Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Socially responsible investing wikipedia , lookup
Private equity in the 2000s wikipedia , lookup
Stock trader wikipedia , lookup
Early history of private equity wikipedia , lookup
Market (economics) wikipedia , lookup
Environmental, social and corporate governance wikipedia , lookup
Leveraged buyout wikipedia , lookup
Fixed-income attribution wikipedia , lookup
Financial crisis wikipedia , lookup
History of investment banking in the United States wikipedia , lookup
Emerging Markets – Income Opportunities Luke Richdale, Client Portfolio Manager, Emerging Market Equities September 2013 Source: Investors Chronicle as at 6 September 2013, Recent coverage of Emerging Markets… Source: Financial Times, Shutterstock. Images for illustrative purposes only. 1 What has been happening? 1. sluggish growth in major market economies including China 2. currency weakness in countries that need external financing ... unless you believe there is an impending crisis, we believe Emerging Markets look like good value Source: Financial Times, KBK Infographics. Images for illustrative purposes only. 2 Back to the future ...Is this 1997 again? 1990s Today Pegged currencies Floating currencies Misallocation of capital Profitable businesses Weak balance sheets with currency mismatches Limited cases of excess leverage and currency mismatches ... Emerging markets have matured, currencies can now adjust Images for illustrative purposes only. 3 Valuations now look unambiguously attractive Price-to-book has now edged into the range from which returns have almost invariably been positive GEM Index and Price-to-Book: 1993 – September 2013 Euphoric Optimistic Neutral Pessimistic Panic Source: Bloomberg, Factset, UBS, Data as at 2 September 2013 4 The case for income in emerging markets Increasingly sustainable source of income based on improvements in capital discipline Combination of income and growth are a powerful source of total returns Dividends are the most stable component of total returns allowing investors to take a medium term view Expansion of investment universe makes a diversified income strategy possible today 5 Robust profitability continues to drive profits … and dividends MSCI Emerging Markets Index: long term growth in dividends and earnings Index, 100 = Jan 1990 EM DM 10 years Compound Annual Growth Rates EPS DPS Emerging Markets 11.0% 15.4% Developed Markets 8.2% 7.5% Source: MSCI, IBES, FactSet, J.P. Morgan Asset Management. Regular dividends only in local currency. As at end June 2013. Past performance is not an indication of future performance EPS – Earnings per share. DPS – Dividends per share 6 EM companies provide a sustainable source of income Emerging Markets payout ratios stable as borrowing falls (%) Dividend Payout Ratio Net Debt/ Equity Source: MSCI, IBES, Morgan Stanley as at June 2013, GEM universe. E = MS estimate. Past performance is not an indication of future performance. For illustrative purposes only 7 … even as they continue to grow Long term dividend growth tested by crisis (% p.a.) Emerging Markets has offered a combination of – Attractive growth and dividends – Maturing growth with rising dividends Four key sectors – Consumer (Discretionary and Staples) – Financials – Information Technology – Telecommunication Services Dividend growth of key sectors (% p.a.) Source: MSCI, IBES, Morgan Stanley as at end June 2013, GEM universe. * = MS estimate Cons Disc Cons Staples Financials Info Tech Telecoms Dec-07 -1.3% 16.3% 23.4% 37.8% 21.2% Dec-08 -20.1% -7.9% -2.3% 3.2% 13.0% Dec-09 -0.6% 19.6% -23.3% -33.3% 18.0% Dec-10 35.1% 22.4% 41.9% 48.6% 0.8% Dec-11 5.9% 3.1% 12.1% 3.4% 1.8% Dec-12 14.2% 8.4% 4.7% -10.9% 5.9% Dec-13E* 15.0% 21.4% 11.7% 6.7% 1.1% Source: Morgan Stanley as at end June 2013 Past performance is not an indication of future performance. For illustrative purposes only 8 The combination of income and growth has been powerful Emerging Markets have strongly outperformed UK …. and higher yielding EM stocks have beaten the EM index Index, 100 = 28th February 2001 Index, 100 = 28th February 2001 Source: Factset as at 30th June 2013 Source: Bloomberg, FTSE, MSCI , UBS, rebased to GBP, as at end June 2013. Annualised returns Top third of yielding stocks in MSCI EM Index, region neutral. EM higher dividend yield 16.4% p.a. MSCI EM Index 10.8% p.a. FTSE 100 Index 4.1% p.a. Higher yielding EM stocks have outperformed the wider asset class consistently over the last 15 years High yield as provided by UBS. There can be no guarantee that the targeted yield will be achieved and therefore such forecasts are not a reliable indicator of future performance Calculated as top third yielding stocks in MSCI EM Index.For illustrative purposes only 9 Dividend yield combined with dividend growth in up/down markets Combining high dividend yield with high dividend growth performs well in both rising and falling markets Annualised Median 1-Month Return Source: BofA Merrill Lynch GEM Quantitative Strategy ,MSCI, IBES, Worldscope. As at December 2012 10 A broad investment universe Greater style and geographic diversification possible and desirable Number of companies that meet selected Average Daily Volume hurdles 418 Source: JP Morgan Asset Management, Bloomberg, data as at 16th July 2013. Companies with minimum market cap USD 1 billion, average daily traded value USD 1 million, and yield > 4%. 412 in EM. The use of the above company logos is in no way an endorsement for JPMAM investment management services. 11 Income in Emerging Markets is more than just Asia By region % Source: MSCI, Factset and CIRA (Citi Investment Research and Analysis) . As of end June 2013. CEEMA - Central & Eastern Europe, Middle East & Africa. Past performance is not an indication of future performance 12 JPM Global Emerging Markets Income Trust plc Name: JPM Global Emerging Markets Income Trust plc Index: MSCI Emerging Markets Net Index (Total Return) GBP Manager: Richard Titherington (lead), Omar Negyal Process: Fundamental, bottom-up, value bias Target yield:** 4% per annum Current underlying yield:* 5.3% Holdings: 50 – 80 Turnover: Below 50% per annum Inception: July 2010 •Estimated underlying portfolio yield as at 31st July 2013 (gross) ** Target yield (net) This slide references certain internal targets and guidelines relating to the Fund. There is no assurance that the targets will be achieved or guidelines met They may also be subject to change at the discretion of the Investment Manager. 13 Emerging Markets Equity Team Structure Investment Professionals: Average years with firm: Average years industry experience: Client Team Thomas Leventhorpe (6,29) Luke Richdale (20,20) Noriko Kuroki (10,17) Curtis Butler (1,20) Claire Peck (10,10) Eric Bian (6,6) Timothy Morris (9,9) Emily Whiting (8,8) Robert LeDoux (8,8) Rebecca Platts (6,6) Chief Investment Officer Richard Titherington (27,29) Trade Implementation Steve Avenell (16,16) Global and Regional Portfolio Managers Rob Maher (1,1) 39 9 13 Austin Forey (25,25) Amit Mehta (2,12) George Iwanicki (21,25) Luis Carrillo (15,21) Sebastian Luparia (17,20) Oleg Biryulyov (19,19) Leon Eidelman (11,11) Omar Negyal (1,14) Anuj Arora (7,10) Sophie Bosch de Hood (14,14) Jorge Oliveira (7,21) Sonal Tanna (14,14) Mary Harvey (7,8) Amy Thavornsuk (2,6) Priyesh Mistry (6,7) Carmen Pedraza (7,7) Sector Analysts Financials Li Tan (2,2) Chris Birney (4,13) Elizabeth Pang (8,8) Mark Ferguson* (14,14) Consumer Lauren Carter (6.6) Natural Resources Odette Wang (7,7) Aline Gaspar (8,8) Adam Spagnoletti (2,7) Simon Rogers (4,21) Gokhan Ates (2,7) Catherine Moong (8,13) Yatian (Atena) Liu (<1,<1) Andrew Tan (6,19) Nika Lysogorskaya (3,7) Industrials Sandro Apostolico (17,17) John Citron (4,4) Felipe Teixeira (3,7) Cheng-Joo Cheng (8,20) Product Analysts Global -Diversified Joyce Weng (3,5) Kate Murphy (6,6) EMEA Global – Small Cap Lina Nassar (2,2) Xiaoyu Liu (6,6) Pandora Omaset (13,17) Vitaly Kazakov (10,11) Habib Saikaly (2,7) * Head of Research (Years with firm, Years total experience) As of September 2013. There can be no assurance that the professionals currently employed by J.P. Morgan Asset Management will continue to be employed by J.P. Morgan Asset Management or that the past performance or success of any such professional serves as an indicator of such professional's future performance or success. 14 Paul Chan (14,20) How do we value the business Five year expected return Earnings growth Earned by the company Dividends Change in Valuation Delivered by the market Currency = Expected Return 15 Powerful combination of Income & Growth TARGET 20% of portfolio TARGET 60% of portfolio TARGET 20% of portfolio Low dividend yield Target dividend yield High Dividend Yield ( <3% ) ( 4-6% ) ( >6% ) Source: J.P. Morgan Asset Management. For illustrative purposes only. 16 JPM Global Emerging Markets Income Trust plc … long term, income + growth, 4% net yield p.a. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not position on behalf of its clients in any or all of the aforementioned securities. Yield is target per annum. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities. 17 JPM Global Emerging Markets Income Trust plc - Portfolio breakdown Regional breakdown Country breakdown Sector breakdown Source: J.P. Morgan 31st August 2013. The strategy is an actively managed portfolio; holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. Exposure may not add up 100% due to gearing. ... Mid cap exposure to Emerging Markets 18 JPM Global Emerging Markets Income Trust plc - Performance Annualised performance to 31st July 2013 (%) Fund Size: GBP 283 Million Excess returns (%) +0.8 +5.0 +9.3 +12.4 Source: J.P. Morgan Asset Management, Net of Fees, NAV to NAV gross income reinvested, GBP. Inception date 28 July 2010. Excess return is calculated geometrically. Past performance is not an indication of future performance. 19 +8.9 +9.1 Biography Richard Titherington Richard Titherington is the Chief Investment Officer and Head of the Emerging Markets Equity Team. An employee since 1986, Richard transferred to the Pacific Regional Group in 1994. He was appointed as a managing director in April 2001 and appointed head of the global emerging markets business in December 2001. Prior to 1994 Richard was a US and international pension fund manager, working in the UK until he transferred to Hong Kong in 1992. Before joining the firm, Richard spent two years as an analyst with UKPI in London. Richard obtained an M.A. in politics, philosophy and economics from Oxford University. Omar Negyal Omar Negyal is a Portfolio Manager on the Emerging Markets Equity Team. Omar joined in October 2012. He has 14 years’ experience in Emerging Markets, with previous analyst and portfolio manager roles at HSBC Global Asset Management, Lansdowne Partners and F&C Asset Management. Omar has an MA, MEng in Chemical Engineering from the University of Cambridge and is a CFA Charterholder. . There can be no assurance that the professionals currently employed by J.P. Morgan Asset Management will continue to be employed by J.P. Morgan Asset Management or that the past performance or success of any such professional serves as an indicator of such professional's future performance or success. Investment ideas Prospective yield: 2.3% Taiwan, Consumer Staples Operator of 7/11 Taiwan, the largest CVS chain with a dominant share, generating strong cash flows. Robust growth from Starbucks (Taiwan, Shanghai), President Pharm, and 7/11 Philippines. Tupras Turkiye Petrol Rafinerileri Banco do Brasil President Chain Store Prospective yield: 7.8% Brazil, Financials The largest Brazilian bank with the biggest retail branch network in Brazil, offering diversified financial service activities High single digit growth projected Prospective yield: Turkey, Industrials The only domestic oil refiner in Turkey, benefitting from a highly favourable industry structure resulting in high profitability. High single digit growth projected Source: Bloomberg. Company accounts. August 2013 The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not positions on behalf of its clients in any or all of the aforementioned securities. 21 9.2% JPMorgan Global Emerging Markets Income Trust plc: Risk profile Risk Profile – – – Investments in emerging markets may involve a higher element of risk due to political and economic instability and underdeveloped markets and systems Exchange rate changes may cause the sterling value of underlying overseas investments to go down as well as up There can be no guarantee that the targeted yield of 4% will be achieved and therefore such forecasts are not a reliable indicator of future performance Please refer to the Fund’s prospectus for more information relating to the Fund. 22 J.P. Morgan Asset Management Contact Luke Richdale, Client Portfolio Manager – Emerging Markets Equities Emily Whiting, Client Portfolio Manager – Emerging Markets Equities +44 (0) 20 7742 8535 +44 (0) 20 7742 3508 [email protected] [email protected] Claire Peck, Client Portfolio Manager – Emerging Markets Equities Eric Bian, Client Portfolio Manager – Emerging Markets Equities +44 (0) 20 7742 3512 +44 (0) 20 7742 4036 [email protected] [email protected] Please note, telephone lines may be recorded and monitored for security and training purposes. 23 J.P. Morgan Asset Management This is a promotional document and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P.Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the product(s) or underlying overseas investments. Both past performance and yield may not be a reliable guide to future performance. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment product(s), there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide. You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website http://www.jpmorgan.com/pages/privacy. Investment is subject to documentation (Investor Profiles and Terms and Conditions), copies of which can be obtained free of charge from JPMorgan Asset Management Marketing Limited. Issued by JPMorgan Asset Management Marketing Limited which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 288553. Registered address: 25 Bank St, Canary Wharf, London E14 5JP. 24