CIBC Wood Gundy ICS Program

Transcription

1 CIBC Wood Gundy ICS Program Franklin Bissett Investment Management Review Les E. Stelmach, CFA Senior Vice President, Portfolio Manager Franklin Bissett Investment Management Ryan Crowther, CFA Vice President, Portfolio Manager Franklin Bissett Investment Management April 8, 2015 CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. Franklin Bissett Investment Management, part of Franklin Templeton Investments Corp. Fiduciary Trust Company of Canada is a wholly-owned subsidiary of Franklin Templeton Corp. Source for data and information provided by Franklin Templeton Investments, as of December 31, 2014, unless otherwise noted.

2 Topics for Discussion Franklin Templeton and Franklin Bissett Investment Platform Overview A Legacy of Expertise in the Canadian Capital Markets A Leader in Managed Account Programs Unique Service Coverage Franklin Bissett Portfolio Manager Structure CIBC Wood Gundy ICS Program Mandate Dividend Income 12 Performance Performance History 18 Appendix 20 Investment Strategy A Distinctive Approach to the GARP Style 10 2

3 Franklin Templeton and Franklin Bissett

4 Broad Range of Investment Solutions from Specialized Portfolio Teams Franklin Templeton Investments Total Combined Assets Under Management (AUM): CAD$1.0 Trillion Institutional AUM: CAD$249.9 Billion Single Business Development, Relationship Management and Consultant Relations Platform FIXED INCOME EQUITY MULTI-ASSET Franklin Templeton Fixed Income Group Franklin Local Asset Management Templeton Emerging Markets Group Templeton Global Equity Group ALTERNATIVES Real Assets Private Equity Source: Franklin Templeton Investments, as of December 31, 2014 unless otherwise noted, based on latest available data. Total combined Assets Under Management (Total AUM) combines the U.S. and non-u.s. AUM of the investment management subsidiaries of the parent company, Franklin Resources, Inc. [NYSE: BEN], a global investment organization operating as Franklin Templeton Investments (FTI). Total and platform AUM includes discretionary and advisory accounts, including pooled investment vehicles, separate accounts and other vehicles, as well as some accounts that may not be eligible for inclusion in composites as defined by the firm's policies. Total and platform AUM may also include advisory accounts with or without trading authority. In addition, assets for which certain FTI advisers provide limited asset allocation advisory services, and assets that are not allocated to FTI products are not included in the AUM figures shown. Please note that the table above does not show certain FTI affiliates whose AUM is included in the total combined AUM reflected above. Franklin Templeton Solutions (FT Solutions) AUM as of December 31, FT Solutions invests in various investment platforms advised by a number of investment advisory entities within FTI. Platform AUM reported for FT Solutions therefore includes certain AUM separately reported under each utilized investment platform. Total AUM also includes assets managed by certain FTI advisers that do not form part of the selected investment platforms shown. As a result, the combined platform AUMs may not equal Total AUM and may be calculated and reported separately for regulatory or other purposes under each investment adviser. Each local asset manager may be considered as an entity affiliated with or associated to FTI by virtue of being a direct or indirect wholly-owned subsidiary of Franklin Resources, Inc. (FRI), an entity or joint venture in which FRI owns a partial interest, which may be a minority interest, or a third party asset management company to which investment advisory services have been delegated by an FTI adviser. Please refer to the Important Disclosures slide for additional information. 1. In 2014, Franklin Multi-Asset Strategies was renamed Franklin Templeton Solutions. 2. Franklin Bissett Investment Management, part of Franklin Templeton Investments Corp. 4 Franklin Mutual Series Franklin Equity Group Franklin Templeton Solutions 1 Franklin Real Asset Advisors Est and onward Global Fixed Income Global, Regional and Emerging and Global and Global, U.S. and Global, U.S. and Multi-Asset Solutions Global Private International Fixed Single Country Fixed Frontier Markets Regional Equity Non-U.S. Equity Non-U.S. Equity Global Tactical Real Estate Income, Equity and Equity Income Asset Allocation Global Listed Real Hybrid (includes Regional Fixed Income Franklin Bissett Custom/Advisory Estate Securities Focus Infrastructure Emerging Markets Investment Solutions - Alternative Management) 2 & Traditional Style Multi-Sector, Single Sector Multi- and Single Sector Multi-Style Core Value Core Value Deep Value Growth, Value, Core/Hybrid Sector Hedge Fund Portfolios (Multi- & Single Strategy) & Replication Multi-Style, Multi- Region, Hedged Global Private Infrastructure and Real Resources Multi-Sector, Multi-Region Darby Private Equity Emerging Markets Private Equity and Mezzanine Finance Multi-Sector AUM CAD$404.5 Billion CAD$63.6 Billion CAD$47.9 Billion CAD$140.4 Billion CAD$85.9 Billion CAD$236.2 Billion CAD$48.7 Billion CAD$5.7 Billion CAD$1.7 Billion

5 Franklin Bissett Investment Management A Legacy of Expertise in the Canadian Capital Markets CALGARY Founded in 1982 and joined Franklin Templeton Investments in 2000 CAD $21.5 billion in assets under management as of December 31, 2014 Fundamental equity, quantitative equity, fixed income and balanced mandates Diverse equity strategies to meet different client investment goals 5

6 A Leader in Managed Account Programs Franklin Bissett Enters SMA Market 1994 Franklin Bissett Enters UMA Market 2005 Franklin Bissett AUM: $21.5 billion SMA/UMA: $3.7 billion 2014 Franklin Bissett has managed portfolios in these programs for over 20 years Franklin Templeton remains committed to this area of long-term growth in Canada Franklin Bissett Investment Management assets as of December 31,

7 Unique Service Coverage Three Distinct Support Levels for Advisors DEALER RESOURCES Head Office Team LOCAL PRESENCE Franklin Templeton Sales Team SPECIALIZED SUPPORT Franklin Bissett Portfolio Management Team Helping Advisors 1. Open New Accounts 2. Gain Additional Contributions 3. Retain Clients 7

8 Franklin Bissett Portfolio Manager Structure Managed Accounts CIBC Wood Gundy Strategy Franklin Bissett Dividend Income SMA Co-Lead Managers Les Stelmach, Ryan Crowther For additional information on specific responsibilities and professional biographies, please see the Appendix. 8

9 Investment Strategy

10 Equity Investing at Franklin Bissett A Distinctive Approach to the GARP Style Growth at a Reasonable Price discipline across all fundamental equity investment strategies An exacting definition of the G in GARP Growth defined as sustainable profits Looking for strong, consistent earnings and cash flow growth Focused on financially stable companies Portfolio companies often are engaged in shareholder-friendly actions such as share buybacks and well-executed dividend plans Bottom-up security selection process Estimated intrinsic values exceed current share prices 10

11 The Portfolio

12 CIBC Wood Gundy ICS Program Mandate Dividend Income Blended portfolio seeking capital appreciation and tax-efficient income 12

13 Strategy Overview Franklin Bissett Dividend Income SMA Suited for investors seeking: Capital appreciation Lower-than-benchmark volatility Attractive portfolio yield Each investment must pay moderate but consistent income Emphasis is placed on a growing income stream over time Canadian Equities Leveraging our in-house fundamental research U.S. Equities Deep market for high quality companies with dividend growth Preferred share exposure enhances income and reduces overall portfolio volatility 13

14 Asset Mix Franklin Bissett Dividend Income SMA As of December 31, 2014 Portfolio Yield: 4.30% Canadian Dividend Equity 69.95% U.S. Dividend Equity 20.65% Cash 3.14% Preferred Shares 6.26% Asset mix may not total 100% due to rounding. Information is based on a Franklin Bissett Dividend Income SMA model portfolio, representative of the investment strategy. This model portfolio is indicative of the allocation that would be used for new accounts being opened and is updated as of the end of each calendar quarter. The allocation of existing accounts may differ from the allocation used for new accounts due to differences in the timing of purchases and sales, general market conditions and other factors specific to each existing account due to client considerations. Performance is presented in Canadian dollars, assumes reinvestment of dividends and other earnings and is gross of fees. Taking into account fees would result in lower rates of return. Returns represent past performance. Past performance does not guarantee future results and may not be repeated. 14

15 Sector Allocation and Top 10 Holdings Franklin Bissett Dividend Income SMA Canadian Equity Portion of the Portfolio As of December 31, 2014 Sector Allocation 1 Portfolio (%) S&P/TSX Composite (%) Financials Energy Industrials Utilities Consumer Discretionary Materials Consumer Staples Telecommunication Services Health Care Information Technology Total Canadian Equity Yield Top 10 Holdings 2 Weight (%) CIBC 3.94 Power Financial 3.66 Toronto-Dominion Bank 3.61 Bank of Nova Scotia 3.35 Thomson Reuters 3.34 Bank of Montreal 3.31 Royal Bank of Canada 3.28 Enbridge 3.17 IGM Financial 2.92 Enbridge Income Fund 2.78 Total Number of Canadian 42 Dividend Equity Positions Sector allocation may not total 100% due to rounding. 1. Sector allocation is represented as a percentage of asset class. 2. Top ten weight is represented as a percentage of entire portfolio excluding cash. Securities shown are top ten within the asset class. Information is based on a Franklin Bissett Dividend Income SMA model portfolio, representative of the investment strategy. This model portfolio is indicative of the allocation that would be used for new accounts being opened and is updated as of the end of each calendar quarter. The allocation of existing accounts may differ from the allocation used for new accounts due to differences in the timing of purchases and sales, general market conditions and other factors specific to each existing account due to client considerations. Performance is presented in Canadian dollars, assumes reinvestment of dividends and other earnings and is gross of fees. Taking into account fees would result in lower rates of return. Returns represent past performance. Past performance does not guarantee future results and may not be repeated. 15

16 Sector Allocation and Top 10 Holdings Franklin Bissett Dividend Income SMA U.S. Equity Portion of the Portfolio As of December 31, 2014 Sector Allocation 1 Portfolio (%) S&P 500 Index (%) Consumer Staples Health Care Information Technology Financials Energy Industrials Utilities Consumer Discretionary Telecommunication Services Materials Total U.S. Equity Yield Top 10 Holdings 2 Weight (%) Intel 1.66 Johnson & Johnson 1.62 Kraft Foods 1.49 General Electric 1.48 Microsoft 1.44 Duke Energy 1.42 Merck 1.37 Coca-Cola 1.31 Wells Fargo 1.29 McDonald s 1.26 Total Number of U.S. 16 Dividend Equity Positions Sector allocation may not total 100% due to rounding. 1. Sector allocation is represented as a percentage of asset class. 2. Top ten weight is represented as a percentage of entire portfolio excluding cash. Securities shown are top ten within the asset class. Information is based on a Franklin Bissett Dividend Income SMA model portfolio, representative of the investment strategy. This model portfolio is indicative of the allocation that would be used for new accounts being opened and is updated as of the end of each calendar quarter. The allocation of existing accounts may differ from the allocation used for new accounts due to differences in the timing of purchases and sales, general market conditions and other factors specific to each existing account due to client considerations. Performance is presented in Canadian dollars, assumes reinvestment of dividends and other earnings and is gross of fees. Taking into account fees would result in lower rates of return. Returns represent past performance. Past performance does not guarantee future results and may not be repeated. 16

17 Portfolio Activity Franklin Bissett Dividend Income SMA (September 30, 2014 December 31, 2014) New Purchases: Added to: Eliminated: Trimmed: Canadian National Railway WSP Global Peyto Exploration & Development Bonterra Energy Labrador Iron Ore Royalty Baytex Energy Freehold Royalties Mullen Group Enbridge Income Fund Horizon North Logistics Western Energy Services Northern Blizzard Resources Canyon Services Group BCE Sun Life Financial TELUS Morneau Shepell TransCanada Thomson Reuters Fortis Toronto-Dominion Bank 17

18 Performance

19 Performance (Gross of Fees) Franklin Bissett Dividend Income SMA As of December 31, 2014 CALENDAR YEAR RETURNS Dividend Income (%) Benchmark 1 (%) HISTORICAL PERFORMANCE 3 Months 1 Year 3 Years* 5 Years* 10 Years* Dividend Income (%) Benchmark 1 (%) The benchmark is a combination of the following indices: 25% S&P 500 Index, 60% S&P/TSX Composite Index, 15% S&P/TSX Preferred Share Index. From 7/1/2007 to 9/30/2014, the benchmark was composed of 25% S&P 500 Index, 60% S&P/TSX Composite Index, 15% BMO Nesbitt Burns 50 Preferred Shares Index (NB50 PSI). Prior to 6/30/2007, the benchmark was composed of 25% S&P 500 Index, 50% S&P/TSX Composite Index, 25% BMO Nesbitt Burns 50 Preferred Shares Index (NB50 PSI). *Annualized. FOR ILLUSTRATIVE AND DISCUSSION PURPOSES ONLY. THE RETURNS SHOWN HEREIN ARE THOSE OF THE FRANKLIN BISSETT DIVIDEND INCOME SMA MODEL PORTFOLIO (the MODEL PORTFOLIO ) FOR THE PERIOD INDICATED, WHICH REPRESENTS CLIENT ACCOUNT(S) THAT FOLLOW A SIMILAR INVESTMENT STRATEGY AS THE MODEL PORTFOLIO, UTILIZING THE SAME RESEARCH. Performance information presented herein was obtained from third party sources. Accordingly, we do not represent that it is accurate or complete, or that it should be relied upon as such. Actual client returns may differ for a variety of reasons including, but not limited to, differences in: portfolio size, percentages held in each security, the timing of purchases and sales, price per security, fees and expenses. These differences may result in returns that may vary from those presented. Performance is presented in Canadian dollars, assumes reinvestment of dividends and other earnings and is gross of fees. Taking into account fees would result in lower rates of return. Returns represent past performance. Past performance does not guarantee future results and may not be repeated. 19

20 Appendix

21 Franklin Bissett Equity Group: Years of Experience and Responsibilities Name Industry Since Firm Since Responsibilities Garey Aitken, CFA, MBA Chief Investment Officer Tim Caulfield, CFA VP, Director Equity Research Leslie Lundquist, CFA SVP, Portfolio Management Les Stelmach, CFA SVP, Portfolio Management Ryan Crowther, CFA VP, Portfolio Management Ralph Lindenblatt, CFA SVP, Portfolio Management Richard Fortin, CFA VP, Portfolio Management Jason Hornett, CFA VP, Portfolio Management Andrew Buntain, CFA VP, Institutional Portfolio Manager Izabel Flis Research Analyst Jayson Moss, CFA Research Analyst Mike Richmond, CFA Research Analyst Neil Forster, CFA, MBA Research Analyst 1993 February, 1998 Chief Investment Officer Portfolio Management: Canadian Equity Strategies 1999 January, 2007 Portfolio Management: Canadian Equity Strategies Research: Financials 1992 May, 1992 Portfolio Management: High Dividend Strategies Research: Real Estate 1999 January, 2006 Portfolio Management: Dividend & High Dividend Strategies Research: Energy 2002 February, 2008 Portfolio Management: Dividend Strategies Research: Materials 1998 January, 2001 Portfolio Management: Small/Micro Cap Strategies Research: Small/Mid Cap across all sectors 1996 January, 2009 Portfolio Management: Small/Micro Cap Strategies Research: Small/Mid Cap across all sectors 1997 November, 1997 Portfolio Management: Quantitative Strategies 1995 May, 2007 Communication of FBIM process, philosophy and strategies to internal and external constituencies 2001 January, 2001 Research: Pipelines and Infrastructure, Retailing, Cable, Broadcasting, Consumer Staples, Telecommunication Services, Utilities 2004 November, 2011 Research: Consumer Discretionary, Industrials, Health Care, Information Technology 2001 August, 2013 Research: Energy Equipment & Services, Special Situations 2006 March, 2014 Research: Small/Mid Cap across all sectors CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. 21

22 Franklin Bissett Equity Group: Years of Experience and Responsibilities (continued) Name Industry Since Firm Since Responsibilities Chris Lankester Investment Operations Analyst Mitchell McCartney Portfolio Assistant Shelly Wilson Executive Assistant Lydia Pinto Admin. Clerk 2000 November, 2000 Investment Operations 2011 May, 2011 Investment Operations 2000 February, 2000 Support Portfolio Management Team 2013 May, 2013 Administrative Duties 22

23 Sector Research Coverage Canadian Fundamental Equity Strategies Energy Materials Industrials Pipelines, Infrastructure Equipment & Services Les Stelmach Izabel Flis Mike Richmond Ryan Crowther Jayson Moss Our investors benefit from a time-tested investment process predicated on extensive fundamental research and valuation work. SECTOR Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecommunication Services SUB-GROUP Retailing, Cable, Broadcasting Real Estate ANALYST COVERAGE Jayson Moss Izabel Flis Izabel Flis Jayson Moss Tim Caulfield Leslie Lundquist Jayson Moss Izabel Flis -Garey Aitken, CFA Chief Investment Officer Franklin Bissett Investment Management Utilities Izabel Flis Special Situations Mike Richmond Ralph Lindenblatt Various Sectors Small/Micro Cap Richard Fortin Neil Forster Additional Resources Leveraging the Franklin Templeton Platform Risk Analysis Equity Trading Legal Marketing and Distribution 23

24 Biography Les E. Stelmach, CFA Senior Vice President, Portfolio Manager Franklin Bissett Investment Management Calgary, Alberta, Canada Les Stelmach is a senior vice president and portfolio manager at Franklin Bissett Investment Management, part of Franklin Templeton Investments Corp. He is co-manager of Franklin Bissett Canadian High Dividend Fund (2009), Franklin Bissett Energy Corporate Class (2011), Franklin Bissett Canadian Dividend Fund (2012) and Franklin Bissett Dividend Income Fund (2012). In addition to his portfolio management responsibilities, he provides research coverage of the energy sector for various Franklin Bissett equity mandates. Past duties have included responsibility for research coverage for various high yield equity securities, including equities within the healthcare, industrial, and utility sectors. In 2006, Mr. Stelmach joined Franklin Bissett as an income trust analyst; and in 2009 he was named vice president and portfolio manager. In 2012, Mr. Stelmach was named a TopGun Investment Mind by Brendan Wood International, based upon nominations submitted by Canada s leading sell-side analysts and sales professionals in the Brendan Wood Panel. Prior to joining Franklin Bissett, Mr. Stelmach was employed by BMO Nesbitt Burns (now BMO Capital Markets) for six years, most recently as a vice president and research analyst specializing in the royalty and income trust sector. During his time there, BMO Nesbitt Burns income trust research team was twice awarded an all-star ranking by the Brendan Wood International survey of institutional investors. Mr. Stelmach holds a bachelor of commerce degree (finance, with distinction) from the University of Alberta (1999). He earned his Chartered Financial Analyst (CFA) designation in CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. 24

25 Biography Ryan Crowther, CFA Vice President, Portfolio Manager Franklin Bissett Investment Management Calgary, Alberta, Canada Ryan Crowther is a vice president, portfolio manager at Franklin Bissett Investment Management and has been with the organization since Mr. Crowther shares co-lead manager responsibilities of the Franklin Bissett Canadian Dividend Strategies (2011), including Franklin Bissett Dividend Income Fund (2011), and Franklin Bissett Canadian Dividend Fund (2011). Mr. Crowther's analyst responsibilities include coverage of the materials sector. Mr. Crowther joined Franklin Bissett in 2008 as an equity analyst and was appointed to his current position in June His previous research responsibilities have included equity research coverage for the materials, energy infrastructure, utilities and retail sectors. Prior to joining Franklin Bissett, Mr. Crowther was a research associate and analyst at an investment boutique from 2002 to 2007, with coverage of companies in the industrials and materials sectors, among others. From 1999 to 2002, Mr. Crowther played a business development role in a Vancouver-based Internet Services Provider, and was a founding partner of a domain registration company. Mr. Crowther is a graduate of the University of British Columbia (bachelor of commerce). Mr. Crowther earned his Chartered Financial Analyst (CFA) designation in CFA and Chartered Financial Analyst are trademarks owned by CFA Institute. 25

26 Important Disclosures 2015 Franklin Templeton Investments Corp. All rights reserved. Indexes are unmanaged and one cannot invest directly in an index. Additional Information for Investment Platform Overview Slide: Franklin Equity Group, a unit of Franklin, combines the expertise of the Franklin Advisers, Inc., and Fiduciary Global Advisors equity teams (with origin dating back to 1947 and 1931, respectively). Franklin Templeton Fixed Income Group, a unit of Franklin, combines the expertise of the Franklin Advisers, Inc., and Fiduciary Trust Company International fixed income teams (originating in 1970 and 1973, respectively). Franklin Real Asset Advisors originated in 1984 as the global real estate team of Fiduciary Trust Company International. Franklin Templeton Solutions (formerly Franklin Templeton Multi-Asset Strategies prior to December 31, 2013) is a global investment management group dedicated to multi-strategy solutions and is comprised of individuals representing various registered investment advisory entity subsidiaries of Franklin Resources, Inc., a global investment organization operating as Franklin Templeton Investments (FTI). Certain individuals advise Franklin Templeton Solutions (FT Solutions) mandates through K2 Advisors L.L.C. ( K2 ), an FTI adviser that forms part of an investment group founded in 1994 through existing advisory entities or their predecessors. FT Solutions originated in 2007 to combine the research and oversight of the multi-strategy investment solutions offered by FTI. Franklin Templeton Investments acquired a majority interest in K2 Advisors Holdings, LLC on November 1, Effective June 30, 2014, Mutual Series, Franklin Templeton Local Asset Management and Franklin Templeton Real Asset Advisors were renamed Franklin Mutual Series, Franklin Local Asset Management and Franklin Real Asset Advisors, respectively. General: The information presented herein is for illustrative and discussion purposes only. Information presented is based on representative/model portfolio indicative of the mandate being presented and considered reliable at the present time; however, we do not represent that it is accurate or complete, or that it should be relied upon as such. Returns represent past performance. Past performance does not guarantee future results and may not be repeated. Speculation or stated beliefs about future events, such as market and economic conditions, company or security performance, upcoming product offerings or other projections represent the beliefs of the speaker and do not necessarily represent the views of Franklin Templeton Investments Corp. General business, market, economic and political conditions could cause actual results to differ materially from what the speaker presently anticipates or projects. Actual client results and accounts may vary due to differences related to specific mandates. 26

27 Franklin Templeton Investments Gain From Our Perspective For over six decades, individuals and institutions around the world have viewed Franklin Templeton Investments as a trusted partner in asset management. We leverage the expertise of multiple, independent investment teams to deliver truly specialized expertise across a wide range of styles and asset classes, from traditional to alternative strategies and multi-asset solutions. Our investment professionals are on the ground across the globe, spotting investment ideas and potential risks firsthand. Collectively, they allow us to offer clients a unique investment perspective, shaped by local expertise, global context and a long-term investment horizon. Franklin Templeton Investments Corp Yonge Street, Suite 900, Toronto, ON M2N 0A7 Client Services Toll-free: Fax: Sales Team Toll-free: Fax: Founding Member of The Canadian Coalition for Good Governance Canadian offices: CALGARY MONTREAL TORONTO U.S. offices: FT. LAUDERDALE FORT LEE LOS ANGELES MIAMI NEW YORK CITY NORWALK RANCHO CORDOVA SALT LAKE CITY SAN MATEO SHORT HILLS ST. PETERSBURG WASHINGTON D.C. WILMINGTON International offices: ABU DHABI AMSTERDAM BEIJING BRUSSELS BUENOS AIRES CAPE TOWN CARACAS CHENNAI DUBAI DUBLIN EDINBURGH FRANKFURT GENEVA HONG KONG HYDERABAD ISTANBUL JOHANNESBURG LONDON LUXEMBOURG MADRID MELBOURNE MEXICO CITY MILAN MOSCOW MUMBAI NASSAU PARIS POZNAN RIO DE JANEIRO SAO PAULO SEOUL SHANGHAI SINGAPORE STOCKHOLM SYDNEY TAIPEI TOKYO VIENNA WARSAW ZURICH NYSE: BEN 2015 Franklin Templeton Investments Corp. All rights reserved.