Panorama Trust
PICTET GLOBAL EMERGING MARKETS FUND
Supplement to Prospectus dated April 1, 1996
The following is added to the section entitled "Risk
Factors" which begins on page 7:
RUSSIAN SECURITIES
Although there are serious risks associated with investing
in any emerging market securities, the Fund's investment in
Russian securities is subject to a variety of emerging market
risks which individually and collectively raise substantial
concerns. These risks, many of which also exist in other
emerging markets, include the following:
Political and Economic Risks. There is no history of
stability in this market and no guarantee of future stability.
The emerging dynamic nature of the Russian political system
leaves it more vulnerable to break down in the face of economic
pressures or popular unrest. The economic infrastructure is
weak, and the country maintains a high level of external and
internal debt. Tax regulations are ambiguous and unclear, and
there is a risk of imposition of arbitrary or onerous taxes due
to the lack of an economically rational tax regime.
Commercial and Credit Risks. Banks and other financial
systems are not well developed or regulated and as a result tend
to be untested and have low credit ratings. Organized crime and
corruption are a feature of the business environment, and
bankruptcy and insolvency are commonplace as businesses are
learning how to cope in new conditions. Cash, securities and
other investment transactions are subject to a high risk of
broker, counterparty and other third party default. The risk of
defaulting issuers is also high.
Liquidity Risks. Foreign investment is affected by
restrictions in terms of repatriation and convertibility of the
currency. The ruble is only convertible internally, and the
value of investments may be affected by fluctuations in available
currency rates and exchange control regulations. The
repatriation of profits may be restricted in some cases. Due to
the undeveloped nature of the banking system, considerable delays
may occur in transferring funds, converting rubles into other
currencies and remitting funds out of Russia.
Legal and Regulatory Risks. Russia's legal system is
evolving and is not as developed as that of a western country.
It is based on a civil code with few judicial precedents. The
regulatory environment is defined by the civil code, legislative
laws, presidential decrees, and ministry resolutions
("Regulations") which are promulgated at separate times and are
not necessarily consistent. The issuance of Regulations does not
always keep pace with market developments, thereby creating
ambiguities and inconsistencies. Regulations governing
securities investment may not exist or may be interpreted and
applied in an arbitrary or inconsistent manner. There may be a
risk of conflict between the rules and regulations of the local,
regional, and national governments. The concept of share
ownership rights and controls may not be in place or be
enforceable. Registration of share ownership in an issuer's
stock register may be delayed, altered or non-existent, making
proof of share ownership difficult to prove. The independence of
the courts from economic, political, or national influence is
basically untested and the courts and judges are not experienced
in business and corporate law. Foreign investors cannot be
guaranteed redress in a court of law for a breach of local laws,
regulations or contracts.
The securities market regulatory body, the Federal
Commission on the Capital Market, was established in 1994 and is
responsible for overseeing market participants, including
registrars. However, the monitoring of and enforcement of the
obligations of registrar companies is difficult due to geographic
dispersion and inconsistent interpretation and application of
regulations.
January 2, 1997
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