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0316 Managed Volatility Brochure Legg Mason Global Funds plc MANAGED VOLATILITY STRATEGIES DEFENDING RETURNS IN VOLATILE MARKETS Lower volatility stocks have historically outperformed the overall market on a risk adjusted basis over time*. A managed volatility strategy seeks to invest in the stock market by minimising steep price declines whilst participating on the upside. This would potentially translate into equity returns similar if not better than the market, with potentially attractive yields and lower volatility than traditional equity portfolios. PROTECT ASSETS DURING DOWNTURNS; ENHANCE OVERALL PORTFOLIO STABILITY • Market volatility in recent years has raised awareness that traditional strategies may not be enough to protect assets. • Low volatility products seems especially relevant in today’s unpredictable and low growth environment, being able to add value across a broad range of market conditions. • Investors are using low volatility strategies to complement core equity allocations or as core allocations themselves, with the goal of enhancing income while preserving capital and generating more stable long term returns. The Power of Numbers: Importance of Limiting Downside $100 $100 $100 Portfolio When portfolio falls A 10% Has to rise 11% to recover $90 $90 Portfolio When portfolio falls B $80 20% Has to rise 25% to recover $80 Portfolio When portfolio falls C $70 $70 Period 1 Period 2 30% Has to rise 43% to recover! Period 3 Source: Legg Mason, for illustrative purpose only and not representative of an actual portfolio. STRATEGY’S SOLUTIONS INVESTORS CONCERNS LOWER VOLATILITY Seeks to lose less in down markets whilst participating in up markets MARKET VOLATILITY STABLE PERFORMANCE CAPITAL PRESERVATION Aims to provide stability of returns across a variety of market environments NEED FOR INCOME Aims to generate potentially attractive yields above the benchmark ATTRACTIVE INCOME % PLEASE REFER TO IMPORTANT INFORMATION ON FINAL PAGE. LEGG MASON’S SUITE OF MANAGED VOLATILITY FUNDS SEEKS TO MANAGE VOLATILITY THROUGH A PROCESS THAT: Invests in stocks with characteristics indicative of return stability Recognise that downside protection and income are key drivers of long-term total return Blend quantitative and fundamental perspectives to help forecast volatility through time SELECTION FOCUSES ON DRIVERS OF PERFORMANCE STABILITY SOUND FINANCIAL HEALTH Helps reduce volatility in times of market stress Seek stocks that Pay dividends Have a history of dividend growth Exhibit consistent cash flows to support future dividend payment LOW MARKET SENSITIVITY Multiple inputs help to provide downside protection in volatile and declining markets Look for stocks that have relatively lower Geographic sensitivity (global and regional) Economic sensitivity (sector and industry group) Stock specific volatility ATTRACTIVE FUNDAMENTALS Combine fundamental characteristics to support return stability and outperformance Tilt portfolios toward stocks that have certain characteristics, such as ‒ Attractive valuations (Forecasted P/E EV/EBITDA) ‒ Strong sentiment (Earnings Estimate Revisions, Earnings Growth) ‒ Technical Support (Put/call ratios, Short interest) The Managed Volatility strategies are designed to potentially provide attractive yields and equity returns with lower volatility than traditional equity portfolios. The strategies combine downside protection with upside return potential using diverse risk perspective, including a fundamental view, while investing only in stocks that are expected to pay dividends. PLEASE REFER TO IMPORTANT INFORMATION ON FINAL PAGE. STRATEGY HIGHLIGHTS Managed volatility process that aims to provide downside protection with upside return potential Aims to provide stability of returns across a variety of market environments Potential to offer attractive income payouts on a monthly basis Potential to offer capital growth in equity markets Managed volatility strategies available across 3 distinct funds – Global, Europe and Asia Pacific ex Japan MANAGED VOLATILITY PERFORMANCE EXPECTATIONS Relative to a cap-weighted benchmark, this strategy has the potential to Market Direction Down Up Outperform in most markets Provide protection in down markets Lag in sharply rising and highly volatile markets Provide Market Like Returns Lag Market Modestly Outperform Outperform High Low Market Volatility SUITE OF LEGG MASON MANAGED VOLATILITY FUNDS AVAILABLE Managed Volatility Strategies Fund Name Investment Universe Annual Management Fee1 Fund Inception Date Benchmark Number of Holdings Global Europe Asia Pacific ex Japan Legg Mason QS MV Global Equity Growth and Income Fund Legg Mason QS MV European Equity Growth and Income Fund Legg Mason QS MV Asia Pacific ex Japan Equity Growth and Income Fund Dividend paying stocks in Primarily large cap stocks from Europe; may invest up to 20% in developed countries globally EM Europe Dividend paying stocks domiciled in Asia Pacific exJapan Up to 1.40% Up to 1.35% Up to 1.50% 29 December 2010 30 August 2002 25 February 2004 MSCI AC World Index (Net) MSCI Europe Index (Net) MSCI AC Asia Pacific ex Japan Index (Net)^ 110 – 170 75 – 125 125 – 175 PLEASE REFER TO IMPORTANT INFORMATION ON FINAL PAGE. 0316 Managed Volatility Brochure Legg Mason Global Funds plc Fund Details and share classes Brandywine Global Legg Mason QS MV Global Equity Growth and Income Fund ClearBridge Investments Class A Distr. (M) USD Plus Martin Currie Class A Distr. (M) SGD (Hedged) Plus3 ISIN Bloomberg IE00BYML7R43 LMGEADS ID Latest Annualised Dividend Rate2 4.75% Not incepted yet4 Permal ISIN Bloomberg Latest Annualised Dividend Rate2 Royce & Associates Class A Distr. (M) USD (Hedged) Plus3 IE00BQJZX424 LMEEAMU ID 4.25% Western Asset Management Class A Distr. (M) SGD (Hedged) Plus3 IE00BWDBJ516 LMEEAMS ID 4.25% ISIN Bloomberg Latest Annualised Dividend Rate2 IE00B19Z5X02 LEPEUAA ID N/A IE00BQJZWZ67 LMPEMPU ID 4.25% QS Investors RARE Infrastructure www.leggmason.com.sg Legg Mason QS MV European Equity Growth and Income Fund Legg Mason QS MV Asia Pacific ex Japan Equity Growth and Income Fund Class A Acc. USD Class A Distr. (M) USD Plus3 Class A Distr. (M) SGD (Hedged) Plus3 Not incepted yet4 * Source: Benchmarks as Limits to Arbitrage: Understanding the Low-Volatility Anomaly (22 March 2010), Malcolm Baker, Brendan Bradley, and Jeffrey Wurgler, archive.nyu.edu/fda/bitstream/2451/29593/2/Benchmarks15.pdf. Academic studies have shown that lower-volatility stocks have outperformed higher-volatility issues on both an absolute and risk-adjusted basis since at least the 1920s, across a variety of market conditions. Source: Legg Mason and QS Investors. All data as at March 2016 unless otherwise stated. 1Applicable to class A Shares only. 2Source: BNY Mellon, as at 21 March 2016, based on latest Annualised Dividend Rate which is paid out monthly. Annualised Dividend Rate = (Dividend per Unit / Fund NAV as of Ex-Date) x (365 / Days in distribution period) x 100%. Dividend rate is not indicative of fund performance. Past dividend rate is not indicative of future dividend rate. Net asset value of the funds may be volatile subject to market factors. 3Distributing Plus share classes may pay dividend out of capital. The payment of dividends out of capital effectively amounts to a return or withdrawal of an investor´s original capital investment or of capital gains attributable to that original investment. Such distribution will result in a corresponding immediate decrease in the Net Asset Value of these share classes. 4This Share Class has not been launched as at the date of the Singapore Prospectus. Investors may wish to check with authorised dealers or sub-distributors in Singapore on the future availability of this Share Class. ^ Prior to 13 May 2015, the benchmark was MSCI AC Asia ex Japan (Net) Index. IMPORTANT INFORMATION Source: QS Investors and Legg Mason. The funds are sub-funds of Legg Mason Global Funds Plc, an open-ended umbrella investment company constituted in Ireland. This document, provided by Legg Mason Asset Management Singapore Pte. Limited (“Legg Mason”), is for information only and does not constitute an offer or solicitation to buy or sell any units in any fund. The funds may invest in certain types of derivative instruments for efficient portfolio management purposes. Please refer to the prospectus for more information. Distributing Plus share classes may pay dividend out of capital. The payment of dividends out of capital effectively amounts to a return or withdrawal of an investor´s original capital investment or of capital gains attributable to that original investment. Such distribution will result in a corresponding immediate decrease in the Net Asset Value of these share classes. The prospectus of the funds is available and may be obtained from Legg Mason or its authorised distributors. Investors should read the prospectus prior to any subscription. All applications for units in the funds must be made on the application forms accompanying the prospectus. Past performance is not necessarily indicative of future performance. All investments involve risk, including possible loss of principal. The value of the units in the fund and the income accruing to the units, if any, may fall or rise. Distribution of this document may be restricted in certain jurisdictions. Any persons coming into possession of this document should seek advice for details of, and observe such restrictions (if any). This document does not constitute the distribution of any information or the making of any offer or solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized or to any person to whom it is unlawful to distribute such a document or make such an offer or solicitation. This fund is not available to US citizens, residents or greencard holders and may not be available in all jurisdictions. Neither Legg Mason nor any officer or employee of Legg Mason accepts any liability whatsoever for any loss arising from any use of this document or its contents. The information in this document is proprietary and may not be used other than by the intended user. This document may not be reproduced, distributed or published without prior written permission from Legg Mason. The mention of any individual securities / funds should neither constitute nor be construed as a recommendation to purchase or sell securities, and the information provided regarding such individual securities / funds is not a sufficient basis upon which to make an investment decision. Portfolio allocations, holdings and characteristics are subject to change at any time. Although information has been obtained from sources that Legg Mason believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. Legg Mason, its affiliates, officers or directors, may have an interest in the acquisition or disposal of the securities mentioned herein. The views expressed are opinions of the portfolio managers as of the date of this document and are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. These opinions are not intended to be a forecast of future events, a guarantee of future results or investment advice. Legg Mason Asset Management Singapore Pte. Limited is the legal representative of Legg Mason, Inc. in Singapore. Registration Number (UEN) : 200007942R. SG160349