Allan Gray-Orbis Global Equity Feeder AMETF · JSE:AGOGE
Allan Gray-Orbis Global Equity Feeder AMETF — Orbis SICAV Global Balanced Fund — Investor Presentation (March 2021)
48 slides from Allan Gray-Orbis Global Equity Feeder AMETF's investor presentation, Mar 24, 2021
Slide 1: Orbis SICAV Global Balanced Fund Update
Orbis SICAV Global Balanced Fund Update Alec Cutler and Matthew Spencer 24 March 2021
Slide 2: Agenda
Agenda 1. Performance and environment 2. Tour of the portfolio 3. Q&A
Slide 3: Performance
Performance
Slide 4: Global Balanced: long-term returns
Global Balanced: long-term returns 7.6% p.a. 18 7.3% p.a. 17 16 15 Value (US$) 14 3.5% p.a. 13 12 11 10 9 13 14 15 16 17 18 19 20 21 Since Inc. Returns (% annualised, US$) 5 Years 3 Years 1 Year (1 Jan 2013) O Orbis SICAV Global Balanced Fund, net 7.3 8.0 3.3 60.9 O Peer group, net: Morningstar USD
Slide 5: Orbis Global Balanced: returns across Covid period
Orbis Global Balanced: returns across Covid period Period return (%, in USD) Covid crash Recovery Round trip 12 Feb 20 to 23 Mar 20 to 12 Feb 20 to 23 Mar 20 18 Mar 21 18 Mar 21 Orbis SICAV Global Balanced, net (26.2) 60.9 18.7 Peer group, net* (19.8) 32.6 6.3 60/40 Index† (21.1) 42.5 12.4 Past perf
Slide 6: Sticking with our philosophy, even when it's uncomfortable
Sticking with our philosophy, even when it’s uncomfortable Returns of the ten shares that detracted most from returns in early 2020 Year to Pfizer vaccine %, local currency Pfizer vaccine news to news 28 Feb 2021 BP (54) 48 Royal Dutch Shell (55) 47 Schlumberger (61) 85 British American Tobacco (19)
Slide 7: Environment
Environment
Slide 8: Government bonds still offer a poor balance of risk and return
Government bonds still offer a poor balance of risk and return JP Morgan Global Government Bond Index yield to maturity and duration 10% 9.0 9% 8.5 Yield to maturity (LHS) Modified Duration (RHS) 8% 8.0 7% 7.5 6% 7.0 5% 6.5 4% 6.0 3% 5.5 2% 5.0 1% 4.5 0% 4.0 88 90 92 94 96 98 00 02 04 06 08 10 12 14
Slide 9: The passive 60/40 portfolio still trades near its worst valuation ever
The passive 60/40 portfolio still trades near its worst valuation ever Blended “P/E” ratio of a passive 60/40 portfolio 32 31x 30 28 26 24 22 20 18 16 14 12 10 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 28 Feb 2021 | Source: Refinitiv, Factset, Orbis. USD total returns. Passive balanced port
Slide 10: Valuation spreads are (still!) exceptionally wide
Valuation spreads are (still!) exceptionally wide Valuation spread: cheap half vs expensive half 40% Value cheap 35% Current valuation spread 30% 25% Growth cheap 20% 15% 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 28 Feb 2021 | Source: Worldscope, Orbis. Statistics are compiled from an in
Slide 11: Portfolio
Portfolio
Slide 12: Global Balanced: asset allocation
Global Balanced: asset allocation 100% Gold exposure and miners^ Corporate bonds Inflation-linked bonds, short- Global 80% term bonds, and cash government bonds Hedged equities 60% 40% Selected Global active stockmarkets equities 20% 0% 60/40 Index* Orbis Global Balanced Data is for the Orbis SICAV
Slide 13: Valuations for top holdings
Valuations for top holdings Price to Stock Country GICS sector Weight (%) 2021 EPS* TSMC Taiwan Technology 6.6 27 SPDR Gold Trust - Commodity-linked 5.8 Samsung Electronics Korea Technology 5.7 15** AbbVie US Health Care 3.7 10 NetEase China Comm. Services 3.4 20† British American Tobacco UK Cons. S
Slide 14: Tour of the portfolio
Tour of the portfolio
Slide 15: The correlation constellation
The correlation constellation Dots close together = stocks move together Dots far apart = stocks move differently 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Projection (UMAP) of 3-year weekly local equity returns. Stock
Slide 16: The correlation constellation
The correlation constellation Dots close together = stocks move together Dots far apart = stocks move differently China real estate developers US utilities 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Projection (UMAP) of
Slide 17: Regional clusters
Australasia Emerging Markets Continental Europe Japan North America United Kingdom 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Projection (UMAP) of 3-year weekly local equity returns. Stocks shown are constituents of the
Slide 18: Sector clusters: gold miners, US tech giants, oil majors
Communications Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Utilities Gold miners US tech giants Oil majors 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Appr
Slide 19: Top equity holdings
Top equity holdings TSMC Samsung Electronics BAT BMW Abbvie ING NetEase BP Royal Dutch Shell Data is for a representative account for the Orbis Global Balanced Strategy 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Project
Slide 20: Japanese trading companies
Japanese Mitsui trading companies Mitsubishi 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Projection (UMAP) of 3-year weekly local equity returns. Stocks shown are constituents of the FTSE World Index and MSCI Emerging Ma
Slide 21: Source: Company websites
Source: Company websites. 21
Slide 22: Source: Company websites
22 Source: Company websites.
Slide 23: Mitsubishi: Trading at a discount relative to history and the market
Mitsubishi: Trading at a discount relative to history and the market 5.0 Mitsubishi 4.5 Japanese market 4.0 3.5 Price to Book 3.0 2.5 2.0 1.5 1.0 0.5 0.0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 28 Feb 2021 | Source: Refinitiv. 23
Slide 24: Increased payouts leave Mitsubishi with a compelling yield
Increased payouts leave Mitsubishi with a compelling yield Mitsubishi dividend yield and payout ratio, with 10-year Japanese Government Bond (JGB) yield 45% 7% Mitsubishi dividend yield (RHS) 40% 6% Mitsubishi payout ratio (LHS) 35% 5% 30% 4% 25% 3% 20% 2% 10-year JGB yield (RHS) 15% 1% 10% 0% 5% (1
Slide 25: UK small caps
UK small caps Mitsui Mitsubishi Headlam Group B&M European Value Retail Burford Capital Balfour Beatty Drax Group 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Projection (UMAP) of 3-year weekly local equity returns. Stock
Slide 26: Underappreciated energy transition
Underappreciated Mitsui energy transition Mitsubishi Headlam Group B&M European Vestas Value Retail Windsystems AES Burford Capital Siemens Balfour Energy Beatty Drax Group Schlumberger 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approxim
Slide 27: DRAX: The past
DRAX: The past 28 Feb 2021 | Source: Shutterstock 27
Slide 28: DRAX: The present
DRAX: The present 28 Feb 2021 | Source: Shutterstock. 28
Slide 29: DRAX: underappreciated potential beyond 2027
DRAX: underappreciated potential beyond 2027 £3.5bn £3.0bn >£0.3bn £2.5bn £0.5bn £2.0bn £1.5bn £1.0bn £2.0bn £0.5bn £1.5bn £0.0bn Current market Est value if Est value of Potential upside value whole business biomass business from BECCS winds down in 2027 beyond 2027 28 Feb 2021 | Source: Refinitiv,
Slide 30: European banks
European banks Mitsui Mitsubishi Headlam Vestas B&M European Windsystems Value Retail AES Burford Capital Siemens Balfour Energy Beatty ING DNB Drax Bank of Ireland AIB Schlumberger 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximatio
Slide 31: Irish banks: stronger growth in Ireland vs the rest of the EU
Irish banks: stronger growth in Ireland vs the rest of the EU Annual real GDP growth 2019 2018 2017 2016 0% 2% 4% 6% 8% Ireland European Union 28 Feb 2021 | Sources: Eurostat. 31
Slide 32: Irish banks: strong balance sheets and cheap valuations vs peers
Irish banks: strong balance sheets and cheap valuations vs peers Balance sheet Valuation Leverage ratio† Price-to-book ratio 9% 0.6 8% 0.5 7% 6% 0.4 5% 0.3 4% 3% 0.2 2% 0.1 1% 0% 0.0 AIB Bank of European AIB Bank of European Ireland peers* Ireland peers* 28 Feb 2021 | Sources: Orbis, Refinitiv, Comp
Slide 33: Covid-bashed defensives
Covid-bashed Mitsui defensives Mitsubishi Headlam Vestas B&M European Windsystems Value Retail Asahi Group Holdings FEMSA Diageo AES Siemens Burford Balfour Energy Capital Beatty Drax ING DNB Comcast Bank of Ireland AIB Schlumberger 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depict
Slide 34: Comcast: a mostly stable business with some Covid-exposed parts
Comcast: a mostly stable business with some Covid-exposed parts Comcast earnings* Sky Filmed Entertainment Broadcast Television 2% 9% NBCUniversal 5% Theme Parks 7% Cable Cable Communications Networks 12% (including Broadband) 65% 28 Feb 2021 | Sources: Orbis, company reports. *Earnings refer to ear
Slide 35: Comcast: a mostly stable business with some Covid-exposed parts
Comcast: a mostly stable business with some Covid-exposed parts Comcast earnings* Covid impact on business Sky Hurt by Covid Filmed Helped by Covid Entertainment Broadcast Television NBCUniversal Theme Parks Cable Cable Communications Networks (including Broadband) 28 Feb 2021 | Sources: Orbis, comp
Slide 36: Travel and leisure
Travel and leisure Mitsui Mitsubishi Headlam Vestas B&M European Windsystems Value Retail Asahi Group Holdings Diageo AES FEMSA Burford Siemens Capital Balfour Energy Beatty Drax ING DNB Comcast Bank of Westfield Ireland AIB IAG MGM Resorts Schlumberger Southwest Airlines 28 Feb 2021 | Source: Orbis
Slide 37: Source: Pixabay and company information
Source: Pixabay and company information. 37
Slide 38: A stronger business than its peers
A stronger business than its peers Number of losses in last Credit Cash burn 40 years rating in 2020 ($bn) Investment 1 grade 3.3 18 Junk 8.7 15 Junk 8.0 14 Junk 7.7 28 Feb 2021 | Source: Orbis, S&P Capital IQ. S&P credit ratings. Cash burn defined as negative free cash flow in calendar year 2020. 3
Slide 39: Gold companies
Gold companies Mitsui Mitsubishi Wheaton Barrick Gold Headlam Precious Metals Newcrest Mining Vestas B&M European Windsystems Value Retail Asahi Group Holdings Diageo AES FEMSA Burford Siemens Capital Balfour Energy Beatty Drax ING DNB Comcast Bank of Westfield Ireland AIB IAG MGM Resorts Schlumberg
Slide 40: Long life reserves and resources
Long life reserves and resources Life expectancy of reserves 22 years 16 years 16 years 10 years 28 Feb 2021 | Source: Allan Gray Australia, Orbis, company financial statements. 40
Slide 41: 25% of the portfolio: clusters discussed today
25% of the portfolio Mitsui Clusters discussed today Mitsubishi Wheaton Barrick Gold Headlam Precious Metals Newcrest Mining Vestas B&M European Windsystems Value Retail Asahi Group Holdings Diageo AES FEMSA Burford Siemens Capital Balfour Energy Beatty Drax ING DNB Comcast Bank of Westfield Ireland
Slide 42: Not just diversified…
Not just diversified… Orbis Global Balanced 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Projection (UMAP) of 3-year weekly local equity returns. Stocks shown are constituents of the FTSE World Index and MSCI Emerging Mar
Slide 43: …also exposed to areas with more attractive valuations
…also exposed to areas with more attractive valuations Expensive Somewhat expensive Somewhat cheap Cheap Orbis Global Balanced 28 Feb 2021 | Source: Orbis, Refinitiv. Global equity market depiction based on based on Uniform Manifold Approximation and Projection (UMAP) of 3-year weekly local equity r
Slide 44: Key messages
Key messages 1. Bondmarkets and stockmarkets look expensive and unattractive in aggregate 2. Unusually compelling opportunities for relative value within stockmarkets 3. Our bottom-up ideas are diversified and, in our view, deeply undervalued
Slide 45: Q&A
Q&A
Slide 46: Notices (1 of 3)
Notices (1 of 3) For more information regarding the Orbis Funds please contact us: Orbis Investment Management among others, macroeconomic and political circumstances, constraints on liquidity or the repatriation of Limited, Orbis House, 25 Front Street, Hamilton HM 11, Bermuda. Mailing address: P.O
Slide 47: Notices (2 of 3)
Notices (2 of 3) Shared Investor RRF Share Classes (A) of Orbis Global Equity Fund and of the Orbis SICAV plus (b) a performance fee of 20% of the outperformance of each class of Fund share’s weekly Funds (Global Balanced, Emerging Markets Equity and Japan Equity): rate of return relative to its per
Slide 48: Notices (3 of 3)
Notices (3 of 3) Sources (when relevant) FTSE: FTSE World Index data source is FTSE International Limited ("FTSE”) © FTSE 2021. FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE under l icence. All rights in the FTSE indices and/ or FTSE ratings vest in FTSE and/o
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