1. 1 Yale University Presentation March 5, 2003

2. EPFR: 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

3. 3 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

4. 4 The Reports Equity/BondFund Flows Data: Weekly or Monthly Equity/Bond Fund Flows Data: Weekly or Monthly Country/Regional Weightings Data Country Flows Data Country Flows Data: Equity Fund Net Buying/Selling by Country Sector Weightings Data Sector Weightings Data: GICS Level II Regional Data Regional Data: Asia-Pacific, LatAm, EMEA Company Holdings Data

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10. 10 EPFR 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 CLIENTS

11. 11 PM Strategy/Insights Original, investment oriented research for investment management firms on international/emerging markets

12. 12 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. 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. 14 General Trends in EM fund management EM 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 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. 15 Trends in the fund data Investors 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? 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

16. 16 2002: Only Asia ex-Japan equity, EM bonds attract inflows

17. 17 EM Bond Fund Flows - Last week's EM bond inflows historic high - 2002 first year of positive inflows into bond funds - EM bond funds return + 17% p.a. past 5 years - EM bonds poor reputation: sovereigns safer than you think

18. 18 Regional Allocation Themes Asia near all-time high in GEM equity fund weightings: 53.7%

19. 19 Regional Allocation Themes Demise of the LatAm regional fund Demise of the LatAm regional fund

20. 20 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 returns Russia: +7.54% Thailand: +6.83% Inida: -3.07% Brazil: -8.02%

21. 21 Country Allocation Themes