What's inside Economic and market forecasts .............................page 4 Global economy .............................................page 6 • We expect a recession in early 2023, recovery by midyear, and a rebound that gains strength into year-end. Nevertheless, full-year U.S. economic growth and inflation targets may reflect mostly the recession. • Dollar strength early in the year should flatten and partially reverse its upward trajectory, as slowing inflation and Federal Reserve (Fed) interest-rate cuts in the second half of 2023 remove a key source of support. Global equities ...............................................page 9 • We expect earnings to decline in 2023 but see equity market gains as investors anticipate a late-2023 to 2024 recovery. • We favor U.S. large-cap and U.S. mid-cap equities over international equities and remain tilted toward quality and defensive sectors. Our positioning will likely shift to more cyclical in 2023 as we anticipate the eventual recovery. Global fixed income .......................................page 13 • We expect U.S. Treasury yields to decline in 2023 as we go through an economic recession and in anticipation of policy rate cuts from the Fed. • We believe increasing exposure in long-term fixed income and extending duration may provide an advantage before considering lower credit exposure. Global real assets ..........................................page 16 • We expect commodities to perform well in 2023, especially energy-related commodities and equities and high-quality master limited partnerships (MLPs). • We expect real estate investment trusts (REITs) to underperform equity markets but see some value in the Self-storage, Retail, and Data Centers sub-sectors. Global alternative investments* ..........................page 18 • We believe Relative Value and Macro hedge funds can provide solutions for equity and credit market diversification, as well as real yield, for the near future. • We anticipate selective opportunities in Private Equity. Top five portfolio ideas for 2023 ..........................page 20 * Alternative investments are not appropriate for all investors and are only open to “accredited investors” or “qualified investors” within the meaning of the U.S. securities laws. They are speculative, highly illiquid, and designed for long-term investment and not as trading vehicles. Please see pages 25–27 for important definitions and risk considerations. 2023 Outlook | 3