Press Releases

MSCI Hedge Invest, Series 2 launch

Innovative New Investment Solution from ONE Financial Offers Investors One-Stop Shopping for Hedge Funds

Toronto, Ontario - August 23, 2004

ONE Financial announced the launch today of the ONE Financial MSCI Hedge Invest Index Notes, Series 2 (the "Notes"), an innovative investment product offering returns linked to a broadly diversified index of 97 hedge funds, with 100% principal guarantee at maturity. According to Jeffrey O'Brien, President and CEO of ONE Financial, the Notes are the only investment product currently available to retail investors in Canada that combines the unique benefits of index-based investing with all of the additional benefits of hedge fund investing.

Indexation: the Next Step in Hedge Fund Investing

Index-based products are the next step in hedge fund investing," said Jeffrey O'Brien. "Index-based investments have been available in the stock and bond universes for many years, and investors are aware of all of the unique benefits index-based products have to offer including diversification, low fees, and access to an entire asset class through a single investment. We have incorporated these benefits into a principalguaranteed hedge fund-based product in order to provide Canadian investors with a safer way to access the hedge fund universe. I guess you could say we wanted to provide a way to stick your toe into the hedge fund pool.

The Notes are a follow-up to the launch of the first series of the Notes which closed successfully last December. The Notes are issued by Société Générale (Canada), with 100% of principal guaranteed at maturity by its parent Société Générale, one of the largest banks in the world (and approximately twice the size of Canada's largest bank). They are available for purchase through financial advisors across Canada until September 30, 2004, for a minimum investment of only $2,000. The Notes also offer a tax-efficient structure that defers taxes on growth, and they qualify as Canadian content for RRSPs, RRIFs, RESPs, and DPSPs.

Hedge Funds Offer Positive Performance Potential in all Market Environments

Hedge funds are one of the fastest growing segments in the market and have become widely recognized by pension funds, banks, insurance companies, and sophisticated investors as a way to reduce portfolio volatility and potentially enhance returns. Because hedge fund managers have access to a wider range of portfolio management techniques than those available to traditional mutual fund managers, hedge funds generally have the potential to achieve positive returns in all stock market environments. The inclusion of hedge funds as an additional asset class in an investment portfolio generally mitigates risk through diversification, and also provides the potential for positive performance when traditional investments are not performing well.

Enhanced Return Potential

The Notes' performance is linked to the returns of the MSCI Hedge Invest Lyxor Tracker Fund (the "Index Fund"), whose investment objective is to track the performance of a hedge fund index called the MSCI Hedge Invest Index, compiled by Morgan Stanley Capital International Inc ("MSCI"). The Index Fund's pro-forma historical performance between January 31, 1995 and April 30, 2004 was 14.97% per annum (pro forma historical performance data for the period before August, 2003 relies on significant assumptions, and is provided for illustration purposes only), with 1/5 the volatility of the S&P 500 stock market index. The Notes' pro-forma historical performance over the same period was 14.59%. An investment in the Notes will not directly track the performance of the Index Fund, but will provide investors with the potential for enhanced returns relative to the performance of the underlying Index Fund. When the Notes mature in approximately nine years, investors will receive their principal, plus a positive amount, if any, equal to 2 times the adjusted return of the Index Fund (defined as the percentage gain, if any, of the average of the monthly value of the Index Fund from inception to maturity compared to the initial NAV of the Index Fund, reduced by a guarantee cost factor of 0.25% per annum), plus the sum of the lowest monthly performance each year of the Index Fund. A complete description of how the return on the Notes is calculated, along with details about the risks of investing in the Notes, are contained in the Notes' Information Statement which is available from financial advisors across Canada upon request.

Important Information

The MSCI Indexes are the exclusive property of Morgan Stanley Capital International Inc. ("MSCI"). MSCI and the MSCI index names are servicemarks of MSCI or its affiliates and have been licensed for use for certain purposes by Société Générale ("SG"). The Notes referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such Notes. The Information Statement contains a more detailed description of the limited relationship MSCI has with SG and any related Notes. No purchaser, seller or holder of this product, or any other person or entity, should use or refer to any MSCI trade name, trademark, or servicemark to sponsor, endorse, market or promote this product without first contacting MSCI to determine whether MSCI's permission is required. Under no circumstances may any perdon or entity claim any affiliation with MSCI without the prior written permission of MSCI. This document should be read in conjunction with the Information Statement. In the event of any inconsistency between this document and the Information Statement, the Information Statement shall govern. Past perfopr Past performance is no guarantee of future returns.

Société Générale ("SG"), Société Générale Securities Inc. ("SG Securities"), Société Générale (Canada) ("SG Canada") and its affiliates do not guarantee the accuracy of the performance figures and simulations described herein. This is not an offer, or the solicitation of an offer, to buy or to sell any of the securities referred to herein. Employees of Société Générale ("SG"), SG Americas Securities Corporation ("SG Americas"), SG Securities, SG Canada and its affiliates may have investments in the securities, including derivatives thereof, referred herein and may make purchases from or sales to customers of such securities or derivatives thereof. SG, SG Securities, SG Canada and its affiliates assume no fiduciary responsibility or liability for any consequences, financial or otherwise, arising from the subscription or acquisition of the Notes. You should consult to the extent necessary, your own independent, legal, tax, financial and related professionals as to the merits of this investment strategy to ensure that any decision you make is suitable for you or your company.

This transaction implies a certain level of risk due to, amongst other factors, the volatility of the Index Fund. For this reason, this transaction may be entered into only by persons capable of appreciating the nature of the risks that are inherent to structured products. Therefore, you should consult, if you deem necessary, with your own lawyers, financial advisors and other professional advisors in order to determine whether an investment in the Notes is appropriate for you on the basis of your specific financial situation.

Historical returns, back testing, simulated results and pro-forma statistics in this document are illustrative and provided for information only, and are based on information that SG believes to be fair, although SG cannot guarantee the accuracy of such back testing and simulations.