Your SlideShare is downloading. ×
0
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Barclays capital
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Barclays capital

1,203

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,203
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
52
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. BARCLAYS CAPITAL FUND SOLUTIONS March 2011 Barclays Capital Research Best Investable Ideas Global Research in action For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors This document contains limited information about the strategy. Further details are available on request.
  • 2. Contents• Macro Overview• Research Best Ideas • Stimulus by US, UK and EU Central Banks • Underestimation of corporate earnings and cash • Expectation of growth in corporate CAPEX • Overblown fears of UK re-entering recession • European Dividend Futures pricing in excessively negative view• RADAR Overview• RADAR fund positioning and performance• Questions?• Important Information For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 2
  • 3. Macro Overview
  • 4. Macro OverviewBarclays Capital Research - Tactical Asset Allocation Team - global investment viewsRisky assets rally is set to continue over the next quarter, LSAP(Long-term Strategic Asset Purchase) is likely to benefit equities over otherasset classes in the coming monthsEuropean dividend futures remain cheap – still discounting double digit drop inearnings over the next two yearsCredit should continue to outperform sovereign debt although absolute returnsare likely to be limitedWe favour developed market equities, both US and European stocks, inparticular, cyclical sectors that can benefit from reflationary pressuresStay long industrials and technology in the US, basic resources and miningstocks in EuropeThe outlook for emerging market assets remains strong. However, volatility mayremain high given the potential for geo-political and monetary tightening fearsPrefer to gain exposure to emerging markets via export-oriented corporates indeveloped markets Source: Barclays Capital Research, Asset Allocation, “Equities are For institutional and professional investors only. For information only. Back”, December 2010 and Global Outlook, December 2010 Not for further distribution or distribution to retail investors 4
  • 5. Research Best Ideas
  • 6. Stimulus by US, UK and EU Central Banks RADARDon’t fight the reflation trade Equity long exposure of around 70% across US, EU and Asian marketsThe economic recovery is on track and growth is surprising on the upside 0% in G10 Government BondsBetter growth, combined with easy and easier monetary policy, provides a veryfavourable backdrop for risky assetsEquities in particular expected to outperformGovernments bonds expected to be under pressureHowever, the reflation trade may not last long, and investors should position forcontinued volatility and the possibility of sharp reversals Source: Barclays Capital Research, Global Outlook, December 2010 For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 6
  • 7. Underestimate of corporate earnings and cash RADARImproving outlook for companies US S&P position of 15% European Equities positionIn the US, earnings likely to rise sharply, supported by accommodation monetary of 29%policyEuropean equities benefiting from low valuation levels and improving profitabilityMargins improving to exceed previous peaks in consumer discretionary andtechnology sectorsMild inflation is positive for equities, especially food retail, basic resources andchemicalsHowever, US valuations no longer look attractive, suggesting it is increasinglydifficult to justify extending overweight positioning Source: Barclays Capital Research, Global Outlook, December 2010 For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 7
  • 8. Expectation of growth in corporate CAPEX RADARTechnology and business services likely to benefit US Technology Stocks position of 9.2%High and improving levels of free cash give rise to strong balance sheets US Industrials Stocks positions of 9.4%Labour costs are still relatively depressed and labour market is easyCorporates selectively positioning for stronger growth going forwardIT hardware and software upgrade/replacement cycle playing “catch up” afterdownturnHowever, softening of economic outlook or hardening of Fed policy are cleartriggers for pull back in corporate CAPEX Source: Barclays Capital Research, Global Outlook, December 2010 For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 8
  • 9. Overblown fears of UK re-entering recessionPolarised views driving mixed markets RADAR Interest Rate swap relative value trade:Q4 2010 GBP number -0.5% gave rise to double-dip fears payer UK 5yr, receiver US 5yrInitial economic activity numbers for Jan 11 supportive of strengthening recoveryCredit should continue to outperform sovereign debt although absolute returnsare likely to be limitedUK MPC continues to follow accommodative policy despite rising inflationHowever, should workers start to argue for wage increases and inflation becomeembedded, higher rates have the potential to derail the recovery story Source: Barclays Capital Research, Global Outlook, December 2010 For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 9
  • 10. European Dividend Futures pricing in excessively negative viewRain in Spain, but equities can gain RADAR Long position in European DividedValuations remain low in both absolute and relative terms Futures of 5.0%The European Stock Market does NOT equal the Euro Area EconomyCorporate reform of the last 10 years is bearing fruit in productivityLabour costs remain subduedHowever, turbulence in the peripheral states continues to add to volatility Source: Barclays Capital Research, Global Outlook, December 2010 For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 10
  • 11. RADAR Fund Positioning and Performance
  • 12. RADAR Fund Positioning Portfolio Positioning as of 31st January 2011 Strategy Portfolio Allocation – 31 January 2011 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 5y5y GBPUSD IRS DAX Futures KOSPI 200 Futures European Credit Bonds S&P 500 Index Futures Euro STOXX 50 Futures Metals and Mining Equity US Technology Stock Equity US Industrials Stock Equity US Large Cap Basket High Dividend Equity Basket Basket Basket Basket Credit Fixed Income European Equities US Equities Asian Equities Source: Barclays Capital For institutional and professional investors only. For information only. As of 31st January 2011 Not for further distribution or distribution to retail investors RADAR asset allocations are subject to change 12
  • 13. Changing asset allocations over time Optimised portfolio asset allocations over time – dynamic portfolio management in action 200% 160% 120% 80% 40% 0% (40%) Nov-2009 Nov-2010 Jul-2009 Jul-2010 Jun-2009 Jan-2010 Jun-2010 Jan-2011 Mar-2009 Apr-2009 Aug-2009 Sep-2009 Dec-2009 Feb-2010 Mar-2010 Apr-2010 Aug-2010 Sep-2010 Dec-2010 May-2009 Oct-2009 May-2010 Oct-2010 Commodities Equities Fixed Income FXNote: Chart shows allocation data for the RADAR Strategy from March 2009 to 31January 2011. These allocations exclude cash positions.The Strategy was launched in March 2009.Source: Barclays Capital as of 31 January 2011RADAR asset allocations are subject to change For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 13
  • 14. RADAR: Performance Analysis in Feb 2011 Risk management is carried out on a daily basis. The RADAR fund dramatically reduced its equity exposure half way through the month, taking profits and protecting the downside, as equities sold off on the back of the turmoil in the Middle East. RADAR and FTSE 100 Index throughout February 2011 105 104 103 102 RADAR (GBP) 101 FTSE 100 Index 100 99 98 97 11 11 11 11 11 11 11 11 11 11 11 11 11 11 11 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 / / / / / / / / / / / / / / / 01 02 02 02 02 02 02 02 02 02 02 02 02 02 02 / / / / / / / / / / / / / / / 31 02 04 06 08 10 12 14 16 18 20 22 24 26 28Source: Barclays Capital as of 28 February 2011. Fund performance calculated as total return net of fees in GBP.Note: The inclusion in this graph of performance for the FTSE 100 Index is for illustrative purposes only. The strategy has no single benchmark.Past performance is no indication of future performance. For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 14
  • 15. RADAR Performance RADAR vs UK Equity and Bond market since inception* 180 160 RADAR (GBP) 140 FTSE 100 Index TR 120 FTSE Actuaries Govt Securities UK Gilts TR 100 80 0 1 9 0 9 0 09 10 9 0 09 10 1 1 -0 -1 0 1 -0 -1 n- n- p- p- v- v- - - l l ay ay ar ar Ju Ju No No Ja Ja Se Se M M M MKEY PERFORMANCE ANNUALISED RETURN ANNUALISED VOLATILITY RETURN 1M (%) RETURN 3M (%) RETURN 12M (%)INDICATORS SINCE INCEPTION**(%) SINCE INCEPTION** (%)RADAR 3.34% 8.55% 10.16% 20.00% 13.54%FTSE 100 2.64% 9.02% 15.51% 28.35% 18.35%FTSE Actuaries Govt 0.71% -1.31% 5.59% 2.61% 6.33%Securities UK Gilts*Using month end data from 31st March 2009 to February 28th 2011**Using daily data from 23rd March 2009 to February 28th 2011Source: Barclays Capital as of 28 February 2011. Fund performance calculated as total return net of fees in GBP.Note: The inclusion in this graph of performance for the FTSE 100 Index and FTSE Actuaries Govt Securities UK Gilts Index is for illustrative purposes only. The strategy has nosingle benchmark. Past performance is no indication of future performance. For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 15
  • 16. RADAR – Strategy OverviewRADAR targets positive absolute returns in all market conditions by leveraging the key recommendationsfrom Barclays Capital Research Key Features Positive absolute returns Target Target Return in all market Performance environments• Positive absolute returns with below-equity volatility Performance• Multi-asset global macro strategy Key Strategy Launch Date 01 March 2009• Highest conviction investment ideas from one of the best Facts research houses in UCITS III fund form Classification Global Macro• Good track record in delivering positive absolute returns Regional Coverage Global• Benefits from Barcap Research expertise in economic and market analysis, and tactical asset allocation Cash, equities, bonds Instruments Used futures, liquid OTCs (1)• Benefits from BCFS expertise in cross-asset fund management, downside risk control and trade execution Liquidity Daily• Rigorous investment process and strict governance Diversification Multi-Asset• Focuses on liquid securities VaR constrained• Barcap Research acts in an advisory role Market Exposure leverage• BCFS has fiduciary responsibility for all funds under Historical volatility 10-12% per annum management; manages the strategy on a day-to-day basis; makes investment decisions 2nd Over 1 Month 1st Over 3 Months **Quartile Rank 2nd Over 1Year 2nd Over 18 Months*Over The Counter instruments comprise mainly interest rate swaps** Source: Citywire – Newcits Global Macro Universe as at 31 January 2011 For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 16
  • 17. Questions? For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 17
  • 18. RADAR – Q1 2011 Conference Call – 8th April 2011 RADAR QUARTERLY INVESTOR CALL An update on the RADAR fund and research’s outlook Friday 8th April 2011, 09:30 – 10.15 London time United Kingdom Dial in: +44 (0)203 134 4555 Password: BCFS RADAR For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 18
  • 19. Risk FactorsTHESE RISK FACTORS HIGHLIGHT ONLY SOME OF THE RISKS OF THE STRATEGIES DESCRIBED IN THIS DOCUMENT(EACH, A “STRATEGY”).Barclays’ rating is not a recommendation as to Barclays’ creditworthiness or the risks, returns or suitability of Strategy.THIS STRATEGY MAY BE VOLATILE. The level of change in value of a Strategy is its “volatility”. The Strategy’s volatility may beaffected by performance of the underlying assets, along with financial, political and economic events and other market conditions.TAX MAY APPLY. Payments from the Strategy may be subject to tax, withholding and other deductions.THIS STRATEGY COMBINES INVESTMENT TYPES. Different types of financial risk may interact unpredictably, particularly in timesof market stress.THIS DOCUMENT CANNOT DISCLOSE ALL POSSIBLE RISKS OF THE Strategy. Before investing, you must satisfy yourself thatyou fully understand the risks of investment.Before investing, you should read the investment guidelines. The manager’s fees are paid from assets under management and willreduce the return on the Strategy.All opinions and estimates are given as of the date hereof and are subject to change.This Strategy is collateralised to the extent required to ensure compliance with applicable laws and regulations. However if acounterparty does not post collateral to the Strategy as and when required, the Strategy may terminate the transaction(s) with suchcounterparty and the Strategy may suffer significant losses as a result.Furthermore, since the Strategy bears counterparty’s credit risk, if a counterparty becomes insolvent the Strategy may not be able tomeet all its payment obligations. For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 19
  • 20. Important InformationThis document is an indicative summary. It has been prepared by Barclays. It is subject to change. This document is for informationpurposes only and is not binding. We are not offering to sell or seeking offers to buy any Strategy. Any transaction requires oursubsequent formal agreement which will be subject to internal approvals and binding transaction documents.Obtain independent professional advice before investing. We are not recommending or making any representations as to suitability ofany Strategy. Counterparties (which may include, without limitation, Barclays), their affiliates and associated personnel may act inseveral capacities in financial instruments which may adversely affect the Strategy’s performance.Any past performance or simulated past performance contained herein is no indication as to future performance. No representation ismade as to the reasonableness of the assumptions made within or the accuracy or completeness of any pricinginformation, performance data or modelling in these materials.We are not responsible for information stated to be obtained or derived from third party sources or statistical services. No part of thisdocument may be reproduced, distributed or transmitted without Barclays’ written permission. Barclays may disclose any informationrelating to your investment which is required by regulators. Barclays will not be liable for any use you make of any information in thisdocument.Barclays Capital is the investment banking division of Barclays Bank PLC. Barclays Bank PLC is authorised and regulated by the UKFinancial Services Authority and a member of the London Stock Exchange. Barclays Bank PLC is registered in England No. 1026167.Registered Office: 1 Churchill Place, London E14 5HP.Copyright Barclays Bank PLC, 2011 (all rights reserved). For institutional and professional investors only. For information only. Not for further distribution or distribution to retail investors 20

×