S A L E S P R O S P E C T U S (with appendix and management regulations) Ethna-AKTIV E. Management company: ETHENEA Independent Investors S.A.

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1 S A L E S P R O S P E C T U S (with appendix and management regulations) Ethna-AKTIV E Management company: ETHENEA Independent Investors S.A. Custodian bank: DZ PRIVATBANK S.A. Date: December

2 Contents Management, sales/marketing and consultancy 3 Sales prospectus 6 The management company 6 The investment advisor The custodian bank 7 Registrar and transfer agent 7 Central administrative agent 7 Legal position of investors 8 General information on trading in the units of the Fund 8 Investment policy 9 Information on techniques and instruments 9 Calculation of the unit value 13 Issue of units 13 Redemption and exchange of units 14 Notes on risks 16 Risk profile 19 RISK-MANAGEMENT PROCEDURES 19 Taxation of the fund 19 Taxation on the income investment fund units for the investor 21 Publication of unit prices, issue prices and redemption prices 21 Information for investors 22 Appendix 24 Management regulations 33 Article 1 The Fund 33 Article 2 The Management Company 33 Article 3 The custodian bank 34 Article 4 General investment policy provisions 35 Article 5 Units 44 Article 6 - Calculation of the unit value 45 Article 7 Discontinuation of the calculation of the Unit Value 46 Article 8 Issue of units 47 Article 9 - Restrictions on and suspension of the issue of units 48 Article 10 - Redemption and exchange of units 48 Article 11 Costs 50 Article 12 Use of income 52 Article 13 - Financial year Audit of financial statements 53 Article 14 Publications 53 Article 15 - Merger of the Fund 53 Article 16 Liquidation of the Fund 54 Article 17 Limitation and presentation periods 55 Article 18 - Applicable law, place of jurisdiction and language of contract 55 Article 19 Amendments to the management regulations 56 Article 20 Effective date 56 2

3 Management, sales/marketing and consultancy Management company ETHENEA Independent Investors S.A. 9a, Rue Gabriel Lippmann, L-5365 Munsbach Equity capital as at 10 September 2010: EUR 1,000,000 Board of directors of the management company Chairman of the board of directors Luca Pesarini ETHENEA Independent Investors S.A. Deputy Chairman of the board of directors Julien Zimmer DZ PRIVATBANK S.A. Members of the board of directors Thomas Bernard ETHENEA Independent Investors S.A. Nikolaus Rummler IPConcept Fund Management S.A. Loris Di Vora DZ PRIVATBANK S.A. Roland Kunz HARON HOLDING AG Ulrich Juchem DZ PRIVATBANK S.A. Chief Executive of the management company Frank Hauprich Thomas Bernard Auditors of the management company KPMG Audit S.à r.l. 9, allée Scheffer L-2520 Luxembourg 3

4 Custodian bank DZ PRIVATBANK S.A. 4, rue Thomas Edison L-1445 Luxemburg-Strassen Paying agent Grand Duchy of Luxembourg DZ PRIVATBANK S.A. 4, rue Thomas Edison L-1445 Luxemburg-Strassen Central administrative agent, registrar and transfer agent DZ PRIVATBANK S.A. 4, rue Thomas Edison L-1445 Luxemburg-Strassen Auditor of the Fund KPMG Luxembourg S.à r.l. 9, allée Scheffer L-2520 Luxemburg 4

5 The fund described in this sales prospectus (including appendix and management regulations) (the Sales Prospectus") is a Luxembourg investment fund (fonds commun de placement) established for an unlimited period in the form of a single fund in accordance with Part I of the Luxembourg Law of 17 December 2010 on Undertakings for Collective Investment (the Law of 17 December 2010 ). This Sales Prospectus is only valid in combination with the most recently published annual report and no more than sixteen months may have passed since the reporting date of the annual report. If more than eight months have elapsed since the date of the annual report, the purchaser will also be provided with the semi-annual report. The legal basis of the purchase of units is the currently valid Prospectus. By purchasing a unit, the investor acknowledges the Sales Prospectus as well as all approved and published changes of the same. The investor shall be provided with a copy of the "Key Investor Information" document free of charge in good time before the acquisition of the fund units. No information or declarations that deviate from the Sales Prospectus or the "Key Investor Information" document may be given. The management company cannot be held liable for information or declarations that differ from the current Sales Prospectus or the "Key Investor Information" document. The Sales Prospectus, the "Key Investor Information" document as well as the Fund's annual and semiannual reports can be obtained free of charge on a permanent data carrier from the registered office of the management company, the custodian bank, the paying agents and the sales agents. The Sales Prospectus and the "Key Investor Information" document may also be obtained from the website The documents can also be provided in paper form at the investor's request. Additional information may be obtained free of charge from the Management Company at any time during normal business hours. 5

6 Sales prospectus The investment fund described in this Sales Prospectus the ("Fund") is managed by ETHENEA Independent Investors S.A.. This Sales Prospectus includes an appendix relating to the Fund and the management regulations applicable to the Fund. The management regulations came into force on 06 August These regulations have been entered in the Luxembourg commercial register and a notice to this effect published on 23 August 1993 in the "Mémorial, Recueil des Sociétés et Associations," the Official Journal of the Grand Duchy of Luxembourg ("Mémorial"). The management regulations were last amended on 15 December 2011 and a notice of filing with the Commercial Register in Luxembourg was published in the Mémorial on 15 January The sales prospectus (with appendix) and management regulations constitute a whole in terms of their substance and thus supplement each other. The management company The Management Company of the Fund is ETHENEA Independent Investors S.A. ( Management Company ), a public limited company (Aktiengesellschaft) under the law of the Grand Duchy of Luxembourg with its registered office located at 9a, rue Gabriel Lippmann, L-5365 Munsbach. It was incorporated for an indefinite period on 10 September Its articles of association were published in the Mémorial on 15 September The last amendment to the management company's Articles of Association came into effect on 1 October 2011 and was published in the Mémorial on 21 October The Management Company is entered in the Luxembourg Commercial Register under reference R.C.S. Luxembourg B The Management Company's financial year ends on 31 December of each year. The equity capital of the management company amounted to EUR 1,000,000 on 10 September The purpose of the Management Company is the establishment and management of Luxembourg undertakings for collective investment in securities approved under Directive 2009/65/EC and its amendments ( Directive 2009/65/EC ) and other undertakings for collective investment which do not fall under Directive 2009/65/EC and for which the Management Company is subject to supervision. The Management Company complies with the requirements of the amended Council Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in securities. The Management Company is responsible for the management and administration of the Fund. Acting on behalf of the Fund, it may take all management and administrative measures and exercise all rights directly or indirectly connected with the assets of the Fund. In carrying out its responsibilities, the Management Company acts independently of the custodian bank and exclusively in the interest of the investors. The Management Company discharges its obligations with the due care of a paid authorised representative. 6

7 The board of directors has appointed Messrs Franck Hauprich and Thomas Bernard as chief executives and transferred all management responsibilities to them. In addition to the fund described in this Sales Prospectus, the management company currently manages the following investment funds: Colin & Cie. Fund, Ethna GLOBAL Defensiv und Ethna GLOBAL Dynamisch. In connection with the management of the assets of the Fund, the Management Company may consult an investment advisor/fund manager at its own responsibility and control. The investment decision, the issuance of orders and the selection of the brokers are exclusively reserved to the Management Company unless a fund manager has been entrusted with the management of the assets of the Fund. The Management Company is permitted to transfer some activities at its own responsibility and control to third parties. The transfer of duties may not under any circumstances impair the effective supervision of the Management Company. In particular, the Management Company must not be prevented from acting in the interests of the investors as a result of the transfer of duties. The custodian bank The Fund's custodian bank is DZ PRIVATBANK S.A. whose registered office is located at 4, rue Thomas Edison, L-1445 Luxemburg-Strassen. The custodian bank is a public limited company (Aktiengesellschaft) under the laws of the Grand Duchy of Luxembourg and conducts banking business. The function of the Custodian Bank is governed by the Law of 17 December 2010, the custodian bank agreement, the Management Regulations (Article 3) and this Prospectus (including the Appendix). It acts independently of the Management Company and solely in the interest of the investors. Registrar and transfer agent The Fund's registrar and transfer agent is DZ PRIVATBANK S.A. whose registered office is located at 4, rue Thomas Edison, L-1445 Luxemburg-Strassen. The registrar and transfer agent is a public limited company governed by the laws of the Grand Duchy of Luxembourg. The duties of the registrar and transfer agent consist of the execution of applications or orders for the subscription to or the redemption, exchange or transfer of units as well as maintaining the register of unitholders. Central administrative agent The Fund's central administrative agent is DZ PRIVATBANK S.A. whose registered office is located at 4, rue Thomas Edison, L-1445 Luxemburg-Strassen. The central administrative agent is a public company under the law of the Grand Duchy of Luxembourg and is responsible, in particular, for bookkeeping, calculating the net asset value and preparing the annual financial statements. 7

8 The central administrative agent has, at its own responsibility and control, transferred various administrative duties, such as the calculation of the net asset value, to Union Investment Financial Services S.A. whose registered office is at 308, route d Esch, L-1471 Luxembourg. Legal position of investors The Management Company invests the monies placed in the Fund in its own name for the joint account of the investors using the principle of risk diversification in securities and/or other permitted assets, as stipulated in Article 41 of the Law of 17 December The resources invested and the assets thus acquired make up the assets of the Fund, which are held separately from the Management Company s own assets. The investors are joint owners of the assets of the Fund in proportion to the units they hold. The units of the Fund will be issued in the certificates and denominations stated in the appendix. If registered units are issued, these will be included by the registrar and transfer agent in the unit register kept for the Fund. For this purpose, the confirmations relating to the entry in the unit register are sent to the investors at the address stated in the unit register. No claims to physical certificates may be made in respect of the issue of bearer units or in respect of the issue of registered units. All units in the Fund in principle have the same rights unless the Management Company decides in accordance with Article 5.3 of the management regulations to issue various classes of units within the Fund. If units of a fund are admitted to official trading on a stock exchange, this will be stated in the appendix to the sales prospectus. The possibility that units of the Fund may be traded on other markets cannot be ruled out. (Example: included on the over-the-counter market on a stock exchange). The market price underlying stock market trading or dealing on other markets is not determined exclusively by the value of the assets held in the Fund. Supply and demand are also contributing factors. For this reason, the market price may deviate from the calculated price of the units. The management company draws the investors attention to the fact that any investor will only be able to fully exercise his investor rights directly against the Fund if the investor is registered himself and in his own name in the unitholders register of the Fund. In cases where an investor invests in the Fund through an intermediary investing into the Fund in his own name but on behalf of the investor, it may not always be possible for the investor to exercise certain unitholder rights directly against the Fund. Investors are advised to take advice on their rights. General information on trading in the units of the Fund Investing in the Fund is considered to be a long-term commitment. The systematic buying and selling of units by an investor for the purposes of exploiting timing differences and/or conceivable weaknesses or 8

9 imperfections in the system for determining the net asset value (generally referred to as 'market timing') can harm the interests of other investors. The Management Company refrains from this arbitrage technique. To prevent such practices, the Management Company therefore reserves the right to reject, cancel or suspend a subscription application or exchange order from an investor if it suspects that the investor is engaging in market timing. In such cases, the Management Company will take appropriate action to protect the other investors in the Fund. The purchase or sale of units after the close of trading at already established or different closing prices, known as late trading, is strictly avoided by the Management Company. In all cases, the Management Company will ensure that the issue and redemption of units is settled on the basis of a unit price that is unknown to the investor beforehand. Should it nonetheless be suspected that an investor engages in late trading, the management company can refuse to accept the subscription and redemption application until the applicant has removed all doubt with regard to his/her subscription application. Investment policy The objective of the investment policy of the Fund is to achieve a reasonable performance in the Fund's currency as defined in Article 6 point 2 of the management regulations. The Fund's specific investment policy is described in the appendix to the sales prospectus. The general investment principles and investment restrictions stated in Article 4 of the management regulations apply to this Fund unless exceptions or additions for the Fund are contained in the corresponding appendix to the sales prospectus. The Fund's assets will be invested subject to the principles of risk diversification within the meaning of the rules stated in Part I of the Law of 17 December 2010 and the investment policy principles described in Article 4 of the management regulations and subject to the investment restrictions. Information on techniques and instruments In accordance with the general provisions of the investment policy stated in Article 4 of the management regulations, the Management Company may use the following particular techniques and instruments for the Fund: 1. Options An option is a right to buy (a call option ) or sell (a put option ) a particular asset at a pre-set price ( strike price ) on a pre-set date ( exercise date ) or within a pre-set period. The price of a call or put option is the option premium. Call and put options may be bought or sold for the Fund provided the Fund is permitted to invest in the underlying asset in accordance with its investment objectives as stated in the management regulations. 9

10 2. Financial futures Financial futures contracts are unconditionally binding agreements for both contracting parties to buy or to sell a certain quantity of a certain asset at a certain time - the due date - at a price agreed upon in advance. Financial futures contracts may only be entered into by the Fund provided the Fund is permitted to invest in the underlying asset in accordance with its investment objectives as stated in the management regulations. 3. Securities lending Up to 50% of a fund's portfolio may be lent through a standardised securities lending system or a standard framework agreement, provided the period of the transaction does not exceed 30 days. Such a securities lending system must be organised by a recognised clearing institution or by a firstclass financial institution specialising in such transactions. The Fund may lend more than 50% of its portfolio value contained in the assets of a fund for a period exceeding 30 days if the Fund is entitled to terminate the lending contract at any time and to request the return of the securities lent. For the purpose of securities lending transactions, the Fund must, in principle, receive a guarantee, the value of which over the entire term must be equal to 90% of the total market value (including interest, dividends and any other claims) of the loaned securities and which is revalued on a daily basis. If the current value of the guarantee falls below 90% of the total market value of the loaned securities during the term of the loan, the corresponding sureties will be requested and delivered to the counterparty. The guarantee may consist of cash, equities from top-rated issuers officially listed for trading on an exchange in a Member State of the European Union or in another country that is party to the European Economic Area Treaty, or in securities issued or guaranteed by Member States of the OECD, its local authorities or undertakings of a community, regional or global character, and which are blocked on behalf of the Fund during the term of the securities loan. The Fund is not permitted to use the securities provided to it for collateral purposes. The counterparty risk entered into by the Fund in transactions with one and the same counterparty may not exceed 10% of its assets, if the counterparty is a financial institution under Article 41 paragraph (1) point f) of the Law of 17 December In other cases, the limit is 5% of its assets. Securities issued by securities borrowers themselves or to a company that belongs to the same group are inadmissible for collateral purposes. A guarantee is not required if the securities lending transaction is made through Clearstream Banking S.A., Clearstream Banking Aktiengesellschaft, EUROCLEAR or other recognised settlement organisation which itself provides collateral in the form of a guarantee or otherwise to the lender of the loaned securities. The income from securities lending transactions will be primarily credited after deduction of the related costs thereof to the Fund's assets. 4. Currency futures contracts The Management Company may enter into currency futures contracts for the Fund. 10

11 Currency futures contracts are unconditionally binding agreements for both contracting parties to buy or to sell a certain quantity of the underlying currency at a certain time - the due date - at a price agreed upon in advance. 5. Swaps Pursuant to the investment principles, the Management Company may enter into swap transactions on behalf of the Fund. A swap is a contract between two parties based on the exchange of payment flows, assets, income or risk. The types of swap transactions that can be entered into for the Fund include, for example, but are not restricted to, interest, currency, equity and credit default swap transactions. An interest swap is a transaction in which two parties exchange payment flows which are based on fixed or variable interest payments. The transaction can be matched with the take-up of resources at a fixed rate of interest and the concurrent issue of resources at a variable rate of interest with the proviso that the nominal amounts of the assets cannot be exchanged. Currency swaps mostly include the exchange of the nominal amounts of the assets. They are equivalent to the raising of funds in one currency and a concurrent issue of funds in another currency. Asset swaps, which are also often called synthetic securities, are transactions which convert returns from a specific asset into another (fixed or variable) interest flow or into another currency as the asset (e.g. bond, floating rate note, bank deposit, mortgage) is combined with an interest or currency swap. An equity swap is characterised by the exchange of payment flows, value changes and/or income from another asset against payment flows, value changes and/or income of another asset whereby at least one of the exchanged payment flows or income of an asset represents an equity or equity index. The Management Company may enter into swaps provided the contractual partner is a first-class financial institution which specialises in this form of transaction and the Fund is permitted to invest in the underlying assets in accordance with the investment objectives contained in its management regulations. 6. Swaptions A swaption is the right but not an obligation to make a clearly specified swap under the conditions at a certain time or within a certain period of time. In other respects, the principles described in connection with options transactions apply. 7. Techniques to manage credit risk The Management Company may use credit linked notes for the Fund that are securities within the meaning of Article 4 paragraph 1 letter b of the management regulations as well as credit default swaps with a view to the efficient management of the Fund provided these were issued by first-rate financial institutions and are in line with the investment policy of the Fund. 11

12 7.1. Credit default swap ("CDS") CDS are the most common form and largest quantity of instrument on the credit derivative market. CDS remove the credit risk of the underlying credit relationship. This separate tradability of the default risk extends the range of possibility for systematically managing risk and income. CDS allow a protection buyer to hedge against the specific risks arising from a credit relationship upon payment of a periodic premium calculated on the basis of the nominal amount to take over the credit risk by a protection seller for a specific period. This premium is based on such factors as the quality of the one or more underlying reference debtor(s) (= the credit risk). The risks to be passed on are firmly defined as credit events beforehand. Provided no credit event occurs, the CDS seller is not required to make a payment. If a credit event occurs, the seller pays a previously defined amount, for example, the nominal value or a compensatory payment in the amount of the difference between the nominal value of the reference asset and its market value after the occurrence of the credit event (the cash settlement). The buyer then has the right to offer an asset owned by the reference debtor defined in the agreement whilst the premium payments of the buyer ceases from this point. The Fund may act as the protection buyer or the protection seller. CDS are traded on the OTC market as a result of which more specific, non-standardised requirements of both contracting parties can be entered into at the price of a lesser degree of liquidity. The commitments entered into as a result of the CDS must be in the exclusive interest of the Fund as well as in accordance with the Fund's investment policy. With regard to the investment limits set out in Article 4, paragraph 6 of the management regulations, the bonds underlying the CDS, as well as the issuer in question, are to be given due consideration. Credit Default Swaps shall be valued in accordance with comprehensible and transparent methods on a regular basis. The Management Company and the auditor will monitor the comprehensibility and transparency of the valuation methods and their application. If such monitoring reveals any differences, the Management Company will arrange for them to be remedied. The sum of the CDS and other techniques and instruments may not exceed the aggregate net assets of the Fund Credit linked notes ("CLN") A credit-linked note ("CLN") is a debt instrument issued by the protection buyer which is only repaid at maturity if a previously specified credit event does not occur. If the credit event does occur, the CLN is repaid within a fixed period minus a settlement amount. CLNs accordingly include a risk premium in addition to the amount of the bond and the interest paid on it, which the issuer pays to the investor for the right to reduce the redemption amount of the bond if the credit event occurs. 8. Remarks The aforementioned techniques and instruments may be extended, if appropriate, by the Management Company if new instruments are offered on the market which correspond to the 12

13 investment objective and which the Fund may use in accordance with the supervisory and legal provisions. Calculation of the unit value The net assets of the Fund are stated in euros ("Reference Currency"). 2. The value of a unit ("Unit Value") is stated in the currency specified in the appendix to the sales prospectus ("Fund Currency"), unless a currency other than the Fund Currency is specified for any other unit classes in the appendix to the sales prospectus ("Unit Class Currency"). Subject to the supervision of the custodian bank, the Unit Value is calculated by the Management Company or by an entity on behalf of the Management Company on any banking day in Luxembourg with the exception of 24 and 31 December each year ("Valuation Day"). To calculate the unit price, the value of the assets in the Fund less any liabilities relating to the Fund ("the Net Assets of the Fund") is calculated on each Valuation Day divided by the number of units in issue in the Fund on the Valuation Day rounded up to two decimal places. Further details on the calculation of the Unit Value are specified in Article 6 of the management regulations. Issue of units 1. Units are issued on each Valuation Day at the issue price. The issue price is the Unit Value pursuant to Article 6 paragraph 4 of the management regulations plus a front-end fee, the maximum value of which is set out for the Fund in the appendix to the sales prospectus. Fees and other costs incurred in the countries in which the Fund is distributed may be added to the issue price. 2. Applications to subscribe to registered units may be submitted to the Management Company, the custodian bank, the registrar and transfer agent, the sales agent or the paying agents. The receiving agents are required to forward the subscription applications to the registrar and transfer agent immediately. The definitive date is that received by the registrar and transfer agent. The latter accepts the subscription applications on behalf of the Management Company. Subscription applications to purchase bearer units will be forwarded to the registrar and transfer agent by the agent with which the subscriber has a securities account. The definitive date is that received by the registrar and transfer agent. Completed subscription applications received no later than 5 p.m. on a Valuation Day by the relevant agent will be settled at the issue price for the following Valuation Day, providing the funds for the subscribed units are available. In all cases, the Management Company will ensure that the issue of units is settled on the basis of a unit price that is unknown to the investor beforehand. If, however, there is a suspicion that an investor is engaging in late trading, the Management Company may refuse to accept the subscription application until the applicant has removed any doubt with regard to the subscription application. Subscription applications received by the relevant agent after 5 p.m. on a Valuation Day will be settled at the issue price for the next but one Valuation Day. If the funds for the subscribed registered units are not available when the fully completed subscription application is received by the registrar and transfer agent, or if the subscription 13

14 application is incorrect or incomplete, the subscription application will be deemed to have been received by the registrar and transfer agent on the date on which the funds for the subscribed units are available or the subscription application is in the correct form. The bearer units will be transferred from the custodian bank upon receipt of the issue price by the custodian bank on behalf of the Management Company by crediting these to the agent with which the subscriber holds a securities account. The issue price is payable within two valuation days after the corresponding Valuation Day in the respective currency of the Fund, or, if there are several unit classes, in the respective currency of the unit class at the custodian bank in Luxembourg. 3. For savings plans, a maximum of one third of all payments agreed for the first year may be applied to cover costs. The remaining costs are distributed evenly across all later payments. 4. The circumstances under which the issue of units are suspended are described in Article 9 in accordance with Article 7 of the management regulations. Redemption and exchange of units 1. Investors may at any time request redemption of their units at the Unit Value in accordance with Article 6 point 4 to the management regulations, if applicable, less any redemption fee (the "Redemption Price"). Units will only be redeemed on a Valuation Day. If a redemption fee is charged, the maximum value thereof for the Fund will be stated in the appendix to this sales prospectus. In certain countries, the Redemption Price may be increased by local taxes and other charges. The corresponding unit is cancelled upon payment of the Redemption Price. 2. The Redemption Price as well as any other payments to investors will be made via the custodian bank or the paying agents. The custodian bank is only required to make the payment if there are no legal restrictions, such as exchange control legislation, or any other circumstances beyond the control of the custodian bank, which would prohibit the custodian bank from transferring the redemption proceeds into the investor's country. The Management Company may repurchase units unilaterally against payment of the Redemption Price in so far as this appears to be necessary in the interests of the investors or in order to protect the investors or the Fund. 3. The exchange of all or some units into units of another unit class takes place based on the values stated in the corresponding Article 6 point 4 of the management regulations of the respective unit class subject to an exchange fee amounting to a maximum of 1% of the Unit Value of the units to be subscribed, the minimum being, however, the difference between the front-end fee of the unit class of the units to be exchanged and the front-end fee of the unit class in which there is an exchange. If no exchange fee is payable, this will be mentioned in the appendix to the sales prospectus. 14

15 If various unit classes are offered within the Fund, units of one class may be converted into units of another class within the sub-fund unless otherwise stated in the Appendix to the Sales Prospectus. In these cases, no front-end fee shall be charged. The Management Company may decline an exchange application if this appears necessary in the interest of the Fund, the unit class or the investor. 4. Completed redemption applications or exchange instructions for the redemption or exchange of registered units may be submitted to the Management Company, the custodian bank, the registrar and transfer agent, the sales agent or the paying agents. The receiving agents are required to forward the redemption applications or exchange instructions to the registrar and transfer agent immediately. A redemption application or an exchange instruction to redeem or convert registered units is considered to be complete if it specifies the name and address of investor as well as the number or the equivalent value of the units to be redeemed or exchanged and the name of the Fund, and if it is signed by the investor. Completed redemption applications or exchange instructions to redeem or convert bearer units will be forwarded by the agent with which the investor holds a securities account to the registrar and transfer agent. Fully completed redemption applications or fully completed exchange instructions that are received no later than 5 p.m. on a Valuation Day will be settled on the next Valuation Day less any redemption charge or subject to the exchange fee. In all cases, the Management Company will ensure that the redemption or exchange of units is settled on the basis of a unit price that is unknown to the investor beforehand. Fully completed redemption applications or fully completed exchange instructions that are received after 5 p.m. on a Valuation Day will be settled on the next but one Valuation Day less any redemption charge or subject to the exchange fee. The redemption application or exchange instruction will be deemed to have been received when received by the registrar and transfer agent. The Redemption Price is payable within two valuation days after the corresponding Valuation Day in the Fund currency, or, if there are several unit classes, in the respective currency of the unit class. In the case of registered shares, the payment will be made to an account specified by the investor. Any fractions arising from the exchange of bearer shares will be paid by the custodian bank in cash. 5. The Management Company is entitled to temporarily suspend the redemption or exchange of units due to a suspension of the calculation of the Unit Value. 6. The Management Company is entitled, further to prior agreement with the custodian bank and in the interests of the investors, to delay processing substantial numbers of redemption applications until the corresponding assets of the Fund have been sold without delay. In this case, the redemption will be made at the applicable Redemption Price at the time. The same applies to applications to exchange units. The Management Company will, however, ensure that the Fund 15

16 has sufficient liquid funds at its disposal so that redemption or exchange of units may take place immediately upon application from the investors under normal circumstances. Notes on risks General market risk The assets in which the Management Company invests on behalf of the Fund carry risks in addition to opportunities for appreciation in value. If the Fund invests directly or indirectly in securities and other assets, it is subject to a large number of general trends and tendencies, which are sometimes attributable to irrational factors on the markets, in particular on the securities markets. Thus they can lose value such that the market value of the assets falls as compared to the cost price. If a unitholder sells units of the Fund at a time when the market prices of the assets in the Fund have fallen compared to when the units were acquired, the investor will not recoup all the money he invested in the Fund. Although the Fund aims to achieve steady growth, such growth cannot be guaranteed. However, the investor's risk is limited to the amount invested. The investor will not be required to make any payments beyond the sum invested. Risk of interest rate changes When investing in fixed interest securities there is always the possibility that market interest rates may change at the time a security is issued. If market interest rates rise in relation to the interest rates at the time of issue, the prices of fixed-interest securities generally fall. If, on the other hand, market interest rates fall, the price of fixed interest securities will rise. This price trend means that the current return on a fixed-rate security is roughly equivalent to the current market interest rate. However, the price fluctuations vary depending on the term to maturity of the fixed interest securities. Fixed-rate securities with shorter maturities generally have lower price risks than fixed-rate securities with longer maturities. However, fixed-rate securities with shorter maturities generally have lower returns in comparison with fixed-rate securities with longer maturities. Credit risk The creditworthiness (the ability and willingness to pay) of the issuer of a security or money-market instrument directly or indirectly held by the Fund may subsequently fall. This normally leads to a fall in the price of the respective paper that exceeds general market fluctuations. Company-specific risk The performance of the securities and money-market instruments directly or indirectly held by the Fund also depends on company-specific factors, for example, the business position of the issuer. If the company-specific factors worsen, the market value of a given security may fall substantially and permanently, even if stock market developments are otherwise generally positive. Risk of default The issuer of a security held directly or indirectly by the Fund or the debtor of a claim belonging to a Fund may become insolvent. The corresponding assets of the Fund may become worthless as a result of this. 16

17 Counterparty risk In the case of transactions that are not conducted through a stock exchange or a regulated market (OTC transactions), in addition to the risk of default, there is the risk that the counterparty to the transaction may fail to meet its obligations or fail to meet them to the full extent. This applies in particular to transactions that use techniques and instruments. Currency risk If a fund directly or indirectly holds assets which are denominated in foreign currencies, unless the foreign currency positions are hedged, it will be subject to currency risk. In the event of a devaluation of the foreign currency against the Reference Currency of the Fund, the value of the assets held in foreign currencies will fall. Industry risk If a fund focuses its investments on specific industries this will reduce the risk diversification. As a result the Fund will be particularly dependent on both the general development and the development of the company profits of individual industries or influential industries. Country and regional risk If the Fund focuses its investment on specific countries or regions, this will also reduce the risk diversification. Accordingly, the Fund will be particularly dependent on the development of individual or mutually interlinking countries and regions, and on companies which are located and/or active in these countries or regions. Country and transfer risk Economic or political instability in countries in which the Fund invests may mean that a fund does not receive, in whole or in part, the monies owing to it due to the insolvency of the issuer of the respective security or other form of assets. The reasons for this may include, for example, currency or transfer restrictions or other forms of legal changes. Liquidity risk Particularly in the case of illiquid (restricted market) securities, even moderately-sized orders may lead to considerable changes in prices for both purchases and sales. If an asset is not liquid, there is a risk that it may not be possible to sell the asset or to only sell it at considerable discount. In the case of purchase, the illiquidity of an asset may cause the purchase price to rise considerably. Custody risk Custody risk describes the risk arising from the fundamental possibility that the Fund's access to the assets held in custody may be partly or fully withdrawn to its detriment in the event of insolvency or negligent, deceitful or fraudulent dealings by of the custodian bank or a sub-custodian. 17

18 Emerging markets risk Investing in emerging markets entails investing in countries that are not included the World Bank's category of "high per capita gross national product" i.e. are not classified as "developed" countries. Investing in these countries, in addition to the risks specific to the actual class of assets, are subject to particularly high liquidity risk and general market risk. In addition, the settlement of transactions in assets from these countries may give rise to a heightened risk to the detriment of investors, in particular because in these countries it may not be generally possible or customary for transferable securities to be delivered concurrently with payment. Furthermore, emerging markets' legal and regulatory frameworks and their accounting, auditing and financial reporting standards may differ considerably from the normal international standards to the detriment of investors. A higher custody risk may exist in such countries, which can result in particular from different forms of transfer of ownership of acquired assets. Inflation risk Inflation risk means the danger that there will be asset losses as a result of the devaluation of the currency. As a result of inflation, the income of a fund as well as the value of the asset as such may decrease in terms of the purchasing power. A number of currencies are subject to inflation risk to varying high degrees. Settlement risk In particular when an investment is made in unlisted securities, the risk exists that the settlement through a transfer system may not be executed as expected due to a delayed payment or delivery or one which is not in accordance with the agreement. Risks arising from the usage of derivatives The leverage effect of options may result in a greater impact on the value of the Fund's assets - both positive and negative - than would be the case with the direct use of securities and other assets. To this extent, their use is associated with special risks. Financial futures used for a purpose other than hedging also carry considerable opportunities and risks, as only a fraction of the contract value (the margin) needs to be paid immediately. Price changes can therefore lead to substantial profits or losses. The risk and volatility of the Fund may therefore increase. Risk of suspension of redemption Investors may request the redemption of their units from the Management Company on any Valuation Day. The Management Company may temporarily discontinue redeeming the units in the event of exceptional circumstances and then redeem the units a later point at the price applicable at that time (see also Article 7 of the management regulations "Discontinuation of the calculation of the unit value" and Article 10 of the management regulations "Redemption and exchange of units"). This price may be lower than the price before redemption was suspended. 18

19 The Management Company may also be forced to suspend redemption in particular if one or more funds whose units were acquired for the fund suspend the redemption of their units and these represent a considerable portion of the Net Assets of the Fund. Risk profile The investment fund managed by the management company shall be classified into one of the following risks profiles. The risk profile for each fund is to be found in the specific appendix. The descriptions of the following profiles were created under the assumption that markets are operating under normal conditions. In the event of unforeseeable market situations or market disturbances due to the nonfunctioning of markets, the risks may be greater than those stated in the risk profile. Risk profile 1 - Security oriented The fund is suited to security-oriented investors. The composition of the Net Assets of the Fund carries a low level of overall risk matched by corresponding income opportunities. Risks may arise in particular from currency, creditworthiness and price risks as well as from changes in market interest rates. Risk profile 2 - Conservative The fund is suited to conservative investors. The composition of the Net Assets of the Fund carries a moderate overall risk level matched by moderate income opportunities. The risks may in particular arise from currency, creditworthiness and price risks as well as from changes in market interest rates. Risk profile 3 - Growth oriented The fund is suited for growth-oriented investors. The composition of the Net Assets of the Fund carries a high overall risk level matched by high income opportunities. The risks may in particular arise from currency, creditworthiness and price risks as well as from changes in market interest rates. Risk profile 4 - Speculative The fund is suited for speculative investors. The composition of the Net Assets of the Fund carries a very high overall risk level matched by very high income opportunities. The risks may in particular arise from currency, creditworthiness and price risks as well as from changes in market interest rates. Risk-management procedures The Management Company employs a risk-management procedure enabling it to monitor and assess the risk connected with investment holdings as well as their share in the total risk profile of the investment portfolio of the funds it manages at any time. In accordance with the Law of 17 December 2010 and the applicable supervisory requirements of the Commission de Surveillance du Secteur Financier ("CSSF"), the Management Company reports regularly to the CSSF about the risk-management procedures used. Within the framework of the risk-management procedure and using the necessary and appropriate methods, the Management Company ensures that the overall risk of the funds managed bound up with derivatives does not go beyond the total net value of their portfolios. To this end, the Management Company makes use of the following methods: 19

20 Commitment approach: With the "commitment approach", the positions from derivative financial instruments are converted into their corresponding underlying equivalents using the delta approach. In doing so, the netting and hedging effects between derivative financial instruments and their underlyings are taken into account. The total of these underlying equivalents may not exceed the total net value of the Fund's portfolio. VaR approach: The value-at-risk (VaR) figure is a mathematical-statistical concept and is used as a standard risk measure in the financial sector. VaR indicates the possible loss of a portfolio that will not be exceeded during a certain period (the holding period) with a certain probability (the confidence level). Relative VaR approach: With the relative VaR approach, the VaR of the Fund may not exceed a maximum of twice the VaR of a reference portfolio. The reference portfolio is essentially an accurate reflection of the Fund's investment policy. Absolute VaR approach: With the absolute VaR approach, the VaR (99% confidence level, 20-day holding period) of the Fund may not exceed of 20% of the Fund's assets. For funds whose total risk associated with derivatives is determined using the VaR approach, the Management Company also determines the total of the nominal values or equivalent values of all relevant derivatives and estimates a degree of the estimated average value in this regard (leverage). Depending on the respective market situation, this degree of leverage may deviate from the actual value and may either exceed or be less than that value. Investors are notified that no conclusions about the risk content of the Fund may be drawn from this data. In addition, the published expected degree of leverage is explicitly not to be considered an investment limit. The method used in order to determine the total risk associated with derivatives and, if applicable, the disclosure of the benchmark portfolio and the determination of an expected average value of the total nominal values or equivalent values of all relevant derivatives of the managed funds will be indicated in the specific Annex for the respective sub-fund. Taxation of the fund Fund assets invested in the Grand Duchy of Luxembourg are subject to a tax "taxe d'abonnement" that is currently payable at the rate of 0.05% per annum of the Net Assets of the Fund reported at the end of each quarter. The amount of the taxe d abonnement applicable to the Fund or the unit classes is mentioned in the appendix to the sales prospectus. If the Fund's assets are invested in other Luxembourg investment funds that are already subject to the taxe d'abonnement; this tax is waived for the portion of the Fund's assets invested in such Luxembourg investment funds. The income earned by the Fund from the investment of its assets is not taxed in the Grand Duchy of Luxembourg. However, this income may be subject to withholding taxes in countries in which the fund's assets are invested. In such cases, neither the custodian bank nor the Management Company is required to collect tax certificates. 20

21 Taxation on the income investment fund units for the investor Since 1 July 2005, the Grand Duchy of Luxembourg has levied a withholding tax as part of its implementation of Directive 2003/48/EC on the taxation of savings income in the form of interest payments ("Directive"). This withholding tax applies to specific interest income paid in Luxembourg to natural persons who are tax residents in another Member State. This withholding tax can also apply to interest income of an investment fund under certain circumstances. By adopting this Directive, the EU member states agreed that all interest payments should be taxed in accordance with the legislation of the country of domicile. To that end, an automatic exchange of information was stipulated between the national tax authorities. By way of exception, it was agreed that, for a transition period, Luxembourg would not participate in the automatic exchange of information agreed by the other states. Instead, a withholding tax on interest income was introduced in Luxembourg. This withholding tax amounts to 35% of the interest payment from 1 July It is transferred anonymously to the Luxembourg tax authorities and a certificate thereof is issued to the investor. This certification can be used to fully apply the withholding tax that has been paid to the taxpayer's tax liability in his country of residence. The deduction of withholding tax can be avoided by issuing an authorisation for voluntary participation in the sharing of information between national tax authorities or by submitting a certificate of exemption from withholding tax issued by the tax authorities in the country of domicile. Furthermore, investors who are not domiciled in the Grand Duchy of Luxembourg or who do not maintain a permanent establishment in that country are not liable to pay income tax, inheritance tax or wealth tax on their units or income from units in the Grand Duchy of Luxembourg. In such cases, investors are subject to their relevant national tax legislation. Since 1 January 2006, individuals who are resident in the Grand Duchy of Luxembourg and who are not domiciled in another country for tax purposes have been liable to pay a flat-rate withholding tax of 10% on interest income as specified in the Directive as a result of the Luxembourg law on the implementation of the Directive. This withholding tax can also apply to interest income of an investment fund under certain circumstances. At the same time, the Grand Duchy of Luxembourg abolished wealth tax. Interested investors should obtain information and, if appropriate, consult an advisor concerning the laws and regulations applying to the purchase, holding and redemption of units. Publication of unit prices, issue prices and redemption prices The latest unit prices, issue prices, redemption prices and any other information for investors can be obtained at any time from the registered offices of the Management Company or the custodian bank or from the paying agents or any of the sales agents. Issue prices and redemption prices are also published in the Tageblatt newspaper on every stock market trading day in the Grand Duchy of Luxembourg. In addition, the Management Company publishes the issue and redemption prices on the website. 21