Alternative Investments

Periodic Table of Asset Class Returns

FOR ILLUSTRATIVE PURPOSES ONLY
79.22% 71.26% 27.17% 53.31% 24.35% 30.88% 22.26% 28.22% 21.32% 27.94% 21.22% 27.10% 19.46% 26.32% 12.33% 22.50% 9.05% 7.62% 7.40% 1992 0.91% 5.23% 10.37% 10.08% 9.75% 1993 6.00% 5.08% 4.10% 4.00% 3.38% 2.61% 1.32% 1994 27.14% 37.58% 24.84% 33.36% 31.04% 22.96% 23.41% 63.70% 12.18% 8.92% 8.42% 6.87% 4.62% 2.80% 0.84% 0.40% 2001 29.32% 21.75% 21.23% 28.58% 55.86% 21.50% 14.49% 16.79% 15.98% 31.29% 11.63% 20.72% 14.39% 16.57% 18.48% 13.48% 16.20% 15.66% 13.64% 11.10% 0.69% 1995 9.32% 15.93% 9.12% 15.76% 3.91% 10.89% 3.61% 9.68% 1996 1997 8.67% 7.01% 6.19% 2.81% 2.62% 1.70% 1998 26.47% 24.93% 24.33% 21.04% 17.62% 14.73% 1999 9.09% 7.86% 6.74% 4.98% 4.07% 1.97% 2000 55.82% 25.55% 34.00% 32.17% 39.39% 39.36% 18.42% 21.04% 24.26% 24.92% 33.11% 15.01% 10.60% 20.07% 11.11% 28.68% 14.72% 25.33% 10.88% 21.42% 12.36% 20.54% 10.27% 19.55% 7.44% 5.44% 3.70% 1.02% 2002 11.61% 9.72% 8.69% 4.11% 2003 9.03% 7.68% 6.86% 5.58% 4.63% 4.34% 3.30% 2004 9.49% 9.30% 7.49% 7.29% 6.79% 6.02% 4.91% 2.43% 1.71% 2005 15.79% 10.48% 15.33% 10.25% 12.89% 12.37% 11.71% 10.39% 8.15% 4.33% 3.54% 2006 9.96% 9.04% 8.94% 7.64% 6.96% 6.61% 5.49% 2007 5.24% 4.83% 2008 18.88% 78.51% 15.06% 40.25% 11.86% 29.99% 11.76% 26.46% 11.44% 25.81% 11.43% 25.04% 10.45% 24.57% 10.25% 19.98% 14.09% 11.47% 5.93% 4.34% 2009 8.06% 7.05% 6.56% 5.70% 2010 7.86% 2.11% 0.13% 2011 18.22% 16.00% 15.83% 10.49% 10.19% 8.63% 7.42% 6.22% 4.81% 4.23% 2012

25.11% 21.10% 18.82% 24.34% 44.22% 13.41% 10.36%

0.65% 6.95% 2.92% 3.48% 4.30% 8.67%

13.41% 5.11% 32.96%

0.83% 9.11% 2.61% 1.45% 13.18% 16.82% 4.71% 31.80% 6.17% 19.89% 22.10%

18.04% 0.10% 19.03% 21.37% 21.82% 26.65% 37.00% 37.26% 40.71% 53.33%

3.00% 0.37% 3.30% 1.64% 4.15% 5.24% 5.54% 5.72% 8.36% 13.94% 18.43%

27.52% 1.19% 10.71% 11.88% 4.30%

USStocks ManagedFutures EMHedgeFunds

RelativeValue EMEquities USCorporateBonds

GlobalEquities HedgeFunds Macro

EventDriven EquityHedge HedgeFundofFunds

Data: January 1992 - December 2012. The data for US Equities (S&P 500 Index), Global Equities (MSCI World Index), Emerging Markets Equities (MSCI Emerging Markets Index), US Corporate Bonds (Barclays Aggregate Bond Index), Hedge Funds (HFRI Fund Weighted Composite Index), Managed Futures (Barclay CTA Index), EM Hedge Funds (HFRI Emerging Markets (Total) Index), Macro (HFRI Macro (Total) Index), Relative Value (HFRI Relative Value (Total) Index), Event Driven (HFRI Event Driven (Total) Index), Equity Hedge (HFRI Equity Hedge (Total) Index), Hedge Fund of Funds (HFRI FOF Weighted Composite Index). These indices are unmanaged and an investor cannot invest directly in an index. Composite index results are shown for illustrative purposes and do not represent the performance of a specific investment. Asset allocation does not assure a profit or protect against loss in declining financial markets. This presentation is for illustrative purposes only and is not intended to form the basis of any investment decisions. Actual investments may vary substantially and market conditions may vary. This presentation is not intended to reflect a particular portfolio or portfolio opportunities. Please see the following pages for important disclosures including data sources. Past performance is no guarantee of future results.

Alternative Investments

Periodic Table of Asset Class Returns

IMPORTANT DISCLOSURES This presentation (the Presentation) has been prepared by the Morgan Stanley Wealth Management Alternative Investments Group (AIG) for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy in any jurisdiction. This is not to be reproduced or distributed to anyone other than the person to whom this was delivered. This is not a research report and was not prepared by the Research Departments of Morgan Stanley & Co. Incorporated or Citigroup Global Markets Inc. The views and opinions contained herein are those of AIG and may differ materially from the views and opinions of others at Morgan Stanley Smith Barney, LLC or its affiliates (collectively, Morgan Stanley Smith Barney LLC). The Presentation represents the views of AIG at the time of publication, are subject to change without notice, and may differ materially from the views and recommendations of others at Morgan Stanley Smith Barney LLC. The conclusions are speculative in nature and are not intended to predict the future of any specific investment strategy. Although information in this document has been obtained from sources believed to be reliable, Morgan Stanley Smith Barney LLC and its affiliates do not warrant the accuracy or completeness and accept no liability for any direct or consequential losses arising from its use. Past performance is not necessarily a guide to future performance. The Presentation is not a substitute for a client-specific suitability analysis conducted by you and your Financial Advisor/Private Wealth Advisor. You and your Financial Advisor/Private Wealth Advisor must determine the suitability of a particular investment based on the characteristics and features of the investment and relevant information provided by you, including, but not limited to, your existing portfolio, investment objectives, risk profile, and liquidity needs. Before investing in any fund, you must review and be familiar with the funds offering materials, including the private placement memorandum or prospectus, which will include important information about investment objectives, terms, significant risks, and conflicts of interest. Alternative investments can be highly illiquid, are speculative and not suitable for all investors. Investing in alternative investments is only intended for experienced and sophisticated investors who are willing to bear the high economic risks associated with such an investment. Investors should carefully review and consider potential risks before investing. Certain of these risks may include loss of all or a substantial portion of the investment due to leveraging, short-selling, or other speculative practices, lack of liquidity in that there may be no secondary market for the fund and none is expected to develop, volatility of returns, restrictions on transferring interests in a fund, potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized, absence of information regarding valuations and pricing, complex tax structures and delays in tax reporting, less regulation and higher fees than mutual funds, and risks associated with the operations, personnel and processes of the manager. Individual funds will have specific risks related to their investment programs that will vary from fund to fund. In the ordinary course of its business, Morgan Stanley Smith Barney LLC engages in a broad spectrum of activities including, among others, financial advisory services, investment banking, asset management activities, sponsoring and managing private investment funds. In engaging in these activities, the interest of Morgan Stanley Smith Barney LLC may conflict with the interests of clients. The sole purpose of this document is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned in this document may not be suitable for all investors. Before making any investment, each investor should carefully consider the risks associated with the investment and make a determination based upon the investors own particular circumstances, that the investment is consistent with the investors investment objectives. Morgan Stanley Smith Barney LLC does not render advice on tax and tax accounting matters to clients. The Presentation was not intended or written to be used, and it cannot be used or relied upon by any recipient, for any purpose, including the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Each client should consult his/her personal tax and/or legal advisor to learn about any potential tax or other implications that may result from acting on a particular recommendation. Interests (1) are not FDIC-insured, (2) are not deposits or other obligations of a bank, (3) are not guaranteed by a bank, and (4) involve investment risks, including possible loss of principal. Morgan Stanley Smith Barney LLC is a registered broker-dealer, not a bank. 2012 Morgan Stanley Smith Barney LLC. Member SIPC.

Alternative Investments

Periodic Table of Asset Class Returns

Important Notes Returns for the S&P 500 Index, Global Equities (MSCI World Index), EM Equities (MSCI Emerging Markets Index), US Corporate Bonds (Barclays Aggregate Bond Index) are provided by PerTrac Financial Solutions, LLC (Memphis, TN). Returns for Hedge Funds (HFR Fund Weighted Composite Index), EM Hedge Funds (HFRI Emerging Markets (Total) Index), Macro (HFRI Macro (Total) Index), Relative Value (HFRI Relative Value (Total) Index), Event Driven (HFRI Event Driven (Total) Index), Equity Hedge (HFRI Equity Hedge (Total) Index), Hedge Fund of Funds (HFRI FOF Weighted Composite Index) are provided by Hedge Fund Research Group (Chicago, IL). Returns for Managed Futures (Barclay CTA Index) are provided by Barclay Hedge, Ltd. (Fairfield, IA). Indexes are unmanaged and returns are shown for illustrative purposes only. It is not possible to invest directly in an index. Generally, an aggressive investment that seeks the highest possible gains will have a greater degree of risk, whereas a conservative investment that offers safety of principal tends to provide lower returns over time. Keep in mind that while all investing involves risk, stocks tend to experience greater volatility and carry greater risks than bonds. The income and principal payments of U.S. government bonds are backed by the full faith and credit of the U.S. government. Other investments are not insured, and your proceeds from the resale of stocks, from the resale, early redemption, or repayment at maturity of bonds, or from the redemption of interests in a managed futures fund, may be more or less than what you originally paid for them. International investing may subject the portfolio to additional risks including currency, political, economic, and market risks. Managed futures investments are speculative, involve a high degree of risk, use significant leverage, have substantial charges, are generally less liquid than the other investments represented by the indices herein, and are suitable only for the risk capital portion of an investors portfolio. The managed futures data discussed reflect the fee structures of trading advisors managing individual accounts and does not reflect fee structures of commodity pools, which are typically higher. The comparison of the S&P 500 Index and the Barclay CTA Index is for illustrative purposes only. The Barclay CTA Index attempts to provide a benchmark of representative performance of the money managers within the managed futures industry. The Index is comprised of 488 money managers, all of which have at least four years of prior performance history. The Index is unweighted and rebalanced at the beginning of each year. Accordingly, the Barclay CTA Index is not a proxy for, or otherwise representative of, any specific Morgan Stanley Wealth Management managed futures fund. Furthermore, the S&P 500 Index and the Barclay CTA Index reflect the volatility and risk of loss characteristics of a broadly diversified equity portfolio and universe of commodity trading advisors, respectively. The performance results of any Morgan Stanley Wealth Management managed futures fund will be different from the performance of the Barclay CTA Index. The futures and forward markets are fundamentally different from the securities markets in that for every gain in futures and forward trading, there is an equal and offsetting loss. If a managed futures fund does not perform in a manner non-correlated with the general financial markets or does not perform successfully, investors will obtain no diversification benefits by investing in such fund. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

Alternative Investments

Periodic Table of Asset Class Returns

For the analyses used herein, the performance of independent indices has been used to represent five asset classes: U.S. stocks, U.S. corporate bonds, international stocks, global stocks and managed futures. The respective indices used are the Standard and Poors 500 Stock Index, the Barclay Aggregate Bond Index, the Morgan Stanley Capital International (MSCI) World Index, the Morgan Stanley Capital International (MSCI) Emerging Markets Index and the Barclay CTA Index. The S&P 500 Index and the Barclay Aggregate Bond Index are compiled assuming dividends and interest are re-invested. The S&P 500 Index is an index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe. Barclays Aggregate Bond index is a benchmark index made up of the Barclays Capital Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment-grade quality or better, have at least one year to maturity, and have a coupon that is fixed or steps according to a predetermined schedule. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The Barclay CTA Index provides a benchmark of performance of commodity trading advisors. In order to qualify for inclusion in the Barclay CTA Index, a commodity trading advisor must meet the following criteria: (1) the commodity trading advisor must have four years of prior performance history; and (2) in cases where a commodity trading advisor who is in the Barclay CTA Index introduces an additional program, this additional program is added to the Index only after its second year of trading. There are currently 602 CTA programs, with at least four years of performance history, included in the calculation of the Barclay CTA Index for the year 2012, which is unweighted and rebalanced at the beginning of each year. While the HFRI Indices are frequently used, they have limitations (some of which are typical of other widely used indices). These limitations include survivorship bias (the returns of the indices may not be representative of all the hedge funds in the universe because of the tendency of lower performing funds to leave the index); heterogeneity (not all hedge funds are alike or comparable to one another, and the index may not accurately reflect the performance of a described style); and limited data (many hedge funds do not report to indices, and the index may omit funds, the inclusion of which might significantly affect the performance shown. The HFRI Indices are based on information self-reported by hedge fund managers that decide on their own, at any time, whether or not they want to provide, or continue to provide, information to HFR Asset Management, L.L.C. Results for funds that go out of business are included in the index until the date that they cease operations. Therefore, these indices may not be complete or accurate representations of the hedge fund universe, and may be biased in several ways. HFRI Fund-Weighted Composite Index (HFRI) an equally weighted composite index, which accounts for over 2,000 funds listed on the internal HFRI Database. The Funds included in the index must report monthly returns, net of all fees returns, assets in USD and have at least $50 million under management or have been actively trading for at least 12 months. HFR Equity Hedge Index (Long/Short Equity): Equity Hedge investing consists of a core holding of long equities hedged at all times with short sales of stocks and/or stock index options HFR Event-Driven: Investment Managers who maintain positions in companies currently or prospectively involved in corporate transactions of a wide variety including but not limited to mergers, restructurings, financial distress, tender offers, shareholder buybacks, debt exchanges, security issuance or other capital structure adjustments. HFR Macro Index (Global Macro): Macro involves investing by making leveraged bets on anticipated price movements of stock markets, interest rates, foreign exchange and physical commodities HFR Relative Value Index: Investment Managers who maintain positions in which the investment thesis is predicated on realization of a valuation discrepancy in the relationship between multiple securities. Managers employ a variety of fundamental and quantitative techniques to establish investment theses, and security types range broadly across equity, fixed income, derivative or other security types. Fixed income strategies are typically quantitatively driven to measure the existing relationship between instruments and, in some cases, identify attractive positions in which the risk adjusted spread between these instruments represents an attractive opportunity for the investment manager. RV position may be involved in corporate transactions also, but as opposed to ED exposures, the investment thesis is predicated on realization of a pricing discrepancy between related securities, as opposed to the outcome of the corporate transaction. HFR Emerging Market Index (Emerging Markets): Emerging Markets funds invest in the securities of companies or the sovereign debt of developing or 'emerging' countries. The constituents of the HFRI Emerging Markets Indices are selected according to their Regional Investment Focus only. There is no Investment Strategy criteria for inclusion in these indices. HFRI FOF Index: The Hedge Fund Research, Inc. (HFRI) Fund of Fund Composite Index is an equally weighted performance index that accounts for more than 800 hedge funds of funds listed in the HFR Database. Investments and services are offered through Morgan Stanley Smith Barney LLC, member SIPC.