Prospectus. ABN AMRO Total Return Global Equities

Transcription

1 Prospectus ABN AMRO Total Return Global Equities

2 General characteristics Form of the UCITS UCITS COVERED BY EUROPEAN DIRECTIVE 2009/65/EC NAME ABN AMRO Total Return Global Equities LEGAL FORM OF THE UCI Fonds Commun de Placement ( FCP ), French collective investment fund (hereinafter the Fund ). DATE OF CREATION AND ENVISAGED DURATION This UCITS was created on 17 November 2003 (date of deposit of funds and creation of C units) for a duration of 99 years. F Units were created on 4 January I Units were created on 17 January SUMMARY OF THE MANAGEMENT OFFERING Units ISIN code Allocation of distributable amounts Currency of denomination Subscribers concerned Decimalisation Minimum Initial subscription Initial net asset value C units FR Net income: Accumulation Realised capital gains: Accumulation F units FR Net income: Accumulation Realised capital gains: Accumulation I units FR Net income: Accumulation Realised capital gains: Accumulation * the NAV per share was divided by 2 on 12 July Euros All subscribers Yes, in tenthousandths of units Euros Euros Reserved to management under mandate and Neuflize OBC Group entities. Intended exclusively for legal persons, institutional investors, and notably UCITS Yes, in tenthousandths of units Yes, in tenthousandths of units 1 unit 1,000* unit 1 unit 100 PLACE WHERE THE LATEST ANNUAL REPORTS AND THE COMPOSITION OF THE ASSETS CAN BE OBTAINED Unit-holders can obtain the latest annual reports and the composition of the assets within eight business days by writing to ABN AMRO Investment Solutions 3, Avenue Hoche, Paris Cedex 08 2

3 Parties MANAGEMENT COMPANY ABN AMRO Investment Solutions 3, Avenue Hoche, Paris Cedex 08 Approved by the Autorité des Marchés Financiers (the French securities supervisor, hereinafter AMF ) on 20 September 1999 under number GP CUSTODIAN AND LIABILITIES MANAGER CACEIS BANK, S.A. Registered office: 1-3 Place Valhubert, Paris Main activity: Bank and investment services provider approved by the CECEI [the former banking and investment supervisor, now merged into the Prudential Control Authority] on 1 April ESTABLISHMENT IN CHARGE OF CENTRALISING SUBSCRIPTION AND REDEMPTION ORDERS AS DELEGATED BY THE MANAGEMENT COMPANY CACEIS BANK, S.A. Registered office: 1-3 Place Valhubert, Paris Main activity: Bank and investment services provider approved by the CECEI [the former banking and investment supervisor, now merged into the Prudential Control Authority] on 1 April OTHER ESTABLISHMENT FOR RECEIVING SUBSCRIPTION AND REDEMPTION ORDERS CREDIT AGRICOLE TITRES, Société en Nom Collectif 4, Avenue d Alsace, Mer Main activity: Bank and investment services provider approved by the CECEI STATUTORY AUDITOR MAZARS Tour Exaltis 61, Rue Henri Regnault, La Défense Represented by Gilles Dunand-Roux MARKETING AGENT(S) BANQUE NEUFLIZE OBC ABN AMRO Investment Solutions (manager) PLACING INSTITUTIONS ADVISERS None AGENT ABN AMRO Investment Solutions has delegated the administrative and accounting management to CACEIS FUND ADMINISTRATION 1-3, Place Valhubert, Paris Policy for managing conflicts of interest The management company has effective organisational and administrative procedures to identify, manage and monitor conflicts of interest. It also has a procedure for selecting and monitoring its agents and a policy of contractual agreements with them to prevent any potential conflicts of interest. The procedure for dealing with conflicts of interest is available at 3

4 Operation and management methods General characteristics CHARACTERISTICS OF THE UNIT(S) ISIN codes: C units: FR F units: FR I units: FR Nature of the rights attaching to the units Each unit-holder has a right of joint ownership of the Fund's net assets in proportion to the number of units held. Voting rights Fund units do not carry any voting rights. Decisions concerning the Fund are taken by the management company in accordance with the Regulations. Liability accounting This is entrusted to the custodian, CACEIS BANK. Type of shares Bearer units The Fund s units will be issued through Euroclear. Decimalisation - C units are expressed in ten-thousandths of units. - F units are expressed in thousandths of units. - I units are expressed in ten-thousandths of units. Closing dates The last day of trading in September on the Paris Stock Exchange (first closing date September 2004). TAXATION Depending on your tax regime, any capital gains and income resulting from the ownership of units in the Fund may be subject to tax. We advise you to obtain further information on this matter from the Fund s promoter. a) For the Fund: - The UCI is not subject to corporate income tax. - The Fund s income is not taxable, and nor are capital gains provided that no natural person acting directly or through an intermediary holds more than 10% of the Fund s units. b) For unit-holders: - The tax regime applicable to amounts distributed by the UCI or to realised or unrealised capital gains or losses depends on the tax provisions applicable to the investor s particular circumstances. Any investor who is unsure of his/her tax situation should consult a tax advisor or other person qualified to give advice in this area. - For income and capital gains of unit-holders resident abroad, the applicable tax legislation is that of the country of residence. 4

5 Special provisions CLASSIFICATION Diversified UCITS INVESTMENT OBJECTIVE The Fund s objective is to offer a performance in excess of its composite benchmark (50% MSCI Daily Net TR World Euro + 25% BofA Merrill Lynch 1-10 Year Euro Government + 25% EONIA capitalised) over the recommended investment period. These indices are calculated with dividends and coupons reinvested. BENCHMARK The Fund s benchmark is the composite index 50% MSCI Daily Net TR World Euro (Bloomberg code MSDEWIN Index) + 25% BofA Merrill Lynch 1-10 Year Euro Government (Bloomberg code EG05 Index) + 25% EONIA capitalised (Bloomberg code EONCAPL7 Index). These indices are calculated with dividends and coupons reinvested. The Bloomberg codes are: MSCI Daily Net TR World Euro: MSDEWIN Index 25% BofA Merrill Lynch 1-10 Year Euro Government: EG05 Index 25% EONIA capitalised: DBDCONIA Index. The Fund s performance is not linked to that of its benchmark, which is used as a means of retrospectively assessing the Fund s performance. INVESTMENT STRATEGY 1. Strategies used In accordance with its objective, the Fund is managed on a discretionary basis, while investing in international equity and bond markets and money market instruments. There are no sector, geographical (including emerging markets) or currency constraints on the choice of investments. Depending on its expectations as regards market risks and opportunities and its convictions, the manager selects several asset classes, geographical regions, sectors or management styles and determines the weighting it wishes to assign to each. The distribution among the various asset classes is based on a fundamental analysis of the macroeconomic and financial environment. It may vary with the manager s expectations, and it may differ widely from that of its benchmark. The fund s portfolio is managed in a responsive and flexible manner. Accordingly its exposure to the various asset classes may vary between 0 and 100% of its net assets. There are no sector or geographical constraints on allocation. 2. Assets (excluding derivatives)) Equities (0 to 100% of net assets) The Fund s equity portfolio consists of international equities of all market capitalisations including small- and mid-cap and without constraints as to sectors or geographical regions (including emerging markets up to 100% of assets). The Fund may also invest in Deposit Receipts (ADRs, GDRs, etc.) An American Depositary Receipt (ADR) is issued by a US bank and represents ownership of a share in a non-us company. A Global Deposit Receipt (GDR) is a bank certificate issued in a number of countries for shares of foreign companies. Shares are held by a foreign branch of an international bank. The shares are traded as domestic shares but are sold worldwide through a number of bank branches. 5

6 Debt securities and money and bond market instruments (investment of 0 to 100 % of net assets) The debt securities portfolio is composed of bonds issued by international private or public sector entities (including those of emerging markets) rated Investment Grade at the time of purchase, which are authorised up to 100% of the net assets, including convertible bonds. In the event that the underlying should be downgraded to below Investment Grade, the decision to sell will not be automatic, but will depend on liquidity criteria and other criteria linked to the strategy using the underlying. The decision to sell or retain the underlying will be based above all on the analysis performed by an internal ad hoc Committee, not automatically on agencies ratings. Unrated or Non-Investment Grade (speculative) bonds are authorised up to 10% of net assets. The money market/ fixed income portfolio is managed on a discretionary basis in terms of ratings and public/private debt allocation. The Fund may invest in negotiable debt securities and euro commercial paper at less than 12 months as well as in bonds. This allocation will be discretionary as regards ratings (minimum A-2 Standard & Poor s and equivalent of other rating agencies) and distribution between private and public sector debt. The Management Company will not automatically rely on agency ratings, but will give priority to its own analysis carried out by the internal ad hoc Committee for evaluating the quality of its assets. Holdings of units or shares in tracker funds (up to 10% of net assets) - French or foreign money market or bond tracker funds. - French or foreign equity or diversified tracker funds. - Possibility of investing in UCIs belonging to the ABN AMRO Group. 3. Derivatives Futures and options: Futures and options on equity and fixed income indices: Derivative instruments may be used to make adjustments to the portfolio in the event of significant movements in subscriptions/redemptions, and to hedge and/or expose the portfolio. Total commitments in respect of derivative instruments on equities and fixed income securities are limited to 10% of net assets. Foreign exchange market: The Fund may operate on the over-the-counter or regulated foreign exchange market (swaps, options, futures and forward exchange contracts) with a view to achieving the management objective. Exchange risk will be managed subject to a maximum limit on commitments equal to 100% of the Fund s net assets. The total commitment on derivatives may not exceed the net asset value. 4. Embedded derivatives (warrants, EMTN, subscription warrants, etc.) The Fund may make use of convertible bond in connection with the Fund s equity risk exposure or hedging. Investment in convertible bonds is permitted up to 100% of net assets. 5. Deposits Amounts held in escrow in term accounts (deposits) will remain below 10% of net assets, and will be used to manage the cash flow of the UCITS. 6. Cash borrowings The Fund may be overdrawn due to transactions linked to its flows (investments and divestments in progress, subscription/redemption transactions, etc.) up to a limit of 10% of its net assets. The use of cash borrowings may take the Fund's commitment up to 110% of its net assets. 7. Repurchase transactions None. 6

7 8. Contracts constituting financial guarantees In the context of carrying out transactions in over-the-counter derivative financial instruments, the Fund may receive financial assets considered as guarantees and designed to reduce its exposure to counterparty risk. Financial guarantees received basically consist of cash for over-the-counter transactions with derivative financial instruments The counterparty risk in over-the-counter derivative instrument transactions may not exceed 10% of the UCITS net assets if the counterparty is a credit institution as defined by the regulations in force, or 5% of its assets in other cases. In this respect, any financial guarantee received or serving to reduce exposure to counterparty risk must satisfy the following criteria: - it must be given in the form of cash or in the form of euro zone government bonds with a minimum rating of BBB or deemed equivalent by the management company; - it must be held by the UCITS' Custodian or by one of its agents or a third party under its supervision, or by an external custodian subject to prudential supervision and not linked to the provider of the financial guarantee; - it must at all times meet the criteria in terms of liquidity, valuation, issuer s creditworthiness, correlation and diversification in accordance with the regulations in force, with a maximum exposure to any given issuer of 20% of the UCITs' net assets. - Financial guarantees in cash will mostly be placed on deposit with eligible entities and/or used for purposes of reverse repo transactions, and to a lesser extent in bonds and money market UCITS. RISK PROFILE Your money will be invested primarily in financial instruments selected by the Management Company. These instruments will be subject to market fluctuations. The portfolio and its performance are exposed to the following risks: Key risks Risk of capital loss The Fund offers no capital guarantee or protection. It may be therefore that investors will not recover the full amount of their initial capital invested. However the risk of loss is limited to the amount of the initial investment. Interest rate risk This is the risk of a fall in valuation of fixed income instruments deriving from changes in interest rates. This risk is measured by sensitivity. It may have a negative impact on the Fund s net asset value. Credit risk This is the risk of a fall in the valuation of fixed income instruments deriving from a deterioration in the issuer s creditworthiness or an increase in the risk of its defaulting (i.e. the risk that the issuer will not be able to meet its financial obligations). It may have a negative impact on the Fund s net asset value. Equity risk The Fund may be exposed to equity markets. Changes in share prices may entail a significant fall in the net asset value of the Fund. Risk associated with holding convertible bonds: The value of convertible bonds depends on several factors: the level of interest rates, movements in underlying share prices and movements in the price of the derivative embedded in the convertible bond. These different factors may lead to a decline in the net asset value of the UCITS. Liquidity risk In the event of a decline in liquidity in the markets on which it operates, the Fund might be unable to buy or sell the securities concerned at the time it wishes to do so and at the right price. This market disruption may have a negative impact on the value of the securities in portfolio and the net asset value of the Fund. Currency risk This is the risk of a fall in the investment currencies relative to the reference currency of the portfolio. Depending on the direction of the Fund s transactions, a fall in the value of a currency relative to the reference currency (in the case of a purchase) or a rise in its value (in the case of a sale) may lead to a decline in the net asset value of the Fund. Emerging market risk Investments in emerging markets are high-risk relative to developed markets; in addition to the higher investment risk, such investments are also subject to operational, regulatory and geopolitical risks. Consequently, holding securities or financial contracts traded in emerging markets may have a negative impact on the net asset value of the Fund. 7

8 Risk associated with discretionary management The discretionary nature of management derives from the manager s active plays, linked mainly to how it expects financial markets to evolve. In the event of adverse market trends or less-than-ideal stock-picking, there is a risk that the Fund will not achieve its management objective. Secondary risks: Risk associated with the use of high-yield (speculative), Unrated or Non-Investment Grade securities High-yield (speculative) securities are issued by entities with higher probabilities of default than those of securities rated Investment Grade. Set against this, they offer a higher level of remuneration, but can see their value heavily affected in the event of deterioration. These securities may therefore lead to a significant fall in the net asset value of the Fund. SUBSCRIBERS CONCERNED AND TYPICAL INVESTOR PROFILE The Fund units are open to the subscribers referred to in the management offer, with the exception of Non-Eligible Persons. In parallel with this, certain Non-Eligible Intermediaries may not be entered in the Fund register or in the register of the transfer agent. Non-Eligible Persons are: - U.S. Persons within the meaning of Regulation S of the SEC (Part CFR ): the Fund is not and will not be registered under the US Investment Company Act of The resale or transfer of units to the United States of America or to a US Person within the meaning of Regulation S of the SEC (Part CFR ) may constitute a violation of US law and requires the prior written consent of the management company s Board of Directors. The units have not been approved or disapproved by the SEC, any specialised State commission or other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of these offering materials. Any representation to the contrary is unlawful. The definition of US Person(s) as defined in SEC Regulation S (Part CFR ) is available at the following address: - a US PERSON within the meaning of the Foreign Account Tax Compliance Act (FATCA) defined by the intergovernmental agreement signed between France and the United States on 14 November The FATCA definition of "U.S. Person(s) is available at the following address: Non-Eligible Intermediaries are: - Financial Institutions that are not participating financial institutions within the meaning of FATCA; - and Passive Non-Financial Foreign Entities within the meaning of FATCA. The definitions of these concepts can be found at the following address: Persons wishing to acquire or subscribe Fund units will, if applicable, have to certify in writing that they are not US Persons under the aforementioned Regulation S of the SEC and/or FATCA. The UCI's FATCA status, as defined by the intergovernmental agreement signed on 14 November 2013 between France and the United States: French non-reporting financial institution deemed compliant (Annex II, II, B to the IGA Any unit-holder becoming a Non-Eligible Person is required to notify the Board of Directors of the management company immediately. Unit-holders who become Non-Eligible Persons will no longer be authorised to acquire new units. The Board of Directors of the management company reserves the right to forcibly redeem any units which are owned, directly or indirectly, by a Non-Eligible Person, either through the intermediation of a Non-Eligible Intermediary or if the holding of the units by any person is unlawful or detrimental to the interests of the Fund. - The ABN AMRO Total Return Global Equities UCITS is intended for investors seeking diversification in the face of volatile markets. - Investment diversification: diversifying the portfolio across different asset classes (money market, bonds and units), specific business sectors and different geographical regions allows for both a better spread of the risks and optimum portfolio management, taking into account market performance. Unit-holders are therefore encouraged to examine their particular situation with their usual financial advisor. - The recommended minimum investment period is more than 5 years. 8

9 METHOD OF DETERMINATION AND ALLOCATION OF DISTRIBUTABLE INCOME - Allocation of net income: accumulation - Allocation of net realised capital gains: accumulation FREQUENCY OF DISTRIBUTION None CHARACTERISTICS OF THE UNITS OR SHARES - For C units, subscriptions and redemptions are carried out in ten-thousandths of units. - For F units, subscriptions and redemptions are carried out in thousandths of units. - For I units, subscriptions and redemptions are carried out in ten-thousandths of units. - The units are denominated in euros. METHODS OF SUBSCRIPTION AND REDEMPTION - Frequency of NAV calculations: The net asset value is established each trading day on the Paris Stock Exchange (D). with the exception of official French holidays and/or days on which the Paris Stock Exchange is closed (Euronext calendar) at the closing prices of day D and calculated on D Requests for subscriptions and redemptions may be sent at any time to BANQUE NEUFLIZE OBC, CA Titres and CACEIS BANK. Subscriptions and redemptions are centralised on every valuation day until 5.30 p.m. at CACEIS BANK and executed on the basis of the net asset value of the following day. Unit-holders attention is drawn to the fact that orders sent to marketing agents other than the above-mentioned institutions are subject to the cut-off time for centralisation of orders which is applied to them by CACEIS BANK. Consequently, these marketing agents may apply their own cut-off times, earlier than that referred to above, in order to take account of the time needed for them to transmit orders to CACEIS BANK. - Possibility of subscribing or redeeming ten-thousandths of C units - Possibility of subscribing or redeeming thousandths of F units - Possibility of subscribing or redeeming ten-thousandths of I units - The minimum initial subscription is one unit, for all classes of units. COMPLEMENTARY INFORMATION The place of publication of the net asset value is the offices of the management company. The Fund Prospectus and the latest annual reports as well as the composition of the assets may be obtained within eight business days by writing to: ABN AMRO INVESTMENT SOLUTIONS 3, avenue Hoche, Paris FEES AND COMMISSIONS Subscription and redemption fees Subscription fees are added to the subscription amount paid by the investor, while redemption fees are deducted from the redemption value. Fees accruing to the Fund are used to offset the costs incurred by it to invest in or dispose of assets. Fees not accruing to the Fund revert to the management company, marketing agent, etc. 9

10 FEES PAYABLE BY THE INVESTOR ON SUBSCRIPTIONS AND REDEMPTION* Subscription fee not accruing to the UCI BASE NAV number of units RATE SCALE C, F and I units: 2.5% maximum rate Subscription fee accruing to the UCI NAV number of units None Subscription fee not accruing to the UCI NAV number of units C, F and I units: 2.5% none Subscription fee accruing to the UCI NAV number of units None *Exemption: - Where subscriptions and redemptions are for the same number of units, carried out on the same day and based on the same NAV, no fee will apply. - Cases of conversion from one category to another. Management fees Fees invoiced to the UCITS cover: - financial management fees; - administrative expenses external to the management company; - maximum indirect charges (commissions and management fees) in the case of UCITS investing more than 20% in other UCITS, AIFs or foreign investment funds; - movement commissions; - performance fees. For further information about the charges actually invoiced to the UCITS, please refer to the Key Investor Information Document. FEES INVOICED TO THE UCITS Financial management fees and administrative expenses external to the management company; Maximum indirect fees (management fees and commissions) Turnover fees: - Management Company BASE Net assets Net assets Charge on each transaction RATE SCALE C units: 2% (incl. tax), F units: 1.10% (incl. tax) I units: 1% (incl. tax) Maximum rate None - None - Custodian Performance fee - C and F units - I units Net assets 20% incl. tax of the positive difference between the performance of the UCITS and that of the composite benchmark (50% MSCI Daily Net TR World Euro + 25% BofA Merrill Lynch 1-10 Year Euro Government + 25% EONIA capitalised) None 10

11 The formula for calculating the management fees is applicable with effect from 3 October 2016 The composite benchmark is composed of: 50% MSCI Daily Net TR World Euro + 25% BofA Merrill Lynch 1-10 Year Euro Government + 25% EONIA capitalised; the reference period is the financial year of the UCITS (level of the benchmark on the closing day of the previous financial year and of the financial year in question). The performance fee is based on a comparison of the performance of the UCITS and that of its composite benchmark (50% MSCI Daily Net TR World Euro + 25% BofA Merrill Lynch 1-10 Year Euro Government + 25% EONIA capitalised) A performance fee equal to 20% of the positive difference between the Fund s performance net of fixed management fees and that of its benchmark for the financial year is provisioned on each NAV if the following conditions are met: - the Fund s performance net of fixed management fees exceeds the performance of the composite benchmark; - the Fund s performance net of fixed management fees is positive. Upon redemption, the portion of the provision for variable management fees corresponding to the number of units redeemed accrues definitively to the management company. The performance fee will be charged only if at the close of the financial year the Fund s performance over that year is both positive and better than that of its benchmark. These fees (fixed fees and any variable amounts) will be charged directly to the Fund's income statement. A portion of the management fees may possibly be rebated to a third-party distributor by way of remuneration for marketing the UCITS. The rebates referred to in the distribution agreements and the management reports, and the report on intermediation fees are available on the AAIS website, in accordance with Article of the AMF s General Regulations regarding the application of shared fees. Any securities lending or borrowing transactions will be performed on market conditions and any income will accrue in full to the UCITS. 11

12 Commercial information The Fund is distributed by: - The commercial networks of the management company ABN AMRO Investment Solutions and of Banque Neuflize OBC. - Placement agents with which a marketing agreement has been signed. Subscription/redemption requests are centralised by: CACEIS BANK, S.A. Registered office: 1-3, Place Valhubert, Paris Main activity: Bank and investment services provider approved by the CECEI on 9 May Any requests for information and/or complaints relating to the Fund may be sent to: - the marketing agent, or - the management company for matters relating to management; - the Complaints Department of Banque NOBC: 3 Avenue Hoche Paris, or to the following address: reclamations.clients@fr.abnamro.com; - And as a last resort you can contact the AMF ombudsman free of charge; the contact details are on our website: (Informations réglementaires) The management company may disclose the composition of the Fund s portfolio to its investors within a period not less than 48 hours after publication of the net asset value, for the sole purpose of calculating the regulatory requirements under Directive 2009/138/EC (Solvency II). Investors wishing to receive this sensitive information must first have implemented procedures for managing it so as to ensure that it is used only to calculate prudential requirements. Information about the Fund can be obtained: - from the offices of the management company: ABN AMRO INVESTMENT SOLUTIONS 3, Avenue Hoche, Paris. - from the website: The information referred to by the Grenelle 2 law (criteria relating to ESG criteria) is available: - from the website: - in the Fund s latest Annual Report. INVESTMENT RULES Investment rules The regulatory ratios applicable to the Fund are those referred to in Articles R214-2 et seq. of the French Monetary and Financial Code. Monitoring of overall risk Overall risk is monitored using the commitment method. 12

13 Asset valuation and accounting rules ABN AMRO Total Return Global Equities has adopted the French Accounting Regulatory Committee Regulation of 14 January 2014 with regard to the accounting chart for open-ended collective investment schemes. VALUATION METHODS AND PRACTICAL ASPECTS Unless otherwise specified, all instruments are valued on the basis of the NAV date. Equities and analogous securities Equities and analogous securities traded on a regulated market are valued at closing prices. Equities and analogous securities not traded on a regulated market are valued on the basis of the prices available from contributors, or failing that on the basis of a modelisation carried out by the Management Company. Shares and units of UCIs or investment funds: Shares or units of UCIs or investment funds are valued at the last known net asset value (estimated or official). ETFs/Trackers ETFs/Trackers are valued at closing prices. Debt securities and money market instruments Bonds and analogous securities, except for convertible bonds, are valued at the last closing price (bid) received from contributors. Convertible bonds are valued at the last closing price (mid) received from contributors. Negotiable debt securities are valued in accordance with the following methods: Negotiable debt securities with an issue period of more than three months and with a residual duration of three months or more are valued at the last known price received from contributors. Negotiable debt securities with an issue period of more than three months but a residual maturity of less than three months are valued by averaging, on a straight-line basis over the residual term, the difference between the last-known current value and the redemption value. Negotiable debt securities with an issue period of three months or less are valued by averaging, on a straight-line basis over the residual term, the difference between the acquisition price and the redemption value. Debt securities for which no price is available from contributors are valued on the basis of a modelisation carried out by the Management Company. In accordance with the principle of prudence, these valuations may be adjusted for issuer or liquidity risk. Details of selected price contributors can be found in the Pricing Sheet Agreement between the valuer and the Management Company. Forward financial instruments and derivatives: Firm and conditional forward contracts are valued at the settlement price. Swaps Interest rate and/or currency swap contracts are valued on the basis of the price provided by the counterparty, or failing that on the basis of a modelisation carried out by the Management Company. However, in the event of a backed financial swap, the package, comprising the security and its interest rate and/or currency swap agreement, is valued as a whole. 13

14 Contracts for difference CFDs are valued on the basis of the price provided by the counterparty once the Management Company has validated the valuation model. Currencies Assets and liabilities denominated in a currency other than the valuation reference currency are valued at the exchange rate at 5 p.m. Currency futures Contracts are valued in accordance with mark-to-market prices at 5 p.m. Deposits Term deposits are measured at their contractual value. In accordance with the principle of prudence, these valuations may be adjusted for the risk of counterparty default. Cash borrowings Borrowings are measured at contractual value. Repurchase transactions Debt securities received under repurchase agreements are valued at their contractual amount, plus any interest receivable calculated pro rata temporis. Securities delivered under repurchase agreements are valued at their market value; the debt representing these securities is valued according to the contractual amount plus any accrued interest payable calculated pro rata temporis. Receivables on securities lent are valued at the market value of the securities concerned plus any accrued loan interest calculated pro rata temporis. Borrowed securities and the debt representing these securities are valued at the market value of the securities concerned plus any accrued loan interest calculated pro rata temporis. Off-balance-sheet commitments Positions on futures contracts are valued at their market value: closing price X round lot X number of contracts. Positions on conditional future contracts are valued at the underlying equivalent of the option: Round lot X Delta X Round lot X Closing price of the underlying Swap contracts are valued at their nominal value. Financial instruments whose prices have not been determined on the valuation day or whose prices have been adjusted are valued by the Management Company at their probable trading price. The rationale and/or supporting evidence for these valuations is provided to the Statutory Auditor at the time of its audits. ACCOUNTING METHODS Accounting method used to recognise income from deposits and fixed-income financial instruments: coupon-paid. Recognition of costs of acquisition and disposal of financial instruments: net of costs. Method of calculation of variable management fees and expenses (see Table/Fees invoiced to the Fund/Management fees/performance fee). 14

15 REGULATIONS Section I: assets and units Article 1 - Units in co-ownership The co-owners rights are expressed in units, with each unit corresponding to the same fraction of the Fund s assets. Each unit-holder has a right of joint ownership of the Fund's assets in proportion to the number of units held. The Fund s duration is 99 years from the date of inception. Categories of units: The characteristics of the different categories of unit and the subscription conditions are set out in the Fund prospectus. The different categories of shares may: be subject to different income distribution policies; - be denominated in different currencies; - be subject to different management fees; - incur different subscription and redemption fees; - have different nominal values; - be systematically hedged against risk, in whole or in part, as defined in the prospectus. This hedging is put in place by means of financial instruments which limit the impact of the hedging transactions on other units as far as possible; - be reserved to one or more distribution networks. The management company may decide to split the units into tenths, hundredths, thousandths or ten-thousandths, which are referred to as fractional units. The provisions of the regulations governing the issue and redemption of units apply to fractional units, the value of which will always be proportional to that of the unit they represent. Unless otherwise stipulated, all other provisions of the regulations relating to units automatically apply to fractional units. Lastly, the portfolio management company may, at its sole discretion, split the units by issuing new units to be allocated to unit-holders in exchange for their existing units. Article 2 Minimum Fund size Units may not be redeemed if the Fund s assets fall below 300,000; if they do fall below this amount and do not quickly recover, the management company will take the necessary steps to liquidate the UCITS in question or carry out one of the transactions referred to in Article of the General Regulations of the AMF. Article 3 - Issue and redemption of units Units may be issued at any time at the request of holders on the basis of their net asset value, plus any subscription fees that might be applicable. Subscriptions and redemptions are carried out on the conditions and in accordance with the methods set out in the prospectus. Fund units may be admitted to an official stock exchange listing in accordance with the regulations in force. Subscriptions must be fully paid up on the day on which the net asset value is calculated. Subscriptions may be paid for in cash and/or through a contribution of financial instruments. The portfolio management company is entitled to refuse the securities offered and has seven days from the date on which they are deposited in which to inform the holder of its decision. If accepted, the securities contributed will be valued in accordance with the rules set out in Article 4 and the subscription will be carried out on the basis of the first net asset value after the securities are accepted. The Fund s management company may restrict or prevent (i) ownership of Fund units by any natural or legal person who is forbidden to hold Fund units by virtue of the subscribers concerned section of the prospectus (hereinafter, an Ineligible Person ), and/or (ii) the entering in the Fund s register or the transfer agent s register (the Registers ) of any of the following intermediaries ( Ineligible Intermediary ): financial institutions not classed as Participating Financial Institutions* and Passive Non-Financial Foreign Entities (passive NFFEs). The terms followed by an asterisk (*) are defined by the Intergovernmental Agreement (IGA) between France and the US on improving international tax compliance and to implement FATCA, which was signed on 14 November 2013 and is available at:

16 REGULATIONS To this end, the Fund s management company may: (i) refuse to issue any units if it appears that such an issue would or could lead to those units being held directly or indirectly by an Ineligible Person or to an Ineligible Intermediary being entered in the Registers; (ii) at any time require an intermediary whose name appears in the Registers to provide any information, accompanied by a sworn statement, that it deems necessary for the purposes of determining whether or not the beneficial owner of the units in question is an Ineligible Person; and (iii) if it appears that the beneficial owner of the units is an Ineligible Person or an Ineligible Intermediary is entered into the Registers of unit-holders, carry out a compulsory redemption of all of the units held by the Ineligible Person or Ineligible Intermediary after a period of ten business days. The compulsory redemption will be carried out using the last known net asset value, less any charges, fees and commissions that may be applicable, which will be for account of the Person affected by the redemption. Redemptions are in cash only, unless the Fund is liquidated and unit-holders have agreed to be reimbursed in securities. Redemptions are settled by the issuer account keeper within a maximum of five days after valuation of the unit. However, if in exceptional circumstances reimbursement requires Fund assets to be sold, this period may be extended, but may in no case exceed 30 days. Except in the case of inheritance or donation, the sale or transfer of units between holders, or from holders to a third party, is treated as a redemption followed by a subscription; if this involves a third party, the sale or transfer amount must, where applicable, be supplemented by the beneficiary so that it reaches at least the minimum subscription amount stipulated in the prospectus. Pursuant to Article L of the French Monetary and Financial Code, the redemption of units by the Fund, as with the issue of new units, may be temporarily suspended by the management company when exceptional circumstances so require and if the interests of unit-holders so dictate. If the net assets of the Fund fall below the amount established in the regulations, no units may be redeemed. Minimum subscription conditions may be applied in accordance with the methods set out in the prospectus. The UCITS may cease to issue units in application of paragraph 3 of Article L of the French Monetary and Financial Code in objective situations resulting in the closing of subscriptions, such as upon reaching a maximum number of units or shares issued, or a maximum amount of assets, or the expiry of a specified subscription period. These objective situations are described in the Fund prospectus. Article 4 - Calculation of net asset value The NAV per unit is calculated by taking into consideration the valuation rules shown in the prospectus. Contributions in kind can consist only of securities, investments or contracts that are eligible to form the assets of UCITS; these are valued according to the valuation rules applicable to the calculation of net asset value. Section II : Functioning of the Fund Article 5- Management company The Fund is managed by the portfolio management company in accordance with the guidance established by the Fund. The portfolio management company acts at all times in the exclusive interests of the unit-holders and has the sole right to exercise the voting rights attached to the securities held in the Fund. Article 5 bis Rules of operation The instruments and deposits eligible to form the assets of the UCITS and the investment rules are described in the prospectus. 16

17 REGULATIONS Article 6 Custodian The Custodian performs the tasks incumbent upon it in accordance with the laws and regulations in force as well as those contractually entrusted to it by the portfolio management company. In particular it must ensure that the decisions of the portfolio management company are in order. If necessary it must take such protective measures as it deems appropriate. In the event of a dispute with the portfolio management company, it must inform the AMF. Article 7 Statutory auditor A Statutory Auditor is appointed by the portfolio management company's Board of Directors or management board for a period of six financial years, subject to prior approval of the AMF. The Statutory Auditor certifies that the financial statements are true and correct. The Statutory Auditor may be reappointed for further term(s) of office. The Statutory Auditor is obliged to report to the AMF without delay any fact or decision concerning the UCITS of which it becomes aware in carrying out its duties, and which is likely to: 1. constitute a violation of the legislative or regulatory provisions applicable to this undertaking, and have a significant impact on the financial position, income or assets; 2. adversely affect the conditions or the continuity of its operations; 3. lead to a qualified opinion being issued or to refusal to certify the financial statements. The Statutory Auditor oversees the valuation of assets, share-for-share calculations used in transformation, merger or split transactions. The Statutory Auditor assesses all contributions in kind, under its responsibility. It checks the accuracy of the composition of the assets and other items prior to publication. The Statutory Auditor's fees are set by common accord between the Statutory Auditor and the portfolio management company's Board of Directors or management board on the basis of a programme of work listing all the procedures deemed necessary. The Statutory Auditor certifies the statements used as a basis for interim distributions. The Statutory Auditor's fees are included in the management fees. Article 8 Financial statements and management report At the close of each financial year, the portfolio management company prepares summary financial statements and produces a report on the management of the Fund for that financial year. At least every six months, overseen by the custodian, the portfolio management company draws up an inventory of the Fund s assets. The portfolio management company makes these documents available to unit-holders within four months of the end of the financial year and informs them of the amount of income to which they are entitled. These documents are either sent by post, at the express request of unit-holders, or made available to them at the portfolio management company's offices. Section III: Allocation of distributable amounts Allocation of distributable amounts Net income for the year, which in accordance with the provisions of the law is equal to the sum of interest payments, arrears, bonuses and lots, dividends, attendance fees and all other income relating to the securities forming the portfolio of the Fund (and/or of each sub-fund where applicable), plus the income from sums held as liquid assets and minus the management fees and borrowing costs and any depreciation and amortisation charges. Amounts available for distribution by a UCITS consist of: 1. Net income for the year plus retained earnings and plus or minus the balance of accruals; 2. Realised capital gains, net of costs, less realised capital losses, net of costs, recognised during the year, plus any net capital gains of the same nature recognised over previous financial years which were not distributed or capitalised, plus or minus the balance of the capital gains regularisation account. The amounts referred to in 1 and 2 may be distributed in whole or in part, independently of one another. Payment of distributable amounts is made within five months of the end of the financial year. 17

18 REGULATIONS The portfolio management company decides on the distribution of income. For each unit category if applicable, and for each of the amounts referred to in 1 and 2, the Fund may select one of the following formulae: - Pure accumulation: distributable amounts are fully accumulated, with the exception of those that must be distributed by law; - Pure distribution: the amounts are fully distributed to the nearest rounded figure, interim distributions may be paid; - For Funds wishing to retain the freedom to accumulate and/or distribute, the portfolio management company decides each year on how to allocate distributable amounts. If applicable, interim distributions may be made, complying with applicable regulations. The methods for allocating income and distributable amounts are set out in the prospectus. Section IV: Merger, Split, Dissolution, Liquidation Article 10 - Merger Split The portfolio management company may either merge all or part of the Fund s assets with another UCITS under its management, or split the Fund into two or more other collective investment funds. These merger or split transactions may only be performed one month after unit-holders have been notified. They give rise to the issue of a new certificate indicating the number of units held by each unit-holder. Article 11 - Dissolution Extension If the Fund s assets remain below the amount specified in Article 2 above for a period of thirty days, the portfolio management company will inform the AMF and dissolve the Fund, except in the event of a merger with another collective investment fund. The portfolio management company may dissolve the Fund early by informing the unit-holders of its decision, after which time no more subscription or redemption orders will be accepted. The portfolio management company will also dissolve the Fund if a request is made to redeem all units, if the Custodian's appointment is terminated and no other Custodian has been appointed, or on expiry of the Fund's term, except where such term is extended. The portfolio management company will inform the AMF in writing of the date and arrangements for the dissolution. It will then send the Statutory Auditor's report to the AMF. In agreement with the Custodian, the portfolio management company may decide to extend the life of the Fund. Its decision must be taken at least three months prior to the expiry of the term stipulated for the Fund and communicated to unit-holders and the AMF. Article 12 Liquidation In the event of dissolution, the portfolio management company or, with its agreement, the Custodian, shall assume the role of liquidator; failing this, the liquidator shall be appointed by the court at the request of any interested party. For this purpose, the liquidator(s) shall be vested with the broadest powers to realise the Fund s assets, to settle any liabilities and to distribute the balance in cash or securities among the unit-holders. The Statutory Auditor and the Custodian shall continue to perform their duties until the liquidation has been completed. Section V: Disputes Article 13 - Jurisdiction - Choice of Domicile Any disputes arising in connection with the Fund during the period of operation thereof, or during its liquidation, whether between unit-holders, or between unit-holders and the portfolio management company or the Custodian, shall be subject to the jurisdiction of the competent courts. 18