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Citywire nma conference presentation march 2012v2 [compatibility mode] Presentation Transcript

  • 1. UK Equity – Value Beyond the Blue Chips Paul Spencer Manager, Franklin UK Mid Cap FundFor Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 2. FRANKLIN TEMPLETON INVESTMENTS 1 1What is Blue Chip?• High quality business• Offering stability in good times and bad• Delivering reliable growthFor Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 3. FRANKLIN TEMPLETON INVESTMENTS 2Franklin Templeton Has Got News For YouWhat’s the connection? Roman Abramovich Gulf of Mexico Oil Spill Joseph Kabila Fred GoodwinFor Professional Investor Use Only. Not for Distribution to Retail Investors. For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 4. FRANKLIN TEMPLETON INVESTMENTS 3 Roman Abramovich Gulf of Mexico Oil Spill EVRAZ BP They are linked to ‘blue chip’ investments Joseph Kabila Fred Goodwin Royal Bank of ENRC ScotlandFor Professional Investor Use Only. Not for Distribution to Retail Investors. For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 5. FRANKLIN TEMPLETON INVESTMENTS 4What is the FTSE 250?• 12% of the FTSE All Share Index• 205 companies excluding investment trusts• Market capitalisation of £220bn, debt of £34.5bn & ebita of £28bn• Operating profits 47% UK and 53% overseasSource: Franklin Templeton Investments as at 31/03/12.For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 6. FRANKLIN TEMPLETON INVESTMENTS 5FTSE 100 and FTSE 250 Compared Sub Sector FTSE 100 FTSE 250 (%) (%) Oil & Gas Producers 19.29 5.07 Banks 12.25 0.00 Mining 11.42 4.88 Pharmaceuticals 7.92 1.43 Tobacco 5.85 0.00 Total 56.73% 11.38% Support Services 2.73 12.05 Financial Services 0.92 9.22 Travel & Leisure 1.84 8.54 Media 2.62 5.28 Oil & Gas Producers 19.29 5.07 Total 27.40% 40.16%Source: Franklin Templeton Investments as at 31/03/12.For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 7. FRANKLIN TEMPLETON INVESTMENTSMid-Cap Out-Performance Over the Last Decade 300 Performance in GBP (rebased to 100) 250 200 150 100 50 0 31/03/2002 31/03/2003 31/03/2004 31/03/2005 31/03/2006 31/03/2007 31/03/2008 31/03/2009 31/03/2010 31/03/2011 31/03/2012 FTSE 250 ex IT FTSE 100Source: Morningstar Direct®. © 2012 Morningstar UK. All rights reserved as at 31/03/12, total return in GBP over 10 years.For Professional Investor Use Only. Not for Distribution to Retail Investors.For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 8. FRANKLIN TEMPLETON INVESTMENTS 7Which of These Mid-Caps Have Blue Chip Credentials? Stock Industry Babcock Outsourcing Shaftsbury Real Estate Dignity Funeral services Genus Animal breeding biotechnology Greggs Bakery retailer Hiscox Insurance Rotork Actuators and valves Spirax Sarco Steam management systems Telecity Data centres Ultra Electronics Defence equipmentFor Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 9. FRANKLIN TEMPLETON INVESTMENTS 8Why Mid-Caps are the New Blue Chips • High quality businesses • Stable performance • Reliable growth • Strong balance sheets • Highly regarded managementLeading to strong long-term performancefrom a carefully selected portfolio of UK mid-capsFor Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 10. AppendixFor Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 11. FRANKLIN TEMPLETON INVESTMENTS 10 10Franklin UK Mid Cap FundFund Details Fund Details Management Paul Spencer Asset Category UK Equity Investment Style Flexible IMA sector UK All Companies Benchmark FTSE 250 Ex Investment Trusts Index Launch Date 17/10/2011 Number of Positions 41 Portfolio Size £602 million Lipper Leader Lipper Leader Lipper LeaderThe Franklin UK Mid Cap Fund launched on 17 October 2011 to receive the assets of the Rensburg UK Mid Cap Growth Trust, a unit trust.Source: Franklin Templeton Investments, as at 31/03/12. Morningstar Rating™ as at 31/03/12, in the UK Mid-Cap Equity Morningstar Category™.For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 12. FRANKLIN TEMPLETON INVESTMENTS 11Fund PerformanceAs at 31 March 2012 1 Year 3 Years 5 Years 10 YearsFranklin UK Mid Cap Fund 9.49% 116.36% 48.50% 231.21%FTSE 250 Ex Investment Trusts Index 3.29% 101.71% 15.14% 157.92%IMA UK All Companies Sector 0.72% 69.93% 4.70% 59.31%Quartile 1 1 1 1Source: Franklin Templeton Investments and Morningstar as at 31/03/12. © 2011 Morningstar, Inc. All rights reserved. Performance details provided are in GBP, include thereinvested dividends net of basic rate UK tax and are net of management fees. The Franklin UK Mid Cap Fund launched on 17/10/11 to receive the assets of Rensburg UK MidCap Growth Trust, a unit trust. Fund performance data is based on the mid price of the Rensburg UK Mid Cap Growth Trust from its launch on 12/07/1999 to 30/09/2011 and thenet asset value of the Franklin UK Mid Cap Fund A(inc) shares thereafter. Past performance is no guarantee of future performance.For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 13. FRANKLIN TEMPLETON INVESTMENTS 12Portfolio PositioningAs at 31 March 2012Top Ten Sector Top Ten Holdings Fund Relative to Fund Sector Name of Issuer Weighting FTSE 250 Weighting Support Services 18.28% 6.23% Ashtead Group PLC 4.25% Chemicals 8.13% 6.28% Persimmon PLC 4.02% Travel & Leisure 7.62% -0.93% Cobham PLC 3.76% Household Goods & Inchape PLC 3.61% 7.54% 3.19% Home Construction Informa Group PLC 3.40% Aerospace & Defence 6.75% 3.60% Yule Catto & Co. PLC 3.30% Financial Services 6.02% -3.30% Premier Oil PLC 3.12% Media 5.19% -0.09% Spirent Comm PLC 3.06% Oil & Gas Producers 4.83% -0.24% Travis Perkins PLC 2.97% Industrial Engineering 3.88% 0.57% AZ Electronic Materials 2.87% General Retailers 3.68% -0.55%Source: Franklin Templeton Investments as at 31/03/12. The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that wouldotherwise be included in a top 10 holdings list.For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 14. FRANKLIN TEMPLETON INVESTMENTS 13Fund Manager Biography Paul Spencer Vice President, Fund Manager Franklin Templeton Fund Management Limited Location: Leeds, UK Mr Spencer is Lead Manager of the Franklin UK Mid Cap Fund and Joint Manager of the Franklin UK Managers’ Focus Fund. A member of the Franklin UK Equity Team, he specialises in UK mid-cap equity analysis and investment. Paul joined Franklin Templeton Investments when it acquired Rensburg Fund Management in January 2011. Paul started his investment career in 1987, when he joined BWD Rensburg. Within the next eight years, Paul progressed through the ranks becoming Head of Research. In 1991, he assumed responsibility for the BWD UK Smaller Companies Trust leaving in 1995 to join Granville Davies Limited as a Director and Small and Mid Cap analyst. In 1999, Paul joined TD Waterhouse where he was Head of Research, specialising in small and mid- cap investment analysis. He returned to Rensburg in 2006 to manage the Rensburg UK Mid Cap Growth Trust, now called the Franklin UK Mid Cap Fund. During his tenure as Fund Manager of this Fund, he has received a number of awards for investment excellence including the Moneywise Best UK All Companies Fund in 2008, 2009, 2010, an award from Money Observer for the Best UK Small/Mid Cap Fund 2009 and Best UK All Companies Fund over three years from Lipper in 2009. Paul holds a BA (Hons) Economics from Nottingham University. He is a Fellow of the Securities Institute (FSI).For Professional Investor Use Only. Not for Distribution to Retail Investors.
  • 15. FRANKLIN TEMPLETON INVESTMENTS 14Important InformationFor professional investor use only, this document is not aimed at, nor intended for use by retail investors.Copyright © 2012 Franklin Templeton Investments. All rights reserved.This document is intended to be of general interest only and does not constitute legal or tax advice nor is it an offer for shares or invitation to apply for shares in the Franklin UK Mid CapFund. Nothing in this document should be construed as investment advice. Opinions expressed are the authors at publication date and they are subject to change without prior notice.Performance details provided are in GBP, include the reinvested dividends net of basic rate UK tax and are net of management fees. The Franklin UK Mid Cap Fund launched on 17/10/11 toreceive the assets of Rensburg UK Mid Cap Growth Trust, a unit trust. Fund performance data is based on the mid price of the Rensburg UK Mid Cap Growth Trust from its launch on12/07/1999 to 30/09/2011 and the net asset value of the Franklin UK Mid Cap Fund A(inc) shares thereafter. Sales charges and other commissions, other taxes and relevant costs to be paidby an investor are not included in the calculations. Past performance is no guarantee of future performance.© 2011 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; an (3) is not warranted to be accurate,complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.The price of the shares in the fund and the income received from it can go down as well as up, and investors may not get back the full amount invested. Currency fluctuation may affect thevalue of overseas investment. Investment in these funds entails risks which are described in their Prospectus and Simplified Prospectus.Subscriptions to shares in the funds can only be made on the basis of the current full or simplified prospectus of the funds, accompanied by the latest available audited annual report and thelatest semi-annual report if published thereafter, which can be requested from the address below.No shares of the Fund may be directly or indirectly offered or sold to nationals or residents of the United States of America. Shares of the Fund are not available for distribution in alljurisdictions and prospective investors should confirm availability with their local Franklin Templeton Investments representative before making any plans to invest.References to indices are made for comparative purposes only and are provided to represent the investment environment existing during the time periods shown. An index is unmanaged andone cannot invest directly in an index. The performance of the index does not include the deduction of expenses and does not represent the performance of any Franklin Templeton Groupfund.For a free copy of the latest prospectus, the annual report and semi-annual report, if published thereafter or for more information about any Franklin Templeton Investments’ fund, UKinvestors should contact: Franklin Templeton Investments, Telephone: 0800 305 306, Email: enquiries@franklintempleton.co.uk or write to us at the address below.Issued by Franklin Templeton Investment Management Limited (FTIML). Registered office: The Adelphi, 1-11 John Adam Street, London WC2N 6HT. FTIML is authorised and regulated inthe UK by the Financial Services Authority.For Professional Investor Use Only. Not for Distribution to Retail Investors.