Marketing MaterialSwiss Edition

Finding hidden gems in emerging marketsUBS (Lux) Equity SICAV – Global Emerging Markets Opportunity (USD)

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339

506 455

306

102 78

348

96

EM consumers are upping their spendingAs incomes and the number of better-off households rise in EM, consumers are trading up for better quality brands and premium goods

Growing with a growth market Demographics and urbanization are key drivers of emerging markets (EM) growth …

Source: United Nations, World Urbanization Prospects, December 2018.

By 2050 EM represent 100% of working age population growthAs developed markets (DM) aged, working age population in EM massively expanded

EM urbanized rapidlyUrbanization brought workers into urban labor markets, boosting employment in the formal sector, and creating a large, urban consumer base

Leading to the emergence of a growing middle class and increasing consumption habits …

Middle Class in EM has grown significantlySectors, like consumer, financials, and IT, have strong growth prospects over the coming years, particularly as the emerging markets middle class increasingly shift online

Source: European Environmental Agency (Khara, H. 2010. The emerging middle class in developing countries, p. 29, OECD Development Centre, Working Paper No. 285. OECD), Brookings Institution, HSBC calculations.

Source: Carsalesbase, as of December 2018. Car sales statistics from China only include domestic production and exclude imported models.

As a result trading within EM as well as EM share of world GDP increases

Source: UBS Asset Management, FactSet, 29 September 2018. Source: IMF, MSCI, March 2019.

EM became less dependent on exports to DMEM are less dependent on exports to developed markets overseas and are producing more for either their own domestic markets, or to other EM

EM share of global economy increased but this growth is currently not represented in global indicesInvestors need to up their allocations to EM in order to fully capture the expected growth coming in the next five to ten years

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199525%

200528%

201540%

201844% 2000

2019

19980.9%

2018

EM Share of world economy MSCI EM weight in MSCI ACWI

1.24 bn in 2016

expect to grow by

+986 m between 2017 and 2023

Between 2018 and 2050,,

1.1 bn people

will move to EM cities

0

600

1200

1800

20182017201620152014201320122011201020092008200720060

600

1200

1800

2018201720162015201420132012201120102009200820072006

Audi BMW Mercedes Benz

Thou

sand

s

Sales of premium brand cars (Audi, BMW and Mercedes-Benz) saw increased sales in China

VietnamBrazilEgypt

ThailandIran

PakistanMexico

India China Indonesia

30.2%

45%

12%

Between 2018 and 2050, EM will see its working

population grow by

1.23 bn while DM will see its working age population fall by 68.4 m.

Source: United Nations, Morgan Stanley Research. Projections are UN Estimates. As at end of December 2017.

• Existing middle class (2016) • Additional middle class (2023)

Developed markets

Emerging markets

The best of both sides – high conviction and diversified

Opportunities – Very active concentrated portfolio of top conviction stock ideas

– High flexibility to take focused views on significant opportunities

– Access to proven investment specialists and portfolio managers who have years of experience of investing in emerging markets

– Access to a network of equity analysts around the globe – Investors benefit from UBS Asset Management’s global investment platform

Risks – Equities may be subject to high fluctuations in value – An investment horizon of at least five years and corresponding risk tolerance and capacity are required

– We pursue an active management style, performance can deviate from that of its reference index

– All investments are subject to market fluctuations – Risks can significantly increase under unusual market conditions

– The fund can use derivatives, which may result in additional risks (particularly counterparty risk)

Selecting long term stock winners in each industry

For illustrative purposes only. Source: UBS Asset Management

UBS Global Emerging Markets

Opportunity (USD)

FocusedHighly selective and we strive to invest only in quality companies at reasonable valuations

High conviction25-35 best ideas across countries, sectors, and regions to achieve true diversification

Boots on the groundCompany visits, speaking with vendors, suppliers, customers and management, and attending industry trade shows

DiversifiedAcademic studies indicates >90% diversification achieved with only 20 stocks

ESG are integral partEnvironmental, social and governance (ESG) factors are integral to our search for “gems”

Active approachVery actively managed fund which portfolio composition can deviate substantially from its reference indexLow turnover

Typically 20-50% p.a.

Portfolio construction – Typically, the top 1 – 4 stocks eligible for inclusion in portfolio

– Assessment of macro warning flags, and country/sector considerations

Peer review and ranking Rank stocks on overall attractiveness, including quality assessment and valuation, within their own universe

123 1 14 1 1 1 2 2 15 2 2 2 3 3 2 16 3 3 3 4 4 3 2 1 1

High 123 1 14 1 1 1 2 2 15 2 2 2 3 3 2 16 3 3 3 4 4 3 2 1 1

7 4 4 4 5 5 4 3 2 1 28 5 5 5 6 6 5 4 3 2 3

6 6 6 7 6 5 4 3 47 7 7 8 6 4

Low 8 8 8Asia –

FinancialsChina –Internet/

ecommerce& Edu. Svc.

Asia –Tech.

Hardware

Asia –Consumers,

Comm.and IT Svcs

Asia –Energy &Materials

ex-Asia –Financials

ex-Asia –Energy &Materials

Asia –Healthcare,Autos andIndustrials

ex-Asia –Comm.Svcs.

ex-Asia –Consumers

Asia –Real

Estate

Ove

rall

attr

acti

ven

ess/

Ran

king

Buy/Hold portfolio

Characteristics and fees

Fund name UBS (Lux) Equity SICAV – Global Emerging Markets Opportunity (USD)

Fund currency USD; other currencies: EUR hedged, SGD hedged, HKD hedged

Portfolio management UBS Asset Management

Custodian bank UBS Europe SE, Luxembourg Branch

Financial year 1 June to 31 May

Subscriptions/redemptions daily

Distribution acc-share classes: none, (m)dist-share classes: yes

Share class P-acc (USD) Q-acc (USD) P-acc (EUR hedged) P-acc (SGD hedged) P-4%-mdist (HKD hedged)

Launch date 25.09.2008 09.03.2018 15.09.2015 10.11.2017 09.02.2018

ISIN LU0328353924 LU0399011534 LU1676115329 LU1717043241 LU1769817179

Management fee p.a. 1.54% 0.78% 1.54% 1.54% 1.54%

TER p.a. * 2.03% 1.07% 2.03% 2.0% 2.09%

Share class P-4%-mdist (USD) Q-dist (USD) Q-acc (EUR hedged) P-4%-mdist (SGD hedged)

Launch date 09.02.2018 11.07.2017 10.11.2017 27.07.2018

ISIN LU1769817096 LU0399011450 LU1691467994 LU1815428534

Management fee p.a. 1.54% 0.78% 0.78% 1.54%

TER p.a. * 2.09% 1.06% 1.05% n.a.

*Total expense ratio p.a. (as at 31.05.2018)

For further information please contact your client advisor. Investors should not base their investment decisions on this marketing material alone.

For marketing and information purposes by UBS. UBS funds under Luxembourg law. Before investing in a product please read the latest prospectus carefully and thoroughly. The information and opinions contained in this document have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith, but is not guaranteed as being accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in the document. UBS AG and / or other members of the UBS Group may have a position in and may make a purchase and / or sale of any of the securities or other financial instruments mentioned in this document. Units of UBS funds mentioned herein may not be eligible for sale in all jurisdictions or to certain categories of investors and may not be offered, sold or delivered in the United States. The information mentioned herein is not intended to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. 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. Commissions and costs have a negative impact on performance. If the currency of a financial product or financial service is different from your reference currency, the return can increase or decrease as a result of currency fluctuations. This information pays no regard to the specific or future investment objectives, financial or tax situation or particular needs of any specific recipient. The details and opinions contained in this document are provided by UBS without any guarantee or warranty and are for the recipient’s personal use and information purposes only. This document may not be reproduced, redistributed or republished for any purpose without the written permission of UBS AG. Source for all data and charts (if not indicated otherwise): UBS Asset Management. This document contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to our future business development. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. Switzerland: Representative in Switzerland for UBS funds established under foreign law: UBS Fund Management (Switzerland) AG, P.O. Box, CH-4002 Basel. Paying agent: UBS Switzerland AG, Bahnhofstrasse 45, CH-8001 Zurich. Prospectuses, simplified prospectuses or key investor information, the articles of association or the management regulations as well as annual and semi-annual reports of UBS funds are available in a language required by the local applicable law free of charge from UBS AG, P.O. Box, CH-4002 Basel or from UBS Fund Management (Switzerland) AG, P.O. Box, CH-4002 Basel. © UBS 2019. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved. May 2019

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Gross Domestic Product (GDP): Broad measurement of a nation’s overall economic activity. GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.

ESG: Environmental, social and governance (ESG) refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business. These criteria help to better deter-mine the future financial performance of companies (return and risk).

MSCI ACWI: Market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. The MSCI ACWI is maintained by Morgan Stanley Capital International (MSCI) and is comprised of stocks from 23 developed countries and 24 emerging markets.

MSCI EM: Consists of 24 countries representing 10% of world market capitalization. The Index is available for a number of regions, market segments/sizes and covers approximately 85% of the free float-adjusted market capitalization in each of the 24 countries.

Risk: Exposure to damage or financial loss, e.g. a fall in the price of a security, or insolvency on the part of a debtor.

More explanations of financial terms can be found at ubs.com/glossary

Glossary