Benvenuto! UBS Investment Day a Lugano

Transcription

1 Benvenuto! UBS Investment Day a Lugano 4 settembre 2013

2 Investment Day- agenda Dr. José Antonio Blanco, Global Investment Solutions Outlook Daniel Hammar, Equity Equity Dr. Daniel Brüllmann, Global Real Estate Real Estate Market Switzerland What s next? Conclusion

3 Outlook José Antonio Blanco Regional CIO, EMEA

4 Evoluzione recente dei mercati Perfomance sostanzialmente positiva dei mercati azionari dall inizio d anno a fine Luglio 2013 Principali categorie d investimento (dal 2011) Azioni ed obbligazioni Obbligazioni governative (JPM)* Rendimento totale in moneta locale 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% EMMA (in USD) ITA ESP GER FRA UK WORLD CH USA JPN Dec- 10 Mar- 11 Jun- 11 Sep- 11 Dec- 11 Mar- 12 SPI MSCI World AC ex CH (in CHF) Jun- 12 Sep- 12 Dec- 12 Mar- 13 Jun- 13 SBI (AAA-BBB) Global Real Estate (in CHF) -10.0% -16% -8% 0% 8% 16% 24% 32% 40% Mercati azionari (MSCI) SWX Immobilienfonds Dati quotidiani per 6 Aug-13 Fonte: Datastream *Eccezione CH: SBI Gesamt AAA-BBB

5 I rischi che al momento ci preoccupano maggiormente Crescita Siamo finalmente in fase di ripresa economica globale? Debito pubblico Sarà possibile ridurre il debito in modo significativo senza metter a rischio la crescita? inflazione Saranno le banche centrali in grado di normalizzare la politica monetaria ed evitare un esplosione dell inflazione?

6 Crescita: Forte in Svizzera, debole nell Europa del sud PIL reale (Indice 1Q05 = 100) Svizzera Germania USA Francia Spagna Italia Portogallo 90 Grecia 85 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q Germania Spagna Italia USA Portogallo Grecia Svizzera Francia Fonte: Reuters EcoWin, UBS CIO Research

7 Sentiment dei consumatori e disoccupazione Disoccupazione: Ulteriori miglioramenti negli USA Sentiment dei consumatori nell UME migliora e lascia i minimi Q Q Q Q Q Q Q Switzerland EU 13 US Germany Japan Trimestrale, Q Fonte: Datastream, UBS Global AM -30 Aug-10 Aug-11 Aug-12 Swiss consumer conf. EMU consumer confidence German consumer confidence UK consumer confidence US consumer confidence (RH scale) Mensile, 15 Jul-13 0

8 Crescita ed inflazione attese Previsioni di consenso per fine luglio, 2013 Crescita PIL (reale) Inflazione Jul 12 Aug 12 Sep 12 Okt 12 Nov 12 Dez 12 Jan 13 Feb 13 Mrz 13 Apr 13 Mai 13 Jun 13 Jul 13 Jul 12 Aug 12 Sep 12 Okt 12 Nov 12 Dez 12 Jan 13 Feb 13 Mrz 13 Apr 13 Mai 13 Jun 13 Jul 13 CH '14 EZ '14 US '14 UK '14 JP '14 CH '13 EZ '13 US '13 UK '13 JP '13 Fonte: Datastream

9 Debito pubblico a livelli preoccupanti Debito governativo lordo in % del PIL 225% 200% 175% 150% 125% 100% 75% 50% 25% 0% Japan Greece Italy US UK France Spain Germany Switzerland Fonte: Reuters EcoWin, IMF, UBS CIO Research (fine 2012)

10 Unione Monetaria Europea: Core e periferia 2 Core Switzerland 1 Finland Luxembourg Deutschland Netherlands Deficit indicator 0-1 Greece Ireland Italy Portugal Österreich Spain France UK Belgium -2 Fonte: Reuters Ecowin, UBS CIO Research (Stand: 2012) Debt level Indicator Fonte: Reuters Ecowin, IWF, OECD, UBS WMR. Il Debt Level viene stimato sulla base della media della percentuale del debito standardizzato e il patrimonio netto estero in % del PIL. Il Deficit Indicator viene stimato sulla base della media della percentuale del debito standardizzato e delle partite correnti in % del PIL

11 La politica monetaria della BCE è troppo accomodante per la Germania Tassi di cambio reali ponderati per il commercio internazionale (media = 100) Index Germania Svizzera Fonte: Reuters EcoWin, UBS CIO Research (as of )

12 Inflazione Inflazione annuale in % Percent USA Eurozone Japan China Schweiz Fonte: Reuters EcoWin, UBS CIO Research (Stand: )

13 Riduzione del debito ed inflazione Tre modi per ridurre il debito Default (deflazionario) Inflazione Austerità (deflazionario) Idealmente: Combinazione dei tre metodi ("beautiful deleveraging") Ritardi, interazioni complesse, mancanza di esperienza storica Rischio importante Rischio di deflazione limitato dalla politica monetaria molto accomodante Potenziale inflazionario importante sul medio termine

14 Enormi iniezioni di liquidità Fino a quando? Bilanci delle banche centrali in % del PIL (Indice, = 100) ? Svizzera USA GB Euro Zona Giappone Fonte: Reuters EcoWin, UBS CIO Research (Stand: )

15 Enormi iniezioni di liquidità Inflazione? Una politica monetaria molto accomodante non basta Forte crescita della massa monetaria Aumento del consumo Supply shock Forte utilizzo del potenziale Inflazione Fonte: UBS

16 Valutazione fondamentale di azioni ed obbligazioni Deviazioni in % dal fair value basato su ValMod; aggregati globali*, Aggiornato al 1. August % Azioni (asse sulla destra) 10.5% 8.0% 5.5% 3.0% 0.5% -2.0% -4.5% -7.0% -9.5% Obbl. governative (asse sulla sinistra) 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% -12.0% -60% Sep-99 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Aug-13 I nostri modelli indicano una sovraponderazione dei mercati azionari, di ca. il 13.5% e delle obbligazioni governative di ca. il 9.5%. * Azioni: MSCI World in moneta locale; Obbligazioni governative: Citigroup World Government Bond Index in moneta locale Fonte: UBS Global AM

17 Mercati azionari: La crescita degli utili sembra rallentare USA Europe x UK Emerging Markets Fonte: IBES; Bloomberg, UBS Global Asset Management

18 Obbligazioni governative: fair value e rendimenti attuali Rendimenti di titoli governativi con 10 anni alla scadenza /08/2013 Fair 07/08/ US CAN AUS JPN EUR UK CH Fonte: Datastream, UBS Global AM Queste previsioni rappresentano le nostre attese attuali ma vari rischi, insicurezze ed altri fattori importanti possono portare a differenze significative tra valori attesi e valori realizzati.

19 Valutazione fondamentale Rendimento atteso su 3 anni, rischio di cambio coperto in CHF; aggiornato al 1. Agosto 2013 Azioni Obbligazioni governative (1) (2) (3) (5) -2.0 US CH JAP UK EWU (4) -3.5 JAP UK CH US EWU Fonte: UBS Global AM Queste previsioni rappresentano le nostre attese attuali ma vari rischi, insicurezze ed altri fattori importanti possono portare a differenze significative tra valori attesi e valori realizzati. Rendimenti necessari Rendimenti attesi

20 Correlazione tra azioni ed obbligazioni Correlazione tra indici total return, periodo mobile di 2 anni Germania USA Svizzera Fonte: Datastream, UBS Global AM, dati giornalieri, per 07 Aug-13

21 Opinioni attuali Asset Allocation e monete Attraente Neutrale US Large Non attraente Obbligazioni Azioni Global ex US Japan Emerging High Yield IG Corporates Emerging US Small Sovereign USD MXN CAD NZD Monete JPY EM Asia NOK SEK CHF AUD EUR Per Fonte: UBS Global Asset Management.

22 Sommario Macro Azioni Ripresa dei mercati azionari dallo shock dei tassi di Maggio/Giugno grazie agli interventi verbali delle banche centrali Le speculazioni riguardanti il tapering continueranno a creare volatilità nei mercati Dati economici sorprendentemente positivi dalla zona Euro suggeriscono che la recessione si stia avviando verso la fine. Intanto, l economia Statunitense continua a rafforzarsi, mentre che le economie emergenti mostrano segni di debolezza (relativa) Nonostante le valutazioni non più molto interessanti e partendo dall ipotesi che l economia globale continuerà a crescere in maniera moderata, ci attendiamo che i mercati azionari producano un rendimento migliore rispetto alle obbligazioni governative o con rating molto alti. Preferiamo l Europa ed il Giappone agli USA Obbli. Asset Allocation Nonostante l aumento dei tassi, i titoli governativi ci sembrano ancora cari da un punto di vista fondamentale. Siamo quindi sottoponderati, anche se manteniamo un esposizione per controllare il rischio di una ricaduta in recessione. Ai titoli governativi sicuri, preferiamo corporates e le obbligazioni di Italia e Spagna Le nostre posizioni tattiche più importanti: Sottoponderazione in obbligazioni governative con un piccolo sovrappeso in BTP, Bonos e corporates. Durazione corta Piccolo sovrappeso in azioni, gestito in modo dinamico Sovraponderazioni in USD e EUR, sottoponderazioni in CHF e JPY

23 Q&A Outlook

24 UBS Investment Day 2013 Equity Daniel Hammar, Equity Strategist UBS Global Asset Management

25 SECTION 1 UBS Global AM Equities: Who are we?

26 Global AM Equity Group Experienced Teams 213 equity investment professionals worldwide Independent Investment Teams Active Management Global Equities US Equities European Equities APAC & Emerging Markets Equities Growth Investors Index and Smart Beta Structured Beta & Indexing Applied Research Group Distinct, disciplined investment processes Each team and is compensated based styles on its performance success Note: Data as at end of June 2013 excludes equity assets which are managed by multi-asset Source: UBS Global Asset Management manage CHF 181 billion in equities!

27 SECTION 2 Recommendations from Spring 2013

28 Performance - UBS Swiss High Dividend Performance indexed in % (share class P; basis CHF, net of fees)¹ % % % UBS (CH) Equity Fund - Swiss High Dividend P SPI (TR) DJ SWX Select Dividend 20 Index in % YTD 2013 SI³ Fund (CHF) 16.44% 17.80% SPI (TR) 17.61% 22.94% Value added -1.17% -5.14% Fund / Reference Index statistics Swiss High Dividend SPI (TR) Dividend Yield 4.31% 2.99% Beta Standard Deviation² 11.70% 12.38% Source: UBS Global Asset Management, Data as at end of July 2013 Portfolio characteristics are shown net of fees. ¹ 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 commissions and costs charged when subscribing to and redeeming units. ²For periods greater than 1 year, the annualized standard deviation is based on monthly logarithmic returns. ³ Inception Date:

29 Performance - UBS European Opportunity / Unconstrained UBS European Opportunity EUR - Period Ending: 31-Jul-2013 Net of fees in % YTD 1 year 3 years¹ 5 years¹ SI¹ Composite (EUR) MSCI Europe Value added² Ranking³ N/A ¹ Periods greater than 1 year are annualized. Inception Date: 31-May-2004 Rating as of 31-Jul-2013 UBS European Opportunity Unconstrained EUR - Period Ending: 31-Jul-2013 Net of fees in % YTD 1 year 3 years¹ 5 years¹ SI¹ Composite (EUR) MSCI Europe Value added² Ranking³ 1 1 N/A N/A N/A Rating as of 31-Jul-2013 Source: UBS Global Asset Management. Portfolio characteristics are shown net of fees. Past performance is not a reliable indicator of future results. ¹ Periods greater than 1 year are annualized. Inception Date: 31-May-2007 ² Value added is the arithmetic difference between the composite return and the benchmark return. ³ Lipper Quartile Rank

30 SECTION 3 Equity Markets

31 Equity markets remain attractive Positive global growth, Europe has stabilised but continues to lag behind the US Global monetary policy remains accommodative, despite indications of gradual tapering by the Fed Earnings growth looks better for 2013 Relative valuations attractive, especially versus bonds Source: UBS Global Asset Management. Data as at end of July 2013.

32 SECTION 4 Investment Recommendations

33 SECTION 4.A Investment Recommendations UBS (Lux) Equity SICAV Western Winners

34 Emerging markets as a driving force of global growth Key trends to drive long-term growth: Favourable demographics Rising income levels Increased urbanisation Growing consumption in Emerging Markets

35 Western Winners: The best of both worlds Invest in developed market companies with a strong EM footprint and benefit from the advantages of developed markets: Profit from high growth prospects for Emerging Markets Comfort through reduced expected volatility Efficiency through lower trading costs Quality through superior corporate governance Emerging markets growth with the comfort, efficiency and quality of mature markets

36 Key characteristics - UBS Western Winners Actively managed equity fund Invest in around 40 companies from developed markets Portfolio inclusion criteria Profit from a high share of sales in emerging markets: currently 44% in the fund Attractive fundamental valuation Sales in Emerging Markets 45% 30% 15% 0% UBS Western Winners MSCI World Source: UBS Global Asset Management. Data as at end of July 2013, author s calculations

37 Experienced investment team Portfolio Managers proven track record in stock picking Broad, global market expertise based on 20 years of investment experience (average) Nick Irish PM Charles Burbeck PM Research getting to know companies through deep analysis 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 team consumer sectors 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)

38 Performance - UBS Western Winners Performance indexed in % (share class P-acc; basis USD, net of fees)¹ % % % % 85 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.) Source: UBS Global Asset Management, Data as at end of July 2013 Portfolio characteristics are shown net of fees. ¹ 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 commissions and costs charged when subscribing to and redeeming units.

39 Portfolio structure - UBS Western Winners Source: UBS Global Asset Management, Data as at end of July 2013 The fund is actively managed, thus allocations can be changed any time at UBS s discretion. Current portfolio structures may be found at This information should not be considered a recommendation to purchase or sell any particular security.

40 SECTION 4.B Investment Recommendations UBS (Lux) Equity SICAV US Total Yield (USD)

41 Total yield is more attractive than dividend yield alone Historically this approach has delivered strong returns Total Yield in the Portfolio Best quintile minus worst quintile 5% Total yield 5.7% 4.3% Share buyback yield Annualized return 4% 3% 2% 1% 0% 1.4% Dividend yield -1% Total Yield Dividend Yield Source: UBS Global Asset Management. Data as at end of July For illustrative purposes only. Note: total yield can apply at a single stock level, as well as on an aggregate portfolio level. Source: Empirical Research Partners. One year holding periods 1973 through May Total yield = (cash dividends + net cash used to repurchase shares) / market cap.

42 How do we capture the total yield? Seeking the optimal combination of yield, quality and diversification Consideration High total yields High quality Highly diversified Description The strategy aims to capture both dividends and share buybacks Focus on quality factors in order to exclude low quality companies Diversified across sectors and with 100 equally weighted stocks Total Yield 45% High quality criteria 55% Stable and Sustainable Total Yield: Balance Sheet & Earnings Quality Low Payout Ratio, High CF Coverage Lower stock price volatility High dividend payment stability

43 Distinguishing characteristics of the investment team Investment team Experienced team with a solid history of working together Research and investment process is transparent Rigorous and disciplined portfolio construction and risk management Jeremy Raccio, Lead Portfolio Manager 12 years investment experience Patrick Zimmermann, Deputy Portfolio Manager 15 years investment experience Members of a global team of 15 investment professionals Supported by global resources of UBS Global Asset Management Local equity trading Currency specialists Independent Risk Management

44 Performance - UBS US Total Yield Performance indexed in % (share class P-acc; basis USD, net of fees)¹ % % UBS (Lux) Equity SICAV - US Total Yield (USD) P-acc MSCI USA (net div. reinv.) Source: UBS Global Asset Management, Data as at end of July 2013 Portfolio characteristics are shown net of fees. ¹ 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 commissions and costs charged when subscribing to and redeeming units.

45 Portfolio structure - UBS US Total Yield Sector Weight (%) Deviation from index (%) Health Care Market cap break-down % Information Technology 18.1 Consumer Discretionary Mid Cap 14% Financials Industrials Consumer Staples Energy Telecoms Materials Others Large Cap 86% Source: UBS Global Asset Management, Data as at end of July 2013 The fund is actively managed, thus allocations can be changed any time at UBS s discretion. Current portfolio structures may be found at This information should not be considered a recommendation to purchase or sell any particular security.

46 Portfolio positioning UBS US Total Yield Yahoo Share price is up over 30% since inception. Net buybacks increased 8% with the release of the company s latest financial results. The stock was initially included in the portfolio due to very good quality scores, including no long term debt and strong profitability. It s share buyback program gives a competitive buyback yield. 10% 8% 6% 4% 2% 0% Yahoo Total Yield Guess? Inc Share price is up over 20% since inception. Net buybacks increased 16% with the release of the company s latest financial results. This contributed to moving the share price higher. Initially we bought the stock due to its attractive total yield as well as low leverage on the balance sheet. The company also has a good profitability. 0% 2% 4% 6% 8% 10% Guess? Inc Total Yield Walmart Share price is up almost 15% since inception. Net buybacks increased 36% and dividends increased 1.3% with the release of the company s financial results. This contributed to moving the share price higher. Initially we bought the stock due to its strong profitability as well as its low price volatility. 5% 4% 3% 2% 1% 0% Walmart Total Yield Source: UBS Global Asset Management, Data as at end of July 2013 The fund is actively managed, thus allocations can be changed any time at UBS s discretion. Current portfolio structures may be found at This information should not be considered a recommendation to purchase or sell any particular security. Dividend Yield Buyback Yield

47 SECTION 4.C Investment Recommendations UBS (Lux) Equity Fund - China Opportunity (USD)

48 China is a global market force Sustainable growth: structural reform is beneficial to long-term sustainable growth Strong currency: internationalization of RMB Sound financial system: backed by sizeable reserves, high saving rates and regulated financial markets Secular opportunities: underpenetrated domestic consumption, health care, etc.

49 Global rebalancing: China s domestic consumption China contributed more to global consumption growth in 2011 than the traditional frontrunner in this category, the United States. IMF Sino-Spending, 2012 Consumption, although still low, made a bigger contribution than investment to China s growth in the first quarter [of 2013]. The Economist Speed isn t everything, 2013 Source: Barnett, S., Myrvoda, A. & Nabar, M. (2012). Sino-Spending. Retrieved from

50 Why invest in the UBS China Opportunity Fund? Local Expertise via UBS SDIC JV in China High Conviction Stocks Pure China Focus PM with Proven Track Record Unconstrained by Benchmark Award Winning Fund Local Expertise via UBS Manager SDIC JV in UBS China Greater China Fund UBS Equity China Opportunity China Opportunity Fund an aggregation of success factors.

51 Attractive Valuation Past 10-Year price-to-earnings ratio (P/E) of MSCI China Index s.d. 15 Historical 10-Year Avg P/E s.d. Attractive Level 0 1/1/2003 1/1/2004 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 Past performance is not indicative of future results. Source: Bloomberg, data from 1/1/2003 7/31//2013

52 Small/Mid Caps bias with a high exposure to domestic demand Market Capitalization Breakdown 31-Jul-2013 China Opportunity Fund Small/Mid Cap bias: ~ 60% Outperformance of Small & Mid Caps over past 7-months (31-Jul-2013) 45% 35% 25% 26% 43% 22% 35% 34% 26% 15% 5% 7% 1% 5% 0% -5% -15% -7.9% -10.6% Mega cap Large cap Mid cap Small cap Cash MSCI China MSCI China Small/Mid Cap Large Cap Index Index UBS Equity China Opportunity Fund MSCI China Index Past performance is not indicative of future results. *Mega Cap: > US$30 bn; Large Cap: US$10 30 bn); Mid Cap: US$1 10 bn); Small Cap: < US$1 bn. For illustrative purposes only. The above market capitalization allocations are only indicative and can be changed at any time at UBS s discretion. Source: UBS Global Asset Management & Bloomberg. Data as at end of July 2013

53 Strong Asia Equities Team Portfolio Management Team Experienced and dedicated team for China equities Strong track record Rigorous investment process based on fundamental research Bin Shi Lead Portfolio Manager 20 years investment experience Hai Huang Deputy Portfolio Manager / Research Analyst 10 years investment experience Supported by a team of experienced investment professionals 4 dedicated China equities investment specialists, based in Hong Kong 12 Asian Equities investment specialists, based in Singapore and Hong Kong Supported by global resources of UBS Global Asset Management Local equity trading Currency specialists Independent Risk Management

54 Performance UBS China Opportunity Performance indexed in % (share class P-acc; basis USD, net of fees)¹ Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 UBS (Lux) Equity Fund - China Opportunity (USD) MSCI China Index (USD) USD - Period Ending: 31-Jul-2013 Net of fees in % 3 months YTD 1 year 2 years² SI² Composite (USD) MSCI China Value added³ Ranking⁴ N/A N/A Source: UBS Global Asset Management. Data as at end of July Portfolio characteristics are shown net of fees. ¹ 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 commissions and costs charged when subscribing to and redeeming units. ² Periods greater than 1 year are annualized. Inception Date: ³ Value added is the arithmetic difference between the composite return and the benchmark return. ⁴ Lipper Quartile Rank

55 Portfolio Structure - UBS China Opportunity Source: UBS Global Asset Management, Data as at end of July 2013 The fund is actively managed, thus allocations can be changed any time at UBS s discretion. Current portfolio structures may be found at This information should not be considered a recommendation to purchase or sell any particular security.

56 Q&A Equity

57 Real Estate Market Switzerland What s next? Dr. Daniel Brüllmann Head of Wholesale Business Global Real Estate - Switzerland

58 Global Real Estate Switzerland Customer-focused transparent far-sighted 8 indirect real estate investment products 5 listed funds; UBS «Sima», the largest Swiss real estate fund 1 fund for qualified investors (not listed) 2 investment trusts Market and customer-oriented solutions for real estate and real estate projects Developments, purchase / sale, investments in kind, «James», PPP, etc. Investment volume: approx. CHF 13 billion 1 around CHF 60 billion 1 around the world around 900 properties in Switzerland around 1,700 worldwide Construction volume of around CHF 350 million per year 1 per per Current new construction portfolio: around CHF 800 million 1 57

59 Global Real Estate Switzerland (GRE CH) Global Real Estate Switzerland Riccardo Boscardin Deputy Urs Fäs Business Development Assistance Swiss Market Research Marketing / Communications Products & Transaction Projects & Operations / IT Legal & Compliance Property Valuation Asset Management (AM) Fernanda Balducci Accounting & Controlling (AC) Reto Grossmann Construction & Development (CD) Jean-Michel Roten Acquisition & Disposition (AD) Matthias Jäger Institutional Business Urs Fäs UBS AST Immobilien Schweiz UBS AST Kommerzielle Immobilien Schweiz UBS Direct Urban Real Estate solutions Wholesale Business Daniel Brüllmann UBS Direct Residential UBS «Anfos» UBS «Foncipars» UBS «Sima» UBS «Swissreal» Data as of August 1, 2013

60 Since 70 years in the Swiss real estate business with intelligent real estate solutions CHF 10 bn barrier Launch UBS AST-IS Launch UBS AST-KIS Launch UBS Direct Urban Launch UBS «Foncipars» Launch UBS «Anfos» Launch UBS «Sima» Launch UBS «Swissreal» Launch UBS Direct Residential Plus IPO of UBS Direct Residential Plus and renaming as UBS Direct Residential The real estate business is officially incorporated into UBS Global AM Source: UBS Global Asset Management, Global Real Estate Switzerland (GRE-CH); February 2013 UBS «Anfos» = UBS (CH) Property Fund - Swiss Residential «Anfos», UBS «Foncipars» = UBS (CH) Property Fund - Léman Residential «Foncipars», UBS «Sima» = UBS (CH) Property Fund - Swiss Mixed «Sima», UBS «Swissreal» = UBS (CH) Property Fund - Swiss Commercial «Swissreal», UBS Direct Residential = UBS (CH) Property Fund Direct Residential, UBS Direct Urban = UBS (CH) Property Fund Direct Urban, UBS AST-IS = UBS AST Immobilien Schweiz, UBS AST-KIS = UBS AST Kommerzielle Immobilien Schweiz

61 Highlights in the region of Ticino UBS «Swissreal»: Commercial properties Locarno, Piazza Grande 1 / Via Ciseri 2b Commercial properties, with UBS as main tenant Investment volume of approx. CHF 22 Mio m 2 commercial space Completion 1894, renovation 2009 UBS «Sima»: retirement home Residenza al Lido Locarno, Via della Posta 44 Exclusive retirement home in best location next to the lake Investment volume of approx. CHF 25 Mio. UBS «Sima»: Commercial properties Lugano, Via Pretorio 15 Commercial center Migros Investment volume of approx. CHF 61 Mio m 2 commercial space

62 Swiss job miracle Consistent growth in employment over the last 15 years 12.0% Forecast % 4.6 Unemployment Arbeitslosenquote rate p.a. 9.0% 7.5% 6.0% 4.5% 3.0% 1.5% People Anzahl in paid Erwerbstätige work (in (in millions) Mio.) 0.0% F13F14F 3.2 Schweiz (rechte Skala) Schweiz (linke Skala) Eurozone (linke Skala) Source: BFS; UBS Investment Bank; Experian Dezember 2012; UBS Global Asset Management, Global Real Estate Research & Strategy - Switzerland; März 2013

63 Real interest rates in CHF are comparably attractive 4% Swiss real interest rates on a 10 yrs basis Euro zone real interest rates on a 10 yrs basis 3% 2% 1% 0% -1% -2% Source: Bloomberg, February 2013 Remark: Calculation of the eurozone real interest rate is based on the lowest 10 year government bond yield (mainly Germany and France)

64 Risk premiums remain at historical highs Comfortable cushioning in case of an interest rate increase Residential 5% Retail 5% Office 5% 4% 4% 4% 3% 3% 3% 2% 2% 2% 1% 1% 1% 0% % % Prime property yields Zurich 10 yrs Swiss Government Bond yield Risk premium Prime property yields Geneva Source: Wüest und Partner 4Q 2012; SNB; UBS Investment Bank; UBS Global Asset Management, Global Real Estate Research & Strategy Switzerland, February 2013

65 Global Real Estate Switzerland Product offering Listed funds UBS (CH) Property Fund Direct Residential UBS (CH) Property Fund Léman Residential «Foncipars» UBS (CH) Property Fund Swiss Residential «Anfos» UBS (CH) Property Fund Swiss Commercial «Swissreal» UBS (CH) Property Fund Swiss Mixed «Sima» Fund for qualified investors UBS (CH) Property Fund Direct Urban Investment trusts UBS Foundation (AST-IS) «Immobilien Schweiz» UBS Foundation (AST-KIS) «Kommerzielle Immobilien Schweiz» Total of the portfolio Annual percentage change (%) AuM (CHF m) Investment focus Residential buildings in German-speaking Switzerland Residential buildings in French-speaking Switzerland Residential buildings in German-speaking Switzerland 1'622 1'685 1'813 1'882 2'002 Commercial buildings throughout Switzerland 1'112 1'142 1'291 1'405 1'405 A mix of properties throughout Switzerland 5'483 5'743 6'360 6'715 6'715 A mix of properties throughout Switzerland A mix of properties throughout Switzerland 1'015 1'129 1'272 1'465 1'465 Commercial buildings throughout Switzerland '308 10'937 12'144 13'150 13' UBS «Anfos» as per ; UBS Direct Urban, UBS Direct Residential, UBS «Sima», UBS «Foncipars» and UBS «Swissreal» per ; AST-IS and AST-KIS as per

66 Performance of the listed Swiss real estate funds Premium development from January 1, 2003 until July 31, 2013 Source: UBS Global Asset Management, SXI Real Estate Funds Index, Factset, listed Swiss real estate funds financial results. Past performance is no guarantee for future results.

67 Update - SXI Real Estate Funds Index Data as at July 31, 2013 Notes: Market capitalisation, weightings and prices based on SIX data. NAV according to the latest company statement, adjusted for the dividends. Mixed means portfolio consists of more than one sector. Region and sector classification as well as Premium and Dividend Yield calculation done by UBS Global Asset Management based on financial year statements. Performance is Total Return based on Factset data. *Rothschild RE Helvetia is in the index since 9/5/2012, CS REF Hospitality is in the index since 1/11/2012. Past performance is no guarantee for future results.

68 Premium Development real estate funds according to type of use Large difference between residential and commercial buildings could lead to entry opportunities 35% 30% 25% 20% 15% 10% 5% 0% Premium spread Premium commercial property funds Premium residential property funds Source: UBS Global Asset Management, Global Real Estate Data: as per July 31, 2013

69 Market development last 50 years Tendency to regulatory changes after structural interruptions Federal law about withholding tax Federal law about investment funds Federal enactment to stabilize building industy Nation refuses the initiative about protection of tenants Federal enactment (5 years valid) to reduce risk in real estate market Partial annulment of federal enactment of 1989 (investment restrictions for pension funds) Revised federal law about investment funds Federal law about collective investment schemes Partial revision federal law about collective investment schemes Source: UBS Global Asset Management, Global Real Estate Rüd Blass IF Index

70 Outlook Construction projects Fund Location Street Project name Utilization Investment costs i l l d Status Completion until / movei Internet page UBS Direct Residential Rheinfelden Pappelnweg Weiherfeld III Apartments 14 under construction 1. Sem UBS Direct Residential Schöftland Feldmattweg Feldmatt Apartments 21 under construction 1. Sem UBS «Anfos» Basel Aeschenvorstadt Anfos-Haus Mixed usage 45 under construction 2. Sem UBS «Anfos» Zurich Heerenschürlistrasse Heerenschürli Apartments 120 under construction 1. Sem. 16 UBS «Foncipars» Gland Eikenott Apartments 27 under construction 2. Sem UBS «Foncipars» Boudry La Baconnière Apartments 25 under construction 2. Sem UBS «Sima» Glattbrugg Riethofstrasse Airport-Hotel Commercial 80 under construction 2. Sem. 13 UBS «Sima» Altstätten (SG) Seven Apartments 40 under construction 1. Sem. 14 UBS «Sima» Opfikon Wright Place Mixed usage 140 under construction 1. Sem. 14 UBS «Sima» Boudry La Baconnière Apartments 18 under construction 2. Sem UBS «Sima» Zurich-GlattparkDufauxstrtasse Kameha Grand HoteCommercial 120 under construction 1. Sem. 15 UBS «Sima» Davos Promenade Symond Park Mixed usage 80 under construction 2. Sem. 15 UBS «Sima» Pratteln Bahnhofplatz 1 Aquila Mixed usage 57 under construction 2. Sem UBS «Swissreal» Pratteln Güterstrasse Polygon Offices 35 under construction 2. Sem Total 822 Source: UBS Global Asset Management, Global Real Estate Note: No responsibility is taken for the correctness of above-given information. Data: as per June 30, 2013

71 Summary The turning point is moving forward Migration and low interest rates are expected to remain. Thus, for the near future, real estate prices are expected to stay at the current high. Risk-on environment is fragile. Significant asset class rotations at the expense of fixed income are currently not taking place. Over-supply risks may arise in the residential sector, in regions with below average demand, as well as the office sector within the German speaking part An increase in offered rents is only expected in the residential sector. Offered rents are expected to move sideways in the retail and downwards in the office sector. Total returns are expected to decline towards the level of the income return

72 The international real estate universe Investments in Europe expand the investment universe for a Swiss investor already by 23 times EUROPE Investment volume USD bn GDP growth 2 1.7% 2012 GDP growth 2 122% North America Investment volume USD bn GDP growth 1.8% 2012 GDP growth 2.3% SWITZERLAND Investment volume USD 136 bn GDP growth 2.7% 2012 GDP growth 2.2% ASIA PACIFIC Investment volume USD bn GDP growth 3 6.7% 2012 GDP growth 3 6.5% Source: DTZ Research (2009). Note: GDP growth rates are estimates of UBS Investment Bank from August Estimates are based on following exchange rates: GBP 0.64 / 1 USD, EUR 0.78 / 1 USD and CHF 0.98 / 1 USD. 2 only Western Europe 3 Asia excluding Australia and New Zealand.

73 Correlation of total returns between Switzerland and Europe Significant diversification effects by non-domestic investments Source: UBS Global Real Estate & Strategy, August 2013 Note: correlation for commercial real estate on the basis of synthetic indices Past / expected performance is no guarantee for future performance

74 Continued economic divergence in Europe leads to different regional real estate market fundamentals Employment and retail sales growth (% p.a.) Source: Experian, June 2013

75 Projected wide range of returns Case for diversification valid Income levels drive total returns and capital values expect to stabilize ERV growth 2% Capital return 6% 4% 0% 2% 0% -2% -2% -4% -6% -8% -4% % Germany France Eurozone Netherlands Italy Spain UK Switzerland Income return 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Germany France Eurozone Netherlands Italy Spain UK Switzerland Germany France Eurozone Netherlands Italy Spain UK Switzerland Total return 12% 10% 8% 6% 4% 2% 0% -2% -4% Germany France Eurozone Netherlands Italy Spain UK Switzerland Source: UBS Global Asset Management, Global Real Estate Research and Strategy; July 2013 Note: local valuation standards are used outside the UK (marked-to-market); numbers are forecasts; Actual returns may vary materially from forecast returns

76 Q&A Real Estate Market Switzerland What s next?

77 Prospettiva Save the date: Investment-Breakfast 03. ottobre 2013 Grazie per la vostra attenzione.