Not for circulation. For use by advisors only. Not to be distributed to end-investors.

China: Amidst markets uncertainty Still a worthy asset class?

4th October 2011

Deutsche Asset Management: Business divisions

AuM EUR 529 bn*

Retail
(AuM EUR 175 bn*)

Alternatives
(AuM EUR 46 bn*)

Insurance
(AuM EUR 143 bn*)

Institutional
(AuM EUR 164 bn*)

Clients

Clients

Clients

Clients

Retail Private Banking High Net Worth Institutional

Products

Institutional High Net Worth Private Banking Retail

Products

General account
assets of insurance companies worldwide

Pension Funds Foundations and

Endowments

Public/Government Funds Corporates

Products
Insurance Fixed Income Strategic Asset Allocation Asset-Liability Modeling Multi-Asset Portfolio Management Insurance Advisory Services

Products

Mutual Funds Structured Products Complex Assets Hedge Funds and Fund of
Funds Quantitative Strategies

Real Estate Infrastructure Private Equity Fund of

Funds

Equity Fixed Income Hedge Funds and Hedge

Fund of Funds Quantitative Strategies Liquidity Management

* As of March 2011; Source: Deutsche Asset Management

Assets in Asia Pacific ex-Japan: by Country

Funds registered in Singapore

Authorized funds

EUR 2.0 bn
30% shareholding in Harvest FM DWS Premier Select Trust

Fund sizes (SGD mio)*

189.05

Seoul

DWS Lion Bond Fund

283.75
71.16 34.13 71.93 351.77 490.35 5.83 4.65 16.96 Fund sizes (USD mio)* 942.60 145.21

EUR 1.6 bn
EUR 1.1 bn
Mumbai

EUR 0.6 bn
Taipei

DWS Asia Premier Trust DWS Global Themes Equity Fund DWS Singapore Equity Fund DWS India Equity Fund DWS China Equity Fund

Hong Kong Philippines

Singapore

EUR 1.5 bn

DWS Singapore Small/Mid Cap Fund DWS Global Clean Tech Fund

EUR 3.9 bn

DWS Asian Small/Mid Cap Fund Recognized funds DWS Global Agribusiness DWS Noor Precious Metals Sec. Fund

EUR 4.0 bn
Source: DB Group Finance Serviced AuM for DeAM companies as of June 2011. * Source: HSBC Trustees / Deutsche Asset Management / State Street as of end August 2011.

Sydney & Melbourne

Agenda
1
2 3 4

Economy Update
China Market Outlook DWS China Equity Fund Appendix

Global equities sell-off after U.S. rating downgrade and Europe crisis concerns
History will mark down the date - August 5th 2011, S&P downgraded the U.S. credit rating from AAA to AA+. Moodys and Fitch also considered that downgrade would be possible.

Global stock markets slumped after rating downgrade. MSCI AC World Index plummeted 5.1% on August 8th, the first trading day after US downgraded. Greek / Euro sovereign debt issues exacerbate the current situation (Spain, Italy, France)
5

Source: Bloomberg

Will China be immune?

Global GDP Growth Forecast* Key concerns: % YoY USA Japan Euroland UK China LATAM EMEA Advanced Economies World

A slowdown in US and Europe will impact the export sector in China

Inflation rate still persistently high and remains the top concern for the Chinese government Slowdown in Fixed Asset Investments (FAI) Risk of asset bubbles forming i.e. property sector Hot money flows (event driven and unpredictable) Local government debt

2011 (F) Old New 1.8 1.6 -0.4 -0.4 1.8 1.8 1.1 1.1 9.3 9.0 4.6 4.6 4.2 4.5 1.9 1.8 3.3 3.3

2012 (F) Old New 2.3 2.3 3.5 2.9 2.0 1.0 2.1 1.5 9.0 8.3 4.2 4.2 4.5 3.3 2.8 2.3 3.8 3.3

Base case scenario: Slower rate of growth expected. Despite the concerns, China will still stand out from the rest of the countries in terms of absolute GDP growth

* Source: UBS research (Aug 2011)

What do these international brands have in common?

Luxury brands listing in Hong Kong to tap the growing wealth segment indicative of rising consumption demand
7

Positive signs for Chinese equities

1. Signals to turn positive for Chinas market Money supply in check

M1, M2 and loan growth falling in-line as money tightening policies are introduced to curb inflation M2 bottomed when M2 met the target and stock market rose subsequently
35% 30% MSCI CN - RHS 25% 20% 60 15% 40 10% 5% 0%
Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11

as it happened in 2004
120

22 20 18 16 14 12

(%)

M2 YoY growth MSC I C hina (RHS)

28 27 26

100 M2 YoY

80

25 24 23 22

20

21 20 Dec 04

10 Jan 04

Mar 04

May 04

Jul 04

Sep 04

Nov 04

Possible uptrend in the Chinese stock market after M2 reaches the target

Source: WIND, Harvest Global Investments Ltd.

2. Valuations appear attractive

Price to Earning (P/E) Ratio of the Chinese markets
MSCI China (as of 31st August 2011) Current: 8.95 10 yr avg: 14.67 6
P/E ratio LT average
PB ratio

Price to Book (P/B) Ratio of the Chinese markets

MSCI China (as of 31st August 2011) Current: 1.82 10 yr avg: 2.19 P/B ratio

40
35
30
PE ratio

5
4 3 2 1 0

LT average

25 20 15 10 5 0 Aug-04 Oct-05 May-06 Aug-11 Feb-08 Jun-03 Jan-04 Jun-10

Aug-04

Oct-05

Sep-08

Sep-01

Nov-02

Dec-06

Potential upside for China equities from a historical standpoint

Source: Bloomberg as of 31st August 2011. Figures obtained for P/E and P/B Ratios are for a period 1st September 2011 to 31st August 2011

10

Nov-09

Mar-05

May-06

Aug-11

Jun-03

Jan-04

Jun-10

Feb-08

Sep-01

Nov-02

Dec-06

Sep-08

Jan-11

Nov-09

Apr-02

Apr-09

Mar-05

Jan-11

Apr-02

Apr-09

Jul-07

Jul-07

3. Inflows into emerging markets holding up

Confidence in China remains?

11 Source: Datastream, HSBC, Harvest Global Investments Ltd.

4. China is an increasingly important contributor to world GDP, yet still under-invested by global investors
MSCI AC World Index World Economy (in PPP terms) Distribution of World GDP in 2010 50.2 % Contribution to World GDP Growth 2000-2008 70.7

No. of Stocks Emerging Markets (Total) 2785

Weight 13.63

China
India Latin America Russia and other CIS Developed Markets (Total) USA EU-15* Japan AC World Index (Total)/ World Economy

454
372 250 56 6270 2590 1330 1158 9055

2.34
1.15 2.99 0.79 86.37 43.12 20.44 8.64 100.00

16.3
5.3 8.0 4.4 49.8 18.3 17.7 5.6 100.0

29.3
7.3 7.3 7.3 29.3 9.8 9.8 2.4 100.0

Source: MSCI Barra (as of 31 Dec 2010), the Conference Board, Russell Investments, iFAST Compilations

*EU-15 includes Austria, Belgium, Germany, Denmark, Spain, Finland, France, United Kingdom, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Sweden.
12

What do these Chinese companies have in common?

For illustrative purpose only. This does not constitute as a recommendation to buy or sell any of the securities mentioned
13

What do these Chinese companies have in common?

Chinese versions of western Information Technology products and services

14

For illustrative purpose only. This does not constitute as a recommendation to buy or sell any of the securities mentioned

5. Economy remains well-supported

a) b)

Slower GDP growth, but overall level remains high Inflation remains above 5% but expected to peak in July/ August

c)
d)

Timely governmental intervention: Property policy is working

Export and consumption levels are stable

e)
f)

Rising income levels contribute to increasing consumption

12th Five year plan sets out new investment opportunities

15

Source: Harvest Global Investments Ltd.

a. GDP growth decreases, but overall level remains high

1Q GDP growth was lower than that from 4Q, but the overall level is not considered low. We expect investment to drop modestly in 2Q and 3Q, consumption to remain stable, trade surplus will rise, and GDP growth is to be lower than 1Q. Purchasing Managers Index (PMI) was 50.9 in August, which remained above the expanding threshold of 50. GDP Growth (2010-2011)
65

Purchasing Managers Index (PMI)

11.9 10.3 9.6 9.8 9.6 9.7 8.4 9.5 8.0

60 55 50 45 40 35

10Q1

10Q2

10Q3

10Q4

11Q1

11Q2(E)

GDP, YOY %
16 Source: WIND, Harvest Fund Management

GDP, Quarter to Quarter %

PMI

b. Inflation remains above 5% but expected to peak in Q3

In 2Q, CPI remained relatively high on rising food prices, high base effect and imported inflation.
We expect CPI to fall after July / August but to remain modestly high for the whole year. M1 is a leading indicator for CPI: credit tightening reduces overheating in the economy CPI Growth (2010 - 2011)
CPI growth %
10 8 6 5.5 4 2 (%)
CPI YoY (LHS) M1 YoY (leading by 12M)

CPI & M1 levels

(%) 45 40 35 30 25

20
15 10

0
(2) (4) 1998

5 0

Jan 10

May 10

Sept 10

Jan 11 May 11 July 11E Sept 11E CPI, YoY %

2000

2002

2004

2006

2008

2010

2012

Base effect

17

Source: WIND, CRR, Datastream, CLSA Asia-Pacific Markets, Harvest Global Investments Ltd.

c. Government is reactive to property prices - policies are working

1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 (0.2) (0.4) (0.6) (0.8)
Jul 08 Mar 08 Nov 07 May 08 Jan 08
Sales tax reduction, stamp duty excluded (+) HBR implemented to 14 cities; stricter mortgage policy nationwide (-) First introduction of Home-buying restriction (HBR) in Beijing; strict mortgage policy (-) Gov't tightened downpayment requirement for 2nd mortgage (-) Tighter HBR applied to 35 cities; property tax launched in SH and C Q (-)

MoM home price increase % (nationals avg of 72 cities)

Jul 09 Mar 09 Nov 08 Nov 09 Mar 10 Jul 10 May 09 May 10 Nov 10 Sep 08 Sep 09 Sep 10 Jan 09 Jan 10 Jan 11

18 Source: WIND, CLSA Asia-Pacific Markets, Datastream; Harvest Global Investments Ltd.

c. Social housing to support government investments

7 6 5 4 3 2 1 0 -1 -2

(%MoM)

%MoM %YoY (RHS)

(%YoY)

30 25 20 15 10 5 0 -5 -10

Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11

Source: China Realty Research, CLSA Chris Wood

19

(40)

(20)

d. Export may taper off but consumption levels are stable

20

20

40

60

10

15

20

Export value YoY

Retails sales YoY

25

0
(%) (%)

Source: CLSA, Harvest Global Investments Ltd.

Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-02 Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11

Trade surplus increased slightly in 2Q, partly due to Japan earthquake.

Retail sales growth trend Rising wages

e. Income and consumption growth expected to pick up

80 70

Discretionary consumption will be the biggest beneficiary

% of GDP

We expect both income and private consumption to rise over the years

60

50

40

30
45 40

1992

1994

1996

1998

2000 Wage

2002

2004

2006

2008

2010E

2012E

2014E

Other Income

Private Consumption

Food consumption as % of income

35 30 25 20 15 10 5 0 0 5,000 10,000 15,000 20,000 25,000

Monthly household income (Rmb)

Increasingly affluent middle class Higher spending on other goods and services as the household income increases Discretionary consumption will be the largest beneficiary

21

Source: Credit Suisse; Harvest Global Investments Ltd.

Growth driver: Strong auto sales as domestic demand improves

In 2009 China sold more cars (10.3 Mio) than US and turns into largest auto market

China auto sales und penetration rate 2000 2009

Auto sales in million. 12

Penetration Rate (per 100 household)

6.0% 5.1% 10.3 4.0%

8
4 0.7% 0.8% 0 0.6 2000 0.7 2001

0.9% 1.1% 1.9 1.1 2002 2003

1.3% 2.5 2004

1.6%
3.1 2005

2.0% 4.2

2.4% 5.3

2.9% 5.7 2.0% 0.0%

006

2007

2008

2009

Unit sales (LHS)

Penetration rate (RHS)

22

Source: Morgan Stanley, HSBS Halbis 2009, Bloomberg 2010

Highlights of 12th five-year plan

5-year plan
Period Announced Theme - Inclusive growth, focusing on income growth for low-income groups. - Using energy efficiency as the lever to upgrade the value chain. - Develop 7 new strategic industries. - Boost domestic consumption, including tourism, media, etc. - Continue the urbanization development. - Fully implement the "Scientific Development theory" by President Hu Jintao and develop harmonious society. - Maintain stable and fast economic growth. - Optimize the economic structure. - Strengthen the local branding and intellectual property development. - Enhance the international competitiveness of Chinese enterprise. - Improve industrial production efficiency and lower resources consumption. - Accelerate the urbanization development. - Accelerate the modernization of society and further improve the economic development. - Strengthen the service sector development. Increase the weighting of service sector in GDP and employment. - Enhance the IT and telecommunication network development. - Strengthen the infrastructure in water resources, transportation and energy sectors. - Develop the western part of China. - Actively promote urbanization.

Benefited sectors
Consumer, Internet, Tourism, New Energy

12th

2011 2015

TBC Mar-11 NPC

11th

20062010

Oct-05

Consumer, IT, Property

10th

20012005

Oct-00

Telecom, Transport infrastructure, Energy

23

Source: Harvest Global Investment

Market Outlook Long Term

Drivers for long term:
Chinas weighting in the global index weightings set to increase from current low base Unleash of domestic liquidity and forex reserve via QDII Further income growth and productivity gain will drive demand upgrade Structural shift from export, investment to consumption Low system debt level and high savings ratio means room for further leverage and investment Government will have the political will for stimulus if necessary

Overall market will likely grow in line with Chinas GDP growth while alpha strategy (stock and sector selection) will likely matter more

Secular growth industries such as consumption, service and healthcare will likely deliver alpha

Chinese Equity A Worthy Separate Asset Class!

24

Source: Harvest Global Investments Ltd.

Fund Update

DWS China Equity Fund: Fund facts

Investment Objective*: To achieve capital appreciation in the medium to long term by investing in a diversified portfolio of equity and equity-related securities issued by entities listed/to be listed on stock exchanges of China, including Hong Kong; entities organised or domiciled in China or of entities which have significant assets, business, production activities, trading or business interest in China. Dealing currencies: SGD / USD Subscription: Cash / CPS-OA / SRS Fund Size^ (as of Aug 2011): SGD 490.35 million Morningstar Rating** (as of Aug 2011): Launch date: 04th January 2005 Management fee*: 1.5% p.a. Benchmark: MSCI China Total Return Index Awards: The Edge-Lipper Fund Awards: Best Equity China Fund 3-Years for 3 years (2008, 2009, 2010) Recommendation: The Fund Fundsupermart.com (China equity)
26

is

recommended

by

*Please refer to the prospectus for details on the investment objective and the fees involved. ^Source: HSBC Trustees. **Source: Morningstar.

DWS China Equity Fund

Calendar year performance (as of 30th September 2011)
Year to Year Returns (%) 1.0 0.8 0.6 0.4 0.2 0.0 -0.2 -0.4 -0.6
2005
DWS China Equity (%) MSCI China (%) Outperformance(%)

DWS China Equity Fund

MSCI China Index

2005*

2006

2007

2008

2009

2010

2011^

2006

2007

2008

2009

2010

2011

19.66
18.78 0.88

73.74
64.34 9.40

64.87
52.93 11.94

(47.61)
(52.08) 4.47

64.45
55.56 8.89

(7.26)
(6.51) (0.74)

(21.54)
(25.19) 3.65

Source: Bloomberg as of 30th September 2011. Performances are in SGD and on bid-bid basis. Past performance is not indicative of future performance 27

DWS China Equity Fund

Performance since inception (as of 30th September 2011)
Common based returns
400 350 300 250 DWS China Equity Fund MSCI China Index DWS China Equity Fund Performance since inception: 4th January 2005

+114.90%
200

150
100 50

+55.64%

Sep-11

28

Source: Bloomberg as of 30th September 2011. Performance in SGD and on bid-bid basis. Rebased at inception date: 04th January 2005 = 100. Past performance is not necessarily indicative of future performance.

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Sep-05

Sep-06

Sep-07

Sep-08

Sep-09

Sep-10

Jan-11

May-05

May-06

May-07

May-08

May-09

May-10

May-11

DWS China Equity Fund

Risk return comparison (as of 31st August 2011)
Average Returns (annualized)
1 Year (%) DWS China Equity MSCI China Outperformance 3 Years (%) 5 Years (%) Since Inception (%)

-7.71 -11.37 3.66

1.07 -2.17 3.24

11.16 6.42 4.74

17.08 13.03 4.05

Standard Deviation (annualized)

1 Year (%) DWS China Equity MSCI China 2 Years (%) 3 Years (%) 5 Years (%) Since Inception (%)

13.33 13.75

14.73 13.66

23.38 24.80

27.00 29.78

24.60 27.07

Source: Harvest Global Investments Ltd., Gross of fees in SGD as of 31st August 2011, NAV publication date: 4th January 2005 Past performance is not indicative of future performance Deutsche Asset Management (Asia) Limited (DeAM Asia) appointed Harvest Global Investments Limited as the sub-manager of DWS China Equity Fund (the Fund) with effect from 1 September 2009. Performance before 1 September 2009 refers to that of the Fund managed by DeAM Asia. The investment objective of the Fund remains the same and is managed by 29 the same management team with similar investment policies and strategies

DWS China Equity Fund

Portfolio holdings (as of 31st August 2011)
Principal holdings (%)
China Mobile Ltd. Industrial & Commercial Bank of China Ltd. China Construction Bank Corp. CNOOC Ltd. PetroChina Co. Ltd. China Merchants Bank Co. Ltd. China Pacific Insurance (Grp) China Telecom Gorp. Ltd. China Coal Energy Company Ltd. Ping An Insurance Co. Telecommunication Financials Financials Energy Energy Financials Financials Telecommunication Energy Financials 8.39 7.80 6.04 4.99 4.08 3.96 3.84 3.01 2.89 2.83

For illustrative purpose only. Holdings are subject to change without notice This does not constitute as a recommendation to buy or sell any of the securities mentioned
30 Source: Harvest Global Investments Ltd., as of 31st August 2011

Importance of in-depth China knowledge and local expertise:

Harvest Global Investments (HGI): Sub-manager of the DWS China Equity Fund
Strengths of the DWS & Harvest partnership:
Deutsche Asset Management (Asia) Limited 30 %

In-depth knowledge of the China

market

China Credit Trust Co. , Ltd 40 %

Lixin Investment Co., Ltd 30 %

2nd largest fund management

company

The largest amongst 36 Sino-Foreign

JV asset management companies in China
Harvest Fund Management Co. Ltd (HFM)

To develop best-in-class investment

management platform for China and Asia equities A winning formula for managing China Equities
Source: Harvest Fund Management Ltd,, Harvest Global Investments Ltd. as of 30th June 2011. The industry rank as of 30th June 2011 by Z-Ben Advisors.

100%

Harvest Global Investments Limited (HGI)

31

One of the largest in-house research platforms for China

CIO Janice DAI*
Beijing

Asia Equities Team

Andrew TAN (Head & Deputy CIO) + 3 PMs

Chinese Equities Team

TeamYiqian JIANG (Head) + 3 PMs (HK) + 2PMs (CH) + 1 Analyst (CH)

Risk Management Team [Wayne BI (Head)]*

1 Risk ManagerTrading

Trading Team [Darren LIU (Head)]*

2 Traders

Hong Kong

Harvest Investment/Research Team* (100+ Professionals)

Equity Investment Research Investment & Research 33 Fund Managers Professionals 36 Sector Analysts Average Industry Experience (yrs) Average Experience at Harvest (yrs) 7 3 Fixed-Income Investment Research 6 Fund Managers 5 Credit Analysts 8 3 Other Research Trading Compliance & Risk Management 10 Compliance Officers 3 Risk Managers 4 3

7 Macro and Quantitative Analysts 4 3

21 Traders (6 Portfolio Controllers) 5 3

PR China

32 * Based in Beijing with Harvest Fund Management Co., Ltd.

Industry recognition for the fund management team in 2010 Harvest Global Investments Ltd. (HGI)

Performance / Greater China Region / Five years Winner: Harvest Global Investments Ltd. managing DWS China Equity Fund

Hong Kong / Best Offshore China Fund House Winner: Harvest Global Investments Ltd

33 Source: Harvest Global Investments Ltd.

Fund Awards
2008
Best fund over 3 years Equity China 2009

Best fund over 3 years Equity China

2010 Best fund over 3 years Equity China

34

Portfolio Positioning

DWS China Equity Fund

Sector allocation as of 31st August 2011
Consumer Discretionary Health Care Telecommunication 2.31% 0.80% 13.53% 13.47% 2.30% 1.95% 5.75% 6.03% 4.91% 6.48% 2.79% 5.56% 14.11% 18.76% 33.39% 34.05% 1.81% 0.00% 0% 5% 6.85% 7.19% 10% 15% 20%
(%)

6.04%

11.90%

Portfolio Weight

Benchmark Weight

Utilities
Information Technology Materials Consumer Staples Energy Financials Industrials [Cash]

Top 3 overweights

Consumer discretionary Health Care Utilities

25%

30%

35%

40%

For illustrative purpose only. Holdings are subject to change without notice
36 Source: Harvest Global Investments Ltd. as of 31st August 2011, Benchmark: MSCI China Total

Portfolio positioning
We overweight:
Consumer discretionary (focusing on inflation beneficiaries especially retailers with strong same-store-sales growth). Information Technology (positive on Internet and IT servicing companies which provide strong secular growth with little policy risk). Healthcare (focusing on companies with leading, innovative products which are less affected by price control by government).

We underweight:
Financials (life insurance premium growth slower-than-expected; property policies will continue to be implemented). Industrials (slower industrial production in China in the near term as well as slower overseas demand). Consumer staples (margin pressure as costs are rising while government restricts the increase in product prices; rich valuation).

For illustrative purpose only. This does not constitute as a recommendation to buy or sell any of the securities mentioned
37 Source: Harvest Global Investments Ltd. as of 31st July 2011. Subject to change without notice.

Why invest in the DWS China Equity Fund?

1. Participate in the Chinese growth story Strong economic growth: Stable real consumption and continued infrastructure growth through social housing and hydraulic engineering projects will support the economic growth. 12th Five Year Plan: Sustainable growth for key industries Pro-active government measures: Diminishing concerns over an over-heating economy and a hardlending scenario The Chinese consumer: Growing middle-class with a high spending power Attractive equity market: Current Price / Earnings (P/E) ratio of the Chinese market is below the long term average1

2.

Domestic advantage: Local research teams with in-depth knowledge of the domestic equity markets and sector trends Award-winning fund: Best fund over 3 years (2008, 2009, 2010)

3.

38

Appendix

Potential systematic risks to the Chinese economy

Loose monetary policy Persistently high inflation Capital flight Potential default of local government debt Banks balance sheet under stress

Impact to Chinese economy

Sharp decline in Chinas exports

Sluggish US economic growth

European debt crisis

Potential government measures: Fiscal / Monetary policy RMB appreciation / depreciation China has both the political will and fiscal capacity for stimulus if needed

40 Source: BofA Merrill Lynch Global Research, Oct 2011, DeAM analysis

Investing into China: The different share classes of Chinese companies

A Share B Share H Share
Hong Kong (Chinese companies)

Red Chips

S Chips

Listed on

Shanghai Shenzhen

Shanghai Shenzhen

Hong Kong (Overseas Singapore incorporated stateStock owned or stateExchange controlled enterprises) HKD SGD

Currency traded in

Renminbi

Shanghai (USD) Shenzhen (HKD)

HKD

Available for sale to

Domestic Chinese residents Qualified foreign institutions (QFII scheme)

Non Chinese residents Residents with No resident appropriate foreign restrictions currency dealing accounts

No resident restrictions

No restriction

Examples

Bank of China

Huaxin Cement

Sinopec Shanghai Petrochemical

Lenovo

Yanlord Land

41 Source: Chinadaily, Citywire; illustrations by Deutsche Asset Management

Fund Managers
Jiang Yiqian, Director / Harvest Global Investments Ltd.
Ms. Jiang joined Harvest in September 2009 and is responsible for all Chinese equity investment activities. Prior to Harvest, she worked at Deutsche Asset Management in Hong Kong for 9 years as a portfolio manager for Chinese equities. Her previous experience includes 3 years as an assistant manager of Shanghai International Asset Management (HK) Co., Ltd and 2 years in the Shanghai B share market for Shanghai Shenyin Securities (currently known as Shenyin Wanguo). Ms. Jiang graduated from Shanghai University of Finance and Economics with a degree in Finance. She also holds an MBA in International Banking and Finance from the University of Birmingham, UK.

Michael Huashen Yu, CFA, Portfolio Manager- Harvest Global Investment Ltd.
Michael Yu joined Harvest in May 2010. He starts co-managing the DWS Invest Chinese Equities since September 2010 and is also responsible for China market strategy and China model portfolio. Michael has 12 years of industry experience and 7 years of investment experience. Prior to Harvest, Michael worked for Invesco (HK), managing the pooled HK and China Fund as well as institutional mandates for 3 years. He also worked for China International Capital Corporation (HK) and Cornerstone Asset Management in Canada. He had spent 5 years as a senior loan officer with China Construction Bank. Michael holds a Master of Business Administration degree from the University of Toronto and a Master of Finance degree from the Xiamen University. He is a holder of the Chartered Financial Analyst designation.
Source: Harvest as at September 2010

42

Appendix: Investment Philosophy & Process

Investment Philosophy
Investment philosophy and core competence

We believe that markets (especially for emerging markets) are not always efficient. We believe that fundamental bottom-up research with top-down sector allocation, coupled with strict risk management provide the most reliable method to generate alpha on a consistent basis.

Our core competence lies in our ability to conduct in-depth, effective bottom-up fundamental research and sector analysis

44

Investment Process
Our investment process is a close mapping to reflect our investment philosophy: Investment process can be defined by the following 4 steps: information gathering, information analysis, portfolio construction and risk control/compliance /trading. We are totally committed to research. We are convinced that over the long term market prices are oriented on fundamental values. For this reason, we follow an investment process that is based on our own, inhouse, fundamental evaluation of each individual stock. The functions of research analysis and portfolio management are combined. Portfolio managers are responsible for research and stock selection within their areas of responsibility.
1. Information Collection
Macro Research Strategy Research Equity Research Sector Research Quantitative Research

2. Information Analysis
Daily Meeting

3. Decision Making and Portfolio Construction Risk Management Dept

4. Trade and Risk Management

Fund Manager
Risk Manager

Investment Target

Weekly Meeting

Trade

Portfolio Construction

Portfolio

Monthly Sector Meeting

Quarterly Strategy Meeting

Investment Committee

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Disclaimer
This is for information purposes only and is not the basis for any contract to deal in any security or instrument, or for Deutsche Asset Management (Asia) Limited (DeAM) or its affiliates to enter into or arrange any type of transaction as a consequence of any information contained. This shall not be construed as the making of any offer or invitation to anyone in any jurisdiction in which such offer is not authorised or in which the person making such offer is not qualified to do so or to anyone to whom it is unlawful to make such an offer. The forecasts provided are based upon our opinion of the market as at this date and are subject to change, dependent on future changes in the market. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. Investments are subject to risks, including possible loss of principal amount invested. The value of shares/ units and their derived income may fall as well as rise. Past performance or any prediction or forecast is not necessarily indicative of future performance. No assurance is given that the investment objective or the targets will be met. This document does not constitute investment advice or recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. Investors should study all relevant information and consider whether the investment is appropriate for them. DeAM or its affiliates may hold positions in the securities referred. The investment schemes referred are not obligations of, deposits in, or guaranteed by DeAM or any of its affiliates. As permitted under the Directives of the European Parliament and of the Council of 21st January 2002 relating to the undertakings for collective investment in transferable securities (UCITS), derivatives transactions may be used as part of the investment strategy of the investment schemes and not merely for efficient portfolio management and hedging purposes. Investors should consider the investment policy of that investment scheme and its associated risk profile as disclosed in the Singapore Prospectus. You are not authorised to redistribute this document in any jurisdiction in which such distribution is prohibited, nor qualified to make any offer, representation or contract on behalf of DeAM or its affiliates. Although the information was compiled from sources believed to be reliable, no liability for any error or omission is accepted by DeAM or its affiliates or any of their directors or employees. The information and opinions contained may also change. All third party data (such as MSCI, S&P & Bloomberg) are copyrighted by and proprietary to the provider. DWS is the brand name of mutual funds offered by Deutsche Asset Management (Asia) Limited (Reg. No. 198701485N).

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