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M&G Global Dividend FundMay 2013Kotaro Miyata, Investment Specialist
2Agenda• Dividend investing – our philosophy• Understanding potential headwinds• Putting the theory into practice
3Dividend investing – our philosophySource: M&G, 30 April 2013Dividend(p)The power of long-term compoundingDividend(cents)...
40.00.51.01.52.02.53.03.501002003004005006007008002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012CWS Dividend McDon...
5• Long-term dividend growthrequires disciplined growth in thebusiness• Rising dividends create cultureof discipline• Divi...
6Return(%)-0.2 %pa1.8 %pa8.2 %pa11.4 %pa-5.00.05.010.015.0S&P500 CapitalReturnS&P500 Total Return Dividend AchieversCapita...
7Agenda• Dividend investing – our philosophy• Understanding potential headwinds• Putting the theory into practice
8Understanding potential headwinds-50-45-40-35-30-25-20-15-10-50510MSCI AC World MSCI World High Dividend YieldReturn(%)So...
9Understanding potential headwinds0510152025303540MSCI AC World MSCI World High Dividend YieldReturn(%)Source: Datastream,...
10Understanding potential headwindsThe importance of having a balanceMitigating the defensive bias by picking stocks from ...
11Understanding potential headwindsCombining low beta with high betaSource: Datastream, 30 April 2012. Rebased at 18 July ...
12Agenda• Dividend investing – our philosophy• Understanding potential headwinds• Putting the theory into practice
13Putting the theory into practiceThe challenge of changing market conditionsValueadded(%)Attribution by source of dividen...
14Putting the theory into practiceM&G Global Dividend Fund: calendar year returns (USD)A proven track record in both risin...
15Summary• Focus on dividend growth, not yield• Creating a balanced portfolio to outperform in differentmarket conditions•...
16Appendix
17• Inception: July 2008• Fund manager: Stuart Rhodes• Fund size: $10,053 million• Benchmark: MSCI AC World Index• Yield o...
18Performance in dollarsYTD%1 year%3 years% (pa)Since launch(18.07.08) %p.a.M&G Global Dividend Fund 9.6 13.3 11.3 7.4MSCI...
19An efficient and disciplined investment processM&G Global Dividend FundIdentifying stocks wewould like to own atsome poi...
20Three sources of dividendsSource: M&G, 31 March 2013FundweightingM&G Global Dividend Fund0%10%20%30%40%50%60%70%80%90%10...
21Regional breakdownSource: M&G, 31 March 2013M&G Global Dividend FundFund%MSCI AC World Index%Relative%US & Canada 48.4 5...
22Fund%*MSCI AC WorldIndex %Relative%Materials 13.0 6.5 6.5Financials 23.3 21.7 1.6Health Care 12.4 10.0 2.4Consumer Stapl...
23Top 10 holdingsM&G Global Dividend FundSource: M&G, 30 April 2013 *preliminary dataStock Fund %*Sanofi 3.5Microsoft 3.4O...
24M&G Global Dividend Fund• Stuart joined M&G in 2004 as a global equity analyst working closely with Aled Smith on US equ...
For investment professionals and Professional Investors only. Not for onward distribution. No other persons should rely on...
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Mand g global dividend citywire hk km - may 13 screen

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Transcript of "Mand g global dividend citywire hk km - may 13 screen"

  1. 1. M&G Global Dividend FundMay 2013Kotaro Miyata, Investment Specialist
  2. 2. 2Agenda• Dividend investing – our philosophy• Understanding potential headwinds• Putting the theory into practice
  3. 3. 3Dividend investing – our philosophySource: M&G, 30 April 2013Dividend(p)The power of long-term compoundingDividend(cents)051015202530Dividend (stock yielding 6%, no growth) Dividend (stock yielding 4%, 10% growth)Focus on dividend growth, not yield
  4. 4. 40.00.51.01.52.02.53.03.501002003004005006007008002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012CWS Dividend McDonalds Dividend CWS Capital Return McDonalds Capital ReturnDividendPayments(USD)Capitalreturnrebasedto100(USD)Source: Datastream as at 31 December 2012Dividend YieldDec 2002California WaterServices Group (CWS)4.7%McDonald’s 1.5%Dividend Payments and Capital Return since 2002, Rebased to 2002 figuresQuicker the growth, quicker the payback on your investmentDividend investing – our philosophyGrowth vs yield – an illustration
  5. 5. 5• Long-term dividend growthrequires disciplined growth in thebusiness• Rising dividends create cultureof discipline• Dividends shouldn’t be anafterthought– An integral part of goodcompany managementDividend investing – our philosophySource: Mergent’s Dividend Achievers, 31 March 2013. US companies with a 25-year track record of consecutive dividend growthUSdividend achieversCapital discipline
  6. 6. 6Return(%)-0.2 %pa1.8 %pa8.2 %pa11.4 %pa-5.00.05.010.015.0S&P500 CapitalReturnS&P500 Total Return Dividend AchieversCapital ReturnDividend AchieversTotal ReturnDividend investing – our philosophySource: Mergent’s Dividend Achievers, 30 November 2012; Datastream, 31 December 2012. US companies with a 25-year track record of consecutive dividend growthUS annualised return: Capital growth vs. total return in USD (Dec 1999 – Dec 2012)Dividends and share prices go hand in handDividends and growth are not mutually exclusive
  7. 7. 7Agenda• Dividend investing – our philosophy• Understanding potential headwinds• Putting the theory into practice
  8. 8. 8Understanding potential headwinds-50-45-40-35-30-25-20-15-10-50510MSCI AC World MSCI World High Dividend YieldReturn(%)Source: Datastream, 31 December 2012Annual return (USD): MSCI World High Dividend Yield Index vs MSCI AC World IndexHigh yield strategies have a defensive bias, in dollars
  9. 9. 9Understanding potential headwinds0510152025303540MSCI AC World MSCI World High Dividend YieldReturn(%)Source: Datastream, Bloomberg, 31 December 2012Annual return (USD): MSCI World High Dividend Yield Index vs MSCI AC World IndexHigh yield strategies struggle to keep up in rising markets, in dollars
  10. 10. 10Understanding potential headwindsThe importance of having a balanceMitigating the defensive bias by picking stocks from three distinct categoriesSources ofdividendsQualityAssetsRapid GrowthCompany characteristicsStructural growth driven by geographyor product lineAsset-backed cyclical companiesDisciplined companies with reliablegrowthTypical fundweightingSource: M&G, 30 April 201350%-60%20%-30%10%-20%
  11. 11. 11Understanding potential headwindsCombining low beta with high betaSource: Datastream, 30 April 2012. Rebased at 18 July 2008050100150200250Jul08Sep08Nov08Jan09Mar09May09Jul09Sep09Nov09Jan10Mar10May10Jul10Sep10Nov10Jan11Mar11May11Jul11Sep11Nov11Jan12Mar12May12Jul12Sep12Nov12Jan13Mar13MSCI AC World Nestle Methanex PrudentialRebasedto100Total return (USD): July 2008 – April 2013
  12. 12. 12Agenda• Dividend investing – our philosophy• Understanding potential headwinds• Putting the theory into practice
  13. 13. 13Putting the theory into practiceThe challenge of changing market conditionsValueadded(%)Attribution by source of dividends since fund launch (18.07.08)Source: Xamin, 31 March 2013. Investment returns (gross of fees) relative to MSCI AC World Index, calculated in sterling, *Fund launched on 18 July 2008Diversified sources of performance-4-20246810122008* 2009 2010 2011 2012 2013 YTDQuality Assets Rapid Growth
  14. 14. 14Putting the theory into practiceM&G Global Dividend Fund: calendar year returns (USD)A proven track record in both rising and falling markets-40-30-20-1001020304050MSCI AC World M&G Global Dividend FundReturn(%)Source: Bloomberg, 30 April 2013. US Dollar A class shares, net income reinvested , price to price. *Fund launched on 18 July 2008Returns (USD): M&G Global Dividend Fund vs MSCI AC World IndexA fund designed to cope with all weathers
  15. 15. 15Summary• Focus on dividend growth, not yield• Creating a balanced portfolio to outperform in differentmarket conditions• Dividend investing is an excellent way to build wealth
  16. 16. 16Appendix
  17. 17. 17• Inception: July 2008• Fund manager: Stuart Rhodes• Fund size: $10,053 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 IndexFund facts© 2012 Morningstar. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of Morningstar OBSR, (2) may not be copied or redistributed, (3) do not constitute investment adviceoffered by Morningstar OBSR, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. Morningstar OBSR shall not be responsible for anytrading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Morningstar OBSR Analyst Rating™ is subjective in nature and reflects Morningstar OBSR’s current expectations offuture events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, Morningstar OBSR does not guarantee that a fund will perform in line with its Morningstar OBSR Analyst Rating.Likewise, the Morningstar OBSR Analyst Rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund or of its underlying securities and should not be used as the sole basis for making any investment decision.An S&P Capital IQ fund grading represents an opinion only and should not be relied on when making an investment decision. Past performance is not indicative of future results. Currency exchange rates may affect the value of investments. Copyright© 2012 by McGraw-Hill international (UK) Limited (S&P), a subsidiary of The McGraw-Hill Companies, Inc. All rights reserved.Source: M&G, 30 April 2013. Ratings as at 31 January 2013 and should not be taken as recommendationM&G Global Dividend Fund
  18. 18. 18Performance in dollarsYTD%1 year%3 years% (pa)Since launch(18.07.08) %p.a.M&G Global Dividend Fund 9.6 13.3 11.3 7.4MSCI AC World Index 6.6 11.2 8.4 3.8Global Large-Cap Value Equity sector 7.1 10.4 6.2 1.4M&G Global Dividend FundPerformance in dollarsSource: M&G, Morningstar, 31 March 2013. $US A class shares (Pan European database), net income reinvested, price to priceTop quartile in sector since launch
  19. 19. 19An efficient and disciplined investment processM&G Global Dividend FundIdentifying stocks wewould like to own atsome point• Long-term dividend trackrecord• Long-term growthprospectsInvestableuniverse~200 stocksScreeningEliminating stocks fromthe global universe of15,000 stocks• Focus on dividend-payingcompanies• Focus on stocks withsufficient liquidity (marketcap >$1 billion)~4,000 stocksPortfolioconstructionConstructing a portfoliothat can outperform inall market conditions• Picking stocks from threesources of dividends• Position size determinedby convictionFinal portfolio~50 stocks
  20. 20. 20Three sources of dividendsSource: M&G, 31 March 2013FundweightingM&G Global Dividend Fund0%10%20%30%40%50%60%70%80%90%100%QualityAssetsRapid growthSale at right priceCash
  21. 21. 21Regional breakdownSource: M&G, 31 March 2013M&G Global Dividend FundFund%MSCI AC World Index%Relative%US & Canada 48.4 51.2 -2.8Europe 26.5 15.3 11.1UK 13.6 8.0 5.6Japan 0.0 7.8 -7.8Asia ex Japan 5.5 9.2 -3.7Australia/NZ 4.2 3.4 0.8Latin America 0.7 2.7 -2.0EMEA 0.0 2.3 -2.3Cash 1.1 0.0 1.1
  22. 22. 22Fund%*MSCI AC WorldIndex %Relative%Materials 13.0 6.5 6.5Financials 23.3 21.7 1.6Health Care 12.4 10.0 2.4Consumer Staples 11.9 10.8 1.1Energy 10.9 10.0 0.9Industrials 9.0 10.2 -1.2Utilities 2.1 3.6 -1.5Consumer Discretionary 8.8 11.0 -2.2Telecommunications 0.0 4.4 -4.4Information Technology 7.6 11.8 -5.4Cash and near cash 1.0 0.0 1.0Sector breakdownSource: M&G, 30 April 2013. *Preliminary dataM&G Global Dividend Fund
  23. 23. 23Top 10 holdingsM&G Global Dividend FundSource: M&G, 30 April 2013 *preliminary dataStock Fund %*Sanofi 3.5Microsoft 3.4Occidental Petroleum 3.2Methanex 3.1BAT 3.0Johnson & Johnson 3.0Roche Genusscheine 3.0Novartis 2.9DSM 2.9UPS 2.9
  24. 24. 24M&G Global Dividend Fund• Stuart joined M&G in 2004 as a global equity analyst working closely with Aled Smith on US equities• He was appointed manager of the M&G Global Dividend Fund upon its launch in July 2008• Stuart graduated from Bath University with a degree in business administration. He is a CFAcharterholderBiographies• Simon joined Prudential Portfolio Managers in 1997 and following Prudential’s acquisition of M&G in1999 became a fund manager specialising in UK smaller companies• After more than 10 years investing in UK smaller companies, Simon became the dedicated analyst forthe M&G Global Dividend Fund in August 2010; he was appointed deputy fund manager in April 2011• Simon graduated from Durham University with a BA in economics. He is a CFA charterholder• Kotaro joined M&G in October 2006 as an investment specialist and is responsible for the M&GGlobal Dividend Fund, M&G Pan European Dividend Fund and M&G European Strategic Value Fund• He was previously a fund manager at Invesco Asset Management where he was responsible for UKand European equities• Kotaro graduated from Oxford University with a degree in classics and holds the Securities InstituteDiplomaStuart Rhodes, Fund ManagerSimon Bailey, Deputy Fund ManagerKotaro Miyata, Investment Specialist
  25. 25. For investment professionals and Professional Investors only. Not for onward distribution. No other persons should rely on any information contained within. ThisFinancial Promotion is issued by M&G International Investments Ltd. Registered Office: Laurence Pountney Hill, London EC4R 0HH, authorised and regulated in the United Kingdomby the Financial Services Authority. For Hong Kong only: The Funds referred to in this document may not be authorised by the Securities & Futures Commission of Hong Kong (‘theSFC’) and may not be registered for public distribution in Hong Kong. The Funds may only be offered to Professional Investors (as defined in the Securities and Futures Ordinance).For Singapore only: The Funds referred to in this document are not authorised by the Monetary Authority of Singapore (MAS) and are not registered for public distribution inSingapore. M&G International Investments Ltd and the Funds referred to in this document may not be authorised, recognised or regulated by the local regulator in your jurisdiction.This information is not an offer or solicitation of an offer for the purchase or sale of investment shares in one of the Funds referred to herein.
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