INVESTMENT CONFERENCE

Transcription

1 INVESTMENT CONFERENCE Knowing where to look Guy de Blonay Fund Management Director 16 September 2015 ON THE PLANET TO PERFORM

2 1 Our approach in brief Objective Long-term capital growth principally through investment in global financials equities Investment approach Combination of top-down / bottom-up stock analysis Sub-sector fundamental themes through investments in companies with prices that do not reflect longer-term trends Opportunistic and effective with capital by dynamically allocating it across geographies sub-sectors, growth, yield and special situations categories Manager s goal Generate returns in any market conditions All of our ideas start with a view that a significant country, industry or company change, not yet being fully recognised by the market, is imminent or in progress

3 2 Structural trends Companies need to maximise efficiencies to compete successfully Ageing populations in developed markets Wealth management, retirement income Young populations in Emerging Markets Credit cards, insurance, retail property New technology Distribution efficiencies Internet / mobile transactions Scaleable platforms Operational leverage Data Can improve credit and insurance underwriting

4 3 Important and diverse sector 2,800 companies with a market cap of US$500m or greater Low correlation between sub-sectors: The financial sector is an important part of global markets Regional banks Investment banks Index Financial services as % of index Thrifts and mortgage banks Brokers dealers Asset managers Life insurance Non-life insurance (including reinsurance) Speciality finance (credit cards, leasing, financial guarantors and banking software) Exchange Property Transaction management systems S&P 500 (US) 16.7 CAC 40 (France)* 18.1 DAX (Germany) 18.0 FTSE 100 (UK) 23.0 Topix 100 (Japan) 18.4 S&P/TSX Comp (Canada) 35.7 S&P/ASX 200 (Australia) 47.0 MSCI World 20.9 Historical example for illustrative purposes only. Source: Bloomberg, *Source: FactSet,

5 4 MSCI World Financials price vs. MSCI World Financials book value 300 MSCI World Financials price MSCI World Financials book value Jan-96 Nov-97 Aug-99 May-01 Mar-03 Dec-04 Sep-06 Jun-08 Apr-10 Jan-12 Oct-13 Jul-15 Source: Bloomberg, Indexed at 100 on

6 5 Portfolio construction: the reference ⅓ Yield Typical selection criteria of underlying stocks: Dividend yield >5% Payout ratio >50% Core Tier One Basel III >12% Price to Earnings <14x Price to Tangible book value <2x Return on Equity >13% ⅓ Growth Emerging Markets Structural growth ⅓ Special Situations or restructuring stories: New management New strategy, targets Sale non-core asset Cost cutting Return on Equity Payout ratio Focus: profitability vs. revenue growth Not fund restrictions, represents fund manager style.

7 CHF GBP KNOWING WHERE TO LOOK 6 Stock examples Barclays Strategy, value creation and performance culture Capital and dividends Non-core run down and stranded costs Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Banque Cantonale Vaudoise (BCV) Solid dividend policy CT1 ratio >17% Defensive qualities 420 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Any stock examples are used for illustrative purposes only and should not be viewed as investment advice. Source: Bloomberg,

8 GBP USD KNOWING WHERE TO LOOK 7 Stock examples Visa Inc Global leader in payments VISA EUROPE potential China Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Prudential Asia Rising per capita wealth 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 RoE > 20% 1,000 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Any stock examples are used for illustrative purposes only and should not be viewed as investment advice. Source: Bloomberg,

9 8 Trend long and avoid Years Trend Long Avoiding 2002 De-leveraging, re-pricing of risk, volatility Money brokers, Lloyds of London, European property US market sensitive stocks, asset managers, investment banks 2003 Market consolidation, low interest rates, high liquidity Investment banks, asset managers, Irish and UK property Insurance, online brokers, insurance brokers 2004 Stronger equity markets, surge property valuation outside G7, low interest rates Investment banks, private banking, Eastern European property US insurance, US asset managers, UK domestic banks 2005 Market sentiment positive, M&A activity increasing, low inflation Asset managers, Emerging Markets, Japanese brokers UK domestic banks, insurance brokers, large cap US regional banks 2006 Market sentiment positive, M&A activity, liquidity Investment banks, asset managers, Emerging Markets Canadian regional banks, US regional banks, insurance brokerage 2007 Global growth, re-pricing of risk, low inflation Diversified financials, asset managers, Emerging Markets US Investment banks, Spanish domestic, UK banks 2008 De-leveraging, re-pricing of risk, volatility Reinsurance, Lloyds of London, Swiss regional banks Investment banks, Spanish domestic, UK banks Not fund restrictions, represents fund manager style. Historical example for illustrative purposes only.

10 9 Trend long and avoid (Cont.) Years Trend Long Avoiding 2009 De-leveraging, dilution risk, asset quality Reinsurance, Lloyds of London, Swiss regional banks US regional banks, Spanish domestic, Japanese banks 2010 Low interest rates, liquidity, re-leveraging Asia, Global banks, Norway Portugal, Spanish domestic, Greece 2011 Low interest rates, re-leveraging, M&A activity Credit cards, private equity, asset managers India banks, Greek banks, Spanish domestic 2012 Low interest rates, LTRO/OMT/QE, credit growth Credit cards, asset managers, Emerging Markets Spanish domestic, Irish banks, online brokers 2013 LTRO/OMT/QE, US housing, credit growth Emerging markets, global payments, global banks Australian banks, online brokers, Spanish domestic 2014 QE Japan, China stimulus, record low global interest rates, credit growth Global payments, global banks, Japan Australia banks, Canadian banks, Spanish domestic 2015 QE EU, China stimulus, record low global interest rates, credit growth European banks, Japan banks, global payments Australia banks, Canadian banks, Emerging Markets Not fund restrictions, represents fund manager style. Historical example for illustrative purposes only.

11 10 Current thematic exposure summary Jupiter Financial Opportunities Fund Developed Markets banks capital structure now recovered Developed Markets corporate governance and commitment to shareholders dramatically improving Stability and dividend growth in Insurance sector Digitalisation of payments Under-penetrated Emerging Markets

12 11 Theme example US Consumer Finance should benefit from cheaper oil Plunging oil prices Soaring dollar.6.5 U.S Ṡ&P Consumer Finance / S&P 500 [lhs] Unemployment claims* [Inv, rhs] Th Improving labour market Improving total income growth Credit card default rate low Consumer borrowing pick-up Ann chg % 6 3 U.S Ṙeal Wages & Salaries [lhs] WTI Crude Oil Price [Inv, rhs] Ann chg % Source: BCA Research, January *Smoothed.

13 12 Theme example (2) Mobile payments look poised to explode Forecast: US mobile in-store payment volume Mobile payments look poised to explode this year thanks to mainstream adoption of Apple Pay and similar apps Explosive mobile payments growth Apple Pay showing early signs of success CurrentC could have some success Android mobile markets benefitting from Apple Pay Source: BI Intelligence, January 2015.

14 13 Investing in global equities in 2015 and beyond Your investment partner Jupiter: proven expertise in global equity investing Financials: a relevant and diverse sector within global equities Valuation opportunities exist within the global financials Economic recovery should be supportive of strong financial names

15 14 Disclosure This presentation is intended for investment professionals and not for the benefit of retail investors. Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given. Past performance is no guide to the future. Company examples are for illustrative purposes only and are not a recommendation to buy or sell. Quoted yields are not guaranteed and may change in the future. Awards and Ratings should not be taken as a recommendation. Jupiter Financial Opportunities: The fund invests in a specific market sector, so may be subject to greater volatility risk over short periods of time. This fund invests mainly in shares and it is likely to experience fluctuations in price which are larger than funds that invest only in bonds and/or cash. The Key Investor Information Document, Supplementary Information Document and Scheme Particulars are available from Jupiter on request. This fund can invest more than 35% of its value in securities issued or guaranteed by an EEA state. Industry Classification Benchmark ( ICB ) is a product of FTSE International Limited ( FTSE ) and all intellectual property rights in and to ICB vest in FTSE. Jupiter Asset Management Limited has been licensed by FTSE to use ICB. FTSE is a trade mark owned by the London Stock Exchange Plc and is used by FTSE under licence. FTSE and its licensors do not accept liability to any person for any loss or damage arising out of any error or omission in ICB. This document contains information based on the MSCI World Financials Index and MSCI World Index. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (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 data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data 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. No further distribution or dissemination of the MSCI data is permitted without MSCI s express written consent. For your security we may record or randomly monitor all telephone calls. Jupiter Unit Trust Managers Limited (JUTM) and Jupiter Asset Management Limited (JAM) are both authorised and regulated by the Financial Conduct Authority and their registered address is 1 Grosvenor Place, London SW1X 7JJ. No part of this presentation may be reproduced in any manner without the prior permission of JAM or JUTM _54215_UT_FINANCIAL_OPPS_JIC_GB_0915 ON THE PLANET TO PERFORM