1A member of the GAM group.

Dynamic Asset Allocation for Pensions Funds – Evolutions in Portfolio Management

Presentation by Giovanni LeonardoHead of Multi Asset Class Solutions

Swiss & Global Asset Management Zurich, Switzerland

Tel Aviv, 20 June 2011

2

Separation of Private Bank and Asset ManagementSplit of Julius Baer Holding into two listed companies as of 1 October 2009

Bank Julius Baer

Julius Baer Group Ltd. GAM Holding AG

Julius Baer Holding Ltd.

Source: Julius Baer

BAER.VX GAM.SW

3

GAM Holding AG Key financial information – segmental figures 2010

Swiss & GlobalAsset Management

AuM CHF 80.4 bn

Revenues CHF 217.1 m

Pre-tax profit CHF 99.8 m

Staff 279

GAM

AuM CHF 53.6 bn

Revenues CHF 470.3 m

Pre-tax profit CHF 146.2 m

Staff 757

GAM Holding AG(Consolidated)

AuM CHF 117.8 bn*

Revenues CHF 712.5 m

Pre-tax profit CHF 246.5 m

Staff 1,052

Source: GAM Holding AG, Annual Report 2010

* Excludes CHF 16.2 billion of Julius Baer branded funds distributed by Swiss & Global Asset Management and sub-advised by GAM.

4

Swiss & Global Asset ManagementAll units of GAM Holding AG have a unique strategic position

Source: Swiss & Global Asset Management

Alternative• Single & multi-manager• Single & multi-strategy

Long-only• Global/regional equities• Single country equities• Global fixed income

Equities• Active core• Emerging markets• Satellites/themesFixed Income• Active core• Absolute return• SatellitesMulti Asset Class Solutions• Asset allocation • Unleveraged absolute returnAlternative assets• Commodities

5

Swiss & Global Asset Management Lean and efficient functional structure

Source: Swiss & Global Asset Management

CEO Swiss & Global Asset Management

David M. Solo

Sales & DistributionMichele Porro

Products & ServicesMartin Jufer

Wholesale Switzerland & InternationalB. Egger

Institutional Sales CH & InternationalSt. Schmidweber

Sales & Distribution GermanyA. Gerstadt

Sales & Distribution ItalyF. La Scala

Product SpecialistsD. Kubisch

Sales & Management ServicesM. Rust

Marketing & CommunicationsM. Rust

Private Labelling EuropeTh.van Ditzhuyzen

Private Labelling CaymanP. Nathan

EquitiesS. Huang Sun

Fixed IncomeE. Puntillo

Currencies & CommoditiesJ. Corbach

Multi Asset Class SolutionsG. Leonardo

Investment ManagementStefan Angele

OperationsR. Aeberhard

Luxembourg Fund NetworkE. Hamlescher

Fund Admin CaymanCh. Godfray

Operations ItalyR. Morosin

Business TechnologyP. Arnold

Legal & ComplianceTh. von Ballmoos

Finance & ControllingM. Röthlisberger

Product Management & DevelopmentR. Schneider

Risk ManagementD. Koller

Operations FrankfurtTh. Ott

Human ResourcesH. Nohl

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Total AuM: CHF 80.4 bn

Swiss & Global Asset ManagementAuM - segmentation by clients & products as per 31 December 2010

Source: GAM Holding AG, Annual Report 2010

By clientsyear ended2010 2009

By productsyear ended

2010 2009

Julius Baer private clients 7% 7%

Institutional clients 14% 16%

Wholesale fund distr. 29% 23%

Private label funds (PLF) 51% 54%

51%

7%

14%

29%

51%

12%

7%7%

22%

Equity 7% 10%

Commodities 7% 4%Fixed income 22% 21%

Absolute return/hedge 12% 11%

Private label funds (PLF) 51% 54%

57.263.3

73.078.3 80.4

0

20

40

60

80

100

Dec2008

Jun2009

Dec2009

Jun2010

Dec2010

7

R-Evolution in investment approaches

8

Standard approach Required return defines the Strategic Asset Allocation

Client needsCoverage ratio ?Required return ?

Risk aversion?

Optimal allocation

Strategic allocation

Benchmark definition

Manager selection

Multi Asset Mandate

Vol.5.0%

Vol.10.0%

Vol.12.5%

Vol.15.0%

Vol.20.0%

Cash 0.4 0.0 0.0 0.0 0.0

Money Market 0.4 0.0 0.0 0.0 0.0

Fixed Income 85.7 59.7 46.6 28.6 19.3

Government Bonds CH 15.9 4.1 1.4 0.5 0.2

Government Bonds World 18.5 2.5 0.9 0.4 0.2

Corporate Bonds (Inv. Grade) 31.7 22.7 11.7 8.0 4.6

Corporate Bonds (High Yield) 6.7 8.1 7.6 6.3 4.9

Emerging Markets Bonds 3.5 14.6 20.0 9.2 6.9

Emerging Markets Bonds (LOC CCY) 9.5 7.7 5.0 4.1 2.6

Equity 13.9 40.3 53.4 71.4 80.7

Equity Switzerland 8.0 18.2 22.1 35.0 14.7

Equity World 4.8 14.9 19.4 12.5 7.9

Equity Emerging Markets 1.2 7.3 11.8 23.9 58.1

Expected Returns 3.4 4.5 5.0 5.4 6.1

Expected Volatilities 5.0 10.0 12.5 15.0 20.0

Source: Swiss & Global

Single Asset Class Mandate

9

What should you expect from this process?Symmetric return profile designed for the long run

 payoff  for a classical benchmark-driven mandate

Source: Swiss & Global

Performance with PM levyPerformance allocation

Client needs

10

Satellites

Objective-driven portfolio managementEvolution of investment concepts

Source: Citi / Principal / CREATE Survey 2010

1990“Relative Return”

Liquidity

Bonds

Equity

“Core” InvestmentStructural Portfolio

2000“Core-Satellite”

2010“Total Return”

Opportunities

Dynamic Overlay

Total Return

Strategic Asset Allocation

Dynamic Asset Allocation

Commodities, EMMA

Hedge Funds, PE, …

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Investing across the business cycle

Exemplary position

EQUITIES

FIXED INCOME

COMMODITIES

SLOWDOWN RECESSIONRECOVERY BOOM

HEDGE FUNDS

Small Caps Value Stocks High Beta Stocks Early Cycle Sectors

Small Caps High Beta Stocks Late Cycle Sectors

Large Caps Growth Stocks Low Beta Stocks Defensive Sectors

Value Stocks Low Beta Stocks Rate Sensitive

Sectors

High Yield Bonds Municipals

TIPS Short-Term

Treasuries

Long-TermTreasuries

Corporate Bonds

Industrial Metals Precious Metals

Industrial Metals Energy

Livestock Energy

Precious Metals Agriculture

Equity Hedge Event Credit Credit long biased

Fixed IncomeArbitrage

Global Macro

Distressed Global Macro

EARLY CYCLE MID CYCLE LATE CYCLE

Equity Hedge long

biased… Event Merger Arbitrage

Source: Swiss & Global Asset Management

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Using industry-leading risk management tools, our independent risk controlling specialists daily monitor the overall risk as well as compliance with the investment guidelines, providing visibility on each single position of the portfolio.

Our portfolio management teams implement the defined target structure for specific portfolios in a cost efficient way. Core holdings reflect the general market views, derivatives are used to achieve a timely and cost effective overlay where allowed.

Using appropriate portfolio-specific processes, our investment teams transform their views into consistent investment decisions, which are based on a portfolio-specific investment universe and restriction sets, risk-budget contributions, etc.

Specialised investment teams formulate clear views in their specific area of expertise. They reflect a systematic assessment of opportunities and risks in their investment universe from a pure investors’ point of view ("buy side").

1 Market assessment

2 Investment decision

3 Portfolioconstruction

4 Risk management 5

Qua

lity

man

agem

ent

Source: Swiss & Global Asset Management

Investment ManagementInvestment process aligns decision making, implementation and accountability

13

Fixed IncomeTeam

EquityTeam

FX & Com.Team

Absolutevaluation

Sp

ecia

lists

MACS

Relativevaluation

Portfolio allocation

Risk budgeting

TAA

Fundamental data

Valuation Technical & Quantitative

Source: Swiss & Global Asset Management

MACS solves the client puzzle One product combines all the capabilities of Swiss & Global

Eco

no

mic

s

External Research

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Multi asset products address basic client needs

Inflation / Deflation: How do I position my wealth?

How can I protect my capital?

How can I participate in the mega trends of the next decade?

Where are we in the cycle?

Are Chinese stocks expensive?

Multi asset products

Cash EquitiesBonds

Commodities

Real Estate

15

Julius Baer Asset Allocation Funds by combining our products and other asset classes

Directional Strategies

Quantitative Strategies

Absolut Return Strategies

Thematic Strategies

Dynamic Asset Allocation Overlay

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Swiss & Global Asset Management Our fixed income product offering

Source: Swiss & Global Asset Management

Absolute Return SatellitesActive core

JB CF EuroJB CF £ SterlingJB BF EuroJB BF Euro Government

JB CF DollarJB BF DollarJB BF Dollar Medium Term

JB CF Swiss Franc

JB (CH) Helvetbär*JB BF Swiss Franc

JB BF Global High Yield

JB BF ABS

JB BF Absolute Return Defender

JB BF Absolute Return

JB BF Absolute Return Emerging

JB BF Emerging–EUR

JB BF Emerging–USD

JB BF Absolute Return Plus

CH

Europe

NorthAmerica

JB BF Local Emerging

JB BF Inflation Linked-EUR

GlobalJB BF Total Return

EmergingMarkets

HigherYielding

Hybrid

JB BF Credit Opportunities

JB BF Global Convert

JB BF Inflation Linked-USD

Swiss & Global Asset ManagementAssociated or external asset manager

JB BF EM Inflation Linked

* registered in Switzerland only

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Swiss & Global Asset Management Our equities and alternatives offering

Source: Swiss & Global Asset Management

Emerging MarketsActive core Satellites / Themes

Associated or external asset managerSwiss & Global Asset Management

JB EF Euro Large Cap

JB EF German Value

JB EF Europe

JB EF Europe Growth

JB EF Europe Leading

JB EF US Value

JB EF Japan

JB EF Global

JB EF SwissJB EF Swiss Small&Mid Cap

JB EF Europe Small&Mid Cap

JB EF Asia

JB EF Global Selection

JB EF Energy Transition

JB EF Luxury Brands

JB EF Biotech

Commo-dities

Energy

Infra-structure

Life Science

Other

CH

Europe

USA

Asia

Global

JB Commodity

JB (CH) Physical Gold*

JB (CH) Physical Silver*

JB (CH) Physical Platinum*

JB (CH) Physical Palladium*

JB (CH) Swiss Sustainable*

JB EF Euroland Value

JB EF Chindonesia

JB EF Health Opportunities

JB EF Absolute Return

JB EF US Leading

JB EF Special Value

JB EF Agriculture

JB EF Natural Resources

JB EF Infrastructure

JB EF Global Emerging Mrkts.

JB EF Central Europe

JB EF Black Sea

JB EF Northern Africa

JB EF Russia

* Registered in Switzerland only

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Important legal information This document is destined exclusively for internal use by intermediaries appointed by Swiss & Global Asset Management and/or institutional or qualified investors and shall not be passed on to third parties. Particularly, this document shall not be used as advertising material for public distribution or any other kind of public offering of the Julius Baer Funds, their sub-funds or share categories. The responsibility for the further use of fund descriptions contained in this document lies solely with the intermediary.

The information in this document constitutes neither an offer nor investment advice. It is given for information purposes only. No liability is assumed for the accuracy and completeness of the information. Opinions and assessments contained in this document may change and reflect the point of view of Swiss & Global Asset Management in the current economic environment.

Investments should only be made after a thorough reading of the current prospectus and/or the fund regulations, the current simplified prospectus, the articles of association, and the current annual and semi-annual reports, as well as after consulting an independent finance and tax specialist. The mentioned documents can be obtained in hard copy and free of charge by calling [+41 58 426 60 00] or from the addresses indicated below. Swiss & Global Asset Management is not a member of the Julius Baer Group.

The value of the units and the return they generate can go down as well as up. They both are affected by market volatility and by fluctuations in exchange rates. Swiss & Global Asset Management does not assume any liability for possible losses. The performance of past values and returns is no indicator of their current or future development. The performance of values and returns does not include the fees and costs which may be charged when buying, selling and/or switching units. The breakdown into sectors, countries and currencies and their respective positions as well as possibly indicated benchmarks are subject to change at any time in line with the investment policy determined in the prospectus.

The range of Julius Baer investment funds domiciled in Luxembourg is, as a general rule, registered for public offering in Luxembourg, in Switzerland, in Germany and in Austria. However, due to the different registration proceedings in the various countries, no guarantee can be given that each fund, sub-fund or share category is or will be registered in every jurisdiction and at the same time. For an up-to-date registration list, please refer to www.jbfundnet.com. Please also note the country-specific particularities indicated below. In any jurisdiction where a fund, sub-fund or share category is not registered for public offering and/or public distribution, the sale of units is only possible in the course of private placement or institutional investments, and in compliance with the applicable local regulation. Particularly, the Julius Baer Funds are not registered and, therefore, may not be offered for sale or be sold in the United States of America and its dependencies.

Particularities regarding Switzerland: As far as EU-harmonised Julius Baer investment funds domiciled in Luxembourg described herein are admitted for public offering and distribution in Switzerland: Representative in Switzerland is Swiss & Global Asset Management Ltd., Hohlstrasse 602, P.O. Box, CH-8010 Zurich; Paying Agent in Switzerland is Bank Julius Baer & Co. Ltd., Bahnhofstrasse 36, Postfach, CH-8010 Zurich.

Particularities regarding Israel: No action has been or will be taken in Israel that would permit an offering of the products or a distribution of this marketing document to the public in Israel. In particular, the marketing document has not been reviewed or approved by the Israeli Security Authority. Accordingly, this marketing document may be used to offer or sell any products directly or indirectly only to investors of the type listed in the First Supplement to the Israeli Securities Law, 1968, and for that purpose only. This marketing document may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been sent. Any offeree who purchases the product is purchasing it according to its own understanding, for its own benefit and on its own account and with no aim or intention of distributing or offering it to other parties. Any offeree who purchases the product has such knowledge, expertise, and experience in financial and business matters as to be capable of evaluating the risks and merits of an investment in the product. Nothing in this marketing document should be considered Investment Advice or Investment Marketing, as defined in the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 1995.

Copyright © 2011 Swiss & Global Asset Management Ltd. - all rights reserved

"Wir setzen global auf Schweizer Grundwerte"

"Living Swiss core values globally"

"Nous misons sur des valeurs fondamentales suisses à l'échelle mondiale"

"Valori svizzeri, sguardo globale"

The exclusive manager of Julius Baer Funds.A member of the GAM group.