Fixed Income Strategies For Institutional Investors

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1 Fixed Income Strategies For Institutional Investors

2 Fixed Income Strategies For Institutional Investors I 2 Vision and Mission Statement Vision To be the trusted fixed income partner for investors worldwide Our mission is to always put our clients first by: sharing our expertise to aid them in reaching their investment goals; focusing on our strengths of developing and managing fixed income investment solutions; and delivering performance while carefully managing portfolio risk.

3 Fixed Income Strategies For Institutional Investors I 3 We are dedicated to fixed income Fischer Francis Trees & Watts (FFTW) is a global investment management firm providing active, fixed income strategies to institutional investors. We manage single and multi-currency mandates across global, US and emerging markets. Key to how we manage our clients assets are the following: Focus on providing capabilities where we have deep and proven expertise. Specialized investment teams enabling more robust decision making. Risk management integrated throughout our investment process. Consultative approach to continually develop solutions to meet our clients needs. Commitment to building long-term relationships focused on exceeding our clients goals. We manage USD 51.8 billion 1 on behalf of clients around the world, including central banks, public institutions, corporations, insurance companies, endowments, foundations and non profit organizations, and subadvisory relationships. We have investment staff located in New York, Boston, London and Paris. We are ultimately fully owned by BNP Paribas group 2, one of the world s largest financial institutions, providing us with the global resources to strengthen our capabilities. 1 AUM (assets under management) data includes approximately USD 13 billion in advisory assets and may as a result differ from AUM data disclosed on Form ADV. Further, AUM data is generally calculated based on current or recent market values. However, certain assets (including guaranteed investment contracts) are marked at book value. Such assets may represent a material portion of assets under management from time to time, so different asset pricing methodologies may result in different calculations of assets under management. As of December 31, 2014, the AUM data represents assets managed and/or advised by Fischer Francis Trees & Watts, Inc. and Fischer Francis Trees & Watts UK Limited. 2 FFTW is part of BNP Paribas Investment Partners, the global brand name of BNP Paribas group s asset management business. BNP Paribas S.A. is the majority shareholder of BNP Paribas Investment Partners S.A. and other minority shareholders own varying percentages of equity.

4 Fixed Income Strategies For Institutional Investors I 4 We are an established provider with a rich history FFTW has a successful, long-term track record as a fixed income investment management firm. We are a significant provider of services to investors around the world. Today we manage and advise USD 51.8 billion in assets for 114 clients in 34 countries 1. Our experience covers many market cycles. We have developed the solutions our clients seek by combining this knowledge with our success in partnering with clients. Our strength in seizing market opportunities is demonstrated by our consistent introduction of investment strategies. Our ability to collaborate and grow together with our clients is reflected in the fact that nearly 20% of our clients have been with us for more than a decade. 2 Institutions throughout the world continue to select us as their fixed income investment manager because of our: expertise across a number of fixed income asset classes; demonstrated ability to identify market inefficiencies to generate alpha; commitment to building long-term relationships; and dedication to servicing client needs beyond portfolio management, including training and knowledge transfer. FFTW operates as a boutique with autonomous investment teams. Our relationship with our parent began in 1999 when BNP Paribas acquired an ownership interest in FFTW. This relationship continued to grow and in 2006 FFTW became a wholly owned subsidiary of BNP Paribas 3. 1 As of December 31, 2014, the AUM data represents assets managed and/or advised by Fischer Francis Trees & Watts, Inc. and Fischer Francis Trees & Watts UK Limited. Please see the footnote on page 3 for further details regarding the description of the assets. 2 This figure is as of December 31, 2014 and includes clients of both FFTW and predecessor firms. 3 FFTW, Inc. is owned by BNP Paribas Investment Partners USA Holdings, Inc., which is owned by Paribas North America, Inc., which in turn is owned by BNP Paribas S.A. FFTW UK Limited is owned by BNP Paribas Investment Partners S.A., which is ultimately owned by BNP Paribas S.A.

5 Fixed Income Strategies For Institutional Investors I 5 Demonstration of our strength in seizing market opportunities launched FFTW as dedicated fixed income asset manager gained first central bank client initiated first mortgage-only mandate began managing global fixed income mandates established assured-minimum US short-term bond portfolio introduced Asian credit capability added assured-minimum global bond portfolio started managing segregated inflation-linked strategies began managing first segregated currency overlay mandate established emerging market local bond strategy initiated emerging market corporate debt capability

6 Fixed Income Strategies For Institutional Investors I 6 FFTW s Investment Capabilities US Core/Core Plus Global Sovereign Global Aggregate Global Unconstrained Inflation-Linked Mortgage Alpha Mortgage LIBOR Currency Alpha Multi-Sector Absolute Return Multi-Strategy Absolute Return US TIPS Single Sector Global Inflation-Linked US Mortgages Currency Overlay Short Duration Money Markets Stable Value Ultrashort Duration US Short Duration Global Short Duration Local Debt External Debt Emerging Markets Corporate Debt Advanced Total Return Eastern European Debt Global Bank Loans Credit Global High Yield US High Yield European High Yield European Investment Grade Credit Global Investment Grade Credit LEARN MORE ABOUT OUR INVESTMENT PRODUCTS

7 Fixed Income Strategies For Institutional Investors I 7 Focus and specialization define how we manage our clients portfolios Since our inception in 1972, we have been dedicated to active fixed income investment management. Fixed income remains our strength and sole focus allowing us to understand the varied needs of our diverse clients. We believe that investment decisions are best made by specialized and accountable professionals whose interests are closely aligned with those of their clients. In our view, specialization leads to better informed and, ultimately, higher quality decisions. To this end, we have structured our investment teams around distinct roles: Portfolio managers who design the portfolio structure, allocate the risk budget to alpha teams, implement alpha ideas adapting for client guidelines and constraints, and manage the beta; and alpha specialists who generate alpha ideas for use in portfolios. Our alpha teams specialize in global rates, currencies, global corporates, structured securities, sector rotation, emerging markets, global loans, quantitative research and money markets. Our portfolio managers are organized around single sector, multisector, short duration and absolute return strategies. This structure allows us to build portfolios using uncorrelated alpha sources to achieve better information ratios. Learn more about our INVESTMENT PHILOSOPHY

8 Fixed Income Strategies For Institutional Investors I 8 Risk management is at the forefront of how we manage our clients assets Risk management is embedded in our culture. We believe that the best way to manage our clients assets is to integrate risk management into each stage of our investment process. Risk awareness drives our investment process and how we manage client relationships. We believe in: A culture of transparency. Accountability to communicate how we manage risk. A responsibility to implement decisions that meet our clients needs. Our independent risk management team reports directly to our Chief Executive Officer. This team works closely with the investment teams to understand the strategies they implement, and the goals they seek to achieve. The continual dialogue between the risk management team and the investment teams leads to better-informed decisions. Our risk management team focuses on identifying and avoiding unnecessary and unintended risks. We work with each client to determine appropriate risk limits, and our innovative, risk-budgeting process enables us to dynamically allocate risk across diversified alpha teams, while helping to contain the downside risks that are intrinsic to fixed income markets.

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10 Fixed Income Strategies For Institutional Investors I 10 Our clients are the reason we are successful We strive to maintain long-term relationships built on understanding our clients risk appetite and investment goals in order to meet and exceed their expectations. We have always prided ourselves on our consultative approach with clients, exploring different ways to customize our investment capabilities. Our portfolio managers and client service professionals spend time with clients understanding their needs, developing investment guidelines, setting risk budgets and adapting the firm s investment ideas to the particular client s characteristics. Our vision is to be the trusted fixed income partner for investors around the world and we recognize that how we respond to every client is important. We understand the importance of ensuring all relationship aspects from portfolio management and client service to operations and compliance earn our clients trust. Visit our website

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12 New York 200 Park Avenue, 11 th Floor New York, NY London 5 Aldermanbury Square London EC2V 7BP This document is confidential and may not be reproduced or redistributed, in any form and by any means, without FFTW s prior written consent. This document is provided for your reference on a private and confidential basis to discuss an existing or potential advisory relationship. You are invited to meet with FFTW to discuss any of the information provided herein or otherwise,including any and all terms (including fees) that may apply to the relationship. No warranty is provided as to the performance or profitability of any portfolio or any part thereof, nor is any guarantee made that the investment objectives, expectations or targets described in this presentation or anywhere else will be achieved, including without limitation any risk control, risk management or return objectives, expectations or targets. A portfolio may suffer loss of principal, and income, if any, and may fluctuate. The value of investments may be affected by a variety of factors, including, but not limited to, economic and political developments, interest rates and issuer-specific events, market conditions, sector positioning, and other factors. Past performance is not a guarantee of future results. Readers should independently evaluate the information presented and reliance upon such information is at their sole discretion. The risk management process described herein includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk. This material is issued and has been prepared by Fischer Francis Trees & Watts* a member of BNP Paribas Investment Partners (BNPP IP)**. This material is produced for information purposes only and does not constitute: 1. an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or 2. any investment advice. Opinions included in this material constitute the judgment of Fischer Francis Trees & Watts at the time specified and may be subject to change without notice. Fischer Francis Trees & Watts is not obliged to update or alter the information or opinions contained within this material. Fischer Francis Trees & Watts provides no assurance as to the completeness or accuracy of the information contained in this document. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Investment strategies which utilize foreign exchange may entail increased risk due to political and economic uncertainties. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the Financial Instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for a client or prospective client s investment portfolio. Given the economic and market risks, there can be no assurance that any investment strategy or strategies mentioned herein will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the Financial Instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to the Financial Instruments may have a significant effect on the results portrayed in this material. The value of an investment account may decline as well as rise. Investors may not get back the amount they originally invested. This document is directed only at person(s) who have professional experience in matters relating to investments ( relevant persons ). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Services Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents. The performance data, as applicable, reflected in this material, do not take into account the commissions, costs incurred on the issue and redemption and taxes. This material has not been reviewed by the Hong Kong Securities and Futures Commission. This material has not been reviewed by the Monetary Authority of Singapore. *Fischer Francis Trees & Watts, Inc. is registered with the US Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of Fischer Francis Trees & Watts UK Limited is authorized and regulated by the Financial Conduct Authority. Registered in England No: , registered office: 5 Aldermanbury Square, London, England, EC2V 7BP, United Kingdom. FFTW UK is also registered with the US Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended. **BNP Paribas Investment Partners is the global brand name of the BNP Paribas group s asset management services. The individual asset management entities within BNP Paribas Investment Partners, if specified herein, are specified for information only and do not necessarily carry on business in your jurisdiction. For further information, please contact your locally licensed Investment Partner.