Morgan Stanley Wealth Management Due Diligence Meeting

Transcription

1 Morgan Stanley Wealth Management Due Diligence Meeting European Equity: Capturing Long-Term Trends & Short -Term Movements Fabio Di Giansante Senior Portfolio Manager, Senior Vice President April 2013, Milan Page 1 I For broker/dealer use only and not be distributed to the public.

2 Agenda European Market Review & Outlook Pioneer Funds Euroland Equity Positioning & Performance Appendix Page 2 I For broker/dealer use only and not be distributed to the public.

3 European Market Offers Medium Term Positives...but short term difficulties must be overcome Positives Exposure to Global Growth Valuation offering an attractive entry point Investors are underweight the asset class new flows may provide additional support Potential for return to Growth? Risks Remain Sovereign Risk Italy Cyprus Timing of return to growth in Eurozone/Can ECB help? Can/When a Banking Union is executed? Page 3 I For broker/dealer use only and not be distributed to the public.

4 European Market Fundamental Attractions: Well positioned to profit from global trends Nearly 50% of Revenues are generated outside the Eurozone and UK European companies are wellplaced to take advantage of growing EM consumption Global Middle Class by Region Source: World Bank Dec 2010 We find European companies with global business models often trading at discounts to peers in other markets Page 4 I For broker/dealer use only and not be distributed to the public.

5 European Market: Fundamental Attractions Valuation support remains even after recent rally Forward P/E Multiple 11.5 Price/Book 1.45 Morgan Stanley 22 March 2013 Page 5 I For broker/dealer use only and not be distributed to the public.

6 Flows in EUR Mln European Market Fundamental Attractions European Equities remain an under-owned asset class 20,000 15,000 10,000 Overall Asia Pacific Emerging Markets Europe Global North America Inflection point in terms of flows for European Equities? 5, ,000-10,000-15,000-20,000-25,000-30,000 Dec'11 Jan'12 Feb'12 Mar'12 Apr'12 May'12 Jun'12 Jul'12 Aug'12 Sep'12 Oct'12 Nov'12 Dec'12 Source: Strategic Insight December 2012 Seems to trade at a discount to other asset classes Source Morgan Stanley 22 March 2013 Page 6 I For broker/dealer use only and not be distributed to the public.

7 It Hasn t Been All Good News. Return of sovereign risk: Italian election result certainly unhelpful Election Inconclusive Demonstrates austerity fatigue Structural reforms may be delayed which may have negative consequences for growth prospects OMT requires conditionality who can sign the MOU? Fiscal compact & OMT have been introduced. Liquidity support should remain plentiful Italy has a primary surplus financing the economy not an immediate concern Monti government already addressed significant fiscal measures/pension reforms Another message to Europe that growth as well as austerity is required Page 7 I For broker/dealer use only and not be distributed to the public.

8 It Hasn t Been All Good News. Return of sovereign risk: Cyprus? Source: Economist Page 8 I For broker/dealer use only and not be distributed to the public.

9 Uncertainty Is Affecting Consumer & Business Confidence... and in turn potential for a return to growth Pioneer Investments Lowers 2013 Eurozone Growth Forecast : 0.0% YoY Source: Morgan Stanley 3 April 2013 Page 9 I For broker/dealer use only and not be distributed to the public.

10 Current Volatility is Offering Investors a Second Entry Point Why? We believe that ECB/European Leaders remain committed to finding solutions and will act if necessary Risks remain to the upside Valuation remains supportive/investor positioning may offer further support Page 10 I For broker/dealer use only and not be distributed to the public.

11 Agenda European Market Review & Outlook Pioneer Funds Euroland Equity Positioning & Performance Appendix Page 11 I For broker/dealer use only and not be distributed to the public.

12 Pioneer Funds Euroland Equity: Portfolio Overview Source: Pioneer Investments as at 28th March 2012 Data refers to A Unit Class. For details of other unit Classes available, please refer to the prospectus. Morningstar Ratings: Copyright 2013 Morningstar UK Limited. All Rights Reserved. The information contained herein: (1) may not be copied or distributed; and (2) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this informationan S&P Capital IQ fund grading represents an opinion only and should not be relied on when making an investment decision. Past performance is not indicative of future results. Currency exchange rates may affect the value of investments. Copyright 2013 by McGraw-Hill international (UK) Limited (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. Page 12 I For broker/dealer use only and not be distributed to the public.

13 We Build High Conviction Portfolios Focusing On Our Best Ideas We believe stocks provides sufficient diversification without diluting performance potential Page 13 I For broker/dealer use only and not be distributed to the public.

14 Investment Process Searching for the advantage: our Equity Research Idea Generation Fundamental Analysis Research Portfolio Company Meetings Industry Analysis Screening Competitive Position Management Evaluation Financial Modelling Motivational & Communication tool Accountability and assessment of ideas Sector Neutral Career Analysts specialised by sector Specialisation allows a profound understanding of industry trends & the potential winners in each sector 11 Career Analysts Average Experience: 14 years Page 14 I For broker/dealer use only and not be distributed to the public.

15 Core Holdings Medium Term Macro View Implemented Through bottom-up stock selection Medium Term View ECB/Politicians have shown commitment to solve the Eurozone s problems Concentrate on global growth as structural issues remain Deleveraging will continue for a number of years yet Consumer/Business Confidence remains an issue Focus on Companies with Strong Balance Sheets Global Consumer Right Business Model Page 15 I For broker/dealer use only and not be distributed to the public.

16 Two Different Business Models, Both Delivering Positive Returns Global Consumer Right Business Model Companies generating high percentage of revenues outside of Europe Global Industry Leaders Exposure to Growing EM Consumption Exposure to Improvement in US Economy Unique competitive position Strong balance sheet enables growth in market share despite economic turmoil Pricing power Page 16 I For broker/dealer use only and not be distributed to the public.

17 These Companies Offer a Variety of Services Page 17 I For broker/dealer use only and not be distributed to the public.

18 Opportunistic Holdings Short Term View Implemented Through Bottom-Up Stock Selection Short Term View Structural issues remain (Italy, Cyprus, Execution Risk) but sovereign risk premium too high Fiscal consolidation is peaking - expectation that inflection point for GDP growth is due Page 18 I For broker/dealer use only and not be distributed to the public.

19 Opportunistic Themes in Portfolio Reduction in Sovereign Risk Companies trading at lower levels primarily because of listing in the periphery Valuation Opportunities Companies, which we believe, will be early beneficiaries of any return to growth in Europe Page 19 I For broker/dealer use only and not be distributed to the public.

20 Alpha Generation Pioneer Funds: Euroland Equity Generating Alpha from both Core and Opportunistic 10.0 Portfolio Opportunistic Portfolio Core During Volatile Periods Core Outperforms LTRO rally- Opportunistic Outperforms 12/10 05/11 10/11 03/12 08/12 04/13 For illustrative purposes only Page 20 I For broker/dealer use only and not be distributed to the public.

21 Agenda European Market Review & Outlook Pioneer Funds Euroland Equity Positioning & Performance Appendix Page 21 I For broker/dealer use only and not be distributed to the public.

22 Pioneer Funds Euroland Equity Current Sector Positioning Industrials Consumer Discretionary Energy Financials Telecommunication Services Materials Utilities Information Technology Health Care Delta Bmk Nav Overweight Industrials and Consumer Discretionary Diverse Sectors with selection of business models Exposure to global growth trends/emerging markets Energy Driven by stock selection rather than view on sector Underweight Utilities Structural challenges Cashflow & dividends sustainable?? Consumer Staples % 0.00 % 5.00 % %15.00 %20.00 %25.00 % * Underweight Consumer Staples Sector fully valued Have taken profits on certain holdings Date: 28 th March 2013 *MSCI EMU is the benchmark of the Pioneer Funds Euroland Equity NAV relates to the fund Page 22 I For broker/dealer use only and not be distributed to the public.

23 Pioneer Funds Euroland Equity Top 10 Overweights Stock Portfolio Weight Benchmark Weight Delta ZIGGO NV (Core) 2.74% 0.13% 2.61% CREDIT SUISSE (Core) 2.44% 0.00% 2.44% THALES SA (Opp) 2.55% 0.12% 2.43% KONINKLIJKE PHILIPS ELECTRON (Opp) 3.31% 0.90% 2.40% DEUTSHE TELEKOM (Opp) 3.32% 0.95% 2.38% VICAT (Core) 2.21% 0.00% 2.21% TULLOW OIL (Core) 2.19% 0.00% 2.19% PUBLICIS (Core) 2.53% 0.38% 2.15% AXA SA (Opp) 3.12% 0.97% 2.15% VINCI SA (Core) 2.81% 0.66% 2.15% Source: Pioneer Investments as at 28 March The portfolio is actively managed, and information may not be representative of current or future holdings. References to individual stocks should not be taken as investment recommendations to buy or sell any security. Benchmark is MSCI Emu. Page 23 I For broker/dealer use only and not be distributed to the public.

24 Pioneer Funds Euroland Equity Consistent Alpha Generation Fund % Benchmark % Relative % 2013 YTD Year Years Ann Years Ann Total Return Percentile Rank versus Morningstar Peers: Percentile 1 Year 7 3 Years Ann. 6 5 Years Ann. 7 Source: Pioneer investments as at 28 March 2013 referring to Pioneer Funds Euroland Equity Class A Class USD, performance net of fees and based in Euro. Fund inception is 04 July For details of other unit classes please refer to the Prospectus.. Copyright 2013 Morningstar UK Limited. All Rights Reserved. The information contained herein: (1) may not be copied or distributed; and (2) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance does not guarantee and is not indicative of future results. Please see additional MSCI disclaimer in the Additional Notes. Page 24 I For broker/dealer use only and not be distributed to the public.

25 Outperformance is Not Enough, We Aim to Generate Alpha Efficiently Proprietary Risk Analysis by Portfolio Construction Team Building a portfolio from the bottom-up may result in unintended concentration of risk Analyses sources of risk as defined by tracking error Analysing performance of market & portfolio by different factors to ascertain what areas we are over/under exposed to versus the market and what impact it could have on performance Fully embedded in investment process through regular meetings and informal contact Page 25 I For broker/dealer use only and not be distributed to the public.

26 Outperformance is Not Enough, We Aim to Generate Alpha Efficiently Excess Returns v Peers Tracking Error v Peers Information Ratio v Peers % -4.0% Years 3 Years 3 Years Top Quartile 2nd Quartile 3rd Quartile Bottom Quartile Pioneer Funds Euroland Equity A EUR ND MSCI EMU NR EUR Europe OE Eurozone Large-Cap Equity Page 26 I For broker/dealer use only and not be distributed to the public.

27 Maximise the Value in European Equities It is our expectation that interest in European Equities will continue to grow Current valuation is offering an extremely attractive entry point We are a team of experienced stock-pickers with a strong track record of delivering outperformance Page 27 I For broker/dealer use only and not be distributed to the public.

28 Agenda European Market Review & Outlook Pioneer Funds Euroland Equity Positioning & Performance Appendix Page 28 I For broker/dealer use only and not be distributed to the public.

29 European Equity The Integrated Team Source: Pioneer Investments 17 April 2013 Page 29 I For broker/dealer use only and not be distributed to the public.

30 Active Fundamental Research-Driven Approach The European Equity Investment Philosophy We are a team of experienced stock-pickers. We believe that focusing on company fundamentals will deliver attractive equity returns, over the long term, while ensuring we optimise our use of risk. Identify companies with the ability to deliver consistent returns... trading at a discount to their intrinsic value Our Aim: Maximise returns through a high conviction approach Active Portfolio Positioning Portfolio Risk Analysis to mitigate risk Page 30 I For broker/dealer use only and not be distributed to the public.

31 Investment Process Integrated Team Approach Page 31 I For broker/dealer use only and not be distributed to the public.

32 Investment Process Searching for the Advantage : Our Equity Research Idea Generation Fundamental Analysis Research Portfolio Company Meetings Industry Analysis Screening Competitive Position Management Evaluation Financial Modelling Motivational & Communication tool Accountability and assessment of ideas Sector Neutral Career Analysts specialised by sector Specialisation allows a profound understanding of industry trends & the potential winners in each sector 11 Career Analysts Average Experience: 14 years Page 32 I For broker/dealer use only and not be distributed to the public.

33 Investment Process Exploiting the Ideas: Portfolio Management Team Portfolio Management Team Compact decision making unit of generalists Surrounded by an idea generating culture 4 Senior Portfolio Managers Average PM Experience: 17 years Supported by specialist input from equity analysts Research Portfolio Market View Portfolio Manager PM s own Research Research Portfolio acts as the engine for idea generation Portfolio Managers use these ideas and their own research to select stocks Portfolio Managers have full accountability for the stock selection in their own portfolio Sector Views Company Meetings Page 33 I For broker/dealer use only and not be distributed to the public.

34 Investment Process Proprietary Risk Analysis by Portfolio Construction Team Building a portfolio from the bottom-up may result in unintended concentration of risk Analyses sources of risk as defined by tracking error Analysing performance of market & portfolio by different factors to ascertain what areas we are over/under exposed to versus the market and what impact it could have on performance Fully embedded in investment process through regular meetings and informal contact Page 34 I For broker/dealer use only and not be distributed to the public.

35 Fabio Di Giansante Senior Portfolio Manager, Senior Vice President Fabio Di Giansante is a Senior Portfolio Manager with the European Equity team, based in Pioneer Investments Dublin office. He focuses on our euro specialised portfolios and joined Pioneer Investments in August He is the lead Portfolio Manager for Pioneer Funds Euroland Equity. In 2011, he was nominated for Morningstar European Fund Manager of the Year. Fabio joined the company from Credit Agricole Asset Management, where he was European Equities Portfolio Manager. Previously he worked with Nextra Investment Management for 5 years as European Equities Portfolio Manager. Fabio holds a degree in Economics and Finance from the University of L Aquila,Italy. Page 35 I For broker/dealer use only and not be distributed to the public.

36 Additional Notes Source of the MSCI data: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an as is basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the MSCI Parties ) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. ( The Global Industry Classification Standard (GICS) SM was developed by and is the exclusive property and a service mark of Standard & Poor's and MSCI. Neither Standard & Poor's, MSCI nor any other party involved in making or compiling any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the forgoing, in no event shall Standard & Poor's, MSCI, any of their affiliates or any third party involved in making or compiling any GICS classification have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. Page 36 I For broker/dealer use only and not be distributed to the public.

37 Disclaimer Unless otherwise stated all information contained in this document is from Pioneer Investments and is as at 31 December 2012 Pioneer Funds Euroland Equity 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. 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), Portland House 8th Floor, Bressenden Place, London, SW1E 5BH, authorised by the Central Bank of 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. For Broker/Dealer Use Only and Not to be Distributed to the Public. Pioneer Investments is a trading name of the Pioneer Global Asset Management S.p.A. group of companies. Date of First Use 24/01/2013 Page 37 I For broker/dealer use only and not be distributed to the public.