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Wells Fargo Asset Management and Wells Capital Management are trade names of the investment management services
provided by certain subsidiaries of Wells Fargo & Company and marketed by Wells Fargo Securities International Limited.
Wells Fargo Securities International Limited is authorised and regulated by the U.K. Financial Services Authority.
Emerging Markets Equity Total Return
Wells Fargo Asset Management
Delivering investment success to a diverse mix of clients with a
distinctive focus on dynamic client partnerships - we identify client
challenges, develop innovative solutions and execute tailored
investment strategies.
Solutions leverage 35+ specialized and autonomous investment
teams, spanning all major asset classes, organized strategically and
supported by independent risk management.
Clients include institutions (e.g. retirement plans, corporations,
insurance companies, endowments and foundations, sovereign
wealth funds and central banks), financial advisors, and individual
investors worldwide.
AUM USD 452B
CEO Mike Niedermeyer, CFA
Team Members Over 1,600
Investment
Professionals
500+
Investment Teams 35+
Headquarters San Francisco, CA
22nd largest U.S.-based asset manager1
39th largest global asset manager2
Wells Fargo Advantage Funds is 11th
largest U.S. mutual fund company3
Note: All figures as of 3/31/13 1 2012 Institutional Investor, pro-forma rank based on assets as of
12/31/11 2 2012 P&I Towers Watson Global 500 Survey, pro-forma rank based on
assets as of 12/31/11 3 Strategic Insight, as of 03/31/13
Business Snapshot
WFAM Assets as of March 31, 2013
EQUITY FIXED INCOME ALTERNATIVE/
MULTI STRATEGY
Wells Capital Management
($342B)
By Geography By Geography
Currency
Income-oriented
Liability-driven
U.S.
Global
Global ex-U.S.
Emerging Markets
U.S.
Global
Global ex-US
Emerging Markets
By Market Cap By Duration
All Cap
Large Cap
Mid Cap
SMID Cap
Small Cap
Money Market
Short
Intermediate
Long
By Style By Sector
Core
Growth
Value
Unconstrained/specialty
Government
Investment Grade Credit
Mortgage
Municipal
High Yield/Bank Loans
The Rock Creek Group4
($7B)
Multi-Manager Emerging Markets (local
managers)
Hedge Fund of Funds
Golden Capital Management5
($6B)
Quantitative Global Equity
Peregrine Capital Management
($2B)
U.S. Small Cap Equity
Nelson Capital Management
($1B)
U.S. SRI/ESG Equity
ECM Asset Management
($9B)
Multi Asset Class Credit Alternative Credit Strategies
Overland Advisors4
($1B)
Multi-strategy Relative Value
Hedge Fund
Galliard Capital Management
($85B)
Stable Value & Intermediate
Fixed Income
WFAM Investment Capabilities wellsfargoassetmanagement.com
4 Wells Fargo owns a minority stake in The Rock Creek Group and Overland Advisors. 5 Wells Fargo owns a majority stake in Golden Capital Management.
Emerging Markets Equity Total Return
www.wellscap.com First Quarter 2013
WELLS CAPITAL MANAGEMENT® is a registered service mark of Wells Capital Management, Inc.
Wells Capital Management is the trade name of the investment management services provided by certain subsidiaries of Wells Fargo & Company and marketed by Wells
Fargo Securities International Limited and Wells Capital Management, Inc. Wells Fargo Securities International Limited is authorised and regulated by Financial Conduct
Authority within the U.K.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 5
Table of Contents
I. Overview
II. Investment Philosophy and Process
III. Emerging Markets Equity Total Return Performance and Portfolio Characteristics
IV. China Equity Strategy Performance and Portfolio Characteristics
V. Addendum
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 6
Overview
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 7
Wells Capital Management (“WellsCap”) is a
leading institutional investment management
firm with the strength and resources of our
parent, Wells Fargo Bank, N.A.
Wells Capital Management
Autonomous Investment Teams
Preserve agility and focus
Consistently generate alpha
Have freedom from the distractions of running a business
Dynamic Client Relationships
We listen, inform, and analyze
We customize solutions as appropriate
We are consultative to meet clients’ evolving needs
Independent Risk Management
Instills a culture of accountability for performance
Facilitates a detailed understanding of portfolio risk
Impels portfolio managers to deliver results consistent
with client expectations
Focused on three key principles that allow us to exceed our clients’ expectations
We believe skillful, autonomous investment
boutiques are successful with the support of
independent risk management.
We are committed to delivering superior
investment service to our clients with
expertise in all traditional asset classes.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 8
Breadth of Investment Management Expertise
By Sector1 AUM (USD B)
Equity 71
Fixed Income2 67
Blend 6
Short Duration3 61
By Client Type AUM (USD B) Assets (%)
Corporate 57 17
Foundation/Endowment/Non-Profit 12 3
Public/Government 17 5
Sovereign Wealth Fund/Central Bank 5 2
Union 2 1
Sub-Advisory4 110 54
Other 6 1
WellsCap Assets Under Management As of March 31, 2013 – Diversified Client and Asset Base in excess of USD 342B
1 Total firm assets under management are in excess of USD 342B. The charts above exclude USD 137B in Money Market Mutual Funds and other Wells
Fargo Affiliated Money Market Accounts. Assets under management, excluding Money Market Mutual Funds and other Wells Fargo Affiliated Money
Market accounts total USD 205B. 2 Includes accounts with durations over 1-5 year benchmarks. 3 Includes accounts with durations up to 1-5 year benchmarks, excluding Money Market Funds. 4 Sub-Advisory consists of USD 85B in long-term funds sub-advised for Wells Fargo and USD 25B in external sub-advisory funds.
U.S. Fixed Income2
(30%)
Blend
(3%)
U.S. Equity
(28%)
Short Duration3
(30%)
Non-U.S. Equity
(6%) Non-U.S. Fixed Income2
(3%)
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 9
Emerging Markets Equity Income
Each security in the portfolio has a dividend yield greater than the index
Primary focus of the portfolio is income, but not at the expense of growth
Emerging Markets Equity Total Return
Each security pays a dividend and the dividend yield of the portfolio is greater than the yield of the index
A portion of the portfolio is focused on growth in addition to income
Strategy Profiles
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 10
WellsCap Emerging Markets Equity Team
Note: CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Anthony Cragg
Senior Portfolio Manager
Asia
Alison Shimada
Associate Portfolio Manager,
and Product Specialist
EMEA
Research Analysts Portfolio Managers
Elaine Tse
Senior Analyst
Asia
Svetlana Silverman
Senior Analyst
EMEA
Jack Cloonan
Trader
Latin America & Asia
Steven C. Connolly
Senior Trader
EMEA
International Equity Traders – 24 Hour Regional Coverage
Clayton Carlin
Trader
Asia
Peter Fetter
Trader
Latin America & Asia
Connie Ou, CFA
Analyst
Asia & Latin America
Sergio Torres
Senior Analyst
Latin America
Yuan Yiu Tsai
Associate Analyst
Asia
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 11
WellsCap Emerging Markets Equity Team
Depth of Regional Skills and Experience
Research Team Countries Lived in Language Fluency Coverage Education
Joined
Team
Investment
Experience
Anthony Cragg U.S., U.K., Hong Kong,
Japan, Singapore
English Asia BA Christ Church College, Oxford
MA Christ Church College, Oxford
2006 32 years
Alison Shimada U.S., Japan, Malaysia English, Japanese EMEA BA University of California Berkeley
MBA Harvard Business School
2005 27 years
Elaine Tse U.S, Hong Kong,
Taiwan
English, Mandarin,
Cantonese, Spanish
Asia BA & BS University of Pennsylvania
MBA Harvard Business School
2000 22 years
Sergio Torres U.S., Mexico English, Spanish Latin America BA Universidad Panamericana 2012 18 years
Svetlana Silverman U.S., Kazakhstan,
Russia, Ukraine
English, Russian EMEA MS D. Mendeleev University of
Chemical Technology of Russia
MBA University of San Francisco
2006 15 years
Connie Ou, CFA U.S., China English, Mandarin,
Cantonese
Asia,
Latin America
BA Sun Yat-Sen University
MBA University of San Francisco
2004 10 years
Yuan Yiu Tsai U.S., Singapore, Taiwan English, Mandarin Asia BS Duke University
MS University of Pennsylvania
2012 5 years
Note: CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 12
Investment Philosophy and Process
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 13
Investment Philosophy
Observations
In emerging markets, dividend-paying companies exist across a wide range of sectors and countries
Unlike in developed markets, these companies offer long-term growth potential along with current income
We believe
Emerging markets require a fundamental approach to final stock selection for best alpha generation
Sector and country rotation offers substantial opportunity and growth prospects given the inefficient nature
of emerging markets
Dividend yield is a leading indicator for good companies with attributes we seek: strong business models,
attractive growth prospects, sustainable cash flow generation, strong financial profiles and minority
shareholder friendly management
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 14
High Yield Versus Low Yield Emerging Market Stocks
Source: FactSet
Note: Data as of 12/31/2012. High Yield is defined as the group of securities in the top half of the MSCI-EM index as measured by
dividend yield. Low yield is defined as the group of securities in the bottom half of the MSCI-EM index as measured by dividend yield.
Within the emerging markets, high dividend yielding stocks tend to outperform low
dividend yielding stocks over the full market cycle.
$50
$100
$150
$200
$250
$300
12/2004 12/2005 12/2006 12/2007 12/2008 12/2009 12/2010 12/2011 12/2012
MSCI Emerging Markets Return Decomposition Growth of $100 (2005 - 2012)
High Yield
Low Yield
Total
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 15
Competitive Advantages
Research focus on management’s attitude towards cash is indicator of good companies
Risk management embedded throughout process with clear sell policy as it relates to yield
Total portfolio yield lowers return volatility, positions strategy as strong compliment to high beta peers
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 16
Investment Process Overview
Idea Generation Macroeconomic
and Fundamental
Analysis
Portfolio
Construction
Actionable Items
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 17
Idea Generation
300 – 400 companies for additional research
Emerging Markets Equity universe (2,500-3,000 companies)
Quantitative Screens
Dividend Yield Screen
EM Total Return: DY > 0
(2500 companies)
EME Income: DY > Index DY
(500-900 companies)
Market Cap > US$200M
(300-500 companies)
Trading Liquidity
Qualitative Sources
Company Management and
Local Expertise
Industry Conferences,
Experts
Competitors, Customers
Macro Views
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 18
Macroeconomic Views
Macroeconomic Analysis
Country
Geopolitical framework
GDP growth
Inflation
Consumption
Currency
Underlying risks
Sector
Structural change
Capacity expansion
Supply/demand
Global growth
Sector headwinds
Analysts understand this Macroeconomic View when identifying good companies
20% of stock selection can come from this macroeconomic research
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 19
Fundamental Analysis
Macroeconomic Views
Competitive Positioning
Business model strengths,
catalysts
Supply chain, operational risks
Global sector growth and
positioning
Management quality and
expectations
Valuation Spreadsheet
Industry-specific metrics: P/E,
P/B, Sum of parts, DCF model
Growth prospects
Price targets
Upside/downside scenarios
Company Management
Face-to-face meetings or
on-sites
Attitude toward
shareholders, dividends
Approach to cash
Each analyst’s Actionable Items incorporate these four inputs, including macroeconomic analysis
Actionable Items
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 20
Actionable Items
Decision-Making Process
Organized meeting schedule
Efficient communication and ongoing dialog outside of meeting schedule for best turnaround time
Analyst Research
Deliverables
Company meeting notes
Financial models
Valuation spreadsheet
Recommendation report with
stock rating 1-5, target price
Summary of all ratings and
target prices
Regional meeting notes with
macro update
Team Collaboration
Weekly team and regional
meetings
Discuss company events
Macroeconomic outlook
Valuation questions
Actionable items and new
recommendations
Buy/Sell Decisions
Analysts make stock
recommendations
Analysts and PMs discuss
investment case
PMs consult on every decision
Lead PM has ultimate authority
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 21
Portfolio Construction
Portfolio Construction Guidelines
Benchmark is MSCI Emerging Markets Net Index
All holdings pay a dividend yield
Emerging Markets Equity Income – all holdings pay a dividend yield greater than index
Emerging Markets Equity Total Return – portfolio dividend yield greater than index
80 – 120 holdings
Position limit 10%, typically 1-3%
Sector weights
Emerging Markets Equity Income – 50% maximum
Emerging Markets Equity Total Return – 40% maximum
Country weights limited to 30%
Regional weights unconstrained
Cash limit 10%, typically 5%
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 22
Risk Management
Risk is managed throughout Fundamental Research and Portfolio Construction
Sell Discipline
Stock reaches price target (dividend yield decline)
Elimination of dividend; Deterioration in company fundamentals, dividend policy, yield
Idea replacement
Sector/country allocation changes
Change in risk parameters
Reevaluate when stock price declines by 20% from purchase price
Portfolio Monitoring
Justify active risk exposures at stock and sector levels
Guard against unintended risk exposures
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 23
Risk Management
Macroeconomic outlook
Risk reward target price
Stock rating 1-5
Diversification guidelines
Individual position limits
Cash balance limit
Sector constraints
Fundamental Research
Portfolio Construction
24/7 trading
Back up portfolio
managers
Automated alerts for
potential guideline
violation
Automated daily trade
report
Counterparty risk
monitor
Trade Execution
Portfolio Construction
Daily portfolio holding
report
Weekly performance
attribution
Monthly portfolio updates
Semi-annual, annual
reports
Quarterly client calls
Performance Evaluation
Daily Office of CIO
risk communication
Monthly firm
management reviews
Quarterly senior
management review
Barra analysis
Projected tracking
error, beta
Risk Management
Oversight
Team Firm
Strong Risk Management Controls
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 24
Emerging Markets Equity Total Return
Performance and Portfolio
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 25
Investment Results
Annualized Returns As of March 31, 2013
All returns greater than one year are annualized. Note: The GIPS compliant presentation can be found at the end of this presentation.
1.9%
8.9%
4.3%
11.9%12.8%
1.6%
7.7%
4.2%
10.7%11.5%
-1.6%
2.0%
-3.6%
3.3%3.8%
-5.0%
0.0%
5.0%
10.0%
15.0%
3 Month 1 Year 2 Year 3 Year Since Inception (1/1/10)
Emerging Markets Equity Total Return Composite (Gross)
Emerging Markets Equity Total Return Composite (Net)
MSCI Emerging Markets Net Index
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 26
*This information is based on a representative account within the Emerging Markets Equity Total Return Composite. The representative account has been
selected by meeting the following criteria: 1) the account is in the Emerging Markets Equity Total Return Composite, 2) Wells Capital Management represents
that the holdings, characteristics and risk profile are representative of the strategy/style of the Emerging Markets Equity Total Return Composite. Any changes to
the representative account must be approved by the director of investment risk management. Source: FactSet
Portfolio Characteristics
Relative Regional and Country Weights As of March 31, 2013
Overweight Underweight
0.7%
0.7%
0.7%
-2.4%
0.9%
0.8%
-1.4%
-5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5%
Panama
Norway
Australia
Middle East/Africa
Emerging Europe
Latin America
Total Asia
Emerging Markets
Equity Total Return*
MSCI EM
Net Index Difference
Brazil 12.8 12.7 0.1
Chile 4.9 2.0 2.9
Colombia 0.6 1.2 -0.6
Mexico 4.1 5.6 -1.5
Peru 0.5 0.6 -0.1
Latin America 22.9 22.1 0.8
China 15.6 12.6 3.0
Hong Kong 6.3 5.5 0.8
India 2.2 6.6 -4.4
Indonesia 2.2 3.0 -0.8
Malaysia 4.7 3.5 1.2
Philippines 4.8 1.1 3.7
Singapore 2.4 0.0 2.4
South Korea 6.0 14.8 -8.8
Taiwan 10.2 10.7 -0.5
Thailand 4.7 2.7 2.0
Total Asia 59.1 60.5 -1.4
Czech Republic 0.0 0.2 -0.2
Hungary 0.0 0.2 -0.2
Poland 1.6 1.5 0.1
Russia 6.7 5.9 0.8
Turkey 2.5 2.1 0.4
Emerging Europe 10.8 9.9 0.9
Egypt 0.0 0.3 -0.3
Morocco 0.0 0.1 -0.1
South Africa 5.1 7.1 -2.0
Middle East/Africa 5.1 7.5 -2.4
Australia 0.7 0.0 0.7
Panama 0.7 0.0 0.7
Norway 0.7 0.0 0.7
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 27
Portfolio Characteristics
Characteristics
Portfolio Characteristics Portfolio*
MSCI EM
Net Index
Price/Earnings (1Yr. Forecasted) 10.6x 10.7x
EPS Growth (1 Yr. Forecasted) (%) 14.1 15.3
Dividend Yield (%) 3.8 2.7
Number of Countries 22 22
Number of Holdings (ex-cash) 108 823
Weighted Average Market Cap ($B) 41.6 45.9
Market Cap Profile (%)
$0 - $2 Billion 20.9 2.4
$2 - $5 Billion 20.1 13.1
$5 - $10 Billion 9.5 15.8
$10 - $15 Billion 11.4 12.6
$15+ Billion 38.1 56.1
*This information is based on a representative account within the Emerging Markets Equity Total Return Composite. The representative account has been
selected by meeting the following criteria: 1) the account is in the Emerging Markets Equity Total Return Composite, 2) Wells Capital Management represents
that the holdings, characteristics and risk profile are representative of the strategy/style of the Emerging Markets Equity Total Return Composite. Any changes to
the representative account must be approved by the director of investment risk management. 1Top ten holdings are based on market value of the representative account and not necessarily held in all client portfolios. The information shown is not intended
to be, nor should it be construed to be, a recommendation to buy or sell an individual security. Past performance is not indicative of future results. A list of all
holdings from the prior one-year period is available upon request.
Source: Bank of New York Mellon Corporation, FactSet and Bloomberg
Sector Distribution
Top Ten Equity Holdings1
Company Country
Trailing
Div. Yield
Portfolio*
Weight (%)
Industrial & Commercial Bank of China Ltd. China 5.3 2.0
SK Telecom Co. Ltd. Korea 5.2 2.0
China Construction Bank Corp. China 5.1 1.9
Taiwan Semiconductor Manufacturing Co. Ltd. Taiwan 3.0 1.7
Lukoil Holdings ADS Russia 3.9 1.5
Itau Unibanco Holding SA Pref Brazil 3.2 1.5
Powszechny Zaklad Ubezpieczen S.A. Poland 5.6 1.5
Transmissora Alianca de Energia Eletrica SA Unit Brazil 4.2 1.5
United Microelectronics Corp. ADS Taiwan 4.5 1.5
Sberbank Rossia Russia 4.5 1.4
29.1%
16.6% 10.6% 9.8% 9.1% 8.9% 6.5% 4.3% 3.9% 1.1%
27.7%
7.5% 12.0%
7.7% 10.7% 13.8%
6.5% 9.1% 3.6%
1.4%
0.0%
20.0%
40.0%
Fin
ancia
ls
Te
lecom
munic
atio
n S
erv
ices
Energ
y
Consum
er
Dis
cre
tio
nary
Ma
teria
ls
Info
rmatio
nT
echn
olo
gy
Industr
ials
Consum
er
Sta
ple
s
Utilit
ies
Health C
are
Portfolio* MSCI EM Net Index
As of March 31, 2013
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 28
China Equity Strategy
Performance and Portfolio
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 29
China Equity Investment Philosophy and Objective
Philosophy
We believe that China is in the early stages of a structural shift towards an economy that
can be supported by domestic consumption and that will move up the value chain to
produce higher value-added goods and services.
Objective
The investment objective of the strategy is to achieve long term capital appreciation
through investing in the strong and sustainable growth of the Chinese economy.
We identify high quality, high return companies with significant operations, production
activities, investments and or assets in China.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 30
China Equity Investment Process
Investment Process Overview – Four Steps
China Equity
Portfolio
(60-120 securities)
Initial Screening
China stock universe:
500 companies
Macroeconomic
analysis
Identify China related
investment themes
and subthemes
IPOs
Trading liquidity
Fundamental
Company Analysis
200-250 Companies
Viability of business
model
Growth prospects
Financial forecasts
Corporate governance
Company meetings/
visits
Channel checks
Appraisal of intrinsic
value
Market perception/
expectation
Portfolio Construction
Conviction level
Expected return
Risk and reward
Diversification
Investment
guidelines
Monitoring & Sell Decisions
Sell disciplines
Deterioration in
company
fundamentals
Stocks reaching or
exceeding intrinsic
value
Idea replacement
Sector allocation
changes
Change in risk
parameters
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 31
Investment Results
China Equity Strategy Periods Ending March 31, 2013
0.5%
12.5%
-1.5%
9.0%
4.7%
-2.2%
17.2%16.0%
-2.4%
7.8%
-2.6%
3.6%
6.6%
-3.6%-4.5%
-10.0%
0.0%
10.0%
20.0%
3 Months 1 Year 2 Years 3 Years Since Inception
(4/1/09)
China Equity Strategy (Gross) China Equity Strategy (Net) MSCI China (Net) Index
All returns greater than one year are annualized. Note: The GIPS compliant presentation can be found at the end of this presentation.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 32
Country Allocations – China Equity Strategy
*This information is based on a representative account within the China Equity Strategy Composite. The representative account has been selected by meeting the
following criteria: 1) the account is in the China Equity Strategy Composite, 2) Wells Capital Management represents that the holdings, characteristics and risk
profile are representative of the strategy/style of the China Equity Strategy Composite. Any changes to the representative account must be approved by the
director of investment risk management. Source: FactSet
Underweight Overweight
Percentage Overweight or Underweight
vs. MSCI China Gross Index As of March 31, 2013
China Equity
Strategy*
MSCI China
(Net) Index Difference
China 70.3 69.6 0.7
Hong Kong 27.1 30.4 -3.3
Taiwan 2.6 0.0 2.6
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 33
Sector Allocation
As of March 31, 2013
Portfolio Profile
China Equity Strategy* MSCI China (Net) Index Difference (%)
Financials 26.8 40.1 -13.3
Industrials 19.7 6.2 13.5
Energy 12.3 17.0 -4.7
Consumer Discretionary 8.6 4.9 3.7
Information Technology 6.4 6.2 0.2
Health Care 6.4 0.9 5.5
Utilities 6.2 3.6 2.6
Materials 6.0 4.2 1.8
Telecommunication Services 5.3 11.4 -6.1
Consumer Staples 2.2 5.4 -3.2
*This information is based on a representative account within the China Equity Strategy Composite. The representative account has been selected by meeting
the following criteria: 1) the account is in the China Equity Strategy Composite, 2) Wells Capital Management represents that the holdings, characteristics and
risk profile are representative of the strategy/style of the China Equity Strategy Composite. Any changes to the representative account must be approved by the
director of investment risk management.
Source: The Bank of New York Mellon Corporation
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 34
Portfolio Profile
*This information is based on a representative account within the China Equity Strategy Composite. The representative account has been selected by meeting
the following criteria: 1) the account is in the China Equity Strategy Composite, 2) Wells Capital Management represents that the holdings, characteristics and
risk profile are representative of the strategy/style of the China Equity Strategy Composite. Any changes to the representative account must be approved by the
director of investment risk management. Top ten holdings are based on market value of the representative account and not necessarily held in all client
portfolios. The information shown is not intended to be, nor should it be construed to be, a recommendation to buy or sell an individual security. Past
performance is not indicative of future results. A list of all holdings from the prior one-year period is available upon request.
Top Ten Equity Holdings*
As of March 31, 2013
Description
Industrial & Commercial Bank of China Ltd. Commercial Banks
China Construction Bank Corp. Commercial Banks
PetroChina Co. Ltd. Oil Gas & Consumable Fuels
China Mobile Ltd. Wireless Telecommunication Services
CNOOC Ltd. Oil Gas & Consumable Fuels
China Resources Power Holdings Co. Ltd. Independent Power Producers & Energy Traders
China Life Insurance Co. Ltd. (China) Insurance
Cosco Pacific Ltd. Transportation Infrastructure
China Petroleum & Chemical Corp. Oil Gas & Consumable Fuels
Air China Ltd. Airlines
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 35
Portfolio Profile
Portfolio Characteristics
As of March 31, 2013
1This information is based on a representative account within the China Equity Strategy Composite. The representative account has been selected by meeting
the following criteria: 1) the account is in the China Equity Strategy Composite, 2) Wells Capital Management represents that the holdings, characteristics and
risk profile are representative of the strategy/style of the China Equity Strategy Composite. Any changes to the representative account must be approved by the
director of investment risk management.
Source: The Bank of New York Mellon Corporation and FactSet
China Equity Strategy1 MSCI China (Net) Index
Valuation
Price/Earnings (1 Yr. Forecasted) 10.1x 9.3x
EPS Growth (1 Yr. Forecasted) 14.4% 12.9%
Dividend Yield 2.7% 3.0%
Construction
Weighted Average Market Cap $67.7B $93.4B
Capitalization Profile
< $5 Billion 62.1 61.7
$5 - $10 Billion 12.1 10.5
$10 - $15 Billion 7.0 6.8
>$15 Billion 42.3 44.4
Countries 3 2
Holdings (ex-cash) 79 139
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 36
Addendum
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 37
WellsCap Emerging Markets
Equity Income
Stock selection incorporates both dividend yield
as well as growth opportunities that support
dividend growth
90 – 120 holdings
All cap strategy
Well diversified by sector, country, and region
Yield provides for more consistent absolute
performance; Higher tracking error but more
competitive information ratio
Traditional Emerging Market
Equity Competitors
Stock selection often focuses on market growth
and earnings growth
80-100 holdings on average
Mostly all cap strategies
Many strategies are diversified by sector,
country, and region
Traditional Emerging Market Equity Strategies vs. EME Income
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 38
Why Invest in an Emerging Markets Equity Income Strategy?
Allows investor to participate in up markets and also provides downside protection;
Offers attractive future dividends along with solid market appreciation
Offers some of the highest dividend yielding stocks making them particularly attractive relative
to other equities
Can incorporate good growth potential unlike dividend paying companies in developed markets
EME Income Team has a proven track record; Our outlook remains positive and the prospects
for economic recovery are greater
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 39
Investment Team
Anthony L.T. Cragg
Managing Director and Senior Portfolio Manager, Emerging Markets and Asia Pacific Equities
Anthony Cragg is the lead portfolio manager of the Emerging Markets and Asia Pacific Equities teams at Wells Capital Management.
Anthony has more than 30 years of experience in international equity investing, which includes both the developed and emerging markets.
He joined Wells Capital Management in 2005 with the asset acquisition of Strong Financial. Anthony joined Strong Capital in 1993 and was
instrumental in developing Strong Capital's international investment capabilities. Prior to this, he helped establish Dillon, Read International
Asset Management. Anthony began his investment career in 1980 at Gartmore, Ltd., as an international investment manager, where his
tenure included assignments in London, Hong Kong, and Tokyo. Anthony earned a bachelor's and master's degree in English literature from
Christ Church College at Oxford University.
Alison Shimada
Associate Portfolio Manager and Product Specialist, Emerging Markets Equity
Alison Shimada is an associate portfolio manager and product specialist of the Emerging Markets team. She served as a senior analyst
covering the EMEA (Eastern Europe, Middle East and Africa) region for three years at Wells Capital Management. She joined Wells Capital
Management in October 2003 after serving as an investment officer of the University of California Regents-Office of the Treasurer. She
began her responsibilities at Wells Capital Management as the head of equity research for the developed markets (EAFE) international
equity team and a senior investment analyst for Japan and Australia/New Zealand. Her investment career began in 1985 and she has served
as a portfolio manager specializing in Malaysian equities at Commerce Asset Fund Managers and as senior equity analyst covering Japanese
securities at Fidelity Investments Japan. Alison received her bachelor’s degree in political economies of industrial societies from the
University of California at Berkeley. She earned a master's degree in business administration from Harvard Business School.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 40
Investment Team (continued)
Elaine Tse Senior Research Analyst As part of the Emerging Markets Equity team, Elaine Tse is a senior analyst responsible for North Asia. Elaine began her investment career in 1990 and joined the team after working for Fidelity Investments Management, LTD in Hong Kong, where she was an investment analyst. Prior to Fidelity, Elaine was a consultant at The Boston Consulting Group, Inc. in Hong Kong. Elaine earned bachelor’s degrees in communications and economics from the University of Pennsylvania. In addition, she earned a master’s degree in business administration from Harvard Business School. Elaine is fluent in Mandarin and Cantonese and is proficient in Spanish. Svetlana Silverman Senior Research Analyst Svetlana Silverman is a senior research analyst for the Emerging Markets Equity team at Wells Capital Management. She is responsible for covering EMEA (Emerging Europe, Middle East and Africa) region and has been with the firm since 2006. Svetlana began her investment career in 1997 at Robertson Stephens, a boutique investment bank, followed by equity research experience at RCM, a company of Allianz Global Investors. Prior to joining WellsCap she also briefly worked as a financial analyst at Wells Fargo Bank. She earned a master’s degree in chemical engineering from D. Mendeleev University of Chemical Technology of Russia in Moscow, Russia and a master’s degree in business administration from the University of San Francisco. She is a native Russian speaker. Sergio Torres Senior Research Analyst Sergio Torres is a senior research analyst for the Emerging Markets Equity team at Wells Capital Management, where he covers Latin America. He joined WellsCap in 2012 from JP Morgan Chase where he served as a senior analyst covering oil and gas firms in Latin America. Earlier, Sergio served as a senior associate analyst specializing in oil and gas firms in Latin America and EMEA for Bear Stearns and as an associate analyst responsible for Latin American industrials and construction firms at Goldman Sachs. He has been in the investment industry since 1994. Sergio earned a bachelor’s degree in economics from Universidad Panamericana. Sergio has complete Level I of the CFA program and is fluent in Spanish. Connie Ou, CFA Analyst Connie Ou joined the Emerging Markets Equity team as an analyst in 2004. Prior to this, she worked with the Wells Capital Management strategic planning group. Connie holds a bachelor’s degree in international finance from Sun Yat-sen University in China and a master’s degree in business administration–finance from the University of San Francisco, graduating Beta Gamma Sigma. Connie is fluent in Mandarin and Cantonese and has earned the right to use the CFA designation.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 41
Investment Team (continued)
Yuan Yiu Tsai
Associate Analyst Yuan Yiu is an associate analyst on the Emerging Markets team at Wells Capital Management. He covers India and ASEAN and is based in
Singapore. Yuan Yiu joined WellsCap in 2012 from Nomura Securities where he served in a similar role since 2008. He began his investment career in 2007 as a management associate at Citigroup. Yuan Yiu earned a bachelor’s degree in biomedical engineering and electrical
engineering from Duke University. He earned a master’s degree in systems engineering from the University of Pennsylvania.
Steven C. Connolly
Senior Trader
Steve Connolly is a senior trader for international equity securities at Wells Capital Management. He joined WellsCap from Evergreen Investments, where he began his investment industry career in 1995. Earlier, he served as a compliance analyst for Scudder Investments and as
a fund accountant for State Street Bank. He earned a bachelor’s degree in business administration and economics from the University of New Hampshire, Durham. Steve has completed Level I of the CFA program and is a member of the Boston Security Traders Association.
Clayton Carlin
Trader Clay Carlin is a trader for international equity securities at Wells Capital Management. He joined WellsCap from Evergreen Investments, where
he began his investment industry career in 1999. Prior to his current role, he served as a global settlements specialist and as a dealer services representative for the firm. Clay earned a bachelor’s degree in history from the University of Scranton in Pennsylvania. He is a member of the
Boston Security Traders Association.
Jack Cloonan
Trader
Jack Cloonan is a trader on the International Equity team at Wells Capital Management. He joined WellsCap from Evergreen Investments, where he began in 1998 as an assistant vice president of Investment Operations. He began his investment industry career in 1995 as an officer
with State Street. He earned a bachelor’s degree in marketing and entrepreneurial studies from Babson College, Wellesley, MA.
Peter Fetter
Trader
Peter Fetter is a trader for international equity securities at Wells Capital Management. He joined WellsCap from Evergreen Investments, where he served in a similar role since 2007. Earlier, he served as a senior international trader for Columbia Wanger Asset Management and as an
international trader for Driehaus Capital Management. He began his investment industry career in 1998 as a trading assistant for MFS Investment Management. Peter earned a bachelor’s degree in finance from Villanova University.
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 42
This document is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments
named or described in this document. Interested parties are advised to contact the entity with which they deal, or the entity that provided
this document to them, if they desire further information. The information in this document has been obtained or derived from sources
believed by Wells Capital Management to be reliable, but Wells Capital Management does not represent that this information is accurate or
complete. Any opinions or estimates contained in this document represent the judgment of Wells Capital Management, at this time, and
are subject to change without notice. Wells Capital Management and its affiliates may from time to time provide advice with respect to,
acquire, hold, or sell a position in, the securities or instruments named or described in this document.
Wells Capital Management is the trade name of the investment management services provided by certain subsidiaries of Wells
Fargo & Company and marketed by Wells Fargo Securities International Limited and Wells Capital Management, Inc. Wells
Fargo Securities International Limited is authorised and regulated by the Financial Conduct Authority within the U.K.
Wells Capital Management provides investment advisory services to institutional clients. The rules contained under the Financial Services
and Markets Act 2000 concerning the protection of Retail Clients does not apply, nor will the Financial Services Compensation Scheme be
available.
For the purposes of Section 21, U.K. Financial Services and Markets Act 2000 (the “Act”), the content of this communication has been
approved by Wells Fargo Securities International Limited, a regulated person under the Act.
Disclaimer
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 43
Primary Index: MSCI Emerging Markets Net Index
1. Wells Capital Management (“WellsCap”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. WellsCap has been
independently verified for the periods from January 1, 1997 through December 31, 2012. 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 Total Return Composite has been examined for the periods
from January 1, 2011 through December 31, 2012. The verification and performance examination reports are available upon request.
2. WellsCap is a registered investment adviser and a wholly owned subsidiary of Wells Fargo Bank, N.A. Since the firm’s creation in 1996, the firm has acquired a number of investment teams and/or assets through mergers and
acquisitions. These include assets and/or investment teams from Norwest Investment Management Inc., Sutter Advisors, LLC, Montgomery Asset Management, Benson Associates, Strong Financial Corporation, Evergreen
Investments, First International Advisors, LLC, Metropolitan West Capital Management, LLC and EverKey Global Partners. In all cases, the investment teams involved in each acquisition and merger remain autonomous teams
within WellsCap.
3. The Emerging Markets Equity Total Return Composite (“Composite”), previously named the Emerging Markets Income and Growth Equity Composite, includes all discretionary accounts managed in this style. The strategy
invests in stocks with a sustainable high dividend yield backed by strong company financials and fundamentals. Accounts also may invest a portion of its holdings in stocks with a lower yield than that of the reference benchmark and
a higher growth profile. The manager selects stocks for an account in order to maximize the potential dividend yield of the overall portfolio while maintaining a controlled level of risk. Investment results are measured versus the
MSCI Emerging Markets (Net) Index. Prior to January 1, 2013, the Composite was measured versus the MSCI Emerging Markets (Gross) Index. The benchmark was changed in 2013 for all periods, to reflect a benchmark with
more relevant tax withholding status of securities. The MSCI Emerging Markets (Net) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The
Composite was created in February 2010. The Composite inception date is January 1, 2010.
4. Composite returns are net of transaction costs and non-reclaimable withholding taxes, if any, are expressed in US dollars, and reflect the reinvestment of dividends and other earnings. A model fee is utilized for the net composite
returns, which is the maximum annual advisory fee based upon the fee schedule in effect during each respective performance period. Any changes to the fee schedule are reflected in the calculation of the net composite returns
beginning with the period in which the fee schedule is revised. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. WellsCap’s fee schedules are available upon request and may also
be found in Part 2 of Form ADV. The published fee schedule for this strategy is 1.10% for the first $50mm, 0.90% for the next $50mm, 0.85% for the next $100mm and 0.70% over $200mm. Additional information regarding
WellsCap’s policies for valuing accounts, calculating performance and preparing compliant presentations are available upon request.
5. Internal dispersion is the equal weighted standard deviation of the annual gross returns of all accounts included in the composite for the entire year. For years where there are 5 or fewer accounts in the composite for the entire year,
dispersion is not presented as it is not a meaningful statistical calculation. The three-year annualized standard deviation measures the variability of the gross composite returns and the index returns over the preceding 36-month time
period. The notation “n/a” (not available) will appear for periods, if any, where 36 monthly returns are not available for the composite and/or the index.
6. Index returns are provided to represent the investment environment existing during the time periods shown and are not covered by the report of independent verifiers..The MSCI Emerging Markets (Net) Index consists of the
following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan,
Thailand, and Turkey. For comparison purposes, the index is fully invested, which includes the reinvestment of income. The returns for the index do not include any transaction costs, management fees or other costs..
7. Actual performance results may differ from composite returns, depending on the size of the account, investment guidelines and/or restrictions, inception date and other factors. Past performance is not indicative of future results. As
with any investment vehicle, there is always the potential for gains as well as the possibility of losses. Our registration as an Investment Adviser does not imply any level of skill or training. For a complete list of WellsCap composite
descriptions, please see https://www.wellscap.com/about/business_risk_compliance.html.
GIPS® Compliant Presentation
Emerging Markets Equity Total Return Composite Performance Summary
Period Gross Annual
Return (%)
Net Annual
Return (%)
Primary Index
Return (%)
Comp 3 Yr
Std. Dev.
Primary Index
3 Yr Std Dev
Internal
Dispersion
Number of
Accounts
Composite
Assets ($-mm)
Total Firm
Assets ($-mm)
2012 21.6 20.3 18.2 17.79 21.50 N.A. 3 170.1 332,154
2011 -7.0 -8.0 -18.4 N.A. N.A. N.A. 1 14.2 330,855
2010 28.2 26.8 18.9 N.A. N.A. N.A. 1 17.7 365,552
Emerging Markets Equity Income-Focused Strategies – First Quarter 2013 44
Primary Index: MSCI China (Net) Index
IP = Period from April 1, 2009 (Inception) through December 31, 2009.
1. Wells Capital Management (“WellsCap”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. WellsCap has been
independently verified for the periods from January 1, 1997 through December 31, 2012. The verification reports are available upon request. 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. Verification does not ensure the accuracy of
any specific composite presentation.
2. WellsCap is a registered investment adviser and a wholly owned subsidiary of Wells Fargo Bank, N.A. Since the firm’s creation in 1996, the firm has acquired a number of investment teams and/or assets through mergers and
acquisitions. These include assets and/or investment teams from Norwest Investment Management Inc., Sutter Advisors, LLC, Montgomery Asset Management, Benson Associates, Strong Financial Corporation, Evergreen
Investments, First International Advisors, LLC, Metropolitan West Capital Management, LLC and EverKey Global Partners. In all cases, the investment teams involved in each acquisition and merger remain autonomous teams within
WellsCap.
3. The China Equity Strategy Composite (“Composite”) includes all discretionary accounts over $5 million managed in this style. The strategy aims to capitalize on the rising global strength of both the domestic and export sectors of
China. By investing in Chinese stocks, the strategy is able to leverage the tremendous potential of the Chinese economy as it develops. As with a general emerging market portfolio, a stock selection strategy will consist of companies
with promising business models, well-run operations, solid management, strong financials and attractive valuations. Investment results are measured versus the MSCI China (Net) Index. Prior to January 1, 2013, the Composite was
measured versus the MSCI China (Gross) Index. The benchmark was changed in 2013 for all periods, to reflect a benchmark with more relevant tax withholding status of securities. The Composite was created in May 2009. The
Composite inception date is April 1, 2009.
4. Composite returns are net of transaction costs and non-reclaimable withholding taxes, if any, are expressed in US dollars, and reflect the reinvestment of dividends and other earnings. A model fee is utilized for the net composite
returns, which is the maximum annual advisory fee based upon the fee schedule in effect during each respective performance period. Any changes to the fee schedule are reflected in the calculation of the net composite returns
beginning with the period in which the fee schedule is revised. Actual fees may vary depending on, among other things, the applicable fee schedule and portfolio size. WellsCap’s fee schedules are available upon request and may also
be found in Part 2 of Form ADV. The published fee schedule for this strategy is 1.10% for the first $50mm, 0.90% for the next $50mm, 0.85% for the next $100mm and 0.70% over $200mm. Additional information regarding
WellsCap’s policies for valuing accounts, calculating performance and preparing compliant presentations are available upon request.
5. Internal dispersion is the equal weighted standard deviation of the annual gross returns of all accounts included in the composite for the entire year. For years where there are 5 or fewer accounts in the composite for the entire year,
dispersion is not presented as it is not a meaningful statistical calculation. The three-year annualized standard deviation measures the variability of the gross composite returns and the index returns over the preceding 36-month time
period. The notation “n/a” (not available) will appear for periods, if any, where 36 monthly returns are not available for the composite and/or the index.
6. Index returns are provided to represent the investment environment existing during the time periods shown and are not covered by the report of independent verifiers. The MSCI China (Net) Index is a free float-adjusted market
capitalization–weighted index of Chinese equities that includes China-affiliated corporations and H shares listed on the Hong Kong Exchange, and B shares listed on the Shanghai and Shenzhen exchanges. For comparison purposes,
both indices are fully invested, which includes the reinvestment of income. The returns for the indices do not include any transaction costs, management fees or other costs.
7. Actual performance results may differ from composite returns, depending on the size of the account, investment guidelines and/or restrictions, inception date and other factors. Past performance is not indicative of future results. As
with any investment vehicle, there is always the potential for gains as well as the possibility of losses. Our registration as an Investment Adviser does not imply any level of skill or training. For a complete list of WellsCap composite
descriptions, please see https://www.wellscap.com/about/business_risk_compliance.html.
GIPS® Compliant Presentation
China Equity Strategy Composite Performance Summary
Period Gross Annual
Return (%)
Net Annual
Return (%)
Primary Index
Return (%)
Comp 3 Yr
Std. Dev.
Primary Index
3 Yr Std Dev
Internal
Dispersion
Number of
Accounts
Composite
Assets ($-mm)
Total Firm
Assets ($-mm)
2012 25.0 23.6 22.7 20.60 21.92 N.A. 1 21.3 332,154
2011 -19.5 -20.4 -18.4 N.A. N.A. N.A. 1 17.2 330,855
2010 16.0 14.7 4.6 N.A. N.A. N.A. 1 21.7 365,552
2009 (IP) 65.5 64.2 60.2 N.A. N.A. N.A. 1 18.1 363,451
Disclosure
INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE RETAIL PUBLIC
Wells Fargo Asset Management is a trade name utilized by the asset management businesses of Wells Fargo & Company.
Certain investments are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC. Wells Fargo Funds
Distributor, LLC is a subsidiary of Wells Fargo & Company.
This document is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or
instruments named or described in this document. Interested parties are advised to contact the entity with which they deal, or the
entity that provided this document to them, if they desire further information. The information in this document has been obtained
or derived from sources believed by Wells Capital Management to be reliable, but Wells Capital Management does not represent
that this information is accurate or complete. Any opinions or estimates contained in this document represent the judgment of
Wells Capital Management, at this time, and are subject to change without notice. Wells Capital Management and its affiliates
may from time to time provide advice with respect to, acquire, hold, or sell a position in, the securities or instruments named or
described in this document.
Wells Capital Management is the trade name of the investment management services provided by certain subsidiaries of
Wells Fargo & Company and marketed by Wells Fargo Securities International Limited and Wells Capital Management,
Inc. Wells Fargo Securities International Limited is authorised and regulated by the Financial Conduct Authority within
the U.K.
Wells Capital Management provides investment advisory services to institutional clients. The rules contained under the Financial
Services and Markets Act 2000 concerning the protection of Retail Clients does not apply, nor will the Financial Services
Compensation Scheme be available.
For the purposes of Section 21, U.K. Financial Services and Markets Act 2000 (the “Act”), the content of this communication has
been approved by Wells Fargo Securities International Limited, a regulated person under the Act.
NOT FDIC INSURED – NO BANK GUARANTEE – MAY LOSE
VALUE