Announcements related to the calculation of the indices

Pictet has decided to discontinue the Pictet bond indices as of 1 January 2004 and has replaced the indices in the LPP index family with the respective Swiss Bond Index (SBI).

In 1984, Pictet launched its now widely followed family of indices for the Swiss bond market as part of moves to establish a binding legal framework for compulsory occupational pension provision. In the meantime, changing market conditions have resulted in the requirement for the development of more extensive indices.

These changing conditions have also prompted us to review the existing Pictet Bond Indices. However, following an in-depth analysis of the bond indices we have concluded that the necessary adjustments to the existing Pictet Bond Indices would not produce any real added value in comparison with the now widely used SBI index family, that has been in existence since 1998.

To avoid duplication, Pictet has therefore decided to discontinue the Pictet bond indices from 1 January 2004 onward and replace the indices in the LPP index family with the SBI Total index.

Many Advantages
The SBI index family has many advantages over the existing indices:

• Transparency in terms of composition, adjustment and calculation - The indices are accessible via the Swiss Exchange website and are adjusted on the last trading day of each month.
• Representative investment universe based on market capitalization - The SBI Total currently comprises over 600 bonds compared with around 180 bonds in the Pictet Total. More information about Swiss Bond Index
• Less price distortion - The limited liquidity of the bonds represented in the Pictet Total index meant that sizeable price distortions could not be ruled out.