Annual Report 2013/2014

Transcription

1 ab Asset management UBS Funds Annual Report 2013/2014 Investment Company under Luxembourg Law (SICAV) R.C.S. Luxembourg N B Audited annual report as of 30 September 2014 Active Defense 5 (CHF) Active Defense 5 (EUR) Active Defense 5 (USD) All-Rounder (EUR) Asian Equities (USD) Asian Global Strategy Balanced (USD) Commodity Strategy (USD) Dynamic Alpha (USD) Emerging Markets Allocation (USD) Emerging Markets Income (USD) EUR Bond Enhanced (EUR)* European Core Equities (EUR) European Growth and Income (EUR) Global Allocation (CHF) Global Allocation (EUR) Global Allocation (USD) Global Allocation Focus Europe (EUR) Global Alpha Opportunities (EUR) Global Equities (USD) Global Real Estate Securities (USD) Multi Asset Income (USD) Smart Allocator (USD) * formerly EUR Bonds (EUR)

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3 Audited annual report as of 30 September 2014 Table of contents Page ISIN Management and Administration 3 Features of the Company 5 Independent auditor s report Active Defense 5 (CHF) 14 P-acc LU Active Defense 5 (EUR) 16 P-acc LU Active Defense 5 (USD) 18 P-acc LU All-Rounder (EUR) 20 U-X-acc LU Q-acc LU N-acc LU Asian Equities (USD) 24 P-acc LU (GBP) P-dist LU U-X-acc LU I-A1-acc LU Asian Global Strategy Balanced (USD) 30 P-mdist LU P-acc LU P-dist LU (HKD) P-mdist LU (HKD) P-acc LU (SGD hedged) P-mdist LU P-4%-mdist LU Commodity Strategy (USD) 36 U-X-acc LU (CHF hedged) I-X-acc LU Dynamic Alpha (USD) 40 P-acc LU (CAD hedged) P-acc LU (SGD hedged) P-acc LU I-B-acc LU I-X-acc LU (CHF hedged) P-acc LU (EUR hedged) P-acc LU (EUR hedged) I-A2-acc LU (CHF hedged) I-X-acc LU (EUR hedged) I-B-acc LU K-1-UKdist LU (EUR hedged) N-acc LU Emerging Markets Allocation (USD) 53 P-acc LU (CHF hedged) P-acc LU (EUR hedged) P-acc LU (EUR hedged) N-acc LU Emerging Markets Income (USD) 58 P-mdist LU P-dist LU P-acc LU (EUR hedged) P-dist LU (EUR hedged) P-acc LU (SGD hedged) P-mdist LU (HKD) P-mdist LU (AUD hedged) P-mdist LU (EUR hedged) Q-acc LU EUR Bond Enhanced (EUR)* 63 P-acc LU P-dist LU European Core Equities (EUR) 68 P-acc LU K-1-acc LU U-X-acc LU European Growth and Income (EUR) 74 P-acc LU P-8%-mdist LU (USD hedged) P-acc LU (USD hedged) P-8%-mdist LU (RMB hedged) P-8%-mdist LU (HKD hedged) P-8%-mdist LU (SGD hedged) P-acc LU (SGD hedged) P-8%-mdist LU (USD hedged) P-mdist LU (HKD hedged) P-mdist LU (SGD hedged) P-mdist LU K-1-8%-mdist LU (HKD hedged) K-1-8%-mdist LU (AUD hedged) P-8%-mdist LU * formerly EUR Bonds (EUR) 1

4 Global Allocation (CHF) 84 P-acc LU K-1-acc LU Global Allocation (EUR) 90 P-acc LU (CAD hedged) P-acc LU (SGD hedged) P-acc LU N-acc LU Q-acc LU I-B-acc LU (GBP hedged) P-acc LU Global Allocation (USD) 102 P-acc LU K-1-acc LU I-A2-acc LU I-X-acc LU (JPY) P-acc LU Global Allocation Focus Europe (EUR) 109 P-acc LU (CHF hedged) P-acc LU (USD hedged) P-acc LU K-1-acc LU Q-acc LU Global Alpha Opportunities (EUR) 116 I-X-acc LU U-X-acc LU P-acc LU (CHF hedged) P-acc LU (USD hedged) P-acc LU I-A1-acc LU (USD hedged) I-A1-acc LU Global Equities (USD) 121 P-acc LU (EUR) P-acc LU (EUR) K-1-acc LU I-X-acc LU U-X-acc LU Global Real Estate Securities (USD) 128 (EUR hedged) I-A1-acc LU I-A1-acc LU P-acc LU Multi Asset Income (USD) 135 (CHF hedged) P-dist LU (EUR hedged) P-dist LU P-dist LU (CHF hedged) I-X-acc LU (EUR hedged) I-X-acc LU (GBP hedged) P-UKdist LU (EUR hedged) N-dist LU (CHF hedged) P-acc LU (EUR hedged) P-acc LU P-acc LU (GBP hedged) P-acc LU Smart Allocator (USD) 142 U-X-acc LU Notes to the Financial Statements 147 Global Exposure (unaudited) 161 Securities Lending (unaudited) 164 Sales restrictions Shares of this Company may not be offered, sold or distributed within the United States of America. Internet address 2

5 Management and Administration Registered Office 33A, avenue J.F. Kennedy, L-1855 Luxembourg R.C.S. Luxembourg N B Board of Directors Robert Süttinger, President Managing Director, UBS AG, Basel and Zurich Michael Kehl, Member Managing Director, UBS AG, Basel and Zurich Thomas Portmann, Member Executive Director, UBS AG, Basel and Zurich Kai Gammelin, Member (from 19 June 2014) Executive Director, UBS AG, Basel and Zurich Aloyse Hemmen, Member (until 30 June 2014) Executive Director, UBS Fund Management (Luxembourg) S.A., Luxembourg Management Company UBS Fund Management (Luxembourg) S.A., 33A, avenue J.F. Kennedy, L-1855 Luxembourg R.C.S. Luxembourg N B Portfolio Manager Asian Equities (USD) UBS Global Asset Management (Singapore) Ltd., Singapore All-Rounder (EUR) Asian Global Strategy Balanced (USD) Emerging Markets Income (USD) EUR Bond Enhanced (EUR)* European Core Equities (EUR) Global Allocation (CHF) Global Allocation (EUR) Global Allocation (USD) Global Allocation Focus Europe (EUR) Global Real Estate Securities (USD) Smart Allocator (USD) UBS AG, UBS Global Asset Management, Basel and Zurich Commodity Strategy (USD) Dynamic Alpha (USD) Emerging Markets Allocation (USD) European Growth and Income (EUR) Global Equities (USD) Multi Asset Income (USD) UBS Global Asset Management (UK) Ltd., London Global Alpha Opportunities (EUR) UBS Alternative & Quantitative Investments LLC, Stamford Custodian bank and main paying agent UBS (Luxembourg) S.A., 33A, avenue J.F. Kennedy, L-1855 Luxembourg Distributor UBS AG, Basel and Zurich Administrative agent UBS Fund Services (Luxembourg) S.A., 33A, avenue J.F. Kennedy, L-1855 Luxembourg Auditor of the Company and the Management Company ERNST & YOUNG S.A., 7, rue Gabriel Lippmann, Parc d Activité Syrdall 2, L-5365 Munsbach * formerly EUR Bonds (EUR) 3

6 Sale in Switzerland Representative UBS Fund Management (Switzerland) AG, Brunngässlein 12, CH-4002 Basel Paying agents UBS AG, Aeschenvorstadt 1, CH-4002 Basel UBS AG, Bahnhofstrasse 45, CH-8098 Zurich and its offices in Switzerland The sales prospectus, the KIID, the articles of association of the Company, the annual and semi-annual reports as well as the portfolio movements of the Company mentioned in this publication are available free of charge from UBS AG, P.O. Box, CH-4002 Basel and from UBS Fund Management (Switzerland) AG, P.O. Box, CH-4002 Basel. Sale in Germany Sales agency and information agent UBS Deutschland AG, Bockenheimer Landstr. 2-4, D Frankfurt am Main The following subfund has not been authorized for public distribution in Germany. Shares of this subfund may not be distributed to investor in Germany: Commodity Strategy (USD) The sales prospectus, the KIID, the articles of association of the Company, the annual and semi-annual reports as well as the portfolio movements of the Company mentioned in this publication are available free of charge from UBS Deutschland AG, Bockenheimer Landstr. 2-4, D Frankfurt am Main. Sale in Liechtenstein Paying agent Liechtensteinische Landesbank AG, Städtle 44, FL-9490 Vaduz Sale in Hong Kong Shares of the following subfunds may not be distributed in Hong Kong: All-Rounder (EUR) Asian Equities (USD) Asian Global Strategy Balanced (USD) Commodity Strategy (USD) Dynamic Alpha (USD) Emerging Markets Allocation (USD) EUR Bond Enhanced (EUR)* European Core Equities (EUR) Global Allocation (CHF) Global Allocation (EUR) Global Allocation (USD) Global Allocation Focus Europe (EUR) Global Alpha Opportunities (EUR) Global Equities (USD) Global Real Estate Securities (USD) Multi Asset Income (USD) Smart Allocator (USD) * formerly EUR Bonds (EUR) Sale in Austria, in Belgium, in Chile, in Denmark, in Finland, in France, in Greece, in Hungary, in Italy, in Japan, in Malta, in the Netherlands, in Norway, in Peru, in Portugal, in Singapore, in South Korea, in Spain, in Sweden, in Taiwan and in the United Kingdom Shares of this Company may be sold in these countries. The sales prospectus, the KIID, the articles of association of the Company, the annual and semi-annual reports as well as the portfolio movements of the Company mentioned in this publication are available free of charge at the sales agencies and at the registered office of the Company. 4

7 Features of the Company (hereinafter called the Company ) was incorporated on 9 August 2002 as an open-end investment fund in the legal form of a Société d Investissement à Capital Variable (SICAV) in accordance with Part I of the Luxembourg law relating to undertakings for collective investment enacted on 30 March 1988 and amended to comply with the requirements of the Luxembourg law of 20 December 2002 in February 2004, and the amended Luxembourg law of 2010 since 1 July Effective 16 May 2011, the Company has appointed UBS Fund Management (Luxembourg) S.A. as its Management Company. The Articles of Association were published in the Mémorial, Recueil des Sociétés et Associations (hereinafter called Mémorial ) on 23 August 2002, and deposited at the Commercial and Company Register of the District Court in Luxembourg for inspection. The consolidated version of the articles of incorporation is held by the Commercial and Company Register of the District Court in Luxembourg for inspection. Any amendments are published by way of a notice of deposit in the Mémorial, in a Luxembourg daily newspaper and, if necessary, in the official publications of the individual distribution countries. Amendments become legally binding in respect of all shareholders subsequent to their approval by the general meeting of shareholders. The Company offers investors various subfunds ( Umbrella Structure ) which invest in accordance with the investment policy described in the sales prospectus. The sales prospectus contains specific details on each subfund and will be updated each time a new subfund or additional share class is issued. As at 30 September 2014, the following subfunds are active: Currency of account of the subfund All-Rounder (EUR) EUR Asian Equities (USD) USD Asian Global Strategy Balanced (USD) USD Commodity Strategy (USD) USD Dynamic Alpha (USD) USD Emerging Markets Allocation (USD) USD Emerging Markets Income (USD) USD EUR Bond Enhanced (EUR)* EUR European Core Equities (EUR) EUR European Growth and Income (EUR) EUR Global Allocation (CHF) CHF Global Allocation (EUR) EUR Global Allocation (USD) USD Global Allocation Focus Europe (EUR) EUR Global Alpha Opportunities (EUR) EUR Global Equities (USD) USD Global Real Estate Securities (USD) USD Multi Asset Income (USD) USD Smart Allocator (USD) USD * formerly EUR Bonds (EUR) Various share classes can be offered for the subfunds. Information on which share classes are available for which subfund can be obtained from the Administrative Agent or at Shares are issued as registered shares only. P Shares in classes with P in their name are available to all investors. Their smallest tradable unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RMB 1 000, RUB 3 500, SEK 700, SGD 100 or USD 100. N Shares in classes with N in their name (shares with restrictions on the distribution partners or countries) are issued exclusively through Distributors domiciled in Spain, Italy, Portugal and Germany authorised by UBS AG, as well as, where appropriate, through Distributors in further distribution countries, provided this has been decided by the Company. Their smallest tradable unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RMB 1 000, RUB 3 500, SEK 700, SGD 100 or USD 100. K-1 Shares in classes with K-1 in their name are available to all investors. Their smallest tradable unit is 0.1. Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 5 million, CAD 5 million, CHF 5 million, CZK 100 million, EUR 3 million, GBP 2.5 million, HKD 40 million, JPY 500 million, PLN 25 million, RMB 35 million, RUB 175 million, SEK 35 million, SGD 5 million or USD 5 million. F Shares in classes with F in their name are exclusively available to UBS AG or one of its affiliated companies. The shares may only be acquired by UBS AG or one of its affiliated companies for their own account or as part of discretionary asset management mandates concluded with UBS AG or one of its affiliated companies. In the latter case, the shares will be returned to the Company at the prevailing net asset value at no charge 5

8 upon termination of the mandate. The shares smallest tradable unit is Unless the Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RMB 1 000, RUB 3 500, SEK 700, SGD 100 or USD 100. Q Shares in classes with Q in their name are available: (i) for distribution in an eligible country as defined by List A ; or (ii) to investors domiciled in other countries, if they are professionals of the financial sector and a written agreement exists with UBS AG; and who make the following investments in their own name and: (a) on their own behalf; (b) on behalf of their clients within a discretionary mandate or an asset management agreement in return for payment; or (c) on behalf of a collective investment managed by a professional of the financial sector, in cases (b) and (c), said professional has been duly authorised by the supervisory authority to which he/she is subject to carry out such transactions, and is domiciled in an eligible country as defined by List B or is operating in their own name and on behalf of another professional of the financial sector who has been authorised in writing by UBS AG and is domiciled in one of the countries covered by List B. Admission of investors in further distribution countries (changes to lists A and B) shall be decided by the Board of Directors at its sole discretion and are disclosed on Their smallest tradable unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RMB 1 000, RUB 3 500, SEK 700, SGD 100 or USD 100. I-A1 Shares in classes with I-A1 in their name are exclusively reserved for institutional investors within the meaning of Article 174 (2) (c) of the Law of Their smallest tradable unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RMB 1 000, RUB 3 500, SEK 700, SGD 100 or USD 100. I-A2 Shares with classes with I-A2 in their name are exclusively reserved for institutional investors within the meaning of Article 174 (2) (c) of the Law of Their smallest tradable unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RUB 3 500, SEK 700, SGD 100 or USD 100. The minimum subscription amount for these shares amounts to AUD 10 million, CAD 10 million, CHF 10 million, CZK 200 million, EUR 5 million, GBP 5 million, HKD 80 million, JPY 1 billion, PLN 50 million, RMB 70 million, RUB 350 million, SEK 70 million, SGD 10 million or USD 10 million. Upon subscription (i) a minimum subscription must be made pursuant to the list above or (ii) be based on a written agreement of the institutional investor with UBS AG or with one of it authorised counterparties for total assets managed by UBS AG or its portfolio in collective capital investments of UBS must be more than 30 million CHF (or the corresponding currency equivalent). I-A3 Shares with classes with I-A3 in their name are exclusively reserved for institutional investors within the meaning of Article 174 (2) (c) of the Law of Their smallest tradable unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RUB 3 500, SEK 700, SGD 100 or USD 100. The minimum subscription amount for these shares amounts to AUD 30 million, CAD 30 million, CHF 30 million, CZK 600 million, EUR 20 million, GBP 20 million, HKD 240 million, JPY 3 billion, PLN 150 million, RMB 210 million, RUB 1.05 billion, SEK 210 million, SGD 30 million or USD 30 million. Upon subscription (i) a minimum subscription must be made pursuant to the list above or (ii) be based on a written agreement of the institutional investor with UBS AG or with one of it authorised counterparties for total assets managed by UBS AG or its portfolio in collective capital investments of UBS must be more than 100 million CHF (or the corresponding currency equivalent). I-B Shares in classes with I-B in their name are exclusively reserved for institutional investors within the meaning of Article 174 (2) (c) of the Law of 2010 who have signed a written agreement on investing in one more subfunds of this umbrella fund with UBS AG or one of its authorised counterparties. A fee covering the costs for Fund administration (comprising the costs of the Company, the administration and the Custodian Bank) is charged directly to the subfund. The costs for asset management and distribution are charged to investors under the aforementioned agreements. Their smallest tradable 6

9 unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RMB 1 000, RUB 3 500, SEK 700, SGD 100 or USD 100. I-X Shares in classes with I-X in their name are exclusively reserved for institutional investors within the meaning of Article 174 (2) (c) of the Law of 2010 who have signed a written agreement on investing in one of more subfunds of this umbrella fund with UBS AG or one of its authorised counterparties. The costs for asset management, Fund administration (comprising the costs of the Company, the administration and the Custodian Bank) and distribution are charged to investors under the aforementioned agreements. Their smallest tradable unit is Unless the Management Company decides otherwise, the initial issue price of these shares amounts to AUD 100, CAD 100, CHF 100, CZK 2 000, EUR 100, GBP 100, HKD 1 000, JPY , PLN 500, RMB 1 000, RUB 3 500, SEK 700, SGD 100 or USD 100. U-X Shares in classes with U-X in their name are exclusively reserved for institutional investors within the meaning of Article 174 (2) (c) of the Law of 2010 who have signed a written agreement on investing in one of more subfunds of this umbrella fund with UBS AG or one of its authorised counterparties. The costs for asset management, Fund administration (comprising the costs of the Company, the administration and the Custodian Bank) and distribution are charged to investors under the aforementioned agreements. This share class is exclusively geared towards financial products (i.e. fund of funds or other pooled structures in accordance with different legislation). Their smallest tradable unit is Unless the Company decides otherwise, the initial issue price of these shares amounts to AUD , CAD , CHF , CZK , EUR , GBP , HKD , JPY 1 million, PLN , RMB , RUB , SEK , SGD or USD Additional characteristics: Currency The share classes may be denominated in AUD, CAD, CHF, CZK, EUR, GBP, HKD, JPY, PLN, RMB, RUB, SEK, SGD or USD. For share classes issued in the currency of account of the respective subfund, the respective currency will not be included in the class name. The currency of account features in the name of the relevant subfund. acc For share classes with -acc in their name, income is not distributed unless the Company decides otherwise. dist For share classes with -dist in their name, income is distributed unless the Company decides otherwise. qdist Share class with -qdist in their name may make quarterly distributions, excluding fees and expenses. They may also make distributions out of capital and realised capital gains. Distributions out of capital shall result in the reduction of an investor s original capital invested in the subfund. Also, any distributions from the income and/ or involving the capital and/or capital gains result in an immediate reduction of the net asset value per share of the subfund. Investors in certain countries may be subject to higher tax rates on distributed capital than on any capital gains from the sale of Fund units. Some investors may therefore choose to invest in the accumulating (-acc) instead of the distributing (-dist, -qdist) share classes. Investors may be taxed at a later point in time on income and capital arising on accumulating (-acc) share classes compared to distributing (-dist) share classes. Investors should seek their own tax advice. mdist Shares in classes with -mdist in their name may make monthly distributions excluding fees and expenses. They may also make distributions out of capital and realised capital gains. Distributions out of capital shall result in the reduction of an investor s original capital invested in the subfund. Also, any distributions from the income and/ or involving the capital and/or capital gains result in an immediate reduction of the net asset value per share of the subfund. Investors in certain countries may be subject to higher tax rates on distributed capital than on any capital gains from the sale of fund units. Some investors may therefore choose to invest in the accumulating (-acc) instead of the distributing (- dist, -mdist) share classes. Investors may be taxed at a later point in time on income and capital arising on accumulating (-acc) share classes compared to distributing (-dist) share classes. Investors should seek their own tax advice. UKdist For share classes with UKdist in their name, the Board of Directors intends to distribute an amount that corresponds to 100% of reportable income within the meaning of the UK reporting fund rules when the share classes are subject to the provisions for reporting funds. The Company does not intend to prepare tax reporting in other countries in respect of these share classes which 7

10 are intended for investors who are subject to UK taxation on their investment in the share class. 2%, 4%, 6%, 8% Shares in classes with 2% / 4% / 6% / 8% in their name may make monthly, quarterly or annual distributions at the respective level gross of fees and expenses. The distribution level reflects an annual figure. These share classes are suitable for investors who wish more stable distributions, unrelated to past or expected returns or income. Distributions thus can also be made out of capital and realised capital gains. Distributions out of capital result in the reduction of an investor s original capital invested in the subfund. Also, any distributions from the income and/or involving the capital and/or capital gains result in an immediate reduction of the net asset value per share of the subfund. Investors in some jurisdictions may incur a higher rate of tax on distributed capital than on any capital gains which are realised on disposal of fund units. Some investors may therefore choose to invest in the accumulating (-acc) instead of the distributing (-dist, -qdist, -mdist) share classes. Investors may be taxed at a later point in time on income and capital arising on accumulating (-acc) share classes compared to distributing (-dist, -qdist, -mdist) share classes. Investors should seek their own tax advice. hedged For share classes whose reference currencies are not identical to the currency of account of the subfund, and which have hedged in their name ( share classes in foreign currencies ), the fluctuation risk of the reference currency price for those share classes is hedged against the currency of account of the subfund. Provision is made for the amount of the hedging to be in principle between 90% and 110% of the total net assets of the share class in foreign currency. Changes in the market value of the portfolio, as well as in subscriptions and redemptions of share classes in foreign currencies, can result in the hedging temporarily surpassing the aforementioned range. The hedging described has no effect on possible currency risks resulting from investments denominated in a currency other than the subfund s currency of account. RMB hedged Investors should note that the renminbi (ISO 4217 currency code: CNY), the official currency of the People s Republic of China (the PRC ), is traded on two markets, one in Mainland China being onshore RMB (CNY), and one outside Mainland China being offshore RMB (CNH). Shares in classes with RMB hedged in their name are shares whose net asset value is calculated in offshore RMB (CNH). Onshore RMB (CNY) is not a freely convertible currency and it is subject to foreign exchange control policies of and repatriation restrictions imposed by the PRC government. Offshore RMB (CNH), on the other hand, may be traded freely against other currencies, particularly EUR, CHF and USD. This means the exchange rate between offshore RMB (CNH) and other currencies is determined on the basis of supply and demand relating to the respective currency pair. RMB convertibility between offshore RMB (CNH) and onshore RMB (CNY) is a managed currency process subject to foreign exchange control policies and repatriation restrictions imposed by the PRC government in coordination with offshore regulatory or governmental agencies (e.g. the Hong Kong Monetary Authority). Prior to investing in RMB classes, investors should bear in mind that the requirements relating to supervisory reporting and fund accounting of offshore RMB (CNH) are not clearly regulated. Furthermore, investors should be aware that offshore RMB (CNH) and onshore RMB (CNY) have different exchange rates against other currencies. The value of offshore RMB (CNH) could potentially differ significantly from that of onshore RMB (CNY) due to a number of factors including, without limitation, foreign exchange control policies and repatriation restrictions imposed by the PRC government from time to time as well as other external market forces. Any devaluation of offshore RMB (CNH) could adversely affect the value of investors investments in the RMB classes. Investors should therefore take care when calculating their investments and the ensuing returns from offshore RMB (CNH) into their target currency. Prior to investing in RMB classes, investors should also bear in mind that the availability and tradability of RMB classes, and the conditions under which they may be available or traded, depend to a large extent on the political and regulatory developments in the PRC. Thus, no guarantee can be given that offshore RMB (CNH) or the RMB classes will be offered and/or traded in future, nor can there be any guarantee as to the conditions under which offshore RMB (CNH) and/or RMB classes may be made available or traded. In particular, since the base currency of the relevant subfunds offering the RMB classes would be in a currency other than offshore RMB (CNH), the ability of the relevant subfund to make redemption payments in offshore RMB (CNH) would be subject to the subfund s ability to convert its base currency into offshore RMB (CNH) which may be restricted by the availability of offshore RMB (CNH) or other circumstances beyond the control of the Company. 8

11 Potential investors should be aware of the risks of reinvestment, which could arise if the RMB class has to be liquidated early due to political and/or regulatory circumstances. This does not apply to the reinvestment risk due to the liquidation of a share class and/or the subfund in accordance with the section Liquidation of the Company and its subfunds; merger of subfunds of the sales prospectus. The entirety of the individual subfunds net assets forms the total net assets of the Company, which at any time correspond to the share capital of the Company and consist in fully paid-in and non-par-value shares (the shares ). At general meetings, the shareholder has the right to one vote per share held, irrespective of the difference in value of shares in the respective subfunds. Shares of a particular subfund carry the right of one vote per share held when voting at meetings affecting this subfund. Only the information contained in the sales prospectus and in one of the documents referred to therein shall be deemed to be valid. The annual and semi-annual reports are available free of charge to shareholders at the registered office of the Company and of the Custodian Bank. No subscription may be accepted on the basis of the financial reports. Subscriptions are accepted only on the basis of the current prospectus accompanied by the latest annual report and the latest semi-annual report if available. The figures stated in the report are historical and not necessarily indicative of future performance The Company is a single legal entity. With respect to the shareholders, each subfund is regarded as being separate from the others. The assets of a subfund can only be used to offset the liabilities which the subfund concerned has assumed. The Company is empowered at any time to establish new subfunds and/or to liquidate existing ones, as well as to establish different share classes with specific characteristics within these subfunds. The sales prospectus will be updated each time a new subfund or an additional share class is issued. The Company is unlimited with regard to duration and total assets. The financial year of the Company ends on 30 September. The ordinary general meeting takes place annually on 20 March at 10 O clock a.m. at the registered office of the Company. If 20 March is not a business day in Luxembourg the ordinary general meeting will take place on the next business day. Information on whether a subfund of the Company is listed on the Luxembourg Stock Exchange can be obtained from the Administrative Agent or the Luxembourg Stock Exchange website ( The issue and redemption of shares of the Company are subject to the regulations prevailing in the country concerned. 9

12 Independent auditor s report To the Shareholders of 33A, avenue J.F. Kennedy, L-1855 Luxembourg We have audited the accompanying financial statements of and of each of its subfunds, which comprise the statement of net assets and the statement of investments in securities and other net assets as of 30 September 2014 and the statement of operations and the statement of changes in net assets for the year then ended, and a summary of significant accounting policies and other explanatory notes to the financial statements. Board of Directors of the SICAV responsibility for the financial statements The Board of Directors of the SICAV is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements and for such internal control as the Board of Directors of the SICAV determines is necessary to enable the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the réviseur d entreprises agréé Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the judgement of the réviseur d entreprises agréé, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the réviseur d entreprises agréé considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors of the SICAV, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 10

13 Opinion In our opinion, the financial statements give a true and fair view of the financial position of UBS (Lux) Key Selection SICAV and of each of its subfunds as of 30 September 2014, and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements. Other matter Supplementary information included in the annual report has been reviewed in the context of our mandate but has not been subject to specific audit procedures carried out in accordance with the standards described above. Consequently, we express no opinion on such information. However, we have no observation to make concerning such information in the context of the financial statements taken as a whole. Luxembourg, 30 January 2015 ERNST & YOUNG Société Anonyme Cabinet de révision agréé N. Faber 11

14 Consolidated Statement of Net Assets EUR Assets Investments in securities, cost Investments in securities, unrealized appreciation (depreciation) Total investments in securities (Note 1) Cash at banks, deposits on demand and deposit accounts * Other liquid assets (Margins) Receivable on securities sales (Note 1) Receivable on subscriptions Interest receivable on securities Interest receivable on liquid assets Receivable on dividends Other receivables Unrealized gain (loss) on financial futures (Note 1) Unrealized gain (loss) on forward foreign exchange contracts (Note 1) Unrealized gain (loss) on swaps (Note 1) Total Assets Liabilities Bank overdraft Interest payable on bank overdraft Payable on securities purchases (Note 1) Payable on redemptions Provisions for flat fee (Note 2) Provisions for taxe d abonnement (Note 3) Total provisions Total Liabilities Net assets at the end of the financial year * As at 30 September 2014, cash amounts serves as collateral for the counterparty Deutsche Bank London for an amount of USD The notes are an integral part of the financial statements.

15 Consolidated Statement of Operations EUR Income Interest on liquid assets Interest on securities Dividends (Note 1) Interest received on swaps (Note 1) Income on securities lending (Note 15) Other income Retrocessions Total income Expenses Interest paid on swaps (Note 1) Flat fee (Note 2) Taxe d abonnement (Note 3) Cost on securities lending (Note 15) Interest on cash liquidity and bank overdraft Total expenses Net income (loss) on investments Realized gain (loss) (Note 1) Realized gain (loss) on market-priced securities without options Realized gain (loss) on options Realized gain (loss) on yield-evaluated securities and money market instruments Realized gain (loss) on financial futures Realized gain (loss) on options, futures-styled Realized gain (loss) on forward foreign exchange contracts Realized gain (loss) on swaps Realized result on subscriptions/redemptions (Note 4) Total realized gain (loss) on investments Realized gain (loss) on foreign exchange Total realized gain (loss) Net realized gain (loss) of the financial year Changes in unrealized appreciation (depreciation) (Note 1) Unrealized appreciation (depreciation) on market-priced securities without options Unrealized appreciation (depreciation) on options Unrealized appreciation (depreciation) on yield-evaluated securities and money market instruments Unrealized appreciation (depreciation) on financial futures Unrealized appreciation (depreciation) on options, futures-styled Unrealized appreciation (depreciation) on forward foreign exchange contracts Unrealized appreciation (depreciation) on swaps Total changes in unrealized appreciation (depreciation) Net increase (decrease) in net assets as a result of operations The notes are an integral part of the financial statements. 13

16 Active Defense 5 (CHF) Most important figures ISIN Net assets in CHF P-acc LU Shares outstanding Net asset value per share in CHF Issue and redemption price per share in CHF See note 1 Structure of the Securities Portfolio As all shares of Active Defense 5 (CHF) have been liquidated as at 20 December 2013, there is no securities portfolio or securities portfolio structure at the end of the reporting period. Active Defense 5 (CHF) 14 The notes are an integral part of the financial statements.

17 Statement of Operations CHF Income Interest on liquid assets Interest on securities Dividends (Note 1) Income on securities lending (Note 15) Total income Expenses Flat fee (Note 2) Taxe d abonnement (Note 3) Cost on securities lending (Note 15) Interest on cash liquidity and bank overdraft Total expenses Net income (loss) on investments Realized gain (loss) (Note 1) Realized gain (loss) on market-priced securities without options Realized gain (loss) on options Realized gain (loss) on financial futures Realized gain (loss) on forward foreign exchange contracts Realized result on subscriptions/redemptions (Note 4) Total realized gain (loss) on investments Realized gain (loss) on foreign exchange Total realized gain (loss) Net realized gain (loss) of the financial year Changes in unrealized appreciation (depreciation) (Note 1) Unrealized appreciation (depreciation) on market-priced securities without options Unrealized appreciation (depreciation) on options Unrealized appreciation (depreciation) on financial futures Unrealized appreciation (depreciation) on forward foreign exchange contracts Total changes in unrealized appreciation (depreciation) Net increase (decrease) in net assets as a result of operations Statement of Changes in Net Assets CHF Net assets at the beginning of the financial year Subscriptions Redemptions Total net subscriptions (redemptions) Net income (loss) on investments Total realized gain (loss) Total changes in unrealized appreciation (depreciation) Net increase (decrease) in net assets as a result of operations Net assets at the end of the financial year 0.00 Changes in the Number of Shares outstanding P-acc Number of shares outstanding at the beginning of the financial year Number of shares issued Number of shares redeemed Number of shares outstanding at the end of the financial year Active Defense 5 (CHF) The notes are an integral part of the financial statements. 15

18 Active Defense 5 (EUR) Most important figures ISIN Net assets in EUR P-acc LU Shares outstanding Net asset value per share in EUR Issue and redemption price per share in EUR See note 1 Structure of the Securities Portfolio As all shares of Active Defense 5 (EUR) have been liquidated as at 20 December 2013, there is no securities portfolio or securities portfolio structure at the end of the reporting period. Active Defense 5 (EUR) 16 The notes are an integral part of the financial statements.

19 Statement of Operations EUR Income Interest on liquid assets Interest on securities Income on securities lending (Note 15) Total income Expenses Flat fee (Note 2) Cost on securities lending (Note 15) Interest on cash liquidity and bank overdraft Total expenses Net income (loss) on investments Realized gain (loss) (Note 1) Realized gain (loss) on market-priced securities without options Realized gain (loss) on options Realized gain (loss) on financial futures Realized gain (loss) on forward foreign exchange contracts Realized result on subscriptions/redemptions (Note 4) Total realized gain (loss) on investments Realized gain (loss) on foreign exchange Total realized gain (loss) Net realized gain (loss) of the financial year Changes in unrealized appreciation (depreciation) (Note 1) Unrealized appreciation (depreciation) on market-priced securities without options Unrealized appreciation (depreciation) on options Unrealized appreciation (depreciation) on financial futures Unrealized appreciation (depreciation) on forward foreign exchange contracts Total changes in unrealized appreciation (depreciation) Net increase (decrease) in net assets as a result of operations Statement of Changes in Net Assets EUR Net assets at the beginning of the financial year Subscriptions Redemptions Total net subscriptions (redemptions) Net income (loss) on investments Total realized gain (loss) Total changes in unrealized appreciation (depreciation) Net increase (decrease) in net assets as a result of operations Net assets at the end of the financial year 0.00 Changes in the Number of Shares outstanding P-acc Number of shares outstanding at the beginning of the financial year Number of shares issued Number of shares redeemed Number of shares outstanding at the end of the financial year Active Defense 5 (EUR) The notes are an integral part of the financial statements. 17

20 Active Defense 5 (USD) Most important figures ISIN Net assets in USD P-acc LU Shares outstanding Net asset value per share in USD Issue and redemption price per share in USD See note 1 Structure of the Securities Portfolio As all shares of Active Defense 5 (USD) have been liquidated as at 20 December 2013, there is no securities portfolio or securities portfolio structure at the end of the reporting period. Active Defense 5 (USD) 18 The notes are an integral part of the financial statements.

21 Statement of Operations USD Income Interest on liquid assets Interest on securities Income on securities lending (Note 15) Total income Expenses Flat fee (Note 2) Taxe d abonnement (Note 3) Cost on securities lending (Note 15) Interest on cash liquidity and bank overdraft Total expenses Net income (loss) on investments Realized gain (loss) (Note 1) Realized gain (loss) on market-priced securities without options Realized gain (loss) on options Realized gain (loss) on financial futures Realized gain (loss) on forward foreign exchange contracts Realized result on subscriptions/redemptions (Note 4) Total realized gain (loss) on investments Realized gain (loss) on foreign exchange Total realized gain (loss) Net realized gain (loss) of the financial year Changes in unrealized appreciation (depreciation) (Note 1) Unrealized appreciation (depreciation) on market-priced securities without options Unrealized appreciation (depreciation) on options Unrealized appreciation (depreciation) on financial futures Unrealized appreciation (depreciation) on forward foreign exchange contracts Total changes in unrealized appreciation (depreciation) Net increase (decrease) in net assets as a result of operations Statement of Changes in Net Assets USD Net assets at the beginning of the financial year Subscriptions Redemptions Total net subscriptions (redemptions) Net income (loss) on investments Total realized gain (loss) Total changes in unrealized appreciation (depreciation) Net increase (decrease) in net assets as a result of operations Net assets at the end of the financial year 0.00 Changes in the Number of Shares outstanding P-acc Number of shares outstanding at the beginning of the financial year Number of shares issued Number of shares redeemed Number of shares outstanding at the end of the financial year Active Defense 5 (USD) The notes are an integral part of the financial statements. 19

22 All-Rounder (EUR) Most important figures ISIN Net assets in EUR N-acc 1 LU Shares outstanding Net asset value per share in EUR Issue and redemption price per share in EUR Q-acc 3 LU Shares outstanding Net asset value per share in EUR Issue and redemption price per share in EUR U-X-acc 4 LU Shares outstanding Net asset value per share in EUR Issue and redemption price per share in EUR Initial subscription: See note 1 3 Initial subscription: For the period from to the share class U-X-acc was in circulation Performance Currency 2013/ /2013 N-acc 1 EUR 3.9% - Q-acc 1 EUR 5.2% - U-X-acc 1 EUR - - Historical performance is no indicator of current or future performance. The performance data does not take account of any commissions and costs charged when subscribing and redeeming shares. The performance data were not audited. 1 The subfund has no benchmark. Report of the Portfolio Manager In the reporting year from 1 October 2013 to 30 September 2014, the last quarter of 2013 was benign towards developed equities. In 2014, they continued their good performance, despite a bump in January. Sovereign bonds performed very well, thanks to dovish central banks. EM assets benefitted from this environment until September. The USD remained range bound until early May, when it started to appreciate strongly. Overall, geopolitical crises left markets largely untroubled. Structure of the Securities Portfolio Geographical Breakdown as a % of net assets Luxembourg Total Economic Breakdown as a % of net assets Investment funds & pension foundations Total The subfund s performance was positive in the reporting year. All four sub-portfolios contributed positively, where the boom portfolio contributed most, followed by the upswing and downswing portfolio. The smallest contribution came from the recession portfolio. All-Rounder (EUR) 20 The notes are an integral part of the financial statements.