April PRUDENTIAL INTERNATIONAL INVESTMENTS ADVISERS, LLC. Global Investment Outlook & Strategy

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1 PRUDENTIAL INTERNATIONAL INVESTMENTS ADVISERS, LLC. Global Investment Outlook & Strategy April 2015 Stocks to Stabilize & Post Gains with Further Rate Cuts & Easing Measures, ECB s QE, Gradual, Modest Fed Rate Hikes, Improving GDP Growth & Valuation Support. Earnings Outlook Mixed Bond Yields likely to Rise Modestly with Improving GDP Growth, Expensive valuation, Fed & BoE Rate Hikes John Praveen, PhD Chief Investment Strategist John Praveen s Global Investment Outlook for April 2015 expects stocks to stabilize and post gains with further rate cuts & easing measure s in China & other economies, ECB s QE buying, Fed on modest rate hike path, improving global growth and valuation support. However, the earnings outlook is mixed with the U.S. facing strong dollar headwinds, while Eurozone and Japan enjoy weak Euro and Yen tailwinds. Stocks: Stock markets were mixed in March, after rallying in February, with continued gains in Eurozone (3.8%) and Japan (2.3%) on fresh QE stimulus and weak currency tailwinds for earnings and exports. U.S. stocks struggled in March (-0.8%) with strong dollar headwinds to corporate earnings and uncertainty ahead of the Fed meeting on March As of March 30 th, developed markets are up 0.2% MTD, 5.3% YTD, while emerging markets are down -0.5% MTD, but up 4% YTD. Looking ahead, we expect stock markets to stabilize and post further gains driven by: 1) Interest rate and liquidity support with further rate cuts and easing measures in China and by other emerging and developed central banks, the ECB s 1.14 trillion QE buying program, the Fed on a gradual, modest rate hike path, and the BoJ likely to expand QE; 2) Global GDP growth remains on track to modest improvement in 2015 with strengthening GDP growth in Eurozone, Japan and Asian emerging economies and U.S. GDP set to rebound after the weather-distorted weakness in Q1; 3) Continued valuations support as stocks remain cheap relative to bonds; 4) However, the earnings outlook is mixed with weak currency tailwinds in Eurozone and Japan, while the U.S. faces strong dollar headwinds. Bonds: Bond yields rose in February as oil prices stabilized, stocks rebounded, uncertainty about Fed rate hikes and reduced safe haven demand. Yields fell back in March with the ECB starting QE buying and the Fed signaling that rate hikes are likely to be gradual and modest. FOR MORE INFORMATION CONTACT: Theresa Miller Phone: theresa.miller@ prudential.com Looking ahead, bond yields are likely to rise, modestly, with upward pressure from: 1) Improving GDP growth in Eurozone, Japan and Asian emerging economies. While U.S. Q1 GDP is likely to be weak with cold weather effects, GDP growth is expected to rebound after the soft Q1; 2) The Fed and BoE on track to start raising rates. While the Fed has assured that rate hikes are likely to be modest, there continues to be uncertainty about the timing and pace of rate hikes; 3) Bond valuations remain expensive relative to stocks with yields still below 2014 year-end levels. However, the rise in bond yields is likely to be limited by: 1) Low headline inflation in Eurozone (-0.1%), U.S. (0%) and U.K. (0%); and 2) ECB s QE buying, fresh rate cuts by several central banks, and Fed rate hikes likely to be modest. 1 *Prudential International Investments Advisers, LLC. ( PIIA) is a business of Prudential Financial, Inc., (PFI), w hich is not affiliated in any manner w ith Prudential plc, a company headquartered in the United Kingdom. For informational use only. Not intended as investment advice. See Disclosures on the last page for important information.

2 Market Outlook: Stocks to Stabilize & Remain in Uptrend with Further Rate Cuts & Easing Measures, ECB s QE, Modest Fed Rate Hikes, Improving GDP Growth & Valuation Support. Earnings Outlook Mixed with Weak Currency Tail-winds in Eurozone & Japan and & Strong Dollar Headwinds in U.S. Bond Yields likely to Rise Modestly with Improving GDP Growth, Expensive valuation, Fed & BoE on Track to Raise Rates Stock Market Outlook (April): Global stock markets were mixed in March with continued gains in Eurozone (3.8%) and Japan (2.3%), while U.S. stocks declined (-0.8%) amidst increased volatility. Eurozone stocks continued to post gains as the ECB started its 1.14 trillion QE buying program in early March. Further, the ECB revised up growth forecasts to reflect improving macro environment, lower oil prices and weaker Euro. Eurozone and Japanese stocks also got a boost from weak currency tailwinds for their earnings and exports. U.S. stocks struggled in March with strong dollar headwinds to corporate earnings and exports, and anxiety ahead of the Fed meeting on March Stocks enjoyed a brief relief rally after the Fed signaled that it is in no hurry to start raising interest rates and that rate hikes are likely to be modest and gradual. Emerging markets were dragged lower by fresh uncertainty in Greece and Russia and a sell-off in the Middle East with another leg-down in oil prices. As of March 30 th, developed markets are up 0.2% MTD, 5.3% YTD, while emerging markets are down -0.5% MTD, but up 4% YTD. Earlier, stock markets rallied in February with rate cuts and easing measures by several emerging and developed central banks. Fears of Grexit eased with the newly-elected Tsipras government reaching a short-term agreement with Eurozone finance ministers. Risk also eased with Russia signing a cease fire agreement with Ukraine. The developed markets index (MSCI World) gained 5.7% (LC) in February, while emerging market stocks rose 3.2% (LC). Looking ahead, we expect global stock markets to stabilize from the March volatility and post gains with further rate cuts and easing measures in China and by other central bank s, ECB s aggressive QE buying, the Fed on a gradual, modest rate hike path, improving global growth and valuation support with stock s cheap relative to bonds and still below long-term averages. The earnings outlook, however, is mixed as Eurozone, Japan and Emerging Markets enjoy weak currency tailwinds while U.S. earnings and exports face strong dollar headwinds. 1) Fresh Liquidity Measures & Further Interest Rate Cuts: Financial markets remain supported by liquidity and low interest rates with further interest rate cuts and easing measures likely in China and other developed and emerging economies. Earlier in March, there were rate cuts and stimulus measures in China, India, Korea, Poland, Russia, Turkey and several other emerging markets. In response to weak Chinese growth data, PBoC Governor Zhou Xiaochuan indicated that China has room to act with both interest rates and quantitative measures, in remarks at an investment forum in late March. In early March, the ECB started its 1.14 trillion QE buying program, while Denmark and Sweden cut rates further to prevent their currencies from strengthening against the plunging Euro. The BoJ remains on hold for now but is likely to expand QE buying with inflation undershooting and to help the yen keep pace with the weak Euro. Rate hikes by the BoE have been pushed out to late 2015 with falling inflation and slowing growth momentum. The U.S. Federal Reserve signaled that it remains on track to hike rates in 2015 by dropping the Patience language from its statement at the March meeting. However, Fed Chair Yellen clarified and reassured that removing the Patient term does not necessarily mean an automatic rate hike in June, but gives the Fed flexibility to raise rates in June or later as data unfolds. However, the Fed s task is made difficult as the steady decline in unemployment and solid job gains are offset by the sharp decline in inflation. Further complicating the Fed s task is deceleration in U.S. Q1 GDP with economic activity disrupted by heavy snowfall, West coast port closures, and the strong dollar taking a toll on exports. In a late March speech, Chair Yellen stressed that a significant pick-up in core inflation and/or wage growth was not a pre-condition for the Fed to start raising rates, confirming that rate hikes are likely to start in However, Yellen continued to reassure that the Fed expects rate rises to be gradual, around 100bps per year. 2 For informational use only. Not intended as investment advice.

3 The ECB started its 1.14 trillion QE buying program on March 9th with the ECB and the National Central Banks buying sovereign, agency & international institutions bonds with maturities between 2 and 30 years. The monthly purchases of 60bn of public & private sector bonds will continue to the end of September 2016 or until inflation is on a sustained path to the ECB s 2% target. President Draghi clarified that the ECB will buy bonds with negative yields but not below the ECB deposit rate (at -0.2% now) which is aimed to encourage banks to lend. Following the March ECB meeting, the Euro breached 1.10US$/ level for the first time since The Euro fell below 1.05US$/ by mid-march, before rebounding to around 1.08US$/. The Bank of Japan (BoJ) remained on hold in March and made no changes to its asset purchase policy. However, the bank is likely to further increase its QE asset purchases program in the next few months with inflation expectations likely to be revised lower and with other central banks adopting easing measures. In the U.K., with low inflation and slower growth momentum, BoE rate hikes have been pushed out into late In the Emerging Markets, the People s Bank of China (PBoC) cut policy rates by 25 bps in early March, eased housing market regulation in late March and appears ready to implement fresh stimulus measures. The Reserve Bank of India (RBI) surprised markets with another inter-meeting rate cut in early March, immediately after the government of India presented the national budget to Parliament on February 28. The Bank of Korea, the National Bank of Poland (NBP), the Central Bank of Russia (CBR) and the Central Bank of Turkey (CBT) all cut rates in March. 2) Global Growth on Track to Modest Recovery in Early 2015: Global GDP growth remains on track to strengthen in early 2015 as improving GDP growth in Eurozone, Japan and Asian emerging economies is likely to offset the weather-distorted weakness in U.S. Q1 GDP growth. The sharp decline in oil and commodity prices, the ECB starting its QE buying program, further rate cuts and easing measures by several developed and emerging central banks, and weaker currencies are all expected to boost GDP growth in Eurozone, Japan and the Asian emerging economies. The Eurozone economy remains on a modest, but steady growth path in 2015 after posting an upside growth surprise in Q4. Eurozone GDP is on track to grow around 1.5% annualized pace in Q1 with ECB s QE liquidity, weak Euro and lower oil prices. Japanese GDP growth appears to be soft in Q1 but is on track to strengthen in Q2 and beyond with a boost from the Abe fiscal stimulus package, postponement of the 2015 tax hike, lower energy prices, fresh BoJ stimulus, and further decline in the yen supporting exports. The U.S. economy remains solid but Q1 GDP growth is on track to decelerate to around 1% as economic activity was disrupted by heavy snowfall in the North East, port closures on the West coast, and the strong dollar taking a toll on exports. GDP growth in India, Taiwan, Korea and Indonesia is on track to strengthen wit h fresh interest rate cuts, lower oil and commodity prices and weaker currencies. Chinese growth was soft in March, but the PBoC is likely to cut rates further and undertake fresh stimulus measures to keep GDP growth stable around 7%. India s GDP is on track to strengthen with rate cuts and increased infrastructure spending. However, growth in Latin America and Emerging Europe is likely to remain weak with GDP declining in Brazil and Russia. Brazil s economy continues to struggle with further rate hikes, fiscal tightening, Petrobras scandal uncertainty depressing investment spending and increased risk of electricity rationing with poor rainfall. Russia s economy continues to weaken amidst an environment of high inflation, weak commodity prices and economic sanctions and GDP is on track to contract around -4% in ) U.S. Q4 Earnings Better than Expected but 2015 Outlook Mixed with Dollar Headwinds for U.S., Eurozone & Japanese Earnings Supported by Weak Currency tailwinds: Global earnings growth expectations have been further revised lower to 3% for 2015 after around 7% growth in Earnings growth for the U.S. has been revised further down to 2% for 2015 after around 8% growth in 2014 with strong dollar headwinds. Eurozone and Japanese earnings are enjoying weak currency tailwinds and improving growth outlook. Eurozone earnings are expected to rise around 9% after 6% in 2014, while Japanese earnings expectations remain solid, around 11%. Emerging Markets earnings growth is expected to improve modestly to 5% from 3% in 2014 while U.K. earnings have been revised down further to -8%. 3 For informational use only. Not intended as investment advice.

4 4) Stock Market Multiples Rise in February with Equity Market Gains, Stock s Still Cheap Relative to Bonds as Yields remain Low: Stocks remain cheap relative to bonds with bond yields remaining low, despite nudging higher in February. The earnings yield gap (EYG) between U.S. stocks and bonds narrowed as the earnings yield on U.S. stocks fell to 5.3% in February (from 5.6% in January) while the 10-year Treasury yield rose to 1.99% in February (from 1.64% in January). The yield gap between U.S. stocks-bonds declined to 3.34% from 3.98% in January, but the yield gap still remains above the long-term average yield gap of 1.1% (20-year average). Eurozone stocks remain cheap relative to bonds on EYG basis but the yield gap narrowed to 3.9% from 4.2% in January as the earnings yield on Eurozone stocks fell to 4.2% from 4.5% in January while the 10-year Bund yield remained steady at 0.30%. The Eurozone EYG remains well above a long-term average of 3.4% (10-year average). Japanese stock-bond EYG fell to 5.5% from 6% in January but remains well above the long-term average of 3.9%. Stock market P/E multiples rose during February with both developed and emerging market stock s posting solid gains for the month but remain below long-term averages. The P/E multiple for developed markets rose to 18.8X in February but remains below the long-term average of 21.2X. Emerging Markets P/E multiple rose to 13.9X but remains well below long term (20-year) average of 15.3X. Bottom-line: Global stock markets were mixed in March with continued gains in Eurozone (3.8%) and Japan (2.3%) with QE stimulus and weak currency tailwinds for their earnings and exports. U.S. stocks fell in March (-0.8%) with strong dollar headwinds to corporate earnings and uncertainty ahead of the Fed meeting on March A s of March 30 th, developed markets are up 0.2% MTD, 5.3% YTD, while emerging markets are down -0.5% MTD, but up 4% YTD. Earlier, stock markets rallied in February with rate cuts and easing measures by several emerging and developed central banks, Fed rate hike expectation moving out to late 2015, stabilizing oil prices and easing fears of Grexit and a ceasefire agreement in Ukraine. Looking ahead, we expect global stock markets to remain in an uptrend in the near-term driven by: 1) Further rate cuts & liquidity measures in China and several developed and emerging economies, the Fed signaling that it is on a gradual, modest rate hike path, the ECB kicking-off its 1.14 trillion QE buying program, the BoJ likely to expand QE, and rate hikes by BoE pushed out into late 2015; 2) Global GDP growth remains on track to strengthen in early 2015 as improving GDP growth in Eurozone, Japan and Asian emerging economies is likely to offset the weather-distorted weakness in U.S. Q1 GDP growth. However, the U.S. economy remains solid and GDP growth is expected to rebound after the soft Q1 with solid consumer spending; 3) Earnings outlook is mixed with weak currency tailwinds in Eurozone, Japan and Emerging Markets while U.S. faces strong dollar headwinds: Global earnings growth expectations have been further revised lower to 3% for Earnings growth for the U.S. has been revised further down to 2% for 2015 with strong dollar headwinds. Eurozone and Japanese earnings are enjoying weak currency tailwinds and improving growth outlook. Eurozone earnings are expected to rise around 9% after 6% in 2014, while Japanese earnings growth expectations remain solid around 11%. Emerging Markets earnings growth is expected to improve modestly to 5% from 3% in 2014; 4) Continued valuations support as stock s remain cheap relative to bonds with bond yields remaining low: The earnings yield gap (EYG) between stocks and bonds narrowed in February with a fall in stocks earnings yields (on rising P/E multiples) but still remain wide with bond yields remaining well below 2014 year-end levels. Stock market P/E multiples rose during February with both developed and emerging market stocks posting solid gains for the month, but multiples remain below long-term averages. While stock s have recovered losses from late 2014/early 2015 sell-off and remain in an uptrend, market volatility is likely to remain elevated with: a) Strong dollar headwinds for U.S. earnings growth and exports; b) Currency market volatility as weakness in the Euro and Yen trigger another round of competitive devaluations; c) Oil prices continue to struggle and the destabilizing impact of another leg-down in oil prices renewing fears about weak global demand and deflation; d) Continued uncertainty about the timing of first Fed rate hike despite assurance that the Fed is in no hurry to raise rates and that rate hikes are likely to be modest; d) Fresh fears about Grexit as the agreement between Greece and Eurozone breakdown with Greece breaking the terms of the agreement through unilateral actions (increase spending etc); and e) Continued uncertainty in Ukraine with Russia violating the fragile ceasefire. 4 For informational use only. Not intended as investment advice.

5 Bond Market Outlook: Bond Yields likely to Rise Modestly with Improving GDP Growth, Expensive Valuations & Fed Rate Hike Expectations Global bond yields rose in February as oil prices stabilized, equity markets rebounded, and fresh uncertainty about the timing of Fed rate hikes. In addition, safe haven demand for U.S. Treasuries diminished as fears of Grexit eased and Russia signed a cease fire agreement with Ukraine. However, Eurozone and Japanese yields remain depressed due to the impact of central bank QE buying. EM bond yields declined as risk concerns decreased. After rising in February, bond yields fell back in March with the ECB starting QE buying on March 9th and the Fed signaling that it is in no hurry to start raising interest rates and that it is likely to be on a modest rate hike path. Looking ahead, bond yields are likely to rise, modestly, with upward pressure from: 1) Strengthening global growth with fresh liquidity and rate cuts, and the boost to consumer spending from the plunge in oil prices. Improving GDP growth in Eurozone, Japan and Asian emerging economies is likely to offset the weather-distorted weakness in U.S. Q1 GDP growth. Further the U.S. economy remains solid and GDP growth is expected to rebound after the soft Q1; 2) The Fed and BoE remain on track to start raising rates in While the Fed has assured that it is in no hurry to start rate hikes and that rate hikes are likely to be modest, there continues to be uncertainty about the timing and pace of rate hikes; 3) Bond valuations remain expensive relative to stocks with yields still below 2014 year-end levels. However, the rise in bond yields is likely to be limited by: 1) Low inflation as the plunge in oil prices has pushed headline inflation close to zero in Eurozone (-0.1%), U.S. (0%) and U.K. (0%); 2) ECB s QE buying, fresh rate cuts by several central banks, the BoJ likely to expand QE buying, and the Fed rate hikes likely to be gradual and modest. Investment Strategy: Asset Allocation: Stocks vs. Bonds - Keep Equity Overweight as Further Gains likely with Fresh Rate Cuts, ECB s QE, Fed on Gradual & Modest Rate Hike Path and Improving GDP Growth Stocks Maintain overweight as stock markets likely to remain in an uptrend with further rate cuts & easing measures, the ECB s QE buying, the Fed on a gradual & modest rate hike path, improving global growth and valuation support with stocks cheap relative to bonds and P/E multiples below long-term averages. The earnings outlook is mixed with weak currency tailwinds in Eurozone, Japan & Emg Mkts, and strong dollar headwinds in the U.S. Bonds Modest underweight as bond yields likely to rise modestly with improving GDP growth, expensive valuations, Fed and BoE on track to raise rates. Global Equity Strategy: Remain Overweight in Emerging Asia, Modest Overweight in Japan & Eurozone; Neutral in U.K.; Underweight U.S., Latin America & Emerging Europe Emerging Markets: Overweight in Emg Asia with improving growth, further rate cuts in China, India, Indonesia and other Asian markets; Underweight in Latin America & EM Europe with oil and commodity prices still struggling, Brazil GDP contracting, further rate hikes. Russia in deep recession. Japan: Remain Modest Overweight with GDP strengthening after weak Q4 and soft Q1, solid earnings with weak yen tailwinds, GPIF increased allocation to stocks. Eurozone: Remain Modest Overweight with ECB s aggressive QE, GDP growth improving further after Q4 rebound, solid earnings growth with weak Euro. U.K.: Remain Neutral as BoE set to hike rates but rate hikes delayed, weak earnings momentum with large energy sector. Uncertainty surrounds the general elections and the high likelihood of a hung parliament. 5 For informational use only. Not intended as investment advice.

6 U.S.: Remain Underweight mainly to fund overweight in EM Asia, Eurozone and Japan. U.S. earnings revised down further with strong dollar headwinds. Fed on track to raise rates but rate hikes likely to be gradual and modest. GDP growth rebound after weak Q1. Global Bond Market Strategy: Yields likely to Rise Modestly with Improving GDP Growth, Expensive valuation, Fed & BoE Rate Hikes Eurozone: Remain Overweight with ECB starting QE buying of sovereign & private debt, Eurozone inflation remains negative & GDP growth remains modest. EM Bonds: Neutral as improving GDP growth, rate cuts in India, China & other EM central banks offset by continued risks in Russia, Greece and Brazil. Japan JGBs: Remain Neutral as BoJ QE buying & potential expansion offset by strengthening GDP growth and GPIF AA shift to stocks & other risky assets. U.K. Gilts: Remain Neutral as BoE rate hikes pushed out to late 2015 with inflation down to 0.3%, GDP growth momentum slowing. U.S. Treasuries: Remain Modest Underweight as yields likely to rise with U.S. GDP growth rebound after weak Q1 & uncertainty about Fed s rate hikes. Global Sector Strategy: Overweight: Healthcare & Information Technology; Modest Overweight: Industrials & Financials; Neutral: Materials, Energy & Consumer Discretionary; Underweight: Utilities, Consumer Staples & Telecomms. Currency Strategy: Overweight: U.S. Dollar (GDP growth rebound after soft Q1 & Fed starts modest gradual rate hikes); Neutral: Emerging Market Currencie s (improving GDP growth & rate cuts in Asia, but Brazil & Russia continue to struggle) & Sterling (solid GDP growth but BoE rate hikes pushed out into mid-2015); Underweight: Euro (ECB QE, modest GDP growth, lingering Grexit fears & Ukraine uncertainty) & Japanese Yen (BoJ expanding QE stimulus, modest GDP growth & Fed rate hikes). Follow us on Twitter: Disclosures: Prudential International Investments Advisers, LLC. (PIIA), a Prudential Financial, Inc. (PFI) company, is an investment adviser registered w ith the Securities and Exchange Commission of the United States. Pramerica is a trade name used by PFI and its affiliated companies in select countries outside of the United States. PFI, a company incorporated and with its principal place of business in the United States of America is not affiliated in any manner w ith Prudential plc, a company headquartered in the United Kingdom. The commentary presented is for informational purposes only, and is not intended as investment advice. This material has been prepared by PIIA on the basis of publicly available information, internally developed data and other third party sources believed to be reliable. How ever, no assurances are provided regarding the reliability of such information. All opinions and views constitute judgments of PIIA as of the date of this writing, and are subject to change at any time w ithout notice. There can be no assurance that any forecast made herein w ill be realized. Distribution of this information to any person other than the person to whom it was originally delivered and to such person s advisers is unauthorized and no part of this material may be reproduced or distributed further without the written approval of PIIA. These materials are not intended for distribution to, or use by, any person in any jurisdiction where such distribution would be contrary to local law or regulation. The companies, securities, sectors and/or markets referenced herein are included solely for illustrative purposes to highlight the economic trends, conditions, and the investment process, but may or may not be held by accounts actually managed by PIIA. The strategies and asset allocations discussed do not refer to any service or product offered by PIIA or by its affiliates The global asset and strategy allocation models presented are hypothetical allocation models shown for illustrative purposes only, and do not necessarily reflect the management of any actual account. Follow ing the allocation recommendations presented will not necessarily result in profitable investments. Past performance is not an assurance of future results. Nothing herein should be viewed as investment advice to adopt any investment strategy, nor should it be considered an offer to provide investment advisory or other allocation services Prudential Financial, Inc. and it related entities. Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and it related entities, registered in many jurisdictions worldw ide. 6 For informational use only. Not intended as investment advice.