AXA WORLD FUNDS A LUXEMBOURG INVESTMENT FUND ...
AXA WORLD FUNDS A LUXEMBOURG INVESTMENT FUND ... AXA WORLD FUNDS A LUXEMBOURG INVESTMENT FUND ...
Name of the Sub-Fund Appendix 54: AXA WORLD FUNDS – GLOBAL FLEX 100 AXA WORLD FUNDS – GLOBAL FLEX 100 (Previously named AXA World Funds – Force 8) �1 Management Company AXA Funds Management S.A. (Luxembourg) Investment Manager AXA Investment Managers Paris Sub-delegation None Promoted by AXA Investment Managers Objectives and Investment Policy Investment objective: The objective of the Sub-Fund is to achieve long term capital and income growth by investing in a diversified portfolio of equities, bonds, Money Market Instruments and ancillary cash directly or through the investment in other UCITS and/or UCI. The investment policy of the Sub-Fund is structured so as to offer investors a clear choice of risk/reward profile. Typical investors would seek long term capital and income growth measured in Euro. �2 Investment policy: The Investment Manager will seek to achieve the objectives of the Sub-Fund while accepting significant volatility of returns by investing mainly in a broad set of world market bonds, Money Market Instruments, equities issued in the OECD or non-OECD countries and/or by getting exposure to commodities (notably through commodity indices, exchange traded funds, equities, units or shares of UCITS and/or other UCIs). Over the long term a high proportion of the Sub-Fund’s assets will be invested in equities. There is no formal restriction on the proportion of the Sub-Fund’s assets that can be invested in and/or exposed to any one particular market. In particular, the proportion of the Sub-Fund’s assets that can be invested in equities and/or exposed to commodities is very flexible and may vary from 50% to 100%. �3 At least 10% of the net assets of the Sub-Fund will be invested in units or shares of UCITS and/or other UCIs which comply with the provisions set forth in article A (5) of the section "Investment Restrictions" of the Prospectus. In any case, the investments by the Sub-Fund in other UCIs may not exceed the limits set forth in article C(12) of the above mentioned section. In accordance with article A (5) of the section "Investment Restrictions" of the Prospectus, the Sub-Fund may invest up to 10% of its net assets in units or shares of regulated open-ended hedge funds which are submitted to an equivalent supervision. For efficient portfolio management purposes or investment purposes, this Sub-Fund may also expose itself to such assets through the use of derivative instruments within the limits set forth in the section “Investment Restrictions”. The Reference Currency of the Sub-Fund is EUR. �1 Such paragraph shall take effect as from 1 st October 2012. �2 Such paragraph shall take effect as from 1 st October 2012. Until that time the following investment objective as disclosed in the prospectus dated February 2012 shall apply: “The objective of the Sub-Fund is to achieve medium term capital and income growth by investing in a diversified portfolio of equities, bonds, Money Market Instruments and ancillary cash directly or through the investment in other UCITS and/or UCI. The investment policy of the Sub-Fund is structured so as to offer investors a clear choice of risk/reward profile. Typical investors would seek medium term capital and income growth measured in Euro.” �3 Such paragraph shall take effect as from 1 st October 2012. Until that time the following investment policy as disclosed in the prospectus dated February 2012 shall apply: “The Investment Manager will seek to achieve the objectives of the Sub-Fund while accepting significant volatility of returns by investing mainly in a broad set of world market bonds, Money Market Instruments and equities issued in the OECD or non-OECD countries. The emphasis is put on equities issued principally within the Euro zone. There is no formal restriction on the proportion of the Sub-Fund’s assets that can be invested in and/or exposed to any one particular market.” 314
Use of Derivatives: In order to achieve its management objectives, the Sub-Fund may engage in the credit derivatives market by entering, i.a., into credit default swaps in order to sell or buy protection. A credit default swap “CDS” is a bilateral financial contract in which one counterparty (the protection buyer) pays a periodic fee in return for a contingent payment by the protection seller following a credit event of a reference issuer. The protection buyer acquires the right to sell a particular bond or other designated reference obligations issued by the reference issuer for its par value or the right to receive the difference between par value and market price of the said bond or other designated reference obligations (or some other designated reference or strike price) when a credit event occurs. A credit event is commonly defined as bankruptcy, insolvency, receivership, material adverse restructuring of debt, or failure to meet payment obligations when due. The International Swap and Derivatives Association (ISDA) has produced standardised documentation for these derivatives transactions under the umbrella of its ISDA Master Agreement. The Sub-Fund may use credit derivatives in order to hedge the specific credit risk of some of the issuers in its portfolio by buying protection. In addition, the Sub-Fund may, provided it is in its exclusive interest, buy protection under credit derivatives without holding the underlying assets. Provided it is in its exclusive interest, the Sub-Fund may also sell protection under credit derivatives in order to acquire a specific credit exposure. The Sub-Fund will only enter into OTC credit derivatives transactions with highly rated financial institutions specialised in this type of transaction and only in accordance with the standard terms laid down by the ISDA Master Agreement. The maximum exposure of the Sub-Fund may not exceed 100% of its net assets. Risk Profile This Sub-Fund is mainly invested in equities and/or fixed income related assets for which there is a risk of invested capital loss. Special Risk Consideration Risk linked to investments in emerging markets: Legal infrastructure, in certain countries in which investments may be made, may not provide with the same degree of investors' protection or information to investors, as would generally apply to major securities markets (governments’ influence, social, political and economic instability, different accounting, auditing and financial report practises). Emerging markets securities may also be less liquid and more volatile than similar securities available in major markets, and there are higher risks associated to transactions settlement, involving timing and pricing issues. Risk linked to investments in hedge funds: A limited part of the assets of the concerned Sub-Fund (maximum 10%) is exposed to funds pursuing alternative strategies. Investments in alternative funds imply certain specific risks linked, for example, to the valuation of the assets of such funds and to their poor liquidity. Derivatives risk and leverage: The Sub-Fund may use both listed and OTC derivatives for investment or hedging purposes, but also repurchase or securities lending agreement. These instruments are volatile and may be subject to various types of risks, including but not limited to market risk, liquidity risk, credit risk, counterparty risk, legal risk and operational risks. In addition, the use of derivatives can involve significant economic leverage and may, in some cases, involve significant risks of loss. Furthermore, investments in OTC derivatives may have limited secondary markets liquidity and it may be difficult to assess the value of such a position and its exposure to risk. For these reasons, there can be no guarantee that strategies using derivatives instruments will meet their expected target. Risk linked to investments in specific sectors or asset classes: The Sub-Fund is exposed to concentration risk on commodities. � � Such paragraph shall take effect as from 1 st October 2012. 315
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Use of Derivatives:<br />
In order to achieve its management objectives, the Sub-Fund may engage in the credit derivatives market<br />
by entering, i.a., into credit default swaps in order to sell or buy protection. A credit default swap “CDS” is<br />
a bilateral financial contract in which one counterparty (the protection buyer) pays a periodic fee in return<br />
for a contingent payment by the protection seller following a credit event of a reference issuer. The<br />
protection buyer acquires the right to sell a particular bond or other designated reference obligations<br />
issued by the reference issuer for its par value or the right to receive the difference between par value<br />
and market price of the said bond or other designated reference obligations (or some other designated<br />
reference or strike price) when a credit event occurs. A credit event is commonly defined as bankruptcy,<br />
insolvency, receivership, material adverse restructuring of debt, or failure to meet payment obligations<br />
when due. The International Swap and Derivatives Association (ISDA) has produced standardised<br />
documentation for these derivatives transactions under the umbrella of its ISDA Master Agreement. The<br />
Sub-Fund may use credit derivatives in order to hedge the specific credit risk of some of the issuers in its<br />
portfolio by buying protection. In addition, the Sub-Fund may, provided it is in its exclusive interest, buy<br />
protection under credit derivatives without holding the underlying assets. Provided it is in its exclusive<br />
interest, the Sub-Fund may also sell protection under credit derivatives in order to acquire a specific<br />
credit exposure. The Sub-Fund will only enter into OTC credit derivatives transactions with highly rated<br />
financial institutions specialised in this type of transaction and only in accordance with the standard terms<br />
laid down by the ISDA Master Agreement. The maximum exposure of the Sub-Fund may not exceed<br />
100% of its net assets.<br />
Risk Profile<br />
This Sub-Fund is mainly invested in equities and/or fixed income related assets for which there is a risk of<br />
invested capital loss.<br />
Special Risk Consideration<br />
Risk linked to investments in emerging markets: Legal infrastructure, in certain countries in which<br />
investments may be made, may not provide with the same degree of investors' protection or information<br />
to investors, as would generally apply to major securities markets (governments’ influence, social,<br />
political and economic instability, different accounting, auditing and financial report practises). Emerging<br />
markets securities may also be less liquid and more volatile than similar securities available in major<br />
markets, and there are higher risks associated to transactions settlement, involving timing and pricing<br />
issues.<br />
Risk linked to investments in hedge funds: A limited part of the assets of the concerned Sub-Fund<br />
(maximum 10%) is exposed to funds pursuing alternative strategies. Investments in alternative funds<br />
imply certain specific risks linked, for example, to the valuation of the assets of such funds and to their<br />
poor liquidity.<br />
Derivatives risk and leverage: The Sub-Fund may use both listed and OTC derivatives for investment or<br />
hedging purposes, but also repurchase or securities lending agreement. These instruments are volatile<br />
and may be subject to various types of risks, including but not limited to market risk, liquidity risk, credit<br />
risk, counterparty risk, legal risk and operational risks. In addition, the use of derivatives can involve<br />
significant economic leverage and may, in some cases, involve significant risks of loss. Furthermore,<br />
investments in OTC derivatives may have limited secondary markets liquidity and it may be difficult to<br />
assess the value of such a position and its exposure to risk. For these reasons, there can be no<br />
guarantee that strategies using derivatives instruments will meet their expected target.<br />
Risk linked to investments in specific sectors or asset classes: The Sub-Fund is exposed to concentration<br />
risk on commodities. �<br />
� Such paragraph shall take effect as from 1 st October 2012.<br />
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