perspectives 11.2010 en

PersPectivesNovember 2010

Shapers of a new balance of power? //////// Macro AnalysisWhat is the outlook for the future? //////// Asset AllocationWhere might investment opportunities arise? //////// expertise Focus

CORPORATE AND INVESTMENT BANKING / iNvestMeNt sOLUtiONs / SPECIALIZED FINANCIAL SERVICES

www.am.natixis.com

Emerging markets

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.

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.

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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.

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LEGAL INFORMATION

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 /// Head of design: F. Dupertuys /// Contributors: B. Boulay-Mégard, D. Levadoux, M. Louvrier-Clerc.

Asset AllocAtion ////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

expertise Focus ////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

MArket DAtA //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

news /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

MAcroeconoMic AnAlysis ////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

our internAtionAl proDuct rAnge //////////////////////////////////////////////////////////////////////////////////////////////////////

SUMMARY

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ContactsProspectus and sales documents required for subscription are available on demand:n Natixis Global Associates (Operations): [email protected] or CACEIS Luxembourg (Prime Transfer Agent): [email protected] - Tel.: (352) 47 67 70 78n or Natixis Asset Management (Clients servicing): [email protected]

This document is strictly intended for professional clients.

Natixis Asset Management Perspectives /// November 2010

PAGE 3

PhiliPPe zaouatiDeputy CEO, Head of Business Development

the balance and dynamism of the world economy are undergoing a period of profound upheaval. the recovery seems clearly to have been driven by the emerging economies, which have seen a quick, robust and lasting turnaround in activity, while the

industrialized countries have been relegated to a secondary role in this worldwide trend.

According to philippe waechter, chief economist at natixis Asset Management, the contributions by specific emerging markets to this economic resurgence nevertheless remain unequal; not all of them are growing at the same pace. this set of circumstances raises several questions: How can this period of growth be sustained without creating great disparities between emerging economies? How can we ensure that the vigorous growth of emerging markets does not have weighty consequences for the future of the industrialized countries? All of this underscores the need to manage the economic cycle while limiting disparities and excesses.Franck nicolas, Head of Global Asset Allocation & AlM at natixis Asset Management, thus recalls the various economic policy actions undertaken to put the brakes on the vigorous resurgence of the emerging economies and avoid the creation of overly strong inflationary tensions. in his view, although these actions have been “freshly” received by the markets they assuredly have had an impact since, at a pace close to overheating, emerging market growth is now nearing its full potential and stabilizing at a relatively high level.

in this market context dominated by the emerging economies, natixis Asset Management works to identify the investment opportunities to be seized in these booming regions. we offer a selection of funds that aim to take advantage of dynamic growth in emerging economies [see the Expertise Focus section on pages 8 and 9], with a special emphasis on eastern europe with natixis emerging europe Fund, a fund managed by natixis Asset Management.As usual, you can also find the summary of natixis Asset Management’s international offer [pages 8 to 10 of this issue].

enjoy reading it,

EditoRIAL

Perspectives /// November 2010 Natixis Asset Management

PAGE 4

Industrialised versus emerging economiesindustrialised countries are struggling to emerge from a period marked by revolutionary change. in mid-2010 their output is still well below pre-recession levels. this is no longer the case for Brazil, south korea, taiwan or china, where production is now considerably higher than it was before the crisis [See chart].

this rather unusual order in which countries are coming out of recession reflects the impact of the financial and banking crisis on industrialised countries. emerging markets were not hit to the same extent. Activity may have been knocked back but their recovery phase has not been constrained by the legacy of financial excesses seen in industrialised countries.

Differentiated dynamicsthe recovery of the global economy over the last few months is largely the result of a fast, strong and sustainable rebound in emerging market growth. performances within the emerging economies have been mixed: not all regions are advancing at the same pace

and not all have had an equal impact on the global economy.

Asia is the biggest driver of the global economy. this is where production has grown most and trade has expanded fastest. Asia is the only region where industrial output and volume trade is well above pre-recession levels. latin America, particularly Brazil, has also grown rapidly but still proportionately less than Asia.

this has considerable implications for economic policy. While growth has restarted in emerging markets and activity is expanding, the usual tensions that affect growing economies are now coming to the fore. Governments and central bank will have to be especially alert to avoid or rein in such imbalances as they emerge. Hence the recent rate movements by central banks, particularly in Asia and Brazil, to address their vigorously expanding economies. in industrialised countries, meanwhile, this is not yet an issue. Activity is still sluggish, the labour market is struggling to adjust and unemployment remains high. the aim of the authorities is to limit the constraints that could hold back their economies. this is a key point as it highlights the differentiated constraints faced by the different countries in the global economy.

Emerging markets: drivers of a new equilibrium?

“The equilibrium and dynamics of the global economy were radically changed.”That could perhaps be the verdict of history when we look back at the crisis that rocked the leading industrial nations at the end of the twenty-first century’s first decade. This shift in perspective is one way to capture the combined impact of a massive financial and banking crisis in the industrialised world and the increasing maturity of emerging economies.

PhIlIPPE WaEChtErChief Economist of Natixis Asset Management

the context Emerging markets have played a major role in the resurgence of the world economy. Asia, particularly, led by China, has been driving global growth. Meanwhile, the contribution of industrialised countries has been far more limited.

the key pointsHow to prolong the cyclical trend is the key question being asked in emerging markets. They need to extend the growth phase without causing excessive imbalances in order to keep a rapidly expanding middle class happy.

the stakesThe relationship between emerging and industrialised economies will ine-vitably evolve. The equilibrium of the past is changing. Vigorous expansion of emerging economies is bound to have consequences for the future of the industrialised world.

MACRO AnAlYSiS


PAGE 5

Emerging markets: a new maturity?Another big difference: the shift in behaviour by emerging market countries, which are now trying to manage the economic cycle so that it lasts longer and ultimately penetrates as far as possible into each national economy. their behaviour in the past has been more versatile and has often led fairly quickly to higher inflation which damaged growth.

nothing of the sort today.

We can see in this change the signs of greater political maturity coinciding with the emergence of a broader-based middle class in many of these countries. Favouring and satisfying this middle class will help prolong the economic cycle and refocus the sources of growth on a more independent domestic trend.

such rebalancing will take time. institutions need to be created that can support the development of a consumer middle class. these countries will have to reduce uncertainty and put in place organisations that can provide a calmer and less doubtful environment. this trend is already under way in several “advanced” Asian states such as korea.

However, to make a long-term success of such a transition, they need a stable macro-economic trend. this comes back to managing the economic cycle in a way that reduces imbalances, a complex task that will inevitably mean changes in the way these economies function.

Some unanswered questionsthis view of the dynamic in emerging markets raises three main questions:

• Is it preferable to have a strong political regime to encourage growth? probably not. in the medium term, regimes that are overly prescriptive rarely achieve sustainable growth.

• How should they relate to industrialised countries? emerging markets are both competitors for developed countries and sources of growth thanks to their fast-growing markets.

• so, where is the equilibrium to be found in economics (trade), politics (on the climate for instance) and in finance (exchange rates)?

ConclusionA new hierarchy is emerging. it is most obvious in the new status of china, now the world’s second biggest economy ahead of Japan. this change had already been taken into account when the G7 became the G20. the newly enlarged body made it possible to implement coordinated and more effective stimulus policies during the 2008 recession.

While we may be seeing a transition and a shift in the balance of the global economy, remember that history is not yet written, there will be many twists and turns along the way and the transition to this new equilibrium will inevitably take time.

Written on 20/10/2010

GDP growth - Base 100 in 1H 2010

Source: Datastream - Calculations: Natixis Asset Management

80

100

90

2006 2007

BrasilKoreaTaiwanAustraliaUSAFranceGermanyEuro zoneJapanUK

2008 2009 2010

110

MACRO AnAlYSiS

www.am.natixis.com


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What are the prospects for the emerging markets?

General environmentAs the economic crisis weighed heavily on the buoyancy of developing regions, the decoupling anticipated by many in 2008 between developed and emerging economies did not really come to pass.However, during the 2009 recovery, emerging economies bounced back well, quickly returning to their pre-crisis levels, while economies in the West remain below their 2007 levels.As a result, the chinese authorities were compelled to take measures to rebalance domestic consumption and exports in order to avoid inflationary tensions. these economic policy decisions generated relatively slower growth, a move that nevertheless was hardly applauded by the financial markets.

emerging market growth seems to have stabilized at a relatively high level. As economic expansion in these regions threatens to overheat, the growth rate has now very nearly reached its full potential.

Approach by regionAmong the larger emerging regions, only india seems to be slightly overvalued, with inflation running above 10%, particularly due to a lack of infrastructure creating bottlenecks in production capacity.this level of inflation remains worrisome, even in a context of significant investments, since the latter will take some time to put in place.

China’s urbanization rate has reached a peak, following consistent and robust growth over the last several years. the country will need to refocus on domestic demand, since exports are beginning to slow. the chinese authorities have prevented overheating by raising the reserve ratio as well as interest rates, combined with higher taxes on real estate transactions. Growth should now return to a pace more in line with this economy’s potential, but should also prove to be more long-lasting: a sustainable, unprecedented

and positive trend for the chinese economy. so far, this growth has especially benefited the more affluent sections of society. in recent months, the chinese government has therefore increased the minimum wage in most of the country’s regions. these wage increases necessarily have repercussions for corporate profit margins. this may explain why the profit growth forecasts of chinese companies are lower than those of other emerging markets.

Russia boasts vast reserves of strategic raw materials, not limited to petroleum but encompassing other resources vital for the industrialization of emerging regions. From a stock market standpoint, russia’s valuation is highly attractive.

But it is especially the countries fostering intra-emerging market trade growth that should best benefit from expansion in these regions. For example, South Korea, Taiwan and Malaysia have shown considerable prowess in reaping the rewards of emerging market dynamism as a whole. conversely, Mexico and some Central European countries are more sensitive to neighboring developed economies.

Specific themesFrom the value standpoint, local or foreign companies with operations in the emerging countries are in the best position to benefit from rapidly rising domestic demand. As investment targets, they are preferable to exporting companies, whose prospects are hampered by the weak growth expected in the developed countries.the consumer goods sector is expected to take advantage of this change and the housing sector might see further growth in regions where prices are not already excessively high.

Written on 20/10/2010

ASSET AllocAtion

www.am.natixis.com

Risk categories

Risk subcategories

Tactical allocation*

09/10(1) 10/10(2)

Fixed income = =equities + +

Fixed income United States - -

euro zone = =UK - -emerging markets = =Japan = =

euro issuers Corporate Invest.Grade

+ +

equities United States = =

euro zone + +

UK - -

Japan = =

Currencies (against the euro)

Dollar = =

Yen = =

Sterling + +

Commodities Oil = =

Gold = =

*weighting gap vs. strategic allocation of an investor

(1) Investment committee as of 09/09/2010.(2) Investment committee as of 30/09/2010.

Scale from -- to ++

FranCK nIColaSHead of Global Asset Allocation & ALM


PAGE 7

emerging currencies

During the crisis, emerging market currencies fluctuated considerably. one example of this is the movements seen in the south korean won and the Brazilian real. in the fall of 2008, the us dollar was perceived as a safe-haven currency amidst a very uncertain environment. As a result, the greenback quickly appreciated against other currencies.subsequently, driven by the recovery, risk aversion shifted and the emerging markets, as the leaders of global economic growth, saw their currencies rise in value.

the probable introduction of yet more accommodating monetary policies in the united states leads us to predict that an interest rate hike by the us Federal reserve will not be in the cards immediately. this is feeding capital

flows in the direction of the emerging markets where yields are attractive. their currencies thus continue to appreciate. local authorities, in Brazil for example, have been prompted to institute taxes on transactions in order to limit the impact of these capital movements. their objective is to ensure that these movements do not endanger the stability of their growth process.

The monthly index

900

1000

1100

1200

1300

1400

1500

1600

1700

jan 08 may 08 sept 08 jan 09 may 09 sept 09 jan 10 may 10 sept 101.5

1.7

1.9

2.1

2.3

2.5

2.7South Korean won Brazilian real

US dollar depreciation

US dollar appreciation

Source: Datastream

As of 29/10/2010

The South Korean won and the Brazilian real vs. the US dollar

MARKETS dAtA

www.am.natixis.com

Value 1 year 2010cAc 40 3 833.50 3.22% -2.61%cAc Mid 100 6 893.76 15.17% 13.12%it cAc 20 3 632.86 11.56% 7.81%sBF 120 2 858.82 5.52% -0.02%sBF 250 2 796.15 7.51% 0.24%

Value 1 year 2010Msci europe 92.17 9.50% 4.41%eurostoxx 50 2 744.99 0.72% -4.05%DAx 3 870.31 14.50% 7.39%Footsie 5 675.16 10.46% 4.85%

Value 1 year 2010Dow Jones 11 118.49 11.60% 6.62%s&p 500 1 183.26 10.99% 6.11%nasdaq 2 507.41 19.54% 10.50%Brent crude Future 83.15 6.55% 6.70%

Value 1 year 2010nikkeï 9 202.45 -6.96% -12.74%Hong kong 23 096.32 8.61% 5.60%singapore 3 142.62 19.39% 8.46%shanghaï 290.99 41.35% 15.29%

Value 1 year 2010Msci World 1 222.23 8.37% 4.60%

Rate 1 year 2010 eonia 0.724% 0.376 0.314euribor 3 months 1.045% 0.323 0.345euribor 6 months 1.269% 0.265 0.275euribor 1 year 1.540% 0.305 0.292Fed Funds 0.200% 0.090 0.150

Rate 1 year 2010 5 years French treasury Bond 1.906% -0.695 -0.5735 years ustn 1.179% -1.251 -1.50710 years French treasury Bond 2.913% -0.708 -0.6810 years ustn 2.612% -0.874 -1.22130 years French treasury Bond 3.379% -0.856 -0.88130 years ustn 3.999% -0.33 -0.631

Value 1 year 2010euro/Dollar 1.3899 -6.21% -3.13%euro/Yen (100) 111.9565 -17.35% -16.18%euro/sterling 0.8694 -2.86% -2.15%Dollar/Yen 80.5500 -11.89% -13.48%

Money Market

Fixed income

currencies

France

europe

united states

Asia

world


PAGE 8

The key expertise of Natixis Asset Management dedicated to international clients are gathered inn 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).

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

• Investment universe: Mainly Euro-denominated investment grade debt securities

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

Benefit from a broad range of fixed income investment opportunities

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

Combining responsability and conviction-based strategies in the eurocredit universe

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

Brief overview of our international product range

isabelle Delannée-Méric

natixis Euro aggregate Plus Fund

natixis Global Inflation Fund

natixis Impact Euro Corporate Bond Fund

sophie potard

christine Barbier

OuR INTERNATIONAL PrOdUct rANge

Sub-funds of the Natixis International Funds SICAV


PAGE 9

i, A eur lu0147917792i, A usD lu0095830922i, D usD lu0095831060r, A eur lu0147918923r, A usD lu0084288595r, D usD lu0084288678



• 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

• Investment universe: European Equities• Benchmark: MSCI Europe Small Caps NDR (indicative only)• Minimum recommended investment period: 5 years• Risk Indicator: Target tracking-error ex ante between 2 and 7

(indicative, barring crisis context)

• Investment universe: European equities• Benchmark: MSCI Europe (indicative only)• Minimum recommended investment period: 5 years

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

Make the most of attractive European small and mid caps in a conviction investment style

Benefit from the growth potential of socially responsible European companies through conviction-based management

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

Matthieu Belondrade & François théret

natixis Europe Smaller Companies Fund

thierry cuypers

natixis Impact Europe Equities Fund

christine lebreton


Sub-funds of the Natixis International Funds SICAV


PAGE 10

A selection of 24 complementary funds

Sub-fund of the Impact Funds SICAV

this quarterly reviewed list of funds aims to highlight natixis Asset Management's most innovative products and its wide range of expertise.

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

Mo

ney

Mar

ket 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

Fixe

d in

com

e

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 Fr0000449092

natixis souverains euro iA: Fr0010655456

natixis inflation euro i: Fr0010680223

natixis obli opportunités 12 mois iA: Fr0010796391

natixis crédit euro i: Fr0010171108

natixis convertibles euro iA: Fr0010658963

natixis convertibles europe iA: Fr0010171678

eq

uit

y

natixis Actions euro Value iA: Fr0010270025

natixis Actions us Growth iA: Fr0010256404

sonic Monde iA €: Fr0010555797

natixis Actions Global émergents iA: Fr0010711051

Alt

ern

ativ

e in

vest

men

t natixis performance strategic Bond iA: Fr0010008250

natixis performance swap Arbitrage iA: Fr0010654921

natixis performance Active Allocation iA: Fr0010688812

natixis constellation european event iA €: lu0161071237

i, c usD lu0448199025i, c eur lu0448199371J, c eur lu0448199454

• Investment universe: Global equities• Benchmark: The MSCI World index (indicative only).• Minimum recommended investment period: 5 years

Reconciling climate change with a performance oriented strategy in a global equity fund

Impact Funds Climate Change

clotilde Basselier & suzanne senellart


PAGE 11

FOCuS EXPERtiSE

the crisis has not cast doubt on the long-term growth perspectives of emerging markets

For a number of the emerging economies, the level of activity is higher today than it was before the crisis. thus the shock weathered was only temporary.

“Nevertheless, following a strong upturn until spring 2010, activity worldwide is dropping off,” says philippe Waechter, chief economist at natixis Asset Management. “It is continuing to grow, but at a slower rate. Thus the expansion will be a little less buoyant during the second half of the year.”

the industrialized countries will therefore need to seek out avenues for more sustainable and robust growth, in particular through a rebalancing of the labor market and the implementation of proactive economic policies.

emerging market activity must also be given a stronger foundation and made viable over the long term, as it has a major role to play in worldwide econo-mic recovery. However, the crisis has not cast doubt on the long-term growth perspectives of emerging markets.

Emerging markets: Identifying investment opportunitiesFollowing their strong performance early in the year, equity markets are now seeing a period of heightened volatility, against the backdrop of indecisive macroeconomic forecasts both in the United States and in Europe. The experts of Natixis Asset Management nevertheless remain bullish about prospects for emerging markets between now and the year-end, given the outlook for sustained economic growth in most countries and their attractive valuation level due to the expected rise in profits.

François théret and Matthieu Belondrade(1), co-portfolio managers of Natixis Emerging Europe Fund, invest across a diversified investment universe (russia, turkey, poland, kazakhstan, Hungary, czech republic, etc). they explain their resolutely positive outlook on emerging europe in these words: “Markets across the region are trading on average at eight times 2010 earnings, thus

at a significant discount to developed markets and at nearly a 50% discount to other emerging markets.”(2)

With a domestic market of 450 million consumers whose purchasing power is on the rise, emerging europe has become one of the main drivers of worldwide economic growth and one of its key beneficiaries.in a region dominated by russia and by commodity industries (oil, gas, minerals, steel), the portfolio managers are pursuing a diversification strategy summarized as follows:

• from a geographic perspective: apart from russia, turkey and poland are the markets given special emphasis, due to the strong growth rates seen in these countries and the level of domestic demand, together with their increasing integration into the world economy;

• from a sector-based perspective: positions embracing long-term growth themes that will accompany development in these countries (infrastructure improvements, emergence of the middle class, growth of the services sector).

Natixis Emerging Europe Fund(3), was ranked in the second quartile over 1 year and in the first quartile over 5 years in the lipper classification "Equity Emerging Markets Europe" as of september 30, 2010. With total assets under management of nearly $ 195 million, Natixis Emerging Europe Fund had a cumulative total return on nAV(4) in dollars of 10.20%, with an 11-year volatility of 29.95% (versus a performance of 8.67% and a volatility of 33.25% for the fund’s indicative benchmark: Msci emerging europe) between 17/05/2002 and 30/09/2010.

François théret and Matthieu Belondrade(4)

Co-portfolio managers of Natixis Emerging Europe Fund

Focus on emerging Europe

(1) Chartered Financial Analyst.(2) Source: FactSet Research, as of 30/09/2010.(3) a sub fund of the Luxembourg-registered SICAV Natixis International Funds (LUX) I.(4) Shares H-I / A: (EUR) LU0258447001 - (USD) LU0095830922. Performance net of operating and management fees. The figures mentioned refer to previous years: past performance by the fund is no guarantee of future results (Sources: Natixis AM and Natixis Global Associates).


PAGE 12

FOCuS EXPERtiSE

Our range of funds investing in emerging markets

in order to provide active allocation across all asset classes in emerging markets, natixis Asset Management offers 6 ucits funds invested in equities or bonds as well as balanced funds.

6 emerging market UCITS funds Investment universe BenchmarkMinimum

recommended investment

period

natixis obli Global émergents

IC EUR: FR0010716381 Natixis Asset Management

Sovereign or government bonds (hard currencies hedged in euro)JP Morgan Emerging Market Bonds -

Global Diversified2 years

natixis obli Europe Convergence


Investment-grade European issuers of fixed income products, both public (min. 80%) and private

50 % Citigroup Europe WGBI + 50 % Barclays Capital Central Europe Treasury

3 years

reactis émerging

IC EUR: FR0010634345 Natixis Multimanager*

UCITS investing in equities, bonds and alternative instruments in emerging markets

60 % MSCI Emerging Markets DNR + 40 % JPM Government Bond Emerging Markets DNR

5 years

Dorval Flexible émergents

IC EUR: FR0010312991 Dorval Finance**

UCITS and equity ETFs (from 0% to 100%), UCITS investing in Eurozone and emerging market fixed income

products50 % MSCI Emerging Markets PI

+ 50 % capitalized Eonia5 years

natixis actions Global émergents


Equity ETFs focusing on countries, regions and/or having a global focus as well as futures

MSCI Emerging Markets DNR 5 years

natixis Emerging Europe Fund

IC EUR: LU0147917792IC USD: LU0095830922 Natixis Asset Management

Equities in Russia, Turkey, Poland, Kazakhstan, Hungary, Czech Republic, etc.

N/A (MSCI Emerging Europe Index, for indicative purposes only)

5 years

www.am.natixis.com

*Natixis Multimanager - a wholly-owned subsidiary of Natixis Asset Management is Natixis’s multimanagement expert center registered by the French Financial Markets Authority (AMF) on 21/12/2001. [More information: www.multimanager.natixis.com]

**Within the framework of a partnership in the IFA market, Natixis Asset Management acquired 25% of the Dorval Finance share capital on the 12/09/2008. Dorval Finance is an independent investment management company authorized by the French Financial Markets Authority in 1993. Initially dedicated to private banking, Dorval Finance has, since 2004, been developing its conviction wealth management business, characterized by active and non-benchmarked asset management. [More information: www.dorvalfinance.fr].


PAGE 13

www.am.natixis.com

nEWS

Within its range of money market funds, and as a complement to its cash management funds in euros, natixis Asset Management offers a us dollar-denominated fund: Natixis Dollar Reserve. this fund provides a cash management solution in dollars, allowing investors to benefit from its expertise of one of europe’s leading money market fund management companies. the investment objective of natixis Dollar reserve is to increase its net asset value to an extent greater than the effective Federal Funds rate, which is a volume-weighted average of overnight rates for us dollar interbank loans, computed daily, over a recommended minimum investment horizon of one week.

to achieve this objective, the fund invests in fixed-rate debt securities or money market securities denominated in us dollars, either directly by reason of their issue conditions or indirectly through the use of interest rate swaps. the investment universe consists of issuers considered as “investment grade”, usually in the private sector.

natixis Dollar reserve’s management team bases its approach on the central scenario developed by the Macroeconomic and Money Market committees of natixis Asset Management. in line with forecasts relating to the monetary policies of central banks and movements in the yield curve, the investment team decides upon the appropriate allocation between fixed rate and floating rate securities.

Source: Natixis Asset Management.

www.am.natixis.com

the natixis Dollar reserve’s rate corresponding to AA/V2* by Fitch ratings, indicates a low level of credit risk and modest net asset value volatility.

portfolio composition by type of instrument as of 30/09/2010

Instruments Portfolio weight

commercial paper 53.01%

certificates of deposit 26.87%

Deposits 12.79%

Bonds 7.27%

cash and cash equivalents 0.06%

securitization 0%

totAl 100%

Resounding success for the first NAM Investors Forum

Natixis AM, partner of the French Solidary Finance Week

natixis Asset Management and natixis interépargne, respectively the French market leaders in solidarity-based asset management with a 36.6% market share(1) and in solidarity-based employee savings with a 56.5% market share(2), were active participants, for the third consecutive year, in the French solidarity Finance Week organized by Finansol(3).

A number of events were organized throughout France between november 3 and 10, 2010 to raise awareness about solidarity finance, an savings approach to combine performance with social solidarity.

(1) Source: Baromètre professionnel de la finance solidaire (2010 edition), Finansol.

(2) Source: Finansol.

(3) Finansol is a french professional association that aims to promote and advance solidarity finance and investment. [More information: www.finansol.org]

on october 21 and 22, 2010, natixis Asset Management held its first NAM Investors Forum in paris, bringing together more than 160 participants to discuss key issues in asset management.

As pioneer in socially responsible investment (sri) since more than 25 years, natixis Asset Management dedicated the first day of NAM Investors Forum to the theme “Investing Responsibly”.

Forum attendees had the opportunity to hear and respond to a debate between panelists entitled “Are environmental and social concerns redefining the boundaries of the economic and financial world?”, featuring sylvie lemmet, Head of the Division of technology, industry and economics (Dtie) at the unep and Blaise Desbordes, Head of sustainable Development of caisse des Dépôts et consignations.

several experts from natixis Asset Management also served as panelists, together with carlos Joly, chairman of the Climate Change scientific Advisory committee.

proDuct news

* As from 06/04/2010, ratings assigned by Fitch Ratings reflect the credit quality of funds (ranging from AAA, the highest rating, to CCC, the lowest) and the volatility or liquidity of the funds (from V1, the lowest level, to V6, the highest).[For further information, visit www.fitchratings.com].

More than 160 participants at the 1st NAM Investors Forum

A cash management solution in dollars

natixis Dollar Reserve

NAtixis Asset MANAgeMeNtLimited Liability CompanyShare Capital 50 434 604,76 €RCS Number 329 450 738 ParisRegulated by AMF under n°GP 90-009Registered Office: 21 quai d’Austerlitz75 634 Paris, Cedex 13 - Tel. +33 1 78 40 80 00

www.am.natixis.com

NAtixis MULtiMANAgerSubsidiary of Natixis Asset ManagementA French simplified joint-stock companyShare Capital of 7 536 452 €RCS Number 438 284 192 ParisRegulated by AMF under n°GP 01-054Registered Office: 21 quai d’Austerlitz75 634 Paris, Cedex 13 - Tel. +33 1 78 40 32 00

www.multimanager.natixis.com

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