STRICTLY CONFIDENTIAL

NOT FOR PUBLIC USE. NOT TO BE MAILED, SHOWN OR QUOTED TO ANY THIRD PARTY.

THIS PRESENTATION IS SUBJECT TO THE ENCLOSED DISCLAIMER.

2013

UBS Exchange Traded Funds UBS IQ Research Preferred Australian Share Fund

ASX Code: ETF

Global Asset Management

Stephen Small ETF Capabilities Manager

This presentation provides general product information only.

It is not personal advice and does take into account any

particular person’s objectives, financial situation or needs.

Before acting on this information we recommend you consult

your financial adviser.

SECTION 1

A brief introduction to UBS Global Asset Management

3

UBS

UBS

AUD 2.3 trillion¹ invested assets

Around 63,000 employees

Note: As at 31 December 2012

1 Worldwide figures (rounded)

Retail &

Corporate

Global Asset

Management

Investment

Bank

Wealth

Management

Wealth

Management

Americas

UBS is a global firm providing financial services with offices in over 50 countries

SECTION 2

The UBS IQ Research Preferred ETFs

ASX Code: ETF

Building smarter equity portfolios

5

UBS IQ ‘Research Preferred’ ETFs

UBS IQ Research Preferred funds—underlying portfolio constructed by reference to UBS Research

Australia's #1 equity research team*

Opening up our market leading expertise to the wider market

An innovative approach that’s Positively Different

An innovative approach …

The first ETF of its kind in the world to track an index of “buy” recommended securities

*East Coles Survey 2012

Smart Beta /

Research Preferred

Broad Mkt Beta /

Passive

Alpha /

Active Management

6

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

The Australian equity market

A simple portfolio of Australian Shares

Market cap weighted portfolios

Heavily weighted towards large caps

Thinly allocated across tail

Stock concentration risk (e.g. BHP, Banks, TLS)

Sector concentration risk (resources and financials)

7

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Select the best ‘Buys’

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%A portfolio of high quality stocks with “buy” ratings

Identify those securities that represent good value and

good quality

Remove the other stocks

Building a smarter portfolio

8

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Modified free float

Re-weight the portfolio to more evenly allocate across sectors

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%Diversify the portfolio

More evenly allocate the portfolio

Approx 30% mid and 30% small cap exposure

9

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

Resulting Portfolio

A portfolio of quality value stocks

A portfolio of 40 good valued stocks

Stock names are fully disclosed and updated daily

The UBS IQ ETF portfolio…

10 10

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

A smarter exposure to Australia Equities

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Source: UBS

11

Step #1:

Investment universe: ASX 200

Step #2:

Buy rated stocks

(to capture good ‘value’ stock)

Step #3:

Strong financial statements (to

capture good ‘quality’ stocks)

Step #4:

Modified free float weighting (more

evenly allocate across large, mid

and small)

Constructing our portfolio

Disclaimer: The data presented is not intended to represent how the UBS

IQ Research Preferred Australian Share Fund ETF would have performed

and is therefore not an indication of its future performance–it is for

illustrative purposes of the research model only.

Using UBS Investment Bank analysts to do the forward looking valuation

Good quality companies outperform in the

long run ...

(50)

0

50

100

150

200

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

FSQ Low 0–4 FSQ Mid 5–6 FSQ High 7–9

12

Stock Story—Flexigroup

Flexigroup Limited (FXL): a diversified financial services group that provides services of leasing

finance, credit cards, lay-by etc to both consumers and business +

Placed on a ‘buy’ in February 2010

Current price target based = $4.45

Source: UBS Source: ASX

Placed on a ‘buy’

Strong balance sheet: conservative balance

sheet with gearing c.11% and receivables

>$1 billion

• Buy recommendation + strong financial statement

= 1.7% of ETF

(versus 0.06% of ASX 200)

13

Why use the UBS IQ ETF in your portfolio

UBS IQ ETF provides:

Expertise - Access to a diversified Australian equity portfolio selected by the #1

research house in Australia*

Transparency – Know the stocks in your portfolio to avoid duplicating stocks you may

already hold

Growth – good value stocks

Income source - dividends and franking credits

Diversification - Provides diversification across quality stocks and quality research for

any sized portfolio

Adding growth and income to your portfolio

*East Coles Survey 2012 ASX Code: ETF

Equity exposure provides both GROWTH and INCOME potential

Requires good quality large, mid and small cap stocks

14

Disclaimer

This presentation and accompanying documents is intended to provide general information only and has been prepared by UBS Global

Asset Management (Australia) Ltd (ABN 31 003 146 290) (AFS Licence No. 222605) without taking into account any particular person’s

objectives, financial situation or needs. Investors should before acting on the information provided in this presentation, consider the

appropriateness of the information having regard to their personal objectives, financial situation or needs.

Any opinions expressed in this material are those of UBS Global Asset Management (Australia) Ltd, a member of the Global Asset

Management division of UBS AG, and are subject to change without notice. Although all information in this presentation and documents

is obtained in good faith from sources believed to be reliable no representation of warranty, express or implied is made as to its accuracy

or completeness. Neither UBS AG nor any of its affiliates, directors, employees or agents accepts any liability for any loss or damage

arising out of the use of all or any part of this material.

The information provided during this presentation must not be relied on to make an investment decision. It is not an offer or

recommendation to acquire an interest in the UBS Managed Investment Funds (UBS Funds) or recommendation to purchase or sell any

particular security. Offers of interests in the UBS Funds are contained in the relevant current Product Disclosure Statement (PDS). An

investment in any of the UBS Funds does not represent deposits or other liabilities of UBS AG or any other member company of the UBS

Group. Your investment is subject to investment risk, including possible delays in repayment and loss of income and capital invested. The

repayment of capital or income is not guaranteed by any company in the UBS Group.

Performance can be volatile and future returns can vary from past returns. Up-to-date performance information can be obtained by

contacting UBS Global Asset Management (Australia) Ltd. A copy of the PDS is available from UBS Global Asset Management

(Australia) Ltd, the issuer of the UBS Funds, on (02) 9324 3222 or freecall on 1800 023 043. You should consider that PDS and obtain

professional advice before making any decision about whether to acquire or continue to hold an investment in the Fund(s).

This document may not be reproduced or copies circulated without prior authority from UBS Global Asset Management (Australia) Ltd.

© UBS 2013. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.