PRISM CHARTBOOK USD. July Platform Investment Treasury

Transcription

1 PRISM CHARTBOOK Platform Investment Treasury

2 Proudly shaping financial futures through innovation, integrity and excellence.

3 Contents Strategy Overview 4 Investment Commentary 5 Horizon 1 6 Horizon 1+ 7 Horizon 2 8 Horizon 2+ 9 Horizon 3 10 Horizon Horizon 4 12 Horizon 5 13 Horizon 6 14 Horizon 8 15 Horizon Enhanced Growth 17 Master Investment Strategy 18 Defined Risk-Return Profiles 20 3

4 Strategy overview PRISM offers a full spectrum of defined risk-return profiles, with performance driven from a single optimal investment strategy. This Master Investment Strategy is a highly diversified investment portfolio that aims to optimise returns per unit of risk. Each PRISM profile has a defined mean return and a defined volatility which, together with the performance of the Master Investment Strategy, are used to calculate returns in each period. These defined risk-return profiles are published in advance, providing investors and their advisors clarity as to the expected performance characteristics of their investment. Some profiles enjoy an element of capital protection over their stated investment time horizon, giving greater peace of mind to investors with less risk appetite. PRISM offers the following characteristics: A simple defined return investment profile The investment objective is to achieve an optimal balance between risk and return that maximises expected returns and minimises the downside risk over the stated time horizon A full spectrum of time horizons Low fees High levels of diversification of underlying investment exposure and risk

5 Investment Commentary Global equity markets were supported by a strong start to what is looking to be another exceptional earnings season. US equity markets were also buoyed by the US economy recording their strongest pace of growth since European equity markets were bolstered by an EU US agreement to work together towards reducing tariffs. US and European equities contributed two thirds to the strategy s overall performance. Takeover interest in Arconic following strong results boosted its share price by near 25%. Our stake in Deutsche Bank came good as the stock jumped over 2 with earnings and revenue exceeding expectations. A number of Roche s new medicines are gaining traction boosting the stock by over 1. Master strategy allocations Equity Bonds High Yield Property Commodity Alternative Cash Our infrastructure contributed a third to the strategy s overall performance. Megacap tech stocks Netflix, Twitter and Facebook had disappointing results with the latter suffering the biggest one-day loss of market value in history. The strategy does not hold any of these stocks. Another significant contributor to performance was John Laing Infrastructure following a bid approach which saw the stock gain near 2 in the month. The bid also sparked a return to premium for rival social infrastructure fund HICL which gained over 1. Our infrastructure contributed a third to the strategy s overall performance. Expectations of an interest rate hike and continuing Brexit uncertainty stalled UK equities and Property. 5

6 Horizon 1 Strategy The PRISM Horizon 1 Strategy aims to provide a compelling and complete investment with a rolling 1 year time horizon. 2 15% 1 Probability Bands 95% 7 H1 Defined risk-return profile Defined Return: 2.25% Defined Volatility: 0.5 Capital Protections Investment Time Horizon: 1 year Over Full Time Horizon: 10 5% -5% Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 0.6% - 6 months 0.9% - 1 year 1.9% 0.3% 3 years % 5 years 6.5% 0.5% 10 years 12.7% 0.5% Annualised 2.1% 0.7%

7 Horizon 1+ Strategy The PRISM Horizon 1+ Strategy aims to provide a compelling and complete investment with a rolling 18 month time horizon. Defined risk-return profile Defined Return: 2.9 Defined Volatility: 1.2 Capital Protections Investment Time Horizon: 1.5 years Over Full Time Horizon: 10 25% 2 15% Probability Bands 95% 7 H1+ 1 5% -5% Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months months 1.3% - 1 year 2.7% 0.8% 3 years 7.6% 1.1% 5 years 9.8% 1.1% 10 years 20.4% 1.1% Annualised 2.8% 1.2% 7

8 Horizon 2 Strategy The PRISM Horizon 2 Strategy aims to provide a compelling and complete investment with a rolling 2 year time horizon. Defined risk-return profile Defined Return: 3.75% Defined Volatility: 2.2 Capital Protections Investment Time Horizon: 2 years Over Full Time Horizon: 99% 3 2 Probability Bands 95% 7 H2 1-1 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months months 0.8% - 1 year 2.3% 1.4% 3 years 9.8% 2. 5 years 12.9% 1.9% 10 years 30.3% 2.2% Annualised 3.6% 2.2%

9 Horizon 2+ Strategy The PRISM Horizon 2+ Strategy aims to provide a compelling and complete investment with a rolling 2.5 year time horizon. Defined risk-return profile Defined Return: 4.8 Defined Volatility: 3. Capital Protections Investment Time Horizon: 2.5 years Over Full Time Horizon: 97% Probability Bands 95% 7 H Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year months 1.3% - 6 months 0.7% - 1 year 2.6% 2.2% 3 years 13.2% 3.1% - 5 years 17.3% 2.9% 10 years 43.1% 3.4% Confidence Bands: 7 95% Annualised 4.6% 3.3% 9

10 Horizon 3 Strategy The PRISM Horizon 3 Strategy aims to provide a compelling and complete investment with a rolling 3 year time horizon. Defined risk-return profile Defined Return: 5.8 Defined Volatility: 4.6 Capital Protections Investment Time Horizon: 3 years Over Full Time Horizon: 95% 9 65% Probability Bands 95% 7 H3 15% -1 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 1.5% - 6 months 0.5% - 1 year 2.8% 2.9% 3 years 16.4% 4.2% 5 years 21.5% years 56.5% 4.6% Annualised 5.5% 4.5%

11 Horizon 3+ Strategy The PRISM Horizon 3+ Strategy aims to provide a compelling and complete investment with a rolling 3.5 year time horizon. Defined risk-return profile Defined Return: 6.8 Defined Volatility: 6.0 Capital Protections Investment Time Horizon: 3.5 years Over Full Time Horizon: None 125% 10 75% Probability Bands 95% 7 H % -25% Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 1.8% - 6 months 0.3% - 1 year 2.8% 3.8% 3 years 19.9% 5.5% 5 years 25.9% 5.2% 10 years 71.8% 6. Annualised 6.4% 5.9% 11

12 Horizon 4 Strategy The PRISM Horizon 4 Strategy aims to provide a compelling and complete investment with a rolling 4 year time horizon. Defined risk-return profile Defined Return: 7.75% Defined Volatility: 7.25% Capital Protections Investment Time Horizon: 4 years Over Full Time Horizon: None % 10 75% Probability Bands 95% 7 H4 5 25% -25% Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months months 0.1% - 1 year 2.9% 4.6% 3 years 23.1% 6.7% 5 years 29.8% 6.3% 10 years 86.1% 7.2% Annualised 7.3% 7.1%

13 Horizon 5 Strategy The PRISM Horizon 5 Strategy aims to provide a compelling and complete investment with a rolling 5 year time horizon. Defined risk-return profile Defined Return: 8.75% Defined Volatility: 8.75% Capital Protections Investment Time Horizon: 5 years Over Full Time Horizon: None % % 10 Probability Bands 95% 7 H5 75% 5 25% -25% Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 2.3% - 6 months -0.2% - 1 year 2.8% 5.6% 3 years 26.4% 8. 5 years 33.8% 7.6% 10 years 102.1% 8.7% Annualised 8.1% 8.5% 13

14 Horizon 6 Strategy The PRISM Horizon 6 Strategy aims to provide a compelling and complete investment with a rolling 6 year time horizon. Defined risk-return profile Defined Return: 9.6 Defined Volatility: 10.25% Capital Protections Investment Time Horizon: 6 years Over Full Time Horizon: None 225% % % Probability Bands 95% 7 H % 5 25% -25% Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 2.5% - 6 months -0.6% - 1 year 2.7% 6.5% 3 years 29.5% 9.4% 5 years 37.4% 8.9% 10 years 117.7% 10.2% Annualised 8.9% 10.

15 Horizon 8 Strategy The PRISM Horizon 8 Strategy aims to provide a compelling and complete investment with a rolling 8 year time horizon. Defined risk-return profile Defined Return: 10.5 Defined Volatility: 12.0 Capital Protections Investment Time Horizon: 8 years Over Full Time Horizon: None % % % Probability Bands 95% 7 H % 5 25% -25% Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 2.7% - 6 months -1.1% - 1 year 2.4% 7.6% 3 years 32.8% years 40.9% 10.4% 10 years 134.2% 11.9% Annualised 9.7% 11.7% 15

16 Horizon 10 Strategy The PRISM Horizon 10 Strategy aims to provide a compelling and complete investment with a rolling 10 year time horizon. Defined risk-return profile Defined Return: 12. Defined Volatility: 16.0 Capital Protections Investment Time Horizon: 10 years Over Full Time Horizon: None Probability Bands 95% 7 H Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 3.2% - 6 months -2.4% - 1 year 1.4% 10.1% 3 years 38.7% 14.7% 5 years 45.7% 13.9% 10 years 163.5% 15.9% Annualised % 5

17 Enhanced Growth Strategy The PRISM Enhanced Growth Strategy aims to provide a compelling and complete investment with a true horizon that is in excess of 12 years. Defined risk-return profile Defined Return: 14.3 Defined Volatility: 20.0 Capital Protections Investment Time Horizon: 12+ years Over Full Time Horizon: None Probability Bands 95% 7 Enh Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Expected return distribution Over 1 year Confidence Bands: % months 3.6% - 6 months -3.7% - 1 year 0.1% 12.6% 3 years 42.8% 18.4% 5 years % 10 years 179.5% 19.9% Annualised 11.6% 19.5% 5 17

18 Master Investment Strategy 3 months months year 2.8% 4.6% 3 years % 5 years 29.9% 6.5% 10 years 87.9% 7.5% Annualised 7.4% 7.4% Expected risk-return profile Expected Return: 7.46% Expected Volatility: 7.0 Investment Time Horizon: 5 years The expected return and volatility of the Master Investment Strategy may fluctuate over time in response to changing market conditions & outlook Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 MIS H1 H1+ H2 H2+ H3 H3+ H4 H5 H6 H8 H10 Enh capital-iom.com t +44 (0) e info@capital-iom.com

19 Master Investment Strategy Strategy Overview The Master Investment Strategy pursues a strategy of maximum diversification, investing across a wide range of asset classes including equities, bonds, property and alternatives, in order to maximise returns per unit of risk. Key Data Currency: US Dollars Minimum Initial Investment: $15,000 Dealing Frequency: Weekly Dealing Cut-Off: Tuesday at 12:30pm Initial Charge: Nil Exit Charge: Nil Management Charge: 0.25%* Issuer/Counterparty: Capital Financial Markets Limited Investment Manager & Custodian: Capital International Limited It is not necessary for the strategy to target aggressive returns, but to achieve an optimal balance between risk and return. The underlying assets of the Master Investment Strategy are carefully selected to create a highly diversified portfolio largely consisting of individual securities, although investment trusts, exchange traded funds, actively managed funds and other investments may also be used. Asset allocation Equity Bonds High Yield Property Commodity Alternative Cash

20 Defined Risk-Return Profiles 1st Each PRISM profile has a defined mean return and a defined volatility which, together with the performance of the Master Investment Strategy, are used to calculate returns in each period. These defined risk-return profiles are published in advance, providing investors and their advisors clarity as to the expected performance characteristics of their investment. The PRISM profiles and their expected performance characteristics may change over time in response to the changing economic and investment environment. The latest profiles are published on our website and in the monthly Chartbook. Defined Defined Volatility Risk Level Expected (over 1 year) Low* 0 High** Horizon % Horizon Horizon % Horizon Horizon Horizon Horizon % 7.25% 4.5 Horizon % 8.75% 5.5 Horizon % 6.4 Horizon Horizon Enhanced Growth % 0.6% -0.6% -1.9% -3.2% % -8.4% -10.5% % 3.2% 5.3% 8.1% 11.5% 14.8% 18.6% % 29.7% % 53.5% Relative to UK equities fixed level of 10 This table details data from the PRISM Strategy. Other currencies are also available. Investment Time Horizons PRISM has no lock-in periods or exit penalties, however, each profile is structured to deliver an optimal balance between risk and return over a given investment time horizon. The time horizon is important because the impact of short term volatility on a strategy s expected return diminishes over time. Profiles are designed to maximise the expected return and minimise the effect of negative risks. Profiles with short investment time horizons therefore have low defined volatility levels in order to minimise the potential for shortterm losses. For profiles with longer time horizons it is preferable to target higher average returns and to accept a higher level of short term volatility. NOTES PRISM defined risk-return profiles may change over time in response to the changing economic and investment environment. Volatility figures are valid from the 28th February 2018.

21 Capital Protection Lower risk profiles enjoy an element of capital protection over their stated investment time horizon, giving greater peace of mind to clients with less risk appetite. profile. For example, the protection level for the Horizon 1 profile is set at 10 over its 1 year time horizon, whereas the protection level for the Horizon 3 is set at 95% over its full 3 year time horizon. Capital protections apply over the full investment time horizon of the respective Capital Protected over Time Horizon Investment Time Horizon Expected (over full time horizon) Low* Average High** months 1.3% 2.3% 3.2% months 1.5% 4.4% 7.4% 99% 2 years 1.5% 7.6% 14.2% 97% 2.5 years 1.6% 12.4% 24.4% 95% 3 years 2.1% 18.4% 37.4% n/a 3.5 years 2.3% 25.9% 54.9% n/a 4 years 3.4% 34.8% 75.8% n/a 5 years 6.7% 52.1% 116.8% n/a 6 years 10.5% 73.3% 172. n/a 8 years 21.6% 122.3% 306.2% n/a 10 years 33.4% 221.9% 676.7% n/a 12 years % 397.2% % * 2.5% probability of expected returns below this range ** 2.5% probability of expected returns above this range Expected Return Characteristics We cannot predict the future, but we can describe the expected return characteristics of each PRISM profile. The table above sets out the expected range of returns over each profiles specified time horizon and over one year. There remains a 2.5% probability of expected returns below these ranges. Expected return characteristics are provided to enable investors to better understand the nature of their investment and how it is expected to perform over time; however, the ranges are provided as guidance only. Actual performance over time will depend on a number of factors including; actual performance of the Master Investment Strategy relative to expectations; any future changes to the defined risk-return profiles; ongoing availability of each profile; impact of any performance fees; and the impact of capital protections. Investors should always seek professional advice when considering the suitability of any investment. 21

22 Isle of Man Head Office Capital International Group Capital House Circular Road Douglas Isle of Man IM1 1AG +44 (0) South Africa Office Capital International SA Great Westerford 240 Main Road Rondebosch 7700 South Africa +27 (0)

23 Platform Investment Treasury This document has been prepared for information purposes only and does not constitute an offer or an invitation, by or on behalf of any company within the Capital International Group of companies or any associated company, to buy or sell any security. Nor does it form a constituent part of any contract that may be entered into between us. Opinions constitute our judgement as of this date and are subject to change. The information contained herein is believed to be correct, but its accuracy cannot be guaranteed. Any reference to past performance is not necessarily a guide to the future. The price of a security may go down as well as up and its value may be adversely affected by currency fluctuations. The company, its clients and officers may have a position in, or engage in transactions in any of the securities mentioned. PRISM GBP and Strategies were launched in June 2014 and April 2018 respectively. Historical performance is calculated by reference to the actual investment performance of Fusion Alpha modelled into the PRISM product structure. PRISM reserves the right to levy a performance fee on the Master Investment Strategy on performance in excess of the defined return profiles. Full details of PRISM are contained in this Brochure, Terms of Business and associated literature which is available upon request. Regulated activities are carried out on behalf of Capital International Group by its licensed member companies. Capital International Limited, Capital Treasury Services Limited and Capital Financial Markets Limited are all licensed by the Isle of Man Financial Services Authority. Capital International Limited is a member of the London Stock Exchange. Registered Address: Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG. CILSA Investments (PTY) Ltd (FSP No ) and CILSA Solutions (PTY) Ltd (FSP No. 6650), t/a Capital International SA are licenced by the Financial Sector Conduct Authority in South Africa as Financial Service Providers. Registered Address: Office NG101A, Great Westerford, 240 Main Road, Rondebosch 7700, South Africa. All subsidiary companies across both jurisdictions are represented under the Capital International Group brand.

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