First State Global Listed Infrastructure Fund (Irish VCC)

Transcription

1 First State Global Listed Infrastructure Fund (Irish VCC) Quarterly Investment Report

2 Contents Portfolio Overview 1 Performance 2 Commentary 3 Portfolio Allocation and Stock Holdings 4 Risk Analysis 5 Disclaimer 6 Risk Factors This document is a financial promotion for the First State Global Listed Infrastructure Fund for professional clients only in the EEA and elsewhere where lawful. Investing involves certain risks including: The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back substantially less than the original amount invested. Currency risk: The Fund invests in assets which are denominated in other currencies; changes in exchange rates will affect the value of the Fund. Single sector risk: Investing in a single sector may offer the possibility of higher returns, but may involve a higher degree of risk compared to investments which spread investment risk through a variety of sectors. Share price movements may have a greater effect on the overall value of these funds. Concentration risk: The fund typically invests in a concentrated portfolio of investments and should a particular investment decline in value, this will have a pronounced effect on the overall value of the fund. Infrastructure risk: Companies in the infrastructure sector (utilities, transportation and energy industries) are subject to a variety of factors which may adversely affect their business or operations. Adverse developments within these industries may affect the value of the underlying securities of the Fund. Companies involved in these industries are subject to environmental considerations, taxes, government regulation, price and supply considerations and competition. Charges from capital: Fees and expenses are charged against the capital of the Fund. Deducting expenses from capital reduces the potential for capital growth and on any redemption Shareholders may not receive back the full amount invested. Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell. Reference to the names of any company is merely to explain the investment strategy and should not be construed as investment advice or a recommendation to invest in any of those companies. For a full description of the terms of investment and the risks please see the Prospectus and Key Investor Information Document. If you are in any doubt as to the suitability of our funds for your investment needs, please seek investment advice.

3 First State Global Listed Infrastructure Fund Portfolio Overview Investment objective and policy The Fund aims to achieve income and growth on your investment. The Fund invests at least 70% of its assets in listed shares of companies of any size that are involved in infrastructure around the world. The infrastructure sector includes utilities (e.g. water and electricity), highways and railways, airports services, marine ports and services, oil and gas storage and transportation. The Fund may invest up to 100% in companies of any size. The Fund may use derivatives with the aim of risk reduction or efficient management. Fund Information Fund Launch Date 27 June 2008 Fund Size (US$m) Benchmark FTSE Global Core Infrastructure 50/50 Index* Number Of Holdings 40 Fund Manager(s) Research Rating^ Peter Meany/Andrew Greenup Morningstar :Bronze * The benchmark changed from the UBS Global Infrastructure & Utilities Index to the above on 01/04/2015. The benchmark of the Fund changed from FTSE Global Core Infrastructure Gross to FTSE Global Core Infrastructure Net with effect from 1 July The performance of the Gross benchmark has been chain-linked to the Net benchmark. ^ This does not constitute an investment recommendation and is not indicative of future results. Methodology available on rating provider s website. Available Share Classes ISIN Sedol Share Class IE00B29SXK94 B29SXK9 First State Global Listed Infrastructure Fund USD Class I (Accumulation) IE00B29SXL02 B29SXL0 First State Global Listed Infrastructure Fund USD Class I (Distributing) IE00B29SXM19 B29SXM1 First State Global Listed Infrastructure Fund USD Class III (Accumulation) IE00BK8FXL82 BK8FXL8 First State Global Listed Infrastructure Fund USD Class VI (Accumulation) IE00BK8FXM99 BK8FXM9 First State Global Listed Infrastructure Fund USD Class VI (Distributing) IE00BYSJTY39 BYSJTY3 First State Global Listed Infrastructure Fund EUR Class I (Accumulation) IE00BYSJV039 BYSJV03 First State Global Listed Infrastructure Fund EUR Class VI (Accumulation) IE00BYSJTZ46 BYSJTZ4 First State Global Listed Infrastructure Fund GBP Class VI (Distributing) For further information Head of European & UK Wholesale Graham Fox +44 (0) graham.fox@firststate.co.uk Sales Director, Europe & Third Party Distributions Marc Bishop +44 (0) marc.bishop@firststate.co.uk Business Development Manager Scotland, North of England & Ireland Ross Stewart +44 (0) ross.stewart@firststate.co.uk Sales Director, South of England & Channel Islands Tom Burton +44 (0) tom.burton@firststate.co.uk Head of Client & Consultant Relations Chris Gower +44(0) chris.gower@firststate.co.uk Sales Director, Europe Eva von Sydow +44 (0) eva.vonsydow@firststate.co.uk David Gaschik +44 (0) david.gaschik@firststate.co.uk Senior Relationship Manager Hilary Inglis +44 (0) Hilary.Inglis@firststate.co.uk Head of Middle East & Africa Ali Karmali ali.karmali@firststate.ae Head of Institutional Business Development Frank Glennon +44(0) Frank.Glennon@firststate.co.uk 1 FIRST STATE GLOBAL LISTED INFRASTRUCTURE FUND (IRISH VCC) - QUARTERLY INVESTMENT REPORT 31 DECEMBER 2017

4 Performance Annual Performance (% in USD) to 31/12/17 31/12/16 31/12/15 31/12/14 31/12/13 First State Global Listed Infrastructure Fund FTSE Global Core Infrastructure 50/50 Index Cumulative Performance (% in USD) to Since Inception 10 yrs 5 yrs 3 yrs 1 yr YTD 6 mths 3 mths First State Global Listed Infrastructure Fund FTSE Global Core Infrastructure 50/50 Index Calendar Year Performance (% in USD) to 20% 18.0% 18.4% 18.0% 17.9% 15% 10% 12.5% 11.3% 13.4% 13.6% 5% 0% -5% -10% -5.0% -6.0% Fund return Benchmark return These figures refer to the past. Past performance is not a reliable indicator of future results. For investors based in countries with currencies other than USD, the return may increase or decrease as a result of currency fluctuations. Since inception performance figures have been calculated from 11 December All performance data for the First State Global Listed Infrastructure Fund Class III (Accumulation) USD as at. Source for fund - Lipper IM / First State Investments (UK) Limited. Performance data is calculated on a net basis by deducting fees incurred at fund level (e.g. the management and administration fee) and other costs charged to the fund (e.g. transaction and custody costs), save that it does not take account of initial charges or switching fees (if any). Income reinvested is included on a gross of tax basis. Source for benchmark - FTSE, income reinvested net of tax. 2 FIRST STATE GLOBAL LISTED INFRASTRUCTURE FUND (IRISH VCC) - QUARTERLY INVESTMENT REPORT 31 DECEMBER 2017

5 Commentary Market Review Global listed infrastructure continued to climb in the December quarter. A backdrop of positive sentiment and upbeat economic conditions helped higher beta sectors to outperform. Political and regulatory news was also a factor, lending support to US freight rail but weighing on UK utilities and Chinese ports. The Fund gained +0.6% over this period before fees, compared to a return of +1.7% from its benchmark index. Fund Activity The Fund bought shares in freight rail operator Canadian Pacific Railway. The company owns and operates a 12,400 mile rail network which connects business centres across Canada and extends into the US Midwest and Northeast regions; as well as accessing key ports on the continent's east and west coasts. It operates alongside larger peer Canadian National Railway as an effective duopoly in many markets. Canadian Pacific's market share had been under pressure as the company focused on operational improvements, resulting in stock price under-performance. The company's relatively appealing valuation multiple today, combined with indications that it may now have scope to recover market share (slipping customer service metrics at Canadian National) led us to buy. A position in Tower company SBA Communications was sold. Substantial outperformance this year, driven by investor enthusiasm for the tower sector's structural growth and improving earnings outlook, reduced mispricing and moved the stock lower within our value and quality stock ranking process. Outlook The Fund invests in a range of global listed infrastructure assets including toll roads, airports, ports, railroads, utilities, pipelines and mobile towers. These sectors share common characteristics, like barriers to entry and pricing power, which can provide investors with inflationprotected income and strong capital growth over the medium-term. The Fund offers a high conviction portfolio of quality infrastructure companies. Our team takes a long-term view and focuses on fundamental mispricing with sector and regional exposures that tend to be an outcome of bottom-up stock calls, and are often contrarian in style. Financial markets enter 2018 highly optimistic with global economic growth looking robust and US tax cuts boosting corporate earnings. We would caution that political developments may lead to volatility with general elections scheduled in Italy (March), Mexico (July) and Brazil (October); along with ongoing instability in the UK and Germany; and an unpredictable Trump-led US. With the gradual reduction in central bank stimulus and potential for higher inflation (tighter labour markets and higher energy prices), we would expect to see interest rates rise through the year, which may act as a headwind for investment returns across all asset classes. Within the global listed infrastructure asset class; earnings growth remains solid, balance sheets look robust, and dividends should grow faster than earnings. Global listed infrastructure remains well positioned to protect and grow capital through economic cycles owing to its defensive earnings growth and inflation pass-through characteristics. 3 FIRST STATE GLOBAL LISTED INFRASTRUCTURE FUND (IRISH VCC) - QUARTERLY INVESTMENT REPORT 31 DECEMBER 2017

6 Portfolio Allocation and Stock Holdings Ten Largest Holdings as at Stock Name Country Sector Portfolio Weight (%) Index Weight (%) National Grid plc UK Multi-Utilities Kinder Morgan Inc Class P USA Oil & Gas Storage & Transportation Transurban Group Stapled Deferred Australia Highways & Railtracks Dominion Energy Inc COM USA Multi-Utilities American Tower Corporation USA Specialized REITs NextEra Energy, Inc. USA Electric Utilities East Japan Railway Co Japan Railroads Enbridge Inc. Canada Oil & Gas Storage & Transportation Atlantia S.p.A Italy Highways & Railtracks Southern Company USA Electric Utilities Sector Breakdown Country Breakdown Electric Utilities 22.6% (26.4%*) Highways & Railtracks 18.8% (10.6%*) Oil & Gas Storage & Transportation 15.3% (12.9%*) Multi-Utilities 14.1% (13.6%*) Railroads 11.4% (8.8%*) Specialized REITs 6.1% (7.2%*) Gas Utilities 4.5% (4.1%*) Marine Ports & Services 2.0% (2.9%*) Airport Services 1.8% (9.4%*) Construction & Engineering 1.2% (0.0%*) Other 0.0% (4.1%*) Cash 2.1% (0.0%*) *Benchmark Weight Sector and Country classifications provided by Factset and First State Investments. USA 46.1% (48.7%*) UK 9.9% (3.1%*) Japan 8.6% (4.6%*) Canada 6.9% (10.3%*) Australia 5.9% (5.2%*) China 4.4% (2.2%*) Italy 3.9% (4.0%*) Brazil 3.0% (2.1%*) France 2.9% (1.4%*) Other 6.3% (18.3%*) Cash 2.1% (0.0%*) *Benchmark Weight Market Capitalisation Breakdown (USD) % to 500m 500m to 1bn 1bn to 2.5bn 2.5bn to 5bn 5bn to 10bn 10bn to 50bn 50bn to 100bn 100bn+ Portfolio Weight Benchmark Weight Data source: For illustration purposes only. Portfolio weights may not add up to 100% as cash holdings are excluded and full coverage of stocks is not always available. This information is calculated by First State Investments. 4 FIRST STATE GLOBAL LISTED INFRASTRUCTURE FUND (IRISH VCC) - QUARTERLY INVESTMENT REPORT 31 DECEMBER 2017

7 Risk Analysis Portfolio Risk Analysis - Ex-Post 3 Years Annualised to Risk Measure Value Risk Description Beta 1.01 Beta is a measure of volatility relative to the market. A beta of 1 would indicate that the fund tended to move in line with the market; a beta greater than 1 would indicate that the fund has been more volatile than the market; whereas a beta less than 1 would indicate that the fund has been less volatile than the market. Information Ratio 1.06 The fund's excess return divided by its tracking error. It is designed to assess a portfolio's performance relative to its level of benchmark risk. The higher the fund's information ratio, the more excess return it generates for each unit of tracking error. Portfolio Standard Deviation Benchmark Standard Deviation 9.86% A measure of how much the returns of the fund vary relative to the arithmetical average. The higher the fund's standard deviation, the more its returns tend to deviate from the mean. 9.59% A measure of how much the returns of the index vary relative to the arithmetical average. The higher the index's standard deviation, the more its returns tend to deviate from the mean. Tracking Error 1.95% The standard deviation of the difference between the fund's returns and those of the index. The higher the fund's tracking error, the more its performance relative to the benchmark may vary. Portfolio Risk Analysis - Ex-Ante at Risk Measure Value Risk Description Dividend Yield (Fund) 3.45% The annual dividend yield paid per share divided by the share price. This factor measure the value of company shares according to the stream of dividend income resulting from share ownership. Dividend Yield (Index) 3.11% The annual dividend yield paid per share divided by the share price. This factor measure the value of company shares according to the stream of dividend income resulting from share ownership. Price to Book (Fund) 2.11 The ratio of the company's book value (the sum of shareholders' equity plus accumulated retained earnings from the P & L account) to its share price. This factor has been one of the most successful measures of the intrinsic value of company shares. Price to Book (Index) 2.34 The ratio of the company's book value (the sum of shareholders' equity plus accumulated retained earnings from the P & L account) to its share price. This factor has been one of the most successful measures of the intrinsic value of company shares. Price to Earnings (Fund) Annual earnings (adjusted for amortizations of intangibles, extraordinary charges and credits) per share divided by the share price. This factor measures the worth of a company's ability to support each share with after tax earnings. Price to Earnings (Index) Annual earnings (adjusted for amortizations of intangibles, extraordinary charges and credits) per share divided by the share price. This factor measures the worth of a company's ability to support each share with after tax earnings. Data source: Ex-Post information is calculated by First State Investments, Ex-Ante information is provided by Style Research. 5 FIRST STATE GLOBAL LISTED INFRASTRUCTURE FUND (IRISH VCC) - QUARTERLY INVESTMENT REPORT 31 DECEMBER 2017

8 Disclaimer This document has been prepared for informational purposes only and is only intended to provide a summary of the subject matter covered and does not purport to be comprehensive. The views expressed are the views of the writer at the time of issue and may change over time. It does not constitute investment advice and/or a recommendation and should not be used as the basis of any investment decision. This document is not an offer document and does not constitute an offer or invitation or investment recommendation to distribute or purchase securities, shares, units or other interests or to enter into an investment agreement. No person should rely on the content and/or act on the basis of any material contained in this document. This document is confidential and must not be copied, reproduced, circulated or transmitted, in whole or in part, and in any form or by any means without our prior written consent. The information contained within this document has been obtained from sources that we believe to be reliable and accurate at the time of issue but no representation or warranty, express or implied, is made as to the fairness, accuracy, or completeness of the information. We do not accept any liability whatsoever for any loss arising directly or indirectly from any use of this information. References to "we" or "us" are references to First State Investments. In the UK, this document is issued by First State Investments (UK) Limited, which is authorised and regulated by the Financial Conduct Authority (registration number ). Registered office Finsbury Circus House, 15 Finsbury Circus, London, EC2M 7EB, number Outside the UK within the EEA, this document is issued by First State Investments International Limited which is authorised and regulated in the UK by the Financial Conduct Authority (registered number ). Registered office: 23 St. Andrew Square, Edinburgh, Midlothian, EH2 1BB, number SCO First State Global Umbrella Fund plc ('the Company') is an open-ended investment company with variable capital established under the laws of Ireland and regulated by the Central Bank of Ireland pursuant to the European Communities (Undertakings in Collective Investments in Transferable Securities) Regulations The Company is a scheme recognised in the United Kingdom under section 264 of the Financial Services and Markets Act, therefore is an authorised person and as such is regulated by the Financial Conduct Authority. Detailed information about the Company and its sub funds is contained in the Prospectus and Key Investor Information Documents which are available free of charge by writing to: Client Services, First State Investments (UK) Limited, Finsbury Circus House, 15 Finsbury Circus, London, EC2M 7EB; or by telephoning between 9am and 5pm Monday to Friday; or by visiting Telephone calls with First State Investments (UK) Limited may be recorded. First State Investments (UK) Limited and First State Investments International Limited are part of Colonial First State Asset Management ("CFSGAM") which is the consolidated asset management division of the Commonwealth Bank of Australia ABN CFSGAM includes a number of entities in different jurisdictions, operating in Australia as CFSGAM and as First State Investments elsewhere. The Commonwealth Bank of Australia ("Bank") and its subsidiaries do not guarantee the performance of the fund or the repayment of capital by the fund. Investments in the fund are not deposits or other liabilities of the Bank or its subsidiaries, and investment-type products are subject to investment risk including loss of income and capital invested. 6 FIRST STATE GLOBAL LISTED INFRASTRUCTURE FUND (IRISH VCC) - QUARTERLY INVESTMENT REPORT 31 DECEMBER 2017