Kathryn McDonald

1
Kathryn McDonald Senior Product
Strategist Long/Short Equity
AXA Rosenberg Investment Management 4 Orinda Way,
Building E Orinda, California 94563
2
Hedged Strategies for Retail Investors

• Significant History with Long/Short investing for
  institutional clients
• One of the first firms to offer this type of
  strategy in a Mutual Fund vehicle
• No need to change process for retail market
• Strong theoretical commitment
• Perceived need in the marketplace
• and perceived net benefits from being first

3
Significant Experience with Long/Short
Dec. 1997
May1985
Mar.1989
Oct. 1997
Oct. 1998
Sep. 2000
Sep. 2002
Began Long/Short Investing in U.S.
4

• Basic Product Description

5
Long/Short Equity Objective
Objective

• To outperform T-Bills by 4 - 5 per year in bull
  and bear markets, through a strategy that has
  minimal market risk

Strategy

• Buy stocks we believe will outperform the market
  while simultaneously shorting stocks we believe
  will underperform the market
• Hold equal capitalization in long and short
  halves of the portfolio (dollar neutral)

6
Mechanics of Long/Short Investing
RP (RL - RS Rebate) - Fees

• Portfolio return will be positive whenever long
  holdings outperform short
• Portfolio return will likely be negative when
  longs underperform shorts
• Rebate will always be positive, but fees will
  always be positive, too!
• Success hinges on the ability to pick long
  positions that outperform the short positions
• No need to measure long or short performance
  relative to a benchmark like the Russell 2500

7
Potential to Work in Up or Down Markets
All scenarios assume 100,000 to invest, that
cash investments return 4 and that manager can
identify stocks over- and undervalued by 3.
8
Long/Short Equity Strategy Key Risks
Risks

• Net Market Risk and Style Risk in general
• Net Industry Risk
• Special risks associated with shorting
• Risk specific to AXA Rosenberg stock selection
  models

9

• Educating Prospective Clients

10
Investor Education

• We are not shy about asking for conceptual buy-in
  from prospects
• How earnings are rewarded in the Market
• Our ability to construct portfolios with a
  specific characteristic
• We want our clients to know which Market
  environments will be more favorable than others
• No Market return to give us a boost
• No benchmark to allow for relative analysis
• Our clients need to explain AXA Rosenbergs
  process to their clients

11
Relationship Between Earnings and Performance

• There is a strong, positive relationship between
  stocks that go on to deliver the best earnings
  yields (subsequent to purchase) and performance
• Cumulative Earnings Yield Total, forward
  earnings divided by initial cost
• We can observe this relationship
• Hold top earnings yield stocks
• Short bottom earnings yield stocks
• On average, this strategy would earn 28 per year
• but it requires perfect foresight

12
Our Ability to Build Earnings Advantaged
Portfolios
10
Value Long/Short Equity Fund
5
Forward One-Year Earnings, as Percent of Price
0
Earnings Yield, Long Holdings
Earnigns Yield, Short Holdings
-5
Jan-98
Oct-98
Jul-99
Apr-00
Jan-01
Oct-01
Jul-02
13
Our Clients Experience A Smoother Ride
November 1, 1998 October 31, 2003
50
Value Long/Short Equity Fund
25
Trailing 12-Month Total Return
0
-25
SP500 Index
70 SP500 Index, 30 AXA Rosenberg Value
Long/Short Equity Fund
-50
Nov-98
May-99
Nov-99
May-00
Nov-00
May-01
Nov-01
May-02
Nov-02
May-03
14

• Appendix

15
AXA Rosenberg Value Long/Short Equity Fund
Total Returns For Periods Ended September 30,
20031 Inception Date Month 3
Months Ytd. Institutional Shares 12/16/97 -0.10 -
3.34 -8.00 Investor Shares 12/18/97 -0.11 -3.36
-8.21 90-day T-bills2 0.08 0.23 0.79
Annualized Total Returns For Periods Ended
September 30, 20031 Since
Since Inception Inception Inception
Institutional Investor Date 1 Year 3 Years 5
Years Shares Shares Institutional
Shares 12/16/97 -15.11 11.26 1.75 1.87
Investor Shares 12/18/97 -15.33 10.96 1.43 1
.54 90-day T-bills2 1.16
2.64 3.59 3.80 3.80


1Past performance does not guarantee results.
Investment return and principal value may
fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
Investments in long/short funds are more volatile
and risky than some other forms of investments.
Because they have both long and short portfolios,
an investment in such funds involves risks
associated with twice the number of investment
decisions made for a typical stock fund. These
types of funds typically have a high portfolio
turnover that could increase transaction costs
and cause short-term capital gains to be
realized. While it may be the intent of the
manager to take long positions in stocks that
outperform the market and short positions in
stocks that underperform the market, in various
market climates there is no assurance that the
manager will be successful. Small capitalization
funds typically carry additional risks, since
smaller companies generally have experienced a
greater degree of volatility than average.
International investing involves increased risk
and volatility. 2 Since the risk in the Fund
relates specifically of the Managers stock
selection techniques and not to any systematic or
economy-wide factors, the proper benchmark is an
asset that also has the least exposure to
systematic influences. 90-day T-bills are such
an asset. An investment in a 90-day T-bill is
different from investment in the Fund because
T-bills are backed by the full faith and credit
of the U.S. government. T-bills have a fixed
rate of return, and investors do not bear the
risk of losing their investment. The income
received from T-bills is free from state income
tax.
16
AXA Rosenberg U.S. Large/Mid Long/Short Equity
Fund
Total Returns For Periods Ended September 30,
20031 Inception Date Month 3
Months Ytd. Institutional Shares 10/19/98 0.09 -3
.02 -6.44 Investor Shares 11/11/98 0.09 -3.00
-6.64 90-day T-bills2 0.08 0.23 0.79
Annualized Total Returns For Periods Ended
September 30, 20031
Since Since Inception Incept
ion Inception Institutional Investor Date 1
Year 3 Years Shares Shares Institutional
Shares 10/19/98 -11.96 4.39 4.58 Investor
Shares 11/11/98 -12.22 4.10 4.26 90-day
T-bills2 1.16 2.64 3.59 3.57


1Past performance does not guarantee results.
Investment return and principal value may
fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
Investments in long/short funds are more volatile
and risky than some other forms of investments.
Because they have both long and short portfolios,
an investment in such funds involves risks
associated with twice the number of investment
decisions made for a typical stock fund. These
types of funds typically have a high portfolio
turnover that could increase transaction costs
and cause short-term capital gains to be
realized. While it may be the intent of the
manager to take long positions in stocks that
outperform the market and short positions in
stocks that underperform the market, in various
market climates there is no assurance that the
manager will be successful. Small capitalization
funds typically carry additional risks, since
smaller companies generally have experienced a
greater degree of volatility than average.
International investing involves increased risk
and volatility. 2 Since the risk in the Fund
relates specifically of the Managers stock
selection techniques and not to any systematic or
economy-wide factors, the proper benchmark is an
asset that also has the least exposure to
systematic influences. 90-day T-bills are such
an asset. An investment in a 90-day T-bill is
different from investment in the Fund because
T-bills are backed by the full faith and credit
of the U.S. government. T-bills have a fixed
rate of return, and investors do not bear the
risk of losing their investment. The income
received from T-bills is free from state income
tax.
17
AXA Rosenberg Global Long/Short Equity Fund
Total Returns For Periods Ended September 30,
20031 Inception Date Month 3
Months Ytd. Institutional Shares 9/29/00
0.63 -1.51 -4.23 Investor Shares 8/23/01
0.55 -1.69 -4.50 90-day T-bills2 0.08
0.23 0.79
Annualized Total Returns For Periods Ended
September 30, 20031 Since
Since Inception Inception Inception
Institutional Investor Date 1 Year 3
Years Shares Shares Institutional
Shares 9/29/00 -11.06 5.77 5.77 Investor
Shares 8/23/01 -11.33 -- 5.88 90-day
T-bills2 1.16 2.64 2.64 1.76


1Past performance does not guarantee results.
Investment return and principal value may
fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
Investments in long/short funds are more volatile
and risky than some other forms of investments.
Because they have both long and short portfolios,
an investment in such funds involves risks
associated with twice the number of investment
decisions made for a typical stock fund. These
types of funds typically have a high portfolio
turnover that could increase transaction costs
and cause short-term capital gains to be
realized. While it may be the intent of the
manager to take long positions in stocks that
outperform the market and short positions in
stocks that underperform the market, in various
market climates there is no assurance that the
manager will be successful. Small capitalization
funds typically carry additional risks, since
smaller companies generally have experienced a
greater degree of volatility than average.
International investing involves increased risk
and volatility. 2 Since the risk in the Fund
relates specifically of the Managers stock
selection techniques and not to any systematic or
economy-wide factors, the proper benchmark is an
asset that also has the least exposure to
systematic influences. 90-day T-bills are such
an asset. An investment in a 90-day T-bill is
different from investment in the Fund because
T-bills are backed by the full faith and credit
of the U.S. government. T-bills have a fixed
rate of return, and investors do not bear the
risk of losing their investment. The income
received from T-bills is free from state income
tax.