M&G Global Basics Fund

Transcription

1 M&G Global Basics Fund Randeep Somel, Fund Manager June 2014

2 Fund facts M&G Global Basics Fund Inception: 17 November 2000 Anteilsklasse Euro A Acc Euro A Inc ISIN GB00B56H1S45 GB00B96BHM03 Fund manager: Fund size: Benchmark: Avg. holding period: Randeep Somel 3.8 billion FTSE Global Basics Composite Index 3-5 year 2 Source: M&G, 30 April The M&G Global Basics Fund changed its name and objective in November The fund s benchmark comprises all subsectors of the FTSE World Index except media, IT, telecommunications, financials and healthcare

3 The power of long-term investing, in euros M&G Global Basics Fund 300% 250% 200% Annualised growth rates since launch M&G Global Basics Fund* 6.5% FTSE Global Basics Composite Index** 4.5% Global Equity Sector average *** 1.0% MSCI AC World Index 1.1% 150% 100% 50% 0% M&G Global Basics Fund FTSE Global Basics Composite Index It s all about common sense and patience Mstar Global Equity Sector average MSCI AC World Index *17 November This is the date that the fund changed its name and objective **The fund s benchmark comprises all subsectors of the FTSE World Index except media, IT, telecommunications, financials and healthcare ***The Global Equity Sector combines the following six Morningstar sectors; Morningstar Global-Large Cap Blend Equity sector; Morningstar Global-Large Cap Value Equity sector; Morningstar Global-Large Cap Growth Equity sector; Morningstar Global Small-Cap Equity sector; Morningstar Global Flex-Cap Equity sector and Morningstar Global Equity Income Sector. 3 Source: Morningstar. Inc., Global Equity Sector, Pan-European database, 30 April 2014, euro A class shares, net income reinvested price to price

4 Randeep Somel Biography In 2013 Randeep Somel became fund manager of M&G Global Basics Fund and M&G Managed Growth Fund He was appointed co-fund manager on the M&G Managed Growth fund in 2012 and Vanguard Precious Metals & Mining fund in 2013 In 2010 he became deputy fund manager on both the M&G funds Randeep joined M&G in 2005 on the M&G Equities team 4

5 Agenda Global Basics investing Emerging markets Where we are finding value The consequences of growth 5

6 Core values We believe in A simple, long-only investment approach Return-on-capital drives performance Strong corporate governance Constructive company engagement Strict valuation discipline Focusing on the underlying investor 6 Consistency, transparency, integrity, honesty and fiduciary responsibility

7 Economic development Investment themes Fund exposures today PRESENT: 59% Consumer goods/ services Industrials Health Care /lifestyle Financials Environment Food/ agriculture Energy Precious Metals Mining 7 Balanced portfolio constructed from the bottom-up Source: M&G, 19 May 2014 Time

8 Emerging markets A different proposition? Currency crises Asian crisis Slowing growth Political unrest Falling markets 200 Zero confidence 0 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 MSCI Emerging Markets Index 8 Source: Bloomberg, 2014

9 Mt HOLT P/B (Value Cost Ratio) What is in the news What we see on the ground Chinese steel production (Mt) Mining companies book values % Metals & mining 9 Annualised Chinese production YOY growth (RHS) Ongoing demand, attractive valuations Source for Chinese steel production: IISI, Deutsche Bank, 31 October Source for mining companies book values: HOLT, 3 October 2013, Credit Suisse HOLT as at October Credit Suisse and its subsidiaries and affiliates. Used by permission. All rights reserved. CFROI is a registered trademark of Credit Suisse or its affiliates in the United States and other countries

10 Current PE Ratio Investing back down the curve Flexible, unconstrained approach PE vs. Cash Flow Return On Investment (CFROI) Utilities Energy Industrials Materials Telecommunication Services Financials Health Care Consumer Staples Consumer Discretionary Information Technology CFROI Valuation driven investment decisions 10 Source: Source: Bloomberg, M&G, Credit Suisse HOLT, February Credit Suisse and its subsidiaries and affiliates. Used by permission. All rights reserved. CFROI is a registered trademark of Credit Suisse or its affiliates in the United States and other countries.

11 A new dawn Focus on capital discipline Strong management Capital discipline Shareholder focused On the cusp of share buy back 11 Source: Financial Times online, April 2014

12 Mining and oil & gas services Weir Group & National Oilwell Varco 12 Source: Company websites, April 2014

13 Car ownership globally = no. of cars per 1000 people ( ) 13 Source: World Bank, World Development Indicators, April 2013; Johnson Matthey 2014, Umicore 2014

14 14 A threat to the car industry?

15 Pollution & demand for platinum set to rise North America (5%) Russia (14%) Unique recycling asset No geopolitical concerns Stable operating environment South Africa (72%) Labour unrest Infrastructure issues Declining ore grades Political instability Fatalities 15 Source: World Bank, World Development Indicators, April 2013; Johnson Matthey 2014, Umicore 2014

16 PM 2.5 micrograms per cubic meter 800 Air quality in Beijing - January WHOs recommended air quality guidelines Smoking rooms at US airports Jan Days in January hour Average in Beijing 16 Source: U.S. Embassy, WHO, U.S, CDC Alaska Government Unit Micrograms Per Cubic Meter:

17 Punitive measures for polluters China is the world s biggest carbon emitter 17 Source: Financial Times online, Bloomberg, April 2014

18 Economic development Shanghai's financial sector grew 13.7% in new free-trade zones approved China to implement the 5 emission standards - more stringent laws on vehicle emissions Chinese steel mills are under scrutiny as operations further deteriorate air quality Time 18 Source: M&G, January 2014, China Merchants Capital, Economic Information Daily, Xinhua Agency, Bloomberg, CDP, China Business

19 Global growth engine The developed markets? Emerging Economies = $8.9tn US Other advanced economies Asia ex Japan Latin America & Eastern Europe Africa and Middle-East Other Source: IMF October 2013, Prudential estimates. Other advanced economies includes advanced EU countries, Japan, Australia, NZ and Canada. Singapore, Hong Kong, Korea and Taiwan are included in Asia ex Japan. East Europe includes CEE and CIS countries.

20 Global growth engine Propelled by ALL emerging markets Emerging Economies = $8.9tn US Other advanced economies Asia ex Japan Latin America & Eastern Europe Africa and Middle-East Other Source: IMF October 2013, Prudential estimates. Other advanced economies includes advanced EU countries, Japan, Australia, NZ and Canada. Singapore, Hong Kong, Korea and Taiwan are included in Asia ex Japan. East Europe includes CEE and CIS countries.

21 Looking ahead Compelling investments throughout the portfolio Niche miner of scarce mineral sands Platinum producer, industrial & consumer demand, no mining or geopolitical risk Deep port operator, emerging markets focused, new efficient assets Diversified conglomerate, installed equipment, repeat revenue Flavours & fragrances specialist, concentrated market Food innovator, bespoke product solutions Brand, high margins, R&D, focused product offering, established supply chains Growth via under-advertised emerging markets, with a focus on digital Tackling global issues: diabetes & obesity Unique drug delivery, multiple applications Premium car manufacturer, new generation engines and cars Global software company, captive market, monetising EM users High quality, low cost, diversified miner in favourable geographies 21 Source: M&G, January 2014

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23 23 The value of stockmarket investments will fluctuate, which will cause fund prices to fall as well as rise and investors may not get back the original amount invested. For Investment Professionals only. Not for onward distribution. No other persons should rely on any information contained within. For Switzerland: Distribution of this document in or from Switzerland is not permissible with the exception of the distribution to Qualified Investors according to the Swiss Collective Investment Schemes Act, the Swiss Collective Investment Schemes Ordinance and the respective Circular issued by the Swiss supervisory authority ("Qualified Investors"). Supplied for the use by the initial recipient (provided it is a Qualified Investor) only. In Spain the M&G Investment Funds are registered for public distribution under Art. 15 of Act 35/2003 on Collective Investment Schemes as follows: M&G Investment Funds (1) reg. no 390, M&G Investment Funds (2) reg. no 601, M&G Investment Funds (3) reg. no 391, M&G Investment Funds (5) reg. no 972, M&G Investment Funds (7) reg. no 541, M&G Investment Funds (8) reg. no 1100, M&G Investment Funds (9) reg. no 930, M&G Investment Funds (14) reg. no 1243, M&G Global Dividend Fund reg. no 713, M&G Dynamic Allocation Fund reg. no 843, M&G Global Macro Bond Fund reg. no 1056 and M&G Optimal Income Fund reg. no 522. The collective investment schemes referred to in this document (the "Schemes") are open-ended investment companies with variable capital, incorporated in England and Wales. In the Netherlands, all funds referred to, are registered with the Dutch regulator, the AFM. This information is not an offer or solicitation of an offer for the purchase of investment shares in one of the Funds referred to herein. Purchases of a Fund should be based on the current Prospectus. The Instrument of Incorporation, Prospectus, Key Investor Information Document, annual or interim Investment Report and Financial Statements, are available free of charge, in paper form, from the ACD: M&G Securities Limited, Laurence Pountney Hill, London, EC4R 0HH, GB, or one of the following: M&G International Investments Limited, German branch, mainbuilding, Taunusanlage 19, Frankfurt am Main, the German paying agent J.P. Morgan AG, Junghofstraße 14, D Frankfurt am Main, the Austrian paying agent, Raiffeisen Bank International A.G., Am Stadtpark 9, A-1030 Wien, the Luxembourg paying agent, J.P. Morgan Bank Luxembourg S.A., European Bank & Business Center, 6 c route de Treves, 2633 Senningerberg, Luxembourg, the Danish paying agent, Nordea Bank Danmark A/S Issuer Services, Securities Services, Hermes Hus, Helgeshøj Allé 33, Postbox 850, DK-0900, Copenhagen C, Denmark, Allfunds Bank, Calle Estafeta, No 6 Complejo Plaza de la Fuente, La Moraleja, 28109, Alcobendas, Madrid, M&G International Investments Limited, the French branch, or from the French centralising agent of the Fund: RBC Dexia Investors Services Bank France. For Switzerland: Please refer to M&G International Investments Ltd., mainbuilding, Taunusanlage 19, Frankfurt am Main, or, for Sweden, from the paying agent, Skandinaviska Enskilda Banken AB (publ), Sergels Torg 2, Stockholm, Sweden. For Italy, they can also be obtained on the website: Before subscribing you should read the Prospectus, which includes investment risks relating to these funds. This financial promotion is published by M&G International Investments Ltd. Registered Office: Laurence Pountney Hill, London EC4R 0HH, authorised and regulated by the Financial Conduct Authority in the UK. Registered in England, No It also has a branch located in France, 6 rue Lamennais, Paris 75008, registered on the Trade Register of Paris, No and is also registered with the CNMV in Spain. Past performance is not a guide to future performance. Performance stats are quoted gross of Italian tax on capital gains.