Vontobel Asset Management & Investment Funds

1. Vontobel Asset Management& Investment Funds Emerging Markets: Good Buy or Goodbye? Referent: Rajiv Jain, Portfolio Manager International Managing Director, Vontobel Asset Management, Inc., New York

2. Emerging Markets So far on passing lane Source: HANDELSBLATT, 11/11/2005, p. 39

3. Solid macro data as safeguard against volatility? Excerpted from: “The Continuing Case for Emerging Markets, Revisited” Everest Capital, February 2005

4. Leading productivity Emerging Markets offer some of the most productive corporations on the basis of RoE Source: Bernstein Research and Everest Capital, February 2005

5. AsiaMore and more independent of global economy

6. Low CorrelationGood Diversification Source: Bloomberg, Monthly Data for MSCI and IFC Indices, Gross Total Returns in USD 12/31/98 - 12/31/2004

7. ChinaReal GDP Growth vs. Total Return of the Market The real GDP growth compounded 9% in China relative to a stock market return of -2%!! Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) from FactSet Aggregates.

8. IndiaReal GDP Growth vs. Total Return of the Market The real GDP growth compounded 6% relative to a USD return of 8%. Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) from FactSet Aggregates.

9. South KoreaReal GDP Growth vs. Total Return of the Market The real GDP growth compounded 7% relative to a USD return of 3%. Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) from FactSet Aggregates.

10. ChinaValuations and Earnings growth matter Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) and valuation from FactSet Aggregates.

11. IndiaValuations and Earnings growth matter Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) and valuation from FactSet Aggregates.

12. South KoreaValuations and Earnings growth matter Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) and valuation from FactSet Aggregates.

13. Market ValuationsDividend Yields Over Last 20 Years 5.00 Asia/Pacific ex Japan Japan World 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Nov-85 Nov-86 Nov-87 Nov-88 Nov-89 Nov-90 Nov-91 Nov-92 Nov-93 Nov-94 Nov-95 Nov-96 Nov-97 Nov-98 Nov-99 Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Source: FactSet Aggregates

14. Selected stocksExamples

15. Unilever IndonesiaEPS Growth Positively Correlates with Price Performance Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) and valuation from FactSet Aggregates.

16. Lotte ConfectionaryEPS Growth Positively Correlates with Price Performance Sources: Real GDP Growth from IMF: Directions of Trade, years before 1999 and World Bank Data, years 2000-2004. Total Return Index (USD) and valuation from FactSet Aggregates.

17. Hero Honda MotorsEPS Growth Positively Correlates with Price Performance Source: FactSet; as of Nov. 30, 2005.

18. Grupo ModeloMexico • Founded in 1925, Grupo Modelo is the leader in the production, distribution, and sale of beer in Mexico (over 60% market share). • Brands: Corona, Negra Modelo, Pacifico and more. • Exclusive Mexican importer and distributor of Anheuser-Busch beers (Budweiser, Bud Light). • Anheuser-Busch owns about 50% of Grupo Modelo. • Sales growth of 8% annually over last 10 years. • Operating margin >20%, ROE >10%; No long term debt. • Dividend yield of 3%. • Forward P/E of 16x. • Market Cap: $US 10.5 bn. As of 9/26/05

19. Grupo Modelo

20. Growth vs. ValueOur Definition Classical Growth = High Prices, High Earning Growth "Stars" High Earnings Growth, Low Prices "Looser" High Prices, Low Earnings Growth Classical Value = Low Prices, Low Earnings Growth

21. Attractive Growth and Undervaluation

22. Investment Process

23. Vontobel Fund - Emerging Markets EquityPerformance as of 12/31/2005 Rating as of 12/31/2005

24. Emerging Markets EquityUp/Down Market Analysis, ending December 2005

25. Equity Funds Emerging Markets global Return-Risk-Spread sheet last 3 years

26. Vontobel Fund - Far East EquityPerformance as of 12/30/2005 Rating as of 12/31/2005

27. Far East EquityUp/Down Market Analysis, ending December 2005

28. Equity Funds Far East ex Japan Return-Risk-Spread sheet last 3 years

29. OutlookDon’t expect to see a break in flows until bad things happen

30. Sector Winners: Energy, Materials and TechnologyTrend going on?

31. ROE of Energy and Materials stocksPeaking?

32. Conclusions Positive: • Still attractive valuations absolutely, historically and relatively • High productivity • Solid macro data • Asia: More and more independent of US economy • Low Correlation - Good Diversification Negative: • Negative growth surprise • Exogenous shock (bird flu, terrorism) • Optimism relative to Emerging Markets is probably peaking • Earnings and productivity at record levels • High oil price and rising interest rates  EM are an essential element of a Global Equity Portfolio  Outperformance by Buying Quality in Emerging Markets!

33. Thank you for your attention!