Commodities How to Leverage Opportunity

Transcription

1 Commodities How to Leverage Opportunity Investment Conference, Boston, March 2010 Peter Königbauer Senior Portfolio Manager For Broker/Dealer Use Only and Not to be Distributed to the Public

2 Agenda Commodity Market Update Investment Philosophy Strategy Profile Active Allocation Alpha Generation For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 2

3 Long-Term Outlook is Favourable for Commodities 10 Population Growth World Population (bn) Demographic aspects: World population grows at an average of 200,000 people every day Commodity Prices and Emerging Markets Index: 2005= Industrial Commodity usage worldwide GDP of Emerging Markets (3 years average) annual % Strong demand from BRIC-Countries: Emerging markets inflate commodity prices Source: International Monetary Fund, 31 December 20. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 3

4 Emerging Markets China Share of Global Consumption (20) & Commodity Price Increases (Feb - Nov 20) China s growth may have driven commodity prices up, but its oil demand is still not as strong as expected. World China 28% 9% Commodity Price Increases (Feb-Nov 20) 120% 100% 80% 60% 40% 20% 0% 24% 101% 33% 86% 62% 46% Aluminium Copper Nickel Petroleum Source: International Monetary Fund, World Bank, Keybridge Research LLC For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 4

5 Inventories: Oil Without Increasing Demand, Oil Prices Will Barely Rise US Inventory: Oil 240,000 US Inventory: Heating Oil/Diesel 230, ,000 B A R R E L B A R R E L B A R R E L 210, , , , , , , , , , ,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec US Inventory: Gasoline Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 120,000 Min / Max 5 Years ( ) Inventories 20 Average 5 Years ( ) 110, ,000 90,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Pioneer Investments, Bloomberg as at 5 February 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 5

6 Inventories: Copper Rising Prices Depend on Europe and the US Inventory: Copper (World) US Industry Inventory: Copper 1,200, % 1,000, % 800, , % 0.00% 400, , % -4.00% -6.00% % Jan 00 Jan 02 Jan 04 Jan 06 Jan Jan 10 Inventories LMI (London Metal Exchange) Price US Industry Inventories US Industry Production Source: Pioneer Investments, Bloomberg as at 31 January 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 6

7 Inventories: Soybeans Inventories Remain Tight Despite Increased Production Soybean Import China US Soybean Production Million Tons % 25.00% 20.00% 15.00% 10.00% Million Metric Tons % % Dec 90 Dec 91 Dec 92 Dec 93 Dec 94 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 1500 Stock/Use Ratio US Soybeans Production Source: Pioneer Investments, Bloomberg as at 31 January 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 7

8 Agenda Commodity Market Update Investment Philosophy Strategy Profile Active Allocation Alpha Generation For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 8

9 Pioneer Funds Commodity Alpha Portfolio Overview Active, quantitatively-managed commodity Portfolio Four alpha sources enhance performance potential: Source 1: Changes in inventory levels can identify attractive opportunities Source 2: Long/Short positions efficiently exploit investment philosophy Source 3: Exposure to small commodities increases the opportunity for alpha Source 4: Active allocation between the five different strategies optimises the performance potential Broad investment universe (consisting of 31 commodities) Objective: Generate outperformance versus its reference index, Dow Jones-UBS Commodity Total Return Index (DJ-UBS) This sub-fund does not invest directly in commodities, but it gains exposure via derivatives linked to the performance of five commodity future indices and sub-indices. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 9

10 Investment Philosophy Inventory Dynamics Predict Higher Expected Returns The Inventory Theory predicts higher expected returns by selecting commodities based on The dynamics of inventories Example: Copper Price Inventories 900, , , , , , , ,000 Low inventories reduce the buffer function of inventories to absorb shocks Inventories can only be restored through the lengthy process of new production. For that reason, the higher risk premium persists for a longer period of time Prices rise , Adapted from: Gorton, G.B., Hayashi, F., Rouwenhorst, K.G. (2007) "The Fundamentals of Commodity Futures Returns". Yale ICF Working Paper No. 07, 27 June For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 10

11 Investment Philosophy Successful Commodity Selection Using Inventory Data* DJ-UBS CI TR High Inventories TR Low Inventories TR Ann. Return 7.% 6.72% 11.19% Volatility 11.83% 11.56% 10.76% Sharpe Ratio DJ-UBS CI TR High Inventories TR Low Inventories TR Commodities with low inventories Commodities with high inventories Source: Gorton, Gary B., Fumio Hayashi, and K. Geert Rouwenhorst (2006) *A normal inventory level for each commodity is calculated using a Hodrick-Prescott filter on historical inventory data. The Hodrick-Prescott filter is an algorithm, used widely in economics, for extracting a smooth, but possibly non-linear, trend from an economic time series. High inventory is defined as when inventories are above normal, while low inventory is defined as the opposite case. High inventory commodities are selected on a monthly basis and included in the High Inventory index, while low inventory commodities are included in the Low Inventory index. Inventories reflect any revisions which may have been released after initial publication. Source: Inventory data compiled by UBS-FP based on public and private sources. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 11

12 Investment Philosophy: Futures Basis Reflects Inventory Levels The Basis is High when Inventories are Low Average Futures Basis Relative to Normalised Inventories* 20% Low Inventory High Inventory Basis Relative to Average 10% 0% Aluminium Copper Live Cattle Soybean Oil Nickel Zinc -10% Cocoa Heating Crude Oil Oil Soybeans Unleaded Gas Wheat -20% Lean Hogs Natural Gas Source: Gorton, Gary B., Fumio Hayashi, and K. Geert Rouwenhorst (2006) *A normal inventory level for each commodity is calculated using a Hodrick-Prescott filter on historical inventory data. The Hodrick-Prescott filter is an algorithm, used widely in economics, for extracting a smooth, but possibly non-linear, trend from an economic time series. High inventory is defined as when inventories are above normal, while low inventory is defined as the opposite case. High inventory commodities are selected on a monthly basis and included in the High Inventory index, while low inventory commodities are included in the Low Inventory index. Inventories reflect any revisions which may have been released after initial publication. Source: Inventory data compiled by UBS-FP based on public and private sources. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 12

13 Investment Philosophy: Price Performance Reflects Inventory Levels Returns are High when Inventories are Low Returns Relative to Normalised Inventories* Prior 12-Month Return Relative to Average 30% 20% 10% 0% Aluminium -10% -20% Cocoa Copper Heating Crude Oil Oil Lean Hogs Live Cattle Natural Gas Nickel Soybean Oil Soybeans Unleaded Gas Low Inventory High Inventory Wheat Zinc -30% Source: Gorton, Gary B., Fumio Hayashi, and K. Geert Rouwenhorst (2006) *A normal inventory level for each commodity is calculated using a Hodrick-Prescott filter on historical inventory data. The Hodrick-Prescott filter is an algorithm, used widely in economics, for extracting a smooth, but possibly non-linear, trend from an economic time series. High inventory is defined as when inventories are above normal, while low inventory is defined as the opposite case. High inventory commodities are selected on a monthly basis and included in the High Inventory index, while low inventory commodities are included in the Low Inventory index. Inventories reflect any revisions which may have been released after initial publication. Source: Inventory data compiled by UBS-FP based on public and private sources. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 13

14 Agenda Commodity Market Update Investment Philosophy Strategy Profile Active Allocation Alpha Generation For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 14

15 Pioneer Funds Commodity Alpha Active Weighting of up to Five Different Strategies Four strategies, taking their bearings from the Dow Jones-UBS Commodity Index Strategy 1: Basis (Long only) Strategy 2: Relative Strength (Long only) Strategy 3: Basis (Long/Short) Strategy 4; Relative Strength (Long/Short) Strategy 3 Strategy 1 Strategy 5 Strategy 2 Strategy 4 Strategy 5: Small Commodities (index-independent) The Sub-Fund gains exposure to these strategies by investing in financial derivative instruments linked to commodity futures indices or sub-indices. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 15

16 Sources of Performance: Implementing the Investment Philosophy Alpha Opportunity 1: Commodity Basis and Relative Strength Strategies Alpha Opportunity 1 Strategy 1: Basis (Long) Strategy 2: Relative Strength (Long) Strategy 3: Basis (Long/Short) Strategy 4; Relative Strength (Long/Short) Strategy 5: Small Commodities (index-independent) Long only Basis Monthly, rank the commodities in the DJ-UBS excluding Gold and Silver in order of backwardation or basis* Go long in the 8 commodities with the highest basis, with the same relative weights as in the DJ-UBS (subject to constraints) Take no position in the remaining commodities Long only Relative Strength Monthly, rank the commodities in the DJ-UBS in order of momentum as measured by the previous 12 months return** Go long the 9 commodities with the highest momentum, with the same relative weights as in the DJ-UBS (subject to constraints) Take no position in the remaining commodities * Basis is calculated for each commodity as (F1/F2-1)*365/(D2-D1), where F1 is the nearest futures contract. D1 and D2 are the number of days until expiration of the respective contracts **Momentum is calculated for each commodity using the cumulative return for the immediately preceding 12 months. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 16

17 Sources of Performance: Extending the Investment Philosophy Alpha Opportunity 2: Long/Short Strategies Alpha Opportunity 2 Strategy 1: Basis (Long only) Strategy 2: Relative Strength (Long only) Strategy 3: Basis (Long/Short) Strategy 4; Relative Strength (Long/Short) Strategy 5: Small Commodities (index-independent) Long/Short Basis Monthly, rank the commodities in the DJ-UBS excluding Gold and Silver in order of backwardation or basis* Go long in the 8 commodities with the highest basis, with the same relative weights as in the DJ-UBS (subject to constraints) Take a short position in the 8 Commodities with the lowest basis* Long/Short Relative Strength Monthly, rank the commodities in the DJ-UBS in order of momentum as measured by the previous 12 months return** Go long the 9 commodities with the highest momentum, with the same relative weights as in the DJ-UBS (subject to constraints) Take a short position in the 9 commodities with the lowest momentum *Basis is calculated for each commodity as (F1/F2-1)*365/(D2-D1), where F1 is the nearest futures contract. D1 and D2 are the number of days until expiration of the respective contracts **Momentum is calculated for each commodity using the cumulative return for the immediately preceding 12 months. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 17

18 Sources of Performance: Broadening the Investment Universe Alpha Opportunity 3: Source of Return Outside the Traditional Universe Strategy 1: Basis (Long only) Strategy 2: Relative Strength (Long only) Strategy 3: Basis (Long/Short) Strategies for Small Commodities Long only Strategy 12 commodities outside the DJ-UBS Index universe Commodities Weights Commodities Weights Crude oil 15% Tin 2% Gas oil 15% Platinum 2% Soybean meal 15% Palladium 2% Kansas wheat 15% Range cattle 10% Minneapolis wheat 2% Cocoa 10% Lead 10% Orange juice 2% Alpha Opportunity 3 Strategy 4; Relative Strength (Long/Short) Strategy 5: Small Commodities (index-independent) Sector weights: Energy 30%, Metals 16% and Agriculture 54% Using 2006 liquidity levels (open interests and turnover) to determine weightings Single commodity weight capped at max.15%, min. 2% Annual review and rebalancing For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 18

19 Agenda Commodity Market Update Investment Philosophy Strategy Profile Active Allocation Alpha Generation For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 19

20 Strategy Composition Good Historical Performance in all Strategies Back-testing of all different strategies* vs. Dow Jones-UBS Commodity Index Performance, rebased to DJ UBSCI Total Return UBS BASIS Long Total Return UBS R&S Long Total Return UBS BASIS L&S Total Return UBS RS L&S Total Return Smaller Commodities Total Return Long-only Strategies and Small Commodities have shown a longterm outperformance and generally followed market development Long/Short- Strategies have offered further Alpha and hedging in weak commodity markets Source: Pioneer Investments, *DJ-UBS strategies 29 January 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 20

21 Strategy Composition Alpha Opportunity 4: Optimise Allocation in Line with Identified Scenarios Implementing the Investment Philosophy Strategy selection and implementation Identification of different scenarios using historical data Optimisation across the scenarios based on best risk/return profile Evaluation of current scenario at monthly intervals Position limits* No strategy has a weight of more than 50% Long/Short strategies limited to a combined weight of 30% Position Limits* Basis Long 0%-50% Basis Long/Short 0%-20% Relative Strength Long 0%-50% Relative Strength Long/Short 0%-20% Small Commodities Long 5%-15% The Portfolio always combines two or more strategies, depending on the market phase *Note: these are internal guidelines and not prospectus limits and may be subject to change over time. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 21

22 Strategy Composition Alpha Opportunity 4: Optimise Allocation in Line with Identified Scenarios Active allocation between different DJ-UBS strategies DJ UBSCI Total Return UBS BASIS Long Total Return UBS R&S Long Total Return UBS BASIS L&S Total Return UBS RS L&S Total Return Smaller Commodities Total Return Commodities A L P H A Total Return Pioneer Funds Commodity Alpha Identification of different market phases based on historical data of the last 15 years Optimisation across the scenarios based on best risk/return profile Evaluation of current scenario at monthly intervals Source: DJ-UBS, Pioneer Investments. Back-testing from December 1992 to December 20. Back test return figures have been adjusted to take into account trading costs, management fees, slippage (difference between real and prices used in back test). In total back test return figures have been adjusted by 300 basis points. Simulated past performance is not a reliable indicator of future performance. Performance of Pioneer Funds Commodity Alpha, Class A EUR ND units net of fees from March 20 to December 20. Returns have been converted to US dollar. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 22

23 Agenda Commodity Market Update Investment Philosophy Strategy Profile Active Allocation Alpha Generation For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 23

24 Alpha Generation Strong Outperformance Potential Objective: Outperforming the DJ-UBS Commodity Index in different periods (figures include back-testing) 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% Pioneer Funds Commodity Alpha DJ-UBS TR Relative performance Dec 1992 Jan 2010 Portfolio Characteristics Tracking error 9.03% Volatility 13.92% Volatility Benchmark 15.19% Correlation % 1 year 3 years ann. 5 years ann. since 1992 ann. Source: DJ-UBS, Pioneer Investments as at 31 January Back test returns adjusted to trading costs, administrative fees and Slippage (Difference between real prices and prices used in back test). The back test return quote has been adapted overall to 300 bps. Simulated past performance is not a reliable indicator of future performance. Performance of Pioneer Funds Commodity Alpha, Class A EUR ND net of fees from March 20 to January Returns have been converted to USD. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 24

25 Alpha Generation Strong Outperformance Potential Cumulative Monthly Return Performance in USD: Pioneer Funds Commodity Alpha Excess returns Pioneer Funds Commodity Alpha DJ-UBS TR Index Returns rebased to % 29% 24% 19% 14% 9% 4% Excess Returns in % 45 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 10 Feb 10-1% Source: Pioneer Investments, DJ-UBS, Bloomberg (as at 25 February 2010). Performance data provided refers to Class A (USD) units only net of fees. Returns of DJ- UBS and DJ-UBS TR Index on basis of USD. The benchmark performance is adjusted to the previous day for the fund pricing adjustment. Before the fund inception date of class A in USD on 3 April 20, the performance of Pioneer Funds Commodity Alpha, Class A EUR ND net of fees have been converted to USD For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 25

26 Alpha Generation: Portfolio Performance Current Weights of Sub-Sectors 50% DJ-UBS Pioneer Funds Commodity Alpha 42.8% 40% 32.5% 30% 20% 22.1% 18.8% 19.4% 19.4% 10% 0% 7.9% 8.4% 12.4% 0.5% 10.9% 7.5% 6.4% 3.1% -1.2% -0.8% -10% Energy Petroleum Base Metals Precious Metals Grains Softs Vegetable Oil Live Stock Highest overweighting Highest underweighting COPPER 9.13% CRUDE OIL % ALUMINIUM 6.65% NATURAL GAS % GOLD 4.01% CORN -9.36% SUGAR 3.38% SOYBEANS -7.61% NICKEL 3.29% WHEAT -6.21% Source: Pioneer Investments, as at 25 Febuary 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 26

27 Active Allocation Offers Flexibility and Opportunities Sector Weightings are Adjusted According to Trends Weightings follow wave patterns. Trends are pursued. 60.0% 50.0% Energy Metals Agriculture 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% Feb. May. Aug. Nov. Feb. May. Aug. Nov. Feb. 10 March 20 Energy 5% Metals 19% Agriculture 53% December 20 Energy 8% Metals 57% Agriculture 35% Fund inception date: 21 February 20. Source: Pioneer Investments, in-house calculations (based on the following basic assumptions: target weightings for each strategy are assumed to remain unchanged throughout the entire month; transaction costs are not taken into account; figures are calculated on a same-day basis; NAV calculations for the portfolio are preformed with a one-day time delay (T-1), so performance may deviate; liquidity resulting from sizeable inflows and outflows changes the Portfolio's real performance; back-testing figures have been reduced by 25 bps per month in order to obtain a more realistic picture of expected results). As at 25 February For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 27

28 Alpha Generation All Sectors Have Contributed to Outperformance Relative Performance versus DJ-UBS Index (rebased to 100) ,00 105,50 103,00 100,50 98,00 95,50 Feb Mar Apr May Energy Metals Agriculture Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 10 Feb 10 Source: Pioneer Investments, in-house calculations (based on the following basic assumptions: target weightings for each strategy are assumed to remain unchanged throughout the entire month; transaction costs are not taken into account; figures are calculated on a same-day basis; NAV calculations for the portfolio are performed with a one-day time delay (T-1), so performance may deviate; liquidity resulting from sizeable inflows and outflows changes the Portfolio's real performance). As at 25 February 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 28

29 Pioneer Funds Commodity Alpha Important Information Unless otherwise stated all information contained in this document is from Pioneer Investments and is as at 23 February Pioneer Funds Commodity Alpha is a sub-fund (the Sub-Fund ) of Pioneer Funds (the Fund ), a fonds commun de placement with several separate sub-funds established under the laws of the Grand Duchy of Luxembourg. Past performance does not guarantee and is not indicative of future results. Unless otherwise stated, all views expressed are those of Pioneer Investments. These views are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. More recent returns may be different than those shown. Please contact your local sales representative for more current performance results. This material is not a prospectus and does not constitute an offer to buy or a solicitation to sell any units of the Fund or any services, by or to anyone in any jurisdiction in which such offer or solicitation would be unlawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. For additional information on the Fund, a free prospectus should be requested from Pioneer Global Investments Limited ( PGIL ), 1 George s Quay Plaza, George s Quay, Dublin 2, Ireland. Call Fax This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any United States person (being residents and citizens of the United States or partnerships or corporations organized under United States laws). The Fund has not been registered in the United States under the Investment Company Act of 1940 and units of the Fund are not registered in the United States under the Securities Act of This document is not intended for and no reliance can be placed on this document by retail clients, to whom the document should not be provided. The content of this document is approved by PGIL. In the UK, it is directed at professional clients and not at retail clients and it is approved for distribution by Pioneer Global Investments Limited (London Branch), 123 Buckingham Palace Road, London SW1W 9SL, authorised by the Financial Regulator in Ireland and regulated by the Financial Services Authority for the conduct of UK business. The Fund is an unregulated collective investment scheme under the UK Financial Services and Markets Act 2000 and therefore does not carry the protection provided by the UK regulatory system. Pioneer Funds Distributor, Inc., 60 State Street, Boston, MA 021 ( PFD ), a U.S.-registered broker-dealer, provides marketing services in connection with the distribution of Pioneer Investments products. PFD markets these products to financial intermediaries, both within and outside of the U.S. (in jurisdictions where permitted to do so) for sale to clients who are not United States persons. UBS, [ UBS Commodity Basis P Strategy ], [ UBS Commodity Relative Strength P Strategy ], [ UBS Commodity Small Caps P Strategy ], [ UBS Commodity Long-Short Basis P Strategy ], [ UBS Commodity Long-Short Relative Strength P Strategy ], [ UBSIBAPE ], [ UBSIRSPE ], [ UBSISCIE ], [ UBSIBLPE ] and [ UBSIRLPE ] are trademarks or service marks of UBS Securities LLC ( UBS ), and have been licensed for use for certain purposes by Pioneer Asset Management S.A. Luxemburg. Pioneer Asset Management S.A. s Pioneer Funds Commodity Alpha, based on the [ UBS Commodity Basis P Strategy ], [ UBS Commodity Relative Strength P Strategy ], [ UBS Commodity Small Caps P Strategy ], [ UBS Commodity Long-Short Basis P Strategy ] and [ UBS Commodity Long-Short Relative Strength P Strategy ], are not sponsored, endorsed, sold or promoted by UBS Securities LLC, UBS AG or any of their respective subsidiaries or affiliates, and none of UBS, UBS AG or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such products. Pioneer Investments is a trading name of the Pioneer Global Asset Management S.p.A. group of companies. Date of First Use 11 March 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 29

30 Conclusion II Positioning: High breakeven spreads in the short end of the curve, but higher implied default rate protection in the medium-long end of the curve Overweight issuers with stable cash flow characteristics and little probability of downgrade to sub-ig Underweight deeply subordinated bank debt from issuers with high state involvement or risk of nationalisation The key risks to our strategy are: Early and accelerated exit from expansive monetary policy Increased risk aversion through unexpected sovereign defaults, systemically important bank failures and related spill-over Double dip of economic growth in Europe For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 30

31 Important Information Unless otherwise stated all information contained in this document is from Pioneer Investments and is as at 29 January 2010 Past performance does not guarantee and is not indicative of future results. Unless otherwise stated, all views expressed are those of Pioneer Investments. These views are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. More recent returns may be different than those shown. Please contact your local sales representative for more current performance results. This material is not a prospectus and does not constitute an offer to buy or a solicitation to sell any units of the Pioneer Invesetments range of mutual funds or any services, by or to anyone in any jurisdiction in which such offer or solicitation would be unlawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. For additional information on the Fund, a free prospectus should be requested from Pioneer Global Investments Limited ( PGIL ), 1 George s Quay Plaza, George s Quay, Dublin 2, Ireland. Call Fax This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any United States person (being residents and citizens of the United States or partnerships or corporations organized under United States laws). The non-us Pioneer Investments mutual funds have not been registered in the United States under the Investment Company Act of 1940 and units of these funds are not registered in the United States under the Securities Act of This document is not intended for and no reliance can be placed on this document by retail clients, to whom the document should not be provided. The content of this document is approved by PGIL. In the UK, it is directed at professional clients and not at retail clients and it is approved for distribution by Pioneer Global Investments Limited (London Branch), 123 Buckingham Palace Road, London SW1W 9SL, authorised by the Financial Regulator in Ireland and regulated by the Financial Services Authority for the conduct of UK business. The Pioneer Investments funds are unregulated collective investment scheme under the UK Financial Services and Markets Act 2000 and therefore do not carry the protection provided by the UK regulatory system. Pioneer Funds Distributor, Inc., 60 State Street, Boston, MA 021 ( PFD ), a U.S.-registered broker-dealer, provides marketing services in connection with the distribution of Pioneer Investments products. PFD markets these products to financial intermediaries, both within and outside of the U.S. (in jurisdictions where permitted to do so) for sale to clients who are not United States persons. Pioneer Investments is a trading name of the Pioneer Global Asset Management S.p.A. group of companies. For Broker/Dealer use only and not for distribution to the public Date of First Use: 10 March 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 31