DWS Global Small Cap Growth Fund Strategy presentation. Investment products: No bank guarantee I Not FDIC insured I May lose value

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1 DWS Global Small Cap Growth Fund Strategy presentation Investment products: No bank guarantee I Not FDIC insured I May lose value

2 Agenda Why global small cap growth Investment philosophy and process Performance and positioning update Investing in foreign securities, particularly those of emerging markets, presents certain risks, such as currency fluctuations, political and economic changes, and market risks. Stocks of smaller companies involve greater risk than securities of larger, more-established companies. Stocks may decline in value. See the prospectus for details. Investment products: No bank guarantee I Not FDIC insured I May lose value 2

3 DWS Global Small Cap Growth Fund Why global small-cap stocks? Investment products: No bank guarantee I Not FDIC insured I May lose value

4 Potential benefits of global small-cap investing Overlooked opportunities Early trend spotting Ability to invest throughout global supply chain Naïve geographic allocation has sector implications Exposure to non-usd currency Historically has performed well during inflationary periods Ability to take advantage of mergers & acquisitions activity Investment products: No bank guarantee I Not FDIC insured I May lose value 4

5 Seeking overlooked opportunities NUMBER OF COMPANIES IN SMALL-CAP VS. LARGE-CAP GLOBAL INDICES (BY CAPITALIZATION RANGE) Global managers who are tied to the large-cap MSCI World Index may miss out on the best small- and mid-cap ideas. Source: FactSet as of 12/31/10. Performance is historical and does not guarantee future results. Index returns assume reinvestment of all distributions and do not reflect any fees or expenses. It is not possible to invest directly in an index. Investment products: No bank guarantee I Not FDIC insured I May lose value 5

6 Seeking overlooked opportunities ANALYST COVERAGE BY MARKET CAPITALIZATION Lack of Wall Street coverage leaves the potential for small-cap alpha Less than $250 million $250 to $500 million $500 million to $1 billion $1 to $2 billion $2 to $3 billion $3 to $4 billion $4 to$5 billion $5 to $10 billion $10 to $50 billion More than $50 billion Source: FactSet as of 12/31/10. Performance is historical and does not guarantee future results. Index returns assume reinvestment of all distributions and do not reflect any fees or expenses. It is not possible to invest directly in an index. Alpha is excess performance over the capital asset pricing model (CAPM) required rate of return (RR), which is a complex financial formula designed to predict an investment s performance. Investment products: No bank guarantee I Not FDIC insured I May lose value 6

7 Redefining risk: 70 years of positive rolling 10-year returns ROLLING 10-YEAR AVERAGE ANNUAL RETURN (12/31/49 12/31/10) While large-cap stocks have had the lost decade, small-cap stocks haven't had a negative rolling 10- year period going back to the post-depression era Dec-49 Jan-55 Jan-60 Jan-65 Jan-70 Jan-75 Jan-80 Jan-85 Jan-90 Jan-95 Jan-00 Jan-05 Jan-10 Source: Morningstar as of 12/31/10. Performance is historical and does not guarantee future results. Large-cap stocks are represented by the S&P 500 Index. Small-cap stocks are represented by the Ibbotson Associates SBI Small Cap Stocks Index. Index returns assume reinvestment of all distributions and do not reflect any fees or expenses. It is not possible to invest directly in an index. Investment products: No bank guarantee I Not FDIC insured I May lose value 7

8 Small-cap stocks: the surprise inflation fighter ANNUALIZED PERFORMANCE, % 16% During the period of heavy US inflation (1973 through 1981), small-cap stocks outperformed all other asset classes. 12% 8% 4% 0% -4% FTSE EPRA/NAREIT Developed Index S&P GSCI S&P 500 Index MSCI EAFE Index IA SBBI US Small Stock Index IA SBBI US IT Gov't Bond Index Source: Morningstar as of 12/31/10. Performance is historical and does not guarantee future results. Index returns assume reinvestment of all distributions and do not reflect any fees or expenses. It is not possible to invest directly in an index. Investment products: No bank guarantee I Not FDIC insured I May lose value 8

9 Small-cap stocks: the surprise inflation fighter CUMULATIVE PERFORMANCE, % 320% During the period of heavy US inflation (1973 through 1981), small-cap stocks outperformed all other asset classes. 270% 220% 170% 120% 70% 20% -30% FTSE EPRA/NAREIT Developed Index S&P GSCI S&P 500 Index MSCI EAFE Index IA SBBI US Small Stock Index IA SBBI US IT Gov't Bond Index Source: Morningstar as of 12/31/10. Performance is historical and does not guarantee future results. Index returns assume reinvestment of all distributions and do not reflect any fees or expenses. It is not possible to invest directly in an index. Investment products: No bank guarantee I Not FDIC insured I May lose value 9

10 Small-cap stocks: M&A takeover targets? NUMBER OF DEALS, 1/1/01 1/31/11 Small-cap stocks could be the beneficiaries of mergers & acquisitions activity, as large, cash-rich companies often seek to take over smaller companies to find new catalysts for revenue growth, combined cost synergies or access to products/technologies. 62,819 Average takeover premium has equalled 29% ,399 2,157 $10 Billion $5-10 Billion $1-5 Billion $ Million Less than $500 Million Source: Bloomberg as of 1/31/11. Investment products: No bank guarantee I Not FDIC insured I May lose value 10

11 Investors are underallocated to small-cap stocks Despite the compelling investment opportunities, US inventors have only a minor allocation to small-cap stocks. ONLY 3.81% OF ALL MUTUAL FUND ASSETS ARE INVESTED IN SMALL-CAP STOCKS (AS OF 12/31/10) All Lipper MF assets All Lipper small-cap MF assets Source: Lipper and Simfunds as of 12/31/10. Investment products: No bank guarantee I Not FDIC insured I May lose value 11

12 DWS Global Small Cap Growth Fund Investment process and philosophy Investment products: No bank guarantee I Not FDIC insured I May lose value

13 Product differentiators Three dimensions of flexibility The flexibility to invest anywhere in the world The flexibility to invest in different styles of growth The flexibility to invest across many market-capitalization ranges (micro-cap, small-cap and mid-cap) Four building blocks of growth Tactically shifting between building blocks of growth to meet changing market conditions helps the investment team balance growth and risk in the portfolio Low turnover Investment products: No bank guarantee I Not FDIC insured I May lose value 13

14 Dedicated investment team leverages global platform Worldwide coverage, local expertise: 11-member team leverages the insights of DeAM s investment professionals (all data as of 12/31/10) Blue = years with firm Black = years in industry Joseph Axtell, CFA, portfolio manager (9, 25) Global sector analysts Regional analysts Sector portfolio managers Rafaelina M. Lee energy, materials industrials (10, 26 ) Peter Barsa consumer (11, 11) Nataly Yackanich, CFA financials, business services (5, 9) Reid Galas Asian small-cap (2, 10) Leefin Lai, CFA health care PM (9, 18) Michael Seiman portfolio analyst (6, 6) Peeyush Mittal materials, industrials (1, 1) Michael Sesser health care (1, 1) Raik Hoffman, European small-cap (12, 12) Clark Chang technology PM (3, 10) Investment products: No bank guarantee I Not FDIC insured I May lose value 14 Pag

15 Philosophy and approach We seek to add value through our information advantage locally based analysts help discover new and innovative small-cap growth companies. Our philosophy We believe that bottom-up research and strategic allocation across the four building blocks of growth can lead to attractive risk-adjusted returns. Our approach Enhance alpha potential while managing risk: We strategically allocate the portfolio s assets across the four building blocks of growth: stable growth, growth at value prices, explosive growth and contingent growth. Expand our investment universe: With the flexibility to invest in a wide range of styles, market caps and regions, we have a larger universe of alpha-generating opportunities. Participate in the long-term success of our holdings: Our long-term investment horizon permits us to participate in the success of quality growth stocks as they move from the small- to mid- to large-cap categories. Alpha is excess performance over the capital asset pricing model (CAPM) required rate of return (RR), which is a complex financial formula designed to predict an investment s performance. Investment products: No bank guarantee I Not FDIC insured I May lose value 15

16 Adhere to a disciplined, repeatable process We seek to identify compelling growth opportunities and conduct rigorous research to construct a well-diversified portfolio Begin with 7,600 stocks Sourcing opportunities Internal global network of portfolio managers and analysts Meetings with company management Meetings with sell-side analysts Quantitative screens Fundamental analysis Qualitative scoring Analyze company fundamentals Develop investment thesis Determine upside/downside potential Classify company by growth category (building blocks of growth) Risk management Portfolio construction Diversify strategically according to conviction levels and risk assessment Maintain a balance and diversity of growth characteristics Manage for long-term growth Investment products: No bank guarantee I Not FDIC insured I May lose value 16

17 Qualitative company scoring 1. Management quality 2. Competitive positioning 3. Earnings stability 4. Innovation 5. Industry dynamics 6. Balance sheet strength Worst Best Investment products: No bank guarantee I Not FDIC insured I May lose value 17

18 Balancing growth and risk in portfolio construction By strategically adjusting exposure across the four building blocks of growth, we seek to manage risk and outperform over time Four building blocks of growth Stable growth Repeatable revenue >>> earnings visibility Growth at value prices Market perception change possible High/explosive growth High risk and return potential Contingent growth Catalyst required Typical range 40% 60% 15% 35% 10% 20% 10% 20% Investment products: No bank guarantee I Not FDIC insured I May lose value 18

19 Portfolio construction Stock selection drives regional and sector weights Buy criteria Stocks meets market capitalization criteria Stocks satisfies business analysis and growth criteria Stocks satisfies relevant valuation criteria Growth and risk are balanced with the four building blocks of growth Sell discipline Valuation meets price targets Thesis violation or fundamentals change Market-capitalization growth potential is fulfilled Stocks can be replaced with highergrowth-potential candidate Goal is to capture growth potential Research dictates when we sell Investment products: No bank guarantee I Not FDIC insured I May lose value 19

20 Positioning: DWS Global Small Cap Growth Fund Strategically allocates across growth Contingent growth High/explosive growth Growth at value prices Stable growth 70% 60% 50% 40% 30% 20% 10% 0% Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Source: DeAM, as of 12/31/10. Composition subject to change. Investment products: No bank guarantee I Not FDIC insured I May lose value 20

21 Important information OBTAIN A PROSPECTUS To obtain a summary prospectus, if available, or prospectus, download one from talk to your financial representative or call (800) We advise you to carefully consider the product s objectives, risks, charges and expenses before investing. The summary prospectus and prospectus contain this and other important information about the investment product. Please read the prospectus carefully before you invest. Investment products offered through DWS Investments Distributors, Inc. Advisory services offered through Deutsche Investment Management Americas, Inc. DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company. DWS Investments Distributors, Inc. 222 South Riverside Plaza Chicago, IL inquiry.info@dws.com Tel (800) DWS Investments Distributors, Inc. All rights reserved. (3/11) R Investment products: No bank guarantee I Not FDIC insured I May lose value 21