AXA WORLD FUNDS A LUXEMBOURG INVESTMENT FUND ...

securities dealers and listed and unlisted companies is different throughout the world. The laws of some countries
may limit the Sub-Fund’s ability to invest in securities of certain issuers located in those countries.
Different markets have different clearance and settlement procedures. Delays in settlement could result in temporary
periods when a portion of the Sub-Fund’s assets is uninvested and no return is earned thereon. The inability of the
Sub-Fund to make intended securities purchases due to settlement problems could cause the Sub-Fund to miss
attractive investments opportunities. Inability to dispose of Sub-Fund's securities due to settlement problems could
result either in losses to the Sub-Fund, due to subsequent declines in value of the Sub-Fund's securities, or, if the
Sub-Fund has entered into a contract to sell the securities, could result in possible liability to the purchaser.
With respect to certain countries, there is a possibility of expropriation or confiscatory taxation, imposition of
withholding taxes on dividend or interest payments, limitations on the removal of Sub-Funds or other assets of the
Sub-Funds, political or social instability or diplomatic developments, which could affect investments in those
countries.
An issuer of securities may be domiciled in a country other than a country in whose currency the instrument is
denominated. The values and relative yields of investments in the securities markets of different countries, and their
associated risks, are expected to change independently of each other. Investments in sovereign debt obligations by
the Sub-Funds involve risks not present in debt obligations of corporate issuers. The issuer of the debt or the
governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or
interest, when due in accordance with the terms of such debt, and the Sub-Funds may have limited recourse to
compel payment in the event of a default.
Periods of economic uncertainty may result in volatility of market prices of sovereign debt and in turn the Sub-Fund’s
Net Asset Value. A sovereign debtor’s willingness or ability to repay principal and pay interests in a timely manner
may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the
availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to
the economy as a whole, the sovereign debtor’s policy toward international lenders and the political constraints to
which a sovereign debtor may be subject.
3. 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.
4. Derivatives risk and leverage
The concerned Sub-Fund may use both listed (including but not limited to futures and options) and OTC derivatives
(including but not limited to options, forwards, interest rate swaps and credit derivatives) as part of its investment
strategy for hedging or efficient portfolio management purposes.
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 operations risks. In addition, the use of derivatives can
involve significant economic leverage and may, in some cases, involve significant risks of loss. The low initial margin
deposits normally required to establish a position in such instruments permits leverage. As a result, a relatively small
movement in the price of the contract and/or of one of its parameters may result in a profit or a loss that is high in
proportion to the amount of assets actually placed as initial margin and may result in unlimited further loss exceeding
any margin deposited. Furthermore, when used for hedging purposes, there may be an imperfect correlation between
these instruments and the investments or market sectors being hedged.
Transactions in over-the-counter derivatives, such as credit derivatives, may involve additional risk, as there is no
exchange market on which to close out an open position. It may be difficult to assess the value of a position and its
exposure to risk or to liquidate an existing position.
In addition to derivative instruments, the Investment Manager may use repurchase or securities lending agreement in
the investment program of the Sub-Fund. These techniques may increase the leverage of the Sub-Fund and its
volatility. The amount of leverage or borrowings induced by the level of Value-at-Risk may be higher than 100% of
the assets of the Sub-Fund at any time. Moreover, the costs associated with leverage and borrowings will affect the
operating results of the Sub-Fund.
Whether any margin deposit will be required for OTC options and other OTC instruments, such as currency forwards,
swaps and certain other derivative instruments will depend on the credit determinations and specific agreements of
the parties to the transaction, which are individually negotiated.
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