NFJ International Value

Transcription

1 Allianz Global Investors City of Miami General Employees & Sanitation Employees Retirement NFJ International Value May 27, 2016 John Mowrey, CFA Director, Portfolio Manager Jennifer Evanko Managing Director, Senior Relationship Manager For use in one-on-one presentations NFJ

2 NFJ Investment Group As of March 31, 2016 Value platform for Allianz Global Investors Established manager with a proven investment strategy Disciplined value investment process Dividend paying companies Attractive valuations Risk management Team of 10 investment professionals with an average of 22 years industry experience NFJ Investment Strategies: $26.6bn 1 Small Cap Value International Value $4,884m $6,190m Large Cap Value $675m Mid Cap Value 100 $631m Global Dividend Value $228m All Cap Value $135m Mid Cap Value $95m International Small Cap Value $12m Emerging Markets Value $14m International Value II $44m Dividend Value $13,712m 1. NFJ Firmwide assets reflect $6.9bn managed on a non-discretionary basis. 2

3 NFJ International Value Team: Experienced value specialists NFJ International Value Ben J. Fischer, CFA (50/27) Managing Director, CIO NFJ Co-Lead Portfolio Manager M.B.A., New York University B.A., J.D., University of Oklahoma L. Baxter Hines, CFA (10/7) Managing Director Co-Lead Portfolio Manager M.B.A., University of Texas B.A., University of Virginia Portfolio Construction Team Paul A. Magnuson (30/23) Managing Director, Portfolio Manager/Analyst B.B.A., University of Nebraska Thomas W. Oliver, CFA, CPA (20/10) Managing Director, Portfolio Manager/Analyst M.B.A., B.B.A., University of Texas R. Burns McKinney, CFA (18/9) Managing Director, Portfolio Manager/Analyst M.B.A., The Wharton School, University of Pennsylvania B.A., Dartmouth College John R. Mowrey, CFA (9/9) Director, Portfolio Manager/Analyst M.B.A., Southern Methodist University B.A., Rhodes College Portfolio Product Specialist Team Stephen Haines (12/1) Director, Product Specialist M.B.A., Southern Methodist University B.B.A., Baylor University Krysta Hill (10/7) Assistant Vice President, Product Specialist Associate B.A., University of Pennsylvania Kris Marca, CFA (12/5) Assistant Vice President, Product Specialist Associate M.B.A., Texas Christian University B.A., University of Texas Numbers in parentheses reflect years of industry experience/years of tenure at AllianzGI US and affiliates and are updated twice a year, first quarter and third quarter. 3

4 NFJ International Value investment overview Discipline results in consistency and repeatability Dividends Valuations Price Momentum Invest exclusively in dividend paying companies Disciplined capital allocation Balance sheet quality Quality of earnings and cash flow Attractive valuation on relative and absolute measures Price/earnings Price/book Price/cash flow Additional relative metrics Stocks exhibiting poor price behavior at time of purchase are excluded from consideration Most attractive stocks have potential for greater weight in portfolio The diagrams and statements above reflect the typical investment philosophy applied to this strategy. There is no guarantee that a stock will continue to pay a dividend. 4

5 The Case for Dividends: Dividend Payers Provides Less Risk With Better Returns Than Non-Dividend Payers International Stocks Data from July 31, 1996 March 31, Russell Global xus DIV PAYERS Russell Global xus NON DIV PAYERS Russell Global xus EQW Compound Annual Growth Rate (CAGR) Annualized Standard Deviation Russell Global ex-us Universe Dividend Payers 7.71% 18.0% Russell Global ex-us Universe Non- Dividend Payers -1.97% 26.2% Russell Global ex-us Universe 5.84% 19.4% Source: Markit. Past performance is no guarantee of future results. July 31, 1996 is the start of the dividend/non-dividend payers data series For Internal & AGI Funds Board Use Only 5 5

6 International equity: Long-Term Returns By Valuation Are Persistent and Pervasive Period: December 1988 to December % 16% NFJ International Value targets low valuation equities 14% 12% 10% 8% 6% 4% 2% 0% D1 D2 D3 D4 D5 D6 D7 D8 D9 D10 Value Growth Source: Markit Research, World ex-us universe. The universe is deciled by forward P/E and rebalanced monthly. The returns shown in the graph are annualized and broken out by decile. 6

7 Allianz NFJ International Value: Three year rolling return Allianz NFJ International Value composite vs. MSCI EAFE Value Index IV Composite MSCI EAFE Value Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Source: evestment. evestment Alliance, LLC and its affiliated entities (collectively, evestment ) collect information directly from investment management firms and other sources believed to be reliable, however, evestment does not guarantee or warrant the accuracy, timeliness, or completeness of the information provided and is not responsible for any errors or omissions. A fee was paid to evestment Alliance for access to and use of the comparative analysis. The MSCI EAFE Value Index captures large and mid cap securities exhibiting overall value style characteristics across Developed Markets countries around the world, excluding the US and Canada. The performance shown above is gross and does not reflect the deduction of investment advisory fees. Past performance is not indicative of future results. The data above is supplemental information and supplements the NFJ International Value GIPS compliant presentation in the appendix. 7

8 2015 portfolio summary Securities Investment Trusts-NFJ International Value Trust As of December 31, 2015 Absolute Performance Contribution: Year-to-Date Top 5 Industry % Points Persimmon Consumer Discretionary 0.61 Imperial Tobacco Tobacco 0.52 Teva Pharmaceutical Drug Manufacturers 0.52 Mizuho Financial Banking 0.51 Svenska Cellulosa Paper 0.35 Bottom 5 Industry % Points Au Optronics Electronics Banco Bradesco Banking Volkswagen Automotive Royal Dutch Oil and Gas America Movil Wireless Contributors and Detractors do not represent all of the securities purchased, sold or recommended for advisory clients during the stated measurement period. Portfolio contributions are calculated by multiplying the portfolio weight by the rate of return during the measurement period. Performance of less than one year has not been annualized. Past performance is not indicative of future results. Source: IDS. The portfolio characteristics of the fund shown herein are calculated internally by Allianz Global Investors and may differ from official portfolio characteristics of the fund due to differences in accounting conventions. 8

9 NFJ Headwinds: Developed Outperformance vs. EM As of March 31, 2016 EAFE EM EM Value 10% 7.85% 5.75% 5% 2.68% 2.76% 0% 5% 2.88% 4.15% 6.01% 3.80% 5.44% 10% 7.87% 11.70% 12.11% 15% QTR 1 Yr 3 Yr 5 Yr Source: MSCI Index Gross Dividends ; 9

10 Emerging Markets Have Been Persistent Over Time Over rolling 3-year periods, EM outperforms EAFE 67% of periods with similar premiums As of March 31, 2016 MSCI EM MSCI EAFE: Rolling 3 Year Performance EM Outperforms EAFE Outperforms 50% 40% 30% 20% 10% 0% 10% 20% 30% Source: Source: MSCI Index Gross Dividends 10

11 International Market Cycles Through adherence to our philosophy and process we expect to outperform over the longer-term and over market cycles MSCI ACWI ex USA Peaks Troughs 300% June % October % 150% 100% 50% 0% March 2003 February % NFJ International Value Performance Over Market Cycles Mar 2003 Feb 2009 Nov 2007 Jun 2014 NFJ International Value Composite 11.6% 1.56% ACWI ex-usa 6.2% 0.30% ACWI ex-usa Growth 5.4% 0.27% ACWI ex-usa Value 6.9% 0.29% Source: MSCI, Allianz Global Investors. The chart above includes the returns of the NFJ International Value composite. The first period represents annualized returns from March 1, 2003 through February 28, The second period represents returns from November 1, 2007 through June 30, The MSCI returns represent the MSCI ACWI ex USA, MSCI ACWI ex USA Growth and MSCI ACWI ex USA Value for the same periods. The information above is supplemental information and supplements the NFJ International Value GIPS compliant presentation in the Appendix. The performance shown above is gross and does not reflect the deduction of investment advisory fees. Past performance is not indicative of future results. See additional disclosure at the end of this presentation. 11

12 Sector weightings Securities Investment Trusts-NFJ International Value Trust vs. MSCI EAFE Value Index As of March 31, 2016 Top Sector Weightings (%) Securties Investment Trusts-NFJ International Value Trust MSCI EAFE Value Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecom Services Utilities Cash & Equivalents See additional disclosure; Source: Allianz Global Investors 12

13 Region weightings Securities Investment Trusts-NFJ International Value Trust vs. MSCI EAFE Value Index As of March 31, 2016 Securties Investment Trusts-NFJ International Value Trust MSCI EAFE Value Asia/Pacific ex Japan Japan Europe ex U.K./Middle East United Kingdom North America Emerging Markets Cash & Equivalents See additional disclosure; Source: Allianz Global Investors 13

14 . Appendix 14

15 Performance review City of Miami General Employees & Sanitation Employees Retirement As of March 31, 2016 Annualized Performance (%) Inception Date: January 13, 2014 QTR 1 Year Since Inception City of Miami GESE MSCI EAFE MSCI EAFE Value Current Market Value Amount (USD) City of Miami GESE $16,176,542 All returns are net of fees and are annualized for periods longer than one year. Past performance is not indicative of future results. See additional disclosure at the end of this presentation. 15

16 NFJ Headwinds: Growth has Outperformed Value As of March 31, 2016 ACWI ex USA Value ACWI ex USA Growth 4% 2% 2.29% 1.96% 0% 2% 0.29% 0.23% 0.82% 0.48% 4% 6% 5.75% 8% 10% 12% 14% 11.83% QTR 1 Yr 3 Yr 5 Yr Source: MSCI Index Gross Dividends 16

17 Domestic Market Cycles Through adherence to our philosophy and process we expect to outperform over the longer-term and over market cycles 1400% S&P Peaks Troughs 1200% May % 800% March 2000 October % June % 200% August 1998 September 2002 February % 200% Annualized Performance (gross) Over Market Cycles Jul 98 Mar 00 Sep 98 Sep 02 Apr 00 Oct07 Oct 02 Feb 09 Nov 07 May 15 NFJ Dividend Value Composite 2.3% 6.1% 15.0% 3.2% 4.4% Russell 1000 Value 6.3% 0.8% 7.9% 0.7% 5.3% S&P % 2.6% 2.1% 0.3% 6.4% The information above is supplemental information and supplements the NFJ Dividend Value GIPS compliant composite presentation presented in the Appendix. The performance shown above is gross and does not reflect the deduction of investment advisory fees. Past performance is not indicative of future results. See additional disclosure at the end of this presentation. 17

18 NFJ investment team Ben J. Fischer, CFA Managing Director, CIO NFJ, Portfolio Manager Mr. Fischer is a portfolio manager, an analyst, a managing director and CIO of NFJ, an Allianz Global Investors company. He has 49 years of experience in portfolio management, investment analysis and research. Mr. Fischer is the product team co-lead for the NFJ Dividend Value and NFJ International Value investment strategies. He is also a member of the firm s US Executive Committee. Before founding NFJ in 1989, Mr. Fischer was chief investment officer for institutional and fixed-income strategies, and a senior vice president and a senior portfolio manager at NationsBank, which he joined in Before that, he was a securities analyst at Chase Manhattan Bank and Clark, Dodge. Mr. Fischer has a B.A. in economics and a J.D. from The University of Oklahoma, and an M.B.A. from New York University, Leonard N. Stern School of Business. Mr. Fischer is a CFA charterholder. John L. Johnson, CFA Managing Director, Analyst Mr. Johnson is an analyst and a managing director with NFJ, an Allianz Global Investors company. He has 51 years of investment-industry experience. Before founding NFJ in 1989, Mr. Johnson was the co-chief investment officer, the director of research and a senior vice president at NationsBank, which he joined in He has a B.A. in finance from Texas Tech University and an M.L.A. from Southern Methodist University. Mr. Johnson is a CFA charterholder. Mr. Johnson transitioned into a part-time role in January Paul A. Magnuson Managing Director, Portfolio Manager/Analyst Mr. Magnuson is a portfolio manager, an analyst and a managing director with NFJ, an Allianz Global Investors company. He is the product team lead for the NFJ Mid Cap Value 100 strategy and co-lead for the NFJ Small Cap Value strategy. Mr. Magnuson has 30 years of investment-industry experience. Before joining the firm in 1992, he was an assistant vice president at NationsBank, which he joined in Mr. Magnuson has a B.B.A. in finance from the University of Nebraska. Thomas W. Oliver, CFA, CPA Managing Director, Portfolio Manager/Analyst Mr. Oliver is a portfolio manager, an analyst and a managing director with NFJ, an Allianz Global Investors company. He is the product team lead for the NFJ Large Cap Value investment strategy and a product team co-lead for the NFJ Dividend Value, NFJ All Cap Value and NFJ Mid Cap Value investment strategies. Mr. Oliver has 20 years of investmentindustry experience in accounting, reporting, and financial analysis. Before joining the firm in 2005, he was a manager of corporate reporting at Perot Systems Corporation and an auditor at Deloitte & Touche. Mr. Oliver has a B.B.A. and an M.B.A. from the University of Texas. He is a CFA charterholder and certified public accountant. R. Burns McKinney, CFA Managing Director, Portfolio Manager/Analyst Mr. McKinney is a portfolio manager, analyst and managing director with NFJ, an Allianz Global Investors company. He is the product team lead for the NFJ Global Dividend Value investment strategy and is the co-lead for the NFJ Dividend Value strategy. Mr. McKinney has 18 years of investment-industry experience in equity research, financial analysis and investment banking. Before joining the firm in 2006, he was an equity analyst covering the energy sector for Evergreen Investments in Boston, an investment-banking analyst at Alex. Brown & Sons, a vice president in equity research at Merrill Lynch and an equity analyst at Morgan Stanley. Mr. McKinney has a B.A. in economics from Dartmouth College and an M.B.A. from the Wharton School of the University of Pennsylvania. He is a CFA charterholder. Morley D. Campbell, CFA Managing Director, Portfolio Manager/Analyst Mr. Campbell is a portfolio manager, an analyst and a managing director with NFJ, an Allianz Global Investors company. He is the product team lead for the NFJ Emerging Markets Value investment strategy and is co-lead for the NFJ Small Cap Value strategy. Mr. Campbell has 11 years of investment-industry experience. Before joining the firm in 2007, he was an investment-banking analyst for Lazard Frères and Merrill Lynch. Mr. Campbell has a B.B.A. from the University of Texas and an M.B.A. from Harvard Business School. He is a CFA charterholder. 18

19 NFJ investment team L. Baxter Hines, CFA Managing Director, Portfolio Manager/Analyst Mr. Hines is a portfolio manager, an analyst and a managing director with NFJ, an Allianz Global Investors company. He is the product team lead for the NFJ International Value II and NFJ International Small Cap Value investment strategies, and is co-lead for the NFJ International Value strategy. Mr. Hines has 10 years of investment-industry experience. Before joining the firm in 2008, he was with the Teacher Retirement System of Texas and worked as a market-data specialist for Reuters. Mr. Hines has a B.A. in economics from the University of Virginia and an M.B.A. from the University of Texas, McCombs School of Business. He is a CFA charterholder. Jeff N. Reed, CFA Director, Portfolio Manager/Analyst Mr. Reed is a portfolio manager, an analyst and a director with NFJ, an Allianz Global Investors company. He is the product team co-lead for the NFJ Mid Cap Value and NFJ All Cap Value investment strategies. Mr. Reed has 11 years of experience in investment and financial analysis. Before joining the firm in 2007, he was a credit analyst at Frost Bank. Mr. Reed has a B.B.A. in finance from Texas Christian University and an M.B.A. from the University of Texas, McCombs School of Business. He is a CFA charterholder. J. Garth Reilly Investment Analyst Mr. Reilly is an investment analyst with NFJ, an Allianz Global Investors company. He joined the firm in 2005 and has 10 years of investment-industry experience. Prior to joining NFJ s investment team, Mr. Reilly was a performance analyst whose responsibilities included performance measurement and portfolio analytics. He began his career with internships at Luther King Capital Management and Citigroup Alternative Investments. He has a B.A. in political economy from Princeton University and an M.B.A. from Southern Methodist University. Mark Mars Quantitative Analyst Mr. Mars is a quantitative analyst with NFJ, an Allianz Global Investors company. He is responsible for performing tests to validate NFJ s investment processes and to test investment assumptions. Mr. Mars has five years of investment-industry experience. Before joining the firm in 2010, he taught physics and mathematics at the high school and college levels for more than 15 years. Mr. Mars has a B.S. in physics from the Massachusetts Institute of Technology and an M.S. in physics from the University of Illinois at Urbana- Champaign. John R. Mowrey, CFA Director, Portfolio Manager/Analyst Mr. Mowrey is a portfolio manager, an analyst and a director with NFJ, an Allianz Global Investors company. He has portfolio management and research responsibilities for the NFJ International Value, NFJ Small Cap Value, NFJ Mid Cap Value 100, NFJ Dividend Value, NFJ Global Dividend Value, NFJ International Value II, NFJ International Small Cap Value and NFJ Emerging Markets Value investment strategies. Mr. Mowrey joined the firm in 2007 as a quantitative-research assistant and product specialist. He has eight years of investment-industry experience. Mr. Mowrey has a B.A. in political science from Rhodes College and an M.B.A. from Southern Methodist University. He is a CFA charterholder. 19

20 NFJ portfolio product specialist team Stephen Haines Director, Product Specialist Stephen Haines is a product specialist and a director and with NFJ, an Allianz Global Investors company, which he joined in As a member of the firm s Investment Management team, he focuses on investment strategy, sales and distribution support, client servicing and product development. Mr. Haines has 12 years of investment-industry experience. He was previously a regional director for the institutional-services group at Dimensional Fund Advisors, working with the firm s corporate and public pension plan clients. Before that, Mr. Haines was an associate at J.P. Morgan and a wealth management advisor at Merrill Lynch. He has a B.B.A. in finance from Baylor University and an M.B.A. from Southern Methodist University. Mr. Haines holds the FINRA series 7 and 66 licenses. Kris Marca, CFA Product Specialist Associate Mr. Marca is a product specialist associate with Allianz Global Investors, which he joined in As a member of the US Product Specialist Services team, he serves as a liaison between the firm s US distribution group and NFJ, an Allianz Global Investors company, focusing on sales and distribution support, as well as client servicing. Mr. Marca was previously a performance analyst with the firm. He has 11 years of investment-industry experience. Before, Mr. Marca worked on the equity derivatives desk at HBK Capital Management. He has a B.A. in biology from the University of Texas at Austin and an M.B.A. from Texas Christian University. Mr. Marca is a CFA charterholder, and holds the FINRA series 7, 63 and 65 licenses. Krysta M. Hill Assistant Vice President, Product Specialist Associate Ms. Hill is a product specialist associate and an assistant vice president with Allianz Global Investors, which she joined in As a member of the US Product Specialist Services team, she serves as a liaison between the firm s US distribution group and NFJ, an Allianz Global Investors company, focusing on sales and distribution support as well as client servicing. Ms. Hill was previously a product manager and a member of the marketing department. She has 10 years of investment-industry experience. Before joining the firm, Ms. Hill worked at Lehman Brothers Inc. as a communications specialist in their high-net-worth marketing department, and at Sard Verbinnen & Co. as an associate in financial public relations and crisis communications. She has a B.A., magna cum laude, in communications from the University of Pennsylvania. Ms. Hill holds the FINRA series 7 and 66 licenses. 20

21 AllianzGI NFJ International Value GIPS disclosure NFJ International Value Minimum Separate Account $25M 0.85% on first $25 M 0.75% on next $25 M 0.60% on next $50 M 0.45% Thereafter The Firm: For purposes of compliance with the Global Investment Performance Standards (GIPS ) the firm is defined as Allianz Global Investors. The Firm claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with the GIPS standards. Allianz Global Investors, and/or its predecessor firm, has been independently verified for the periods 1 January 2007 to 31 December The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. Allianz Global Investors is a global asset management business, operating under the marketing name Allianz Global Investors through affiliated entities worldwide. For purposes of the Global Investment Performance Standards (GIPS ), the "Firm" is defined as the group of firms that coordinate their research, investment and/or trading activities (the "Global Investment Platform"), which currently includes Allianz Global Investors Europe GmbH, Allianz Global Investors GmbH UK Branch, Allianz Global Investors US LLC (including NFJ Investment Group LLC), Allianz Global Investors Asia Pacific, Allianz Global Investors Singapore Limited, Allianz Global Investors GmbH Milan Branch and Allianz Global Investors GmbH French Branch. In the case of certain firms, such coordination may be limited to common supervision by the Firm s Global Chief Investment Officer. As of December 31, 2014, the Firm had approximately USD429 billion in assets under management. Also operating under the marketing name Allianz Global Investors, there are certain investment advisory firms that are not part of the Global Investment Platform that have approximately USD64 billion in assets under management. While these firms are affiliates of the Firm they are excluded from the definition of the Firm for purposes of GIPS and their assets under management are therefore excluded from Total Firm Assets. For periods ending before December 31, 2012, the Firm was defined as a global investment advisory organization, consisting of separate affiliated firms, which operated under the brand name RCM ("RCM Global"), and the Global Investment Platform consisted only of those entities included within the RCM Global GIPS Firm definition. In 2012, through a global restructuring of the Allianz Global Investors business, the Global Investment Platform was expanded to include additional investment advisory firms. Total Firm Assets prior to 2012 reflect only those assets of RCM Global. Additional information regarding the firm s policies and procedures for calculating and reporting performance results is available upon request. To obtain a list and description of all of Allianz Global Investors composites, or for a complete list of the firms that comprise Allianz Global Investors and their periods of verification, please call or write to Allianz Global Investors US LLC, 600 West Broadway, San Diego, California Compliance Statement: Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the Firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The NFJ International Value composite has been examined for the periods March 1, 2003 through December 31, The verification and performance examination reports are available upon request. The Composite: The NFJ International Value Composite (the Composite ) is generally diversified with an emphasis on companies with low valuations and market capitalizations greater than $1 billion, is typically invested in ADR s traded in the US but is not limited to such securities. As of March 1, 2012, the portfolios may also invest in the ordinary shares of stock traded in local foreign markets. The composite was redefined to broaden the scope of investments available to the composite strategy. In addition, a significant portion of the Composite is invested in securities that are expected to pay dividends. The Composite was created on March 1, The Composite includes all actual fee paying discretionary institutional and mutual fund accounts (including sub-advisory relationships) with comparable investment objectives and risks, managed by AllianzGI US for at least one full month. The Composite can include both taxexempt and taxable accounts. All earnings are reinvested. No leverage has been used in the accounts included in the Composite. In the event of a significant cash flow to an account which is defined by AllianzGI US s policies and procedures as 25% or more of the beginning market value, the account will be removed from composite for one full month. Additional information regarding the treatment of significant cash flows is available upon request. Prior to July 1, 2010, the composite performance presented consists of the portfolios of NFJ Investment Group, LLC,, which, as a result of an internal corporate reorganization, now are part of the Firm. Such performance results have been linked to the results achieved at the Firm in compliance with the GIPS standards on performance record portability. Portfolio Returns: Returns are calculated on a total return basis, including all dividends and interest, accrued income, realized and unrealized gains or losses, and are net of all brokerage commissions, execution costs and without provision for federal or state income taxes. Returns are net of any foreign withholding taxes on dividends, interest and earnings. Performance results are expressed in US dollars. Fees: Performance results stated to be gross do not reflect the deduction of investment advisory fees. Gross performance results earned on behalf of AllianzGI US s clients will be reduced by AllianzGI US s advisory fees. Net performance results, which reflect the deduction of the highest applicable investment advisory fees, are also displayed. AllianzGI US investment advisory fees are usually accrued monthly based on the market value of the assets in a portfolio, including cash or its equivalent, held for investment, at the end of each month. NFJ s standard advisory fees, as reported in Form ADV Part 2A Brochure for the investment style described herein, are 0.85% annually on the first $25 million, 0.75% on the next $25 million, 0.60% on the next $50 million, and 0.45% in excess of $100 million. Index: The MSCI All Country World Ex-US Index measures the equity market performance of the developed and emerging markets, excluding the United States. The MSCI ACWI (All Country World Index) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed and emerging markets. The Index is calculated with gross dividends and approximates the maximum possible dividend reinvestment. The amount deemed reinvested is the dividends distributed to individuals residing in the country of the company, but does not include tax credits. This unmanaged market index is provided to represent the investment environment existing during the time periods shown. For comparison purposes, the index is a fully invested index, which includes reinvestment of income. The returns for this unmanaged index do not include any transaction costs, management fees or other costs. The primary benchmark as of 6/30/2008 is the MSCI All Country World ex-us Index. Although the NFJ Investment Group is a value investor, the broader ex-us index provides a more accurate benchmark because it is more inclusive. Furthermore, our selection universe is primarily composed of ADR s, and thus many of the deepest value names which are included in the MSCI All-Country World ex-us Value index are not included in our selection universe. Previous benchmark from 1/1/2005 to 6/30/2008 was the MSCI All Country World ex US Value Index. Prior to that the previous benchmark was the MSCI World ex- US. All returns presented are calculated using US dollars Internal Dispersion: The internal dispersion is an asset weighted dispersion measure that explains the deviation of gross annual account returns from the Composite annual account return. Assuming normal distribution of returns, plus or minus one standard deviation from the mean return encompasses 68% of all possible outcomes. The internal dispersion may not be meaningful for composites consisting of five or fewer portfolios or for periods of less than one full year. Internal dispersion of annual returns for all portfolios in the NFJ International Value Composite is shown for the full year using equal weighting of accounts for calendar years prior to 2005 and asset weighting of accounts for calendar years commencing in Past performance is not indicative of future results. Gross returns do not give effect to investment advisory fees, which would reduce such returns. Investment advisory fees are described further in Form ADV Part 2A Brochure of the investment adviser. Advisory fees deducted periodically from accounts can have an impact on performance. As an example, the effect of investment advisory fees on the total value of a portfolio assuming (1) $1,000,000 investment, (2) portfolio return of 5% per year, and (3) 1.00% annual investment advisory fee would be $10, in the first year, $56, over five years, and $129, over ten years. Actual fees charged may vary by portfolio due to various conditions, including account size. The net-of fee results for individual accounts and for different time periods may vary. Unless otherwise noted, equity index performance is calculated with gross dividends reinvested and estimated tax withheld, and bond index performance includes all payments to bondholders, if any. Indexes are referred to for comparative purposes only and are not intended to parallel the risk or investment style of the portfolios in the Composite. Indexes do not utilize leverage. Index calculations do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investment into any index. Index data contained herein (and all trademarks related thereto) are owned by the indicated index provider, and may not be redistributed. The information herein has not been approved by the index provider. 21

22 AllianzGI NFJ International Value composite Schedule of composite performance results as of December 31, 2014 NFJ International Value Composite Year Composite Return Gross (%) Composite Return Net (%) MSCI ACWI Ex-US Index Returns (1) Composite 3-Yr St. Dev. (%) (2) Benchmark 3-Yr St. Dev. (%) (2) Internal Dispersion (4) Number of Portfolios in the Composite at Year End Composite Total Assets at Year End (USD $ M) Total Firm Assets (USD $ M) , , , , , , , , , , , , , , , , (3) ,310 (1) The MSCI ACWI Ex-US returns, which do not reflect the deduction of investment advisory fees, have been provided for comparison purposes. (2) The three-year annualized standard deviation measures the variability of the composite and the index returns over the preceding 36-month period. (3) The three-year annualized standard deviation is not presented because there are less than 36 monthly returns for the composite and benchmark. (4) Standard deviation is not considered statistically meaningful when there are five or fewer portfolios in the composite during the period. Investments in overseas markets may pose special risks, including currency fluctuation and political risks, and the portfolio is expected to be more volatile than a US-only portfolio. These risks are generally intensified for investments in emerging markets. Small- and mid-cap stocks may be subject to a higher degree of risk than more established companies securities. The illiquidity of the markets for these stocks may adversely affect the value of these investments. 22

23 Additional disclosure All materials are presented for Institutional Client use only and are not intended for distribution to the public. The strategy may not achieve its desired results. Past performance is not indicative of future results. All returns are gross unless otherwise noted. Gross returns do not give effect to investment advisory fees, which would reduce such returns. Investment advisory fees are described further in Form ADV Part 2A Brochure of the investment adviser named in the performance presentation of the relevant strategy (the Adviser ). Advisory fees deducted periodically from accounts can have an impact on performance. As an example, the effect of investment advisory fees on the total value of a portfolio assuming (a) $1,000,000 investment, (b) portfolio return of 5% per year, and (c) 1.00% annual investment advisory fee would be $10, in the first year, $56, over five years, and $129, over ten years. Actual fees charged may vary by portfolio due to various conditions, including account size. The presentation may also contain net performance information. Notes to the performance presentation contained herein describe the methodology used to calculate net of fee performance. The results for individual accounts and for different time periods may vary. Descriptions of a strategy s investment process, and targeted, expected and similar forward-looking portfolio information are based on the Adviser s future expectations regarding the strategy. Although the Adviser manages the strategy with the goal of achieving these expectations, actual results may vary, and the publication of these expectations should not be construed as a guarantee. Representative account characteristics do not reflect composite performance, which may be different. On any given date, any portfolio managed in the indicated strategy may include securities not held by the representative account, and may not hold each security held in the representative account. Consequently, any particular account may have portfolio characteristics and performance that differ from those of the representative account. Portfolio characteristics and other information contained in this presentation have been obtained from independent research providers and other sources the Adviser believes to be reliable, but the Adviser cannot guarantee that the information is accurate, current or complete. Certain projected characteristics (such as the forward P/E ratio) of the Representative Account and indices shown may have been estimated. Estimates (est.) are preliminary and unaudited. Estimated data reflect subjective judgments and assumptions and unexpected events may occur. Therefore, there can be no assurance that developments will transpire as forecasted in this brochure. For more information regarding account characteristics, please contact Allianz Global Investors U.S. LLC ( AllianzGI US ). Nothing contained in this presentation constitutes an offer to sell, or the solicitation of an offer to buy or a recommendation to buy or sell any security; nor shall anything in this presentation be considered an offer or solicitation to provide services in any jurisdiction in which such offer or solicitation would be unlawful. The information provided is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs or should seek such professional advice for their particular situation. The asset and industry reports contained herein are unaudited. The summation of dollar values and percentages reported may not equal the total values, due to rounding discrepancies. Where applicable, currency conversions are provided by Russell Performance Universe and are based on monthly linked performance converted from U.S. dollar, and exchange rates are provided by the Federal Reserve Statistical Release as of month end. Unless otherwise noted, equity index performance is calculated with gross dividends reinvested and estimated tax withheld, and bond index performance includes all payments to bondholders, if any. Indexes are referred to for comparative purposes only and are not intended to parallel the risk or investment style of the portfolios managed by the Adviser. Indexes do not utilize leverage. Index calculations do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investments into any index. Index data contained herein (and all trademarks related thereto) are owned by the indicated index provider, and may not be redistributed. MSCI or other index providers have not approved, reviewed or produced this report, make no express or implied warranties or representations and are not liable whatsoever for any data in the report. You may not redistribute the MSCI or other index data or use it as a basis for other indices or investment products. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. S&P Dow Jones Indices has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the S&P Dow Jones Indices data or use it as a basis for other indices or investment products. Allianz Global Investors U.S. LLC ( AllianzGI US ) is an SEC registered investment adviser that provides investment management and advisory services primarily to separate accounts of institutional clients and registered and unregistered investment funds. AllianzGI US manages client portfolios (either directly or through model delivery and wrap fee programs) applying traditional and systematic processes across a variety of investment strategies. AllianzGI US may also provide consulting and research services in connection with asset allocation and portfolio structure analytics. NFJ Investment Group LLC is an SEC registered investment adviser and wholly-owned subsidiary of AllianzGI US. 6/