investment products: no bank guarantee i not fdic insured i may lose value dws alternatives suite a...

Investment products: No bank guarantee I Not FDIC insured I May lose value

DWS alternatives suiteA compelling option for alternative investing


Important risk information

Although allocation among different asset categories generally limits risk, the investment advisor may favor an asset category that underperforms other assets or markets as a whole. The funds expect to invest in underlying funds that emphasize alternatives or nontraditional asset categories or investment strategies, and as a result, it is subject to the risk factors of those underlying funds. Some of those risks include stock market risk, credit and interest rate risk, volatility in commodity prices and high-yield debt securities, short sales risk and the political, general economic, liquidity and currency risks of foreign investments, which may be particularly significant for emerging markets. In the case of DWS Alternative Asset Allocation Fund, it may use derivatives, including as part of its global tactical asset allocation strategy. The funds expect to have direct and indirect exposure to derivatives, which may be more volatile and less liquid than traditional securities. The funds could suffer losses on its derivative positions. See the prospectus for additional risks and specific details regarding the funds’ risk profile.

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Investment products: No bank guarantee I Not FDIC insured I May lose value 3

Agenda

A definition of alternatives 1

4 Summary

3 DWS Investments’ alternatives

2 Why alternative investments?


Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. See next slide for more asset class representations.

Category Index name

Asset allocation 60% U.S. fixed income/40% U.S. large-cap equities (see below for asset class representation)

Alternatives 20% FTSE EPRA/NAREIT Global Real Estate Index 20% HFRI Equity Market Neutral Index 20% Barclays Capital US TIPS Index 15% commodities blend (50% Goldman Sachs Commodity Index, 25% MSCI World Energy Index, 25%

MSCI World Materials Index) 10% MSCI Emerging Markets Equity Index 10% JPMorgan Emerging Market Bond Index 5% S&P Global Gold BMI Index

Cash Citigroup Treasury Bill 3-Month Index (When interest rates rise, bond prices generally fall. Although U.S. government securities are backed by the full faith and credit of the U.S. government, their prices fluctuate. Investors may lose principal if the securities are sold prior to maturity.)

Commodity 50% Goldman Sachs Commodity Index, 25% MSCI World Energy Index, 25% MSCI World Materials Index (Commodities, including gold, gems, and other precious metals, are long-term investments and should be considered part of a diversified portfolio. Market-price movements, regulatory changes, economic changes, and adverse political or financial factors could have a significant impact on performance.)

Emerging-market income JPMorgan Emerging Market Bond Index (Investing in securities of emerging markets presents certain risks, such as currency fluctuations, political and economic changes and market risks. Also, see fixed-income risk listed below.)

Emerging-market equity MSCI Emerging Markets Equity Index (See emerging-market income risk listed above.)

Floating-rate note S&P/LSTA Leveraged Loan Index (Loan investments are subject to interest-rate risk such that wheninterest rates rise, the prices of the loan, and thus the value of the loan, can decline and the investor can lose principal value. Although the value of senior loans will fluctuate less in response to interest-rate changes than will fixed-rate debt securities, floating rates on senior loans reset only periodically, so changes in prevailing interest rates may cause a fluctuation in the strategy's value.)

Global infrastructure MSCI World Infra Sector Capped Index (Infrastructure-related securities have greater exposure to market, economic, regulatory, political and other risks affecting such entities.)

Asset class representation


Asset class representation

Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index.

Category Index name

Global real estate FTSE EPRA/NAREIT Developed Index (There are special risks associated with an investment in real estate, including credit risk, interest-rate fluctuations and the impact of varied economic conditions. Real estate investment trusts (or “REITs”) can also be affected by interest-rate moves, economic cycles, and tax and regulatory requirements.)

Gold S&P Global Gold BMI Index (See commodity risk listed above.)

International equity MSCI EAFE Index (Investing in foreign securities presents certain risks, such as currencyfluctuations, political and economic changes and market risk.)

Large growth Russell 1000 Growth Index (Large-cap equity stocks are affected by how the stock market performs.)

Large value Russell 1000 Value Index (See large-growth risk listed above.)

Market neutral HFRI Equity Market Neutral Index (Short sales involve the risk that the strategy will incur a loss by subsequently buying a security at a higher price than the price at which the strategy previously sold the security short.)

Small growth Russell 2000 Growth Index (Stocks of small-cap companies involve greater risk than securities of larger, more-established companies, as they often have limited product lines, markets or financial resources and may be subject to more-erratic and more-abrupt market movements.)

Small value Russell 2000 Value Index (See small-growth risk listed above.)

TIPS Barclays Capital U.S. TIPS Index (Although inflation-indexed bonds are expected to be protected from long-term inflationary trends, short-term increases in inflation may lead to a decline in value. If interest rates rise due to reasons other than inflation, investments in these securities may not be protected to the extent that the increase is not reflected in the bond's inflation measure.)

U.S. large-cap equity (stocks) S&P 500 Index (See large-growth risk listed above.)

U.S. fixed income (bonds) Barclays Capital U.S. Aggregate Index (Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall.)

U.S. small-cap equity Russell 2000 Index (See small-growth risk listed above.)


A compelling option for alternative investingA definition of alternatives


How the world is defining alternatives

Asset classes Alternative strategies Investment vehicles

Beyond Morningstar style boxes

Absolute return

Real return

New asset classes

Long/short and risk- managed equity

Absolute return

Multi-strategy

Managed futures

Tactical asset allocation

Relative value

Hedge funds

Limited partnerships

Mutual funds

ETFs

Investments outside of traditional equity and fixed income are broadly known as alternatives.


The DWS Investments’ definition of alternatives

Diversification neither assures a profit nor guarantees against a loss.

The DWS Investments’ definition of alternatives

New, less-efficient asset classes

Asset classes with the potential to provide attractive returns with reduced risk when added to traditional asset allocation

No industry-standard definition: Morningstar, Lipper and industry reports all define alternatives differently


Alternative categories today

Alternative Definition

Absolute return Seeks to provide positive returns in up and down markets

Real returnReal return Seeks to maintain value during inflationary Seeks to maintain value during inflationary environmentsenvironments

Nontraditional/non-U.S. dollar

Seeks diversification through less efficient asset classes, not limited to a geographic region, market or security type

While market neutral and absolute return strategies may outperform the market during periods of severe downturns, they may also underperform the market during periods of market rallies.


A compelling option for alternative investingWhy alternative investments?


Why alternatives may fit into a portfolio

Bring institutional defined-benefit thinking to individual investors

Improve diversification potential when added to a traditional portfolio consisting of stocks and bonds

May deliver better risk-adjusted returns

May address market challenges

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Our view is that investors need greater diversification and protection from movements in the market—and alternatives may fulfill these needs.


Asset allocation of defined benefit vs. defined contribution

Stable value (14.1%)Domestic fixed income (8.5%)Domestic large-cap (24.5%)Company stock (7.5%)Target date (10.2%)Domestic/global balanced (11.8%)Domestic small- and mid-cap (9.9%)International/global equity (7.9%)Emerging-market equity (0.4%)Brokerage window (0.6%)Money market (3.1%)Other (1.5%)

Equity (49%) Fixed income (31%) Alternatives (20%)

Defined benefit Defined contribution

Source: BNY Mellon and Callan DC Index as of 3/31/10. Percentages may not add up to 100% due to rounding.

Institutions and defined

benefit plans are increasing allocations

to alternative

asset classes


Correlation to the S&P 500 Index (five years as of 12/31/11)

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Morningstar categories

Large Value1.00

Large Blend1.00

Large Growth

0.98

Short-Term Bond0.53

Target Date 2021-2025

0.98

Multialternative0.94

Mid-Cap Value0.98

Mid-Cap Blend0.97

Mid-Cap Growth

0.96

Multisector Bond0.77

Moderate Allocation

0.98

Inflation-Protected Bond

0.34

Small Value0.95

SmallBlend0.95

SmallGrowth

0.95

High Yield Bond0.78

RealEstate

0.84

ForeignLarge Blend

0.93

Diversified Emer. Markets

0.86

Consider alternatives for further diversification.

Source: Morningstar as of 12/31/11. Categories are Morningstar’s. Correlations are historical and do not guarantee future results. Correlation refers to how securities or asset classes perform in relation to each another and/or the market. A 1.0 correlation indicates that two security types move in exactly the same direction. A –1.0 correlation indicates movement in exactly opposite directions. A zero correlation implies no relation in the movements.


TRADITIONAL PORTFOLIO PORTFOLIO WITH ALTERNATIVES

Alternatives can complement a traditional portfolio

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Source: Morningstar as of 12/31/11. Past performance is no indication of future results. Volatility is represented by standard deviation. See slides 3-4 for asset class representations. Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Performance for other time periods may not have been as favorable. 10-year returns and standard deviation, respectively, are as follows: U.S. large-cap stocks, 2.92%, 15.93%; U.S. small-cap equity, 5.62%, 21.09%; international equity, 4.67%, 18.73%; U.S. bonds, 5.78%, 3.70%; cash, 1.85%, 0.49%; alternatives, 9.09%, 11.36%.

Adding a 20% allocation of alternatives increased return by nearly 100 basis points and reduced volatility over 10 years ended 12/31/11.

Scenario Traditional portfolio Portfolio with alternatives Value added

10-year return 4.72% 5.68% +0.96%

10-year volatility 11.92% 10.52% -1.40%


Alternatives seek to address these market challenges

Inflation concerns

U.S

. dollar

depreciation H

ighe

r in

tere

st r

ates


Implementation: increase diversification with alternatives

■ One-strategy option to simplify investing process

■ Ability to access institutional investment strategies

■ Increased diversification

Key featuresKey features

Packaged-fund option to meet alternative allocations

Real return

Absolute return

Nontraditional

Equity

Fixed income



Diversifying with alternatives can help smooth the ride

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ALTERNATIVE ASSET CLASS CALENDAR YEAR RETURNS AS OF 12/31/112002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Gold52.61%

EM equity55.82%

Gbl. real est.37.96%

EM equity34.00%


EM equity39.39%

TIPS–2.35%

EM equity78.51%

Gold 35.06%

TIPS13.56%

TIPs16.57%

Gold45.58%

EM equity25.55%

Gold28.35%

EM equity32.17%

Commodities32.45%

Market neutral–5.92%

Floating rate51.62%


EM income9.20%

EM income14.24%


Infrastructure21.31%

Commodities25.54%


Infrastructure 19.58%

EM income–9.70%


EM equity18.88%

Infrastructure5.54%

Commodities12.81%

Commodities29.08%

Commodities 20.82%


Gold20.13%

Gold18.62%

Gold–23.10%

Gold 35.74%

Alternatives13.03%

Floating rate1.52%

Alternatives 9.65%

EM income 28.83%

Alternatives16.63%

Alternatives14.91%

Alternatives15.30%

Alternatives12.04%

Alternatives–26.52%

Commodities28.03%

Commodities12.55%

Market neutral0.73%

Gbl. real est.2.82%

Alternatives24.70%

EM income11.77%

EM income11.86%

EM income10.49%

TIPS11.64%

Floating rate–29.10%

Alternatives26.67%

EM income11.83%

Alternatives–1.02%

Floating rate1.91%


TIPS8.46%

Market neutral6.22%

Market neutral7.32%

EM income6.45%

Infrastructure–32.66%

EM income25.95%

Floating rate10.13%

Commodities–5.48%

Market neutral0.98%

Floating rate9.97%

Floating rate5.17%

Floating rate5.06%

Floating rate6.74%

Market neutral5.29%

Commodities–44.76%


Infrastructure6.60%

Gbl. real est.–5.82%

EM equity–6.17%

TIPS8.40%

Market neutral4.15%

Infrastructure4.97%

Commodities2.77%

Floating rate2.08%


TIPS11.41%

TIPS6.31%

Gold–17.23%

Infrastructure–17.95%

Market neutral2.44%

Gold–5.54%

TIPS2.84%

TIPS0.41%


EM equity–53.33%

Market neutral1.17%

Market neutral3.79%

EM equity–20.41%

Stock (S&P 500 Index) calendar-year returns (as of 12/31/11)

–22.10% 28.68% 10.88% 4.91% 15.79% 5.49% -37.00% 26.46% 15.06% 2.11%

Excess return of alternatives vs. stocks (as of 12/31/11)

31.75% –3.98% 5.75% 10.00% –0.49% 6.55% 10.48% 0.21% –2.03% -3.13%

Source: Morningstar as of 12/31/11. Performance is historical and does not guarantee future results. See slides 3-4 for asset class representation. Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Returns during certain time periods were negative. Excess return calculation is the mathematical difference between the alternative blend (orange) and stocks (light blue).

Alternatives blend


A compelling option for alternative investingDWS alternatives suite


Simplifying alternative investments

Volatility

Re

turn

po

ten

tia

l

DWS Select Alternative

Allocation Fund

DWS Alternative Asset Allocation

Fund

DWS Investments’ alternative asset allocation suite

Platform: a suite of alternative funds to complement traditional asset allocation

DWS Investments is among only a few investment managers to offer a suite of funds to fit the needs of investors

Nearly $1.1 billion AUM between the two funds as of 12/31/11.

There is no guarantee that the funds will achieve their stated objectives.

Visit www.dws-investments.com for complete performance information.


DWS Investments’ alternatives: key differentiators

Ability to generate attractive return potential across various market conditions

Provide individual investors with institutional investment strategies

Simplify portfolio construction with a packaged fund option

More than 40 global investment professionals

Nearly $5 billion in alternative assets across alternative retail mutual funds*

Results

Institutional thinking

Experienced investment platform

*Source: DWS Investments as of 12/31/11.


Goals and investment process

Strategy Implemented Absolute return Real return Nontraditional/non-U.S. dollar

Market neutral Fund X

Global tactical asset allocation* Overlay X

Commodity Fund X

Global real estate Fund X

Global infrastructure Fund X

Inflation-protected Fund X

Floating-rate note Fund X

International income ETF X

Emerging-market fixed income Fund X

Emerging-market equity Fund X

Emerging-market income (local currency) ETF X

International and emerging-market small-cap ETF X

Convertibles ETF X

Preferred stocks ETF X

Goals Seek capital appreciation and diversification

Investment process Allocate to a variety of alternatives asset classes to provide greater portfolio diversification. The strategies are rebalanced periodically to maintain the desired allocation.

Benchmark DWS Alternative Asset Allocation strategy blended benchmark: 70% MSCI World Index, 30% Barclays Capital

U.S. Aggregate Index DWS Select Alternative Allocation strategy blended benchmark: 60% MSCI World Index, 40% Barclays Capital

U.S. Aggregate Index

*The global tactical asset allocation strategy is not used in the DWS Select Alternative Allocation strategy. The strategy will not be used in DWS Alternative Asset Allocation Plus VIP until assets reach $50 million.


Global resource base

Absolute return Real return Nontraditional/non-U.S. dollar

QS Investors: experienced alternatives platform

Global tactical asset allocation strategy*2 portfolio managers

DWS Gold & Precious Metals Fund3 portfolio managers

DWS Global Inflation Fund 5 portfolio managers

DWS Enhanced Commodity Strategy Fund2 portfolio managers

DWS Disciplined Market Neutral Fund3 portfolio managers

DWS Enhanced EM Fixed Income Fund8 portfolio managers

DWS Floating Rate Fund 4 portfolio managers

DWS EM Equity Fund2 portfolio managers

DWS RREEF Global Infrastructure Fund4 portfolio managers

DWS RREEF Gl. Real Est. Securities Fund7 portfolio managers

QS Investors

Janet CampagnaChief executive officer

Portfolio managersRobert Wang

Inna OkounkovaThomas Picciochi

Research platformRosemary Macedo (CIO)

Colm O’Cinneide

.

*Global tactical asset allocation strategy (GTAA) is only available on DWS Alternative Asset Allocation Fund. It is not possible to invest directly in this strategy.

ETFsInternational / EM fixed income

International / EM small capPreferred stocks

Convertibles

5 investment professionals 21 investment professionals 14 investment professionals

Strategies are subadvised by QS Investors, LLC.


Asset allocation

Identify diverse, nontraditional asset classes

Asset class forecasting: risk, return and correlation

Tactical views are implemented monthly via a global tactical asset allocation

Portfolio construction

Innovative asset allocation tool—PortfolioChoice

DWS Investments’ strategies

Exchange-traded funds (ETFs)

Holdings analysis

Portfolio implementation

Monthly rebalancing

Quarterly monitoring and periodic review of allocations

DWS Investments’ alternatives suite: investment process

Risk management

DWS Investments applies institutional thinking to all asset allocation products, including the alternatives suite.


Asset allocation: blurring of asset classes

Building blocks of asset allocation

Traditional asset classes

Absolute return

Real return

Nontraditional/non-U.S. dollar

Illiquid


Volatility of individual asset classes vs. alternatives blend

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ASSET CLASS VOLATILITY (10 YEARS ENDING 12/31/11)

Source: Morningstar. Volatility is represented by standard deviation. See slides 3-4 for asset class representation .

Alternative asset classes Traditional asset classes


Source: DeAM as of 12/31/11. The strategy will be rebalanced periodically, so this asset allocation is subject to change. The Global Tactical Asset Allocation (GTAA) strategy may use instruments including but not limited to futures, options and currency forwards. Derivatives may be more volatile and less liquid than traditional securities, and the strategy could suffer losses on its derivatives positions.

Nontraditional (25%)Emerging-market equity (7%)

Emerging-market fixed income (8%)

International and emerging-market small-cap (2%)

Emerging-market debt—localcurrency (2%)

International Treasury bond (2%)

Convertibles (2%)

Preferred stocks (2%)

Absolute return (17%)Market neutral (17%)

Real return (58%)Commodities (15%)

Global real estate (12%)

Global TIPS (11%)

Floating-rate notes (10%)

Global infrastructure (10%)

GTAA strategy

DWS Alternative Asset Allocation Fund

For performance and other information about the DWS Alternative Asset Allocation Fund, please visit www.dws-investments.com.


DWS Select Alternative Allocation Fund

Source: DeAM as of 12/31/11. The strategy will be rebalanced periodically, so this asset allocation is subject to change. Derivatives may be more volatile and less liquid than traditional securities, and the strategy could suffer losses on its derivatives positions.

Nontraditional (26%)

Emerging-market fixed income (8%)

Emerging-market equity (3%)

International Treasury bond (6%)

International and emerging-market small-cap (2%)

Emerging-market debt (localcurrency (3%)

Preferred stocks (2%)

Convertibles (2%)

Absolute return (17%)

Market neutral (17%)

Real return (57%)

Global TIPS (13%)

Floating-rate notes (14%)

Commodities (13%)

Global infrastructure (10%)

Global real estate (7%)

For performance and other information about the DWS Select Alternative Allocation Fund, please visit www.dws-investments.com.


Summary of alternative investing

Alternative asset classes

Provide institutional thinking for individual investors

Can improve diversification potential and deliver better risk-adjusted return potential to a traditional portfolio of stocks and bonds

May address market challenges

DWS Investments’ alternative investment team and process

Provide a global platform with access to alternative asset classes

Offer the same tools, team and investment philosophy for both institutional and individual investors

Have the potential to generate attractive returns across various market conditions



Important information

DWS Investments Distributors, Inc.222 South Riverside Plaza Chicago, IL 60606-5808www.dws-investments.com [email protected] (800) 621-1148

DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.

Investment products offered through DWS Investments Distributors, Inc. Advisory services offered through Deutsche Investment Management Americas, Inc.

©2012 DWS Investments Distributors, Inc. All rights reserved. (3/12) R-11616-7

OBTAIN A PROSPECTUSTo obtain a summary prospectus, if available, or prospectus, download one from www.dws-investments.com, talk to your financial representative or call (800) 621-1048. We advise you to carefully consider the product’s objectives, risks, charges and expenses before investing. The summary prospectus and prospectus contain this and other important information about the investment product. Please read the prospectus carefully before you invest.

investment products: no bank guarantee i not fdic insured i may lose value dws alternatives suite a...

Documents

index returns

month index

rate risk

msci world energy index

market risks

goldman sachs commodity

emergingmarket income

commodity risk