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COM+44(0)2038246020FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY'Brit-in'or'Brexit':HedginginTimesofGeopoliticalUncertainty2DisclaimerThisdocumentisissuedbyWisdomTreeEuropeLtd("WTE")anappointedrepresentativeofMirabellaAdvisorsLLP,whichisauthorisedandregulatedbytheUnitedKingdomFinancialConductAuthority("FCA").
TheproductsdiscussedinthisdocumentareissuedbyWisdomTreeIssuerPLC("Issuer"),anumbrellainvestmentcompanywithvariablecapitalhavingsegregatedliabilitybetweenitsfundsorganisedunderthelawsofIrelandasapubliclimitedcompanyandauthorisedbytheCentralBankofIreland("CBI").
TheIssuerisorganisedasanUndertakingforCollectiveInvestmentinTransferableSecurities("UCITS")underthelawsofIrelandandshallissueaseparateclassofshares("Shares")representingeachfund.
InvestorsshouldreadtheprospectusoftheIssuer("Prospectus")beforeinvestingandshouldrefertothesectionoftheProspectusentitled'RiskFactors'forfurtherdetailsofrisksassociatedwithaninvestmentintheShares.
AnydecisiontoinvestshouldbebasedontheinformationcontainedintheProspectus.
Thisproductmaynotbeavailableorsuitableforyou.
ThisdocumentdoesnotconstituteinvestmentadvicenoranofferforsalenorasolicitationofanoffertobuyShares.
Thisdocumentshouldnotbeusedasthebasisforanyinvestmentdecision.
ThepriceofanySharesmaygoupordownandaninvestormaynotgetbacktheamountinvested.
Pastperformanceisnotareliableindicatoroffutureperformance.
Anyhistoricalperformanceincludedinthisdocumentmaybebasedonbacktesting.
Backtestingistheprocessofevaluatinganinvestmentstrategybyapplyingittohistoricaldatatosimulatewhattheperformanceofsuchstrategywouldhavebeen.
Backtestedperformanceispurelyhypotheticalandisprovidedinthisdocumentsolelyforinformationalpurposes.
Backtesteddatadoesnotrepresentactualperformanceandshouldnotbeinterpretedasanindicationofactualorfutureperformance.
ThevalueoftheSharesmaybeaffectedbyexchangeratemovements.
ForUnitedKingdomInvestors:TheFundisarecognisedschemeundersection264oftheFinancialServicesandMarketsAct2000andsotheProspectusmaybedistributedtoinvestorsintheUnitedKingdom.
CopiesofalldocumentsareavailableintheUnitedKingdomfromwww.
wisdomtree.
com.
WithintheUnitedKingdom,thisdocumentisonlymadeavailabletoprofessionalclientsandeligiblecounterpartiesasdefinedbytheFCA.
UndernocircumstancesshouldthisdocumentbeforwardedtoanyoneintheUnitedKingdomwhoisnotaprofessionalclientoreligiblecounterpartyasdefinedbytheFCA.
Thisdocumentisnot,andundernocircumstancesistobeconstruedas,anadvertisementoranyotherstepinfurtheranceofapublicofferingofsharesintheUnitedStatesoranyprovinceorterritorythereof,wherenoneoftheIssuerortheSharesareauthorisedorregisteredfordistributionandwherenoprospectusoftheIssuerhasbeenfiledwithanysecuritiescommissionorregulatoryauthority.
Neitherthisdocumentnoranycopyhereofshouldbetaken,transmittedordistributed(directlyorindirectly)intotheUnitedStates.
NeithertheIssuernoranysecuritiesissuedbyithavebeenorwillberegisteredundertheUnitedStatesSecuritiesActof1933ortheInvestmentCompanyActof1940orqualifiedunderanyapplicablestatesecuritiesstatutes.
3ContentsWhatarethepollssayingUKMacroFundamentalsEurozoneMacroFundamentalsCurrentInvestorSentimentHowtohedgeusingS&LETPsPositioningandAssetAllocation4'Brit-in'vs'Brexit':WhatdoeseachsidestandforFORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLYStay–'Brit-in'Leave–'Brexit'TradeandEconomyAccesstosinglemarketiskeyforBritain'seconomyNoclarityonwhatpost-BrexittradewouldlooklikereliesmoreontheEUfortradethanvice-versaBritainhastheabilitytonegotiatefavourabletradedealswithoutbeingapartoftheEUEUrepresentsadecliningtrademarketfortheUKNorwayandSwitzerlandareexamplesofhowUKcanstillmaintaintradeoutsideofEUImmigrationNeteffectofimmigrationhasbeenundoubtedlypositiveBritainneedsskilledandunskilledlabourthattheEUprovidesLeavingtheEUwillnotstopimmigrationMigrantsputadditionalpressureonalreadystrainedpublicservicesandhousingImmigrationisoutofcontrolandBrexitisneededsoBritaincanregaincontrolofitsbordersCostBritain'snetcontributionisonly8.
5billion(afterrebatesandEUspending)MembershiptotheEUisexpensivewithBritain'scontributionat18billionayearSovereigntyReferendumisproofthatUKhasnotlostsovereigntyImportantlawsandpoliciesarestillsetbytheBritishgovernmentBritainhasforfeiteditssovereigntyanddemocracyasanEUmemberUKcanretainitsinfluencewithoutbeingamemberRegulationMuchofEUregulationmakeslifeeasierandsaferEUalsoguaranteesequalrightsandlabourstandardsEUover-regulationisaburdentoUKbusinessesUKbusinesseswillthriveoncefreedfromunnecessarybureaucraticinterventionSecurityBritainisstrongerworkingwiththeEUintacklingrisingpoliticaltensionsSharingofintelligencewithEUisincreasinglyimportantOpenborderpreventsUKfromcheckingandcontrollingpeopleLeavingEUisunlikelytoweakendiplomaticrelationswithothercountries5Neck-and-neckracewillhingeonvoterturnoutSource:WisdomTreeEurope,FT,WhatUKThinks,IpsosMori.
Dataasof31/05/2016FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY0%10%20%30%40%50%60%70%80%18-2425-3435-4445-5455-6465+VoterAgeGroupUnlockingyoungvoteswillbekeyVoterParticipationbyagegroupatpreviouselections20012005201020150%10%20%30%40%50%60%70%May15Aug15Nov15Feb16May16Pollsaretooclosetocall!
PollingResultssinceMay2015Stay%Leave%Undecided%6051015202530354045500.
00.
20.
40.
60.
81.
01.
21.
41.
61.
82.
01990Q41992Q11993Q21994Q31995Q41997Q11998Q21999Q32000Q42002Q12003Q22004Q32005Q42007Q12008Q22009Q32010Q42012Q12013Q22014Q3%oftotaltrillionHoldingsofUKgiltsbyinvestortypeAmountsoutstandingand%foreignheldOverseasHoldings(RestofWorld)OtherBanksandBoE%oftotal(exclQE)SterlingAssetsAtRisk:whenforeigncapitalstopsfundingUK'stwindeficitSource:WisdomTreeEurope,DebtManagementOffice,ONS.
9095100105110115120125130135-25-20-15-10-505101520200720082009201020112012201320142015Trade-weightedIndexofBritishpoundcurrentaccountandCapitalflows,%ofGDPForeigninvestmentintoUKsustainsterlingUKCapitalflowsvstrade-weightedsterlingNetDirectInvestmentsCurrentAccountBalanceNetPortfolioInvestmentNetOtherInvestmentGBPTWI(RHS)FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY7SterlingAssetsAtRisk:whenforeigncapitalstopsfundingUK'stradedeficitSource:WisdomTreeEurope,ONS,Bloomberg-8-7-6-5-4-3-2-101234-40-35-30-25-20-15-10-505101520200720082009201020112012201320142015%ogGDPinGBPbnUKtradewithEUCurrentaccountbalanceas%ofGDP(RHS)CAbalanceofServicestoEUCAbalanceofexportsofGoodstoEU-8-6-4-2024-40-35-30-25-20-15-10-505101520200720082009201020112012201320142015%ofGDPinGBPbnUKtradewithnon-EUCurrentaccountbalanceas%ofGDP(RHS)CAbalanceofServicestonon-EUCAbalanceofGoodstonon-EUSource:WisdomTreeEurope,ONS,BloombergFORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY8UKhouseholdstovotewiththeirpocketshardearnedrestorationofincomeandjobsSource:WisdomTreeEurope,Bloomberg.
34567899092949698100102200820092010201120122013201420152016Unemploymentrate(%)Realtotalpay,indexUKvoters,areyoureadyforuncertaintyPrivatesectorwagesandunemploymentUnemploymentrate(RHS)Privatesectoravg.
weeklyearnings(excl.
bonuses,real)FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY9Eurozone'srebalancingact:structuralshiftfinallycontributingtocyclical-ledgrowth+5.
0%-303691215201020112012201320142015EurozoneGDPCumulativecontribution(inpercentagepoint)NetexportsStockbuildingInvestmentHouseholdconsumptionGovernmentconsumptionGDP+12.
5%-303691215201020112012201320142015USGDPCumulativecontribution(inpercentagepoint)Source:WisdomTreeEurope,Bloomberg.
Dataasat31March2016FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY10-10-8-6-4-2024-10-8-6-4-202420082009201020112012201320142015Eurozonejobsmarketrecoveryis3yearsbehindtheUS…Cumulativechangeinemployment(inM)since2008US(Nonfarmpayrolls)Eurozone(ECBHHlabourforcesurvey)-20%-15%-10%-5%0%5%10%20092010201120122013201420152016…butbroadeningoutintoFR&ITUnitlabourcostsrelativetoGermanyFranceItalyPortugalGreeceSpainEurozonestructuralrecovery:productivitygainsarestartingtoturnjobsmarketaroundEurozone:approximately4yearsbehindtheUS'sstructuralrecoveryBroadbasedrebounddependsonfasterlabourmarketreforminItalyandFranceSource:WisdomTreeEurope,Bloomberg.
Dataasat31March2016USjobs:+4Maddedsince2008Source:WisdomTreeEurope,Bloomberg.
Dataasat31October2015Eurozonejobs:-3Mlostsince2008FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY11SMEs:cheapercreditrestoresbusinessconfidenceSource:WisdomTreeEurope,Bloomberg.
Dataasat26February2016FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY50556065707580852007H12007H22008H12008H22009H12009H22010H12010H22011H12011H22012H12012H22013H12013H22014H12014H22015H12015H22016H1SmallbusinessrecoverybroadeningoutEUCraftandSMEBarometer>70isexpansion;<70iscontractionNorthCompositeSouth1234567-20-15-10-505101520Jun2011Sep2011Dec2011Mar2012Jun2012Sep2012Dec2012Mar2013Jun2013Sep2013Dec2013Mar2014Jun2014Sep2014Dec2014Mar2015Jun2015Sep2015Dec2015Interestrate(%)Newbusinessvolume(%chy/y)BankloanstoEurozonesmallbusinessesbankloans<=EUR250K,LHS:Newbusinessvolume(%chy/y);RHS:interestrate(%)Eurozone(LHS)PortugalSpainItalyGermanyFranceSource:WisdomTreeEurope,Bloomberg.
Dataasat26February201612FXmarketsnervousasinvestorscontinuepilingintoGoldSource:WisdomTreeEurope,Bloomberg.
Pastperformanceisnotindicativeoffuturereturns.
FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY4006008001,0001,2001,4001,6001,8002,000-15-10-505101520062007200820092010201120122013201420152016Gold(USD/toz.
)GoldETCfundflows(USDBnpermonth)GoldPricevsGoldETCfundflowsGoldETCflows(USDM,3mrolling)GoldETCflows(USDM,m-o-m)(Gold,USD/toz.
RHS)024681012141618202010201120122013201420152016PressureonPoundandEuroaheadofEUreferendumImpliedvolatility(%)GBPUSD3MATMOptionVolatilityEURUSD3MATMOptionVolatility13Brexitandmarketsentiment:FlowsofEuropean-domiciledfundsSourcesofallcharts:WisdomTreeEurope,Morningstar.
Mutualfundflowsasof29February2016;ETFflowsasof31March2016.
*Excludingfundsoffundsandfeederfunds.
Pastperformanceisnotindicativeoffuturereturns.
Mutualfunds*Cumulativeflows(EURbn)UKEquitiesUKFixedIncomeGBPMoneyMarketsETFs*Cumulativeflows(EURbn)-11234Jan15Apr15Jul15Oct15Jan16Apr16-10123Jan15Apr15Jul15Oct15Jan16Apr16-16-14-12-10-8-6-4-202Jan15Apr15Jul15Oct15Jan16Apr16-16-14-12-10-8-6-4-202Jan15Apr15Jul15Oct15Jan16Apr16-10-50510152025Jan15Apr15Jul15Oct15Jan16Apr16FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY14-12%-10%-8%-6%-4%-2%0%2%4%-30-28-26-24-22-20-18-16-14-12-10-8-6-4-2024681012141618202224262830GrexitFears30dayspreandpostGreece'yesornovoteonTroikabailouttermsMajorevents10YGilts10YBundEUROSTOXX50FTSE10025May:GreekPMrejectsbailout,threatenstodefault11June:IMFwalksoutfrombailouttalks26June:GreekPMannouncesreferendumonbailoutterms3July:Referendumheld:Greeksvotenotobailoutterms7July:Deadlineforbailouttermsextended20July:GreekBanksreopen27July:Troikaresumesnegotiations14August:GreeceacceptsTroikabailouttermsBrexitandmarketsentiment,preandpost:Grexitisour'best'guideforrisk-off/onpositioningSource:WisdomTreeEurope,TheDailyTelegraph.
FORPROFESSIONALCLIENTSANDSOPHISTICATEDINVESTORSONLY15DisclaimerThisdocumentisissuedbyWisdomTreeEuropeLtd("WTE")anappointedrepresentativeofMirabellaAdvisersLLP,whichisauthorisedandregulatedbytheUnitedKingdomFinancialConductAuthority("FCA").
TheproductsdiscussedinthisdocumentareissuedbyWisdomTreeIssuerPLC("Issuer"),anumbrellainvestmentcompanywithvariablecapitalhavingsegregatedliabilitybetweenitsfundsorganisedunderthelawsofIrelandasapubliclimitedcompanyandauthorisedbytheCentralBankofIreland("CBI").
TheIssuerisorganisedasanUndertakingforCollectiveInvestmentinTransferableSecurities("UCITS")underthelawsofIrelandandshallissueaseparateclassofshares("Shares")representingeachfund.
InvestorsshouldreadtheprospectusoftheIssuer("Prospectus")beforeinvestingandshouldrefertothesectionoftheProspectusentitled'RiskFactors'forfurtherdetailsofrisksassociatedwithaninvestmentintheShares.
AnydecisiontoinvestshouldbebasedontheinformationcontainedintheProspectus.
Thisproductmaynotbeavailableorsuitableforyou.
ThisdocumentdoesnotconstituteinvestmentadvicenoranofferforsalenorasolicitationofanoffertobuyShares.
Thisdocumentshouldnotbeusedasthebasisforanyinvestmentdecision.
ThepriceofanySharesmaygoupordownandaninvestormaynotgetbacktheamountinvested.
Pastperformanceisnotareliableindicatoroffutureperformance.
Anyhistoricalperformanceincludedinthisdocumentmaybebasedonbacktesting.
Backtestingistheprocessofevaluatinganinvestmentstrategybyapplyingittohistoricaldatatosimulatewhattheperformanceofsuchstrategywouldhavebeen.
Backtestedperformanceispurelyhypotheticalandisprovidedinthisdocumentsolelyforinformationalpurposes.
Backtesteddatadoesnotrepresentactualperformanceandshouldnotbeinterpretedasanindicationofactualorfutureperformance.
ThevalueoftheSharesmaybeaffectedbyexchangeratemovements.
ForUnitedKingdomInvestors:TheFundisarecognisedschemeundersection264oftheFinancialServicesandMarketsAct2000andsotheProspectusmaybedistributedtoinvestorsintheUnitedKingdom.
CopiesofalldocumentsareavailableintheUnitedKingdomfromwww.
wisdomtree.
com.
WithintheUnitedKingdom,thisdocumentisonlymadeavailabletoprofessionalclientsandeligiblecounterpartiesasdefinedbytheFCA.
UndernocircumstancesshouldthisdocumentbeforwardedtoanyoneintheUnitedKingdomwhoisnotaprofessionalclientoreligiblecounterpartyasdefinedbytheFCA.
Thisdocumentisnot,andundernocircumstancesistobeconstruedas,anadvertisementoranyotherstepinfurtheranceofapublicofferingofsharesintheUnitedStatesoranyprovinceorterritorythereof,wherenoneoftheIssuerortheSharesareauthorisedorregisteredfordistributionandwherenoprospectusoftheIssuerhasbeenfiledwithanysecuritiescommissionorregulatoryauthority.
Neitherthisdocumentnoranycopyhereofshouldbetaken,transmittedordistributed(directlyorindirectly)intotheUnitedStates.
NeithertheIssuernoranysecuritiesissuedbyithavebeenorwillberegisteredundertheUnitedStatesSecuritiesActof1933ortheInvestmentCompanyActof1940orqualifiedunderanyapplicablestatesecuritiesstatutes.