Real Asset Diversifiers

The solid fundamentals and improved valuations for infrastructure securities can make them a beneficial addition for portfolios. We believe the well-capitalized nature of many public real estate investment trusts (REITs) makes them attractive investments.

John Wenker and Jay Rosenberg are co-lead managers of the top-10-selling First American Real Estate Securities Fund* and the pioneering First American Global Infrastructure Fund, the second publicly traded global infrastructure fund.

REAL ESTATE SECURITIES FUND
Current conditions
During the past two years, the REIT market has been driven by capital availability and balance sheet strength. We expect the returns of the sector in 2010 to be driven more by the fundamental prospects for individual stocks as balance sheet concerns have subsided.

Portfolio positioning
We attempt to minimize sector-specific risk among our REIT holdings by maintaining a well-diversified portfolio. We continue to invest on a relative-value basis within each sector, focusing on companies we believe have the best prospects for consistent, visible cash-flow growth. The opportunistic portion of the portfolio is currently focused on two themes: first, companies that have been using their low cost of capital to create external growth; and second, companies that we expect to experience meaningful internal growth because their fundamentals eroded substantially during the recession but currently show signs of improvement.

GLOBAL INFRASTRUCTURE FUND
While less cyclical overall than other investments, fundamentals of infrastructure companies have improved with the overall economic recovery. In addition, valuations look very attractive. Recent concerns about sovereign liquidity and solvency in several European countries and government-tightening policies in China have provided good entry points into many high-quality infrastructure companies.

Portfolio positioning
After a substantial sell-off due to sovereign debt issues, we have narrowed our underweight to Europe and slightly reduced our lower-risk assets in the United States while maintaining a significant overweight to Asia, excluding Japan. Positive secular themes continue to support the global infrastructure thesis, and we are currently finding more attractive valuations on a stock-by-stock basis. Our core strategy of focusing on companies that own or operate long-life assets and have visible cash flows, strong balance sheets, manageable amounts of leverage, and inelastic demand characteristics remains intact.

*Our real estate fund is among 10 top-selling funds in its Lipper category and has a 10-plus year track record
(Source: Strategic Insight, year-to-date new cash flows as of 5/31/2010).

— July 2010

Past performance does not guarantee future results

Investing in specific sectors such as infrastructure-related securities may involve greater risk and volatility than more diversified investments. Risks include greater exposure to adverse economic, regulatory, political, and other changes affecting such securities.

Foreign investing, especially in emerging markets, entails additional risks, including currency fluctuations, political and economic instability, accounting changes, and foreign taxation. Securities may be less liquid and more volatile.

Investing in specific sectors such as real estate may involve greater risk and volatility than more diversified investments. Risks include declines in real estate values along with changing economic conditions, property taxes, tax laws, and interest rates.

This information represents the opinion of FAF Advisors, Inc., and is not intended to be a forecast of future events, a guarantee of future results, or investment advice. It is not intended to provide specific advice or to be construed as an offering of securities or a recommendation to invest. The factual information has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Past performance does not guarantee future results.

Mutual fund investing involves risk; principal loss is possible.

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FAF Advisors, Inc. serves as investment advisor to First American Funds. First American Funds are distributed by Quasar Distributors, LLC, an affiliate of the investment advisor.

The First American funds referred to in this website may be offered only to persons in the United States. This website should not be considered a solicitation or offering of shares of the First American funds outside the United States.

¦ NOT FDIC INSURED ¦ NO BANK GUARANTEE ¦ MAY LOSE VALUE ¦