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Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
Citywire cullen presentation
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Citywire cullen presentation

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  • 1. Citywire New York: 20th – 22nd June 2011
    CULLEN NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY FUND
  • 2. Disclosure
    PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
    This document has been prepared by Cullen Funds PLC, for information purposes only. This document is an indicative summary of the terms and conditions of the securities described herein and may be amended, superseded or replaced by subsequent summaries. The final terms and conditions of the securities will be set out in full in the applicable offering document(s).
    The performance shown is that of the Cullen Global High Dividend Value Equity strategy and the Cullen North American High Dividend Value Equity Strategy, the philosophy of which the Cullen Global High Dividend Value Equity Funds and the Cullen North American High Dividend Value Equity Fund (‘The Funds’) will be based. It is represented here to illustrate the success that Cullen Capital Management has had in the past but is not intended to represent The Funds returns. The performance of The Funds will not necessarily mirror that of the strategy due to, among other things, different charging structures, timings and portfolio concentration.
    All views and opinions are those of Cullen Capital Management and are subject to change without notice. This presentation is based on information we consider reliable, but we do not warrant its accuracy or completeness and it should not be relied on as such. Where securities are mentioned in this presentation they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase or sell.
    This document shall not constitute an offer to sell, or the solicitation of an offer to buy any securities described herein. Cullen Funds PLC is not acting as adviser or fiduciary. Accordingly you must independently determine, with your own advisers, the appropriateness for you of the securities before investing. Cullen Funds PLC accepts no liability whatsoever for any consequential losses arising from the use of this document or reliance on the information contained herein.
    Cullen Funds PLC does not guarantee the accuracy or completeness of information which is contained in this document and which is stated to have been obtained from, or is based upon trade and statistical services or other third party sources. Any data on past performance, modelling or back-testing contained herein is no indication as to future performance. No representation is made as to the reasonableness of the assumptions made within, or the accuracy or completeness of any modelling or back-testing. All opinions and estimates are given as of the date hereof and are subject to change. The value of any investment may fluctuate as a result of market changes. The information in this document is not intended to predict actual results and no assurances are given with respect thereto.
    Cullen Capital Management, its affiliates and the individuals associated therewith may (in various capacities) have positions or deal in securities (or related derivatives) identical or similar to those described herein.
    This document is being made available in the UK to persons who are investment professionals as defined in Article 19 of the FSMA 2000 (Financial Promotion Order) 2005. Outside of the UK, it is directed at persons who have professional experience in matters relating to investments. Any investments to which this document relates will be entered into only with such persons. This document is not for distribution to retail customers.
    NO ACTION HAS BEEN MADE OR WILL BE TAKEN THAT WOULD PERMIT A PUBLIC OFFERING OF THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION IN WHICH ACTION FOR THAT PURPOSE IS REQUIRED. NO OFFERS, SALES, RESALES OR DELIVERY OF THE SECURITIES DESCRIBED HEREIN OR DISTRIBUTION OF ANY OFFERING MATERIAL RELATING TO SUCH SECURITIES MAY BE MADE IN, OR FROM ANY JURISDICTION, EXCEPT IN CIRCUMSTANCES WHICH WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE LAWS AND REGULATIONS AND WHICH WILL NOT IMPOSE ANY OBLIGATION ON CULLEN FUNDS PLC OR ANY OF ITS AFFILIATES.
    THIS DOCUMENT DOES NOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ISSUES RELATED TO AN INVESTMENT IN THE SECURITIES. PRIOR TO TRANSACTING, POTENTIAL INVESTORS SHOULD ENSURE THAT THEY FULLY UNDERSTAND THE TERMS OF THE SECURITIES AND ANY APPLICABLE RISKS. THIS DOCUMENT IS NOT A PROSPECTUS FOR ANY SECURITIES DESCRIBED HEREIN. INVESTORS SHOULD ONLY SUBSCRIBE FOR ANY SECURITIES DESCRIBED HEREIN ON THE BASIS OF INFORMATION IN THE RELEVANT PROSPECTUS (WHICH HAS BEEN, OR WILL BE PUBLISHED AND MAY BE OBTAINED FROM CULLEN FUNDS PLC), AND NOT ON THE BASIS OF ANY INFORMATION PROVIDED HEREIN.
    Results for fully discretionary accounts are market value weighted and are calculated on a total return, time-weighted basis using trade date valuations. Returns reflect the reinvestment of dividends and other earnings. Cash returns are included in a component of the total account and are not detailed separately. Leverage is not used in managed account and mutual fund strategies. Performance results will vary based upon the period measured.
    It is intended that Cullen Funds PLC will make an application to be recognised for distribution in the United Kingdom by the Financial Services Authority under Section 264 of the Financial Services and Markets Act, 2000 of the United Kingdom. Most or all of the protection provided by the United Kingdom regulatory structure will not apply. The rights of Shareholders may not be protected by the Financial Services Compensation Scheme established in the United Kingdom.
    Copyright Cullen Funds PLC. (all rights reserved). This document is confidential, and no part of it may be reproduced, distributed or transmitted without the prior written permission of Cullen Funds PLC.
  • 3. Highlights
    Registered investment advisor established in 1983
    Independent: 100% employee owned firm
    Value investor: disciplined, experienced, research-driven
    Headquarters: New York
    Assets under management: $13.7 bn as of 31st May 2011
    3
    Small Cap Value Equity
    Schafer Cullen SMA - $128m
    Cullen Small Cap Value Fund - $7m
    ORGANISATION
  • 4. Assets Under Management
    $13.7 bn as of 31 May 2011
    Global High Dividend
    Value Equity - $69 m
    Value Equity - $6.6 bn
    High Dividend
    Value Equity - $5.8 bn
    International High Dividend
    Value Equity
    Small Cap Value Equity
    Other
    4
    ORGANISATION
  • 5. Strong Team Based Approach
    Investment Team
    James P. Cullen
    President and Portfolio Manager
    (46 years)
    John C. Gould
    Executive Vice President &
    Portfolio Manager
    (23 years)
    Rahul Sharma
    Vice President & Portfolio Manager
    Jennifer Chang
    Analyst
    Erik Schafer
    Analyst
    Mike Kelly
    Analyst
    Pravir Singh
    Analyst
    Brooks Cullen
    Analyst
    Carl Gardiner
    Analyst
    Stephen O’Neil
    Analyst
    Portfolio management team have an average of 25 years’ experience
    Supported by a team of seven equity analysts
    5
    ORGANISATION
  • 6. Investment Overview
    Legendary investor, Benjamin Graham said it best in summarizing his 50 years in the investment business. He said that the key to being successful in investing was to ignore everything else and focus on the following two key principles:
    Invest with a discipline which helps you to avoid overpaying for your investments. The disciplines he recommended were price/earnings, price/book and dividend yield.
    Be a long-term investor. (i.e. 5 years)
    6
    INVESTMENT PHILOSOPHY
  • 7. The Potential Offered by a Disciplined Value Approach
    7
    Annual performance of the S&P 500
    % CAGR
    Returns noted are for illustrative purposes only and do not represent the performance of an account, fund or composite.
    Source: CCM Research 31/12/10. The performance data quoted represents past performance, which is no guarantee of future results. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Indices are unmanaged and their returns assume reinvestment of dividends and, unlike mutual fund returns, do not reflect any fees or expenses associated with a mutual fund or separately managed account. It is not possible to invest directly in an index. The Top and Bottom 20% by P/E , P/B, and Yield represents holdings within the S&P 500 Index.
    INVESTMENT PHILOSOPHY
  • 8. The Case for Deep Value Funds
    Rolling 5-Year Performance: Bottom 20% of the S&P 500 by P/E & Top 20% by Yield
    Past performance is no guarantee of future results. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Indices are unmanaged and their returns assume reinvestment of dividends and, unlike mutual fund returns, do not reflect any fees or expenses associated with a mutual fund. It is not possible to invest directly in an index.
    Source: CCM Research 31/12/10.
    8
    INVESTMENT PHILOSOPHY
  • 9. 10-Year U.S. Treasury Yield
    Yield %
    18
    Rising RateEnvironment
    (1967-1981)
    Falling RateEnvironment
    (1981-2003)
    16
    16%
    14
    12
    10
    8
    6
    4
    4%
    4%
    2
    0
    1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002
    The performance data quoted represents past performance, which is no guarantee of future results.
    Source: CCM Research.
    INVESTMENT PHILOSOPHY
    9
  • 10. S&P 500 Stock Prices and Recessions
    Price (S&P 500)
    5-Year Annualized Returns Starting One Year Before The Recession Began
    (5-Year Periods / High Dividend Yield Discipline)
    1,550
    1,000
    500
    1,550
    1,000
    500
    1969-70 73-74 81-83 91 2001 2008
    Year
    Blue lines denote recessionary periods
    The performance data quoted represents past performance, which is no guarantee of future results.
    Source: S&P 500 / CCM 31/12/10.
    INVESTMENT PHILOSOPHY
    10
  • 11. NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY STRATEGY
    11
  • 12. North American High Dividend Value Equity Strategy
    Fundamental Research
    Attractive Valuations
    • P/E < 12x EPS
    • 13. P/B < 2.5x BVPS
    • 14. LT EPS Growth > 10%
    • 15. EV/EBITDA < 10x
    • 16. Strong Operating & Free Cash Flow
    • 17. Low Debt/Cap, High ROE
    • 18. Net Cash Balances
    Dominant Company Characteristics
    • Leading Market Shares
    • 19. Simple, Defensive Business Models
    • 20. Competitive Advantages
    • 21. Recurring Cash Flows
    • 22. Strong Managements
    • 23. Commitments to Shareholder Value
    Catalysts for Price & EPS Appreciation
    Superior Dividend Policies
    • Minimum Yield of 3%
    • 31. Long, Consistent Record of Increasing Dividends
    • 32. Strong DPS Growth
    • 33. Adequate Pay-Out Ratios
    • 34. Management Committed to Policy
    • 35. High, Sustainable Yields
    • 36. Special Dividends & Large, Frequent Payments
    NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY STRATEGY
    12
  • 37. North American High Dividend Value Equity Strategy
    Investment Process
    Screening InvestableUniverse
    Fundamental /Qualitative /Credit Research
    Portfolio Construction
    Sell Discipline
    • Begin with largest 2,000 publicly traded equities
    • 38. Dividend yield of 3% or greater
    • 39. Screen for stocks in bottom quintile according to P/E and P/B basis
    • 40. Typical market capitalization > $5 B
    • 41. Sector and Industry Inflection Points
    • 42. Seek low debt to equity and high returns on investable capital
    • 43. Search for catalyst that can drive earnings and dividends, including:
    • 44. New markets
    • 45. New products
    • 46. Strong managements with clear vision and commitment to shareholder value
    • 47. Approximately 25-35 holdings
    • 48. Diversification across 15-20 industries
    • 49. No more than 5% in any one stock at cost
    • 50. No more than 15% in any one industry at cost
    • 51. No more than 30% in any one sector at cost
    • 52. Typically equally weighted positions
    • 53. Top 10 holdings typically represent 35 – 40%
    • 54. Typically 20% international exposure (ADR) at cost
    • 55. Price objectives reached
    • 56. Earnings/Dividend growth not realized
    • 57. Deteriorating fundamentals
    • 58. Decline of 25% - investment thesis reassured
    • 59. Cuts in dividend policy
    NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY STRATEGY
    13
  • 60. Cullen North American High Dividend Value Equity Fund
    Portfolio as of May 31st, 2011
    Top Ten Holdings (%)
    Sector Weights (%)
    Source: CCM Research 31/5/11
    *This material is supplemental to (GIPS®), see the fully compliant presentation on the last slide of this presentation.
    The Portfolio is actively managed and current holdings and characteristics may be different. The holdings listed should not be considered recommendations to buy or sell any particular security listed.
    14
    NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY STRATEGY
  • 61. Cullen North American High Dividend Value Equity Fund
    Portfolio Characteristics
    15
    Source: Bloomberg/Thompson Financial/CCM
    NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY STRATEGY
  • 62. North American High Dividend Value Equity Strategy
    Strategy Composite Performance
    Disclosure: Intended for 1-1 presentations and for Professional Investors only. Total return presented in US Dollars, NAV to NAV. Performance returns from 1st January 1994 through to 31st August 2003 are based on the Schafer Cullen Capital Management High Dividend Transaction Based Composite for Separately Managed Accounts. Net of Fee performance has been calculated by applying 1/12th of 1%, which is the Capped Total Expense Ratio of this Fund’s institutional share classes per annum, to gross monthly returns. Performance returns from 1st September 2003 onwards are based on the Retail Share Class (CHDEX) of the Cullen High Dividend Equity Fund, a U.S. Mutual Fund which is a series of the Cullen Funds Trust, a U.S. SEC registered investment company. Therefore, Net of Fees performance for each month reported above is based on a minimum Total Expense Ratio of 1% per annum. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.
    Source: Cullen Capital Management and Lipper, a Thomson Reuters Company.
    The Standard & Poor's 500 Index is the commonly used measure of the broad U.S. stock market
    16
    NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY FUND
  • 63. 10 year Strategy Risk/Return vs Indices
    17
    Source: Lipper, a Thomson Reuters company. Total return in US Dollars. 31/12/1999 to 31/05/2011 and CCM Research 31/05/2011
    NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY STRATEGY
  • 64. Cullen North American High Dividend Value Equity Fund
    Fund Details
    • Retail Share classes also available with the same range of currencies as above: Management fee of 1.5%
    18
    NORTH AMERICAN HIGH DIVIDEND VALUE EQUITY FUND
  • 65. Summary
    Strategy
    Historic studies show that investing in high dividend, low P/E stocks gives investors an edge over time
    Timeliness
    We believe this strategy is timely in the present economic and stock market environment
    Experience
    We have been managing value investment strategies for over 25 years and have maintained a successful long-term track record working with this strategy
    Low Risk
    The key to the strategy for long-term investors is its risk-adjusted performance
    19
    SUMMARY

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