Investment policy change – UBS (Lux) Equity Fund Biotech (USD)

Objective and policy

UBS Asset Management categorises this sub-fund as an ESG Integration fund that does not promote particular ESG characteristics or pursues a specific sustainability or impact objective.

The sub-fund mainly invests in shares and other equity interests of companies focusing on research, product development, product manufacture and distribution in the biotechnology industry and related branches. The investments can be made in equities and equity interests of large multinationals or other companies whose products are not yet ready for marketing. Investments are made worldwide without restrictions. For the aforementioned reasons, units in this sub-fund may occasionally exhibit substantial price fluctuations. The sub-fund uses the benchmark MSCI US Investable Market Biotechnology 10/40 Index (net div reinvested) for performance measurement, risk management and portfolio construction purposes. The Portfolio Manager may use their discretion when constructing the portfolio and is not tied to the benchmark in terms of equities or weightings. The portfolio may deviate from the benchmark in terms of allocation and performance.

Investors should note that the sub-fund’s exposure may also include Chinese A shares traded via Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect. Chinese A shares are renminbi-denominated A shares of companies domiciled in mainland China; these are traded on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

This sub-fund may invest in both developed and emerging markets. The risks associated therewith are listed in the section entitled “General risk information”. In addition to the aforementioned, investors should read, be aware of and take into account the risks associated with investments traded via Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect. Information on this topic can be found after the section “General risk information”.

For the reasons mentioned, this sub-fund is particularly suitable for risk-conscious investors.

Objective and policy

This sub-fund promotes environmental and social characteristics and falls under Article 8(1) of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector. The sub-fund mainly invests in shares and other equity interests of companies focusing on research, product development, product manufacture and distribution in the biotechnology industry and related branches. The investments can be made in equities and equity interests of large multinationals or other companies whose products are not yet ready for marketing. Investments are made worldwide without restrictions. For the aforementioned reasons, units in this sub-fund may occasionally exhibit substantial price fluctuations.

The Portfolio Manager utilises a UBS ESG consensus score to identify companies for the investment universe with strong environmental and social performance characteristics, or a strong sustainability profile. This UBS ESG consensus score is a normalised weighted average of ESG score data from internal and recognised external providers. Rather than relying on an ESG score from a single provider, the consensus score approach enhances the plausibility of the sustainability profile quality. The UBS ESG consensus score assesses sustainability factors, such as the performance of the relevant companies with reference to environmental, social and governance (ESG) aspects. These ESG aspects relate to the main areas in which the companies operate and their effectiveness in managing ESG risks. Environmental and social factors can include (amongst others) the following elements: environmental footprint and operational efficiency, environmental risk management, climate change, natural resource usage, pollution and waste management, employment standards and supply chain monitoring, human capital, diversity within the board of directors, occupational health and safety, product safety, as well as anti-fraud and anti-corruption guidelines. The sub-fund promotes the following ESG characteristics:

- The sub-fund does not invest directly in companies that violate the principles of the UN Global Compact without discernible corrective measures being taken.

- The sub-fund aims to achieve a lower absolute carbon intensity than its benchmark and/or an absolute value of less than 100 tonnes of carbon emissions per million US dollars of revenue.

- The sub-fund aims to have a sustainability profile that is better than its benchmark’s sustainability profile and/or aims to invest at least 51% of assets in companies that have a better sustainability profile than the best 50% of the companies in the benchmark (in order of UBS ESG Consensus Score).

The calculation does not take account of cash and unrated investment instruments.

The sub-fund uses the benchmark MSCI US Investable Market Biotechnology 10/40 Index (net div rein-vested) in order to monitor performance and the ESG profile, as well as for ESG and investment risk management and portfolio construction purposes. The benchmark is not designed to promote ESG characteristics. The sustainability profile of the sub-fund is measured by its benchmark’s profile and the corresponding results are calculated at least once each year from the relevant monthly profiles and published in the annual report. The investment strategy and monitoring process ensure that the environmental or social characteristics of the product are taken into account. The Portfolio Manager may use discretion when constructing the portfolio and is not tied to the benchmark in terms of investment selection or weight. This means that the investment performance of the sub-fund may differ from the benchmark. For unit classes with “hedged” in their name, currency-hedged versions of the benchmark may be used if available.

Investors should note that the sub-fund’s exposure may also include Chinese A shares traded via Shang-Hai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect. Chinese A shares are Renminbi-denominated A shares of companies domiciled in mainland China; these are traded on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

This sub-fund may invest in both developed and emerging markets. The risks associated therewith are listed in the section entitled “General risk information”. In addition to the aforementioned, investors should read, be aware of and take into account the risks associated with investments traded via Shang-Hai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect. Information on this topic can be found after the section “General risk information”.

For the reasons mentioned, this sub-fund is particularly suitable for risk-conscious investors.”