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perspectives february 2010

Macro Analysis europe runs into some turbulenceAsset Allocation risk of emerging markets overheating? Product Focus Natixis actions Global emergents

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Publishing Director: F. LenoirEditorial Committee: T. Benoist, S. de Quelen,Ph. Le Mée, R. Monclar, F. Nicolas, Ch. Point,Ch. Lacoste, JP. Snel, B. Thiery, Ph. WaechterCoordination - Writing: N. ClémotHead of design: F. DupertuysContributors: L. Faure, M. Louvrier, C. Metz, P. Radot

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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. GP90009) and licensed to provide investment management services in the EU.

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3February 2010www.am.natixis.com

PhiliPPe zaouatiHead of Business Development

The interaction between developed and emerging countries will be a key factor in 2010. The latter have effectively returned to high activity levels whereas the developed countries are still being significantly impacted by the recession.

The challenge is crucial for Europe where there are still no signs of a broad-based recovery. According to Philippe Waechter, Chief Economist, the rules in force within the euro zone are functioning less efficiently than in the past. They need to be redefined in order to reinforce the euro’s institutional construction.

The opportunities thus seem to lie on the side of the emerging countries which are differentiating themselves with a real growth momentum and a commitment to the implementation of stimulus packages. For Pierre Radot and Christoph Metz, co-portfolio managers of the Natixis Actions Global Emergents fund, the emerging countries benefit from an intact growth potential and attractive valuations which point to some attractive medium-long term investment opportunities.

Some question marks nonetheless remain on the emerging countries according to Franck Nicolas, Head of Global Asset Allocation & ALM, such as fears of overheating in China or the current credit tightening measures which could rapidly lead to increases in interest rates.

As usual you can also find the summary of Natixis Asset Management’s international offer [pages 8 to 10 of this edition].

Enjoy reading it,

Editorial

4 February 2010 www.am.natixis.com

n Differences within the euro zoneThe differences can be discerned via two simple economic indicators which shed light on the prolonged impact of the recession on the euro zone's economic environment.

The first indicator is economic: the unemployment rate During the cycle of the early 2000s, we witnessed a convergence in the unemployment rate profiles of the countries in the zone. While the gaps between countries were significantly reduced, this is no longer the case. In Spain and in Ireland, the downturn in the employment market is very pronounced. This divergence reflects the differences between European growth rates. This factor is, nonetheless, key since the complementarity of the economic situations in Europe and the density of trading between countries in the zone ordinarily create a positive dynamic which is favorable to growth. Currently, the inability to re-establish a sound internal dynamic for each country is delaying and penalizing the return to a more favorable overall situation.

The second indicator is financial: the trend in 10-year bond yields within the euro zone Until the summer of 2008, the yield spreads between the countries in the zone were low and relatively stable. The euro zone itself provided credibility and protection, particularly to the weakest countries. The latter effectively enjoyed interest rates approaching those of the ‘virtuous’ countries. With the recession, this situation has radically changed. On average, spreads have widened with Greek and Irish interest rates amongst the highest. Since late 2009, we have seen a significant upwards move for Greece and, of late, a rapid increase in Portuguese interest rates. Two comments: • We thus note a marked upward move

in this indicator in Greece and Portugal linked to revised budget deficit forecasts.

This phenomenon was subsequently accentuated in Greece by the downgrade(1)

in the sovereign debt rating to BBB+.• Note, nonetheless, that these moves are

targeted: the perception is thus not one of a generalized, systemic risk. In late November, when a risk emerged in Dubaï, the risk premia represented by CDSs(2) generally increased in countries considered to be fragile.This reflected an overall concern. In the current situation, Greek and Portuguese CDS(2)

spreads are widening without contagion, effectively reflecting specific concerns.

n The analysisThe ‘fragile’ countries have enjoyed catch-up phases in living standards towards the more advanced European countries, as seen in sustained internal growth rates underpinned by low real interest rates. For these 'catch-up' countries, the inflation rate was slightly above the European average, while interest rates were very close to those of the most advanced countries. Their low real interest rates encouraged households to spend rather than to save and even take on debt. This led to a marked deterioration in the current accounts of each of these countries, reflected in acceleration in imports. If we were moving within a system similar to the European Monetary System, the weaker countries would devalue their currencies, as might have been the case in 1992. Currently, such a mechanism is not possible. Which means that behavior now needs to change, since the euro zone no longer enables one country to 'save itself' to the detriment of others (e.g. via a devaluation in its currency). Each of the weaker countries must modify its behavior in order to rectify its own imbalances, notably in instilling more rigor at fiscal level.

n What does this change?The shock suffered by the euro zone, the

europe runs into some turbulence

Macro Analysis

One of the lessons of this recession is that the euro zone has lost some of its homogeneity. The rules in force until now are functioning less effectively than in the past. They will need to be redefined in order to reinforce the institutional construction of the euro when faced with adverse circumstances.

PhiliPPe WaechterChief Economist of Natixis Asset Management


resulting differences and the questions raised all suggest that its functioning has room for improvement. It must notably take into account behavior which is not systematically cooperative. A wide-scale adjustment in public finances is potentially more costly than a devaluation and it is understandable that individual countries ‘balk’ at the required efforts. Everyone is hoping that its cost will be borne collectively. While such an approach was not particularly easy within the EMS, it is possible currently since everyone wants to continue to benefit from the protective nature of the euro. It is worth remembering that the euro zone has strong credibility and significant institutional stability. All characteristics which attract investors and have notably enabled interest rates to remain very low over a prolonged period.

No-one wants to exit this situation. It might currently be tempting for the ‘fragile’ countries to delay taking action on the expectation that other countries will do so in their place in order to continue to benefit from the euro’s protective characteristics. In such a configuration, the cost of the adjustment would be shared.

In view of these considerations, it is unlikely

that a country would willingly choose to leave the euro zone. The cost incurred would be considerable since its currency would certainly be significantly devalued whereas its commitments are denominated in euros. The cost of servicing the departing country's debt would thus dramatically increase. While the euro zone is recognized for its institutional stability, the exit of any one country would spark investor distrust towards other European countries since, rightly or wrongly, they would expect other departures from the zone.

n ConclusionThus, while the aim is shared, strategies may differ since the shocks undergone are not the same in nature for all the countries in the euro zone. This point is really new and highlights the differences in interest rates.

The euro zone will need to find solutions for handling this type of situation, something which can only add to its strength. For the moment it effectively has few means at its disposal to put pressure on any country which does not follow the collective rule. The only real lever resides in the refinancing of banking systems by the ECB which generally only accepts assets with a

certain level of credit rating. In the current exceptional period, the ECB has slightly eased its constraint in accepting paper with lower ratings, enabling Greece to refinance its debt despite the downgrade in its credit rating(1).

Going forward, if the ECB returns to its usual practice as proposed by Jean-Claude Trichet, the Greek banking system will no longer be able to refinance its debt directly since the BBB+ rating would be insufficient.

The euro zone’s situation is such that it is forced to change and must define new rules which will enable improved efficiency. The current situation is effectively weakening the recovery in growth, creating uncertainty and causing malfunctions.

Written on 25/01/2010

Unemployment rate in the Euro zone

0

2

4

6

8

10

12

14

16

18

20

2003 2004 2005 2006 2007 2008 2009

Euro zoneGermanyBelgiumSpainFinlandPortugalFranceIrelandItalyNetherlandsAustria

Source: Datastream, Calculations: Natixis AM

(1) Greece’s credit rating was downgraded from A- à BBB+ by Fitch Ratings on 08/12/2009. (2) CDS or Credit Default Swap: derivatives market on issuer defaults.


risk of emerging markets overheating?

Asset Allocation

In January, the upward trend that the equity markets seemed to be following was interrupted. At the start of the year, the markets had risen to their highest point for 52 weeks. The sharp drop since then is part of a more general reduction in appetite for risk. Several factors have begun to worry investors. There is concern regarding overheating in the Chinese economy, as the credit controls currently in place might lead to a rise in interest rates soon. Furthermore, the announcement of a plan to limit bank risk (which in its current version is particularly drastic) has had a negative impact on the share price of the banks that would be affected. Lastly, the possibility that Ben Bernanke might not be reappointed has made the markets nervous. The sudden emergence of these concerns has largely overshadowed the initial wave of quarterly results releases, which have been pretty good overall.

Franck nicolasHead of Global Asset Allocation & ALM

n Fixed incomeNatixis Asset Management’s scenario for the fixed income markets remains unchanged: it is premature to talk about a rise in interest rates in developed countries. At present, low inflation will mean the central banks remaining accommodative for the first half of the year. They will probably change the tone of their statements in the second half of the year if the recovery continues, although the effects of this will only start to be felt in 2011.

As a result, Natixis Asset Management sees the fixed income market remaining stable in the near term, with more movement as expectations of monetary tightening change. Diversification will therefore be the key to this market, with some inflation-indexed bonds, credit instruments and emerging market debt in the portfolio.

n EquitiesThe equity market correction related to the start of a tightening cycle often represents a buying opportunity. The situation was similar in 2004, when a long period of decline was followed by a period of rate stability. Equities fell by 6% over six weeks before a fresh rally got under way.

For now, the allocation teams are using any market downturn to rebalance the equity portfolios. The portfolios managers are

keeping a close eye on any change in direct or indirect assistance (via strong emerging market growth) to developed countries. If this favorable environment is maintained, the macroeconomy and corporate results will continue their progress and should boost the markets.

However, Natixis Asset Management currently prefers defensive equity investments, both in geographical (more US and less emerging countries) and sector (lower weighting for more cyclical sectors) terms.

n CurrenciesThe key theme for the year seems to concern the falling yen. This currency is likely to be used again in carry trades as the US economy improves. For now, though, the yen is still considerably overvalued, which is hampering Japanese exporters.

n CommoditiesNatixis Asset Management has a relatively positive view on commodities, particularly industrial metals and agricultural commodities, since demand for energy is likely to remain low for several months, as it has at the end of every deep recession.



Against the euro, the dollar was still perceived recently as a weak currency that would continue to depreciate. However, the trend has reversed since the end of 2009, and the greenback has been strengthening against the euro. The explanation for this reversal appears to lie in the changes that have occurred in the euro-zone. The mixed picture in Europe (see pages 4-5) has two consequences for investors:

• Europe now presents a particular risk because the configuration of the euro-zone has changed and the final outcome of this seems uncertain. Investors now perceive that there is a higher risk related to the euro, which has reduced its appeal. In general terms, one of the euro’s main advantages is the institutional stability attached to it. The recent doubts have affected the perception of investors on this point.

• Secondly, the disparity between individual countries will probably affect the pace of growth in the euro-zone as a whole, delaying the moment when the ECB may increase interest rates, which is likely to be after the Federal Reserve makes its initial tightening move.

These factors have reversed the trend in the dollar.

1.2

1.25

1.3

1.35

1.4

1.45

1.5

1.55

01/01/2009 01/04/2009 01/07/2009 01/10/2009 01/01/2010

Source: Datastream - Calculations: Natixis Asset Management

Les taux d'intérêt en zone euroEUR/USD exchange rateRecent movements in the euro/dollar exchange rate

Value 1 year 2010 CAC 40 3 739.46 25.74 % -5.00 %CAC Mid 100 6 181.06 42.19 % 1.42 %IT CAC 20 3 263.21 20.76 % -3.16 %SBF 120 2 739.31 27.39 % -4.20 %SBF 250 2 675.75 27.54 % -4.07 %

Value 1 year 2010 MSCI Europe 85.70 28.09 % -2.92 %Euro Stoxx 50 2 776.83 24.13 % -6.35 %DAX 5 957.43 29.28 % -5.85 %Footsie 5 188.52 25.04 % -4.14 %

Value 1 year 2010 Dow Jones 10 067.33 25.83 % -3.46 %S&P 500 1 073.87 30.03 % -3.70 %Nasdaq 2 147.35 45.44 % -5.37 %Brent Crude Future 71.46 55.75 % -8.30 %

Value 1 year 2010 Nikkeï 10 198.04 27.57 % -3.30 %Hong Kong 20 121.99 51.54 % -8.00 %Singapore 2 745.35 57.19 % -5.26 %Shanghaï 242.63 94.44 % -3.87 %

Value 1 year 2010 MSCI World 1 119.54 33.46 % -4.19 %

Rate 1 year 2010Eonia 0.326 % -0.947 -0.084Euribor 3 months 0.665 % -1.421 -0.035Euribor 6 months 0.966 % -1.21 -0.028Euribor 1 year 1.225 % -1.048 -0.023Fed Funds 0.120 % -0.11 0.07

Rate 1 year 2010 5 years French Treasury Bond 2.438 % -0.316 -0.0415 years USTN 2.348 % 0.468 -0.33810 years French Treasury Bond 3.461 % -0.345 -0.13210 years USTN 3.607 % 0.764 -0.22630 years French Treasury Bond 4.128 % -0.04 -0.13230 years USTN 4.509 % 0.908 -0.121

Value 1 year 2010 Euro/Dollar 1.390 8.46 % -3.12 %Euro/Yen (100) 126.006 9.48 % -5.66 %Euro/Sterling 0.867 -2.41 % -2.37 %Dollar/Yen 90.655 0.94 % -2.62 %

Money Market

Fixed income

Currencies

France

Europe

United-States

Asia

World

Market DataAs of 31/01/2010

The monthly Index


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

Natixis Dollar Reserve FR0007003348

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


What are the main advantages of emerging countries at present? The growth potential of emerging countries remains intact, and the valuations are still attractive. Moreover, the structural changes that have taken place in the last decade have significantly improved their economic fundamentals. In addition, the recession triggered by the crisis has been short-lived in most of the emerging world. As a result, GDP growth forecasts for 2010 point to a sharp acceleration versus 2009. However, the equity markets of the emerging countries remain undervalued in terms of P/E*, and therefore offer excellent medium- to long-term investment opportunities.

Which countries do you favor?We currently favor Mexico, for two reasons: first, it will be the main beneficiary of a recovery in activity in the US, and second, its currency is strongly undervalued at the moment.In Asia, South Korea and Taiwan seem particularly well positioned given their ability to capture the vitality of global growth. These two countries, which are very open to international commerce, will continue to benefit from both China’s strong growth and the economic recovery in the developed countries. In addition, we expect Asian currencies to appreciate against the euro.


* The P/E (or price earnings ratio of a stock) is the ratio of the share price to earnings per share. It is also known as the earnings multiple, and reflects three key factors: the future earnings growth of the company concerned, the risk attached to these forecasts and the level of interest rates.

PiErrE rADot AND CHristoPH MEtz, co-portfolios managers of the Natixis Actions Global Emergents fund

Product Focusnatixis actions Global emergents

Natixis Asset Management launches Natixis Actions Global Emergents, a fund that is allocated geographically to take advantage of the growth potential of emerging markets

Benefit from the dynamic universe of emerging marketsOver the last few years, the emerging countries have become major economic players:- their annual growth in GDP has been greater than 6% over the last six years, compared to an average of 3% for the advanced economies(1) ;

- they should vigorously emerge from the crisis, with GDP estimated at 5.5% in 2010 against 2.7% for the developed countries(2).

Natixis Actions Global Emergents aims at taking advantage of this dynamism by investing in emerging equities which offer attractive valuations. The fund aims to outperform its benchmark index, the MSCI Emerging Markets(3) with net dividends reinvested, denominated in euros, over a recommended investment period of five years.

In the portfolio, the management team implements a fundamental top-down approach based on a country allocation managed within a precise risk budget.

Choice an active management of country allocationComposed by 22 countries(3), the investment universe of Natixis Actions Global Emergents is characterized by its diversity because of the very contrasting levels of development and natures of the countries that compose it. This is why the fund has a management process based on active country allocation, which is applied in three key stages:

• the “Emerging equities” Allocation Committee The Committee's approach is purely to allocate by country. It identifies the best country opportunities according to three analysis criteria: macroeconomic environment, the potential for appreciation and market conditions.

• portfolio construction The quantitative optimization performed by the committee results from an asset-allocation model (of the Black-Litterman type), which determines the relative weight of each country, while optimizing geographical diversification.

• active portfolio management and risk control Exposure to emerging markets is through liquid investment instruments allowing great responsiveness while limiting transaction costs: emerging country, regional and/or global ETFs(4) and futures on emerging countries (for the most liquid markets).

(1) Source: World Economic Outlook 2008.

(2) Source: JP Morgan, November 2009.

(3) 22 countries are present in the MSCI Emerging Markets index calculated in euros (January 2010): Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey.

(4) Exchange Traded Funds: quoted fund whose objective is to replicate an index, also known as a "tracker".

Interview with…


A management team and a Committee specialized in the "emerging equities" asset class

The portfolio management team of Natixis Actions Global Emergents is supported by the “emerging equities” Allocation Committee composed of five experts: an economist specialized in the emerging countries, a strategist and three allocation managers.

Focus

Fund features

The "Emerging Equities" Allocation Committee: country assessment criteria

Macroeconomic environment

Evolution of the macroeconomic indicators

Impact of monetary policiesAnticipation on the currencies

Analysis of the evolution of the forecasts of profits

Study of the indicators of valuation of equity markets

Analysis investors positioningAnalyzes technique of

stock exchange indices

Valuation Market conditions

Scenario Fundamentals Conditions

Trends Attractiveness Momentum

Country rating + = -Overweighted Neutral Sub-weighted

+ + +- - -

I Share R Share

Management company Natixis Asset Management

Legal form French Mutual Fund (FCP)

UCITS compliant Yes

Inception date 23 March 2009

Accounting currency EUR

ISIN/Allocation of income FR0010711051 / Accumulation FR0010706960 / Accumulation

Maximum operating and management fees including taxes 1.20%* 2.00%*

Maximum subscription feenot paid to the fund None 3%**

paid to the fund None None

Maximum redemption feenot paid to the fund None None

paid to the fund None None

Performance fee including taxes 20% of the performance above the index MSCI Emerging Markets

Minimum share fraction One hundredth One hundredth

Minimum initial / subsequent subscription € 50,000 / 1 Share None / None

Initial net asset value € 50,000 € 100

Net asset value calculation Daily

Cut-off time D 12,30 pm

* Basis: net assets. ** Excluding any exoneration.


In a scenario of a sustained rise in equity markets driven by expectations of a gradual economic recovery and an acceleration in the earnings cycle, value-based fund management should perform well in the first half of 2010. In the second half of the year, the direction in the markets looks, however, less clear when faced with the uncertainties weighing on the macroeconomic conditions.

Focus on the Natixis Euro Value Fund and Natixis Actions Europe Dividende, two Natixis Asset Management funds which are likely to offer an effective response to these different equity market configurations.

n Natixis Euro Value Fund(1): positioned for the expected rise in equity markets during the first half

The first half of 2010 could prove particularly favorable to companies having engaged in significant restructuring during the recession. Their cost base should enable them to leverage any upturn in revenues and their discounted valuation could make them sensitive to a market regaining an appetite for risk.

Natixis Euro Value Fund specifically seeks to tap into the potential of Eurozone value equities(2): it aims to outperform its reference index, the MSCI EMU DNR. The fund management team focuses on stocks deemed to be discounted or undervalued by the market in relation to their intrinsic value or equilibrium price and implements a conviction-based management approach in arbitraging between the different segments of the value style.

(NB: in the second half of the year, restructuring and merger/acquisition transactions may constitute a new source of opportunities for the fund)

n Natixis Actions Europe Dividende: selectivity and high quality for the second half

The level, sustainability and growth prospects of dividends are key to stock selection within the context of the less directional market trend expected for the second half. Investors could look for microeconomic opportunities and high-quality companies combining visibility with attractive valuations.

This is what the Natixis Actions Europe Dividende fund can offer in seeking to tap into the potential of European high-dividend shares within the scope of a conviction-based strategy(2). The fund management team focuses on shares deemed to be undervalued by the market (value style) and characterized by high cash flow generation enabling the payment of regular high and growing dividends (high-dividend style). Regular dividend payouts are effectively a sign of a financially sound company over the long term. The chosen companies thus combine attractive growth prospects and a high yield (more than a 100bp premium to the market) with a sound financial situation and an accessible valuation.

For more information: www.am.natixis.com (Our Products section)

Read the "Natixis Asset Management 2010 Forecast" Markets Flash at: www.am.natixis.com

Access this analysis at www.am.natixis.com/climatechange/eng/

2010 Forecast The Natixis Asset Management’s client workshop dedicated to the 2010 Forecast brought together 300 participants around the question “2010: the start of a new cycle?” in January,

Macroeconomics, asset allocation and key investment strategies: the scenarios adopted by Natixis Asset Management for 2010 were explained by Philippe Waechter, Chief Economist, Franck Nicolas, Head of Global Asset Allocation & ALM, and Dominique Sabassier, Deputy CEO and Chief Investment Officer.

The Natixis Asset Management experts highlighted one key take-away from this recession: the 'victory' of the emerging countries and an ongoing shift in the balance of power globally.

Copenhagen: the aftermath? Find the expert analysis of Natixis Asset Management's Climate Change* Scientific Committee on the Copenhagen Summit.

At a lunch-debate in January attended by the first investors in the Impact Funds Climate Change fund, Pierre Radanne, Committee member and energy efficiency specialist, explained that climate change is the first indivisible planetary challenge with "obligatory" solidarity. This is what makes it different: "The climate is indivisible and shared. The negotiations have occurred on a scale that is until now unprecedented in the context of international relationships, and are associated with a countdown that is vital according to scientists. We effectively need to contain global warming to below 2°C, which is to say halve our greenhouse gas emissions between now and 2050..."

According to Carlos Joly, President of the Climate Change Scientific Committee, a step forward has already been taken in raising international awareness of the climate change issue and its impacts. This awareness now needs to be translated into public and political action as he explains in his article "Copenhagen: revolution or status quo?"

*The Climate Change Scientific Committee has been set up by Natixis Asset Management in order to enlighten the Natixis Asset Management teams on the challenges of climate change.

(1) Subfund of the Natixis International Funds (Lux) I SICAV.

(2) A minimum recommended investment period of 5 years.

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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 euros - 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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