Australian Foundation Investment Co. Ltd. · ASX:AFI
Australian Foundation Investment — Investor Presentation (December 2016)
34 slides from Australian Foundation Investment's investor presentation, Dec 2, 2016
Slide 1: NZ Information Meeting – Presentation
2 December 2016 For personal use only The Manager ASX Market Announcements Australian Securities Exchange Exchange Centre Level 4 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Australian Foundation Investment Company Limited NZ Information Meeting – Presentation Dear Sir / Madam Please find
Slide 2: NZ Shareholder Meeting Auckland
For personal use only NZ SHAREHOLDER MEETING AUCKLAND DECEMBER 2016
Slide 3: Disclaimer
DISCLAIMER Australian Foundation Investment Company Limited and its subsidiary AICS (AFSL 303209), their For personal use only 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: Introduction
For personal use only INTRODUCTION SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 5: How We Invest – What We Look For in Companies
HOW WE INVEST – WHAT WE LOOK FOR IN COMPANIES Quality First For personal use only Growth Value Portfolio that is actively managed for the long term SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 6: Investment Objectives
INVESTMENT OBJECTIVES For personal use only To grow dividends over the medium to long term. To give investors attractive total returns over the medium to long term. SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 7: Dividends (A$) – Compound Growth Per Annum
DIVIDENDS (A$) – COMPOUND GROWTH PER ANNUM For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 8: The Australian Dollar Has Fallen Against the NZ Dollar
THE AUSTRALIAN DOLLAR HAS FALLEN AGAINST THE NZ DOLLAR OVER RECENT YEARS For personal use only AUD vs NZD SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 9: Dividends (NZ$) – Compound Growth Per Annum
DIVIDENDS (NZ$) – COMPOUND GROWTH PER ANNUM For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 10: Results & Shareholder Returns
For personal use only RESULTS & SHAREHOLDER RETURNS SHAREHOLDER MEETINGS OCTOBER 2016
Slide 11: Full Year Financial Summary – June
For personal use only FULL YEAR FINANCIAL SUMMARY– 30 JUNE 2016 SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 12: Share Price Is at 5.1% Premium to Net Asset Backing
For personal use only SHARE PRICE IS AT 5.1% PREMIUM TO NET ASSET BACKING SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 13: Share Price Return in $NZ – Per Annum Return
SHARE PRICE RETURN IN $NZ –PER ANNUM RETURN TO 31 OCTOBER 2016 For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 14: The Market & The Portfolio
For personal use only THE MARKET & THE PORTFOLIO SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 15: Low Growth and Low Interest Rates Have Produced Unusual Market Conditions
LOW GROWTH AND LOW INTEREST RATES HAVE PRODUCED UNUSUAL MARKET CONDITIONS For personal use only Source: FactSet SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 16: Small and Mid Cap Companies Substantially Outperformed Larger Companies
SMALL AND MID CAP COMPANIES SUBSTANTIALLY OUTPERFORMED LARGER COMPANIES OVER THE YEAR For personal use only Source: FactSet SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 17: One Year Return of AFIC and Major Sectors of the Market
ONE YEAR RETURN OF AFIC AND MAJOR SECTORS OF THE MARKET ($A) – INCLUDES DIVIDENDS To 31 October 2016 For personal use only Source: FactSet The top 20 companies in the index are challenged for growth – we have been changing the profile of the portfolio to reflect this SHAREHOLDER MEETING NZ DECEMBER
Slide 18: Portfolio Performance in $A – Per Annum Return
PORTFOLIO PERFORMANCE IN $A – PER ANNUM RETURN TO 31 OCTOBER 2016 For personal use only AFIC is after tax and expenses. Ignores benefits of franking and LIC tax credits. SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 19: Portfolio Performance in $NZ – Per Annum Return
PORTFOLIO PERFORMANCE IN $NZ – PER ANNUM RETURN TO 31 OCTOBER 2016 For personal use only AFIC is after tax and expenses. Ignores benefits of franking and LIC tax credits. SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 20: AFIC Is Not a Significant Investor in Property Trusts, Gold and Gambling – 3 Years
AFIC IS NOT A SIGNIFICANT INVESTOR IN PROPERTY TRUSTS GOLD AND GAMBLING SECTORS – THIS CAN SOMETIMES AFFECT PERFORMANCE – 3 YEARS For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 21: AFIC Is Not a Significant Investor in Property Trusts, Gold and Gambling – 10 Years
AFIC IS NOT A SIGNIFICANT INVESTOR IN PROPERTY TRUSTS GOLD AND GAMBLING SECTORS – THIS CAN SOMETIMES AFFECT PERFORMANCE – 10 YEARS For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 22: What Have We Been Doing?
WHAT HAVE WE BEEN DOING? • Marginally reduced exposure to: For personal use only - banks; - energy; - supermarkets; and - selected interest rate sensitive holdings. • Further adding stocks with better growth outlook. • Used market volatility to generate income from buy and write portfolio. SHAREHOLD
Slide 23: Portfolio at October 2016 – Top Holdings
PORTFOLIO AT 31 OCTOBER 2016 – TOP 10 HOLDINGS REPRESENT 47.3% OF THE PORTFOLIO For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 24: Portfolio at October 2016 – Next Holdings
PORTFOLIO AT 31 OCTOBER 2016 – NEXT 10 REPRESENT 17.2% OF THE PORTFOLIO For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 25: AFIC's Portfolio vs the ASX Index – Major Variations
AFIC’S PORTFOLIO VS THE ASX 200 INDEX – MAJOR VARIATIONS For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 26: Major Additions to the Portfolio Over the Last Years
MAJOR ADDITIONS TO THE PORTFOLIO OVER THE LAST 3 YEARS For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 27: Major Additions to the Portfolio (continued)
MAJOR ADDITIONS TO THE PORTFOLIO OVER THE LAST 3 YEARS (continued) For personal use only The addition of these companies have further diversified the portfolio. Only A$170 million was invested in these companies 3 years ago – many are new to the portfolio. Currently represent over A$1bn in val
Slide 28: Small and Mid Cap Stocks Have Gone to 22% From 17%
SMALL AND MID CAP STOCKS HAVE GONE TO 22% FROM 17% LAST YEAR For personal use only 31 October 2016 SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 29: Comments on the Recent Reporting Season
COMMENTS ON THE RECENT REPORTING SEASON For personal use only • No more bad news than normal but few positive surprises. • Revenue growth remains subdued. • Large number of ‘one-off’ impairments/write offs. • Dividends reduced, particularly in commodity companies. • However outside of banks the mark
Slide 30: Looking Ahead
For personal use only LOOKING AHEAD SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 31: Low Interest Rates Have Driven Valuations Higher
LOW INTEREST RATES HAVE DRIVEN VALUATIONS HIGHER For personal use only Source: FactSet SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 32: What the Long Term Trend of the Australian Market Looks Like
WHAT THE LONG TERM TREND OF THE AUSTRALIAN MARKET LOOKS LIKE (A$) For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 33: Where Does This Leave Us?
WHERE DOES THIS LEAVE US? For personal use only SHAREHOLDER MEETING NZ DECEMBER 2016
Slide 34: Australian Foundation Investment Company
AUSTRALIAN FOUNDATION INVESTMENT COMPANY For personal use only
Australian Foundation Investment Company — Investor Presentation (December 2016) on 6ix