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Citywire north fin opps 0813 Citywire north fin opps 0813 Presentation Transcript

  •  The Return of Global Financials: Why now could be the time to revisit an unloved sector Jupiter Financial Opportunities Fund Citywire North Retreat, Rudding Park FOR PROFESSIONAL INVESTORS ONLY, NOT FOR RETAIL INVESTORS Presented by: Guy de Blonay – Global Financials Team, Fund Management Director Andrew Hanson – UK Wealth Management, Business Development Manager David Brown – UK Advisory, Regional Sales Manager
  •  1 Investing in global financials in 2013 & beyond A diverse sector Attractive valuations relative to other sectors Developments in the global economy benefit some financials Our approach Jupiter: your performance partner Jupiter can demonstrate longevity and a proven record in the global financials sector
  •  30% 70% Global Assets Fund of Funds Jupiter Asset Management 2 Your performance partner Source: Jupiter as at 30.06.13.  One of Europe’s most successful and respected fund management houses  £29bn AuM diversified across geographies and asset classes  Global investment strategies represent a significant portion of Group AuM  Committed to active management & alpha generation  Fund managers are personally accountability for performance  Leads to high conviction ideas  Avoids biases of committees  Robust investment risks monitoringTotal = £29bn  AuM by front office franchise  Our business
  •   Guy de Blonay; calendar year track record Calendar year performance -5.3 35.2 25.5 49.0 24.3 9.4 -40.8 45.0 -7.7 39.6 19.6 34.0 15.7 1.8 7.3 23.3 -2.2 -24.5 18.1 20.4 -30.3 15.2 2.7 22.8 5.1 -6.9 -38.1 12.2 9.8 -18.4 23.8 20.3 -50 -40 -30 -20 -10 0 10 20 30 40 50 2002 2003 2004 2005 2006 2007 2008 2009** 2010 2011 2012 YTD %Growth Henderson New Star Global Fins Fund (GBP) Jupiter Financial Opps Fund (GBP) MSCI AC World Financials (GBP)* 3 Source: FE, bid to bid, net income reinvested 31.12.01 to 31.07.13. *FTSE Global Financials Index performance shown up to 31.12.09, as it was the benchmark for Henderson New Star Global Financials. The FTSE Global Financials Index was discontinued and we have used MSCI AC World Financials for figures from 2010 onwards. **2009 performance to 20.10.09. Past performance should not be seen as a guide to future performance. Guy de Blonay managed Henderson Global Financials fund from 28.12.01 to 20.10.09. He became lead manager of Jupiter Financial Opportunities on 01.01.11.
  •  4 Jupiter Financial Opportunities Fund -200% 0% 200% 400% 600% 800% 1,000% Jun-97 Sep-99 Jan-02 May-04 Aug-06 Dec-08 Apr-11 Jul-13 Jupiter - Financial Opportunities Inc TR in GB 865.51 MSCI ACWI/FINANCIALS Gross TR in GB 111.72 Track record since launch to 31.07.13 Source: FE, bid to bid, net income reinvested 02.06.97 to 31.07.31. Past performance should not be seen as a guide to future performance. From 01.06.10 Guy de Blonay became co-manager of the fund (and the lead manager from 01.01.11). *From 01.06.10 to 31.12.10. 2010* 2011 2012 YTD Jupiter Financial Opportunities 2.30 -24.53 18.09 20.43 MSCI ACWI/Financials 9.86 -18.36 23.76 20.34
  •  5 Investing in global financials in 2013 & beyond A diverse sector Attractive valuations relative to other sectors Developments in the global economy benefit some financials Our approach Jupiter: your performance partner Jupiter can demonstrate longevity and a proven record in the global financials sector
  •   Regional banks  Investment banks  Thrifts and mortgage banks  Broker dealers  Asset managers  Life insurance  Non-life insurance (including reinsurance)  Speciality finance (credit cards, leasing, financial guarantors, banking software)  Exchanges  Property  Transaction management systems 6 Important and diverse sector Source: DataStream, 16.07.13.
  •  Low correlation between sub-sectors 7 Source: Bloomberg, USD, 31.12.06 to 31.12.07. Example (31.12.06 – 31.12.07)
  •  Trend Long Avoid 2002 De-leveraging Re-pricing of risk Volatility Money brokers Lloyds of London European property US market sensitive stocks Asset managers Investment banks 2003 Market consolidation Low interest rates High liquidity Investment banks Asset managers Irish and UK property Insurance Online brokers Insurance brokers 2004 Stronger equity markets Surge property valuation outside G7 Low interest rates Investment banks Private banking Eastern European property US insurance US asset managers UK domestic banks 2005 Market sentiment positive M&A activity increasing Low inflation Asset managers Emerging markets Japanese brokers UK domestic banks Insurance brokers Large cap US regional banks 2006 Market sentiment positive M&A activity Liquidity Investment banks Asset managers Emerging markets Canadian regional banks US regional banks Insurance brokerage 2007 Global growth Re-pricing of risk Low inflation Diversified financials Asset managers Emerging markets US regional banks Spanish domestic UK banks 2008 De-leveraging Re-pricing of risk Volatility Reinsurance Lloyds of London Swiss regional banks Investment banks Spanish domestic UK banks 2009 De-leveraging Dilution risk Asset quality Reinsurance Lloyds of London Swiss regional banks US regional banks Spanish domestic Japanese banks 2010 Low interest rates Liquidity Re-leveraging Asia Global banks Norway Portugal Spanish domestic Greece 2011 Low interest rates Re-leveraging M&A Activity Credit cards Private equity Asset managers India banks Greek banks Spanish domestic 2012 Low interest rates LTRO/OMT/QE Credit growth Credit cards Asset managers Emerging markets Spanish domestic Irish banks Brazil 2013 LTRO/OMT/QE US housing Restructuring Asset Managers Global Payments Global banks Chinese banks Brazil Spanish domestic Asset Allocation –Playing sub-sector themes 8
  •  9 Investing in global financials in 2013 & beyond A diverse sector Attractive valuations relative to other sectors Developments in the global economy benefit some financials Our approach Jupiter: your performance partner Jupiter can demonstrate longevity and a proven record in the global financials sector
  •   Book basis still looking low Price / Book ratio Source: Bloomberg, in GBP, 31.12.96 to 31.07.13. MSCI World Financials 10 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
  •  From One Extreme to Another 11 Source: Datastream, Societe Generale Cross Asset Research 27 November 2012. Nasdaq composite index relative to US banks Datastream index. 100 = 01/01/1980. A very high “hate” level against the banking sector
  •  12 Investing in global financials in 2013 & beyond A diverse sector Attractive valuations relative to other sectors Developments in the global economy benefit some financials Our approach Jupiter: your performance partner Jupiter can demonstrate longevity and a proven record in the global financials sector
  •   Flows Into High Yield Bonds 13 Source: ICI, Haver Analytics. “Govt” excludes MBS, 2012. …for all the plants we want to grow. Net US manual fund inflows, annual $bn More money moving into equity products would be supportive of stock prices
  •   Insurance dividend yields increasingly attractive  Insurance dividend forecast to grow faster Insurance Dividends Forecast to Grow 14 Source: Bloomberg, Barclays Research estimates, 2013. The views expressed are those of the Fund manager at the time of writing and may change in the future. 7.4% 6.2% 5.2% 4.4% 7.4% 6.5% 5.0% 4.7% 7.4% 6.3% 5.2% 5.5% 4% 5% 6% 7% 8% Telecoms Utilities Oil & Gas Insurance 2012 2013 2014 5.8% 4.7% 0.2% -4.9% 16.6% -3.9% -0.2% 5.2% -10% 0% 10% 20% Insurance Utilities Telecoms Oil & Gas 2013 2014 Telecos and Utilities div outlooks fairly unappealing Insurance yields moving towards traditional yield sectors Earnings growth is a key driver A specific opportunity within this important sub sector
  •  15 Investing in global financials in 2013 & beyond A diverse sector Attractive valuations relative to other sectors Developments in the global economy benefit some financials Our approach Jupiter: your performance partner Jupiter can demonstrate longevity and a proven record in the global financials sector
  •  Our approach in brief  Strategy  Fundamentally-based long term capital growth principally through investment in the financials sector on an international basis; guided by a combination of top-down / bottom-up stock analysis  Fund manager’s investment approach  Identify sub-sector fundamental themes and exploit them through investments in companies with prices that do not reflect longer-term trends  Be opportunistic and effective with capital by dynamically allocating it across multiple sub-sectors, capitalisations, growth / value categories and geographies  Goal  Generate meaningful returns in any market conditions 16 All of our ideas start with a view that a significant country, industry or company change, not yet being fully recognised by the market, is imminent or in progress
  •     Our current position Regional allocation 17 Instrument % of fund AXA 2.81 JPMorgan Chase 2.79 LSE Group 2.77 Prudential 2.72 Morgan Stanley 2.54 Citigroup 2.46 Invesco 2.31 Discover Financial Services 2.31 Schroders 2.07 KKR & Co 2.02 Total 24.80 Top 10 holdings Source: Jupiter as at 31.07.13. Jupiter Financial Opportunities Fund North America 48.96 Europe 20.35 United Kingdom 19.51 Japan 6.32 Far East Ex Japan 2.70 Eastern Europe 1.34 Sector breakdown Financial Services 42.93 Banks 28.65 Life Insurance 14.61 Non-Life Insurance 8.20 Equity Investment Instruments 3.11 Real Estate Investments & Services 1.21 Real Estate Investment Trusts 0.48 Cash 0.81
  •  Stock examples Source: Bloomberg, July 2013. The views expressed are those of the Fund manager at the time of writing and may change in the future. 18 GAM Holding  Strong investment performance  Cost discipline  Capital rich  Geared to rising stock market Citigroup  Not just a recovery story  Change in management  Return to the dividend register  Valuation a compelling feature  
  •  Stock examples Source: Bloomberg, July 2013. The views expressed are those of the Fund manager at the time of writing and may change in the future. 19 Visa  Cash to cashless economy  Growing middle class  High barrier to entry  EPS growth >20% Banque Cantonale Vaudoise  Excellent Management  Cash rich  Distribution policy continued  
  •  Investing in global equities in 2013 & beyond 20 Jupiter: proven expertise in global equity investing Financials: a relevant & diverse sector within global equities Valuation opportunities exist within the global financials Economic recovery is supportive of strong financial names Your Performance Partner
  •  Disclosure Jupiter Unit Trust Managers Limited (‘JUTM’) and Jupiter Asset Management Limited (‘JAM’) are both registered in England and Wales (nos. 2009040 and 2036243). The registered office of both is 1 Grosvenor Place, London SW1X 7JJ. JUTM and JAM are authorised and regulated by the Financial Conduct Authority in the UK whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS. This presentation is intended for investment professionals and not for the benefit of private retail investors. Anyone attending the presentation or who has the opportunity to view the accompanying slides should bear in mind that the value of an investment in a unit trust and the income from it can go down as well as up. It may be affected by exchange rate variations and you may not get back the amount invested. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term. Quoted yields are not guaranteed. Past performance should not be seen as a guide to future performance. Jupiter Financial Opportunities: This Fund can invest more than 35% of its value in securities issued or guaranteed by an EEA state. The Key Investor Information Document (KIID), Supplementary Information Document (SID) and Scheme Particulars are available from Jupiter on request. This document contains information based on the MSCI World Financials and MSCI All Countries World Financials Indices. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent. For your security we may record or randomly monitor all telephone calls. If you are unsure of the suitability of an investment please contact your financial advisor. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given. 21 2498_UT_FIN OPPS_GDB
  •  Appendix
  •  Lead Fund Manager: Guy de Blonay Fund Management Director Jupiter, Financial Equities team Portfolio Manager with 18 years’ investment experience* Currently: Lead Manager of Jupiter Financial Opportunities Fund(1) Lead Manager of CC&L Financial Opportunities Fund(2) Deputy Manager of Jupiter International Financials Fund Deputy Manager of Jupiter Global Financials SICAV Former Manager of: Henderson New Star Global Financials Fund OEIC(3) CC&L Global Financials Fund(4) Henderson Financial Opportunities Investment Trust(5) New Star Financials Hedge Fund(6) Formerly at: Henderson Global Investors Ltd (Apr 2009 – Oct 2009) New Star Asset Management Ltd (Sept 2001 – Apr 2009) Jupiter Asset Management Ltd (Sept 1995 – Apr 2001) 1. Since January 2011. 2. Since October 2011. 3. Since launch 31.12.01 – 20.10.09. Robert Mumby Fund Management Director Jupiter, Financial Equities team Filtering and portfolio construction – The Team 23 4. Since launch 020.5.06 – 20.10.09. 5. From 07.04.09 – 20.10.09. 6. Since launch 02.04.02 – 31.12.08. “Those ideas are generated by a team but decisions are best left to the individual” *Years of experience as at 31.07.13. Currently: Manager of Jupiter International Financials Fund Manager Jupiter Global Financials (SICAV) Deputy Manager of Jupiter Financial Opportunities Fund Formerly at: Cannacord Capital (2005) HSBC (2001 – 2005) ABN (1999 – 2001) BZW/CSFB (1994 - 1999) Industrial Bank of Japan (1989 – 1994) KPMG Peat Marwick (1979 – 1989)
  •  24 Filtering and portfolio construction (1) “All of our ideas start with a view that a significant industry or company change, not yet being fully recognised by the market, is imminent or in progress.”
  •  Filtering and portfolio construction (2)  Macro trends identification and theme generation / stock idea  Broad industry “idea sources”  Company research – in-house and external  Company meetings and discussions  Industry networking  Bottom-up approach to stock selection  Quality management  Returns on equity  Competitive positions  Valuations 25 Macro trends and themes considered for sub sector selection combined with bottom up stock selection approach:
  •  Filtering and portfolio construction (3)  Positions are managed based upon the risk / reward profile derived from valuation and conviction around catalysts  Holding periods can be two months to two years depending on circumstances  Positions are constantly re-evaluated based upon events and additional information  Discrete levels are defined and consistently updated by the team each week  Target: based upon base case and high case valuations  Optimal entry price: used in initial building of position and defined as threshold where risk / reward analysis holds  Conviction level: based upon potential downside scenario; conviction increased on confirmation of integrity of valuation thesis and risk / reward  Ultimate stop-loss; for risk management; based upon loss level of around 15%*  Active management used for maximum efficiency  Based upon top-down / bottom-up approach 26 Typical stock holding 3-7% of NAV (max 10%) *Stop losses are not guaranteed: further losses may be incurred.
  •  Guy de Blonay; Awards and ratings  Lipper Fund Awards 2009 – Netherlands  Global Financials – Best Fund over 5 years – Equity Sector Banks and other Financials  Global Financials – Best Fund over 3 years – Equity Sector Banks and other Financials  Lipper Fund Awards 2008 – UK  Global Financials Fund – Best Fund over 5 years – Equity Sector Banks and Other Financials  Global Financials Fund – Best Fund over 3 years – Equity Sector Banks and Other Financials  City Top 100 – 2007  Guy de Blonay: Winner – Specialist – Fund Manager of the Year  Portfolio Adviser Fund Awards 2007  Specialist Equities category: Global Financials Fund – Winner  Lipper Fund Awards 2007 Fund  Global Financials Fund – Best Fund over 3 years – Equity Sector Banks and Other Financials  Global Financials Fund – Best Fund over 5 years – Equity Sector Banks and Other Financials  Lipper Fund Awards 2006 – UK  Global Financials Fund – Best Fund over 3 years – Equity Sector Banks and Other Financials  Standard & Poor’s UK Fund Awards 2006  Global Financials has been awarded 1st Place in the UK Marketed Class sector Finance sector over 1 year out of 20 funds  Standard & Poor’s Fund Awards UK 2005 in Association with Investors Chronicle  Global Financials: 1st place over 1 year in UK Marketed Class Sector – Finance Global out of 16 funds Past performance is not necessarily a guide to future performance. Awarded when at New Star Asset Management. 27 Jupiter Financials Opportunities Fund Guy de Blonay
  •  UK Wealth Management- Contact details 28 Andrew Hanson Business Development Manager Wealth Management, UK Wholesale ahanson@jupiter-group.co.uk 0207 314 4827 07973131781 Louise Fish Senior Manager, Broker Sales Wealth Management, UK Wholesale lfish@jupiter-group.co.uk 0207 314 4827 N/A
  •  UK Advisory Sales- Contact details 29 David Brown Regional Sales Manager Advisory Sales, UK Wholesale dbrown@jupiter-group.co.uk 0207 314 4892 07917 095 905 Ben Sackitey Broker Sales Executive Advisory Sales, UK Wholesale bsackitey@jupiter-group.co.uk 0207 314 4892 N/A