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Emerging Markets 360° Rethinking Indexed Emerging Markets Investments

UBS Asset Management UBS Exchange Traded Funds

Zurich, 16th January 2018

For qualified investors only

For marketing purposes

1

Table of contents

• The Big Picture Emerging Markets Investing

• Indexed emerging market equities

• Indexed emerging market debt

• Value Proposition UBS Asset Management

2

0%

10%

20%

30%

40%

50%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

MSCI EM Weight of MSCI ACWI (LHS) EM GDP Share of Global GDP (RHS)

Forecast

Economic vs. market performance

Emerging markets have gained substational relevance

EM in ACWI EM GDP of Global GDP

Source: MSCI, IMF, World Bank, UBS AM. Data as of August 2017.

45%

11%

3

Market performance: Emerging vs. developped

Long-term relative performance shows cyclicality and idiosyncrasies

Source: Barclays, UBS AM. Data as of August 2017.

Equity Fixed Income

Cycle length ~ 5–7 years Cycle length ~ 3–5 years

50

100

150

200

250

300

350

400

Dec-87 Dec-90 Dec-93 Nov-96 Nov-99 Nov-02 Oct-05 Oct-08 Oct-11 Sep-14 Sep-17

Relative Performance

MSCI Emerging Markets USD / MSCI World USD [LHS]

0

50

100

150

200

250

80

90

100

110

120

130

140

150

160

Jan-93 Jul-95 Jan-98 Jun-00 Dec-02 May-05 Nov-07 Apr-10 Oct-12 Apr-15 Sep-17

Relative Performance

Barclays EM USD Aggregate / Barclays Global USD Aggregate [Price Return Index, LHS]

Barclays EM USD Aggregate / Barclays Global USD Aggregate [Coupon Return Index, RHS]

Asian and Russian Crisis

Mexican Crisis

Argentinian and Turkish

Crisis

Financial Crisis

Oil Crisis

4

10.0%

4.9%

0%

2%

4%

6%

8%

10%

MSCI Emerging Markets MSCI World

Index Performance TR Net USD (Dec’00 – Aug‘17)

8.4%

4.6%

0%

2%

4%

6%

8%

10%

Barclays EM USD Aggregate Barclays Global Aggregate

Index Performance TR USD (Dec’00 – Aug‘17)

A strong investment rationale for emerging markets

Long-term relative outperformance

Equity Fixed Income

Source: MSCI, Barclays, UBS AM. Data as of August 2017.

2x

5

Emerging market equity ETF flows

Source: ETFGI, UBS AM. Data as of 30 September 2017. 1) Based on European and US domiciled ETFs

In Europe In US

YTD flows into EM equity are nearly at USD 40.8bn1

+ YTD NNM 8.4bn + YTD NNM 32.4bn

(6'000)

(4'000)

(2'000)

0

2'000

4'000

6'000

8'000

10'000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Cumulated NNM in USD mn

2017 2016 2015 2014 2013

(15'000)

(10'000)

(5'000)

0

5'000

10'000

15'000

20'000

25'000

30'000

35'000



2017 2016 2015 2014 2013

6

Emerging market debt ETF flows

Source: ETFGI, UBS AM. Data as of 30 September 2017. 1) Based on European and US domiciled ETFs

YTD flows into EM fixed income are nearly at USD 15.7bn1

In Europe In US

+ YTD NNM 9.3bn + YTD NNM 6.4bn

(6'000)

(4'000)

(2'000)

0

2'000

4'000

6'000

8'000

10'000



2017 2016 2015 2014 2013

(6'000)

(4'000)

(2'000)

0

2'000

4'000

6'000

8'000

10'000



2017 2016 2015 2014 2013

Indexed emerging market equities

Section 1

8

0%

3%

6%

9%

12%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Weight of BRIC in MSCI EM

China in EM (LHS) Brazil in EM (LHS) Russia in EM (LHS) India in EM (LHS) EM wgt in ACWI (RHS)

10%

1%

EM Weight in MSCI ACWI

Emerging market equity index – nearly 30 years

Source: MSCI, UBS AM. Data as of August 2017.

Growing importance, diversity and coverage

10 countries USD 52bn

24 countries USD 4.9tr

9

Sector dynamics

Growing importance of IT and Financials

Source: MSCI, UBS AM. Data as of September 2017.

0%

20%

40%

60%

80%

100%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sept2017

Information Technology Financials Consumer Discretionary MaterialsEnergy Consumer Staples Industrials Telecommunication ServicesReal Estate Utilities Health Care

• Tencent Hold. • Samsung • Alibaba • Taiwan

Semiconductor. • Baidu

Sector breakdown of MSCI EM

• China Construction Bank.

• ICBC

• Naspers

10

Evaluating emerging market equity indices: MSCI vs. FTSE

Source: MSCI, UBS AM. Data as of August 2017

They are not the same

Market Characteristics Market Accessibility Economic Development

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

1 year 2 years 3 years 5 years 10 years 15 years

MSCI EM vs FTSE Emerging Index for diffrent investment horizons (cumulative outperformance) Based on TR Net in USD, Dec’01 – Aug’17

Superiority of MSCI

Superiority of FTSE

11

4% 5% 6% 7% 8% 9%

MSCI EMSmall Cap

MSCI EM

MSCI WORLDSmall Cap

MSCI WORLD

The index matters: MSCI EM vs. MSCI EM IMI

Source: MSCI, UBS AM. Data as of July 2017.

Small cap premium has been negative in emerging markets

MSCI EM vs MSCI EM IMI (Daily Price Index Data, May’94 – Aug‘17)

Small Cap Premium (Daily Price Index Data, May’94 – Aug‘17)

+1.93%

-0.23%

80

85

90

95

100

105

110

115

120

May-94 Apr-98 Mar-02 Jan-06 Dec-09 Nov-13 Sep-17

MSCI EM / MSCI EM IMI relative performance

MSCI EM has average outperformance of 49 bps since May' 94

12

Sustainable investing in emerging markets

The ESG profile of emerging market companies is not as “green” as of developed market companies

Source: Bloomberg, MSCI, UBS AM. Data as of September 2017.

Developed Emerging

0%

5%

10%

15%

20%

25%

30%

AAA AA A BBB BB B CCC

MSCI World ESG Rating Distribution


0%

5%

10%

15%

20%

25%

30%


MSCI EM ESG Rating Distribution


1) exclusion (tobacco, alcohol etc.) 2) best-in-class ESG-rated companies 3) minimum ESG controversies

13

2.7%

1.3%

4.6%

4.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

MSCI EmeringMarkets

SRI*

MSCI EmeringMarkets

MSCI WorldSRI**

MSCI World

Relative performance (TR Net USD)

Sustainable investing is relevant in emerging markets

Inclusion of best-in-class ESG companies results in substantial country re-allocation

ESG Value Added Country Breakdown

* Based on MSCI Emerging Markets SRI 5% Issuer Capped Net Return Index in USD (full history since May‘11 to Sep‘17) ** Based on MSCI World SRI 5% Issuer Capped Net Return Index in USD (full history since Sep ‘07 to Sep‘17) Source: MSCI, UBS AM. Data as of September 2017. Note: Carbon reduction measures are based on carbon footprint (tons CO2e / $m Invested) sourced from MSCI ESG.

7.6% 6.2%

2.8% 2.8%

2.2%

-1.9% -24.8%

-25% -20% -15% -10% -5% 0% 5% 10%

IndiaSouth AfricaSouth Korea

BrazilMalaysiaThailand

IndonesiaTaiwan

ChileMexico

PhilippinesCzech Rep

HungaryUAE

PolandPakistan

EgyptColombia

QatarGreece

PeruTurkeyRussiaChina

MSCI EM SRI – MSCI EM

-37%

Reduction of carbon emission

-42%

Reduction of carbon emission

14

Indexed emerging market equities – Key takeaways

Source: UBS Asset Management. AuM as of 28 December 2017.

Fund name Fee AuM

(CHFm)

NAV

ccy

Replication Distribution ISIN Bloomberg

UBS ETF (LU) MSCI Emerging Markets UCITS ETF 0.45% 1'187 USD Physical Yes LU0480132876 EMMUSA SW

UBS ETF (IE) MSCI Emerging Markets SF UCITS ETF 0.26% 2'837 USD Synthetic No IE00B3Z3FS74 EGUSAS SW

UBS ETF (LU) MSCI Emerging Markets Socially Responsible UCITS ETF 0.53% 391 USD Physical Yes LU1048313891 MSRUSA SW

UBS ETF (LU) MSCI World Socially Responsible UCITS ETF 0.38% 547 USD Physical Yes LU0629459743 WSRUSA SW

UBS ETF (IE) MSCI ACWI hedged CHF SF UCITS ETF 0.31% 4'878 CHF Synthetic No IE00BYM11L64 ACWIS SW

The role of the emerging markets has substantially increased over the last 30 years, and currently Emerging Markets represent more than 10% of the entire equity exposure.

Emerging markets equity correlates less with DM markets and can enhance portfolio return.

Broad-based index solution allow to access emerging equities efficiently, but selecting the right index is key.

Small cap premium has been negative in emerging markets.

Sustainability investing in emerging markets has created additional return for investors.

Indexed emerging market debt

Section 2

16

Emerging market debt landscape

0

500

1'000

1'500

2'000

2'500

3'000

3'500

4'000

2003 2005 2007 2009 2011 2013 2015 2017-Sep

Market Capitalisation (in USD bn)

EM Local Government EM USD Sovereign EM USD Corporates

Emerging market debt has grown in significance and become substantial segment of indexed opportunities*

~4 trillion USD

~55% of US Treasury

US Treasury

7.3

USD Corp 4.8

EM Local Govt 2.0

EM USD Agg 1.9

US High Yield 1.3

Amount Outstanding (in USD tr)*

Source: Barclays Point, UBS AM. Data as of September 2017. * Based on Barclays and JP Morgan indices.

17

0%

1%

2%

3%

4%

5%

6%

7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

China Mexico

Brazil Argentina

Indonesia Russia

Turkey Venezuela

United Arab Emirates S.Korea

EM debt USD relative to Global Treasury

Emerging market debt landscape

Source: Barclays Point, Bloomberg Barclays EM USD Sovereign + Quasi-Sovereign, UBS AM. Data as of September 2017.

31 countries

USD 277bn

73 countries

USD 1.4tn

Growing importance, diversity and coverage

18

A strong investment rationale for emerging markets debt

Source: Barclays Live, UBS AM. Data as of September 2017.

Emerging market bonds outperform other segments

Yields Return and Risk

0%

5%

10%

15%

20%

25%

Jan-00 Mar-02 May-04 Jul-06 Sep-08 Nov-10 Jan-13 Mar-15 May-17

Yield-to-Worst (monthly data Jan’00 – Sep’17)

Barclays EM USD Barclays US TreasuryBarclays US HY Barclays USD Corporate

0%

2%

4%

6%

8%

10%

Barclays EM USD Barclays US HY Barclays USDCorporate

Barclays USTreasury

Annualized return and volatility (monthly data Jan’00 – Sep’17)

Return Volatility

19

Return characteristics and liquidity

Strong contribution from sovereigns, overall emerging market debt offers a solid liquidity

Source: Barclays POINT, UBS AM. Data as of September 2017.

7.2%

7.4%

6.9%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

EM USD Aggregate EM USD Sovereign EM USD Corporate

Annualised Returns (10Y period) (in USD, monthly data Sep’07 – Sep’17)

0

1

2

3

4

5

6

7

Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17

Liquidity Cost Score (10Y period) (in %, monthly data Sep'07 - Sep'17)

EM USD Aggregate EM USD SovereignEM USD Corporate US HY

∆ 𝒊𝒏 𝑳𝑪𝑺 up to 200 bps

20

Emerging market debt by maturity bucket

Short-end positioning pays off

0

0.05

0.1

0.15

0.2

0.25

EM USD Sovereign EM USD Corporate EM USD Sovereign EM USD Corporate EM USD Sovereign EM USD Corporate

Maturity[1,5) Maturity[5,10) Maturity[10,)

Risk-Adjusted Excess Return over Duration-Matched Treasuries (monthly data in USD, Sep '07-Sep '17)

Source: Barclays POINT, UBS AM. Data as of September 2017.

Less return per unit of risk

21

0%

2%

4%

6%

8%

10%

12%

14%

Barclays Emerging Markets USD Sovereign + Agency 3% Country Cap Barclays Emerging Markets USD Sovereign + Quasi-Sovereign

18%

16%

Diversifying issuer risk with a smarter index

Increased diversification with a 3%-single issuer cap


EM countries with more outstanding debt

EM countries with less outstanding debt

22

7.5%

7.7%

7.9%

8.1%

8.3%

8.5%

8.7%

Barlclays EM USD Sov +Quasi Sov

Uncapped


10% Capped


5% Capped

J.P. Morgan EMBI Global

Uncapped

J.P. Morgan EMBI GlobalDiversified

10% Capped

J.P. Morgan EMBI GlobalCore

Capped at 2x AverageCountry Weight

The impact of capping on performance: long term perspective (monthly data Jan’04 – Sep’17)

Impact of increased diversification


∆= 40 bps

Regardless of indexation, issuer capping is effective and adds value

∆= 20 bps

Barclays JP Morgan

23

Emerging market debt indices

Source: Bloomberg. Barclays Live, UBS AM. Data as of August 2017.

Barclays Emerging Market USD Sovereigns 3% Capped with the strongest performance

5.0%

5.7% 5.7%

5.0%

6.8%

2%

3%

4%

5%

6%

7%

8%

Barclays EM USD Sovereign+ Quasi Sovereign 3%Capped [BEMUTRUU]

JP Morgan EMBI GlobalCore [JPEICORE]

Citi EM USD Global Bond[SBGIMS]

Barclays EM USD Sovereign+ Quasi Sovereign

[BESQTRUU]

iBoxx USD Liquid EMSovereigns [IBOXUSLT]

Index LiveTrack Performance, Annualized Returns and Volatility (TR USD monthly data Apr'13-Sep'17)

Highest return & lowest volatility

24

-5%

-3%

-1%

1%

3%

5%

Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17

Barclays EM USD Agg – TR in USD

MTD Price Return MTD Coupon Return MTD Currency Return

To hedge or not to hedge the currency

In USD

Effects of currency fluctuations can easily outweigh coupon and price returns

Source: Barclays Point, UBS AM. Data as of September 2017.

-5%

-3%

-1%

1%

3%

5%

Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17

Barclays EM USD Agg – TR in CHF unhedged

MTD Price Return MTD Coupon Return MTD Currency Return

Unhedged to CHF

25

6.0%

8.0%

10.0%

12.0%

In USD In CHF unhedged In CHF hedged to CHF

Volatility (Jan’00 – Sept’17)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

In USD In CHF unhedged In CHF hedged to CHF

Return (Jan’00 – Sept’17)

The role of the exchange rate

No compensation for taking on the currency rate risk

Source: Barclays Point, UBS AM. Data as of September 2017.

Yields (Jan'00 – Sep'17) More return per unit of risk

0%

4%

8%

12%

16%

Jan-00 Mar-02 Jun-04 Aug-06 Nov-08 Feb-11 Apr-13 Jul-15 Sep-17

Barclays EM USD, in USD unhedged

Barclays EM USD, in CHF hedged

26

70

75

80

85

90

95

100

105

110

50

70

90

110

130

150

170

190

210

Dec-07 Sep-08 Jun-09 Mar-10 Dec-10 Sep-11 Jun-12 Mar-13 Dec-13 Sep-14 Jun-15 Mar-16 Dec-16 Sep-17

Index Performance

U.S. Dollar Index [RHS] JP Morgan EMBI Global Core JP Morgan EMLC Global Core

Emerging markt debt local currency

USD appreciation resulted in significant underperformance of local debt

Source: Bloomberg, JP Morgan, UBS AM. Data as of September 2017.

27

Indexed emerging market debt - Key takeaways

The role of Emerging Market debt has substantially increased over the last 30 years, and representing 7% of the entire fixed income investible indexed exposure

Emerging market debt has shown superior risk-adjusted performance when compared other fixed income segments

Issuer diversification plays an important role as it enhances returns

Positioning at the shorter end of the curve provides better risk/return characteristics and higher liquidity

Currency hedging is key, as effects of currency fluctuations can easily outweight coupon and price returns

Fund name Fee AuM

(CHFm)

NAV

ccy

Replication Distribution ISIN Bloomberg

UBS ETF (LU) Barclays USD Emerging Markets Sovereign UCITS ETF 0.42%

245

USD Physical Yes LU1324516050 SBEM SW

UBS ETF (LU) Barclays USD Emerging Markets Sovereign h. CHF UCITS ETF 0.47% USD Physical No LU1324516720 SBEMS SW

UBS ETF (LU) Barclays USD Emerging Markets Sovereign h. EUR UCITS ETF 0.47% USD Physical No LU1324516308 SBEME SW

UBS ETF (LU) Barclays USD Emerging Markets Sovereign h. GBP UCITS ETF 0.47% USD Physical Yes LU1324516480 SBEMH SW

UBS ETF (LU) J.P. Morgan USD EM Diversified Bond 1-5 UCITS ETF 0.42% 50 USD Physical Yes LU1645385839 SHEMB SW

Source: UBS Asset Management. AuM as of 28 December 2017.

More to come soon: JP Morgan EM Local Currency Multifactor Enhanced

Concluding Remarks

Section 3

29

We work with our clients to understand their needs, objective and constraints

30+ years of passive experience incl. segregated mandates, pooled funds, ETFs

CHF 270bn of passive assets and CHF 50bn of assets in UBS ETFs

Ongoing developments within indexed solutions across asset classes

Market leading in:

Currency hedged framework

Alternative beta

Socially responsible investing

Enhanced commodity investing

Dedicated research teams (indexation, portfolio management, investibility research etc.)

Established relationships with leading index providers, active partner in research feedback loops

Summary

UBS Asset Management

Source: UBS Asset Management. Data as of December 2017.

30

Innovative Core Fixed Income Innovative product offering on IG Corporate, Emerging Market Bonds and Inflation Linked

Product Quality: leadership areas and specialties

Core Equities Excellent replication quality and tracking difference thanks to competitive pricing and excellent portfolio management techniques.

Socially Responsible Investing

Factors Beta

Currency Hedged Market leader of currency hedged ETFs thanks to its range of products and extremely efficient share class system.

Commodities

Specialties Innovative and efficient special product areas: commodities indices, social responsible investments, smart beta and factor ETFs.

Source: UBS Asset Management. Data as of December 2017.

31

Contact information

Dominik Blunschi UBS AG Asset Management Director Passive & ETF Specialist Sales Switzerland & Liechtenstein Stockerstrasse 64 8002 Zurich, Switzerland Tel. +41-44-234 88 06 [email protected]

Raimund Müller, CIIA UBS AG Asset Management Executive Director Head Passive & ETF Specialist Sales Switzerland & Liechtenstein Stockerstrasse 64 8002 Zurich, Switzerland Tel. +41-44-234 39 81 Mobile +41-79-588 21 53 [email protected]

Adrian Steiner, CAIA UBS AG Asset Management Associate Director Passive & ETF Specialist Sales Switzerland & Liechtenstein Stockerstrasse 64 8002 Zurich, Switzerland Tel. +41-44-234 55 39 [email protected]

Giovanna Cilia UBS AG Asset Management Director Passive & ETF Specialist Sales Switzerland & Liechtenstein Stockerstrasse 64 8002 Zurich, Switzerland Tel. +41-44-234 53 68 [email protected]

32

Risk information

UBS ETFs investing in equities UBS Exchange Traded Funds invest in equities and may therefore be subject to high fluctuations in value. For this reason, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. All investments are subject to market fluctuations. Every fund has specific risks, which can significantly increase under unusual market conditions. The fund’s assets are passively managed. As a result, the net asset value of the fund’s assets is directly dependent on the performance of the underlying equities. Losses that could be avoided via active management will not be offset. UBS ETFs investing in Real Estate Funds The funds invest in real estate funds under Swiss law that are denominated in CHF and invest exclusively in Swiss properties. The price of the underlying fund units is not determined by estimates of market value but by investor supply and demand. All investments are subject to market fluctuations. Every fund has specific risks, which may increase considerably in unusual market conditions. Please contact your client advisor if you wish to receive further information on the investment risks associated with this product. UBS ETFs investing in Metals The UBS Exchange Traded Fund investing in metals may be subject to considerable fluctuations in value. Investors therefore require an investment horizon of at least five years and corresponding risk tolerance and capacity. All investments are subject to market fluctuations. All funds have specific risks, which may significantly increase under unusual market conditions. The fund’s assets are passively managed. As a result, the net asset value of the fund’s assets is directly dependent on the performance of the underlying equities. Losses that could be avoided via active management will not be offset. UBS ETFs investing in Oil and Commodities The Fund delivers the returns of a broadly diversified commodity index and may therefore be subject to high fluctuations in value. For this reason, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. The returns payable on the Fund are dependant on payments received by the Fund from the Swap Counterparty under the terms of the Relevant Swap and, therefore, are subject to the credit risk of the Swap Counterparty. In the event that the Swap Counterparty defaults under the terms of the Relevant Swap, the Fund may suffer a loss. Assets are passively managed meaning losses that could be avoided via active management will not be offset. The net asset value of the Fund’s assets are materially dependent on the performance of the underlying investments. In case the currency of the product is different from your reference currency, the return may

increase or decrease as a result of currency fluctuations. All investments are subject to market fluctuations. Every fund has specific risks, which can significantly increase under unusual market conditions. UBS ETFs investing in HFR The Fund delivers the returns of a broadly diversified hedge fund index and may therefore be subject to high fluctuations in value. For this reason, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. The returns payable on the Fund are dependent on payments received by the Fund from the Swap Counterparty under the terms of the Relevant Swap and, therefore, are subject to the credit risk of the Swap Counterparty. In the event that the Swap Counterparty defaults under the terms of the Relevant Swap, the Fund may suffer a loss. Assets are passively managed meaning losses that could be avoided via active management will not be offset. The net asset value of the Fund’s assets are directly dependent on the performance of the underlying investments. In case the currency of the product is different from your reference currency, the return may increase or decrease as a result of currency fluctuations. UBS ETFs investing in Fixed Income This UBS Exchange Traded Fund invests in government bonds of a single country and may therefore be subject to fluctuations in value. For this reason, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. All investments are subject to market fluctuations. Every fund has specific risks, which can significantly increase under unusual market conditions. As a result, the net asset value of the fund's assets is directly dependent on the performance of the underlying index. Losses that could be avoided via active management will not be offset. UBS ETFs investing in Multi Asset Portfolios The Fund is highly dynamic and may exhibit above-average potential growth and investment performance, depending on the economic environment. For this reason, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. The Fund is exposed to the investment risk arising from the Reference Strategy underlying the Swaps. In the event that the swap counterparty defaults under the terms of the relevant swap, the Fund may suffer a loss. The Fund’s assets are passively managed. As a result, the net asset value of the Fund’s assets is materially dependent on the performance of the underlying investments. Losses that could be avoided via active management will not be offset. The Reference Strategy is a rules based Algorithm designed to target consistent returns but may not be effective in delivering such returns.

33

Disclaimer

For marketing and information purposes by UBS. For qualified investors only. 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. 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. UBS funds under Luxembourg and Irish law. The MSCI indexes are the exclusive property of MSCI INC. (“MSCI”). MSCI and the MSCI index names are service mark(s) of MSCI or its affiliates and have been licensed for use for certain purposes by UBS AG (“UBS”). The financial securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such financial securities. The full prospectus of the UBS ETF Sicav contains a more detailed description of the limited relationship MSCI has with UBS and any related financial securities. 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 service mark 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 person or entity claim any affiliation with MSCI without the prior written permission of MSCI. The “Barclays Indices” are trademarks of Barclays Capital or its affiliates and have been licensed for use in connection with UBS Exchange Traded Funds. 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