State Street Global Advisors Announces 2014 Market Outlook and Identifies Key Themes for Investors

  State Street Global Advisors Announces 2014 Market Outlook and Identifies
  Key Themes for Investors

SSgA Bullish on Growth in 2014; Uncovers Diversification and Return

Business Wire

LONDON & BOSTON -- December 5, 2013

State  Street Global Advisors (SSgA), the asset management business of State
Street Corporation has announced its global outlook for 2014, highlighting
five key investment themes that investors should consider as they position
their portfolios for the year ahead.

Global Outlook:

  *Recovery will become more broad-based and self-sustaining in nature next
    year. The US looks set to enjoy accelerating growth. Europe’s recovery may
    still be fragile but economic activity levels have bounced off
    particularly low levels and the region is poised for modest growth
  *Emerging markets typically benefit most from a global recovery and their
    long-term outlook remains positive despite a turbulent 2013. In 2014,
    emerging markets will be impacted by conflicting forces: a strengthening
    global economy on one hand but a strengthening dollar on the other.
    Valuations, however, are not demanding and expectations are low.
  *In China, the ‘Chinese Dream’ initiative to reshape the economy by
    beginning the shift from an export-driven model is a positive development.
    SSgA anticipates growth of about 7.5% in 2014, but risks still persist.
  *Although the prospect of extreme risk events have diminished, there is
    still reason for caution as there are many complex interlinking parts and
    growth remains sluggish. Stress points remain and the normalization of
    monetary policy could prove challenging.

Investment Themes:

Fixed Income in Transition

  *For the first time in years, SSgA expects that monetary policies will
    begin to diverge, although major country administered rates will likely
    remain unchanged. The US Federal Reserve is expected to begin a tightening
    cycle by tapering its asset purchases, which could in turn signal the
    beginning of a transition to more normal rates for those economies that
    are performing well.
  *However, concerns about rising rates will boost demand for certain fixed
    income assets favouring credit over duration, such as high yield and
    loans, absolute return to cash benchmarks, and short duration corporate
    and floating rate notes.

Eurozone Recovery

  *Eurozone growth is particularly favourable to European peripheral debt.
    SSgA expects that there will be rallies in peripheral stocks and that
    small caps and high yield should continue to perform well. SSgA is
    positive on the outlook for Spanish and Italian equities.
  *The UK is set to be the best G10 performer but may experience inflationary
    pressures. SSgA is upbeat on the outlook for UK corporate bonds and the UK
    financial sector.

Emerging Markets

  *Current bond and equity valuations offer good upside for 2014, but
    investors will need to be selective. Emerging Markets are sensitive to
    policy makers’ decisions, at home and abroad and countries that fail to
    address reforms adequately are less deserving of investor attention.
  *While the period of 10% per annum growth may be in the past for China, it
    is still set to displace the US as the world’s biggest economy by 2030.

Over-valued Safe Havens

  *Because a path to elimination of Federal Reserve asset purchases is now on
    the table, and economic prospects appear consistent with tapering,
    government bonds seem to have lost the safe-haven appeal that served them
    well during 2011 and 2012.
  *The broad lack of value in sovereign paper extends to other fixed income
    segments, narrowing further the options for yield-seeking investors. Also
    as central bank policies have progressively stripped return from
    short-term instruments, cash has come to offer very little compensation
    for a risk-averse posture as well.

The Changing Face of Correlations

  *The market environment of 2014 continues to pose a challenge for asset
    allocators to build portfolios with the proper level of diversification. A
    more nimble approach such as tactical asset allocation will be more
    appropriate to be able to adjust allocations quickly.
  *SSgA favours short biased strategies, managed futures, real estate and
    cash as diversifiers with stable low correlations for 2014.

Commenting on the global market outlook for 2014, Rick Lacaille, global chief
investment officer at SSgA said, “If stabilisation was the message in 2013,
recovery is the watchword for 2014. While we are not discounting potential
risks, like government and central bank policy changes or geopolitical issues
that could disrupt the growth story, there are plenty of positives to catch
the investor’s eye for 2014.”

About State Street Global Advisors

State Street Global Advisors (SSgA) is a global leader in asset management.
The firm is relied on by sophisticated investors worldwide for its disciplined
investment process, powerful global investment platform and access to every
major asset class, capitalization range and style. SSgA is the asset
management business of State Street Corporation, one of the world’s leading
providers of financial services to institutional investors.

Important Information

Investing involves risk including the risk of loss of principal.

The views expressed in this material are the views of State Street Global
Advisors through the period ended 11/11/14 and are subject to change based on
market and other conditions.

Risk associated with equity investing include stock values which may fluctuate
in response to the activities of individual companies and general market and
economic conditions.

The information provided does not constitute investment advice and it should
not be relied on as such. It should not be considered a solicitation to buy or
an offer to sell a security. It does not take into account any investor's
particular investment objectives, strategies, tax status or investment
horizon. You should consult your tax and financial advisor. All material has
been obtained from sources believed to be reliable. There is no representation
or warranty as to the accuracy of the information and State Street shall have
no liability for decisions based on such information.

The whole or any part of this work may not be reproduced, copied or
transmitted or any of its contents disclosed to third parties without SSgA's
express written consent.

Australia: State Street Global Advisors, Australia, Limited (ABN 42 003 914
225) is the holder of an Australian Financial Services Licence (AFSL Number
238276). Registered office: Level 17, 420 George Street, Sydney, NSW 2000,
Australia Telephone: 612 9240-7600 o Facsimile: 612 9240-7611

Belgium: State Street Global Advisors Belgium, Office Park Nysdam, 92 Avenue
Reine Astrid, B-1310 La Hulpe, Belgium. Telephone: 32 2 663 2036, Facsimile:
32 2 672 2077. SSgA Belgium is a branch office of State Street Global Advisors
Limited. State Street Global Advisors Limited is authorised and regulated by
the Financial Conduct Authority in the United Kingdom.

Canada: State Street Global Advisors, Ltd., 770 Sherbrooke Street West,Suite
1200 Montreal, Quebec; H3A 1G130 Adelaide Street East Suite 500, Toronto,
Ontario M5C 3G6.

Dubai: State Street Bank and Trust Company (Representative Office), Boulevard
Plaza 1, 17th Floor, Office 1703 Near Dubai Mall & Burj Khalifa, P.O Box
26838, Dubai, United Arab Emirates. Telephone: 971 (0)4-4372800, Facsimile:
971 (0)4-4372818.

France: State Street Global Advisors France. Authorised and regulated by the
Autorité des Marchés Financiers. Registered with the Register of Commerce and
Companies of Nanterre under the number 412 052 680. Registered office:
Immeuble Défense Plaza, 23-25 rue Delariviére-Lefoullon, 92064 Paris La
Défense Cedex, France. Telephone: ( 33) 1 44 45 40 00. Facsimile: ( 33) 1 44
45 41 92.

Germany: State Street Global Advisors GmbH, Brienner Strasse 59, D-80333
Munich. Telephone 49 (0)89-55878-400. Facsimile 49 (0)89-55878-440.

Hong Kong: State Street Global Advisors Asia Limited, 68/F, Two International
Finance Centre, 8 Finance Street, Central, Hong Kong o Telephone: 852
2103-0288 o Facsimile: 852 2103-0200

Japan: State Street Global Advisors, Japan, 9-7-1 Akasaka, Minato-ku, Tokyo
Telephone 813-4530-7380 Financial Instruments Business Operator, Kanto Local
Financial Bureau (Kinsho #345) Japan Securities Investment Advisers
Association, Investment Trust Association, Japan Securities Dealers'

Ireland: State Street Global Advisors Ireland Limited is regulated by the
Central Bank of Ireland. Incorporated and registered in Ireland at Two Park
Place, Upper Hatch Street, Dublin 2. Registered number 145221. Member of the
Irish Association of Investment Managers.

Italy: State Street Global Advisors Italy, Sede Secondaria di Milano - Via dei
Bossi, 4 20121 Milan, Italy. Telephone: 39 02 32066 100, Facsimile: 39 02
32066 155. SSgA Italy is a branch office of State Street Global Advisors
Limited. State Street Global Advisors Limited is authorised and regulated by
the Financial Conduct Authority in the United Kingdom.

Netherlands: State Street Global Advisors Netherlands, Adam Smith Building,
Thomas Malthusstraat 1-3, 1066 JR Amsterdam, Netherlands. Telephone: 31 20
7085600, Facsimile 31 20 7085601. SSgA Netherlands is a branch office of State
Street Global Advisors Limited. State Street Global Advisors Limited is
authorised and regulated by the Financial Conduct Authority in the United

Singapore: State Street Global Advisors Singapore Limited, 168, Robinson Road,
#33-01 Capital Tower, Singapore 068912 (Company Reg. No: 200002719D) o
Telephone: 65 6826-7500 o Facsimile: 65 6826-7501

Switzerland: State Street Global Advisors AG, Beethovenstr. 19, CH-8027
Zurich. Telephone 41 (0)44 245 70 00. Facsimile Fax: 41 (0)44 245 70 16.

United Kingdom: United Kingdom: State Street Global Advisors Limited.
Authorised and regulated by the Financial Conduct Authority. Registered in
England. Registered No. 2509928. VAT No. 5776591 81. Registered office: 20
Churchill Place, Canary Wharf, London, E14 5HJ. Telephone: 020 3395 6000.
Facsimile: 020 3395 6350.

United States: State Street Global Advisors, One Lincoln Street, Boston, MA


2013 State Street Corporation - All Rights Reserved

Expiration Date: 12/04/14



State Street Corporation
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