CIO Insights Resilience versus recession Glossary NextGenerationEU (NGEU) is a major EU recovery plan, based around grants and loans, running from 2021-2023. It aims to make Europe greener, more digital, more resilient and more able to adapt to current and future challenges. The non-exempt members of OPEC are Iran, Libya and Nigeria and they are not subject to the OPEC+ production agreement. NTM stands for next twelve months in the context of earnings and thus price/earnings ratios. The Organization of the Petroleum Exporting Countries (OPEC) is an international organisation which aims to "coordinate and unify the petroleum policies" of its 12 members. The so-called "OPEC+" brings in Russia and other producers. Price/book (P/B) ratios measure a company's share price relative to its tangible assets. Price/earnings (P/E) ratios measure a company's current share price relative to its past or expected future earnings per share. Real rates adjust changes of value for factors such as inflation. The Recovery and Resilience Facility (RRF) is a key instrument of the NextGenerationEU recovery plan, financing reforms and investments in EU members from the start of the pandemic in February 2020 until the end of 2026. REPowerEU is a European Commission plan that aims to achieve complete EU energy independence from Russia well before 2030 by saving energy, producing clean energy and diversifying Europe’s energy supplies. Risk premia refer to the return in excess of the risk-free rate of return that an investment is expected to yield. It is a form of compensation to investors for tolerating the extra risk. The S&P 500 Index includes 500 leading U.S. companies capturing approximately 80% coverage of available U.S. market capitalization. The Stoxx Europe 600 is a broad-based index that tracks the performance of 600 companies of various sizes from 17 European countries. The United Nations Sustainable Development Goals, finalised in 2015, comprise 17 sustainable development goals and 169 targets. The Swiss Market Index (SMI) includes 20 large and mid-cap stocks. A spread is the difference in the quoted return on two investments, most commonly used when comparing bond yields. A strategic asset allocation process involves setting preferred allocations for asset classes on a medium to long-term time horizon. The TAPAs (there are plenty of alternatives) argument is that, with bond yields higher, there are alternatives to equities for investors seeking yield. The TINA (there is no alternative) argument has been much used in recent years for investing in equities, in the belief that they are likely to offer relatively attractive returns. The Transmission Protection Instrument unveiled by the ECB in July is a new bond purchase scheme aimed at helping more indebted Eurozone countries and preventing financial fragmentation within the currency bloc by ensuring the smooth transmission of the ECB’s monetary policy stance. Treasuries are bonds issued by the U.S. government. In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Performance refers to a nominal value based on price gains/losses and does not take into account inflation. Inflation will have a negative impact on the purchasing power of this nominal monetary value. Depending on the current level of inflation, this may lead to a real loss in value, even if the nominal performance of the investment is positive. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. This document was produced in December 2022. 41