Investment Seminars - Where next for Credit Union Investments? April/May 2014

  • 191 views
Uploaded on

Investment Seminars - Where next for Credit Union Investments? April/May 2014 …

Investment Seminars - Where next for Credit Union Investments? April/May 2014

Nationwide seminars with speakers Adrian Missen, BCP Asset Management and John McCormack, Head of Investments at le chéile Group.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
191
On Slideshare
0
From Embeds
0
Number of Embeds
3

Actions

Shares
Downloads
5
Comments
0
Likes
1

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Where next for Credit Union Investments?
  • 2. BCP Asset Management Credit Union Presentation Adrian Missen – Senior Investment Specialist May 2014 2
  • 3. • Established in 1969 • One of Ireland’s largest Independently owned Product Producers − Over €1.5bn in assets under management − €780m raised since start 2012 − Over 120 Credit Union Clients in last 3 years - €220m − Working alongside key CU advisors - Le Cheile • Key Investment Objectives: − Provide compelling range of investment, income & deposit solutions − Consistent focus on capital protection − Conservative investment bias − Diversified Portfolio approach Key Information on BCP 3
  • 4. Forging Key Partnerships Investment Advisors Research Tools Custodians Asset Managers 4
  • 5. 2014 Industry Awards for BCP 5
  • 6. General Market Update 6
  • 7. Ireland Inc. 7 • Irish unemployment now at its lowest since 2008 and below the average for Europe • Q1 tax-take up strongly on same period last year • Personal and government debt, reliance on exports, austerity…….
  • 8. Eurozone • Recovery has impressed but significant headwinds continue – Low inflation hurts growth and increases debt burden – Jobless rate still near its peak of 12% • Fall in Bond yields helps peripheral countries and their ability to borrow • Irish yields at their lowest since Euro started 15 years ago • Market does not fear a Euro break-up anymore but how will ECB react? 8
  • 9. Outlook for Interest Rates • Significant decrease in rates since 2008 to protect the global economy • Rate increases are dependent on solid economic growth outlook – Not evident anywhere yet • Banks are awash with cash and have no motivation to significantly increase deposit rates • Inflation continues to erode the real value of money on deposit • Lack of options available for traditional low risk investors • Short and medium term outlook is for continued low rate environment 9
  • 10. European 3yr & 5yr Interest Rates 10
  • 11. Trends in Credit Union Market • Capital security top priority • Fixed Income top priority • Low deposit rates encouraging greater product innovation • Move towards active investment solutions (funds/indices) • Customised Bonds – BCP can create tailored bonds at €2m+ 11
  • 12. BCP Q2 Product Range 12
  • 13. BCP Fixed Income Plan 6 13
  • 14. BCP Fixed Income Plan 6 • Joint Product between Investec Bank and BCP • Open to Credit Unions Only • Medium Term Note with 2 options: – 3yr Plan paying 2.2% pa gross AER – 5yr Plan paying 3.2% pa gross AER • Credit risk exposure to Investec Bank plc plus Royal Bank of Scotland • RBS is an ‘A’ rated bank that’s +80% owned by UK Government • Security of Plan ranks equally with deposits • Classified as Category 3 in CU Guidance Notes 14
  • 15. BCP Fixed Income Plan 6 15
  • 16. BCP Fixed Income Plan 6 Credit Exposure Royal Bank of Scotland Investec Bank plc Rank Senior Unsecured Debt Senior Unsecured Debt Market Cap £35.4bn £4.5bn Credit Rating A- BBB- Country UK UK 16 Term: 3 years 5 years Close Date: 13th June 2014 13th June 2014 Start Date: 20th June 2014 20th June 2014 End Date: 20th June 2017 20th June 2019 Yield (p.a.): 2.20% 3.20%
  • 17. Deposit Options • Investec Deposit – 5 Year Deposit – 1.75% AER Fixed • Bank of Ireland – 5 Year Deposit – 1.67% AER Fixed • Interest rates are indicative until traded 17
  • 18. Credit Union Split Deposit Absolute Return Bond 18
  • 19. Bond Summary • Bond tracks the performance of the Carmignac ‘Patrimoine’ Fund • Fund invests in Equities, Bonds and Currencies • Fund has €27bn in assets and a 24 year track record • Fund has returned over 636% (CAR 8.7%) since its launch in 1989 • Capital Security provided by Investec Bank plc (Irish Branch) • Classified as Category 2 in CU Guidance Notes Key Features: – 20% invested in a 3yr high yield deposit account paying 3.75% AER – 80% invested in a 5 year 9 month Absolute Return Bond – 80% participation in the fund performance – 100% Capital Security from Investec 19
  • 20. Past Performance since 1989 20 WARNING: Past performance is not a reliable guide to future performance
  • 21. BCP Absolute Return Equity Bond 21
  • 22. Bond Summary • A capital secure Bond that aims to provide absolute equity returns with low volatility • 3 year 6 month term • 100% Capital Security • Underling Fund managed by specialist manager Marshall Wace • Capital security provided by Bank of Ireland • No maximum limit to returns earned 22
  • 23. Performance vs MSCI World 23 Source: Bloomberg. Performance is shown from November 23rd 2007 to March 28th 2014. Warning: Past performance is not a reliable guide to future performance.
  • 24. Credit Union Matrix Fixed Income Plan 6 Credit Union Absolute Return Bond Absolute Return Equity Bond Investec Deposit Plan Bank of Ireland Deposit Plan Capital Security Income N/A Compliance Analysis Meets CU Guidelines 24
  • 25. Compliance Disclosure 25 Please refer to the Brochure and Key Features for full details. With regard to the BCP Capital Secure Bonds investors may not encash prior to the maturity dates. AER is Annual Equivalent Rate, CAR is Compound Annual Return. Capital Security is provided by the relevant Bank. In the event of that Bank failing to meet its obligations you could lose some or all of your money. BCP SPLIT DEPOSIT ABSOLUTE RETURN BOND 9; WARNING: If you invest in this product you will not have any access to 20% of your money for 3 years and 80% of your money for 5 years 9 months. BCP ABSOLUTE RETURN EQUITY BOND; WARNING: If you invest in this product you will not have any access to your money for 3 years 6 months. WARNING: The value of your investment may go down as well as up. BCP FIXED INCOME PLAN 6; WARNING: If you invest in this product you will not have any access to your money for 3 or 5 years. WARNING: Past performance is not a reliable guide to future performance.
  • 26. Compliance Disclosure 26 Please refer to the Brochure and Key Features for full details. With regard to the BCP Capital Secure Bonds investors may not encash prior to the maturity dates. AER is Annual Equivalent Rate, CAR is Compound Annual Return. Capital Security is provided by the relevant Bank. In the event of that Bank failing to meet its obligations you could lose some or all of your money. BCP SPLIT DEPOSIT ABSOLUTE RETURN BOND 9; WARNING: If you invest in this product you will not have any access to 20% of your money for 3 years and 80% of your money for 5 years 9 months. BCP ABSOLUTE RETURN EQUITY BOND; WARNING: If you invest in this product you will not have any access to your money for 3 years 6 months. WARNING: The value of your investment may go down as well as up. BCP FIXED INCOME PLAN 6; WARNING: If you invest in this product you will not have any access to your money for 3 or 5 years. WARNING: Past performance is not a reliable guide to future performance. John McCormack Head of Investments
  • 27. Capital Protection with high quality, investment grade institutions Diversification across different institutions, maturities & investment asset classes Allowing credit unions to build portfolios & manage risk appropriately Offer the potential for better returns than short term cash deposits Completion of fact-find, statement of suitability, full transparency of fees le chéile Investment Philosophy
  • 28. Broad Selection of Counterparties
  • 29. IIii Previous Product Examples High Yield Credit Linked Note  5% coupon p.a.  Linked to iTraxx cross over index Credit Union Income Plans  3 year - 2.5% p.a.  5 year - 3.5% p.a. Irish Govt. Bond Linked Note  3 year – 4% p.a.  5 year – 6% p.a. Eurozone Inflation linked Bond  1.5% coupon p.a.  Participate in annual inflation figure
  • 30. Current Deposit Based Options • RaboDirect On-demand Deposit Account  Instant access, paying 1% p.a.; Max €5m • RaboDirect 30 day notice account  Interest rate 1.10% p.a.; Max €1m • RaboDirect 90 day notice account  Interest rate 1.25% p.a.; Max €1m • Bank of Ireland 5 Year Fixed Term Deposit  Interest rate 1.67% p.a. • Investec Bank plc 5 Year Fixed Term Deposit  Interest rate 1.75% p.a.
  • 31. Current Structured Product Options Societe Generale Fixed Return note  4% coupon p.a.  Linked to iTraxx main index BBVA EuroStocks Bonus Note  4 yr 11 mth term  8% min return  16% max return Merrill Lynch Multi Asset Strategy Fund Investec Income Plan VI  3 Year - 2.2% p.a.  5 Year - 3.2% p.a.
  • 32. Disclaimers & Important Information This presentation is intended for regulated credit unions only. All of the terms provided are indicative and subject to change. The full terms will be provided in brochures in due course. If you invest in these products, you may lose some or all of the money you invest. Past Performance is not a reliable guide to Future Performance. The value of your investment may go down as well as up. le chéile Financial Services Limited trading as le chéile Group is regulated by the Central Bank of Ireland. Registered in Dublin, Ireland under company no. 030391.
  • 33. Q&A Thank you