Pioneer Funds North American Basic Value

Transcription

1 Pioneer Funds North American Basic Value Investment Conference, Boston, March 2010 James P. Cullen President & Lead Portfolio Manager, Schafer Cullen Capital Management, Inc. For Broker/Dealer Use Only and Not to be Distributed to the Public

2 Pioneer Funds North American Basic Value Cullen Capital Management, LLC Firm Highlights Founded: 1983 Headquarters: New York, New York Assets Under Management: US$11 Billion as of 31 December 2009 Institutional Client Base: Corporate Clients Endowments, Foundations & Non-Profits Institutions & Pensions Taft Hartley Clients Sub Advised SMA Programmes Source: Shafer Cullen Capital Management, Inc., 2009 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 2

3 Pioneer Funds North American Basic Value Strong Team Based Approach Investment Team James P. Cullen President and Portfolio Manager (45 years) John C. Gould Executive Vice President and Portfolio Manager (22 years) Brooks H. Cullen Assistant Portfolio Manager (19 years) Stephen O Neil Analyst (25 years) Carl Gardiner Analyst (19 years) Rahul Sharma Analyst (10 years) Jennifer Chang Analyst (9 years) Mike Kelly Analyst (5 years) Pravir Singh Analyst (5 years) Erik Schafer Analyst (4 years) Portfolio Management team has an average of 25 years experience Portfolio Manager Jim Cullen has over 40 years of investment experience Supported by a team of seven equity analysts For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 3

4 The Potential Offered by a Disciplined Value Approach For illustrative purposes only. The performance data quoted represents past performance, which is no guarantee of future results. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad US stockmarket. Indices are unmanaged and their returns assume reinvestment of dividends and, unlike mutual fund returns, do not reflect any fees or expenses associated with a mutual fund. It is not possible to invest directly in an index. The Top 20% and Bottom 20% by P/E/P/B represents holdings within the S&P 500 Index. Source: S&P Corp / FactSet Research / Cullen Capital Management, LLC as at 31 December Years S&P 500 Compound Annualised Returns Top 20% by P/E Bottom 20% by P/E Bottom 20% by P/B Returns do not represent the performance of any Pioneer Investments fund and are not indicative of the performance of value funds For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 4

5 Pioneer Funds North American Basic Value Investment Philosophy: The Case for Disciplined Value Funds Period S&P 500 Bottom 20% by P/E Period S&P 500 Bottom 20% by P/E % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % Rolling 5-Year Performance: Bottom 20% of the S&P 500 Index by P/E For illustrative purposes only. Past performance is no guarantee of future results. The Standard & Poor's 500 Stock Index (the S&P 500 Index) is a commonly used measure of the broad US stockmarket. Indices are unmanaged and their returns assume reinvestment of dividends and, unlike mutual fund returns, do not reflect any fees or expenses associated with a mutual fund. It is not possible to invest directly in an index. Source: S&P as of 31 December For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 5

6 10-Year US Treasury Yield 18 5-Year RISING RATE ENVIRONMENT FALLING RATE ENVIRONMENT ( ) 16% Periods ( ) 16 Bottom 20% by P/E Annualised Returns 5-Year Periods Bottom 20% by P/E Annualised Returns % % % % Yeild % % 4% % % % % % % % % 0 Dec 62 Dec 66 Dec 70 Dec 74 Dec 78 Dec 82 Dec 86 Dec 90 Dec 94 Dec 98 Dec % % Average Return Average Return for S&P % 7.13% Average Return Average Return for S&P % 13.10% The performance data quoted represents past performance, which is no guarantee of future results. Source of charts: Cullen Capital Management, LLC; S&P; end date is 31 December 2002 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 6

7 S&P 500 Index Stock Prices and Recessions Price (S&P 500) 1,500 1, ,500 1, Blue lines denote recessionary periods The performance data quoted represents past performance, which is no guarantee of future results. Year Year Annualised Returns Starting One Year Before the Recession Began (5-Year Periods / Low P/E Discipline) Recession Period 5 Year Return (Year before recession started) Annualised Return (For 5-year periods) % % % % % Source of charts: S&P 500 / Cullen Capital Management LLC, 30 September 2009 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 7

8 S&P 500 Index Lowest vs. Highest P/E Stocks ( ) Past performance is no guarantee of future results. Flat = less than 1% difference Source: S&P Corp/FactSet Research/SCCM, 31 December 2009 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 8

9 Pioneer Funds North American Basic Value Disciplined Value Investment Process Screening For Value Price/Earnings Price/Book Price/Cash Flow Debt/Equity Return of Capital Dividend Yield Qualitative Analysis Seeking Catalysts New Markets New Products New Management Franchise Value Asset Value Insider Buying Global Marco Shifts For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 9

10 Pioneer Funds North American Basic Value Investment Process Approximately holdings Portfolio Construction Full position approximately 3% Top 10 holdings typically represent 30% 35% Up to 30% international exposure No more than 15% in any one industry For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 10

11 Pioneer Funds North American Basic Value Characteristics as of 31 December 2009 Industrials Consumer Staples Information Technology Health Care Financials Telecommunication Services Energy Consumer Discretionary Materials Utilites Sector Weights 21.1% 10.3% 15.5% 11.4% 12.7% 19.9% 11.9% 12.6% 11.0% 14.3% 7.3% 3.2% 5.8% 11.5% Portfolio % 5.2% S&P 500 % 9.6% 2.3% 3.6% 0.0% 3.7% 0% 5% 10% 15% 20% 25% Top Ten Holdings Sector Portfolio % S&P 500 Index % Disney Consumer Discretionary Covidien Health Care Kimberly Clark Consumer Staples Microsoft Information Technology Unilever Consumer Staples United Technologies Industrials M Industrials Oracle Information Technology JP Morgan Financials Verizon Telecomm. Services Characteristics Portfolio S&P 500 Index Weighted Avg. Market Cap (billion) US$73.4B US$80.9B Median Market Cap (billion) US$45.6B US$8.9B Price/Book Ratio 2.7x 3.6x Average P/E Ratio (FY2) 13.3x 15.9x The performance data quoted represents past performance, which is no guarantee of future results. The Portfolio is actively managed and current holdings and characteristics may be different. The holdings listed should not be considered recommendations to buy or sell any particular security listed. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad US stockmarket. Indices are unmanaged and their returns assume reinvestment of dividends and, unlike mutual fund returns, do not reflect any fees or expenses associated with a mutual fund. It is not possible to invest directly in an index. Price-to-Earnings Ratio is the price of a stock divided by its earnings per share. Price-to-Book Ratio is the ratio of a stock's price to its book value per share. Source: Pioneer Investments as at 31 December 2009 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 11

12 Pioneer Funds North American Basic Value Trailing Returns Fund % Benchmark % Relative % 1 Month Months Year Years Ann Years Ann Source: Pioneer Investments as at 31 December Performance figures are in USD and have been converted from the Sub-Fund s base currency, the euro. Pioneer Cullen Value Fund, a US registered investment company (inception date of Class A Shares 03/07/00), returns are used for performance purposes until inception date on 27/02/06 of the Unit Class A USD of Pioneer Funds North American Basic Value, a Sub-Fund of Pioneer Funds, a fonds commun de placement (the "Fund") with several separate Sub-Funds established under the laws of the Grand Duchy of Luxembourg. The data of Pioneer Cullen Value Fund is not indicative of the performance of Pioneer Funds North American Basic Value, and viceversa. Pioneer Funds North American Basic Value and Pioneer Cullen Value Fund have the same portfolio manager and similar investment objectives and policies. However, the funds are domiciled in different jurisdictions and are subject to different regulatory regimes, which affect the manner in which they are managed. Investment results will vary. There can be no assurances that they will achieve similar results due to different inception dates, fund sizes, portfolio holdings and other factors. Pioneer Funds North American Basic Value (the "Sub-Fund") may not be offered for sale In the United States of America, or in any of its territories or possessions subject to its jurisdiction or to/for the benefit of a United States Person, whereas Pioneer Cullen Value Fund only has limited availability outside the United States. For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 12

13 The low quality nature of the rally off the March lows has been consistent with market behaviour one sees at the end of a recession. S&P 500 Cos. WITH Earnings Relative NO Earnings 31-Dec-2008 to 28-Jan-2010 (Daily) 31-Dec-2008=100; Local S&P 500 Cos. PAYING Dividend Relative NOT Paying Dividend 31-Dec-2008 to 28-Jan-2010 (Daily) 31-Dec-2008=100; Local Companies WITH earnings are underperforming Companies PAYING a dividend are underperforming Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Source: Strategas RP Source: Strategas RP Source: Strategas RP / S&P 500 / FactSet Research Systems, 28 January 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 13

14 The typical pattern of recessions going back to 1972 shows dividend paying stocks outperforming as the recession takes hold followed by a 6-month period of underperforming on the initial rally in the economy and market. Dividend payers then start to outperform as the economy and markets broaden out. S&P 500 Divided Payers/Non Payers Ratio Around Bull Market Start Dates Bull Market Start Date Monthly Data Starting in Month Before Month After Source: Ned Davis Research, Inc. / S&P 500, 2009 Source: Ned Davis Research, Inc. / S&P 500, 2009 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 14

15 We think this is a great proxy for the risk taking that had taken place in the initial stages of the rally. This appears to be reversing. 250% % 09 Mar to 31 Aug 31 Aug to 31 Dec 200% 150% 100% 50% 37.04% 14.05% 13.61% 0% < $5 share > $50 share < $5 share > $50 share Top 1000 US Stocks by Market Cap Source: Thomson/Cullen Capital Management, LLC Research, 31 December 2009 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 15

16 % % U.S. Cash Mountain* (Percentage of Wilshire 5000) * Includes money-market funds and savings deposits. BCA Research Source: BCA Research /Wilshire 5000, 31 December 2009 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 16

17 Important Information Unless otherwise stated all information contained in this document is from Cullen Capital Management, LLC and is as at 31/12/2009. Pioneer Funds North American Basic Value is a sub-fund (the Sub-Fund ) of Pioneer Funds (the Fund ), a fonds commun de placement with several separate sub-funds established under the laws of the Grand Duchy of Luxembourg. Pioneer Investment Management, Inc., the Sub-Fund s Investment Manager, has engaged, subject to its supervision, Cullen Capital Management, LLC to act as the Sub-Investment Manager to the Sub-Fund. The Sub-Investment Manager is regulated by the Securities and Exchange Commission. Past performance does not guarantee and is not indicative of future results. Unless otherwise stated, all views expressed are those of Pioneer Investments. These views are subject to change at any time based on market and other conditions and there can be no assurances that countries, markets or sectors will perform as expected. Investments involve certain risks, including political and currency risks. Investment return and principal value may go down as well as up and could result in the loss of all capital invested. More recent returns may be different than those shown. Please contact your local sales representative for more current performance results. This material is not a prospectus and does not constitute an offer to buy or a solicitation to sell any units of the Fund or any services, by or to anyone in any jurisdiction in which such offer or solicitation would be unlawful or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. For additional information on the Fund, a free prospectus should be requested from Pioneer Global Investments Limited ( PGIL ), 1 George s Quay Plaza, George s Quay, Dublin 2, Ireland. Call Fax This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any United States person (being residents and citizens of the United States or partnerships or corporations organized under United States laws). The Fund has not been registered in the United States under the Investment Company Act of 1940 and units of the Fund are not registered in the United States under the Securities Act of This document is not intended for and no reliance can be placed on this document by retail clients, to whom the document should not be provided. The content of this document is approved by PGIL. In the UK, it is directed at professional clients and not at retail clients and it is approved for distribution by Pioneer Global Investments Limited (London Branch), 123 Buckingham Palace Road, London SW1W 9SL, authorised by the Financial Regulator in Ireland and regulated by the Financial Services Authority for the conduct of UK business. The Fund is an unregulated collective investment scheme under the UK Financial Services and Markets Act 2000 and therefore does not carry the protection provided by the UK regulatory system. Pioneer Funds Distributor, Inc., 60 State Street, Boston, MA ( PFD ), a U.S.-registered broker-dealer, provides marketing services in connection with the distribution of Pioneer Investments products. PFD markets these products to financial intermediaries, both within and outside of the U.S. (in jurisdictions where permitted to do so) for sale to clients who are not United States persons. Pioneer Investments is a trading name of the Pioneer Global Asset Management S.p.A. group of companies. Date of First Use: 10 March 2010 For Broker/Dealer Use Only and Not to be Distributed to the Public March 2010 Page 17