economic and market update...• gdp in china grew by 18.3% in the first quarter compared with the...

• Vanguard expects growth around 4% for all of 2021 for the euro area, as several countries have announced steps for easing COVID-19 restrictions, and for GDP to reach its pre-pandemic level in the first half of 2022.

• The UK economy had been hit harder than the euro area’s earlier in the pandemic, but has realized a more successful vaccine rollout, allowing its growth trajectory to overtake that of the euro area later this year.

• High-frequency indicators in the United States point to strong demand for goods andservices thus far in the second quarter, in line with our expectations for quarterly growththat could approach double digits, likely the strongest growth figures of the year. Vaccinedistribution remains on a trajectory to cover about 65% of the U.S. population by the end ofthe second quarter, allowing for a substantial reopening of face-to-face sectors and theeconomy more broadly. Real gross domestic product increased at a seasonally adjustedannual rate of 6.4% in the United States in the first quarter, according to the first estimateby the U.S. Bureau of Economic Analysis (BEA). The BEA’s second estimate of first-quarterGDP is scheduled to be released Thursday, May 27.

• GDP in the euro area declined by – 0.6% in the first quarter compared with the precedingquarter, marking an official double-dip recession after a – 0.7% contraction in the fourthquarter of 2020. But these figures are backward-looking, and more timely data alongsidegenerally stronger sentiment paint a more optimistic picture of an economy that is likelygrowing again. Vanguard expects growth around 4% for all of 2021, as several countrieshave announced steps for easing COVID-19 restrictions, and for GDP to reach its pre-pandemic level in the first half of 2022. The next estimate of first-quarter GDP is scheduledto be released Tuesday, June 8.

• GDP in the United Kingdom declined by a less-than-expected – 1.5% in the first quartercompared with the fourth quarter of 2020. The monthly estimate for March showed growthof 2.1%, the fastest monthly growth since August 2020. Given encouraging developmentsaround virus transmission and vaccine rollout, Vanguard now sees the United Kingdom’seconomy growing in a range of 6.5% to 7% for all of 2021, a stronger pace than our previousforecast for growth around 6%. (For the first time in 14 months, no COVID-19 deaths werereported in England on May 9.) We expect GDP to reach its pre-pandemic level around theturn of the year, a few months before the euro area reaches that milestone. The UKeconomy had been hit harder than the euro area’s earlier in the pandemic, but has realized amore successful vaccine rollout, allowing its growth trajectory to overtake that of the euroarea later this year. GDP in March was 5.9% below its level in February 2020, before thepandemic’s effects were felt. The Office for National Statistics plans to release GDP figuresfor April on Friday, June 11.

Economic growth

Economic and market updateMay 2021

KEY TAKEAWAYS

For institutional and sophisticated investors only. Not for public distribution.

• GDP in China grew by 18.3% in the first quarter compared with the first quarter of 2020,having grown 6.5% year-on-year in the fourth quarter. The eye-popping number isattributable to a great extent to base effects, or comparison to weak numbers in the year-earlier period, when COVID-19 took hold. Compared with the preceding quarter, first-quarterGDP increased by 0.6%, the weakest reading since the depths of the pandemic. Recenteconomic data suggest an uneven recovery continues, with exports and investments drivingthe economy while consumption continues to lag. High-frequency data from the early-MayLabor Day holiday period suggest some normalization in consumption, however. Withincome growth lagging behind nominal GDP, household spending behavior will be worthwatching in the months ahead. Recovery in domestic consumption of goods and serviceswould offer another source of growth as we expect exports and production to slowsomewhat later in the year. Consensus views are coming around toward Vanguard’sforecast for GDP growth around 9% for the full year, equivalent to a 5.5% compoundannualized growth rate compared with 2019, before the pandemic.

• Market consensus and the Reserve Bank of Australia appear to be moving towardVanguard’s forecast for full-year GDP growth in Australia around 5%, given favorable healthoutcomes and a snap-back in activity since the most recent lockdowns. A slow rollout ofvaccinations, however, presents a risk to the full normalization of consumption, with high-frequency data in the retail and recreational sectors still hovering just below pre-COVID-19levels despite low virus case counts. We expect GDP to reach its pre-pandemic level in thefirst half of this year, though we believe it will take until the second half of 2022 for outputto catch up to the pre-pandemic trend it had established. GDP rose more than expected inthe fourth quarter, by 3.1% compared with the third quarter on a seasonally adjusted basis,topping consensus estimates of 2.5%. The Australia Bureau of Statistics is scheduled toreport first-quarter 2021 GDP on Wednesday, June 2.

• Real GDP rose by a slightly below-consensus 0.4% in February in Canada on a seasonallyadjusted basis compared with January, a 10th consecutive monthly increase. Data that haslargely surprised to the upside could help Canada realize Vanguard’s upside full-year growthscenario of 6%to 7%. Our base currently foresees full-year growth in a range of 4.5% to5.5%. (The Bank of Canada, as part of its April policy-setting meeting, raised its 2021 GDPforecast more than 2 percentage points to 6.5%, slowing to 3.75% in 2022.) First-quarterGDP figures are scheduled to be released on June 1.

• Asia, the recent engine for growth in emerging markets, is now the focal point for virustransmission. On top of what has been a dire COVID-19 situation in India for weeks, the virushas re-emerged to a significant degree in Taiwan and in Southeast Asia. Thailand lowered its2021 growth forecast by a percentage point on Monday, May 17, and the Switzerland-basedWorld Economic Forum the same day canceled its annual meeting, scheduled for August inSingapore, over a recent surge in COVID-19 cases there. Vanguard believes its forecast for2021 growth of more than 8% in Asia can hold provided virus interruptions are reasonablyshort-lived.

• We continue to foresee 2021 growth around 4% in Latin America, which wouldn’t make upfor a contraction of – 7.4% in 2020. The economy in Mexico grew 0.4% in the first quarter ona seasonally adjusted basis compared with the fourth quarter of 2020 according topreliminary government figures released April 30.


Monetary policy• Forthcoming Global Macro Matters research on the unwinding of accommodative monetary policy lays out Vanguard’s views on when the largest economies’ central banks will begin to raise interest-rate targets from pandemic-era lows, and to what levels. We foresee rate targets of 2.5% for the U.S. Federal Reserve and the Bank of England at the end of the decade, and a target of 1.5% for the European Central Bank—levels that would reflect neither accommodative nor restrictive monetary policy.

• The U.S. Federal Open Market Committee voted on April 28 to leave the target range for its federal funds rate unchanged at 0%–0.25% and its bond-buying program unchanged. Chairman Jerome Powell emphasized that it remained premature to discuss a tightening in policy, and that the Fed would communicate potential changes to its $120 billion-per-month bond-buying program well in advance of any tapering of purchases. Vanguard expects such guidance to ramp up in the second half of the year, but we don’t foresee the Fed raising its interest rate target until the third quarter of 2023. The Fed’s next monetary policy decision is scheduled for Wednesday, June 16.

• The European Central Bank (ECB) left its key rates intact at its April 22 policy meeting, holding its main deposit rate unchanged at negative 0.50%. The ECB reiterated that it would continue asset purchases under its Pandemic Emergency Purchase Programme (PEPP) at least through March 2022 and that purchases for the remainder of the second quarter would “be conducted at a significantly higher pace than during the first months of the year.” At a news conference following the announcement, ECB President Christine Lagarde said discussion on the phasing out of PEPP purchases was “simply premature,” and that the pace of purchases would be “data-dependent, and not time-dependent.” (The ECB’s caution is in marked contrast with the Bank of England’s acknowledgment that it would slow the pace of its asset purchases for the rest of the year.) Vanguard nonetheless expects the ECB to gradually slow its bond purchases starting in the third quarter of 2021, given our outlook for a gradual easing of COVID-19-related restrictions and a resulting pickup in economic activity in the second and third quarters. The ECB is scheduled to announce its next policy decisions on Thursday, June 10.

• The Bank of England maintained its bank rate at 0.1% at its May 6 Monetary Policy Committee meeting and left its target for government bond purchases unchanged at £875 billion, but signaled that it would slow the pace of its purchases from £4.4 billion a week to£3.4 billion a week. The bank also increased its forecast for 2021 U.K. GDP to 7.25%. The bank’s next policy announcement is scheduled for Thursday, June 24.

• The Reserve Bank of Australia (RBA) left its cash rate and three-year government bond target intact at 0.10% at its May 4 policy meeting. The bank emphasized that, despite a strong recovery in economic activity, “inflation pressures remain subdued in most parts of the Australian economy.” It said it expected a pick-up in inflation and wage growth “to be only gradual and modest,” a stance confirmed by the most recent reading of the Consumer Price Index, on April 26, and of the Wage Price Index, on May 19. Vanguard expects the RBA won’t raise the cash rate before 2024, and that it will extend its asset purchase program that is due to expire in September, albeit at a lesser amount than the current AUD 100 billion (about USD 77 billion). The RBA’s next policy announcement is scheduled for Tuesday, June 1.

• Top policymakers in China emphasized at the April 30 Politburo meeting that there wouldn’t be a “sharp turn in policy” as economic recovery continues. Vanguard expects the People’s Bank of China to normalize policy gradually, a view supported by the most recent credit data. Credit growth slowed to 11.7% in April compared with a year earlier, down from a recent peak around 13% in October 2020.


• We expect policy-makers to use 2021 as an opportunity to address medium-term issues suchas financial risks. Continued deleveraging efforts alongside gradual withdrawal of policysupport could lead to a rise in China’s bond yields in the near term, though some pullbackcan be expected later in the year as tighter financial conditions limit growth expectations.

• Inflation dynamics and rising U.S. interest rates have constrained an accommodative biasfor central banks in emerging markets where economic growth remains below potential. In astatement accompanying its decision on May 13 to maintain the target for its overnightinterbank rate at 4.0%, Banco de México, Mexico’s central bank, noted both “ample slackconditions …foreseen for the economy as a whole” and inflation that increased more thananticipated in April. Russia, Brazil, and Turkey have all increased key interest rates in the lasttwo months.

Inflation • The Consumer Price Index (CPI) in the United States rose a greater-than-expected 0.8% inApril on a seasonally adjusted basis compared with March. Sharply higher prices for airlinetickets and used cars reflected both a recovery-driven rebound in activity and the near-termchallenge of supply not keeping up with emerging demand as consumers more fully reengagein economic activity. Headline inflation was up 4.2% compared with a year earlier, also greaterthan expected. Core CPI, which excludes volatile food and energy prices, rose 0.9%comparedwith a month earlier and 3.0%compared with April 2020. Vanguard expects inflation tomoderate after peaking in the second quarter. We expect headline CPI to hover around 3% forthe rest of 2021 before dropping back toward 2% for most of 2022. We expect core CPI to fallback below 2% in the second half of 2021 before rising marginally above 2% toward thesecond half of 2022 and into 2023. Vanguard’s global chief economist, Joe Davis, discussedThe coming rise(s) in inflation in a recent blog. The CPI for May is scheduled to be releasedThursday, June 10.

• The consumer price index in Canada rose 3.4% in April compared with April 2020, reflectingboth base effects, or comparisons to weak year-earlier numbers, and a recovering economy.Gasoline prices rose 62.5% compared with a year earlier, the greatest increase on record. Thebig gain for April 2021 reflects a sharp fall in gasoline prices in April 2020. Core inflation, whichexcludes volatile food and energy prices, rose 1.8% compared with April 2020. We expect baseeffects to keep inflation above 2%in the coming months before fading in the third quarter,though substantial fiscal support and continuing economic recovery in both Canada and theUnited States could apply upward price pressure. The CPI data release for May is scheduled forWednesday, June 16.

• Headline inflation rose to 1.6% in the euro area in April on an annual basis, up from 1.3% inMarch, the European Union’s statistical agency reported today, Wednesday, May 19. Energyprices, up 10.4%compared with April 2020, accounted for the bulk of the gain. Core inflation,which excludes volatile food and energy prices, was estimated to have risen by 0.7% comparedwith a year earlier. We expect higher relative energy prices to push headline inflation above 2%in the second half of the year, and core inflation to gradually rise to a range of 1% to 1.5% asthe pace of economic recovery quickens. But underlying price pressures remain subdued amidweak labor bargaining power and low inflation expectations. A flash estimate for May inflationis scheduled for Tuesday, June 1.


• Headline inflation rose by 1.5% in April in the United Kingdom compared with a year earlier,following a 0.7% rise in March. Utility, clothing, and motor fuel prices made the greatestcontribution to the gains. Vanguard expects headline inflation to rise above the Bank ofEngland’s 2% target in the second half of the year on higher relative energy prices amid astrengthening economy. We expect core inflation, which excludes volatile food and energy prices,to approach the BOE’s target. Core inflation rose by 1.3% in April compared with a year earlier.The UK Office for National Statistics is scheduled to release May inflation data on Wednesday,June 16.

• Consumer prices rose 0.6% in Australia in the quarter ended March 2021, compared with aquarter earlier. That was less than the 0.9% gain in the quarter ended December 2020.Compared with a year earlier, consumer prices rose 1.1%, higher than the 0.9% year-on-year risereported for the fourth quarter of 2020 and the highest since the start of the pandemic. Baseeffects, or comparisons to weak numbers in the reference period, helped push automotive fuelprices up 8.7% in the quarter, providing the greatest contribution to the gain. Despite baseeffects’ exerting modest upward pressure, existing spare capacity in the economy suggests thatcore inflation will likely undershoot the RBA’s 2% target. We expect core inflation around 1.5% atthe end of 2021, in line with the RBA’s recently upgraded outlook. Second-quarter inflation datais scheduled to be released on Wednesday, July 28.

• Producer prices rose 6.8% in China in April compared with a year earlier, a figure that someobservers might worry could prompt a hawkish monetary policy response if not for a history ofweak pass-through effects to consumer prices. Consumer prices rose 0.9% year-on-year in thesame period. Vanguard expects that upward pressure on consumer prices will remain limited inthe near term given only gradual and modest consumer demand recovery to date. We foreseeconsumer price inflation around 1.5% for the year, well below the People’s Bank of China’s 3%inflation target.

• A disinflationary trend in parts of Asia has disappeared, leaving inflation in emerging marketsnewly synchronous. Upticks in inflation have been recorded recently in China, Indonesia, thePhilippines, and India, with inflation in other regions largely rising to above its pre-COVID pace.Consumer prices were up by 2.67% in Mexico in April since the start of the year and by 6.08%compared with April 2020. Core inflation, which strips out volatile food and energy prices, rose4.13% on an annualized basis, just slightly above the 4.12% reading in March. Vanguard expectsinflation to moderate in Mexico in the months ahead, but we expect further rate hikes beingrequired in Brazil to contain inflation.

Employment• The unemployment rate in the United States rose to 6.1% in April as only 266,000 non-farm

jobs were created, far below expectations for more than a million. The data reflect the laborsupply and demand dynamics of a recovering economy discuss. We expect a high degree ofvariability in jobs numbers in the coming months as a labor market that turned off all at oncewrestles with how to turn itself back on. We do expect factors keeping some workers sidelinedto dissipate over the next several months. But the big miss in the April report makes the Mayreport, scheduled to be released Friday, June 4, all the more noteworthy.

• The unemployment rate in Canada rose in April, to 8.1%, after two straight months of sharpdeclines, as public health measures were strengthened amid a COVID-19 resurgence just beforethe reference period. Employment fell by 207,000, with service industries directly affected bythe stricter health measures hit hardest. Retail trade, accommodation and food services, andinformation, culture, and recreation combined for more than 80% of the job losses. Vanguardforesees the unemployment rate falling again as restrictions are eased, to a range of 5.5% to6.5% by year’s end in our base case. Canada’s May jobs report is scheduled to be releasedFriday, June 4.


• Unemployment in the euro area fell to 8.1% in March from a revised 8.2% in February on aseasonally adjusted basis, with furlough schemes such as the European Union’s SURE programcontinuing to support employment. The unemployment rate was 7.1% in March 2020, near thestart of the COVID-19 pandemic. Employment figures for April are scheduled to be releasedTuesday, June 1.

• The unemployment rate in the United Kingdom fell to 4.8% in the three months ended inMarch, down slightly from 4.9% in the quarter ended in February and the third straight three-month period with a decline. Vanguard expects employment to be supported by the extension ofthe Coronavirus Job Retention Scheme through September as part of the UK’s recentlyannounced budget. The next unemployment reading is scheduled to be released Tuesday, June15.

• The unemployment rate in Australia fell to 5.6% in March from 5.8% in February, theAustralian Bureau of Statistics reported on April 15. The JobKeeper Payment scheme concludedon March 28, which could lead to near-term volatility in the unemployment rate starting withthe April Labor Force Survey reading on Thursday, May 20. Vanguard estimates that withoutthe program the unemployment rate could have reached 12%, as opposed to its actual peak of7.5% in July 2020. We estimate that the program’s end will have caused around 60,000 joblosses in April, representing around a 0.4-percentage-point increase in the unemployment rate,with workers in the hospitality and recreation sectors affected most greatly. But we expect thedownward trend in the unemployment rate to continue after the second quarter, normalizingbelow 5% over the next two years.


• Vanguard has updated its 10-year annualized outlook for broad asset class returns throughthe most recent running of the Vanguard Capital Markets Model® (VCMM), based on data asof March 31, 2021. The probabilistic return assumptions depend on market conditions at thetime of the running of the VCMM and, as such, can change with each running over time.

• Our outlooks for equity returns are broadly lower compared with our outlooks based on ourprevious running of the VCMM, on December 31, 2020, given a rally in global risk assetsresulting in higher equity valuations globally. Our outlooks for bond returns are broadly higherthan they were based on the December 31, 2020, running of the VCMM, given rising globalinterest rates.

• ISG updates these numbers quarterly. Projections based on the June 30, 2021, running ofthe VCMM will be communicated through the August 2021 economic and market update.

• Our 10-year annualized nominal return projections are as follows. Please note that thefigures are based on a 1-point range around the 50th percentile of the distribution of returnoutcomes for equities and a 0.5-point range around the 50th percentile for fixed income.Numbers in parentheses reflect median volatility.

Asset class return outlooks

U.S. dollar investors

Equities Return projection Median volatility

U.S. equities 2.6%-4.6% 16.7%

Global equities ex-U.S. (unhedged)

5.5%-7.5% 18.9%

U.S. value 3.4%-5.4% 18.8%

U.S. growth -0.5%-1.5% 17.7%

U.S. large-cap 2.4%-4.4% 16.4%

U.S. small-cap 2.4%-4.4% 21.7%

U.S. REITs 2.4%-4.4% 19.5%

U.S. aggregate bonds

1.4%-2.4% 4.5%

U.S. Treasury bonds 1.1%-2.1% 4.7%

Global bonds ex-U.S. (hedged)

1.3%-2.3% 3.8%

U.S. credit 1.8%-2.8% 5.7%

U.S. high-yield corporate

2.2%-3.2% 10.2%

Emerging market sovereign

2.1%-3.1% 9.9%

U.S. TIPS 0.8%-1.8% 7.0%

U.S. cash 1.3%-2.3% 1.3%

U.S. inflation 1.4%-2.4% 2.4%

Mexican peso investors

Equities Return projection Median volatility

Mexican equities 5.6%-7.6% 28.3%

U.S. equities (unhedged)

6.5%-8.5% 21.7%

Global ex-U.S. developed market

equities (unhedged)9.6%-11.6% 22.3%

Mexican sovereign bonds

6.2%-7.2% 11.7%

Global bonds (hedged)

6.8%-7.8% 7.2%

IMPORTANT: The projections or other information generated by the Vanguard Capital Markets Model regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Distribution of return outcomes from the VCMM are derived from 10,000 simulations for each modeled asset class. Simulations are as of M a r c h 31, 2021. Results from the model may vary with each use and over time.


© 2020 The Vanguard Group, Inc. All rights reserved.

FAVEMOBF_A 122019 1029372 DOLU 12/12/22

Connect with Vanguard®

This information is intended for investors outside the United States and should not be provided to individual investors in the United States. The information contained herein does not constitute an offer or solicitation and may not be treated as such in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. Broker-dealers, advisers, and other intermediaries must determine whether their clients are eligible for investment in the products discussed herein.

not ensure All investing is subject to risk, including possible loss of the money you invest. a or protect against a loss.

risk.

and currency risk. These risks are

Investments in bonds are subject to interest rate, credit, and

International investments are subject to especially high in emerging markets.

IMPORTANT: The projections and other information generated by the Vanguard Capital Markets Model regarding the likelihood of various investment outcomes are hypothetical in nature, do not

actual investment results, and are not guarantees of future results. VCMM results will vary with each use and over time.

The VCMM projections are based on a statistical analysis of historical data. returns may behave differently from the historical patterns captured in the VCMM. More important, the VCMM may be underestimating negative scenarios unobserved in the historical period on which the model estimation is based.

The Vanguard Capital Markets is a developed and maintained by research and advice teams. The model forecasts distributions of future returns

for a wide array of broad asset classes. Those asset classes include U.S. and international equity markets, several maturities of the U.S.Treasury and corporate income markets, international income markets, U.S. money markets, commodities, and certain alternative investment strategies. The theoretical and empirical

the foundation for the Vanguard Capital Markets Model is that the returns of various asset compensation investors require for bearing different types of systematic risk the core of the model are estimates of the dynamic statistical relationship between risk factors and asset returns, obtained from

and economic data from as early as statistical analysis based on available a system of estimated equations, the model then applies a Monte Carlo simulation method to project the estimated interrelationships among risk factors and asset classes as well as uncertainty and randomness over time. The model generates a large set of simulated outcomes for each asset class over several time

are obtained by computing measures of central tendency in these simulations. Results produced by the tool will vary with each use and over time.

S.A. de C.V. Asesor en Inversiones Independiente Nacional Bancaria y de Valores The registration of before the

as an Asesor en Inversiones Independiente is not a with regulation applicable to Advisory Investment Services de

compliance nor a

on the accuracy of he information provided herein. The supervision scope of the CNBV is limited to Advisory Investment.

Services only and not all services provided by

This material is solely for informational purposes and does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any security shall any such shares be offered or sold to any in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. Reliance upon information in this material is at the sole discretion of the reader.


All investments are subject to risk, including the possible loss of the money you invest. Investments in bond

and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest. High-yield bonds generally have medium- and lower-range credit quality ratings and are therefore subject to a higher level of credit risk than bonds with higher credit quality ratings.

There is no guarantee that any forecasts made will come to pass. Past performance is no guarantee of future results.

concentrate on a relatively narrow market sector face the risk of higher shareprice volatility. Stocks of companies based in emerging markets are subject to national and regional political and economic risks and to

rates may have an adverse effect on the value, price or income of a fund.

The information contained in this material derived from third-party sources is deemed reliable, however Vanguard Mexico and The Vanguard Group Inc. are not responsible and do not guarantee the completeness or accuracy of such information.

This document should not be considered as an investment recommendation, a recommendation can only be

This document is for educational purposes only and does not take into consideration your background and

investment decision. We recommend to obtain professional advice based on your individual circumstances before taking an investment decision.For institutional and sophisticated investors only. Not for public distribution.

Materials are provided only for their exclusive use and shall not be distributed to any other individual or entity. Broker-dealers, advisers, and other intermediaries must determine whether their clients are eligible for investment in the products discussed herein.

The information contained herein does not constitute an offer or solicitation and may not be treated as such in any jurisdiction where such an offer or solicitation is against the law, or to anyone for whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so.

THESE MATERIALS ARE PROVIDED AT THE REQUEST OF AND FOR THE EXCLUSIVE USE OF RECIPIENT AND CONTAIN HIGHLY CONFIDENTIAL INFORMATION, WHICH SHALL NOT BE REPRODUCED OR TRANSMITTED TO ANY THIRD PARTIES WITHOUT VANGUARD’S PRIOR WRITTEN CONSENT. THE CONTENTS OF THESE MATERIALS SHALL NOT BE UNDERSTOOD AS AN OFFER OR SOLICITATION TO BUY OR SELL SECURITIES IN BRAZIL AND VANGUARD IS NOT MAKING ANY REPRESENTATION WITH RESPECT TO THE ELIGIBILITY OF ANY RECIPIENT OF THESE MATERIALS TO ACQUIRE THE INTERESTS IN THE SECURITIES DESCRIBED HEREIN UNDER THE LAWS OF BRAZIL. SUCH SECURITIES HAVE NOT BEEN REGISTERED IN BRAZIL AND NONE OF THE INTERESTS IN SUCH SECURITIES MAY BE OFFERED, SOLD, OR DELIVERED, DIRECTLY OR INDIRECTLY, IN BRAZIL OR TO ANY RESIDENT OF BRAZIL EXCEPT PURSUANT TO THE APPLICABLE LAWS AND REGULATIONS OF BRAZIL.

This document does not constitute, and is not intended to constitute, a public offer in the Republic of Colombia, or an unlawful promotion of financial/capital market products. The offer of the financial products described herein is addressed to fewer than one hundred specifically identified investors. The financial products described herein may not be promoted or marketed in Colombia or to Colombian residents, unless such promotion and marketing is made in compliance with Decree 2555/2010 and other applicable rules and regulations related to the promotion of foreign financial/capital market products in Colombia.

The Product is not and will not be registered before the Colombian National Registry of Securities and Issuers (Registro Nacional de Valores y Emisores - RNVE) maintained by the Colombian Financial Superintendency, or before the Colombian Stock Exchange. Accordingly, the distribution of any documentation in regard to the financial products described here in will not constitute a public offering of securities in Colombia.

The financial products described herein may not be offered, sold or negotiated in Colombia, except under circumstances which do not constitute a public offering of securities under applicable Colombian securities laws and regulations; provided that, any authorized person of a firm authorized to offer foreign securities in Colombia must abide by the terms of Decree 2555/2010 to offer the such products privately to its Colombian clients.

The distribution of this material and the offering of shares may be restricted in certain jurisdictions. The information contained in this material is for general guidance only, and it is the responsibility of any person or persons in possession of this material and wishing to make application for shares to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Prospective applicants for shares should inform themselves of any applicable legal requirements, exchange control regulations and applicable taxes in the countries of their respective citizenship, residence or domicile.

This offer conforms to General Rule No. 336 of the Chilean Financial Market Commission (Comisión para el Mercado Financiero). The offer deals with securities not registered under Securities Market Law, nor in the Securities Registry nor in the Foreign Securities Registry of the Chilean Financial Market Commission, and therefore such securities are not subject to its oversight. Since such securities are not registered in Chile, the issuer is not obligated to provide public information in Chile regarding the securities. The securities shall not be subject to public offering unless they are duly registered in the corresponding Securities Registry in Chile. The issuer of the securities is not registered in the Registries maintained by the Chilean Financial Market Commission, therefore it is not subject to the supervision of the Chilean Financial Market Commission or the obligations of continuous information.

Esta oferta se acoge a la norma de carácter general n° 336 de la Comisión para el Mercado Financiero. La oferta versa sobre valores no inscritos bajo la Ley de Mercado de Valores en el Registro de Valores o en el Registro de Valores extranjeros que lleva la Comisión para el Mercado Financiero, por lo que tales valores no están sujetos a la fiscalización de ésta. Por tratarse de valores no inscritos, no existe la obligación por parte del emisor de entregar en Chile información pública respecto de esos valores. Los valores no podrán ser objeto de oferta pública mientras no sean inscritos en el Registro de Valores correspondiente. El emisor de los valores no se encuentra inscrito en los Registros que mantiene la Comisión para el Mercado Financiero, por lo que no se encuentra sometido a la fiscalización de la Comisión para el Mercado financiero ni a las obligaciones de información continua.

The securities described herein have not been registered under the Peruvian Securities Market Law (Decreto Supremo No 093-2002-EF) or before the Superintendencia del Mercado de Valores (SMV). There will be no public offering of the securities in Peru and the securities may only be offered or sold to institutional investors (as defined in Appendix I of the Institutional Investors Market Regulation) in Peru by means of a private placement. The securities offered and sold in Peru may not be sold or transferred to any person other than an institutional investor unless such securities have been registered with the Registro Público del Mercado de Valores kept by the SMV. The SMV has not reviewed the information provided to the investor. This material is for the exclusive use of institutional investors in Peru and is not for public distribution.

The financial products describe herein may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act 2003 of Bermuda. Additionally, non-Bermudian persons may not carry on or engage in any trade or business in Bermuda unless such persons are authorized to do so under applicable Bermuda legislation. Engaging in the activity of offering or marketing the Products in Bermuda to persons in Bermuda may be deemed to be carrying on business in Bermuda.

Vanguard is not intending, and is not licensed or registered, to conduct business in, from or within the Cayman Islands, and the interests in the financial products described herein shall not be offered to members of the public in the Cayman Islands.

The financial products describe herein have not been and will not be registered with the Securities Commission of The Bahamas. The financial products described herein are offered to persons who are non-resident or otherwise deemed non-resident for Bahamian Exchange Control purposes. The financial products described herein are not intended for persons (natural persons or legal entities) for which an offer or purchase would contravene the laws of their state (on account of nationality or domicile/registered office of the person concerned or for other reasons). Further, the offer constitutes an exempt distribution for the purposes of the Securities Industry Act, 2011 and the Securities Industry Regulations, 2012 of the Commonwealth of The Bahamas.

This document is not, and is not intended as, a public offer or advertisement of, or solicitation in respect of, securities, investments, or other investment business in the British Virgin Islands (“BVI”), and is not an offer to sell, or a solicitation or invitation to make offers to purchase or subscribe for, any securities, other investments, or services constituting investment business in BVI. Neither the securities mentioned in this document nor any prospectus or other document relating to them have been or are intended to be registered or filed with the Financial Services Commission of BVI or any department thereof.

This document is not intended to be distributed to individuals that are members of the public in the BVI or otherwise to individuals in the BVI. The funds are only available to, and any invitation or offer to subscribe, purchase, or otherwise acquire such funds will be made only to, persons outside the BVI, with the exception of persons resident in the BVI solely by virtue of being a company incorporated in the BVI or persons who are not considered to be “members of the public” under the Securities and Investment Business Act, 2010 (“SIBA”). Any person who receives this document in the BVI (other than a person who is not considered a member of the public in the BVI for purposes of SIBA, or a person resident in the BVI solely by virtue of being a company incorporated in the BVI and this document is received at its registered office in the BVI) should not act or rely on this document or any of its contents.

This document does not constitute an offer or solicitation to invest in the securities mentioned herein. It is directed at professional / sophisticated investors in the United States for their use and information. The Fund is only available for investment by non-U.S. investors, and this document should not be given to a retail investor in the United States. Any entity responsible for forwarding this material, which is produced by VIGM, S.A. de C.V., Asesor de Inversiones Independiente in Mexico, to other parties takes responsibility for ensuring compliance with applicable securities laws in connection with its distribution.

economic and market update...• gdp in china grew by 18.3% in the first quarter compared with the...

Documents