
-6
-7
l i a t e R
s l a i r t s u d n I
-12
-15
s k n a B
s a G & l i O
s e i t i l i t U
m o c e l e T
e c n a r u s n I
s t r a P & o t u A
e t a t s E l a e R
s e c r u o s e R c i s a B
s l a c i m e h C
t a M & s n o C
e g a r e v e B & d o o F
s e c i v r e S l a i c n a n i F
e r a C h t l a e H
e r u s i e L & l e v a r T
a i d e M
G H H P
h c e T
Source: Datastream, Goldman Sachs Global Investment Research
At the same time, the Growth versus Value Value indices also correlated with falling bond yields. Exhibit 16: There is a close relationship between the relative performance of Cyclicals and moves in bond yields... Performance of Cyclicals vs. Defensives, US 10-year bond yields
Exhibit 17: ...which is also the case for Value vs. Growth Performance of Value vs. Growth, US 10-year bond yields
Europe Cyclicals vs. Defensives
105
US 10Y BY (RHS)
95
10
160
9
150
8
85
7
75
6
Europe Value vs. Growth
6
US 10Y BY (RHS)
140 5 130 120
4
5
65
110 4
55 3 45
2
35 25 90
92
94
96
98
00
02
04
06
08
10
Source: Da Datastream, Go Goldman Sa Sachs Gl Global In Investment Re Research
10 April 2018
12
14
16
18
3
100 90
1
80
0
70
2
1 06
07
08
09
10
11
12
13
14
15
16
17
18
Source: Da Datastream, Go Goldman Sa Sachs Gl Global In Investment Re Research
10
Goldman Sachs
Global Macroscope
Consequently, both Cyclicals and Value are likely to perform better in stronger growth Consequently, environments and when bond yields are rising . Our economists do expect growth to continue to be strong, albeit albei t with slower momentum, over over the next couple of years, and they also expect higher term premia to push bond yields higher. But other factors may start to look more supportive for some parts of the Value Value universe. In particular, there are sectors that have been perceived as ‘value traps’ for several years because of a relentless decline in returns. This has been particularly the case in Europe, where specific competitive and regulatory headwinds have resulted in significant dividend cuts for some of the sectors. For example, the dividend growth of the banks, oil and utility sectors was very strong in the decade leading up to the financial crisis but it has since collapsed (Exhibit 18). We believe that these sectors, which still offer average dividend yields of 5%, are likely to enjoy renewed dividend growth over the coming years helping to transition these ‘value traps’ into value opportunities (see grey box for details). Exhibit 18: Dividends are beginning to recover – Oil & Gas, Banks and Utilities DPS relative to the European market ex financials
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
160
Relative DPS of Deep Value Traps
150 140
130 120
110 100
90 80
95
97
99
01
03
05
07
09
11
13
15
17
Source: Worldscope, Datastream, Goldman Sachs Global Investment Research
10 April 2018
11
Goldman Sachs
Global Macroscope
Oil — moving from an ‘Investment’ to ‘Restraint’ phase Oil companies have suffered from collapsing oil prices but, between 2003 and 2013, 2013, they also entered what our oil analysts term an Expansion phase. This is a part of the cycle for oil companies, which is characterised charact erised by sharp EPS growth in the initial years as investment ramps up but which quickly loses momentum, forcing multiples to contract and leading leadi ng to poor shareholder returns. These ‘Big Oils’ tend to perform best in what our oil analysts call the ‘Restraint’ phases of the cycle – defined by backwardation, cost deflation and consolidation – when a high risk premium on long-term oil prices restrains investment and creates high barriers to entry. Our oil analysts believe that the sector is now entering a Restraint phase, which should help drive returns. See Global Energy: A new era for oil investing: The Age of Restraint, 22 March 2018.
Banks – regulatory and capital headwinds fade Banks suffered suffered more than most sectors in the afterma aftermath th of the financial crisis – indeed, they were at the M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
epicentre of it, particularly in the US U S and then in Europe. The headwinds that they encountered were legion. Falling leverage, tighter capital requirements and regulation, fines, weak growth and collapsing net interest margins were some of the most persistent problems. But with the fin-reg process complete, even banks in Europe have managed to pay dividends in 2017 2017, with €54bn to shareholders. See Europe Banks: The Aggregate Picture: costs, slow walking DIV hikes, the Great Valuation gap , 8 March 2018.
Utilities – consolidation and increased returns While US utilities performed well as bond yields fell over recent years, European utilities did not. Our analysts believe that much of this reflects a problem of complexity complexity.. They They have argued that the recent moves by EON (the Uniper spinoff) and RWE (innogy’ (innogy’s s listing) may herald a new chapter in the sector’ sector ’s history: the era of futureproof/pure play utilities driving higher returns as they are set to rediscover secular growth thanks to a capex super-cycle in electricity distribution grids and renewables, which are likely to generate much higher returns. See Europe: Utilities: Power Shift 2.0: Futureproof or pure plays? Routes to unlocking value , 6 July 2017.
10 April 2018
12
Goldman Sachs
Global Macroscope
How US versus Europe plays into the Growth versus Value theme The outperformance of the US equity market relative to others (such as Europe) has been significant since the financial crisis began. But the recent period has started to see some reversal. This is the case when comparing performance in local currency returns but even more so in US Dollars. Dol lars. Exhibit 19: Since 2009, the US has outperformed the rest of the world in local currency... Local currency 160
Exhibit 20: ... as well as in USD USD
150
US vs World ex US
130
140
120
130
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
US vs World ex US
140
150
110 120 100 110
90
100
80
90
70
80
60 00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
00
Source: Da Datastream, Go Goldman Sa Sachs Gl Global In Investment Re Research
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Source: Da Datastream, Go Goldman Sa Sachs Gl Global In Investment Re Research
While it has not always been the case, at least since the financial crisis, the relative performance of US equities versus Europe reflects the Growth versus Value Value relative leadership (Exhibit 21). Exhibit 21: Europe vs. US pe rformance has moved with Value vs. Growth Performance of Value vs. Growth and STOXX 600 vs. S&P 500 180
120
MSCI AC World Value vs. Growth
170
STOXX Europe 600 vs. S&P 500
110
160
100
150 90 140 80 130 70 120 60
110
50
100 90
40 99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
Source: Datastream, Goldman Sachs Global Investment Research
10 April 2018
13
Goldman Sachs
Global Macroscope
In effect, Europe Europe in particular has simply had less of the ‘good’ stuff (such as technology) and more of the ‘bad’ stuff (such as banks) in recent years. For
example, Exhibit 22 shows that the US has 25% exposure to technology (more if you include ‘technology’ stocks that are in other sectors, but 23% exposure to Value sectors such as financials, utilities and oil. By contrast, Europe has 5% exposure to technology and 32% exposure to these Value Value sectors. Exhibit 22: The US has more growth and less deep value than Europe Sector weights by region 40%
Tech 34%
35% 30%
32%
27%
27%
25%
25%
23%
20%
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
Financials, Utilities, Oil & Gas
18% 15%
15%
13%
10% 5%
5% 0% Asia Pacific ex Japan
US
World
Japan
Europe
Source: MSCI, FactSet, Goldman Sachs Global Investment Research
Coupled with this, the US has a very large exposure to what we earlier described as non capital intensive industries compared with high capital intensive industries (Exhibit 23), which has mattered for performance performance given the gap in relative performance mentioned earlier. Exhibit 23: The US has more low capital intensive companies than Europe Weight in the market ex financials 70%
Capi Capita tall Int Inten ensi siv ve
Non Capi Capita tall Int Inte ensiv nsive e
58%
60% 50%
45% 41%
40% 32%
31%
31%
31%
30% 20%
21%
20% 12%
10% 0% World
US
Europe
Japan
EM
Source: Worldscope, Datastream, Goldman Sachs Global Investment Research
These factors were further supported by US growth. The US was the one economy, and market for that matter, that managed to generate growth in an 10 April 2018
14
Goldman Sachs
Global Macroscope
otherwise very weak economic and profit environment. Bear in mind that in the
years prior to 2016 both Asia and Europe experienced six years in a row with virtually no profit growth. Over Over the same period the S&P 500 50 0 generated almost a 100% profit profit growth. The attractions attractions of the US equity market were also supported by the perceived tail risks associated with Europe and, subsequently, with EM markets. The former had all the risks associated with the banking and sovereign debt crisis through 2010 2010 to 2014, while the latter experienced the risks associated with falling commodity prices and a slowing China economy in 2014 and 2015. While technology weakness has certainly played a part in the relative underperformance of the US in recent weeks, weeks, it is not the full story. story. As we showed in GOAL Kickstart: How much of the sell-off is technology? , 3 April 2018, since the recent peak on 9 March 2018, 2018, the US equity equit y market has underperformed other
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
markets whether one includes or excludes technology. technology. Of course, this is partly explained by the fact that some’tec some’tech h giants’ in the US are already classified into other sectors. sectors. But the clearcut arguments in favour of being overweight in US equities are fading. The extent of the ‘deep value’ in Europe compared with the US can be seen in Exhibit 24, which shows the proportion of the equity market in both cases where the dividend yield is above the average HY corporate bond yield. Until the financial crisis, these were much the same. Since then, the gap has widened significantly. This partly reflects the very high dividend yields in the European ‘value trap’ sectors. Exhibit 24: Europe has a ‘Value’ bias % of companies with div. yields > corp. bond yield 100%
STOXX Europe 600
S&P 500
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
Source: Goldman Sachs Global Investment Research
10 April 2018
15
Goldman Sachs
Global Macroscope
So, taken overall, just as the stark contrast between Growth and Value Value is fading, we would expect a similar fading of the wide performance gap between the US and the rest of the world. We We think it is time to get more eclectic.
Summary �
Growth is still fairly scarce given the low proportion of companies deli vering high sustained sales growth. We like companies that are reinvesting for future growth. In Asia, for example, we prefer a GARP strategy, while in the US and Europe we focus on companies reinvesting for future growth (GSTHHGIR and GSSTHGIR, GSSTHG IR, respectively). We also highlight companies with a low PEG ratio in Europe (Europe Weekly Kickstart - Growth conundrum conundrum,, 6 April 2018).
�
However,, the prospect of higher bond yields and a continuation of the economic However cycle lead us to look for selected value opportunities. In Europe i n particular (where there is a high weight in deep value sectors), we like banks, oil and utilities, where we see prospects of a transition for ‘value traps’ to value opportunities.
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
�
We believe the very long period of outperformance of the US relative to the rest of the world will fade further. A weak Dollar and the recovery of some Value sectors outside of the US should support this trend.
�
Overall, we we see less of a ‘Macro market’ market’ dominated by binary choices between Cyclicals vs. Defensives and Growth vs. Value. We prefer a more eclectic mix and expect higher dispersion of returns at the stock level.
10 April 2018
16
Goldman Sachs
Global Macroscope
Correction Detection The risks of a drawdown within a bull market Jan. 29, 2018
Our history of relevant research
Many Happy Returns? Bull Market, 8th birthday Mar. 24, 2017
10000
MSCI World Total Return $
Any Happy Returns The Evolution of the Long Good Buy Sep. 01, 2016
9000
8000
7000
The Equity Cycle part II Investing in phases Oct. 29, 2009
6000
5000
Share Despair Anatomy of bear markets and the prospects for recovery Dec. 12, 2002
4000
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
Below Zero 10 effects of negative real interest rates on equities May 04, 2015
The Equity Cycle part I Identifying in the phases Oct. 22, 2009
The Globology Revolution Globalization, technology and BRICs May 12, 2006
Bear Necessities Identifying signals for the next bear market Sep. 13, 2017
3000
The Long Good Buy The Case for Equities March 21, 2012
2000
The Long Good Buy II
1000
Equities Continues Sep. 11, 2013
The Third Wave Wave 3 of the Crisis and the Path to Recovery Oct. 7, 2015
0 Sep-97
Jul-99
May-01
Mar-03
Jan-05
Nov-06
Bear Repair Anatomy of a bull market Apr. 26, 2004
Sep-08
Jul-10
May-12
Mar-14
Jan-16
Nov-17
Adventures in Wonderland Scenarios for a Post-Crisis World Oct. 21, 2014
Share Despair: Anatomy of bear markets and the prospects for recovery, Dec. 12, 2002 Bear Repair: Anatomy of a bull market, Apr. 26, 2004 The Equity Cycle part I: Identifying the phases, Oct. 22, 2009 The Equity Cycle part II: Investing in phases, Oct. 29, 2009 The Long Good Buy; the Case for Equities, Equities , March 21, 201 2012 2 The Long Good Buy II; 18 Months On…The Case for Equities Continues , Sep. 11, 2013 Adventures in Wonderland: Wonderland: Through the looking glass: Scenarios for a post-crisis world, Oct. 21, 2014
Below Zero: 10 effects effects of negative real interest rates on equities , May 4, 201 2015 5 The Third Wave: Wave 3 of the Crisis and the Path to Recovery, Oct. 7, 2015 Any Happy Returns: The Evolution of the ‘Long Good Buy’ Buy’,, Sep. 1, 2016 Bull Market, 8th birthday - Many Happy Returns?, Mar. 24, 2017 Bear Necessities: identifying signals for the next bear market, Sep. 13, 2017 Correction Detection: the risks of a drawdown within a bull market , Jan. 29, 2018
10 April 2018
17
Goldman Sachs
Global Macroscope
Equity Basket Disclosure The ability to trade the basket(s) discussed in this research will depend upon market conditions, including liquidity liquidit y and borrow constraints at the time of trade.
Other Disclosures All MSCI data used in this report is the exclusive property of MSCI, Inc. (MSCI). Without prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. This This information is provided on an “as is” basis, and the user of this information assumes the entire risk of any use made of this information. i nformation. Neither MSCI, any of its affiliates nor any third party involved in, or related to, computing or compiling the data makes any express or implied warranties or representations with respect to this information (or the results to
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
be obtained by the use thereof), and MSCI, its affiliates and any such third party hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even even if notified of the possibility of such damages. MSCI and the MSCI indexes are service marks of MSCI and its affiliates. The Global Industry Classification Cl assification Standard (GICS) were developed by and is the exclusive property of MSCI and Standard & Poor’ Poor’s. s. GICS is a ser vice mark of MSCI and S&P and has been licensed for use by The Goldman Sachs Group, Inc.
10 April 2018
18
Goldman Sachs
Global Macroscope
Disclosure Appendix Reg AC We, Peter Oppenheimer, Sharon Bell, CFA, Lilia Peytavin and Guillaume Jaisson, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.
Disclosures Distribution of ratings/investme ratings/investment nt banking relationships Goldman Sachs Investment Research global Equity coverage universe Rating Distribution
Global
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
Investment Banking Relationships
Buy
Hold
Sell
Buy
Hold
Sell
33%
54%
13%
63%
57%
52%
As of January 1, 2018, Goldman Sachs Global Investment Research had investment ratings on 2,867 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by the FINRA Rules. See ‘Ratings, Coverage groups and views and related definitions’ below. The Investment Banking Relationships chart reflects the percentage of subject companies within each rating category for whom Goldman Sachs has provided investment banking services within the previous twelve months.
Disclosures required by United States laws and regulations See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-managed public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs trades or may trade as a principal in debt securities (or in related derivatives) of issuers discussed in this report. The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts, professionals reporting to analysts and members of their households from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst as officer or director: Goldman Sachs policy generally prohibits its analysts, persons reporting to analysts or members of their households from serving as an officer, director or advisor of any company in the analyst’s area of coverage. Non-U.S. Analysts: Non-U.S. analysts may not be associated persons of Goldman Sachs & Co. LLC and therefore may not be subject to FINRA Rule 2241 or FINRA Rule 2242 restrictions on communications with subject company, public appearances and trading securities held by the analysts.
Additional disclosures required under the laws and regulations of jurisdictions other than the United States The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and regulations. Australia: Goldman Sachs Australia Pty Ltd and its affiliates are not authorised deposit-taking institutions (as that term is defined in the Banking Act 1959 (Cth)) in Australia and do not provide banking services, nor carry on a banking business, in Australia. This research, and any access to it, is intended only for “wholesale clients” within the meaning of the Australian Corporations Act, unless otherwise agreed by Goldman Sachs. In producing research reports, members of the Global Investment Research Division of Goldman Sachs Australia may attend site visits and other meetings hosted by the companies and other entities which are the subject of its research reports. In some instances the costs of such site visits or meetings may be met in part or in whole by the issuers concerned if Goldman Sachs Australia considers it is appropriate and reasonable in the specific circumstances relating to the site visit or meeting. To the extent that the contents of this document contains any financial product advice, it is general advice only and has been prepared by Goldman Sachs without taking into account a client’s objectives, financial situation or needs. A client should, before acting on any such advice, consider the appropriateness of the advice having regard to the client’s own objectives, financial situation and needs. Brazil: Disclosure information in relation to CVM Instruction 483 is available at http://www.gs.com/worldwide/brazil/area/gir/index.html. Where applicable, the Brazil-registered analyst primarily responsible for the content of this research report, as defined in Article 16 of CVM Instruction 483, is the first author named at the beginning of this report, unless indicated otherwise at the end of the text. Canada: Goldman Sachs Canada Inc. is an affiliate of The Goldman Sachs Group Inc. and therefore is included in the company specific disclosures relating to Goldman Sachs (as defined above). Goldman Sachs Canada Inc. has approved of, and agreed to take responsibility for, this research report in Canada if and to the extent that Goldman Sachs Canada Inc. disseminates this research report to its clients. Hong Kong: Further information on the securities of covered companies referred to in this research may be obtained on request from Goldman Sachs (Asia) L.L.C. India: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (India) Securities Private Limited, Research Analyst - SEBI Registration Number INH000001493, 951-A, Rational House, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India, Corporate Identity Number U74140MH2006FTC160634, Phone +91 22 6616 9000, Fax +91 22 6616 9001. Goldman Sachs may beneficially own 1% or more of the securities (as such term is defined in clause 2 (h) the Indian Securities Contracts (Regulation) Act, 1956) of the subject company or companies referred to in this research report. Japan: See below. Korea: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. New Zealand: Goldman Sachs New Zealand Limited and its affiliates are neither “registered banks” nor “deposit takers” (as defined in the Reserve Bank of New Zealand Act 1989) in New Zealand. This research, and any access to it, is intended for “wholesale clients” (as defined in the Financial Advisers Act 2008) unless otherwise agreed by Goldman Sachs. Russia: Research reports distributed in the Russian Federation are not advertising as defined in the Russian legislation, but are information and analysis not having product promotion as their main purpose and do not provide appraisal within the meaning of the Russian legislation on appraisal activity. Singapore: Further information on the covered companies referred to in this research may be obtained from Goldman Sachs (Singapore) Pte. (Company Number: 198602165W). Taiwan: This material is for reference only and must not be reprinted without permission. Investors should carefully consider their own investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial Conduct Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available from Goldman Sachs International on request.
10 April 2018
19
Goldman Sachs
Global Macroscope
European Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive 2003/125/EC is available at http://www.gs.com/disclosures/europeanpolicy.html at http://www.gs.com/disclosures/europeanpolicy.html which states the European Policy for Managing Conflicts of Interest in Connection with Investment Research. Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer registered with the Kanto Financial Bureau under registration number Kinsho 69, and a member of Japan Securities Dealers Association, Financial Futures Association of Japan and Type II Financial Instruments Firms Association. Sales and purchase of equities are subject to commission pre-determined with clients plus consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the Japanese Securities Finance Company.
Ratings, coverage groups and views and related definitions Buy (B), Neutral (N), Sell (S) - Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy or Sell on an Investment List is determined by a stock’s total return potential relative to its coverage. Any stock not assigned as a Buy or a Sell on an Investment List with an active rating (i.e., a stock that is not Rating Suspended, Not Rated, Coverage Coverage Suspended or Not Covered), is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to a global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular analyst’s coverage group may vary as determined by the regional Investment Review Committee. Additionally, each Investment Review Committee manages Regional Conviction lists, which represent investment recommendations focused on the size of the total return potential and/or the likelihood of the realization of the return across their respective areas of coverage. The addition or removal of stocks from such Conviction lists do not represent a change in the analysts’ investment investment rating for such stocks. Total return potential represents the upside or downside differential between the current share price and the price target, including all paid or anticipated dividends, expected during the time horizon associated with the price target. Price targets are required for all covered stocks. The total return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership. M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at http://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst’s investment outlook on the coverage group relative to the group’s historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12 months is favorable relative to the coverage group’s historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12 months is neutral relative to the coverage group’s historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage group’s historical fundamentals and/or valuation. Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman Sachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.
Global product; distributing entities The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated in Australia by Goldman Sachs Australia Pty Ltd (ABN 21 006 797 897); in Brazil by Goldman Sachs do Brasil Corretora de Títulos e Valores Mobiliários S.A.; Ombudsman Goldman Sachs Brazil: 0800 727 5764 and / or
[email protected]. Available Weekdays (except holidays), from 9am to 6pm. Ouvidoria Goldman Sachs Brasil: 0800 727 5764 e/ou
[email protected]. Horário de funcionamento: segunda-feira à sexta-feira (exceto feriados), das 9h às 18h; in Canada by either Goldman Sachs Canada Inc. or Goldman Sachs & Co. LLC; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan by Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs New Zealand Limited; in Russia by OOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman Sachs & Co. LLC. Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and European Union. European Union: Goldman Sachs International authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, has approved this research in connection with its distribution in the European Union and United Kingdom; Goldman Sachs AG and Goldman Sachs International Zweigniederlassung Frankfurt, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht, may also distribute research in Germany.
General disclosures This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst’s judgment. Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment Research Division. Goldman Sachs & Co. LLC, the United States broker dealer, is a member of SIPC (http://www.sipc.org (http://www.sipc.org). ). Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and principal trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, principal trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research. The analysts named in this report may have from time to time discussed with our clients, including Goldman Sachs salespersons and traders, or may discuss in this report, trading strategies that reference catalysts or events that may have a near-term impact on the market price of the equity securities discussed in this report, which impact may be directionally counter to the analyst’s published price target expectations for such stocks. Any such trading strategies are distinct from and do not affect the analyst’s fundamental equity rating for such stocks, which rating reflects a stock’s return potential relative to its coverage group as described herein. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
10 April 2018
20
Goldman Sachs
Global Macroscope
The views attributed to third party presenters at Goldman Sachs arranged conferences, including individuals from other parts of Goldman Sachs, do not necessarily reflect those of Global Investment Research and are not an official view of Goldman Sachs. Any third party referenced herein, including any salespeople, traders and other professionals or members of their household, may have positions in the products mentioned that are inconsistent with the views expressed by analysts named in this report. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Investors should review current options disclosure documents which are available from Goldman Sachs sales representatives or at http://www.theocc.com/about/publications/character-risks.jsp. Transaction costs may be significant in option strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation will be supplied upon request.
M O C . S R E N T R A P W E I V R E T N E C @ R E P O O H D f o e s u e v i s u l c x e e h t r o F
Differing Levels of Service provided by Global Investment Research: The level and types of services provided to you by the Global Investment Research division of GS may vary as compared to that provided to internal and other external clients of GS, depending on various factors including your individual preferences as to the frequency and manner of receiving communication, your risk profile and investment focus and perspective (e.g., marketwide, sector specific, long term, short term), the size and scope of your overall client relationship with GS, and legal and regulatory constraints. As an example, certain clients may request to receive notifications when research on specific securities is published, and certain clients may request that specific data underlying analysts’ fundamental analysis available on our internal client websites be delivered to them electronically through data feeds or otherwise. No change to an analyst’s fundamental research views (e.g., ratings, price targets, or material changes to earnings estimates for equity securities), will be communicated to any client prior to inclusion of such information in a research report broadly disseminated through electronic publication to our internal client websites or through other means, as necessary, to all clients who are entitled to receive such reports.
All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all research content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our research by third party aggregators. For research, models or other data related to one or more securities, markets or asset classes (including related services) that may be available to you, please contact your GS representative or go to http://360.gs.com. Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY 10282. © 2018 Goldman Sachs. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs Group, Inc.
10 April 2018
21
