IPREO REGIONAL FLOW OF FUNDS SERIES

Western Europe

Telecommunications

Q4 2017

Flow of Funds: WEU Telecommunications

Market Overview

Ownership by Investor Region vs Issuer Region Ownership by Investor Style vs Issuer Region

Institutional Investment Flow Highlights

• Western European equities fared well in Q4 2017, as they have across the last 18 months, as business confidence was renewed and political risk largely faded. • However Telecommunications returned to negative territory in Q4 2017, posting sales of -$241M, despite the improvement in the global picture of the Eurozone's

economy. Brad Sorensen commented in the Charles Schwab Sector View in February 2018 that, "We have seen that periods of outperformance have been short-lived, however, as the downside of that increase in demand is the onslaught of competition. As telecom businesses compete for increasingly budget-conscious consumers, pricing power has declined". The sector is currently driven by intense competition as a result of cost effecient ways of communicating which continues to enter the market, posing threats to traditional proccesses and norms.

• The sector saw net outflows of -$241M in the fourth quarter with the bulk of this activity driven by Western European based investors. WEU Telecommunications outflows occured due to "... profit taking after after this years's gain and a stronger euro were in part to blame for the downward move ", according to Scroders Quartely markets review - Q4 2017.

• Germanic and Spanish Telecommunications experienced the largest portion of divestment, with those in Germany (-$858M) sold by active investors and Spain (-$577M) sold by passive investors.

• Deutsche Telekom was the most sold German stock with disposals of -$611M. According to managers of the Threadneedle Global Equity Income Fund in January 2018, Deutsche Telekom "Underperformed along with the broader telecommunications space; as a bond proxy, the telecoms sector came under pressure as bond yields rose in January. For Deutsche Telekom, investors also had some concerns about the impact of the weak dollar, given the company’s US exposure in the form of its T-Mobile subsidiary"

• WEU investors turned bearish (-$948M) after registering net buying in the preceding three quarters. This is in line with the wider WEU market activity were WEU investors sold WEU equities in general. Growth investor Carmignac Gestion features as the top seller across WEU in general and particluarly as number one seller of Telecommunication stocks.

• Over the past year, North American investors have shown consistent demand for WEU Telecommunications, however at a far decreased level in Q4 compared to preceding quarters. North American institutions makes up nine of top 20 buyers of WEU Telecommucations, driven by Brandes Investment Partners (+$265M) and Capital Research (+$258). Brandes' Investment 2017 performance return report indicated that, "From a sector perspective, consumer discretionary, specifically the automotive and retail-oriented industries, remains an area where we have found value potential, along with the telecommunication services sector".

• Value was the dominant investment style in Q4-17 in both ownership and buying activity, this is no surprise considering that 9 of the top buyers and 9 of the top holders for the period are Value-orientated, led by French Amundi Asset Management (+$747) and Germany-based Deutsche Assset Management (+$318). Ownership by style in WEU Telecommunications is overall very much in line with the proportional style ownership accross WEU as a whole. Growth, GARP, Speciality and Alternative are slightly lower against the benchmark to the advantage of Value investors.

• The split between Active and Passive investment is closely aligned with the rest of WEU, with a slight overweight in Active holdings by 1.9 percentage points.

©2018 Ipreo. All rights reserved. None of Ipreo, its affiliates, or any of their third party providers is liable for any informational errors, incompleteness, or delays, or for any actions or decisions taken by any person as a result of any information contained herein.

-1,500.0

-1,000.0

-500.0

0.0

500.0

1,000.0

1,500.0

2,000.0

N. America W. Europe Scandinavia UK & Ireland Asia Rest ofWorld

Other

Net Change ($M) by Region

Q1-17 Q2-17 Q3-17 Q4-17

-1,500.0

-1,000.0

-500.0

0.0

500.0

1,000.0

1,500.0

2,000.0

AggGr./Growth

DeepVal./Value

Index GARP Specialty Yield Alternative

Net Change ($M) by Style

Q1-17 Q2-17 Q3-17 Q4-17

WEU

E. Europe 0.1%

Rest of World 0.6%

MENA 1.2%

Asia 0.9%

Scandinavia 16.4%

UK & Ireland 15.3%

W. Europe 28.3%

N. America 37.2%

WEU Telecommunications

E. Europe 0.1%

Rest of World 0.6%

MENA 0.0%

Asia 0.9%

Scandinavia 20.0%

UK & Ireland 14.9%

W. Europe 30.4%

N. America 33.1%

WEU Telecommunications

Alternative 1.8%

Yield 2.2%

Specialty 0.5%

GARP 5.1%

Index 19.2%

Deep Val./Value 40.2%

Agg Gr./Growth 31.0%

WEU

Alternative 3.0%

Yield 2.5%

Specialty 1.1%

GARP 6.1%

Index 17.7%

Deep Val./Value 36.8%

Agg Gr./Growth 32.8%

Flow of Funds: WEU Telecommunications

Most Bought & Sold Stocks

©2018 Ipreo. All rights reserved. None of Ipreo, its affiliates, or any of their third party providers is liable for any informational errors, incompleteness, or delays, or for any actions or decisions taken by any person as a result of any information contained herein.

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Q4-16 Q1-17 Q2-17 Q3-17 Q4-17

Active vs. Passive Investment (% Chg)

Active Passive

77.5% 75.6%

22.5% 24.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

WEU Telecommunications WEU

Ownership by Orientation vs Issuer Region

Active Passive

-1,000.0 -500.0 0.0 500.0 1,000.0

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Italy

Luxembourg

Netherlands

Norway

Portugal

Spain

Sweden

Switzerland

Most Bought & Sold Countries - Active Investors

-800.0 -600.0 -400.0 -200.0 0.0 200.0

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Italy

Luxembourg

Netherlands

Norway

Portugal

Spain

Sweden

Switzerland

Most Bought & Sold Countries - Passive Investors

Country / City

Total Equity

Assets ($M)

Value

($M)

Activity

($M)

#

Firms Country / City

Total Equity

Assets ($M)

Value

($M)

Activity

($M)

#

Firms

United Kingdom (London) 2,994,205.9 24,472.8 89.4 171 France (Paris) 606,074.4 23,487.1 -831.6 172

France (Paris) 606,074.4 23,487.1 -831.6 172 United Kingdom (London) 2,994,205.9 24,472.8 89.4 171

Sweden (Stockholm) 461,552.6 17,381.0 245.1 74 United States (New York) 3,642,399.0 8,404.7 69.1 147

United States (San Francisco) 2,838,361.6 11,621.6 391.7 26 Spain (Madrid) 77,824.9 2,772.9 45.3 78

Norway (Oslo) 721,075.7 10,951.1 -26.2 21 Sweden (Stockholm) 461,552.6 17,381.0 245.1 74

United States (Malvern) 2,956,980.4 8,752.0 219.9 1 Germany (Frankfurt) 373,724.9 8,667.6 -111.5 51

Germany (Frankfurt) 373,724.9 8,667.6 -111.5 51 Finland (Helsinki) 80,166.4 4,097.6 66.9 50

United States (New York) 3,642,399.0 8,404.7 69.1 147 Luxembourg (Luxembourg) 49,401.0 734.4 -16.7 48

United States (Boston) 4,368,538.0 6,633.7 93.8 44 Switzerland (Zürich) 382,022.1 3,250.0 43.8 45

Finland (Helsinki) 80,166.4 4,097.6 66.9 50 United States (Boston) 4,368,538.0 6,633.7 93.8 44

United States (Los Angeles) 1,300,803.4 3,436.6 -117.0 14 Canada (Toronto) 864,477.4 2,126.2 -40.8 41

Germany (Munich) 92,226.5 3,378.3 -7.4 24 United States (Chicago) 838,885.2 1,023.3 -46.7 38

Switzerland (Zürich) 382,022.1 3,250.0 43.8 45 Switzerland (Geneva) 124,222.5 1,041.9 -102.5 36

Spain (Madrid) 77,824.9 2,772.9 45.3 78 Japan (Tokyo) 969,818.2 435.1 -1.6 31

United States (Austin) 467,788.5 2,294.4 75.0 8 Italy (Milan) 75,661.5 1,842.0 -26.2 30

Includes Active & Passive Investors 139,601.1 246.4 926 Includes Active & Passive Investors 106,370.1 -524.0 1,056

Top Invested Cities

MO

ST IN

VES

TED

MO

ST IN

VES

TOR

S

Security Country Change $M

Koninklijke KPN N.V. Netherlands 454.0

Ericsson (L.M.) Telephone Co. Sweden 440.5

Orange SA France 352.6

Nokia Oyj Finland 325.8

Telia Company AB Sweden 256.4

Telecom Italia S.p.A. Italy 226.8

SES S.A. Luxembourg 149.8

VEON Ltd. Netherlands 88.3

United Internet AG Germany 77.3

Másmovil Ibercom, SA Spain 50.6

Includes Active & Passive Investors 2,422.0

BOU

GH

T

Security Country Change $M

Altice N.V. Netherlands -782.0

Deutsche Telekom AG Germany -610.6

Telenor ASA Norway -351.2

freenet AG Germany -175.3

Eutelsat Communications Group SA France -172.2

Tele2 AB Sweden -130.2

TomTom N.V. Netherlands -108.1

Garmin Ltd Switzerland -99.9

SFR Group SA France -96.5

TDC A/S Denmark -81.0

Includes Active & Passive Investors -2,607.1

SOLD

Flow of Funds: WEU Telecommunications

Top Active & Passive Holders, Buyers & Sellers

©2018 Ipreo. All rights reserved. None of Ipreo, its affiliates, or any of their third party providers is liable for any informational errors, incompleteness, or delays, or for any actions or decisions taken by any person as a result of any information contained herein.

Firm Country Style Turnover Equity Assets ($M) Value ($M) Change ($M) % Portfolio % Portfolio Chg

The Vanguard Group, Inc. P United States Index Low 2,956,980.4 8,752.0 219.9 0.3% 2.6%

Norges Bank Investment Management (Norway) SWF Norway Value Low 655,044.7 7,371.8 11.0 1.1% 0.1%

BlackRock Fund Advisors P United States Index Low 2,009,789.0 6,850.5 215.5 0.3% 3.2%

Bpifrance Participations S.A. SWF France Growth Low 12,106.2 5,843.4 0.0 48.3% 0.0%

Investment AB Kinnevik (Investment Management) Sweden Deep Value Low 9,806.0 4,420.5 0.0 45.1% 0.0%

BlackRock Advisors (U.K.), LTD P United Kingdom Index Low 153,842.6 3,057.0 10.7 2.0% 0.4%

Amundi Asset Management S.A. France Value Medium 91,691.7 2,932.4 747.1 3.2% 34.2%

Dodge & Cox United States Value Low 189,923.6 2,864.1 208.4 1.5% 7.8%

Lyxor Asset Management SAS P France Index High 73,943.0 2,795.3 -577.8 3.8% -17.1%

Deutsche Asset Management Investment GmbH Germany Value Low 121,866.5 2,664.1 317.5 2.2% 13.5%

BlackRock Asset Management (Deutschland) AG P Germany Index Low 58,110.9 2,405.3 -10.5 4.1% -0.4%

Allianz Global Investors GmbH Germany Growth Low 85,215.4 2,348.1 -171.8 2.8% -6.8%

Dimensional Fund Advisors, L.P. (U.S.) P United States Value Low 417,076.7 2,241.6 72.0 0.5% 3.3%

State Street Global Advisors (SSgA) P United States Index Low 1,322,360.3 2,062.8 -38.7 0.2% -1.8%

Folketrygdfondet Norway Growth Low 17,190.9 1,901.4 121.7 11.1% 6.8%

INVESCO Asset Management, LTD (U.K.) United Kingdom Value Low 81,330.4 1,867.4 88.5 2.3% 5.0%

DNCA Finance S.A. France Deep Value Low 18,262.5 1,691.3 17.5 9.3% 1.0%

Cevian Capital AB Sweden Value Low 15,557.9 1,624.2 207.7 10.4% 14.7%

Schroder Investment Management, LTD United Kingdom GARP Medium 128,938.5 1,618.1 -106.0 1.3% -6.1%

Franklin Mutual Advisers, LLC United States Value Low 54,141.8 1,537.3 -569.9 2.8% -27.0%

66,848.6 762.8

Firm Country Style Turnover Equity Assets ($M) Value ($M) Change ($M) % Portfolio % Portfolio Chg

Amundi Asset Management S.A. France Value Medium 91,691.7 2,932.4 747.1 3.2% 34.2%

Deutsche Asset Management Investment GmbH Germany Value Low 121,866.5 2,664.1 317.5 2.2% 13.5%

Elo Mutual Pension Insurance Company Finland Growth Low 5,716.5 573.8 288.3 10.0% 101.0%

Brandes Investment Partners, L.P. United States Deep Value Medium 17,089.2 830.2 264.6 4.9% 46.8%

Capital Research Global Investors (U.S.) United States GARP Low 478,004.7 1,020.6 258.3 0.2% 33.9%

Aviva Investors Global Services, LTD (U.K.) United Kingdom Growth Low 51,532.5 491.2 226.4 1.0% 85.5%

The Vanguard Group, Inc. P United States Index Low 2,956,980.4 8,752.0 219.9 0.3% 2.6%

BlackRock Fund Advisors P United States Index Low 2,009,789.0 6,850.5 215.5 0.3% 3.2%

Dodge & Cox United States Value Low 189,923.6 2,864.1 208.4 1.5% 7.8%

Cevian Capital AB Sweden Value Low 15,557.9 1,624.2 207.7 10.4% 14.7%

J.P. Morgan Asset Management (UK), LTD United Kingdom Growth Medium 122,775.0 1,088.4 181.2 0.9% 20.0%

Northern Cross, LLC United States Value Low 29,796.6 328.2 172.2 1.1% 110.3%

SEB Investment Management AB Sweden Value Medium 40,217.3 1,170.4 154.2 2.9% 15.2%

OppenheimerFunds, Inc United States Growth Medium 167,882.0 1,304.3 141.2 0.8% 12.1%

Folketrygdfondet Norway Growth Low 17,190.9 1,901.4 121.7 11.1% 6.8%

Danske Capital AB (Sweden) Sweden Deep Value High 5,028.5 203.0 117.9 4.0% 138.7%

Primecap Management Company United States Growth Low 133,367.2 1,262.3 112.3 0.9% 9.8%

BlackRock Investment Management (U.K.), LTD United Kingdom Growth Low 397,715.8 1,416.7 102.1 0.4% 7.8%

INVESCO Asset Management, LTD (U.K.) United Kingdom Value Low 81,330.4 1,867.4 88.5 2.3% 5.0%

Artisan Partners, L.P. United States Growth Medium 100,210.3 684.2 86.0 0.7% 14.4%

39,829.3 4,231.1

Firm Country Style Turnover Equity Assets ($M) Value ($M) Change ($M) % Portfolio % Portfolio Chg

Carmignac Gestion France Growth Medium 22,004.2 - -929.1 0.0% Buy-in

Lyxor Asset Management SAS P France Index High 73,943.0 2,795.3 -577.8 3.8% -17.1%

Franklin Mutual Advisers, LLC United States Value Low 54,141.8 1,537.3 -569.9 2.8% -27.0%

Capital World Investors (U.S.) United States Value Low 710,393.8 1,192.4 -299.8 0.2% -20.1%

Deutsche Asset Management (UK), LTD P United Kingdom Index Very High 20,649.1 577.1 -285.2 2.8% -33.1%

Deka Investment GmbH Germany Value Low 51,139.0 1,435.8 -180.9 2.8% -11.2%

Swedbank Robur Fonder AB Sweden Growth Low 83,137.3 1,337.9 -177.1 1.6% -11.7%

Allianz Global Investors GmbH Germany Growth Low 85,215.4 2,348.1 -171.8 2.8% -6.8%

Thornburg Investment Management, Inc. United States GARP Medium 30,371.5 1,042.3 -157.2 3.4% -13.1%

Cyrte Investments BV Netherlands Growth Unknown 27.4 0.0 -125.7 0.0% -100.0%

Union Investment Privatfonds GmbH Germany GARP Medium 52,546.8 643.5 -118.7 1.2% -15.6%

Handelsbanken Asset Management (Sweden) Sweden Value Low 41,053.4 966.4 -112.2 2.4% -10.4%

KLP Kapitalforvaltning AS Norway Value Low 15,026.3 314.4 -111.7 2.1% -26.2%

Capfi Delen Asset Management Belgium Growth Low 15,095.6 478.1 -106.4 3.2% -18.2%

Schroder Investment Management, LTD United Kingdom GARP Medium 128,938.5 1,618.1 -106.0 1.3% -6.1%

BNY Mellon Asset Management North America CorporationP United States Index Low 203,421.6 996.7 -104.6 0.5% -9.5%

Unigestion Asset Management Switzerland Alternative Medium 6,867.2 136.4 -93.5 2.0% -40.7%

Pyrford International, LTD United Kingdom Growth Low 3,210.7 54.7 -91.3 1.7% -62.5%

State Street Global Advisors, LTD P United Kingdom Index Low 108,405.4 1,010.6 -87.4 0.9% -8.0%

Lazard Asset Management Pacific Company Australia GARP Low 8,048.2 502.5 -86.8 6.2% -14.7%

Includes Investors with EUM greater than $100M. 18,987.6 -4,493.0

SWF - Sovereign Wealth Fund; HF - Hedge Fund/Alternative; P - Passive Investor

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Flow of Funds: WEU Telecommunications

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