Post on 17-Oct-2020
Barometer UCITS Fund ICAV
September | 2017
Barometer UCITS Fund ICAVBarometer Tactical Income Fund
Barometer UCITS Fund ICAV Agenda
• Barometer - Organizational Strength and Governance
• Tactical Income Strategy - Differentiated Process
• Investment Manager Performance
• Portfolio Rotation
• Current View – Constructive Capital Markets
• Current Portfolio Construction
2
Barometer UCITS Fund ICAV
Organizational Strength
and Governance
3
Barometer UCITS Fund ICAV
4
Greg Guichon
Chairman, Chief Portfolio ManagerDavid Burrows
President, Chief Investment Strategist
Roy Scaini
Chief Executive Officer
• Partnership established in 2001 and evolved from founding partners’ focus on the unique needs
of the private client investor
• Independent firm with 35 employees and AUM of approximately $ 2.0 billion*
• Provide wealth management services to over 400 HNW and UHNW clients
• Absolute return investment strategy available to North American investors through Pooled Pools
and separately managed accounts
• Minimum $2 million for Private Pools; $10 million for separately managed accounts
Backg r oun d
* Assets under management include separately managed client accounts, private pools, and Barometer Group of Funds. Barometer Private Pools,
Barometer group of funds and investment advisory services to broker/clients via an investment management platform as at December 31, 2016.
HNW – High Net Worth
UHNW – Ultra High Net Worth
Barometer UCITS Fund ICAV St r a t egy
Investment Strategy
▪ Global Tactical Income
Investment Objective
▪ An open mandate of income generating securities across markets, asset classes,
geographies, and sectors to find steady cash generating investments that exhibit
the best risk reward characteristics
▪ Designed to maximize absolute returns with low volatility
▪ Portfolio constructed with 30 to 40 securities and focused on large-cap
companies that are highly liquid
5
Barometer UCITS Fund ICAV I nves t m en t Team
6
Barometer UCITS Fund ICAV Cor po r a t e G ove r nance
7
• Investment Manager - Barometer Capital Management Inc.
• Fund Depository - Société Générale S.A., Dublin
• Fund Administrator - Maples Fund Services (Ireland) Limited
• Independent Auditors – Deloitte and Touche
• Swiss Representative - 1741 Fund Solutions Ltd.
• Swiss Paying Agent – Notenstein La Roche Bank Ltd.
• Manager - Barometer Management (Ireland) Limited
• Tom Coghlan (Independent Irish Director)
• Philip McEroe (Independent Irish Director)
• Roy Scaini (Canadian Resident)
Barometer UCITS Fund ICAV
Differentiated Process
8
Barometer UCITS Fund ICAV
9
Focus in market
leadership
– without bias
Recognize
change
and adjust
Be prepared
to play defense
A tactical approach…
D i s c i p l i n e d L e a d e r s h i p A p p r o a c h ™
Barometer UCITS Fund ICAV
10
O ur P r ocess
Asset classSector
Security
• Disciplined
• Quantitative
Security selection
Removes emotion
and rationalization
Barometer UCITS Fund ICAV
11
D i s c i p l i n e d L e a d e r s h i p A p p r o a c h ™
Market / Sector
Risk
Security Selection
1. Top-down
2. Bottom-up
3. Disciplined selling
Improving breadth
Portfolio
Positive change
Asset classSector
Security
Barometer UCITS Fund ICAV
Go anywhere for income
▪ Government bonds
▪ Corporate bonds
▪ Convertible bonds
▪ Preferred shares
▪ REITs
▪ Dividend paying common shares
REIT - Real Estate Investment Trust
Cap i t a l S t r uc t u r e A r b i t r age
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Barometer UCITS Fund ICAV
Barometer’s security selection process assesses
▪ Balance sheet health
▪ Sustainability of payments
> Low % payout / High interest coverage ratio
▪ Healthy re-investment
▪ Likelihood of credit upgrade or distribution increase
▪ Relative yields spreads
▪ Potential for narrowing risk premiums
Secu r i t y Se lec t i o n
Increasing cash distributions or credit quality drives portfolio return
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Barometer UCITS Fund ICAV
Qualitative▪ Quality of assets
(in the event of a default)
▪ Bond covenants
▪ Quality of management
▪ Barriers to entry
▪ Cyclicality of business
Quantitative▪ Cash flow relative to debt
▪ Debt to EBITDA
▪ EBITDA interest coverage
▪ % Debt in capital structure
▪ EBITDA growth
▪ Operating margins
▪ Sales growth
▪ Altman Z score
▪ Highest probability of default
EBITDA – Earnings before interest, taxes, depreciation and amortization
Cr ed i t Q ua l i t y
As s es s m en t Pa r am e t e r s
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Barometer UCITS Fund ICAV
15
Investment Manager
Performance
Barometer UCITS Fund ICAV
Individual account performance results and account composition may differ from that of the listed mandate due to a number of factors, including fees, client imposed restrictions, timing of trade executions,deposits, withdrawals and market fluctuations. Tactical Income Mandate (“Mandate”) performance returns are expressed gross of fees and taxes, excluding those withheld by law, or other charges that may be payable. The Mandate performance returns are historical annual compounded total returns unless otherwise noted. Please note that benchmark returns may differ from that of the Mandate as they may have a different composition and risk profile. Past performance is not indicative of future results. Inception date of the Mandate is January 2001.
Tac t i ca l I ncom e M anda t e
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Annualized Returns YTD 1 YR 3 YR 5 YR 10 YR Inception
Tactical Income Mandate 3.7% 6.0% 3.2% 7.0% 8.0% 11.7%
50% S&P/TSX Equity Income Index/
50% FTSE TMX Canada Universe
Bond Index
-0.4% 1.3% -0.2% 2.7% 4.5% 7.8%
July 31, 2017
Barometer UCITS Fund ICAV
Strategy2001 –
2004
2002 –
2005
2003 –
2006
2004 –
2007
2005 –
2008
2006 –
2009
2007 –
2010
2008 –
2011
2009 –
2012
2010 –
2013
2011 –
2014
2012 –
2015
2013 –
2016
Tactical Income
Mandate21.0% 24.7% 22.0% 16.2% 4.8% 5.4% 10.1% 10.5% 15.7% 12.4% 9.7% 7.3% 7.0%
50% S&P/TSX
Equity Income/ 50%
FTSE TMX Canada
Universe Bond
16.0% 16.9% 14.1% 10.1% 2.9% 3.9% 7.7% 7.5% 11.4% 6.9% 4.0% 0.7% 2.8%
Calendar Year Returns
Individual account performance results and account composition may differ from that of the listed mandate due to a number of factors, including
fees, client imposed restrictions, timing of trade executions, deposits, withdrawals and market fluctuations. Tactical Income Mandate (“Mandate”)
performance returns are expressed gross of fees and taxes, excluding those withheld by law, or other charges that may be payable. The
Mandate performance returns are historical annual compounded total returns unless otherwise noted. Note that benchmark returns may differ
from that of the Mandate as they may have a different composition and risk profile. Past performance is not indicative of future results. Inception
date of the Mandate is January 2001.
April 30, 2017 – Four Year Rolling Return Window (Annualized)
Tac t i ca l I ncom e M anda t e
vs . Benchm ar k
17
Year Mandate Benchmark
2001 10.1% 15.1%
2002 10.4% 11.0%
2003 29.7% 21.7%
2004 36.0% 16.7%
2005 24.1% 18.5%
2006 1.2% 0.8%
2007 5.2% 5.4%
2008 -10.2% -10.9%
2009 27.1% 23.1%
2010 20.4% 16.5%
2011 8.3% 4.6%
2012 8.2% 2.7%
2013 13.2% 4.1%
2014 9.0% 4.4%
2015 -0.8% -8.3%
2016 7.1% 11.7%
2017 YTD 3.7% -0.4%
Barometer UCITS Fund ICAV
10/31/2001
to
3/31/2002
5/31/2003
to
5/31/2004
6/30/2005
to
6/30/2006
11/30/2006
to
6/30/2007
12/31/2008
to
12/31/2009
8/31/2010
to
3/31/2011
7/31/2012
to
1/31/2013
12/31/2012
to
8/31/2013
10/31/2013
to
12/31/2013
01/31/2015
to
06/30/2015
06/30/2016
to
02/28/2017
∆ 10y U.S.
Treasury
Yield1.16 1.28 1.22 0.57 1.63 1.00 0.52 1.03 0.47 0.71 0.92
∆ BAC ML
10y
Treasury
Price Index
-8.7% -9.2% -9.9% -4.6% -12.6% -7.6% -3.1% -8.0% -3.7% -5.7% -7.8%
Tactical
Income
Mandate7.5% 23.3% 17.9% 11.2% 27.1% 17.1% 5.5% 3.2% 3.9%
BAC ML= Bank of America Merrill Lynch
Returns are presented at month-end and the period is highlighted to illustrate performance during rising interest rates. The Tactical Income Mandate (the “Mandate”) returns are expressed gross of
management fees, expenses and performance fees. Mandate returns include the Barometer Tactical Income Pool, the Disciplined Leadership Tactical Income Growth Fund and separately managed
accounts. The data presented represents accounts that may share a similar investment profile as the Mandate, however due to client investment restrictions may differ from the Mandate and returns should
not be assumed to be indicative of the Mandate. Further, individual client account holdings may also vary as a result of each client’s stated investment policy requirements. Performance of individual
accounts may differ from the Mandate and past performance is not indicative of future results.
We have included a 10-year U.S. Treasury Bond and BAC ML 10y treasury price index for general comparison to our Mandate’s performance. However, our Mandate is not representative of a 10-year U.S.
Treasury Bond and the volatility and risk profile of our Mandate may vary substantially compared to the Bond for reasons which include, but are not limited to: (i) Barometer uses an active investment style to
construct portfolios; (ii) the Mandate may hold or have held a higher concentration in specific securities and industries; (iii) investment products may utilize, short selling and other strategies as outlined in the
offering documents; and (iv) may hold and have held a higher concentration of non-rated income investments, including corporate securities, and a lower concentration of government-issued securities.
Inception date of Mandate is January, 2001.
Tac t i ca l I ncom e M anda t e
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Annualized Returns
July 31, 2017YTD 1 YR 3 YR 5 YR 10 YR Inception
Tactical Income Mandate 3.7% 6.0% 3.2% 7.0% 8.0% 11.7%
Barometer UCITS Fund ICAV
Returns are presented at month-end and the period is highlighted to illustrate performance during rising interest rates. The Tactical Income Mandate (the “Mandate”) returns are expressed gross of
management fees, expenses and performance fees. Mandate returns include the Barometer Tactical Income Pool, the Disciplined Leadership Tactical Income Growth Fund and separately managed accounts.
The data presented represents accounts that may share a similar investment profile as the Mandate, however due to client investment restrictions may differ from the Mandate and returns should not be
assumed to be indicative of the Mandate. Further, individual client account holdings may also vary as a result of each client’s stated investment policy requirements. Performance of individual accounts may
differ from the Mandate and past performance is not indicative of future results.
We have included a 10-year U.S. Treasury Bond for general comparison to our Mandate’s performance. However, our Mandate is not representative of a 10-year U.S. Treasury Bond and the volatility and risk
profile of our Mandate may vary substantially compared to the Bond for reasons which include, but are not limited to: (i) Barometer uses an active investment style to construct portfolios; (ii) the Mandate may
hold or have held a higher concentration in specific securities and industries; (iii) investment products may utilize, short selling and other strategies as outlined in the offering documents; and (iv) may hold and
have held a higher concentration of non-rated income investments, including corporate securities, and a lower concentration of government-issued securities. Inception date of Mandate is January 2001.As at
April 30, 2017.
Tac t i ca l I ncom e M anda t e
i n Pe r i ods o f R i s i n g Yie l ds
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Barometer UCITS Fund ICAV
Source: Morningstar, June 30, 2017
The chart above is for illustrative purposes only. Past performance is no guarantee of future results. Results would be different for other time periods. Stocks are represented by the S&P 500 Index and S&P/TSX
Composite Total Return Index, unmanaged indexes and leading measures of overall US and Canadian performance respectively. Investors cannot invest directly in the indexes. Investors cannot invest directly in the
index. The rates of return are net of all expenses and fees. All performance data assumes reinvestment of all distributions or dividends and does not take into account sales, redemption, distribution or optional
charges or income taxes payable by any securityholder that would have reduced returns. Individual account performance results and account composition may differ from that of the Barometer Tactical Income Pool
(“Pool”) due to a number of factors, including fees, client imposed restrictions, timing of trade executions, deposits, withdrawals and market fluctuations. Please note that the benchmark return may differ from the
individual account or the Pool as they may have a different composition and risk profile.20
B a r o m e t e r Ta c t i c a l I n c o m e P o o l
R i s k R e w a r d
Barometer UCITS Fund ICAV
21
B a r o m e t e r Ta c t i c a l I n c o m e P o o l
D r a w D o w n
Barometer UCITS Fund ICAV
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Portfol io Rotat ion
Barometer UCITS Fund ICAV
600
800
1,000
1,200
1,400
1,600
Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09
S&
P 5
00
45.8%
54.2%
Bonds
Cash
Equities
Sept 08
Tactical Asset Rotation – Global Financial Crisis
10.2%
30.1%
59.7%
Cash
Corp.Bond
Equities
Mar 09
12.6%
87.4%
Bonds
Cash
Equities
Sept 07
The information contained herein has been provided by Barometer Capital Management Inc. (“Barometer”) for information purposes only.23
B a r o m e t e r Ta c t i c a l I n c o m e P o o l
– A s s e t R o t a t i o n
A large equity hedge was used in
the portfolio in September 2008
reducing net equity exposure to
approximately 20%
Barometer UCITS Fund ICAV
1.0%
1.5%
2.0%
2.5%
3.0%
Sep12
Oct12
Nov12
Dec12
Jan13
Feb13
Mar13
Apr13
May13
Jun13
Jul13
Aug13
Sep13
Oct13
Nov13
10-y
r T
rea
su
ry Y
ield
Taper
Tantrum
Tactical Asset Rotation – Taper Tantrum
5.0%
24.3%
70.7%
Cash
Bonds
Equities
Nov 2012
1.3%
15.8%
82.9%
Cash
Bonds
Equities
Apr 2013
2.7%
2.8%
94.5%
Bonds
Cash
Equities
Sept 2013
The information contained herein has been provided by Barometer Capital Management Inc. (“Barometer”) for information purposes only. 24
B a r o m e t e r Ta c t i c a l I n c o m e P o o l
– A s s e t R o t a t i o n
Barometer UCITS Fund ICAV
Tactical Sector Rotation – OPEC Oil Oversupply
The information contained herein has been provided by Barometer Capital Management Inc. (“Barometer”) for information
purposes only.
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B a r o m e t e r Ta c t i c a l I n c o m e P o o l
– S e c t o r R o t a t i o n
Source: Bloomberg Finance L.P.,
Barometer Capital Management Inc.
Barometer UCITS Fund ICAV
Construct ive
Capital Markets
26
Barometer UCITS Fund ICAV Secu la r Bu l l and Bea r M a r ke t s
27
Source: Raymond James Research
Barometer UCITS Fund ICAV
I n v e s t m e n t G r a d e S p r e a d s
– S t a b l e
Source: Bloomberg Finance L.P.
As at August 18, 2017
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Barometer UCITS Fund ICAV
Source: TD Securities Inc.
As at July 31, 2017
PMI - Purchasing Manager’s Index
G loba l PM I s – I m p r ov ing
29
Barometer UCITS Fund ICAV
As at May 1, 2017
O ut pu t G ap i n U . S . – Shr i nk i n g
Source: Goldman Sachs Inc.
30
Barometer UCITS Fund ICAV
31
Source: Raymond JamesQ - Quarter
Cor po r a t e Es t im a t es
Barometer UCITS Fund ICAV
32
Source: Bloomberg Finance L.P.
Ear n ings Bea t Ra t e i n
Second Q ua r t e r
Barometer UCITS Fund ICAV
33
Ear n ings Rev i s i o n Fo r 2Q , 2018
Source: Goldman Sachs
Barometer UCITS Fund ICAV
34
Portfol io Construct ion
Barometer UCITS Fund ICAV
35
His t o r i ca l Sec t o r A l l oca t i o ns
As at August 18, 2017
Barometer UCITS Fund ICAV Por t f o l i o Ana l y t i c s
As at August 18, 2017
Y/Y – Year-over-year
36
Barometer UCITS Fund ICAV
11.5%
11.1%
7.5%
5.8%
5.7%
5.5%
3.0%
2.9%
2.9%
2.9%
2.9%
2.9%
2.8%
2.8%
2.8%
2.7%
2.7%
2.7%
2.7%
2.7%
2.6%
2.5%
2.4%
2.0%
2.0%
2.0%
Industrials - Aerospace & Defense
Cash
Financials - Diversified Banks
Information Technology - Data Processing & Outsourced Services
Financials - Asset Management & Custody Banks
Information Technology - Systems Software
Health Care - Managed Health Care
Information Technology - Application Software
Information Technology - Home Entertainment Software
Health Care - Health Care Equipment
Financials - Investment Banking & Brokerage
Industrials - Industrial Machinery
Information Technology - Technology Hardware, Storage & Peripherals
Materials - Gold
Information Technology - Internet Software & Services
Energy - Oil & Gas Storage & Transportation
Consumer Staples - Packaged Foods & Meats
Information Technology - Semiconductors
Materials - Copper
Industrials - Construction Machinery & Heavy Trucks
Materials - Diversified Metals & Mining
Utilities - Renewable Electricity
Financials - Multi-Sector Holdings
Utilities - Independent Power Producers & Energy Traders
Health Care - Pharmaceuticals
Industrials - Railroads
Industry Allocations as at August 21, 2017
Barometer Tactical Income Fund
Sector AllocationInformation Technology 25.4%
Industrials 19.1%
Financials 18.5%
Cash 11.1%
Materials 8.1%
Health Care 7.9%
Utilities 4.5%
Energy 2.7%
Consumer Staples 2.7%
Geographic Allocation
U.S.: 67.5%
Canada: 26.5%
Asia: 3.1%
Europe: 2.9%
Bar om e t e r UC I TS Fund I CAV
37
Barometer UCITS Fund ICAV
Barometer Tactical Income Fund
25.4% Information Technology
US;ATVI Activision Blizzard Inc
US;ADBE Adobe Systems Inc
US;AAPL Apple Inc
US;AVGO Broadcom Ltd
US;FB Facebook Inc
US;FISV Fiserv Inc
US;MSFT Microsoft Corp
US;ORCL Oracle Corp
US;V Visa Inc
19.1% Industrials
CA;CNR Canadian National Railway Co
US;CAT Caterpillar Inc
US;FTV Fortive Corp
US;GD General Dynamics Corp
US;LMT Lockheed Martin Corp
US;NOC Northrop Grumman Corp
US;RTN Raytheon Co
18.5% Financials
CA;AQY.A Alignvest Acquisition II Corp
US;BAC Bank of America Corp
US;BLK BlackRock Inc
CA;BAM.A Brookfield Asset Management Inc
US;C Citigroup Inc
US;JPM JPMorgan Chase & Co
US;MS Morgan Stanley
CA;ONEX Onex Corp
8.1% Materials
CA;FNV Franco-Nevada Corp
CA;LUN Lundin Mining Corp
US;RIO Rio Tinto PLC
7.9% Health Care
US;JNJ Johnson & Johnson
US;SYK Stryker Corp
US;UNH UnitedHealth Group Inc
4.5% Utilities
CA;AQN Algonquin Power & Utilities Corp
CA;PIF Polaris Infrastructure Inc
2.7% Energy
CA;KML Kinder Morgan Canada Ltd
2.7% Consumer Staples
CA;MFI Maple Leaf Foods Inc
11.1% Cash and Cash Equivalents
30.0% Index Hedge
Holdings as at August 21, 2017
Bar om e t e r UC I TS Fund I CAV
38
Barometer UCITS Fund ICAV
As at August 18, 2017
1 mo 3 mo 6 mo YTD 1 yr 3 yr 5 yr S.I.*
*F Class (EUR)
0.34% 1.71% 2.45% 4.76% 6.22% n/a% n/a 7.81%
*Class F Euro Inception Date: January 13, 2016
Bar om e t e r Tac t i ca l I ncom e Fund
– Per f o r m ance
39
*Before the introduction of A shares, returns have been calculated as class F shares NAVs after deduction of management
fee of 1.20% fixed and 20% performance fee. From October 2016 onwards performance is shown for A shares.
Barometer UCITS Fund ICAV W hy Ba r om e t e r ?
Active tactical mandateHistorically effective at managing draw-downs
An Evergreen Strategy – focus on leadershipUnbiased with respect to style
Low correlation
Lower beta – attractive risk adjusted returns
Corporate governance – no laughing matter
Cash is an asset class – we manage our credit risk
Interest alignment – Fund seeded by Partners
Proven
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Barometer UCITS Fund ICAV I m po r t an t I n f o r m a t i on
This document contains “forward looking statements” which reflect the current expectations of the Barometer, Investment Manager of the Barometer UCITS Fund ICAV. These statements
reflect management’s current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known
and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance
or achievements that may be expressed or implied by such forward-looking statements including without limitation, those under the heading “Risk Factors” in the prospectus of the
Barometer UCITS Fund ICAV. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements provide incorrect, actual
results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this document.
This document is provided for information purposes only. It does not constitute an offer, solicitation or invitation to buy the units of the Barometer Tactical Income Fund (“Sub-fund”) in any
jurisdiction. The sub-fund may be only offered and distributed to investors in accordance with all relevant local laws and regulations. Prospective applicants for the Sub-fund should inform
themselves as to the legal requirements of so applying, and any applicable exchange control regulations and taxes in the countries of their respective citizenship, residence or domicile.
Changes in exchange rates may have an adverse effect on the value price or income of the product. The information does not provide individual financial, legal, tax or investment advice.
We recommend that you consult with a financial advisor prior to making any investment decisions.
Applications to invest in the Sub-fund must only be made on the basis of the prospectus and supplement. Please read the Key Investor Information Documents prior to investing in the
Sub-fund. These documents are available at www.barometer.ie. Barometer Capital Management Inc. (“Barometer”) is not liable for any errors or omissions in the information or for any
loss or damage suffered.
Returns are presented net of fees. Commissions, trailing commissions, management fees and expenses all may be associated with the Sub-fund. The indicated rates of return are the
monthly total returns including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income
taxes payable by any security holder that would have reduced returns. The Sub- fund is not guaranteed, its value changes frequently and past performance is not be a reliable guide to
future performance.
The Sub-fund strategy and current holdings are subject to change. The portfolio holdings information above may not contain all investments held, may differ from Barometer’s other
marketing materials, and may be different from the Barometer UCITS Fund ICAV annual financial report for the same period.
The Barometer UCITS Fund ICAV prospectus for Switzerland, the Key Investor Information Documents, the Instrument of Incorporation, the annual and semi-annual report and further
information can be obtained free of charge from the representative in Switzerland or by visiting www.barometer.ie.
The representative in Switzerland is 1741 Fund Solutions Ltd., Burggraben 16, 9001 St. Gallen, Switzerland.
The Swiss paying agent in Switzerland is: Notenstein La Roche Bank Ltd., Bohl 17, 9004 St. Gallen, Switzerland. The place of jurisdiction is at the registered office of the representative
in Switzerland.
The document has been prepared for the use of the recipient as a qualified investor according to art. 10 para. 3, 3bis and 3ter of the Swiss Collective Investment Schemes Act. It does
not constitute an offer or an invitation by or on behalf of Barometer Management (Ireland) Limited or Barometer Capital Management Inc. to any person to buy or sell any security.
41
Barometer UCITS Fund ICAV Con t ac t Us
ISIN EUR IE00BYX3ZR54
ISIN USD IE00BYX3ZS61
Investor Relations:
Roy Scaini,
Director
Barometer Management (Ireland) Ltd.
rscaini@barometer.ie
+1 416 601-6888
Beat Guldimann,
Advisor European Distribution
Barometer Management (Ireland) Ltd.
bguldimann@barometer.ie
+1 647 295-2563
+41 79 521-7885
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