0. DWS alternatives suite
A compelling option for alternative investing

1. Important risk information
Although allocation among different asset categories generally limits risk, the investment advisor may favor an asset category that underperforms other assets or markets as a whole. The funds expect to invest in underlying funds that emphasize alternatives or nontraditional asset categories or investment strategies, and as a result, it is subject to the risk factors of those underlying funds. Some of those risks include stock market risk, credit and interest rate risk, volatility in commodity prices and high-yield debt securities, short sales risk and the political, general economic, liquidity and currency risks of foreign investments, which may be particularly significant for emerging markets. In the case of DWS Alternative Asset Allocation Fund, it may use derivatives, including as part of its global tactical asset allocation strategy. The funds expect to have direct and indirect exposure to derivatives, which may be more volatile and less liquid than traditional securities. The funds could suffer losses on its derivative positions. See the prospectus for additional risks and specific details regarding the funds’ risk profile.
Risk information

2. Agenda A definition of alternatives 1 2 Why alternative investments? 3
DWS Investments’ alternatives 4
Summary
Our topics of discussion for today are as follows:
How to define alternatives
The benfits of using alernatives
How to implement alternatives in a portfolio
And lastly, addressing market challenges

3. Asset class representation
Category
Index name
Asset allocation
60% U.S. fixed income/40% U.S. large-cap equities (see below for asset class representation)
Alternatives
20% FTSE EPRA/NAREIT Global Real Estate Index
20% HFRI Equity Market Neutral Index
20% Barclays Capital US TIPS Index
15% commodities blend (50% Goldman Sachs Commodity Index, 25% MSCI World Energy Index, 25% MSCI World Materials Index)
10% MSCI Emerging Markets Equity Index
10% JPMorgan Emerging Market Bond Index
5% S&P Global Gold BMI Index
Cash
Citigroup Treasury Bill 3-Month Index (When interest rates rise, bond prices generally fall. Although U.S. government securities are backed by the full faith and credit of the U.S. government, their prices fluctuate. Investors may lose principal if the securities are sold prior to maturity.)
Commodity
50% Goldman Sachs Commodity Index, 25% MSCI World Energy Index, 25% MSCI World Materials Index (Commodities, including gold, gems, and other precious metals, are long-term investments and should be considered part of a diversified portfolio. Market-price movements, regulatory changes, economic changes, and adverse political or financial factors could have a significant impact on performance.)
Emerging-market income
JPMorgan Emerging Market Bond Index (Investing in securities of emerging markets presents certain risks, such as currency fluctuations, political and economic changes and market risks. Also, see fixed-income risk listed below.)
Emerging-market equity
MSCI Emerging Markets Equity Index (See emerging-market income risk listed above.)
Floating-rate note
S&P/LSTA Leveraged Loan Index (Loan investments are subject to interest-rate risk such that when
interest rates rise, the prices of the loan, and thus the value of the loan, can decline and the investor can lose principal value. Although the value of senior loans will fluctuate less in response to interest-rate changes than will fixed-rate debt securities, floating rates on senior loans reset only periodically, so changes in prevailing interest rates may cause a fluctuation in the strategy's value.)
Global infrastructure
MSCI World Infra Sector Capped Index (Infrastructure-related securities have greater exposure to market, economic, regulatory, political and other risks affecting such entities.)
Asset class representation
Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. See next slide for more asset class representations.

4. Asset class representation
Category
Index name
Global real estate
FTSE EPRA/NAREIT Developed Index (There are special risks associated with an investment in real estate, including credit risk, interest-rate fluctuations and the impact of varied economic conditions. Real estate investment trusts (or “REITs”) can also be affected by interest-rate moves, economic cycles, and tax and regulatory requirements.)
Gold
S&P Global Gold BMI Index (See commodity risk listed above.)
International equity
MSCI EAFE Index (Investing in foreign securities presents certain risks, such as currency
fluctuations, political and economic changes and market risk.)
Large growth
Russell 1000 Growth Index (Large-cap equity stocks are affected by how the stock market performs.)
Large value
Russell 1000 Value Index (See large-growth risk listed above.)
Market neutral
HFRI Equity Market Neutral Index (Short sales involve the risk that the strategy will incur a loss by subsequently buying a security at a higher price than the price at which the strategy previously sold the security short.)
Small growth
Russell 2000 Growth Index (Stocks of small-cap companies involve greater risk than securities of larger, more-established companies, as they often have limited product lines, markets or financial resources and may be subject to more-erratic and more-abrupt market movements.)
Small value
Russell 2000 Value Index (See small-growth risk listed above.)
TIPS
Barclays Capital U.S. TIPS Index (Although inflation-indexed bonds are expected to be protected from long-term inflationary trends, short-term increases in inflation may lead to a decline in value. If interest rates rise due to reasons other than inflation, investments in these securities may not be protected to the extent that the increase is not reflected in the bond's inflation measure.)
U.S. large-cap equity (stocks)
S&P 500 Index (See large-growth risk listed above.)
U.S. fixed income (bonds)
Barclays Capital U.S. Aggregate Index (Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall.)
U.S. small-cap equity
Russell 2000 Index (See small-growth risk listed above.)
Asset class representation
Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index.

5. A compelling option for alternative investing
A definition of alternatives

6. How the world is defining alternatives
Asset classes
Alternative strategies
Investment vehicles
Beyond Morningstar
style boxes
Absolute return
Real return
New asset classes
Long/short and risk- managed equity
Multi-strategy
Managed futures
Tactical asset allocation
Relative value
Hedge funds
Limited partnerships
Mutual funds
ETFs
How the world is defining alternatives
Investments outside of traditional equity and fixed income are broadly known as alternatives.

7. The DWS Investments’ definition of alternatives
No industry-standard definition: Morningstar, Lipper and industry reports all define alternatives differently
The DWS Investments’ definition of alternatives
New, less-efficient asset classes
Asset classes with the potential to provide attractive returns with reduced risk when added to traditional asset allocation
The DWS definition of alternatives
Diversification neither assures a profit nor guarantees against a loss.

8. Alternative categories today
Definition
Absolute return
Seeks to provide positive returns in up and down markets
Real return
Seeks to maintain value during inflationary environments
Nontraditional/non-U.S. dollar
Seeks diversification through less efficient asset classes, not limited to a geographic region, market or security type
Alternative categories today
While market neutral and absolute return strategies may outperform the market during periods of severe downturns, they may also underperform the market during periods of market rallies.

9. A compelling option for alternative investing
Why alternative investments?
Why alternative investments?

10. Why alternatives may fit into a portfolio
Bring institutional defined-benefit thinking to individual investors
Improve diversification potential when added to a traditional portfolio consisting of stocks and bonds
May deliver better risk-adjusted returns
May address market challenges
Our view is that investors need greater diversification and protection
from movements in the market—and alternatives may fulfill these needs.

11. Asset allocation of defined benefit vs. defined contribution
Institutions and defined benefit plans are increasing allocations to alternative asset classes
Asset allocation of defined benefit vs. defined contribution
Source: BNY Mellon and Callan DC Index as of 3/31/10. Percentages may not add up to 100% due to rounding.

12. Correlation to the S&P 500 Index (five years as of 12/31/11)
Morningstar categories
Large
Value
1.00
Blend
Growth
0.98
Short-Term Bond
0.53
Target Date
Multialternative
0.94
Mid-Cap
0.97
0.96
Multisector Bond
0.77
Moderate Allocation
Inflation-Protected Bond
0.34
Small
0.95
Small Blend
Small Growth
High Yield Bond
0.78
Real Estate
0.84
Foreign Large Blend
0.93
Diversified
Emer. Markets
0.86
As asset classes have become increasing more correlated, certain alternative investments offer lower correlation. In turn this, when added to a traditional portfolio of stocks and bonds, alternatives provide for greater diversification benefits.
Consider alternatives for further diversification.
Source: Morningstar as of 12/31/11. Categories are Morningstar’s. Correlations are historical and do not guarantee future results. Correlation refers to how securities or asset classes perform in relation to each another and/or the market. A 1.0 correlation indicates that two security types move in exactly the same direction. A –1.0 correlation indicates movement in exactly opposite directions. A zero correlation implies no relation in the movements.

13. Alternatives can complement a traditional portfolio
Portfolio with alternatives
Adding a 20% allocation of alternatives increased return by nearly 100 basis points and reduced volatility over 10 years ended 12/31/11.
Alternatives can complement a traditional portfolio.
Scenario
Traditional portfolio
Portfolio with alternatives
Value added
10-year return
4.72%
5.68%
+0.96%
10-year volatility
11.92%
10.52%
-1.40%
Source: Morningstar as of 12/31/11. Past performance is no indication of future results. Volatility is represented by standard deviation. See slides 3-4 for asset class representations. Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Performance for other time periods may not have been as favorable. 10-year returns and standard deviation, respectively, are as follows: U.S. large-cap stocks, 2.92%, 15.93%; U.S. small-cap equity, 5.62%, 21.09%; international equity, 4.67%, 18.73%; U.S. bonds, 5.78%, 3.70%; cash, 1.85%, 0.49%; alternatives, 9.09%, 11.36%.

14. Alternatives seek to address these market challenges
U.S. dollar depreciation
Higher interest rates
Inflation concerns
Seeking to address market challenges 14

15. Implementation: increase diversification with alternatives
Real return
Absolute return
Nontraditional
Equity
Fixed income
Key features
One-strategy option to simplify investing process
Ability to access institutional investment strategies
Increased diversification
Implementation: increase diversification with alternatives
Packaged-fund option to meet alternative allocations
Diversification neither assures a profit nor guarantees against a loss. 15 15

16. Diversifying with alternatives can help smooth the ride
ALTERNATIVE ASSET CLASS CALENDAR YEAR RETURNS AS OF 12/31/11
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Gold
52.61%
EM equity
55.82%
Gbl. real est.
37.96%
34.00%
42.35%
39.39%
TIPS
–2.35%
78.51%
35.06%
13.56%
TIPs
16.57%
45.58%
25.55%
28.35%
32.17%
Commodities
32.45%
Market neutral
–5.92%
Floating rate
51.62%
20.40%
EM income
9.20%
14.24%
40.69%
Infrastructure
21.31%
25.54%
29.06%
19.58%
–9.70%
38.26%
18.88%
5.54%
12.81%
29.08%
Commodities 20.82%
15.35%
20.13%
18.62%
–23.10%
35.74%
Alternatives
13.03%
1.52%
Alternatives 9.65%
EM income 28.83%
16.63%
14.91%
15.30%
12.04%
–26.52%
28.03%
12.55%
0.73%
2.82%
24.70%
11.77%
11.86%
10.49%
11.64%
–29.10%
26.67%
11.83%
–1.02%
1.91%
24.40%
8.46%
6.22%
7.32%
6.45%
–32.66%
25.95%
10.13%
–5.48%
0.98%
9.97%
5.17%
5.06%
6.74%
5.29%
–44.76%
14.75%
6.60%
–5.82%
–6.17%
8.40%
4.15%
4.97%
2.77%
2.08%
–47.72%
11.41%
6.31%
–17.23%
–17.95%
2.44%
–5.54%
2.84%
0.41%
–6.96%
–53.33%
1.17%
3.79%
–20.41%
Stock (S&P 500 Index) calendar-year returns (as of 12/31/11)
–22.10%
28.68%
10.88%
4.91%
15.79%
5.49%
-37.00%
26.46%
15.06%
2.11%
Excess return of alternatives vs. stocks (as of 12/31/11)
31.75%
–3.98%
5.75%
10.00%
–0.49%
6.55%
10.48%
0.21%
–2.03%
-3.13%
Alternatives blend
Alternatives are potentially well positioned relative to traditional asset classes for rising inflation
Source: Morningstar as of 12/31/11. Performance is historical and does not guarantee future results. See slides 3-4 for asset class representation. Equity index returns assume reinvestment of all distributions. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Returns during certain time periods were negative. Excess return calculation is the mathematical difference between the alternative blend (orange) and stocks (light blue).

17. A compelling option for alternative investing
DWS alternatives suite
DWS alternatives

18. Simplifying alternative investments
DWS Investments’ alternative asset allocation suite
Platform: a suite of alternative funds to complement traditional asset allocation
DWS Investments is among only a few investment managers to offer a suite of funds to fit the needs of investors
Volatility
Return potential
DWS Select Alternative Allocation Fund
DWS Alternative Asset Allocation Fund
Nearly $1.1 billion AUM between the two funds as of 12/31/11.
Simplifying alternative investments
Visit for complete performance information.
There is no guarantee that the funds will achieve their stated objectives.

19. DWS Investments’ alternatives: key differentiators
Experienced investment
platform
More than 40 global investment professionals
Nearly $5 billion in alternative assets across alternative retail mutual funds*
Provide individual investors with institutional investment strategies
Simplify portfolio construction with a packaged fund option
Institutional thinking
Results
Ability to generate attractive return potential across various market conditions
DWS alternatives: key differentiators
*Source: DWS Investments as of 12/31/11.

20. Goals and investment process
Seek capital appreciation and diversification
Investment process
Allocate to a variety of alternatives asset classes to provide greater portfolio diversification. The strategies are rebalanced periodically to maintain the desired allocation.
Benchmark
DWS Alternative Asset Allocation strategy blended benchmark: 70% MSCI World Index, 30% Barclays Capital U.S. Aggregate Index
DWS Select Alternative Allocation strategy blended benchmark: 60% MSCI World Index, 40% Barclays Capital U.S. Aggregate Index
Strategy
Implemented
Absolute return
Real return
Nontraditional/
non-U.S. dollar
Market neutral
Fund X
Global tactical asset allocation*
Overlay
Commodity
Global real estate
Global infrastructure
Inflation-protected
Floating-rate note
International income
ETF
Emerging-market fixed income
Emerging-market equity
Emerging-market income (local currency)
International and emerging-market small-cap
Convertibles
Preferred stocks
Goals and investment process
*The global tactical asset allocation strategy is not used in the DWS Select Alternative Allocation strategy. The strategy will not be used in DWS Alternative Asset Allocation Plus VIP until assets reach $50 million.

21. QS Investors: experienced alternatives platform
Strategies are subadvised by QS Investors, LLC.
QS Investors
Research platform
Rosemary Macedo (CIO)
Colm O’Cinneide
Janet Campagna
Chief executive officer
Portfolio managers
Robert Wang
Inna Okounkova
Thomas Picciochi
Global resource base
Absolute return
Real return
Nontraditional/non-U.S. dollar
DWS Disciplined Market Neutral Fund
3 portfolio managers
DWS Gold & Precious Metals Fund
3 portfolio managers
DWS Enhanced EM Fixed Income Fund
8 portfolio managers
Global tactical asset allocation strategy*
2 portfolio managers
DWS Enhanced Commodity Strategy Fund
2 portfolio managers
DWS RREEF Global Infrastructure Fund
4 portfolio managers
Experienced alternatives platform
DWS Global Inflation Fund 5 portfolio managers
DWS EM Equity Fund
2 portfolio managers
DWS RREEF Gl. Real Est. Securities Fund
7 portfolio managers
ETFs
International / EM fixed income
International / EM small cap
Preferred stocks
Convertibles
*Global tactical asset allocation strategy (GTAA) is only available on DWS Alternative Asset Allocation Fund. It is not possible to invest directly in this strategy.
DWS Floating Rate Fund
4 portfolio managers
5 investment professionals
21 investment professionals
14 investment professionals .

22. DWS Investments’ alternatives suite: investment process
Asset allocation
Identify diverse, nontraditional asset classes
Asset class forecasting: risk, return and correlation
Tactical views are implemented monthly via a global tactical asset allocation
Portfolio construction
Innovative asset allocation tool—PortfolioChoice
DWS Investments’ strategies
Exchange-traded funds (ETFs)
Holdings analysis
Portfolio implementation
Monthly rebalancing
Quarterly monitoring and periodic review of allocations
Risk management
DWS Investments applies institutional thinking to all asset allocation products, including the alternatives suite.
DWS alternatives suite: investment process

23. Asset allocation: blurring of asset classes
Building blocks of asset allocation
Traditional asset classes
Absolute return
Real return
Nontraditional/non-U.S. dollar
Illiquid
Asset allocation: blurring of asset classes

24. Volatility of individual asset classes vs. alternatives blend
ASSET CLASS VOLATILITY (10 YEARS ENDING 12/31/11)
Here we show the volatility of individual alternative asset classes vs. alternatives blend. You’ll notice that certain asset classes are riskier than others. It is key to chose the optimal blend of alternative asset classes for diversification and maximum portfolio efficiency
Alternative asset classes
Traditional asset classes
Source: Morningstar. Volatility is represented by standard deviation. See slides 3-4 for asset class representation.

25. DWS Alternative Asset Allocation Fund
Nontraditional (25%)
Emerging-market equity (7%)
Emerging-market fixed income (8%)
International and emerging-market small-cap (2%)
Emerging-market debt—local currency (2%)
International Treasury bond (2%)
Convertibles (2%)
Preferred stocks (2%)
Real return (58%)
Commodities (15%)
Global real estate (12%)
Global TIPS (11%)
Floating-rate notes (10%)
Global infrastructure (10%)
GTAA strategy
Absolute return (17%)
Market neutral (17%)
Our allocation changes include:
Increased allocation to real return bucket via commodities
Reduced allocation to absolute return and non-traditional buckets
Within non-traditional bucket, reduced global real estate while increasing emerging fixed-income
Started utilizing exchanged-traded funds (ETFs) to gain broad exposure to international small-cap equities and international treasury bonds ex-US
For performance and other information about the DWS Alternative Asset Allocation Fund, please visit
Source: DeAM as of 12/31/11. The strategy will be rebalanced periodically, so this asset allocation is subject to change. The Global Tactical Asset Allocation (GTAA) strategy may use instruments including but not limited to futures, options and currency forwards. Derivatives may be more volatile and less liquid than traditional securities, and the strategy could suffer losses on its derivatives positions.

26. DWS Select Alternative Allocation Fund
Nontraditional (26%)
Emerging-market fixed income (8%)
Emerging-market equity (3%)
International Treasury bond (6%)
International and emerging-market small-cap (2%)
Emerging-market debt (local currency (3%)
Preferred stocks (2%)
Convertibles (2%)
Real return (57%)
Global TIPS (13%)
Floating-rate notes (14%)
Commodities (13%)
Global infrastructure (10%)
Global real estate (7%)
Absolute return (17%)
Market neutral (17%)
Our allocation changes include:
Increased allocation to non-traditional bucket
Reduced overall allocation to real return bucket, but added to commodity exposure
Decreased US fixed-income exposure by reducing US TIPS and adding international Treasury bonds
Within non-traditional bucket, reduced global real estate while increasing emerging fixed-income
Started utilizing ETFs to gain broad exposure to international small-cap equities and international treasury bonds ex-US
For performance and other information about the DWS Select Alternative Allocation Fund, please visit
Source: DeAM as of 12/31/11. The strategy will be rebalanced periodically, so this asset allocation is subject to change. Derivatives may be more volatile and less liquid than traditional securities, and the strategy could suffer losses on its derivatives positions.

27. Summary of alternative investing
Alternative asset classes
Provide institutional thinking for individual investors
Can improve diversification potential and deliver better risk-adjusted return potential to a traditional portfolio of stocks and bonds
May address market challenges
DWS Investments’ alternative investment team and process
Provide a global platform with access to alternative asset classes
Offer the same tools, team and investment philosophy for both institutional and individual investors
Have the potential to generate attractive returns across various market conditions
Summary of alternative investing
Diversification neither assures a profit nor guarantees against a loss.

28. Important information
OBTAIN A PROSPECTUS
To obtain a summary prospectus, if available, or prospectus, download one from talk to your financial representative or call (800) We advise you to carefully consider the product’s objectives, risks, charges and expenses before investing. The summary prospectus and prospectus contain this and other important information about the investment product. Please read the prospectus carefully before you invest.
Investment products offered through DWS Investments Distributors, Inc. Advisory services offered through Deutsche Investment Management Americas, Inc.
DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
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