Each December, we review the Outlook we presented a year earlier. In 2019 our predictions proved to be sound. Overall, with two judged ‘partly correct – a half mark’ we scored 9/10.
Moz Afzal Global Chief
Stefan Gerlach Chief Economist
Daniel Murray Deputy CIO and
Global Head of Research
Global growth continues; no recession in US or other developed economies
We expected that global gross domestic product (GDP) growth would continue in 2019 and that
the US and other developed economies would not head into recession. Some countries were
close to recession – notably the UK and Germany – but it was avoided. So, once again, the global
Trump: all out for growth
We expected President Trump to do all he could to stimulate US growth, but recognising the limits to what could be done we thought “the emphasis will be on the maintenance of growth”.
In particular, we thought his criticism of the Fed would lead to “interest rates not rising as far
and as quickly” as the market was expecting in late 2018. That, indeed, proved to be the case, with previous rate increases reversed from July 2019 onwards.
3 Partly correct
Emerging markets recover
We thought emerging markets would grow faster than developed markets in 2019, which they did. However, they did not grow as fast as in 2018. According to IMF estimates, GDP growth in emerging markets was 3.9% in 2019, weaker than the 4.5% recorded in 2018. However, emerging market bonds did well in the year (with a total return of 12.3% in the year to 13 December 2019). Emerging market equities, however, underperformed developed markets (total returns of 15.6% compared to 26.2%, in the year
to 13 December 2019)*.
*Sources. Emerging Market Bond returns: Bloomberg Barclays EM USD Aggregate Total Return Index;
Equity Market Returns MSCI World and Emerging Market indices in US$ Total Return terms.
US industrial sector favoured
We thought that the US industrial sector of the equity market in late 2018 was pricing in a recession in the US economy. As that seemed very unlikeIy to us, it was our favoured US equity market sector. The sector did outperform the broad market and was the third best performing of the ten economic sectors, after IT and telecomms.
Real rates stabilise or fall
We thought that the rise in real interest rates in the US, measured by the yield on Treasury Inflation-Protected Securities (TIPS), would “stabilise or maybe even fall”. The real yield on 10-year TIPS fell from 1% at the end of 2018 to just 0.12% on 13 December 2019.
Value in US corporate bonds
We thought that US investment grade corporate debt offered good value and would produce positive returns in 2019. Indeed, the sector produced very good returns: 15% in total return terms in the year to 13 December on the basis of the ICE BofAML US BBB Corporate Bond Index.
We thought that sterling would rebound against the US dollar as Brexit uncertainty receded.
It took longer than we expected but sterling made gains – from US$1.27/£ at the end of 2018
to US$1.33/£ on 13 December 2019.
8 Partly correct
We thought the healthcare sector was ripe for disruption, particularly with the development of new types of digital technology and that the trend would be seen first in the US. We said we were “actively seeking ways of gaining exposure” to innovative companies using digital technology. Although the healthcare sector underperformed the S&P 500 index, the healthcare equipment sector, which is focussed on disruptor companies did well, slightly outperforming the S&P 500 index.
Europe: another crisis averted
We thought that the latest crisis – centred on Italy – would ease. We expected concerns about Italy’s credit standing to recede and that “the yield spread between Italian and German government bonds should narrow”. That did, indeed, happen: Italian 10-year yields fell from 3% in late 2018 to just over 1% in late 2019, with the yield spread over Germany almost halving from 300 to 150 basis points.
China-US cold war
We thought that tensions between the US and China could ease to some extent in 2019, but that there was very unlikely to be a big reduction in China’s trade surplus with the US. Longer-term,
we expected China would pivot towards the rest of Asia. China’s trade surplus with the US did narrow
a little but its overall trade surplus expanded significantly.
Workers catch up
The gap between CEO pay (their pay is often linked to their company’s share price) and that of ordinary workers may not narrow much in 2020. But pressures in many countries will be for higher wages for normal workers.
Around the world, the pay of ordinary workers has lagged in two clear ways. A catch-up is long overdue.
First, the pay of ordinary workers in many countries has not kept pace with the rising cost of living. That is clearly seen in the US, for example: in real terms the minimum wage is almost half what it was in the late 1960s (see Figure 1a). In the UK, there is broad support for increases in the minimum wage and, recognising that this is still low, for a ‘living wage’ especially in (expensive) London.
In emerging economies, where their competitiveness often relies on low pay rates, wages will increasingly
catch up as productivity and living standards rise.
Second, the gap between the pay of normal workers and CEOs is more than ten times wider than it was in the 1960s. Much of that difference is accounted for by CEO pay having a large component dependent on their employer’s stock market performance (demonstrated by its high volatility, see Figure 1b).
Although we do not expect CEOs to sacrifice their generous packages, policy makers in many economies will act to start closing the income gap.1
Increasing wages may have some impact on corporate profit margins, but we do not think the threat is great. With many economies operating
close to full capacity wage increases can more easily be passed on in selling prices.
1Measuring the extent of the pay gap is not straightforward. The measure used in Figure 1b uses stock options realised, not granted. The Economist, 28 November 2019, has a useful briefing on the matter. www.economist.com
Global growth continues; world trade recovers
We see global growth continuing at a reasonable pace
(just over 3%) in 2020.2 This will be helped by a recovery
in world trade, after stagnation in 2019. Some economies, notably the eurozone, will be on the brink of recession
but, even there, it will be avoided.
We see the US economic expansion reaching its eleventh anniversary in summer 2020. It will be the longest expansion since records began in 1854.3 It will comfortably exceed previous records: the 120-month long expansion (from March 1991 to March 2001) and the 106-month expansion (from February 1961 to December 1969).
Yet, one important reason for its long duration is that it has been subdued.
The UK expansion has been even more subdued but has now lasted as long as that in the US. The eurozone and Japanese expansions are positively youthful in comparison (see Figure 2a).
Fears of a US recession were widely cited in 2019. Leading indicators of such a dip, especially the slope of the yield curve, were closely, indeed somewhat obsessively, watched in financial markets. That nervousness will continue, even though we think
it is a misplaced worry.
The main reason is that shrinking world trade was one of the main causes of a slowdown in world
GDP growth in 2019 (see Figure 2b).
That, we think, will rebound as the
first phase of a China-US trade deal and other less-well noticed trade deals move ahead.
These include the RCEP, Regional Comprehensive Economic Partnership, in Asia; the AfCFTA, African Continental Free Trade Agreement.
We think that attention will start to shift from US-China relations to trade deals that help the more open economies, especially as the world evolves into regional trading blocs.
Furthermore, outside the US, especially in emerging economies, interest rates have come down;
and greater fiscal stimulus is being seen in many economies.
2At Purchasing Power Parity exchange rates; that is broadly in line with the IMF’s October 2019 forecast of 3.4%. 3 Source: NBER. www.nber.org
Green light for
A big theme for 2020 will be more spending on green initiatives. Tackling climate change will move to the
top of the agenda around the world.
The realisation that action on climate change is needed is rapidly moving into the mainstream. It will be a key theme of 2020. Acceptance of the fact that greenhouse gas emissions cause global warming and that these need to be curbed will become (almost) universally accepted.
Without substantial mitigation of greenhouse gas emissions, global temperatures are projected to rise
by 4°C above pre-industrial levels by 2100 (they have already increased by 1°C since 1900). Emissions of greenhouse gases will need to be cut significantly if global warming is to be restricted to 1.5-2.0°C (see Figure 3a).
Carbon dioxide (CO2) emissions from burning fossil fuels account for almost two-thirds of global greenhouse gas emissions (see Figure 3b) and are the most immediately practical to control.
A switch from fossil fuels to solar and wind energy; investment in carbon capture and storage technologies; and a phasing out of subsidies on fossil fuels will be the key elements. The latter amount to as much as US$5trillion (6% of global GDP) and
are largest in emerging economies.
We think that Europe will be at the forefront of this green move in 2020.
Austerity is over
Austerity, restrictions on government spending, will be over
in 2020. The emphasis will be on more, not less, spending.
But don’t expect too much: after years of belt-tightening, caution will be in order.
After the financial crisis of 2008/9,
as recessions set in and banks were bailed out, government spending
(see Figure 4) and budget deficits ballooned. Bringing these deficits
back under control became the emphasis around the world. ‘Austerity’ was the new mantra.
Although it was expressed in different ways – from Germany’s ‘black zero’ to eliminating the deficit in the UK to troika-imposed measures in the eurozone – austerity meant essentially the same thing everywhere: a reduction in government spending and, often, tax increases.
Those measures have been, by and large, successful in cutting government deficits. But the US notably abandoned austerity policies in 2017/8, with large tax cuts and increased government spending. The government fiscal deficit is now running at US$1 trillion a year, similar to that in the 2012 fiscal year.
Other countries are now set to follow. Improvements in public services, increased pay for public sector workers and variations on the theme of a Green New Deal (see next section) will be the key trends.
In Germany, the change of leadership of the SPD increases the likelihood of a material shift towards deficit and off-balance sheet financed green investment at the national and
EU level in coming years. Japan has recently launched a substantial new infrastructure spending plan.
In the UK, more spending on the
health service and infrastructure
are key aspects of the new government’s plans.
Announced extra spending plans include: €54bn in Germany on emissions reduction; £34bn a year in the UK on the National Health Service; and ¥26 trillion in Japan (expected to boost GDP by 1.4 percentage points).
Fixed income: capital preservation is key
The major developed world central banks are set to keep interest rates at or below their current levels in 2020.
That will make for a tough environment for fixed income markets in the developed world. Investment grade
corporate bonds offer one of the safest places.
Frozen 2, one of the box-office hits of the winter, could well describe the predicament of central banks in 2020. Their interest rates first hit zero or sub-zero in the aftermath of the global financial crisis. After a few attempts to break away, notably by the Fed, were dashed, rates are set to be frozen again in 2020.
Growth is simply not strong enough and inflation pressures not sufficiently intense for anything else to be seriously contemplated. We see the Fed, ECB, Bank of Japan and Swiss National Bank leaving their policy rates on hold in 2020. The Bank of England may raise rates if economic dismay turns to over-exuberance after a successful Brexit; but that is more Disney fantasy than likely reality. All this makes for a tricky environment for fixed income investors.
German government bond yields along the maturity spectrum remain negative; UK 10-year gilt yields are not much above recent multi-century lows; and in this environment US 10-year Treasury yields of almost 2% look somewhat generous.
There are opportunities for yield pick-up in, for example, investment grade corporate bonds (see Figure 5). Yield spreads over Treasuries could compress a little, generating capital gains, making this one of the best areas on a risk-adjusted return basis. But, overall, 2020 will be a tricky year for developed market fixed income.
Value in emerging
We see value in emerging market local currency debt.
With subdued inflation and the US dollar stable, emerging market interest rates can be cut further in 2020. This should set the scene for local currency-denominated debt to do well.
In contrast to the main developed markets, where there are limited prospects for further interest rate cuts and lower bond yields, emerging markets are in a much better position.
Inflation rates continue to trend down across emerging economies (see Figure 6a) and this means there is a domestic case for lowering interest rates. That has not been the case in all emerging market countries – as the particular problems of Argentina and Turkey demonstrate – but most emerging economies are now on a relatively
firm footing as far as domestic growth and inflation are concerned.
A key risk to investing in emerging market local currency debt in the
past has been local currency weakness, often as a result of generalised US dollar strength. With the US dollar generally highly valued, however, we think that is less of a risk in current circumstances.
Two other key factors lend support to emerging market local currency debt. First, corporate debt levels have generally been reduced relative to
GDP in recent years, so this risk of excess leverage is much lower, we think, than in the past.
Second, there is a broader recognition of the risks associated with borrowing in foreign rather than local currency. Such foreign currency borrowing proved to be a particular problem in Argentina and Turkey in their recent crises. Local currency borrowing will now, we think, be favoured – giving such markets more depth, breadth and investability. So, after a good year for emerging market local currency returns in 2019 (see Figure 6b), we
see another solid year in 2020.
We like the bank sector. It has historically offered a high dividend yield; it has been out of favour for a long time;
but its post-crisis repair is now well-advanced. Cost cutting and the move from branch-based activity to online platforms could start to bring rewards.
The bank sector has been under pressure for many years (see Figure 7a). Financial innovation has seen the rise of challenger banks with new technology; many banks have been slow to rid their balance sheets of
the bad loans of the crisis era;
and a public dislike of banks has
been slow to clear.
That seems to us to be changing. Mainstream banks are now, in many cases, very effectively using new digital platforms to bring big benefits to their retail customers. That enables branch networks to be pruned, generating cost savings. And more aggressive balance sheet adjustment – writing down the bad loans of the crisis era – is now coming to the banks who were laggards in this process. In 2020, European banks will be allowed to buy back their equity and we see a number of banks being
quick to do this.
In emerging markets, banks have often been tainted by the woes of their developed world counterparts, but their business case remains strong.
Generally, bank profit margins are improving (see Figure 7b). So, after many years of underperformance of the wider global equity market, we think the bank sector is due for a catch-up in 2020.
Small caps recover
Small cap companies are due a catch-up. In the US, the sector has lagged large caps in four out of the last five years.
Much of the work on long-term stock market returns has identified a ‘small cap’ premium. That is, such companies produce excess returns, largely in compensation for their higher risk. However, such ‘factor premia’ have a disturbing tendency to vanish once identified. In the US, small caps have underperformed large caps in four of the last five years (see Figure 8a).4
This has meant that the gap between the market capitalisation of large cap and small cap companies has widened siginificantly (see Figure 8b).
Stronger gains have been made in the large cap S&P 500 index than in the small cap Russell 2000 index.
The difference between the two indices is significant: the median market capitalisation of companies in the S&P 500 is US$23bn with two companies (Apple and Microsoft) valued at over US$1tr.
The largest market capitalisation
in the Russell 2000 is US$16bn,
with a median value of US$800m.
The S&P 500 is heavily weighted in the technology sector, while the Russell 2000 is more heavily weighted in financial services. Within sectors, however, the performance of big and small companies can diverge sharply: large cap technology stocks have recently produced better returns than small cap companies, for example.
There are four main reasons why we think this gap in performance is due to reverse, with small caps doing better.
First, big technology companies are increasingly being scrutinised with
the result that their business models may not be as sustainable in the future. Their valuations may suffer
if this realisation takes hold.
Second, there is every reason to think that innovation will still be a strong feature of small cap companies:
after all, today’s large cap tech companies started out small (stereotypically ‘in a garage’).
Third, societal and environmental changes mean that big cap
companies often attract widespread criticism, including pressure for divestment. Companies that are ‘boutique’, ‘specialist’, ‘independent’ and offer ‘hand-crafted’ products
are the preferred choice of the millennial generation. Small, for
many, is still beautiful.
Finally, we think small cap companies could well be the target of the large amount of ‘dry powder’ accumulated by private equity companies, which has proved difficult to employ in non-listed companies. Small cap companies could well be the ‘new private equity’.
4 See FTSE Russell, “What have you done with my small cap premium?” 6 June 2019. www.ftserussell.com
After three and a half years of Brexit uncertainty, we see the UK as set for a rebound. Sterling is cheap, the UK equity market has been out of favour and gilts offer a reasonable yield.
Sterling, the UK equity market and UK property have all been, very much, out of favour since the referendum vote in favour of Brexit in June 2016.
Finally, we think, the fog about the
UK’s future relationship with the EU will lift in 2020. A formal Brexit will,
we think, take place at the end of January. If the UK and EU can find a satisfactory way of working together to iron out the technical complexities which remain to be settled, attitudes
to the UK could well change significantly by the end of 2020.
Sterling remains undervalued (see Figure 9a) and could well recover to the US$1.35-1.40 rate. UK equities are cheaply valued, both in an absolute sense and relative to government bonds – where the gap between equity and bond yields is higher than at any time since World War 2.
Aligned with the previous theme- favouring small caps - UK small cap companies are also cheaply valued relative to large cap companies (on a forward price/earnings multiple of 11, compared to 12.5 for large caps).5
5Source: Factset, as at 6 December 2019.
A tripolar world
Although the trade war between the US and China will continue, the world is evolving towards a tripolar arrangement. That trend will become clearer in 2020.
Late 2019 saw the prospect of a
‘Phase 1’ of a trade deal between the US and China appear tantalisingly close; fade away; and then finally be agreed before new tariffs were due to be imposed on 15 December (see Figure 10a). That pattern, of course has been characteristic of the negotiations for some time.
The reality is that US tariffs on China and China’s retaliatory tariffs on the US are unlikely to be completely reversed. Furthermore, the risk to China’s industries from erratic changes in tariffs has contributed to ‘de-Americanisation’ – an increasingly heard (albeit ugly) word in late 2019.
It has a number of aspects. Asian economies, notably China, are now seeking out local suppliers as an alternative to American companies. Japanese companies, for example,
may well be suitable alternative suppliers in the electronics industry. And Beijing has ordered Chinese companies to remove their foreign
(not just American) PCs and software within three years.
We think these are just the first signs of the emergence of a tripolar world: North America with its (relatively free) trading bloc – the USMCA (the ‘new NAFTA’); Europe, anchored by the EU and eurozone; and Asia, dominated by China and now extending its influence across Eurasia and, indeed, further.
These changes will benefit some economies – exports from Vietnam, for example, are booming – but the more important point is that there is a fundamental change in the pattern of world trade and growth taking place.
Term in full
European Central Bank
The ECB is the central bank for Europe's single currency, the euro. The euro area comprises the 19 European Union countries that have introduced the euro since 1999.
Exchange Traded Fund
An ETF is an investment fund traded on a stock exchange. ETFs are typically passively managed to track a particular stock or bond market index or sector.
Gross Domestic Product
GDP is the monetary value of all the nal goods and services produced within a country’s borders in a speci c time period. GDP is usually calculated on a quarterly basis.
Organisation for Economic Co-operation and Development
A group of 35 member countries, including many of the world’s advanced countries but also emerging countries such as Mexico, Chile and Turkey. The members of the group work together to discuss and develop economic, social and environmental policies.
QE is an unconventional form of monetary policy where a central bank creates new money to buy nancial assets, like government bonds. This process aims to directly increase private sector spending in the economy and return in ation to target.
State Owned Enterprises
Enterprises where the state has signi cant control through full, majority or signi cant minority ownership.
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"Subprocessor" means any Data Processor appointed by the EFG Group, which may include an affiliate.
Generally, we collect, handle, process, store, use and transport your Personal Data and Sensitive Personal Data for the purposes of (1) providing the products and services that you have requested (including where you have requested products and services from multiple EFG Group companies), (2) administering your account(s) and mandates, (3) administering and maintaining your electronic communications with us (e-mail, fax and telephone), (4) identifying and offering suitable products and services (as you may request from time to time), (5) managing risk on a local and consolidated basis, (6) meeting requests or demands for information from authorities or third-parties, (7) meeting applicable legal and regulatory requirements, (8) and endeavoring to adhere to industry best practices (the “General Processing Purposes”). Your request for products or services that necessitates us processing your Personal Data in order to perform our contract with you (or that necessitates us processing your Personal Data before entering into such contract) is our primary legal ground for the General Processing Purposes. However, there may be circumstances where we also rely on other valid legal grounds for the General Processing Purposes. These include your express consent in the case of administering and maintaining electronic communications and any accounts you hold with us, our legitimate interests as a business (except where such interests are overridden by your interests or rights) in the case of our adherence to industry best practice, or our compliance with a legal obligation in the case of meeting requests from information from authorities.
We destroy documents and information that may contain your Personal Data and Sensitive Personal Data in accordance with our record retention policies that apply to specific types of records. These are subject to periodic review. However, as a general principle, we will retain your Personal Data until your last use or purchase of our products and services and for a minimum period of 5 years thereafter, unless longer retention is required by applicable local law or where we have a legitimate and lawful purpose to do so. Notwithstanding the foregoing, unless you indicate in writing to the contrary, we reserve the right to destroy documents containing your Personal Data immediately upon your last use or purchase of our products and services.
EFG Group companies may also use your Personal Data or Sensitive Personal Data to (1) confirm your identity, reputation, educational background, and source of funds; (2) to improve service levels being provided to you; (3) to administer our business; (4) to maintain our records; (5) to communicate with you (including sending alerts, notifications, updates, content or information); (6) to conduct analysis and better understand client behaviors on a statistical basis as well as specific interactions; (7) to enhance and support our operations; (8) to conduct audits; (9) to manage our risks; to carry out servicing, maintenance and security of your accounts (including e-Banking); (10) to market our products and services; (11) to tailor our offerings to you; (12) and to the extent necessary to comply with court orders, law, rules, regulations, codes of practice, guidelines or requests applicable to us (including reporting to regulators, trade depositories, or responding to requests from law enforcement authorities or governmental agencies)(“Specific Processing Purposes” and, together with the General Processing Purposes, the “EFG Group Processing Purposes”). Our compliance with legal obligations is our primary legal ground for the Specific Processing Purposes. However, there may be circumstances where we also rely on other valid legal grounds for the Specific Processing Purposes. These include your express consent in the case of sending you alerts (etc.), our legitimate interests as a business (except where such interests are overridden by your interests or rights) in the case of enhancing and supporting our operations and processing necessary in order to perform our contract with you (such as, for example, in the case of confirming your identity, source of wealth, credit worthiness, etc.].
EFG Group products and services include financial, banking, fiduciary, securities, advisory, asset management, investment products and services, including but not limited to derivatives, securities trading, commodity, equity and fixed income sales, prime services (including execution, brokerage, settlement, give-up, clearing, custody, reporting and financing services), mortgages and a variety of other lending products.
From time to time, we may use your Personal Data and Sensitive Personal Data (including, but not limited to, your name and contact details, behavioral information, and account, transaction and financial information) to send you news and product offers; but we cannot do so without obtaining your express consent in accordance with applicable Data Protection Laws. In that regard, please be advised that unless you have previously indicated that you do not wish to receive marketing materials from us, your consent for us to use and disclose your Personal Data or Sensitive for the above direct marketing purposes has been obtained in accordance with Data Protection Laws under existing privacy notices, agreements, and terms and conditions, as part of your ongoing relationship with us. Even if you have previously given us your express consent to use and disclose your Personal Data for the above direct marketing purposes, you may withdraw your consent at any time free of charge by contacting us. The withdrawal of your consent will be processed and will take effect as soon as possible.
Cookies are small files which are stored on your computer or device to keep track of your visit to the website and your preferences; as you move between pages, and sometimes to save settings between visits. Cookies help us gather statistics about how often people visit certain areas of the site, and help in tailoring websites to be more useful and user-friendly. For more information on cookies, and for information on how to control and delete cookies from your browser, please visit https://www.efginternational.com/Cookie-policy.html.
track the number, and type of visits to the site and its pages, in order for us to determine which parts of the site are working well, and which need improvement;
store your preferences such as your preferred language;
gather statistics on the number of users and their usage patterns; and
improve the speed and performance of the site.
Links to Third-Party Sites
We may collect Personal Data and Sensitive Personal Data about you as a result of us recording telephone calls which our employees may have with you, and store those recordings, in order to satisfy our legal and regulatory obligations, manage risks, improve client experiences and service levels or otherwise for EFG Group business purposes.
We are pleased to offer the convenience of having account-related information as well as account documents, including, but not limited to, statements and advices, regulatory notices and disclosures, electronically communicated to you (the “Account Documents”). Any Account Document delivered electronically will contain the same information as a paper version of the same document, and at any time you may request a paper copy of any electronic version of a document. For enhanced security, we strongly encourage you to consider activating eBanking – please check with your Client Relationship Officer to determine if it is available in your location.
Sending private and confidential information via e-mail or fax involves the use of insecure channels and carries enhanced risk of unauthorized third-party access as well as potential misuse of such information. While no system, including eBanking or secure messaging facilities, can offer absolute security, the controls and security measures offered by eBanking, including messaging features, provide users with the convenience of electronic communication capabilities as well as access to their information and Account Documents with the reduced risk of being compromised. The eBanking platform, as well as any data and private information about you and your accounts(s) contained within eBanking, is administered, managed and maintained by EFG Bank AG in Switzerland.
Please be advised that all private and confidential account information, including Account Documents, sent via electronic communication will be deemed to be good and effective delivery to you when sent by the EFG Group, regardless of whether or not you actually or timely receive such communications or are able to access the Account Documents. The EFG Group will communicate with you via the numbers, accounts or address(es) (physical and electronic) you have provided to us, and you must promptly notify the EFG Group of any changes thereto. If we receive notification that an electronic communication is undeliverable, or if we reasonably believe that your designated accounts, numbers or addresses have been compromised, or if we reasonably believe that you are not receiving or accessing electronically delivered communications or Account Documents, we may discontinue electronic communications without notice to you and provide delivery of communications and Account Documents exclusively to your designated mailing address listed, even if you had previously elected to be a ‘Paperless’ client. It is your responsibility to promptly notify the EFG Group if any of your designated numbers, e-mail accounts or addresses have been compromised.
We do not charge for any electronic delivery service. However, you may incur costs associated with electronic access to documents, such as usage or data charges from an Internet access provider and/or telephone company. An e-mail account and access to an Internet browser will be required in order to communicate electronically with the EFG Group, and in order to review Account Documents that require PDF readers, options such as Adobe Acrobat Reader®, Acrobat® software are available for download free of charge. If you wish to print documents, you must have access to a printer, the costs of which are your sole responsibility. In order to access password protected or encrypted Account Documents on mobile devices or otherwise, you may be required to download and install WinZip for iOS, RAR/AndroZip for Android or other software as instructed by the EFG Group entity where you have your accounts.
Internet-based communication is not secure from access by third parties and by engaging in electronic communications with the EFG Group you are accepting the risk that such communications or web-based account access may be intercepted, misused and may fail to be received by you or the EFG Group. In accordance with industry standards and practices, and to comply with our legal and regulatory retention requirements, the EFG Group retains e-mail messages for a period of time in accordance with our established policies, guidelines and procedures. Those messages are kept confidential and are accessed and used in accordance with our policies, guidelines and procedures.
The privacy and security of electronic communications cannot be guaranteed and presents inherent and prevalent security risks including the risk of interception and misuse. Further, actual delivery of electronic communications is not guaranteed, and communication by mobile text, Bloomberg messaging, e-mail or fax maybe subject to delay or even mis-delivery. The EFG Group may rely on and act in good faith upon receipt of electronic communications from the designated numbers, addresses and accounts detailed above, and shall not be required to make any enquiries as to the authenticity of such instructions or to the authority or identity of the person making or purporting to make the instructions. It is your responsibility to confirm that the EFG Group has executed any instructions you send electronically, including any securities orders or payment instructions, to the extent receipt of your instructions is not otherwise acknowledged as accepted by the EFG Group, in order to prevent losses, including any opportunity cost, to you. The EFG Group will not be liable to you for any actual or alleged loss due to the EFG Group executing instructions received from the designated numbers, accounts and addresses set forth above, inability to timely execute instructions sent by you electronically where delivery of your communication is delayed, fails to be received or is inadvertently misdirected due to our security filters or other factors.
Upon your specific written request, we may provide your Account Documents without password protection or encryption. Receiving unprotected Account Documents presents inherent and prevalent security risks including, but not limited to, enhanced risks associated with unauthorized third-parties accessing and misappropriating your personal and private information. By instructing the EFG Group to remit your Account Documents in an unprotected format you acknowledge and accept such risks, and will hold the EFG Group harmless with respect to any actual or alleged losses or damages that directly or indirectly relate to us complying with your instructions.
Under applicable Data Protection Laws you have certain rights that may include the right to limit how your Personal Data or Sensitive Personal Data is processed. You have the right to decline providing information we may request but we may not be able to make certain products and services available as a result.
In addition, you may, where permitted under the Data Protection Laws:
check whether we hold your Personal Data or Sensitive ;
ask us to provide you with a copy of your Personal Data or Sensitive Personal Data;
ask us how we process, maintain and share your Personal Data or Sensitive Personal Data;
require us to correct any of your Personal Data or Sensitive Personal Data that is inaccurate, under certain circumstances;
request the deletion of your Personal Data or Sensitive Personal Data so long as the EFG Group is not required to retain such information in order to meet its legal or regulatory obligations, manage risks or business purposes;