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New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYNew CapitalAsia Pacific Equity Income FundJune ...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYEFG Asset Management2EFG Asset Management (EFGA...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY3Specialist Strategies for Thoughtful Investors...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYThe aim is to achieve both capital appreciation...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYMSCI Asia ex-Japan – Dividend yield Cumulative ...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYHigh Dividend Yield vs Growth6 Q1 is the quarti...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYOutperformance of High Dividend StocksAsia-Paci...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYDividends & Cashflow8Asia-ex has deleverage sin...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYPortfolio Characteristics as at 31 May 2013Indi...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY10Weightings vs. BenchmarkSectorGeographyDivers...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYValue is ImportantDefinitions Factor Definition...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYOrica – Value in Cyclicals12Severe bear casewit...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYLong-Term Trends Support The Stock13 Source: Or...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYMSCI Asia ex-Japan:Relative PE of cyclicals, de...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYWhy Now?► High dividend yield stocks attractive...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYDividend Yields Attractive Relative to Asian Bo...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYPortfolio Positioning – Avoid Expensive Defensi...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYPerformance Since Inception18
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY► There is a LONG-TERM case to be made on high ...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYFund OverviewFund Structure UCITS IV – DublinDe...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYAppendix
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY22Tony Jordan and Investment Team ProfileOver 3...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYRegular Inflows as at end March 201323
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYInvestment Process24
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY25China Consumption Has a Much Bigger ScaleSour...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY26A Big Increase in Middle Income GroupSource: ...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYDCH Holdings (1828 HK)► DCH is a Chinese consum...
New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY28Important DisclaimersFor the purposes of dist...
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April 2013 institutional apei pitchbook citywire event

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Transcript of "April 2013 institutional apei pitchbook citywire event"

  1. 1. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYNew CapitalAsia Pacific Equity Income FundJune 2013FOR INSTITUTIONAL INVESTORS ONLY
  2. 2. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYEFG Asset Management2EFG Asset Management (EFGAM) is the assetmanagement arm of EFG International, a global privatebanking group headquartered in Zurich, Switzerland.It is an integral part of EFG International’s private bankingactivities, working closely with Client Relationship Officersand their clients. It is also a distinct, specialist assetmanager, providing a range of actively-managedinvestment solutions to professional advisors andinstitutional investors worldwide.The business prides itself on its long-term outlook, andseeks to earn the trust of clients based on independent,expert and objective advice.EFGAM’s investment professionals are based in London,Geneva, Zurich, New York, Hong Kong, Singapore andMiami, and manage circa USD 9 billion on behalf ofclients.An independently managed subsidiary of EFG International.
  3. 3. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY3Specialist Strategies for Thoughtful InvestorsEFGAM is an international advisor delivering leadinginvestment solutions for clients worldwide. With circa $9billion in assets under management, we have over 100investment professionals located around the world.Our range of funds span a broad spectrum of investmentoptions with circa $2 billion in assets.We offer a wide range of investment solutions reflecting thevaried needs and preferences of our clients.Our clients can access our investment solutions through avariety of product structures, including individual andinstitutional separate accounts, mutual funds and otherpooled investment vehicles.Figures as at end April 2013
  4. 4. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYThe aim is to achieve both capital appreciation and a high dividend yield in strong currencies.4New Capital Asia Pacific Equity Income Fund► Asia Pacific high dividend stocks have strong historical performance and low volatility► Asia offers relatively strong balance sheets and growth opportunities► Dividends are growing faster than in more developed markets► Regional currencies are likely to appreciate against the US$, due to better fundamentals► Universe of Asia Pacific stocks paying dividends is increasing rapidly► Portfolio aims to produce at least 1.5x market yield, for absolute return and yield reasons► Portfolio holdings have “quality” bias and a minimum market capitalisation to ensure liquidity► Diversification between countries and sectorsPhilosophy:Background:
  5. 5. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYMSCI Asia ex-Japan – Dividend yield Cumulative PerformanceMSCI-weighted US Dollar total return with quarterly rebalancing for MSCI UniverseSource: Factset alpha Tester, CLSA Asia-Pacific Markets5We focus on thisuniverse
  6. 6. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYHigh Dividend Yield vs Growth6 Q1 is the quartile with the largest value of that factor, Q2 is the second largestSource: Citi Investment Research and analysisHigh yield outperforms fastest growing stocks020040060080010001200Dec-00Dec-01Dec-02Dec-03Dec-04Dec-05Dec-06Dec-07Dec-08Dec-09Dec-10Dec-11Dec-12Div Yld Q1EPS Growth Q2EPS Growth Q1
  7. 7. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYOutperformance of High Dividend StocksAsia-Pacific ex-Japan with top quintile dividend yield (6m rebalancing)► Not only are stocks defensivebut they outperform on theway up as well► Outperforming strategy inAsia-Pacific in 5,10 and 20yearsSource: FactSet Compiled by EFGAM701002003004005006007008009001,000Nov-99May-00Nov-00May-01Nov-01May-02Nov-02May-03Nov-03May-04Nov-04May-05Nov-05May-06Nov-06May-07Nov-07May-08Nov-08May-09Nov-09May-10Nov-10May-11Nov-11May-12Investible UniverseMSCI Asia Pacific ex-Japan Index
  8. 8. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYDividends & Cashflow8Asia-ex has deleverage since 98 Cash flow is healthy enough to cover dividend
  9. 9. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYPortfolio Characteristics as at 31 May 2013Indicative ValuationsAUM: $131.04 million(31/05/2013)Average Market Cap:$26.9bnConcentrated portfolio of 40-50 stocks► Greater China: 52.5%China 12.5%Hong Kong 30.6%Taiwan 9.4%► Financials: 41%Source: Bloomberg, Factset, EFG.P/E Ratio Yield2011 2012 2013E 2011 2012 2013ENew Capital Asian Pacific Equity Income Fund 12.77 12.39 11.20 4.70 4.86 5.05MSCI Asia Pacific ex Japan 11.16 13.41 12.15 3.55 3.01 3.22Indicative valuations are based on Earnings and Yield estimates from Factset consensus earnings and yield estimates on a weighted averagebasis, and do not reflect commissions, fees or other charges. Fund inception: 14 January 20112013 are estimates9Holding WeightingHSBC Holdings Plc 4.20Sun Hung Kai Properties 4.03Swire Pacific Ltd 3.98China Construction Bank 3.58Dah Chong Hong 3.12Ind & Comm Bk Of China 3.11Smartone Telecommunications 3.10Malayan Banking Bhd 3.01AMP Ltd 2.97King Yuan Electronics Co Ltd 2.69
  10. 10. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY10Weightings vs. BenchmarkSectorGeographyDiversification between Countries and SectorsSource: Bloomberg, EFG. Data as at 31 May 2013
  11. 11. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYValue is ImportantDefinitions Factor DefinitionHYLE High Yield Low ExpensiveHYHE High Yield High ExpensiveHigh Yield Top 25% based on yield Price / Trailing Cash FlowLow Expensive Traditional Value Rank > 7, among high yieldHigh Expensive Traditional Value Rank < 4, among high yieldTraditional ValuePrice / Forward EarningsPrice / Trailing SalesDividend YieldPrice / Book Value11-200%-100%0%100%200%300%400%500%Aug-96Aug-97Aug-98Aug-99Aug-00Aug-01Aug-02Aug-03Aug-04Aug-05Aug-06Aug-07Aug-08Aug-09Aug-10Aug-11Aug-12HYLE_Return ( Equal Wght)HYHE_Return ( Equal Wght)MSCI NJAAsia ex Japan
  12. 12. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYOrica – Value in Cyclicals12Severe bear casewith prolongeddemand decline andmargin compressionFlat demand withreduction ofcapex and slightmargin declineFlat demand butwith a turnaround inMinova profitabilityFlat demand withsuccessful ramp up ofBurrup and Bontang(50% there already)Current Share Price
  13. 13. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYLong-Term Trends Support The Stock13 Source: Orica, ABARESGrowth in Australia (1982-2011)
  14. 14. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYMSCI Asia ex-Japan:Relative PE of cyclicals, defensive and financials14
  15. 15. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYWhy Now?► High dividend yield stocks attractive against Asian Government bond yields► In an environment of negative real interest rates investors are switching to stocks from fixedincome and cash► Short-term interest rates to remain low – Australia to lower rates further► China is stabilising, valuations very attractive► Strong balance sheets lead to mergers, buybacks and increased dividend payments► Banks offer an attractive investment in Asian consumer growth► Telecoms have renewed growth from data usage and 4G – Developed markets favoured► Good entry point for stocks benefitting from urbanisation and the rise of the middle class► Yield compression will continue to drive stocks higher BUT valuations important► China consumer related stocks to outperform2013 Themes15
  16. 16. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYDividend Yields Attractive Relative to Asian Bond YieldsSource: Merrill Lynch16
  17. 17. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYPortfolio Positioning – Avoid Expensive Defensives17 Source CIMBSpreads narrowing for the S-REITS
  18. 18. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYPerformance Since Inception18
  19. 19. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY► There is a LONG-TERM case to be made on high dividend yield stocks- In the long run, they offer more attractive returns than lower dividend yield stocks- They are also less volatile than lower dividend yield stocks► There is a CYCLICAL case to be made on high dividend yield stocks- Investors’ focus is turning to equities from bonds- The gap between the bond yield and the equity yield is at a historical low► High dividend yield approach works better in Asia than elsewhereSummary19
  20. 20. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYFund OverviewFund Structure UCITS IV – DublinDesignated Currency USDCustodian HSBC Institutional Trust Services (Ireland) LimitedInvestment Manager EFG Asset ManagementSubscriptions GAM Fund Management LimitedGeorge’s Court, 54-62 Townsend Street, Dublin 2, IrelandT: +353 (0) 1 609 3927 F: +353 (0) 1 611 7941New CapitalAsia Pacific EquityIncome FundCurrencyIncome orAccumulative?ISINManagementFeeMinimumInvestmentUSD Ord Inc USD Income IE00B4XBVM68 1.5% US$10,000EUR Ord Inc EUR Income IE00B4XP4D02 1.5% €10,000GBP Ord Inc GBP Income IE00B50MC376 1.0% GBP10,000USD/CNY HedgeOrd IncUSD (CNY Hedge) Income IE00B4YC7V94 1.5% US$10,000USD Inst Inc USD Income IE00B60RYK03 0.9% US$5,000,000USD Inst AccUSDAccumulative IE00B8H7RL96 0.9% US$5,000,000SGD Ord Inc SGD Income IE00B6VTV593 1.5% SGD$10,00020
  21. 21. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYAppendix
  22. 22. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY22Tony Jordan and Investment Team ProfileOver 30 years of investment experienceYears denote investment experience in industry► Tony joined EFGAM in 2010 as a Directorand is Portfolio Manager of the New CapitalAsia Pacific Equity Income Fund.► Prior to joining EFGAM, Tony co-foundedAtlantis Investment Management andmanaged the Asian Recovery Fund from1996-2009. From 1984-1996 Tony wasbased in Hong Kong with SchroderInvestment Management (HK) Ltd and servedas a director and portfolio manager for theSchroder Far East Growth Fund as well aspension funds and other specialist Asianmandates.► Tony is a non-executive director of the PXPVietnam Fund and the Vietnam EmergingEquity Fund. He has a BSC (Hons)Economics, London School of Economics.
  23. 23. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYRegular Inflows as at end March 201323
  24. 24. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYInvestment Process24
  25. 25. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY25China Consumption Has a Much Bigger ScaleSource: McKinsey Global InstituteIncomes are rising in developing economies faster, and at a greater scale, than at anyprevious point in history.1Time to increase per capita GDP in PPP terms from $1,300 to $2,600
  26. 26. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY26A Big Increase in Middle Income GroupSource: McKinsey Insights China► China’s middle incomeconsumer will reach166 million householdby 2010, double total ofUS, Japan andGermany.► The increase in middleincome consumer willsupport the demand fordiscretionary goods.
  27. 27. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLYDCH Holdings (1828 HK)► DCH is a Chinese consumer company primarily involved in auto retailing and servicing► Franchises include Audi, Honda, Toyota and Bentley► After sales market to provide increasing recurrent income► Probable spin off of the food and consumer products division► Demand for premium cars are picking up and inventory levels have improved2011 2012 2013 2014P/E 9.6 12.2 12.1 9.3Yield 3.8% 3.0% 3.2% 4.0%27Beneficiary of Chinese middle class spending.
  28. 28. New Capital Asia Pacific Equity Income FundFOR INSTITUTIONAL INVESTORS ONLY28Important DisclaimersFor the purposes of distribution to Institutional Clients, which are defined as those non-Retail Clients falling within the UK Financial Services Authority’s categories ofProfessional clients or eligible counterparties, this document has been approved andissued by EFG Asset Management (UK) Limited, which provides, manages andadministers the products and services described herein.EFG Asset Management (UK) Limited is authorised and regulated by the FinancialConduct Authority. EFG Asset Management (UK) Limited is registered in England andWales No 7389736 and a member of EFG International.The registered Office for EFG Asset Management (UK) Limited is Leconfield House,Curzon Street, London W1J 5JB.The Analysis and research in this publication is intended for the private use of the clientsand investors of EFG Asset Management (UK) Limited. The information and datacontained in this publication has been obtained form sources believed to be reliable, butis not guaranteed. Past performance is not necessarily a guide to future performance.EFG Asset Management (UK) Limited expressly disclaims any liability, includingincidental or consequential damages, arising from errors or omissions in this publication.Reproduction of this publication, either in whole or in part, is expressly prohibited withoutthe written permission of EFG Asset Management (UK) Limited. The research andanalysis included herein has been procured by EFG Asset Management (UK) Limited forits own purposes and may have been acted upon for their own purposes. Data used inthis publication has been obtained from a variety of sources including Bloomberg,Thomson Reuters, OECD, World Bank, IMF, ISI.

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