Global Markets Insights

Global Markets Insights Inefficiencies and opportunities in today s fixed-income markets

Agenda Today s fixed-income asset-allocation challenge 1 Volatility expectations 2 Correlation expectations 3 Return expectations Interest rates Inflation 1 Inefficiencies and opportunities in the fixed-income markets Short-duration bonds Floating-rate loans High-yield bonds Municipal bonds THE ASSET ALLOCATION CHALLENGE 2 3 2

Risk information Deutsche Floating Rate Fund: If affiliates of the Advisor participate in the primary and secondary market for senior loans, legal limitations may restrict the fund s ability to participate in restructuring or acquiring some senior loans. Bond and loan investments are subject to interest-rate, credit, liquidity and market risks to varying degrees. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investments in lower-quality ("junk bonds") and non-rated securities present greater risk of loss than investments in higher-quality securities. Floating rate loans tend to be rated below investment grade. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Investing in foreign securities presents certain risks, such as currency fluctuations, political and economic changes, and market risks. In certain situations, it may be difficult or impossible to sell an investment at an acceptable price. As interest rates change, issuers of higher (or lower) interest debt obligations may pay off the debts earlier (or later) than expected causing the fund to reinvest proceeds at lower yields (or be tied up in lower interest debt obligations). The fund may lend securities to approved institutions. See the prospectus for details. Deutsche High Income Fund: Bond investments are subject to interest-rate, credit, liquidity and market risks to varying degrees. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investments in lower-quality ("junk bonds") and non-rated securities present greater risk of loss than investments in higher-quality securities. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. The fund may lend securities to approved institutions. See the prospectus for details. Deutsche municipal suite: Bond investments are subject to interest-rate, credit, liquidity and market risks to varying degrees. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investments in lower-quality ("junk bonds") and non-rated securities present greater risk of loss than investments in higher-quality securities. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. The fund invests in inverse floaters, which are derivatives that involve leverage and could magnify the fund's gains or losses. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. Deutsche Intermediate Tax/AMT-Free Fund, Deutsche Managed Municipal Bond Fund, Deutsche Strategic High Yield Tax Free Fund and Deutsche Short-Term Muni Bond Fund seeks income that is exempt from federal income taxes, a portion of the fund s distributions may be subject to federal, state and local taxes, including the alternative minimum tax. Deutsche California Tax-Free Income Fund, Deutsche Massachusetts Tax-Free Fund and Deutsche New York Tax-Free Fund seeks income that is exempt from its respective states and federal income taxes, a portion of the fund s distributions may be subject to federal, state and local taxes, including the alternative minimum tax. Deutsche Short Duration Fund: Bond investments are subject to interest-rate, credit, liquidity and market risks to varying degrees. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investments in lower-quality ("junk bonds") and non-rated securities present greater risk of loss than investments in higher-quality securities. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. The fund may lend securities to approved institutions. See the prospectus for details. Deutsche Ultra-Short Duration Fund: Bond and loan investments are subject to interest-rate, credit, liquidity and market risks to varying degrees. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Floating rate loans tend to be rated below-investment grade and may be more vulnerable to economic or business changes than issuers with investment-grade credit. Investments in lower-quality ("junk bonds") and non-rated securities present greater risk of loss than investments in higher-quality securities. 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 than the markets or 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. See the prospectus for details. For performance information about these funds, please visit www.deutschefunds.com. 3

Definitions Index and category definitions The Barclays 10+ Year U.S. Aggregate Index tracks the performance of domestic, taxable investment-grade bonds with average maturities of greater than 10 years. The Barclays 1 3 Year U.S. Aggregate Index tracks the performance of domestic, taxable investment-grade bonds with average maturities of one to three years. The Barclays 7-10 Year U.S. Aggregate Index tracks the performance of domestic, taxable investment-grade bonds with average maturities of seven to 10 years. The Barclays Corporate 1-Year Duration Index tracks the performance of the short term U.S. corporate bond market. The Barclays U.S. Credit Index, a subindex of the Barclays U.S. Government/Credit Index, tracks the performance of both corporate (industrial, utility and finance) and non-corporate (sovereign, supranational, foreign agency and foreign local government) sectors. The Barclays Municipal Bond Index tracks the performance of investment-grade, fixed-rate municipal bonds with maturities greater than two years. The Barclays U.S. Aggregate Index tracks the performance of the broad U.S. investment-grade, fixed-rate bond market, including both government and corporate bonds. The Barclays U.S. Treasury Index tracks the performance of U.S. Treasury obligations with a remaining maturity of one year or more. The Credit Suisse High Yield Index tracks the performance of the global highyield debt market. The Credit Suisse Leveraged Loan Index tracks outstanding balance and current spread over LIBOR for fully funded loan terms. The Ibbotson/SBBI Long-Term Government Bond Index tracks the performance of long-term government bonds. Morningstar Bank Loan portfolios primarily invest in floating-rate bank loans instead of bonds. Morningstar Emerging-Markets Bond portfolios invest more than 65% of their assets in foreign bonds from developing countries. Morningstar High-Yield Bond portfolios concentrate on lower-quality bonds, which are riskier than those of higher-quality companies. Morningstar/Ibbotson SBBI Intermediate-Term Government Capital Appreciation Index tracks the performance of intermediate-term government bonds. Morningstar/Ibbotson SBBI U.S. 1-Year Treasury Constant Maturity Yield Index is a custom index set to measure the performance of U.S. Treasuries with maturities of one year. Morningstar Intermediate Term Bond portfolios invest primarily in corporate and other U.S., investment-grade issues and typically have durations of 3.5 to 6.0 years. Morningstar Intermediate Government portfolios have at least 90% of their bond holdings in bonds backed by the U.S. government or by government-linked agencies. Morningstar Muni National Intermediate portfolios invest in bonds issued by state and local governments and have durations between 4.5 and 7 years. Morningstar World Bond portfolios invest 40% or more of their assets in foreign bonds. Morningstar Ultrashort Bond portfolios invest primarily in investment-grade U.S. fixed-income issues and have durations typically of less than one year. Morningstar Long Bond portfolios invest primarily in corporate and other investment-grade U.S. fixed-income issues and typically have durations of more than 6.0 years. Morningstar Long Government portfolios have at least 90% in bonds backed by the U.S. government or by government agencies and have durations of more than 6.0 years. Morningstar Short Government portfolios have at least 90% in bonds backed by the U.S. government or by government agencies and have durations between 1.0 to 3.5 years. Morningstar Short-term bond portfolios invest primarily in corporate and other investment-grade U.S. fixed-income issues and typically have durations of 1.0 to 3.5 years. Morningstar Multisector-bond portfolios seek income by diversifying their assets among several fixed-income sectors, usually U.S. government obligations, U.S. corporate bonds, foreign bonds, and high-yield U.S. debt securities. Morningstar Inflation-protected bond portfolios invest primarily in debt securities that adjust their principal values in line with the rate of inflation. These bonds can be issued by any organization, but the U.S. Treasury is currently the largest issuer for these types of securities. Morningstar Nontraditional Bond category contains funds that pursue strategies divergent in one or more ways from conventional practice in the broader bond -fund universe. The Russell 2000 Index tracks the performance of the 2,000 smallest stocks in the Russell 3000 Index. The S&P 500 Index tracks the performance of 500 leading U.S. stocks and is widely considered representative of the U.S. equity market. The S&P/LSTA Leveraged Loan Index tracks outstanding balance and current spread over LIBOR for fully funded loan terms. Index and category returns assume reinvestment of all distributions. Index and category returns do not reflect fees or expenses and it is not possible to invest directly in an index or category. 4

Definitions (continued) Financial terms A basis point is one one-hundredth of a percentage point. Correlation refers to how securities perform in relation to one another. A 1.0 correlation indicates that two security types move in exactly the same direction. A 1.0 correlation indicates movement in exactly opposite directions. A zero correlation implies no relation in the movements. Credit quality is a measure of a bond issuer s ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA, and so forth. The lower the rating, the higher the probability of default. Debt-to-GDP ratio is the ratio of government (or sometimes private) debt to gross domestic product (GDP), which is the value of all goods and services produced in an economy. Duration is a measure of the sensitivity of a bond s price to changes in interest rates and is measured in years. The federal funds rate is the interest rate, set by the U.S. Federal Reserve Board, at which banks lend money to each other, usually on an overnight basis. Gross domestic product (GDP) is the value of all goods and services produced by a country s economy. Muni-to-U.S.-Treasury yield ratio is the ratio of a municipal bond yield to a U.S. Treasury yield. Standard deviation is often used to represent the volatility of an investment. It depicts how widely an investment s returns vary from the investment s average return over a certain period. Yield ratio is a comparison of the expected yield of one bond to the expected yield of another. Yield spread refers to the excess yield various bond sectors offer over U.S. Treasuries with similar maturities. When spreads widen, yield differences are increasing between bonds in the two sectors being compared When spreads narrow, the opposite is true. Yield to worst is the lowest potential yield that can be received on a bond without the issuer actually defaulting. 5

Global markets insights Inefficiencies in today s fixed-income markets

1 2 3 Fixed-income investors face additional headwinds with historically low interest rates 10-year U.S. Treasury yield (%) 18% Time period 6/30/54 4/30/70 Yields 12/99 9/15 16% Rise in interest rates 5.01% Cash 5.33% 0.00% 14% Bond cumulative principal return 20.32% Short-term bonds 6.50% 1.00% 12% Intermediate-term bonds 7.49% 2.89% 10% 8% 6% 4% 2% 0% Apr-53 Dec-58 Aug-64 Apr-70 Dec-75 Aug-81 May-87 Jan-93 Sep-98 May-04 Jan-10 Sep-15 Bond cumulative principal returns by decade 12.67% 6.99% 24.22% 12.06% 10.46% 3.71% 1950s 1960s 1970s 1980s 1990s 2000s Source: Source: Federal Reserve, Morningstar and Barclays as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Performance over other time periods might not be as favorable. Asset class representation is as follows: interest rates, 10-year U.S. Treasury; bonds, Morningstar/Ibbotson SBBI Intermediate-Term Government Capital Appreciation Index; cash, three-month U.S. Treasury bill yield; short-term bonds, Barclays U.S. Aggregate 1-3 Year Index yield to worst; intermediate-term bonds, Barclays U.S. Aggregate 7-10-Year Index yield to worst. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. 7

1 2 3 Interest-rate volatility remains elevated Fixed-income asset classes during recent interest-rate environments (12/18/08 9/30/15) 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Rates rise 190 bps (12/18/08 6/10/09) Rates fall 160 bps (4/5/10 10/08/10) Rates rise 131 bps (10/12/10 2/8/11) Rates fall 221 bps (2/9/11 7/24/12) Rates rise 155 bps (7/25/12 9/5/13) Rates fall 136 bps (1/1/14 2/2/15) Rates rise 27 bps (2/3/15 9/30/15) 0.0% Dec-08 Sep-09 Jun-10 Mar-11 Dec-11 Sep-12 Jun-13 Mar-14 Dec-14 Sep-15 While the U.S. Federal Reserve Board has held the federal funds rate steady since 12/18/08, market rates have shown high volatility Name Returns during rising rates Returns during falling rates U.S. Treasuries 4.03% 8.57% Floating-rate loans 11.78% 2.46% Short-term bonds 0.65% 1.76% Intermediate-term bonds 3.12% 11.57% High-yield bonds 10.40% 5.08% Ultra-short duration bonds 1.27% 1.07% Source: Morningstar as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only. Asset-class representation is as follows: U.S. Treasuries, Barclays U.S. Treasury Index; floating-rate loans, S&P/LSTA Leveraged Loan Index; short-term bonds, Barclays 1 3 Year U.S. Aggregate Index; intermediate-term bonds, Barclays 7-10 Year U.S. Aggregate Index; high-yield bonds, Credit Suisse High Yield Index; ultra-short duration bonds, Barclays Corporate 1-Year Duration Index. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Fixed -income investments are subject to interest-rate risk, and their value will decline as interest rates rise. 8

1 2 3 Investors fixed-income allocations aren t prepared to deal with today s volatility and low yields Assets in current taxable U.S. fixed-income mutual fund Morningstar categories 39.87% Intermediate-Term Bonds had the highest net flows of any Morningstar category over five of the past seven calendar years (2008 2014); Foreign Large Blend took the lead in 2014. Intermediate-Term Bond has more assets than the High-Yield Bond, Intermediate Government, Bank Loan and Ultrashort Bond categories combined Category YTD 2015 net new flows Intermediate-Term Bond $25,377,042,625 High-Yield Bond $6,123,519,561 Bank Loan $10,742,262,713 Ultrashort Bond $4,862,702,777 11.25% 9.91% 7.90% 6.75% 5.66% 4.11% 3.73% 3.16% 2.79% 2.14% 1.62% 0.73% 0.37% Intermediate -Term Bond Short-Term Bond High Yield Bond World Bond Multisector Bond Nontraditional Bond Bank Loan Intermediate Government Inflation-Protected Bond Ultrashort Bond Emerging Markets Bond Short Government Long-Term Bond Long Government Source: Morningstar as of 9/30/15. Numbers may not equal 100% due to rounding. It is not possible to invest directly in a category. 9

1 2 3 Floating-rate loans and high-yield bonds offer a potential measure of protection from higher market rate volatility Total return of asset classes when interest rates have risen by 1% or more (5/1/93 9/30/15) 10.08% 8.17% 1.89% 1.79% 1.45% 4.66% Floating-rate loans High-yield bonds Short-term bonds Ultra-short-term bonds Intermediate-term bonds Long-term bonds Source: Morningstar as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Performance over other time periods might not be as favorable. Interest rates are represente d by the 10-year U.S. Treasury. Asset class representation: floating-rate notes, Credit Suisse Leveraged Loan Index; high-yield bonds, Credit Suisse High Yield Index; ultra-short bonds, Morningstar/Ibbotson SBBI U.S. 1- Year Treasury Constant Maturity Yield Index; short-term bonds, Barclays 1-3 Year U.S. Aggregate Index; intermediate-term bonds, Barclays 7-10 Year U.S. Aggregate Index; long-term bonds, Barclays 10+ Year U.S. Aggregate Index. Index returns do not reflect fees or expenses. It is not possible to in vest directly in an index. Performance for other time periods may not be as favorable. Index returns do not reflect fees or expenses. It is not possible to invest directly in an index. Performance for other time periods may not be as favorable. Fixed-income investments are subject to interest-rate risk, and their value will decline as interest rates rise. Because of their shorter maturities, short-term bonds are typically less vulnerable to rising interest rates than longer-term bonds. Floating-rate loans are typically more vulnerable and more sensitive to credit and default risks. Floatingrate loans are debt instruments with a variable rate that generally resets every 30 to 90 days. 10

1 2 3 Higher fixed-income correlations have led to decreased diversification benefits Fixed-income investment correlations to equities (as of 9/30/15) Five-year correlation to high-yield bonds Intermediate-term bonds 0.48 1.00 0.80 0.69 Intermediate-government 0.01 0.76 0.63 0.52 1.00 0.49 0.40 0.12 0.12 0.13 0.08 0.26 Equities High-yield bonds Emerging-market bonds World bonds Intermediate-term bonds Municipal bonds Intermediate-term government bonds 5-year correlation 10-year correlation Traditional intermediate-term bond funds have historically shown a high correlation to equities, while government investments, such as municipal bonds, have shown low to negative correlation to equities, leading to potentially greater diversification benefits Source: Morningstar as of 9/30/15. Past performance is historical and does not guarantee future results. Diversification neither assures profits or guarantees against loss. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Asset-class representation is as follows: equities, S&P 500 Index; highyield bonds, Morningstar High-Yield Bond category; emerging-market bonds, Morningstar Emerging Markets Bond category; world bonds, Morningstar World Bond category; intermediate-term bond, Morningstar Intermediate Bond category; municipal bonds, Morningstar Muni National Intermediate category; Intermediate Government, Morningstar Intermediate Government category. Correlation refers to how securities perform in relation to one another. A 1.0 correlation indicates that two security types move in exactly the same direction. A 1.0 correlation indicates movement in exactly opposite directions. A zero correlation implies no relation in the movements. The values of equity investments are more volatile than those of other securities. Fixed-income investments are subject to interest-rate risk, and their value will decline as interest rates rise. 11

1 2 3 High-yield bonds are an attractive income option Yields to worst on various fixed-income investments and equity yields (as of 9/30/15) 8.39% High-yield bonds offered investors 1% more return with 35% less volatility than large-cap equities for the 10-year period ended 9/30/15. 2.31% 2.25% 1.53% 1.36% High-yield bonds Investment-grade bonds U.S. large-cap equities U.S. small-cap equities U.S. Treasuries Name 1-year return 5-year return 10-year return High-yield bonds 3.96% 5.93% 6.89% Investment-grade bonds 2.94% 3.10% 4.64% U.S. large-cap equities 0.61% 13.34% 6.80% U.S. Treasuries 3.76% 2.55% 4.35% U.S. small-cap equities 1.25% 11.73% 6.55% Source: Morningstar, Barclays, Credit Suisse, Russell and S&P as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Performance over other time periods might not be as favorable. Asset-class representation is as follows: high-yield bond bonds, Credit Suisse High Yield Bond Index; investment-grade bonds, Barclays U.S. Aggregate Index; U.S. large-cap equities, S&P 500 Index; U.S. small-cap equities, Russell 2000 Index; U.S. Treasuries, Barclays U.S. Treasury Index. Equity index returns include reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Performance over other time periods might not be as favorable. The values of equity investments are more volatile than those of other securities. Fixed-income investments are subject to interest-rate risk, and their value will decline as interest rates rise. 12

1 2 3 High-yield bonds have provided attractive returns High-yield bonds have provided equity type returns with less volatility (1/1/86 9/30/15) Average annual returns Volatility 15.22% 8.64% 10.21% 7.89% High-yield bonds Equities High-yield bonds Equities High-yield bonds provided 85% of the returns with 52% of the volatility of large-cap equities over the past 30 years. Source: Morningstar as of 9/30/15. Performance is historical and does not guarantee future results. Diversification neither assures profits or guarantees against loss. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Performance over other ti me periods might not be as favorable. Asset class representation and standardized performance are as follows: high-yield bonds, Credit Suisse High Yield Bond Index (one-year return/volatility: 3.96%/5.23%; 5-year return/volatility: 5.93%/5.71%, 10-year return/volatility: 6.89%/9.67%); equities, S&P 500 Index (one-year return/volatility: 0.61%/11.01%, five-year return/volatility: 13.34%/11.51%; 10-year return/volatility: 6.80%/14.90%). Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Performance over other time periods might not be as favorable. The values of equity investments are more volatile than those of other securities. Fi xed-income investments are subject to interest-rate risk, and their value will decline as interest rates rise. 13

Global Markets Insights Opportunities in today s taxable fixed-income markets

Deutsche funds have historically offered a measure of protection from recent rising interest rates Deutsche fund performance during recent rising-interest-rate environment 8.00% 6.00% 6.41% Return, 7/25/12 9/5/13 Return, 5/2/13 9/5/13 4.00% 2.00% 0.00% -2.00% -4.00% -6.00% 0.43% 3.08% 0.64% Between 7/25/12 and 9/5/13, the 10-year U.S. Treasury moved higher by 1.55%, from 1.43% to 2.98%. Deutsche Floating Rate Fund, Class S Deutsche Ultra-Short Duration Fund, Class S 2.10% 0.03% Deutsche Short Duration Fund, Class S 3.20% Between 5/2/13 and 9/5/13 the 10-year U.S. Treasury moved higher by 1.32%, from 1.66% to 2.98%. 4.85% Intermediate-term bonds 4.48% U.S. Treasuries Source: U.S. Federal Reserve and Morningstar as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Performance over other time periods might not be as favorable. Asset class representation is as follows: U.S. Treasuries, Barclays U.S. Treasury Index; intermediate-term bonds, Barclays U.S. Aggregate Index. Fixed-income investments are subject to interest-rate risk, and their values will decline as interest rates rise. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Standardized fund perfo rmance is as follows: Deutsche Floating Rate Fund (Class S): 1-year, 0.82%; 5-year, 3.72%; 10-year, n/a; life of fund, 3.51%; Deutsche Ultra-Short Duration Fund (Class S), 1-year, 2.75%; 5-year, 1.25%; 10-year, 2.09%; life of fund, 3.56%; Deutsche Short Duration Fund (Class S): 1-year, 0.28%; 5-year, 1.50%; 10-year, 2.84%; life of fund, 3.86%. Gross/net expense ratios are as follows: Deutsche Short Duration Fund (Class S), 0.68%/0.55%; Deutsche Ultra-Short Duration Fund (Class S), 0.75%/0.75%; Deutsche Floating Rate Fund (Class S), 1.00%/0.86%. Deutsche Floating Rate Fund Class S shares and Deutsche Short Duration Fund Class S shares have a contractual waiver that runs through 9/30/16. Without a waiver, returns would have been lower and any rankings/ratings might have been less favorable. The Deutsche Ultra-Short Duration Fund 's performance prior to inception (2/28/03) reflects that of Class INST. Returns prior to inception reflect the original share class performance, adjusted for higher operating expenses and/or the maximum sales charge. 4.05% 15

Low correlation to U.S. Treasuries gives Deutsche funds a potential measure of protection from higher interest rates Correlation of Deutsche fixed income product suite to U.S. Treasuries (7/1/10 9/30/15) U.S. Treasuries 1.00 Intermediate-term bonds 0.91 Deutsche Short Duration Fund 0.24 Deutsche Floating Rate Fund 0.37 Deutsche Ultra-Short Duration Fund 0.43 Source: Morningstar as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only. Correlation refers to how securities perform in relation to one another. A 1.0 correlation indicates that two security types move in exactly the same d irection. A 1.0 correlation indicates movement in exactly opposite directions. A zero correlation implies no relation in the movements. The values of equity investments are mo re volatile than those of other securities. Fixedincome investments are subject to interest-rate risk, and their values will decline as interest rates rise. Asset-class representation: U.S. Treasuries, Barclays U.S. Treasury Index; intermediate-term bonds, Barclays U.S. Aggregate Index. 16

Deutsche taxable fixed-income options Deutsche Short Duration Fund (PPIAX) Deutsche Ultra-Short Duration Fund (SDUAX) Deutsche Floating Rate Fund (DFRAX) Deutsche High Income Fund (KHYAX) Objective Utilizes a multisector approach that can move between fixedincome investments while maintaining a portfolio duration of three years or less Utilizes a flexible strategy that can move between a fixedincome investments while maintaining a portfolio duration of one year or less Invests primarily in senior secured loans in an attempt to produce attractive income with limited to no duration exposure Invests primarily in noninvestment grade bonds to maximize yield, while seeking to minimize defaults and volatility Duration and maturity 0.94 years 2.49 years 0.08 years 2.96 years n/a n/a 4.10 years 5.12 years Talking points Class S shares returned 6.54%, 2.56% and 5.73% during the last period in which the U.S. Federal Reserve raised rates (2004, 2005 and 2006) putting it in the top 1%, 6% and 5% of its Morningstar category during those years, respectively Maximum 10% non-investmentgrade exposure Morphed on 4/15/11 Managed by a team of five senior portfolio managers averaging 24 years of industry experience Maximum 50% non-investmentgrade exposure Team of two senior portfolio managers average 35 years of experience Supported by 21 analysts with 17 years of industry experience, on average Team manages $4.5 billion in loan assets (as of 6/30/15). Class INST shares rank in the top 35% (221/627), 25% (133/534) and 35% (127/362) for the three, five and ten-year periods, respectively (based on total returns in the High Yield Bond category) Class INST shares ranked 41% or better in six of the past seven calendar years Team of five portfolio managers average 24 years of experience Class INST shares ranked 72% in 2009 (when the fund returned more than 41%) because the team does not invest in highly distressed debt Source: and Morningstar as of 9/30/15. Performance is historical and does not guarantee future results. Deutsche High Income Fund (Class INST) returns as of 9/30/15: 1-year, 3.68%; 3-year, 3.32%; 5-year, 5.90%; 10-year, 6.23%; life of fund, 8.25%. Ratings and rankings are historical and do not guarantee future results. Ratings and rankings of other share classes may vary. Ratings are based on risk-adjusted returns, rankings on total returns. See slide 16 for full Morningstar ratings and rankings. 17

Morningstar ratings and rankings Overall 1-year 3-year 5-year 10-year Deutsche Short Duration (Class S, Short-Term Bond category) Ratings 3 stars n/a 3 stars 3 stars 3 stars Rankings n/a 85% (478/557) 35% (165/475) 46% (184/401) 54% (150/276) Deutsche Ultra-Short Duration Fund (Class S, Non-traditional Bond category) Ratings 2 stars n/a 3 stars 2 stars 2 stars Rankings n/a 61% (268/436) 56% (136/240) 68% (99/144) 89% (44/49) Deutsche Floating Rate Fund (Class S, Bank Loan category) Ratings 3 stars n/a 3 stars 3 stars n/a Rankings n/a 77% (192/247) 74% (145/195) 62% (84/134) n/a Deutsche High Income Fund (Class INST, High Yield Bond category) Ratings 3 stars n/a 3 stars 4 stars 3 stars Rankings n/a 56% (435/771) 35% (221/627) 25% (133/534) 35% (127/362) Source: Morningstar as of 9/30/15. Rankings and ratings are historical and do not guarantee future results. Rankings are based on a fund s total return with distributions reinvested. Ratings are based on risk-adjusted and, unless load-waived, from load-adjusted performance. The Overall rating for a fund is a weighted average of the ratings for the time periods indicated. Rankings and ratings of other classes may vary. 18

Global markets insights Opportunities in today s municipal bond markets

Monthly muni market returns (in %) Mutual fund flows can have a large impact on muni bond prices During 2013, municipal-bond performance was affected by investors redeeming from mutual funds This trend has been seen in the past, most notably in late 2010 and early 2011 When fund flows level off, the market should see a greater level of stability Monthly muni market return vs. fund flows (9/1/08 9/30/15) 4.0% $15 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% $10 $5 $0 -$5 -$10 -$15 Monthly muni bond flows (in billions) -6.0% -$20 Sep-08 Apr-09 Nov-09 Jun-10 Jan-11 Aug-11 Mar-12 Oct-12 May-13 Dec-13 Jul-14 Feb-15 Sep-15 Monthly muni market return (LHS) Monthly municipal bond fund flows (RHS) Source: Bloomberg, Municipal Market Data and as of 9/30/15. Past performance is no guarantee of future results. For illustrative purposes only and is not meant to represent the performance of any fund or product. 20

Relative value: ratio of the 10-year AAA-rated muni to the 10-year U.S. Treasury still above long-term average Because municipal bonds offer tax-exempt income, investors have historically demanded less income from AAA-rated munis than they have from U.S. Treasuries On average, a 10-year AAA muni has yielded 85% of a 10-year U.S. Treasury Currently, many AAA rated munis yield more than 98% of a comparable maturity, signaling value in munis 10-year AAA-rated muni to U.S. Treasury ratio (1/8/88 9/30/15) 2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 Jan-88 Jul-90 Jan-93 Jul-95 Feb-98 Aug-00 Feb-03 Aug-05 Mar-08 Sep-10 Mar-13 Sep-15 Source: Bloomberg, Municipal Market Data and as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Performance over other ti me periods might not be as favorable. 21

What do above average ratios mean going forward? If the AAA-rated muni to U.S. Treasury ratios normalize, U.S. Treasury rates could potentially move higher while muni rates remain relatively stable The chart below shows the hypothetical difference in yield between 30-year U.S. Treasury bonds and 30-year AAA muni bonds in both the current environment and in a hypothetical scenario, where the 30-year U.S. Treasury moves to 3.20% (our current CIO s view), but the AAA muni to U.S. Treasury ratio normalizes to 93%. Municipal vs. investment grade corporate bond yields (1/8/88 9/30/15) Current scenario 3.08% 2.92% 3.08%/2.92% = 105% ratio Hypothetical scenario 2.98% 3.20% 2.98%/3.20% = 93% ratio 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 30-year AAA muni yield 30-year U.S. Treasury yield Maturity Current AAA muni rate Current U.S. Treasury rate Ratio Historic ratio 10-year 2.08% 2.13% 97.7% 85% 30-year 3.08% 2.92% 105.5% 93% Sources: Municipal Market Data and as of 9/30/15. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only and does not represent any specific Deutsche AWM products. Performance over other time periods mi ght not be as favorable. Some of this data is hypothetical and does not represent the performance of an actual investment product. 22

Rising taxes make the muni exemption more valuable Higher taxes make the muni exemption more valuable, as demonstrated below, using a 3% tax-exempt yield for comparison Tax changes in 2013, which brought the top tax bracket to 39.6% in federal tax and 3.8% on investment income, remain in place.* Municipal bonds are exempt from both of these. Municipal bond yields are attractive given higher taxes 6% 5% 4.62% 5.30% 4% 3% 3.00% 3.00% 2% 1% 0% 2012 2014 Muni yield Tax-equivalent yield Source:. Municipal yield of 3.0% is for illustrative purposes only and does not represent any product. * Includes 3.8% Medicare surtax. 23

2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 Since the recession, municipal revenues have increased and defaults have declined Cumulative default rates (2007 2014) After falling for five consecutive quarters during the recession, state tax collections rose in 19 out of 20 quarters through Q4 2014. 15% 10% 5% 0% -5% -10% -15% -20% $8.5 $7.7 $3.2 $2.1 $3.3 $3.8 $2.8 $9.0 * $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 Aggregate par value of defaults ($ billions) Percent change in state tax collections vs. same quarter year ago * A significant portion of unique defaults was from Detroit bankruptcy, the largest Chapter 9 default in U.S. history Source for line graph: Rockefeller Institute of Government and as of 12/31/14. Source for bar chart: ISA and as of 12/31/14. Performance is historical and does not guarantee future results. This chart is for illustrative purposes only. Defaults are annual. 24

1900 1902 1904 1906 1908 1910 1912 1914 1916 1918 1920 1922 1924 1926 1928 1930 1932 1934 1936 1938 1940 1942 1944 1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 While some municipalities face budget challenges, the level of debt is not a primary concern Municipal debt-to-gdp ratio has been relatively stable for over 50 years (1900 2014) 140% 120% 100% 80% 60% 40% 20% 0% Federal debt State debt Local debt Source: www.usgovernmentspending.com as of 12/31/14. State debt and Local debt were guesstimated for 2014. 25

Return Many Deutsche muni funds have produced higher returns with less volatility than peers Volatility-adjusted returns of Morningstar categories and Deutsche funds (10 years as of 9/30/15) 8% Deutsche Managed Municipal Bond Fund 5.23% volatility / 4.74% return Deutsche Strategic High Yield Tax-Free Fund 7.59% volatility / 4.51% return 6% Deutsche Intermediate Tax/AMT Free Fund 3.89% volatility / 3.90% return 4% 2% Deutsche Short-Term Municipal Bond Fund 1.61% volatility / 1.92% return Muni National Short 2.07% volatility / 2.37% return Muni National Long Muni National Intermediate 5.45% volatility / 4.12% return 4.20% volatility / 3.78% return High Yield Muni 7.75% volatility / 3.75% return 0% 0% 2% 4% 6% 8% Volatility Fund vs. category % of category return % of volatility return Deutsche Managed Municipal Bond Fund vs. Muni National Long 115% 96% Deutsche Strategic High Yield Tax-Free Fund vs. High Yield Muni 120% 98% Deutsche Intermediate Tax/AMT Free Fund vs. Muni National Intermediate 103% 93% Deutsche Short-Term Municipal Bond Fund vs. Muni National Short 81% 78% Source: Morningstar as of 9/30/15. Performance is historical and does not guarantee future results. Performance over other time periods might not be as favorable. Funds are Class A. Data is for the 10-year period. See slide 25 for performance information. Deutsche municipal bond funds are exempt from federal income tax but state and local taxes may apply. 26

Standardized performance Fund 1-year 5-year 10-year Life of fund Inception date Expense ratio (gross/net) Deutsche Strategic High Yield Tax-Free Fund A (unadjusted for sales charges) 3.15% 4.47% 4.51% 5.91% 5/1/00 1.00%/0.93% A (adjusted for the maximum 2.75% sales charge) 0.31% 3.89% 4.22% 5.81% 5/1/00 1.00%/0.93% Deutsche Managed Municipal Bond Fund A (unadjusted for sales charges) 2.96% 4.39% 4.74% n/a 6/11/01 0.81%/0.81% A (adjusted for the maximum 2.75% sales charge) 0.13% 3.81% 4.44% n/a 6/11/01 0.81%/0.81% Deutsche Intermediate Tax/AMT Free Fund A (unadjusted for sales charges) 1.95% 3.10% 3.90% 5.28% 6/11/01 0.79%/0.79% A (adjusted for the maximum 2.75% sales charge) 0.86% 2.53% 3.61% 5.19% 6/11/01 0.79%/0.79% Deutsche Short-Term Municipal Bond Fund A (unadjusted for sales charges) 0.31% 1.00% 1.92% 3.11% 2/28/03 0.90%/0.73% A (adjusted for the maximum 2.0% sales charge) 1.70% 0.59% 1.71% 3.01% 2/28/03 0.90%/0.73% Deutsche California Tax-Free Income Fund A (unadjusted for sales charges) 2.52% 4.74% 4.66% 6.70% 2/17/83 0.93%/0.90% A (adjusted for the maximum 2.75% sales charge) 0.30% 4.15% 4.36% 6.61% 2/17/83 0.93%/0.90% Deutsche New York Tax-Free Income Fund A (unadjusted for sales charges) 2.41% 3.52% 4.08% 5.72% 12/31/85 0.97%/0.88% A (adjusted for the maximum 2.75% sales charge) 0.40% 2.94% 3.79% 5.62% 12/31/85 0.97%/0.88% Deutsche Massachusetts Tax-Free Fund A (unadjusted for sales charges) 2.61% 3.63% 4.33% 5.96% 6/18/01 1.03%/0.97% A (adjusted for the maximum 2.75% sales charge) 0.21% 3.06% 4.04% 5.86% 6/18/01 1.03%/0.97% Source: Deutsche AWM as of 9/30/15 (for performance) and latest prospectus (for expense ratios). Performance is historical and does not guarantee future results. Investment return and principal fluctuate so your shares may be worth more or less when redeemed. Current performance may differ from data shown. Please visit www.deutschefunds.com for the fund's most recent month-end performance. Unadjusted returns do not reflect sales charges and would be lower if they did. Fund performance includes reinvestment of all distributions. Not all share classes are available to all investors. Deutsche Strategic High Yield Tax-Free Fund, Deutsche Managed Municipal Bond Fund, Deutsche Massachusetts Tax-Free Fund and Deutsche Intermediate Tax/AMT Free Fund s performance prior to inception reflects that of Class S. Deutsche Short-Term Municipal Bond Fund performance prior to inception reflects that of Class INST. Deutsche California Tax-Free Fund and Deutsche New York Tax-Free Fund has a contractual waiver that runs through 11/30/15. Deutsche Massachusetts Tax-Free Fund, Deutsche Strategic High Yield Tax Free Fund and Deutsche Short-Term Municipal Bond Fund has a contractual waiver that runs through 9/30/16. Without a waiver, returns would have been lower and any rankings/ratings might have been less favorable. See the prospectus for complete expense information. 27

Important information 2015 Morningstar, Inc. All rights reserved. Morningstar, Inc., shall not be responsible for investment decisions, damages or other losses resulting from use of this rating. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar risk-adjusted return measure that accounts for variation in a fund s monthly performance (including, unless loadwaived, the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in a category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fu nd within this scale and rated separately, which may cause slight variations in the distribution percentages.) OBTAIN A PROSPECTUS To obtain a summary prospectus, if available, or prospectus, download one from www.deutschefunds.com for more information regarding the fund s objectives, risks, charges and expenses. Investment products offered through DeAWM Distributors, Inc. Advisory services offered through Deutsche Investment Management Americas, Inc. represents the asset management and wealth management activities conducted by Deutsche Bank AG or any of its subsidiaries. Clients will be provided products or services by one or more legal entities that will be identified to clients pursuant to the contracts, agreements, offering materials or other documentation relevant to such products or services. DeAWM Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 www.deutschefunds.com rep@db.com Tel (800) 621-1148 2015 Deutsche Bank AG. All rights reserved. R-33920-3 (11/15) 28