Pictet North America Advisors

Item 4: Advisory Business

Item 5: Fees & Compensation

Management 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.

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 services is the following:

For cash management dedicated accounts, the fee is a flat 0.22%.

Discretionary management fees include brokerage commissions and transaction fees. Custodian fees, other related costs and expenses are incurred by the clients in addition to our management fees.

b) Non-discretionary (Advisory) Fees

The fee schedule for non-discretionary (Advisory) services is the following:

Item 6: Performance – Based Fees and side-by-side Management

We do not charge performance-based fees to any clients.

Item 7: Types of Clients

Item 8: Methods of Analysis, Investment Strategies and Risk of Loss

Methods of Analysis

a) Discretionary Mandates

For our discretionary clients, we generally focus on allocating investments among various asset classes, following a top-down investment approach, with the asset allocation decision being the biggest source of alpha. We seek international diversification in an effort to enhance portfolio return while diversifying risks. Our securities analysis 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 exposure of discretionary mandate portfolios intended to protect the clients’ assets against market events likely to have a negative impact on performance. Our clients’ discretionary managed portfolios include various instruments including, but not limited to, equity securities, corporate debt securities, commercial papers, certificates of deposit, municipal and governmental securities, mutual and exchange traded fund shares, precious metals, derivatives and alternative investments such as funds of hedge funds.

Our conservative investment style is typically focused primarily on long-term purchases. We also generally focus on liquid investments, investment grade fixed income instruments and generally well-known funds. In addition, we typically avoid micro cap securities, certain jurisdictions with higher instability risk, leverage and derivatives for speculative purposes.

b) Advisory Mandates

For our clients with advisory mandates, we provide a trade-by-trade basis advice, tailored to each client depending on individual needs and profile. We provide advice on various instruments including, but not limited to, equity securities, warrants, corporate debt securities, commercial papers, certificates of deposit, mutual and exchange-traded fund shares, governmental securities, options, precious metals, derivatives and alternative investments (including hedge funds and private equity vehicles).

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.

These strategies involve financial instruments with different 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 offer:

• low risk strategies including, but not limited to, enhanced fixed income investments;
• balanced risk strategies investing mainly in fixed income instruments and equities. The level of risk for such strategies ranges from medium risk where the equities 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, strategies 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 diversification of financial instruments and markets (including emerging countries).

All positions can be invested directly or indirectly through funds (including affiliated funds).

b) Other Material Risks Associated with Discretionary & Non-discretionary Mandates

Investing in financial instruments including securities involves a risk of loss that clients should be prepared to bear. Other material risks relating to investments include, but are not limited to:

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 instruments can become difficult to trade. An illiquid asset reduces the returns because the investor is not able to sell the assets at the time desired for an acceptable price or is not able to sell the assets at all.

Credit/Counterparty Risk – the possibility that the issuer 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.

High Yield Risk – lower-quality debt securities as rated by the major credit rating agencies (those of less than investment grade quality, commonly known as “high yield bonds” or “junk bonds”) are riskier, speculative and involve greater risk of default.

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 directly in commodities.

Foreign/Emerging Markets – foreign securities involve the risk of loss due to political, economic, regulatory, and operational uncertainties, currency fluctuations, and generally 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.

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 adverse investor sentiment in general.

Different financial instruments involve different levels of exposure to risk and may be inappropriate for certain investors depending on their circumstances and risk appetite.

Please consult the Appendix 2 to this brochure entitled “General Risk Warnings” for additional risk information per financial instrument type.

Item 9: Disciplinary Information

Item 10: Other Financial Industry Activities and Affiliations

Other Registrations & Material Conflicts

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.

Pictet Asset Management SA (PAM SA), an affiliate, provides PNAA with portfolio models for a thematic investment strategy which PNAA uses to manage separately managed accounts in the Discretionary Mandate program. In addition, PAM SA offers products such as a thematic ETF that PNAA can invest in on behalf of its clients with Discretionary Mandates.

PNAA may also invest, on behalf of its clients with Discretionary Mandates, funds managed by its affiliate, Pictet 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.

Material Relationships or Arrangements with Affiliated Entities

a) PNAA and Banque Pictet & Cie SA

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 execution. As noted in Item 5 above, PTS does not charge clients 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 transactions 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.

While PNAA and BPSA do not share staff, the Chairman of PNAA’s Board of Directors has executive functions at BPSA.

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 services we provide to our clients.

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 arrangements, but has a general indirect incentive, being part of the Pictet Group, to refer business to its affiliated entities.

i) Custody Services

PNAA’s clients who select BPSA or BPAG to provide custodial 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 settlement of trades into client accounts, valuation of assets and provision of statements, pursuant to separate agreements between each client and them. See Item 15 for more information.

ii) Brokerage Services

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 services. If Clients select POI, they will then enter into a separate 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.

Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading

Code of Ethics

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

C. Gifts and entertainment rules

D. Protecting the confidentiality of client information

E. Dealing with personal conflicts of interest of Supervised Persons

F. Respecting PNAA corporate confidential information

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 restrictions, requires preclearance and/or reporting of certain personal securities transactions, and imposes timing and other restrictions on transactions, outright prohibitions and compliance certification. The Code also requires the maintenance and review of certain records as well as periodic meetings to familiarize persons subject to the Code with their responsibilities under it.

We owe a fiduciary duty to our clients and a duty to act in the best interests of our clients. This duty generally requires that the interests of clients be placed above the interests 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:

A. Comply with all relevant laws and regulations.

B. Place the interests of our clients first.

C. Conduct all personal securities transactions in compliance with the Code and avoid any actual or potential conflict of interest, or any abuse of their position of trust and responsibility.

D. Hold all client information, including securities holdings and financial information in confidence.

E. Maintain independence in the decision-making process on behalf of clients.

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 number listed on the first page of this brochure.

Participation or Interests in Clients Transactions and Personal Trading

We recommend to our clients that they buy or sell interests in the same investment products in which our employees (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 vehicles, 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 recommendations would be based on the best interest of the relevant client(s). Further, we do not receive any compensation as a result of these recommendations. When a portion of a client’s assets are invested in a product managed by us or an affiliate, PNAA either pays the affiliate directly or excludes those assets from its basis for its advisory fee calculation. Lastly, personal transactions and holdings of our employees are subject to the Code and related controls described above.

Although we do not hold proprietary positions, our employees or some of our affiliates have the right to own, buy or sell for themselves (proprietary account of our affiliates 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 security holding from client transactions in the same or a similar security. However, our employees (and other access persons where applicable) are subject to the Code and related controls described above. In addition, there are certain information barriers in place between us and our affiliates, including separate staff.

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 management and related conflicts and controls.

Item 12: Brokerage Practices

Brokers Selection

a) Discretionary Mandates

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.

As noted in Items 5 and 10 above, however, we do not execute 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 transmitting 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 counterparty 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 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 transaction.

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 provide 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 broker’s services including the value of research provided, if any, execution capabilities on international markets including block positioning, financial stability, ability to maintain confidentiality, adequate settlement/delivery capabilities, ability to obtain best price by querying multiple markets and using smart routers, commission rates and responsiveness.

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 Eurex membership to place derivatives on the local markets for clients.

Under the Order Handling SLA, BPSA also provides assistance to PNAA in connection with the following:

• Subscription and redemption of mutual funds
• Participation in private equities
• IPOs and new bond issues subscription

PNAA has an obligation to seek “best execution” for client transactions. Best execution generally refers to the execution of portfolio transactions in such a manner that the total proceeds in each transaction is the most favorable under the circumstances. The SEC defines best execution as “best qualitative execution”, not merely the lowest possible execution cost. In evaluating the quality of execution and selecting broker-dealers to execute client transactions, PNAA considers various factors, such as execution capability, commission rate (or spread), financial responsibility and responsiveness.

Research & Soft Dollars Benefits

PNAA does not currently enter into third party soft-dollar arrangements with any related or external brokers. However, BPSA separately has such arrangements directly with its third-party brokers.

In formulating investment advice, PNAA relies on various sources of information, mainly third-party research materials, 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 organized by external research firms on various industries or markets. In addition, we receive and utilize research reports and market analysis from BPSA and its affiliates. Our personnel participate in investment committees and meetings with BPSA to discuss or gain information concerning investment opportunities, markets, corporate actions and strategies.

Although BPSA provides us with research and information about markets and financial instruments, BPSA does not provide advice or recommendations to our clients. We formulate our own investment advice and recommendations 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.

Brokerage for Client Referrals

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

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 receive 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 selected. See below for more detail about trade aggregation.

Trade Aggregation

When buying and selling investments for clients, PNAA generally places multiple transactions at once for all clients involved in the transaction. In case of partial execution, 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

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 accounts is not favored or preferred over another account or group of accounts. We strive to be particularly sensitive to this potential conflict where a particular investment 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.

b) Advisory Mandates

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.

Item 13: Review of Accounts

Periodical Review

After account opening approval, each client account is assigned to one of our Client Advisers. Our Chief Investment Officer and portfolio management team conduct monthly investment controlling reviews aimed at monitoring performance statistics, compliance with investment restrictions and allocation grids per Discretionary Mandate types.

Lastly, the appointed Client Adviser reviews client investment objectives for both Discretionary Mandates and Advisory Mandates on an annual basis.

Punctual Reviews

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.

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

We do not ourselves issue client reports. BPSA and BPAG, when acting as custodian, issue directly to clients regular written statements on their accounts (‘’Statements’’). Such Statements are issued at least on a quarterly basis (or on a monthly basis at the client’s option) and include a valuation, transaction statements and a performance summary. These Statements typically describe all assets held, the quantity and market price in local 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. Clients 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.

Item 14: Client Referrals and Other Compensation

We do not accept from non-clients an economic benefit, including sales awards, for providing investment advice or other advisory services to our clients.

We do, from time to time, refer clients to some of the Pictet Group entities (or to non-affiliated entities and persons) 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.

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 disclosed to our client as per our related policy. This referral fee paid to promoters does not result in any additional charge to our clients.

Item 15: Custody

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, Section 9C of Schedule D, and Section 7A of Schedule D for more information relating to Pictet acting as qualified custodian.

Item 16: Investment Discretion

PNAA receives and exercises discretionary authority to manage investments on behalf of Discretionary Mandate clients. As noted in Item 4 above, some discretionary clients impose limitations on this discretion with respect to certain aspects of the management of their account.

We typically assume and receive this discretionary authority through the written Discretionary Mandates, completed along with written investment Strategies form.

Item 17: Voting Client Securities

We have a policy to not accept proxy voting responsibility for securities held in our clients’ accounts except that we may exercise investment authority for certain corporate actions (including, but not limited to, take overs, dividends in cash or shares, rights offerings, offers to redeem, splits, reverse splits, changes in nominal value, etc) in connection with Discretionary Mandate accounts pursuant 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 directly with their custodians to vote proxies for securities or to obtain proxies or other solicitation materials directly from their custodians.

Item 18: Financial Information

Form ADV 2A requires us to disclose any financial condition reasonably likely to impair our ability to meet contractual commitments to clients. At this time, we have no information to report that is responsive to this item.