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Pictet

  1. 1. image positioning Top: 1.1 cmPictet-Quality Global Equities Left: 14 cm Width: 12.6 cmA dispassionate quantitative approach Height: 17 cmFOR PROFESSIONAL INVESTORS ONLYLaurent NguyenPictet Asset ManagementNovember 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: EUR 109.6 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-Quality Global Equities For professional investors only 3
  4. 4. 3 long-term strategic axes across three investment stylesWhile global in reach, we remain focused in what we do Long Only Long / Short Quantitative GREATER EUROPE EMERGING WORLD GLOBAL SPECIALTIESPictet Asset Management Pictet-Quality Global Equities For professional investors only 4
  5. 5. 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-Quality Global Equities For professional investors only 5
  6. 6. Quality Global EquitiesCombining long term strategic views with mid-term convictions Long Only Long / Short Quantitative GREATER EUROPE EMERGING WORLD Quality Global GLOBAL SPECIALTIES EquitiesPictet Asset Management Pictet-Quality Global Equities For professional investors only 6
  7. 7. Why those long-term axes?Greater Europe • Strong home advantage in research and decision makingOur World • Domestic asset classes of many PAM clientsEmerging World • Secular rise of EM countriesTomorrow’s world • Synergies across EM specialties: global/regional, debt/equitiesGlobal Specialties • Secular rise of global solutions – eg: thematic, fundamental indicesTomorrow’s realities • PAM’s strengths in select areas: e.g. environment, quants, global macroPictet Asset Management Pictet-Quality Global Equities For professional investors only 7
  8. 8. 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-Quality Global Equities For professional investors only 8
  9. 9. 2The case for Quality Equities
  10. 10. What is Quality Equity? Sustainable Long-term vision growth COMPANIES WITH Reasonable Healthy valuation balance sheet Higher shareholders’ remunerationPictet Asset Management Pictet-Quality Global Equities For professional investors only 10
  11. 11. Why Quality Equities?An opportunity to exploit failuresin common sense Long-term IES outperformance UIT YEQ Resilience in LIT down markets UA YQ WH Profit from behavioural biases Lower-risk approach to equity investingPictet Asset Management Pictet-Quality Global Equities For professional investors only 11
  12. 12. °Belief n°1: High growth leads to higher return Fact: The lowest growing companies tend to outperform In theory 11.0% Geometric performance global Faster growing companies equities 1991-2011 are expected to deliver 10.0% greater return for shareholders 9.0% In practice 8.0% High-growth companies 7.0% tend to underperform their more conservative peers 6.0% Q1-LOWEST GROWTH Q2 Q3 Q4-HIGHEST GROWTH Note: Annual compounded performance of global equities by assets growth 1991-2011. Largest 20% global equities. Ranked by total assets growth over 5-year periods. Equally-weighted portfolios rebalanced twice a year. Total return in USD.Pictet Asset Management Pictet-Quality Global Equities For professional investors only 12
  13. 13. °Belief n° 2 : Leverage enhances returns Fact: Beyond a certain threshold, financial leverage is detrimental to stock performance In theory Geometric performance global 9.0% equities 1991-2011 The higher the leverage, the higher the expected return on equity 8.0% In practice 7.0% Highly indebted companies tend to underperform their less leveraged peers 6.0% Q1-LOWEST LEVERAGE Q2 Q3 Q4-HIGHEST LEVERAGE Annual compounded performance of global equities by financial leverage 1991-2011 Note: Largest 20% global equities. Ranked by debt/equity ratio. Equally-weighted portfolios rebalanced twice a year. Total return in USD.Pictet Asset Management Pictet-Quality Global Equities For professional investors only 13
  14. 14. °Belief n° 3 : More risk, more reward Fact: Higher return does not require higher risk In theory 800 Equity investors should be rewarded in direct proportion to the systematic 400 risk they are taking 200 In practice 100 High-flying companies tend 75 to underperform their more 12.1989 12.1991 12.1999 12.2001 12.2003 12.2005 12.1993 12.1995 12.1997 12.2007 12.2009 12.2011 defensive peers World Index High Beta Low Beta Equally-weighted portfolios (USD), rebalanced every 6 months Note: Largest 20% global equities. Ranked by historical beta. Total return in USD.Pictet Asset Management Pictet-Quality Global Equities For professional investors only 14
  15. 15. °Belief n° 3 : More risk, more reward Fact: Defensive stocks help in down turns, BUT also outperform over a complete economic cycle Source: Datastream World Indices, OECD, 1991-2011Pictet Asset Management Pictet-Quality Global Equities For professional investors only 15
  16. 16. Quality strategy avoids investor biases OVERCONFIDENCE HERDING STRUCTURAL CONSTRAINTS Systematic tendency to Most people feel safer Benchmarking and limits ‘buy hope’ and pay a doing what everyone else is to leverage induce sub- premium for it doing optimal behaviorPictet Asset Management Pictet-Quality Global Equities For professional investors only 16
  17. 17. Example: Ahold’s road to QualityAn international retailing group based in the Netherlands GROWTH BY ACQUISITION CRISIS ROAD TO RECOVERY 40 NOT A QUALITY NOT A QUALITY QUALITY STOCK STOCK STOCK 35 30 25 20 15 10 5 Ahold. Share price in EUR 0 199306/10/1994 12/30/1992 11/14/1995 04/29/1997 03/15/20002001 01/30/20032004 12/01/2005 10/08/1998 08/23/2001 07/06/2004 05/10/2007 10/10/2008 03/17/2010 2012 08/16/2011Pictet Asset Management Pictet-Quality Global Equities For professional investors only 17
  18. 18. 2003 to date: Ahold is a new companyCompany possesses qualitycharacteristics Shareholders’ ROE hovers around 25% returns Company digests its growth AHOLD New Management Company Debt is paid off deleveraging P/E falls to 10 Valuation Further examples can be found in Appendix 1Pictet Asset Management Pictet-Quality Global Equities For professional investors only 18
  19. 19. 3Investment process
  20. 20. Our philosophyInvestors tend to repeat thesame errors through time A dispassionate quantitative process is best suited forOur motto : exploiting these systematic“This time is NEVER different” biases, in our view Quality companies are Low volatility portfolios are a businesses that tend to be natural choice when the defensive, overlooked and empirical risk/return underpriced relationship is non-existent or negative Success is improved by embedded risk control and effective cost control.Pictet Asset Management Pictet-Quality Global Equities For professional investors only 20
  21. 21. Two-step portfolio construction1- Quality screening Non-quality RESEARCHTo ensure higher expected returns Companies UNIVERSEwhile avoiding costly investmentmistakes2- Low volatility portfolio INVESTABLE Unfavorableconstruction UNIVERSE Risk-returnTo reach an optimal trade-off Characteristicsbetween attractive returns and FINAL PORTFOLIOlower volatility while avoidingilliquidity risk. ~2’800 ~1’300 companies companies ~200 stocks Low Volatility Quality Screening Portfolio ConstructionPictet Asset Management Pictet-Quality Global Equities For professional investors only 21
  22. 22. 3Simulated portfolio performance andcharacteristics
  23. 23. Performance simulation 800 Quality Global Equities (simulated) MSCI World Total Return 400 200 100 75 12.1989 12.1990 12.1993 12.1999 12.2001 12.2002 12.2003 12.2004 12.2005 12.2006 12.2007 12.2008 12.1991 12.1992 12.1994 12.1995 12.1996 12.1997 12.1998 12.2000 12.2009 12.2010 12.2011 Portfolio simulated following our Quality investment process on a global equities universe. Portfolio rebalanced every 6 months. Performance presented gross of all fees (no trading costs are taken into account), total return in USD. Annual simulated performance is available in appendix 2 Source: PAM, Datastream, MSCIPictet Asset Management Pictet-Quality Global Equities For professional investors only 23
  24. 24. Simulated Quality Global Equities portfolioPerformance Simulated portfolio MSCI World Historical statistics Simulated portfolio MSCI WorldYTD 7.7% 8.0% Volatility p.a. 12.3% 15.4%1 year 6.7% -1.0% Sharpe ratio 0.78 0.393 years annualised 2.2% -0.3% Tracking Error 5.2%5 years annualised 3.0% -1.6% Information ratio 0.6690-12 annualised 9.6% 6.0% Beta 0.76 Max drawdown -44.4% -57.3% Typical number of positions around 200 Maximum position size 1.0% Turnover Typically <50% Currency exposure Not hedged Note: Simulation (31.12.1989-30.07.2012) based on a portfolio of Global Equities following the Quality investment process. Portfolio rebalanced every 6 months. Performance presented gross of all fees (no trading costs are taken into account), in total return USD Source: PAM, Datastream, MSCI Pictet Asset Management Pictet-Quality Global Equities For professional investors only 24
  25. 25. Pro-forma portfolio exposureRelative geographical breakdown (%) Relative sector breakdown (%) Japan Cons. Discr. Honk Kong Cons. Staples Germany Telecom Sweden Industrials Switzerland Utilities France Heath Care Australia Materials UK Energy Canada IT US Financials -8 -6 -4 -2 0 2 4 6 8 -12 -10 -8 -6 -4 -2 0 2 4 6 8Relative market cap breakdown Top 10 holdings by decreasing markets size Weight Benchmark Active >USD 100bn APPLE 0.5% 2.45% -1.95% EXXON MOBIL 0.5% 1.70% -1.20% USD 50bn-100bn CHEVRON 0.5% 0.92% -0.42% IBM 0.5% 0.91% -0.41% USD 10bn-50bn MICROSOFT 0.5% 0.88% -0.38% USD 2bn-10bn NESTLE 0.5% 0.84% -0.34% PROCTER & GAMBLE 0.5% 0.75% -0.25% < USD2bn JOHNSON & JOHNSON 0.5% 0.75% -0.25% PFIZER 0.5% 0.74% -0.24% -20% -10% 0% 10% 20% 30% 40%Pro-forma portfolio applying our Quality investment process as of 30.07.2012. Source: PAM, MSCI PHILIP MORRIS 0.5% 0.61% -0.11%Pictet Asset Management Pictet-Quality Global Equities For professional investors only 25
  26. 26. Pro-forma Quality Global Equities portfolio Portfolio characteristics Pro-forma portfolio MSCI World Ex Ante Volatility 13.6% 17.5% Ex Ante Tracking Error 3.7% Beta 0.77 1.00 Assets Growth 5Y 5.9% 10.4% Debt / Equity 3.8x 4.9x Return on Equity 19.8% 18.6% Dividend Yield 3.1% 2.7% P/E 14.6 14.7 Number of positions 205 >1600 Pro-forma portfolio applying our Quality investment process as of 30.07.2012. Source: PAM, MSCIPictet Asset Management Pictet-Quality Global Equities For professional investors only 26
  27. 27. Simulated performance outperforms over most business cycles…Performance comparison across various business cycles measured trough-to-trough 225% +43% MSCI World Simulated Quality Global Equities portfolio in USD 200% 175% 150% 125% 100% -4% 75% +39% 50% +29% 25% 0% -25% -50% Sep 90-Sep 98 Sep 98-Sep 02 Sep 02-Feb 09 Feb 09-Jul 12Portfolio simulated following our Quality investment process on a global equities universe. Portfolio rebalanced every 6 months.Performance presented gross of all fees (no trading costs are taken into account), total return in USDSource: PAM, Datastream, MSCIPictet Asset Management Pictet-Quality Global Equities For professional investors only 27
  28. 28. … and during bear marketsThe simulated strategy is particularly resilient in crisis environment 0% -25% +8% +5% +5% -50% +30% +15% -75% Koweit invasion Asian crisis Dotcom bubble Financial crisis EU debt crisis Jul 90-Sep 90 Jul 98-Sep98 Mar 00-Sep 02 Oct 07-Feb 09 May 11-Sep 11 MSCI World Simulated Quality Global Equities portfolio in USD Portfolio simulated following our Quality investment process on a global equities universe. Portfolio rebalanced every 6 months. Performance presented gross of all fees (no trading costs are taken into account), total return in USD Source: PAM, Datastream, MSCIPictet Asset Management Pictet-Quality Global Equities For professional investors only 28
  29. 29. Quality portfolio adapts to market conditions…Portfolio Beta Quality World Equities, portfolio beta evolution, based on back test 1.1 1.0 0.91. Defensive stance 0.8 0.72. Time-varying risk- 0.6 budget allocation 0.5 0.4 0.3 0.2 0.1 0.0 jan 0 jan 1 2 jan 3 4 jan 5 6 jan 7 jan 8 9 jan 0 jan 1 2 jan 3 4 jan 5 jan 6 7 jan 8 jan 9 0 jan 1 2 v.9 v.9 v.9 v.9 v.9 v.9 v.9 v.9 v.9 v.9 v.0 v.0 v.0 v.0 v.0 v.0 v.0 v.0 v.0 v.0 v.1 v.1 v.1 jan jan jan jan jan jan jan jan jan Beta Portfolio simulated following our Quality investment process on a global equities universe. Portfolio rebalanced every 6 months. Source: Datastream, MSCI, Pictet Asset ManagementPictet Asset Management Pictet-Quality Global Equities For professional investors only 29
  30. 30. … helps you avoid overbought sectors…Portfolio sector weights Quality World Equities, selected portfolio sector weights, based on back test 15% 10%1. Structural overweight 5% on defensive sectors 0%2. Structural underweight -5% on highly levered financials -10%3. Anticipates the -15% technology sector -20% correction janv.91 janv.92 janv.93 janv.94 janv.95 janv.96 janv.97 janv.99 janv.01 janv.02 janv.04 janv.05 janv.06 janv.07 janv.09 janv.10 janv.11 janv.12 janv.90 janv.98 janv.00 janv.03 janv.08 Cons. Staples Utilities IT Financials Portfolio simulated following our Quality investment process on a global equities universe. Portfolio rebalanced every 6 months. Source: Datastream, MSCI, Pictet Asset ManagementPictet Asset Management Pictet-Quality Global Equities For professional investors only 30
  31. 31. … while providing stable and higher returns on equityReturn on Equity (%) ROE comparison with MSCI World’s index, based on back test 25 201. Higher shareholder value creation than the market 152. Stable businesses in 10 time of crisis 5 0 1 2 4 6 9 2 4 6 7 9 0 2 0 3 5 7 8 0 1 3 5 8 1 v.9 v.9 v.9 v.9 v.9 v.0 v.0 v.0 v.0 v.0 v.1 v.1 v.9 v.9 v.9 v.9 v.9 v.0 v.0 v.0 v.0 v.0 v.1 j an j an j an j an j an j an j an j an j an j an j an j an jan jan jan jan jan jan jan jan jan jan jan Quality World MSCI World Portfolio simulated following our Quality investment process on a global equities universe. Portfolio rebalanced every 6 months. Source: Datastream, MSCI, Pictet Asset ManagementPictet Asset Management Pictet-Quality Global Equities For professional investors only 31
  32. 32. Which global equity strategy would you choose? Higher risk Better quality Lower yield Higher yield Same valuation Same valuation MSCI World Index Quality Global EquitiesPictet Asset Management Pictet-Quality Global Equities For professional investors only 32
  33. 33. 4Conclusion
  34. 34. Quality equities in a nutshell1. Strong and stable companies2. Defensive portfolio3. Free from most investor biases4. Attractive returns “Slow and steady wins the race” AesopPictet Asset Management Pictet-Quality Global Equities For professional investors only 34
  35. 35. Pictet-Quality Global Equities Name Pictet-Quality Global Equities Fund Manager Laurent Nguyen Reference index MSCI World Legal status Compartment of the Pictet Luxembourg SICAV, UCITS compliant EU saving directive In scope no tax Reference currency USD NAV calculation Daily, settlement NAV + 2 Launch date 3 December 2012 Dividend Reinvested or distributed Dividend Management Admin & Exp. TER(%) Share class ISIN code distribution Fees (%) Custody Fees I USD LU0845339554 No 0.50% 0.25% 0.80% P USD LU0845339638 No 1.00% 0.25% 1.30% P dy USD LU0845339711 Yes (yearly) 1.00% 0.25% 1.30% R USD LU0845339802 No 1.70% 0.25% 2.00% Z USD LU0845339984 No Sep. agreement 0.15% 0.16% I EUR LU0845340057 No 0.50% 0.25% 0.80% P EUR LU0845340131 No 1.00% 0.25% 1.30% R EUR LU0845340305 No 1.70% 0.25% 2.00% Z EUR LU0845340487 No Sep. agreement 0.15% 0.16%Source: Pictet Asset Management as at 31 October 2012.I-Share: min investment USD 1000000, or equivalent for EUR share class. Z-Class: Separate management agreement with Pictet Asset Management requiredPictet Asset Management Pictet-Quality Global Equities For professional investors only 35
  36. 36. Team
  37. 37. Team expertiseEvolution of team’s expertise and current assets under management Low volatility Launch Quality Oct 2009 Feb 2012 Defensive Low volatility Sept 2011 Dec 2012 SRI Europe Biotech US-Japan Global Equities fund fund strategy fund EUR 12 mio seed money Quantitative strategies 2009 Current AuM: EUR 680 mio Low volatility March 2012 June 2011 Europe Defensive SRI strategy Emerging Market fundPictet Asset Management Pictet-Quality Global Equities For professional investors only 37
  38. 38. Active Quant investment team Laurent Nguyen Head Active Quants & SRI 3 Quantitative Analysts Reda Jürg Messikh Olivier Pictet Ruxandra Pinata 2 SRI Analysts Christoph Butz Nathalie Cerutti Index team Research Analysts Product Specialist (9 investment professionals) (3 analysts) Habib Nasrallah ADDITIONAL INVESTMENT TRADING & OPERATIONAL RESEARCH ACTIVE QUANTS & SRI TEAM SUPPORTPictet Asset Management Pictet-Quality Global Equities For professional investors only 38
  39. 39. Active Quant TeamLaurent Nguyen Olivier Pictet Reda Jürg MessikhSenior Investment Manager Quantitative Analyst Quantitative Investment AnalystQuantitative Investment team Quantitative Investment team Quantitative Investment teamLaurent Nguyen joined Pictet Asset Management Olivier Pictet joined Pictet Asset Management in Reda Jürg Messikh joined Pictet Assetin 1998. He is a Senior Investment Manager and 2001. He is a quantitative analyst dedicated to Management in 2007 and is a Quantitativeresponsible for SRI investments and active quant SRI portfolios within the Quantitative Investment Investment Analyst for SRI investments in thein the Quantitative Investment team. team. He has devoted the past few years to Quantitative Investment team.Before joining Pictet, he was a teaching assistant extensive research and development projects in Prior to his current position, he was Deputy Headin the fields of portfolio management and option the field of applied economics. of Risk Control in the Product and Risktheory until 1996. From 1997 to 2007, he was an He previously worked for Olsen & Associates where Management team until 2011.instructor at AZEK-The Swiss Training Centre for he was one of the main research group members. Before joining Pictet, he was a researcher at theInvestment Professionals. He then worked for Dynamic-Asset-Management, a Swiss Federal Institute of Technology (EPFL) inLaurent obtained a Master’s degree in Financial firm specialized in data analysis and banking Lausanne and at EURANDOM in Eindhoven, TheEconomics from the University of Geneva. software developments. Netherlands. Olivier holds a PhD in Physics from the University Reda Jürg graduated with an Engineering degree in of Geneva and has a completed postdoctoral Physics from EPFL. He also holds a PhD in course on artificial intelligence. Mathematics and a MSc in Stochastic Modeling from the University of Paris (Orsay).Pictet Asset Management Pictet-Quality Global Equities For professional investors only 39
  40. 40. Active Quant TeamRuxandra Pineta Habib NasrallahGraduate Trainee Senior Product SpecialistQuantitative Investment team Quants & Balanced Management - Group Habib Nasrallah joined Pictet in 2005 and is aRuxandra Pineta joined Pictet Asset Management Senior Product Specialist for the Quants &in 2011 as a Graduate Trainee responsible for Balanced Management team. Prior to his currentquantitative analysis in the Quantitative position, Habib was a Senior Product Specialist forInvestment team. Core Equities and Index funds.Before joining Pictet, she held an internship Before joining Pictet Habib worked eight years as aposition during five months with Encelade Capital sell-side Pan-European Equity analyst for CreditSA as a Junior Quantitative Analyst. Suisse First Boston (1997) and Standard and Poor’s (2001) covering the technology and capitalRuxandra holds a degree in Economics and goods sectors.Finance from the Università degli Studi di Bolognaand an MSc in Finance from the University of Habib graduated from Ecole Centrale Paris inLausanne. 1991 with a Master in Engineering and a specialisation in real-time computer sciences, and holds an MBA degree from the London Business School since 1997. He is also a CFA charterholder.Pictet Asset Management Pictet-Quality Global Equities For professional investors only 40
  41. 41. Appendix 1Examples of quality companies
  42. 42. Geberit: Solutions for sanitary technology applicationsInnovative company behind Prudent managementthe behind-the-wall toiletflusher Favours organic growth Innovative products Lack of credible competitors Geberit Pricing power Steady earnings growth Rising dividend share Net cash since going public in 1999Pictet Asset Management Pictet-Quality Global Equities For professional investors only 42
  43. 43. TOD’S: The hand-crafted shoe makerA quality company, not just Prudent investmentfor the quality of its strategyproducts Pricing power Higher returns on equity TOD’S Net cash Shareholder friendly Steady growth and diversificationPictet Asset Management Pictet-Quality Global Equities For professional investors only 43
  44. 44. AppendixOthers
  45. 45. Quality indicators performance by sectors 160 EnergyDebt / Equity 140 Materials Industrials 120 Consumer Discretionary 100 Consumer Staples 80 Health Care Financials 60 Information Technology 40 Telecom 31.12.1988 31.12.1990 31.12.1992 31.12.1994 31.12.1996 31.12.1998 31.12.2000 31.12.2002 31.12.2004 31.12.2006 31.12.2008 31.12.2010 Utilities -40% -20% 0% 20% 40% 60% 80% Bottom 25% Top 25% Bottom / Top SpreadAssets Growth 160 Energy 140 Materials Industrials 120 Consumer Discretionary 100 Consumer Staples 80 Health Care Financials 60 Information Technology 40 Telecom 31.12.1996 31.12.2000 31.12.2004 31.12.1988 31.12.1990 31.12.1992 31.12.1994 31.12.1998 31.12.2002 31.12.2006 31.12.2008 31.12.2010 Utilities -50% 0% 50% 100% 150% 200%Source: World index, Datastream, Pictet Asset Management Bottom 25% Top 25% Bottom / Top SpreadPictet Asset Management Pictet-Quality Global Equities For professional investors only 45
  46. 46. Investment process: Step 1- Quality screening To score companies according to proprietary indicators Non-quality RESEARCH Companies UNIVERSE • Rank each company on a set of quality indicator (asset growth, shareholders’ returns, balance sheet strengths, etc) • Company’s final rank is calculated as the INVESTABLE sum of each of its quality indicators’ rank UNIVERSE • Better half of the universe is investable ~2’800 ~1’300 companies companiesPictet Asset Management Pictet-Quality Global Equities For professional investors only 46
  47. 47. Investment process: Step 2- Low volatility portfolio construction To build a defensive portfolio offering higher return per unit of risk taken • A low volatility portfolio construction aiming Unfavorable INVESTABLE UNIVERSE at maximising the risk/return profile risk-return characteristics – Selection of 150+ stocks for diversification purposes FINAL PORTFOLIO ~1’300 – Liquidity constraints companies ~200 stocks – No country or sector limitsPictet Asset Management Pictet-Quality Global Equities For professional investors only 47
  48. 48. Yearly performance simulation Quality Global Equities- Proforma simulation. Yearly performance since 1990 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Proforma Benchmark Portfolio simulated following our Quality investment process on a global equities universe. Portfolio rebalanced every 6 months. Performance presented gross of all fees (no trading costs are taken into account), total return in USD. Source: PAM, Datastream, MSCIPictet Asset Management Pictet-Quality Global Equities For professional investors only 48
  49. 49. 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.Pictet Asset Management Pictet-Quality Global Equities For professional investors only 49

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