Pictet North America Advisors Sa

PICTET NORTH AMERICA ADVISORS SA Form ADV: Part 2A Brochure 1 JULY 2026 This Brochure provides information about the qualifications and business practices of Pictet North America Advisors SA. If you have any questions about the content of this brochure, please contact us at+41 22 307 90 00 or by email at info@pictetadvisors.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (SEC) or by any state securities authority. Additional information about Pictet North America Advisors SA also is available on the SEC’s website at www.adviserinfo.sec.gov. Although Pictet North America Advisors SA is a registered investment adviser with the SEC, registration with the SEC does not imply a certain level of skill or training.  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS Geneva Head Office Rue des Noirettes 44 1211 Geneva 73 Tel +41 22 307 90 00 Fax +41 22 307 90 01 Zurich Representative Office Bahnhofstrasse 32 8001 Zurich Tel +41 43 283 64 00 Fax +41 43 283 64 01 https://pnaa.group.pictet/ This Brochure is dated July 1st, 2026. ITEM 2: MATERIAL CHANGES There has been one material change since our last annual update on 20 March 2026. Our fees have changed as of July 1st, 2026. The most recent version of this brochure is available by con- tacting Francesco Rocciolo, CEO, at +41 22 307 90 00 or by email at info@pictetadvisors.com. 1 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS ITEM 3: TABLE OF CONTENTS Item 4: Advisory Business 3 Item 5: Fees & Compensation 4 Item 6: Performance – Based Fees and Side-By-Side Management 4 Item 7: Types of Clients 5 Item 8: Methods of Analysis, Investment Strategies and Risk of Loss 5 Item 9: Disciplinary Information 6 Item 10: Other Financial Industry Activities and Affiliations 6 Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 7 Item 12: Brokerage Practices 8 Item 13: Review of Accounts 9 Item 14: Client Referrals and Other Compensation 10 Item 15: Custody 10 Item 16: Investment Discretion 10 Item 17: Voting Client Securities 10 Item 18: Financial Information 10 Appendix 1 - Privacy Policy 11 Appendix 2 - General Risk Warnings 12 Appendix 3 - Glossary of Risks 14 2 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS ITEM 4: ADVISORY BUSINESS The Advisory Firm investment Profile. PNAA’s investment recommenda- tions under this Advisory Mandate relate (but are not limited) to stocks and other equity securities, bonds and other debt securities, money market and other cash man- agement instruments, derivatives, mutual funds, ex- change traded funds and other investments. Pictet North America Advisors SA (PNAA) is a corpora- tion organized under the laws of Switzerland, a wealth manager under the Swiss Financial Institutions Services Act (FinIA) with its head office in Geneva and maintains a representative office in Zurich. PNAA is registered as an investment adviser with the SEC and has been in business for 19 years. PNAA is also an exempt international adviser in the provinces of Québec, Ontario, Alberta, Nova Scotia and British-Columbia in Canada. These registrations and appointments do not imply a certain level of skill or training. PNAA is part of the Pictet Group. The principal owner of PNAA is Pictet & Cie Group SCA. The Types of Advisory Services We provide both discretionary investment services and non-discretionary investment services mainly to in- dividuals, trusts, estates, private funds, charitable organi- zations and small corporations or similar small business entities and mainly to U.S. persons. a) Discretionary Mandate Under the Advisory Mandate, the client will be solely re- sponsible for making all investment decisions and PNAA will not have any discretionary authority over the client’s account, will not regularly monitor positions held in a cli- ent’s securities portfolio, and will not be responsible for automatically updating any information or recommenda- tions previously provided, subject to adhering to PNAA’s fiduciary duty. In addition, PNAA is not registered as a securities broker-dealer and, therefore, does not provide brokerage services. As per the terms of the Advisory Man- date, PNAA will not monitor the client’s investment port- folio (even if held in the custody of an affiliate of PNAA) or other assets to determine whether changes should be made thereto. Lastly, PNAA will not monitor information that it previously provided or recommendations it previ- ously made to the client to determine whether such infor- mation and recommendations require updating to reflect changed market conditions or changes to the client’s in- vestment profile. See Item 8 below for more details on methods of analysis, investment strategies and risk of loss. Client Needs & Restrictions Clients who wish to receive discretionary investment ser- vices will sign a Discretionary Asset Management Man- date (‘’Discretionary Mandate’’) with PNAA. Under this Discretionary Mandate, PNAA is authorized to manage the assets on a fully discretionary basis, according to the client’s investment needs, objectives and restrictions. Un- der the Discretionary Mandate, PNAA will be solely re- sponsible for determining the account’s asset allocation and for investing the account’s assets subject to re- strictions, if any. PNAA will periodically review and up- date discretionary accounts’ asset allocation and hold- ings, such as in response to economic, political or market conditions. We tailor our advisory services to the individual needs of clients based on the information they provide to us in the client’s investment profile (as updated from time to time by the clients). Also, we generally permit discretionary clients to impose restrictions on their accounts such as on certain securities or types of securities. We generally do not permit Advisory Mandate clients to impose re- strictions on their accounts, as these accounts are man- aged on a non-discretionary basis and any restrictions de- sired by the client would be self-imposed. See Item 8 below for more details on methods of analysis, investment strategies and risk of loss. Amount of Clients’ Assets Under Management b) Non-Discretionary Mandate As of January 31, 2026, we provide advice regarding assets representing approximately USD5,302,727,305 on a discre- tionary basis and USD5,702,917,630 on a non-discretion- ary basis, for a total of approximately USD11,005,644,935. For greater clarity relating to the figures set out in Form ADV Part 1 (Item 5. F) as filed on the SEC website, we do not provide “continuous and regular supervisory services” as defined in the Form ADV Part 1 for Advisory Mandate clients (see b above for a description of this category of clients and the services provided to them). For this rea- son, we have not included the assets relating to such non- discretionary clients in ADV Part 1 but are including them here. Clients who wish to receive non-discretionary investment services will sign an Advisory Mandate (“Advisory Man- date’’) with PNAA. Under the Advisory Mandate, PNAA will provide investment advisory advice upon request and will respond within a reasonable time frame to the cli- ent’s telephone calls or e-mail requesting discussion re- garding PNAA’s views and recommendations concerning securities, currencies, securities markets and market trends, and related investment options, strategies, and opportunities, and will discuss the foregoing with clients at reasonable length. PNAA will also, but is not obligated to, contact the client from time to time (by phone, email, letter, or other means) with recommendations that we believe are appropriate for the client based on the client’s 3 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS ITEM 5: FEES & COMPENSATION currency, we will then apply the current exchange rate at the time of the client account debit. Management Fees Transaction, settlement and custodian fees, brokerage commissions, other related costs and expenses are in- curred by the clients in addition to our advisory fees. We are compensated for our services with a fee based on a percentage of assets under management (AUM). The cash in portion of the client portfolios is included in the AUM for the purpose of calculating management fees. Fees Deduction Standard fee rates are negotiable, and we reserve the right to negotiate fees with clients. a) Discretionary Fees The fee schedule for discretionary asset management ser- vices is the following: Standard Annual Fee Rates ACCOUNT VALUE IN CHF* FIXED INCOME MAN- DATES EFFECTIVE RATE OTHER MAN- DATES EFFEC- TIVE RATE Up to 5 million 0.75% 0.95% When an affiliate is elected by clients to act as their custo- dian, our management fees are debited directly by our af- filiate on a rolling three-month basis in arrears, on the first Monday following the 15th of the last month of the quarter. The value date of the debit will be the last busi- ness day of the current quarter. Management fees are cal- culated based on the average of the end-of month bal- ances of the three previous months. For example, the first quarter of each calendar year, management fees will be debited on the first Monday after March 15, will be based on the average end-of-month balances of December, Janu- ary and February and the value date will be indicated as March 31. Up to 10 million 0.65% 0.85% Up to 15 million 0.60% 0.80% Up to 25 million 0.55% 0.75% Up to 50 million 0.50% 0.70% Above 50 million As agreed Minimum quarterly fees: CHF4,000 CHF5,000 Where a non-affiliated custodian is selected by a client, we will work with that client and custodian regarding the debiting of our management fees by the custodian on a mutually agreeable basis. Our management fees will be calculated based on the value of the client’s AUM, as de- termined by the client’s custodian. Other Types of Fees and Expenses * The Swiss Franc is the reference currency used for fees calculation. If the client requests another reference currency, we will apply the current exchange rate at the time of the client account debit. For cash management dedicated accounts, the fee is a flat 0.22%. Clients incur additional charges such as stamp duties, market fees and taxes. Mutual funds and exchange traded funds also charge internal management and administra- tion fees, which are disclosed in each fund’s prospectus and are not included in our management fee. See Item 12 below for more details on brokerage practices. PNAA does not reduce its management fees to offset any of the above fees, costs or expenses. Discretionary management fees include brokerage com- missions and transaction fees. Custodian fees, other re- lated costs and expenses are incurred by the clients in ad- dition to our management fees. No Other Compensation b) Non-discretionary (Advisory) Fees The fee schedule for non-discretionary (Advisory) services is the following: Standard Annual Fee Rates EFFECTIVE RATE ACCOUNT VALUE IN CHF* Up to 5 million 0.40% Up to 10 million 0.35% PNAA and its employees do not accept compensation for the sale of securities or other investment products. PNAA does not charge clients any transaction-based fees. In ad- dition, PNAA and its affiliates do not charge clients rout- ings fees when transmitting orders to third party brokers for execution. PNAA is not registered as a securities bro- ker-dealer and, therefore, does not provide brokerage ser- vices. See Item 14 below for more details on client refer- rals and other compensation. Up to 15 million 0.30% Up to 25 million 0.275% Up to 50 million 0.25% Above 50 million As agreed ITEM 6: PERFORMANCE – BASED FEES AND SIDE-BY-SIDE MANAGEMENT Minimum quarterly fees: CHF2,000 We do not charge performance-based fees. *Swiss Franc is the reference currency used for fees calculation. If the client has requested another reference 4 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS ITEM 7: TYPES OF CLIENTS options, precious metals, derivatives and alternative in- vestments (including hedge funds and private equity ve- hicles). Key Investment Strategies & Material Risks a) Discretionary Mandate Depending on the investor profiles, we offer discretionary clients various strategies including, but not limited to, fixed income, conservative, moderate growth, growth, cash & gold, US, Swiss and international equities. As noted in Item 4 above, we advise mainly individuals, trusts, estates, private funds, charitable organizations and small corporations or similar small business entities that are mainly US persons. Although there is no minimal dol- lar value for establishing a discretionary or non-discre- tionary asset management account with us, we believe that a minimum of USD5,000,000 typically allows for an adequate diversification of the clients’ portfolio. We enter into agreements with clients who have different account sizes and sometimes accept smaller accounts at our dis- cretion. ITEM 8: METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS These strategies involve financial instruments with differ- ent risk levels from lower risk (e.g. cash and certain fixed income securities) to higher risk (e.g. equities in emerging countries). For example, the Discretionary Mandates of- fer: • low risk strategies including, but not limited to, en- Methods of Analysis hanced fixed income investments; a) Discretionary Mandates • balanced risk strategies investing mainly in fixed in- come instruments and equities. The level of risk for such strategies ranges from medium risk where the eq- uities level is lower than the fixed income level, to higher risk where the equities’ level is higher than the fixed income level; • medium risk strategies including but not limited to 100% equities in either global, US or specific markets, cash management or precious metals, and • high risk strategies including, but not limited to, strat- egies where the equities level is significantly higher than the fixed income level. Our Discretionary Mandates can opportunistically also include a portion of alternative investments such as hedge funds and/or precious metals to seek diversifica- tion of financial instruments and markets (including emerging countries). For our discretionary clients, we generally focus on allo- cating investments among various asset classes, following a top-down investment approach, with the asset alloca- tion decision being the biggest source of alpha. We seek international diversification in an effort to enhance port- folio return while diversifying risks. Our securities analy- sis methods include, but are not limited to, fundamental, quantitative and technical research. We will also use hedging strategies to alter the equity and/or currency ex- posure of discretionary mandate portfolios intended to protect the clients’ assets against market events likely to have a negative impact on performance. Our clients’ dis- cretionary managed portfolios include various instru- ments including, but not limited to, equity securities, corporate debt securities, commercial papers, certificates of deposit, municipal and governmental securities, mu- tual and exchange traded fund shares, precious metals, derivatives and alternative investments such as funds of hedge funds. All positions can be invested directly or indirectly through funds (including affiliated funds). b) Other Material Risks Associated with Discretionary & Advisory Mandates Our conservative investment style is typically focused pri- marily on long-term purchases. We also generally focus on liquid investments, investment grade fixed income in- struments and generally well-known funds. In addition, we typically avoid micro cap securities, certain jurisdic- tions with higher instability risk, leverage and derivatives for speculative purposes. Investing in financial instruments including securities in- volves a risk of loss that clients should be prepared to bear. Other material risks relating to investments include, but are not limited to: b) Advisory Mandates Market Risk – the market price of securities can go up or down, sometimes rapidly or unpredictably, and can lead clients to lose up to their whole investment. Market risk exists in all types of investments. Liquidity Risk – a particular security or other instru- ments can become difficult to trade. An illiquid asset re- duces the returns because the investor is not able to sell For our clients with advisory mandates, we provide a trade by-trade basis advice, tailored to each client de- pending on individual needs and profile. We provide ad- vice on various instruments including, but not limited to, equity securities, warrants, corporate debt securities, commercial papers, certificates of deposit, mutual and ex- change-traded fund shares, governmental securities, 5 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS the assets at the time desired for an acceptable price or is not able to sell the assets at all. that are material to a client’s evaluation of our advisory business or the integrity of our management. At this time, we have no information to report that is applicable to this item. Credit/Counterparty Risk – the possibility that the is- suer or guarantor of a fixed income security, a bank or the counterparty of a derivatives contract will default on its obligation to pay interest and/or principal, which could cause an investor to lose money. ITEM 10: OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS Other Registrations & Material Conflicts High Yield Risk – lower-quality debt securities as rated by the major credit rating agencies (those of less than in- vestment grade quality, commonly known as “high yield bonds” or “junk bonds”) are riskier, speculative and in- volve greater risk of default. In addition to PNAA, certain of its affiliates are registered with the SEC, and PNAA has certain business dealings or shares premises with others of its affiliates, which have various registrations with regulators outside the US. Interest Rate Risk – debt securities fluctuate in value as interest rates change. The general rule is that if interest rates rise, the market prices of debt securities will usually decrease and vice versa. Commodities Risk – commodities prices can be volatile and fluctuate significantly in short periods of time; with the exception of precious metals, we do not invest di- rectly in commodities. Pictet Asset Management SA (PAM SA), an affiliate, pro- vides PNAA with portfolio models for a thematic invest- ment strategy which PNAA uses to manage separately managed accounts in the Discretionary Mandate pro- gram. In addition, PAM SA offers products such as a the- matic ETF that PNAA can invest in on behalf of its clients with Discretionary Mandates. PNAA may also invest, on behalf of its clients with Dis- cretionary Mandates, funds managed by its affiliate, Pic- tet Alternative Advisors SA (PAA SA), an alternative asset manager exempt from SEC registration. PNAA is aware that this creates a conflict of interests and mitigates the risk by not charging clients any fees for the portion of the assets managed by their affiliates. Foreign/Emerging Markets – foreign securities involve the risk of loss due to political, economic, regulatory, and operational uncertainties, currency fluctuations, and gen- erally higher credit risks for foreign issuers. Clients should be aware that all these risks are heightened in emerging markets more specifically. Investing in foreign or emerging markets is generally intended only for clients who are able to bear and assume the increased risk that they represent. Material Relationships or Arrangements with Affiliated Entities a) PNAA and Banque Pictet & Cie SA Currency Risk – form of risk that generally arises from the change in price of one currency against another. Whenever clients have assets or business operations across national borders, they face currency risk. Currency risks are not always hedged. We strive to mitigate the above risks by monitoring, among others, markets, economic conditions, industry concerns and changes to general outlooks on corporate earnings, regulatory developments, monetary policies by central banks, changes to interest or currency rates or ad- verse investor sentiment in general. Different financial instruments involve different levels of exposure to risk and may be inappropriate for cer- tain investors depending on their circumstances and risk appetite. Please consult the Appendix 2 to this brochure enti- tled “General Risk Warnings” for additional risk infor- mation per financial instrument type. Pursuant to a service level agreement supplemented by a brokerage agreement (Order Handling SLA), the Trading & Sales Division (“PTS”) at Banque Pictet & Cie SA (“BPSA”) acts as broker-dealer for our clients’ transactions as further described under Item 12 below. Our clients’ transactions are executed by PTS or transmitted to third- party broker dealers (including related brokers) for execu- tion. As noted in Item 5 above, PTS does not charge cli- ents routing fees when transmitting orders to third party brokers for execution. As further explained under Item 12 below, our clients’ orders are not aggregated with Pictet clients’ orders. PTS acts, from time to time, as principal by being the counterparty for certain types of client trans- actions such as Forex (option, spot, swap, forward) and precious metal (gold, silver, platinum & palladium) as well as uses its Eurex membership to place derivatives on the local market for clients. ITEM 9: DISCIPLINARY INFORMATION While PNAA and BPSA do not share staff, the Chairman of PNAA’s Board of Directors has executive functions at BPSA. Form ADV Part 2A requires a registered investment ad- viser like PNAA to disclose legal or disciplinary events 6 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS C. Gifts and entertainment rules D. Protecting the confidentiality of client information E. Dealing with personal conflicts of interest of Super- vised Persons In addition to the above, we have other arrangements with BPSA and Bank Pictet & Cie (Europe) AG (“BPAG”) regarding various corporate support services, all of which are generally unrelated to the investment advisory ser- vices we provide to our clients. F. Respecting PNAA corporate confidential information b) Clients and affiliates or other entities of the Pictet Group Clients have the option to enter directly into the separate non-investment advisory related arrangements described below with affiliates or other entities of the Pictet Group. This creates a conflict of interests. PNAA mitigates the risk by not being a party to these arrangements and does not receive compensation in relation to those arrange- ments, but has a general indirect incentive, being part of the Pictet Group, to refer business to its affiliated enti- ties. i) Custody Services Among other things, the Code also includes policies and procedures relating to the personal investment activities of our Access Persons, including transactions involving securities that PNAA has recommended to its clients and that are held by its clients. Depending upon a person’s function, duties and obligations, the Code places some re- strictions, requires pre-clearance and/or reporting of cer- tain personal securities transactions, and imposes timing and other restrictions on transactions, outright prohibi- tions and compliance certification. The Code also re- quires the maintenance and review of certain records as well as periodic meetings to familiarize persons subject to the Code with their responsibilities under it. PNAA’s clients who select BPSA or BPAG to provide cus- todial services for their assets, will enter into a separate custodial arrangement directly with them. BPSA and BPAG also provide other non-investment related services to our clients, including clearing, matching and settle- ment of trades into client accounts, valuation of assets and provision of statements, pursuant to separate agree- ments between each client and them. See Item 15 for more information. We owe a fiduciary duty to our clients and a duty to act in the best interests of our clients. This duty generally re- quires that the interests of clients be placed above the in- terests of PNAA, its employees and all Supervised Persons whenever a conflict is present. In addition, we must treat all clients equitably. Therefore, we expect that all of our Supervised Persons will observe the highest standards of honesty, integrity and professionalism as noted above. More specifically, we always expect that, our Supervised Persons will: ii) Brokerage Services A. Comply with all relevant laws and regulations. B. Place the interests of our clients first. C. Conduct all personal securities transactions in compli- ance with the Code and avoid any actual or potential conflict of interest, or any abuse of their position of trust and responsibility. Clients select the broker of their choice. In this context, we propose Pictet Overseas Inc. (“POI”), an entity of the Pictet Group, to our Clients for brokerage trading ser- vices. If Clients select POI, they will then enter into a sep- arate brokerage agreement directly with POI. For greater clarity, PNAA is not a party to this separate brokerage agreement. Under such a brokerage arrangement, clients will place trade orders directly with POI themselves. D. Hold all client information, including securities hold- ings and financial information in confidence. E. Maintain independence in the decision-making pro- cess on behalf of clients. ITEM 11: CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING Code of Ethics If a person subject to the Code fails to comply with it, such person can be subject to sanctions, which include, but are not limited to, warnings, disgorgement of profits, restrictions on future personal trading, and in severe cases the possibility of dismissal. Clients and prospective clients can receive a copy of the Code by contacting us at the address or telephone num- ber listed on the first page of this brochure. We strive to adhere to certain standards of conduct based on principles of professionalism, integrity, honesty and trust, and have adopted a Code of Ethics (“Code”), under SEC Rule 204A–1, to help us meet these standards and prevent conflicts of interest. All our Supervised Persons must comply with the Code which covers the following key areas: A. Prohibition against insider trading B. Staff personal account dealing rules 7 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS Participation or Interests in Clients Transactions and Personal Trading As noted in Items 5 and 10 above, however, we do not ex- ecute our clients’ transactions ourselves. BPSA and POI are acting as broker-dealer for our clients’ transactions as follows: • PTS acts as an introducing broker-dealer by transmit- ting the received orders from us to third-party brokers including its related entities such as POI (SEC/FINRA broker) for execution or selection of the appropriate counterparty at its discretion. • PTS acts as executing broker itself or acts as the coun- terparty for transactions at its discretion; and • POI acts as executing broker itself. PTS does not charge any commission when acting on an agency basis for all trades placed in the Swiss market nor for trades placed on other markets. PTS doesn’t charge any fees when it directs the trade to another party (i.e., a third-party broker) as it is only acting as an intermediary in the transaction. We recommend to our clients that they buy or sell inter- ests in the same investment products in which our em- ployees (including their connected persons) or affiliates have from time to time some financial interest, including ownership. Further, we occasionally recommend to our client’s investments in one or more investment vehicles, including mutual funds and other pooled investment ve- hicles, in which we, our affiliates or other related persons have a financial interest as investment manager, general partner, trustee, or co-investor. However, any such rec- ommendations would be based on the best interest of the relevant client(s). Further, we do not receive any compen- sation as a result of these recommendations. When a por- tion of a client’s assets are invested in a product managed by us or an affiliate, PNAA either pays the affiliate di- rectly or excludes those assets from its basis for its advi- sory fee calculation. Lastly, personal transactions and holdings of our employees are subject to the Code and re- lated controls described above. We do not currently enter into brokerage arrangements with non-affiliated brokers and do not select the specific brokers or counterparties to be used for a client transac- tion. Although we do not hold proprietary positions, our em- ployees or some of our affiliates have the right to own, buy or sell for themselves (proprietary account of our af- filiates where applicable) the same securities that they or we have recommended to clients. The risks associated with personal trading is that individuals will benefit or seek to benefit personally with respect to a personal secu- rity holding from client transactions in the same or a sim- ilar security. However, our employees (and other access persons where applicable) are subject to the Code and re- lated controls described above. In addition, there are cer- tain information barriers in place between us and our af- filiates, including separate staff. Pursuant to the Order Handling SLA discussed under Item 10 above, PTS maintains an approved list of brokers. PTS is responsible for applying on a trade by-trade basis its best execution policy. PTS’ best execution policies pro- vide that in selecting brokers, the determinative factor is not only the lowest possible commission cost, but also whether the transaction represents the best qualitative execution, taking into consideration many factors. PTS will consider, among other things, the full range of a bro- ker’s services including the value of research provided, if any, execution capabilities on international markets in- cluding block positioning, financial stability, ability to maintain confidentiality, adequate settlement/delivery capabilities, ability to obtain best price by querying mul- tiple markets and using smart routers, commission rates and responsiveness. As mentioned in Item 10 above, PTS acts, from time to time, as principal by being the counterparty for certain types of client transactions such as Forex (option, spot, swap, forward) and precious metal (gold, silver, platinum & palladium) as well as use its Eurex membership to place derivatives on the local markets for clients. Please also see Item 6 above, regarding side-by-side man- agement and related conflicts and controls. ITEM 12: BROKERAGE PRACTICES PTS acts also, from time to time, as principal by being the counterparty for certain type of transactions such as Forex (option, spot, swap, forward) and precious metal (gold, silver, platinum & palladium) as well as uses its Eu- rex membership to place derivatives on the local markets for clients. Brokers Selection Under the Order Handling SLA, BPSA also provides assis- tance to PNAA in connection with the following: a) Discretionary Mandates • Subscription and redemption of mutual funds • Participation in private equities • IPOs and new bonds issues subscription With clients under Discretionary Mandates, we have the authority and discretion to determine the securities, and the amounts of securities, to be bought or sold for clients’ accounts, subject to restrictions clients have imposed as noted in Item 4 above. PNAA has an obligation to seek “best execution” for cli- ent transactions. Best execution generally refers to the ex- ecution of portfolio transactions in such a manner that 8 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS the total proceeds in each transaction is the most favora- ble under the circumstances. The SEC defines best execu- tion as “best qualitative execution”, not merely the lowest possible execution cost. In evaluating the quality of exe- cution and selecting broker-dealers to execute client transactions, PNAA considers various factors, such as exe- cution capability, commission rate (or spread), financial responsibility and responsiveness. Research & Soft Dollars Benefits clients involved in the transaction. In case of partial exe- cution, the executed trades and related external broker’s commissions are both allocated on a pro rata basis. Should the prorated allocation lead to uneconomical or unsuitable results, or in the case of securities issued by specific lots, PNAA will, at its sole discretion, modify the allocation and document the reason for this decision. In allocating such orders, we seek fairness among our clients over time. Also, our client orders cannot be aggregated with non PNAA clients’ orders or with orders of PNAA Access Persons. Allocation of Investment Opportunities PNAA does not currently enter into third party soft-dol- lar arrangements with any related or external brokers. However, BPSA separately has such arrangements directly with its third-party brokers. From time to time, two or more accounts intend to invest in the same securities or pursue a similar strategy. In such cases, we seek to ensure that one account or group of ac- counts is not favored or preferred over another account or group of accounts. We strive to be particularly sensi- tive to this potential conflict where a particular invest- ment opportunity has limited availability, such as initial public offerings or new/subsequent issues. As noted under Item 6, we have policies and procedures designed to seek ensuring that client accounts are treated fairly and equitably over time regarding the allocation of investment opportunities. In formulating investment advice, PNAA relies on various sources of information, mainly third-party research mate- rials, corporate rating services, company press releases, annual reports, prospectuses, filings with the SEC, Bloomberg and other financial networks. On a periodic basis, our investment specialists attend conferences orga- nized by external research firms on various industries or markets. In addition, we receive and utilize research re- ports and market analysis from BPSA and its affiliates. Our personnel participate in investment committees and meetings with BPSA to discuss or gain information con- cerning investment opportunities, markets, corporate ac- tions and strategies. b) Advisory Mandates Although BPSA provides us with research and infor- mation about markets and financial instruments, BPSA does not provide advice or recommendations to our cli- ents. We formulate our own investment advice and rec- ommendations for our clients. In addition, our receipt of research and other information from BPSA is not a factor contributing to our decision to continue outsourcing the routing of orders to BPSA under the Order Handling SLA. For clients with Advisory Mandates, we deliver our non- discretionary advice. Typically, such clients open and maintain brokerage accounts with POI, an entity of the Pictet Group, to provide brokerage services on an as- needed basis. Under such brokerage arrangements, clients will directly place trades of securities with POI. For greater clarity, BPSA does not act as the broker for such orders placed directly by clients to POI. Brokerage for Client Referrals ITEM 13: REVIEW OF ACCOUNTS Periodical Review We do not receive client referrals from external brokers, dealers or financial intermediaries, and there are no such arrangements in place. See Item 14 below for more details on client referrals. Directed Brokerage After account opening approval, each client account is as- signed to one of our Client Advisers. Our Chief Invest- ment Officer and portfolio management team conduct monthly investment controlling reviews aimed at moni- toring performance statistics, compliance with invest- ment restrictions and allocation grids per Discretionary Mandate types. Lastly, the appointed Client Adviser reviews client invest- ment objectives for both Discretionary Mandates and Ad- visory Mandates on an annual basis. If a client asks to direct transactions to a specific broker or brokers for execution, we may be unable to achieve most favorable execution. For example, clients could re- ceive a less favorable price when buying or selling if they cannot participate in an aggregated trade along with other client orders executed through brokers that PTS se- lected. See below for more detail about trade aggregation. Punctual Reviews Trade Aggregation When buying and selling investments for clients, PNAA generally places multiple transactions at once for all Punctual reviews are also done by the Chief Investment Officer (and/or members of the portfolio management team) and/or the Client Adviser as deemed required. 9 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS ITEM 15: CUSTODY The Client Adviser will also perform a review in response to various factors including, but not limited to, market conditions, changes in the client’s investment profile, etc. Reports to Clients PNAA does not have direct custody of client assets. BPAG or BPSA, where acting as qualified custodian, provides quarterly (or more frequent) account statements directly to clients. Where a non-affiliated custodian is selected by a client, we will work with that client and custodian to ensure that the custodian provides directly the Reports to our clients. Clients should carefully review those reports received from their custodians. See Form ADV Part 1 Item 9, Sec- tion 9C of Schedule D, and Section 7A of Schedule D for more information relating to Pictet acting as qualified custodian. ITEM 16: INVESTMENT DISCRETION We do not ourselves issue client reports. BPSA and BPAG, when acting as custodian, issue directly to clients regular written statements on their accounts (‘’State- ments’’). Such Statements are issued at least on a quar- terly basis (or on a monthly basis at the client’s option) and include a valuation, transaction statements and a performance summary. These Statements typically de- scribe all assets held, the quantity and market price in lo- cal currency for each position and the market value of the account expressed in the client’s base currency translated at current rates of exchange, which are also shown. Cli- ents should carefully review those Statements. Where a non-affiliated custodian is selected by a client, we will work with that client and custodian regarding the nature and frequency of client statements. PNAA receives and exercises discretionary authority to manage investments on behalf of Discretionary Mandate clients. As noted in Item 4 above, some discretionary cli- ents impose limitations on this discretion with respect to certain aspects of the management of their account. ITEM 14: CLIENT REFERRALS AND OTHER COMPENSATION We typically assume and receive this discretionary au- thority through the written Discretionary Mandates, completed along with written investment Strategies form. We do not accept from non-clients an economic benefit, including sales awards, for providing investment advice or other advisory services to our clients. ITEM 17: VOTING CLIENT SECURITIES We do, from time to time, refer clients to some of the Pic- tet Group entities (or to non-affiliated entities and per- sons) for additional services such as custody. We do not receive any remuneration or fees for such referrals (but do have a general indirect incentive, being part of the Pictet Group, to refer to our affiliated entities where possible) and the Pictet Group entities do not charge clients more as a result of such referrals. Pictet Group entities also refer, from time to time, clients to us, but we do not pay or receive any remuneration or fee for such referrals. We do not charge our clients more as a result of these referrals. In addition, potential client referrals from BPSA or BPAG are not a factor contributing to our decision to retain PTS as broker under the Order Handling SLA. We have a policy to not accept proxy voting responsibil- ity for securities held in our clients’ accounts except that we may exercise investment authority for certain corpo- rate actions (including, but not limited to, take overs, div- idends in cash or shares, rights offerings, offers to re- deem, splits, reverse splits, changes in nominal value, etc) in connection with Discretionary Mandate accounts pur- suant to such client agreements. For Advisory Mandates, clients can consult with us for advice regarding corporate actions, but voting decisions are made at the discretion of such clients. All clients should make arrangements di- rectly with their custodians to vote proxies for securities or to obtain proxies or other solicitation materials di- rectly from their custodians. ITEM 18: FINANCIAL INFORMATION Form ADV 2A requires us to disclose any financial condi- tion reasonably likely to impair our ability to meet con- tractual commitments to clients. At this time, we have no information to report that is responsive to this item. Occasionally, we enter into relationships with promoters to refer prospective clients to us. They are paid a referral fee in accordance with the requirements of Rule 206(4)-1 of the Advisers Act. This fee is generally calculated based on a percentage of asset under management and is dis- closed to our client as per our related policy. This referral ee paid to promoters does not result in any additional charge to our clients. 10 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS APPENDIX 1 - PRIVACY POLICY described above, and as required or permitted by client agreement or applicable law. PNAA’s affiliates will not use any information received from PNAA to solicit you. Privacy Notice – More Information on Privacy of your In- formation We take important steps to help safeguard the infor- mation we collect about our clients. Why and How PNAA Shares Information with Non-affili- ated Third Parties PNAA does not and will not rent or sell the personal infor- mation of its clients, their representatives or authorized persons. However, PNAA shares this information with Pic- tet or with companies that PNAA hires to perform services for it. In these cases, PNAA requires these non-affiliated third parties with which PNAA shares personal information to agree to strictly limit the use of such information to the purposes for which it was provided. At PNAA, we are committed to safeguarding our clients’ personal information. This notice describes the personal information that PNAA collects regarding an individual’s current or former relationships with PNAA and how PNAA handles and protects that information. As part of PNAA’s normal business practices, PNAA distributes a Privacy No- tice annually or when significant changes are made to it. Why and How PNAA Collects Personal Information PNAA collects personal information to enable it to provide services to clients and to conduct its business. For exam- ple, PNAA collects personal information to: • Help evaluate the needs of clients and comply with regulatory obligations. • Process requests and transactions. • Provide clients with effective and efficient service. Sharing Information with Providers of Financial Instru- ments Some providers of certain financial instruments (e.g., issu- ers of structured products, investment companies, or lim- ited partnerships), whether affiliates or not, require PNAA or its affiliates to disclose personal information including a tax identification number (“TIN”) or other identifiers. Where client objectives permit and applicable law allows, we require such providers to agree to strictly limit their use of the information only to the purpose for which it was provided. PNAA collects information from a variety of sources, in- cluding: • Account opening documentation and other forms submitted to PNAA or its affiliates in the Pictet Group, which provide information such as the name, address, email address, telephone numbers, date of birth, So- cial Insurance or other identification number, occupa- tion, financial goals, assets, income and source of funds of our clients or their representatives. • Our clients’ transactions or communications with PNAA and PNAA’s affiliates in the Pictet Group. In particular, PNAA or its affiliates are required to share in- formation with certain fund managers in accordance with Rule 22c-2 under the Investment Company Act of 1940. This rule is intended to help address abuses associated with short-term trading of fund shares. The rule requires an open-end fund and its intermediaries to provide the fund’s management the ability to identify investors whose trading violates fund restrictions on short-term trading. PNAA or its affiliates are required to provide all the infor- mation as set out in Rule 22c-2, amongst others name, TIN, number of shares, held and dates of transactions. Who has Access to Personal Information PNAA maintains personal information about clients, their representatives and authorized persons on PNAA’s client database. Access to this database is restricted to employ- ees of PNAA or certain employees of PNAA’s affiliates that provide services for PNAA under service level agreements with client confidentiality safeguards. Sharing Information to Regulators PNAA discloses personal information to the Swiss Finan- cial Market Supervisory Authority (FINMA), the US Securi- ties and Exchange Commission (SEC), our external audi- tors or certain other regulators as required or permitted by applicable law for regulatory or enforcement purposes (e.g. anti-money laundering investigations). How PNAA Protects Personal Information All PNAA employees who have access to personal infor- mation are required to maintain and protect the confiden- tiality of that information and must follow established pro- cedures. PNAA maintains physical, electronic and proce- dural safeguards (including firewalls, user authentication systems and access control mechanisms) to protect per- sonal information and to comply with all applicable laws and regulations. Accessing and Revising Personal Information PNAA will endeavour to keep its client files complete and accurate. Most of the information PNAA collect is from the applications and forms that clients have submitted to ob- tain services from PNAA or its affiliates. PNAA will provide clients with reasonable access to this information. This in- formation is reflected in the documentation that PNAA provides or makes available to its clients. Clients are en- couraged to review this information and notify their PNAA client adviser if this information should be corrected or updated or if they have any questions or concerns about their personal information. Why and How PNAA Shares Information with its Affiliates Personal information about PNAA’s clients, their repre- sentatives and authorized persons is shared with certain PNAA’s affiliates, subject to service level agreements as 11 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS APPENDIX 2 - GENERAL RISK WARNINGS on the changes in the value of a particular kind of property (of any description) or changes in the value of an index, such as the SP500 index or any other index. The general risk warnings are provided to you as clients of PNAA. In both cases, the investment or property are referred to as the “underlying instrument” Different instruments involve different levels of exposure to risk and therefore are inappropriate to your circum- stances or risk appetite. You should not deal in any instru- ments unless you are satisfied that you understand their nature and the extent of potential risk. Risks Securitized derivatives often involve a high degree of gear- ing or leverage, so that a relatively small movement in the price of the underlying investment results in a much larger movement, unfavorable or favorable, in the price of the securitized derivative which means that the price of these instruments can be volatile. These risk warnings cannot disclose all the risks and other significant aspects of the financial instruments in which we deal on your behalf. Neither do these risk warnings constitute any advice which we could provide to you. Securitized derivatives have a limited life and can (unless there is some form of guaranteed return to the amount you are investing in the product) expire worthless if the underlying instrument does not perform as expected. In relation to derivatives, these risk warnings cannot dis- close all the risks and other significant aspects of warrants and/or derivative products such as futures, options, and contracts for differences. Although can be used for the management of investment risk, some of these products are unsuitable for many investors. As a result of this risk, you should only buy these products if you are prepared to lose all the money you have in- vested plus any commission or other transaction charges. Financial Instruments You should consider carefully whether this product is suit- able for you in light of your circumstances and financial position and if you are in any doubt, you should seek pro- fessional advice. 1. Warrants Nature A warrant is a time-limited right to subscribe for shares, debentures, loan stock or government securities and is ex- ercisable against the original issuer of the underlying secu- rities. 3. Contracts for Difference Nature Futures and options contracts can also be referred to as contracts for difference. These can be options and futures on the SP500 index or any other index, as well as currency and interest rate swaps. However, unlike other futures and options, these contracts can only be settled in cash. Some other instruments are also called warrants but are actually options (for example, a right to acquire securities which is exercisable against someone other than the origi- nal issuer of the securities, often called a ‘covered war- rant’). Risks Investing in a contract for difference carries a high degree of risk because the ‘gearing’ or ‘leverage’ often obtainable means that a small deposit or down payment can lead to large losses as well as gains. Risks It is important to note that a relatively small movement in the price of the underlying security results in a dispropor- tionately large movement, unfavorable or favorable, in the price of the warrant. As a result, the prices of warrants can be volatile. This also means that a relatively small movement can lead to a proportionately much larger movement in the value of your investment and this can work against you as well as for you. The right to subscribe conferred by a warrant is generally limited by time, which means that if the investor fails to exercise this right within the predetermined timescale, then the investment becomes worthless. 4. Options Nature An option is an instrument sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed-upon price during a certain period or on a specific date. It is therefore important to understand that if you are con- sidering purchasing a warrant you should be prepared to lose all of the money you have invested plus any commis- sion or other transaction charges. There are many different types of options with different characteristics and risks. Two examples are set out below. 2. Securitized Derivatives Nature Certain types of securitized derivatives, including covered warrants, contain a time-limited right to buy or sell one or more types of investment which is normally exercisable against someone other than the issuer of that investment. Risks of Buying Options Buying options involves less risk than selling options be- cause, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maxi- mum loss is limited to the premium, plus any commission or other transaction charges. Other types of securitized derivatives give you rights un- der a contract for differences which allow for speculation 12 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS It is impossible to trade units or shares in collective invest- ment products if there is no liquid market. Risks of Writing Options If you write an option, the risk involved is considerably greater than buying options. You are liable for margin to maintain its position and a loss could be sustained well in excess of the premium received. In the case of open-ended funds, in particular hedge funds, there will probably be limits to your ability to re- deem units while some funds also engage in shorting or leveraging techniques. When writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exer- cised against you, however far the market price has moved away from the exercise price. If you already own the underlying asset which you have contracted to sell (when the options will be known as ‘covered call options’) the risk is reduced. 6. Shares Nature Shares, known as equities, represent a portion of a com- pany’s share capital. The extent of your ownership in a company depends on the number of shares you own in re- lation to the total number of shares in issue. Some shares are bought and sold on stock exchanges and their values can go down as well as up in line with market conditions. These shares are termed “quoted”. Risks If you do not own the underlying asset (‘uncovered call options’) the risk can be unlimited. Only experienced per- sons should contemplate writing uncovered options, and then only after securing full details of the applicable con- ditions and potential risk exposure. 5. Collective Investment Products Nature In respect of unlisted shares or shares in small companies, there is an extra risk of losing money when such shares are bought or sold as there usually is a big difference between the buying and selling price. Shares in companies incorpo- rated in emerging markets are generally harder to buy and sell than those in more developed markets and such com- panies aren’t necessarily regulated as strictly. 7. Specialist sector investments Collective Investment products include but are not limited to Mutual Funds, Exchange Traded Funds (ETFs), private funds, Real Estate Investment Trusts (REITs) and hedge funds. These are all investment vehicles that invest their assets in the securities of other issuers, or in cash, in ac- cordance with their own internal rules. Investing in shares that are concentrated in a specialist sector is considered to be a higher risk strategy, due to the concentrated exposure to the market sector in question. Whilst such investments theoretically offer greater returns over the long term, this can be coupled with the risk of higher volatility. REITs are listed companies. Investment Trusts and REITs trade at a discount or premium to the cumulative value of their underlying investments, depending on the demand for their shares. Unit Trusts and ICVCs are usually priced daily using a set formula based on their net assets minus charges. Some collective investment products specialize in certain countries or sectors, and you should read the terms of any key features document or prospectus carefully before de- ciding on an investment. Risks The value of an investment in a collective investment product is determined by the value of the underlying in- vestment made by the product’s managers. As with individual equities, the value of your investment can go down as well as up and you might not get back the original amount you invested. Any income you receive from your investment in a collec- tive investment scheme varies with the dividends or inter- est paid by the underlying investments and so could fall as well as rise. Collective investment products that focus on a country, sector or market index possibly display greater volatility than the wider market and so should be considered as higher risk than more widely invested collective invest- ment products. 13 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS APPENDIX 3 - GLOSSARY OF RISKS rates directly impact (positively or negatively) the value/price or income of the holdings. Funds that attempt to hedge against currency risk can mitigate the direct im- pact of currency movements but cannot completely iso- late the indirect effect of foreign exchange fluctuations. When investing in structured products, investors may ben- efit from an embedded hedge of the underlying currency risk that is referred to as a quanto. Derivative and Leverage Risks Investing in derivative instruments or leveraging an invest- ment can lead to a high degree of financial risk. Changes in the price of an underlying security, investment, interest rate or benchmark can result in proportionally larger changes in the price of the derivative instrument or invest- ment, resulting in losses that can in certain circumstances exceed the cost of the investment. There is also a poten- tial risk of default by a counterparty and the risk that that these products may not be liquid. Economic Risk The economic cycle and macroeconomic situation of a country, a region or the global economy can have a signifi- cant influence on prices of financial instruments. Commodity Risk The value of commodity-linked instruments can fluctuate substantially due to changes in supply and demand as well as due to political, economic and market events. Emerging Market Risk Investing in emerging markets carries a heightened risk profile; liquidity may be less reliable and price volatility can be higher than that experienced in more developed economies, potentially resulting in sudden and significant declines in value. Emerging markets have less sophisti- cated rules governing the clearing and settlement of trans- actions and investor protection. Company-specific Risk Company-specific risk (or unsystematic risk) is specific to an individual company. For example, even if the stock market or the share prices of comparable companies are rising, certain company-specific news can have a negative impact on the share price. High Yield Bond Risk Portfolios with high exposures to non-investment grade debt instruments (S&P/Moody’s Credit Rating: BB+ and below) have a higher exposure to credit and default risk. This company-specific news can include negative events such as strikes, management crises and poor annual re- sults as well as positive news such as winning a major con- tract, the launch of innovative products and a favorable market outlook. Extraordinary events within a company may cause the share price to fluctuate (volatility) and can- not be foreseen. Inflation Risk Inflation risk should be considered in particular when in- vesting in emerging markets or fixed-rate investments. In- flation is defined as the rate at which prices increase in an economy. Inflation can lead to currency depreciation and reduce the real returns of investments and financial in- struments. Concentration Risk Refers to identifying the risk in a portfolio arising from a concentration in a single asset, counterparty, sector or country. Counterparty/Issuer Risk The risk of losing part or all of an investment due to the in- solvency of the issuer of the financial instrument. This risk is particularly relevant for structured products, derivatives and certain ETFs (exchange-traded funds). Interest Rate Risk Changes in interest rates usually result in an opposite movement in the value of bonds and other debt instru- ments (e.g. a rise in interest rates is generally reflected by a fall in bond prices). The longer the maturity of the bond (the time when the principal is due to be repaid), the higher the interest rate risk. This is the commonly referred to as duration risk. Country Risk Country risk should be considered when investing in a for- eign country and in particular in emerging markets, e.g. the risk of investing in shares of a foreign company that is exposed to the risk of nationalisation or the inability to re- patriate proceeds of an investment due to capital controls. Credit and Default Risk This risk arises when the financial health of an issuer of a fixed-income security deteriorates, leading to the issuer’s inability or unwillingness to repay the bond or meet con- tractual obligations (interest or principal repayments). This can result in a decline in the value of the bonds or render them worthless. Liquidity Risk When market conditions are unusual or characterised by particularly low volumes, a portfolio can encounter diffi- culties in valuing and/or trading some of its assets. For funds, liquidity constraints can arise, resulting in limited availability for subscriptions and redemptions or lockups can be imposed, meaning investors are subject to market risk during interim pricing periods and may have limited ability to access funds at short notice. For structured products, liquidity risk could materialize before maturity as investors can encounter difficulties in selling the prod- uct on the secondary market. The investor may receive less than their initial investment if the product is sold on the secondary market (if the parameters impacting the product market value are unfavorable). Currency/Exchange Rate Risk This risk arises when the reference currency differs from the investment currency. Fluctuations in foreign exchange 14 OF 15  FORM ADV: PART 2A PICTET NORTH AMERICA ADVIS ORS Market Risk Financial instruments are subject to price fluctuation/ vol- atility and to political and economic risks which can signif- icantly impact the performance of the financial instru- ment/ portfolio. changing rainfall patterns, rising sea levels, ocean acid- ification, and biodiversity loss. Physical risks may neg- atively affect the value of investments by impairing as- sets, productivity or revenues, or by increasing liabili- ties, capital expenditures, operating and financing costs. • Environmental Risk: Political Risk Countries with unstable political leadership or where poli- tics strongly influence markets and business practices may be subject to greater volatility. Political risk may include potential for currency controls that would disrupt the fi- nancial markets in that country. This refers to the risk associated with the exposure to issuers that may be affected by environmental degra- dation and/or the depletion of natural resources. Envi- ronmental risk can result from air pollution, water pol- lution, waste generation, the depletion of freshwater and marine resources, the loss of biodiversity or dam- ages to ecosystems. Environmental risks can negatively affect the value of investments by impairing assets, productivity or revenues, or by increasing liabilities, capital expenditures, operating and financing costs. Reinvestment Risk The risk that coupons from a bond will not be reinvested at the same interest rate as when the bond was issued. This risk is related to the fluctuation of interest rates, where an increase in interest rates will be positive for the investor and a decrease unfavorable. • Social Risk: Risks Linked to Costs/Charges All investments incur various charges regardless of whether the investment return is positive or negative. When the investment return is very low or negative, these charges can significantly impact the overall return. Smaller Company Risk Securities of smaller companies may be less liquid than larger companies. Securities of smaller companies may be more price volatile and entail greater risk. This refers to the risk associated with the exposure to issuers that may be negatively affected by social fac- tors such as poor labour standards, human rights vio- lations, damages to public health, data privacy breaches or increased inequalities. Social risks can negatively affect the value of investments by impairing assets, productivity or revenues, or by increasing liabil- ities, capital expenditures, operating and financing costs. • Governance Risk: Sustainability Risk The risk arising from any environmental, social or govern- ance events or conditions that, were they to occur, could have a material negative impact on the value of the invest- ment. Specific ESG/sustainability risks include, but are not limited to, the following: • Climate Transition Risk: This refers to the risk associated with issuers that may be negatively affected by weak governance structures. For companies, governance risk can result from mal- functioning boards, inadequate remuneration struc- tures, abuses of minority shareholders or bondholders’ rights, deficient controls, aggressive tax planning and accounting practices or lack of business ethics. For countries, governance risk can stem from governmen- tal instability, bribery and corruption, privacy breaches and lack of judicial independence. Governance risk may negatively affect the value of investments due to poor strategic decisions, conflicts of interest, reputa- tional damages, increased liabilities or loss of investor confidence. This refers to the risk associated with the exposure to issuers that may be negatively affected by the transi- tion to a low-carbon economy due to their involve- ment in fossil fuel exploration, production, processing, trading and sale, or their dependency on carbon-inten- sive materials, processes, products and services. Tran- sition risk may result from several factors, including rising costs and/or the limitation of greenhouse gas emissions, energy-efficiency requirements, the reduc- tion in fossil fuel demand or the shift to alternative en- ergy sources due to policy, regulatory, technological and market demand changes. Transition risks can neg- atively affect the value of investments by impairing as- sets or revenues, or by increasing liabilities, capital ex- penditures, operating and financing costs. • Climate Physical Risk: Consequent impacts to the occurrence of Sustainability Risks can be many and varied according to a specific risk, region or asset class. Generally, when a Sustainability Risk occurs for an asset, there will be a negative impact and potentially a partial or total loss of its value. However, the integration of Sustainability Risks analysis should mitigate the impact of such risks on the value of the investments and could help enhance long-term risk adjusted returns for investor. Source: Six Swiss Exchange This refers to the risk associated with the exposure to issuers that may be negatively affected by the physical impact of climate change. Physical risk includes acute risks arising from extreme weather events such as storms, floods, droughts, fires or heatwaves, and chronic risks from gradual climate changes, such as 15 OF 15