perspectives.12.10-01.11_en by Clémence Derennes

December 2010 - January 2011

Perspectives

2011 Forecasts The year of many challenges //////// Macroeconomic analysis 2011: a year of imbalances? //////// Asset Allocation Solvency II, Basel III... //////// Focus on regulation An alternative view of management //////// Expertise Focus

www.am.natixis.com CORPORATE AND INVESTMENT BANKING / INVESTMENT SOLUTIONS / SPECIALIZED FINANCIAL SERVICES

SUMMARY Macroeconomic analysis

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Asset allocation Awards 2010

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Legal information 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 the UK): This material is provided by Natixis Global Associates S.A. or one of its branch offices listed below. 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. France: Natixis Global Associates International (n.509 471 173 RCS Paris). Registered office: 21 quai d'Austerlitz, 75013 Paris. Italy: Natixis Global Associates S.A. Succursale Italiana (Bank of Italy Register of Italian Asset Management Companies no 23458.3). Registered office: Via San Clemente, 1 - 20122, Milan,MI, Italy. Germany: Natixis Global Associates S.A., Zweigniederlassung Deutschland (Registration number: HRB 88541). Registered office: Im Trutz Frankfurt 55, Westend Carrée, 7. Floor, Frankfurt am Main 60322, Germany. Netherlands: Natixis Global Associates S.A., Nederlands filiaal (Registration number 50774670). Registered office: Evert van de Beekstraat 310, 1118CX Schiphol, the Netherlands. Sweden: Natixis Global Associates S.A. (Luxembourg) Nordics Filial (Registration number 516405-9601 - Swedish Companies Registration Office). Registered office: Master Samuelsgatan 60, 8th Floor, Stockholm 111 21, Sweden. • 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. Under Natixis Asset Management’s social responsibility policy, and in accordance with the treaties signed by the French government, the funds directly managed by Natixis Asset Management do not invest in any company that manufactures sells or stocks anti-personnel mines and cluster bombs.

Contacts Prospectus and sales documents required for subscription are available on demand: n Natixis Global Associates (Operations): offshoreops@ga.natixis.com n or CACEIS Luxembourg (Prime Transfer Agent): f b-reg-european-ta@eu.fasnetgroup.com - Tel.: (352) 47 67 70 78 n or Natixis Asset Management (Clients servicing): nam-service-clients@am.natixis.com

This document is strictly intended for professional clients.

This 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. GP 90-009) and licensed to provide investment management services in the EU. Publishing Director: F. Lenoir /// Editorial Committee:Th. Benoist, Ch. Lacoste, K. Massicot, Ph. Le Mée, R. Monclar, F. Nicolas, Ch. Point, S. de Quelen, ML. Rouy, JP. Snel, B. Thiery, Ph. Waechter ///

Coordination - Writing: C. Boutou, N. Clémot /// Conception graphique : G. Cosqueric /// Contributors: B. Boulay-Mégard, E. Bourdeix, R. Cyrille, I. Kobar, M. Louvrier-Clerc, A. Tiago.

PAGE 3

Editorial

As 2010 reaches its end, and 2011 has yet to be written… This special issue of Perspectives is dedicated to reviewing the past year and setting out our experts’ projections for the coming year, with the aim of “squaring the circle”. According to Philippe Waechter, Chief Economist of Natixis Asset Management, the economy is showing a very mixed picture at the end of 2010. However, the growth drivers for industrialized and emerging countries remain very different. In Philippe Waechter’s view, the industrialized countries will only see moderate growth, while emerging countries should converge towards a sustainable growth path in the medium term. Franck Nicolas, Head of Global Asset Allocation & ALM, also observes that growth has run out of steam in the developed economies, whereas the emerging countries are becoming increasingly independent. 2011 will also be marked by major regulatory changes for UCITS. Natixis Asset Management provides an overview of these changes, with reference to Solvency II, Basel III, UCITS IV, etc. In light of the current economic environment, our Focus Expertise carries an interview with Ibrahima Kobar, CIO Fixed Income and Emmanuel Bourdeix, CIO Equity, Asset Allocation & Structured Products, on the main trends that they expect to see in their respective areas of expertise. On behalf of all the teams at Natixis Asset Management, I would like to wish our readers a very happy New Year. We hope you will find these texts useful. As usual, you can also find the summary of Natixis Asset Management’s international offer [pages 14 to 16 of this issue].

Philippe zaouati

New website for Natixis AM

• The new version of the Natixis Asset Management website has just been launched, as part of wideranging review of our online communications. It will have all the latest market news, plus information on Natixis AM’s products and areas of expertise.

www.am.natixis.com • Natixis AM’s WebTV platform You will find: "Flash Marchés" videos and "Les Marchés en direct" podcasts, rounding up the week’s economics and financial news (only available in French).

www.webtv.am.natixis.com

Enjoy reading it,

Deputy CEO, Head of Business Development

Natixis Asset Management

Perspectives /// December 2010 - January 2011

PAGE 4

macro analysis

Since the recession began in the fall of 2008, the global economy has been oscillating between cooperation and confrontation...

2011, the year of many challenges  Cooperation When the situation was looking insurmountable, during the 2008/2009 winter, the implementation of coordinated strategies enabled a return to growth. At that time, the combined action taken by the governments and central banks of industrialized and emerging countries was highly effective. The success of the G20 meeting in London in April 2009 reflected the intention of all members to work together.

 Confrontation Starting from spring 2010, these collective efforts have gradually come to an end, leaving each party with the obligation to seek the necessary stimuli to facilitate the return to growth and equilibrium of the labor market. The failure of the G20 in Seoul in November 2010 is a good example of this situation. Each party hoped to benefit from a more positive environment to find solutions to its particular imbalances. But this did not come to fruition. The emerging countries increased their autonomy over this period, whereas the situation for the industrialized countries is more complex. While the recovery observed in 2009 generated a significant improvement in the economic environment, it did not reduce the imbalances born of the recession and banking and financial crisis.

Philippe waechter Chief Economist of Natixis Asset Management

At the end of 2010, most emerging countries are looking to manage their economic cycles and to converge towards a sustainable medium-term growth rate. For the industrialized countries, with the exception of Germany, the pace of the recovery has been too slow to reduce the imbalances caused by the crisis in the near term. As a result, the change in the balance of power between industrialized and emerging countries is reflected in the inability of global leaders to move in a common direction.

Perspectives /// December 2010 - January 2011

 2010: developed versus emerging countries The economy has been very mixed in 2010. Unlike what was observed before the crisis, this no longer only affects growth models. However, the difference in growth drivers for industrialized and emerging countries is still pertinent. In addition, there is greater uncertainty over the model in place in the industrialized countries. The shock caused by the banking and financial crisis has yet to be fully absorbed, and is creating dynamics that are different to those that predated the crisis. The actions of each economic agent have been affected as the constraints to which they are subject have changed. The future path of the economy is now marked by a new uncertainty, which limits risk taking. From this standpoint, there is a clear distinction between developed and emerging countries, with the path of the latter being perceived as more deterministic than that of the industrialized countries. This may become a factor that benefits emerging countries assets on the financial markets.

 2011: industrialized countries and moderate growth The uncertain economic future means that growth is likely to remain moderate in the industrialized countries in 2011. The growth rate should be positive, but below pre-crisis rates. However, the probability of a double dip recession is very low, for both the US and Europe. The difficulties in this scenario comes from the fact that it does not give the opportunity to establish the “usual” post-crisis dynamic, which would quickly put activity back onto a path to robust growth.

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PAGE 5

macro analysis

Coming out of a recession when there has not been a financial crisis usually means a sudden and strong recovery in growth, such as was seen in the emerging countries. The shock is thus quickly absorbed and the economy can begin to move forward again. But in the event of a financial and banking crisis, the recovery is less straightforward because the excesses that led to the crisis have to be dealt with first, and this is a process that can take some time. In the first stage of reducing these excesses, there is often a deterioration in budgetary indicators, particularly a rise in public debt. The fiscal consolidation that follows limits the recovery in activity, and requires monetary policy to be very accommodative if it is to be effective. This is the scenario that is likely to apply to the US and European economies. Two observations: • the adoption by the Fed of an even more accommodative monetary policy including quantitative easing suggests the need for European countries to adopt more accommodative strategies in order to keep in step with other industrialized countries; • a more accommodative monetary policy in Europe could offset the extremely restrictive effects of the fiscal policies implemented by various European countries. This would require a change of direction, which in the short term, should not be adopted at the expense of activity and employment.

 Focus on the United States and Europe In the US The labor market should remain fragile. At the end of 2010, employment levels are still considerably below what they were before the crisis. The real estate market

Natixis Asset Management

will also take a long time to take off again. Quantitative easing may limit the weakness of domestic demand, but the trend remains uncertain. One of the objectives of the Federal Reserve in adopting its new monetary policy is to reduce the risk of deflation. This is an important issue for the economy. In fact, US households are still highly indebted despite a trend to pay down debt which has been place since at least two years. If the economy enters deflation, the impact on domestic demand would be extremely negative, and this would have a marked detrimental effect on the current phase of the cycle. This is a situation that the Fed wants to avoid at all costs, and is probably the main reason behind its new strategy.

vestors. A new institution of this kind should boost European growth.

 Conclusion The global situation is complex, as the shock caused by a financial crisis always takes a long time to be absorbed. During this process, policies cannot be systematically restrictive, as growth in activity and employment remains fragile. In a changing world, in which the equilibrium is shifting between industrialized and emerging countries, taking risks with an internal dynamic that will be fragile for some time to come could be extremely harmful. /// Written on 01/12/2010

In Europe Heterogeneity seems to be the order of the day at the end of 2010, with three distinct growth models: • in Germany, with a growth dependent on global activity. It will continue to benefit from this situation in 2011 if the emerging countries manage to get onto a sustainable growth path; • in France, growth is moderate: domestic demand is robust, but exports have declined significantly. A real recovery in growth cannot therefore become established; • in peripheral countries, the situation is more complex. These countries’ growth models are no longer functioning properly and public finance imbalances have accumulated. Their ability to address these imbalances is thus all the more limited. A common solution will therefore be necessary. However, this means that new institutions will have to be created within which all the participants in the financing of the peripheral countries will have to receive some benefit, whether they are governments or in-

Perspectives /// December 2010 - January 2011

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Asset Allocation

The developed economies’ model of fuelling growth through excess debt levels seems to have run out of steam…

2011, a year of imbalances? Will there be a rebalancing of the relationship between emerging and developed countries? Will the standard of living in developed regions stagnate, or even sharply deteriorate to the benefit of regions enjoying strong growth? We will only know the answer to this question from 2011, but it will remain at the heart of investment strategies. The markets will be particularly attentive to the state of the public finances if the following scenario is confirmed: global growth fairly stable, weak growth in western countries (but with no double dip), accommodative monetary policies and very low inflation. Only the efforts made in this area can lower the risk premiums for markets.

as they benefit from accommodative monetary policies. The reflation of the developed economies should keep in check the rise of currencies that are currently benefiting from deflationary fears (the yen and Swiss franc).

 Asset Class

Emerging regions should continue to post attractive performances. Despite high valuations, dynamic growth in these regions will continue to provide support. But, as too much of a consensus has been reached on certain themes, it will probably be necessary to be more selective in looking for investment ideas oriented towards domestic consumption, the need for services (to accelerate productivity gains and encourage autonomous growth), without forgetting the western firms that are well-placed to export their expertise. This would be likely to lead to sector rotation, including in relation to the stock markets of developed countries, to the detriment of cyclical stocks.

Equities Earnings pear share (EPS) growth of 12 % in 2011 and 10 % in 2012 seems perfectly achievable. Earnings growth will not be sufficient to encourage firms to invest to any significant degree. The improvement in the labor market should continue however. The equities market could therefore benefit from positive growth, modest valuations and good levels of earnings. No spectacular rises are expected, however, as risk aversion remains high.

Bonds The search for yields will continue to dominate, with comparisons between types of issuer at the forefront. In particular, the risk adjusted profitability of “core” and “peripheral”, sovereign debt, government and corporate bonds and developed and emerging country issuers will be under the spotlight. It seems likely that if a form of economic governance emerges in the eurozone, the spreads of peripheral issuers will narrow somewhat. But it would still take time for the situation to return to normal. This would strongly benefit corporate bonds, if the banking sector continues to recover. Similarly, vigilance would be required with regard to the debt of the less virtuous and dynamic emerging countries. Significant doubts remain with regard to the UK.

franck nicolas Head of Global Asset Allocation & ALM

Currencies Diverging economic policies will continue to be reflected in market volatility. Emerging country currencies will remain at the center of concerns

Perspectives /// December 2010 - January 2011

Commodities Gold should lose some of its dynamism if concern over deflation recedes and if real interest rates bottom out. On the other hand, some bottlenecks could resurface by 2012 for certain commodities, benefiting agricultural commodities and industrial metals.

 Regions and styles

 Risks Once again, there are a number of stumbling blocks: reflation could fail, and growth, which is already weak, could suffer as a result of the increase in debt in an environment in which debt-to-GDP ratios have already risen considerably. In this scenario, the safest assets will remain the same: long-duration, highlyrated bonds, dollars and gold. On the contrary, a rise of the inflation in emerging countries would make run a risk of a monetary tightening harmful to the growth. If it does not materialize, it would risk to export this inflation in industrialized countries with fatal consequences on the margins of companies via the increase of production costs. The emerging currencies are to be privileged in the scenario. /// Written on 01/12/2010

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PAGE 7

awards 2010

Natixis Asset Management: Asset Management expertises distinguished Funds Europe Awards - 2010 n 1st Prize - Impact Funds Climate Change(1) - category "Business - European Fund Launch of the year"

Corbeilles - Mieux Vivre Votre Argent - 2010 n 3rd Corbeille d'Or - Banque Populaire network(2) - category “Network banks” over 1 year n Prize for the Best Equity Range - Banque Populaire network(2) - category “Network banks” over 1 year n 3rd Corbeille for Employee Savings - Natixis Interépargne - employee collective investment funds rated over 5 years(3)

Les Actifs du Patrimoine - L’Agefi Actifs - 2010 n Jury Prize - Impact Funds Climate Change(1) - category "Innovation"

Trophées des meilleurs sicav et fonds - Le Revenu - 2010 n Golden Trophy - Best range of “international bond funds” - category "Specialist providers" over 3 years(4) n Golden Trophy - Best range of “balanced funds" - category "Insurers" over 3 years(4) n Golden Trophy - Best overall “performance" - category "Insurers" over 3 years(4)

Trophées des meilleurs sicav et fonds - Le Revenu - 2010 n Silver Trophy - Best range of “euro bond funds” - category "Networks banks" over 3 years(5) n Silver Trophy - Best range of “sector funds”- category "Networks banks" over 3 years(2)

Trophées des meilleurs sicav et fonds - Le Revenu - 2010 n Bronze Trophy - Best range of “euro equities funds” - category "Insurers" over 3 years(4)

Victoires des SICAV - La Tribune / Morningstar - 2010 n 2nd prize "Establishments" - Caisses d'Epargne Network- category "Specialised range - Bonds" over 5 years(5) n 3rd prize "Establishments" - Natixis Asset Management - category "Broad range - Bonds" over 5 years

Lipper Fund Awards (France) - 2010 n 1st prize - CNP Assur France(4) - category "Mixed Asset EUR Balanced - Eurozone" over 3, 5 and 10 years n 1st prize - Natixis Horizon 2015(6) - category "Target Maturity Mixed Asset EUR 2015" over 3 years

Grands Prix Eurofonds / Fundclass - Le Monde - 2010 n 1st place among French management companies - Natixis Asset Management category "Companies with over 101 ranked funds" (France)

(1) Impact Funds Climate Change is a sub-fund of Impact Funds, a Luxembourg-registered SICAV authorized by the AMF to be marketed in France. Capital invested in Impact Funds Climate Change is not guaranteed. Past performance by the fund is no guarantee of future results. Before investing, all potential investors must be in possession of a copy of the fund’s simplified prospectus wich may be obtained from Natixis Asset Management or downloaded directly from www.am.natixis.com/climatechange. (2) Open-end funds managed by Natixis Asset Management and distributed by the Banque Populaire network. (3) Employee collective investment fund managed by Natixis Asset Management and distributed by Natixis Interépargne. (4) Open-end funds managed by Natixis Asset Management and distributed by the CNP. (5) Open-end funds managed by Natixis Asset Management and distributed by the Caisse d'Epargne network. (6) Natixis Horizon 2015 is a sub-fund Natixis Horizon. The feeder funds of Natixis Horizon 2015 are the “2015” sub-funds of the Natixis Horizon Retraite and Avenir Retraite FCPEs (employee investment funds), which are marketed by Natixis Interépargne as PERCO (collective pension savings) plans. The figures mentioned refer to previous years. The Fund’s past performance or reference to any rankings or awards received by it or its manager cannot be interpreted as indicating the future performance of the funds or of their managers.

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www.am.natixis.com section About Natixis AM > Awards Perspectives /// December 2010 - January 2011

PAGE 8

FOCUS on regulation

christophe point Head of Sales

Regulatory change: what will this mean for Natixis Asset Management? Natixis Asset Management pays very close attention to any changes in regulations (Solvency II, Basel III, UCITS IV, etc.). We aim to take a proactive approach to adopting new regulations. Thus, in 2010, we have sought to: n train the management and sales teams to help insurance companies to apply the new rules laid down in Solvency II to their activities; n integrate “increased transparency” into our insurance management processes; n establish reporting channels in order, in the interests of transparency, to state the solvency capital requirement (SCR)* for a range of UCITS, dedicated funds and mandates sold in relation to insurance firms. Our sales teams are available now to advise our clients on these subjects and to offer them investment services and solutions that meet their needs.

Regulation: latest developments The next two years will see a number of changes in regulations, including: • the implementation of Solvency II reforms for the insurance sector (insurance companies, mutual insurers, pension institutions) and Basel III, the equivalent reform for the banking industry; • introduction of a new AMF classification for money market UCITS; • the UCITS IV* directive.

 Solvency II Solvency II was launched in 2004, and represents the future framework for prudential regulation in the insurance sector. It will enter force in October 2012. The aim of Solvency II is to integrate risk management more fully into the regulation of insurance companies. This reform imposes a profoundly different approach to capital adequacy, moving away from a straightforward asset/liability approach; as a result, insurance companies will have to have sufficient capital to cover the risks in their portfolios. This means that they must hold enough capital to guarantee 99.5% of their obligations over a one year period. The optimization of capital will therefore be necessary. This is intended to increase transparency. The capital requirement to ensure solvency is defined by the SCR (solvency capital

requirement) ratio and relates to two main risk categories: • operational risks • basic risks, including market risks (interest rate risk, global equity risk, other equity risk, spread/credit, real estate and forex risks), counterparty risk, “non-life” risk, “life” risk and “health” risk.

 Money market UCITS: new AMF classification Initiated by the CESR*, the new European regulations provide for the introduction of two categories of money market funds on July 1, 2011: • short-term money market funds • money market funds

Capital requirement by type of asset (standard formula) Capital requirement (% stock market value)

question to…

“Other equities” category

Listed stocks

Real estate

8-year zerocoupon A rating (credit risk)

Private equity

Hedge funds

Commodities

Emerging markets

Source: Natixis Asset Management

*see “Definition of key terms used”

Perspectives /// December 2010 - January 2011

Natixis Asset Management

PAGE 9

FOCUS on regulation

These new categories for classifying money market funds will have their own characteristics (notably in terms of average life and maximum maturity) and will increase the operational scope of money market UCITS. A transition period will be allowed until December 31, 2011 for existing European money market UCITS to be brought into line with one of these classifications.

 UCITS IV The UCITS IV directive, which will enter force on July 1, 2011, is aimed at improving the efficiency of the single market by strengthening the competitiveness of the asset management industry in facilitating fund distribution, while at the same time maintaining current levels of protection for investors. The directive has four main objectives.

Introduction of Key Investor Information (KII)* From July 1, 2011, KII will replace the simplified prospectus. This new format will be common to all EU countries. The provision of information in standard format will make cross-border comparison of UCITS IV-type funds much easier.

Simplified registration procedure The time needed to obtain authorization to distribute a UCITS in another country will be a maximum of 10 days, compared to an average of two months at present. In addition, a fund manager will be able, if it has obtained approval in its home country, to create and manage funds in other member states without being established there.

Increasing in the European UCITS'size and economies of scale UCITS IV also : • cross-border merger of EU-domiciled funds • the option to have a master fund registered in one country, and feeder funds registered in other EU countries

 Conclusion

written on 24/11/2010 by Antoine Tiago Deputy Head of sales

UCITS IV

Undertakings for Collective Investment in Transferable Securities IV. n

Increased transparency

Optimization of the amount of regulatory capital supported by investments deemed risky under Solvency II, for the same level of risk and expected performance. n

Solvency II, Basel III, the reclassification of money market UCITS and UCITS IV all represent major regulatory changes for 2011, which Natixis Asset Management, as an asset manager at European and international level, is already seeking to take into account within its organization and range of investment solutions. ///

SCR

Solvency Capital Required amount of capital necessary to absorb the shock caused by a major risk (e.g.: an exceptional incident, an asset shock, etc.) n

KII

Key Investor Information Document providing essential information for investors. n

CESR

Committee of European Securities Regulators.

Cooperation of local regulators The directive will be transposed by all local regulators, thereby securing the principle of cooperation ensured by the CESR* and a level of protection for investors at least equivalent to that established in their home country.

Definition of key terms used

Consult the dedicated Flash Info www.am.natixis.com [Subscription section]

*see “Definition of key terms used”

Natixis Asset Management

Perspectives /// December 2010 - January 2011

PAGE 10

expertise focus

2011: forecasts 2011 will see intense periods of risk aversion give way to appetite for risky assets and vice versa. An uncertain and volatile environment will require proactive asset allocation as well as a selective approach within each asset class.

WHAT WILL BE THE ADVANTAGES FOR NATIXIS AM? Thanks to its new organization and the strengthening of its teams, Natixis AM aims to offer investors the best of both worlds, through: n a multiboutique model, via small management teams with a high degree of autonomy to make investment decisions;

the organization of a large asset manager that has strong and experienced support teams (credit and equity analysts, quantitative engineers, economists, traders, risk management specialists, etc). n

“We are convinced that this organization will enable us to rise to future challenges in a flexible, proactive and innovative way.”

emmanuel bourdeix

ibrahima kobar

2011: an alternative view of management Interview with: Ibrahima Kobar, CIO Fixed-income, and Emmanuel Bourdeix, CIO Equity, Asset Allocation & Structured Products

 How do you see the forecasts for next year? Ibrahima Kobar and Emmanuel Bourdeix At this point, one thing that seems certain to us is that regardless of asset class or region, 2011 will be more of a “tactical” than a “strategic” year. In a very uncertain environment with regard to all economic variables (notably growth, inflation and public debt), in both developed and emerging countries, it is somewhat difficult to make any clear-cut pronouncements for individual asset classes - especially as many of the main themes for the markets are already, at least partly, priced in: lower yields and tighter credit spreads, superior performance for emerging versus developed markets, the weakening of the

dollar, the rise in commodity prices, etc. These themes are not encouraging long-term investors to go back to driving the markets, and will mean that short-term flows and asset switching are the order of the day instead. The uncertain environment, which will see intense periods of risk aversion give way to appetite for risky assets and vice versa, will require proactive asset allocation as well as a selective approach: proactive asset allocation, to be able to make adjustments in response to market ups and downs, and a selective approach, as we are anticipating significant disparities in performance, especially in different regions.

2011 will be more of a “tactical” than a “strategic” year. Ibrahima Kobar

Natixis Asset Management

Perspectives /// December 2010 - January 2011

PAGE 11

expertise focus

Given growing market volatility, an alternative view of management is required, especially with regard to equities and risk profiles. Emmanuel Bourdeix

 More specifically, which market segments appear to offer the brightest prospects in your area of expertise? Ibrahima Kobar

Emmanuel Bourdeix

We remain positive with regard to the bond market for 2011. Despite the good performance of this asset class in 2010, we are still far from normalized levels and expect spreads to continue tightening next year.

We expect to see high levels of volatility in medium-/longterm asset classes in 2011, in both developed and emerging countries. In this context, we are convinced that several product profiles should meet the requirements of many equity market investors: • products with an asymmetric risk profile, designed to benefit when markets are rising, while mitigating risks when they are falling; • absolute performance products; • equity instruments that are low-risk or benefit from a partial capital guarantee.

Three market segments seem particularly attractive: short-term credit, high yield bonds and convertibles. Although this may appear unlikely on the face of it, the sovereign bond market should also offer attractive potential in terms of country (or relative value) allocation. In the eurozone in particular, we now see three groups (Germany, “semi-core" countries, including France, and peripheral countries) rather than two. This situation increases the opportunities for switching between issuer countries. This also applies to emerging market debt, where the differences are even greater, making a highly selective approach by country extremely important. For these markets as a whole, it is the ability of the analysts and management teams to select the securities offering very solid fundamentals that will make the difference in performance terms. Lastly, in this uncertain macroeconomic context, multistrategy bond products, for both long only and absolute performance strategies, will also have their place.

Natixis Asset Management

The management teams of Natixis Asset Management have developed various areas of expertise along these lines: • flexible funds, which offer a short-, medium- or long-term horizon, thereby enabling fund managers to vary exposure as appropriate and to be highly proactive with regard to the different markets (equities, bonds and currencies), depending on their projections; • absolute performance funds developed by Natixis Asset Management’s diversified management teams offered to investors aiming to benefit from the widest spectrum of asset classes, regions and directional strategies (long or short), and asset switching; • minimum variance products offering exposure to the equity markets with volatility reduced by around 20%, thanks to a managed volatility strategy. These funds favor stocks with levels of volatility that are low historically or compared to the market as a whole; • various types of guaranteed capital products (where capital is guaranteed throughout the investment period and not just at maturity), which were recently developed by Natixis Asset Management’s structured management teams for investors prioritizing the protection of their capital.

Perspectives /// December 2010 - January 2011

PAGE 12

expertise focus

 Beyond 2011, how do you see your respective markets? What will be the main avenues for growth? Ibrahima Kobar

Emmanuel Bourdeix

Fixed income market managers are facing a number of challenges: increasing volatility in all segments of the bond market, investors whose risk aversion has grown considerably since 2007, and the risk of a rise in interest rates.

Given growing market volatility, it is worth reconsidering equities, especially with regard to risk profiles. The need to take an alternative view of management is reinforced by an increasingly restrictive regulatory environment in terms of capital requirements. We therefore believe that our developments in the area of flexible management, managed volatility equity funds and absolute performance funds are key.

In light of these challenges, we have identified three main avenues for growth: • the strengthening of our areas of expertise beyond the traditional fixed income asset classes, particularly in high yield, emerging market debt and the currency market; though previously considered solely as sources of diversification, these markets should now be seen as core areas of expertise in their own right; • an ever-more subtle appreciation of risk, including with regard to asset classes traditionally seen as less risky. For example, following the recent crisis, Natixis Asset Management’s fixed income managers monitor credit and liquidity risk in their analysis of sovereign bond issues (in the past these indicators were solely applied to corporate issues); • the development of absolute performance expertise, for individual asset classes (credit, forex, volatility on the fixed income markets) or multi-asset class strategies. Natixis Asset Management has been strengthening its teams for over a year in order to achieve these strategic objectives, in terms of credit analysis and management, emerging market debt and forex management.

We note that for some years now there has been a dual trend in the industry, with index management and ETFs on one side and conviction-based management on the other. Natixis Asset Management has clearly opted for the second approach. In this context, the aim of our new core/thematic/insurance organization is to apply our multiboutique model to equity management. Within the thematic area, six management teams known as “satellites” look for superior and recurrent performances via a process based on management styles (value or event driven for example), in target universes (e.g. European SMEs or international or emerging market equities), using specific approaches (long-term investments, gold, land or agri-food stocks for example). The best ideas from these different teams are added to those generated by our European managers and analysts who contribute to the company’s core portfolios and insurance management.

A common thread between the fixed income and equity markets in relation to strategy is the need to take into consideration an increasingly global market and the growing role of emerging countries in the global economy. In this context, the fixed income and equity teams at Natixis Asset Management have strengthened their analysis and management teams in these now strategic areas. At the same time, and independently of the market environment, we have made responsible management a strategic avenue for growth. As a pioneer in solidarity asset management and socially responsible investment with more than 25 years’ experience, Natixis Asset Management is convinced that management teams which take into account sustainable development criteria satisfy the requirements of a growing number of investors who seek some meaning in their investments. In this regard, the reformulation of our processes for carrying out non-financial research and the drafting of a conviction-based SRI management process will help increase the social commitment element of our asset management activities even further. Written on 03/12/2010

Natixis Asset Management

Perspectives /// December 2010 - January 2011

PAGE 13

FOCUS EXPERTISE

Complementary expertise throughout the world Spotlight on our French and US affiliates Natixis Global Asset Management's multiboutique model offers special access to the expertise of a number of international fund managers, including in the US and Asia. This expertise supplements the know-how of Natixis Asset Management, and includes specialized knowledge of different management types or geographical regions. An insight…

 Selective approach In an uncertain environment characterized by significant disparities between asset classes and geographical regions, a conviction-based selective approach is particularly appropriate for identifying opportunities in individual markets.

To provide this, Harris Associates offers a strategy based on a value fundamentals approach in a global equities universe. This strategy can be accessed via its open-ended fund, the Harris Associates Global Value Fund.

Further information: www.harrisassoc.com

 Protection

 Proactive strategy

(1)

GATEWAY

I NVESTMENT A DVISERS, LLC

Advisers offers a strategy of long-term exposure to the US markets. This is accompanied by active management of derivatives on an index for partial hedging of the portfolio, thereby reducing its volatility. This strategy can be accessed via its openended fund, the Gateway US Equity Fund. Loomis, Sayles & Company also offers an absolute return strategy in the global fixed income universe, which aims to deliver positive performance irrespective of the market conditions via the Loomis Sayles Absolute Strategies Bond Fund.

Further information: www.loomissayles.com

Dorval Finance(2), which specializes in flexible asset management, offers a range of funds in a single asset class (exposure to equities can be anything from 0% to 100%), which are designed to counter volatility and equity market uncertainty. This active management approach covers eurozone, European, emerging market and global equities via the Dorval Convictions PEA, Dorval Convictions, Dorval Flexible Emergents and Dorval Flexible Monde funds.

Further information: www.dorvalfinance.fr (1) The funds mentioned do not guarantee capital or performance. (2) Natixis Asset Management acquired a 25% stake in Dorval Finance on 09/12/2008 in the context of a partnership in the independent financial adviser sector.

In the area of fixed income, Loomis, Sayles & Company offers an opportunist strategy for emerging market bonds using a bottom up selection process that goes beyond only taking into account key macroeconomic factors for defining portfolio allocation. This expertise can be accessed in particular via the Loomis Sayles Emerging Debt and Currencies Fund.

Further information: www.loomissayles.com

Natixis Asset Management

Perspectives /// December 2010 - January 2011

PAGE 14

our international Product range

Brief overview of our international product range The key expertise of Natixis Asset Management dedicated to international clients are gathered in n 7 sub-funds of the Natixis International Funds (Lux) I SICAV and the Impact Funds SICAV (pages 8 to 9), n and in a selection of 24 complementary funds covering all asset classes (listed on page 10).

Sub-funds of the Natixis International Funds SICAV

Isabelle Delannée-Méric

Natixis Euro Aggregate Plus Fund Benefit from a broad range of fixed income investment opportunities • 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

I, A I, D R, A R, D

EUR EUR EUR EUR

LU0161120547 LU0391146155 LU0161121271 LU0390502184

Sophie Potard

Natixis Global Inflation Fund Get the most out of diversification in inflation-indexed bonds in a global universe • Investment universe: International inflation-linked bonds • Benchmark: Barclays World Government Inflation linked all maturities Index hedged in euro • Minimum recommended investment period: 2 years

H-I, A H-I, D I, A I, D R, A R, D

USD USD EUR EUR EUR EUR

LU0390502267 LU0390502341 LU0255251166 LU0255251596 LU0255251679 LU0255251752

Christine Barbier

Natixis Impact Euro Corporate Bond Fund Combining responsability and conviction-based strategies in the eurocredit universe • Investment universe: Mainly Euro-denominated investment grade debt securities • Benchmark: Barclays Euro Aggregate Corporate Index • Minimum recommended investment period: 3 years

I, A I, D R, A R, D

EUR EUR EUR EUR

LU0155376477 LU0391146072 LU0155380156 LU0390502770

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 Asset Management

Perspectives /// December 2010 - January 2011

PAGE 15

our international Product range

Sub-funds of the Natixis International Funds SICAV

Matthieu Belondrade & François Théret

Natixis Emerging Europe Fund Get the most out of the growth in the emerging European zone as part of a conviction management strategy • Investment universe: Emerging Europe Equities • Benchmark: MSCI Emerging Europe Index (indicative only) • Minimum recommended investment period: 5 years • Risk Indicator: Target tracking-error ex ante between 6 and 10

I, A I, A I, D R, A R, A R, D

EUR USD USD EUR USD USD

LU0147917792 LU0095830922 LU0095831060 LU0147918923 LU0084288595 LU0084288678

Thierry Cuypers

Natixis Europe Smaller Companies Fund Make the most of attractive European small and mid caps in a conviction investment style • I nvestment universe: European Equities •B enchmark: MSCI Europe Small Caps NDR (indicative only) •M inimum recommended investment period: 5 years •R isk Indicator: Target tracking-error ex ante between 2 and 7 (indicative, barring crisis context)

I, A I, D R, A R, D

EUR EUR EUR EUR

LU0095827381 LU0095828272 LU0064070138 LU0064070211

Christine Lebreton

Natixis Impact Europe Equities Fund Benefit from the growth potential of socially responsible European companies through conviction-based management • Investment universe: European equities • Benchmark: MSCI Europe (indicative only) • Minimum recommended investment period: 5 years

I, A I, D R, A R, D

EUR EUR EUR EUR

LU0095828512 LU0095828785 LU0066549592 LU0066549832

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 Asset Management

Perspectives /// December 2010 - January 2011

PAGE 16

our international Product range

Sub-fund of the Impact Funds SICAV

Clotilde Basselier & Suzanne Senellart

Impact Funds Climate Change Reconciling climate change with a performance oriented strategy in a global equity fund • Investment universe: Global equities • Benchmark: The MSCI World index (indicative only). • Minimum recommended investment period: 5 years

I, C I, C J, C

USD EUR EUR

LU0448199025 LU0448199371 LU0448199454

A selection of 24 complementary funds This quarterly reviewed list of funds aims to highlight Natixis Asset Management's most innovative products and its wide range of expertise. Fund name

Fixed Income

Money Market

Asset Class

Natixis Cash Première

IA: FR0010157834

Natixis Cash A1P1

IA: FR0010322438

Natixis Cash Eonia

IA: FR0010298943

Natixis Tréso Euribor 3 mois

IA: FR0010831693

Natixis Tréso Plus 3 mois

IA: FR0007075122

Natixis Court Terme 6 mois

IA: FR0010885236

Natixis Souverains Euro 1-3

IA: FR0010208421

Natixis Souverains Euro 3-5

IA: FR0010036400

Natrixis Souverains Euro 5-7

A: FR0010201699

Natixis Souverains Euro 7-10 Natixis Souverains Euro Natixis Inflation Euro Natixis Obli Opportunités 12 mois

Equity

Natixis Crédit Euro

Alternative investment

Share and ISIN code

FR0000449092 IA: FR0010655456 I: FR0010680223 IA: FR0010796391 I: FR0010171108

Natixis Convertibles Euro

IA: FR0010658963

Natixis Convertibles Europe

IA: FR0010171678

Natixis Actions Euro Value

IA: FR0010270025

Natixis Actions US Growth

IA: FR0010256404

Sonic Monde

IA €: FR0010555797

Natixis Actions Global émergents

IA: FR0010711051

Natixis Performance Strategic Bond

IA: FR0010008250

Natixis Performance Swap Arbitrage

IA: FR0010654921

Natixis Performance Active Allocation

IA: FR0010688812

Natixis Constellation European Event

IA €: LU0161071237

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.

Perspectives /// December 2010 - January 2011

Natixis Asset Management

PAGE 17

NEWs product news

Congratulations! The Impact Funds Climate Change, a fund launched by Natixis Asset Management in the fourth quarter of 2009, recently celebrated its first year with another award in the bag.

Impact Funds Climate Change: in brief Launched in October 2009 by Natixis Asset Management, a pioneer in socially responsible investment with more than 25 years’ experience, Impact Funds Climate Change made its move at the right time. Its investment strategy focused on the theme of climate change and its exposure to emerging markets has really paid off. A sub-fund of the Luxembourg-registered Impact Funds SICAV, Impact Funds Climate Change targets long-term capital growth by investing in companies whose activities contribute to: • reducing greenhouse gas emissions • adapting to the unavoidable consequences of climate change • managing natural resources more efficiently The fund’s investment universe covers a very wide spectrum of sectors and potentially, all of the world’s stock markets. Between 10/05/09 and 10/29/10, the fund’s I/C euro shares delivered a net annualized performance* of 14.30%, with volatility of 23.39%, versus a performance of 19.46% and volatility of 10.42% for its ex-post benchmark, the MSCI World.

“Ultra-distinguished” expertise In 2010, Impact Funds Climate Change was awarded with two awards honoring its original and innovative characteristics:

The Responsible Investor Award 2010 For the third consecutive year, Natixis Asset Management, a pioneer of SRI of more than 25 years’ standing, and Amadeis(1) joined Les Échos in sponsoring the Responsible Investor Award. The 2010 award was given to FRR(2) last November following the deliberations of the jury, which was made up of individuals with a strong awareness of SRI issues and chaired this year by Louis Schweitzer, the former chairman of HALDE(3). This award honors the remarkable work done by the FRR in the field of socially responsible investment, by: • promoting transparency and publication of ESG data • investing in euro and US credits with obligations on managers to take account of ESG criteria and report on how these influence their investment decisions • increasing the emphasis on active shareholder approaches to companies posing extra-financial risks.

www.prixinvestisseurresponsable.com

the special “Innovation” Jury Prize in L’Agefi Actifs du Patrimoine 2010 awards 1st prize "Business European Fund Launch of the Year" category Funds Europe Awards 2010 The juries in both cases were impressed by the fund’s investment strategy and its 360° approach to the challenges of climate change, as well as the contribution of the NAM Climate Change Scientific Advisory Committee.

*Return net of management fees and operating expenses. The figures mentioned refer to previous years. Past performance or references to any rankings or awards are not necessarily indicators of the fund’s future results or the future achievements of its managers. (Source: Natixis Asset Management).

Natixis Asset Management

The 2010 winner and jury

(1) Amadeis is an independent asset management advisory firm that supports institutional investors in refining their investment strategies [For further information: http://amadeis.pagesperso-orange.fr/]. (2) The Fonds de Réserve pour les Retraites Françaises (FRR) is a public fund that helps to smooth the burden on the French pension system over time. [For further information: www.fondsdereserve.fr] (3) Haute Autorité de Lutte contre les Discriminations et pour l’Egalité (HALDE) is the French Equal Opportunities and Anti-Discrimination Commission. [For further information: www.halde.fr]

Perspectives /// December 2010 - January 2011

www.am.natixis.com Natixis Multimanager Subsidiary of Natixis Asset Management A French simplified joint-stock company Share Capital of 7 536 452 € RCS Number 438 284 192 Paris Regulated by AMF under n°GP 01-054 Registered Office: 21 quai d’Austerlitz 75 634 Paris, Cedex 13 - Tel. +33 1 78 40 32 00 www.multimanager.natixis.com

Perspectives is a Natixis Asset Management's publication - Natixis Asset Management - Communications Department - Business Development -

Natixis Asset Management Limited Liability Company Share Capital 50 434 604,76 € RCS Number 329 450 738 Paris Regulated by AMF under n°GP 90-009 Registered Office: 21 quai d’Austerlitz 75 634 Paris, Cedex 13 - Tel. +33 1 78 40 80 00