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CAAM Funds Emerging Internal Demand A
domestic growth thematic fund
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Contents

• Summary p. 3
• Why focus on " Internal Demand " in Emerging
  Countries now? p. 4
• 1.1 Historical overview of economic development
• 1.2 An important contributor to world growth
• 1.3 Strong macro-economic fundamentals
• 1.4 Decreasing sensitivity of emerging markets to
  the US economy
• The strong drivers of Internal Demand in Emerging
  Countries p. 12
• 2.1 Household consumption the emergence of a
  gigantic middle class
• 2.2 Corporate investments strong support from
  private investments, infrastructure spending and
  urbanisation
• CAAM Funds Emerging Internal Demand p. 20
• 3.1 CAAM Funds Emerging Internal demand concept
  attractiveness
• 3.2 Fund key features
• 3.3 Investment philosophy, robust process risk
  monitoring
• 3.4 Track- record of Global Emerging funds
  managed by the team
• 3.5 Strengths of CAAM expertise

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Summary
Emerging internal demand why now?

• A winning theme in the current market
  environment
• Growth engine of the world economy in the years
  to come
• Better economic health of emerging countries
  should translate into more resilient internal
  demand than in the past
• A way to invest in Emerging Markets with a
  targeted lower volatility
• Some protection from the slowdown of developed
  economies

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• Why focus on Internal Demand
• in Emerging Countries now?

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1.1 Historical overview of economic development

• Large Emerging countries are entering mass
  consumption phase

Analysis of Rostow in 1960 (updated in 1990),
 The Stages of Economic Growth  , economica,3e
edition
Our vision
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1.2 Internal Demand in Emerging countries
an important contributor to world growth (1/2)

• Growth in retail sales are already higher in
  current dollars in China than in the United States

Source CAAM
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1.2 Internal Demand in Emerging countries
an important contributor to world growth (2/2)

• GDP growth in emerging countries consistently
  above the one of developed countries (except for
  1998)
• Growth looks set to remain strong due to
  improvement in fundamentals

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1.3 Strong macroeconomics fundamentals (1/2)
Current account - GDP

• Highly positive current accounts...

• net creditors vis-à-vis developed countries

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1.3 Strong macroeconomics fundamentals (2/2)

• Difference in rating between emerging and
  developed countries set to tighten further

Source CAAM

• 10 years of macroeconomic adjustment and budget
  discipline
• historically low and less volatile spreads

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1.4 Decreasing sensitivity of emerging markets
to the US economy (1/2)
With GDP weighted at current exchange rates,
Emerging market account for more than half of
world GDP growth
Source CAAM, EIU
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1.4 Decreasing sensitivity of emerging markets
to the US economy (2/2)
With GDP weighted at purchasing power parity,
Emerging market account for 80 of world GDP
growth
Source CAAM, EIU
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• 2. The strong drivers of Internal Demand
• in Emerging Countries

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An accelerator effect beyond a certain level of
development
2.1 Household consumption the emergence of a
gigantic middle class (1/3)

• lt 3000 low incomes, subsistence consumption
  (strong share of food and clothing)
• gt 3000 decent incomes allowing savings and
  consumption (cars, white goods, education, etc.)

Distribution of urban Chinese income
Percentage of households with income higher than
3000 pa
Source Nomura, July 2007 China consumer The
great Leap Upwards 
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Acceleration effect for example, the car
industry
2.1 Household consumption the emergence of a
gigantic middle class (2/3)
Private car penetration
Nb of cars per 1000 habitants
Germany
US
Brazil
Japan
Russia
Korea
China
India
Source Rostow, Goldman Sachs
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Massive middle-class population expansion in
highly-populated countries
2.1 Household consumption the emergence of a
gigantic middle class (3/3)

• Expansion of a middle-class population
• population size will considerably impact
  emerging countries
• In 10 years time, 800 million people will cross
  the 3000 threshold, i.e. a greater population
  compared to the US, Europe and Japan put together

Sources Goldman Sachs
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2.2 Corporate investments strong support from
private investments

• High levels of capacity utilization

• Healthy balance sheets should translate into
  higher capex

Source Merrill Lynch
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2.2 Government spending strong support from
infrastructure

• Governments infrastructure spending plans for
  2007 to 2009

Source Merrill Lynch, World Bank
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Example India

• Infrastructure needs are a major boost to
  investment

• Golden Quadrilateral was a huge success more
  roads built in India over the past 5 years than
  there were over the previous 50 years combined
• Road / Highways- Development is two-fold
• Expanding the 4 lane GQ network to 6 lanes
• North/South East/West corridors linking the
  entire country

Source CAAM Hong Kong
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2.2 Strong support from urbanisation

• High demand for goods services
• Accommodation
• Public facilities water treatment,
• transport, schools etc
• Electricity, energy
• Consumer goods
• Leisure
• Driving force for many of the economic domestic
  sectors

Source IMF
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• 3. CAAM Funds Emerging Internal Demand

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3.1 CAAM Funds Emerging Internal demand concept
attractiveness
Internal Demand an economic concept
Government spending
Household consumption
Corporate investments



Internal Demand in emerging countries an
opportunity for investors

• An important contributor to world growth
• Strong fundamentals supportive of a high and
  stable growth
• Increasing purchasing power and demographics
  supportive of an increase in consumption
• Huge investments requirements compared to
  developed countries
• Should provide investors with some protection
  from slowing developed economies

CAAM Funds Emerging Internal Demand

• Focus on companies exposed to emerging domestic
  demand
• Using tested investment philosophy and process

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3.2 CAAM Funds Emerging Internal Demand key
features (1/2)

• Fund objective
• Outperform the MSCI Emerging Markets by
  benefiting from the growth potential of emerging
  countries' growing domestic demand
• Focus on companies that sell most of their goods
  and services to Emerging Countries
• Favor sectors catering to Internal Demand
• Consumer Discretionary, Consumer Staples,
  Finance, Industry, Telecom and Public Utilities
• Sectors most likely to be underweight are those
  most linked to developed economies
• Technology, Healthcare, Energy, Materials

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3.2 CAAM Funds Emerging Internal Demand key
features (2/2)

• CAAM Funds Emerging Internal Demand should be
  less volatile than other GEM funds

Source CAAM
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3.3 Tested investment philosophy
Our convictions

• Fundamental analysis and judgemental decisions
• Anticipating changes
• Arbitraging prospects vs. valuations vs. risks
• 3 sources of alpha generation country selection,
  sector allocation stock picking
• Exposure to small/mid cap stocks
• Risk diversification
• Medium term investments
• Average 18 months holding

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3.4 Track- record of Global Emerging funds
managed by the team

• Information ratio

  Composite World Emerging Markets gross annualized performance MSCI Emerging Markets annualized performance Excess return Tracking-error Information ratio
1 year 35 26 9.2 2.3 4.0
3 years 41 33 8.6 3.4 2.5
5 years 35 28 6.9 4.1 1.7
Source CAAM December 2007 Currency EUR

• Ranking

Source Lipper (Funds sold in Europe December
2007) Category Equities Emerging markets
Past performance doesnt guarantee futur returns.
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3.5 Strengths of CAAM expertise

• A team of 7 investment professionnals dedicated
  to emerging equity management with complementary
  skills
• Latin America managers Patrice Lemonnier (CFA)
  and Lionel Bernard
• Emerging Asia Philippe Guigny and Mickaël Tricot
  (CFA)
• Emerging Europe, Middle East and Africa Nina de
  Martinis (CFA)
• Analysts Hélène Ecalle and Qian Jang
• Recognised for its expertise and good
  track-record
• Lipper Funds Awards (2008)
• Award Trophy for CAAM Funds Latin America
  Equities C Cap (USD)-Equity Emerging Markets
  Latin America, over 3, 5 and 10 years in
  Switzerland / Best fund in Spain over 3 years for
   Equity Emerging Markets Latin America  CAAM
  Funds Latin America Equities C Cap (USD).
• Lipper Funds Awards (2007)
• Best fund over 10 years in the category  Equity
  Emerging Latin America  in Italy, Spain, France,
  Austria, North Countries, Germany and Switzerland
  for CAAM Latin America Equities C Cap
• La Tribune-StandardPoors (march 2007)
• 1st place over 1 year and the 2nd place over 3
  and 5 years in the category  emerging countries
  equities  for a french domiciled fund.
• Mieux VivreVotre Argent (march 2007)
• Excellence Label for a french domiciled fund and
  Regularity Label for a french domiciled Global
  Emerging Equity fund.
• With a large product range
• Global emerging equity funds

More than 2 billion under management (as at
31/12/2007)
Past performance doesnt guarantee future
returns.
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CAAM Funds Emerging Internal Demand Fund
information
Classic (C) Institutional (I) Classic S (S)
Management company Crédit Agricole Asset Management Luxembourg S.A. Crédit Agricole Asset Management Luxembourg S.A. Crédit Agricole Asset Management Luxembourg S.A.
Investment manager Crédit Agricole Asset Management Crédit Agricole Asset Management Crédit Agricole Asset Management
Custodian CACEIS Bank Luxembourg CACEIS Bank Luxembourg CACEIS Bank Luxembourg
Reference currency USD USD USD
Minimum recommended period 5 years 5 years 5 years
Countries registered for sales as at 14/04/2008 Austria, Belgium, Finland, France, Germany, Hong Kong, Irland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom Austria, Belgium, Finland, France, Germany, Hong Kong, Irland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom Austria, Belgium, Finland, France, Germany, Hong Kong, Irland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom
Isin Code Accumulation LU0319685854 Distribution LU0319686076 Accumulation LU0319685342 Distribution LU00319685425 LU0319686159
Minimum initial subscription None USD 500 000 None
Share categories Accumulation / Distribution Accumulation / Distribution Accumulation
Frequency of NAV calculation Daily Daily Daily
Cut off for dealing times Luxembourg dealing days before 2pm Luxembourg dealing days before 2pm Luxembourg dealing days before 2pm
Maximum initial charge 4.50 2.50 3.00
Maximum annual management fee 1.60 1.00 2.00
Annual administration fee 0.50 0.40 0.50
Performance fee None None None
Maximum conversion fee 1.00 1.00 1.00
Maximum redemption fee None None None
Not all share classes and, as the case may be,
share categories are registered for sales in all
countries Only for distributors authorised
by Board of Directors. Or equivalent in
another currency. Or, as the case may be, an
earlier cut off time applicable by the relevant
distributor.
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Disclaimer
This document which is not contractual and not
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purposes by Crédit Agricole Asset Management,
based on sources that we consider to be reliable.
Crédit Agricole Asset Management can in no way be
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doesnt constitute a recommendation, a request
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Placement Collectif en Valeurs Mobilières or
OPCVM, UCITS) described herein, and should in no
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attention is drawn to the fact that units or
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regulations of your country of origin or any
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As a consequence, it is your responsibility,
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in particular the prospectus as approved by the
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Document issued by Crédit Agricole Asset
Management , a limited company ( French société
anonyme) with a registered capital of
546 162 915, head office 90 Boulevard Pasteur,
75 015 PARIS, 437 574 452 RCS Paris. Crédit
Agricole Asset Management is a portfolio
management company approved by the AMF (Autorité
des Marchés Financiers), the French Securities
Regulator under n GP 04000036 www.caam.com
This document contains information about CAAM
Funds Emerging Internal Demand (the Sub-Funds),
a sub-fund of CAAM Funds (the Sicav), an
undertaking for collective investment in
transferable securities existing under Part I of
the Luxembourg law of 20 December 2002, organised
as a société dinvestissement à capital variable
and registered with the Luxembourg Trade and
Companies Register under number B68.806. The
Sicav has its registered office at 5, Allée
Scheffer, l-2520 Luxembourg. The Sub-Fund has
been authorised for public sale by the Commision
de Surveillance du Secteur Financier in
Luxembourg. The Sicav comprises other sub-funds
which are described in the Sicavs full and
simplified prospectus. Not all sub-funds will be
necessarily be registered or authorised for sales
in all jurisdictions or be available to all
investors. Subscriptions in the Sub-Funds will
only be accepted on the basis of the Sicavs
latest complete and simplified prospectuses and
its latest annual and semi-annual reports that
may be obtained, at the registered office of the
Sicav or at its local representative. The name of
the local representative may be obtained at the
Sicav's registered office. Consideration should
be given to whether the risks attached to an
investment in the Sub-Funds are suitable for
prospective investors who should ensure that they
fully understand the contents of this document.
In case of doubt, it is advised to consult a
professional advisor to determine whether an
investment in the Sub-Funds is suitable. The
value of, and any income from, an investment in
the Sub-Funds can decrease as well as increase.
The Sub-Funds have no guaranteed performance.
Further, past performance is not a guarantee or a
reliable indicator for future returns. This
document does not constitute an offer to buy nor
a solicitation to sell in any country where it
might be considered as unlawful, nor does it
constitute public advertising or investment
advice. This document is solely for the attention
of institutional, professional or sophisticated
investors and is not to be distributed to the
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