1 Yale University Presentation March 5, 2003. EPFR: Company Overview Brief History: 1994: EPFR founded (Global Investor Publishing, Inc.), Cambridge,

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Yale University PresentationYale University Presentation

March 5, 2003March 5, 2003

EPFR: Company OverviewEPFR: Company Overview

Brief History:

• 1994: EPFR founded (Global Investor Publishing, Inc.), Cambridge, Massachusetts USA

• 1995-99: Launched Russia Portfolio, Central Europe Portfolio, Brazil Portfolio: publications for institutional investors

• 2000: Acquired Emerging Market Funds Research, Inc.

Principals:

Dwight Ingalsbe – Managing Director/Co-Founder

Brad Durham – Managing Director/Co-Founder

Ian Wilson – Director, Fund Data

Cameron Brandt – Director, Global Markets/Sectors Analysis

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•3200 Equity and Fixed Income Funds with $700b in assets

•Global Emerging Markets (GEM), Asia ex-Japan, Pacific, LatAm, EMEA Regional, Country funds, International/Global funds, Japan country funds, and developed Europe funds

•Assets tracked account for 80-85% of funds in Asia-Pacific ex-Japan region, 90% of fund assets in Africa/Middle East, Emerging Europe, Latin America regions

•Includes funds registered in all of the world’s major domiciles: Luxembourg, USA, Ireland, Canada, Guernsey, Jersey, Cayman, Bahamas, France, etc.

•Data is obtained through direct relationships with fund managers and their administrators developed over more than a decade

The Database

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The Reports

• Equity/BondEquity/Bond Fund Flows DataFund Flows Data: Weekly or : Weekly or MonthlyMonthly

• Country/Regional Weightings DataCountry/Regional Weightings Data

• Country Flows DataCountry Flows Data: Equity Fund Net Buying/Selling by Country

• Sector Weightings DataSector Weightings Data: GICS Level II

• Regional DataRegional Data: Asia-Pacific, LatAm, EMEA

• Company Holdings DataCompany Holdings Data

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EMERGING MARKET & INTERNATIONAL EQUITY FUND FLOWS Month Ended July 31, 2002

Assets BoMMonthly

Net Change

MonthlyNet

Change

MonthlyPortfolio

Chg

MonthlyPortfolio

Chg

MonthlyFlows **

MonthlyFlows

Assets EoM Fund

Fund US$ mill US$ mill % US$ mill % US$ mill % US$ mill Curr Domicile

GLOBAL EMERGING MARKET FUNDS

AAF Global Emerging Markets Equity Fund A 824.875 -124.610 -15.11% -68.494 -8.30% -56.116 -6.80% 700.265 USD Lux

AAF Global Emerging Markets Equity Fund D 0.184 -0.015 -8.07% -0.015 -8.36% 0.001 0.29% 0.169 USD Lux

Aberdeen Emerging Markets Trust 20.993 -1.846 -8.79% -1.881 -8.96% 0.036 0.17% 19.691 GBP UK

Acadian Emerging Markets Fund 39.783 0.607 1.52% -2.115 -5.32% 2.721 6.84% 40.389 USD USA

Ace Fund Emerging Markets 9.134 -1.435 -15.71% -1.215 -13.30% -0.220 -2.41% 7.699 USD Lux

ACM GI Developing Regional Markets Portfolio A 25.654 -7.385 -28.79% -1.903 -7.42% -5.482 -21.37% 18.269 USD Lux

ACM GI Developing Regional Markets Portfolio B 12.591 -1.029 -8.17% -0.942 -7.48% -0.087 -0.69% 11.562 USD Lux

ACM GI Developing Regional Markets Portfolio C2 2.953 -0.223 -7.55% -0.221 -7.48% -0.002 -0.07% 2.730 USD Lux

ACM GI Developing Regional Markets Portfolio I 17.976 -11.748 -65.35% -1.320 -7.34% -10.428 -58.01% 6.228 USD Lux

Activest Lux New Horizon Fund 26.804 -2.218 -8.27% -1.889 -7.05% -0.329 -1.23% 24.386 EUR Lux

Activest New Global Emerging Markets 37.493 -2.525 -6.74% -2.523 -6.73% -0.002 -0.01% 34.685 EUR Lux

AGF Emerging Markets Value Fund 24.621 -1.616 -6.56% -1.291 -5.24% -0.325 -1.32% 22.152 CAD Canada

AIG Dynamic Emerging World Fund plc 32.826 -1.314 -4.00% -1.314 -4.00% 0.000 0.00% 31.512 USD Ireland

AIG Global Emerging Markets Fund A 0.324 -0.041 -12.70% -0.021 -6.37% -0.020 -6.33% 0.282 USD Ireland

AIG Global Emerging Markets Fund C 21.855 -1.391 -6.36% -1.391 -6.36% 0.000 0.00% 20.464 USD Ireland

AIM Developing Markets Fund A 153.237 -15.934 -10.40% -14.360 -9.37% -1.574 -1.03% 137.303 USD USA

AIM Developing Markets Fund B 45.252 -6.513 -14.39% -4.278 -9.45% -2.235 -4.94% 38.740 USD USA

AIM Developing Markets Fund C 3.575 -0.349 -9.77% -0.338 -9.46% -0.011 -0.31% 3.225 USD USA

Altamira Global Discovery Fund 7.938 -0.452 -5.70% -0.317 -3.99% -0.136 -1.71% 7.209 CAD Canada

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As of July 31, 2002 COUNTRY WEIGHTINGS

GLOBAL EMERGING MARKET EQUITY FUNDSUS$ mill % % % % % % % % % %

FUND Fund Size ASIALATIN

AMERICAEUROPE AFRICA &

MID EASTCASH China

Hong Kong

India Indonesia Korea

Boston Company Asset Management Average 51.82 18.97 9.48 11.90 3.01 3.29 2.77 11.74 2.12 15.25Capital International Emerging Markets Fund 3,475.04 50.95 26.59 12.60 5.20 3.18 3.46 0.37 10.04 2.30 18.62Emerging Markets Growth Fund 14,796.58 50.30 27.19 12.71 5.04 2.69 3.43 0.33 9.83 2.32 18.56Emerging Markets Trust 444.80 49.91 26.40 11.94 4.70 5.21 3.24 0.33 9.78 2.25 18.67Capital Research Management Average 50.39 26.73 12.42 4.98 3.69 3.38 0.34 9.88 2.29 18.62CitiEquity Emerging Markets Fund 181.63 53.72 14.93 12.69 17.09 1.57 4.87 0.00 4.85 0.91 22.33Citibank Global Asset Management Average 53.72 14.93 12.69 17.09 1.57 4.87 0.00 4.85 0.91 22.33CG Pays Emergents 6.40 51.24 13.75 21.15 11.73 2.13 3.39 11.94 3.81 8.31 12.94Magellan 64.36 49.87 13.79 20.26 11.19 3.86 6.81 6.28 3.93 7.73 15.05Comgest S.A. Average 50.56 13.77 20.71 11.46 3.00 5.10 9.11 3.87 8.02 14.00Commercial Union PP Emerging Countries Fund 492.45 62.34 14.31 9.00 13.73 0.62 5.50 0.25 5.18 1.19 26.28Commercial Union Investment Management Average 62.34 14.31 9.00 13.73 0.62 5.50 0.25 5.18 1.19 26.28Cordius Invest Emerging Markets 28.81 58.90 16.40 8.90 13.80 1.40 6.90 0.00 4.30 1.60 25.50Cordius Asset Management Average 58.90 16.40 8.90 13.80 1.40 6.90 0.00 4.30 1.60 25.50CS Equity Fund Emerging Markets Fund 196.24 62.80 11.70 7.34 13.37 4.79 1.28 5.32 5.45 1.06 26.52Credit Suisse Asset Management Average 62.80 11.70 7.34 13.37 4.79 1.28 5.32 5.45 1.06 26.52Deutsche Emerging Markets Equity Fund Inst 106.14 54.27 14.22 10.64 13.32 7.55 6.30 0.00 6.17 1.64 21.68Deutsche GSF Global Emerging Markets Fund 726.37 57.64 14.21 10.94 13.94 3.27 6.67 0.00 6.18 1.66 22.97Deutsche Asset Management Average 55.96 14.22 10.79 13.63 5.41 6.49 0.00 6.18 1.65 22.33Dresdner GDF Emerging Markets Fund 9.06 55.11 15.99 10.64 14.83 3.43 7.96 0.00 3.93 1.27 22.30Dresdner RCM Global Advisors Average 55.11 15.99 10.64 14.83 3.43 7.96 0.00 3.93 1.27 22.30Driehaus Emerging Markets Growth Fund 36.38 57.37 13.11 14.99 9.21 5.32 7.99 0.71 2.46 4.00 18.16

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INDUSTRY GROUP WEIGHTINGS/GICS II - ASIA EX-JAPAN REGIONAL EQUITY FUNDS

FUND Size US$ mill Energy MaterialsCapital Goods

Commercial Services & Supplies

TransportationAutomobiles & Components

% % % % % %

GMO Asia Fund 120.234 4.03 8.97 2.09 0.00 3.31 2.73Grantham, Mayo, van Otterloo Average 4.03 8.97 2.09 0.00 3.31 2.73HSBC AsiaPacific Fund 24.937 0.85 7.67 3.37 1.75 4.82 3.43HSBC GIF Asian Equity Fund 150.592 0.97 10.48 10.70 0.84 8.66 3.16HSBC GIF Asian Opportunties Fund 36.415 0.92 11.02 11.08 0.58 8.82 3.40ING Asia-Pacific Equity Fund 10.748 6.28 5.72 5.00 0.00 5.66 0.00HSBC Asset Management Average 2.26 8.72 7.54 0.79 6.99 2.50LG Asian Smaller Companies Fund Limited 56.480 0.00 3.60 11.90 0.90 0.00 1.00Oppenheim East Asia Special Fund 211.430 1.40 7.90 3.30 0.00 8.60 12.10Lloyd George Management Average 0.70 5.75 7.60 0.45 4.30 6.55Matthews Asian Growth & Income Fund 121.208 2.40 1.60 0.00 0.00 2.70 4.00Matthews Pacific Tiger Fund 127.918 0.00 2.20 0.00 2.30 0.00 1.60Matthews International Capital Management Average 1.20 1.90 0.00 1.15 1.35 2.80Merrill Lynch IIF Asian Emerging Markets Fund 59.108 2.79 14.29 1.29 0.00 0.50 6.62Merrill Lynch Investment Managers Average 2.79 14.29 1.29 0.00 0.50 6.62Morgan Stanley IF Asian Equity Portfolio 47.049 1.10 5.98 6.12 0.41 4.21 4.29Morgan Stanley SICAV Asian Equity Fund 165.165 0.95 5.66 8.48 0.00 3.81 5.41Van Kampen Asian Equity Fund 69.612 1.05 5.97 4.56 0.39 4.07 5.58Morgan Stanley Investment Management Average 1.03 5.87 6.39 0.27 4.03 5.09Liberty Newport Tiger Fund 506.761 0.00 0.00 5.66 0.00 0.00 0.00Newport Pacific Management Average 0.00 0.00 5.66 0.00 0.00 0.00Pictet Institutional Fund Asian Equities 76.431 3.08 14.98 8.17 1.92 5.65 1.23Pictet Asset Management Average 3.08 14.98 8.17 1.92 5.65 1.23M&G South-East Asia Fund 166.357 1.85 4.57 3.32 0.00 1.35 1.24Prudential Portfolio Managers Average 1.85 4.57 3.32 0.00 1.35 1.24Schroder Pacific Growth Fund 223.774 3.95 0.00 2.64 0.50 3.31 2.69Schroder Investment Management Average 3.95 0.00 2.64 0.50 3.31 2.69Scudder Pacific Opportunities Fund 91.521 2.89 11.90 1.09 0.00 1.91 3.21Scudder Kemper Investments Average 2.89 11.90 1.09 0.00 1.91 3.21Sogelux Fd Equities Emerging Asia 12.112 1.42 8.40 1.55 2.41 2.56 6.68Societe Generale Asset Management Average 1.42 8.40 1.55 2.41 2.56 6.68Threadneedle Asian Growth Fund 272.602 1.78 12.66 7.64 0.00 5.41 1.95Threadneedle Investment Management Average 1.78 12.66 7.64 0.00 5.41 1.95Peer Average 3,641.207 1.59 7.46 4.75 1.05 3.34 2.93

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CROSS BORDER COUNTRY FLOWS (AGGREGATE) Month Ending February 1, 2003

Mkt Value ofHoldings

Beginning of Month

Increase (decrease)Mkt Value of Holdings

during month

Net Purchases(Sales) forthe Month

Net Purchases(Sales) as %

of BoM Holdings

Country US$ mill US$ mill US$ mill %

ALL FUNDS COMBINED

Bangladesh 1.250 -0.062 -0.008 -0.62%

China 4,006.720 191.524 218.946 5.46%

India 5,418.970 -223.467 68.937 1.27%

Indonesia 1,155.020 -143.879 58.719 5.08%

Korea 15,230.540 -660.712 74.942 0.49%

Malaysia 1,992.300 77.222 21.118 1.06%

Pakistan 6.800 -0.521 0.161 2.37%

Philippines 457.730 20.159 4.321 0.94%

Sri Lanka 43.510 -1.083 0.023 0.05%

Taiwan 5,466.380 663.780 -267.020 -4.88%

Thailand 1,896.930 136.473 -21.713 -1.14%

All Funds: Total Emerging Asia 35,676.150 59.433 158.427 0.44%

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COUNTRYNavigator

EPFR-Smart Money Index

-----------GEM / LatAm fund

aggregate weightings

Country Bets

-----------Largest GEM equity fund

country bets

Country Flows-----------

Fund manager net

buying/selling% of total

assets

CumulativeCountry Flows

-----------YTD cumulative fund net buying / selling

in $USm

Top EquityHoldings

-----------Combined GEM,

LatAm regional and country funds

Argentina

GEM Funds0.13%

LatAm Funds0.71%

Gartmore PSF Emerging Markets

Strategy Fund:

2.41%

+6.05%

1. Quilmes Industrial: $14.89m

2. Telecom Argentina: $9.59m

3. Siderca: $4.50m

Brazil

GEM Funds6.55%

LatAm Funds 36.20%

AGF Emerging Markets Value

Fund:

11.60%

-0.78%

1. CVRD: $570.07m

2. Petrobras: $536.56m

3. Ambev: $409.07m

Chile

GEM Funds 0.85%

LatAm Funds7.80%*

Genesis Emerging Markets Fund:

6.39%

+0.02

1. Cia. Telecom. Chile: $107.87m

2. Antofagasta Holdings: $63.6m

3. Banco Santander: $54.86m

Latin America Matrix

-

50

100

150

-501001502002503003504004505005506006507007508008509009501, 00

0

1, 05

0

1, 1001, 1501, 20

0

1, 25

0

1, 30

0

1, 35

0

1, 40

0

1, 45

0

-

50

100

150

200

250

300

(8)

(6)

(4)

(2)

-

2

(1, 95

0)

(1, 90

0)

(1, 85

0)

(1, 80

0)

(1, 75

0)

(1, 70

0)

(1, 65

0)

(1, 60

0)

(1, 55

0)

(1, 50

0)

(1, 45

0)

(1, 40

0)

(1, 35

0)

(1, 30

0)

(1, 25

0)

(1, 20

0)

(1, 150

)

(1, 100

)

(1, 05

0)

(1, 00

0)(950)(900)(850)(800)(750)(700)(650)(600)(550)(500)(450)(400)(350)(300)(250)(200)(150)(100)(50)-

(100)

(50)

-

-

10

20

30

(150)

(100)

(50)

-

50

100

150

-

50

100

150

-

500

1,000

1,500

-

50

100

150

200

250

300

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EPFR CLIENTSEPFR CLIENTS

• Clients are leading global investment banks, brokerages and institutional investors. Partial list includes:

• ABN AMRO • Batterymarch Financial • BNP Paribas

• Bear Stearns • BV Capital • CLSA Emerging Markets

• CSFB • Deutsche Bank • Goldman Sachs

• Hyundai Securities • HSBC • ING Barings

• J.P. Morgan Chase • Fidelity Investments • Merrill Lynch

• Morgan Stanley • Nomura Securities • Pictet Asset Management

• Schroders AM • Salomon Smith Barney • State Street Global Advisors

CLIENTSCLIENTS

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PM Strategy/Insights

• Original, investment oriented research for investment management firms on international/emerging markets

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PM Outlook on Emerging Markets: sentiment improving

- EMs drawing attention for the right reasons for first time since early 90's

- Three years of outperformance of developed markets 

- Valuations compelling v. developed world: GEMs at forecasted ‘03 p/e of 8.6x

- Corporate governance gap narrowed in wake of Enron, WorldCom, et al. 

- Earnings growth sounder, higher dividend yield than developed markets 

- Commodities: EM universe a good way to play commodities cycle

13

Risk Factors to the Rosy Scenario

- Double dip recession/deflation scenario

- Prolonged war with Iraq: dampening growth forecasts 

- PMs prefer a bad certainty to uncertainty

14

General Trends in EM fund management

EM Converging into International Asset AllocationEM Converging into International Asset Allocation  - EAFE to ACWI - EPFR fund mergers/liquidations rising - EM portfolio management teams absorbed into international groups

- Giving EMs a neutral weighting in a bigger pool of assets ($1 trillion+) good for EMs  Country v. Sector in Asset AllocationCountry v. Sector in Asset Allocation

- Do equity returns depend more on global sector factors or country factors? - In recent years funds have adopted a sector approach due to rising correlation of countries - EMs the exception: Country factors still more important - Low country correlation = higher diversification = lower risk

15

Trends in the fund data

Investors paying more attention to fund flowsInvestors paying more attention to fund flows

• 2002 first year of US mutual fund outflows since year after '87 market crash

• Previously taken for granted

Why follow fund flows?Why follow fund flows?

• Signal a broadening or contracting of the investor base

• Indicate shifts in risk aversion to the asset class

• Provide evidence of trend chasing

• Show changes in liquidity

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2002: Only Asia ex-Japan equity, EM bonds attract inflows

2002 Emerging Market Fund Flows

-2,500.000

-2,000.000

-1,500.000

-1,000.000

-500.000

0.000

500.000

1,000.000

1,500.000

Source: EmergingPortfolio.com Fund Research

In U

S$

millio

ns

EM Equity Asia ex-Japan Equity LatAm Equity EMEA Equity EM Bond

17

EM Bond Fund Flows

- Last week's EM bond inflows historic high

- 2002 first year of positiveinflows into bond funds

- EM bond funds return + 17% p.a. past 5 years - EM bonds poor reputation: sovereigns safer than you think

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Regional Allocation Themes

Asia near all-time high in GEM equity fund weightings: 53.7%Asia near all-time high in GEM equity fund weightings: 53.7%

GEM Equity Fund Regional WeightingsJan. '96 - Aug. 2002

0.00

10.00

20.00

30.00

40.00

50.00

60.00

% o

f to

tal

ne

t a

ss

ets

Asia

Latin America

Europe

Africa & Mideast

Cash

19

Regional Allocation Themes

Demise of the LatAm regional fundDemise of the LatAm regional fund

Latin America Equity Fund FlowsJan-96 to Nov-02

-800.000

-600.000

-400.000

-200.000

0.000

200.000

400.000

600.000

Source: EmergingPortfolio.com Fund Research

Mo

nth

ly, in

US

$ m

illio

ns

-6000

-5000

-4000

-3000

-2000

-1000

0

1000

2000

Cu

mu

lati

ve

, in

US

$ m

illio

ns

Monthly Flows Cumulative Flows

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Country Allocation Themes

• GEM funds enter ’03 with key overweights in Brazil, India, Russia and Thailand

• Will these country bets help funds beat their benchmark in the year ahead?

• Year to date index returnsYear to date index returns

Russia: +7.54%Thailand: +6.83%Inida: -3.07%Brazil: -8.02%

21

-2000

-1500

-1000

-500

0

500

1000

1500B

razil

Ma

laysia

Ch

ina

Ru

ssia

Isra

el

Th

aila

nd

Ch

ile

Arg

en

tin

a

Cro

atia

Tu

rke

y

Pe

ru

Cze

ch

Re

p

So

uth

Afr

ica

Hu

ng

ary

Ph

ilip

pin

es

Po

lan

d

Ind

ia

Ho

ng

Ko

ng

Ind

on

esia

Sin

ga

po

re

Ta

iwa

n

Me

xic

o

Ko

rea

Source: EmergingPortfolio.com Fund Research* Fund net buying/selling based on 700 funds with $150b in assets

Emerging Market Country Flows* YTD - Nov 1In US$ millions

Country Allocation Themes