P R O F E S S I O N A L S O N LY. Milan IFTA Conference "Sailing to the Future" October 2017

Transcription

1 P R O F E S S I O N A L S O N LY Milan IFTA Conference "Sailing to the Future" October 2017

2 Frédéric Leroux Global Fund Manager Head of Cross Asset Team 2

3 The Importance of Being a Risk Manager 3

4 Over the Past 10 Years, Central Banks Have Given Themselves the Mission to Save the World 3,000 Annual change in the balance sheets of the main central banks ($ billion) 16 2,500 2,000 1,500 1, Trillion dollars -1, /08 06/09 06/10 06/11 06/12 06/13 06/14 06/15 06/16 06/17 Fed ECB BoJ BPoC Total Total Taille G4 total size G4 4 Source: Carmignac, 30/06/2017

5 And Savers Have Accelerated their Allocation from Active Funds to Passive Funds US Equity funds Net inflows ($bn) 1,600 1,600 1,200 1,200 Passive ,200 Active -1,200-1,600-1,600-2,000-2, Source: Bloomberg, 28/09/2017

6 This Trend Started 20 Years with some Backfires $ Bn Fund flow into active and passive funds and ETFs* ($bn) Passively Managed Actively managed 6 *US domestic equity, from 1990 to 2016 Source: Financial times, June 2017

7 Central Banks Seem to have Succeeded in Synchronizing the World Economy 3% OECD Indicators 2% 1% 0% -1% -2% G7 United States Eurozone Japan Asia China UK -3% 7 Source: Bloomberg, 31/07/2017

8 Eurozone: Investment at its Highest Level since the Crisis 5% Eurozone: real investment, annual change 15% Germany: industrial production, annual change 0% 5% -5% -5% -10% -15% -15% 09/07 09/09 09/11 09/13 09/15-25% 09/07 09/09 09/11 09/13 09/15 8 Sources: LHS: Carmignac, CEIC, 31/03/2017 RHS: Bloomberg, 31/05/2017

9 Emerging Markets: the Simultaneous Improvement Continues Apr.16 May 16 Jun.16 Jul.16 Aug.16 Sep.16 Oct.16 Nov.16 Dec.16 Jan.17 Feb.17 Mar.17 Apr.17 May 17 Jun.17 Jul.17 Aug.17 Emerging Markets 49,6 49,6 49,4 50,4 50,1 50,1 50,9 50,7 51,2 50,8 51,3 51,6 50,8 50,6 50,8 50,9 51,7 Asia China 50,1 50, ,9 50,4 50,4 51,2 51,7 51,4 51,3 51,6 51,8 51,2 51,2 51,7 51,4 51,7 India 50,5 50,7 51,7 51,8 52,6 52,1 54,4 52,3 49,6 50,4 50,7 52,5 52,5 51,6 50,9 47,9 51,2 Indonesia 50,9 50,6 51,9 48,4 50,4 50,9 48,7 49, ,4 49,3 50,5 51,2 50,6 49,5 48,6 50,7 South Korea 50 50,1 50,5 50,1 48,6 47, , ,2 48,4 49,4 49,2 50,1 49,1 49,9 Taiwan 49,7 48,5 50, ,8 52,2 52,7 54,7 56,2 55,6 54,5 56,2 54,4 53,1 53,3 53,6 54,3 Latin America Emerging Markets: PMI* evolution Brazil 42,6 41,6 43, , ,3 46,2 45, ,9 49,6 50, , ,9 Mexico 52,4 53,6 51,1 50,6 50,9 51,9 51,8 51,1 50,2 50,8 50,6 51,5 50,7 51,2 54,1 51,2 52,2 EMEA Russia 48 49,6 51,5 49,5 50,8 51,1 52,4 53,6 53,7 54,7 52,5 52,4 50,8 52,4 50,3 52,7 51,6 Turkey 48,9 49,4 47,4 47, ,3 49,8 48,8 47,7 48,7 49,7 52,3 51,7 53,5 54,7 53,6 South Africa 54,9 51,9 53,7 52,5 46,3 48,5 45,9 48,3 46,7 50,9 52,5 52,2 44,7 51,5 46,7 42,9 44 Poland 51 52,1 51,8 50,3 51,5 52,2 50,2 51,9 54,3 54,8 54,2 53,5 54,1 52,7 53,1 52,3 52,5 Czech Republic 53,6 53,3 51,8 49,3 50, ,3 52,2 53,8 55,7 57,6 57,5 57,5 56,4 56,4 55,3 54,9 Hungary 52,1 52,2 50,9 53,8 51,3 57, ,6 52,2 56,5 59, ,9 62,1 57,2 54,2 56,6 9 *Purchasing Managers Index Source: Bloomberg, 31/08/2017

10 Will the Global Trade Recovery Continue to Support Global Earnings Growth and Investment? Annual change 40% 30% 20% 10% 0% -10% -20% -30% -40% Growth in global trade (in volume) and profit cycle MSCI World AC 12m forward EPS Growth in global trade, in volume -50% Source: Kepler Cheuvreux, European Investment Notes, 20/03/2017

11 Not that Sure! Japan: Global Trade, annualized 6-month 100% 50% 0% -50% -100% 07/05 07/07 07/09 07/11 07/13 07/15 07/17 United States: Global Trade, annualized 6-month 40% 20% 0% -20% -40% -60% 01/05 01/07 01/09 01/11 01/13 01/15 01/17 50% 30% 10% -10% -30% -50% -70% 07/05 07/07 07/09 07/11 07/13 07/15 07/17 100% 50% 0% -50% South Korea: Global Trade, annualized 6-month Germany: Global Trade, annualized 6-month -100% 07/05 07/07 07/09 07/11 07/13 07/15 07/17 11 Source: Bloomberg, 28/09/2017

12 However Central Banks are Seeking all the Excuses to Normalize Inflation Rate 8.5% US: Can full employement still become inflationnary? Theoretical Phillips Curve 7.5% 6.5% Unemployment rate 5.5% 4.5% Fed s long-term unemployment forecasts 3.5% 03/13 10/13 05/14 12/14 07/15 02/16 09/16 04/17 Unemployment rate Phillips Curve 12 Source: Carmignac, CEIC, 30/06/2017

13 Inflation Rate Is Inflation Really the Justification for the FED s Monetary Policy Normalization? 4.0% Phillips curve since % 3.0% % 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% 3% 4% 5% 6% 7% 8% 9% 10% 11% Unemployment rate 13 Source: Carmignac, CEIC, 30/06/2017

14 Yet Here s What They Are Planning to Do 3,000 Annual change in the balance sheets of the main central banks ($ billion) Projections 16 2,500 2,000 1,500 1, , Trillion dollars Fed ECB BoJ BPoC Total Taille Total G4 total size G4 14 Source: Carmignac, 30/06/2017

15 Monetary Policy Normalization is all the More Risky as the Weakness of Growth is Structural The effects of deleveraging 370% 320% 270% 220% 170% US debt, % GDP 120% % 13% 8% 3% -2% -7% US: real GDP -12% Source: Carmignac, CEIC, 06/2015

16 How to Translate these Macroeconomic data into an Investment Strategy? Sectors with the largest number of values sensitive to a recovery (high risk/ low quality) : Energy Materials Industrials Financials SPECULATIVE SCARE GROWTH Low RISK High QUALITY 1 Low RISK High QUALITY 2 Accelerating Economic Growth 1 2 Decelerating Economic Growth 3 4 CAPITAL PRESERVATION 3 4 RECOVERY Low RISK High QUALITY 3 Low RISK High QUALITY 4 Sectors with the largest number of values sensitive to a scarce growth (low risk/ high quality) : Healthcare Consumer staples Utilities 16 Source: Carmignac

17 High vs Low Quality Stocks Performance 1,400 1,200 1, MSCI World vs quality stocks* performance Quality stocks* MSCI World 0 12/88 12/90 12/92 12/94 12/96 12/98 12/00 12/02 12/04 12/06 12/08 12/10 12/12 12/14 12/16 17 *Quality stocks are stocks with a high visibility on return on equity and return on assets Source: Carmignac, Bloomberg, 31/08/2017

18 Brexit as a Case Study of Risk Management Brexit Day (24/06/2016): market performance and net exposure of a diversified strategy* 24 th of June 2016 Performance of the EuroStoxx 50: -8.62% Performance of the MSCI World Index: -3.17% Performance of the fund as of the 24 June: -0.31% Gold mines JPY/USD USD/EUR CNY/USD Healthcare Industry GBP/EUR Euro Stoxx FTSE % 0% 6.0% 4.1% 4.1% 10.5% 2.4% -0.6% -3.3% 9.4% -5.1% -0.9% -6.7% 0.1% -10.0% 9.1% -10.1% 2.0% -17.1% Market performance 18 Exposure of the Funds *Share A Eur ACC Source: Carmignac, Bloomberg, 24/06/2016 Past performance is not an indication of future results. Performance is shown net of fees (excluding any entry charges payable to the distributor)

19 DISCLAIMER This presentation is intended for professional clients. This presentation may not be reproduced in whole or in part, without prior authorisation from the management company. This presentation does not constitute a subscription offer, nor does it constitute investment advice. The information contained in this presentation may be partial information, and may be modified without prior notice. Access to the Funds may be subject to restrictions with regard to certain persons or countries. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and/or FATCA. All performances shown in this document are those of our funds A EUR acc units. The funds have other shares in other currencies. The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged. The Funds present a risk of loss of capital. The risks and fees are described in the KIIDs (Key Investor Information Document). The Funds respective prospectuses, KIIDs and annual reports are available at or upon request to the Management Company. The KIIDs must be made available to the subscriber prior to subscription. Copyright: The data published in this presentation are the exclusive property of their owners, as mentioned on each page. Non contractual document, completion achieved on 11/10/2017 CARMIGNAC GESTION Asset management company (AMF authorisation no. GP of 13/03/1997) Limited company (société anonyme or SA) with capital of 15,000,000 Registration no.: RCS Paris B Place Vendôme Paris Tel : CARMIGNAC GESTION LUXEMBOURG Subsidiary of Carmignac Gestion UCITS management company (CSSF authorisation of 10/06/2013) Limited company (SA) with capital of 23,000,000 - Registration no.: RC Luxembourg B67549 City Link -7, rue de la Chapelle L-1325 Luxembourg Tel: