DWS Invest. Annual Report Investment Company with Variable Capital Incorporated under Luxembourg Law

DWS Invest Annual Report 2011 Investment Company with Variable Capital Incorporated under Luxembourg Law 1/2012

Contents Annual report 2011 for the period from January 1, 2011, through December 31, 2011 Equity and bond markets 4 General information 8 2011 Annual report DWS Invest SICAV DWS Invest Africa 12 DWS Invest Alpha Opportunities 14 DWS Invest Alpha Strategy 15 DWS Invest Asia Pacific ex-japan 16 DWS Invest Asian Small/Mid Cap 18 DWS Invest BRIC Plus 20 DWS Invest China Bonds 22 DWS Invest Chinese Equities 24 DWS Invest Clean Tech 26 DWS Invest Commodity Plus 28 DWS Invest Convertibles 29 DWS Invest Diversified Fixed Income Strategy 31 DWS Invest Emerging Markets Corporates 33 DWS Invest Emerging Markets Top Dividend Plus 35 DWS Invest Euro Bonds (Premium) 37 DWS Invest Euro Bonds (Short) 39 DWS Invest Euro Corporate Bonds 41 DWS Invest Euro-Gov Bonds 43 DWS Invest European Bonds 44 DWS Invest European Equities 45 DWS Invest European Select 47 DWS Invest European Select Plus 48 DWS Invest European Small/Mid Cap 49 DWS Invest Global Agribusiness 51 DWS Invest Global Bonds 53 DWS Invest Global Equities 54 DWS Invest Global Equities 130/30 56 DWS Invest Global ex Japan (USD) 57 DWS Invest Global Inflation Strategy 58 DWS Invest Global Infrastructure 60 DWS Invest Global Thematic 62 DWS Invest Global Value 64 DWS Invest Gold and Precious Metals Equities 66 DWS Invest Government Liquidity Fund 67 DWS Invest Income Strategy Conservative 68 DWS Invest Income Strategy Currency 69 DWS Invest Income Strategy Dynamic 70 1

DWS Invest Income Strategy Plus 71 DWS Invest Income Strategy Systematic 73 DWS Invest Italian Equities 74 DWS Invest Japanese Equities 76 DWS Invest Multi Asset Allocation 77 DWS Invest Multi Asset Balance 79 DWS Invest Multi Asset Momentum 80 DWS Invest New Resources 82 DWS Invest Real Assets 84 DWS Invest Responsibility 86 DWS Invest RREEF Asia-Pacific Real Estate Securities 88 DWS Invest RREEF Global Real Estate Securities 89 DWS Invest Short Duration Credit (until August 15, 2011: DWS Invest Income Strategy Credit) 91 DWS Invest Small/Mid Cap Value 92 DWS Invest Sovereigns Plus 94 DWS Invest StepIn Akkumula 96 DWS Invest Top 50 Asia 98 DWS Invest Top Dividend 100 DWS Invest Top Dividend Europe 102 DWS Invest Top Dividend Premium 104 DWS Invest Top Euroland 106 DWS Invest US-Gov Bonds 108 DWS Invest US Value Equities 109 Investment portfolios for the reporting period Investment portfolios, financial statements and statement of changes in net assets 112 Report of the Réviseur d Entreprises agréé 442 2

Equity and bond markets

Equity markets in the fiscal year through December 31, 2011 Equity markets affected by the debt crisis In the period from the beginning of January 2011 through July 2011, prices in the international equity markets ini - tially rose significantly because of the surprisingly good performance of the global economy. However, since August/September, the euro area debt crisis grew more acute and prices on the exchanges plummeted. Fears of recession suppressed the expectation of solid growth. This, in turn, was viewed as necessary in order to reduce the high levels of debt. The corporate reporting season for the second quarter of 2011 was unable to form a counterweight to the negative influences. In addition, the ability of the central banks to stimulate the economy was sharply limited. In many cases, for example, key interest rates were near zero, leaving little leeway for further lowering. Moreover, the temporary threat of U.S. insolvency and the downgrade of the country s credit rating weighed on sentiment. The hopes for an improved climate were based primarily on the austerity efforts of the heavily-indebted nations. These efforts were decisive for the transfer payments from the rescue package put together by the European Union and the International Monetary Fund. Cyclical support came from emerging markets such as China, with its ongoing strong economic growth, although it also lost some momentum. Against this backdrop, the MSCI World Index recorded a loss of 4.8% in U.S. dollar terms over the 12-month period (-2.4% in euro). At sector level, financials and economically sensitive, cyclical Strong market movements over a five-year period 140 Germany 120 100 80 U.S. 60 40 International equity markets in fiscal year 2011 Performance in % DAX STOXX Europe 50 S&P 500 TOPIX Equity indices: STOXX Europe 50 S&P 500 TOPIX DAX MSCI World MSCI Emerging Markets In local currency In euro Japan Europe 12/06* 12/07 12/08 12/09 12/10 12/11 Data on euro basis * December 29, 2006 = 100 STOXX is a registered trademark of STOXX Limited; DAX is a registered trademark of Deutsche Börse AG -14.7-5.6 2.1 4.6-17.0-10.7-4.8 (in U.S. dollars) -2.4-17.8 (in U.S. dollars) -15.7-24 -18-12 -6 0 6 12 Equity indices: Germany: DAX Europe: Dow Jones STOXX 50 U.S.: S&P 500 Japan: TOPIX worldwide: MSCI World Emerging markets: MSCI Emerging Markets equities came under pressure from summer 2011. Nevertheless, the latter recorded significant gains before the economic prospects deteriorated. The U.S. equity market initially recorded a significant gain in the first half of the fiscal year. The reason for this was the positive development of corporate and economic data. As the period went on, however, this data weakened noticeably, leading to renewed fears of recession. The ongoing discussions about sovereign debt in the Western industrial countries also contributed to the dar - kening of the market environment. Although an agreement was reached on raising the debt ceiling in the United States, the increasing uncertainty prompted one of the leading rating agencies to downgrade the country s credit rating. The deterioration of the debt crisis in Europe also led to fears of a negative impact on the global eco - nomy. Despite these difficulties, an improvement in economic prospects in conjunction with the ongoing expansionary central bank policy (lock-in of the virtually zero-interest rate policy until 2013) boosted U.S. equities again toward the end of the reporting period. The U.S. equity market as measured by the S&P 500 index recorded a gain of 2.1% in U.S. dollar terms (+4.6% in euro) for the full reporting year. The climate in Europe s stock markets was good in light of the initially positive economic environment. This applied in particular to Germany and the Northern European countries with relatively sound management of their public budgets. The strong growth in the emerging industrial countries and the revival of domestic demand provided the impetus. Many companies were buoyed here by their strong international competitiveness. However, even these markets were unable to avoid the threatening escalation of the debt crisis in the second half of 2011 despite extensive liquidity aids from the European Central Bank (ECB). The DAX, for example, was down by 14.7% overall in euro terms. Some stock markets in 4

the highly indebted countries of Southern Europe, with their growth concerns, recorded even greater losses. For example, Italian equities, as meas - ured by the FTSE MIB, fell by 21.2%. This also explained the considerably higher 14.5% decline on the EURO STOXX 50 index (in euro terms) in comparison to the broader STOXX Europe 50 index, which fell 5.6%. Prices on most Eastern European exchanges were also affected by the euro area debt crisis in the year through the end of December 2011. The aboveaverage economic growth in these countries and their comparatively low level of government debt was of little help in this regard. Polish equities as measured by the WIG fell by 29.1% while Czech equities fell by 27.1% (PX index, both percentages in euro terms). The natural disaster of March 2011 in Fukushima and its consequences was the main influence on the Japanese equity market in the reporting period. Fears of a major nuclear crisis as a result of the accident at the Fukushima nuclear power plant and the noticeable cooling of the Japanese economy from the loss of production capacity led to a major price correction. The situation stabilized later in the period, and the stock exchange showed temporary signs of recovery. However, this was only short-lived, as concerns about the weakening of the global economy against the backdrop of debt problems in the euro peripheral countries dampened the performance. Leading indicators in the U.S. and Europe were also gloomier. As measured by the TOPIX index, Japanese equities recorded a loss of 17.0% in local currency during the reporting period (-10.7% in euro terms). In view of rising risk aversion resulting from the debt problems, investors preferred the yen, which gave the currency a strong boost. Change in oil price since the end of 2009 USD/barrel 120 110 100 90 80 70 60 12/09 6/10 12/10 6/11 12/11 Oil price (WTI) Source: Thomson Financial Datastream The economies in the emerging markets remained relatively robust, although they could not avoid the impact of the global trends. The equity markets of some emerging-market countries initially turned in impressive performances thanks to the low debt and robust economic outlooks of these countries. However, as the period went on, they suffered from the rising risk aversion of international investors. Although these markets had no direct connection with the structural problems in the industrial countries, the stock markets were hit hard particularly in those economies dominated by ongoing inflationary pressures, such as India. Against this backdrop, the MSCI Emerging Markets recorded a loss of 15.7% in euro terms. Strong fluctuations in gold and crude oil With the financial crisis in the euro area deteriorating, the price for a troy ounce of gold rose very sharply, from around USD 1,400 at the beginning of the reporting period to more than USD 1,900 at its peak. However, the price had fallen to about USD 1,560 by the end of 2011. In the fourth quarter, investors turned their focus toward U.S. dollar exposures at the expense of investments in gold. This was partly due to the slight brightening of the economic outlook in the U.S. toward the end of the reporting period. Nevertheless, gold ended the 12-month period through the end of December 2011 with an overall gain of around 10%. Furthermore, the crude oil price also climbed to the same extent, reaching around USD 99 a barrel (WTI) by the end of the reporting period. In the interim, how - ever, it was also subject to major fluc - tuations. After initially rising significantly to around USD 115 on the strength of the upturn in the global economy, the price then dropped noticeably here, too. This was the result of debt problems in the euro area, which led to fears of recession. In terms of currencies, the euro, remaining at 1.30 on balance, hardly changed against the U.S. dollar. It temporarily rose to almost 1.50 before the crisis in the euro area became more severe. 5

Bond markets in the fiscal year through December 31, 2011 Capital markets under the sway of the debt crisis The performance in the international capital markets in the 2011 fiscal year was characterized by uncertainty. Initial optimism was replaced by renewed fears of recession in the second half of the year, mainly triggered by the sovereign debt crisis in the euro area and the global economic slowdown. While the economy in the U.S., Europe and Japan experienced a noticeable downturn, economic growth in the emerging-market countries, particularly China and India, was by contrast comparatively robust, although momentum slowed considerably. This fact, combined with the deteriorating debt problems in the euro peripheral countries, especially in heavily-indebted Greece, had an extremely negative impact on the capital markets. Investor risk aversion was very high as a result. Gold, German government bonds and the Japanese yen, which were considered safe havens for investment profited from this trend. Nevertheless, their performance fluctuated enormously. As a result, gold, which tested record highs at times (at the beginning of September 2011 the price stood at around USD 1,900 per troy ounce) had to give up some of its price gains toward the end of the year. Bonds from the euro peripheral countries under price pressure The debt crisis in the euro area, which began in April 2010 with the Greek financial crisis, expanded during the 2011 fiscal year to include the euro countries Portugal, Italy, Ireland and Economic growth in the U.S., the euro area, Japan, the BRIC countries (Brazil, Russia, India, China) and the world Economic growth compared to the previous year 12.0% 9.0% 6.0% 3.0% 0.0% -3.0% U.S. Euro area Japan 2010 2011* 2012* BRIC countries: Brazil Russia India China Spain. The European Union (EU) and the International Monetary Fund (IMF) put together a rescue package in the form of guarantees and liquidity, but these measures, along with the ECB s purchases of bonds from financially weak euro countries has thus far had only a temporary stabilizing effect. In view of the fear of a Greek government default, a second aid package was put together for Greece at the special euro summit on July 21, 2011, which called for euro governments to provide an additional EUR 109 billion. The package also called for banks and insurance companies to contribute EUR 37 billion in a debt swap. A further summit in October forced banks to increase their capital. In addition, the euro-area countries introduced a credit leverage mechanism, to strengthen the clout of the European Financial Stability Facility (EFSF). Nevertheless, the financial markets remained skeptical that the consolidation efforts by the euro peripheral countries would be successful, especially in the Southern European debtor countries. This lack of confidence on the part of investors increased pressure, primarily on the bonds of the World Significant widening of risk premiums with respect to German government bonds for ten-year government bonds from the euro periphery * Estimates Source: Deutsche Bank % points 40 32 24 16 8 0 12/08 6/09 12/09 6/10 12/10 6/11 12/11 Portugal Italy Ireland Greece Spain Source: Thomson Financial Datastream financially weak euro-area countries. Their risk premiums and therefore yield spreads increased significantly in the case of Greek bonds dramatically (see the chart Significant widening of risk premiums with respect to German government bonds ). At the same time, the considerable price drops pushed up yields significantly on Greek government bonds in particular, but also on Portuguese government bonds (see the chart Yield performance of ten-year government bonds from the euro peripheral countries ). 6

Bonds from the core countries in demand as safe havens In the search for safe investments, investors fled to gold and government bonds, e.g. from Germany, Switzerland and the U.S. As a result, after increasing briefly, yields on these bonds, which were already low by international comparison, dropped sharply in the second half of the fiscal year while their prices rose. Overall, in the 10-year maturity segment, yields on German government bonds fell from 3.0% to 1.8% p.a., U.S. government bonds from 3.4% to 1.9% p.a. and Swiss government bonds from 1.7% to 0.7% p.a. during the fiscal year through the end of December 2011. After rising temporarily, yields on Japanese government bonds were back down to just over the one-percent mark at the end of December. Risk premiums higher on corporate bonds Initially, investors continued to favor corporate bonds, in particular high-yield bonds. This was also aided by a reduction in debt at company level and the positive refinancing opportunities due to the low interest-rate policy pursued by central banks. However, with the escalation of the sovereign debt crisis in the euro area and the U.S., coupled with slowing global economic growth, increasing investor risk aversion dampened the performance of the corporate bond markets. Bank bonds in particular, including European and U.S. issues, came under pressure due to the deterioration of the debt crisis in the euro periphery and the weak U.S. real estate market. As a result, in the investmentgrade segment (rating of BBB or better by leading rating agencies), bank risk premiums and yield spreads were at times higher on bank bonds than on comparable corporate bonds. Euro under pressure Sovereign debt in the Western industrial countries and the resulting uncertainties about the potential impact on global economic growth became the dominant topics in the international currency markets, too. The Japanese yen, which investors regarded as a safe haven, was a particular beneficiary of the resulting increase in investor risk aversion. It gained 8.8% against the euro and 5.5% against the U.S. dollar. To limit the rise of the yen and thereby relieve the strain on the export-oriented Japanese economy, the Japanese government intervened in the currency market; this was supported by the low-interest rate policy of the Bank of Japan and its bond purchasing program. The Swiss franc was also in strong demand by investors and took flight. But the strength of the franc had an increasingly negative effect on Switzerland s export-oriented eco - nomy and on price stability in the country. Against this backdrop, the Swiss National Bank (SNB) in addition to its de facto zero interest-rate policy and expanded monetary supply Yield performance of ten-year government bonds from the euro peripheral countries % p. a. 40 32 24 16 8 0 12/08 6/09 12/09 6/10 12/10 6/11 12/11 Portugal Italy Ireland Greece Spain Source: Thomson Financial Datastream established a minimum exchange rate of 1.20 francs per euro on September 6, 2011. This brought the prior massive surge of the Swiss franc to a halt. In the second half of the year, the thus far still unresolved sovereign debt crisis in the euro periphery and signs of an economic downturn in the euro area were a par - ticular drag on the euro exchange rate. The U.S. dollar also came under pressure temporarily because of high capital outflows from the greenback. The reasons for this included the significant rise in the federal deficit, high unemployment and continued weak growth in the U.S. This weak growth prompted the U.S. Federal Reserve in the third quarter of 2011 to maintain its virtually zero-interest rate policy (target range: -0.25% p.a.) until 2013. In September, the Fed also announced the further easing of its monetary policy by increasing the duration of the bonds it holds. 7

General information The investment funds described in this report are sub-funds of a SICAV (Société d Investissement à Capital Variable) incorporated under Luxembourg law. Performance The investment return, or performance, of a mutual fund investment is meas - ured by the change in value of the fund s shares. The net asset values per share (= redemption prices) with the addition of intervening distributions, which are, for example, reinvested free of charge within the scope of investment accounts at DWS, are used as the basis for calculating the value. Performance is calculated according to the BVI method (used by the BVI, the main German investment fund industry association), i.e., excluding the initial sales charge. Past performance is not a guide to future results. The 57 subfunds currently offered are available in up to ten share classes (multi-share classes). This may give rise to differ- ences in the performance of the respective share classes. The corresponding benchmarks if available are also presented in the report. All financial data in this publication is as of December 31, 2011 (unless otherwise specified). For the realized gains or losses reported in the financial statements or in the statement of changes in net assets of the respective subfunds, positive and negative results within the same product category are netted in each case; across product categories, negative or positive result balances on a gross basis are reported as the realized loss or gain. In accordance with the sales prospectus, the expenses detailed in item 12(b) are limited to 15% p.a. (for mixed funds, bond funds and equity funds) and 7.5% p.a. (for money market funds). If this expense cap is exceeded, the management fee shown in the financial statements is reduced accordingly. Sales prospectuses Fund shares are purchased on the basis of the current sales prospectus, the by-laws of the SICAV and the key investor information document in combination with the latest audited annual report and any semiannual report that is more recent than the latest annual report. Publication of the net asset value per share and of the issue and redemption prices The respective net asset values per share, the current issue and redemption prices including the initial sales charge and the redemption fee, as well as all other information for shareholders may be requested at any time at the registered office of the Management Company and from the paying agents. In addition, depending on customary market practice, the net asset values per share and/or the issue and redemption prices are also published in every country of distribution through appropriate media (such as the Internet, electronic information systems, newspapers, etc.). 8

Liquidation of sub-funds Following a resolution to that effect adopted by the management authorized by the Board of Directors of DWS Investment S.A. and the approval of the Luxembourg supervisory authority CSSF, the sub-fund DWS Invest European Select was liquidated effective May 30, 2011. The issue of new sub-fund shares was discontinued effective May 13, 2011. Investors could return sub-fund shares until May 23, 2011. Following a resolution to that effect adopted by the management authorized by the Board of Directors of DWS Investment S.A. and the approval of the Luxembourg supervisory authority CSSF, the sub-fund DWS Invest European Select Plus was liquidated effective May 30, 2011. The issue of new sub-fund shares was discontinued effective May 13, 2011. Investors could return sub-fund shares until May 23, 2011. Following a resolution to that effect adopted by the management authorized by the Board of Directors of DWS Investment S.A. and the approval of the Luxembourg supervisory authority CSSF, the sub-fund DWS Invest Global Equities 130/30 was liquidated effective July 29, 2011. The issue of new sub-fund shares was discontinued effective July 21, 2011. Investors could return sub-fund shares until July 25, 2011. Sub-funds merged with SICAV-external funds Following a resolution to that effect adopted by the management authorized by the Board of Directors of DWS Investment S.A. and the approval of the Luxembourg supervisory authority CSSF, the fund RREEF Global Real Estate Income Securities (incorpo - rated fund) was incorporated into the sub-fund DWS Invest RREEF Global Real Estate Securities (receiving fund) effective January 28, 2011. Incorporated fund Receiving fund Share class ISIN Share class ISIN Exchange factor LC USD LU0265548296 LDH LU0507268513 0.5141204 LC SGD LU0268177812 LDH LU0507268513 0.3522620 LQ USD LU0265548536 LDH LU0507268513 0.4664690 IC USD LU0265548700 LDH LU0507268513 0.5473002 IQ USD LU0265548965 E1Q LU0507269081 0.6741430 Following a resolution to that effect adopted by the management authorized by the Board of Directors of DWS Investment S.A. and the approval of the Luxembourg supervisory authority CSSF, the fund DWS Fixed Income Strategy was incorporated into the sub-fund DWS Invest Income Strategy Systematic (LD share class) effective May 23, 2011. The exchange factor was 1.0818440. Following a resolution to that effect adopted by the management authorized by the Board of Directors of DWS Investment S.A. and the approval of the Luxembourg supervisory authority CSSF, the fund DWS FlexProfit Cash was incorporated into the sub-fund DWS Invest Income Strategy Conservative (LD share class) effective May 31, 2011. The exchange factor was 0.9672200. Following a resolution to that effect adopted by the management authorized by the Board of Directors of DWS Investment S.A. and the approval of the Luxembourg supervisory authority CSSF, the fund DWS Institutional Alpha Overlay was incorporated into the sub-fund DWS Invest Alpha Opportunities (FC share class) effective June 29, 2011. The exchange factor was 1.0791983. Liquidation of share classes of sub-funds The LCH share class of the sub-fund DWS Invest Japanese Equities was closed effective May 11, 2011, by resolution of the management authorized by the Board of Directors of DWS Investment S.A. Discontinuation of the issue of sub-fund shares The issue of new shares of the sub-fund DWS Invest Convertibles in the FC and E2H share classes was discontinued effective February 7, 2011, by resolution of the management authorized by the Board of Directors of DWS Investment S.A. Change in the sub-fund currency The currency of the sub-fund DWS Invest US-Gov Bonds was changed from EUR to USD effective March 21, 2011, by resolution of the management authorized by the Board of Directors of DWS Investment S.A. The currencies of the various share classes remain unchanged. Renamed sub-funds Effective August 16, 2011, the sub-fund DWS Invest Income Strategy Credit was renamed DWS Invest Short Duration Credit. 9

2011 Annual report

DWS Invest Africa Investment objective and performance in the reporting period DWS Invest Africa, which focuses on the African continent, generally invests in companies with strong earnings, a good market positioning and a solid balance sheet. Abundance of natural resources, infrastructure spending and consumer growth play an especially big part in the selection of individual stocks. In the fiscal year through the end of December 2011, the stock exchanges were affected by the debt crisis in Europe and by signs of a global economic slowdown. In this environment, the sub-fund weakened by 22.5% per share (LC share class, BVI method) and was thus behind its benchmark, the S&P Africa 40, which lost 11.3% (both percentages in euro terms). Investment policy in the reporting period The underperformance against the benchmark was due primarily to the high trading costs on the African stock exchanges. As many of these markets are still underdeveloped and therefore relatively illiquid, pricing can be difficult. This is particularly evident, for example, in weak phases. Besides the global slowdown in economic growth, the political changes in North Africa and the Middle East dampened the sales and earnings of African companies. This perceptibly weakened the performance of the sub-fund and also that of the benchmark. The portfolio benefited from the significant reduction of investments in Egypt. The sector allocation of DWS INVEST AFRICA Performance since inception 145 130 115 100 85 70 55 40 7/10/08* 12/08 12/09 12/10 12/11 DWS Invest Africa (LC share class) * Launched on July 10, 2008 = 100 Data on euro basis BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 Performance of share classes vs. benchmark (in euro) Share class ISIN 1 year 3 years Since inception 1) Class LC LU0329759764-22.5% 88.5% 10.8% Class LD LU0363465583-22.5% 88.4% 11.2% Class NC LU0329759848-23.0% 85.2% 9.1% Class FC LU0329759921-21.8% 93.8% 15.0% Class A2 2) LU0329761075-24.3% 75.2% -6.5% Class DS1 3) LU0399357671-25.0% 72.3% S&P Africa 40-11.3% 118.6% 26.4% 1) Classes LC, LD, NC, FC and A2 on July 10, 2008 / Class DS1 on January 20, 2009 2) in USD 3) in GBP BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 DWS Invest Africa thus also changed, as investments in banks or infrastructure stocks were reduced early on some before the stock exchange there closed for a month. The fund management therefore greatly reduced the position in the real estate company Talaat Moustafa, for example. The steel producer El EZZ Steel was sold off completely. The focus was instead placed on the Sub-Sahara investment 12

region, particularly on commodity and energy stocks. This decision was DWS INVEST AFRICA Sector allocation supported by the continued high product prices in these sectors. Furthermore, the prices profited from intensive merger activity, predominantly with Equities: 97.5 Materials Energy Financials Telecommunication Services 9.5 19.0 15.9 42.4 international companies. In the portfolio, the position in African Minerals was expanded temporarily; the company extracts mainly iron ore. The prices of Consumer Discretionary Industrials Not classified by MSCI system Cash and other assets 4.6 4.0 2.1 2.5 0 10 20 30 40 50 gold mine stocks also exhibited an In % of the fund s net assets As of December 31, 2011 above-average performance; Randgold Resources and IAMGOLD were the two largest stocks in the portfolio toward the end of the fiscal year. The weighting of Randgold Resources in the benchmark could not be fully reflected, as the sub-fund was bound by statutory upper limits on investment in individual stocks. This contributed to the weaker performance of DWS Invest Africa compared to the benchmark. In the oil stocks sector, price declines particularly of companies with small and medium market capitalizations were used for purchases. Afren was newly added to the portfolio and the position in Tullow Oil was temporarily increased. 13

DWS Invest Alpha Opportunities Investment objective and performance in the reporting period The sub-fund seeks to achieve sustained capital appreciation. On the basis of a portfolio that approximates the money market, the management employs various alpha strategies* while using derivative financial instruments in order to profit from the relative fluctuations in prices and rates in the bond, currency and equity markets. Indices/ currencies and instruments regarded positively are bought (long positions), and/or issues regarded negatively are sold (short positions) at the same time. In the process, derivatives are primarily implemented in the form of long/short pairs, and a market-neutral portfolio structure is sought. In the reporting period, the climate was initially characterized by an economic recovery, but later increasingly by risks due to significantly higher government debt in the Western industrial countries and by severe fluctuations in the currency markets. Against this backdrop, DWS Invest Alpha Opportunities registered a decline of 3.1% per share in the 2011 fiscal year (LC share class, in euro terms; BVI method). Investment policy in the reporting period In view of the increased uncertainly in the international capital markets, the sub-fund was more defensively oriented particularly in the second half of the year and focused its investments on the currency and bond markets. The extent of the strength of the Japanese DWS INVEST ALPHA OPPORTUNITIES Performance since inception 110 108 106 104 102 100 98 96 6/18/07* 12/07 12/08 12/09 12/10 12/11 DWS Invest Alpha Opportunities (LC share class) * Launched on June 6, 2007 = 100 Data on euro basis BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 Performance of share classes (in euro) Share class ISIN 1 year 3 years Since inception 1) Class LC LU0298689307-3.1% -4.3% -0.3% Class LD LU0363469494-3.0% -4.1% -6.1% Class NC LU0298696690-3.6% -5.3% -2.0% Class FC LU0298696856-2.6% -2.9% 2.4% Class DS1H 2) LU0399357754-3.4% -4.7% 1) Classes LC, NC and FC on June 18, 2007 / Class LD on July 1, 2008 / Class DS1H on March 23, 2009 2) in GBP BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 yen and the Swiss franc, in which the sub-fund went short, was unexpected and dampened the investment result. The management was able to compensate for some of this fall in value with long positions in the U.S. dollar, which was stronger in the second half of the year. On the bond side, the sub-fund held long positions in ten-year German, British and Australian interest-bearing instruments and took advantage of price increases in these investment segments. However, the sub-fund s performance was dampened somewhat by the short orientation in ten-year U.S. and Canadian government bonds, which performed better than expected. Overall, the investments on the bond side made a positive contribution to the results but this was unable to offset the decline in the currency portfolio. * Additional information about Alpha Strategies is contained in the sales prospectus. 14

DWS Invest Alpha Strategy Investment objective and performance in the reporting period The sub-fund seeks to achieve sustained capital appreciation. On the basis of a portfolio that approximates the money market, the management employs various alpha strategies* while using derivative financial instruments in order to profit from the relative fluctuations in prices and rates in the bond, currency and equity markets. Indices/currencies and instruments regarded positively are bought (long positions), and/or issues regarded negatively are sold (short positions) at the same time. In the process, derivatives are primarily implemented in the form of long/short pairs, and a marketneutral portfolio structure is sought. In the reporting period, the climate was initially characterized by an economic recovery, but later increasingly by risks due to significantly higher government debt in the Western industrial countries and by severe fluctuations in the currency markets. Against this backdrop, DWS Invest Alpha Strategy registered a decline of 0.6% per share in the 2011 fiscal year (LC share class, in euro terms; BVI method). Investment policy in the reporting period In view of the increased uncertainly in the international capital markets, the sub-fund was more defensively oriented particularly in the second half of the year. The extent of the strength of the Japanese yen and the Swiss franc, in which the sub-fund went short, was DWS INVEST ALPHA STRATEGY Five-year performance 114 112 110 108 106 104 102 100 12/06* 12/07 12/08 12/09 12/10 12/11 DWS Invest Alpha Strategy (LC share class) * 12/2006 = 100 Data on euro basis BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 Performance of share classes (in euro) Share class ISIN 1 year 3 years 5 years Since inception 1) Class LC LU0195139711-0.6% 1.5% 8.7% 16.1% Class LD LU0363469577-0.6% 1.5% 1.2% Class NC LU0195140057-1.0% 0.1% 6.5% 12.2% Class FC LU0195140214-0.2% 2.7% 10.8% 20.1% Class A2H 2) LU0273170067-1.0% -2.8% 11.7% 16.2% Class E2H 2) LU0273179282-0.8% -2.0% 17.2% 22.0% Class DS1H 3) LU0399357911-0.9% 1.0% 1) Classes LC, NC and FC on August 30, 2004 / Classes A2H and E2H on November 20, 2006 / Class LD on July 1, 2008 / Class DS1H on March 23, 2009 2) in USD 3) in GBP BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 unexpected and dampened the investment result. The management was able to compensate for some of this fall in value with long positions in the U.S. dollar, which was stronger in the second half of the year. On the bond side, the sub-fund held long positions in ten-year German, British and Australian interest-bearing instruments and took advantage of price increases in these investment segments. However, the sub-fund s performance was dampened somewhat by the short orientation in ten-year U.S. and Canadian government bonds, which surprised by performing far better than expected. Overall, the investments on the bond side made a positive contribution to the results but this was unable to offset the decline in the currency portfolio. * Additional information about Alpha Strategies is contained in the sales prospectus. 15

DWS Invest Asia Pacific ex-japan Investment objective and performance in the reporting period DWS Invest Asia Pacific ex-japan invested primarily in equities of issuers having their registered offices or their principal business activity in the Asia- Pacific region (excluding Japan). In the period from its inception on August 1, 2011, through the end of December 2011, the sub-fund declined by 14.6% per share in a difficult stock market environment (LC share class, BVI DWS INVEST ASIA PACIFIC EX-JAPAN Performance since inception 100 97 94 91 88 85 82 79 8/1/11* 8/11 9/11 10/11 11/11 12/11 DWS Invest Asia Pacific ex-japan (LC share class) * Launched on August 1, 2011 = 100 Data on euro basis BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 method). This result placed it below its benchmark, the MSCI AC Asia ex- Japan, which lost 11.2% (both pe rcen - tages in euro terms). Investment policy in the reporting period The underperformance of the sub-fund compared to its benchmark was due, among other factors, to a lower level of investment on the inception date, which proved disadvantageous against the backdrop of an interim market Performance of share classes vs. benchmark (in euro) Share class ISIN Since inception 1) Class LC LU0544569055-14.6% Class LD LU0544569139-14.6% Class NC LU0544569212-14.9% Class FC LU0544569303-14.3% MSCI AC Asia ex Japan -11.2% 1) Classes LC, LD, NC and FC on August 1, 2011 BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 recovery. Furthermore, the overweighting of Chinese equities in the portfolio had an adverse effect and proved disadvantageous in view of gloomier global growth prospects and increased uncertainty regarding the future development of Asia s largest economy. In view of the higher risk aversion on the stock exchanges, the fund management initially largely refrained from investing in small caps and instead preferred more defensive stocks, e.g. from the telecommunications sector. With the stabilization of the capital markets in the fourth quarter of 2011, 16

the proportion of companies from the oil sector was increased in the portfolio; for example by making acquisitions in SembCorp Marine and PTT, as a robust demand for oil was expected. At country level, DWS Invest Asia Pacific ex-japan invested more heavily in Indonesia. The toll road operator Jasa Marga was included in the portfolio so as to participate in an increase in traffic volume in the high-growth Asian emerging-market country. Moreover, as the period progressed the fund management made acquisitions in Korea where export-oriented companies profited from a depreciation of the won against the Japanese yen. DWS INVEST ASIA PACIFIC EX-JAPAN Sector allocation Equities: 74.7 Financials Information Technology Telecommunication Services Energy Consumer Discretionary Consumer Staples Industrials Materials Not classified by MSCI system Warrants Cash and other assets In % of the fund s net assets 0 0.8 5.6 5.3 4.1 8.4 7.5 7.4 7.5 5 10 15.9 17.8 19.7 15 20 25 As of December 31, 2011 17

DWS Invest Asian Small/Mid Cap Investment objective and performance in the reporting period The investment focus of DWS Invest Asian Small/Mid Cap was on equities of Asian companies with small and medium market capitalizations. Against the backdrop of a very difficult market environment, the sub-fund lost 28.9% per share (LC share class, BVI method) in the twelve months through the end of December 2011. Its benchmark index, the FTSE Asia Pacific Smallcap DWS INVEST ASIAN SMALL/MID CAP Five-year performance 145 130 115 100 85 70 55 40 12/06* 12/07 12/08 12/09 12/10 12/11 DWS Invest Asian Small/Mid Cap (LC share class) * 12/2006 = 100 Data on euro basis BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 ex Japan (EUR), recorded a loss of 21.8% in the same period (both percentages in euro terms). Investment policy in the reporting period Asian stocks were unable to avoid the noticeable deterioration of the global economic environment. In addition, country-specific problems were stress factors for individual stock exchanges. This applied to the Indian equity market but particularly to the Chinese equity market, which was adversely affected by concerns regarding the overheating Performance of share classes vs. benchmark (in euro) Share class ISIN 1 year 3 years 5 years Class LC LU0236153390-28.9% 96.8% 1.9% Class LD LU0236153556-28.9% 97.0% 3.8% Class NC LU0236154448-29.5% 92.8% -2.0% Class FC LU0236154950-28.4% 101.5% 5.7% Class LS LU0254485450-29.1% 101.6% 10.3% Class A2 1) LU0273161744-30.6% 89.1% 10.6% Class E2 1) LU0273175025-30.4% 85.8% 11.6% FTSE Asia Pacific Smallcap ex Japan (Euro) -21.8% 113.0% 7.4% 1) in USD BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 of the domestic real estate sector and a more restrictive central bank policy. The significant overweighting of Chinese stocks was a major contributing factor in the weaker performance of the subfund compared with its benchmark. At sector level, the equities of companies from the IT sector, which were more heavily weighted in the portfolio, turned in a below-average performance. This was true, for example, for ELK Corp, a supplier to mobile phone manufacturers, which suffered due to increasing 18

competition and falling prices. In contrast, the consumer goods segment made a positive contribution to the performance. Here, investments in the Korean sporting goods manufacturer Youngone as well as in the Indonesian producer of bakery products Nippon Indosari, among others, were impressive due to positive business development. In addition, the newly included Biostime International turned in an above-average performance. Stocks of the Chinese manufacturer of premium DWS INVEST ASIAN SMALL/MID CAP Sector allocation Equities: 93.3 Consumer Discretionary 21.9 Information Technology 19.4 Consumer Staples 17.0 Industrials Materials 9.9 9.8 Financials Health Care 6.5 5.8 Utilities Not classified by MSCI system 1.1 1.9 Cash and other assets 6.7 0 5 10 15 20 25 In % of the fund s net assets As of December 31, 2011 baby food were purchased at an attractive valuation and the company was able to expand its market share while simultaneously achieving high profit margins. In the reporting period, Yingde Gases, a manufacturer of industrial gases that has an advantageous market positioning in China, was also newly included in the portfolio. 19

DWS Invest BRIC Plus Investment objective and performance in the reporting period The sub-fund DWS Invest BRIC Plus invests in Brazilian, Russian, Indian and Chinese equities. In the fiscal year 2011, the management faced a very difficult investment environment, in which the equity markets of the emerging-market countries found themselves under severe price pressure at times. The difficulties included the global economic downturn and market upheavals in conjunction with the sovereign debt crises in Europe and the United States, which also impacted on the emerging markets. Given the increasing risk aversion on the part of investors, equities were sold off in phases, although the fundamental conditions for economic growth in an international context remained robust, supported by solid domestic demand. Against this backdrop, DWS Invest BRIC Plus recorded a decline of 24.0% per share (LC share class, BVI method) and was thus behind its benchmark, the MSCI BRIC, which lost 20.3% (both percentages in euro terms). DWS INVEST BRIC PLUS Five-year performance 164 148 132 116 100 84 68 52 12/06* 12/07 12/08 12/09 12/10 12/11 DWS Invest BRIC Plus (LC share class) * 12/2006 = 100 Data on euro basis BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 Performance of share classes vs. benchmark (in euro) Share class ISIN 1 year 3 years 5 years Since inception 1) Class LC LU0210301635-24.0% 60.7% -13.2% 71.2% Class LD LU0210302013-24.0% 60.7% -13.2% 71.1% Class NC LU0210302286-24.6% 57.3% -16.3% 62.8% Class FC LU0210302369-23.4% 64.5% -9.6% 80.9% Class A2 2) LU0273227784-25.9% 49.7% -11.6% -2.4% Class E2 2) LU0273227354-25.3% 52.8% -11.4% -2.1% Class DS1 3) LU0399358059-26.1% 40.8% MSCI BRIC -20.3% 80.3% 8.3% 141.8% 1) Classes LC, LD, NC and FC on March 29, 2005 / Classes A2 and E2 on November 20, 2006 / Class DS1 on January 19, 2009 2) in USD 3) in GBP BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 Investment policy in the reporting period The underperformance in comparison to the benchmark was due, among other things, to the poor performance of Indian equities, which, particularly at the start of the year, came under intense price pressure and were further impacted by corruption scandals, inflation fears and the weakness of the rupee in the currency markets. As the year progressed, the management adopted an increasingly defensive approach for the portfolio to limit price risks. As part of this, the cash position was increased, at times to over 10% of the sub-fund s assets, against the backdrop of the high price fluctuations in August and September 2011. In general, the management also favored more defensive equities with higher 20

earnings transparency and liquidity (blue chips) to the detriment of medium-sized equities whose weighting was reduced accordingly. These blue chips also included equities in the telecommunications sector, whose underweighting was reduced in order to be able to profit from their outperformance. The overweighting of non-cyclical consumer stocks such as food and drinks manufacturers likewise illustrated the more defensive asset allocation. Despite good long-term growth prospects, some selected Chinese securities were DWS INVEST BRIC PLUS Sector allocation Equities: 93.6 Energy Financials Consumer Staples Materials Information Technology Telecommunication Services Consumer Discretionary Industrials Health Care Not classified by MSCI system Cash and other assets 0.5 0.8 8.8 6.7 6.6 6.0 5.3 6.4 11.9 21.6 25.4 0 5 10 15 20 25 30 In % of the fund s net assets As of December 31, 2011 unable to meet expectations in the last year and recorded considerable price losses. In view of the uncertainties surrounding the sovereign debt crisis, equities in the financial sector were significantly underweighted. The underweighting of commodity stocks, in particular, proved advantageous for the performance of the sub-fund. Given the gloomier growth prospects particularly in the second half of 2011 and falling commodity prices, the performance of these was below average. In the oil sector, the sub-fund reduced its position in SembCorp Marine, as the price came under pressure due to weaker oil prices and offshore risks (e.g. temporary drilling restrictions for offshore drilling at some locations). Investments in the energy sector, particularly in equities of companies with a focus on the Chinese demand for coal and Brazilian oil stocks, performed significantly poorer than expected. 21

DWS Invest China Bonds Investment objective and performance in the reporting period The sub-fund, which was launched on August 16, 2011, seeks to achieve sustained capital appreciation. To this end, it invests in bonds of Chinese issuers denominated in or hedged against the renminbi or in renminbidenominated interest-bearing instruments of global issuers. In the short reporting period, the climate was characterized by a slowing economy DWS INVEST CHINA BONDS Performance since inception 100.5 100.0 99.5 99.0 98.5 98.0 97.5 97.0 8/16/11* 8/11 9/11 10/11 11/11 12/11 DWS Invest China Bonds (A2 share class) * Launched on August 16, 2011 = 100 Data on USD basis BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 amid increasing risks due to significantly higher government debt in the Western industrial countries and by severe fluctuations in the currency markets. Against this backdrop, DWS Invest China Bonds recorded a decline of 1.0% per share (LCH share class, in euro; BVI method) in the period since its inception (August 16, 2011) through the end of December 2011. Performance of share classes (in USD) Share class ISIN Since inception 1) Class A2 LU0616856422-1.0% Class E2 LU0616856778-0.7% Class FCH LU0632808951-0.8% Class LCH LU0632805262-1.0% 1) Classes A2, E2, FCH and LDH on August 16, 2011 BVI method performance, i.e., excluding the initial sales charge. Past performance is no guide to future results. As of December 31, 2011 Investment policy in the reporting period The bond sub-fund was in the investment phase and at the end of the year had a bond portfolio of approximately 80% of the sub-fund s assets. In its investments, the management favored corporate bonds (most recently approx. 75%). Smaller positions in government issues rounded out the portfolio. In view of the upheaval in the capital markets worldwide, the management focused its investments on investment-grade bonds. These issues had a credit rating of BBB and better from the leading rating agencies. 22

In terms of sector allocation, the subfund was generally broadly based. Regionally, the focus was on Chinese issues, which made up approximately half of the sub-fund s assets. Moreover, DWS Invest China Bonds invested in other emerging markets such as Russia and Korea, as well as in Western industrial countries such as the United Kingdom, France and Germany. At the end of December 2011, the sub-fund held a cash position DWS INVEST CHINA BONDS Rating distribution of the bonds in the portfolio* AAA AA A BBB AAA AA A BBB 4.9 21.0 18.9 0 10 20 30 40 In % of the fund s net assets in bonds (incl. pro-rata accrued interest) Extremely strong capacity to pay interest and repay principal Very strong capacity to pay interest and repay principal Strong capacity to pay interest and repay principal Adequate capacity to pay interest and repay principal. Adverse economic or sector-specific conditions are more likely to lead to a weakened capacity to pay interest and repay principal. BB to B CCC and lower 55.2 50 60 70 * Average values based primarily on ratings by Standard & Poor s, Moody s and Fitch Credit quality is adequate, with higher business and financial risk. Interest and principal payments are generally made without adverse effect on credit quality. The non-investment-grade rating is consistent with the company s business model. The rating is not consistent with the company s longterm business model. The capacity to pay interest and repay principal is potentially reduced in the long term. As of December 31, 2011 of approximately 25%. It was thus favorably positioned to take advantage of investment opportunities arising in the future. As of the end of December 2011, the sub-fund s investments had an average yield of 2.3% p.a.* with an average term to maturity of 3.2 years. * Average yield of the sub-fund s investments as of the reporting date. This may differ from the nominal yield of the interest-bearing instruments held in the portfolio. The future performance of the sub-fund cannot be derived from this. 23