Ninety One Plc · LSE:N91
Ninety One — Ninety One Diversified Income Fund webinar (May 2020)
16 slides from Ninety One's conference presentation, May 2020
Slide 1: Income: What can SA investors expect?
Income: What can SA investors expect? May 2020
Slide 2: Important information
Important information All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such i
Slide 3: Ninety One Diversified Income Fund
Ninety One Diversified Income Fund Annualised performance in ZAR as at 31 March 2020 10.0% 8.3% 8.1% 8.0% 8.0% 7.7% 7.8% 7.6% 7.2% 7.3% 7.3% 7.2% 7.2% 6.8% 6.5% 6.5% 6.1% 6.0% 5.7% 4.0% 1 year 3 years 5 years 10 years Diversified Income H Diversified Income A (ASISA) South African IB Money Market ST
Slide 4: What's behind Q1's performance?
Ninety One Diversified Income Fund What’s behind Q1’s performance? Income Capital Diversify 10.5 0.05 2017 & 2018 sources of return: 9.5 1.15 0.14 0.14 ZAR rallied 2.5%: Offshore low and changing USD mix to protect 8.5 0.11 0.56 duration position % 7.5 Bonds unchanged: Building the SA “disinflation”
Slide 5: Macro view: Local factors
Local factors Macro view
Slide 6: SARB can now come to the party…
SARB can now come to the party… Inflation is subdued under most scenarios, allowing for further cuts 2020 inflation scenarios 15% 12% 11% 10% 12% 9% 8% 9% 7% 6% 6% 5% 4% 2021 inflation scenarios 3% 3% 2% 0% 1% 2010 2011 2012 2018 2001 2003 2013 2014 2019 2002 2004 2005 2006 2007 2008 2009 2015 2016
Slide 7: Growth remains our biggest challenge
Growth remains our biggest challenge … we’re in for a shocking few quarters Quarterly GDP changes Budget deficit 8% 0% 6% -2% 4% Available funding (Rbn): 2% -4% Cash 100 Bills 50 0% Offshore 30 -6% Switch 20 -2% -6.8% 200 mining -0.7% -4% agriculture -8% manufacturing Fiscal -2.0% -6% package constr
Slide 8: What is behind the fiscal package?
What is behind the fiscal package? Spending of up to 10% of GDP, but fiscal burden considerably less Expenses Funding Health Individual Corporates Agencies* Existing UIF* Banks+ Health 20 20 Municipalities 20 20 Grants 50 30 20 Wage support 40 40 Tax relief 26 26 Tax delay 44 44 Job support 100 100
Slide 9: Macro view: Global factors
Global factors Macro view
Slide 10: The outlook for the rand
The outlook for the rand It’s a battle between current and capital accounts Current account will be improving… … foreign flows won’t 20 70 40,000 30,000 18 65 20,000 10,000 16 60 0 R’000 14 -10,000 55 -20,000 12 -30,000 -40,000 50 10 -50,000 Foreign ownership is now only 39.8% -60,000 8 45 Mar-11 Ma
Slide 11: Moody's downgrade has come and gone
Moody’s downgrade has come and gone We now trade at a significant discount to EM peers SA 9 year bond yield vs EM spread Nenegate Cabinet ANC Eskom COVID-19 reshuffle Elective Bailout scares Moody's Conference market downgrade 6.17 6.0 5.31 5.0 4.0 3.50 3.0 3.14 2.76 2.0 1.0 0.0 Mar-17 Jan-20 Mar-13
Slide 12: Global markets have stabilised…
Global markets have stabilised… …on the back of an unprecedented monetary and fiscal response Total central bank purchases US equity market performance versus data It would be naïve to think the story is over Source: National Central banks, Citi Research, Projections based on CB announcements Source
Slide 13: Portfolio positioning
Portfolio positioning
Slide 14: Ninety One Diversified Income Fund
Ninety One Diversified Income Fund Positioning as at 30 April 2020: Still defensive, measured duration and property increases 100% ‒ No growth, no inflation: SARB will do what is Overweight Underweight Current necessary 75% ‒ Budget 2020 showed some resolve: priorities (and funding) have changed 50%
Slide 15: Thank you
Thank you www.ninetyone.com
Slide 16: Important information
Important information All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such i
Ninety One — Ninety One Diversified Income Fund webinar (May 2020) on 6ix