Presentation ubs western winners equity fund

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Presentation ubs western winners equity fund

  1. 1. Asset management September 2013 Unlock the benefits of EM with Western Stocks UBS Western Winners Equity Fund For Professional Clients only CH Version Nick Irish, Head of Global Equities Asset management
  2. 2. 1 Combining the best of both worlds  Diversified, actively managed equity fund with approximately 40 companies from developed markets (note: this fund does not hold stocks listed in emerging markets)  Access to developed market companies with a strong EM footprint. Companies are evaluated for this based on factors such as: – High share of sales from EM – Currently, the companies in the portfolio have, on average, 41% of sales from emerging markets – High share of profits from EM – Outlook for their ability to further profit from presence in EM  Benefit from less volatility, efficiency through reduced costs and a higher quality of companies due to superior corporate governance of developed market companies  Full hedging of foreign currency risks in the primary share class and hedged share classes UBS Western Winners Equity Fund Source: UBS Global Asset Management as of end July 2013
  3. 3. 2 Experienced investment team Portfolio Managers – proven track record in stock picking Research – getting to know companies through deep analysis Nick Irish PM Charles Burbeck PM Broad, global market expertise based on 20 years of investment experience (average) Deep global industry knowledge from a team of London-based Global Sector Specialists (average experience 14 years) Konstantin Stoev, (12 years industry experience and the consumer sector specialist) has particularly valuable expertise for the Fund. He supports Nick & Charles as Deputy PM. Deep regional industry knowledge from a large team of regional sector analysts based all over the world (average experience 14 years) Source: UBS Global Asset Management as of end July 2013 Proven investment acumen, with substantial resources and unique database
  4. 4. 3 Proven investment process Western Winners Our chosen approx. 40 DM stocks Portfolio Construction Risk aware, customised implementation Portfolio Managers Broad global market knowledge Idea generation Portfolio Construction (T-V-T)¹ Global Sector Specialists Deep global industry knowledge Regional analysts Deep regional industry knowledge Quantitative input Cash flow based valuation screening Static metrics based screening EM sales % screening Bespoke sector screens Other inputs External research Personal networks Ongoing monitoring A combination of judgement and discipline 1 Thesis- Valuation-Timing: our criteria for stock selection
  5. 5. 4 Emerging market economies: Still growing  Growth moderating, but billions of people continue to get richer  Emerging economies will generally continue their moves up the per capita income scale and spending patterns will continue to change as a result Source: UBS Global Asset Management, Absolute Strategy Research/IMF estimates. Data as of end July 2013. Slower growth trend, but sustainable, and faster than the developed world Real GDP growth rates (% yoy) -6 -4 -2 0 2 4 6 8 10 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 EM economies DM economies
  6. 6. 5 Consumption remains the key to EM growth Source: UBS Global Asset Management Expanding consumption is key to China’s 12th Five Year Plan (2011-15) “China will expand its opening-up policy, and the nation needs to promote domestic consumption through continuing to open up its markets Li Keqiang, newly elected Premier of China March 2013 ”
  7. 7. 6 Spending patterns are continuing to change 0 5,000 10,000 15,000 20,000 25,000 Sugar & confectionery Bread & cereals Milk, cheese & eggs Coffee, tea & cocoa Soft drinks Tobacco Alcoholic beverages AV, photographic and computing equipment Vehicles Clothing Transport services Medical products & equipment Personal care Education Household textiles, tableware & utensils Electricity, gas & other fuels Recreation & culture durables Household tools & appliances Insurance and financial services Telephone & telefax services Outpatient services Recreation & cultural services Social protection GDP per capita (USD)Unaffordable phase Growth phase Food, Beverages &Tobacco OthergoodsServices Typically, discretionary spending explodes above certain income thresholds Growth phases of various products and services in relation to GDP per capita Source: UBS Global Asset Management, The World Bank GDP per capita data in constant USD for 2012 released 1 July 2013, HSBC Global Research ‘Consumer in 2050: The Rise of the Middle Class ’ 15 October 2012. ‘Growth phase’ refers to the income bracket which exhibits the strongest growth in real dollar expenditures (USD) 3 billion EM consumers are here… …another 700m are here
  8. 8. 7 Good opportunities continue to prevail… …for companies that can satisfy these shifting needs Source: UBS Global Asset Management. Data as of end July 2013. Food,Beverages &Tobacco OthergoodsServices Nestle Nestle Nestle Nestle Coca-Cola Hellenic Imperial Tobacco, SABMiller Google, Facebook, Microsoft Toyota Motor Burberry Boeing, Jardine Matheson Healthcare Holdings Colgate Palmolive, Shiseido Energy Holdings AIA, Citigroup, HSBC, Standard Chartered Vodafone, Telenor Richemont Sugar & confectionery Bread & cereals Milk, cheese & eggs Coffee, tea & cocoa Soft drinks Tobacco Alcoholic beverages AV, photographic and computing equipment Vehicles Clothing Transport services Medical products & equipment Personal care Education Household textiles, tableware & utensils Electricity, gas & other fuels Recreation & culture durables Household tools & appliances Insurance and financial services Telephone & telefax services Outpatient services Recreation & cultural services Social protection Exposure within Western WinnersEconomic sector
  9. 9. 8 Portfolio structures 8 UBS (Lux) Equity SICAV – Western Winners (USD) P-acc Source: UBS Global Asset Management as of end July 2013 Sector weights (%) Health Care Financials Consumer Staples Industrials Energy Information Technology Materials Consumer Discretionary Telecommunication Services 16.4 14.9 14.8 12.7 10.2 8.6 8.5 8.2 5.8 Country exposure (%) United States United Kingdom Japan Switzerland Hong Kong Australia Germany Netherlands Norway Others 28.0 18.6 12.2 12.1 7.5 4.5 4.1 3.4 3.1 6.6 10 largest equity positions (in %) Fund AIA Group Ltd 3.86 Nestle SA 3.74 Toyota Motor Corp 3.30 Koniklijke DSM NV 3.13 Jardine Matheson Holdings Ltd 3.13 HSBC Holdings PLC 3.11 LyondellBasell Industries NV 3.10 Citigroup Inc 2.98 Itochu Corp 2.90 BP Plc 2.87
  10. 10. 9 Portfolio structures Diversified industry exposures Source: UBS Global Asset Management as of end July 2013 Consumer Discretionary Industrials Materials Financials Energy Telecoms IT Consumer Staples Healthcare Utilities North America • Hollysys • Boeing • Lyondell- basell • Citigroup • Gran Tierra • Heritage • Petro- minerales • Microsoft • Facebook • Google • Colgate Palmolive • Baxter Int’l • AbbVie • Alexion • Thermo Fisher UK • Burberry • Aberdeen Asset Mgmt • BP Genel • Vodafone • Imperial Tobacco • SAB Miller • Coca Cola Hellenic Europe ex UK • Richemont • Koninklijke DSM • ENI • Telenor • Infineon • Nestle • Bayer Novartis Asia ex Japan • Jardine Matheson • Rio Tinto • AIA • HSBC • Standard Chartered • CSL Japan • Toyota Motor • Thk • Itochu • Japan Petroleum • Shiseido Cyclical sectors Defensive sectors
  11. 11. 10 Interesting companies with a strong footprint in EM… Telenor SABMiller • Telecoms operator, listed in Norway • 56% sales from EM • Benefits from strong growth in mobile internet usage in emerging markets • Brewing and beverage company, listed in UK • 60% sales from EM • Grows twice as fast as global beer market due to its EM exposure (Africa, Latin America and Asia) Nestle • One of the largest global fast-moving consumer goods companies • 45% sales from EM • Benefits from the growth in demand for processed food in EM This information should not be considered a recommendation to purchase or sell any particular security. The fund is actively managed, thus allocations can be changed any time at UBS’s discretion. Current portfolio structures may be found at www.ubs.com/fundgate. Source: UBS Global Asset Management as of end June 2013
  12. 12. 11 …while some may be less known This information should not be considered a recommendation to purchase or sell any particular security. The fund is actively managed, thus allocations can be changed any time at UBS’s discretion. Current portfolio structures may be found at www.ubs.com/fundgate. Shiseido Genel Energy • Global cosmetics company, listed in Japan • Approximately 20% sales, and growing, from EM • Benefits from continued brand growth in EM especially in China and Brazil • UK listed E&P company, with its assets in the Kurdish region of Iraq • 100% of sales are in EM • Major growth in exports from the Kurdistan project will feed energy demand in Turkey Thermo Fisher • A global leader in analytical and laboratory products and services’ listed in the US • Approximately 20% of revenues from EM: fastest growing segment • Benefits from ongoing strong demand for its air pollution measuring instruments in China Source: UBS Global Asset Management as of end June 2013
  13. 13. 12 Recent activity highlights Source: UBS Global Asset Management Note: Based on Global Equity model and may vary. Data as of end July 2013. Complete sales  Bridgestone: A (Japan listed) world leader in tyre manufacturing. We originally bought the holding because of its competitive cost position, good utilisation and pricing power. It remains an exceptionally well-run company with good profitability. However, we believe its share price is now fully reflecting this thesis and further out-performance is limited. We sold the position in May after strong price appreciation. We switched into Toyota Motor instead, which has greater upside potential from here.  Shiseido: A (Japan listed) Global cosmetics company. We believe that the company’s domestic business in Japan is likely to improve as a result of income growth and a positive wealth effect, and we also expect continued growth in its EM business. The company has also just effected management change that is likely to lead to renewed focus on sales growth. Approximately 20% of sales (and growing( from EM  Itochu: One of Japan’s largest trading houses with a very long and strong involvement in China. We believe that the share price is not yet fully reflecting management’s focus on capital discipline and returns. Approximately 30% of sales from EM  Toyota Motor: The worlds largest automobile manufacturer. Cost cutting following severe business disruption in 2010 – 2011 has been successful and the company is benefitting from improving profits following yen depreciation and pick up in sales. Approximately 35% sales from EM New purchases EM opportunities from Japanese companies
  14. 14. 13 Western Winners: the best of both worlds Western Winners stocks are developed market companies with a strong emerging markets (EM) footprint EM growth – with the comfort, efficiency and quality of mature markets Western Winners stocks profit from •High growth •prospects for •emerging markets… plus …compared to a direct emerging markets investment, this approach offers: • Comfort through reduced expected volatility • Efficiency through lower trading costs • Quality through superior corporate governance For explanations on financial wordings please refer to the glossary at www.ubs.com/glossary or contact for further information your UBS client advisor.
  15. 15. Additional information APPENDIX
  16. 16. 15 Performance data I Source: UBS Global Asset Management. Data as of end July 2013. Portfolio characteristics are shown net of fees 1These figures refer to the past. Past performance is not a reliable indicator of future results. The performance shown does not take account of any commission and costs charged when subscribing to and redeeming units Performance indexed in % (share class P-acc; basis USD, net of fees)¹ 85 90 95 100 105 110 115 Jan Feb Mar Apr May Jun Jul UBS (Lux) Equity SICAV - Western Winners (USD) P-acc (hedged in USD) MSCI World Developed hedged in USD (net div. reinv.) MSCI Emerging Market hedged in USD (net div. reinv.) MSCI Emerging Market in USD (net div. reinv.) + 10.73% - 7.83% - 9.85% + 6.07% UBS (Lux) Equity SICAV – Western Winners (USD) P-acc
  17. 17. 16 Performance data II Source: UBS Global Asset Management. Data as of end July 2013. These figures refer to the past. Past performance is not a reliable indicator of future results. The performance shown does not take account of any commission and costs charged when subscribing to and redeeming units UBS (Lux) Equity SICAV – Western Winners (USD) P-acc 1) YTD: year-to-date (since beginning of the year) 2) Reference index in currency of account (without costs) Performance indexed in % (net of fees) in % 2009 2010 2011 2012 2013 July since  p.a. YTD 2013 25.01.13 Fund (USD) – – – – – 3.88 6.07 – Reference index² – – – – – 4.74 10.73 – 1 Fund (EUR hedged) – – – – – 1.69 6.00 – Fund (CHF hedged) – – – – – 2.01 6.07 –
  18. 18. 17 Fund features UBS Western Winners Equity Fund Legal Fund name: UBS (Lux) Equity SICAV – Western Winners (USD) Share classes: (USD) P-acc; (CHF hedged) P-acc; (EUR hedged) P-acc Legal structure: SICAV Fund domicile: Luxembourg Custodian: UBS (Luxembourg) S.A. Launch date: January 25, 2013 Portfolio management: UBS Global Asset Management Currency of account: USD Reference index: MSCI World hedged in USD (net div. reinv.) Accounting year ends: May 31 Distribution: Reinvestment Management fee: 1.44% Total expense ratio: N/A Liquidity: Daily Swing pricing: Yes Securities no.: (USD) P-acc: 20068923 (CHF hedged) P-acc: 20068943 (EUR hedged) P-acc: 20068951 ISIN: (USD) P-acc: LU0859500539 (CHF hedged) P-acc: LU0859500968 (EUR hedged) P-acc: LU0859501420 Please note that the share classes mentioned have not yet been launched and that UBS has no obligation or duty to launch them. Data as of end July 2013.
  19. 19. 18 Nick Irish, ASIP  Nick Irish is Head of Global Equities within the Core/Value Equities business. His team is responsible for constructing and managing global equity portfolios worldwide. Nick is ultimately responsible for the delivery of all core global equity strategies and for their performance. He co-manages all the global equity strategies with Charles Burbeck.  Prior to being appointed to his current role in April 2012, Nick was a Senior Portfolio Manager on the Core/Value Global Equities team.  Nick joined UBS Global Asset Management in March 2008 from HSBC Global Asset Management where had been Senior Global Equity Portfolio Manager since 2005, co- managing their equity portfolios (with Charles Burbeck). Prior to this, Nick spent 11 years at Schroders, most latterly also working with Charles Burbeck, co-managing their integrated global equity products.  Nick is a Regular Member of the CFA Society of the UK. Head of Global Equities Managing Director Years of investment industry experience: 18 Education: Exeter University (UK), BSc
  20. 20. 19 Charles Burbeck, ASIP  Charles is Co Head of Global Equity Portfolios, responsible for co-managing all global equity strategies with Nick Irish  Charles joined UBS Global Asset Management in January 2013. He previously worked at Barclays Wealth and Investment Management as Global Head of Equities.  Prior to this, Charles was Head of Global Equities at HSBC Global Asset Management and BNP Fortis Investments. He began his career at Schroders in 1990 and spent twelve years there, most latterly working with Nick Irish co-managing their integrated global equity products. This was the second time the pair worked together, the first being at HSBC.  Charles is a Regular Member of the CFA Society of the UK Years of investment industry experience: 23 Education: University of St Andrews (UK), MA Co-Head of Global Equity Portfolios Managing Director
  21. 21. 20 Konstantin Stoev, CFA  Konstantin Stoev is an equity analyst within the Global Equities team. He is responsible for industry and company research, qualitative assessment and quantitative financial modelling within the consumer sector.  His other responsibilities include industry research and financial market analysis.  Konstantin joined UBS Global Asset Management in March 2009. Prior to this he was an equity analyst at Swiss Re covering the consumer sectors for a multi-billion dollar absolute return equity portfolio. His previous roles include senior equity analyst at Crédit Agricole Cheuvreux in Switzerland and equity analyst at Putnam Investments in the USA. Global Sector Specialist Executive Director Years of investment industry experience: 12 Education: American University in Bulgaria (Bulgaria), BA; University of Chicago Booth School of Business (USA), MBA
  22. 22. 21 Key risks  The fund invests in equities which may be subject to high fluctuations in value.  The fund focuses intentionally on a rather concentrated portfolio (around 40 stocks), which may entail additional risks and volatility.  The fund provides more indirect exposure to emerging markets compared to other developed market funds. Emerging markets are at an early stage of development which can typically involve risks such as lower market transparency, regulatory hurdles, corporate governance and political and social changes. For these reasons, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. As these UBS funds pursue an active management style, each fund's performance can deviate from that of its reference index. All investments are subject to market fluctuations.  Every fund has specific risks, which can significantly increase under unusual market conditions.  The fund can use derivatives, which may result in additional risks (particularly counterparty risk). UBS Western Winners Equity Fund For explanations on financial wordings please refer to the glossary at www.ubs.com/glossary or contact for further information your UBS client advisor. For complete information about the Fund, including the risks of investing, applicable fees and other important information, prospective investors are advised to read the full prospectus.
  23. 23. Your Fondcenter Contacts UBS AG Global Asset Management Talacker 24 Postfach CH-8098 Zürich www.ubs.com Christophe Hefti Head Distribution Insurances & IFAs +41-44-234 93 79 christophe.hefti@ubs.com Timo H. Paul Head Distribution Banks +41-44-235 34 31 timo.paul@ubs.com Christine Aimone Distribution Banks +41-44-234 83 66 christine.aimone@ubs.com Robert Pavic Urbas Distribution Banks +41-44-236 72 42 robert.pavicurbas@ubs.com Jeremy Chapuis Distribution Banks +41-22-375 95 12 jeremy.chapuis@ubs.com Michael Winkler Head Distribution Management +41-44-234 53 48 michael-andre.winkler@ubs.com Doron Bollag Distribution Management +41-44-234 50 01 doron.bollag@ubs.com Diana Gut Distribution Management +41-44-234 51 74 diana.gut@ubs.com August Benz CEO Fondcenter +41-44-234 97 78 august.benz@ubs.com
  24. 24. 23 Disclaimer For marketing and information purposes by UBS. For professional investors only. This document has been issued by UBS AG, a company registered under the Laws of Switzerland. This document is for distribution only under such circumstances as may be permitted by applicable law. It was written without reference to any specific or future investment objective, financial or tax situation or requirement on the part of a particular individual or group. The document is for information purposes only and is not intended to be construed as a solicitation or an invitation to make an offer, to conclude a contract, or to buy or sell any securities or related financial instruments. The products or securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. The information and opinions contained in this document have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith, but is not guaranteed as being accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in the document. The details and opinions contained in this document are provided by UBS without any guarantee or warranty and are for the recipient's personal use and information purposes only. Past performance of investments (whether simulated or actual) is not necessarily an indicator of future results. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units. Commissions and costs have a negative impact on performance. Should the currency of a financial product or service not match your reference currency, performance may rise or fall due to currency fluctuations. All such information and opinions are subject to change without notice. UBS AG and / or other members of the UBS Group may have a position in and may make a purchase and / or sale of any of the securities or other financial instruments mentioned in this document. This document may not be reproduced, redistributed or republished for any purpose without the written permission of UBS AG. This document contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to our future business development. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. Source for all data and charts (if not indicated otherwise): UBS Global Asset Management. © UBS 2013. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved

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