Australian Foundation Investment Co. Ltd. · ASX:AFI
Australian Foundation Investment — Investor Presentation (March 2022)
30 slides from Australian Foundation Investment's investor presentation, Mar 28, 2022
Slide 1: Shareholder Telephone / Webcast Presentation
28 March 2022 The Manager ASX Market Announcements For personal use only Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Australian Foundation Investment Company Limited Shareholder Telephone / Webcast Presentation Please find attached the
Slide 2: Shareholder Meeting
Shareholder Meeting 28 March 2022 For personal use only
Slide 3: Disclaimer
Disclaimer For personal use only Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their related entities and each of their respective directors, officers and agents (together the Disclosers) have prepared the information contained in these materials in good fai
Slide 4: Agenda
Agenda For personal use only (1) Introduction – Mark Freeman (2) Objectives and the investment process – Mark Freeman (3) Markets and the portfolio – David Grace (4) Portfolio Positioning – Nga Lucas (5) Closing Comments – David Grace 3 AFIC Shareholder Meeting 2022
Slide 5: Investment Team
Investment Team For personal use only David Grace Kieran Kennedy Brett McNeill Portfolio Manager Portfolio Manager Portfolio Manager Nga Lucas Rosie Malcolm Andrew Sutherland Investment Analyst Portfolio Manager Portfolio Manager Olga Kosciuczyk Stuart Low Jaye Guy Investment Analyst Investment Anal
Slide 6: Our Company
Our Company Invests in Australian and New Zealand companies – looking for quality for the long term. For personal use only Largest listed investment company on the ASX at $8.7bn at 28 February 2022 (also listed on NZX), over 160k shareholders, full transparency from being listed, independent Board o
Slide 7: AFIC's share price relative to the NTA - February 2022
AFIC’s share price relative to the NTA - 28 February 2022 For personal use only 6 AFIC Shareholder Meeting 2022
Slide 8: Objectives and the Investment Process
For personal use only Objectives and the Investment Process 7 AFIC Shareholder Meeting 2022
Slide 9: Objectives
Objectives For personal use only AFIC’s investment focus is on a diversified portfolio of Australian equities, seeking to provide attractive income and capital growth to shareholders over the medium to long term. This is achieved at a low cost, with lower volatility than the market, and with low por
Slide 10: Our investment process – focus on long term quality
Our investment process – focus on long term quality For personal use only Long term investor in companies, not traders of share prices Identify quality companies with sound growth prospects that we can buy at a reasonable price This supports our belief in the power of compounding returns from great
Slide 11: ESG is integrated into our investment framework
ESG is integrated into our investment framework Approach to Environmental, Social and Governance (ESG) factors For personal use only o Assessment of ESG risk factors is an important part of our investment process as the sustainability of a business is a key input in our assessment of a company. o As
Slide 12: Markets and The Portfolio
For personal use only Markets and The Portfolio 11 AFIC Shareholder Meeting 2022
Slide 13: Market conditions
Market conditions S&P/ASX 200 Index price performance chart S&P/ASX 200 Sector Performance Table For personal use only Jan 21 – Feb 22 CY21 CY22 YTD* 7,800 Energy 0.5% 17.1% 7,600 Utilities 9.8% 6.1% 7,400 Materials 13.9% 6.0% Financials 25.2% -3.7% 7,200 Consumer Staples 10.2% -4.6% 7,000 Industria
Slide 14: Long-term oil price
Long-term oil price For personal use only Brent oil versus 3Y moving average Source: DataStream, Citi Research 13 AFIC Shareholder Meeting 2022
Slide 15: Long-term share market performance
Long-term share market performance Markets perform over the long run despite short term Market valuation multiples now more in line with the long- For personal use only drawdowns. term average. ASX 200 forward PE over 25 years ASX200 Price Return over 25 years 8,000 7,000 6,000 5,000 4,000 3,000 2,0
Slide 16: Portfolio Performance per annum returns to February 2022
Portfolio Performance* per annum returns to 28 February 2022 For personal use only *assumes an investor can take full advantage of the franking credits Past performance is not indicative of future performance. 15 AFIC Shareholder Meeting 2022
Slide 17: Opportunities in volatile markets
Opportunities in volatile markets For personal use only Growth companies at reasonable valuations Sources of income with reasonable growth 16 AFIC Shareholder Meeting 2022
Slide 18: Portfolio positioning
For personal use only Portfolio positioning 17 AFIC Shareholder Meeting 2022
Slide 19: Portfolio Positioning
Portfolio Positioning Constructing a diversified portfolio with the appropriate balance of Income and Growth. For personal use only Companies with excellent long term growth prospects Companies with an above average dividend yield, with solid long term growth prospects Smaller companies that have th
Slide 20: REA Group – power of compounding long term returns
REA Group – power of compounding long term returns For personal use only REA Total Shareholder Return (%) First added to the portfolio: April 2016 400 350 Average cost $64.00 300 Holding period 5.5 years 250 Dividends Received $6.80 200 150 Annualised return 18.40% 100 ASX 200 annualised return 10.8
Slide 21: CSL – power of compounding long term returns
CSL – power of compounding long term returns For personal use only CSL Total Shareholder Return (%) First added to the portfolio: September 1999 8,000 Average cost $109.00 6,000 Holding period 23 years 4,000 Dividends Received $23.13 Annualised return 19.90% 2,000 ASX 200 annualised return 8.70% 0 2
Slide 22: Transurban – source of growing income
Transurban – source of growing income • A high-quality company that will benefit from economies reopening and traffic recovering For personal use only • Good income stock for the portfolio with dividends to continue to recover from FY22 low point • Potential upside from pipeline of development oppor
Slide 23: Top holdings – February 2022
Top 30 holdings – 28 February 2022 Total Portfolio 59 Holdings Rank Company % of Portfolio For personal use only 1 Commonwealth Bank of Australia 8.6% 2 BHP 7.5% 3 CSL 7.2% 4 Macquarie Group 4.6% 5 Transurban Group 4.2% 6 Wesfarmers 4.1% 7 Westpac Banking Corporation 4.1% 8 National Australia Bank 3
Slide 24: Top holdings – February 2022 continued
Top 30 holdings – 28 February 2022 continued Total Portfolio 59 Holdings Rank Company % of Portfolio For personal use only 11 Australia and New Zealand Banking Group 2.6% 12 Rio Tinto 2.6% 13 James Hardie Industries 2.5% 14 Telstra Corporation* 2.5% 15 Amcor 2.1% 16 Goodman Group 2.1% 17 Coles Group
Slide 25: Top holdings – February 2022 continued
Top 30 holdings – 28 February 2022 continued Total Portfolio 59 Holdings Rank Company % of Portfolio For personal use only 21 Carsales.com 1.5% 22 Sonic Healthcare 1.5% 23 Ramsay Health Care 1.4% 24 ASX 1.4% 25 Woodside Petroleum 1.2% 26 Fisher & Paykel Healthcare 1.2% 27 Brambles 1.1% 28 ALS 1.0% 2
Slide 26: Closing Comments
For personal use only Closing Comments AFIC Shareholder Meeting 2022
Slide 27: Outlook
Outlook Challenging operating environment to continue: For personal use only • Implications of war in Ukraine • Rising cost environment with likely further rate rises • Slowing growth in China Demand environment in many sectors of the economy remains healthy. Company dividends are forecast to contin
Slide 28: International Portfolio
International Portfolio For personal use only Performance so far has been encouraging and we are continuing to build a track record. Invested $85mm (1%) in a portfolio of international companies to date. Actively managed portfolio consistent with AFIC approach currently invested across 39 stocks. Fo
Slide 29: Questions
For personal use only Questions 28 AFIC Shareholder Meeting 2022
Slide 30: For personal use only
For personal use only
Australian Foundation Investment Company — Investor Presentation (March 2022) on 6ix