1 76881315 citywire-zurich_forum_0311

3 March 2011

Presenter: David Holstein

Emerging marketsA presentation for the Citywire Zurich Forum

1EU.05.1-76881315_0311

AgendaEmerging markets: a presentation for the Next Generation Forum

Emerging Markets Total Opportunities (ETOP)– A new way to access emerging markets 13–24

Appendix 25–35

Why one asset class? 2–12

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1 Computed using capitalization-weighted monthly USD returns. Attribution of monthly USD returns to various factors. Source: Empirical Research Partners Analysis. Data smoothed on a trailing two-year basis.

Why one asset class?

0

10

20

30

40

50

60

70

92 94 96 98 00 02 04 06 08

%

Emerging markets

Decomposition of nominal returns1, 1992 through late-September 2009

Country

Sector

Industry

Region

NYO:10 PROD:EQ:EM:NEXT GENERATION FORUM 0111:EM NEXT GEN ONE ASSET CLASS 0111.PPT

Country remains the most important decision: Economic policies, Growth, Demographics, Politics, Currency, Governance

3EU.05.1-76881315_0311

Broadest opportunity set

Private market EM equities(not currently held in CIETOP)

Frontier market equities

Small cap EM equities

Large cap EM equities Convertibles

Corporate dollar bonds

Local sovereign bonds

Index-linked bonds

Developed market equities with significant EM exposure

Dollar sovereign bonds

EU.NB_CL.ETOP. 223658_968

60+Countries

60+Countries

Currencies

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28.3%21.9% 20.5%

17.1% 18.4% 16.9% 16.1% 15.1% 13.5%20.4%22.6%23.9%25.1%27.2%

23.9%30.7%

35.6%

47.0%

0%

10%

20%

30%

40%

50%

Brazil BRICs M SCI EM IM I S&P500 80% EM Eq / 20% EMLocal FI

70% EM Eq / 20% EMFI Loc / 10% EM FI $

65% EM Eq 20% EMFI Loc / 10% EM FI $ /

5% EM FI $Corp

60% EM Eq / 20% EMFI Loc / 10% EM FI $ /5% EM FI $Corp / 5%

EM FI Linker

50% EM Eq / 20% EMFI Loc / 15% EM FI $ /

10% EM FI $Corp /5% EM FI Linker

2010

2007-2010

40

60

80

100

120

140

160

Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10

Index

Power of a broad universe


As at 31 December 2010. Sources: RIMES, Barclays, JPMorgan Chase.

Cumulative returns (US$) 2007–2010

MSCI Emerging Markets IMI

S&P 500

Realised volatility: Standard deviation of weekly returns (US$)

Equity onlyEmerging markets:Expanding the universe to debt

50% EM Equity / 20% EM FI Local / 15% EM FI USD / 10% EM FI $ Corp / 5% EM FI Linker

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Synergy in analysis

NYO:10 PROD:EQ:EM:ELKIND CONF 1209:ELKIND CONF 1209 COLOR.PPT

Sovereign instruments – concentrate on “risks”

– Macroeconomic policies

– Inflation

– Currency

– Politics

– Legal system

Balance sheet of country/company

Driver: obligation being met – get paid back

Key contacts:

– Central Bankers

– Economists/Strategists

– Politicians

Long-term country growth

– Demographics

– Incomes

Industry/sector growth

– Future demand

– Competition

– Key suppliers/customers

Drivers of future returns:

– Revenue growth

– Earnings growth

– Dividend growth

– Valuation – re-rating possibilities

Key contacts:

– Company management

– Sell side

Fixed income: Financial strength

Focus on the ability to pay back obligation

Equities: Growth

Focus on growth as a driver of future returns

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Advantages — flexibility

Dominant telecom operator in Mexico

Increasing range of services and penetration across Latin America

High quality company with attractive assets

Consistent grower

América Móvil: Bond vs. Equity

América Móvil basics

NYO:10 PROD:OBJECTIVES:ETOP:NB:1210:AMERICA MOVIL 1210.PPT

América Móvil Bond vs. Stock returnsGrowth of 100

Time period shown is 30 October 2007 to 31 December 2010.América Móvil bond reflects América Móvil SAB de CV 5.625% 11/15/2017. Government of the United States of America 4.75% 8/15/2017. Mexico sovereign bond reflects Government of Mexico 11.375% 9/15/2016.These charts are presented for illustrative purposes only. They are not meant to reflect the specific experience of investors in the Emerging Markets Total Opportunities Fund. Shares of América Móvil may or may not have been held at any point during the referenced time period.Sources: MSCI data from RIMES, FactSet.

40

60

80

100

120

140

Oct-07

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Bond+31%

Stock-5%

Bond: -19%Stock: -50%

Bond: +45%Stock: +43%

Bond: +11%Stock: +33%

Cumulativereturns

América Móvil bond

Mexico sovereign bond

Bond yield spreads vs. US TreasuriesSpread (basis points)

0

100

200

300

400

500

600

Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Dec-10

7EU.05.1-76881315_0311

Country dynamics: Appropriate equity risk premium?

As at 31 December 2010. Source: DataStream.

21.4%Equities

17.5%Cash

2000–2010 annualised returns

Brazil: Cash vs. Equities returns


-60

-40

-20

0

20

40

60

80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Cash

Equities

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High-yield sovereigns: Equity-light?

NYO:10 PROD:OBJECTIVES:ETOP:NB:1210:HIGH YIELD SOVEREIGNS 1210.PPT

Source: MSCI, JPMorgan, RIMES. Volatility reflects weekly data annualised. * Short-Term Debt reflects 1−3 years maturity.

-60

-40

-20

0

20

40

60

80

0 5 10 15 20 25 30 35 40 45

Realized volatility (%)

% R

etur

n (U

S$)

2008

2009

EM Utilities

Indonesia Debt

Turkey Debt

EM Telecommunication ServicesEgypt Debt

Egypt Debt Indonesia Debt Turkey Debt

EM Utilities

EM Telecommunication Services

‘Aggressive’ Sovereign Short-Term* Debt vs. ‘Defensive’ Equities, 2008 and 2009

2009

2008

9EU.05.1-76881315_0311

EM Corporate Bonds vs. US Treasury Yield

America Movil

BBVAMTS Reliance

Televisa

Standard Bank

Gazprom Digicel

Orascom Telecom

Evraz

Banco Do Brasil

Petrobras

Cemex FinanceMarfrig

Hyundai Motor

Bank of China

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Maturity

Yield

2yr 5yr 7yr 10yr1yr 30yr

Vale

Telecomm/Media

Energy & Materials

BanksOther

US Treasuries

Corporate bonds: Company-specific risk/return


2009–2010 Returns

Brazil

Russia

India

Egypt

Country

Energy

Materials

Financials

Telecom

Sector

2013

2015

2022

2014

Bond maturity

47

157

116

130

Bond (%)

63

317

171

-31

Equity (%)

Integrated oil and gas companyPetróleo Brasileiro – Petrobras

Steel producer and distributor

Indian banking and financial services

Wireless telecom to Middle East/Asia

DescriptionIssuer

Evraz

ICICI Bank

Orascom Telecom

As at 31 December 2010. Source: Factset

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Sovereign Debt: Local or Dollar?

1 Source: Bloomberg as at 31 December 2010.2 Source: JPMorgan EMBI Global as at 4 January 2011.

NYO:10 PROD:EQ:EM:NEXT GENERATION FORUM 0111:EM YIELD CURVES 1210.PPT

Brazil

Indonesia

HungaryMexico

U.S.South Korea

20Y 30Y10Y7Y5Y4Y3Y2Y1Y

343Hungary

489Argentina

168Brazil

208Russia

260Sri Lanka

1,099

155

149

104

bpsDollar bonds

Venezuela

Indonesia

Mexico

Malaysia

Sovereign spreads vs. US Treasuries 2

Local Yield Curves 1

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

11EU.05.1-76881315_0311

60

70

80

90

100

110

120

130

140

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

40

60

80

100

120

140

160

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

Dec-09

Jun-10

Dec-10

Currencies: Return potential

Commodity currencies: Brazilian Realvs. South African RandIndex vs. USD

Different economic paths: Hungarian Forint vs. Indonesia RupiahIndex vs. USD

NYO:10 PROD:EQ:EM:NEXT GENERATION FORUM 0111:EM NEXT GEN ONE ASSET CLASS 0111 D010511.PPT

As at 31 December 2010.Source: Factset

Real

Rand

+10%-3.5%

+36%-5.6%

+0.9%

Rupiah

Forint-1.1%

+27% -28%

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Argentina: Kirchner’s death and recognizing potential

Political change should be a positive catalyst

– Economy doing well

– Global expansion and high commodity prices help

– Re-establishing itself in financial/global community – repay defaulted debts

– Good financial position

Limited investments – Frontier Equity market and Dollar Bonds

Benefiting from “narrow” insights

High oil prices

– Oil prices to stay high with global growth and emerging markets demand

– Companies – more or less leverage to basic price of oil

– Sasol, Gazprom, Petrobras, CNOOC

– Oil dependent countries’ finances tied to oil prices

– Venezuela, Russia, Nigeria, Iraq

Venezuela $ bond has competitive returns

*100 at 20 December 2007Sources: FactSet, Capital Guardian, DataStream, JPMorgan and MSCI

Oil price vs. selected securities (as at 31 Dec 10)


Stocks >$1Billion Market Cap

Sovereign Fixed Income ($)

Returns (%) 27 Oct 10–31 Dec 10SectorCompany

Financials

Financials

Energy

Energy

17.7Grupo Fin Galicia B ADR

-2.8

33.7

20.5

Banco Macro B ADR

YPF

Tenaris S.A.

25 Year

5 Year

18.8

4.1

Returns (%) 27 Oct 10–31 Dec 10

GDP Linked

Nominal20

40

60

80

100

120

140

160

180

Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-1030

50

70

90

110

130

150Venezuela SASOLPetrobras Oil

US$/bbIndexCumulative return growth base 100 Crude oil price

Emerging Markets Total Opportunities (ETOP)A new way to access emerging markets

14EU.05.1-76881315_0311

Take advantage of the dynamism in emerging markets by

investing in all types of securities with the objectives of

seeking long-term capital growth, preservation of capital

and lower volatility of returns.

Equity-like returns with significantly lower volatility

NYO:10 PROD:OBJECTIVES:ETOP:NB:0910:ETOP_NB_0910.PPT

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Setting expectations

Capital International is an active manager that creates portfolios by selecting securities using fundamental research and does not manage portfolios to achieve specific returns or volatility targets. We cannot provide any guarantee with respect to the performance or volatility targets herein.


Clear expectations Broad guidelines

10% target annual returns and 12% target volatility over the business cycle

Country allocations will not exceed 25%

US cash and hedging of currencies and countries permitted

Volatility can be increased opportunistically

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EM Equities

EM Bonds (US$)EM Bonds (Local Ccy)

Long-Run Equity Average

0%

5%

10%

15%

20%

25%

30%

35%

40%

Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10

Rolling three-year volatility as of 31 December 2010

Emerging markets volatility

Increasing volatility

9.5%26.9%Moderate: June 30, 2010−December 31, 201014.0%*4.0%Moderate: December 1, 1993–September 30, 1997

9.8%3.5%Entire time period: July 31, 2007−December 31, 2010

10.1%36.2%Low: September 30, 2005–July 31, 2007Moderate/low volatility

15.9%24.1%July 31, 2001–September 30, 2005–30.7%December 31, 1991–November 30, 1993

Decreasing volatility8.1%- 4.0%August 1, 2007–June 30, 20105.0%-10.4%October 1, 1997–July 31, 2001

EM bondsEM equitiesAnnualised returns

* 31 December 1993–30 September 1997Emerging markets represent: emerging markets equity (MSCI Emerging Markets Index), emerging markets bonds US$ (JPMorgan Emerging Markets Bond Index – Global), emerging markets bonds local currency (JPMorgan GBI EM Global), emerging markets corporate bonds (JPMorgan CEMBI Corporate Emerging Market Bond Index) Source: MSCI, JPMorgan. All indices are unmanaged.

NYO:10 PROD:OBJECTIVES:ETOP:NB:1210:EM_VOLATILITY_1210.PPT

Decreasing volatility

leading up to peso crisis

Moderate volatility despite peso crisis

Increasing volatility due to Asian and Russian crises

Volatility declines tohistorically low levels

HighVolatility post

Asian and Russian crises

Globalfinancial crisis

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Emerging Markets Total Opportunities group portfolio

NYO:10 PROD:OBJECTIVES:ETOP:CR:1210:GROUP_PORTFOLIO_ASSET_ALLOC_1210.PPT

Asset mix

As at 31 December 2010Group portfolio reflects all active accounts invested in Emerging Markets Total Opportunities.Cash includes TIPs exposure from May 2008.Totals may not reconcile due to rounding.

0

10

20

30

40

50

60

Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10

%

Equity

Fixed income

Cash

Dec-10

Model portfolio Portfolio

18EU.05.1-76881315_0311

20

30

40

50

60

70

Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10

%

Currency positioning

NYO:10 PROD:EQ:EM:NEXT GENERATION FORUM 0111:5176_CURR_POS_1210.PPT

Emerging Markets Total Opportunities1

1 Data provided is from the Capital Guardian ETOP Master Fund, which is provided for information purposes only and as an example. Data from other ETOP investment vehicles may slightly differ.

As at 31 December 2010*Includes hedgingTotals may not reconcile due to roundingThis information supplements or enhances required or recommendeddisclosure and presentation provisions of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.

-1.10.11.2Canadian Dollar

-1.50.11.6South African Rand

-2.04.46.4Mexican Peso

-1.05.76.7Indonesian Rupiah

-2.6-0.71.9Euro

-5.13.68.7Brazilian Real

Exposure after(%)

Exposurechange

(%)

Exposure before

(%)Currency hedges

0.13.9China

3.610.3Brazil

0.12.9South Africa

1.35.5Argentina

39.76.5United States

4.48.9Mexico

% Localcurrency*% PortfolioCountry

US$ assets

US$ assets after hedge39.7%

24.6%

Exposurechange

(%)

Exposure after(%)

Exposure before

(%)Currency hedges

15.139.724.6US Dollar

-0.20.50.7Australian Dollar

-0.40.10.6Israeli Shekel

-0.41.72.1Thai Baht

-0.81.11.9British Pound Sterling

US dollar exposure%

19EU.05.1-76881315_0311

0

10

20

30

40

50

60

70

80

90

100

Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10

%

Sovereign local

Sovereign dollar

Inflation-linked

Corporate dollar

Emerging Markets Total Opportunities group portfolio

NYO:10 PROD:OBJECTIVES:ETOP:CR:1210:GROUP_PORTFOLIO_FIXED_INCOME_PORTION_1210.PPT

As at 31 December 2010Excludes TIPS, Cash and Equities.Group portfolio reflects all active accounts invested in Emerging Markets Total Opportunities.

Fixed income portion

Type of fixed-income exposure

%

20EU.05.1-76881315_0311

7.3

3.94.7

6.8

3.1

8.8

4.44.8

10.0

5.5

2.5

7.6

1.82.6

3.5

1.3

2.9

1.2 1.0 0.8

15.5

11.4

8.7

7.46.8 6.7 6.5 6.3

5.8

4.9

3.8 3.5 3.4 3.2 3.1

2.2 2.2 1.9 1.91.5 1.4

7.3

0

2

4

6

8

10

12

14

16

South

Kor

ea

China

Taiw

anIn

done

sia

India

Mex

ico

Turke

y

Russia

Braz

ilAr

genti

naTh

ailan

dUnit

ed St

ates

United

King

dom

Malays

iaPh

ilippin

esCa

nada

South

Afri

ca

Polan

dCz

ech R

epub

licHon

g Kon

gAll

othe

r

%

Country exposure and risk contribution


1 Data provided is from the Capital Guardian ETOP Master Fund, which is provided for information purposes only and as an example. Data from other ETOP investment vehicles may slightly differ.As at 31 December 2010. Sources: Capital International, MSCI BarraThis information supplements or enhances required or recommended disclosure and presentation provisions of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.


% of portfolio

% of risk contribution

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Top 20 risk contributors

NYO:10 PROD:EQ:EM:NEXT GENERATION FORUM 0111:5176_T20RISK_1210.PPT

2.7%1.3%Telecommunication ServicesIndiaBharti AirtelEQ

1.4%

0.7%

1.0%

0.6%

1.2%

0.9%

1.2%

1.7%

0.9%

1.1%

1.0%

1.6%

1.0%

1.7%

3.1%

4.2%

4.9%

2.3%

6.3%

% of Portfolio

2.3%FinancialsRussiaSberbankEQ

1.6%GovernmentTurkeyTurkey government (TRY)FI

1.8%Consumer StaplesIndiaUnited SpiritsEQ

1.8%Consumer DiscretionaryIndonesiaAstra InternationalEQ

1.9%Telecommunication ServicesPolandTelekomunikacja PolskaEQ

2.0%EnergyRussiaGazpromEQ

2.0%Information TechnologyTaiwanDelta ElectronicsEQ

2.1%GovernmentMexicoMexico government inflation-linkedFI

2.2%MaterialsU.S.Freeport MacMoRan Copper & GoldEQ

2.2%MaterialsSouth KoreaLG ChemEQ

2.2%EnergyChinaChina Shenhua EnergyEQ

2.3%Information TechnologyTaiwanTaiwan Semiconductor ManufacturingEQ

4.7%Information TechnologySouth KoreaSamsung ElectronicsEQ

3.0%GovernmentIndonesiaIndonesia government (IDR)FI

2.8%GovernmentArgentinaArgentina government (USD)FI

2.6%GovernmentMexicoMexico government (MXN)FI

2.5%GovernmentTurkeyTurkey government inflation-linkedFI

1.7%

4.9%

% of Total Risk

Materials

Government

Sector

EQ

FI

UKAnglo American

BrazilBrazil government inflation-linked

CountryIssuer

1 Data provided is from the Capital Guardian ETOP Master Fund, which is provided for information purposes only and as an example. Data from other ETOP investment vehicles may slightly differ.As at 31 December 2010. Sources: Capital Guardian, MSCI BarraConvertible securities, if listed above as a top 20 risk contributor, are classified as equity/fixed income.This information supplements or enhances required or recommended disclosure and presentation provisions of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.


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Experience and insightPeople: Emerging Markets Total Opportunities team

As at 31 December 2009


Years of experience

Three portfolio managers with an average of 23 years’ investment experience

1986 20101990 1994 1998 20062002

Introduction ofMSCI EM Index

Mexicanpeso crisis

World’s first emergingmarkets fund offered

Growth ofthe BRICs

Emergence of Asian “Tiger”economies

Oil pricessurge

Asian currency crisis

Russiandebt

default

Luis Oliveira 21

Laurentius Harrer 21

Shaw Wagener 28

Portfolio managerAnalystTrader

23EU.05.1-76881315_0311

-40%

-20%

0%

20%

40%

60%

80%

100%

Jul-0

6

Nov

-06

Mar

-07

Jul-0

7

Nov

-07

Mar

-08

Jul-0

8

Nov

-08

Mar

-09

Jul-0

9

Nov

-09

Mar

-10

Jul-1

0

Nov

-10

ETOP MSCI EM / IMIBlended index Bond index

Cumulative returns: ETOP 1 +76.7%

Emerging Markets Total Opportunities – cumulative returns In US$ (31 July 2006 – 31 December 2010) ¹

16.912.4Blended Index3

Since inception(31 July 06 – 31 Dec 10)

25.913.0MSCI EM IMI4

9.510.7Bond Index2

11.513.8ETOP1

AnnualisedVolatility5 (%)

Annualised Returns (%)

1 Results are based on a model portfolio which commenced on 31 Jul 06 and includes emerging markets equities, emerging markets bonds and cash equivalents. For results prior to 30 Sep 07, income for equities and bonds is not accrued and is assumed to be immediately received and reinvested in the income-generating asset and trading expenses and other operational costs are excluded. Results after 30 Sep 07 reflect the Capital Guardian Emerging Markets Total Opportunities Fund for Tax-Exempt Trusts gross of management fees. These results are shown net of: (i) custodial, audit and other expenses and (ii) withholding taxes on dividends, interest, and capital gains. Withholding tax rates apply primarily to US institutional investors. Over the lifetime of the fund (30 Sep 07 – 30 Nov 09), deducting the highest management fee charged for portfolios with a minimum investment of US$ 10 million would result in net investment results of 3.77% per annum. Actual investment results net of management fees may differ depending on the size of the portfolio. The client’s return will be reduced by these fees and other expenses that the client may incur. CGTC’s management fees are described in Part II of its form ADV.The hypothetical results are for illustrative purposes only and are not intended to provide any assurance of actual results. Source: Capital/CGII

2 50% JPMorgan GBI EM Global Index and 50% JPMorgan EMBI Global Index. Source: JPMorgan3 50% MSCI EM IMI with net dividends reinvested (with 50% MSCI EM Index prior to 30 Nov 07), 25% JPMorgan GBI EM Global Index and 25% JPMorgan EMBI Global Index4 MSCI Emerging Markets Investable Market Index with net dividends reinvested (with MSCI EM Index prior to 30 Nov 07). Source: MSCI5 Based on daily observations, using a population standard deviation calculationAll indices are unmanaged. All results reflect the reinvestment of dividends and other earnings. This information supplements or enhances required or recommended disclosure and presentation provisions of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.

EU.SM.RES. 083624_943

Start of live ETOP portfolio ¹Model Portfolio

Dec

-10

24EU.05.1-76881315_0311

Emerging Markets Total Opportunities compositeInvestment results as at 31 January 2011 in US$ terms

Lifetime: 30 Sep 2007 to 31 Jan 20111 Before management fees and expenses. Source: Capital/CGII2 MSCI Emerging Markets Investable Market Index with net dividends reinvested (with MSCI EM Index prior to 30 Nov 07). Source: MSCI3 50% MSCI EM IMI with net dividends reinvested (with 50% MSCI EM Index prior to 30 Nov 07), 25% JPMorgan GBI EM Global Index and 25% JPMorgan EMBI Global Index4 Based on daily observations, using a population standard deviation calculation. There are no volatility figures for 1 month (to 31 Jan 2011) as the period is too short for statistical significance

2007 3 months 2.4 3.7 3.52008 -22.1 -53.8 -34.42009 42.1 82.4 51.62010 11.9 19.9 17.12011 1 month -1.8 -2.8 -1.9

Annualised lifetime return (3 years 4 months) 6.9 0.6 5.1

Total value of Capital Guardian/International Emerging Markets Total Opportunities composite as at 31 January 2011 is US$ 1,288 million (3 accounts)

2007 3 months 11.0 22.6 13.52008 15.5 38.9 25.72009 10.0 25.5 16.42010 8.1 17.5 11.8

Annualised lifetime standard deviation (3 years 4 months) 11.5 28.2 19.8

EU.SM.RES. 064621_309

(%) Return in US$ Composite ¹ MSCI EM IMI ² EM Equity Debt ³

(%) Standard deviation 4 Composite ¹ MSCI EM IMI ² EM Equity Debt ³

Appendix

26EU.05.1-76881315_0311

The kind of organisation we are

Private ownership fosters stability and a long-term business culture

An introduction to Capital InternationalWhat makes us different

EU.NB_CL.ITC. 402471_199

All of this is aimed at providing our clients with consistent, superior long-term investment results

The way we construct portfolios

The Multiple Portfolio Manager System helps create naturally diversified portfolios of high-conviction investments

The way we do our research

Globally integrated, fundamental research forms the basis for identifying multi-year investment opportunities

27EU.05.1-76881315_0311

Strength through stabilityOverview of our organisation

Private

Our organisation has always been privately owned by senior employees1

Long-term

This enables us to manage our business with a long-term focus

Focused

Investment management is our only business

EU.NB_CL.ITC. 419451_019

Capital Group International, Inc.

US$ 140 billion

Separate accounts andpooled funds for institutionsand individuals 2 worldwide

Capital Research and Management Company

US$ 1,091 billion

US and Luxembourg-based mutual funds for individuals

and institutions

Manage investment services that Capital International offers

Data as at 31 December 2010 – provisional1 Includes recent retirees2 Capital International does not sell directly to individuals but through intermediariesCapital Research and Management Company (CRMC) and the investment management affiliates within Capital Group International, Inc. (CGII), which include Capital International Limited (CIL) and Capital International Sàrl (CISA), manage equity assets independently from one another

The Capital Group Companies, Inc.

28EU.05.1-76881315_0311

Capital International Emerging Markets Fund

Experience in emerging markets investingThere from the beginning

Pioneer investor in emerging markets

We believe that having a global approach to emerging markets investing makes us better investors

Established resource capabilities across emerging market asset classes

Experienced and stable investment team

MSCI EM Index

First dedicated EM Debt mandate

CIF Global High IncomeOpportunities

Emerging Markets Growth Fund 1

1986 20101990 1994 1999

Capital International Emerging Markets Debt

(CIEMD) launched

2007

Capital InternationalEmerging Markets

Total Opportunities 2

2007/81987

EU.SM.CAP_INF. 311527_534

CIPEF I-V Emerging Markets

Private Equity

1992

Begin investingin EM Debt

Capital InternationalEmerging Markets

Local Currency Debt (CIEMLCD) launched

1 Emerging Markets Growth Fund is a US domiciled open-end interval fund generally offered to institutional investors and other “qualified purchasers” in the US by our affiliate Capital International, Inc.2 Known as CIP Emerging Markets Total Opportunities prior to 10 August 2010

Capital InternationalEmerging MarketsUS Dollar Debt

(CIEMUSDD) launched

29EU.05.1-76881315_0311

Fundamental research integrated across asset classes

Equity

Private Equity

Macro / Quant

DebtInvestment opportunity

Sharing different perspectives across geographies and assets classes is our competitive advantage

Over 100 equity and fixed income analysts collaborate to share insights from different perspectives

Avoiding research silos

Our research approach

EU.SM.INV_PROC. 402446_575

30EU.05.1-76881315_0311

Emerging Markets Total Opportunities

Enhance appeal of emerging markets

– Introduction to the asset class — first dedicated investment

– Helps make large allocation possible

– Reduced volatility is an attractive attribute

Emerging markets as the asset class

– Gain exposure to emerging market debt

– Delegate allocation decision between emerging markets debt and equity

Great addition to an existing emerging markets equity program — different return/risk pattern

Efficient use of risk budget

– Exposure to high-return assets

– Attractive information ratio

Alternate/opportunistic allocation strategy

– Hybrid mandate has unique characteristics

– Objective is absolute return over the long term

A good fit

NYO:10 PROD:OBJECTIVES:ETOP:NB:0910:ETOP_NB_0910.PPT

31EU.05.1-76881315_0311

0

5

10

15

20

25

30

35

40

45

Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10

12% target

%

As of 31 December 2010Group portfolio reflects all active accounts invested in Emerging Markets Total Opportunities.MSCI Emerging Markets IMI reflects MSCI Emerging Markets Index with net dividends reinvested through 30 November 2007 and MSCI Emerging Markets Investable Market Index with net dividends reinvested thereafter. Fixed income index represents 50% JPMorgan GBI EM Global Index and 50% JPMorgan EMBI Global Index. Standard deviation based on 252 daily observations. Volatility measures on the table are standard deviations (daily observations). All indices are unmanaged.Sources: Capital/CGII, Barra, MSCI and JPMorgan


Volatility: annualised standard deviation

MSCI EM IMI realised

ETOP model estimate

Fixed income index realised

ETOP realised

Volatility target is a significant input into the portfolio construction process 12% target volatility will vary depending on actual market volatility

Model portfolio Group portfolio

Dec 10

32EU.05.1-76881315_0311

Emerging Markets Total Opportunities (ETOP) teamAdvantages of the multiple portfolio manager system

Collective independence

Managers own only high-conviction ideas

Diversity of ideas and disciplines

Average years of experience: 24

Laurentius Harrer

As a high-conviction investor, Laurentius is decisive. His portfolio reflects a high level of conviction whether it be defensive or aggressive. Laurentius concentrates on identifying opportunities that he believes will meet or exceed the long-term 10% return hurdle. He taps all aspects of reviews opportunities across the fixed income universe often identifyingaggressive fixed income securities in his efforts to generate high returns. Additionally, his equity holdings generally have agrowth aspect that should drive results over time. Laurentius also focuses on is successful identifying where prospective returns will may come from and what portion of volatility he will accept and what part he will shed.

Luis Oliveira

Luis is sensitive to the macroeconomic environment. He begins with several key themes or convictions which help anchor the portfolio. Luis also has a view regarding volatility – its level and how/where he embraces it in the portfolio. Luis works to understand the risks that are inherent in positions with an expectation of the reward. Securities often balance or complement one another. Portfolio construction is important as Luis tries to contain downside risk. He works assets hard in an effort to maximize their impact. Luis is attracted to value opportunities as well as proven track records and strategies.

Shaw Wagener

Shaw looks to construct portfolios with relatively consistent volatility. He likes to establish a core group of long-term convictions of premier companies or countries. He also tries to identify opportunities where the market is not valuing upside potential or embedded down-side protection appropriately. Shaw tries to maximize the benefits of diversification via effective use of the broad universe. Shaw is partial to high dividends and above average bond yields. He looks for an effective combination of improving prospects and attractive valuations to define the portfolio.

LuisOliveira

LaurentiusHarrer

ShawWagener

A range of investment styles

EU.SM.TEAMS.1210. 387660_829

33EU.05.1-76881315_0311

Emerging Markets Total Opportunities — ETOPClient categories and assets under management as at 31 December 2010

Non-profit, Endowments and Foundations reflects clients invested in the Capital Guardian Emerging Markets Total Opportunities Fund for Tax-Exempt Trusts.Pension Plans reflects clients invested in the Capital Guardian Emerging Markets Total Opportunities Master Fund.High Net Worth and Family Offices reflects clients invested in the U.S. Common Trust Fund − for non-QIBs.Luxembourg Fund reflects clients invested in the Luxembourg SICAV fund, with UCITS III status, managed by our affiliate – Capital International, Sàrl – and has the same team of portfolio managers as the U.S. funds. Provided for informational purposes only.Totals may not reconcile due to rounding.This information supplements or enhances required or recommended disclosure and presentation requirements of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.

NYO:10 PROD:OBJECTIVES:ETOP:NB:1210:ETOP_VEHICLES_ASSETS_PIE_1210.PPT

$556mm40%

$420mm30%

$284mm20%

$145mm10%

Pension Plans6 clients

High Net Worth and Family Offices82 clients

Luxembourg Fund43 clients

Non-profit, Endowments and Foundations44 clients

Total: $1.4 Bn175 clients

34EU.05.1-76881315_0311

A range of fixed income investment styles − Average experience: 24 years

Constructs portfolios on a bottom-up basis, focuses on credit more than sovereign securities

Buys bonds with a multi-year investment horizon

Seeks credit quality that is stable or improving and strong company managements

Looks for sustainable trends first and valuations second

Relies on field research and company visits to formulate his macroeconomic views

Looks for inefficiencies in local yield curves

Selects his investments from a range of securities, including local currency debt

Quickly moves to build concentrated positions

Builds diversified bond portfolios in a gradual and deliberate manner

Focuses on macroeconomic fundamentals; determines most attractive markets and then chooses securities from within those areas

Considers liquidity and structure across local currency debt markets

Identifies unique investment ideas from his original research and structure across local currency debt markets

Research portfolio coordinator

Three analysts dedicated to emerging markets debt invest in their highest conviction ideas

These three analysts have an average of 13 years experience at Capital

These three analysts have an average of 17 years investment experience

David Barclay Laurentius Harrer Robert Neithart Kirstie Spence

The emerging markets portfolio management team

A range of equity investment styles − Average experience: 28 years

Christopher Choe

Chris looks for high growth potential and discrepancies between a company’s share price and its inherent worth. He sells stocks when he believes they have reached fair value. He emphasizes understanding managements and controlling shareholders.

David Fisher

David focuses on company management and invests where he believes people can make a difference. He dislikes businesses driven largely by macroeconomic factors such as oil prices. He is willing to pay for quality.

Victor Kohn

Victor seeks to invest in businesses that are great long-term franchises and is willing to pay a near-term premium to purchase them. He avoids commodity-based companies and turn-around stories.

Luis Oliveira

Luis studies the macro environment and tends to avoid companies that need a high growth rate to justify valuations. He places a premium on companies with proven track records and management continuity.

Lisa Thompson

Lisa is attracted to growth stocks that she believes the market does not fully understand. She focuses on understanding the drivers behind returns and is comfortable buying stocks that are not represented in the index.

Shaw Wagener

Shaw invests in a variety of stocks, many of which are long-term holdings. He often seeks companies with above-average growth and stable-to-improving profitability, or companies where fundamental change will eventually be recognized.

NYO:10 PROD:EQ:EM:EM TODAY TOMORROW 1110:CII EM EQ AND FI PMS_2010.PPT

As of 31 December 2010

35EU.05.1-76881315_0311

Dedicated EM resources around the world gives better insight

As at 31 December 2010Includes 22 investment analysts and 4 macroeconomic professionals with 16 years of investment experience

LATAM and EMEA Asia

Nadya Wells10 years with Capital15 years in profession

Patricia Artigas15 years with Capital24 years in profession

Patrick Grenham3 years with Capital17 years in profession

James Rutherford14 years with Capital24 years in profession

Neil Holzapfel9 years with Capital9 years in profession

Eva Sudol16 years with Capital17 years in profession

Ricardo Torres18 years with Capital18 years in profession

Eugene Minsuk Ohr20 years with Capital20 years in profession

Prem Manjooran18 years with Capital18 years in profession

Warren Howe6 years with Capital19 years in profession

Boris Petersik10 years with Capital18 years in profession

Corrina Lim5 years with Capital22 years in profession

Zhang Chen2 years with Capital4 years in profession

Dickon Corrado8 years with Capital11 years in profession

Asia, continued

Chapman Taylor16 years with Capital20 years in profession

Fiona Wong6 years with Capital6 years in profession

Yoshiko Motoyama6 years with Capital13 years in profession

Fixed Income

Kirstie Spence15 years with Capital15 years in profession

Steven Backes4 years with Capital17 years in profession

Robert Neithart23 years with Capital23 years in profession

Global network of emerging market analysts

EU.SM.TEAMS. 399645_261

Claire Cui15 years with Capital15 years in profession

Irfan Furniturewala10 years with Capital11 years in profession

Macroeconomics

Susan Dietz-Henderson3 years with Capital23 years in profession

Andrew Dougherty6 years with Capital6 years in profession

Jeetu Panjabi8 years with Capital19 years in profession

Kaixiang Zhang4 years with Capital1 year in profession

EU.05.1-76881315_0311

UK regulatory information

EU.SM.REG. 064596_791

All information as at 31 December 2010 unless otherwise stated. If past results are shown, such figures are not predictive of future results. Investors should seek their own tax advice. This information is neither an offer nor a solicitation to buy or sell any securities or to provide any investment service. This fund is offered only by Prospectus, together, where applicable, with the Simplified Prospectus. These documents, together with the latest Annual Report and any documents relevant to local legislation, contain more complete information about the fund, including charges and expenses, and should be read carefully before investing. However, these documents and other information relating to the fund will not be distributed to persons in any country where such distribution would be contrary to law or regulation. This communication is issued by Capital International Sàrl and otherwise by the relevant fund. This communication is intended for professional investors only and should not be relied upon by retail investors. While Capital International uses reasonable efforts to obtain information from sources which it believes to be reliable, Capital International makes no representation or warranty as to the accuracy, reliability or completeness of the information. This communication is not intended to be comprehensive or to provide investment, tax or other advice.

Capital International SàrlRegistered office:3, Place des Bergues1201 GenevaSwitzerland

Telephone: +41 (0) 22 807 4000Facsimile: +41 (0) 22 807 4001Website: www.capitalinternational.com

Registered in Geneva, SwitzerlandGeneva Trade Registry number: CH-660-0121963-4© Copyright 2011 – Capital International Sàrl. All rights reserved.

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