AXA WORLD FUNDS Hong Kong Offering Memorandum

This Document is dated 24 th September 2014 AXA WORLD FUNDS Hong Kong Offering Memorandum AXA World Funds Framlington Europe Opportunities AXA World Funds Framlington Health AXA World Funds Framlington Europe Real Estate Securities AXA World Funds Framlington Global Real Estate Securities AXA World Funds Framlington Euro Relative Value AXA World Funds Framlington Global Convertibles AXA World Funds Framlington Emerging Markets AXA World Funds Framlington American Growth AXA World Funds Global Inflation Bonds AXA World Funds Universal Inflation Bonds AXA World Funds US High Yield Bonds Important If you are in any doubt about this document you should seek independent professional financial advice. AXA World Funds (the Fund ) and the eleven Sub-Funds - Framlington Europe Opportunities, Framlington Health, Framlington Europe Real Estate Securities 1, Framlington Global Real Estate Securities, Framlington Euro Relative Value, Framlington Global Convertibles, Framlington Emerging Markets, Framlington American Growth, Global Inflation Bonds, Universal Inflation Bonds, and US High Yield Bonds, (together the Sub-Funds ) have been authorised by the Securities & Futures Commission in Hong Kong (the SFC ). The SFC authorisation is not a recommendation or endorsement of the Fund nor does it guarantee the commercial merits of the Fund or its performance. It does not mean the Fund is suitable for all investors nor is it an endorsement of its suitability for any particular investors or class or investors. The Sub-Funds may use financial derivative instruments for investment purposes other than hedging / efficient portfolio management purposes within the investment restrictions as stated in section 21 Investment Restrictions of this document. The Sub-Funds will observe the investment restrictions under UCITS IV as described in section 21 Investment Restrictions. The Sub-Funds Framlington Europe Opportunities, Framlington Health, Framlington Europe Real Estate Securities, Framlington Global Real Estate Securities and, Framlington Euro Relative Value, Framlington Emerging Markets and Framlington American Growth do not currently use financial derivative instruments for investment purposes. Prior written notification of not less than one month will be given to Shareholders should the Board of Directors of the Fund intend to change the investment objective, policy and/or restrictions applicable to the Sub-Funds or to use financial derivative instruments for investment purposes in the future. 1 AXA World Funds - Framlington Europe Real Estate Securities and AXA World Funds - Framlington Global Real Estate Securities are authorised under the SFC Code on Unit Trusts and Mutual Funds but not under the Code on Real Estate Investment Trusts. Authorisation from SFC does not imply official recommendation. 1

The Sub-Funds Framlington Global Convertibles, Global Inflation Bonds, Universal Inflation Bonds and US High Yield Bonds are currently using financial derivative instruments for investment purposes such as, but not limited to total return swaps, interest rate swaps, foreign exchange swaps, credit default swaps, options and futures and as described below: - The Sub-Funds Universal Inflation Bonds and Global Inflation Bonds are using financial derivative instruments extensively for investment purposes; and - the Sub-Funds Framlington Global Convertibles and US High Yield Bonds are using financial derivative instruments not extensively for investment purposes. Registration of the Fund The Fund is registered pursuant to Part I of the Law of 17 December 2010 on Undertakings for Collective Investment (the "Law of December 2010" or the Law of 2010 ), superseding the previous Law of 20 December 2002. The Fund is an Undertaking for Collective Investment in Transferable Securities ("UCITS") in accordance with the Council Directive 2009/65/EC ("UCITS Directive") as amended and the Board of Directors of the Fund proposes to market the Shares in accordance with the UCITS Directive in certain Member States of the European Union ( EU ). The Board of Directors of the Fund may also propose to offer for sale the Shares in non-eu countries as the case may be, provided that such offering is in compliance with local laws and regulations. United States The Shares are not being offered in the United States, and may be so offered only pursuant to an exemption from registration under the Securities Act of 1933, as amended (the "1933 Act"). The Shares have not been registered with the Securities and Exchange Commission or any state securities commission nor has the Fund been registered under the Investment Company Act of 1940, as amended (the "1940 Act"). No transfer or sale of the Shares shall be made unless, among other things, such transfer or sale is exempt from the registration requirement of the 1933 Act and any applicable state securities laws, or is made pursuant to an effective registration statement under the 1933 Act and such securities laws and would not result in the Fund becoming subject to registration or regulation under the 1940 Act. Structure of the Fund AXA World Funds is a Luxembourg based open-ended investment company with variable capital (société d'investissement à capital variable) ("SICAV") with separate sub-funds (individually a "Sub-Fund" and collectively the "Sub-Funds"). The Fund is established under Part I of the Law of December 2010 and is subject to the provisions of the Law of 10 August 1915 on commercial companies (the "1915 Law") as amended. The Fund is managed by its Board of Directors. The Fund was first established on 24 December 1996 as a fonds commun de placement. By a decision of the unitholders of the Fund adopted on 18 February 1998 the Fund was transformed into a société anonyme qualifying as a SICAV and the Fund's Articles of Incorporation were adopted. The Fund is governed by its Articles. The Articles were last amended at the Extraordinary General Meeting of Shareholders held on 25 March 2008 and published in the Mémorial on 7 May 2008. Management Company The Fund has appointed AXA Funds Management S.A. to serve as its designated management company in accordance with the Law of December 2010 pursuant to a Management Company Services Agreement dated 29 August 2006. Under this Agreement, the Management Company provides investment management, administrative and marketing services to the Fund, subject to the overall supervision and control of the Directors. AXA Funds Management S.A. was organised on 21 November 1989 as a public limited company (société anonyme) for an unlimited period of time under the laws of the Grand Duchy of Luxembourg. Its articles of incorporation were published in the Mémorial on 26 January 1990. Its articles were last amended on 28 April 2006 and published in the Mémorial on 6 June 2006. AXA Funds Management S.A. is a management company as defined under chapter 15 of the Law of December 2010. 2

Specific Sub-Fund Information 1. Investment Objectives AXA World Funds Framlington Europe Opportunities - Reference Currency EUR The objective of Framlington Europe Opportunities is to achieve long-term capital growth. The Investment Manager will seek to achieve the objectives of the Sub-Fund by investing primarily in companies domiciled or listed in the European geographical area. Investment selection is performed with particular emphasis on securities of listed European companies through a relatively concentrated portfolio chosen on the basis of outlook for those companies rather than on a country or sector basis. The Sub-Fund may invest at all times at least 75% of its total assets in companies which are domiciled or carry out a large portion of their economic activity in the European geographical area. Attention to the investor who are tax resident in France is made on the eligibility of the Sub-Fund to the French PEA account, meaning that the Sub-Fund is permanently invested for a minimum of 75% in securities or right eligible to the PEA (for indicative purpose, at the date of the Offering Memorandum, the Sub-Fund shall invest a minimum of 75% in equities or rights issued by companies having their registered office in the European Economic Area, excluding Liechtenstein). There is no formal restriction on the proportion of the Sub-Fund s assets that can be invested in and/or exposed to any one particular market or sector. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For hedging and efficient portfolio management purposes, this Sub-Fund may use derivative instruments within the limits set forth in the section Investment Restrictions. The Investment Manager for the Framlington Europe Opportunities is AXA Investment Managers Paris. The Reference Currency of the Sub-Fund is EUR. AXA World Funds Framlington Health - Reference Currency USD The objective of Framlington Health is to achieve long term capital growth. The Investment Manager will seek to achieve the objectives of the Sub-Fund by investing permanently at least two thirds of the total assets of the Sub-Fund in equities and equity related instruments issued by companies engaged in healthcare and medical services and product worldwide. Investments will be in producers of pharmaceuticals, biotechnology firms, medical device and instrument manufacturers, distributors of healthcare products, care providers and managers and other healthcare services companies. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For hedging and efficient portfolio management purposes, this Sub-Fund may use derivative instruments within the limits set forth in the section Investment Restrictions. The Investment Manager for the Framlington Health is AXA Investment Managers UK Limited, UK. The Reference Currency of the Sub-Fund is USD. AXA World Funds Framlington Europe Real Estate Securities - Reference Currency EUR The objective of Framlington Europe Real Estate Securities is to achieve long-term capital growth. The Sub-Fund will seek to achieve its objectives by investing permanently at least two thirds of the total assets of the Sub-Fund in transferable securities issued by companies, engaged in the real estate industry, domiciled or which exercise the preponderant part of their economic activities in Europe. 3

This strategy combines the bottom-up research process which aims for a strict selection of securities and to a lesser extent the top-down method in view of geographical asset allocation. The Sub-Fund's portfolio is invested in listed securities of the real estate industry and which are mainly negotiated on Regulated Markets in the Member States. On an ancillary basis, investments may be made on markets outside the EU. Notwithstanding the limits set forth in the section "Investment Restrictions" of the Offering Memorandum, the Sub-Fund may not invest more than 5% of its net assets in UCITS and/or other UCI. For hedging and efficient portfolio management purposes, this Sub-Fund may also expose itself to such companies through the use of derivative instruments within the limits set forth in the section Investment Restrictions. The Investment Manager for the Framlington Europe Real Estate Securities is AXA Investment Managers Paris. The Reference Currency of the Sub-Fund is EUR. AXA World Funds Framlington Global Real Estate Securities - Reference Currency EUR The objective of Framlington Global Real Estate Securities is to achieve long term capital growth. The Sub-Fund will seek to achieve its objectives by permanently investing at least two thirds of the total assets of the Sub-Fund in transferable securities issued by companies worldwide engaged in the real estate industry. This strategy combines a bottom-up research process which aims at selecting securities and to a lesser extent a top-down approach in view of geographical and thematic asset allocation. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For hedging and efficient portfolio management purposes, this Sub-Fund may also expose itself to equities, equity related securities, bonds, any fixed income instruments, indexes and currencies, through the use of derivative instruments within the limits set forth in the section Investment Restrictions. The Investment Manager for the Framlington Global Real Estate Securities is AXA Investment Managers Paris. The Reference Currency of the Sub-Fund is EUR. AXA World Funds Framlington Euro Relative Value - Reference Currency EUR The objective of Framlington Euro Relative Value is to achieve long-term capital growth. The Investment Manager will seek to achieve the objectives of the Sub-Fund by investing in all cap companies, principally in large and medium sized companies based in the Euro zone and not more than 10% of the assets of the Sub-Fund in companies not based in the Euro zone. The Investment Manager will invest at all times at least 66% of the total assets of the Sub-Fund in equities denominated in Euro. The Sub-Fund may invest not more than one third of its assets in Money Market Instruments and up to 10% of its assets in convertible and straight bonds, including, but not limited to, sovereign debt securities that might be issued by or guaranteed by any single country (including its government a public or local authority of that country) with a credit rating below investment grade and/or unrated. There is no formal restriction on the proportion of the Sub-Fund's assets that can be invested in and/or exposed to any one particular market. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. 4

For hedging and efficient portfolio management purposes, this Sub-Fund may use derivative instruments within the limits set forth in the section Investment Restrictions. The Investment Manager for the Framlington Euro Relative Value is AXA Investment Managers Paris. The Reference Currency of the Sub-Fund is EUR. AXA World Funds Framlington Global Convertibles - Reference Currency EUR The objective of Framlington Global Convertibles is to achieve capital growth by investing in convertible securities markets. The Investment Manager will seek to achieve the objectives of Framlington Global Convertibles by investing at all times at least two thirds of its total assets in convertible securities from issuers located anywhere in the world. The convertible securities selection will be focused on fundamental criteria (equity value and credit rating of the securities), the issuer s credit rating and on convertible securities that the Investment Manager has identified as undervalued. There is no formal restriction on the proportion of the Sub-Fund s assets that can be invested in and/or exposed to any one particular market or sector. The Sub-Fund will invest at least 51% in investment grade convertible securities, taking into account that the Sub-Fund may invest up to 49% in securities rated sub-investment grade. Investment grade securities will be rated at least BBB- by Standard & Poor s or equivalent rating by Moody s or Fitch or if unrated, then deemed to be so by the Investment Manager. Sub-investment grade securities will be rated between BB+ and B- by Standard & Poor s or equivalent rating by Moody s or Fitch or if unrated then deemed to be so by the Investment Manager. In case of downgrade below B- by Standard & Poor s or equivalent rating by Moody s or Fitch or if unrated then deemed to be so by the Investment Manager, securities will be sold within 6 months. If two different ratings of rating agencies exist, the lower rating will be considered, if more than two different ratings of rating agencies exist, the second highest rating will be considered. The Sub-Fund will invest in convertible bonds of which the underlying shares might be issued by all capitalizations of any economic sector. The Sub-Fund may invest up to 1/3 of the total assets in sovereign debt securities but it is not intended that the Sub-Fund will invest more than 10% of its net asset value in securities issued by or guaranteed by any single country (including its government, a public or local authority of that country) with a credit rating below investment grade (as defined above). The Sub-Fund may also invest in listed equity, equity related securities and not more than one third of its assets in Money Market Instruments. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For efficient portfolio management and both for hedging and investment purposes, this Sub-Fund may also expose itself to equities, equity related securities, bonds, any fixed income instruments and indexes, through the use of derivative instruments within the limits set forth in the section Investment Restrictions. The Sub-Funds shall invest in listed or Over the Counter (OTC) financial derivatives instrument including, but not limited to, options, swaps, credit derivatives, futures and warrants. Under no circumstances shall these operations cause the Sub-Fund to diverge from its investment objective. The Sub-Fund may also hedge against any currencies, through the use of listed or OTC derivative instruments within the limits set forth in the section Investment Restrictions. The Sub-Fund, however, is not using financial derivative instruments extensively for investment purposes. The Investment Manager will also hedge part of the currency risks. The Investment Manager for the Framlington Global Convertibles is AXA Investment Managers Paris. 5

The Reference Currency of the Sub-Fund is EUR. AXA World Funds Framlington Emerging Markets - Reference Currency USD The objective of Framlington Emerging Markets is to achieve long term capital growth. The Investment Manager will seek to achieve the objectives of the Sub-Fund by investing at all times at least two thirds of its total assets in equities and equity related instruments issued by companies domiciled or which exercise the preponderant part of their economic activities in emerging markets. Investment is made in developing countries in companies which, in the Investment Manager s opinion, show above average profitability, management quality and growth. Emerging market countries are defined as follows: (i) countries that are generally considered low or middle income countries by the World Bank and (ii) countries which are included in any recognized emerging market index. The Sub-Fund may invest not more than one third of its total assets in Money Market Instruments and up to 10% of its assets in convertible and straight bonds, including, but not limited to, sovereign debt securities that might be issued by or guaranteed by any single country (including its government a public or local authority of that country) with a credit rating below investment grade and/or unrated. There is almost no formal restriction on the proportion of the Sub-Fund s assets that can be invested in and/or exposed to any one particular market. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For hedging and efficient portfolio management purpose, this Sub-Fund may use derivative instruments within the limits set forth in the section Investment Restrictions. Under no circumstances shall these operations cause the Sub-Fund to diverge from its investment objective. The Investment Manager for the Framlington Emerging Markets is AXA Investment Managers UK Limited, UK. The Reference Currency of the Sub-Fund is USD. AXA World Funds Framlington American Growth - Reference Currency USD The objective of Framlington American Growth is to achieve long term capital growth. The Investment Manager will seek to achieve the objectives of the Sub-Fund by investing at all times at least two thirds of its total assets in equities and equity related instruments issued by all cap companies domiciled or which exercise the preponderant part of their economic activities in the Americas, including the US, Canada and Mexico, which, in the Investment Manager s opinion, show above average profitability, management quality and growth. The Sub-Fund may invest not more than one third of its total assets in Money Market Instruments and up to 10% of its assets in convertible and straight bonds, including, but not limited to, sovereign debt securities that might be issued by or guaranteed by any single country (including its government a public or local authority of that country) with a credit rating below investment grade and/or unrated.. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For hedging and efficient portfolio management purpose, this Sub-Fund may use derivative instruments within the limits set forth in the section Investment Restrictions. Under no circumstances shall these operations cause the Sub-Fund to diverge from its investment objective. The Investment Manager for the Framlington American Growth is AXA Investment Managers UK Limited, UK. The Reference Currency of the Sub-Fund is USD. 6

AXA World Funds Global Inflation Bonds - Reference Currency EUR The objective of the Global Inflation Bonds is to seek performance through dynamic exposure mainly to inflation-linked bonds issued in the OECD. The Investment Manager will seek to achieve the objectives of the Sub-Fund by investing at all times at least two thirds of its total assets in a diversified portfolio consisting of inflation-linked bonds issued by OECD governments, corporations or public institutions worldwide. The Investment Manager may invest the remaining assets in any other debt securities which are not inflation-linked to reduce its exposure to inflation-linked bonds in anticipation of periods of lower inflation. The Sub-Fund may invest 100% of the total assets in sovereign debt securities but it is not intended that the Sub-Fund will invest more than 10% of its net asset value in securities issued by or guaranteed by any single country (including its government, a public or local authority of that country) with a credit rating below investment grade and/or unrated. Furthermore, the Sub-Fund may invest not more than one third of its assets in Money Market Instruments. The Sub-Fund will be managed with an interest rate sensitivity ranging from 5 to 15 years. The sensitivity is an indicator measuring the impact of a variation of 1% of the market interest rate on the value of the Sub- Fund. There is no formal restriction on the proportion of the Sub-Fund's assets that can be invested in and/or exposed to any one particular market. Notwithstanding the limits set forth in the sections "Securities Lending Activities" and Repurchase Agreement Transactions of the Hong Kong Offering Memorandum, each time the Sub-Fund enters into transactions pursuant to which it will borrow bonds via repurchase agreements in order to sell them, such sales may not engage more than 10% of its net assets. For the avoidance of doubt, the transactions referred to above may not be considered as short selling within the meaning of Article 52 of the Law of 2010. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For both efficient portfolio management and extensively investment purposes, the Sub-Fund may gain exposure to or hedge against any fixed income instruments and indexes, through the use of listed or Over The Counter (OTC) derivative instruments within the limits set forth in the section Investment Restrictions. In order to meet the investment objectives the Sub-Fund may make extensive use of various financial derivative instruments to reduce risks or costs or to generate additional capital or income. Under no circumstances shall these operations cause the Sub-Fund to diverge from its investment objective. The Sub-Fund may also hedge against any currencies, through the use of listed or OTC derivative instruments within the limits set forth in the section Investment Restrictions. No specific strategy relating to financial derivative instruments is adopted by the Management Company and the Investment Manager of the Sub-Fund. The global exposure of the Sub-Fund is up to 200% of the net asset value of the Sub-Fund. As part of this, the exposure resulting from the use of financial derivative instruments, i.e. the maximum level of leverage, is up to 100% of the net asset value of the Sub-Fund, and is calculated by the commitment methodology (including netting and hedging arrangements). For clarification, as the Sub-Fund may borrow up to 10% of its net asset value on a temporary basis, and if this is included in the calculation of global exposure, the global risk may not exceed 210% of the net asset value of the Sub-Fund. The Investment Manager for the Global Inflation Bonds is AXA Investment Managers Paris. The Reference Currency of the Sub-Fund is EUR. 7

AXA World Funds Universal Inflation Bonds - Reference Currency EUR The objective of the Universal Inflation Bonds is to seek performance through dynamic exposure mainly to inflation-linked bonds issued in the OECD and emerging markets. The Investment Manager will seek to achieve the objectives of the Sub-Fund by investing at all times at least two thirds of its total assets in inflation-linked bonds issued by governments, corporations or public institutions worldwide seeking to benefit from the rising wealth of emerging economies through a diversified approach. The Investment Manager may invest the remaining assets in other debt securities which are not inflation-linked to reduce its exposure to inflation-linked bonds in anticipation of periods of lower inflation. The Sub-Fund may invest 100% of the total assets in sovereign debt securities but it is not intended that the Sub-Fund will invest more than 10% of its net asset value in securities issued by or guaranteed by any single country (including its government, a public or local authority of that country) with a credit rating below investment grade and/or unrated. Furthermore, the Sub-Fund may invest not more than one third of its assets in Money Market Instruments. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For both efficient portfolio management and extensively investment purposes, the Sub-Fund may gain exposure to or hedge against any fixed income instruments and indexes, through the use of listed or Over The Counter (OTC) derivative instruments within the limits set forth in the section Investment Restrictions. In order to meet the investment objectives the Sub-Fund may make extensive use of various financial derivative instruments to reduce risks or costs or to generate additional capital or income. Under no circumstances shall these operations cause the Sub-Fund to diverge from its investment objective. The Sub-Fund may also hedge against any currencies, through the use of listed or OTC derivative instruments within the limits set forth in the section Investment Restrictions. No specific strategy relating to financial derivative instruments is adopted by the Management Company and the Investment Manager of the Sub-Fund. The global exposure of the Sub-Fund is up to 200% of the net asset value of the Sub-Fund. As part of this, the exposure resulting from the use of financial derivative instruments, i.e. the maximum level of leverage, is up to 100% of the net asset value of the Sub-Fund, and is calculated by the commitment methodology (including netting and hedging arrangements). For clarification, as the Sub-Fund may borrow up to 10% of its net asset value on a temporary basis, and if this is included in the calculation of global exposure, the global risk may not exceed 210% of the net asset value of the Sub-Fund. The Investment Manager for the Universal Inflation Bonds is AXA Investment Managers Paris. The Reference Currency of the Sub-Fund is USD. AXA World Funds US High Yield Bonds - Reference Currency USD The objective of the US High Yield Bonds is to achieve a high income and long term capital growth by investing in fixed and floating rate securities. The Investment Manager will seek to achieve the objective of the Sub-Fund by investing permanently at least two thirds of the total assets of the Sub-Fund in a broadly diversified portfolio of fixed income transferable debt securities issued by public or private companies domiciled in the United States and rated non-investment grade (i.e., rated lower than BBB- by Standard & Poor s or lower than Baa3 by Moody s or, if unrated, then deemed to be so by the Investment Manager). The Investment Manager will not invest more than one third of the assets of the Sub-Fund in securities domiciled or listed in Canadian or European markets. The Sub-Fund may invest up to 1/3 of the total assets in sovereign debt securities but it is not intended that the Sub-Fund will invest more than 10% of its net asset value in securities issued by or guaranteed by any single country (including its government, a public or local authority of that country) with a credit rating below investment grade and/or unrated. 8

The Sub-Fund may invest not more than one third of its total assets in Money Market Instruments, not more than one quarter of its assets in convertible securities, and not more than one tenth of its assets in equity. Notwithstanding the limits set forth in the section "Investment Restrictions" the Sub-Fund will not invest more than 10% of its net assets in UCITS and/or other UCI. For efficient portfolio management and both for hedging and investment purposes, this Sub-Fund may also expose or hedge itself to any fixed income instruments and indexes, through the use of derivative instruments within the limits set forth in the section Investment Restrictions. The Sub-Funds shall invest in listed or Over the Counter (OTC) financial derivatives instrument including, but not limited to, options, swaps, credit derivatives (such as credit default swap), futures, Forex forwards and warrants. The Sub-Fund may enter into CDS index transactions having or not a rebalancing of the underlying index. In case of rebalancing of the underlying index, the costs will not be significant. The underlying index of such CDS index transactions may have a single component exceeding 20% with a maximum up to 35% in case of exceptional market conditions. Under no circumstances shall these operations cause the Sub-Fund to diverge from its investment objective. The Sub-Fund may also hedge against any currencies, through the use of listed or OTC derivative instruments within the limits set forth in the section Investment Restrictions. The Sub-Fund, however, is not using financial derivative instruments extensively for investment purposes. The Investment Manager for the US High Yield Bonds is AXA Investment Managers Inc., USA. The Reference Currency of the Sub-Fund is USD. 9

2. Risk Management Process and General Risk Consideration RISK MANAGEMENT PROCESS In accordance with the Law of 2010 and the applicable regulations, the Fund shall use a risk-management process which enables it to assess the exposure of each Sub-Fund to market, liquidity and counterparty risks, and to all other risks, including operational risks, which are material for the Sub-Funds. As part of the risk management process, the Fund uses the commitment approach to monitor and measure the global exposure of each Sub-Fund unless otherwise provided for under the relevant Specific Sub-Fund Information. This approach measures the global exposure related to positions on financial derivative instruments ( FDIs ) and other efficient portfolio management techniques which may not exceed the total net value of the portfolio of the relevant Sub-Fund. Organization of the control levels and description of the teams The Global Risk Management (GRM) within the AXA IM Group is a global and fully integrated function, with also local representatives contributing to the Global Risk management framework of the Company. This function is the main organ for Risk management but other departments contribute to the global control structure of the company. This is the case for Internal Control, Compliance, Audit, Trade Management, Portfolio Controlling or Investment Guidelines monitoring. The chart below presents the organization of the different levels of controls within AXA IM. A high level description of the teams which form part of the Global Control Infrastructure for Axa Funds Management s funds is presented below: 10

1) Global Risk Management 1.1) Senior Expertise Risk Managers (SERM) Senior Expertise Risk Managers act as independent risk managers on specific expertise. They provide insight on key risks to Global Risk Management and Expertise Investment Management teams across AXA IM. 1.2) Investment Risk Analysis and Standards (IRAS) Investment Risk Analysis and Standards is responsible for the identification, analysis, mitigation and second level, (second degree) control of Investment and Modeling Risks throughout the Fixed Income, Equity, Structured Finance, Funds of Hedge Fund and Investment Solutions Expertise. Investment Risk Analysis and Standards is also responsible for the definition and validation of investment risk methodologies and valuation models used by AXA IM Group. 1.3) Global Operations Risk Operational Risk Management is responsible for the identification, monitoring, reporting, assessment and second level, second degree control of operational risks throughout the organization, as well as consequent mitigations recommendation and monitoring. 2) Operational Support & Service Management This section does not present all the teams of the department but mainly focuses on teams dealing with daily controls. 2.1) Portfolio Control The portfolio control team checks portfolio inventories and NAVs, performs checks on OTC derivatives transactions and monitors the level of service delivered by providers on asset servicing. The portfolio control team also provides risk report production for internal guidelines. 2.2) Third Party Relationship Management Fund s Administration, Fund Accounting and Reporting activities are outsourced to State Street Corporation. The monitoring of these activities is conducted by one department named OSSM - Operational Support & Service Management. The department is responsible for managing service level agreements (SLA) with major service providers and to oversee their quality of service and improve the transversal process set up. OSSM s primary function is to serve as the main liaison for all day to day operational matters between teams from AXA IM and external Fund Administrators (mainly State Street) and has responsibility to resolve issues identified and escalated by the Fund Administrators and escalate issues to AXA IM s senior management. 2.3) Trade Management Trade Managers are responsible for flawless trade in and outflows between the different parties (trades, brokers, middle office and custodians). 2.4) Investment Guidelines The Investment Guidelines team (IG) is in charge of the monitoring of all applicable restrictions on the funds under management, of the rules implementation and of the development of processes. The purpose is the follow-up and the regularization of breaches of regulatory guidelines, client guidelines and internal limits set-up by the AXA IM Group or Axa Funds Management (hereinafter AFM ). The investment constraints are monitored at two levels, by the sub-investment manager and by the third party service providers (regulatory and prospectus constraints) which sends alerts to the Investment Guidelines team that then monitor and do a follow up. 11

3) Legal, Compliance and Internal Control 3.1) Compliance Each Compliance department is integrated in the AXA IM Group Global Compliance Function which is responsible for setting up standards and overseeing regulatory matters. This function is headed by the Global Head of Compliance and Internal Control. Compliance teams carry out recurrent and periodic controls, but are also involved upstream in the launch of new businesses or products and in providing directions or advice to the business. 3.2) Internal Control The Internal Control functions are performed at local level by each AXA IM Investment Management entities in order to meet regulatory, clients and management requirements. Each team dealing with Internal Control reports to the Global Head of Compliance and Internal Control. The general mission of Internal Control is to have an extensive view of all business activities within AXA IM so as to identify & highlight to management any gaps and deficiencies between expected/required practices and current environment. 3.3) Legal The legal department is organized around two main expertises: Legal Corporate and Legal Business. The Legal Corporate department deals with the legal affairs of the AXA IM Group and its subsidiaries. Within AFM organization, this department provides support concerning Management Company and SICAVs governance. The Legal Business department deals with funds legal affairs. This department coordinates the elaboration of all legal documents relative to funds (contracts, prospectuses, ISDA, IMA ) and coordinates registration works. 4) Global Internal Audit (GIA) The primary mission of GIA is to provide independent and objective assurance to the Board of Directors of AXA IM and its Audit Committee on the comprehensiveness and effectiveness of internal controls within the AXA IM Group. AXA IM GIA missions extend to all the subsidiaries, businesses, activities and initiatives of the AXA IM Group. GIA will assist AXA IM to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, management and governance processes. Where necessary, it will make recommendations designed to strengthen and improve control environments. GIA undertakes missions on strategic, technical and management issues to evaluate assumptions and achievement of objectives, strategies, and plans and whether management are efficiently and effectively carrying out their functions of planning, organizing, directing and controlling. 5) Locally, within AXA Funds Management S.A. AFM has permanent interactions with all the departments and functions presented above. GRM is purely a global function with employees in all locations. For risk matters, AFM does not formally report to the Head of GRM but acts as the entry point in Luxembourg and as a coordinator with the different global and local teams. Concerning operational risk and BCP Management, these functions are directly managed in Luxembourg with the support of local and global teams. For risk matters, AFM reports to the Board of Directors of the Management Company or the SICAVs it manages. Some statistics and indicators are presented, together with ad-hoc specific subjects (projects, issues, changes of processes and regulation changes, etc ). Meanwhile, a representative of GRM may, from time to time, present subjects or give updates on risk matters to the Board of Directors. For any risk matters surrounding a fund managed by AFM, AFM may be invited to participate to any Global Committee. 12

Overview of the controls in place The below table summarises the controls in place for Luxembourg UCITS : Risks in scope Risk of breach of regulatory investment restrictions or non compliance with the fund s investment policy, including overdraft monitoring Party responsible for controlling these risks 1 st level Investment Managers 2d level, 1 st degree Administrative Agent Investment Guidelines 2 nd level, 2 nd degree: AXA Funds Management Key controls performed by the entity responsible for controlling such risk All controls in front office system to prevent or monitor constraints. Post-compliance check: investment restriction breaches are communicated on a daily basis to AFM, and AXA IM Investment Guidelines team by the Administrative Agent. Then Investment Guidelines team monitors the breaches and arrange for regularization plan with Front Office functions. Coordination of the breaches resolution and escalation in case of delay in the regularization. Validation of impact calculation and coordination of compensations. Frequency of controls Daily Daily On and weekly follow-up Board s [and Management Company s / Management of the Fund s] monitoring procedures and controls Organization of an incident committee if the breach imply a negative impact above 20 000 Euro. AFM participates systematically when the breach concerns the Luxembourg Funds. Escalation to the incident committee and the Board when a breach is not resolved in a timely manner. Compliance report presented during Board Meetings which includes an overview and statistics about breaches and compensation occurred during the previous period. Frequency of monitoring controls On Daily Quarterly Yearly 1 st level: Investment Managers 2 nd level, 1 st degree: Portfolio Controllers Illiquid and staled price report sent weekly and monthly by the administrator to AFM, Portfolios Controllers and Fund Managers. Ensure that price updates are received in a timely manner. Continuous Weekly Monthly Continuous Stale prices 2 nd level, 2 nd degree: AXA Funds Management Global Risk Management Prepare statistics based on the report from the Funds Administrators. Chase the Fund Managers and Portfolio Controllers to get prices update from brokers and escalate to the Board. There is a Price Source Agreement (PSA) in place with the third party responsible for the fund accounting which outlines how all our securities should be priced. If however, a security cannot be priced using the PSA, theses are considered as exceptions and price source is obtained by AXA IM from an external provider/source. On On Escalation to the Board for fair valuation process if necessary. Compliance report presented during Board Meetings which includes an overview and statistics about stale prices. At each Board Meeting Liquidity Risk 1 st level: Investment Managers Asset and portfolio liquidity is part of the asset selection and portfolio allocation processes. Continuous Escalation to senior Risk committees in case of breaches and periodic status. 13 Under definition

Fund Managers are informed about daily Net Inflows and Outflows by the Transfer Agent. Daily 2 nd level, 1 st degree: Global Risk Management OSSM In case of big outflows, the Fund Manager has to assess if this can be met in one shot, or if the application of the gating process is necessary (scaling down to the next applicable NAV the part of the outflows above 10% of the AuM of the concerned fund). The Liquidity Risk is monitored by an in-house tool called Liquidity Portfolio Score (LIPS). The objective is to score the ability of a fund to meet its needs in cash. The LIPS represents the mismatch between its needs and its ability to generate cash. A score of 0 means no liquidity issue (i.e. all positions can be sold in 1 day) whereas a score of 250 means that the fund totally illiquid (i.e. no position can be sold). On Continuous Reporting to the Board on significant issues At each Board Meeting AXA Funds Management 2 nd level, 2 nd degree Global Risk Management After discussion with the Fund Managers, calculates and applies the gating process and monitors the correct application on the next applicable NAVs. Investigates the roots of any breach, monitors and follow up scenarios. Reporting of significant issues to senior Risk committees. On On AXA Funds Management Coordination of the breaches resolution and escalation in case of delay in the regularization. Reporting of breaches to the Board. On Coverage rules 1 st level: Investment Manager 2 nd level, 1 st degree Fund administrator Investement Guidelines 2 nd level, 2 nd degree Global Risk Management The Fund Manager has to ensure that the funds continuously hold sufficient cash and liquid asset to face the derivatives instrument commitment. SSBL monitors the coverage rule on a daily basis. In case of breaches an alert is immediately sent to AFM and AXA IM Investment Guidelines. The latter will then monitor the regularization of the breach with the Fund Manager. In case of breach, further analysis can be needed. Periodic update to senior Risk committees. Continuous Daily On Escalation to senior Risk committees in case of breaches and periodic status. Reporting to the Board on significant issues On At each Board Meeting AXA Funds Management Coordination of the breaches resolution and escalation in case of delay in the regularization. Reporting of breaches to the Board On 14

Market risk 1 st level Investment Manager 2 nd level, 1 st degree Investment Guidelines Portfolio Controllers 2 nd level, 2 nd degree Global Risk Management The investment Manager takes investment decisions in regards to market risks the fund is exposed to. A system of internal rules and indicators has been set by GRM to monitor the significant market risks the fund is exposed to. This gives support the investment manager in monitoring the market risks. Monitoring of the systems limits and coordination of the regularization plans. For the purpose of market risk management and monitoring, GRM proposes, in coordination with the Investment Teams, investment guidelines at product level. Continuous On Escalation to senior Risk committees in case of breaches and periodic status. Reporting to the Board on significant issues. Weekly and on On The guidelines cover a wide range of risks and indicators, such as (but not limited to): Leverage Independent valuation checks of complex OTC derivatives Stress-testing Tracking error Significant breaches are reported by GRM to senior Risk committees. On Credit / counterparty risk AXA Funds Management 1 st level Investment Manager Stock lending agent 2 nd level, 1 st degree: Investment Guidelines 2 nd level, 2nd degree: Global Risk Follow up the adequate resolution of deficiencies identified. Reporting to the Board Based on rules and standards defined by GRM, monitoring of exposure to issuer and counterparties. The list of authorized counterparties is defined by GRM. Monitoring of limits set forth by GRM and coordination of remediation plans. Credit risk is the aggregation of issuer risk and counterparty risk. GRM: Assess risk of new issuers and counterparties Define thresholds and limits Analyse issuer and counterparty exposures reaching or exceeding thresholds and limits and propose remediation plans Significant breaches are reported by GRM to senior risk committees. Continuous On Counterparty risk (monthly monitoring) Credit Risk (daily monitoring) On Escalation to senior Risk committees in case of breaches and periodic status. Reporting to the Board on significant issues. Weekly and on On 15

AXA Funds Management Follow up the adequate resolution of deficiencies identified. Reporting to the Board. Settlement risk 1 st level: Investment Manager and Trading Fund Administrator 2 nd level, 1 st degree: Trade Manager Transfer Agent Fund administrator and Custodian Ensure that settlement cycles of the assets are in line with funds ones and deal with counterparties approved by GRM. Manages Trade matching with counterpart and instructs the trade for settlement to the funds custodian Monitors failed trades and coordinates with the Fund Administrator in securing the timely market settlement Monitor and report and manage late payment of subscriptions. Continuous On Daily Failed and Late trade reports are part of the MIS pack produced by the fund administrator, available to senior Management Significant cases are reported to the board Monthly On Operational Risk 2 nd level, 2 nd degree: AXA Funds Management 1 st level: Investment Managers, support functions, Middle Office, Fund Administrator, Transfer Agent, Custodian, 2 nd level, 1 st degree: Global New Business Committee Portfolio Controllers, Fund administrator, Transfer Agent, 2 nd level, 2 nd degree: Operational Risk Manages and report late of failed settlement on the asset side. Monitor and manages significant late or failed settlement and reporting to the boarding of significant issues All departments and involved parties should have the adequate process to identify, monitor and resolve operational issues. In case of issues, descriptive memos are written to the attention of AFM and AXA IM Operational Risk department. When a new fund is launched or modified in such a way that it requires a new process or a change of process, operational risk impacts are assessed. Analysis of issues, impact assessment and reporting to Operational Risk and AFM. Monitors and coordinates resolution of operational issues. Yearly consolidated mapping exercise at company level and reporting to senior management. Monthly On Continuous On On On and yearly Organization of an incident committee if the breach imply a negative impact above 20 000 Euro. AFM participates systematically when the issue concerns Luxembourg Funds. Escalation to the incident committee and the Board when a breach is not resolved in a timely manner. Compliance report presented during Board Meetings which includes a description of significant issues. On Daily Quarterly Yearly AXA Funds Management Monitors and coordinates resolution of operational issues. Reporting to senior management and to the Board. On 16

GENERAL RISK CONSIDERATIONS As for any financial investment, potential investors should be aware that the value of the assets of the Sub-Funds may strongly fluctuate. The Fund does not guarantee Shareholders that they will not suffer losses resulting from their investments. Equity Sub-Funds are generally more volatile than Bond Sub-Funds and Mixed Sub-Funds but may also achieve greater returns. Investors should be aware that equity-linked securities may comprise warrants and should refer below for risk considerations linked to warrants. All Sub-Funds are potentially exposed to the general risk referred below. Risks generated by the use of hedging and income enhancement strategies may also apply to all Sub-Funds. Market risk Some of the markets on which a Sub-Fund may invest may prove at times to be highly volatile or insufficiently liquid. This may affect significantly the market price of such a Sub-Fund s securities and, therefore its Net Asset Value. Risk of loss of capital Except where the Offering Memorandum explicitly references the existence of a capital guarantee at a given date, and subject to the terms thereof, no guarantee is made or supplied to investors with respect to the restitution of their initial or subsequent investments in a Sub-Fund. Loss of capital may be due to direct exposure, counterparty exposure or indirect exposure (e.g. exposure to underlying assets through the use of derivative instruments, securities lending and borrowing or repurchase agreement). Equity risks Shares prices on equity markets may fluctuate namely pursuant to investor's expectations or anticipations, causing high potential volatility risk. Volatility on equity markets has historically been much greater than the volatility of fixed income markets. Should the price of Shares fall within the Sub-Fund s portfolio, the Net Asset Value of the Sub-Fund will also fall. Foreign exchange/currency risk at portfolio level Many Sub-Funds invest in foreign securities, i.e. securities denominated in currencies different from the Reference Currency in which Sub-Funds are denominated. Movements of foreign exchange rates affect the value of securities held by such a Sub-Fund, as expressed in the Sub-Fund s Reference Currency, and bring additional volatility. If the currency in which a security is denominated appreciates in relation to the Reference Currency of the Sub-Fund, the exchange value of the security in the Reference Currency will appreciate; conversely, a depreciation of the denomination currency will lead to a depreciation in the exchange value of the security and may adversely affect the Net Asset Value of the Sub-Fund. In the circumstances when the Investment Manager intends to hedge the currency exchange risk of a transaction, there is no guarantee that such hedging strategy will be effective and that such hedging be a perfect hedge. In adverse situation, the Sub-Fund may suffer significant losses. Foreign exchange/currency risks at Shares Classes level Many Sub-Funds have Share Classes denominated in currencies different from the Sub-Fund's Reference Currency. When the concerned Share Class is not hedged, its value follows fluctuations of the exchange rate between the Shares Class' currency and the Sub-Fund's Reference Currency. Therefore, this can generate additional volatility at Share Class level. In the circumstances when the Investment Manager intends to hedge the currency exchange risk of a share class, there is no guarantee that such hedging strategy will be effective and that such hedging be a perfect hedge. Interest Rates The market value of financial instruments and, therefore, the Net Asset Value of the concerned Sub-Funds may change in response to fluctuations in interest rates. Interest rate risk involves the risk that, when interest rates increase, the market value of fixed-income securities tends to decline. Conversely, when interest rates decline, the market value of fixed-income securities tends to increase. As a result, the Net Asset Value of the Sub-Funds may be adversely affected. Long-term fixed-income securities will normally have more price volatility because of this risk than short-term securities. 17