Perspectives 05.2010 EN

Macro Analysis Industrialized countries: a constrained economyAsset Allocation Companies doing better than governments?Expertise Focus Seeking absolutely positive performance

PErsPEctivEsMay 2010

Corporate and InveStment BankIng / invEstMEnt solutions / SpeCIalIzed FInanCIal ServICeS

www.am.natixis.com

Cover picture: © Manfred Steinbach / Shutterstock

Macroeconomic Analysis

Asset Allocation

Market Data

Overview of our international product range

News

Expertise FocusThis material has been prepared by Natixis Asset Management, a subsidiary of Natixis Global Asset Management. Natixis Asset Management is a French asset manager authorized by the Autorité des Marchés Financiers (Code 1200009, Agreement No. GP90009) and licensed to provide investment management services in the EU.

Publishing Director: F. LenoirEditorial Committee: T. Benoist, S. de Quelen,Ph. Le Mée, K. Massicot, R. Monclar, F. Nicolas, Ch. Point, Ch. Lacoste, JP. Snel, B. Thiery, Ph. WaechterCoordination - Writing: N. ClémotHead of design: F. Dupertuys Contributors: B. Boulay-Mégard, D. Levadoux

The funds mentioned in this material are not registered or authorized in all jurisdictions and may not be available to all investors in a jurisdiction. Natixis International Funds (Lux) I is organized as an investment company with variable capital under the laws of the Grand-Duchy of Luxembourg and is authorized by the financial regulator (the CSSF) as a UCITS. Natixis Global Associates S.A. is the management company of the Fund. The provision of this material does not constitute an offer of services, nor an offer or recommendation to purchase or sell shares in any financial instrument. Investors should consider the investment objectives, risks and expenses of any investment carefully before investing. In the case of a fund, these can be found in the fund’s prospectus or offering memorandum, which should be read carefully before investing. If you would like further information about any of the funds, including charges, expenses and risk considerations, contact the sender of this document or your financial advisor for a free prospectus, simplified prospectus, copy of the Articles of Incorporation, the semi and annual reports, and/ or other materials and translations that are relevant to your jurisdiction. Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time. Performance data shown represents past performance and is not a guarantee of future results. More recent performance may be lower or higher. Principal value and returns fluctuate over time (including as a result of currency fluctuations) so that shares, when redeemed, will be worth more or less than their original cost. Performance shown is net of all fund expenses, but does not include the effect of sales charges or correspondent bank charges, and assumes reinvestment of distributions. If such charges were included, returns would have been lower. The analyses, opinions, and certain of the investment themes and processes referenced herein represent the views of the author(s) referenced as of the date indicated. These, as well as the portfolio holdings and characteristics shown, are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.

In certain cases, this material is provided by one of the Natixis Global Associates entities listed below, each of which is a subsidiary of Natixis Global Asset Management, the holding company of a diverse line-up of specialised investment management and distribution entities worldwide, each of which conduct any regulated activities only in and from the jurisdictions in which they are licensed or authorized. Their services and the products they manage are not available to all investors in all jurisdictions. Although Natixis Global Associates believes that the information provided in this material to be reliable, it does not guarantee the accuracy, adequacy, or completeness of such information. • In the UK: This material is provided by Natixis Global Associates UK Limited which is authorised and regulated by the UK Financial Services Authority (register no. 190258). This material is intended to be communicated to and/or directed at persons (1) in the United Kingdom, and should not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell securities in any other jurisdiction than the United Kingdom; and (2) who are authorised under the Financial Services and Markets Act 2000; or are high net worth businesses with called up share capital or net assets of at least £5 million or in the case of a trust assets of at least £10 million; or any other person to whom the

material may otherwise lawfully be distributed in accordance with the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or the (Promotion of Collective Investment Schemes) (Exemption) Order 2001 (the "Intended Recipients"). To the extent that this material is issued by Natixis Global Associates UK Limited, the fund, services or opinions referred to in this material are only available to the Intended Recipients and this material must not be relied nor acted upon by any other persons. Registered Address: Cannon Bridge House, 25 Dowgate Hill, London, EC4R 2YA. • In the E.U. (outside of Germany, Austria, Italy and the UK): This material is provided to the investment service provider or other Professional Client or Qualified Investor who has requested it by Natixis Global Associates S.A. or its branch office in France, Natixis Global Associates International. Natixis Global Associates S.A. is a Luxembourg management company that is authorized by the Commission de Surveillance du Secteur Financier and is incorporated under Luxembourg laws and registered under n. B 115843. Registered office of Natixis Global Associates S.A.: 2-8 Avenue Charles de Gaulle, L-1653 Luxembourg, Grand Duchy of Luxembourg. Registered office of Natixis Global Associates International (n.509 471 173 RCS Paris): 21 quai d'Austerlitz, 75013 Paris.• In Germany and Austria: This material is intended to be communicated to and/or directed at persons in Germany and Austria by Natixis Global Associates Germany GmbH, a tied agent of Natixis Global Associates UK Limited. In the case the fund(s) referenced within this material is/are not registered in Germany or Austria, this material is intended to be communicated to and/or directed at persons who are (a) lawfully authorized to receive this material under the provisions of § 2 (11) paragraph of the German Investment Act or (b) Qualified Investors as defined in Article 1 (1) 5a of the Austrian Capital Market Act (“Intended Recipients”). To the extent that this material is issued by Natixis Global Associates Germany GmbH, the fund, services or opinions referred to in this material are only available to the Intended Recipients and this material must not be relied or acted upon by any other person. Registered office of Natixis Global Associates Germany GmbH (Frankfurt am Main HRB 45540): Im Trutz Frankfurt 55, Westend Carrée, 7. Floor, Frankfurt am Main 60322, Germany. • In Italy: This material is provided to the investment service provider or other Professional Client or Qualified Investor who has requested it by Natixis Global Associates Italia SGR, S.p.A., an investment management company (“Societa’ di Gestione del Risparmio”) registered and regulated by the Bank of Italy (registration no. 119, code no. 15143.1). Registered office: Via San Clemente, 1 - 20122, Milan, Italy.• In Switzerland: This material is provided to Qualified Investors by Natixis Global Associates Switzerland Sàrl. Registered office: place de la Fusterie 12, 1204 Genève.• In the DIFC: This material is provided in and from the DIFC financial district by Natixis Global Associates Middle East, a branch of Natixis Global Associates UK Limited, which is regulated by the DFSA. Related financial products or services are only available to persons who have sufficient financial experience and understanding to participate in financial markets within the DIFC, and qualify as Professional Clients as defined by the DFSA. Registered office: PO Box. 118257, 5th Floor, Building 8, Gate Village, DIFC, Dubai, United Arab Emirates.

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LegaL information

ContactsProspectus and sales documents required for subscription are available on demand:

n Natixis Global Associates (Operations): [email protected] or CACEIS Luxembourg (Prime Transfer Agent): [email protected] (352) 47 67 70 78n or Natixis Asset Management (Clients servicing): [email protected]

3May 2010www.am.natixis.com

Editorial

PhiliPPe zaouatiHead of Business Development

Public debt and sovereign bonds are currently under the spotlight. The latest downgrades

of Greek and Portuguese bonds on April 27, and Spanish bonds on April 28(1), have aroused

serious concerns.

In terms of allocation, Franck Nicolas, Head of Global Asset Allocation & ALM, comments that

companies seem to be doing “better” than governments. Governments are finding it difficult

to inspire confidence in the financial markets, which regard certain situations concerning debt-

to-GDP ratios as particularly delicate, notably in the euro-zone.

In his monthly Macroeconomic Analysis, Philippe Waechter, Chief Economist, takes a close

look at the issues relating to public debt-to-GDP ratios. If governments are to eventually regain

some room for maneuver in managing the public finances, they will have to stabilize, then

reduce this ratio. According to Philippe Waechter, this will require radical changes in budgetary

policy and the adoption of strategies that will generate budget surpluses over the long term.

In order to ensure efficient allocation favoring promising asset classes, while at the same

time seeking to preserve asset values, Natixis Asset Management offers a selection of

complementary solutions for investors looking for new opportunities. The Expertise Focus

of this issue features Natixis Absolute Swap Arbitrage and Natixis Absolute Multistratégies.

Using proactive strategies tailored to specific investment universes, these two funds aim to

improve the overall risk/return profile of the portfolio in any market conditions. The funds offer

stringent risk management and target positive, regular performance, regardless of the market

environment.

As usual, you can also find the summary of Natixis Asset Management’s international offer

[pages 8 to 10 of this issue].

Enjoy reading it,

(1) Downgrades by Standard & Poor’s: Greece, from "BBB+" to "BB+", Portugal, from "A+" to "A-", and Spain, from "AA+" to "AA".

Natixis Asset Management: the french leader in SRI Natixis AM, a pioneer for over 25 years in the field of Socially Responsible Investment (SRI), headed the Novethic(1) ranking of investment companies by assets under management in open-ended SRI funds distributed in France(2). Novethic says that Natixis AM is the first French player to pass the 10 billion euro of assets under management in this asset class. This ranking rewards a specialized and diversified expertise covering the main types of SRI strategies: ESG selection, thematic funds and solidarity funds. Convinced of the relevance of these approaches, for many

years Natixis AM has incorporated SRI into its investment process. And this is why it has developed the Natixis Impact range, a range of SRI funds covering all asset classes.

AWARDS

(1) Novethic: As part of Caisse des Dépôts, Novethic is the leading research center in France on Corporate Social Responsibility (CSR) and Socially Responsible Investment (SRI), as well as a sustainable development media expert. Since 2001, Novethic conducts studies and organises events to encourage financial actors to integrate Environmental, Social and Governance (ESG) factors in their investment activities (www.novethic.com). (2) Source: Novethic - SRI Essentials [available in French only], April/May 2010.

Past performance or reference to any rankings or awards cannot be interpreted as indicating the future performance of a fund or its manager. Further information on www.am.natixis.com [Our investment expertise > SRI]

4 May 2010 www.am.natixis.com

Macro Analysis

n Fiscal action against the crisis and deficits The result of fiscal action was the appearance of considerable public deficits with, as corollary, a hefty increase of the public debt.

This dynamic is desirable and acceptable in so far as economic activity appears fragile and the credibility of the governments implementing them is not affected.

Despite the often evoked examples from the past (1937-38 in the U.S.), which suggest that one should “make haste slowly” in reversing these strategies, one should actually quickly think of how to control them.

Basically, there are two questions which arise:

n the signs of improvement of the economic cycle lead to curtailing of fiscal support (this point is still debatable given the fragility of the recovery, especially in Europe);

n however, and this is the other side, hereafter the public debt, expressed as a percentage of GDP, will be very high, limiting the governments’ capacity to intervene should there be new negative shock to economic activity.

A third point, linked to the change in population structure, must be mentioned here, to further expand on these two issues: The aging of the population and financing of the retirements resulting thereof will also affect the profile of the public finances.

n Fiscal policies: An essential about-faceThe reversal of public debt tendencies came about due to a radical change in fiscal policies. Taking account of the past debt, as well as the inertia of public finances and coming retirement maturity dates will require radical measures to stabilize then reduce the ratio of the public debt to the GDP. To achieve this, it will be necessary to reconsider fiscal policy in order to obtain a sustainable surplus primary fiscal balance(1).

The difficulty resides between the two terms: “sustainable” and “surplus”. In a report published in March of 2010, the Bank for International Settlements (BIS) indicated the order of magnitude for many industrialized countries. Based on assumed growth, the interest rate on the public debt, and taking into account various elements (population structure, etc), the authors discussed the strategy to be implemented, in order to return in 2011 to the level of indebtedness for 2007.

Inertia of public finances implies that it is difficult to rapidly and sustainably shift the orientation of public finances at too restrictive an angle. Thus time is necessary to stabilize the situation before reversing it.

France’s case is interesting as an illustration. The authors provide projections made at the end of 2009 on the primary balance with a 2011 horizon. This would be on the order of -5.1%(2). Using this departure point (and assumed potential growth of the French

industrialized countries: a constrained economyFiscal policy had a major role during the crisis. It took the place of private expenditure, thus avoiding a more profound fall in economic activity which would have resulted in an unsupportable increase in unemployment. This strategy was effective. The economic, financial, and banking crisis, which we had assumed would be extensive, had but a limited negative impact on economic activity, and was not of the same order as that which was seen in the 1930’s. A crisis on par with the historic one was the major concern, especially in the U.S., in the autumn of 2008. Thus rapid, vigorous action had to be taken to avoid such a situation.

(1) Surplus primary budget balance: Balance outside the payment of the interests on the debt.

(2) By way of comparison, it is the primary balance actually seen in 2009.

n The context In order to limit the impact of the economic, financial, and banking crisis, the governments of industrialized countries have adopted very accommodating policies. Economic activity has not fallen as drastically as it did in the 1930’s, but public deficits and public debts are at levels never seen in peacetime.

n The key pointIn order to once again give governments long-term room for manoeuvre to manage their public finances, the orientation of fiscal policies must be radically changed. To stabilize, and then reduce, the ratio between the public debt and the GDP, strategies likely to result in long-term fiscal surpluses must be implemented.

n The stakesFor the industrialized countries, this radical change will affect the dynamic of internal demand. They must thus be capable of harnessing growth by emerging countries. These latter will thereafter possess more significant technological autonomy than they did in the past, making them less dependent on the developed countries. The world's equilibrium changes.

PhiliPPe WaechterChief Economist of Natixis Asset Management


Difference in growth rates between low-income / medium-income countries and developed countries

-3

-2

-1

0

1

2

3

4

5

6

1961 1966 1971 1976 1981 1986 1991 1996 2001 2006

Calculated trend

Source: Datastream - Calculations: Natixis Asset Management

economy and change in the populations structure), the report indicates that a mean 2.8% surplus primary budget balance over a period of 20 years would be necessary to return to the indebtedness rate of 2007. If one wishes to reduce this adjustment period, then a much greater effort is necessary. Within the framework used by the BIS, the surplus would exceed 7.3% if this period is 5 years.

What is mentioned here for France is also necessary for the other industrialized countries. By way of example, the primary balance the U.S. would have to achieve would be +2.4% for a 20-year-adjustment, and +8.1% for a period of 5 years.

These BIS calculations necessitate adoption of assumed growth and interest rates. A weaker growth rate, or a higher interest rate, would prolong the adjustment time or increase the effort to be made with the primary balance. Using another plan, in which orientation of the fiscal policy is not changed, risks an explosive indebtedness rate with possible related refinancing difficulties and negative consequences for economic activity and employment.

These data should be taken as orders of magnitude in order to see how fiscal policies must be adapted and adjusted over the course of the coming years.

n Public debt: Consequences for economic activityThese long-term, public debt-related constraints must be followed by massive adjustments of public expenses and/or

public income, which would necessarily impact the economic activity profile. These measures are, of their own accord, likely to shift the growth rhythm. However, there are examples where such an extensive fiscal adjustment resulted in a period of significant growth. This was the case in Denmark and in Ireland in the 1980’s. For this to succeed, assumed commitments must be made, for the duration, on the orientation of the fiscal policy, against a background of less constraining monetary and exchange policies. It is a bold assumption. It may be excessive if it must be generalized for numerous industrialized countries. Carrying out the transition period for this sustainable positive primary balance will thus be complex, especially if negative shocks derail economic activity.

For the industrialized countries, this internal pressure on the economy will take place in a complex international environment. Adjustment of public finances will probably penalize internal demand. Growth will depend more on the exterior environment, especially the dynamic of emerging countries. For them, the growth perspectives are not constrained by the accumulation of past deficits. This situation is worrisome, because the emerging countries are progressively acquiring more advanced technology which will be more or less on par with that of the industrialized countries. Although the latter have seemed to possess an historic “monopoly” on technical progress, they will lose it. The head start which they would have had is markedly reduced. The balance of forces will be permanently affected.

n ConclusionSince 2008, a very extensive crisis affected the industrialized countries, who found themselves with a level of indebtedness never before seen in peacetime. For their part, many emerging countries of significant size are seeing enviable levels of growth and are developing more autonomously, thanks to a greater technological maturity.

The juncture of these two phenomena should drive the industrialized countries to orient economic activity in order to harness this growth by emerging countries. This might feed a growth dynamic a little more vigorously and allow the constraints of indebtedness to be loosened.

In aligning themselves with this dynamic, recourse to a permanently elevated inflation rate would not be justified for the industrialized countries, because the loss of competitiveness which would result would be fatal to their growth

Written on 27/04/2010

Debt-to-GDP ratio in 2007 and 2011

Source: "The Future of Public Debt: Prospects and Implications"Working Paper 300 of the Bank for International Settlements (March 2010)


allocation: companies doing better than governments?

Asset Allocation

Survey data has clearly shown an increase in confidence amongst business leaders in the USA, confirming that their order books are gradually filling up again. Production and investments should therefore accelerate beyond simple stock recovery. Moreover, results remain dynamic, with positive surprises cropping up as announcements are made.

Consumer confidence is also progressing, although a real recovery of the job market remains the missing link in boosting confidence among agents. This in particular explains why the property market remains flat. Governments, on the other hand, are now finding it difficult to inspire confidence in the financial markets, which regard certain situations concerning debt-to-GDP ratios as particularly delicate.Franck nicolas

Head of Global Asset Allocation & ALM

n Fixed incomeGerman debt is currently acting as a "safe-haven" security in Europe. Germany and, to a lesser degree, France are providing refuge in response to the run on bonds in neighbouring countries. This situation will remain until visibility of the debt dynamic in this part of the Eurozone recovers. The IMF and the ECB are trying to act, although the weakness caused to the euro is helping the region out a little at the moment, with a show of unity that has failed to prevent sovereign risk from spreading to countries other than Greece.

n EquitiesAlthough the macroeconomy and business results remain solid, turbulence on the bond market may well cause an increase in risk aversion. Consequently, Natixis Asset Management needs to be especially prudent on the stock markets, in particular in the Eurozone. More than ever, American stocks are looking particularly attractive due to growth differentials and the dollar.

n CurrenciesLittle change, with the overall trend being a drop in the euro. Currencies linked to raw materials, in particular those from emerging countries, should also drop if the sovereign crisis drags on. The Natixis Asset Management Investment Committee has therefore prioritised the dollar over all other currencies.

n CommoditiesAgain, the best hedging instrument against sovereign risk is gold, as long as risk aversion remains high. Oil seems to have reached a ceiling, and clearer cyclical acceleration will be required to see it exceed previous highs.


(1) Investment committee on 25/03/2010.(2) As of 29/04/2010.

Risk categories Risk subcategories

Tacticalallocation*

03/10(1) 04/10(2)

Fixed income = =equities + +

Fixed income United States = -

euro zone = =UK = -emerging markets = =

Japan = =

euro issuers Corporate Invest.Grade

+ +

equities United States + +euro zone + =

UK = =

Japan = =

Currencies (against the euro)

Dollar + +

Yen = -

Sterling - -

Commodities Oil = =

Gold = +

*weighting gap vs. strategic allocation of an investor

Scale from -- to ++


The monthly Index

Value 1 year 2010CAC 40 3 816,99 20,80 % -3,03 %CAC Mid 100 6 724,72 41,49 % 10,34 %IT CAC 20 3 513,65 22,00 % 4,27 %SBF 120 2 821,85 23,15 % -1,32 %SBF 250 2 759,18 23,36 % -1,08 %

Value 1 year 2010MSCI Europe 90,16 28,96% 2,13%EuroStoxx 50 2 816,86 18,59% -5,00%DAX 3 667,13 24,11% 1,77%Footsie 5 553,29 30,86% 2,59%

Value 1 year 2010Dow Jones 11 008,61 34,78 % 5,57 %S&P 500 1 186,69 35,96 % 6,42 %Nasdaq 2 461,19 43,32 % 8,46 %Brent Crude Future 87,44 72,13 % 12,20 %

Value 1 year 2010Nikkeï 11 057,40 25,25 % 4,84 %Hong Kong 21 108,59 36,00 % -3,49 %Singapore 2 974,61 54,91 % 2,66 %Shanghaï 247,29 52,17 % -2,03 %

Value 1 year 2010MSCI World 1 198,56 34,21 % 2,58 %

Rate 1 year 2010 Eonia 33,70 % -0,251 -0,073Euribor 3 months 0,663 % -0,702 -0,037Euribor 6 months 0,663 % -0,702 -0,026Euribor 1 year 1,236 % -0,492 -0,012Fed Funds 0,190 % -0,01 0,14

Rate 1 year 2010 5 years French Treasury Bond 2,101 % -0,489 -0,3785 years USTN 2,419 % 0,409 -0,26710 years French Treasury Bond 3,289 % -0,301 -0,30410 years USTN 3,662 % 0,542 -0,17130 years French Treasury Bond 3,896 % -0,194 -0,36430 years USTN 4,527 % 0,489 -0,103

Value 1 year 2010Euro/Dollar 1,330 0,34 % -7,33 %Euro/Yen (100) 125,00 -4,12 % -6,41 %Euro/Sterling 0,869 -2,86 % -2,23 %Dollar/Yen 94,010 -4,45 % 0,98 %

Money Market

Fixed Income

Currencies

France

Europe

United States

Asia

World

Markets Data As of 30/04/2010

The inflation rate can be broken down into three different price groups: • Two which are quite volatile and which, as a result,

depend on international prices (energy and food prices); • and a third which represents the price trends for all other

products (known as the “underlying index”). Each of these elements is weighted differently. In the Eurozone, the relative weighting of energy in the index is 9.56%, food prices 15.34% and all other products 75.1%.The figure shows three very different dynamics. Oil prices have fluctuated a lot in recent years, and their contribution to inflation rates has varied from +1.5% to –1.5%. The same is true of food, although to a lesser extent. The key point here is that the price fluctuations in these raw materials have not been reflected in the underlying index. This means that the inflation rate has followed the trend set by commodities, without showing any upward persistence. The main reason for this is the absence of any pressure on the means of production or, consequently, the job market.

In the 1970s, the policy of indexing salaries to prices caused a lasting upsurge in interest rates. This is not the case nowadays. Natixis Asset Management therefore believes that inflation rates will remain low. Pressure on the production system and the job market will not become quickly apparent in the current climate.

-1,50

-1,00

-0,50

0,00

0,50

1,00

1,50

2,00

2003 2004 2005 2006 2007 2008 2009 2010

Food Energy Underlying index

The inflation rate is the sum of the three indicators

Les taux d'intérêt en zone euroEurozone - Contribution to inflation rates Understanding inflation-rate dynamics

Source: Datastream - Calculations: Natixis Asset Management


These 7 sub funds of the Natixis International Funds (Lux) I SICAV reflect the key expertise of Natixis Asset Management

I, A EUR LU0161120547I, D EUR LU0391146155R, A EUR LU0161121271R, D EUR LU0390502184

H-I, A USD LU0390502267H-I, D USD LU0390502341I, A EUR LU0255251166I, D EUR LU0255251596R, A EUR LU0255251679R, D EUR LU0255251752


• Investment universe: Mainly Euro denominated government or private issuers rated Investment / Diversifying fixed income assets

• Benchmark: Barclays Capital Euro Aggregate• Minimum recommended investment period: 3 years

• Investment universe: International inflation-linked bonds • Benchmark: Barclays World Government Inflation linked all maturities

Index hedged in euro• Minimum recommended investment period: 2 years• Risk Indicator: Target tracking-error ex ante of 2% (maximum)

• Investment universe: Mainly Euro-denominated investment grade debt securities issued by OECD as well as cash, money market instruments or other securities

• Benchmark: Barclays Euro Aggregate Corporate Index• Minimum recommended investment period: 3 years

Isabelle Delannée-Méric

Sophie Potard

Christine Barbier

Benefit from a broad range of fixed income investment opportunities

Get the most out of diversification in inflation-indexed bonds in a global universe

Benefiting from the SRI expertise of Natixis Asset Management through a socially responsible portfolio of investment grade

corporate bonds

Natixis Euro Aggregate Plus Fund

Natixis Global Inflation Fund

Natixis Impact Euro Corporate Bond Fund

See the full prospectus which is the only legally binding document. See the Legal Information on page 2 for important information about the funds.

Overwiew of our international Product rangesub funds of the natixis international F unds (lux) i sicaV managed by natixis aM


I, A EUR LU0147917792I, A USD LU0095830922I, D USD LU0095831060R, A EUR LU0147918923R, A USD LU0084288595R, D USD LU0084288678

I, C EUR LU0095828512I, D EUR LU0095828785R, C EUR LU0066549592R, D EUR LU0066549832



• Investment universe: Emerging Europe Equities• Benchmark: None (MSCI Emerging Europe Index: indicative only)• Minimum recommended investment period: 5 years• Risk Indicator: Target tracking-error ex ante between

6 and 10

• Investment universe: European Small and Mid Equities• Benchmark: None (MSCI Europe Small Caps NDR: indicative only)• Minimum recommended investment period: 5 years• Risk Indicator: Target tracking-error ex ante between 4 and 7

(indicative)

• Investment universe: Eurozone Equities• Benchmark: None (MSCI EMU NDR: indicative only)• Minimum recommended investment period: 5 years

• Investment universe: European equities• Benchmark: None (MSCI Europe: indicative only)• Minimum recommended investment period: 3 years

Matthieu Belondrade François Théret

Thierry Cuypers

Olivier Lefèvre

Christine Lebreton

Get the most out of the growth in the emerging European zone as part of a conviction management strategy

Benefiting from the potential of European Small & Midcaps within the scope of a conviction-

based strategy

Tapping the potential of Eurozone value equities within the scope of a conviction-based strategy

Active and responsible investing to maximise SRI value added

Natixis Europe Smaller Companies Fund

Natixis Euro Value Fund

Natixis Impact Europe Equities Fund

See the full prospectus which is the only legally binding document. See the Legal Information on page 2 for important information about the funds.

Natixis Emerging Europe Fund


Overwiew of our international Product rangenatixis asset Management's funds offer a range of expertise and innovation

28 complementary funds covering all asset classes. This quarterly reviewed list of funds aims to highlight Natixis Asset Management's most innovative products and its wide range of expertise.

Alte

rn.

Natixis Constellation European Event IC, $: LU0161071237 IC, €: LU0161073951

Abso

lute

re

turn Natixis Absolute Quant Bond 18 M I: FR0010232348 R: FR0010249219

Natixis Absolute Swap Arbitrage IC: FR0010654921 RC: FR0010657924

Bala

n-ce

d Natixis Absolute Multistratégies IC: FR0010688812

Mo

ney

Mar

ket Natixis Cash Première C: FR0010157834

Natixis Cash A1P1 C: FR0010322438

Natixis Impact Cash C: FR0010008003

Natixis Cash Eonia I: FR0010298943 R: FR0007084926

Natixis Tréso Euribor 3 Mois FR0000293714

Natixis Tréso Plus 3 Mois FR0007075122

These funds are authorized for sale in France and possibly in other country(ies) where their sale is not contrary to local legislation. Please refer to legal information of this material.

Asset class Fund name Share and ISIN code

Fixe

d in

com

e

Natixis Souverains Euro 1-3 I: FR0010208421

Natixis Souverains Euro 3-5 FR0010036400



Natixis Souverains Euro RC: FR0000003196

Natixis Inflation Euro I: FR0007475413 R: FR0010170944

Natixis Obli Opportunités 12 Mois I : FR0010796391 R : FR0007493226

Natixis Crédit Euro I: FR0010171108 R: FR0010690966

Natixis Convertibles Euro I: FR0010658963 R: FR0010660142

Natixis Convertibles Europe C: FR0010171678

Eq

uiti

es

Natixis Actions Europe Dividende IC: FR0010582478 RC: FR0010573782

Natixis Impact Life Quality C: FR0010410274 E: FR0010458539

Natixis Actions Europe Convictions C: FR0010346429

Natixis Actions US Value I: FR0010256412 R: FR0010236893

Natixis Actions US Growth I: FR0010256404 R: FR0010236877

Sonic Monde I: FR0010555797 RC: FR0000993446

Natixis Actions Global Emergents I: FR0010711051 R: FR0010706960


Identifying new opportunities

In order to provide mobility of allocations to profitable sectors while seeking to preserve assets, Natixis Asset Management offers a variety of solutions for investors seeking new opportunities. These solutions are intended to improve the overall risk/return profile. To achieve this, they combine investment horizons of between 12 months and 3 years with performance objectives that are positive, consistent and as independent as possible of general market trends, and with even better risk management.

Two mutual funds appear particularly well suited for the next two years, due to their complementarity: Natixis Absolute Swap Arbitrage and Natixis Absolute Multistratégies, both of which are designed to achieve a net annual performance of capitalized Eonia + 2% (I share) over two years regardless of the market environment.

Beyond their relentless pursuit of performance, they differ in the flexibility of their investment processes and the implementation of specific strategies in distinct investment universes: n Natixis Absolute Swap Arbitrage employs arbitrage strategies on swap yield curves, n Natixis Absolute Multistratégies employs directional long and short strategies across all classes of assets.

These investment solutions enable both investment teams to generate positive returns, even when markets are going down. In addition, the risk budget is continuously monitored using VaR(1) and the maximum loss to allocate the overall risk budget between the different strategies set in place.

seeking absolutely positive performance

Europe: is a cyclical rebound in sight?

Economic activity is showing signs of a cyclical rebound in Europe. Business leaders are becoming more optimistic, and there are signs of an upturn in production, employment and investment in a relatively near term. The rebound in activity will, however, still not be enough to fuel any pressure on the labor market and on prices. If inflation accelerates, it will generate movements - sometimes quite important ones - in commodity prices. In recent years, however, this volatility of commodity prices has not leeched into wages and has not, in fact, fueled inflation.

The cyclical upturn referred to will enable the European Central Bank to resume a more orthodox monetary policy. This should result in a convergence of Eonia with the refinancing rate at the end of the year. Still, this short-term improvement is part of a longer, and also more constrained process due to the very high levels of household and State debt. A level of debt that will have to be reduced. In the medium term, the reduction of this debt is a source of uncertainty: first of all, as it constrains the various economic players; secondly, as the announcements that will be made and the options that will be adopted to reduce the public debt will have lasting effects on expectations and create a little more volatility in business activity and the financial markets.

(1) VaR: Value at Risk.

Expertise Focus


Natixis Absolute Swap Arbitrage

Particularly original, the fund has an innovative performance driver: arbitrage strategies - duration neutral and with no currency risk - on 10 swap curves of different OECD countries(2).

As part of a stringent risk control process, at both the overall portfolio and individual strategy levels, its investment process relies on the investment team’s ability to analyze a large number of arbitrage opportunities by combining Natixis Asset Management’s expertise in interest rate swaps with proprietary quantitative tools.

“Entry timing is critical in a volatile environment. Under these conditions, in March 2010, we integrated 10 strategies with the philosophy of creating arbitrage between the American zone and

the eurozone, the Scandinavian zone and Great Britain and between the United States and Canada,” stated Dieudonné Djimi, the fund’s portfolio manager(3).

With a net performance(4) of 4.45% vs. 1.86% for the Eonia from its inception on September 12, 2008(5) through April 16, 2010, Natixis Absolute Swap Arbitrage posted annualized weekly volatility of 2.16% (annual target and max volatility of 3%). Over the same 18-month period, it posted a maximum loss of 1.08% and behavior that was truly uncorrelated with the fixed income and equity markets under historically exceptional conditions. As of April 16, 2010, the fund had more than € 95.7 million in assets under management.

Dieudonné Djimi, portfolio manager

Further information on the products on : www.am.natixis.com

(2) Curves considered: Australia, Canada, Switzerland, eurozone, Japan, New Zealand, Great Britain, Sweden, Norway and USA.

(3) Quantitative and Arbitrage investment team under the responsibility of Nathalie Pistre, PhD, brings together two managers with an average of 10 years experience.

(4) Performance net of fees and operating expenses. The figures cited refer to prior years: past performances are not a reliable indicator of future performances (Source: Natixis AM).

(5) Before the bankruptcy of Lehman Brothers.

(6) Natixis Absolute Multistratégies is co-managed by Frank Trividic and Pierre Barral.

(7) ETF: Exchange traded fund.

(8) Past performances are not a reliable indicator of future performances (Source: Natixis AM).

Natixis Absolute Multistratégies

“Natixis Absolute Multistratégies is specifically designed for investors seeking positive performance over a 24-month period with a diversified, non-benchmarked management and a non-benchmark allocation,” explains the investment team(6). “This mutual fund allows investors to benefit from the overall strength provided by this broad diversification of investment vehicles and management strategies, in an environment that has become highly volatile.”

The risk budget is particularly well defined: a maximum loss target of 5% off the highest net asset value, with a probability of 95%. The net exposure to equities may still range from -50% to +50% of fund assets (currencies between -40% and +40%), whereas interest rate sensitivity ranges from -8 to +8.

The investment team is therefore able to implement a wide range of strategies, in long or short directional positions, and relative value positions in all ass et classes (including commodity indexes, such as for gold) and in all geographic regions (including emerging markets). The product of two fundamental and quantitative drivers, the portfolio is invested primarily in liquid, passive and pure vehicles (ETFs(7), futures contracts, etc.) for a simple and transparent management.

Since its inception on March 6, 2009, the fund has achieved a net performance(8) of 2.36%, vs. 0.46% for Eonia, with an average volatility of 2.91% and a maximum loss of 2.39%. The active marketing phase began during the first quarter of 2010, with assets under management of more than € 55.9 million as of April 16, 2010.

Pierre Barral and Frank Trividic, co-portfolio managers



News

Natixis Asset Management launches Natixis Absolute Multistratégies, a multiclass and multi-strategy absolute return fund with a dual performance engine.

Given the current economic context, investors are looking for investment with a controlled risk and a performance potential, regardless the market conditions.

To match this need, Natixis Asset Management launched(1) the FCP(2) Natixis Absolute Multistratégies. This fund offers privileged access to multi-class asset strategies with an international investment universe and benefitting from a dual performance engine: One is fundamental and the other is quantitative.

Natixis Absolute Multistratégies aims to achieve an annual performance that is 2% higher than capitalized EONIA for I shares(3) net of fees over a recommended investment period of two years. This investment is intended primarily for institutional and corporate clients.

n Multiple strategies to adapt to all market configurations

Natixis Absolute Multistratégies benefits from a very large investment universe. It invests in:

• All asset classes (equities, bonds, cash, currencies, commodities indices, etc.);

• All geographic regions (developed and emerging countries). In order to achieve its performance goals, the investment team deploys a wide range of strategies: Long or short directional positions (buy or sell) and arbitrage positions for all investment horizons, from short term to long term. Finally, the portfolio is invested primarily in liquid vehicles (ETF and Futures Contracts).

n Complementary and autonomous dual engines for optimizing performance

In order to better grasp market developments, the investment process of Natixis Absolute Multistratégies relies on two complementary but independent approaches.

1. A “global macro” approach: The portfolio manager relies on different types of analysis (macroeconomic analysis, technical analysis, valuation of markets, momentum, etc) in order to optimize the investment’s risk/return profile according to his convictions and the risk level of the underlying asset(s).

2. A quantitative approach: An internally developed tool is used to detect the main market trends in a systematic way. The positions are calibrated using an optimization process which allows a balanced and robust allocation of risk budgets.

n A global risk management in a controlled risk framework

Natixis Absolute Multistratégies comprises two independently managed engines, whose allocation in the portfolio is balanced. These different strategies are calibrated in accordance with their contributions to the fund’s overall risk and monitored daily. Thus, the target volatility is 3.50%(4).

Further information on www.am.natixis.com [Our Products section]

Natixis Asset Management launches Natixis Absolute Multistratégies

Product News The Second Climate Change Scientific Advisory Committee Pioneer and leader in SRI and solida-rity-based fund management, Natixis Asset Management has launched the Climate Change Scientific Advisory Committee in order to highlight its management teams about the issue of climate change. The Second Climate Change Scientific

Committee recently took place, bringing together around thirty participants under the chairmanship of Carlos Joly(1). The experts of the Committee

The day’s agenda included the following topical themes:• “Copenhagen to Cancun: summary and analysis of unilateral

and multilateral State commitments” - Pierre Radanne, specialist in energy management.

• “Sustainable construction: challenges, performance and finance” - Blaise Desbordes, specialist in green building and habitat.

• “Environmental challenges and opportunities in shipping” - Miklos Konkoly-Thege, specialist in certification and shipping.

• “Impact Funds Climate Change: portfolio lifecycle” - Suzanne Senellart and Clotilde Basselier, portfolio managers.

The management team of Impact Funds Climate Change(2), a Natixis Asset Management funds aiming at reconciling the climate change issues with a performance oriented strategy through investment in international equities, spoke about the funds and the linked investment choices. This funds is mana-ging $120 million of assets as of 31.05.2010.The Natixis Asset Management teams, in partnership with Natixis Global Associates(3), have also begun actively marketing the fund around the world. By way of example, Impact Funds Climate Change has recently attracted investors in Italy, and Natixis Asset Management is planning to create an ad hoc vehicle to market it in the USA.

(1) Carlos Joly, Chairman of the Climate Change Scientific Committee, is a specialist in SRI and co-founder of the United Nations Environment Programme - Finance Initiative (UNEP-FI).

(2) Approved in France by the AMF on 5 October 2009, the Impact Funds Climate Change fund is a sub-fund of the IMPACT FUNDS, an investment company with variable share capital organized under the laws of the Grand-Duchy of Luxembourg and authorized by the financial regulator (the CSSF) as a UCITS.

(3) Natixis Global Asset Management’s international distribution platform.

(1) Funds created on 03/03/2009 but without active marketing. (2) FCP: Fonds commun de placement = collective investment fund.(3) 1.60% for the R shares. (4) Maximum volatility = 7%.

Carlos Joly, Chairman of the Committee

Consult all the contributions of the experts of the Committee on the website dedicated to climate-change expertise: www.am.natixis.com/climatechange/engYou will find the detail of the discussions and presentations of the second Committee in the second edition of the Climate Change Scientific Committee newsletter, coming soon. It will be available on the dedicated website.

nAtixis AssEt MAnAgEMEntlimited liability CompanyShare Capital 50 434 604,76 €rCS number 329 450 738 parisregulated by amF under n°gp 90-009registered office: 21 quai d’austerlitz75 634 paris, Cedex 13 - tel. +33 1 78 40 80 00

www.am.natixis.com

nAtixis MultiMAnAgErSubsidiary of natixis asset managementa French simplified joint-stock companyShare Capital of 7 536 452 €rCS number 438 284 192 parisregulated by amF under n°gp 01-054registered office: 21 quai d’austerlitz75 634 paris, Cedex 13 - tel. +33 1 78 40 32 00

www.multimanager.natixis.com

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Perspectives 05.2010 EN

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Transcript of Perspectives 05.2010 EN