neuberger berman
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China Equity FundCitywire Wealth Manager Retreat13th & 14th October 2011
For Professional Client Use Only(as defined in Annex II of the MiFID Directive)
Neuberger Berman
Independent, stable and focused on the long term
– More than 400 investment professionals average 16 years of industry experience; portfolio managers 24 years
– Over $198 billion assets under management
– 26 offices across 11 countries
Attractive long-term investment performance ended 30/06/111
– 94% of the firm’s equity and fixed income AUM outperformed over 10 years
Alignment of interests between investors and clients
– Employee controlled
– Up to 25% of annual compensation is contingent/deferred into the same strategies that clients invest
Founded in 1939, today we are among the world’s leading private, employee-controlled asset management companies
___________________________All information as of June 30, 2011, except as otherwise noted. Reflects collective data for the various affiliated investment advisers that are subsidiaries of Neuberger Berman Group LLC (the “firm”). See Additional Disclosures at the end of this piece, which are an important part of this presentation, for the definition of “investment professionals" and certain exclusions.
1. As of 30/06/11, 49% of the total firm equity and fixed income Assets Under Management (“AUM”) outperformed on a 3-year basis and 75% on a 5-year basis. The AUM outperformance results are based on the overall performance of each individual investment strategy against its respective strategy benchmark and results are asset weighted so strategies with the largest amount of assets under management have the largest impact on the results. Individual strategies may have experienced negative performance during certain periods of time. Hedge fund, private equity and other private investment vehicle assets are not reflected in the outperformance results shown. See Additional Disclosures and the end of the material which are an important part of this presentation and contain additional information regarding AUM outperformance statistics. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results.
Firm Overview
1
Introduction
Introduction
Award-winning, locally-based team in Shanghai and Hong Kong
– Yulin (Frank) Yao, Sr. Portfolio Manager, was previously the CIO of Hua An Fund Management Company (“FMC”)1 and managed approximately USD $7bn in assets
– Lihui Tang, Portfolio Manager, was previously one of the top Portfolio Managers at Hua An FMC1 where he managed approximately USD $1bn in assets and where he co-managed a fund that received one of only two Morningstar 5-star rankings in 2007 2
– Dedicated research and portfolio management team among the most tenured in the Chinese equities fund management space
Compelling investment landscape
– China is an important world economy with valuations that we believe are compelling
– Large but inefficient equity markets
Unique and limited offerings
– Targets to outperform the benchmark with high track error over the market cycle and deep convictions in individual stocks
– Fundamental, bottom-up and research-intensive investment approach
– Risk management integrated throughout investment process
Greater China Equity Strategies
Introduction
___________________________1. Frank Yao was CIO of Hua An FMC from 2004 to 2007; Lihui Tang was a portfolio manager at Hua An FMC from 2004 to 2007.2. Source: Morningstar. Morningstar Equity Balanced Fund category based on 1-year and 2-years of performance. Rankings based on Morningstar total returns, which include income and capital gains or losses.
2
Greater China Investment Team Introduction
___________________________1. Fund management in mainland China has a 12 year history. 2. As of September 30, 2011. Staffing is subject to change without notice.
Experienced team with extensive knowledge of sectors and companies – average of ten years of experience for senior research analysts1
Ria NovaSenior Vice President
Adrianne YuAnalyst
Portfolio Specialists
Yulin (Frank) YaoSenior Portfolio Manager, Managing Director
Lihui Tang, CFAPortfolio Manager, Senior Vice President
Portfolio Management
Local presence in Shanghai and Hong Kong2
Ying GanSenior Research Analyst, Vice PresidentConsumers including Food & Beverage,
Agriculture, Retail
Wei (Kevin) KeResearch Analyst
Internet, Media, Utilities (Gas and Water)
Yingmin (Peyton) Jian Research Analyst
Retail, Consumer Discretionary
Youyi WengTrader
Yuxin ChenSenior Research Analyst, Vice President
Real Estate, Construction Materials
Xinyu GaoSenior Research Analyst, Vice President
Machinery, Shipping, Auto
Zhe (Peter) Chen Research AnalystBanks, Insurance
Guanglei LiResearch Analyst
Consumer Staples and Discretionary
Operations
Pauline HewHead of Operations Asia
ex-Japan, Senior Vice President+
3 Operations Associates
3
Investment professionals with experience investing in bull and bear markets in China
Extensive Investment Experience in Greater China Introduction
___________________________Sources: Lipper, New Fortune Magazine, Asia Asset Management, China Securities Journal, Morningstar Inc. 1. Hua An Baoli Balanced Securities Investment Fund.2. Morningstar as of February 2, 2007 for the Hua An Baoli Balanced Securities Investment Fund.
Awards Achieved by Hua An FMC while Frank Yao was CIO
Awards Achieved by the Fund Co-Managed by Lihui Tang at Hua An FMC
Awards Achieved by Ying Gan, Yuxin Chen and Xinyu Gao
2005 Best of Best Performance Award for China Equity (1 & 3 years) by Asia Asset Management, a Hong Kong-based independent research firm
2006 Jin Niu Award, Best Performing Fund Management Firms in China, by China Securities Journal
2005 Best Hybrid Fund (1-year) by Lipper1
2005 Jin Niu Award, Best Performing Fund in China, by China Securities Journal1
2006 Jin Niu Award, Best Performing Fund in China, by China Securities Journal1
One of only two Morningstar’s five-star balanced funds based on 1-year and 2-years of performance2
2003 & 2004 #1 research analyst (Food & Beverage industry) ranked by institutional investors in China (New Fortune Magazine’s Best Analysts Award)
Ying Gan
Yuxin Chen
2004 & 2005 #2 research analyst (Real Estate industry) ranked by institutional investors in China (New Fortune Magazine’s Best Analysts Award)
Xinyu Gao
2006 #2 research analyst (Machinery industry) ranked by institutional investors in China (New Fortune Magazine’s Best Analysts Award)
4
Investing In China
China and Its Compelling Macroeconomic Dynamics
___________________________1. Source: IMF World Economic Outlook Update, April 2011.2. ASEAN-5 includes Indonesia, Malaysia, Philippines, Singapore and Thailand.3. Euro Area includes Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain. 4. Source: McKinsey & Company, UN CEIC CICC.
Strong growth potential:
– China constitutes one of the largest and fastest growing emerging markets
– Higher than average growth rates1
• GDP growth forecast for 2011 are over two times higher than those for the United States and Euro Area3 combined
• GDP growth rates are among the highest forecasted for Asia
– We believe that rapid GDP growth offers strong drivers for equity markets and increasing investment opportunities
% GDP Growth Forecasts1
Growth has been driven by:
– Increased domestic consumption driven by rapidly-growing middle class
– Increase in higher value-added exports
• Export sector is experiencing a rapid structural upgrade
– Large-scale government investments in infrastructure and technology
– Increased liberalization of foreign direct investment
Urban Consumption Expenditure4
$48
$637
$1,599
59%
21%
9%
0%
10%
20%
30%
40%
50%
60%
2005A 2015F 2025F0
$1,000
$2,000
Urban Household Disposable Income (U.S $bn)% of Population with Annual Income of RMB 40K–100K (USD $2.5K–13K)
21%
33%
46%
0%
10%
20%
30%
40%
50%
1995 2000 2005
Machinery and Transport Equipment – China4
% of Total Export
$1,500
$500
Investing in China
2008 2009 2010 2011F 2012FChina 9.6 9.2 10.3 9.6 9.5India 7.3 6.8 10.4 8.2 7.8Russia 5.6 -7.8 4.0 4.8 4.5
ASEAN-52 4.7 1.7 6.9 5.4 5.7Brazil 5.1 -0.6 7.5 4.5 4.1Mexico 1.5 -6.1 5.5 4.6 4.0U.S. 0.4 -2.6 2.8 2.8 2.9
Euro Area3 0.6 -4.1 1.7 1.6 1.8
5
1980 2000 2005 2010 2015F 2020F 2025F
Rank US = 100 US = 100 US = 100 US = 100 US = 100 US = 100 US = 1001 US 100 US 100 US 100 US 100 US 100 US 100 China 1232 Japan 38 Japan 47 Japan 36 China 38 China 59 China 85 US 1003 Germany 30 Germany 19 Germany 22 Japan 36 Japan 29 Japan 26 India 364 France 25 UK 15 UK 18 Germany 25 Germany 20 India 24 Russia 25
5 UK 19 France 13 China 18 France 20 UK 17 Russia 19 Japan 246 Italy 17 China 12 France 17 Italy 16 France 16 Germany 19 Germany 187 China 11 Italy 11 Italy 14 UK 16 India 16 UK 17 UK 188 Canada 10 Canada 7 Canada 9 Brazil 13 Russia 15 France 15 Brazil 179 Spain 8 Brazil 6 Spain 9 Spain 11 Brazil 14 Brazil 15 France 1510 Argentina 7 Mexico 6 Brazil 7 Russia 11 Italy 13 Italy 12 Korea 14
China in the World Economy from 1980 – 2025
As a result of rapid economic growth over the last 30 years, China is now the world’s second largest economy and is expected to become the largest economy by 2025
__________________________Sources: IMF and Citigroup as of May 31, 2010.
Investing in China
Approximate Size of 10 Largest Economies by Percentage
6
China’s past GDP growth has been mainly driven by investment. To achieve more stable growth going forward, the Chinese government intends to promote domestic consumption. Consumption is expected to gradually become a larger contributor to overall economic development.
___________________________ Sources: CEIC and BofA Merrill Lynch Global Research as of December 31, 2010.
Investing in China
China Consumption has Potential For Growth
Breakdown of China’s GDP Growth
(15)
(10)
(5)
0
5
10
15
20
25
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Consumption Capital formation Net export
YoY% of GDP
In 2010, the breakdown of China’s GDP growth was;
Consumption: 38%
Investment: 54%
Net export: 8%
7
China GDP and Private Consumption
China is the world’s second largest economy in terms of GDP, but its GDP per capita and private consumption is significantly lower than most major economies, indicating ample room for growth.
Investing in China
GDP Per Capita and Private Consumption as % of GDP for Major World Economies
___________________________Source: The World Bank.Note: GDP Per Capita as of December 31, 2010. Private Consumption as % of GDP as of December 31, 2009.
47,18443,137
40,50936,100
31,758
4,393
65.29%62.43%
34.95%
59.30%
58.87%
71.21%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
US Japan Germany UK Hong Kong China
(%)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
(in US$)
GDP Per Capita (RHS) Private Consumption as % of GDP (LHS)
8
0
5
10
15
20
25
30
35
40
45
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
YoY
%Continued Domestic Consumption Growth - Retail Sales
Retail sales (domestic consumption) have been growing steadily, averaging over 15% YOY and are expected to grow by double digits in the future.
___________________________Sources: CEIC, National Bureau of Statistics, and BofA Merrill Lynch as of December 31, 2010.
Nominal Retail Sales in China ( 1994 – 2010)
Investing in China
Average
9
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Eastern Central Western
16.00%
16.50%
17.00%
17.50%
18.00%
18.50%
19.00%
19.50%
20.00%2009 retail sales (LHS) YoY % (RHS)
(RMB bn) YoY%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
Eastern Central Western
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%2009 auto sales (LHS) YoY % (RHS)
(Units) YoY%
Auto Sales
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009
EasternCentralWestern
(%)
13
(Per 100 Urban Rural
Household) 2005 2008 2005 2008
Computer Computer
Eastern 53.85 71.74 4.69 9.62
Central 32.15 46.69 0.87 2.78
Western 32.84 49.25 0.46 1.54
Mobile Mobile
Eastern 150.00 183.36 72.91 124.43
Central 125.85 155.95 56.24 105.53
Western 131.20 169.63 46.27 93.26
Automobile Motorcycle
Eastern 5.59 13.04 63.02 69.18
Central 1.32 3.82 37.21 49.27
Western 2.35 6.07 31.05 41.82
Domestic Consumption – Greater Potential Growth in Western and Central China
___________________________Source: China auto market, CEIC Database and Nomura Research as of May 31, 2010.
Retail Sales Internet User Growth
Urban Penetration – Computers, Mobiles and Autos
Investing in China
10
Infrastructure in China – Still Needs Significant Investment
Development opportunities are especially in the central and western regions and rural areas.
Airport Density in Select Countries (2008) Airport Density in China by Region (2007)
Investing in China
___________________________Source: CEIC Database, www.GlobalAir.com database, World Bank and Nomura as of May 31, 2010.
832
30 12 1
2,032
746
389
150
400
800
1,200
1,600
2,000
2,400
US UK Japan China
Units
Airport numbers per ten million people
Airport numbers per million sq km
29
8
17
0
10
20
30
East Central West
Units
Number of airports per million sq km
11
Map of China by Region
WesternCentralEastern
Beijing
Sichuan
ShanghaiTibet
Xinjiang
Qinghai
Gansu
Inner Mongolia
Shaanxi
Yunnan
Guizhou
Taiwan
Guangxi
Hainan
MacauHongkong
Sichuan
Guangxi
Heilongjiang
Jilin
Chongqing
Shanxi
Henan
AnhuiHubei
HunanJiangxi
Liaoning
Tianjin
Shandong
Hebei
Jiangsu
Zhejiang
Fujian
Guangdong
Ningxia
Regional Disparities – Higher Future Growth Expected in Central & Western China
___________________________ Source: China National Bureau of Statistics and Nomura.
Investing in China
12
Regional Disparities – Higher Future Growth Expected in Central & Western China
Disparities among regions can create opportunities for future growth.
Investing in China
Key Statistics (2009) By Region
GDP Contribution By Region
GDP (RMB bn) % GDP per capita (RMB) Population (mn) % Urbanisation (% ) Size ('000 sq km) %
Eastern 20,974 58 40,118 523 39 56 1,060 11
Central 8,563 24 20,375 420 32 43 1,630 17
Western 6,687 18 17,058 392 29 38 6,910 72
Total 36,223 100 22,698 1,335 100 47 9,600 100
(%) 1995 2006 2009
Eastern 56 60 58
Central 26 23 24
Western 18 17 18
Total 100 100 100
___________________________ Source: CEIC Database and Nomura as of May 31, 2010.
13
Regional Disparities – Higher Future Growth Expected in Central & Western China
Major disparity in GDP per capita across different regions.
Investing in China
GDP Per Capita by Province (2010)
___________________________ Source: China National Bureau of Statistics and WIND Database as of September 30, 2011. GDP Per Capita Nationwide from the World Bank.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Shan
ghai
(E)
Bei
jing
(E)
Tia
njin
(E)
Jian
gsu
(E)
Zhe
jian
g (E
)
Gua
ngdo
ng (E
)In
ner
Mon
goli
a (W
)Sh
ando
ng (E
)
Lia
onin
g (E
)
Fuji
an (E
)
Jili
n (C
)
Heb
ei (E
)
Cho
ngqi
ng (W
)
Hub
ei (C
)
Hei
long
jian
g (C
)
Nin
gxia
(W)
Shaa
nxi (
W)
Shan
xi (C
)
Hen
an (C
)
Hun
an (C
)
Xin
jian
g (W
)
Qin
ghai
(W)
Hai
nan
(E)
Sich
uan
(W)
Jian
gsi (
C)
Anh
ui (C
)
Gua
ngxi
(W)
Tib
et (W
)
Yun
nan
(W)
Gan
su (W
)
Gui
zhou
(W)
(US$) Province Nationwide
14
Regional Disparities – Higher Future Growth Expected in Central & Western China
Economic growth in most provinces in western and central regions are much higher than eastern regions.
Investing in China
GDP Growth by Province (2010)
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
Tia
njin
(E)
Cho
ngqi
ng (W
)
Hai
nan
(E)
Qin
ghai
(W)
Sich
uan
(W)
Inne
r M
ongo
lia
(W)
Hub
ei (C
)
Anh
ui (C
)
Hun
an (C
)
Shaa
nxi (
W)
Lia
onin
g (E
)
Gua
ngxi
(W)
Jian
gsi (
C)
Shan
xi (C
)
Fuji
an (E
)
Jili
n (C
)
Nin
gxia
(W)
Gui
zhou
(W)
Hei
long
jian
g (C
)
Jian
gsu
(E)
Hen
an (C
)
Gua
ngdo
ng (E
)
Shan
dong
(E)
Yun
nan
(W)
Tib
et (W
)
Heb
ei (E
)
Zhe
jian
g (E
)
Gan
su (W
)
Xin
jian
g (W
)
Bei
jing
(E)
Shan
ghai
(E)
(%) Province Nationwide
___________________________ Source: China National Bureau of Statistics and WIND Database as of September 30, 2011.
15
Greater China equity market is the world’s second largest, offering investors a wide breadth and depth of opportunities
Mainland China’s GDP real growth rate and equity market size are among the largest of the emerging market nations
World’s Second Largest Equity Market1 Largest Emerging Equity Markets4
Wide Breadth of Investment Opportunities
___________________________1. Source: Bloomberg as of June 30, 2011.2. “Greater China” includes companies incorporated, organized under the laws of, or that have a principal office in the People’s Republic of China, Hong Kong SAR, Macau SAR or Taiwan. It also includes companies that derive a majority of their revenue or profits or that have a majority of their assets in mainland China or Taiwan.3. “Mainland China” includes A and B shares only.4. Source: Bloomberg and CIA World Fact Book as of June 30, 2011. Size of circle represents size of market capitalization.
Greater China has an equity market size of USD $6.8 trillion1
Market Cap (US$ trn)GDP Real Growth Rate (% as of April 2011)
Market Cap. (US$bn) as of June 30, 2011
South Korea
Turkey
Malaysia
Mexico Taiwan
Brazil
India Russia
MainlandChina
0%
2%
4%
6%
8%
10%
12%
0 500 1,000
1,500 2,000 2,500 4,0003,000 3,500
Investing in China
6.76
3.84 3.77 3.502.59 2.23 1.99 1.70 1.53
4.63
16.24
0
4
8
12
16
20
US
Gre
ater
Chi
na2
Japa
n
Mai
nlan
d C
hina
3
Uni
ted
Kin
gdom
Hon
g K
ong
Can
ada
Fra
nce
Ger
man
y
Bra
zil
Asi
a ex
Jap
an a
ndG
reat
er C
hina
16
China Underweight in Global Markets
Although Greater China is the second largest equity market (US$6.8 trillion1) in the world, it is significantly underweight in the MSCI World and EM Indices.
Investing in China
MSCI World Index Constituents2 MSCI Emerging Markets Index Constituents2
___________________________1. Source: Bloomberg as of June 30, 2011.2. Source: Barclays Capital as of August 31, 2011.3. Others include Austria, Belgium, Denmark, Finland, Greece, Ireland, Israel, Italy, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland.4. China represents Hong Kong-listed equities.5. Others include Chile, Colombia, Czech Republic, Egypt, Hungary. Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Thailand, Turkey.
Australia3.97%
Canada5.53%
France4.26%
Germany3.50%
China1.29%
Japan9.47%
Singapore0.80%
UK9.73%
US50.15%
Others11.32%
Brazil15.32%
China17.25%
India6.95%
Indonesia2.83%
Korea14.38%
Russia6.74%
South Africa7.89%
Taiwan10.99%
Others17.64%
3
4
4
5
17
Historically Inefficient and Strong Equity Market
Vast number of companies are not covered by sell-side research due to:
– Pace of universe growth; relatively active IPO market (China/HK is leading IPO market) with a large volume of new listings
– Breadth of market size; over 4,000 potential companies representing over USD $6.8trn in market capitalization 1
– Complexity of company access, relationships and knowledge of regulatory environment Market size and lack of analyst coverage can lead to inefficiencies, potentially creating significant potential
opportunities for investors
Greater China Listed Companies – Overview1
___________________________1. Bloomberg. Goldman Sachs Strategy Research as of June 30, 2011. Non-tradable shares are not listed or traded publicly on organized exchanges. Market cap for such shares is calculated using available tradable share prices, which may over-estimate the true economic size of the company. All of the shares issued are listed on organized exchanges (a.k.a. tradable) for red chips, P chips and others. Public float of such shares, however, varies. For stocks without
free float data, 30% float on share-class number of shares is assumed. Number of A-share companies includes those with A-H or A-B dual listings. Numbers of H-share, red chip, P chip and other companies include only primary listings. Primary listings are generally referred to as listings on foreigners-accessible boards, such as the Hong Kong Exchange and B-share board of the Mainland exchanges. Number of companies in "All China" does not include dual listings. Every effort has been made to make sure market cap data is not double-counted.
2. Source: FactSet as of June 30, 2011. Past performance is not indicative of future results. It is not possible to invest directly in an index.3. The shorting of A- and B-shares is prohibited.
Index Performance2 Historically strong returns vs. broad market equity indices
Investing in China
No of Active Companies
Market Cap (US$bn)
% of Total Market Cap
A shares3 2,157 3,974 58.76%
Domestic Chinese listed companies denominated in RMB. Access via Qualified Foreign Institutional Investors (QFIIs) Quota Program
B shares3 104 28 0.42%Domestic Chinese listed companies denominated in US$/HK$
H Shares/Red Chips 334 1,253 18.52%
Chinese companies listed on the Hong Kong stock exchange
ADRs (primary listings) 132 107 1.59% Chinese companies listed on US stock exchangesTaiwan Shares (TWSE) 744 807 11.93%
Taiwanese companies listed on Taiwan Stock Exchange
Others 617 594 8.78%
Chinese companies listed on the stock exchanges of the United Kingdom, Singapore, Japan, etc.
Total 4,088 6,764 100.0%
28.1%
3.2% 4.0%
9.9%6.4%
85.3%
15.2%
0.9%
65.2%
9.7%
5.6%
85.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1-Yr. 3-Yr. 5- Yr.
S&P MSCI China Shanghai Composite Hang Seng China Ent Index
18
0%
20%
40%
60%
80%
100%
120%
140%
160%
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
0%
20%
40%
60%
80%
100%
120%
140%
160%
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
0%20%40%60%80%
100%120%140%160%
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Higher Sector Return Dispersions – Larger Opportunity Set
___________________________Source: FactSet, MSCI, Goldman Sachs Strategy Research. Sector return dispersion was defined as the standard deviation of local currency daily price returns for each of the available MSCI country/GICS Level II Industry Group indexes.1. The average and dispersion numbers for MSCI China A are from January 1, 2002 to June 30, 2011. 2. The average and dispersion numbers for MSCI Japan, MSCI USA, MSCI UK and MSCI China are from January 1,1996 to June 30, 2011.
MSCI China ( Average 36.6%)2 and MSCI China A (Average 29.0%)1
MSCI US (Average 16.9%)2MSCI Japan (Average 18.9%)2
MSCI China AMSCI China
MSCI UK (Average 20.8%)2
Exploiting opportunities in inefficient markets requires deep sector and company knowledgeInvesting in China
0%
20%
40%
60%
80%
100%
120%
140%
160%
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
19
Current Valuations Among Top 5 Lowest Since 2003
MSCI China P/E Ratio Trailing 12M (1/2003 – 8/2011)1
10.28.5
11.411.1
11.011.5
4.0
8.0
12.0
16.0
20.0
24.0
28.0
32.0
Jan-03 Sep-03 May-04 Jan-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11
Price/EPS
August 2011
Late 2008 – Early 20092005
___________________________1. Sources: Bloomberg as of August 31, 2011.
Investing in China
August 2011 valuations are approaching late 2008 P/E levels.
20
Equity Market Outlook
___________________________Source: Bloomberg, Goldman Sachs Investment Research as of June 30, 2011. Past performance is not indicative of future results, which may vary.1. Chinese companies listed in Hong Kong; H shares and red chips.2. CSI 300 Index.
Strong forecasted earnings growth and potential for higher valuations
Regional Comparisons of P/E, EPS Growth and PEG
Investing in China
P/E (X) EPS Growth (%) PEG (X)MSCI Market Currency 2010E 2011E Avg 10-11E 2010E 2011E CAGR 10-11E Avg 10-11E
Australia AUD 14.1 12.4 13.2 14.2 13.4 13.8 1.0
China1 HKD 13.5 11.2 12.3 19.9 16.6 18.3 0.7
China A2 CNY 17.0 13.4 15.0 31.6 25.5 28.5 0.5Hong Kong HKD 16.9 13.6 15.1 24.2 8.6 16.1 0.9India INR 18.5 15.7 17.0 17.5 17.0 17.2 1.0Indonesia IDR 17.9 14.9 16.3 19.7 17.1 18.4 0.9Japan JPY 18.6 14.9 16.6 24.6 23.2 23.9 0.7Korea KRW 11.0 9.7 10.3 13.2 11.8 12.5 0.8Malaysia MYR 16.0 15.8 15.9 1.2 12.8 6.8 2.3Philippines PHP 16.5 15.3 15.9 8.0 12.3 10.1 1.6Singapore SGD 14.8 13.9 14.3 6.1 9.2 7.6 1.9Taiwan TWD 15.1 14.2 14.7 6.4 21.0 13.5 1.1Thailand THB 13.9 11.9 12.8 16.9 14.8 15.8 0.8
21
Investment Philosophy & Process
Investment Philosophy
Seek to add value at the company and sector analysis level
– Currently focused on two broad areas of domestic demand which we feel will benefit from long-term growth in the Chinese economy
• Broad domestic consumption-driven (auto, food/beverage, agriculture, retail, pharmaceutical, health care, real estate, entertainment)
• Domestic infrastructure: Machinery, equipment, alternative energy, utilities
– Understand and synthesize each company’s reactions to different economic shocks within each sub-sector
Deep understanding of companies
– Perform in-depth qualitative and quantitative analysis
– Understand competitive position through discussions with suppliers, clients, competitors and government agencies; key element to investing in inefficient markets
– Ability to identify catalysts for change
Local, historical knowledge
– Long-standing relationships with company management and knowledge of various cultural, political and legal customs
– Extensive experience in public and private transactions in up and down markets
– Commitment and focus on research: In 2010, the team produced over 1,600 research reports and notes
Fundamental research-intensive Greater China long/short equities with value-bias
Investment Philosophy & Process
22
Research Process Overview
Our value-bias approach seeks to generate absolute returns in up and down markets
Initial Screen In-Depth Analysis Final Stock Selection
Evaluate critical industry and company issues
Thoroughly review financial statements Build and maintain rigorous financial
models with an emphasis on cash flow analysis
Develop internal earning estimates and target prices
Narrow universe to 100 – 150 names
Determine what we believe are undervalued securities and identify potential catalysts
Assess trade off between risk and expected returns
Measure correlation of incoming positions to existing holdings
Select 35 – 50 names for final portfolio consideration
Investment Universe:Publicly traded Chinese equities in Greater China
Over 4,000 securities, or USD $6.8 trillion equity market capOver 2,000 stocks with total market cap ~USD $4.0 trillion for Chinese A-share listed companies1
Currently focused on two broad defined
areas/sectors Identify potential/current competitive
advantages through extensive company visits and communication with management
Verify data points with competitors, suppliers, clients, industry experts and relevant government policy-makers
Look for undervalued stocks Narrow universe to 350 – 500 securities
___________________________1. Bloomberg, Goldman Sachs Strategy Research. As of June 30, 2011.
Extensive on the ground research approach; over 910 company meetings/visits conducted in 2010
Investment Philosophy & Process
23
Portfolio ConstructionInvestment Philosophy & Process
Investment Approach
Investment universe Greater China Equities1
Typical number of holdings 35 - 50 names
Target average core position size 3 - 4% of overall portfolio
Focus
Undervaluation Large and mid-cap focused Risk and correlation metrics that complement existing positions Conviction can override benchmark exposure Benchmark Aware2; Offshore bias
Target return Outperform Benchmark2 over entire market cycle
Target holding period for core positions Mid-long term (may trade around core positions)
___________________________1. “Greater China” includes companies incorporated, organized under the laws of, or that have a principal office in the People’s Republic of China, Hong Kong SAR, Macau SAR or Taiwan. It also includes companies that derive a majority of their revenues or profits or that have a majority of their assets in
mainland China or Taiwan. The MSCI China TR Index, which is based on the MSCI Global Investable Market Indices Methodology, include the following share classes: B-Shares (domestic Chinese markets); P-Chips (Hong Kong, US and other markets); and H-Shares and Red Chips (Hong Kong markets).2. Benchmark = MSCI China TR Index.
Greater China Equity product aiming to capture growth and outperform markets
24
Risk ManagementLimit volatility and outperform benchmark
Investment Philosophy & Process
Ongoing Monitoring Daily morning meetings Weekly reviews drafted by portfolio
managers analyzing portfolio and top positions
Assess sector exposures and exposures to specific events
Individual position (valued at market, not at cost), capped at 10% in compliance with UCITS IV fund structure
No currency hedging Max 10% exposure to counterparties
Internal Resources
Risk Limits
Compliance oversight Risk monitoring by independent risk
management team Review and assessment by investment risk
committee
Immediate internal reviews for positions that generate marginal contribution > 50bps loss
Consistent research process
Fundamental Risk Control
Focus on achieving quality, risk-adjusted returns
25
Neuberger Berman China Equity Fund
Cumulative Return
Annualized Return
Annualized Standard Deviation6
Sharpe Ratio6
Information Ratio6 % of Updays
Worst Day Return
Best Day Return
NB China Equity Fund, Ltd.5 13.49% 5.86% 21.92% 0.25 1.28 52.25% -6.16% 5.10%
Benchmark2 -3.92% -1.78% 23.97% 0.09 50.69% -6.11% 5.50%
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sept-11 YTD ITD3
NB China Equity Fund, Ltd.1 2.02% -1.98% 4.41% 5.37% -1.43% -2.97% 1.42% -6.52% -15.52% -15.72% 12.68%
Benchmark2 -0.52% -1.80% 5.32% 1.62% 0.36% -3.67% -0.82% -9.32% -16.82% -24.38% -3.92%
Jul-09 Aug-09 Sept-09 Oct-09 Nov-09 Dec-09 2009
NB China Equity Fund, Ltd.1 9.20% -5.59% 2.91% 7.45% 6.14% 1.74% 23.10%
Benchmark2 13.67% -7.03% 4.68% 6.44% 2.46% 0.46% 21.20%
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sept-10 Oct-10 Nov-10 Dec-10 2010
NB China Equity Fund, Ltd.1 -8.04% 2.21% 4.67% -0.58% -5.07% 0.87% 4.68% 0.50% 10.80% 3.65% -0.29% -3.74% 8.61%
Benchmark2 -8.64% 2.19% 5.42% -0.33% -5.36% 1.27% 4.37% -2.75% 9.10% 3.89% -2.38% -0.71% 4.83%
Historical Fund Performance and Portfolio StatisticsData as of September 30, 2011
Monthly Returns 2010
Neuberger Berman China Equity Fund
Monthly Returns 2009
4
___________________________Source: Neuberger Berman Europe Limited. The management of the Neuberger Berman China Equity Fund (the “Fund”) has been delegated to Neuberger Berman Asia Limited. Past performance is not indicative of future results.1. The Fund’s monthly performance figures are representative of the USD Institutional Accumulating share class and are net of fees. 2. Benchmark = MSCI China TR Index.3. Period: 07/14/2009-09/30/2011.4. The Fund was launched on July 14, 2009. July 2009 performance for the Fund and Benchmark represents the period between 07/14/2009-07/31/2009.5. Calculations are based on the Fund’s gross returns, which exclude management and administrative fees and other expenses.6. Annualized standard deviation, sharpe ratio and information ratio are calculated using weekly data from the period..
Portfolio Statistics Summary1
Monthly Returns 2011
26
Portfolio Holdings
Data as of September 30, 2011
Benchmark Top 10 Holdings1Fund Top 10 Holdings
___________________________Source: Neuberger Berman Europe Limited. Pricing data for the Fund and the Benchmark’s top 10 holdings is extracted from Barclays POINT® and Bloomberg, respectively. 1. Benchmark = MSCI China TR Index.2. Percentage difference represents Fund's over/underweight relative to the Benchmark.
Neuberger Berman China Equity Fund
Portfolio Benchmark1 Difference2
Ind & Comm Bk of China – H 7.69% 5.75% 1.94%
China Mengniu Dairy Co 7.49% 0.72% 6.76%
Petrochina Co Ltd – H 6.09% 5.05% 1.03%
Tencent Holdings Ltd 5.87% 4.11% 1.76%
Belle International Holdings 4.74% 1.42% 3.32%
China Shenhua Energy Co – H 4.71% 2.61% 2.10%
Yantai Changyu Pioneer – B 4.69% 0.00% 4.69%
China Pacific Insurance GR – H 4.42% 0.98% 3.44%
China Mobile Ltd 4.01% 11.49% -7.49%
China Construction Bank – H 4.00% 5.70% -1.70%
Benchmark1 Fund Difference2
China Mobile Ltd 11.49% 4.01% -7.49%
CNOOC Ltd 5.75% 1.99% -3.77%
Ind & Comm Bk of China – H 5.75% 7.69% 1.94%
China Construction Bank – H 5.70% 4.00% -1.70%
Petrochina Co Ltd – H 5.05% 6.09% 1.03%
Tencent Holdings Ltd 4.11% 5.87% 1.76%
Bank of China Ltd – H 4.06% 0.00% -4.06%
China Life Insurance Co – H 3.46% 0.00% -3.46%
China Petroleum & Chemical – H 3.19% 1.95% -1.24%
China Shenhua Energy Co – H 2.61% 4.71% 2.10%
27
84.86%
4.69%
4.18%
6.27%
HK H Shares and Red Chips: 84.86% (*98.84%)Domestic China A Shares: 0.00% (*0.00%)Domestic China B Shares: 4.69% (*1.16%)U.S.: 4.18% (*0.00%)Singapore: 0.00% (*0.00%)Cash: 6.27% (*0.00%)
Portfolio Holdings (cont’d)
As of September 30, 2011
___________________________Source: Neuberger Berman Europe Limited. Pricing data for the Fund and the Benchmark’s market and sector exposures is extracted from Barclays POINT® and Bloomberg, respectively. * Benchmark’s Exposure.1. Portfolio allocations are subject to change.2. Benchmark = MSCI China TR Index
Sector Exposure1 Market Exposure1
Neuberger Berman China Equity Fund
9.55%
12.87%
18.88%
20.96%
2.80%
2.52%
7.90%
5.77%
11.01%
1.47%
6.04%
5.56%
18.76%
34.05%
0.80%
6.85%
6.03%
6.48%
13.47%
1.95%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Consumer Discretionary
Consumer Staples
Energy
Financials
Health Care
Industrials
Info Tech
Materials
Telecom Services
Utilit ies
Fund Benchmark
28
Neuberger Berman China Equity Fund
Key Characteristics
Fund Family: A sub-fund of the Neuberger Berman Investment Funds plc
Inception Date: July 14, 2009
Base Currency: USD
Benchmark: MSCI China TR Index
Fund Structure: ICVC / UCITS IV2
Domicile: Dublin
Fund Charges1: Institutional Class “S” 1.20% (Min subscription: US$/€/£25,000,000) Institutional Class “I” 1.50% (Min subscription: US$/€/£5,000,000) Adviser Class “A” 1.75% (Min subscription: US$/€/£10,000)
Valuation: Daily
Settlement: T+3
Trading Deadline: 11.00 a.m. T-1 Dublin time
Regulator: Irish Financial Services Regulatory Authority
Administrator Brown Brothers Harriman Fund Administration Services
Portfolio Manager: Yulin (Frank) Yao, Lihui Tang
___________________________1. Fees as of September 30, 2011. Please check with your Neuberger Berman representative to see if these share classes are available at this time.2. UCITS stands for “Undertaking for Collective Investment in Transferable Securities.” Neuberger Berman Investment Funds plc is an authorized investment company with variable capital (ICVC).
Neuberger Berman China Equity Fund
29
Related Performance
40
60
80
100
120
140
160
Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11
Long Only Portfolio Blended Index
90
100
110
120
130
140
150
Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11
Fund Benchmark
.
___________________________1. Returns are as of September 30, 2011 and reflect the performance of the long portfolio (“Long Portfolio”) of the NB Greater China Long/Short Equity Fund (the “Fund”), which was launched on February 26, 2008. March 2008 return assumes a long first month which includes the performance for the last four business days in February. Investors should be aware that the above performance for the Long Portfolio is based on the investment strategies of the Fund which may not correlate with the movements of the indices or of the NB China Equity Fund. The gross performance for the Long
Portfolio is based on the actual long portfolio exposure. It excludes the Fund’s short portfolio and return on cash, index futures, and the money market portfolio. Returns are gross of management, performance and variable AUM-based fees. Past performance is not a guarantee of future results. September 2011 returns are preliminary estimates and are subject to change. 2. Period: 02/26/2008 – 12/31/2008.3. Blended Index = 50% MSCI China TR + 50% Shanghai Composite4. Fund performance figures are as of September 30, 2011 and are representative of the USD Institutional Accumulating Class of the Neuberger Berman China Equity Fund, which was launched on July 14, 2009 and are net of fees. July performance represents the period of 07/14/2009-07/31/2009.5. Period: 07/14/2009 – 12/31/2009.6. Benchmark = MSCI China TR Index.
NB China Investment Team Track RecordRelated Performance
Long Portfolio of NB Greater China Long/Short Equity Fund1 NB China Equity Fund4
2008 Return2
2009 Return
2010 Return
2011 Return
ITD Ann.
Return
Long Portfolio -13.55% 60.11% 4.90% -7.82% 8.47%
Blended Index3 -50.82% 73.03% -4.82% -20.05% -11.42%
Relative Performance
37.27% -12.92% 9.71% 12.23% 19.89%
2009 Return5 2010 Return 2011 Return ITD Ann.
Return
NB China
Equity Fund23.10% 8.61% -15.72% 5.45%
Benchmark6
21.20% 4.83% -24.38% -1.76%
Relative
Performance1.91% 3.78% 8.65% 7.21%
Index Index
30
50
100
150
200
250
300
Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07
Hua An Asset Weighted Returns Shanghai Composite Index
___________________________1. Source: WIND and TX Consulting. WIND and TX Consulting are two major financial information providers in China. Past performance is not indicative of future returns. From May 2004 to March 2007, Frank Yao was Executive Vice President and Chief Investment Officer at Hua An Fund Management. From August 2004 to February 2007, Lihui Tang was a portfolio manager and Deputy Head of Research at Hua An Fund Management. The historical
performance above is included to illustrate the broad overview of the Portfolio Managers’ style, philosophy and investment process only. The funds presented above are long-only equity or balanced funds that invest predominantly in domestic Chinese A-shares. The historical track record reflects performance for all active managed equities/balanced funds only. Performance reflects asset-weighted returns for all active managed funds for the period (May 2004 to March 2007) at Hua An Fund Management.
2. Period: 05/01/2004 – 12/31/2004.3. Period: 01/01/2007 – 03/31/2007.
NB China Investment Team Track Record (cont’d)Related Performance
Hua An Asset Management (May 2004 – March 2007)1
2004
Return2
2005
Return
2006
Return
2007
Return3
5/04 – 3/07
Ann. Return
Hua An -6.31% 8.30% 109.68% 27.95% 41.02%
SSE Index -20.63% -8.33% 130.43% 19.01% 26.76%
Relative Performance 14.32% 16.63% -20.75% 8.94% 14.26%
Index
31
Skilled Team Led by Experienced Managers
Track record of successful investing in Greater China Equities
___________________________Source: WIND and TX Consulting. WIND and TX Consulting are two major financial information providers in China. Past performance is not indicative of future returns.Note: From May 2004 to March 2007, Frank Yao was an Executive Vice President and Chief Investment Officer at Hua An Fund Management. From August 2004 to February 2007, Lihui Tang was a portfolio manager and Deputy Head of Research at Hua An Fund Management. The historical performance above is included to illustrate the broad overview of the Portfolio Managers’ style, philosophy and investment process only. The funds presented above are long-only equity or balanced funds that invest predominantly in domestic Chinese A-shares.1. The historical track record reflects performance for all active managed equities/balanced funds only.2. Performance reflects asset-weighted returns for all active managed funds for the period (May 2004 to March 2007) at Hua An Fund Management.3. The historical track record reflects performance for the Baoli Balanced Fund and the Anxin Fund. Lihui Tang co-managed the Baoli Balanced Fund and managed the Anxin Fund while he was at Hua An Fund Management.4. Performance reflects asset-weighted returns for the Baoli Balanced Fund (August 2004 to February 2007) and the Anxin Fund (March 2006 to Febraury 2007).
Baoli Balanced Fund
Anxin FundAsset Weighted
Funds Returns4
Shanghai Composite Index
2004 (Aug-Dec) 0.20% - 0.20% -5.81%
2005 12.75% - 12.75% -8.33%
2006 124.82% 98.71% 118.50% 130.43%
1/12007 - 3/2/2007 16.22% 13.26% 14.10% 5.83%
8/2004 - 2/2007:
Accumulated Returns 195.20% 125.06% 181.67% 110.58%
Annualized Returns 53.86% 125.06% 51.01% 34.50%
Historical Performance Track Record For Lihui Tang3
Asset Weighted Funds
Returns2 Shanghai Composite Index
2004 (May-Dec) -6.31% -20.63% 2005 8.30% -8.33% 2006 109.68% 130.43% 2007 (Jan - Mar) 27.95% 19.01% 5/2004 - 3/2007:Accumulated Returns 172.20% 99.55% Annualized Returns 41.02% 26.76%
Historical Performance Track Record for Frank Yao1
Related Performance
32
FundAUM
(USDmm)4
Annualized Return
Annualized Volatility
Annualized Return
Annualized Volatility
Composite
Index3Annualized
VolatilityAnnualized
ReturnAnnualized
VolatilityAs of Q2
2007Hua An Innovation Fund 37.82% 22.31% 26.43% 19.79% 26.73% 26.58% 6.75% 2.78% 387Hua An MSCI China A Enhanced Index Fund 37.63% 23.65% 35.53% 23.44% 26.73% 26.58% 6.75% 2.78% 378Hua An Baoli Balanced Fund 54.38% 21.20% 24.81% 11.90% 39.71% 26.57% 6.73% 2.80% 299Hua An Hongli Equity Fund 271.73% 26.44% 241.26% 19.00% 230.11% 31.86% 1.24% 0.83% 1,702Hua An Mid/Small-Cap Fund 33.59% 23.52% N/A N/A 26.73% 26.58% 6.75% 2.78% 2,908Hua An Tactical Select Fund 35.55% 27.17% N/A N/A 26.73% 26.58% 6.75% 2.78% 208Anxin Fund 40.28% 26.18% N/A N/A 26.73% 26.58% 6.75% 2.78% 792Anshun Fund 52.83% 25.98% N/A N/A 28.75% 26.82% 6.35% 2.74% 1,115Shanghai SSE180 Index Fund 138.73% 30.79% 135.44% 28.84% 121.48% 29.77% 1.62% 1.46% 96
Total AUM 7,887
Fund Performance1 Benchmark2 Shanghai Composite
Index3
S&P/CITIC Government
Bond Index3
Hua An Fund PerformanceHua An Fund Performance 05/2004- 03/2007 (Frank Yao)
Hua An Fund Performance 08/2004-02/2007 (Lihui Tang)
___________________________Notes: From 5/04-3/07 Frank Yao was an Executive Vice President and Chief Investment Officer at Hua An Fund Management. From 08/04-02/07 Lihui Tang was a portfolio manager and Deputy Head ofResearch at Hua An Fund Management. WIND and TX are two major financial information providers in China.1. The funds' return and volatility are calculated on a monthly basis. Source: Wind. Past performance is not indicative of future results. Returns are net of fees and are expressed in RMB.2. The benchmarks' performances are calculated on a monthly basis. There are no benchmarks for Anxin, Anshun, Mid/Small-Cap and Tactical Select Fund for partial/entire periods of 05/2004-03/2007. Source: CICC, Wind and TX.3. Source: Wind.4. Source: Hua An Fund Management's quarterly reports. CNY/USD 7.02 (Source: SAFE; as of March 31, 2008).5. From 5/01/2004 to 6/07/2005, the benchmark was: 75%*SSE180 Index + 25%*S&P/CITIC Government Bond Index; from 6/08/2005 to 1/15/2006, the benchmark was: 95%*SSE180 Index + 5%*interbank deposit rate; from 1/16/2006 to 3/31/2007, the benchmark was: 95%*MSCI China A Index + 5%*interbank deposit rate. Source: Hua An Fund Management's quarterly reports.6. The benchmark performance of Baoli Fund is calculated on a monthly basis. There is no benchmark for Anxin Fund for partial/entire periods of 08/2004-02/2007. Source: CICC, Wind and TX..7. Lihui Tang co-managed the Baoli Balanced Fund and managed the Anxin Fund while he was at Hua An Fund Management.
Neuberger Berman Asia makes no representation as to, and accepts no responsibility or liability whatsoever for, the accuracy or completeness of such information. All projections, valuations and statistical analyses are provided to assist the recipient in the evaluation of the matters described herein. They may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results and, to the extent that they are based on historical information, they should not be relied upon as an accurate prediction of future performance. The recommendations (if any) contained herein does not take into account the specific investment objectives, financial situation or particular needs of any particular person.
FundAUM
(USDmm)4
Annualized Return
Annualized Volatility
Annualized Return
Annualized Volatility
Annualized Return
Annualized Volatility
Annualized Return
Annualized Volatility
As of Q1 2007
Hua An Baoli Balanced Fund 53.90% 21.55% 22.24% 11.58% 35.74% 26.59% 6.95% 2.82% 294Anxin Fund 47.48% 26.97% N/A N/A 32.74% 26.41% 6.51% 2.85% 756
Total AUM 1,050
Fund Performance1 Benchmark2 Shanghai Composite
Index3
S&P/CITIC Government
Bond Index3
5
6
Related Performance
7
7
33
Biographies
BiographiesInvestment Professionals
Yulin (Frank) Yao, Vice Chairman of Asia and Senior Portfolio Manager for the Greater China Investment Team, joined the firm in 2008. Frank is based in the Hong Kong office. Previously, he was a Managing Director and Senior Portfolio Manager at Avenue Capital where he was responsible for directing the investment activities of the Avenue Greater China Equity Funds. From 2004 to 2007, he was an Executive Vice President and Chief Investment Officer at Hua An Fund Management where he managed a team of over 40 investment professionals with overall responsibility for investment, research and trading for RMB 50 billion (or US$7 billion) assets. Frank also played a leading role, along with Lehman Brothers, in designing, launching and managing the Hua An International Balanced Fund, China’s first QDII investment fund. He helped triple the firm’s assets under management during the period. Under his leadership, the firm received the Best of Best Awards for China Equity (1 year and 3 year) from Asia Asset Management, an Hong Kong based independent research firm. From 2002 to 2004, Frank worked for Berens Capital, a New York based hedge fund investment firm, where he was responsible for portfolio construction, quantitative analysis and risk management. From 1999 to 2001, Frank developed and managed a quantitative equity portfolio at Alpha Asset Management. From 1996 to 1999, Frank conducted global asset allocation and risk management at Goldman Sachs and from 1993 to 1996 helped build the mortgage backed securities analytics for Dow Jones (formerly Telerate), all in the US.
Frank is a member of the Standing Committee of the Chinese People’s Political Consultative Conference (CPPCC) in Shanghai Pudong. He sits on the QDII Expert Committee for China Securities Regulatory Commission (CSRC). He was also a member of the Financial Market Expert Group for PBOC (PRC’s central bank) from 2005 to 2007. Frank received an MBA in Finance in 1998 from the Stern School of Business at New York University, where he was honored as a Stern Scholar. He conducted Ph.D studies in Engineering at Columbia University, earned an MS from Georgia Institute of Technology and a BS from Fudan University.
Lihui Tang, Senior Vice President, joined the firm in 2008. Based in Hong Kong, Lihui is the Portfolio Manager for the Greater China Investment Team. Previously, he was a senior vice president at Avenue Capital, where he was a portfolio manager for the Avenue Greater China Equity Funds team. Prior to that, he was a portfolio manager and deputy head of research at Hua An Fund Management, where he co-managed two active funds with combined assets under management of approximately USD $1 billion. These funds received numerous awards from Morningstar, Lipper and Chinese publications. Before joining Hua An, he was a research analyst with SYWG Securities in Shanghai, responsible for the pharmaceutical sector. Prior to that, he was also a research analyst with Da Peng Securities in the real estate and building materials industries. Lihui received a BS in Engineering at Shanghai Jiao Tong University and an MS in Economics from Tongji University. He also has been awarded the Chartered Financial Analyst designation.
Yuxin Chen, Vice President, joined the firm in 2008. Based in Shanghai, Yuxin is a Senior Research Analyst for the Greater China Investment Team. Prior to joining the firm, he was a senior research analyst at Avenue Capital. Previously, Yuxin was a senior buy-side analyst in the real estate, retail and tourism sectors in the asset management department of Orient Securities Co. Previously, Yuxin was a sell-side analyst in the real estate sector for Shenyin Wanguo Research & Consulting Co. He has also worked for Guangdong Securities Beijing, underwriting and establishing a trading outlet for local securities, as well as participating in the IPOs and refinancing of several firms. Yuxin was ranked #2 (real estate) in 2004 and 2005 by institutional investors in China (New Fortune Best Analysts Award). Yuxin received a BA in Economics and an MS in Finance from the Central University of Finance and Economics.
Biographies
34
BiographiesYing Gan, Vice President, joined the firm 2011. Based in Hong Kong, Ying is a Senior Research Analyst for the Greater China Investment Team. Previously, she had been a senior research analyst and portfolio manager at Greenwood Asset Management for four years. Prior to that, she was a financial analyst at American Water Works Co, a summer intern at Bunge Global Markets and a senior research analyst at Galaxy Fund Management. She also spent about five years at Shenying Wanguo Research & Consulting Co as a senior research analyst and head of consumer research. Prior to that, she was a research analyst at Jinhua Trust and Investment. She was ranked #1 (food & beverage) for consecutive two years in 2003 & 2004 by institutional investors in China (New Fortune Best Analysts Award). As a co-portfolio manager at Greenwood, she has received numerous awards for the fund performance including being one of top 10 best performers among 170+ funds in terms of two- and three-year risk-adjusted returns by Morningstar Onshore RMB Hedge Funds Monthly Reports in 2010. Ying received a Bachelor in Economics from Southwestern University of Finance and Economics and an MBA from the Olin School of Business at Washington University at St. Louis where she was a recipient of the Dean’s Scholarship. She also has been awarded the Charted Financial Analyst designation.
Xinyu Gao, Vice President, joined the firm in 2008. Based in Shanghai, Xinyu is a Senior Research Analyst for the Greater China Investment Team. Prior to joining the firm, he was a senior research analyst at Avenue Capital. Before that, Xinyu was a senior sell-side analyst in the machinery sector for Shenyin Wanguo Research & Consulting Co. Previously, he worked with Shenyang College of Industry as an assistant engineer. Xinyu was ranked #2 (machinery) in 2006 by institutional investors in China (New Fortune Best Analysts Award). He graduated in Industry Engineering from Shenyang College of Industry and received an MS in Economics from Fudan University.
Wei (Kevin) Ke joined the firm in 2008. Based in Shanghai, Kevin is a Research Analyst for the Greater China Investment Team. Prior to joining the firm, he was a research analyst at Avenue Capital. Previously, Kevin was an investment analyst at DFJ DragonFund China where he focused on the Internet and media-based industries. Kevin received a BS in Information Technology Engineering from Zhejiang University and an MS in Management Science from Fudan University.
Yingmin (Peyton) Jian joined the firm in January 2010. Based in Shanghai, Peyton is a Research Analyst for the Greater China Investment Team. Prior to joining the firm, she was an analyst for FTI Consulting, a Washington DC-based global business consulting firm. Previously, she was an intern at JP Morgan and CICC. Peyton received a BS in Economics from Peking University and an MS in Finance from Princeton University.
Zhe (Peter) Chen joined the firm in January 2010. Based in Shanghai, Peter is a Research Analyst for the Greater China Investment Team. Prior to joining the firm, he was an auditor for the financial services industry at PricewaterhouseCoopers. Peter received a BS in Economics from Fudan University.
Guanglei Li joined the firm in May 2011. Based in Shanghai, Guanglei is a Research Analyst for the Greater China Investment Team. He recently completed internships at Fidelity Management & Research and Neuberger Berman. Prior to pursuing his MBA, Guanglei was a manager at Best Buy in China, focusing on strategic planning and financial analysis. Previously, he was a finance manager at Procter & Gamble in China where he focused on financial analysis and M&A. Guanglei received a BA in Finance & Business Administration from Coventry University and an MBA from London Business School.
Youyi Weng joined the firm in July 2010. Based in Hong Kong, Youyi focuses on trading operations for the Greater China Investment Team. Prior to joining the firm, he spent over four years at Citigroup as an associate. Youyi holds a BS in Electrical and Electronic Engineering from Nanyang Technological University in Singapore.
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Biographies
Business and Operations Professionals
Pauline Hew, Senior Vice President, joined the firm in 2007. Based in Singapore, Pauline is the Head of Operations for the Asia Pacific region. Prior to joining the firm, she was a controller with Avenue Capital. Previously, she was a vice president at Bank of New York, responsible for setting up the Global Funds Services operations in Asia. Prior to that, she was head of investor services at Bermuda Trust / HSBC Institutional Trust, responsible for day-to-day operations, managing key relationships and project managed a joint venture company with United Overseas Bank. She has held positions as head of operations for Tokyo Mitsubishi International, head of Asia fixed income settlements for Barclays, senior manager in operations for MeesPierson Asia Ltd. and operations manager for Rothschild Asset Management, where she oversaw private banking operations. Pauline received a BBA and an MS from RMIT University and an MS in Accounting from Curtin University.
Ria Nova, Senior Vice President, joined the firm in 2003. Based in Hong Kong, Ria is Head of Business Development and a Portfolio Specialist for the Greater China Equity business. Previously, she oversaw product development and business management for the firm’s Strategic Commodities offering and for the third party hedge fund platform, Hedge Advisor in New York. Prior to joining the firm, Ria oversaw marketing strategy for the ING Barings prime brokerage group. She began her career as a regional marketing director for M&T Bank Corporation. Ria received a BA in Political Science from the University of Rochester and an MBA from Harvard Business School.
Adrianne Yu, joined the firm in 2011. Adrianne is an Analyst in the Portfolio Specialist team for the Greater China Equity business. Prior to joining the firm, Adrianne worked as an analyst at Credit Suisse’s Hong Kong office in their Investment Banking Division. Adrianne also interned at a number of firms including Paradigm Global Advisors, LLC and Merrill Lynch. Adrianne earned a BS in Finance and CPA Accounting from New York University, Leonard N. Stern School of Business.
Biographies
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Definitions & Disclaimer
Benchmarks and Definitions
___________________________It is not possible to invest directly in an index.
Definitions & Disclaimer
Benchmarks and Definitions
Alpha: A measure of value added. The estimated alpha represents how much of the rate of return on the portfolio is attributable to the manager’s ability to derive above-average risk-adjusted returns.
Beta: A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market.
Hang Seng China Enterprises Index: The index is a free float capitalization-weighted index comprised of H-Shares listed on the Hong Kong Stock Exchange and included in the Hang Seng Mainland Composite Index. The base value of this index is 2000 as of Jan 3, 2000. This index replaced the old HSCE index on Oct. 3, 2001.
MSCI China Index: The index is a free float-adjusted market capitalization index that is designed to measure equity market performance in China. The MSCI China universe includes equity securities issued by companies incorporated in the People's Republic of China (PRC), and listed in the form of B shares on the Shanghai Stock Exchange (in US$) or Shenzhen Stock Exchange (in HK$), H shares on the Hong Kong Stock Exchange (in HK$) or N-shares on the New York Stock Exchange (in US$). The MSCI China universe also includes companies not incorporated in the PRC or the Hong Kong Special Administrative Regions.
MSCI China Total Return Index (Benchmark): Please refer to the definition above. MSCI Total Return Indices measure the market performance, including both price performance and income from gross dividend payments. Please refer to MSCI Barra for additional details.
Shanghai Stock Exchange Composite Index: The index is a capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange.
The S&P/CITIC China Index: The index is a market capitalization weighted index which includes the 30 largest, most liquid companies in the Chinese market that are both listed on exchanges outside Mainland China and whose ownership is primarily Chinese.
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DisclaimerDefinitions & Disclaimer
EU0055 09/11
This document is for distribution to Professional Clients and should not be relied upon by any other person.
The fund mentioned in this document may not be eligible for sale in some countries and it may not be suitable for all types of investors. Past performance is not indicative of future results. For details of the investment risks, see the current prospectus. We do not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. Opinions expressed herein reflect the opinion of Neuberger Berman Europe Limited (“NB Europe”) and are subject to change without notice.
Neuberger Berman Investment Funds plc (the “Fund”) is authorised by the Central Bank of Ireland (the “Central Bank”) as an Undertaking for Collective Investment in Transferable Securities under the European Communities (“UCITS”) Regulations 2011 (S.I. 352 of 2011) of Ireland, as amended.
This document is for information purposes only and it should not be regarded as an offer to sell or as a solicitation of an offer to buy the securities or other instruments mentioned herein. No part of this document may be reproduced in any manner without the written permission of NB Europe. Shares in the Fund are offered only on the basis of the information contained in the prospectus, simplified prospectus and the latest audited annual accounts and any subsequent half-yearly accounts of the Fund.
Please note that any dividends which the Fund may receive are subject to a 30% withholding tax in the US. The benchmark does not take into account the effects of tax and the deduction is therefore not reflected in the benchmark return illustrated herein.
The investment objective and performance benchmark is a target only and not a guarantee of the Fund performance. Adverse movements in currency exchange rates can result in a decrease in return and a loss of capital. Investments of each portfolio may be fully hedged into its base currency potentially reducing currency risks but may expose the portfolio to other risks such as a default of a counterparty.
Small cap companies carry greater risk and are less liquid that larger companies. High Yield Bonds carry a higher level of default risk and can be less liquid than government bonds and investment grade corporate bonds.
The Neuberger Berman Diversified Currency Fund may invest more than 35% of its net assets in transferable securities and money market instruments issued by an OECD government.
Economies in Emerging Markets are generally less well regulated and may be adversely affected by trade barriers, exchange controls, protectionist measures and political / social instability. There is a risk of volatility due to lower liquidity and the availability of reliable information.
Real estate investments are subject to greater potential risks and volatility than a more diversified portfolio, and the share values may decline due to events affecting the real estate industry. The properties held by REITs could fall in value for a variety of reasons, such as declines in rental income, poor property management, environmental liabilities, uninsured damage, increased competition, or changes in real estate tax laws. There is also a risk that REIT stock prices overall will decline over short or even long periods because of rising interest rates.
This document is issued by NB Europe which is authorised and regulated by the UK Financial Services Authority (“FSA”) and is registered in England and Wales, at Lansdowne House, 57 Berkeley Square, London, W1J 6ER. Neuberger Berman is a registered trademark. © 2011 Neuberger Berman.
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