Presentation ubs western winners equity fund

Asset management

September 2013

Unlock the benefits of EM with Western StocksUBS Western Winners Equity Fund

For Professional Clients only CH Version

Nick Irish, Head of Global Equities

Asset management

1

Combining the best of both worlds

Diversified, actively managed equity fund with approximately 40 companies from developed markets (note: this fund does not hold stocks listed in emerging markets)

Access to developed market companies with a strong EM footprint. Companies are evaluated for this based on factors such as:

– High share of sales from EM

– Currently, the companies in the portfolio have, on average, 41% of sales from emerging markets

– High share of profits from EM

– Outlook for their ability to further profit from presence in EM

Benefit from less volatility, efficiency through reduced costs and a higher quality of companies due to superior corporate governance of developed market companies

Full hedging of foreign currency risks in the primary share class and hedged share classes

UBS Western Winners Equity Fund

Source: UBS Global Asset Management as of end July 2013

2

Experienced investment team

Portfolio Managers – proven track record in stock picking

Research – getting to know companies through deep analysis

Nick Irish PM

CharlesBurbeckPM

Broad, global market expertise based on 20 years of investment experience (average)

Deep global industry knowledge from a team of London-based Global Sector Specialists (average experience 14 years)

Konstantin Stoev, (12 years industry experience and the consumer sector specialist) has particularly valuable expertise for the Fund. He supports Nick & Charles as Deputy PM.

Deep regional industry knowledge from a large team of regional sector analysts based all over the world (average experience 14 years)


Proven investment acumen, with substantial resources and unique database

3

Proven investment process

Western

Winners

Our chosen approx. 40 DM stocks

PortfolioConstruction

Risk aware, customisedimplementation

PortfolioManagers

Broad globalmarket knowledge

Idea generation Portfolio Construction (T-V-T)¹

GlobalSectorSpecialists

Deepglobal industry knowledge

Regional analysts

Deep regional industry knowledge

Quantitative input

Cash flow based valuation screening

Static metrics based screening

EM sales % screening

Bespoke sector screens

Other inputs

External research

Personal networks

Ongoing monitoring

A combination of judgement and discipline

1 Thesis- Valuation-Timing: our criteria for stock selection

4

Emerging market economies: Still growing

Growth moderating, but billions of people continue to get richer

Emerging economies will generally continue their moves up the per capita income scale and spending patterns will continue to change as a result

Source: UBS Global Asset Management, Absolute Strategy Research/IMF estimates. Data as of end July 2013.

Slower growth trend, but sustainable, and faster than the developed world

Real GDP growth rates (% yoy)

-6

-4

-2

0

2

4

6

8

10

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

EM economies DM economies

5

Consumption remains the key to EM growth

Source: UBS Global Asset Management

Expanding consumption is key to China’s 12th Five Year Plan (2011-15)

“ China will expand its opening-up policy, and the nation needs to promote domestic consumption through continuing to open up its marketsLi Keqiang, newly elected Premier of China March 2013

”

6

Spending patterns are continuing to change

0 5,000 10,000 15,000 20,000 25,000

Sugar & confectioneryBread & cereals

Milk, cheese & eggsCoffee, tea & cocoa

Soft drinksTobacco

Alcoholic beverages

AV, photographic and computing equipmentVehiclesClothing

Transport servicesMedical products & equipment

Personal careEducation

Household textiles, tableware & utensilsElectricity, gas & other fuels

Recreation & culture durablesHousehold tools & appliances

Insurance and financial servicesTelephone & telefax services

Outpatient servicesRecreation & cultural services

Social protection

GDP per capita (USD)Unaffordable phase Growth phase

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ices

Typically, discretionary spending explodes above certain income thresholds

Growth phases of various products and services in relation to GDP per capita

Source: UBS Global Asset Management, The World Bank GDP per capita data in constant USD for 2012 released 1 July 2013, HSBC Global Research ‘Consumer in 2050: The Rise of the Middle Class ’ 15 October 2012. ‘Growth phase’ refers to the income bracket which exhibits the strongest growth in real dollar expenditures (USD)

3 billion EM consumersare here…

…another 700mare here

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Good opportunities continue to prevail……for companies that can satisfy these shifting needs

Source: UBS Global Asset Management. Data as of end July 2013.

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NestleNestleNestleNestleCoca-Cola Hellenic Imperial Tobacco, SABMiller

Google, Facebook, MicrosoftToyota MotorBurberryBoeing, Jardine MathesonHealthcare HoldingsColgate Palmolive, Shiseido

Energy Holdings

AIA, Citigroup, HSBC, Standard CharteredVodafone, Telenor

Richemont

Sugar & confectioneryBread & cereals

Milk, cheese & eggsCoffee, tea & cocoa

Soft drinksTobacco

Alcoholic beverages

AV, photographic and computing equipmentVehiclesClothing

Transport servicesMedical products & equipment

Personal careEducation

Household textiles, tableware & utensilsElectricity, gas & other fuels

Recreation & culture durablesHousehold tools & appliances

Insurance and financial servicesTelephone & telefax services

Outpatient servicesRecreation & cultural services

Social protection

Exposure within Western Winners Economic sector

8

Portfolio structures

8

UBS (Lux) Equity SICAV – Western Winners (USD) P-acc


Sector weights (%)

Health Care

Financials

Consumer Staples

Industrials

Energy

Information Technology

Materials

Consumer Discretionary

Telecommunication Services

16.4

14.9

14.8

12.7

10.2

8.6

8.5

8.2

5.8

Country exposure (%)

United States

United Kingdom

Japan

Switzerland

Hong Kong

Australia

Germany

Netherlands

Norway

Others

28.0

18.6

12.2

12.1

7.5

4.5

4.1

3.4

3.1

6.6

10 largest equity positions (in %)Fund

AIA Group Ltd 3.86

Nestle SA 3.74

Toyota Motor Corp 3.30

Koniklijke DSM NV 3.13

Jardine Matheson Holdings Ltd 3.13

HSBC Holdings PLC 3.11

LyondellBasell Industries NV 3.10

Citigroup Inc 2.98

Itochu Corp 2.90

BP Plc 2.87

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Portfolio structuresDiversified industry exposures


Consumer Discretionary Industrials Materials Financials Energy Telecoms IT

Consumer Staples Healthcare Utilities

North America

• Hollysys

• Boeing

• Lyondell-basell

• Citigroup • Gran Tierra

• Heritage

• Petro-minerales

• Microsoft

• Facebook

• Google

• Colgate Palmolive

• Baxter Int’l

• AbbVie

• Alexion

• Thermo Fisher

UK • Burberry • Aberdeen Asset Mgmt

• BP Genel • Vodafone • ImperialTobacco

• SAB Miller

• Coca Cola Hellenic

Europeex UK

• Richemont • KoninklijkeDSM

• ENI • Telenor • Infineon • Nestle • Bayer Novartis

Asiaex Japan

• JardineMatheson

• Rio Tinto • AIA

• HSBC

• Standard Chartered

• CSL

Japan • Toyota Motor • Thk

• Itochu

• Japan Petroleum

• Shiseido

Cyclical sectors Defensive sectors

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Interesting companies with a strong footprint in EM…

Telenor

SABMiller

• Telecoms operator, listed in Norway

• 56% sales from EM

• Benefits from strong growth in mobile internet usage in emerging markets

• Brewing and beverage company, listed in UK


• Grows twice as fast as global beer market due to its EM exposure(Africa, Latin America and Asia)

Nestle

• One of the largest global fast-moving consumer goods companies


• Benefits from the growth in demand for processed food in EM

This information should not be considered a recommendation to purchase or sell any particular security.The fund is actively managed, thus allocations can be changed any time at UBS’s discretion. Current portfolio structures may be found at www.ubs.com/fundgate. Source: UBS Global Asset Management as of end June 2013

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…while some may be less known

This information should not be considered a recommendation to purchase or sell any particular security.The fund is actively managed, thus allocations can be changed any time at UBS’s discretion. Current portfolio structures may be found at www.ubs.com/fundgate.

Shiseido

GenelEnergy

• Global cosmetics company, listed in Japan

• Approximately 20% sales, and growing, from EM

• Benefits from continued brand growth in EM especially in China and Brazil

• UK listed E&P company, with its assets in the Kurdish region of Iraq

• 100% of sales are in EM

• Major growth in exports from the Kurdistan project will feed energy demand in Turkey

Thermo Fisher

• A global leader in analytical and laboratory products and services’ listed in the US

• Approximately 20% of revenues from EM: fastest growing segment

• Benefits from ongoing strong demand for its air pollution measuring instruments in China

Source: UBS Global Asset Management as of end June 2013

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Recent activity highlights

Source: UBS Global Asset ManagementNote: Based on Global Equity model and may vary. Data as of end July 2013.

Complete sales

Bridgestone: A (Japan listed) world leader in tyre manufacturing. We originally bought the holding because of its competitive cost position, good utilisation and pricing power. It remains an exceptionally well-run company with good profitability. However, we believe its share price is now fully reflecting this thesis and further out-performance is limited. We sold the position in May after strong price appreciation. We switched into Toyota Motor instead, which has greater upside potential from here.

Shiseido: A (Japan listed) Global cosmetics company. We believe that the company’s domestic business in Japan is likely to improve as a result of income growth and a positive wealth effect, and we also expect continued growth in its EM business. The company has also just effected management change that is likely to lead to renewed focus on sales growth. Approximately 20% of sales (and growing( from EM

Itochu: One of Japan’s largest trading houses with a very long and strong involvement in China. We believe that the share price is not yet fully reflecting management’s focus on capital discipline and returns. Approximately 30% of sales from EM

Toyota Motor: The worlds largest automobile manufacturer. Cost cutting following severe business disruption in 2010 – 2011 has been successful and the company is benefitting from improving profits following yen depreciation and pick up in sales. Approximately 35% sales from EM

New purchases

EM opportunities from Japanese companies

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Western Winners: the best of both worldsWestern Winners stocks are developed market companies with a strong emerging markets (EM) footprint

EM growth – with the comfort, efficiency and quality of mature markets

Western Winners

stocks profit from

•High growth

•prospects for

•emerging markets…

plus

…compared to a direct emerging markets investment, this approach offers:

• Comfort through reduced expected volatility

• Efficiency through lower trading costs

• Quality through superior corporate governance

For explanations on financial wordings please refer to the glossary at www.ubs.com/glossary or contact for further information your UBS client advisor.

Additional information

APPENDIX

15

Performance data I

Source: UBS Global Asset Management. Data as of end July 2013. Portfolio characteristics are shown net of fees1These figures refer to the past. Past performance is not a reliable indicator of future results. The performance shown does not take account of any commission and costs charged when subscribing to and redeeming units

Performance indexed in % (share class P-acc; basis USD, net of fees)¹

85

90

95

100

105

110

115

Jan Feb Mar Apr May Jun Jul

UBS (Lux) Equity SICAV - Western Winners (USD) P-acc (hedged in USD)

MSCI World Developed hedged in USD (net div. reinv.)

MSCI Emerging Market hedged in USD (net div. reinv.)

MSCI Emerging Market in USD (net div. reinv.)

+ 10.73%

- 7.83%

- 9.85%

+ 6.07%


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Performance data II

Source: UBS Global Asset Management. Data as of end July 2013. These figures refer to the past. Past performance is not a reliable indicator of future results. The performance shown does not take account of any commission and costs charged when subscribing to and redeeming units


1) YTD: year-to-date (since beginning of the year)2) Reference index in currency of account (without costs)

Performance indexed in % (net of fees)

in % 2009 2010 2011 2012 2013 July since p.a.

YTD 2013 25.01.13

Fund (USD) – – – – – 3.88 6.07 –

Reference index² – – – – – 4.74 10.73 –

1

Fund (EUR hedged) – – – – – 1.69 6.00 –

Fund (CHF hedged) – – – – – 2.01 6.07 –

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Fund featuresUBS Western Winners Equity Fund

Legal Fund name: UBS (Lux) Equity SICAV – Western Winners (USD)

Share classes: (USD) P-acc; (CHF hedged) P-acc; (EUR hedged) P-acc

Legal structure: SICAVFund domicile: LuxembourgCustodian: UBS (Luxembourg) S.A.Launch date: January 25, 2013Portfolio management:

UBS Global Asset Management

Currency of account: USDReference index: MSCI World hedged in USD (net div. reinv.)Accounting year ends: May 31Distribution: ReinvestmentManagement fee: 1.44%Total expense ratio: N/ALiquidity: DailySwing pricing: Yes

Securities no.:(USD) P-acc: 20068923(CHF hedged) P-acc: 20068943 (EUR hedged) P-acc: 20068951

ISIN:(USD) P-acc: LU0859500539(CHF hedged) P-acc: LU0859500968(EUR hedged) P-acc: LU0859501420

Please note that the share classes mentioned have not yet been launched and that UBS has no obligation or duty to launch them.Data as of end July 2013.

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Nick Irish, ASIP

Nick Irish is Head of Global Equities within the Core/Value Equities business. His team is responsible for constructing and managing global equity portfolios worldwide. Nick is ultimately responsible for the delivery of all core global equity strategies and for their performance. He co-manages all the global equity strategies with Charles Burbeck.

Prior to being appointed to his current role in April 2012, Nick was a Senior Portfolio Manager on the Core/Value Global Equities team.

Nick joined UBS Global Asset Management in March 2008 from HSBC Global Asset Management where had been Senior Global Equity Portfolio Manager since 2005, co-managing their equity portfolios (with Charles Burbeck). Prior to this, Nick spent 11 years at Schroders, most latterly also working with Charles Burbeck, co-managing their integrated global equity products.

Nick is a Regular Member of the CFA Society of the UK.

Head of Global EquitiesManaging Director

Years of investment industry experience: 18

Education: Exeter University (UK), BSc

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Charles Burbeck, ASIP

Charles is Co Head of Global Equity Portfolios, responsible for co-managing all global equity strategies with Nick Irish

Charles joined UBS Global Asset Management in January 2013. He previously worked at Barclays Wealth and Investment Management as Global Head of Equities.

Prior to this, Charles was Head of Global Equities at HSBC Global Asset Management and BNP Fortis Investments. He began his career at Schroders in 1990 and spent twelve years there, most latterly working with Nick Irish co-managing their integrated global equity products. This was the second time the pair worked together, the first being at HSBC.

Charles is a Regular Member of the CFA Society of the UK


Education: University of St Andrews (UK), MA

Co-Head of Global Equity PortfoliosManaging Director

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Konstantin Stoev, CFA

Konstantin Stoev is an equity analyst within the Global Equities team. He is responsible for industry and company research, qualitative assessment and quantitative financial modelling within the consumer sector.

His other responsibilities include industry research and financial market analysis.

Konstantin joined UBS Global Asset Management in March 2009. Prior to this he was an equity analyst at Swiss Re covering the consumer sectors for a multi-billion dollar absolute return equity portfolio. His previous roles include senior equity analyst at Crédit Agricole Cheuvreux in Switzerland and equity analyst at Putnam Investments in the USA.

Global Sector SpecialistExecutive Director


Education: American University in Bulgaria (Bulgaria), BA; University of Chicago Booth School of Business (USA), MBA

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Key risks

The fund invests in equities which may be subject to high fluctuations in value.

The fund focuses intentionally on a rather concentrated portfolio (around 40 stocks), which may entail additional risks and volatility.

The fund provides more indirect exposure to emerging markets compared to other developed market funds. Emerging markets are at an early stage of development which can typically involve risks such as lower market transparency, regulatory hurdles, corporate governance and political and social changes. For these reasons, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. As these UBS funds pursue an active management style, each fund's performance can deviate from that of its reference index. All investments are subject to market fluctuations.

Every fund has specific risks, which can significantly increase under unusual market conditions.

The fund can use derivatives, which may result in additional risks (particularly counterparty risk).

UBS Western Winners Equity Fund

For explanations on financial wordings please refer to the glossary at www.ubs.com/glossary or contact for further information your UBS client advisor. For complete information about the Fund, including the risks of investing, applicable fees and other important information, prospective investors are advised to read the full prospectus.

Your Fondcenter Contacts

UBS AGGlobal Asset ManagementTalacker 24PostfachCH-8098 Zürich

www.ubs.com

Christophe HeftiHead Distribution Insurances & IFAs

+41-44-234 93 [email protected]

Timo H. PaulHead Distribution Banks


Christine AimoneDistribution Banks

+41-44-234 83 66 [email protected]

Robert Pavic UrbasDistribution Banks


Jeremy ChapuisDistribution Banks


Michael WinklerHead Distribution Management


Doron BollagDistribution Management


Diana GutDistribution Management


August BenzCEO Fondcenter


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Disclaimer

For marketing and information purposes by UBS. For professional investors only. This document has been issued by UBS AG, a company registered under the Laws of Switzerland. This document is for distribution only under such circumstances as may be permitted by applicable law. It was written without reference to any specific or future investment objective, financial or tax situation or requirement on the part of a particular individual or group. The document is for information purposes only and is not intended to be construed as a solicitation or an invitation to make an offer, to conclude a contract, or to buy or sell any securities or related financial instruments. The products or securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. The information and opinions contained in this document have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith, but is not guaranteed as being accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in the document. The details and opinions contained in this document are provided by UBS without any guarantee or warranty and are for the recipient's personal use and information purposes only. Past performance of investments (whether simulated or actual) is not necessarily an indicator of future results. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units. Commissions and costs have a negative impact on performance. Should the currency of a financial product or service not match your reference currency, performance may rise or fall due to currency fluctuations. All such information and opinions are subject to change without notice. UBS AG and / or other members of the UBS Group may have a position in and may make a purchase and / or sale of any of the securities or other financial instruments mentioned in this document. This document may not be reproduced, redistributed or republished for any purpose without the written permission of UBS AG. This document contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to our future business development. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. Source for all data and charts (if not indicated otherwise): UBS Global Asset Management.© UBS 2013. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved