Prospectus - April 2013 - Pictet Funds Hong Kong

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The following paragraphs shall be inserted respectively as the 4 th - 7 th and 10 th paragraphs under the subsection“Credit Derivatives” which falls under the section “Investment Restrictions:“When the investment policy of a compartment provides that the latter may invest in total return swaps and/orother derivative financial instruments that display similar characteristics, these investments will be made incompliance with the investment policy of such compartment. Unless the investment policy of a compartmentprovides otherwise, such total return swaps and other derivative financial instruments that display the samecharacteristics may have underliers such as currencies, interest rates, transferable securities, a basket oftransferable securities, indexes, or undertakings for collective investment.The counterparties of the Fund will be leading financial institutions specialised in this type of transaction andsubject to prudential supervision.These counterparties do not have discretionary power over the composition or management of the investmentportfolio of the compartment or over the underlying assets of the derivative financial instruments.The total return swaps and other derivative financial instruments that display the same characteristics shall notconfer to the Fund a right of action against the counterparty in the swap or in the derivative financialinstrument, and any eventual insolvency of the counterparty may make it impossible for the paymentsenvisioned to be received.The rebalancing frequency for an index that is the underlying asset for a financial derivative is determined bythe provider of the index in question. The rebalancing of said index shall not give rise to any costs for the subfundin question.”The section entitled “Lending on securities” shall be deleted in its entirety and be replaced with the following:“Lending on securitiesTo the full extent allowed and within applicable regulatory limits, and in particular pursuant to (i) Article 11 ofthe Grand Ducal Regulation of 8 February 2008 on certain definitions in the amended Law of 20 December2002 on undertakings for collective investment, (ii) CSSF Circular 08/356 containing rules applicable toundertakings for collective investment when certain techniques and instruments on transferable securities andmoney market instruments are used (as amended, completed or replaced) and (iii) the ESMA guidelines onETFs and other points relating to UCITS, any compartment can enter into securities lending agreements toincrease its capital or its revenue or to reduce its costs or risks.The Fund may enter into securities lending agreements only when the counterparty involved meets thefollowing conditions:• the counterparty is subject to prudential supervision rules that the CSSF deems equivalent to thoserequired under European law;• if the counterparty is an entity linked to the Management Company, care should be taken to avoid anyresulting conflicts of interest in order to ensure that the agreements are entered into on normal arm’slength commercial terms; and• the counterparty must be a financial intermediary (such as a banker, a broker, etc.) acting on its ownbehalf.For each securities lending agreement, the Fund must receive a guarantee, the value of which for the full termof the lending agreement must be at least equivalent to 90% of the total valuation (including interests,dividends and any other rights) of the securities loaned to the borrower. However, the Agent shall request aguarantee equivalent to 105% of the market value of the securities loaned, and no discount shall be applied tothat value.The guarantee held on the loaned securities will be either (i) bonds issued or guaranteed by the government orby a regional or local government in a member state of the OECD, or issued or guaranteed by local, regionalor international branches of supranational institutions or organisations that have a rating of at least AA and/or(ii) bonds issued or guaranteed by leading issuers offering adequate liquidity.The market value of the loaned securities and of the guarantee will be reasonably and objectively calculated bythe Agent each banking day (“mark to market”) taking into consideration the market conditions and anysupplementary fees, as applicable. If the guarantee already held seems inadequate in view of the amount tocover, the Agent will ask the borrower to promptly deposit an additional guarantee in the form of securitiesthat meet the criteria listed above. The guarantees received by the Fund as part of the securities lendingagreements shall not be reinvested.Implementation of the above-mentioned securities lending programme should not have any impact on the riskprofile of the concerned compartments of the Fund.”2
The Annex to the Prospectus of all sub-funds of the Fund authorised by the Hong Kong Securities and FuturesCommission (“SFC”) shall be amended by insertion of the following paragraph under the section “Investmentpolicy and objectives”:“The compartment may enter into securities lending agreements in order to increase its capital or its revenueor to reduce its costs or risks.”The Annex to the Prospectus of all sub-funds of the Fund authorised by the SFC shall be amended by insertionof the following paragraph immediately preceding the section “Risk management method”:“As these are securities lending agreements, if the borrower (i.e. the counterparty) of securities loaned by thecompartment defaults on payment, there is a risk of delayed recovery (which may limit the compartment’sability to meet its commitments) or risk of loss of rights on the guarantee held. This risk, however, is mitigatedby the solvency analysis of the borrower performed by the Pictet Group. The securities lending agreements arealso subject to the risk of conflict of interest between the Fund and another entity of the Pictet Group,including the Agent providing services related to the securities lending agreements.”4. Conversion of legal status of Pictet Funds (Mauritius) Limited and Pictet Asian Equities (Mauritius)LimitedFor PICTET– Emerging Markets and PICTET– Asian Equities Ex Japan, the Management Company may decidethat the portion of the compartments’ assets to be invested in India should be invested indirectly through thetwo following companies incorporated in Mauritius:• For PICTET– Emerging Markets, the portion of the sub-fund’s assets to be invested in India should beinvested indirectly through Pictet Funds (Mauritius) Limited (“PFML”), and• For PICTET– Asian Equities Ex Japan Markets, the portion of the sub-fund’s assets to be invested in Indiashould be invested indirectly through Pictet Asian Equities (Mauritius) Limited (“PAEML”).PFML and PAEML are incorporated in Mauritius and are wholly-controlled by the Fund. Following the changeof legal status of PFML and PAEML from “Collective Investment Schemes” and “Expert Funds” intoinvestment holding companies, the sections “Investment through Pictet Funds (Mauritius) Limited” and“Investment through Pictet Asian Equities (Mauritius) Limited” in the Annexes to the Prospectus inrespect of the two aforementioned sub-funds shall be amended as follows:“Investment through Pictet Funds (Mauritius) LimitedThe Management Company may decide that the portion of the compartment’s assets to be invested in Indiashould be invested indirectly through a company incorporated in Mauritius named Pictet Funds (Mauritius)Limited, which is wholly-controlled by the Fund and conducts its advising activity investment and advisoryactivities exclusively for the compartment (hereafter “PFML”) and in particular the advising advisory activitiesconcerning large volume redemptions of the compartment’s shares. Indirect investments are generally coveredby the double taxation agreement (DTA) in existence between India and Mauritius.To this end, the Management Company will use the portion of the compartment’s assets available forinvestment in India to acquire all the PFML shares which will thus be controlled entirely by the Fund. PFMLshares will be issued in registered form only.The exclusive purpose of PFML is to perform investment and advisory activities on behalf of the compartment.The PFML Board of Directors includes:Eric A VenpinJimmy Wong Yuen TienPascal ChauvauxLaurent RamseyChristoph SchweizerThe Board of Directors will at all times include at least two residents of Mauritius and a majority of directorswho are also directors of the Fund.PFML’s advisory activities for the compartment include providing regular information regarding theapplicability of the treaty between India and Mauritius as well as making investment recommendations for theIndian market. PFML also advises in cases of redemptions of the compartment’s shares greater than 20% ofthe net value in order to enable the manager to divest as necessary when faced with large volumes ofredemption requests.The financial statements of PFML will be audited by Deloitte S.A., which is the statutory auditor for the Fund,or by any other statutory auditor established in Mauritius that is an associate of the Fund’s statutory auditor.For the establishment of the compartment’s financial statements and semi-annual and annual reports, PFML’sfinancial results will be consolidated in the financial results of the compartment. Similarly, these reports willcontain a breakdown of the compartment’s portfolio in terms of the underlying securities held by PFML. Inaccordance with the investment restrictions contained in the prospectus, the underlying investments will betaken into consideration as if PFML did not exist.3
Page 1: www.pictetfunds.hkPictetHong Kong P
Page 6 and 7: PFML was initially incorporated on
Page 8 and 9: “PICTET- HIGH DIVIDEND SELECTIONT
Page 10 and 11: 6. Additional disclosures regarding
Page 12 and 13: Pictet Asset Management Holding S.A
Page 14 and 15: With effect from the 1st of July, 2
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Page 18 and 19: Use of Financial Derivative Instrum
Page 20 and 21: The Fund is entitled under certain
Page 22 and 23: The compartment’s investments are
Page 24 and 25: Issue of sharesOnly the following c
Page 26 and 27: If payment in full has not been rec
Page 28 and 29: • Quality of the counterparty’s
Page 30 and 31: ManagerPictet Asset Management LtdP
Page 32 and 33: The Fund will also comply with such
Page 34 and 35: Name ofcompartments andtype of shar
Page 44 and 45: Name of compartments Type of shares
Page 46 and 47: APPENDIX C - RISK FACTORS APPLICABL
Page 49: PICTETSociété d'investissement à
Page 53 and 54: Table of ContentsProspectus 47MANAG
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17. PICTET - GLOBAL EMERGING CURREN
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61. PICTET - INDIA INDEX 20662. PIC
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The distribution of this document i
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minimum subscription amount. The Bo
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Metropolitan West Asset Management
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Information for shareholdersThe Fun
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The Dilution Levy thus applied will
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compartment(s) or (iv) of a notice
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investors and for the compartments
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and/or other Undertakings for Colle
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8) The Fund may not invest more tha
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c) any other very liquid asset, con
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Annex 1: Fixed-income compartmentsT
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2. PICTET - USD GOVERNMENT BONDSInv
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3. PICTET - SHORT-TERM MONEY MARKET
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6. PICTET - EUR CORPORATE BONDSInve
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Manager: PAM LtdConsolidation curre
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8. PICTET - WORLD GOVERNMENT BONDSI
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9. PICTET - EUR HIGH YIELDInvestor
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PICTET - EUR HIGH YIELDType of shar
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Shares not yet issued that may be a
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Shares not yet issued that may be a
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PICTET - CHF BONDSType of share Act
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Initial subscription price: The net
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Frequency of NAV calculationEach Ba
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Investments in unlisted securities
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PICTET - EMERGING LOCAL CURRENCY DE
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Investors should be aware that the
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17. PICTET - GLOBAL EMERGING CURREN
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and falsified securities. There is
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PICTET - SHORT-TERM MONEY MARKET JP
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Swaps and Derivatives Association (
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20. PICTET - SOVEREIGN SHORT-TERM M
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21. PICTET - SOVEREIGN SHORT-TERM M
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22. PICTET - US HIGH YIELDInvestor
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PICTET - US HIGH YIELDType of share
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tion, conversion and/or redemption
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Expected leverage: 50%. Depending o
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25. PICTET - GLOBAL BONDS FUNDAMENT
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those applied in Western European c
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26. PICTET - EMERGING CORPORATE BON
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Payment value date for subscription
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Risk management method: Relative va
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PICTET - EMERGING LOCAL CURRENCY DE
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NAV are listed on markets that are
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PICTET - SMALL CAP EUROPEType of sh
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The exclusive purpose of PFML is to
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31. PICTET - EASTERN EUROPEInvestor
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32. PICTET - EUROPE INDEXInvestor t
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33. PICTET - USA INDEXInvestor type
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34. PICTET - EUROPEAN SUSTAINABLE E
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35. PICTET - JAPAN INDEXInvestor ty
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36. PICTET - PACIFIC EX JAPAN INDEX
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37. PICTET - DIGITAL COMMUNICATIONI
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38. PICTET - BIOTECHInvestor type p
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39. PICTET - PREMIUM BRANDSInvestor
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40. PICTET - WATERInvestor type pro
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41. PICTET - INDIAN EQUITIESInvesto
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j) Pictet Asset Management Ltd has
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PICTET - JAPANESE EQUITY OPPORTUNIT
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PAEML’s advisory activities for t
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44. PICTET - GREATER CHINAInvestor
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45. PICTET - JAPANESE EQUITY SELECT
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46. PICTET - GENERICSInvestor type
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47. PICTET - EMERGING MARKETS INDEX
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48. PICTET - EUROLAND INDEXInvestor
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49. PICTET - US EQUITY GROWTH SELEC
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50. PICTET - SECURITYInvestor type
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51. PICTET - CLEAN ENERGYInvestor t
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52. PICTET - RUSSIAN EQUITIESInvest
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PICTET - RUSSIAN EQUITIESType of sh
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Payment value date for subscription
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RedemptionBy 3:00 pm on the Banking
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Frequency of NAV calculationsEach b
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PICTET - US EQUITY VALUE SELECTIONT
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Frequency of NAV calculationEach ba
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ied forward to the next Banking Day
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ConversionThe most restrictive time
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RedemptionBy 12:00 noon one Banking
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Managers: PAM LtdConsolidation curr
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PICTET - EMERGING MARKETS HIGH DIVI
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Currency exchange risksThe compartm
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66. PICTET - QUALITY GLOBAL EQUITIE
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67. PICTET - QUALITY EUROPEAN EQUIT
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68. PICTET - GLOBAL MAJOR PLAYERSIn
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Annex 3: Balanced Compartments and
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70. PICTET - ABSOLUTE RETURN GLOBAL
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Type of shareIndexShare classes den
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SubscriptionBy 12:00 noon on the Ba
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PICTET - CONVERTIBLE BONDSType of s
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73. PICTET - GLOBAL FLEXIBLE ALLOCA
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Performance fee:The manager will re
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Risks linked to investments in othe
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For further information, please con
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Prospectus - April 2013 - Pictet Funds Hong Kong

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