L1 Capital International Fund Units (Managed Fund) · ASX:L1IF
L1 Capital International Fund Units (Managed Fund) — L1 Capital International Fund — Investor Presentation (September 2024)
28 slides from L1 Capital International Fund Units (Managed Fund)'s investor presentation, September 2024
Slide 1: L1 Capital International Fund: Investment Environment and Portfolio Update
L1 Capital International Fund Investment Environment and Portfolio Update September 2024
Slide 2: Important information
Important information L1 Capital International Pty Limited Information contained in this publication Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the L1 Capital International Fund (Managed Fund) ARSN 631 094 141 (ASX:L1IF). Equity Trust
Slide 3: Agenda
Agenda 1 Macroeconomic investment environment 2 L1 Capital International Fund (Managed Fund) (ASX:L1IF) 3 Results season takeaways 4 Summary I Appendix – ETMF and Fund terms and contact details L1 Capital International 3
Slide 4: Macroeconomic investment environment
Macroeconomic investment 1 environment
Slide 5: Investment environment
Investment environment Inflation is under control and there are clear signs of an economic slowdown 1 Inflation in most developed countries has U.S. CPI components – total inflation c. 3% stabilised in the 2% to 3% range (Australia Shelter 5.1% 3.8%), still modestly Central Bank targets Services 4.6
Slide 6: Investment environment (cont.)
Investment environment (cont.) Economy still trending towards a ‘soft landing’ particularly the U.S., expect industry and business divergence 6 Clear signs of economic softening, risk to Federal Reserve Funds Rate and expectations the downside, particularly if Central Banks 6% are too reactionary 5%
Slide 7: L1 Capital International Fund (Managed Fund) (ASX:L1IF)
L1 Capital International Fund 2 (Managed Fund) (ASX:L1IF)
Slide 8: Objectives and performance track record
L1 Capital International Fund Objectives and performance track record L1 Capital International Fund performance objectives ▪ Deliver attractive risk-adjusted returns over a medium to long term investment horizon whilst lowering the risk of a permanent loss of capital ▪ To outperform the benchmark ov
Slide 9: Performance (net of all fees)
Performance (net of all fees) From inception on 1 March 2019 to 31 July 2024 Returns since inception (net) 110% 113.8% return net of fees, 80% versus the Benchmark 50% return of 102.2% 20% -10% L1 Capital International Fund MSCI World Net Total Return Index in AUD Note: Neither MSCI nor any other pa
Slide 10: Current portfolio positioning
Current portfolio positioning Diversified by industry, region and company size Portfolio focused on high quality companies in developed markets in a range of generally capital light, well structured and growing industries Sector exposure Revenues exposure by region1 Materials 15% Consumer Discretion
Slide 11: Portfolio valuation compared to 12 month trading range
Portfolio valuation compared to 12 month trading range Share price volatility creates opportunities ▪ Portfolio has traded on average over 20% from mid-point of 12 month trading range ▪ Portfolio currently trading on average in upper half of 12 month trading range, but wide-dispersion ▪ Starting to
Slide 12: Portfolio valuation compared to share price
Portfolio valuation compared to share price Attractive base case returns across the Portfolio ▪ High conviction in largest positions – top 10 over 60% of total portfolio ▪ Modest changes to Portfolio since last update – 1 new holding and modest position size changes ▪ Large cap tech more attractive
Slide 13: Results season takeaways
3 Results season takeaways
Slide 14: Top 10 holdings – Performance and outlook
Top 10 holdings – Performance and outlook Performance in line or ahead of our base case expectations Quarter results 2024 Outlook ✓ = AWS: ✓ AWS: ✓ eCommerce: = eCommerce: = ✓ Slight - ✓ ✓ = = ✓ ✓ = = = = = = = = L1 Capital International 14
Slide 15: Mastercard and Visa
Mastercard and Visa Total purchase volume growth remains solid, no material deterioration in aggregate in 2024 Overall consumer spending remains robust ▪ COVID materially disrupted consumer purchasing activity but has since normalised ▪ U.S. total purchase volume growth has stabilised at around 6% –
Slide 16: Amazon
Amazon Retail profitability is improving, obfuscated by investment in Project Kuiper (satellites) and other growth investments Amazon’s profitability has inflected ▪ Amazon’s retail (non-AWS) revenue increased c. $200bn to $430bn in the 3 years to 2022 but inefficiencies led to losses ▪ 2024 non-AWS
Slide 17: Intercontinental Exchange
Intercontinental Exchange Exceptionally well managed business, multiple growth drivers Step-change in growth of Energy derivatives, mortgage technology under-earning ▪ Intercontinental Exchange’s 2024 revenue split ̶ Exchanges (53%), Fixed Income and Data (25%), Mortgage Technology (22%) ▪ Energy de
Slide 18: HCA
HCA Well positioned in a macro-insensitive industry Consistent execution leading to strong share price performance ▪ Management continues to deliver strong operational performance ▪ Robust occupancy and well-managed expenses leading to sustainable margin improvement and attractive EPS growth ▪ Share
Slide 19: Summary
4 Summary
Slide 20: Summary
Summary Economic environment slowing but not crashing, rate reduction cycle has commenced 1 Inflation has stabilised around 2-3% in most developed countries, modestly above Central Banks’ 2% target. Areas of inflation are narrow 2 Cooling of employment markets, unemployment ticking up 3 Consumer inc
Slide 21: Summary (cont.)
Summary (cont.) Business selection critical. Diversified portfolio with a range of long-term drivers of business growth 6 Divergence in business performance, including within industries, expected to continue 7 AI and Nvidia have become the market’s latest TINA (there is no alternative) 8 Quality mat
Slide 22: Appendix: ETMF and Fund terms and contact details
Appendix I ETMF and Fund terms and contact details
Slide 23: L1 Capital International Fund (Managed Fund) (ASX:L1IF)
L1 Capital International Fund (Managed Fund) (ASX:L1IF) Increased investment flexibility In November 2023, the Fund became available as an Exchange Traded Managed Fund (ETMF) ▪ Investors can now buy and sell units on the ASX (L1IF) in addition to trading via the unit registry ▪ Manager pays the cost
Slide 24: L1 Capital International (Hedged) Active ETF (ASX:L1HI)
L1 Capital International (Hedged) Active ETF (ASX:L1HI) Same Portfolio, currency hedge overlay In July 2024, the Fund became available as an Exchange Traded Managed Fund (ETMF) - Hedged ▪ Same portfolio as L1 Capital International Fund but with a currency hedge overlay ▪ Investors can buy and sell u
Slide 25: Fund terms
L1 Capital International Fund (Managed Fund) Fund terms Fund terms Type of investments Listed securities Benchmark MSCI World Net Total Return Index in AUD Time horizon 5+ years ▪ To outperform the benchmark over rolling 5-year periods (net of all fees and expenses before tax) Investment objective ▪
Slide 26: Key parameters
L1 Capital International Fund (Managed Fund) Key parameters Guidelines Number of positions (typical) 20 to 40 positions Target investment universe (typical) High quality global listed equities (L1 Capital International rating 1, 2, or 3) Target geography (typical) Developed markets: North America, E
Slide 27: Contact Us
Contact Us Chris Aman Bryce Alejandro Clayton Kashyap Leyden Espina Head of Distribution Deputy Head of Distribution Investment Specialist Investment Specialist +61 (3) 9286 7021 +61 (0) 477 341 403 +61 (0) 407 876 532 +61 (0) 423 111 531 cclayton@L1.com.au akashyap@L1.com.au bleyden@L1.com.au aespi
Slide 28: L1 Capital address and contact details
ABN 21 125 378 145 | AFSL 314302 Level 32, 1 Farrer Place, Governor Phillip Tower Sydney NSW 2000 Phone +61 2 8067 7090 Web L1international.com
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