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VIA ECF AND FEDERAL EXPRESS 

The Honorable Peter G. Sheridan 

July 10, 2015 

United States District Court, District of New Jersey 

Clarkson S. Fisher Building & Courthouse 

402 East State Street 

Trenton, New Jersey 08608 

Re: Sivolella v. AXA Equitable Life Ins. Co., No. 11-4194 (D.N.J.) 

Sanfordv. AXA Equitable Funds Mgmt. Grp., LLC, No. 13-0312 (D.N.J.) 

Dear Judge Sheridan: 

Pursuant to the Court's June 30, 2015 Order, 1 the parties write to provide a brief 

summary of the general relationships and principles that govern the mutual funds at issue in the 

above-referenced actions. 

I. Overview of Variable Annuities and Mutual Funds 

The Plaintiffs in these consolidated actions are investors in variable annuities sold by 

AXA Equitable Life Insurance Company ("AXA Equitable"). A variable annuity is an insurance 

contract between an investor and an insurance company, pursuant to which the insurance 

company promises to make periodic payments to the contract owrier or beneficiary. Unlike a 

fixed annuity (which pays a fixed dollar amount periodically to the purchaser of the annuity), the 

amounts of the periodic payments under a variable annuity contract vary depending on the 

investment returns of the underlying investment options selected by the variable annuity holder. 

The underlying investment options for variable annuities are typically mutual funds. A 

mutual fund is "a pool of assets, consisting primarily of [a] portfolio [of] securities, and 

1 The Court's June 30, 2015 Order also ordered that the parties submit a joint letter identifying 

the "motions currently pending, apart from Daubert related motions, and the briefs and docket 

entry numbers associated with same." Plaintiffs submitted a letter identifying the motions 

currently pending and the corresponding docket entry numbers on June 26, 2015 (ECF No. 161) 

(Sivolella). 

301 Carnegie Center 3rd Floor Princeton, New Jersey 08540 

A Pennsylvania LLP Stephen M. Orlofsky, New Jersey Administrative Partner 

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Case 3:11-cv-04194-PGS-DEA Document 164 Filed 07/10/15 Page 1 of 4 PageID: 11282
Judge Peter G. Sheridan 

July 10, 2015 

Page 2 

belonging to the individual investors holding shares in the fund." Jones v. Harris Assocs. L.P., 

559 U.S. 335, 338 (2010). A mutual fund is a separate company or can be a portfolio of a 

separate company registered under the Investment Company Act of 1940 ("ICA"), which is a 

federal statute that governs mutual funds. Mutual funds typically have no employees of their 

own, but they are overseen by a board of directors (or trustees). Mutual funds contract with 

service providers to carry out various aspects of the fund 's operations. For example, mutual 

funds contract with investment advisers and administrators to carry out functions necessary for 

the management and administration of the fund, for which these service providers are paid fees, 

such as "management fees" and "administrative fees," from the mutual funds for providing these 

services. 

II. The Variable Annuities and Mutual Funds at Issue in Sivolella I Sanford 

Each of the Plaintiffs in this case owns variable annuities sold by AXA Equitable. As 

owners of the variable annuities, Plaintiffs allocated the contributions they made to their variable 

annuities among a number of investment options offered in their variable annuities, including 

certain mutual funds. The twelve mutual funds at issue in this case (the "Funds")2 are available 

as underlying investment options in some or all of Plaintiffs' variable annuities. Plaintiffs 

allocated at least a portion of the contributions they made to their annuities to one or more of 

these Funds. 

The Funds are each separate portfolios or "series" of an entity called the EQ Advisors 

Trust (the "EQAT"), a registered investment company under the ICA. 

III. The Defendants: AXA Equitable and AXA FMG 

AXA Equitable Funds Management Group, LLC ("AXA FMG") is a registered 

investment adviser that has contracted with EQAT to serve as the investment manager 

("Investment Manager") and administrator ("Administrator") for the Funds. AXA FMG is a 

wholly-owned subsidiary of AXA Equitable. 

AXA FMG has an Investment Management Agreement and Mutual Funds Service 

Agreement with EQAT pursuant to which it charges the Funds, respectively, a management fee 

2 The Funds are the EQ/Common Stock Index Portfolio, EQ/Core Bond lndex Portfolio, EQ/Equity 500 

Index Portfolio, EQ/Equity Growth PLUS Po1tfolio, EQ/GAMCO Small Company Value Portfolio, 

EQ/Global Bond PLUS Portfolio, EQ/Global Multi-Sector Equity Portfolio, EQ/lntermediate 

Government Bond Portfolio, EQ/Large Cap Value PLUS Portfolio, EQ/Mid Cap Value PLUS Portfolio, 

EQ/PIMCO Ultra Short Bond Portfolio, and EQ/T. Rowe Price Growth Stock Portfolio. 

Case 3:11-cv-04194-PGS-DEA Document 164 Filed 07/10/15 Page 2 of 4 PageID: 11283
Judge Peter G. Sheridan 

July 10, 2015 

Page 3 

and an administration fee. Prior to May 1, 2011, AXA Equitable was the counter-party to those 

Agreements. 

AXA FMG has hired subadvisers and a sub-administrator to perform certain management 

and administrative services with respect to the Funds. AXA FMG has contracts with the 

subadvisers and the sub-administrator, pursuant to which the subadvisers and sub-administrator 

are paid fees for the services they provide. 

IV. The EQAT Board 

The Funds are governed by a board of trustees, called the Board of Trustees of the EQ 

Advisors Trust (the "EQAT Board"). Pursuant to Section 15( c) of the ICA, the EQA T Board 

receives information relating to the Funds and votes on an annual basis on whether to approve 

the Funds' management and administrative fees. The relationship between the Funds, the EQAT 

Board, AXA FMG, the subadvisers, and sub-administrator is illustrated in the diagram enclosed 

herewith. 

If Your Honor has any questions, the parties will be fully prepared to further discuss 

these matters during the July 241

h conference call with Your Honor. 

(Encl.) 

cc: All Counsel of Record (via ECF) 

Case 3:11-cv-04194-PGS-DEA Document 164 Filed 07/10/15 Page 3 of 4 PageID: 11284
Diagram of Mutual Fund Structure and Managem

Variable Annuities 

EQUI-VEST 

Accumulator Plus 

Accumulator NQ 

Investment 

options 

include: 

AXAFMG 

Subadviser 

c D,etc. 

Board of Trustees 

Oversees 

Mutual Funds 

{12 Funds Are At-Issue) 

Administration contra

(Mutual Funds Servic

Agreement) 

AXAFMG 

Sub-administration 

contract 

Sub-administrato

{JPMorgan) 

Case 3:11-cv-04194-PGS-DEA Document 164 Filed 07/10/15 Page 4 of 4 PageID: 1