PICKING THE GROWTH STOCKS TO DELIVER

Transcription

1 For professional adviser use only PICKING THE GROWTH STOCKS TO DELIVER CF Canlife UK Equity Fund Daniel Monks Senior Fund Manager Citywire Wealth Management Forum, London 10 November 2015

2 CANADA LIFE INVESTMENTS AN INTRODUCTION UK-based asset manager responsible for managing over 33 billion* Long history of managing funds in the UK first unit trust launched in retail funds across equities, fixed income, property and multi-asset solutions Assets under management ( bn)* Property 2.3 Equities 2.1 Mortgages 2.1 Cash 1.5 Bonds 25.3 *Assets as at 30/09/15 2

3 INTRODUCING THE CF CANLIFE UK EQUITY FUND Secular growth bias High conviction, stock picking approach Focus on mid-cap stocks that are highly liquid 3

4 Sales THE SEARCH FOR GROWTH Cyclical Defensive Secular Stocks that rise and fall with the economy Stocks that are insensitive to the economic environment Long-term themes, less impacted by current environment 4

5 WHAT IS SECULAR GROWTH FOR US? Changes in consumer tastes Changes in industry dynamics Technological advances 5

6 WHY SECULAR GROWTH? Growth vs Value 10 years MSCI UK Growth Index MSCI UK Value Index Past performance is not a guide to future performance. Source: Bloomberg, indices rebased to 100 at October

7 WHY SECULAR GROWTH? 250 Mid Cap vs Large Cap 10 years FTSE 250 Index FTSE 100 Index Past performance is not a guide to future performance. Source: Bloomberg, indices rebased to 100 at October

8 OUR SECULAR GROWTH BIAS 8

9 CORE INVESTMENT PROCESS UNIVERSE DEFINITION LIQUIDITY ANALYSIS IDEA GENERATION FUNDAMENTAL ANALYSIS In-house analysis FTSE All Share Companies typically > 1bn market cap Analyst meetings & conferences Stock screens Themes Valuations stocks 100 stocks 650 stocks 350 stocks 9

10 CURRENT THEME Online, all the time 10

11 Total mcommerce sales, bn % of internet sales via mobile CURRENT THEME: ONLINE, ALL THE TIME UK retail mobile commerce sales % 25% 15 20% 10 15% 10% 5 5% F 2016F 2017F Total sales via mobile bn (L axis) % of internet sales via mobile (R axis) 0% Source: Emarketer. Note excludes travel and event ticket sales; includes sales on tablets. 11

12 ONLINE STOCK EXAMPLE Share price ( ): Since launch to 30/09/15 5 Market Cap:(Mid) 2.8bn P/E (FY16): 49.8 Yield: 0.0% 5yr CAGR: 76.0% / / / /2015 Past performance is not a guide to future performance. Source: Bloomberg, stock price is at 30/09/15 12

13 ONLINE STOCK EXAMPLE Share price ( ): 5 years to 30/09/15 10 Market Cap:(Mid) 2.6bn P/E (FY16): 13.8 Yield: 2.5% 5yr CAGR: 15.0% Past performance is not a guide to future performance. Source: Bloomberg, stock price is at 30/09/15 13

14 CURRENT THEME Savvy British shoppers and discount stores force down retail prices Online, all Top of the shops: Discount stores are booming in recession as thrifty customers seek out bargains the time The rise of the discounters Cut-price Britain: Sales soar 30% at discount stores as shoppers flood in for bargains 14

15 Mainstream market share (%) Discount market share (%) CURRENT THEME: THE RISE OF THE DISCOUNTERS UK supermarkets: Market share of Mainstream vs Discount (%) Mainstream (L axis) Discount (R axis) Source: Kantar. Mainstream supermarkets include: Tesco, Asda, Sainsbury's, Morrisons, The Co-Operative, Waitrose. Discount includes: Aldi, Lidl, Iceland, Farm Foods 15

16 DISCOUNT STOCK EXAMPLE Share price ( ): Since launch to 30/09/ Market Cap:(Mid) 3.4bn P/E (FY16): 24.0 Yield: 0.9% 3.5 5yr CAGR: 21.3% Past performance is not a guide to future performance. Source: Bloomberg, stock price is at 30/09/ / / /

17 DISCOUNT STOCK EXAMPLE 60 Share price ( ): 5 years to 30/09/15 Market Cap:(Large) 8.7bn P/E (FY16): 18.4 Yield: 1.7% 5yr CAGR: 12.4% Past performance is not a guide to future performance. Source: Bloomberg, stock price is at 30/09/15 17

18 FUND BREAKDOWN GICS Sector Asset Allocation relative to Peer Group Average (%) Consumer Discretionary Information Technology Healthcare Industrials Utilities Telecom Services Financials - REITs Materials Consumer Staples Energy Financials ex REITs Market Cap Asset Allocation relative to Peer Group Average (%) Giant Cap Large Cap Mid Cap Small Cap Micro Cap Source: Morningstar Direct, 30/09/15 18

19 PERFORMANCE Fund performance to 31/10/15 (%) 1 year 2 years Since launch (21/10/13) 2014 Return Sector average Quartile 2 nd 2 nd 2 nd 1 st Benchmark Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Source: Morningstar, bid to bid with net income reinvested for B share class to 31/10/15. Sector is IA UK All Companies. Benchmark is FTSE All Share. 19

20 CF CANLIFE UK EQUITY FUND KEY TAKEAWAYS Secular growth bias High conviction, stock picking approach Focus on mid-cap stocks that are highly liquid 20

21 CANADA LIFE INVESTMENTS CONTACTS Matt Couzens Sales Director, Investments T M E matt.couzens@canadalife.co.uk Ian Goulsbra Senior Sales Director, Investments T M E ian.goulsbra@canadalife.co.uk 21

22 APPENDIX Investment with vision

23 FUND MANAGERS Joined Canada Life Investments in September 2013 More than 25 years investment experience Nigel Kennett Senior Fund Manager Previously worked at Nomura International, Gartmore and Royal & Sun Alliance Has managed equity long/short strategies Joined Canada Life Investments in September 2007 Previously worked at Mondrian Investment Partners Daniel Monks Senior Fund Manager Jointly managing CF Canlife UK Equity Fund since launch October

24 FUND STRUCTURE Target number of positions: Core: 70-90% of stocks Tactical: 10-30% of stocks Target active position sizes to maximum 5% Zero weighting in stocks with no conviction 24

25 FUND BREAKDOWN Sector allocation (%) Market cap asset allocation (%) Utilities 2.8 Telecoms 4.6 Materials 4.0 IT 12.0 Consumer Disc Small 4.0 Giant 31.0 Industrials 15.6 Consumer Staples 4.8 Energy 4.7 Mid 44.5 Large 20.5 Health Care 13.3 Financials 8.0 Source: Sector allocation to 31/10/15. Market cap asset allocation from Morningstar Direct to 30/09/15 25

26 FUND BREAKDOWN Top 10 holdings Astrazeneca 5.2% Ashtead Group 5.0% Imperial Tobacco 4.8% Shire 4.6% BT Group 4.6% Prudential 4.2% ITV 4.1% ARM Holdings 4.0% Playtech 4.0% Whitbread 3.9% As at 31/10/15 26

27 ACTIVE WEIGHTS Top 10 Weight (%) Ashtead Playtech Arm Holdings SABMiller ITV Whitbread Shire Travis Perkins Restaurant Group Easyjet Bottom 10 (not held) Weight (%) HSBC Holdings British American Tobacco GlaxoSmithKline BP Royal Dutch Shell A Vodafone Group Diageo Lloyds Banking Group Barclays Reckitt Benckiser Group Source: Bloomberg as at 30/09/15. Benchmark is MSCI UK IMI. 27

28 MID-CAP BIAS Morningstar Style Box Breakdown: CF Canlife UK Equity Fund (%) Morningstar Style Box Breakdown: IA UK All Companies (%) Source: Morningstar Direct, 30/09/15 28

29 UK EQUITY TEAM Craig Rippe Nigel Kennett Daniel Monks Eugene O Neill Head of UK Equities Senior Fund Manager Senior Fund Manager Fund Manager Joined Canada Life Investments in March 2004 and was appointed Head of UK Equities in March 2010 Previously managed income funds at Govett Investment Management Limited and prior to that worked at Deloitte Touche Manages CF Canlife UK Equity Income and CF Canlife UK Equity & Bond Income Funds Joined Canada Life Investments in September 2013 and has 25 years investment experience Previously worked at Nomura International, Gartmore and Royal & Sun Alliance Has managed equity long/short strategies Manages CF Canlife UK Equity Fund Joined Canada Life Investments in September 2007 Previously worked at Mondrian Investment Partners Graduated from York University with a BSc in Mathematics & Economics and is a CFA charter holder Manages CF Canlife UK Equity Fund Joined Canada Life Investments in August 2010 Previously worked for Depfa Bank Plc, Dublin in its Balance Sheet Management team Holds a BSc in Financial Mathematics and Economics and MSc in Financial Mathematics Manages CF Canlife UK Equity Income and CF Canlife UK Equity & Bond Income Funds 29

30 KEY FACTS: CF CANLIFE UK EQUITY FUND SECTOR BENCHMARK LAUNCH SIZE HOLDINGS OCF TURNOVER MANAGERS IA UK ALL COMPANIES FTSE ALL SHARE 21 OCTOBER M % (AMC 0.75%) 156.9%* NIGEL KENNETT AND DANIEL MONKS All figures as at 31/10/15. *Annualised turnover based on (((Purchases + Sales)-(Inflow +Outflow))/average fund size) x

31 IMPORTANT INFORMATION Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Due to the underlying assets held, the price of the fund is classed as having above average to high volatility. The information contained in this document is provided for use by professional advisers and is not for onward distribution to, or to be relied upon by, private investors. The views expressed in this document are those of the fund manager at the time of publication and are subject to change at any time without notice. No guarantee, warranty or representation (express or implied) is given as to the document s accuracy or completeness. This document is issued for information only by Canada Life Investments. This document is intended to be used as a sales aid and does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at Data Source Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) 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. Source: FTSE International Limited ( FTSE ) FTSE FTSE is a trademark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent. Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no ), Canada Life Limited (no ) and Canada Life European Real Estate Limited (no ) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. CLI00240/1015R Expiry December