Pictet-Absolute Return GlobalDiversifiedPictet Asset ManagementOctober 2012
1Introduction to Pictet AssetManagement
Brief introduction to Pictet Asset ManagementPerformance                                         •   First institutional m...
Pictet Asset Management – What sets us apart                          AN INVESTMENT LED SERVICE COMPANY                   ...
Absolute Return Global DiversifiedCombining long term strategic views with mid-term convictions                           ...
3 major mid-term convictions•    Persisting macro risk & volatility - ultimately global currency re-alignment        - Low...
2An proven investment approachadapted to new marketconditions
Benefits of our multi-asset target return solutionARGD aims to                 •   Deliver positive returns in various mar...
ARGD performance                                  Net performance since inception in EUR Portfolio has avoided large drawd...
Positioning ARGDProduct offers many                           Losses in downattractive features                           ...
ARGD improves your portfolio’s risk-return profileIn comparison to:                      Risk/return profile of ARGD and s...
3Combining two sources ofreturns
Complementary returns at work                                   Strategies gross performance evolution since inception (EU...
Portfolio overview, after combining both strategies                            Breakdown of market exposure as at November...
1. Market exposure is diversified across asset classes Asset classes are                                               Dev...
Diversification of our market exposure across asset classes                          Breakdown of market exposure by asset...
2. Manager strategy: value extraction illustration                                                   Extracting the manage...
Improving the odds of delivering positive active management                           Current breakdown by manager strateg...
With our innovative portfolio construction approach                                     The even distribution of risk driv...
A dynamic market exposureThe market exposure’s twocomponents                                                              ...
Rigorous and robust manager selectionOnly funds with sustainable Fund managers are chosen according to their capabilityand...
Managing risk to reduce portfolio drawdown                          MARKET EXPOSURE                                   MANA...
4Conclusions
Our competitive edgeResearch and innovation:   •   Dedicated research team with strong academic and industry              ...
ARGD, a multifaceted productThe product can be used as- A targeted return fund- A global balanced fund- A liquid, regulate...
ARGD – Technical details                            Name                      Pictet-Absolute Return Global Diversified   ...
Biographies
Biographies   Carlos Ontaneda                                        Odorico von Susani                                   ...
Biographies  Stéphane Daul                                                 Rafael Matamoros                               ...
Appendix
Your team dedicated to absolute returns Carlos Ontaneda (12) Head of Multi Asset and Total Return team Portfolio Construct...
Extreme movements have risen in frequencyOccurrence of “unusual”       Frequency of market moves pre vs post march 2000 (m...
We aim to reduce the impact of extreme risk eventsCorrelation across asset                            Our proprietary risk...
Example - benefits of low correlation                            Performance of various asset classes since 2011Different ...
Portfolio exposure by strategies                             Total portfolio composition: average exposure by strategyMana...
Market exposure characteristicsPortfolio diversified across                                                               ...
Evolution of the market exposure (Beta)Weight evolution by asset class We increased the weight             100% of bonds i...
Evolution of the manager exposure (alpha)Weight evolution by strategy class since inception  100%   90%   80%   70%   60% ...
Enhancements to adapt to ever-changing marketsNew market conditions have led to new enhancementsExamples of enhancements m...
ARGD performanceAnnualised return in EUR                                                                                  ...
Performance and risk dataKey comparison results                                                      Performance (in EUR n...
Pictet Asset Management                                                                                                   ...
2012.11.19 argd citywire
2012.11.19 argd citywire
2012.11.19 argd citywire
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2012.11.19 argd citywire

  1. 1. Pictet-Absolute Return GlobalDiversifiedPictet Asset ManagementOctober 2012
  2. 2. 1Introduction to Pictet AssetManagement
  3. 3. Brief introduction to Pictet Asset ManagementPerformance • First institutional mandate in 1967Client service • A worldwide presence with:Integrity – 5 investment management centres (London, Geneva, Zurich, Tokyo & Singapore) – 17 marketing & client relationship management centres • More than 600 professionals at Pictet Asset Management Assets under management: GBP 88.2 bn Equities Quantitative 22.0% 20.6% Balanced Total Return 7.2% Equities 0.4% MMF/Short-term Bonds Bonds 26.8% 23.0%Source: Pictet Asset Management, as of 31.08.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 3
  4. 4. Pictet Asset Management – What sets us apart AN INVESTMENT LED SERVICE COMPANY A solid group focused on asset and wealth management Sound financial situation for Pictet and for PAM THE COMPANY ‘Human management of resources’ THE COMPANY Long term perspective: resource, footprint and products Strong investment performance vs. competition THE ASSET MANAGER THE ASSETof client interest: anti-dilution, soft closings Protection MANAGER Strong brand image: recognized for quality of service Transparent fees, adapted to market conditions THE SERVICE PROVIDER Dedicated support for our distribution “partners”Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 4
  5. 5. Absolute Return Global DiversifiedCombining long term strategic views with mid-term convictions Long Only Long / Short Quantitative GREATER EUROPE EMERGING WORLD GLOBAL SPECIALTIES ARGDPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 5
  6. 6. 3 major mid-term convictions• Persisting macro risk & volatility - ultimately global currency re-alignment - Low volatility / high income strategies in demand - Emerging debt and EM-FX will outperform - RMB as trade and reserve currency• Securitization 2.0 beginning - Corporate credit as a new major asset class in Europe and EM• Paradigm shift in benchmarking - Cap-weights out, fundamentals in - Quality equities and emerging debt to benefitPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 6
  7. 7. 2An proven investment approachadapted to new marketconditions
  8. 8. Benefits of our multi-asset target return solutionARGD aims to • Deliver positive returns in various market conditions – Targets 4% return plus cash rate over 3/5 years cycle • Provide resilience in adverse markets • Offer a high degree of diversification through multi-asset, multi-strategy investments • Provide lower risk and lower directionality relative to products with similar returns – Targets volatility of 5% to 7% • Offer daily liquidity via a UCITS productAUM of EUR 1bn approx instrategyPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 9
  9. 9. ARGD performance Net performance since inception in EUR Portfolio has avoided large drawdown during very 130 volatile markets Positive upside is 120 preserved as can be seen during 2006, 2007, 2010 and 2012 YTD 110 Substantial risk-adjusted 100 outperformance of ARGD vs. global equities and hedge fund indices 90 80 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Mar-06 Nov-06 Mar-07 Nov-07 Mar-08 Nov-08 Mar-09 Nov-09 Mar-10 Nov-10 Mar-11 Nov-11 Mar-12 ARGD NAV EONIA HFRX Absolute Return Source: Bloomberg, Pictet Asset Management as of 31.10.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 10
  10. 10. Positioning ARGDProduct offers many Losses in downattractive features Resilience markets Liquid Illiquid Dynamic Static Cheap Expensive Opaque Transparent Directional Non-directional Balanced ARGD Hedge funds fundsPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 11
  11. 11. ARGD improves your portfolio’s risk-return profileIn comparison to: Risk/return profile of ARGD and selected strategies- A global balanced portfolio Return- A world equities portfolio 4.0% ARGD World Eq- HFRX + ARGD 3.0% Balanced Balanced World Eq + ARGD 2.0%Sharpe ratio improvements 1.0%+30%for balanced+ 42% for World equities 0.0% -1.0% HFRX -2.0% 0.0% 5.0% 10.0% 15.0% 20.0% Risk Example of balanced portfolio comprising 50% World Eq, 30% Govt Bonds, 15% Corporate bonds, and 5% Commodities ARGD added for 25% in World Eq and balanced portfolio Measurement period since ARGD inception March 2006 Source: Bloomberg, Pictet Asset ManagementPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 12
  12. 12. 3Combining two sources ofreturns
  13. 13. Complementary returns at work Strategies gross performance evolution since inception (EUR)1.A market exposure (beta)that blends asset classes 130 1252.A market independent 120exposure (alpha) that extractsvalue adds from selected 115Pictet fund managers 110 105Complementary behaviour iskey to achieving absolute 100returns 95 Jun-06 Sep-06 Dec-06 Jun-07 Sep-07 Dec-07 Jun-08 Sep-08 Dec-08 Jun-09 Sep-09 Dec-09 Jun-10 Sep-10 Dec-10 Jun-11 Sep-11 Dec-11 Jun-12 Sep-12 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12Correlation of 0 between bothsources of return Manager Market ARGD21 out of 26 quarters havepositive returns in at least onestrategy Source: Pictet Asset Management, as of 31.10.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 15
  14. 14. Portfolio overview, after combining both strategies Breakdown of market exposure as at November 2012A number of diverse 180%strategies and investmentstyles Volatility Protection Market 160% Commodities Emerging Market Equities exposure 140% Developed EquitiesAvoids over-reliance on Currenciesone single management 120% High Yield Credit Emerging Market Debtteam or asset class 100% Developed Government Debt Relative value equity indices 80% Global fixed income Manager Commodities exposurePortfolio includes over 60% Swiss Equities Small Cap1000 positions Swiss Equities Sector Equities 40% Japanese Equities Low Risk Equities 20% European Equities II European Equities I 0% China Equities Source: Pictet Asset Management, PAMFolio, as at 12.11.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 16
  15. 15. 1. Market exposure is diversified across asset classes Asset classes are Developed Emerging selected according to US high yield Govt bonds Market debt their long term behaviour: Developed Emerging Equity -Diversifying qualities equity equity volatility -Return potential Commodities -Protection in down markets CurrenciesPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 17
  16. 16. Diversification of our market exposure across asset classes Breakdown of market exposure by asset classes Developed government debt 2% 5% Emerging market 8% debt US high yield 5% credit Dev Equities 7% Emerging Equities 58% 6% Currencies 9% Commodities Volatility Protection Source: Pictet Asset Management, PAMFolio, as at 12.11.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 18
  17. 17. 2. Manager strategy: value extraction illustration Extracting the manager outperformance* - Illustration Some managers can beat 140 the market on a consistent basis 130 120 We extract this outperformance by carving 110 out the market return 100 The manager’s value-added 90 is totally uncorrelated to market movements 80 70 Market Active Manager Outperformance (Beta) (Alpha) * Please note the graph above is an illustration only, and DOES NOT reflect the performance of the ARGD fund relative to the market Source: Pictet Asset Management.Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 19
  18. 18. Improving the odds of delivering positive active management Current breakdown by manager strategy 5 - 15 sources of value creation China Equities 8% 4% European Equities I 7% 13% European Equities II Low Risk Equities 7% 7% Japanese Equities Sector Equities 12% Swiss Equities 13% Swiss Equities Small Cap Commodities 8% 11% 10% Global fixed income Relative value equity indices Source: Pictet Asset Management, PAMFolio, as of 12.11.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 20
  19. 19. With our innovative portfolio construction approach The even distribution of risk drives our asset allocation weightsWe mitigate market volatility Even risk allocation Resulting portfolioby equalising risk across 100%asset classes 75%Risk is measured as the 50%expected loss duringextreme market events 25% 0%Traditional sector allocation Developed Equities Emerging Equities Commoditiesleads to an unbalanced risk Corp. Credit Currencies EM Govt Bondsallocation Dev. Govt BondsPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 21
  20. 20. A dynamic market exposureThe market exposure’s twocomponents • Vix futures • Dev equities TACTICAL ASSET • Dev govt. bonds ALLOCATION • Commodities • Currencies • EM equities MARKET EXPOSURE • Developed equity • US high yield (even risk distribution) • EM debt • Dev govt. bondsPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 22
  21. 21. Rigorous and robust manager selectionOnly funds with sustainable Fund managers are chosen according to their capabilityand repeatable value – to preserve capital in down marketscreation are selected – the consistency (long-term) and regularity (frequency) of value creation – the purity (no style impact) and robustness of their processEfficient cost management Costs are kept to a minimum (no double counting like in fund of funds)Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 23
  22. 22. Managing risk to reduce portfolio drawdown MARKET EXPOSURE MANAGER OUTPERFORMANCE ASSESSMENT ASSESSMENT ASSET CLASS RISK •Ensure an even distribution across asset classes (long-term Weekly asset class selection) MARKET CONDITIONS •Adjust Vix futures exposure based on market conditions MARKET CONDITIONS FUND MANAGER PERFORMANCE Include a new fund manager / Monthly • Adjust asset class weight to • account for market risks exit existing one (tactical adjustment over the • Assessment via proprietary short term) scoringPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 24
  23. 23. 4Conclusions
  24. 24. Our competitive edgeResearch and innovation: • Dedicated research team with strong academic and industry backgrounds • Develop strategies applied via quantitative methods • Adaptive investment process through implementation of research findingsPAM investment universe: • Wide range of investment teams across asset classes • Direct access and close contact with PAM fund managers • No double fees thanks to pool structureDiscipline and seasoned • Combination of quantitative and discretionary decisioninvestment process: making • Rigorous application of investment process • Extensive knowledge of multi-asset class marketsPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 27
  25. 25. ARGD, a multifaceted productThe product can be used as- A targeted return fund- A global balanced fund- A liquid, regulated substitutefor a fund of hedge funds- A diversifying source of returnsfor an equity or bond portfolioPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 28
  26. 26. ARGD – Technical details Name Pictet-Absolute Return Global Diversified Team Head Carlos Ontaneda Reference index EONIA Capitalization Index Legal status Compartment of the Pictet Luxembourg SICAV, UCITS compliant EU saving directive In scope - Tax Reference currency EUR NAV calculation Daily, settlement NAV + 2 Launch March 2006 Management Exp. TER(%)* Share class ISIN code Valoren Fees (%) I EUR LU0247079386 002466808 0.45% 1.40% P EUR LU0247079469 002466816 1.0% 1.98% P dy EUR LU0247079543 002466825 1.0% 1.86% R EUR LU0247079626 002466821 1.6% 2.33% HI USD LU0407042059 004929531 0.45% 1.65% HP USD LU0407042489 004929536 1.0% 1.93% HI CHF LU0407040277 004929456 0.45% 1.37% HP CHF LU0407040863 004929471 1.0% 1.91% * As at end of September 2012. 20% performance fee over EONIA +2% with high watermark Source: Pictet Asset ManagementPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 29
  27. 27. Biographies
  28. 28. Biographies Carlos Ontaneda Odorico von Susani Olivier Monti Head Quantitative Analyst Quantitative Analyst Multi Asset and Total Return team Multi Assets and Total Return team Multi Asset and Total Return team Odorico von Susani joined Pictet Asset Olivier Monti joined Pictet Asset Management in Carlos Ontaneda joined Pictet Asset Management in Management in 2007. He is currently a 2007. He is head of the Multi Asset and Total 2005. He is a quantitative analyst in the Multi Quantitative Analyst for the Multi Asset and Total Asset and Total Return team. Before assuming his Return unit. Before assuming his current position in Return team. Before holding his current position in 2011, he was a Quantitative Analyst within the current position in 2008, he was a quantitative 2011, he served as Head of Software analyst/ fund manager in the Quantitative team. Development. Investment team where he developed and Before earning his MBA he worked for five years at Previously, from 1999 to 2002, Odorico led the IT implemented quantitative stock selection models AIG where his most recent position was that of Architecture team at Pictet Group for E-Banking in an US equity fund. senior financial analyst in the reinsurance group. solutions such as Private Net, Business Connect Before joining Pictet he worked for SDK Asset Carlos holds an MBA with High Honours in Analytic and Custody Link. Management as a hedge fund analyst for a fund of Finance and Economics from the University of Odorico holds an MSc and PhD in Computer funds. His career began at Credit Suisse First Chicago Booth School of Business. He is also a Science from the University of Geneva, a Master of Boston where he headed the corporate actions Chartered Financial Analyst (CFA) charterholder. Science in Banking and Finance from the HEC function for the Securities Lending and Borrowing Lausanne and a Federal Diploma in Corporate desk. Development. Olivier holds an MSc in Finance from the HEC University of Geneva. He is a Chartered Financial Analyst (CFA) charterholder and also a certified Financial Risk Manager (FRM).Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 31
  29. 29. Biographies Stéphane Daul Rafael Matamoros Daniel Toppo Senior Quantitative Analyst Senior Investment Manager Junior Investment Manager Multi Asset and Total Return team Multi Asset and Total Return team Multi Asset and Total Return team Stéphane Daul joined Pictet Asset Management in 2011 as a Senior Quantitative Analyst in the Multi Rafael Matamoros joined Pictet Asset Daniel Toppo joined Pictet Asset Management in Asset and Total Return unit. Management in 2002 and is a Senior Investment 2007 and is a Junior Investment Manager in the Before joining Pictet, he was with Riskmetrics Manager in the Multi Asset and Total Return team. Multi Asset and Total Return team. Prior to his during almost 5 years as head of research. He Prior to his current position, he was a Senior current position, he was a Java Analyst Developer Investment Manager in the Quantitative in the Information Technology team. previously worked as a senior risk analyst at Swiss Investment team. Before joining Pictet in 2007, he worked two years Re until 2003 and subsequently as a senior quantitative analyst at EIM from 2004 to 2005. Before joining Pictet, he worked for three years at as a Middleware Software Project Manager at Barclays Global Investors as a Portfolio Manager Swissquote Bank. Stéphane has published numerous academic for Institutional clients in international indexed Daniel graduated with a master’s degree in articles in both physics and finance. He is a CFA funds and eight years for Capital International Computer Science from both the Swiss Federal charter holder and was awarded a Ph.D. in Perspective as an Editor of the MSCI Indices. Institute of Technology (EPFL) and the Universitat Theoretical Physics from the University of Rafael graduated from the University of Geneva Politècnica de Catalunya (UPC). He also qualified Fribourg, Switzerland. with a degree in Economics. He also holds a as a Certified International Investment Analyst diploma from the Ecole dIngénieurs de Genève. (CIIA/AZEK).Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 32
  30. 30. Appendix
  31. 31. Your team dedicated to absolute returns Carlos Ontaneda (12) Head of Multi Asset and Total Return team Portfolio Construction Research Reporting & Risk Control Rafael Matamoros (22) Odorico von Susani (13) Vincent Heyberger (3) Senior Investment Manager Quantitative Analyst Team Assistant Daniel Toppo (7) Olivier Monti (12) Investment Manager Quantitative Analyst Stéphane Daul (13) Senior Quantitative AnalystInteraction with other resources at Pictet Asset Management Fixed income Equity Balanced & Strategy investment teams investment teams teams Traders Risk control Source: Pictet Asset Management, September 2012. (9) = number of years relevant experience.Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 34
  32. 32. Extreme movements have risen in frequencyOccurrence of “unusual” Frequency of market moves pre vs post march 2000 (monthly measures, rebased)volatility has greatly 30increased post March 252000 20Greater occurrence of 15large losses 10Traditional asset 5allocation models have notworked well 0 0% and +2% +2% and +4% +4% and +6% +6% and +8% +8% and +10% -2% and 0% -10% and -8% -8% and -6% -6% and -4% -4% and -2% more than 10% less than -10% pre 2000 post 2000 Source: Pictet Asset Management.Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 35
  33. 33. We aim to reduce the impact of extreme risk eventsCorrelation across asset Our proprietary risk models account for extreme volatilityclasses increases in time ofmarket stressDiversification benefitsdecrease when needed most volatility Usual rangeOur proprietary risk modelsaccount for extreme riskscenariosIn such events, our differentasset classes contributeequally to performance market stressPictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 36
  34. 34. Example - benefits of low correlation Performance of various asset classes since 2011Different levels ofvolatility amongst assetclasses highlight the 115benefits of a diversified 110portfolio 105 100 95Underperformance of 90equities partiallycompensated by other 85asset classes (since 802011) 75 Mar-11 Mar-12 May-11 Oct-11 Nov-11 May-12 Oct-12 Dec-10 Jan-11 Feb-11 Apr-11 Jun-11 Sep-11 Dec-11 Jan-12 Feb-12 Apr-12 Jun-12 Sep-12 Jul-11 Aug-11 Jul-12 Aug-12 EM Equities Dev Equities Commodities Govt Bonds Source: Bloomberg, Pictet Asset Management as of 31.10.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 37
  35. 35. Portfolio exposure by strategies Total portfolio composition: average exposure by strategyManager portfolio variesbetween 40% and 80% Funded Notionalof fund assetsMarket portfolio ismodified according to Marketrisk levels in the market 100% Cash 40% Manager Manager 60% 60%Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 38
  36. 36. Market exposure characteristicsPortfolio diversified across Average expectedseveral asset classes Average weights* deviation**Deviation comes from both Developed Government Bonds 63% ±14%changes in risk assessment and Developed Equities 5% ±4%tactical overlay decisions Emerging Equities 4% ±2% Commodities 5% ±6% Emerging Debt 10% ±4% High Yield Debt 8% ±2% Currencies 5% ±6% * rebased to 100% **based on historical simulation and monthly timing model Current Usual range Beta (MSCI World) 0.07 0.0 to 0.25 Duration 4.2 0 to 6 Source: Pictet Asset Management, PAMFolio, as at 12.11.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 39
  37. 37. Evolution of the market exposure (Beta)Weight evolution by asset class We increased the weight 100% of bonds in May, following 90% a surge in market volatility 80% 70% 60% 50% 40% 30% 20% 10% 0% Mar-12 Jul-12 Jan-12 Apr-12 May-12 Jun-12 Feb-12 Aug-11 Sep-11 Oct-11 Aug-12 Sep-12 Oct-12 Nov-11 Dec-11 Developed govt. debt SMT EUR corp bonds Emerging market debt US high yield credit Currencies Commodities Equities Source: Pictet Asset Management, PAMFolio, as of 31.10.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 40
  38. 38. Evolution of the manager exposure (alpha)Weight evolution by strategy class since inception 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Fixed Income Strategies Relative values strategies Equity EM Strategies Regional large cap equities Sector equities Regional small cap equities Commodities Long/short equities Global large cap equities Source: Pictet Asset Management, PAMFolio, as of 31.10.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 41
  39. 39. Enhancements to adapt to ever-changing marketsNew market conditions have led to new enhancementsExamples of enhancements made to the fund since inception Fund inception TAA adjusted for New global equity Dynamic protection 2006 2009 Feb 2012 Oct 2012 faster reactivity strategy (manager) strategy through VIX futures (TAA)Pictet-AbsoluteReturn GlobalDiversifiedHistory Even risk distribution across asset classes (market) New fixed income Aug 2011 Sep 2012 strategy (manager)Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 42
  40. 40. ARGD performanceAnnualised return in EUR Annualised volatility in EUR* 4% 8% 7% 3.3% 6% 2% 7.1% 5% 4% 3% 4.2% 0% 2% 1% -1.7% 0% -2% Pictet-Absolute Return Global Diversified- HFRX Global Hedge Fund EUR Index Pictet-Absolute Return Global Diversified-I HFRX Global Hedge Fund EUR Index I EUR EUR Maximum drawdown in EUR Pictet-Absolute Return Global Diversified-I EUR HFRX Global Hedge Fund EUR Index 0% -5% -8.1% -10% -15% -20% -27.2% -25% -30% Pictet-Absolute Return Global HFRX Global Hedge Fund EUR Index Diversified-I EUR*Based on monthly calculation since inceptionSource: Bloomberg, daily data, reference period: 31.03.2006 to 31.10.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 43 Pictet-Absolute Return Global Diversified-I EUR HFRX Global Hedge Fund EUR Index
  41. 41. Performance and risk dataKey comparison results Performance (in EUR net)Inception 27 March 2006 % Fund EONIA HFRX Global HF IndexNAV Month -0.6 0.0 -0.6(End month I EUR shares) EUR 123.89 2012 YTD 5.9 0.2 1.7Fund size EUR 687m 2011 -0.2 0.9 -8.7Volatility ex post1 4.2% 2010 5.4 0.4 4.6Maximum drawdown2 -8.1% 2009 -0.3 0.7 13.2Investment team Multi Asset & Total Ret. 2008 -4.1 4.0 -23.8 2007 9.6 4.0 2.7Team head Carlos Ontaneda1Based Since inception1 3.3 1.9 -1.7 on daily calculation2Based on monthly calculation since inception 1AnnualisedRisk statistics Monthly performance since inception (in EUR net) Ex ante volatility % 4.0 % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year Ex ante beta1 0.02 2012 1.9 1.2 0.0 0.8 -0.6 0.7 1.6 0.4 0.3 -0.6 5.9 Weighted modified duration 5.0 2011 -0.2 1.4 -0.2 1.3 -0.4 -0.3 -0.5 -1.6 -2.2 1.8 -0.4 1.1 -0.2 1Relative to MSCI World 2010 -2.0 0.5 1.9 0.3 -1.2 -1.0 1.4 -0.1 3.2 0.6 -0.1 2.0 5.4 2009 -0.3 1.2 -0.3 -2.3 -2.1 0.8 0.0 0.9 0.8 0.3 1.0 -0.2 -0.3 2008 -2.6 0.7 -0.8 0.2 -0.4 -1.0 1.5 0.3 -1.6 -2.5 1.1 0.9 -4.1 2007 0.7 -0.1 0.9 1.4 1.4 1.0 1.1 -0.4 1.7 1.7 -0.3 0.1 9.6 2006 - - - 0.7 -1.8 -1.1 0.8 1.0 1.4 1.9 1.7 1.4 6.11Relative to MSCI World Source: Pictet Asset Management, as of 31.10.2012Pictet Asset Management Pictet-Absolute Return Global Diversified For professional investors only 44
  42. 42. Pictet Asset Management For further information, please visit our websites www.pictet.com www.pictetfunds.comThis marketing material is issued by Pictet Funds (Europe) S.A. It is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or resident of, or domiciled or locatedin, any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Only the latest version of the fund’s prospectus, regulations,annual and semi-annual reports may be relied upon as the basis for investment decisions. These documents are available on www.pictetfunds.com or at Pictet Funds (Europe) S.A., 15, avenue J. F.Kennedy L-1855 Luxembourg.The information and data presented in this document are not to be considered as an offer or solicitation to buy, sell or subscribe to any securities or financial instruments.Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to change without notice. Pictet Funds (Europe) S.A. has not takenany steps to ensure that the securities referred to in this document are suitable for any particular investor and this document is not to be relied upon in substitution for the exercise of independentjudgment. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Before making any investment decision, investors are recommended toascertain if this investment is suitable for them in light of their financial knowledge and experience, investment goals and financial situation, or to obtain specific advice from an industry professional.The value and income of any of the securities or financial instruments mentioned in this document may fall as well as rise and, as a consequence, investors may receive back less than originally invested.Risk factors are listed in the fund’s prospectus and are not intended to be reproduced in full in this document.Past performance is not a guarantee or a reliable indicator of future performance. Performance data does not include the commissions and fees charged at the time of subscribing for or redeemingshares. This marketing material is not intended to be a substitute for the fund’s full documentation or any information which investors should obtain from their financial intermediaries acting in relationto their investment in the fund or funds mentioned in this document.

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