EMERGING MARKETS EQUITIES
Sean TaylorGlobal Head of Emerging Markets Equities
& CIO for APAC
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
Melissa YeapClient Portfolio Manager
International & Emerging Markets
Brian MauteDivisional Director
Moderator:
WHY EMERGING MARKETS NOW
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Source: MSCI as of 3/31/19
Emerging markets (EM) have evolved from a LatAM commodity/materials story to an Asian tech/consumption play
0%
10%
20%
30%
40%
50%
60%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EM Tech & Comm Services EM Energy and Industrials
The migration from commodity-orientated sectors toward technology may imply higher-than-expected market P/E multiples.
0%
20%
40%
60%
80%
100%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Consistent with the share of emerging market cap in Asia, the DWS Emerging Markets Equities team is headquartered in Hong Kong.
EMEA LATAM Asia
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
FROM INDUSTRIALS TO TECHNOLOGYIn 2009, comms plus tech accounted for 16% of the MSCI EM Index, today it is 27%.
ASIA CONTINUES TO GROWIn 2008, Asia accounted for 49% of the MSCI EM Index, today it is 74%.
TOO BIG AND GROWING TOO FAST TO IGNORE
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1 Gross domestic product (GDP) as defined by current prices. GDP based on purchasing power parity (PPP) would put EM & developing economies (as defined by the International Monetary Fund (IMF)) at 59% of world vs. 15% for the U.S.
Source: IMF as of 2018.
The share of global GDP from emerging market economies has doubled in the past generation, and is now much larger than the stand-alone U.S. economy.
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10%
20%
30%
40%
50%
60%
EM % of world GDP U.S. % of world GDP
2.9%
3.7%
4.7%
United States
World
Emerging market anddeveloping economies
In 1960, EM was just 19% ofworld GDP vs. 40% for the U.S.
Today, EM accounts for 42% of world GDP vs. 24% for the U.S.
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
EMERGING MARKETS AS A SHARE OF WORLD GDP1 THE FASTEST ECONOMIC GROWTH IN TODAY’S GLOBAL ECONOMY IS IN EMERGING MARKETS
ATTRACTIVE VALUATIONS
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Source: Morningstar as of March 2019. Emerging-market stocks are represented by the MSCI Emerging Markets Equity Index. U.S. stocks are represented by the S&P 500 Index. For illustrative purposes only and does not represent any DWS product.
As a whole, the fastest economic growth in today’s global economy is in emerging markets. Despite this growth dynamic, EM equity valuations are at a 28% discount to U.S. equities currently and average a nearly 30% discount over the last 10 years.
TRADING DISCOUNT BETWEEN EM AND U.S. EQUITIES
_ EM trading at 14.3x P/E, a 14% premium to its 10–year historical average of 12.5x
_ U.S. equities at 19.8x P/E, a 12% premium to its 10–year historical average of 17.7x
19.83
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Difference U.S. stocks Emerging market stocks Average Difference
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
DWS GLOBAL EMERGING MARKETS PLATFORM
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Not all products and services are offered in all jurisdictions and availability is subject to local regulatory restrictions and requirements
GLOBAL EM PLATFORM WE MANAGE $24B IN EMASSETS GLOBALLY
Assets in USD bn
$5B IN ACTIVE EM EQUITIESAssets in USD bn
Source: DWS, December 2018
A global EM team with a comprehensive suite of EM equity offerings
1.2
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0.40.3
0.9
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EM Active Equity 4.9
EM Active Fixed Income 7.0
EM Passive/ETF 11.8
Total EM AUM 23.7
Source: DWS, December 2018
60 EM Investment Professionals
Source: DWS as of 12/31/18.
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
EM Asia EMEA
LATAM Others
Active EM Equity
25dedicated professionals
Active EM Fixed Income
20dedicated professionals
Passive EM Equity/FI
15dedicated professionals
GLOBAL PERSPECTIVE, LOCAL KNOWLEDGE
1 Mumbai third party advisory services.2 Source: Asia Asset Management, Best of the Best Awards, 1/26/17 and 2/20/18. CIO of the Year in Asia. The regional awards are designed to identify Asia’s finest performers from
financial services companies and institutional investors to service providers, whose influence and excellence expands beyond borders. These are firms that have led the way in terms of innovation, service to clients, best practices and overall expertise in their field.
Source: DWS as of March 2019.
“Boots on the ground” in each key EM region
Luiz RibeiroEmerging Markets Equities —Latin America
São Paulo3 IPs
Frankfurt10 IPs
30%of the MSCI Emerging Markets Index is in China and Hong Kong.
70% of EM market capitalization in Asia, home to our lead portfolio manager.
Sean TaylorGlobal Head of EmergingMarkets Equities & CIO APACNamed CIO of the Year in Asia 2017 & 20182
Mumbai12 IPs Taiwan1
2 IPs
Hong KongCIO Asia–6 IPs
IPs = Investment Professionals
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
AN ACTIVE, FLEXIBLE AND DISCIPLINED PROCESS
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DWS Emerging Markets Equity Fund’s investment team employs a disciplined investment process which includes, among other factors, leveraging country and sector allocation and individual security selection.
DWS EMERGING MARKETS EQUITY FUND INVESTMENT PROCESS
1
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tegy
4Fund
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Portfolio construction_ Countries and themes form framework_ Stocks weighted by conviction_ Market exposure determined by outlook_ Portfolio: 75–90 stocks
Portfolio management(including portfolio risk management)
Inception date 5/8/96
Investment objective Long-term growth of capital
Investment philosophy Combination of top-down country allocation with bottom-up, fundamental stock selection
Investment universe Emerging and frontier market equities
Market cap All-cap strategy
Number of holdings Typically 75 to 90
Use of derivatives Tactical use possible
Benchmark MSCI Emerging Markets Index
Morningstar peer group Diversified Emerging Markets
Current manager inception Sean Taylor was named lead portfolio manager on 5/1/14
Outlook emerging markets
Identify countries and themes
Country > Sector
Stock selection
Analysis of fundamentals
Screen universe
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
RISK-ADJUSTED PERFORMANCE
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Source: DWS and Morningstar as of 4/30/19 (unless otherwise noted). Performance is historical and does not guarantee future results. Investment returns and principal fluctuate so your shares may be worth more or less when redeemed. Current performance may differ from the data shown. Please visit www.dws.com for the fund's most recent month-end performance. Performance includes reinvestment of all distributions. Index returns assume reinvestment of all distributions and do not reflect fees or expenses. The fund has a contractual waiver through 1/31/20 and without this waiver, returns would have been lower and any rankings may have been less favorable. It is not possible to invest directly in an index. Not all share classes are available to all investors. A minimum investment of $1 million is required to open an account for Institutional shares.
COMPELLING RESULTS ON AN ABSOLUTE AND RISK-ADJUSTED BASIS (5/1/14–4/30/19, net of fees)
Return Difference Return peer
group percentile
Peer group
rank/# of funds
Info.Ratio (arith)
Info ratio peer
group percentile
Peer group
rank/# of funds
Sharpe ratio
Sharp ratio peer
group percentile
Peer group
rank/# of funds
Tracking error
Std.Dev
Up capture
ratio
Down capture
ratio
SEMGX 5.54% 1.50% 8% 60/656 0.52 3% 12/656 0.38 9% 76/656 2.87 14.93 101.74 94.50
SEKIX 5.58% 1.54% 8% 58/656 0.54 2% 10/656 0.38 9% 72/656 2.87 14.93 101.79 94.36
MSCI EM Index 4.04% 0.00% — — — — — 0.26 — — 0.00 15.27 100.00 100.00
AVERAGE ANNUAL TOTAL RETURNS (as of 3/31/19, net of fees)
Share class 1-year 5-year 10-year Inception date Expense ratio (gross/net)
S –4.69% 5.20% 8.02% 5/8/96 1.34% / 1.01%
INST –4.66% 5.23% 8.09% 3/3/08 1.21% / 0.93%
MSCI Emerging Markets Index –7.41% 3.68% 8.94% N/A N/A
Category Average –9.31% 2.61% 8.92% N/A N/A
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
PERFORMANCE UNDER FUND MANAGER
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Source: DWS and Morningstar as of 4/30/19 unless otherwise noted.Performance is historical and does not guarantee future results. Investment returns and principal fluctuate so your shares may be worth more or less when redeemed. Current performance may differ from the data shown. Please visit www.dws.com for the fund's most recent month-end performance. Performance includes reinvestment of all distributions. Index returns assume reinvestment of all distributions and do not reflect fees or expenses. It is not possible to invest directly in an index.¹Actual Morningstar category is 55/620 and information rank is 9/620.
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
%
We rank 8th
percentile vs Morningstar peers with an information ratio that ranks 2nd
percentile¹
1.50
%
2.32
%
2.72
%
0.64
% 4.04
%
10.6
8%
-7.4
1%
9.92
%
5.58
%
13.0
3%
-4.6
6%
10.5
8%
5.54
%
13.0
0%
-4.6
9%
10.5
6%
Manager Inception (5/1/14–4/30/19)
3 Years1 Year1Q19-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
S shares MSCI Emerging Markets Index S shares excess returnsInst shares
IMPORTANT INFORMATION
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Obtain a prospectusTo obtain a summary prospectus, if available, or prospectus, download one from www.dws.com for more information regarding the fund’s objectives, risks, charges and expenses.
The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc., which offers investment products, or DWS Investment Management Americas, Inc. and RREEF America L.L.C., which offer advisory services.
Fund risk: Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Emerging markets tend to be more volatile and less liquid than the markets of more mature economies, and generally have less diverse and less mature economic structures and less stable political systems than those of developed countries. Investing in foreign securities presents certain risks, such as currency fluctuations, political and economic changes, and market risks. The fund may lend securities to approved institutions. Stocks may decline in value. See the prospectus for details.
DWS Distributors, Inc.222 South Riverside Plaza Chicago, IL 60606-5808 www.dws.com [email protected] Tel (800) 621-1148
© 2019 DWS Group GmbH & Co. KGaA. All rights reserved. R-67222-1 (5/19)
Investment products: No bank guarantee I Not FDIC insured I May lose value
For institutional use and registered representative use only. Not for public viewing or distribution. Investment products: No bank guarantee I Not FDIC insured I May lose value.
