Platinum International Fund ETF Quoted Managed Hedge Fund · ASX:PIXX
Platinum International Fund ETF Quoted Managed Hedge Fund — Platinum Asset Management — H1 FY2024 Earnings Presentation
34 slides from Platinum International Fund ETF Quoted Managed Hedge Fund's earnings presentation, Feb 29, 2024
Slide 1: Analyst Briefing
Platinum Asset Management Limited Analyst Platinum AssetBriefing Management Limited Published 29 February 2024 for Briefing on 1 March 2024 24 FEBRUARY 2022 Platinum Platinum Asset Asset Management Management Limited Limited ABN 13 050 064 287 287
Slide 2: Analyst Briefing - Presented by
Analyst Briefing Presented by: Jeff Peters Andrew Stannard Andrew Clifford Liz Norman CEO Finance Director Co-CIO Investor Services and Communications Director 2
Slide 3: Key Highlights
Key Highlights Half-year ended 31 December 23 One of Australia’s most trusted international investment managers with A$15.4b >70% global long-short strategy Closing FUM1 FUM is Retail 6 month performance in flagship Platinum International Fund (PIF) and -4.9% -4.8% Underperformance Underperformance
Slide 4: Financial Highlights
Financial Highlights Half-Year ended 31 December 23 31 December 22 Var. % Average FuM (A$b) 16.2 17.8 (9.1)% Average Fee (bps) 114 112 1.8% Fee Revenue (A$m) 92.4 99.3 (6.9)% Expenses (A$m) 48.1 48.2 (0.2)% NPAT (A$m) 35.6 37.6 (5.3)% Underlying profit* (A$m) 37.3 39.8 (6.3)% Interim Dividend (cps)
Slide 5: Turnaround required – Reset (underway)
Turnaround required – Reset (underway) Key actions over the short term: next 1-4 months Align expense base to current revenue conditions – immediate priority is to reduce costs across the business Review existing product offerings and distribution channels – both onshore and offshore Renewed client
Slide 6: Turnaround required – Grow (medium to long term)
Turnaround required – Grow (medium to long term) Key actions over the medium-long term: 6+ months Act on recommendations - to further enhance the investment platform Build improved product and distribution capability through new channels - we will look at all possibilities Explore growth and diversi
Slide 7: Investment performance
Investment performance 7
Slide 8: Investment Performance to 31 December 2023
Investment Performance to 31 December 2023 Performance of Platinum Trust Funds A$ 1 Year p.a. 3 Year p.a. 5 Year p.a. 10 Year p.a. FUM (A$b) At 31 December 2023 International Fund - Absolute Return 4.2% 5.8% 7.3% 7.2% 6.3 (PMs: AC, CS, ND) - Relative Return - 17.2% - 4.4% - 5.1% - 3.7% Asia Fund - A
Slide 9: Equal weighted index – an alternate measure for stock picking
Equal weighted index – an alternate measure for stock picking Look at the difference: MSCI AC World Index vs the MSCI AC World ‘Equal Weighted’ Index* MSCI AC World Index MSCI AC World ‘Equal Weighted’ Index Platinum’s exposure is more aligned to the equal weighted index Source: MSCI AC World Index
Slide 10: Market conditions
Market conditions Global equity markets fall into three phases* (returns and upside/downside capture measured from 1999 to 2023) Fund Average: Fund Average: +3.0% per month +1.9% per month Relative Average: Relative Average: +0.7% per month -1.1% per month Market Market (led by US) (led by RoW) (25%
Slide 11: Recent history
Recent history Platinum’s outcomes have been consistent across market phases 2017 2018 - 2021 2022 2023 State of Market Market (RoW) Market (US) each Market Market (US) year Platinum +25% +5% pa +3% +4% International Fund Relative to +10% -9% pa +16% -17% MSCI ACWI (Net) Source: Platinum for fund re
Slide 12: We can demonstrate competitive stock picking skill
We can demonstrate competitive stock picking skill Five years to 31 December 2023 (extracted performance) High conviction 30 year US 22.3 27.8 124.7 MSCI US 109.0 15.7 and index agnostic track record Europe 17.6 8.7 49.4 MSCI AC Europe 55.2 -5.8 Japan 10.9 6.1 56.0 MSCI Japan 44.1 11.9 Independent t
Slide 13: We can demonstrate competitive stock picking skill
We can demonstrate competitive stock picking skill Outperformance over time comparing Platinum International Fund’s long book with the MSCI ACWI Equal Weighted Index % 20 15 High conviction 30 year and index agnostic track record 10 PIF: 3-4% average gross outperformance 5 Independent thinking Multi
Slide 14: Platinum can help you mitigate portfolio risk
Platinum can help you mitigate portfolio risk 1. Lower volatility than the MSCI AC World Volatility reduced via blending the Index. Platinum International Fund with 2. Low correlation with the MSCI AC World the MSCI AC World Index Index. 15% 3. Completely different portfolio to growth 14% managers a
Slide 15: Magnificent Seven stocks vs S&P493 vs MSCI AC ex US
Magnificent Seven stocks vs S&P493 vs MSCI AC ex US 400 Magnificent Seven stocks 350 300 250 200 S&P500 ex Mag 7 150 100 MSCI AC ex USA 50 2018 2019 2020 2021 2022 2023 2024 15 Source: Minack Advisors. 5 January 2018 is indexed to 100. Past performance is not a reliable indicator of future results.
Slide 16: Top 10 stocks as a % of S&P500 market cap
Top 10 stocks as a % of S&P500 market cap 35% 33% 31% 29% 27% 25% 23% 21% 19% 17% 15% 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 16 Source: Ned David Research Inc (NDR)
Slide 17: Allocating to US technology at this point is risky
Allocating to US technology at this point is risky Ratio of S&P500 IT sector vs S&P500 (monthly total return from 29 Sep 1989 to 26 Feb 2024) 400 New high 350 February 2020 300 250 200 150 100 50 1989 1993 1997 2001 2005 2009 2013 2017 2021 17 Source: Bloomberg, indexed to 100 from 29 September 1989
Slide 18: Chinese market appears historically undervalued
Chinese market appears historically undervalued X 70 60 50 40 30 China PE 20 10 0 1998 2002 2006 2010 2014 2018 2022 18 Source: FactSet Research Systems. PE refers to the price earnings ratio.
Slide 19: Financial performance
Financial performance 19
Slide 20: FUM, Fees and Underlying Profit
FUM, Fees and Underlying Profit Vs Prior Half Vs Corresponding Period 18.3 17.8 -12% -9% 16.2 16.2 Average FUM (A$b) Dec-23 Jun-23 Dec-23 Dec-22 92.4 103.4 -7% 99.3 -11% 92.4 Fee Revenue (A$m) Dec-23 Jun-23 Dec-23 Dec-22 40.6 39.8 37.3 -8% -6% 37.3 Underlying Profit After Tax* (A$m) Dec-23 Jun-23 De
Slide 21: Flows
Flows Annual Gross Inflows Semi-Annual Gross Inflows 238 Retail Funds Gross Inflows (A$m) Institutional Gross inflows for the 6 months to 31 December 2023 were $347m 144 46 185 Largest gross inflows in International and Asia funds 18 2,483 28 1,560 1,371 7 1,190 11 18 765 11 850 336 274 491 340 FY23
Slide 22: Revenue Analysis
Revenue Analysis Half year ended 31 December 2023 Dec-23 H Dec-22 H Var. Revenue largely reflects changes in FuM and FuM mix shifts, towards lower fee institutional mandates Average FuM (A$b)* 16.2 17.8 (1.6) Average Fee (bps)** Improved return on seed investment portfolio 114 112 2 Interest income
Slide 23: Expenses
Expenses Half year ended 31 December 2023 (A$m) Dec-23 H Dec-22 H Var. Staff costs 16.9 15.5 1.4 Expenses down despite inflationary pressures hitting salaries and other costs Variable remuneration, incl. share-based 10.1 14.0 (3.9) Variable compensation accrual lower than previous half-year, in line
Slide 24: Strong Balance Sheet and Seed Investment Portfolio
Strong Balance Sheet and Seed Investment Portfolio As at 31 December 2023 325 328 328 Interim Final Net Assets* Dividends 7 (A$m) (cps) 7 10 6 7 Dec-23 Jun-23 Dec-22 FY Jun-24 FY Jun-23 FY Jun-22 209 186 186 154 141 Cash & Term Seed 118 Deposits Investments** (A$m) (A$m) Dec-23 Jun-23 Dec-22 Dec-23
Slide 25: Questions
Questions 25
Slide 26: Appendix
—_—— Appendix
Slide 27: Appendix 1: Detailed operating results
Appendix 1: Detailed operating results (A$m) Dec-23 H Dec-22 H % Change Management fees 92.4 99.3 (6.9%) Performance fees 0.0 0.0 -% Interest income 4.2 1.7 Large Distributions & dividends 1.3 1.3 -% Underlying Revenue 97.9 102.3 (4.3%) Staff costs (excluding Platinum Partners’ LTIP) 27.0 29.5 (8.5%
Slide 28: Appendix 2: Performance fees
Appendix 2: Performance fees FUM $m Performance Participation Carry forward Performance Funds (Dec-23) fee period to Benchmark Rate % at Dec-23* fee last paid** Retail Platinum International Fund 27 30 Jun & 31 Dec MSCI AC World Net Index in A$ 15% -35.5% 31 Dec 17 Funds & LICs: Platinum Asia ex-Jap
Slide 29: Appendix 3: Underlying profit
Appendix 3: Underlying profit* Underlying profit after tax of $37.3m is similar to statutory profit after tax of $35.6m in the first half of FY24 Net gain/loss on seed investments relatively small at A$2m in 1H24 (1H23: A$0m) (A$m) 1H24 1H23 2H23 2H22 1H22 FY23 FY22 Underlying Profit After Tax 37.3
Slide 30: Appendix 4: Segment analysis
Appendix 4: Segment analysis Funds Management Investment and other (A$m) Dec-23 H Dec-22 H Var. % (A$m) Dec-23 H Dec-22 H Var. % Fee Revenue 92.4 99.3 (6.9%) Fee Revenue - - -- Other Revenue 1.6 0.9 Large Other Revenue 5.8 2.1 Large Total Revenue 94.0 100.2 (6.2%) Total Revenue 5.8 2.1 Large Expense
Slide 31: Appendix 5A: Funds under management by product
Appendix 5A: Funds under management by product (A$m) Opening Closing balance Investment Distributions balance Funds (1 Jul 2023) Net flows performance & Other3 (31 Dec 2023) % of Total Retail offerings Platinum Trust Funds and Platinum Global Fund (mFund)1 10,530 (761) (91) - 9,678 63% Quoted Manage
Slide 32: Appendix 5B: Funds under management by strategy
Appendix 5B: Funds under management by strategy (A$m) A broad array of global equity services Opening balance Investment Distributions Closing balance Investment strategy (1 Jul 2023) Net flows performance & Other* (31 Dec 2023) % of Total Global long short 11,848 (1,276) 19 (10) 10,581 69% Asia ex-
Slide 33: Appendix 6: Share-based payment expense
Appendix 6: Share-based payment expense Five year future estimated amortisation profile1 ($Am) HY 2024 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Deferred Remuneration Plan2 2020 annual grant 0.9 1.6 2021 annual grant 0.9 1.7 1.9 2022 annual grant 0.8 1.5 1.8 2.0 2023 annual grant 0.7 1.5 1.7 1.9 2.1 2
Slide 34: Disclaimer
Disclaimer This presentation has been prepared by Platinum Asset Management Limited ABN 13 050 064 287 (“PTM”). References in this presentation to “Platinum” are to Platinum Investment Management Limited ABN 25 063 565 006, AFSL 221935, unless otherwise expressly stated. While the information in thi
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