AXA WF Responsible Development Bonds

AXA WF Responsible Development Bonds February 2008

Agenda • AXA Investment Managers: company overview • AXA IM Emerging Markets Expertise • Why Emerging Markets? • Why Responsible Investment in Emerging Markets? • Fund features and performances • Fund’s Investment process • Appendix

AXA IMKey figures • AXA IM assets under management • EUR 548bn total assets under management: • Core expertise in fixed income: • EUR 273bn of fixed income assets under management AXA IM global presence A dedicated and autonomous asset manager with more than 2,900 employees, 81 nationalities AXA IM is present in 21 countries, across 5 continents AXA IM AUM Breakdown Source : AXA IM, as at 30/12/07

AXA IMA large asset base • + 296 % growth in AUM over 10 years, reaching €548 billion 24,4 % of assets distributed to individual investors 75,6% to institutional investors Fixed Income €273 Billion Equities €169 Billion Alternatives €83 Billion Investment Solutions €24 Billion Source : AXA IM, as at 30/12/07

AXA IM Fixed IncomeOrganization A large and complex investment universe covered by highly specialized and empowered teams * Experts investment teams rely on globally shared resources and contribute to the global information advantage Source : AXA IM, as at 31/12/07 *including Investment Grade and High Yield

AXA IM - Fixed IncomeShared Resources • €273 bn of Assets under management as at 30/12/07* • 12 Fixed Income sub expertises • Around 60 Portfolio Managers • Credit & Macro: • Global organisation of 23 credit Analyst specialised by sector • 11 Economist/strategist with 3 dedicated to Fixed Income • 9 Portfolio Engineers managing risk alongside Fund Managers and developing robust quantitative tool Source : AXA IM, *unaditted figures as at 30/12/07

Chandima Mendis Head of Fixed Income Emerging Markets team Paris Global Funds & CPPI European Convergence & RI Funds Global Funds Chandima Mendis* Matthieu Stanic Chandima Mendis AXA IM in Fixed Income Emerging Markets • Around €458 Mio of AUM in Emerging Markets Debt as end of 30/12/07* • Extensive knowledge and experience in Emerging Markets Team: • Benchmarked portfolios • Hard Currency management • Local Currency management • Micro credit • 2 specialised fund managers accountable for performance based in Paris • 3 strategists covering Emerging Markets Debt • 2 Forex dealers and 1 portfolio controller Investment Strategy Portfolio Engineering Group 3 people 9 specialists working alongside portfolio managers Credit Research 23 people *and closely monitors European Convergence and RI funds A strong expertise in Emerging Markets Debt Source : AXA IM, as at 30/12/07 Sources: AXA IM, 30/06/07

Why Emerging Markets Debt? • The potential for higher yields than those available on investments like cash or U.S. Treasuries • However, credit differentiation remains key in order to produce excess returns • A tool eventually reducing the volatility of a diversified fixed income portfolio: • The advantage of investing in local-currency bonds in maturing economies: additional diversification and potential currency appreciation A likely source of portfolio return enhancement in the coming years Source : Bloomberg, historical data since 1991, correlation of index monthly performances

Emerging Markets Debt offers very good performances, despite crisis… Crisis are less frequent, tighter, and do not affect all the countries of the asset class : Spill over risk is limited Past results are not necessarily indicative of future performance. No assurances can be made that profits will be achieved or that substantial losses will not be incurred.

Structural changes gaining momentum • Market friendly policies: improving quality of management in emerging market countries • More sophisticated investors • High level of liquidity: being injected by the central banks in the global economy, supporting riskier assets • Floating exchange rates: allowing countries to adjust their economies through currencies • Positive balance of payments: enabling foreign exchange reserves to cover a larger share of their short term debt EM countries: from a source of vulnerability to a provider of stability

Bringing together Performance & Sustainable Investment • A Responsible fund*, that invests in internationally diversified bonds, and seeks attractive yields • Investment decisions are based on the selection of projects that contribute to the sustainable development of economies On a local level, by investing in microfinance institutions On the regional and global level, by supporting regional and supra-national development agencies At a country and corporate level, by investing in government & corporate bonds * AXA WF Responsible Bonds - Name changed from AXA WF Development Debt

Choice of issuers promotes Sustainable Development Importance of the criteria +++ Short term securities issued by microfinance institutions Bonds issued by local development agencies in emerging countries ++ Bonds issued by supra-national institutions +

The Emerging Growth Cushion

From Debtors to Creditors

Emerging Bonds Difficult to Ignore

Why Responsable investment in EM? • Higher risk on corruption, on human rights, on social • and environment • Link between good practices and bonds performance • Reducing the poverty does not mean lower profitability

Best ESG countries outperform Spread against US treasury: Best countries versus Worst countries by income category (Nov 2005= 100) Source EIRIS, Datastream, AXA IM

RI Filter for the country selection 3 issues: Governance (40%): Policy rights, Liberty rights, Corruption. Social (40%): Labour Convention, Child Labour, Unemployment rate, Child Mortality, Water Access. Environmental(20%):Deforest, Waste, CO2 emissions, GHG p/cap, Protected Areas Our sources are EIRIS and AXA RI TEAM

What is the BOP Approach?

Poor people can be consumers:A market based approach Corporate Bonds: Companies which do business by developing products and Services for the Poor people in emerging Countries A bottom-up approach, allowing a local investment in acceptable countries, as far as the companies match certain criteria, as for example: - increase of local employment - working conditions - improvement of life-standards - training, availability of the output to the local population services (micro insurance etc.) - respect of environment Poverty reduction by taking BOP Approach

The RI filter for corporate bonds Corporate Bonds With good practices on Governance, Social and Environmental and citizens issues Governance (40%): Audit & control, Executive remuneration, Shareholders’rights, Business Behaviour ( prevention of corruption and impact on the social and economic development ) Social (40%): Promotion of Labour Relations, Respect of working hours, Respect of human rights,Community of involvement. Environmental(20%): Pollution prevention & control, Protectionof Biodiversity, Protection of water resources

Example of BOP Strategy INFORMATION AND COMMUNICATION TECHNOLOGIES (ICT) Lack of access to communication technologies in rural areas keeps rural households disconnected from markets and broader information sources and reinforces rural isolation and poverty. Improvement of life-standards: Low income people clearly benefit from access to mobile phones. Easy access to jobs, to Medical care.. Availability of the output to the local population services Easy access to market prices, to family members working away from home The total BOP household ICT market in Africa, Asia, Eastern Europe, Latin America and The Caribbean, including 3.96bn people in all surveyed countries, is estimated to be $51.4bn. And the market is expecting to grow for some time. Indeed in Africa and India, less than 15% of the population has mobile phones.

PLDT (Philippine Long Distance Telephone) – Telecom Services (Philippines) Its subsidiary Smart Communications, Inc. is the Philippine’s leading wireless services providers, is providing banking services over mobile phones to previously unbanked customers. Innovation of new services: “Over the Air” (OTA) payment system has transformed the cell phone market by allowing electronic sales of airtime through short message service (SMS) and by reducing the unit size of such sales to US$0.03. Increase of local employment It allows small merchants to resell minutes with a commission on every sale creating business opportunity for 800,000 micro-entrepreneurs Reducing poverty with profitability By the end of 2003, just ten months after the launch of its innovative ‘Smart Load’ proposition, Smart Customer numbers had grown to 10 million, representing a 47% on year growth over 2002. In 2004 the company had amongst the highest profit margins in the Asia-Pacific region.

Microfinance in action • Opportunites to provide finance for micro entrepreneurs • Direct investments • Current strategy • indirect investments • Structured products – growing inimportance • Challenges • Accessing market • Reputational risk

Microfinance in Arequipa • CMAC Arequipa - One of better managed MFIs in Latin America • Over 70 000 members • Owned by municipality but considering opening the share capital • Due diligence visit by analyst in 2004 • Over 71% of loans made to micro entrepreneurs • Benefits from Peru’s robust growth and reforms • Strengths • Strong growth and profitability • Management of portfolio endures liquidity • Leader in the region • Weaknesses • Sole shareolder – Municipality • Potential for political interferance • Rise in arreas (30 days)

Supranationals and Development • International Finance Facility for Immunization • Accelerate immunization in 70 low income countries • Financial base constitute grants from donor several EU governments and some emerging countries • AAA Rating reflects sovereign backing ( except Italy) • Anticipates raising $4 bn over 10 years • Spread pick-up of 45 bps Sources: AXA IM, as at 10/09/07 Strategies are here for illustration purpose only, they might not reflect the current strategy.

126 121 116 111 106 101 96 31/10/02 28/02/03 30/06/03 31/10/03 29/02/04 30/06/04 31/10/04 28/02/05 30/06/05 31/10/05 28/02/06 30/06/06 31/10/06 28/02/07 30/06/07 31/10/07 AXA WF Responsible Development Bonds AXA WF ResponsibleDevelopment Bonds* • Objective & investment strategy: AXA WF Responsible Development Bonds is for investors whose goal is to participate in sustainable development and solidarity in economies at a local and global level through investments in diversified international bonds and debt instruments with attractive three-year growth outlooks. The funds aims to outperform the European Government Bonds 3-year return + 50bps. • Performance target : Yield of 3-year European Government Bonds + 50 bp • For investors whose goal is to participate in sustainable development and solidarity in economies at a local and global level through investment in diversified international bonds and debt instruments with attractive three-year growth outlooks. • Legal form: Sub-fund of a Luxembourg-based SICAV • Agreement date: 02/01/02 • Currency: EUR • Fees • Maximum Initial Charge: Class F: 2,00% • Maximum exit fees: None • Minimum initial subscription: Class F: €500 000 • Minimum subsequent investment, except in case of regular saving plans: Class F: €50 000 • Operating and management costs, gross of tax: Maximum rate: Class F: 0,60% • Investment horizon: 3 years • Category of investors: All subscribers. • Risk profile Volatility target range: 0-5%** • ** This figure is a working base for fund management teams. It is subject to change without notice and should not be construed as a firm commitment on the part of AXA Investment Managers Sources: AXA IM, as at 31/01/2008 Past results are not necessarily indicative of future performance. No assurances can be made that profits will be achieved or that substantial losses will not be incurred. Fund's performances are calculated net of management fees, dividend reinvested. Index performance is presented gross, dividends non reinvested. Performances are expressed in Euros (except if specified otherwise). * Since 07/01/2008, the name has changed from AXA Development Debt to AXA Responsible Development Bonds * AXA World Funds (AXA WF) is a UCITS III Luxembourg based SICAV Regulated by the CSSF, registered under the number RC Luxembourg B-63.116, on February 18, 1998

Fund identity AXA WF Development Debt • Share of mutual fund under Luxembourg law • Volatility Range: 0 - 5% • Investment Horizon: 3 years • Exchange Risk Exposure: potential • VL calculation: every 15 days • Open to all informed investors • Management Fees: 0.60% taxes not included (F share) • NAV of the share : 60.85 (12/10/2007, F share) • AUM: €15.8 Mio The fund will change its name in the current months and will be called AXA WF Responsible Development Bonds; it will also benefit from a weekly NAV. Source: AXA IM, 31/10/07

Risk diversification rules • Diversification and liquidity constraints • Maximum per issuer: 3% of assets • 10% of total portfolio • MFIs • Local Agencies • Maximum per country: 10% of total portfolio • Country Risk • Max 50% of portfolio assets by regions (diversification in Latin America, Central and Eastern Europe, Africa and Asia) • 75% covered against currency risk, the other 25% can be exposed to non Euro currencies • Currency risk Source: AXA IM, 30/06/07

Achieving our performance objectives • Alpha sources: • Spread duration (sovereign and supranationals) 20% • Microfinance 10% • Corporates 10% • Local currencies 10% • Interest rate duration (local and external) 40% • CDS Curve Play 10%

Strong Resources for this Fund 2 portfolio managers responsible for performance and the respect of the client’s guidelines Portfolio managers Shared Resources CERES In-house tools Specialist micro-finance intermediary 8 people from RI team + 6 external partnerships (whom 3 specific partnerships), working alongside portfolio managers 11 Macro Analysts & 23 Credit Analysts Responsible Investment Team & CRS partnerships Credit & Macro Research A disciplined. repeatable and consistent process supported at every stage by three pillars

A Clear and Rigorous Process Country Selection 4 5 Dynamic Portfolio Reviews 3 Instrument Selection Global Macro & Sector Outlook 2 1 Portfolio Construction • External debt • Local Debt • Currency • RI Criteria / ESG Filter • Defining duration & asset allocation views • Defining credit sector views Analysing & Quantifying macro views RI Criteria / ESG Filter Implementing & Optimising Strategies within constraints Revising portfolio consistency Fixed Income Teams Forecasting & Credit Strategy Groups EMD Team Investment Policy Meeting Portfolio Manager Investment Policy Meeting Portfolio Manager PEG Meeting EMD Team Portfolio Managers …shared by all Fixed Income Expertises and supported by resourcesglobally (RI team)

Investment Process – Steps:

Step 1: Market forecasts • The Forecasting Group establishes market forecasts on: • interest rates, notably for the US • steepness and shape of yield curve • credit spreads (approached by swap spreads) • EMD sets own duration target using these inputs and • Views of global risk aversion • Global FX • Commodity cycle

Step 2: Emerging Country views • Fundamental views and monthly in-depth analysis • Qualitative factors • Institutions • Political stability • Law & order • Market Technicals • Country Scoring

Step 3: Defining active investment strategies • Selection of tradable bonds, micro-credit securities and financing projects • Tradable bonds selected on scoring and valuation • Micro-credit: Projects are selected in partnership with local correspondents & external research • Financing projects: direct financing of bodies whose goal is to promote sustainable development. • Projects are medium to long term • Partnership with supranational bodies in a co-financing context or in co-operation with in-house teams specialised in financial projects.

Step 4: Portfolio Construction • For compliance with the following diversification rules: • micro finance projects: maximum of 10% of total assets and 3% of assets per issuer • local agencies: maximum per country of 10% of total assets • geographical risk: any geographical zone cannot exceed 50% of total assets • Monitoring of the portfolio’s credit risk

Step 5: Dynamic Portfolio Review • Weekly and Monthly Monitoring of positions • Reconciliation of views, positions and risk budget • Feedback from Management

Current Exposure Source: AXA IM, 31/10/07

Maturity and issuer profile Source: AXA IM, 31/10/07

Disclaimer • This presentation is for information purposes only and does not in anyway constitute an offer, solicitation or specific recommendation with respect to the purchase or sale of securities issued by any fund which is promoted or managed by AXA Investment Managers. • This presentation is not an advertisement and may not be copied or circulated, in whole or in part, to any person without the prior written consent of AXA Investment Managers. It shall not be deemed to constitute investment advice and should not be relied upon as the basis for a decision to enter into a transaction or as the basis for an investment decision. Investments should only be made on the basis of suitable investment, legal and taxation advice. Subscriptions to any fund managed or promoted by AXA Investment Managers are accepted only from eligible investors on the basis of the then current prospectus and related offering documentation. • AXA Investment Managers does not offer legal, investment, tax or other advice on the suitability of these funds or services for investors, who should take appropriate professional advice and make their own assessment of the merits, risks and tax consequences prior to investing. The value of the investments may fall as well as rise. Past performance is not necessarily indicative of future returns. Target returns and volatility are not guaranteed. Investment returns may be subject to foreign currency exchange risks. • The funds presented in this document are governed by French or Luxembourgian law. The investor must read the relevant prospectus (available upon request) prior to any subscription. Fund's performances are calculated net of management fees, dividend reinvested. Index performance is presented gross, dividends non reinvested. Performances are expressed in Euros (except if specified otherwise). • Investors cannot rely solely on this document to make any investment decision, insofar as the information is partial and cannot allow an estimate of the consequences of such potential investment. Any investment decision must be based on the information published in the relevant prospectus and on an independent analysis. • AXA Investment Managers Paris - Coeur Défense - Tour B - La Défense 4 - 100 esplanade du Général de Gaulle - 92932 Paris La Défense Cedex. Société anonyme au capital de 1 384 380 euros - 353 534 506 RCS Nanterre. Société de Gestion de Portefeuille titulaire de l'agrément COB n° GP 92-08 du 7 avril 1992 • AXA World Funds (AXA WF) is a Luxembourg SICAV UCITs III approuved by the CSSF ans registered under RC Luxembourg B-63.113, 18 February, 1998.

AXA WF Responsible Development Bonds