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KB VALUE FOCUS KOREA EQUITY FUND June, 2016

Please note that marketing materials without an approval code granted from the

Compliance Division of KB Asset Management are not official materials authorized

under our internal procedure. This marketing material is for general information

purposes only and subject to change. Investors should be aware that this presentation

does not purport to be a complete explanation of risks and other risks may also be

relevant from time to time. In the future the Fund may be exposed to risks that are

currently difficult to predict. Risks that are not described in it are considered as

immaterial at the moment, but they may become substantial later on and adversely affect

the fund. KB Asset Management does not guarantee investment decisions and

investment outcomes based on the information of this marketing material.

Contact Information: Phone : 82-2-2167-8747 E-mail : [email protected]

Approval Code Granted from the Compliance Division of KB Asset Management: 2015_336

FOR INTERNAL USE ONLY

Disclaimers

※ This document is for illustrative purposes only and does not represent any actual investment performance. Prior to investing,

investors must read the Fund’s prospectus in full to make an informed investment decision.

※ An investment in the Fund involves investment risks, including the possible loss of the principal amount invested. KB Asset

Management and any of related companies do not and are not obligated to guarantee principal and/or investment returns

shown in this presentation. In addition, the Fund may pay out dividends based on the Fund’s performance and gains or losses

on investments may be incurred. Such gains and losses are imputed to investors.

※ Investors should be aware that it does not purport to be a complete explanation of risks and other risks may also be relevant

from time to time. In the future the Fund may be exposed to risks that are currently difficult to predict. Risks that are not

described in it are considered as immaterial at the moment, but they may become substantial later on and adversely affect

the fund.

※ The value of the Fund’s investments is subject to change due to various factors, e.g., geopolitical landscape, unrest in the

financial market, changes in interest rates, currency risks, and credit crunch. The performance quoted here and is past

performance and is not a guarantee of future results. In addition, there is no guarantee that any forecasts or opinions will be

realized.

※ The returns illustrated in this presentation indicate returns before taxes. In addition, investors in the Fund may be subject to a

risk of double-taxation. Depending on market conditions after the Fund is set up, transaction costs that have not been

specified in this document may be incurred additionally.

KB: Consistent & Reliable

Key Figures - As of 2016 1Q

KB Financial Group

- Total Assets: USD $405.44 billion

- Client Base: 30 Million

- Market Cap: USD $10.79 billion; Listed on KOSPI and New York Stock Exchange (105560 KS Equity, KB US Equity)

Global Network

The leading Financial Group in Korea

- KB Financial Group, with commercial banking being the core business, provides comprehensive financial services encompassing

asset management, securities, life insurance, capital, venture investment, and real estate

* Legal-affiliate : Hwang-Mok Park, KIM&CHANG, SHIN&KIM * Accounting-affiliate: Samil PriceWaterhouseCooprs

4

Business Network

Korea’s Leading Asset Management Company

KB Asset Management

- Incorporation date: April 28th, 1988 (29 years of history)

- AUM: USD $46.09 billion (As of June 30th, 2016)

• The 3rd largest AMC in the market (MS: 8.26%)

* Including discretionary accounts, the 4th largest AMC

AUM by Asset Class (Billion, USD, as of June 30th, 2016)

Change in Fund M/S driven by excellent performance

Source: Morningstar, as of June 30th, 2016

Source: Korea Financial Investment Association

The performance quoted is past performance and is not a guarantee of future results. All figures are in USD terms , net of fees, and gross of tax. 5

Category Name Fund Size

million USD

Morningstar Category % Rank

2016 YTD*

2015 2014 2013 2012 2011 2010

Korea OE Korea Large-Cap Equity

KB Value Focus Feeder Equity A

$ 1350.35 50 44 9 4 10 2 1

Korea OE Korea Cautious Allocation

KB Retirement Pens Div 40 Fdr Bd Bal C

$ 1589.53 24 40 1 5 1 2 1

Equity Balanced Fixed Income FoF MMF Derivatives Real Estate Special Asset Segregated

Account Total

9.05 4.79 16.44 0.27 8.15 1.23 1.35 4.74 0.08 46.09

Source: Korea Financial Investment Association

The top AMC in Korea’s fast-growing corporate pension fund market

KB Asset Management

KBAM M K.V S.S S.Y Others Total

December 31st, 2014 11,130 10,380 11,831 7,730 4,808 14,394 60,273

December 31th,2015 (Market Share)

20,675 (24%)

15,585 (18%)

8,973 (10%)

9,618 (11%)

5,901 (7%)

26,902 (31%)

87,653 (100%)

Growth rate 86% 50% -24% 24% 23% 87% 45%

- Market Share: 24% (Largest MS) as of 2015Q4

- Growth Rate: 86%

A firm grip of global business based on a long-term global partnership

Market Leader in the Korean corporate pension fund market

Partner

Global Lombard Oider

US Palisade Capital Management, L.L.C.

Europe Blackfriars Asset Management Ltd / Pioneer Investment Management Limited

Japan DLIBJ Asset Management Co.,Ltd

China JF Asset Management Ltd / GAM Hong Kong Ltd / Hamon Investment Management Ltd

ASEAN Vietnam

Fullerton Fund Management Company Ltd

Russia HSBC Global Asset management(UK) Ltd

Brazil BNY Mellon ARX Investmentos Ltda

India JF Asset Management Ltd

MENA EFG-Hermes UAE Ltd

Source: Korea Financial Investment Association (unit: KRW 100mil)

6

KB Asset Management

Integrity as well as expertise is valued when choosing our investment professionals

7

As of March 31st, 2016 Total Number of Employees : 198 As of June 30th, 2016

Operations

Infra. 1

Compliance Div.

Infrastructure Div.

Retail Marketing 2

Product Strategy

KB Synergy

Institution 3

Global Marketing

CM Strategy

IT

Global Investment 1

Value Investment

1

Active Management

2

26

Value Investment

2

Strategic Planning

Fixed Income 3

Fixed Income 4

Trading

Fixed Income 2

Domestic Passive

Investment 3

ETF Strategy

Solution

Absolute Return

Active Management

1

Research

Investment Strategy

Risk Management

Private Equity & Credit

Div.

Corp. Administration

Div.

4

Real Estate

Management

29

Committee of

Performance Evaluation

20

Infra. 2

15

Retail Marketing

Div.

Institution 2

Product Strategy

Div.

Global Investment 2

Institution 1

Retail Marketing 1

Financial Management

Global Infrastructure

Fixed Income Management

Div.

NPL Management

CM Strategy

Div.

3

Fixed Income 1

2 16 7

Audit Div.

ETFs & Multi-Solution

Div.

Risk Management

Div.

11 10

Global Investment

Div.

Corporate Investment

Human Resources

Acquisition Financing

Communication

Div.

15 6

Real Estate Investment

Equity Investment

Div.

ETF Management

Institutional Marketing

Div.

Council of Sanctions

Council of Fund evaluation

Council of Risk management

Council of Products

Real Estate Div.

Labor-Management Council

Council of Prop. Management

Energy & Resources

Retirement Pension

KBFG (100%)

Board Of

Director

CEO

(1)

Audit Committee

Committee of

Recommendation for

Outside director

Passive Investment

Div.

10

Global Passive

Investment

Standing Auditor (1)

(Member of Audit Committee)

Compliance Officer (1)

Compliance

Global Fixed Income

17 5 3

Domestic Passive

Investment 1

Domestic Passive

Investment 2

KB Asset Management

Equity Investment Professionals – As of June 30th, 2016

There can be no assurance that the professionals currently employed by KB Asset Management will continue to be employed by KB Asset Management. 8

Name Job Title Division/

Team

KB Asset Management (Unit: Month) Years of Experience Including in KBAM (Unit: Month) Months of Experience

(Total)

Portfolio Mgmt.

Research

Months of Experience

(Total)

Portfolio Mgmt.

Research Others

Woongpil Choi CIO Equity Division 80 80 0 209 198 0 11 Younghyun Jung

Portfolio Manager, Team Head

Equity Division/ Value Team 1 80 66 14 102 66 36 0

Junbum Park Portfolio Manager Equity Division/ Value Team 1 52 11 41 64 11 53 0

Jongeun Song Research Analyst Equity Division/ Value Team 1 30 0 30 54 0 54 0

Younggu Nam Portfolio Manager,

Team Head

Equity Division/ Value Team 2 64 29 35 77 42 35 0

Soohyung Kim Portfolio Manager Equity Division/ Value Team 2 28 11 17 61 11 50 0

Insang Yoon Research Analyst Equity Division/ Value Team 2 10 0 10 10 10 0

Hyosub Sim Portfolio Manager,

Team Head

Equity Division/ Active Team 1 123 89 34 210 89 121 0

Sungho Yang Portfolio Manager Equity Division/ Active Team 1 124 84 40 186 84 102 0

Jihyun Jo Portfolio Manager Equity Division/ Active Team 1 70 34 36 120 34 86 0

Kyungjin Kim Portfolio Manager,

Team Head

Equity Division/ Active Team 2 40 15 25 186 75 111 0

Taewhan Yoon Portfolio Manager Equity Division/ Active Team 2 10 10 0 70 70 0 0

Heeeun Choi Portfolio Manager Equity Division/ Active Team 2 11 11 0 58 58 0 0

Byunghoon Jung Portfolio Manager,

Team Head

Equity Division/ AR Team 14 12 2 65 12 53 0

Jungmin Ahn Portfolio Manager Equity Division/

AR Team 5 5 0 99 99 0 0

Eunpyo Kang Portfolio Manager Equity Division/

AR Team 33 33 0 174 174 0 0

Kyungmin Kim Analyst,

Team Head

Equity Division/ Research Team 64 0 64 107 24 83 0

Jiyong Lee Analyst Equity Division/ Research Team 11 0 11 42 0 42 0

Kitae Song Analyst Equity Division/ Research Team 11 0 11 43 0 43 0

Daegeun Kim Analyst Equity Division/ Research Team 1 0 1 27 0 27 0

Eunyoung Nam Analyst Equity Division/ Research Team 11 0 11 40 0 40 0

Jaekyung Kim Analyst Equity Division/ Research Team 15 0 15 40 0 40 0

Equity Investment

Investment Philosophy

The aim is to achieve excess returns based on thorough fundamental research & concentrated investment.

Research capability is much stressed. Sector managers are in charge of investment universe and model portfolio. They conduct their own company analyses and invest with conviction. The focus is on stock selection based on bottom-up approach.

Portfolios are managed based on a long-term perspective rather than a short-term momentum.

Managers decide to invest preemptively based on research focusing on a long-term perspective.

Market and credit risks are constantly monitored so that upcoming and subsequent changes are identified.

Changes are met with appropriate responses while the effect on the stock holdings is examined.

10

Active Management

Long-term Approach

Thorough Risk

Management

Investment Process

Stock Review

• Valuation

• Growth

• Company visit (1,000 times per year)

• Non-Deal Roadshow

• Interview with Management, etc.

Basic Criteria

• Market cap: KRW 100 billion and above

• Financial Requirements

Stock Selection

• Strong BM, Cash flow, Franchise value and structural

growth

• Margin of safety, 30%

Determined by the Research Team

Reviewed on a monthly basis

Final Call: CIO

02 Actual Portfolio

01 Universe

Team Management

Portfolio Management

• Monitoring valuation, earnings forecast, price

attractiveness, etc.

• Analyzing performance attribution

• Responding to market and credit risk

Determined by the Management Team

Final Call: Portfolio Management Team

Value Style

11

* Criteria to be included in the Investment Universe: ① The market cap of a stock should exceed 100 billion. The Investment Universe is reviewed and updated at least quarterly; stocks with a market cap less

than 100 billion KRW can be included depending on market condition or company fundamentals, provided that approval of CIO is obtained. ② The trading volume within last 3 months should exceed 10 billion KRW. ③ Companies that have not posted net losses in the last 3 consecutive years ④ Companies that have not been included in the investment warnings list of Korea Exchange in the last 2 years.

Investment Process

Stock Review

• Valuation

• Growth

• Company visit (1,000 times per year)

• Non-Deal Roadshow

• Interview with Management, etc.

Basic Criteria

• Market cap: KRW 300 billion and above

• Financial Requirements

Stock Selection

• Focused analysis on companies by conducting

company visits and assessing financial and

managerial risks in a qualitative and

quantitative manner


Reviewed on a monthly basis

Final Call: CIO

02 Model Portfolio

03 Actual Portfolio

01 Universe


Reviewed on a weekly basis or ad hoc

Final Call: CIO

Team Management

MP Replication Ratio, 60%

• Team discretion, 40%

Portfolio Management

• Monitoring valuation, earnings forecast,

price attractiveness, etc.

• Analyzing performance attribution

• Responding to market and credit risk

Incentives for portfolio managers are

determined based on AP’s performance

compared to the MP

Determined by the Management Team

Final Call: Portfolio Management Team

Sector Weight

• Market neutral

Stock Selection within Each Sector

• Top picks by each sector manager

Reaching Agreement

• Communication or debate between

portfolio and sector managers

Incentives for research managers are

determined based on MP’s performance

compared to the market

Growth Style

* Criteria to be included in the Investment Universe: ① The market cap of a stock should exceed 300 billion. The Investment Universe is reviewed and updated at least quarterly; stocks with a market cap less

than 300 billion KRW can be included depending on market condition or company fundamentals, provided that approval of CIO is obtained. ② The trading volume within last 3 months should exceed 10 billion KRW. ③ Companies that have not posted net losses in the last 3 consecutive years ④ Companies that have not been included in the investment warnings list of Korea Exchange in the last 2 years.

12

KB Value Focus Korea Equity Fund

One of the Highest Performing Korea-domiciled Funds

KB Value Focus: the 2nd Largest Korea Equity Fund

- Highest-performing fund among top 10 best selling Korea equity funds

- KB Value Focus has never posted negative annual returns

- The fund’s rate of return since inception is the 6th highest among 301 active funds, meaning the fund ranks within top 2%

* As of June 30th, 2016

* No. of Korea-domiciled active Korea equity funds: 580

Source: Morning star The performance quoted is past performance and is not a guarantee of future results. All figures are net of fees, and gross of tax. Return and Percentile Rank figures are calculated in KRW. No representation is made that any portfolio will or is likely to achieve profits or losses similar to those shown. 14

Name

Fund Size Bil. USD

( June 30th, 2016)

Return (%) Percentile Rank (%)

2016 YTD (June, 30th)

2015 2014 2013 2012 2011 2010 2016 YTD

(June, 30th)

2015 2014 2013 2012 2011 2010

S V $ 2.64 0.08 12.07 6.37 19.61 16.63 -8.01 19.83 26 19 13 2 5 29 70

KB Value Focus Feeder Equity A $ 1.35 -1.83 4.33 4.53 9.87 12.17 3.75 46.68 45 53 16 9 15 4 1

M K $ 1.23 -9.26 21.96 14.84 97 5 4

KV 10 $ 1.18 -4.40 0.27 0.97 19.40 20.79 1.33 15.73 78 72 21 2 2 9 90

K N $ 0.99 -1.33 15.53 -2.25 1.14 7.78 -9.21 24.37 39 12 36 55 45 35 33

K M $ 0.90 -1.39 2.40 14.96 11.12 34.23 40 61 4 7 1

K S $ 0.83 -7.88 -3.40 -15.06 -5.55 12.96 -16.25 30.34 94 90 97 95 11 91 7

S M $ 0.69 -2.40 11.14 -2.35 13.67 15.17 -10.21 18.89 54 22 36 6 6 44 77

S S $ 0.67 -7.37 19.28 8.11 5.32 19.92 12.74 25.26 93 9 10 20 3 1 26

K S $ 0.61 -8.10 -4.76 -15.45 -6.03 12.39 -16.73 29.73 95 94 98 97 14 94 10

※ Percentile Rank calculated based on Korea-domiciled active equity funds

Identical Portfolio Manager Since Inception

The current CIO of KBAM has been managing the fund since 2009

1992-1999 Applied Statistics Department, College of Business and Economics, Yonsei University

1998-1999 LNG Carrier Department, Hyundai Merchant Marine

1999-2002 Sector Manager of Equity Management Team, Dongwon Securities

2002-2004 Sector Manager of Investment Adviser Department, Dongwon Investment Management

2004-2006 Sector Manager, Korea Investment Management

2006-2009 Asset Management Department, Korea Investment Value Asset Management

2009-Present CIO/Head of Equity Management Division, KB Asset Management

Currently manages KB Value Focus, KB Pension Dividend 40, and KB Small/Mid Cap Equity Fund

CIO, Woongpil Choi

Educational/Professional Background

15

Investment Professionals involved with KB Value Focus

Portfolio Managers

2008.02 Business major, Seoul National University

2008-2009 Asset Management Department, Korea

Investment Value Asset Management

2009-Present Head of Value Investment Team 2, KB Asset

Management

Yonghyun Jung,

Head of Value Inv. Team 1


16

2010.02 Computer Science and Engineering major,

Seoul National University

2010-2011 Asset Management Department, Korea

Investment Value Asset Management

2011-Present Head of Value Investment Team 2, KB Asset

Management


Younggu Nam,

Head of Value Inv. Team 2

Primary Investments

Low PER

Stocks with a PER Lower than the company’s

earnings value

Low PBR

Stocks with a PBR Lower than the

company’s assets value

High Dividend

New Value Stocks

Companies with stable

growth of earnings Based on market dominance

17

KB Value Focus Fund primarily invests in equities with …

≥

Dividend

Yields

Market Interest

Rates

Shown for illustrative purposes only. They do not constitute investment recommendations.

18

Focus & Principle of KB Value Focus

Undervaluation is not the only focus

Earnings value is as much important

While maintaining our principle of Buy & Hold

We engage in active trading upon significant price

changes

Turnover Ratio:

2013: 56.03%

2014: 62.38%

2015: 70.53%

Rather than blindly following the benchmark index

We primarily invest in stocks with upside potential

We do not invest in large cap companies just to follow the

benchmark index

Robust Business Model

Expected Structural Growth

Sustainability of Earnings

The fund’s focus & principle

Selection of Stocks

Re-Rating

If stocks that generate stable profits based on their

franchise value or intrinsic competitive advantage are

undervalued compared to the market valuation, the

value of the stocks will eventually converge to the

intrinsic value

Market Share

Predictability of Earnings

Sustainability of Earnings

Premium

If companies that are identified to have expected

structural growth and paradigm shifts are undervalued

relative to their growth potential, their structurally

stable growth potential will eventually be recognized

by consensus and the stocks will be valued higher than

the market valuation

Probability of Market Diversification

Life Cycle

Growth Potential of Flagship Products

Focused on stock selection, not on forecasting market outlook

- Stocks that have significantly higher intrinsic value

- Companies posting stable growth of earnings

- Stocks that match these conditions are actively purchased when the prices of the stocks tumble or the stocks are neglected

19

KB Value Focus has consistently outperformed the KOSPI and protected the principal

For the last 6 years the fund outperformed its BM without negative annual returns (%)

The winning rate of KB Value Focus is 100%; the Fund has never recorded negative annual returns since inception in 2009

Source: Morningstar, Base Currency The performance quoted is past performance and is not a guarantee of future results. All figures are net of fees, and gross of tax. Returns are calculated in KRW. No representation is made that any portfolio will or is likely to achieve profits or losses similar to those shown. 20

(%)

Time Period: 2011-07-01 - 2016-06-30

Tota

l Retu

rn %

Std Dev %

0.00 2.00 4.00 6.00 8.00 10.00 12.00 -4.00

-2.00

0.00

2.00

4.00

6.00

8.00

Investment Name

KB Value Focus A Korea OE Korea Large-Cap KRX KOSPI Korea PR KRW

2010 2011 2012 2013 2014 2015 2016 -20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Investment Name Return

KB Value Focus A 127.49% Korea OE Korea Large-Cap 26.08% KRX KOSPI Korea PR KRW 25.3%

Track Record vs Benchmark Performance Since Inception

Exceptional Risk Rewards (5YR)

Source: Morningstar, Base Currency The performance quoted is past performance and is not a guarantee of future results. All figures are net of fees, and gross of tax. Returns are calculated in KRW. No representation is made that any portfolio will or is likely to achieve profits or losses similar to those shown.

21

127.49%

25.3% 26.8%

KB Value Focus has outperformed the KOSPI by 108%

Time Period: 2011-07-01 - 2016-06-30

Tota

l Retu

rn %

Std Dev %

0.00 2.00 4.00 6.00 8.00 10.00 12.00 -4.00

-2.00

0.00

2.00

4.00

6.00

8.00

Investment Name

KB Value Focus A Korea OE Korea Large-Cap KRX KOSPI Korea PR KRW

2010 2011 2012 2013 2014 2015 2016 -20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Investment Name Return

KB Value Focus A 127.49% Korea OE Korea Large-Cap 26.08% KRX KOSPI Korea PR KRW 25.3%

Track Record vs Benchmark Performance Since Inception

Exceptional Risk Rewards (5YR)


22

127.49%

25.3% 26.8%

KB Value Focus has outperformed the KOSPI by 108%

KOSPI

EAA OE Korea Equity Korea Large-Cap

Source: Morningstar The performance quoted is past performance and is not a guarantee of future results. No representation is made that any portfolio will or is likely to achieve profits or losses similar to those shown. All performance figures are in USD terms. Figures related to KB Value Focus are net of fees, and gross of tax.

23

The fund’s investors have benefitted from the principle

The charts below show distribution of returns for each subscription date from November 30th, 2009 to June 30th, 2016

- The red parts indicate negative returns

KB Value Focus

.....

Subscription date

Evaluation date

Nov. 30, 2009

Dec. 31, 2009

Jan. 29, 2010

Jun. 30, 2016

.....

Dec. 31, 2009

Jan. 29, 2010

Jun. 30, 2016

Distribution of returns show that KB Value Focus has successfully preserved investors’ capital

Upon inspection of downside, KB Value Focus shows superior protection of principal: Other funds recorded a loss of 43% on average while KB Value Focus fund recorded average losses of only 16%

(From Nov. 30th 2009 to June 30th 2016)

KB Value

Focus KOSPI

EAA OE Korea Equity

Korea Large-Cap

140%~160% 0.37%

120%~140% 1.33%

100%~120% 3.67%

80%~100% 5.34%

60%~80% 5.86% 0.03%

40%~60% 12.35% 1.94% 1.33% 2.07%

20%~40% 23.36% 15.15% 10.74% 14.85%

0%~20% 32.04% 42.99% 40.49% 42.75%

-20%~0% 15.43% 39.01% 44.44% 38.89%

-40%~-20% 0.15% 0.90% 2.99% 1.42%

+ 84% 60% 53% 60%

- 16% 40% 47% 40%

Average 30.42% 5.89% 2.78% 5.61%

Max. 167.50% 52.92% 58.14% 60.34%

Min. -22.54% -26.57% -30.64% -27.89%


24

The fund’s investors have benefitted from the principle (cont’d)

수정중

Std Dev % 0.00 2.00 4.00 6.00 8.00 10.00 0.00

1.00

2.00

3.00

4.00

5.00

6.00

Investment Name

KB Value Focus A K V 10 K N

Time Period: 2013-07-01 - 2016-06-30

Crosshairs: KRX KOSPI Korea PR KRW

2010 2011 2012 2013 2014 2015 2016 -20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Investment Name Value

KB Value Focus A 127.49 KV 10 71.74 K N 46.53

Track Record vs competition Performance Since Inception

Risk-Rewards (3YR)

25

127.49%

46.53%

71.74%

KB Value Focus has outperformed its competitors

Tota

l Ret

urn

%


K V 10 K N


26

KB Value Focus has outperformed its competitors (cont’d)

The charts below show distribution of returns for each subscription date from November 30th, 2009 to June 30th, 2016

- The red parts indicate negative returns

KB Value Focus

.....

Subscription date

Evaluation date

Nov. 30, 2009

Dec. 31, 2009

Jan. 29, 2010

Jun. 30, 2016

.....

Dec. 31, 2009

Jan. 29, 2010

Jun. 30, 2016

Distribution of returns show that KB Value Focus has successfully preserved investors’ capital

Upon inspection of downside, KB Value Focus shows superior protection of principal: KB Value Focus fund recorded average losses of only 16% while competitor funds showed losses of 20% and 25%

(From Nov. 30th 2009 to Jun. 30th 2016)

KB Value

Focus K V 10 K N

140%~160% 0.37% 0.00% 0.00%

120%~140% 1.33% 0.06% 0.00%

100%~120% 3.67% 1.48% 0.00%

80%~100% 5.34% 5.46% 0.00%

60%~80% 5.86% 11.27% 0.15%

40%~60% 12.35% 18.02% 7.16%

20%~40% 23.36% 18.98% 18.70%

0%~20% 32.04% 24.57% 49.29%

-20%~0% 15.43% 19.60% 24.35%

-40%~-20% 0.15% 0.56% 0.34%

+ 84% 80% 75%

- 16% 20% 25%

Average 29.67% 26.55% 6.63%

Max. 156.61% 115.30% 83.08%

Min. -14.29% -25.32% -26.14%


27

KB Value Focus has outperformed its competitors (cont’d)

28

USD 1.4 Billion

USD 2.4 Billion

Source: Morning Star The performance quoted is past performance and is not a guarantee of future results. No representation is made that any portfolio will or is likely to achieve profits or losses similar to those shown. All performance figures are in USD terms. Figures related to KB Value Focus are net of fees, and gross of tax.

Performance from September 2013 to May 2015

AUM Trend Since Inception

Outperforming the BM even through large redemptions

Investment Process of KB Value Focus

Investment Process

29

Quantitative Analysis • PER & PBR : 30 % discounted compared to the

market • Dividend Yield: Higher than 3% • Other factors: Free Cash Flow, EBITDA, etc.

Qualitative Analysis • Business Model Analysis: Market Share, Earnings Visibility,

Sustainability of Earnings • Structural Growth: Market diversification and/or

expansion, Life cycle • Paradigm Shift: Leader and or pioneer • Companies that can retain earnings are preferred over

capital-intensive industry

Stock Evaluation • Premium: Stocks that have good reasons to be traded at a higher valuation than the

market • Re-rating: Stocks that are undervalued compared to intrinsic values • Discount: Stocks that have good reasons to be cheap

Actual Portfolio • Invest mainly in premium and re-rating stocks, occasionally picking discount stocks, if

necessary • Decide sector weights, preferring sectors with sustainable and stable earnings • Number of stocks in the actual portfolio ranges from 80 to 100 • Monitor market and credit risk consistently

What KB Value Focus looks into

In summary, KB Value Focus Korea Equity Fund …

02 focuses on stock selection rather than indices or economic outlook

•The fund invests in stocks that are undervalued relative to their intrinsic values, including values of an

enterprise, assets, and earnings

•It also invests in stocks that are expected to see a stable growth in earnings while being less affected

by external changes such as economic fluctuations

•Such is a new type of value investment strategy, which has evolved from a traditional value strategy

01 invests in stocks that are undervalued and expected to see stable growth

•The fund does not forecast the market or make sector bets

•Focuses on stock selection whereas portfolio composition and sector weights are results of stock selection.

•We believe that our strategy is a necessary evolution from a traditional value investment strategy

30

KOSPI 82.79%

KOSDAQ 17.21%

Portfolio of KB Value Focus

Portfolio (As of April 30th, 2016)

Weight by KOSPI & KOSDAQ

Sector Weight (%)

Weight by Market Weight

Top 10 Holdings (Weight, %)

Source: KB Asset Management Shown for illustrative purposes only. The inclusion of the securities mentioned above is not to be interpreted as recommendations to buy or sell and is subject to change without notice. 31

Weight(%)

KOSPI KOSDAQ

Large Cap 32.00 0.91

Middle Cap 38.11 8.43

Small Cap 12.68 7.88

Total 82.79 17.21

Stock GICS Industry Groups Market

(%) KB Value Focus (%)

Difference (%)

Com2uS Corp Software & Services 0.11 6.85 6.74

SK Telecom Co Ltd Telecommunication Services 1.09 4.50 3.40

Korea Electric Power Corp Utilities 2.61 3.91 1.30

SK Holdings Energy 1.04 3.64 2.60

Fila Korea Ltd Consumer Durables & Apparel 0.08 3.42 3.34

NAVER Corp Software & Services 1.47 3.19 1.73

Hansol Chemical Co Ltd Materials 0.05 3.03 2.97

Dongwon Industries Food, Beverage & Tobacco 0.06 2.80 2.73

Samsung Electronics Co Ltd Technology hardware & Equipment

11.88 2.55 -9.33

KB Capital Co Ltd Diversified Financials 0.03 2.42 2.38

GICS Sector Market (%) KB Value Focus (%)

Difference (%)

Information Technology 23.39 21.38 -2.01

Industrials 15.01 17.46 2.45

Consumer Discretionary 19.71 14.51 -5.19

Financials 12.41 14.02 1.61

Materials 10.21 11.65 1.45

Consumer Staples 6.21 7.99 1.78

Telecommunication Services

2.44 4.69 2.25

Utilities 4.29 4.08 -0.21

Others 0.26 2.51 2.25

Health Care 3.51 1.46 -2.05

Energy 2.56 0.24 -2.32

Summary of KB Value Focus

Summary

32

KB Value Focus

Portfolio Manager Woong-pil Choi

ISIN / Bloomberg Ticker KR5223174917 / 3174917 KS Equity

Inception date November 9, 2009

NAV (USD) * As of June 30th, 2016

$ 1,437,344,897

BM KOSPI

No. of Holdings 74

Beta (1yr/3yr/since inception) 0.93 / 0.70 / 0.68

Sharpe(1yr/3yr/since inception) -1.03 / 0.32 / 0.93

Tracking Error (1yr/3yr/since inception, %) 8.34 / 8.26 / 9.19

Turnover Ratio (1yr, %) 58.75

Portfolio PER 11.00

Portfolio PBR 1.25

Source: KB Star M Data as of June 30th, 2016 (Portfolio Holdings, PER, PBR as of April 30th, 2016)

33

KB Star Funds – KB Value Focus Korea Equity

Investment Management Fee Sales Charge / Redemption Charge

Minimum initial investment (USD/EUR)

A ACC USD/EUR 2.00% 5.00% 1,000

I ACC USD/EUR 0.75% N/A 5,000

I2 ACC USD/EUR 0.50% N/A 5,000,000

• Domicile: Luxembourg

• Legal Structure: UCITS SICAV

• Launch date: June 20, 2016

• Service Providers

Depositary Bank, Administratior, Paying Agent, Registrar, and Transfer Agent: HSBC Bank Plc, Luxembourg Branch

Management Company: Carne Global Fund Managers (Luxembourg) S.A.

Legal Advisers: Elvinger, Hoss & Prussen

Auditors: Deloitte Audit S.à r.l.

• Classes of shares available for subscription

Internal Control

Investment System

Star F

- An internally developed trading system

- It provides pre-transaction compliance function

KB MPuStar

- An internally developed system designed to maximize efficiency in equity management process

- KB MPStar provides a research function and enables managers to determine a portfolio and simulate returns

- It is also used as a tool to evaluate portfolio managers and sector managers

Other information systems

- Bloomberg, IBES data, Data Stream, Brokerage terminals, Market Point, Infomax, and Reuter

35

Star M

- An internally developed asset management system

- It is widely utilized by equities, fixed income and marketing professionals

Risk Management

Portfolio Managers Risk Management Division

Market Risk

Monitor macroeconomic factors

Monitor business environment of each sector

Model Portfolio Replication Ratio: 60%

- Discretion of managers is limited to 40%

Equity Turnover Ratio: Within 300% a year

- Transaction costs caused by frequent transactions are

reduced

Credit Risk

Review and analyze fundamentals and

valuations of individual stocks

Review on a weekly basis and ad hoc

Investment Universe Management: Allow managers to invest

only in securities which are fully analyzed

Liquidity Risk

Market Capitalization: Growth: KRW 300 billion and above/Value: KRW 100 billion and above

Managers are allowed to invest primarily in large cap securities so that liquidity risk is prevented

Stocks with market cap under KRW 300 billion (Growth) or KRW 100 billion (Value) can only be included in the

investment universe after approval of CIO is obtained

Periodic Review Daily and weekly monitoring

Upon detection, violations are reported to CIO and CRO and a request for corrective action follows

36

Risk Management

Risk Management System Flow

• Risk Management Committee

– Establishes risk management strategies and procedures

– Annually renews risk tolerance reflecting market condition

• Product Committee

– Determines best risk management methods for each new investment product

• Inspecting and Evaluating Risk Factors

–

• Performance Analysis – Attributes for performance are analyzed for each investment of a portfolio

• Periodic Reports and Reporting

– Reports on factors monitored are produced on a daily and weekly basis

– The Risk Management Committee is debriefed on reports

– Major issues are handled in the Risk Management Committee

Establish Risk Management Policy

Measure and Evaluate Risks of Each Portfolio

Report Present Risks and Devise Follow-ups

Risk factors are quantitatively measured reflecting characteristics of portfolios and relevant market risks (e.g. interest rates, duration, and credit ratings)

37

Compliance

Internal Control for Business Compliance

38

• Prohibition on unfair transaction

• Executives and employees’ trading of financial investment products

• Reporting of provision/receipt of benefit

• External activities other than duty

• Compliance training (regular/irregular basis)

Code of Conduct

• Compliance with laws and regulations

• Reporting obligation

• Prioritization of clients interests

• Procedures of providing confidential information

Conflict of Interest

• A compliance pledge of the company is signed and submitted to the compliance officer

• A system to report violation

Measures on Illegal and Unfair Practices

• An anti-money laundering system that comprehensively covers the anti-money laundering law

Establishment of Anti-Money Laundering System

• Development of a new product

• Sales activities of the company

• Principle of handling trading orders

• Selection criteria for brokerage

Compliance Matters for Investment Trust

Compliance (cont’d)

39

1. Pre-caution

• On a daily basis, monitoring results which may constitute a breach are reported to portfolio managers

• Soft rule is fixed beforehand (e.g. maximum X% - 1)

2. Prior approval

• All trades initiated by a portfolio manager must first go through compliance checking before each order

reaches a trader

3. Frequent Examination

• Regular and frequent examinations to make sure investment guidelines are observed

• Breaches are examined at 12:00 / 15:00/ 17:30 (KST) on a daily basis

Procedures of Pre-Check

Internal Control for Business Compliance


Internal Control for Investment Compliance

40

In the event of a breach of a restriction, portfolio managers must rectify within 3 business days

• The measure standard

− Primary: Rectification within 3 business days is required. Identification of reasons & submission of plans for rectification must be followed

− Secondary: If breaches are not rectified over 3 Business days, reasons must be submitted in writing

− Tertiary: If breaches are not rectified over 6 Business days, it is reported to the personnel committee

• Breaches are rated as grade

− Breaches are reflected by 10% in the performance assessment of a portfolio manager

• Bi-monthly compliance training for portfolio managers

− Bi-monthly compliance training is held

− A feedback directly goes to the portfolio manager to offer remedial measures to prevent its reoccurrence

Disciplinary Measures on Breaches


Electronic systems are introduced and being operated so that efficiency in internal control is achieved

41

•Definition: Trading system • Definition: Electronic approval system

Groupware

- EDMS

Star M

- Middle system

•Characteristics: Accessing and

regularly examining all business to

make sure internal control standards

are met

• Definition: Business support system

•Characteristics: Electronically record

and store all communication related

to assigned duties

• Characteristics: Handling all orders in

a fair manner and executing trading in

accordance with principle based on

fairness

Star F

- Trading system

Awards and Accolades

KB Asset Management product line-up

Line-up of Funds

• Korea Value Focus • Korea Growth Focus • Korea Value & Growth • Korea Small and Mid Cap • Korea Star • Major Groups • Elite 20 • M&A • Foreigners Preferred

Asia

• China

• China Focus

• China A-share

• India

• ASEAN

• Vietnam

• Japan Blue Chip Selection

Global

• Multimanager BRICs

• Global Dividend

Emerging

• Euro Convergence

• Russia Growth

• MENA

• Brazil

Domestic Equity

KB Asset Management strongly emphasizes teamwork and integrity. Active

communication and team discussion enable a dynamic portfolio strategy that

evolves with new investment ideas. We employ both bottom-up and top-down

analyses for all investments.

Overseas Equity

KB Asset Management covers all major investment areas across the globe and

provides investment solutions in both direct and FOF formats. Moreover, KB Asset

Management is one of the first domestic investment houses to introduce the

“Manager of Managers” investment concept.

43

Fixed Income & MMF

KBAM is a major player in the fixed income market with over USD 9.5 billion under

management in bond funds and MMFs. We primarily invest in government, agency,

and high quality corporate debt.

• Korea Star Government Bond

• Korea Corporate Bond

• Emerging Market Bond Plus

KB Asset Management

Line-up of Funds

• Korea index / leveage 1.5, 2.0 index

• Korea China Japan index

• China H index

• Japan index

• US S&P500 index

• Euro index

• Russia index

• MKF Commodities index

• Gold index

• KB Star 5 Major Groups

• KB Star KOSDAQ Elite 30

• KB Star Leveraged

• KB Star Government Bonds

Index

Our index strategy covers both Korean and overseas equity markets as well as

commodities.

ETF

KBAM was the first company to launch a bond ETF

44

Real Estate

We aim to provide stable returns by investing predominantly in commercial

properties and real estate developments as well as major global real estate

markets.

• Real Estate (Domestic/Overseas)

- Korea

- China

Infrastructure

Our main infrastructure funds invest in various sectors including SOC, logistics and

shipping, primarily in the form of BTL and BTO.

• Infrastructure

• Shipping

• Logistics

Private Equity

Our private equity funds invest capital raised by private placement in equities and

bonds through a negotiation process or acquisition of managerial control.

• Mezzanine

45

BEST OVERSEAS EQUITY FUND

MONEY TODAY “KOREA FUND GRAND PRIZE”

KB MENA Fund

FUND MANAGER OF THE YEAR

SEOUL ECONOMIC DAILY “KOREA BEST

SECURITIES AWARDS 2014”

KBAM’s Infrastructure Division

BEST PENSION FUND

HERALD BUSINESS “FUND GRAND PRIZE”

KB Pension Dividend 40

FUND MANAGER OF THE YEAR

HERALD BUSINESS “FUND GRAND PRIZE”

KBAM’s Infrastructure Division

BEST PERFORMING FUND

KG ZEROIN FUND RATING “KOREA FUND AWARDS”

KB Star Japan Index Fund

BEST ASSET MANAGEMENT COMPANY

ASIA BUSINESS DAILY “ASIA FUND GRAND PRIZE”

KB Asset Management

BEST OVERSEAS EQUITY INDEX FUND


KB Star Japan Index Fund

2014 BEST OVERSEAS FUND

e-DAILY “FINANCIAL INVESTMENT AWARD”

KB Asset Management

BEST PENSION FUND

KOREA ECONOMIC DAILY “KOREA FUND GRAND

AWARD”

KB Asset Management

BEST PENSION FUND


KB Pension Fund 40

SPECIAL PRIZE FOR BEST PERFORMING FUND


KB Mainland China Leverage Fund

EXCELLENCE AWARD FOR BOND BALANCED

FUND


KB Pension Fund 40

BEST FUND AWARD


KB Asset Management

2015

Awards Presented in 2015/2014

46

ASSET MANAGEMENT COMPANY OF THE YEAR

ASIAN INVESTOR “KOREA AWARDS”

KB Asset Management

GOLD PRIZE OF “BEST ASSET MANAGER”

MK BUSINESS NEWS “BEST ASSET MANAGER”,

CIO Woongpil Choi of KB Value Focus Fund

BEST ASSET MANAGEMENT COMPANY

KOREA ECONOMIC DAILY “KOREA FUND GRAND AWARD”

DOMESTIC EQUITY FUND

BEST FUND AWARD


DOMESTIC EQUITY FUND

BEST FUND AWARD



2012 BEST FUND AWARD – ACTIVE EQUITY FUND

MK BUSINESS NEWS “KOREA FUND GRAND AWARD”

KB Value Focus Fund

ASSET MANAGEMENT COMPANY OF THE YEAR

ASIAN INVESTOR “KOREA AWARDS”

KB Asset Management

BEST ASSET MANAGER AWARD

MK BUSINESS NEWS “BEST ASSET MANAGER AWARD”

CIO Woongpil Choi of KB Value Focus Fund

BEST FUND AWARD – DOMESTIC EQUITY FUND

KOREA ECONOMIC DAILY “KOREA FUND GRAND AWARD”

KB Small/Mid Cap Equity Fund

BEST PENSION FUND

MONEY TODAY “KOREA FUND GRAND PRIZE “


2013

Awards Presented in 2013/2012

Disclaimer

47

Risks and Disclaimers

General

The Fund is intended for long-term Investors who can accept the significant risks associated with investing in illiquid securities. An investment in the Fund involves various risk factors, including the possibility of partial or total loss of the Fund capital, and prospective Investors should not subscribe unless they can readily bear the consequences of such loss. There can be no assurance that the Fund will achieve its Investment Objective or Portfolio Target Return, or that there will be any return on capital. In particular, potential investors should take into account the fact that the actual return achieved may be more or less in any particular year, and that different returns may be achieved by different Investments, according to their different cost bases, and that different Fund Investor Vehicles may have different returns.

Projections The opinions stated in this presentation include some forecasted views. We believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee that any forecasts or opinions will be realized.

Portfolio No representation is being made that any portfolio will or is likely to achieve profits or losses similar to those shown. Portfolio holdings are subject to change at any time without notice .

Risks Involving Investment Strategy

Opinions, estimates, forecasts, projections and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. There can be no guarantee they will be met.

Risks Associated with Performance

The performance quoted is past performance and is not a guarantee of future results. All figures are in USD terms, net of fees, and gross of tax. The impact of the initial charge can be material on the performance of your investment. Performance figures including the initial charge are available upon request. The Fund is subject to certain market risks. Investment returns and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Current performance may be higher or lower than the performance data shown. For performance current to the most recent month-end, please send an email to the following address: [email protected]

Currency Risks Changes in the rates of exchange may affect the value of investments. The Fund can invest in overseas securities which may also generate profits overseas and pay dividends in foreign currencies, which means the fund is exposed to changes in currency rates.

Impact of Compensation

The Fund takes its charges from the Fund. The impact of Fund charges may be material on the value of any income you receive from your investment. There is potential for future capital erosion if insufficient income is generated by the Fund to cover these charges. Please see the prospectus for additional information on the fees and expenses.

Tax Risks Tax treatment will depend on the individual circumstances of clients and may be subject to change in the future. The rate and amount of tax would vary depending on the mix and type of investments made by the Fund. Investors should consult their tax advisers regarding such tax consequences as well as any taxes to which they may be subject in their own jurisdiction.

Limitations of Target Returns

An investor should not expect to achieve actual returns similar to the target return shown herein. The target return is the manager’s goal based on various manager assumptions, calculations of available data, past and current market conditions, and available investment opportunities, each of which are subject to change. Because of the inherent limitations of the target return, potential investors should not rely on it when making a decision on whether or not to invest in this Fund.

Risks and Disclaimers (cont’d)

※ This presentation is written with investment risks involving the parent fund taken into account.

※ Risks are not limited to the risks listed in this presentation. There can be various types of unexpected risks. 48

Risk of Concentrated Investment in

Equities

The Fund primarily invests in equities and equity related securities and thus changes in stock prices may adversely affect the value of the Fund. A fall in prices of the equities held by the Fund may result in a decline in the value of the Fund. If the Fund’s investment portfolio falls in value, investors’ investment in the Fund may suffer losses.

Risk of Concentrated Investment in

Selective Sectors

The Fund may selectively invest in stocks in a limited number of sectors while remaining in the accordance with applicable statutes. The lack of diversification may increase the impact that a small number of stocks or sectors may have on the Fund and the volatility of the Fund, compared to the market or other same type of funds in general.

Risk of Lack of Liquidity

Since small- to mid-cap stocks, liquidity of which is generally limited, may be included in the portfolio, a large redemption of shares may Increase the volatility in the Fund’s net asset value per share..

Market Risks The Fund primarily invests in equities and thus is exposed to risks of changes in security prices and macro-economic indicators. In addition, the value of the Fund’s assets may radically change, depending on the condition of issuers of stocks held by the fund, e.g., the status of their sales, finances, and credit.

Credit Risks The value of the Fund’s assets may radically change when the condition of counterparties of transactions or issuers of stocks held by the fund, e.g., the status of their sales, finances, and credit, deteriorates and subsequently, it is increasingly likely that credit ratings of the counterparties or the issuers may be downgraded or they may default on their debt.

Risks of Taxation

Tax authorities divide gains/losses from investments into two categories: gains/losses generated from taxable assets and gains/losses generated from non-taxable assets. Non-taxable gains/losses imply that the tax will not be imposed on gains but, at the same time, losses will not be recognized. As such, even if the outcome of investments as a whole records a loss, the tax may be imposed, if there are gains derived from taxable assets alongside gains obtained from non-taxable assets.

* Examples of Taxable Income: Dividends on stocks, profits from overseas investments, gains from foreign exchange, and yields and capital gains from bonds

* Examples of Non-Taxable Income: Capital gains/losses from buying/selling stocks listed in the South Korea stock market.

Risks Associated with Redemption

Redemption of the Fund entails risks associated with the gap between the selected redemption date and the actual date of redemption, during which the value of the Fund’s assets is subject to change. In addition, a redemption fee may be incurred upon redemption, depending on the period the Fund has been held, and the redemption fee belongs to the Fund.

25F, 70, Yeoui-daero, Yeongdeungpo-gu,

07325 Seoul, South Korea

www.kbam.co.kr/ib/kbstarfunds

82-2-2167 – 8200

Thank You.

http://www.kbam.co.k/ib/kbstarfundsr



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