ASSET ALLOCATION
DJÂAFAR ABALLECHE Alternatives-heavy
Senior Cross-Asset Specialist
JACQUES HENRY
Cross-Asset Team Leader
Summary:
• Endowments delivered an average return
of 5.3% (in USD, net of fees) from 1 July
2018 to 30 June 2019.
• The largest funds (over USD1 bn in AUM)
returned an average of 5.9%, only slightly
higher than the 5.8% returned by the
smallest ones (USD25 mn and under).
• The average performance across endow-
ment funds of all sizes was lower than the
previous year due to the decline in market
returns in Q4 2018.
• Endowment funds’ long-term perfor-
mance remains strong. The 10-year aver-
age return stood at 8.4% for all institu-
tions and 9% for larger funds.
• Endowments’ dollar-weighted average
allocation was generally stable in the year
to 30 June 2019, with a small reduction
in alternative assets (from 53% to 51%)
and an increase in fixed-income holdings
by 3.7% (from 8% to 11.7%).
endowment funds keep
their promise
Annual returns for US endowment funds declined on average
in the latest fiscal year. But the 10-year average return rose
substantially, exceeding funds’ long-term objectives. Thanks
to outsize allocations to alternatives, large endowment funds
continue to outperform classic 60/40 portfolios.
Introduction assets under management over one to
Endowments are non-profit organisa- three years and target a real average
tions funded through gifts and dona- annual return of 5-6% (adjusted for
tions. Many institutions, particularly inflation) over the long term. In the US,
in the US, have endowments, including the inflation rate used by endowments
universities, museums and hospitals. is usually based on the Higher Educa-
The largest funds are held by American tion Price Index (HEPI). After account-
universities, the subject of this article. ing for gifts and donations, the annual
While endowments vary in size, net spending rate is usually lower,
many are major investors. According close to 2-4% of assets. Low liquid-
to the National Association of Col- ity needs allow endowments to toler-
lege and University Business Officers ate relatively high short-term volatil-
(NACUBO1), total endowment assets ity and focus on the long-term pursuit
under management (AUM) for the 774 of superior returns. As a consequence,
US institutions that completed its lat- many university endowments have rel-
est survey came to more than USD630 atively high allocations to equity mar-
bn at 30 June 20192. The median was kets and illiquid private asset classes
approximately USD144.4 mn at the and smaller allocations to fixed income
same date. Harvard University’s is than classic investment firms.
the largest endowment fund, with Endowments are tax exempt, but
USD39.4 bn in assets under manage- they are subject to laws and regulations
ment, followed by the University of that require investments to be reported
Texas and Yale University, with USD31 on a total return basis and must diver-
bn and USD30.3 bn, respectively. sify according to modern portfolio the-
The primary investment objective ory. Moreover, investment committees
of university endowments is to gener- and boards are required to exercise a
ate sufficient returns to maintain the duty of care and prudence when mak-
purchasing power of their assets in ing investment decisions.
perpetuity for future generations, and
to sustain the level of spending neces- Spending rule
sary to support the university’s oper- As mentioned, the main purpose of
ating budget. In general, endowments university endowments is to support
spend 4-6% of the moving average of the university’s operating budget
1
Founded in 1962, the National Association of College and University Business Officers (NACUBO) is a nonprofit professional
organisation representing chief administrative and financial officers at more than 1,900 colleges and universities across the US.
NACUBO’s aim is “to advance the economic vitality, business practices, and support of higher education institutions in pursuit of
their missions”.
2
The fiscal year for US endowment funds generally runs from 1 July to 30 June of the following year and that aggregate data on endow-
ments become available seven months later. References to ‘fiscal year 2019’ (FY2019) cover the period 1 July 2018 to 30 June 2019.
PERSPECTIVES FEBRUARY 2020
while preserving the purchasing
power of assets over time. Spending
policies reflect a compromise between
these two objectives. Generally,
endowments apply one of three
different types of spending rule.
These are:
• Constant growth rule: The
endowment provides a fixed,
inflation-adjusted amount annually
to the university.
• Market value rule: The amount to
be spent is calculated by applying
a pre-specified rate (usually 4-6%
of assets) of the three- to five-year
moving average of asset values.
• Hybrid rule: Annual pay-outs
are calculated by combining the
constant growth and market value
rules.
These three spending rules are
formulated in the following equation:
Spending in Year
t+1= w × [Spending in Yeart ×
(1 + Inflation Rate)]
+ (1–w) × Spending Rate × Average AUM
Study of Endowments, endowment
spending increased slightly in FY2019.
The average effective net spending rate
rose from 4.4% to 4.5% the previous
fiscal year. The spending plus inflation
rate was, however, lower in FY2019.
Institutions participating in the study
collectively spent about USD22 bn
from their funds on student financial
aid (49%) and other operations in
FY2019. Using the average spending
rate plus the HEPI, one can see that
the net spending rate was pretty stable
in the period FY2010-FY2019, ranging
from a maximum of 4.6% in FY2011 to
a low of 4.2% in FY2012 (see chart 1).
Large endowments have a significant
allocation to alternatives
US endowment funds, especially the
larger ones, have sizeable allocations to
alternative assets, providing the bene-
fits of diversification and a higher risk
CHART 1: AVERAGE SPENDING RATE PLUS HIGHER EDUCATION PRICE INDEX (HEPI),
FY2010–FY2019*
9%
premium. By nature, alternative assets
offer opportunities to exploit ineffi-
cient market pricing through active
management.
Over time, the larger endowment
funds have significantly reduced their
exposure to traditional asset classes
such as public equities and bonds (see
chart 2), reallocating assets to alterna-
tive asset classes such as private equity,
real assets and absolute-return strat-
egies. Their allocation to public equi-
ties decreased from 45% in 2002 to
31.4% in 2019 (having fallen to as low
as 26% in 2009). The weighting of fixed
income fell from 20.5% in 2002 to just
7% in 2018 but increased to 10.1% in
2019, while the allocation to alterna-
tive assets increased from 32% in 2002
to approximately 57% in 2019.
The larger US funds’ asset allo-
cation differs from that of smaller
ones. Larger endowment portfolios’
Avg. Spending Rate HEPI Target Return

The value w represents the 8% 7,7% 7,7%

7,4% 7,4% 7,4% 7,3% 7,1% 7,0% 7,2% 7,0%
weighting applied to the prior year’s 7%
spending amount, w=1 corresponds 6% 3,0% 3,4% 2,9%
2,3% 2,5%
to the constant growth rule and 5% 0,9% 1,7% 1,6% 2,0% 1,4%
w=0 the market value rule. A w of 4%
between 0 and 1 gives us the hybrid 3%
spending rule. Most endowments in 2%
4,5% 4,6% 4,2% 4,4% 4,4% 4,2% 4,3% 4,4% 4,4% 4,5%

the US use a market value spending 1%

rule, but the larger ones use a 0%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
hybrid rule, commonly referred to
*Past performances and forecasts are not per se a reliable indicator of future performance.
as the ‘Yale spending rule’. By way Note: All spending rate data are equal weighted.
of example, Stanford University’s Source: Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, January 2020.
endowment targeted a net spending
rate of 5.5% in FY2019, determined
by applying a hybrid rule, whereas
CHART 2: LARGER US ENDOWMENTS’ ASSET ALLOCATION, 2002-2019 3
Princeton University’s net spending Equity Fixed Income Alternative Short-term Securities/ Cash/Other
100
rate, expressed as a percentage of 1,8
90
market value, stood at 5.3%. The
80
same rule is applied by the University 70 56,7
of Chicago’s endowment, whose 60
spending is within the range of 4.5- 50
5.5% of a 12-quarter average market 40
10,1
value (5.5% in June 2019). By contrast, 30
20
Colgate University applies a constant 31,4
10
growth rule that aims to ensure the
0
net spending rate is not greater than 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
5.5% of the average fair value of the Source: Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, January 2020
preceding four quarters and not less
than 4.5% of the average fair value of
the preceding eight quarters.
According to the 2019 NACUBO-TIAA 3
Data for endowments come from NACUBO Endowment Study, 2002 -2008. NACUBO-Commonfund Study of Endowments for 2009
through 2017. Data for fiscal year 2018 and 2019 are from the NACUBO-TIAA Study of Endowments (NTSE).

PERSPECTIVES FEBRUARY 2020

weighting of alternative assets is far equity and short-term securities (see especially for the largest investment
greater than smaller ones’. This is chart 3). Their fixed-income allocation pools. On average, institutions have
because investing in alternative assets, fell from 30% in 2012 to 24% in 2018, held approximately 30% in alternative
particularly private equity funds, real but rebounded to 30% in 2019. Smaller investments and 50% in equities, with
estate and real assets (such as infra- endowments’ allocation to alternative the remaining 20% allocated between
structure) involves substantial invest- assets increased from 6% to 11% in 2018 fixed income and short-term securities
ments and expertise. They are there- but fell to 9% in 2019. and cash (see chart 4). NACUBO-TIAA
fore less accessible to smaller investors. Overall, except for the 2007–2009 analysis shows that as the aggregate
Smaller US endowments’ asset allo- period (the years of the financial cri- investment pool of assets increases, so
cation has been relatively stable since sis), endowment funds’ asset alloca- too does the percentage of holdings in
2002, in particular when it comes to tion has been very stable over time, alternative investments across Ameri-
can endowment funds of all sizes. Con-
versely, apart from funds with more
CHART 3: SMALLER US ENDOWMENTS’ ASSET ALLOCATION, 2002-2019 than USD1 bn in AUM, the average
allocation to bonds decreases as the
Equity Fixed Income Alternative Short-term Securities/ Cash/Other
0,9
size of the endowment fund increases.
100
90
8,8 Take the Yale endowment. At the end of
80 FY2018, the Yale endowment fund, the
29,7
70 third largest in the US, allocated 76.5%
60 of assets to alternative assets, 18.8%
50 to equity and only 4.7% to bonds and
40
cash. For fiscal year 2020, Yale is target-
30 60,6
ing an allocation of 16.5% to equity, 7%
20
10
to cash and bonds and 76.5% to alter-
0 native assets (absolute return, venture
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 capital, leveraged buyouts, real estate
Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, January 2020 and natural resources).
The average asset allocation of
institutional participants in the
CHART 4: AVERAGE ASSET ALLOCATION FOR ALL US ENDOWMENTS NACUBO-TIAA study for FY2019
(EQUALLY WEIGHTED), 2002-2019 changed little from the previous year
Equity Fixed Income Alternative Short-term Securities/ Cash/Other (see table 1). Overall, endowments’ dol-
100 1.60
lar-weighted average allocation to US
90 27
equities decreased from 16% to 14%
80
70
while the allocation to global equities
60
20.10 increased slightly from 20% to 21%. The
50 proportion allocated to fixed income
40 increased by 3.7% whereas the alloca-
30 50.90 tion to short-term securities and cash
20
fell from 3.0% to just 1.8%. Similarly,
10
the allocation to alternatives dropped
0
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 slightly in FY2019, from 53% to 51.3%,
Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, January 2020 mainly due to a decline in allocations
to private equity and venture capital.

TABLE 1: US ENDOWMENTS’ ASSET ALLOCATION. FY2018 AND FY2019 Long-term returns remain strong
(US DOLLAR-WEIGHTED AVERAGE FOR ALL INSTITUTIONS) although FY2019 performance was
Total institutions relatively subdued
(Dollar-weighted Average) Over USD1 bn USD25 mn and under According to the NACUBO-TIAA
Fiscal Year 2018 2019 2018 2019 2018 2019 Study of Endowments report pub-
lished on January 30, 2020, US institu-
U.S. Equities 16.0 14.1 13.0 11.2 45.0 45.7
tions’ endowments posted an average
Fixed Income 8.0 11.7 7.0 10.1 24.0 29.7 return of 5.3% (net of fees) in FY20 (July
Non-U.S. 20.0 21.1 19.0 20.2 15.0 14.9 1, 2018 – June 30, 2019), down from 8.2%
& Global Equities in FY2018.
Larger endowments (AUM of over
Alternative 53.0 51.3 58.0 56.7 11.0 8.8
USD1 bn) returned an average return
Cash/Other 3.0 1.8 3.0 1.8 5.0 0.9 of 5.9%, 0.6% higher than the aver-
age for all institutions. Larger funds
Source: Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, FactSet, January 2020 usually outperform smaller ones due

PERSPECTIVES FEBRUARY 2020

to their larger exposure to illiquid returned 6.5% and 5.7%, respectively, bn) with respective annual returns of
assets, but in FY2019 the gap in aver- in FY2019. This is the first time since 12.4% and 10.9%4.
age returns between larger and smaller 2010 that Harvard’s endowment has The endowment index launched
funds narrowed significantly. Table 2 outperformed Yale’s. The best perfor- by Nasdaq OMX in May 2014 (called
shows the average returns for FY2019 mance of all was achieved by Brown the Endow Index), which is supposed
and FY2018 by endowment size. The University (USD4.2 bn in AUM) fol- to replicate the endowment invest-
Harvard and Yale endowment funds lowed by Bowdoin College (USD1.7 ment style, had a much lower perfor-
mance, returning 3.4% in FY2019 (in
USD). From its inception to 31 January
TABLE 2: AVERAGE ENDOWMENT RETURNS (IN %) FOR FY2018 AND FY2019
2020, the Endow Index posted an aver-
Endowments by size FY2019 FY2018 Difference FY19-FY18
age annual return of 4.4% in US dollars
Over USD1 Billion 5.9 9.7% -3.8%
(see chart 5).
The Index is described on Endow-
Over USD500 Million to USD1 Billion 5.1 8.7 -3.6
ment Wealth Management’s website
Over USD250 Million to USD500 Million 5.0 8.5 -3.5 as representing “the investable oppor-
Over USD100 Million to USD250 Million 5.1 7.9 -2.8 tunity for managers of portfolios uti-
lising the endowment investment
Over USD50 Million to USD100 Million 4.9 7.8 -2.9
philosophy, or who otherwise incor-
Over USD25 Million to USD50 Million 5.5 7.5 -2.0 porate alternative investments within
USD25 Million and Under 5.8 7.6 -1.8 a comprehensive asset allocation”. The
index’s target asset allocation is gener-
All Institutions 5.3 8.2 -2.9
ally stable: 36% equities, 52% alterna-
Source: Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, FactSet, January 2020
tives (private equity, venture capital,
CHART 5: ENDOW INDEX’S TOTAL RETURN (IN USD), 2000-2020 hedge funds and real assets), 8.% fixed
income and 4% cash.
ENDOW Index
1 600
Over the past 10 years (June 2009-
June 2019, with simulated returns
1 400
before 2014), the Endow Index has
1 200
delivered an annual return of 8.2%,
1 000 very close to the annual average of all
800 endowments of 8.4% (see table 3).
600 The decline in the performance of
400
US endowments in FY2019 was essen-
Back-test data 30.06.2000 - 18.05.2014 Inception 19.05.2014 - Live data tially due to lower market returns than
200
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
in FY2018. As table 3 shows, global and
emerging equities were more to blame
Source: Pictet WM - AA&MR, Bloomberg, January 2020
than US equities. Returns from alter-
native assets also fell significantly, with
TABLE 3: AVERAGE RETURN (IN ) FOR 1-YEAR, 3-YEAR, 5-YEAR AND 10-YEAR returns from hedge funds about 4%
(FROM 1 JULY TO 30 JUNE) lower and from US buyouts about 7%
lower than in FY2018 (19% versus 12%).
Endowments by size 1-year 3-year 5-year 10-year
Private real estate returns rose 12% in
Over USD1 Billion 5.9 9.6 6.1 9.0 FY2018, but ‘only’ 8% in FY2019. The
Over USD500 Million to USD1 Billion 5.1 8.9 5.1 8.5 worst was natural resources, returns
Over USD250 Million to USD500 Million 5.0 8.9 5.3 8.4 from which declined 17% between 2018
and 20195. The fall in returns from
Over USD100 Million to USD250 Million 5.1 8.5 5.0 8.3
global equities and alternatives assets
Over USD50 Million to USD100 Million 4.9 8.3 4.9 8.2 had a disproportionate impact on
Over USD25 Million to USD50 Million 5.5 8.3 4.9 8.4 larger endowments given their heavy
exposure to alternative assets (more
USD25 Million and Under 5.8 8.3 5.5 8.6
than 55% of their AUM) and global
All Institutions 5.3 8.7 5.2 8.4 equities (about 21%).
Despite the poor average return in
Endow index 3.4 8.0 4.6 8.2
fiscal year 2019 compared to 2018, the
US 60/40 10.4 8.8 7.7 10.6 10-year average return for all institu-
Global 60/40 * 6.1 8.1 4.7 7.7 tions reached 8.4% in FY2019 thanks
* Global 60/40: mix of 40% of Bloomberg Barclays Global Aggregate
to a strong recovery in the years since
and 60% of MSCI AC World index, assumed to be rebalanced annually the 2009-2010 global financial cri-
Source: Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, Bloomberg, FactSet, January 2020
sis. Returns are even better for larger
4
Data provided by Bloomberg endowments (over USD1 bn in AUM),
5
Indexes used for private equity (US buyout), private equity real estate and natural resources are from Burgiss

PERSPECTIVES FEBRUARY 2020

which recorded a 10-year average increase from 2017 to 2018, long-term ratio by size of funds compared to the
return of 9% in FY2019. The results are objective returns have been trending Yale endowment fund and a US 60/40
especially good for Yale’s endowment downwards in recent years—from 7.8% portfolio. Larger endowment funds’
fund, which has posted an average in 2009 to 7% in FY2019. risk-adjusted returns are close to those
annual return of 11.1% over the last 10 Over the long run (FY1996-FY2019), of a 60/40 portfolio, but with higher
fiscal years, slightly higher than a tra- larger endowment funds have outper- average annual returns (9.1% versus
ditional US 60/406 portfolio’s return of formed US 60/40 portfolios. Yale’s 7.7%).
10.7% over the same period. endowment performance has been
As stated previously, endowments even stronger, regularly outperform- The market sell-off in Q4 2018
focus on the long term. Consequently, ing traditional portfolios, but at the explains FY2019’s lower returns
many of them reference 10-year aver- cost of higher volatility (see chart 7). The decline in US endowments’ aver-
age annual returns when measuring However, Yale’s Sharpe ratio, has been age returns in FY2019 from FY2018
performance. Chart 6 shows 10-year better (0.98 versus 0.85 for a 60/40 (to 5.3% from 8.2%) was largely due
average endowment returns for portfolio). Table 4 shows endowment to the equity sell-off in Q 4 2018.
FY2009-FY2019. Except for a slight returns, volatility and the Sharpe The S&P 500 declined by 4% over the
same period (1 July 2018-30 June 2019).
CHART 6: LONG-TERM US ENDOWMENT FUNDS’ AVERAGE RETURNS (IN%), However, the S&P 500 posted a total
FY2009-FY2019* return of 31% in calendar year 2019.
9% 10-year realised returns Long-term return objectives 8,4% On the basis of the market’s rebound
7,8%
8%
7,7% 7,7%
7,4% 7,4% 7,4% 7,3% 7,1% 7,2%
since late-December 2018, endow-
7,0% 7,0%
7%
6,2% 7,1% 7,1% 6,3% ments’ returns in calendar year 2019
5,8%
6% 5,6% are estimated to have been much
5,0%
5% 4,6% higher than in FY2019. Our estimate,
4,0%
4% 3,4% based on average asset allocations for
3% all endowments, is an annual return of
2% around 14% in calendar year 2019 (illiq-
1% uid asset data for the last quarter of 2019
0%
are not yet available). This figure seems
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
realistic as the University of Texas Sys-
Source: Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, January 2020
tem Endowment Fund, the second
largest after the Harvard endowment
CHART 7: CUMULATIVE ANNUAL RETURNS FOR ALL ENDOWMENT FUNDS, FOR YALE’S fund in terms of AUM, reported an aver-
ENDOWMENT FUND AND FOR A 60/40 PORTFOLIO, FY1996-FY2019 age return of around 13.9% in calendar
Over $1 Billion Less than $100 Average (All Institutions) Yale Endowment US 60/40
1400 year 2019 versus 4.5 % for its fiscal year,
1200 which ended on 31 August. The Endow
1000 Index achieved a return of 20.2% in cal-
800
endar year 2019 compared to 3.4% in
600
FY2019 (to 30 June 2019).
400

200

0
FY1997

FY2001

FY2004

FY2007

FY2011

FY2014

FY2017
FY1996

FY1998

FY1999

FY2000

FY2002

FY2003

FY2005

FY2006

FY2008

FY2009

FY2010

FY2012

FY2013

FY2015

FY2016

FY2018

FY2019

Source: 2019 NACUBO-TIAA Study of Endowments, FactSet, PWM-AA&MR, February 2020

TABLE 4: RISK-ADJUSTED RETURNS FOR ENDOWMENT FUNDS AND US 60/40

PORTFOLIOS (IN%), FY1996-FY2019
Over Over USD100 USD100
FY1996- Total Over USD500 Million– Million – Million Yale US
FY2019 institutions USD1 Billion USD1 Billion USD 500 Million and Under Endowment 60/40
Annualised 9.7 9.7 -3.8 9.7 9.7 -3.8 9.7
return
Annualised 8.7 8.7 -3.6 8.7 8.7 -3.6 8.7
volatility
Sharpe ratio 8.5 8.5 -3.5 8.5 8.5 -3.5 8.5

Source: Pictet WM - AA&MR, NACUBO-TIAA Study of Endowments, FactSet, January 2020

6
US 60/40: Traditional heuristic portfolio consisting of 60% equities (S&P 500) and 40% bonds (US 10-year Treasury), assumed to be
rebalanced annually.

PERSPECTIVES FEBRUARY 2020

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and consult with its own professional adviser(s) as to any Investment including the risks
involved with transactions on such Investment.
This document is not to be relied upon in substitution for the exercise of independent
judgment. The value and income of any Investment mentioned in this document may
fall as well rise. The market value may be affected by, amongst other things, changes in
economic, financial, political factors, time to maturity, market conditions and volatility,
and the credit quality of any issuer or reference issuer. Furthermore, foreign currency
rates of exchange may have a positive or adverse effect on the value, price or income of any
Investment mentioned in this document. Accordingly, investors must be willing and able
to, and effectively assume all risks and may receive back less than originally invested.
Past performance should not be taken as an indication or guarantee of future performance
and no representation or warranty, expressed or implied, is made by BPCAL/Pictet HK
branch regarding future performance.
This document does not constitute the investment policy of BPCAL/Pictet HK branch,
or an investment recommendation, and merely contains the different assumptions,
views and analytical methods of the analysts who prepared them. Furthermore, the
information, opinions and estimates expressed herein reflect a judgment at its original
date of publication and are subject to change without notice and without any obligation on
BPCAL/Pictet HK branch to update any of them. BPCAL/Pictet HK branch may have issued
or distributed other reports or documents that are inconsistent with, and reach different
conclusions from, the information presented in this document.
While the information and opinions presented herein are believed to be from sources
believed to be reliable, BPCAL/Pictet HK branch is not able to, and do not make any
representation or warranty as to its accuracy or completeness. Accordingly, BPCAL/Pictet
HK branch accepts no liability for loss arising from the use of or reliance on this document
presented for information purposes only. BPCAL/Pictet HK branch reserves the right to
act upon or use any of the information in this document at any time, including before its
publication herein.
BPCAL/Pictet HK branch and its affiliates (or employees thereof) may or may not have long
or short positions in, and buy or sell, or otherwise have interest in, any of the Investments
mentioned herein, and may or may not have relationships with the issuers of or entities
connected with Investments mentioned in this document. BPCAL/Pictet HK branch and
their affiliates (or employees thereof) may act inconsistently with the information and/or
opinions presented in this document.
The information used to prepare this document and/or any part of such information, may
have been provided or circulated to employees and/or one or more clients of BPCAL/Pictet
HK branch before this document was received by you and such information may have been
acted upon by such recipients or by BPCAL/Pictet HK branch.
This document is provided solely for the information of the intended recipient only and
should not be reproduced, published, circulated or disclosed in whole or in part to any
other person without the prior written consent of BPCAL/Pictet HK branch.
Singapore: This document is not directed to, or intended for distribution, publication
to or use by, persons who are not accredited investors, expert investors or institutional
investors as defined in section 4A of the Securities and Futures Act (Cap. 289 of Singapore)
(“SFA”) or any person or entity who is a citizen or resident of or located in any locality,
state, country or other jurisdiction where such distribution, publication, availability or
use would be contrary to law or regulation or would subject BPCAL and any of its affiliates
or related corporations to any prospectus or registration requirements.
BPCAL has obtained an exemption from the Monetary Authority of Singapore (“MAS”)
under section 100(2) of the Financial Advisers Act (“FAA”) for the provision of financial
advisory services to High Net Worth Individuals (as defined in the MAS Guidelines on
Exemption for Specialised Units Serving High Net Worth Individuals FAA-G07) (the
“Exemption”) and is exempted from the requirements of sections 25, 27, 28 and 36 of the
FAA, the MAS Notice on Recommendations on Investment Products (FAA-N16), MAS
Notice on Appointment and Use of Introducers by Financial Advisers (FAA-N02), MAS
Notice on Information to Clients and Product Information Disclosure (FAA-N03) and
MAS Notice on Minimum Entry and Examination Requirements for Representatives of
Licensed Financial Advisers and Exempt Financial Advisers (FAA-N13).
Please contact BPCAL in Singapore in respect of any matters arising from, or in connection
with this document.
Hong Kong: This document is not directed to, or intended for distribution, publication
to or use by, persons who are not “professional investors” within the meaning of the
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and any rules
made thereunder (the “SFO”) or any person or entity who is a citizen or resident of or
located in any locality, state, country or other jurisdiction where such distribution,
publication, availability or use would be contrary to law or regulation or would subject
Pictet HK branch and any of its affiliates or related corporations to any prospectus or
registration requirements.
Pictet & Cie (Europe) S.A. is incorporated in Luxembourg with limited liability. It is an
authorized institution within the meaning of the Banking Ordinance and a registered
institution (CE No.: AQ 515) under the SFO carrying on Type 1 (dealing in securities), Type
4 (advising on securities) and Type 9 (asset management) regulated activities.
Warning: The contents of this document have not been reviewed by any regulatory
authority in Hong Kong. You are advised to exercise caution in relation to the offer.
If you are in any doubt about any of the contents of this document, you should obtain
independent professional advice. Please contact Pictet HK branch in Hong Kong in respect
of any matters arising from, or in connection with this document.
Distributor: Pictet Bank & Trust Limited, where registered office is located at Building
1, Bayside Executive Park, West Bay Street & Blake Road, Nassau, New Providence, The
Bahamas.
The document is not directed to, or intended for distribution or publication to or use by
persons who are not Accredited Investors (as defined in the Securities Industry Regulations,
2012) and subject to the conditions set forth in the Securities Industry Regulations, 2012
or to any person or entity who is a citizen or resident of or located in any locality, state,
country or other jurisdiction where such distribution, publication, availability or use
would be contrary to law or regulation or would subject Pictet Bank & Trust Limited to
any prospectus or registration requirements. Pictet Bank & Trust Limited is incorporated
in The Bahamas with limited liability. It is a bank and trust company that is licensed in
accordance with the Banks and Trust Companies’ Regulation Act and is regulated by the
Central Bank of The Bahamas. Additionally, Pictet Bank & Trust Limited is registered with
the Securities Commission of The Bahamas as a Broker Dealer II and is approved to (i) Deal
in Securities 1.(a) & (c); (ii) Arrange Deals in securities; (iii) Manage Securities ; (iv) Advise
on Securities.
Warning: The content of this document has not been reviewed by any regulatory authority
in The Bahamas. You are, therefore, advised to exercise caution when processing the
information contained herein. If you are in any doubt about any of the content of this
document
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constitute investment advice or a recommendation to make (or refrain from making) any
kind of investment decision and may not be relied on as such. Historical data and analysis
should not be taken as an indication or guarantee of any future performance analysis,
forecast or prediction. The MSCI information is provided on an “as is” basis and the user
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