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Aviva investors Aviva investors Presentation Transcript

  • PAID TO WAITCHRIS MURPHYAviva Investors UK Equity and Aviva Investors UK Equity Income Funds.This document is approved for investment professionals only. It is not to be viewed by or used with retailclients. Standard & Poor’s AA rating s for both funds as at 30 September 2011.
  • A CHART FROM JANUARY 2010 US: cumulative jobs lost since December 2007 2 2 1 1 0 0 Construction -1.6m = 21% of total -1 -1 -2 Retail -0.9m = 13% of total -2Number of jobs Financial -0.5m = 8% of total -3 -3 -4 Total -4 -5 loss of -5 7.3m jobs Other -6 -6 -7 -7 -8 -8 Source: Thomson Financial and Aviva Investors Data as at January 2010 Page 1
  • AMERICA IS IN SAFE HANDS Page 2
  • EUROPE IS IN SAFE HANDS Page 3
  • SO WHAT SHOULD YOU EXPECT Page 4
  • AS FOR THE UK Page 5
  • THE ‘SCORES ON THE DOORS’ OR STOP READING Region Flexible Sensible Policy Score Monetary Fiscal Policy makers Policy coordinated USA yes no no 1 Europe no no no 0 UK yes yes yes(..ish) 2 1/2Note: These are the views of Aviva Investors as at 30 September 2011 Page 6
  • THE UK…..IT’S LARGE AND GLOBAL Top 15 Equity Markets (MSCI Weight) % Percentage of 2009 Revenues by RegionSource: Citi. Factset & CIRA as at 30 September 2011 Page 7
  • FINANCIAL HEALTH - MARGINSMarket ex Financials Market ex Financials ex Commodities Year YearSource: Datastream & CIRA as at 30 September 2011*E: estimated Page 8
  • FINANCIAL HEALTH – BALANCE SHEETS Market ex Financials Market ex Financials ex Commodities% % Year Year Source: Datastream & CIRA as at 30 September 2011 *E: estimated Page 9
  • FINANCIAL HEALTH- CASH FLOWUK Free Cash Flow Yield & Corp Bond Yields UK Return of capital, Annual % Year YearSource: Factset & CIRA as at 30 September 2011 Page 10
  • VALUATION EV/EBITDA UK Market - Price to BookEV/EBITDA % Price/Book % Year Year Source: Datastream & CIRA as at 30 September 2011 *E: estimated Page 11
  • VALUATION VS THE WORLD UK vs. World Price/Earnings UK vs. World Dividend Yield Price/Earnings (%) Dividend Yield (%)Source: Factset & CIRA as at 30 September 2011 Page 12
  • GROWTH AND REVENUERegional EPS Growth 2011E UK Share of EM Revs. vs. World %Source: IBES, MSCI, Factset, CIRA as at 30 September 2011 Page 13
  • EQUITY YIELDSHistoric Dividend Yield Dividend Yield vs. Gilt Yields Year YearSource: Datastream & CIRA as at 30 September 2011 Page 14
  • YIELD -MIND THE GAP UK Dividend Yield Ratio Yield % YearSource: Global Financial Data, Datastream & CIRA as at 30 September 2011 Page 15
  • LOW RATINGS LEAD TO HIGH RETURNS Price/Earnings and 10 year real equity returns 20 Av erage 10 y ear real total return (% per annum) 1974 Avg. 10 year Total Return (% per annum) 15 1979 1976 1981 1983 1980 1977 1990 1975 1989 1987 10 1985 1986 1991 5 1973 1994 1992 y = -0.9006x + 20.151 1997 1993 2 R = 0.7333 2000 0 1970 1999 1972 1971 1998 Starting period PER (X) -5 2 4 6 8 10 12 14 16 18 20 22 24 26 28 Starting period PER (X)Source: Oriel Securities as at 30 September 2011 Page 16
  • MEAN REVERSION WHAT GONE DOWN MUST GO UP! 800 1950s: post-war boom, strong 1980s/90s: financial Roaring 20s: consumption, introduction of mutual funds deregulation, disinflation, economic peace, prosperity, stron encouraged small investors back to stability, technological 600 g economic market, expansion of commercial aviation, new advances, new paradigm, M&A growth, technological technology (e.g. chemicals, electricals), merger improvements, strong wave, leading to Nifty Fifty leadership income gains, stocks bought on "margin" 400Average Reversion 200 0 rolling 10 year nom UK stock returns rolling 10-year real UK stock returns -200 1881 1891 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 Year Source: CIRA as at 30 September 2011 Page 17
  • UK EQUITIES ARE CHEAP. Page 18
  • Important information This document is approved for investment professionals only. It is not to be viewed by or used with retail clients. Except where stated as otherwise, the source of all information is Aviva Investors as at 30 September 2011. Any future returns and opinions expressed are those of Aviva Investors and are based on the internal forecasts of Aviva Investors and should not be relied upon as indicating any guarantee of return from an investment managed by Aviva Investors. No part of this document is intended to constitute advice or recommendations of any nature. Where performance has been illustrated it is not intended to be a guide to the future. The value of an investment in a fund and the income from it can go down as well as up. For full information about the risks involved when investing in this product please refer to the simplified prospectus. A copy can be downloaded from our website or is available from us on request. Aviva Investors is a business name of Aviva Investors UK Fund Services Limited, the Authorised Fund Manager. Registered in England No. 1973412. Authorised and regulated by the Financial Services Authority. FSA Registered No. 119310. Registered address: No 1. Poultry, London EC2R 8EJ. An Aviva company. www.avivainvestors.co.uk CI061691 10/2011