Perpetual Limited · ASX:PPT
Perpetual — Investor Presentation (November 2009)
26 slides from Perpetual's investor presentation, Nov 25, 2009
Slide 1: Perpetual's diversified funds teleconference
Perpetual’s diversified funds teleconference Presented by Michael Blayney, Portfolio Manager Diversified Funds 25 November 2009
Slide 2: Agenda
Agenda Introduction Portfolio performance – quarterly asset class overview – quarterly overview on tactical asset allocation (TAA) positioning Current portfolio positioning Enhancements to strategic asset allocation and allowable ranges 1
Slide 3: Perpetual Balanced Growth Fund
Perpetual Balanced Growth Fund End Oct 2009 3 month 1 year 3 years 5 years 7 years 10 years pa pa pa pa Balanced Growth Fund 4.6% 4.3% -2.2% 4.8% 6.8% 5.9% Median 5.7% 9.2% -2.3% 4.7% 6.3% 5.3% Balanced Growth Comparison with the Mercer IDPS Multi-Sector Balanced Growth Universe Annualised Risk and
Slide 4: Perpetual Conservative Growth Fund
Perpetual Conservative Growth Fund End Oct 2009 3 mth 6 mth 1 year 3 years pa 5 years pa Conservative Growth Fund 3.2% 7.9% 7.8% 3.3% 6.0% Median 3.9% 8.3% 7.0% 1.7% 4.8% Conservative Growth Comparison with the Mercer IDPS Multi-Sector Conservative Universe Annualised Risk and Return for 6 years end
Slide 5: Active asset allocation
Active asset allocation Summary of positions financial year to date Month end Equity Bonds Value add July Overweight Underweight Outperform Aug Small overweight Underweight Outperform Sept Small overweight Neutral Outperform Oct Neutral Neutral Underperform Source: Perpetual As at 31/10/2009 Incepti
Slide 6: Tactical asset allocation: equity positions
Tactical asset allocation Equity positions calendar year to date ASX300 accumulation index and TAA equity model scores calendar year to date 100 36000 80 34000 ASX300 accumulation index 60 32000 40 TAA equity score 20 30000 0 28000 -20 26000 -40 24000 -60 -80 22000 -100 20000 Jan-09 Feb-09 Mar-09 Ma
Slide 7: Tactical asset allocation: bond positions
Tactical asset allocation Bond positions, calendar year to date Accumulation Bond index and TAA bond model scores calendar year to date 100 2,400 80 2,350 60 Accumulation Bond Index 2,300 TAA Bond score 40 20 2,250 0 2,200 -20 2,150 -40 2,100 -60 -80 2,050 -100 2,000 Jan-09 Feb-09 Mar-09 May-09 Jun-
Slide 8: Active asset allocation – current positioning
Active asset allocation – current positioning 7
Slide 9: Equity value: relative valuation
Equity value 14% 2000 Current Raw Score = -20 Equity market valuations are less attractive as the market has recovered and our theoretical valuation 1500 12% remain under pressure due to higher bond yields and low er earnings 1000 10% 500 Relative valuation 0 8% Yield -500 6% -1000 4% -1500 -2000 2%
Slide 10: Equity cycle: earnings revisions
Equity cycle 1.80 Earnings Revisions (LHS) 9 Short Term Interest Rates (RHS) 1.60 8 1.40 7 Earnings revisions 1.20 6 Interest rates 1.00 5 0.80 4 0.60 3 Current Current raw raw scorescore =0 =0 0.40 Earnings revisions = stabilised and beginning to creep upwards 2 Short revisions Earnings term intere
Slide 11: Bonds value: bond value indicator
Bonds value 5.0 4.0 More expensive 3.0 Bond value indicator 2.0 1.0 0.0 -1.0 -2.0 -3.0 Aust Real Yield Indicator US-Aust Real Spread Indicator Cheaper -4.0 Bond Value Indicator -5.0 May-03 Aug-03 Dec-03 Apr-04 Jul-04 Nov-04 Mar-05 Jun-05 Oct-05 Feb-06 May-06 Sep-06 Jan-07 Apr-07 Aug-07 Dec-07 Mar-08
Slide 12: Bonds cycle: domestic growth
Bonds cycle 9 1.50 8 1.00 7 Domestic growth 6 0.50 Interest rates 5 0.00 4 3 -0.50 Current raw score = - 20 Current raw score = - 20 2 Domestic rates = beginning to rise Domestic rates = beginning to rise Domestic Domestic growth grow th = beginning = beginning to stabilise to stabilise Aust Short T
Slide 13: Tactical asset allocation
Tactical asset allocation Current summary of positions (as at 24 November 2009) Current Equity Bonds Value -40 +20 Cycle Neutral (0) -40 Technical +20 +20 Total -20 0 Source: Perpetual 12
Slide 14: Enhancements to strategic asset allocation
Enhancements to strategic asset allocation 13
Slide 15: Enhancements to our diversified funds
Enhancements to our diversified funds Strategic asset allocation (SAA) means strategic, not static As such, both SAA and ranges under continual review and constant development Strict, disciplined process of assessment, evaluation, implementation and approval The changes made: – Increase in a
Slide 16: New asset allocation ranges summary
New asset allocation ranges summary BGF (%) BGF (%) BGF (%) CGF (%) CGF (%) CGF (%) Min SAA Max Min SAA Max Australian equities 10 30 50 0 12.5 25 International equities: 10 30 50 0 12.5 20 - Developed markets 26 11.0 - Emerging markets 4 1.5 Property 0 5 15 0 5 10 Fixed income 5 15 35 25 40 55 Othe
Slide 17: Current asset allocation summary
Current asset allocation summary End Oct 2009 BGF (%) BGF (%) CGF (%) CGF (%) Current Interim SAA Current Interim SAA Australian equities 29.0 33 14.4 17 International equities 26.7 27 8.1 8 Property 4.2 5 4.6 5 Infrastructure 5.4 5 - - Mezzanine mortgages 3.2 5 2.9 5 Fixed income 14.1 15 38.7 40 Ca
Slide 18: The emerging markets story
The emerging markets story Diversification and growth Value of $100 invested 31 Dec 1987 1800 Emerging market equities Developed market equities 1600 1400 1200 $ 1000 800 600 400 200 0 9 1 7 3 5 7 5 3 7 9 1 c9 c0 c9 c0 c9 c0 c0 c9 c8 c8 c9 De De De De De De De De De De De Source: Perpetual, Datastre
Slide 19: There is evidence of strong economic growth
There is evidence of strong economic growth GDP constant prices 12 Advanced economies Emerging and developing economies Developing Asia 10 Annual GDP growth rate (%pa) 8 6 4 2 0 81 83 84 86 88 89 93 94 96 97 98 99 01 02 04 06 07 80 82 85 90 92 95 03 05 91 87 00 19 19 19 19 19 19 19 19 19 19 19 19 20
Slide 20: But more importantly, translating into shareholder returns
But more importantly, translating into shareholder returns Return on equity over time 18 17 16 15 % 14 13 12 EM Asia EM (emerging markets) 11 World ex Australia 10 04 07 04 05 06 07 08 09 03 05 06 08 06 04 07 08 03 03 05 04 05 08 06 07 ec ar ec ec ec ar ar ar ec ec ar ar p p p p n p p n n n n n Se S
Slide 21: While Asia is important to EM, its not just about Asia
While Asia is important to EM, its not just about Asia Relative performance (rebased to 100) in USD (log scale) 2500 2000 Asia Value of $100 invested Broad EM universe 1500 1000 500 0 87 89 90 91 93 95 97 98 00 02 04 05 06 08 88 92 94 96 99 01 03 07 ec ec ec ec ec ec ec ec ec ec ec ec ec ec ec ec ec
Slide 22: Its more about beta than alpha
Its more about beta than alpha…….. Rolling 5 year alpha index (per annum) - pre fees 6% 5% 4% 3% 2% 1% 0% -1% Int'l equities Emerging Markets Aus equities -2% -3% 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 n -9 n -9 n -9 n -9 n -9 n -9 n -0 n -0 n -0 n -0 n -0 n -0 n -0 n -0 n -0 Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju Ju
Slide 23: The investment rationale
The investment rationale Emerging markets Emerging market equities present opportunities for long-run return enhancement and further diversification within equity markets However they are extremely volatile, and so allocations should be modest and suitable to the risk profile of the investor A
Slide 24: Summary
Summary Our portfolios have performed strongly during market recovery Funds have outperformed respective benchmarks with significant positive contribution from successful active asset allocation positioning Some peer funds have performed stronger in recent times, arguably benefiting from hedge
Slide 25: Questions?
Questions? 24
Slide 26: This presentation was prepared by Perpetual Investment Management Limited (PIML), ABN 18 000 866
This presentation was prepared by Perpetual Investment Management Limited (PIML), ABN 18 000 866 535, AFSL 234426. It is general information only and is not intended to provide advice to particular investors, or take into account an individual's investment objectives, circumstances or needs for inve