The first year confirmed the relevance of an extensive approach to climate change

FLASH EXPERTISEOctober 2010

FundsClimateChange

CORPORATE AND INVESTMENT BANKING / INVESTMENT SOLUTIONS / SPECIALIZED FINANCIAL SERVICES

www.am.natixis.com

FLASH EXPERTISE / October 2010

ImpactFundsClimateChange,whichcelebrated its firstanniversaryonOctober,5th2010,achievedagoodperformanceinitsfirstyear.Itsthematicdiversificationstrategyandexposuretoemergingmarketspaidoff.

n Ayearthatsawhighvolatilityinindustrialisedcountries’equitymarkets

After a positive fourth quarter of 2009, with a rise in the main indices (DJ Euro Stoxx 50 up 3.2%; S&P500 up 5.4%; NASDAQ up 6.9%), 2010 started with fears in the Euro zone concerning the public deficit of certain countries, in particular Greece. This situation triggered sharp volatility in the equity markets and resulted in the implementation of draconian austerity measures in Greece and in peripheral countries like Spain and Portugal.

The risk aversion deriving from this European sovereign debt crisis continued up to April.

In May, the IMF (€750bn rescue plan) and ECB (purchases of private and sovereign debt) stepped in to bail out the European countries facing difficulties, thereby reassuring the financial markets. In the United States, positive macroeconomic news also gave fresh impetus.

As from June, the markets entered a new phase of instability after the release of disappointing statistics in the United States. These announcements renewed fears of a double dip in the global economy and created volatility during the summer.

In September, the trend inverted and macroeconomic fears were calmed with the release of better-than-expected statistics in the United States (retail sales, manufacturing production, etc). In Europe, a positive momentum set in, illustrated in particular by a sharp drop in unemployment in Germany. This favourable environment enabled indices to rebound significantly in the third quarter of 2010: in the Euro zone, the DJ Euro Stoxx 50 rose by 6.8%; in the United States, the S&P500 and the NASDAQ were up 10.7% and 12.3%, respectively.

Market environment

Impact Funds Climate Change is a sub-fund of a Luxembourg SICAV which aims to achieve long-term capital growth by investing in a universe of global equities, in companies contributing to:

n reduce greenhouse gas emissions;

n and/or adapt to the unavoidable consequences of climate change;

n and/or offer a better management of natural resources.

The investment universe covers an extensive spectrum of business sectors and potentially all stock markets.

Fund philosophy

FundsClimateChange

HIGHLIGHT

FLASH EXPERTISE / October 2010

Impact Funds Climate Change: a global equity universe including emerging countries

n Strongandcontinuousmomentuminemergingmarkets

In emerging countries, the macroeconomic environment differed markedly from that in industrialised countries, with strong and continuous growth in the past year.

Although early 2010 saw monetary tightening in China, the economic momentum did not weaken with strong growth estimated at almost 10% in 2010. Activity remained robust in Asia on the whole, boosted by domestic stimulus plans, healthy exports and active development of infrastructure. The situation was also positive in Latin America, where Brazil stood out with expected growth of 6% in 2010.

A global equities universe, including emerging markets

Source: Natixis Asset ManagementCountries in color are represented in the investment universe of Impact Funds Climate Change

HIGHLIGHT

n Thematicuniverse40 countries50 sectors550 stocks

n Approach3 macro-themes10 sub-themes

n Scientificresearchandportfoliomanagementresources3 sessions of the scientific advisory committee since inception10 experts in active equity management and/or climate change issues at the fund’s service.

n InterestinthefundOver $130m in assets under management, one year since creation.Over 60 articles published on the fund since its launch.

Source: Natixis Asset Management, as of September, 30th 2010.

KEY FIGURES

1.Mitigationofgreenhousegases

Fears of a double dip in the global economy in the first half of 2010 penalized European stocks exposed to the theme of energy efficiency in buildings and transport. Weak demand for electricity and massive overproduction of natural gas kept the latter commodity’s prices low, creating pressure on all the players in the value chain: gas producers, utilities, renewable energies etc. Conversely, the Brazilian economy’s new-found vigour was illustrated by strong performances from utilities and logistics firms (Tractebel Energia: +27%; Cemig: + 28%)(1).The emissions reduction theme also saw regulatory changes. The cuts in subsidies for clean energy first announced as from January 2010 in Germany, then in other European countries like Spain and France, resulted in a loss of visibility on the renewable energy industry, which penalized the entire sub-fund.The Chinese legislative framework benefited the theme, as the stimulus plan, mainly focused on energy efficiency, boosted local players’ order books (China South Locomotive: +75%)(1), as well as western companies’ exposed to the Chinese market (Andritz: +61%; Schneider: +40%)(1).

2.Adaptationtotheunavoidableconsequencesofclimatechange

The materials and construction sectors were hurt by the sovereign debt crisis and the implementation of austerity measures in the Euro zone. Uncertainty as to the extent of the US recovery, followed by disappointing figures on construction starts during the summer, weighed on US materials stocks.The theme was more positive in China with the government’s decision in September to shut down certain obsolete cement and steel production facilities. This initiative, aimed at reducing the Chinese economy’s carbon-intensity, benefited large local players able to take part in the sector’s consolidation (Anhui Conch Cement: +39%)(1).

Cover against extreme events

Changing consumer behaviour

Adaptation of infrastructure

FLASH EXPERTISE / October 2010

Impact Funds Climate Change's sub-themes in Mitigation category

Energy substitution

(lower carbon energy, alternative energy)

Transport efficiency

Building efficiency Modernisation of power plants

Impact Funds Climate Change hence benefited from the dynamism of emerging countries thanks to its flexible exposure to this region (18% as at 30.09.2010) on the one hand, and has been impacted by the volatility in industrialised countries on the other hand. From a sector viewpoint, performances were mixed from one theme to another given several macroeconomic, regulatory and climatic factors. Let’s take a look back on these events.

How Impact Funds Climate Change behaved in this environment

(1) Absolute performances in euros since the fund’s inception on October, 5th 2009

Source : Natixis Asset Management

Source : Natixis Asset Management

HIG

HLIG

HT

HIG

HLIG

HT

Impact Funds Climate Change's sub-themes in Adaptation category

The assessment of the first year of the fund confirms the benefit of an extensive approach to climate change, encompassing a broad diversity of sub-themes and sectors.

Impact Funds Climate Change's sub-themes in "Better management of natural resources" category

Portfolio breakdown by theme as at 30/09/2010

Water management

Soil management

Waste management

Source: Natixis Asset ManagementBreakdown of the part invested in equities (i.e. 96% of the portfolio).

FLASH EXPERTISE / October 2010

3.Bettermanagementofnaturalresources

The sustainable soil management sub-theme performed well, in particular due to investments in fertilizer production (Yara: +60%; Mosaic: +42%)(1) which aims at increasing agricultural output to respond to the global population’s growing needs.Two factors had a positive impact on this industry. First, the Russian embargo(2) on cereal exports triggered an escalation in cereal prices, prompting farmers to increase their production and therefore use more fertilizers. Second, BHP Billiton’s takeover bid for Potash Corp(3) heightened interest in potassium mines (potassium is used for fertilizers), this asset being relatively scarce on a global scale.

Better management of natural resources

15%

28%

Adaptation to CC

Mitigation

57%

Source : Natixis Asset Management

(1) Absolute performances in euros since the fund’s inception on October, 5th 2009(2) Russia was the world’s third-largest wheat exporter in 2009(3) Second-largest potassium producer in the world

HIG

HLIG

HT

FLASH EXPERTISE / October 2010

Performance

The fund has achieved performances(5) in line with its targets: +11.79% for the I EUR share since inception, +4.34% for the I USD share and +5.45% for the I EUR share of which the USD-denominated assets are hedged against the currency risk.

These different performances from one share to another are attributable to sharp volatility in currencies in the past year, with two distinct phases. The first half saw a sharp depreciation in the euro, which fell to $1.2223 on 25 May 2010, its lowest point since November 2006. The drop was good for European exports, however.As from June, the trend inverted. The euro picked up and appreciated by 11% against the dollar in the third quarter, its sharpest quarterly rise in eight years.Over one year, the euro fell by 7% against the dollar. As the portfolio has an exposure of around 45% to the Euro zone, this currency evolution impacted negatively the I share in dollars.

(4) Share created on 22/09/2009, performance as at 30/09/10.

(5) Performances as at 30/09/2010.The performance figures provided refer to the past year. Past performance is not a reliable indicator of future performance.

(6) The I Euro and I USD shares were created on 5/10/2009, and the I Eur hedged share on 22/10/2009.

0

2

4

6

8

10

12

14

I Share USD I Share EUR I Share EUR helged in USD

4.34%

11.79%

5.45%

Fund performance(5) since creation(6)

Source: Natixis Asset Management, as at 30/09/2010

3 shares corresponding to different institutional investor profiles

How to assess the fund’s performance?

The fund’s theme results in sector biases that make it difficult to compare its performance with that of a commonly-used index.Failing a more suitable index, the MSCI World hedged against non-euro currencies (« MSCI Hedged to Euro ») can be used as a benchmark for the I EUR share of the fund hedged in USD. By way of illustration, this share of the fund has achieved a performance of +5.45% since its creation(4) compared with +2.50% for the hedged index, i.e. an outperformance of +2.95%.

IshareinUSDn The currency risk is not hedged. n This share is adapted to institutional investors who manage their USD exposure themselves.

IshareconvertedinEuron The currency risk is not hedged. n This share is mainly for euro zone institutional investors who prefer euro-denominated assets.

IshareinEurohedgedinUSDn The portfolio is denominated in euro.n USD-denominated assets are hedged against the euro: if the dollar falls against the euro, these assets preserve their initial value thanks to the hedge. Conversely, if the dollar appreciates against the euro, the investor does not benefit from the appreciation.n The currency risk is therefore limited to other currencies.

HIGHLIGHT

HIGHLIGHT

FLASH EXPERTISE / October 2010

n Energyefficiency:abuoyantthemeinindustrialisedcountriesThe moderate recovery in Western Europe will benefit sectors related to energy efficiency, which should catch up (green buildings, low consumption lighting, electric vehicles, rail transport, etc).

In the United States, hopes of passing a wide-ranging energy bill now seem narrower. By contrast, the introduction of federal clean energy standards, including nuclear power and clean coal, is still on the cards and should make a positive contribution to the theme’s growth.

n AfavourablepoliticalandregulatoryframeworkinemergingcountriesIn China, the 12th five-year plan is expected to be announced by end-2010. The Chinese government is confirming its strong commitment to green growth, with a target of reducing its economy’s carbon-intensity by 40 to 45% out to 2020 (compared with the 2005 level).The new measures will be mainly to the benefit of clean and alternative energies, smart grids and electric vehicles. Consumption and services are also expected to enjoy specific incentives.In Brazil, a new phase of incentive policies is expected after the presidential elections. These measures will favour certain strategic sectors such as farming, logistics, transport and energy production.Furthermore, the 2014 World Football Cup and 2016 Olympics are two wide-scale projects motivating an improvement in infrastructure. Local materials and construction companies stand to benefit from these positive trends.

Outlook

All the figures mentioned in the document are as of September, 30th 2010.

A duo of experienced fund managers with complementary profiles

Senior analyst-manager22 years’ experience of which 15 as a financial analyst and 4 years with Natixis Asset Management’s European Equities team.

A graduate of HEC and member of SFAF, the French Society of Financial Analysts, since 1994.

Senior analyst-manager21 years’ experience as a financial analyst at Natixis Asset Management.Heading the defensive macro-sector, Suzanne has also been managing an environmental thematic fund for three years: Natixis Impact Life Quality.

A graduate of ISG and member of SFAF.

Clotilde Basselier

Suzanne Senellart

THE INVESTMENT TEAM REWARDED EXPERTISE

InnovationandoriginalitysalutedThe Jury’s Prize rewards the best financial or pension products distributed in France to private wealth clients. The products launched during the reference period are analysed in terms of innovation and originality. The jury was seduced by the extensive approach and Natixis Asset Management’s scientific research applied to this expertise, and awarded its prize to Impact Funds Climate Change.

Impact Funds Climate Change rewarded by L’Agefi Actifs

The fund was awarded the Prix du Jury at the 2010 edition of “Les Actifs du Patrimoine de L’Agefi”.

www.am.natixis.com/climatechange

Natixis Asset Management Limited Liability Company,Share Capital €50,434,604.76 RCS Number 329 450 738 Paris - Regulated by AMF n° GP 90-00921 quai d’Austerlitz - 75634 Paris Cedex 13 - Tel: +33 1 78 40 80 00

www.am.natixis.com

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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. 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.

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