CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard & Poor’s. Copyright © 2009 Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. For Institutional use only. Not for use by advisors or the public.

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Carbon Efficient Investing in Asia

Alka Banerjee

Vice President, Global Equities

Standard & Poor’s

May 2010

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Top 20 Carbon Emitting Nations in The World

Country

National emissions (thousands of tonnes of carbon) 2008 estimated

National emissions (thousands of tonnes of carbon) 2006

Emissions per person (tonnes of carbon) 2006

CHINA (MAINLAND) 1,922,687 1,664,589 1.27UNITED STATES OF AMERICA 1,547,460 1,568,806 5.18INDIA 479,039 411,914 0.37RUSSIAN FEDERATION 435,126 426,728 2.99JAPAN 357,534 352,748 2.8GERMANY 210,480 219,570 2.67CANADA 153,659 148,549 4.55UNITED KINGDOM 148,818 155,051 2.56REPUBLIC OF KOREA 142,230 129,613 2.68ISLAMIC REPUBLIC OF IRAN 133,961 127,357 1.81ITALY (INCLUDING SAN MARINO) 125,015 129,313 2.19MEXICO 124,450 118,950 1.13SOUTH AFRICA 120,520 113,086 2.39SAUDI ARABIA 119,374 104,063 4.38BRAZIL 110,833 96,143 0.51FRANCE (INCLUDING MONACO) 103,845 104,495 1.71INDONESIA 99,648 90,950 0.41AUSTRALIA 96,168 101,458 4.9SPAIN 94,468 96,064 2.18UKRAINE 84,448 87,043 1.86

Ranking of the world's countries by 2008 estimated total CO2 emissions from fossil-fuel burning, cement production, and gas flaring.Emissions (CO2_TOT) are expressed in thousand metric tons of carbon (not CO2).Source: Tom Boden, Gregg Marland, and Bob AndresCarbon Dioxide Information Analysis CenterOak Ridge National Laboratoryhttp://cdiac.ornl.gov/trends/emis/overview_2006.html

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Investors in Asia Key to Carbon Efficiency

• China, India and Japan rank in the top 5 emitters in the world• Together they account for 42% of the estimated emissions of the

top 20 emitting nations of the world• Number goes up higher if you take into account Korea, Iran, Saudi

Arabia, Australia and Indonesia• With fastest economic growth coming out of Asia, Asia has also

become victim to all the perils of high pollution, natural habitat destruction

• More than ever countries like China and India are waking up to their own responsibilities in this space and are forging ahead with multiple programs

• In this situation it is even more mandatory for investors in Asia to look to encourage companies with better carbon footprints

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• Carbon efficiency is determined by a company’s carbon footprint, which we calculate as a company’s total greenhouse gas (GHG) emissions on a revenue-adjusted basis

– Emissions are tabulated for the resources (i.e. inputs) a company and its supply chain uses, activities the company is engaged in, and products a company produces

• Carbon efficient indexing is a way to deliver an eco-conscious message to the private sector by overweighting more carbon efficient companies and underweighting less carbon efficient companies in the same sector

What Does Carbon Efficient Mean?

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Approach Description Pros Cons

“Green” Industry Plays

Invest in companies which directly create clean technology or benefit from environmental trends

Direct investment in environmental industries

Relatively narrow in scope and not reflective of market

Environmental Indices

Indices using environmental screens to create lists of companies with desired characteristics

Most direct way of reducing carbon emissions or improving other ESG attributes

May deviate significantly from broader market due to sector or individual security allocations

Broad Market Index Tracking

Indices designed to specifically track a broad market index, balancing tracking error and carbon footprint reduction

Minimize sector and individual security deviations from tracked index

Not limited to specific industries or sub industries

Carbon emissions exposure may not be as dramatically reduced as Environmental Indices depending on base index

Carbon Emissions Trading

Indices comprised of carbon credits & derivatives (EUAs, CERs); non-equity exposure

Provides entry point for investors interested in carbon cap-and-trade schemes

Does not cater to investors interested in broad market investing

No environmental impact

Several Green Indexing Approaches

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• S&P Indices has created an index family that seeks:

• Part of Standard & Poor’s greater strategy to develop a global range of carbon efficient indices– Provide broad exposure to markets while focusing on constituents

that minimize carbon footprint– Reduce underlying indices’ carbon footprints by 20-50%– Provide low carbon alternative while maintaining risk and reward

characteristics of underlying benchmarks

S&P Carbon Efficient Family of Indices

Reduced carbon emissions exposure

Same risk/return profile as underlying indices

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• Investors who want to act on their commitment to a greener future

• Companies taking steps to operate in more carbon efficient way

• Investors who cannot bet on their risk-return profile nor sacrifice broad based market returns

• Investors seeking pure beta performance tool

Who Benefits from S&P Carbon Efficient Indices?

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Please see the Index’s methodology document for further information. The methodology document is available at www.standardandpoors.com.

Pre-Reweighting

• Member of the Parent Index• Trucost Plc coverage availability

• Reweighting is done within market sector combinations that have high potential to reduce exposure to carbon emissions

• High polluters are underweighted and low polluters are underweighted within the same sector

• 50% of the weights of the companies in the top half is spread equally among the companies in the bottom half, on a pro rata basis

• Tracking error is kept low since country and sector weights were unchanged

• Carbon footprints updated annually

• Index rebalanced annually along with annual rebalancing of parent index

• All corporate actions are applied to the carbon efficient index in exactly the same manner as to the parent index

Universe Construction

Reweighting Post-Reweighting

Index Weighting AdjustmentsMaintenance and

Rebalancing

How is the Index constructed?

• Maintain country and sector neutrality

Index Construction Parameters

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Source: Standard & Poor’s. Note: The S&P/TOPIX 150 Carbon Efficient Index is not an existing index. Data is presented to illustrate S&P Indices’ Carbon Efficient Index methodology applied to the S&P/TOPIX 150.

Data as of 04/30/10

Carbon Footprint Reduction by Sector (S&P/TOPIX 150)

Total Index Carbon Reduction: 33.1%

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CO2e / Rev MM USD S&P/TOPIX 150 S&P/TOPIX 150 Carbon Efficient

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Source: Standard & Poor’s. Note: The S&P/TOPIX 150 Carbon Efficient Index is not an existing index. Data is presented to illustrate S&P Indices’ Carbon Efficient Index methodology applied to the S&P/TOPIX 150.

Data as of 04/30/10

Carbon Footprint Reduction in the Materials Sector (S&P/TOPIX 150)

Carbon Footprint Reduction Within Materials Sector: 32.6%

CompanyCarbon

Company Footprint TOPIX TOPIX Carbon TOPIX TOPIX CarbonJFE Holdings Inc 2,343.4 0.91% 0.46% 21.40 10.70Sumitomo Metal Industries 2,251.7 0.53% 0.27% 11.98 5.99Nippon Steel Corp 1,790.4 1.07% 0.54% 19.18 9.59Kobe Steel 1,637.1 0.32% 0.16% 5.19 2.59Nippon Paper Group Inc 809.1 0.15% 0.08% 1.24 0.62Mitsubishi Materials Corp 806.8 0.20% 0.10% 1.59 0.80Oji Paper Co 790.5 0.23% 0.12% 1.84 0.92Sumitomo Chemical Co 649.0 0.39% 0.19% 2.52 1.26Toyo Seikan Kaisha 569.5 0.15% 0.07% 0.85 0.42Asahi Kasei Corporation 490.5 0.38% 0.19% 1.87 0.94Mitsui Chemicals Inc 485.2 0.16% 0.38% 0.77 1.82Kuraray Co 471.0 0.24% 0.45% 1.12 2.14Mitsubishi Chemical Holdings Corp 446.5 0.34% 0.55% 1.51 2.48Sumitomo Metal Mining Co 440.7 0.44% 0.65% 1.92 2.88Teijin 422.6 0.16% 0.38% 0.68 1.60Toray Industries Inc 381.4 0.39% 0.61% 1.48 2.31Mitsui Mining & Smelting Co 290.9 0.09% 0.30% 0.25 0.88JSR Corp 283.2 0.21% 0.43% 0.60 1.21Shin-Etsu Chemical Co 269.6 1.20% 1.42% 3.24 3.83NITTO DENKO CORP 120.6 0.36% 0.57% 0.43 0.69Total 15,749.6 7.91% 7.91% 79.67 53.67

Index Weight Carbon Footprint Contribution

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Source: Standard & Poor’s

Data as of 12/31/2009

Emerging Asia Countries

# of CarbonCountry Stocks IFCI LargeMid IFCI Carbon Eff. IFCI LargeMid IFCI Carbon Eff. ReductionChina 102 16.2% 16.2% 134.1 102.1 23.8%India 92 8.5% 8.5% 85.6 50.7 40.7%Indonesia 24 1.8% 1.8% 13.2 13.1 1.1%Korea 91 14.1% 13.8% 63.3 41.5 34.4%Malaysia 46 2.3% 2.2% 15.1 13.1 13.1%Philippines 17 0.5% 0.5% 0.6 0.6 1.1%Taiwan 152 12.9% 12.8% 64.5 40.3 37.5%Thailand 30 1.3% 1.3% 11.8 9.8 16.8%Grand Total 554 100.0% 100.0% 604.2 450.8 25.4%

Percent of Total Index Weight Carbon Footprint Contribution

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S&P/IFCI Carbon Efficient Index

12CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard & Poor’s.

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Source: Standard & Poor’s

Please see the additional disclosures concerning performance at the end of the presentation. Inception of the S&P/IFCI Carbon Efficient Index was December 11, 2009. Performance shown for the S&P/IFCI Carbon Efficient Index is comprised of back-tested performance from November 1, 2006 through December 10, 2009 and actual performance from December 11, 2009 through March 31, 2010. Indexes are statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent. Such costs would lower performance. It is not possible to invest directly in an index. Past performance is no indication of future results.

S&P/IFCI Carbon Efficient Index Performance

S&P/IFCI Carbon Efficient S&P/IFCI LargeMid Cap

1 Month 8.16% 8.22%

3 Month 3.10% 2.66%1 Year 83.21% 79.93%3 Years 6.22% 5.26%

Annualized Risk 3 Year Std Dev 32.92% 32.98%Sharpe Ratio 3 Years 0.3010 0.2735Correlation 3 Years 0.9998

Data as of March 31, 2010.

Annualized Returns

Cumulative Returns

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Source: Standard & Poor’s

Please see the additional disclosures concerning performance at the end of the presentation. Inception of the S&P/IFCI Carbon Efficient Index was December 11, 2009. Performance shown for the S&P/IFCI Carbon Efficient Index is comprised of back-tested performance from November 1, 2006 through December 10, 2009 and actual performance from December 11, 2009 through December 31, 2009. Indexes are statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent. Such costs would lower performance. It is not possible to invest directly in an index. Past performance is no indication of future results.

Year Tracking Error

Turnover Carbon Footprint Reduction

2007 0.94% 13.8% 21.9%

2008 2.12% 14.9% 17.16%

2009 1.11% 12.6% 24.21%

S&P/IFCI Carbon Efficient Index Performance, con’t

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Source: Standard & Poor’s

Please see the additional disclosures concerning performance at the end of the presentation. Inception of the S&P/IFCI Carbon Efficient Index was December 11, 2009. Performance shown for the S&P/IFCI Carbon Efficient Index is comprised of back-tested performance from November 1, 2006 through December 10, 2009 and actual performance from December 11, 2009 through March 31, 2010. The MSCI Emerging Market Index is shown for comparative purposes only. Indexes are statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent. Such costs would lower performance. It is not possible to invest directly in an index. Past performance is no indication of future results.

Emerging Markets Indices: Performance Comparison

Tracking error over three year period = 1.47%

Index Performance Comparison

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S&P/IFCI Carbon Efficient S&P/IFCI Large-Mid Cap Composite MSCI EM (MXEF)

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Source: Standard & Poor’s

Data as of 03/31/10

Index Composition and Weights

IFCI Carbon IFCI Large-Sector Efficient Mid Cap Consumer Discretionary 5.24% 5.31%Consumer Staples 5.28% 5.36%Energy 15.69% 14.64%Financials 23.01% 23.34%Health Care 2.35% 2.39%Industrials 7.41% 7.50%Information Technology 14.75% 15.11%Materials 14.96% 14.85%Telecommunication Services 8.20% 8.32%Utilities 3.11% 3.17%Grand Total 100.00% 100.00%

Percent of Total Index Weight

Number of IFCI Carbon IFCI Large-Country Stocks Efficient Mid Cap Brazil 47 15.38% 14.84%Chile 19 1.74% 1.76%China 105 16.00% 15.99%Czech Republic 2 0.34% 0.34%Egypt 19 0.60% 0.61%Hungry 3 0.46% 0.47%India 92 8.51% 8.68%Indonesia 24 1.93% 1.95%Israel 18 2.88% 2.92%Korea 92 13.87% 14.16%Malaysia 46 2.37% 2.40%Mexico 18 4.13% 4.09%Morocco 8 0.43% 0.43%Peru 5 0.57% 0.58%Philippines 17 0.53% 0.53%Poland 27 1.29% 1.31%Russia 22 7.38% 7.02%South Africa 48 6.68% 6.69%Taiwan 151 11.84% 12.09%Thailand 30 1.41% 1.44%Turkey 27 1.65% 1.68%Grand Total 820 100.00% 100.00%

Percent of Total Index Weight

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Carbon content was calculated as of the annual rebalancing date in each year.

Carbon Footprint Reduction Over the Years

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Carbon Content: S&P IFCI LargeMid vs. S&P IFCI Carbon Efficient

S&P IFCI LargeMid

S&P IFCI CarbonEfficient

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This document does not constitute an offer of services in jurisdictions where Standard & Poor’s or its affiliates do not have the necessary licenses. Standard & Poor’s receives compensation in connection with licensing its indices to third parties. All information provided by Standard & Poor’s is impersonal and not tailored to the needs of any person, entity or group of persons. Standard & Poor’s and its affiliates do not sponsor, endorse, sell, promote or manage any investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any Standard & Poor’s index. Standard & Poor’s is not an investment advisor, and Standard & Poor’s and its affiliates make no representation regarding the advisability of investing in any such investment fund or other vehicle. A decision to invest in any such investment fund or other vehicle should not be made in reliance on any of the statements set forth in this presentation. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Inclusion of a security within an index is not a recommendation by Standard & Poor’s to buy, sell, or hold such security, nor is it considered to be investment advice. Exposure to an asset class is available through investable instruments based on an index. It is not possible to invest directly in an index. There is no assurance that investment products based on the index will accurately track index performance or provide positive investment returns.Standard & Poor’s does not guarantee the accuracy and/or completeness of any Standard & Poor’s index, any data included therein, or any data from which it is based, and Standard & Poor’s shall have no liability for any errors, omissions, or interruptions therein. Standard & Poor’s makes no warranties, express or implied, as to results to be obtained from use of information provided by Standard & Poor’s and used in this service, and Standard & Poor’s expressly disclaims all warranties of suitability with respect thereto. While Standard & Poor’s has obtained information believed to be reliable, Standard & Poor’s shall not be liable for any claims or losses of any nature in connection with information contained in this document, including but not limited to, lost profits or punitive or consequential damages, even if it is advised of the possibility of same. These materials have been prepared solely for informational purposes based upon information generally available to the public from sources believed to be reliable. Standard & Poor’s makes no representation with respect to the accuracy or completeness of these materials, the content of which may change without notice. The methodology involves rebalancings and maintenance of the indices that are made periodically during each year and may not, therefore, reflect real-time information.Analytic services and products provided by Standard & Poor’s are the result of separate activities designed to preserve the independence and objectivity of each analytic process. Standard & Poor’s has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process. Standard & Poor's and its affiliates provide a wide range of services to, or relating to, many organizations, including issuers of securities, investment advisers, broker-dealers, investment banks, other financial institutions and financial intermediaries, and accordingly may receive fees or other economic benefits from those organizations, including organizations whose securities or services they may recommend, rate, include in model portfolios, evaluate or otherwise address.

Trucost collects data and information from a number of sources in the public domain and from direct communication with companies in order to compile the Trucost Carbon Footprints used in this Index. While every care has been taken by Trucost in compiling the Trucost data, Trucost accepts no liability whatsoever for any loss (including without limitation direct or indirect loss and any loss of profit, data, or economic loss) occasioned to any person nor for any damage, cost, claim or expense arising from any reliance on the Trucost data.

Copyright © 2009 by Standard & Poor’s Financial Services LLC. All rights reserved.

Redistribution, reproduction and/or photocopying in whole or in part is prohibited without written permission. S&P, S&P 500, and STANDARD & POOR’S are registered trademarks of Standard & Poor’s Financial Services LLC.

Disclaimer

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The S&P/IFICI Carbon Efficient Index (“Index”) is not a collective investment fund. It is not possible to invest directly in an index. Past performance of the Index is no guarantee of future performance.The Index officially launched on Thursday, Dec. 10, 2009. The back-test period shown does not necessarily correspond to the entire available history of the index. The Index uses a modified market capitalization weighting scheme. The Index is rebalanced annually. The Index performance has inherent limitations. The Index returns shown do not represent the results of actual trading of investor assets. Standard & Poor’s maintains the Index and calculates the performance shown or discussed, but does not manage actual assets. The Index is calculated in U.S. dollars. Where applicable, underlying prices are collected in local currency and converted to U.S. dollars on a daily basis. Performance is based on index levels calculated using a divisor based methodology. Performance takes into account reinvestment of dividends and distributions. Indices are statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent. The imposition of these fees and charges would cause actual performance to be lower than the performance shown. For example, if the Index returned 10 percent on a $100,000 investment for a 12-month period (or $10,000) and an annual asset-based fee of 1.5 percent were imposed at the end of the period (or $1,650), the net return would be 8.35 percent (or $8,350) for the year. Over 3 years, an annual 1.5% fee taken at year end with an assumed 10% return per year would result in a cumulative gross return of 33.1%, a total fee of $5,375 and a cumulative net return of 27.2% (or $27,200). The Index is designed to track the S&P/IFCI LargeMid Cap index, The S&P/IFCI LargeMid Cap index is calculated in U.S. dollars and takes into account the reinvestment of dividends. The S&P/IFCI LargeMid Cap index includes the same number of holdings but has different risk characteristics than the Index. Past performance of the S&P/IFCI LargeMid Cap index is no guarantee of future performance. Performance fluctuates over time. The fact that the Index may have tracked the S&P/IFCI LargeMid Cap over a certain period of time does not indicate that it has tracked the S&P/IFCI LargeMid Cap over any other period of time. The MSCI Emerging Markets index is shown for comparative purposes only. Prospective application of the methodology used to construct the Index may not result in returns commensurate with the back-tested returns shown.

Performance Disclosure