Germany remains the driver of European growth and has proven to be a resilient force throughout the crisis. With (i) the eurozone exiting recession in the second quarter of this year, and (ii) developed market growth now charting an upward trajectory, Germany stands to benefit significantly via its export channel. Below we outline the case for hedged German equity exposure and briefly discuss its macroeconomic backdrop:

• Germany is the largest economy in the European Monetary Union (EMU), representing 31% of total EMU GDP
in the first half of 20131

• German exports constitute over 30%2 of the EMU’s total exports, and its exports have doubled from 49.9
billion euros in August 2003 to 93.4 billion euros in July 20133

• Forward-looking sentiment and activity indicators point toward improving economic activity in Germany4

• Germany’s gross domestic product (GDP) growth has been resilient, despite the eurozone crisis, dipping
briefly into negative territory in the fourth quarter of 2012, but quickly recovering in the first half of 2013

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