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    20131017 londres sp_eco_uk_en 20131017 londres sp_eco_uk_en Presentation Transcript

    • Citywire Wealth Manager Retreat 2013 17 October 2013 1
    • Simon Pickard Head of Emerging Markets Equities Ed Cole Analyst EMEA 2
    • Who are we? 3
    • Emerging markets is at the heart of our fund management 2011 2007 Carmignac Emerging Patrimoine Carmignac Emerging Discovery 1997 1989 Carmignac Emergents Carmignac Investissement Carmignac Patrimoine 4
    • Carmignac Emergents: Over 16 Years of Performance, 3 Fund Management Teams 1997-2003 2003 - SEPTEMBER 2008 600 500 400 SEPTEMBER 2008-… IMPLEMENTATION OF A NEW HIRING OF A NEW ANALYST (ASIA) 2001 DAVID YOUNG PARK HIRING OF AN ANALYST (ASIA) WEN ZHANG-GOLDBERG 03/02/1997 LAUNCH OF CARMIGNAC EMERGENTS FUND MANAGEMENT TEAM Carmignac Emergents +368,24% 300 MSCI EM (Eur)* +78,63% 200 100 OBJECTIVE TEAM 0 Edouard CARMIGNAC Eric LE COZ Seek of a maximal performance Growth Fund *From 01/ 01/2013 the equity index reference indicators are calculated net dividends reinvested. Past performance is not a reliable indicator of future performance and can vary over time. Source: Carmignac Gestion, 30/09/2013 Basis 100 as of 03/02/1997 Wen ZHANG GOLDBERG Manager David YOUNG PARK Analyst Seek of a maximal performance Growth Fund 5 + 4 EM Fund Managers/Analysts Simon PICKARD Xavier HOVASSE Manager David YOUNG PARK Haiyan LI-LABBÉ Edward COLE Seek of outperformance compare to performance indicator with lower volatility Blend Fund
    • A Compact, Experienced and Versatile Fund Management Team MULTISTRATEGY EUROPEAN EQUITIES BOND MANAGEMENT Frédéric LEROUX Global Fund Manager Rose OUAHBA  Head of Team  Fund Manager Laurent DUCOIN  Head of Team  Fund Manager Laurent CHEBANIER Analyst Country Risk Charles ZERAH Fund Manager François-Joseph FURRY Fund Manager Julien CHERON Quantitative Analyst Carlos Andres GALVIS Fund Manager Edouard CARMIGNAC Chairman – Fund Manager EMERGING EQUITIES Samir ESSAFRI Fund Manager SECTOR ANALYSTS Markus KULESSA Analyst Keith NEY Fund Manager Antoine COLONNA Analyst Consumer sector Caroline SLAMA Credit Analyst Matthew WILLIAMS Analyst Financial Sector Pierre VERLÉ Credit Analyst COMMODITY EQUITIES David FIELD  Head of Team  Fund Manager Tim JAKSLAND Analyst Innovation Sector Simon LOVAT Analyst Vincent STEENMAN Analyst Industry Sector 6 Simon PICKARD  Head of Team  Fund Manager Xavier HOVASSE Fund Manager David YOUNG PARK Fund Manager Haiyan LI-LABBÉ Analyst China and Taiwan Edward COLE Analyst EMEA
    • Key Allocation Decisions for Emerging Markets Consumer Cyclical Rotation Non-Benchmarked Financials Latin America opportunities Exposure Management 7
    • Consumer 8
    • Why do we think that an Emerging fund should have consumer stocks in the portfolio? Very cash generative businesses… Name 1 2 3 4 5 6 6 8 9 10 11 12 13 14 15 16 17 18 19 20 Source Country of Citizenship Carlos Slim Helu & family Bill Gates Amancio Ortega Warren Buffett Larry Ellison Charles Koch David Koch Li Ka-shing Liliane Bettencourt & family Bernard Arnault & family Christy Walton & family Stefan Persson Michael Bloomberg Jim Walton Sheldon Adelson Alice Walton S. Robson Walton Karl Albrecht Jeff Bezos Larry Page Telecom Microsoft Zara Berkshire Hathaway Oracle diversified diversified diversified L'Oreal LVMH Wal-Mart H&M Bloomberg LP Wal-Mart casinos Wal-Mart Wal-Mart Aldi Amazon.com Google Mexico USA Spain USA USA USA USA Hong Kong France France USA Sweden USA USA USA USA USA Germany USA USA Source: Forbes 9 Amongst the 20 richest people in the world, 10 run highly cash generative consumer companies
    • Carmignac Emergents: Key Changes by the Fund Management Team 60% Change in our consumer, commodity and financial sector allocation in Carmignac Emergents 50% Consumer 40% 30% 20% Finance 10% Commodities 0% Source: Carmignac Gestion, 30/09/2008 to 30/09/2013 10
    • The outperformance of our defensive stock selection… … Illustrates the value added in our stock-picking process 450 Performance of Carmignac Emergents’ consumer stock selection Consumer stocks in Carmignac Emergents 400 350 Consumer stocks in the MSCI Emerging Markets 300 250 200 MSCI Emerging markets 150 100 50 0 Source: Carmignac Gestion, Bloomberg, 30/09/2013 11
    • Consumer Staples: we should not be complacent with valuations Fd/Bev/Tob, 12m fwd P/E relative to domestic market EM Europe US Source: Thomson Reuters, Credit Suisse, septembre 2013 12
    • A more balanced consumer staples portfolio Q3 2013: stocks we have reduced Evolution of the consumer staples weighting in Carmignac Emergents 35%         34% 33% 32% 31% 30% Ambev (Brazil) CP All (Thailand) Femsa Units (Mexico) ITC (India) LG Household (South Korea) Shoprite (South Africa) United Spirits (India) Want Want China (China) Q3 2013: stocks we have reinforced 29%  Grupo Paõ de Açucár (Brazil)  Sabmiller (South Africa) 28% 27% 26% Q3 2013: stocks we have maintained 25% 12/11 04/12 08/12 12/12 Source: Carmignac Gestion, 30/09/2013 13 04/13 08/13  Cosan (Brazil)  Jeronimo Martins (Poland)
    • Cyclical Rotation 14
    • Reinforcement on pro-cyclical stocks AUTOMOBILE  Isuzu Motors (Japan)  Hyundai Motors (South Korea)  Tata Motors (India) AUTOMATION Fanuc (Japan) Cyclical stocks EXPORTERS Embraer of Brazil (Brazil) LOGISTIC / TRANSPORTS Globaltrans (Russia) 15
    • Non-Benchmarked Financials 16
    • Evolution of our financial exposure over time From development property companies to diversified banks % of assets 30% 25% 20% 15% 10% 5% 0% Diversified Banks Source: Carmignac Gestion, 30/09/2013 17 Properties
    • A more concentrated portfolio on financials, proof of our selectivity for countries that have not experienced the credit excesses of the 90’s Carmignac Emergents: breakdown of financial sector 3.7% MSCI Emerging Markets: breakdown of financial sector Others* 4,7% 2.3% 1.4% 2.0% 1.7% 0.7% 18.2% 13.2% 21% of Carmignac Emergents Real Estate 22% of MSCI Emerging Markets Diversified Banks Multisectoral Holdings * Others: Companies feat. Real-estate, Regional Banks, Savings and Mortgages, other diverse financial services, specialized financial institutions, Consumer Credit, Deposit Banks, Investment banking, diversified capital markets, casualty insurance, diversified realestate activities, Residential REIR, diversified REIT Source: Carmignac Gestion, 30/09/2013 18 Life Insurance
    • Focus on markets where credit creation has been muted over the past 5 years Private Credit Growth (% y/y) 25% 20% Grupo Banorte Banco Santander Mexico ICICI Bank IndusInd Bank 15% 10% 5% Erste Bank 0% -5% -10% Hungary Mexico India Brazil Source: Anderson, June 2013 19 China Russia Indonesia
    • The LATAM Opportunity 20
    • Amongst Emerging Markets, Latam is the big winner over the past 13 years Market performance LATAM ME/Africa Central Eastern Europe Asia Source: Emerging Advisors Group, April 2013 Base 100: 01/01/ 2000 21
    • Our positioning on Latin America in our Emerging markets Equity Funds MEXICO       COLOMBIA Femsa Units Grupo Banorte Banco Santander TF Administrador Mexichem Promotora        PERU     Alicorp Inretail Peru Corp Credicorp Intergroup Financial BRAZIL         CHILE  Cerveceria  CIA Cervecerias Unidas  Embotelladora Andina Carmignac Emergents Carmignac Emerging Discovery Source: Carmignac Gestion,30/09/2013 Almacenes Éxito Banco Davivienda Bancolombia Cementos Argos Cemex Latam Holdings Gran Tierra Energy Pacific Rubiales Energy 22 Ambev Cosan Grupo Paõ de Açucar CCR Ecorodovias Embraer General Shopping Brasil Rossi Residencial
    • One of our favorite markets: Colombia Benefiting from infrastructure developments… Colombian stocks: 9.3% of Carmignac Emerging Discovery Private Financial Companies 1.3% Colombia: Four Lane Highways to Build (Kilometers) Cement companies & oil producer 2.2% 5.8% Consumer goods Cementos Argos & Cemex Latam should benefit from a massive infrastructure spending program announced by President Santos last year. Source: Carmignac Gestion, 30/09/2013 23
    • Risk Management 24
    • Carmignac Emergents: active management of our exposure 1 SHORT POSITIONS on Hang Seng China Enterprises, S&P 500, Bovespa, Nifty indexes… 110% 2 100% 90% 3 2 4 1 SHORT POSITIONS on Nifty, S&P500 and MSCI Emerging Markets indexes… 5 80% 70% 3 60% 50% 40% 4 30% 20% 10% 5 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Source: Carmignac Gestion, 30/09/2013 25 SHORT POSITIONS on Nifty, Kospi, MSCI Taiwan semi conductor indexes… SHORT POSITIONS on Bovespa, Hang Seng , Kospi, Nifty, Turk ISE and Russian index SHORT POSITIONS on Bovespa, Hang Seng , Kospi, Nifty, Turk ISE, MSCI Taiwan index
    • Improvement in the portfolio liquidity… … by refocusing on large & mid caps Capitalization breakdown of Carmignac Emergents 100% CARMIGNAC EMERGING DISCOVERY CREATION SIMON PICKARD’S ARRIVAL SMALL CAPS AND CASH REDUCTION 90% 80% 70% 60% MID AND 50% LARGE CAPS INCREASE 40% 30% 20% 10% 0% Large Medium Small Source: Carmignac Gestion, 30/09/2013 26 Cash and others
    • Carmignac Emergents: a very liquid fund Time to liquidate 90% of the portfolio (using 30% of the 3 months average volume) 120% 100% 100.0% 80% 3/4 of the portfolio can be liquidated in less than 4 days 66.6% 60% 45.3% 40% 32.5% 24.4% 20% 19.5% 15.7% 12.3% 9.4% 0% Day 0 Day 1 Day 2 Day 3 Day 4 Source: Carmignac Gestion, 14/10/2013 27 Day 5 Day 6 Day 7 Day 8
    • Excellent Risk-Return profile of our fund range Performance/volatility over 5 years 65% Carmignac Emerging Discovery 60% Performance 55% 50% Carmignac Emergents 45% 40% MSCI Emerging Markets 35% 30% 17.0% 17.5% 18.0% 18.5% 19.0% 19.5% Volatility Past performance is not a reliable indicator of future performance and can vary over time. Source: Morningstar, 30/09/2013 28 20.0% 20.5% 21.0% 21.5% 22.0%
    • Appendix 29
    • Our strategy Non-benchmarked, discipline, expertise… 30
    • Our Emerging Markets Fund Range is Simple and defined Carmignac Emergents Carmignac Emerging Patrimoine (equity part) 49 stocks in large/midcap strategy Carmignac Emerging Discovery 62 stocks in mid/small cap and Frontier markets strategy No stock in common between the two strategies Source: Carmignac Gestion, 30/09/2013 31
    • Carmignac Emergents: A non-benchmarked approach 65% Active share of the Fund vs. its benchmark 14% 13% 60% 12% 55% 11% 50% 10% 45% 9% 40% 8% Source: Carmignac Gestion, 09/10/2013 32 Coverage of the Fund vs. its benchmark
    • A large universe, giving us freedom We are currently invested in 33 countries Russia Poland Czech Rep. Slovenia Albania Turkey Israel Mexico Colombia Peru UAE Saudi Arabia Nigeria Kenya Tanzania Brazil China South Korea Taiwan Philippines Vietnam Malaysia Sri Papua New Thailand Lanka Indonesia Guinea Mauritius India Chile South Africa Carmignac Emergents Carmignac Emerging Discovery Source: Carmignac Gestion, 30/09/2013 33 Carmignac Emergents & Carmignac Emerging Discovery
    • Fund management with strong long-term convictions An equal-weighting discipline and a more concentrated portfolio Breakdown of the stocks weighting in Carmignac Emergents 43 45 MARCH 2008 97 STOCKS 40 Number of stocks 35 30 25 20 SEPTEMBER 2013 49 STOCKS 90% of our stocks represents between 1 and 3% of the portfolio 26 19 14 15 14 9 10 7 5 5 2 0 2 0 1 1 1 0 0-0,5 0,5-1 1-1,5 1,5-2 March 2008 Source: Carmignac Gestion, 30/09/2013 34 2-2,5 2,5-3 September 2013 3-3,5 3,5-4 2 Weighting in the portfolio (in %)
    • A defensive core portfolio sustained by non cyclical and quality stocks… Sector breakdown of Carmignac Emergents SIMON PICKARD’S ARRIVAL 100% 90% STRONG NON-CYCLICAL 80% STOCKS WEIGHTING INCREASE 70% 60% RECENT INCREASE OF 50% OUR CYCLICAL STOCKS 40% 30% REDUCTION OF 20% THE FINANCIALS AND 10% COMMODITIES 0% WEIGHTING Commodities Financials Source: Carmignac Gestion, 30/09/2013 35 Cyclicals Non-cyclicals
    • Performance Attribution: Geographic Allocation vs. Stock-Picking Carmignac Emergents: Relative performance contribution 12% 10% Stock-Picking 8% 6.2% 1.2% 6% 4% 2% Geographic Allocation 7.4% 3.4% 5.8% 4.4% 1.3% 0% -0.6% -0.6% -2% -1.9% 2012 2013 -4% 2009 2010 Past performance is not a reliable indicator of future performance. Performance may vary over time. Source: Carmignac Gestion, 30/09/2013 2011 36
    • Efficient stock selection: What do we look at? Selected qualitative criteria Selected valuation measures   Low capital intensity (high ROIC) Cash realization ratio i.e. cash flow well in excess of net income…  Adjusted FCF yield i.e. after maintenance, not total capex    Intense focus on profitability Sensible funding and capital management High levels of equity ownership management/staff …    PER vs. diluted EPS growth and vs. market Price to Book Value vs. ROE and BVPS growth DCF for high growers; cash diluted yield…   High grade deposits Infrastructures…   EV and Capex remaining / Ebitda P/NPVs (especially for the gold space)…    Net Working Capital Patents Competitive edge and its sustainability…   FCF generation Price to Book CONSUMER FINANCIALS COMMODITIES TECHNOLOGY 37
    • CARMIGNAC EMERGENTS 130 Performance over 3 years 120 110 100 90 Carmignac Emergents* +4.99% MSCI Emerging Markets** -5.84% 80 Simon PICKARD  A Core – Satellite approach  A large and mid cap fund: average weighted market cap of EUR19.3bn  Assets: 1710.01 Million €  50 holdings * The fund performance indicated is based on the A EUR acc Share Class ** From 01/01/2013, the equity index reference indicators are calculated net dividends reinvested. Past performance is not a reliable indicator of future performance. Performance may vary over time. Source: Carmignac Gestion, 31/08/2013; Base 100: 31/08/2010 38
    • Main movements in the portfolio Our strong geographic diversification: our frontier markets exposure 39
    • CARMIGNAC EMERGING DISCOVERY Performance over 3 years 120 Carmignac Emerging Discovery(1) 1.00% 110 100 Reference indicator(2) -9.44% 90 80 Xavier Hovasse David Park 70 09/10 03/11 09/11 03/12 09/12 03/13 09/13  A “frontier” markets exposure  A small and mid cap fund: average weighted market cap of EUR3.3bn  Assets : 312.49 Million €  62 positions (1) The fund performance indicated is based on the A EUR Acc Share Class (2) 50% MSCI EM Mid Cap NR (EUR) + 50% MSCI EM Small Cap NR (EUR) ) Past performance is not a reliable indicator of future performance. Performance may vary over time. Source: Carmignac Gestion 40
    • Carmignac Emerging Discovery: Geographic Diversification Giving Access to Frontier Markets Carmignac Emerging Discovery: Geographic Breakdown Frontier markets 40% Brazil, China, India 22% Colombia Others(2) Saudi 7.9% Arabia 3.1% India China 5.2% 5.4% 12.5% Peru 9.3% Mexico Philippines Africa 7.5% Brazil 7.0% 3.6% Others (1) 18.6% 3.8% Liquidity: 5% of the fund (1) South Africa, Singapore, South Korea, Taiwan (2) Albania, Papua New Guinea, Slovenia, Sri Lanka, Vietnam, United Arab Emirates (3) Kenya, Nigeria, Mauritius,Tanzania Source: Carmignac Gestion, 30/09/2013 Traditional markets 33% 41 Turkey 1.2% Indonesia Chile 2.5% 3.2% 3.8% Thailand
    • Carmignac Emerging Discovery: a very liquid fund Time to liquidate 90% of the portfolio (using 30% of the 3 months average volume) 120% 100% 80% 60% 100.0% 75.9% 2/3 of the portfolio can be liquidated in less than 5 days 56.4% 44.0% 40% 20% 36.0% 30.6% 26.2% 22.3% 19.4% 17.4% 0% Source: Carmignac Gestion, 16/09/2013 42 15.8% 14.5% 13.4% 12.5% 11.6% 10.8% 10.2% 9.5%
    • Saudi Arabia Poland Philippines Hong Kong Thailand Israel China South Africa Taiwan Turkey Malaysia South Korea Singapore Colombia Czech Rep. Russia Mexico Hungary Indonesia India Chile Brazil UAE Argentina Bulgaria Uruguay Pakistan Nigeria Romania Estonia Serbia Vietnam Latvia Kenya Mauritius Qatar Lithuania Panama Kuwait Tanzanie Slovenia Ecuador Jordanie Sri Lanka Bosnia Kazakhstan Tunisia Egypt Ukraine Peru Over the last 12 months, Frontier Markets offered better return than traditional markets Large vs. small market returns 12-month equity performance (national index, USD terms) Source: Emerging Advisors Group, October 2013 43
    • Frontier Markets: Still Undiscovered Market cap/GDP ratios (since 1988) Developed Markets Emerging Markets Frontier Markets Source: Datastream, IMF, Citigroup, September 2013 44
    • The increase of our Frontier Market exposure Breakdown of Carmignac Emerging Discovery 100% 80% 60% 40% 20% 0% Frontier BIC Source: Carmignac Gestion, 30/09/2013 45 Traditional
    • Disclaimer This presentation has been conceived for information purposes only and is intended to professional clients. It cannot be used for another purpose than the one it has been conceived for, and cannot be reproduced, distributed or communicated, partly or entirely, to third parties without prior written approval from Carmignac Gestion. This presentation is not an investment advice nor is it contractually binding. Due to their simplification, the information contained in this presentation are inevitably partial. This document may be subject to changes, without prior notice. Past performance does not guarantee future returns. The value of an investment can rise or fall with market fluctuations, and shareholders may lose, as the case may be, the amount originally invested. The fund performance indicated is based on the A EUR acc Share Class. Fees are included in the performance. The access to the products and services described in this presentation may be subject to restrictions towards some persons or countries. The risks and fees relative to the products are described in the KIID (Key Investor Information Document). The UCITS Funds presented in this presentation are authorized for distribution in the United Kingdom by the FCA. The Prospectus and KIID as well as annual reports of the UCITS Funds can be obtained free of charge from the Carmignac Gestion Luxembourg London Branch at: No. 29 Cornhill - LONDON EC3V 3NF The KIID must be given to the investor before any investment. Copyright : The data published in this presentation are the exclusive property of their owners as mentioned on each slide. Non contractual document, redaction achieved on 14/10/2013 Carmignac Gestion – Société Anonyme au capital de 15 000 000 € - RCS de Paris B 349 501 676 Agrément AMF n° GP 97-08 du 13/03/1997 24 Place Vendôme – 75001 Paris – Tel : +33 1 42 86 53 35 46