Pictet Funds (LUX) (formerly Pictet Fixed Income Fund)

Transcription

1 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) Luxembourg Open-ended Investment Company (SICAV) Audited annual report as at December 31, 2006

2

3 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) Luxembourg Open-ended Investment Company (SICAV) Audited annual report as at December 31,

4 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) Audited annual report as at December 31, 2006 No subscriptions can be received on the basis of this report. Subscriptions are only valid if made on the basis of the current prospectus accompanied by the latest annual and most recent semi-annual report, if published thereafter. 2

5 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TABLE OF CONTENTS ORGANISATION OF THE SICAV 8 GENERAL INFORMATION 10 FOREIGN DISTRIBUTION 11 MANAGEMENT REPORT 15 INDEPENDENT AUDITOR S REPORT 78 FINANCIAL STATEMENTS STATEMENT OF NET ASSETS 80 STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS 94 NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) 107 Sub-fund: Pictet Funds (LUX) - EUR Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 122 Sub-fund: Pictet Funds (LUX) USD Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 126 Sub-fund: Pictet Funds (LUX) - CHF Liquidity - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 131 Sub-fund: Pictet Funds (LUX) - USD Liquidity - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 135 Sub-fund: Pictet Funds (LUX) - EUR Liquidity - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 140 Sub-fund: Pictet Funds (LUX) - EUR Corporate Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 144 Sub-fund: Pictet Funds (LUX) - Global Emerging Debt - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 149 Sub-fund: Pictet Funds (LUX) - Global Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 153 3

6 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TABLE OF CONTENTS Sub-fund: Pictet Funds (LUX) - EUR High Yield - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 158 Sub-fund: Pictet Funds (LUX) - EUR Short Mid-Term Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 162 Sub-fund: Pictet Funds (LUX) - USD Short Mid-Term Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 165 Sub-fund: Pictet Funds (LUX) - EUR Turbo Income - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 172 Sub-fund: Pictet Funds (LUX) - CHF Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 180 Sub-fund: Pictet Funds (LUX) - EUR Government Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 183 Sub-fund: Pictet Funds (LUX) - EUR Inflation Linked Bonds - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 185 Sub-fund: Pictet Funds (LUX) - EUR Asset Backed Securities - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 188 Sub-fund: Pictet Funds (LUX) - Emerging Local Currency Debt - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 191 Sub-fund: Pictet Funds (LUX) - Asian Local Currency Debt - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 194 Sub-fund: Pictet Funds (LUX) - European Equity Selection - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 198 Sub-fund: Pictet Funds (LUX) - Small Cap Europe - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 203 Sub-fund: Pictet Funds (LUX) - Emerging Markets - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 209 4

7 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TABLE OF CONTENTS Sub-fund: Pictet Funds (LUX) - Eastern Europe - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 213 Sub-fund: Pictet Funds (LUX) - Europe Index - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 228 Sub-fund: Pictet Funds (LUX) - USA Index - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 240 Sub-fund: Pictet Funds (LUX) - European Sustainable Equities - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 246 Sub-fund: Pictet Funds (LUX) - Japan Index - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 255 Sub-fund: Pictet Funds (LUX) - Pacific (Ex Japan) Index - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 261 Sub-fund: Pictet Funds (LUX) - Telecom - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 265 Sub-fund: Pictet Funds (LUX) - Biotech - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 268 Sub-fund: Pictet Funds (LUX) - Premium Brands - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 271 Sub-fund: Pictet Funds (LUX) - Water - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 275 Sub-fund: Pictet Funds (LUX) - Indian Equities - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 278 Sub-fund: Pictet Funds (LUX) - Japanese Equities - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 283 Sub-fund: Pictet Funds (LUX) - US Equities - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 286 5

8 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TABLE OF CONTENTS Sub-fund: Pictet Funds (LUX) - Asian Equities (Ex Japan) - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 292 Sub-fund: Pictet Funds (LUX) - Global Equity Selection - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 296 Sub-fund: Pictet Funds (LUX) - Continental European Equities - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 299 Sub-fund: Pictet Funds (LUX) - Greater China - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 303 Sub-fund: Pictet Funds (LUX) - Japanese Equity Selection - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 306 Sub-fund: Pictet Funds (LUX) - Emerging Markets Index - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 318 Sub-fund: Pictet Funds (LUX) - Generics - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 321 Sub-fund: Pictet Funds (LUX) - Japanese Mid-Small Cap - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 325 Sub-fund: Pictet Funds (LUX) - Emerging Markets Large Cap - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 330 Sub-fund: Pictet Funds (LUX) - Absolute Return Global Diversified - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 346 Sub-fund: Pictet Funds (LUX) - Euroland Index - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 355 Sub-fund: Pictet Funds (LUX) - US Equity Selection - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 358 Sub-fund: Pictet Funds (LUX) - Security - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 361 6

9 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TABLE OF CONTENTS Sub-fund: Pictet Funds (LUX) - Quantam - Statement of Investments and Other Net Assets Geographical and Industrial Classification of Investments 372 NOTES TO THE FINANCIAL STATEMENTS 373 TER (TOTAL EXPENSE RATIO) 405 PTR (PORTFOLIO TURNOVER RATIO) 415 7

10 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) ORGANISATION OF THE SICAV Registered Office 3, boulevard Royal, L-2449 Luxembourg Board of Directors Chairman Directors Mr Pierre ETIENNE, Senior Vice President, Pictet & Cie (Europe) S.A., Luxembourg Mr Pierre-Alain EGGLY, Senior Vice President, Pictet & Cie (Europe) S.A., Luxembourg Mrs Michèle BERGER, Manager, Pictet Funds (Europe) S.A., Luxembourg Mr Frédéric FASEL, Senior Vice President, Pictet & Cie (Europe) S.A., Luxembourg Mr Yves MARTIGNIER, Senior Vice President, Pictet & Cie, Geneva Mr Laurent RAMSEY, Managing Director, Pictet Funds S.A., Geneva Management company Pictet Funds (Europe) S.A., 3, boulevard Royal, L-2449 Luxembourg Board of Directors of the Management Company Chairman Directors Mr Pierre ETIENNE, Senior Vice President, Pictet & Cie (Europe) S.A., Luxembourg Mr Frédéric FASEL, Senior Vice President, Pictet & Cie (Europe) S.A., Luxembourg Mr Christian GELLERSTAD, Managing Director, Pictet & Cie (Europe) S.A. and Member of the Executive Committee of Pictet Funds (Europe) S.A. Mr Yves MARTIGNIER, Senior Vice President, Pictet & Cie, Geneva Mr Laurent RAMSEY, Managing Director, Pictet Funds S.A., Geneva Mr Christophe SCHWEIZER, Senior Vice President, Pictet Funds S.A., Geneva Managers of the Management Company Custodian and Financial Services Mrs Michèle BERGER Mr Laurent RAMSEY Pictet & Cie (Europe) S.A., 1, boulevard Royal, L-2449 Luxembourg 8

11 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) ORGANISATION OF THE SICAV Investment Advisors MM. Pictet & Cie, Conseillers en Investissement, 60, route des Acacias, CH-1211 Geneva 73 (new address), Switzerland Pictet Advisory Services (Overseas) Ltd. Bayside Executive Park, Building N 1, West Bay Street and Blake Road P.O. Box N-4837 Nassau, Bahamas 5AM Partners LLC, 3000 Sand Hill Road, Building 1 Suite 285, Menlo Park, CA 94025, United States Investment Managers Pictet & Cie, Genève, 60, route des Acacias, CH-1211 Geneva 73 (new address) Pictet Asset Management S.A., 60, route des Acacias, CH-1211 Geneva 73 (new address) Pictet Asset Management Limited, Moor House, Level 11, 120 London Wall UK - London EC2Y 5ET Banque Pictet & Cie (Asia) Ltd, Singapore, 80 Raffles Place UOB Plaza, Singapore Pictet Asset Management (Japan) Ltd., Kishimoto Building 7F, Marunouchi, Chiyida-hu, Tokyo, Japan Sectoral Asset Management Inc., 1000 Sherbrooke Street, Montréal West, CN H3A 3G4 Québec, Canada Waddell & Reed Investment Management Company, 6300 Lamar, Shawnee Mission., KANSAS 66202, U.S.A Auditor of the Fund and the Management Company Legal Advisor Deloitte SA, 560, rue de Neudorf, L-2220 Luxembourg Elvinger, Hoss & Prussen, 2, Place Winston Churchill, L-1340 Luxembourg 9

12 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) GENERAL INFORMATION The audited annual reports and unaudited semi-annual reports are available free of charge to shareholders at the registered office of the SICAV, from the Custodian and from any Paying Agent or Representative in the countries in which the SICAV is marketed i.e.: Germany, Austria, Belgium (only for share classes authorised by the Belgian Banking, Finance and Insurance Commission), Chile, Spain (only for share classes authorised for sale by the Spanish Securities Market Commission), Finland, France, Italy (only for share classes authorised by the Italian National Stock Exchange Supervisory Commission and the Banca d Italia), Liechtenstein, the Netherlands, Peru, Portugal, the United Kingdom, Sweden, Switzerland, Singapore and Turkey. All other published financial information, such as the net asset value per share of the SICAV and details of any suspension of the calculation of the net asset value, are available to the public at the registered office of the SICAV and from the Custodian. A detailed schedule of changes in the investments for all the sub-funds for the year ending December 31, 2006 is available free of charge upon request at the registered office of the SICAV or from the representative in each country in which the SICAV is authorised for distribution. 10

13 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) FOREIGN DISTRIBUTION Marketing/ Distribution in Switzerland Distribution in Switzerland The Fund has been authorised by the Swiss Federal Banking Commission as a foreign investment fund pursuant to article 45 of the Federal Law of 18 March 1994 on Investment Funds. Swiss Representative and Paying Agent (only for sub-funds authorised for sale in Switzerland by the Swiss Federal Banking Commission) Pictet Funds S.A., with registered office at 60, route des Acacias, CH-1211 Geneva 73 (new address), has been authorised by the Swiss Federal Banking Commission as Swiss Representative of the Fund for the marketing and distribution of its shares in or from Switzerland pursuant to article 45 of the Federal Law of 18 March 1994 on Investment Funds. Pictet & Cie, with registered office at 60, route des Acacias, CH-1211 Geneva 73 (new address), has been appointed as Paying Agent for the shares of the Fund distributed in Switzerland. The Fund s prospectus, simplified prospectus, Articles of Incorporation, annual and semi-annual reports as well as the list of purchases and sales carried out by the Fund are available free of charge from the registered office of the Swiss Representative. Publications Information regarding the Fund is published in La Feuille Officielle Suisse du Commerce and Le Temps. Subscription and redemption prices will be published together at the time of issue or redemption and at least twice per month. The net asset value followed by the note plus fees" will be published at least twice per month in Le Temps. The French version of the prospectus and the simplified prospectus will take precedence over any other version in the legal relationship between the Fund and the investors in Switzerland. Fees and expenses payable by the Fund In respect of its distribution in Switzerland, the Fund may grant discounts to the following institutional investors holding shares of the Fund for the account of third-party economic beneficiaries: - life insurance companies - pension funds and other savings institutions - investment foundations - Swiss fund managers - foreign fund managers - investment companies In respect of its distribution in Switzerland, the Fund may also pay trailer fees to the following distributors and distribution partners: - authorised and exempted distributors; - distribution partners investing in shares of the Fund exclusively on behalf of institutional investors managing their cash positions on a professional basis; - distribution partners investing in shares of the Fund exclusively on behalf of their clients on the basis of a discretionary mandate. 11

14 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) FOREIGN DISTRIBUTION Place of execution and jurisdiction The place of execution and jurisdiction in relation to shares of the Fund offered or distributed in or from Switzerland is the registered office of the Swiss Representative. Additional information for German investors Paying agent and representative: B. Metzler seel. Sohn & Co., KGaA Grosse Gallusstrasse 18 D Frankfurt am Main Bank B. Metzler seel. Sohn & Co., KGaA, Grosse Gallusstrasse 18, D-60311, Frankfurt am Main, assumes the role of Paying and Information Agent in the Federal Republic of Germany. Applications for the redemption and conversion of shares may be filed with the Paying and Information Agent in Germany. At the request of shareholders, the proceeds of redemptions, any dividends as well as other payments may be paid to them via the Paying Agent and the information bureau in Germany (by credit transfer, cheque or cash deposit). The current full and simplified prospectuses, the contractual conditions of the Fund, the annual and semi-annual reports, the issue, redemption and conversion prices of shares as well as any other information intended for shareholders are available free of charge from the Paying and Information Agent in Germany. It is also possible to obtain the other documents mentioned in the section "Documents available for inspection" of the latest version of the prospectus from the Paying and Information Agent. In addition, the issue and redemption prices shall be published each trading day in the Börsen- Zeitung. Representative in the Netherlands KAS BANK N.V., P.O. Box 24001, NL-1000 DB Amsterdam, has been appointed as the SICAV s Information Agent in the Netherlands. The latest version of the full prospectus, the simplified prospectus and the annual and semi-annual reports are available free of charge from the Information Agent in Amsterdam, where the other available documents may also be consulted. The net asset value per share of each sub-fund is published each NAV calculation day on the Pictet Funds website: Pictet & Cie (Europe) S.A. shall act as Paying Agent for the SICAV. Applications for the subscription and redemption of shares may be sent to Pictet & Cie (Europe) S.A., 1 boulevard Royal, BP 687, L-2016 Luxembourg, Tel. (+352) , Fax (+352) Please refer to the chapters of the current prospectus entitled Issues, Redemptions and Conversions for more details of the subscription and redemption procedures. 12

15 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) FOREIGN DISTRIBUTION Information Agent in Austria Paying Agent for the shares of the SICAV sold to the public: Raiffeisen Zentralbank Österreich Aktiengesellschaft Am Stadtpark 9 A-1030 Vienna Applications for the redemption of shares of the SICAV may be sent to the Paying Agent in Austria. In collaboration with the Custodian Bank, the Paying Agent shall also be responsible for the processing of redemptions and the payment of redemption proceeds. The latest version of the prospectus and of the Addendum specifically intended for Austrian investors, the simplified prospectuses, the annual reports and semi-annual reports, as well as the issue and redemption prices of the shares of the aforementioned SICAV, may be obtained from the Paying Agent in Austria, where other available documents may also be consulted. The net asset value of each sub-fund and share class is published in the daily newspaper "Der Standard". The SICAV s tax consultant in Austria is: Deloitte Exinger GmbH Renngasse 1/Freyung P.O. Box 18 A-1013 Vienna Taxation Shareholders are invited to contact their tax advisor regarding the tax situation in relation to their shares in their country of residence or in any other applicable country. Paying Agent in Liechtenstein LGT Bank in Liechtenstein Aktiengesellschaft Herrengasse 12 FL-9490 Vaduz The German language version of the prospectus, the simplified prospectuses, the Articles of Incorporation and the annual and semi-annual reports are available free of charge from the Paying Agent in Liechtenstein. Any notices and amendments to the prospectus and the Articles of Incorporation must be published in "Liechtensteiner Vaterland". The subscription and redemption prices of the shares of the SICAV shall be published at least twice per month in "Liechtensteiner Vaterland". The place of execution and the jurisdiction for shares distributed in Liechtenstein is Vaduz. 13

16 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) FOREIGN DISTRIBUTION Belgium The Paying Agent in Belgium is: Fastnet Belgium S.A. Belgian stock brokers Boulevard d Anvers, B-1000 Brussels Tel: (+32) 2/ Fax: (+32) 2/ VAT number:

17 Pictet Funds (LUX) - EUR Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter Contrary to expectations, euro-zone government bonds suffered quite a severe correction in the opening quarter of The yield curve shifted up a few notches right across the board, the upshot being that 10- and 30-year bonds delivered some poor results. Long-dated maturities were caught out by the firmness of economic statistics for Europe. At the outset of 2006, many market operators had only been anticipating a fairly modest upturn in European economies, with the revival being, moreover, curbed by hikes in the ECB s rates. The spike in inflation to 2.4% in January and lively issuance of new bonds also weighed on the long-dated end of the spectrum. Yield spreads between US T-bonds and equivalent Bunds tended to narrow slightly on all maturities. Subject to pressures from the economic upswing, question-marks over future inflation and expectations of further interest-rate hikes by the ECB, the euro-zone bond market continued to struggle during the second quarter. Given these circumstances, the yield on 10-year Bunds climbed above 4.0% whilst the yield on 2-year bonds reached 3.6%. GDP growth in the euro-zone quickened in Q to 0.6% (up from 0.3% in Q4 2005), confirming that the slowdown in the last quarter of 2005 was just a temporary blip. Recent economic and business surveys have been producing very heartening readings whilst the jobs market has been improving steadily, as borne out by the fall in the jobless rate to 7.9% in May. We continue to believe that the euro-zone economy will carry on growing close to its potential this year and that the output gap should gradually close up. Investment is likely to continue expanding as borrowing conditions remain attractive despite the hike in official interest rates and capacity utilisation is running above its longterm average levels. Capital spending and exports should, moreover, be boosted by the still robust state of the world economy. Inflation quickened to 2.5% y o-y, lifting the index noticeably above the ECB s official target rate. In contrast, the underlying rate of inflation fell back a little, from 1.5% to 1.3%. The latter should continue to be kept under control owing to ongoing stiff domestic and international competition as well as a still high jobless rate which is tending to keep a lid on pay rises. The yield curve on the Eurozone bond market continued to flatten out in response to ongoing hawkish comments about monetary tightening from various ECB policymakers, which kept up the pressure on the short-dated end of the yield spectrum, whereas long bonds benefited from the driftdown in US Treasury yields and a deceleration in inflation in Europe. In these circumstances, the yield on 10-year Bunds dropped 45 basis points from its early-july level; the spread relative to equivalent US T- bonds narrowed a little, closing from 115 to 88 basis points. Over the fourth quarter, the market remained convinced that the slowdown in the US was gathering pace, supporting the picture of a two-speed economy while the ECB kept the door open for further tightening in Euro land. The dichotomy between the two central banks led to an out-performance of the US market and the flattening of both curves. In December, European market operators shifted their focus from a slowdown in the US to further ECB hikes, on the back of better than expected data in the US and very strong numbers in Europe. Market outlook The financial markets have removed part of the rate decrease previously priced in the US curve, but should continue to run with the US soft-landing scenario as long as data will remain mixed. In Europe, a sharp rise in ECB-related policy expectations is being seen with a high probability of a rate hike in February. 15

18 Pictet Funds (LUX) - USD Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter The US bond market had a tough few opening months to 2006 as expectations about more hikes in the Fed funds rate hardened further. Yields moved up by around 50 basis points along the full length of the yield curve. The yield on 10-year US Treasury bonds climbed to the top end of the trading range in which it has been confined since 2003 and threatened quite seriously to break out above it. During Q1 2006, the yield curve did temporarily become inverted when it was announced that GDP growth in Q had been weaker than predicted. However, since then, the yield curve has flattened out and even steepened a little in response to news confirming the ongoing robustness of the US economy, uncertainty over the future direction of inflation and the prospect of borrowing conditions becoming more restrictive With the economy still vigorous and the likelihood of the Fed pushing interest rates up further, the US bond market extended its spell of correction, with the yield on 10-year US Treasury bonds climbing to 5.24%. In these circumstances, the yield curve temporarily reverted to a steeper upward slope, but, in the latter stages of the quarter, the first telltale signs of slowdown in the US economy, especially in the housing sector, compounded by the Fed s comments at the end of the FOMC meeting about the economy slackening, helped it flatten out again. The US bond market performed solidly in the third quarter, assisted by ever more compelling evidence that the US economy is slackening in pace and that the Fed is happy to keep monetary policy on hold. Recent inflation numbers and economic statistics, especially as regards the housing sector, have added further weight to the supposition that the process of hikes in the Fed funds rate has probably run its course. The decline in property prices has spawned a whole host of increasingly pessimistic scenarios about economic growth. The fall in the price of pre-owned homes for the first time since 1995 particularly grabbed all the headlines. Against this backdrop, the yield on 10-year US Treasury bonds fell back from 5.25% to 4.57%, with the yield curve inverting ever so slightly. The shape of the yield curve for futures contracts on the Fed funds rate suggests that the market has already begun to factor in a cut in the rate as soon as early next year. Market operators appear to be becoming increasingly worried about a steep downturn in economic activity and are no longer quite so concerned about inflation even though the Fed itself was still emphasising in its latest press release that inflationary risks had not evaporated completely, pointing out that capacity utilisation rates are high and unit labour costs are rising. This shift in investors perceptions is clearly borne out by the decline in the inflation break-even point on Treasury Inflation-Protected Securities (TIPS). During Q4, the market remained convinced that the slowdown in US was gathering pace, supporting the picture of a two-speed economy, while the ECB kept the door open for further tightening in Euroland. The dichotomy between the two central banks led to an out-performance of the US market and a flattening of both curves. The euro strengthened against dollar in the wake of the yen s appreciation. Market outlook The financial markets have removed part of the rate decrease previously priced in the US curve, but should continue to run with the US soft-landing scenario as long as data will remain mixed. In Europe, a sharp rise in ECB-related policy expectations is being seen with a high probability of a rate hike in February. 16

19 Pictet Funds (LUX) - CHF Liquidity MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter As leading economic indicators had been trumpeting, Switzerland s economy has been expanding encouragingly, registering 0.5% growth in the final quarter of 2005 or the equivalent of a 2.7% y-o-y rate. The main locomotives driving this growth were exports, consumer spending and investment on capital goods. The sound readings on both the KOF economic sentiment index and the Purchasing Managers Index have also been sending out encouraging signals for ongoing expansion in Switzerland s economy. Both the global economic environment and monetary situation are propitious for sustained growth in Switzerland. Even though the SNB did raise its rates a notch in March, interest rates are still very low and the weak franc is sharpening the competitive edge of Swiss exports. The Swiss economy may well grow by over 2% this year. The new-found health of Switzerland s economy should, at last, work through to give the jobs market a boost. The gentle uptick on the employment front seen recently should gather a little impetus, thereby helping to bolster and sustain the recovery in domestic demand. Inflation gathered a little speed in February, with the acceleration caused by higher rents and price increases for foodstuffs and energy. The underlying rate of inflation may well edge up gradually towards 0.8% by the end of this year. The likelihood of a rise in mortgage rates should inevitably lead to a bigger y o-y increase in rents whilst the disappearance of a very beneficial base effect connected to the steep reduction in phonecall charges last year will have an adverse impact. GDP growth was stronger than expected in the opening quarter of 2006, with the y-o-y rate working out at 3.5% (as opposed to the 2.9% expected). Exports and the financial services sector have been buoying up the Swiss economy: exports expanded by 12% in the opening three months, contributing half of the growth and heightening companies confidence for their investment plans. The financial sector also gave the economy a big boost as it grew by almost 9%. Consumer spending also perked up, probably encouraged by some signs of a turn for the better on the labour market. The unemployment rate dipped to 3.3% in May, its lowest level since The recovery was also in evidence on the vacancies front, with the number of jobs being advertised at official labour exchanges up by 1,482. Sound readings on leading economic indicators, such as the KOF economic sentiment index and the Purchasing Managers Index, have been sending out encouraging signals for solid expansion in Switzerland s economy in the coming quarters. The KOF indicator rose from 2.34 to 2.50 points in June whilst the PMI improved from 63.5 to 64.0, confirming that industry s confidence is on the rise. Retail sales, which had slumped by 6.8% in March as a result of the Easter holiday weekend falling in April this year (as opposed to March in 2005), bounced back powerfully in April, notching up a 12.2% rise and providing a positive outlook for retail trade. The headline rate of inflation nudged up from 1.4% y-o-y to 1.6% in June to post its highest rate for five years. The underlying rate of inflation also advanced, from 0.5% to 0.8%. Producer prices rose by 2.9%, compared to 1.8% in the previous month. 17

20 Pictet Funds (LUX) - CHF Liquidity MANAGEMENT REPORT ON 31 DECEMBER 2006 Third Quarter Fourth Quarter GDP growth worked out at 3.2% y-o-y in the second quarter, indicating that Switzerland s economy is expanding comfortably faster than its potential. This vigorous growth can be put down primarily to robust capital spending and solid expenditure by consumers. In contrast, exports were actually flat. Indications so far available for the third quarter have continued to produce encouraging readings overall, suggesting that Switzerland s economy has still been expanding vigorously, albeit slightly less so than in the opening half of this year. The sustained rebound on the employment front should contribute towards bolstering sustainable domestic demand. However, further rises in the SNB s interest rates, coupled with a downturn in growth in the global economy, may well gradually apply a brake to Switzerland s economic momentum next year. At present, the consensus is predicting GDP growth of 2.9% for this year and 1.9% in The headline rate of inflation retreated a touch in August, from 1.6% y o y to 1.5% This downtrend should continue in September, with the y-o-y rate of inflation decelerating to around 0.9% thanks to a combination of advantageous base effects and lower oil prices. The drop in energy costs should also have a further positive impact on October s numbers, helping to push the rate down towards 0.7%. The underlying rate of inflation held steady at 0.8% y-o-y over the past couple of months, but it is likely to head back up to around 1.0% in the coming months under the impetus from the robust economy. We saw short-term rates rise further during the quarter, due partly to the hawkish comments from the SNB and the positive macro environment. The findings from the various surveys suggest that Switzerland s economy should remain fairly robust over the next few quarters. Nevertheless, GDP growth is projected to be less vigorous in 2007, as exemplified by the forecasts produced by the Swiss Secretariat for Economic Affairs (SECO), with estimates for GDP growth of 2.7% for 2006 and 1.7% in both 2007 and in Market outlook As had been more or less taken for granted, the SNB raised its target 3-month LIBOR a quarter-point to 2% at its quarterly meeting in December. When announcing the increase, the SNB's President, Jean-Pierre Roth, made it quite clear that the SNB was intending to press ahead with pushing interest rates back into a more 'normal' mode. This suggests that, even with inflation so low and the prospect of the economy slowing down a little, the SNB should continue gradually to raise interest rates next year, hiking the 3-month LIBOR to around 2.50%-2.75%. The severity of this monetary tightening will hinge, to a large extent, on what happens to the US and European economies. 18

21 Pictet Funds (LUX) - USD Liquidity MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter US economic growth is likely to have bounced back in the first quarter of 2006 thanks to a rebound in consumer spending and rising business investment. With households savings ratio squeezed so tightly, consumer spending is looking more than a little vulnerable and may well be curtailed by a slide on the housing market. At a time when rising interest rates may well exert a brake on growth, the state of the property market is giving rise to some worries. Business investment, low inventory levels and a buoyant jobs market should help to underpin growth this year and partly offset adverse sideeffects from any downturn on the housing front. The rate of GDP growth for the first quarter this year was revised up to 5.6%, but recent statistics concerning the property sector, orders of durable goods and some findings from economic and business surveys (disappointing payroll numbers for April and May) rekindled worries about a slide in the economy. Stubbornly high energy prices have also been giving rise to much concern. Price indices and inflation expectations as measured in surveys are still climbing. In May, both the headline and core rate of inflation in the USA quickened, displaying y-o-y readings of 4.2% and 2.4%, respectively. The PCE deflator advanced from 2.9% to 3.3% whilst the core deflator (excluding food and energy prices) held firm at 2.1%, but this still leaves it a fraction above the Fed s adopted comfort zone. Despite still being fairly subdued, inflationary risks have risen, and, against the background of a buoyant economy, the overriding trend on the jobs market, the high capacity utilisation rates and oil prices are potentially inflationary. Moreover, the dollar s slide in value, if it were to continue, could well fuel imported inflation. Recent inflation numbers and economic statistics, especially as regards the housing sector, have added further weight to the supposition that the process of hikes in the Fed funds rate has probably run its course. The decline in property prices has spawned a whole host of increasingly pessimistic scenarios about economic growth. The fall in the price of pre-owned homes for the first time since 1995 particularly grabbed all the headlines. The shape of the yield curve for futures contracts on the Fed funds rate suggests that the market has already begun to factor in a cut in the rate as soon as early next year. Market operators appear to be becoming increasingly worried about a steep downturn in economic activity and are no longer quite so concerned about inflation even though the Fed itself was still emphasising in its latest press release that inflationary risks had not evaporated completely, pointing out that capacity utilisation rates are high and unit labour costs are rising. This shift in investors perceptions is clearly borne out by the decline in the inflation break-even point on Treasury Inflation-Protected Securities (TIPS). As had been predicted, the FOMC left the Fed funds rate at 5.25% at its December meeting and decided to maintain its tightening bias in its accompanying comment. The healthy state of the labour market has eased fears about a severe downturn in the US economy and has reduced the chances of the Fed cutting rates in the near future. Market outlook If core inflation continues to recede, the Fed may well revert to a neutral bias during the course of Q1 2007, and we continue to believe that it will stick with the monetary status quo for much of

22 Pictet Funds (LUX) - EUR Liquidity MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter The announcement that GDP growth in Q had been quite sluggish had dowsed much of the optimism generated by the upbeat findings from economic surveys published in early The euro-zone economy thus expanded by just 1.3% in 2005, well short of its potential estimated at some 2%. After the encouraging rate of 0.6% reported for Q3 2005, the economy expanded by just 0.3% in the final quarter of last year. Domestic demand is still struggling to take over from exports as the growth driver since the employment market is still anaemic even though unemployment rates have been edging downwards. However, recent indicators have all been pointing towards a revival in euro-zone economic growth in Q The business sentiment indicator for the euro-zone has been climbing steadily since December, posting a reading of for March. Industry is still being underpinned by rising export orders in a number of countries. Purchasing managers indices are still on the growth side of the key 50-point border-line: the PMI for the manufacturing sector advanced from 54.5 to 56.1 in March whilst the services PMI registered a score of 58.2 in February, its highest reading since September The IFO index for Germany once again jumped more steeply than expected in March, especially the sub-index for current conditions, which leaped from to These survey findings suggest that the economy should extend its upswing. At present, the consensus is forecasting GDP growth of 2.1% for this year, followed by 1.8% in Inflation is still running above the ECB s official target, but it did come down a little in February, sliding from 2.4% y-o-y to 2.3%, and preliminary estimates for March suggest that it has retreated further, to 2.2%. The underlying rate of inflation also drifted down a touch, from 1.4% to 1.2% in February. Core inflation should continue to be kept under control in 2006 owing to ongoing stiff domestic and international competition as well as a still high jobless rate which is tending to keep a lid on pay rises. However, the consistently high level of oil prices remains a factor that could have a deleterious impact on prices. Second Quarter GDP growth in the euro-zone quickened in Q to 0.6% (up from 0.3% in Q4 2005), confirming that the slowdown in the last quarter of 2005 was just a temporary blip. Recent economic and business surveys have been producing very heartening readings whilst the jobs market has been improving steadily, as borne out by the fall in the jobless rate to 7.9% in May. Purchasing Managers Indices continued to make progress, with the Manufacturing PMI at 57.7 and the Services PMI at The euro-zone economic sentiment indicator also extended its ascent to reach whilst the leading economic indicator rose further to In Germany, the Ifo business confidence index posted a bigger rise than expected in June, especially the barometer for current conditions which advanced from to The consensus had been looking for the index to be more or less flat considering the firming euro and the latest spike in oil prices. The bellwether Belgian business confidence indicator also bounced upwards, moving from 2.0 to We continue to believe that the euro-zone economy will carry on growing close to its potential this year and that the output gap should gradually close up. Investment is likely to continue expanding as borrowing conditions remain attractive despite the hike in official interest rates and capacity utilisation is running above its long-term average levels. Capital spending and exports should, moreover, be boosted by the still robust state of the world economy. Inflation quickened to 2.5% y o-y, lifting the index noticeably above the ECB s official target rate. In contrast, the underlying rate of inflation fell back a little, from 1.5% to 1.3%. The latter should continue to be kept under control owing to ongoing stiff domestic and international competition as well as a still high jobless rate which is tending to keep a lid on pay rises. 20

23 Pictet Funds (LUX) - EUR Liquidity MANAGEMENT REPORT ON 31 DECEMBER 2006 Third Quarter Fourth Quarter GDP growth in the Eurozone worked out at 0.9% in Q2 and is likely to remain robust in the latter half of this year; at least this is what the results from economic and business surveys would seem to suggest. Even though the barometers have come off their recent peaks of late, they are still showing high readings consistent with economic growth running slightly above potential for the last couple of quarters of 2006 although the downturn registered by the leading economic indicators does seem to indicate that this economic cycle may well have already peaked. Next year, economic growth in Europe is likely to be less robust given the aftermath of rises in the ECB s interest rates, the imminent hike in Germany s VAT rate and repercussions from the slowdown in the USA. Moreover, fiscal policy is set to be less expansionary. At present, the consensus is forecasting GDP growth of 2.5% for this year, followed by 1.8% in Inflation decelerated much more throughout the third quarter than had been expected on the back of the slide in oil prices. The headline y-o-y rate fell from 2.5% in June to 1.8% in September (according to preliminary estimates), thus falling below the ECB s official target. The underlying rate of inflation has held very steady, although it could inch up a little in the coming months considering the rude health of the Eurozone economy. However, inflationary pressures should remain fairly subdued owing to ongoing stiff domestic and international competition as well as a still high jobless rate which is tending to keep a lid on pay rises. As expected, the ECB raised its repo rate by one quarter of a point at its October and December meetings, pushing it up to 3.5% from 3% by the end of Q4. At the same time, it raised its forecasts for economic growth for 2007 and lowered its projections for inflation, chiefly as a result of the fall in oil prices. Above-potential growth, swift expansion in the money supply and lending to the private sector, big rises in some asset prices (shares and property), coupled with a rebound in inflation, once again exceeded the official targets and have prompted the ECB to take tightening steps. Market outlook Futures contracts have fully priced in the prospect of another quarter-point hike in the refinancing rate during Q (probably February or March) and partly factored in a second increase before the summer, bringing the official ECB rate to a level of 4%. 21

24 Pictet Funds (LUX) - EUR Corporate Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Bond markets produced negative returns for the first quarter of Heartening data for most leading economies worldwide, the perception that inflationary risks were slightly on the rise and widespread hardening of expectations about hikes in central banks interest rates stoked up generalised tension on bonds, which spread right along the length of the yield curve. The prospect of the US Federal Reserve pressing ahead with raising the Fed funds rate, the European Central Bank (ECB) pushing its rates back up to more normal levels in 2006 and the Bank of Japan s decision to call a halt to its quantitative monetary easing point towards liquidity diminishing on financial markets. Against this sort of backdrop, government and investment-grade corporate bonds turned in negative returns. In contrast, high-yield bonds and emerging-market debt, still underpinned by fairly sound fundamentals and eagerly sought after by investors on the lookout for yield, fared well, scoring some more quite handsome gains. Subject to pressures from the economic upswing, question-marks over future inflation and expectations of further interest-rate hikes by the ECB, the euro-zone bond market continued to struggle during the second quarter. Given these circumstances, the yield on 10-year Bunds climbed above 4.0% whilst the yield on 2-year bonds reached 3.6%. Credit-risk instruments actually exhibited greater resilience than other risky asset classes in the second quarter in an atmosphere of mounting and widespread aversion to risk. Nonetheless, credit spreads did widen quite noticeably in some instances, particularly - understandably - more so in the high-yield segment than on investmentgrade paper. The corporate bond market fared reasonably well. Companies half-year results bolstered borrowers creditworthiness credentials, except for those in the automotive industry. Even though specific risks have been proliferating, credit spreads remained confined to a narrow band of fluctuation. Investment-grade bonds began September with already quite demanding valuations, but they managed to resist the rollover of indices and the proliferation of specific risks, with credit spreads holding firm in the narrow band of fluctuation that has held good in recent months. Market operators had been expecting a mass influx of new issues after the summer break and had been concerned that this would have an adverse impact on credit spreads on the secondary market. Non-financial corporate bonds worth over EUR11bn were indeed issued, but they were all placed without a hitch (with the single exception of United Business Media) and often on spreads that were even tighter than indicated at the outset in roadshows. These developments bear witness to the involvement of retail investors who do, however, remain very selective in their choices. Nonetheless, margins on bonds did open up a little over the month: the iboxx Corporates index widened by 2bp, with the index for non-financial corporates alone 3bp wider. Subordinated insurance securities and hybrid paper from industrials also fared well, whereas the automotive sector and banksubordinated paper underperformed, as did telecoms (spreads 10bp wider, with 22bp on long-dated telecom bonds). This can be blamed on a resurgence in event risk related to all the merger and acquisition activity, rumoured or actual LBO deals and more aggressive corporate governance strategies in response to increased pressure for more creation of shareholder value. On the credit derivatives front, the itraxx Europe Series 5 index hit its all-time low in early September at 26.5bp before the launch of the Series 6 index on 20 September. Sessions either side of the index roll saw considerable volumes being traded amid moderate volatility. The new Series index has not changed significantly: its sector breakdown is identical as is its average credit rating (A3); only nine underlying benchmark bonds, amounting to 7% of the index, have been switched, primarily on grounds of liquidity and credit ratings. 22

25 Pictet Funds (LUX) - EUR Corporate Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Fourth Quarter Like other risky asset classes, investment-grade credit performed well in the last quarter of The fund s benchmark tightened by 2 bp to 52 bp over governments bonds. The BBB segment of the benchmark tightened by 10 bp to 74 bp over government bonds. This price action was due both to a supportive macroeconomic backdrop with decreasing fear of inflation and a very good set of Q3 results. Market outlook Even with the economy expected to slow down, the macroeconomic climate overall should remain clement, lending further support to corporate bonds. Companies are likely to persevere with their conservative financial policies. The overall background should thus remain conducive to this segment of the bond market and we do not anticipate any deterioration in the near term even though we are likely to witness a few flurries of profit-taking in early January on the back of an outstanding month of December. 23

26 Pictet Funds (LUX) - Global Emerging Debt MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter The emerging debt market posted a strong performance in the first quarter of January and February were stellar months, as the firm fundamental backdrop, benign macroeconomic risk environment, and the positive net demand dynamic drove the market higher. However, in March, the emerging debt market exhibited heightened volatility and posted a negative return. At the beginning of the month, the prospect of tighter global liquidity conditions owing to more hawkish G3 central banks led to a selloff in US Treasuries. This, together with a rise in risk aversion, led to general weakness in emerging debt. As the month progressed, the asset class attempted to recover as US Treasuries rallied and risk aversion dissipated somewhat. Nonetheless, the market struggled to move higher and continued to trade with an overall weak tone. Although fundamentals remained firm in the majority of emerging countries, there was a rise in political noise, namely in Peru, the Ukraine and Brazil. In the first two months of the quarter, the fund strategy was to have a higher beta to the market in selective credits, namely Brazil, Russia, Indonesia, Argentina and Venezuela, funded from lower yielding credits. We also held positions in Russian and Kazakhstan corporates and selective emerging market FX. However, before March, we began to reduce the beta owing to concerns regarding higher rate expectations. During the volatile period of March, we moved out of higher-beta credits and our FX positions, reduced duration, and remained short credits highly correlated to US Treasury movements (predominately high grade credits). Second Quarter The second quarter of 2006 was a volatile period for the emerging debt market. Following a mixed performance in April, when after a period of weakness spreads moved to historic tights, in May spreads widened out again and returns turned negative. The backdrop for emerging market debt deteriorated as risk aversion rose, which was highlighted by the sell off in US Treasuries, equities and commodities. Concern that global liquidity was withdrawing was a major driver of this decreased appetite for risky assets. In June, the weakness in risky asset classes continued. Even while equities staged some stability and risk aversion fell, emerging debt performance remained lacklustre and returns were negative for a second month. Although the supply dynamic for emerging debt continued to improve following debt buybacks by Brazil, Venezuela and Panama over the period, concern that the weak returns would spell a period of redemptions from the asset class prevented the buy-on-dips mentality that had persisted among emerging debt investors previously. This weakness in the asset class was not fundamentally driven. Indeed, over the period, fundamentals remained robust. For example, Indonesia was upgraded by Moody s to B1. The higher beta credits such as Turkey, Uruguay and Argentina were some the weakest performers. Turkey came under pressure as higher-than-expected inflation data emerged and there was negative political noise. Amid the general risk reduction, concern over Turkey grew owing to the current account deficit and the currency depreciated significantly. The fund remained defensive, having raised cash levels and reduced duration. 24

27 Pictet Funds (LUX) - Global Emerging Debt MANAGEMENT REPORT ON 31 DECEMBER 2006 Third Quarter Fourth Quarter During the third quarter of 2006, the emerging debt market posted a generally firm but mixed performance. July and August were robust months. Despite heightened geopolitical risk in July and the widespread underperformance of other risky asset classes, the emerging debt market gathered momentum following the fall in rate-hike expectations. The fact that new issues by numerous countries were well received was testimony to the strength of the market in this period. In August, the emerging debt market was generally resilient to increased global growth concerns, with added support from the increase in the stream of inflows coming into the asset class. The dovish FOMC minutes at the end of the month added a further boost to emerging markets. September saw the asset class come under some pressure as commodity prices fell and global growth concerns predominated. Nonetheless, the resilience of emerging market debt prevailed, despite increased political noise (in Ecuador, Thailand, Hungary and Brazil), and a positive return was posted for the month as a whole. Over the period, the high beta credits were the strongest-performing (such as Argentina, Brazil and Uruguay). The worst performer was Ecuador as concern mounted that the leftist presidential candidate Rafael Correa was gaining ground and that the debt could be restructured if he won the presidential election. Lebanon also underperformed over the period, reflecting the military action Israel took against Hezbollah within Lebanese territory. In July and August, the fund was fully invested, although with mounting concerns in September regarding global growth and falling commodity prices, cash was raised, the majority of local positions closed and the fund moved close to neutral. Over the fourth quarter of 2006, the US dollar-denominated emerging debt markets posted stellar performances. Emerging market instruments across the board rallied into the year end, shrugging off the short-lived increase in risk aversion associated with the unwind of the developed currency carry trade towards the end of November. There were a number of factors supporting this development. In addition to robust fundamentals (as exemplified by various rating upgrades), the global backdrop was favourable. Although concerns regarding US growth did arise, emerging markets were resilient to this, reflecting the increased structural strength of many countries that limits the impact of external shocks. Moreover, subsequent US data emerged that showed that there was still some momentum in the economy. The robust global growth outlook remained on course. Meanwhile, risk appetite generally persisted, with equities posting a good performance and the VIX index moving lower. This created an overall favourable environment for emerging market risk. Turning to asset-class specific events, the extremely positive net demand dynamic in emerging markets debt continued. Flows into the market continued apace while supply was constrained. USD-denominated debt issuance needs are limited as governments switch to issuing local currency denominated debt. Some of the strongest performers were the high beta names, with Argentina being worthy of note. Ecuador and Lebanon were two of the weakest performers following negative political developments in both countries. In Ecuador, this followed Rafael Correa s victory in the presidential election. He has advocated defaulting on debt and breaking relations with the World Bank. It is not a question of ability to pay down the debt owing to the high oil prices the country has benefited from. It is a question of willingness to pay. 25

28 Pictet Funds (LUX) - Global Emerging Debt MANAGEMENT REPORT ON 31 DECEMBER 2006 Market outlook Given the recent rally in the market, valuations are tight and there may be a bout of short-term weakness. Nonetheless, we remain constructive on the USD-dollar denominated emerging debt in the medium term. We expect the global backdrop to remain favourable and emerging country fundamentals to stay on course. Moreover, we believe that the extremely positive supply and demand dynamics are going to continue into

29 Pictet Funds (LUX) - Global Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Bond markets produced negative returns for the first quarter of Heartening data for most leading economies worldwide, the perception that inflationary risks were slightly on the rise and widespread hardening of expectations about hikes in central banks interest rates stoked up generalised tension on bonds, which spread right along the length of the yield curve. The prospect of the US Federal Reserve pressing ahead with raising the Fed funds rate, the European Central Bank (ECB) pushing its rates back up to more normal levels in 2006 and the Bank of Japan s decision to call a halt to its quantitative monetary easing point towards liquidity diminishing on financial markets. Against this sort of backdrop, government and investment-grade corporate bonds turned in negative returns. In contrast, high-yield bonds and emerging-market debt, still underpinned by fairly sound fundamentals and eagerly sought after by investors on the lookout for yield, fared well, scoring some more quite handsome gains. The scenario of synchronised economic growth and widespread monetary tightening drove bond yields further upwards in the second quarter. Real bond yields climbed against the background of a healthy global economy and soaring crude oil prices. The US bond market has remained pulled one way by resurfacing inflationary fears and pushed the other by a possible economic slowdown. Overall, with the US Federal Reserve still cranking up the Fed funds rate, long-bond yields have continued to move upwards, with the 10-year US Treasury bond yield climbing to 5.24%. The yield curve temporarily reverted to a steeper upward slope, but, in the latter stages of the quarter, the first signs of slowdown in the US economy, especially in the housing sector, compounded by the Fed s comments at the end of the Federal Open Market Committee (FOMC) meeting about the economy slackening in pace, helped it flatten out again. The euro-zone bond market remains influenced by the economic upswing, accelerating inflation and hikes in the European Central Bank s (ECB) rates. Given these circumstances, the yield on 10-year Bunds climbed above 4.11% whilst the yield on 2- year bonds reached 3.61%. The Swiss and UK bond markets experienced a similar pattern to euro-zone bonds. The economic situation in Japan, the end of the deflationary era and, above all, the prospect of the policy of zero interest rates being abandoned by the Bank of Japan sent yields on 10-year Japanese government bonds (JGB) up beyond 2.0%, a level not seen for six whole years. The correction on equity markets sent investors scurrying for quality, which, for a while, gave government bonds the edge over riskier assets. Corporate bonds and emerging-market debt were handicapped by investors diminishing appetite for risk, which resulted in risk premiums climbing a little. 27

30 Pictet Funds (LUX) - Global Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Third Quarter Fourth Quarter Bond markets were in fine form during the third quarter, with all managing to deliver positive returns. The steep drop in oil and gas prices, which helped to dispel inflationary fears, and a more marked slowdown in the US economy than anticipated served to tone down expectations about forthcoming hikes in interest rates and triggered a widespread driftdown in bond yields. Recent inflation numbers and economic statistics for the USA, especially as regards the housing sector, have added further weight to the supposition that the process of hikes in the Fed funds rate has probably run its course. The decline in property prices has spawned a whole host of increasingly bleak scenarios about economic growth. Against this background, the slope on the yield curve inverted. In Europe, the yield curve continued to flatten out in response to ongoing hawkish comments about monetary tightening from various European Central Bank (ECB) policy-makers, which kept up the pressure on the short-dated end of the yield spectrum whereas long bonds benefited from the driftdown in US Treasury yields and a deceleration in inflation in Europe. Yields on Japanese government bonds (JGBs) have virtually slipped back to their levels at the outset of The slope on the yield curve has steepened a little further, with yields falling a fraction more steeply on short- and middated maturities. The JGB market benefited from a definite softening of expectations about interest-rate hikes by the Bank of Japan, a more mixed bag of economic data and, above all, the downward revision to the consumer prices index. Faced with this general background, the corporate and emerging-market bond markets fared reasonably well. The market remained convinced that the slowdown in the US was gathering pace during Q4, thereby supporting the picture of a two-speed economy, while the ECB kept the door open for further tightening in Euroland. The dichotomy between the two central banks led the US market to out-perform and both curves to flatten. The euro strengthened against the US dollar in the wake of the Japanese yen appreciating. Market outlook The financial markets have removed part of the rate decrease previously priced in the US curve but should continue to run with the US soft-landing scenario as long as data will remain mixed. In Europe, a sharp rise in ECB-related policy expectations is being seen with a high probability of a rate hike in February. 28

31 Pictet Funds (LUX) - EUR High Yield MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter High Yield (HY) market had a very strong performance in the first quarter of 2006 in the environment of low default rates, stable economic growth and rising interest rates. The fund s benchmark, the Merrill Lynch Euro High Yield Constrained Index, returned 2.53%. HY market outperformed the government bonds by around 4%. HY market was particularly strong in January and returned 1.47%. It was mainly due to a strong demand/supply imbalance caused by a redemption of over 2 billion equivalent of bonds and subsequent cash inflows. This led to an excessive cash balances among the investors. That together with a limited new issuance and low volatility created a strong demand in a secondary market. February performance was also positive, however significantly more volatile due to a large new issuance, including the largest ever in Euro HY history Ä1.75 billion issue from Ineos Group. The market rallied towards the end of the quarter because issuers confirmed strong fundamentals in their quarterly reports, investors overcome the fear of repetition of March s traditional sell-off and finally GM gave positive news with sale of GMAC. In the first quarter, the Fund matched market performance. We were neutrally positioned as we believed the risks were delicately balanced. In the 2nd quarter of 2006 the High Yield (HY) market, as represented by the Merrill Lynch Euro High-Yield Constrained Index, returned -0.01%. The spreads widened by 50 basis points (bp) to 309bp. The quarter started on a positive note, as the market continued the strong performance started earlier in the year. On 28 April, spreads reached the lowest year-to-date level of 246bp. In May-June, the HY market gradually sold off in a global risk-aversion trade, which first hit equities and emerging debt. The shift in risk sentiment was driven by macro events, particularly an increased uncertainty over the US interest rate changes and alleged sudden fear of inflation. Supply/demand in Euro HY was fairly balanced. While around EUR 7.5 billion worth of new issues waspriced in April and May, a similar amount of cash was returned to investors from early bond redemptions and payments of coupons. The majority of new issues were well received by the market, which confirmed an appetite for HY bonds. The Fund selectively participated in a number of new issues, including Lottomatica (BB) and Europcar (B). The most significant company news was the stabilisation of GM following the success of its workforce reduction program and the diminished threat of a Delphi strike. The Fund has benefited from holding the GM bonds, which showed very strong performance. In the second quarter, the Fund closely matched the performance of the market. 29

32 Pictet Funds (LUX) - EUR High Yield MANAGEMENT REPORT ON 31 DECEMBER 2006 Third Quarter Fourth Quarter In the 3rd quarter of 2006, the High-Yield (HY) market, as represented by the Merrill Lynch Euro HY Constrained Index, returned 3.03%. The spreads tightened by 16 basis points (bp) to 293bp. HY spreads tightened slowly and steadily in July and August owing to a positive change in macro factors that caused spreads to widen in the 2nd quarter. Geopolitical risks declined, with an easing of the Lebanon conflict and the increased likelihood of a peaceful resolution to the Iran nuclear dispute. The concerns regarding high US inflation declined and the Fed announced a pause in US interest-rate rises. However, in September, the spreads widened from the tight leels seen in mid August owing to concerns about a slowdown in US economy. Technicals were supportive in the 3rd quarter, as HY bond redemptions and coupon payments exceeded the new issue supply. Approx. 2.7 billion euros worth of new bonds were priced this quarter, which was higher than last year. The performance of new issues was mixed, as investors become selective. The Fund selectively participated in a number of new issues, including Irish telecom company Eircom, Impress and Travelport. The Auto sector remained the main concern of the market. Ford announced another round of production cuts in August and subsequently revealed an acceleration of its restructuring plans. Investors considered these as being insufficient to address the company s problems, and spreads widened. The Fund benefited from its underweight position in Ford Motor Credit. In the 3rd quarter, the Fund performance closely matched the performance of the market. The Fund was well positioned to benefit from spread-tightening, but our overweight in Cognis, which unexpectedly postponed its exit plans, cost us strong performance. In the fourth quarter of 2006, the European high-yield market, as represented by the Merrill Lynch Euro Constrained Index, returned 3.15% while the Itraxx crossover Series 6 Index, representing derivatives on this asset class, tightened by 66bps. The strong performance was supported by a benign macroeconomic climate, solid issuer fundamentals and a rally in equity markets. Many high-yield investors who were defensively positioned were forced to capitulate, providing further technical support to the high-yield rally. Market outlook We are cautious though constructive on the market. We believe in the soft landing scenario in the USA and continued growth of world economy. These factors should support HY issuers fundamentals and keep default rates close to current low levels. We believe that the present tight spreads fairly value the high-yield risk in the current benign macro economic environment and therefore think that the high-yield asset class offers an attractive coupon clipping opportunity. 30

33 Pictet Funds (LUX) - EUR Short Mid-Term Bonds MANAGEMENT REPORT ON 31 DECEMBRE 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter Contrary to expectations, euro-zone government bonds suffered quite a severe correction in the opening quarter of The yield curve shifted up a few notches right across the board, the upshot being that 10- and 30-year bonds delivered some poor results. Long-dated maturities were caught out by the firmness of economic statistics for Europe. At the outset of 2006, many market operators had only been anticipating a fairly modest upturn in European economies, with the revival being, moreover, curbed by hikes in the ECB s rates. The spike in inflation to 2.4% in January and lively issuance of new bonds also weighed on the long-dated end of the spectrum. Yield spreads between US T-bonds and equivalent Bunds tended to narrow slightly on all maturities. Subject to pressures from the economic upswing, question-marks over future inflation and expectations of further interest-rate hikes by the ECB, the euro-zone bond market continued to struggle during the second quarter. Given these circumstances, the yield on 10-year Bunds climbed above 4.0% whilst the yield on 2-year bonds reached 3.6%. GDP growth in the euro-zone quickened in Q to 0.6% (up from 0.3% in Q4 2005), confirming that the slowdown in the last quarter of 2005 was just a temporary blip. Recent economic and business surveys have been producing very heartening readings whilst the jobs market has been improving steadily, as borne out by the fall in the jobless rate to 7.9% in May. We continue to believe that the euro-zone economy will carry on growing close to its potential this year and that the output gap should gradually close up. Investment is likely to continue expanding as borrowing conditions remain attractive despite the hike in official interest rates and capacity utilisation is running above its longterm average levels. Capital spending and exports should, moreover, be boosted by the still robust state of the world economy. Inflation quickened to 2.5% y o-y, lifting the index noticeably above the ECB s official target rate. In contrast, the underlying rate of inflation fell back a little, from 1.5% to 1.3%. The latter should continue to be kept under control owing to ongoing stiff domestic and international competition as well as a still high jobless rate which is tending to keep a lid on pay rises. The yield curve on the Eurozone bond market continued to flatten out in response to ongoing hawkish comments about monetary tightening from various ECB policymakers, which kept up the pressure on the short-dated end of the yield spectrum, whereas long bonds benefited from the driftdown in US Treasury yields and a deceleration in inflation in Europe. In these circumstances, the yield on 10-year Bunds dropped 45 basis points from its early-july level; the spread relative to equivalent US T- bonds narrowed a little, closing from 115 to 88 basis points. After remaining relatively flat for two months, bond yields rose sharply over the month of December. All-in-all over the period under review, 2-year maturities advanced 0.32% to 3.91% while 30-year issues rose by 0.15% to 4.08%. Furthermore, riskier assets overperformed with the high-yield private debt market doing particularly well. The 5 - year crossover index tracking this segment of debt decreased by 65 basis points over the period to 220. While the Fed left its rates on hold, the ECB has carried on its monetary tightening cycle, raising its key rates two notches from 3.0 to 3.50%. The fourth quarter demonstrated that the economy is starting to loose steam despite companies continuing to post strong earnings. 31

34 Pictet Funds (LUX) - EUR Short Mid-Term Bonds MANAGEMENT REPORT ON 31 DECEMBRE 2006 Market outlook Further hikes in the ECB s rates and any quickening in the pace of inflation would be liable to stoke up pressure on the bond market, but the tension on bonds on which yields already moved a little higher in December should remain fairly limited considering that the prospect of tightening credit conditions has already been broadly priced in and that the economy will probably lose some steam. The yield curve seems likely to remain reasonably flat and might even begin taking on an inverted shape if the slowdown in Europe s economy were to materialise. 32

35 Pictet Funds (LUX) - USD Short Mid-Term Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter The US bond market had a tough few opening months to 2006 as expectations about more hikes in the Fed funds rate hardened further. Yields moved up by around 50 basis points along the full length of the yield curve. The yield on 10-year US Treasury bonds climbed to the top end of the trading range in which it has been confined since 2003 and threatened quite seriously to break out above it. During Q1 2006, the yield curve did temporarily become inverted when it was announced that GDP growth in Q had been weaker than predicted. However, since then, the yield curve has flattened out and even steepened a little in response to news confirming the ongoing robustness of the US economy, uncertainty over the future direction of inflation and the prospect of borrowing conditions becoming more restrictive. With the economy still vigorous and the likelihood of the Fed pushing interest rates up further, the US bond market extended its spell of correction, with the yield on 10-year US Treasury bonds climbing to 5.24%. In these circumstances, the yield curve temporarily reverted to a steeper upward slope, but, in the latter stages of the quarter, the first telltale signs of slowdown in the US economy, especially in the housing sector, compounded by the Fed s comments at the end of the FOMC meeting about the economy slackening, helped it flatten out again The US bond market performed solidly in the third quarter, assisted by ever more compelling evidence that the US economy is slackening in pace and that the Fed is happy to keep monetary policy on hold. Recent inflation numbers and economic statistics, especially as regards the housing sector, have added further weight to the supposition that the process of hikes in the Fed funds rate has probably run its course. The decline in property prices has spawned a whole host of increasingly pessimistic scenarios about economic growth. The fall in the price of pre-owned homes for the first time since 1995 particularly grabbed all the headlines. Against this backdrop, the yield on 10-year US Treasury bonds fell back from 5.25% to 4.57%, with the yield curve inverting ever so slightly. The shape of the yield curve for futures contracts on the Fed funds rate suggests that the market has already begun to factor in a cut in the rate as soon as early next year. Market operators appear to be becoming increasingly worried about a steep downturn in economic activity and are no longer quite so concerned about inflation even though the Fed itself was still emphasising in its latest press release that inflationary risks had not evaporated completely, pointing out that capacity utilisation rates are high and unit labour costs are rising. This shift in investors perceptions is clearly borne out by the decline in the inflation break-even point on Treasury Inflation-Protected Securities (TIPS). As had been predicted, the FOMC left the Fed funds rate at 5.25% at its December meeting and decided to maintain its tightening bias in its accompanying comment. The healthy state of the labour market has eased fears about a severe downturn in the US economy and has reduced the chances of the Fed cutting rates in the near future. The treasury 2-year rate has traded in a range while the 2-year swap spread has tightened. 33

36 Pictet Funds (LUX) - USD Short Mid-Term Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market outlook The Fed is likely to stick with the status quo for quite a while yet. The solid state of the job market, the decline in productivity and high capacity utilisation rates would count against the Fed pushing down interest rates quickly as the market seems to be assuming. With core inflation running above the Fed s target rate, it may well even contemplate hiking the Fed funds rate again if the economy were to regain some momentum and the housing market were to stabilise. US bonds can be expected to continue to be rangebound in expectation of visibility improving as regards economic prospects and the outlook for inflation. 34

37 Pictet Funds (LUX) - EUR Turbo Income MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Bond markets produced negative returns for the first quarter of Heartening data for most leading economies worldwide, the perception that inflationary risks were slightly on the rise and widespread hardening of expectations about hikes in central banks interest rates stoked up generalised tension on bonds, which spread right along the length of the yield curve. The prospect of the US Federal Reserve pressing ahead with raising the Fed funds rate, the European Central Bank (ECB) pushing its rates back up to more normal levels in 2006 and the Bank of Japan s decision to call a halt to its quantitative monetary easing point towards liquidity diminishing on financial markets. Against this sort of backdrop, government and investment-grade corporate bonds turned in negative returns. In contrast, high-yield bonds and emerging-market debt, still underpinned by fairly sound fundamentals and eagerly sought after by investors on the lookout for yield, fared well, scoring some more quite handsome gains. The scenario of synchronised economic growth and widespread monetary tightening drove bond yields further upwards in the second quarter. Real bond yields climbed against the background of a healthy global economy and soaring crude oil prices. The US bond market has remained pulled one way by resurfacing inflationary fears and pushed the other by a possible economic slowdown. Overall, with the US Federal Reserve still cranking up the Fed funds rate, long-bond yields have continued to move upwards, with the 10-year US Treasury bond yield climbing to 5.24%. The yield curve temporarily reverted to a steeper upward slope, but, in the latter stages of the quarter, the first signs of slowdown in the US economy, especially in the housing sector, compounded by the Fed s comments at the end of the Federal Open Market Committee (FOMC) meeting about the economy slackening in pace, helped it flatten out again. The euro-zone bond market remains influenced by the economic upswing, accelerating inflation and hikes in the European Central Bank s (ECB) rates. Given these circumstances, the yield on 10-year Bunds climbed above 4.11% whilst the yield on 2- year bonds reached 3.61%. The Swiss and UK bond markets experienced a similar pattern to euro-zone bonds. The economic situation in Japan, the end of the deflationary era and, above all, the prospect of the policy of zero interest rates being abandoned by the Bank of Japan sent yields on 10-year Japanese government bonds (JGB) up beyond 2.0%, a level not seen for six whole years. The correction on equity markets sent investors scurrying for quality, which, for a while, gave government bonds the edge over riskier assets. Corporate bonds and emerging-market debt were handicapped by investors diminishing appetite for risk, which resulted in risk premiums climbing a little. 35

38 Pictet Funds (LUX) - EUR Turbo Income MANAGEMENT REPORT ON 31 DECEMBER 2006 Third Quarter Bond markets were in fine form during the third quarter, with all managing to deliver positive returns. The steep drop in oil and gas prices, which helped to dispel inflationary fears, and a more marked slowdown in the US economy than anticipated served to tone down expectations about forthcoming hikes in interest rates and triggered a widespread driftdown in bond yields. Recent inflation numbers and economic statistics for the USA, especially as regards the housing sector, have added further weight to the supposition that the process of hikes in the Fed funds rate has probably run its course. The decline in property prices has spawned a whole host of increasingly bleak scenarios about economic growth. Against this background, the slope on the yield curve inverted. In Europe, the yield curve continued to flatten out in response to ongoing hawkish comments about monetary tightening from various European Central Bank (ECB) policy-makers, which kept up the pressure on the short-dated end of the yield spectrum whereas long bonds benefited from the driftdown in US Treasury yields and a deceleration in inflation in Europe. Yields on Japanese government bonds (JGBs) have virtually slipped back to their levels at the outset of The slope on the yield curve has steepened a little further, with yields falling a fraction more steeply on short- and middated maturities. The JGB market benefited from a definite softening of expectations about interest-rate hikes by the Bank of Japan, a more mixed bag of economic data and, above all, the downward revision to the consumer prices index. Faced with this general background, the corporate and emerging-market bond markets fared reasonably well. Fourth Quarter Over the last quarter of 2006, the US 10-year yields gained 10 bps from 4.60% to 4.70%. The lowest point reached 4.40% in November on the back of weaker US data. In December, positive numbers appeased expectations of future rate cuts and propelled the 10-year yield to 4.70%. In Europe, the ECB kept the door open for further tightening, causing the US market to out-outperform and both curves to flatten. Market outlook The financial markets have removed part of the rate decrease previously priced in the US curve but should continue to run with the US soft-landing scenario as long as data will remain mixed. In Europe, a sharp rise in ECB-related policy expectations is being seen with a high probability of a rate hike in February. 36

39 Pictet Funds (LUX) - CHF Bonds MANAGEMENT REPORT IN 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter The Swiss government bond market came under some pressure throughout the opening quarter this year, generating a minus return. After closing 2005 at 2.0%, the yield on the benchmark 10-year Confederation bond moved up by almost 50 basis points. The tension on Swiss bonds can be blamed on the prospect of the Swiss National Bank s ongoing hikes in the cost of borrowing, given the evidence of an upswing in the Swiss economy, and on the downturn in sentiment on American and European bond markets. Yield spreads relative to euro-zone government bonds, generally speaking, remained comparatively stable although they did widen a touch on short-dated maturities. As expectations of hikes in central banks interest rates hardened more as regards the euro and the dollar, the Swiss franc lost ground. This tended to cancel out any advantage from hikes in the SNB s interest rates, as evidenced by the fall on the barometer measuring overall monetary conditions. In Q2 2006, the Swiss bond market once again recorded a negative quarterly return, with the strength of the Swiss economy, the modest uptick in inflation and the ongoing normalisation of Swiss interest rates being largely to blame. Bond yields rose by just over 30 basis points the length of the yield curve. The correction that swept through stock markets from mid-may onwards did give the bond market a temporary reprieve, enabling it to recover on the back of renewed interest from institutional investors for very long-dated bonds, which smoothed the process of placing various new issues from OKB, RFF (French railways), the EIB, Hypo Essen, Depfa ACS and BNG. However, in the last couple of weeks of June, yields began climbing up again on the back of stronger economic statistics than had been expected. The shape of the Swiss bond yield curve barely altered over the second quarter whilst the yield spread between Confederation bonds and equivalent German Bunds remained reasonably steady. Over the summer months, the Swiss bond market was in good form, with yields travelling downwards across the board, with the sole exception of 2-year maturities. The Swiss bond market has benefited from the favourable path being tracked by its US and European counterparts. The strength of the Swiss economy, which prompted the Swiss National Bank (SNB) to raise interest rates again in early September, did not appear to impinge on long-dated bonds. The slope on the yield curve continued to flatten out and yield spreads relative to Eurozone government bonds widened a fraction. Interest rates went up during this quarter with a big flattening move. This change in the structure of the curve occurred in the 2-year segment. The findings from the various surveys suggest that Switzerland s economy should remain fairly robust over the next few quarters. Nevertheless, GDP growth is projected to be less vigorous in 2007, as exemplified by the forecasts produced by the Swiss Secretariat for Economic Affairs (SECO), with estimates for GDP growth of 2.7% for 2006 and 1.7% in both 2007 and Market outlook The Swiss bond market should continue to track a parallel path in step with its US and European counterparts. With bond yields already very low and considering the prospect of short-money rates being raised further, bonds are likely to experience a less comfortable ride ahead. As inflation remains mild, the yield curve can be expected to retain its flattish profile and, should the Swiss economy slow down, it might even invert very slightly. 37

40 Pictet Funds (LUX) - EUR Government Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review Third Quarter Fourth Quarter The yield curve on the Eurozone bond market continued to flatten out in response to ongoing hawkish comments about monetary tightening from various ECB policymakers, which kept up the pressure on the short-dated end of the yield spectrum, whereas long bonds benefited from the driftdown in US Treasury yields and a deceleration in inflation in Europe. In these circumstances, the yield on 10-year Bunds dropped 45 basis points from its early-july level; the spread relative to equivalent US T- bonds narrowed a little, closing from 115 to 88 basis points. Over the fourth quarter, the market remained convinced that the slowdown in US was gathering pace, supporting the picture of a two-speed economy, while the ECB kept the door open for further tightening in Euroland. The dichotomy between the two central banks led to an out-performance of the US market and a flattening of both curves. In December, European market operators shifted their focus from a slowdown in the US to further ECB hikes, on the back of better than expected data in the US and very strong number in Europe. Market outlook The financial markets have removed part of the rate decrease previously priced in the US curve, but should continue to run with the US soft-landing scenario as long as data will remain mixed. In Europe, a sharp rise in ECB-related policy expectations is being seen with a high probability of a rate hike in February. 38

41 Pictet Funds (LUX) - EUR Inflation Linked Bonds MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review Fourth Quarter Inflation numbers in the USA were surprisingly down, with the core inflation rate falling for the second month in a row in November. Against this background, the modest decline in oil prices managed to push down inflation break-even thresholds on US paper. Quite the opposite pattern was in evidence in the Euro-zone, with inflation break-even points on the rise despite the ECB s decision to lower its expectations as regards inflation in The patent strength of the UK economy resulted in inflation numbers that, yet again, turned out to be surprisingly high. Break-even points on inflation-linked bonds thus stretched wider, settling quite some way above the 3% mark. Lastly, in Japan, inflation break-even thresholds remained well damped down, slightly below the 0.50% mark, and holding quite steady after hovering inside a very narrow band of fluctuation over the month of December. Market outlook The hike in Germany s VAT rate as of 1 January 2007, with all the possible knock-on effects on pay bargaining, will cement a solid floor under inflation break-even points. Despite this, uncertainties about the sustainability of the current robust rate of economic growth, coupled with the ECB s monetary tightening, argue against any serious escalation in inflation materialising. The main theme for 2007 is thus likely to remain the structural demand coming from pension funds, especially in the Netherlands. Even though announcements suggest that the volume of inflation-linked bonds being issued by government Treasuries should be fairly steady y-o-y in 2007 (USD69bn in the USA; EUR43bn in Europe), they are likely to act opportunistically, flexibly adjusting the supply of bonds if demand were to balloon. 39

42 Pictet Funds (LUX) - EUR Asset Backed Securities MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review Third Quarter Fourth Quarter GDP growth in the euro-zone worked out at 0.9% in Q2 and is likely to remain robust in the latter half of this year if we go by the results of economic and business surveys. Even though the barometers have come off their recent peaks of late, they are still showing high readings consistent with economic growth running slightly above potential for the last couple of quarters of 2006, although the downturn registered by the leading economic indicators does seem to indicate that this economic cycle may well have already peaked. Next year, economic growth in Europe is likely to be less robust, given the aftermath of rises in the ECB s interest rates, the imminent hike in Germany s VAT rate and repercussions from the slowdown in the USA. Moreover, fiscal policy is set to be less expansionary. At present, the consensus is forecasting GDP growth of 2.5% for this year, followed by 1.8% in Inflation decelerated much more throughout the third quarter than had been expected on the back of the slide in oil prices. The headline y-o-y rate fell from 2.5% in June to 1.8% in September (according to preliminary estimates), thus falling below the ECB s official target. The underlying rate of inflation has held very steady, although it could inch up a little in the coming months considering the rude health of the euro-zone economy. However, inflationary pressures should remain fairly subdued owing to ongoing stiff domestic and international competition as well as a still high jobless rate, which is tending to keep a lid on pay rises. New-issue volumes of asset-backed securities in Europe for the month of September reached nearly 51 billion euro across various jurisdictions and asset classes including residential mortgage-backed securities (UK, AUD, PT), commercial mortgage-backed securities and SMEs. All in all, it brings the volume of new issues since the start of the year to 285bn euro as at end-september, or a 25% year-on-year increase. The markets had no problem absorbing these unusually high volumes as there was ample demand and spreads remained unchanged. With more than EUR 175 billion on the primary market, the fourth quarter 2006 was astonishingly lively, particularly in the residential mortgage-backed securities (RMBSs) and collateralised loan obligations (CLOs) sectors. Another record year has been completed, with European ABS/CDO issuance at around 470billion, exceeding 2005 by 35% and beating even the most optimistic expectations. Despite the healthy growth rate of this market, spreads remained firm during the year and the average spread differential among the different tranches of a single transaction contracted, as market participants were hunting for decent yield in a benign environment. Market outlook Investors attention should turn to the secondary market, given that the primary market is usually virtually non-existent at the start of the year. 40

43 Pictet Funds (LUX) - Emerging Local Currency Debt MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review Third Quarter Fourth Quarter Over the third quarter of 2006, the emerging local debt market posted a mixed performance. July and August saw the asset class post a good performance. In July, emerging local debt was generally immune to the heightened geopolitical risks and the widespread underperformance of other risky asset classes as lower Fed rate-hike expectations provided a strong support. August was a firm month, even in the face of global growth concerns following a stream of weaker-than-anticipated data from the US and falling commodity prices. However, volatility rose in this period and continued into September as growth concerns persisted and commodity prices continued to fall. The rise in political noise in the emerging market universe (in Thailand, Hungary, Brazil, Ecuador and the Czech Republic) was another negative factor weighing on emerging markets. The market posted a small negative return. While the Latin American segment of the market was the strongest-performing over the quarter, the volatile period in September saw it underperform the Asian segment. Meanwhile, the currencies that came under the most pressure were those with current account deficits and vulnerability to commodities. The South African Rand was the weakest performer, depreciating by approximately 6 percent in the month. The Turkish and Czech market segments were also underperformers. At the start of the quarter, the fund was long both emerging market bonds and currency. However, on mounting concerns regarding growth and commodities, the fund began to pare back the exposure to currencies and moved closer to the benchmark. Over the fourth quarter of 2006, the local currency denominated emerging debt markets posted stellar performances. Emerging market instruments across the board rallied into the year end, shrugging off the short-lived increase in risk aversion associated with the unwind of the developed currency carry trade towards the end of November. There were a number of factors supporting this development. In addition to robust fundamentals (as exemplified by various rating upgrades), the global backdrop was favourable. Although concerns regarding US growth did arise, emerging markets were resilient to this, reflecting the increased structural strength of many countries that limits the impact of external shocks. Moreover, subsequent US data emerged that showed that there was still some momentum in the economy. The robust global growth outlook remained on course. Meanwhile, risk appetite generally persisted, with equities posting a good performance and the VIX index moving lower. This created an overall favourable environment for emerging market risk. Turning to asset-class specific events, the extremely positive net demand dynamic in local emerging market debt continued. Flows into the market continued apace as growth in local pension funds and foreign investors interest in the asset class remains extremely strong. The strong performance was across the board over the quarter, with the strong performance of the Middle East and Africa regions, followed by Europe, of particular note. Market outlook Given the recent rally in the market, valuations are tight and there may be a bout of short-term weakness. Nonetheless, we remain constructive on local currency denominated emerging debt in the medium term. We expect the global backdrop to remain favourable and emerging country fundamentals to stay on course. Moreover, we believe that the extremely positive supply and demand dynamics are going to continue into

44 Pictet Funds (LUX) - Asian Local Currency Debt MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review Third Quarter Fourth Quarter Despite a few concerns regarding risk positions at the start of the month, September was a very positive month for Asian Bond markets. The bulk of the returns came from bond positions as data confirming a soft landing in the US with slower inflation provided a positive backdrop for global bonds. Lower oil prices helped alleviate concerns about higher inflation in the region, which in turn provided a further boost to domestic bonds in all Asian countries. Apart from the Chinese Yuan, most Asian currencies generated little performance as the yen continued to weaken gradually. The Chinese Yuan was allowed to appreciate faster than in previous months. The G7 and IMF meetings and the visit by US Treasury Secretary Paulsen contributed to focusing Chinese policy makers on the currency. During September, the monthly appreciation by the yuan was the most since after the July 2005 revaluation. Indonesian bonds continued to perform strongly as Bank Indonesia cut its policy rates by 50bp to 11.25% and continued signalling further rate cuts. The Philippines also saw good performance as oil prices fell and the fiscal situation showed further signs of improvement. The Peso also traded on the stronger side during most of the month. The Indian Rupee also performed well as the equity market continued its rally. Indian fixed income was supported by the fall in the inflation rate and by the decline in global oil prices. The Thai market was negatively affected by the unexpected coup d etat on 20 September. Stocks, the Thai Baht and bonds initially sank on the news, but bonds recovered rapidly as expectations of rate cuts increased. Asian corporate spreads widened slightly in September. A second FED pause did not result in renewed risk-taking on concerns over possible fallout from hedge fund closures and the Thai coup. Thai sovereign and corporate spreads widened initially, but reverted to pre-coup levels within two days, testament to the strong credit fundamentals in place. We had no exposure to Thailand, and continued to benefit from exposure to local currency credits which rallied in September in line with the onshore bond markets. In terms of positions, we benefited from our long-duration positions in Indonesia, the Philippines and Malaysia. At the end of the month we took profits on our long Chinese Yuan position. Our medium-term view remains positive, and we will seek to re-enter the position at more favourable levels. Towards the end of the month, we reduced our longduration position in Malaysia and began hedging some of the fund s overall duration risk. We bought back the remaining short position in the Thai Baht and following the coup d etat we covered our small underweight in short-term Thai bonds. We remain completely underweight Chinese and Taiwanese bonds. The fourth quarter was an excellent quarter for Asian bond markets, with all countries in the index registering positive returns. This is in spite of market negative events such as tightening of reserve requirements by the Reserve Bank of India and Bank of Korea, and capital control measures attempted by the Bank of Thailand. Market Outlook Given the recent rally in the market, valuations are tight and there may be a bout of short-term weakness. Nonetheless, we remain constructive on local currency denominated emerging debt in the medium term. We expect the global backdrop to remain favourable and emerging country fundamentals to stay on course. Moreover, we believe that the extremely positive supply and demand dynamics are going to continue into

45 Pictet Funds (LUX) - European Equity Selection MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter European markets have made a solid start to 2006, with a clear divergence in stock and sector performance. With low corporate-debt financing costs, under-leveraged balance sheets and attractive valuations, M&A activity became a prominent feature, particularly in the utilities sector. Increased earnings numbers and strengthening domestic indicators also helped drive bullish sentiment. During the quarter, European markets saw a sharp correction and increased nervousness. By June, however, the markets were exhibiting clear signs of calm after the storm. Volatility and volumes were low, with investors still unsure of the macro environment caused by the changing outlook for US interest rates, which had led to the decline in indices. We saw clear signs of a continued shift towards defensive sectors. World equity markets began to recover from the lows of May and June towards the end of July and into August, with one of the main drivers of this robust performance being the re-appraisal of US inflation and interest-rate risk following the Fed s decision to leave rates unchanged. The drop in oil prices clearly undermined the energy sector, and the price of gold and other industrial metals has also fallen slightly. European equity markets continued their rally during the fourth quarter, pushing indices to record highs despite dollar weakness and bond market jitters prompting a modest sell-off in November. With the majority of companies meeting or beating expectations the markets performed strongly in December with cyclicals rising sharply. Market outlook A benign macro environment, extended profits cycle, attractive equity valuations and the continued de-equitisation theme all support our bull case for modest earnings growth and a small re-rating giving 15% returns for We expect slowing, not collapsing, economic and profit growth. Margin fears appear overdone and we target 5-8% earnings growth. 43

46 Pictet Funds (LUX) - Small Cap Europe MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter Small & mid caps have outperformed large caps by over 5% this quarter. Momentum and earnings outlook remains positive, with earnings upgrades for small & mid caps outpacing those seen in large caps for the third month in a row. This trend holds true across all the regional markets in Europe. Markets corrected sharply in May and June on the back of nervousness in respect of the global interest rate environment and a tightening of liquidity conditions (stemming in part from the ending of monetary easing and coincident withdrawal of liquidity by the Bank of Japan). Having retreated by 17% from its May peak, our benchmark index rallied sharply in the last two weeks of the quarter to end the period with a fall of 5.7% - the worst quarter since After a sharp correction in May, the markets remained volatile in June and July. In August and September, equity markets resumed their positive performance, continuing to benefit from declining inflation fears and lower commodity prices, which indeed have made further Fed tightening unlikely and have increased the probability of a soft landing of the US economy. In the third quarter, small caps started to outperform large again, and in September, while large caps were up 1.6%, small caps were up 3.6%. European small caps continued their strong performance in December, resulting in a strong fourth quarter with the index reaching record highs despite the US dollar s weakness and some worries in the bond markets during the quarter. Small caps put in a particularly robust showing, with our benchmark returning 13.2% over the quarter, ahead of large caps as represented by the Eurofirst 300 Index, which returned just 6.2%. Market outlook A stable macro economic environment, attractive small-cap valuations adjusted for their higher earnings growth prospects versus large caps, and continued de-equitisation should offer a 15% return this year in small caps. We expect a strong fourth quarter earnings season and positive 2007 guidance from our company managements, which will result in bottom-up analyst forecast upgrades for the next 12 months. 44

47 Pictet Funds (LUX) - Emerging Markets MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter The first quarter of 2006 saw emerging markets [+12.0%] start the year much as they had finished 2005, with strong absolute performance and again easily relatively outperforming developed markets [+6.6%]. Much of this strength came from the growing popularity of the so called "BRICs" markets of Brazil [+21.5%], Russia [+28.4%], India [21.3%], and China [+21.4%]. On a regional basis, Latin America was the strongest region [+15.6%], while Asia [+9.5%] lagged as a result of relative weakness in Korea and Taiwan. Emerging markets suffered a difficult period-the first negative quarter since 2Q04 and the first time in two years that MSCI EM has underperformed the MSCI World. The selldown of emerging market stocks was precipitated by fears of inflation and slowing global growth and fuelled by a partial reversal in the liquidity bubble that had built up in the first four months of the year. As a consequence of global risk aversion, those markets with the poorest economic fundamentals suffered the most from weakness in both equity prices and their local currencies. Turkey, Hungary, South Africa and India were the poorest performers, whilst China, Taiwan and Russia were the notable outperformers. Emerging markets delivered healthy returns over the third quarter, with the MSCI Emerging Markets index rising by 4.9%. Emerging stocks rose during July and August as confidence grew that the period of rising US interest rates was drawing to a close and investors looked to pick up those emerging equities that had been unduly punished in the early summer correction. This trend stalled in August as investors began to price in the potential downside from moderating US consumer demand and a peak in the commodity cycle. The removal of the Prime Minister of Thailand, mass demonstrations against the Premier of Hungary and a deepening of accusations regarding political corruption in the Brazilian administration also served to temper investor appetite for emerging equities towards the end of the period. Emerging markets performed very well over the final quarter of the year with the MSCI Emerging Markets index posting a gain of 17.6%. For 2006 as a whole, emerging equities have risen by an impressive 32% and stand 39% above the low of the year registered on June 13th. The year 2006 marked the sixth consecutive year of out-performance from emerging equities over their developed peers, whilst for the first time since the 1987 inception of the MSCI Emerging Markets index, emerging stocks have risen for four consecutive years. Emerging stocks have enjoyed an increasingly supportive background over the last few months of the year due to growing expectations of a soft landing in the US economy, benign bond markets, ongoing M&A activity and generally firm commodity prices. These conditions have led to a resumption of net inflows into emerging market funds. China, Indonesia, Argentina and Poland were the notable outperformers over the quarter and in contrast Korea, Thailand, Israel and Turkey rose less than the MSCI Emerging Markets index over the period. 45

48 Pictet Funds (LUX) - Emerging Markets MANAGEMENT REPORT ON 31 DECEMBER 2006 Market outlook Whilst the long-term fundamentals for emerging markets continue to provide optimism for stock price gains over 2007 there are two key areas of concern. The first is external in nature - stemming from the trajectory of the US economy - whilst the second is the emergence of some valuation risk within certain emerging stocks. Consequently, decelerating economic activity could create share performance headwinds for a significant portion of developing companies over the coming months. 46

49 Pictet Funds (LUX) - Eastern Europe MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter Strong global liquidity continued to fuel the rally in emerging European markets especially at the beginning of the quarter. Hungary lagged the other markets due to the government s reluctance to implement tighter fiscal policy and hence the weakening currency. Turkey continued to attract large foreign flows although at a slower pace. The market picked up at the end of February and has corrected since, driven by worries of risk premium contraction. With the oil price closing the quarter in the low sixties, Russia again performed strongly. Despite the sluggish start the Polish market rebounded at the end of March. It was a rollercoaster quarter in our region as the bull rally that began the year ran out of steam in early May, with the markets quickly giving up all the gains year-to-date. The sell off began as a result of inflation concerns in the US but was extended as investors alternated between fears of lower growth and higher inflation. Worst performers have been the risk trades, namely commodities, mid/small caps and emerging markets. Turkey, where the fund was underweight, was the worst performer as market weakness has been exacerbated by a correction of nearly 25% in the currency. Having bottomed out at the beginning of June, the markets susbsequently bounced nearly 20% in USD terms, but still ended the quarter below end of March values. The market recovery that started in late June continued into the third quarter as a pause in Fed rate hikes led to a more subdued view of Fed policy. During the July recovery period, Poland was by far the best performer in the region on the back of an improving macroeconomic environment, making it a top performer in the quarter. The region was able to recoup most of its losses from the June lows before a shift towards concerns over US growth led to some of these gains being given back in the latter half of the quarter. Moreover, the 22% fall in Brent oil from its high during the quarter led to an underperformance of the Russian market. Eastern European markets continued to make progress in the fourth quarter with the Central European region leading the way. Postponement of EU talks halted Turkey s recovery from November s lows, while a weaker oil price towards the end of the year weighed on sentiment over the Russian market. Strong domestic liquidity continued to drive the Polish market throughout the quarter while in Hungary corporate news flow from OTP led the way. Market outlook With inflation benign, a soft landing still looking likely and liquidity still abundant, the key drivers of the region remain in place. The extent to which the global economy (especially China) can offset the slowdown in the US is a key question and a potential risk to commodity prices and our region. Russia remains susceptible to this risk, however the domestic story remains very strong. 47

50 Pictet Funds (LUX) - Europe Index MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter European markets have made a solid start to 2006, with a clear divergence in stock and sector performance. With low corporate-debt financing costs, under-leveraged balance sheets and attractive valuations, M&A activity became a prominent feature, particularly in the utilities sector. Increased earnings numbers and strengthening domestic indicators also helped drive bullish sentiment. During the quarter European markets saw a sharp correction and increased nervousness but by June the markets were exhibiting clear signs of calm after the storm. Volatility and volumes were low, with investors still unsure of the macro environment caused by the changing outlook for US interest rates, which had led to the decline in indices. We saw a clear signs of a continued shift towards defensive sectors. World equity markets began to recover from the lows of May and June towards the end of July and into August, with one of the main drivers of this robust performance being the re-appraisal of US inflation and interest rate risk following the Fed s decision to leave rates unchanged. The drop in the price of oil clearly undermined the energy sector, and the price of gold and other industrial metals has also fallen slightly. European equity markets continued their rally during the fourth quarter, pushing indices to record highs despite dollar weakness and bond market jitters prompting a modest sell-off in November. With the majority of companies meeting or beating expectations the markets performed strongly in December with cyclicals rising sharply. Market outlook A benign macro environment, extended profits cycle, attractive equity valuations and the continued de-equitisation theme all support our bull case for modest earnings growth and a small re-rating giving 15% returns for We expect slowing, not collapsing, economic and profit growth. Margin fears appear overdone and we target 5-8% earnings growth. 48

51 Pictet Funds (LUX) - USA Index MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter The first quarter saw the equity market post a solid start to the year. Investors have begun to discount a return to the Goldilocks economic scenario of the 1990s when economic growth was strong enough to support corporate earnings but not so strong as to prompt an aggressive response from the Fed. The equity market retreated in the second quarter as investors were concerned about the outlook for inflation and confusing messages emanating from the Federal Reserve. Technology stocks led the decline, followed by healthcare as the orthopaedic stocks were hit by subpoenas from US antitrust investigators. More defensive sectors such as utilities and consumer staples posted gains. The US equity market posted further gains in September, wrapping up a successful third quarter for equity investors. Bond investors also fared well as the yield on 10-year bonds declined from 5.15% to just over 4.6% following the Federal Reserve meeting on 20 September, which left rates unchanged at 5.25% for the second consecutive month. The US equity market made further upward progress in December, bringing to a close a solid fourth quarter and double-digit returns for the year. Government bond yields remained flat at 4.6% for the quarter after hitting a low of 4.42% in early December. The FOMC kept interest rates on hold at 5.25% at the October and December meetings, following somewhat weak economic data. Recent inflation data for November has been moderate, raising expectations of a cut in interest rates by mid In recent weeks the US dollar has shown some early signs of recovery against the euro and Japanese yen. Market outlook Equity valuations remain attractive versus other asset classes and the outlook for earnings has improved, and with approximately 40% of S&P 500 earnings sourced overseas a weaker US dollar will help support earnings in We do harbour some concerns for the domestic economy in 2007, but the Fed has some breathing room to cut interest rates if the weakness is pronounced. Liquidity remains abundant and further corporate activity can be expected next year. 49

52 Pictet Funds (LUX) - European Sustainable Equities MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter European markets have made a solid start to 2006, with a clear divergence in stock and sector performance. With low corporate-debt financing costs, under-leveraged balance sheets and attractive valuations, M&A activity became a prominent feature, particularly in the utilities sector. Increased earnings numbers and strengthening domestic indicators also helped drive bullish sentiment. During the quarter European markets saw a sharp correction and increased nervousness but by June the markets were exhibiting clear signs of calm after the storm. Volatility and volumes were low, with investors still unsure of the macro environment caused by the changing outlook for US interest rates, which had led to the decline in indices. We saw a clear signs of a continued shift towards defensive sectors. World equity markets began to recover from the lows of May and June towards the end of July and into August, with one of the main drivers of this robust performance being the re-appraisal of US inflation and interest rate risk following the Fed s decision to leave rates unchanged. The drop in the price of oil clearly undermined the energy sector, and the price of gold and other industrial metals has also fallen slightly. European equity markets continued their rally during the fourth quarter, pushing indices to record highs despite dollar weakness and bond market jitters prompting a modest sell-off in November. With the majority of companies meeting or beating expectations the markets performed strongly in December with cyclicals rising sharply. Market outlook A benign macro environment, extended profits cycle, attractive equity valuations and the continued de-equitisation theme all support our bull case for modest earnings growth and a small re-rating giving 15% returns for We expect slowing, not collapsing, economic and profit growth. Margin fears appear overdone and we target 5-8% earnings growth. 50

53 Pictet Funds (LUX) - Japan Index MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter Despite volatile months of trading throughout January and February, the Japanese stock market ended the quarter higher following a sharp rebound towards the end of March. Early in the quarter, mid and small capitalisation stocks reacted negatively to the Livedoor scandal, while uncertainties regarding a shift in monetary policy by the Bank of Japan weighed on markets until 9 March. It was then that the Bank of Japan ended its policy of quantitative easing (the requirement for banks to maintain high levels of deposits at the Bank of Japan). Although finishing on a stronger note, Japanese equities were the poor performer in what was a tough quarter for global markets. With inflationary fears stoking concerns of a synchronised tightening of interest rates, the Japanese market succumbed to profittaking from foreign investors. The other negatives weighing on the market were conservative forecasts for corporate profits, accounting scandals within the condominium sector and the downfall of Mr Murukami (a high-profile corporate activist who is being investigated for insider dealing). Conversely, economic data was good - positive revisions to GDP, improving bank lending, a tightening labour market and strong capital spending. During the quarter, Japanese equities made little progress. It was a quarter dominated by both external events (heightened geopolitical risks, uncertainty over US monetary policy and weakening commodity prices) and domestic developments (better-thanexpected quarterly earnings and disappointing economic data, most notably machinery orders and inflation). This fed through to the bond market where the yield on the 10-year JGB ended the quarter at 1.68% and the yen depreciated to 118 against the dollar and 150 against the euro. As expected, in what was largely a symbolic move, the Bank of Japan ended its zero-interest-rate policy on 14 July, and on the political front, Shinzo Abe was voted in as the new leader of the LDP party and as Prime Minister. Japanese equities staged a late rally from the end of November to end the year in positive territory. The recent appreciation showed Japan clawing back some of its laggard performance against global markets. Throughout 2006, the valuation discrepancy of large versus small and mid caps was unwound as the latter continued their downward path. With the exception of the Tankan business sentiment index, economic indicators were mixed during the quarter, calling into question the pace and extent of additional rate hikes. While reported interim earnings were encouraging, companies downbeat guidance for 2H weighed on investor sentiment. Market outlook In the near term, the market will continue to be influenced by both international events (US economic indicators, currency fluctuations, commodity prices, etc) and domestic macroeconomic indicators with their resulting implications for economic growth and future monetary policy. 51

54 Pictet Funds (LUX) - Pacific (Ex Japan) Index MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter A market review is not provided for this fund since no active bets are taken against its benchmark. A market review is not provided for this fund since no active bets are taken against its benchmark. A market review is not provided for this fund since no active bets are taken against its benchmark. A market review is not provided for this fund since no active bets are taken against its benchmark. Market outlook Our indexation methodology is geared towards building a portfolio that is as close as possible to a fully replicated portfolio, i.e. a portfolio that has the same number of stocks with the same weights as in the benchmark. Whether a full-replication solution can be achieved depends on the cash in/outflow, the trading liquidity of individual stocks in the index, the minimum trade size compatible with reasonable transaction costs and round lot constraints. 52

55 Pictet Funds (LUX) - Telecom MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter The first quarter of 2006 was positive for equities, with the MSCI World gaining 6.8%. As was the case in 2005, investor attention was focused on natural resource and emerging markets. Telecom stocks lagged the overall market, which was up 5.5%, with US operators being a positive contributor to performance following consolidation and European operators being a negative contributor following France Telecom and Vodafone s reduction in guidance and actions by the EU which appear likely to impact wireless roaming. Second Quarter Third Quarter Fourth Quarter The second quarter of 2006 was a volatile period for equities with the market correcting sharply in May following a relatively consistent upward trend since the beginning of The correction was prompted by increasing concern over interest-rate increases and resulted in a reduced appetite for risky assets. Telecom shares outperformed the broader market in this period of volatility, ending the quarter up slightly. The attractive valuation and strong cash flow of the telecom sector attracted capital seeking a safer haven. The third quarter of 2006 was a positive period for equities, with the market recovering its losses of the second quarter. The market reacted positively to comments from the Federal Reserve that inflationary threats have subsided and is now anticipating the end of monetary tightening. The telecom sector performed well, gaining 8% over the quarter, well ahead of the MSCI World 4% as the sector s cash flows attracted the interest of investors. The fourth quarter of 2006 was a positive period for equities with the market continuing to rally following a slight correction in the second quarter. The broader market continued to make new highs albeit led by different sectors including telecoms rather than energy and materials stocks. The telecom sector performed well gaining 12.9% over the quarter, well ahead of 8.4% for the MSCI World, as investors were attracted to the sector s cash flows. Market outlook Telecom is today amongst the cheapest sectors in terms of static valuation metrics. The market still believes that the emergence of new communication technologies will destroy the incumbent operator s cash flow generation abilities in the near future. We do not share this view and believe that this competitive pressure will force the operators to gradually change their business models. 53

56 Pictet Funds (LUX) - Biotech MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter The biotech sector had a good first quarter with the Nasdaq Biotech Index finishing up 6.4%. The move was led by mid and small caps, signalling an improvement in investor confidence. A better US equity environment (the Nasdaq Composite Index was up 6.1%) and the naming of Andrew von Eschenbach as new FDA Commissioner by President Bush (considered as a good step forward for a permanent nomination by the congress) might account for the heightened spirits. This increase is also motivated by tangible progress: strong uptake of Amylin s Byetta LAR, the priority review granted to Celgene s Revlimid in multiple myeloma, clinical advances in Hepatitis C for Vertex and Anadys, and the positive phase III data for Alexion s Eculizumab are just a few significant examples. Also, the lack of unexpected regulatory setbacks, with the possible exception of Cephalon s Sparlon and NPS Pharmaceutical s Preos, might have contributed to the increase in investor confidence. As world equity markets declined amidst fears of a global economic slowdown and higher interest rates, biotechnology equities suffered as investors flocked to less volatile sectors. The Nasdaq Biotech Index lost 11.7% during the quarter, underperforming the Nasdaq Composite Index (-7.2%) and large-cap pharmaceuticals, which gained 2.2%. News flow was generally positive, with the approvals of Genzyme s Myozyme, Celgene s Revlimid, Genentech s Lucentis, Biogen s Tysabri and Merck/MedImmune s HPV vaccine. The main disappointment was the non-approval of Neurocrine Biosciences Indiplon and Pfizer s subsequent severance of its partnership with Neurocrine. On the corporate front, M&A activity resumed as AstraZeneca bid for Cambridge Antibody Technologies and Novartis launched a takeover offer for Neutec. Human Genome Sciences and Vertex both signed lucrative deals with big pharma (Novartis and Johnson and Johnson respectively). Despite the rather marginal progression of the Nasdaq Biotech Index over the last three months (+1.5%), newsflow turned out to be fairly positive for biotechnology equities. On the regulatory front, one obstacle to the confirmation of Andrew von Eschenbach was removed, with the FDA s long overdue approval of the plan B pill (day-after contraceptive pill). Two significant approvals were also granted: Gilead s Atripla for HIV and Amgen s Vectibix (formerly Panitumumab) for colorectal cancer. Clinical results included positive data from Genzyme s Campath in multiple sclerosis and Pharmion/ GPC s Satraplatin in cancer. Quarterly earnings dissipated any doubts that arose from Q1 earnings reports and, finally, M&A activity continued with Genzyme s bid for Anormed, Millennium s generous counter-bid and Serono s sale to German Merck KGaA. Recovering from a tough spring and early summer, biotechnology equities rose on an unprecedented wave of mergers and acquisitions. The Nasdaq Biotech Index gained 5.9%, bringing the sector to the top of its three-year trading range and finishing the year at a meager +1%. A total of seven major transactions were reported during the quarter, with a median premium of close to 50%. On the clinical front, news was mixed with failures from Renovis (Cerovive - stroke), Telik (Telcyta - lung cancer) and Onyx (Nexavar - melanoma), all of which were high risk projects. Positive results were reported by Actelion (Tracleer - PAH), Dynavax (Hep B vaccine) and Intermune (Pirfenidone - IPF) while Celgene and Alexion provided further positive data on Revlimid (vascular cancers) and Soliris (PNH) at the American Society of Haematology meeting. 54

57 Pictet Funds (LUX) - Biotech MANAGEMENT REPORT ON 31 DECEMBER 2006 Market outlook The continuous furry of M&A deals with significant premium reinforced our view that the current valuations in biotechnology are very compelling. Despite the recent run-up, valuations are still near their 10-year lows with large caps and emerging biotechs both trading at 23x 2007E EPS and approximately 6x sales on average. With good quarterly results, new product approvals and further pipeline progress, fundamentals remain extremely strong. We continue to see solid and sustainable growth for long-term investors in the sector. 55

58 Pictet Funds (LUX) - Premium Brands MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter The first quarter was relatively strong for high-end consumer goods. US consumer spending was robust and Asia continued to be a major driver for growth. A stronger Japanese economy also contributed to rising demand for luxury goods from this region. Overall, companies in our universe benefited from a favourable environment and gave a confident outlook for the remainder of the year. The second quarter was marked by a sharp market downturn in May, on the back of inflation fear and the concern that the US Federal Bank would continue to increase interest rates. All equity markets were impacted as concerns of a slower global growth prevailed and risk aversion increased amongst investors. Premium Brands companies were part of this sell-off in May, as investors decided to "take profit" on stocks having well performed and to reduce exposure to the consumer discretionary sector. The third quarter was positive for consumer stocks. The Fed s decision to leave rates unchanged and the sharp fall in the price of oil over the quarter clearly contributed to a positive backdrop for consumer spending. Concerns over a major US economic slowdown have now receded into the background somewhat, and companies active in premium brands reported solid first-half results overall, which also calmed investors. The fourth quarter 2006 was strong for consumer stocks in general. Third quarter results were overall positive and above market expectations. The economic environment was supportive with no increase in US interest rates, a relatively stable oil price and the relief that no major economic slowdown in the US actually occurred. Companies active in premium brands published solid results and continued to benefit from strong demand. Market outlook Premium-brand companies continue to experience strong demand from consumers, and the strong results seen within the segment as of late give us confidence for the future. These companies benefit from the power of their brand globally as well as from a strong aspirational appeal. The investment environment remains solid and valuation levels are reasonable. 56

59 Pictet Funds (LUX) - Water MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter Equity investments in the international water market continued to outperform the world equity market. Water stocks have risen despite increasing long term interest rates. The stocks were supported by a continued re-rating of the sector, continued M&A activity and a rally in late cyclical environmental services stocks. The fund s performance closely shadowed the equity market environment, which was itself driven by concerns over inflation, rising interest rates, higher equity price volatilities and a weaker USD outlook. In general, equity prices continued the downward trend, which began in May, but started to recover losses through June. The fund s performance rebounded strongly after a lacklustre 2nd quarter, reflecting the recovery path of global equity markets. Good first-half results in most of the sectors, a pause in interest rate increases following a better outlook on the inflation front and a decrease in oil prices have helped equity markets to reach new highs. The fund continued on its upward trend of outperforming the broader equity index. Following the lows at the end of June and consolidating at different stages throughout the quarter, the fund s performance mirrored the global equity markets. Reports remain reassuring across most of the sectors, a encouraging outlook on the inflation and a decrease in energy prices have helped equity markets reaching new highs. Market outlook The need to invest in water infrastructure continues unchanged as pressures for water services continue unabated. In the short term, we expect the recent M&A and private equity interest to continue, which should provide support for the fund. 57

60 Pictet Funds (LUX) - Indian Equities MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter The Indian market continued its bull run with a 21% return this quarter in dollar terms, well outpacing broader emerging markets. Liquidity remains the key driver, with strong fund inflows from both foreign and domestic investors. Politics have been quite muted, despite key state elections forthcoming in West Bengal and Tamil Nadu, while the annual budget was something of a non-event. Global markets were hit by a sharp correction in May and, after its strong run and worrisome valuations, India was particularly hard hit. Domestic traders rushed to close out derivatives positions, which then led to sales from long-only investors. But June saw stabilisation and a return to (mild) inflows. Year-to-date, foreign money remains at a net inflow of USD 2.5 billion. The reserve bank s hawkish stance was reflected in a surprise 25 basis-point interest rate rise. Headlines early in the quarter were dominated by the Mumbai commuter train bombings, which led to 183 tragic deaths. But India has recovered from such atrocities before, and the nation again shrugged off the attack. Although erratic monsoons mean that food grain output may be mediocre this season, July industrial production grew +12.4% year-on-year, a ten-year high. This stimulated interest and, after weak flows in July and August, September saw a return to net inflows (of a billion dollars). Rebounding from the June bottom, this quarter saw the benchmark return +18.4%. The year ended with $800 million of outflows by foreign investors in December, after record inflows in the previous two months. For the full year, India saw inflows of $8.3 billion. After experience sharp volatility in early December, in which the Sensex index lost 7% in three days, the index ended slightly up on the month at just under 1%. As a result India underperformed both Asia and emerging markets for the second month in a row, but still ended up as one of the better-performing emerging markets for 2006 with performance a little under 50% for the year. Market outlook India s growth continues apace, with recent data suggesting core infrastructure industries are growing at 9.5% and expected to accelerate further. With visibility improving in some of these infrastructure sectors and consumption in mobile telephony and autos continuing to be strong, high valuations continue to be supported. However, liquidity is tightening via interest rate rises and adjustments to the cash reserve ratio. Elections in the largest state, Uttar Pradesh, are on the horizon and could conceivably trigger a general election. Of course, wider risks such as a deeper US slowdown would hurt Indian stocks along with the rest of the world. 58

61 Pictet Funds (LUX) - Japanese Equities MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter Despite volatile months of trading throughout January and February, the Japanese stock market ended the quarter higher following a sharp rebound towards the end of March. Early in the quarter, mid- and small-capitalisation stocks reacted negatively to the Livedoor scandal, while uncertainties regarding a shift in monetary policy by the Bank of Japan weighed on markets until March 9th. It was then that the Bank of Japan ended its policy of quantitative easing (the requirement for banks to maintain high levels of deposits at the Bank of Japan). Although finishing on a stronger note, Japanese equities were the poor performer in what was a tough quarter for global markets. With inflationary fears stoking concerns of a synchronised tightening of interest rates, the Japanese market succumbed to profittaking from foreign investors. The other negatives weighing on the market were conservative forecasts for corporate profits, accounting scandals within the condominium sector and the downfall of Mr Murukami (a high-profile corporate activist who is being investigated for insider dealing). Conversely, economic data was good - positive revisions to GDP, improving bank lending, a tightening labour market and strong capital spending. During the quarter, Japanese equities made little progress. It was a quarter dominated by both external events (heightened geopolitical risks, uncertainty over US monetary policy and weakening commodity prices) and domestic developments (better-thanexpected quarterly earnings and disappointing economic data, most notably machinery orders and inflation). This fed through to the bond market where the yield on the 10-year JGB ended the quarter at 1.68% and the yen depreciated to 118 against the dollar and 150 against the euro. As expected, in what was largely a symbolic move, the Bank of Japan ended its zero-interest-rate policy on 14 July, and on the political front, Shinzo Abe was voted in as the new leader of the LDP party and as Prime Minister. Japanese equities staged a late rally from the end of November to end the year in positive territory. The recent appreciation showed Japan clawing back some of its laggard performance against global markets. Throughout 2006, the valuation discrepancy of large versus small and mid caps was unwound as the latter continued their downward path. With the exception of the Tankan business sentiment index, economic indicators were mixed during the quarter, calling into question the pace and extent of additional rate hikes. While reported interim earnings were encouraging, companies downbeat guidance for 2H weighed on investor sentiment. Market outlook In the near term, the market will continue to be influenced by both international events (US economic indicators, currency fluctuations, commodity prices, etc) and domestic macroeconomic indicators with their resulting implications for economic growth and future monetary policy. 59

62 Pictet Funds (LUX) - US Equities MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter The first quarter saw the equity market post a solid start to the year. Investors have begun to discount a return to the Goldilocks economic scenario of the 1990s when economic growth was strong enough to support corporate earnings but not so strong as to prompt an aggressive response from the Fed. The equity market retreated in the second quarter as investors were concerned about the outlook for inflation and confusing messages emanating from the Federal Reserve. Technology stocks led the decline, followed by healthcare as the orthopaedic stocks were hit by subpoenas from US antitrust investigators. More defensive sectors such as utilities and consumer staples posted gains. The US equity market posted further gains in September, wrapping up a successful third quarter for equity investors. Bond investors also fared well as the yield on 10-year bonds declined from 5.15% to just over 4.6% following the Federal Reserve meeting on 20 September, which left rates unchanged at 5.25% for the second consecutive month. The US equity market made further upward progress in December, bringing to a close a solid fourth quarter and double-digit returns for the year. Government bond yields remained flat at 4.6% for the quarter after hitting a low of 4.42% in early December. The FOMC kept interest rates on hold at 5.25% at the October and December meetings, following somewhat weak economic data. Recent inflation data for November has been moderate, raising expectations of a cut in interest rates by mid In recent weeks the US dollar has shown some early signs of recovery against the euro and Japanese yen. Market outlook Equity valuations remain attractive versus other asset classes and the outlook for earnings has improved, and with approximately 40% of S&P 500 earnings sourced overseas a weaker US dollar will help support earnings in We do harbour some concerns for the domestic economy in 2007, but the Fed has some breathing room to cut interest rates if the weakness is pronounced. Liquidity remains abundant and further corporate activity can be expected next year. 60

63 Pictet Funds (LUX) - Asian Equities (Ex Japan) MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Asian markets rallied strongly in the first quarter, with the FEF Ex Japan benchmark rising just over 8% and all markets in positive territory. Most Asian currencies also rallied over this period - in particular the acceleration in the appreciation of the Chinese renminbi was noteworthy. Over the quarter, China was amongst the best-performing markets (+21.4%), as mining, base metals and domestically orientated stocks drove the Chinese H share index up. The country s unparalleled strength in its external sector, its stable growth performance and its gargantuan FX reserve build-up now approaching 37% of GDP continued to inject liquidity into the financial system. In contrast, the two large North Asian markets lagged the region with both Korea (+5%) and Taiwan (+2.6%) underperforming - the former consolidating after strong 2005 gains and the latter digesting weak technology seasonality, worsening consumer credit problems coupled with the politicisation of the whole issue. In South East Asia, Indonesia was the stellar performer (+25.5%) as the strength in the currency together with stabilising inflation caused by the dismantling of fuel subsidies in 2005 underpinned increasing confidence in the government s macroeconomic policies. Thailand managed to eke out a +7.8% return, mostly front-loaded into January as the political stalemate surrounding prime minister Thaksin continued to hold back the market. After a long and solid run, Asian equities, together with most other asset classes, suffered during the second quarter as investors contended with an inflation scare in America, rising rates and withdrawal of monetary accommodation triggering a deleveraging cycle in the US consumer sector. Over the quarter the FEF Ex Japan closed down a relatively uneventful 0.7%, but this masks the rollercoaster ride over the period. The magnitude of the correction from the peak in May to the trough in June was of the order of 18% in Asia - vicious both in terms of speed and intensity. Equity declines of any significance are almost always global in nature. However, during the current sell-off, Asia underperformed developed markets (MSCI World % peak to trough) which was expected, since the region outperformed the World index significantly from the 2003 lows. In a wider GEM universe, however, it is noteworthy that as risk appetites downshifted, Asia materially outperformed its Global Emerging Market counterparts (- 24.2% peak to trough) where weaker economic fundamentals which were hit the hardest. Within the Asian Equity universe, the greater China region was the most resilient: Taiwan (+0.74%), China (+1.88%) and Hong Kong (-0.1%). South Korea (-3%) was hit by slowing growth concerns especially for the most externally orientated sectors. South East Asia was hit across the board as risk aversion climbed, with Thailand (-5.1%) and the Philippines (-6.5%) the worst performers. World equity markets recovered in the third quarter as stagflation concerns receded in the US, bond yields plunged and the relentless rise in the commodity complex finally gave way to a correction led by oil, natural gas and gold. The regional MSCI AC Far East ex Japan benchmark rose just over 6% over the quarter, during which South East Asia dominated the headlines with the latest political announcement of a military coup in Thailand against the government of Thaksin Shinawatra. Arguably a deadlock has been broken in a political process that was in an impasse all year long. This turns us slightly more bullish, not least because of cheap valuations and peaking interest rates, but risks remain as constitutional changes could possibly undermine future stability. 61

64 Pictet Funds (LUX) - Asian Equities (Ex Japan) MANAGEMENT REPORT ON 31 DECEMBER 2006 Fourth Quarter The fourth quarter marked a solid advance of 15.7% in the MSCI AC Far East Ex Japan. Of note was the spectacular move in China (+35.9%) driven by China s stable macro backdrop, strong growth, ample liquidity and expectation of accelerating RMB appreciation. The IPO frenzy unfolding with the listing of the major Chinese banks further augmented the market s performance. Southeast Asian markets delivered +20% returns over the quarter with the exception of Thailand (+1.9%) which produced a heinous quarter with the announcement of capital controls, bombs going off on Christmas eve and a dreadful political situation post coup. Taiwan put in a respectable performance (+12.9%) on stabilizing consumer sentiment, earnings recovery in technology and the appetite of private equity firms to inject capital into Taiwan. South Korea (+4.8%) was again a laggard having accrued significant relative underperformance over 2006 as currency strength compounded by the tight monetary stance of the BOK and North Korea, and socialist government policy remained of concern. Market outlook 2006 performance for Asian equities was volatile but finished the year on a high note - in excess of 30%. As we said in our last newsletter, while anticipating a setback in the short term given overbought conditions and complacency in markets - our positive outlook for 2007 remains unchanged and we expect mid teens returns for the region. Strong and relatively stable growth should persist in 2007 while overall equity valuations remain reasonable. The marked improvement in corporate profitability alongside greater credit expansion supporting a domestic demand boom will continue to be powerful drivers. This will support ongoing multiple expansion in the region. We expect a wide spread between markets and a volatile path with favoured markets being Taiwan, China, Philippines Malaysia and Indonesia. We are more optimistic about Korea than Thailand. 62

65 Pictet Funds (LUX) - Global Equity Selection MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter World equity markets have made a strong start to 2006, with all major regions posting significant gains. Despite the twin issues of higher interest rates and commodity prices, excess liquidity has flowed into equity markets and prices have been squeezed higher by a reduction in equity supply, caused by aggressive share buybacks and a surge in merger and acquisition activity. We noted the upturn in M&A activity last quarter, but the number of deals has exploded this quarter; there have been 10 announced deals of over $10 billion this quarter, double the level in Q AT&T s agreed acquisition of BellSouth leads the way with a value of over $80 billion, closely followed by the announced utility deals in Europe. We have also seen the return of the retail investor in both Japan and USA. The second quarter was marked by declines in world equity markets and a sell-off in bonds. Inflation concerns assumed centre stage, with US monthly CPI tracking toward the top end of expectations and investors continuing to worry about the inflationary effects of strong growth in China and confusing messages emanating from the Federal Reserve. The inflation scare was partly an excuse for profit-taking in global equities after an uninterrupted rise post the 2003 trough - in developed markets the MSCI World had risen 79% in dollar terms from the 2003 trough before the recent correction and the equivalent rise for the MSCI emerging index was 164%. High oil prices and rising interest rates both at the short and long end have also combined to produce a significant future drag on the Global economy, giving investors cause for concern on growth as well as inflation. As investors reduced risk, emerging markets led the decline, followed by Japan among the major developed markets. Overall, the dollar weakened during the quarter as the peaking of the short interest-rate cycle in the US came into focus. The world equity market posted further gains in the month of September, wrapping up a successful third quarter for equity investors. Bond investors also fared well, as the yield on US 10-year bonds declined from 5.15% to just over 4.6% following the Federal Reserve meeting on 20 September, which left rates unchanged at 5.25% for the second consecutive month. The gain in equity markets was relatively broad-based; the Japanese market did lag, however. The world equity market made further upward progress in December bringing to a close a solid fourth quarter and double-digit return for the year. The advance was broad based with all major markets participating. US government bonds yields remained flat at 4.6% for the quarter after hitting lows of 4.42% in early December. The FOMC left its interest rates unchanged at 5.25% at the December meeting following somewhat weak economic data. Recent inflation data for November was moderate, raising expectations of a cut in interest rates by mid In recent weeks the US dollar has shown signs of stabilization against the euro and Japanese yen. Market outlook Our outlook is largely unchanged. At current bond yields, equity valuations are attractive and the outlook for earnings has improved. We do harbour some concerns regarding the US economy in 2007 and will have to watch this area closely. The Fed, however, does have room to cut rates if weakness is pronounced. On the positive side liquidity remains abundant and we expect further corporate activity in 2007; on the negative side volatility continues to drop and this could be a sign of growing complacency amongst equity investors. 63

66 Pictet Funds (LUX) - Continental European Equities MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter European markets have made a solid start to 2006 with a clear divergence in stock and sector performance. With low corporate-debt-financing costs, under-leveraged balance sheets and attractive valuations M&A activity became a prominent feature particularly in the utilities sector. Increased earnings numbers and strengthening domestic indicators also helped drive bullish sentiment. During the quarter, European markets saw a sharp correction and increased nervousness. By June, however, the markets were exhibiting clear signs of calm after the storm. Volatility and volumes were low, with investors still unsure of the macro environment caused by the changing outlook for US interest rates, which had led to the decline in indices. We saw clear signs of a continued shift towards defensive sectors. World equity markets began to recover from the lows of May and June towards the end of July and into August, with one of the main drivers of this robust performance being the re-appraisal of US inflation and interest rate risk following the Fed's decision to leave rates unchanged. The oil price fall clearly undermined the energy sector, while gold and other industrial metals have also fallen slightly. European equity markets continued their rally during the fourth quarter, pushing indices to record highs despite dollar weakness and bond market jitters prompting a modest sell-off in November. With the majority of companies meeting or beating expectations the markets performed strongly in December with cyclicals advancing sharply. Market outlook A benign macro environment, extended profits cycle, attractive equity valuations and continued de-equitisation theme all support our bull case for modest earnings growth and a small re-rating giving 15% returns for We expect slowing, not collapsing, economic and profit growth. Margin fears appear overdone as we target 5-8% earnings growth. 64

67 Pictet Funds (LUX) - Greater China MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter The Greater China region kicked off the year with a strong performance of 8.5%. China was the second best performer in the Asian context, rising more than 20%. Only Indonesia rose more than China in Asia. On the other hand, Taiwan again was the worst regional market, showing a mere 2% return QTD. Hong Kong stayed defensive with a below-average return of 6.65%. Energy and materials were the best performing sectors in the quarter with double digit performance, while technology struggled to stay in positive territory. Amidst volatile global market conditions in the second quarter, the Greater China region managed to eke out a slight positive return. China was the best performing market (+1.9%), followed by Taiwan (+0.7%) and Hong Kong (-0.1%). After a strong April, all markets corrected sharply in May on concerns of slowing global growth and rising US interest rates. The Greater China region rose strongly during this quarter, up nearly 6%, led by the Chinese market s strong performances. Hong Kong has also performed well, up more than 5%. Taiwan was almost flat for the quarter, owing to the sell-down in July, but then experienced a substantial turnaround and was the best performer in September. The China-Hong Kong markets continued to be pushed by benign macro numbers and RMB appreciation expectations. The fourth quarter is usually the strongest period for the region s equity market as the liquidity flow is the highest at this time, and 2006 was no exception. The MSCI Golden Dragon index rose by more than 20% over the quarter, led by the strong performance in the Chinese shares. MSCI China went up 35% in the last 3 months, outpacing the low double-digit rises of Hong Kong and Taiwan by a long margin. Market outlook Some consolidation should be expected after the breath-taking 4Q06. Chinese financials look increasingly vulnerable to profit-taking, as ICBC has become the second largest bank in the world by market cap just behind Citigroup. We are cautious on China shares in the short term but remain relatively positive for the full year. We think a correction now is a healthy sign as the market is approaching frothy levels. 65

68 Pictet Funds (LUX) - Japanese Equity Selection MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter Despite volatile months of trading throughout January and February, the Japanese stock market ended the quarter higher following a sharp rebound towards the end of March. Early in the quarter, mid and small capitalisation stocks reacted negatively to the Livedoor scandal, while uncertainties regarding a shift in monetary policy by the Bank of Japan weighed on markets until 9 March. It was then that the Bank of Japan ended its policy of quantitative easing (the requirement for banks to maintain high levels of deposits at the Bank of Japan). Although finishing on a stronger note, Japanese equities were the poor performer in what was a tough quarter for global markets. With inflationary fears stoking concerns of a synchronised tightening of interest rates, the Japanese market succumbed to profittaking from foreign investors. The other negatives weighing on the market were conservative forecasts for corporate profits, accounting scandals within the condominium sector and the downfall of Mr Murukami (a high-profile corporate activist who is being investigated for insider dealing). Conversely, economic data was good - positive revisions to GDP, improving bank lending, a tightening labour market and strong capital spending. Japanese equities made little progress during a quarter that was dominated by both external events (heightened geopolitical risks, uncertainty over US monetary policy and weakening commodity prices) and domestic developments (better-than-expected quarterly earnings and disappointing economic data, most notably machinery orders and inflation). This fed through to the bond market where the yield on the 10-year JGB ended the quarter at 1.68% and the yen depreciated to 118 against the dollar and 150 against the Euro. As expected, in what was largely a symbolic move, the Bank of Japan ended its zero-interest-rate policy on 14 July, and on the political front, Shinzo Abe was voted in as the new leader of the LDP party and Prime Minister. Japanese equities staged a late rally from the end of November to end the year in positive territory. The recent appreciation showed Japan clawing back some of its laggard performance against global markets. Throughout 2006, the valuation discrepancy of large versus small and mid caps was unwound as the latter continued their downward path. With the exception of the Tankan business sentiment index, economic indicators were mixed during the quarter, calling into question the pace and extent of additional rate hikes. While reported interim earnings were encouraging, companies downbeat guidance for 2H weighed on investor sentiment. Market outlook In the near term the market will continue to be influenced by both international events (US economic indicators, currency fluctuations, commodity prices, etc) and domestic macroeconomic indicators with their resulting implications for economic growth and future monetary policy. 66

69 Pictet Funds (LUX) - Emerging Markets Index MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter The first quarter of 2006 saw emerging markets [+12.0%] start the year much as they had finished 2005, with strong absolute performance and again easily relatively outperforming developed markets [+6.6%]. Much of this strength came from the growing popularity of the so called "BRICs" markets of Brazil [+21.5%], Russia [+28.4%], India [21.3%], and China [+21.4%]. On a regional basis, Latin America was the strongest region [+15.6%], while Asia [+9.5%] lagged as a result of relative weakness in Korea and Taiwan. Emerging markets suffered a difficult period-the first negative quarter since 2Q04 and the first time in two years that MSCI EM has underperformed the MSCI World. The selldown of emerging market stocks was precipitated by fears of inflation and slowing global growth and fuelled by a partial reversal in the liquidity bubble that had built up in the first four months of the year. As a consequence of global risk aversion, those markets with the poorest economic fundamentals suffered the most from weakness in both equity prices and their local currencies. Turkey, Hungary, South Africa and India were the poorest performers, whilst China, Taiwan and Russia were the notable outperformers. Emerging markets delivered healthy returns over the third quarter, with the MSCI Emerging Markets index rising by 4.9%. Emerging stocks rose during July and August as confidence grew that the period of rising US interest rates was drawing to a close and investors looked to pick up those emerging equities that had been unduly punished in the early summer correction. This trend stalled in August as investors began to price in the potential downside from moderating US consumer demand and a peak in the commodity cycle. The removal of the Prime Minister of Thailand, mass demonstrations against the Premier of Hungary and a deepening of accusations regarding political corruption in the Brazilian administration also served to temper investor appetite for emerging equities towards the end of the period. Emerging markets performed very well over the final quarter of the year with the MSCI Emerging Markets index posting a gain of 17.6%. For 2006 as a whole, emerging equities have risen by an impressive 32% and stand 39% above the low of the year registered on June 13th. The year 2006 marked the sixth consecutive year of out-performance from emerging equities over their developed peers, whilst for the first time since the 1987 inception of the MSCI Emerging Markets index, emerging stocks have risen for four consecutive years. Emerging stocks have enjoyed an increasingly supportive background over the last few months of the year due to growing expectations of a soft landing in the US economy, benign bond markets, ongoing M&A activity and generally firm commodity prices. These conditions have led to a resumption of net inflows into emerging market funds. China, Indonesia, Argentina and Poland were the notable outperformers over the quarter and in contrast Korea, Thailand, Israel and Turkey rose less than the MSCI Emerging Markets index over the period. Market outlook Whilst the long-term fundamentals for emerging markets continue to provide optimism for stock price gains over 2007 there are two key areas of concern. The first is external in nature - stemming from the trajectory of the US economy - whilst the second is the emergence of some valuation risk within certain emerging stocks. Consequently, decelerating economic activity could create share performance headwinds for a significant portion of developing companies over the coming months. 67

70 Pictet Funds (LUX) - Generics MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Second Quarter Third Quarter Fourth Quarter Steady merger and acquisition activity during the first quarter of 2006 led to positive industry performance of 6%, ahead of the S&P 500 (+4%) and in line with the Nasdaq Composite index (+6%). India s leading drugmaker Ranbaxy Laboratories (+20%) announced it would acquire Terapia, Romania s largest independent generic company, for $324 million. This is one of three overseas acquisitions made in a single week by Ranbaxy, which also bought the Italian generic business of GlaxoSmithKline and Belgian generic company Ethimed. Meanwhile, Zentiva (+17%) recently completed its acquisition of Sicomed (Romania, +20%), Dr Reddy s bought Betapharm (Germany), Actavis (Iceland, +6%) made offers to acquire Pliva (+45%) and Sindan (Romania), and Watson Pharmaceuticals (-12%) made a bid to acquire Andrx (+44%). Last, but certainly not least, Sanofi-Aventis recently acquired a 25% stake in Zentiva. Settlement activity between patent challengers and brand manufacturers continued this quarter. Sanofi-Aventis and Bristol-Myers Squibb settled with Apotex over Plavix, Cephalon (-7%) announced a final patent settlement with Barr (+1%) for Provigil, and Shire (+20%) ended a patent dispute with Impax Laboratories (-7%) over attention deficit hyperactivity disorder (ADHD) drug Adderral XR. Current fears of rising inflation coupled with a slowing economy in the U.S. pressured equities in general during the second quarter. The Nasdaq Composite gave up 7% of its value whereas the S&P 500 lost 2%. Specific to generics, newsflows was mixed with - on one hand - the rejection by the Supreme Court of the FTC appeal aiming to eliminate patent settlements between brand manufacturers and patent challengers, while - on the other hand - the extrapolation by the market of Merck s decision to aggressively price its brand Zocor to all future 6-month exclusivities. Although overlooked by the market, the approval of Omnitrope (first bio-similar drug) by both the EMEA and the FDA bodes well for the complex molecule opportunity. On balance, our generics universe retreated by approximately 6%. The generics industry gained 6% during the third quarter. Eastern Europe companies were particularly strong on the back of solid underlying growth for generics and a firm activity in mergers & acquisitions. Leading players such as Zentiva, Krka and Gedeon Richter increased by 22%, 19% and 12% respectively. On top of that, the bidding war over Pliva shows the strategic value for international players to have an exposure to this region. The Middle East North Africa (MENA) region offers a similar opportunity, as measured by Hikma s 26% rise. Disappointments mainly came from the US, especially from companies exposed to commodity-type generics as well as from earnings misses such as Sepracor (-15%). On the legal front, Forest (+ 31%) won a major victory on the Lexapro patent litigation, whereas Biovail (-35%) suffered from a US district Court ruling allowing Anchem to sell a generic version of Wellbutrin. The momentum of large pharmaceutical companies continued, supported by second-quarter earnings surprises and product approvals. After a difficult spring, the generics industry was able to recover in the second half of the year with an 11% gain, finishing up the year at +9%. U.S. Election results last November, with Democrats now controlling both Houses, contributed positively. Top performers in the fourth quarter were KOS (+58%) and Connetics (+60%), both of which were acquired, and Biovail (+39%) following the announcement of the restructuring of its sales force. Laggards were specialty pharma Endo (-15%) on a possible Lidoderm generic threat, Alkermes (-16%) due to a disappointing Vivitrol launch, as well as generics company Taro (-25%) after being delisted from the Nasdaq. 68

71 Pictet Funds (LUX) - Generics MANAGEMENT REPORT ON 31 DECEMBER 2006 Market outlook Pure generic players face intense pricing competition and one logical way to overcome this situation is through economies of scale. The recently heightened activity in mergers and acquisitions is expected to continue until leading companies reach efficient cost structures. Companies located in Eastern Europe, MENA (Middle East North Africa) countries, or Asia could also be appealing takeover targets given their low cost structures, brand sales business models, and presence in large domestic markets for generics. Generics in Japan, a potentially huge market that is currently not well exploited, show some signs of take-off following the recent political support for the industry. Finally, the opportunities for generic versions of complex molecules or biosimilars are profiling well for 2007 with some potentially major approvals. The industry remains attractively valued at only 17x 2008E earnings, with expected sales and earnings growth of around 20% over the next 5 years. Coupled with further consolidation, the potential for multiple expansion is real. 69

72 Pictet Funds (LUX) - Japanese Mid-Small Cap MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review First Quarter Second Quarter Third Quarter Fourth Quarter Despite rapid recovery in March, the TOPIX mid to small cap index and other emerging markets could not offset a significant plunge during February, or avoid a continuous flight to large cap stocks of quality, underperforming the TOPIX and TOPIX Large 100 index for the quarter. Overall smaller cap markets hardly responded to better-thanexpected Q3 results, as investors reduced exposure to them due to liquidity risk and credibility risk, particularly after the Livedoor scandal of illegal disclosure and trading. Despite an initial upturn in the market following a buoyant economic outlook in April, the TOPIX mid- to small-cap index and other emerging markets continued to slide down owing to the stronger JPY/USD rate, rising long-term interest rates, and more conservative-than-expected earning forecasts by companies for FY06. In particular, the TSE2nd, the JASDAQ index, the OSE Hercules and the TSE Mothers index significantly underperformed larger-cap indices following concerns over the negative impact of the arrest of Murakami, who is CIO of the Murakami Fund. While global markets discounted further monetary tightening in response to Mr Bernanke s comments at the FOMC and rebounded towards the end of June, the Japanese small-cap market hardly offset the declines of bottoming out,, and we consider the current situation as a good opportunity to select high-growth companies at reasonable valuation via bottom-up research activities. Although the Japanese small-cap markets rebounded in August owing to the relatively favourable FY06 1Q earnings results, the TOPIX small-cap index and other emerging markets declined again in September and, as a result, underperformed the TOPIX and large 100 index in the 3rd quarter of In particular, the TSE2nd, JASDAQ index, OSE Hercules and TSE Mothers index significantly underperformed larger-cap indices, as supply-demand conditions did not improve further in September and the small-cap market continued to hang over from long margin positions. Although the Japanese small-cap markets rebounded in December due to the good price appreciation in global equity markets, the benchmark TPX400SM index underperformed the TOPIX and large 100 index in the fourth quarter of In particular, the smallercap indices such as TSE2nd, JASDAQ, OSE Hercules and TSE Mothers significantly underperformed larger-cap indices, as these indices declined in the 4th quarter of It seems that the supply-demand conditions did not improve further in October and the small-cap market continued to hang over from long margin positions in November. Market outlook Since the Japanese equity market is lagging well behind the US and European equity markets, we expect that the Japanese equity market will be favoured by foreign investors. In terms of the Japanese small-cap market, it might have bottomed out in November as many individual investors unwound their long margin position in November. Furthermore, we expect Japanese small-cap stocks to outperform the largecap stocks in the near future as the valuations of Japanese small-cap stocks is now relatively attractive compared to large-cap stocks in terms of PER, taking into account the higher earnings growth for the small-cap companies. 70

73 Pictet Funds (LUX) - Emerging Markets Large Cap MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review First Quarter Emerging markets had an explosive 1st quarter, with the MSCI EM index up 11.5%, outperforming the MSCI World index for the 7th consecutive quarter. Countries with heavy material and energy exposure tended to be among the best performers, with Russia [+28.3%], China [+21.4%], Brazil [+20.2%], and South Africa [17.4%] leading the pack. Laggards included Israel [-3.8%], Taiwan [+2.6%] and South Korea [+3.9%]. Second Quarter Emerging markets suffered a difficult quarter-the first negative quarter since 2Q04. Furthermore, this quarter marked the first time in two years that MSCI EM underperformed the MSCI World. The selldown of emerging market stocks was precipitated by fears of inflation and slowing global growth as the near defunct term "stagflation" crept back into the common vernacular. In addition, the sharp correction in emerging markets can be explained by a partial reversal in liquidity bubble that was fuelled by over US$35bn in fresh money that came into the asset class in the first four months of the year. As a consequence of global risk aversion, the sell-off was fast, furious and largely indiscriminate (at least on a sector basis). Third Quarter Fourth Quarter Emerging markets delivered healthy returns over the third quarter, with the MSCI Emerging Markets index rising by 4.9%. Emerging stocks rose over July and August as confidence grew that the period of rising US interest rates was drawing to a close and investors looked to pick up those developing equities that had been unduly punished in the early summer correction. This trend stalled in August as investors began to price in the potential downside from moderating US consumer demand and a peak in the commodity cycle. The removal of the Prime Minister of Thailand, mass demonstrations against the Premier of Hungary and a deepening of accusations of political corruption in the Brazilian administration also served to temper investor appetite for emerging equities towards the end of the period. Emerging markets performed very well over the final quarter of the year with the MSCI Emerging Markets index posting a gain of 17.6%. For 2006 as a whole, emerging equities have risen by an impressive 32% and stand 39% above the low of the year registered on June 13th marked the sixth consecutive year of out performance from emerging equities over their developed peers whilst for the first time since the 1987 inception of the MSCI Emerging Markets index, emerging stocks have risen four consecutive years. Emerging stocks have enjoyed an increasingly supportive background over the last few months of the year due to growing expectations of a soft landing in the US economy, benign bond markets, ongoing M&A activity and generally firm commodity prices. These conditions have led to a resumption of net inflows into emerging market funds. China, Indonesia, Argentina and Poland were the notable out performers over the quarter while in contrast Korea, Thailand, Israel and Turkey rose less than the MSCI Emerging Markets index over the quarter. Market outlook Whilst the long-term fundamentals for emerging markets continue to provide optimism for stock price gains over 2007 there are two key areas of concern. The first is external in nature - stemming from the trajectory of the US economy, whilst the second is the emergence of some valuation risk within certain emerging stocks. Consequently, decelerating economic activity could create share performance headwinds for a significant portion of developing companies over coming months. 71

74 Pictet Funds (LUX) - Absolute Return Global Diversified MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review Second Quarter Third Quarter Fourth Quarter The quarter under review was one of contrasts, with higher volatility being a noteworthy feature. April saw a continuation of the uptrend that had prevailed since last autumn, but at the beginning of May markets suffered a severe correction, notably the perceived riskier asset classes (emerging markets, small caps, commodities and energy). The MSCI All Country World Equity index lost 12.3% in USD terms from its peak reached at the beginning of May. This correction was triggered by Fed rates passing the 5% threshold and by action on the part of the Bank of Japan to drastically reduce liquidity. A rebound took place in equity markets around mid June and accelerated during the last two days of the quarter after the remarks by the Fed Chairman at the last FOMC meeting. Bonds markets declined in April until mid-may, whereafter they served as a safer haven until mid-june before reverting to their decline. Credit spreads started to widen in the second half of June. The third quarter of 2006 was very positive for both equities and bonds, following macroeconomic data that pointed to a scenario of slower growth and, consequently, reduced inflationary pressure. Equity markets rallied: the MSCI AC World equity market index in local currency showed a positive quarterly return of 5.13%. Fixed income markets behaved well, too: the Citigroup World Government Bond Index in local currency gained 2.76%. Investment-grade and high-yield credit indices showed quarterly returns between 2% and 3%. Commodity markets collapsed, closing with a loss of around 15.5% for the quarter. Low oil prices should contribute to an easing of the environment on financial markets over the coming months. The fourth quarter was a very positive one for equities. The MSCI AC World equity market index in local currency showed a positive quarterly return of 7.68%. Emerging markets gained 14.65%, North American markets 7.08%, Pacific markets 7.54% and European markets 6.90%. For bonds the situation has been mixed. Low-risk fixedincome markets were flat for the quarter. On the contrary, the riskier high-yield and emerging bond segments generated positive returns between 3% and 4%. Commodity markets posted a quarterly loss of 4.5%, increasing the drawdown from the September 2005 peak to 24.7%. Market outlook Valuations in equity markets increased during the quarter: the P/E ratio of developed world equities increased to from at September end, remaining however way below its 20 year average of Corporate spreads narrowed to all-time lows, reflecting healthy company balance sheets. Liquidity preference among investors increased sharply in October, then in November retreated back to September-end levels. Yield curves continued their inverting trend, although term spreads, measured by the difference between the 10 year and 3 month interest rates, increased towards year end, compared to November-end readings, which were the lowest since October The year-end increase in terms of spreads might suggest that, for 2007, markets are discounting a lower probability of a slowdown in the global economy than earlier thought. 72

75 Pictet Funds (LUX) - Euroland Index MANAGEMENT REPORT ON 31 DECEMBER 2006 Market review Third Quarter Fourth Quarter World equity markets began to recover from the lows of May and June towards the end of July and into August, with one of the main drivers of this robust performance being the re-appraisal of US inflation and interest rate risk following the Fed s decision to leave rates unchanged. The drop in the price of oil clearly undermined the energy sector, and the price of gold and other industrial metals has also fallen slightly. European equity markets continued their rally during the fourth quarter, pushing indices to record highs despite dollar weakness and bond market jitters prompting a modest sell-off in November. With the majority of companies meeting or beating expectations the markets performed strongly in December with cyclicals rising sharply. Market outlook A benign macro environment, extended profits cycle, attractive equity valuations and the continued de-equitisation theme all support our bull case for modest earnings growth and a small re-rating giving 15% returns for We expect slowing, not collapsing, economic and profit growth. Margin fears appear overdone and we target 5-8% earnings growth. 73

76 Pictet Funds (LUX) - US Equity Selection MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review Third Quarter Fourth Quarter US Equity markets prospered, despite weak housing-market data, with most major indices posting solid single-digit gains for the third quarter of The largest gains occurred within the large capitalisation, value-oriented companies. Gains were boosted by the fall in oil prices worldwide, which helped many consumer-discretionary stocks rally. The worst performers were small capitalisation, growth-oriented companies, losing -1.8%. US Equity markets prospered during the fourth quarter with the broad market index, the Russell 3000 Index, returning 7.1%. The largest gains occurred with the small capitalization, value-oriented companies. In general, growth stocks underperformed value stocks in both the three most recent months and the calendar year. The most significant disparity for 2006 was within large capitalization companies, where the Russell 1000 Growth Index returned 9.1% compated to 22.2% for the Russell 1000 Value Index. Market outlook The US economy is clearly in the midst of a marked slowdown in growth. The primary contributors to the slowdown have been the steep fall in residential real estate activity, as well as secular and cyclical forces impacting the US auto industry. These two sector slowdowns will have reverberations throughout the national economy which we simply cannot analyze as of yet. The most plausible scenario suggests a slowdown in overall GDP growth to around 1.5%, which would be strong enough to support parts of the economy, but dangerously slow and painful for other sectors of the US economy. In most scenarios, commodity, industrial and consumer discretionary businesses will be negatively affected, while pockets of strength in traditional growth areas such as health care, services, staples and select technology will fare relatively better. We expect earnings and margin pressures to build up and relative earnings gains to improve for higher-quality large-cap growth stocks. For the first time in over seven years, the largecap growth asset class is poised favorably based on current valuations, with potential to move higher. 74

77 Pictet Funds (LUX) - Security MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review Fourth Quarter The security markets mirrored the global equity markets in December. A revival in U.S. consumer confidence with inflation remaining in check contributed to a strengthening in the USD. This set the stage for a robust equity market, carrying on its trend which started last June. Market outlook The changing world around us will continue to drive the need for tighter security measures. In the short term, we nonetheless expect the IT market to consolidate some of its recent solid performance. Recent management comments lead us to believe that most of the security markets should experience moderate growth in

78 Pictet Funds (LUX) - Quantam MANAGEMENT REPORT ON 31 DECEMBER 2006 Market Review Fourth Quarter The US equity market made further upward progress in December, bringing to a close a solid fourth quarter and double-digit returns for the year. Government bond yields remained flat at 4.6% for the quarter after hitting a low of 4.42% in early December. The FOMC kept interest rates on hold at 5.25% at the October and December meetings, following somewhat weak economic data. Recent inflation data for November has been moderate, raising expectations of a cut in interest rates by mid In recent weeks the US dollar has shown some early signs of recovery against the euro and Japanese yen. Market outlook Equity valuations remain attractive versus other asset classes and the outlook for earnings has improved, and with approximately 40% of S&P 500 earnings sourced overseas a weaker US dollar will help support earnings in We do harbour some concerns for the domestic economy in 2007, but the Fed has some breathing room to cut interest rates if the weakness is pronounced. Liquidity remains abundant and further corporate activity can be expected next year. 76

79 Pictet Funds (LUX) - Quantam MANAGEMENT REPORT ON 31 DECEMBER

80

81

82 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Combined EUR Bonds USD Bonds EUR EUR USD ASSETS Investments in securities at acquisition cost 20,845,297, ,115,826, ,501, Net unrealised gain/loss on investments 3,055,183, ,044, ,423, Investments in securities at market value (note 2) 23,900,480, ,100,781, ,078, Cash at banks 708,215, ,490, ,248, Interest receivable, net 84,057, ,317, ,182, Interest receivable on swaps (note 10) 225, , Interest receivable on credit default swaps (note 11) 3, Net unrealised gain on forward exchange contracts (note 9) 581, , Net unrealised gain on forward contracts (note 8) 1,952, Net unrealised gain on credit default swaps (note 11) 251, , Net unrealised gain on swaps (note 10) 2,140, Other assets 834, ,698,742, ,190,619, ,528, LIABILITIES Bank overdraft 6,048, Investment advisory fee payable (note 4) 47,809, ,672, , Interest payable, net Interest payable on swap contracts (note 10) 59, Interest payable on credit default swaps (note 11) 4, , Net unrealised loss on forward exchange contracts (note 9) 1,503, ,055, Net unrealised loss on forward contracts (note 8) 9,223, ,257, , Net unrealised loss on credit default swaps (note 11) 21, Net unrealised loss on swap contracts (note 10) 1,607, ,407, Taxe d abonnement payable (note 3) 2,610, , , Interest payable on repurchase agreements 129, , , Repurchase agreements 262,637, ,986, ,606, Fees payable 18,187, ,255, , Other liabilities 49, ,892, ,908, ,305, TOTAL NET ASSETS AS AT DECEMBER 31, ,348,849, ,023,710, ,223, TOTAL NET ASSETS AS AT DECEMBER 31, ,757,886, ,093, TOTAL NET ASSETS AS AT DECEMBER 31, ,545,614, ,866,

83 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 CHF Liquidity USD Liquidity EUR Liquidity EUR Corporate Bonds Global Emerging Debt CHF USD EUR EUR USD 784,020, ,890, ,026,779, ,793, ,270, ,733, , , ,488, ,022, ,286, ,448, ,027,750, ,305, ,292, ,940, ,197, ,715, ,033, ,480, ,051, ,989, ,520, ,949, ,926, , , , , , ,448, ,684, ,082,090, ,301, ,363, , , , , , , , , , , , , , , , , , , , ,223, , , , , , , , , , ,881, ,884, ,016, ,462, ,081,237, ,419, ,478, ,432, ,129, ,054,820, ,159, ,450, ,380, ,847, ,057,756, ,994, ,592,

84 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Global Bonds EUR High Yield EUR Short Mid-Term Bonds USD EUR EUR ASSETS Investments in securities at acquisition cost 41,753, ,135, ,671, Net unrealised gain/loss on investments 1,505, ,062, ,780, Investments in securities at market value (note 2) 43,258, ,198, ,890, Cash at banks 1,224, ,663, ,951, Interest receivable, net 558, ,945, ,667, Interest receivable on swaps (note 10) Interest receivable on credit default swaps (note 11) Net unrealised gain on forward exchange contracts (note 9) Net unrealised gain on forward contracts (note 8) Net unrealised gain on credit default swaps (note 11) Net unrealised gain on swaps (note 10) Other assets ,041, ,807, ,509, LIABILITIES Bank overdraft Investment advisory fee payable (note 4) 57, , , Interest payable, net Interest payable on swap contracts (note 10) Interest payable on credit default swaps (note 11) Net unrealised loss on forward exchange contracts (note 9) , , Net unrealised loss on forward contracts (note 8) 34, , Net unrealised loss on credit default swaps (note 11) Net unrealised loss on swap contracts (note 10) Taxe d abonnement payable (note 3) 2, , , Interest payable on repurchase agreements 1, , Repurchase agreements 4,702, ,876, Fees payable 28, , , Other liabilities ,827, ,470, , TOTAL NET ASSETS AS AT DECEMBER 31, ,214, ,337, ,853, TOTAL NET ASSETS AS AT DECEMBER 31, ,488, ,346, ,101, TOTAL NET ASSETS AS AT DECEMBER 31, ,458, ,611, ,747,

85 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 USD Short Mid-Term Bonds EUR Turbo Income CHF Bonds EUR Government Bonds EUR Inflation Linked Bonds USD EUR CHF EUR EUR 26,774, ,965, ,944, ,749, ,730, , , ,277, ,008, , ,781, ,467, ,666, ,740, ,279, ,545, ,985, , ,750, , , , ,696, ,563, , , , , , , ,772, ,123, ,665, ,058, ,104, , , , , , , , , , , , , , , , , , , , ,348, ,000, ,581, , , , , , , ,462, ,671, , ,594, ,718, ,661, ,993, ,075, ,509, ,226, ,763, ,315, ,128, ,056,

86 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 EUR Asset Backed Securities Emerging Local Currency Debt Asian Local Currency Debt EUR USD USD ASSETS Investments in securities at acquisition cost 23,048, ,848, ,949, Net unrealised gain/loss on investments 9, ,155, ,185, Investments in securities at market value (note 2) 23,058, ,004, ,134, Cash at banks 494, ,718, ,304, Interest receivable, net 117, , , Interest receivable on swaps (note 10) , , Interest receivable on credit default swaps (note 11) Net unrealised gain on forward exchange contracts (note 9) , , Net unrealised gain on forward contracts (note 8) , Net unrealised gain on credit default swaps (note 11) Net unrealised gain on swaps (note 10) , ,931, Other assets , ,670, ,303, ,520, LIABILITIES Bank overdraft Investment advisory fee payable (note 4) , , Interest payable, net Interest payable on swap contracts (note 10) Interest payable on credit default swaps (note 11) Net unrealised loss on forward exchange contracts (note 9) Net unrealised loss on forward contracts (note 8) , Net unrealised loss on credit default swaps (note 11) , Net unrealised loss on swap contracts (note 10) Taxe d abonnement payable (note 3) , , Interest payable on repurchase agreements 1, Repurchase agreements 1,002, Fees payable 8, , , Other liabilities ,012, , , TOTAL NET ASSETS AS AT DECEMBER 31, ,657, ,158, ,236, TOTAL NET ASSETS AS AT DECEMBER 31, TOTAL NET ASSETS AS AT DECEMBER 31,

87 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 European Equity Selection Small Cap Europe Emerging Markets Eastern Europe Europe Index EUR EUR USD EUR EUR 1,544,723, ,053, ,336,779, ,307, ,949, ,522, ,497, ,104,124, ,924, ,897, ,667,245, ,550, ,440,903, ,196,231, ,846, ,180, ,083, ,257, , , , , , ,712,428, ,636, ,440,903, ,214,497, ,786, ,953, ,890, ,032, ,343, ,600, , , , , , , ,424, , ,606, ,255, , ,556, ,299, ,167, ,009, , ,708,872, ,337, ,424,736, ,210,488, ,225, ,444, ,833, ,856,614, ,271,860, ,196, ,235, ,658, ,152,052, ,740, ,368,

88 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 USA Index European Sustainable Equities Japan Index USD EUR JPY ASSETS Investments in securities at acquisition cost 800,488, ,432, ,329,507, Net unrealised gain/loss on investments 150,589, ,427, ,736,757, Investments in securities at market value (note 2) 951,077, ,860, ,066,264, Cash at banks 3,061, , ,274, Interest receivable, net Interest receivable on swaps (note 10) Interest receivable on credit default swaps (note 11) Net unrealised gain on forward exchange contracts (note 9) Net unrealised gain on forward contracts (note 8) ,285, Net unrealised gain on credit default swaps (note 11) Net unrealised gain on swaps (note 10) Other assets 42, ,056, ,181, ,765, ,067,881, LIABILITIES Bank overdraft Investment advisory fee payable (note 4) 515, , ,288, Interest payable, net Interest payable on swap contracts (note 10) Interest payable on credit default swaps (note 11) Net unrealised loss on forward exchange contracts (note 9) Net unrealised loss on forward contracts (note 8) Net unrealised loss on credit default swaps (note 11) Net unrealised loss on swap contracts (note 10) Taxe d abonnement payable (note 3) 104, , ,918, Interest payable on repurchase agreements Repurchase agreements Fees payable 386, , ,616, Other liabilities ,005, , ,823, TOTAL NET ASSETS AS AT DECEMBER 31, ,175, ,408, ,020,057, TOTAL NET ASSETS AS AT DECEMBER 31, ,203, ,427, ,249,557, TOTAL NET ASSETS AS AT DECEMBER 31, ,530, ,203, ,479,526,

89 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Pacific (Ex Japan) Index Telecom Biotech Premium Brands Water USD USD USD EUR EUR 119,041, ,977, ,453,442, ,709, ,656,405, ,476, ,096, ,295, ,500, ,575, ,518, ,073, ,810,738, ,209, ,855,981, ,542, ,332, ,367, ,717, ,526, , , , , ,195, ,070, ,408, ,871,258, ,926, ,954,769, , , ,768, , ,976, , , , , , , , , ,517, , ,148, , , , ,773, , ,515, ,900, ,857, ,862,485, ,631, ,942,254, ,923, ,816, ,500,302, ,571, ,947, ,614, ,428, ,292,882, ,850, ,709,

90 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Indian Equities Japanese Equities US Equities USD JPY USD ASSETS Investments in securities at acquisition cost 404,518, ,932,562, ,076, Net unrealised gain/loss on investments 235,600, ,869,726, ,047, Investments in securities at market value (note 2) 640,119, ,802,288, ,123, Cash at banks 5,699, ,936,274, , Interest receivable, net Interest receivable on swaps (note 10) Interest receivable on credit default swaps (note 11) Net unrealised gain on forward exchange contracts (note 9) Net unrealised gain on forward contracts (note 8) Net unrealised gain on credit default swaps (note 11) Net unrealised gain on swaps (note 10) Other assets ,819, ,738,563, ,238, LIABILITIES Bank overdraft Investment advisory fee payable (note 4) 2,478, ,215, , Interest payable, net Interest payable on swap contracts (note 10) Interest payable on credit default swaps (note 11) Net unrealised loss on forward exchange contracts (note 9) Net unrealised loss on forward contracts (note 8) Net unrealised loss on credit default swaps (note 11) Net unrealised loss on swap contracts (note 10) Taxe d abonnement payable (note 3) 84, ,314, , Interest payable on repurchase agreements Repurchase agreements Fees payable 848, ,689, , Other liabilities ,412, ,218, , TOTAL NET ASSETS AS AT DECEMBER 31, ,406, ,406,344, ,130, TOTAL NET ASSETS AS AT DECEMBER 31, ,409, ,987,660, ,817, TOTAL NET ASSETS AS AT DECEMBER 31, ,571, ,961,851, ,870,

91 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Asian Equities (Ex Japan) Global Equity Selection Continental European Equities Greater China Japanese Equity Selection USD USD EUR USD JPY 1,784,358, ,893, ,676, ,134, ,924,039, ,909, ,706, ,971, ,628, ,264,108, ,134,268, ,600, ,647, ,762, ,188,148, ,052, ,208, ,049, ,172, ,943,404, , , , ,824, , ,140,336, ,814, ,697, ,548, ,146,377, ,259, , , ,644, ,257, , , , , , ,195, ,353, , , , ,431, ,755, , , ,106, ,053,883, ,132,580, ,398, ,344, ,441, ,092,493, ,669,584, ,215, ,781, ,862, ,148,524, ,122,920, ,389, ,019, ,709, ,597,555,

92 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Emerging Markets Index Generics Japanese Mid-Small Cap USD USD JPY ASSETS Investments in securities at acquisition cost 108,557, ,695, ,202,416, Net unrealised gain/loss on investments 44,012, ,601, ,103,406, Investments in securities at market value (note 2) 152,570, ,094, ,305,823, Cash at banks 1,537, ,004, ,504, Interest receivable, net Interest receivable on swaps (note 10) Interest receivable on credit default swaps (note 11) Net unrealised gain on forward exchange contracts (note 9) , Net unrealised gain on forward contracts (note 8) Net unrealised gain on credit default swaps (note 11) Net unrealised gain on swaps (note 10) Other assets ,107, ,103, ,679,328, LIABILITIES Bank overdraft Investment advisory fee payable (note 4) 82, , ,857, Interest payable, net Interest payable on swap contracts (note 10) Interest payable on credit default swaps (note 11) Net unrealised loss on forward exchange contracts (note 9) Net unrealised loss on forward contracts (note 8) Net unrealised loss on credit default swaps (note 11) Net unrealised loss on swap contracts (note 10) Taxe d abonnement payable (note 3) 9, , ,145, Interest payable on repurchase agreements Repurchase agreements Fees payable 105, , ,817, Other liabilities 25, , ,047, ,820, TOTAL NET ASSETS AS AT DECEMBER 31, ,883, ,056, ,646,507, TOTAL NET ASSETS AS AT DECEMBER 31, ,694, ,730, ,182,410, TOTAL NET ASSETS AS AT DECEMBER 31, ,844, ,261, ,874,

93 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) Emerging Markets Large Cap STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Absolute Return Global Diversified Euroland Index US Equity Selection Security USD EUR EUR USD USD 52,155, ,608, ,115, ,873, ,822, ,032, ,116, ,811, ,093, ,321, ,187, ,725, ,926, ,966, ,143, , ,714, ,120, ,271, , , , , ,522, ,523, ,928, ,094, ,415, , , , , , , , , ,361, , , , , , , , , , , ,029, , , , ,188, ,494, ,912, ,192, ,203, ,125,

94 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31, 2006 Quantam USD ASSETS Investments in securities at acquisition cost 16,882, Net unrealised gain/loss on investments 918, Investments in securities at market value (note 2) 17,800, Cash at banks 90, Interest receivable, net 0.00 Interest receivable on swaps (note 10) 0.00 Interest receivable on credit default swaps (note 11) 0.00 Net unrealised gain on forward exchange contracts (note 9) 0.00 Net unrealised gain on forward contracts (note 8) Net unrealised gain on credit default swaps (note 11) 0.00 Net unrealised gain on swaps (note 10) 0.00 Other assets ,891, LIABILITIES Bank overdraft 0.00 Investment advisory fee payable (note 4) Interest payable, net 0.00 Interest payable on swap contracts (note 10) 0.00 Interest payable on credit default swaps (note 11) 0.00 Net unrealised loss on forward exchange contracts (note 9) 0.00 Net unrealised loss on forward contracts (note 8) 0.00 Net unrealised loss on credit default swaps (note 11) 0.00 Net unrealised loss on swap contracts (note 10) 0.00 Taxe d abonnement payable (note 3) Interest payable on repurchase agreements 0.00 Repurchase agreements 0.00 Fees payable 4, Other liabilities , TOTAL NET ASSETS AS AT DECEMBER 31, ,886, TOTAL NET ASSETS AS AT DECEMBER 31, TOTAL NET ASSETS AS AT DECEMBER 31,

95 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF NET ASSETS AS AT DECEMBER 31,

96 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Combined EUR Bonds USD Bonds EUR EUR USD NET ASSETS AT THE BEGINNING OF THE YEAR 19,795,961, ,757,886, ,093, INCOME Interest on securities lending (note 12) 11,802, , , Interest on swaps (note 10) 30,323, ,757, ,438, Interest on credit default swaps (note 11) 2,148, , , Dividends 260,334, Interest on bonds, net 220,060, ,167, ,232, Bank interest 15,500, , , Interest on repurchase agreements 244, , Other income 5,057, ,470, ,232, ,383, EXPENSES Interest paid on repurchase agreements 1,655, ,062, , Investment advisory and management fee (note 4) 216,766, ,964, ,373, Custodian fee, interest and bank charges 32,542, ,574, , Administration, audit and other fees 52,340, ,009, , Taxe d abonnement (note 3) 8,292, , , Interest paid on swaps (note 10) 21,483, ,825, ,204, Premiums on credit default swaps (note 11) 1,272, , , Other expenses 122, ,476, ,768, ,751, NET INVESTMENT INCOME 210,994, ,464, ,631, Net realised gain/loss on sales of investments 2,346,869, ,431, , Net realised gain/loss on forward exchange contracts 17,331, , , Net gain/loss on foreign exchange -30,731, ,584, , Net realised gain/loss on forward contracts -7,523, ,626, , NET REALISED GAIN/LOSS 2,536,940, ,662, ,372, Change in net unrealised gain/loss: - on investments 245,429, ,299, ,139, on forward exchange contracts -226, ,100, , on forward contracts -8,946, ,724, , on credit default swaps 103, , , on swap contracts 795, ,361, INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS 2,774,096, ,864, ,100, Subscriptions of shares 17,130,902, ,398,276, ,532, Redemption of shares -14,260,389, ,085,836, ,939, Dividends paid (note 13) -5,826, ,072, , Revaluation difference* 8,945, , Revaluation difference on the net assets at the beginning of the period** -1,094,840, NET ASSETS AT THE END OF THE YEAR 24,348,849, ,023,710, ,223, *The difference mentioned above is a result of the euro exchange rate fluctuations of the different items related to the share classes denominated in a currency other than the currency of the sub-fund between January 1, 2006 and December 31, **The difference mentioned above is a result of the euro exchange rate fluctuations of the different items related to the sub-funds denominated in currencies other than the euro between January 1, 2006 and December 31,

97 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 CHF Liquidity USD Liquidity EUR Liquidity EUR Corporate Bonds Global Emerging Debt CHF USD EUR EUR USD 517,432, ,129, ,054,820, ,159, ,450, , , ,124, , ,348, ,341, ,526, ,637, ,290, , , ,014, , , , ,637, ,909, ,544, ,357, ,603, , , , , , , , ,046, , ,051, , , , , , , , ,165, , , , , , , , , , , , ,512, , ,108, ,387, ,913, ,124, ,004, ,436, ,970, ,689, ,243, ,027, ,261, ,013, ,696, , ,044, , ,773, , , , , ,858, , , , , , ,916, ,517, ,135, ,295, ,461, ,506, , ,383, ,613, , , , , , , , , , , , , , ,673, ,166, ,523, , ,096, ,611, ,743, ,521,560, ,891, ,434, ,381, ,519, ,522,572, ,554, ,028, , , , , ,335, , ,861, ,016, ,462, ,081,237, ,419, ,478,

98 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Global Bonds EUR High Yield EUR Short Mid-Term Bonds USD EUR EUR NET ASSETS AT THE BEGINNING OF THE YEAR 49,488, ,346, ,101, INCOME Interest on securities lending (note 12) Interest on swaps (note 10) 1,337, Interest on credit default swaps (note 11) 176, , Dividends Interest on bonds, net 1,489, ,662, ,239, Bank interest 161, , , Interest on repurchase agreements Other income ,165, ,372, ,480, EXPENSES Interest paid on repurchase agreements 3, , , Investment advisory and management fee (note 4) 234, ,706, ,062, Custodian fee, interest and bank charges 131, , , Administration, audit and other fees 105, , , Taxe d abonnement (note 3) 10, , , Interest paid on swaps (note 10) 1,122, Premiums on credit default swaps (note 11) 178, , Other expenses ,785, ,493, ,701, NET INVESTMENT INCOME 1,380, ,878, ,778, Net realised gain/loss on sales of investments -322, ,584, ,408, Net realised gain/loss on forward exchange contracts -70, , , Net gain/loss on foreign exchange 684, , , Net realised gain/loss on forward contracts -358, , NET REALISED GAIN/LOSS 1,313, ,389, ,410, Change in net unrealised gain/loss: - on investments 729, ,247, ,955, on forward exchange contracts , , on forward contracts -40, , on credit default swaps -1, , on swap contracts INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS 2,002, ,555, ,928, Subscriptions of shares 12,633, ,410, ,604, Redemption of shares -23,889, ,708, ,108, Dividends paid (note 13) -21, ,004, , Revaluation difference* , , Revaluation difference on the net assets at the beginning of the period NET ASSETS AT THE END OF THE YEAR 40,214, ,337, ,853, *The difference mentioned above is a result of the euro exchange rate fluctuations of the different items related to the share classes denominated in a currency other than the currency of the sub-fund between January 1, 2006 and December 31,

99 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 USD Short Mid-Term Bonds EUR Turbo Income CHF Bonds EUR Government Bonds (note 1) EUR Inflation Linked Bonds (note 1) USD EUR CHF EUR EUR 34,226, ,763, ,315, ,833, ,542, , , , ,149, ,083, ,897, ,869, , , , , , , , , , , ,224, ,383, ,543, ,097, , , , , , , , ,040, , , , , ,183, , , , , ,305, , , , , , , , ,633, ,158, , , , , ,172, ,360, ,048, , ,046, ,210, ,183, ,048, , , , ,870, , , , , , , , , , , , , , , , ,777, ,992, ,971, , , , ,890, ,008, , , , , , , , , , , , , ,051, ,420, ,254, ,336, , ,882, ,093, ,178, ,052, ,771, ,407, ,014, ,246, ,313, , , ,718, ,661, ,993, ,075, ,509,

100 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 EUR Asset Backed Securities (note 1) Emerging Local Currency Debt (note 1) Asian Local Currency Debt (note 1) EUR USD USD NET ASSETS AT THE BEGINNING OF THE YEAR INCOME Interest on securities lending (note 12) Interest on swaps (note 10) , , Interest on credit default swaps (note 11) Dividends Interest on bonds, net 340, , ,063, Bank interest 38, , , Interest on repurchase agreements Other income , , ,378, ,248, EXPENSES Interest paid on repurchase agreements 1, Investment advisory and management fee (note 4) , , Custodian fee, interest and bank charges 3, , , Administration, audit and other fees 24, , , Taxe d abonnement (note 3) 1, , , Interest paid on swaps (note 10) Premiums on credit default swaps (note 11) Other expenses , , , NET INVESTMENT INCOME 348, ,096, ,795, Net realised gain/loss on sales of investments 1, , , Net realised gain/loss on forward exchange contracts , , Net gain/loss on foreign exchange , , Net realised gain/loss on forward contracts , , NET REALISED GAIN/LOSS 349, ,920, ,810, Change in net unrealised gain/loss: - on investments 9, ,155, ,185, on forward exchange contracts , , on forward contracts , , on credit default swaps , on swap contracts , ,931, INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS 359, ,547, ,093, Subscriptions of shares 22,298, ,374, ,243, Redemption of shares ,762, ,100, Dividends paid (note 13) Revaluation difference Revaluation difference on the net assets at the beginning of the period NET ASSETS AT THE END OF THE YEAR 22,657, ,158, ,236,

101 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 European Equity Selection Small Cap Europe Emerging Markets Eastern Europe Europe Index EUR EUR USD EUR EUR 950,444, ,833, ,856,614, ,271,860, ,196, ,178, , , ,570, , ,345, ,754, ,703, ,449, ,225, , ,154, , ,225, , , ,744, ,678, ,753, ,673, ,994, ,798, ,668, ,647, ,823, ,580, ,085, ,350, , ,686, ,463, , ,334, ,094, ,028, ,315, , , , , , , , ,082, ,340, ,388, ,898, ,607, ,596, , ,285, ,904, ,191, ,017, ,415, ,303, ,077, ,985, ,117, , ,442, ,760, , ,475, , ,019, ,612, ,146, ,413, ,816, ,108, ,636, ,388, ,369, ,598, , ,128, ,976, ,535, ,783, ,400, ,283,952, ,677, ,520,369, ,918, ,581, ,653, ,149, ,767,783, ,074, ,953, ,708,872, ,337, ,424,736, ,210,488, ,225,

102 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 USA Index European Sustainable Equities Japan Index USD EUR JPY NET ASSETS AT THE BEGINNING OF THE YEAR 737,203, ,427, ,249,557, INCOME Interest on securities lending (note 12) 2,171, , ,382, Interest on swaps (note 10) Interest on credit default swaps (note 11) Dividends 11,440, ,091, ,495, Interest on bonds, net Bank interest 581, , Interest on repurchase agreements Other income 1,728, , ,473, ,921, ,251, ,352, EXPENSES Interest paid on repurchase agreements Investment advisory and management fee (note 4) 1,522, , ,406, Custodian fee, interest and bank charges 1,001, , ,643, Administration, audit and other fees 1,175, , ,538, Taxe d abonnement (note 3) 345, , ,980, Interest paid on swaps (note 10) Premiums on credit default swaps (note 11) Other expenses 39, ,085, ,122, ,569, NET INVESTMENT INCOME 11,835, ,128, ,782, Net realised gain/loss on sales of investments 27,741, ,726, ,498,227, Net realised gain/loss on forward exchange contracts , Net gain/loss on foreign exchange 2, , , Net realised gain/loss on forward contracts 1,716, ,046, NET REALISED GAIN/LOSS 41,296, ,755, ,625,804, Change in net unrealised gain/loss: - on investments 97,377, ,183, ,391,989, on forward exchange contracts on forward contracts 42, ,050, on credit default swaps on swap contracts INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS 138,716, ,939, ,250,864, Subscriptions of shares 509,491, ,672, ,057,490, Redemption of shares -432,235, ,629, ,537,854, Dividends paid (note 13) Revaluation difference* Revaluation difference on the net assets at the beginning of the period NET ASSETS AT THE END OF THE YEAR 953,175, ,408, ,020,057, *The difference mentioned above is a result of the euro exchange rate fluctuations of the different items related to the share classes denominated in a currency other than the currency of the sub-fund between January 1, 2006 and December 31,

103 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Pacific (Ex Japan) Index Telecom Biotech Premium Brands Water USD USD USD EUR EUR 95,923, ,816, ,500,302, ,571, ,947, , , , , ,932, ,785, ,711, , , ,137, , , ,428, ,197, , , ,030, ,064, ,491, , ,267, , ,327, ,027, , ,077, , , ,074, , ,367, , , ,061, , ,463, , , , , , , , ,791, ,931, , ,870, ,325, ,272, ,440, , ,397, ,627, ,564, ,656, ,699, ,853, ,963, , , ,987, , ,415, , ,449, ,142, ,490, ,833, ,436, ,283, ,306, ,379, ,162, ,224, ,668, , , ,261, ,459, ,870, ,906, ,660, ,214, ,008, ,707, ,040, ,852, ,140,910, ,491, ,536, ,328, ,453, ,817, ,564, ,900, ,857, ,862,485, ,631, ,942,254,

104 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Indian Equities Japanese Equities US Equities USD JPY USD NET ASSETS AT THE BEGINNING OF THE YEAR 465,409, ,987,660, ,817, INCOME Interest on securities lending (note 12) ,646, , Interest on swaps (note 10) Interest on credit default swaps (note 11) Dividends 6,362, ,129,667, , Interest on bonds, net Bank interest ,773, , Interest on repurchase agreements Other income ,362, ,141,086, , EXPENSES Interest paid on repurchase agreements Investment advisory and management fee (note 4) 8,860, ,102,359, , Custodian fee, interest and bank charges 3,341, ,555, , Administration, audit and other fees 854, ,032, , Taxe d abonnement (note 3) 230, ,672, , Interest paid on swaps (note 10) Premiums on credit default swaps (note 11) Other expenses ,286, ,565,619, , NET INVESTMENT INCOME -6,923, ,533, , Net realised gain/loss on sales of investments 105,010, ,647,838, ,043, Net realised gain/loss on forward exchange contracts Net gain/loss on foreign exchange -2,866, , , Net realised gain/loss on forward contracts , NET REALISED GAIN/LOSS 95,220, ,222,511, ,896, Change in net unrealised gain/loss: - on investments 96,141, ,865,741, , on forward exchange contracts on forward contracts on credit default swaps on swap contracts INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS 191,361, ,643,230, ,130, Subscriptions of shares 563,100, ,217,551, ,470, Redemption of shares -577,464, ,155,636, ,288, Dividends paid (note 13) Revaluation difference Revaluation difference on the net assets at the beginning of the period NET ASSETS AT THE END OF THE YEAR 642,406, ,406,344, ,130,

105 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Asian Equities (Ex Japan) Global Equity Selection Continental European Equities Greater China Japanese Equity Selection USD USD EUR USD JPY 1,669,584, ,215, ,781, ,862, ,148,524, , , , , ,578, ,221, ,192, ,431, ,998, ,037,304, , , , , , , ,438, ,436, ,685, ,647, ,142,883, ,166, ,003, , ,203, ,841,116, ,719, , , , ,616, ,482, , , , ,301, , , , , ,387, ,946, ,433, ,207, ,756, ,833,421, ,491, , , , ,538, ,084, ,817, ,956, ,003, ,884,052, , ,209, ,503, , , , ,079, ,374, , , ,547, ,868, ,605, ,264, ,260, ,212,644, ,436, ,941, ,153, ,996, ,706,129, , ,824, , , ,320, ,508, ,418, ,743, ,521,339, ,043,307, ,455, ,931, ,431, ,930,364, ,050,632, ,781, ,786, ,596, ,507,734, ,132,580, ,398, ,344, ,441, ,092,493,

106 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Emerging Markets Index Generics Japanese Mid-Small Cap USD USD JPY NET ASSETS AT THE BEGINNING OF THE YEAR 121,694, ,730, ,182,410, INCOME Interest on securities lending (note 12) 58, , , Interest on swaps (note 10) Interest on credit default swaps (note 11) Dividends 3,194, , ,209, Interest on bonds, net Bank interest 4, , Interest on repurchase agreements Other income 804, ,061, , ,781, EXPENSES Interest paid on repurchase agreements Investment advisory and management fee (note 4) 369, ,416, ,357, Custodian fee, interest and bank charges 375, , ,914, Administration, audit and other fees 313, , ,045, Taxe d abonnement (note 3) 34, , ,526, Interest paid on swaps (note 10) Premiums on credit default swaps (note 11) Other expenses 25, ,117, ,382, ,844, NET INVESTMENT INCOME 2,944, ,598, ,062, Net realised gain/loss on sales of investments 18,649, ,103, ,058, Net realised gain/loss on forward exchange contracts , Net gain/loss on foreign exchange -296, , , Net realised gain/loss on forward contracts , NET REALISED GAIN/LOSS 21,296, ,476, ,554, Change in net unrealised gain/loss: - on investments 13,005, ,970, ,400,916, on forward exchange contracts , on forward contracts on credit default swaps on swap contracts INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS 34,302, ,489, ,361, Subscriptions of shares 91,985, ,441, ,259,990, Redemption of shares -94,099, ,626, ,070,531, Dividends paid (note 13) Revaluation difference* Revaluation difference on the net assets at the beginning of the period NET ASSETS AT THE END OF THE YEAR 153,883, ,056, ,646,507, *The difference mentioned above is a result of the euro exchange rate fluctuations of the different items related to the share classes denominated in a currency other than the currency of the sub-fund between January 1, 2006 and December 31,

107 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) Emerging Markets Large Cap STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Absolute Return Global Diversified (note 1) Euroland Index (note 1) US Equity Selection (note 1) Security (note 1) USD EUR EUR USD USD 45,125, , , , ,458, , , , , , , , , , , , , ,606, ,936, , , , , , , ,069, , , , , , , , , , , , , , , , , , ,522, ,431, , ,478, , , , , , , ,429, ,955, ,152, ,753, , ,691, ,492, , ,765, ,144, , , , ,439, ,889, ,140, ,426, , ,654, ,116, ,811, ,093, ,321, , , , ,361, ,178, ,830, , ,634, ,998, ,228, ,763, ,253, ,789, ,912, ,970, ,099, , ,231, ,707, , ,188, ,494, ,912, ,192, ,203,

108 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006 Quantam (note 1) NET ASSETS AT THE BEGINNING OF THE YEAR - USD INCOME Interest on securities lending (note 12) 0.00 Interest on swaps (note 10) 0.00 Interest on credit default swaps (note 11) 0.00 Dividends 71, Interest on bonds, net 0.00 Bank interest Interest on repurchase agreements 0.00 Other income , EXPENSES Interest paid on repurchase agreements 0.00 Investment advisory and management fee (note 4) Custodian fee, interest and bank charges 1, Administration, audit and other fees 16, Taxe d abonnement (note 3) Interest paid on swaps (note 10) 0.00 Premiums on credit default swaps (note 11) 0.00 Other expenses , NET INVESTMENT INCOME 52, Net realised gain/loss on sales of investments 574, Net realised gain/loss on forward exchange contracts 0.00 Net gain/loss on foreign exchange 0.00 Net realised gain/loss on forward contracts 27, NET REALISED GAIN/LOSS 654, Change in net unrealised gain/loss: - on investments 918, on forward exchange contracts on forward contracts on credit default swaps on swap contracts 0.00 INCREASE/DECREASE IN NET ASSETS AS A RESULT OF OPERATIONS 1,573, Subscriptions of shares 16,312, Redemption of shares 0.00 Dividends paid (note 13) 0.00 Revaluation difference 0.00 Revaluation difference on the net assets at the beginning of the period 0.00 NET ASSETS AT THE END OF THE YEAR 17,886,

109 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share EUR Bonds I EUR 574, R EUR 675, P Cap EUR 2,702, P Distr EUR 94, Z Cap EUR 1,423, HI-CHF CHF 12, HP Cap-CHF CHF 25, USD Bonds I USD 112, R USD 52, P Cap USD 265, P Distr USD 34, Z Cap USD 85, CHF Liquidity I CHF 3,516, R CHF 290, P Cap CHF 2,499, P Distr CHF 188, Z Cap CHF 433, USD Liquidity I USD 363, R USD 413, P Cap USD 935, P Distr USD 25, Z Cap USD 707, EUR Liquidity I EUR 1,624, R EUR 2,192, P Cap EUR 2,737, P Distr EUR 95, Z Cap EUR 1,976, * NII = Net Investment Income per share for the year/period ended as at December 31,

110 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share EUR Corporate Bonds I EUR 35, R EUR 37, P Cap EUR 536, P Distr EUR 114, Z Distr EUR 420, Z Cap EUR 116, HI-CHF CHF HP Cap-CHF CHF 18, HI-USD USD HP Cap-USD USD 9, Global Emerging Debt I USD 165, R USD 80, P Cap USD 241, P Distr USD 201, Z Cap USD 118, HI-EUR EUR 52, HP Cap-EUR EUR 226, HI-CHF CHF 5, HP Cap-CHF CHF 55, Global Bonds I USD 205, R USD 11, P Cap USD 71, P Distr USD 4, EUR High Yield I EUR 105, R EUR 193, P Cap EUR 577, P Distr EUR 160, Z Cap EUR 187, HI-CHF CHF 11, HP Cap-CHF CHF 48, * NII = Net Investment Income per share for the year/period ended as at December 31,

111 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share EUR Short Mid-Term I EUR 418, Bonds R EUR 162, P Cap EUR 1,573, P Distr EUR 44, Z Cap EUR 321, HI-CHF CHF HP Cap-CHF CHF 161, USD Short Mid-Term I USD 26, Bonds R USD 11, P Cap USD 225, P Distr USD 8, EUR Turbo Income I EUR 403, R EUR 100, P Cap EUR 54, P Distr EUR Z Cap EUR 8, HI-CHF CHF 71, HP Cap-CHF CHF 39, HZ Cap-CHF CHF 200, CHF Bonds I CHF 244, R CHF 104, P Cap CHF 1,009, P Distr CHF 12, Z Cap CHF 2,180, EUR Government I EUR 262, Bonds R EUR 10, P Cap EUR 1,491, P Distr EUR 281, Z Cap EUR 1,388, HI-CHF CHF 12, HP Cap-CHF CHF 34, * NII = Net Investment Income per share for the year/period ended as at December 31,

112 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share EUR Inflation Linked I EUR Bonds P Cap EUR 22, P Distr EUR R EUR Z EUR 194, EUR Asset Backed I EUR Securities P Cap EUR 1, P Distr EUR R EUR Z EUR 220, Emerging Local Currency I USD 32, Debt P Cap USD 447, P Distr USD 28, R USD 9, Z USD 64, Asian Local Currency Debt I USD 383, P Cap USD 316, P Distr USD 2, R USD 31, Z USD 152, European Equity I EUR 176, Selection P Cap EUR 1,564, P Distr EUR R EUR 1,090, Z EUR Small Cap Europe I EUR 59, P Cap EUR 304, P Distr EUR R EUR 73, Z EUR * NII = Net Investment Income per share for the year/period ended as at December 31,

113 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share Emerging Markets I USD 2,871, P Cap USD 1,998, P Distr USD R USD 255, Z USD 791, I-EUR EUR 16, P Cap-EUR EUR 165, R-EUR EUR 47, Eastern Europe I EUR 390, P Cap EUR 2,082, P Distr EUR R EUR 316, Z EUR 65, Europe Index I EUR 676, P Cap EUR 2,251, P Distr EUR 5, R EUR 554, Z EUR 159, USA Index I USD 1,125, P Cap USD 5,720, P Distr USD 10, R USD 153, Z USD 1,554, European Sustainable I EUR 231, Equities P Cap EUR 371, P Distr EUR R EUR 81, Z EUR 162, Japan Index I JPY 812, , , , P Cap JPY 684, , , , P Distr JPY 2, , , , R JPY 917, , , , Z JPY 45, , , * NII = Net Investment Income per share for the year/period ended as at December 31,

114 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share Pacific (Ex Japan) I USD 250, Index P Cap USD 202, P Distr USD R USD 650, Z USD 132, Telecom I USD 440, P Cap USD 575, P Distr USD R USD 156, Z USD 268, Biotech I USD 561, P Cap USD 4,400, P Distr USD R USD 419, Z USD 84, I-EUR EUR 44, P Cap-EUR EUR 105, R-EUR EUR HP Cap-EUR EUR 708, HR-EUR EUR 90, Premium Brands I EUR 133, P Cap EUR 350, P Distr EUR R EUR 376, Water I EUR 2,211, P Cap EUR 13,247, P Distr EUR R EUR 3,317, Z EUR 384, I-USD USD 36, P Cap-USD USD 256, R-USD USD 4, * NII = Net Investment Income per share for the year/period ended as at December 31,

115 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share Indian Equities I USD 218, P Cap USD 968, P Distr USD R USD 749, Z USD 67, I-EUR EUR P Cap-EUR EUR 9, R-EUR EUR 10, Japanese Equities I JPY 1,071, , , , P Cap JPY 8,692, , , , P Distr JPY , , , R JPY 738, , , , I-EUR EUR P Cap-EUR EUR 3, R-EUR EUR 7, US Equities I USD 23, P Cap USD 167, P Distr USD R USD 82, Asian Equities I USD 5,287, (Ex Japan) P Cap USD 6,127, P Distr USD R USD 540, Z USD 130, I-EUR EUR 88, P Cap-EUR EUR 110, R-EUR EUR 68, HP Cap-EUR EUR 71, HR-EUR EUR 11, Global Equity I USD 1,240, Selection P Cap USD 1,134, P Distr USD R USD 1,697, Z USD 436, * NII = Net Investment Income per share for the year/period ended as at December 31,

116 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share Continental I EUR 231, European Equities P Cap EUR 58, P Distr EUR R EUR 228, Greater China I USD 192, P Cap USD 979, P Distr USD 9, R USD 472, Z USD 224, I-EUR EUR 7, P Cap-EUR EUR 42, R-EUR EUR 1, Japanese Equity I JPY 6,000, , , , Selection P Cap JPY 9,628, , , , P Distr JPY 6, , , , R JPY 1,977, , , , Z JPY 1,413, , , I-EUR EUR 91, P Cap-EUR EUR 232, R-EUR EUR 717, HP Cap-EUR EUR 255, HR-EUR EUR 40, Emerging Markets I USD 114, Index P Cap USD 198, P Distr USD 1, R USD 26, Z USD 432, * NII = Net Investment Income per share for the year/period ended as at December 31,

117 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share Generics I USD 287, P Cap USD 1,138, P Distr USD R USD 352, Z USD I-EUR EUR P Cap-EUR EUR 10, R-EUR EUR 11, HP Cap-EUR EUR 6, HR-EUR EUR 34, Japanese Mid-Small I JPY 78, , , , Cap P Cap JPY 401, , , , P Distr JPY , , , R JPY 73, , , , Z JPY 1, , I-EUR EUR P Cap-EUR EUR R-EUR EUR Emerging Markets I USD 2, Large Cap P Cap USD 111, P Distr USD R USD 7, Z USD 40, I-EUR EUR P Cap-EUR EUR R-EUR EUR HI-EUR EUR 81, HP Cap-EUR EUR 116, HR-EUR EUR 31, Absolute Return Global I EUR 577, Diversified P Cap EUR 473, P Distr EUR 39, R EUR 968, Z EUR 1, * NII = Net Investment Income per share for the year/period ended as at December 31,

118 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NUMBER OF SHARES OUTSTANDING, NET ASSET VALUE PER SHARE AND NET INVESTMENT INCOME (NII) Sub-fund Type of share Currency Number of shares outstanding NII (*) Net asset value per share Net asset value per share Net asset value per share Euroland Index I EUR P Cap EUR 36, P Distr EUR R EUR 16, Z EUR 48, US Equity Selection I USD 377, P Cap USD 981, P Distr USD 11, R USD 591, Z USD HI-EUR EUR 65, HP Cap-EUR EUR 175, HR-EUR EUR 44, Security I USD 82, P Cap USD 465, P Distr USD R USD 81, I-EUR EUR 70, P Cap-EUR EUR 199, R-EUR EUR 9, Quantam I USD P Cap USD P Distr USD R USD Z USD 162, * NII = Net Investment Income per share for the year/period ended as at December 31,

119 Pictet Funds (LUX) - EUR Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES BELGIUM FRN DIAMOND MORTG. FIN A 06/33 EUR 5,500, ,501, ,501, CAYMAN ISLANDS 3.166% GRANITE FIN 1XC4 06/54 EUR 4,700, ,716, ,716, FRANCE FRN FCC MINOT.S A 06/26 EUR 10,100, ,467, FRN PPCRE A 06/14 EUR 3,000, ,999, ,467, IRELAND FRN CRSM 11 A3A 06/48 EUR 9,000, ,006, FRN FR.RES.S B 05/43 EUR 1,500, ,501, FRN FRENCH.RES.S.06-1 D 06/43 EUR 3,600, ,605, FRN GRND 1 A 06/16 EUR 4,400, ,350, FRN GRND 1 C 06/16 EUR 3,400, ,370, FRN JAZZ CDO III AA 06/14 EUR 3,800, ,804, FRN JAZZ CDO III B 06/14 EUR 3,800, ,806, FRN JAZZ CDO III CA 06/14 EUR 3,800, ,809, FRN TAURUS B 06/15 EUR 2,900, ,900, FRN TAURUS A 06/15 EUR 3,500, ,500, ,655, NETHERLANDS FRN BELUGA MAS. C /99 EUR 1,700, ,701, FRN JAZZ CDO I A REG. S 02/10 EUR 2,500, ,502, FRN LAMBDA FINANCE BV. 05/29 EUR 13,600, ,636, FRN SHIELD I BV B 05/14 EUR 14,800, ,845, FRN SHIELD I C 05/14 EUR 4,500, ,518, FRN SHIELD I D 05/14 EUR 1,500, ,511, FRN SMILE SYNT. 5B -S- 05/15 EUR 8,400, ,647, FRN STICHTING DFM VEH. A 05/18 EUR 3,000, ,001, ,363, SPAIN FRN BANKINTER 2 SERIES B 06/43 EUR 1,500, ,500, FRN BBVAC A 06/20 EUR 15,000, ,003, FRN BBVAP 5-A1 06/39 EUR 7,500, ,497, FRN BBVAP 5-B 06/39 EUR 1,500, ,499, FRN IV AYTPI 05/37 EUR 4,150, ,152, FRN RURAL HIPOTECARIO 05/39 EUR 9,237, ,242, ,894, SWITZERLAND FRN MARS B 06/14 EUR 2,200, ,201, ,201, UNITED KINGDOM FRN ARRAN RESIDENT.MTGE 06/56 EUR 4,500, ,499, FRN GRACECHURCH 06-1 C3 06/56 EUR 2,000, ,000, FRN GRANITE MASTER 05/54 EUR 1,900, ,903,

120 Pictet Funds (LUX) - EUR Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets FRN GRANITE MASTER /54 EUR 4,160, ,169, FRN GRANITE MASTER 06/54 EUR 2,500, ,501, FRN GRANITE MASTER CLC3 06/54 EUR 3,560, ,560, FRN LEEK FIN.7 X-BC 06/37 EUR 2,500, ,500, FRN NEWGATE MB 09/50 EUR 2,700, ,700, FRN PARAGON MTGS N-13 06/39 EUR 1,200, ,200, FRN PARAGON N12 C1B 06/38 EUR 1,800, ,801, FRN PERMA S.8 CL.4C 05/42 EUR 1,500, ,503, ,341, TOTAL MORTGAGE BACKED SECURITIES 181,141, BONDS BELGIUM 3.75% BELGIUM OLO 32 99/09 EUR 100, , % BELGACOM 06/16 EUR 11,200, ,982, % BELGIUM OLO 36 01/11 EUR 1,300, ,358, % BELGIUM OLO 38 02/12 EUR 24,340, ,631, % BELGIUM OLO 31 98/28 EUR 10,000, ,931, ,003, DENMARK FRN FIH ERHVERVSBANK 05/10 EUR 6,500, ,456, ,456, FRANCE 3,5% B.T.A.N. 06/08 EUR 35,000, ,767, % O. A. T. 03/19 EUR 65,000, ,454, % B.T.A.N. 01/07 EUR 100,000, ,484, % O. A. T. 01/12 EUR 40,000, ,001, ,70 % FRANCE TELECOM 97/10 EUR 10,808, ,260, % BNP PARIBAS 02/14 EUR 14,295, ,600, % O. A. T. 97/07 EUR 56,300, ,017, % O. A. T. 97/29 EUR 15,820, ,976, % O. A. T. 99/10 EUR 53,200, ,760, % O. A. T. 99/10 EUR 16,700, ,620, % O. A. T. 01/32 EUR 14,065, ,657, ,625% FRANCE TELECOM 00/10 EUR 8,683, ,375, % FRANCE TELECOM 02/09 EUR 2,837, ,054, FRN CNP ASSURANCES 06/PE EUR 12,200, ,950, FRN RCI BANQUE 06/08 EUR 9,500, ,494, ,474, GERMANY 4% GERMANY 99/09 EUR 31,500, ,577, GERMANY S /08 EUR 70,000, ,280, % GERMANY 03/14 EUR 38,075, ,763, % GERMANY 03/13 EUR 67,700, ,711, % GERMANY 99/09 EUR 55,000, ,752, % GERMANY 02/12 EUR 34,450, ,212, % GERMANY 97/07 EUR 31,800, ,138, % GERMANY 94/24 EUR 62,300, ,837, ,274,

121 Pictet Funds (LUX) - EUR Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets GREECE 3,9% GREECE 06/11 EUR 26,000, ,821, ,50% GREECE 05/37 EUR 10,000, ,043, % GREECE 00/10 EUR 3,000, ,185, ,050, IRELAND 3.50% GE CAPITAL EUROPEAN 06/13 EUR 26,700, ,757, ,757, ITALY 3,75% ITALY 06/09 EUR 42,000, ,825, ,25% ITALY 04/15 EUR 45,000, ,436, % ITALY 98/09 EUR 38,000, ,488, % ITALY (BTP) 03/34 EUR 52,000, ,918, % ITALY 02/07 EUR 61,000, ,538, % ITALY (BTP) 98/29 EUR 30,000, ,606, % ITALY 02/33 EUR 49,500, ,763, % ITALY (BTP) 99/31 EUR 21,000, ,961, % ITALY 93/23 EUR 40,300, ,687, FRN UNICREDITO 03/08 EUR 4,500, ,502, ,729, JAPAN 0,5% JAPAN (Inflation) 04/14 JPY 23,460, ,457, FRN RESONA BANK 05/15 EUR 17,870, ,513, STEP SUMITOMO MITSUI BK.04/14 EUR 16,150, ,176, ,146, LUXEMBOURG 5.125% ARCELOR 03/10 EUR 15,800, ,146, FRN SES GLOBAL 06/09 EUR 7,600, ,601, ,748, NETHERLANDS ANTILLES FRN BTM (CURACAO) HLDG 05/15 EUR 13,400, ,028, ,028, NETHERLANDS 6% REPSOL INTL FINANCE 00/10 EUR 13,200, ,862, % DAIMLERCHRYS. INTL 01/11 EUR 6,070, ,618, FRN ARRAN C.LOAN S A2-1X 06/25 EUR 5,000, ,002, ,483, SPAIN 3,60% SPAIN 04/09 EUR 27,000, ,838, % SPAIN 03/13 EUR 42,000, ,567, % SPAIN 01/32 EUR 37,900, ,394, FRN BANCAJA 2 ISS.05/10 EUR 10,500, ,498, FRN BBVA 04/08 EUR 4,100, ,103, FRN SANTANDER INTL 05/08 EUR 20,000, ,001, ,403, UNITED KINGDOM 5.125% RIO TINTO FIN.02/07 EUR 3,625, ,640, ,640,

122 Pictet Funds (LUX) - EUR Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets UNITED STATES 4.625% CITIGROUP 02/07 EUR 6,430, ,468, % GENERAL ELEC. CAP.02/07 EUR 6,670, ,706, FRN HSBC FINANCE 06/13 EUR 13,050, ,076, ,250, TOTAL BONDS 1,856,449, OPTIONS UNITED STATES CALL EURO USD 3-MONTH INTEREST RATES -3, , CALL EURO USD 3-MONTH INTEREST RATES 3, , CALL EURO USD 3-MONTH INTEREST RATES -1, , , TOTAL OPTIONS -96, TOTAL I. 2,037,494, II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES FRANCE FRN FCC NACREA A 06/24 EUR 5,000, ,000, FRN SPARF 1-A 05/11 EUR 6,500, ,501, ,501, IRELAND FRN PROMISE 06-1 B 06/12 EUR 5,400, ,402, ,402, SPAIN FRN BANKINTER 05/38 EUR 7,151, ,180, FRN CAJA LABORAL 06-1 A 06/49 EUR 11,000, ,002, FRN RURALPYME 1 B 04/35 EUR 3,200, ,208, FRN SANTM 2 A2 06/50 EUR 12,000, ,000, FRN TDA IBERCAJA S. B 06/43 EUR 3,100, ,090, ,481, UNITED KINGDOM 0% GRACECHURCH MTGE FD 05/06 EUR 5,700, ,702, ,702, TOTAL MORTGAGE BACKED SECURITIES 59,088, BONDS IRELAND FRN TITAN EUROPE A-2X 06/16 EUR 3,500, ,798, ,798, UNITED KINGDOM FRN PERMANENT FIN. 9X-4C 06/42 EUR 1,400, ,400, ,400, TOTAL BONDS 4,198, TOTAL II. 63,287,

123 Pictet Funds (LUX) - EUR Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets TOTAL INVESTMENTS 2,100,781, CASH AT BANKS 50,490, OTHER NET LIABILITIES -127,561, TOTAL NET ASSETS 2,023,710,

124 Pictet Funds (LUX) - EUR Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) France Italy Germany Spain Japan 8.76 Netherlands 3.69 Ireland 3.64 Belgium 2.74 Greece 1.94 United Kingdom 1.92 United States 1.30 Luxembourg 1.18 Netherlands Antilles 0.64 Denmark 0.32 Cayman Islands 0.23 Switzerland Industrial classification (in % of net assets) Bonds issued by countries or cities Corporate bonds Options

125 Pictet Funds (LUX) - USD Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS CANADA 6,35% CONOCO FUNDING 01/11 USD 2,000, ,095, ,095, FRANCE 4,25% C.F.F. 05/09 USD 4,500, ,417, % S.N.C.F. 06/09 USD 1,500, ,498, ,916, GERMANY 3.75% K.F.W.03/10 USD 3,800, ,667, % LANDW.RENTENBANK 03/10 USD 3,800, ,691, ,359, JAPAN 0,5% JAPAN (Inflation) 04/14 JPY 2,291, ,413, ,413, LUXEMBOURG 6.875% RSHB CAPITAL 05/10 USD 600, , , NETHERLANDS 4% BK NED GEMEENTEN 05/10 USD 1,900, ,841, ,25% NED.WATERSCHAPSBANK 06/08 USD 2,300, ,301, ,143, NORWAY 4,375% EKSPORTFINANS 04/09 USD 3,800, ,744, % KOMMUNALBANKEN 05/10 USD 1,000, , ,727, PHILIPPINES 5,9475% ASIAN DEV.BANK 99/09 USD 2,000, ,043, ,043, SUPRANATIONAL 3,66% WORLDBANK 05/09 USD 4,464, ,339, ,339, SWEDEN 4% KOMMUNINVEST I SVER.05/10 USD 3,800, ,697, ,697, UNITED KINGDOM 4.25% BP CAPITAL MARKETS 05/09 USD 3,250, ,184, % HBOS TREASURY 06/09 USD 2,500, ,494, ,678, UNITED STATES 3% US TREASURY 03/08 USD 3,500, ,424, ,08% TOYOTA MOTOR CREDIT 04/08 USD 1,750, ,689, ,125% MERRILL LYNCH 03/08 USD 3,000, ,907, % US TREASURY 04/09 USD 4,000, ,859, % US TREASURY 03/08 USD 4,700, ,584, % US TREASURY 04/09 USD 4,300, ,173, % US TREASURY 03/08 USD 4,000, ,895,

126 Pictet Funds (LUX) - USD Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets 3.75% US TREASURY 05/08 USD 3,700, ,644, % US TREASURY S. A /13 USD 3,630, ,477, % US TREASURY 04/14 USD 5,840, ,596, % US TREASURY 05/15 USD 3,000, ,861, ,875% WELLS FARGO 06/11 USD 3,000, ,968, % US TREASURY 03/13 USD 5,750, ,611, % US TREASURY 03/13 USD 5,800, ,652, % US TREASURY 04/14 USD 8,800, ,548, % US TREASURY 05/10 USD 5,000, ,926, % US TREASURY 02/07 USD 5,700, ,685, % US TREASURY 98/08 USD 6,450, ,443, % WAL-MART STORES 05/10 USD 2,300, ,270, % US TREASURY 02/12 USD 6,500, ,566, % US TREASURY 01/11 USD 3,250, ,298, ,50% CHARTER ONE BANK 06/11 USD 1,700, ,720, % US TREASURY 98/28 USD 2,100, ,203, % US TREASURY 99/29 USD 3,240, ,399, % US TREASURY 98/08 USD 3,000, ,028, % US TREASURY 96/26 USD 3,200, ,631, ,50% DAIMLERCHRYSLER 03/13 USD 750, , US TREASURY 97/27 USD 4,200, ,874, % US TREASURY 00/30 USD 2,971, ,540, % RESIDENT CAP. REG. S.05/10 USD 1,880, ,905, % US TREASURY 00/10 USD 6,600, ,938, % US TREASURY 96/26 USD 5,000, ,008, % US TREASURY 86/16 USD 6,348, ,556, % US TREASURY 92/22 USD 3,300, ,139, % US TREASURY 91/21 USD 4,600, ,994, % US TREASURY 91/21 USD 3,700, ,906, % US TREASURY 89/19 USD 5,280, ,908, % US TREASURY 91/21 USD 3,400, ,540, % US TREASURY 87/17 USD 6,490, ,596, % US TREASURY 85/15 USD 5,160, ,081, ,833, TOTAL BONDS 238,866, OPTIONS UNITED STATES CALL EURO USD 3-MONTH INTEREST RATES , CALL EURO USD 3-MONTH INTEREST RATES , CALL EURO USD 3-MONTH INTEREST RATES , , TOTAL OPTIONS -12, TOTAL I. 238,854,

127 Pictet Funds (LUX) - USD Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES UNITED KINGDOM FRN PERMANENT FIN. 9X-2C 06/42 USD 1,000, , , TOTAL MORTGAGE BACKED SECURITIES 999, BONDS JERSEY FRN UBS JERS.(3M USD LIB)6/16 USD 1,700, ,700, ,700, UNITED STATES 4.75% US TREASURY 04/14 USD 3,700, ,713, ,05% BK.OF NEW YORK 06/09 USD 2,000, ,002, ,625% NISSAN MOTOR 06/11 USD 1,800, ,808, ,524, TOTAL BONDS 9,224, TOTAL II. 10,224, TOTAL INVESTMENTS 249,078, CASH AT BANKS 9,248, OTHER NET LIABILITIES -16,103, TOTAL NET ASSETS 242,223,

128 Pictet Funds (LUX) - USD Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Japan 7.61 Germany 3.03 United Kingdom 2.75 France 2.44 Norway 1.96 Supranational 1.79 Netherlands 1.71 Sweden 1.53 Canada 0.87 Philippines 0.84 Jersey 0.70 Luxembourg Industrial classification (in % of net assets) Bonds issued by countries or cities Corporate bonds Bonds issued by supranational institutions 1.79 Options

129 Pictet Funds (LUX) - CHF Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS AUSTRALIA FRN COMMONWEAL.BK.AUST. 06/09 CHF 10,000, ,010, ,010, AUSTRIA 1,62 % ZV ERSTE BK OESTER.06/08 CHF 5,000, ,003, % AUTRICHE 02/07 CHF 11,000, ,041, % BIG M. B. H.02/07 CHF 6,740, ,768, ,625% SCHIENENINFRASTRUK. 97/07 CHF 180, , FRN ERSTE BANK OESTER.05/07 CHF 5,000, ,003, FRN ERSTE BK. OESTER 05/07 CHF 3,000, ,000, FRN KOMMUNALKR AUSTRIA 05/08 CHF 5,000, ,998, FRN KOMMUNALKR AUSTRIA 06/08 CHF 10,000, ,018, FRN RAIFFEISEN ZENTRALBK.06/08 CHF 5,000, ,016, ,031, BELGIUM FRN BMW COORD.CENT. 06/07 CHF 2,000, ,000, ,000, CAYMAN ISLANDS 3% PACIFIC LIFE FUND. 99/07 CHF 12,790, ,817, ,625% MONUMENTAL GLOBAL 01/07 CHF 315, , % ASIF II 02/07 CHF 5,280, ,303, % LGT FINANCE 99/07 CHF 3,365, ,413, FRN BETA FINANCE 06/09 CHF 5,000, ,997, ,846, DENMARK 4% KOMMUNEKREDIT 00/07 CHF 18,925, ,065, ,065, FINLAND 2% FINGRID 00/07 CHF 6,000, ,991, ,75% MUNICIPALITY FIN. 99/07 CHF 9,590, ,628, FRN OKOBANK 06/09 CHF 10,000, ,997, ,617, FRANCE 2.50% TOTAL CAPITAL 02/07 CHF 1,400, ,401, % DEXIA MUNICIPAL AG.01/07 CHF 6,000, ,033, % TOTAL CAPITAL 02/07 CHF 12,800, ,818, % C. N. A. 98/08 CHF 8,920, ,011, % LA POSTE 01/07 CHF 32,765, ,955, % DEXIA MUNICIPAL AG.00/07 CHF 12,990, ,144, FRN BANQUE. FED. CREDIT MUT.05/08 CHF 5,000, ,997, ,361, GERMANY 1,75% LAND HESSEN 03/07 CHF 1,000, , % BAY. LANDESBK GIROZ.03/07 CHF 11,050, ,031, % ALLG.HYPO.RHEINBODEN03/08 CHF 10, , % L.B.W.02/07 CHF 20,210, ,149, % SACHSEN-ANHALT 03/07 CHF 14,010, ,991,

130 Pictet Funds (LUX) - CHF Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets 2,75% LAND BADEN WUERTT. 02/07 CHF 1,000, ,003, ,50% NOTE LBK RHEINLAND 02/07 CHF 10,000, ,045, ,50% K.F.W. 97/07 CHF 400, , ,75% DEUTSCHE BANK 97/07 CHF 6,490, ,541, % LDKR BADEN-WUER. FBK.02/07 CHF 11,000, ,034, % LBK HESSEN-THUER.00/07 CHF 5,680, ,762, ,375% DRESDNER BANK 97/07 CHF 250, , FRN I. K. B.05/07 CHF 5,000, ,000, ,221, ICELAND FRN KAUPTHING BANK 05/07 CHF 15,000, ,962, FRN LANDSBANKI ISLANDS 05/07 CHF 3,000, ,998, ,961, IRELAND FRN BANK OF IRELAND 06/08 CHF 15,000, ,992, FRN LEASEPLAN FINANCE 05/07 CHF 5,000, ,000, ,992, ITALY 1,25% ITALY 03/07 CHF 990, , % ITALY 04/08 CHF 2,250, ,230, ,219, JAPAN 3,75% TRANS-TOKYO BAY HI. 97/07 CHF 640, , ,75% YOKOHAMA (CITY) 97/07 CHF 500, , % KYUSHU ELEC.POWER 97/07 CHF 850, , ,003, JERSEY 1,125% UBS JERSEY 03/07 CHF 300, , % ASIF III 04/07 CHF 730, , ,027, NETHERLANDS ANTILLES 3,75% WESTLB FIN. CURACAO 97/07 CHF 40, , , NETHERLANDS 1.25% RABOBANK 03/07 CHF 16,470, ,429, % SIEMENS FIN.01/07 CHF 5,610, ,615, % BAYERNHYPO FINANCE 97/07 CHF 5,140, ,145, ,125% DRESDNER FINANCE 97/07 CHF 15,125, ,140, ,331, NEW ZEALAND 1,25% ASB BANK 05/08 CHF 1,000, , FRN TRANSPOWER FINANCE 06/09 CHF 3,000, ,998, ,985, SUPRANATIONAL 3% I.A.D.B.01/07 CHF 10,800, ,863, ,50% E.I.B. 97/07 CHF 905, , % DEV. CONSEIL EUROPE 00/07 CHF 80, , % E.I.B. 97/07 CHF 5,885, ,897, % E.I.B. 95/07 CHF 1,840, ,880, ,633,

131 Pictet Funds (LUX) - CHF Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets SWEDEN 1.75% KOMMUNINVEST I SV.03/07 CHF 4,920, ,920, % SWEDEN 97/07 CHF 17,725, ,758, ,678, SWITZERLAND 5,125% CENTRE LETTRES GAGE 95/07 CHF 5,350, ,407, ,407, UNITED KINGDOM 2,5% HOLMES FIN.MTG.S4A2 02/07 CHF 110, , FRN ABBEY NATL. 06/08 CHF 12,000, ,000, ,110, UNITED STATES 1.75% GENERAL ELEC. CAP.03/07 CHF 7,155, ,153, % GENERAL ELEC. CAP.03/08 CHF 400, , % TOYOTA MOTOR CREDIT 02/07 CHF 12,415, ,378, ,75% GENERAL ELEC. CAP. 99/07 CHF 18,620, ,658, % K.F.W. INT. FINANCE 97/07 CHF 8,570, ,638, ,125% MBNA MASTER(ABS) A 00/07 CHF 2,960, ,999, FRN BEAR STEARNS 06/09 CHF 6,500, ,506, FRN CITIGROUP 05/08 CHF 4,000, ,998, FRN CITIGROUP 06/09 CHF 3,000, ,000, FRN GENERAL ELEC. CAP. 04/07 CHF 3,000, ,998, FRN LEHMAN BROTHERS 06/09 CHF 4,000, ,000, FRN MERRILL LYNCH 06/09 CHF 15,000, ,004, FRN SWISS RE TREASURY 06/09 CHF 10,000, ,999, ,732, TOTAL BONDS 547,277, TOTAL I. 547,277, II. OTHER TRANSFERABLE SECURITIES BONDS ICELAND FRN KAUPTHING BK 05/08 CHF 9,000, ,910, ,910, SWEDEN FRN AKADEMISKA HUS 05/07 CHF 5,500, ,498, ,498, TOTAL BONDS 14,408, TOTAL II. 14,408, III. MONEY MARKET INSTRUMENTS CYPRUS 0% KOMMUNALKREDIT (ECP) 06/07 CHF 15,000, ,992, ,992, FRANCE 0% S.N.C.F. (ECP) 06/07 CHF 5,000, ,993, ,993,

132 Pictet Funds (LUX) - CHF Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets GERMANY 0% HYPOTH.BK.ESSEN (ECP) 06/07 CHF 10,000, ,991, % NESTLE UNTERN. (ECP) 06/07 CHF 20,000, ,988, ,979, IRELAND 0% DEPFA BANK (ECP) 06/07 CHF 35,000, ,812, % IRISH LIFE&PERM (ECP) 06/07 CHF 5,000, ,983, % IRISH LIFE&PERM (ECP) 06/07 CHF 30,000, ,982, ,779, LUXEMBOURG 0% DZ BANK INTL (ECP) 06/07 CHF 30,000, ,982, ,982, NETHERLANDS C.PAP. LBK BADEN-WUERT.LDN CHF 5,000, ,924, % UNILEVER FIN. (ECP) 06/07 CHF 5,000, ,993, ,917, TRINIDAD AND TOBAGO 0% BP TRIN.TOBAGO (ECP) 06/07 CHF 25,000, ,000, ,035% BP TRINIDAD&TOB (ECP)06/07 CHF 18,000, ,000, ,000, UNITED KINGDOM 0% SUMITOMO C.CAP. (ECP) 06/07 CHF 5,000, ,983, % SUMITOMO CORP (ECP) 06/07 CHF 5,000, ,995, ,978, UNITED STATES 0% CARGILL INC (ECP) 06/07 CHF 8,000, ,975, ,975, TOTAL III. 220,599, TOTAL INVESTMENTS 782,286, CASH AT BANKS 36,940, OTHER NET ASSETS 6,790, TOTAL NET ASSETS 826,016,

133 Pictet Funds (LUX) - CHF Liquidity GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Germany United States Ireland France Austria 6.19 Netherlands 5.72 Trinidad and Tobago 5.21 Luxembourg 3.63 Sweden 3.42 United Kingdom 3.26 Iceland 3.25 Cayman Islands 3.24 Finland 3.11 Supranational 2.38 Denmark 2.31 Cyprus 1.82 Australia 1.21 Switzerland 0.65 New Zealand 0.48 Italy 0.39 Japan 0.24 Belgium 0.24 Jersey 0.13 Netherlands Antilles Industrial classification (in % of net assets) Corporate bonds Money market instruments Bonds issued by countries or cities 3.88 Bonds issued by supranational institutions

134 Pictet Funds (LUX) - USD Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS AUSTRALIA 2,96% ANZ BANKING GROUP 04/07 USD 2,000, ,981, ,01% NATIONAL AUSTRAL.BK 04/07 USD 5,000, ,954, FRN ANZ BANKING GROUP 03/08 USD 2,492, ,494, FRN BOSINTER.AUSTRALIA 04/09 USD 4,000, ,004, FRN NAT. AUSTRALIA BANK 02/07 USD 1,500, ,501, ,937, BELGIUM 5,50031 TV FORTIS BANQUE 06/08 USD 3,000, ,999, ,999, CANADA FRN CANADIAN IMPERIAL 02/07 USD 2,500, ,500, ,500, CAYMAN ISLANDS FRN INTESA BK. OVERSEAS 98/08 USD 6,000, ,046, ,046, FRANCE FRN CREDIT AGRICOLE 06/09 USD 5,000, ,998, ,998, GERMANY FRN DEUTSCHE BANK 01/07 USD 6,000, ,001, FRN HSH NORDBANK 02/07 USD 4,000, ,001, FRN I.K.B. 06/09 USD 3,000, ,000, FRN L.B.W.05/07 USD 5,000, ,985, ,988, IRELAND FRN BANK OF IRELAND 04/07 USD 10,000, ,000, ,000, NETHERLANDS FRN LEASEPLAN 05/08 USD 3,000, ,000, FRN NOMURA EUROPE FIN. 05/08 USD 6,000, ,004, FRN SIEMENS FINANCE 06/09 USD 4,000, ,000, ,005, NORWAY FRN DNB NOR 06/09 USD 4,000, ,999, ,999, SPAIN FRN SANTANDER US 06/09 USD 6,000, ,003, ,003, SUPRANATIONAL 1,90% I.A.D.B. 04/07 USD 5,000, ,974, ,25% WORLDBANK 02/07 USD 650, , ,40% WORLDBANK 02/07 USD 745, , ,367,

135 Pictet Funds (LUX) - USD Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets SWEDEN 3,73% KOMMUNINVEST I SVER.04/08 USD 850, , ,48719 FR SPINTAB 06/07 USD 5,000, ,010, FRN SWEDBANK 06/08 USD 5,000, ,998, ,837, UNITED KINGDOM FRN ALLIANCE&LEICESTER 05/08 USD 6,000, ,003, FRN ANZ NATIONAL T4 S 06/09 USD 2,000, ,000, FRN BANK OF MONTREAL 06/09 USD 5,000, ,001, FRN BNZ INTERNATIONAL 06/09 USD 5,000, ,001, FRN HBOS TREASURY SERV 03/08 USD 3,700, ,703, ,709, UNITED STATES 2,85% TOYOTA MOTOR CRED. 03/07 USD 2,000, ,964, ,875% COUNTR.HOME H T /07 USD 3,225, ,220, ,625% BMW US CAPITAL 03/06 GBP 2,000, ,919, ,49% GENERAL ELEC. CAP. 05/09 USD 1,000, ,001, FRN AMERICAN HONDA FIN. 06/08 USD 4,000, ,001, FRN AMERICAN HONDA FIN. 06/09 USD 4,000, ,002, FRN BANCAJA US DEBT 06/09 USD 3,000, ,001, FRN BANK OF AMERICA 04/09 USD 1,350, ,351, FRN BANK OF AMERICA 06/09 USD 2,725, ,727, FRN BANK OF AMERICA 06/09 USD 1,400, ,400, FRN BANK OF AMERICA 97/07 USD 500, , FRN CATERPILLAR F T /09 USD 3,000, ,001, FRN CITIGROUP INC 04/07 USD 5,000, ,001, FRN GENERAL ELEC. CAP. 04/08 USD 1,055, ,056, FRN GENERAL ELEC.CAP. 03/08 USD 1,500, ,503, FRN GENERAL ELEC.CAP. 05/08 USD 1,500, ,501, FRN GENERAL ELEC.CAP. 06/09 USD 4,000, ,999, FRN GENERAL ELEC.CAP. 06/09 USD 1,000, ,000, FRN GOLDMAN SACHS 06/09 USD 5,000, ,998, FRN MERRIL LYNCH 05/08 USD 4,000, ,003, FRN MERRILL LYNCH 06/09 USD 3,000, ,002, FRN METROPOLITAN LIFE 04/07 USD 2,000, ,000, FRN MORGAN STANLEY 03/08 USD 700, , FRN MORGAN STANLEY 04/07 USD 2,369, ,369, FRN MORGAN STANLEY 04/09 USD 2,800, ,809, FRN WELLS FARGO 04/07 USD 2,565, ,565, FRN WELLS FARGO 05/08 USD 1,500, ,500, ,111, TOTAL I. 189,505, II. OTHER TRANSFERABLE SECURITIES BONDS SOUTH KOREA 0% EXPORT-IM.BK. KOREA 06/07 USD 6,000, ,984, ,984,

136 Pictet Funds (LUX) - USD Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets UNITED STATES FRN HSBC BANK USA 05/08 USD 4,000, ,002, FRN UNICREDITO ITALIANO 06/08 USD 1,200, ,199, FRN WORLD SAVING BANK 06/09 USD 6,000, ,003, STEP FED. HOME LOAN BANK 05/08 USD 6,000, ,987, ,192, TOTAL II. 23,177, III. MONEY MARKET INSTRUMENTS AUSTRALIA 0% MACQUARIE BANK (ECP) 06/07 USD 6,000, ,975, % MIZUHO CORP.BK. (ECP) 06/07 USD 7,000, ,973, % SUMITOMO CORP (ECP) 06/07 USD 5,000, ,956, % SUMITOMO CORP. (ECP) 06/07 USD 1,000, , % SUNCORP METWAY (ECP) 06/06 USD 4,000, ,976, % WESTPAC BANKING (ECP) 06/07 USD 6,000, ,935, ,814, DENMARK 0% FIN.DANISH IND. (ECP) 06/07 USD 5,000, ,993, ,993, GERMANY 0% DEUTSHE BAHN (ECP) 06/07 USD 6,000, ,928, % NESTLE UNTERN. (ECP) 06/07 USD 6,000, ,952, ,881, JERSEY 0% SCALDIS CAP (ECP) 06/07 USD 6,000, ,948, ,948, NETHERLANDS 0% ESSENT (ECP) 06/07 EUR 4,000, ,240, ,240, UNITED KINGDOM 0% BANCO POP.VERO. (ECP) 06/07 USD 6,000, ,927, % KOREA DEV.BANK (ECP) 06/07 USD 5,000, ,961, ,889, UNITED STATES 5,35% NORINCHUNKIN BK. (CD) 06/07 USD 7,000, ,999, ,999, TOTAL III. 74,765, TOTAL INVESTMENTS 287,448, CASH AT BANKS 7,197, OTHER NET ASSETS 1,816, TOTAL NET ASSETS 296,462,

137 Pictet Funds (LUX) - USD Liquidity GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Australia United Kingdom Germany Netherlands 6.16 Sweden 3.66 Ireland 3.36 Supranational 2.15 Cayman Islands 2.04 Spain 2.03 South Korea 2.02 Jersey 2.01 France 1.69 Denmark 1.68 Norway 1.35 Belgium 1.01 Canada Industrial classification (in % of net assets) Corporate bonds Money market instruments Bonds issued by supranational institutions

138 Pictet Funds (LUX) - EUR Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES SPAIN FRN SANTM 2 A2 06/50 EUR 20,000, ,000, ,000, TOTAL MORTGAGE BACKED SECURITIES 20,000, BONDS AUSTRALIA 3,349% FR AUSTRALIA N.Z.06/08SR EUR 10,500, ,493, FRN BMW AUSTRALIA FIN. 06/08 EUR 20,000, ,000, FRN COMMONWEALTH. BK. AUST.04/07 EUR 5,000, ,999, FRN NAT. AUSTRALIA BANK 04/07 EUR 1,000, , FRN NAT.AUSTRALIA BANK 06/09 EUR 11,000, ,999, FRN ST.GEORGE BANK 04/09 EUR 11,500, ,518, ,010, AUSTRIA FRN RAIFFEISEN ZENTRALBK.05/08 EUR 4,000, ,000, ,000, CAYMAN ISLANDS FRN BES FINANCE 06/09 EUR 10,000, ,992, ,992, DENMARK 3,20 % FR DANSKE BANK 06/09 EUR 8,000, ,996, FRN DANSKE BANK 05/07 EUR 10,000, ,999, FRN DANSKE BK A/S 06/08 EUR 7,000, ,997, FRN FIH ERHVERVSBANK 04/07 EUR 7,000, ,999, FRN FINANCE DANISH 05/07 EUR 6,000, ,997, ,990, FINLAND FRN OKO BANK 06/11 EUR 10,000, ,999, FRN OKOBANK 05/07 EUR 4,000, ,999, FRN OKOBANK 05/08 EUR 6,000, ,999, ,999, FRANCE 3,352% TV C.NAT. EPARGNE 06/08 EUR 4,000, ,998, FRN B.F.C.M. 06/08 EUR 5,000, ,999, FRN BANQUE PSA FINANCE 06/08 EUR 10,000, ,992, FRN BFCM 06/08 EUR 10,000, ,998, FRN C.N.C.E.P. 06/07 EUR 5,000, ,996, FRN CCC IMMOB.DE FRANCE 06/09 EUR 6,000, ,999, FRN CNCEP 04/07 EUR 4,300, ,299, FRN COFINOGA EURO MTN 06/07 EUR 10,000, ,997, FRN CREDIT AGRICOLE 05/07 EUR 6,000, ,998, FRN CREDIT AGRICOLE 05/08 EUR 7,500, ,496, FRN CREDIT AGRICOLE 06/07 EUR 8,000, ,998, FRN GE CAPITAL 06/09 EUR 9,600, ,601,

139 Pictet Funds (LUX) - EUR Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets FRN SANOFI-AVENTIS 06/08 EUR 10,000, ,999, FRN SOCIETE GENERALE 06/09 EUR 9,000, ,002, FRN TV CARREFOUR 04/07 EUR 1,500, ,500, ,878, GERMANY FRN IKB DEUTSCHE IND.BK.03/08 EUR 8,839, ,853, FRN IKB EMT NOTES 06/09 EUR 10,000, ,992, FRN L.B.W. 06/07 EUR 10,000, ,998, ,844, ICELAND FRN TV ISLANDSBANKI 04/07 EUR 4,000, ,001, ,001, IRELAND FRN ALLIED IRISH BANK 05/07 EUR 15,000, ,000, FRN BANESTO FINANCE 06/07 EUR 19,900, ,900, FRN CATERPILLAR 05/07 EUR 10,000, ,000, FRN GE CAPITAL EUROPEAN 05/07 EUR 11,500, ,499, ,400, ITALY FRN MONTE PASHI SIENA 06/09 EUR 11,000, ,995, ,995, JERSEY 5,125% AIG SUN AMERICA III 02/07 EUR 20,000, ,084, ,084, NETHERLANDS FRN KBC IFIMA S /07 EUR 8,000, ,998, FRN LEASEPLAN FINANCE 05/07 EUR 500, , FRN LEASEPLAN FINANCE 05/07 EUR 15,000, ,998, FRN PACCAR FIN EUROPE 05/07 EUR 17,150, ,149, FRN PACCAR FINANCIAL 06/09 EUR 10,000, ,998, FRN TOYOTA MOTOR FIN. 06/07 EUR 5,000, ,000, FRN TOYOTA MOTOR FIN.05/08 EUR 10,000, ,993, ,639, NORWAY FRN UNION BK OF NORWAY 04/07 EUR 3,000, ,999, ,999, SPAIN FRN BBVA SENIOR FIN. 06/09 EUR 5,000, ,000, FRN BBVA SENIOR FINANCE 06/08 EUR 20,000, ,989, FRN BPE FINANCIACIONES 06/09 EUR 10,000, ,995, FRN BPE FINANCIACIONES 04/07 EUR 10,000, ,999, FRN CAJA MADRID 05/07 EUR 14,000, ,000, FRN ENTE PUBLICO RTVE 04/07 EUR 9,000, ,999, FRN SANTANDER INTL.04/07 EUR 3,500, ,501, ,488, SWEDEN 3,34 % FR SVENSKA HANDELS.06/08 EUR 10,500, ,498, ,34 % FR SWEDISH NAT.6/08-SR- EUR 9,000, ,998,

140 Pictet Funds (LUX) - EUR Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets FRN SPINTAB 05/07 EUR 10,000, ,999, FRN SPINTAB 05/07 EUR 10,000, ,999, ,495, UNITED KINGDOM 3,355% FR CREDIT AGR.LDN06/08SR EUR 15,000, ,995, FRN ABBEY NATL 06/08 EUR 10,000, ,997, FRN BANCO SANTANDER 06/07 EUR 10,000, ,999, FRN BNZ INTERNATIONAL 06/08 EUR 12,000, ,003, FRN CLYDESDALE 06/09 EUR 7,000, ,996, FRN HBOS TREASURY SERV. 04/09 EUR 8,000, ,005, FRN HBOS TREASURY SERV.04/07 EUR 4,900, ,899, FRN NETWORK RAIL MTN 04/07 EUR 15,000, ,000, ,897, UNITED STATES FRN AIG MATCHED FUNDING 06/07 EUR 5,000, ,997, FRN BANK OF AMERICA 03/08 EUR 3,400, ,405, FRN CITIGROUP FUNDING 05/08 EUR 10,000, ,001, FRN KFW INT. FINANCE 97/07 PTE 1,500,000, ,493, FRN LEHMAN BROTHERS 05/08 EUR 8,000, ,000, FRN MERRILL LYNCH 04/09 EUR 10,000, ,037, FRN METROPOLITAN LIFE 06/07 EUR 5,000, ,000, FRN MORGAN STANLEY 05/07 EUR 15,000, ,000, ,936, TOTAL BONDS 682,656, TOTAL I. 702,656, II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES SPAIN IV CAJAM A2 06/49 EUR 10,000, ,007, ,007, TOTAL MORTGAGE BACKED SECURITIES 10,007, BONDS LUXEMBOURG 0% DEXIA BIL 06/07 EUR 15,000, ,939, ,939, TOTAL BONDS 14,939, TOTAL II. 24,946, III. MONEY MARKET INSTRUMENTS AUSTRALIA 0% MACQUARIE BANK (ECP) 06/07 EUR 10,000, ,953, ,953, FRANCE 0% L OREAL (ECP) 06/06 USD 26,000, ,781, ,781,

141 Pictet Funds (LUX) - EUR Liquidity STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets GERMANY 0% ALLIANZ (ECP) 06/07 EUR 10,000, ,959, % NESTLE UNTERN. (ECP) 06/07 EUR 10,000, ,954, % NESTLE UNTERN. (ECP) 06/07 EUR 5,000, ,977, ,891, IRELAND 0% IRISH LIFE&PERM (ECP) 06/07 EUR 15,000, ,933, % SANPAOLO IMI BK. (ECP) 06/7 EUR 25,000, ,885, ,818, JERSEY 0% AMSTEL EURO FD.(ECP)06/06 EUR 15,000, ,933, % CANCARA ASSET (ECP) 06/07 EUR 8,253, ,210, % GRAMPIAN FUNDG (ECP) 06/07 EUR 3,500, ,483, % SCALDIS CAPITAL(ECP)06/07 EUR 10,000, ,956, % CANCARA ASSET (ECP) 06/07 EUR 6,747, ,712, ,296, LUXEMBOURG 0% CLEARSTREAM (ECP) 06/07 EUR 15,000, ,939, % DZ BANK INTL (ECP) 06/07 EUR 15,000, ,935, ,874, UNITED KINGDOM 0% LEGAL & GEN.FIN(ECP)06/07 EUR 8,000, ,967, % SUMITOMO CORP (ECP) 06/07 EUR 10,000, ,956, % BANCO POP.VERO. (ECP) 06/07 EUR 15,000, ,932, % COVENTRY BLDG. (ECP) 06/07 EUR 15,000, ,932, % NORINCHUKIN BK (ECP) 06/07 EUR 15,000, ,933, % NORTHERN ROCK (ECP) 06/07 EUR 15,000, ,939, % PRUDENTIAL (ECP) 06/07 EUR 15,000, ,932, % SHARP INT. (ECP) 06/07 EUR 10,000, ,972, ,65% MIZUHO CORP.BK (CD) 06/07 EUR 15,000, ,999, ,568, UNITED STATES 0% SOLITAIRE FDG. (ECP) 06/07 EUR 15,000, ,964, ,964, TOTAL III. 300,148, TOTAL INVESTMENTS 1,027,750, CASH AT BANKS 50,715, OTHER NET ASSETS 2,770, TOTAL NET ASSETS 1,081,237,

142 Pictet Funds (LUX) - EUR Liquidity GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United Kingdom France Spain 9.39 Ireland 8.91 United States 7.29 Australia 6.38 Netherlands 6.07 Jersey 5.86 Germany 4.97 Luxembourg 4.14 Sweden 3.65 Denmark 3.51 Finland 1.84 Italy 1.02 Cayman Islands 0.92 Iceland 0.37 Austria 0.37 Norway Industrial classification (in % of net assets) Corporate bonds Money market instruments

143 Pictet Funds (LUX) - EUR Corporate Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES NETHERLANDS FRN JAZZ CDO I A REG. S 02/10 EUR 2,499, ,502, ,502, TOTAL MORTGAGE BACKED SECURITIES 2,502, BONDS AUSTRALIA 3.875% NAT. AUSTRALIA BANK 03/15 EUR 2,399, ,372, % TELSTRA 01/11 EUR 739, , ,173, BELGIUM 4,125% BELGACOM 06/11 EUR 499, , % BELGACOM 06/16 EUR 799, , ,279, BRISTISH VIRGIN ISLANDS 4.875% JECI COMP 02/07 EUR 8,199, ,243, ,243, CAYMAN ISLANDS 4,85% MUFG CAP. FINANCE 06/PE EUR 1,499, ,467, % MIZUHO FINANCE 04/14 EUR 1,999, ,018, ,625% BES FINANCE 02/PE EUR 699, , % BSCH ISSUANCE 00/10 EUR 899, , ,210, DENMARK FRN FIH ERHVERVSBANK 05/10 EUR 499, , , FINLAND 4.625% FORTUM 03/10 EUR 1,799, ,820, ,820, FRANCE 3.625% VIVENDI UNIVERSAL 05/10 EUR 2,099, ,042, % CIE SUEZ ALLIANCE 03/10 EUR 1,399, ,399, % THALES 04/11 EUR 2,299, ,305, % AIR LIQUIDE 04/14 EUR 1,499, ,537, % VEOLIA ENVIRONNEM.03/13 EUR 1,969, ,004, % L.V.M.H. 03/10 EUR 1,499, ,530, % LAFARGE 04/14 EUR 644, , ,70% FRANCE TELECOM 97/10 EUR 1,399, ,458, % CIE SUEZ ALLIANCE 03/15 EUR 199, , % BNP PARIBAS 02/12 EUR 1,499, ,581, % C. N. C. E. P 03/PE EUR 1,299, ,340, % CASINO GUICHARD 03/10 EUR 2,799, ,860, % PINAULT PRINTEMPS 04/11 EUR 1,799, ,842, % AXA 01/13 EUR 799, , % GIE PSA TRESORERIE 03/33 EUR 299, , ,625% FRANCE TELECOM 00/10 EUR 1,399, ,511,

144 Pictet Funds (LUX) - EUR Corporate Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets 7% FRANCE TELECOM 02/09 EUR 333, , % FRANCE TELECOM 03/13 EUR 2,379, ,719, % FRANCE TELECOM 03/33 EUR 799, ,084, FRN CNP ASSURANCES 06/PE EUR 1,599, ,567, ,217, GERMANY 4.50% VOLKSWAGEN FIN. SER.03/10 EUR 1,199, ,205, % ALLIANZ 04/PE EUR 1,599, ,657, % BAYER 02/12 EUR 1,999, ,142, % SUB COMMERZBANK 01/11 EUR 2,199, ,347, ,352, ITALY 3,95% UNICREDITO ITALIANO 06/16 EUR 1,799, ,698, ,125% ENEL SOCIETA 04/11 EUR 2,099, ,088, % ITALY 93/23 EUR 3,299, ,133, FRN BANCO POP. VER. NOVA.05/10 EUR 699, , ,618, JAPAN 5.506% CHUO MITSUI TR & BK 05/PE USD 859, , FRN RESONA BANK 05/15 EUR 2,999, ,940, STEP SUMITOMO MITSUI BK.04/14 EUR 2,149, ,153, ,725, JERSEY 4.28% UBS PREF. FUNDING 05/PE EUR 1,409, ,373, % HSBC CAP FUNDING 03/PE EUR 1,999, ,074, FRN UBS JERSEY BRANCH 05/15 EUR 1,799, ,800, ,248, LUXEMBOURG 5% HANNOVER FINANCE 05/PE EUR 449, , ,375% GLENCORE FINANCE 04/11 EUR 199, , % ARCELOR 03/10 EUR 2,049, ,095, % HANNOVER FINANCE 04/24 EUR 220, , ,5% MICHELIN LUXEMBOURG 02/12 EUR 1,099, ,201, STEP SOGERIM 01/11 EUR 2,299, ,535, ,709, NETHERLANDS ANTILLES FRN BTM (CURACAO) HLDG 05/15 USD 2,899, ,213, ,213, NETHERLANDS 4% ALLIANZ FINANCE II 06/16 EUR 1,499, ,457, ,5% KPN KONINKLIJKE 06/13 EUR 699, , % PORTUGAL TEL. INT. 99/09 EUR 799, , % SAINT GOBAIN NED.03/10 EUR 649, , % AHOLD KONINKLIJKE 01/08 EUR 1,499, ,527, % REPSOL INTL FINANCE 00/10 EUR 1,999, ,100, ,375% HEIDELBERGER ZEMENT 00/07 EUR 399, , % MUNICH RE FINANCE 03/23 EUR 599, , % OLIVETTI FINANCE 03/13 EUR 289, , % OLIVETTI FINANCE 03/33 EUR 549, , FRN ING VERZEKERINGEN 01/21 EUR 2,999, ,220, ,502,

145 Pictet Funds (LUX) - EUR Corporate Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets SPAIN 3,75% TELEFONICA EMIS. SA 06/11 EUR 3,299, ,210, FRN CAJA DUERO CAPITAL 03/PE EUR 1,579, ,619, FRN SANTANDER ISSUANCES 06/16 EUR 2,999, ,987, ,817, SWITZERLAND 6.905% CRED. SUISSE GR. CAP.01/PE EUR 349, , FRN CS GROUP CAP. II 00/PE EUR 1,299, ,446, ,831, UNITED KINGDOM 4.375% CSFB LONDON 97/PE CHF 2,299, ,446, % ROLLS-ROYCE GROUP 04/11 EUR 1,299, ,308, % HBOS 03/15 EUR 1,999, ,064, % AVIVA 03/23 EUR 1,449, ,509, % NGG FINANCE 01/11 EUR 2,549, ,722, % CLERICAL MEDICAL FIN01/23 EUR 999, ,106, % NATL WESTMINSTER BK 99/PE EUR 3,699, ,917, ,076, UNITED STATES 3,75% MORGAN STANLEY 06/13 EUR 1,999, ,934, % CITIGROUP 03/10 EUR 6,099, ,053, ,25% BANK OF AMERICA 03/10 EUR 1,999, ,005, ,75% GOLDMAN SACHS 04/14 EUR 799, , % DAIMLERCHRYSLER 06/09 EUR 1,999, ,981, % DAIMLERCHRYSLER 04/11 EUR 899, , % BMW US CAPITAL LLC 03/13 EUR 1,799, ,833, % G.M.A.C.04/09 EUR 2,199, ,189, ,012% COMMERZBANK CAP F. 06/PE EUR 2,299, ,250, ,125% RESIDENTIAL CAPITAL 06/12 EUR 1,699, ,708, % BNP PARIBAS CAP. TR.02/PE EUR 1,999, ,161, % PEMEX PROJ. FDG MSTR 04/16 EUR 299, , ,875% SOGGEN CAPITAL TR. 00/PE EUR 1,399, ,538, FRN CL CAPITAL TRUST I 02/PE EUR 2,199, ,452, FRN INTESABCI NOM.CAP. 01/PE EUR 699, , FRN SAN PAOLO IMI CAPIT.00/PE EUR 1,199, ,352, ,266, TOTAL BONDS 152,802, TOTAL INVESTMENTS 155,305, CASH AT BANKS 5,033, OTHER NET LIABILITIES -1,919, TOTAL NET ASSETS 158,419,

146 Pictet Funds (LUX) - EUR Corporate Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States France Netherlands 9.46 United Kingdom 8.88 Italy 6.07 British Virgin Islands 5.19 Spain 4.94 Germany 4.64 Luxembourg 4.24 Japan 3.62 Jersey 3.32 Cayman Islands 3.29 Australia 2.01 Netherlands Antilles 1.40 Switzerland 1.15 Finland 1.15 Belgium 0.81 Denmark Industrial classification (in % of net assets) Corporate bonds Bonds issued by countries or cities

147 Pictet Funds (LUX) - Global Emerging Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS ARGENTINA 2% PROV.B.AIRES REG S 06/35 USD 2,000, ,037, % ARGENTINA 05/33 USD 4,210, ,106, STEP ARGENTINA 03/38 USD 4,600, ,507, ,650, BRAZIL 11% BRAZIL 00/40 USD 4,050, ,373, % BRAZIL 02/10 USD 500, , % BRAZIL 00/30 USD 500, , ,125% BRAZIL 06/37 USD 6,500, ,982, % BRAZIL 05/15 USD 1,250, ,395, % BRAZIL 05/18 USD 2,175, ,421, ,25% COSAN 06/PE USD 925, , % BRAZIL 04/19 USD 250, , % COSAN 04/09 USD 2,100, ,233, % BRAZIL 03/10 USD 1,250, ,418, ,476, CHILE 5.5% CHILE 03/13 USD 1,350, ,362, ,362, COLOMBIA % COLOMBIA 03/33 USD 4,750, ,828, % COLOMBIA 04/24 USD 2,600, ,016, % COLOMBIA 04/14 USD 2,400, ,736, ,580, CROATIA 7% AGROKOR 06/11 EUR 350, , , CZECH REPUBLIC 3,80% CZECH REPUBLIC 05/15 CZK 125,000, ,969, ,2% CZECH REPUBLIC 06/36 CZK 28,300, ,367, ,336, ECUADOR 9.375% ECUADOR REG-S 05/15 USD 3,000, ,385, ,385, EGYPT 0% EGYPT 06/07 USD 11,300, ,918, ,918, EL SALVADOR 8.25% EL SALVADOR 02/32 USD 2,100, ,530, ,530, GERMANY 8.75% CJSC RUSSIAN 04/07 USD 2,650, ,659, ,659,

148 Pictet Funds (LUX) - Global Emerging Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets INDONESIA 7.50% INDONESIA 05/16 USD 4,000, ,400, % INDONESIA 05/35 USD 1,400, ,742, ,142, IRAQ STEP IRAQ 06/28 USD 2,000, ,310, ,310, KAZAKHSTAN 7,625% ASTANA FINANCE 06/09 USD 2,340, ,326, % BANK CENTERCREDIT 05/08 USD 650, , % AFT BANK 04/07 USD 1,650, ,662, ,25% ATF BANK JSC 05/12 USD 1,000, ,018, ,659, LUXEMBOURG 6.875% RSHB CAPITAL 05/10 USD 7,000, ,206, % GAZ CAPITAL 04/34 USD 500, , ,851, MEXICO 5.875% MEXICO 03/14 USD 2,244, ,307, % MEXICO 03/13 USD 295, , % MEXICO 03/15 USD 185, , % MEXICO 04/34 USD 1,100, ,196, % MEXICO 02/12 USD 580, , % MEXICO 03/33 USD 3,340, ,941, % MEXICO 01/19 USD 2,000, ,449, % MEXICO 01/11 USD 2,000, ,230, ,271, NETHERLANDS 8% EXCELCOMINDO FIN. 04/09 USD 2,800, ,856, % URALVNESHT. (CLN CRR) 06/07 USD 1,400, ,409, ,265, PANAMA 7,25% PANAMA 04/15 USD 1,250, ,357, % PANAMA 97/27 USD 4,050, ,163, ,521, PERU 7.35% PERU 05/25 USD 1,000, ,135, % PERU 03/33 USD 1,000, ,320, % PERU 02/12 USD 3,400, ,965, % PERU 03/15 USD 750, , FRN PERU NOM. S 97/17 USD 1,000, , ,329, PHILIPPINES % PHILIPPINES 00/25 USD 3,300, ,741, % PHILIPPINES 02/17 USD 4,000, ,960, % PHILIPPINES 05/30 USD 2,250, ,007, ,709,

149 Pictet Funds (LUX) - Global Emerging Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets RUSSIA 12.75% RUSSIA NOM. S 98/28 USD 1,000, ,820, % GPB EUROBOND (GAZPROMBK) 05/15 USD 2,000, ,005, ,175% RUSSIAN AGRI. BANK 06/13 USD 2,000, ,112, STEP RUSSIA REG-S 00/30 USD 6,200, ,021, ,958, SOUTH AFRICA 8.5% SOUTH AFRICA 97/17 USD 1,000, ,217, ,217, TURKEY 11% TURKEY 03/13 USD 1,500, ,845, % TURKEY 02/12 USD 1,500, ,833, % TURKEY 00/30 USD 3,050, ,719, ,875% TURKEY 06/36 USD 1,700, ,636, % TURKEY 06/16 USD 2,250, ,297, % TURKEY 04/15 USD 500, , % TURKEY 05/25 USD 2,250, ,317, ,170, UKRAINE 7,65% UKRAINE 03/13 USD 2,000, ,167, ,167, URUGUAY 7.5% URUGUAY 03/15 USD 2,691, ,910, % URUGUAY 03/33 USD 1,500, ,680, % URUGUAY 05/22 USD 2,000, ,280, ,870, VENEZUELA 5,75% VENEZUELA 05/16 USD 3,250, ,091, % VENEZUELA 03/18 USD 1,500, ,554, % VENEZUELA 04/14 USD 50, , % VENEZUELA 97/27 USD 7,000, ,977, ,680, VIETNAM 6,875% VIETNAM 05/16 USD 950, ,028, ,028, YUGOSLAVIA 3.75% REPUBLIC OF SERBIA 05/24 USD 1,000, , , TOTAL I. 182,457, II. OTHER TRANSFERABLE SECURITIES BONDS CAYMAN ISLANDS 0% PERU ENHANCED 06/18 USD 2,350, ,563, ,563, IRELAND 9% SIBACADEMFINANCE 06/09 USD 4,278, ,337, ,337,

150 Pictet Funds (LUX) - Global Emerging Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets LUXEMBOURG 9,5% TROY CAPITAL 06/11 EUR 1,000, ,367, ,367, NIGERIA 0% NIGERIA (CITIGROUP) 06/07 NGN 271,623, ,041, % NIGERIA (CLN UBS JB) 06/07 USD 1,600, ,525, ,566, TOTAL II. 10,835, TOTAL INVESTMENTS 193,292, CASH AT BANKS 12,480, OTHER NET ASSETS 2,705, TOTAL NET ASSETS 208,478,

151 Pictet Funds (LUX) - Global Emerging Debt GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Brazil Turkey 7.26 Venezuela 6.56 Mexico 6.37 Russia 6.21 Philippines 6.09 Colombia 6.04 Luxembourg 4.43 Argentina 4.15 Peru 3.99 Czech Republic 3.52 Uruguay 3.30 Panama 3.13 Indonesia 2.95 Kazakhstan 2.72 Ireland 2.08 Netherlands 2.05 Nigeria 1.71 Germany 1.28 El Salvador 1.21 Equador 1.14 Ukraine 1.04 Egypt 0.92 Cayman Islands 0.75 Chile 0.65 Iraq 0.63 South Africa 0.58 Vietnam 0.49 Yugoslavia 0.45 Croatia Industrial classification (in % of net assets) Bonds issued by countries or cities Corporate bonds

152 Pictet Funds (LUX) - Global Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS CANADA 5.50% CANADA 99/10 CAD 170, , % CANADA 98/29 CAD 600, , , DENMARK 6% DENMARK 98/09 DKK 1,600, , , FRANCE 3% FRANCE 05/15 EUR 50, , % B.T.A.N. 03/09 EUR 250, , % O.A.T. 02/13 EUR 250, , % O. A. T.03/35 EUR 250, , % FRANCE TELECOM 97/10 EUR 150, , % BNP PARIBAS 02/14 EUR 190, , % O. A. T. 97/29 EUR 175, , % FRANCE TELECOM 00/10 EUR 150, , % FRANCE TELECOM 02/09 EUR 36, , ,079, GERMANY 3.75% K.F.W.03/10 USD 400, , % GERMANY 03/14 EUR 2,050, ,742, % GERMANY 03/34 EUR 335, , % GERMANY 00/31 EUR 100, , ,775, ITALY 5.25% ITALY (BTP) 98/29 EUR 750, ,104, % ITALY 93/23 EUR 750, ,532, ,637, JAPAN 0.5% JAPAN (Inflation) 04/14 JPY 579, ,653, % JAPAN N-35 04/09 JPY 375,000, ,136, % JAPAN N /13 JPY 175,000, ,424, % JAPAN N /11 JPY 100,000, , % JAPAN N /15 JPY 200,000, ,654, % JAPAN N /16 JPY 125,000, ,066, % JAPAN N-11 03/33 JPY 55,000, , % JAPAN N /10 JPY 175,000, ,510, % JAPAN N-57 02/22 JPY 19,000, , % JAPAN N-72 04/24 JPY 120,000, ,023, FRN RESONA BANK 05/15 EUR 170, , STEP SUMITOMO MITSUI BK.04/14 EUR 175, , ,328, LUXEMBOURG 5.125% ARCELOR 03/10 EUR 190, , ,

153 Pictet Funds (LUX) - Global Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets NETHERLANDS ANTILLES FRN BTM (CURACAO) HLDG 05/15 USD 320, , , NETHERLANDS 4% BK NED GEMEENTEN 05/10 USD 200, , % NETHERLANDS 02/12 EUR 1,000, ,382, % REPSOL INTL FINANCE 00/10 EUR 200, , % DAIMLERCHRYS. INTL 01/11 EUR 80, , ,966, NORWAY 4.375% EKSPORTFINANS 04/09 USD 400, , , SPAIN 5.75% SPAIN 01/32 EUR 300, , , SWEDEN 4% KOMMUNINVEST I SVER.05/10 USD 400, , % SWEDEN 00/11 SEK 1,800, , % SWEDEN 97/08 SEK 470, , , UNITED KINGDOM 4.25% BP CAPITAL MARKETS 05/09 USD 300, , % BRITISH TREASURY 00/32 GBP 100, , % BRITISH TREASURY 03/15 GBP 300, , % HBOS TREASURY 06/09 USD 300, , % RIO TINTO FIN.02/07 EUR 825, ,089, % BRITISH TREASURY 98/09 GBP 125, , % BRITISH TREASURY 98/28 GBP 350, , % BRITISH TREASURY 96/21 GBP 150, , ,936, UNITED STATES 3.875% US TREASURY 04/09 USD 1,500, ,471, % US TREASURY 04/14 USD 400, , % US TREASURY 03/13 USD 700, , % CITIGROUP 02/07 EUR 530, , % WAL-MART STORES 05/10 USD 300, , % GENERAL ELEC. CAP.02/07 EUR 430, , % US TREASURY 00/10 USD 570, , % US TREASURY 96/26 USD 400, , % GENERAL ELEC. CAP. 00/10 USD 750, , % RESIDENT CAP. REG. S.05/10 USD 220, , % US TREASURY 96/26 USD 425, , % US TREASURY 93/23 USD 500, , % US TREASURY 86/16 USD 750, , % US TREASURY 89/19 USD 275, , % US TREASURY 91/21 USD 300, , FRN DAIMLERCHRYSLER 05/08 USD 100, , ,050, TOTAL BONDS 43,060,

154 Pictet Funds (LUX) - Global Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets OPTIONS UNITED STATES CALL EURO USD 3-MONTH INTEREST RATES , CALL EURO USD 3-MONTH INTEREST RATES , CALL EURO USD 3-MONTH INTEREST RATES , , TOTAL OPTIONS -3, TOTAL I. 43,057, II. OTHER TRANSFERABLE SECURITIES BONDS UNITED STATES 5.625% NISSAN MOTOR 06/11 USD 200, , , TOTAL II. 200, TOTAL INVESTMENTS 43,258, CASH AT BANKS 1,224, OTHER NET LIABILITIES -4,269, TOTAL NET ASSETS 40,214,

155 Pictet Funds (LUX) - Global Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Japan United States United Kingdom 9.78 Germany 9.39 Italy 6.56 France 5.17 Netherlands 4.90 Canada 1.96 Sweden 1.84 Spain 1.23 Norway 0.98 Netherlands Antilles 0.80 Denmark 0.74 Luxembourg Industrial classification (in % of net assets) Bonds issued by countries or cities Corporate bonds Options

156 Pictet Funds (LUX) - EUR High Yield STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS AUSTRIA 8.5% HTM SPORT 04/14 EUR 500, , , BELGIUM 9% TELENET COMM.03/13 EUR 1,000, , % BARRY CALLEB. SERV.03/10 EUR 713, , ,572, BERMUDA 8.25% CENTRAL EURO MEDIA 05/12 EUR 1,150, ,256, ,256, CANADA 9% MECACHROME 06/14 EUR 800, , FRN BOMBARDIER 06/13 EUR 2,550, ,553, ,335, CROATIA 7% AGROKOR 06/11 EUR 850, , , DENMARK 11.50% NYCO HOLDINGS 03/13 EUR 2,100, ,336, % ISS GLOBAL 03/10 EUR 1,000, , FRN NORDIC TELEPHONE 06/16 EUR 2,000, ,080, FRN PURUSCO SECUR.SEN.SUB.06/16 EUR 4,600, ,697, ,081, FINLAND STEP M-REAL 06/13 EUR 1,275, ,279, ,279, FRANCE 6.25% CROWN EURO HOLDINGS 05/11 EUR 1,150, ,198, % ALCATEL 04/14 EUR 450, , ,125% EUROPCAR GROUPE 06/14 EUR 2,225, ,366, % FG4 05/15 EUR 1,000, ,132, % KAUFMAN ET BROAD 02/09 EUR 400, , % RHODIA 03/11 EUR 690, , % RAY ACQUISITION 05/15 EUR 2,300, ,626, ,969, GERMANY 10,75% KABEL DEUTSCH 06/14 EUR 500, , % PERI 04/11 EUR 800, , % GERRESHEIMER 144A 05/15 EUR 600, , ,25% NORDIC TELEPHONE 06/16 EUR 2,500, ,750, % MTU AERO ENGINES 04/14 EUR 600, , % SGL CARBON 04/12 EUR 1,250, ,346, % GROHE HLDG 04/14 EUR 1,200, ,239, ,125% MAUSER WERKE 05/13 EUR 500, , % HECKLER & KOCH 04/11 EUR 1,600, ,612,

157 Pictet Funds (LUX) - EUR High Yield STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets 9.375% KLOECKNER PENTAPL.02/12 EUR 500, , % COGNIS DEUTSCHLAND 04/14 EUR 2,100, ,302, FRN HORNBACH-BAUMARKT 04/14 EUR 750, , ,520, GREECE 9% YIOULA GLASSWORK 05/15 EUR 500, , FRN HELLAS TELEC II 06/15 EUR 3,400, ,408, ,901, IRELAND % MDP AQUISITIONS 02/12 EUR 1,615, ,752, ,75% JSG FUNDING 05/15 EUR 1,850, ,870, ,30 % SIBACADEMFINANCE 06/11 EUR 400, , FRN BCM IRELAND FIN. 06/16 EUR 2,560, ,662, ,692, JAPAN 7,75% SOFTBANK 06/13 EUR 2,000, ,002, ,002, LUXEMBOURG 10.50% KLOCKNER INVESTMENT 05/15 EUR 1,300, ,011, % LBC LUXEMBOURG 04/14 EUR 1,145, ,348, % FIAT FIN & TRADE 06/13 EUR 5,000, ,400, % CABLECOM LUX. 06/16 EUR 800, , % LIGHTHOUSE INTL 04/14 EUR 3,750, ,106, % CODERE FINANCE (LUX) 05/15 EUR 2,700, ,855, % NELL AF 05/15 EUR 2,850, ,056, % CIRSA FINANCE 04/14 EUR 2,600, ,606, % SAFILO CAP INTL 03/13 EUR 800, , % WIND ACQUISITION 05/15 EUR 3,900, ,485, STEP TEKSID ALUMINIUM 03/11 EUR 1,000, ,007, ,258, NETHERLANDS 10.75% CARMEUSE LIME (REG.) 02/12 EUR 1,000, ,083, ,5% FRESENIUS FINANCE 06/16 EUR 500, , ,625% G.M.A.C. 05/07 EUR 1,000, ,005, % FIRST INVESTMENT 05/08 EUR 1,500, ,520, % VICTORIA ACQUISITION 4/14 EUR 800, , % CLONDALKIN BV 04/14 EUR 1,000, ,053, % CULLIGAN FINANCE 04/14 EUR 1,100, ,171, ,625% NXP 06/15 EUR 1,200, ,234, % UPC HOLDING 05/14 EUR 3,000, ,120, ,25% IMPRESS METAL 06/14 EUR 500, , FRN ASSET REPACKG.TRUST 06/11 EUR 1,400, ,421, FRN IMPRESS METAL 06/13 EUR 1,175, ,198, FRN NXP BV 06/13 EUR 5,050, ,113, FRN VICTORIA ACQUISITION 06/15 EUR 1,856, ,914, STEP VNU 06/16 EUR 1,600, ,114, TLK 5% FRESENIUS FINANCE 06/13 EUR 500, , ,367, NORWAY 8.375% AKER KVAERNER 04/11 EUR 1,250, ,371, ,371,

158 Pictet Funds (LUX) - EUR High Yield STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets SOUTH AFRICA 8,125% NEW RECLAMATION GP 06/13 EUR 1,500, ,199, % CELL C (PTY) 05/12 EUR 1,100, ,102, % FOODCORP 05/12 EUR 1,250, ,337, ,639, UNITED KINGDOM 10% LOUIS No.1 NOTES 06/16 EUR 500, , % ECO BAT FINANCE 03/13 EUR 1,000, ,100, % ONO FINANCE 04/14 EUR 2,750, ,093, % CORUS GROUP 04/11 EUR 900, , ,5% LOUIS No.1 REG.S 06/14 EUR 2,200, ,233, % NTL CABLE 05/14 EUR 800, , % INEOS VINYLS FIN.03/11 EUR 1,000, ,065, % INVENSYS 04/11 EUR 1,200, , ,706, UNITED STATES 10,875% TDS INVESTOR 06/16 EUR 300, , % TRW AUTOMOTIVE 03/13 EUR 546, , % BCP CRYSTAL 04/14 EUR 1,100, , ,25% FORD MOTOR CREDIT 98/08 DEM 850, , % FORD MOTOR CREDIT 03/09 EUR 900, , % G.M.A.C.03/10 EUR 600, , % G.M.A.C.03/08 EUR 2,950, ,997, ,25% CHESAPEAKE ENERGY 06/17 EUR 3,300, ,374, ,50% KRONOS INT. 06/13 EUR 1,500, ,447, ,875% HUNTSMAN INT. 06/13 EUR 550, , % OWENS-BROCKWAY GLS.04/14 EUR 650, , % AGCO 04/14 EUR 500, , % CHESAPEAKE 04/14 EUR 500, , % GENERAL MOTORS 03/13 EUR 3,100, ,053, % HUNTSMAN INT 04/15 EUR 750, , % HERTZ 05/14 EUR 650, , % CENTRAL EURO. DIS.05/12 EUR 1,000, ,083, ,625% LEVI STRAUSS 05/13 EUR 1,000, ,062, % GENERAL MOTORS 03/33 EUR 1,000, , % WDAC SUBSIDIARY 04/14 EUR 3,050, ,217, % POLYPORE 04/12 EUR 1,050, ,039, % NIELSEN FIN.SR REG 06/14 EUR 250, , ,125% HCA -SR- REG.S 06/14 USD 1,600, ,299, % JOHNSONDIVERSEY 02/12 EUR 1,450, ,515, FRN TDS INVESTOR 06/14 EUR 400, , ,061, TOTAL I. 149,400, II. OTHER TRANSFERABLE SECURITIES BONDS CAYMAN ISLANDS 0% CAP. GUARD. NOM. S 01/13 USD

159 Pictet Funds (LUX) - EUR High Yield STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets ITALY 8,25% LOTTOMATICA S 06/66 EUR 750, , , LUXEMBOURG 8.50% HELLAS TELECOM III 05/13 EUR 1,000, ,082, ,082, NETHERLANDS 9% SENSATA TECHNOLOG. 06/16 EUR 2,350, ,358, FRN CARLSON WAGNLID 06/15 EUR 775, , ,164, UNITED KINGDOM 7,875% INEOS GROUP REG.S 06/16 EUR 5,650, ,381, ,381, UNITED STATES 7.625% ROCKWOOD SPECIAL 05/14 EUR 1,000, ,065, % NALCO 03/13 EUR 1,200, ,311, ,376, TOTAL II. 12,798, TOTAL INVESTMENTS 162,198, CASH AT BANKS 26,663, OTHER NET LIABILITIES -11,524, TOTAL NET ASSETS 177,337,

160 Pictet Funds (LUX) - EUR High Yield GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Luxembourg Netherlands United Kingdom 9.06 Germany 7.63 Denmark 5.69 France 5.05 Ireland 3.77 Greece 2.20 South Africa 2.05 Canada 1.88 Japan 1.13 Belgium 0.88 Norway 0.77 Finland 0.72 Bermuda 0.71 Croatia 0.49 Italy 0.45 Austria 0.29 Cayman Islands Industrial classification (in % of net assets) Corporate bonds

161 Pictet Funds (LUX) - EUR Short-Mid Term Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES FRANCE FRN NORIA S A 05/20 EUR 1,200, ,199, ,199, IRELAND FRN CELTIC RESI. S.9 A1 05/47 EUR 1,500, , , ITALY FRN LOMBARDA LEASE FIN.05/22 EUR 1,600, ,601, ,601, SPAIN 2.427% AYT 1 A 99/28 EUR 1,612, ,618, FRN BBVA AUTOS 2 A 05/19 EUR 1,500, ,500, FRN BBVA CONSUMO /20 EUR 2,000, ,999, FRN BBVAC A 06/20 EUR 2,000, ,000, FRN BBVAP 5-A1 06/39 EUR 1,000, , FRN IV TDA 6 A 99/29 EUR 1,636, ,641, FRN RHIPO 05/25 EUR 702, , FRN RURALPYME 1 FTPYME A1 04/35 EUR 1,185, ,185, ,650, UNITED KINGDOM FRN GRANITE MASTER 05/54 EUR 2,000, ,000, FRN LEEK FIN.17 XA2C 06/37 EUR 1,500, ,500, FRN NEWGATE A1B 06/50 EUR 4,000, ,197, ,697, TOTAL MORTGAGE BACKED SECURITIES 22,034, BONDS AUSTRIA 5.625% BANK AUSTRIA 97/07 DEM 17,590, ,103, ,103, FRANCE 3,5% B.T.A.N. 03/09 EUR 500, , % NESTLE FIN. FRANCE 02/07 EUR 5,100, ,067, % TOTAL CAPITAL 03/08 EUR 5,878, ,848, % FRANCE (BTAN) 03/08 EUR 3,050, ,039, % O. A. T. 98/09 EUR 11,400, ,424, ,25% C.N.C.E.P. 98/08 EUR 3,000, ,004, % NESTLE FIN. FRANCE 02/07 EUR 850, , ,5% C.N.C.E.P. 97/07 EUR 4,800, ,851, % DEXIA 01/09 EUR 5,000, ,112, % C. N. A 96/08 EUR 2,660, ,752, % TOTAL 97/09 EUR 5,411, ,613, % C. N. A. 96/07 EUR 1,524, ,550, % TOTAL 96/08 EUR 1,753, ,831,

162 Pictet Funds (LUX) - EUR Short-Mid Term Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets 7.40% C. N. A. 95/08 EUR 2,528, ,679, % A. F. D. 93/08 EUR 3,438, ,595, FRN LA POSTE 06/16 EUR 4,000, ,994, ,715, GERMANY 2.375% K.F.W.05/08 EUR 13, , % GERMANY 04/09 EUR 2,800, ,761, % LBK HESSEN-THUERING 03/08 EUR 4,900, ,875, % LANDW. RENTENBANK 03/08 EUR 2,450, ,441, % GERMANY 99/09 EUR 4,100, ,156, % LANDW. RENTENBANK 00/08 EUR 762, , ,023, GREECE 6,30% GREECE 99/09 EUR 11,730, ,259, ,259, ITALY 3.5% ITALY (BTP) 03/08 EUR 15,300, ,248, % ITALY 98/08 EUR 8,700, ,824, ,072, JERSEY 3.5% ASIF III 04/09 EUR 3,700, ,650, ,650, NETHERLANDS 3,25% SHELL INTERNAT.FIN. 06/09 EUR 2,000, ,966, ,75% RABOBANK 06/09 EUR 4,700, ,664, % NED. WATERSCHAPSBANK 04/08 EUR 5,000, ,952, % NED. WATERSCHAPSBANK 04/08 EUR 25, , % B.N.G 03/08 EUR 4,450, ,425, % ING BANK 98/09 NLG 10,500, ,839, % RABOBANK 98/08 NLG 1,200, , % DEUTSCHE BAHN FIN. 98/08 DEM 4,307, ,228, % ING BANK 98/08 NLG 2,075, , % B.N.G. 97/08 NLG 12,290, ,660, % NED. WATERSCHAPSBK 97/08 NLG 4,595, ,115, % DEUTSCHE BAHN FIN. 97/07 DEM 3,650, ,891, % NED. WATERSCHAPSBANK 96/08 NLG 2,200, ,017, % RABOBANK 97/09 NLG 895, , ,25% NED.WATERSCHAPSBANK 96/09 NLG 1,800, , % B.N.G 93/08 NLG 9,080, ,299, % ING BANK 93/08 NLG 5,090, ,418, % RABOBANK 96/08 ITL 15,370, ,426, FRN ARRAN C.LOAN S A2-1X 06/25 EUR 2,000, ,000, ,708, SUPRANATIONAL STEP I.A.D.B. 97/07 ITL 1,385, , , UNITED KINGDOM 3,75% BP CAPITAL EMT.NOT. 06/09 EUR 7,000, ,951, % L.B.W. CAP. MKTS 96/07 FRF 4,000, , ,571,

163 Pictet Funds (LUX) - EUR Short-Mid Term Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets UNITED STATES 3.875% CITIGROUP 03/10 EUR 4,399, ,365, ,25% BANK OF AMERICA 03/10 EUR 3,100, ,108, % TOYOTA MOTOR CREDIT 02/08 EUR 12,500, ,517, % GENERAL ELEC. CAP.02/09 EUR 6,400, ,535, ,527, TOTAL BONDS 214,355, TOTAL I. 236,390, II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES FRANCE FRN SPARF 1-A 05/11 EUR 1,000, ,000, ,000, IRELAND FRN PROMISE 06-1 A 06/12 EUR 2,000, ,000, ,000, UNITED KINGDOM FRN ARRAN RESIDENT.MTGE 06/56 EUR 1,500, ,499, ,499, TOTAL II. 4,500, TOTAL INVESTMENTS 240,890, CASH AT BANKS 32,951, OTHER NET ASSETS 5,011, TOTAL NET ASSETS 278,853,

164 Pictet Funds (LUX) - EUR Short-Mid Term Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) France Netherlands United States 9.50 Italy 9.19 United Kingdom 5.66 Germany 5.39 Greece 4.39 Spain 4.19 Austria 3.25 Jersey 1.31 Ireland 1.04 Supranational Industrial classification (in % of net assets) Corporate bonds Bonds issued by countries or cities Bonds issued by supranational institutions

165 Pictet Funds (LUX) - USD Short-Mid Term Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS CANADA 5,50% ONTARIO (PROV.) 06/08 USD 1,000, ,005, ,005, FRANCE 4% C.F.F.05/08 USD 1,500, ,474, % CADES 05/08 USD 1,500, ,479, % S.N.C.F. 06/09 USD 2,000, ,998, ,952, GERMANY 3.75% K. F. W 05/08 USD 2,000, ,974, ,625% LANDW. RENTENBANK 06/08 USD 2,000, ,987, ,962, JAPAN 6% N.T.T. 98/08 USD 500, , , NETHERLANDS 5,25% NED.WATERSCHAPSBANK 06/08 USD 2,000, ,001, ,001, PHILIPPINES 5% ASIAN DEV.BANK 06/08 USD 2,000, ,997, ,997, SUPRANATIONAL 2,75% WORLDBANK 04/07 USD 500, , ,25% WORLDBANK 05/09 USD 388, , , UNITED KINGDOM 5,625% HBOS TREASURY SERV. 06/09 USD 1,000, ,012, ,012, UNITED STATES 2,625% BANK ONE CORP 03/08 USD 500, , ,08% TOYOTA MOTOR CREDIT 04/08 USD 439, , % US TREASURY 03/08 USD 1,000, , ,375% US TREASURY 05/08 USD 1,000, , ,5% US TREASURY 06/09 USD 1,500, ,491, ,875% US TREASURY 06/09 USD 200, , ,25% GENERAL ELEC.CAP. 06/09 USD 2,000, ,007, ,5% FREDDIE MAC 06/09 USD 2,000, ,001, ,875% WAL-MART 99/09 USD 500, , ,093, TOTAL BONDS 25,392, TOTAL I. 25,392,

166 Pictet Funds (LUX) - USD Short-Mid Term Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES BONDS UNITED STATES 3% TOYOTA MOTOR CREDIT 04/08 USD 400, , FRN WORLD SAVING BANK 06/09 USD 1,000, ,000, ,389, TOTAL BONDS 1,389, TOTAL II. 1,389, TOTAL INVESTMENTS 26,781, CASH AT BANKS 1,545, OTHER NET ASSETS 390, TOTAL NET ASSETS 28,718,

167 Pictet Funds (LUX) - USD Short-Mid Term Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States France Germany Netherlands 6.97 Philippines 6.96 United Kingdom 3.53 Canada 3.50 Supranational 3.00 Japan Industrial classification (in % of net assets) Corporate bonds Bonds issued by countries or cities Bonds issued by supranational institutions

168 Pictet Funds (LUX) - EUR Turbo Income STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES BELGIUM FRN DIAMOND MORTG.FIN A 06/33 EUR 1,000, ,000, ,000, CAYMAN ISLANDS 3,166% GRANITE FIN 1XC4 06/54 EUR 300, , , FRANCE FRN FCC MINOT.S A 06/26 EUR 2,000, ,874, FRN FCC NACREA A 06/24 EUR 1,000, ,000, FRN PPCRE C 06/14 EUR 500, , FRN SPARF 1-A 05/11 EUR 1,500, ,500, ,875, IRELAND FRN CRSM 10 CL.A2 06/48 EUR 600, , FRN CRSM 11 A3A 06/48 EUR 1,000, ,000, FRN CRSM 11 BA 06/48 EUR 1,000, ,000, FRN DECO 9-E3X A1 06/17 EUR 1,000, , FRN FR.RES.S B 05/43 EUR 1,000, ,000, FRN FRENCH.RES.S.06-1 D 06/43 EUR 300, , FRN GRND 1 A 06/16 EUR 660, , FRN GRND 1 C 06/16 EUR 440, , FRN JAZZ CDO III AA 06/14 EUR 200, , FRN JAZZ CDO III B 06/14 EUR 200, , FRN JAZZ CDO III CA 06/14 EUR 200, , FRN MAGELLAN MTGS 4 06/59 EUR 1,200, ,170, FRN PROMISE 06-1 B 06/12 EUR 1,000, ,000, FRN TAURUS B 06/15 EUR 500, , FRN TAURUS A 06/15 EUR 1,000, ,000, ,262, LUXEMBOURG FRN EUROPE EMC A S.4 06/13 EUR 900, , , NETHERLANDS FRN BELUGA MAS. C /99 EUR 500, , FRN E-MAC NL04-I A 04/36 EUR 500, , FRN LAMBDA FINANCE BV. 05/29 EUR 1,500, ,504, FRN SHIELD I BV B 05/14 EUR 500, , FRN SHIELD I C 05/14 EUR 500, , FRN SMILE SYNT. 5B -S- 05/15 EUR 500, , FRN STICHTING DFM VEH. A 05/18 EUR 1,000, ,000, ,826, SPAIN FRN BANKINTER 2 SERIES B 06/43 EUR 500, , FRN BBVAC A 06/20 EUR 1,500, ,500, FRN BBVAP 5-A1 06/39 EUR 1,000, , FRN CAJA LABORAL 06-1 A 06/49 EUR 2,000, ,000, FRN IV AYTPI 05/37 EUR 1,289, ,289,

169 Pictet Funds (LUX) - EUR Turbo Income STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets FRN IV SHIPO A2 06/48 EUR 385, , FRN RURAL HIPOTECARIO 05/39 EUR 598, , FRN RURALPYME 1 B 04/35 EUR 300, , FRN SANTM 2 A2 06/50 EUR 2,000, ,000, FRN TDA IBERCAJA S. B 06/43 EUR 700, , FRN TDCAM -3- S.A2 06/40 EUR 900, , ,173, SWITZERLAND FRN MARS B 06/14 EUR 500, , , UNITED KINGDOM 0% GRACECHURCH MTGE FD 05/06 EUR 640, , FRN AIRE VALL. CL.2A1 06/66 EUR 900, , FRN ARRAN RESIDENT.MTGE 06/56 EUR 500, , FRN EURO.LOAN A -S- 06/19 EUR 800, , FRN GRACECHURCH 06-1 C3 06/56 EUR 400, , FRN GRAN S.2C 02/43 EUR 500, , FRN GRANITE MAS.06-4 C3 06/54 EUR 400, , FRN GRANITE MASTER /54 EUR 400, , FRN GRANITE MASTER 06/54 EUR 640, , FRN LEEK FIN.7 X-BC 06/37 EUR 200, , FRN NEWGATE MB 09/50 EUR 300, , FRN PARAGON N12 B1B 06/38 EUR 550, , FRN PARAGON N12 C1B 06/38 EUR 550, , ,786, TOTAL MORTGAGE BACKED SECURITIES 40,624, BONDS ARUBA 8.75% UFJ FINANCE ARUBA 03/PE USD 400, , , AUSTRIA FRN BANK AUSTRIA 05/10 EUR 400, , , BELGIUM 4,125% BELGACOM 06/11 EUR 350, , % BELGACOM 06/16 EUR 350, , , BRAZIL 9% COSAN 04/09 USD 100, , , CANADA 9% MECACHROME 06/14 EUR 100, , FRN BOMBARDIER 06/13 EUR 100, , , CAYMAN ISLANDS 4.75% MIZUHO FINANCE 04/14 EUR 600, , ,

170 Pictet Funds (LUX) - EUR Turbo Income STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets DENMARK FRN FIH ERHVERVSBANK 05/10 EUR 500, , FRN NORDIC TELEPHONE 06/16 EUR 200, , FRN PURUSCO SECUR.SEN.SUB.06/16 EUR 200, , , FINLAND 4.625% FORTUM 03/10 EUR 400, , FRN NORDEA BANK FINLAND 02/14 EUR 300, , , FRANCE 3,125% SCHNEIDER ELECTRIC 05/10 EUR 400, , ,625% TECHNIP 04/11 EUR 250, , % WENDEL INVEST. 04/11 EUR 250, , % PINAULT PRINTEMPS 03/09 EUR 500, , ,875% BOUYGUES 02/09 EUR 300, , % CASINO GUICHARD 01/08 EUR 600, , % GIE PSA TRESORERIE 03/33 EUR 250, , ,375% MICHELIN 03/33 EUR 300, , % COFIROUTE 96/07 EUR 915, , ,125% EUROPCAR GROUPE 06/14 EUR 150, , FRN B.F.C.M.04/14 EUR 200, , FRN BANQUE ACCORD 04/09 EUR 300, , FRN CAISSE CEN. CRED. IMMO.05/10 EUR 750, , FRN CNP ASSURANCES 06/PE EUR 400, , FRN EUROPCAR GROUP SUB. 06/13 EUR 200, , FRN FRANCE TELECOM 04/07 EUR 650, , FRN PERNOD RICARD 06/11 EUR 150, , FRN RCI BANQUE 06/08 EUR 350, , FRN TV CARREFOUR 04/07 EUR 500, , ,486, GERMANY FRN BAYER AG 06/09 EUR 400, , % CJSC RUSSIAN 04/07 USD 100, , % COGNIS DEUTSCHLAND 04/14 EUR 125, , , GREECE FRN HELLAS TELEC II 06/15 EUR 150, , , ICELAND FRN KAUPTHING BANK 05/07 CHF 1,000, , FRN TV ISLANDSBANKI 04/07 EUR 200, , , IRELAND 9% SIBACADEMFINANCE 06/09 USD 310, , FRN BANK OF IRELAND 03/13 EUR 500, , FRN BCM IRELAND FIN. 06/16 EUR 220, , FRN TITAN EUROPE A-2X 06/16 EUR 500, , ,369,

171 Pictet Funds (LUX) - EUR Turbo Income STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets ITALY FRN BANCA INTESA 05/10 EUR 400, , FRN BANCO POP. VER. NOVA.05/10 EUR 400, , , JAPAN 0,5% JAPAN (Inflation) 04/14 JPY 542, ,314, % SUMITOMO MITSUI BK 03/PE USD 400, , FRN RESONA BANK 05/15 EUR 240, , ,865, KAZAKHSTAN 7,625% ASTANA FINANCE 06/09 USD 180, , % BANK CENTERCREDIT 05/08 USD 100, , % AFT BANK 04/07 USD 220, , , LUXEMBOURG 4,375% HOLCIM FINANCE LUX. 03/10 EUR 350, , % HANNOVER FINANCE 05/PE EUR 250, , % ARCELOR 03/10 EUR 300, , % ALROSA FINANCE 03/08 USD 100, , FRN SES GLOBAL 06/09 EUR 300, , FRN VTB CAPITAL 06/08 USD 150, , ,394, NETHERLANDS 3,375% URENCO FINANCE 05/10 EUR 400, , % SAINT GOBAIN NED. 99/09 EUR 350, , % REPSOL INTL FINANCE 00/10 EUR 400, , ,375% LINDE FINANCE 00/07 EUR 500, , % VICTORIA ACQUISITION 4/14 EUR 150, , % EXCELCOMINDO FIN. 04/09 USD 100, , % URALVNESHT. (CLN CRR) 06/07 USD 100, , FRN ARRAN C.LOAN S A2-1X 06/25 EUR 1,000, ,000, FRN ASSET REPACKG.TRUST 06/11 EUR 100, , FRN DEUTSCHE TELECOM 05/09 EUR 500, , FRN LEASEPLAN FINANCE 05/07 EUR 500, , FRN NXP BV 06/13 EUR 300, , FRN VW INTL FIN. S /08 EUR 650, , STEP OLIVETTI FIN. 99/09 EUR 175, , ,228, PAKISTAN 8,625% PAKISTAN MOBILE 06/13 USD 160, , , PHILIPPINES 8,875% PHILIPPINES 98/08 USD 100, , , SPAIN FRN BANCAJA 2 ISS.05/10 EUR 700, , FRN CAJA DUERO CAPITAL 03/PE EUR 390, , FRN TELEFONICA EMIS. 06/10 EUR 300, , ,399,

172 Pictet Funds (LUX) - EUR Turbo Income STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets SWITZERLAND FRN CS GROUP CAP. II 00/PE EUR 350, , , UKRAINE 11% UKRAINE 00/07 USD 550, , , UNITED KINGDOM 3,375% SASOL FINANC.INT. 05/10 EUR 250, , ,625% LLOYDS TSB BANK 99/PE EUR 600, , ,875% GALLAHER GROUP 98/08 EUR 500, , % NATL WESTMINSTER BK 99/PE EUR 500, , ,5% LOUIS No.1 REG.S 06/14 EUR 200, , FRN OTE EUR.TERM NOTES 06/09 EUR 500, , FRN PERMANENT FIN. 9X-4C 06/42 EUR 200, , ,804, UNITED STATES 4.125% DAIMLERCHRYSLER 06/09 EUR 500, , % G.M.A.C.03/08 EUR 300, , ,25% CHESAPEAKE ENERGY 06/17 EUR 200, , % G.M.A.C.02/07 EUR 50, , ,875% SOGGEN CAPITAL TR. 00/PE EUR 450, , % GENERAL MOTORS 03/13 EUR 150, , ,125% HCA -SR- REG.S 06/14 USD 70, , FRN BANK OF AMERICA 05/10 EUR 400, , FRN SAN PAOLO IMI CAPIT.00/PE EUR 350, , ,549, VENEZUELA FRN VENEZUELA 04/11 USD 150, , , TOTAL BONDS 33,534, OPTIONS UNITED STATES CALL EURO USD 3-MONTH INTEREST RATES 27/12/ , CALL EURO USD 3-MONTH INTEREST RATES 27/12/ , CALL EURO USD 3-MONTH INTEREST RATES 27/12/ , , TOTAL OPTIONS -2, TOTAL I. 74,155, II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES SPAIN FRN BANKINTER 05/38 EUR 1,312, ,317, IV CAJAM A2 06/49 EUR 1,000, ,000, ,318, TOTAL MORTGAGE BACKED SECURITIES 2,318,

173 Pictet Funds (LUX) - EUR Turbo Income STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets OPTIONS SWITZERLAND CALL FICTITIOUS INDEX 26/12/06-1,140, , , TOTAL OPTIONS -6, TOTAL II. 2,311, TOTAL INVESTMENTS 76,467, CASH AT BANKS 5,985, OTHER NET LIABILITIES -2,792, TOTAL NET ASSETS 79,661,

174 Pictet Funds (LUX) - EUR Turbo Income GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Spain France Ireland Netherlands United Kingdom Japan 4.85 United States 3.19 Luxembourg 2.88 Belgium 2.12 Cayman Islands 1.14 Denmark 1.14 Iceland 1.03 Italy 1.00 Finland 0.90 Germany 0.77 Switzerland 0.62 Austria 0.50 Switzerland 0.49 Kazakhstan 0.48 Aruba 0.40 Canada 0.25 Greece 0.19 Pakistan 0.16 Venezuela 0.14 Philippines 0.10 Brazil 0.10 Ukraine Industrial classification (in % of net assets) Corporate bonds Bonds issued by countries or cities 4.44 Options

175 Pictet Funds (LUX) - CHF Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES FRANCE 2% CIF EUROMORTGAGE 05/15 CHF 1,500, ,423, ,423, UNITED STATES 2.50% CITIBANK 04/11 CHF 3,200, ,190, ,190, TOTAL MORTGAGE BACKED SECURITIES 4,613, BONDS ARUBA 8.75% UFJ FINANCE ARUBA 03/PE USD 2,025, ,609, ,609, AUSTRALIA 2,125% COMMONWEAL.BK.AUST. 06/11 CHF 2,000, ,954, % ANZ BANKING GROUP 03/08 CHF 1,000, , ,947, AUSTRIA 1,875% KOMMUNALKR AUSTRIA 04/10 CHF 5,000, ,850, % O.K.B.03/08 CHF 990, , % KOMMUNALKR. AUSTRIA 05/12 CHF 8,070, ,727, % KOMMUNALKR AUSTRIA 03/10 CHF 2,000, ,963, ,125% KOMMUNALKR AUSTRIA 06/09 CHF 1,000, , ,25% HYPO ALPE-ADRIA-BK 06/13 CHF 500, , ,375% VORARLBERGER LHYBK 06/17 CHF 3,000, ,899, ,5% KOMMUNALKR AUSTRIA 06/22 CHF 1,500, ,446, ,625% O.K.B. 06/24 CHF 5,000, ,932, % BIG M. B. H.05/18 CHF 1,500, ,413, % HYPO ALPE-ADRIA-BK 05/11 CHF 2,500, ,442, % O.K.B.05/18 CHF 7,000, ,639, % PFBST. OEST. L-HYPO.05/16 CHF 600, , % HYPO ALPE-ADRIA-BK 05/12 CHF 1,500, ,465, % NIEDEROESTERR. LBK 05/17 CHF 7,250, ,949, % PFBST. OEST. L-HYPO.04/12 CHF 3,500, ,435, % PFBST. OEST. L-HYPO.05/13 CHF 2,900, ,834, % VORARLB LHYBK 04/10 CHF 1,500, ,491, % HYPO TIROL BANK 05/17 CHF 3,750, ,630, % KOMMUNALKR AUSTRIA 05/17 CHF 1,000, , % KOMMUNALKR AUSTRIA 05/20 CHF 1,000, , % HYPO ALPE-ADRIA-BK 05/16 CHF 4,140, ,075, % VORALBERGER LHYBK 05/16 CHF 6,200, ,119, % O.K.B.05/20 CHF 4,500, ,522, % O.K.B.05/30 CHF 6,000, ,135, % PFBST. OEST. L-HYPO.03/17 CHF 7,650, ,745, % AUTRICHE 99/09 CHF 8,745, ,871, % O.K.B.03/15 CHF 6,550, ,736, % PFBST. OEST. L-HYPO.01/09 CHF 17,680, ,821, ,25% O.K.B. 06/36 CHF 1,400, ,544,

176 Pictet Funds (LUX) - CHF Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets 3.375% AUTRICHE 02/12 CHF 4,000, ,166, % BIG M. B. H.01/08 CHF 8,855, ,987, % VORARLB.LAND.&HYPBK.01/13 CHF 25, , % OEST. POSTSPARKASSE 00/15 CHF 6,265, ,214, ,034, BERMUDA 2,75% HOLCIM OVS FINANCE 06/11 CHF 1,500, ,495, ,495, CANADA 2% ONTARIO (PROV.) 05/14 CHF 3,000, ,881, ,125% BANK NOVA SCOTIA 05/10 CHF 500, , ,625% QUEBEC (PROV.) 06/17 CHF 1,890, ,864, % BRITISH COLUMBIA 02/08 CHF 3,820, ,811, % ONTARIO (PROV.) 05/15 CHF 850, , % SASKATCHEWAN (PROV.) 05/16 CHF 4,720, ,519, % QUEBEC (PROV.) 05/15 CHF 7,420, ,138, % ONTARIO (PROV.) 03/13 CHF 70, , % QUEBEC (PROV.) 98/08 CHF 10,015, ,160, ,755, CAYMAN ISLANDS 1.75% SIGMA FINANCE 05/11 CHF 2,500, ,413, ,25% LGT FINANCE 06/14 CHF 2,680, ,590, ,375% NEW YORK LIFE FUND. 06/16 CHF 2,680, ,580, ,625% LGT FINANCE 06/10 CHF 3,860, ,869, FRN CULLINAN FINANCE 06/08 CHF 6,000, ,000, FRN SIGMA FINANCE 06/11 USD 2,800, ,421, ,876, DENMARK 1.625% KOMMUNEKREDIT 05/11 CHF 710, , % DANSKE BANK 05/11 CHF 4,000, ,860, % KOMMUNEKREDIT 03/13 CHF 9,450, ,544, % KOMMUNEKREDIT 01/08 CHF 6,550, ,599, % COPENHAGEN CITY 00/08 CHF 250, , ,940, FINLAND 2.75% MUNICIPALITY FIN.04/14 CHF 500, , % KOMMUNALFINANZIERUNG98/08 CHF 4,195, ,253, ,757, FRANCE 1.625% RESEAU FER FRANCE 05/11 CHF 4,850, ,635, % TOTAL CAPITAL 05/11 CHF 2,660, ,550, % SNCF 05/12 CHF 695, , % ILE DE FRANCE 05/14 CHF 1,500, ,432, % BNP PARIBAS 06/11 CHF 4,890, ,760, % NATEXIS BANQ.POP. 06/10 CHF 3,600, ,538, % A. F. D.03/10 CHF 6,250, ,143, % VILLE DE PARIS 05/14 CHF 11,340, ,914, ,125% DEXIA CLF 06/12 CHF 1,000, , ,5% DEXIA CLF 06/13 CHF 750, , ,625% S.N.C.F. 06/21 CHF 800, , ,625% TOTAL CAPITAL 06/14 CHF 1,500, ,495,

177 Pictet Funds (LUX) - CHF Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets 2,75% FRANCE TELECOM 06/12 CHF 5,740, ,668, % RATP 05/15 CHF 4,000, ,840, % C.F.F.04/11 CHF 2,800, ,769, % C.F.F.05/18 CHF 11,000, ,598, % ILE DE FRANCE 05/16 CHF 4,500, ,434, % TOTAL CAPITAL 03/09 CHF 4,000, ,978, % TOTAL CAPITAL 03/10 CHF 2,500, ,485, % TOTAL CAPITAL 04/12 CHF 7,450, ,360, % TOTAL CAPITAL 06/16 CHF 3,500, ,407, % B.F.C.M 06/13 CHF 11,060, ,181, % CIF EUROMORTGAGE 03/14 CHF 2,500, ,557, ,125% TOTAL CAPITAL 06/18 CHF 1,000, ,033, % C.F.F.03/14 CHF 2,000, ,062, % RESEAU FERRE FRANCE 98/08 CHF 8,965, ,086, % DEXIA MUNICIPAL AG.00/10 CHF 440, , ,567, GERMANY 1.875% EUROHYPO 05/11 CHF 1,000, , % BAYERISCHE LDBK 06/11 CHF 1,000, , % DEUTSCHE BANK 06/09 CHF 4,590, ,521, % ALLG.HYPO.RHEINBODEN03/08 CHF 3,500, ,483, % DEPFA 03/10 CHF 3,250, ,188, % DEPFA 05/12 CHF 1,000, , % K.F.W.04/09 CHF 2,250, ,225, % L.B.W.04/09 CHF 2,590, ,562, % LANDW. RENTENBANK 05/15 CHF 970, , ,5% DEUTSCHE HYPOTHE.BK 06/18 CHF 5,000, ,892, ,75% BAYERISCHE LDBK 06/14 CHF 1,000, , % BAYERISCHE LDBK 02/08 CHF 3,000, ,991, % L.B.W 05/13 CHF 1,250, ,223, % LAND HESSEN 02/08 CHF 3,500, ,482, % BAYERISCHE LANDES.04/11 CHF 2,000, ,996, % K.F.W.05/25 CHF 2,520, ,433, % DEPFA 05/17 CHF 400, , % DEPFA 03/15 CHF 2,450, ,508, % LBK HESSEN-THUERING.02/12 CHF 6,305, ,431, % LDKR BADEN-WUER. FBK.03/13 CHF 1,000, ,023, ,125% BAYERISCHE LDBK 06/16 CHF 1,800, ,819, % BAYERISCHE LDBK 99/09 CHF 11,375, ,522, % LANDW. RENTENBANK 03/13 CHF 500, , % K.F.W.02/12 CHF 1,000, ,051, % LBK HESSEN-THUERING.01/11 CHF 3,050, ,188, % BAYERISCHE LDBK 01/11 CHF 1,250, ,316, ,591, GREECE 2.375% GREECE 04/11 CHF 3,700, ,643, ,643, ICELAND FRN KAUPTHING BANK 05/07 CHF 27,600, ,531, ,531,

178 Pictet Funds (LUX) - CHF Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets IRELAND 1.875% DEPFA ACS BANK 04/09 CHF 4,000, ,948, ,25% AEGON GLOBAL INST. 06/11 CHF 1,500, ,474, ,375% DEPFA ACS BANK 06/19 CHF 1,000, , % UNICREDITO ITALIA 05/12 CHF 1,000, , ,350, ITALY 1.75% ITALY 04/08 CHF 2,155, ,136, % ITALY 04/11 CHF 6,650, ,653, % ITALY 99/10 CHF 3,650, ,701, ,490, JAPAN 1.875% N. T. T.05/12 CHF 1,300, ,246, ,25% N.T.T 06/13 CHF 7,230, ,063, ,625% KYUSHU ELECTR.POWER 06/13 CHF 2,200, ,185, % JAPAN FINANCE MUN. 98/08 CHF 4,000, ,024, % SUMITOMO MITSUI BK 03/PE USD 2,030, ,577, FRN RESONA BANK 05/15 EUR 1,450, ,282, ,380, JERSEY 2,75% UBS JERSEY 06/16 CHF 400, , ,75% UBS JERSEY BRANCH 06/18 CHF 2,100, ,080, % UBS JERSEY BRANCH 05/15 CHF 3,090, ,981, ,461, LUXEMBOURG 2,375% ERSTE EUROP.PFANDBF 06/21 CHF 750, , % EUROP. HYPO. BANK 05/14 CHF 2,400, ,316, % ERSTE EUROP. PFANDBF 05/16 CHF 5,500, ,296, % ERSTE EUROP. PFANDBF 03/10 CHF 1,500, ,494, % EUROP. HYPO. BANK 05/25 CHF 3,870, ,697, % EUROP. HYPO. BANK 05/20 CHF 800, , % LG ERSTE EUROP. KBK 05/20 CHF 1,250, ,249, % ERSTE EUROPAEISC 05/25 CHF 250, , FRN ASSET BACKED EUR 06/09 CHF 8,000, ,000, FRN EUROPEAN CREDIT (LUXBG) 05/15 CHF 6,200, ,197, ,016, NETHERLANDS 1.5% RABOBANK 05/10 CHF 2,000, ,930, % ENERGIE BEHEER NED.05/10 CHF 850, , % ENERGIE BEHEER NED.05/12 CHF 955, , % RABOBANK 04/09 CHF 5,000, ,925, % B.N.G.02/08 CHF 8,545, ,468, % ING VERZEKERINGEN 05/11 CHF 5,500, ,332, % RABOBANK 05/11 CHF 150, , ,125% RABOBANK 06/12 CHF 1,000, , ,25% B.N.G. 05/20 CHF 7,720, ,330, ,50% ABN AMRO BANK 06/15 CHF 7,050, ,944, % RABOBANK 05/17 CHF 1,100, ,040, % BANK NED. GEMEENTEN 03/09 CHF 900, , % NED. WATERSCHAPSBANK 05/20 CHF 2,550, ,446, % B.N.G.02/25 CHF 3,600, ,461,

179 Pictet Funds (LUX) - CHF Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets 2.50% NED. WATERSCHAPSBANK 05/15 CHF 2,300, ,286, % NED. WATERSCHAPSBANK 99/09 CHF 8,325, ,416, % RABOBANK 02/08 CHF 9,885, ,978, ,375% ABN AMRO 06/31 CHF 200, , % B.N.G. 98/08 CHF 1,330, ,345, % NED. WATERSCHAPSBANK 02/12 CHF 3,050, ,173, % RABOBANK 98/08 CHF 8,640, ,808, % B.N.G 97/09 CHF 4,000, ,118, % RABOBANK NEDERLAND 00/12 CHF 2,940, ,200, % B.N.G.00/10 CHF 5,370, ,724, ,915, NEW ZEALAND 1.75% ASB BANK 05/10 CHF 1,000, , , NORWAY 2% EKSPORTFINANS 03/09 CHF 2,500, ,472, % EKSPORTFINANS 03/13 CHF 5,850, ,797, % KOMMUNALBANKEN 02/09 CHF 13,755, ,030, % STATOIL 99/09 CHF 3,000, ,105, % STATKRAFT 00/10 CHF 10,000, ,625, ,029, POLAND 1.875% POLAND 05/10 CHF 1,100, ,070, % POLAND 05/15 CHF 730, , ,787, SOUTH KOREA 2,75% EXPORT-IM.BK. KOREA 07/12 CHF 2,100, ,096, ,096, SUPRANATIONAL 2% E.I.B.05/16 CHF 1,300, ,231, % E.I.B.05/20 CHF 1,060, ,024, % E.I.B.03/15 CHF 8,000, ,968, % EUROFIMA 06/26 CHF 3,030, ,152, ,125% E.I.B. 06/36 CHF 1,000, ,075, % E.I.B.01/11 CHF 875, , % E.I.B. 99/14 CHF 5,135, ,455, ,819, SWEDEN 2,375% SWEDISH COVERED BD 06/12 CHF 4,000, ,946, % AKADEMISKA HUS 06/14 CHF 5,100, ,966, % KOMMUNINVEST I SVER.03/11 CHF 1,625, ,607, % KOMMUNINVEST I SVER.03/13 CHF 2,000, ,018, ,538, SWITZERLAND 2% CONFED. SUISSE 05/16 CHF 5,620, ,402, ,125% SIG HOLDING 05/11 CHF 400, , ,50% CONFED. SUISSE 06/36 CHF 4,000, ,965, ,55% VILLE DE ZURICH 06/36 CHF 1,500, ,455, ,625% AAR & TESSIN ATEL 06/18 CHF 1,500, ,507, ,625% BLG CRED.HYPO.S /11 CHF 1,000, ,005, ,75% SIKA 06/11 CHF 1,600, ,594,

180 Pictet Funds (LUX) - CHF Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets 2,875% CLIENTIS 06/13 CHF 1,000, ,000, ,875% BANQUE COOP 06/16 CHF 2,650, ,656, % HOLCIM LTD 06/15 CHF 2,200, ,187, ,125% FLUGHAFEN ZUERICH 06/10 CHF 1,900, ,922, ,25% CIBA SPEZIALETAET. 06/12 CHF 3,550, ,564, ,5% SAURER 06/13 CHF 3,850, ,844, ,496, UNITED ARAB EMIRATES 2,75% ABU DHABI COM.BK. 06/11 CHF 4,400, ,362, ,362, UNITED KINGDOM 2,25% ROYAL BK SCOTLAND 06/11 CHF 2,380, ,345, ,5% CREDIT AGRICOLE 06/13 CHF 5,230, ,149, ,5% HBOS TREASURY SERV. 06/11 CHF 5,540, ,487, ,625% HBOS TREASURY SERV. 06/12 CHF 500, , ,75% BRADFORD & BINGLEY 06/12 CHF 1,740, ,748, ,75% BRADFORD & BINGLEY 06/18 CHF 2,270, ,266, ,75% NETWORK RAIL INFRA. 06/21 CHF 5,000, ,007, ,75% ROYAL BK SCOTLAND 06/17 CHF 1,000, , % CREDIT AGRICOLE 06/14 CHF 750, , % HBOS TREASURY 05/13 CHF 1,600, ,560, % ROYAL BANK SCOTLAND 05/15 CHF 3,800, ,640, % BRADFORD & BINGLEY 06/16 CHF 1,310, ,338, ,761, UNITED STATES 1,75% GENERAL ELEC. CAP. 05/11 CHF 1,150, ,105, % IBM 04/08 CHF 4,500, ,437, % CITIGROUP 05/10 CHF 500, , % GENERAL ELEC. CAP.03/08 CHF 5,000, ,942, % GENERAL ELEC. CAP.05/10 CHF 8,500, ,287, % BANK OF AMERICA 05/12 CHF 2,000, ,918, % COLGATE PALMOLIVE 05/10 CHF 1,800, ,756, % METROPOLITAN LIFE 05/11 CHF 7,720, ,496, % MORGAN STANLEY 05/11 CHF 4,120, ,984, % TOYOTA MOTOR CREDIT 06/12 CHF 1,000, , ,25% BMW US CAPITAL LLC 06/10 CHF 3,570, ,515, ,50% GENERAL ELEC. CAP. 06/10 CHF 1,000, , ,75% PACIFIC LIFE GLOBAL 06/12 CHF 2,000, ,993, ,75% AMERICAN INTL GR. 06/16 CHF 5,110, ,048, ,875% AMERICAN INTL GR. 06/11 CHF 4,000, ,021, ,875% TOYOTA MOTOR CREDIT 06/16 CHF 2,320, ,353, ,875% MORGAN STANLEY 06/13 CHF 4,330, ,331, % GENERAL ELEC. CAP.05/12 CHF 2,660, ,576, % GENERAL ELEC. CAP.04/09 CHF 2,640, ,626, % MERRILL LYNCH & CO 04/09 CHF 5,000, ,942, % TOYOTA MOTOR CREDIT 03/09 CHF 10,495, ,416, % CITIGROUP 05/15 CHF 500, , % GENERAL ELEC. CAP.06/12 CHF 2,820, ,784, % TOYOTA MOTOR CREDIT 04/10 CHF 11,250, ,205, % BANK OF AMERICA 05/17 CHF 2,000, ,916, % CITIBANK CR. CARD IT 05/15 CHF 1,700, ,673, % MORGAN STANLEY 05/15 CHF 1,000, ,

181 Pictet Funds (LUX) - CHF Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN CHF) Description Currency Nominal value Market value (note 2) % of net assets 3% GENERAL ELEC. CAP. 06/13 CHF 1,130, ,149, % CITIGROUP 04/14 CHF 8,200, ,302, % K.F.W. INT. FINANCE 99/09 CHF 1,565, ,588, ,25% BANK OF AMERICA 06/16 CHF 2,590, ,662, ,375% GENERAL ELEC.CAP. 06/18 CHF 1,000, ,042, % GENERAL ELEC. CAP.01/14 CHF 1,000, ,069, ,042, TOTAL BONDS 857,267, TOTAL I. 861,881, II. OTHER TRANSFERABLE SECURITIES BONDS AUSTRIA 2,75% VORALBERGER LHYBK. 06/14 CHF 500, , , IRELAND 2,50% AEGON GLOBAL INST 06/10 CHF 800, , , NETHERLANDS 2,75% ENERGIE BEHEER NED. 06/13 CHF 3,000, ,028, ,028, SOUTH KOREA 3% KOREA DEV. BANK 06/11 CHF 1,230, ,235, ,235, SWITZERLAND 2,375% SIKA 06/13 CHF 740, , ,625% PSP SWISS PROPERTY 06/16 CHF 2,000, ,938, ,653, UNITED STATES 2,625% BEAR STEARNS 06/11 CHF 3,620, ,585, ,75% HSBC FINANCE 06/11 CHF 3,160, ,160, ,25% HSBC FINANCE 06/16 CHF 800, , ,567, TOTAL II. 15,785, TOTAL INVESTMENTS 877,666, CASH AT BANKS 862, OTHER NET LIABILITIES -95,536, TOTAL NET ASSETS 782,993,

182 Pictet Funds (LUX) - CHF Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Austria United States France Netherlands Germany 8.62 Norway 4.62 Switzerland 4.25 Canada 4.06 United Kingdom 3.92 Luxembourg 3.83 Iceland 3.53 Supranational 2.67 Denmark 2.67 Cayman Islands 2.67 Japan 2.47 Sweden 1.60 Italy 1.59 Ireland 1.03 Jersey 0.70 Finland 0.60 United Arab Emirates 0.56 Greece 0.47 South Korea 0.43 Australia 0.38 Aruba 0.33 Poland 0.23 Bermuda 0.19 New Zealand Industrial classification (in % of net assets) Corporate bonds Bonds issued by countries or cities 7.46 Bonds issued by supranational institutions

183 Pictet Funds (LUX) - EUR Government Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS BELGIUM 5% BELGIUM OLO 44 04/35 EUR 2,790, ,184, % BELGIUM OLO 38 02/12 EUR 10,400, ,951, ,136, FRANCE 2.75% B. T. A. N. 05/08 EUR 7,950, ,847, ,5% B. T. A. N. 06/08 EUR 8,000, ,946, % O. A. T. 03/14 EUR 3,100, ,106, % O. A. T. 03/19 EUR 9,350, ,559, % B. T. A. N. 01/07 EUR 3,610, ,627, % O. A. T. 03/35 EUR 4,760, ,257, % O. A. T. 01/12 EUR 5,050, ,302, ,3% B.F.C.M 98/08 EUR 1,490, ,507, % DEXIA C.L.F 98/08 EUR 2,400, ,435, % O. A. T. 99/10 EUR 6,500, ,858, % O. A. T. 99/10 EUR 8,740, ,160, ,608, GERMANY 3,25% GERMANY 05/10 EUR 9,300, ,116, ,875% DEUTSCHE BANK 04/14 EUR 1,360, ,351, % GERMANY 05/15 EUR 11,640, ,071, GERMANY S /08 EUR 11,300, ,345, % GERMANY 03/14 EUR 12,720, ,950, % GERMANY 03/13 EUR 10,710, ,028, % GERMANY 99/09 EUR 12,660, ,833, GERMANY 98/08 EUR 10,610, ,738, % GERMANY 01/11 EUR 4,360, ,546, % GERMANY 00/31 EUR 7,300, ,828, % GERMANY 97/07 EUR 9,680, ,782, % GERMANY 94/24 EUR 8,960, ,338, ,931, GREECE 3,9% GREECE 06/11 EUR 1,600, ,589, ,50% GREECE 05/37 EUR 3,100, ,113, ,702, ITALY 3,50% ITALY 06/11 EUR 7,500, ,358, ,75% ITALY 06/09 EUR 15,140, ,077, ,75% ITALY 06/16 EUR 7,000, ,771, % ITALY 98/09 EUR 5,920, ,996, % ITALY (BTP) 03/34 EUR 6,470, ,082, % ITALY 02/07 EUR 5,990, ,042, % ITALY (BTP) 98/29 EUR 3,320, ,719, % ITALY 02/33 EUR 6,850, ,270, % ITALY (BTP) 99/31 EUR 4,990, ,169, % ITALY 93/23 EUR 7,370, ,464, ,951,

184 Pictet Funds (LUX) - EUR Government Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets JAPAN STEP SUMITOMO MITSUI BK.04/14 EUR 3,500, ,505, ,505, NETHERLANDS 3,75% RABOBANK 06/09 EUR 8,000, ,939, % NETHERLANDS 06/16 EUR 2,100, ,103, ,25% FORTIS BNK.NEDERLAND98/08 NLG 1,170, , ,375% ING BANK 98/08 NLG 2,240, ,031, ,612, SPAIN 4.2% SPAIN 03/13 EUR 16,480, ,702, ,5% SPAIN 02/17 EUR 2,860, ,222, % SPAIN 98/09 EUR 21,375, ,016, % SPAIN 01/32 EUR 3,460, ,326, ,268, UNITED KINGDOM 5,125% R.B.O.S 01/13 EUR 2,850, ,897, ,25% ROYAL BK SCOTLAND 98/08 DEM 1,745, , ,803, UNITED STATES 3,25% SLM 03/08 EUR 2,250, ,219, ,219, TOTAL INVESTMENTS 341,740, CASH AT BANKS 5,750, OTHER NET ASSETS 6,584, TOTAL NET ASSETS 354,075,

185 Pictet Funds (LUX) - EUR Government Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Germany Italy France Spain Belgium 3.99 Netherlands 3.27 Greece 1.33 United Kingdom 1.08 Japan 0.99 United States Industrial classification (in % of net assets) Bonds issued by countries or cities Corporate bonds

186 Pictet Funds (LUX) - EUR Inflation Linked Bonds STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS FRANCE 1% O.A.T. (inflation) 05/17 EUR 835, , ,25% FRANCE (inflation) 06/10 EUR 400, , ,60% O.A.T. (inflation) 04/11 EUR 1,050, ,091, % O. A. T. (inflation) 04/15 EUR 945, , % O. A. T. (inflation) 04/20 EUR 960, ,075, % O. A. T. (inflation) 03/13 EUR 1,420, ,577, % O. A. T. (inflation) 01/12 EUR 1,485, ,744, % O. A. T. (inflation) 98/09 EUR 1,865, ,163, ,15% O.A.T. (inflation) 02/32 EUR 1,035, ,417, % O. A. T. (inflation) 99/29 EUR 635, , ,132, GERMANY 1,50% GERMANY (Inflation) 06/16 EUR 560, , , GREECE 2,90% GREECE (inflation) 02/25 EUR 740, , , ITALY 0,95% ITALY (inflation) 04/10 EUR 1,480, ,499, ,65% ITALY (inflation) 03/08 EUR 1,355, ,445, ,10% ITALY (inflation) 06/17 EUR 1,020, ,043, ,15% ITALY (inflation) 04/14 EUR 1,485, ,607, ,35% ITALY (inflation) 04/35 EUR 1,400, ,534, ,130, JAPAN 0,5% JAPAN (Inflation) 04/14 JPY 256, ,565, ,565, TOTAL INVESTMENTS 22,279, CASH AT BANKS 647, OTHER NET LIABILITIES -1,416, TOTAL NET ASSETS 21,509,

187 Pictet Funds (LUX) - EUR Inflation Linked Bonds GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) France Italy Japan 7.28 Greece 4.18 Germany Industrial classification (in % of net assets) Bonds issued by countries or cities

188 Pictet Funds (LUX) - EUR Asset Backed Securities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES BELGIUM FRN DIAMOND MORTG.FIN A 06/33 EUR 1,000, ,000, ,000, FRANCE FRN FCC NACREA A 06/24 EUR 1,000, ,000, FRN PPCRE C 06/14 EUR 500, , ,500, IRELAND FRN CRSM 11 BA 06/48 EUR 600, , FRN DECO 9-E3X A1 06/17 EUR 1,100, ,098, FRN FRENCH.RES.S.06-1 D 06/43 EUR 400, , FRN GRND 1 A 06/16 EUR 440, , FRN GRND 1 C 06/16 EUR 660, , FRN MAGELLAN MTGS 4 06/59 EUR 1,100, ,073, FRN PROMISE 06-1 B 06/12 EUR 600, , FRN TAURUS B 06/15 EUR 600, , ,462, LUXEMBOURG FRN EUROPE EMC A S.4 06/13 EUR 1,100, ,097, ,097, NETHERLANDS FRN ARRAN C.LOAN S A2-1X 06/25 EUR 1,200, ,200, FRN BELUGA MAS. C /99 EUR 600, , ,801, SPAIN FRN BBVAC A 06/20 EUR 1,000, ,000, FRN BBVAP 5-B 06/39 EUR 400, , FRN IV AYTPI 05/37 EUR 1,093, ,094, FRN IV SHIPO A2 06/48 EUR 1,059, ,059, FRN SANTM 2 A2 06/50 EUR 1,000, ,000, FRN TDCAM -3- S.A2 06/40 EUR 1,100, ,100, ,654, SWITZERLAND FRN MARS B 06/14 EUR 600, , , UNITED KINGDOM 0% GRACECHURCH MTGE FD 05/41 EUR 660, , FRN AIRE VALL. CL.2A1 06/66 EUR 1,100, ,100, FRN EURO.LOAN A -S- 06/19 EUR 1,100, ,098, FRN GRACECHURCH 06-1 C3 06/56 EUR 600, , FRN GRANITE MASTER /54 EUR 440, , FRN GRANITE MASTER CLC3 06/54 EUR 440, ,

189 Pictet Funds (LUX) - EUR Asset Backed Securities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Currency Nominal value Market value (note 2) % of net assets FRN PARAGON MTGS N-13 06/39 EUR 300, , FRN PARAGON N12 B1B 06/38 EUR 450, , FRN PARAGON N12 C1B 06/38 EUR 650, , ,741, TOTAL I. 22,858, II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES UNITED KINGDOM FRN PERMANENT FIN. 9X-4C 06/42 EUR 200, , , TOTAL II. 200, TOTAL INVESTMENTS 23,058, CASH AT BANKS 494, OTHER NET LIABILITIES -895, TOTAL NET ASSETS 22,657,

190 Pictet Funds (LUX) - EUR Asset Backed Securities GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United Kingdom Spain Ireland Netherlands 7.94 France 6.62 Luxembourg 4.85 Belgium 4.42 Switzerland Industrial classification (in % of net assets) Corporate bonds

191 Pictet Funds (LUX) - Emerging Local Currency Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING BONDS BERMUDA 8,125% HOPSON DEVELOPMENT 05/12 USD 150, , , BRAZIL FRN BRAZIL 04/09 USD 1,000, ,138, ,138, COLOMBIA 11,75% COLOMBIA 04/10 COP 1,320,000, , % COLOMBIA 05/15 COP 4,384,000, ,328, ,965, CZECH REPUBLIC 3,80% CZECH REPUBLIC 05/15 CZK 33,000, ,580, ,2% CZECH REPUBLIC 06/36 CZK 11,700, , ,146, EGYPT 0% EGYPT 06/07 USD 5,700, , , GERMANY 8.75% CJSC RUSSIAN 04/07 USD 500, , , HUNGARY 6,75% HUNGARY D 02/13 HUF 110,000, , % HUNGARY 03/09 HUF 300, ,548, ,5% HUNGARY 04/20 HUF 330,000, ,877, ,992, KAZAKHSTAN 8.5% AFT BANK 04/07 USD 500, , , LUXEMBOURG FRN VNESHTORGBANK 05/07 USD 600, , FRN VTB CAPITAL 06/08 USD 2,000, ,004, ,605, MALAYSIA 5,20% PUTRAJAYA HOLDINGS 06/18 MYR 1,400, , , MEXICO 10% MEXICO 04/24 MXN 3,300, , % MEXICO 06/36 MXN 23,200, ,768, % MEXICO 04/08 MXN 23,000, ,152, % MEXICO 05/15 MXN 10,000, , % MEXICO 03/09 MXN 11,000, ,062, ,316, NETHERLANDS 8,5% ADARO FINANCE REG S 05/10 USD 150, , ,

192 Pictet Funds (LUX) - Emerging Local Currency Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets PAKISTAN 8,625% PAKISTAN MOBILE 06/13 USD 800, , , POLAND 5,25% POLAND 06/17 PLN 4,000, ,387, ,75% POLAND 01/22 PLN 6,500, ,330, % POLAND 99/09 PLN 2,000, , ,426, SOUTH AFRICA 10,5% SOUTH AFRICA 97/26 ZAR 10,000, ,874, ,50% SOUTH AFRICA S157 91/15 ZAR 17,000, ,272, ,146, TURKEY 0% TURKEY 06/08 TRY 15,000, ,785, % TURKEY 06/08 TRY 4,000, ,101, ,886, VENEZUELA FRN VENEZUELA 04/11 USD 900, , , TOTAL I. 44,060, II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES MALAYSIA 5,01% CAGAMAS MBS. 05/17 MYR 3,000, , , TOTAL MORTGAGE BACKED SECURITIES 888, BONDS MALAYSIA 5,30% OPTIMAL CHEMICALS 04/11 MYR 1,700, , ,2% SABAH DEV.BANK 06/11 MYR 3,300, , ,503, NIGERIA 0% NIGERIA (CLN UBS JB) 06/07 USD 1,200, ,143, ,143, PHILIPPINES 5,875% NATIONAL POWER 06/16 PHP 20,000, , , TOTAL BONDS 3,055, TOTAL II. 3,943, TOTAL INVESTMENTS 48,004, CASH AT BANKS 17,718, OTHER NET ASSETS 1,435, TOTAL NET ASSETS 67,158,

193 Pictet Funds (LUX) - Emerging Local Currency Debt GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Turkey Mexico South Africa 7.67 Poland 6.59 Hungary 5.95 Colombia 4.42 Malaysia 4.18 Luxembourg 3.87 Czech Republic 3.19 Nigeria 1.70 Brazil 1.69 Egypt 1.44 Venezuela 1.33 Pakistan 1.25 Kazakhstan 0.75 Germany 0.75 Philippines 0.61 Netherlands 0.23 Bermuda Industrial classification (in % of net assets) Bonds issued by countries or cities Corporate bonds

194 Pictet Funds (LUX) - Asian Local Currency Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING MORTGAGE BACKED SECURITIES CAYMAN ISLANDS FRN KFM 6-A2A 06/38 USD 5,000, ,000, ,000, TOTAL MORTGAGE BACKED SECURITIES 5,000, BONDS BERMUDA 8,125% HOPSON DEVELOPMENT 05/12 USD 200, , , CAYMAN ISLANDS 5,12% LINK FINANCE CAYMAN 06/09 HKD 15,000, ,973, ,973, HONG KONG 4,83% HONG KONG 06/16 HKD 15,000, ,102, FRN DAH SING BANK 06/16 USD 3,000, ,017, FRN LIU CHONG HING 06/16 USD 1,000, ,005, ,125, INDIA 7,25% ICICI BANK 06/PE USD 200, , FRN STATE BK.OF INDIA 06/11 USD 2,000, ,001, ,208, MALAYSIA 5,20% PUTRAJAYA HOLDINGS 06/18 MYR 3,600, ,075, ,125% SOUTHERN BANK 04/14 USD 3,000, ,006, ,75% MALAISIE 99/09 USD 8,500, ,165, ,246, NETHERLANDS 8,25% SUN SAGE 04/09 USD 200, , ,5% ADARO FINANCE REG S 05/10 USD 300, , ,875% LIPPO KARAWACI FIN. 06/11 USD 200, , , PHILIPPINES 8,875% PHILIPPINES 98/08 USD 800, , , SINGAPORE 2,159% LAND TRANS.AUTH.SIN.03/13 SGD 2,000, ,209, ,18% PUBLIC UTILIT.BOARD 05/15 SGD 250, , ,20% HOUSING & DEV.BD S12 05/15 SGD 3,250, ,085, ,3% SMRT CORP 06/09 SGD 1,500, , ,375% HOUSING & DEV. 05/15 SGD 2,000, ,297, ,84% SP POWERASSETS 03/18 SGD 500, , ,91% PSA CORP. SGD 5,000, ,418, ,375% CHARTERED SEMICON. 05/15 USD 500, , ,75% STATS CHIPPAC SR 05/11 USD 200, ,

195 Pictet Funds (LUX) - Asian Local Currency Debt STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Currency Nominal value Market value (note 2) % of net assets FRN STAR TOPAZ 1A 06/13 SGD 10,000, ,523, FRN UNIT. OVERSEAS BANK 01/16 SGD 1,250, , ,603, SOUTH KOREA 7% HANAROTELECOM S 05/12 USD 300, , FRN EXP-IMP BK.KOREA 06/11 USD 3,000, ,998, FRN KOREA DEV.BANK 06/11 USD 3,000, ,997, FRN KOREA NATIONAL 06/11 USD 3,000, ,003, FRN WOORI BANK 06/11 USD 3,000, ,004, ,306, UNITED KINGDOM 6,375% ICICI BK UK 06/PE USD 1,500, ,468, ,468, TOTAL BONDS 56,682, TOTAL I. 61,682, II. OTHER TRANSFERABLE SECURITIES MORTGAGE BACKED SECURITIES MALAYSIA 5,01% CAGAMAS MBS. 05/17 MYR 2,000, , , TOTAL MORTGAGE BACKED SECURITIES 592, BONDS HONG KONG 3,80% HONG KONG MTG. 05/11 HKD 6,000, , ,91% HONG KONG MTG. 06/10 HKD 3,500, , ,91% HONG KONG MTG. 06/11 HKD 6,000, , ,010, MALAYSIA 0% BANK NEGARA M /07 MYR 1,500, , % BANK NEGARA MALAY. 06/07 MYR 2,000, , ,30% OPTIMAL CHEMICALS 04/11 MYR 3,300, , ,2% SABAH DEV.BANK 06/11 MYR 2,700, , FRN PUBLIC BANK BERHAD 06/36 MYR 5,000, ,456, ,236, PHILIPPINES 5,875% NATIONAL POWER 06/16 PHP 30,000, , , TOTAL BONDS 6,859, TOTAL II. 7,451, TOTAL INVESTMENTS 69,134, CASH AT BANKS 23,304, OTHER NET ASSETS 2,797, TOTAL NET ASSETS 95,236,

196 Pictet Funds (LUX) - Asian Local Currency Debt GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Malaysia Singapore South Korea Hong Kong 8.55 Cayman Islands 7.31 India 2.32 United Kingdom 1.54 Philippines 1.52 Netherlands 0.75 Bermuda Industrial classification (in % of net assets) Corporate bonds Bonds issued by countries or cities

197 Pictet Funds (LUX) - European Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA RAIFFEISEN INT. BANK-HOLDING 221, ,588, ,588, BELGIUM GROUPE DELHAIZE 310, ,658, ,658, CZECH REPUBLIC CESKE ENERGETICKE ZAVODY 563, ,385, ,385, FRANCE BULL (NEW) 1,821, ,199, PERNOD-RICARD 106, ,485, SANOFI AVENTIS 473, ,349, TOTAL SA 939, ,398, VALLOUREC USINES A TUBES 71, ,844, VEOLIA ENVIRONNEMENT 478, ,640, VINCI 284, ,447, ,364, GERMANY ALLIANZ NOM. 245, ,225, B. M. W. 749, ,732, BAYER (EUR) 727, ,728, CONTINENTAL GUMMIWERKE 349, ,730, DEUTSCHE POST AG-REG 957, ,962, FRESENIUS MEDICAL CARE 290, ,468, HENKEL PREF. N-VTG 236, ,317, HYPO REAL ESTATE 743, ,495, PORSCHE PREF. 23, ,997, WINCOR NIXDORF 136, ,914, ,573, GREECE HELLENIC TELECOMM. ORGANIZATIONS 1,482, ,746, NATIONAL BANK OF GREECE 1,356, ,590, OPAP 536, ,812, ,149, HUNGARY MOL MAGYAR GDR (R.1 SHS) 266, ,574, ,574, IRELAND ALLIED IRISH BANKS 1,426, ,607, KINGSPAN GROUP (EUR) 1,232, ,773, ,380, ITALY ASTALDI 1,382, ,785, FONDIARIA SAI SPA 886, ,872,

198 Pictet Funds (LUX) - European Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets MEDIASET 3,444, ,085, UNICREDITO ITALIANO SPA 6,789, ,354, ,098, NETHERLANDS AXALTO 937, ,782, NUMICO KONINKLIJKE NV 464, ,820, ,602, NORWAY PAN FISH 34,552, ,886, STATOIL 1,582, ,710, TELENOR 2,514, ,210, ,806, RUSSIA UES (UTD ENERG. SYS.) GDR (R.100 SHS) 337, ,366, ,366, SPAIN BANCO POPULAR ESPANOL 1,257, ,199, DERMOESTETICA 806, ,166, FOMENTO CONSTRUCCIONES CONTRATAS 225, ,464, TELEFONICA S.A. 3,152, ,937, ,769, SWEDEN ENIRO 2,133, ,237, MODERN TIMES GROUP B 637, ,300, ,537, SWITZERLAND JULIUS BAER HOLDING 371, ,135, ZURICH FINANCIAL SERVICE-REG (CHF) 135, ,796, ,932, TURKEY TOFAS TURK OTOMOBIL FABRIKASI 5,489, ,256, TURKCELL ILETISIM 5,326, ,378, TURKIYE IS BANKASI C 7,311, ,805, ,439, UNITED KINGDOM BAE SYSTEMS 5,064, ,206, BP 3,065, ,125, CARNIVAL 672, ,927, GLAXOSMITHKLINE PLC 2,033, ,637, ICAP 4,236, ,135, LAIRD GROUP 3,830, ,577, MITTAL STEEL A 560, ,077, OLD MUTUAL (ZAR) 12,530, ,557, PRUDENTIAL 2,074, ,635, ROYAL BANK OF SCOTLAND GROUP 1,153, ,324, ROYAL DUTCH SHELL A 1,131, ,286, ROYAL DUTCH SHELL PLC-B SHS 45, ,216, SOCO INTERNATIONAL 348, ,326, STANDARD CHARTERED (GBP) 1,057, ,520, TULLOW OIL 3,545, ,933,

199 Pictet Funds (LUX) - European Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets WHITBREAD 1,566, ,006, WOLSELEY 1,269, ,334, ,828, TOTAL I. 1,667,056, II. OTHER TRANSFERABLE SECURITIES SHARES GERMANY AIST MEDIALAB 10, UNITED KINGDOM ALUDEL NOM. 142, TOTAL SHARES RIGHTS UNITED KINGDOM WHITBREAD RTS ,566, , , TOTAL RIGHTS 189, WARRANTS UNITED KINGDOM ALUDEL WRT (C-0.68) 285, TOTAL WARRANTS TOTAL II. 189, TOTAL INVESTMENTS 1,667,245, CASH AT BANKS 45,180, OTHER NET LIABILITIES -3,553, TOTAL NET ASSETS 1,708,872,

200 Pictet Funds (LUX) - European Equity Selection GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United Kingdom Germany France Italy 6.32 Greece 5.67 Spain 5.42 Norway 5.38 Turkey 3.53 Switzerland 3.45 Ireland 3.36 Sweden 3.07 Netherlands 2.14 Russia 1.60 Austria 1.50 Hungary 1.32 Belgium 1.15 Czech Republic Industrial classification (in % of net assets) Banks and credit institutions Oil Communications 9.78 Holding and financial companies 7.38 Pharmaceuticals and cosmetics 6.05 Insurance 4.91 Gastronomy 4.74 Construction and building materials 4.54 Electronics and electrical equipment 4.09 Road vehicles 4.04 Construction of machines and appliances 3.68 Chemicals 3.28 Utilities 2.73 Aeronautics and astronautics 1.88 Tyres and rubber 1.80 Environmental conservation and waste management 1.50 Agriculture and fishing 1.40 Transport and freight 1.29 Publishing and graphic arts 1.24 Retail and supermarkets 1.15 Food and soft drinks 1.10 Tobacco and alcohol 1.08 Mining and steelworks 1.06 Computer and office equipment 0.66 Public healthcare and social services 0.42 Warrants

201 Pictet Funds (LUX) - Small Cap Europe STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA ANDRITZ 23, ,860, BOEHLER-UDDEHOLM 41, ,211, CONWERT IMMOBILIEN INVEST 157, ,586, SEMPERIT HOLDING 26, , ZUMTOBEL 130, ,145, ,537, BELGIUM BEKAERT 30, ,916, METRIS 54, , OMEGA PHARMA 40, ,334, ORIFLAME COSMETICS 108, ,324, ,264, BERMUDA LANCASHIRE HOLDINGS (GBP) 606, ,108, TANZANITE ONE 1,232, ,423, ,532, DENMARK BANG & OLUFSEN B 29, ,847, TRYGVESTA 38, ,196, ,043, FINLAND KONE B 75, ,223, METSO 80, ,090, RAMIRENT 73, ,362, ,675, FRANCE BACOU-DALLOZ 20, ,123, BIOMERIEUX 54, ,818, CEGEDIM 10, , CIE GENERALE DE GEOPHYSIQUE 12, ,060, IPSEN 62, ,232, NEOPOST 24, ,297, SECHE ENVIRONNEMENT 20, ,789, SECHILIENNE-SIDEC 72, ,949, SR TELEPERFORMANCE 86, ,540, VETOQUINOL 84, ,909, ,387, GERMANY AWD HOLDING 98, ,153, D+S EUROPE 374, ,174, ELEXIS 164, ,401, ESCADA 112, ,346, GEA GROUP 185, ,144, IVG HOLDING 59, ,937, JUNGHEINRICH PFD. 152, ,505, PFEIFFER VACUUM TECHNOLOGY 30, ,948,

202 Pictet Funds (LUX) - Small Cap Europe STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets PREMIERE 208, ,640, RATIONAL 14, ,014, RHEINMETALL 54, ,117, WINCOR NIXDORF 23, ,681, WIRECARD 418, ,299, ,366, GREECE FOLI FOLLIE NOM. 101, ,033, GREEK POSTAL SAVINGS BANK 146, ,623, INTRALOT 77, ,980, ,637, IRELAND FBD HOLDINGS 75, ,112, KENMARE RESOURCES (GBP) 3,705, ,458, KINGSPAN GROUP (EUR) 176, ,537, ,108, ITALY ASSICURAZIONI MILANO 305, ,889, AZIMUT HOLDING 267, ,669, BENI STABILI 2,107, ,530, CREDITO EMILIANO (CREDEM) 105, ,141, HERA 952, ,121, INDUSTRIA MACCHINE AUTOMATICHE 175, ,963, SAES GETTERS 65, ,905, SEAT PAGINE GIALLE (NEW) 5,140, ,331, SNAI 228, ,466, VALENTINO FASHION GROUP 96, ,994, ,013, NETHERLANDS BALLAST NEDAM 61, ,039, BOSKALIS WESTMINSTER 27, ,033, FUGRO CRT 54, ,964, NUTRECO HOLDING 57, ,850, UNIT 4 AGRESSO 168, ,001, ,889, NORWAY ACTA HOLDING 568, ,283, AKER YARDS AS 45, ,653, HAFSLUND B 240, ,376, STEPSTONE A 2,045, ,596, ,910, PORTUGAL PORTUCEL 1,176, ,800, ,800, SPAIN ADOLFO DOMINGUEZ 36, ,706, BANCO PASTOR (NEW) 172, ,576, GENERAL DE ALQUILER DE MAQUINARIA 198, ,881, GRUPO EMPRESARIAL ENCE 50, ,111, INDRA SISTEMAS 162, ,033,

203 Pictet Funds (LUX) - Small Cap Europe STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets LA SEDA DE BARCELONA 1,142, ,855, SOL MELIA 195, ,927, ,092, SWEDEN BERGMAN & BEVING B 124, ,585, CARNEGIE INVESTMENT 144, ,310, HEXAGON B 112, ,549, KUNGSLEDEN 247, ,953, SAAB B 135, ,204, ,603, SWITZERLAND BARRY CALLEBAUT 8, ,059, CIBA SPECIALITES CHIM. HOLD. NOM. 55, ,822, GEBERIT NOM. 3, ,165, LOGITECH INTERNATIONAL 157, ,422, PANALPINA WELTTRANSPORT (HOLDING) 22, ,262, PARTNERS GROUP HOLDING NOM. 23, ,121, PETROPLUS HOLDINGS 23, ,066, TEMENOS GROUP NOM. 159, ,080, VALORA HOLDING NOM. 9, ,997, ,997, UNITED KINGDOM BODYCOTE INTERNATIONAL 564, ,934, BURREN ENERGY 205, ,668, CHARTER 135, ,801, CSR 220, ,168, EUROPEAN NICKEL 3,000, ,013, FORTH PORTS 115, ,753, GLOBAL ENERGY DEVELOPMENT 1,300, ,393, HUNTING 374, ,318, INVISTA REAL ESTATE INVESTMENT M. 1,573, ,768, LAIRD GROUP 377, ,320, MILLENNIUM & COPTHORNE HOTELS 309, ,782, RANK GROUP 409, ,440, REGUS GROUP PLC 1,274, ,350, SCI ENTERTAINMENT 430, ,084, SHAFTESBURY 330, ,793, SIG 217, ,457, ST JAMES S PLACE 450, ,873, T&F INFORMA 286, ,505, ,429, UNITED STATES SOLAR INTEGRATED REG. S 2,167, ,260, ,260, TOTAL I. 270,550,

204 Pictet Funds (LUX) - Small Cap Europe STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES UNITED KINGDOM HOMEBUY GROUP A 516, TOTAL II TOTAL INVESTMENTS 270,550, CASH AT BANKS 3,083, OTHER NET LIABILITIES -1,296, TOTAL NET ASSETS 272,337,

205 Pictet Funds (LUX) - Small Cap Europe GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United Kingdom Germany Switzerland 8.45 France 8.21 Italy 8.09 Spain 6.65 Sweden 5.36 Austria 4.61 Netherlands 4.37 Norway 4.37 Finland 3.54 Belgium 3.40 Ireland 3.34 Greece 2.80 Denmark 1.86 Bermuda 1.66 Portugal 1.03 United States Industrial classification (in % of net assets) Construction of machines and appliances Electronics and electrical equipment 8.93 Holding and financial companies 8.69 Miscellaneous services 6.03 Construction and building materials 5.30 Insurance 4.84 Real estate 4.35 Publishing and graphic arts 4.07 Pharmaceuticals and cosmetics 3.93 Textiles and clothing 3.74 Internet, software and IT services 3.47 Transport and freight 3.43 Gastronomy 3.36 Paper and forest products 3.23 Stainless steel 2.96 Oil 2.77 Utilities 2.39 Banks and credit institutions 2.33 Chemicals 2.09 Food and soft drinks 2.05 Retail and supermarkets 1.84 Computer and office equipment 1.26 Communications 1.21 Agriculture and fishing 1.05 Environmental conservation and waste management 1.02 Options 0.97 Miscellaneous trade 0.95 Mining and steelworks 0.88 Conglomerates 0.53 Precious metals and stones 0.52 Tyres and rubber

206 Pictet Funds (LUX) - Emerging Markets STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BERMUDA CNPC (HONG KONG) 29,794, ,480, ,480, BRAZIL ALL AMERICA LATINA LOGIS. 4 PREF. 1SH 1,630, ,923, BANCO DO BRASIL 492, ,748, BANCO NOSSA CAIXA 243, ,475, BRADESPAR PREF. 378, ,919, CEMIG MINAS GERAIS PREF. (LOT 1000) 259,336, ,749, CIA SANEAMENTO MINAS 1,205, ,145, DURATEX PFD 898, ,963, EQUATORIAL ENERGIA (2PFD SHS+1SH) 2,279, ,123, ITAUSA INVESTIMENTOS ITAU PREF LOJAS RENNER 1,166, ,770, OBRASCON HUARTE LAIN BRASIL 832, ,412, PETROLEO BRASILEIRO S.A. -ADR 1,257, ,271, SANTOS BRASIL (4 SHS PFD+1SH)UNIT 231, ,922, SUBMARINO 514, ,874, TIM PARTICI. ADR (R PREF.) 501, ,331, UNIBANCO BRASIL. GDR (500 UNITS) 305, ,880, VALE DO RIO DOCE PREF. A 2,988, ,705, ,215, CAYMAN ISLANDS FOXCONN INTERNATIONAL 2,255, ,382, ,382, CHILE ENERSIS 57,033, ,101, ,101, CHINA CHINA COMMUNICATION CONST. H 14,822, ,662, CHINA CONSTRUCTION BANK H 119,168, ,880, CHINA LIFE INSURANCE H 18,368, ,731, IND.& COMM.BANK OF CHINA H 24,322, ,111, PETROCHINA H 30,036, ,578, ,963, EGYPT COMMERCIAL INTERNATIONAL BANK 934, ,479, EGYPT LEBANON CERAM. GDR (R.1 SHS) 133, ,373, ORASCOM CONSTRUCTION INDUST. NOM. 206, ,947, ORASCOM TELECOM GDR 376, ,006, ,807, HONG KONG CHINA MOBILE HK 8,982, ,647, CHINA OVERSEAS LAND & INVESTMENT 23,193, ,147, CHINA RESOURCES ENTERPRISE 7,686, ,097, CHINA UNICOM 25,013, ,680,

207 Pictet Funds (LUX) - Emerging Markets STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets CNOOC 43,875, ,708, DENWAY MOTORS 25,306, ,254, ,535, INDIA BHARAT HEAVY ELECTRICALS DEMAT. 308, ,037, HOUSING DEV. FINANCE DEMAT , ICICI BANK DEMAT. 135, ,727, INFOSYS TECHNOLOGIES DEMAT. 638, ,358, OIL & NATURAL GAS DEMAT. 272, ,373, SATYAM COMPUTER SERVICES DEMAT. 1,607, ,552, STATE BANK OF INDIA DEMAT. 1,019, ,696, STERLITE OPTICAL TECH. DEMAT , TATA MOTORS DEMAT. 1,086, ,913, ,664, INDONESIA BANK CENTRAL ASIA 18,788, ,886, BANK RAKYAT INDONESIA 30,695, ,615, PT ASTRA INTERNATIONAL 11,728, ,518, PT INDONESIAN SATELLITE 30,533, ,965, TELKOM INDONESIA ADR (R.20 SHS) 643, ,202, ,188, ISRAEL BANK HAPOALIM (LOT 100) 4,680, ,038, BANK LEUMI LE-ISRAEL 4,950, ,150, CLAL INSURANCE ENTERPRISES HOLD 525, ,043, ISRAEL DISCOUNT BANK A 6,300, ,023, MAKHTESHIM AGAN INDUSTRIES 1,980, ,235, TEVA PHARMACEUTICAL ADR 1,507, ,061, UNITED MIZRAHI BANK 1,080, ,121, ,674, MALAYSIA COMMERCE ASSET-HOLDING 8,248, ,121, GENTING BERHAD 1,345, ,586, RHB CAPITAL 12,217, ,845, TELEKOM MALAYSIA 4,433, ,253, TENAGA NASIONAL 5,951, ,388, ,196, MEXICO AMERICA MOVIL ADR (R.20 SHS L ) 1,753, ,540, COCA COLA FEMSA ADR (R. 10 SH L ) 158, ,932, CONSORCIO ARA 2,402, ,060, CORPORATION GEO B 5,283, ,410, GRUMA B 4,426, ,136, GRUPO TELEVISA GDR 928, ,087, ,169, NETHERLANDS EFES BREWERIES GDR (R.5 SHS) 150, ,048, EFES BREWERIES GDR SP. (S-TEMP.) 65, ,135, ,183,

208 Pictet Funds (LUX) - Emerging Markets STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets PAKISTAN OIL & GAS GDR (REP 1 SH) 695, ,428, ,428, PHILIPPINES AYALA LAND 70,777, ,025, BANK OF PHILIPPINE ISLANDS 8,550, ,078, GLOBE TELECOM 364, ,197, PHILIPPINE LONG DIST. TEL. ADR 655, ,548, ,850, RUSSIA AFK SISTEMA GDR (R.1 SHS) 402, ,094, LUKOIL HOLDING ADR (R.4 SHS) 657, ,984, MMC NORILSK NICKEL ADR (R.1 SHS) 163, ,033, MOBILE TELESYS ADR (R.20 SHS) 483, ,366, SEVERSTAL GDR (REP. 1 SH) 944, ,449, SIBIRTELECOM (USD) 138,959, ,632, UES (UTD ENERG. SYS.) GDR (R.100 SHS) 281, ,030, VIMPEL COMMUNICAT. ADR (R.1/4 SHS) 197, ,830, VOLGATELECOM (USD) 3,612, ,675, ,098, SOUTH AFRICA ANGLO AMERICAN PLATINUM NOM. 96, ,870, BARLOWORLD 1,151, ,931, EXXARO RESOURCES 455, ,607, GOLD FIELDS 703, ,391, HARMONY GOLD MINING 1,197, ,079, IMPALA PLATINIUM HOLDING (NEW) 748, ,616, KUMBA IRON ORE 455, ,280, MURRAY & ROBERT HOLDINGS (NEW) 2,027, ,594, NEDCOR 514, ,809, SANLAM 6,584, ,460, SAPPI 1,298, ,127, SASOL 733, ,092, SHOPRITE HOLDING (SHP) 1,848, ,850, TIGER BRANDS 719, ,582, ,295, SOUTH KOREA HANA FINANCIAL HOLDINGS 381, ,106, HANKOOK TIRE 1,167, ,869, HYUNDAI DEPARTMENT STORE 143, ,972, HYUNDAI MOTOR 111, ,093, KOOKMIN BANK 759, ,321, LG CORP 438, ,109, LG ELECTRONICS (NEW) 226, ,428, LG PHILIPS LCD 332, ,969, NHN 139, ,095, ORION 46, ,514, POSCO 62, ,970, SAMSUNG 303, ,036, SAMSUNG ELECTRONICS 186, ,988, SAMSUNG FIRE & MAR. INSUR. 148, ,866,

209 Pictet Funds (LUX) - Emerging Markets STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SAMSUNG HEAVY INDUSTRIES 607, ,600, SHINHAN FINANCIAL GROUP 637, ,603, SHINSEGAE 31, ,374, SK CORP 192, ,116, SK TELECOM 67, ,102, SK TELECOM ADR REPR.1/90 SH 281, ,473, ,613, TAIWAN ASUSTEK COMPUTER 9,758, ,725, AU OPTRONICS 15,003, ,868, CATCHER TECHNOLOGY 708, ,923, CATHAY FINANCIAL 14,950, ,968, CATHAY FINANCIAL GDR (R.10 SHS) 278, ,141, CHANG HWA COMMERCIAL BANK 20,527, ,338, CHINATRUST FINANCIAL HOLDINGS 28,109, ,519, CHUNGHWA TELECOM ADR (R.10 SHS) 1,083, ,826, COMPAL ELECTRONICS 14,594, ,017, DELTA ELECTRONICS 7,124, ,969, FAR EASTERN TEXTILE 17,539, ,348, FIRST FINANCIAL HLD 22,696, ,247, FORMOSA PETROCHEMICAL 6,749, ,837, FOXCONN TECHNOLOGY 1,945, ,332, FUBON FINANCIAL 11,548, ,814, HIGH TECH COMPUTER 1,083, ,464, HON HAI PRECISION INDUSTRY 9,168, ,452, INVENTEC 3,304, ,906, MEDIATEK , MEGA FINANCIAL HLDG 4,626, ,401, PRESIDENT ENTERPRISES 17,531, ,494, TAIWAN CEMENT 16,412, ,840, TAIWAN SEMICONDUCTOR 45,218, ,718, UNITED MICROELECTRONICS 31,036, ,297, WISTRON CORP 10,346, ,375, YUANTA SECURITIES 17,713, ,712, ,549, THAILAND BANGKOK BANK PUBLIC CO FGN NOM. 6,981, ,275, BANK OF AYUDHYA NOM. FGN 33,191, ,037, BANPU PUBLIC NVDR 1,286, ,498, KASIKORNBANK PUB. FGN NOM. 14,043, ,354, KASIKORNBANK PUBLIC CO NVDR 7,312, ,478, THANACHART CAPITAL FGN 7,357, ,837, ,482, TURKEY MIGROS TURKEY 1,128, ,028, PETKIM PETROKIMYA HOLDING 2,137, ,800, TOFAS TURK OTOMOBIL FABRIKASI 8,847, ,214, TUPRAS TURKIY PETROL RAFINERILERI 560, ,844, TURK SISE CAM 4,430, ,695, TURKCELL ILETISIM 2,225, ,195, ,779,

210 Pictet Funds (LUX) - Emerging Markets STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets UNITED KINGDOM OLD MUTUAL (ZAR) 72, , OLD MUTUAL (ZAR) 4,293, ,691, ,939, UNITED STATES MECHEL STEEL GROUP ADR. 666, ,679, SOHU.COM 705, ,718, ,397, TOTAL SHARES 3,288,999, UNITS OF INVESTMENT FUNDS CAYMAN ISLANDS VIETNAM ENTERPRISE INVEST. C NEW 7,600, ,740, VIETNAM ENTERPRISE INVESTMENTS 2,120, ,165, VIETNAM GROWTH FUND 299, ,212, ,117, TOTAL UNITS OF INVESTMENT FUNDS 23,117, TOTAL I. 3,312,116, II. OTHER TRANSFERABLE SECURITIES SHARES ARGENTINA GENERAL FABRIL B 910,000, RUSSIA GAZPROM LOCAL (USD) 9,258, ,470, NORTH WEST TELECOM (USD) 9,147, ,499, ,970, SOUTH KOREA MACQUARIE KOREA INFRASTRUCT. GDR 1,078, ,816, ,816, TOTAL SHARES 128,786, RIGHTS THAILAND TRUE CORP FGN RTS , TOTAL RIGHTS TOTAL II. 128,786, TOTAL INVESTMENTS 3,440,903, BANK OVERDRAFT -7,953, OTHER NET LIABILITIES -8,214, TOTAL NET ASSETS 3,424,736,

211 Pictet Funds (LUX) - Emerging Markets GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Taiwan South Korea Brazil Russia 9.78 Hong Kong 6.42 South Africa 6.27 China 6.16 Mexico 4.90 Israel 3.96 India 3.64 Indonesia 2.95 Turkey 2.63 Thailand 2.49 Philippines 2.18 Malaysia 2.15 Egypt 1.34 United States 0.98 Cayman Islands 0.90 Chile 0.53 Bermuda 0.48 United Kingdom 0.44 Pakistan 0.39 Netherlands 0.21 Argentina Industrial classification (in % of net assets) Communications Banks and credit institutions Electronics and electrical equipment Oil Holding and financial companies 7.46 Utilities 3.53 Real estate 3.44 Stainless steel 3.34 Insurance 3.10 Computer and office equipment 2.74 Retail and supermarkets 2.57 Mining and steelworks 2.28 Road vehicles 2.06 Food and soft drinks 2.05 Pharmaceuticals and cosmetics 1.78 Construction and building materials 1.57 Precious metals and stones 1.48 Transport and freight 1.01 Internet, software and IT services 0.99 Units of investment funds 0.68 Miscellaneous services 0.67 Paper and forest products 0.65 Tyres and rubber 0.58 Chemicals 0.56 Miscellaneous consumer goods 0.50 Textiles and clothing 0.45 Construction of machines and appliances 0.43 Gastronomy 0.37 Miscellaneous trade 0.29 Tobacco and alcohol

212 Pictet Funds (LUX) - Eastern Europe STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES CZECH REPUBLIC CESKE ENERGETICKE ZAVODY 940, ,338, ,338, HUNGARY GEDEON RICHTER GDR (R.1 SHS) 88, ,503, MOL MAGYAR GDR (R.1 SHS) 100, ,464, MOL MAGYAR OLAY A 500, ,442, OTP BANK GDR (R.2 SHS) 705, ,569, ,979, KAZAKHSTAN HALYK BANK GDR 184, ,030, KAZKOMMERTSBANK GDR (R.1 S.OCT.06) 324, ,657, ,688, NETHERLANDS ZENTIVA 261, ,014, ,014, POLAND BANK PEKAO 300, ,747, KGHM GDR (R.2 SHS) 352, ,753, POLISH TELECOM GDR (R.1 NOM. A ) 7,543, ,342, POLSKI KONCERN GDR (R. WI SHS) 982, ,692, ,536, RUSSIA AFK SISTEMA GDR (R.1 SHS) 2,000, ,454, GAZPROM ADR (R.10 SHS) 884, ,124, GAZPROM NEFT (EUR) 600, ,431, LUKOIL HOLDING ADR (R.4 SHS) 1,464, ,611, MMC NORILSK NICKEL ADR (R.1 SHS) 433, ,549, MOBILE TELESYS ADR (R.20 SHS) 1,383, ,036, MOSCOW CITY TEL. ADR (R.1/10 SHS) 170, ,063, MOSCOW CITY TEL. ADR (R.1/10 SHS) 29, , NOVATEK -GDR SPONS. - REG. S 118, ,676, ROSTELECOM ADR (R.6 SHS) 215, ,497, SBERBANK (USD) 22, ,592, SIBIRTELECOM (USD) 74,000, ,333, SURGUTNEFTEGAZ ADR (R.100 PREF. SHS) 327, ,305, SURGUTNEFTEGAZ ADR (R.50 SHS) 795, ,762, TMK SPONS.GDR 40, ,055, UES (UTD ENERG. SYS.) GDR (R.100 SHS) 1,213, ,529, URALSVYAZINFORM (USD) URALSVYAZINFORM ADR (R.200 SHS) EUR 321, ,169, VIMPEL COMMUNICAT. ADR (R.1/4 SHS) 880, ,785, VOLGATELECOM ADR (R.2 ORD) (EUR) 649, ,587, ,102, SWITZERLAND KAZAKHGOLD GDR 339, ,223, ,223,

213 Pictet Funds (LUX) - Eastern Europe STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets TURKEY AKCANSA CIMENTO SANAYI VE TICARET 1,400, ,336, AKSIGORTA 1,900, ,426, ANADOLU CAM SANAYII 800, ,392, ASYA KATILIM BANKASI B 4,800, ,095, DOGAN SIRKELTER GRUBU HOLDINGS 4,080, ,902, DOGAN YAYIN HOLDING 969, ,581, ENKA INSAAT 1,400, ,164, HACI OMER SABANCI HOLDING 3,000, ,213, HURRIYET GAZETE 1,690, ,479, IS FINANCIAL KIRALAMA 800, ,120, IS GAYRIMENKUL YATIRIM ORTAKLIGI 900, ,396, IZMIR DEMIR CELIK 3,000, ,881, KOC HOLDING 4,004, ,082, PINAR SUT MAMULLERI SANAYII 2,896, ,898, TUPRAS TURKIY PETROL RAFINERILERI 786, ,503, TURKCELL ILETISIM 5,215, ,951, TURKIYE GARANTI BANKASI NOM. 12,000, ,907, TURKIYE IS BANKASI C 9,000, ,764, UELKER GIDA SANAYI VE TICARET 2,424, ,989, ,088, UNITED STATES MECHEL STEEL GROUP ADR. 539, ,257, ,257, TOTAL I. 1,087,229, II. OTHER TRANSFERABLE SECURITIESRES SHARES KAZAKHSTAN KAZMUNAIGAS -GDR SPONS.-REG.S 422, ,456, ,456, RUSSIA AEROFLOT (USD) 700, ,163, CENTRAL TELECOMMUNICATIONS (USD) 9,300, ,351, GAZPROM LOCAL (USD) 3,600, ,498, LEBEDYANSKY EXPERIMENTAL CANNERY 53, ,282, METAFRAKS (USD) 1,700, ,435, OPEN INVESTMENTS OAO (USD) 204, ,279, POLYUS GOLD ADR (REPR. 1 SHS) 459, ,060, RAZGULAY GROUP 205, , WIMM-BILL-DANN FOODS 83, ,303, ,987, SLOVAKIA CHIRANA PREMA 21, TOTAL SHARES 105,443,

214 Pictet Funds (LUX) - Eastern Europe STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets UNITS OF INVESTMENT FUNDS BRISTISH VIRGIN ISLANDS EQUEST INVESTMENTS BULGARIA 200, ,558, ,558, TOTAL UNITS OF INVESTMENT FUNDS 3,558, TOTAL II. 109,002, TOTAL INVESTMENTS 1,196,231, CASH AT BANKS 18,257, OTHER NET LIABILITIES -4,000, TOTAL NET ASSETS 1,210,488,

215 Pictet Funds (LUX) - Eastern Europe GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Russia Turkey Hungary 9.50 Poland 8.64 Czech Republic 2.67 Kazakhstan 1.34 Netherlands 0.99 United States 0.85 Switzerland 0.43 British Virgin Islands 0.29 Slovakia Industrial classification (in % of net assets) Oil Communications Banks and credit institutions Utilities Stainless steel 5.72 Holding and financial companies 5.68 Pharmaceuticals and cosmetics 2.27 Precious metals and stones 1.84 Mining and steelworks 1.83 Food and soft drinks 1.25 Conglomerates 0.92 Construction and building materials 0.72 Publishing and graphic arts 0.50 Insurance 0.45 Units of investment funds 0.29 Miscellaneous services 0.27 Chemicals 0.12 Transport and freight 0.10 Construction of machines and appliances 0.09 Miscellaneous trade

216 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA ANDRITZ , BOEHLER-UDDEHOLM 3, , BWIN 1, , ERSTE BANK DER OESTER. SPARKASSEN 13, , FLUGHAFEN WIEN , IMMOEAST IMMOBILIEN 19, , IMMOFINANZ IMMOBILIEN ANLAGEN 31, , MAYR-MELNHOF KARTON , OESTER. ELEKTR. WIRT. A 5, , OMV 11, , RAIFFEISEN INT. BANK-HOLDING 2, , RHI 1, , TELEKOM AUSTRIA 27, , VOEST-ALPINE 6, , WIENER STAEDTISCHE 2, , WIENERBERGER BAUSTOFFINDUSTRIE 5, , ,012, BELGIUM AGFA-GEVAERT 7, , BARCO (NEW) , BEKAERT , BELGACOM 11, , COFINIMMO , COLRUYT (ETBLISSEMENTS FR.) 1, , COMPAGNIE MARITIME BELGE 1, , DEXIA 41, , D IETEREN , EURONAV 1, , FORTIS 85, ,781, GBL (GROUPE BRUXELLES LAMBERT) 5, , GROUPE DELHAIZE 5, , INBEV 13, , KBC BANCASSURANCE HOLDING 13, ,242, MOBISTAR 2, , OMEGA PHARMA 1, , ORIFLAME COSMETICS 3, , SOLVAY 4, , U.C.B. 8, , UMICORE 1, , ,939, BERMUDA FRONTLINE 3, , , DENMARK A. P. MOELLER - MAERSK B , BANG & OLUFSEN B , CARLSBERG B 2, ,

217 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets CODAN A/S 1, , COLOPLAST B (NEW) 1, , DAMPSKIBSSELSKABET TORM 1, , DANISCO 3, , DANSKE BANK 35, ,190, DSV B 1, , EAST ASIATIC 1, , FLS INDUSTRIES B 3, , GN GREAT NORDIC 15, , H. LUNDBECK 3, , JYSKE BANK 4, , NKT HOLDING 1, , NOVO-NORDISK B 17, ,096, NOVOZYMES B 3, , SYDBANK A/S 4, , TOPDANMARK 1, , TRYGVESTA 2, , VESTAS WIND SYSTEMS NOM. 13, , WILLIAM DEMANT HOLDING 2, , ,762, FINLAND AMER GROUP A 4, , CARGOTEC B 2, , ELISA COMMUNICATIONS A 10, , FORTUM 32, , KCI KONECRANES INTERNATIONAL 3, , KESKO 5, , KONE B 5, , METSO 9, , NESTE OIL 8, , NOKIA OYJ 296, ,614, NOKIAN TYRES 6, , OKOBANK A 6, , ORION B (NEW) 5, , OUTOKUMPU A 6, , RAUTARUUKKI K 6, , SAMPO OYJ 30, , SANOMA-WSOY B 5, , STORA ENSO R 42, , TIETOENATOR 5, , UPM-KYMMENE 37, , UPONOR A 4, , WARTSILA B 4, , YIT-YHTYMAE 9, , ,095, FRANCE ACCOR 14, , AIR FRANCE - KLM 8, , AIR LIQUIDE 8, ,585, ALCATEL SA 167, ,831, ALSTOM NEW 7, , ATOS ORIGIN 5, ,

218 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets AUTOROUTE PARIS RHIN RHONE 1, , AXA 121, ,731, BIC 1, , BNP PARIBAS 60, ,035, BOUYGUES 14, , BUSINESS OBJECTS 6, , CAP GEMINI 9, , CARREFOUR SA 43, ,996, CASINO GUICHARD PERRACHON 3, , CNP ASSURANCES 3, , CREDIT AGRICOLE 43, ,394, DANONE GROUPE (CHF) 17, ,968, DASSAULT SYSTEMES 4, , ESSILOR INTERNATIONAL 7, , FRANCE TELECOM SA 122, ,591, GAZ DE FRANCE 14, , GECINA , HERMES INTERNATIONAL 4, , IMERYS (EX-IMETAL) 2, , KLEPIERRE 1, , LAFARGE 10, ,222, LAGARDERE GROUPE NOM. 8, , L OREAL 20, ,572, LVMH 17, ,419, M6 METROPOLE TV 4, , MICHELIN B NOM. 10, , NEOPOST 2, , PAGES JAUNES 8, , PERNOD-RICARD 5, , PEUGEOT PORT. 11, , PPR 4, , PUBLICIS 10, , RENAULT SA 13, ,227, SAGEM PROV. ECHANGE 11, , SAINT GOBAIN 23, ,467, SANOFI AVENTIS 73, ,202, SCHNEIDER (EX-SPIE BATIGNOLES) 16, ,378, SCOR 72, , SOCIETE GENERALE 26, ,445, SODEXHO ALLIANCE 6, , SUEZ 73, ,817, TECHNIP-COFLEXIP 7, , TF1 -TELEVISION FRANCAISE 1-8, , THALES (EX-THOMSON CSF) 6, , THOMSON (EX-TMM) 19, , TOTAL SA 158, ,660, UNIBAIL 3, , VALEO 4, , VALLOUREC USINES A TUBES 2, , VEOLIA ENVIRONNEMENT 20, ,112,

219 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets VINCI 15, ,488, VIVENDI UNIVERSAL 84, ,492, ZODIAC 3, , ,582, GERMANY ADIDAS-SALOMON 14, , ALLIANZ NOM. 31, ,872, ALTANA INDUSTRIE-AKTIEN & ANLAGEN 5, , BASF 35, ,629, BAYER (EUR) 52, ,144, BEIERSDORF 3, , BILFINGER BERGER 2, , CELESIO 6, , COMMERZBANK 45, ,311, CONTINENTAL GUMMIWERKE 9, , DAIMLERCHRYSLER NOM. (EUR) 66, ,113, DEUTSCHE BANK NOM. 37, ,828, DEUTSCHE BOERSE NOM. 7, ,039, DEUTSCHE LUFTHANSA NOM. 16, , DEUTSCHE POST AG-REG 55, ,283, DEUTSCHE POSTBANK 5, , DEUTSCHE TELEKOM NOM. 205, ,845, DOUGLAS HOLDING 2, , E. ON AG 45, ,675, FRESENIUS MEDICAL CARE 4, , HEIDELBERGER DRUCKMASCHINEN 4, , HENKEL PREF. N-VTG 4, , HOCHTIEF 3, , HYPO REAL ESTATE 9, , INFINEON TECHNOLOGIES NOM. 54, , IVG HOLDING 6, , KARSTADTQUELLE AG 4, , LINDE 7, , MAN 9, , MERCK 3, , METRO AG 11, , MLP 4, , MUENCHENER RUECKVER AG-REG 14, ,961, PORSCHE PREF , PREMIERE 4, , PROSIEBEN SAT.1 MEDIA PREF. N-VTG 6, , PUMA , R. W. E. A 32, ,706, R. W. E. PREF. N-VTG 2, , RHEINMETALL 2, , SALZGITTER AG 3, , SAP (EUR) 64, ,577, SIEMENS NOM. 61, ,594, SOLARWORLD 2, , SUEDZUCKER 4, , THYSSENKRUPP 26, , TUI (NEW) 15, ,

220 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets VOLKSWAGEN (EUR) 12, ,057, VOLKSWAGEN PREF. 7, , WINCOR NIXDORF 1, , ,077, GIBRALTAR PARTYGAMING 72, , , GREECE ALPHA CREDIT BANK 26, , BANK OF PIRAEUS 15, , COCA COLA HELLENIC BOTTLING 8, , COSMOTE NOM. 7, , EFG EUROBANK 17, , FOLI FOLLIE NOM , HELLENIC EXCHANGE HOLDING NOM. 2, , HELLENIC PETROLEUM 7, , HELLENIC TECHNODOMIKI 8, , HELLENIC TELECOMM. ORGANIZATIONS 23, , INTRACOM NOM. 6, , MOTOR OIL (HELLAS) CORINTH REFINER. 3, , NATIONAL BANK OF GREECE 27, , OPAP 15, , PUBLIC POWER CORP OF GREECE NOM. 8, , TECHNICAL OLYMPIC 5, , TITAN CEMENT NOM. 4, , VIOHALCO 7, , ,538, IRELAND ALLIED IRISH BANKS 63, ,461, BANK OF IRELAND (GOV&CO) 70, ,224, C&C GROUP 22, , CRH (EUR) 39, ,248, DCC 5, , DEPFA BANK 26, , ELAN 32, , FYFFES 22, , GRAFTON GROUP UNITS 16, , GREENCORE GROUP 9, , IAWS GROUP 8, , INDEPENDENT NEWS & MEDIA 36, , IRISH LIFE & PERMANENT (EUR) 20, , KERRY GROUP A 9, , KINGSPAN GROUP (EUR) 9, , PADDY POWER 2, , RYANAIR HOLDINGS 13, , STANDARD LIFE 151, , ,301, ITALY ALLEANZA ASSICURAZIONI 29, , ASSICURATRICE UNIPOL PREF. 69, , ASSICURAZIONI GENERALI 69, ,319,

221 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets AUTOGRILL 7, , AUTOSTRADE 20, , BANCA INTESA 283, ,584, BANCA INTESA (AZ. DI RISP.) 67, , BANCA POPOLARE DI MILANO 29, , BANCA POPOLARE DI VERONA E NOVARA 27, , BANCHE POPOLARI UNITE 25, , BENETTON GROUP 4, , BULGARI 11, , CAPITALIA 121, , ENEL ENTE NAZION. ENERGIA ELETTR. 314, ,461, ENI 189, ,837, FIAT 40, , FINMECCANICA 21, , FONDIARIA-SAI 5, , GRUPPO EDITORIALE L ESPRESSO 12, , ITALCEMENTI 5, , LOTTOMATICA NEW. 4, , LUXOTTICA GROUP 10, , MEDIASET 57, , MEDIOBANCA 34, , MEDIOLANUM 18, , MONDADORI 7, , MONTE PASCHI SIENA 78, , PIRELLI & CIE 205, , SAN PAOLO-IMI 80, ,400, SEAT PAGINE GIALLE (NEW) 280, , SNAM RETE GAS 69, , T. E. R. N. A 84, , TELECOM ITALIA 773, ,778, TELECOM ITALIA-RNC 438, , TISCALI 16, , UNICREDITO ITALIANO SPA 567, ,791, ,274, JERSEY MEINL EURO LAND 16, , , LUXEMBOURG STOLT OFFSHORE 14, , STOLT-NIELSEN 2, , , NETHERLANDS ABN AMRO HOLDING 131, ,240, AEGON 105, ,520, AKZO NOBEL 19, , ASML HOLDING 35, , BUHRMANN 8, , CORIO 2, , EURONEXT (NEW) 6, , EUROPEAN AERONAUTIC DEFENCE SPACE 23, , FUGRO CRT 4, , GETRONICS 9, ,

222 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets HAGEMEYER 35, , HEINEKEN 17, , ING GROEP (CERT.) 136, ,606, KONINKLIJKE AHOLD NV 113, , KONINKLIJKE DSM (NEW) 11, , KPN KONINKLIJKE 140, ,515, NUMICO KONINKLIJKE NV 12, , OCE 6, , QIAGEN 11, , RANDSTAD HOLDING 3, , REED ELSEVIER 52, , RODAMCO EUROPE 3, , ROYAL PHILIPS (EUR) 84, ,409, SBM OFFSHORE 10, , STMICROELECTRONICS 49, , TNT NV 31, ,026, UNILEVER NEW (EUR) 123, ,576, VEDIOR 12, , WERELDHAVE 1, , WOLTERS KLUWER 21, , ,973, NORWAY AKER KVAERNER OGEP 1, , DNB HOLDING A 49, , DNO (DET NORSKE OLJESELSKAP) "A" 60, , NORSK HYDRO NOM. (NOK) 50, ,198, NORSKE SKOGINDUSTRIER A 12, , OCEAN RIG ASA 13, , ORKLA A 13, , PAN FISH 189, , PETROLEUM GEO SERVICES 12, , PROSAFE 14, , SCHIBSTED 3, , STATOIL 47, , STOREBRAND 16, , TANDBERG A 8, , TANDBERG TELEVISION 6, , TELENOR 54, , TGS-NOPEC GEOPHYSICAL 7, , TOMRA SYSTEMS (NOK) 13, , YARA INTERNATIONAL 14, , ,889, PANAMA CARNIVAL TWIN 3, , , PORTUGAL BANCO COMERCIAL PORTUGUES NOM. 157, , BANCO ESPIRITO SANTO NOM. 13, , BPI-SGPS NOM. 22, , BRISA AUTO-ESTRADAS-PRIV SHR 21, , CIMPOR (CIMENTOS PORTUGAL) NOM. 16, , EDP (ELECTRIC. DE PORTUGAL) NOM. 147, ,

223 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets JERONIMO MARTINS 2, , PORTUGAL TELECOM NOM. 57, , PT MULTIMEDIA 5, , SONAE INDUSTRIA SGPS 4, , SONAE SGPS 61, , ,422, SPAIN ABERTIS INFRAESTRUCTURAS 16, , ACCIONA 2, , ACERINOX SA 13, , ACS 17, , AGUAS DE BARCELONA 4, , AGUAS DE BARCELONA EM , ALTADIS A 18, , ANTENA 3 TELEVISION 6, , BANCO POPULAR ESPANOL 61, , BANCO SANTANDER CENTRAL HISPANO 431, ,093, BCO BILBAO VIZCAYA ARGENT. NOM. 257, ,700, CINTRA 14, , CORPORACION MAPFRE 38, , EBRO PULEVA 6, , ENDESA S.A. 53, ,906, FADESA INMOBILIARIA SA 3, , FOMENTO CONSTRUCCIONES CONTRATAS 3, , GAMESA CORP TECNOLOGICA SA 12, , GAS NATURAL SDG SA 13, , GRUPO FERROVIAL 4, , GRUPO PRISA 5, , IBERDROLA 55, ,845, IBERIA NOM. A 37, , INDITEX NOM. 16, , INDRA SISTEMAS 9, , NH HOTELES S.A. 5, , REPSOL YPF SA 61, ,633, SACYR VALLEHERMOSO SA 7, , SOGECABLE 2, , TELEFONICA S.A. 323, ,226, UNION FENOSA 7, , ZELTIA 10, , ,611, SWEDEN ALFA LAVAL 6, , ASSA ABLOY B 22, , ATLAS COPCO A -FRIA- 24, , ATLAS COPCO B 15, , AXFOOD 1, , BILLERUD 3, , BOLIDEN 20, , CARNEGIE INVESTMENT 4, , CASTELLUM 11, , ELECTROLUX B -FRIA- 18, , ELEKTA INSTRUMENT B -FRIA- 6, ,

224 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets ENIRO 12, , ERICSSON TELEFON B 1,070, ,285, FABEGE AB 5, , GETINGE INDUSTRIER B 12, , HENNES & MAURITZ B 34, ,293, HOEGANAES B 1, , HOLMEN B 3, , HUSQVARNA B 19, , KUNGSLEDEN 9, , LUNDIN PETROLEUM 16, , MODERN TIMES GROUP B 3, , NOBIA 3, , NORDEA HOLDING (SEK) 150, ,776, OMHEX 6, , SANDVIK 73, , SAS 5, , SCANIA B 7, , SECURITAS B 22, , SECURITAS DIRECT B 17, , SECURITAS SYSTEMS B 22, , SKANDINAVISKA ENSKILDA A 33, , SKANSKA AB B 27, , SKF B 29, , SSAB SWEDISH STEEL A 10, , SSAB SWEDISH STEEL B 5, , SVENSKA CELLULOSA B 13, , SVENSKA HANDELSBANKEN A 36, , SWEDISH MATCH 21, , TELE2 B 23, , TELELOGIC 16, , TELIASONERA 135, , TRELLEBORG B 5, , VOLVO A 6, , VOLVO B 15, , WIHLBORGS FASTIGHETER 2, , ,157, SWITZERLAND ABB LTD NOM. 149, ,013, ADECCO NOM. 9, , CIBA SPECIALITES CHIM. HOLD. NOM. 5, , CIE FINANCIERE RICHEMONT UNIT A 37, ,671, CLARIANT NOM. 16, , CS GROUP NOM. 83, ,416, GEBERIT NOM , GIVAUDAN NOM , HOLCIM NOM. 14, ,017, KUDELSKI 2, , KUEHNE & NAGEL INTERNATIONAL 3, , KUONI REISEN HOLDING NOM. B , LOGITECH INTERNATIONAL 12, , LONZA GROUP 2, , MICRONAS SEMICOND HOLDING NOM. 2, ,

225 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets NESTLE NOM. 28, ,858, NOBEL BIOCARE HOLDING (CHF) 1, , NOVARTIS AG NOM. 168, ,364, PHONAK HOLDING NOM. 3, , PSP SWISS PROPERTY 3, , RIETER HOLDING NOM , ROCHE HOLDING AG 50, ,920, S.G.S. NOM , SCHINDLER HOLDING B.PART. 3, , SERONO B , SIG HOLDING NOM , STRAUMANN HOLDING NOM. (NEW) , SUISSE REASSURANCE NOM. 24, ,576, SULZER FRERES NOM , SWISSCOM NOM. 1, , SYNGENTA NOM. 7, ,059, SYNTHES 3, , THE SWATCH GROUP 2, , THE SWATCH GROUP NOM. 3, , UBS 143, ,619, UNAXIS HOLDING NOM , ZURICH FINANCIAL SERVICE-REG (CHF) 10, ,148, ,452, UNITED KINGDOM 3I GROUP (NEW) 34, , AEGIS GROUP 64, , AGGREKO 16, , ALLIANCE BOOTS PLC 59, , AMEC 23, , AMVESCAP 53, , ANGLO AMERICAN (GBP) 103, ,845, ARM HOLDINGS 97, , ARRIVA 14, , ASTRAZENECA (GBP) 112, ,598, AVIVA 183, ,265, BAE SYSTEMS 232, ,481, BALFOUR BEATTY 30, , BARCLAYS (NEW) 469, ,158, BARRATT DEVELOPMENTS 17, , BBA AVIATION (NEW) 29, , BELLWAY 8, , BERKELEY GROUP (UNITS) 6, , BG GROUP 246, ,564, BHP BILLITON (GBP) 176, ,471, BIFFA 24, , BOVIS HOMES GROUP 9, , BP 1,426, ,155, BRITANNIC GROUP 49, , BRITISH AIRWAYS 42, , BRITISH AMERICAN TOBACCO 112, ,397, BRITISH LAND 37, , BRITISH SKY BROADCASTING GROUP 84, ,

226 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets BRIXTON 18, , BT GROUP 600, ,743, BUNZL (NEW) 25, , BURBERRY GROUP 31, , CABLE & WIRELESS 173, , CADBURY SCHWEPPES 151, ,246, CAPITA GROUP 44, , CARNIVAL 9, , CARPHONE WAREHOUSE 29, , CATTLES 23, , CENTRICA (NEW) 264, ,416, CHARTER 12, , CLOSE BROTHERS GROUP 9, , COBHAM (NEW) 82, , COLLINS STEWART 15, , COMPASS GROUP PLC 153, , COOKSON GROUP 14, , CORUS GROUP 64, , CSR 9, , DAILY MAIL & GENERAL TRUST A 20, , DAVIS SERVICE GROUP (NEW) 13, , DE LA RUE (NEW) 11, , DIAGEO 200, ,017, DIXONS GROUP 130, , ELECTROCOMPONENTS 31, , EMAP (NEW) 15, , EMI GROUP 58, , ENTERPRISE INNS 23, , EXPERIAN GROUP 73, , FIRST CHOICE HOLIDAYS 34, , FIRSTGROUP 28, , FKI 42, , FRIENDS PROVIDENT 122, , GALLAHER GROUP 47, , GKN 52, , GLAXOSMITHKLINE PLC 418, ,352, GREAT PORTLAND 11, , GROUP 4 SECURICOR 83, , HAMMERSON (STOCK UNITS) 20, , HANSON BUILDING MATERIALS 51, , HAYS 106, , HBOS 274, ,651, HMV GROUP 28, , HOME RETAIL GROUP 62, , HSBC HOLDINGS (GBP) 831, ,548, I. C. I. (UK) 86, , I. M. I. 23, , ICAP 34, , IMPERIAL TOBACCO 49, ,484, INCHCAPE 33, , INTERCONTINENTAL HOTELS GROUP 26, , INTERNATIONAL POWER 107, ,

227 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets INTERTEK GROUP 11, , INVENSYS (NEW) 58, , INVESTEC (NEW) 24, , ITV 285, , JOHNSON MATTHEY 16, , KELDA GROUP 25, , KESA ELECTRICALS 37, , KINGFISCHER 169, , LADBROKES (NEW) 44, , LAND SECURITIES GROUP 33, ,172, LEGAL & GENERAL GROUP PLC 474, ,114, LIBERTY INTERNATIONAL (GBP) 19, , LLOYDS TSB GROUP 407, ,484, LOGICACMG 107, , LONDON STOCK EXCHANGE GROUP 11, , MAN GROUP 127, , MARKS & SPENCER GROUP 122, ,312, MEGGITT 31, , MFI FURNITURE GROUP 46, , MICHAEL PAGE INTERNATIONAL 25, , MISYS 31, , MITCHELLS & BUTLERS (NEW) 29, , MITTAL STEEL A 50, ,622, NATIONAL EXPRESS GROUP 10, , NATIONAL GRID (NEW) 196, ,178, NEW CST 15, , NEXT GROUP 16, , OLD MUTUAL (ZAR) 374, , PEARSON 58, , PERSIMMON 20, , PREMIER FARNELL 25, , PROVIDENT FINANCIAL 18, , PRUDENTIAL 174, ,817, PUNCH TAVERNS 18, , RANK GROUP 43, , RECKITT BENCKISER 44, ,544, REED ELSEVIER 91, , RENTOKIL INITIAL , , REUTERS GROUP 93, , REXAM 40, , RIO TINTO NOM. 75, ,053, ROLLS-ROYCE GROUP 128, , ROYAL & SUN ALLIANCE INSUR. GROUP 214, , ROYAL BANK OF SCOTLAND GROUP 230, ,846, ROYAL DUTCH SHELL A 271, ,267, ROYAL DUTCH SHELL PLC-B SHS 199, ,364, SABMILLER (GBP) 64, ,135, SAGE GROUP 94, , SAINSBURY J. (NEW) 106, , SCHROEDERS 9, , SCOTTISH & NEWCASTLE 57, , SCOTTISH & SOUTHERN ENERGY 62, ,469,

228 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets SCOTTISH POWER 108, ,204, SERCO GROUP 35, , SEVERN TRENT (NEW) 16, , SIGNET GROUP 127, , SLOUGH ESTATES 33, , SMITH & NEPHEW 67, , SMITHS GROUP 41, , SSL INTERNATIONAL 14, , STAGECOACH GROUP 53, , TATE & LYLE 35, , TAYLOR WOODROW 39, , TESCO PLC 574, ,479, TOMKINS 61, , TRAVIS PERKINS 8, , TRINITY MIRROR 21, , UNILEVER NEW (GBP) 89, ,892, UNITED BUSINESS MEDIA 20, , UNITED UTILITIES 62, , VODAFONE GROUP (NEW) 3,803, ,053, WHITBREAD 15, , WILLIAM HILL 25, , WIMPEY GEORGE 29, , WOLSELEY 47, , WPP GROUP 85, , XSTRATA PLC 44, ,686, YELL GROUP 55, , ,420, TOTAL SHARES 486,359, RIGHTS BELGIUM GBL (GROUPE BRUX.LAMB.)STRIP VVPR FRANCE SUEZ STRIP VVPR 10, TOTAL VVPR 2, GERMANY HEIDELBERGCEMENT STRIP VVPR TOTAL RIGHTS TOTAL I. 486,359,

229 Pictet Funds (LUX) - Europe Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES SHARES BERMUDA SEADRILL 16, , , TOTAL SHARES 204, RIGHTS ITALY AUTOSTRADE RTS , UNITED KINGDOM CABLE & WIRELESS RTS , , HOME RETAIL GP (ST DIV.) , , HSBC HOLDING RTS , , NATIONAL GRID (NEW) RTS , , ROLLS-ROYCE GR. B (ST DIV.) 1/07 4,645, , TI AUTOMOTIVE A 4, VODAFONE GROUP RTS ,890, , WHITBREAD RTS , , , TOTAL RIGHTS 282, TOTAL II. 487, TOTAL INVESTMENTS 486,846, CASH AT BANKS 573, OTHER NET LIABILITIES -194, TOTAL NET ASSETS 487,225,

230 Pictet Funds (LUX) - Europe Index GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United Kingdom France Germany Switzerland 9.92 Spain 5.89 Italy 5.60 Netherlands 5.34 Sweden 3.73 Finland 2.09 Belgium 1.87 Ireland 1.50 Norway 1.21 Denmark 1.21 Greece 0.95 Austria 0.80 Portugal 0.50 Jersey 0.07 Bermuda 0.06 Luxembourg 0.05 Panama 0.03 Gibraltar Industrial classification (in % of net assets) Banks and credit institutions Communications 9.62 Oil 8.83 Pharmaceuticals and cosmetics 8.00 Utilities 6.43 Insurance 5.01 Holding and financial companies 4.85 Food and soft drinks 3.92 Electronics and electrical equipment 3.24 Retail and supermarkets 2.83 Chemicals 2.70 Construction and building materials 2.64 Tobacco and alcohol 2.64 Mining and steelworks 2.27 Road vehicles 1.98 Construction of machines and appliances 1.95 Transport and freight 1.47 Real estate 1.33 Gastronomy 1.02 Aeronautics and astronautics 0.92 Stainless steel 0.79 Precious metals and stones 0.68 Publishing and graphic arts 0.68 Miscellaneous consumer goods 0.66 Paper and forest products 0.62 Internet, software and IT services 0.58 Miscellaneous trade 0.45 Miscellaneous services 0.44 Computer and office equipment 0.40 Tyres and rubber 0.36 Textiles and clothing 0.35 Photography and optics 0.28 Environmental conservation and waste management 0.25 Leisure 0.24 Conglomerates 0.12 Watch-making 0.11 Agriculture and fishing 0.11 Biotechnology 0.05 Aluminium 0.02 Packaging

231 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BERMUDA COOPER INDUSTRIES A 6, , INGERSOLL-RAND A 22, , TYCO INTERNATIONAL 148, ,553, WEATHERFORD 25, ,050, ,092, CAYMAN ISLANDS ACE 23, ,450, NOBLE 10, , TRANSOCEAN INC 21, ,746, XL CAPITAL A 13, , ,976, NETHERLANDS ANTILLES SCHLUMBERGER (CURACAO) 87, ,567, ,567, PANAMA CARNIVAL TWIN 33, ,658, ,658, UNITED STATES 3 M 54, ,267, ABBOTT LABORATORIES 114, ,602, ADC TELECOMMUNICATIONS 6, , ADOBE SYSTEMS INC 42, ,777, ADVANCED MICRO DEVICES (USD) 41, , AES 49, ,096, AETNA 39, ,715, AFFILIATED COMPUTER A 8, , AFLAC 36, ,682, AGILENT TECHNOLOGIES 30, ,067, AIR PRODUCTS & CHEMICALS 16, ,140, ALCOA INC 63, ,911, ALLEGHENY ENERGY 12, , ALLEGHENY TECHNOLOGIES 7, , ALLERGAN 11, ,392, ALLIED WASTE INDUSTRIES 20, , ALLSTATE 46, ,085, ALLTEL 27, ,621, ALTERA 27, , ALTRIA GROUP (USD) 155, ,417, AMAZON. COM 23, , AMBAC FINANCIAL GROUP 7, , AMEREN CORPORATION 15, , AMERICAN ELECTRIC POWER 29, ,274, AMERICAN EXPRESS 89, ,484, AMERICAN INTERNATIONAL GROUP 193, ,904, AMERICAN POWER CONVERSION 12, , AMERICAN STANDARD COMPANIES 12, , AMERIPRISE FINANCIAL W-ISSUED 18, ,004,

232 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets AMERISOURCEBERGEN 14, , AMGEN 86, ,936, ANADARKO PETROLEUM 34, ,534, ANALOG DEVICES 25, , ANHEUSER-BUSCH (USD) 57, ,814, AON 22, , APACHE 24, ,630, APARTMENT INVESTMENT & MANAGEMENT 7, , APOLLO GROUP A 10, , APPLE COMPUTER INC 63, ,094, APPLERA (APPLIED BIOSYSTEMS GR.) 13, , APPLIED MATERIALS INC 104, ,933, ARCHER-DANIELS MIDLAND 49, ,586, ARCHSTONE-SMITH REIT 16, , ASHLAND 4, , AT & T (NEW) 267, ,508, AUTODESK 17, , AUTOMATIC DATA PROCESSING 41, ,038, AUTONATION 10, , AUTOZONE 3, , AVAYA INC 32, , AVERY DENNISON 7, , AVON PRODUCTS 33, ,120, BAKER HUGHES 23, ,780, BALL 8, , BANK OF AMERICA 334, ,951, BANK OF NEW YORK 57, ,279, BARR PHARMACEUTICALS 8, , BAUSCH & LOMB 4, , BAXTER INTERNATIONAL 49, ,298, BB & T 40, ,792, BEAR STEARNS 8, ,428, BECTON DICKINSON & CO 18, ,296, BED BATH & BEYOND INC 20, , BELLSOUTH 146, ,868, BEMIS 8, , BEST BUY 29, ,474, BIG LOTS 7, , BIOGEN IDEC 24, ,202, BIOMET 18, , BJ SERVICES 22, , BLACK & DECKER 5, , BLOCK (H.& R.) 25, , BMC SOFTWARE 14, , BOEING 59, ,251, BOSTON PROPERTIES 8, , BOSTON SCIENTIFIC 86, ,491, BRISTOL MYERS SQUIBB CO 145, ,828, BROADCOM CORP-CL A 34, ,111, BROWN FORMAN B N-VTG 6, , BRUNSWICK CORP. 7, , BURLINGTON NORTHERN SANTA FE 26, ,994,

233 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets C.A. 32, , CAMPBELL SOUP 15, , CAPITAL ONE FINANCIAL 29, ,341, CARDINAL HEALTH 30, ,981, CAREMARK RX 31, ,781, CATERPILLAR 48, ,967, CB RICHARD ELLIS GROUP A 13, , CBS B 57, ,798, CELGENE 27, ,596, CENTERPOINT ENERGY 23, , CENTEX 9, , CENTURYTEL 8, , CHARLES SCHWAB 74, ,444, CHESAPEAKE ENERGY 31, , CHEVRONTEXACO 161, ,027, CHICAGO MERCANTILE EXCH. HOLD. A 2, ,354, CHUBB 30, ,645, CIENA 6, , CIGNA 7, , CINCINNATI FINANCIAL 13, , CINTAS 9, , CIRCUIT CITY STORES 11, , CISCO SYSTEMS INC 452, ,407, CIT GROUP 15, , CITIGROUP 365, ,403, CITIZENS COMMUNICATIONS 25, , CITRIX SYSTEMS 12, , CLEAR CHANNEL COMMUNICATIONS 37, ,333, CLOROX 11, , CMS ENERGY 16, , COACH 28, ,221, COCA-COLA 151, ,365, COCA-COLA ENTERPRISES 19, , COGNIZANT TECH SOL A 10, , COLGATE PALMOLIVE 38, ,510, COMCAST A 155, ,626, COMERICA 12, , COMMERCE BANCORP 13, , COMPASS BANCSHARES 9, , COMPUTER SCIENCES 13, , COMPUWARE 25, , COMVERSE TECHNOLOGY INC 15, , CONAGRA FOODS 38, ,049, CONOCOPHILLIPS 122, ,910, CONSOL ENERGY 13, , CONSOLIDATED EDISON 19, , CONSTELLATION BRANDS A 16, , CONSTELLATION ENERGY GROUP 13, , CONVERGYS 10, , CORNING (USD) 116, ,183, COSTCO WHOLESALE 33, ,784, COUNTRYWIDE FINANCIAL 46, ,971,

234 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets COVENTRY HEALTH CARE 11, , CR BARD 7, , CSX 33, ,162, CUMMINS 3, , CVS 61, ,909, DANAHER 17, ,266, DARDEN RESTAURANTS 11, , DEAN FOODS 10, , DEERE & CO 17, ,647, DELL INC 168, ,245, DEVON ENERGY 32, ,190, DILLARDS A 5, , DIRECTV GROUP 56, ,409, DOLLAR GENERAL 24, , DOMINION RESOURCES 26, ,221, DONNELLEY & SONS 15, , DOVER 15, , DOW CHEMICAL 71, ,844, DOW JONES & CO 4, , DR HORTON 20, , DTE ENERGY COMPANY 13, , DU PONT DE NEMOURS 68, ,378, DUKE ENERGY 93, ,096, DYNEGY A 28, , E TRADE FINANCIAL 32, , E. W SCRIPPS A 6, , EASTMAN CHEMICAL 6, , EASTMAN KODAK 21, , EATON 11, , EBAY 85, ,582, ECOLAB 13, , EDISON INTERNATIONAL 23, ,091, EL PASO 53, , ELECTRONIC ARTS 23, ,185, ELECTRONIC DATA SYSTEMS 38, ,066, ELI LILLY 73, ,833, EMBARQ -WHEN ISSUED- 10, , EMC CORP/MASS 165, ,217, EMERSON ELECTRIC 59, ,637, ENTERGY 15, ,422, EOG RESOURCES 18, ,152, EQUIFAX 9, , EQUITY OFFICE PROPERTIES 26, ,265, EQUITY RESIDENTIAL (SBI) 21, ,107, ESTEE LAUDER A 9, , EXELON 49, ,062, EXPRESS SCRIPTS 10, , EXXON MOBIL 433, ,527, FAMILY DOLLAR STORE 12, , FANNIE MAE 72, ,357, FEDERATED DEPARTMENT STORES 38, ,489, FEDERATED INVESTORS B 5, ,

235 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets FEDEX 22, ,461, FIDELITY NATIONAL 11, , FIFTH THIRD BANCORP 42, ,740, FIRST DATA 57, ,458, FIRST HORIZON NATIONAL 8, , FIRSTENERGY 23, ,443, FISERV 13, , FLUOR 6, , FORD MOTOR 141, ,057, FOREST LABORATORIES 23, ,204, FORTUNE BRANDS 11, , FPL GROUP 29, ,621, FRANKLIN RESOURCES 12, ,377, FREDDIE MAC 51, ,548, FREEPORT MCMORAN COPPER & GOLD B 14, , GANNETT 17, ,070, GAP 40, , GENERAL DYNAMICS 30, ,268, GENERAL ELECTRIC 767, ,758, GENERAL MILLS 25, ,489, GENERAL MOTORS 40, ,249, GENUINE PARTS 12, , GENWORTH FINANCIAL -A- 33, ,167, GENZYME (GENERAL DIVISION) 19, ,171, GILEAD SCIENCES 34, ,261, GOLDMAN SACHS GROUP INC 31, ,365, GOODRICH 9, , GOODYEAR TIRE & RUBBER 12, , GOOGLE A 15, ,345, GRAINGER (W. W.) 5, , HALLIBURTON 74, ,319, HARLEY DAVIDSON 19, ,374, HARMAN INTERNATIONAL INDUSTRIES 5, , HARRAHS ENTERTAINMENT 14, ,159, HARTFORD FINANCIAL SERVICES GROUP 23, ,199, HASBRO 11, , HEALTH MANAGEMENT ASSOCIATES A 18, , HEINZ H. J. CO 24, ,096, HERCULES 7, , HERSHEY FOODS 12, , HESS 20, ,048, HEWLETT PACKARD 204, ,453, HILTON HOTELS 28, ,001, HOME DEPOT 150, ,995, HONEYWELL INTERNATIONAL 61, ,785, HOSPIRA 11, , HUMANA 13, , HUNTINGTON BANCSHARES 18, , IAC/INTERACTIVE WI. 16, , ILLINOIS TOOL WORKS 30, ,424, IMS HEALTH 14, , INT. FLAVORS & FRAGRANCES 6, ,

236 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets INTEL CORP 428, ,752, INTERNATIONAL GAME TECHNOLOGY 24, ,138, INTERNATIONAL PAPER 34, ,164, INTERPUBLIC GROUP 30, , INTL BUSINESS MACHINES CORP 112, ,885, INTUIT 25, , ITT INDUSTRIES 14, , JABIL CIRCUIT 12, , JANUS CAPITAL GROUP 13, , JDS UNIPHASE 16, , JOHNSON & JOHNSON 216, ,352, JOHNSON CONTROLS 14, ,275, JONES APPAREL GROUP 7, , JP MORGAN CHASE 257, ,613, JUNIPER NETWORKS INC 42, , KB HOME 5, , KELLOGG 18, , KEYCORP 29, ,127, KEYSPAN 12, , KIMBERLY CLARK 33, ,309, KIMCO REALTY 17, , KINDER MORGAN 8, , KING PHARMACEUTICALS 18, , KLA-TENCOR CORPORATION 15, , KOHLS CORP 23, ,640, KROGER 52, ,205, L-3 COMMUNICATIONS 9, , LABORATORY CORP OF AMERICA HOLD. 9, , LEGG MASON 9, , LEGGETT & PLATT 14, , LEHMAN BROTHERS HOLDINGS 39, ,088, LENNAR CORP A 10, , LEXMARK INTERNATIONAL A 7, , LIMITED BRANDS 25, , LINCOLN NATIONAL 21, ,431, LINEAR TECHNOLOGY 22, , LIZ CLAIBORNE 7, , LOCKHEED MARTIN 26, ,427, LOEWS 34, ,435, LOWE S COS INC 113, ,530, LSI LOGIC 30, , M & T BANK 5, , MANOR CARE 5, , MARATHON OIL 25, ,405, MARRIOTT INTERNATIONAL A 24, ,188, MARSH & MC LENNAN 41, ,262, MARSHALL & ILSLEY 19, , MASCO 28, , MATTEL 29, , MAXIM INTEGRATED PRODUCTS 24, , MBIA 9, , MC GRAW-HILL 26, ,813,

237 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets MCCORMICK NON-VTG 9, , MCDONALD S 92, ,107, MCKESSON 22, ,148, MEADWESTVACO 13, , MEDCO HEALTH SOLUTIONS 21, ,152, MEDIMMUNE 18, , MEDTRONIC 85, ,543, MELLON FINANCIAL 31, ,329, MERCK & CO 160, ,002, MEREDITH 2, , MERRILL LYNCH & CO 66, ,174, METLIFE 56, ,379, MGIC INVESTMENT 5, , MICRON TECHNOLOGY 54, , MICROSOFT CORP 644, ,313, MILLIPORE 3, , MOLEX 9, , MOLSON COORS B NVTG 3, , MONSANTO (NEW) 40, ,171, MONSTER WORLDWIDE 9, , MOODY S W. I. 17, ,204, MORGAN STANLEY 78, ,421, MOTOROLA 179, ,683, MURPHY OIL 13, , MYLAN LABORATORIES 16, , NABORS INDUSTRIES LTD 21, , NATIONAL CITY 46, ,712, NATIONAL OILWELL VARCO 13, , NATIONAL SEMICONDUCTOR 21, , NCR 13, , NETWORK APPLIANCE 27, ,106, NEW YORK TIMES A 11, , NEWELL RUBBERMAID 19, , NEWMONT MINING CORP 32, ,491, NEWS CORP-CL A 173, ,754, NICOR 3, , NIKE B 14, ,398, NISOURCE 19, , NORDSTROM 17, , NORFOLK SOUTHERN 28, ,459, NORTHERN TRUST 13, , NORTHROP GRUMMAN 25, ,774, NOVELL 23, , NOVELLUS SYSTEMS 8, , NUCOR 22, ,221, NVIDIA 26, , OCCIDENTAL PETROLEUM 63, ,125, OFFICE DEPOT 21, , OFFICEMAX 5, , OMNICOM GROUP 12, ,292, ORACLE CORP 298, ,134, PACCAR 18, ,220,

238 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets PACTIV 9, , PALL 10, , PARAMETRIC TECHNOLOGY 7, , PARKER HANNIFIN 9, , PATTERSON 10, , PAYCHEX 25, , PEABODY ENERGY 20, , PENNEY (J. C) CO 16, ,304, PEOPLES ENERGY 2, , PEPSI BOTTLING GROUP 10, , PEPSICO 122, ,735, PERKINELMER 9, , PFIZER INC 535, ,967, PG & E 26, ,247, PHELPS DODGE 15, ,841, PINNACLE WEST CAPITAL 7, , PITNEY BOWES 16, , PLUM CREEK TIMBER 13, , PMC SIERRA 11, , PNC FINANCIAL SERVICES 21, ,636, PPG INDUSTRIES 12, , PPL 28, ,030, PRAXAIR 24, ,433, PRINCIPAL FINANCIAL GROUP 20, ,199, PROCTER & GAMBLE (USD) 235, ,179, PROGRESS ENERGY 18, , PROGRESSIVE 55, ,355, PROLOGIS (SBI) 18, ,111, PRUDENTIAL FINANCIAL 35, ,066, PUBLIC SERVICE ENTERPRISE GROUP 18, ,245, PUBLIC STORAGE 8, , PULTE HOMES 15, , Q LOGIC 12, , QUALCOMM INC 122, ,610, QUEST DIAGNOSTICS 11, , QUESTAR 6, , QWEST COMMUNICATIONS INT. 122, ,027, RADIOSHACK 10, , RAYTHEON 33, ,790, REALOGY 16, , REGIONS FINANCIAL 54, ,066, REYNOLDS AMERICAN 12, , ROBERT HALF INTERNATIONAL 12, , ROCKWELL AUTOMATION (NEW) 12, , ROCKWELL COLLINS 12, , ROHM & HAAS 10, , ROWAN COMPANIES 8, , RYDER SYSTEM 4, , SABRE GROUP HOLDINGS A 9, , SAFECO 7, , SAFEWAY 33, ,183, SANDISK CORP 17, ,

239 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SANMINA-SCI 35, , SARA LEE 53, , SCHERING PLOUGH 110, ,626, SEALED AIR 6, , SEARS HOLDINGS 6, ,014, SEMPRA ENERGY 19, ,075, SHERWIN-WILLIAMS 8, , SIGMA-ALDRICH 4, , SIMON PROPERTY GROUP 16, ,636, SLM 30, ,511, SMITH INTERNATIONAL 15, , SNAP-ON 4, , SOLECTRON 59, , SOUTHERN 55, ,044, SOUTHWEST AIRLINES 59, , SOVEREIGN BANCORP 27, , SPRINT 215, ,120, ST JUDE MEDICAL 26, , ST PAUL 50, ,745, STANLEY WORKS 5, , STAPLES 54, ,459, STARBUCKS 55, ,982, STARWOOD HOTELS & RESORTS 16, ,008, STATE STREET 24, ,648, STRYKER 22, ,230, SUN MICROSYSTEMS INC 267, ,473, SUNOCO 9, , SUNTRUST BANKS 26, ,229, SUPERVALU 14, , SYMANTEC CORP 70, ,495, SYMBOL TECHNOLOGIES 16, , SYNOVUS FINANCIAL 23, , SYSCO 46, ,707, T ROWE PRICE GROUP 19, , TARGET CORP 63, ,631, TECO ENERGY 14, , TEKTRONIX 7, , TELLABS 32, , TEMPLE-INLAND 8, , TENET HEALTHCARE 35, , TERADYNE 16, , TEREX 7, , TEXAS INSTRUMENTS 111, ,220, TEXTRON 9, , THE WESTERN UNION 56, ,270, THERMO ELECTRON 30, ,393, TIFFANY & CO 10, , TIME WARNER INC 297, ,550, TJX COS 34, , TORCHMARK 7, , TRIBUNE 14, , TXU 34, ,878,

240 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TYSON FOODS A 18, , UNION PACIFIC 19, ,821, UNISYS 29, , UNITED PARCEL SERVICE B 79, ,966, UNITED TECHNOLOGIES 74, ,691, UNITEDHEALTH GROUP 100, ,366, UNIVISION COMMUNICATIONS A 19, , UNUMPROVIDENT 25, , US BANCORP 130, ,751, US STEEL 9, , UST 12, , VALERO ENERGY CORP 45, ,353, VERIGY VERISIGN 19, , VERIZON COMMUNICATIONS 216, ,082, VF CORP. 6, , VIACOM B WHEN ISSUED 52, ,113, VORNADO REALTY TRUST -SBI- 9, ,184, VULCAN MATERIALS 6, , WACHOVIA 142, ,170, WALGREEN CO 75, ,459, WAL-MART STORES INC 183, ,442, WALT DISNEY HOLDING 154, ,322, WASHINGTON MUTUAL 69, ,216, WASTE MANAGEMENT 40, ,484, WATERS 7, , WATSON PHARMACEUTICALS INC 8, , WELLPOINT 46, ,626, WELLS FARGO 250, ,005, WENDY S INTERNATIONAL 6, , WEYERHAEUSER 17, ,253, WHIRLPOOL 5, , WHOLE FOODS MARKET 10, , WILLIAMS COS INC 43, ,162, WINDSTREAM W-ISSUED 34, , WRIGLEY (WM) JR , WRIGLEY (WM) JR 16, , WYETH 99, ,136, WYNDHAM WORLDWIDE W-ISSUED 14, , XCEL ENERGY 31, , XEROX 71, ,219, XILINX 25, , XTO ENERGY 27, ,315, YAHOO 91, ,317, YUM BRANDS 20, ,199, ZIMMER HOLDINGS 17, ,364, ZIONS BANCORP 8, , ,782, TOTAL I. 951,077,

241 Pictet Funds (LUX) - USA Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES SHARES UNITED STATES SEAGATE TECHNOLOGY ESCROW SHS 2, TOTAL II TOTAL INVESTMENTS 951,077, CASH AT BANKS 3,061, OTHER NET LIABILITIES -962, TOTAL NET ASSETS 953,175,

242 Pictet Funds (LUX) - USA Index GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Bermuda 0.74 Netherlands Antilles 0.58 Cayman Islands 0.51 Panama Industrial classification (in % of net assets) Holding and financial companies Computer and office equipment Pharmaceuticals and cosmetics 9.67 Oil 9.20 Banks and credit institutions 8.92 Communications 6.87 Electronics and electrical equipment 4.84 Insurance 3.93 Retail and supermarkets 3.76 Conglomerates 3.42 Food and soft drinks 3.33 Chemicals 2.85 Utilities 2.58 Tobacco and alcohol 2.10 Aeronautics and astronautics 1.84 Construction of machines and appliances 1.68 Internet, software and IT services 1.24 Real estate 1.22 Construction and building materials 1.19 Publishing and graphic arts 1.16 Packaging 0.96 Miscellaneous consumer goods 0.90 Biotechnology 0.87 Transport and freight 0.84 Leisure 0.80 Gastronomy 0.69 Paper and forest products 0.66 Public healthcare and social services 0.63 Textiles and clothing 0.61 Road vehicles 0.55 Precious metals and stones 0.50 Mining and steelworks 0.35 Miscellaneous services 0.26 Stainless steel 0.20 Environmental conservation and waste management 0.19 Miscellaneous trade 0.09 Health services 0.07 Tyres and rubber 0.07 Photography and optics

243 Pictet Funds (LUX) - European Sustainable Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA OMV 6, , WIENERBERGER BAUSTOFFINDUSTRIE 16, , ,038, BELGIUM BEKAERT 2, , COLRUYT (ETBLISSEMENTS FR.) 4, , FORTIS 12, , GROUPE DELHAIZE 6, , KBC BANCASSURANCE HOLDING 2, , ,053, BERMUDA FRONTLINE 10, , , DENMARK CARLSBERG B 37, ,824, H. LUNDBECK 11, , NOVO-NORDISK B 9, , NOVOZYMES B 9, , VESTAS WIND SYSTEMS NOM. 9, , ,570, FINLAND KCI KONECRANES INTERNATIONAL 13, , NOKIA OYJ 270, ,204, STORA ENSO R 18, , ,724, FRANCE ACCOR 4, , AIR LIQUIDE , AXA 11, , BNP PARIBAS 7, , CARREFOUR SA 6, , CNP ASSURANCES 2, , CREDIT AGRICOLE 4, , DANONE GROUPE (CHF) 13, ,517, ESSILOR INTERNATIONAL 6, , FRANCE TELECOM SA 24, , IMERYS (EX-IMETAL) 6, , KLEPIERRE 3, , LAFARGE 4, , PEUGEOT PORT. 15, , SAINT GOBAIN 6, , SANOFI AVENTIS 17, ,248, SOCIETE GENERALE 32, ,184, THOMSON (EX-TMM) 165, ,460, TOTAL SA 34, ,892, ,011,

244 Pictet Funds (LUX) - European Sustainable Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets GERMANY ADIDAS-SALOMON 11, , ALLIANZ NOM. 21, ,310, ALTANA INDUSTRIE-AKTIEN & ANLAGEN 5, , DEUTSCHE BANK NOM. 3, , DEUTSCHE BOERSE NOM. 3, , DEUTSCHE TELEKOM NOM. 49, , FRESENIUS MEDICAL CARE 2, , HENKEL PREF. N-VTG 22, ,515, HYPO REAL ESTATE 8, , MAN 14, ,004, MLP 41, , MUENCHENER RUECKVER AG-REG 3, , PORSCHE PREF , SAP (EUR) 60, ,425, TUI (NEW) 14, , VOLKSWAGEN (EUR) 3, , ,064, GREECE COCA COLA HELLENIC BOTTLING 122, ,603, NATIONAL BANK OF GREECE 6, , TITAN CEMENT NOM. 15, , ,452, IRELAND ALLIED IRISH BANKS 23, , DEPFA BANK 28, , ELAN 33, , GRAFTON GROUP UNITS 32, , ,694, ITALY BANCA POPOLARE DI MILANO 20, , CAPITALIA 35, , ENEL ENTE NAZION. ENERGIA ELETTR. 106, , ENI 75, ,941, MONTE PASCHI SIENA 772, ,809, SNAM RETE GAS 55, , TELECOM IT MEDIA 1,058, , TELECOM ITALIA 451, ,038, UNICREDITO ITALIANO SPA 205, ,372, ,136, NETHERLANDS AEGON 20, , AKZO NOBEL 19, , ING GROEP (CERT.) 67, ,286, KONINKLIJKE AHOLD NV 33, , KONINKLIJKE DSM (NEW) 2, , QIAGEN 19, , REED ELSEVIER 63, , ROYAL PHILIPS (EUR) 51, ,472, SBM OFFSHORE 4, , STMICROELECTRONICS 76, ,069,

245 Pictet Funds (LUX) - European Sustainable Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets TNT NV 29, , UNILEVER NEW (EUR) 23, , ,992, NORWAY DNB HOLDING A 25, , NORSK HYDRO NOM. (NOK) 51, ,202, PETROLEUM GEO SERVICES 14, , TOMRA SYSTEMS (NOK) 56, , ,030, SPAIN BANCO SANTANDER CENTRAL HISPANO 75, ,072, BCO BILBAO VIZCAYA ARGENT. NOM. 279, ,112, GAMESA CORP TECNOLOGICA SA 183, ,844, GAS NATURAL SDG SA 8, , GRUPO FERROVIAL 6, , REPSOL YPF SA 48, ,268, SOGECABLE 8, , TELEFONICA S.A. 14, , ,486, SWEDEN BILLERUD 140, ,880, ELECTROLUX B -FRIA- 19, , ERICSSON TELEFON B 220, , FABEGE AB 36, , HENNES & MAURITZ B 14, , NORDEA HOLDING (SEK) 111, ,321, VOLVO B 13, , ,202, SWITZERLAND ABB LTD NOM. 35, , CIBA SPECIALITES CHIM. HOLD. NOM. 11, , CLARIANT NOM. 27, , CS GROUP NOM. 14, , HOLCIM NOM. 5, , NESTLE NOM. 2, , NOBEL BIOCARE HOLDING (CHF) 2, , NOVARTIS AG NOM. 23, ,038, RIETER HOLDING NOM. 1, , ROCHE HOLDING AG 12, ,661, SCHINDLER HOLDING B.PART. 46, ,183, SUISSE REASSURANCE NOM. 3, , SULZER FRERES NOM. 1, ,376, SWISSCOM NOM. 7, ,132, UBS 33, ,520, ZURICH FINANCIAL SERVICE-REG (CHF) 1, , ,829, UNITED KINGDOM AEGIS GROUP 1,308, ,725, ASTRAZENECA (GBP) 79, ,275, AVIVA 248, ,061, BARCLAYS (NEW) 65, ,

246 Pictet Funds (LUX) - European Sustainable Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets BG GROUP 437, ,552, BIFFA 93, , BP 311, ,658, BT GROUP 1,061, ,850, CABLE & WIRELESS 278, , CADBURY SCHWEPPES 46, , CENTRICA (NEW) 281, ,508, CLOSE BROTHERS GROUP 143, ,168, COMPASS GROUP PLC 56, , DIAGEO 120, ,809, EMI GROUP 93, , GLAXOSMITHKLINE PLC 90, ,803, HAMMERSON (STOCK UNITS) 22, , HBOS 104, ,765, HSBC HOLDINGS (GBP) 102, ,426, I. C. I. (UK) 182, ,226, INTERNATIONAL POWER 67, , INTERTEK GROUP 91, ,140, LAND SECURITIES GROUP 25, , LEGAL & GENERAL GROUP PLC 274, , LLOYDS TSB GROUP 107, , MARKS & SPENCER GROUP 37, , MITTAL STEEL A 91, ,949, NATIONAL EXPRESS GROUP 162, ,710, NATIONAL GRID (NEW) 128, ,425, NEXT GROUP 7, , PEARSON 48, , PRUDENTIAL 25, , REED ELSEVIER 108, , ROYAL BANK OF SCOTLAND GROUP 55, ,650, ROYAL DUTCH SHELL A 38, ,020, ROYAL DUTCH SHELL PLC-B SHS 29, , SEVERN TRENT (NEW) 154, ,410, SMITH & NEPHEW 54, , TAYLOR WOODROW 42, , TESCO PLC 44, , UNILEVER NEW (GBP) 27, , UNITED UTILITIES 61, , VODAFONE GROUP (NEW) 256, , WHITBREAD 40, ,006, ,274, TOTAL I. 164,810,

247 Pictet Funds (LUX) - European Sustainable Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES RIGHTS UNITED KINGDOM CABLE & WIRELESS RTS , , HSBC HOLDING RTS , , NATIONAL GRID (NEW) RTS , , VODAFONE GROUP RTS , , WHITBREAD RTS , , , TOTAL II. 50, TOTAL INVESTMENTS 164,860, CASH AT BANKS 904, OTHER NET LIABILITIES -356, TOTAL NET ASSETS 165,408,

248 Pictet Funds (LUX) - European Sustainable Equities GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United Kingdom France Switzerland 8.98 Germany 8.51 Spain 7.55 Italy 6.12 Netherlands 5.45 Sweden 3.75 Finland 2.86 Denmark 2.76 Greece 2.69 Norway 1.24 Belgium 1.24 Ireland 1.02 Austria 0.63 Bermuda Industrial classification (in % of net assets) Banks and credit institutions Communications Utilities 8.06 Pharmaceuticals and cosmetics 7.44 Oil 6.20 Insurance 5.37 Holding and financial companies 4.35 Food and soft drinks 4.33 Chemicals 4.32 Electronics and electrical equipment 3.68 Construction of machines and appliances 3.13 Tobacco and alcohol 2.80 Transport and freight 2.38 Precious metals and stones 2.32 Mining and steelworks 1.92 Retail and supermarkets 1.79 Paper and forest products 1.69 Construction and building materials 1.64 Real estate 1.61 Internet, software and IT services 1.47 Road vehicles 1.28 Gastronomy 1.03 Publishing and graphic arts 0.83 Miscellaneous services 0.82 Photography and optics 0.32 Conglomerates 0.27 Leisure 0.26 Environmental conservation and waste management 0.26 Miscellaneous consumer goods 0.22 Stainless steel

249 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES JAPAN ACCESS CO ,176, ACOM 7, ,480, ADERANS 3, ,342, ADVANTEST 17, ,032, AEON CO LTD 70, ,250, AEON CREDIT SERVICE 9, ,648, AIFUL 8, ,312, AISIN SEIKI 20, ,992, AJINOMOTO 67, ,391, ALFRESA HOLDINGS 2, ,256, ALL NIPPON AIRWAYS 68, ,628, ALPS ELECTRIC 20, ,820, AMADA CO 40, ,440, AMANO 7, ,458, AOYAMA TRADING 6, ,562, ARRK 6, ,116, ASAHI BREWERIES 41, ,867, ASAHI GLASS 106, ,580, ASAHI KASEI 137, ,723, ASATSU-DK 4, ,498, ASICS CORP 18, ,892, AUTOBACS SEVEN 2, ,615, BANK OF FUKUOKA 67, ,156, BANK OF KYOTO 29, ,190, BANK OF YOKOHAMA LTD/THE 130, ,160, BENESSE 6, ,804, BRIDGESTONE 68, ,540, CANON 118, ,605, CANON SALES 8, ,640, CASIO COMPUTER 25, ,850, CENTRAL GLASS CO 18, ,276, CENTRAL JAPAN RAILWAY ,560, CHIBA BANK 82, ,492, CHIYODA 15, ,950, CHUBU ELECTRIC POWER 73, ,728, CHUGAI PHARMACEUTICAL 31, ,841, CIRCLE K SUNKS 4, ,460, CITIZEN WATCH CO LTD 40, ,531, COCA-COLA WEST JAPAN 5, ,428, COMSYS HOLDINGS 14, ,452, CREDIT SAISON 18, ,210, CSK 7, ,100, DAI NIPPON PRINTING 69, ,822, DAICEL CHEMICAL INDUSTRIES 32, ,848, DAIDO STEEL 40, ,640, DAIFUKU 8, ,056, DAIICHI SANKYO 81, ,376, DAIKIN INDUSTRIES 26, ,468,

250 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets DAIMARU 22, ,486, DAINIPPON INK & CHEMICALS 71, ,944, DAINIPPON SCREEN MFG 24, ,656, DAITO TRUST CONSTRUCTION 9, ,686, DAIWA HOUSE INDUSTRY 59, ,130, DAIWA SECURITIES GROUP 141, ,235, DENKI KAGAKU KOGYO 53, ,235, DENSO 53, ,520, DENTSU ,102, DOWA MINING 31, ,558, EACCESS ,534, EAST JAPAN RAILWAY ,330, EBARA 44, ,064, EDION 7, ,414, EISAI 27, ,466, ELECTRIC POWER DEVELOPMENT 17, ,700, ELPIDA MEMORY 10, ,978, ETRADE SECURITIES ,967, FAMILYMART 7, ,680, FANUC 19, ,228, FAST RETAILING 6, ,160, FUJI ELECTRIC HOLDINGS 61, ,345, FUJI PHOTO FILM 54, ,549, FUJI SOFT ABC 3, ,306, FUJI TV NETWORK ,328, FUJIKURA 39, ,833, FUJITSU 207, ,338, FURUKAWA ELECTRIC 72, ,856, GLORY 7, ,503, GOODWILL GROUP ,386, GUNMA BANK 42, ,030, GUNZE 23, ,754, HAKUHODO DY HOLDINGS 2, ,644, HANKYU 131, ,352, HANKYU DEPARTMENT STORES 14, ,888, HASEKO 84, ,997, HIKARI TSUSHIN 2, ,644, HINO MOTORS 27, ,524, HIROSE ELECTRIC 3, ,583, HITACHI 371, ,282, HITACHI CABLE 20, ,360, HITACHI CAPITAL 4, ,534, HITACHI CHEMICAL 11, ,376, HITACHI CONSTRUCTION MACHINERY 11, ,200, HITACHI HIGH-TECHNOLOGIES 7, ,134, HOKKAIDO ELECTRIC POWER 20, ,624, HOKUHOKU FINANCIAL GROUP 141, ,476, HONDA MOTOR 172, ,280, HOUSE FOODS 8, ,892, HOYA 45, ,976, IBIDEN 14, ,600, INDEX ,330,

251 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets INPEX ,976, ISETAN 21, ,010, ISHIKAWAJIMA HARIMA HEAVY IND. 126, ,778, ITO EN 6, ,024, ITOCHU 166, ,182, ITOCHU TECHNO-SCIENCE 3, ,788, JAFCO 3, ,756, JAL 96, ,352, JAPAN REAL ESTATE INVESTMENT REIT ,760, JAPAN STEEL WORKS 38, ,340, JAPAN TOBACCO ,500, JFE HOLDINGS 61, ,221, JGC 22, ,990, JOYO BANK 77, ,589, JP RETAIL FUND INVESTMENT ,830, JS GROUP 29, ,146, JSR 19, ,752, KAJIMA 101, ,722, KAKEN PHARMACEUTICAL 10, ,290, KAMIGUMI 30, ,220, KANEKA 32, ,688, KANSAI ELECTRIC POWER 84, ,566, KANSAI PAINT 25, ,550, KAO 55, ,550, KATOKICHI 13, ,110, KAWASAKI HEAVY INDUSTRIES 150, ,050, KAWASAKI KISEN KAISHA 57, ,067, KDDI ,276, KEIHIN ELECTRIC EXPRESS RAILWAY 48, ,360, KEIO ELECTRIC RAILWAY 59, ,430, KEISEI ELECTRIC RAILWAY 34, ,018, KEYENCE 4, ,152, KIKKOMAN 16, ,992, KINDEN 16, ,376, KINTETSU CORP 177, ,419, KIRIN BREWERY 88, ,648, KK DAVINCI ADVISORS ,508, KOBE STEEL 311, ,888, KOKUYO 10, ,998, KOMATSU 100, ,500, KOMORI 6, ,350, KONAMI 10, ,160, KONICA MINOLTA 53, ,880, KOSE 3, ,636, KOYO SEIKO 20, ,500, KUBOTA 121, ,342, KURARAY 39, ,756, KURITA WATER INDUSTRIES 12, ,896, KYOCERA 18, ,082, KYOWA HAKKO KOGYO 37, ,703, KYUSHU ELECTRIC POWER 41, ,566, LAWSON 7, ,246,

252 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets LEOPALACE21 14, ,100, MABUCHI MOTOR 2, ,532, MAKITA 12, ,800, MARUBENI 169, ,076, MARUI 35, ,412, MATSUI SECURITIES 14, ,093, MATSUMOTOKIYOSHI CO LTD 4, ,960, MATSUSHITA ELECTRIC INDUSTRIAL 217, ,375, MATSUSHITA ELECTRIC WORKS 38, ,402, MEDICEO 19, ,845, MEIJI DAIRIES 30, ,110, MEIJI SEIKA KAISHA 37, ,053, MEITEC 3, ,996, MILLEA HOLDINGS 79, ,900, MINEBEA 38, ,616, MITSUBISHI 149, ,328, MITSUBISHI CHEMICAL HOLDINGS 128, ,000, MITSUBISHI ELECTRIC 214, ,404, MITSUBISHI ESTATE CO LTD 129, ,320, MITSUBISHI GAS CHEMICAL 43, ,535, MITSUBISHI HEAVY INDUSTRIES 356, ,596, MITSUBISHI LOGISTICS 12, ,164, MITSUBISHI MATERIALS 110, ,170, MITSUBISHI RAYON 60, ,000, MITSUBISHI SECURITIES 28, ,016, MITSUBISHI TOKYO FINANCIAL GROUP ,397,970, MITSUI & CO 171, ,380, MITSUI CHEMICALS 68, ,288, MITSUI ENGINEERING & SHIPBUILDING 75, ,025, MITSUI FUDOSAN 92, ,260, MITSUI MINING & SMELTING 65, ,740, MITSUI OSK LINES LTD 119, ,706, MITSUI SUMITOMO INSURANCE 133, ,166, MITSUI TRUST HOLDING 75, ,450, MITSUKOSHI 48, ,736, MITSUMI ELECTRIC 7, ,126, MIZUHO FINANCIAL GROUP 1, ,200, MURATA MANUFACTURING 22, ,125, N. T. T ,364, NAMCO BANDAI 22, ,088, NEC 222, ,318, NEC ELECTRONICS 4, ,312, NET ONE SYSTEMS ,362, NGK INSULATORS 30, ,140, NGK SPARK PLUG 19, ,560, NHK SPRING 18, ,518, NICHIREI 25, ,675, NIDEC 11, ,560, NIKKO CORDIAL 91, ,897, NIKON 32, ,520, NINTENDO 11, ,900, NIPPON ELECTRIC GLASS 25, ,500,

253 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets NIPPON EXPRESS 90, ,590, NIPPON KAYAKU 16, ,200, NIPPON LIGHT METAL 55, ,775, NIPPON MEAT PACKERS 19, ,700, NIPPON MINING HLDG 98, ,888, NIPPON OIL 136, ,256, NIPPON PAPER GROUP ,553, NIPPON SANSO 29, ,088, NIPPON SHEET GLASS 47, ,226, NIPPON SHOKUBAI 15, ,975, NIPPON STEEL 680, ,120, NIPPON YUSEN 116, ,920, NISHIMATSU CONSTRUCTION 31, ,183, NISHI-NIPPON CITY BANK 63, ,256, NISSAN CHEMICAL INDUSTRIES 17, ,160, NISSAN MOTOR 250, ,823, NISSHIN SEIFUN 19, ,437, NISSHIN STEEL 89, ,338, NISSHINBO INDUSTRIES 18, ,194, NISSIN FOOD PRODUCTS 9, ,218, NITORI CO 3, ,646, NITTO DENKO 18, ,280, NOK 13, ,654, NOMURA HOLDINGS INC 196, ,469, NOMURA REAL ESTATE OFFICE FD ,430, NOMURA RESEARCH INSTITUTE 2, ,150, NSK 48, ,304, NTN 45, ,015, NTT DATA ,248, NTT DOCOMO INC 2, ,912, NTT URBAN DEVELOPMENT ,900, OBAYASHI 72, ,584, OBIC ,472, ODAKYU ELECTRIC RAILWAY 68, ,748, OJI PAPER 81, ,192, OKI ELECTRIC INDUSTRY 64, ,960, OKUMA 17, ,460, OKUMURA 19, ,191, OLYMPUS 25, ,500, OMRON 25, ,838, ONWARD KASHIYAMA 16, ,304, ORACLE JAPAN 3, ,938, ORIENTAL LAND 5, ,511, ORIX 10, ,500, OSAKA GAS 225, ,675, OSG 8, ,575, OTSUKA 1, ,360, PARK24 11, ,385, PIONEER CORP 15, ,980, PROMISE 9, ,485, Q. P. 11, ,730, RAKUTEN ,848,

254 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets RESONA HOLDINGS ,500, RICOH CO LTD 73, ,390, RINNAI 4, ,952, ROHM 11, ,830, ROUND ONE ,320, RYOHIN KEIKAKU 2, ,775, SANKEN ELECTRIC 11, ,159, SANKYO 6, ,199, SANTEN PHARMACEUTICAL 7, ,125, SANWA SHUTTER 21, ,784, SANYO ELECTRIC 184, ,784, SAPPORA HOLDINGS 26, ,628, SAPPORO HOKUYO HOLDINGS ,950, SECOM 23, ,995, SEGA SAMMY HOLDINGS 20, ,484, SEIKO EPSON 15, ,583, SEINO TRANSPORTATION 17, ,006, SEKISUI CHEMICAL 52, ,348, SEKISUI HOUSE 58, ,514, SEVEN & I HOLDINGS CO LTD 91, ,700, SEVENTY-SEVEN (77) BANK 38, ,690, SFCG ,388, SHARP 111, ,550, SHIMACHU 5, ,975, SHIMAMURA CO LTD 2, ,441, SHIMANO 8, ,600, SHIMIZU 68, ,460, SHIN-ETSU CHEMICAL 43, ,710, SHINKO ELECTRIC INDUSTRIES 7, ,947, SHINKO SECURITIES 55, ,410, SHINSEI BANK 172, ,400, SHIONOGI & CO 33, ,220, SHISEIDO 41, ,780, SHIZUOKA BANK 65, ,765, SHOWA DENKO 119, ,264, SHOWA SHELL SEKIYU 21, ,972, SMC 6, ,280, SOFTBANK 81, ,135, SOFTBANK INVESTMENT 1, ,904, SOJITZ HOLDINGS CORP 68, ,797, SOMPO JAPAN INSURANCE 92, ,860, SONY 110, ,080, STANLEY ELECTRIC 16, ,160, SUMCO 5, ,318, SUMITOMO 118, ,158, SUMITOMO BAKELITE 21, ,262, SUMITOMO CHEMICAL 163, ,449, SUMITOMO ELECTRIC INDUSTRIES 79, ,614, SUMITOMO HEAVY INDUSTRIES 63, ,750, SUMITOMO METAL INDUSTRIES 454, ,718, SUMITOMO METAL MINING 61, ,147, SUMITOMO MITSUI FINANCIAL GROUP ,600,

255 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets SUMITOMO OSAKA CEMENT 41, ,949, SUMITOMO REALTY & DEVELOPMENT 42, ,440, SUMITOMO RUBBER INDUSTRIES 19, ,203, SUMITOMO TITANIUM 2, ,620, SUMITOMO TRUST & BANKING 139, ,472, SURUGA BANK 21, ,954, SUZUKEN 8, ,288, T&D HOLDINGS 26, ,620, TAIHEIYO CEMENT 102, ,532, TAISEI CORP 107, ,841, TAISHO PHARMACEUTICAL 18, ,970, TAIYO YUDEN 11, ,100, TAKARA HOLDINGS 21, ,107, TAKASHIMAYA 30, ,460, TAKEDA PHARMACEUTICAL 98, ,477, TAKEFUJI 12, ,708, TANABE SEIYAKU 26, ,430, TDK 13, ,494, TEIJIN 93, ,169, TERUMO 18, ,516, THK 13, ,217, TIS 3, ,415, TOBU RAILWAY 91, ,325, TODA 24, ,120, TOHO 15, ,325, TOHO TITANIUM 3, ,625, TOHOKU ELECTRIC POWER 47, ,122, TOKAI RIKA 6, ,786, TOKUYAMA 25, ,300, TOKYO BROADCASTING SYSTEM 4, ,674, TOKYO ELECTRIC POWER 134, ,055, TOKYO ELECTRON 18, ,778, TOKYO GAS CO 249, ,617, TOKYO SEIMITSU 3, ,918, TOKYO STEEL MANUFACTURING 12, ,325, TOKYO STYLE 6, ,722, TOKYO TATEMONO 33, ,758, TOKYU 118, ,916, TOKYU LAND 45, ,490, TONENGENERAL SEKIYU 32, ,728, TOPPAN PRINTING 61, ,154, TORAY INDUSTRIES INC 145, ,340, TOSHIBA 319, ,225, TOSOH 55, ,930, TOTO 30, ,760, TOYO SEIKAN KAISHA 17, ,083, TOYO SUISAN KAISHA 10, ,070, TOYOBO 72, ,848, TOYODA GOSEI 7, ,387, TOYOTA INDUSTRIES CORPORATION 21, ,511, TOYOTA MOTOR CORP 319, ,543,220, TOYOTA TSUSHO CORP 22, ,180,

256 Pictet Funds (LUX) - Japan Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets TREND MICRO 10, ,645, UBE INDUSTRIES 100, ,200, UNI-CHARM 4, ,229, UNIDEN 6, ,878, UNY 18, ,900, USHIO 12, ,073, USS 2, ,467, WACOAL 11, ,787, WEST JAPAN RAILWAY ,219, YAHOO JAPAN 1, ,878, YAKULT HONSHA 11, ,014, YAMADA DENKI 9, ,930, YAMAHA 18, ,124, YAMAHA MOTOR 20, ,044, YAMANOUCHI PHARMACEUTICAL 59, ,354, YAMATO TRANSPORT 41, ,030, YAMAZAKI BAKING 13, ,002, YASKAWA ELECTRIC 22, ,294, YOKOGAWA ELECTRIC 24, ,476, ZEON 19, ,434, ,967,676, TOTAL SHARES 37,967,676, UNITS OF INVESTMENT FUNDS JAPAN JAPAN PRIME REALTY INVESTMENT ,168, NIPPON BUILDING FUND ,420, ,588, TOTAL UNITS OF INVESTMENT FUNDS 98,588, TOTAL I. 38,066,264, II. OTHER TRANSFERABLE SECURITIES RIGHTS JAPAN DOWA MINING RTS , TOTAL RIGHTS TOTAL II TOTAL INVESTMENTS 38,066,264, CASH AT BANKS 957,274, OTHER NET LIABILITIES -3,481, TOTAL NET ASSETS 39,020,057,

257 Pictet Funds (LUX) - Japan Index GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Japan Industrial classification (in % of net assets) Electronics and electrical equipment Holding and financial companies Road vehicles Banks and credit institutions 8.08 Chemicals 5.75 Utilities 4.69 Construction of machines and appliances 4.63 Transport and freight 4.00 Real estate 3.03 Communications 2.99 Pharmaceuticals and cosmetics 2.86 Retail and supermarkets 2.71 Construction and building materials 2.70 Computer and office equipment 2.33 Photography and optics 1.91 Miscellaneous trade 1.80 Tobacco and alcohol 1.45 Textiles and clothing 1.44 Insurance 1.30 Miscellaneous consumer goods 1.29 Aluminium 1.19 Mining and steelworks 1.17 Food and soft drinks 1.11 Watch-making 0.92 Stainless steel 0.88 Tyres and rubber 0.68 Publishing and graphic arts 0.54 Oil 0.45 Internet, software and IT services 0.38 Leisure 0.36 Units of investment funds 0.25 Paper and forest products 0.24 Miscellaneous services 0.22 Packaging 0.09 Gastronomy

258 Pictet Funds (LUX) - Pacific (Ex Japan) Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRALIA A.B.C LEARNING CENTERS 51, , AGL ENERGY 54, , ALINTA MERGECO 70, , ALUMINA 168, , AMCOR 129, , AMP 269, ,153, ANSELL 21, , APN NEWS & MEDIA 39, , ARISTOCRAT LEISURE 50, , AUSTRALIA & NEW ZEALAND BANKING 264, ,889, AUSTRALIAN STOCK EXCHANGE 24, , AXA ASIA PACIFIC HOLDINGS 124, , BABCOCK & BROWN 32, , BHP BILLITON 503, ,057, BHP STEEL 99, , BILLABONG INT 24, , BORAL 84, , BRAMBLES 223, ,268, CALTEX AUSTRALIA 19, , CENTRO PROPERTIES STAPLED SEC. 117, , CFS RETAIL PROPERTY TRUST 198, , CHALLENGER FINANCIAL SERVICES 56, , COCA-COLA AMATIL 75, , COCHLEAR 7, , COLES GROUP 162, ,800, COMMONWEALTH BANK OF AUSTRALIA 185, ,230, COMMONWEALTH PROPERTY OFFICE FUND 203, , COMPUTERSHARE 65, , CSL 26, ,357, CSR 129, , DB RREEF TRUST 380, , DOWNER EDI 42, , FOSTER S GROUP 289, ,583, FUTURIS 85, , GENERAL PROPERTY TRUST 278, ,233, GOODMAN FIELDER 153, , HARVEY NORMAN HOLDINGS 74, , ILUKA RESOURCES 32, , ING INDUSTRIAL FUND 121, , INSURANCE AUSTRALIA GROUP 248, ,245, INVESTA PROPERTY 221, , JAMES HARDIES INDUSTRIES 67, , JOHN FAIRFAX HOLDINGS 145, , LEIGHTON HOLDINGS 20, , LEND LEASE 51, , LION NATHAN (AUD) 42, , MACQUARIE AIRPORTS "STAPLED SEC." 96, , MACQUARIE BANK 35, ,238,

259 Pictet Funds (LUX) - Pacific (Ex Japan) Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets MACQUARIE COMMUN. INFRA."STAPLED" 46, , MACQUARIE GOODMAN -STAPLED SEC- 199, ,197, MACQUARIE INFRASTRUCTURE GRP 366, ,001, MACQUARIE OFFICE 287, , MAYNE PHARMA 91, , MIRVAC GROUP STAPLED SECURITIES 140, , MULTIPLEX GROUP STAPLED SECURITY 91, , NATIONAL AUSTRALIA BANK 231, ,399, NEWCREST MINING 47, , ONESTEEL 83, , ORICA 44, , ORIGIN ENERGY 123, , PACIFIC BRANDS 75, , PALADIN RESOURCES 61, , PAPERLINX 63, , PERPETUAL TRUSTEES AUSTRALIA 6, , PUBLISHING & BROADCASTING 19, , QANTAS AIRWAYS 137, , QBE INSURANCE GROUP 116, ,643, RINKER GROUP 131, ,869, RIO TINTO 41, ,413, SANTOS 86, , SONIC HEALTHCARE 38, , STOCKLAND 197, ,293, SUNCORP METWAY 80, ,286, SYDNEY ROADS GROUP 131, , SYMBION HEALTH 93, , TABCORP HOLDINGS 75, ,005, TATTERSALL S 156, , TELSTRA 410, ,343, TELSTRA CORP (INST.REC/PART PAID) 215, , TOLL HOLDINGS 76, ,109, TRANSURBAN GROUP STAPLED SEC. 120, , WESFARMERS 54, ,612, WESTFIELD 217, ,598, WESTPAC BANKING 264, ,064, WOODSIDE PETROLEUM 67, ,016, WOOLWORTHS LIMITED 170, ,226, WORLEY PARSONS 20, , ZINIFEX 70, ,047, ,016, BERMUDA NOBLE GROUP 150, , TEXWINCA HOLDINGS 94, , YUE YUEN INDUSTRIAL 95, , , CAYMAN ISLANDS FOXCONN INTERNATIONAL 302, , KINGBOARD CHEMICAL HOLDINGS (NEW) 80, , SOLOMON SYSTECH 336, , ,355,

260 Pictet Funds (LUX) - Pacific (Ex Japan) Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets HONG KONG ASM PACIFIC TECHNOLOGY 25, , BANK OF EAST ASIA 210, ,192, BOC HONG KONG (HOLDINGS) 533, ,446, CATHAY PACIFIC AIRWAYS 143, , CHEUNG KONG HOLDINGS 217, ,672, CHEUNG KONG INFRASTRUCTURE HOLD. 67, , CLP HOLDINGS 260, ,926, ESPRIT HOLDINGS 149, ,664, GIORDANO INTERNATIONAL 226, , HANG LUNG PROPERTIES 330, , HANG SENG BANK 110, ,508, HENDERSON LAND DEVELOPMENT 127, , HONG KONG & CHINA GAS 516, ,161, HONG KONG EXCHANGES AND CLEARING 154, ,693, HONGKONG ELECTRIC 201, , HOPEWELL 91, , HUTCHISON TELECOMMUNICATIONS 207, , HUTCHISON WHAMPOA 308, ,131, HYSAN DEVELOPMENT 92, , JOHNSON ELECTRIC HOLDINGS 203, , KERRY PROPERTIES 71, , LI & FUNG (NEW) 320, , MELCO INTERNATIONAL DEVELOPEMENT 106, , MTR 197, , NEW WORLD DEVELOPMENT 370, , ORIENT OVERSEAS 31, , PCCW 529, , SHANGRI-LA ASIA 182, , SHUN TAK HOLDINGS 144, , SINO LAND 186, , SUN HUNG KAI PROPERTIES 198, ,275, SWIRE PACIFIC A 134, ,440, TECHNTRONIC INDUSTRIE (NEW) 147, , TELEVISION BROADCASTS 41, , WHARF HOLDINGS 175, , WING HANG BANK 26, , ,554, NEW ZEALAND AUCKLAND INTERNATIONAL AIRPORT 144, , CONTACT ENERGY 40, , FISHER & PAYKEL APPLIANCES HOLD. 40, , FISHER & PAYKEL HEALTHCARE 72, , FLETCHER BUILDING 67, , SKY CITY ENTERTAINMENT GROUP 63, , SKY NETWORK TELEVISION 27, , TELECOM CORP. OF NEW ZEALAND 282, , TOWER LIMITED 21, , VECTOR 38, , WAREHOUSE GROUP 14, , ,810,

261 Pictet Funds (LUX) - Pacific (Ex Japan) Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SINGAPORE ALLGREEN PROPERTIES 61, , ASCENDAS REAL ESTATE 130, , CAPITACOMMERCIAL TRUST 142, , CAPITALAND 181, , CAPITAMALL 134, , CHARTERED SEMICONDUCTOR MFG. 140, , CITY DEVELOPMENTS 72, , COMFORTDELGRO 251, , COSCO CORPORATION (SINGAPORE) 115, , CREATIVE TECHNOLOGY 8, , CYCLE & CARRIAGE 20, , DEVELOPMENT BANK SINGAPORE 163, ,403, FRASER AND NEAVE (NEW) 118, , HAW PAR 14, , KEPPEL 80, , KEPPEL LAND 52, , NEPTUNE ORIENT LINES 62, , OLAM INTERNATIONAL 90, , OVERSEA-CHINESE BANKING (NEW) 358, ,799, PARKWAY HOLDINGS 91, , SEMBCORP INDUSTRIES 113, , SEMBCORP MARINE 76, , SINGAPORE AIRLINES 79, , SINGAPORE EXCHANGE 113, , SINGAPORE LAND 17, , SINGAPORE PETROLEUM 20, , SINGAPORE POST 192, , SINGAPORE PRESS HOLDING 218, , SINGAPORE TECHNOLOGIES ENGINEER. 188, , SINGAPORE TELECOMMUNICATIONS 1,030, ,204, SMRT 85, , STATS CHIPPAC LTD 186, , UNITED OVERSEAS BANK 165, ,088, UNITED OVERSEAS LAND 76, , VENTURE CORPORATION 35, , WANT WANT HOLDINGS 63, , WING TAI HOLDINGS 65, , ,363, TOTAL SHARES 155,574, RIGHTS SINGAPORE ALLGREEN PROPERTIES RTS , , , TOTAL RIGHTS 13,

262 Pictet Funds (LUX) - Pacific (Ex Japan) Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets UNITS OF INVESTMENT FUNDS HONG KONG THE LINK REIT 306, , , NEW ZEALAND KIWI INCOME PROPERTY TRUST 109, , , SINGAPORE SUNTEC REIT 145, , , TOTAL UNITS OF INVESTMENT FUNDS 921, TOTAL I. 156,509, II. OTHER TRANSFERABLE SECURITIES RIGHTS HONG KONG NEW WORLD DEVELOPMENT RTS , , , TOTAL II. 9, TOTAL INVESTMENTS 156,518, CASH AT BANKS 2,542, OTHER NET LIABILITIES -160, TOTAL NET ASSETS 158,900,

263 Pictet Funds (LUX) - Pacific (Ex Japan) Index GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Australia Hong Kong Singapore New Zealand 1.84 Cayman Islands 0.85 Bermuda Industrial classification (in % of net assets) Banks and credit institutions Holding and financial companies 9.90 Real estate 8.95 Mining and steelworks 7.67 Retail and supermarkets 5.69 Construction and building materials 4.23 Communications 3.90 Utilities 3.87 Transport and freight 3.35 Insurance 2.89 Miscellaneous services 2.54 Oil 2.16 Stainless steel 2.16 Electronics and electrical equipment 2.03 Pharmaceuticals and cosmetics 1.55 Tobacco and alcohol 1.46 Textiles and clothing 1.28 Publishing and graphic arts 1.05 Leisure 1.03 Conglomerates 0.91 Gastronomy 0.90 Miscellaneous trade 0.71 Food and soft drinks 0.69 Construction of machines and appliances 0.69 Precious metals and stones 0.63 Paper and forest products 0.59 Units of investment funds 0.58 Chemicals 0.54 Miscellaneous consumer goods 0.31 Public healthcare and social services 0.18 Photography and optics 0.16 Road vehicles 0.12 Agriculture and fishing 0.08 Computer and office equipment

264 Pictet Funds (LUX) - Telecom STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA TELEKOM AUSTRIA 110, ,948, ,948, CANADA BCE INC W/I 45, ,232, ROGERS COMMUNICATIONS B (USD) 37, ,245, TELUS 56, ,626, TELUS -NVTG , ,115, FRANCE FRANCE TELECOM SA 219, ,091, ,091, GERMANY DEUTSCHE TELEKOM NOM. 233, ,264, ,264, GREECE HELLENIC TELECOMM. ORGANIZATIONS 100, ,010, ,010, ITALY TELECOM ITALIA 795, ,409, TELECOM ITALIA-RNC 763, ,935, ,345, JAPAN KDDI ,302, N. T. T. 1, ,285, NTT DOCOMO INC 1, ,851, ,439, MEXICO AMERICA MOVIL ADR (R.20 SHS L ) 33, ,487, ,487, NETHERLANDS KPN KONINKLIJKE 351, ,996, ,996, NEW ZEALAND TELECOM CORP. OF NEW ZEALAND 927, ,176, ,176, NORWAY TELENOR 254, ,807, ,807, PORTUGAL PORTUGAL TELECOM NOM. 81, ,053, ,053, RUSSIA MOBILE TELESYS ADR (R.20 SHS) 33, ,712, ,712,

265 Pictet Funds (LUX) - Telecom STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SINGAPORE SINGAPORE TELECOMMUNICATIONS 1,377, ,947, ,947, SPAIN TELEFONICA S.A. 684, ,570, ,570, SWEDEN TELIASONERA 446, ,737, ,737, SWITZERLAND SWISSCOM NOM. 10, ,033, ,033, UNITED KINGDOM BT GROUP 977, ,875, VODAFONE GROUP (NEW) 5,531, ,409, ,284, UNITED STATES ALLTEL 76, ,453, AMERICAN TOWER A 108, ,994, AT & T (NEW) 443, ,746, BELLSOUTH 167, ,853, EMBARQ -WHEN ISSUED- 48, ,548, EQUINIX 21, ,614, SPRINT 351, ,734, VERIZON COMMUNICATIONS 407, ,221, WINDSTREAM W-ISSUED 112, ,569, ,737, TOTAL I. 158,761, II. OTHER TRANSFERABLE SECURITIES SHARES FRANCE X & MAIL (STE DES COLLABORATEURS) 29, PORTUGAL KIWI II VENT. PREF. A LIB % SWEDEN WIRELESS HOUSE A 8, SWITZERLAND ALBERT-INC 1, UNITED STATES IBIQUITY DIGITAL A 23, , , TOTAL SHARES 23,

266 Pictet Funds (LUX) - Telecom STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets RIGHTS UNITED KINGDOM VODAFONE GROUP RTS ,252, , , TOTAL RIGHTS 288, BONDS CANADA 10% HIGHPOINT TEL. II CV 00/04 188, TOTAL BONDS TOTAL II. 312, TOTAL INVESTMENTS 159,073, CASH AT BANKS 4,332, OTHER NET LIABILITIES -549, TOTAL NET ASSETS 162,857,

267 Pictet Funds (LUX) - Telecom GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States United Kingdom Spain 8.95 Japan 5.19 Canada 3.76 France 3.74 Netherlands 3.07 Norway 2.95 Italy 2.67 Germany 2.62 Switzerland 2.48 Sweden 2.30 New Zealand 1.95 Greece 1.85 Austria 1.81 Singapore 1.81 Russia 1.05 Mexico 0.91 Portugal Industrial classification (in % of net assets) Communications Electronics and electrical equipment 4.33 Internet, software and IT services

268 Pictet Funds (LUX) - Biotech STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES CANADA CARDIOME PHARMA (USD) 1,700, ,924, ,924, DENMARK GENMAB 690, ,359, NOVO-NORDISK B 1,101, ,242, ,602, SWITZERLAND SPEEDEL HOLDING 134, ,186, ,186, UNITED STATES ACHILLION PHARMACEUTICALS 635, ,787, ALEXION PHARMACEUTICALS 2,035, ,241, ALNYLAM PHARMA 622, ,435, AMGEN 1,419, ,300, AMYLIN PHARMACEUTICALS 2,292, ,677, BIOGEN IDEC 1,160, ,278, CELGENE 2,708, ,170, COTHERIX 1,507, ,257, CV THERAPEUTICS 3,102, ,562, DYNAVAX TECHNOLOGIES 2,075, ,112, GENZYME (GENERAL DIVISION) 1,975, ,800, GILEAD SCIENCES 2,017, ,848, HUMAN GENOME SCIENCES 4,610, ,769, ICOS 2,584, ,275, ILLUMINA 1,918, ,149, INTERMUNE 2,857, ,789, INVITROGEN 999, ,941, KERYX BIOPHARMACEUTICALS 1,513, ,256, MEDICINES 2,364, ,189, MEDIMMUNE 1,779, ,633, MILLENNIUM PHARMACEUTICALS 3,236, ,794, ONYX PHARMACEUTICALS 2,709, ,345, OSI PHARMACEUTICALS 1,211, ,263, PHARMION 1,835, ,438, PROGENICS PHARM 1,800, ,978, SIRNA THERAPEUTICS 1,613, ,954, TANOX 2,752, ,777, ,630,030, TOTAL I. 1,803,743,

269 Pictet Funds (LUX) - Biotech STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES SHARES UNITED STATES INTARCIA THERAPEUTICS CV. PREF. C 879, , INTARCIA THERAPEUTICS PREF. E 2,518, , METABOLEX PREF. A1 17, , METABOLEX PREF. B1 1,517, ,235, PTC THERAPEUTICS PREF. C 395, , PTC THERAPEUTICS PREF. D 303, , ,735, TOTAL SHARES 6,735, UNITS OF INVESTMENT FUNDS UNITED STATES PTC THERAPEUTICS PREF. CV E-2 35, , , TOTAL UNITS OF INVESTMENT FUNDS 259, TOTAL II. 6,994, TOTAL INVESTMENTS 1,810,738, CASH AT BANKS 60,367, OTHER NET LIABILITIES -8,620, TOTAL NET ASSETS 1,862,485,

270 Pictet Funds (LUX) - Biotech GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Denmark 7.39 Canada 1.02 Switzerland Industrial classification (in % of net assets) Pharmaceuticals and cosmetics Biotechnology Chemicals 8.38 Miscellaneous services 1.08 Holding and financial companies 0.92 Units of investment funds

271 Pictet Funds (LUX) - Premium Brands STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BAHAMAS STEINER LEISURE 43, ,469, ,469, BERMUDA ORIENT EXPRESS HOTELS A 44, ,597, PORTS DESIGN 505, , ,436, DENMARK BANG & OLUFSEN B 12, ,259, ,259, FRANCE CLARINS 11, , DIOR CHRISTIAN 28, ,329, HERMES INTERNATIONAL 12, ,218, INTER PARFUMS 18, , LAURENT PERRIER 11, , LVMH 26, ,094, PERNOD-RICARD 13, ,286, REMY COINTREAU 25, ,228, ,315, GERMANY PORSCHE PREF. 1, ,583, PUMA 4, ,463, ,046, ITALY BULGARI 129, ,386, DAVIDE CAMPARI 150, ,138, LUXOTTICA GROUP 97, ,294, TOD S GROUP 31, ,923, VALENTINO FASHION GROUP 74, ,294, ,038, JAPAN ASICS CORP 158, ,508, SHISEIDO 93, ,532, ,041, SPAIN SOL MELIA 72, ,085, ,085, SWITZERLAND CIE FINANCIERE RICHEMONT UNIT A 54, ,403, DUFRY 12, , KUONI REISEN HOLDING NOM. B 3, ,567, LINDT & SPRUENGLI NOM ,651, THE SWATCH GROUP 12, ,033, ,420,

272 Pictet Funds (LUX) - Premium Brands STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets UNITED KINGDOM BURBERRY GROUP 141, ,360, DIAGEO 157, ,368, ,729, UNITED STATES BROWN FORMAN B N-VTG 27, ,359, COACH 68, ,279, HARLEY DAVIDSON 29, ,578, HILTON HOTELS 48, ,313, MARRIOTT INTERNATIONAL A 54, ,983, NIKE B 20, ,574, OAKLEY 58, , PHILLIPS-VAN HEUSEN 54, ,103, POLO RALPH LAUREN A 38, ,273, SOTHEBY S HOLDINGS A LTD. VTG 48, ,151, STARWOOD HOTELS & RESORTS 41, ,996, TIFFANY & CO 37, ,136, WARNACO GROUP A 37, , ,366, TOTAL INVESTMENTS 65,209, CASH AT BANKS 2,717, OTHER NET LIABILITIES -295, TOTAL NET ASSETS 67,631,

273 Pictet Funds (LUX) - Premium Brands GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States France Italy Switzerland United Kingdom 5.52 Japan 4.50 Germany 4.50 Bermuda 3.60 Bahamas 2.17 Denmark 1.86 Spain Industrial classification (in % of net assets) Textiles and clothing Gastronomy Tobacco and alcohol Miscellaneous consumer goods 9.39 Road vehicles 4.67 Holding and financial companies 4.63 Pharmaceuticals and cosmetics 4.23 Food and soft drinks 3.66 Photography and optics 3.40 Watch-making 3.01 Transport and freight 2.32 Electronics and electrical equipment 1.86 Miscellaneous services 1.70 Retail and supermarkets

274 Pictet Funds (LUX) - Water STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA ANDRITZ 208, ,297, BWT AG BEST WATER 779, ,441, CHRIST WATER TECHNOLOGY 1,519, ,943, OESTER. ELEKTR. WIRT. A 462, ,692, ,375, BRAZIL SABESP 126,165, ,142, ,142, CANADA BIOTEQ ENVIRONMENTAL TECHN. 5,570, ,674, CANADIAN HYDRO DEVELOPERS 6,220, ,256, H2O INNOVATION , , PURE TECHNOLOGIES 2,219, ,759, STANTEC 2,647, ,905, ,869, CAYMAN ISLANDS CONSOLIDATED WATER 746, ,851, ,851, FINLAND FORTUM 2,453, ,428, KEMIRA 809, ,631, ,059, FRANCE DANONE GROUPE (CHF) 1,188, ,630, SECHE ENVIRONNEMENT 219, ,631, SUEZ 3,319, ,986, VEOLIA ENVIRONNEMENT 4,180, ,099, ,347, GERMANY TECHEM 284, ,877, ,877, HONG KONG GUANGDONG INVESTMENT 82,378, ,240, ,240, ITALY ACEA 3,222, ,312, HERA 17,343, ,817, IRIDE 5,583, ,825, ,955, JAPAN DAISEKI 2,199, ,015, EBARA 4,565, ,301, KURITA WATER INDUSTRIES 1,853, ,429,

275 Pictet Funds (LUX) - Water STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets ORGANO 3,471, ,236, TOTO 2,128, ,206, TSUKISHIMA KIKAI 1,225, ,124, ,313, SPAIN AGUAS DE BARCELONA 1,771, ,870, AGUAS DE BARCELONA EM.06 14, , FOMENTO CONSTRUCCIONES CONTRATAS 843, ,330, ,583, SWITZERLAND BKW FMB ENERGIE NOM. 255, ,609, CIBA SPECIALITES CHIM. HOLD. NOM. 580, ,321, GEBERIT NOM. 62, ,746, NESTLE NOM. 497, ,047, ,725, UNITED KINGDOM BIFFA 6,285, ,929, KELDA GROUP 5,177, ,727, NORTHUMBRIAN WATER 2,913, ,368, PENNON GROUP (NEW) 7,525, ,230, PLANT HEALTH CARE 3,972, ,088, SEVERN TRENT (NEW) 4,640, ,161, TEG ENVIRONMENTAL 3,578, ,237, UNITED UTILITIES 7,594, ,633, ,376, UNITED STATES ALLIED WASTE INDUSTRIES 3,934, ,251, AMERICAN STATES WATER 472, ,903, AQUA AMERICA 3,746, ,656, BASIN WATER 198, ,023, CADIZ 694, ,060, CALGON CARBON 3,138, ,584, CALIFORNIA WATER SERVICE 523, ,007, CATALYTIC SOLUTION 6,350, ,635, CLARCOR 536, ,064, COVANTA HOLDING 364, ,008, DANAHER 505, ,078, DIONEX 1,259, ,848, DONALDSON 1,095, ,164, FLEXIBLE SOLUTIONS 1,010, ,608, HENDRX 1,986, , INSTITUFORM TECHNOLOGIES A 1,351, ,709, ITT INDUSTRIES 3,293, ,686, LINDSAY MANUFACTURING 598, ,136, MIDDLESEX WATER 279, ,961, MILLIPORE 983, ,766, NALCO HOLDING 1,859, ,124, PALL 1,328, ,244, PENNICHUCK 366, ,638, PENTAIR 2,073, ,500, PERMA FIX ENVIRONNEMENTAL SERVICE 4,330, ,496,

276 Pictet Funds (LUX) - Water STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets REPUBLIC SERVICES 920, ,528, ROPER INDUSTRIES 1,132, ,447, SOUTHWEST WATER 1,246, ,660, TETRA TECH 2,083, ,990, TORO 546, ,705, WASTE CONNECTIONS 451, ,274, WASTE MANAGEMENT 4,387, ,429, WATTS WATER TECHNOLOGIES 910, ,500, YORK WATER 223, ,056, ,177, TOTAL I. 2,824,895, II. OTHER TRANSFERABLE SECURITIES SHARES CHILE INVERSIONES AGUAS MET. -ADR-REG. S 1,659, ,790, ,790, TOTAL SHARES 30,790, WARRANTS CANADA BIOTEQ ENV.WRT , , , UNITED STATES FLEXIBLE SOLUTIONS WRT , , , TOTAL WARRANTS 295, TOTAL II. 31,085, TOTAL INVESTMENTS 2,855,981, CASH AT BANKS 97,526, OTHER NET LIABILITIES -11,253, TOTAL NET ASSETS 2,942,254,

277 Pictet Funds (LUX) - Water GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States France United Kingdom Switzerland 8.83 Japan 4.77 Italy 4.01 Spain 3.89 Austria 3.39 Canada 2.72 Finland 2.24 Chile 1.05 Hong Kong 0.96 Germany 0.54 Cayman Islands 0.50 Brazil Industrial classification (in % of net assets) Utilities (including production and distribution of water)

278 Pictet Funds (LUX) - Indian Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES INDIA ANDHRA BANK DEMAT. 3,040, ,958, ASSOCIATED CEMENT DEMAT. 980, ,057, BALAJI TELEFILMS -DEMAT.- 187, , BANK OF BARODA DEMAT. 1,705, ,249, BHARAT HEAVY ELECTRICALS DEMAT. 506, ,291, BHARTI TELE-VENTURE 1,800, ,618, CANARA BANK DEMAT. 1,763, ,003, CIPLA -DEMATERIALISED- 1,480, ,404, CROMPTON GREAVES DEMAT. 2,100, ,906, DEVELOPMENT CREDIT BANK 2,600, ,318, DHAMPUR SUGAR MILLS DEMAT. 1,355, ,863, DR REDDY S LABORATORIES DEMAT. 1,200, ,993, FEDERAL BANK 600, ,970, GATEWAY DISTRIPARKS 1,236, ,790, GLAXOSMITHKLINE PHARMA. DEMAT. 50, ,313, GLENMARK PHARMACEUTICALS 467, ,372, HDFC BANK DEMAT. 342, ,256, HINDUSTAN LEVER DEMAT. 4,200, ,534, HOUSING DEV. FINANCE DEMAT. 379, ,956, ICICI BANK ADR (R.2 SHS) 150, ,367, ICICI BANK DEMAT. 2,500, ,354, INDIA CEMENTS DEMAT. 5,000, ,541, INFOSYS TECHNOLOGIES DEMAT. 1,109, ,194, ITC DEMAT. 1,920, ,641, IVRCL INFRASTRUCTURES DEMAT. 1,000, ,697, LARSEN & TOUBRO DEMAT. 540, ,640, MARUTI UDYOG DEMAT. 299, ,287, NAGARJUNA CONSTRUCTION -DEMATER.- 1,000, ,856, OIL & NATURAL GAS DEMAT. 1,500, ,528, PARSVNATH DEVELOPERS (DEMAT.) 113, ,182, RANBAXY LABORATORIES DEMAT. 900, ,966, RELIANCE COMM. VENTURE -DEMAT- 1,403, ,953, RELIANCE INDUSTRIES 1,870, ,662, SATYAM COMPUTER SERVICES DEMAT. 4,800, ,423, STATE BANK OF INDIA DEMAT. 500, ,071, STATE BANK OF INDIA GDR (R.1 SHS) 30, ,194, TATA MOTORS DEMAT. 1,600, ,281, TECH MAHINDRA DEMAT 54, ,075, UTI BANK -DEMATERIALISED- 1,300, ,792, WIPRO DEMAT 606, ,299, ,408, PAKISTAN OIL & GAS GDR (REP 1 SH) 337, ,509, ,509,

279 Pictet Funds (LUX) - Indian Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets UNITED KINGDOM ISHAAN REAL ESTATE 4,000, ,200, ,200, TOTAL INVESTMENTS 640,119, CASH AT BANKS 5,699, OTHER NET LIABILITIES -3,412, TOTAL NET ASSETS 642,406,

280 Pictet Funds (LUX) - Indian Equities GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) India United Kingdom 1.28 Pakistan Industrial classification (in % of net assets) Banks and credit institutions Electronics and electrical equipment Construction and building materials Pharmaceuticals and cosmetics Chemicals 8.35 Computer and office equipment 8.16 Communications 6.32 Road vehicles 6.01 Holding and financial companies 4.89 Mining and steelworks 4.60 Internet, software and IT services 1.61 Tobacco and alcohol 1.19 Utilities 1.01 Miscellaneous trade 0.90 Food and soft drinks 0.45 Publishing and graphic arts

281 Pictet Funds (LUX) - Japanese Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES JAPAN A&D 213, ,642, AHRESTY 189, ,766, AISIN SEIKI 160, ,400, ANEST IWATA 564, ,535, AOYAMA TRADING 80, ,600, AREALINK 2, ,166, ARNEST ONE 226, ,246, ASAHI GLASS 950, ,358,500, ASAHI INTECC 24, ,930, BENESSE 40, ,614, CANON 224, ,504,150, CENTRAL SPORTS 32, ,071, CHIBA BANK 550, ,300, CULTURE CONVENIENCE CLUB 201, ,365, DAIFUKU 257, ,358, DAIICHI SANKYO 150, ,000, DAI-ICHI SEIKO 72, ,504, DAIKI ALUMINIUM INDUSTRY 322, ,383, DAIKIN INDUSTRIES 257, ,068,112, DAIWA HOUSE INDUSTRY 600, ,242,000, DENA ,435, DIAMOND LEASE 30, ,200, DISCO 68, ,602, ELPIDA MEMORY 149, ,474, EM SYSTEMS 40, ,495, EXEDY CORP 137, ,015, FP CORP 56, ,095, FUJI MACHINE MFG 322, ,131, FUJIKURA KASEI 362, ,768, FUJIMI 96, ,915, FUJITSU 860, ,240, FUNAI ELECTRIC 64, ,130, FURUKAWA ELECTRIC 742, ,016, GAKUJO 36, ,382, HAMAMATSU PHOTONICS 120, ,743, HIOKI E.E. 141, ,094, HITACHI KOKI 161, ,510, HITACHI METALS 282, ,528, HOKURIKU ELECTRIC INDUSTRY CO 1,370, ,932, HONDA MOTOR 400, ,880,000, HORIBA 112, ,646, I LOGISTICS 120, ,327, IBIDEN 112, ,244, IBJ LEASING COMPANY 24, ,110, IMASEN ELECTRIC INDUSTRIAL 104, ,093, INTERNET INITIATIVE JAPON ,827, IRISO ELECTRONICS 128, ,205, ISUZU MOTORS 1,088, ,432,

282 Pictet Funds (LUX) - Japanese Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets ITOCHU 1,300, ,270,100, ITOCHU TECHNO-SCIENCE 20, ,588, JAPAN AVIATION ELECTRONICS 354, ,458, JAPAN REAL ESTATE INVESTMENT REIT ,000, JAPAN TOBACCO 1, ,000, JAPAN CARLIT 201, ,817, JAPON PILE 80, ,143, JP RETAIL FUND INVESTMENT ,000, JSR 40, ,161, JUPITER TELECOMMUNICATIONS 4, ,997, KANSAI PAINT 362, ,766, KANTO DENKA KOGYO 483, ,769, KEIO ELECTRIC RAILWAY 1,000, ,000, KEYENCE 33, ,170, KIKUCHI 31, ,047, KINTETSU WORLD EXPRESS 124, ,156, KITAGAWA IRON WORKS 1,169, ,996, KOATSU GAS KOGYO 120, ,041, KOKUSAI CO LTD 87, ,912, KYOWA EXEO 1,012, ,231,373, LAND CO ,794, MARUI 429, ,452, MATSUSHITA ELECTRIC INDUSTRIAL 420, ,500, MEBIX ,311, MEDICEO 120, ,712, MEGACHIPS 40, ,416, MIRAIAL CO 16, ,300, MITSUBISHI ELECTRIC 1,000, ,086,000, MITSUBISHI TOKYO FINANCIAL GROUP 2, ,454,498, MIZUHO FINANCIAL GROUP 1, ,445,000, N. T. T. 4, ,344,000, NETUREN 398, ,278, NHK SPRING 278, ,970, NIDEC 152, ,398,400, NIHON AIM 1, ,372, NIHON PARKERIZING 266, ,708, NIKKO CORDIAL 900, ,228,500, NIPPON CARBON 967, ,761, NIPPON CHEMI-CON 644, ,605, NIPPON ELECTRIC GLASS 80, ,561, NIPPON SEIKI 40, ,471, NIPPON STEEL 1,770, ,210,680, NIPPONKOA INSURANCE 1,300, ,254,500, NISSAN MOTOR 1,300, ,862,900, NITTAN VALVE 20, ,029, NOMURA RESEARCH INSTITUTE 80, ,380,800, OBAYASHI 800, ,600, OHARA 88, ,664, OKINAWA ELECTRIC POWER 88, ,856, PACIFIC GOLF GROUP INTERNAT.HOLD ,459, PANAHOME 403, ,397, PARK24 548, ,075,

283 Pictet Funds (LUX) - Japanese Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets RASA INDUSTRIES 443, ,735, RESORT TRUST 104, ,108, RICOH CO LTD 550, ,336,500, RICOH LEASING 214, ,114, RISA PARTNERS ,200, ROHM 100, ,185,000, RYOBI 403, ,603, RYOHIN KEIKAKU 76, ,763, SANKEN ELECTRIC 306, ,061, SEKISUI CHEMICAL 580, ,420, SEVEN & I HOLDINGS CO LTD 280, ,036,000, SHIKOKU CHEMICALS 524, ,669, SHINWA , SHIONOGI & CO 40, ,330, SHOEI 98, ,263, SHOWA DENKO 1,531, ,529, SOHKEN HOMES 1, ,712, STANLEY ELECTRIC 80, ,289, SUMCO 56, ,757, SUMITOMO CHEMICAL 1,370, ,264,510, SUMITOMO METAL MINING 161, ,226, SUMITOMO MITSUI FINANCIAL GROUP 2, ,538,000, SUMITOMO REAL ESTATE 8, ,965, SURUGA BANK 185, ,332, TAKEDA PHARMACEUTICAL 270, ,205,900, TEIJIN 1,500, ,099,500, TELEWAVE ,516, TOHO 80, ,342, TOKAI RIKA 193, ,300, TOKUYAMA 322, ,365, TOKYO ICHIBAN FOODS ,023, TOPCON CORP 322, ,706, TOSOH 1,500, ,000, TOYOTA MOTOR CORP 450, ,582,000, TOYOTA TSUSHO CORP 56, ,034, TSUBAKIMOTO KOGYO 1,007, ,574, TSURUHA HOLDINGS (NEW) 60, ,921, UNION TOOL 100, ,183, URBAN 200, ,200, WACOM 1, ,129, WEST JAPAN RAILWAY 2, ,170,700, Y.A.C 80, ,879, YOKOWO 282, ,544, ,802,288, TOTAL I. 87,802,288,

284 Pictet Funds (LUX) - Japanese Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES SHARES JAPAN L CO 8, TOTAL II TOTAL INVESTMENTS 87,802,288, CASH AT BANKS 1,936,274, OTHER NET LIABILITIES -332,218, TOTAL NET ASSETS 89,406,344,

285 Pictet Funds (LUX) - Japanese Equities GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Japan Industrial classification (in % of net assets) Electronics and electrical equipment Road vehicles Chemicals Holding and financial companies 8.01 Banks and credit institutions 7.17 Construction of machines and appliances 6.76 Computer and office equipment 4.88 Construction and building materials 3.92 Communications 3.26 Real estate 2.77 Watch-making 2.65 Transport and freight 2.62 Miscellaneous trade 1.82 Retail and supermarkets 1.65 Stainless steel 1.60 Textiles and clothing 1.55 Insurance 1.40 Aluminium 1.35 Miscellaneous services 1.10 Internet, software and IT services 1.03 Photography and optics 0.85 Utilities 0.73 Tobacco and alcohol 0.64 Pharmaceuticals and cosmetics 0.51 Gastronomy 0.48 Packaging 0.29 Miscellaneous consumer goods 0.26 Leisure 0.19 Public healthcare and social services 0.19 Tyres and rubber

286 Pictet Funds (LUX) - US Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BAHAMAS STEINER LEISURE 17, , , BERMUDA COOPER INDUSTRIES A 3, , , CANADA ADDAX PETROLEUM 24, , AIR CANADA A 29, , FIRST URANIUM 45, , ,456, GUERNSEY AMDOCS 14, , , UNITED STATES ACTIVISION 27, , AGILENT TECHNOLOGIES 10, , AMBAC FINANCIAL GROUP 8, , AMGEN 10, , ARMOR HOLDINGS 4, , AT & T (NEW) 12, , BANK OF NEW YORK 20, , BEACON ROOFING SUPPLY 16, , BEST BUY 6, , CAPITAL ONE FINANCIAL 8, , CARLISLE COS 4, , CBRL GROUP 16, , CBS B 26, , CISCO SYSTEMS INC 21, , CIT GROUP 5, , CITIGROUP 18, ,005, CITRIX SYSTEMS 8, , CLOROX 7, , COCA-COLA 13, , CORNING (USD) 16, , COVANTA HOLDING 19, , DAVITA 10, , DELL INC 10, , EL PASO 66, ,011, EQUIFAX 8, , EQUITABLE RESOURCES INC. 11, , EXELON 10, , EXXON MOBIL 9, , FANNIE MAE 5, , GENERAL ELECTRIC 31, ,177, GOODRICH PETROLEUM 8, , HANOVER INSURANCE 13, , HARTFORD FINANCIAL SERVICES GROUP 3, ,

287 Pictet Funds (LUX) - US Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets HOME DEPOT 11, , HOUSTON WIRE & CABLE 13, , IMS HEALTH 21, , INTEL CORP 25, , INTERSIL A 14, , INTL BUSINESS MACHINES CORP 6, , ITT INDUSTRIES 5, , JOHNSON & JOHNSON 9, , MEREDITH 7, , MICROSOFT CORP 20, , MORGAN STANLEY 7, , NALCO HOLDING 30, , NIKE B 3, , PFIZER INC 24, , PMC SIERRA 46, , PROCTER & GAMBLE (USD) 11, , SCHERING PLOUGH 27, , ST JUDE MEDICAL 8, , SUNTRUST BANKS 4, , WAL-MART STORES INC 12, , WASHINGTON MUTUAL 9, , WINDSTREAM W-ISSUED 16, , WYETH 4, , YAHOO 16, , ,999, TOTAL INVESTMENTS 32,123, CASH AT BANKS 114, OTHER NET LIABILITIES -108, TOTAL NET ASSETS 32,130,

288 Pictet Funds (LUX) - US Equities GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Canada 4.54 Bahamas 2.41 Guernsey 1.73 Bermuda Industrial classification (in % of net assets) Holding and financial companies Pharmaceuticals and cosmetics 9.89 Computer and office equipment 8.41 Electronics and electrical equipment 8.32 Insurance 5.63 Banks and credit institutions 5.53 Oil 5.39 Communications 5.05 Gastronomy 4.73 Conglomerates 3.66 Utilities 3.31 Retail and supermarkets 2.83 Construction and building materials 2.43 Internet, software and IT services 2.23 Biotechnology 2.22 Food and soft drinks 2.04 Miscellaneous services 1.81 Miscellaneous consumer goods 1.43 Aeronautics and astronautics 1.38 Publishing and graphic arts 1.26 Mining and steelworks 1.00 Textiles and clothing 0.99 Construction of machines and appliances

289 Pictet Funds (LUX) - Asian Equities (Ex Japan) STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BAHAMAS SHANGAI PUDONG ELN (CS) ,040, ,298, SHANGHAI INT. AIR ELN (CS) ,204, ,931, ,229, BERMUDA HUABAO INTERNATIONAL HOLDINGS 10,095, ,480, PORTS DESIGN 4,042, ,840, ,321, CAYMAN ISLANDS AAC ACOUSTIC TECHNOLOGIES 5,975, ,672, CHINA INFRASTRUCTURE MACHINERY 16,164, ,130, FOCUS MEDIA HOLDING ADR SPONS 144, ,631, FOXCONN INTERNATIONAL 4,255, ,931, GEMS TV HOLDINGS 5,659, ,057, GOLDEN EAGLE RETAIL 3,419, ,039, MELCO PBL ENTERTAINMENT ADR 279, ,885, ,347, CHINA ANGANG NEW STEEL H 7,674, ,254, BANK OF CHINA 33,766, ,547, CHINA COAL ENERGY H 3,853, ,503, CHINA COMMUNICATION CONST. H 6,217, ,150, CHINA CONSTRUCTION BANK H 122,620, ,078, CHINA LIFE INSURANCE H 8,121, ,735, CHINA MERCHANTS BANK H 1,316, ,791, CHINA PETROLEUM & CHEMICAL H 24,777, ,948, CHINA TELECOM H 43,930, ,073, GUANGDONG KELON ELECTR. HOLD. H 13,914, ,593, GUANGZHOU R&H PROP. H (TEMP.TRAD) 4,841, ,462, HUANENG POWER INTL H 15,261, ,644, IND.& COMM.BANK OF CHINA H 56,647, ,195, IRICO GROUP ELECTRONICS H 29,323, ,263, JIANGXI COPPER H 10,251, ,430, PETROCHINA H 32,553, ,146, PING AN INSURANCE (GROUP) 4,549, ,191, ZHUZHOU CSR TIMES H 3,745, ,184, ZTE H 2,096, ,655, ,851, FRANCE SHANGHAI INT. AIRP. ELN (UBS) ,838, ,453, ,453, HONG KONG BOC HONG KONG (HOLDINGS) 8,066, ,894, CHEUNG KONG HOLDINGS 1,538, ,946, CHINA INSURANCE 6,839, ,622, CHINA MOBILE HK 7,643, ,069, CHINA OVERSEAS LAND & INVESTMENT 7,448, ,003,

290 Pictet Funds (LUX) - Asian Equities (Ex Japan) STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets CHINA RESOURCES ENTERPRISE 3,713, ,675, CHINA TRAVEL INTERNATIONAL 17,341, ,666, CHINA UNICOM 7,635, ,196, HENDERSON LAND DEVELOPMENT 2,025, ,334, HONG KONG EXCHANGES AND CLEARING 2,310, ,409, HUTCHISON WHAMPOA 3,385, ,423, HYSAN DEVELOPMENT 3,258, ,531, KOWLOON DEVELOPMENT 5,152, ,146, LI NING 10,198, ,346, PACIFIC CENTURY INSURANCE 4,243, ,516, PCCW 6,276, ,818, SHANGRI-LA ASIA 2,445, ,308, SUN HUNG KAI PROPERTIES 2,424, ,867, SWIRE PACIFIC A 1,870, ,106, ,882, INDIA VOLTAS DEMAT. 1,755, ,549, ,549, INDONESIA BANK CENTRAL ASIA 15,274, ,850, BANK RAKYAT INDONESIA 14,705, ,438, P. T. TELEKOMUNIKASI INDONESIA "B" 12,130, ,652, PT ASTRA INTERNATIONAL 8,044, ,073, PT INDONESIAN SATELLITE 12,499, ,401, SEMEN GRESIK 3,501, ,163, ,580, MALAYSIA COMMERCE ASSET-HOLDING 8,994, ,762, GENTING BERHAD 1,856, ,365, IOI CORPORATION 1,643, ,574, MALAYAN BANKING BHD 4,281, ,323, RHB CAPITAL 9,654, ,360, SIME DARBY BERHAD 5,521, ,269, TENAGA NASIONAL 4,878, ,075, UEM BUILDERS 15,077, ,325, ,056, PHILIPPINES AYALA 772, ,301, BANCO DE ORO UNIVERSAL BANK 8,607, ,079, GLOBE TELECOM 325, ,204, PHILIPPINE LONG DIST. TEL. (PHP) 170, ,850, UNIVERSAL ROBINA 15,832, ,219, ,655, SINGAPORE ALLGREEN PROPERTIES 6,873, ,874, CAPITALAND 3,529, ,274, CITY DEVELOPMENTS 1,160, ,617, DEVELOPMENT BANK SINGAPORE 2,399, ,381, JURONG TECHNOLOGIES INDUSTRIAL 8,740, ,157, KEPPEL 1,188, ,647, MMI HOLDINGS 4,798, ,286,

291 Pictet Funds (LUX) - Asian Equities (Ex Japan) STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SINGAPORE PRESS HOLDING 1,918, ,356, SINGAPORE TELECOMMUNICATIONS 5,366, ,481, UNITED OVERSEAS BANK 1,778, ,509, ,588, SOUTH KOREA CJ 121, ,710, DAEWOO ENGINEERING & CONSTRUCTION 301, ,198, DAEWOO HEAVY INDUSTRIES MACHINERY 460, ,451, HAN WHA 263, ,920, HANA FINANCIAL HOLDINGS 290, ,319, HANSOL PAPER 139, ,121, HYUNDAI DEPARTMENT STORE 80, ,288, HYUNDAI DEVELOPMENT CO 195, ,993, KOOKMIN BANK 561, ,274, KT & G CORP 262, ,956, LG CORP 423, ,625, LG ENG. & CONSTRUCTION 82, ,405, LG PHILIPS LCD 304, ,144, NHN 118, ,556, POSCO 94, ,331, SAMSUNG 192, ,342, SAMSUNG ELECTRONICS 158, ,889, SAMSUNG FIRE & MAR. INSUR. 104, ,122, SAMSUNG HEAVY INDUSTRIES 553, ,292, SHINHAN FINANCIAL GROUP 467, ,925, SHINSEGAE 26, ,631, SK CORP 182, ,336, SK TELECOM ADR REPR.1/90 SH 412, ,949, ,788, TAIWAN ARDENTEC 6,640, ,453, ASUSTEK COMPUTER 5,326, ,587, AU OPTRONICS 10,950, ,231, CATCHER TECHNOLOGY 1,733, ,951, CATHAY FINANCIAL 13,767, ,282, CHANG HWA COMMERCIAL BANK 17,367, ,131, CHI MEI OPTOELECTRONIC 4,643, ,705, CHINA STEEL 20,445, ,720, CHINATRUST FINANCIAL HOLDINGS 19,306, ,153, CHUNGHWA TELECOM ADR (R.10 SHS) 675, ,996, COMPAL ELECTRONICS 5,086, ,537, DELTA ELECTRONICS 6,344, ,455, FAR EASTERN TEXTILE 13,572, ,876, FIRST FINANCIAL HLD 8,938, ,792, FORMOSA PETROCHEMICAL 5,489, ,067, FOXCONN TECHNOLOGY 1,484, ,803, FUBON FINANCIAL 13,103, ,271, HIGH TECH COMPUTER , HON HAI PRECISION INDUSTRY 8,640, ,684, INVENTEC 17,528, ,419, MEDIATEK 1,956, ,249, MEGA FINANCIAL HLDG 10,309, ,581,

292 Pictet Funds (LUX) - Asian Equities (Ex Japan) STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets PRESIDENT ENTERPRISES 16,509, ,474, SILICONWARE PRECISION INDUSTRIES 8,254, ,976, SILITECH TECHNOLOGY 2,207, ,997, TAISHIN FINANCIAL HOLDINGS 10,711, ,281, TAIWAN FERTILIZER 5,767, ,032, TAIWAN SEMICONDUCTOR 39,666, ,211, TATUNG 22,852, ,244, TEST-RITE INTL 8,021, ,691, UNITED MICROELECTRONICS 33,090, ,574, YUANTA SECURITIES 15,848, ,163, ,615, THAILAND AAPICO HITECH NVDR 4,627, ,156, ADVANCED INFO SERV. NOM. FGN. 2,471, ,349, BANGKOK BANK PUBLIC CO FGN NOM. 2,766, ,826, BANK OF AYUDHYA NOM. FGN 15,353, ,881, ITALIAN-THAI DEVELOPMENT -FGN- 24,663, ,664, SIAM CEMENT PUBLIC FGN 640, ,514, TRUE FGN 31,544, ,423, ,816, TOTAL SHARES 2,105,736, RIGHTS SINGAPORE ALLGREEN PROPERTIES RTS ,436, ,502, ,502, TOTAL RIGHTS 1,502, UNITS OF INVESTMENT FUNDS CAYMAN ISLANDS VIETNAM ENTERPRISE INVEST. C NEW 3,498, ,023, ,023, TOTAL UNITS OF INVESTMENT FUNDS 4,023, TOTAL I. 2,111,261, II. OTHER TRANSFERABLE SECURITIES RIGHTS UNITED KINGDOM HSBC HOLDING RTS , , , TOTAL RIGHTS 87,

293 Pictet Funds (LUX) - Asian Equities (Ex Japan) STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets UNITS OF INVESTMENT FUNDS CAYMAN ISLANDS VIETNAM ENTERPRISE INVESTMENTS 2,358, ,078, VIETNAM GROWTH FUND 297, ,174, ,252, TOTAL UNITS OF INVESTMENT FUNDS 15,252, WARRANTS UNITED KINGDOM CHINA MERCHANT (GS).WTS ,658, ,666, ,666, TOTAL WARRANTS 7,666, TOTAL II. 23,006, TOTAL INVESTMENTS 2,134,268, CASH AT BANKS 6,052, OTHER NET LIABILITIES -7,740, TOTAL NET ASSETS 2,132,580,

294 Pictet Funds (LUX) - Asian Equities (Ex Japan) GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Taiwan South Korea China Hong Kong Singapore 6.06 Malaysia 4.79 Cayman Islands 3.84 Indonesia 3.22 Philippines 1.91 Thailand 1.76 Bahamas 0.86 Bermuda 0.67 United Kingdom 0.36 India 0.21 France Industrial classification (in % of net assets) Electronics and electrical equipment Banks and credit institutions Holding and financial companies 9.58 Communications 9.43 Real estate 4.65 Oil 4.48 Insurance 3.85 Construction of machines and appliances 3.73 Retail and supermarkets 3.72 Mining and steelworks 3.14 Computer and office equipment 2.12 Food and soft drinks 1.75 Gastronomy 1.66 Conglomerates 1.47 Utilities 1.35 Construction and building materials 1.29 Chemicals 0.99 Internet, software and IT services 0.94 Units of investment funds 0.91 Tobacco and alcohol 0.75 Pharmaceuticals and cosmetics 0.64 Textiles and clothing 0.56 Miscellaneous trade 0.51 Transport and freight 0.50 Stainless steel 0.49 Miscellaneous services 0.45 Agriculture and fishing 0.40 Warrants 0.36 Publishing and graphic arts 0.25 Precious metals and stones 0.24 Packaging 0.14 Paper and forest products 0.10 Miscellaneous consumer goods

295 Pictet Funds (LUX) - Global Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BELGIUM GROUPE DELHAIZE 37, ,159, ,159, CANADA ADDAX PETROLEUM 43, ,222, AIR CANADA A 102, ,549, ,771, FINLAND NOKIA OYJ 92, ,890, ,890, FRANCE CIE GENERALE DE GEOPHYSIQUE 8, ,726, SAINT GOBAIN 18, ,550, TOTAL SA 12, , UBISOFT ENTERTAINMENT 81, ,751, ,959, GERMANY GEA GROUP 50, ,116, SIEMENS NOM. 18, ,787, ,904, GREECE COCA COLA HELLENIC BOTTLING 41, ,604, ,604, HONG KONG WHARF HOLDINGS 775, ,866, ,866, JAPAN CSK 32, ,393, HONEYS 31, ,165, IBIDEN 31, ,590, NINTENDO 8, ,236, SECURED CAPITAL JAPAN ,021, SHINSEI BANK 305, ,796, SONY 41, ,776, SQUARE ENIX 64, ,682, ,663, NETHERLANDS AERCAP HOLDINGS 70, ,589, ,589, NORWAY STEPSTONE A 300, , , SPAIN CINTRA , ,

296 Pictet Funds (LUX) - Global Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SWITZERLAND BIOPETROL INDUSTRIES 95, ,107, CIE FINANCIERE RICHEMONT UNIT A 18, ,073, KUONI REISEN HOLDING NOM. B 2, ,359, ,539, TAIWAN CATHAY FINANCIAL 959, ,179, ,179, UNITED KINGDOM BRITISH SKY BROADCASTING GROUP 184, ,887, GLAXOSMITHKLINE PLC 167, ,409, INVISTA REAL ESTATE INVESTMENT M. 646, ,497, NDS GROUP A SPONS. ADR 27, ,296, PRUDENTIAL 117, ,619, STANDARD CHARTERED (GBP) 51, ,495, ,205, UNITED STATES AMBAC FINANCIAL GROUP 35, ,185, AMGEN 33, ,302, BANK OF NEW YORK 66, ,634, BEACON ROOFING SUPPLY 48, , BEST BUY 41, ,068, CAPITAL ONE FINANCIAL 16, ,272, CISCO SYSTEMS INC 115, ,167, COCA-COLA 64, ,140, EL PASO 256, ,911, EQUITABLE RESOURCES INC. 24, ,047, EXELON 33, ,094, GENERAL ELECTRIC 91, ,433, HANOVER INSURANCE 36, ,789, HOUSTON WIRE & CABLE 48, ,008, IMS HEALTH 55, ,528, INTERSIL A 65, ,574, MICROSOFT CORP 50, ,499, MORGAN STANLEY 23, ,883, PMC SIERRA 202, ,362, SCHERING PLOUGH 97, ,317, SOUTHWEST AIRLINES 96, ,502, WAL-MART STORES INC 41, ,914, ,565, TOTAL SHARES 100,600,

297 Pictet Funds (LUX) - Global Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets RIGHTS SPAIN CINTRA RTS TOTAL RIGHTS TOTAL INVESTMENTS 100,600, CASH AT BANKS 4,208, OTHER NET LIABILITIES -410, TOTAL NET ASSETS 104,398,

298 Pictet Funds (LUX) - Global Equity Selection GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Japan United Kingdom France 6.67 Switzerland 3.39 Belgium 3.03 Germany 2.78 Hong Kong 2.75 Canada 2.65 Taiwan 2.09 Finland 1.81 Greece 1.54 Netherlands 1.52 Norway 0.66 Spain Industrial classification (in % of net assets) Holding and financial companies Electronics and electrical equipment 7.74 Retail and supermarkets 6.84 Pharmaceuticals and cosmetics 6.45 Insurance 6.31 Communications 6.19 Food and soft drinks 4.55 Computer and office equipment 4.47 Internet, software and IT services 4.25 Banks and credit institutions 4.13 Oil 3.71 Conglomerates 3.29 Aeronautics and astronautics 3.00 Transport and freight 2.75 Real estate 2.75 Utilities 2.46 Construction and building materials 2.38 Biotechnology 2.21 Miscellaneous consumer goods 2.14 Textiles and clothing 1.12 Stainless steel 1.07 Chemicals 1.06 Construction of machines and appliances 0.97 Publishing and graphic arts

299 Pictet Funds (LUX) - Continental European Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA RAIFFEISEN INT. BANK-HOLDING 18, ,109, ,109, BELGIUM AGFA-GEVAERT 48, , GROUPE DELHAIZE 30, ,946, ,872, FRANCE BULL (NEW) 145, , FRANCE TELECOM SA 40, , PERNOD-RICARD 11, ,990, PUBLICIS 29, , SANOFI AVENTIS 45, ,216, SOCIETE GENERALE 15, ,040, TOTAL SA 89, ,918, VALLOUREC USINES A TUBES 4, ,092, VEOLIA ENVIRONNEMENT 45, ,417, VINCI 19, ,899, ,259, GERMANY ALLIANZ NOM. 21, ,370, B. M. W. 37, ,659, BAYER (EUR) 50, ,063, CONTINENTAL GUMMIWERKE 23, ,109, DEUTSCHE POST AG-REG 89, ,055, FRESENIUS MEDICAL CARE 19, ,012, GEA GROUP 84, ,428, HENKEL PREF. N-VTG 12, ,417, HYPO REAL ESTATE 56, ,687, KLOECKNER & CO. 43, ,412, PORSCHE PREF. 1, ,500, WINCOR NIXDORF 9, ,125, ,841, GREECE HELLENIC EXCHANGE HOLDING NOM. 68, , HELLENIC TELECOMM. ORGANIZATIONS 82, ,875, NATIONAL BANK OF GREECE 86, ,037, OPAP 46, ,374, ,258, ITALY ASTALDI 347, ,957, CAPITALIA 193, ,376, DANIELI & C.OFF.MECC. RNC 145, ,340, FONDIARIA SAI SPA 72, ,952, MEDIASET 271, ,452, UNICREDITO ITALIANO SPA 511, ,416, ,496,

300 Pictet Funds (LUX) - Continental European Equities STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets NETHERLANDS AKZO NOBEL 34, ,601, AXALTO 87, ,654, NUMICO KONINKLIJKE NV 55, ,235, ,491, NORWAY DNB HOLDING A 170, ,846, PAN FISH 2,359, ,630, STATOIL 101, ,024, TELENOR 174, ,507, ,009, SPAIN BANCO POPULAR ESPANOL 148, ,035, CINTRA 106, ,355, DERMOESTETICA 88, , FOMENTO CONSTRUCCIONES CONTRATAS 14, ,084, TELEFONICA S.A. 183, ,971, ,231, SWEDEN ENIRO 141, ,406, MODERN TIMES GROUP B 46, ,288, VOLVO B 23, ,242, ,937, SWITZERLAND CS GROUP NOM. 40, ,173, JULIUS BAER HOLDING 35, ,947, NOVARTIS AG NOM. 53, ,323, SWISSCOM NOM. 5, ,531, ZURICH FINANCIAL SERVICE-REG (CHF) 13, ,672, ,647, UNITED KINGDOM MITTAL STEEL A 60, ,958, ROYAL DUTCH SHELL A 57, ,535, ,493, TOTAL INVESTMENTS 109,647, CASH AT BANKS 1,049, OTHER NET LIABILITIES -353, TOTAL NET ASSETS 110,344,

301 Pictet Funds (LUX) - Continental European Equities GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Germany France Italy Switzerland Spain 7.46 Norway 7.25 Greece 6.59 Netherlands 4.98 Sweden 4.47 United Kingdom 3.16 Belgium 2.60 Austria Industrial classification (in % of net assets) Banks and credit institutions Communications Holding and financial companies 8.50 Oil 7.69 Pharmaceuticals and cosmetics 6.85 Insurance 4.83 Electronics and electrical equipment 4.79 Chemicals 4.60 Construction and building materials 4.47 Road vehicles 3.99 Transport and freight 3.09 Construction of machines and appliances 2.20 Environmental conservation and waste management 2.19 Publishing and graphic arts 2.11 Food and soft drinks 2.03 Tyres and rubber 1.91 Tobacco and alcohol 1.80 Mining and steelworks 1.77 Retail and supermarkets 1.76 Agriculture and fishing 1.48 Stainless steel 1.29 Miscellaneous trade 1.28 Gastronomy 1.25 Photography and optics 0.84 Computer and office equipment 0.81 Public healthcare and social services

302 Pictet Funds (LUX) - Greater China STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BERMUDA HOPSON DEVELOPMENT HOLDINGS 1,310, ,708, HUABAO INTERNATIONAL HOLDINGS 39,054, ,200, ,908, CAYMAN ISLANDS MELCO PBL ENTERTAINMENT ADR , VST HOLDINGS 15,667, ,567, ,571, CHINA BEIJING CAPITAL INTL AIRPORT NOM. 5,767, ,518, CHINA COAL ENERGY H 3,045, ,978, CHINA COMMUNICATION CONST. H 2,692, ,663, CHINA COMMUNICATIONS SERV. H 1,355, , CHINA CONSTRUCTION BANK H 45,067, ,696, CHINA LIFE INSURANCE H 5,444, ,595, CHINA MERCHANTS BANK H 2,519, ,340, CHINA PETROLEUM & CHEMICAL H 6,105, ,654, CHINA SHENHUA ENERGY "H" 2,417, ,821, GREAT WALL AUTO H 4,154, ,013, HUANENG POWER INTL H 5,298, ,736, HUNAN NON-FERROUS METALS H 10,145, ,872, IND.& COMM.BANK OF CHINA H 27,112, ,845, MAANSHAN IRON & STEEL H 3,936, ,162, MINDRAY MEDICAL INT ADR 183, ,533, PETROCHINA H 13,831, ,606, SHANDONG WEIGAO GROUP 9,213, ,813, SHANGHAI ELECTRIC GROUP H 6,825, ,871, SHANGHAI ZHENHUA PORT B 3,993, ,267, SHANXI XISHAN (CS) CRT ,136, ,449, WEICHAI POWER H 1,809, ,390, YANZHOU COAL MINING H 16,888, ,643, ZHAOJIN MINING INDUSTRY H 444, , ZHUZHOU CSR TIMES H 1,726, ,389, ZTE H 1,352, ,226, ,753, HONG KONG ANHUI CANCH CEMENT H 1,650, ,498, ASM PACIFIC TECHNOLOGY 650, ,625, BANK OF EAST ASIA 834, ,730, BOC HONG KONG (HOLDINGS) 2,109, ,725, CHEUNG KONG HOLDINGS 995, ,256, CHINA MOBILE HK 3,930, ,977, CNOOC 5,643, ,364, HENDERSON LAND DEVELOPMENT 749, ,192, HONG KONG AIRCRAFT ENGINEERING 339, ,635, HONG KONG EXCHANGES AND CLEARING 714, ,858, HONGKONG LAND HOLDINGS 1,324, ,272, HUTCHISON WHAMPOA 371, ,775,

303 Pictet Funds (LUX) - Greater China STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets HYSAN DEVELOPMENT 1,205, ,156, LI & FUNG (NEW) 1,437, ,475, LI NING 3,501, ,612, LIFESTYLE INTL 884, ,275, MELCO INTERNATIONAL DEVELOPEMENT 896, ,126, NEW WORLD DEVELOPMENT 3,328, ,704, SUN HUNG KAI PROPERTIES 1,089, ,518, WING LUNG BANK 244, ,568, ,350, TAIWAN ASIA CEMENT 2,506, ,385, ASUSTEK COMPUTER 1,934, ,299, AU OPTRONICS 590, , CATCHER TECHNOLOGY 414, ,048, CATHAY FINANCIAL 2,896, ,580, CHANG HWA COMMERCIAL BANK 4,761, ,325, CHINA STEEL 4,761, ,058, CHINATRUST FINANCIAL HOLDINGS 3,499, ,927, COMPAL COMMUNICATIONS 825, ,685, E. SUN FINANCIAL 3,071, ,131, FAR EASTERN DEPARTMENT STORES 5,700, ,640, FORMOSA INTL HOTELS 535, ,637, HON HAI PRECISION INDUSTRY 3,075, ,957, LES ENPHANTS 1,302, , LITE ON TECHNOLOGY 1,846, ,497, MEDIATEK 407, ,215, NOVATEK MICROELECTRONICS 639, ,894, POLARIS SECURITIES 8,933, ,704, PROMOS TECHNOLOGIES 10,205, ,449, QUANTA COMPUTER 2,661, ,829, SHIN KONG FINANCIAL HOLDING 1,979, ,133, SINOPAC 7,623, ,084, TAISHIN FINANCIAL HOLDINGS 7,234, ,242, TAIWAN FERTILIZER 2,111, ,039, TAIWAN SEMICONDUCTOR 11,646, ,138, WALSIN LIHWA 6,075, ,245, WISTRON CORP 2,647, ,934, YA HSIN INDUSTRIAL 2,330, ,910, YIEH PHUI ENTREPRISE 2,437, ,100, ,915, TOTAL SHARES 482,499, UNITS OF INVESTMENT FUNDS HONG KONG THE LINK REIT 1,783, ,671, ,671, LUXEMBOURG ISHARES MSCI TAIWAN INDEX FUND 915, ,267, ,267,

304 Pictet Funds (LUX) - Greater China STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SINGAPORE CAPITARETAIL CHINA TRUST 621, , , TOTAL UNITS OF INVESTMENT FUNDS 17,789, WARRANTS FRANCE WULIANGYE YIBIN WRT (BNP) ,310, ,564, ,564, NETHERLANDS ANTILLES CHINA MER.BK (ML) LEPO WRT ,947, ,269, YIBIN WULIAN (ML) LEPO.WTS , ,247, ,516, TOTAL WARRANTS 14,080, TOTAL I. 514,369, II. OTHER TRANSFERABLE SECURITIES SHARES CHINA SHANXI XISHAN COAL (BOCI) CPC 06/08 1,041, ,194, ,194, TOTAL SHARES 1,194, RIGHTS HONG KONG NEW WORLD DEVELOPMENT RTS ,328, , , TOTAL RIGHTS 85, WARRANTS UNITED STATES INNER MONG.YI LI (BNP) WRT , ,114, ,114, TOTAL WARRANTS 3,114, TOTAL II. 4,393, TOTAL INVESTMENTS 518,762, CASH AT BANKS 39,172, OTHER NET LIABILITIES -1,494, TOTAL NET ASSETS 556,441,

305 Pictet Funds (LUX) - Greater China GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) China Hong Kong Taiwan Bermuda 4.48 Luxembourg 2.38 Netherlands Antilles 1.89 Cayman Islands 0.64 France 0.64 United States 0.56 Singapore Industrial classification (in % of net assets) Banks and credit institutions Electronics and electrical equipment Holding and financial companies 7.91 Communications 7.37 Oil 5.50 Mining and steelworks 5.32 Real estate 4.66 Internet, software and IT services 4.45 Insurance 3.34 Units of investment funds 3.19 Pharmaceuticals and cosmetics 3.13 Warrants 3.09 Computer and office equipment 2.98 Tobacco and alcohol 2.53 Construction of machines and appliances 2.53 Construction and building materials 1.42 Transport and freight 1.29 Retail and supermarkets 1.11 Stainless steel 1.06 Utilities 0.85 Aeronautics and astronautics 0.83 Chemicals 0.73 Road vehicles 0.72 Gastronomy 0.67 Precious metals and stones 0.20 Miscellaneous consumer goods

306 Pictet Funds (LUX) - Japanese Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES JAPAN AISIN SEIKI 900, ,591,000, AOYAMA TRADING 1,230, ,391,100, ASAHI GLASS 5,500, ,865,000, BANK OF FUKUOKA 8,650, ,508,200, CANON 750, ,025,000, CENTURY LEASING SYSTEM 102, ,202, DAIEI 1,000, ,596,000, DAIMARU 2,200, ,548,600, DAIWA SECURITIES GROUP 5,000, ,675,000, EIGHTEENTH BANK 1,566, ,506, FUJI ELECTRIC HOLDINGS 4,000, ,580,000, FUJITSU 2,350, ,194,900, HASEKO 14,000, ,964,000, HITACHI CHEMICAL 1,930, ,330,400, IBIDEN 420, ,520,000, ISUZU MOTORS 16,000, ,944,000, ITOCHU 8,100, ,913,700, JFE HOLDINGS 1,250, ,662,500, JGC 2,800, ,726,000, KEIHIN ELECTRIC EXPRESS RAILWAY 4,200, ,444,000, KUBOTA 5,700, ,281,400, KYOWA EXEO 2,000, ,432,000, MITSUBISHI ELECTRIC 5,700, ,190,200, MITSUBISHI ESTATE CO LTD 3,200, ,856,000, MITSUBISHI TOKYO FINANCIAL GROUP 10, ,435,000, N. T. T. 11, ,446,000, NHK SPRING 2,000, ,502,000, NIDEC 865, ,958,000, NIPPON MINING HLDG 3,800, ,252,800, NIPPONKOA INSURANCE 4,250, ,101,250, NISSAN MOTOR 7,250, ,389,250, OMRON 1,130, ,819,400, RICOH CO LTD 2,250, ,467,500, ROHM 600, ,110,000, RYOBI 3,500, ,591,000, SEKISUI CHEMICAL 5,100, ,839,900, SHINMAYWA INDUSTRIES 2,300, ,366,200, SMC 420, ,089,600, SOMPO JAPAN INSURANCE 1,700, ,473,500, SUMITOMO CHEMICAL 9,000, ,307,000, SUMITOMO HEAVY INDUSTRIES 5,500, ,875,000, SUMITOMO MITSUI FINANCIAL GROUP 12, ,697,340, SUMITOMO REALTY & DEVELOPMENT 1,900, ,258,000, SUMITOMO RUBBER INDUSTRIES 3,600, ,533,200, SUMITOMO TRUST & BANKING 5,500, ,864,000, TAKEDA PHARMACEUTICAL 1,550, ,663,500, TEIJIN 9,000, ,597,000, TOKYO ELECTRIC POWER 1,800, ,930,000,

307 Pictet Funds (LUX) - Japanese Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets TOYOTA MOTOR CORP 2,400, ,104,000, UNY 2,000, ,100,000, WEST JAPAN RAILWAY 23, ,707,000, YAMADA DENKI 300, ,030,000, YAMAHA MOTOR 1,700, ,358,000, ,188,148, TOTAL INVESTMENTS 324,188,148, CASH AT BANKS 10,943,404, OTHER NET LIABILITIES -1,039,058, TOTAL NET ASSETS 334,092,493,

308 Pictet Funds (LUX) - Japanese Equity Selection GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Japan Industrial classification (in % of net assets) Road vehicles Electronics and electrical equipment Holding and financial companies 9.67 Chemicals 9.62 Banks and credit institutions 9.21 Construction of machines and appliances 7.54 Real estate 5.12 Transport and freight 4.53 Construction and building materials 4.23 Textiles and clothing 3.28 Retail and supermarkets 2.47 Miscellaneous trade 2.37 Watch-making 2.35 Computer and office equipment 2.30 Utilities 2.07 Insurance 1.97 Communications 1.93 Tyres and rubber 1.66 Miscellaneous services

309 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES ARGENTINA PETRO ENERGIA B ADR (R.10 SHS B ) 11, , TELECOM ARGENTINA ADR 7, , , BERMUDA BRILLIANCE CHINA AUTO. HOLD. (HKD) 258, , CREDICORP 3, , , BRAZIL ARACRUZ CELULOSE B PREF. 40, , BANCO BRADESCO PREF. 31, ,258, BANCO ITAU PREF. 34, ,252, BRADESCO SUB.REC.PFD , BRASIL TELECOM PARTICIPACOES PREF. 16,624, , BRASIL TELECOM PATICIPACOES NOM. 4,031, , BRASKEM A PREF. 4, , CEMIG MINAS GERAIS PREF. (LOT 1000) 7,328, , CIA BRASILIERA DE DISTR. PREF. 3,096, , CIA DE BEBIDAS DAS AMERICAS PREF. 1,615, , CIA SIDERURGICA NACIONAL NOM. 10, , CONCESSOES RODOVIARIAS 15, , COPEL PREF. B 11,356, , ELETROBRAS B PREF. 7,707, , ELETROBRAS NOM. 10,066, , EMBRAER EMPRES.BRASIL.AERONAUTICA 34, , GERDAU PREF. 25, , KLABIN 53, , LOJAS AMERICANAS PFD (LOT1000) 3,000, , PETROBRAS PREF. 105, ,448, PETROLEO BRASILEIRO PETROBRAS NOM 77, ,964, SABESP 1,368, , SADIA PREF. 45, , SOUZA CRUZ IND. & COMERCIO NOM. 7, , TELE NORTE LESTE 4, , TELE NORTE LESTE PARTICIPAC. PREF 17, , TELEMIG PARTICIPACOES PREF. 23,407, , TIM PARTICIPACOES PREF. 44,858, , UNIBANCO UNIAO DE BANCOS BRAS. NOM 72, , USIMINAS PREF. A 10, , VALE DO RIO DOCE 46, ,372, VALE DO RIO DOCE PREF. A 65, ,664, VIVO PARTICIPACOES PFD 35, , ,137, CAYMAN ISLANDS SEMICONDUCTOR MANUFACTURING 732, , TCL INTERNATIONAL HOLDINGS 290, , ,

310 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets CHILE BCO SANTANDER CHILE ADR (REP.1039) 6, , ENDESA (CHILE) ADR (R.30 SHS) 14, , ENERSIS ADR (R.50 SHS) 32, , TELECOM. CHILE ADR (4 SHS A ) 22, , ,527, CHINA AIR CHINA H 272, , ALUMINIUM CORP CHINA H 244, , BANK OF CHINA 1,509, , BANK OF COMMUNICATIONS H 391, , BEIJING CAPITAL INTL AIRPORT NOM. 120, , CHINA CONSTRUCTION BANK H 1,623, ,033, CHINA LIFE INSURANCE H 490, ,673, CHINA PETROLEUM & CHEMICAL H 1,134, ,050, CHINA SHIPING CONTAINER LINES 253, , CHINA SHIPPING DEVELOPMENT 138, , CHINA SOUTHERN AIRLINES H 184, , CHINA TELECOM H 950, , DATANG INTERNATIONAL POWER GEN H 136, , FUJIAN ZIJIN MINING 280, , GUANGDONG ELECTRIC POWER B NOM. 92, , GUANGSHEN RAILWAY H 140, , HUADIAN POWER 198, , HUANENG POWER INTL H 242, , IND.& COMM.BANK OF CHINA H 1,916, ,190, JIANGSU EXPRESSWAY H 142, , JIANGXI COPPER H 141, , MAANSHAN IRON & STEEL H 190, , PETROCHINA H 1,254, ,777, PING AN INSURANCE (GROUP) 98, , SINOPEC SHANGHAI PETROCHEMICAL H 234, , SINOPEC YIZHENG H 186, , SINOTRANS H 190, , TRAVELSKY TECHNOLOGY H 29, , YANZHOU COAL MINING H 146, , ZHEJIANG EXPRESSWAY H 152, , ZHEJIANG SOUTH. ELEC. POWER B NOM. 119, , ,610, CZECH REPUBLIC CESKE ENERGETICKE ZAVODY 14, , CESKY TELEKOM 7, , KOMERCNI BANKA 1, , PHILIP MORRIS CR , ,012, EGYPT ORASCOM CONSTRUCTION INDUST. NOM. 8, , ORASCOM TELECOM 10, , ,077,

311 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets HONG KONG ANHUI CANCH CEMENT H 48, , BEIJING ENTERPRISES 24, , CHINA MERCHANTS 90, , CHINA MOBILE HK 324, ,805, CHINA OVERSEAS LAND & INVESTMENT 414, , CHINA RESOURCES ENTERPRISE 98, , CHINA TRAVEL INTERNATIONAL 242, , CITIC PACIFIC 96, , CNOOC 1,011, , COSCO PACIFIC 100, , DENWAY MOTORS 454, , LENOVO GROUP 322, , PICC PROPERTY AND CASUALTY H 256, , SHANGHAI INDUSTRIAL HOLDINGS 51, , TSINGTAO BREWERY H 40, , ,452, HUNGARY GEDEON RICHTER 1, , HUNGARIAN TELECOMMUNICATIONS 29, , MOL MAGYAR OLAY A 4, , OTP BANK 16, , ,652, INDIA BAJAJ AUTO DEMAT. 1, , BHARAT HEAVY ELECTRICALS DEMAT. 1, , CIPLA -DEMATERIALISED- 13, , DR REDDY S LABORATORIES DEMAT. 5, , GAIL INDIA 13, , GRASIM INDUSTRIES GDR 1, , GUJARAT AMBUJA CEMENTS 24, , HDFC BANK DEMAT. 7, , HERO HONDA MOTORS DEMAT. 4, , HINDALCO INDUSTRIES INDIA DEMAT. 19, , HINDUSTAN LEVER DEMAT. 28, , HOUSING DEV. FINANCE DEMAT. 5, , ICICI BANK ADR (R.2 SHS) 10, , I-FLEX SOLUTIONS DEMAT. 2, , INDIABULLS FINANCIAL SVC DEMAT. 6, , INFOSYS TECHNOLOGIES DEMAT. 13, , ITC DEMAT. 38, , LARSEN & TOUBRO DEMAT. 2, , MAHINDRA & MAHINDRA DEMAT. 4, , MARUTI UDYOG DEMAT. 4, , NESTLE INDIA DEMAT. 3, , OIL & NATURAL GAS DEMAT. 8, , RANBAXY LABORATORIES DEMAT. 9, , RELIANCE CAPITAL -DEMATERIALISED- 6, , RELIANCE COMM. VENTURE -DEMAT- 24, , RELIANCE ENERGY DEMAT. 6, , RELIANCE INDUSTRIES 21, , SATYAM COMPUTER SERVICES DEMAT. 15, ,

312 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SIEMENS INDIA 3, , STATE BANK OF INDIA GDR (R.1 SHS) 1, , TATA CONSULTANCY SERVICES 3, , TATA IRON & STEEL DEMAT. 7, , TATA MOTORS DEMAT. 9, , UTI BANK -DEMATERIALISED- 7, , WIPRO DEMAT 6, , WIRE & WIRELESS (INDIA) 1, ZEE NEWS 1, ZEE TELEFILMS DEMAT. 9, , ,177, INDONESIA BANK CENTRAL ASIA 451, , BANK RAKYAT INDONESIA 407, , BUMI RESOURCES 1,182, , GUDANG GARAM 67, , KALBE FARMA 527, , P. T. TELEKOMUNIKASI INDONESIA "B" 677, , PERUSAHAAN GAS NEGARA B 138, , PT ASTRA INTERNATIONAL 173, , PT BANK DANAMON INDONESIA 145, , PT BANK MANDIRI (PERSERO) 572, , PT INDOFOOD SUKSES MAKMUR 439, , PT INDONESIAN SATELLITE 134, , ,465, ISRAEL AUDIOCODES 4, , BANK HAPOALIM (LOT 100) 64, , BANK LEUMI LE-ISRAEL 56, , BEZEQ ISRAEL TELECOMMUNICATION 83, , CHECK POINT SOFTWARE TECH 15, , CLAL INDUSTRIES & INVESTMENT NOM. 6, , DISCOUNT INVESTMENT 2, , GIVEN IMAGING 2, , IDB DEVELOPMENT A 1, , ISRAEL CHEMICALS 39, , ISRAEL DISCOUNT BANK A 31, , KOOR INDUSTRIES 1, , MAKHTESHIM AGAN INDUSTRIES 28, , ORBOTECH 2, , TEVA PHARMACEUTICAL INDUSTRIES 50, ,585, UNITED MIZRAHI BANK 10, , ,545, LUXEMBOURG TENARIS ADR (R.10 SHS) 18, , , MALAYSIA AMMB HOLDINGS 111, , BRITISH AMERICAN TOBACCO MALAYSIA 10, , COMMERCE ASSET-HOLDING 141, , GAMUDA 59, ,

313 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets GENTING BERHAD 31, , GOLDEN HOPE PLANTATIONS 42, , HONG LEONG BANK 24, , IOI CORPORATION 56, , KUALA LUMPUR KEPONG 24, , MAGNUM CORP 78, , MALAKOFF BHD 32, , MALAYAN BANKING BHD 118, , MALAYSIA INT. SHIPPING FGN NOM. 83, , MALAYSIAN AIRLINES SYSTEM 41, , MAXIS COMMUNICATION 55, , MULTI-PURPOSE HOLDINGS 58, , PETRONAS GAS 23, , PLUS EXPRESSWAYS 113, , PPB GROUP 44, , PROTON HOLDING 22, , PUBLIC BANK BERHAD FGN NOM. 69, , RESORTS WORLD 46, , RHB CAPITAL 44, , ROAD BUILDERS 39, , S P SETIA NOM. 50, , SIME DARBY BERHAD 123, , STAR PUBLICATIONS (MALAYSIA) 42, , TELEKOM MALAYSIA 50, , TENAGA NASIONAL 66, , UMW HOLDINGS 21, , YTL CORP 36, , ,884, MEXICO ALFA A 27, , AMERICA MOVIL L (AMX) 1,179, ,634, CEMEX CPO (R.2 SHS A & 1 SHS B ) 496, ,662, CONSORCIO ARA 19, , CORPORATION GEO B 40, , FEMSA UNITS (1 ORD B & 4 ORD D ) 50, , GFNORTE O 81, , GRUPO BIMBO A 30, , GRUPO CARSO A1 57, , GRUPO MEXICO B 85, , GRUPO MODELO C 42, , GRUPO TELEVISA CPO 163, , KIMBERLY CLARK DE MEXICO A 44, , TELEFONOS DE MEXICO L 608, , TV AZTECA 94, , WAL-MART V 236, ,024, ,661, PERU MINAS BUENAVENTURA ADR (R.1 SHS) 7, , , PHILIPPINES AYALA 10, , AYALA LAND 575, ,

314 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets BANK OF PHILIPPINE ISLANDS 87, , GLOBE TELECOM 1, , PHILIPPINE LONG DIST. TEL. (PHP) 3, , SAN MIGUEL B 28, , SM PRIME HOLDINGS INC 467, , , POLAND BANK PEKAO 5, , BANK PRZEMYSLOWO-HANDLOWY , BANK ZACHODNI 2, , KGHM 9, , PKO BANK POLSKI 30, , POLISH TELECOM 44, , POLSKI KONCERN NAFTOWY 26, , PROKOM SOFTWARE 1, , ,475, RUSSIA AFK SISTEMA GDR (R.1 SHS) 6, , COMSTAR GDR 13, , GAZPROM ADR (R.10 SHS) 7, , GAZPROM LOCAL (USD) 48, , GAZPROM LOCAL (USD) 542, ,237, LUKOIL HOLDING ADR (R.4 SHS) 32, ,784, MMC NORILSK NICKEL ADR (R.1 SHS) 5, , MOBILE TELESYS ADR (R.20 SHS) 13, , NOVATEK -GDR SPONS. - REG. S 6, , POLYUS GOLD ADR (REPR. 1 SHS) 6, , ROSTELECOM ADR (R.6 SHS) 4, , SBERBANK (USD) , SBERBANK (USD) , SURGUTNEFTEGAZ ADR (R.50 SHS) 10, , TATNEFT GDR (R.20 SHS) 5, , UES (UTD ENERG. SYS.) ADR (R.100 SHS) 1, , UES (UTD ENERG. SYS.) GDR (R.100 SHS) 4, , VIMPEL COMMUNICAT. ADR (R.1/4 SHS) 6, , ,213, SOUTH AFRICA AFRICAN BANK INVESTMENTS 36, , ALEXANDER FORBES 23, , ANGLO AMERICAN PLATINUM NOM. 4, , ANGLOGOLD NOM. 11, , ASPEN PHARMACARE 12, , AVENG 31, , AVI 25, , BARLOWORLD 14, , BIDVEST GROUP NOM. 17, , CONSOL 29, , EDGARS CONSOLIDATED STORES 36, , ELLERINE HOLDINGS 9, , FIRSTRAND (NEW) 179, , FOSCHINI 16, , GOLD FIELDS 35, ,

315 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets HARMONY GOLD MINING 23, , IMPALA PLATINIUM HOLDING (NEW) 36, , IMPERIAL HOLDINGS 15, , INVESTEC 10, , JD GROUP 14, , LIBERTY GROUP (NEW) 6, , MASSMART HOLDINGS 14, , METROPOLITAIN HLDGS 32, , MITTAL STEEL SOUTH AFRICA 14, , MTN GROUP 85, ,034, MURRAY & ROBERT HOLDINGS (NEW) 23, , NAMPAK (NEW) 40, , NASPERS N 18, , NEDCOR 12, , NETWORK HEALTHCARE 107, , PICK N PAY STORES 18, , REUNERT (NEW) 13, , SANLAM 142, , SAPPI 14, , SASOL 37, ,399, SHOPRITE HOLDING (SHP) 33, , SPAR GROUP 14, , STANDARD BANK GROUP (NEW) 77, ,042, STEINHOFF INTERNATIONAL HOLDINGS 75, , TELKOM 19, , TIGER BRANDS 11, , TONGAAT-HULETT 3, , TRUWORTHS INTERNATIONAL 34, , WOOLWORTHS HOLDINGS 61, , ,496, SOUTH KOREA AMOREPACIFIC , AMOREPACIFIC (NEW) , BANK OF PUSAN 7, , CHEIL COMMUNICATIONS , CHEIL INDUSTRIES 4, , CJ 1, , DAE DUCK ELECTRONICS 4, , DAEGU BANK 7, , DAELIM INDUSTRIAL 2, , DAEWOO ENGINEERING & CONSTRUCTION 13, , DAEWOO SECURITIES 10, , DAEWOO SHIPBUILD & MARINE 8, , DAISHIN SECURITIES 3, , DAUM COMMUNICATIONS , HANA FINANCIAL HOLDINGS 7, , HANJIN SHIPPING 5, , HANKOOK TIRE 8, , HITE BREWERY , HONAM PETROCHEMICAL 1, , HYUNDAI DEPARTMENT STORE 1, , HYUNDAI DEVELOPMENT CO 5, ,

316 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets HYUNDAI ENGIN. & CONSTR. 3, , HYUNDAI HEAVY INDUSTRIES 3, , HYUNDAI MOBIS 3, , HYUNDAI MOTOR 10, , HYUNDAI MOTOR PRIV. II 2, , HYUNDAI SECURITIES 10, , KANGWON LAND 7, , KIA MOTORS 14, , KOOKMIN BANK 21, ,739, KOREA ELEC. POWER (KEPCO) 16, , KOREA EXCHANGE BANK 5, , KOREAN AIR 3, , KT 7, , KT & G CORP 7, , KT ADR (R.1/2 SHS) 2, , KT FREETEL 6, , KUMGANG KOREA CHEMICAL , LG CHEMICAL (NEW) 4, , LG ELECTRONICS (NEW) 8, , LG ENG. & CONSTRUCTION 3, , LG INVESTMENT & SECURITIES 8, , LG PETROCHEMICAL 3, , LG PHILIPS LCD 6, , LOTTE SHOPPING , NCSOFT 1, , NHN 2, , NONG SHIM , POSCO 5, ,677, S1 CORP 1, , SAMSUNG 10, , SAMSUNG ELEC. PREF. N-VTG ID550 1, , SAMSUNG ELECTRO-MECHANICS 4, , SAMSUNG ELECTRONICS 7, ,032, SAMSUNG FINE CHEMICALS 2, , SAMSUNG FIRE & MAR. INSUR. 2, , SAMSUNG HEAVY INDUSTRIES 14, , SAMSUNG SDI 2, , SAMSUNG SECURITIES 4, , SHINHAN FINANCIAL GROUP 13, , SHINSEGAE , SK CORP 7, , SK TELECOM 2, , S-OIL 2, , ,145, TAIWAN ACCTON TECHNOLOGY 73, , ACER 150, , ADVANCED SEMICONDUCTOR ENGINEER. 206, , ASIA CEMENT 109, , ASIA OPTICAL 14, , ASUSTEK COMPUTER 168, , AU OPTRONICS 407, ,

317 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets AVANTECH 26, , BENQ 177, , CATHAY FINANCIAL 352, , CATHAY REAL ESTATE 143, , CHANG HWA COMMERCIAL BANK 240, , CHENG SHIN RUBBER 27, , CHI MEI OPTOELECTRONIC 248, , CHINA AIRLINES 86, , CHINA DEVELOPMENT FINANCIAL 544, , CHINA MOTOR 23, , CHINA STEEL 565, , CHINATRUST FINANCIAL HOLDINGS 386, , CHUNGHWA PICTURE TUBES 516, , CHUNGHWA TELECOM 301, , CMC MAGNETICS 259, , COMPAL ELECTRONICS 224, , COMPEQ MFG 77, , DELTA ELECTRONICS 89, , D-LINK 51, , E. SUN FINANCIAL 186, , EVA AIRWAYS 123, , EVERGREEN MARINE 97, , FAR EASTERN TEXTILE 193, , FIRST FINANCIAL HLD 269, , FORMOSA CHEMICALS AND FIBER 198, , FORMOSA PETROCHEMICAL 111, , FORMOSA PLASTICS 283, , FORMOSA TAFFETA 81, , FOXCONN TECHNOLOGY 21, , FU SHENG INDUSTRIAL 61, , FUBON FINANCIAL 280, , GIGA-BYTE TECHNOLOGY 46, , HANNSTAR DISPLAY 438, , HIGH TECH COMPUTER 19, , HON HAI PRECISION INDUSTRY 264, ,886, HUA NAN FINANCIAL 214, , INVENTEC 112, , KINPO ELECTRONICS 94, , LARGAN PRECISION 7, , LITE ON TECHNOLOGY 168, , MACRONIX INTL 177, , MEDIATEK 47, , MEGA FINANCIAL HLDG 524, , MICRO-STAR INTERNATIONAL 49, , NAN YA PLASTICS 354, , NIEN MADE ENTERPRISE 66, , NOVATEK MICROELECTRONICS 25, , OPTIMAX TECHNOLOGY 39, , ORIENTAL UNION CHEMICAL 39, , PHOENIXTEC POWER 34, , POLARIS SECURITIES 146, , POU CHEN 163, ,

318 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets PRESIDENT CHAIN STORE 42, , PRESIDENT ENTERPRISES 153, , QUANTA COMPUTER 115, , REALTEK SEMICONDUCTOR 44, , RITEK 200, , SHIN KONG FINANCIAL HOLDING 193, , SILICONWARE PRECISION INDUSTRIES 148, , SINOPAC 313, , SYNNEX TECHNOLOGY INTL 56, , TAISHIN FINANCIAL HOLDINGS 273, , TAIWAN CELLULAR 146, , TAIWAN CEMENT 183, , TAIWAN GLASS IND 71, , TAIWAN SECOM 5, , TAIWAN SEMICONDUCTOR 1,327, ,750, TATUNG 275, , TECO ELECTRIC & MACHINERY 169, , UNITED MICROELECTRONICS 1,101, , VIA TECHNOLOGIES 56, , WALSIN LIHWA 260, , WAN HAI LINES 100, , WINBOND ELECTRONICS 193, , YA HSIN INDUSTRIAL 88, , YAGEO 181, , YANG MING MARINE TRANSPORT 72, , YUANTA SECURITIES 218, , YUEN FOONG YU PAPER MANUFACTURING 134, , YULON MOTOR 47, , ZYXEL COMMUNICATIONS 29, , ,760, THAILAND ADVANCED INFO SERV. NOM. FGN. 13, , ADVANCED INFO SERVICE PUBL. NVDR 55, , AIRPORTS OF THAILAND NVDR 46, , BANGKOK BANK PUBLIC CO 4, , BANGKOK BANK PUBLIC CO FGN NOM. 44, , BANGKOK BANK PUBLIC NVDR 27, , BANGKOK EXPRESSWAY FGN. 17, , BANGKOK EXPRESSWAY PUBLIC NVDR 48, , BANPU PUBLIC FGN NOM. 3, , BANPU PUBLIC NVDR 12, , BEC WORLD FGN NOM. 20, , BEC WORLD PUBLIC 62, , ELECTRICITY GENERATING N-VTG 15, , ELECTRICITY GENERATING PUBLIC FGN 5, , KASIKORNBANK PUB. FGN NOM. 58, , KASIKORNBANK PUBLIC CO NVDR 40, , KRUNG THAI BANK FGN 37, , KRUNG THAI BANK NVDR 242, , LAND AND HOUSE FGN NOM. 300, , LAND AND HOUSE NVDR 40, , PTT EXPLORATION & PROD. FGN NOM. 22, ,

319 Pictet Funds (LUX) - Emerging Markets Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets PTT EXPLORATION & PRODUCTION NVDR 64, , PTT FGN NOM. 13, , PTT PUBLIC NVDR 47, , SAHAVIRIYA NVDR 646, , SAHAVIRIYA STEEL FGN NOM. 144, , SIAM CEMENT PUBLIC FGN 14, , SIAM CEMENT PUBLIC NVDR 12, , SIAM CITY CEMENT FGN. 1, , SIAM CITY CEMENT NVDR. 6, , SIAM COMMERCIAL BANK NVDR 75, , THAI AIRWAYS INTERNATIONAL 38, , THAI AIRWAYS INTL. FGN NOM. 6, , ,054, TURKEY AKBANK 58, , ANADOLU EFES BIRACI 5, , DOGAN YAYIN HOLDING 25, , EREGLI DEMIR CELIK 22, , FORD OTOMOTIV SANAYI 8, , HACI OMER SABANCI HOLDING 42, , KOC HOLDING 25, , TUPRAS TURKIY PETROL RAFINERILERI 10, , TURKCELL ILETISIM 31, , TURKIYE GARANTI BANKASI NOM. 80, , TURKIYE IS BANKASI C 75, , YAPI VE KREDI BANKASI 58, , ,165, UNITED KINGDOM ASTRO ALL ASIA NETWORKS 58, , TANJONG 14, , , UNITED STATES CENTRAL EUROPEAN MEDIA 2, , SOUTHERN COPPER 6, , , TOTAL SHARES 147,662, UNITS OF INVESTMENT FUNDS UNITED STATES INDIA FUND 106, ,907, ,907, TOTAL UNITS OF INVESTMENT FUNDS 4,907, TOTAL INVESTMENTS 152,570, CASH AT BANKS 1,537, OTHER NET LIABILITIES -223, TOTAL NET ASSETS 153,883,

320 Pictet Funds (LUX) - Emerging Markets Index GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) South Korea Taiwan Russia Brazil South Africa 8.78 China 7.56 Mexico 6.28 Hong Kong 4.16 United States 3.51 India 3.36 Malaysia 2.52 Israel 2.32 Indonesia 1.62 Poland 1.61 Turkey 1.42 Thailand 1.34 Hungary 1.08 Chile 1.00 Egypt 0.70 Czech Republic 0.66 Luxembourg 0.59 Philippines 0.51 Argentina 0.18 Peru 0.14 Bermuda 0.12 United Kingdom 0.10 Cayman Islands Industrial classification (in % of net assets) Oil Banks and credit institutions Communications Electronics and electrical equipment Holding and financial companies 4.84 Stainless steel 3.77 Utilities 3.29 Units of investment funds 3.18 Construction and building materials 3.10 Mining and steelworks 3.08 Retail and supermarkets 2.26 Insurance 2.15 Chemicals 2.07 Transport and freight 1.99 Tobacco and alcohol 1.95 Precious metals and stones 1.91 Computer and office equipment 1.80 Pharmaceuticals and cosmetics 1.68 Road vehicles 1.56 Construction of machines and appliances 0.97 Real estate 0.94 Food and soft drinks 0.82 Paper and forest products 0.58 Gastronomy 0.48 Miscellaneous services 0.47 Internet, software and IT services 0.45 Textiles and clothing 0.39 Miscellaneous trade 0.37 Publishing and graphic arts 0.36 Agriculture and fishing 0.34 Miscellaneous consumer goods 0.29 Conglomerates 0.28 Aeronautics and astronautics 0.28 Photography and optics 0.21 Miscellaneous capital goods 0.17 Health services 0.14 Tyres and rubber 0.11 Packaging 0.08 Leisure

321 Pictet Funds (LUX) - Generics STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES CANADA LABOPHARM (USD) 500, ,905, QLT (USD) 155, ,319, ,224, GERMANY STADA ARZNEIMITTEL NOM. 40, ,276, ,276, HUNGARY GEDEON RICHTER 33, ,558, ,558, ICELAND ACTAVIS GROU 7,300, ,452, ,452, ISRAEL TARO PHARMACEUTICAL INDUSTRIES A 456, ,560, TEVA PHARMACEUTICAL ADR 533, ,634, ,194, JAPAN NICHI-IKO PHARMACEUTICAL 311, ,367, NIPPON CHEMIPHAR 692, ,522, SAWAI PHARMACEUTICAL 158, ,487, TOWA PHARMACEUTICAL 238, ,773, ,152, NETHERLANDS ANTILLES RANBAXY LABORA (ML) CRT , ,298, ,298, NETHERLANDS ZENTIVA 200, ,096, ,096, SLOVENIA KRKA 3, ,256, ,256, SWITZERLAND LONZA GROUP 114, ,872, ,872, UNITED KINGDOM HIKMA PHARMACEUTICALS 838, ,940, SHIRE PHARMACEUTICALS GROUP -ADR- 202, ,554, ,494, UNITED STATES ALKERMES 378, ,074, ALLERGAN 120, ,464, BARR PHARMACEUTICALS 200, ,116, CRITICAL THERAPEUTICS 1,093, ,131, ENDO PHARMACEUTICALS 414, ,292, FOREST LABORATORIES 247, ,557,

322 Pictet Funds (LUX) - Generics STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets HANA BIOSCIENCES 671, ,265, K-V PHARMACEUTICAL A 132, ,180, MOMENTA PHARMACEUTICALS 581, ,139, MYLAN LABORATORIES 123, ,451, NOVEN PHARMACEUTIC 84, ,082, SAVIENT PHARMACEUTICALS 438, ,260, SEPRACOR 145, ,943, WATSON PHARMACEUTICALS INC 125, ,256, ,216, TOTAL INVESTMENTS 206,094, CASH AT BANKS 4,004, OTHER NET LIABILITIES -1,042, TOTAL NET ASSETS 209,056,

323 Pictet Funds (LUX) - Generics GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Japan Israel United Kingdom 8.84 Netherlands 5.79 Switzerland 4.72 Hungary 3.62 Iceland 3.09 Netherlands Antilles 2.06 Canada 2.02 Slovenia 1.56 Germany Industrial classification (in % of net assets) Pharmaceuticals and cosmetics Biotechnology 8.01 Chemicals 4.72 Holding and financial companies

324 Pictet Funds (LUX) - Japanese Mid-Small Cap STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES JAPAN A&D 51, ,307, AHRESTY 45, ,283, ANEST IWATA 135, ,264, AREALINK ,933, ASAHI INTECC 5, ,169, BENESSE 9, ,885, CENTRAL SPORTS 7, ,328, CULTURE CONVENIENCE CLUB 48, ,384, DAIFUKU 62, ,121, DAI-ICHI SEIKO 17, ,495, DAIKI ALUMINIUM INDUSTRY 77, ,016, DAIKIN INDUSTRIES 62, ,687, DENA ,564, DISCO 16, ,847, ELPIDA MEMORY 35, ,425, EM SYSTEMS 9, ,004, EXEDY CORP 32, ,884, FP CORP 13, ,304, FUJI MACHINE MFG 77, ,868, FUJIKURA KASEI 87, ,731, FUJIMI 23, ,284, FUNAI ELECTRIC 15, ,269, GAKUJO 8, ,185, HAMAMATSU PHOTONICS 29, ,756, HIOKI E.E. 33, ,345, HITACHI KOKI 38, ,489, HITACHI METALS 67, ,921, HOKURIKU ELECTRIC INDUSTRY CO 329, ,367, HORIBA 27, ,353, I LOGISTICS 29, ,172, IBIDEN 27, ,755, IBJ LEASING COMPANY 5, ,089, IMASEN ELECTRIC INDUSTRIAL 25, ,946, INTERNET INITIATIVE JAPON ,472, IRISO ELECTRONICS 31, ,194, ISUZU MOTORS 261, ,217, ITOCHU TECHNO-SCIENCE 4, ,661, JAPAN AVIATION ELECTRONICS 85, ,821, JAPON CARLIT 48, ,182, JAPON PILE 19, ,856, JSR 9, ,838, JUPITER TELECOMMUNICATIONS ,002, KANSAI PAINT 87, ,133, KANTO DENKA KOGYO 116, ,630, KIKUCHI 7, ,802, KINTETSU WORLD EXPRESS 30, ,793, KITAGAWA IRON WORKS 280, ,103, KOATSU GAS KOGYO 29, ,158,

325 Pictet Funds (LUX) - Japanese Mid-Small Cap STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets KOKUSAI CO LTD 21, ,647, KYOWA EXEO 243, ,917, LAND CO ,905, MEBIX ,688, MEDICEO 29, ,537, MEGACHIPS 9, ,333, MIRAIAL CO 3, ,299, NETUREN 95, ,056, NHK SPRING 66, ,624, NIHON AIM ,627, NIHON PARKERIZING 63, ,191, NIPPON CARBON 232, ,838, NIPPON CHEMI-CON 155, ,794, NIPPON ELECTRIC GLASS 19, ,439, NIPPON SEIKI 9, ,028, NITTAN VALVE 5, ,014, OHARA 21, ,435, PACIFIC GOLF GROUP INTERNAT.HOLD ,940, PANAHOME 96, ,602, PARK24 131, ,924, RASA INDUSTRIES 106, ,364, RESORT TRUST 25, ,091, RYOBI 96, ,396, RYOHIN KEIKAKU 18, ,686, SANKEN ELECTRIC 73, ,158, SHIKOKU CHEMICALS 125, ,730, SHINWA , SHIONOGI & CO 9, ,669, SHOEI 23, ,298, SHOWA DENKO 368, ,870, SOHKEN HOMES ,537, STANLEY ELECTRIC 19, ,210, SUMCO 13, ,442, SUMITOMO METAL MINING 38, ,173, SUMITOMO REAL ESTATE 1, ,534, SURUGA BANK 44, ,687, TELEWAVE ,783, TOHO 19, ,657, TOKAI RIKA 46, ,899, TOKUYAMA 77, ,434, TOKYO ICHIBAN FOODS , TOPCON CORP 77, ,293, TOYOTA TSUSHO CORP 13, ,265, TSUBAKIMOTO KOGYO 242, ,925, TSURUHA HOLDINGS (NEW) 14, ,828, UNION TOOL 24, ,816, WACOM ,670, Y.A.C 19, ,120, YOKOWO 67, ,855, ,305,823,

326 Pictet Funds (LUX) - Japanese Mid-Small Cap STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN JPY) Description Quantity Market value (note 2) % of net assets TOTAL INVESTMENTS 8,305,823, CASH AT BANKS 373,504, OTHER NET LIABILITIES -32,820, TOTAL NET ASSETS 8,646,507,

327 Pictet Funds (LUX) - Japanese Mid-Small Cap GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) Japan Industrial classification (in % of net assets) Electronics and electrical equipment Construction of machines and appliances Chemicals Road vehicles 8.64 Construction and building materials 4.55 Watch-making 2.79 Miscellaneous services 2.72 Internet, software and IT services 2.55 Retail and supermarkets 2.43 Stainless steel 2.41 Computer and office equipment 2.33 Photography and optics 2.13 Real estate 1.72 Communications 1.60 Pharmaceuticals and cosmetics 1.25 Gastronomy 1.18 Transport and freight 1.12 Miscellaneous trade 1.01 Banks and credit institutions 0.96 Holding and financial companies 0.76 Packaging 0.71 Miscellaneous consumer goods 0.65 Leisure 0.48 Public healthcare and social services 0.47 Tyres and rubber

328 Pictet Funds (LUX) - Emerging Markets Large Cap STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES ARGENTINA BANCO MACRO BANSUD B -ADR- 21, , TELECOM ARGENTINA ADR 27, , ,170, BERMUDA CNPC (HONG KONG) 630, , GOOD FELLOW GROUP 3,700, , , BRAZIL BANCO BRADESCO PREF. 11, , BRADESPAR PREF. 7, , BRASIL TELECOM PARTICIPACOES PREF. 67,690, , CEMIG MINAS GERAIS PREF. (LOT 1000) 7,891, , LOJAS RENNER 29, , PETROLEO BRASILEIRO S.A. -ADR 23, ,173, TIM PARTICI. ADR (R PREF.) 12, , UNIBANCO BRASIL. GDR (500 UNITS) 6, , VALE DO RIO DOCE 39, ,172, ,619, CAYMAN ISLANDS FOCUS MEDIA HOLDING ADR SPONS 5, , MELCO PBL ENTERTAINMENT ADR 11, , , CHINA AIR CHINA H 648, , BAOYE GROUP COMPAGNY H 272, , CHINA COMMUNICATION CONST. H 181, , CHINA CONSTRUCTION BANK H 2,225, ,417, CHINA LIFE INSURANCE H 333, ,137, GREAT WALL AUTO H 436, , PETROCHINA H 539, , SHANGHAI ELECTRIC GROUP H 1,182, , YANZHOU COAL MINING H 678, , ,769, EGYPT ORASCOM TELECOM 8, , , HONG KONG CHINA MOBILE HK 164, ,421, CHINA OVERSEAS LAND & INVESTMENT 348, , CHINA RESOURCES ENTERPRISE 140, , CHINA UNICOM 404, , CNOOC 762, , HUTCHISON TELECOMMUNICATIONS 212, , ,143,

329 Pictet Funds (LUX) - Emerging Markets Large Cap STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets INDIA DR REDDY S LAB ADR (REP. 1SH) 26, , ICICI BANK ADR (R.2 SHS) 14, , PATNI COMPUTER SYS.-ADR- (R.2 SHS) 27, , SATYAM COMPUTER ADR (R.2 SHS) 22, , STATE BANK OF INDIA GDR (R.1 SHS) 12, , TATA MOTORS -ADR- (REP.1 SHS) 23, , ,552, INDONESIA BANK RAKYAT INDONESIA 607, , KALBE FARMA 2,124, , PT BANK MANDIRI (PERSERO) 1,277, , PT INDONESIAN SATELLITE 773, , TELKOM INDONESIA ADR (R.20 SHS) 13, , ,232, ISRAEL BANK HAPOALIM (LOT 100) 87, , ISRAEL DISCOUNT BANK A 173, , TEVA PHARMACEUTICAL ADR 28, , ,678, MALAYSIA COMMERCE ASSET-HOLDING 293, , GENTING BERHAD 60, , RHB CAPITAL 298, , TELEKOM MALAYSIA 165, , TENAGA NASIONAL 122, , ,331, MEXICO AMERICA MOVIL ADR (R.20 SHS L ) 34, ,558, FOMENTO ADR (10 UN 1SH B +4SH D ) 7, , GFNORTE O 188, , GRUPO TELEVISA GDR 24, , ,788, NETHERLANDS EFES BREWERIES GDR (R.5 SHS) 7, , EFES BREWERIES GDR SP. (S-TEMP.) 3, , , PHILIPPINES AYALA LAND 1,627, , BANK OF PHILIPPINE ISLANDS 256, , PHILIPPINE LONG DIST. TEL. ADR 8, , ,267, RUSSIA GAZPROM ADR (R.10 SHS) 48, ,259, LUKOIL HOLDING ADR (R.4 SHS) 14, ,274, MMC NORILSK NICKEL (USD) 4, , MOBILE TELESYS ADR (R.20 SHS) 12, , UES (UTD ENERG. SYS.) GDR (R.100 SHS) 5, , VIMPEL COMMUNICAT. ADR (R.1/4 SHS) 7, , ,977,

330 Pictet Funds (LUX) - Emerging Markets Large Cap STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SINGAPORE SINGAPORE TELECOMMUNICATIONS , , SOUTH AFRICA ANGLO AMERICAN PLATINUM NOM. 2, , BARLOWORLD 21, , GOLD FIELDS 16, , HARMONY GOLD MINING 27, , IMPALA PLATINIUM HOLDING (NEW) 15, , SAPPI 27, , SASOL 21, , ,212, SOUTH KOREA HANA FINANCIAL HOLDINGS 10, , HYUNDAI DEPARTMENT STORE 4, , HYUNDAI DEVELOPMENT CO 7, , HYUNDAI MOTOR 6, , KOOKMIN BANK 11, , LG CORP 8, , LG ELECTRONICS (NEW) 5, , MACQUARIE KOREA INFRASTRUCT. GDR 49, , NHN 3, , POSCO 1, , SAMSUNG 9, , SAMSUNG ELECTRONICS 4, ,788, SAMSUNG FIRE & MAR. INSUR. 1, , SHINHAN FINANCIAL GROUP 12, , SHINSEGAE 1, , SK TELECOM ADR REPR.1/90 SH 11, , ,628, TAIWAN ASUSTEK COMPUTER 153, , AU OPTRONICS 217, , CATCHER TECHNOLOGY 19, , CATHAY FINANCIAL 282, , CHINATRUST FINANCIAL HOLDINGS 462, , CHUNGHWA TELECOM ADR (R.10 SHS) 22, , DELTA ELECTRONICS 120, , FIRST FINANCIAL HLD 676, , FOXCONN TECHNOLOGY , FUBON FINANCIAL 604, , HIGH TECH COMPUTER 14, , HON HAI PRECISION INDUSTRY 137, , POWERCHIP SEMICONDUCTOR PRESIDENT ENTERPRISES 377, , SILICONWARE PRECISION INDUSTRIES 246, , TAIWAN FERTILIZER 192, , TAIWAN SEMICONDUCTOR 627, ,299, UNITED MICROELECTRONICS 836, , YUANTA SECURITIES 495, , ,467,

331 Pictet Funds (LUX) - Emerging Markets Large Cap STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets THAILAND BANGKOK BANK PUBLIC CO FGN NOM. 89, , KASIKORNBANK PUB. FGN NOM. 195, , TRUE FGN 1,473, , , TURKEY MIGROS TURKEY 26, , TOFAS TURK OTOMOBIL FABRIKASI 95, , TURKCELL ILETISIM 69, , ,024, UNITED STATES SOHU.COM 19, , , TOTAL SHARES 64,641, UNITS OF INVESTMENT FUNDS CAYMAN ISLANDS VIETNAM ENTERPRISE INVEST. C NEW 475, , , TOTAL UNITS OF INVESTMENT FUNDS 546, TOTAL INVESTMENTS 65,187, CASH AT BANKS 297, OTHER NET LIABILITIES -296, TOTAL NET ASSETS 65,188,

332 Pictet Funds (LUX) - Emerging Markets Large Cap GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) South Korea Taiwan Brazil Russia 9.17 China 8.84 Hong Kong 6.36 Mexico 5.82 India 5.44 South Africa 4.93 Malaysia 3.58 Indonesia 3.41 Israel 2.57 Philippines 1.95 Argentina 1.80 Cayman Islands 1.79 Turkey 1.57 Thailand 1.35 Bermuda 1.31 Egypt 0.88 United States 0.72 Netherlands 0.57 Singapore Industrial classification (in % of net assets) Communications Banks and credit institutions Oil Electronics and electrical equipment Holding and financial companies 7.48 Stainless steel 3.38 Retail and supermarkets 2.93 Pharmaceuticals and cosmetics 2.91 Road vehicles 2.59 Mining and steelworks 2.59 Internet, software and IT services 2.23 Insurance 2.22 Real estate 2.12 Computer and office equipment 1.91 Tobacco and alcohol 1.85 Precious metals and stones 1.72 Utilities 1.48 Gastronomy 1.24 Units of investment funds 0.84 Transport and freight 0.81 Textiles and clothing 0.78 Construction and building materials 0.72 Paper and forest products 0.71 Miscellaneous services 0.58 Food and soft drinks 0.58 Chemicals 0.56 Miscellaneous trade

333 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRALIA ALINTA MERGECO 22, , ILUKA RESOURCES 17, , PACIFIC BRANDS 88, , , AUSTRIA ANDRITZ 1, , BWT AG BEST WATER 5, , CHRIST WATER TECHNOLOGY 10, , OESTER. ELEKTR. WIRT. A 3, , OMV 1, , RAIFFEISEN INT. BANK-HOLDING 3, , TELEKOM AUSTRIA 18, , WIENERBERGER BAUSTOFFINDUSTRIE 2, , ,597, BAHAMAS SHANGAI PUDONG ELN (CS) , , SHANGHAI INT. AIR ELN (CS) , , , BELGIUM AGFA-GEVAERT 5, , BEKAERT , COLRUYT (ETBLISSEMENTS FR.) , FORTIS 2, , GROUPE DELHAIZE 4, , KBC BANCASSURANCE HOLDING , , BERMUDA FRONTLINE 1, , HOPSON DEVELOPMENT HOLDINGS 69, , HUABAO INTERNATIONAL HOLDINGS 2,136, , JARDINE MATHESON HOLDINGS 2, , PORTS DESIGN 24, , ,145, BRAZIL SABESP 886, , , CANADA BCE INC W/I 7, , BIOTEQ ENVIRONMENTAL TECHN. 39, , CANADIAN HYDRO DEVELOPERS 43, , CARDIOME PHARMA (USD) 20, , H2O INNOVATION , , PURE TECHNOLOGIES 15, , ROGERS COMMUNICATIONS B (USD) 6, ,

334 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets STANTEC 18, , TELUS 9, , TELUS -NVTG , ,516, CAYMAN ISLANDS AAC ACOUSTIC TECHNOLOGIES 36, , CHINA INFRASTRUCTURE MACHINERY 99, , CONSOLIDATED WATER 5, , FOCUS MEDIA HOLDING ADR SPONS , FOXCONN INTERNATIONAL 26, , GEMS TV HOLDINGS 34, , GOLDEN EAGLE RETAIL 21, , MELCO PBL ENTERTAINMENT ADR 1, , VST HOLDINGS 832, , , CHINA ANGANG NEW STEEL H 47, , BANK OF CHINA 207, , BEIJING CAPITAL INTL AIRPORT NOM. 306, , CHINA COAL ENERGY H 185, , CHINA COMMUNICATION CONST. H 181, , CHINA COMMUNICATIONS SERV. H 72, , CHINA CONSTRUCTION BANK H 3,147, ,521, CHINA LIFE INSURANCE H 339, , CHINA MERCHANTS BANK H 141, , CHINA PETROLEUM & CHEMICAL H 476, , CHINA SHENHUA ENERGY "H" 128, , CHINA TELECOM H 269, , GREAT WALL AUTO H 220, , GUANGDONG KELON ELECTR. HOLD. H 85, , GUANGZHOU R&H PROP. H (TEMP.TRAD) 29, , HUANENG POWER INTL H 375, , HUNAN NON-FERROUS METALS H 538, , IND.& COMM.BANK OF CHINA H 1,788, , IRICO GROUP ELECTRONICS H 180, , JIANGXI COPPER H 62, , MAANSHAN IRON & STEEL H 209, , MINDRAY MEDICAL INT ADR 9, , PETROCHINA H 934, ,006, PING AN INSURANCE (GROUP) 27, , SHANDONG WEIGAO GROUP 489, , SHANGHAI ELECTRIC GROUP H 362, , SHANGHAI ZHENHUA PORT B 212, , SHANXI XISHAN (CS) CRT , , SHANXI XISHAN COAL (BOCI) CPC 06/08 55, , WEICHAI POWER H 96, , YANZHOU COAL MINING H 897, , ZHAOJIN MINING INDUSTRY H 23, , ZHUZHOU CSR TIMES H 114, , ZTE H 84, , ,025,

335 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets CZECH REPUBLIC CESKE ENERGETICKE ZAVODY 8, , , DENMARK CARLSBERG B 6, , GENMAB 8, , H. LUNDBECK 1, , NOVO-NORDISK B 14, , NOVOZYMES B 1, , VESTAS WIND SYSTEMS NOM. 1, , ,031, EGYPT ORASCOM TELECOM GDR 2, , , FINLAND FORTUM 17, , KCI KONECRANES INTERNATIONAL 2, , KEMIRA 5, , NOKIA OYJ 45, , STORA ENSO R 3, , ,252, FRANCE ACCOR , AIR LIQUIDE , AXA 1, , BNP PARIBAS 1, , BULL (NEW) 24, , CARREFOUR SA 1, , CNP ASSURANCES , CREDIT AGRICOLE , DANONE GROUPE (CHF) 10, ,213, ESSILOR INTERNATIONAL 1, , FRANCE TELECOM SA 40, , IMERYS (EX-IMETAL) 1, , KLEPIERRE , LAFARGE , PEUGEOT PORT. 2, , SAINT GOBAIN 1, , SANOFI AVENTIS 7, , SECHE ENVIRONNEMENT 1, , SHANGHAI INT. AIRP. ELN (UBS) , , SOCIETE GENERALE 5, , SUEZ 23, , THOMSON (EX-TMM) 27, , TOTAL SA 15, , VEOLIA ENVIRONNEMENT 29, ,575, ,216, GERMANY ADIDAS-SALOMON 1, , ALLIANZ NOM. 6, , ALTANA INDUSTRIE-AKTIEN & ANLAGEN ,

336 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets B. M. W. 6, , BAYER (EUR) 6, , DEUTSCHE BANK NOM , DEUTSCHE BOERSE NOM , DEUTSCHE POST AG-REG 11, , DEUTSCHE TELEKOM NOM. 47, , FRESENIUS MEDICAL CARE , GEA GROUP 17, , HENKEL 2, , HENKEL PREF. N-VTG 3, , HYPO REAL ESTATE 10, , KLOECKNER & CO. 11, , MAN 2, , MLP 6, , MUENCHENER RUECKVER AG-REG , PORSCHE PREF , SAP (EUR) 10, , TECHEM 2, , TUI (NEW) 2, , VOLKSWAGEN (EUR) , ,560, GREECE COCA COLA HELLENIC BOTTLING 20, , COSMOTE NOM. 9, , HELLENIC EXCHANGE HOLDING NOM. 18, , HELLENIC TELECOMM. ORGANIZATIONS 16, , NATIONAL BANK OF GREECE 14, , OPAP 5, , TITAN CEMENT NOM. 2, , VIVARTIA 15, , ,462, HONG KONG ANHUI CANCH CEMENT H 87, , ASM PACIFIC TECHNOLOGY 34, , BANK OF EAST ASIA 44, , BOC HONG KONG (HOLDINGS) 161, , CHEUNG KONG HOLDINGS 62, , CHINA INSURANCE 42, , CHINA MOBILE HK 255, ,678, CHINA OVERSEAS LAND & INVESTMENT 45, , CHINA RESOURCES ENTERPRISE 22, , CHINA TRAVEL INTERNATIONAL 106, , CHINA UNICOM 46, , CNOOC 299, , GUANGDONG INVESTMENT 579, , HENDERSON LAND DEVELOPMENT 52, , HONG KONG AIRCRAFT ENGINEERING 18, , HONG KONG EXCHANGES AND CLEARING 52, , HONGKONG LAND HOLDINGS 70, , HUTCHISON WHAMPOA 40, , HYSAN DEVELOPMENT 84, , KOWLOON DEVELOPMENT 31, ,

337 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets LI & FUNG (NEW) 76, , LI NING 248, , LIFESTYLE INTL 46, , MELCO INTERNATIONAL DEVELOPEMENT 47, , NEW WORLD DEVELOPMENT 176, , PACIFIC CENTURY INSURANCE 26, , PCCW 38, , SHANGRI-LA ASIA 15, , SUN HUNG KAI PROPERTIES 72, , SWIRE PACIFIC A 11, , WHARF HOLDINGS 37, , WING LUNG BANK 13, , ,289, HUNGARY MOL MAGYAR OLAY A 2, , , INDIA VOLTAS DEMAT. 10, , , INDONESIA BANK CENTRAL ASIA 93, , BANK RAKYAT INDONESIA 90, , P. T. TELEKOMUNIKASI INDONESIA "B" 74, , PT ASTRA INTERNATIONAL 49, , PT INDONESIAN SATELLITE 76, , SEMEN GRESIK 21, , , IRELAND ALLIED IRISH BANKS 12, , DEPFA BANK 4, , ELAN 5, , GRAFTON GROUP UNITS 5, , , ITALY ACEA 22, , ASTALDI 73, , BANCA POPOLARE DI MILANO 3, , CAPITALIA 5, , DANIELI & C.OFF.MECC. RNC 59, , ENEL ENTE NAZION. ENERGIA ELETTR. 17, , ENI 12, , FONDIARIA SAI SPA 11, , HERA 121, , IRIDE 39, , MEDIASET 30, , MONTE PASCHI SIENA 128, , SNAM RETE GAS 9, , TELECOM IT MEDIA 176, ,

338 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets TELECOM ITALIA 208, , TELECOM ITALIA-RNC 128, , UNICREDITO ITALIANO SPA 95, , ,020, JAPAN AOYAMA TRADING 4, , ARNEST ONE 14, , ASAHI GLASS 15, , BANK OF FUKUOKA 20, , CENTURY LEASING SYSTEM 9, , DAISEKI 15, , DAIWA SECURITIES GROUP 19, , EBARA 32, , EIGHTEENTH BANK 19, , FUJITSU 22, , HASEKO 46, , IBIDEN 4, , ISUZU MOTORS 53, , ITOCHU 22, , JGC 13, , JOINT 6, , KAJIMA 45, , KDDI , KOMATSU ELECTRONICS METALS 3, , KURITA WATER INDUSTRIES 13, , MITSUBISHI ELECTRIC 24, , MITSUBISHI ESTATE CO LTD 11, , N. T. T , NIDEC 2, , NISSAN CHEMICAL INDUSTRIES 18, , NTT DOCOMO INC , ORGANO 24, , RICOH CO LTD 8, , SEKISUI CHEMICAL 17, , SOMPO JAPAN INSURANCE 12, , SUMITOMO CHEMICAL 26, , SUMITOMO HEAVY INDUSTRIES 17, , SUMITOMO MITSUI FINANCIAL GROUP , SUMITOMO RUBBER INDUSTRIES 20, , TOTO 14, , TSUKISHIMA KIKAI 8, , ,917, KAZAKHSTAN KAZMUNAIGAS -GDR SPONS.-REG.S 14, , , MALAYSIA COMMERCE ASSET-HOLDING 55, , GENTING BERHAD 11, , IOI CORPORATION 10, , MALAYAN BANKING BHD 26, , RHB CAPITAL 59, , SIME DARBY BERHAD 33, ,

339 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets TENAGA NASIONAL 29, , UEM BUILDERS 92, , , MEXICO AMERICA MOVIL ADR (R.20 SHS L ) 5, , , NETHERLANDS AEGON 3, , AKZO NOBEL 3, , AXALTO 11, , ING GROEP (CERT.) 11, , KONINKLIJKE AHOLD NV 5, , KONINKLIJKE DSM (NEW) , KPN KONINKLIJKE 59, , QIAGEN 3, , REED ELSEVIER 10, , ROYAL PHILIPS (EUR) 8, , SBM OFFSHORE , STMICROELECTRONICS 12, , TNT NV 4, , UNILEVER NEW (EUR) 3, , ,352, NEW ZEALAND TELECOM CORP. OF NEW ZEALAND 155, , , NORWAY DNB HOLDING A 4, , NORSK HYDRO NOM. (NOK) 8, , PAN FISH 490, , PETROLEUM GEO SERVICES 2, , STATOIL 12, , TELENOR 71, ,029, TOMRA SYSTEMS (NOK) 9, , ,964, PHILIPPINES AYALA 4, , BANCO DE ORO UNIVERSAL BANK 52, , GLOBE TELECOM 1, , PHILIPPINE LONG DIST. TEL. (PHP) 1, , UNIVERSAL ROBINA 97, , , PORTUGAL PORTUGAL TELECOM NOM. 13, , , RUSSIA MOBILE TELESYS ADR (R.20 SHS) 5, , UES (UTD ENERG. SYS.) GDR (R.100 SHS) 3, , ,

340 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets SINGAPORE ALLGREEN PROPERTIES 42, , CAPITALAND 21, , CITY DEVELOPMENTS 7, , DEVELOPMENT BANK SINGAPORE 14, , JURONG TECHNOLOGIES INDUSTRIAL 53, , KEPPEL 7, , KEPPEL LAND 39, , MMI HOLDINGS 29, , SINGAPORE PRESS HOLDING 11, , SINGAPORE TELECOMMUNICATIONS 264, , UNITED OVERSEAS BANK 10, , ,104, SOUTH KOREA CJ , DAEWOO ENGINEERING & CONSTRUCTION 1, , DAEWOO HEAVY INDUSTRIES MACHINERY 2, , HAN WHA 1, , HANA FINANCIAL HOLDINGS 1, , HANSOL PAPER , HYUNDAI DEPARTMENT STORE , HYUNDAI DEVELOPMENT CO 1, , KOOKMIN BANK 3, , KT & G CORP 1, , LG CORP 2, , LG ENG. & CONSTRUCTION , LG PHILIPS LCD 1, , NHN , POSCO , SAMSUNG 1, , SAMSUNG ELEC. GDR (1/2 VTG 144A) , SAMSUNG ELECTRONICS , SAMSUNG FIRE & MAR. INSUR , SAMSUNG HEAVY INDUSTRIES 3, , SHINHAN FINANCIAL GROUP 2, , SHINSEGAE , SK CORP 1, , SK TELECOM ADR REPR.1/90 SH 2, , ,108, SPAIN AGUAS DE BARCELONA 12, , AGUAS DE BARCELONA EM , BANCO SANTANDER CENTRAL HISPANO 12, , BCO BILBAO VIZCAYA ARGENT. NOM. 46, , DERMOESTETICA 19, , FOMENTO CONSTRUCCIONES CONTRATAS 5, , GAMESA CORP TECNOLOGICA SA 30, , GAS NATURAL SDG SA 1, , GRUPO FERROVIAL 1, ,

341 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets REPSOL YPF SA 8, , SOGECABLE 1, , TELEFONICA S.A. 141, ,280, ,297, SWEDEN BILLERUD 23, , ELECTROLUX B -FRIA- 3, , ENIRO 23, , ERICSSON TELEFON B 36, , FABEGE AB 6, , HENNES & MAURITZ B 2, , MODERN TIMES GROUP B 7, , NORDEA HOLDING (SEK) 18, , TELIASONERA 75, , VOLVO B 2, , ,107, SWITZERLAND ABB LTD NOM. 5, , BKW FMB ENERGIE NOM. 1, , CIBA SPECIALITES CHIM. HOLD. NOM. 5, , CLARIANT NOM. 4, , CS GROUP NOM. 2, , GEBERIT NOM , HOLCIM NOM , JULIUS BAER HOLDING 4, , NESTLE NOM. 3, ,042, NOBEL BIOCARE HOLDING (CHF) , NOVARTIS AG NOM. 3, , RIETER HOLDING NOM , ROCHE HOLDING AG 2, , SCHINDLER HOLDING B.PART. 7, , SPEEDEL HOLDING 1, , SUISSE REASSURANCE NOM , SULZER FRERES NOM , SWISSCOM NOM. 3, , UBS 5, , VALORA HOLDING NOM. 1, , ZURICH FINANCIAL SERVICE-REG (CHF) , ,602, TAIWAN ARDENTEC 40, , ASIA CEMENT 133, , ASUSTEK COMPUTER 135, , AU OPTRONICS 98, , CATCHER TECHNOLOGY 32, , CATHAY FINANCIAL 238, , CATHAY FINANCIAL GDR (R.10 SHS) 6, , CHANG HWA COMMERCIAL BANK 359, , CHI MEI OPTOELECTRONIC 28, , CHINA STEEL 378, , CHINATRUST FINANCIAL HOLDINGS 304, , CHUNGHWA TELECOM ADR (R.10 SHS) 4, ,

342 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets COMPAL COMMUNICATIONS 43, , COMPAL ELECTRONICS 31, , DELTA ELECTRONICS 38, , E. SUN FINANCIAL 163, , FAR EASTERN DEPARTMENT STORES 302, , FAR EASTERN TEXTILE 83, , FIRST FINANCIAL HLD 54, , FORMOSA INTL HOTELS 28, , FORMOSA PETROCHEMICAL 33, , FOXCONN TECHNOLOGY 9, , FUBON FINANCIAL 80, , HIGH TECH COMPUTER HON HAI PRECIS. IND. GDR (R. NOM S ) 8, , HON HAI PRECISION INDUSTRY 216, ,173, INVENTEC 107, , LES ENPHANTS 69, , LITE ON TECHNOLOGY 98, , MEDIATEK 33, , MEGA FINANCIAL HLDG 63, , NOVATEK MICROELECTRONICS 33, , POLARIS SECURITIES 474, , PRESIDENT ENTERPRISES 101, , PROMOS TECHNOLOGIES 542, , QUANTA COMPUTER 141, , SHIN KONG FINANCIAL HOLDING 105, , SILICONWARE PRECISION INDUSTRIES 50, , SILITECH TECHNOLOGY 13, , SINOPAC 404, , TAISHIN FINANCIAL HOLDINGS 450, , TAIWAN FERTILIZER 147, , TAIWAN SEMICONDUCTOR 862, ,357, TATUNG 140, , TEST-RITE INTL 49, , UNITED MICROELECTRONICS 203, , WALSIN LIHWA 322, , WISTRON CORP 140, , YA HSIN INDUSTRIAL 123, , YIEH PHUI ENTREPRISE 129, , YUANTA SECURITIES 97, , ,152, THAILAND AAPICO HITECH NVDR 28, , ADVANCED INFO SERV. NOM. FGN. 15, , BANGKOK BANK PUBLIC CO FGN NOM. 16, , BANK OF AYUDHYA NOM. FGN 94, , ITALIAN-THAI DEVELOPMENT -FGN- 151, , SIAM CEMENT PUBLIC FGN 3, , TRUE FGN 193, , ,

343 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets TURKEY AKSIGORTA 95, , ASYA KATILIM BANKASI B 40, , TURKCELL ILETISIM 34, , , UNITED KINGDOM AEGIS GROUP 218, , ASTRAZENECA (GBP) 13, , AVIVA 41, , BARCLAYS (NEW) 10, , BG GROUP 72, , BIFFA 59, , BP 52, , BT GROUP 341, ,558, CABLE & WIRELESS 46, , CADBURY SCHWEPPES 7, , CARNIVAL 6, , CENTRICA (NEW) 46, , CLOSE BROTHERS GROUP 23, , COMPASS GROUP PLC 9, , DIAGEO 20, , EMI GROUP 15, , GLAXOSMITHKLINE PLC 15, , HAMMERSON (STOCK UNITS) 3, , HBOS 17, , HSBC HOLDINGS (GBP) 17, , I. C. I. (UK) 30, , INTERNATIONAL POWER 11, , INTERTEK GROUP 15, , INVISTA REAL ESTATE INVESTMENT M. 148, , KELDA GROUP 36, , KENSINGTON GROUP 28, , LAND SECURITIES GROUP 4, , LEGAL & GENERAL GROUP PLC 45, , LLOYDS TSB GROUP 17, , MARKS & SPENCER GROUP 6, , MITTAL STEEL A 20, , NATIONAL EXPRESS GROUP 27, , NATIONAL GRID (NEW) 21, , NEXT GROUP 1, , NORTHUMBRIAN WATER 20, , OLD MUTUAL (ZAR) 132, , PEARSON 8, , PENNON GROUP (NEW) 52, , PLANT HEALTH CARE 27, , PRUDENTIAL 4, , REED ELSEVIER 18, , ROYAL BANK OF SCOTLAND GROUP 9, , ROYAL DUTCH SHELL A 25, , ROYAL DUTCH SHELL PLC-B SHS 4, , SEVERN TRENT (NEW) 58, ,286, SMITH & NEPHEW 9, ,

344 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets SOCO INTERNATIONAL 6, , STANDARD CHARTERED (GBP) 11, , TAYLOR WOODROW 7, , TEG ENVIRONMENTAL 25, , TESCO PLC 7, , UNILEVER NEW (GBP) 4, , UNITED UTILITIES 63, , VODAFONE GROUP (NEW) 972, ,056, WH SMITH 55, , WHITBREAD 25, , ,526, UNITED STATES ACHILLION PHARMACEUTICALS 7, , ALEXION PHARMACEUTICALS 24, , ALLIED WASTE INDUSTRIES 27, , ALLTEL 12, , ALNYLAM PHARMA 7, , AMERICAN STATES WATER 3, , AMERICAN TOWER A 18, , AMGEN 17, , AMYLIN PHARMACEUTICALS 27, , AQUA AMERICA 26, , AT & T (NEW) 74, ,008, BASIN WATER 1, , BELLSOUTH 28, ,001, BIOGEN IDEC 14, , CADIZ 4, , CALGON CARBON 22, , CALIFORNIA WATER SERVICE 3, , CATALYTIC SOLUTION 44, , CELGENE 32, ,441, CLARCOR 3, , COTHERIX 18, , COVANTA HOLDING 2, , CV THERAPEUTICS 37, , DANAHER 3, , DIONEX 8, , DONALDSON 7, , DYNAVAX TECHNOLOGIES 25, , EMBARQ -WHEN ISSUED- 8, , EQUINIX 3, , FLEXIBLE SOLUTIONS 7, , GENZYME (GENERAL DIVISION) 24, ,123, GILEAD SCIENCES 24, ,216, HENDRX 13, , HUMAN GENOME SCIENCES 56, , ICOS 31, , ILLUMINA 23, , INSTITUFORM TECHNOLOGIES A 9, , INTERMUNE 34, , INVITROGEN 12, , ITT INDUSTRIES 23, ,

345 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets KERYX BIOPHARMACEUTICALS 18, , LINDSAY MANUFACTURING 4, , MEDICINES 28, , MEDIMMUNE 21, , MIDDLESEX WATER 1, , MILLENNIUM PHARMACEUTICALS 39, , MILLIPORE 6, , NALCO HOLDING 13, , ONYX PHARMACEUTICALS 32, , OSI PHARMACEUTICALS 14, , PALL 9, , PENNICHUCK 2, , PENTAIR 14, , PERMA FIX ENVIRONNEMENTAL SERVICE 30, , PHARMION 22, , PROGENICS PHARM 21, , REPUBLIC SERVICES 6, , ROPER INDUSTRIES 7, , SIRNA THERAPEUTICS 19, , SOUTHWEST WATER 8, , SPRINT 59, , TANOX 33, , TETRA TECH 14, , TORO 3, , VERIZON COMMUNICATIONS 68, ,941, WASTE CONNECTIONS 3, , WASTE MANAGEMENT 30, , WATTS WATER TECHNOLOGIES 6, , WINDSTREAM W-ISSUED 18, , YORK WATER 1, , ,510, TOTAL SHARES 133,846, RIGHTS SINGAPORE ALLGREEN PROPERTIES RTS , , , TOTAL RIGHTS 7, UNITS OF INVESTMENT FUNDS CAYMAN ISLANDS VIETNAM ENTERPRISE INVEST. C NEW 21, , VIETNAM ENTERPRISE INVESTMENTS 14, , VIETNAM GROWTH FUND 1, , , HONG KONG THE LINK REIT 94, , ,

346 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets LUXEMBOURG ISHARES MSCI TAIWAN INDEX FUND 48, , , SINGAPORE CAPITARETAIL CHINA TRUST 32, , , TOTAL UNITS OF INVESTMENT FUNDS 807, WARRANTS FRANCE WULIANGYE YIBIN WRT (BNP) , , , NETHERLANDS ANTILLES CHINA MER.BK (ML) LEPO WRT , , YIBIN WULIAN (ML) LEPO.WTS , , , TOTAL WARRANTS 567, TOTAL I. 135,228, II. OTHER TRANSFERABLE SECURITIES SHARES CHILE INVERSIONES AGUAS MET. -ADR-REG. S 11, , , FRANCE X & MAIL (STE DES COLLABORATEURS) 5, PORTUGAL KIWI II VENT. PREF. A LIB % SWEDEN WIRELESS HOUSE A 1, SWITZERLAND ALBERT-INC UNITED STATES IBIQUITY DIGITAL A 3, , INTARCIA THERAPEUTICS CV. PREF. C 10, , INTARCIA THERAPEUTICS PREF. E 30, , METABOLEX PREF. A METABOLEX PREF. B1 18, , PTC THERAPEUTICS PREF. C 4, , PTC THERAPEUTICS PREF. D 3, , , TOTAL SHARES 281,

347 Pictet Funds (LUX) - Absolute Return Global Diversified STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets RIGHTS HONG KONG NEW WORLD DEVELOPMENT RTS , , , UNITED KINGDOM CABLE & WIRELESS RTS , , HSBC HOLDING RTS , , NATIONAL GRID (NEW) RTS , , VODAFONE GROUP RTS ,076, , WHITBREAD RTS , , TOTAL RIGHTS 48, BONDS CANADA 10% HIGHPOINT TEL. II CV 00/04 USD 31, TOTAL BONDS UNITS OF INVESTMENT FUNDS UNITED STATES PTC THERAPEUTICS PREF. CV E , , TOTAL UNITS OF INVESTMENT FUNDS 2, WARRANTS CANADA BIOTEQ ENV.WRT , , , UNITED KINGDOM CHINA MERCHANT (GS).WTS , , , UNITED STATES FLEXIBLE SOLUTIONS WRT INNER MONG.YI LI (BNP) WRT , , , TOTAL WARRANTS 163, TOTAL II. 496, TOTAL INVESTMENTS 135,725, CASH AT BANKS 83,714, OTHER NET LIABILITIES -1,946, TOTAL NET ASSETS 217,494,

348 Pictet Funds (LUX) - Absolute Return Global Diversified GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States United Kingdom 8.59 China 4.12 France 3.86 Taiwan 3.76 Hong Kong 3.42 Japan 2.73 Switzerland 2.60 Germany 2.58 Spain 2.44 Italy 2.29 Greece 1.14 Netherlands 1.08 South Korea 0.96 Sweden 0.96 Denmark 0.94 Norway 0.90 Austria 0.73 Canada 0.69 Finland 0.57 Singapore 0.53 Bermuda 0.52 Belgium 0.32 Cayman Islands 0.29 Luxembourg 0.25 Russia 0.24 Turkey 0.23 Ireland 0.22 Malaysia 0.21 Netherlands Antilles 0.19 New Zealand 0.19 Australia 0.16 Indonesia 0.15 Czech Republic 0.13 Kazakhstan 0.12 Chile 0.10 Hungary 0.10 Mexico 0.09 Philippines 0.09 Thailand 0.08 Portugal 0.06 Egypt 0.05 Bahamas 0.04 Brazil 0.04 India Industrial classification (in % of net assets) Communications Pharmaceuticals and cosmetics 6.41 Banks and credit institutions 5.90 Electronics and electrical equipment 4.36 Utilities 4.30 Holding and financial companies 3.27 Oil 2.50 Construction of machines and appliances 2.44 Biotechnology 1.88 Chemicals 1.85 Insurance 1.71 Environmental conservation and waste management 1.64 Food and soft drinks 1.63 Construction and building materials 1.32 Real estate 1.19 Mining and steelworks 1.11 Retail and supermarkets 0.93 Internet, software and IT services 0.87 Gastronomy 0.68 Tobacco and alcohol 0.65 Transport and freight 0.64 Computer and office equipment 0.59 Road vehicles 0.45 Miscellaneous services 0.41 Units of investment funds 0.38 Warrants 0.34 Miscellaneous trade 0.33 Paper and forest products 0.32 Precious metals and stones 0.32 Stainless steel 0.32 Miscellaneous consumer goods 0.24 Publishing and graphic arts 0.22 Agriculture and fishing 0.22 Environmental and recycling services 0.16 Aeronautics and astronautics 0.09 Photography and optics 0.09 Tyres and rubber 0.09 Conglomerates 0.09 Textiles and clothing 0.08 Public healthcare and social services 0.08 Watch-making 0.06 Leisure 0.03 Packaging

349 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets I. TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES AUSTRIA ANDRITZ , BOEHLER-UDDEHOLM , BWIN , ERSTE BANK DER OESTER. SPARKASSEN , FLUGHAFEN WIEN , IMMOEAST IMMOBILIEN , IMMOFINANZ IMMOBILIEN ANLAGEN 1, , MAYR-MELNHOF KARTON , OESTER. ELEKTR. WIRT. A , OMV , RAIFFEISEN INT. BANK-HOLDING , RHI , TELEKOM AUSTRIA 1, , VOEST-ALPINE , WIENER STAEDTISCHE , WIENERBERGER BAUSTOFFINDUSTRIE , , BELGIUM AGFA-GEVAERT , BARCO (NEW) , BEKAERT , BELGACOM , COFINIMMO , COLRUYT (ETBLISSEMENTS FR.) , COMPAGNIE MARITIME BELGE , DEXIA 2, , D IETEREN , EURONAV , FORTIS 4, , GBL (GROUPE BRUXELLES LAMBERT) , GROUPE DELHAIZE , INBEV , KBC BANCASSURANCE HOLDING , MOBISTAR , OMEGA PHARMA , SOLVAY , U.C.B , UMICORE , , FINLAND AMER GROUP A , CARGOTEC B , ELISA COMMUNICATIONS A , FORTUM 1, , KCI KONECRANES INTERNATIONAL , KESKO , KONE B ,

350 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets METSO , NESTE OIL , NOKIA OYJ 14, , NOKIAN TYRES , OKOBANK A , ORION B (NEW) , OUTOKUMPU A , RAUTARUUKKI K , SAMPO OYJ 1, , SANOMA-WSOY B , STORA ENSO R 2, , TIETOENATOR , UPM-KYMMENE 1, , UPONOR A , WARTSILA B , YIT-YHTYMAE , , FRANCE ACCOR , AIR FRANCE - KLM , AIR LIQUIDE , ALCATEL SA 8, , ALSTOM NEW , ATOS ORIGIN , AUTOROUTE PARIS RHIN RHONE , AXA 6, , BIC , BNP PARIBAS 3, , BOUYGUES , BUSINESS OBJECTS , CAP GEMINI , CARREFOUR SA 2, , CASINO GUICHARD PERRACHON , CNP ASSURANCES , CREDIT AGRICOLE 2, , DANONE GROUPE (CHF) , DASSAULT SYSTEMES , ESSILOR INTERNATIONAL , FRANCE TELECOM SA 6, , GAZ DE FRANCE , GECINA , HERMES INTERNATIONAL , IMERYS (EX-IMETAL) , KLEPIERRE , LAFARGE , LAGARDERE GROUPE NOM , L OREAL 1, , LVMH , M6 METROPOLE TV , MICHELIN B NOM , NEOPOST , PAGES JAUNES ,

351 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets PERNOD-RICARD , PEUGEOT PORT , PPR , PUBLICIS , RENAULT SA , SAGEM PROV. ECHANGE , SAINT GOBAIN 1, , SANOFI AVENTIS 3, , SCHNEIDER (EX-SPIE BATIGNOLES) , SCOR 3, , SOCIETE GENERALE 1, , SODEXHO ALLIANCE , SUEZ 3, , TECHNIP-COFLEXIP , TF1 -TELEVISION FRANCAISE , THALES (EX-THOMSON CSF) , THOMSON (EX-TMM) , TOTAL SA 7, , UNIBAIL , VALEO , VALLOUREC USINES A TUBES , VEOLIA ENVIRONNEMENT 1, , VINCI , VIVENDI UNIVERSAL 4, , ZODIAC , ,358, GERMANY ADIDAS-SALOMON , ALLIANZ NOM. 1, , ALTANA INDUSTRIE-AKTIEN & ANLAGEN , BASF 1, , BAYER (EUR) 2, , BEIERSDORF , BILFINGER BERGER , CELESIO , COMMERZBANK 2, , CONTINENTAL GUMMIWERKE , DAIMLERCHRYSLER NOM. (EUR) 3, , DEUTSCHE BANK NOM. 1, , DEUTSCHE BOERSE NOM , DEUTSCHE LUFTHANSA NOM , DEUTSCHE POST AG-REG 2, , DEUTSCHE POSTBANK , DEUTSCHE TELEKOM NOM. 10, , DOUGLAS HOLDING , E. ON AG 2, , FRESENIUS MEDICAL CARE , HEIDELBERGER DRUCKMASCHINEN , HENKEL PREF. N-VTG , HOCHTIEF , HYPO REAL ESTATE , INFINEON TECHNOLOGIES NOM. 2, ,

352 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets IVG HOLDING , KARSTADTQUELLE AG , LINDE , MAN , MERCK , METRO AG , MLP , MUENCHENER RUECKVER AG-REG , PORSCHE PREF , PREMIERE , PROSIEBEN SAT.1 MEDIA PREF. N-VTG , PUMA , R. W. E. A 1, , R. W. E. PREF. N-VTG , RHEINMETALL , SALZGITTER AG , SAP (EUR) 3, , SIEMENS NOM. 3, , SOLARWORLD , SUEDZUCKER , THYSSENKRUPP 1, , TUI (NEW) , VOLKSWAGEN (EUR) , VOLKSWAGEN PREF , WINCOR NIXDORF , ,587, GREECE ALPHA CREDIT BANK 1, , BANK OF PIRAEUS , COCA COLA HELLENIC BOTTLING , COSMOTE NOM , EFG EUROBANK , FOLI FOLLIE NOM , HELLENIC EXCHANGE HOLDING NOM , HELLENIC PETROLEUM , HELLENIC TECHNODOMIKI , HELLENIC TELECOMM. ORGANIZATIONS 1, , INTRACOM NOM , MOTOR OIL (HELLAS) CORINTH REFINER , NATIONAL BANK OF GREECE 1, , OPAP , PUBLIC POWER CORP OF GREECE NOM , TECHNICAL OLYMPIC TITAN CEMENT NOM , VIOHALCO , , IRELAND ALLIED IRISH BANKS 3, , BANK OF IRELAND (GOV&CO) 3, , C&C GROUP 1, , CRH (EUR) 1, , DCC ,

353 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets DEPFA BANK 1, , ELAN 1, , FYFFES 1, , GRAFTON GROUP UNITS , GREENCORE GROUP , IAWS GROUP , INDEPENDENT NEWS & MEDIA 1, , IRISH LIFE & PERMANENT (EUR) 1, , KERRY GROUP A , KINGSPAN GROUP (EUR) , PADDY POWER , RYANAIR HOLDINGS , , ITALY ALLEANZA ASSICURAZIONI 1, , ASSICURATRICE UNIPOL PREF. 3, , ASSICURAZIONI GENERALI 3, , AUTOGRILL , AUTOSTRADE 1, , BANCA INTESA 14, , BANCA INTESA (AZ. DI RISP.) 3, , BANCA POPOLARE DI MILANO 1, , BANCA POPOLARE DI VERONA E NOVARA 1, , BANCHE POPOLARI UNITE 1, , BENETTON GROUP , BULGARI , CAPITALIA 6, , ENEL ENTE NAZION. ENERGIA ELETTR. 15, , ENI 9, , FIAT 1, , FINMECCANICA 1, , FONDIARIA-SAI , GRUPPO EDITORIALE L ESPRESSO , ITALCEMENTI , LOTTOMATICA NEW , LUXOTTICA GROUP , MEDIASET 2, , MEDIOBANCA 1, , MEDIOLANUM , MONDADORI , MONTE PASCHI SIENA 3, , PIRELLI & CIE 10, , SAN PAOLO-IMI 4, , SEAT PAGINE GIALLE (NEW) 13, , SNAM RETE GAS 3, , T. E. R. N. A 4, , TELECOM ITALIA 38, , TELECOM ITALIA-RNC 21, , TISCALI , UNICREDITO ITALIANO SPA 28, , ,355,

354 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets JERSEY MEINL EURO LAND , , NETHERLANDS ABN AMRO HOLDING 6, , AEGON 5, , AKZO NOBEL , ASML HOLDING 1, , BUHRMANN , CORIO , EURONEXT (NEW) , EUROPEAN AERONAUTIC DEFENCE SPACE 1, , FUGRO CRT , GETRONICS , HAGEMEYER 1, , HEINEKEN , ING GROEP (CERT.) 6, , KONINKLIJKE AHOLD NV 5, , KONINKLIJKE DSM (NEW) , KPN KONINKLIJKE 6, , NUMICO KONINKLIJKE NV , OCE , QIAGEN , RANDSTAD HOLDING , REED ELSEVIER 2, , RODAMCO EUROPE , ROYAL PHILIPS (EUR) 4, , SBM OFFSHORE , STMICROELECTRONICS 2, , TNT NV 1, , UNILEVER NEW (EUR) 6, , VEDIOR , WERELDHAVE , WOLTERS KLUWER 1, , ,290, PORTUGAL BANCO COMERCIAL PORTUGUES NOM. 7, , BANCO ESPIRITO SANTO NOM , BPI-SGPS NOM. 1, , BRISA AUTO-ESTRADAS-PRIV SHR 1, , CIMPOR (CIMENTOS PORTUGAL) NOM , EDP (ELECTRIC. DE PORTUGAL) NOM. 7, , JERONIMO MARTINS , PORTUGAL TELECOM NOM. 2, , PT MULTIMEDIA , SONAE INDUSTRIA SGPS , SONAE SGPS 3, , ,

355 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets SPAIN ABERTIS INFRAESTRUCTURAS , ACCIONA , ACERINOX SA , ACS , AGUAS DE BARCELONA , AGUAS DE BARCELONA EM ALTADIS A , ANTENA 3 TELEVISION , BANCO POPULAR ESPANOL 3, , BANCO SANTANDER CENTRAL HISPANO 21, , BCO BILBAO VIZCAYA ARGENT. NOM. 12, , CINTRA , CORPORACION MAPFRE 1, , EBRO PULEVA , ENDESA S.A. 2, , FADESA INMOBILIARIA SA , FOMENTO CONSTRUCCIONES CONTRATAS , GAMESA CORP TECNOLOGICA SA , GAS NATURAL SDG SA , GRUPO FERROVIAL , GRUPO PRISA , IBERDROLA 2, , IBERIA NOM. A 1, , INDITEX NOM , INDRA SISTEMAS , NH HOTELES S.A , REPSOL YPF SA 3, , SACYR VALLEHERMOSO SA , SOGECABLE , TELEFONICA S.A. 16, , UNION FENOSA , ZELTIA , ,421, UNITED KINGDOM MITTAL STEEL A 2, , , TOTAL SHARES 11,926, RIGHTS FRANCE SUEZ STRIP VVPR TOTAL VVPR GERMANY HEIDELBERGCEMENT STRIP VVPR TOTAL RIGHTS TOTAL I. 11,926,

356 Pictet Funds (LUX) - Euroland Index STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN EUR) Description Quantity Market value (note 2) % of net assets II. OTHER TRANSFERABLE SECURITIES RIGHTS ITALY AUTOSTRADE RTS TOTAL II TOTAL INVESTMENTS 11,926, BANK OVERDRAFT -9, OTHER NET LIABILITIES -3, TOTAL NET ASSETS 11,912,

357 Pictet Funds (LUX) - Euroland Index GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) France Germany Spain Italy Netherlands Finland 4.20 Belgium 3.70 Ireland 2.80 Greece 1.89 Austria 1.67 Portugal 1.01 United Kingdom 0.68 Jersey Industrial classification (in % of net assets) Banks and credit institutions Communications Utilities 8.21 Oil 6.85 Insurance 6.77 Electronics and electrical equipment 4.58 Chemicals 3.97 Construction and building materials 3.80 Pharmaceuticals and cosmetics 3.55 Road vehicles 3.38 Holding and financial companies 2.73 Food and soft drinks 2.41 Retail and supermarkets 2.18 Construction of machines and appliances 2.09 Transport and freight 1.85 Mining and steelworks 1.82 Tobacco and alcohol 1.37 Internet, software and IT services 1.16 Real estate 0.85 Publishing and graphic arts 0.81 Gastronomy 0.74 Miscellaneous consumer goods 0.71 Tyres and rubber 0.70 Textiles and clothing 0.59 Aeronautics and astronautics 0.50 Environmental conservation and waste management 0.46 Photography and optics 0.40 Leisure 0.39 Paper and forest products 0.35 Computer and office equipment 0.35 Conglomerates 0.18 Stainless steel 0.13 Precious metals and stones 0.11 Miscellaneous trade 0.10 Agriculture and fishing 0.07 Aluminium 0.03 Miscellaneous services 0.03 Packaging

358 Pictet Funds (LUX) - US Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES CANADA RESEARCH IN MOTION 44, ,806, ,806, GERMANY SAP -ADR SPONS- 45, ,427, ,427, NETHERLANDS ANTILLES SCHLUMBERGER (CURACAO) 89, ,685, ,685, SWITZERLAND ALCON 23, ,617, ROCHE HOLDING SPONS.ADR 24, ,187, UBS 96, ,848, ,653, UNITED STATES ABBOTT LABORATORIES 45, ,214, ADOBE SYSTEMS INC 164, ,825, AFLAC 26, ,215, ALLERGAN 33, ,051, APPLE COMPUTER INC 82, ,643, AUTOMATIC DATA PROCESSING 49, ,413, BAXTER INTERNATIONAL 91, ,266, BOEING 42, ,809, BROADCOM CORP-CL A 68, ,217, CHECKFREE 58, ,374, CHICAGO MERCANTILE EXCH. HOLD. A 15, ,873, CISCO SYSTEMS INC 411, ,287, COLGATE PALMOLIVE 144, ,524, DENTSPLY INTL 69, ,090, ELECTRONIC ARTS 121, ,136, EMERSON ELECTRIC 41, ,831, EXPEDITORS INTL OF WASHINGTON 77, ,165, GENENTECH 81, ,618, GENERAL DYNAMICS 60, ,529, GENERAL ELECTRIC 209, ,868, GILEAD SCIENCES 117, ,688, GOLDMAN SACHS GROUP INC 27, ,592, GOOGLE A 14, ,707, HARLEY DAVIDSON 16, ,135, HARMAN INTERNATIONAL INDUSTRIES 15, ,539, INTERNATIONAL GAME TECHNOLOGY 104, ,836, JOHNSON & JOHNSON 108, ,193, KOHLS CORP 23, ,578, LAS VEGAS SANDS 67, ,093, MEDTRONIC 69, ,716, MICROCHIP TECHNOLOGY 146, ,793, MICROSOFT CORP 271, ,127, MONSANTO (NEW) 162, ,646,

359 Pictet Funds (LUX) - US Equity Selection STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets NYMEX HOLDINGS 6, , PAYCHEX 128, ,099, PEPSICO 121, ,713, PROCTER & GAMBLE (USD) 122, ,911, QUALCOMM INC 59, ,225, SCHERING PLOUGH 104, ,482, SLM 52, ,552, SMITH INTERNATIONAL 165, ,853, TARGET CORP 30, ,724, WALGREEN CO 53, ,441, ,394, TOTAL INVESTMENTS 228,966, CASH AT BANKS 6,120, OTHER NET LIABILITIES -894, TOTAL NET ASSETS 234,192,

360 Pictet Funds (LUX) - US Equity Selection GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Switzerland 4.55 Canada 2.48 Netherlands Antilles 2.43 Germany Industrial classification (in % of net assets) Pharmaceuticals and cosmetics Computer and office equipment Electronics and electrical equipment 8.60 Oil 5.36 Banks and credit institutions 4.89 Holding and financial companies 4.78 Chemicals 3.69 Aeronautics and astronautics 3.56 Conglomerates 3.36 Food and soft drinks 3.29 Internet, software and IT services 2.86 Gastronomy 2.60 Retail and supermarkets 2.45 Leisure 2.07 Communications 1.90 Transport and freight 1.35 Insurance 0.52 Road vehicles

361 Pictet Funds (LUX) - Security STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BERMUDA INGERSOLL-RAND A 65, ,551, TYCO INTERNATIONAL 97, ,977, ,529, CANADA GARDA WORLD SECURITY 145, ,779, ,779, FINLAND F-SECURE 251, , , FRANCE BACOU-DALLOZ 21, ,832, ,832, GERMANY WIRECARD 158, ,649, ,649, ISRAEL ALADDIN KNOWLEDGE SYSTEM 50, , CHECK POINT SOFTWARE TECH 107, ,361, NICE SYSTEMS ADR 92, ,846, ,163, JAPAN SECOM TECHNO SVC 45, ,828, SOHGO SECURITY SERVICES 67, ,350, ,179, NETHERLANDS AXALTO 88, ,197, UNIT 4 AGRESSO 85, ,995, ,192, SOUTH KOREA S1 CORP 40, ,868, ,868, SPAIN PROSEGUR NOM. 43, ,397, ,397, SWEDEN ASSA ABLOY B 163, ,492, SECURITAS B 250, ,819, ,312, SWITZERLAND KABA HOLDING NOM. 7, ,273, ,273, TAIWAN AV TECH 599, ,797, TAIWAN SOGO SHINKONG SECURITY 980, , ,717,

362 Pictet Funds (LUX) - Security STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets UNITED KINGDOM GROUP 4 SECURICOR 930, ,448, NDS GROUP A SPONS. ADR 28, ,344, ,792, UNITED STATES ACTIVIDENTITY CORP 165, , ADOBE SYSTEMS INC 46, ,910, APPLE COMPUTER INC 15, ,253, AUTOLIV 65, ,946, CISCO SYSTEMS INC 120, ,290, CITRIX SYSTEMS 43, ,170, EMC CORP/MASS 179, ,393, FEDERAL SIGNAL 58, , IDEX 29, ,387, INTL BUSINESS MACHINES CORP 37, ,587, LOJACK 51, , MACROVISION 82, ,322, MC AFEE 100, ,875, MICROSOFT CORP 96, ,893, RURAL/METRO 190, ,540, SONICWALL 139, ,188, STANLEY WORKS 53, ,664, SYMANTEC CORP 114, ,425, VASCO DATA SECURITY 188, ,277, VERISIGN 66, ,602, WEBSENSE 57, ,309, ,705, TOTAL INVESTMENTS 91,143, CASH AT BANKS 3,271, OTHER NET LIABILITIES -211, TOTAL NET ASSETS 94,203,

363 Pictet Funds (LUX) - Security GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Sweden 7.76 Israel 6.54 Bermuda 5.87 United Kingdom 5.09 Netherlands 4.45 Taiwan 3.95 Japan 3.37 France 3.01 Canada 2.95 Switzerland 2.41 South Korea 1.98 Germany 1.75 Spain 1.48 Finland Industrial classification (in % of net assets) Computer and office equipment Electronics and electrical equipment Miscellaneous services Internet, software and IT services 9.65 Construction of machines and appliances 8.01 Communications 4.88 Road vehicles 4.19 Paper and forest products 4.05 Textiles and clothing 3.01 Pharmaceuticals and cosmetics 1.64 Miscellaneous trade

364 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets TRANSFERABLE SECURITIES ADMITTED TO OFFICIAL EXCHANGE LISTING SHARES BERMUDA ACCENTURE A , AXIS CAPITAL , COOPER INDUSTRIES A , INGERSOLL-RAND A , PARTNERRE , TYCO INTERNATIONAL 2, , WEATHERFORD , , CANADA ULTRA PETROLEUM , , CAYMAN ISLANDS ACE , GARMIN NOM , GLOBALSANTAFE , NOBLE , , NETHERLANDS ANTILLES SCHLUMBERGER (CURACAO) 1, , , PANAMA CARNIVAL TWIN , , SINGAPORE FLEXTRONICS INTERNATIONAL 3, , , UNITED STATES 3 M 1, , ABBOTT LABORATORIES 2, , ABERCROMBIE & FITCH A , ACTIVISION , ADOBE SYSTEMS INC , ADVANCED MICRO DEVICES (USD) , AES , AETNA , AFFILIATED COMPUTER A , AFLAC 1, , AGILENT TECHNOLOGIES 1, , AIR PRODUCTS & CHEMICALS , ALLEGHENY TECHNOLOGIES , ALLIANT ENERGY , ALLIED CAPITAL 1, , ALLSTATE , ALLTEL , ALTERA , ALTRIA GROUP (USD) 2, ,

365 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets AMAZON. COM , AMB PROPERTY , AMBAC FINANCIAL GROUP , AMEREN CORPORATION , AMERICAN ELECTRIC POWER , AMERICAN EXPRESS 1, , AMERICAN INTERNATIONAL GROUP 2, , AMERICAN POWER CONVERSION , AMERICAN STANDARD COMPANIES , AMERIPRISE FINANCIAL W-ISSUED , AMGEN 1, , AMPHENOL A , AMYLIN PHARMACEUTICALS , ANADARKO PETROLEUM , ANALOG DEVICES , ANHEUSER-BUSCH (USD) 1, , AON , APACHE , APARTMENT INVESTMENT & MANAGEMENT , APOLLO GROUP A , APPLE COMPUTER INC 1, , APPLERA (APPLIED BIOSYSTEMS GR.) , APPLIED MATERIALS INC 2, , AQUA AMERICA , ARAMARK B 1, , ARCH COAL , ARCHER-DANIELS MIDLAND , ARCHSTONE-SMITH REIT , ARROW ELECTRONICS , ASSOCIATED BANC-CORP , AT & T (NEW) 3, , AT & T COMCAST A (SPECIAL) 1, , AUTOMATIC DATA PROCESSING , AUTONATION 1, , AUTOZONE , AVALONBAY COMMUNITIES , AVAYA INC 2, , AVERY DENNISON , BAKER HUGHES , BALL , BANK OF AMERICA 6, , BANK OF NEW YORK 1, , BAXTER INTERNATIONAL , BB & T , BEA SYSTEMS 2, , BECKMAN COULTER , BED BATH & BEYOND INC 1, , BELLSOUTH 2, , BEST BUY , BIOMET , BJ SERVICES , BLACK & DECKER ,

366 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets BOEING , BRINKER INTERNATIONAL , BRISTOL MYERS SQUIBB CO 2, , BROADCOM CORP-CL A , BROWN & BROWN 1, , BRUNSWICK CORP , BURLINGTON NORTHERN SANTA FE , C.A. 1, , CADENCE DESIGN SYSTEMS , CAPITAL ONE FINANCIAL , CARDINAL HEALTH , CAREMARK RX , CARMAX , CATERPILLAR , CDW CORP , CENTERPOINT ENERGY , CENTEX , CERIDIAN , CHARLES SCHWAB 2, , CHESAPEAKE ENERGY , CHEVRONTEXACO 2, , CHICAGO MERCANTILE EXCH. HOLD. A , CHICO S FAS , CIMAREX ENERGY 1, , CINCINNATI FINANCIAL , CINTAS , CIRCUIT CITY STORES 1, , CISCO SYSTEMS INC 6, , CITIGROUP 6, , CITRIX SYSTEMS , CLEAR CHANNEL COMMUNICATIONS , CLOROX , COACH , COCA-COLA 2, , COLONIAL BANCGROUP , COMCAST A 1, , COMERICA , COMMERCE BANCORP , COMPASS BANCSHARES , COMPUTER SCIENCES , COMVERSE TECHNOLOGY INC 1, , CONAGRA FOODS 1, , CONSOL ENERGY 1, , CONSOLIDATED EDISON , CONSTELLATION BRANDS A , CONVERGYS , COOPER COMPANIES , CORNING (USD) 2, , CORPORATE EXECUTIVE BOARD , COSTCO WHOLESALE , COUNTRYWIDE FINANCIAL , COVANCE ,

367 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets COVENTRY HEALTH CARE , CR BARD , CROWN CASTLE INTERNATIONAL , CSX , CUMMINS , CVS 1, , DANAHER , DARDEN RESTAURANTS , DAVITA , DEAN FOODS , DELL INC , DENBURY RESOURCES 1, , DENTSPLY INTL , DEVELOPERS DIVERSIFIED REALTY , DEVON ENERGY , DIAMOND OFFSHORE DRILLING , DIRECTV GROUP , DISCOVERY HOLDING A , DOLLAR GENERAL , DOMINION RESOURCES , DONNELLEY & SONS , DOVER , DOW CHEMICAL 1, , DST SYSTEMS , DU PONT DE NEMOURS 1, , DUKE ENERGY 1, , DUN & BRADSTREET , E TRADE FINANCIAL , EASTMAN KODAK , EATON , EBAY 1, , ECHOSTAR COMMUNICATIONS A , ECOLAB , EDISON INTERNATIONAL , EL PASO , ELI LILLY 1, , EMBARQ -WHEN ISSUED , EMC CORP/MASS 3, , ENERGIZER HOLDINGS , ENERGY EAST , ENSCO INTERNATIONAL , EOG RESOURCES , EQUIFAX , EQUITABLE RESOURCES INC , EQUITY OFFICE PROPERTIES 1, , EQUITY RESIDENTIAL (SBI) , ESTEE LAUDER A , EXELON 1, , EXPEDITORS INTL OF WASHINGTON , EXXON MOBIL 7, , FAMILY DOLLAR STORE 1, , FANNIE MAE 1, ,

368 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets FASTENAL , FEDERAL REALTY INVEST.TRUST-SBI , FEDERATED DEPARTMENT STORES , FEDEX , FIDELITY NATIONAL , FIFTH THIRD BANCORP , FIRST AMERICAN CORP , FIRST HORIZON NATIONAL , FIRSTENERGY , FISERV , FMC TECHNOLOGIES , FOOT LOCKER , FORTUNE BRANDS , FREDDIE MAC , FREEPORT MCMORAN COPPER & GOLD B , GANNETT , GAP 2, , GENENTECH , GENERAL DYNAMICS , GENERAL ELECTRIC 14, , GENERAL MILLS 1, , GENERAL MOTORS 1, , GENUINE PARTS , GENWORTH FINANCIAL -A- 1, , GENZYME (GENERAL DIVISION) , GILEAD SCIENCES 1, , GOLDMAN SACHS GROUP INC , GOOGLE A , GRANT PRIDECO , HALLIBURTON 2, , HARLEY DAVIDSON , HARMAN INTERNATIONAL INDUSTRIES , HARRAHS ENTERTAINMENT , HARSCO , HARTFORD FINANCIAL SERVICES GROUP , HASBRO 1, , HEALTH MANAGEMENT ASSOCIATES A , HEINZ H. J. CO , HERSHEY FOODS , HEWLETT PACKARD 2, , HILTON HOTELS , HOME DEPOT 2, , HONEYWELL INTERNATIONAL 1, , HOSPIRA , HUDSON CITY BANCORP 2, , HUNTINGTON BANCSHARES , IDEARC , ILLINOIS TOOL WORKS , IMS HEALTH 1, , INTEL CORP 9, , INTERNATIONAL GAME TECHNOLOGY , INTERNATIONAL PAPER ,

369 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets INTERPUBLIC GROUP , INTERSIL A , INTL BUSINESS MACHINES CORP 2, , INTUIT 1, , INVITROGEN , IRON MOUNTAIN , ITT INDUSTRIES , JABIL CIRCUIT , JANUS CAPITAL GROUP , JOHNSON & JOHNSON 4, , JOHNSON CONTROLS , JONES APPAREL GROUP , JP MORGAN CHASE 4, , KELLOGG , KEYCORP 1, , KEYSPAN , KIMBERLY CLARK , KIMCO REALTY , KINDER MORGAN , KLA-TENCOR CORPORATION , KRAFT FOODS A 1, , KROGER 2, , LABORATORY CORP OF AMERICA HOLD , LAM RESEARCH NOM , LAMAR ADVERTISING A , LEGGETT & PLATT , LEHMAN BROTHERS HOLDINGS , LEUCADIA NATIONAL , LEXMARK INTERNATIONAL A , LIBERTY GLOBAL C , LIBERTY MEDIA HOLD. A (INTERACT.) , LIBERTY MEDIA HOLDING , LIBERTY PROPERTY TRUST , LINEAR TECHNOLOGY , LIZ CLAIBORNE , LOCKHEED MARTIN , LOWE S COS INC 2, , LSI LOGIC , LYONDELL CHEMICAL 1, , M & T BANK , MACERICH , MANPOWER , MARRIOTT INTERNATIONAL A , MARSHALL & ILSLEY , MARTIN MARIETTA , MATTEL 1, , MAXIM INTEGRATED PRODUCTS , MC GRAW-HILL , MCCORMICK NON-VTG , MCDONALD S 1, , MEDCO HEALTH SOLUTIONS , MEDIMMUNE ,

370 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets MEDTRONIC , MELLON FINANCIAL , MERCANTILE BANKSHARES , MERCK & CO 3, , MERRILL LYNCH & CO 1, , METLIFE , MGIC INVESTMENT , MICROCHIP TECHNOLOGY , MICROSOFT CORP 12, , MILLENNIUM PHARMACEUTICALS , MOHAWK INDUSTRIES , MONSANTO (NEW) , MOODY S W. I , MORGAN STANLEY 1, , MOTOROLA 4, , NABORS INDUSTRIES LTD , NATIONAL CITY , NATIONAL SEMICONDUCTOR , NEW YORK COMMUNITY BANCORP , NEWELL RUBBERMAID 1, , NEWS CORP. B , NEWS CORP-CL A 2, , NII HOLDINGS B 1, , NIKE B , NISOURCE , NOBLE ENERGY , NORFOLK SOUTHERN 1, , NORTHERN TRUST , NORTHROP GRUMMAN , NOVELLUS SYSTEMS , NTL , NUCOR , NVR , OCCIDENTAL PETROLEUM 1, , OFFICE DEPOT 1, , OLD REPUBLIC INTERNATIONAL , OMNICARE , OMNICOM GROUP , ORACLE CORP 5, , OSHKOSH TRUCK , PACTIV , PALL 1, , PARKER HANNIFIN , PAYCHEX 1, , PEABODY ENERGY , PEPCO HOLDINGS , PEPSICO 2, , PETSMART , PFIZER INC 10, , PG & E , PINNACLE WEST CAPITAL , PIONEER NATURAL RESOURCES ,

371 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets PITNEY BOWES , PLUM CREEK TIMBER , PMI GROUP , PNC FINANCIAL SERVICES , PPG INDUSTRIES , PPL , PRAXAIR , PROCTER & GAMBLE (USD) 3, , PROGRESS ENERGY , PROGRESSIVE 2, , PROLOGIS (SBI) , Q LOGIC , QUALCOMM INC 2, , QUEST DIAGNOSTICS , QUESTAR , QWEST COMMUNICATIONS INT. 10, , RADIAN GROUP , RADIOSHACK , RANGE RESOURCES , REGENCY CENTERS , REGIONS FINANCIAL 1, , ROBERT HALF INTERNATIONAL , ROCKWELL AUTOMATION (NEW) , ROHM & HAAS , ROWAN COMPANIES , SAFEWAY , SANDISK CORP , SCANA , SEALED AIR , SEARS HOLDINGS , SEMPRA ENERGY , SHERWIN-WILLIAMS , SIGMA-ALDRICH , SLM 1, , SMITH INTERNATIONAL 1, , SOLECTRON 1, , SOUTHERN 1, , SOUTHWEST AIRLINES , SOUTHWESTERN ENERGY , SPRINT 1, , ST JUDE MEDICAL , STANLEY WORKS , STAPLES 1, , STARBUCKS 1, , STARWOOD HOTELS & RESORTS , STATE STREET , STATION COSMOS , STRYKER , SUN MICROSYSTEMS INC 5, , SUNOCO , SUNTRUST BANKS , SYMBOL TECHNOLOGIES ,

372 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets SYNOVUS FINANCIAL , T ROWE PRICE GROUP 1, , TARGET CORP , TCF FINANCIAL , TELEPHONE & DATA SYSTEMS , TELLABS 3, , TEMPLE-INLAND , TENET HEALTHCARE , TEXAS INSTRUMENTS 3, , TEXTRON , THE ST.JOE COMPANY , THE WESTERN UNION 1, , THERMO ELECTRON , TIFFANY & CO , TIM HORTONS (USD) , TIME WARNER INC 5, , TJX COS , TORCHMARK , TRIBUNE 1, , TXU , UNION PACIFIC , UNIONBANCAL , UNITED PARCEL SERVICE B , UNITED TECHNOLOGIES 1, , UNITEDHEALTH GROUP 1, , UNIVISION COMMUNICATIONS A , US BANCORP 2, , VALERO ENERGY CORP , VARIAN MEDICAL , VERISIGN , VERIZON COMMUNICATIONS 4, , VF CORP , VIACOM B WHEN ISSUED , VULCAN MATERIALS , WACHOVIA 2, , WALGREEN CO 2, , WAL-MART STORES INC 3, , WALT DISNEY HOLDING 1, , WASHINGTON MUTUAL 1, , WASHINGTON POST B , WASTE MANAGEMENT , WATERS , WELLPOINT , WELLS FARGO 4, , WEYERHAEUSER , WHIRLPOOL , WHOLE FOODS MARKET , WILLIAMS-SONOMA , WISCONSIN ENERGY , WR BERKLEY 1, , WRIGLEY (WM) JR , WYETH 1, ,

373 Pictet Funds (LUX) - Quantam STATEMENT OF INVESTMENTS AND OTHER NET ASSETS AS AT DECEMBER 31, 2006 (EXPRESSED IN USD) Description Quantity Market value (note 2) % of net assets XEROX 2, , XILINX , XTO ENERGY , YAHOO 1, , YUM BRANDS , ZIMMER HOLDINGS , ZIONS BANCORP , ,273, TOTAL SHARES 17,724, UNITS OF INVESTMENT FUNDS UNITED STATES CAMDEN PROPERTY TRUST -SBI , CRESCENT REAL ESTATE EQUITIES 1, , DUKE REALTY , UNITED DOMINION REALTY TRUST , VORNADO REALTY TRUST -SBI , , TOTAL UNITS OF INVESTMENT FUNDS 75, TOTAL INVESTMENTS 17,800, CASH AT BANKS 90, OTHER NET LIABILITIES -4, TOTAL NET ASSETS 17,886,

374 Pictet Funds (LUX) - Quantam GEOGRAPHICAL AND INDUSTRIAL CLASSIFICATION OF INVESTMENTS AS AT DECEMBER 31, 2006 Geographical classification (in % of net assets) United States Bermuda 0.96 Netherlands Antilles 0.57 Cayman Islands 0.42 Canada 0.22 Singapore 0.19 Panama Industrial classification (in % of net assets) Holding and financial companies Banks and credit institutions 9.55 Computer and office equipment 9.06 Pharmaceuticals and cosmetics 8.99 Oil 8.03 Communications 6.51 Electronics and electrical equipment 5.04 Retail and supermarkets 4.30 Food and soft drinks 3.63 Chemicals 3.31 Conglomerates 3.18 Utilities 3.04 Insurance 2.87 Construction of machines and appliances 1.85 Real estate 1.71 Aeronautics and astronautics 1.58 Tobacco and alcohol 1.47 Publishing and graphic arts 1.39 Internet, software and IT services 1.38 Miscellaneous consumer goods 1.27 Construction and building materials 1.03 Transport and freight 0.99 Biotechnology 0.97 Gastronomy 0.81 Miscellaneous services 0.78 Paper and forest products 0.74 Road vehicles 0.70 Packaging 0.62 Public healthcare and social services 0.60 Textiles and clothing 0.56 Mining and steelworks 0.56 Units of investment funds 0.44 Leisure 0.42 Environmental conservation and waste management 0.16 Miscellaneous trade 0.11 Precious metals and stones 0.11 Miscellaneous capital goods 0.04 Health services 0.04 Photography and optics

375 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 NOTE 1 GENERAL Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) (the "SICAV") is a Luxembourg Open-ended Investment Company (Société d Investissement à Capital Variable) in accordance with the provisions of Part I of the law of December 20, 2002 on Undertakings for Collective Investment, as amended, (previously Part I of the law of March 30, 1988, as amended) since December 8, The SICAV was incorporated for an indefinite period on September 20, 1991 under the name Pictet Umbrella Fund and its Articles of Incorporation were published in the official gazette, Mémorial, Recueil Spécial des Sociétés et Associations du Grand-Duché de Luxembourg on October 29, The Articles of Incorporation were amended by deed on October 30, 1992, published in the Mémorial on January 23, 1993, by deed on June 14, 1995, published in the Mémorial on July 13, 1995, by deed on November 8, 1999, published in the Mémorial on March 7, 2000, by deed on May 2, 2001, published on May 29, 2001, by deed on September 12, 2003, published on October 7, 2003, by deed on December 8, 2005, published on December 21, 2005 and by deed on April 28, 2006, published on May 18, Pictet Funds (Europe) S.A., a public limited company (société anonyme) with its registered office at 3, boulevard Royal, Luxembourg, was appointed management company of the SICAV within the meaning of chapter 13 of the amended law of December 20, 2002 as of December 8, On April 28, 2006, the Extraordinary General Meeting of Shareholders of Pictet Fixed Income Fund decided to change the name of the SICAV to Pictet Funds (LUX). As at December 31, 2006, Pictet Funds (LUX) comprises the following sub-funds: Pictet Funds (LUX) - EUR Bonds denominated in Euro (EUR) Pictet Funds (LUX) - USD Bonds denominated in U.S. Dollar (USD) Pictet Funds (LUX) - CHF Liquidity denominated in Swiss Franc (CHF) Pictet Funds (LUX) - USD Liquidity denominated in U.S. Dollar (USD) Pictet Funds (LUX) - EUR Liquidity denominated in Euro (EUR) Pictet Funds (LUX) - EUR Corporate Bonds denominated in Euro (EUR) Pictet Funds (LUX) - Global Emerging Debt denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Global Bonds denominated in U.S. Dollar (USD) Pictet Funds (LUX) - EUR High Yield denominated in Euro (EUR) Pictet Funds (LUX) - EUR Short Mid-Term Bonds denominated in Euro (EUR) Pictet Funds (LUX) - USD Short Mid-Term Bonds denominated in U.S. Dollar (USD) Pictet Funds (LUX) - EUR Turbo Income denominated in Euro (EUR) Pictet Funds (LUX) - CHF Bonds denominated in Swiss Franc (CHF) Pictet Funds (LUX) - EUR Government Bonds denominated in Euro (EUR) (launched on May 12, 2006) Pictet Funds (LUX) - EUR Inflation Linked Bonds denominated in Euro (EUR) (launched on August 30, 2006) Pictet Funds (LUX) - EUR Asset Backed Securities denominated in Euro (EUR) (launched on June 30, 2006) Pictet Funds (LUX) - Emerging local Currency Debt denominated in U.S. Dollar (USD) (launched on June 26, 2006) Pictet Funds (LUX) - Asian Local Currency Debt denominated in U.S. Dollar (USD) (launched on June 26, 2006) Pictet Funds (LUX) - European Equity Selection denominated in Euro (EUR) Pictet Funds (LUX) - Small Cap Europe denominated in Euro (EUR) Pictet Funds (LUX) - Emerging Markets denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Eastern Europe denominated in Euro (EUR) Pictet Funds (LUX) - Europe Index denominated in Euro (EUR) Pictet Funds (LUX) - USA Index denominated in U.S. Dollar (USD) Pictet Funds (LUX) - European Sustainable Equities denominated in Euro (EUR) 373

376 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Pictet Funds (LUX) - Japan Index denominated in Yen (JPY) Pictet Funds (LUX) - Pacific (Ex Japan) Index denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Telecom denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Biotech denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Premium Brands denominated in Euro (EUR) Pictet Funds (LUX) - Water denominated in Euro (EUR) Pictet Funds (LUX) - Indian Equities denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Japanese Equities denominated in Yen (JPY) Pictet Funds (LUX) - US Equities denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Asian Equities (Ex Japan) denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Global Equity Selection denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Continental European Equities denominated in Euro (EUR) Pictet Funds (LUX) - Greater China denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Japanese Equity Selection denominated in Yen (JPY) Pictet Funds (LUX) - Emerging Markets Index denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Generics denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Japanese Mid-Small Cap denominated in Yen (JPY) Pictet Funds (LUX) - Emerging Markets Large Cap denominated in U.S. Dollar (USD) Pictet Funds (LUX) - Absolute Return Global Diversified denominated in Euro (EUR) (launched on March 27, 2006) Pictet Funds (LUX) - Euroland Index denominated in Euro (EUR) (launched on June 29, 2006) Pictet Funds (LUX) - US Equity Selection denominated in U.S. Dollar (USD) (launched on June 29, 2006) Pictet Funds (LUX) - Security denominated in U.S. Dollar (USD) (launched on October 31, 2006) Pictet Funds (LUX) - Quantam denominated in U.S. Dollar (USD) (launched on August 30, 2006) During the year ended December 31, 2006, the SICAV received contributions in kind from the following sub-funds of Pictet Funds: Contribution Absorbed sub-fund of Pictet Absorbing sub-fund of Pictet Funds Contribution amount date Funds (LUX) 13/11/2006 Emerging Markets Emerging Markets USD 3,173,420, /11/2006 Eastern Europe Eastern Europe EUR 1,168,675, /11/2006 Water Water EUR 2,602,231, /11/2006 Europe Index Europe Index EUR 491,679, /11/2006 Pacific (Ex Japan) Index Pacific (Ex Japan) Index USD 142,554, /11/2006 Emerging Markets Index Emerging Markets Index USD 140,526, /11/2006 Japan Index Japan Index JPY 36,961,794, /11/2006 USA Index USA Index USD 1,035,288, /11/2006 Continental European Equities Continental European Equities EUR 100,588, /11/2006 Telecom Telecom USD 166,822, /11/2006 US Equities US Equities USD 30,163, /11/2006 Euroland Index Euroland Index EUR 7,224, /11/2006 Japanese Mid-Small Cap Japanese Mid-Small Cap JPY 5,948,159, /11/2006 Small Cap Europe Small Cap Europe EUR 261,387, /11/2006 Japanese Equity Selection Japanese Equity Selection JPY 298,696,378, /11/2006 Global Equity Selection Global Equity Selection USD 102,909, /11/2006 Greater China Greater China USD 463,854, /11/2006 Emerging Markets Large Cap Emerging Markets Large Cap USD 60,887, /11/2006 European Sustainable Equities European Sustainable Equities EUR 149,117, /11/2006 Generics Generics USD 206,549, /11/2006 European Equity Selection European Equity Selection EUR 1,560,025, /11/2006 Premium Brands Premium Brands EUR 57,792, /12/2006 Indian Equities Indian Equities USD 648,131, /12/2006 Biotech Biotech USD 1,852,872, /12/2006 Asian Equities (Ex Japan) Asian Equities (Ex Japan) USD 2,011,085, /12/2006 Absolute Return Global DiversifiedAbsolute Return Global Diversified EUR 197,039, /12/2006 Japanese Equities Japanese Equities JPY 91,006,655, /12/2006 Pan European Equities European Equity Selection EUR 24,931,

377 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 The net assets of each sub-fund are represented by shares which may be divided into different share classes or sub-classes. All of the shares representing the assets of a subfund form a share class. All of the sub-funds constitute the SICAV. Where sub-classes of shares are issued, the information relative thereto is specified in Appendices 1 and 2 of the latest prospectus of the SICAV. The Board of Directors may also decide to create two or more sub-classes for each share class, whose assets will be invested according to the specific investment policy of the class concerned, but in which the sub-classes can be distinguished by specific subscription and/or redemption fee structures, currency risk hedging policies, distribution policies and/or management or advisory commissions or any other policies applicable to each sub-class. If need be, this information will be provided in the prospectus of the SICAV. Unless otherwise stated in Appendices 1 and 2 of the current prospectus of the SICAV, shares of each sub-fund may be split into ""I", "P Cap", "P Distr", "R", "Z Cap" and "Z Distr" shares. "I" shares are intended for institutional investors within the meaning of article 129 of the amended law of December 20, 2002 who wish to invest a minimum initial amount, as detailed in the appendix for each sub-fund, of USD 1,000,000, EUR 1,000,000, GBP 1,000,000 and CHF 1,000,000 respectively, depending on the base or consolidation currency of the sub-fund concerned. Commissions levied on "I" shares in favour of intermediaries shall be a maximum of 5% for subscriptions and a maximum of 1% for redemptions. "P" and "R" shares do not require a minimum investment. Due to their significant characteristics, one and/or the other respond to different marketing practices in force in the countries where the SICAV is marketed at the time of the current prospectus. Their flexibility allows them, where necessary, to adapt to the evolution of their target markets. They are only differentiated by their fees. "P" shares: "R" shares: Maximum subscription fee of 5% in favour of intermediaries. Maximum redemption fee of 1% in favour of intermediaries. Lower management fee than "R" shares. Maximum subscription fee of 5% in favour of intermediaries. Maximum redemption fee of 3% in favour of intermediaries. Higher management fee than "P" shares. "Z" shares are reserved for institutional investors who have concluded a specific fee agreement with Pictet & Cie, Geneva or any other entity of the Pictet Group. Commissions levied on "Z" shares in favour of intermediaries shall be a maximum of 5% for subscriptions and a maximum of 1% for redemptions. Management fees shall vary according to the sub-class of shares, as detailed in Appendices 1 and 2 of the current prospectus of the SICAV. 375

378 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 "P" and "Z" shares may be divided into "P Cap" and "Z Cap" shares respectively (accumulation shares), and into "P Distr" and "Z Distr" shares respectively (distribution shares). Distribution shares shall be entitled to dividends while the amount corresponding to capitalisation shares will not be distributed but invested in the share class concerned. "J Distr" and "J Cap" shares may be created in certain sub-funds and are intended for institutional investors who wish to invest an initial minimum amount of USD 50,000,000 for sub-funds denominated in USD, EUR 50,000,000 for sub-funds denominated in EUR, GBP 50,000,000 for sub-funds denominated in GBP and CHF 50,000,000 for sub-funds denominated in CHF. These shares shall be subject to the same subscription and redemption fees as "I" shares. In each sub-fund shares issued in currencies other than the base currency of the subfund may be created. These shares may be hedged (as defined below) or unhedged. Hedged shares: "HI", "HP Cap", "HP Distr", "HR", "HZ Cap" and "HZ Distr" shares may also be created in certain sub-funds. The objective of the "HI", "HP Cap", "HP Distr", "HR", "HZ Cap" and "HZ Distr" shares is to hedge a large part of the foreign exchange risk related to a particular currency. These shares are subject to the same subscription and redemption fees as "I", "P", "R", "Z Cap" and "Z Distr" shares respectively, as described above. The minimum investment amount applicable to "HI" or "I" shares issued in a currency other than the consolidation currency of the sub-fund is the minimum initial investment amount applicable to "I" shares, which is converted into the currency applicable to this class on the NAV calculation day. Investors who meet the eligibility requirements of the sub-class of shares in which they wish to subscribe may request the conversion of their shares into shares of this subclass, unless otherwise stated in Appendices 1 and 2 of the current prospectus of the SICAV. In the same way, if an investor no longer meets the eligibility requirements of the subclass of shares held, the Board of Directors reserves the right to request such shareholder to convert his shares into shares of another sub-class. 376

379 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 As at December 31, 2006, each sub-fund had issued "I", "P Cap", "P Distr", "R" and "Z Cap" shares (with the exception of the Global Bonds and USD Short Mid-Term Bonds sub-funds in relation to "Z Cap" shares). The EUR Corporate Bonds sub-fund also issued "Z Distr" shares. In addition to these shares some sub-funds also issued shares hedged against currency risks: Sub-fund EUR Bonds EUR Corporate Bonds Global Emerging Debt EUR High Yield EUR Short Mid-Term Bonds EUR Turbo Income EUR Government Bonds EUR Inflation Linked Bonds Biotech Asian Equities (Ex Japan) Japanese Equity Selection Generics Emerging Markets large Cap US Equity Selection Shares HI-CHF and HP Cap-CHF HI-CHF, HI-USD, HP Cap-CHF and HP Cap-USD HI-CHF, HI-EUR, HP Cap-CHF and HP Cap-EUR HI-CHF and HP Cap-CHF HI-CHF and HP Cap-CHF HI-CHF, HP Cap-CHF and HZ Cap-CHF HI-CHF and HP Cap-CHF HI-CHF and HP Cap-CHF HP Cap-EUR and HR-EUR HP Cap-EUR and HR-EUR HP Cap-EUR and HR-EUR HP Cap-EUR and HR-EUR HI-EUR, HP Cap-EUR and HR-EUR HI-EUR, HP Cap-EUR and HR-EUR For the purpose of efficient management and provided it is permitted by the investment policies of the sub-funds, the Board of Directors of the Management Company may decide to co-manage a portion or all of the assets of certain Pictet Funds (LUX) subfunds. In this case, the assets of the different sub-funds are managed jointly according to the aforementioned technique. The co-managed assets are designated as pooled assets. However, these pools are used exclusively for the purpose of internal management. They are not considered individual legal entities and are not directly accessible to investors. Each co-managed sub-fund is allocated its own assets. When the assets of a sub-fund are managed according to this technique, the assets initially attributable to each co-managed sub-fund are determined according to its initial contribution to the pool. Subsequently, the composition of these assets shall vary according to the contributions or withdrawals made by these sub-funds. The allocation system described above applies to each holding in the pool. Henceforth, any additional investments made on behalf of the co-managed sub-funds are attributed to these sub-funds according to their respective rights, while any assets sold should be deducted in the same way from the assets attributable to each of the co-managed subfunds. All banking operations affecting the life of the sub-fund (dividends, interest, noncontractual fees, expenses) are accounted for in the pool and prorated to each sub-fund on the date these operations are recorded (expense provisions, recording of expenses and/or income on bank accounts). Conversely, contractual fees (custody, administration, management fees, etc.) are recorded directly in the respective sub-funds. It should be clear at all times which assets and liabilities pertain to which sub-fund. The pooling process respects the investment policy of each sub-fund concerned. 377

380 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES a) General The financial statements are presented in accordance with the legal reporting requirements applicable in Luxembourg. b) Formation expenses Formation expenses are amortised over a maximum period of five years. c) Conversion of foreign currencies for each sub-fund Cash at banks, other net assets as well as the market value of the investment portfolio in currencies other than the currency of the sub-fund are converted into the base currency of the sub-fund at the exchange rate prevailing at the end of the year. Income and expenses in currencies other than the currency of the sub-fund are converted into the currency of the sub-fund at the exchange rate applicable on the payment date. Resulting foreign exchange gains and losses are included in the statement of operations. d) Combined financial statements of the SICAV The combined financial statements of the SICAV are expressed in EUR and correspond to the sum of the respective accounting items in the financial statements of each subfund, converted into EUR at the exchange rate prevailing at the end of the year. e) Valuation of investments Transferable securities shall be valued at their most representative market price and/or at the price of past transactions carried out by fund managers or other participants on these markets. This price may be the last available price or a price available at another time on the markets which the Board of Directors considers the most representative in terms of liquidity and past transactions executed on the markets concerned. If a price is not determined, the securities shall be valued prudently and in good faith on the basis of their foreseeable sale prices. Liquid assets are valued at their nominal value plus accrued interest. Units/shares of open-ended undertakings for collective investment shall be valued on the basis of the last net asset value available; if the price determined is not representative of the fair value of these assets, the price shall be determined by the Board of Directors according to equitable and prudent criteria. Units/shares of closed-ended UCIs shall be valued on the basis of the last market value available. 378

381 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Money market instruments not listed or traded on a stock exchange or on another regulated market and whose residual maturity does not exceed twelve months shall be valued at their nominal value, plus any accrued interest; the total value being amortised according to a linear method. Forward contracts and options that are not traded on a stock exchange or on another regulated market shall be valued at their liquidation value determined in accordance with the rules set in good faith by the Board of Directors according to standard criteria for each type of contract. The value of forward contracts and options traded on a stock exchange or on another regulated market shall be based on the closing or settlement prices published by this stock exchange or by another regulated market on which the contracts in question are predominantly traded. If a forward contract or option cannot be sold on the valuation date of the net assets concerned, the criteria for determining the liquidation value of such forward contract or option shall be set by the Board of Directors in a reasonable and fair manner. In the interest of shareholders and insofar as the Board of Directors deems it appropriate in view of market conditions and the level of subscriptions and redemptions within a sub-fund, and depending on its total size, the net asset value of such sub-fund may be calculated on the basis of the offer or bid prices of securities held in the portfolio, adjusted with sales commissions and transaction fees incurred. However, this may not be cumulative with the application of the dilution levy. Further details are provided in the SICAV's prospectus. f) Valuation of forward contracts The valuation of forward contracts is based on the latest price available. The unrealised gains or losses on these contracts resulting from the difference between this price and the original transaction price are included in the statement of net assets. g) Valuation of forward exchange contracts The unrealised gains or losses resulting from outstanding forward exchange contracts are determined on the valuation day on the basis of the forward exchange prices applicable on this date and are included in the statement of net assets. h) Valuation of interest rate swaps The cashflows received and paid by the sub-fund in connection with swap contracts are converted to present value on the valuation date at the zero-coupon swap rate corresponding to the maturity of these cashflows. The value of the swap contracts is the difference between these two present value conversions. 379

382 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 i) Valuation of credit default swaps Credit default swaps (CDS) are entered into on the basis of ISDA contracts with leading financial institutions specialised in these types of transactions. The parameters determining the valuation of CDS are: the recovery rate, the default probability and the "replacement spread". The "replacement spread" is the premium rate at which the CDS could be renegotiated. The valuation of the CDS reflects the discounted present value of the protection represented by the CDS compared to the zero yield curve applicable to the underlying bond. j) Valuation of total return swaps Cashflows received and paid by the sub-fund in connection with total return swaps are converted to present value on the valuation date at the zero-coupon swap rate corresponding to the maturity of these cashflows. The payment received by the protection buyer, which is a combination of options, is also actualised and determined by several parameters, notably the price, the volatility and the likelihood of the underlying assets defaulting. The value of total return swap contracts is the difference between the two present value conversions described above. k) Net realised gains or losses on investments Realised gains or losses on the sales of securities are calculated on the basis of average cost. l) Acquisition cost of securities in the portfolio The cost of securities denominated in currencies other than the base currency of the different sub-funds is calculated at the exchange rate prevailing on the acquisition date. m) Income Dividends are recorded at the ex-dividend date. Interest is recorded on an accrual basis. n) Repurchase agreements Repurchase agreements are considered as lending transactions for which underlying investments are used as a guarantee. The underlying securities are accounted for in the investment portfolio of the SICAV, which remains exposed to the risk of depreciation in value. Repurchase agreements are recorded as a loan under the heading "Other liabilities" for the amount received. Interest is recorded on an accruals basis under the heading "Interest payable". 380

383 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 o) Valuation of investments in "Private Equity" 1. Valuation frequency of private equity Such securities are incorporated into the portfolio at acquisition cost. The valuation frequency depends on the occurrence of significant events affecting the security. In the absence of a significant event, valuations should be carried out at least twice per year. Examples of significant events triggering a valuation process include: - Substantially higher-/lower-than-expected profits - A new round of financing initiated by the company - A new transaction (initiated by a third party investor) - Restructuring operations 2. Valuation process The Custodian bank s "Private Equity" department prepares a price revaluation recommendation which is based on fundamental analysis and forecasts as well as other available financial information. The recommendation is then reviewed by the Auditor of the Fund who will advise on the practicality and relevance of the valuation method, the adherence to and consistency of the valuation methodology as well as the compliance of the valuation method with the valuation guidelines of the European Private Equity and Venture Capital Association (EVCA). This opinion is generally required before the price revaluation; however, in certain circumstances it may be required after. The recommendation is then submitted to the Board of Directors of the Fund for review and official approval. NOTE 3 TAXE D ABONNEMENT Under the legislation and regulations currently prevailing in Luxembourg, the SICAV is not subject to any tax on income. The SICAV is subject to a taxe d abonnement of 0.05% per annum on its net assets, payable quarterly and calculated on the basis of the net assets at the end of each quarter. The value of net assets invested in units of other Luxembourg Undertakings for Collective Investment is exempt from the taxe d abonnement, provided such units have already been subject to this tax. However, this tax is reduced to 0.01% for assets related to shares reserved for institutional investors. NOTE 4 MANAGEMENT AND INVESTMENT ADVISORY FEE The Management Company has appointed one or more investment advisors for each sub-fund for the purpose of advising the Management Company on investment opportunities for the SICAV. 381

384 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 NOTE 4 MANAGEMENT AND INVESTMENT ADVISORY FEE (continued) The Management Company receives management fees from the sub-funds for the purpose of remunerating the investment managers, the investment advisors and the distributors, where applicable. These fees are levied on each sub-fund, and respectively on the sub-classes of shares, as well as on their corresponding shares, prorata to its net assets. I shares P shares R shares Z shares (max) (max) (max) (max) Pictet Funds (LUX) - EUR Bonds 0.60% 0.90% 1.25% 0.00% Pictet Funds (LUX) - USD Bonds 0.60% 0.95% 1.25% 0.00% Pictet Funds (LUX) - CHF Liquidity 0.15% 0.18% 0.25% 0.00% Pictet Funds (LUX) - USD Liquidity 0.15% 0.30% 0.60% 0.00% Pictet Funds (LUX) - EUR Liquidity 0.15% 0.30% 0.60% 0.00% Pictet Funds (LUX) - EUR Corporate Bonds 0.60% 0.90% 1.25% 0.00% Pictet Funds (LUX) - Global Emerging Debt 1.10% 1.45% 1.75% 0.00% Pictet Funds (LUX) - Global Bonds 0.60% 0.95% 1.25% 0.00% Pictet Funds (LUX) - EUR High Yield 1.10% 1.45% 1.75% 0.00% Pictet Funds (LUX) - EUR Short Mid-Term Bonds 0.35% 0.60% 0.90% 0.00% Pictet Funds (LUX) - USD Short Mid-Term Bonds 0.35% 0.60% 0.90% 0.00% Pictet Funds (LUX) - EUR Turbo Income 0.35% 0.65% 0.90% 0.00% Pictet Funds (LUX) - CHF Bonds 0.45% 0.80% 1.05% 0.00% Pictet Funds (LUX) - EUR Government Bonds 0.30% 0.60% 0.90% 0.00% Pictet Funds (LUX) - EUR Inflation Linked Bonds 0.45% 0.90% 1.20% 0.00% Pictet Funds (LUX) - EUR Asset Backed Securities 0.35% 0.60% 0.90% 0.00% Pictet Funds (LUX) - Emerging Local Currency Debt 1.05% 2.10% 3.00% 0.00% Pictet Funds (LUX) - Asian Local Currency Debt 1.05% 2.10% 3.00% 0.00% Pictet Funds (LUX) - European Equity Selection 0.90% 1.80% 2.50% 0.00% Pictet Funds (LUX) - Small Cap Europe 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Emerging Markets 2.00% 2.50% 2.90% 0.00% Pictet Funds (LUX) - Eastern Europe 1.80% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Europe Index 0.30% 0.45% 0.90% 0.00% Pictet Funds (LUX) - USA Index 0.30% 0.45% 0.90% 0.00% Pictet Funds (LUX) - European Sustainable Equities 0.65% 1.20% 1.80% 0.00% Pictet Funds (LUX) - Japan Index 0.30% 0.45% 0.90% 0.00% Pictet Funds (LUX) - Pacific (Ex Japan) Index 0.25% 0.40% 0.85% 0.00% Pictet Funds (LUX) - Telecom 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Biotech * 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Premium Brands 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Water 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Indian Equities 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Japanese Equities 0.90% 1.80% 2.50% 0.00% Pictet Funds (LUX) - US Equities 0.90% 1.80% 2.50% 0.00% Pictet Funds (LUX) - Asian Equities (Ex Japan) 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Global Equity Selection 1.05% 2.10% 2.90% 0.00% Pictet Funds (LUX) - Continental European Equities 0.90% 1.80% 2.50% 0.00% Pictet Funds (LUX) - Greater China 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Japanese Equity Selection 0.90% 1.80% 2.50% 0.00% Pictet Funds (LUX) - Generics 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Emerging Markets Index 0.60% 0.90% 1.35% 0.00% Pictet Funds (LUX) - Japanese Mid-Small Cap 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Emerging Markets Large Cap 1.50% 2.50% 2.90% 0.00% Pictet Funds (LUX) - Absolute Return Global Diversified 0.70% 1.50% 2.20% 0.00% Pictet Funds (LUX) - Euroland Index 0.30% 0.45% 0.90% 0.00% Pictet Funds (LUX) - US Equity Selection 0.90% 1.80% 2.50% 0.00% Pictet Funds (LUX) - Security 1.20% 2.40% 2.90% 0.00% Pictet Funds (LUX) - Quantam 0.45% 0.90% 1.35% 0.00% 382

385 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 *For the Pictet Funds (LUX) Biotech sub-fund, a management fee for those assets invested in unlisted securities shall also be deducted from the assets of the sub-fund in the following manner: - a supervisory fee of USD 2,500 per quarter for each unlisted investment payable on a quarterly basis; with a minimum of USD 15,000 per quarter if the portfolio includes less than 7 unlisted securities. - a performance fee of 5% of the net profits realised on the sale of each unlisted security identified by the adviser. NOTE 5 OTHER FEES PAYABLE As at December 31, 2006, other fees payable include administration, audit, custodian and service fees. NOTE 6 SUBSCRIPTION, REDEMPTION AND/OR CONVERSION FEE The issue price of shares of each sub-fund (or sub-class of shares, where applicable) is equal to the net asset value of each share (or each sub-class of shares, respectively) in that sub-fund, as determined on the first NAV calculation date that follows the subscription date. Brokerage fees of up to 5% of the relevant sub-fund s net asset value per share may be added to the issue price, such fees being levied in favour of the intermediaries and/or distributors involved in investments in shares of the SICAV. The fees paid to financial intermediaries vary according to the sub-class of shares. The redemption price of shares of each sub-fund (or sub-class of shares, where applicable) is equal to the net asset value of each share (or each sub-class of shares, respectively) in that sub-fund, as determined on the first NAV calculation date that follows the redemption date. This amount may be reduced by brokerage fees of up to 3% of the net asset value per share to be paid to the intermediaries and/or distributors. The fees paid to financial intermediaries vary according to the sub-class of shares. The Board of Directors is authorised in certain situations to apply a dilution levy of maximum 2% of the net asset value per share to the issue, redemption and conversion price. The dilution levy charged on any valuation date applies equally to all issues carried out on this valuation date. The Board of Directors is authorised for certain sub-funds, as specified in Appendices 1 and 2 of the prospectus where applicable, to apply investment and/or disinvestment costs of maximum 1% of the net asset value per share payable in favour of the sub-funds concerned, which may be added to the net asset value or, where necessary, included in the net asset value. Such investment costs apply identically to all shareholders on the same net asset value calculation day. 383

386 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 NOTE 7 EXCHANGE RATES AS AT DECEMBER 31, 2006 The following exchange rates were used for the conversion of the SICAV s net assets into EUR as at December 31, 2006: 1 EUR = CHF 1 EUR = USD 1 EUR = JPY NOTE 8 FORWARD CONTRACTS The SICAV had the following forward contracts outstanding as at December 31, 2006: EUR Bonds Maturity Currency Total commitment Total commitment in currency in EUR Sale of 4,686 EUR/JPY 3 MONTHS 18/06/2007 JPY -116,236,230, ,255, Purchase of 4,686 EUR/JPY 3 MONTHS 19/03/2007 JPY 116,359,237, ,042, Sale of 1 10 YEARS TREASURY NOTES USA 21/03/2007 USD -107, , Purchase of 1,417 EURO BUND EUREX FUTURE 09/03/2007 EUR 164,485, ,485, Sale of 192 JAPANESE FUTURE BONDS 10 YEAR 09/03/2007 JPY -25,760,640, ,722, Sale of 27 EURO BOBL BUND EUREX 09/03/2007 EUR -2,937, ,937, Purchase of 7,572 EURO SCHATZ FUTURE 09/03/2007 EUR 783,436, ,436, EUREX The net unrealised loss on these contracts as at December 31, 2006 was EUR 6,257, and is included in the statement of net assets. USD Bonds Maturity Currency Total commitment Total commitment in currency in USD Sale of YEARS TREASURY NOTES USA 29/11/2006 USD -25,069, ,069, Sale of 441 EUR/JPY 3 MONTHS 18/06/2007 JPY -10,939,005, ,935, Purchase of 441 EUR/JPY 3 MONTHS 19/03/2007 JPY 10,950,581, ,032, Sale of 94 EURO BOBL BUND EUREX 09/03/2007 EUR -10,228, ,471, Purchase of 685 EURO SCHATZ FUTURE EUREX 09/03/2007 EUR 70,873, ,346, Purchase of 83 EURO BUND EUREX FUTURE 09/03/2007 EUR 9,634, ,689, Sale of 18 JAPANESE FUTURE BONDS 10 YEAR 09/03/2007 JPY -2,415,060, ,297, Sale of 7 US TREASURY BONDS 30Y 21/03/2007 USD -780, , Purchase of 176 USA TREASURY NOTES 2 30/03/2007 USD 35,915, ,915, YEARS Purchase of 8 USA TREASURY NOTE 5 YEARS 30/03/2007 USD 841, , The net unrealised loss on these contracts as at December 31, 2006 was USD 173, and is included in the statement of net assets. CHF Liquidity Maturity Currency Total commitment Total commitment in currency in CHF Sale of 165 CHF 3 MONTHS 18/06/2007 CHF -40,227, ,227, Sale of 70 CHF 3 MONTHS 19/03/2007 CHF -17,102, ,102, The net unrealised gain on these contracts as at December 31, 2006 was CHF 170, and is included in the statement of net assets. 384

387 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 USD Liquidity Maturity Currency Total commitment Total commitment in currency in USD Purchase of 75 SHORT STERLING (3 MONTHS) 21/03/2007 GBP 35,448, ,474, Sale of 1 EURO USD 3-MONTH INTEREST RATES 17/03/2008 USD -237, , Sale of 1 EURO USD 3-MONTH INTEREST RATES 17/09/2007 USD -237, , Sale of 3 EURO USD 3-MONTH INTEREST RATES 18/06/2007 USD -710, , Sale of 1 EURO USD 3-MONTH INTEREST RATES 09/12/2007 USD -237, , Sale of 16 EURO USD 3-MONTH INTEREST 19/03/2007 USD -3,787, ,787, RATES The net unrealised loss on these contracts as at December 31, 2006 was USD 7, and is included in the statement of net assets. EUR Liquidity Maturity Currency Total commitment Total commitment in currency in EUR Sale of 11 LIFFE EURIBOR/FUTURES 19/03/2007 EUR -2,642, ,642, The net unrealised gain on this contract as at December 31, 2006 was EUR 101, and is included in the statement of net assets. EUR Corporate Bonds Maturity Currency Total commitment Total commitment in currency in EUR Sale of 9 10 YEARS TREASURY NOTES USA 21/03/2007 USD -968, , Purchase of 150 EURO BUND EUREX FUTURE 09/03/2007 EUR 17,412, ,412, Sale of 253 EURO BOBL BUND EUREX 09/03/2007 EUR -27,528, ,528, Purchase of 535 EURO SCHATZ FUTURE EUREX 09/03/2007 EUR 55,353, ,353, Purchase of 19 EURO BUXL EUREX BUND 09/03/2007 EUR 1,870, ,870, FUTURES (30Y) The net unrealised loss on these contracts as at December 31, 2006 was EUR 328, and is included in the statement of net assets. Global Emerging Debt Purchase of YEARS TREASURY NOTES USA Maturity Currency Total commitment Total commitment in currency in USD 21/03/2007 USD 24,101, ,101, The net unrealised loss on this contract as at December 31, 2006 was USD 226, and is included in the statement of net assets. 385

388 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Global Bonds Maturity Currency Total commitment Total commitment in currency in USD Sale of 19 USA TREASURY NOTES 5YEARS 30/03/2007 USD -1,997, ,997, Sale of 5 JAPANESE FUTURE BONDS 10 YEAR 09/03/2007 JPY -670,250, ,633, Sale of 3 EURO-BUXL EUREX BUND FUTURES (30Y) 09/03/2007 EUR -295, , Purchase of 21 EURO BUND EUREX FUTURE 09/03/2007 EUR 2,437, ,203, Sale of 111 EUR/JPY 3 MONTHS 18/06/2007 JPY -2,753,355, ,140, Sale of 10 EURO BOBL BUND EUREX 09/03/2007 EUR -1,088, ,430, Sale of 7 US TREASURY BONDS 30Y 21/03/2007 USD -780, , Purchase of 22 AUSTRALIA TREASURY BOND 10Y 6% 15/03/2007 AUD 2,219, ,753, Purchase of 34 USA TREASURY NOTES 2 YEARS 30/03/2007 USD 6,938, , Purchase of 111 EUR/JPY 3 MONTHS 01/03/2007 JPY 2,756,268, ,164, Sale of YEARS TREASURY NOTES USA 21/03/2007 USD -6,132, , Purchase of 164 EURO SCHATZ FUTURE EUREX 08/03/2007 EUR 16,968, ,302, The net unrealised loss on these contracts as at December 31, 2006 was USD 34, and is included in the statement of net assets. EUR Short Mid-Term Bonds Maturity Currency Total commitment Total commitment in currency in EUR Sale of 94 EURO BOBL BUND EUREX 09/03/2007 EUR -10,228, ,228, Purchase of 1,343 EURO SCHATZ FUTURE EUREX 08/03/2007 EUR 138,953, ,953, The net unrealised loss on these contracts as at December 31, 2006 was EUR 321, and is included in the statement of net assets. USD Short Mid-Term Bonds Maturity Currency Total commitment Total commitment in currency in USD Purchase of 18 USA TREASURY NOTES 2 YEARS 30/03/2007 USD 3,673, ,673, The net unrealised loss on this contract as at December 31, 2006 was USD 14, and is included in the statement of net assets. EUR Turbo Income Maturity Currency Total commitmenttotal commitment in currency in EUR Purchase of 25 SHORT STERLING (3 MONTHS) 21/03/2007 GBP 2,954, ,400, Sale of 106 EUR/JPY 3 MONTHS 18/06/2007 JPY -26,293, , Purchase of 48 EURO CHF 3 MONTHS 19/03/2007 CHF 11,727, ,301, Sale of 2 EURO USD 3-MONTH INTEREST RATES 17/09/2007 USD -474, , Purchase of 106 EUR/JPY 3 MONTHS 19/03/2007 JPY 26,321, , Purchase of 49 EURO CHF 3 MONTHS 17/09/2007 CHF 11,929, ,426, Sale of YEARS TREASURY NOTES USA 21/03/2007 USD -3,980, ,028, Sale of 21 EURO BUND EUREX FUTURES 09/03/2007 EUR -2,437, ,437, Purchase of 31 USA TREASURY NOTES 2 YEARS 30/03/2007 USD 6,325, ,812, Sale of 5 JAPANESE FUTURE BONDS 10 YEAR 09/03/2007 JPY -6,708, , Sale of 57 EURO BOBL BUND EUREX 09/03/2007 EUR -6,202, ,202, Purchase of 1 USA TREASURY NOTE 5 YEARS 30/03/2007 USD 105, , Purchase of 146 EURO SCHATZ FUTURE EUREX 09/03/2007 EUR 15,105, ,105, Sale of 2 EURO-BUXL EUREX BUND FUTURES (30Y) 09/03/2007 EUR -196, , Purchase of 5 EUREX FUTURE S/6% CONF /03/2007 CHF 635, , YEARS Purchase of 18 AUSTRALIA TREASURY BOND 10Y 15/03/2007 AUD 1,816, ,089, % 386

389 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 The net unrealised gain on these contracts as at December 31, 2006 was EUR 28, and is included in the statement of net assets. CHF Bonds Maturity Currency Total commitment Total commitment in currency in CHF Purchase of 340 EURO CHF 3 MONTHS 19/03/2007 CHF 83,070, ,070, Purchase of 337 EURO CHF 3 MONTHS 08/12/2006 CHF 82,042, ,042, Sale of 45 EUREX FUTURE S/6% CONF /12/2006 CHF -5,719, ,719, YEARS The net unrealised loss on these contracts as at December 31, 2006 was CHF 106, and is included in the statement of net assets. EUR Government Bonds Maturity Currency Total commitment Total commitment in currency in EUR Purchase of 115 EURO BUND EUREX FUTURE 09/03/2007 EUR 13,349, ,349, Purchase of 74 EURO BOBL BUND EUREX 09/03/2007 EUR 8,051, ,051, Purchase of 316 EURO SCHATZ FUTURE EUREX 09/03/2007 EUR 32,694, ,694, The net unrealised loss on these contracts as at December 31, 2006 was EUR 461, and is included in the statement of net assets. EUR Inflation Linked Bonds Maturity Currency Total commitment Total commitment in currency in EUR Sale of 2 JAPANESE FUTURE BONDS 10 YEAR 09/03/2007 JPY -268,340, ,715, The net unrealised loss on this contract as at December 31, 2006 was EUR and is included in the statement of net assets. Emerging Local Currency Debt Maturity Currency Total commitment Total commitment in currency in USD Purchase of YEAR TREASURY NOTES USA 21/03/2007 USD 1,075, ,075, Sale of 39 2Y TREASURY NOTES USA 27/11/2006 USD -7,958, ,958, Sale of 12 USA TREASURY NOTES 5YEARS 27/11/2006 USD -1,261, ,261, Purchase of 11 KOREA BONDS FUTURE 3 YEAR 20/03/2007 KRW 1,190,750, ,280, The net unrealised gain on these contracts as at December 31, 2006 was USD 16, and is included in the statement of net assets. Asian Local Currency Debt Maturity Currency Total commitment Total commitment in currency in USD Sale of 88 USA TREASURY NOTES 5YEARS 27/11/2006 USD -9,254, ,254, Purchase of 46 US TREASURY BOND 30 YEARS 27/11/2006 USD 5,131, ,131, Purchase of 7 10 YEARS TREASURY NOTES USA 21/03/2007 USD 753, , Sale of 28 EURO USD 3-MONTH INTEREST 19/03/2007 USD -6,627, ,627, RATES Purchase of 221 KOREA BONDS FUTURE 3 YEAR 14/12/2006 KRW 23,923,250, ,723, Sale of 52 2Y TREASURY NOTES USA 27/11/2006 USD -10,614, ,614,

390 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 The net unrealised loss on these contracts as at December 31, 2006 was USD 65, and is included in the statement of net assets. USA Index Maturity Currency Total commitment Total commitment in currency in USD Purchase of 7 S&P 500 INDEX 15/03/2007 USD 2,509, ,509, The net unrealised gain on this contract as at December 31, 2006 was USD and is included in the statement of net assets. Japan Index Purchase of 56 INDICE TOKYO STOCK EXCHANGE TOPIX Maturity Currency Total commitment Total commitment in currency in JPY 08/03/2007 JPY 942,200, ,200, The net unrealised gain on this contract as at December 31, 2006 was JPY 8,285, and is included in the statement of net assets. Pacific (Ex Japan) Index Maturity Currency Total commitment Total commitment in currency in USD Purchase of 10 ASX 200 INDEX 14/12/2006 AUD 1,411, ,114, The net unrealised gain on this contract as at December 31, 2006 was USD 9, and is included in the statement of net assets. Water Maturity Currency Total commitment Total commitment in currency in EUR Sale of 794,416 LONG GILT STERLING 28/03/2007 GBP -85,638, ,564, The net unrealised gain on this contract as at December 31, 2006 was EUR 1,195, and is included in the statement of net assets. Global Equity Selection Maturity Currency Total commitment Total commitment in currency in USD Purchase of 6 S&P 500 INDEX 15/03/2007 USD 2,150, ,150, Purchase of 11 NASDAQ 100 INDEX 15/03/2007 USD 1,951, ,951, The net unrealised loss on these contracts as at December 31, 2006 was USD 39, and is included in the statement of net assets. Greater China Maturity Currency Total commitment Total commitment in currency in USD Purchase of MSCI TAIWAN (SGX) INDEX 30/01/2007 USD 27,355, ,355, The net unrealised gain on this contract as at December 31, 2006 was USD 589, and is included in the statement of net assets. 388

391 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Absolute Return Global Diversified Maturity Currency Total commitment Total commitment in currency in EUR Purchase of YEARS TREASURY NOTES 21/03/2007 USD 6,132, ,656, USA Purchase of 44 ASX 200 INDEX 15/03/2007 AUD 6,210, ,724, Sale of 76 S&P INDICES /03/2007 USD -27,242, ,684, Sale of 36 TOKYO STOCK EXCH. INDEX -TOPIX- 08/03/2007 JPY -605,700, ,869, Sale of 157 FTSE 100 (FINANCIAL TIMES) 16/03/2007 GBP -9,814, ,633, Purchase of 41 EURO BUND EUREX FUTURE 09/03/2007 EUR 4,759, ,759, Purchase of 26 USA TREASURY NOTES 2 YEARS 30/03/2007 USD 5,305, ,028, Purchase of 7 JAPANESE FUTURE BONDS 10 09/03/2007 JPY 938,350, ,994, YEAR Purchase of 36 EURO BOBL BUND EUREX 09/03/2007 EUR 3,917, ,917, Purchase of 54 USA TREASURY NOTE 5 YEARS 30/03/2007 USD 5,676, ,310, Purchase of LONG GILT STERLING 28/03/2007 GBP 2,847, ,246, Sale of 37 DAX INDEX 19/03/2007 EUR -6,165, ,165, Purchase of 34 EURO SCHATZ FUTURE EUREX 09/03/2007 EUR 3,517, ,517, Purchase of 35 SMI INDEX 16/03/2007 CHF 3,083, ,919, Purchase of 60 EUREX FUTURE S/6% CONF /03/2007 CHF 7,626, ,747, YEARS Sale of 121 MSCI TAIWAN (SGX) INDEX 30/01/2007 USD -2,419, ,837, Purchase of 25 AEX INDEX (AMSTERDAM 19/01/2007 EUR 2,491, ,491, EXCHANGE) Sale of 51 CAC 40 INDEX 19/01/2007 EUR -2,828, ,828, Sale of 26 IBEX 35 INDEX 19/01/2007 EUR -3,670, ,670, Purchase of 24 NASDAQ 100 INDEX 15/03/2007 USD 4,258, ,233, Purchase of 36 S&P/TSE 60 INDEX 15/03/2007 CAD 5,379, ,525, Sale of 19 S&P MIB INDEX 16/03/2007 EUR -3,962, ,962, Sale of 61 HANG SENG INDEX 30/01/2007 HKD -61,054, ,963, Purchase of 250 BOLSA VALORES SAO PAULO 14/02/2007 BRL 11,272, ,007, INDICES Purchase of 458 WARSAW WIG 20 INDEX 16/03/2007 PLN 15,320, ,998, Purchase of 17 KOSPI 200 INDEX 08/03/2007 KRW 1,587,800, ,298, Sale of 27 RUSSELL 2000 INDICES (BRIDGE 15/03/2007 USD -10,813, ,210, DATA) Purchase of 228 IPC MEXICO INDEX 16/03/2007 MXN 60,283, ,218, Purchase of 65 SWEDEN OPTION MARKET 26/01/2007 SEK 7,497, , INDICES Purchase of 128 SGX CNX NIFTY INDICE 25/01/2007 USD 5,077, ,855, Sale of 163 SGX MSCI SINGAPORE ST. INDEX 30/01/2007 SGD -11,970, ,929, FUT. Purchase of 157 FTSE/JSE AFRICA TOP 40 15/03/2007 ZAR 36,051, ,902, Sale of 90 HANG SENG CHINA ENTERPRISES 30/01/2007 HKD -46,237, ,515, INDEX The net unrealised loss on these contracts as at December 31, 2006 was EUR 1,361, and is included in the statement of net assets. Quantam Maturity Currency Total commitment Total commitment in currency in USD Purchase of 2 S&P E-MINI 500 STOCK INDEX 16/03/2007 USD 143, , The net unrealised gain on this contract as at December 31, 2006 was USD and is included in the statement of net assets. 389

392 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 NOTE 9 FORWARD EXCHANGE CONTRACTS The SICAV had the following forward exchange contracts outstanding as at December 31, 2006: EUR Bonds Purchase Sale Maturity HUF 5,966,919, EUR 22,905, /01/2007 EUR 44,497, HUF 11,933,838, /01/2007 HUF 5,966,919, EUR 22,649, /01/2007 EUR 327, JPY 50,000, /01/2007 EUR 2,189, JPY 335,000, /01/2007 EUR 2,321, JPY 355,000, /01/2007 EUR 2,397, USD 3,200, /01/2007 EUR 224, USD 300, /01/2007 CHF 20,300, EUR 12,664, /01/2007 EUR 3,603, USD 4,800, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was EUR 1,055, and is included in the statement of net assets. USD Bonds Purchase Sale Maturity USD 334, EUR 250, /01/2007 USD 43, JPY 5,000, /01/2007 USD 87, JPY 10,000, /01/2007 USD 305, JPY 35,000, /01/2007 The net unrealised gain on these contracts as at December 31, 2006 was USD 19, and is included in the statement of net assets. USD Liquidity Purchase Sale Maturity USD 5,311, EUR 4,000, /01/2007 USD 98, GBP 50, /01/2007 The net unrealised gain on these contracts as at December 31, 2006 was USD 48, and is included in the statement of net assets. EUR Corporate Bonds Purchase Sale Maturity EUR 1,477, CHF 2,350, /01/2007 EUR 2,897, USD 3,860, /01/2007 USD 1,434, EUR 1,089, /01/2007 CHF 3,659, EUR 2,283, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was EUR 24, and is included in the statement of net assets. 390

393 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Global Emerging Debt Purchase Sale Maturity USD 6,508, BRL 14,000, /01/2007 BRL 14,000, USD 6,415, /01/2007 BRL 14,000, USD 6,466, /02/2007 USD 4,200, CHF 4,983, /03/2007 USD 2,100, CHF 2,503, /03/2007 CHF 5,000, USD 4,200, /03/2007 USD 2,100, CHF 2,510, /03/2007 USD 2,100, CHF 2,513, /03/2007 CHF 7,498, USD 6,300, /03/2007 USD 5,908, CZK 128,250, /03/2007 USD 1,300, CZK 27,105, /03/2007 EUR 850, USD 1,138, /03/2007 USD 1,138, EUR 850, /03/2007 USD 1,125, EUR 850, /03/2007 USD 1,126, EUR 850, /03/2007 EUR 1,700, USD 2,233, /03/2007 USD 831, EUR 645, /03/2007 USD 429, EUR 330, /03/2007 USD 2,247, EUR 1,700, /03/2007 USD 7,414, EUR 5,789, /03/2007 MXN 40,000, USD 3,696, /03/2007 MXN 45,300, USD 4,095, /03/2007 USD 4,177, MXN 45,300, /03/2007 USD 3,670, MXN 40,000, /03/2007 PHP 280,000, USD 5,614, /03/2007 USD 5,588, PHP 279,000, /03/2007 PHP 259,000, USD 5,213, /03/2007 PHP 185,000, USD 3,717, /03/2007 RUB 56,060, USD 2,092, /03/2007 RUB 68,000, USD 2,537, /03/2007 RUB 55,780, USD 2,081, /03/2007 THB 148,000, USD 4,128, /03/2007 USD 3,970, THB 145,000, /03/2007 THB 137,000, USD 3,702, /03/2007 USD 3,783, THB 140,000, /03/2007 TRY 5,400, USD 3,495, /03/2007 USD 1,738, TRY 2,700, /03/2007 TRY 5,400, USD 3,542, /03/2007 USD 1,735, TRY 2,700, /03/2007 USD 3,517, TRY 5,400, /03/2007 TRY 6,000, USD 3,966, /03/2007 ZAR 13,500, USD 1,879, /03/2007 USD 1,858, ZAR 13,500, /03/2007 EUR 357, USD 470, /01/2007 EUR 38,325, USD 50,499, /01/2007 CHF 14,381, USD 11,817, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was USD 175, and is included in the statement of net assets. Global Bonds Purchase Sale Maturity CHF 563, EUR 350, /01/2007 EUR 62, CHF 100, /01/2007 EUR 6, JPY 1,000, /01/2007 NOK 8,236, EUR 1,000, /01/2007 EUR 350, SEK 3,160, /01/2007 EUR 15, USD 20, /01/2007 USD 587, GBP 300, /01/2007 The net unrealised gain on these contracts as at December 31, 2006 was USD and is included in the statement of net assets. 391

394 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 EUR High Yield Purchase Sale Maturity CHF 12,872, EUR 8,030, /01/2007 EUR 1,219, USD 1,600, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was EUR 1, and is included in the statement of net assets. EUR Short Mid-Term Bonds Purchase Sale Maturity CHF 17,791, EUR 11,099, /01/2007 The net unrealised loss on this contract as at December 31, 2006 was EUR 7, and is included in the statement of net assets. EUR Turbo Income Purchase Sale Maturity EUR 59, AUD 100, /01/2007 CHF 1,287, EUR 800, /01/2007 EUR 666, CHF 1,060, /01/2007 HUF 118,843, EUR 451, /01/2007 EUR 886, HUF 237,686, /01/2007 HUF 118,843, EUR 456, /01/2007 EUR 13, JPY 2,000, /01/2007 EUR 23, JPY 3,600, /01/2007 EUR 65, JPY 10,000, /01/2007 NOK 18,120, EUR 2,200, /01/2007 EUR 710, SEK 6,411, /01/2007 EUR 1,276, USD 1,700, /01/2007 USD 1,140, ZAR 7,991, /01/2007 CHF 31,378, EUR 19,575, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was EUR 41, and is included in the statement of net assets. CHF Bonds Purchase Sale Maturity CHF 3,382, USD 2,800, /07/2007 CHF 2,381, EUR 1,500, /01/2007 CHF 5,272, USD 4,275, /01/2007 The net unrealised gain on these contracts as at December 31, 2006 was CHF 60, and is included in the statement of net assets. EUR Government Bonds Purchase Sale Maturity EUR 385, CHF 618, /01/2007 CHF 3,946, EUR 2,460, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was EUR 1, and is included in the statement of net assets. EUR Inflation Linked Bonds Purchase Sale Maturity EUR 22, JPY 3,500, /01/2007 EUR 13, JPY 2,000, /01/2007 The net unrealised gain on these contracts as at December 31, 2006 was EUR and is included in the statement of net assets. 392

395 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Emerging Local Currency Debt Purchase Sale Maturity USD 5,160, BRL 11,100, /01/2007 BRL 11,100, USD 5,086, /01/2007 BRL 11,100, USD 5,127, /02/2007 BRL 1,600, USD 731, /03/2007 BRL 1,300, USD 595, /03/2007 BRL 2,100, USD 964, /03/2007 USD 400, CHF 478, /03/2007 USD 800, CHF 949, /03/2007 CHF 952, USD 800, /03/2007 CHF 1,428, USD 1,200, /03/2007 USD 400, CHF 478, /03/2007 USD 400, CHF 476, /03/2007 USD 570, CLP 300,000, /03/2007 CLP 463,000, USD 880, /03/2007 CNY 23,000, USD 2,935, /01/2007 CNY 2,000, USD 256, /01/2007 CNY 2,800, USD 358, /01/2007 CNY 6,000, USD 769, /02/2007 CNY 5,400, USD 700, /03/2007 CNY 7,708, USD 1,000, /03/2007 CNY 7,713, USD 1,000, /03/2007 USD 1,939, COP 4,600,000, /03/2007 COP 1,600,000, USD 675, /03/2007 COP 1,100,000, USD 489, /03/2007 COP 770,000, USD 343, /03/2007 USD 787, COP 1,800,000, /03/2007 CZK 15,000, USD 721, /03/2007 USD 1,511, CZK 32,800, /03/2007 CZK 30,225, USD 1,360, /03/2007 CZK 4,100, USD 189, /03/2007 USD 556, CZK 11,600, /03/2007 CZK 8,300, USD 372, /03/2007 CZK 2,400, USD 108, /03/2007 CZK 40,000, USD 1,924, /03/2007 CZK 12,600, USD 606, /03/2007 EUR 150, USD 200, /03/2007 USD 200, EUR 150, /03/2007 USD 198, EUR 150, /03/2007 USD 396, EUR 300, /03/2007 EUR 300, USD 394, /03/2007 USD 909, EUR 710, /03/2007 USD 198, EUR 150, /03/2007 USD 393, EUR 305, /03/2007 HUF 17,900, USD 88, /03/2007 USD 534, HUF 111,380, /03/2007 USD 475, HUF 96,000, /03/2007 USD 764, HUF 162,150, /03/2007 HUF 190,000, USD 984, /03/2007 HUF 127,000, USD 656, /03/2007 HUF 355,000, USD 1,841, /03/2007 HUF 93,000, USD 479, /03/2007 IDR 6,342,700, USD 700, /03/2007 INR 89,000, USD 1,928, /01/2007 INR 44,650, USD 1,000, /03/2007 INR 44,840, USD 1,000, /03/2007 INR 67,700, USD 1,466, /04/2007 INR 22,000, USD 486, /05/

396 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Purchase Sale Maturity USD 917, MXN 10,000, /03/2007 USD 1,270, MXN 13,813, /03/2007 USD 1,902, MXN 20,766, /03/2007 USD 892, MXN 9,736, /03/2007 MXN 4,000, USD 361, /03/2007 MXN 10,600, USD 970, /03/2007 MXN 16,000, USD 1,470, /03/2007 MXN 9,800, USD 899, /03/2007 MXN 8,200, USD 741, /03/2007 MXN 10,000, USD 924, /03/2007 USD 737, MXN 8,000, /03/2007 MYR 3,300, USD 899, /01/2007 USD 519, MYR 1,900, /01/2007 MYR 2,000, USD 550, /01/2007 USD 1,104, PHP 55,000, /03/2007 PHP 55,000, USD 1,107, /03/2007 PHP 45,000, USD 902, /03/2007 PHP 50,000, USD 1,004, /03/2007 PLN 4,300, USD 1,489, /03/2007 PLN 3,000, USD 1,012, /03/2007 PLN 3,352, USD 1,088, /03/2007 USD 423, PLN 1,285, /03/2007 USD 1,397, PLN 4,056, /03/2007 USD 972, PLN 2,869, /03/2007 PLN 1,900, USD 657, /03/2007 PLN 7,000, USD 2,406, /03/2007 PLN 2,500, USD 857, /03/2007 RUB 35,000, USD 1,306, /03/2007 SKK 2,000, USD 69, /03/2007 SKK 5,000, USD 190, /03/2007 SKK 3,700, USD 133, /03/2007 SKK 17,300, USD 661, /03/2007 SKK 10,700, USD 369, /03/2007 SKK 35,000, USD 1,331, /03/2007 USD 260, THB 9,200, /01/2007 THB 9,200, USD 244, /01/2007 THB 37,000, USD 1,000, /03/2007 THB 35,000, USD 976, /03/2007 USD 870, THB 31,800, /03/2007 THB 9,200, USD 260, /03/2007 THB 36,670, USD 1,000, /03/2007 THB 35,250, USD 1,002, /03/2007 THB 31,407, USD 834, /04/2007 TRY 1,500, USD 970, /03/2007 TRY 1,500, USD 984, /03/2007 TRY 1,100, USD 727, /03/2007 USD 2,470, TRY 3,655, /03/2007 USD 5,024, TRY 7,343, /03/2007 USD 386, TRY 600, /03/2007 USD 385, TRY 600, /03/2007 USD 977, TRY 1,500, /03/2007 USD 652, TRY 1,012, /03/2007 TRY 1,400, USD 946, /03/2007 TRY 800, USD 544, /03/2007 TRY 4,300, USD 2,947, /03/2007 TRY 1,300, USD 882, /03/2007 ZAR 8,800, USD 1,242, /03/2007 USD 55, ZAR 433, /03/2007 ZAR 4,500, USD 584, /03/2007 ZAR 21,373, USD 3,029, /03/2007 ZAR 8,000, USD 1,136, /03/2007 ZAR 17,000, USD 2,402, /03/2007 ZAR 3,900, USD 551, /03/2007 ZAR 3,700, USD 515, /03/

397 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Purchase Sale Maturity USD 1,178, ZAR 8,344, /03/2007 USD 829, ZAR 6,330, /03/2007 USD 502, ZAR 3,725, /03/2007 USD 916, ZAR 6,705, /03/2007 USD 481, ZAR 3,500, /03/2007 USD 1,573, ZAR 11,131, /03/2007 The net unrealised gain on these contracts as at December 31, 2006 was USD 230, and is included in the statement of net assets. Asian Local Currency Debt Purchase Sale Maturity CNY 44,000, USD 5,615, /01/2007 CNY 3,523, USD 457, /03/2007 CNY 6,171, USD 800, /03/2007 CNY 2,314, USD 300, /03/2007 IDR 5,600,000, USD 606, /03/2007 IDR 7,345,600, USD 800, /03/2007 IDR 4,530,500, USD 500, /03/2007 IDR 4,161,150, USD 450, /03/2007 INR 92,200, USD 1,994, /01/2007 INR 157,000, USD 3,401, /01/2007 INR 18,600, USD 413, /02/2007 INR 26,000, USD 580, /02/2007 INR 22,325, USD 500, /03/2007 INR 45,030, USD 1,000, /03/2007 USD 871, KRW 800,000, /01/2007 KRW 800,000, USD 855, /01/2007 USD 980, KRW 900,000, /01/2007 KRW 900,000, USD 951, /01/2007 KRW 8,300,000, USD 8,832, /02/2007 KRW 720,000, USD 777, /02/2007 KRW 736,800, USD 800, /03/2007 KRW 416,475, USD 451, /03/2007 KRW 800,000, USD 873, /03/2007 KRW 924,500, USD 1,000, /03/2007 KRW 418,410, USD 450, /03/2007 KRW 927,900, USD 1,000, /03/2007 KRW 900,000, USD 982, /03/2007 KRW 4,400,000, USD 4,801, /03/2007 KRW 641,690, USD 700, /03/2007 USD 410, MYR 1,500, /01/2007 MYR 1,300, USD 358, /02/2007 MYR 2,700, USD 755, /02/2007 MYR 1,645, USD 466, /03/2007 USD 2,278, PHP 114,000, /01/2007 PHP 20,000, USD 402, /02/2007 PHP 111,000, USD 2,234, /03/2007 USD 2,229, PHP 111,000, /03/2007 PHP 185,000, USD 3,709, /03/2007 USD 6,340, SGD 10,000, /01/2007 SGD 10,000, USD 6,482, /01/2007 SGD 565, USD 363, /02/2007 USD 6,515, SGD 10,000, /03/

398 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Purchase Sale Maturity THB 56,000, USD 1,562, /03/2007 THB 90,750, USD 2,579, /03/2007 THB 15,000, USD 409, /04/2007 THB 32,000, USD 891, /04/2007 THB 74,780, USD 1,986, /04/2007 TWD 123,600, USD 3,804, /01/2007 TWD 191,286, USD 5,861, /01/2007 TWD 32,300, USD 1,000, /03/2007 TWD 25,552, USD 800, /03/2007 TWD 14,618, USD 454, /03/2007 TWD 12,800, USD 395, /04/2007 TWD 13,000, USD 407, /09/2007 The net unrealised gain on these contracts as at December 31, 2006 was USD 235, and is included in the statement of net assets. Biotech Purchase Sale Maturity EUR 1,399, USD 1,845, /01/2007 EUR 165,668, USD 218,293, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was USD 233, and is included in the statement of net assets. Asian Equities (Ex Japan) Purchase Sale Maturity EUR 11,281, USD 14,865, /01/2007 The net unrealised gain on this contract as at December 31, 2006 was USD 15, and is included in the statement of net assets. Japanese Equity Selection Purchase Sale Maturity EUR 32,853, JPY 5,113,600, /01/2007 The net unrealised gain on this contract as at December 31, 2006 was JPY 14,824, and is included in the statement of net assets. Generics Purchase Sale Maturity EUR 3,724, USD 4,907, /01/2007 The net unrealised gain on this contract as at December 31, 2006 was USD 5, and is included in the statement of net assets. Emerging Markets Large Cap Purchase Sale Maturity EUR 27,801, USD 36,633, /01/2007 The net unrealised gain on this contract as at December 31, 2006 was USD 37, and is included in the statement of net assets. 396

399 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Absolute Return Global Diversified Purchase Sale Maturity EUR 220, AUD 371, /01/2007 USD 303, BRL 663, /01/2007 EUR 242, CAD 363, /01/2007 EUR 2,051, CHF 3,255, /01/2007 GBP 803, EUR 1,192, /01/2007 EUR 20,109, GBP 13,595, /01/2007 EUR 19,555, HKD 200,503, /01/2007 EUR 1,378, HKD 14,141, /01/2007 EUR 40, HKD 417, /01/2007 EUR 8,237, JPY 1,254,387, /01/2007 EUR 354, MXN 5,157, /01/2007 EUR 362, PLN 1,387, /01/2007 EUR 3,043, SEK 27,587, /01/2007 EUR 9,915, SGD 20,168, /01/2007 EUR 221, SGD 450, /01/2007 EUR 195, SGD 400, /01/2007 EUR 39,597, USD 52,190, /01/2007 EUR 453, USD 600, /01/2007 EUR 8,808, USD 11,647, /01/2007 EUR 1,488, USD 1,976, /01/2007 EUR 284, ZAR 2,689, /01/2007 USD 3,264, KRW 3,034,573, /01/2007 USD 8,080, TWD 261,355, /01/2007 The net unrealised loss on these contracts as at December 31, 2006 was EUR 35, and is included in the statement of net assets. US Equity Selection Purchase Sale Maturity EUR 23,333, USD 30,745, /01/2007 The net unrealised loss on this contract as at December 31, 2006 was USD 32, and is included in the statement of net assets. NOTE 10 SWAP CONTRACTS The SICAV had the following interest rate swaps outstanding as at December 31, 2006: EUR Bonds Nominal value Currency Rate payable Rate receivable (semi-annually) Transaction Maturity date date 36,241,337 EUR EUR EURIBOR 6 months 4.049% 07/11/ /07/2034 The net unrealised loss on this interest rate swap contract as at December 31, 2006 was EUR 1,407, and is included in the statement of net assets. Global Emerging Debt Nominal value Currency Rate payable Rate receivable (semi-annually) Transaction Maturity date date 18,297, BRL BZDIOVRA Index 14.04% 29/09/ /01/ ,593, BRL BZDIOVRA Index 13.62% 11/10/ /01/2010 The net unrealised gain on these interest rate swap contracts as at December 31, 2006 was USD 663, and is included in the statement of net assets. 397

400 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 EUR Turbo Income Nominal value Currency Rate payable Rate receivable (semi-annually) Transaction Maturity date date 500,000 CHF CHF-LIBOR-BBA 6 months 2.715% 29/09/ /09/2016 3,700,000 CHF CHF-LIBOR-BBA 6 months 2.79% 20/12/ /12/2016 The net unrealised loss on these interest rate swap contracts as at December 31, 2006 was EUR 1, and is included in the statement of net assets. CHF Bonds Nominal value Currency Rate payable Rate receivable (semi-annually) Transaction Maturity date date 29,000,000 CHF 2.065% CHF-LIBOR-BBA 6 months 08/10/ /10/ ,000,000 CHF % CHF-LIBOR-BBA 6 months 14/10/ /10/ ,500,000 CHF CHF-LIBOR-BBA 6 months 1.49% 01/12/ /12/ ,000,000 CHF CHF-LIBOR-BBA 6 months 1.82% 02/02/ /02/ ,000,000 CHF 2.285% CHF-LIBOR-BBA 6 months 17/02/ /02/ ,000,000 CHF CHF-LIBOR-BBA 6 months 2.36% 23/02/ /02/ ,800,000 CHF 2.61% CHF-LIBOR-BBA 6 months 16/03/ /03/ ,000,000 CHF CHF-LIBOR-BBA 6 months 2.327% 31/10/ /11/ ,500,000 CHF CHF-LIBOR-BBA 6 months 2.715% 29/09/ /09/ ,000,000 CHF CHF-LIBOR-BBA 6 months 2.79% 20/12/ /12/2016 The net unrealised loss on these interest rate swap contracts as at December 31, 2006 was CHF 57, and is included in the statement of net assets. EUR Government Bonds Nominal value Currency Rate payable Rate receivable (semi-annually) Transaction Maturity date date 4,180,396 EUR EUR EURIBOR 6 months 4.049% 07/11/ /07/2034 The net unrealised loss on this interest rate swap contract as at December 31, 2006 was EUR 162, and is included in the statement of net assets. 398

401 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Emerging Local Currency Debt Nominal value Currency Rate payable Rate receivable (semi-annually) Transaction Maturity date date 1,543, BRL BZDIOVRA Index 15.07% 20/07/ /01/2010 1,614, BRL BZDIOVRA Index 14.16% 06/09/ /01/2010 7,024, BRL BZDIOVRA Index 12.44% 22/12/ /01/2010 1,660, BRL BZDIOVRA Index 13.62% 11/10/ /01/2010 1,590, BRL BZDIOVRA Index 14.40% 16/08/ /01/2010 1,633, BRL BZDIOVRA Index 14.04% 29/09/ /01/ ,000,000 CNY CFETS 2.75% 22/12/ /12/ ,000,000 CNY CNIFC 2.97% 22/11/ /11/2008 1,000,000 KRW KRW-CD-KSDA 3 Mois 4.80% 21/08/ /08/ ,000,000 INR INR-MIBOR-OIS- 7.26% 21/11/ /11/2016 COMPOUND 50,000,000 INR INR-MIBOR-OIS- 7.22% 03/10/ /10/2016 COMPOUND 60,000,000 INR INR-OI-IBOR-ON 7.54% 27/06/ /06/ ,000,000 CZK CZK-PRIBOR-PRBO 3.75% 20/07/ /07/ ,000,000 THB THB-THBFIX 6 Mois 5.10% 21/11/ /11/ ,000,000 THB THB-THBFIX 6 Mois 5.23% 19/12/ /12/ ,000,000 THB THB-THBFIX 6 Mois 5.41% 20/09/ /09/ ,000,000 THB THB-THBFIX 6 Mois 6.08% 13/07/ /07/ ,000,000 INR INR-MIBOR-OIS- 7.52% 22/12/ /2016 COMPOUND 39,800,000 INR INR-MIBOR-OIS- 7.30% 27/06/ /2011 COMPOUND The net unrealised gain on these interest rate swap contracts as at December 31, 2006 was USD 105, and is included in the statement of net assets. Asian Local Currency Debt Nominal value Currency Rate payable Rate receivable (semi-annually) Transaction Maturity date date 130,000,000 CNY CNIFC 2.97% 22/11/ /11/ ,000,000 PHP USD-LIBOR-BBA 6 months 9.50% 19/07/ /07/ ,539,000 PHP USD-LIBOR-BBA 6 months 8.85% 29/06/ /06/2011 1,000,000,000 KRW KRCDC 4.83% 17/08/ /08/ ,000,000 TWD TWD Telerate % 06/12/ /12/2016 Months 60,000,000 TWD TWD Telerate % 04/12/ /12/2016 Months 45,000,000 INR INR-MIBOR-OIS- 7.52% 22/12/ /12/2016 COMPOUND 100,000,000 INR INR-MIBOR-OIS- 7.33% 11/12/ /12/2016 COMPOUND 120,000,000 INR INR-MIBOR-DAILY- 7.68% 19/07/ /07/2016 COMPOUND 11,200,000 INR INR-MIBOR-OIS- 7.30% 28/06/ /06/2011 COMPOUND 146,000,000 THB THB-THBFIX 6 Months 5.30% 19/12/ /12/ ,000,000 THB THB-THBFIX 6 Months 4.99% 12/12/ /12/ ,000,000 THB THB-THBFIX 6 Months 5.41% 20/09/ /09/ ,000,000 THB THB-THBFIX 6 Months 6.05% 19/07/ /07/ ,000,000 THB THB-THBFIX 6 Months 5.23% 19/12/ / ,000 INR INR-MIBOR-OIS- 7.54% 27/06/ /2016 COMPOUND 200,000,000 KRW KRW-CD-KSDA 3 Months 4.80% 21/08/ / ,000,000 CNY CFETS 2.75% 26/12/ / ,000,000 THB THB-THBFIX 6 Months 6.08% 13/07/ /2016 The net unrealised gain on these interest rate swap contracts as at December 31, 2006 was USD 1,338, and is included in the statement of net assets. 399

402 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 The SICAV had the following total return swaps outstanding as at December 31, 2006: Emerging Local Currency Debt Description Maturity date Currency Notional value Valuation as at December 31, 2006 (USD) 11% TRS INDONESIA (UBS LDN) 15/11/ /11/2020 IDR 5,600, , % TRS INDONESIA (UBS LDN) 15/02/ /02/2011 IDR 8,000, , The net unrealised gain on these total return swap contracts as at December 31, 2006 was USD 119, and is included in the statement of net assets. Asian Local Currency Debt Description Maturity date Currency Notional value Valuation as at December 31, 2006 (USD) 11% TRS INDONESIA (UBS LDN) 15/11/ /11/2020 IDR 4,400, , % TRS INDONESIA (UBS) (IDR) 15/03/ /03/2013 IDR 20,000, , % TRS INDONESIA (UBS LDN) 15/02/ /02/2011 IDR 22,000, , The net unrealised gain on these total return swap contracts as at December 31, 2006 was USD 592, and is included in the statement of net assets. NOTE 11 CREDIT DEFAULT SWAPS (CDS) A credit default swap (CDS) is a bilateral financial agreement whereby a counterparty (the protection buyer) pays a premium for the commitment of the protection seller to cover the credit risk of the reference issuer as provided for by the agreement. The protection buyer acquires the right to sell a specific bond, issued by the reference issuer, at its nominal value (or at another reference value or execution price) when a credit risk exists. A credit risk generally includes bankruptcy, insolvency, judicial settlement/compulsory liquidation, deferral or non-payment of outstanding debts. In its capacity as protection buyer, the SICAV had the following credit default swaps outstanding as at December 31, 2006: EUR Bonds Entity: Continental Aktiengesellschaft 05/12/08, coupon 6.875% Nominal value Currency Rate payable Transaction date Maturity date 8,700,000 EUR 0.60% p.a. (payable quarterly) 22/12/ /03/2012 Entity: Valeo 01/01/11, coupon 2.375% Nominal value Currency Rate payable Transaction date Maturity date 7,600,000 EUR 0.69% p.a. (payable quarterly) 22/12/ /03/2012 The net unrealised gain on these contracts as at December 31, 2006 was EUR 4, and is included in the statement of net assets. 400

403 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 CHF Liquidity Entity: Kaupthing Nominal value Currency Rate payable Transaction date Maturity date 10,000,000 CHF 0.8% p.a. (payable quarterly) 31/05/ /06/2007 The net unrealised loss on this contract as at December 31, 2006 was CHF 29, and is included in the statement of net assets. EUR Corporate Bonds Entity: Continental Aktiengesellschaft 05/12/08, coupon 6.875% Nominal value Currency Rate payable Transaction date Maturity date 1,000,000 EUR 0.60% p.a. (payable quarterly) 22/12/ /03/2012 Entity: Valeo 01/01/11, coupon 2.375% Nominal value Currency Rate payable Transaction date Maturity date 1,450,000 EUR 0.69% p.a. (payable quarterly) 22/12/ /03/2012 The net unrealised gain on these contracts as at December 31, 2006 was EUR and is included in the statement of net assets. Global Bonds Entity: Continental Aktiengesellschaft 05/12/08, coupon 6.875% Nominal value Currency Rate payable Transaction date Maturity date 150,000 EUR 0.60% p.a. (payable quarterly) 22/12/ /03/2012 Entity: Valeo 01/01/11, coupon 2.375% Nominal value Currency Rate payable Transaction date Maturity date 100,000 EUR 0.69% p.a. (payable quarterly) 22/12/ /03/2012 The net unrealised gain on these contracts as at December 31, 2006 was USD and is included in the statement of net assets. EUR Turbo Income Entity: Continental Aktiengesellschaft 05/12/08, coupon 6.875% Nominal value Currency Rate payable Transaction date Maturity date 300,000 EUR 0.60% p.a. (payable quarterly) 22/12/ /03/

404 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 Entity: Valeo 01/01/11, coupon 2.375% Nominal value Currency Rate payable Transaction date Maturity date 250,000 EUR 0.69% p.a. (payable quarterly) 22/12/ /03/2012 The net unrealised gain on these contracts as at December 31, 2006 was EUR and is included in the statement of net assets. CHF Bonds Entity: Kaupthing Nominal value Currency Rate payable Transaction date Maturity date 20,000,000 CHF 0.8% p.a. (payable quarterly) 31/05/ /06/2007 Entity: Continental Aktiengesellschaft 05/12/08, coupon 6.875% Nominal value Currency Rate payable Transaction date Maturity date 2,500,000 EUR 0.60% p.a. (payable quarterly) 22/12/ /03/2012 The net unrealised loss on these contracts as at December 31, 2006 was CHF 57, and is included in the statement of net assets. Asian Local Currency Debt Entity: Chartered Semiconductor Manufacturing Ltd 06/11 Nominal value Currency Rate payable Transaction date Maturity date 500,000 USD 0.84% p.a. (payable quarterly) 07/09/ /09/2011 The net unrealised loss on this contract as at December 31, 2006 was USD 3, and is included in the statement of net assets. In its capacity as protection seller, the SICAV had the following credit default swaps outstanding as at December 31, 2006: USD Liquidity Entity: Rabobank Nederland 15/04/09, coupon 6% Nominal value Currency Rate receivable Transaction date Maturity date 10,000,000 USD 25% p.a. (payable quarterly) 06/06/ /07/2007 The net unrealised gain on this contract as at December 31, 2006 was USD and is included in the statement of net assets. 402

405 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 EUR Liquidity Entity: Merrill Lynch 17/02/09, coupon 6% Nominal value Currency Rate receivable Transaction date Maturity date 10,000,000 EUR 0.06% p.a. (payable quarterly) 23/05/ /06/2007 Entity: Morgan Stanley 01/04/12, coupon 6.60% Nominal value Currency Rate receivable Transaction date Maturity date 10,000,000 EUR 0.07% p.a. (payable quarterly) 23/05/ /06/2007 The net unrealised gain on these contracts as at December 31, 2006 was EUR 936 and is included in the statement of net assets. EUR Corporate Bonds Entity: Deutsche Telekom International Finance BV 29/05/12, coupon 8.125% Nominal value Currency Rate receivable Transaction date Maturity date 2,000,000 EUR 0.44% p.a. (payable quarterly) 21/10/ /12/2009 The net unrealised gain on this contract as at December 31, 2006 was EUR 11, and is included in the statement of net assets. CHF Bonds Entity: ITRAXX EUROPE Series 4 Version 1 Nominal value Currency Rate receivable Transaction date Maturity date 50,000,000 EUR 0.35% p.a. (payable quarterly) 02/02/ /12/2010 Entity:Bayerische Motoren Werke Aktiengesellschaft 20/02/13, Coupon 4.625% Nominal value Currency Rate receivable Transaction date Maturity date 5,000,000 EUR 0.18% p.a. (payable quarterly) 16/06/ /06/2011 The net unrealised gain on these contracts as at December 31, 2006 was CHF 432, and is included in the statement of net assets. 403

406 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) NOTES TO THE FINANCIAL STATEMENTS AS AT DECEMBER 31, 2006 NOTE 12 SECURITIES LENDING During the year ended December 31, 2006, the Fund entered into securities lending transactions. For the following sub-funds, the market value of the securities lent as at December 31, 2006 was: Pictet Funds (LUX) - Japanese Equities JPY 4,631,514, Pictet Funds (LUX) - Japanese Mid-Small Cap JPY 464,035, Pictet Funds (LUX) - Emerging Markets USD 43,924, Pictet Funds (LUX) - Eastern Europe EUR 76,448, Pictet Funds (LUX) - USA Index USD 196,010, Pictet Funds (LUX) - Europe Index EUR 14,616, Pictet Funds (LUX) - Continental European Equities EUR 4,343, Pictet Funds (LUX) - US Equities USD 5,424, Pictet Funds (LUX) - Japanese Equity Selection JPY 20,505,100, Pictet Funds (LUX) - Asian Equities (Ex Japan) USD 81,744, Pictet Funds (LUX) - Absolute Return Global Diversified EUR 15,092, Pictet Funds (LUX) - Japan Index JPY 759,195, Pictet Funds (LUX) - Pacific (Ex Japan) Index USD 3,393, Pictet Funds (LUX) - Emerging Markets Index USD 556, Pictet Funds (LUX) - Generics USD 455, Pictet Funds (LUX) - Small Cap Europe EUR 13,902, Pictet Funds (LUX) - Water EUR 221,730, Pictet Funds (LUX) - European Equity Selection EUR 122,244, Pictet Funds (LUX) - Global Equity Selection USD 7,879, Pictet Funds (LUX) - Greater China USD 42,293, Pictet Funds (LUX) - Telecom USD 42,350, Pictet Funds (LUX) - European Equity Selection EUR 2,786, Pictet Funds (LUX) - US Equity Selection USD 35,661, Pictet Funds (LUX) - Premium Brands EUR 3,912, Pictet Funds (LUX) - Euroland Index EUR 698, NOTE 13 DIVIDENDS PAID On April 18, 2006, the General Meeting of Shareholders of the SICAV decided to pay out the following dividends: Pictet Funds (LUX) - EUR Bonds (P Distr) EUR 9.15 per share Pictet Funds (LUX) - USD Bonds (P Distr) USD per share Pictet Funds (LUX) - CHF Bonds (P Distr) CHF 0.02 per share Pictet Funds (LUX) - CHF Liquidity (P Distr) CHF 2.16 per share Pictet Funds (LUX) - USD Liquidity (P Distr) USD 2.79 per share Pictet Funds (LUX) - EUR Liquidity (P Distr) EUR 2.15 per share Pictet Funds (LUX) - EUR Corporate Bonds (P Distr) EUR 2.73 per share Pictet Funds (LUX) - EUR Corporate Bonds (Z Distr) EUR 0.94 per share Pictet Funds (LUX) - Global Emerging Debt (P Distr) USD 7.33 per share Pictet Funds (LUX) - Global Bonds (P Distr) USD 2.67 per share Pictet Funds (LUX) - EUR High Yield (P Distr) EUR 6.16 per share Pictet Funds (LUX) - EUR Short Mid-Term Bonds (P Distr) EUR 4.70 per share Pictet Funds (LUX) - USD Short Mid-Term Bonds (P Distr) USD 3.34 per share Pictet Funds (LUX) - EUR Turbo Income (P Distr) EUR 1.00 per share Dividends were paid with an ex-date of April 21, 2006 and with a payment date of April 26,

407 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 EUR Bonds I 0.70% R 1.34% P Cap 1.04% P Distr 1.04% Z Cap 0.31% HI-CHF 0.75% HP Cap-CHF 1.09% USD Bonds I 0.71% R 1.36% P Cap 1.05% P Distr 1.05% Z Cap 0.32% CHF Liquidity I 0.22% R 0.31% P Cap 0.26% P Distr 0.26% Z Cap 0.12% USD Liquidity I 0.26% R 0.61% P Cap 0.40% P Distr 0.40% Z Cap 0.17% EUR Liquidity I 0.26% R 0.60% P Cap 0.40% P Distr 0.40% Z Cap 0.17% 405

408 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 EUR Corporate Bonds I 0.71% R 1.34% P Cap 1.05% P Distr 1.05% Z Distr 0.31% Z Cap 0.31% HI-CHF 0.77% HP Cap-CHF 1.10% HI-USD 0.72% HP Cap-USD 1.09% Global Emerging Debt I 1.27% R 1.90% P Cap 1.64% P Distr 1.64% Z Cap 0.37% HI-EUR 1.31% HP Cap-EUR 1.71% HI-CHF 1.30% HP Cap-CHF 1.73% Global Bonds I 0.72% R 1.35% P Cap 1.05% P Distr 1.05% EUR High Yield I 1.21% R 1.87% P Cap 1.61% P Distr 1.61% Z Cap 0.31% HI-CHF 1.26% HP Cap-CHF 1.65% 406

409 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 EUR Short Mid-Term Bonds I 0.41% R 0.78% P Cap 0.60% P Distr 0.60% Z Cap 0.17% HI-CHF 0.36% HP Cap-CHF 0.50% USD Short Mid-Term Bonds I 0.42% R 0.81% P Cap 0.60% P Distr 0.60% EUR Turbo Income I 0.41% R 0.80% P Cap 0.67% P Distr 0.67% Z Cap 0.18% HI-CHF 0.47% HP Cap-CHF 0.71% HZ Cap-CHF 0.21% CHF Bonds I 0.62% R 1.15% P Cap 0.90% P Distr 0.90% Z Cap 0.31% EUR Government I 0.41% Bonds R 0.86% P Cap 0.66% P Distr 0.66% Z Cap 0.22% HI-CHF 0.47% HP Cap-CHF 0.77% 407

410 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 EUR Inflation Linked Bonds I 0.47% P Cap 0.86% P Distr 0.86% R 1.06% Z 0.18% EUR Asset Backed Securities I 0.49% P Cap 0.71% P Distr 0.71% R 0.80% Z 0.25% Emerging Local Currency Debt I 1.16% P Cap 1.98% P Distr 1.98% R 2.59% Z 0.47% Asian Local Currency Debt I 1.12% P Cap 1.91% P Distr 1.91% R 2.35% Z 0.42% European Equity I 0.97% Selection P Cap 1.30% P Distr 1.30% R 1.80% Z 0.10% Small Cap Europe I 1.46% P Cap 1.74% P Distr 1.74% R 2.30% Z 0.21% 408

411 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 Emerging Markets I 1.98% P Cap 2.52% P Distr 2.52% R 3.02% Z 0.49% I 1.96% P Cap 2.50% R 3.00% Eastern Europe I 2.00% P Cap 2.30% P Distr 2.30% R 2.82% Z 0.75% Europe Index I 0.19% P Cap 0.34% P Distr 0.34% R 0.63% Z 0.06% USA Index I 0.05% P Cap 0.24% P Distr 0.24% R 0.57% Z 0.03% European Sustainable I 0.71% Equities P Cap 1.09% P Distr 1.06% R 1.40% Z 0.33% Japan Index I 0.37% P Cap 0.51% P Distr 0.51% R 0.81% Z 0.27% 409

412 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 Pacific (Ex Japan) I 0.35% Index P Cap 0.50% P Distr 0.50% R 0.79% Z 0.24% Telecom I 1.00% P Cap 1.63% P Distr 1.63% R 2.18% Z 0.15% Biotech I 1.26% P Cap 1.92% P Distr 1.88% R 2.43% Z 0.41% I-EUR 1.24% P Cap-EUR 1.88% R-EUR 2.38% HP Cap-EUR 1.98% HR-EUR 2.49% Premium Brands I 1.21% P Cap 1.88% P Distr 1.88% R 2.39% Water I 1.15% P Cap 1.83% P Distr 1.88% R 2.39% Z 0.26% I-USD 1.06% P Cap-USD 1.88% R-USD 2.37% 410

413 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 Indian Equities I 1.61% P Cap 2.18% P Distr 2.18% R 2.71% Z 0.66% I 1.56% P Cap 2.10% R 2.60% Japanese Equities I 1.13% P Cap 1.44% P Distr 1.44% R 1.94% I 1.15% P Cap 1.40% R 1.90% US Equities I 0.79% P Cap 1.16% P Distr 1.16% R 1.65% Asian Equities I 1.26% (Ex Japan) P Cap 1.82% P Distr 1.82% R 2.33% Z 0.29% I 1.22% P Cap 1.73% R 2.24% HP Cap-EUR 1.94% HR-EUR 2.48% Global Equity I 0.97% Selection P Cap 1.53% P Distr 1.53% R 1.83% Z 0.22% 411

414 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 Continental I 0.80% European Equities P Cap 1.16% P Distr 1.16% R 1.67% Greater China I 1.33% P Cap 1.92% P Distr 1.92% R 2.44% Z 0.38% I 1.33% P Cap 1.87% R 2.37% Japanese Equity I 1.00% Selection P Cap 1.33% P Distr 1.33% R 1.83% Z 0.27% I 0.95% P Cap 1.25% R 1.74% HP Cap-EUR 1.43% HR-EUR 2.05% Emerging Markets I 0.65% Index P Cap 0.89% P Distr 0.89% R 1.20% Z 0.34% 412

415 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 Generics I 1.24% P Cap 1.90% P Distr 1.93% R 2.41% Z 0.35% I-EUR 1.24% P Cap-EUR 1.93% R-EUR 2.43% HP Cap-EUR 2.04% HR-EUR 2.65% Japanese Mid-Small I 1.60% Cap P Cap 1.95% P Distr 1.95% R 2.48% Z 0.40% I 1.60% P Cap 1.90% R 2.40% Emerging Markets I 1.90% Large Cap P Cap 2.52% P Distr 2.50% R 3.06% Z 0.48% I 1.96% P Cap 2.50% R 3.00% HI-EUR 1.99% HP Cap-EUR 2.62% HR-EUR 3.15% Absolute Return Global I 0.76% Diversified P Cap 1.32% P Distr 1.30% R 1.82% Z 0.29% 413

416 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) TER (TOTAL EXPENSE RATIO) Sub-fund Type of share Total Expense Ratio in % For the year/period ended December 31, 2006 Euroland Index I 0.31% P Cap 0.45% P Distr 0.45% R 0.75% Z 0.21% US Equity Selection I 0.91% P Cap 1.54% P Distr 1.55% R 2.04% Z 0.31% HI-EUR 0.96% HP Cap-EUR 1.61% HR-EUR 2.16% Security I 1.14% P Cap 2.05% P Distr 2.05% R 2.68% I 1.14% P Cap 1.98% R 2.68% Quantam I 0.41% P Cap 0.75% P Distr 0.75% R 1.05% Z 0.11% Calculation of the Total Expense Ratio (TER): TER% = TOTAL OPERATING EXPENSES * 100 AVERAGE FUND ASSETS (*) (*) Calculated as daily average of the total net assets for the year/period ended December 31,

417 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) PTR (PORTFOLIO TURNOVER RATIO) Sub-fund PTR (Portfolio Turnover Ratio) in % For the year/period ended December 31, 2006 EUR Bonds 14.16% USD Bonds 3.56% CHF Liquidity % USD Liquidity % EUR Liquidity % EUR Corporate Bonds % Global Emerging Debt % Global Bonds 32.72% EUR High Yield 89.15% EUR Short Mid-Term Bonds 25.52% USD Short Mid-Term Bonds % EUR Turbo Income % CHF Bonds 47.10% EUR Government Bonds 14.49% EUR Inflation Linked Bonds 13.81% EUR Asset Backed Securities % Emerging Local Currency Debt -1.81% Asian Local Currency Debt 62.39% European Equity Selection 53.37% Small Cap Europe 54.30% Emerging Markets 64.13% Eastern Europe % Europe Index 25.43% USA Index % European Sustainable Equities 20.57% Japan Index % Pacific (Ex Japan) Index % Telecom % Biotech 3.34% Premium Brands 0.39% Water 4.09% Indian Equities % Japanese Equities 69.55% US Equities % Asian Equities (Ex Japan) % Global Equity Selection % Continental European Equities % Greater China % Japanese Equity Selection 43.02% 415

418 Pictet Funds (LUX) (formerly Pictet Fixed Income Fund) PTR (PORTFOLIO TURNOVER RATIO) Sub-fund PTR (Portfolio Turnover Ratio) in % For the year/period ended December 31, 2006 Emerging Markets Index % Generics 30.62% Japanese Mid-Small Cap % Emerging Markets Large Cap % Absolute Return Global Diversified % Euroland Index 48.36% US Equity Selection 34.64% Security % Quantam % Calculation of the Portfolio Turnover Ratio: PTR = (TOTAL PURCHASES + TOTAL SALES) - (TOTAL SUBSCRIPTIONS + TOTAL REDEMPTIONS) AVERAGE FUND ASSETS (*) (*) Calculated as daily average of the total net assets for the year/period ended December 31,

419 For further information, please contact us at: Tel.+41 (58)