Ausbil Active Dividend Income Fund - Active ETF · ASX:DIVI
Ausbil Active Dividend Income Fund - Active ETF — Ausbil — Non-Deal Roadshow (September 2009)
60 slides from Ausbil Active Dividend Income Fund - Active ETF's roadshow presentation, September 2009
Slide 1: Australian Equity Market Outlook 2009/10
AUSTRALIAN EQUITY MARKET OUTLOOK 2009/10 Glass half full or half empty?
Slide 2: Ausbil Funds Under Management
m2 AUSBIL FUNDS UNDER MANAGEMENT $9.6 billion as at 31 July 2009 Diversified, $61.99 Global Equities, q , $250.60 Fixed Interest, $401.08 Emerging Leaders, $848.06 Australian Equity, $8,003.80 - -22- -
Slide 3: Slide 2 m2 Slide updated on 05.06.06
Slide 2 m2 Slide updated on 05.06.06 mdrankowska, 5/06/2006
Slide 4: Ausbil Active Equity Composite Performance
AUSBIL ACTIVE EQUITY COMPOSITE PERFORMANCE Performance history (pre fees) versus benchmark AUSBIL S&P/ASX30 PERFORMANCE VALUE TRACKIN INFORMATIO ACTIVE 0 ACCUM RANK** TO July 09 ADDED G ERROR N RATIO EQUITY INDEX 1 Year Y -5.1% 5 1% -10.3% 10 3% +5.2% 5 2% 36/97 4 3% 4.3% 12 1.2 3 Years* 1.7% -1.0%
Slide 5: Ausbil Emerging Leaders Performance
AUSBIL EMERGING LEADERS PERFORMANCE Performance history (pre fees) versus benchmark 70% MIDCAP PERFORMANCE TO EMERGING VALUE TRACKIN INFORMATIO 50 RANK** July 09 LEADERS ADDED G ERROR N RATIO 30% SML ORDS 1 Year -5.7% 5.7% -16.9% 16.9% +11.1% 23/46 7.5% 1.5 3 Years* 0.7% -3.8% +4.6% 23/36 7.1% 0.6 5
Slide 6: Australian Geared Equity Fund
AUSTRALIAN GEARED EQUITY FUND Performance history (net) versus benchmark S&P/ASX300 ACCUM PERFORMANCE TO July 09 GEARED FUND VALUE ADDED INDEX 1 months h 18 6% 18.6% 7 3% 7.3% 11 3% 11.3% 3 months 29.8% 13.2% 16.6% 6 months 47.8% 23.4% 24.4% 1 year -32.4% -10.3% -22.2% Inception (23rd May 2007) -31.
Slide 7: Research House Ratings
RESEARCH HOUSE RATINGS Further progress was made during the last year Ratings House AE Status EL Status GEF Status van Eyk A A - Lonsec Highly Recommended Highly Recommended Highly Recommended St d d & P Standard Poors ***** **** **** Zenith Highly Recommended Highly Recommended Highly Recommended M
Slide 8: Platform Listings
PLATFORM LISTINGS Broad shelf shelf-space space with ith the ind industry str leaders Distributor Active Equities Emerging Leaders Geared Equities Colonial First Choice and First Wrap X X First Wrap only BT Wrap X X X Macquarie i Wrap X X X Asgard (Westpac) X X X MLC Masterkey Custom X X - Aviva Nav
Slide 9: Positioning a Meaningful Brand in 2009
POSITIONING A MEANINGFUL BRAND IN 2009 Showing strength of conviction within a rigorous, rigorous disciplined business model -8-
Slide 10: Targetted Advertising via the Trade and Financial Press
TARGETTED ADVERTISING VIA THE TRADE AND FINANCIAL PRESS Committed to the retail space -9-
Slide 11: The Ausbil Times – Regular Electronic Communication
“THE AUSBIL TIMES” – REGULAR ELECTRONIC COMMUNICATION Providing direct access to critical information and Ausbil Ausbil’ss insights Note ‘The Economic Observer’! Please let us know if you think we can i improve this hi communication i i iin any way! - 10 -
Slide 12: The Ausbil Website – Client Support and Tools
THE AUSBIL WEBSITE – CLIENT SUPPORT AND TOOLS We’re We re committed to first first-class class delivery of our progress and thinking New media centre! Regular video recording! - 11 -
Slide 13: Ausbil Investor Online – The Next Step
AUSBIL INVESTOR ONLINE – THE NEXT STEP A contemporary service putting you in touch with your clients investments Wh nott register Why i t now ? - 12 -
Slide 14: Hedge Funds in 2009
Money does not perform. People do. Hedge Funds in 2009 Yves Teszner: Hedge Fund Analyst
Slide 15: HF performances through the crisis
HF performances through the crisis Over the recent period, HFs’ outperformance consistent Performance comparison 2006-2008 (source Bloomberg) 20% 10% 0% 2006 2007 2008 -10% return -20% HFRI Fund Weighted S&P500 MSCI World -30% -40% -50% 14
Slide 16: HF performances through the crisis
HF performances through the crisis Limited losses for alternative strategies up until Lehman collapse Sept 15 From Jan 1st to Lehman collapse MSCI down -20.5% MSCI HFRX From Jan 1st to Lehman collapse HFRX Global HF € down -6.65% HFRX -23.76% MSCI -42% Source: Bloomberg 15
Slide 17: What did the Lehman collapse change?
What did the Lehman collapse change? Post Lehman collapse landscape the collapse of Lehman Brothers caused… caused collaterals posted by HFs – including cash - getting trapped, thus forcing HFs to take heavy write downs a ban on naked shorts on financials Î forcing HFs to unwind short financials tra
Slide 18: What did the Lehman collapse change?
What did the Lehman collapse change? Post Lehman collapse landscape I abnormal In b l market k t conditions, diti problems bl can arise… i In September and October, due to massive deleveraging, HFs got left with their less liquid credit assets and small caps exposures Their terms could therefore not
Slide 19: Idiosyncratic pitfalls
Idiosyncratic pitfalls Fraud : Madoff caused very significant damage to a number of FoHFs. Avoiding such frauds is no science but can be addressed by » thorough due diligence » leverage l control t l » back-to-front audits » checks on third party providers Exogenous events (assets retained by prime
Slide 20: HF performances through the crisis
HF performances through the crisis In 2008, HFs managed to preserve capital somehow JPM Govt Bondss - US U Trade weighted $ Summary of market performance in 2008 (source Bloomberg) ndex US in Composite Indeex HFRI Fund Weig CS HY Indeex S&PP500 T Topix ghted FTSE Euro First 30 GSCI MSCI Asia ex=Japa
Slide 21: HF performances through the crisis
HF performances through the crisis Against all odds, some of the most secure vehicles crashed with the market in 2008 Example of a monetary fund -24% Source: Bloomberg 20
Slide 22: HF performances through the crisis
HF performances through the crisis What helped Hedge Funds over the crisis H d Funds Hedge F d are different diff tbbecause: they can buy and short securities: Opportunities to add value on the long and the short side No benchmark, they can elect to reduce exposures and cut risks rapidly Helps weath
Slide 23: Building performance
Building performance Money does not perform. People do.
Slide 24: At the FoHF level
At the FoHF level Drivers in FoHFs performance • Market cycles analysis Topp down • Macro outlook strategy allocation • Defining best strategies as a function of macro environment Continuous monitoring Independent team &d due dili diligence Risk Construction of • Style drifts management the portfoli
Slide 25: The importance of diversification
The importance of diversification Why is shifting of allocations key? Source: HFR 24
Slide 26: The importance of diversification
The importance of diversification All Hedge funds not born equal Source: CS Tremont 25
Slide 27: Opportunity set: large & exciting
Opportunity set: large & exciting Money does not perform. People do.
Slide 28: Opportunity set: large and exciting
Opportunity set: large and exciting HF performances never as compelling as after crisis f ll i major following j financial fi i l crisis, i i HF posted t d strong t returns t : Source: CS Tremont 27
Slide 29: Opportunity set: large and exciting
Opportunity set: large and exciting And on the long run, your best bet too HF historical HFs hi t i l returns t CS Tremont HF Index Source: CS Tremont 28
Slide 30: Opportunity set: large and exciting
Opportunity set: large and exciting Hammered valuations market k t di dislocation l ti h has lleft ft assets t priced i d ffor A Armageddon dd scenario…case i off hi high h yield i ld securities iti : 70 60 Euro HY CCC and lower 50 40 Euro HY B 30 Euro HY BB 20 10 Euro HY BBB 0 Source: Bloomberg te
Slide 31: Opportunity set: large and exciting
Opportunity set: large and exciting Less players Hedge funds Funds of HFs Source: HFR 30
Slide 32: Opportunity set: large and exciting
Opportunity set: large and exciting Less players Less new funds Less liquidations too Source: HFR 31
Slide 33: Opportunity set: large and exciting
Opportunity set: large and exciting More performance with less leverage H109 : g good p performances, low volatility Source: CS Tremont With lowest gross market exposure on record (gross market expo as a % of AUM) 32
Slide 34: Conclusion
Conclusion Dexia Alpha Dynamic Jan Sept Oct Nov 2008 H109 HFRX Global HF € -4.35% -7% -11% -2.70% -23.7% 5.47% Dexia Alpha Dynamic € I class -6.37% -4.15% -1.48% -16.3% 5.85%* -2.19% 2 19% *Estimated July perf as at Jul. 24 2009 33
Slide 35: Appendix
Appendix Money does not perform. People do.
Slide 36: HF performances through the crisis
HF performances through the crisis Vicious circle Banks’ balance sheet Banks need to Banks that rely Real estate prices start ABS valuations l ti get hurt h and d inter- i di dispose assets t to t heavily on short to cool down plummet banking liquidity comply with term financing becomes almost nil r
Slide 37: HF performances through the crisis
HF performances through the crisis 2008 in review “Black Monday” while US is closed markets crash Bernanke: Fannie Bans on short elsewhere. FOMC Mae & Freddie Mac selling globally cuts rate by 0.75% Bear Stearns bailed out “in no danger of by the FED and then failing” bought by JP Morgan Fannie Mae
Slide 38: HF performances through the crisis
HF performances through the crisis How about correlations? 24-months rolling correlations with MSCI World W ld From peak level in 08, correlations between Hedge Funds and Equities came down to lower levels from mid 08 to through 90% 12-months rolling correlations Sept 08/Sept 09 data window MSCI & H
Slide 39: Australian Equity Market Outlook 2009/10
AUSTRALIAN EQUITY MARKET OUTLOOK 2009/10 Glass half full or half empty? Presenter: John Grace, Deputy Head of Equities
Slide 40: Australian Equity Market Performance
AUSTRALIAN EQUITY MARKET PERFORMANCE Sell-off and subsequent rally in perspective Source: IRESS, ASX - 39 -
Slide 41: Australian Equity Market Performance
AUSTRALIAN EQUITY MARKET PERFORMANCE The current rally in perspective Source: IRESS, Wren Research, ASX, Deutsche Bank - 40 -
Slide 42: Australian GDP v S&P/ASX All Ords
AUSTRALIAN GDP v S&P/ASX ALL ORDS …market k thhad d been b discounting di ti a very poor GDP outcome t yoy% Australia GDP and All Ords yoy% 10 100 GDP (lhs) (lh ) All O Ords d ((rhs) h ) 8 80 6 60 4 40 2 20 0 0 -2 -20 -4 -40 Recessions shaded -6 -60 71 74 77 80 83 86 89 92 95 98 01 04 07 10 Source:
Slide 43: Global Leading Indicators
GLOBAL LEADING INDICATORS Significant i ifi rebound b d from f lows l – improving i i trend d Source: Datastream, UBS estimates - 42 -
Slide 44: Market Statistics
MARKET STATISTICS Consensus forecasts 31 AUGUST 2009 2009 2010 (E) 2011(E) EPS GROWTH -20.0% -1.3% 24.1% PE 13.9x 15.9x 12.8x Yield 4.7% 4.2% 4.8% Franking 77% 78% 80% Source: Ausbil calculation based on consensus broker earnings forecasts - 43 -
Slide 45: Market Statistics
MARKET STATISTICS Australian EPS history % Source: UBS - 44 -
Slide 46: Corporate Australia Re-capitalises
CORPORATE AUSTRALIA RE-CAPITALISES A$115 Billion since Jan 2008 A$b A$b Australian market 7.3% 80 Equity Supply vs. Equity Demand 80 4.7% Other Secondary Raising 70 70 Primary Raisings 5.2% Expected equity demand 09 4.7% 60 Equity market demand* 60 %: Total supply as a proportion of Mkt cap 50 50 4.
Slide 47: Earnings Yield Valuations
EARNINGS YIELD VALUATIONS Industrials earning yield better value than bond yield 1.6 EQUITIES RELATIVELY OVERVALUED 1.4 1.2 +1 Std Dev 1 Average 0.8 -1 Std Dev 0.6 EQUITIES RELATIVELY UNDERVALUED 0.4 Aug-90 Feb-91 Aug-91 Feb-92 Aug-92 Feb-93 Aug-93 Feb-94 Aug-94 Feb-95 Aug-95 Feb-96 Aug-96 Feb-97 Au
Slide 48: Price to Earnings Valuations
PE x 5 10 15 20 25 1989 1989 1990 1990 Source: IBESS, UBS 1991 1991 1992 1993 Recent changes in PE 1993 1994 1994 1995 1996 1996 1997 1-year forward P/E 1997 1998 PRICE TO EARNINGS VALUATIONS 1998 1999 2000 2000 2001 2001 2002 Long term P/E average 2003 2003 2004 2004 2005 2005 2006 2007 2007 2008 2
Slide 49: 2009 August Reporting Season
2009 AUGUST REPORTING SEASON Profit upgrades now exceed downgrades FY1 & FY2 Market FY1 & FY2 Market earnings earnings revisions ratio revisions ratio 2.2 2.2 FY1 FY2 Net upgrades 2.0 2.0 1.8 1.8 1.6 1.6 1.4 1.4 1.2 1.2 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.4 Net downgrades 0.2 0.2 0.0 0.0 Jan-98 Jan-99 Jan
Slide 50: Long Term Commodities Outlook
LONG TERM COMMODITIES OUTLOOK The industrialisation of China will continue 10000 The rise of 10000 China 87 OPEC 2 1000 OPEC 1 1000 Rebuilidng of Europe & Industrialisation 100 of Japan 100 10 10 1 1 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 00 04 08 Australian All Mining/All Resources Index E
Slide 51: Australian Bank BDD Charges
AUSTRALIAN BANK BDD CHARGES Bad d & Doubtful b f l Debt b estimates i still ill pushing hi higher hi h 300 22 263 250 20 18 200 179 16 144 150 bp 120 14 92 90 100 80 74 74 12 50 51 56 42 45 40 50 34 31 33 36 31 10 28 30 24 18 21 30 29 24 27 22 29 18 16 18 0 8 1980 1985 1990 1995 2000 2005 2010 Secto
Slide 52: A-REITs Now Trading at Discount to NTA
A-REITs NOW TRADING AT DISCOUNT TO NTA Interesting at face value, must consider debt levels and valuations Source: IBESS, UBS - 51 -
Slide 53: Unprecedented Infrastructure Spend
UNPRECEDENTED INFRASTRUCTURE SPEND Construction boom of $400bn to underwrite growth % GDP 12 11 10 9 8 7 6 5 4 3 1959 1966 1973 1980 1987 1994 2001 2008 Merrill Lynch, y August g 2009 - 52 -
Slide 54: Cash Holdings at Record Highs
CASH HOLDINGS AT RECORD HIGHS Recent moves suggest this cash is starting to be put to work Source: ABS - 53 -
Slide 55: Australian Equity Market – PE Dispersion
AUSTRALIAN EQUITY MARKET – PE DISPERSION Selective cyclical stocks remain attractive Industrials stocks PE ratios ( most recent reported (on d earnings) i ) 25 Defensives median Cyclicals median 20 15 X 10 5 0 0 Oct 05 Oct 06 Oct 07 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Feb 09 Apr 09 Jul 09 Source: Com
Slide 56: Active Sector Tilts – Australian Active Equity
ACTIVE SECTOR TILTS – AUSTRALIAN ACTIVE EQUITY Changes in Portfolio positioning 5 0% 5.0% 4.0% 4.0% 3.5% 3.1% 3.2% 3.0% 1.9% 2.0% 1.2% 1.0% 0.1% 0.0% -1.0% -2.0% -3.0% -2.6% Diversified Metals & Mining Retailing Banks Utilities Aug-08 Aug-09 - 55 -
Slide 57: Ausbil Australian Active Equity Portfolio
AUSBIL AUSTRALIAN ACTIVE EQUITY PORTFOLIO Largest 10 active holdings at 31 August 2009 Active Equities Ausbil Index Active Tilt NATIONAL AUSTRALIA BANK 9.3% 5.3% 4.1% ASCIANO 2 8% 2.8% 0 4% 0.4% 2 4% 2.4% WESFARMERS * 5.2% 2.9% 2.3% RIO TINTO 4.6% 2.4% 2.2% TOLL HOLDINGS 2 7% 2.7% 0 5% 0.5% 2 2% 2.2
Slide 58: Ausbil Emerging Leaders Portfolio
AUSBIL EMERGING LEADERS PORTFOLIO Largest 10 active holdings at 31 August 2009 Emerging Leaders Ausbil Index Active Tilt MIRABELA NICKEL 4.0% 0.3% 3.7% BANK OF QUEENSLAND 4 5% 4.5% 1 4% 1.4% 3 1% 3.1% UNITED GROUP 4.4% 1.4% 3.0% WOTIF.COM HOLDINGS 3.1% 0.2% 2.9% SEEK 3 3% 3.3% 0 5% 0.5% 2 8% 2.8% RE
Slide 59: Summary
SUMMARY Economic i fundamentals f d l to d dominate i • Equity market was oversold • Economic indicators improving - Boosted by policy response and infrastructure spend • Corporate earnings to improve in FY10 and FY11 - August reporting season reasonable v expectations • Corporate balance sheet stre
Slide 60: Disclaimer
DISCLAIMER Important information for presentation recipients The information contained in this presentation has been prepared for general use only and does not take into account your personal investment objectives, financial situation or particular needs. Before you make any decision about whether t