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    Glod presentation netherlands sb apr 12 screen Glod presentation netherlands sb apr 12 screen Presentation Transcript

    • M&G Global Dividend FundSimon Bailey, Deputy Fund ManagerApril 2012
    • M&G Global Dividend Fund Fund facts • Inception: July 2008 • Fund manager: Stuart Rhodes • Fund size: € 3,262 million • Benchmark: MSCI AC World Index • Yield objective: Yield premium to the global average • Performance objective: Total return (income and capital growth) in excess of the MSCI AC World Index2 Source: M&G, as at 31 March 2012. Ratings as at 29 February 2012 and should not be taken as recommendation
    • M&G Global Dividend Fund Performance since launch 6 months 1 year 3 years Since Launch % % % (18.07.08) % M&G Global Dividend Fund 21.2 11.4 109.4 46.4 MSCI AC World Index 21.1 6.4 78.3 27.5 Global Large-Cap Value Equity sector average 17.2 3.3 60.9 14.1 Quartile ranking in Morningstar Global 1 1 1 1 Large-Cap Value Equity sector3 Source: M&G, Morningstar as at 31 March 2012. Euro A class shares (Pan European database), bid to bid, net income reinvested.
    • Agenda • Dividend investing – our philosophy • Investment process • Fund update4
    • Dividend investing – our philosophy Focus on dividend growth 30 25 20 Dividend (p) Dividend (p) 15 10 5 0 Dividend (stock yielding 6%, no growth) Dividend (stock yielding 4%, 10% growth) The power of long-term compounding5 Source: M&G as at 31 December 2011
    • Dividend investing – our philosophy Capital discipline US • Long-term dividend growth dividend achievers requires disciplined growth in the business • Rising dividends create culture of discipline • Dividends shouldn’t be an afterthought – An integral part of good company management6 Source: Mergent’s Dividend Achievers, as at 29 February 2012
    • Dividend investing – our philosophy Dividends and share prices go hand in hand Capital growth vs. total return: US returns over 10 years to December 2011 160 141 140 120 Return (%) 100 86 80 60 40 33 20 10 0 S&P500 Capital S&P500 Total Return Dividend Achievers Dividend Achievers Return Capital Return Total Return Dividends and growth are not mutually exclusive7 Source: Mergent’s Dividend Achievers, as at 30 November 2011; Datastream as at 31 December 2011. US companies with a 25-year track record of consecutive dividend growth
    • Agenda • Dividend investing – our philosophy • Investment process • Fund update8
    • Investment process Efficiency, discipline and conviction Investable Portfolio Screening construction universe Eliminating stocks from Identifying stocks we Constructing a portfolio the global universe of would like to own at that can outperform in 15,000 stocks some point all market conditions • Focus on dividend-paying • Long-term dividend track • Picking stocks from three companies record sources dividends • Focus on stocks with • Long-term growth • Position size determined sufficient liquidity (market prospects by conviction cap >$1 billion) 4,000 stocks 200 stocks Finalstocks 50 portfolio9
    • Investment process Understanding potential headwinds Annual return (EUR): MSCI World High Dividend Yield Index vs. MSCI AC World Index 20 10 0 -10 Return (%) -20 -30 -40 -50 MSCI AC World MSCI World High Dividend Yield High yield strategies tend to outperform in falling markets10 Source: Bloomberg as 31 December 2011
    • Investment process Understanding potential headwinds Annual return (EUR): MSCI World High Dividend Yield Index vs. MSCI AC World Index 50 45 40 35 30 25 Return (%) 20 15 10 5 0 -5 -10 MSCI AC World MSCI World High Dividend Yield High yield strategies struggle to keep up in rising markets11 Source: Bloomberg as 31 March 2012
    • Investment process Portfolio construction: mitigating our weaknesses Sources of Typical fund Company characteristics dividends weighting Disciplined companies Quality 50 – 60% with reliable growth Asset-backed cyclical Assets 20 – 30% companies Structural growth driven by Rapid growth 10 – 20% geography or product line The importance of having a balance12
    • Investment process Three sources of dividends 100% 90% Quality 80% Fund weighting (%) 70% Assets 60% 50% Rapid growth 40% 30% Sale at right price 20% 10% 0% Cash13 Source: M&G, as at 31 March 2012
    • Investment process Dividend cuts will happen Number of dividend increases/cuts since fund launch (18.07.08) 140 129 Number of dividend announcements 120 100 80 60 40 20 20 0 Dividend Increases Dividend Cuts Evidence that the fund is taking enough risk14 Source: M&G, as at 31 March 2012
    • Investment process Dividend cuts are NOT an automatic sell signal 70 Purchased at fund launch: Dividend 60 yield 2.5% reinstated 50 Share price (CAD) Acquisition of Fording Canadian 40 Coal Trust Holding sold Adding to on valuation holding 30 below CAD 10 grounds Dividend cut 20 10 0 Jul-08 Sep-08 Nov-08 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-09 Jan-10 Jan-1115 Source: Datastream, as at 28 February 2011
    • Investment process Don’t sell on the news Returns since dividend cut (EUR) 70% 59.2% 60% 50% 40% 31.6% 30% 20% 10% 0% Fund holdings (ex Teck) MSCI AC World Sell at the right price – valuation is key16 Source: Bloomberg, as at 31 March 2012
    • Investment process A long-term investment approach 100% 90% 80% 70% 60% 50% 40% 30% 26.0% 28.0% 22.0% 20% 17.0% 10% 0% 2008* 2009 2010 2011 A 50 stock portfolio with one or two stocks entering and leaving the fund each month17 Source: M&G, as at 31 December 2011. * Fund launched 18 July 2008
    • Agenda • Dividend investing – our philosophy • Investment process • Fund update18
    • M&G Global Dividend Fund Geographic diversity Region % Brazil Cash Australia US & Canada 43.3 Asia ex Japan Europe 22.5 US & Canada UK 14.3 UK Asia ex Japan 9.0 Australia 6.2 Brazil 2.4 Europe Cash 2.3 Structurally underweight in Japan19 Source: M&G, as at 31 March 2012
    • Currency risk Minimal contribution to portfolio risk M&G Global Dividend Fund: contribution to active risk 40 30 % 20 10 0 Global size Currency Region Global market (Beta) Sector Stock specific20 Source: Bespoke risk model relative to MSCI AC World Index as at 31 December 2011.
    • M&G Global Dividend Fund Sector breakdown Fund (%) MSCI AC World Relative Sector Index (%) (%) Consumer staples 15.8 10.2 5.6 Financials 24.9 19.5 5.4 Materials 11.9 7.9 4.0 Healthcare 8.6 8.9 -0.3 Utilities 2.6 3.7 -1.1 Energy 9.5 11.4 -1.9 Information technology 10.1 13.1 -3.0 Telecommunication services 0.8 4.5 -3.7 Industrials 6.8 10.5 -3.7 Consumer discretionary 6.7 10.5 -3.8 Cash 2.3 0.0 2.321 Source: M&G, as at 31 March 2012
    • M&G Global Dividend Fund Market cap split MSCI AC World Company size Fund (%) (%) Mega cap ($50bn +) 30.7 36.7 Large cap ($10-$50bn) 44.1 39.2 Mid cap ($2-$10bn) 19.0 21.7 Small cap (<$2bn) 3.8 2.4 Cash 2.3 0.022 Source: M&G, as at 31 March 2012
    • M&G Global Dividend Fund Outperforming in different market conditions M&G Global Dividend Fund: calendar year returns (EUR) 40 35 30 25 20 15 Return (%) 10 5 0 -5 -10 -15 -20 -25 MSCI AC World M&G Global Dividend Fund23 Source: Bloomberg as at 31 December 2011. Euro A class shares, bid to bid, net income reinvested. *Fund launched on 18 July 2008
    • M&G Global Dividend Fund Portfolio yield and dividend growth (prospective) Yield Dividend growth M&G Global Dividend Fund 3.8% 8% Global average 3.1% 8%24 Source: Portfolio yield calculated by M&G using dividend forecasts to March 2012 as at 31March 2012. Global yield data from Societe Generale as at 2 April 2012.
    • M&G Global Dividend Fund The power of long-term compounding Dividend growth since launch 40 M&G Global Dividend Fund +9% 30 20 +13% Return (%) 10 +9% 0 UK Europe -10 Japan US -20 -30 2009/2010 2010/2011 2011/201225 Source: M&G, as at 31 March 2012. Sterling A class shares. Historic US data from Standard & Poor’s, historic UK data from Capita Registrars; all other data from Societe Generale
    • Summary • Focus on dividend growth, not yield • Creating a balanced portfolio to outperform in different market conditions • Dividend investing is an excellent way to build wealth26
    • Appendix27
    • The power of dividends Dividends and share-price performance go hand in hand Returns of S&P 500 stocks by dividend policy 10,000 Dividend Growers & Initiators ( ) S&P 500 Geometric Equal-Weighted Total Return Index ( ) 5000 Non Dividend-Paying Stocks ( ) 1000 500 100 50 Returns based on monthly equal-weighted geometric average of total returns of S&P 500 component stocks, with components reconstituted monthly. 10 2008 2006 2011 1986 1988 1990 1992 1996 1998 2000 2002 2004 1994 2010 1972 1974 1976 1978 1980 1982 1984 Monthly Data 31/1/1972 – 31/12/2011 (Log Scale) A winning strategy28 Copyright 2011 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. See NDR Disclaimer atwww.ndr.com/copyright.html For data vendor disclaimers refer to . www.ndr.com/vendorinfo/ .
    • Share buybacks Not the same as dividends 1600 700 600 1400 500 Buybacks ($ billion) 400 S&P 500 1200 300 200 1000 100 800 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 S&P 500 (Index level) Buybacks ($ billion) Cyclical by nature: buying shares at high prices is a source of huge value destruction29 Source: S&P 500 data from Bloomberg as at 31 December 2010, buyback data from Standard & Poor’s as at 23 March 2011
    • What are we looking for? Discipline and growth Does the company have a long track record of dividend growth? Does the company invest capital wisely? Can the company grow in a sustainable manner over time? What yield can we get for this type of company?30
    • M&G Global Dividend Fund Transactions over the past 12 months New purchases Quality Assets Rapid growth Svenska Handelsbanken Blackrock Tod’s Intact Financial Occidental Petroleum CME Group Mattel Siemens Campbell Brothers British American Tobacco CNOOC Analog Devices Umicore Chroma ATE Prosafe31 Source: M&G, as at 31 March 2012.
    • Umicore Assets • World leader in materials technology Dividend (€) based in Belgium 1 0.9 • Cyclical businesses with long-term growth in underlying markets 0.8 0.7 – Automotive catalysts 0.6 0.5 – Rechargeable batteries 0.4 – Precious metals recycling 0.3 0.2 • Consistent dividend history 0.1 – 2011 dividend increased by 25% 032 Source: Bloomberg as at 31 December 2011
    • Mattel Quality • World’s leading toy company – Strong brands – Global footprint • Long track record of profitable growth – Innovation – International expansion • Commitment to shareholder returns – 35% increase in 2012 dividend33 Source: Mattel analyst presentation, 11 February 2011
    • M&G Global Dividend Fund Transactions over the past 12 months Complete sales Quality Assets Rapid growth Sale at right price VF Corp Rolls Royce ITT Xylem* AES Tiete Diamond Offshore Johnson Matthey Bluescope Steel Coca-Cola Timken Esprit Exelis* Total Cremer Treasury Wine Estates** Foster’s Group Esprit Souza Cruz34 Source: M&G, as at 31 March 2012. *Spun off from ITT, **Spun from Foster’s Group
    • M&G Global Dividend Fund Regional breakdown Fund (%) MSCI AC World Relative Sector Index (%) (%) US & Canada 43.3 50.5 -6.2 Europe 22.5 15.7 6.8 UK 14.3 8.2 6.1 Japan 0.0 7.9 -7.9 Asia ex Japan 9.0 9.3 -0.3 Australia/NZ 6.2 3.1 3.1 Latin America 2.4 3.0 -0.6 EMEA 0.0 2.3 -2.3 Cash 2.3 0.0 2.335 Source: M&G, as at 31 March 2012
    • M&G Global Dividend Fund Geographic split 100% US & Canada 90% 80% Continental Europe Fund weighting (%) 70% UK 60% Japan 50% Asia ex Japan 40% Australia 30% Latin America 20% EMEA 10% 0% Cash36 Source: M&G, as at 31 March 2012
    • M&G Global Dividend Fund Top 10 holdings Stock Country Fund (%) Chubb US 3.3 Methanex Canada 3.2 Novartis Switzerland 3.2 Prudential UK 3.2 Intel US 2.9 DSM Netherlands 2.8 HSBC Hong Kong 2.8 Reynolds American US 2.8 British American Tobacco UK 2.8 Analog Devices US 2.737 Source: M&G, as at 31 March 2012
    • Liquidity Portfolio split by average daily volume 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% £10m+ £2m - 10m <£2m A scalable investment process38 Source: M&G, as at 12 December 2011
    • Sell discipline Tough competition for places in the portfolio Valuation Return % Better options Return % Disasters Return % 3M 44.5 Carnival 11.4 Aracruz -70.1 Home Depot 42.4 ING -15.8 Norsk Hydro -41.7 Astellas Pharma 39.5 Credit Suisse 23.5 E.ON -37.9 CNOOC 62.4 BASF -17.5 Esprit -68.1 Cochlear 61.3 Teliasonera -1.0 Bluescope Steel -105.4 Massmart 65.2 Pfizer 16.6 Souza Cruz 82.5 Wells Fargo 18.9 Rolls Royce 89.9 Philips Electronics -11.6 Johnson Matthey 44.1 Petrobras 44.3 Coca-Cola 69.3 Tele2 5.8 Tate & Lyle 6.4 Holcim 32.3 US Bancorp 10.6 Billabong 21.8 DuPont 7.2 Microsoft 4.2 Alliant Energy 6.8 Vale 25.2 America Movil 14.7 Wellstream 32.1 Corn Products 5.7 Statoil -15.5 Kellogg 14.4 Teck 49.9 Cremer -1.7 Timken 116.7 Foster’s Group 47.4 Total -15.4 Diamond Offshore -12.539 Source: M&G, as at 31 January 2012. Returns relative to FTSE World Index.
    • M&G Global Dividend Fund Diversified sources of performance Value added by stock relative to MSCI AC World Index (18.07.08 – 31.12.11) 6 5 Contribution to relative performance 4 3 2 1 0 -1 -2 -3 Returns driven by the investment approach, not just a handful of names40 Source: Xamin, as at 31 December 2011. Investment returns (gross of fees) relative to MSCI AC World, calculated in sterling
    • Attribution by source of dividends Diversified sources of performance Attribution by source of dividends since fund launch (18.07.08) 15 10 Value added (%) 5 0 Quality Assets Rapid Growth41 Source: Xamin, as at 31 December 2011. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling
    • M&G Global Dividend Fund Performance attribution by stock (One year to 31 March 2012) Value added Value added Top 10 (%) Bottom 10 (%) VF Corp 0.88 BHP Billiton -0.51 Intel 0.76 Banco Do Brasil -0.49 Roche 0.65 Bluescope Steel -0.48 Reynolds American 0.63 HSBC -0.38 Chubb 0.51 Telefonica -0.38 Prosafe 0.47 Yip’s Chemicals -0.34 Arthur J Gallagher 0.42 Axa -0.33 Taiwan Semiconductor 0.40 Chroma ATE -0.21 Methanex 0.38 ITT Corp -0.19 Foster’s Group 0.36 Diamond Offshore -0.1742 Source: Xamin as at 31 March 2012. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling.
    • M&G Global Dividend Fund Performance attribution by region (One year to 31 March 2012) 4 3 2 % 1 0 -1 -2 Japan Australia / NZ Europe ex UK UK Asia ex Japan Latin America EMEA US / Canada Stock selection Asset allocation43 Source: Xamin as at 31 March 2012. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling.
    • M&G Global Dividend Fund Performance attribution by sector (One year to 31 March 2012) 3 2 1 % 0 -1 Consumer discretionary Financials Consumer staples Healthcare Industrials Energy Technology Utilities Materials Telecommunication services Stock selection Asset allocation44 Source: Xamin as at 31 March 2012. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling.
    • M&G Global Dividend Fund Comprehensive support infrastructure for fund managers M&G Equities Investment Team Equity Research M&G Global Equities Team Equities Dealing Team Dave Fishwick Head of Macro and 22 investment professionals Head of Equity Equity Investment Head of Dealing: Research: James Alexander M&G Global Dividend Daniel Riches David McGillveray Fund Manager: Head of 11 Analysts Stuart Rhodes 5 Dealers Investment Deputy Fund Managers: Oversight Simon Bailey, Aled Smith Gary Cotton Portfolio Construction Chief Executive Fund Manager Assistants - Equities & Risk (FMAs) 7 PCR team members (Equities) Investment Specialists 6 FMAs (Equities) Arvind Sabharwal 9 Investment Specialists (Equities) Director of Investment M&G Global Dividend M&G Global Dividend - Equities Maria Asprouli M&G Global Dividend James Doogan Ritu Vohora Kotaro Miyata Adam Jones Susanne Grabinger45 Source: M&G as at 23 January 2012.
    • Prices may fluctuate and you may not get back your original investment.This document is designed for investment professionals’ use only, not for onward distribution to any other person or entity. For Switzerland: Distribution of this document inor from Switzerland is not permissible with the exception of the distribution to qualified investors according to the Swiss Collective Investment Schemes Act, the SwissCollective Investment Schemes Ordinance and the respective Circular issued by the Swiss supervisory authority ("Qualified Investors"). Supplied for the use by the initialrecipient (provided it is a Qualified Investor) only. In Spain the M&G Investment Funds are registered for public distribution under Art. 15 of Act 35/2003 on Collective InvestmentSchemes as follows: M&G Investment Funds (1) reg. no 390, M&G Investment Funds (2) reg. no 601, M&G Investment Funds (3) reg. no 391, M&G Investment Funds (5) reg. no 972,M&G Investment Funds (7) reg. no 541, M&G Investment Funds (9) reg. no 930, M&G Global Dividend Fund reg. no 713 M&G Dynamic Allocation Fund reg. no 843, M&G Global MacroBond Fund reg. no 1056 and M&G Optimal Income Fund reg. no 522. The collective investment schemes referred to in this document (the "Schemes") are open-ended investmentcompanies with variable capital, incorporated in England and Wales. In the Netherlands, all funds referred to, with the exception of M&G Investment Funds (2), M&G Investment Funds(5), M&G Investment Funds (9) and the M&G Dynamic Allocation Fund, are registered with the Dutch regulator, the AFM. This information is not an offer or solicitation of an offer for thepurchase of investment shares in one of the Funds referred to herein. Purchases of a Fund should be based on the current prospectus. The prospectus, Key Investor InformationDocument (KIID), annual report and subsequent semi-annual report, are available free of charge, in paper form, from the ACD: M&G Securities Limited, Laurence Pountney Hill, London,EC4R 0HH, GB, or one of the following: M&G International Investments Limited, German branch, Bleidenstraße 6-10, D-60311 Frankfurt am Main, the German paying agent J.P. MorganAG, Junghofstraße 14, D-60311 Frankfurt am Main, the Austrian paying agent, Raiffeisen Bank International A.G., Am Stadtpark 9, A-1030 Wien, the Luxembourg paying agent, J.P.Morgan Bank Luxembourg S.A., European Bank & Business Center, 6 c route de Treves, 2633 Senningerberg, Luxembourg, Allfunds Bank, Calle Estafeta, No 6 Complejo Plaza de laFuente, La Moraleja 28109, Alcobendas, Madrid, M&G International Investments Limited, 34 Avenue Matignon, 75008, Paris, France or from the French centralising agent of the Fund:RBC Dexia Investors Services Bank France. For Switzerland: Please refer to M&G International Investments Ltd., Bleidenstraße 6-10, D-60311 Frankfurt am Main or, for Sweden, fromthe paying agent, Skandinaviska Enskilda Banken AB (publ), Sergels Torg 2, 106 40 Stockholm, Sweden. For Italy, they can also be obtained from one of the appointed paying agents,details of which can be found by visiting the contact section on the following website: www.mandg-investments.it. Before subscribing you should read the prospectus, which includesinvestment risks relating to these funds. This financial promotion is published by M&G International Investments Ltd. Registered Office: Laurence Pountney Hill, London EC4R 0HH,authorised and regulated by the Financial Services Authority and registered with the CNMV in Spain. Past performance is not a guide to future performance. Performance stats arequoted gross of Italian tax on capital gains