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Why UBS Tactical beta Funds?
- 1. Not for retail clients July 2014 Why UBS Tactical Beta Funds? Because the journey matters Global Asset Management NOT FOR PUBLIC USE. NOT TO BE MAILED, SHOWN OR QUOTED TO ANY THIRD PARTY. THIS PRESENTATION IS SUBJECT TO THE ENCLOSED DISCLAIMER.
- 2. 1 The way forward for clients portfolios A smooth journey Sleep at night Proven Performer Cost management β’ The journey matters as much as the destination β’ Clients care more about limiting losses and liquidity β’ Focus on risk management β’ Benchmarks is where the journey starts β’ Stability of returns β’ Active Asset Allocation to avoid the pot holes β’ Use experts to reduce stress and help make decisions β’ Look for demonstrated track record β’ Global Strength to reduce cost and best capture opportunities β’ Reduce cost through passive building blocks β’ Combining components into solutions with single manager β’ Passive alone may not give investors outcomes they desire
- 3. 2 US real GDP growth and volatility Data as of 31 December 2011 Source: UBS Global Asset management, US Department of Commerce: Bureau of Economic Analysis Great Moderation High Volatility = Tactical AA Low Volatility = Strategic AA The return to volatility, requires active asset allocation The end of the 'Great Moderation' has seen the rise of volatility in markets β¦β¦active asset allocation to smooth the ride
- 4. 3 Note: UBS Global Asset Management GIS professionals contributing to multi-asset portfolios as of July 31, 2013 Tom Rivers Portfolio Manager London Keiko Kondo Head of Multi-Asset Asia-Pacific Stefan Lecher Strategist Hong Kong Tracey McNaughton Head of Investment Strategy Sydney Curt Custard Head of GIS Chicago Why UBS? We don't rest, so you can sleep at night Large team: Harnessing global strength for local investors β¦. a proven track record 100 Investment Professionals 8 time zones 30 years of AA
- 5. 4 Directional vs relative Time horizon Economic scenarios Asset class Country Sector Region Theme Instrument Managing the journey is as important as the destination β¦ so our investors can sleep at night Actively manage risk to avoid the pot holes Smooth returns through diversification
- 6. 5 Tactical Beta Funds: Passive foundation, active overlay ο· Benchmark: Start with either a conservative, balanced or growth portfolio of passive pooled funds and ETFs to match your time horizon and risk tolerance ο· Asset allocation: Determine where we are in the cycle and where we are heading ο· Tactical asset allocation: Allocate to the appropriate mix of assets that will provide superior risk-adjusted returns Equities 50% Fixed income 45% Commodities 5% Recovery Expansion Slowdown Recession Equities 50% Fixed income 45% Commodities 5% China Europe US Japan β¦. passive building blocks for low cost & stability of return
- 7. 6 UBS Tactical Beta Fund β Strategy Outline Asset Allocation - Balanced Asset Allocation Limits Strategic Weights Tactical Weights INCOME ASSETS Cash 0-30 4.0% 16.1% Australian Government Bonds 10-70 14.0% 14.0% International Government Bonds 18.0% -0.8% Investment Grade Credit 0-35 9.0% 4.9% High Yield Credit 0-10 3.0% 7.1% Emerging Market Debt 0-10 2.0% 5.0% TOTAL 25-75 50.0% 46.3% GROWTH ASSETS Property securities 0-13 4.0% 4.1% Australian Equities 8-45 23.0% 19.4% International Equities 8-60 23.0% 30.2% TOTAL 25-75 50.0% 53.7% Alternative Strategies 0-10 0.0% 0.0% Foreign Currency Exposure 0-25 0.0% 2.0% *May exceed upper limit of this range for extended periods due to market movements or significant cash flows. Source: UBS Global Asset Management. As at 30 June 2014 Strategy Outline: The objective is to provide a total return in excess of the benchmark over a full investment cycle -5% 0% 5% 10% 15% 20% 25% 30% 35% Cash Australian Government Bonds International Government Bonds Investment Grade Credit High Yield Credit Emerging Market Debt Property securities Australian Equities International Equities Foreign Currency Exposure Strategic Weights Tactical Weights Fund SAA Benchmark (Defensive % / Growth %) Long-term Characteristics %pa Investment Horizon MER Distributions Conservative 70% / 30% CPI plus 4.5 3-5 years 35 bps Qtr Balanced 50% / 50% CPI plus 5 3-5 years 35 bps Qtr Growth 30% / 70% CPI plus 6 3-5 years 35 bps Qtr Tactical Weights - Balanced β¦. benchmarks to suit the journey
- 8. 7 Tactical Beta Fund - Balanced Historical market exposure Source: UBS Global Asset Management Performance figures are net of ongoing fees and expenses. 0 10 20 30 40 50 60 70 80 90 100 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Growth Aus EQ Growth Int'l EQ Growth Prop Income Gov't Bond Income IG Income HY Income EMD Income Cash Growth Total Income Total Performance as at 31 July 2014 1 Mth % 3 Mth % 6 Mths % 1 Year % 2 Years % pa Since Inception* % pa Tactical Beta Fund - Balanced 1.12 3.20 6.97 11.59 - 12.89 Neutral** 1.16 3.12 7.30 11.90 - 12.10 Added Value (0.04) 0.08 (0.33) (0.31) - 0.79 Graph shows data since 31 December 2012 Inception of fund 12 October 2012 100 105 110 115 120 125 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Wealth Index A$ Tactical Beta Balanced Benchmark CPI + 5% Since Inception: Gross Returns 13.29% pa Benchmark 12.10% pa Actual Volatility 4.60% pa
- 9. 8 Tactical Beta Fund - Conservative Historical market exposure 0 10 20 30 40 50 60 70 80 90 100 May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Growth Aus EQ Growth Int'l EQ Growth Prop Income Gov't Bond Income IG Income HY Income EMD Income Cash Growth Total Income Total Performance as at 31 July 2014 1 Mth % 3 Mth % 6 Mths % 1 Year % 2 Years % pa Since Inception* % pa Tactical Beta Fund - Conservative 0.92 2.93 5.64 9.57 10.73 10.24 Neutral** 0.88 2.78 6.08 9.99 9.84 9.91 Added Value 0.04 0.15 (0.44) (0.42) 0.89 0.33 Graph shows data since 30 June 2012 Inception of fund 14 May 2012 Source: UBS Global Asset Management Performance figures are net of ongoing fees and expenses. 100 105 110 115 120 125 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Wealth Index A$ Tactical Beta Conservative Benchmark CPI + 4.5% Since Inception: Gross Returns 10.63% pa Benchmark 9.91% pa Actual Volatility 3.07% pa
- 10. 9 Tactical Beta Fund - Growth Historical market exposure 0 10 20 30 40 50 60 70 80 90 100 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Growth Aus EQ Growth Int'l EQ Growth Prop Income Gov't Bond Income IG Income HY Income EMD Income Cash Growth Total Income Total Performance as at 31 July 2014 1 Mth % 3 Mth % 6 Mths % 1 Year % 2 Years % pa Since Inception* % pa Tactical Beta Fund - Growth 1.24 3.55 8.36 13.41 16.10 15.33 Neutral** 1.36 3.47 8.59 14.00 15.98 15.41 Added Value (0.12) 0.08 (0.23) (0.59) 0.12 (0.08) Graph shows data since 30 June 2012 Inception of fund 14 May 2012 Source: UBS Global Asset Management Performance figures are net of ongoing fees and expenses. 100 105 110 115 120 125 130 135 140 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Wealth Index A$ Tactical Beta Growth Benchmark CPI + 6% Since Inception: Gross Returns 15.73% pa Benchmark 15.41% pa Actual Volatility 5.09% pa
- 11. 10 Scalable Advice Models β Core & Satellite Fund Low Balance Medium Balance High Balance Core UBS Tactical Beta UBS Tactical Beta UBS Tactical Beta Satellite None Active Managers Direct Solution Single Fund Core plus Multi Manager Fund or Active Funds Core plus bespoke Direct Options .β¦ TAA through a passive, low cost & nimble core Core β AA Tactical Tactical Tactical Satellite - AA None Strategic Tactical Core β UBS TBF Satellite β Managed Fund Satellite β Direct Shares Property Bonds/ Deposits Satellite β None Core - Beta Core - Beta
- 12. 11 Disclaimer This presentation and accompanying documents is intended to provide general information only and has been prepared by UBS Global Asset Management (Australia) Ltd (ABN 31 003 146 290) (AFS Licence No. 222605) without taking into account any particular personβs objectives, financial situation or needs. Investors should before acting on the information provided in this presentation, consider the appropriateness of the information having regard to their personal objectives, financial situation or needs. Any opinions expressed in this material are those of UBS Global Asset Management (Australia) Ltd, a member of the Global Asset Management division of UBS AG, and are subject to change without notice. Although all information in this presentation and documents is obtained in good faith from sources believed to be reliable no representation of warranty, express or implied is made as to its accuracy or completeness. Neither UBS AG nor any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this material. The information provided during this presentation must not be relied on to make an investment decision. It is not an offer or recommendation to acquire an interest in the UBS Managed Investment Funds (UBS Funds) or recommendation to purchase or sell any particular security. Offers of interests in the UBS Funds are contained in the relevant current Product Disclosure Statement (PDS). An investment in any of the UBS Funds does not represent deposits or other liabilities of UBS AG or any other member company of the UBS Group. Your investment is subject to investment risk, including possible delays in repayment and loss of income and capital invested. The repayment of capital or income is not guaranteed by any company in the UBS Group. Performance can be volatile and future returns can vary from past returns. Up-to-date performance information can be obtained by contacting UBS Global Asset Management (Australia) Ltd. A copy of the PDS is available from UBS Global Asset Management (Australia) Ltd, the issuer of the UBS Funds, on (02) 9324 3222 or freecall on 1800 023 043. You should consider that PDS and obtain professional advice before making any decision about whether to acquire or continue to hold an investment in the Fund(s). This document may not be reproduced or copies circulated without prior authority from UBS Global Asset Management (Australia) Ltd. Β© UBS 2014. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.