1. Return on Knowledge Asset Allocation and Fixed Income Anders Wagner Senior Analyst Date 8. February 2011

2. 2 Outlook for Fixed Income -first half 2011 Government/Mortgage: We prefer low duration as we expect interest to go higher. Credit: Still interesting even though spreads has come in. High Yield: Recommended as default rates are falling and recovery rates are getting better. Index linked bonds: Interesting for long term investors as the bonds provide some protection against inflation. FI Hedge Fund: Provides stability to the portfolio in a scenario with raising inflation and higher interest levels 18-10-2015

3. 3 Fixed Income in the Model Portfolios: (New money) 18-10-2015 DurationConservativeModerateAggresive Gov./Mortg.<=2,5 year40%30%20% Gov./Mortg.<=5 years20%10%5% Gov./Mortg.>5 years Credit20% 25% High Yield10%20%25% Inflation linked5%10% FI Hedge Fund5%10%15% Total100%

4. Return on Knowledge Appendix: Fixed Income Charts:

5. 5 It also means that corporate defaults should continue to be very low. Thus if our macro scenario is right (the Green phase)... 18-10-2015

6. 6 6 Rating tells about the counter part risk

7. 7 The problem for us is to determine where we are in the cycle! More later... 18-10-2015