DWS ON TOUR RENTA VARIABLE ! NO HAY ALTERNATIVA ! TINA - THERE IS NO ALTERNATIVE TO EQUITIES
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DWS ON TOUR RENTA VARIABLE ………! NO HAY ALTERNATIVA ! TINA – THERE IS NO ALTERNATIVE TO EQUITIES Irene López | 11 de Febrero 2020 Barcelona For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
“La Vida Comienza Donde Termina Tu Zona De Confort” Neale Donald Walsh “El Cambio Tiene 3 Etapas: En La Primera, Es Imposible En La Segunda, Es Improbable En La Tercera, Es Inevitable” Barak Obama
CIO VIEW 2020 For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
GLOBAL ECONOMY Not too fast – not too slow – growth is stabilizing through EM UNITED STATES EUROZONE CHINA EMERGING MARKETS 60% Share of global 6.2% GDP1 5.8% 4.2% 4.4% 2.2% 1.6% 1.1% 0.9% 2019 F 2020 F 2019 F 2020 F 2019 F 2020 F 2019 F 2020 F 2020: SLOWDOWN 2020: STABILIZATION 2020: SLOWDOWN 2020: RECOVERY ↓ Impact of tax cuts fading ↓ Expected trough in exports ↓ Various trade-conflict effects ↓ Idiosyncratic risks2 / manufacturing ↓ Economy-wide corporate ↓ High debt prevents more ↑ Fiscal / monetary support & profits (NIPA) decreasing ↑ Fiscal stimulus in Germany monetary stimulus less dependency on the U.S. 3.1% 3.1% 2020: NO GLOBAL RECESSION EXPECTED WORLD ↓ Economic policy uncertainty weighs on global economic decisions, 2019 F 2020 F emerging-markets recovery stabilizes F = DWS forecast 1) IMF World Economic Outlook as of December 2019 2) In Brazil, Argentina, Chile / Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. Sources: International Monetary Fund, DWS Investment GmbH as of December 2019 CIO View / Stefan Kreuzkamp / January 2020 /4
GLOBAL ECONOMY Manufacturing dismal – service sector still keeping up its mood PURCHASING MANAGERS‘ INDICES (PMI) Composite Manufacturing Service Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 World 51.2 51.6 51.3 51.1 50.8 51.4 51.7 49.4 49.3 49.5 49.7 49.8 50.3 50.1 51.9 52.5 51.8 51.4 51.0 51.6 52.1 United States 51.5 52.6 50.7 51.0 50.9 52.0 52.7 50.6 50.4 50.3 51.1 51.3 52.6 52.4 51.5 53.0 50.7 50.9 50.6 51.6 52.8 Eurozone 52.2 51.5 51.9 50.1 50.6 50.6 50.9 47.6 46.5 47.0 45.7 45.9 46.9 46.3 53.6 53.2 53.5 51.6 52.2 51.9 52.8 France 52.7 51.9 52.9 50.8 52.6 52.1 52.0 51.9 49.7 51.1 50.1 50.7 51.7 50.4 52.9 52.6 53.4 51.1 52.9 52.2 52.4 Germany 52.6 50.9 51.7 48.5 48.9 49.4 50.2 45.0 43.2 43.5 41.7 42.1 44.1 43.7 55.8 54.5 54.8 51.4 51.6 51.7 52.9 United Kingdom 49.7 50.7 50.2 49.3 50.0 49.3 49.3 48.0 48.0 47.4 48.3 49.6 48.9 47.5 50.2 51.4 50.6 49.5 50.0 49.3 50.0 Japan 50.8 50.6 51.9 51.5 49.1 49.8 48.6 49.3 49.4 49.3 48.9 48.4 48.9 48.4 51.9 51.8 53.3 52.8 49.7 50.3 49.4 Spain 52.1 51.7 52.6 51.7 51.2 51.9 52.7 47.9 48.2 48.8 47.7 46.8 47.5 47.4 53.6 52.9 54.3 53.3 52.7 53.2 54.9 Italy 50.1 51.0 50.3 50.6 50.8 49.6 49.3 48.4 48.5 48.7 47.8 47.7 47.6 46.2 50.5 51.7 50.6 51.4 52.2 50.4 51.1 Brazil 49.0 51.6 51.9 52.5 51.8 51.8 50.9 51.0 49.9 52.5 53.4 52.2 52.9 50.2 48.2 52.2 51.4 51.8 51.2 50.9 51.0 Russia 49.2 50.2 51.5 51.4 53.3 52.9 51.8 48.6 49.3 49.1 46.3 47.2 45.6 47.5 49.7 50.4 52.1 53.6 55.8 55.6 53.1 China 50.6 50.9 51.6 51.9 52.0 53.2 52.6 49.4 49.9 50.4 51.4 51.7 51.8 51.5 52.0 51.6 52.1 51.3 51.1 53.5 52.5 India 50.8 53.9 52.6 49.8 49.6 52.7 53.7 52.1 52.5 51.4 51.4 50.6 51.2 52.7 49.6 53.8 52.4 48.7 49.2 52.7 53.3 South Korea 47.5 47.3 49.0 48.0 48.4 49.4 50.1 Taiwan 45.5 48.1 47.9 50.0 49.8 49.8 50.8 Turkey 47.9 46.7 48.0 50.0 49.0 49.5 49.5 >50 and increasing 50 and falling or unchanged
CENTRAL BANKS Reacted to slowing economies and will stay accommodative CENTRAL BANKS AGAIN IN CUTTING MODE 2020F: EASING BIAS BUT CB POLICY REACHING ITS LIMITS Net number of interest rate moves, rolling 3-months average1 20 ECB MONETARY STIMULUS 15 _ QE extension (€20bn. volume/month) _ Policy rates on hold, no cut in 2020 expected 10 5 TIERING SYSTEM _ Two-tired system, exempting part of banks´ 0 excess liquidity from negative deposit rate -5 -10 FED MONETARY STIMULUS -15 _ Pause after successful "insurance cuts" cycle -20 _ On hold, no cut in 2020 expected -25 BALANCE-SHEET EXPANSION -30 _ Treasury-bill purchases with $60bn. at least into 2009 2011 2013 2015 2017 2019 Q2 2020 (not QE, liquidity injection) G10 central banks Emerging-Markets central banks 1) Moving average of 3-months change in interest rates / Past performance is not a reliable indicator of future returns. Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. Sources: Bloomberg Finance L.P., DWS Investment GmbH as of December 2019 CIO View / Stefan Kreuzkamp / January 2020 /6
FISCAL STIMULUS IN EUROPE Not much to be expected DEBT-TO-GDP RATIOS ACROSS EU COUNTRIES In % of GDP, 2019 GERMANY 2020 & BEYOND 133% _ Fiscal policy already supportive due to income tax relief, 99% 96% social security spending, and increased child benefits 86% 59% _ Plans to abolish the solidarity surcharge Germany UK France Spain Italy SELF-IMPOSED RESTRICTIONS IN GERMANY GERMANY ALREADY GENEROUS BY ITS STANDARDS _ Debt brake (constitution) Fiscal impulse (EU Commission estimate), % of potential GDP _ Commitment not to run a public-sector deficit ("black 1.0 zero") is part of the coalition treaty Forecast1 0.5 0.0 -0.5 LIMITED GROWTH IMPACT -1.0 _ Not a real impulse that boosts private sector activity -1.5 _ German households tend to save additional income -2.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1) Forecast EU Commission / Past performance is not a reliable indicator of future returns. Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. Sources: International Monetary Fund, EU Commission, DWS Investment GmbH as of December 2019 CIO View / Stefan Kreuzkamp / January 2020 /7
HOW CONTAGIOUS ARE EARNINGS ESTIMATES? Change in consensus earnings estimates for 2020 Name of speaker / Name of event / Date /8
OUTLOOK 2020 Risks and opportunities RISKS OPPORTUNITIES PRESIDENTIAL ELECTION LOW INTEREST RATE ENVIRONMENT Tax reform at risk: downside potential for Ongoing allocation shifts due to low or equities negative rates CAPITAL FLOWS VALUATION SPREADS Inflows in passive and active investment Bullish sentiment, huge valuation spreads funds as well as share buy backs GEOPOLITICAL RISKS LOW VOLATILITY Middle East, Iran, Russia, Turkey gaining Low volatility in almost every asset class influence RATES & INFLATION Rise in capital market rates due to accelerating inflation As of: December 2019; Source: DWS International GmbH /9
OUTLOOK 2020 Peak pessimism behind us – 2020 could surprise positively ECONOMY INFLATION CENTRAL BANKS POLITICS Growth slowdown in DM, Close, but below CB target Globally in easing mode Tariff agreement expected recovery in EM No inflation overshoot ECB & Fed on hold Less uncertainty from No recession European politics EQUITIES FIXED INCOME CURRENCIES ALTERNATIVES Higher EPS growth Low for longer EUR/USD continue Illiquidity premium Europe with upside potential Focus on Asian bonds sideways trading JPY as hedge ESG Smart Integration of ESG criteria into the investment process Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. Source: DWS Investment GmbH as of December 2019 CIO View / Stefan Kreuzkamp / January 2020 / 10
ESG – THE REGULATORY PERSPECTIVE Regulation is affecting investment management EU COMMISSION TCFD EU COMMISSION EU COMMISSION TASK FORCE ON CLIMATE-RELATED TCFD FINANCIAL DISCLOSURES SRD II1 GOVERNANCE & DISCLOSURE REGULATION SUSTAINABILITY IN THE _ Requirement to report & MANAGEMENT AROUND _ Processes and policies for INVESTMENT ADVICE track engagement activities CLIMATE-RELATED RISKS reducing sustainability risks _ Consistent product _ Reporting to become classification based on BaFin mandatory for PRI signatories MiFID II target market Bundesanstalt für EU TAXONOMY Finanzleistungsaufsicht _ Definition of economic BULLETIN ON INTEGRATING activities with substantial SUSTAINABILITY RISK contribution to climate change _ "Good practices" on integrating sustainability risks across the value chain Q4 2019 Q1 2020 Q1 2021 Q4 2021 & 2022 1) Shareholder Rights Directive II / Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. Source: DWS Investment GmbH as of December 2019 CIO View / Stefan Kreuzkamp / January 2020 / 11
SOLUCIONES DWS 2020 For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
RENTA VARIABLE TINA (THERE IS NO ALTERNATIVE) …. NO HAY ALTERNATIVA MULTIACTIVO VALUE GROWTH DEFENSIVO CÍCLICO ESG DIGITALIZACIÓN
SOLUCIONES 2020 Investment opportunities based on sustainable growth drivers MULTIACTIVO TEMÁTICOS DWS Concept Kaldemorgen Industria 4.0 DWS Invest Smart Tech Industrials Infraestructuras DWS Invest Global Infrastructure INCOME DWS Invest Top Dividend Nutrición, Demografía & Hábitos de Consumo DWS Invest ESG Global DWS Invest Equity Income 2020 Global Agribusiness ESG ALEMANIA DWS Invest German Equities Cambio Climático & Escasez de Recursos DWS Deutschland DWS Invest Climate Tech Integración ESG & Impacto Positivo As of: December 2019; source: DWS Investment GmbH DWS Invest SDG Global Equities / 14
DWS CONCEPT KALDEMORGEN CONVIRTIENDO VOLATILIDAD EN OPORTUNIDAD For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
DWS CONCEPT KALDEMORGEN Performance since inception PERFORMANCE IN EUR SINCE INCEPTION (MAY 2, 2011) (02.05.2011 = 100 points) 170 + 61.5% 160 (5.7% p.a.) Vol.: 5.4% 150 140 2019 + 12.8% 130 120 110 100 90 May-11 May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 DWS Concept Kaldemorgen FC Past performance is not a reliable indicator of future returns. As of: End of December, 2019; Source: DWS International GmbH, daily figures / 16
DWS CONCEPT KALDEMORGEN Competitive Edge FLEXIBILITY FOCUS ON DOWNSIDE Unconstrained allocation RISK MANAGEMENT across asset classes & State-of-the art geographies without proprietary shortfall model regional bias an integral part of the investment process DWS Concept Kaldemorgen TRACK RECORD EXPERIENCE Robust risk-adjusted A seasoned team of returns since 2011 across investment professionals market cycles under strong leadership Past performance is not a reliable estimator for future returns. Source: DWS International GmbH, May 2019 / 17
DEDICATED INVESTMENT TEAM Boutique-style approach combined with resources of a global player MULTI ASSET TOTAL RETURN TEAM Portfolio Manager 37 37 Klaus Kaldemorgen Co-Head Multi Asset Total Return Teams Managing Director Co-Manager 14 14 11 11 Henning Potstada Christoph Schmidt, CFA Co-Head Multi Asset Total Return Team Global Sector Focus: Global Sector focus: Energy, Materials | Global Convertibles Industrials, Health Care Portfolio Management Risk Management & Data Analytics Equities & Sector Gatekeeper Fixed Income & Currencies Gatekeeper Dr. Gunnar 22 22 Stefan 26 15 Bernhard 31 19 Stefanie 23 3 Heike 30 17 Thomas 6 6 Friede, Flasdick Falk Holtze-Jen Fornefett Graby CEFA CIIA Global Sector Focus: Global Sector Focus: Fixed Income Currencies Risk Management, Performance- Risk Management, Performance- IT, Telekom., Utilities, Consumers Contribution, Portfolio Analytics Contribution, Portfolio Analytics ESG Sascha 19 19 Tanja 8 8 Halicki, Siegrist, CFA CEFA, CIIA Industry experience (years) with DWS (years) Institutional Mandates Fixed Income & Institutional Mandates DWS GLOBAL RESEARCH NETWORK Equities Core Fixed Income Credit Alternatives Fund Selection Sector/ Geo Coverage Sovereign IG, HY, EM, Hybrids Hedge funds, infrastructure, convertibles, commodities 125 59 70 220 14 As of: September 2019; Source: DWS International GmbH / 18
DWS CONCEPT KALDEMORGEN Risk/Return profile of DWS Concept Kaldemorgen over time ANNUAL PERFORMANCE, VOLATILITY AND DRAWDOWNS* SINCE INCEPTION (MAY, 2011) 15% 12.84% 11.87% 10% 8.16% 7.65% 6.42% 5% 3.55% 1.56% 0.46% 0% -2.23% -5% -10% 2011 2012 2013 2014 2015 2016 2017 2018 2019 (partial, inception May Performance Max Drawdown Volatility 2011) Inception date: May, 2011 DWS Concept Kaldemorgen FC share class; Calculation of performance is based on the time-weighted return and excludes front-end fees. Individual costs for funds such as management / performance fee, commissions and other charges have been included in this presentation. Past performance is not a reliable indicator of future returns. * On a calendar year basis As of: December 2019; Source: DWS International GmbH, daily figures / 19
ASSET CLASS STEERING DURING THE YEAR With success through different market phases thanks to flexibility ASSET ALLOCATION 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 12/18 01/19 02/19 03/19 04/19 05/19 06/19 07/19 08/19 09/19 10/19 11/19 12/19 Cash Gold Certificates Government Bonds Corporate Bonds Equities Net Exposure Equities (RS) Past performance is not a reliable indicator of future returns. Allocations are subject to change without prior notice. As of: end of December 2019; Source: DWS International GmbH, Thomson Reuters Datastream. / 20
DWS CONCEPT KALDEMORGEN Contribution overview (before costs) PERFORMANCE CONTRIBUTION – YTD All asset classes in positive territory in 2019: Equities (local) 10.9% _ Equity as the major performance contributor in H1 Equity index futures (local) -1.3% _ Increase in corporate bond allocation paying off Corporate bonds (local) 2.2% _ Profits from government bonds in the US, Russia Government bonds (local) 0.9% and Turkey _ Gold with a positive contribution especially in Q2 Bond index futures (local) 0.0% _ FX also contributing positively, mainly due to Gold (local) 1.4% strengthening of the USD, GBP and RUB Cash/MM (local) -0.1% FX 1.3% TOP 3 CONTRIBUTORS YTD FX Forwards -0.4% AT&T INC 83 BP TAIWAN SEMICONDUCTOR MAN. 62 BP ALPHABET INC 57 BP Past performance is not a reliable indicator of future returns. As of end of December 2019, Source: DWS International GmbH / 21
DWS CONCEPT KALDEMORGEN Navigating markets effectively NET EQUITY NET DURATION NET EUR-POSITION 50% 5 120% 4 40% 100% 3 30% 2 80% 1 20% 0 60% 10% -1 40% 0% -2 -3 -10% 20% -4 -20% -5 0% 05/11 05/12 05/13 05/14 05/15 05/16 05/17 05/18 05/19 05/11 05/12 05/13 05/14 05/15 05/16 05/17 05/18 05/19 05/11 05/12 05/13 05/14 05/15 05/16 05/17 05/18 05/19 Allocations are subject to change without notice. As of: Dezember 2019; Source: DWS International GmbH / 22
OUTLOOK 2020 Peak pessimism behind us – 2020 could surprise positively ECONOMY INFLATION CENTRAL BANKS POLITICS Growth slowdown in DM, Close, but below CB target Globally in easing mode Tariff agreement expected recovery in EM No inflation overshoot ECB & Fed on hold Less uncertainty from No recession European politics EQUITIES FIXED INCOME CURRENCIES ALTERNATIVES Higher EPS growth Low for longer EUR/USD continue Illiquidity premium Europe with upside potential Focus on Asian bonds sideways trading JPY as hedge ESG Smart Integration of ESG criteria into the investment process Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. Source: DWS Investment GmbH as of December 2019 CIO View / Stefan Kreuzkamp / January 2020 / 23
OUTLOOK 2020 Structural trends and changes DIGITALIZATION CLIMATE CHANGE Almost every sector affected! Big driver for ESG / sustainable Disruptive in particular for financial investments and automobile sector As of: December 2019; Source: DWS International GmbH / 24
OUTLOOK 2020 Increase of asset classes with low or negative correlation to equities ASSET CLASS EXPOSURE IN 2020 DIVERSIFIERS 50% Equity Listed Residential Property, stable dividend stocks 31% 18% Government Bonds US Treasuries, Norway Government, EM Government 12% 13% Reduction of Corporate Bonds high correlation with Corporate Bonds 26% equities 9% Diversification benefits, profit from geopolitical risks & Gold 7% low/negative interest rates 10% Cash Avoid negative interests 24% 28% Increase of „Safe Haven“ currencies (USD, CHF, JPY), Foreign Currencies 24% NOK, strategic short position in GBP 2020 Beginning 2019 Allocations are subject to change without prior warning Source: DWS International GmbH, as of: January 2020 / 25
DWS CONCEPT KALDEMORGEN Current portfolio positioning – Equity BREAKDOWN BY REGION BREAKDOWN BY SECTOR Eurozone 19.5% Health Care 12.3% Comm. Services 7.5% North America 15.8% InfoTech 5.8% Financials 4.1% United Kingdom 3.2% Consumer Discretionary 3.9% Asia ex. Japan 3.1% Energy 2.8% Real Estate 2.6% Switzerland 2.6% Consumer Staples 1.8% Japan 1.0% Industrials 1.7% Utilities 1.7% EM/Others 0.6% Materials 1.6% KEY RATIOS* Dividend Yield (12M Forward) 3.25% Net Debt to Equity 66.81% EV/EBITDA (12M Forward) 9.28 EPS Growth (12M Forward) 4.97% Data shown in % of fund volume. Allocations are subject to change without notice. * Data based on the equity part of the fund. As of: December 2019; source: DWS International GmbH / 26
DWS CONCEPT KALDEMORGEN Current portfolio positioning – Fixed Income BREAKDOWN BY MARKET SEGMENTS BREAKDOWN BY REGIONS BREAKDOWN BY SECTORS North America 14.3% Comm. Services 2.7% Emerging Markets 9.1% Industrials 2.5% Europe ex Eurozone 6.3% Energy 2.5% Sovereigns 8.6% Health Care 2.3% Eurozone 4.7% Consumer Staples 1.4% InfoTech 0.9% HY Corporates 8.0% Latin America 2.2% Financials* 0.9% Others Materials 0.5% 1.2% IG Corporates 2.1% Consumer Disc. 0.2% Asia ex Japan 0.1% Real Estate 0.1% Utilities 0.1% Convertibles 0.9% Japan 0.0% None 0.0% KEY RATIOS* Average Bond Rating BBB Duration excl. Derivatives (years) 3.84 Ø Coupon excl. Derivatives 4.29% Duration incl. Derivatives (years) 3.81 Ø Yield-to-maturity excl. Derivatives 3.42% Data shown in % of fund volume. Allocations are subject to change without notice. * Data based on the fixed income part of the fund. As of: December 2019; source: DWS International GmbH / 27
ALLOCATION TO EMERGING MARKETS Select opportunities paying off FIXED INCOME RUSSIAN GOVERNMENT BOND (01.01.2019 = 100) _ Profits from the appreciation of the Russian Ruble as well as from positions in the equity and 112 fixed income buckets in Russia 110 108 +11.2% _ Increase of Mexican corporate bonds exposure 106 (carry) 104 _ Turkish government bonds in hard currency (EUR 102 and USD) 100 98 RUSSIAN RUBLE APPRECIATION (EUR/RUB) EXPOSURE IN THE FIXED INCOME PORTFOLIO 80 4,0% 78 3,0% 76 RUB loses 74 +13.7% 2,0% RUB gains 72 70 1,0% 68 0,0% Brazil Mexico Russia Turkey Past performance is not a reliable indicator of future returns. Allocations are subject to change without prior notice. As of: end of December 2019; Source: DWS International GmbH, Bloomberg / 28
DWS CONCEPT KALDEMORGEN Current portfolio positioning – Currency BREAKDOWN BY CURRENCY* EUR 66.7% 42.7% USD 17.7% 34.7% GBP -1.8% 5.2% CHF 2.6% 2.6% JPY 1.5% 1.5% TWD 1.5% 1.5% Gold 6.9% 6.9% RUB 2.2% 2.2% HKD 1.4% 1.4% Others 1.3% 1.3% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Net Gross Allocations are subject to change without notice. * refers to foreign currency accounts and securities held in the respective currency . As of: December 2019; source: DWS International GmbH, BarraOne / 29
ESTRATEGIAS INCOME DWS INVEST TOP DIVIDEND DWS INVEST ESG EQUITY INCOME For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
CONSERVATIVE EQUITY INVESTMENT The stock market year 2018 as an example INVESTOR: EQUITIES GLOBAL1 INVESTOR: DWS TOP DIVIDENDE Recession? Distribution „Interest „Interest fears“? fears“? 1 measured by the MSCI World Index As of: End of December 2019. Source: DWS International GmbH / 31
WHAT SHOULD BE THE VALUE OF A DIVIDEND STRATEGY IN THE LONG-TERM? 1 Real asset (“inflation hedge”) 2 High dividend yield and regular income 3 Asymmetric risk return profile 4 Less volatile than “traditional” equity investments 5 Superior risk-adjusted returns Source: DWS International GmbH / 32
DIVIDENDS – WHERE ELSE IS THERE YIELD? Dividend yield Bond yield (5Y.) Company (current) 2.2 % PFIZER 3.7 % 2.6 % VERIZON 4.1 % 0.0 % UNILEVER 3.3 % 0.0 % ALLIANZ 4.1 % -0.1 % TOTAL 5.2 % For illustrative purposes only. As of: End of December 2019; source: DWS International GmbH, Bloomberg, www.euwax.de / 33
DWS TOP DIVIDENDE LD Attractive and regular income AVERAGE DISTRIBUTION YIELDS CLEARLY HIGHER THAN INFLATION RATES Distribution per share DWS Top Dividende LD in EUR: 1.101 2.50 2.90 2.90 2.90 2.65 2.65 2.65 2.75 2.75 2.80 2.90 3.00 3.10 3.20 3.40 3.60 6% 5% 4,8% 4,3% 4,1% 4,0% 4% 3,6% 3,6% 3,5% 3,2% 3,1% 3,3% 3,1% 3,0% 2,9% 2,9% 3% 2,7% 2,7% 2,6% 2% 1% 0% 1 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Distribution yield per share DWS Top Dividende2 Inflation rate Eurozone Past performance is not a reliable indicator of future returns. 1 Short fiscal year (04/28/2003 – 09/30/2003) 2 Based on the average NAV of the fiscal year (10/01 – 09/30) 3 Based on the average NAV of DWS Top Dividende since inception (04/28/2003 – 09/30/2019), Inception date: 04/28/2003 As of: End of December 2019; source: DWS International GmbH, Refinitiv Datastream / 34
HIGH DIVIDEND YIELD IS NOT ALWAYS BETTER DIVIDEND YIELD ESTIMATED VERSUS REALIZED YIELD BY DIVIDEND YIELD (IBES CONSENSUS FTSE WORLD SINCE 1995) (in %) 25 Realized yield (clearly) below Our preferred investment universe expected yield 20 Dividend yield (%) 15 10 5 0
DWS TOP DIVIDENDE Clearly lower downside risk and volatility DWS TOP DIVIDENDE LD – SINCE INCEPTION* 100% 81% Down Up -65% -100% DWS Top Dividende LD MSCI World (RI)-Index** Past performance is not a reliable indicator of future returns. Upside Capture Ratio measures a manager's performance in up markets relative to the market (benchmark) itself. It is calculated by taking the security’s upside capture return and dividing it by the benchmark’s upside capture return. Downside Capture Ratio measures manager's performance in down markets. A down-market is defined as those periods (months or quarters) in which market return is less than 0. In essence, it tells you what percentage of the down market was captured by the manager. For example, if the ratio is 110 %, the manager has captured 110 % of the down-market and therefore underperformed the market on the Downside. As of: End of December 2019; * April 28th, 2003 ** No official benchmark Source: DWS International GmbH / 36
THE GOLDEN RULES OF DIVIDEND INVESTING – TIPS AND HINTS 1. Stick to your STYLE especially in growth/momentum driven markets 2. PATIENCE and DISCIPLINE are key Dividend investing is not a sprint, it´s a marathon 3. DON´T GET TOO GREEDY Avoid dividend cutter 4. FOCUS ON CAPITAL PRESERVATION Winning more by losing less 5. SUSTAINABLE BUSINESS MODEL Stability of revenues/earnings, strong balance sheet Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect. As of end of December 2019; source: DWS International GmbH / 37
INCOME STRATEGIES Characteristics, Investment rationale and Investment strategy “Consistent dividend growers”: Strong track record of Dividend growing dividends “Defensive yield”: Defensive champions / combined with decent stocks with higher yield but Aristocrats dividend yield lower growth (mature business models) (Dividend) growth at a Dividend Dividend reasonable yield Strong balance sheet and free yielders growers cash flow, low net debt / good credit rating Quality Our Global equity income strategy focusing on companies with above average dividend yield, reasonable dividend growth and sustainable dividend coverage. © 2019 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. * (vs. peers in global equity income category by Morningstar and broad market combined with top rankings and ratings ) Note: Not all Deutsche AM products and services are offered in all jurisdictions and availability is subject to local regulatory restrictions and requirements. Past performance is not necessarily indicative of future returns. Source: DWS International GmbH / 38
SIMILARITIES & DIFFERENCES DWS Invest Top Dividend & DWS Invest ESG Equity Income DWS Invest Top Dividend DWS Invest ESG Equity Income Morningstar Peer group Global Equity Income Global Equity Income Benchmark None None Use of derivatives / FX Generally not Generally not hedging Focus on large caps, Focus on mega / large caps Market capitalization partially mid caps (Ø market cap: 103 bn EUR) (Ø market cap: 97 bn EUR) Number of holdings 60 – 100 60 – 100 Single stock weight 1–3% 1–4% Sector restrictions / None – focus on defensive None – focus on ESG conform sector bias dividend payer defensive dividend payer Regional restrictions None None Liquidity ~ 7% ~ 5% Ø Current dividend yield Ø 3.9% Ø 3.2% Ø Median dividend 7.0% 8.7% growth 1 year Turnover Ratio ~ 20 % p.a. < 50 % p.a. Past performance is no guarantee of future results.. AuM EUR 24 bn As of: End of December 2019; source: DWS International GmbH, Aladdin Research EUR 293 mn No assurance can be given that investment objective or any target will be achieved. © 2020 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. / 39
DWS ESG CONSENSUS RATING scanning for cross-vendor concordance in ESG assessments DISCRETIONARY BEST-IN-CLASS APPROACH 100 points A ESG true leaders concordant rank order ► B ESG leaders C ESG upper midfield D ESG lower midfield DWS is licensed user of the data from those ESG-data-vendors. 0 points E ESG laggards F ESG true laggards HARD EXCLUSIONS DWS’ ESG Consensus Ratings seek to identify the true ESG leaders and ESG laggards by peer group, consistently assessed as such by the top ESG agencies in a 360 degree review. As of: December 2019; source: DWS International GmbH / 40
DETAILING OUR MINIMUM ESG STANDARDS (MESGS) Exclusion and best-in-class criteria that apply to all ESG labeled DWS mutual funds Sector screens Norm screen and Best-in-Class ranking Controversial weapons UNGC Norm Compliance _ Nuclear weapons _ Human rights _ Cluster munitions _ Child / forced labor _ Anti personnel mines _ Work conditions _ Depleted uranium _ Environmental impact _ Business ethics Ownership and production of Rating: A – E2 weapons and components Controversial sectors _ Tobacco X Exclusion Climate Transition Risk Investment _ Military defense Rating: A – E3 universe _ Adult entertainment _ Gambling Security selection _ Nuclear power from those issuers _ Coal* ESG overall SynRating that meet all requirements Max. revenue threshold Rating: A – D4 ≤ 5% 1 Max. revenue threshold: ≤ 25%, 2 max. 5% E in portfolio, 3 E max 5%, F excluded 4 ESG SynRating: max. 15% D in portfolio; max. 5% unrated As of: December 2019; source: DWS Investment GmbH / 41
DWS INVEST ESG EQUITY INCOME Sector and country allocation – absolute to DWS Top Dividende Portfolio overlap SECTOR ALLOCATION approx. COUNTRY ALLOCATION 16,9% 1/2 - 2/3 USA 33,3% Financials 15,2% 36,1% 15,3% Germany 9,5% Health Care 14,5% 7,4% Great Britain 6,6% IT 12,8% 5,6% 7,1% 6,2% 9,2% Exclusion of Netherlands 5,9% Consumer Staples 12,4% tobacco e.g. 5,2% Canada 6,3% Utilities 7,6% Greener European Utilities vs. 8,6% coal intensive US utilities Japan 5,0% 7,6% 5,7% Communication 9,0% 4,5% Norway 4,0% Industrials 7,0% 5,5% 4,4% Denmark 0,0% Materials 6,5% Chemical sector vs. Mining 3,6% In general overweight in Europe due to better 4,7% Switzerland Companies 5,4% ESG data availability, better transparency and pioneering role of Europe in the field of ESG Consumer Disc. 4,0% 3,3% 1,6% France 5,4% Energy 3,3% Primarily indirect oil exposure 2,7% 11,3% Finland 1,4% vs. European Oil Majors Real Estate 0,0% 5,8% 0,5% Other Countries 7,3% ESG Equity Income DWS Top Dividende ESG Equity Income DWS Top Dividende In % of fund volume. Allocations are subject to change without notice. As of: End of December 2019; source: DWS International GmbH, Report Finder / 42
DWS INVEST ESG EQUITY INCOME ESG quality versus DWS Top Dividende and MSCI World ESG Best in Class Exclusion 50% 42% 39% 40% 34% 30% 25% 27% 23% 20% 19% 20% 14%11% 8% 8% 10%10% 10% 0% 0% 0% 0% 1% 2% 0% A B C D E F Kasse Ø SynRating: B Ø SynRating: C Ø SynRating: C ESG-Score: 77 ESG-Score: 68 ESG-Score: 61 DWS Invest ESG DWS MSCI Welt Equity Income Top Dividende Especially ESG Equity Income scores best within the Morningstar Peer Group “Global Equity Income”. It is leading on the first rank and has 5 out of 5 sustainability globes. ESG SynScore and ESG SynRating are based on proprietary ESG Engine. No assurance can be given that investment objective or any target will be achieved. © 2019 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. As of: End of December 2019; source: DWS International GmbH, Aladdin Research, Update Quarterly / 43
ESG GLOBAL EQUITY INCOME MANDATE Performance since inception (May 27, 2013) PERFORMANCE SINCE INCEPTION1 OF “ESG GLOBAL EQUITY INCOME” MANDATE VS. MARKET 100 + 94.9% Vola 12.5% 80 SR: 0.88 + 82.3% 60 Vola 8.8% SR: 1.11 40 + 80.1% Vola 8.8% 20 SR: 1.08 + 73.9% 0 Vola 11.1% SR: 0.81 -20 05/13 11/13 05/14 11/14 05/15 11/15 05/16 11/16 05/17 11/17 05/18 11/18 05/19 MSCI World TR Net (EUR) ESG Global Equity Income Mandat MSCI World High Dividend Yield TR Net (EUR) DWS Top Dividende (brutto) 1) May 27th, 2013 Past performance is no guarantee of future results. Calculation of performance is based on the time-weighted return and excludes front-end fees. Individual costs such as fees, commissions and other charges have not been included in this presentation and would have an adverse impact on returns if they were included. Sharpe Ratio (SR) = measure to calculate risk-adjusted return As of: End of September 2019; source: DWS International GmbH, monthly data, update quartely / 44
RENTA VARIABLE ALEMANA DWS INVEST GERMAN EQUITIES / DWS DEUTSCHLAND For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
GERMAN GDP IS HEALTHIER THAN SOME MAY THINK 125 120 115 110 105 100 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Germany United States GDP per capita, index: 2000 = 100 The information herein reflects our current views only, are subject to change, and are not intended to be promissory or relied upon by the reader. There can be no certainty that events will turn out as we have opined herein. Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. *+: high expected market impact; O: neutral expected market impact; -: low expected market impact // Source: Bloomberg Finance L.P., DWS Investment GmbH as of January 2020 CIO Office / Market Outlook Slides / January 2020 / 46
GERMANY BOTTOMING Key Economic Indicators Consensus expects strong rebound in growth in 2020 Source: Bloomberg CIO Office / Market Outlook Slides / January 2020 / 47
DWS INVEST GERMAN EQUITIES / DWS DEUTSCHLAND Characteristics, Investment rationale and Investment strategy CHARACTERISTICS & INVESTMENT RATIONALE _ Investment style: Blend INVESTMENT STRATEGY _ Investment approach: Bottom-up/stock picking _ German equity strategy focusing on firms sustainable business models and _ Benchmark: CDAX Index strong balance sheets. _ Tracking error: No formal tracking error target CDAX UNIVERSE (minimum 500mn € market cap) _ Holdings: 40 – 60 stocks Investment focus Quality Fundamentals Sustainability _ Market capitalization: Large-Caps and flexible addition of high quality Small/Mid Caps (30% on average) _ Combination of value and _ Earnings quality _ Growth at a reasonable _ ESG aspects growth stocks _ Management track record price _ Use of derivatives: 1) DAX futures for active steering of _ Flexible addition of _ Attractive dividend yield _ Strong balance sheets investment ratio to tactically benefit from short term small/mid caps market movements and to manage risk as well as Opportunistic “blend” approach 2) options to generate premium intakes (max. 3% of portfolio delta adjusted) DWS Deutschland / DWS Invest German Equities _ ~60 stocks _ One of the largest and most experienced German Monitoring Risk Management equity teams with direct access and close long-term relationships to the most important German companies. _ Excellent stock picking expertise with a focus on High Conviction German equity portfolios structural growth and positive earnings momentum Note: Not all Deutsche AM products and services are offered in all jurisdictions and availability is subject to local regulatory restrictions and requirements. Source: DWS International GmbH / 48
DWS INVEST GERMAN EQUITIES / DWS DEUTSCHLAND Portfolio allocation BY SECTORS / ASSET CLASSES* BY MARKET CAPITALIZATION* IT Mega caps Financials (> 10 bn .) Industr ials Consumer Disc. Larg e cap s (> 5 bn. < 10 bn.) Materials Por tfolio Health Ca re Por tfolio Mid cap s Commu nicatio n Ben chmar k (> 1 bn. < 5 b n.) Real Estate Utili ties Small caps Consumer Sta ples (< 1 bn.) 0% 5% 10% 15% 20% 25% 30% 0% 20% 40% 60% 80% 100 % BY TOP TEN* Allia nz SE SAP S E Wirecard AG Siemen s AG Adid as AG Muenchen er… Por tfolio Infin eon… KION G roup AG BAS F SE Fresenius SE… 0% 2% 4% 6% 8% 10% 12% This allocation data comprises a mutual fund benchmarked against CDAX (RI). * In % of fund volume; Reference index: 100% CDAX Allocations are subject to change without notice. As of: December 30, 2019; source: DWS International GmbH, Report Finder FIS XP / 49
DWS INVEST GERMAN EQUITIES / DWS DEUTSCHLAND Performance & risk figures CALENDAR YEAR PERFORMANCE 7-YEAR CUMULATIVE PERFORMANCE 40% 250 108.09% 30% 220 84.05% 20% 10% 190 0% 160 -10% 130 -20% -30% 100 Yea r to 201 9 201 8 201 7 201 6 201 5 201 4 201 3 201 2 Date Strategy Ben chmar k Strategy Ben chmar k YTD 2019 2018 2017 2016 2015 2014 2013 2012 12/14 - 12/15 12/15 - 12/16 12/16 - 12/17 12/17 - 12/18 12/18 - 12/19 Strategy 25.78% 25.78% -23.03% 20.03% 9.52% 17.54% 5.25% 32.19% 37.97% Strategy 17.54% 9.52% 20.03% -23.03% 25.78% Benchmark 25.08% 25.08% -18.11% 15.98% 6.50% 11.33% 3.09% 26.75% 29.26% Spread Benchmark 11.33% 6.50% 15.98% -18.11% 25.08% 0.70% 0.70% -4.92% 4.05% 3.01% 6.21% 2.15% 5.44% 8.71% ANNUALISED PERFORMANCE STATISTICS Return p.a. Annualised volatility (p.a.) Strategy Benchmark Spread Strategy Benchmark Tracking error Information ratio Sharpe ratio Max Drawdown Beta Var (99%/10day/1y) 1 Year 25.78% 25.08% 0.70% 15.65% 12.83% 3.28 0.21 1.67 6.91 1.21 10.53% 3 Years 5.13% 5.90% -0.78% 15.52% 12.41% 3.45 -0.23 0.35 25.24 1.24 - 5 Years 8.38% 7.09% 1.29% 17.69% 15.14% 3.31 0.39 0.49 25.24 1.16 - 7 Years 11.03% 9.10% 1.93% 16.20% 14.02% 3.01 0.64 0.69 25.24 1.14 - This data comprises a mutual fund benchmarked against CDAX (RI). Calculation of performance is based on the time-weighted return. Possible previous benchmark changes have already been reflected in benchmark performance. Individual costs such as fees, commissions and other charges have not been included in this presentation and would have an adverse impact on returns if they were included. Past performance is not a reliable indicator of future returns. Reference index: 100% CDAX As of: December 30, 2019; source: DWS International GmbH / 50
TEMÁTICOS For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
Translating global challenges into investable themes Investment opportunities based on sustainable growth drivers Technolical breakthrough Climate Change and resource scarcity DWS Invest Artificial DWS Invest Climate Tech Intelligence Interconnectivity of tech Nutrition, demography and themes and globalisation Global eating habbits DWS (Invest) Smart Megatrends DWS Invest Global Industrial Technologies Agribusiness ESG and positive impact investing Urbanisation, demography and modernisation DWS Invest SDG Global Equities DWS Invest Global Infrastructure As of: December 2019; source: DWS Investment GmbH / 52
For Professional Clients (MiFID Directive 2014/65/EC Annex II) only. No distribution to private/retail customers. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). Thematic Equities – Smart Technologies DWS Invest Smart Industrial Technologies Automation & Digitalization are only two megatrends that shape our current world. The fund invests in industrial companies that drive these changes. “Smart Tech” operates in various fields: Automation, Digitalization, Energy Efficiency, Global Trade, MedTech and Infrastructure. The fund management team has a strong focus on growth stocks while ensuring risk diversification on a portfolio level. Automation & Robotics Infrastructure More use of software & robotics to High demand for infrastructure due to improve efficiency, quality and to allow demographic trends and a higher degree of customization modernization requirements E-Commerce & Global trade Digitalisation & Cyber Security Increasing air travel and freight Demand for software applications to volumes because of globalization improve efficiency and to distinguish and demographic trends products and services Smart Energy Medical Technology Reduction of energy costs and emissions Rapidly rising health care costs, to fulfill global emission standards leads healthier lifestyle and appearance of to “Smart Cities” and “Smart homes” Millennials are influencing changes in consumer behavior. As of: December 2019 Source: DWS International GmbH / 53
For Professional Clients (MiFID Directive 2014/65/EC Annex II) only. No distribution to private/retail customers. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). Thematic Equities – Impact Investing & ESG Integration DWS (Invest) SDG Global Equities We seek exposure to companies which operate in SDG-related business sectors and have a meaningful positive impact on the United Nations Sustainable Development Goals (SDGs). Comprehensive analysis and evaluation of the SDG impact is based on our proprietary ESG-Engine. The average proportion of SDG-related revenue of the companies in the fund must be more than 50%. Measuring what matters Making a positive impact Integrating the UN SDGs into investment portfolios through our proprietary SDG-Rating. Stocks are only eligible for the fund´s investment universe if they are relative and absolute SDG- Champions. The SDGs at an investor level Application of ESG standards Achieving the SDGs may require up to Consideration of ESG aspects (Best-in-Class- $7tn in investment each year from 2015 to Approach, Exclusion, Norm Compliance, 2030 – of which up to $6tn is reliant on the Carbon Rating, Engagement) based on the unique ESG Engine. private sector. Excellent proprietary ESG engine, which received the Insurance ERM Award 2017 As of: December 2018 Source: DWS International GmbH / 54
DWS INVEST SDG GLOBAL EQUITIES High positive link to UN SDGs versus MSCI World DWS Invest SDG Global Equities MSCI World 50% 9% SDG related revenues SDG related revenues More than every Only about every second euro invested twentieth euro invested is aligned with is aligned with the UN SDGs the UN SDGs Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect. Number is average of SDG related revenue contribution since inception of the fund. As of: December 2019; source: DWS International GmbH, quarterly updated / 55
DWS INVEST SDG GLOBAL EQUITIES Allocation Portfolio allocation by SDG related revenues and by SDG theme (in %) 13 23,2% 3 10,5% 6 6,6% 12 4,7% 4 3,0% 2 2,0% 11 0,3% 8 0,1% More than every second euro invested is aligned with the UN SDGs Pictures illustrative purposes only. As of: December 2019; source: DWS International GmbH; quarterly updated / 56
Thematic Equities – Agribusiness DWS Invest Global Agribusiness We need to improve the efficiency in Agribusiness and invest in solutions to feed the planet. A two- pronged investment approach via equity both upstream and downstream holds the key to generate a superb risk-return profile for investors in our strategy. Upstream Downstream _ Fertilizer companies _ Protein producers (beef, chicken, pork) _ Agricultural chemicals, _ Fishery & Aquaculture _ Seed producers _ Packaged foods _ Farm equipment _ Retail foods _ machinery _ Breweries and soft drink producers, _ Restaurants _ Supermarkets Agribusiness Tech Midstream _ Data management (field monitoring) _ Processors _ Monitoring and communication _ Distributors technology _ Railways _ GPS Tracking _ Port operators _ Precision AG (Irrigation, Planting, Spraying) As of: December 2019 Source: DWS International GmbH / 57
For Professional Clients (MiFID Directive 2014/65/EC Annex II) only. No distribution to private/retail customers. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). Thematic Equities – Climate Technology DWS Invest Climate Tech We need to address the global climate change and invest in solutions that mitigate and adapt its implications on the planet. A versatile investment approach via listed equity focusing on proprietary climate change sector universe holds the key to generate a superb risk-return profile for investors. Climate Change Impact Management Consumption of Energy Health: Diseases/pest control, air Industry: Combined heat and power, quality, environmental sensing advanced boilers, pumps, compressors Agribusiness: Precision Ag, drip Buildings: Thermal insulation, building irrigation, drought resistance plants automation, lighting systems Water: Re-use/desalination, leak Vehicles: Hybrid & electric vehicles, detection, Smart Water infrastructure battery technology, improved Disaster Prevention/Recovery combustion engine technology Transportation of Energy Generation of Energy Electricity transmission and distribution Solar poly, wafer, module, inverter Smart grid / Energy storage Solar and wind farm developers/owners Data management Wind turbine manufacturers Monitoring/communication technology Hydro value chain / Waste-to-Energy New Materials As of: December 2018 Source: DWS International GmbH / 58
Thematic Equities – Infrastructure DWS Invest Global Infrastructure Historical underinvestment and future investment gaps in infrastructure spending coupled with significant structural drivers create investment opportunities. Infrastructure securities are backed by tangible assets with sustainable inflation-linked underlying cash flows that can effectively diversify a multi-assets portfolio. We invest in listed infrastructure companies that generates at least 70% of the operational cash flow is from owning or leasing hard infrastructure assets. The Opportunity “Pure-Play” Focus _ Strong tailwinds from investor and “real world” _ Regulated Utilities: e.g. Water, electricity demand networks _ Communications: e.g. Mobile Towers, Satellites _ Invest with the pioneer of the asset class – _ Energy: e.g. Oil and gas pipelines “Pure Play” infrastructure _ Ports: e.g. Sea ports, airports _ Transportation: e.g. Rail roads, toll roads Characteristics of Pure-Play The Benefits Assets _ “Pure play” infrastructure allows “smart access” to _ Focus on hard assets that provide efficient the asset class movement of people and products _ Stable & inflation linked cash flows and attractive _ Low pricing risk owing to fixed, contracted, or income regulated revenue models _ Perfect fit in a Multi-Asset-Portfolio _ Provision of essentials services such as water or _ Complement to direct investments, allowing for power result in highly inelastic demand profiles instant diversification & capital deployment _ Long-dated assets with perpetual lives, low _ Long duration assets & cash flows operating costs which leads to high operating margins _ Sustainable performance and alpha _ Inflation protection from inflation-adjusted As of: December 2019 revenues Source: DWS International GmbH / 59
APÉNDICE For Professional Clients MiFID Directive 2014/65/EU Annex II) only. No distribution to private/retail investors. For Qualified Investors (Art. 10 Para. 3 of the Swiss Federal Collective Investment Schemes Act (CISA)). For institutional investors only. Further distribution of this material is strictly prohibited. APAC Australia: For professional clients only.
TACTICAL VIEW(2) & STRATEGIC FORECAST(3) Level Tactical View Dec '20 F -1W YTD Rates percentage points GER 2yr -0.66 -0.60 -0.05 -0.06 GER 10yr -0.41 -0.35 -0.08 -0.23 GER 30yr 0.09 0.15 -0.10 -0.26 UK 10yr 0.52 0.95 -0.04 -0.34 UST 2yr 1.39 1.50 -0.11 -0.18 UST 10yr 1.56 1.85 -0.13 -0.32 UST 30yr 2.02 2.25 -0.11 -0.31 JGB 10yr -0.07 -0.10 -0.05 -0.06 Spreads basis points EUR IG Corp 104 90 3 1 EUR HY 350 360 26 36 US IG Corp 96 110 4 5 US HY 382 400 26 52 EM Credit 317 320 10 9 EM Sovereign 313 320 11 17 Italy 10yr 135 150 -22 -25 Spain 10yr 68 70 0 2 Currencies EUR vs USD 1.10 1.15 0.00 -0.02 USD vs JPY 108.90 105.00 -0.38 0.02 EUR vs GBP 0.84 0.89 0.00 -0.01 EUR vs JPY 120.12 121.00 -0.37 -1.84 GBP vs USD 1.31 1.29 0.00 0.00 USD vs CNY 6.94 7.10 0.00 -0.04 Equity* & Commodities S&P 500 3,284 3,300 -0.4% 1.9% Stoxx 600 414 420 -2.3% -0.6% Euro Stoxx 50 3,674 3,770 -2.8% -2.0% DAX 30 13,120 14,000 -3.4% -1.0% SMI 10,734 10,450 -1.1% 1.1% FTSE 100 7,321 7,510 -3.5% -3.5% MSCI EM 1,073 1,120 -4.2% -4.1% MSCI AC Asia xJ 662 700 -4.5% -4.1% MSCI Australia 1,407 1,355 -1.1% 3.3% MSCI Japan 1,015 1,060 -3.1% -2.2% Gold 1,581 - 1,550 0.6% 4.3% Crude Oil (WTI) 52 - 54 -3.7% -15.5% The information herein reflects our current views only, is subject to change, and is not intended to be promissory or relied upon by the reader. There can be no certainty that events will turn out as we have opined herein. Past performance is not a reliable indicator of future returns. Forecasts are not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect. *Relative to MSCI World Index, Sources: Bloomberg Finance L.P., DWS Investment GmbH as of 1/31/20 // (1) Outcome: A - above expectations, B - below expectations, O - on expectations (2) = underweight; = neutral; = overweight // (3) F = Forecast 61
DWS CONCEPT KALDEMORGEN OPPORTUNITIES RISKS _ Market, industry and company-specific price increases on the equity markets. + _ At any time, the price of the shares can fall below the price at which the investor acquired them (up to the risk of total loss). - _ Drops in yields or increases in prices in the bond markets and/or _ Market, industry and company-specific price fluctuations on the equity reductions in yield spreads for high-yield securities. markets. _ Opportunities for additional income through the use of derivative _ Interest rate, price and currency fluctuations in the bond markets. A investment instruments. creditworthiness risk exists with regard to the issuers of bonds. In general terms, this is the risk of over-indebtedness or insolvency, i.e. the potential temporary or permanent inability to fulfil interest and/or repayment obligations on schedule. This can have a negative impact on the fund's performance. _ Asset-backed securities may be less liquid than corporate debt; in addition, there is the risk of early repayment, which can lead to fluctuations in the unit price. _ The use of derivatives involves counterparty risks, i.e. the creditworthiness risk of the counterparties (see the above risk notice on creditworthiness risk). Derivatives are subject neither to statutory nor voluntary deposit insurance. _ Investments in the commodities sector may be associated with illiquid markets and high volatility. _ The fund has the option of achieving leverage through the use of derivatives. The use of leverage can result in the increase in potential losses. _ The fund can invest in assets with different currencies. This gives rise to exchange rate risks, which may be hedged. Source: DWS International GmbH / 62
DWS TOP DIVIDENDE / DWS INVEST TOP DIVIDEND OPPORTUNITIES RISKS _ Market-, sector- and company-specific price gains + _ Market-, sector- and company-specific - price volatility _ Possible exchange- rate chances _ Possible exchange-rate risk _ Above-average dividend yields _ Possible dividend cuts _ Because of its composition or the techniques used by its managers, the fund is subject to heightened volatility. Consequently, unit prices may fluctuate sharply in either direction within short periods of time. _ The value of the fund's shares may fall below the price at which the client originally bought them Source: DWS International GmbH / 63
DWS INVEST ESG EQUITY INCOME / DWS TOP DIVIDENDE OPPORTUNITIES RISKS _ Market-, sector- and company-specific _ Market-, sector- and company-specific price gains price volatility _ Possible exchange- rate chances _ Possible exchange-rate risk _ Above-average dividend yields _ Possible dividend cuts _ Because of its composition or the techniques used by its managers, the fund is subject to heightened volatility. Consequently, unit prices may fluctuate sharply in either direction within short periods of time. _ The value of the fund's shares may fall below the price at which the client originally bought them. Source: DWS International GmbH / 64
DWS INVEST GLOBAL INFRASTRUCTURE Opportunities and risks OPPORTUNITIES RISKS _ Increase in demand for infrastructure due + _ Market, industry and business-related price losses - to rising world population and urbanization _ Exchange rate losses _ Trends in increased mobile data use in developed countries- particularly in the United States _ Stronger regulation in the field of infrastructure worldwide _ Increased demand for the transport of goods, energy and _ Weakening of underlying trends (urbanization/mobile data people; Due to economic growth and new technologies in use/higher transport needs of people and goods or of energy) energy production _ Concentration risk: By concentrating on shares in the _ Market, industry and business-related price increases infrastructure sector, there is a limited diversification within the fund. _ Exchange rate gains _ The fund includes a significant amount of derivative transactions with various Contracting Parties. If a Contracting Party does not make any payments, for example due to insolvency, this may cause the investment to suffer a loss. Financial derivatives are not subject to the statutory or voluntary deposit guarantee _ Due to its composition/the techniques used by the fund management, the Special Fund has a significantly increased volatility, i.e., the share prices may also be subject to significant fluctuations downwards or upward within a short period of time. _ The share value may at any time fall below the purchase price at which the client has acquired the share. Source: DWS International GmbH, as of: end of December 2019 / 65
DWS INVEST GLOBAL AGRIBUSINESS Opportunities and risks OPPORTUNITIES RISKS _ Market, sector and company-specific _ Market, sector and company-specific price gains price volatility _ Possible exchange-rate risk _ Because of its composition or the techniques used by its managers, the fund is subject to heightened volatility. Consequently, unit prices may fluctuate sharply in either direction within short periods of time _ The value of the fund's shares may fall below the price at which the client originally bought them As of: September 2019; source: DWS International GmbH / 66
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