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Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
Ubs feb 2012   final
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Ubs feb 2012 final

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  • 1. Asset management For professional investors onlyCapturing opportunities in the land ofopportunity: investing in USA growthstocksGrant Bughman, Equity Strategist9 - 10 February 2012
  • 2. Growth InvestorsManages growth investments across full market spectrumGrowth Investors  US StrategiesTotal AUM $15.4 billion – US Large Cap – Growth US Small US Large Cap – Select Growth Cap Growth – Diversified Growth Growth Team – US Small Cap Growth Team $0.4 $10.1 Global (ex- US) Growth Team $4.9Growth Investors History US Small Cap US Large Cap Growth Growth Growth Investors join Development of US Large Cap Global (ex-US) Growth UBS growth screens Select Growth Team joins 1991 1992 1994 1995 1998 1999 2000 2004 2007 2010: ForwardData as of September 30, 2011Assets represented are totals for the UBS Global Asset Management division worldwide under management for Growth Equity strategies. Segmented strategy assets may not sum to total dueto rounding. Figures in billions (USD). 1
  • 3. Investment philosophyInvest in quality, growing companies where we believe the market priceunderestimates the magnitude and/or duration of future growthCore beliefs Fundamental research is the foundation of our investment discipline – Valuation-based upside / downside scenarios Diversified sources of growth – Classic growth companies – market fluctuations create opportunities to purchase great businesses at attractive prices – Elite growth companies – hyper growth phase can often be priced incorrectly by the market – Cyclical growth companies – pricing anomalies occur when expected value creation exceeds market prices Focus on Risk ManagementNote: US Large Cap Select Growth Equity / US Large Cap Growth Equity 2
  • 4. Intensive company researchDiscovers great organic growth storiesIs this a good executable growth business model? Is this a good market price? Evidence: pricing power, high and improving  Market expectations of magnitude and/or ROIC, market share growth duration of growth both for near-term and long- term Sustainability of model: barriers to entry, – Steady-state market size and company profitability changes in technology, secular shifts in the industry  Scenario based DCF analysis Management: appropriate financial incentives,  Industry relative valuation analysis consistency of message, capital allocation strategy  Free cash flow yieldNote: Process for US Large Cap Select Growth Equity / US Large Cap Growth Equity 3
  • 5. Putting it all together creates a diversified portfolioCapitalizes on market misinterpretations Sustainable Elite Google Apple Classic McDonald’s We will pay a premium for CVS Caremark companies with sustainable n Growth t io growth characteristics and a ua superior ROIC Cyclical V al Concho Resources Schlumberger Cyclical Low ROIC HighProcess for US Large Cap Select Growth Equity / US Large Cap Growth EquityInformation is supplemental to the US Large Cap Growth Composite and the US Large Cap Select Growth Composite.Note: The securities identified on this slide are current holdings as of the date of this presentation. This information should not be considered a recommendation to purchase or sell anyparticular security. Please see the additional disclosures at the end of this presentation for further information. 4
  • 6. Consistent excess returnsRolling three-year periods excess returnsAs of December 31, 2011 8% US Large Cap Select Growth Composite Supplemental – UBS AG Large Cap Select Growth 6% 4% 2% 0% Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12UBS Global AM US Large Capitalization Select Growth Composite inception date of October 31, 2004.UBS AG, New York Branch (“Advisor”) Large Cap Select Growth Equity Composite. UBS AG NY Branch data is supplemental to US Large Cap Select Growth Equity Composite data andrepresents the UBS Global Asset Management model managed in a substantially similar manner. Inception as of February 1, 2000.The returns shown above are based on currently available information and are subject to revision. Past performance is no guarantee of future results.Performance figures are gross of fees. Please see attached disclosure information.Excess returns calculated by subtracting benchmark returns from portfolio returns. Returns greater than one year annualized. Returns in USD. Benchmark used for excess return calculation isthe Russell 1000 Growth Index. 5
  • 7. Buy and sell disciplinesConsistent portfolio construction and management Buy/Hold/Add Sell/Trim/Review  Growth prospects not reflected in valuation  Growth prospects do not support valuation  Strong analyst thesis  Violation of analyst thesis  Fundamental confirmation of high and/or  Overriding sector concerns improving ROIC  Sustainable competitive advantageProcess for US Large Cap Select Growth Equity / US Large Cap Growth Equity 6
  • 8. Our process in action: Amazon.comDecember 31, 2009 – December 31, 2011 Trim Trim Add Trim Trim Trim Add Trim Trim Trim Add Add AddFor illustrative purposes only. 7
  • 9. Our Process in Action – Schlumberger (SLB)December 31, 2009 – December 31, 2011 Trim Trim Trim Trim Trim TrimTrim Trim Complete Sell Trim Complete Sell Complete Sell Trim Complete Sell Add New Buy New BuyComplete Sell Add Add Add Add New BuyComplete SellComplete Sell New Buy AddAdd Add Add Add Add New Buy New Buy New BuyFor illustrative purposes only. 8
  • 10. Focus on risk managementFoundation for consistent alpha generationType of risk Action planThesis construction risk • Diversification: 35-55 stocks, limits on individual stock position size• Price/unit assumptions too high • Bias towards quality businesses• Margins not sustainableMacroeconomic risks • Invest in 3 diverse sources of growth • Manage weights within distinct growth buckets• Business/monetary cycle risk • Focus on non-correlated risks• Widening of potential future outcomesValuation risks • Probability-weighted scenario analysis • Adherence to target prices • Buy/sell disciplineNote: US Large Cap Select Growth Equity 9
  • 11. Diversified sources of growthHistorical allocations as of December 31, 2011 Elite Classic Cyclical 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Sep-02 Aug-03 Jul-04 Jun-05 May-06 Apr-07 Mar-08 Feb-09 Jan-10 Dec-10 Nov-11Source: US Large Cap Select Growth portfolio.Information is supplemental to the US Large Cap Select Growth Composite.As of December 31, 2011 10
  • 12. US Large Cap Select Growth: PositioningVs. Russell 1000 Growth as of December 31, 2011Ten largest overweights Relative sector positions Active position Consumer Discretionary 7.10%Visa 3.86% Information Technology 4.52%CVS Caremark 3.25Estee Lauder 3.08 Telecommunication Services 1.32%Las Vegas Sands 2.87 Health Care 0.87%Express Scripts 2.81 Utilities -0.09%Amazon.com 2.79 Materials -0.21%Priceline.com 2.69Crown Castle 2.34 Energy -1.60%Allergan 2.28 Financials -1.77%Baidu 2.23 Consumer Staples -4.27% Industrials -5.88% -10% -5% 0% 5% 10%Source: Factset Percent (%)Supplemental information to the US Large Cap Select Growth Composite 11
  • 13. US Large Cap Select Growth Composite: PerformanceTotal returns for periods ending December 31, 2011 (in USD) Annualized Since Track. Info Quarter 1 year 3 years 5 years 10 years inception2 Risk5 error6 ratio7 US Large Cap Select Growth1 8.98% 1.90% 20.74% 5.29% – 7.74% 17.85% 4.55% 0.65 Russell 1000 Growth 10.61 2.64 18.02 2.50 – 4.77 16.84 Value added -1.63% -0.74% 2.72% 2.79% – 2.97% Supplemental performance information Annualized Since Track. Info Quarter 1 year 3 years 5 years 10 years inception4 Risk5 error6 ratio7 UBS AG, NY Branch US Large Cap Select Growth3 9.00% 1.88% 20.73% 5.23% 5.81% 2.04% 18.56% 5.32% 0.66 Russell 1000 Growth 10.61 2.64 18.02 2.50 2.60 -1.48 19.18 Value added -1.61% -0.76% 2.71% 2.73% 3.21% 3.52%The returns shown above are based on currently available information and are subject to revision. Past performance is no guarantee of future results.Performance figures are gross of fees. Please see attached disclosure information.1 UBS Global AM US Large Capitalization Select Growth Composite2 Inception date of October 31, 20043 UBS AG, New York Branch (“Advisor”) Large Cap Select Growth Equity Composite. UBS AG NY Branch data is supplemental to US Large Cap Select Growth Equity Composite data andrepresents the UBS Global Asset Management model managed in a substantially similar manner.4 Inception as of February 1, 20005 Since inception standard deviation based on monthly logarithmic returns6 Tracking error is defined as annualized standard deviation of the difference between the monthly logarithmic returns of the portfolio and its benchmark7 Information ratio is defined as the added value divided by the Tracking error 12
  • 14. US Large Cap Select Growth Composite: PerformanceCalendar year performance as of December 31, 2011 (in USD) Composite performance1,2 Russell 1000 Date Portfolio Growth Index Value added 2005 16.04% 5.27% 10.77% 2006 5.88 9.07 -3.19 2007 18.48 11.81 6.67 2008 -37.96 -38.44 0.48 2009 49.76 37.21 12.55 2010 15.34 16.71 -1.37 2011 1.90 2.64 -0.74 Supplemental performance3,4 Russell 1000 Date Portfolio Growth Index Value added 2001 -21.72% -20.42% -1.30% 2002 -26.25 -27.88 1.63 2003 32.52 29.75 2.77 2004 13.83 6.30 7.53 2005 15.90 5.27 10.63 2006 5.71 9.07 -3.36 2007 18.60 11.81 6.79 2008 -38.19 -38.44 0.25 2009 49.63 37.21 12.42 2010 15.44 16.71 -1.27 2011 1.88 2.64 -0.76The returns shown above are based on currently available information and are subject to revision. Past performance is no guarantee of future results.Performance figures are gross of fees. Please see attached disclosure information.1 UBS Global AM US Large Capitalization Select Growth Composite2 Inception date of October 31, 20043 UBS AG, New York Branch (“Advisor”) Large Cap Select Growth Equity Composite. UBS AG NY Branch data is supplemental to US Large Cap Select Growth Equity Composite data andrepresents the UBS Global Asset Management model managed in a substantially similar manner.4 Inception as of February 1, 2000 13
  • 15. US Large Cap Select GrowthA favourable valuations environment for a product with proven track-record UBS Large Cap Select Growth has strong relative performance over one, three and five years1 Remains top quartile against peers over the same periods2 Morningstar rating: Lux vehicle has been awarded five stars over a five year period and four stars over three years3 UK OEIC has been rated AA by Standard and Poor’s4 Lux Fund has recently been rated 1st place in Switzerland over 5 years5 by LipperUBS Global AM US Large Capitalization Select Growth Composite inception date of October 31, 2004.1 Source: UBS Global Asset Management, data as of 31 January 20122 Source: eVestment Alliance, data as of 31 January 20123 Source: Morningstar, as of 30 June 2011. Morningstar “Star” rating system ranks funds based on Morningstar’s calculation of risk-adjusted returns after all fees for up to three periods – the trailing three, five and ten years - depending on availability of data (where 3yrs data is available but not 5yrs, 100% 3yr data is used; where 5yrs but not 10yrs available, 60% 5yr and 40% 3yr is used, and where 10yrs is available, 50% 10yrs, 30% 5yrs and 20% 3yrs). 5 stars are awarded to the top 10% performing funds, 4 stars to the next 22.5%, 3 stars to the middle 35% of funds, 2 stars to the next 22.5% and 1 star to the bottom 10%.4 Source: Standard & Poor’s report dated December 2011, based on data to 30 November 2011. Refers to An S&P Fund Management Rating represents an opinion only and should not be relied on when making an investment decision. “S&P” and “Standard & Poor’s” are trademarks of The McGraw-Hill Companies, Inc. Copyright 2011 © Standard & Poor’s Financial Services LLC.5 Source: Lipper, February 2012 14
  • 16. US Large Cap Growth TeamLawrence Kemp, CFA – Managing Director Albert Tsuei – DirectorHead of US Large Cap Growth Equity Senior Investment AnalystPortfolio Manager Information Technology25 years of investment experience 19 years of investment experienceSam Console – Executive Director Brian Markovich, CFA – DirectorSenior Investment Analyst Senior Investment AnalystConsumer Discretionary, Consumer Staples Industrials, Materials, Energy15 years of investment experience 12 years of investment experiencePeter Bye – Executive Director Andrew Strommen, CFA - DirectorSenior Investment Analyst Investment AnalystHealth Care Financials, Materials, Telecom Services16 years of investment experience 10 years of investment experienceWendy Nickerson, CFA – Executive Director Joseph Wilson – DirectorSenior Investment Analyst Investment AnalystEnergy, Materials, Industrials Information Technology16 years of investment experience 7 years of investment experience Grant Bughman – Director Equity Strategist Client Service and Business Development 11 years of investment experienceNote: As of January 2012 15
  • 17. Grant M. BughmanEquity StrategistDirectorYears of investment industry experience: 11Education: James Madison University (US), BA Grant is a member of the Growth Investors team. He is responsible for communicating the process, outlook, and positioning of the firm’s growth equity capabilities to consultants, clients, and internal colleagues. Prior to his current role, Grant was an investment consultant, managing the northern pacific region for UBS Global Asset Management. Before joining the firm in 2005, Grant held roles focusing on distribution and marketing at SunAmerica Asset Management and as financial consultant with AXA. Grant is NASD Series 7 and 66 registered. 16
  • 18. Important information: UBS (Lux) Equity SICAV - USA Growth (USD) P-accFor marketing and information purposes by UBS. For professional investors only. UBS Institutional Funds under Luxembourg and Swiss law.Before investing in a product please read the latest prospectus carefully and thoroughly. This document is for distribution only under suchcircumstances as may be permitted by applicable law. It was written without reference to any specific or future investment objective, financial or taxsituation or requirement on the part of a particular individual or group. The document is for information purposes only and is not intended to beconstrued 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. Theproducts or securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. The information and opinionscontained 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 thedocument. The details and opinions contained in this document are provided by UBS without any guarantee or warranty and are for the recipientspersonal use and information purposes only. Past performance of investments (whether simulated or actual) is not necessarily an indicator of futureresults. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units. Commissionsand 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 / orother 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 instrumentsmentioned in this document. This document may not be reproduced, redistributed or republished for any purpose without the written permission ofUBS AG. This document contains statements that constitute "forward-looking statements", including, but not limited to, statements relating to ourfuture business development. While these forward-looking statements represent our judgments and future expectations concerning the developmentof our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from ourexpectations. Source for all data and charts (if not indicated otherwise): UBS Global Asset Management. © UBS 2011. The key symbol and UBS areamong the registered and unregistered trademarks of UBS. All rights reserved.France: Information document published by CCR Asset Management, approved by the AMF under number GP92016. In the event of a complaint,please contact your client advisor. This fund has received authorisation to be marketed in France. Representative in France for UBS funds under foreignlaw: BNP Paribas, 16 Bd des Italiens, 75009 Paris. Copies of the prospectus, simplified prospectus, articles of association, management regulations andthe annual and semi-annual reports of UBS funds are available free of charge from CCR Asset Managment, 44, rue Washington, 75008 Paris, phone +331 49 53 20 00, of which you find an internet presentation on www.ccr am.com. 17
  • 19. Additional information: UBS (Lux) Equity SICAV - USA Growth (USD) P-accFund-specific risks: UBS Growth Funds invest in equities and may therefore be subject to high fluctuations in value. For thisreason, an investment horizon of at least five years and corresponding risk tolerance and capacity are required. As these UBSfunds pursue an active management style, each funds performance can deviate substantially from that of its benchmark. Allinvestments are subject to market fluctuations. Every fund has specific risks, which can significantly increase under unusualmarket conditions. 18
  • 20. Additional disclosuresPast performance is no guarantee of future results. Potential for profit is accompanied by possibility of loss. Any statements made regarding investment performance objectives, riskand/or return targets shall not constitute a representation or warranty that such investment objectives or expectations will be achieved.No part of this presentation may be reproduced or redistributed in any form, or referred to in any publication, without express written permission of UBS Global Asset Management. Thismaterial supports the presentation(s) given on the specific date(s) noted. It is not intended to be read in isolation and may not provide a full explanation of all the topics that were presentedand discussed.The information and opinions contained in this document have been complied or arrived at based upon information obtained from sources believed to be reliable and in good faith. All suchinformation and opinions are subject to change without notice. A number of the comments in this document are based on current expectations and are considered “forward-lookingstatements.” Actual future results, however, may prove to be different from expectations. The opinions expressed are a reflection of UBS Global Asset Management’s best judgment at the timethis report is compiled, and any obligation to update or alter forward-looking statement as a result of new information, future events, or otherwise is disclaimed. UBS AG and/or its affiliatesmay 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.The information contained in this presentation should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed hereinwill remain in an account’s portfolio at the time you receive this information or that securities sold have not been repurchased. The securities discussed do not represent an account’s entireportfolio over the course of a full market cycle. It should not be assumed that any of the securities transactions or holdings referred to herein were or will prove to be profitable, or that theinvestment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities referred to in this presentation.A clients returns will be reduced by advisory fees and other expenses incurred by the client. Advisory fees are described in Part II of Form ADV for UBS Global Asset Management (Americas) Inc.This presentation does not constitute an offer to sell or a solicitation to offer to buy any securities and nothing in this presentation shall limit or restrict the particular terms of any specificoffering. Offers will be made only to qualified investors by means of a prospectus or confidential private placement memorandum providing information as to the specifics of the offering. Nooffer of any interest in any product will be made in any jurisdiction in which the offer, solicitation or sale is not permitted, or to any person to whom it is unlawful to make such offer,solicitation or sale.The achievement of a targeted ex-ante tracking error does not imply the achievement of an equal ex-post tracking error or actual specified return. According to independent studies, ex-antetracking error can underestimate realized risk (ex-post tracking error), particularly in times of above-average market volatility and increased momentum. Different models for the calculation ofex-ante tracking error may lead to different results. There is no guarantee that the models used provide the same results as other available models.Any taxation position described in this presentation is a general statement and should only be used as a guide. It does not constitute tax advice and is based on UBS Global Asset Management’sunderstanding of current tax laws and their interpretation. As individual situation may differ, clients should seek independent professional tax advice on any taxation matters.Strategies may include the use of derivatives. Derivatives involve risks which are different from the risks associated with investing directly in securities, including: the risk that changes in thevalue of a derivative may not correlate with the underlying asset, rate, index, or market, as well as liquidity risk, interest rate risk, counterparty risk and credit risk. While some derivativesstrategies can reduce the risk of loss, the use of derivatives can also reduce the opportunity for gain or result in losses by offsetting favorable price movements in other investments. Derivativesmay create leverage and pose the risk of losing more than the amount invested.Services to U.S. persons are provided by UBS Global Asset Management (Americas) Inc. ("Americas"). Americas is registered as an investment adviser with the US Securities and ExchangeCommission (“SEC”) under the Investment Advisers Act of 1940. From time to time, Americas’ non-US affiliates in the Asset Management Division who are not registered with the SEC("Participating Affiliates") provide investment advisory services to Americas U.S. clients. Americas has adopted procedures to ensure that its Participating Affiliates are in compliance with SECregistration rules. Copyright © 2011 UBS Global Asset Management (Americas) Inc. 19

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