PRUDENTIAL INVESTMENT MANAGERS

Transcription

1 PRUDENTIAL INVESTMENT MANAGERS MICHAEL MOYLE HEAD OF MULTI-ASSET 8 JUNE 2017

2 GLOBAL REACH IN ASSET MANAGEMENT Prudential PLC US Life Insurance US Asset Management UK Life Insurance UK Asset Management 49,99% Asia Life Insurance Asia Asset Management 49.99% South African Investment Management Thesele Group 22.00% Prudential Staff 28.01% Prudential SA works closely with the Prudential Group s asset management companies around the world Worldwide, the Prudential Group has a total of 562 billion of funds under management More than 450 investment professionals in global asset management teams Slide 2

3 INVESTMENT PHILOSOPHY Valuation Based Prudent Long-term Use long run anchors of where assets should be priced Construct portfolios on a risk conscious basis Focus on the long term and seek to ignore short term noise CONSISTENT PHILOSOPHY & PROCESS SINCE INCEPTION Slide 3

4 WE AIM TO BE BETTER AT UNDERSTANDING THE ODDS ON OFFER Try to ignore most of our own views Adopt a normal distribution approach of forecasting Exploit behavioural biases Episodes Valuation (represents biased perception of risk) View formation (represents biased formation of beliefs) Exploit gravity in risk pricing relationships Rubber-band theory: the further valuation moves from fair value, the more likely and severe a re-pricing becomes Approach is unconventional and slightly counterintuitive We are reactive and opportunistic Slide 4

5 THE FOLLY OF FORECASTING Rand/$ forecasts have not proven to be particularly useful Rand/$ Rand/$ forecast Slide 5 Source: Reuters & Prudential Investment Managers

6 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Overbought Oversold EXPLOIT BEHAVIOURAL BIASES EPISODES SA 10y Government Bond Yield Prospective Real Yields 11,00 10,50 Nenegate 5,00 4,50 10,00 4,00 9,50 9,00 8,50 8,00 3,50 3,00 2,50 2,00 Fair Value; 2,25 14-Dec-15; 3,53 14-Dec-16; 2,75 7,50 1,50 7,00 1,00 6,50 0,50 6,00 - Government Bonds Slide 6 Source: IRESS

7 SA FAIR VALUES AND RISK PREMIA Slide 7 Source: Prudential Investment Managers

8 REAL RETURNS Slide 8 Source: Bloomberg, Reuters, Credit Suisse, Prudential Investment Managers

9 PRUDENTIAL BALANCED FUND Asset allocation 30 April 2017 Total Equity 62.9% Total Foreign 26.2% EQUITY LISTED PROPERTY OFFSHORE (EXCL. AFRICA) AFRICA (EXCL. SA) Intended Maximum Limits 75% 25% 25% 5% Slide 9 *Note: Cash includes Floating Rate Notes

10 PRUDENTIAL BALANCED FUND Performance (after fees) since inception to 30 April 2017 Investment Objectives 1. Target: Deliver capital growth over the medium to long term. 2. Benchmark: The average return of the ASISA South African Multi Asset High Equity Category Slide 10 Source: Morningstar

11 PRUDENTIAL BALANCED FUND Quarterly performance vs bonds and equities Monthly returns: Fund Equity Bonds Return (annualised) 16.1% 15.8% 14.2% Standard Deviation (annualised) 10.8% 16.7% 7.1% 20,0% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% -15,0% -20,0% Prudential Balanced Fund Equity Bonds Slide 11 Source: Prudential Investment Managers

12 PRUDENTIAL BALANCED FUND Consistency has been a key feature of our performance 1 ST Morningstar Rating 2 ND Average Balanced Fund Return 3 RD 4 TH Slide 12 Source: Morningstar Direct as at , three year return to calendar year end, 2017 three year return to

13 PRUDENTIAL INVESTMENT MANAGERS We don t claim We do claim To have a holy grail from superior insights To have forecasting superiority To employ a smarter team than the competition To understanding the nature of the markets in which we invest To take advantage of price movements and value opportunities To invest for the long term To be consistent in our approach WE DON T TRY TO OUT-FORECAST OUR COMPETITORS, WE TRY TO BE BETTER AT INTERPRETING KNOWN FACTS Slide 13

14 THANK YOU

15 MICHAEL MOYLE Head of Multi-Asset Michael Moyle is Head of Multi-Asset at Prudential Investment Managers, with 19 years experience. He is co-portfolio Manager of four Prudential unit trust funds, and has won several Raging Bull and Morningstar Awards. He also chairs the Prudential Asset Allocation Committee. Michael s qualifications include: Masters in Engineering Mechanics (University of Texas); MBA (UCT); and CFA. Slide 15

16 DISCLOSURE STATEMENT This document is for information purposes only and is not an offer or a solicitation to invest in any of the capabilities or products offered by Prudential Investment Managers (South Africa) (Pty) Ltd ( Prudential ) or any of its associates, being Prudential Portfolio Managers SA Life Ltd or Prudential Unit Trusts Ltd. Prudential is authorised and registered as a discretionary financial services provider by the Financial Services Board of South Africa [FSP 45199], in terms of the Financial Advisory and Intermediary Services Act. The company s offices are located at: 5th Floor Protea Place, 40 Dreyer Street, Claremont, Information in this document has been obtained from sources believed to be accurate and timely, but Prudential makes no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information and opinions provided therein. This information is not intended to constitute a basis for any specific investment decision. Investors are advised to familiarise themselves with the unique risks related to their investment choices, and should seek the advice of a qualified financial adviser before investing. The value of an investment will fluctuate and past performance is not necessarily an indication of future returns.