SGAM ETF News · SGAM AI confirmed in this way once again its leadership in the development of...

SGAM ETF NewsNovember 2006 n Société Générale Asset Management ETF information letter

Structured ETFs:an emergingspecies

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News n Editorial

SGAM ETF News

Contents

n News

> Editorial p 1

> Economic review p 2

> Interview p 3

n ETF update

> SGAM ETF Leveraged mechanism p 4

> SGAM ETF Flexible mechanism p 5

n Zoom

> Dow Jones Euro SToxx 50® - Term sheet p 6

> FTSEurofirst 80 - Term sheet p 8

> CAC 40 - Term sheet p 10

> Nasdaq-100® - Term sheet p 12

Director of the publication: François Millet • Writters: Katrin Muller • Géraldine Pollet, Thomas Page-Lecuyer, Michala Marcussen, Eric Baesen • Conception, design: Communication SGAM • Photos credit: Getty images

François Millet,

Head of Distribution - Index-linked

products

One year ago, SGAM Alternative Investments took the financial world to a new adventure: the launch of the first structured ETFs in Europe. The SGAM ETF product range opened the possibility to benefit from the combination of differentiated risk profiles as they are available for structured products and the transparency of a listed UCITS III fund.

A look to the performance of the eldest products of the range, SGAM ETF CAC 40, confirms that the adventure turned into a success story. Market reactivity and product range complementary are the results of both product profiles: providing an exposure of up to 200% to the index, SGAM ETF Leveraged CAC 40 delivered performance of 43.56%, which is more than twice the performance of the index CAC 40 (+21.54% from 18/10/05 to 25/10/06).SGAM ETF Flexible showed its capacity to replicate all or part of the index performance (21.99% in the same time) while protecting the investor against market declines.Today the product range covers the following indices: Dow Jones EURO STOXX 50®, FTSEurofirst 80, Nasdaq-100® and CAC 40.

SGAM AI confirmed in this way once again its leadership in the development of management processes that rely on sophisticated instruments and techniques. No doubt, the hand in hand cooperation between fund managers, analysts, product specialists and client managers, will continue to surprise the financial world with new ETF profiles, new underlyings and above all with a full understanding of your needs… We promise.

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News n Economic review

n Equity markets have proven highly resilient to fears over the US economyFinancial markets as a whole are currently focused on the shift in US economic fortunes. Given the sharp tumble in the US property market, the risk of contagion to US household consumption and thereafter to the global economy is very real. Uncertainties on this front may consequently trigger a bout of equity market volatility. However, on the basis of our scenario of a recession limited to the US property sector, equity markets ought to emerge strengthened from this period of doubt. Furthermore, equity valuations are undemanding relative to historic levels over the last 20 years. We consequently favour equity markets - which would appear to discount a less bleak economic outlook than that discounted by bond markets.

n Corporate earnings remain buoyantAlthough second quarter earnings figures were strong, corporate expectations are cautious because of the uncertain economic outlook. To compound the situation, the consensus forecast is still for a slowdown in earnings growth, due to the combined impact of slackening turnover and margin growth, following the heady levels witnessed in 2005. Estimates have been upgraded over the last two months, largely as a result of better-than-expected first half earnings figures. 2007 earnings growth for developed markets taken as a whole is expected to approach the 10% mark.

n Technology stocks will be underpinned by investmentAt the global level, investment should remain buoyant because capacity utilisation rates are high, monetary and financial conditions remain attractive, and companies have the means to invest. All this spells good news for the technology sector. Earnings growth forecasts for this sector are upbeat (between 15% and 20%) and valuations are far lower than in the past. In

addition, M&A activity is sustained and, in the event of a market setback, investors will show greater interest in growth stocks, which abound in the technology industry. Despite the impact of unfavourable seasonal factors at the end of the third quarter, prospects for the fourth quarter should give renewed gloss to a sector currently unloved by investors. We are therefore maintaining a strong preference for the technology sector. We are still neutral on the energy sector following this summer’s underperformance, but continue to avoid cyclical and financial stocks, due to their sensitivity to economic slowdown, and defensive stocks on valuation considerations.

n A preference for large caps and growth stocksGiven heightened risk and volatility, we hold a positive position on large caps because they offer greater liquidity and less risk. Our preference for this category of investment is stronger in the United States but applies to all leading countries. In the same vein, our preference for growth stocks is particularly strong in the United States because this region is further advanced in the economic cycle than the Eurozone and Japan, for which we are maintaining a neutral stance in terms of management style.

Michala MarcussenHead of Economic research, SGAM

The equity markets resist the risk and volatility increases after rebounds

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News n Interview

The �0th of May this year saw the start of a serious downward stock market adjustment: the American S&P 500 lost almost 8 % in one month, while the emerging markets lost three times this amount. Today the S&P 500 stands at around the ��50 mark, its highest level this year. At the same time, the emerging markets have recovered only some of the losses suffered in May, with the notable exception of India and China, which are today at record levels.

Why this renewed appetite for risk? The sharp downturn in the markets in May was caused by an upsurge in two risk factors: an acceleration in interest rate rises and soaring raw material prices. Since mid-June, there has been a significant stock market recovery, due primarily to an easing of these same two risk factors. Basically, the upward trends in interest rates and commodities prices are a « logical » consequence of the dynamic growth of the global economy. May’s events, nevertheless, showed an «abnormal» heightening of these tensions, putting pressure on world economic growth: the levels which interest rates and oil prices reached were sufficient to affect business margins and consumer purchasing power. Behind this pressure on interest rates were higher than expected inflation figures, followed by more aggressive talk from central bankers; the soaring increases in raw material prices appeared much more speculative at the time. From mid-June, interest rate pressures eased significantly and this was followed in August by a sharp fall in oil prices . The interest rate fall resulted primarily from the inflation risk in the United States being dispelled by an anticipated deceleration in growth: the US Central Bank thus ended a long series of rate rises (17 consecutive increases). There were two main reasons for the reduction in raw material prices: resolution of the Middle East conflict (Lebanon) and signs of a slow-down in the two motive forces behind global demand: the United States and China.

Why does the level of rebound differ depending on asset class? Since May, the emerging markets have recovered only some

of the losses suffered, with the notable exception of India and China, which are now at their highest level this year. The markets of Eastern Europe and Latin America have regained almost 20% since mid-June, but this follows losses of nearly 30% during the period of downward adjustment. The overall position since the start of the year certainly remains positive, so what is behind this reluctance on the part of investors? First, it should be remembered that these markets have benefited from exceptionally favourable circumstances over the past few years: highly attractive valorisations, soaring commodities prices and sustained high levels of liquidity. In May investors also sanctioned other strategies whose performance could have been artificially boosted: small caps, momentum strategies. Investors realised that these exceptional circumstances could not continue indefinitely. In contrast, the Indian and Chinese markets, whose performance had not been boosted by the rise in raw material prices, were able to return to close to peak levels uninterrupted by the reversal in prices.

How do we see the months ahead? We see stock markets remaining positive and bond markets neutral. We believe that the slow-down in global economic growth will not undermine the potential for stock market rises. Interest rates may have peaked in the summer and the slow-down in growth should have an affect on raw material prices.

Eric Baesen,DPI Manager (Dynamic Portfolio Insurance),

SGAM AI / Structured Management

The DPI team undertakes active management of guaranteed products exposed to a wide range of markets, in particular stock markets. The DPI management method developed by SGAM AI extends the options offered by portfolio insurance by allowing tactical management of asset allocation.

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Recovery in the markets : reasons why, different levels of rebound depending on asset class and outlook for the months ahead.

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ETF update n Flexible mechanism

Regulatory and technical innovations for structured ETFs

> SGAM ETFs are the first structured ETFs to offer dynamic exposure that adapts to market conditions. The aim is to limit the impact of market shocks and offer both capital protection and leverage.

> Changes to French financial regulations were required to permit the listing of this new product.

> Euronext Paris has modified its NextTrack compartment to develop the structured funds segment.

> Software generating indicative net asset values (INAV) in real time has been developed.

SGAM ETF Flexible allows you to capture all or part of the index’s returns while reducing the risk.

It is the first ETF with a built-in portfolio insurance which can limit the impact of market declines on the fund’s performance. It benefits from a partial capital protection, revisable annually, and an active management from the experts of SGAM Alternative Investment

SGAM ETF Flexible is managed using the portfolio insurance method. This method consists of regularly adjusting the exposure level to the index.

In case of a market decline, a part of your

investment can be transferred into a money market placement until the markets rebound. Thus, exposure to the index is adjusted to less than 100% to partially protect your capital.

However, in case of a strong decline, all your capital can be transferred into a money market placement. You will continue to be exposed to the index after the adjustment of your partial capital protection, on the January 1st of the

following year.

The portfolio insurance method guarantees a partial capital protection of 80% of the net asset value of the ETF on 31st of December of the preceding year.

Every quarter, SGAM Alternative Investments’ analysts and fund managers examine the market in detail and anticipate future trends in order to determine the optimal participation in the index performance.

Thus, during stable or bullish up markets, the exposure to the index can reach its maximum of

100%. If the market declines, investors will be under-exposed to the market with the aim of maximizing the partial capital protection.

The first ETF with a Built-In Portfolio Insurance

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A completely transparent allocation process SGAM ETFs’ exposure to their underlying index is managed using a technique known as ‘dynamic portfolio insurance’ – one of SGAM AI’s core skills – and with total transparency,

> the exposure level, the SGAM ETF Leveraged floor for the month and the annual SGAM ETF Flexible protection level are displayed on the websites www.sgametf.com and www.euronext.com, and on Reuters (on the INAV and ETF pages).

> adjustments to the allocation parameters are announced a week in advance on www.sgametf.com and on Reuters (transparent decision-making).

n Zoom

ETF update n Leveraged mechanism

Advantages of structured ETFs> Flexibility: ease of trading (identical to a share, via any

financial intermediary), continuous market quotation, liquidity guaranteed by two market-makers.

> Competitiveness: low management fees compared with other products with a similar profile, no entry or exit fees.

> A high degree of liquidity, thanks to two independent market-makers.

> Dividend payouts.

SGAM ETF Leveraged products offer up to �00% exposure to the index and guarantee a 50% monthly capital protection (except for SGAM ETF Leveraged DJ EURO STOXX 50 and SGAM ETF Leveraged Nasdaq-100).

Each calendar quarter, the index exposure is adjusted according to the market expectations of the fund managers in order to achieve maximum exposure during bullish markets and minimum exposure in bearish markets.

Index exposure can reach 200% when the market outlook is optimistic and/or when a low volatility is anticipated.

Conversely, expectations of a decline in the index and/or high volatility for the following quarter could reduce index exposure to its minimum (150%).

However, in the event of a sharp fall in the index (of say 50% intraday) ETF’s NAV would drop to zero, which would lead to the delisting of the fund from Euronext Paris index.

Dividends are capitalised in the fund.

DJ Eurostoxx 50Up to �00% exposure to the index

Structured ETFs differ sharply from trackers

Trackers are listed funds that exactly replicate the performance of a benchmark index.

Structured funds combine several types of investment vehicle to meet an objective or respect a management constraint (capital guarantees, performance, etc.). They are sold through banking and insurance distribution networks and their net asset values are calculated regularly.

Structured ETFs are transparent structured funds that are traded throughout the day on an exchange. Their assets are exposed to a benchmark and actively managed.

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Zoom n

Dow Jones EURo SToxx 50®

The Dow Jones EURO STOXX 50® index includes 50 Euro-zone stocks. Shares included in the index are selected on the basis of free float capitalization and for sector representativity.

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Term sheet n SGAM ETF Leveraged DJ EURo SToxx 50

ISIN code FR0010368506Reuters code LXX.PABloomberg code LXX FPID LXX

Performance against the index*SGAM ETF Leveraged DJ EURo SToxx 50 is a leveraged ETF, designed to replicate up to �00% of variations in the Dow Jones EURo SToxx 50®.

Principal terms & conditions(1)

Legal form UCITS III, diversified mutual fund under French law

Date of first listing 18 September 2006Benchmark index Dow Jones EURo SToXX 50®

Currency euroAUM €25.34 millionDividend capitalizedMinimum investment one unitInitial NAV 1/100th of the index closing

price as of 15/09/06Management fee maximum 0.60% per year, including taxesExposure to Dow Jones EURo SToXX 50(2) maximum 200% Subscription/redemption fees zero for stock market

transactions(3)

Telecommunications 7.7%

Chemicals 4.1%

oil & Gas 9.9%

other sectors 21.7%

Technology 5.6%

utilities 11.2%

Insurance 13.0%

Banks 26.7%

Dow Jones Euro Stoxx 50®

Sector breakdown

Source: Bloomberg as of 25/10/06

Top 10 shares on the 25/10/061. Total SA. 5.90%2. Banco Santander 4.07%3. BNP Paribas 3.69%4. ING Groep NV 3.54%5. Sanofi-Aventis 3.48%6. unicredito Italiano SpA 3.28%7. E.oN AG 3.15%8. Telefonica SA 3.11%9. Banco Bilbao 3.07%10. Nokia oYG 3.05%Source: Bloomberg as of 25/10/06

0 5 10 15 20 25 30 35Ireland

Finland

Italy

Netherlands

Spain

Germany

France 34.4

23.0

13.9

13.0

11.6

3.2

1.0

Country weighting

For subscriptions of SGAM ETF Leveraged, please turn to your broker, bank or any other financial intermediary by giving the ISIN of the product.

* From 18/09/06 as of 25/10/2006. Net of fees. Past performances should not be taken as a prediction of future results. Source: SGAM AI

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18/09/06 23/09/06 1/10/06 9/10/06 17/10/06 25/10/06

Dow Jones EURO STOXX 50®

SGAM ETF Leveraged DJ EURO STOXX 5010.83%

5.43%


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Term sheet n SGAM ETF Flexible DJ EURo SToxx 50

SGAM ETF Flexible DJ EURo SToxx 50 is an ETF with a buffer mechanism. It enables you to invest in the eurozone stock market via the Dow Jones EURo SToxx 50® and at the same time to benefit from permanent partial protection of your capital.


Legal form UCITS III, diversified mutual fund under French lawDate of first listing 6 November 2006Benchmark index Dow Jones EURo SToXX 50®

Currency euroAUM -Next dividend payout date 29/12/2006 Minimum investment one unitInitial NAV 1/100th of the index closing price as of 30/10/06 Management fee maximum 0.50% per year, including taxes initial maximum minimumExposure to Dow Jones EURo SToXX 50(2) 100% 100% 0%Permanent protection level(2) 80% of the preceding calendar year. In 2006, 80% of initial NAV.Protection revisions(2) annual, first business day of each calendar yearExchange Euronext Paris (NextTrack/Structured Funds segment)Subscription/redemption fees zero for stock market transactions(3)


Chemicals 4.1%

oil & Gas 9.9%

other sectors 21.7%

Technology 5.6%

utilities 11.2%

Insurance 13.0%

Banks 26.7%

Performance against the index*

No significant

ISIN Code FR0010386920Reuters Code FXX.PABloomberg Code FXX FPID FXX

(1) The full terms and conditions applicable to SGAM ETF Flexible DJ EURo SToXX 50 are detailed in the fund prospectus, available from SGAM Index and on www.sgametf.com.(2) Exposure levels and other characteristics of SGAM ETF Flexible DJ EURo SToXX 50 are shown on www.sgametf.com.(3) Apart from the usual fees charged by your broker.

*since inception 06/11/06

Gain access to www.sgametf.com and:

Simulate the returns on the entire SGAM ETF range according to your market expectations.

Access a full track record for each product, as well as graphs showing their performance against their benchmarks.

Check out a comparison against products with a similar risk profile.

Get answers to your questions either from the FAQ section or by querying our teams.

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SGAM ETF Leveraged FTSEurofirst 80 is the very latest leveraged ETF, designed to replicate up to �00% of variations in the FTSEurofirst 80.



Date of first listing 20 March 2006Benchmark index FTSEurofirst 80Currency euroAUM €21.42 millionNext dividend payout date 29/12/2006 Minimum investment one unitInitial NAV 1/100th of the index closing

price as of 17/03/06Management fee maximum 0.60% per year, including taxesExposure to FTSEurofirst 80(2) maximum 200% Subscription/redemption fees zero for stock market

transactions(3)

Zoom n

FTSEurofirst 80The FTSEurofirst 80 is a European equity index launched in 2003 by FTSE and Euronext. It is composed of 80 eurozone stocks, 60 of which are selected on the basis of their free float capitalisation and the remaining 20 for sector representation reasons.This index offers broad coverage of the eurozone stock market and is strongly correlated with other major eurozone indices.

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Term sheet n SGAM ETF Leveraged FTSEurofirst 80

ISIN code FR0010301531Reuters code L80.PABloomberg code L80 FPID L80

* From 20/03/06 as of 25/10/2006. Net of fees. Past performances should not be taken as a prediction of future results. Source: SGAM AI

(1) The full terms and conditions for SGAM ETFs are listed in the fund prospectus, available from SGAM Index and on the website www.sgametf.com.

(2) The exposure level, the reference portfolio and the other features of SGAM ETFs are available on the website www.sgametf.com.

(3) Apart from the usual fees charged by your broker.

FTSEurofirst 80®

SGAM ETF Leveraged FTSEurofirst 80

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FTSEurofirst 80®

Fixed Line Telecommunications

9%

Nonlife Insurance 8%

Banks 24%

Gas, Water & Multiutilities 6%

other sectors 44%

oil & Gas Producers 9%

Sector breakdown

Source: FTSE as of 25/10/06

Top 10 shares on the 25/10/061. Total SA. 5.14%2. Banco Santander 3.31%3. BNP Paribas 3.10%4. ING Groep NV 3.02%5. Telefonica SA 2.88%6. Sanofi-Aventis 2.77%7. ENI SpA 2.60%8. Siemens AG 2.50%9. Banco Bilbao 2.49%10. Allianz SE 2.45%Source: FTSE as of 25/10/06

0 5 10 15 20 25 30 35 40PortugalBelgiumFinland

ItalyNetherlands

SpainGermany

France 35.63

22.42

13.62

11.43

11.123.14

2.17

0.43

Country weighting

11.13%

5.39%

Source: FTSE as of 25/10/06

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Investing in structured ETFs > Listed on NextTrack (Structured Funds segment)

> Transparent trading : Index exposure and fund portfolio available

on www.sgametf.com Indicative Net Asset value (INAV) of the fund

calculated and disseminated in real time (Euronext, Reuters, Bloomberg)

> Secondary market : two liquidity providers, bid-offer prices adjusted to INAV in real time

> Primary market : SGAM Alternative Investments through cash settlement

n Information on SGAM ETFs

Prices> On all financial information websites> In the financial press> On www.euronext.com> On www.sgametf.com

Net asset valueEach SGAM ETF’s real-time indicative net asset value and reference portfolio information are available on www.euronext.com and www.sgametf.com

Term sheet n SGAM ETF Flexible FTSEurofirst 80

SGAM ETF Flexible FTSEurofirst 80 is an ETF with a buffer mechanism. It enables you to invest in the eurozone stock market via the FTSEurofirst 80 and at the same time benefit from permanent partial protection of your capital.


Legal form UCITS III, diversified mutual fund under French lawDate of first listing 20 March 2006Benchmark index FTSEurofirst 80Currency euroAUM €20.32 million Next dividend payout date 29/12/2006 ‘Mini’ units ‘Size’ units Minimum investment one unit one unitInitial NAV 1/100th of the index closing index closing price as price as of 17/03/06 published on 17/03/06Management fee maximum 1% maximum 0.50% per year, including taxes per year, including taxes initial maximum minimumExposure to FTSEurofirst 80(2) 100% 100% 0%Permanent protection level(2) 80% of the last NAV of the preceding calendar year. In 2006, 80% of initial NAVProtection revisions(2) annual, each first business day of the calendar yearExchange Euronext Paris (NextTrack/Structured Funds segment)Subscription/redemption fees zero for stock market transactions(3)

FTSEurofirst 80®

SGAM ETF Flexible FTSEurofirst 80

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5 400

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‘Mini’ units ‘Size’ unitsISIN code FR0010301523 FR0010303875Reuters code F8M.PA F80.PABloomberg code F8M FP F80 FPID F8M F80





5.56%

5.39%

*From 20/03/06 as of 25/10/2006. Net of fees. Past performances should not be taken as a prediction of future results. Source: SGAM AI

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Zoom n

The CAC �0, Paris’ flagship index

This benchmark index is composed of the 40 most active stocks on the Paris market.

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Term sheet n SGAM ETF Leveraged CAC �0

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SGAM ETF Leveraged CAC 40

CAC 40®

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ISIN code FR0010239186Reuters code L40.PABloomberg code L40 FPID L40

*From 19/10/05 as of 25/10/2006. Net of fees. Past performances should not be taken as a prediction of future results. Source SGAM AI




Performance against the indexSGAM ETF Leveraged CAC �0 is the first leveraged ETF, designed to replicate up to �00% of variations in the CAC �0.



Date of first listing 19 october 2005Benchmark index CAC 40Currency euroAUM €115.99 millionNext dividend payout date 29/12/06Minimum investment one unitInitial NAV 1/100th of the index closing

price as of 18/10/05Management fee 0.60% per year, including taxesExposure to CAC 40(2) maximum 200%Subscription/redemption fees zero for stock market

utilities 8.13%

Industrials 7.94%


Consummer discretion 13.07%

Information technology 3%

Financials 24.04%

Energy 13.40%

Health care 8.64%

Consumer staples 13.07%

Materials 6.78%

CAC 40®

Sector breakdown

Top 10 shares on the 25/10/061. Total SA. 13.37%2. BNP Paribas Banco Santander 7.81%3. Sanofi-Aventis 7.68%4. Societe Generale 6.19%5. AxA 5.45%6. Suez 4.23%7. France Telecom 3.72%8. Vivendi 3.70%9. Carrefour 3.25%10. Groupe Danone 3.11%Source: Bloomberg as of 25/10/06


43.56%

21.54%


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Term sheet n SGAM ETF Flexible CAC �0

SGAM ETF Flexible CAC �0 is the first ETF in French equities, via the CAC �0, and that offers permanent partial protection of your capital.


Legal form UCITS III, diversified mutual fund under French lawDate of first listing 19 october 2005Benchmark index CAC 40Currency euroAUM €43.63 million ‘Mini’ units ‘Size’ units Next dividend payout 29/12/06 29/12/06Minimum investment one unit one unitInitial NAV 1/100th of the index closing index closing price as price as of 18/10/05 published on 18/10/05Management fee maximum 1% maximum 0.50% per year, including taxes per year, including taxes initial maximum minimumExposure to CAC 40(2) 100% 100% 0%Permanent protection level(2) 80% of the last NAV of the preceding calendar year. In 2005, 80% of initial NAVProtection revisions(2) annual, each first business day of the calendar yearExchange Euronext Paris (NextTrack/Structured Funds segment)Subscription/redemption fees zero for stock market transactions(3)

‘Mini’ units ‘Size’ units

ISIN code FR0010239111 FR0010239129Reuters code F4M PA F40.PABloomberg code F4M FP F40 FPID F4M F40


Practical information

> How do I buy and sell SGAM structured ETFs?Structured ETFs are funds quoted continuously on the stock market. They are traded as easily as shares.To buy a SGAM ETF, you need only quote its ISIN code or symbol to your usual broker. You don’t need to open a specific account, as your existing securities account or equity savings plan will suffice.

> What fees will I have to pay?SGAM ETFs are not subject to entry or exit fees, apart from your broker’s usual fees for stock market transactions.Management fees are low and compare favourably with those on structured products with similar risk profiles.

SGAM ETF Flexible CAC 40

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CAC 40®


21.99%

21.54%

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Launched in 1985, the Nasdaq-100 is a US index composed of the one-hundred largest American and international stocks quoted on Nasdaq and chosen on the basis of capitalisation.With its one-hundred components, the index provides broad-based coverage of major industry groups, including computer hardware and software, media, biotechnology, retail trade and other cutting-edge sectors (excluding financials).

Top 10 shares on the 25/10/061. Apple Computer, Inc. 6.64%2. Microsoft Corporation 6.59%3. QuALCoMM Inc. 5.06%4. Google Inc. 4.43%5. Cisco Systems, Inc. 3.58%6. Intel Corporation 2.98%7. Amgen Inc. 2.81%8. oracle Corporation 2.78%9. Starbucks Corporation 2.76%10. Comcast Corp. 2.58%Source: Bloomberg as of 25/10/06

Consummer goods 2.76%

Telecommunication 1.60%

oil and Gas 0.28%

Basic Materials 0.34%

Technology 56.83%

Industry 5.9%

Services 18.10%

Sector breakdown

Health 14.19%

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ISIN code FR0010342592Reuters code LQQ.PABloomberg code LQQ FPID LQQ





Term sheet n SGAM ETF Leveraged Nasdaq-�00



Date of first listing 28 june 2006Benchmark index Nasdaq-100®

Currency euroMinimum investment one unitInitial NAV 1/100th of the index closing price as

of 27/06/06, pm 7.00 Paris timeManagement fee maximum 0.60% per year, including taxes Exposure to Nasdaq-100(2) maximum 200%, minimum 150%Subscription/redemption fees zero for stock market transactions(3)

Nasdaq-100®

Zoom n

Nasdaq-�00®: take advantage of leverage on technology stocks


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Nasdaq-100®

SGAM ETF Leveraged Nasdaq-100


21.25%

12.76%


PromoterSGAM Alternative InvestmentsImmeuble SGAM170, place Henri Regnault92043 Paris-La Défense cedexFrancewww.sgam-ai.com

Société Anonyme with authorised share capital of EUR 49,610,385410 704 571 RCS Nanterre

SGAM Alternative Investments

SGAM Alternative Investments is a wholly-owned subsidiary of Société Générale Asset Management, specialised in structured and indexed management, hedge funds, private equity and property management. It owes its success to a fruitful combination of its asset management and capital markets cultures, where a quest for absolute performance and innovation is blended with strict risk control.

With more than €42.7 billion under management at the end of September 2006 and 314 staff worldwide, and with the strategic and financial commitment of the Société Générale group, SGAM Alternative Investments is one of Europe’s leading alternative managers.

At the forefront of product innovation, SGAM Alternative Investments’ structured management department is developing management processes using sophisticated instruments and techniques.

Past performance is not indicative of future performance. Neither SGAM Alternative Investments nor SGAM Index nor any member of the Société Générale Asset Management Group guarantees the performance of any of its funds or any particular rate of return. In no event shall SGAM Alternative Investments nor SGAM Index nor any member of the Société Générale Asset Management Group be liable for any damages, including without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection with the content of the present newsletter or the use there of or inability to use by any party or any misspelling wording or mistyping. The investments and strategies discussed in the contents may not be suitable for all investors and are not obligations of or guaranteed by SGAM Alternative Investments nor SGAM Index nor any member of the Société Générale Asset Management Group. The contents do not constitute an offer or a solicitation of an offer to buy or sell securities, commodities and/or any other financial instruments. Investors should make their own analysis of the investment opportunity described in this document and talk to their usual advisers before investing in SGAM ETF.This document shall not be distributed or published unless permitted under applicable regulation. Please check that the regulation which is applicable to you does not prevent the purchase and/or the marketing of the SGAM ETF family of products.The fund prospectus can be downloaded from www.sgametf.com and is available on request.

SGAM ETF Leveraged CAC 40 and SGAM Flexible CAC 40 are fonds commun de placement authorised by the Autorité des Marchés Financiers on 4 october 2005. They were admitted to listing on Euronext Paris SA on 19 october 2005.Investors are invited to make up their own minds on this investment opportunity and, where appropriate, to seek the opinion of their usual advisers before buying units in SGAM ETF Leveraged CAC 40 or SGAM ETF Flexible CAC 40.The prospectuses for these funds may be downloaded from www.sgametf.com and are available upon request from the management company.‘CAC 40®’ is a trademark registered by Euronext Paris SA to designate an index that it calculates and publishes. Euronext Paris SA does not guarantee the value of the index at any given moment, nor the results or performance of any product based on it. ‘Euronext®’ and ‘NextTrack®’ are trademarks registered by Euronext Paris SA.

SGAM ETF Leveraged FSTEurofirst 80 and SGAM Flexible FSTEurofirst 80 are FCP fonds commun de placement authorised by the Autorité des Marchés Financiers on 10 March 2006. They were admitted to listing on Euronext Paris SA on 20 March 2006.Investors are invited to make up their own minds on this investment opportunity and, where appropriate, to seek the opinion of their usual advisers before buying units in SGAM ETF Leveraged FSTEurofirst 80 or SGAM ETF Flexible FSTEurofirst 80.The prospectuses for these funds may be downloaded from www.sgametf.com and are available upon request from the management company.The FTSEurofirst 80 index is calculated by FTSE International Limited (‘FTSE’). FTSE does not sponsor, endorse or promote these products. All copyrights in the index values and constituent lists rests in FTSE and Euronext NV. FTSE has authorised SGAM Index to use this information without constraint in connection with the development of these products.‘FTSE®’ is a trademark of the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE under licence. ‘FTSEurofirst 80’ is a trademark registered by FTSE and Euronext.‘Euronext®’ and ‘NextTrack®’ are trademarks registered by Euronext Paris SA.

Nasdaq®, Nasdaq-100®, and Nasdaq-100® Index, are trademarks of The Nasdaq Stock Market, Inc. (which with its affiliates is referred to as the ‘Corporations’) and are licensed for use by SGAM Index. The Product has not been passed on by the Corporations as to its legality or suitability. The Product is not issued, endorsed, sold, or promoted by the Corporations. THE CorPorATIoNS MAKE No WArrANTIES AND BEAr No LIABILITY WITH rESPECT To THE ProDuCT.

‘Dow Jones’, ‘SToxx’, ‘DJ Euro SToxx 50’ are trademarks and/or service marks of Dow Jones & Company, Inc. and/or SToxx Limited and have been licensed for use for certain purposes by SGAM INDEx S.A.SGAM Index S.A. SGAM ETF Leveraged DJ Euro SToxx 50 based on the Dow Jones Euro SToxx 50® are not sponsored, endorsed, sold or promoted by Dow Jones or SToxx, and neither Dow Jones nor SToxx makes any representation regarding the advisability of trading in such product.‘Dow Jones’, ‘SToxx’, ‘DJ Euro SToxx 50’ are trademarks and/or service marks of Dow Jones & Company, Inc. and/or SToxx Limited and have been licensed for use for certain purposes by SGAM INDEx S.A. SGAM Index S.A. SGAM ETF Flexible DJ Euro SToxx 50 based on the Dow Jones Euro SToxx 50® are not sponsored, endorsed, sold or promoted by Dow Jones or SToxx, and neither Dow Jones nor SToxx makes any representation regarding the advisability of trading in such product.

www.sgametf.com

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