SENATE GROUPMike Soekoe & Heather McCulloch,15 March 2013
AGENDA   • Introduction   • Investment philosophy   • Performance   • Macro: Beyond the Fiscal CliffFOORD ASSET MANAGEMENT...
INVESTMENT PHILOSOPHY
INVESTMENT PHILOSOPHY• Take a long term view and be patient• Ignore the benchmark when building portfolios• Diversify and ...
PERFORMANCE
FOORD UNIT TRUSTS LIMITED Performances to 28 February 2013                                      1 year   2 years   3 years...
BEYOND THE FISCAL CLIFF
INTERNATIONAL OUTLOOK•   US recovery continues     –   Partial resolution of fiscal cliff     –   Supported by improvement...
GLOBAL GROWTH ON TRACKFOORD ASSET MANAGEMENT    9   MARCH 2013
USA GDP GROWTH13 Consecutive quarters of positive growthSource: I-NETFOORD ASSET MANAGEMENT                       10   MAR...
US HOUSING MARKET Pent up demand buildingFOORD ASSET MANAGEMENT     11   MARCH 2013
AFFORDABILITY OF HOMESUnderpins recoveryFOORD ASSET MANAGEMENT   12   MARCH 2013
US EMPLOYMENT CREATIONSensitive to housing market recoverySource: I-NETFOORD ASSET MANAGEMENT                 13   MARCH 2...
US EMPLOYMENT CREATION Don’t fight the FedFOORD ASSET MANAGEMENT    14   MARCH 2013
OUTLOOK FOR EUROPENo lasting improvement in sight shorter termSource: I-NETFOORD ASSET MANAGEMENT                         ...
EURO AREA Euro contagion risk has reduced substantiallyFOORD ASSET MANAGEMENT                           16   MARCH 2013
CHINESE ECONOMIC GROWTHRebalancing from investment to consumptionSource: Macquarie ResearchFOORD ASSET MANAGEMENT         ...
CHINESE ECONOMIC GROWTHStill some way to go…FOORD ASSET MANAGEMENT    18   MARCH 2013
SOUTH AFRICAN OUTLOOK •    SA GDP growth remains pedestrian      – Led by private and government consumption, SOE investme...
CONSUMER FAVOURED OVER GDFIFOORD ASSET MANAGEMENT        20   MARCH 2013
GDFI GROWTHDriven by SOE’s and governmentSource: I-NETFOORD ASSET MANAGEMENT           21   MARCH 2013
CONSUMPTION GROWTHDriven by real wage increasesSource: RMB Global Markets ResearchFOORD ASSET MANAGEMENT                22...
DETERIORATING C/A DEFICITSource: I-NETFOORD ASSET MANAGEMENT      23   MARCH 2013
FURTHER RAND DEPRECIATION LIKELYwith sporadic rallies due to foreign asset inflowsSource: I-NETFOORD ASSET MANAGEMENT     ...
EQUITIES REMAIN THE ASSET CLASS OF CHOICE Especially over the Long termFOORD ASSET MANAGEMENT                25     MARCH ...
STRATEGY     • Equity markets remain attractively priced           – Short term risks           – Time is required to real...
QuestionsFoord Asset Management (Pty) Ltd and Foord Unit Trusts Ltd are authorisedFinancial Services Providers (FSP: 578 &...
INVESTMENT TEAM                   Main Responsibilities & Qualifications            Experience   At Foord                 ...
FOORD BALANCED FUNDCurrent Top 10 equity positions                               % of portfolio    BHP Billiton           ...
FOORD EQUITY FUND Top 10 equity positions                                  % of portfolio       BHP Billiton              ...
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“Beyond the fiscal cliff” – Foord asset management

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“Beyond the fiscal cliff” – Foord asset management

  1. 1. SENATE GROUPMike Soekoe & Heather McCulloch,15 March 2013
  2. 2. AGENDA • Introduction • Investment philosophy • Performance • Macro: Beyond the Fiscal CliffFOORD ASSET MANAGEMENT 2 MARCH 2013
  3. 3. INVESTMENT PHILOSOPHY
  4. 4. INVESTMENT PHILOSOPHY• Take a long term view and be patient• Ignore the benchmark when building portfolios• Diversify and manage risk• Provide clients with the highest return at the lowest risk• Top down macro economic analysis, and• Fundamental, bottom up research• Understanding drivers of company earnings – Balance sheet / income statement / cash flow analysis – Economic cycles and industry changes – Qualitative research• Concentrated portfolio of best ideas• Avoid the losers 4 MARCH 2013
  5. 5. PERFORMANCE
  6. 6. FOORD UNIT TRUSTS LIMITED Performances to 28 February 2013 1 year 2 years 3 years 5 years 7 years 10 years Foord Balanced Fund 19.6% 16.4% 16.1% 10.8% 12.7% 18.5% Average (Domestic AA Prudential 15.0% 11.9% 12.0% 8.0% 10.1% 16.0% Variable Equity) Rank 9/103 4/89 4/76 3/65 3/46 3/23 Foord Equity Fund 20.7% 20.3% 21.7% 13.3% 14.9% 22.0% Average 15.5% 13.1% 15.0% 8.3% 12.0% 19.9% Rank 19/110 6/98 1/92 4/80 7/62 6/45 Foord Flexible FoF 28.8% 23.2% 21.2% Average 21.5% 14.6% 12.7% Rank 3/21 1/19 1/18 Foord International FF 31.3% 18.6% 12.8% 6.3% Average 27.2% 15.9% 10.7% 3.5% Rank 1/18 3/17 5/17 3/17 Source: MorningstarFOORD ASSET MANAGEMENT 6 MARCH 2013
  7. 7. BEYOND THE FISCAL CLIFF
  8. 8. INTERNATIONAL OUTLOOK• US recovery continues – Partial resolution of fiscal cliff – Supported by improvements in housing market – Labour markets geared to residential market recovery• Chinese growth accelerates – Recovery in investment spend – Shift to consumption supported by wage growth• European decline stabilises – Public and private consumption not recovering fast• Commodity prices supported by China & US recovery• US dollar the preferred developed market currencyFOORD ASSET MANAGEMENT 8 MARCH 2013
  9. 9. GLOBAL GROWTH ON TRACKFOORD ASSET MANAGEMENT 9 MARCH 2013
  10. 10. USA GDP GROWTH13 Consecutive quarters of positive growthSource: I-NETFOORD ASSET MANAGEMENT 10 MARCH 2013
  11. 11. US HOUSING MARKET Pent up demand buildingFOORD ASSET MANAGEMENT 11 MARCH 2013
  12. 12. AFFORDABILITY OF HOMESUnderpins recoveryFOORD ASSET MANAGEMENT 12 MARCH 2013
  13. 13. US EMPLOYMENT CREATIONSensitive to housing market recoverySource: I-NETFOORD ASSET MANAGEMENT 13 MARCH 2013
  14. 14. US EMPLOYMENT CREATION Don’t fight the FedFOORD ASSET MANAGEMENT 14 MARCH 2013
  15. 15. OUTLOOK FOR EUROPENo lasting improvement in sight shorter termSource: I-NETFOORD ASSET MANAGEMENT 15 MARCH 2013
  16. 16. EURO AREA Euro contagion risk has reduced substantiallyFOORD ASSET MANAGEMENT 16 MARCH 2013
  17. 17. CHINESE ECONOMIC GROWTHRebalancing from investment to consumptionSource: Macquarie ResearchFOORD ASSET MANAGEMENT 17 MARCH 2013
  18. 18. CHINESE ECONOMIC GROWTHStill some way to go…FOORD ASSET MANAGEMENT 18 MARCH 2013
  19. 19. SOUTH AFRICAN OUTLOOK • SA GDP growth remains pedestrian – Led by private and government consumption, SOE investment – Consumption growth supported by real wage increases; grants • Terms of trade remains weak – Falling mining output – Fast growing imports at higher prices due to weaker currency • Current account deficit remains a threat to the rand – On-going foreign investment required to fund deficit • Higher bond yields likely – Ratings downgrades; higher bond yields globallyFOORD ASSET MANAGEMENT 19 MARCH 2013
  20. 20. CONSUMER FAVOURED OVER GDFIFOORD ASSET MANAGEMENT 20 MARCH 2013
  21. 21. GDFI GROWTHDriven by SOE’s and governmentSource: I-NETFOORD ASSET MANAGEMENT 21 MARCH 2013
  22. 22. CONSUMPTION GROWTHDriven by real wage increasesSource: RMB Global Markets ResearchFOORD ASSET MANAGEMENT 22 MARCH 2013
  23. 23. DETERIORATING C/A DEFICITSource: I-NETFOORD ASSET MANAGEMENT 23 MARCH 2013
  24. 24. FURTHER RAND DEPRECIATION LIKELYwith sporadic rallies due to foreign asset inflowsSource: I-NETFOORD ASSET MANAGEMENT 24 MARCH 2013
  25. 25. EQUITIES REMAIN THE ASSET CLASS OF CHOICE Especially over the Long termFOORD ASSET MANAGEMENT 25 MARCH 2013
  26. 26. STRATEGY • Equity markets remain attractively priced – Short term risks – Time is required to realise potential returns • Quality companies preferred – Strong balance sheets, management teams, dividends • Bond yields should rise significantly, but timing uncertain – Negative real returns the most likely outcomeFOORD ASSET MANAGEMENT 26 MARCH 2013
  27. 27. QuestionsFoord Asset Management (Pty) Ltd and Foord Unit Trusts Ltd are authorisedFinancial Services Providers (FSP: 578 & 21476)Past performance is not necessarily an indication of future performance
  28. 28. INVESTMENT TEAM Main Responsibilities & Qualifications Experience At Foord Responsibility CIO, Portfolio Manager Strategy, Balanced, Absolute return, Equity, Foreign, Dave Foord 35 31 B Com, CA(SA) Company Research Portfolio Manager, Analyst Brian Davey 21 17 Equity, Company research, Private clients B Com, CA(SA) Portfolio Manager, Equities Dane Schrauwen 20 4 Equity, Balanced, Company research, Private clients BA LLB Head: Company Research Mike Townshend 15 7 Company research, sector research B Sc (Hons), BA, MBA Portfolio Manager, Strategy William Fraser 13 7 Strategy, Balanced, Bonds, Property, Medical Aid B Com Actuarial, Cert (Financial Engineering) Head of Retail & Institutional Business Mike Soekoe 32 4 Private clients Member of SA Institute of Stockbrokers, CFP ® Portfolio Manager, Research Analyst Equity, Absolute return, Company research, Private Nicholas Balkin 10 7 B Com (Hons) Finance, CFA clients Portfolio Manager, Head: International Research Vincent Ee 16 - Company research (Foreign) B Sc (Hons) Acct & Finance, CFA Portfolio Manager, Research Analyst Carolyn Levin 7 5 Company research (SA and Foreign) B Bus Sc (Hons), CA(SA), CFA Equity Research Analyst Andrew Coultas 4 2 Company research (Foreign) B Com (Hons), M Com, CA(SA) Equity Research Analyst Guy Shirtliff 6 1 Company research (Foreign) B Bus Sc (Hons), Cert (Financial Mkts & Instr) Pravarshan Equity Research Analyst 2 1 Company research (SA) Murugasen CA(SA) Equity Research Analyst Daniel Gerdis 2 1 Company research (SA) CA(SA) Equity Research Analyst Wim Murray 1 - Company research (SA) BA LLBFOORD ASSET MANAGEMENT 28 MARCH 2013
  29. 29. FOORD BALANCED FUNDCurrent Top 10 equity positions % of portfolio BHP Billiton 4.9 SABMiller 3.3 Aspen 3.3 Sasol 3.1 British American Tobacco 2.9 Standard Bank 2.9 CF Richemont 2.8 Anglos 2.8 Bidvest 2.4 RMB Holdings 2.3 30.7 FOORD ASSET MANAGEMENT 29 MARCH 2013
  30. 30. FOORD EQUITY FUND Top 10 equity positions % of portfolio BHP Billiton 8.3 Sasol 6.0 SABMiller 5.9 Anglos 5.2 CF Richemont 5.1 Standard Bank 4.9 British American Tobacco 4.6 Bidvest 4.6 Aspen 4.4 Coronation 3.9 52.9FOORD ASSET MANAGEMENT 30 FEBRUARY 2013

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