carmignac portfolio emerging discovery - e … · peru philippines colombia intergroup financial...

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Carmignac Portfolio Emerging Discovery

12th February 2015

2 2 2

Edouard CARMIGNAC – Chief Investment Officer

Frédéric LEROUX 25

Laurent CHEBANIER Country risk analyst 16

Julien CHERON Quantitative analyst 12

Rose OUAHBA 19

Charles ZERAH 19

Carlos GALVIS 16

Keith NEY 15

Pierre VERLÉ 10

Muhammed YESILHARK 11

Malte HEININGER 8

Huseyin YASAR 6

Saiyid HAMID 8

Simon PICKARD 22

Xavier HOVASSE 16

Haiyan LI-LABBÉ 14

Edward COLE 15

David Y. PARK 10

Michael HULME 17

Simon LOVAT 12

Vincent STEENMAN Industry 9

Antoine COLONNA Consumption 22

Matthew WILLIAMS Finance 20

Tim JAKSLAND Innovation 23

Didier SAINT-GEORGES 27

Sandra CROWL 23

Jean MÉDECIN 20

Team Leader Fund Manager Analyst Years of experience

An experienced management team

CROSS ASSET

INTERNATIONAL BONDS

EUROPEAN EQUITIES

EMERGING EQUITIES

COMMODITY EQUITIES

SECTOR ANALYSTS

Global Research Coordinator

MIC

MULTI-STRATEGY Pierre-Edouard

BONENFANT 3 Yassine

BASRAOUI 6

PORTFOLIO ADVISORS

Obe EJIKEME Quantitative equity analyst 11

3 3 3

EDWARD COLE 15-year experience

The Emerging Markets Team

Source: Carmignac Gestion, 30/01/2015

Head of Emerging Markets Team – Portfolio Manager

Joined Carmignac Gestion in 2000

SIMON PICKARD 22-year experience

Co-Portfolio Manager of Carmignac Portfolio Emerging Discovery

Covers Latin America Joined Carmignac Gestion in 2008

Co-Portfolio Manager of Carmignac Portfolio Emerging Discovery

Covers Asia ex-Greater China Joined Carmignac Gestion in 2007

Analyst Covers Greater China Joined Carmignac Gestion in 2011

DAVID YOUNG PARK 10-year experience

HAIYAN LI-LABBÉ 14-year experience

Co-Portfolio Manager of Carmignac Portfolio Emerging Patrimoine

Covers Eastern Europe, Middle East and Africa (EMEA)

Joined Carmignac Gestion in 2013

XAVIER HOVASSE 16-year experience

4 4 4

A “Small” Team and Low Turnover Means:

A Big Commitment to On-The-Ground Research


David Park

Xavier Hovasse

Haiyan Li-Labbé

Simon Pickard

Antoine Colonna

Matthew Williams

Fund Managers

Analysts

Edward Cole

Edouard Carmignac

Muhammed Yesilhark

MEXICO

COLOMBIA

ARGENTINA

BRAZIL

SOUTH AFRICA

RUSSIA

TURKEY

U.A.E QATAR

INDIA

JAPAN

SOUTH KOREA TAIWAN

PHILIPPINES

CHINA

THAILAND VIETNAM

5 5 5


Within Carmignac Gestion Emerging Markets Funds Range


CARMIGNAC PORTFOLIO EMERGING PATRIMOINE

CARMIGNAC EMERGENTS

CARMIGNAC PORTFOLIO EMERGING DISCOVERY

EMERGING MARKET DIVERSIFIED

EMERGING MARKET EQUITIES

A “frontier” markets exposure: 36% currently

Assets: 309.15 Million €

A small and midcap fund: average weighted market cap of EUR 3.3 bn

55 positions

6 6 6

90

100

110

120

130

140

150

160


Source: Carmignac Gestion at 30/01/2015 From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested Past performance is not a guarantee of future returns

*50% MSCI EM SmallCap (EUR) + 50% MSCI EM MidCap (EUR), (Reinvested net dividends, rebalanced quarterly)

Reference Indicator* +36.68%

Carmignac Portfolio Emerging Discovery A EUR acc

+48.51%

Performance of the Fund (5Y)

7 7 7

Uneven GDP growth in Emerging Markets

Source: Carmignac Gestion – Interantional Monetary Fund April 2014

2014 GDP Growth Forecasts

Less than 0 Between 0 and 1 Between 1 and 2 Between 2and 4 Between 4 and 6 Above or equal 6

DM

EM

8 8 8

Process is Both Top-Down and Bottom-Up


T

O

P

-

D

O

W

N

MACRO / THEMATIC VIEWS FORMED BY:

Daily investment meeting with whole team

Scheduled meetings as well as constant interaction

Close interaction with cross-asset and fixed income teams

Access to independent macro analysis

MICRO / BOTTOM-UP VIEWS FORMED BY:

“Dual coverage” of major parts of our universe

EM team analyst coverage : analyst responsibility is geographic

Close interaction with sector analysts, formal monthly sector meetings

Access to alternative information sources

B

O

T

T

O

M

-

U

P

9 9 9

Risk Analysis Specific to Regions and Countries

Proprietary database and indicators


BALANCE OF PAYMENTS

BANKING SYSTEM RISKS

EXTERNAL VULNERABILITIES

GROWTH DYNAMICS

THINGS WE ARE LOOKING FOR

INFLATION DYNAMICS

10 10 10

+ +

What we look for an Investment

Source: Carmignac Gestion, February 2015

INVESTMENT = ( MACRO UNDERPENETRATION STRONG FCF )

MACRO

UNDERPENETRATION

STRONG FCF

The Fund looks for strong macro fundamentals (growth outlook, current account, currency, inflation)

Underpenetrated sectors & long term growth

Companies with a strong FCF profile i.e capital light business that can self finance its growth

11 11 11

+ + +

+

Key Valuation & Country Metrics

COUNTRY METRICS

=

OVERALL SCORE POSITION SIZING

CURRENT ACCOUNT GROWTH INFLATION

CURRENT ACCOUNT

GROWTH

INFLATION Looking at growth dynamics and its sub-components (Consumption, Invest, Exp, Stocks, Govt)

Analysis of inflation dynamics and sub-components (food, transport, clothing, health, housing)

The analysis looks at CA surplus or deficit, how it is financed and whether it is sustainable

VALUATION METRICS CROCI + FCF(Y) AFTER M.CAPEX CASH REALIZATION RATIO + + +

CROCI

FCF(Y) AFTER M.CAPEX

CASH REALIZATION RATIO

Free cash flow yield after maintenance Capex

Operational Cash flow / Net income

Cash return on capital invested

EXT. VULNERABILITIES

EXTERNAL VULNERABILITIES Looking at Net international investment positions, FX reserves, external debt

12 12 12

Key Features and Attributes

DISCOVERY

TURNOVER

LONG TERM

EXPOSURE

Pick the long term winners from the small and mid-cap space with a third invested in Frontier

The fund has a proper five year holding period with a low turnover of 20% on 50 to 60 stocks

Above quarterly or annual earnings, the Funds look beyond that at the long term

The Fund aims to give investors EM exposure without leveraging on cash exposure

=

+

+

+

CARMIGNAC PORTFOLIO EMERGING DISCOVERY

Source: Carmignac Gestion – February 2015

FUND BEHAVIOR Provided most of its alpha through downside protection in the 2011 & 2013 bear markets

+

13 13 13

Key Structural Guidelines

LIQUIDITY

CAPITAL LIGHT BUSINESS

COUNTRY ALLOCATION

=

+

+

+

Source: Carmignac Gestion – February 2015

SECTOR ALLOCATION

+

Liquidity is a key criterion - more than 50% of the portfolio can be liquidated in 3 days

I.e. negative working capital business such as distribution, insurance, convenience stores etc

Reflects investments in underpenetrated sectors + 5 to 10y specific growth stories

We have a preference for economies with surpluses in their balance of payments.

PICK THE RIGHT : + + COUNTRIES SECTORS STOCKS

COUNTRY LIMIT The fund has a 15% limit on country level deviation from benchmark

14 14 14

Chinese « New Normal » & Economic Momentum


CHINESE « NEW NORMAL » 4%

5%

6%

7%

8%

9%

10%

11%

12%

13% BETWEEN 6% AND 7% GROWTH

BETTER GROWTH QUALITY

STRUCTURAL ECONOMIC REFORMS

=

NO HARD-LENDING

0

5

10

15

20

25

30

35

40 % PROPERTY FAI YOY% GROWTH

0%

2%

4%

6%

8%

10%

12m LENDING RATE

CPI YoY%

LENDING AND INFLATION RATES

7%

6%

OFFICIAL GROWTH

15 15 15

Credit Underpenetration Theme


PRIVATE DEBT TO GDP

We have three banks in the Fund:

PERU

PHILIPPINES

COLOMBIA

INTERGROUP FINANCIAL

PHILIPPINE NTL BANK

BANCO DAVIVIENDA

Our investments in banks are a perfect illustration of the underpenetration themes we are looking for:

LOW PRIVATE DEBT TO GDP

CREDIT UNDERPENETRATION

LOW DEPOSITS

10 YEAR GROWTH STORY AHEAD =

16 16 16

India: Leveraging the Investment Rebound

Source: Company Data, Deutsche Bank AG, 4 April 2014 + SocGen 2014

SHREE CEMENT - FCF GENERATION

INDIA

11.6% OUR FUND

7.9% BENCHMARK in

MODI’S ELECTION

REFORMS PROCESS

IMPROVING EXTERNAL

IMBALANCES

SHREE CEMENT

Proxy to economic growth

Long term drivers intact: population growth, urbanisation, economic growth, etc.

Competitive advantage and most attractive prospects

Right location (present in Northern India) + Right timing + Cost Leadership

STRONG FCF GROWTH

INFRASTURCTURE PLAN

-20000

-10000

0

10000

20000

30000

FY11 FY12 FY13 FY14E FY15E FY16E

Capital expenditure (INR mn) Free cash flows before Capex (INR mn)

17 17 17

$50bn infrastructure project

Project which is 15% of GDP to build roads across rough terrrain requiring a big investment

Biggest position in Colombia

Retail bank doing SME lending and exploiting low mortagage penetration

Colombia: One of our Favourite Markets


0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

160.00%

Colombia India Russia Brazil China

Private Debt to GDP

COLOMBIA

7.8% OUR FUND

0.7% BENCHMARK in

BANCO DAVIVIENDA CEMENTOS ARGOS + CEMEX LATAM

SANTOS REELECTION

PEACE PROCESS

GROWTH & INFRASTRUCTURE

INVESTMENT

COLOMBIA: 4-LANE MOTORWAY TO BE BUILT (KILOMETRES)

18 18 18

Mexico: Reforms starting to Bear Fruits

Source: Carmignac Gestion,30/01/2015

MEXICO

9.8% OUR FUND

3.5% BENCHMARK in

FIBRA TERRAFINA

LABOR MARKET AND EDUCATION

REFORM

TAX REFORM ENERGY,

FINANCIAL, TELECOM REFORM

BIGGEST POSITION OF THE FUND

ATTRACTIVE SECTOR

OFFER A HIGH YIELD DIVIDEND

SOME CURRENCY HEDGE (USD RENTAL REVENUES)

DIVERSIFIED EXPOSURE TO THE MEXICAN ECONOMY

EXPOSURE MOSTLY TO THE INDUSTRIAL SEGMENT

MEXICAN EXPORTS % PIB

0%

5%

10%

15%

20%

25%

30%

35%

Manufactured Exports % GDP

Oil Exports % GDP

30%

4%

20 20 20

Vietnam Dairy Products

Our Frontier Markets Exposure LATAM

EEMEA

COLOMBIA

PERU Alicorp, Inretail Peru, Intergroup Financial

Almacenes, B.Davivienda, Cementos A, Cemex L, Gran Tierre, Terpel

SAUDI ARABIA

UNITED ARAB EMIRATES

KENYA East African Breweries, Safaricom

Jarir Marketing

Aramex, Emaar Malls

NIGERIA Guinness Nigeria

SLOVENIA Krka DD

ASIA

PHILIPPINES

SRI LANKA John Keells

Holcim, Ictsi Int’l Container, LT Group, Phillippine Ntl Bank

VIETNAM

7.8

3.3

0.9

5.1

3.7

0.7

1.1

9.2

2.0

1.6

35.5% TOTAL FRONTIER MARKETS

21 21 21

A Balanced and Diversified Thematic Portfolio


ENERGY AND MATERIALS

FINANCE

LEISURE AND AUTOMOBILE

INDUSTRY

TECHNOLOGY

CONSUMER GOODS

TELECOMMUNICATIONS

12.2%

19.9%

12.7%

11.4%

13.8%

23.6%

6.2%

BREAKDOWN AS % 31/12/2014

C

Y

C

L

I

C

A

L

D

E

F

E

N

S

I

V

E

22 22 22

Geographic Exposure


3.2

BRAZIL

11.6

INDIA

2.4

TURKEY

2.8

INDONESIA

2.6 SOUTH AFRICA

9.0 TAIWAN

7.8 SOUTH KOREA

0.9

THAILAND

Geographic exposure as % of Carmignac Portfolio Emerging Discovery

2.8 CHILI

7.8 COLOMBIA

CHINA

5.4

3.3 PERU

9.2 PHILIPPINES

1.1 SLOVENIA

2.0

SRI LANKA

1.6 VIETNAM

Frontier Markets Traditional Markets

0.9 SAUDI ARABIA

0.7 NIGERIA

3.7 KENYA

5.1

UNITED ARAB

EMIRATES

4.4

HONG KONG/ MACAO

9.8 MEXICO

RUSSIA 1.9

23 23 23

Carmignac Portfolio Emerging Discovery: Top 10 Holdings


FIBRA TERRAFINA

SINA

BHARTI INFRATEL

SHREE CEMENT

ARAMEX

LT GROUP

CLICKS

Mexico

China

India

India

United Arab Emirates

Philippines

South Africa

GIANT MANUFACTURING

PHILIPPINE NATIONAL BANK

SA SA

Taiwan

Philippines

Hong Kong

Financials

Information Technology

Telecommunication Services

Materials

Industrials

Consumer Staples

Consumer Staples

Consumer Discretionary

Financials

Consumer Discretionary

3.94

3.91

3.19

3.03

2.98

2.75

2.65

2.30

2.29

2.29

1

2

3

4

5

6

7

8

9

10

Country Sector % Assets

24 24 24

Disclaimer

Dieser Präsentation ist für professionelle Kunden bestimmt. Dieser Präsentation darf ohne vorherige Genehmigung der Verwaltungsgesellschaft weder ganz noch teilweise reproduziert, verbreitet oder weitergegeben werden. Es stellt weder ein Zeichnungsangebot noch eine Anlageberatung dar. In dieser Präsentation enthaltene Informationen können unvollständig sein und ohne Vorankündigung geändert werden. Skala von 1 (geringstes Risiko) bis 7 (höchstes Risiko); Risiko 1 kann nicht mit einer risikofreien Anlage gleich gesetzt werden. Dieser Indikator kann sich im Laufe der Zeit verändern. Wertentwicklungen der Vergangenheit lassen keine Rückschlüsse auf zukünftige Wertverläufe zu. Die Kosten sind in den Wertentwicklungen enthalten. Für bestimmte Personen oder Länder kann der Zugang zu den Fonds beschränkt sein. Sie dürfen insbesondere weder direkt noch indirekt einer „US-Person“ wie in der US-amerikanischen „S Regulation“ und/oder im FATCA definiert bzw. für Rechnung einer solchen US-Person angeboten oder verkauft werden. Die Fonds sind ist mit einem Kapitalverlustrisiko verbunden. Die Risiken und Kosten sind in den Wesentlichen Anlegerinformationen (WAI) / im Kundeninformationsdokument (KID) beschrieben. Die Prospekte, WAI / KID und Jahresberichte der Fonds stehen auf der Website www.carmignac.de / www.carmignac.at zur Verfügung und sind auf Anforderung bei der Verwaltungsgesellschaft bzw. in Österreich bei der Ersten Bank der österreichischen Sparkassen AG OE 01980533/ Produktmanagement Wertpapiere, Petersplatz 7, 1010 Wien, erhältlich. Die Wesentlichen Anlegerinformationen / die Kundeninformationsdokumente sind dem Zeichner vor der Zeichnung auszuhändigen. Copyright: In dieser Präsentation enthaltene Daten sind ausschließliches Eigentum der jeweiligen Eigentümer laut Angabe auf jeder Seite.

Nicht vertragliches Dokument, 09/02/2015

Carmignac Gestion – Portfolioverwaltungsgesellschaft (von der französischen Finanzmarktaufsicht AMF

am 13.03.1997 unter der Nr. GP 97-08 zugelassen) SA [Aktiengesellschaft französischen Rechts] mit einem Stammkapital von 15.000.000 € - Handelsregister Paris B 349 501 676

24 Place Vendôme – 75001 Paris – Tel : +33 1 42 86 53 35

Carmignac Gestion Luxembourg – Tochtergesellschaft von Carmignac Gestion OGAW-Verwaltungsgesellschaft (von der luxemburgischen Finanzmarktaufsicht CSSF am 10.06.13 zugelassen)

SA [Aktiengesellschaft luxemburgischen Rechts] mit einem Stammkapital von 23.000.000 € - Handelsregister Luxemburg B67549 City Link -7, rue de la Chapelle L-1325 Luxembourg – Tel: +352 46 70 60 1

http://www.carmignac.de/www.carmignac.at











carmignac portfolio emerging discovery - e … · peru philippines colombia intergroup financial...

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