Marketing Communication Investment objectives Analytic s philosophy seeks to exploit inefficiency in global developed markets ( World) by building a long portfolio with exposure to fundamental factors that generate alpha and by shorting high risk stocks with poor fundamental factor exposure. Reduce volatility and equity market risk Maintain approximately % less risk than the World Index Maintain Equity Market Beta in the.4 -.6 range Target equity-like return 8-12% total return target Outperform in falling markets Lag in risk-seeking markets Keep up in moderately rising markets Equity long/short Select stocks (long and short) from the global equity universe ( World) Portfolio holdings % long 3% short, 7% net exposure Transparent, highly liquid equity portfolio Risk versus return 1 December 29 (Inception) - August 218 Annuliazed % World Net, % 3 Month T-Bill Total, Net HFRI Equity Hedge Index World Index, Net 2 Annualized Standard Deviation (%) Standard Deviation (%) Alpha (%) % Long, Net 3.4.63 2.4 3% Short, Net 3 -.37 3.9 2.89 Total, Net.17 7..34 HFRI Equity Hedge Index.27 6.72 World Index, Net 9.78 12.6 % World Net,.16 6.28 % 3 Month T-Bill Past performance is not indicative of future results. Investment performance 1 Historical returns (%) 3 2 2 - - -.9.4.8.71 9.8 1.31 1.6.64 2.42-4.8 Down Market <% -4.2 3.12 2.6 2.64 3.6 7.46 6.69 7.7 7.26 9.1 3. 8.7 8. 6.96 6.34 6.8 Moderately Rising Market % to 12% 11.44.8.8.38 12.8 11.28.72.48.71.8.7.17 19.2.27.16 1 Month 3 Months YTD 1 Year 3 Year Year 7 Year Since Inc ep tion (12/1/9) Analytic Investors I Composite Gross Analytic Investors I Composite Net HFRI Equity Hedge (Total) Index % World Index, % 3 Month T-Bill Past performance is not indicative of future results. Downside protection, up-market participation 1 Portfolio characteristics 2 % Long 3% Short Sharply Rising Market >12% Analytic Investors I Composite, Gross HFRI Equity Hedge Index, Net World Index, Net World Barra Predicted Beta 3.9 1.29.97 Median Market Cap $12.7 B $.7 B $13.6 B Price to Book 2.7x 2.6x 2.x PE (1-year EPS forecast) 14.1x 31.2x.7x Dividend Yield 2.2% 1.1% 2.3% Long-term growth forecast 9.3% 26.7% 12.% Number of Stocks 118 37 1,622 1 Source: Wells Capital Management. 2 This information is based on a representative account within the Analytic Investors I Composite. The representative account has been selected by meeting the following criteria: 1) the account is in the Analytic Investors I Composite, 2) Wells Capital represents that the holdings, characteristics and risk profile are representative of the strategy/style of the Analytic Investors I Composite. Any changes to the representative account must be approved by one of the Co-Heads of Portfolio Risk Management and Analytics. All currency figures in USD. Source: FactSet. 3 Source: Analytic Investors. Note: The GIPS compliant presentation can be found at the end of this presentation, including information on net returns. All returns for periods greater than one year are annualized. FOR PROFESSIONAL INVESTORS ONLY 1
Largest absolute positions 2 Global L/S Beta Equity (%) Broadridge Financial Solutions, Inc. 3.2.9 Entergy Corporation 3.1.2 Rakuten, Inc. 2.6.9 Cisco Systems, Inc. 2. 1. Expeditors International of Washington, Inc. 2..9 Autodesk, Inc. -1.9 1.3 EQT Corporation -1.8 1.4 General Electric Company -1.8 1. Zayo Group Holdings, Inc. -1.7.6 Melrose Industries PLC -1.7 1. Sector exposure (%) 1 Global L/S Equity WORLD NET7 Variation Consumer Discretionary 24.2 8.9.3 Consumer Staples 6..6.9 Energy 2. 4. -2.4 Financials 4.7 11.6-6.9 Health Care -3.1 8.9-12. Industrials 17.8 7.8 9.9 Information Technology 19.8 13. 6.3 Materials -2.4 3.3 -.7 Real Estate 1.4 2.1 -.6 Telecommunication Services -3. 1.8 -.3 Utilities 3.7 2. 1.6 Region exposure (%) 1 Global L/S Equity WORLD NET7 Variation Asia ex Japan 2. 2.9 -.4 Europe ex UK 13. 11.1 2.4 Japan.2.8 4.4 United Kingdom -.7 4.2-4.9 US/Canada 46.2 46..2 Investment team Harindra de Silva, Ph.D., CFA Dennis Bein, CFA Ryan Brown, CFA Monisha Jayakumar David Krider, CFA Greg McMurran Megan Miller, CFA Andrew Claeys, CFA Doug Savarese, CFA Zhuanxin Ding, Ph.D. Lucy Jin, Ph.D. Patrick Neal, Ph.D. Flora Tan, CFA Aarsh Sachdeva John Lyon, CFA Kevin Cole, CFA Frank Jiang, CFA John Mahler Matt Robinson, CFA George Matthews, CFA Robb Ruhr, CFA Consultant team Roger Clark, Ph.D. Steven Thorley, Ph.D., CFA Position Director of Trading Research Advisor Risk Analyst Senior Portfolio Specialist Portfolio Specialist Position Research Consultant Research Consultant 1 This information is based on a representative account within the Analytic Investors I Composite. The representative account has been selected by meeting the following criteria: 1) the account is in the Analytic Investors I Composite, 2) Wells Capital represents that the holdings, characteristics and risk profile are representative of the strategy/style of the Analytic Investors I Composite. Any changes to the representative account must be approved by one of the Co-Heads of Portfolio Risk Management and Analytics. 2 Ten largest/smallest company weights are based on market value of the representative account and not necessarily held in all client portfolios. The information shown is not intended to be, nor should it be construed to be, a recommendation to buy or sell an individual security. Past performance is not indicative of future results. A list of all holdings from the prior one-year period is available upon request. Source: FactSet & Barra Note: CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. 2
Analytic Investors I As of August 31, 218 Inception since: 12/1/29 Gross ITD.7 Standard deviation (%) 7. Net ITD.17 Sharpe ratio 1.29 % World/% 3M TBill ITD.16 Tracking error 8.66 Value-Added.9 Reporting currency USD Benchmark: % World/% 3M TBill Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4 YTD 218 Gross 3.96-3.4 -.43.64.78-1. 1.73.9.37.41 3.12 Net 3.9-3.9 -.49.9.72-1. 1.67.4.2.2 2.6 % World/% 3M TBill 2.7-2.2-1.2.64.39.6 1.64.71 -.41 1.9 3.6 Value Added (Gross) 1.26-1.1.9 -.1.39-1.6.9 -.12.78 -.68.6 217 Gross 2.61 2.1 -.4.3 1.78.93 1.6 2. 1.9.44 1.79.83 4.76 3.8.28 3.9 17.21 Net 2. 2.46 -.46.29 1.72.88 1. 2.49 1.4.39 1.74.78 4.9 2.91. 2.92 16.44 % World/% 3M TBill 1.23 1.41.4.77 1.8.23 1.24.12 1.16.99 1.12.72 3.21 2. 2.4 2.87 11.16 Value Added (Gross) 1.38 1. -.94 -.42.69.7.32 2.43 -.8 -..67. 1..98 2.74.22 6. 216 Gross -1.81.36 4.48-3.74 3.2-3.4 3.9-1.67.87 -.92.17.8 2.96-3.8 2.2.4 1.26 Net -1.8.31 4.42-3.79 2.97-3. 3.3-1.72.81 -.97.12.74 2.81-4. 2.8 -.13.62 % World/% 3M TBill -2.99 -.36 3.42.8.29 -.4 2.13..29 -.96.73 1.22 -.4.4 2.48.98 4. Value Added (Gross) 1.18.72 1.6-4.4 2.74-2..96-1.72.8.4 -.6 -.42 3. -4.39 -.23 -.94-2.74 2 Gross.4.99.93-1.98 2.99 -.19 6.28-2.13 1.1 2.72 -. 1.2 2.33.77.6 3.91 12.7 Net.37.97.89-2.1 2.96 -.22 6.24-2.17.98 2.68 -.14 1.2 2.2.67 4.9 3.77 12.9 % World/% 3M TBill -.9 2.93 -.78 1.17.17-1.16.9-3.3-1.84 3.96 -.2 -.86 1.2.17-4.23 2.81 -.19 Value Added (Gross) 1.3-1.94 1.71-3.16 2.82.98.38 1.17 2.8-1.24. 2.11 1.13.9 9.29 1. 12.76 214 Gross -3.1 3.7 1.7.94.93 2. -1.26 1. -2.63 1.97 3.46 1.44 2.4 4.48-2.8 7.1.89 Net -3.4 3. 1.4.91.9 2.2-1.29 1.7-2.66 1.94 3.43 1.41 1.9 4.39-2.89 6.92. % World/% 3M TBill -1.8 2..7.1.98.9 -.8 1. -1.3.32 1. -.81.68 2.41-1.6.1 2.4 Value Added (Gross) -1.16 1.7 1..42 -. 1.66 -.46 -.1-1.27 1.64 2.46 2.24 1.3 2.7-1.74 6. 8.34 213 Gross 4.92 2.23 2.73 3.18-1.6-1.74 2.39-2.72 2.7 4.42 3.8 1.8.19 -.29 2.29 9.7 23.14 Net 4.89 2.19 2.69 3.14-1.69-1.78 2.36-2.7 2.68 4.39 3. 1.77.7 -.41 2.21 9.47 22.66 % World/% 3M TBill 2..8 1.18 1.8.2-1.23 2.64-1.6 2. 1.96.89 1.6 3.84.3 4.9 3.96 12.76 Value Added (Gross) 2.38 2. 1. 1.6-1.67 -.1 -.2-1.66.2 2.46 2.18.74 6.3 -.6-1.79.61.38 212 Gross 3.29.76 1.78 1.83 -.8 1.96 1.6 1.3. -.9 1.46.2.93-1.4 2.77 1.12 8.49 Net 3.2.73 1.7 1.79 -.12 1.92 1.3.99.12 -.63 1.43.21.81-1.6 2.6 1. 8. % World/% 3M TBill 2.1 2.44.6 -.7-4.31 2..6 1.27 1.38 -.33.6.9.69-2.42 3.34 1.26 7.92 Value Added (Gross).78-1.68 1.14 2.4 -.77 -.6.92 -.24-1.23 -.2.82 -.7.24.97 -.7 -..7 211 Gross -.78.6 1.9 4.41 2. -.28 -.21-1.78-1.66 4.78-1.7 1.8.9 6.26-3.61.3 8.82 Net -.82.7 1. 4.37 2.1 -.32 -.2-1.82-1.69 4.7-1.11 1.4.79 6.14-3.72.19 8.33 % World/% 3M TBill 1.13 1.76 -.48 2.13-1.3 -.79 -.91-3.1-4.32.17-1.22 -.3 2.42.28-8.2 3.86-2.42 Value Added (Gross) -1.92-1. 1.7 2.28 3.9..7 1.73 2.66 -.39. 1.61-1.2.97 4.9 1.4 11.23 2 Gross -1.77 1.47 2.7. -4.12 -.8 2.21-2.74 4.6 3.36 -.69 4.17 2.24-4.8 3.97 6.93 8.46 Net -1.82 1.41 2.1.4-4.18 -.64 2. -2.8 4.3 3.32 -.73 4.14 2. -4.76 3.79 6.81 7.7 % World/% 3M TBill -2.6.71 3..1-4.78-1.71 4.6-1.86 4.66 1.87-1.8 3.69 1.68-6.4 6.89 4.49 6.31 Value Added (Gross).29.76 -.3.9.66 1.13-1.86 -.88 -.7 1.49.39.49. 1.82-2.92 2.44 2. 29 Gross 1.46 1.46 Net 1.4 1.4 % World/% 3M TBill.9.9 Value Added (Gross).6.6 All returns for periods greater than one year are annualized. Performance is presented gross and net of fees. Past performance is not indicative of future results. Sources: Wells Capital Management, Analytic Investors. Note: The GIPS compliant presentation can be found at the end of this presentation, including information on net returns. 3
GIPS Compliant Presentation Composite Assets Total Firm Assets Total Firm Assets w/ Overlay Period Gross Annual Net Annual Primary Index Secondary Index Composite Primary Index Secondary Index Internal Dispersion (%) Number of Accounts 217 17.21 16.44 14.39 22.4 6.98.8.23 N.A. 1,446.7 38,111 386,762 216 1.26.62.46 7.1 7.81.91.92 N.A. 4 1,41.7 N.A. N.A. 2 12.7 12.9 -.97 -.87 7.7.1.8 N.A. 3 431. N.A. N.A. 214.89. 1.81 4.94 7.61.73.23 N.A. 2 111.7 N.A. N.A. 213 23.14 22.66 14.28 26.68 7.66 7.8 13.4 N.A. 1 93.8 N.A. N.A. 212 8.49 8. 7.41.83 7.87 8.78 16.74 N.A. 1 76.8 N.A. N.A. 211 8.82 8.33-8.38 -.4 N.A. N.A. N.A. N.A. 1 77. N.A. N.A. 2 8.46 7.7.4 11.76 N.A. N.A. N.A. N.A. 1 76.8 N.A. N.A. 29 (IP) 1.46 1.4 2.7 1.8 N.A. N.A. N.A. N.A. 1 68.8 N.A. N.A. Source: Wells Capital Management IP = Returns are for the period from December 1, 29 (Inception) through December 31, 29. Primary Index = HFRI Equity Hedge (Total) Index Secondary Index = World (Net) 1. Wells Capital Management ( WellsCap ) claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with the GIPS standards. WellsCap has been independently verified for the periods from January 1, 1997 through December 31, 217. 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 Analytic Investors Global Long/Short Equity I Composite has been examined for the periods from December 1, 29 through December 31, 217. The verification and performance examination reports are available upon request. 2. WellsCap is a registered investment adviser and a wholly owned subsidiary of Wells Fargo Asset Management Holdings, LLC. Since the firm s creation in 1996, the firm has acquired a number of investment teams and/or assets through mergers and acquisitions. These include assets and/or investment teams from Norwest Investment Management Inc., Sutter Advisors, LLC, Montgomery Asset Management, Benson Associates, Strong Financial Corporation, Evergreen Investments, First International Advisors, LLC, Metropolitan West Capital Management, LLC, EverKey Global Partners, ECM Asset Management Limited and Analytic Investors, LLC. In addition, Golden Capital Management, LLC was added to the firm effective September 3, 217. In all cases, the investment teams involved in each acquisition and merger remain autonomous teams within WellsCap. 3. The Analytic Investors I Composite ( Composite ) consists of all discretionary accounts managed in this style. From a GIPS perspective, the Analytic Investors team joined WellsCap at close of business March 31, 217 and as such the Total Firm Assets are only applicable since the date of acquisition. The strategy consists of long-short equity portfolios investing in global developed equity securities, maintaining a target beta of.. For every $ invested, the strategy buys up to $ in securities and sells short up to $3 in securities. Investment results are measured versus the HFRI Equity Hedge (Total) Index, representing the broad global developed markets. The World (Net) Index is a secondary index. Prior to March 1, 214, the World (Net) Index was the primary index; the index change was made in 214, for all subsequent periods, to better align the composite s equity exposure and risk expectations with those of the index. The Composite creation date and inception date is December 1, 29. Performance shown prior to April 1, 217 represents results achieved by the Analytic Investors team prior to their acquisition by WellsCap. 4. Composite returns are net of transaction costs and non-reclaimable withholding taxes, if any, are expressed in U.S. dollars, and reflect the reinvestment of dividends and other earnings. Gross composite returns do not reflect the deduction of investment advisory fees. Net composite returns are calculated using actual investment advisory fees. The Composite may contain accounts with performance-based fees. Net returns are net of any performance-based fees. WellsCap s fee schedules are available upon request and may also be found in Part 2 of Form ADV. The published fee schedule for this strategy is 1.% on all assets under management, plus 2 percent of the 12-month incremental return over a pre-determined threshold. Additional information regarding WellsCap s policies for valuing accounts, calculating performance and preparing compliant presentations are available upon request.. Effective January 1, 217, internal dispersion is the equal-weighted standard deviation of the annual gross returns of all accounts included in the composite for the entire year. Prior to January 1, 217, internal dispersion was calculated using the asset-weighted standard deviation of all accounts included in the composite for the entire year. For years where there are or fewer accounts in the composite for the entire year, dispersion is not presented as it is not a meaningful statistical calculation. The 3-year annualized standard deviation measures the variability of the gross composite returns and the index returns over the preceding 36-month time period. The notation N.A. (not available) will appear for periods, if any, where 36 monthly returns are not available for the composite and/or the index. 6. Index returns are provided to represent the investment environment existing during the time periods shown and are not covered by the report of independent verifiers. The HFRI Monthly Indices ( HFRI ) are a series of benchmarks designed to reflect hedge fund industry performance by constructing equally weighted composites of constituent funds, as reported by the hedge fund managers listed within HFR Database. The HFRI ranges in breadth from the industry-level view of the HFRI Fund Weighted Composite Index, which encompasses over 2 funds, to the increasingly specific-level of the sub-strategy classifications. Equity Hedge strategies maintain positions both long and short in primarily equity and equity derivative securities. A wide variety of investment processes can be employed to arrive at an investment decision, including both quantitative and fundamental techniques; strategies can be broadly diversified or narrowly focused on specific sectors and can range broadly in terms of levels of net exposure, leverage employed, holding period, concentrations of market capitalizations and valuation ranges of typical portfolios. Equity Hedge managers would typically maintain at least % exposure to, and may in some cases be substantially entirely invested in equities, both long and short. The historical returns of the HFRI Benchmarks may be amended by the provider to reflect manager universe updates. These updates sometimes occur months after HFRI Benchmark returns are published. Accordingly, HFRI Benchmark returns are fixed at the point of inclusion and remain unchanged until the next annual update. The World (Net) Index is a market-capitalization weighted index that measures the equity market performance of developed markets. The Index is fully invested, which includes the reinvestment of income. The returns for the Index do not include any transaction costs, management fees or other expenses. 7. Actual performance results may differ from composite returns, depending on the size of the account, investment guidelines and/or restrictions, inception date and other factors. Performance for some accounts in this composite may be calculated by third-parties that use different security pricing and performance methodologies. Past performance is not indicative of future results. As with any investment vehicle, there is always the potential for gains as well as the possibility of losses. The firm s registration as an Investment Adviser does not imply any level of skill or training. For a complete list of WellsCap composite descriptions, please see https://wellscap.com/about-us/business-risk-compliance.jsp. 4
makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Foreign investments are especially volatile and can rise or fall dramatically due to differences in the political and economic conditions of the host country. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This strategy is exposed to smaller-company securities risk. Consult the investments offering document, investment management agreement, and/or the adviser s Form ADV Part 2 for additional information on these and other risks. Wells Fargo Asset Management (WFAM) is a trade name used by the asset management businesses of Wells Fargo & Company. WFAM includes but is not limited to Analytic Investors, LLC; ECM Asset Management Ltd.; Galliard Capital Management, Inc.; Wells Capital Management Inc.; Wells Fargo Asset Management (International), LLC; Wells Fargo Asset Management Luxembourg S.A.; Wells Fargo Funds Distributor, LLC; and Wells Fargo Funds Management, LLC. Wells Capital Management does not serve as an independent advice fiduciary during the sales process to any investor. WCM 3692 918