Slide n° 1

23 June

2008

Brussels

The European Fund Classification

Peter De Proft, EFAMABernard Delbecque, EFAMA

Cora Gibbons, Allianz Global Investors

23 June 2008

The European Fund Classification

Peter De Proft, EFAMABernard Delbecque, EFAMA

Cora Gibbons, Allianz Global Investors

23 June 2008

Slide n° 2

23 June

2008

Brussels

Part I

Background

Part I

Background

Slide n° 3

23 June

2008

Brussels

Three main motivations

Current classification sectors too broad Wrong star ranking and questionable awards

Product development outpaced development of fund categorization Differing views on fund classification between fund providers and data vendors

Cross-border fund sales on the rise in Europe Need for a pan-European approach to sector / peer group classification

Creation of the European Fund Categorization Forum in 2002

Slide n° 4

23 June

2008

Brussels

Product creation in EuropeFund launches in % of number of funds

2000 2001 2002 2003 2004 2005 2006 2007 ytd2008

Equity 27% 21% 16% 12% 14% 16% 22% 18% 4%

Bond 19% 17% 15% 19% 15% 17% 17% 14% 3%

Mixed 23% 19% 15% 15% 15% 16% 19% 19% 6%

Money Market 13% 12% 13% 13% 9% 11% 10% 10% 4%

Total 23% 19% 15% 15% 14% 16% 19% 16% 4%

Source: Lipper Hindsight

Slide n° 5

23 June

2008

Brussels

Terms of reference of the EFCF

Composition: Cross-border fund managers and data vendors only

Purpose: To adopt a pan-European investment fund classification to enable investors and fund companies to truly compare like with like.

Strategy: To Review fund categories with a view to proposing clear new categories

Win-win “business model” Pooling of expertise from the business Mutual understanding of difficulties involved Collaborative approach to resolving challenges Data vendors’ support to bring the EFCF work to a wide audience

Slide n° 6

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2008

Brussels

A step-by-step process

July 2003: EFAMA joins the EFCF

June 2004: EFCF adopts Version 1 of fixed-income funds classification

June 2005: EFCF becomes an EFAMA Working Group

Summer 2005: EFCF hires « Classification Administrator »

April 2007: Adoption of EFC beta version, covering equity, bond, money market and mixed funds

Fall/Winter 2007: Testing of EFC version by Classification Administrator and EFCF members

Spring 2008: Finalization of the EFC

Slide n° 7

23 June

2008

Brussels

EFCF current membership

Fund ManagersAllianz Global InvestorsBlackRock Investment ManagementBNP Paribas Investment PartnersCredit Suisse Asset ManagementDWSFidelity InternationalFranklin TempletonGoldman SachsHSBC Asset Management LimitedING Investment ManagementInvescoJPMorgan Asset ManagementKBC Asset ManagementMellon Global InvestmentsMorgan Stanley Investment ManagementPioneer InvestmentsRobecoSchrodersUBS Global Asset Management Union Asset Management

Data Vendors BloombergFeri Rating Research AGLipperMorningstar 

Trade Associations AssogestioniBVIEFAMA

EFCF Classification AdministratorFundConnect & CCLux

EFCF ChairmanRobert Higginbotham, President – Europe for Fidelity

International

Slide n° 8

23 June

2008

Brussels

EFCF current membership

(1) International funds only include funds that source at least 80% of their assets from more than one market.

Source: Lipper Feri

# International Funds (1) AuM Apr 08

EFCF Members 1,591 503

Other International groups 3,545 610

TOTAL 5,136 1,113

EFCF as % of total 31.0% 45.2%

Slide n° 9

23 June

2008

Brussels

Part II

The European Fund Classification

Part II

The European Fund Classification

Slide n° 10

23 June

2008

Brussels

Three key principles

Transparency: high thresholds define fund categories to ensure transparency for investors and fund management companies and enable like with like comparison of funds

Investor protection: well delimitated fund categories, subjected to robust criteria, and effective monitoring based on the portfolio holding of the funds, will help investors buying funds knowing their inherent qualities

Independence: compliance with the classification criteria will be monitored by a neutral Classification Administrator

Slide n° 11

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2008

Brussels

The benefits

Benefits to investors They will know what they buy when they invest in EFC compliant funds Comparison of funds from different countries will be easier

Benefits to fund providers Sector/peer group classification will be more transparent More consistent marketing of funds on a cross-border basis will be possible

Benefits to data vendors They will get the classification results free-of-charge They will be able to spend less resources on classification issues, more on fund comparison

Slide n° 12

23 June

2008

Brussels

EFC general structure

Four Main Categories

Equity

(85% exposure to shares)

Mixed

(Mix of asset type)

Bond

(90% exposure to fixed income securities)

Money Market

(Weighted average modified duration of less than 1 year)

Slide n° 13

23 June

2008

Brussels

EFC main fund categories’ shares in UCITS market

# Funds AuM March 08

Equity 35.7% 42.2%

Bond 21.9% 19.2%

Mixed 15.6% 21.4%

Money Market 20.2% 5.3%

Total 93.4% 88.1%

Source: EFAMA Quarterly Statistical Release June 2008, N°33

Slide n° 14

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2008

Brussels

EFC classification criteriaDescription

Equity Bond Money Market Mixed

Country / Region X X

Sector X

Market Capitalization X

Currency Exposure X X X

Credit Quality X X

Interest Rate Exposure X X

Emerging Market Exposure X X

Asset Allocation X

Structural Characteristics X X X X

Classification Criteria

Asset Class Level

Slide n° 15

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2008

Brussels

EFC classification criteria Illustration for bond funds

Classification Criteria

Currency exposure

Emerging market exposure

Credit quality

Interest Rate exposure

Structural characteristics

Unconstrained

Slide n° 16

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2008

Brussels

Other fund categories covered

Absolute return

Total return

Convertibles

Open-ended & closed ended real estate funds

REITS

Guaranteed

Capital protected

Lifecycle/Target maturity

ABS

Commodities

Slide n° 17

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2008

Brussels

Part III

First Classification Results

Part III

First Classification Results

Slide n° 18

23 June

2008

Brussels

Main fund categories

Number of Funds Classified

Equity funds

904

Mixed

110

Bond

350

Money Market

72

Slide n° 19

23 June

2008

Brussels

EFC classified equity funds

Equity funds 904

Region/Country Sector Market Capit.

Global 240 United States 98 None 792 Small Cap 50Advanced Europe 153 Japan 53 Real Estate 24Asia Pacific Ex Japan 50 Germany 20 Information Tech. 20Emerging Markets 44 United Kingdom 19 Health Care 15Euro Area 36 Denmark 13 Financials 10Central And Eastern Europe 21 Switzerland 12 Energy 8 StructuralGreater China 17 India 11 Materials 7 Style 34Asia Pacific 15 China 8 Pharma, Bio & Life Sc. 7 Socially Resp. 9Emerging Latin America 15 South Korea 7 Telecommunication 5 Hedged 6Nordic 9 Italy 6 Raw Materials 5 Tracker 2Broad Europe 4 Thailand 5 Consumer Discr. 4 Fund of Funds 1Europe Ex-UK 3 Australia 4 Consumer Staples 3North America 3 Singapore 4 Industrials 2Emerging Asia Pacific 2 France 4 Utilities 1Middle East & Africa 2 Brazil 3 Capital Goods 1Other 1 Other 22

Equity

Fund Group ISIN Name EFC Classification CodeAllianz DE0008476094 Allianz RCM France A EUR EQ-FR-00-0-0000-00Allianz IE0000597124 Allianz RCM Global Emerging Markets Equity Fund A EUR EQ-EM-00-0-0000-00Allianz LU0101244092 Allianz RCM Global Equity AT USD EQ-GL-00-0-0000-00

Slide n° 20

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2008

Brussels

EFC classified bond funds

Bond funds 350

Bond Type Currency Credit Quality Interest rate. Exp.

Regular Bond 304 Single 235 Aggregate 141 Mixed Duration 217Emerging Market Bond 38 Global 37 Corporate 74 Short Duration 44Unconstrained Bond 8 Dominant 32 Government 54 Long Duration 43

High Yield 33 Dominant/single EM Non-IG 33 StructuralEUR 132 EM IG 5 Inflation Linked 6DKK 57 Mixed H. Yield 2 Socially Resp. 2USD 36 Tracker 2GBP 11CHF 10CAD 5AUD 5JPY 4CZK 2SEK 2NOK 2NZD 1

Bond

Fund Group Name Credit Quality Interest Rate ExposureBNP Paribas Parvest (Euro) Bond Premium Corporate Mixed DurationBNP Paribas Parvest Emerging Markets Bond Non-Investment GradeBNP Paribas Parvest Euro Bond Aggregate Mixed Duration

Slide n° 21

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2008

Brussels

EFC classified money market funds

Money Market Funds 72

Currency Interest rate. exp

Single 68 Regular 39Global 2 Short Term 22Dominant 2 Enhanced 11

Dominant/single Structural

EUR 39USD 18GBP 5CHF 4CAD 1CZK 1SGD 1HKD 1

Money Market

Fund Group ISIN Name Interest Rate ExposureJPM VGG513581022 JF Money Fund-HKD Short TermJPM IE00B0MGVL38 JPM EUR Money Market Fund RegularJPM LU0070211437 JPM Euro Liquid Market Regular

Slide n° 22

23 June

2008

Brussels

EFC classified mixed funds

Mixed funds 110

Region/Country Currency Asset allocation

Global 75 United States 2 Global 41 Balanced 45Advanced Europe 13 Germany 1 Dominant 34 Dynamic 34Euro Area 11 United Kingdom 1 Defensive 29Broad Europe 2 Denmark 1 Flexible 2Asia Pacific Ex Japan 1 Turkey 1Emerging Markets 1 Dominant StructuralAsia Pacific 1 EUR 23 Hedged 16

DKK 6 Fund of Funds 4USD 4TRY 1

Mixed

Fund Group ISIN Name Asset AllocationInvesco HK0000020443 INVESCO ASIA BALANCED FUND BalancedInvesco LU0243957312 INVESCO CONT EU ABSOL RETURN DefensiveInvesco HK0000030699 INVESCO GLOBAL BALANCED FUND Dynamic

Slide n° 23

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2008

Brussels

Part IV

Concluding Remarks

Part IV

Concluding Remarks

Slide n° 24

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2008

Brussels

Converging towards a pan-European fund classification is an ambitious goal …

National associations cannot give orders; they can try to convince their members of the importance of a pan-European standard

Local market characteristics and national regulation may impose limits to convergence

Slide n° 25

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2008

Brussels

… but success is a realistic possibility

Finding a consensus on a pan-European classification was possible within the EFCF

Flexible implementation at national level will facilitate dissemination Not all categories should necessarily be adopted in national versions of the EFC Funds not yet classified by the EFC could be included in local versions of the EFC Cohabitation of the EFC with local classification should be possible, at least initially

The completion of the European Single Market for investment funds heightens the need for a pan-European approach to fund classification

Slide n° 26

23 June

2008

Brussels

For more information about the EFC,

please visit EFAMA website.

Thank you for your attention.

For more information about the EFC,

please visit EFAMA website.

Thank you for your attention.