Transcript Présentation sur fond blanc

CAAM Funds Emerging Internal Demand
A domestic growth thematic fund
Page 1
CAAM Funds Emerging Internal Demand
Contents
1.
2.
Summary
p. 3
Why focus on " Internal Demand " in Emerging Countries now?
1.1 Historical overview of economic development
p. 4
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
2.1
Household consumption: the emergence of a gigantic middle class
2.2
Corporate investments: strong support from private investments,
p. 12
infrastructure spending and urbanisation
3.
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CAAM Funds Emerging Internal Demand
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
CAAM Funds Emerging Internal Demand
p. 20
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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CAAM Funds Emerging Internal Demand
1. Why focus on Internal Demand
in Emerging Countries now?
1.1 Historical overview of economic development
Large Emerging countries are entering mass consumption phase
Take-off
March towards technology maturity
Mass consumption
1780
1800
1820
1840
1860
1880
1900
1920
1940
Analysis of Rostow in 1960 (updated in 1990),
« The Stages of Economic Growth », economica,3e edition
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United Kingdom
United States
France
Germany
Sweden
Japan
Russia
Italy
Canada
Australia
Taiwan
South Korea
Mexico
Argentina
Brazil
Turkey
China
Thailand
India
Indonesia
Philippines
Vietnam
United Kingdom
United States
France
Germany
Sweden
Japan
Russia
Italy
Canada
Australia
Taiwan
South Korea
Mexico
Argentina
Brazil
Turkey
China
Thailand
India
CAAM Funds Emerging Internal Demand
1960
1980
2000
2020
Our vision
2040
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
Retail Sales growth over last 12 months
(6 months average, mio $)
24000
20000
16000
12000
8000
United States
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CAAM Funds Emerging Internal Demand
China
févr-07
août-06
févr-06
août-05
févr-05
août-04
févr-04
août-03
févr-03
août-02
févr-02
août-01
févr-01
août-00
févr-00
août-99
août-98
0
févr-99
4000
Source : CAAM
1.2 Internal Demand in Emerging countries:
an important contributor to world growth (2/2)
GDP (real, %yoy)
Average
so urce : EIU, M SCI, CA A M
 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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CAAM Funds Emerging Internal Demand
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1992
1993
Differential betw een Em erging and Developed Countries
4,0
3,0
2,0
1,0
0,0
-1,0
-2,0
-3,0
-4,0
-5,0
1.3 Strong macroeconomics fundamentals (1/2)
4,0
Current account - % GDP
3,0
2,0
1,0
0,0
-1,0
-2,0
-3,0
 Highly positive current
accounts...
Emerging Countries
Developed Countries
Source : MSCI, EIU, CAAM
Emerging Countries included in MSCI EMF index
30,0
25,0
20,0
15,0
10,0
5,0
0,0
-5,0
-10,0
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2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
 …net creditors vis-à-vis
developed countries
Net foreign debt (%GDP)
So urce : Datastream, M SCI, EIU, CA A M
CAAM Funds Emerging Internal Demand
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
-4,0
1.3 Strong macroeconomics fundamentals (2/2)
S&P Ratings of countries included in the MSCI Emerging Markets (w eighted according to equity country w eight)
9
100%
S&P upgraded Russia to
"investment grade"
Outperformance of non investment grade
country leading to a low er rating
8
S&P upgraded India to
"investment grade"
90%
7
80%
Exit of Greece
6
70%
Dow ngrade of South
Korea & exit of Portugal
% Investment Grade (right)
Jan-07
Nov-06
Jul-06
Sep-06
May-06
Jan-06
Av. grade for MSCI EMF (left)
Mar-06
Nov-05
Jul-05
Sep-05
May-05
Jan-05
Mar-05
Nov-04
Jul-04
Sep-04
May-04
Jan-04
Mar-04
Nov-03
Mar-03
0%
Sep-03
-1
Mar-02
10%
Sep-02
0
Mar-01
20%
Sep-01
1
Mar-00
30%
Sep-00
2
Mar-99
40%
Sep-99
3
Mar-98
50%
Sep-98
4
Mar-97
60%
Sep-97
5
Sep-96
 Difference in rating
between emerging and
developed countries set to
tighten further
Source : CAAM
Comparison of different bond spreads
1800
1600
1400
 10 years of macroeconomic
adjustment and budget
discipline:
1200
1000
800
600
historically low and less volatile
spreads
400
200
Emerging Markets Bond Index
Lehman Brothers High Yield
mai-07
janv.-07
sept.-06
mai-06
janv.-06
sept.-05
mai-05
janv.-05
sept.-04
mai-04
janv.-04
mai-03
sept.-03
janv.-03
sept.-02
mai-02
janv.-02
mai-01
sept.-01
janv.-01
sept.-00
mai-00
janv.-00
sept.-99
mai-99
janv.-99
mai-98
sept.-98
janv.-98
0
Merrill Lynch BBB Index
Source : CAAM London
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CAAM Funds Emerging Internal Demand
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
World GDP breakdown
Latam
Asia
CEEM EA
Developped
100%
World GDP growth at current exchange rates (real, YoY)
Latam
EM EA
Emerging Asia
Developped
4,5%
4,0%
90%
3,5%
80%
3,0%
70%
60%
2,5%
50%
2,0%
40%
1,5%
30%
1,0%
20%
0,5%
10%
0,0%
0%
2003 2004 2005 2006 2007
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source : CAAM, EIU
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CAAM Funds Emerging Internal Demand
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
World GDP growth at current exchange rates (real, YoY)
World GDP breakdown
Latam
Emerging Asia
EM EA
Developped
100%
90%
6,0%
Latam
EM EA
Emerging Asia
Developped
5,0%
80%
70%
4,0%
60%
3,0%
50%
40%
2,0%
30%
20%
1,0%
10%
0%
0,0%
2002 2003 2004 2005 2006
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source : CAAM, EIU
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CAAM Funds Emerging Internal Demand
2. The strong drivers of Internal Demand
in Emerging Countries
2.1 Household consumption: the emergence of a gigantic middle class (1/3)
An accelerator effect beyond a certain level of development…

< 3000$ : low incomes, subsistence consumption (strong share of food and clothing)

> 3000$: decent incomes allowing savings and consumption (cars, white goods, education, etc.)
60
Distribution of urban Chinese income
Percentage of households with income
higher than 3000$ pa
Income percentile
percentile
Income
50
2000
731
2005
1235
69%
47
40
Urban revenu /capita
Growth
Nbr of people over
Growth
30
Average GDP growth :
Average increase in number of people over 3000$ :
2010
1911
55%
179
281%
2015
3000
57%
419
134%
9%
24%
20
10
0
0
1000
2000
3000
4000
5000
6000
2000
7000
8000
2000 2005
2005 2005
2010
2000 2000
2010
Source : Nomura, July 2007« China consumer – The great Leap Upwards »
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9000 10000 11000 12000 13000 14000 15000 16000
CAAM Funds Emerging Internal Demand
2015
2.1 Household consumption: the emergence of a gigantic middle class (2/3)
Acceleration effect : for example, the car industry
Nb of cars per 1000
habitants
Private car penetration
Nb of habitants
per car
700
United States
Canada
600
Germany
UK
France
Germany
US
500
Italy
400
Brazil
Japan
Nb of cars per 1000 habitants
Russia
Korea
Japan
300
200
China
India
100
0
Log scale
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Source : Rostow, Goldman Sachs
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CAAM Funds Emerging Internal Demand
2.1 Household consumption: the emergence of a gigantic middle class (3/3)
Massive middle-class population expansion in highly-populated countries

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
3,5
3
Middle class in Brazil, Russia, India & China
Dramatic rise in China's and India's middle class
1600
Nb of people with income above
3000$ pa (bn)
China
1400
India
1200
2,5
1000
2
800
1,5
600
1
400
0,5
200
0
0
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Sources : Goldman Sachs
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CAAM Funds Emerging Internal Demand
2005
2015
2025
2035
2045
2.2 Corporate investments: strong support from private investments
86
Capacity utilization ratio
84
82
80

High levels of capacity utilization
78
76
74
72
Computation : average of Brazil, Thailand, Korea, Mexico, India, China
US$bn
%
100
90
80
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
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
2003
2004
2005
2006E
Asia Pacific Net Debt-to-Equity Ratio* (RHS)
Source: Merrill Lynch
CAAM Funds Emerging Internal Demand
Q2 2007
Q4 2006
Q2 2006
Q4 2005
Q2 2005
Q4 2004
Q2 2004
Q4 2003
Q2 2003
Q4 2002
Q2 2002
Healthy balance sheets should
translate into higher capex
0
2000
2001
2002
Asia Pacific Free Cash Flow * (LHS)
Source : OECD, CAAM
100
90
0
Q4 2001
Q2 2001
Q4 2000
Q2 2000
Q4 1999
Q2 1999
Q4 1998
Q2 1998
Q4 1997
Q2 1997
Q4 1996
Q2 1996
Q4 1995
Q2 1995
70
2.2 Government spending: strong support from infrastructure

Governments infrastructure spending plans for 2007 to 2009
Country
Investment estimated
Sectors targeted
China
400bn$
(12% GDP)
Energy, transportation (rail, highways), environment
protection.
2008 Olympics is a reason for sustained spending
India
110bn$
(9,7% GDP)
Roads, ports, oil and gas, power generation.
Indonesia
45bn$
(10,5% GDP)
Roads, power generation, ports & water treatment
Has been reduced given slow regulatory reform and efforts to
combat corruption
Russia
185bn$
(15,6% GDP)
Projects to facilitate exports of commodities (pipeline, ports)
25bn$
Central & Eastern Europe (3,5% GDP)
South Africa
60bn$
(23%)
Brazil
100bn$
(7,7% GDP)
Mexico
Total
60bn$
(6,8%)
985bn$ (10,8% GDP)
Spending target trans-European transport network (high
speed motorways, rail lines)
Will focus on electricity generation and transportation (rail
freight)
2010 world cup is the objective
Will apply to a wide range of sectors: oil, power generation,
telecommunications, transportation, engineering and
construction
Natural gas, electricity, oil, roads, highways, home building
Source : Merrill Lynch, World Bank
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CAAM Funds Emerging Internal Demand
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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CAAM Funds Emerging Internal Demand
2.2 Strong support from urbanisation

Urbanisation in major emerging economies
High demand for goods & services :
100

Accommodation
90

Public facilities : water treatment,
80
transport, schools etc
70

Electricity, energy
60

Consumer goods

Leisure
50
40
30

Driving force for many of the
economic domestic sectors
20
10
0
1950
1960
1970
Brazil
1980
1990
China
2000
India
2010
2020
2030
Russia
Source :IMF
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CAAM Funds Emerging Internal Demand
3. CAAM Funds Emerging Internal Demand
3.1 CAAM Funds Emerging Internal demand: concept & attractiveness
Internal Demand: an economic concept…
DOMESTIC
DEMAND
=
Household
consumption
+
Corporate
investments
+
Government
spending
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
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
Focus on companies exposed to emerging domestic demand

Using tested investment philosophy and process
CAAM Funds Emerging Internal Demand
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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CAAM Funds Emerging Internal Demand
3.2 CAAM Funds Emerging Internal Demand key features (2/2)
 CAAM Funds Emerging Internal Demand should be less volatile than other
GEM funds
Volatility 3 years (monthly performance)
40%
35%
30%
25%
20%
15%
MSCI EMF Domestic sectors
MSCI EMF
août-07
févr.-07
août-06
févr.-06
août-05
févr.-05
août-04
févr.-04
août-03
févr.-03
août-02
févr.-02
août-01
févr.-01
août-00
févr.-00
août-99
févr.-99
août-98
févr.-98
août-97
févr.-97
10%
MSCI EMF External sectors
MSCI Bric
Source: CAAM
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CAAM Funds Emerging Internal Demand
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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CAAM Funds Emerging Internal Demand
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
Trackingerror
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
1 year
3 years
5 years
Performance
33%
165%
311%
Rank
33/328
8/234
3/190
Quartile
1/4
1/4
1/4
Source : Lipper (Funds sold in Europe – December 2007)
Category : Equities Emerging markets
Past performance doesn’t guarantee futur returns.
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CAAM Funds Emerging Internal Demand
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-Standard&Poor’s (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
 Latin America equity fund
 Europe emerging equity fund
More than €2 billion
under management
(as at 31/12/2007)
* Past performance doesn’t guarantee future returns.
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CAAM Funds Emerging Internal Demand
CAAM Funds Emerging Internal Demand – Fund information
Classic (C)
Management company
Institutional (I)
Crédit Agricole Asset Management Luxembourg S.A.
Investment manager
Crédit Agricole Asset Management
Custodian
CACEIS Bank Luxembourg
Reference currency
USD
Minimum recommended period
Countries registered for sales as at
14/04/2008
Isin Code
Minimum initial subscription
Share categories
5 years
Austria, Belgium, Finland, France, Germany, Hong Kong, Irland, Italy, Luxembourg, The
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom
Accumulation :
LU0319685854
Distribution :
LU0319686076
Accumulation :
LU0319685342
Distribution :
LU00319685425
LU0319686159
None
USD 500 000**
None
Accumulation / Distribution
Frequency of NAV calculation
Accumulation
Daily
Cut off for dealing times
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
Maximum conversion fee
1.00%
Maximum redemption fee
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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Classic S* (S)
CAAM Funds Emerging Internal Demand
Disclaimer
This document which is not contractual and not part of documents usually certified by statutory auditors, is provided solely for information purposes by Crédit Agricole Asset
Management, based on sources that we consider to be reliable. Crédit Agricole Asset Management can in no way be held responsible for any decision made on the basis of
information contained in this document.
The information contained in this document doesn’t constitute a recommendation, a request for proposal or an invitation to purchase, sell or switch shares in the funds (Organismes
de Placement Collectif en Valeurs Mobilières or OPCVM, UCITS) described herein, and should in no case be interpreted as such. The information contained in this document may
be modified without prior notice. Additional information is available upon request. The information contained in this document is disclosed to you on a confidential basis and you
agree it shall not be copied, reproduced, or distributed to a third party without our prior written approval. The information contained in this document is not intended for all categories
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Your attention is drawn to the fact that units or shares in these UCITS may not be purchased if the regulations of your country of origin or any other applicable regulation forbid such
purchase. As a consequence, it is your responsibility, prior to subscribing to any shares, to ensure that such purchase is permitted by applicable laws and regulations, as well as to
inform yourself as to the fiscal consequences of such investment. It is also your responsibility to read the legal documents in force for each UCITS, in particular the prospectus as
approved by the AMF (French Regulatory Authority) and the CSSF (Luxembourg Regulatory Authority) which are available upon request.
Past performance does not prejudge future results, nor is it a guarantee of future returns. The value of units or shares in UCITS may fluctuate according to market conditions and as
a result the value of initial investments may rise as well as fall.
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 d’investissement 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 Sicav’s 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 Sicav’s 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 general public.
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CAAM Funds Emerging Internal Demand