LEGAL
INFORMATION

INTERMEDIATION FEES

Intermediation fees report for the financial year 2021

This report has been published in compliance with article 314-82 of the General Regulations of l'Autorité des Marchés Financiers.

In the context of investment management mandates or managed UCIs, Lazard Frères Gestion outsources order execution to services providers. As the intermediation fees incurred by these services represented over €500,000, Lazard Frères Gestion is obliged to report on the conditions under which investment decision support and order execution services were used. Lazard Frères Gestion must also specify the breakdown between 1° intermediation fees relating to order reception and transmission services and order reception services, and 2° intermediation fees relating to investment decision support and order execution services.

Investment decision support and order execution services (IDSS)

For 2021, Lazard Frères Gestion used investment services providers with which a commission sharing agreement had been signed.

The objective of our policy targeting the best possible selection and control of IDSS providers is, when possible, to collaborate with the best services providers for each speciality (regional analysis, sector analysis, analysis by market cap, arbitrage, etc.).

With this in mind, we may use analysis provided by sell-side executing broker research departments, as well as analysis available from independent research bureaus.

The quality of services from IDSS providers shall be controlled and assessed by the committee which also analyses and controls broker execution services.

IDSS provider monitoring and any potential reallocation of resources between services providers is undertaken using the methodology described below.

Intermediation fees breakdown

Intermediation fees relate to transactions in equities, assimilated instruments and forward market instruments traded in the context of investment management mandates and managed UCIs. Lazard Frères Gestion is authorised to receive and transmit orders. Intermediation fees are therefore paid to remunerate services providers for investment decision support and order execution services. Global remuneration is split 62.5% for investment decision support and 37.5% for order execution.

Investment decision support and order execution service fees repaid to third-party services providers in the context of commission sharing agreements represented 4.62% of total intermediation fees paid in 2021.

Prevention of conflicts of interest

This report also covers measures implemented to prevent and resolve potential conflicts of interest in our choice of services providers.

Lazard Frères Gestion reviews its services provider selection bi-annually at Broker Committee meetings which are attended by the CIO, fund managers, dealers, compliance and the head of the middle-office. Selection draws on a transparent review process based chiefly on :

  - quality and availability of research,
  - quality of order execution and prices,
  - administrative processing,
  - commercial relationship (enabling meeting issuers).

Furthermore, Lazard Frères Gestion does not receive any soft commissions or intermediation fee retrocessions from its services providers.

For the financial year 2021, no conflicts of interests were detected within Lazard Frères Gestion.

Variable management fees: calculation modalities

In accordance with the European Securities and Markets Authority’s (ESMA) “guidelines on performance fees in UCITS and certain types of AIFs” (ESMA34-39) and with the recommendation 2021-01 from the AMF, Lazard Frères Gestion will modify its documents concerning the calculation modalities of variable management fees for its relevant UCIs. The objective of the ESMA’s guidelines is to promote increased convergence and normalization in the area of performance fees.

Reminder about the principle of performance fees:

If, on the crystallization date of the fund, the performance of the UCI (reinvested net dividends and excluding variable management fees) is superior to that of the benchmark index, performance fees are paid, even in the case of a negative performance of the fund.

New calculation modalities:

For each relevant UCI, the variable management fees will henceforth be calculated taking into account performance realized over the past five years of the fund’s existence, or since its creation if the UCI was launched less than five years ago. The periods of underperformance are thus deducted from the periods of outperformance in the calculation of variable fees.

To illustrate the way this mechanism functions, the ESMA published an example that Lazard Frères Gestion uses here for information purposes. The below chart shows the years of outperformance and of underperformance of a UCI with respect to its benchmark index (blue line). Only the years marked by a green dot are characterized by the payment of performance fees.

mentions legales perfs anglais
  Net performance vs. the benchmark index Underperformance to be compensated in the following year Payment of performance fees
Year 1 5% 0% Yes
Year 2 0% 0% No
Year 3 -5% -5% No
Year 4 3% -2% No
Year 5 2% 0% No
Year 6 5% 0% Yes
Year 7 5% 0% Yes
Year 8 -10% -10% No
Year 9 2% -8% No
Year 10 2% -6% No
Year 11 2% -4% No
Year 12 0% 0%* No
Year 13 2% 0% Yes
Year 14 -6% -6% No
Year 15 2% -4% No
Year 16 2% -2% No
Year 17 -4% -6% No
Year 18 0% -4%** No
Year 19 5% 0% Yes
  Year 1
Net performance vs. the benchmark index 5%
Underperformance to be compensated in the following year 0%
Payment of performance fees Yes
  Year 2
Net performance vs. the benchmark index 0%
Underperformance to be compensated in the following year 0%
Payment of performance fees No
  Year 3
Net performance vs. the benchmark index -5%
Underperformance to be compensated in the following year -5%
Payment of performance fees No
  Year 4
Net performance vs. the benchmark index 3%
Underperformance to be compensated in the following year -2%
Payment of performance fees No
  Year 5
Net performance vs. the benchmark index 2%
Underperformance to be compensated in the following year 0%
Payment of performance fees No
  Year 6
Net performance vs. the benchmark index 5%
Underperformance to be compensated in the following year 0%
Payment of performance fees Yes
  Year 7
Net performance vs. the benchmark index 5%
Underperformance to be compensated in the following year 0%
Payment of performance fees Yes
  Year 8
Net performance vs. the benchmark index -10%
Underperformance to be compensated in the following year -10%
Payment of performance fees No
  Year 9
Net performance vs. the benchmark index 2%
Underperformance to be compensated in the following year -8%
Payment of performance fees No
  Year 10
Net performance vs. the benchmark index 2%
Underperformance to be compensated in the following year -6%
Payment of performance fees No
  Year 11
Net performance vs. the benchmark index 2%
Underperformance to be compensated in the following year -4%
Payment of performance fees No
  Year 12
Net performance vs. the benchmark index 0%
Underperformance to be compensated in the following year 0%*
Payment of performance fees No
  Year 13
Net performance vs. the benchmark index 2%
Underperformance to be compensated in the following year 0%
Payment of performance fees Yes
  Year 14
Net performance vs. the benchmark index -6%
Underperformance to be compensated in the following year -6%
Payment of performance fees No
  Year 15
Net performance vs. the benchmark index 2%
Underperformance to be compensated in the following year -4%
Payment of performance fees No
  Year 16
Net performance vs. the benchmark index 2%
Underperformance to be compensated in the following year -2%
Payment of performance fees No
  Year 17
Net performance vs. the benchmark index -4%
Underperformance to be compensated in the following year -6%
Payment of performance fees No
  Year 18
Net performance vs. the benchmark index 0%
Underperformance to be compensated in the following year -4%**
Payment of performance fees No
  Year 19
Net performance vs. the benchmark index 5%
Underperformance to be compensated in the following year 0%
Payment of performance fees Yes

* The underperformance of Y12 to be taken forward to the following year (Y13) is 0% (and not -4%) in light of the fact that the residual underperformance coming from Y8 that was not yet compensated (-4%) is no longer relevant as the 5-year period has elapsed (the underperformance of Y8 is compensated until Y12).

** The underperformance of Y18 to be taken forward to the following year (Y19) is 4% (and not -6%) in light of the fact that the residual underperformance coming from Y14 that was not yet compensated (-2%) is no longer relevant as the 5-year period has elapsed (the underperformance of Y14 is compensated until Y18).

ORDER EXECUTION AND INTERMEDIARY SELECTION POLICY

DOWNLOAD THE ORDER EXECUTION AND INTERMEDIARY SELECTION POLICY.

DOWNLOAD THE ANNUAL REPORT ON THE EXECUTION OF ORDER.

APPLICATION OF THE DODD-FRANK ACT BY LAZARD FRERES GESTION

Lazard Frères Gestion SAS does not provide investment services, directly or indirectly, to any clients or investors qualified as “US persons” (as defined by Rule 902 of Regulation S under the 1933 United States Securities Act). Furthermore, Lazard Frères Gestion SAS shall not accept potential clients or investors who :

(i) acquire financial instruments on behalf of, or in the name of, a US person or
(ii) through an intermediary providing investment services on behalf of, or in the name of, a US person

CLAIMS PROCEDURE

LFG informs its clients that it is implementing a claims procedure. To ensure that claims are processed efficiently, they must be addressed in written to the Secrétariat Général at Lazard Frères Gestion, 25 rue de Courcelles, 75008 Paris.

Upon reception of a claim, Lazard Frères Gestion commits to process the claim within ten working days after reception of the claim. Barring a response within the aforementioned ten working days, Lazard Frères Gestion will commit to respond within a delay of two months as of reception of the claim, unless unexpected, justified circumstances arise. If the client deems that the claim is unsatisfactorily processed by Lazard Frères Gestion, then the former can request mediation with the Autorité de Marché Financier Ombudsman at the following address: Autorité des Marchés Financiers, Service Médiation – 17 Place de la Bourse, 75082 PARIS-CEDEX 02, or simply fill in an electronic form on the AMF’s internet site on http://www.amf-france.org (AMF Mediator section). This site also contains a mediation charter drafted by the AMF’s Ombudsman.

Information from Lazard Frères Banque

Lazard Frères Banque informs its clients that its banking mobility guide is available from its Services desk at 121, boulevard Haussmann, Paris 75008.

Voting policy

DOWNLOAD LAST EXERCISE REPORT OF THE VOTING RIGHTS.

Website intellectual property rights

This website and the information included within the site, such as brands, logos, charts and photography are protected by intellectual property laws. The data included may not be reproduced or transmitted to third parties, or used for commercial or non-commercial purposes, without prior written authorisation from Lazard Frères Gestion. Specific pages and/or sections of the site may be copied or printed out for your own personal use, provided that you do not delete the references to copyright or intellectual property rights.

The Lazard Frères Gestion name and associated logo are trademarks registered by the Lazard Group. Copying, deleting, reusing or modifying the name and associated logo shall be considered as a breach of copyright.

Confidence in the digital economy

Lazard Frères Gestion SAS is an authorised fund management company registered with l'Autorité des Marchés Financiers, the French market regulator, under number GP 04 000068.

  - Address/registered office: 25, rue de Courcelles 75008 Paris
  - RCS number: PARIS B 352 213 599
  - Capital: €14,487,500 
  - Intra-community VAT number: FR21352213599
  - Person responsible for publication: François-Marc Durand
  - Website host: Lazard Frères Gestion
 - Reference made to the simplified declaration of the CNIL, the French data protection authority, regarding data concerning clients: no client information is collated through the websites

Technical integrity and defects

The security and the integrity of communications via the internet cannot be guaranteed. Lazard Frères Gestion therefore declines all responsibility in the event of technical defects, particularly regarding difficulty of access to the website or the unavailability of the website.

FATCA, a new regulatory measure for non-US financial institutions

FATCA objectives and legal framework

The Foreign Account Tax Compliance Act (FATCA) is a US law which was ratified on 18 March 2010 with the objective of preventing US tax evasion. Under FATCA, an annual declaration of accounts held outside of the US by US taxpayers must be made to the US Internal Revenue Service (IRS).

US tax legislation obliges US taxpayers, wherever their country of residence, to make their own declaration.

The regulations concern “US Persons”, i.e. US nationals or US residents. Under the regulations, financial institutions are required to report on the identity of US nationals or US residents and their account balances, financial revenues and, in the future, products from the sale of securities.

The first annual IRS declaration was drafted for the year 2015 regarding 2014. This declaration shall also concern the accounts of corporations and trusts held by US taxpayers.

In France, the FATCA law has been transposed through the Inter-Governmental Agreement (IGA) signed on 14 November 2013 and submitted to parliament for ratification. The agreement aims to render the reporting of banking and tax information obligatory between France and the US.

The FATCA law concerning Lazard

From 1 July 2014, Lazard Frères Banque and Lazard Frères Gestion must comply with the FATCA law under their status as Participating Financial Institutions granted by the IRS.

In this context, Lazard Frères Banque and Lazard Frères Gestion apply identification obligations under the FATCA law.

Upon opening an account, Lazard collects information from individual and corporate clients to enable the identification of US Persons and request clients to confirm their status.

Information regarding existing Lazard clients is also analysed in order to identify elements which may determine a US Person status. Clients concerned shall be contacted in order to verify their status as defined by the FATCA law.

Clients may contact their usual correspondents for any further information.

Solvency II

In accordance with AMF Position 2004-07, Lazard Frères Gestion SAS informs holders of units and/or shareholders of its managed UCIs that it may have to report the composition of the UCI portfolios to certain professional investors requiring this information, in order to calculate regulatory requirements, under EC Directive 2009/138/ (known as Solvency II).

Remuneration policy

The fixed and variable remunerations paid by the management company to its staff, in proportion to the investment made in the management of Undertakings for Collective Investment, excluding management under mandate, can be obtained on request by mail from the legal department of the UCI of Lazard Frères Gestion.

The total amount of variable compensation is set by the Lazard Group based on various criteria, including the financial performance of the Lazard Group over the past year, taking results into account.

General Management decides on the total amount of the remuneration divided between fixed and variable remuneration, in compliance with the absolute separation between the fixed and variable components of the remuneration.

The total amount of variable compensation is determined taking all risks into account.

The amount of variable compensation is then individualized and determined in part on the basis of the performance of each Identified Person.

General Management supervises the determination of the individual amount of compensation, which is based in particular on an individual assessment sheet, which is used as a basis for the annual performance review.

The criteria for the annual individual performance review make it possible to measure the suitability of Identified person for the position they occupy, to take their skills into account, and to assess their reliability and autonomy.

This evaluation takes into account the achievement of objectives for the past year and allows future objectives to be set accordingly.

The compensation policy promotes rigorous and effective risk management in terms of sustainable development. Thus, the performance review of the identified person takes into account not only financial risks but also sustainability risks.

The compensation policy is reviewed every year and is fully compliant with the compensation policies and procedures put in place by Lazard Frères Gestion.
Every year, the committee responsible for monitoring the compliance of the compensation policy of Lazard Frères Gestion issues an opinion as to the proper application of the compensation policy and its compliance with applicable regulations. This committee includes two members who are independent of the management company.

Privacy Statement LFG

Please consult our policy.

DEFINITIONS AND METHODOLOGIES

DEFINITIONS

GLOBAL RISK INDICATORS

The ALPHA represents the added value of the manager after subtracting the market influence that the manager does not control. It is usually given as a percentage. For instance, the ICVT ETF return was 13.17% in 2017. The Bloomberg Barclays U.S. Aggregate Index had a return of 3.06% over the same period. Therefore, the alpha for ICVT ETF was 10.11% in comparison to the Bloomberg Barclays U.S. Aggregate Index.

The BETA measures the influence of a market (represented by a reference indicator) on the behavior of the product. The average variation of the net asset value of the product expresses the Beta, for a variation of 1% of the reference indicator. If the beta is 0.8, this means that a 1% change in the reference indicator induces a 0.8% variation in the product.

The CORRELATION COEFFICIENT defines the direction and degree of dependence between two variables. It necessarily varies between -1 and 1. A positive correlation between an indicator and the product means both vary in the same direction, while a negative coefficient implies the opposite. Close to zero, it means that the influence of the reference indicator on the product is low.

The RECOVERY TIME measures the time needed to recover the maximum loss. This is often determined in days or months. The recovery starts at the yield following the maximum loss.

ELIGIBLE FOR PEA: Fund eligible for the stock savings plan. This tax measure depends on the individual situation of each client.

FCP means "Fonds Commun de Placement". SICAV stands for "Société d'Investissement à Capital Variable".

GAIN FREQUENCY is the percentage of positive returns over a defined frequency.

OVERLAY MANAGEMENT is an approach based on the hedging of existing risks (equity, interest rate, currency, etc.) in a portfolio. A management style that harmonizes the investor’s separately managed accounts.

UCI stands for "Undertakings for Collective Investment". This category of financial products includes mutual funds (FCP) and open-end investment companies (SICAV). There are two categories of mutual funds, UCITS (Undertakings for Collective Investment in Transferable Securities) and AIFs (Alternative Investment Funds).

UCITS stands for "Undertakings for Collective Investment in Transferable Securities". This category of financial products includes FCP and SICAV funds.

The PERFORMANCE, often expressed as a percentage, allows to measure the capital gain or loss of an investment over a period (10% = gain of 10 for 100 invested). The performance can also be expressed on an annual basis. It is equivalent to reporting the performance of a fund over a one-year period. In both cases, a loss will be expressed as a negative percentage and a gain as a positive percentage

The VOLATILITY of a security is the difference between its performance and its average and therefore allows us to assess the regularity with which this performance has been obtained. It is a measure of risk. If it is zero, it means that the unit performances are identical. The higher it is, the more the unit performances are different from each other.

The MAX LOSS is the maximum loss over a series of periodic returns. For instance, over these 3 days: May 4: -1.8%; May 5: -0.9%; May 6: -1.3%, the maxi loss is -1.8%. The Max Drawdown is the percentage loss between the highest value and the lowest value observed on a period.

Global risk indicator Maxloss

DD recovery: It represents the time period to recover from the max drawdown.

Leverage Ratio: A leverage ratio is a financial measurement stating how much capital comes in the form of debt to meet its financial obligation. A leverage ratio of 3 means that for 100$ invested, one borrows 200$ to invest 300$ on the whole. This allows for potentially more gains but increases the risk leading to possible bigger loss too.

The R2 or DETERMINATION COEFFICIENT measures the proportion of the product's fluctuations explained by fluctuations in the benchmark. Mathematically, it is the square of the correlation coefficient. It varies between 0 and 1. The more close to 1 the better the product’s fluctuations are close to the benchmarks.

The SHARPE RATIO is the product's outperformance compared to a risk-free rate (in this case STR), adjusted by the product's volatility. It adjusts a portfolio’s past performance—or expected future performance—for the excess risk that was taken by the investor.

The INFORMATION RATIO represents the relative performance generated by the manager for each point of volatility allowed compared to its benchmark. It reflects to what extent the additional risk taken by the manager compared to his market indicator is profitable or not.

The RETURN = this ratio is equal to the ratio of the dividend per share to the share price. The returns are gross before deduction of taxes and they take into account tax credits, if any. For example, for French and German companies, tax credits are included. In Singapore and Malaysia, corporate returns are based on net dividends after tax. For a fund, the yield is the weighted average of the yields of all the stock lines in the portfolio that have paid a dividend. This ratio is expressed in percentage per year.

The SCR (Solvency Capital Requirement) corresponds to the total amount of funds that insurance and reinsurance companies in the EU are required to hold. It is computed by applying 5 different economic chocks with regards to 5 different market risks.

  • Equity: This module aims to quantify the impact of falling or rising markets. It applies a hypothetical chock of a certain percentage increase/decrease of the equity market, which is then multiply by the company exposure to equity.
  • Interest Rates: This module aims to quantify the maximum loss generated by an increase or decrease in the yield curve on the value of the balance sheet. There is a preexisting table to make correspond maturities with shifts in the yield curve.
  • Credit (spread): This module aims to quantify the impact of changing credit ratings.
  • Concentration: This risks aims to capture a significant loss linked to the default of an issuer to which the exposure would be high.
  • Currency: Risk of change arises from changes in the level or volatility in currency exchanges rates.

Once the different SCR are computed, the final SCR corresponds to a weighted sum of the specific SCRs. The weights being the correlation between the risks factors.

The TRACKING ERROR represents the volatility of the relative performance of the product compared to its benchmark. It is expressed as the difference between the relative performances and their average and thus allows appreciating the regularity of the performances relative to their index. The smaller the tracking error, the closer the product's performance and risk-taking are close to those of the benchmark.

Value at Risk (VaR): It is a standard measure of a portfolio possible future loss at a given time horizon with a given probability of that loss happening. For instance a VaR of 100 at a level of 99% at horizon 10 days means that there is a 99% chance that the portfolio losses will not exceed 100 within the next 10 days.

Expected Shortfall (cVaR): Building on the VaR, the expected shortfall at level q% measures the expected loss that a portfolio should encounter knowing that the calculus only accounts for a the q% worst returns. An ES of 10 at horizon 1à days at level 5% means that the portfolio has a 5% probability of losing 10.

EQUITY INDICATORS

P/CF = Price to Cash Flow. This is the ratio of the share price to the cash flow per share (operating cash flow per share). For the fund, the result is the weighted average of the PCFs on the securities held in the portfolios. The P/CF ratio measures how much cash a company generates relative to its stock price, rather than what it records in earnings relative to its stock price, as measured by the price-earnings (P/E) ratio

PE = Price Earning. This ratio is equal to the ratio of the share price to the earnings per share. It is also called the earnings multiple. For the fund, the result is the weighted average of the PEs on the securities held in the portfolios.

PEG stands for Price Earnings Growth. It is computed by dividing the PE by the average growth rate of expected earnings over future years. The PEG ratio is used to determine a stock's value while also factoring in the company's expected earnings growth, and it is thought to provide a more complete picture than the more standard P/E ratio.

Price to Book Value (PBV). This ratio is equal to the ratio of the share price to the equity. For the fund, the result is the weighted average of the PBV on the securities held in the portfolio.

VAR EPS = Variation in Earning Per Share. For the fund, the result is the weighted average of the VAR EPS on the securities held in the portfolio.

FIXED INCOME INDICATORS (INCLUDING CONVERTIBLE BONDS)

HIGH YIELD (HY) is a term used to define speculative bond issues with financial ratings strictly below BBB- on the Standard & Poor's scale. The remuneration of these issues is high, but so is the risk of default.

MATURITY AT NEXT CALL is the date of the next redemption of the bond. The issuer of the bond may define a clause that allows a portion of the principal to be redeemed before final maturity at a specified price. In general, these clauses provide for initial and final periods during which redemption is not possible. These bonds are named "Callable".

SPREAD: The actuarial margin or spread of a bond (or loan) is the difference between the actuarial rate of return of the bond and that of a risk-free loan of the same duration. The spread is naturally lower the better the issuer's creditworthiness is perceived to be.

SPREAD DURATION is an estimate of the change in a bond's price for every 100 basis points of change in its spread-adjusted option. This measure is often used to quantify the sensitivity of a portfolio to spread changes.

ACTUARIAL RATE: By convention, an actuarial rate is a rate for an investment with a term of one year and for which interest is received or paid after one year. Since there are many different rates and ways of paying interest, it is difficult to compare them directly. Therefore, they are transformed on a common basis the actuarial rate, to make them directly comparable.

The CONVERTIBLE BOND’S DELTA: The delta of a convertible bond issue measures the sensitivity of the convertible bond price to a change the underlying stock price [(share price * conversion ratio)/nominal]. Its value is always between 0 and 100. A delta of 50 implies that when the underlying stock has a 1% change, the convertible bond price changes by 0.5%.

SENSITIVITY: The sensitivity of a bond measures the percentage change in its value induced by a given change in the interest rate. Mathematically, it is equal to the absolute value of the derivative of the bond's value with respect to the interest rate, divided by the value of the bond. It is expressed as a percentage.

THE CONVERTIBLE BOND’S SHARE SENSITIVITY: The share sensitivity of a convertible issue measures the sensitivity of the value of the bond convertible bond for a 1% fluctuation in the value of the share (underlying). Its value is always between 0 and 100%. The closer the equity sensitivity is to 100%, the more the convertible bond price fluctuates towards the share price and vice versa. It is considered that for an equity sensitivity of between 80 and 100, the convertible bond behaves like an equity; between 20 and 80, the convertible bond is said to be mixed and is influenced by the share price and by interest rates; between 0 and 20 the convertible bond behaves like a bond.

SUBORDINATED DEBTS are issues for which the lenders agree to be disadvantaged compared to other senior creditors in the event of default by the borrower. The most common types of subordinated debt are those where the contract between the lender and the borrower defines the terms of repayment only after all other senior creditors have been repaid. Junior subordinated debt will have additional constraints and will be considered junior to subordinated debt. In return for these constraints, which have an unfavorable impact on the lenders' risk, the latter will expect a higher remuneration and other benefits defined in the terms of the issue.

DURATION: The duration of a bond is the period after which its profitability is not affected by interest rate changes. In other words, changes of interest rates will affect a bond’s value before the duration horizon. The duration appears as the average discounted life of all flows (interest and capital) expressed in years. For example, if a bond has a duration of five years and interest rates increase by 1%, the bond's price will decline by approximately 5%.

METHODOLOGIES

STATISTICAL COMPUTATIONS:

Statistical calculations are based on monthly returns for periods of more than 2 years and for products whose valuation frequency is monthly, and on weekly returns for periods of less than 2 years. For relative statistics, the reference indicator in the prospectus is used. The STR will be used for statistics referring to the risk-free rate.

CALCULATION OF THE ELEMENTARY RETURNS OF A SERIES:

Returns are computed on a monthly or weekly basis and are not normalized.

Monthly Yield in percentage: Calculation Elementary Returns where mV is the Month-end value and mV-1 the Previous month-end value.

COUPON PROCESSING:

All performance or return results include coupons that may have been detached during the life of the fund in the calculation period. These coupons are integrated in the calculation of the performance on the detachment date.

Perf. Cps integrated = Coupon Processing where Perf% is the performance in percentage between two dates, NdC the Value of the net detached coupon and NAV ex cp the 1st Net Asset Value after detachment of the coupon.

Therefore, the unit of a fund that capitalizes (C) will have identical performances to the unit that distributes (D), whatever the calculation periods concerned. The recapitalization of the coupons of the unit (D) on the detachment date during the performance and statistical computations explain this equality.

FINANCIAL DATA:

The above financial ratios are computed based on decomposed portfolios for funds of funds and based on direct lines for other funds. The Thomson source: IBES consensus is taken into account for these calculations. For the Japan and India zone, the financial data for year N are computed on the basis of the fiscal year from March N to March N+1 (e.g. PE2009 = March 2009 to March 2010): PE2009 = December 2009 to December 2010)

BEAMA RISK:

The BEAMA risk classification relies on an annualized standard deviation computed on a series of monthly returns obtained over the last five years or over a shorter period if the product has been in existence for less than five years. For products less than one year old, the calculation of the annualized standard deviation will be based on the monthly returns of the last five years of the representative investment benchmark as announced in the full and simplified prospectus. There are seven risk classes:

Class 1 2 3 4 5 6 7
Standard Deviation [0%; 2,5%] [2,5%; 5%] [5%; 10%] [10%; 15%] [15%; 20%] [20%; 30%] [30%; 100%]

The asset class may change over time. It must be adapted when, during two consecutive semester periods, the risk class of a product is different from the one initially attributed. For more information, we invite you to read the latest update of the Belgian circular.

PARIS

25, rue de Courcelles
75 008 Paris
+33 (0)1 44 13 01 11

BORDEAUX

8, rue du Château Trompette
33 000 Bordeaux
+33 (0)5 56 44 30 00

LYON

29 place Bellecour
69 002 Lyon
+33 (0)4 72 69 95 80

NANTES

4, rue Racine
44 000 Nantes
+33 (0)2 28 08 28 78

BRUXELLES

Blue Tower
Avenue Louise, 326
1050 Bruxelles
+32 (0)2 627 08 80

LUXEMBOURG

39, Boulevard Royal,
L-2449 Luxembourg
+352 273 00 810