AVIVA IRELAND. High Yield Equity Fund Richard Saldanha Fund Manager, Global Equities. 28 February 2018

Transcription

1 AVIVA IRELAND High Yield Equity Fund Richard Saldanha Fund Manager, Global Equities 28 February 2018 This document is for Professional Clients, institutional/qualified investors and Advisers only. It is not to be viewed by or used with retail clients

2 High Yield Equity Fund The case for High Yield Equity Income The compounding effect of dividends drives long-term equity returns A global approach offers a broader opportunity set and increases the ability to diversify risk We invest in companies we know and understand, aiming to deliver a portfolio with less volatility and lower drawdowns Source : Aviva Investors Client outcomes not guaranteed Aviva: Public 2

3 % The importance of dividends Dividend is primary driver of equity returns Compounding effect of dividend yield dominates returns over long-term ( Q2 2016) UK US France Germany Australia Canada Japan Dividend Yield Dividend growth Multiple expansion Total annualised returns Source: SG Cross Asset Research/Equity Quant, MSCI, Thomson Financial Datastream as at 30 June 2016 Warning : Past performance is not a reliable guide to future performance. Aviva: Public 3

4 Focused on client outcomes Aviva Investors Global Equities Growth Income Global Equity Endurance Global Equity Income AIMS Target Income Target outcome Capital growth Income & capital growth High income & capital growth Investment horizon 5-10 years 3-5 years 3-5 years Current dividend yield 1.9% 3.0% 3.8% No of holdings Strategy AUM 834m 667m 771m Fund Manager Giles Parkinson Richard Saldanha Richard Saldanha Source: Aviva Investors as at 31 December Outcome oriented equity solutions to meet a range of investor needs Warning : Past performance is not a reliable guide to future performance. Aviva: Public 4

5 Aviva Ireland High Yield Equity Fund Portfolio overview A long-only concentrated portfolio of global equities that aims to provide a sustainable and growing income with capital growth over the long-term Investment objective Benchmark To provide annualised income yield 1.25x of MSCI World, with potential for capital growth MSCI World Investment universe Liquid global equities Typically >$5bn market cap Number of holdings stocks Typically ~40 Max. position size 5% Typically 2-4% Sector & country weight Investment horizon +/- 10% if index sector weight <10% +/- 5% if index sector weight >10% 3-5 years Driven by individual stock selection Source: Aviva Investors as at 28 February Aviva: Public 5

6 INVESTMENT PROCESS

7 Company characteristics Key criteria for investing High and sustainable level of dividends and free cash flow High and sustainable returns on capital Strong and defendable margins across the business cycle Efficient allocation of capital over the long-term Attractive income and capital upside Quality and income bias with attractive valuation Source: Aviva Investors as at 28 February Aviva: Public 7

8 Investment process Overview Differentiated philosophy Shapes the investment process Fundamental analysis In-depth research & risk assessment Cross-team collaboration (ESG) Portfolio monitoring Ongoing appraisal Independent risk oversight Idea generation Focus on cash flow & returns Driven by client outcomes Portfolio construction Concentrated portfolios built around client outcomes Focused, diversified with informed risk taking Focused, robust, repeatable Source: Aviva Investors as at 28 February Aviva: Public 8

9 FUND PERFORMANCE AND POSITIONING

10 High Yield Equity Fund Performance High Yield Equity Fund TR (Net) High Yield Equity Fund TR (Gross) MSCI World TR (EUR) month (%) 3m (%) YTD (%) 1yr (%) 3 yrs (p.a.) (%) 5 yrs (p.a.) (%) Since Inception (p.a.) (%) High Yield Equity Fund SC A (Net) 1 month % 3m % YTD % 1 year % 3 years p.a. % 5 years p.a. % Since Inception (p.a.) % High Yield Equity Fund (gross) MSCI World TR (EUR) Source: Aviva Investors as at 28 February Performance shown for SCA, Net of fees, net of income reinvested in EUR. Gross performance shows underlying fund performance. Inception date: 31 December Warning : Past performance is not a reliable guide to future performance. Aviva: Public 10

11 High Yield Equity Fund Portfolio construction GICS Sector diversification Geographic diversification Top ten holdings % of portfolio Information Technology 21% JPMorgan Chase 4.37 Home Depot 4.12 Financials Industrials Health Care Consumer Staples 15% 11% 10% 20% 2.2% 3.2% 3.0% 5.4% 9.2% 11.0% 53.9% Broadcom 3.95 Cisco 3.88 Texas Instruments 3.87 McDonalds 3.68 Microsoft 3.30 Boeing 3.28 Consumer Discretionary 8% 12.8% Ahold Delhaize 3.16 Danske Bank 3.14 Materials 6% Energy Telecommunication Services 4% 6% United States Netherlands United Kingdom France Germany Denmark Canada Switzerland Source: Aviva Investors/Aladdin as at 28 February Warning : Past performance is not a reliable guide to future performance. Dividend yield % High Yield Equity Fund 3.0 MSCI World 2.2 Aviva: Public 11

12 High Yield Equity Fund Summary - Diversified global equity exposure. - Attractive total returns. - Targets high and growing income from dividends. - High conviction, long-term investing. - Transparent, not a black-box fund. - Thematic exposure to mega-trends. - Targets outperformance over the long term. Source: Lipper Hindsight as at 28 February Euro total return performance of Aviva Ireland High Yield Equity SC A, net of fees, net income reinvested in EUR. Warning : Past performance is not a reliable guide to future performance. Aviva: Public 12

13 TEAM & BIOGRAPHIES

14 Aviva Investors Equities Harnessing company-wide expertise Equities 67.7 billion AuM UK Pan-European & Eurozone Global Emerging Markets & Asia Regional (US, Japan, Poland) (5) (6) (2) (4) (8) Global Corporate Research Analysts (28) Global Responsible Investment (9) Investment Risk (14) Strategy & Economics (9) Execution & FX (6) Dealing Fixed Income Real Estate Other billion AuM 35.4 billion AuM 34.3 billion AuM Source: Aviva Investors as at 31 December Other = mixed assets, balanced funds and structured products managed by Aviva Investors which cannot be allocated to a specific asset class. Aviva: Public 14

15 High Yield Equity Fund Biographies Richard Saldanha Fund Manager, Global Equities Giles Parkinson Fund Manager, Global Equities Joined investment industry: 2006 Joined Aviva Investors: 2006 Joined investment industry: 2006 Joined Aviva Investors: 2015 Main responsibilities Richard is responsible for the management of our Global Equity fund range and is lead fund manager on our Global Equity Income Strategy Main responsibilities Giles is responsible for the fund management of our Global Equity strategies. Experience and qualifications Richard joined Aviva Investors in 2006 and has been instrumental in developing the firm s derivatives based products and strategies. Before joining Aviva Investors, Richard worked for Punter Southall & Co in an actuarial internship role. Richard holds a MChem in Chemistry from the University of Oxford. He also holds the UKSIP Investment Management Certificate. Experience and qualifications Prior to joining Aviva Investors, Giles held positions as an analyst at Artemis Investment Management and before that at Newton Investment Management. Giles holds a BA in History from Durham University and an MPhil in Historical Studies from Cambridge University. He is also a CFA charterholder. Aviva: Public 15

16 High Yield Equity Fund Biographies Chris Murphy Fund Manager, UK Equities Ed Kevis Fund Manager, European Equities Joined investment industry: 1988 Joined Aviva Investors: 2006 Joined investment industry: 2008 Joined Aviva Investors: 2013 Main responsibilities Chris is the lead fund manager for the Aviva Investors UK Equity Income and Aviva Investors UK Equity Funds. Main responsibilities Ed is responsible for the fund management of our European Equity strategies. Experience and qualifications Prior to joining Aviva Investors, Chris worked as a fund manager at Framlington Investment Management, managing first income and then growth portfolios, concentrating on retail funds. Before this, Chris was a UK equity analyst at James Capel and a graduate UK equity analyst at Lehman Bros. Chris holds a BSc (Hons) in Physics from University College, Cardiff and holds the IIMR (Institute of Investment Management Research) qualification. Experience and qualifications Prior to joining Aviva Investors Ed spent 5 years at Lloyds Bank, progressing through their Business Specialist Graduate scheme into the Business Support Unit Investment team in the role of Senior Analyst specialising in the portfolio management of distressed equity stakes and later, transaction management of debtfor-equity swap transactions. Ed holds a BA (Hons) in Finance, Accounting and Management from the University of Nottingham, and an Applied Diploma in Corporate Banking from the IFS School of Finance. Ed is a CFA Charterholder. Aviva: Public 16

17 High Yield Equity Fund Biographies Will Ballard Head of Emerging Market and Asia Pacific Equities Ed Wiltshire Fund Manager- Emerging Market & Asia Pacific equities Joined investment industry: 2000 Joined Aviva Investors: 2009 Joined investment industry: 1994 Joined Aviva Investors: 2001 Main responsibilities Will is responsible for the fund management of our Emerging Market and Asia Pacific equity strategies. Main responsibilities Portfolio manager responsible for Emerging Market and Asia Pacific equity strategies. Experience and qualifications Prior to joining Aviva Investors, Will worked for Royal Bank of Canada in their Global Arbitrage Trading division. Before this, he was a fund manager at Henderson Global Investors on their Pan European Equity Multi-strategy team. Will holds an MA (Hons) from Cambridge University. He also holds the UKSIP Investment Management Certificate and is a CFA charter holder. Experience and qualifications Ed joined Aviva Investors from State Street Global Advisors where he was as a passive equity Portfolio Manager and quant research assistant. Before this, he worked for PanAgora Asset Management. Ed holds an MA (Hons) in Mathematics from Oxford University and an MSc from Essex University. He also holds the UKSIP Investment Management Certificate Aviva: Public 17

18 High Yield Equity Fund Key risks Investment Risk & Currency Risk The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency exchange rates. Investors may not get back the original amount invested. Illiquid Securities Risk Certain assets held in the Fund could, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile. Aviva: Public 18

19 High Yield Equity Fund Important information Warning: Past performance is not a reliable guide to future performance. Warning: The value of your investment may go down as well as up. Warning: If you invest in this fund you may lose some or all of the money you invest. Warning: These funds may be affected by changes in currency exchange rates. Warning: A deferral period may apply to withdrawals and/or switches from certain funds. Please refer to your product documentation for further details. Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited ( Aviva Investors ) as at 28 February Unless stated otherwise any views and opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. Portfolio holdings are subject to change at any time without notice and information about specific securities should not be construed as a recommendation to buy or sell any securities. The underlying holdings of the fund should be considered in order to establish an appropriate minimum holding period. Aviva Ireland High Yield Equity Fund is a unit linked fund owned by Aviva Life & Pensions UK. Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is authorised by the Prudential Regulation Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is also regulated in the UK: by the Prudential Regulation Authority for prudential rules and, to a limited extent, by the Financial Conduct Authority for applicable UK conduct rules. Registered Branch Office in Ireland (No ) at One Park Place, Hatch Street, Dublin 2. Tel Web Registered in England ( ) at 2 Rougier Street, York, YO90 1UU. The Investment Manager is Aviva Investors Global Services Limited, regulated and authorised by the Financial Conduct Authority. The content of this document has been produced by Aviva Investors Global Services Limited, the investment manager appointed by Aviva Life & Pensions Ireland to manage the fund. Issued by Aviva Investors Global Services Limited, registered in England No Registered Office: 1 Undershaft, London, EC3P 3DQ. Authorised and regulated in the UK by the Financial Conduct Authority and a member of the Investment Association. Contact us at Aviva Investors Global Services Limited, 1 Undershaft, London, EC3P 3DQ. INEQ18/024 Aviva: Public 19