Capital Markets: Observations & Insights

The Earnings Growth Resurgence Is Boosting Performance Performance

Total Return = Dividend Yield + EPS Growth +/- P/E Change

MSCI All Country World Index ex-USA

S&P 500

Dividend

EPS Growth*

P/E Change

Dividend

EPS Growth*

P/E Change

10% 15% 20% 25% 30% 35%

10% 15% 20% 25%

0% 5%

0% 5%

EPS Growth Reversal

-20% -15% -10% -5%

EPS Growth Reversal

-15% -10% -5%

Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17

Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17

12- Month Total Return:

12- Month Total Return:

1% 30% 19% 20% -1% 15% 19%

-10% 14% 21% 11% -1% 7% 20%

Source: FactSet as of 9/30/17. *Based on consensus estimates of next 12-month EPS. Actual earnings per share might be materially different than shown. MSCI ACWI ex-US performance based on local currency.

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