lv= asset management
TRANSCRIPT
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
DOING IT CONTINENTAL STYLE
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
2
ABOUT LV= ASSET MANAGEMENT
LV= Asset Management (LVAM) is the investment management arm of LV=, one of the UK’s best-known providers of insurance, pensions and investments.
– LV= is the largest friendly society in the UK with one of the strongest capital ratios in the industry (Association of Friendly Societies, Key Statistics 2009)
– LVAM has AUM of approximately £9.3 billion at 31 March 2010– 23 Investment Professionals supported by an extensive team– External distribution team established in 2008
OUR ASSET MANAGEMENT HERITAGE STRETCHES BACK TO 1843
Mark PageHead of European Equities
Tom CaddickHead of MM & Fund Selection
Michael WrightHead of Fixed Interest
Graham AshbyHead of UK Equities
Howard MeaneyHead of Property Investment
Piers HillierChief Investment Officer
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
3
LV= EUROPEAN EX-UK GROWTH FUND
FUND EUROPE EX-UK MULTI CAP CORE
OBJECTIVE LONG-TERM CAPITAL GROWTH FROM CONTINENTAL EUROPE
SHAPE 50-80 STOCKS, TRACKING ERROR TARGET 4-8%
MANAGER MARK PAGE, 25 YEARS’ EXPERIENCE
RECORD BEAT BENCHMARK AND SECTOR IN ’04, ’05, 06, 07, 08 AND ‘09
RATING S&P ‘AA’ RATING
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
4
EUROPEAN EQUITIES OUT OF FAVOUR
Source: Bank of America Merrill Lynch Global Fund Manager Survey, April 2010
11560
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-50
-40
-30
-20
-10
0
10
Net % Under/Overweight Europe (LHS)Europe Relative to World (RHS)
80
85
90
95
100
105
EUROPE POTENTIALL
Y OVEROWNED
EUROPE POTENTIALL
Y UNDEROWNE
D
30
40
50110
IN APRIL 2010, 21% OF MANAGERS WERE UNDERWEIGHT EUROPE
Asset Allocation
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
5
DON’T LET BAD APPLES SPOIL THE BARREL
THERE’S MORE TO EUROPE THAN PIIGS...
FTSE-W EUROPE EX UKFRANCEGERMANYSWITZERLANDSPAINITALY
%23.717.016.79.27.7
FTSE-W EUROPE EX UKNORWAYGREECEPORTUGALPOLANDAUSTRIA
%1.90.90.80.70.8
Source: Bloomberg. Components of FTSE-W Europe ex-UK Index at March 2010
NETHERLANDSSWEDENFINLANDDENMARKBELGIUM
6.55.82.62.42.1
IRELANDHUNGARY
0.70.5
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
6
LOW CONCENTRATION – A STOCKPICKER’S MARKET
GREATER OPPORTUNITY TO UNCOVER HIDDEN VALUE THAN IN THE UK
Source: Bloomberg. Largest components of FTSE-W Europe ex-UK Index and FTSE All Share Index at March 2010
TOP TEN - EUROPENESTLETOTALNOVARTISROCHEBANCO SANTANDER
%3.82.82.52.32.2
TELEFONICASIEMENSBNP PARIBASE.ONSANOFI-AVENTIS
2.21.81.61.51.5
TOP TEN - UKBPROYAL DUTCH SHELLHSBCVODAFONEGLAXOSMITHKLINE
%6.96.96.94.73.9
RIO TINTOBHP BILLITONBATBARCLAYSASTRAZENECA
3.52.92.72.62.5
TOTAL 22.2 TOTAL 43.5
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
7
WHERE ARE THE OPPORTUNITIES?
Stock Picks
Niche positionsHigh Barrier to Entry
Credible Growth Strategy
Sound Balance SheetHigh ROCE
High Cash Flow Conversion
Unloved Businesses
Depressed ValuationIntact Brand and Franchise
Under-ownedNew
Management/Structure
Long-Term Themes
Asset ReflationEmerging Market
GrowthDepressed Agriculture
PricesHigher-Yield Cash
Surrogates
ECONOMIC SENSITIVITY HIGHERLOWER
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
8
EFFICIENT PORTFOLIO MANAGEMENT
Place your bets– But only where you have conviction
If you don’t get it, don’t take the risk– Index awareness
If you make good relative money, bank it– Option strategy
MINIMISE TURNOVER, MINIMISE COSTS
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
9
DOING IT CONTINENTAL STYLE
IT’S A RISK TO TREAT EUROPEAN MARKETS AS ALL THE SAME!
Rate of Condom Use at First Sex
Source: Durex Sexual Wellbeing Global Survey 2007
63.2%59.8%
57.2%
47.9%44.6%44.0%42.8%42.0%40.5%
33.1%31.8%
POLANDGREECESPAINITALYGERMANYSWITZHOLLANDUKAUSTRIAFRANCERUSSIA
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
10
SUMMARY
Breadth of Country and Stock choice The Big Turnaround story? Continental Europe still has a strong export sector Sufficient diversity to add value in different market environments
EUROPE OFFERS SIGNIFICANT OPPORTUNITIES FOR THE STOCKPICKER
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
11
APPENDICES
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
12
LV= EUROPEAN EX-UK GROWTH FUND
Past performance is not a guarantee of future returns
2004 2005 2006 2007 2008 2009
LV= European ex-UK Growth Fund
FTSE World Europe ex-UK Index
IMA Europe excluding UK sector
15.4
%
13.8
%
13.6
%
26.1
%
24.1
%
25.2
%
23.2
%
20.1
%
19.2
%
15.9
%
15.7
%
12.8
%
21.5
%
20.1
%
19.5
%
-23.6
%
-24.0
%
-24.3
%
Past performance is not a guarantee of future returns
2004 2005 2006 2007 2008 2009
LV= European ex-UK Growth Fund
FTSE World Europe ex-UK Index
IMA Europe excluding UK sector
15.4
%
13.8
%
13.6
%
15.4
%
13.8
%
13.6
%
26.1
%
24.1
%
25.2
%
23.2
%
20.1
%
19.2
%
15.9
%
15.7
%
12.8
%
21.5
%
20.1
%
19.5
%
-23.6
%
-24.0
%
-24.3
%
Last Six Calendar Years Sharpe Ratio
Over five years to end March 2010, the Fund returned +69.30% versus +61.28% for the benchmark index and +54.01% for the competitor sector
1 May 2003 to 31 March 2010
LV= European ex-UK Growth Fund
0.59
FTSE World Europe ex-UK Index
0.52
IMA Europe excluding UK sector
0.46
Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class shown. Competitor sector: IMA Europe excluding UK. Benchmark index: FTSE World Europe ex-UK. Launch 5 May 2003. See Appendices for
Standardised Performance table.
Past performance is not a guarantee of future returns
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
13
95
100
105
110
115
Mar 05 Sep 05 Mar 06 Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10
EXPERIENCED TEAM DELIVERING RESULTS
Mark PageHead of European Equities25 years’ investment experience
CONSISTENT OUTPERFORMANCE OVER MULTIPLE TIMEFRAMES
Richard FalleFund Manager16 years’ investment experience
Laurent MilletFund Manager9 years’ investment experience
Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class shown. Competitor sector: IMA Europe excluding UK. Launch 5 May 2003. See Appendix for Standardised Performance
table.
Period to end March 2010
1 Year 3 Years 5 Years Since Launch
Quartile 2 1 1 1
Past performance is not a guarantee of future returns
Performance Relative to Sector
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
14
STANDARDISED PERFORMANCE
To end March (%) Fund FTSE-W Europe ex-UK Index
2010 45.53 48.76
2009 -26.85 -31.06
2008 0.22 2.84
2007 12.35 12.41
2006 41.24 36.04
Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class
Past performance is not a guarantee of future returns
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
15
RECORD OF CONSISTENCY
Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class shown.
Past performance is not a guarantee of future returns
The chart shows the number and extent of periods of outperformance of the sector average, based on rolling three-month periods over the three years to 31 March 2010
Over this period, the Fund has demonstrated a return profile similar to the IMA sector average, but with a skew towards outperformance
This is reflected in the Fund’s cumulative performance record relative to the sector average
5
8
9
8
1
4
Relative Performance (%)
1
-3 to -2 -2 to -1-1 to 0 0 to 1 1 to 2 2 to 3 3 to 4
Peri
od
Cou
nt
IMA Europe excl. UK average
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
16
INDUSTRY BREAKDOWN
Source: Bloomberg, LVAM at end March 2010
These figures represent the positions taken in the Fund versus the broad industry groups within the benchmark FTSE World Europe excluding UK index.
TOP 5 OVERWEIGHTTRAVEL & LEISURESUPPORT SERVICESMEDIAHEALTHCARE FINANCIAL SERVICES
%2.92.62.62.01.8
TOP 5 UNDERWEIGHTCHEMICALSPHARMA & BIOTECHBEVERAGESELECTRICITYAUTOMOBILES & PARTS
%-2.3-2.2-1.9-1.8-1.6
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
17
TOP 10 HOLDINGS BY ACTIVE WEIGHT
Relative to FTSE-W Europe ex-UK Index, at end March 2010
COMPANYTOTAL SAE.ON AGUBS AGSODEXOFRESENIUS MEDICAL CARE AGVINCI SAAXA SAVALLOUREC SASIEMENSRHOEN KLINIKUM
%+1.75+1.60+1.55+1.55+1.54+1.48+1.47+1.44+1.40+1.39
Total of 73 holdings, including sector futures
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
18
MATTHEW WRIGHT HEAD OF DISCRETIONARY [email protected] 07802 484732
LVAM CONTACTS
www.LVAM.co.uk
TOM MILNES DISCRETIONARY SALES [email protected] 07825 122250
CAITRIONA MULHALL DISCRETIONARY SALES [email protected] 07747 615210
FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS
19
IMPORTANT INFORMATION
This presentation is not to be distributed to any third party. The information constitutes Liverpool Victoria Asset Management Limited’s (LVAM) understanding of the situation at the date of the presentation, which is subject to change and does not constitute advice. LVAM and its staff are not responsible for an individual’s understanding or use of the information. This is a stock market related investment so the value of investments and any income from them may go down as well as up. Further information on the risks associated with this type of product can be found by reading the relevant Simplified Prospectus – available on our website www.LVAM.co.uk.
LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Friendly Society Limited and LV=, LV= Liverpool Victoria and LV= Asset Management are trading styles of the Liverpool Victoria group of companies.
Liverpool Victoria Asset Management Limited (LVAM) is the Investment Manager and Liverpool Victoria Portfolio Managers Limited (LVPM) the ISA manager and Authorised Corporate Director for the LV= European ex-UK Growth Fund. LVAM and LVPM are authorised and regulated by the Financial Services Authority, register numbers 185399 and 188521 respectively. Both companies are incorporated in England and Wales company numbers 3287943 and 3579650 and are members of the IMA.
The LV= European ex-UK Growth Fund is a sub-fund of LV= Investment Funds I ICVC, an open ended investment company (OEIC) with variable capital incorporated in England and Wales company number IC24 and authorised and regulated by the Financial Services Authority register number 188233.
Registered Address for all companies: County Gates, Bournemouth, BH1 2NF
Correct at May 2010
LVAM191 05/10