2013 q1 thomas white gem global strategies (citywire event in montreux)

CITYWIRE EVENT IN MONTREUX

Global Emerging Markets/Global Equity Strategies 3.31.2013

Douglas M. Jackman, CFA

Executive Vice President

(312) 663.8402

[email protected]

Thomas S. White, Jr.

President and Chief Investment Officer

(312) 663.8350

[email protected]

Christopher G. Neill, CFA

Senior Vice President

(312) 663.8347

[email protected]

For Use In Institutional Presentations Only 2

CONTACT INFORMATION

Firm Overview 4

Investment Team 5

Organizational Structure 6

Investment Process 7

Portfolio Construction 24

Risk Management 27

Performance 28

Disclosures 31


OVERVIEW

Thomas White International, Ltd., founded in 1992, is an employee-owned independent investment management firm based in Chicago and Bangalore, India. The Bangalore office was opened in 2006. The firm has 51 employees, 26 based in Chicago.

The Senior Investment Team averages 24+ years of experience and 17 years together at the firm.

As of March 31, 2013, firm-wide assets of $2.1 Billion, of which 90%+ is managed in international/global equity mandates. Over the past two years, the firm has grown 40% ($600+ million in new AUM across Fund / Institutional / SMA channels).

During 2011, TWI funded $200+ million in new institutional assets, including signature wins for $100 million with Houston Municipal EPS and $16.7 million with Florida International University that seeded a new commingled LLC fund for the international strategy. TWI was also awarded a $10 million mandate with the State Retirement and Pension System of Maryland for the emerging markets strategy.

During 2012, TWI funded $300+ million in new institutional and fund assets, including a $150 million allocation from BofA/Merrill Lynch into the International Fund ($100 million discretionary pool/$50 million Taft-Hartley account). TWI also funded two public fund mandates with the CalPERS and the City of Philadelphia along with a union mandate for a combined $50 million in the international strategy.

During 2H 2012, TWI funded a $75 million mandate with a Canadian pension plan for the global strategy and seeded a Canadian unregistered unit trust for $20 million in the global strategy.

In 2Q 2013, TWI will launch a new UCITs IV Structure out of Dublin. This vehicle will be seeded with $50 million in the global strategy and the firm has created a shelf registration for the emerging markets strategy.

Since 2010, the Firm has conducted an annual SSAE 16 audit (formerly a SAS-70) of the firm’s internal policies and procedures.


FIRM HISTORY/SUMMARY

Thomas S. White, Jr. President Chief Investment Officer Yrs TWI: 21 Yrs Exp: 47

Wei Li, Ph.D., CFA Executive Vice President Director of Research Yrs TWI: 19 Yrs Exp: 19

Douglas M. Jackman, CFA Executive Vice President Director of Institutional Dept Yrs TWI: 18 Yrs Exp: 22

Jinwen Zhang, Ph.D., CFA Executive Vice President Assistant Director of Research Yrs TWI: 14 Yrs Exp: 14

John Wu, Ph.D., CFA Senior Vice President Senior Research Officer Yrs TWI: 14 Yrs Exp: 18

Investment Committee

Investment Team/Chicago Title/Role

Years at Firm

Years Experience Education

David Sullivan II Director of Trading 19 19 MBA - University of Chicago B.S. - DePaul University

Marc Ma, Ph.D. Director of Research Technology 9 9 Ph.D. – UT at Austin; Masters of Computer Science, UT Austin; B.S. - Nankai University

Rex Mathew, CMA Senior Research Analyst 6 6 B.S. - Mahatma Gandhi University

Chetan Desai, CFA Senior Research Analyst 6 6 Masters Tech - IIT Bombay B.Eng. - University of Mumbai

Rishabh Halakhandi, CFA Senior Research Analyst 6 6 Masters Tech - IIT Kanpur B.Eng. – IIT Kanpur

Investment Team / Chicago


INVESTMENT TEAM

Chicago Head Quarters

Bangalore Subsidiary

1) Run monthly valuation studies 2) Monitor valuation groups 3) Create initial stock ranks 4) Draft request for proposals 5) Update economic reports 6) Complete performance reports

1) Analyze monthly valuation studies 2) Monitor valuation groups 3) Finalize initial stock ranks 4) Edit request for proposals 5) Direct economic reports 6) Evaluate performance reports


INTEGRATION OF OFFICES

# of companies

% of Market Cap*

# of companies

% of Market Cap* # of

companies % of

Market Cap*

EMERGING MARKETS 973 100.00% Asia Pacific 644 60.51% Malaysia 45 3.61% India 117 6.73% 43. Stable 24 1.93% Europe, Middle East, Africa 165 17.53% 22. Stable 35 1.50% 44. Financials 10 1.15%

1. Czech Republic 5 0.25% 23. Energy 9 0.77% 45. Cyclical 11 0.53% 2. Hungary 4 0.21% 24. Financials 23 2.02% 46. Philippines 22 1.11% 3. Poland 23 1.40% 25. Cyclical 42 1.27% Taiwan 119 11.00% 4. Russia 36 5.98% 26. Technology 8 1.18% 47. General 48 3.24%

Turkey 26 2.21% China 175 18.40% 48. Financials 21 1.84% 5. General 19 1.13% 27. Stables 48 3.24% 49. Lg Elect 22 5.32% 6. Banking 7 1.08% 28. Utilities 15 2.95% 50. Sm Elect 28 0.60%

South Africa 57 7.12% 29. Energy 6 2.51% Thailand 34 2.46% 7. Stable 19 2.86% 30. Banking 9 4.76% 51. General 27 1.66% 8. Cyclical 12 1.42% 31. Real Estate 23 1.14% 52. Banking 7 0.80% 9. Financial 15 1.80% 32. Automobiles 9 0.46%

10. Metals & Mining 11 1.05% 33. Basic Goods 32 1.37% 11. Egypt 8 0.28% 34. Cyclical 24 1.60% 12. Morocco 6 0.08% 35. Transportation 9 0.36%

Indonesia 29 3.10% Latin America 164 21.96% 36. Stable 13 1.11% Mexico 35 5.64% 35. Banking 6 1.07%

13. Stable 22 4.12% 38. Cyclical 10 0.92% 14. Cyclical 13 1.52% Korea 103 14.11%

Brazil 87 12.72% 39. Stable 23 1.73% 15. Public Utilities 21 1.43% 40. Financials 19 1.97% 16. Financials 9 3.47% 41. Technology 11 5.05% 17. Resources 10 3.64% 42. Cyclical 50 5.36% 18. General 47 4.17% 19. Chile 27 1.96% 20. Colombia 12 1.21% 21. Peru 3 0.43%

Comparison: TWI vs MS EM Index

Number of Issues Market Cap Free Float Market

TWI Universe 973 $9,605B $3,724B

MSCI EM Index 823 $7,758B $3,815B

* % of TWI's Universe Market Cap by Free Float

(as of March 31, 2013)


TWI’S EMERGING MARKETS EQUITY SUB-UNIVERSE VALUATION GROUPS

Valuation Framework: Sets the initial framework for the most attractive companies within a sub-

valuation group.

Downside Protection: Historical studies measure stock price performance over multiple market

cycles and during the worst 25% of monthly observations – build downside protection into the

front end of the process.

Monthly Revaluation: All stocks in the TWI Global/EM Universes are formally revalued at the end

of every month.

Customized for Industry/Region: The fundamental drivers that explain the price behavior are

customized for each sub-group.

Adjusted for Market Evolution: The sub-valuation groups will change or migrate over time as

markets evolve such as in China.


QUANTITATIVE COMPONENT (70%)

China's economic growth had triggered a larger number of new stocks to analyze within the combined H-Share and HK-Red Chip universes (from 31 in 1997 to over 173 in 2012).

China’s overall weight grew from 0.1% in 1998 to 4.5% of the MSCI AC World x US benchmark as of 12/31/2012 and from 0.7% in 1998 to 18.3% of the MSCI EM index as of 12/31/2012.

We are anticipating that global managers are more likely to start selecting stocks within industries (consumer durables, cyclicals, transports, energy, utilities, banking, real estate, basic goods, and stables).

Our conclusions are based on:

(1) prior observations of the largest stocks in each of the new industry sub-valuation groups; (2) comparisons with the evolution of other stock markets, both developed and emerging, in prior periods; and (3) the collective experience, objective analysis and judgment of the senior investment committee in assessing change at the country/industry level.


CHINESE STUDIES: RATIONALE FOR NEW INDUSTRY GROUPS

TWI Industry Groups 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Chinese Stables 7 5 4 4 3 3 4 8 15 17 21 21 20 35 41 45 Chinese Telecom/Utilities 1 2 2 4 5 8 8 11 12 12 12 11 11 11 15 15 Chinese Energy 1 1 1 1 4 4 4 4 4 5 6 7 7 8 6 6 Chinese Banking 0 0 0 1 0 0 0 0 2 4 5 5 5 8 9 9 Chinese Real Estate 2 2 2 2 4 4 4 4 6 10 14 13 13 22 22 24 Chinese Automobiles 3 4 4 4 3 2 3 5 5 7 7 7 7 5 9 9 Chinese Basic Goods 11 9 6 6 5 5 5 11 12 12 16 17 17 27 31 32 Chinese Cyclical 3 3 4 4 3 3 3 8 15 15 16 17 17 22 26 24 Chinese Transportation 3 4 6 6 8 8 8 11 14 14 15 14 14 10 9 9

Total 31 30 29 32 35 37 39 62 85 96 112 112 111 148 168 173

TWI Industry Groups 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Chinese Stables 43% 18% 11% 8% 4% 4% 4% 11% 9% 10% 12% 12% 14% 14% 18% 17%

Chinese Telecom/Utilities 2% 55% 73% 76% 52% 48% 37% 33% 25% 18% 20% 20% 13% 11% 17% 16%

Chinese Energy 3% 1% 0% 0% 31% 36% 47% 38% 34% 24% 22% 20% 19% 18% 14% 14%

Chinese Banking 0% 0% 0% 1% 0% 0% 0% 0% 14% 34% 24% 31% 33% 32% 22% 25%

Chinese Real Estate 14% 7% 4% 3% 3% 2% 1% 1% 2% 3% 4% 3% 4% 4% 5% 7%

Chinese Automobiles 7% 4% 2% 1% 1% 0% 1% 1% 1% 1% 1% 0% 1% 1% 3% 3%

Chinese Basic Goods 17% 8% 5% 3% 2% 2% 3% 7% 7% 6% 10% 9% 10% 10% 10% 8%

Chinese Cyclical 7% 3% 1% 5% 4% 3% 2% 3% 5% 3% 3% 3% 4% 6% 9% 9%

Chinese Transportation 7% 4% 4% 4% 4% 5% 4% 5% 4% 2% 4% 2% 3% 3% 2% 2%

Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

China’s Wgt in MSCI EM Index 0.5% 0.7% 0.5% 6.9% 6.2% 6.6% 7.9% 7.7% 7.6% 11.8% 15.9% 18.2% 17.9% 17.3% 17.8% 18.3%

Chinese Name Count and Market Capitalization by TWI New Industry Groups


EVOLUTION OF A MARKET: RAPID STOCK MARKET GROWTH & INDUSTRY CHANGE

Historically we had evaluated stocks that were Hong Kong-listed under an H-Share (i.e. companies incorporated on the mainland) as well as a Red Chip methodology (i.e. companies incorporated outside the mainland) using mostly classical valuation techniques (with an emphasis on low Price-to-Earnings ratios) coupled with a positive earnings revision component. For the H Shares: Price- to- Current and Forward EPS (consensus FY0, FY1 and FY2) and Recent Earnings Revisions (hi-lo) For the Red Chips: Three Low-Valuation Ratios (Forward P/E, EV/EBITDA, P/CF) and Recent Earnings Revisions (hi-lo) This approach worked very well during most periods over the past decade, including bull and bear markets

H-Share Study

70% P/E Ratios (Current, FY1 and FY2)

30% EPS Revisions past 3mos. (Net Est. Direction FY1, FY2) + (Magnitude of Revisions FY1, FY2)

Red Chip Study

25% Forward P/E Ratios (FY1 and FY2) 25% Enterprise Value-to-EBITDA 25% Price-to-Cash Flow

25% EPS Revisions past 3mos. (Net Est. Direction FY1) + (Magnitude of Revisions FY1, FY2)

70% Consensus Current +

Forward P/E

30% Positive EPS

Revisions

25% Consensus

Forward P/E

25% P/Cash Flow

25% EV/EBITDA

25% Positive EPS

Revisions


PREVIOUS CHINESE CASE STUDIES: MARKET STRUCTURE-DRIVEN

Excess Return

Annualized Mean Return

RETURN # OF PERIOD STKS STARTS EQ-WTD # OF WITH M END 1 2 3 4 5 6 7 8 9 10 UNIV STKS DATA

8.03 -32.19*7 -51.10 -43.02 -40.95 -23.34 -30.77 -39.14 -44.11 -36.02 -36.44*7 -38.00 67 628.04 -36.61*7 -30.59 -39.83 -39.48 -40.51 -31.48 -20.34 -21.89 -32.54 -29.43*7 -32.28 69 638.05 -13.40*7 19.52 -17.87 -26.36 -17.05 -15.22 -35.48 -20.95 -8.76 -7.25*7 -14.27 69 658.06 1.35*7 35.25 18.64 -8.60 -7.57 -13.04 7.65 -14.08 10.04 12.09*7 4.17 70 678.07 33.86*7 43.83 3.01 13.83 6.43 -1.56 21.16 37.86 13.53 16.49*7 18.85 70 668.08 44.38*7 24.44 15.62 10.57 30.76 26.59 17.48 4.02 12.82 26.65*7 21.33 70 668.09 97.05*8 80.81 68.52 52.97 93.74 50.51 52.03 64.51 46.19 60.43*7 67.10 71 668.1 141.16*8 150.00 115.59 86.90 110.28 95.63 108.78 110.63 93.85 79.67*7 109.70 71 708.11 140.98*8 100.65 126.32 119.19 111.21 108.83 92.49 122.52 95.08 55.27*7 107.73 71 668.12 123.57*7 91.41 112.25 88.88 60.32 107.53 63.21 113.24 91.50 38.17*7 89.01 70 66

----------- ----------- Mean Return 34.14 26.23 20.86 18.79 18.1 24.65 22.88 20.2 21.08 16.95 22.51

STDEV 54.83 50.76 49.36 48.34 51.42 47.53 49.39 51.25 49.77 51.78 45.41 ----------- DownPeriodM LowerQuarti -28.35 -32.94 -27.56 -24.84 -35.69 -30.48 -36.69 -38.31 -27.12 -33.87 -31.59

Winning % 73.23 60.63 51.18 43.31 45.67 51.97 52.76 41.73 44.09 29.13 81.89 Avg WinFreq 63.16 49.8 47.35 46.21 42.01 49.08 44.61 41.74 43.49 41.46 47.00

Study Period September 1997 thru

December 2009


PREVIOUS CHINESE STUDY: (H)-SHARES

RETURN # OF PERIOD STKS STARTS EQ-WTD # OF WITH M END 1 2 3 4 UNIV STKS DATA

Mean Return 29.01 22.30 15.23 10.55 19.50 STDEV 36.32 38.02 45.36 41.25 35.42

----------- DownPeriodM LowerQuarti -2.00 -8.96 -24.41 -23.69 -14.31

Winning % 79.13 43.48 43.48 29.57 79.13 Avg WinFreq 58.91 46.52 40.29 29.64 44.20

Study Period October 2000 thru

April 2011

Chinese Utilities 40% Enterprise Value to EBITDA (lo-hi) 40% Price to Book (lo-hi) 20% Operating Margins (hi-lo)

40% Enterprise

Value/ EBITDA

20% Operating

Margins

40% Price/ Book


NEW INDUSTRY GROUP – CHINESE (H/RC) UTILITIES

Calendar Year Returns

2007

2008

RETURN # OF PERIOD STKS STARTS EQ-WTD # OF WITH M END 1 2 3 4 UNIV STKS DATA

07.01-07.12 Mean Return 2.50 -21.07 -15.25 -4.45 -8.34 14 14

STDEV 38.50 35.24 40.64 33.63 35.18----------- AvgValueAdd 10.84 -12.72 -6.91 3.89 6.95 Winning % 100.00 0.00 16.67 66.67 75.00

Avg WinFreq 64.58 11.11 36.11 68.75 48.21

08.01-08.12 Mean Return 13.52 -0.57 -4.34 -0.33 2.66 14 14

STDEV 31.31 30.52 22.02 26.56 25.78----------- AvgValueAdd 10.86 -3.23 -7.00 -2.99 13.85 Winning % 100.00 16.67 25.00 41.67 91.67

Avg WinFreq 56.25 38.89 38.89 38.19 43.54

IN AVG RK1 RK2 RK3 RK4 TWI TWI UNIV EX EX EX EX EX IND SUB IND COUNTRY COMPANY NAME (%) RET% RET% RET% RET% RET%

UTILITIES Toll Roads and CHINA COMPANY NAME 1 100% 9 27 11 9 -5 UTILITIES Toll Roads and CHINA COMPANY NAME 2 94% 7 25 10 8 -9 UTILITIES Electric Utilit CHINA COMPANY NAME 3 100% 7 15 22 7 -14

Examples of Stock Rotation


NEW INDUSTRY GROUP – CHINESE (H/RC) UTILITIES

Value 60% Growth

15%

Quality 15%

Other 10%

For use in institutional presentations only. The economic/financial variables shown for each of the sub-universe valuation groups represent a characteristic element and corresponding rationale, as chosen by our investment team, resulting from our analysis on how to explain past pricing behavior within a country/industry grouping. There is no guarantee that the variables shown will remain effective in explaining past pricing behavior in the future. This presentation is shown as supplemental information only and is meant to complement the valuation group studies conducted internally by our analysts. Individual copies of the studies are available upon request.

Driver Value Growth Quality Other

Sub-Valuation Group Turkey General South African Cyclical Chinese Utilities Brazilian Financials

Characteristic Example Price-to-Sales % Change in EPS Estimate Operating Profit Margin 12-month Change in Shares

Rationale P/Sales improves the value added and down market

protection

12 month forward looking IBES data on earnings

momentum works consistently

Above-average operating margins help toll roads to

stand out

Share buybacks have been an effective signal,

particularly in down market periods


EXAMPLES OF DRIVERS ACROSS SUB-VALUATION GROUPS

Analysis of Company Fundamentals: All rank one or top decile opportunities are evaluated for

their business model strengths. Emphasis is placed on accounting methods, management

effectiveness, and new products.

Identified Trends Drive Active Tilts: Active tilts exist in those sub-valuation groups where we have

identified trends at the company, industry, or macro-level based on current market conditions

not captured in the historical studies.

Continuous Monitoring of Holdings: Current holdings are continuously monitored for changes in

their competitive landscape.


FUNDAMENTAL COMPONENT (30%)

TATA MOTORS (COMPANY LEVEL TILT)

Largest automobile manufacturer in India, best known for attractively priced vehicles.

Acquired Jaguar Land Rover from Ford in 2008,

and successfully turned it around.

Fifth largest manufacturer of commercial vehicles globally.

More than 60% market share in the commercial

vehicles segment in India.

Marketing Tata branded vehicles in Asia and Africa, both passenger and commercial segments.


TATA MOTORS (COMPANY LEVEL TILT)

Jaguar Land Rover (JLR) now contributes more than two-thirds of revenues and nearly 90% of earnings. JLR will likely drive earnings expansion in the near future, as demand for luxury vehicles remains buoyant across the world.

Strong global brand recognition and healthy product pipeline for Land Rover. After successfully expanding product

range to smaller SUVs, now re-launching flagship models.

In the process of reviving fortunes at Jaguar, with new high end sports cars such as the F-Type and quality improvements.

Setting up new engine plant to manufacture more efficient engines and to reduce reliance on engine suppliers such as Ford.

Commercial vehicle segment in India now facing a cyclical downturn, as government spending and construction activity

has slowed.

Passenger vehicle sales in India also facing rough weather, especially in the low priced segment. Lack of new products has hurt Tata Motors in the passenger cars market.

Tata Motors’ brand image as a low cost manufacturer accentuated after the launch of the Nano, the world’s cheapest

car, which has so far failed to build volumes.


Africa is urbanizing fast and there is a growing trend of ‘consumerisation’. Nearly 40% of the population already live in urban areas, a lower ratio than China’s but higher than in India.

By 2050, 63% of Africa’s population is expected to live in urban areas. The Economist Intelligence Unit estimates that by 2030, the top 18 cities in Africa will have a combined spending power of $1.3 trillion annually.

There was also a rise in educational attainment among the South Africans. A survey by Statistics South Africa showed that among blacks in middle-class households, 29% attained a BA/Diploma or higher. This has expanded their earning potential and, as a result, discretionary spending.

SOUTH AFRICAN STABLE GROUP (INDUSTRY LEVEL TILT)

SOUTH AFRICAN STABLE GROUP WEIGHT: 5.5% MSCI EM BENCHMARK WEIGHT: 2.9%


• Woolworths is a mid-to-high end apparel, cosmetics, and food retailer, mostly under own private brands

• Over 400 stores across Africa/Middle East; owns majority (88%) of Australian clothing retailer Country Road

• Healthy revenue (12%) and earnings (30%) growth for the financial year ended June 2012

• Currently has about 50 stores outside South Africa (operates in Kenya, Botswana, and Ghana)

• Strong organic food retailing focus, and priced at the upper end

• Also has a financing arm, which offers consumer credit and store cards

Food Retailers Mkt. Cap $B

Free Float

$B Consumer Segment Stores ADR/GDR In

MSCI/RB

Shoprite Holdings Ltd 11.4 8.6 Lower and Middle Income >1,800 ADR Yes

Pick n Pay Stores Ltd 2.2 1.1 Middle Income >750 - Yes

Spar Group Ltd (ZA) 2.1 2.1 Middle and High Income >800 - Yes

Woolworths Holding Ltd 6.5 5.9 High Income > 400 GDR Yes


SOUTH AFRICAN STABLE GROUP

CHINESE BASIC GOODS AND CYCLICAL GROUPS (MACRO LEVEL TILT)

For Chinese Basic Goods, the model has not worked as well over the past 12 months. We believe this was due to the far above average volatility of stock prices in this valuation group. This high volatility was attributed to macroeconomic uncertainties in the development trend for the domestic economic growth, especially in the local supply/demand outlook for metals, cements, coals and chemicals.

When infrastructure growth in China slowed down, coupled with policy uncertainties, each sub-industry responded differently, including the change in length of a cycle. In the high volatility regimes, which were often associated with down markets, good defense was to stay in the more stable stocks, even though these stocks may not be selected by models as the most attractive ones.

For the Chinese Basic Goods valuation group, it turns out the large state-owned-enterprises (SOEs) served this purpose well. The large SOEs may not be the ones that operate most efficiently, but they have many advantages, such as enjoying monopolistic status as well as having a lower cost of capital.

In this environment we have owned Jiangxi Copper and Anhui Conch Cement, when the model does not rank them so favorably. Jiangxi Copper is the largest copper producer in China, and Anhui Conch Cement is the largest cement producer in China. Both are SOEs.

For the Chinese Cyclical group, we hold Lenovo Group and Tencent, although the model does not rank them so favorably. Both companies are leaders in their respective markets. These two stocks were less volatile among the stocks in the valuation group, because their businesses are less dependent on infrastructure stimulus, and more dependent on consumer spending in a growing information technology market.


Chinese Cyclical Valuation Model

40% Value Driver (EV / EBITDA) + 40% Profitability Driver (Net Margin) + 20% Other Driver (D/E)

1) Chinese Cyclical Weight: 1.6% of MSCI EM benchmark

2) Model effectiveness, particularly in recent down market environments, lifts Valuation Group weight

3) Current Industry/Market conditions in China tempers the Valuation Group Tilt

4) Total Chinese Cyclical weight = 2.9%

Rationale for Portfolio Construction:

Technology preferred over Capital Goods/Equipment for domestic demand and scale advantages

Secular/Stable growth opportunities look more attractive than traditional cyclical growth opportunities

Company-specific fundamentals are dominating our stock selections for this Valuation Group

Portfolio Weight EV/EBITDA Net

Margin Debt-to-

Equity

Lenovo Group 1.8% 8.1x 1.6% 2.7%

Tencent Holdings 1.1% 24.2x 28.7% 41.2%

Chinese Cyclical Valuation Medians 6.4x 4.7% 66.0%


INVESTMENT PROCESS: CHINESE CYCLICAL EXAMPLE

Quantitative Component

• Data gathering & quality checking for TWI universe • Historical studies of drivers that explain stock returns • Run structured models of valuation groups • Generate a decile rank for each stock in our coverage • Create a monthly list of potential buys and sells

Fundamental Component

• Conduct due diligence on the top decile ranks • Evaluate accounting, management, products • Evaluate competitive landscape at industry level • Evaluate recent effectiveness of valuation group • Narrow top decile to the most attractive stocks

Roughly 70% of the investment process Input from Analysts and Portfolio Managers

Roughly 30% of the investment process Input from Senior Analysts and Portfolio Managers

Investment Committee

Final Stock and Portfolio Design Decisions

SUMMARY OF THE INVESTMENT RESEARCH PROCESS


Buy and sell discipline is a systematic and objective process, with the portfolio finalized by 5-member Investment Committee

Stock weights are a reflection of:

1) Sector and Country weight of the MSCI benchmark

2) Effectiveness of Valuation Group

3) Analysis of current market conditions and risk of each Valuation Group

Actively Manage Portfolio Risk

Monitor sector / regional weights at the aggregate level (+/- 10% of index)

Stock selection dominates performance attribution

Turnover typically ranges 30 %– 50% annually

Sell Discipline

Stock reaches fair relative valuation - generates sell

Fundamentals quickly deteriorate - generates sell


PORTFOLIO CONSTRUCTION


Port. IndexPort. Index Country Country

TWI Valuation Group Weight Weight Difference Weight Weight Notes

Brazil Fin 1.67 3.42 -1.75Brazil Gen 2.70 4.87 -2.17 0.6x BRZ General Brazil Publc Util 5.34 1.43 3.91 3.8x BRZ Public Util Brazil Resources -- 2.97 -2.97 9.71 12.69 No BRZ Resources Chile 1.29 1.98 -0.69China Automobiles 1.27 0.46 0.81China Banking 3.60 4.65 -1.05China Basic Goods 2.11 1.38 0.73China Cyclical 2.89 1.57 1.32China Energy 1.08 2.53 -1.45China Real Estate 1.68 1.15 0.53China Stables 2.56 3.07 -0.51China Transportation 0.47 0.37 0.10China Utilit ies 1.30 2.88 -1.58 16.96 18.06Columbia 0.40 1.21 -0.81Czech Republic 1.03 0.25 0.78Egypt -- 0.27 -0.27Hungary -- 0.21 -0.21India Cyclical 0.95 1.21 -0.26India Energy -- 0.75 -0.75India Financial 1.49 1.95 -0.46India Stable 0.91 1.50 -0.59India Technology -- 1.18 -1.18 3.35 6.59Indonesia Banking 2.80 1.06 1.74Indonesia Cyclicals 2.36 0.90 1.46Indonesia Stable 2.18 1.08 1.10 7.34 3.04Korea Cyclical 2.79 5.22 -2.43 KWN Cyclical 0.5xKorea Financials 1.85 1.97 -0.12Korea Stable 3.06 2.21 0.85Korea Technology 4.59 5.89 -1.30 12.29 15.29

EM GROUP WEIGHTS VERSUS MSCI EM INDEX AS OF 3-31-13


Port. IndexPort. Index Country Country

TWI Valuation Group Weight Weight Difference Weight Weight Notes

Malaysia Cyclicals -- 0.80 -0.80Malaysia Financials 1.91 1.07 0.84Malaysia Stable 0.97 1.62 -0.65 2.88 3.49Mexico Cyclicals 3.99 1.31 2.68 MEX Cyclical 2xMexico Stable 4.26 3.86 0.40 8.25 5.17Morocco -- 0.08 -0.08Peru 0.32 0.43 -0.11Philippines 1.27 0.91 0.36Poland 1.84 1.54 0.30Russia 5.22 6.00 -0.78S.Africa Cyclical 2.93 1.36 1.57S.Africa Financial 0.82 1.84 -1.02S.Africa Metals & Mining 0.94 1.35 -0.41S.Africa Stable 5.47 3.20 2.27 10.16 7.75 ZAR Stable 1.8xTaiwan Financials 0.52 1.63 -1.11Taiwan General 1.04 3.45 -2.41 TWD General 0.3xTaiwan Lg Elect 4.10 5.00 -0.90Taiwan Sm Elect -- 0.71 -0.71 5.66 10.79Thailand Banking 2.51 0.94 1.57Thailand General 3.49 1.44 2.05 6.00 2.38 BHT General 1.5xTurkey Banking 0.59 0.97 -0.38Turkey General 3.61 1.00 2.61 4.20 1.97 LIR General 2.6xCanada Energy 0.73 -- 0.73HK General 1.95 -- 1.95

Total 100.00 100.00

Holdings and allocations are subject to change at any time and are not recommendations to buy or sell any security. Source: FactSet Research Systems. Valuation group and country weights are for a representative account within the strategy. Information for this report was received from what we believe to be reliable third parties, however, completeness, accuracy and suitability cannot be guaranteed. The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of 21 emerging market countries. The index is unmanaged and returns assume the reinvestment of dividends. It is not possible to invest directly in an index.

EM GROUP WEIGHTS VERSUS MSCI EM INDEX AS OF 3-31-13

Benchmark : MSCI Emerging Markets Index

Number of Positions: 80-120

Maximum Position Size: 5% (typically range from 0.25% - 2.5% at purchase); average 0.75%

Maximum Deviation from Index: Sector Weights +/- 10.0% of the index (usually +/- 7.5% or less) Country/Region Weights +/- 10.0% for countries/regions > 20% of the index (usually +/- 7.5% or less) Currency Hedging: Portfolio is not hedged (100% local currency exposure)

Cash Management: Maximum 10% cash

Portfolio is fully invested with usually 5% or less cash

Client Restrictions: Review portfolio on-going for any client restrictions

Trading Analysis: Monitor on-going trading effectiveness and commission costs


RISK MANAGEMENT

11.43%

21.49%

3.91%

8.72% 8.57%

1.05%

8.30%

17.05%

1.09% 3.27% 1.96%

-1.62% -5%

0%

5%

10%

15%

20%

25%

30%

35%

Since Inception1/1/2000

10-yr 5-yr 3-yr 1-yr 1st Quarter

TWI Emerging Markets Equity (gross) MSCI Emerging Markets Index (net)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD 2013

TWI EM Equity(gross) -29.0 3.9 -13.1 54.4 23.7 56.4 41.7 38.5 -53.3 75.8 25.8 -13.1 22.9 1.1

MSCI EM (net) -30.8 -2.6 -6.2 55.8 25.6 34.0 32.2 39.4 -53.3 78.5 18.9 -18.4 18.2 -1.6

Past performance should not be construed as a guarantee of future performance. . Performance results shown are gross of fees and include the reinvestment of all income. Prior to June 30, 2010, the emerging market composite is comprised solely of the emerging market segments of larger global and international portfolios. As of June 30, 2010 the Thomas White Emerging Market Fund is included in the composite. The presentation above is shown as supplemental information only and complements the Thomas White International Emerging Markets Equity Composite Disclosure, which is included in this presentation.



EMERGING MARKETS EQUITY INVESTMENT PERFORMANCE

2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08

Global Equity Strategy 6.0% 7.5% 6.2% 7.8% 5.2% 6.4% 7.2% 7.0% 10.4% 14.7% 15.3% 13.3% 13.8% 13.8% 16.2% 15.1% 14.5% 13.6% 14.2% 14.9%

MSCI AC World Index 4.0% 4.4% 4.4% 4.9% 4.5% 4.9% 5.2% 5.3% 5.9% 6.4% 6.8% 7.2% 7.2% 7.5% 8.1% 8.4% 9.2% 10.3% 11.3% 11.4%

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

Global Equity Strategy 14.0% 12.2% 9.6% 10.5% 13.9% 13.6% 16.4% 17.3% 17.1% 22.6% 22.5% 21.2% 21.4% 18.0% 16.9% 19.4% 18.6% 16.3% 19.8% 17.2%

MSCI AC World Index 11.5% 10.2% 9.5% 10.9% 12.0% 12.3% 13.0% 12.9% 13.3% 13.7% 13.9% 13.7% 13.5% 12.8% 12.6% 12.9% 12.5% 12.6% 13.1% 12.2%

Source: Thomas White International. The emerging market weightings are from the largest, most representative global equity portfolios managed by the firm over the rolling 10-years as of 3/31/2013 versus the MSCI ACW Index. The presentation above is shown as supplemental information only and complements the Thomas White Global Equity Composite Disclosure. Portfolio weightings are subject to change daily.

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%


THOMAS WHITE GLOBAL EQUITY STRATEGY EMERGING MARKET VARIANCE

9.86%

12.47%

3.41%

9.51% 9.77%

6.44% 6.70%

9.36%

2.06%

7.78%

10.55%

6.50% 6.35%

8.88%

2.23%

8.46%

11.85%

7.73%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Since Inception6/30/1989

10-yr 5-yr 3-yr 1-yr 1Q13

TWI Global (gross) MSCI ACWI (net) MSCI World (net)

Past performance should not be construed as a guarantee of future performance. TWI’s performance results shown are gross of fees and include the reinvestment of all income. The presentation above is shown as supplemental information only and complements the Thomas White International Global Composite Disclosure, which is included in this presentation. *Index Returns from 6/30/1989 through 12/31/98 represent gross dividends as net returns are not available.

1989 2nd half

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD 2013

TWI Global Equity(gross) 14.6 -2.9 21.1 -7.1 39.5 0.2 22.5 22.3 20.2 19.5 22.7 -10.4 -13.1 -15.5 32.4 18.3 21.7 26.8 15.7 -40.2 31.2 16.1 -3.6 14.9 6.4

MSCI ACWI (net)* 17.7 -16.5 19.9 -4.2 24.9 5.0 19.5 13.2 15.0 22.0 26.4 -14.2 -16.2 -19.3 34.0 15.2 10.8 21.0 11.7 -42.2 34.6 12.7 -7.4 16.1 6.5

MSCI World (net) 15.7 -17.0 18.3 -5.2 22.5 5.1 20.7 13.5 15.8 24.3 24.9 -13.2 -16.8 -19.9 33.1 14.7 9.5 20.1 9.0 -40.7 30.0 11.8 -5.5 15.8 7.7



GLOBAL EQUITY INVESTMENT PERFORMANCE

The TWI Emerging Markets Equity Composite contains fully discretionary Emerging Markets accounts and for comparison purposes is measured against the MSCI Emerging Markets (net) Index From Jan 1997 through Dec 2000, MSCI EM net of dividends returns are unavailable, and therefore gross returns were used for this period. The MSCI Emerging Markets (net) index uses withholding tax ranges applicable to Luxembourg based holding companies.

Thomas White International, Ltd. claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Thomas White International, Ltd. has been independently verified for the periods July 1, 1992 through December 31, 2011.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Emerging Markets Equity Composite has been examined for the periods January 1, 2000 through December 31, 2011. The verification and performance examination reports are available upon request.

Thomas White International, Ltd. is an independent registered investment adviser. The firm maintains a complete list and description of composites, which is available upon request.

The Emerging Markets Composite was created January 1, 2010. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Non-fee-paying accounts are not included in this composite. Composite performance is presented net of foreign withholding taxes. Capital gains, dividend and interest received may be subject to withholding tax imposed by the country of origin and such taxes may not be recoverable. The MSCI Index range uses withholding tax rates applicable to Luxembourg holding companies. Withholding taxes may vary according to the investor’s domicile. Composite returns represent investors domiciled primarily in the United States, Bermuda and United Kingdom. Leverage is not used in this composite. Past performance is not indicative of future results.

The U.S. dollar is the currency used to express performance. Returns are presented gross and net of management fees which includes a performance based fee, and includes the reinvestment of all income.. All dividends are included in performance calculations as net dividends. Net of fee performance was calculated applying the maximum management fee charged for all accounts in the composite. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The standard deviation is not presented for 2000 through 2010 because it is not required for periods prior to 2011. Additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

The investment management fee schedule for the composite is as follows: for the first $10 million, 0.95%; for the next $15 million, 0.75%; for the next $25 million, 0.70%; for the next $25 million, 0.60%; for the next $25 million, 0.55%; excess over $100 million, 0.50%.

Actual investment advisory fees incurred by clients may vary.

From 1/1/00 through 12/31/09, cash has been allocated on a weighted basis using the cash balances each month for the overall accounts that comprise the EM composite. Cash return has been determined using the weighted average of the cash return for the overall portfolios and applied to the equity-only gross performance. Beginning in 2010, all EM carveout accounts have dedicated cash balances and corresponding returns. Net Fee is calculated using flat fee amount indicated from inception through 12/31/10. Beginning in 2011, Net Fee performance is based on account performance net of actual fees.


TWI EMERGING MARKETS EQUITY PERFORMANCE DISCLOSURE

*Composite dispersion is not shown for periods where there are an insufficient number of portfolios in the composite for the entire year. 1The three-year annualized ex-post standard deviation is not required to be presented for periods prior to January 1, 2011.

1Q 2013 YTD 1 yr 3 yrs 5 yrs 10 yrs Since Inception (1/1/2000

0.87% 0.87% 7.73% 7.82% 2.97% 20.34% 10.36%

Net of Fee Performance – As of 3/31/2013

Year End USD Millions

Total Firm Assets

(Millions)

% of Carve-Out Portfolios in Composite

% of Firm Assets

Accounts at Year End Gross Net

Annual Std.

Deviation*

3-Year Std. Deviation¹

MSCI Emerging

Markets (net)

3-Year Std. Deviation (Index)¹

2012 427 1,962 90% 22% 19 22.87% 21.93% 1.6 21.70% 18.22% 21.50% 2011 297 1,426 88% 21% 14 -13.04% -13.73% 2.2 25.90% -18.42% 25.76% 2010 304 1,435 92% 21% 12 25.78% 24.53% 2.3 - 18.88% - 2009 173 1,083 100% 16% 10 75.84% 74.09% 4.0 - 78.51% - 2008 55 782 100% 7% 7 -53.28% -53.74% 2.6 - -53.33% - 2007 100 1,010 100% 10% Five or fewer 38.46% 37.08% - - 39.39% - 2006 39 426 100% 9% Five or fewer 41.69% 40.28% - - 32.17% - 2005 21 232 100% 9% Five or fewer 56.37% 54.81% - - 34.00% - 2004 7 192 100% 4% Five or fewer 23.67% 22.44% - - 25.55% - 2003 7 238 100% 3% Five or fewer 54.42% 52.88% - - 55.82% - 2002 4 261 100% 2% Five or fewer -13.06% -13.92% - - -6.17% - 2001 3 333 100% 1% Five or fewer 3.94% 2.90% - - -2.61% - 2000 3 376 100% 1% Five or fewer -29.01% -29.71% - - -30.83% -


TWI EMERGING MARKETS EQUITY PERFORMANCE DISCLOSURE

The TWI Global Value Equity Composite I contains fully discretionary global value equity accounts managed using bottom-up stock selections across Global industry groups. For comparative purposes, the Global Value Equity Composite I is measured against the MSCI All-Country World (net) Index. Prior to January 1, 1999 the index returns are the MSCI All-Country World (gross) as net returns are not available. Prior to January 1, 2001 the composite was measured against the MSCI World Index (gross). The benchmark was changed to better reflect the strategy of the composite which includes emerging markets. Returns include the effect of foreign currency exchange rates. The exchange rate source of the MSCI benchmarks is WM/Reuters which takes the closing spot rates in the local markets. TWI composite utilizes mid/bid-ask exchange rate at approximately 1pm Eastern. The annual composite dispersion presented is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The standard deviation is not presented for 1993 through 2010 because it is not required for periods prior to 2011. Additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Thomas White International, Ltd. (“TWI”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. TWI has been independently verified for the periods July 1, 1992 through December 31, 2011. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Global Equity Composite has been examined for the periods July 1, 1992 through December 31, 2011. The verification and performance examination reports are available upon request. TWI is an independent registered investment advisor. The firm maintains a complete list and description of composites, which is available upon request. The Global Value Equity Composite I was created July 1, 1992. For the period June 1, 1989 through June 30, 1992, the manager’s prior firm performance consisted of one non-fee-paying account. Beginning July 1, 1992 results are based on all fully discretionary, fee-paying accounts under management, including those accounts no longer with the firm. Composite returns are gross of withholding taxes on dividends, interest, and capital gains. The MSCI Index range uses withholding tax rates applicable to Luxembourg holding companies. Withholding taxes may vary according to the investor’s domicile. Composite returns represent investors domiciled primarily in Bermuda and the United Kingdom. Past performance is not indicative of future results. The U.S. dollar is the currency used to express performance. Returns are presented gross and net of management fees which includes a performance based fee, and includes the reinvestment of all income. All dividends are included in performance calculations as net dividends. Gross returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. As of January 1, 2008, net of fee performance is calculated using actual management fees on a cash basis. Prior to 2008, net fee performance was accrued monthly. Trading expenses are included in the costs of the trades. Certain accounts may have an incentive fee arrangement. The incentive fees are typically earned on an annual basis and will be assessed in the month earned. A fee schedule is an integral part of a complete presentation and is described in Part 2 of the firm’s ADV, which is available upon request. The fee schedule for International/Global Equity accounts is as follows: for the first $10 million, 0.95%; for the next $15 million, 0.75%; for the next $25 million, 0.70%; for the next $25 million, 0.60%; for the next $25 million, 0.55%; excess over $100 million, 0.50%. Actual investment advisory fees incurred by clients may vary. Performance presented from July 1, 1992 through November 30, 1999, represents the performance obtained in managing investment objectives, country allocations, policies, techniques and restrictions substantially similar though not identical to those of the Global Value Equity Composite I. Performance presented prior to July 1, 1992 occurred while the Portfolio Manager was affiliated with a prior firm and was the only individual responsible for selecting the securities to buy and sell. These results should not be interpreted as the historical performance of TWI. TWI has the records supporting this performance and will provide these records upon request. All references to past investment performance are used under an agreement with the Portfolio Manager’s previous employer.


TWI GLOBAL EQUITY PERFORMANCE DISCLOSURE

Year End USD Millions

Total Firm Assets

(Millions)

% of Firm Assets

Accounts at Year End Gross Net

Annual Std.

Deviation*

3-Year Std.

Deviation1

MSCI ACWI (net)

3-Year Std. Deviation (Index)¹

2012 261 1,962 13% Five of fewer 14.86% 14.56% - 17.48% 16.13% 17.13% 2011 152 1,426 11% Five or fewer -3.56% -3.76% - 20.65% -7.35% 20.58% 2010 197 1,435 14% Five or fewer 16.12% 15.81% - - 12.67% - 2009 175 1,083 16% Five or fewer 31.21% 30.04% - - 34.63% - 2008 140 782 18% Five or fewer -40.19% -40.31% - - -42.20% - 2007 270 1,010 27% Five or fewer 15.71% 15.16% - - 11.66% - 2006 18 426 4% Five or fewer 26.79% 26.06% - - 20.95% - 2005 17 232 7% Five or fewer 21.65% 20.97% - - 10.84% - 2004 15 192 8% Five or fewer 18.29% 17.64% - - 15.23% - 2003 16 238 7% Five or fewer 32.41% 31.69% - - 33.99% - 2002 14 261 5% Five or fewer -15.51% -15.98% - - -19.31% - 2001 20 333 6% Five or fewer -13.11% -13.58% - - -16.21% - 2000 25 376 7% Five or fewer -10.35% -10.84% - - -14.20% - 1999 30 329 9% Five or fewer 22.65% 21.70% - - 26.44% - 1998 26 240 11% Five or fewer 19.49% 18.53% - - 21.97% - 1997 23 275 8% Five or fewer 20.22% 19.27% - - 15.00% - 1996 18 325 6% Five or fewer 22.31% 21.34% - - 13.20% - 1995 15 325 5% Five or fewer 22.53% 21.56% - - 19.46% - 1994 13 200 7% Five or fewer 0.17% -0.63% - - 5.03% - 1993 13 171 8% Five or fewer 39.47% 38.36% - - 24.88% - 1992 10 144 8% Five or fewer -7.07% -7.44% - - -4.23% - 1991 11 20 55% Five or fewer 21.14% 21.14% - - 19.91% - 1990 10 10 100% Five or fewer -2.89% -2.89% - - -16.48% - 1989 10 10 100% Five or fewer

*Composite dispersion is not shown for periods where there are an insufficient number of portfolios in the composite for the entire year. 1The three-year annualized ex-post standard deviation is not required to be presented for periods prior to January 1, 2011.

Net of Fee Performance – As of 3/31/2013

1Q 2013 YTD 1 yr 3 yrs 5 yrs 10 yrs Since Inception (6/1/1989)

6/1 to 12/31/1989

6.33% 6.33% 9.45% 9.23% 3.02% 11.96% 9.29% 14.58%


TWI GLOBAL EQUITY PERFORMANCE DISCLOSURE

Comments related to past performance for any security, industry or sub-universe valuation groups should not be construed as a guarantee of future performance.

The economic/financial variables shown for each of the sub-universe valuation groups are chosen by our

investment team and represent our best estimate of how to explain past pricing behavior within a country/industry grouping. There is no guarantee that the variables shown will remain effective in explaining past pricing behavior in the future.

This presentation is shown as supplemental information only and is meant to complement the actual

valuation group studies conducted internally by our analysts at Thomas White International, Ltd. (individual copies of the full studies are available upon request).

Holdings are subject to change at any time and are not recommendations to buy or sell any security.


OTHER DISCLOSURES

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Economy & Finance